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Friday, 9 December 2011

Dave Douglass reviews VN Gelis "How the IMF broke Greece: eyewitness reports and role of the fake left"

Defence of the nation-state

Damned illegals: no gloss

The immediate context of this book is, as the title suggests, the economic and social disaster unfolding in Greece. Solutions seem to be determined by how one perceives the immediate cause of the crisis.

Reviewing this book in a paper which proclaims, “Toward a Communist Party of the European Union” (not simply ‘Towards a European Communist Party’) tends to suggest a less than a warm welcome. In fact this is a fraught subject entirely as a result of what have become principled as well tactical approaches to the whole proposition of the European Union, the euro, plans for a European superstate and, for some, the creation of a European ‘national’ identity.

Gelis identifies the dilemma for the seething Greek masses, who have concluded that at least under present conditions - the autocratic rule and impositions of world bankers and power elites - they want little of it. Yet all the conventional political parties, as well as most of the far left, are, for ideological reasons, tied to the proposition of making it work and the impossibility of anything other than that. There is a vacuum of credible political leadership - strikes and riots rage, but all existing political formations are refusing to engage with the Greek masses’ central conclusions.

The book is not easily summarised, being a collection of articles, email exchanges, polemics (including exchanges in the Weekly Worker), leaflets and press and radio reports on the developing situation in Greece. This makes for frequent repetition, and a confusing chronology in relation to the tracing of the debt trajectory and the recording of events since Greece joined the EU. Elaborate calculations of how to engage with the challenge, putting forward dynamic, non-euro zone solutions to allegedly intractable problems are not easily condensed.

Suffice to say that this is a bold reflection of unfolding events and a historic record of the decimation of Greek society spelt out clear enough. Gelis traces the origin of ‘the debt’ to the ruling class’s preparations for entry into the European Economic Community in the 1980s. The supremacy of ‘market forces’ increased consumerism without a matching productive base, which resulted in disproportionality, a balance of payment deficit and an explosion of public debt to feed the widely promoted consumerist appetites.

Circle of debt

The creation of a welfare state was built not, as Pasok (Pan-Hellenic Socialist Movement, led by Georgios Papandreou) had promised, by a redistribution of wealth and taxing the rich and ruling class community of tax-dodgers, but by heavy borrowing. The circle of debt servicing started an ever worsening crisis. Public debt as a percentage of GDP increased by five times over six years from 8% in 1979 to 42% in 1985. The corresponding total external debt quadrupled within the same period from 13% of GDP to 50%. Government spending rose from an average of 28% of GDP in the 70s to 41.1% in the 80s. One third of this increase was due to huge increases in debt repayments, which more than tripled as a percentage of GDP. Since the 1980s both the public and external debt have increased again by three times, the Deutsche Bank suggesting that public debt today is 135% of GDP, while external debt is 150% (p18).

During this whole process, manufacturing and agriculture was dismantled and there was an ongoing and worsening balance of trade deficit. Entry to the EEC and later accession to European Monetary Union made what little Greek exports there were even less competitive. From the beginning of the decade to date the euro has become dearer by 20%. Needless to say, the rising debt hits the poorest much more than the richest, since the tax burden lays disproportionately on the shoulders of the poor - apart from the fact that the working class is actually the only sector of society routinely paying taxes. The whirlpool of deprivation gets worse, as public spending on education, health, welfare, etc falls to less than half of the European average.

Following this worsening situation the European commission moved in to take direct control, “with the most intrusive scrutiny of an EU member-state’s fiscal and economic policies and book-keeping ever attempted” (The Guardian, quoted p27). An intense and semi-permanent system of monitoring has been put in place, involving strict quarterly reports and the need to demonstrate that the plans externally produced are being implemented. Needless to say, none of the commission’s measures aim to lighten any burdens on the working class or bring about social safety nets and support. Gelis charges that the whole euro crisis and its current impact in Greece are inherent in the system:

“… as could be shown by both theory and historical experience, in any economic union consisting of members characterised by a high degree of economic unevenness (as is the case with the EU) the establishment of open and liberalised markets for commodities and capital would inevitably lead to a situation where those which primarily benefit from the free movement of commodities and capital would be the more advanced regions/countries (which have already developed high productivity levels and advanced technologies), at the expense of the rest. No wonder therefore that Greek productivity in manufacturing in the period 1980-84 was about 42% of that in Germany and that after almost 20 years of membership it was even lower at 38% in 1995-99” (p31). These advanced countries and economies did not proclaim the message of open economic frontiers and free movement until they had gained that position behind protected markets for themselves.

When Greece entered the EEC, 31% of the active population was in agriculture (as against 6% average in the metropolitan EEC centres), but between 1981 and 2006 this dropped to 13%. Gelis argues that 18% of the population were forced into the “parasitic services sector”. This displacement of agricultural labour was not due to rises in productive efficiency, as agriculture “completely stagnated” - production actually fell by 0.9% between 1990 and 2006 (p32).

The complete loss of democratically elected government in Greece, with not a single person in the cabinet elected by anyone, and a junta of technocrats imposed by the European Bank and International Monetary Fund to carry out a programme which has no endorsement by the people, amounts to a white-collar coup. Gelis, referring to the period just prior to this, talks of “a complete colonisation of the country by the transnational elite … to enforce compliance”. This is especially so when you consider that the elected government had stood on a quite contrary programme. At the same time the democratic deficit reaches rock bottom, with the entire political parliamentary spectrum standing aside and refusing to represent the mass opposition of the people to the dictatorship. The enforced measures are everywhere presented as unavoidable.

For the left there is a problem here. While claiming to be in favour of ‘extreme democracy’, it tends to the defence of the EU as a progressive entity - a harbinger of a new European identity - even when it is clearly autocratically and ruthlessly trampling on basic, never mind ‘extreme democratic’, rights. The attempt to ride two horses with one backside in scarcely tenable.

Sea change

One of the massive sea changes in my life has been the conversion of ‘the left’ in general from nigh universal opposition to whole idea of a capitalist EEC to one of support and defence. Way back in the 70s at the time of the national referendum on Britain’s entry to ‘the Common Market’, the pros and cons lined up pretty much along class lines. All the establishment political parties and the Confederation of British Industry supported entry, while the unions and the far left, along with the usual suspects like Tony Benn, opposed it. So too, of course, did their rightwing equivalent in the Tory party, and far-right racist groups who just hated foreigners. Only the Maoists supported entry - they were following Mao’s line of the “bloc of four classes”, surrounding the ‘main enemy’ and developing a bourgeois political and military bloc against US imperialism.

Universally the left proclaimed in its stead the Union of Soviet Socialist European Republics. We meant by that a federation of separate socialist nations increasingly united and integrating, but retaining their own national and regional identities and strengths. This as a prelude to a global soviet socialist world commonwealth and various versions of a world democratic supreme soviet council. The pro-Common Marketeers of the period would never have owned up to plans for the creation of a single currency, let alone a single capitalist superstate, with a single parliament and a new European ‘nationality’. Those of us on the left would have seen such a state not, as most of the left now do, as a stepping stone to the creation of a single socialist European revolutionary entity, but the consolidation of our class enemies, tipping the balance against organised labour and historic national and regional class identities, upon which we all stood.

For the bulk of the far left the concept of the EU, its logical progression to a single currency and even the creation of new single European identity have become wedded to concepts of internationalism, anti-racism even. This has led to a de facto defence of the EU as a structure which firmly resists any idea of the component nations breaking free of its strictures, which in turn has led to a crisis of leadership across Europe as to what to offer in terms of real, practical answers to the deepening crisis and democratic deficit spreading across the continent. For some, the world as it is, despite its horrendous consequences, has become some sort rational pain barrier we all have endure in order to consolidate the European proletariat and give us a single identity. To millions of workers across Europe, ‘the left’ now seems to stand with the bourgeois politicians in defending a political structure and economic programme whose existence can only continue at the expense of the social gains of a century. It is in this context that the book’s subtitle addresses itself.

Gelis demands as a bottom-line expression of democracy an immediate referendum on whether the Greek people endorse the measures being imposed upon them. Whether they endorse the right of “the Greek political elite on behalf of the European elite” to make such an imposition. One would have thought in a paper which demands self-determination for the Irish people as a whole, but also self-determination for the British loyalist minority within that, that the Greeks would be afforded some measure of unconditional self-determination too.

In the absence of an alternative, that means:
• Leaving the euro and returning to a Greek currency (Gelis addresses head on all the theories of the skies falling in and being isolated by the world, etc, in far too much credible detail and argument than I could give justice to here).
• Cancelling the debt, as Iceland has and Argentina did. Or “renegotiation of the debt (under the threat of an immediate stoppage of payments in case this is not accepted) aiming at a significant lengthening of the period of its repayment and a corresponding reduction of the present exorbitant amount”.
•A highly progressive tax on wealth on and any kind of property with a total value exceeding €1 million, as well as deposits in foreign banks, with the state proceeding to confiscate any property of a corresponding value to the estimated tax in case property-owners declare inability to pay within a reasonably short period of time.
• Strict controls of capital movements.
• Fair, open and equal presentation of arguments in such a referendum against the bias and propaganda of the media.

Gelis writes: “… power is being transferred slowly out of the national terrain into the hands of the unelected EU-IMF vultures, with only a quisling role assigned to the governments of Greece and Ireland (and soon Portugal and Spain). It is becoming clear that the project for a European Union with a single currency but 17 different governments is unravelling right before our eyes. No serious commentator believes it will survive in its present form. The stage will arrive in the not too distant future, if it isn’t actually here already, that the blood required by the vultures of the EU-IMF will no longer be able to be given. Bankruptcy and default of all foreign debts will occur” (p124).

What are the consequences for democracy for such developments - when all such defaulting countries have their governments removed and replaced by a posse of non-elected bankers and technocrats? Before the cheering from the left at the end of ‘nation-states’ and individual national parliaments dies down, will they will be subsumed not by some super-European elected chamber, but a junta of IMF EU and World Bank directors, accountable to no one?

The majority of the ‘left’ in Britain today will see this little pamphlet as a scandalously seditious document challenging many dearly held perspectives. Admittedly there are things in it which make me feel uneasy - the highlighting of “mass illegal immigration” and its effect on the already straining system, for example - but comrade Gelis is not trying to put a gloss on anything, or smooth any sensibilities.

The crisis spreading through European capitalism requires that we on the left are at least honest, that there is an open and frank debate on the issues, not least that the views of the masses themselves be heard - and not ignored in the belief that we ourselves have already developed the medicine they all have to take, like it or not. For those reasons alone you ought to get this book and read it.

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