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Yanis Varoufakis’s fantasy politics

12 Sep

TCM contributing editor Lee Jones has a piece in Jacobin magazine critiquing Yanis Varoufakis and his DIEM 25 movement. You can read it here.

 

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Why Torture a Victim Whose Will Is Already Broken?

14 Jul

The draft of the agreement between the Greeks and the Eurogroup is out and, as everyone has noticed, it is not just an act of revenge, it is a piece of legislative torture. It contains old demands, like pension reductions and higher taxes to fund primary surpluses, as well as new demands, like reduction in the power of unions and a massive privatization of state assets using a separate fund controlled by Greece but monitored by the EU’s institutions. In fact the document asks for a massive legislative program touching on every aspect of Greek economic life – tax policy, product regulation, labor markets, state-owned assets, financial sector, shipping, budget surpluses, pensions, and so on. This legislation is demanded within the next few weeks. Such a package is the kind of thing one sees during or just after wartime, not as the product of democratically negotiated decisions. Let’s remember that the programme on which Tsipras and the Eurogroup agreed is something asked of a country that has already experienced a very severe depression, already implemented a number of constraints requested by creditors, has 25% unemployment and a banking crisis. What is the point of torturing a victim whose will is already broken? To destroy all opposition.

I think this should not be read as a proposal for restoring growth to Greece or even as the reflection of an economic blindness in Europe but as the reflux of the EU political project, of which the euro is the purest expression: the preference for technocratic domination over popular sovereignty. This program describes an architecture of rule, one that expresses utter indifference to the attempt by peoples to manage their affairs democratically, and one that demands enormous reserves of discretionary power for the Eurogroup. Note not just the scope of the Eurogroup’s demands but the molecular level of detail with which they lay out demands. For instance, as part of their package of “ambitious product market reforms,” they insist on changes in “Sunday trade, sales periods, pharmacy ownership, milk and bakeries, except over-the-counter pharmaceutical products, which will be implemented in a next step, as well as for the opening of macro-critical closed professions (e.g. ferry transportation).” Then there are the new demands, like “rigorous reviews and modernization of collective bargaining [and] industrial action,” which is Eurospeak for rubbing out labor rights. Other demands make it clear that these decisions are not only extensive and fine-grained, but designed as much as possible to remove responsibility and control from the Greek people and their government. The “scaled up privatisation programme” is to “be established in Greece and be managed by the Greek authorities under the supervision of the relevant European Institutions.” And the “quasi-automatic spending cuts in case of deviations from ambitious primary surplus targets” are “subject to prior approval of the [European] Institutions.”

Most telling of all, “The government needs to consult and agree with the Institutions on all draft legislation in relevant areas with adequate time before submitting it for public consultation or to Parliament.” That is to say, on every above named area of reform – from tax policy to labor markets – the government must consult first with its European managers. The piece-de-resistance, however, is that the Greeks are maximally accountable to the Eurogroup while the Eurogroup is minimally accountable and maximally arbitrary. Having listed its demands the document then says, “The above-listed commitments are minimum requirements to start the negotiations with the Greek authorities.” Later, the document says that an ESM programme is possible “Provided that all the necessary conditions contained in this document are fulfilled.” There is no guarantee the money is forthcoming. In other words, the Eurogroup retains maximum discretion to decide that Greece has failed to meet any of the impossible demands made upon it, while the Greeks possess no similar ability to hold the Europeans to account for their failures. Recall, for instance, that the agreement requires Greece to run budget surpluses that the Germans and French have never managed to achieve and that the ECB recently refused to extend sufficient emergency financing to the Greek banks, essentially engineering a near bank-failure in direct violation of its mandate to provide emergency liquidity to illiquid banks.

There are those who think that you can be pro-Euro and anti-austerity. As this round of negotiations show, the economics and politics of the euro are not separated like that. The Euro is a political project. It is unification without sovereignty. It is the delegation of national sovereignty to groups of finance ministers and supranational bodies whose main task is to suppress the re-appearance of the very source of their power. The political institutions and practices that have grown up around the euro and the EU are based on the belief that exercises of sovereignty are dangerous, irresponsible, and unaccountable. Although these institutions are in one sense nothing more than the product of agreements between nations, their raison d’etre is to prevent any further, outright expression of that sovereign power. That is why they insist on total subjection to their decisions, and why Greece became about more than Greece. The Greeks dared to assert popular sovereignty at the only level it is currently possible to do so. The bitter irony being that the discretion demanded by these post-sovereign entities is less accountable than when exercised as the outright power of a democratically elected government. And no less vindictive.

Alex Gourevitch

 

Syriza has not been radical enough

7 Jul

The Syriza-led government has been blamed for much of the current impasse between Greece and its creditors. It may not be responsible for the dire economic state of the country, commentators note, but it has done everything to make that situation worse. Accused of bringing Greece and possibly even the Eurozone to its knees all in the name of its radical Marxist doctrines, the problem of Syriza is in fact the opposite. Syriza has not been radical enough.

The dirty secret of the Greek crisis

A confusing aspect of the Greek crisis has been the extent of disagreement between Greece and its creditors. Commentators have regularly presented the Syriza-led government as a group of dangerous mavericks, led by a student radical and a celebrity academic-blogger. Impatience with what were considered unacceptable demands from the Greek negotiating team spilled out in recent weeks with Christine Lagarde in particular saying that Tsipras and his colleagues needed to ‘grow-up’ and act like adults rather than like truculent children.

This vision of an unbridgeable gulf between the radical demands of Syriza and the German-led austerian orthodoxy masks what is perhaps the dirty secret of the whole Greek crisis: the sheer moderation of the Greek government’s demands. Faced with such economic and social turmoil, the Greek response has been remarkably mild. The Greek demands include some consideration of debt relief, more flexibility on the implementation of structural reform programmes, a slight reorientation of budget cuts so as to hit less the poor and a bit more the well-off, and all this couched within a firm and heartfelt commitment to remain in the Eurozone. There is nothing radical here and as the recent report from the IMF suggests, it is almost conventional wisdom that some amount of debt relief will have to come at some point. We are thus faced with a complete breakdown in negotiations at a time when the actual gap between creditors and debtor is remarkably small. Syriza has been vilified for its extremism but the truth is that its position has not been nearly as radical as it should be.

Syriza’s utopian strategy

From the outset and including last Sunday’s referendum, the Syriza strategy has been based on a completely utopian premise: that the prime minister and finance minister can convert the rest of the Eurozone to a post-austerity economic programme where losses are written off and more breathing room is given to crisis-hit countries. This has been the Syriza wager: that it alone can convince the rest of the Eurozone to change course.

The difficulty is that on this point Syriza has missed the historical boat. Ever since the Maastricht Treaty, European integration has entered into a ‘new intergovernmental’ phase. Member states have moved forward with integration but have kept themselves at the heart of the process. Real and lasting delegations of power to supranational institutions has been kept to a minimum, with national governments preferring to beef up bodies such as the Eurogroup and the European Council. New agencies have been created instead of giving more powers to the European Commission. Even the current vice-President of the European Commission Frans Timmermans declared recently that “ever closer union” was dead. Syriza’s vision of debt mutualisation and hope for an ever closer and more politically integrated Eurozone has fallen on deaf ears. The future is lies in incremental change overseen by national governments.

The only real negotiating power Syriza has stems from the fact that whilst Eurozone membership has long had an existential quality for Greek citizens and the Greek political class, this is also true of other member states. They are also committed to keeping the Eurozone together as it appears to them as a condition of their own statehood. This is why the creditors keep coming back to the negotiating table even when they said they have had enough. There is real no alternative to the Euro for both Greece and the other members of the Eurozone.

Why is structural reform so difficult?

Part of the difficulty faced by the Greek government in its negotiations is that the implementation of structural reform amounts to a profound transformation of the Greek state. It is not laziness or hypocrisy that makes structural reform difficult in Greece.

The post-authoritarian Greek state was rebuilt along two lines. One involved a commitment to EC membership, with the EC serving as a guarantor of the modernity and economic development. Democratization in Greece was made conditional upon integration into EC institutions, as was the case in Spain and Portugal. The other was the ‘Pasokisation’ of the Greek political economy, where state-society ties passed through the dominant role of the Pasok party in redistributing public wealth.

This sort of clientelism survives today in the form of the government’s financial commitments to its public sector employees and pensioners. Reform of these sectors, as demanded by the Troika, amount to a profound restructuring of the social basis of the post-dictatorship Greek state. Hardly an easy task nor one that can be achieved through external monitoring by EU technocrats. The difficulty for Greece today is that the European dimension of its statehood no longer matches its domestic political economy. One of the two has to give.

The Left and self-determination

Syriza’s position has not been radical enough. It has tried to balance a commitment to Eurozone membership with an anti-austerity message. Far from being a strategic or even a tactical choice, this reflects a deep-seated ambivalence that takes us to a basic problem facing the European Left today: its position on national self-determination.

Over the last few decades, European social democracy has abandoned national sovereignty, preferring to throw its lot in with the European Union. This is what gave the recent referendum in Greece its terrible pathos. On the one hand, the ‘No’ was a powerful affirmation of a Greek desire to reject the terms of the agreement with its creditors. On the other, the ‘No’ lacked any real content as no-one was willing to contemplate exit from the Eurozone. The Greeks are left to celebrate their ‘No’ whilst their future remains out of their hands.

To seek ‘ever closer political union’, as thinkers like Jurgen Habermas do, is to pursue a dream that is even less likely to be realized today than ever before. It was often said that those who believe in national democracy are the fantasists and dreamers, the “small state nostalgists” as Habermas calls them. In fact, the real fantasists are those who think that a democratically organized supranational Europe can emerge out of an institution like the Eurogroup or the European Parliament. Compared to that fantasy, exit from the Eurozone appears a much more tangible option that Syriza should embrace instead of shy away from. They talk the talk of national sovereignty but do not follow it through.

Dismantle the Eurozone

The right response to the current crisis is to dismantle the Eurozone. As it stands, there is no way of reconciling national democracy with a continued commitment to Eurozone membership.

Ever since it was created, the common currency has served to sharpen the differences between national economies in Europe. Diverging rates of competitiveness were masked by easy access to credit, something which ended in 2009. We are left with a situation where national populations are expected to bear the full brunt of adjustment whilst governments have no freedom of manoeuvre in either monetary or fiscal policy.

These sorts of expectations about internal adjustment to wages and prices are what brought the Gold Standard to an end, precisely because it became incompatible with national democracy. Only the involution of national democracy and the abandonment by the Left of its belief in national self-determination has allowed the Eurozone to survive thus far. It should be dismantled in order that national populations across Europe have a greater control over their fate.

Chris Bickerton

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