Group items tagged

Option 1: Euro-reformism

One (fast receding) option is the standard variety of euro-reformism, practised typically by social democrats who argue for ‘more democracy’,

dynamic analyses

The EU’s institutions are incapable of being reformed through the standard process of inter-governmental deliberations and gradual treaty changes.

Option 2: Lexit

This (Lexit) option raises concerns regarding its realism and probity. Is its agenda feasible? In other words, is it a realistic prospect that, by (in Kouvelakis’ words) calling for referenda to leave the EU, the Left can block “the forces of the xenophobic and nationalist Right from winning hegemony and diverting the popular revolt”? And, is such a campaign consistent with the Left’s fundamental principles?

the EU was constructed intentionally as a democracy-free zone designed to keep the demos out of decision-making

Given that the EU has established free movement, Lexit involves acquiescence to (if not actual support for) its ending and for the re-establishment of national border controls

the Left should demand common minimum wages in exchange for its support for the Single Market

xenophobic Right

do they truly believe that the Left will win the discursive and policy war against the fossil fuel industry by supporting the re-nationalisation of environmental policy?

Option 3: DiEM25’s proposal for disobedience

Instead, DiEM25 proposes a pan-European movement of civil and governmental disobedience with which to bring on a surge of democratic opposition to the way European elites do business at the local, national and EU levels.

national parliaments and governments have power

a progressive national government can only use this power if it is prepared for a rupture with the EU troika.

a clash with the EU establishment is inescapable.

wilfully disobeying the unenforceable EU ‘rules’ at the municipal, regional and national levels while making no move whatsoever to leave the EU.

Undoubtedly, the EU institutions will threaten us

Consider the profound difference between the following two situations: The EU establishment threatening progressive Europeanist governments with ‘exit’ when they refuse to obey its authoritarian incompetence, and Progressive national parties or governments campaigning alongside the xenophobic Right for ‘exit’.

It is the difference between: (A) Clashing against the EU establishment in a manner that preserves the spirit of internationalism, demands pan-European action, and sets us fully apart from the xenophobic Right, and (B) Walking hand-in-hand with nationalisms that will, inescapably, reinforce the xenophobic Right while allowing the EU to portray the Left as populists insufficiently distinguishable from Nigel Farage, Marine Le Pen etc.

The Left’s traditional internationalism is a key ingredient of DiEM25, along with other constituent democratic traditions from a variety of political projects (including progressive liberalism, feminist and ecological movements, the ‘pirate’ parties etc.).

DiEM25 proposes a rebellion to deliver authentic democracy at the levels of local government, national governments and the EU.

This leftwing objection to DiEM25’s call for a pan-European movement is interesting and puzzling. In effect, it argues that democracy is impossible on a supranational scale because a demos must be characterised by national and cultural homogeneity.

The Left, lest we forget, traditionally opposed the bourgeois belief in a one-to-one relationship between a nation and a sovereign parliament. The Left counter-argued that identity is something we create through political struggle (class struggle, the struggle against patriarchy, the struggle for smashing gender and sexual stereotypes, emancipation from Empire etc.).

in order to create the European demos that will bring about Europe’s democracy

Only through this pan-European network of rebel cities, rebel prefectures and rebel governments can a progressive movement become hegemonic in Italy, in Greece, in England, indeed anywhere.

The question for Europe’s Left, for progressive liberals, Greens etc. is, now, whether this struggle, this project, should take the form of a campaign to leave the EU (e.g. Lexit) or, as DiEM25 suggests, of a campaign of civil, civic and governmental disobedience within but in confrontation with the EU

to those who berate DiEM25 and its call for a pan-European democratic movement as utopian, our answer is that a transnational, pan-European democracy remains a legitimate, realistic long-term goal, one that is in concert with the Left’s time honoured internationalism. But this objective must be accompanied by pragmatism and a precise plan for immediate action:

Oppose any talk of ‘more Europe’ now

Present Europeans with a blueprint (a comprehensive set of policies and actions) of how we plan to re-deploy Europe’s existing institutions

ensure that the same blueprint makes provisions for keeping internationalism alive in the event that the EU establishment’s incompetent authoritarianism causes the EU’s disintegration

“The EU will be democratised. Or it will disintegrate!”

We cannot predict which of the two (democratisation or disintegration) will occur. So, we struggle for the former while preparing for the latter.

DiEM25’s Progressive Agenda for Europe will be pragmatic, radical and comprehensive. It will comprise policies that can be implemented immediately to stabilise Europe’s social economy, while:

affording more sovereignty to city councils, prefectures and national parliaments, proposing institutional interventions and designs that will reduce the human cost in case the euro collapses and the EU fragments, and setting up a democratic Constitution Assembly process that enables Europeans to generate a European identity with which to bolster their reinvigorated national cultures, parliaments and local authorities.

Conclusion:

The EU is at an advanced stage of disintegration. There are two prospects. The EU is not past the point of no return (yet) and can, still, be democratised, stabilised, rationalised and humanised The EU is beyond the point of no return and incapable of being democratised. Therefore, its disintegration is certain, as is the clear and present danger of Europe’s descent into a postmodern version of the deflationary 1930s

So, what should progressives do?

Campaign vigorously along internationalist, cross-border, lines all over Europe for a democratic Union – even if we do not believe that the EU can, or ought to, survive in its current form Expose the EU Establishment’s authoritarian incompetence Coordinate civil, civic and governmental disobedience across Europe Illustrate through DiEM25’s own transnational structure how a pan-European democracy can work at all levels and in all jurisdictions Propose a comprehensive Progressive Agenda for Europe which includes sensible, modest, convincing proposals for ‘fixing’ the EU (the euro even) and for managing progressively the EU’s and the euro’s disintegration if and when the Establishment brings it on.

Nor has the euro reduced inequality among European countries.

The prolonged depression has helped fuel the rise of right-wing nationalists and Euroskeptics. In Austria, Finland, France, Germany, Greece, the Netherlands, and elsewhere, radical right-wing parties now enjoy more success at the polls than at any time since the 1930s.

Trust in EU institutions,

has fallen through the floor.

The reason currency pegs often depress economic growth lies in the essential nature of monetary arrangements.

Varoufakis

Galbraith

Stiglitz

All three would prefer that the system be reformed.

Galbraith offers the most succinct explanation of why the system has benefited Germany at the expense of weaker economies:

The Greek story is properly a European story in which, as in all European stories, Germany takes the leading role.

Varoufakis, Galbraith, and Stiglitz differ on the details, but they all blame the euro system and, especially, Germany.

Stiglitz shows that international systems of pegged currencies, of which Europe’s single currency represents only an extreme example, “have long been associated with recessions and depressions.”

Most observers now attribute these troubles to the euro.

In the real world, however, countries have diverse market positions and domestic institutions, which means that macroeconomic convergence is hard to come by.

a currency peg prevents the governments of countries that run trade deficits and incur debt from pursuing healthy economic policies to correct the problem.

normally loosen domestic monetary policy (thereby lowering interest rates and stimulating investment), let its currency depreciate (thereby boosting exports, reducing imports, and transferring income to the sector of the economy that produces competitive goods), and increase government spending (thereby stimulating consumption and investment).

Deficit countries are thus left with only one way to restore their competitiveness: “internal devaluation,” the politically correct term for austerity

permanent austerity becomes the only way to maintain international equilibrium.

Citizens grasp at increasingly radical new parties and lack the faith in Europe required to enact needed reforms.

Germany has emerged almost unscathed—at least so far.

Yet the costs of a flawed monetary system may eventually boomerang and depress growth even in Germany. Austerity is slowly reducing Germany’s ability to sell its goods to other European countries,

Despite the EU principle of free movement, many informal barriers to mobility still protect special interests.

to force the German economy into line

the EU could discourage trade surpluses by imposing a tax on them

Another set of structural policies would encourage large fiscal transfers and migration in order to offset the inequities that the euro has induced. In essence, this would replicate the movements of capital and people that make single currencies viable within individual countries.

fiscal transfers from creditor countries such as Germany to deficit countries such as Greece and Italy.

Stiglitz proposes, Germany and other surplus countries could do more to accept and encourage continuous migration flows from deficit countries.

Germans are unlikely to renounce the export-led growth that has stemmed from their 60-year tradition of high savings, low inflation, and modest labor contracts. They are even less likely to accept massive fiscal transfers to other countries.

Stiglitz offers the most thorough evaluation of the possible options. There are three. The first entails reforming the fundamental structure of the euro system so that it generates growth and distributes the benefits fairly. Stiglitz details how the EU and the European Central Bank might rewrite tax laws, loosen monetary policy, and change corporate governance rules in order to boost wage growth, consumer spending, and investment.

Political opposition to immigration is already strong in Austria, Denmark, Germany, and the Netherlands, and these countries would not tolerate many millions of additional foreigners.

a second policy option: muddling through. In this scenario, member states would strengthen the EU’s ability to manage the crisis.

European Stability Mechanism,

The burden of the current system on deficit countries must also be eliminated—a change that requires far more serious reform. Eventually, Europe would have to restructure its debt,

GDP-indexed bonds

eurobonds

the solvency of national banks,

Yet Germany and other creditor governments are naturally hesitant to accept financial responsibility for debtor countries.

Such reforms would also require the EU to massively expand its oversight over national financial systems,

If neither of the two options to save the single currency and restart growth is viable, this leaves only a third option: abolishing the euro.

Although Stiglitz would prefer that the euro be reformed, he admits that “there is more than a small probability that it will not be done” and therefore argues for breaking up the system.

from Grexit to his preferred alternative of breaking the eurozone into several subgroups, each with its own currency.

Yet even the radical step of breaking up the eurozone, Stiglitz makes clear, would probably help deficit countries only if Germany agreed to increase domestic spending, rein in speculation, and reduce deficits.

Abolishing the euro might slightly improve the options for deficit countries, but absent deeper structural reforms, it would not eliminate the underlying problem.

depressing reading, because in the end, they suggest that there is no easy way out of Europe’s predicament, given the current political constraints. In the long run, muddling through may be the worst outcome, and yet it is the most likely.

In response to such a bleak prognosis, many European federalists, particularly on the left, contend that Europe’s real problem is its “democratic deficit.” If only EU institutions or national governments were more representative, they argue, then they would enjoy sufficient legitimacy to solve these problems. The EU needs more transparency in Brussels, more robust direct elections to the European Parliament, a grand continent-wide debate, and political union, the argument runs, so that the resulting European superstate would be empowered to impose massive fiscal transfers and macroeconomic constraints on surplus countries. Alternatively, if more radical alternatives could be fully debated in national elections, then member states might muster the power to pull out of the eurozone or renegotiate their terms in it.

everything comes down to choices made by self-interested sovereign states. Governments have little incentive to make charitable and risky concessions, even in a united Europe with economic prosperity on the line. Politicians simply lack the strength and courage to make a genuine break with the status quo, either toward federalism or toward monetary sovereignty.