Exit from the Euro or a “european” strategy? (June 2011)


A critique to the positions of the Left

Part 3 of OKDE’s feature on the strategy of the labour movement towards the E.U.

(printed in June 2011, in our paper Workers’ Struggle)

On the face of the crisis, the main choice of the dominant parts of the big european capital is formed as follows: an effort to maintain the Eurozone, as a basic tool in the international competition – “intubation” of the overindebted countries (“support mechanisms” etc.) as a way to drain as much as they can from these countries and postpone the chain reactions and collapse of the financial-credit system – support of the bourgeois class along with a strict supervision of the political scenery in these countries – burdening of the crisis on the working class and the poor strata with the medieval “memorandums” and measures.

Inside the Left, the crisis has brought the strategy towards the E.U. –and, especially in Greece, whether we should get out of the Euro and the E.U.– in the centre of discussion.

The “left european strategy”…

The left “pro-Europeans”, parties and personalities from the reformist European Left (Bloco de Escuarda in Portugal, Die Linke in Germany, SYN/SYRIZA in Greece etc.) or its periphery, make the following political proposition:

– Resistance to the anti-labour, anti-popular measures
– Redistribution of wealth: fiscal reform, taxation of enterprises, big incomes, speculative capitals etc., reinforcement of the “social state” and refusal of privatizations along with creation of “public pylons” e.g. in the banking sector.
– Audit, re-negotiation or cancellation of the debt.
– Direct funding / lending from the European Central Bank (Eurobond)

According to this view, it is necessary to have a “progressive” or “left” government (a step towards a “socialist direction”, is added by some) in order to implement such measures. However, if such a government would decide the exit of Greece, for example, from the Euro, it would commit a huge strategic mistake, as it would immediately face stifling international and domestic pressures. A new drachma would be automatically undervalued, allowing speculative attacks against it, so that this government and the people who elected it would be punished and brought to their knees. The currency underevaluation would increase the debt (since it is counted in euros or dollars) and the international sources of funding / lending would drain. Capitalists’ assets in Greece would also be undervalued; as a result, they would raise prices (inflation) and they would demand even worse anti-labour, anti-popular measures. The exit from the Euro would, thus, become a pretext and an excuse for an even more ferocious capitalist attack.

It is, of course, well-known the blackmailing that the E.U. staffs have already been exerting on all the peoples, whose turn has come to be put under the boot of the “support mechanisms”, in order for the international usurers, the large financial groups, which hold the dept in their hands, to be saved. What makes the “pro-Europeans” believe that this blackmailing can be more easily dealt with, just because it is exerted inside the E.U. – this is not explained to us. More than that, they claim that the exit from the Euro is opposed to an internationalist view and they present the anti-european positions of the far right as an argument. Thus, based on the current correlation of class forces (which supposedly does not permit an anti-capitalist policy), the only realistic proposition which remains is the parliamentary reinforcement of the Left (it is silently implied that popular struggles should eventually end up to it), so that “left” governments can be formed in as many countries as possible.

… and its fatal illusions

First of all, a lot of these propositions have already been implemented by the E.U. staffs in order to save big capital. For example, when the ECB accepts as guarantees the bonds of countries held by banks (more so when they have been evaluated as “rubbish” or worse than that), what else does it do if not exerting an indirect lending policy, socializing the private “bad debts” by burdening them on the workers and the poor strata of Europe?

Secondly, the essence does not change if this lending takes place directly by issuing Eurobonds. On the one hand, this would mean that the C.E.B “prints money” which would decrease the credibility of the Euro and would increase the lending interest rates of all the Eurozone countries. We have to remind here that a debt problem also exists in the countries of the so called “centre” (in a smaller scale) and not only in the countries of the “periphery”, as it is presented, for reasons of propaganda, in order that the crisis of capitalism in the E.U. can be covered up. On the other hand, stopping of the indirect ECB financial support to the banks would mean that they would have to clean themselves up from their “bad debts” and enhance their capital structure. Could there be the slightest doubt that, in both cases, the capitalists and their governments, in order to counterbalance the cost, would demand more barbarous measures against the working people and popular masses e.g. new taxes or state aid to the banks?

Thirdly, it is an illusion that, in conditions of crisis, the capital will tolerate to be taxed in order for the “social state” to be funded, only because a “left” government will ask for it through bourgeois institutions. It can only be forced to some concessions by a huge rise of the class struggle – and, of course, only temporarily, before preparing its counter attack. Cruel neoliberalism is not a choice of the right or conservative circles, as it is presented by the “pro-Europeans”, but a one way road for capital. “It is either them or us”, this is the absolute command of the crisis from the side of the capital as well as the proletariat. No “intermediate solution” can finally exist – and every such effort of a “left” government would be immediately faced with an organized capitalist campaign of rising prices, massive exit of capital, investment sabotage.

Finally, it is really funny even to say that there could be, within the Eurozone frame, a negotiation or a cancellation of the debt in favor of an overindebted country through its own initiative (the “haircut” with lion-share exchanges is, of course, always one of the lenders-speculators’ options). Which of the powerful lending countries or banks-usurers would accept the losses, without demanding the immediate expulsion of the “rogue state”, which would ask for something like that, from the Eurozone and the E.U. ?

Taken as a whole, the views of the “pro-Europeans” consist a bow to the reactionary E.U. – more so when the crisis has torn the veil of “partnership” and “solidarity” in the E.U. If the exit from the Euro is not actually a cure-all and hides enormous dangers (see below), it is a thousand times more utopian for somebody to believe that there can be a “good” Euro, that even the most basic pro-popular policy can be exerted using the institutional and economic tools of the Eurozone and the E.U. –especially during the crisis– and to present the inequalities among the countries of the Eurozone not as structural ones (since it functions primarily in favor of the big capital of the “centre”), but as accidental and temporary, which can be reformed and corrected. Finally, it is infuriating to use the bugbear of the far right (we do not refer here to the self-evident reactionarity of its policy), to identify the struggle against the capitalist-imperialist E.U. with isolationism or nationalism, so that the “pro-Europeans” can cover up the true social fascism of the E.U. cannibals and the various “socialist” bourgeois parties which serve it. Let the world destroy, all that matters is not to disturb the Eurozone, the E.U., the european institutions – this is where their policy ends up to!

The reactionary utopia of self-reliant development

Another current of left intellectuals, economists etc., either from the same political space (that is, of the European Left), or even from the far left in Greece, adopts a lot of the above measures, frequently in a more radical version (nationalization of banks, debt cancellation, control / restriction of capital moves), but it considers that the exit from the Euro is a precondition for their effective implementation, for the crisis to be dealt with in favor of the working class or even for the road to socialism to be opened, according to some. Let us note here that the position of the Greek Communist Party for “popular power” and “socialization of monopolies” approaches, in fact, this view, even though it keeps an ambiguous attitude on the issue of the E.U. (calling sometimes for an “exit from the Euro” and talking, some other times, generally, about “disobedience”). These positions have two basic problems:

(A) They do not pinpoint correctly the starting point and the essence of the crisis, either of the E.U. or globally. So, they believe that (we mention some typical views):

– The debt is a problem of the “periphery”, which is not correct.

– The crisis began as a debt or bank crisis to develop into a fiscal one.

– The Euro is one of the main causes of the crisis in the whole “periphery”, because it led to the fall of its competitiveness, and as a result to current account balance deficits, to an increase of borrowing from abroad and to an expansion/“bubbling” of domestic credit systems (through the flow of lending capital from the “centre” to the “periphery”).

– The Euro is the main cause of the policy chosen to deal with the crisis, by burdening all the loads onto working people and the poor strata. It is characteristic that the most consistent representatives of this view mention that “the special character and ferociousness of the turbulance is due to the Eurozone”.

All the above are correct, from one point of view; however “they lack exactly what is to be said”, that is, the characterization of the crisis as a structural crisis of the capitalist system. So, the wrong interpretation is given that the touchstone of the problem is the Eurozone itself. Therefore, we would ask the supporters of this view: if the Euro is “the main reason why this policy has been chosen to deal with the crisis”, do they really believe that, for example, the german or french imperialism would exert a more pro-popular policy, if they had returned to the mark or the frank? The answer is: exactly the opposite! What would the german and french big capitalists have done with their capital surplus (the crisis means overaccumulation of capital and overproduction of goods), if they could not direct it, through the Eurozone mechanisms, to the usurious lending of the “periphery”? They would try to cut losses from the disintegration of the Eurozone, the fragmentation of the united market, the limitation of the inter-european trade etc. through an extreme exploitation of the german and french workers, following a course which would increase not only economic nationalism (already reinforced by the crisis), but also the threat of chauvinism and war. We cannot and must not accept such a perspective for the proletariat and the peoples of Europe!

(B) Having a wrong starting point, they are led to a second mistake, which could be proven to be a mortal trap for the working class: the opinion that the way out is to be found to a fallback of greek economy to its national scope, that an exit from the Euro would mean, in any case, an improvement of the working peoples’ position (if it is accompanied with other measures, too).

For the supporters of this view, regaining “national” sovereignty of currency will lead to an increase of exports and a productive reconstruction for the greek economy. They try to present an analogy with Argentina in 2001, which is, however, lacking base, as it existed there a completely different geopolitical environment (the broader region was going through a phase of relative development) and a considerable productive base – this last factor is especially lacking in Greece. The economic-political potentials of greek capitalism to find a way out in the global market and, more than that, to be led to a productive restoration based on an autonomous currency are at least distant and vague, if not a complete illusion. The patient, who has been fighting for his life in the intensive care of the IMF and the EU, cannot be transformed, all of a sudden, into a long distance runner… In the unlikely case that the greek bourgeoisie would seek for such a thing, the sacrifices which would be required by the proletariat and the poor strata (as in Argentina) would be literally bloody.

As a result, the exit from the Euro, while preserving the capitalist system and the bourgeois dominance, would lead the proletariat and the poor strata to a real “third-world” situation. This ascertainment is crucial, as the possibility of an expulsion of Greece from the Euro is a reality – in this sense, the working class must be prepared for the consequences.

The supporters of this view, by exorcising the ghost of the abstract, empty and false “internationalism” of the “pro-Europeans”, have been, finally, making a complementary mistake: they indirectly reproduce the reactionary utopia of a self-reliant development within national context, a result from the stalinist pseudo-theory of “socialism in only one country”. This is taking place in a period when every working person realizes that the attack is common all over Europe, so the struggles must also be common and that a victorious socialist revolution in Greece has to be relied on the solidarity of at least the european proletariat, apart from its own forces.

A denial of revolution

Within the Left, both the supporters and the opponents of the Euro, despite their seemingly diametrically opposed positions, are, in fact, converging on the most decisive point, their denial to pose the crisis as it is, as a crisis of the capitalist system. Thus, their propositions –even the exit from the Euro and the E.U.– take a secondary, almost technical character. Because in this way the real issue is bypassed: which will be the class nature of the regime that will implement one policy or the other? Will it be a capitalist regime and a bourgeois government? As a result, is it possible for the working class to hope for salvation from the crisi’s Armageddon without being prepared to fight to death for the victory of the socialist revolution, the establishment of its own power, so that the building up of a new society can begin? Is it unnecessary to remind that, in such issues, silence, evasions, vagueness about “left” or “popular” governments have led the working class to historical treasons and bloody defeats?

Thus, prominent representatives of both currents participate – jointly and from the first line – in reformist ventures such as the “Debt Audit Committee” [Note: an article on the establishement of this Committee in Greece was printed in a previous issue of Workers’ Struggle]. Their “governalism” can hardly be hidden under their “left” outfit, showing, once more, that they want to become the life jacket of the bourgeois regime in the crisis. A typical case is the flagship of this political space, the Left Block in Portugal – and it is not difficult for anyone to imagine the participation of many such “lefts” in governments, for example in France (where a lot of alliances, with the Socialist Party as well, are being cooked in the face of the presidential elections in 2012).

Finally, it is worth reminding that such opinions have been exerting an influence, more and more visibly, to the main body of the far left in Greece, not only as far as their theoretical positions are concerned, but also concerning their practice, which threatens, soon, to develop into an assimilation by reformism.

In the next issue: The position of revolutionary marxists towards the E.U.