The Greek deal is a bad one. We really need to understand how serious the situation is. By ‘we’ I mean committed pro-Europeans: people, like me, who strongly believe Britain’s place is at the heart of the European Union.
Let us think about what happened in Greece, and how it all started. As Mariana Mazzucato argues brilliantly here, the problem arose because the whole issue was tackled based on an entirely false premise: that it was a cash flow issue when it was not. Over the years, Greek banks received a lot of cash from German banks. They took the money and used it to fund Greek businesses so they could buy, among other things, German products. By doing so, Germany increased demand for its products and boosted its exports. Greece, on the contrary, built up its debt. That, coupled with the lack of public sector reform and investments in innovation, meant that when the crisis arrived, Greece was totally exposed.
At that point, the EU leadership failed to realise that Greece’s problems were about lack of long-term investment. Instead it treated the problem as purely a cash issue, and demanded the cash back. Of course, Greece was not in a position to give it back, but tried. Pensions, welfare and the public sector were cut to find more money.
The rest of the story is well known because we have seen it displayed on our screens. Alexis Tsipras throwing the ball back to the Greek people with a referendum, and the negotiations that went on over the weekend to try and find an agreement.
If only Germany had allowed Greece to do what it had done for itself: boosting the economy by investing in (not shrinking) innovation and technology and increasing wages.
If only Germany did not have to flex its muscles so much. It has rocked the boat so much that American firms signing contracts with firms on the continent are now including eurozone clauses, determining what would happen should the euro fail.
If only the situation could have been sorted with less short-termism and without damaging the future of generations of young Greeks.
If only Angela Merkel had listened to Barack Obama and the International Monetary Fund supporting more generous conditions for Greece, including restructuring the debt.
Frankly, I think that Angela Merkel has done the Eurosceptics across Europe a huge favour.
With a referendum looming here in the United Kingdom my opinion is that we should get ready to face the backlash that this is going to have in our country.
We on the progressive side need to keep clear in mind that our pro-EU stance must not be watered down. That would be a huge mistake.
Responsibility for what happened lies with the leadership that is currently in charge in the eurozone. For a monetary union to be sustainable, countries cannot have such huge discrepancies in their level of competitiveness – that is why Greece should have been helped to boost its economy through investments, and therefore be in a position to pay back its creditors.
Instead of shying away from this reality, pro-Europeans should now stand firmly together demanding that Europe changes course. The current EU leaderships are not Europe, and the Europe we see now is the outcome of who has been in charge in the last few years – mainly conservative, rightwing governments who have supported the politics of austerity with no grip on growth. But that is not set in stone, as it is not set in stone that the Tories have to continue being in power in Britain – it is up to us to provide an alternative which sets out what it means to be Labour in this century, both in Britain and in Europe as a whole.
That is why I am worried that some on the left claim that we should leave Europe because it implements policies of austerity. How would that help our fight at home?
In fact, we need our internationalist approach now more than ever: we need to lead (not leave) a different Europe, which invests in innovation, human capital, research and development. We need to encourage the countries in the eurozone to create the stronger union they need for it to succeed and to help remove the obstacles which prevent them from achieving it.
That would be not only in our own interests as a commercial partner – but in the interests of Europe as a whole. And on this we should challenge the Tories.
Instead of dreaming of a fantasy world where we prosper in isolation, we should now ask David Cameron whether he will show the leadership Britain is capable of, or whether he will once again put party management ahead of the interests of our country.
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Ivana Bartoletti is chair of Fabian Women’s Network. She tweets @IvanaBartoletti
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“We on the progressive side need to keep clear in mind that our pro-EU stance must not be watered down. That would be a huge mistake.” Well said Ivana. Mistakes by the leadership of the EU are no reason to oppose the EU, any more than mistakes by your local council are a reason to give up on local government altogether. We have helped create a progressive EU in many ways – environmental, working standards, you name it. Let’s build on it!
Great piece. The key thing to remember is that the EU is not a monolithic entity with an alien will of its own, but a political battleground like any other. It’s a structure, not a government. It’s not intrinsically right-wing or left-wing — it’s the result of a long series of compromises between different elected governments throughout its history, and which continues to develop today. If we want it to be better, we need to engage with it.
Toby, as is often the case with people who support the EU, they possess little or no knowledge of the history, development, and operation of this organisation. The EU is a transnational regime with its own entrenched ideology and economic approach as enshrined in the Treaties. The EU does not respond to changes in the political orientation of governments as the democratically elected government of the Syriza party can testify. It cannot be reformed in the same way as the IMF or the WTO cannot be. Being Pro-EU was a talisman of being pro-Blair but in effect the Labour party has been on the wrong side of the argument on the EU. How can a party who believes in local democracy, fighting injustice and inequality support a corrupt, undemocratic, unaccountable, organisation and call this progressive. Bizarre.
(1) Ad hominem: Claim that your opponent is ignorant without addressing their arguments. (2) Generalisation: Claim that your ad hominem attack in fact applies to many or all people who disagree with you. (2) Unsupported assertions: Instead of engaging with any points already made by your opponent, make a series of new and controversial claims which your opponent would surely dispute, but without providing any evidence or justification. (3) Guilt by association: Mention an unpopular person who happened to share some aspects of your opponent’s views, as if that demonstrates the falsity of those views. (4) Rhetorical flourish: Finish by expressing your bafflement that anyone disagrees with you.
Fortunately, Maz, the comments system here allows me quickly to view and compare comments you have made elsewhere, so I don’t feel personally slighted! 🙂
Ivana Bartoletti is a passionate pro-European. I too have believed in the drive towards closer Union in light of Europe’s 20th Century war-like history where political ambition, intrigue, nationalism and overt racism produced 2 disastrous World Wars.
However, good Progressive politicians must always question. We must question power and even more abuse of power. The danger of Ivana’s approach is we get attached to an institution. An institution that represents our dream, our aspiration. The EU represents to progressives an institution that is about the fellowship of man.
The EU of Merkel and Schauble is an institution about power and protecting self-interest. The self-interest of the French and German banks who foolishly over lent to Greece.
The power of Merkel and Schauble is to use the EU institutions to crush Greece as Merkel and Schauble fear Syriza, they fear anti-austerity movements, they fear the possible domino consequences of a Greek debt write-off.
When an institution, no matter how noble it’s intentions, abuses power, overrides democratic votes then Progressives must question whether the institution is worth defending.
I am afraid Ivana is making the mistake of believing the idea of an institution is good and what is happening now is just an aberation so we go on supporting the institution.
Our support should be on terms. We will only support the EU if it is progressive, democratic and respects each member of the institution. That is not today’s Europe and today’s Europe or more accurately the EU is heading for break-up because of the stupidity and inflexibility of Merkel and Schauble.
Sorry Ivana we challenge the present leadership and its terrible policies not meekly go along with them in the hope that things will get better.
Barry Kendler