Did Greece con the EU?

This is an interesting perspective offered by ZeroHedge.
Surely many Greeks and other proud Europeans will recall that some 30 years ago, it was none other than Greece that called the shots, and had nearly unlimited leverage in Europe courtesy of its veto: a veto which back then nearly derailed the entry of Spain and Portugal into Europe's Common Market.
Ah, what joys to the impoverished people of Greece, when what is now the Eurozone's poorest country would singlehandedly determine the future of Europe. It is for their sake that we take this trip down memory lane, going all the way back to 1985 with the following article from the NYT, laying out a very different European world.


BRUSSELS, Saturday, March 30— Western European leaders of the Common Market began crucial negotiations here Friday night with Prime Minister Andreas Papandreou of Greece, who has threatened to veto the entry of Spain and Portugal into the market next year.

After late-night talks with Mr. Papandreou, the leaders said early today that he stuck by his vow to block the two countries unless the other market members gave Greece nearly $2 billion in special agricultural aid.

Greece has said it needs the money to offset the effects on its economy of increased competition from Spanish and Portuguese products when those nations join the market, formally called the European Economic Community.

The European leaders gathered in Brussels on Friday afternoon, just hours after their foreign ministers worked out terms to make Spain and Portugal the 11th and 12th members of the trading group. It was thought that the ministers' accord had brought an end to several years of negotiations over the entry of the two nations. Chairman Expresses Disappointment

But today, the meeting's chairman, Prime Minister Bettino Craxi of Italy, told reporters he was ''disappointed'' by the lack of agreement so far in talks with Mr. Papandreou. Other high Italian officials said a settlement seemed unlikely at this two-day meeting.

A spokesman for Prime Minister Margaret Thatcher of Britain said of the negotiations Friday night, ''Frankly, we are not getting anywhere.'' The British spokesman said all the other Common Market governments were ''delighted with the enlargement agreement.''

Many of the leaders called the accord on the complex package of membership terms, which Greece had accepted, a historic step in Europe's quest for greater unity.

''The European Community is alive and in the final phase of its completion,'' Prime Minister Wilfried Martens of Belgium said Friday as the session opened.

Mr. Craxi said, ''Europe is now finally achieving its true shape.''

Admitting Spain and Portugal should also help the Common Market solve its longstanding fiscal problems and enable it to concentrate on strengthening free trade between the members and building up their industrial and technological base.

Some Action on Budget

Last year, the member nations agreed to reduce Britain's contribution to the organization because the British Government complained it was too large. The market also decided to increase the amount of tax revenues that member governments pay to the Common Market.

But West Germany linked its acceptance of that plan to a successful conclusion of the negotiations with Spain and Portugal, saying it would refuse to pay more unless the 10 members agreed to admit the two countries at the start of next year.

Many European officials also say they hoped the expansion will increase public support in Spain for staying in the North Atlantic Treaty Organization, to which all other Common Market members except Ireland belong. That support would help Prime Minister Felipe Gonzalez of Spain win a referendum scheduled on that issue next year.

Prime Minister Papandreou's threat centers on a plan for the other market countries to finance a new agricultural subsidy. His plan, known as Integrated Mediterranean Programs, would help Greek, Italian and French farmers adapt to the increased competition that their wine, fruit, olive oil and other products would face when Spain and Portugal join the market.

Threat Carries Weight

Mr. Papandreou can carry out his threat because the entry of the new member nations will go before the parliaments of all the Common Market members, as well as the parliaments of the two countries seeking membership. If approved, Spain and Portugal would become members on Jan. 1, 1986.

Other market members also take Mr. Papandreou's threat seriously because of his long record of provocative statements against other Western powers.

In particular, Mr. Papandreou has threatened to withdraw from both the Common Market and NATO and to close United States military bases in Greece.

At the last high-level meeting of Common Market nations in Dublin last December, Mr. Papandreou angered other leaders by demanding that the market pay the three present Mediterranean members $6 billion over five years in special agricultural aid, with about $2 billion going to Greece. Chancellor Helmut Kohl of West Germany and Prime Minister Thatcher of Britain immediately dismissed the sum as too large.

Since then, Jacques Delors, president of the Common Market's executive commission, has offered to give the farmers in Greece, France and Italy $1.4 billion in grants over the next five years and $1.7 billion in loans.

Compromise Seems Possible

Mr. Papandreou was reported by other delegations Friday to have said he was willing to negotiate on Mr. Delors's proposals, provided that Greece gets close to the $2 billion that it would have received under Mr. Papandreou's demand. But Chancellor Kohl's spokesman said the trade group's offer was still too large for Bonn to accept.

Officials from several market countries noted that Mr. Papandreou faced difficult domestic pressures that might make it hard for him to compromise.

They mentioned the national elections that are due in Greece by October, saying the Prime Minister had an obvious interest in being seen as fighting hard for the best possible deal in Brussels.

But Mr. Delors has said he will withdraw his compromise offer if Mr. Papandreou rejects it and that his next proposal will be less generous to Greece.

Back then, the Greek bluff succeeded:

European leaders resolved a bitter financial dispute with Greece today, paving the way for Spain and Portugal to join the Common Market at the start of next year.

Prime Minister Andreas Papandreou of Greece had threatened to veto an agreement reached this week on Iberian membership unless the other nine members gave Greek farmers $2 billion in special subsidies to help them compete with Spain and Portugal.

But after two days of negotiations at a European Economic Community meeting here, Greece was persuaded to accept about $1.4 billion in new agricultural aid in return for lifting its veto threat.

* * *  

After two days of bargaining, the 10 Common Market Governments
agreed on a $4.4 billion package of new subsidies and loans for Greece,
France and Italy. Greece will get about $1.4 billion of this money over
seven years.

Announcing the agreement, Prime Minister Bettino Craxi of Italy, who was the chairman of the conference, said it marked a ''historic moment in Europe's development.''

Jacques Delors, the new president of the Common Market's executive commission, said, ''The family quarrel is over, the family will be enlarged, and we can all now think of the future.''

Oh how wrong he was... but the real question is: can the Greek bluff succeed again tomorrow?

What do I think?

All the Southern European countries simply cheated  ("massaged" the countries' data) so they could get into the EU and borrow at the low Germany's rates of the moment to start programs that otherwise they could not afford. And now they are in trouble.

This is one of the main reasons Spain, Portugal, Greece, and Italy are in disarray.

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Since 1977

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