In Greek crisis, one big unhappy EU family

Sun Jul 19, 2015 4:12am EDT
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By Paul Taylor

BRUSSELS (Reuters) - The latest paroxysm of Greece's debt crisis has exposed growing rifts in the euro zone which, unless addressed soon, could lead to the break-up of European monetary union, the EU's most ambitious project.

The most worrying sign for European leaders is that public opinion and domestic politics are pulling them increasingly in opposing directions - not just between Greece and Germany, the biggest debtor and the biggest creditor, but almost everywhere.

Germans, Finns, Dutch, Balts and Slovaks no longer want taxpayers' money to go to bail out Greeks, while the French, Italians and Greeks feel the euro zone is all about austerity and punishment and lacks solidarity and economic stimulus.

With central and east European states growing more assertive and the Dutch and Finns facing mounting domestic constraints, a compromise between euro zone leaders Germany and France, increasingly hard to find over Greece, is no longer sufficient to settle the problems.

There are so many stakeholders with divergent views that crisis management is becoming ever more difficult. A far-reaching reform of the 19-nation currency area's flawed structure seems a remote prospect.

After weeks of late-night emergency meetings of leaders and finance ministers, culminating in a tense all-night summit, the euro zone produced a fragile deal to keep Greece afloat by making it a virtual protectorate under intrusive supervision.

Few, if any, of the main protagonists think it will work.

Greek Prime Minister Alexis Tsipras said it was a bad deal that would make life worse for Greece but he had swallowed it because the alternative was worse. German Finance Minister Wolfgang Schaeuble said Athens would have done better to leave the euro zone - "temporarily" - to get a debt write-off.   Continued...

Greek Prime Minister Alexis Tsipras arrives for a parliamentary session in Athens, Greece July 16, 2015.  REUTERS/Alkis Konstantinidis