it. To put it differently, the pre-existing divergence between the euro-periphery and the core started now looking like an abyss.
Despite its low growth rates in the early years of the new millennium, and the 2009 downturn, the German economy proved resilient, whereas the PIGS plunged into continuous recession, with Greece once again the ‘weak link’ of European capitalism, experiencing a 1930s-type Great Depression. But this pattern is not the outcome of the blind interplay of pure economic forces. Every step of this descent into the depths has been mediated by the entire set of EU institutions, with the IMF playing only a secondary, and relatively lenient, role. With the transformation of the banking crisis into a sovereign debt crisis, the nightmare took hold in the peripheral states. Every EU summit, every round of negotiation between debtors and creditors led to a long series of ‘bailouts’ accompanied by draconian ‘memoranda’, endless austerity packages and ‘shock therapies’ fully conforming to the standard IMF models previously applied to the South, with entire countries placed under regimes of ‘limited sovereignty’. The crisis of the eurozone opened the way for ‘disaster capitalism’ moving now westwards, to the edges of the Old Continent which has become a laboratory of policies which will eventually be implemented, if only in a modified and possibly softer ways, elsewhere.
It is only now that the full power of that blend of hybrid supranational, but still interstate, authoritarianism and of institutionally embedded neoliberalism, which constitutes the DNA of the EU, can be fully apprehended and understood. And this process could not leave the ideological realm untouched. The dark side of Europeanism has now come to the surface: blaming the losers, the ‘lazy’ and ‘profligate’ southerners, has now become the conventional wisdom of the mainstream media and politicians. It is crucial however to stress here that the revival of these racist stereotypes should not be understood as a return to the past, even if it draws heavily from an old Orientalist stockpile. This intra-European neo-racism is rather the purest outcome of the newly polarised reality created by the internal logic of so-called ‘European integration’, the realities of which were already quite familiar to the inhabitants of the European Mezzogiorno constituted by the former Eastern Bloc countries.
The reader will find in the following pages a clinical step-by-step analysis of this process, fully confirming the scenarios presented in the first RMF report (March 2010) on the effects of the austerity policies. She will also find an uncompromising critique of the illusions created by all the supposedly ‘left’ variants of Europeanist ideology, which converge in their disregard of the real mechanisms operating within the EMU and its institutional framework. On paper, of course, it is perfectly possible to show that a single unified European entity, undertaking full fiscal and monetary responsibilities, could easily tackle issues such as the Greek sovereign debt. A European Central Bank with the backing of a proper state apparatus could rescue the European banks and manage the losses. But this amounts to pretending that, by virtue of some fiat, the existing reality could be changed magically into its very opposite. In other words it amounts to the type of wishful thinking which has paralysed the entire European Left, even those currents which refused to compromise with neoliberalism and fought, sometimes with success (like in the 2005 French referendum), against certain aspects of the European project. Such an outlook has prevented the Left from realising that the more ‘European’ each ‘solution’ or ‘strategy’ was, the more it was synonymous with radicalised neoliberalism and anti-democratic regression.
Apart from leading to political impotence, this perspective has also proved to be a kind of ‘epistemological obstacle’ to the analysis of the recent crisis, and more specifically to an understanding of the manner in which the general systemic trends (such as the instability created by financialisation, the issues of profitability and the pressures on labour) are mediated by political actors, by states or alliances between groups of states of uneven economic and political weight acting within a hybrid supranational framework such as the EU. In this sense, the euro should be understood not only as a ferocious class mechanism for disciplining labour costs – starting with the wages of German workers, which remained flat during the whole first decade of the new century – but also as a means through which the hegemony of German capital is forged and imposed on the European and, more broadly, the international stage. This is why every political agenda which claims to be serious in its objective of breaking with neoliberalism, even within an overall ‘reformist’ or ‘gradualist’ perspective, must pose the question of breaking with the euro and confronting the EU as such.
This brings us to the final but probably also most crucial point of the material collected in this volume: not satisfied with providing a pioneering analysis of the specificities of the capitalist crisis within the eurozone, Lapavitsas and his RMF collaborators went one step further, providing us with the outline of an alternative strategy. This outline starts with the proposal of default on the sovereign debt – a matter of sheer survival for the countries of the periphery, starting of course with Greece – and extends to exiting unilaterally from the euro for the countries which need to default, allowing them to regain control of a part of their national sovereignty and to escape from the cataclysm of internal devaluation imposed by EU-designed shock therapies. These measures, of course, need to be supplemented by a set of others, such as the nationalisation under genuine public control of the banking system, the control of capital flows and income redistribution, including a reform of the tax system which would counter years of neoliberal tax-alleviation in favour of the wealthy and corporate power. This proposal for an alternative path immediately sparked controversy, starting in Greece, but gradually shaped the entire agenda of the debate within the Left but also beyond it.
Some found these ideas absurdly radical, others saw them as too modest and moderate. They were criticised for being ‘nationalist’ or ‘utopian’, ‘reformist’ or ‘adventurist’. One needs, at the very least, to acknowledge that they mark a sharp break with the entirety of the aforementioned deeply rooted tradition of Europeanist wishful thinking, with its belief that this meticulously built neoliberal authoritarian fortress could be amended and transformed from within. Let us note that the method followed here by Lapavitsas and his colleagues is faithful to what a certain tradition of the workers’ movement has called ‘transitional demands’.
What is meant by this? Neither the ‘maximum’ nor the ‘minimum’ programme, neither the cry for utopian ‘impossibility’ nor the management of the existing order of things, but a cohesive set of concrete demands strategically designed to hit the adversary in the heart, where the contradictions of the situation tend to concentrate, in order to create the necessary lever to change the overall balance of forces. Questions such as the default on sovereign debt, the dismantlement of the EMU and confrontation with the authoritarian fuite en avant of the EU are the contemporary equivalent of the demands of peace, bread, land and popular self-government on which depended the outcome of the first assault on Heaven of the twentieth century. Urgently posed as issues of immediate relevance where the current crisis has hit the hardest – that is, in the europeriphery and more particularly in Greece – they are central to the strategic debate of the Left in the Old Continent as a whole.
At a time where any type of strategic thinking has become increasingly rare, and even more so on the Left, and where the crisis of capitalism seems to inspire perplexity and embarrassment amongst what remains of its organised adversaries rather than new energy to wage further battles, the work undertaken in the volume at hand needs to be recognised in its proper measure: a major intellectual achievement combining rigorous and innovative scholarship with lucid but also radical political commitment.
Stathis Kouvelakis
GLOSSARY
BIS: Bank of International Settlements
BoG: Bank of Greece
CAC: Collective Action Clauses
CB: Central Bank
CDO: Collateralised Debt Obligation
EBA:
