The Divisive Euro: National Struggles and International Solidarity

If people across southern Europe and other “periphery” countries were to join forces against the current version of the European integration project, the divisive euro could be (or at least start to be) dismantled. (Photo: Sinking Euro via Shutterstock; Edited: LW / TO)

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The euro, and the policies and institutions that keep it in place, have had a deeply divisive and destructive impact on Europe. This is in stark contrast to the rhetoric often used by the political elites of the European Union (EU), according to which the common currency is needed in order to promote and enhance peaceful cooperation in Europe.

The divisive impact of the euro has unfolded in a variety of ways. By taking monetary policy away from national states, by rigidifying the currency exchange system, and by adopting policies that primarily favor the economy and financial sectors of the economically stronger countries, the common currency has amplified the gap between the economically weaker countries (such as Greece, Spain etc.) and the economically stronger countries (especially Germany). This has resulted in the destruction of industrial and economic capacity and in very high levels of unemployment in the weaker countries, making them even weaker.

The eurozone arrangements have primarily advantaged the financial and industrial elites of the stronger countries. Especially before the 2008 crisis, these elites have been able to profit from lending money to the banks of the weaker countries, thereby financing the consumption of goods produced by their own companies. These elites have been able to tap into the vast repository of skilled, unemployed workers in the economically weaker countries. They have also been able to buy some of the precious industrial assets of these countries for a low price.

The 2008 crisis laid bare some of the problems of this divisive model and provided an opportunity to dismantle it. However, the response to the crisis has been even more divisive. When the financial crisis kicked in, a variety of measures were taken by the European Central Bank (ECB) and other EU institutions in order to save the European banking system and the common currency. These measures transformed what was essentially a problem for banks and financial firms in economically stronger countries – which, in the search for higher profits, had taken on excessive risks by lending enormous sums of money with low interest rates to the banks, governments and consumers of the economically weaker countries – into a problem for the European taxpayers, pitting citizens of different countries against one another.

The Greek case is particularly stark and dramatic: In 2010, the Greek state was forced to borrow money from the ECB, and thereby from the taxpayers of other eurozone countries, in order to primarily save the Greek banks. The collapse of these banks would have caused the collapse of those (mainly northern European) banks that had lent unwisely to the Greek banks, which in turn would have caused the collapse of the common currency. As a result of this, the Greek taxpayers now have debts toward the taxpayers of other eurozone countries, debts that they did not have before the crisis started. In order to save the eurozone, Greece has been turned into a debt colony, and within the current political European framework it has virtually no room to fight the debt bondage that has been imposed on it. This is a debt bondage that is devastating its economy and more generally its society. Unless something is done, it is likely to continue to do so for generations.

Saving the European banking system might have been justified, but the way it was done, and the rhetoric used to defend what was done, was not justified. The European institutions presented the bailouts as an action required to solve a problem caused by ordinary people in weaker countries “living beyond their means.” This involved hiding the mechanisms through which the cheap credit offered to governments and consumers in these countries had benefited the economies of the stronger countries. It also involved hiding the ways in which the bailouts protected the interests of financial institutions (and the ultra-rich) and the ways the bailouts were detrimental to the interests of ordinary people across Europe.

The divisive impact of the euro does not have an economic side only; it also has a social and cultural side. Anti-Greek feelings are now widespread in Germany and in other eurozone countries. The EU elites fostered such feelings in order to hide the fact that the Greek bailout was needed to save the banks of the economically stronger countries, and to hide the fact that the loans of banks in northern countries to southern countries benefited the German economy.

The EU elites have blamed the eurozone crisis on the Greek state, based on what they see as its inefficiency and corruption, and more generally based on the shortcomings of southern European economic systems. It is not surprising that this kind of rhetoric has given rise to the re-emergence in public discourse of the old northern European stereotype according to which southern Europeans, and Greeks in particular, are lazy, prone to corruption and anthropologically inferior. The shocking campaign that sees Greeks characterized as “greedy” on the front page of the Bild, the German newspaper with the highest circulation, is just one of the latest symptoms of how the euro has managed to revive old and dangerous divisions.

The purpose of this campaign was to oppose the renewal of the Greek bailout program, a renewal that the newly elected Greek government was forced to accept because the ECB threatened to let the Greek banking system collapse. This renewal meant that Syriza, the governing party in Greece, had to repudiate or postpone many of the promises contained in its electoral manifesto, including the call for a European conference on debt, the immediate suspension of austerity policies – which in the Greek case means running economically destructive primary budget surpluses in order to repay its debts – and the reversal of so-called “structural reforms” that advance the interests of large corporations.

Despite what many saw as a capitulation of Syriza to German interests, Bild and many of its readers saw the deal as an act of unwarranted generosity toward the morally corrupt and undeserving Greeks. The EU elites bear the responsibility for these new forms of racism that are emerging. In this way, they may have evoked destructive forces that might prove difficult to keep at bay.

Michael Pettis recently claimed, “European nationalists have successfully convinced us, against all logic, that the European crisis is a conflict among nations, and not among economic sectors.” He is right in claiming that the euro crisis is the battlefield of a class conflict, but it is not the European nationalists who are trying to deceive us into thinking that the current conflict is one among national states. Rather, it is the EU elites that, while trying to conceal the class conflict, are irresponsibly transforming the crisis into a national conflict.

The euro has been used to implement policies that go against the interests of ordinary people in every eurozone country, including Germany. In the last few decades, German rulers (both of the center-left and center-right, and without much opposition from the trade unions) have been able to pass anti-labor legislation, resulting in wage stagnation. Moreover, through the rigidities generated by the common currency, they have been able to export their policies to other countries by pursuing a beggar-thy-neighbor strategy. In the economically weaker countries, the domestic elites have taken advantage of the vincolo esterno (the external constraint generated by German policies and by the German-dominated EU monetary policy) to “squeeze” workers and small businesses in their own countries.

For this reason, the vast majority of ordinary people in all countries of the eurozone have something important in common: It is in their common interest to oppose the oppressive system that the euro keeps in place; and, because of this, there is an urgent and desperate need for European solidarity among ordinary people, and in opposition to the EU political elites and to the financial powers whose interests the EU elites have served so far.

Some commentators have argued that the eurozone crisis can be resolved by means of fiscal transfers from those countries that are benefiting from the common currency to those countries that are not benefiting from the crisis. This is what they mean by European solidarity. But the situation in Germany and other creditor countries shows that fiscal transfers of this sort are not politically feasible at the moment, because electorates would reject them. Moreover, even if they were politically feasible, it is not clear that such transfers would stop the economic and social destruction that is occurring in Greece and in other debtor countries as a result of common currency policies.

This is not the kind of solidarity Europeans need. The solidarity they need is the solidarity of the oppressed against the oppressors or, in this case, the solidarity of the victims of the eurozone against the EU elites and those whose interests are served by them. However, talking about European solidarity in abstract terms is not very helpful. Solidarity needs to be built concretely, among the people, on the terrain of struggle. At the moment, the European terrain of struggle is one that the actions of the EU political elites have managed to divide, at least in part, along national lines. For this reason, at this stage of the struggle, local and national solidarity are very important tools of struggle. The Greek example is, again, instructive.

In the last few years, many spontaneous solidarity initiatives have emerged in Greece. For example, there have been solidarity initiatives trying to deal with the collapse of the health-care system, others trying to deal with the distribution of food to those segments of the population that do not have enough to eat, and so on. These initiatives are often constructed bottom-up, in opposition to top-down interventions, such as intrusive government programs or charity initiatives by nongovernmental organizations. Moreover, these initiatives often have a political and social dimension, in that they try to provide spaces for rebuilding social bonds and for collective discussions on how to deal with the current situation. Taking inspiration from these initiatives, and possibly helped by the anti-Greek sentiments expressed on a daily basis by the media in economically stronger countries, Syriza activists and leaders have started using national-popular and patriotic discourse, as pointed out by Stathis Kouvelakis, who contrasts national-popular discourse to exclusionary nationalistic discourse. Interestingly, the Greek flag can always be seen at the public meetings at which the crowds protest against the EU elites.

Some critics of EU policies are worried by this talk of national solidarity and by the suggestion that Greece and other southern European countries should exit the eurozone and regain national sovereignty over monetary, fiscal and economic matters. The critics see tools of national sovereignty as dangerous, or at best useless, tools that can never be deployed in favor of the oppressed. They sometimes equate national-popular and patriotic discourse with nationalism of the worst kind and with the racism that goes with it. But, for emancipatory reasons, it is important to resist this equation.

Alberto Bagnai, a prominent anti-euro Italian economist, is fond of saying that “we need to leave internationalism to those who can afford it.” In a sense, he is absolutely right. The transnational dimension of political control is one liked by corporations and the political elites that serve their interests. The reason for this is that it is a dimension that corporations and elites can easily manipulate and use to their own advantage. In contrast, those who do not belong to the elites have difficulty accessing this dimension and can only have an impact on it through unreliable intermediaries, mainly regulators and elected representatives who can be easily “captured” by the economic elites. As the business magnate Warren Buffett points out, “There’s been class warfare going on in the last 20 years, and my class has won.” That class is the class of the ultra-rich, who comfortably inhabit the international dimension, that dimension in which the members of the economic and political elites exercise solidarity toward each other in opposition to the demands and interests of ordinary people.

Karl Marx once said: “The unification and brotherhood of nations is a phrase on the lips of all parties today, especially those of bourgeois free traders. A certain kind of brotherhood does of course exist among the bourgeois classes of all nations. It is the brotherhood of the oppressors against the oppressed, of the exploiters against the exploited.” What Marx said about the 19th century “bourgeois classes” is true nowadays of economic elites and of the political and bureaucratic elites that serve their interests. The internationalist ideals of peace and cooperation have been used misleadingly by pro-EU politicians to provide moral credentials to the particular version of the project of European integration that they prefer, and to hide the oppression and the risks of division that the project always carried with it. That kind of internationalism is certainly one that ordinary people cannot afford and should not accept.

Many Greek people probably feel that local and national solidarity are among the very few tools they have to protect themselves against the actions of the EU elites and the creditors. This feeling is justified. But in order to be properly emancipatory, patriotic discourse, as well as the very idea of local and national solidarity, must be articulated in non-exclusionary, and thereby non-racist, terms. They must be articulated in ways compatible with the proper use of the internationalist ideals of solidarity among the oppressed. They must be articulated on the basis of an inclusionary view of the people, one that is not hostile to immigrants and minorities in general.

The national context – if used in non-exclusionary ways – is currently an important terrain of struggle in order to fight against the brutal and oppressive policies of the EU. These policies are negatively affecting not only ordinary Greek citizens, and not only ordinary people in other southern European countries, but also German workers, whose wages have been stagnant for decades. However, to paraphrase Friedrich Engels, it looks like the liberation of German workers cannot take place without the liberation of Greece – and of the other “periphery” countries of the eurozone – from the oppression of the German and EU economic and political elites.

Even more sanguine than Marx and Engels about the emancipatory potential of national liberation struggles was their contemporary, Giuseppe Mazzini – the Italian revolutionary who argued that using the national terrain of struggle does not necessarily lead to exclusionary and bellicose nationalism and is in fact an important and necessary step toward the pursuit of international solidarity. Some of Mazzini’s ideas were later used by Benito Mussolini to justify oppressive anti-labor measures and an authoritarian and totalitarian vision of society.

This clearly illustrates the potential ambiguity of any form of appeal to national solidarity, and the risks it carries with it. It is, however, an ambiguity shared by other solidarity appeals: After all, the EU elites have used appeals to peaceful cooperation in Europe to confer legitimacy to an oppressive and divisive system. Appeals to national solidarity can be emancipatory and inclusionary, or they can be oppressive, exclusionary and racist. It depends on how they are articulated and used – or misused. The same is true of appeals to European unity, as shown by the way the European integration project has been carried out.

Exclusionary, nationalistic language is often used by some members and activists of right-wing, anti-EU parties. This is unsurprising given the divisive policies of the EU elites. But this is not a reason for left-wing parties and activists to disdainfully reject any kind of patriotic appeals to national solidarity. Rather, it is a strong reason for everyone to try to articulate these appeals, and similar kinds of solidarity appeals, in inclusionary terms. Conflating national-popular discourse and exclusionary discourse plays into the hands of the anti-democratic and anti-labor internationalism of the EU elites, as well as into the hands of various racist, authoritarian and warmongering forces that are present both in Europe and around the world. This conflation needs to be reversed.

Even if Mazzini’s over-optimistic views on the possibility and political necessity of a “good nationalism” are in the end to be rejected, it can be argued that nowadays the national terrain in Europe can – at least contingently – be useful for forging ties of solidarity among the oppressed, and in this way it can help the proper internationalist ideals to re-emerge. It must be acknowledged that it can be difficult to articulate national-popular discourse in non-exclusionary ways and to ensure that such discourse is not hijacked by racists. Any kind of emancipatory struggle poses risks and can backfire.

National struggles do not have any intrinsic advantage over other forms of emancipatory struggle, nor do national identities have any priority over other self-ascribed identities when it comes to the political empowerment of the people. But, for a variety of reasons, the national terrain offers emancipatory opportunities that should not be forgone.

These reasons include the linguistic and cultural commonalities that make it easier to create bonds of solidarity and to organize the struggle, but they also include the contingent ways in which the oppressed come to recognize having a common interest in fighting their oppressors. Nowadays, it is easier for the Greek unemployed to convince other Greek people that liberation from the chains of the eurozone is needed than it is for the Greek unemployed to convince German workers that they also need such liberation. The appeal to national solidarity must be evaluated in light of the details of the current context, and in light of the current balance of economic and ideological power within Europe.

Ensuring that the mistakes committed in Europe in the first half of the 20th century are not repeated is of the utmost importance. At the same time, it is also important to be able to appeal to the local, national and international solidarity of the oppressed against the oppressors in order to fight policies that are causing economic and social devastation across Europe.

As shown by recent events, Greece is extremely vulnerable, both politically and economically, and thereby unlikely to be able to break the oppressive chains of the eurozone by itself. If people across southern Europe and other “periphery” countries (such as Ireland) were to join forces against the current version of the European integration project, the divisive euro could be (or at least start to be) dismantled. However, until the anti-austerity rage is mediated by pro-euro forces and parties that think that the eurozone can be reformed “from within,” nothing is likely to happen. As long as they are articulated in solidaristic, non-racist and more generally non-exclusionary ways, anti-EU and national-popular discourse and mobilizations in Spain, France and Italy – which are much less vulnerable than Greece – can be a crucial resource in breaking the chains of the eurozone and in rescuing genuine European and internationalist solidarity from the divisive actions and projects of the EU elites.