Interesting changes are taking place in the economic policy of the European Union. Contrary to the dogmatism of austerity ten years ago, in today’s EU. every new issue, from sending weapons to Ukraine and overcoming the energy crisis to financing the transition to a green economy, opens up discussion not only about increasing public spending and subsidies, but also about what was once the biggest taboo: issuing pan-European debt for their funding.

Even the traditionally fiscally “tight” countries, which do not agree to issuing new European debt beyond what was agreed under the recovery fund two years ago, recognize that public spending and investment is needed in the current environment. Theoretically, this paradigm shift indicates the maturation of the EU, the optimist will even see a move towards a more “social Europe”.

However, this encouragement of public spending and the potential further issuance of joint debt is not being done for the benefit of the few and the poor. On the contrary, they reflect the desire of the major EU countries, especially Germany and France, to use European mechanisms to strengthen their own economies.

For these countries, the main concern is to maintain the international competitiveness of their industries in the face of geo-economic competition and the resurgence of protectionism in the US and China. Germany is particularly interested in supporting the transition from the traditional heavy export industry model to a green and digital economy, which it knows will require huge amounts of money, due to the abrupt cutoff from cheap Russian gas.

Behind the discussions about industrial policy and the return to the role of the state is the popular idea in Paris and Berlin of “European champions”: the creation through mergers and subsidies of industrial giants that will compete in the most important areas of the economy. digital and green technologies with their respective giants in the US and China. An idea that is expected to favor the already large German and French companies.

Basically, these events are reacted by the small northern states, which we used to consider as allies of the Germans during the eurozone crisis. For them, the biggest risk is the weakening of EU common market rules. which will enable the larger nations to fortify their enterprises generously. Characteristically, in 2022, Germany and France together spent 80% of the record amount of 540 billion euros allocated for state aid in the EU. But objections to the nonsense of subsidies in Germany and France are expressed not only by the Nordic countries, but also by Italy and Spain.

This is a change in the rules of the EU internal market. it will inevitably benefit the big guys, and especially Germany, which is looking for a way out of the economic shock it suffered after the Russian invasion of Ukraine. Contrary to the requests of debtor countries for fiscal integration, issuance of Eurobonds, etc., during the eurozone crisis, the current aid package will multiply already strong countries and industries and increase their distance from smaller ones. Common market rules are one of the few remaining ways to rein in the big EU countries. On the contrary, the hyperconcentration of economic power will eventually develop into political power, which means the special weight of small countries.

Although our country has a historically positive attitude towards all processes of economic integration and subsidies in the EU, in Greece the objections of the small north must be taken seriously. Perhaps in discussions about the future of economic policy in Europe at this time, the opposition of Germany (so far) and other Nordic states to a new issue of European debt is resurrecting the controversy of the Eurozone crisis era. However, in the long term, the real dividing line of the new economic model in Europe will not be north versus south, but big versus small. Greece will make a mistake if it reads events based on models of the past.

* Angelos Chrysogelos is Associate Professor of International Relations at London Metropolitan University and Partner at Chatham House.