I woke up this morning thinking about the type of people who are thrown up by our political systems and put before us for election. I have spent the last few days mulling over the surge of support for Jeremy Corbyn’s leadership bid and that alone would have given me reason enough to put this rant down on paper. But the actual spark came from a member of that monument to democracy, the Bush dynasty.
The mantle of political entitlement has now passed to Jeb and he picks up where his celebrated brother left off by completely misunderstanding the world around him. This week he made a few headlines with his outrage at Obama’s plan to extend overtime coverage to managers earning below $50,440 per year (essentially reducing the possibility of lower salaried workers being forced to work additional hours for no extra pay). Jeb was stunned by this frivolity and, on top of claiming that Americans need to work more hours, not less, he showed his finely tuned economic skills by telling us that this new rule would result in less overtime pay and less wages earned. Sensible members of the human race (and a few economists) were quick to point out the many flaws in this reasoning. First of all, by curbing the exploitation of some managers, employers would be forced to use more workers and/or additional overtime to pay to cover the same workload. The argument that companies would cut salaries to compensate for this new rule is just not credible.
There are times when political discussion can based purely on ideology and principles, and there are times when it can’t. So while the Greek bailout is being debated in the German parliament and endlessly analysed elsewhere, I thought I would have a quick recap on the human costs of Greek austerity.
Healthcare is an obvious place to start and the stats are damning. According to CNN
, “the country’s health care system is on the brink of collapse. Government health spending fell 25% between 2009 and 2012, after the country’s 2010 bailout package capped such spending.
Spending on drugs dropped by 32% since 2010. And the country owes international drug makers 1.1 billion euros ($1.2 billion), according to the European Federation of Pharmaceutical Industries and Associations.
Evangelisimos is the biggest hospital in Greece. With 1,000 beds, it is constantly running 10% to 20% over capacity. “There is just too many patients and not enough rooms,” trainee nurse Anastasia Karkasina said. Karkasina is three months away from becoming fully qualified. She is worried about getting a job.
“There are no available positions, because there is no money to pay for them,” she said while taking a short break with fellow trainee Anna Karafoti in the sizzling heat outside the hospital. If the two manage to get jobs, they can expect monthly salaries of about 700 euros ($780).”
A public health tragedy is surely looming, with under-staffed hospitals running at over-capacity.
A few days ago I found myself watching a TED talk by the Nigerian author, Chimamanda Ngozi Adichie. Adichie is as engaging a speaker as she is a writer and she took to the TED stage to discuss what she calls the notion of a ‘single story’. The idea is a simple one: a single story is created by showing a nation (or continent) and its people as one thing, and only one thing, over and over again until that is what people believe them to be. To illustrate the point, Adichie uses an example close to her heart, that of the poor, sick and war ravaged Africa, crying out for the help of the benevolent white man; a narrative that treats Africans as unfit to control their own destinies. She also points to the stereotype of the lazy Mexican immigrant, any US Republican voter’s worst nightmare. In both cases, the story is blind to the realities of the individuals and communities tarnished by this lazy stereotyping. But within this critique lies the purpose of this single story. Whoever writes the past can control the present, and whoever illustrates the characters can also define the plot. The single story of the Mexican immigrant may be a depressing generalisation but it is also a powerful weapon for the American far right.
As events unfolded in the seemingly never ending Greek ‘crisis’ over the last few days I kept coming back to this idea of the single story. Since the crisis began we have been constantly told that the bloated Greek public sector must pay the price for years of mismanagement; that the Greek people must stop shirking blame and face the full consequences of living beyond their means; that the Greek government must not expect something for nothing from its friends and partners at the eurozone negotiating table; and, most importantly, that the responsibility for the entire mess lies in Athens. While a quick glance on social media sites will of course show that many people have seen beyond this myopic version of events, it is still the voice of the mainstream media that holds influence in the majority of countries. Controlling the narrative is the key to political success.
“Orderly debt restructuring has been done hundreds of times, hundreds, like with Germany in 1953”.
As the leader of Podemos has rightly pointed out on many occasions, sovereign debt restructuring is nothing new. Why, we may ask, should post-war Germany be helped to meet its financial commitments and rebuild its shattered economies, but Greece and other southern European states should not? Well, the standard narrative on the right is that after an initial helping hand, German productivity and fiscal acumen allowed it to become a regional manufacturing powerhouse. After West Germany had sufficiently re-established itself as a responsible and affluent member of the international community, it was then helped to reunite with its crumbling, post-communist sibling. The beauty of this simplistic version of events is that it is essentially a story of redemption and triumph over adversity, and so lends moral weight to Germany’s central role in contemporary European affairs. It does not, however, hold up to scrutiny of the facts. It was Germany’s central position in the cold war, as well as its divisive position in post-war Europe that made the USA aggressively promote it as a new capitalist powerhouse on the continent. By promoting the European Coal and Steel Community (the precursor to the modern EU) with German participation, the USA embarked on a project to strengthen the Deutschmark as an additional pillar of capitalist strength, and work towards the creation of a vast trading block. Nowhere is the commitment to rebuilding the German economy clearer than in the details of the 1953 debt restructuring, where debt repayment was tied to export revenue. Creditor nations therefore had a vested interest in buying German exports, thus allowing the indebted nation to repay its debts and become ultra-competitive on the global scene.
But in the 62 years that have passed since, the rules of the game have changed beyond recognition. The European project has boomed into a vast bureaucracy overseeing a continental marketplace. With the advent of the single currency at the beginning of the century, the Eurozone members committed themselves to the observance of strict financial rules in exchange for the so-called stability of a single unit of currency designed to reduce transaction costs and promote financial security within the bloc. It is now widely known that countries, including Greece, failed miserably to meet the requirements of euro entry but were admitted anyway through a combination of financial fraud and European bonhomie. Although this may look like a tragic mistake in hindsight, it was crucial to the project that the southern European countries join the single currency in an irreversible manner. As soon as Greece, Italy and Spain were locked into a currency position which did not allow for default, they had sacrificed their only effective means of making their economies more competitive in the face of German exports (which, as I previously discussed here, are made so competitive by breaking Eurozone rules). In short, they were therefore doomed to run current account deficits vis-à-vis Germany ad infinitum. But to make matters even worse, the lack of mechanism for fiscal transfer within the Eurozone (with the original rules explicitly removing this possibility) meant that there has never been any way for the German surplus to be recycled within the union in the interest of stability and balanced growth. The single currency has been deeply flawed from the start.
The post-2008 political landscape in Europe has been littered with public discontent and protest. In Spain and Greece this has manifested itself in revolt against the European establishment and a refusal to be bound by the financial practices of the past. In England, immigration has raced to the forefront of the political agenda, while in Scotland and Catalunya nationalism has come to the fore in a way that would have been unimaginable only a few years ago. In France the National Front has eroded support for the rightwing UMP while simultaneously appealing to much of the working class. Even Germany has not been immune to an element of political unrest.
Although the principles underlying these movements may differ greatly, it would be foolish not to wonder if there is a common denominator running through European protest. If history has taught us anything it is that the lines separating socialist uprisings from fascist popularity are not as clear as we may like to think. Political movements often thrive on the charisma of their leaders and their ability to build a narrative that chimes with the misery or discontent of the public. In Germany’s broken socioeconomic structure of the 1920’s it could easily have been the communists who came to power on a wave of popular support instead of the National Socialists. But the Nazis were more adept at political maneuvering and public manipulation. One of the many lessons available from this episode however is that most individuals are not remotely concerned with political ideology. Instead they back parties that offer the best guarantee of personal and collective security. This security can and does take many shapes, but it is the desire to protect one’s self and one’s security that is at the core of electoral and public decision-making. But electoral decisions are also often made with rejection in mind – rejection of the incumbent political force and policies. Under these circumstances, a clear and workable alternative vision matters less, since the public desire to oust those who have led them into darker times will often be sufficient to create political change. This is the predominant theme in modern politics and since voters are often hard pressed to identify the core differences between candidates, a vote for one is largely just a rejection of the other.
But the current wave of demonstrations across Europe is about something greater than electoral choice, it represents a rejection of modern politics. The SNP, UKIP and the Catalan nationalists may promote very different ideals but all try to tap into the disenchantment of voters in the face of globalised, neoliberal politics administered from a distant centre of power. All seek to recapture a real or imaginary notion of local identity from the clutches of external bureaucratic institutions. All offer a vision of the future which appeals to those who want a greater say in shaping their local culture and society. As citizens feel increasingly distant from the centre of power they strive to have a greater say in organising their communities in a way which is consistent with their own beliefs and identity rather than those of policymakers in London, Madrid or Brussels.
‘”We cannot negotiate with those who say ‘What’s mine is mine and what’s yours is negotiable’”.
John F. Kennedy
So after all the negotiation, tension and gamesmanship of the past few weeks Greece is essentially back to where it started. Have no doubt about it, the announcement that Syriza has agreed to a four month extension of the existing bailout programme is a defeat for the new Greek government. As predicted on this blog over the last couple of weeks, it was always likely that a short-term deal would be found which could keep Greece in the game and offer some breathing space for all sides to work out a long-term deal. This is not the bridging loan envisaged by Varoufakis in his opening Eurogroup discussion but it does at least offer the much needed finance and some element of budgetary freedom. But it does so at the expense of maintaining the crushing austerity measures which were at the heart of Syriza’s electoral campaign. It is hard to see how Syriza can dress this up as anything but a defeat and as Varoufakis’ erstwhile nemesis, Wolfgang Schäuble (maybe he should be renamed Wolgang Schadenfreude) has delighted in pointing out, this deal will be hard to sell to the Greek people.
But if the popular press is to be believed, the Greeks have not reacted badly to this austerity extension. Perhaps political pragmatism has come to the fore with recognition that this was the best deal on offer. However, Syriza has until tomorrow to present its creditors with a list of reforms that will accompany the finance extension. The devil, as always, will be in the detail and Tspiras and Varoufakis will be hard pressed to word this in a way which maintains their commitment to shaking off the shackles of austerity.
It seems incredible that Syriza has only been in power for a few weeks. But more incredible is the extent to which they have bent to the will of the troika and the Eurogroup in the face of inflexibility from their negotiating partners. Talk of 50% debt haircuts was watered down into growth-linked bonds before finally morphing into what looks like a continuation of the current programme. This is not only a defeat for the democratic will of the Greek people, who had firmly rejected the current austerity measures, but it is a reinforcement of the financial straight-jacket which has been at the root of Greece’s humanitarian crisis. Syriza may have secured additional short-term funds but much of this will be returned to its creditors in the form of debt and interest repayment. Very little (if any) will find its way to the Greek people, who must continue to suffer so that financial principles can be upheld.
As I watched Dutch Finance Minister, Jeroen Dijsselbloem, brief the press core on the collapse of yesterday’s Eurogroup meeting, Trotsky’s acerbic put-down of Tsar Nicholas II came to mind: “It seemed as though between his consciousness and his epoch there stood some transparent but absolutely impenetrable medium.”
The stance of the European Finance Ministers in recent days has been close to financial fanaticism. Tied together by a currency union designed to play by German rules of fiscal austerity, the Eurozone countries have all toed the official-line since the election of Syriza in January: The terms of financial bailout enforced by the Troika are non-negotiable. Yes, the Dutch Finance Minister claimed that there is some flexibility in the current programme, but only if it continues to be implemented on the Greek side. As is now being openly discussed in the corridors of Brussels, Greece has long since lost its financial autonomy.
But can this really be the end of the road? This week looks likely to offer a definitive answer to this question and it is hard to see what could unblock negotiations. As I have said over recent weeks, Syriza cannot concede much more from its side of the table. Its extraordinary election success was built on a backlash against austerity and Troika policy. To go back on their electoral promises and swallow whole the medicine being forced upon them by the creditors would be a crushing defeat for national democracy and one which would surely blow Greek politics (and society) apart.