posted on | written by Tara Mulvany
I recently attended a discussion in Ibec regarding the implications of a Greek exit from the euro zone. Former President of the European Parliament Pat Cox and Ibec CEO Danny McCoy outlined all the good reasons why it was in the best interests of the Greek people to work out a deal on their debt crisis. The concern was that to avoid a deepening economic, and potentially humanitarian crisis, the Greek people needed to accept their fate and avoid a chaotic euro exit at all costs.
There were no arguments on the Ibec position from anyone around the table. As you would expect, the employers and business representatives present all appeared to be in agreement that, if not quite shattered, Greek’s reputation politically, economically and socially was certainly on the line.
But, as a PR consultant and a European citizen, I couldn’t help but look at it from another perspective. In my view, the defiance of the Greek people has put the reputation of the European Community and its leaders at much greater risk of long term damage and placed them in a catch 22 situation.
Europe had two options. One was to heavy-handedly force the Greeks to bow to the demands of European leaders and to accept an austerity package that their citizens clearly did not want. The other was to cut them loose and let them spiral into possible economic chaos and accept all the worldwide media coverage of Greek hardship cases and national distress that an exit would bring. The message to ordinary European citizens being - one day you’re our fellow citizens, the next you’re cast into the shadows.
This week’s agreement that paves the way for the possibility of a third bailout if passed by the Greek parliament might calm the situation in the short term. But I doubt it. Amidst the economic hyperbole and hysteria, there is a reputational crisis brewing within the European Community.
Commentary from the likes of Nobel prize-winning economist Paul Krugman isn’t helping. In a blog for the New York Times this week, he asks ‘Who will ever trust Germany’s good intentions after this?’ and concludes ‘The European project — a project I have always praised and supported — has just been dealt a terrible, perhaps fatal blow. And whatever you think of Syriza, or Greece, it wasn’t the Greeks who did it.’
Just like in business, when a crisis hits, the greatest challenge of all is to try to stand back and take a look at the situation from the outside in. None of the European leaders seem to be doing that right now and with a UK referendum on Europe looming, an aerial view couldn’t be more needed. As German Chancellor Angela Merkel herself said ‘The most important currency of all has been lost - and that is trust’