Is Trust Necessary?

Why was it so difficult for the members of the European Union to reach an agreement over the fiscal bail-out of Greece? If you listen to European politicians, the challenge was simply a matter of trust.

According to German Chancellor Angela Merkel, “”the most important currency has been lost and that is trust.” Likewise, a Bloomberg Business article reported that “Riled by six months of personal attacks and contradictory messages from Athens, euro-area policy makers are forcing (Greek Prime Minister) Tsipras to overcome the credibility gap they said was a key hurdle to more loans. They’re no longer willing to take him at his word.”

But there are always two sides to every dispute. Nobel Prize winning economist Paul Krugman, for instance, believes that the German negotiating stance was “a grotesque betrayal of everything the European project was supposed to stand for.” He asks, “Who will ever trust Germany’s intentions after this?”

An editorial in the British news organization The Independent echoed Krugman’s argument, adding that “Germany (has) emerged as the fiscal hardliner, demanding cast-iron guarantees that Athens would observe stringent austerity measures.”

This lack of trust on both sides appears to have generated a terrible amount of ill will, with the New York Times publishing editorials about Germany’s “destructive anger” and the British news organization The Daily Mail writing about Greeks who compare Germany’s current behavior to its brutal Nazi history. So how can this challenging dearth of trust be overcome?

The answer to that question might be found in another grueling set of negotiations that recently concluded between the United States and Iran. U.S. Secretary of State John Kerry is taking the position that trust is unnecessary and cannot be relied on to enforce negotiated agreements.

Kerry explains, “There’s nothing built on trust. You don’t have to trust the people you’re dealing with, you have to have a mechanism put in place whereby you know exactly what you’re getting and you know exactly what they’re doing.” He adds, “You don’t trust. It’s not based on trust. It’s based on verification.”

Does Secretary Kerry’s Trust / Verification paradigm sound familiar to you? It’s precisely the language that was used by US President Ronald Reagan and Soviet President Mikhail Gorbachev to explain their approach to negotiating nuclear arms treaties. As illustrated by a classic YouTube video clip, this approach allowed the leaders of America and the Soviet Union — mortal enemy superpowers — to establish a warm personal relationship while negotiating critical treaties to avoid global destruction.

Would it be possible for European leaders, sunk deeply in a morass of bitter rancor generated by mistrust, to simply stop worrying about trust and focus on verification activities instead? Given the dreadful state of the relationships between these leaders, it can’t possibly hurt for them to try a different approach.