Why Angela Merkel Is Wrong On Greece
Jürgen Habermas
The latest judgment of the European
Court of Justice (ECJ) casts a harsh light on the flawed construction of
a currency union without a political union. In the summer of 2012 all
citizens owed Mario Draghi a debt of gratitude for uttering a single
sentence that saved them from the disastrous consequences of the threat
of an immediate collapse of their currency.
By announcing the purchase if need be of
unlimited amounts of government bonds, he pulled the chestnuts out of
the fire for the Eurogroup. He had to press ahead alone because the
heads of government were incapable of acting in the common European
interest; they remained locked into their respective national interests
and frozen in a state of shock. Financial markets reacted then with
relief over a single sentence with which the head of the European
Central Bank simulated a fiscal sovereignty he did not possess. It is
still the central banks of the member states, as before, which act as
the lender of last resort.
The ECJ has not ruled out this
competence as contrary to the letter of the European Treaties; but as
a consequence of its judgment the ECB can in fact, subject to a few
restrictions, occupy the room for manoeuvre of just such a lender of
last resort. The court signed off on a rescue action that was not
entirely constitutional and the German federal constitutional court will
probably follow that judgment with some additional precisions. One is
tempted to say that the law of the European Treaties must not be
directly bent by its protectors but it can be tweaked even so in order
to iron out, on a case by case basis, the unfortunate consequences of
that flawed construction of the European Monetary Union (EMU). That flaw
– as lawyers, political scientists and economists have proven again and
again over the years – can only be rectified by a reform of the
institutions.
The case that is passed to and from
between Karlsruhe and Luxembourg shines a light on a gap in the
construction of the currency union which the ECB has filled by means of
emergency relief. But the lack of fiscal sovereignty is just one of the
many weak spots. This currency union will remain unstable as long as it
is not enhanced by a banking, fiscal and economic union. But that means
expanding the EMU into a Political Union if we want to avoid even
strengthening the present technocratic character of the EU and overtly
writing off democracy as merely decorative.
Those dramatic events of 2012 explain
why Mario Draghi is swimming against the sluggish tide of a
short-sighted, nay panic-stricken policy mix. With the change of
government in Greece he immediately piped up: “We need a quantum leap in
institutional convergence…. We must put to one side a rules-based
system for national economic policy and instead hand over more
sovereignty to common institutions.” Even if it’s not what one expects a
former Goldman Sachs banker to say, he even wanted to couple these
overdue reforms with “more democratic accountability” (Süddeutsche Zeitung, March 17, 2015).
These were the words of someone who had
learned that the wrangling behind closed doors among heads of government
only thinking of their national voter base is simply not good enough if
one wants to achieve the necessary fiscal, economic and social policy
decisions. Today, three months later, the ECB is yet again at work
buying time for incapable governments with emergency lending.
The Greek election result is a vote against humiliating misery
Because the federal German Chancellor
opted as early as May 2010 to treat investor interests as more important
than a haircut in restoring the Greek economy to health, we’re stuck in
a crisis once more. This time it’s the hole left by another
institutional deficit that emerges.
The Greek election result is the vote of
a nation that, with a significant majority, is standing up against the
humiliating as well as oppressive misery of an austerity policy imposed
upon their country. There can be no argument about the vote itself: The
population rejects the continuation of a policy whose drastic failure is
something they have experienced at first hand. Equipped with this
democratic legitimacy, the Greek government is trying to bring about a
change of policy in the Eurozone.
This brings them in Brussels right up
against the representatives of 18 other governments which justify their
rejection by coolly pointing to their own democratic mandate. You’ll
recall those first meetings when the arrogantly swaggering novices
basking in the upbeat mood of their triumph joined in grotesque battle
with the incumbent rulers acting partly like paternalistic uncles and
partly like sneering old hands: Both sides insisted parrot-like that
they enjoyed the authority given by their respective “people.”
The unintentionally comic nature of
their uniformly nation-state way of thinking brought what is lacking
unmistakably to the attention of European public opinion: a focus for a
common decision-making process among citizens across national borders
about weighty courses of political action in the core of Europe.
But the veil cast over this
institutional deficit of an empowered European Parliament based on a
European-wide system of political parties has not yet been really
shredded.
The Greek election has thrown a spanner in the works of
Brussels because here the citizens have themselves chosen a European
political alternative for which they are geared up. Elsewhere,
government representatives make such decisions as technocrats among
themselves and spare public opinion in their countries from upsetting
issues.
The compromise negotiations in Brussels really get bogged down
because both sides don’t ascribe blame for the barren nature of their
discussions on the flawed construction of the proceedings and
institutions of the EMU but on the bad behaviour
of their partner.
It’s certainly the case that we’re
dealing here with the stubborn sticking to a policy of an austerity
programme that not only runs into overwhelming criticism from
international experts but has caused barbaric costs in Greece and has
demonstrably failed here. But, in the basic conflict opposing one side
looking for a change of policy to the other obstinately refusing to
engage at all in political negotiations, a deeper asymmetry is exposed.
Let’s be quite clear about the
disgusting, nay scandalous aspect of this rejection: A compromise
collapses not because of a few billion here or there, not even because
of this or that condition, but solely because of the Greek demand to
allow a new start for the economy and a population exploited by a
corrupt elite by agreeing debt forgiveness – or an equivalent
regulation, e.g. a debt moratorium tied to growth.
Instead, the creditors insist upon the
acknowledgment of a debt mountain that the Greek economy will never be
able to overcome. Mind you, it goes without saying that a haircut is
unavoidable sooner or later. So the creditors insist with bad faith on
the formal recognition of a debt burden they know is intolerable. Until
recently, they even persisted with the literally fantastic demand for a
primary surplus of more than 4%.
This has been cut to a still
unrealistic demand for 1%; but, so far, an agreement upon which the fate
of the European Union depends has failed because of the demand from the
creditors to stick to a fiction.
The weak performance of the Greek government
Of course, the ‘donor countries’ can see
political reasons for holding onto this fiction which allow an
unpleasant decision to be put off in the short term. They fear, for
instance, a domino effect in other ‘recipient countries'; and Angela
Merkel cannot be sure of her own majority in the Bundestag. But
any wrong policy must one way or the other be revised in the light of
its counterproductive consequences. On the other hand, you can’t pin the
blame for the impasse on just one side.
I cannot judge if there’s a
well-thought-out strategy behind the tactical steps taken by the Greek
government and what is down to political necessities, to inexperience or
the incompetence of the main players. I don’t have enough knowledge
about the widespread practices and societal structures standing in the
way of potential reforms either. But it’s obvious that the House of
Wittelsbach has failed to construct a functioning state.
However that may be, such difficult
circumstances don’t explain why the Greek government itself is making it
hard for its supporters to make out any consistent line behind its
erratic behaviour. There’s no sensible effort evident for building
coalitions; one doesn’t know whether the leftist nationalists are not
clinging to a somewhat ethno-centric sense of solidarity and are only
pursuing continued membership of the Eurozone for narrow prudential
reasons – or if their views do go beyond the nation state.
The demand for a haircut as the basso continuo of
their negotiations is, either way, insufficient to arouse confidence on
the opposite side that the new government is different – that it will
act more energetically and responsibly than the clientilist governments
that it replaced. Tsipras and Syriza might have drawn up the reform
programme of a left-wing government and thus ‘showcase’ it to their
negotiating partners in Brussels and Berlin. Amartya Sen last month in
Firle, East Sussex, compared the austerity policy pushed through by the
federal German government with a medicine that contains a toxic mixture
of antibiotics and rat poison.
In complete accordance with the Nobel
Prize-winner for economics, the left-wing government might have taken on
a Keynesian segregation of the Merkel medicine and consequentially
thrown out all neoliberal impositions; but, at the same time, they would
have had to give credibility to their intentions of carrying through
the overdue modernisation of state and economy, execute a fairer form of
cross subsidies, combat corruption and tax evasion etc. Instead, it
resorted to moralising – to a blame game that worked to the advantage of
the German government in the given circumstances, enabling it to
dismiss with neo-German robustness the wholly justified complaint of
Greece about the clever way a line was drawn (under debts) in the
two-plus-four negotiations (of 1990 over German unification).
The weak performance of the Greek
government doesn’t alter the fact of a scandal that consists in
politicians in Brussels and Berlin refusing to meet their colleagues
from Athens as politicians. They indeed do look like politicians but
(until last Monday) only spoke in their economic role as creditors. This
transformation into zombies is intended to give the protracted
insolvency of a state the appearance of a non-political, civil court
proceeding.
That makes it all the easier to deny any
political co-responsibility. Our press is making fun about the act of
renaming the Troika; it is indeed like a magic trick. But, with it,
there comes the legitimate wish to see emerge the true face of the
politician behind the mask of the creditor. For only as politicians can
these people be held responsible for a fiasco that has played out in
massively ruined life-chances, in joblessness, sickness, social misery
and hopelessness.
The scandal within the scandal is constipation
Angela Merkel brought in the IMF from
the outset for her dubious rescue moves. This body is responsible for
dysfunctions in the international financial system; as therapist it
takes care of its stability and thus acts in the common interest of
investors, especially of institutional investors. As Troika members,
European institutions also coalesce with this player so that
politicians, in so far as acting in this function, can retreat into the
role of untouchable agents acting strictly according to the rules of the
IMF. This dissipation of politics into market conformity helps to
explain the chutzpah with which representatives of the federal German
government, all of them highly moral people, can deny their political
co-responsibility for the disastrous social consequences that they
nevertheless took on board as opinion leaders of the European Council
through the implementation of the neoliberal austerity programmes.
The scandal within the scandal is the
constipated manner in which the German government perceives its
leadership role. Germany is indebted for the stimulus behind the
economic recovery from which it still benefits today to the wisdom of
the creditor nations which, in the London Agreement of 1953, wrote off
around half of its debts.
But this is not about moral
embarrassment but about the political core of the matter: The political
elites in Europe should no longer hide from their voters and themselves
dodge the alternatives posed to us by an politically incomplete currency
union. It’s the citizens, not the banks, which must retain the final
say in existential questions for Europe.
As regards the post-democratic lulling
to sleep of public opinion, the switching of the press into a
therapeutic type of journalism is a contributory factor – as it marches
arm in arm with the political class in caring for the wellbeing of
customers, not citizens.
The German original of this article appeared in Süddeutsche Zeitung
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