Posted 5 years ago on Feb. 16, 2012, 12:41 p.m. EST by flip
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anyone can see from reading the debate that a range of alternatives exists. Yet every EU member state government has chosen, to one degree or another, the path of austerity. The question therefore is why? And for me, this is the real issue raised by this crisis. In the late 90s I was active in the campaign to stop the introduction of the euro. If you look at what I was saying, as well as material put out by Tom Megahy, the Labour Euro-MP for whom I worked until his retirement in 1999, or the Dutch Socialist Party, which I worked for after that, you’ll see that our predictions for what would be the single currency’s results were uncannily accurate.
Now I can’t really believe that all of those highly-qualified economists who advise the Commission and the ECB were simply too stupid to see what was obvious to our side of the argument. From this I can only conclude that they knew what would happen as well as we did, but saw this not as something to be avoided, but as an opportunity to complete the work of the neoliberal ascendancy. Austerity in this scenario is not something forced upon the political elite by previous mistakes or bad luck, but rather the latest stage in a plan to transform the European economy by destroying the welfare state – or at best reducing it to a US-style ‘safety net’ – and removing any real powers over the economy from parliamentary democratic institutions and thus from the people.Two final points. Firstly, Greece is Europe’s biggest arms importer. Secondly, there are Neo-Nazis in its government (editor's note: this interview took place before the recent exit of the LAOS ministers, to whom McGiffen is referring here, from the Greek government). I actually had the chance to confront a member of the European Commission, an old acquaintance of mine, as to why nothing had been said by Council or Commission on these matters, and he said that it was because the media had ignored them. This begs the question as to why that was the case, of course, as well as revealing the corporate media-driven nature of our decision-making process. Clearly Greece, a country with no enemies and no money, should not be continuing to spend billions on armaments. Clearly also, rabid anti-Semites for whom almost nobody votes should not be in government, especially when you consider that PASOK and New Democracy have a parliamentary majority without them. Even though I think the coups-d’état organised by the EU authorities and the IMF in Greece and Italy were an outrage, now that they are done deals I feel that this is a point that ought to be given more publicity.
Can you expand on your comments about the problems built into the euro project from the outset and how they are reflected now?
Although I’m not, as I say above, an economist, when the euro was about to be brought in I met, discussed and campaigned with numerous economists who confirmed what I suspected was the case, that the single currency as planned was completely unworkable and would lead to economic catastrophe. One of these was Ewout Irrgang, who had been recruited direct from the Netherlands National Bank as an adviser to the Socialist Party and who is now an MP and the party’s principle spokesperson on financial matters. And he confirmed that the major problem would be the imposition of a single monetary policy under a single European central bank operating a single rate of interest. Now this even causes problems in a relatively homogenous currency area such as the UK, where although there are big regional differences in income and wealth – I believe the richest region is the South East of England while the poorest is Northern Ireland – these are nothing compared to those which would separate the richest from the poorest in the proposed eurozone. We used to employ an analogy of a thermostat controlled by the temperature in a temperate region such as Brittany. You’d freeze in Finland and roast in Crete. As Irrgang put it at the time “in all of these extremely different economies the stove will be stoked to the same level of heat and the temperature will be determined undemocratically and adjusted to the situation in the biggest countries, Germany, France and Italy. That will create irrevocable problems, problems which will be scarcely solvable.”
In the last few years of the last century I wrote a number of articles for my then employer, Tom Megahy, which we kicked around together and he approved, that hammered away at a number of arguments. These remain at the core of any critique of the euro which takes the single currency project on its own terms and attacks it from that point of view. To rehearse the main points, Tom and I argued the following:
If governments and national banks give up the economic leverage they gain from an ability to determine their own levels of spending and borrowing, if they can no longer decide interest or exchange rates, they will have only one means left to maintain or enhance competitiveness: our wages, our pensions, our welfare rights, our children’s education, will all have to cost less – this is of course what has since been called ‘internal devaluation’; the single currency would deprive governments of vital tools they need to address immediate and long-term economic difficulties; it would create unemployment in countries and regions deemed to be “uncompetitive” and put downward pressure on wages and working conditions, as such areas attempt to regain “competitiveness”; it would undermine social security and welfare systems; it would hand control over vital economic decisions to unelected bankers.
These predictions have of course been borne out since 2008, as the banks and their obedient servants in governments and in Brussels have dragged the whole of Europe into an unprecedented economic crisis.
Where I differ from much progressive criticism of the euro is that I actually see what is happening not as proof of massive incompetence – though some of those involved clearly have simply been led to a very misguided view of economic reality, in general by a combination of their own naivety and the mendacity of others – but as, in fact, a tremendous success, though one which puts its perpetrators at enormous risk. The euro’s purpose was not to facilitate the creation of a Europe of transfrontier love, peace, harmony, boosted trade and economic efficiency, but to attack the economic, social and political gains of working people, accumulated over two centuries in the most bitter struggles. What is happening in country after country, starkest of all in Greece, Ireland and Portugal, but also – just as visibly to anyone who is paying attention - in Britain, is nothing less than the opening salvoes of a new, more intense and more dangerous phase of class war.
So there are two ways of answering this question. The first is to take the euro’s supporters’ own explanations of what they were trying to achieve, and along with progressive but essentially bourgeois economists – in the sense that they don’t really question capitalism per se – say, ‘wow, guys, you really screwed up’; and the other is to congratulate the enemy generals on a pretty good opening to their campaign and see what we can do to counter it. And of course all we can do to counter it is organise, on every possible front, and get out and explain to people what’s really going on and discuss with them how we can fight it. The trouble with the class war is that there is so often only one side that understands that it’s being fought, and that’s what we have to change.