It was no accident that the first tremors of the earthquake to come originated not in the us but in the eu, with the crisis of bnp Paribas and collapse of Northern Rock in August–September 2007. Entanglement with America to the west; predation in Europe itself to the east, where Tooze shows the extent of the financial appropriation of local assets in the former Communist countries by Dutch, Austrian and Scandinavian capital. Nor, of course, has he anything but scorn for the role of the ecb and the turn to austerity once the crisis broke.
There, in one of the many gripping set-pieces of the book, Tooze delivers a damning verdict on the treatment of Greece by the Commission, the ecb and the imf, and subsequently the European Council, which presided over its fate from 2010 onwards. The crushing of Syriza’s attempt to negotiate less draconian terms for its society and economy is not only vividly portrayed, but set in the wider context of the thwarting of governments of the left in these years by the external imposition of ‘political and financial discipline’ on them. No one could doubt on which side Tooze’s sympathies lie in this exercise of brute power. But just where did this discipline come from, and how far did it extend? At this crux, his account takes leave of absence. At its centre lies the nature of the European Union, and the position of Germany within it. Evasive on the first and inconsistent on the second, Crashed offers no coherent account of the relationship between them, for it is too protective of each.
Decisive in this regard is the book’s abstraction of the decisions taken by policy-makers from the structures in which they were working. What was the matrix of the monetary union created at Maastricht?--Perry Anderson (2019) "Situationism a la Envers," in New Left Review (119), p. 80.
Prompted, apparently, by a review (by Cedric Durand) of Tooze's Crashed: How a Decade of Financial Crises Changed the World, Perry Anderson's widely circulated essay, which ranges widely over Tooze's oeuvre and twentieth century politics, is a stinging rebuke of the "complacency" and brutality of "left liberalism" (a term also used by Tooze to describe himself) or "centrist liberalism" (a term used by Anderson (85)). My interest here is not in defending left liberalism; much of Anderson's (and Tooze's) criticism of it is spot on.
Rather, my interest is in the claim that "governments of the left" within the EU have been thwarted by "external imposition of 'political and financial discipline' on them" by the EU. This claim fits two larger trends of broadly left-wing intellectual British writing about the EU, which has two functions: (i) to combat the politics of austerity in the UK; (ii) to undermine the legitimacy (and its anti-democratic technocracy) of the EU. (Since the Brexit vote not all left-sympathetic intellectuals embrace (ii), of course.) For all their merits, such writings tend to present intra EU debates in ways that fail to do justice to the political agency of the participants in them.
First, it is undeniable that the EU creates obstacles to certain forms of "governments of the left," especially those that are in the Eurozone. The most important of these are rules against government control of the economy and attempts to pursue industrial policy that end up favoring local producers. That is to say, left-wing governments that would pursue nationalist agendas are indeed severely handicapped by the EU. But redistributionist left-wing governments are, if they are willing and capable of taxing the local rich, not so-handicapped. Yes, the rich have ways of hiding some of their money, but it's not EU rules that prevent member states from finding and taxing it; rather there is a lack of political will. And the lack of political will is a function of the lack of local political power. The absence of political power makes the reliance on debt so tantalizing. But debt-financing is not itself characteristic of governments of the left. (As the next paragraph illustrates.)
Second, it is undeniable that the EU has thwarted the democratic will of some of the citizens of its member states during the crisis. But this is not directed at governments of the left. This becomes transparent if we reflect on the following passage (partially quoting Tooze): "when Papandreou and Berlusconi were ousted as premiers of Greece and Italy in 2011, senior officials in Berlin could be heard boasting: ‘We do regime change better than the Americans’; and to admit that the Fiscal Compact of 2013 was a straightforward imposition of the German ‘debt brake’ on the rest of the Eurozone." (81) Whatever else one may wish to say about Berlusconi, his is in no sense a government of the left.
As an aside, it is notable that Portugal goes unmentioned. In 2015 an anti-austerity would-be-left-wing government was thwarted (briefly). But it was not the EU who did so, but the country's president. Eventually constitutional processes prevailed, and Portugal has had a left-wing government since.
Third, and let me now turn to the heart of the matter: Greece. It is worth mentioning that Syriza was never crushed. After it became the main opposition party, in May 2012, it became the governing party in 2015. It called a snap-election after its defeat in EU elections, and was defeated (in Summer of 2019). But it is now the regular opposition. And if Greek politics has stabilized (that is by no means certain) it can expect to govern again.
It is, of course, true that Syriza failed to undo much of the austerity that was imposed on Greece by the Troika prior to its ascension to power. I have been quite critical of the EU's policies toward Greece in the midst of the crisis (see for example here in Dutch). These policies were manifestly designed to protect well connected (German, Dutch, and French) bankers and not Greek citizens. But English language critics of Greek austerity tend to ignore four pertinent facts: (1) the annual budget deficit of Greece was, when the crisis started, around 15% of GDP. It remained above 10% for the next few years. While one can argue about the size and speed of budget cuts and the distributional effects of these, austerity in Greece has very different character from the voluntary austerity pursued by, say, Tory/Lib Dem and Tory governments in the UK. Austerity in Greece was real, but claims about it also tend to be exaggerated. Its "size relative to GDP of [was] 4.0% in 2010, 3.1% in 2011, 2.8% in 2012 and 0.8% in 2013."+ In particular, in contrast to the UK, the Greek state lacks the capacity to raise income; this was, in fact, exhibited in the boom period prior to the crisis.
In addition (2), there was widespread distrust of the Greek ruling elites in the rest of Europe thanks to the decades long fraud by successive Greek governments, statisticians, etc. It is pretty clear that non-Greek banks and officials were (sometimes actively) complicit (and profited) from this. While I think more should have been done to hold those responsible (inside and outside Greece) accountable, and to show more public good-will toward Syriza, politically (1) and (2) made it impossible for any EU politician to advocate for massive transfers from Northern taxpayers to Greek citizens. If Anderson (recall also this post) cared to advance a reform of the EU, he would argue that some such structural transfers are necessary inside the Eurozone. Of course, he is not interested in doing so.**
Also, (3) a majority of Greek citizens apparently prefer staying inside the Euro.* And when given the option to leave the Euro on favorable terms and staying in, they seem to wish to stay in even if it means austerity. This is by no means irrational because inside the Euro, the purchasing power of Greek citizens is better preserved (at the cost of high unemployment and low growth). Even accounts (correctly) highly critical of German and Dutch politicians, acknowledge that the German government was willing to spend serious money to facilitate a Greek exit from the Euro.
One never hears the intelligentsia critics of austerity talk about (1-3). This is remarkable because such intellectuals use their discursive power to deny Greek political agency (within the constraints that they face). This is also evident in Cedric Durand's review of Tooze:
Even if one were to grant that the financial crisis as a whole has its origins (not at least partially in misguided government regulations and policies but) wholly in the private financial sector (and ignore the enormous investment of subprime loans by European, regional state owned banks, etc.), this is manifestly not the case of the Greek crisis (which has a relatively small financial sector).++ In addition, and again this is often ignored by the English speaking intelligentsia writing for each other, the Euro crisis is really caused by the mercantile policies of Germany and the Netherlands.
That is to say, Anderson is right to claim (in his criticism of Tooze) that "The single currency is the ark of a covenant that is not to be questioned." (83) I think there is no doubt that at the height of (the ongoing!) crisis, no government leader wanted to be responsible for the break-up of the Euro on their watch. But the reason for this is pretty clear: (4) there is no evidence to think that ordinary citizens in even the countries that suffer most during the financial crisis wanted to leave the Euro.*** (This, of course, does not play well to British audiences, and is discomfiting to Lexiters, and so one never hears about it.) But if one wants to understand "decisions taken by policy-makers from the structures in which they were working." this is non-trivial omission.
+There was significant suffering in Greece, due to collapse of growth and rise of unemployment. Because salaries and currency are not flexible, and the effects of structural re-organization are slow, this became inevitable. Much more should have been done to put income in the hands of ordinary Greek citizens.
*Once this became clear, Greek bargaining power inside the EU has been negligible.
**There is no political path to such transfers at the moment. But by focusing on austerity or not, the intra-Eurozone debate is mis-represented. The real question is, are German (and Dutch) taxpayers willing to finance a European wide safe-net. Phrased like that it is no surprise the former are unwilling to do so. But one can imagine one being developed out of a European Green Deal in the future.
++One may well think that Durand has a point that the ECB could have directly bailed out the Greek government. As Anderson notes, eventually ECB did start buying Greek bonds. But he fails to realize (recall) that during the financial crisis, the ECB was de facto allowing the Greek central bank to print money. Both prevented collapse of the system, but neither helped ordinary citizens much.
***I played around a bit on the Eurobarometer website. And I am confident of this claim, but I welcome learning of more finegrained studies per country, etc.
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