Jacobin Magazine: Syriza’s Failure Has Hurt Us All

Added to this, a closer analysis shows that the Syriza electorate in 2019 in fact bears little relation with the voters who first put it in government in 2015. Admittedly, given the lack of any credible alternative on the Left (in the broadest sense) of the political spectrum, it has not collapsed entirely. That’s the big difference with what happened to Pasok in 2012, after its own implementation of austerity measures. [...]

In generational terms, it has lost nearly half its support among younger voters (17 to 24 year-olds) but has shed only 4 percent backing among the over 65s. From an electorate polarized around wage-earners and the youth, it is now a party with a nearly uniform average score among most social strata and age classes (around 20 percent) and is ahead of New Democracy only among the unemployed. The “qualitative” profile of its electorate has undergone an even more dramatic change. A look at the choice Syriza voters made among its candidates for the European Parliament is instructive in this regard. [...]

Syriza’s electorate today looks less like the popular base of a left-wing party than the “de-ideologized” clientelist support of a party of government. It is moreover obvious that it is in part the heir to the “social-liberal” Pasok of the 2000s. Syriza came first in just four constituencies nationally, and of these, three were among PASOK’s historic symbolic bastions: two in Crete and one in the northwestern Peloponnese, around the city of Patras, cradle of that party’s long-dominant Papandreou family.

read the article

openDemocracy: Lexit: The biggest unicorn of them all

But it would be a mistake to say that Godfather Hayek’s red-blooded neoliberalism has ever been implemented by the EU, as there are simply too many variables, or governments, to contend with. Think of the dirigiste tendencies of the French or the social-welfare commitments of the Scandinavians. A neoliberal utopia has simply never arrived.[...]

Monnet saw the proto-EU as a way for governments to pool sovereignty in limited ways, in specific sectors. This would then, it was believed, generate 'spillover' effects such as increased loyalty by elites. The Monnet-inspired Schuman Declaration of 1950, which first proposed the pooling of coal and steel production, was clear: “Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity.” Integration would lead national governments to lay down their arms in return for economic security. The national Barzinis and Corleones would finally be at peace.[...]

In contrast, ‘unreformable’ is the critique thrown at the EU by the left. But this doesn’t explain how Nigel Farage and other Brexiteers leveraged EU institutions to gain power and hoover up EU cash; it doesn’t explain why the far-right sees the European Parliament as a beach-head for reconstituting nationalist mafias – while getting paid for doing it. And it doesn’t explain why staunch EU critic Yanis Varoufakis is running for the EU parliament this year on a platform of radical change.[...]

Without a proper account of the EU’s complexity and origins, the Lexiter position tends to fall into a self-made abyss of misunderstanding. And without having the class power to back up its position, a Lexit – just like Brexit – may condemn the UK to perpetual autarky and possible disintegration.

read the article

Politico: Grazie Günther!

Instead of embracing the poll’s outcome, however, Tsipras fired Varoufakis. To keep the bailout funds flowing, Tsipras set about implementing everything the EU and other creditors had been demanding for months with the zeal of a convert. The reason? As tough as the bailout terms were, the alternative — default and ejection from the euro — was worse. [...]

Italians may opt to learn Greece’s lesson the hard way. If they do, there’s a good chance the euro won’t survive. Considering the difficulty Europe had coping with Greece, a country the fraction of Italy’s size, there’s little hope the common currency could withstand such a crisis.

The consequences of such a scenario would obviously be catastrophic, not least for Italy, whose savers would see the value of their assets decimated if the country reverts to the lira. Italy’s massive debt load, now at €2.4 trillion, would continue to balloon as its borrowing costs surged, assuming it could even find investors.

read the article

Social Europe: The Troubling Transformation Of The EU

However, there are two quite different ways of thinking about the Commission’s proposals. For Macron, they were part of a vision for a “Europe qui protege” in which there would be greater “solidarity” between citizens and member states. In the context of this vision, the new European Monetary Fund would be a kind of embryonic treasury for the eurozone. But many in Germany, including Wolfgang Schäuble, seem to support the same idea for entirely different reasons. They see it as a way to increase control over EU member states’ budgets and more strictly enforce the eurozone’s fiscal rules and thus increase European “competitiveness”. If that vision were to prevail, “more Europe” would mean “more Germany” – as many of the steps that have been taken in the last seven years since the euro crisis began have. [...]

It is as if the EU is in the process of being remade in the image of the IMF. It increasingly seems to be a vehicle for imposing market discipline on member states – something quite different from the project that the founding fathers had in mind and also quite different from how most “pro-Europeans” continue to imagine the EU. Indeed, it is striking that, in discussions about debt relief for crisis countries, the European Commission has often been even more unyielding than the IMF. As Luigi Zingales put it in July 2015: “If Europe is nothing but a bad version of the IMF, what is left of the European integration project?” The transformation of the ESM into a European Monetary Fund may be the final, logical step in this process of remaking the EU in the image of the IMF. [...]

In particular, Merkel clearly believes that, in order to be “competitive”, Europe needs to cut back on the generous welfare state for which it is known. She likes to say that Europe has 7 percent of the world’s population, 25 percent of its GDP and 50 percent of its social spending in order to suggest that “it cannot continue to be so generous.” This logic is behind the imposition of austerity on “crisis countries”. For example, former Greek Finance Minister Yannis Varoufakis says that, in their first meeting, Schäuble told him that “the ‘overgenerous’ European social model was no longer sustainable and had to be ditched” in order to make Europe “competitive”. This “competitive” Europe bears little resemblance to the one of the “pro-European” imagination with its emphasis on the “social market economy”.

read the article

The New York Review of Books: A Modern Greek Tragedy

If one asks European officials, the consensus is harsh: Varoufakis was a self-aggrandizing time waster who helped ruin the Greek economy before Tsipras got rid of him. The hard-edged intellectuals of Popular Unity agree that Varoufakis was as much a part of the problem as he was a part of the solution. They also agree that it was a mistake for Syriza to have haggled with the eurozone creditors. Their preferred option was for Syriza to have broken with the creditors from the beginning.2 A “rupture,” an exit from the eurozone, in January or February 2015 might have sustained the momentum of Syriza’s election victory. [...]

To understand Varoufakis’s motivations, we have to understand how he defines what was at stake in the battle between Greece and its creditors. For many on the left, the struggle was between the “forces of capital” and democracy. That made a good rallying cry. But it is far from the situation that Syriza actually confronted in 2015. Due to the 2012 debt write-down, when Syriza took power three years later only 15 percent of Greece’s debts were owed to banks, insurance funds, or hedge funds. Eighty-five percent were debts to official agencies and other European governments. The struggle was not with the capital markets but with official creditors and the other national governments assembled in the Eurogroup. [...]

By buying sovereign and private bonds, the ECB propped up their prices, pushed interest rates down, and flushed hundreds of billions in euro liquidity into the financial system. The primary aim was to stimulate the eurozone economy, but quantitative easing also had political ramifications. As long as the ECB kept buying their bonds, Spain, Italy, and Portugal were immune to contagion from the uncertainty surrounding Greece. Quantitative easing thus deprived Syriza of one of its chief bargaining weapons. Ironically, it was the ECB’s action—made in defiance of the conservatives in the Eurogroup—that freed those conservatives to lay siege to the left-wing government in Athens. They could force Greece to the brink of a disorderly Grexit without fear of destabilizing the rest of the eurozone and fight Greece’s political contagion without having to worry about the financial kind.

At the height of the crisis—between 2010 and 2012—there was indeed a spectacular confusion in the eurozone that might have been resolved by means of a grand bargain. But even then, the idea that the solution could have come from Greece was fanciful. In 2012, it took the combined weight of France, Italy, Spain, the European Central Bank, the European Commission, and the Obama administration to convince Germany to accept the ECB’s commitment to do “whatever it takes” to save the eurozone. What emerged in the aftermath of that crisis was neither a muddle—as Varoufakis suggests—nor a conspiracy. Europe’s political economy came to be dominated by the “reform” project first launched by Germany’s main political parties in the early 2000s, which centered on labor market liberalization and fiscal consolidation.

read the article

Social Europe: Why Greece Could Have Returned To Financial Markets Much Earlier

Those developments come into sharp contrast with the pursued objective of a nominal debt haircut in spring 2015 when then finance minister Yanis Varoufakis called for various changes in European monetary architecture through the issue of Eurobonds to resolve the Greek crisis. He sought a New Deal-type of solution via an international debt reduction conference reminiscent of the 1953 German arrangement of its post-war debt and perpetual bonds. All those proposals were rhetorical exercises because they shared the same fatal flaw, that is, they depended on the willingness of international lenders to concede favors without achieving any fiscal discipline on the part of the Greeks. Finally, Varoufakis and his team pushed for an unconventional double system of domestic payments with a shadow currency, contrary to ECB rules, which was massively risky for liquidity and would inevitably result in a Grexit and a return to drachma, while its possible implementation would have strained democracy in the country with unpredictable consequences. [...]

Diverting from this impassioned chapter in recent Greek history, we here highlight instead a policy lesson that was never discussed before: that back in 2015, the option of a return to international financial markets, which is now central to seizing political and economic gains, was wide open. However, blind with maximalist posturing and wasting time with vain plans, the Greek government failed to capitalize on this path because the blame was conveniently put on “others”, that is, on lenders.

In retrospect, the return to financial markets was the sensible approach to follow although it would have involved the adoption of structural adjustments dictated by the lenders. Was there an alternative path to liberate the country early on from lenders’ demands in return for their financial support lines? In my view, there was further room for maneuver through the issuance of structural adjustment-linked bonds based on policies determined by the Greek government alone.

read the article

Social Europe: No More Crises As Opportunities: An Answer To Yanis Varoufakis

The concept of crises engendering opportunities for the “rebirth” of Europe should have died with the Greek experience in the most dramatic phase of which Yanis Varoufakis took an active part. Having worked with former Prime Minister George Papandreou before embarking on his “radical Left” experiment, which nearly cost Greece its place in the Eurozone, Varoufakis should have learned that courting the abyss and generating crises is never a good way to change what needs to be changed. [...]

Varoufakis uses the Catalan crisis as a mere illustration for his favorite topic, which he espoused after he quit the Syriza government and denounced its policies: the reconfiguration of the European Union with “radical” changes like “fiscal autonomy”. He now has another radical idea: fostering regional governance (that’s where Catalonia comes in handy) and even creating a “Code of Conduct for secession”, facilitating regions all over Europe (why should one stop in Spain?) to become autonomous. This is presented as a progressive idea. In fact it is, to my eyes, both a misrepresentation of reality and a rallying call for nationalism, which, for all non-radical socialists, and a majority of democrats, constitutes the opposite of progressiveness.

The Catalan question flared up not on the basis of the economic situation in Spain but because of a combination of political mismanagement, or pure populism, by both sides of the conflict. The right-wing government of Mr. Rajoy challenged the special regime for Catalonia established under the socialist government of Mr. Zapatero, tolerated then disparaged a first referendum on independence, never treated the Catalan government as equal, constantly sought legal remedies to political and societal issues and opted for repression where it should have opted for dialogue. Still independence is at best a 50-50 option for the Catalan people and not an inescapable conclusion. On the other hand, the current Catalan government has been elected on an “independentist” agenda, but it overplayed its hand and misjudged both the Spanish environment (although it provides about 20% of Spanish output, Catalonia is only one of 17 regions) and the European drive for unity and integration. [...]

“Regionalization” is not the answer, nor do we need a crisis as dramatic as Catalonia’s to understand this. Regionalism is already a part of the European project – Varoufakis gets the relationship between Spain’s central government and Catalonia’s regional government or Barcelona’s City Hall completely wrong and of course there could be no such thing as a “secession (of rich regions like Veneto or Catalonia) with an obligation to maintain fiscal transfers” (to the poorer regions), since the main reason for secession would be to stop paying for others. From both a political and a legal point of view it is obvious that the EU framework allows for many types of regional settlement (ranging from advanced autonomy to federalism) other than separatism. The non-negotiable and unilateral “secession” of Catalonia evokes the populist themes of Brexit much more than the nuances of a regionalist settlement.

read the article 

Jacobin Magazine: Closed Rooms and Class War

He presents himself as both insider and outsider to this world. As if sketching a scene for a film script, he recounts a meeting with Larry Summers in a Washington bar, where Summers tells him that he must decide which he is going to be: an insider or outsider. It is clear that Varoufakis glories in being one of them, while still wanting us to believe that he is simultaneously on our side. He speaks of how great it was to have the support of Larry Summers, Norman Lamont, and other figures on the Right, but it was support for whom, for what, and in whose class interests? Class analysis is far from the foreground of the picture sketched out here. [...]

However, Varoufakis’s book conceals as much as it reveals. Most importantly, it does not clearly conceptualize the sociohistorical forces at play, both because of an overbearing egocentrism and a lack of systemic analysis. Capitalism disappears in the play of elite personalities, primarily his own. [...]

Varoufakis constantly uses phrases like “my solitary struggle” and tells the story in a way in which everyone else’s role is blurred, distorted, or even invisible. Syriza barely exists. The Greek Left are nearly absent. The Greek people fade into the background. It is a landscape of elite players and anonymous masses. [...]

He declares early on that there are “no goodies or baddies in this book,” but only people doing their best, as they understood it, in circumstances not of their choosing. This is not, however, how he writes it. He characterises some players as goodies, primarily himself and his band of star foreign economists, and others as baddies, although he is kinder to the troika than to certain figures in Syriza, whom he accuses of treachery. His preference for figures of the Right, such as Norman Lamont and Jeffrey Sachs, over the Left, in addition to his conceptualisation of many matters, make me wonder if he even understands the difference between right and left.

read the article