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Nightmare vision for Europe
as EU chief warns 'democracy could disappear' in Greece, Spain and Portugal - EU begin emergency billion-pound bailout of Spain
- Countries in debt may fall
to dictators, EC chief warns
- 'Apocalyptic' vision as some states run out of money
Democracy could ‘collapse’ in Greece, Spain and Portugal unless urgent action is
taken to tackle the debt crisis, the head of the European Commission has warned.In an extraordinary briefing to trade union chiefs last week, Commission President Jose Manuel
Barroso set out an ‘apocalyptic’ vision in which crisis-hit countries in southern Europe could fall victim to
military coups or popular uprisings as interest rates soar and public services collapse because their governments run out
of money.The stark warning came as it
emerged that EU chiefs have begun work on an emergency bailout package for Spain which is likely to run into hundreds of billions
of pounds. A £650 billion
bailout for Greece has already been agreed.John Monks, former head of the TUC, said he had been ‘shocked’ by the severity of the warning from Mr Barroso,
who is a former prime minister of Portugal. Mr Monks, now head of the European TUC, said: ‘I had a discussion
with Barroso last Friday about what can be done for Greece, Spain, Portugal and the rest and his message was blunt: “Look,
if they do not carry out these austerity packages, these countries could virtually disappear in the way that we know them
as democracies. They've got no choice, this is it.”‘He's very, very worried. He shocked us with an apocalyptic vision of democracies in Europe collapsing
because of the state of indebtedness.’Greece, Spain and Portugal, which only became democracies in the 1970s, are all facing dire problems with their public
finances. All three countries have a history of military coups.Greece has been rocked by a series of national strikes and riots this year following the announcement
of swingeing cuts to public spending designed to curb Britain’s deficit. Spain and Portugal have also announced austerity measures
in recent weeks amid growing signs that the international markets are increasingly worried they could default on their debts. Other EU countries seeing public protests over austerity plans include Hungary, Italy and Romania,
where public sector pay is to be slashed by 25 per cent.Deputy Prime Minister Nick Clegg, who visited Madrid last week, said the situation in Spain should serve as
a warning to Britain of the perils of failing to tackle the deficit quickly. He said the collapse of confidence in Spain had seen
interest rates soar, adding: ‘As the nation with the highest deficit in Europe in 2010, we simply cannot afford to let
that happen to us too.’Mr Barroso’s
warning lays bare the concern at the highest level in Brussels that the economic crisis could lead to the collapse of not
only the beleaguered euro, but the EU itself, along with a string of fragile democracies. DICTATORSHIPSGREECE: Georgios
Papadopoulos was dictator
from 1967 to 1974.
The Colonel led the military coup d'etat in 1967 against King Constantine II amid political instability.
He was leader of the junta which ruled until 1974.
Papadopoulos was
overthrown by Brigadier Dimitrios Ioannidis in 1973. Democracy was restored in 1975.SPAIN: General Francisco
Franco led Spain from 1936
until his death in 1975. At the end of the Spanish Civil War he dissolved the Spanish Parliament and established a right-wing
authoritarian regime that lasted until 1978. After his death Spain gradually began its transition to democracy.PORTUGAL: Antonio de Oliveira Salazar's regime and its secret police ruled
the country from 1932 to 1968. He founded and led the Estado Novo, the authoriatan, right-wing government that controlled
Portugal from 1932 to 1974. After Salazar's death in 1970, his regime persisted until it eventually fell after the Carnation
Revolution.But it risks infuriating governments
in southern Europe which are already struggling to contain public anger as they drive through tax rises and spending cuts
in a bid to avoid disaster.Mr Monks yesterday
warned that the new austerity measures themselves could take the continent ‘back to the 1930s’.In an interview with the Brussels-based magazine EU Observer he said:
‘This is extremely dangerous. 'This
is 1931, we're heading back to the 1930s, with the Great Depression and we ended up with militarist dictatorship.‘I'm not saying we're there yet, but it's potentially
very serious, not just economically, but politically as well.’Mr Monks said union barons across Europe were planning a co-ordinated ‘day of action’
against the cuts on 29 September, involving national strikes and protests.David Cameron will travel to Brussels on Thursday for his first summit of EU leaders since the
election.Leaders are expected to thrash
out a rescue package for Spain’s teetering economy. Spain is expected to ask for an initial guarantee of at least £100
billion, although this figure could rise sharply if the crisis deepens.News of the behind-the-scenes scramble in Brussels spells bad news for the British economy as
many of our major banks have loaned Spain vast sums of money in recent years.Germany’s authoritative Frankfurter Allgemeine Newspaper reported that Spain is poised
to ask for multi-billion pound credits.Mr
Barroso and Jean-Claude Trichet of the European Central Bank are united on the need for a rescue plan.The looming bankruptcy of Spain, one of the foremost economies in Europe,
poses far more of a threat to European unity and the euro project than Greece. Greece contributes 2.5 percent of GDP to Europe, Spain
nearly 12 percent.Yesterday’s report
quoted German government sources saying: ‘We will lead discussions this week in Brussels concerning the crisis. It has
intensified to the point that the states do not want to wait until the EU summit on Thursday in Brussels.”’At the end of last month the credit rating agency
Fitch downgraded Spain, triggering sharp falls on stock markets.On Friday the administration in Madrid continued to insist no rescue package was necessary. But
Greece said the same thing before it came close to disaster.Yesterday the European Commission and the statistics authority Eurostat met to consider Spain‘s
plight as many EU countries consider the austerity package proposed by the Madrid administration insufficient to deal with
the country‘s problems.
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