My latest piece for DIPLOMAT tackles the morality of the #Eurozone crisis. What happy days they were, when that was all the EU had to fret about!

Thus:

When the Cold War ended and the eurozone was set up as a massive stride forward in European integration, one of the key problems was selling the idea to an uneasy German public.

Germany had grown from the rubble of 1945 into Europe’s biggest economy in good part by relying on Honest Money: the stern Deutsche Mark. The horrible memory of Germany’s hyperinflation in the early 1920s lingered on: in November 1923 one US dollar would buy 4,210,500,000,000 German marks (approximately).

Germans therefore wanted iron guarantees that they would not lose out by giving up the Deutsche Mark in favour of this new fangled euro. In particular, they did not like the idea that ‘their’ currency would be shared with other European countries to their south whose ideas of discipline, hard work and respect for rules might be, ahem, a bit too ‘flexible.’ Germany must avoid being the sucker of last resort, subsidising the fecklessness of others!

Germany’s leaders and experts took these concerns seriously. They toured Germany to address public meetings to assure the public that under the robust rules of the eurozone the euro would be just as strong as the Deutsche Mark. Verily, they proclaimed that the rules were so tough that the whole project slowly but surely would make less disciplined EU member states cast aside their idle ways and become more like Germany!

Here’s something very few people know. That wasn’t true.

As the Greek eurozone crisis started to accelerate, one of the German officials right at the policy heart of the eurozone project, and who had taken part in these public meetings, glumly told me a dirty secret.

The eurozone architects had devised strict economic criteria for countries to join the eurozone, to make sure that the currency was launched on a rock-solid basis. To their dismay, they had discovered that Belgium did not meet all these criteria. Yet it was unthinkable that the euro be launched without Belgium as an EU founding member and Brussels as Europe’s symbolic capital. So a furtive fudge was done to allow Belgium to join. Hurrah!

In other words, right from the outset the eurozone was constructed on false promises. Should the Greeks be blamed for sensing these ambiguities and pushing their luck by lying about their public finances when they joined the eurozone some years later? Who can say? But here we are today, with one impossibly expensive and acrimonious existential crisis after another…

Hence, questions about the very morality of this situation:

The European Union at its heart reflects a tension between market disciplines and the so-called ‘European social model,’ as expressed through ‘European solidarity.’ This latter idea is never pinned down. It suggests that those countries who for whatever reason ‘lag behind’ have an overriding moral claim to generous and unrelenting support from those more fortunate than themselves.

But what is the precise nature of that moral claim? If rich EU member A agrees to help not-so-rich EU member B, is A entitled to put firm conditions on that support? What if they are not then met? What if EU member B squanders that support but then clamours for more? Should EU member A throw yet more money at EU member B, or instead direct it at even less rich EU member C, who (so far) is behaving responsibly?

What if rich EU member A cheats now and again? Does that mean that EU member A has no right ever to demand sacrifices from poorer EU member B when EU member B cheats a lot? Is morality between countries different from morality between people? Not really.

This is why some former communist countries that are now members of the eurozone have been first in line to demand stringent conditionality for Greece. We have been through a lot worse than this. We have taken our medicine. You do so too!

Remember the Bible parable of the Prodigal Son who squandered his fortune but finally saw the error of his ways and crept back home? He was warmly welcomed by his father, who explained his decision to an older brother unimpressed by the precedent being set: “This brother of yours was dead and is alive again; he was lost and is found.”

The moral force of this story comes from the fact of the erstwhile wastrel’s sincere repentance, and his father’s willingness to accept it at face value. A new deal is in effect struck. In return for the son’s unambiguous willingness to work hard to put things right, the father welcomes him back and treats him well. The Bible does not say that the wastrel is ‘entitled’ to carry on sponging off his relatives indefinitely or that they have to show him unqualified ‘solidarity’.

So as we look at Greece’s fevered manoeuvres to persuade partners and markets to lend them yet more money to stave off disaster, the issues facing EU leaders as they glare at each other across the table boil down to these questions:

Is Greece serious about abandoning its wasteful ways? Can Greece in fact abandon its wasteful ways? What if it does everything it can, but that still does not make Greece meet eurozone standards?

As of mid-September 2015, everyone is doing their best to convey the impression that all is now back on track. Other than thousands of ‘migrants’ arriving in Greece day by day and expecting something better than what they have left. That crisis in turn is raising new issues of ‘solidarity’ involving hard cash. You won’t help manage this crisis when we ask nicely? No? Fine. Don’t expect us to give you free money!

It’s amazing that the public language of the EU has now moved to such crude (or one might say helpful) threats:

“The negotiations situation is such that nothing happens to countries which refuse. We need to talk about ways of exerting pressure. These are often countries that receive a lot of structural funds from the European Union,” German Interior Minister Thomas de Maiziere told ZDF.

European Commission president Jean-Claude Juncker “has suggested that we should look at whether these countries should get less structural funds, which I agree with,” he added.

Seems reasonable. But how in practice to make such a threat work, to the point of scaling back the EU funds received by those member states who refuse to do what Germany and other countries think is reasonable for refugees/asylum-seekers?

A senior Czech official said threats to cut such funding had no basis in law. “German threats that central Europe will be punished by cutting cohesion funds are empty but very damaging to all,” Tomáš Prouza, the Czech State Secretary for the EU, said.

Slovakia insisted it would never support mandatory refugee quotas. In response to Germany’s proposal, Prime Minister Robert Fico said that never before had a country been punished for having a different opinion. Taking such a step would mean “the end of the EU”, he said.

What was that? The end of the EU?!

When does the EU end? When it finally and formally is dissolved in favour of something else? Or when the implicit understandings that hold it together evaporate, even if the outward processes stagger on indefinitely?