Austerity, the EU, and the Left

The EU: in need of reform?

The Greek government could default on its debts by mid-May. In endeavouring to deliver an end to austerity, the Syriza-led government has pitted itself against the European Union, and other forces of international capitalism. The Syriza project is an obvious example of much wider problems. How should we delineate the rights of a democratic state in relation to international structures? Does the ability of EU institutions to override individual democratic decisions constitute a ‘democratic deficit?’ If so, should effected nations leave these institutions?

There is clearly widespread dissatisfaction with the EU. This has usually taken the form of populist nationalism, in the form of UKIP in the UK, or hard-right movements like Golden Dawn in Greece. Both types of Euroscepticism engage in a predictable blame game. The ills of society are attributed to a monolithic group of foreign migrants, who simultaneously manage to steal both our jobs and our unemployment benefits.

This resurgent nationalism has had an important influence on European politics. In the UK, left-liberals, defining themselves against Farage and his ilk, support the EU without much critical analysis, correctly acknowledging the indispensable benefits of continental unity, but not the areas in which improvement is desperately needed. Conversely, while UKIP suffered at the polls, their goal has been achieved. David Cameron has been dragged into pledging a referendum he doesn’t really want, partly because of the spectre of Farage, and partly because of his own group of fruitcakes and closet racists on the Tory backbenches. A similar situation is reflected across Europe. In Greece, the UKIP-esque Independent Greeks actually share government with Syriza.

This last example sheds light on the possible role of the left, in relation to the questions posed at the start of this article. Can the European left find the political space to critically evaluate the EU, and press for reform of that institution; in doing so pulling the rug out from under the petty nationalists of UKIP, and the hate-pedlars of Golden Dawn? Tariq Ali has described the EU as a ‘bad reality’ (Tariq Ali, The Extreme Centre) which the left have failed to address. Seething resentment, which could be directed against the austerity enforced by the European Central Bank, is often turned on scapegoat-migrants. In response, groups like Syriza in Greece, Die Linke in Germany, and Podemos in Spain, have begun to define a new identity for the left, one which does not confuse internationalism with unconditional support for a sick institution.

That sickness is austerity. The EU have zealously imposed doctrinaire cuts, meant to ensure recovery; yet there have been few tangible improvements. Despite the ferocious slashes to the social welfare budget, Greek growth continued at a snail’s pace of 0.6% in 2014, as real wages declined by 1.6%. In both Greece and Spain over 50% of young people remain without work. European debt, the burning issue necessitating the pain of austerity, has actually grown by 30% since 2008.

Academically, questions have also been raised about extreme spending cuts. A Nobel Prize winning economist recently launched an attack on what he called the ‘austerity delusion,’ pointing out that much of ‘austerian’ theory has been discredited. Research cited by George Osbourne in a 2010 speech setting out plans for spending cuts has been roundly criticised, while two thirds of economists questioned by the Centre for Macroeconomics claimed that austerity has damaged the British economy. Even the IMF now believe they underestimated the harm caused by slashing public spending. The EU is not responsible for British austerity, but it imposes similar measures on other countries, and in doing so reinforces the neoliberal consensus. An alternative agenda for the EU, concerned with promoting equality rather than simply business, is set out each year by the EuroMemorandum group, made up of 300 economists and social scientists. Their proposals are ignored.

Across Europe, the lack of challenge to the pseudo-science of neoliberal economics is reflected in electoral results, Britain being a case in point. Voters continue to elect parties of austerity, apparently out of a sense that rigid fiscal policies are better for the economy. There is no money; we must save. The obvious historical counterpoint, namely the state of the European economy after 1945, and what was thereafter achieved in terms of social welfare, is ignored. 1945 conditions cannot simply be artificially recreated, but history shows that alternatives to austerity at least deserve to be part of the conversation. It is increasingly hard to establish any sense of different possibilities, despite notable academic backing for alternatives. In the UK, the right-wing press portrayed Ed Miliband’s watery social-democracy as a potential catastrophe, going so far as to equate his mild policies with Stalinism. This absurd distortion of reality appears to have more in common with Uncle Joe than anything proposed by Red Ed.

Aside from the UK, Syriza, Die Linke and Podemos have challenged the fiscal fanaticism that exists across the EU. Yet even electoral victory is no guarantee of change, as Syriza has been faced with accepting more austerity as the price of staying in the union. The democratic will of the Greek people is redundant; or partly redundant, as Syriza may be successful in achieving a compromise, one which dilutes EU-imposed restrictions. If Syriza is not successful, Greece could leave the union. The choice boils down to acceptance of some degree of economic neoliberalism, which has been rejected by the Greek public, or being forced into a damaging isolationism; or alternatively making an unlikely alliance with Vladimir Putin. None of these options appear attractive, and all in some way contradict the principles of Syriza’s democratic mandate. The right would say this is economically inevitable. The left must pose a credible alternative.

In response to Greek arguments, many Germans would (presumably) postulate that Germany is exercising her own sovereign rights in demanding that Greece repays her debt; so which democratic decision has priority? The response of the left must be to mount a European challenge to a consensus that has limited the window of debate to discussion around which brand of austerity is most appropriate. The historic internationalism of the left is not a disadvantage, in comparison to the insular nationalism of many on the right, but can be made into an advantage. Politics across Europe is fissuring. On either flank leftists and nationalists have gone some way towards eroding the dominance of the centre, despite Cameron’s crushing victory last Thursday. In Scotland, nationalism and anti-austerity have been combined. The SNP appears a genuinely progressive force, whatever reservations one may have about Scottish independence.

Building a European solidarity against austerity is easier said than done. The answer is not to leave the EU, but to pierce the harmonious consensus that equates austerity with economic success. Movements of the left have done this in Greece, and may succeed in Spain. In Britain, disenchantment with austerity has fed into the stratospheric rise of the SNP, and the more gradual growth of Plaid Cymru and the Greens. Only by putting pressure on individual European governments can the EU be forced away from dogmatic adherence to neoliberalism. At the moment, with Cameron waltzing back into Downing Street, this appears a distant prospect.

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