Interview | Viriato Soromenho-Marques: ‘The European Union needs structural reform’

Viriato Soromenho-Marques

University of Lisbon scholar Viriato Soromenho-Marques is launching his book, which reflects on Portugal’s crisis within the framework of the European Union in Macau today. In an interview with the Times, the professor stressed that austerity measures have proven to be the wrong solution for Europe. Soromenho-Marques asserts that a monetary union should have been built based on a strong political platform. The European Union (EU) now requires structural reform if it wishes to survive.

Macau Daily Times (MDT) – EU leaders are attending talks in Berlin regarding Greece. How do you think the Greek situation will unfold?
Viriato Soromenho-Marques (VSM) – I think Greece is a good example of the situation that the Eurozone and the European Union are currently facing. On the one hand, it’s impossible for Greece to go on without liquidity, without money. We know that Greece is waiting on the EUR 7.2 billion that is still owing to them from the second bailout program. But if you look to the debt service they have to pay before December this year, they will need EUR 27 billion. So it’s a huge amount. Without a doubt, they will be discussing a third bailout program in Berlin.

MDT – So you believe there will be a third bailout?
VSM – No doubt. The problem is that Greece is completely out of options to pay the debt service before the end of the year. What’s at stake is the continuity of the EU, which might result in a shift in Eurozone policy regarding the countries currently stuck in bailout programs.
In my opinion, what Syriza wants is a new economic policy, as they need a certain degree of freedom; freedom to maneuver in order to create jobs and give back hope to the population. The Eurogroup, Germany in particular, although there are some exceptions, they want to keep on the track of austerity. In my opinion, that’s not just morally unacceptable, that’s politically a mistake and it’s a terrible economic error, because austerity is not the solution. If it were the solution, Greece’s problems would have already been solved.

MDT – What could be the solution then?
VSM – I don’t believe that the Eurogroup is going to be flexible enough. They should, but as far as I am concerned I think they will try to force the Syriza government into a kind of capitulation. It’s not a dialogue between allies. It’s a kind of combat or fight between enemies. If the Syriza government is obliged to capitulate I think they will receive the third bailout package. But probably they will buy a war back home, meaning that many factions of Syriza will leave the government and Varoufakis [the finance minister] will resign. And that will again trigger political and social turmoil.
MDT – Do you think part of the Greek debt should be forgiven?
VSM – I think we need to have a European solution, not just a solution for Greece. It’s interesting to see that Syriza spoke quite a lot about debt renegotiation before the elections. But after the elections the debate was mainly around the freedom to maneuver in terms of economic policy.
For Varoufakis and the Greek government, the essential thing to do is to put an end to austerity. The reason why this suggestion to put a stop to austerity is being strongly rejected by the Eurogroup is not because of Greece, but because of the whole of the Eurozone. If Athens were allowed to go its own way, immediately other countries would want to follow.

MDT – But would it be possible to pay the debt without austerity measures?
VSM – I think we need a common European policy because the debt is a European debt. It’s a mistake to think that we have a Portuguese or a Greek debt, since we are in a monetary union. It’s a flawed monetary union as instead of building convergence, it’s building fragmentation. For instance, by the end of 2004, nine countries in the eurozone, representing a little less than 25 percent of the population, had over 50 percent of the overall unemployment. So it’s completely unfair. Since we have the same currency we need to have solidarity and currency management.  We built a monetary union on the wrong basis and the wrong platform. It’s very fragile. We should never have built a monetary union without building a political platform. Now we are seeing the debate as if our workers in Germany are again immigrants and not members of the union. If we have the same currency we are not foreigners.
The second mistake is the absence of a solidarity mechanism to help countries or areas in the union against asymmetric shocks. We also need a contribution from the EU budget towards social policies; namely, part of the unemployment benefits should be from the European origin. The third mistake is that there’s no political coordination. We need to think in broader European terms and avoid competition between European countries. Finally, we need political legitimacy. We need to put the citizen at the helm of this process. This is a huge reform program for the European Union if the EU wants to survive.
MDT – What could happen if the Eurozone collapsed?
VSM – I am very worried about the consequences. The first thing is that it’s not correct to assume that the Eurozone is currently so strong that it will be able to accommodate the exit [of one country]. That’s wrong. If that happens, Greece would need to reintroduce their own currency, otherwise they would starve.
But that would be very hard for the Greeks after so many years of suffering, because many countries would not sell things to them anymore; there would be retaliations if they were not to pay the debt and we could get political and social turmoil again in Greece. It would be a nightmare for them. The Greek exit is a serious issue, we should do everything possible to keep Greece in the Eurozone and should implement the structural reforms that are needed. I fear that if we have an economic crash in the Eurozone, we could have an economic tsunami around the world, given the fact that the Euro would be worth nothing.

Talk to be held today

Professor Viriato Soromenho-Marques of the University of Lisbon is giving a talk today on climate change at the University of Macau. The Jean Monnet Seminar, entitled “The Double Face of Climate Change: From Ontological Threat to Opportunity for Global Peace,” will be held at 6.30 p.m at the Faculty of Law (G003, E32). The seminar will be conducted in English. Yesterday, the professor launched his book, “Portugal na Queda da Europa” (“Portugal at the Fall of Europe”), at the Military Club. The book considers the extent of Portugal’s economic crisis within the framework of the EU. The scholar teaches Political Philosophy and European Ideas within the Department of Philosophy and European Studies at the University of Lisbon.

UM to screen ‘the french minister’

The French film “Quai d’Orsay” (English title: “The French Minister”) will be screened at the University of Macau (UM) on June 9 at 6.30 p.m. This will be the fourth screening as part of the European Union film cycle organized by the European Union Academic Program in Macau. The film details the relationship between a young graduate of the National School of Administration, who is recruited as a speechwriter to France’s Minister of Foreign Affairs, and the minister himself. A discussion will be held after the film’s screening.