The bulk of the reaction to my piece a few days ago on the need to transcend the transform-the-EU/exit-the-EU divide amongst anti-austerity forces, and instead to develop an ambitious programme for the sort of Europe we would like to see (and which is necessary) has come from the euro/EU-exit partisans. These are the people whom I called the ‘Neo-Gaullists’ in my essay, for their emphasis on the need to return to national sovereignty in order to reconstitute the conditions that would allow progressive economic policies to again be viable as they were during Les Trente Glorieuses from the 1940s through the 1970s.
A comment from my Labour-left friend and trade-union researcher Michael Calderbank (also an editor with Red Pepper magazine) in an email responding to my piece captures this sort of sentiment best:
“For me, the question of withdrawal is certainly not an end in itself, but the disruption and disengagement from the neoliberal institutions could be a necessary first phase in re-imagining other Europes – a bit of creative destruction to bring into being new spaces for alternatives.”
I should say that I have been tempted by the euro-exit and devaluation argument in the past, believing such a move likely to produce similar results to the relatively benign outcomes experienced by Argentina and Iceland following their respective devaluations. It may still be necessary as a last resort. But the small size of the Icelandic economy, its highly modernised productive forces and hyper-educated workforce prevents it from being a true model for many other countries, and we should not forget Argentina’s timely bit of luck with hitting of the sweet spot of Chinese demand for soya beans, as Greek economist Yanis Varoufakis has pointed out, or the fact that Argentina already had peso notes in circulation, which eased the logistics of exit.
So I have for some time now been convinced that exit is a retreat from responsibility, and indeed from ambition, and that describing what would realistically follow such a withdrawal by, say, Greece or Italy, as ‘a bit of creative destruction’ would be like describing the Second World War as ‘a bit of a bunfight’.
An exit would mean competitive devaluations, a currency war on the European continent considerably more destructive than the relatively gentlemanly competitive devaluations that occurred at a global level in 2010/11. This would be an utter catastrophe and explode the single market.
I don’t think a lot of people really have any sense of the sort of economic berzerker-ism they are toying with here. It is irresponsible. It is basically saying: we need a level of ruination equal to or worse than that of the crisis and austerity already experienced in order to overcome the crisis and austerity. These people do not know what dragons they are waking up.
Varoufakis again (from 2011, but the analysis still holds):
“[E]ven if one country exits the eurozone in this manner, the eurozone will unwind within 24 hours. The European System of Central Banks will break instantly down, Italian spreads will hit Greek levels, France will turn instantly into a AA or AB rated country and, before we can whistle the 9th Symphony, Germany will have declared the re-constitution of the DM. A massive recession will then hit the countries that will make up the new DM zone (Austria, the Netherlands. possibly Finland, Poland and Slovakia) while the rest of the former eurozone will labour under significant stagflation. The new intra-European currency wars will suppress, in unison with the ongoing recession/stagflation, international and European trade and, therefore, the US will dive into a new Great Recession. The postmodern 1930s that I keep speaking of will be a tragic reality.”
Moreover, the integration of domestic economies into the global economy – in particular the global distribution of production – means that a devaluation could bring, again, very real social dislocation to purchasers of products (i.e., everyone) as bad or worse than that already inflicted by the crisis.
Additionally, if Syriza, say, came to power in Greece – something that is entirely within the realm of possibility in the near term, given a fresh bout of crisis and political instability, this new properly progressive government (in contrast to the pseudo-leftism of the neoliberal Hollande administration), would still depend upon the fairly rapid development of some sort of solidaristic economic support beyond its borders if it wanted to successfully carry out its programme. (This is, by the way, something that casts Syriza’s supposed waffling over the question of eurozone exit in a more clarifying light)
But most crucially: If socially progressive movements did actually have the strength to force a withdrawal from the euro or the EU, then they would have the strength to do so much more.
The important thing is not this sterile in/out debate, but the question of how to successfully challenge power on a European level. Whatever is your particular vision of a progressive future, while it cannot be achieved within the formal structures of the European Union, it also cannot be achieved without a pan-European mobilisation of forces.
This requires genuine internationalism, not the ‘pan-nationalism’ of the eurosceptic right but with a leftish patina.
And if we manage to build these social forces so as to genuinely be able to contest for power, then we would have the ability to transcend the EU as it currently is constituted anyway.
We instead need a concrete debate about a) What pan-European extra-parliamentary and parliamentary strategy is needed to achieve a sharp change in the balance of power (because, for example, a string of one-day general strikes across the PIGS so far appears to frighten the horses not at all); and b) What is our programme for change.
Autonomist political theorists Sandro Mezzadra and Toni Negri come close to this when in a recent editorial in the left-wing Italian online journal Euronomade they also issue a call to move beyond the stale in/out debate:
“[T]he identification of new elements of a programme can be shaped as a collective writing of a series of principles concerning welfare and labour, the tax system and mobility, forms of living and precariousness, about everything that is related to what is expressed by the social movements in Europe. We are not thinking of a grassroots charter of rights, something to be proposed to some institutional assembly: it is, rather, a collective exercise in programmatic definition that … can become an effective tool of organization at the European level.”
Ultimately, capital has gone European (and indeed global) anyway, whatever our misgivings about how this has been achieved. And global but post-democratic structures of governance and arbitration are being established without us, via trade agreements, the WTO, the UN Security Council, the UNFCCC, even international bodies such as the International Whaling Commission.
Governance and capital has gone global, but democracy and politics (at least progressive politics) hasn’t. We need to catch up. We need a scale of ambition – of both analysis and demands – that matches and exceeds what has already been constructed.
To be very clear, this is not a defence of the reactionary, elite-driven project that is the EU as it is currently structured, or even an EU that somehow has been tweaked from above. We should be under no illusions that the undemocratic EU represents any sort of bulwark in defence of social democracy or ever has been.
Instead, this is a request that we develop our own concrete vision of what democratic international governance would look like. We have to grow up a bit and set out our stall of what it is that we are going to put in place of the EU.
We have little choice. Another Italian philosopher, Franco ‘Bifo’ Berardi, (with whom I am in disagreement on many issues but some of his analysis should be taken on board) put the dilemma succinctly last year:
“Two things can happen. Either the labour movement can stop this offensive and set in gear a process of social reconstruction of the European Union, or in the next decade, civil war will break out in many parts of Europe, fascism will spread everywhere and labour will be subjected to 19th century conditions of exploitation.”
I’m certainly not one for quoting long dead white dudes, but I recently stumbled across this short essay by, of all people, Russian revolutionary and socialist Leon Trotsky about the need for a United States of Europe. Ignore the anachronistic terminology and references and pay attention to his underlying argument, which is as sound today as it was in 1923 when he wrote it:
“Long before the imperialist war, we recognised that the Balkan states are incapable of existing and of developing except within a federation. The same is true of the various fragments of the Austro-Hungarian Empire, and of the western portions of tsarist Russia now living outside the Soviet Union. The Apennines, the Pyrenees and Scandinavia are limbs of the European body stretching out toward the seas. They are incapable of an independent existence. The European continent in the present state of development of its productive forces is an economic unit – not a shut-in unit, of course, but one possessing profound internal ties – as was proved in the terrible catastrophe of the world war, and again revealed by the mad paroxysm of the Ruhr occupation. Europe is not a geographical term; Europe is an economic term, something incomparably more concrete especially in the present post-war conditions – than the world market. Just as federation was long ago recognised as essential for the Balkan peninsula, so now the time has arrived for stating definitely and clearly that federation is essential for Balkanised Europe.”
The problem we are facing is ultimately a failure of politics rather than economics per se. And that failure, resulting from a dearth of ambition, is something that the left has participated in.
What can be done about austerity, the crisis and democracy in Europe? (or, Is social democracy in Europe – or in one country – even possible any more?)
Amongst those united in horror at the social and economic savagery of the austerians, there is nevertheless a sharp division on what is to be done about the European Union and I want to flush this out into the open.
I’m going to lay down my own thoughts on the matter, but I want to stress that at this point, my opinion remains quite tentative, and submit these thoughts more as an effort toward finding a position rather than at declaiming ex cathedra What Is To Be Done.
On blogs andTwitter, in journals, on the street, on the slogans on placards and banners, and in meeting after meeting, two broad and opposing positions are taken. I largely disagree with both, although both raise valid points. In summarizing the positions, I hope I am not mischaracterising any parts of the arguments. If so, please correct me below the fold.
The ‘Possibilist’ position
On the one hand, there is the argument that while the EU may currently be a wretchedly neo-liberal and less-than-democratic structure, it does not have to be this way, and it can – indeed must – be radically reformed. Let us call this ‘good EU’ perspective the Possibilist position due to this its partisans’ belief that a thoroughgoing progressive reform of the EU institutions is possible. (It could also be read as a nod to the 1882 gradualist faction of the French Workers Party – one of the precursors to France’s modern-day Parti Socialiste – that argued for an approach toward social justice that emphasised achieving only what was possible)
How this reform of the EU’s structures can come about, other than via the roughly simultaneous election of a majority of social-democratic governments in the EU, giving the centre-left control of the European Council/Council of Ministers, is left ill-defined. Beyond the problem of having to wait a long, long time for such an unlikely alignment of planets, we can actually point to a lengthy period in the late 1990s when social democrats did in fact control most of the major parliaments of Europe, but to no noticeable effect.
The other problem with this position that I can see is that even as it begins to concede that there may be structural problems with the European Union, it places the fault ultimately with Christian Democrat/conservative dominance of the European institutions rather than something intrinsic to the European project as it has always been conceived.
The partisans of this position range from those left-wing supporters of French President Francois Hollande who wish he would be a bit more forthright, to leading members of Syriza who may reject the troika but remain vague about membership of the euro.
As a result of breadth of this ideological spectrum, it would be incorrect to describe the Possibilist position as simply coterminous with social-democratic and social liberal critiques of the EU’s crisis-response policies, although many social democrats and social liberal critics of austerity are indeed Possibilists, but more on this shortly.
The Neo-Gaullist position
The opposing argument maintains that European integration has always been an elite-driven project and that particularly since the Maastricht Treaty, the EU and eurozone have developed such a steadily ratcheted up neo-liberal ‘constitutionality’ (that is: a free-market-fundamentalist orientation that can be tightened but not loosened), and institutional structures that are ever more technocratic rather than democratic and equally difficult to walk backward, that exit from the euro and even abandonment of the European project and return to national democracy is essential.
As with the difficulty of pigeon-holing Possibilism, it is also not correct to categorise this second position as simply the more ‘radical’ anti-austerian position, even though it is the position of many socialists and of the not insignificant Communist Parties of Portugal and Greece.
This is because this second position is also the perspective of national sovereigntists of an otherwise roughly middle-of-the-road social democratic persuasion, such as the UK’s trade-union-backed but tiny No2EU party and the more sizeable Scandinavian left-wing eurosceptic groups.
And such euro-rejectionist ideas are steadily gaining support well beyond the usual suspects. Portuguese economist Joao Ferreira do Amaral published a best-selling book last year promoting euro exit, a position now backed by the country’s chief justice, and the late Gaullist Philippe Séguin, former president of the French National Assembly and minister under Chirac consistently held to this position till his death in 2010.
Due to this emphasis on national sovereignty rather than a class-based but Europe-wide internationalism, and due to a need to give this argument a short-hand term, let’s describe this position as ‘Neo-Gaullist’. Gaullism, named after France’s post-war centre-right sovereigntist president Charles de Gaulle, is a philosophy of the right that emphasises national sovereignty but that nevertheless looks to strong government intervention in the economy and emphasises an ethic of noblesse oblige toward the ‘popular classes’.
Right-wing eurosceptics also take a position backing withdrawal from the EU, but it need hardly be said that most of these characters, being of a market-fundamentalist persuasion, entertain less of a concern for the victims of austerity.
(Most, but not all conservative eurosceptics. And we should not dismiss out of hand criticisms of the EU simply because they come from such quarters. The question should always be: are the criticisms legitimate? It is noteworthy that some of the most piercing and richly evidence-based criticisms of austerity and EU post-democracy have come from the right, notably the Daily Telegraph’s Ambrose Evans-Pritchard)
However, as my primary concern is whether social justice is feasible under the current European framework, and that is hardly the primary concern of the eurosceptic right, I’m going to leave aside this third discourse, and focus instead on just the ‘Possibilist’ and ‘Neo-Gaullist’ positions.
Return to national sovereignty?
Brussels-based binational reporter Craig Willy, a self-described American liberal (what on the continent would be called a ‘social liberal’) and French ‘social Gaullist’, has done an admirable job in condensing the latter argument in a 2013 essay to which this article is in part a response.
In essence, he says that policy independence is impossible within the euro. Stimulus is now in essence forbidden. Overturning this is almost impossible democratically, as it would require a majority in the Council of Ministers/European Council committed to a project of neo-Keynesian reconstruction, and, as there are no general elections to this ‘European senate’, there is no opportunity for Europeans to ‘vote out the bastards’ and overturn the current policy.
Additionally he argues, because of the ‘constitutionality’ of permanent austerity, from Maastricht to the Fiscal Pact, such a reversal would require a treaty change, which would entail effective unanimity amongst states. Moreover, a European social democracy would require a true political and fiscal union, involving fiscal transfers of 5-10%, a federal budget and treasury, with EU-level progressive taxation, borrowing and spending. This in turn would require a revolution in the public’s mindset about Europe in the major eurozone countries, in particular in the largest economy, Germany, where public opinion is strongly behind Merkel and the Berlin narrative of a frugal north and feckless south.
All of this is completely unrealistic, showing that multi-national democracy cannot work. Only with a return to national democracy is there a possibility of change, as – in theory – all you have to do is vote in a new government, a much more realistic option. Willy stresses that none of this need involve any appeal to national chauvinism. It is just an honest recognition that a socially just and democratic response to the economic crisis is impossible outside of a break-up of the EU.
Given the effort over the last few years in my writing that I’ve put into cataloguing the post-democratic nature of the EU and its austerian crisis-response, one would think that I would demur from the Possibilist position and support instead the Neo-Gaullist line.
Certainly, I have abandoned all hope that I once had of the possibility of EU democratic reform, and so I concur that the Possibilist option is in fact impossible.
But however difficult the prospect of a democratic United States of Europe may be, social democracy in one country is no longer possible either, if it ever was. A recovery of national sovereignty would find the popular will no less circumscribed by capital, by undemocratic forces than it is within the EU.
I want to argue that we need to break out of this binary of ‘reform the EU’ or ‘reject the EU’. I am coming to believe that the only path out of the current unpleasantness is the construction of a United States of Europe, but – and this requirement is absolutely non-negotiable or it will not work – it must be from the ground up, by European citizens themselves, not imposed from above.
What permitted the construction of post-war social democracy?
To grasp why this is the case, one must have an understanding of what conditions permitted the construction of social democracy and the Keynesian turn in economic policy in the first place. Those conditions do not exist today at the national level, and it is unlikely that they ever will again.
Here I offer a potted and very, very brief history not of social democracy per se, but a brief sketch of the social, economic and political conditions that permitted social democracy’s creation in Europe and America*. I make no mention of Republican Spain, France’s Popular Front or Ramsey MacDonald’s pair of British premierships not because they are not important, but because they were failures. (If I had more space and time, I would in fact delve into these, as well as more about the role model that was 1920s Red Vienna and, from the previous century, Bismarck’s social legislation that was a key part of his Revolutionary Conservatism, but this is an essay, not a book)
First off, let’s remember that the first genuine ‘Keynesian turn’ – in form if not by name, initially occurred not after World War Two, but under Mussolini and Hitler. Between the manifest cataclysm of laissez-faire capitalism and the uncertain promise of Communism, it was the corporatist innovations of fascist economics that prefigured the Scandinavian, Swiss and American demand-management economic policies a few years later which were then embraced across western Europe after the war by governments of both left and right.
Both fascist governments were able to overcome economic crisis by stimulating aggregate demand through massive investment directed by state agencies and the establishment of extensive and generous social programmes. Italy saw the establishment of work creation programmes involving house construction, marsh draining and highway, canal, railroad infrastructure roll-out. Government assumed control of credit allocation, with the fascist regime’s Istituto per la Ricostruzione Industriale in this period ultimately controlling 77% of pig iron production, 45% of steel production, 80% of naval construction and 90% of shipping.
When private capital was frightened of investing, the state became the investor of last resort. The regime also oversaw banking reform and nationalised the Bank of Italy. It also introduced the 40-hour work week, health insurance, paid national holidays, disability and old-age pensions, maternity benefits, and leisure-activity subsidies. State expenditure doubled between 1922 and 1933.**
Meanwhile in Germany, when we ask ourselves how it is that so many people could tolerate the totalitarian barbarism of the Nazis, we have to understand that for many ordinary Germans who were not from minority groups or the left, the daily experience was not one of terror, but, as Gotz Aly argued in a 2005 essay in Der Spiegel, a ‘warm and fuzzy’ or ‘feel-good’ dictatorship: ‘Die Wohlfuehl-Diktator‘. Employment returned through a similar stimulation of demand, while the regime delivered family and child supports, decent pensions, free access to higher education and even cheap tickets for the theatre and concerts. There was an economic leveling and even social mobility. The well-being of the national community, ‘volksgemeinschaft’, was all-important. Life was indeed better.
But this all this was made possible not just by high rates of corporate taxation, near-autarkic capital controls and the state assumption of investment decision-making, but also ultimately slave labour (by Jews, eastern Europeans, political dissidents, homosexuals and POWs – amounting to 20 percent of the German workforce at its peak) and the conquering and economic draining of other economies.
Meanwhile, fascism also promised and delivered an end to the widespread class conflict of earlier decades. Independent working-class institutions were obliterated. Business leaders embraced what had previously been seen as fringe parties due to the social peace they imposed. Fascism is at base a response to crisis and strife.
Folkhemmet and Arbeitsfrieden
Scandinavia in this period had also been the site of recurrent labour unrest. Labour relations in Norway and Sweden were home to strike rates amongst the highest in the world, and frequent violent clashes. The worst of which, a paper-mill strike in Adelen in 1931, was suppressed by the army. In 1938, fearing further violence and radicalisation, and the socialism that was around the corner, a historic compromise between labour and capital was reached at Saltsjöbaden. For similar reasons the Arbeitsfrieden (labour peace) agreement was achieved in Switzerland in 1937.
A similar social and economic reorganisation, with local particularities, to what had been pioneered in the fascist countries was adopted. In Sweden, as the late historian Tony Judt pointed out in his magisterial history of Europe since World War Two, Postwar, Swedish social democracy’s concept of the ‘people’s home’ – Folkhemmet – was appropriated from the nationalist political theorist Rudolf Kjellen, who in turn was inspired by the social-reformism of Otto von Bismarck’s conservative Realpolitik. Via Kjellen’s concepts of folk not klass, as Judt argues, Sweden’s Sveriges socialdemokratiska arbetareparti was able to undercut the right’s communitarian appeal and neutralise support for fascism.
Sweden certainly benefited from an economy that had not been devastated by war as other western European countries had been in World War One, leaving it more room to manoeuvre, but she also benefited directly from the upturn in the German and American economies, which had also embraced a demand-management approach.
Under the New Deal, the US Treasury embraced deficit public spending while labour and capital reached a ‘Grand Truce’ akin to Saltsjöbaden in Sweden and the Arbeitsfrieden in Switzerland.
Although some of the bright young things recruited to the US Treasury may have been Keynesian true believers, Roosevelt himself was no idealist. The president had concluded that governments had no option but to turn away from laissez-faire liberalism for a brief period in order to stave off revolution.
Canadian economists Leo Panitch and Sam Gindin in their recent history of the construction of the international postwar economy, The Making of Global Capitalism, uncovered a remarkable quote from the US president, writing in a letter to a friend that there was “no question in my mind that it is time for the country to become fairly radical for at least one generation. History shows that where this occurs occasionally, nations are saved from revolutions.” The authors note that he admired the ultimately doomed municipal social democracy of the experiment of Red Vienna in the 1920s and its public housing projects for having “probably done more to prevent Communism and rioting and revolution than anything in the last five years.”
And indeed, as the war ended, in many parts of the continent, ordinary people were armed, with millions expecting that the world that would be built after the conflict would be radically different and were taking things into their own hands.
Social democracy as vaccination against socialism
In the absence of government, and following desertion by factory and land owners, local committees were set up to administer workplaces and neighbourhoods, organise food supplies and maintain order — often a rough justice toward collaborators. In 1944, a popular insurrection in Ragusa, Sicily, was put down by the army, and in 1948, a three-day general strike crippled the country.
While arriving Allied armies worked to disband these councils and committees, US forces cabled home to report their deep concern at the disturbances that they feared could quickly evolve into revolutionary situations. Their own forces were not immune to the rebellious sentiment. In 1946, a thousand US GIs in Paris protested down the Champs-Élysées and a New York paper the same year fretted in a report from Nuremberg that American soldiers had been infected with “strike fever”. Across the continent, Communist Party memberships soared. And of course civil war in Greece broke out between Communist partisans and nationalists, with Britain backing the fascists that not months before had been the enemy. Socialism once again was a greater fear than fascism.
It was clear that, as British Conservative MP Quentin Hogg told the House of Commons as early as 1943: “If you do not give the people reform, they are going to give you revolution.”
And so we find that the post-war welfare state, full employment and concomitant high-wage truce with labour was constructed as much by parties of the right as by social-democratic governments.
The 1947 programme of Germany’s Christian Democratic Union declared: “The new structure of the German economy must start from the realisation that the period of uncurtailed rule by private capitalism is over.” It went on to argue that the “capitalist economic system” had not served the German people, and called for a “new order built right from the ground” based on “an economic system of collective ownership”
And the 1944 manifesto of France’s Christian democratic Popular Republican Movement backed what it described as a “revolution” to create a state “liberated from the power of those who possess wealth”. It backed the nationalisation of industry and the banks and supported the programme of the Conseil National de la Résistance, which envisioned a social democratic planned economy after liberation. In France, it was Gaullism rather than social democracy became the dominant force, but Gaullism was just as committed to demand management as its left opponents.
In Austria, the Socialists and the conservative People’s Party reached an understanding that was intended to prevent the sharp class conflict of the decades before the war. This delivered child care, unemployment insurance, public pensions, child support, universal medical provision, public education and subsidised transport. While it had experienced a typical Western European welfare state for decades, it was not actually until 1970 that the country saw its first left-wing chancellor, Bruno Kreisky.
In the UK, as in Belgium and the Netherlands, it was indeed their Labour Parties that built the welfare state, with demand-manipulating fiscal policy, progressive taxation and some level of nationalisation, with as much cooperation as opposition from the mainstream right. As James Meek writes in an extensive essay in the London Review of Books on the history of public housing in the UK, “the Tories started a race with Labour over who could build more houses.” Conservative prime minister, Harold Macmillan at one point said: “Toryism is paternalist socialism” and advocated a “planned capitalism” with substantial public ownership.
Certainly what aided the process on the continent was that the old conservative political class leading Europe had been utterly discredited by its association with fascism. The new Christian Democratic parties were composed initially of anti-fascist Catholics, some of whom had been partisans alongside Communists and socialists, allied to Christian trade unions. With the old order razed to the ground, amid the rubble, a new order could be built, even if the traditional right would quietly come in from the cold to absorb these parties in the years to come.
And of course, it was that grand American villain of the right, Richard Nixon, who famously proclaimed: “We are all Keynesians now.”
This is not to say that there were no differences between social democrats and Christian Democrats/conservatives. Compared to the cosy consensus between today’s centre-left and centre-right on economic questions, even amidst the post-war Keynesian consensus, the contrast in party programmes and delivery was stark. Just to take the example of Austria, the first ‘Red Chancellor’ Kreisky oversaw the extension of employee benefits while cutting the working week to 40 hours, decriminalised abortion and homosexuality, legislated formal equality for women and introduced maternity leave. He also extended public ownership to the point where Austria had one of the largest nationalised sectors outside of Communism.
But the point is that Europe had to pass through decades of war, violent class conflict, revolution and holocaust, for there to be cross-party consensus that mass unemployment, what they believed to be the catalyst of all this strife, was a treacherous menace that had to be avoided despite the not insubstantial cost of the welfare state and high wages.
This is where the welfare state came from: Not from enlightened social democrats on high, but from grubby conservative elites petrified that if they didn’t do something pretty radical, they would lose everything.
It is a cliché to make reference in political writing to the words of the nephew of Don Fabrizio Corbera, Prince of Salina, from Giuseppe Tomasi di Lampedusa’s 1958 novel about the Italian Risorgimento, Il Gattopardo. But the epigram is only really accurate as an allegory for the historic compromise of the capitalist class after the war: “Unless we ourselves take a hand now, they’ll foist a republic on us. If we want things to stay as they are, things will have to change.”
Another condition that is missing
Next, it is crucial to understand that the construction of the western European welfare state could not have happened without the encouragement, orchestration and ‘seed capital’ of the United States.
Panitch and Gindin describe this process as ‘Internationalizing the New Deal’. The US needed a restored Europe, according to a 1947 Council of Economic Advisors’ report to Truman, so that it could buy “substantial amounts of our products”, both exports and goods produced on European soil by American firms. More abstractly, but still a conscious concern – indeed the main concern – on the part of Washington, was that US capitalism could not survive if the major countries of Europe were removed from the global marketplace either by the adoption of Communism or another descent into whatever form of totalitarianism might come next.
While the stick of the Truman Doctrine attempted to contain Communism, the carrot of Marshall Plan funds offset the capital that was flowing out of Europe and moving to New York at the time, and catalysed a sustained recovery. Moreover, the plan explicitly encouraged adoption of an entente between capital and labour modelled on the New Deal’s grand truce of union recognition and high wages in return for industrial peace and increased productivity.
Class conflict would be replaced with an interest in economic growth, and a redistribution of wealth could be enacted atop – instead of in place of – the free market. Alongside the Marshall Plan, the US turned a blind eye – and even encouraged in some cases – to some level of capital controls, tariffs and radical currency devaluations until Europe could begin to be able to pay for US imports.
Simultaneously, European integration was required to develop the large firms and large domestic (continental) markets they would service, such as existed in the US, that in turn would allow the economic growth that could pay for this high-cost labour truce and welfare state. Without such regional economic integration, the US feared it would not be able to wean Europe of its relief funding lest the “vicious cycle of economic nationalism … again be set in motion.”
So why did it fall apart?
But the social-democratic compromise was, as Roosevelt had said, only ever intended to be temporary. And indeed, by the late 1960s and early 1970s, capital was already straining at the leash.
The Keynesian paradox is simple enough.
To keep labour costs low, the capitalist needs a certain amount of unemployment as a whip against workers to keep them from demanding higher wages. However, with unemployment and low wages, the capitalist runs into a problem of workers not being able to afford many products. The social dislocation meanwhile also tends to encourage political instability.
If there is full employment, the capitalist can sell lots of products, but wages soar as workers tell the capitalist that he can stuff it if he doesn’t pay higher wages. The inflation this produces in turn erodes the worth of large holdings of capital. At the same time, stroppy unions produced by this sellers’ market begin to challenge not just profits, but even management’s prerogative to direct production. If a job can be had anywhere, why put up with a martinet boss?
This all came to a head with the economic crisis of the early 1970s. After a period of ideological flux prompted by the unprecedented stagflation of this period, a series of governments of both left and right experimented with a retreat from Keynesianism and a return to orthodox or classical economic thinking.
Unsurprisingly, this response to the crisis – what we now term neo-liberalism – initially provoked years of increased labour strife. But eventually, the return of high unemployment would be a great aid to soothing industrial troubles.
Meanwhile, deeper global market integration and relaxation of restrictions on the flow of capital could now quite easily tame any social democratic government that was tempted to turn back the clock. This first occurred most spectacularly with the election of France’s first Socialist president, Francois Mitterand, in 1981. He had been propelled into the Élysée Palace off the back of a strong left platform, committed to expanding the welfare state and extending public intervention in the economy. But as a result of capital flight and economic sabotage, by 1982 Mitterand was forced to abandon most of his plans and became something akin to a Thatcher for France, dramatically cutting social spending.
Social democracy in one country
Now, to counter this, Willy argues that so long as the country has not abandoned core state powers (pouvoirs régaliens) to international institutions, countries can still actually do whatever they like.
Certainly, governments even in the current era of global quicksilver movements of capital, can be braver than many have been. Many service providers cannot simply up sticks and leave a jurisdiction, and the movement of plant and machinery for many industries would be pointlessly expensive. There is a lot of bluster from the captains of industry when demanding that they get their way.
But despite the exaggeration, the reality is that these pressures do exist. If Willy is right, then we have just had a bad run of luck with the crop of social democratic leaders over the last 30 years. We just need leaders with more gumption like Kreisky, Palme and Brandt.
I think the problem instead is material rather than ideological. I don’t buy that social democratic parties are just full of venal characters. It is that they are running up against a barrier that they cannot surmount.
In a period of growth, social democracy offers to share out the spoils of capitalism more fairly than the right. When stagnation or decline sets in, they can only promise to share out the austerity more fairly than the right. Social democracy does not have a theory of crisis. Even Kreisky would be a Blairite today.
The radicalisation toward the end of the sixties provided enough momentum for Italy’s Hot Autumn in 1978, the street politics of 80s Britain and a smattering of strikes in the US, but otherwise the left, both of the social democratic and extra-parliamentary variety, began to experience steady decline.
Voter turnout begins its remorseless downward spiral amid a crisis of representation as voters instinctually began to recognise that little changes regardless of who is elected. Social democratic parties haemorrhaged members. More generally, the left was disoriented. It would not be clear for some time that what had happened was a fundamental crisis of Keynesian social democracy, and not just a temporary set-back that could be reversed at the next election.
Then at the end of the 80s, the Soviet Union collapsed. However genuinely brutal the Stalinist monster had been, and however much its dissolution was a victory over barbarism, the very existence of a living alternative to capitalism did one important thing: it put the fear of God into western elites and permitted room for social democracy. Without Communism, there was no need any longer for social democracy to keep the masses placated. This is not in any way to apologise for Moscow or its monstrous unfreedom and perverse irrationality. It is an unalloyed good that the Berlin Wall fell and the USSR collapsed.
Hungarian anti-Communist dissident and former leading member of the liberal Alliance of Free Democrats (SZDSZ) G. M. Tamás put the conundrum well last March in an interview with the New Left Review:
“I don’t for a moment regret having fought against the ‘socialist’ regime—mendacious, stupid, brutal, repressive and treacherous—and I do still emotionally identify with the dissidence of those years. But I dislike very much the results of those struggles and … however understandable and salutary the sudden East European infatuation with freedom and rights, however promising the fall of the market Stalinist parties, it was at the same time a historical disaster, heralding the demise of working-class power, of adversary culture, the end of two centuries of beneficent fear for the ruling classes.”
In these new, radically different circumstances to those facing the postwar leaders, Blair and Brown in the UK and Clinton in the US gave social democracy one last kick at the can by further unleashing finance and using the revenues to expand spending in some core areas, but otherwise superintend a further liberalisation and deregulation of the economy.
The expansion of consumer credit and home ownership masked for a period the stagnation or retreat in working-class and middle-class incomes, but we all know how unhappily that ended. Indeed, this merely postponed rather than resolved the crisis that emerged in the 1970s. The question of restoration of profitability without full employment was temporarily solved by credit expansion, but that bubble has burst.
And so, reversing Nixon’s maxim, we are all neo-liberals now. The centre-left distinguishes itself from the right not on economic questions, but on identity politics and cultural issues such as gay rights, abortion and women’s rights that – however important – cost almost nothing.
Social democracy in one country has ceased to be possible.
Brave new world
This is why a retreat from European integration – and indeed global integration – is not a viable alternative.
Today, we are not presented with the same conditions that permitted the construction of the Keynesian welfare state, economic planning and full employment:
a) There is no background of strife, revolution and war that convinces elites that social democracy is the best worst option.
b) There is no actually existing alternative like the Soviet Union that also frightens elites and reminds that another way of ordering society is possible.
c) The US is going through its own economic crisis right now. It cannot help out this time and
d) Movement of capital is too fluid now for any one European country outside the EU to attempt any serious programme that delivers social justice.
If a government were to attempt such a programme, they would have to introduce strict capital controls to avoid market pressure, while engaging in currency devaluation to make their products and services competitive.
This might work for some countries for a short period. But the currency devaluation would kick off a downward cycle of competitive depreciations and beggar-thy-neighbour economic nationalism that would exacerbate rather than solve the broader economic crisis. And in a generalised period of crisis, even cheap goods can go unsold. A 25% depreciation in sterling in the first 18 months of the crisis has had little to show for it from boosted exports. Indeed, the 2012 current account deficit in 2012 exceeded that of pre-crisis 2007.
And supply chains and sites of production are so diffused now compared to when the European welfare state was constructed that such autarkic closure would cut a nation off from a range of goods and services that consumers have come to expect, with even further impoverishment of ordinary people than they have already experienced.
In any case, as soon as the capital controls were lifted, the taming pressure of the market would return, again threatening a national social democracy.
However, continent-scale economies, such as the US or China may still have room to manoeuvre. It is one thing to pick up sticks and move capital and production out of Greece. It is another thing entirely for capital to move out of an entire continent.
Any genuinely sustainable solution to the crisis, rather than the treading water that we see, must involve a recovery in investment that will have to be state-led, which in turn requires some sort of transnational taming of capital. But global markets have outgrown the nation-state’s ability to do this.
Yet remaining in the eurozone is a death trap, both economically and democratically, as Willy correctly states, and as I have repeatedly argued elsewhere.
Staying in Europe is a disaster and leaving Europe would be a catastrophe.
So does this mean that the only option is slowly reforming the EU institutions, as the left social-democratic anti-austerian analysis proposes? In reality, this is no different to just accepting austerity and post-democracy. There is no appetite for EU reform in a democratic direction at the institutional, governmental or even popular level.
What is to be done? We can’t stay in and we can’t leave.
A European union but not the European Union
There is another option. A coordinated writing off of public debt to European banks, hedge funds and other financial actors. To accomplish this without banking collapse, and to pay for the institutions’ losses, wealthy shareholders and bondholders would be squeezed and the major few dozen banks would have to be taken into public ownership at the European level.
This then, together with revenue sharing throughout the Union (fiscal transfers) under a true democratic political and fiscal union, could be part of a continent-wide plan for growth and bridling capital.
Such a plan, a new New Deal for Europe, could involve something like extensive public investment in new green-transition infrastructure and energy production, involving taking energy companies back into the public sector under genuine democratic control, and build-out of new grid, nuclear, hydroelectric, and solar production (in the south, not Germany, where the sun doesn’t shine); a coordinated near-term wholesale shift of transport from being fuel-based to electric-powered; a massive extension of public transit; a truly colossal public housing construction programme to lower the cost of living; the establishment of a common, high European minimum wage; a reduction of the working week and sharp lowering of the pension age; and the institution of a generous, non-means-tested, universal basic income. Significant expansions in health, education and research would round out the programme, as well as a fulfilment of the long-since abandoned commitment to raise all of eastern Europe up to the same standard of living as existed in the west prior to the crisis.
Much of this would involve, as it did during the war, expropriation (including Europe’s share of the €23 trillion in untaxed offshore booty) and the public direction of private investment, overcoming the risk aversion, timidity, and sedated animal spirits of market actors. All of which is intended to get Europe growing again and at a sharp, postwar-style clip, but in the interest of ordinary people.
But how can such a set of proposals be taken up by a European Union whose very structures prevent its implementation?
Even were a economic heterodox majority elected in the European Parliament this year, the parliament has no right of legislative initiative, so it can only advise the skipper, not set the course and hold the tiller. Europe’s executive is appointed, not elected, and our senate, the European Council / Council of Ministers, is the real legislative chamber, but one to which there are no elections and one whose legislation is largely crafted by diplomats and bureaucrats in secret. Monetary policy is beyond the remit of elected politicians, as it is the province of the unelected ECB, and fiscal policy – the alpha and omega of any government – is fast being shepherded out of the realm of democracy as well through European fiscal integration.
And of course all this would require a true fiscal and political union, with the necessary fiscal transfers and EU-level taxation – but a fiscal union constructed on the basis of democracy, not the anti-democratic fiscal union currently being knocked together, a Hail-Mary-pass of an authoritarian federation aimed at forestalling the EU’s otherwise certain disintegration.
It would require a genuinely democratic European government, at a minimum one with powers across the continent’s territory equivalent to the traditional powers of a national government, with the executive drawn from the party or coalition with the greatest number of seats in the parliament.
There would be no European Commission, no Council. There would simply be a European cabinet of ministers and a European prime minister instead. And a European central bank would merely be an agency of a European Treasury whose mission would be in support of full employment and economic growth. Monetary policy would be returned to the realm of democracy.
But it would still, quite obviously, require a common currency. So I am in the odd position of advocating a toppling of the European Union (as it currently stands) but a maintenance (and indeed extension) of a eurozone.
And of course none of this can be imposed from the top down. It would lack all legitimacy. This has to be the demonstrated will of a majority of the European demos. We should simply walk away from the existing treaties, which have never won the legitimacy of the European electorate.
In effect, the European Union as it exists has to be overthrown by a mass, popular European movement and a new European democracy constructed by these same people in its place, something that cannot happen on a piecemeal basis, i.e., country by country.
But make no mistake: to achieve a socially just Europe, the size of the political economy can be no smaller than that of a continent. Anything less is impossible in a globalised economy.
The accusation from the Neo-Gaullists is that the construction of this socially just Europe is titanically utopian.
It certainly is.
But is the scale of its utopianism any greater than the thorough democratic and economic reorganization that occurred in Europe after the war?
More appropriately: Is it any more utopian than thinking that Keynesian demand-management programmes sufficiently ambitious to solve the economic crisis can still be accomplished at the national level? That growth can return at a national level without first solving the European – perhaps even global – economic anaemia?
Klass not Folk
Heterodox economist Costas Lapavitsas and former German deputy finance minister Heiner Flassbeck last May published their own roadmap for coordinated, orderly euro exit. They write that political and transfer union is no way out because it is “not feasible among independent and sovereign nations. No member of the EU wants to become dependent on one country, Germany.”
But Lapavitsas and Flassbeck are still accepting here the legitimacy of the nation-state as the fundamental unit of politics, rather than the individual. Who cares what the nationalists of various lands feel about the myth of dependence on Germany, or what German nationalists feel about myth of dependence upon them? Ordinary Europeans of all lands need to expropriate the wealth of the Europeans elites of all lands.
The proposal for a European New Deal under a democratic European government – a United States of Europe if you will – makes no countries dependent on other countries. It erases the idea that Europeans are split on the basis of national borders and recognises that we are split on the basis of class.
That is the real division in Europe. Klass not Folk.
For a European Spring
And this is where I want to raise the importance of the 3000 or so anti-ECB ‘Blockupy’ protesters who clashed with riot police and paralysed Frankfurt in June for the second year in a row.
Willy is right when he says that for something like a European New Deal plan to work, there would have to be a ‘social democratic revolution’ in thinking in most of Europe, and in Germany in particular. For any pan-European solution to be viable, the Berlin-Brussels-Frankfurt narrative of a frugal north and a feckless south has to be broken in the country where it has the strongest hold on the population.
Germany has already gone through its austerity period, imposed by the Social Democratic-Green administration of Gerhard Schroeder and Joschka Fischer, with poverty, temp employment and low wages soaring domestically as a result. Yet still far too many ordinary Germans are taken in by the Bild tabloid lies about ‘lazy’ southern Europe instead of pointing to their domestic enemies. Last year, a German environmental campaigner told me he personally was opposed to what his government was doing in concert with the EU, the ECB and the IMF, but it was just impossible to talk about this with anyone. The Merkel line was universally accepted.
That is why the Blockupy protests are so important, despite their relatively small size (for now). What Schroeder and Fischer did last time and the support for austerity the SPD and many Greens have shown in the European Parliament demonstrate that they represent no real change from the status quo.
But Blockupy is a sign that there is now a small but growing domestic opposition there, a crack in the austerian ideological monolith in Germany. The road to a socially just Europe runs through Frankfurt.
It brings a European Spring that much closer. This year, the protests are split between a decentralised pan-European series of actions in May ahead of the European Parliament elections, and then what looks to be widespread acts of civil disobedience both in Frankfurt and across borders to coincide with the planned opening of the new ECB premises in the autumn. In parallel fashion and over the medium term, no effort can be spared to attempt to scale up cross-border general strikes along the southern bloc, and extend them to beyond one day symbolic gestures.
As I have argued, the history of the gun-to-the-head postwar compromise between European capital and labour shows that social-democratic concessions do not come without a threat that so frightens elites that they have no choice but to concede at least to a minimum of our demands.
We have to be honest: One-day general strikes have been repeated in Greece perhaps 20 times now, depending how they are measured, and similar actions have happened in Spain, Portugal and Italy, albeit with less frequency – yet EU elites remain unmoved.
So we have to go beyond even this. The threat we ordinary Europeans have to pose to our 21st century elites has to be at least as great the threat that forced postwar elites to compromise. There has to be Tahrirs, Taksims, Syntagmas across the Union, including in Germany too.
But the pan-European movement against austerity has to know what it is fighting for. Tweaking the current set-up of the EU is impossible, but so is social democracy in one country.
There is no alternative but a United States of Europe democratically built from the ground up.
*Many readers will be quick to point out that the American Democratic Party is not strictly speaking a social-democratic party and they are not incorrect, but the party played a similar role to that of social-democratic parties elsewhere, and contains social democrats amongst its membership.
** Data come from Sheri Berman’s superb 2006 book, The Primacy of Politics: Social Democracy and the Making of Europe’s Twentieth Century; the late Tony Judt’s masterful (if overly sympathetic to social democracy) 2010 tome, Postwar: A History of Europe Since 1945; and Ian Birchall’s out-of-print but still essential (if overly antipathetic to social democracy) 1986 work, Bailing Out the System: Reformist Socialism in Western Europe 1944-1985.
There are those who will be cheering the arrest on Saturday of Golden Dawn leader Nikolaos Michaloliakos and the Greek government’s crackdown on his neo-Nazi party after the political assassination of rapper and left-wing activist Pavlos Fyssas last week.
My Facebook and Twitter feeds have been filled with hosannas for the government’s moves against the neo-Nazi party.
Some feel that with the raids of branches, confiscation of some weapons, and arrest of leading cadre on charges of forming a criminal gang, the governing parties, New Democracy in particular, have finally, belatedly realised that the Golden Dawn now threatens their interests as much as it threatens the left and immigrants.
Perhaps this is the case. Perhaps the cabinet has indeed decided that enough is enough, however useful the fascists have proved until this week, and that the pitbulls now need to be muzzled. I have no access to the interior of the skull of Prime Minister Antonio Samaras or Nikos Dendias, his anti-immigrant minister of public order and citizen protection [sic]. So I do not know.
But I am sceptical.
Despite my revulsion at the party, I am afraid that I have to take my leave from this celebration, partially because I feel that the evidence suggests that the crackdown is at best little more than a piece of political theatre.
But also more fundamentally because I worry that in the context of the dominant but dishonest media and political discourse of “two extremes” of left and right – where the so-called ‘far left’ Syriza, trade-union strike action, and smaller left wing groups are spoken of in the same breath as the Golden Dawn – the moves against the nazis are a precursor to a similar but more thoroughgoing crackdown on sections of the left.
I would rather the ideas of the Golden Dawn be defeated in open political contest, and its militants sent scurrying, swept from the streets by popular antifascist mobilisation, than they be arrested by the very same men who not days before stood by approvingly while the blackshirts engaged in their pogroms.
Let’s be clear: Greece has existing laws to deal with those engaged in violence, such as party activists’ savage aggression towards immigrants, left-wingers and gays and lesbians, and certainly to deal with the murder of a hip-hop artist. But these laws are not being enforced. Repeatedly, the police have been seen to turn a blind eye to the party’s violence or actively work alongside its militants. It is by no means the ravings of conspiracists to claim collusion between the police and the fascists.
On the contrary, this collusion is well known, discussed by human rights groups, mainstream journalists and now leading politicians. This collusion is as much a fact, a certainty, a truth – as gravity, or that the decimal representation of pi never ends, or that it is a mistake to touch your pink bits after handling habanero peppers.
Here is a statement from the Union of Hospital Doctors of Athens and Piraeus from 19 September following the murder of Fyssas:
“As doctors of the Tzanio general hospital, we express our strong concern, as yesterday night 18/09/13, after the protests against the murder of the young Pavlos Fyssas by a member of Golden Dawn, 31 protesters were brought to the surgical department, all with blows on the head. The injured people reported blows by batons, helmets, shields and kicks from Delta and Dias teams (motorcycle police), whereas there were reports of rocks being thrown from the side of the police towards the protesters, aiming for the head, from members of Golden Dawn.
“One of the people who was injured, after being operated upon, was hospitalized at the ophthalmological department of the hospital with a ruptured bulb [sic] from a stun canister. He reported being aimed directly on the head and is in danger of suffering a permanent loss of vision in one eye. We urge for a halt of the policy of intensification of the state and parastate repression in order not to mourn any more victims.”
In the wake of the arrests of Golden Dawn MPs, two senior police officers – the regional police commanders of southern and central Greece – stepped down while another seven were suspended. One officer was arrested, suspected of simultaneously working as security for the party. These are not small fry: five senior individuals were moved to other posts pending an investigation of collusion: the chiefs of the police special forces, internal affairs, organised crime division, firearms and explosives division, and the Dias motorcycle force.
The government said its simultaneous moves against the officers was to ensure “to ensure the absolute objectivity” of the inquiry into the Golden Dawn. Defence minister Dimitris Avramopoulos has also ordered an investigation into allegations that some members of the army’s elite special forces have trained the party’s militias.
But police collusion with the party is hardly a fresh revelation. In one internationally famous incident in 2012, police stood by while the party hurled rocks into an open-air auditorium where a play with gay content was being performed. The theatre manager made calls to the chief of police, begging him for protection from the mob as the fascists beat up journalists.
“This was the Greek Kristallnacht,” the play’s director, Laertis Vassiliou, told the BBC’s Paul Mason at the time.
“People went home with broken bones. Every day they phone me now, they phone the theatre, saying: your days are numbered.”
Raids on immigrant market stalls by the party’s bully boys go unpunished, again under the watchful eyes of the police. Its offices are aggressively protected from protesters by riot police. Two weeks ago, seven members of the Communist Party of Greece were taken to hospital after some 50 men wielding crowbars and wooden bats fastened with nails and spikes attacked them as they were putting up posters for a youth festival in the port district of Perama, a stronghold for the leftists. But nearby police were indifferent, according to witnesses. The government has long known what the party gets up to and how police give it a nudge and a wink, yet both the party and its police protectors have operated with complete impunity.
Either public order minister Dendias is utterly incompetent or has himself knowingly shut his eyes to the obvious.
But I rather think that the only conclusion that can be drawn is that the country’s leadership believed that the street thugs served a useful purpose against popular left-wing agitation against European austerity, or at least misdirected attention from the economic cataclysm by focussing on migrants, but now with the murder of Fyssas, the dogs must be brought to heel.
In recent months, some commentators such as Skai TV journalist Babis Papadimitriou have called for the Golden Dawn to be brought in from the cold and, so long as it can become a “serious party” and isolate the worst of its thugs, to join the governing coalition. The party was riding high before the murder – with most polls putting the party in third place on 12 or 13 percent, although one internal government poll in July gave the fascists a shocking 18 percent. It has lost a couple of percent nationally since the killing, but in its strongholds, polls suggest that it has easily shrugged off the murder.
A number of leading MPs have for some time now publicly mused about bring the party into government. Earlier this year, New Democracy MP Vyron Polydoras, said: “The Golden Dawn is no threat to Democracy.” Another MP and former leadership candidate, Panagiotis Psomiadis, said ahead of the 2012 elections: “We should join forces with all sister parties, such as X, Y, Z and Golden Dawn.”
The murder and crackdown, ironically, offers the party an opportunity to appear to rehabilitate itself should it choose to play its cards right in the court proceedings, and so far, with the voluntary surrender to police stations by many of its leading members, it’s making some of the right moves (although rhetorically, the party is as dyspeptic as ever).
Meanwhile the centre-left Pasok is one snap election away from oblivion. The latest numbers put it on around four percent, down from its election victory result of 44 percent four years ago. The threshold to get into parliament is three percent. Amongst young people in some major voting districts, the social democrats score zero percent. And with the final demise of the zombie Pasok, New Democracy would need a new ally.
In a previous iteration of the Athens crisis regime, New Democracy and Pasok did not blink when entering into a coalition with the far-right and religious conservative Laos party – a marriage publicly blessed, indeed encouraged, by Brussels. A tidied up Golden Dawn, post-show-trial, would be preferable in certain quarters to the eurozone Hades that they believe would be opened up by a government led by the left-wing Syriza.
Indeed, a day after the murder, it was not Golden Dawn that New Democracy MP and senior advisor to the prime minister Chrysanthos Lazaridis took to task, but the opposition Syriza and allied left groups, attacking the party for “undermining democracy”.
Under the Greek constitution, political parties cannot be banned, but the government now at least has set the precedent of exploiting laws intended for pursuing organised crime.
If you look at the policies of Syriza, it is clear they are a party of left social democrats at most, but the party has consistently been classed both by government-allied media domestically and in some of the foreign press as the left-wing mirror image of the Golden Dawn, the ‘extremists’ of the left.
It would be too much of a provocation for the government to move against the opposition party, but watch for the coalition now to make similar moves against smaller allies of Syriza or independent left-wing activists and trade union militants, which it will describe as “criminal gangs” as well.
New Democracy and Pasok are no defenders of democracy. It is through their economic policies, imposed at the anti-democratic insistence of Brussels, Frankfurt and Berlin, as well as their collusion with the Golden Dawn, that have given birth to this 21st Century fascism of thick-necked gym rats in black golf shirts in Greece. So long as these policies and politicians remain in place, fascism will only grow.
The defeat of the Golden Dawn can only come through the defeat of the architects of austerity.
At times, I do marvel how antiseptic, bland even, that the language of the most wretchedly villainous documents can be.
Last week, the European economic research team with JP Morgan, the global financial giant, put out a 16-page paper on the state of play of euro area adjustment. This involved a totting up of what work has been done so far and what work has yet to be done in terms of sovereign, household and bank deleveraging; structural reform (reducing labour costs, making it easier to fire workers, privatisation, deregulation, liberalising ‘protected’ industries, etc.); and national political reform.
The takeaway in the small amount of coverage that I’ve seen of the paper was that its authors say the eurozone is about halfway through its period of adjustment, so austerity is still likely to be a feature of the landscape “for a very extended period.”
The bankers’ analysis probably otherwise received little attention because it is a bit ‘dog bites man‘: Big Bank Predicts Many More Years of Austerity. It’s not really as if anyone was expecting austerity to disappear any time soon, however much EU-IMF programme countries have been offered a relaxation of debt reduction commitments in return for ramping up the pace of structural adjustment.
The lack of coverage is a bit of a shame, because it’s the first public document I’ve come across where the authors are frank that the problem is not just a question of fiscal rectitude and boosting competitiveness, but that there is also an excess of democracy in some European countries that needs to be trimmed.
“In the early days of the crisis, it was thought that these national legacy problems were largely economic: over-levered sovereigns, banks and households, internal real exchange rate misalignments, and structural rigidities. But, over time it has become clear that there are also national legacy problems of a political nature. The constitutions and political settlements in the southern periphery, put in place in the aftermath of the fall of fascism, have a number of features which appear to be unsuited to further integration in the region. When German politicians and policymakers talk of a decade-long process of adjustment, they likely have in mind the need for both economic and political reform.” [Emphasis added]
Yes, you read that right. It’s in dry, banker-ese, but the authors have basically said that the laws and constitutions of southern Europe are a bit too lefty, a product of their having been written by anti-fascists. These “deep-seated political problems in the periphery,” say authors David Mackie, Malcolm Barr and friends, “in our view, need to change if EMU is going to function properly in the long run.”
You think I’m perhaps exaggerating a smidge? They go into more detail in a section describing this “journey of national political reform”:
“The political systems in the periphery were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left-wing parties gained after the defeat of fascism.”
All this is a load of historical horse-lasagna anyway. Italy for example never went through a process akin to Germany’s denazification, and in Spain, the democratising king, Juan Carlos, played a major role in the transition. Only in Greece and Portugal were there popular socialist insurrections that resulted in or contributed to the overthrow of the regimes: the Athens Polytechnic Uprising played a key role in the Metapolitefsi or ‘polity change’ (although much, much more than the crushed student protests were involved here, including a failed coup d’etat and the Turkish invasion of Cyprus), and in Portugal a proper left-wing rebellion, the Revolução dos Cravos or Carnation Revolution, brought down the Estado Novo regime. Although it is true in the case of the latter three countries that their late-in-the-day construction of welfare states in the 70s and 80s was largely carried out by social democratic forces, the architects of the Italian post-war state were the Christian Democrats, who dominated government for 50 years.
“Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labour rights; consensus building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. Countries around the periphery have only been partially successful in producing fiscal and economic reform agendas, with governments constrained by constitutions (Portugal), powerful regions (Spain), and the rise of populist parties (Italy and Greece).”
Let’s parse that paragraph, shall we? Weak executives means strong legislatures. That should be a good thing, no? Let us remember that it is the parliament that is sovereign. The executive in a democracy is supposed to be the body that merely carries out the bidding of the legislature. There is a reason why liberal democracy opted for parliaments and not a system of elected kings.
Oh, and we want strong central states. None of this local democracy nonsense, please.
JP Morgan, and presumably the EU powerbrokers they are ventriloquising for, finally are being honest with us: they want to do away with constitutional labour rights protections and the right to protest. And there has to be some way to prevent people electing the wrong parties.
Thankfully though, the authors note, “There is a growing recognition of the extent of this problem, both in the core and in the periphery. Change is beginning to take place.”
In particular, they highlight how Spain has begun “to address some of the contradictions of the post-Franco settlement” and rein in the regions.
But other than that, sadly, the process of de-democratization (okay – I’m calling it that. They call it “the process of political reform”) has “barely begun”.
Well, the JP Morgan paper may have been written in English, but there is a venerable Spanish phrase that that all good anti-fascists right across the eurozone periphery know and is probably the simplest and best response to such provocation: ¡No pasarán!
Christ on a stick, that Portuguese Constitutional Court is a pain in the arse. This is the second bleeding time that they’ve ruled bits of austerity illegal. Will somebody please tell them they’re doing it wrong!
I don’t know if anybody’s noticed this, but it’s been just over a year since the EU’s Fiscal Compact was signed, the treaty that gives the European Court of Justice radical new powers to ensure compliance with permanent austerity in the eurozone and most of the not-so-eurozone (the UK and the Czech Republic excepted).
As a result of the Compact, the ECJ – which has been called a “rubber stamp for the EU institutions” by the editor of the European Law Review, legal scholar Damien Chalmers of the London School of Economics – is now the mouth-breathing, club-wielding mob enforcer for austerity.
Under the new treaty, the Court is to police the laws implemented to ensure budgets do not exceed three percent of GDP, that governments do not engage in “excessive macroeconomic imbalances” (which is not really defined, but you can bet that this does not include running deliberately neo-mercantilist economic and trade policies. I’ll not mention any names about who I’m referrring to there. Cough, Germany, cough), and that states bring down total government debt to 60 percent of GDP pretty damn quick – at an average rate of at least five percent a year until they get below the 60 percent reference point. For the average member state, this works out to be around a third of government debt.
If the required “implementation laws” – which are supposed to be made permanent, preferably constitutional – are not passed, the ECJ can hand out fines of up to 0.1 percent of GDP (it is presumed repeatedly) until a government corrects the problem.
The reason the court was given these powers was to remove the exiguous remaining sliver of democratic control over such matters. EU leaders of course don’t put it quite this way. They say instead that giving the court these powers will ‘depoliticise such decisions’. But it is exactly the same thing. De-politicise = de-democratise.
As Chalmers put it last year, shocked at the unprecedented control the judiciary had been given over fiscal policies:
“It might be thought that if national politicians decide to entrench a certain economic policy making model, it is ultimately their prerogative. They are accountable for that choice in both domestic and Union elections. Electorates can kick them out, if they wish, and bring in politicians who will change the policies. However, whilst it will still be possible to give the politicians a good kicking, it will only be that: an exercise in political sadism which will probably be enjoyable, certainly fetishistic, but ultimately only empty. For this is where the Court of Justice comes in. It is there to ensure that the policies cannot be changed whilst the Union lasts in the current format … The Court of Justice judges ensur[es] that there is not the slightest expression of democratic deviation.’”
But now, the Portuguese Constitutional Court has gone and ruled that proposed cuts to pensioners and public sector workers, and reductions in sick pay and unemployment benefits were unconstitutional. The cuts were part of the quid pro quo for the 2011 bail-out for the Iberian nation demanded by the EU Troika. Last year, the same court put a halt to the government suspending payment of a pair of monthly salary payments for civil servants in 2013 and 2014.
Don’t worry though. It’ll all be all right. Responding to the constitutional court’s latest decision, Portuguese centre-right Prime Minister Pedro Passos Coelho says he’ll just slash spending on health and education more deeply than he’d intended instead, so it all balances out.
But all of this still comes at an awkward time if the whole point of snatching decisions out of the hands of elected parliaments and handing them over to unaccountable judges is that the judges are supposed to stick to the austerity line.
No matter, decides the commission. We shall carry on regardless of how hypocritical it may appear. From Sunday’s communiqué out of Brussels, directing Lisbon to disregard the court’s decision:
“Any departure from the programme’s objectives, or their re-negotiation, would in fact neutralise the efforts already made and achieved by the Portuguese citizens, namely the growing investor confidence in Portugal, and prolong the difficulties from the adjustment.
“The Commission therefore trusts that the Portuguese Government will swiftly identify the measures necessary to adapt the 2013 budget in a way that respects the revised fiscal target as requested by the Portuguese Government and supported by the Troika in the 7th review of the programme.”
And here’s where they say that if Lisbon does not do so, the government might just not get that relaxation of the payment period for the existing loans that they’d been all but promised:
“It is a precondition for a decision on the lengthening of the maturities of the financial assistance to Portugal, which would facilitate Portugal’s return to the financial markets and the attainment of the programme’s objectives.”
And, just to be on the safe side, make sure there’s a cross-party consensus on this, mmm ‘kay? So that voters don’t get any ideas that they can change things:
“The Commission reiterates that a strong consensus around the programme will contribute to its successful implementation. In this respect, it is essential that Portugal’s key political institutions are united in their support.”
Just so we’re clear here: Voters cannot be trusted with electing the right people, so we are taking fiscal decisions out of their hands and giving these powers to judges instead. Courts shall enforce austerity. Except of course if they don’t. In which case, courts shall be disregarded.
Austerity is the law. It is the permanent and irreversible law. Should any other laws conflict with this, austerity rests above these laws.
Basically, austerity has crowned itself king, untrammelled by the laws of men. It’s the Joffrey Baratheon of economic policies.
There is an old Latin legal term for this, Princeps legibus solutus est (“The sovereign is not bound by the laws”), a concept first described by Ulpian, a Roman jurist from Tyre. Black’s Law Dictionary explains Legibus solutus further: “Released from the laws; not bound by the laws. An expression applied in the Roman civil law to the emperor.”
Quod principi placuit legis habet vigorem.
What pleases the prince has the force of law.
I always burp up a metaphorical little mini-vomit into my mouth at use of the word ‘solidarity’ by European leaders, which they do far too often, completely misunderstanding what the word means. They drop this buzzword almost as often in discussions of the current crisis as they do the phrases ‘independent supervision’ or ‘budgetary discipline’ or ‘country X is a unique case’.
(Here – I’ve made a wee Austerityland Bingo pdf of crisis buzzwords and talking points for you to print out and play with the kids!)
This is the sort of thing I mean:
“The time has come for a new and deeper approach to economic integration. This implies striking the right balance between responsibility and solidarity in our economic policy-making,” said economics and monetary affairs commissioner Olli Rehn in a 14 March speech.
“Germany is showing solidarity so that in the end, the crisis countries have a future,” German justice minister Sabine Leutheusser-Schnarrenberger told Munich daily Merkur on Wednesday. “So I would ask that the people at the top – the commission president and the Council president – demonstrate solidarity with us and defend the Germans against accusations.”
What is this ‘solidarity’ that Germany (and Finland, and the Netherlands and France and the IMF, and the ECB, etc., etc.) are showing? Lending money that flows straight back into core European financial institutional accounts? In return for slashing wages (‘internal devaluation’, as it is otherwise bloodlessly called), dismantling social services, privatisation of common property, and, let’s be honest, a trimming of democracy and, in Greece, repression of the street-led opposition to austerity severe enough for Amnesty International to denounce the abuses?
This is the consummate application of Doublespeak: The use of a term, solidarity, and its translations – that has been the watchword and bond of working people to each other, generation after generation, yea unto the 17th Century (or thereabouts) – in a way that deliberately reverses its meaning.
For ordinary people, for us, it is the word that means that we will take care of each other in good times and at all other times, but also, crucially, the obverse of this understanding, which is that we will all stand together, against any enemies, to stop any of us from coming to harm. “An injury to one is an injury to all,” was the motto of the Industrial Workers of the World, one of the first industrial unions.
All of this, this most human of behaviours, is the opposite of charity – not that charity even comes close to the ‘solidarity’ that is being imposed on the European periphery – and is offered without any expectation of exchange. Such concepts are so foreign to Europe’s current leaders that it is no wonder they are using the word wrong.
It has to be said though that there are some in the European opposition that are also misunderstanding the meaning of solidarity, or at least not permitting it to encompass all who require solidarity.
Italian philosopher Giorgio Agamben has written eloquently on the permanent state of exception – how governments in times of crisis extend their powers and rights of citizens are diminished or overridden; as well as the concept of homo sacer – the individual reduced to ‘bare life’, deprived of all rights and placed outside the law, such as the ‘non-combatants’ of Guantanamo Bay, afforded none of the rights allowed citizens or prisoners of war. (I appreciate many of his insights and actually doffed my cap to him last week when I created a Tumblr jokingly named after him, of a collection of photos of genuine Playmobil, Lego and Fisher Price ‘riot police’ toys – something perhaps tangentially related to this current blog.)
But a couple of weeks ago, evidently furious at perfidious Teutonia, Agamben departed somewhat from his academic focus and in a brief column – in Italian centre-left daily La Repubblica subsequently reprinted in its French analogue, LibérationLucasian, under the provocative, headline “The Latin Empire should strike back!” – he argued for the creation of a southern European bloc, or ‘Latin Empire’ (eliding non-Latin Greece into this configuration) in contradistinction if not opposition to the alleged German hegemon.
For him, the antagonism at the heart of Europe is not the elites of all nations against the rest of us of all nations, but nation vs nation, culture vs culture. Between the PIGS (Portugal, Ireland, Italy, Greece and Spain, et al) and the ‘FANGs’ (Finland, Austria, the Netherlands and Germany et al).
“Not only is there no sense in asking a Greek or an Italian to live like a German but even if this were possible, it would lead to the destruction of a cultural heritage that exists as a way of life. A political unit that prefers to ignore lifestyles is not only condemned not to last, but, as Europe has eloquently shown, it cannot even establish itself as such.”
Sympathy for Cain
I have to say, as furious as I am at the German leadership, I have no time for those who would locate the source of injustice with Germany tout court. It is European elites and structures as a whole, however black-hearted Berlin has been, who bear responsibility for the current debacle.
Agamben and too many like him forget that is not ordinary Germans who are responsible for the hollowing out of democracy and economic shock therapy across Europe. They are as much victims as ordinary Greeks. Indeed, the German Social Democrat-Green administration of Gerhard Schroeder and Joschka Fischer at the turn of the millennium imposed the Agenda 2010 package of measures that to a great degree laid the groundwork for the current disaster by repressing domestic demand and embracing an aggressively mercantilist outlook to other European economies. Agenda 2010 comprised a radical programme of cuts to social welfare (healthcare, pensions, unemployment payments) and labour market deregulation that has ramped up poverty, precarity, and consolidated a low-wage underclass.
Germany is no economic miracle for regular Germans. Low levels of unemployment mask the fact that the country now has the largest temp agency workforce in Europe. Almost two percent of employees are now temps, earning on average 40 percent less than permanent workers. Conditions are atrocious in this shadow labour market, with temps often unpaid for their trial period, no fixed hourly rate, no sick pay, no overtime pay, no choice but to work through weekends and holidays, and wages as low as five euros an hour. According to the Bundesgentur fur Arbeit, in 2010, as Brussels was cheerleading German economic success amidst gloom elsewhere in the eurozone, 53% of all new job creation was in fact in the temporary sector. Companies such as BMW in Leipzig set up fake agencies that service only one firm, and transfer staff to the new ‘daughter company’, slashing wages by 40%.
A full quarter of the workforce now is in the low-wage sector, defined as under €9.54 in the west and €7 in the east, four fifths of them with either a completed apprenticeship or university education, according to a December report from the National Conference on Poverty (NAK). The number of elderly dependent on welfare benefits has climbed from 250,000 to 400,000 since 2005. A total of 12.4 million live below the poverty line.
Agamben in his recasting of Huntington’s Clash of Civilisations as an Impero Latino vs Neues Reich struggle unfortunately fails to remember all this. In so doing, he also actually unintentionally buttresses the false Bild narrative of two irreconcilable cultures, of a frugal, industrious north and feckless, lazy, spendthrift south.
This nation vs nation construction is as spurious as European elites’ Orwellian view of solidarity. But where the first is the opposite of solidarity, Agamben calls for a genuine solidarity, but between the wrong people. This solidarity is the false unity of nationalism. However improbable the actual formation of an anti-German southern bloc (though the risk of a southern fraying of the EU is already being factored into long-term calculations by market actors), Agamben is not the first to make such arguments laying the blame at the door of the supposed ‘Hitler-Merkel’. little different in its way to the infamous piece in El Pais on 23 March by Univeristy of Seville economist and leading member of Attac Spain Juan Torres Lopez, “Germany vs Europe” (since withdrawn from the site [a worryingly censorious development, whatever one thinks of the author's words], but mirrored here) in which the author avers: “Merkel, like Hitler, has declared war on the rest of Europe, this time to secure their economic lebensraum”. (The Daily Telegraph’s Bruno Waterfield, an implacable opponent of EU post-democratic shenanigans and austerity strategy, makes a similar point about anti-German hysteria falling decidedly wide of the mark).
To argue for the overthrow of the current European austerian regime via a retreat to nations or ‘southern bloc’ is not so much problematic for any supposed awakening of slumbering daemons as is frequently argued by the likes of European Commission President Jose Manuel Barroso and ex-Eurogroup chief Jean-Claude Juncker (It is quite clear, from the advent of Golden Dawn to Jobbik to Marine Le Pen to Geert Wilders, they have already awoken quite within the bosom of a still-unified European Union), but that it does not target all those responsible for the crisis and for austerity. Domestic elites are left alone. While Papandreou, Berlusconi, Socrates and now Anastasiades were thrown under the bus, is the appropriate response really allying with these characters and the rest of their class, who still back the Brussels consensus and would have done little different to Merkel were they in her shoes?
Moreover, the Agamben view abandons those ordinary Germans to the depredations of the CDU-SPD-Green policy concurrence. The division in Europe is not between north and south but between the elites and the rest of us. To coin a phrase (an admittedly imprecise one to be sure, but still): the 1% versus the 99% – of all of Europe.
All this is not to say that there is some mass anti-austerity consciousness in Germany or Finland or elsewhere in the FANGs countries. Quite the contrary in Germany (although the Netherlands is a very different story). Indeed, as a result of the dominance of the Bild-Merkel narrative domestically, one of the most important efforts must be efforts at breaking its hold. There are groups bringing people from Greece to Germany on speaking tours, explaining what is actually happening. There will also be the protests outside the ECB headquarters – the Blockupy Frankfurt at the end of May in Frankfurt – an effort that repeats last year’s demonstrations against the central bank. These are some of the most important propagandistic endeavours in Europe at the moment.
And I’ve discussed before the rising of a pan-European movement against austerity and European post-democracy. It’s still baby steps, but the one-day general strike last 14 November – the first such cross-border general strike in history, was a major advance even if largely symbolic. And, crucially, networks linking up the opposition across borders have been in operation for about a year and a half now, although again, these seem to replicate already-existing left-NGO/academic grapevines that in the past have come together for other issues and now just repurposed for the current conjuncture (a criticism they themselves recognise and are working to transcend). Suffice it to say that there are many who understand the meaning of the word ‘solidarity’, but discussions of European anti-austerity resistance strategy is a topic for a blog post another day.
From Colour Revolutions to locum tenens for a prodigal social democracy
More interesting to me for the purposes of discussing what solidarity really means in Europe today is the curious phenomenon of ‘Solidarity Now‘, Hungarian-American financier and philanthropist George Soros’s new crypto-anti-austerian endeavour, launched this week.
The scheme aims to bring together ordinary Greeks in difficult situations with ordinary Europeans from outside Greece to establish social centres, or what the group is calling ‘Solidarity Centres’, focussing on healthcare, heating, housing, legal aid, job-seeking assistance, and support for vulnerable groups such as elderly and migrants.
Combining a sort of Kickstarter, crowd-sourced funding with cash from one of the richest men in the world, Solidarity Now will match small donations from “people around Europe and larger contributions from philanthropies and individuals” to “offer space to new and existing civil society organisations in Greece, facilitating cooperative community solutions to pressing social and economic problems. Each locally run centre will address the unique needs of its community.”
But before we go any further, do have a look at this remarkable video produced to promote the quite fascinating project:
I have to say that I’ve watched this clip about five times now and I still get goosebumps and watery eyes (but then I’m a complete big-girl’s blouse when it comes to these sorts of things. I get watery eyes at Apple adverts and that clip of the view from the International Space Station at night and the complete Space Shuttle missions), so I have to remember to put away my maudlin and sentimentalist tendencies in a box for a minute and analyse this level-headedly.
Nonetheless, this two-minute clip is thoroughly novel. To me, this is what a 21st Century social democratic ad campaign might look like if social democracy were not the stumbling zombie of a political philosophy that it is, capitulating to the right’s every position and shuffling along, a corpse and yet not quite dead at the same time, waiting like Pasok for something to put it out of its misery.
As a couple of young Interrailers (or are they Roma?) walk through a busy train station, text hovers above different people saying “We are all French, Italian, Irish, Greek, Spanish, German, Dutch” – (the PIGS and the FANGs together). The clip is filled with with people of different skin colours but in a way that is not tokenistic like the sole black woman, say, in some European Commission clip advertising the European Year of Sausage Innovation or whatever. The Europe in this video is a Europe that is more than comfortable with immigration; it is a Europe that celebrates it. “We are all borders,” the text continues. “When you are not safe, I am not safe,” over an image of a young, possibly Arab child (at mosque with his father? Or is he huddling in refugee camp with his uncle?). “While you are not free, I am not free,” over young people lighting candles and placing them on a pavement (the pavement where one of their friends was murdered by a Golden Dawn fascist?). “While you are homeless, I have no home,” over various people sleeping in places that are not beds. “When you lose your job, I lose mine.” And so on like this. How markedly different this is to the social democrat attempts to out-do the right in anti-immigrant positions, in attacks on the recipients of social welfare, on the homeless, the unemployed and the ‘scroungers’!
How used we are to seeing video footage of demonstrations as events to be feared, yet in the clip, we see smiling citizens marching behind a banner in the sun as the Sigur Ros-like music swells and the text reads “No people should fall and keep falling.” The protest in this clip is what protests are: the natural, welcome, democratic expression of the people and not something to be frightened of. But then in black and white, we see riot cops and tear gas – but from the point of view of a protester. How scary the police seem in this video, which they of course do in real life to anyone who has ever seen riot police from this same viewpoint. “When systems fail, it’s the people who hold up our world.” The sun comes back and it looks like Cypriot protesters this time, hands aloft as if to say “Enough!” And finishing with “We are all Europe. Solidarity Now.”
Some of you will instantly point out that this is still all very vague and who exactly is George Soros anyway and isn’t this a bit top-down and unaccountable? You’re not wrong here and I’ll get on to that in a minute. But for now just sit and marvel at what this is: This is, at least in visual terms, a sharp disagreement with the Brussels consensus, the consensus that everyone, of all parties, is repeatedly told that they must sign up to because there is no alternative. The Open Society Foundation, a thoroughly mainstream and respectable outfit, is saying, Sorry, but there is an alternative. And it’s we, the ordinary people who must build it when systems fail. For me, if people like George Soros are peeling away from the consensus so publicly, it confirms how mainstream anti-austerity opposition has become.
Solidarity Now is part of a broader initiative, the new Open Society Initiative For Europe (OSIFE), launched last year. A message from the young Catalan director of OSIFE, Jordi Vaquer, describes his understanding of the political situation, and I think it is worth quoting at length to get a good sense of the direction all of this is headed:
“People across Europe mistrust political parties and parliaments, depending on the country, only unelected bodies (e.g., constitutional courts, the police, the armed forces, churches, and even television,) have escaped a dramatic drop in trust. Common European institutions appear to be more removed than ever from people’s everyday concerns; the European Union is increasingly seen as part of the problem, rather than a solution. Meanwhile, welfare, multiculturalism, solidarity, tolerance, accountability, integration, and other values upon which Europe has built its post-World War II democracies and its integration process are under unprecedented attack. It would be easy to draw the conclusion that that the economic upheavals have taken a heavy toll on European democracy.
Perhaps the reverse is actually true. Perhaps it is the failure of the European democracies and of their common project which explain the current predicament in which Europe has found itself economically. Institutions that lie at the heart of representative democracies, including trade unions and, in particular, political parties, have implemented policies that have alienated them from the constituencies they claim to represent. In the past two decades, people in Central and Eastern Europe have become used to politics without real policy alternatives or, in Slawomir Sierakowski’s words, to choosing not between right and left, but between right and wrong—that is either following the euro-Atlantic (neo) liberal consensus, or voting for undemocratic or irresponsible alternatives.
This narrowing of the political space has also occurred elsewhere in the European Union, most noticeably in its Southern periphery in the context of the euro crisis. Meanwhile, independent institutions whose legitimacy stems from their ability to handle key aspects of economic life in an impartial manner have proven to be inept at regulating the market in order to avoid cycles of boom and bust. This has had devastating effects on quality of life. When policies promoted as the only reasonable or realistic course result in economic devastation, it should come as no surprise that the whole system is called into question.
Criticism of the state of European democracies and of the democratic quality of the European integration project comes from different corners. In many instances, traditional players in the system raise their voices, just as they have for a long time: from the traditional Left to a large swath of organized labor. A new generation of protesters has been active on the net and in the public squares and the media with calls for democratic renewal that have struck a chord with significant numbers of people.
Not all expressions of populism should, however, be treated in the same manner. On the one hand, there is a brand of populism that works to enlarge the scope of democratic debate and include new constituencies; on the other hand, there is xenophobic populism, a significant political force in more than half of EU member states which strives to disenfranchise and exclude significant segments of the population from political and social life.”
I don’t think there’s a single word wrong here.
Simultaneous with the launch of Solidarity Now, OSIFE released a fresh survey showing that ordinary people do not blame each other for the crisis, but the European institutions and their own political elites.
“People across Europe refuse to blame ordinary people in countries such as Greece for the crisis. Three quarters (74 percent) of Europeans surveyed agree that ordinary people in countries like Greece are unfairly suffering the consequences of a crisis that they didn’t create. However, an overwhelming 92 percent believe politicians across Europe have lost touch with the suffering of ordinary people in the wake of the financial crisis.”
As Soros put it last October discussing his plans to launch the new project: “The European Union was conceived as an instrument of solidarity and co-operation. Today it is held together by grim necessity.”
Now on to the criticisms.
This remains all very vague, as mentioned. What exactly is being planned here? Are these Solidarity Centres going to be organising points for resistance or just a sort of softly politicised charity? There appear not to be any connections with existing opposition mobilisation. I think the best that can be said at this point is that we need more details. It would be surprising if the Open Society folks got involved on this level. Surprising but not shocking, I should say. The Soros peeps remember were some of the cash-carriers for the Colour Revolutions in bits of eastern Europe eight or nine years ago. There was a lot of nonsense written at the time about how these were Western-orchestrated operations but squares do not fill with demonstrators night after night because George Soros or the German embassy has funnelled some cash to the organisers (however helpful that might be). And Soros and his Open Society pixies have been very catholic in who they support. Critical Resistance, a US-based prison abolition movement, has received hundreds of thousands of dollars in grants from them for example.
Nonetheless, I don’t think Solidarity Now is going to achieve anything more than say a pint-sized Medicins Sans Frontieres or a Greenpeace. And so far it’s limited to Greece, although as I understand it, there are plans to spread the concept elsewhere as part of OSIFE.
But should it prove successful and spread to other peripheral states, would we want the anti-austerian resistance to be bank-rolled by this sugar daddy?Also, perhaps it’s a bit much to describe this effort as anti-austerian. We don’t actually know what the full politics of the situation is. We are familiar with Soros’s widely published criticisms of the austerity course, which amount to a sort of middle-of-the-road Keynesianism, but mobilising resistance to the current course on the ground is a much, much dirtier affair than having polite disagreements with policy-makers in the back pages of the Financial Times.
I am also certainly aware that Karl Popper’s concept of the open society – the analysis at the core of all of Soros’s philanthropic work – is a fundamentally liberal framework incapable of grasping the structural contradictions of the post-war truce between capital and labour that is now breaking down. Soros’s ‘Tragedy of the European Union’ theme he repeats wherever he speaks makes insufficient mention of the post-democratic black hole at the heart of the eurozone’s crisis response, perhaps so as not to frighten the horses. So far, his is a mainly economic frustration, rather than a political one, at least in terms of public utterances.
Still, I’m open-minded. If Soros has decided to start engaging in democracy promotion in the heart of Europe and not just the east or the ‘Stans in central Asia, to say that this is interesting would be an understatement.
Avanti o popolo
Another effort, so far somewhat more modest, but also trying to carve out some sort of break from the Brussels consensus, is the new Avanti Europe project, from Green MEPs Franziska Brantner and Sven Giegold and the French EU affairs think-tank EuropaNova. Its slogan may be “Solidarity with the people of Greece” but its key demand, presented in a smaller font underneath, is the decidedly modest “For a revision of austerity policies”.
Here, the plan appears to be a sort of clicktivism akin to Avaaz or MoveOn.org, a comparison blogger Jon Worth accurately made this week, in that supporters are encouraged to sign an online petition “to prevent a humanitarian catastrophe”, asking the members of the EU-ECB-IMF Troika “to revise the austerity plan and put humans and their needs at the centre of your decisions.” Other campaigns are apparently in the works.
The petition, which has 1837 signatures as of this writing, will be presented on 9 May.
Right. So 30+ general strikes against the Troika in the European periphery and the austerians remain unmoved, but a petition with a couple thousand names will make them reverse course?
I don’t want to be snarky. I really don’t. These people have their heart in the right place. Online activism, organised well, has proven to be a powerful weapon in the hands of ordinary people and has helped pull down tyrants. But this is just not that.
But that’s okay. No matter. Try again. Fail again. Fail better.
To my mind, it’s great that a pair of German Green MEPs are willing to stand up against austerity and structural adjustment, but where is the rest of their party? And across Europe, Greens in government have without exception shown themselves to be willing participants in this crime. If Franziska and Sven disagree with this, as they appear to, their time would be best spent working like the organisers of Blockupy Frankfurt to break the Bild-Merkel narrative domestically rather than sending e-petitions to the Scharfrichters of the Troika.
But I think my favourite bit of activism along these lines recently was the lone wolf commission staff person and friend of mine – let’s call him Jan – who, furious at what was happening to Greece and in particular how hospitals are running out of medicines and even blood, decided that he was going to organise a fundraising bake sale or something similar in the entrance to the commission, but instead of for some worthy orphanage in Uganda, the money raised would go to the Greek Solidarity For All Committee, a network of hundreds of self-organised initiatives that blossomed out of the popular assemblies of the squares and the neighbourhood committees of the anti-road-toll movements of 2009-11 in the country.
Replacing collectively what has been stolen from them, the network organises social clinics and pharmacies, food distribution, collective kitchens, ‘social grocery shops’ that connect farmers directly with urban households, legal aid, and immigrant support. Solidarity For All was created to facilitate communication between the different groups that had popped up and to co-ordinate a horizontal international campaign of solidarity with the Greek people both on a political and financial level, as well as in the form of direct donations of medicines and foodstuffs.
“Jan” was not surprised at all to find that such a fund-raising effort would not be possible. But at least some noses were tweaked
This, from the bottom up, ordinary people coming together in networks of community, public-spiritedness and altruism – is what solidarity is really about. It cannot legislated. It cannot be written into any memorandum of understanding. Appropriate amounts of it cannot be agreed upon behind closed doors in return for sufficient ‘responsibility’. It flows out of us unbidden and without expectation of reward, most especially in times of catastrophe. It is the most human thing in the world.
I am my brother’s keeper. Or, as The Hollies put it, ‘He ain’t heavy, he’s my brother’.
To find out how you can help the people of Greece, get in touch with the Solidarity For All Committee at +30 210 3801921 or +30 210 3801925 or firstname.lastname@example.org
This year, instead of running a sponsored marathon for the local donkey sanctuary, do it for Greek cancer patients whose medicines were snatched by Olli Rehn.
One of the most frightening aspects of the crisis is how it appears that our leaders are increasingly at a complete loss as to what to do.
It’s common to come across popular spitting fury at the ‘banksters’ and ‘conmen’ who govern us, as though those with their hands on the levers of the European system are moustache-twiddling cartoon-mastermind villains of unbounded venality (cf. Matt Taibbi’s characterisation of Goldman Sachs as a ‘vampire squid wrapped around the face of humanity’).
But as we peer goggle-eyed and gap-jawed at the scale of the debacle of the Great Cypriot Bank Robbery and the blame game that has followed, it is manifest that we are so very, very far from being ruled by a cabal of cat-stroking Lex Luthors and Ernst Stavro Blofelds of finance. On the contrary – we are ruled by the Three Stooges of finance.
Each of the individuals involved in the negotiations last weekend has been eager to stress how he or she was not responsible for coming up with the idea of imposing the ‘stability levy’ on those with under €100,000 in deposits. All actors have been keen to seek out their preferred media outlet to plead their case.
(Although I should say here: Why isn’t anybody screaming “Hello? What’s with all the Kremlinology? Why do we have no choice but to report on decision-making of this import and impact on domestic laws and finances in essentially the same way that we report on the election of the Pope? Why does the Eurozone’s de facto legislature operate like a papal conclave?”)
The ECB’s Joerg Asmussen basically said: ‘It wasn’t us.’ Cypriot officials said: ‘It was Schaeuble.’ Schaeuble said: ‘It was the Cypriots, the Commission and the ECB.’ ‘Rehn started it.’ ‘No I didn’t.’ Unnamed officials darkly hint that the Cypriots care more about Russian oligarchs than they do their own people while Nicosia publicly accuses the ECB of blackmail. France says they never supported the plan. Fingers are pointed at the Finns, Slovaks and Dutch as bullies egging the big kids on.
But all we have to do is go read the press statements of Saturday morning to find very few dissenters from the arrangement. Even European Parliament President Martin Schulz, who had nothing to do with the crafting of the deal and should have been free to be more critical publicly if he really felt that way, as of Saturday had only timid concerns, agreeing that depositors should pay for some of the bailout, and only called for an exemption for those with sums under €25,000, however much he is now thundering at the injustice of what has happened.
The most enlightening nugget in the FT’s investigation is when we find out that a proposal to exempt low-level depositors ‘was only actively supported by Ramon Fernandez, the French treasury chief – a fact that supports [French finance minister Pierre] Moscovici’s claim to have been an early opponent of the levy on smaller savers. “The rest did not care.”’
That is to say they all, with the possible exception of France, share the blame.
Over in the UK, British Chancellor George Osborne’s scramble on Sunday to reassure UK depositors in Cyprus that they will be reimbursed (at a back-of-the-envelope cost of £138-200 million), reeks of something of an afterthought, not least because his deputies (underlings? henchmen?) later wobble, saying that only ‘most’ of any monies seized will be recompensed.
And the Eurozone’s conclave of necktied cardinals all quickly row back after the fury on the streets of Nicosia and the Cypriot parliament does its democratic duty and pushes back, rejecting the deal (the first domestic parliament in Europe brave enough to do so).
They all just seem so utterly at a loss as to what to do, other than to stick to the received consensus wisdom of TINA – There Is No Alternative.
Attempting to pin the blame on a particular actor misses the point. We have to remember that not just in the Cypriot case, but for each of the euro-crisis intensive-care patients, there is a role that the ECB plays, that the IMF plays, that the European Commission plays, that the Council of Ministers/Eurogroup/European Council plays, and that local elites play. Positions are often overlapping but conflicting, representing the different elite domestic and/or institutional interests to which a particular actor is most sympathetic.
Yet when we take a helicopter view, we see that the shock-therapy course is agreed by all, regardless of nationality, institution or party. Asmussen and Dijsselbloem are social democrats and Anastasiades is a conservative. Truly, anyone who still believes that there is any difference on economic questions between Europe’s social democrats and conservatives any more can only be a member of one of these two rapidly dwindling tribes.
So saying that the Cypriot debacle is all the EU’s fault or all Berlin’s fault may be incorrect, but saying that it’s all the local comprador elites’ fault is also incorrect. It is a complicated interplay of interests between these different actors, just as Greece’s late Pasok prime minister, George Papandreou may have been thrown under the bus by the Frankfurt Group for threatening a referendum on a second bailout – but ideologically he represented nothing different.
Russian vs European oligarchs
And as if the raid on bank account-holders with less than €100 large was the only egregious act performed in the wee hours of last Saturday in Brussels in any case. What about the 70-something couple for whom €120,000 maybe is their life savings? Or the small and medium-sized businesses for whom that sum represents a payroll account?
And if there really is the concern on the part of the rest of Europe about Russian oligarch accounts, could they not have been forfeited instead? Why are no senior bondholders – hedge funds or other holders of Cypriot sovereign debt even talked about as subjects for bearing some of the pain?
All those who signed off on Saturday’s deal endorsed once again a programme of austerity, privatisation (of utilities) and structural adjustment worth some 5.75% of GDP – the same recipe that has such a depression-beating success elsewhere. The record is broken. Beyond its injustice, the strategy plainly is not working. As elsewhere, an economy already in recession will be bludgeoned by additional austerity, likely meaning a second or third kick at the bail-out can somewhere down the line, in turn requiring still further austerity in a vicious cycle.
The focus on who is to blame also occludes the step change from private to public of threats of economic violence from Frankfurt and Berlin that has occurred in the wake of the Cypriot parliament disobedience. The threats aren’t new, but they have been made privately until now. And their wrath is something to behold. So now we have an ultimatum from the ECB that it will cut off its Emergency Liquidity Assistance, snuffing out the oxygen to Cypriot banks. They will collapse, with all the social dislocation that would bring.
Schaeuble, unused to being defied, roared: “The ECB has made it clear that without a reform programme for Cyprus the aid can’t continue. Someone has to explain this to the Cypriots and I think there’s a danger that they won’t be able to open the banks again at all.”
Someone has to explain this to the Cypriots. The same refrain we’ve heard throughout the crisis, but with added bile: Vote how you like, dum-dums, so long as it’s the right way.
And lest we think France somehow gets a gold star in all this, her representative on the Eurogroup Working Group, which comprises deputy finance ministers or senior treasury officials from the 17 eurozone members, as well as representatives of the ECB and Commission, has this to say as regards democracy in Cyprus: “The (Cypriot) parliament is obviously too emotional.”
Lastly, where is this sudden concern about tax havens and Russian oligarchs and organised crime coming from anyway? Leaving aside the bail-out cash that never actually lands in Greece but heads straight back to northern reckless lenders, the ‘oligarchs’ of core European finance, the chutzpah of a Dutch chair of the Eurogroup or a Luxembourgish finance minister making any noise about tax havens is breathtaking.
Ah, I hear you say, but European oligarchs aren’t quite like Russian oligarchs. They aren’t up to their tits in organised crime.
Well, let’s have a look at the shenanigans of UK multinational bank HSBC, ordered twice by US regulators in 2003 and 2010 to tighten its anti-money-laundering activities. Then in November last year, it was found that HSBC had set up offshore accounts in the Channel Islands tax haven of Jersey for suspected drug-dealers and other criminals, prompting Her Majesty’s Revenue and Customs to launch an investigation. The following month, HSBC was fined $1.9 billion for allegedly laundering some $881 million in drugs cash for cartels. The company turned a blind eye to Mexican drug cartels using its branches to launder millions, with staff also stripping identifying information off transactions from embargoed countries such as Iran and Sudan. The company has also been accused of laundering money for terrorist groups. But of course, as the aforementioned Rolling Stone journalist Matt Taibbi put it in his investigation of the case, HSBC is ‘Too big to jail‘.
There aren’t Russian oligarchs who are eeevil and European oligarchs who are saintly. There are just oligarchs.
And of course the useful idiots – the bungling stooges – who abet them.
Portugal e Espanha e toda a Europa juntos
A couple of years ago in Brussels, I was at a debate on Europe and the crisis between Dan Hannan, the frothingly anti-EU but witty UK Tory MEP, and Giles Merritt, the avuncular secretary-general of the integrationist think-tank Friends of Europe. As it is wont to do at these sort of events, the perennial EU-dork topic of a ‘European demos‘ came up.
I’m probably butchering his argument and he’s welcome to correct me, but as I remember it, Hannan’s point was that the nation-state provides the best and only possible geography for popular, democratic endorsement of any particular set of policy options (austerity or otherwise), as the nation-state offers a natural demos (a self-aware political community), while there is no real European demos to speak of beyond European elites.
Outside of the Ryder Cup, Europeans do not think of themselves as European, so his argument goes, but rather as Greeks or Italians or Danes or Slovaks and so on, and they do not look to the European institutions as their representatives or government and never will. It is an unnatural formation compared to the demos that flows without effort from the unity and historicity of the nation.
Merritt conceded that the lack of a European demos went to the heart of how to manage the crisis, as the policy responses were far-reaching and European citizens did not really have a way to feel that they were participating in their construction. The economic crisis was of course simultaneously a political crisis and the one would not be solved without solving the other. The eurozone catastrophe thus had moved the long-standing question regarding a lack of a European demos out of the realm of political scientists (see for example this decade-old analysis) and thrust this vital question to the centre of debate.
But unlike for Hannan, for Merritt, the lack of a European demos was not something that was fixed, but something that could be changed, possibly through the construction of some sort of a political union atop what already exists, with the European Parliament taking a more decisive role. But most importantly, contrary to Hannon’s assertion, there was no such thing as a ‘natural demos’ historically. Via Mazzini and Bismarck, to take just two examples, what is now viewed as a natural demos in Italy and Germany once upon a time had to be constructed, and this, just as today, had happened in a mix of top-down and bottom-up ways.
Both characters, and other debaters who were there, had a lot more to say, and the conversation quickly turned to the economics of the subject at hand, but this tiny bit of the debate around a demos - a stale old argument become fresh again – was what stuck with me, and, in particular, a brief little concluding nugget of banter from Merritt.
As a throwaway line hardly remarked upon, Merritt at one point quipped that the growing number of anti-austerity demonstrations and movements that were emerging, whatever one thought of them (and I can’t imagine Merritt thinking very much) could ironically actually help create this ‘European demos’ so long lacking and desired by the EU’s visionaries, as across Europe, for the first time in history, the EU rather than any domestic actor was the focus of popular anger.
“Maybe these European ‘demos’ will give rise to a European demos,” he said in a joke that unfortunately fell a bit flat, as it required a subtle play on the plural of the English abbreviation for a political demonstration: a ‘demo’ (Just as in French, ‘manifestation’ becomes ‘manif’; in English, ‘demonstration’ becomes ‘demo’. But the former ‘demos’ is pronounced ‘dem-oze’ and the latter ‘demos’ is pronounced ‘dem-oss’). Still not getting the joke? Fine. As I said, it passed by largely unnoticed, despite its foresight. But roll with me here.
However groan-worthy and offhand the witticism, it has stayed with me as particularly lucid. In the last few months, as political instability and popular anger has exploded across a great swathe of Europe, it has kept appearing in my mind.
There are the votes for Syriza, Golden Dawn, Beppe Grillo’s Five Star Movement, the True Finns and Sinn Fein (all of which have radically different perspectives and, I stress, SHOULD NOT BE LUMPED TOGETHER, as some lazy analysts do, as a homogenous ‘southern populism’ [not least because Finland is not particularly southern]); and the phenomenon of the Indignados of Spain; the terrorist groupuscules of Athens; the general strikes that are now common across the bloc’s southern flank.
So far, the strikes are not properly co-ordinated across borders, although Europe’s first ever one-day cross-border general strike did indeed take place last 14 November touching Spain, Portugal, Greece and Italy (admittedly with varying levels of adherence). It is also true that much of Germany remains in thrall to the false Bild-Merkel narrative of a thrifty north and feckless south, but it is at the same time remarkable that despite this ideological uniformity, young Germans of ‘Blockupy Frankfurt’ demonstrated last May outside the ECB against European austerity in violation of the city’s banning the protest, with European banking superintendents (as opposed to local German objects of frustration) being the clear focus of their fury.
The loud voices of the anti-austerity thousands across Portugal last month singing once again, a generation later, 1974′s revolutionary anthem, ‘Grandola – Vila Morena‘ against the dictator Salazar, have gone viral, but it is just as noteworthy to hear the young and middle-aged and old equally packed in their thousands into Madrid’s Puerta del Sol singing the very same song in the language of their ancient Iberian rivals. Bulgaria has torn down a neo-liberal prime minister while Slovenia has been racked by its biggest uprising since the fall of Communism, with 42 protests across the country’s major cities since last november, against both local and European austerian and corrupt elites.
For the indignant of Europe, there are local comprador enemies of course, but the real object of the rage lives in Brussels, Frankfurt and Berlin. And the anger is reaching a boiling point, as the destabilisation of Greece shows. European elites should be (and are by all reports) terrified that such unravelling could spread to Italy.
On Thursday, as EU leaders met in that unelected senate that goes by the name of the European Council, which governs Europe from behind closed doors while never facing a general European election, some 15,000 people from across the continent braved a snowy, beautiful Belgian winter in the European capital to protest what these elites are imposing without permission from their subjects.
Protesters from Occupy the Troika, taking their inspiration from the Occupy Wall Street movement across the Atlantic, and calling for a “European Spring” akin to the Arab Spring, occupied the Directorate General for Economic and Financial Affairs, directing their anger at that stubborn lieutenant of austerity, Olli Rehn. Some 30 were arrested.
I don’t want to romanticise some aspects of the rainbow of different reactions to crisis and austerity. The right-most, of Golden Dawn, are murdering foreigners and intimidating theatre-goers to plays with gay characters. The pan-ideological Grillo mixes a confused and economically illiterate opposition to austerity with dark words for immigrants and kind words for fascists.
But the most progressive of these formations are beginning to come together at their own conferences and summits, earnest in trying to come up with constructive proposals about what a credible alternative to Rehnism should be. Discussions about what a good European Union would look like jostle up against arguments calling for the EU’s dismantling, and everything in between. Some of them I personally feel are bonkers. Others bear further investigation. Still others are brilliantly transformative while still thoroughly viable. The debate is tumultuous online.
I find it amusing to see how much aggravation the European institutions go through trying to navigate everyone’s different languages, but largely in an effort to keep everyone’s linguistic chauvinism in check, while down at the bottom of Europe, the forgotten and spurned – but hypereducated in many cases – just get on with it. This has so long been the argument of conservative critics of Europe – that without a common language, political unity is impossible. But here down below, a sort of euro-English is the rough lingua franca, while at the same time all languages are given their due. Even the smallest of language groups is taken into account. The interpreters and translators who work by day for the EU institutions, by night volunteer in other spaces in Brussels so that the young European opponents of European austerity can congregate and conspire and construct a better Europe. And so many of the young activists – the Erasmus generation – are multilingual or will teach themselves what needs to be learnt in the process of organising and campaigning.
I don’t want to suggest all of this is coherent or has all the answers, or even in agreement on what is to be done.
But here, underneath, from the streets and the workplaces and the schools, whatever you think of it, a genuine European demos is emerging. The shoots of a European spring are pushing themselves up through the hard earth of a long, long winter.
And these protesters are not Greeks or Italians or Slovaks or Danes. These protesters are Europeans.
As giddy as I am about the drubbing that unelected fiscal superintendent and senator for life Mario Monti received in Italy in the weekend’s elections, it remains the case that Beppe Grillo’s pan-ideological Five Star Movement (M5S) is no genuine alternative to Bersmontilusconism.
I don’t have time until the end of the week to write much about the results, but for now, a link to the Italian writers’ collective Wu Ming, who do a good job taking Grillo down in this brief post – especially reminding us of the continued imposition of austerity by Parma’s M5S mayor elected last year, Federico Pizzarotti. (One should also note Grillo’s flirtation with the far-right Casa Pound outfits) – will have to suffice.
Italy remains, like Ireland, a stunned fish flopping about on the fishing-boat deck of European austerity: not really liking what’s going on, but not knowing what to do about it either.
“We did not have a movement comparable to the Spanish #indignados or to the #Occupy protests. We did not have anything comparable to the ‘Je lutte des classes’ struggle against reforms to the pension system,” write Wu Ming. “Our Tahrir Squares, our Puertas del Sol, our Syntagma Squares remained empty. In short, we did not fight back.”
The original post in Italian is here: