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Guest: Cyprus, European Union debt problems create a lost generation
Eurozone policies and the latest crisis in Cyprus are a threat to Europe’s youth generation, according to guest columnists Wolfram Latsch and Taso Lagos.
Special to the Times
AS the economic turbulence in the Europe Union revives with the crisis in Cyprus, we worry about the “Lost Generation” of youth in Europe who have no prospects of work in the foreseeable future.
Last fall, the European Union donated its Nobel Prize money to benefit children in war because the young are the “future of any society.”
At the same time, eurozone mechanisms and policies threaten Europe’s youth unintentionally — but effectively. By hurting the young they threaten the future of European integration, a vision that has helped keep Europe at peace for more than two generations.
The European Union allowed weaker governments and states of Europe to borrow previously unimaginable amounts of money, leaving many of the Mediterranean countries, and especially Greece, burdened with unsustainable levels of debt.
Debt is just another way of borrowing from future generations, the unborn who have no voice in the political process.
The lost generation is not limited just to Europe. The United States is struggling with its own high youth unemployment, skyrocketing college tuition, the growing divide between the employable and the non-skilled. These conditions create good jobs for some and bleak prospects for many others. Paying off our national debt is an American problem, too.
When cheap money swept into Greece after it joined the eurozone in 2001, it went to consumer spending. Dolce & Gabbana handbags and Manolo Blahnik shoes became the rage in Athens.
The borrowed euros were not invested in productive ways to benefit future generations and allow them to service these crushing debts.
The political elites and rulers in countries like Greece paid for the goods, entitlements and pet projects of today’s voters. They failed to make the minimum required payments on their national credit card and the bills are now many years overdue.
But the political elites in Greece and other weak, heavily indebted countries cannot easily ditch the euro. Doing so would expose them to humiliation and ridicule of historic proportions. So they continue their folly, exchanging the golden cage of the euro for the iron cage of austerity.
In Cyprus now, that means a 10-percent surcharge on all bank accounts with more than $130,000. In saver countries like Cyprus, this touches upon many in the middle class, including ordinary British soldiers stationed on the island.
But austerity also means unemployment and devastated lives, especially among the young and unskilled in Greece, where more than half of all 18- to 25-year-olds are unemployed.
Without job prospects and unable to easily move to Europe’s wealthier countries, young Europeans cannot earn incomes high enough to help pay off their governments’ enormous debts.
Deprived of their future by their own parents, these young people increasingly fall prey to the political extremism and violence that European integration was supposed to prevent.
In Greece, the neo-Nazi party Chrysi Avgi (Golden Dawn) harasses and violently attacks foreigners while donating food and blood only to those deemed 100 percent Greek.
One solution is simple but elusive: Greece and Cyprus should consider leaving the eurozone and building new competitiveness and a new future for themselves with new and less-expensive currency.
Doing so would allow the young people of Greece and Cyprus to work for the present and build their own future while paying off a more sustainable level of debt agreed to by all the countries involved.
Leaving the euro would not be easy, painless or cheap. But, as an old German saying goes, an ending with horror is better than never ending horror. If giving the young people of some countries a future means abandoning a small piece of the European dream, then it may be a price worth paying.
The lesson in politics and in economics is the bill will always come due. The only question is: Who is forced to pay?
Wolfram Latsch, left, teaches at the University of Washington’s Jackson School of International Studies. Taso Lagos is program director for the UW’s Greece Study Abroad Program.