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Since the financial crisis of 2008, Europe’s ongoing debt problems have remained in the international spotlight. The story told by most analysts — and adopted by the mainstream press — is that excessive social spending triggered the debt crisis. But as citizens suffer from the deep cuts pushed through according to this logic, alternative press sources have been a crucial source of analysis and prescriptions that challenge this conventional wisdom. We have excerpted here six articles from print and electronic periodicals published in Europe and elsewhere, and collected in the Alternative Press Center’s library.
“The Single Currency That Was No Such Thing” (“Quand l’euro enfiévrait les rédactions”)
by Antoine Schwartz (Le Monde Diplomatique, January 2012, p. 5)
In this piece, Antoine Schwartz, author of L’Europe sociale n’aura pas lieu [There Will Be No Social Europe], surveys the brief, but devastating, history of the eurozone. The origins of the present Eurozone crisis were set in the context of economic relations between France and Germany in the 1980s. The Mitterand government proposed a single European currency, and Germany found this acceptable with the establishment of a structure enabling the free flow of capital. Thus, in 1998 the European Central Bank was born independent of governments, its mission to ensure price stability. In 1999 the euro became the single currency of 11 European countries. Have these changes furthered the development of a “Social Europe” or merely been a gift to investors? Schwartz observes:
The French government, adopting a position which it would once have called populist, wants a more significant intervention from the ECB in the purchase of public debt. The Bundesbank reckons it has already exceeded its remit in buying up part of the debts of euro countries in trouble, and still refuses, in spite of the crisis, to leave the ordoliberal [neoliberal] path. Where does that leave the euro?
by Trevor Evans (Red Pepper, March 2012, pgs. 15-17)
Trevor Evans here outlines a way out of the “highly authoritarian” EU response to the debt crisis, in which democratic control of countries over economic policy has essentially been suspended for countries like Greece and Portugal. Instead, he points to a set of proposals from EuroMemo, a group of alternative economists, that call for a coordinated European response:
The current situation is unsustainable. Peripheral countries are confronted with the prospect of prolonged austerity and mass unemployment. But for a small country like Greece to leave the euro area would expose it to massive economic disruption and lead to a further large fall in living standards.
EuroMemo argues for a coordinated European response. In place of the current German-dominated axis with France, there should be a strengthened European economic government that is subject to effective democratic control. This will require a significant strengthening of the role of the European Parliament. But it will also be important to develop support for progressive European policies among the citizens of the EU.
The Euromemorandum proposals have received support and been drawn on to a varying extent in different member states by unions, social movements including Attac, left parties including the German Die Linke and the Greek Synaspismos, and the left wing of some social democratic and green parties. The proposals should now be developed through a deepened interchange between progressive economists and movement activists and used to help build European-wide support for a fundamental change in the direction of EU policy. (17)
By the Editors (Critique: Journal of Socialist Theory, December 2011, pp. 479-88)
The editors of Critique Notes here reflect on the potential effects of proposed solutions to the Eurocrisis and the potential for greater militancy among the working class across the Eurozone.
No doubt the crisis will take on a series of forms, from its initial financial implosion, present day threat of sovereign default, and continued low growth. The present Eurocrisis is insoluble because it is a microcosm of the general crisis, which itself has no solution. However, its forms are specific. We have, in the first instance, the expression of German nationalism, representing the first time that the German bourgeoisie feels that it can shake off the heritage of the last World War and Nazism and express its interests directly and clearly. The clash between France and Germany, Sarkozy and Merkel, has been relatively low key but it is there nonetheless. However, the Germans have found that it is not easy. The less prosperous countries of the Eurozone are not prepared to accept German dictation of the economic terms of survival. There is no obvious reason, in any case, why the terms of trade between Germany and any particular country in the EU should be what they are. Why are agricultural goods relatively cheap compared with machinery or automobiles? Only believers in the market accept market prices as fair, just or somehow correct.
The commentators [in this issue] effectively argue that those countries whose industry is less developed should adopt a tight fiscal policy, given their need to import industrial goods from Germany. Such a policy cannot work under any circumstances. The only result, to be welcomed, will be the establishment of a uniform policy of economic repression sufficient to proletarianize the ‘middle class’ and drive the working class across the Eurozone to forms of direct action.
by Sathis Kouvelakis (New Left Review, November/December 2011)
Why has Greece proved to be the weakest link in the Eurozone? Writing in the November-December issue of New Left Review, Stathis Kouvelakis points out that neoliberal policies came later in Greece than elsewhere in Europe — not until the PASOK government of 1996 to 2004. As the Eurozone crisis escalated at the end of 2011, Greek Prime Minister George Papandreou had announced a referendum on the punitive terms of a loan agreed at the Eurozone summit. Papandreou resigned from the government after the leaders of Germany and France humiliated him at the G20 summit. Now Lucas Papademos, former vice-president of the European Central Bank, is at the head of a government of ‘national accord’ determined to implement austerity on Greek citizens.
Kouvelakis examines the historical context of post-dictatorship Greece, and the popular mobilizations that have arisen within the ruins created by the policies dictated by the European Commission, the European Central Bank, and the International Monetary Fund. He concludes that: By far the most probable scenario is a default. This now seems unavoidable, and will perhaps occur after the sixth austerity package has been implemented. The austerity measures themselves will trigger further waves of social unrest; here it is hard to predict what forms any upsurge will take, and what their political content will be.
by C.J. Polychroniou (New Politics, Winter 12, pgs. 49-56)
In this piece, Polychorniou describes the political corruption and impact of neoliberal policy that shapes the debt crisis in Greece and the European Union.
In this sense, greece’s sovereign debt crisis, which exploded in 2009 … may have been precipitated by the financial global crisis of September-October 2008, but it had long been in the making … In Greece, income tax rates were always very low, tax evasion massive, and Greek governments have run deficits since the early 1980s and produced a public debt which was consistently well over 100 percent of GDP…
Having said all this, we should not underplay at all the significance of the neoliberal global crisis, especially since Greece has been fully incorporated in the neoliberal framework of the European economy for nearly a decade now. Global neoliberal capitalism has plunged much of the advanced world in a crisis of unprecedented proportions and is causing misery and suffering for millions of people…” (51−52)
by Costas Lapavitsas (International Socialism, Winter 12. pgs. 55-63)
In an interview with Stefan Bornost, Costas Lapavitsas discusses economic crisis in the European Union, the role of Germany and the future of the euro.
Asked if German Chancellor Angela Merkel’s distinction between the banking crisis and the debt crisis — the former triggered by irresponsible bankers, the latter supposedly triggered by irresponsible spending — was a meaningful one, Lapavitsas replies:
No, it is not. This is one crisis. It began in 2007 in the US because of the real estate bubble caused by the speculations of bankers and other financiers. German bankers were also heavily involved in this process, buying subprime paper. When the bubble burst, a banking crisis emerged which led to a global recession. The recession led to unprecedented state intervention to rescue the banks and sustain demand. The soaring public debt in many countries in Europe is a direct consequences of state intervention in the years 2008-9 as economies moved into recession, not of spendthrift governments…The crisis of 2007-9 was never properly resolved either in Europe or elsewhere…” (55−56)
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