Theory & Event

1. This is only the beginning of the crisis

Within one single month, we have witnessed Prime Minister Papandreou’s revelation of the “real” Greek debt, which had been manipulated by his predecessor with the help of Goldman and Sachs; the announcement of his country’s inability to repay hugely increased credit interests; an expansive European rescue loan offered to him on the condition of devastating budget cuts; all this soon followed by the “downgraded rating” of the Portuguese and Spanish debts, a threat on the value and the very existence of the Euro, the creation (under strong US pressure) of a European security fund worth €750 billion, the Central European Bank’s decision (against its rules) to redeem sovereign debts, and the announcement of budget austerity measures in several member states. Clearly, this is only the beginning. These latest episodes of a crisis which started two years ago with the collapse of the US housing market foreshadowed others. These episodes show that there is more than ever a risk of financial crash, provoked by the huge amount of rotten securities which have been accumulated over the last decade through the combination of unwarranted loans and the transformation of credit default swaps and other insurances into financial products. “Black Peter,” the sum total of unrecoverable debts, is running around fast, like the bad card in the game, and the States can’t catch up. Short term speculation is now targeting the currencies and the public debts. But the Euro is the weak link in the chain, and so, therefore, is Europe itself. There can be little doubt that catastrophic consequences are coming.

2. The Greek protest: rightly so!

A first, immediate effect of the “remedy” applied to the Greek crisis was the angry protest of the Greek population. It is debated whether this should be seen as a cowardly denial of the population’s responsibility or a normal rejection of an unjust collective punishment. Leaving aside the criminal elements that have interfered, it seems to me that the Greek protest was fully justified, for at least three reasons. First, we have been witnessing a completely insane denunciation of the whole Greek people: the corruption and the lies of the politicians (whose beneficiaries, as everywhere, are essentially the rich, cultivating tax evasion on a grand scale) were blamed on the people as such, indiscriminately. Second, once again (and this time probably was once too much), the government has betrayed its electoral promises, without any form of democratic debate. Lastly, Europe did not display any real solidarity towards one of its member-states, but imposed on it the coercive rules of the IMF, which protect not the nations, but the banks, and promise deep and endless recession. Most serious economists agree that this will lead even more inevitably to a default of the Greek Treasury, and will spread the crisis, raising the already high rates of unemployment, especially if the same rules are imposed on other countries whose “rating” on the financial market can be downgraded at any moment—exactly what the “orthodox” party is asking for.

3. Politics hiding its name

The Greeks were the first victims, but they will hardly be the last, of a politics of “rescuing the European currency” whose strategic dispositions (mainly imposed by Germany) are, first and foremost, a general restriction of public expenses (admittedly, the Constitutional Treaty involved a rule of maximum budget deficit, but this was never enforced...), and in addition a (rather mild) control of speculation and the free movements of hedge funds and traders, already announced after the crisis of the subprime mortgage bond market and the actual or virtual crash of the US banks in 2008. To this, neo-Keynesian economists add another request: that of moving towards the creation of a European economic government (especially through the unification of tax policies), possibly also correlating and enhancing industrial investments. For want of such measures, they claim, a single European currency will prove unsustainable.

None of these are purely technical: but they are entirely political measures, which all citizens ought to be allowed to debate, because all of them will be affected by the outcome. However, to the extent that it exists, the discussion is deeply biased, because essential determinations are hidden or dismissed:

• • Any policy of defending or devaluing a currency at the conjuncture of crisis leads to a radical alternative: either it subjects economic and social decisions to the power of the financial market (including its “rating” criteria, working as self-fulfilling prophecies, and its allegedly absolute “judgments”), or it adds to the capacity of the State (and more generally of the public institutions) to limit the market’s instability and grant long term economic interests a primacy over short term speculation. It cannot be both!

• • In its current form, under the influence of the dominant social forces, the European construction may have produced some degree of institutional harmonization, and generalized some fundamental rights, which is not negligible, but, contrary to the stated goals, it has not produced a convergent evolution of national economies, a zone of shared prosperity—far from it. Some countries are dominant; others are dominated, with respect to shares in the markets, or concentration of financial capital, or industrial dependency. The peoples may not have antagonistic interests, but the nations increasingly do.

• • Any “Keynesian” strategy to generate public “trust” in the economy rests on three interdependent pillars: a stable currency, a rational system of taxes, and also a social policy, aiming at full employment and increasing the popular consumption to sustain the demand. This third aspect is systematically ignored in most current commentaries, obviously not by chance.

4. Globalization’s real trends

All this debate concerning the Euro monetary system (which, let us not forget, some important European countries refused to join, including the UK, Sweden, and Poland) and the future of Europe will remain entirely abstract unless it is articulated to the real trends of globalization: precisely those trends which the financial crisis will powerfully accelerate, unless they are politically addressed by the peoples which they affect and their leaders. How can we summarize them? First, we are witnessing a transition from one form of international competition to another: no longer (mainly) a competition among productive capitals, but a competition among national territories, which use tax exemptions and pressure on the wages of labour to attract more floating capital than their neighbours. Now, clearly, whether Europe works as an effective system of solidarity among its members to protect them from “systemic risks,” or (pushed by States who are momentarily more powerful, and their public opinions) simply sets a juridical framework to promote a greater degree of competition among them and their citizens, this will determine the future of Europe politically, socially, and culturally. But there is a second tendency: a transformation of the international division of labour, which radically destabilizes the distribution of employment in the world. This is a new global structure where North and South, East and West, are now exchanging their places. For Europe, or most of it, it will automatically entail a brutal increase of inequalities: a collapsing of the middle classes, a shrinking of skilled jobs, a displacement of “volatile” productive industries, a regression of welfare and social rights, a destruction of cultural industries and general public services. This is why resistances against supranational political integration that purport to protect the sovereignty of the States will, in fact, weaken the defences of each nation. These resistances will also precipitate a return to ethnic conflicts, which the European construction wanted to overcome forever. However, it is also clear that a greater political integration of Europe cannot be created “from above,” by a bureaucratic decision. It requires democratic participation and advances in each country and the continent as such.

5. Populism: a peril or a resource?

We cannot, accordingly, but ask the question: is this the beginning of the end for the EU, a construction that had started 50 years ago on the basis of an age-old utopia, but now proves unable to fulfil its promises? The answer, unfortunately, is yes: sooner or later, this will be inevitable, and possibly not without some violent turmoil. Unless it finds the capacity to start again on radically new bases, Europe is a dead political project. But the breaking of the EU would inevitably abandon its peoples to the hazards of globalization, to an even greater degree. They would be little else than carcasses floating along the stream of a river. Conversely, a new foundation for Europe does not guarantee any success, but at least it would give her a chance of gaining some geopolitical leverage, to her own benefit and to the benefit of others. With one condition, however: that all the challenges involved in the idea of an original form of post-national federation are seriously and courageously met. And they are huge: setting up a common public authority, which is neither a State nor a simple “governance” of politicians and experts; securing genuine equality among the nations, thus fighting against reactionary nationalisms, whether on the side of the “strong” or the side of the “weak”; and above all reviving democracy in the European space, thus resisting the current processes of “de-democratization” or “statism without a State,” produced by neo-liberalism, and the colonization of its administrations by a bureaucratic caste, which is also largely the source of the corruption in the public markets.

Something obvious should have been acknowledged long ago: there will be no progress towards federalism in Europe (the one that is now advocated by some, and rightly so) if democracy itself does not progress beyond the existing forms, allowing an increased influence for the people(s) in the supranational institutions. Does this mean that, in order to reverse the course of recent history, to shake off the lethargy of a decaying political construction, we need something like a European populism, a simultaneous movement or a peaceful insurrection of popular masses who will be voicing their anger as victims of the crisis against its authors and beneficiaries, and calling for a control “from below” over the secret bargainings and occult deals made by markets, banks, and States? Yes, indeed. There is in fact no other name for a becoming-political of the people. I agree that it can lead to other catastrophes, which is why we need strong constitutional rules to be observed, and, above all, political forces to emerge again in the European arena, who will introduce a culture of uncompromising democratic ideals into this “post-national” populism. But the risk is greater if nationalism prevails in whichever form.

6. European Left? Where is it?

In this part of the world, such forces were traditionally called “the left.” But the European Left also is now bankrupt, nationally and internationally. In the broader political space, stretching across borders that is now relevant, it has lost every capacity to express social struggles or launch emancipatory movements. The European Left has surrendered to the dogmas and rationales of neo-liberalism. Consequently, it has been ideologically disintegrated. Deprived of any strong popular support, those parties that represent it nominally are now powerless spectators and commentators on the crisis, for which they offer no specific and collective response. They have remained passive after the financial shock in 2008, still passive when the IMF recipes (which in other times, on other continents, they had vigorously criticized) were imposed on Greece, passive again when it was proposed to “rescue the Euro” at the expense of wage labourers and ordinary consumers. And they proved unable to launch a public debate on the possibility and the means of a Europe of solidarity.

We may well wonder, in these conditions, what is going to happen when the crisis enters its next phases? When national policies, increasingly repressive, lose their social contents, or their remaining social alibis? There will be protest movements, almost certainly, but they will find themselves isolated; possibly they will become deviated towards violence, or recuperated by racism and xenophobia (which are already surging all around us). In the end protest movements will produce more powerlessness, more despair. This is tragic, since the capitalist and nationalist Right itself, now on the offensive, is also strategically divided: it was clear when stopping public deficits was pitted against investment policies, and it will be even more the case when the very existence of common European institutions is at stake (British evolution being a good indicator of what looms ahead). There was here an occasion to seize—a strong word to say. But the question also concerns the intellectuals: what should and could be a democratically elaborated political action against the crisis at the European level, walking on both legs (economic administration, social policy), eliminating corruption and reducing the inequalities which foster it, restructuring debts and defining common objectives in order to legitimize transfers of tax resources between mutually interdependent nations? It is the task of progressive intellectuals, whether they see themselves as reformists or revolutionaries, to discuss publicly this subject and take risks. If they fail to do so, they will have no excuse.