ZHAO Yongsheng: France set to play vital role in crisis talks

The result of last Sunday's referendum in Greece showed that the majority (61.3 percent) of Greek voters had rejected the Troika's proposed austerity policies, which have been a condition of financial aid for the country. This is undoubtedly a seismic event because it means that for the first time in EU history the exit of a member state, dubbed "Grexit," is a serious possibility.

Talks have been held in Paris, with French President François Hollande inviting German Chancellor Angela Merkel, Greek Prime Minister Alexis Tsipras, and other top EU figures to try to find a way out of the crisis.

France is only the second-largest economy in the eurozone after Germany, so why has Paris become the center of efforts to deal with the earthquake triggered by the Greek referendum? In my opinion, it is because France is playing the leading role in the "post-Greek referendum" Europe. 

Media reports have played up the seriousness of the referendum result, but from my point of view, the recent negotiations have been like a "Tom and Jerry" game. Both sides - Greece and its EU creditors - are fully aware of the opposite side's fundamental position: the EU is eager to keep Greece in the eurozone even at a very high price and the Greeks are eager to stay, but not at any price.

Unfortunately, the result of the referendum has immediately divided the eurozone into two blocs. One is South Europe, in which many people are happy, even excited, about the Greeks' rejection of EU austerity policies. The other bloc is North Europe, which feels uneasy and angry about Greece's intransigence, with many now calling for Grexit without delay.

The economies of North Europe are generally stronger than those in the south. Germany is the largest economy in Europe, and Austria, Belgium and Holland are also famous for their strong economic performance. The economies of South Europe, including Spain and Italy, have been much harder hit by the economic travails of recent years.

Without France, I'm not convinced that the Northern and Southern Europeans can find reconciliation this time, due to their extreme positions and mutual misunderstandings. Geographically speaking, France has a unique advantage in the negotiations: the north of the country is part of North Europe and the south is closer to South Europe, so the French find it easier to see both sides of the argument. Given this advantage, France can play a key role as mediator between North and South Europe.

Europe is noted for its democratic values, but while the Greek people used democracy to challenge EU austerity policies, German people use democracy to put pressure on their leaders to reject Greek demands. At least 50 percent, and possibly as much as 75 percent of Germans want Greece to leave the eurozone, according to different sources. Merkel emphasizes the word "responsibility" while Tsipras likes the word "solidarity." Hollande is trying to find a compromise between Germany and Greece, and advances three words - "responsibility, solidarity and rapidity" - to try to settle the crisis. 

European Council President Donald Tusk gave a severe warning on Tuesday. "The stark reality is that we only have five days to find the ultimate agreement. Until now I have avoided talking about deadlines, but tonight I have to say it loud and clear: The final deadline ends this week. All of us are responsible for the crisis, and all of us have a responsibility to resolve it," he said.

This is the last chance for Greece. On Sunday, European leaders will meet for a summit that will decide whether Greece gets another bailout or leaves the eurozone. Evidently, François Hollande and his French team will have lots of things to do in the coming five days so that a consensus can be found to avoid the bankruptcy of Greece and maintain the monetary union that is so precious for Europeans in the modern world of globalization. 

Last but not least, China may be able to offer vital assistance if a compromise can be found between the views of North and South Europe before the deadline. With its excess production capacity and excess capital, China can participate in Greece's reconstruction. The EU creditors can ensure the survival of Greece, but China can ensure its recovery.

The author is a Paris-based economist and vice-president of the China-France Association of Lawyers and Economists. bizopinion@globaltimes.com.cn

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