Eurozone crisis part 2

With the tedious inevitability of a long-lasting B-movie franchise, another episode of the Eurozone Crisis is shortly to be released, this time with some new lead characters.  Since we reported on the temporary resolution of the Eurozone crisis six months ago, things have proceeded fairly smoothly. The Germans have continued to impose rigorous financial efficiency on the rest of the zone, by requiring the vulnerable countries (notably Greece, Italy and Spain) to make swathing cuts in government expenditure with the intention of balancing their budgets. To an extent, this seems to have worked, as the interest rates on their debt have fallen. The citizens of these countries, however, are significantly disgruntled at the poverty these cuts are imposing.

There is a fairly compelling argument that balancing the books will not in itself bring the Eurozone out of recession, since some amount of government spending is necessary to stimulate the economy back into growth. The Germans of course, who face the bill for keeping the fragile economies going, are reluctant to countenance any increase in government spending, and of course don’t need to do this at home since their own manufacturing sector is doing very nicely.

Two events occurred last Sunday which will significantly threaten the fragile consensus over the German approach to Eurozone stabilisation. Francois Hollande, who was elected President of France last Sunday – the first Socialist President since Francois Mitterand left office in 1995 – believes in government stimulation of the economy.  ‘Austerity can no longer be the only option,’ he said. This means that the ‘Merkozy’ consensus which saw France and Germany together working to control government debt is now likely to be shattered, with France moving to a position challenging the Germans. Both sides recognise the danger of this and are keen to appear conciliatory.  Mrs Merkel, the German Chancellor, was the first leader to phone and congratulate Mr Hollande, who in turn will visit Germany for talks immediately after his investiture on 15th May.

Nevertheless, the argument seems to be swinging against the Germans as the Eurozone economy bumps along the bottom, and many people are realising that the German approach has not delivered recovery. The Eurozone may be about to change course. Hollande has a powerful ally – Mario Draghi, the president of the European Central Bank, who recently told the European Parliament ‘We have had a fiscal compact. Right now, what is in my mind is to have a growth compact.’

The second major event was the result of the Greek general election, which took place on the same day as the French presidential one. Many Greeks are extremely unhappy with the austerity imposed by last year’s EU-IMF bailout of the Greek economy, and disgruntled voters deserted the main political parties en masse. The protest vote was garnered by radical parties of the left and the right.  The second largest party, Syriza, firmly rejects the terms of the EU bailout, which means it cannot ally with the two other largest parties, who are pro-austerity, to form a government. There may have to have another election, which could well see Syriza improve its position.

This means that the government which eventually emerges is far more likely to reject the extreme measures which have been imposed on it in exchange for the bailout of its economy. This will lead either to the exit of Greece from the Euro – something which is already being discussed, albeit in reasonably guarded terms – or a renegotiation of the terms, which will not go down well in Germany, where voters are already unhappy at working long hours and retiring late in order to support the ‘lazy’ Greeks. Mrs Merkel faces a general election next year and after suffering recently in local elections she will be keen to avoid upsetting her voters. Germany has warned Greece that there will be no more money if it fails to keep to the agreed terms.

The ongoing uncertainty will ensure that the value of the Euro on international markets will remain depressed, and European mission workers will continue to find it hard to raise funds for their ministry.

City to City Conference

Last week Syzygy was at the City to City Conference in Berlin, where the headline speaker was pastor Tim Keller from the US, supported by a number of well-known church-planting specialists from a variety of European countries.  It was great to hear so many practical success stories and to meet so many young people all enthusiastically involved in church planting across the continent.  25 different countries were represented, and although some of their contingents were small, it was good to hear positive feedback from people from Ireland, Portugal, Greece and Russia, not countries normally associated with church-planting success.

Tim Keller was eloquent, thought-provoking and provided significant insights into a traditional-style church plant.  He has clearly thought through what he has done at Redeemer in New York and gave some detailed but necessarily condensed tips, particularly about understanding and engaging with city dwellers as opposed to suburbanites.  The most significant one was also one of the most obvious: if you do not really love the city you’re called to, the locals will see through you and not respond.

City to City Europe is a network growing out of Redeemer City to City, the international ministry of Keller and others, and has a vision for planting churches in city centre communities rather than the suburbs.  Their style is fairly traditional although their methodology is not, and if you are looking to plant an urban church anywhere in the world, you will find resources and networking opportunities through them.  They have on board people who know what they are doing, and to demonstrate it they have put on youtube some good quality videos about their churches in several European cities. Click to see the Dublin one.  I chose this partly because it’s in English, but also because I spent some time talking to Rob Jones at the conference and heard a lot more about his work, which sounds really good.

Although this conference was all about Europe, Redeemer City to City is active in some major cities of other continents and may well be of interest to those already at work in an urban context.