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The Washington Post

Europe’s Ideologues of Austerity Stand in Way of Reforms

An anti-austerity protest in Athens on February 11, 2015. (Photo: AP/Yorgos Karahalis)

“Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world”

— William Butler Yeats

Yeats’s poem “The Second Coming” captures reality in Europe these days, although surely not in the sense the poet intended. In Germany, the popular press is captivated by the face-off of the stern German Finance Minister Wolfgang Schäuble, clad in black suit and tie and white shirt, against the “charismatic,” “heartthrob,” new Greek Finance Minister Yanis Varoufakis, bald head, dress shirt unbuttoned and untucked, scarf draped for effect. Only the appearances are deceiving. The buttoned-up Schäuble is the ideologue, with doctrine blinding him to reality. The rakish Varoufakis is the pragmatist, seeking a sensible way out of a catastrophe.

In Europe, it is the conviction of the “brightest and the best” that is loosing anarchy upon the world. In Europe, it is increasingly clear the center cannot hold. The austerity inflicted by the “Troika” — the European Union, the International Monetary Fund and the European Central Bank — on the debtor nations of southern Europe — Portugal, Ireland, Italy, Greece and Spain (dubbed the PIIGS by pundits) — has failed disastrously. Citizens in Greece, Spain and elsewhere suffer unspeakable misery to repay debts that grow ever more impossible as their economies crater.  The “responsible” center-right and center-left parties that dutifully sought to enforce the cruel dictates have been discredited. Parties that promise an end to the austerity are gaining momentum. The Greek people elected Syriza last month — a party forged out of a “coalition of the Left” of fringe Marxist parties, greens, and various social movements. Syriza’s leaders call not for revolution, but for sensible reform. Greece would stay in Europe and would repay its debts. The new government pledged to run a primary surplus but not the crippling surplus of 4.5 percent GDP as required by the Troika. Syriza also promised to do what no center party dared to do: crack down on corruption and tax avoidance of the Greek oligarchs who have plundered the country. It urged that debt repayment be made affordable, linked to the rate of growth, so that if the economy falters, the debt payments will adjust. It took steps to end the fire sale of the nation’s assets and to supply electricity and food to all.

“We are a party of the left, but what we are putting on the table is essentially the agenda of a reformist bankruptcy lawyer from the City of London,” Varoufakis says. “The bailout was not a bailout of Greece in 2010, it was a bailout of the German and French banks.”

In Spain, Podemos (“We Can”), a new and youthful party formed by members of Spain’s Occupy and anti-globalization movements along with former communists and greens, is stunning Spain’s political establishment by surging to a large lead in the run-up to the next national election this fall. Podemos, too, seeks not to break Europe apart, but to make it work for working people.

In a solidarity speech delivered at a Syriza event in October, the Podemos leader, 36-year-old political scientist Pablo Iglesias, noted that the party’s program is what any social democrat in Western Europe would have talked about 30 or 40 years ago. What does the party want? Iglesias answers sardonically, “Our aim today, unfortunately, is not the withering away of the state, or the disappearance of prisons or that Earth become paradise.” “We do aim,” he says, that all children go to public schools clean and well-fed; that all the elderly receive a pension and be taken care of in the best hospitals; that any young person . . . be able to go to college, that nobody have their heat turned off in the winter because they can’t pay their bill.” But both Syriza and Podemos are greeted as if they were barbarians sweeping in from the steppes. The German finance minister insists that rules must be followed, even if ruinous. The beatings must continue.

Why does the so-called center stand in the way of sensible reforms? Why does it require new radical parties to espouse a new deal or a social democratic solution?


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Iglesias argues that what was once a moderate program now is considered extreme because it poses a “threat to the global financial powers.” “There is a worldwide party that is much stronger than the Third International was,” he argues, and that is “ the party of Wall Street, which has functionaries everywhere.” “We are confronting a minority with a lot of power, with very few scruples.” And don’t forget, he warns, “the powerful almost never accept the results of elections when they don’t like them.”

The Troika argues that if Greece isn’t forced to adhere to the rules, it will just return to its dissolute ways. But, as Nobel Prize-winning economist Joseph Stiglitz notes, this again turns reality upside down. “Does anyone in their right mind think that any country would willingly put itself through what Greece has gone through, just to get a free ride from its creditors? If there is a moral hazard, it is on the part of the lenders — especially in the private sector — who have been bailed out repeatedly.”

The debate in Europe poses a clear and present threat to Americans. If the ideologues of the center win, they could force Greece out of the eurozone, threatening financial markets. If they continue to drive Europe back toward recession or worse, the U.S. economy will feel the downdrafts.

In the United States, the debate about austerity also rages, with Republicans virtually united in calling for tighter fiscal and monetary policies that would cripple an already halting recovery. President Obama has sided with Syriza rhetorically, as its case is similar to the one he makes at home.

This week, the showdown between Syriza and the Troika will play out in meetings of European finance ministers and of the European Central Bank’s governing board. Most assume that some kind of short-term agreement will be cobbled together to buy time. 

The Troika apparently believes that Syriza will sober up as the pressure builds. But time is not on the Troika’s side. Across Europe, more and more people and parties are revolting against an establishment that seems intent on destroying Europe in order to save it. The ideologues of the center have the power to crater the Greek banks and force Greece out of the eurozone. But the beatings cannot continue for long. If the common sense of the so-called radicals fails to reverse the current policies, far more ominous, nationalist, racialist, right-wing forces are gathering in the wings.

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Katrina vanden Heuvel

Katrina vanden Heuvel

Katrina vanden Heuvel is an American editor and publisher. She is the editor, publisher, and part-owner of the magazine The Nation. She has been the magazine's editor since 1995.


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