What is at stake

by Boaventura de Sousa Santos 14 November 2011

No more civilities. As it deepened, the European crisis made possible a new radicalism and a new transparency. Up until recently, radical were the positions of those opposing the interventions of the Troika (European Union, European Central Bank and IMF) and its recipes by reason of sovereignty and democracy, or those suspecting that the crisis was the Right’s excuse to implement in Portugal the “schock policies” of privatization, including health and education. In view of the Greek disaster, they proposed noncompliance with the memorandum of agreement, or demanded a public audit of the debt in order to get at the items of illegitimate or even illegal indebtedness. Such measures were considered radical because they questioned the euro’s survival, because they discredited Portugal in the European and international context even further, and because, were they to be implemented, they would provoke a social disaster, precisely what the memorandum was supposed to prevent.

As the crisis deepens, a new radicalism emerges which, paradoxically, and unlike the previous radicalism, resides in the strict compliance with the logic that presides over the Troika and the memorandum. Commentators of the Financial Times and politicians of Northern European countries argue for the demise of the euro, since, after all, “the euro is the problem”; propose a euro for the more developed and another for the less developed countries; maintain that Greece (or some other countries) leaving the euro zone may not be such a bad idea, provided it is kept under control; and finally defend the permanence of the euro (through Eurobonds or some other mechanism) on condition that the indebted countries surrender totally to the financial control of Germany (federalization without democracy). In other words, nowadays radicalism has two faces, which creates a new transparency regarding what is at stake or is good for for the indebted countries. Transparency concerning what is omitted is as important as what is actually said. In both cases, it occurs because the underlying interests are … on the surface.

Transparency regarding what is omitted. First, it is not possible to return to “normalcy” in the present institutional European framework. In the present framework, the European Union walks inevitably towards disaggregation. Italy will be followed by Spain and France. Second, the austerity measures, besides being socially unjust, are not only ineffective but also counterproductive. Nobody will be able to pay debts by producing less, and that is why the current measures will have to be followed by even more severe ones, up until the moment in which the beaten, scourged, suffering people (let’s not be afraid of the word) cry out: Enough! Third, the financial markets, ruled by speculation, will never reward the Portuguese or the Greeks or the Irish for their sacrifices, since not acknowledging the sufficiency of the sacrifices is what feeds the profit of speculative investment. If the speculative dynamics are not tamed, social disaster will occur anyway, whether the markets are complied with or not.

Transparency of what is good for the highly indebted countries and for Europe as whole, that is, for the 99% of citizens plus all the immigrants of Southern Europe, as well as all the Europeans for whom a Europe of nationalisms is a Europe at war and for whom democracy is such a precious good that it only makes sense if it is democratically distributed. Any solution aimed at minimizing the oncoming disaster must be a European solution, that is to say, a solution that must be articulated with, at least, some of the euro countries. I envisage two possible solutions. The first one, scenario A, consists in exerting pressure, together with the other countries “in difficulty,” to change the institutional European framework in the short run, so that the debt may be mutualized and democracy federalized. This implies, among other things, to give power to the European parliament, make the Comission answer to it, and have the presidency elected directly. It implies the creation of participatory democracy mechanisms to prevent against the pathology of representation (European citizens not feeling themselves represented by their representatives). It also implies a European industrial policy and the search for commercial balances inside Europe. For instance, shouldn’t Germany, which exports so much to the rest of Europe, import more from the rest of Europe, thus relinquishing the mercantilism of its incessant greed for surpluses? This would require a regional policy of customs and intra-European commercial preferences, as well as the refoundation of the World Trade Organization. The latter is actually today a postponed corpse, for having failed to build a model of international cooperation for the future: global and regional agreements focusing on the general objective of making the places of consumption coincide with the places of production increasingly and as much as possible,. It also requires prudent financial regulation at the European level, including a postneoliberal mandate for the European Central Bank (more power of intervention based on more democratic control of its structures and modes of operation). This solution is strongly opposed to the authoritarian solution proposed by Germany which consists in subjecting every country to Germany’s tutelage in exchange for eurobonds or any other mechanism of Europeanization of the debt. Such rendition to German imperialism would mean that in Europe only those with money are entitled to democracy.

Scenario A is exacting. It would require, immediately and in spite of the limits of the current mandate, that the ECB adopted a much more active role in order to ensure a time of transition. Prudence advises, however, that failure of such a scenario be foreseen and seriously considered. We should, therefore, immediately begin to prepare scenario B, that is, to leave the euro, alone or together with other countries, arguing, as proved by the facts, that with this euro the inequalities among the countries will not cease to augment. Auditing the debt would show the seriousness of our purpose. The social costs of solution B are not higher than the costs of the failure of solution A, and they at least let a light appear at the end of the tunnel.

 

One response to “What is at stake

  1. Mr, Santos, it may have escaped your attention, but Germany is a country of 80 million people, very real, hardworking folks with their own, very real problems. And not everything is milk and honey here, quite to the contrary. What do you have to offer to those people? Why should the continue to work so hard only to see the profits being spend on other nations instead of for improvements for themselves? And that, without attaching any conditions to that, as if the struggling nations didn’t get into their mess on their own because of desastrously wrong political decisions in the past? Don’t you think your proposal, that Germans should simply bail out the south and subisidize those nations until eternity, dangerously overstresses the European solidarity of the Germans?

    Also, Germany is not alone, there are other nations that went through painful reforms and are successful now, only to find themselves pressed into funding the rescue plan. On the other hand, the GIPSI’s only represent 140 millions of the 340 million strong Eurozone, so they aren’t a majority at all. So, sorry, but any ideas that are based on redistribution without forcing the receiving nations into reforms to correct their very real structural problems, like corruption, tax evasion, inefficiency etc. is a political non starter. There won’t be a majority in Europe for a plan that subsidizes whole nations which aren’t showing that they are willing to contribute to their own recovery! More realistic ideas please, about ways to improve the economies of the struggling nations, and less wishful thinking.

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