by Emiliano Brancaccio
Syriza, the main party of the Left, lost the elections in Greece. The first real opportunity to launch a clear political message about the unsustainability of the European monetary union has thus been lost. Consequently, save surprises, the agony of the single currency is destined to endure, and with it the suffering of the peripheral countries and social groups most affected by the economic crisis.
Syriza: Why did you lose? The prevailing view is that the party presented voters with a programme that was too ‘radical.’ This programme, as is known, was based on the intention to repudiate the ‘Memorandum’ imposed by the European Commission, the ECB and the IMF and demanded the renegotiation of all agreements on debt financing in Greece.
On reflection, however, it is not evident that Syriza paid for being too ‘radical’. It’s possible that Syriza was defeated for a quite different reason, namely that the request to renegotiate the conditions of foreign borrowing was accompanied by the declaration that it wanted Greece to remain in the euro. This position, as is known, was spelled out clearly by the leader of Syriza, Alexis Tsipras, in the letter entitled ‘I will keep Greece in the eurozone’, published in the Financial Times on June 12.
The problem is that Tsipras’ position was clearly contradictory. It highlighted the inability of the leadership of Syriza to explicitly address the possible consequences of failure in the request to reschedule the debt. What would Tsipras do if Germany and the European authorities had confined themselves to propose marginal revisions to agreements and had refused to initiate a thorough renegotiation of debt?
The leader of Syriza has evaded the issue. He has refused to admit that, at that point, Greece would have been forced to confront the crisis by abandoning the single European currency and questioning, if necessary, the single market for capital and goods. Many Greek voters may have noted this ambiguity, this inability to Syriza to process a sequence of successive actions that were logically sensible and politically credible. The few points Syriza trailed behind the rival party, New Democracy, may be explained in these terms rather than any excessively radical position that will surely prevail in comments in the coming days.
The ambiguity, however, is not limited to Syriza. The appeal in Syriza’s favour promoted by Etienne Balibar and Rossana Rossanda* contained similar elements of opacity and lack of clarity. In many ways similar, the appeals of debt campaign movements have also so far failed to clarify that any unilateral any decision to repudiate the debt would lead to the problem of debts to other countries and therefore would require the abandonment of the euro and / or the restriction of the free movement of capital and goods.
And that’s not to mention the European Left, which has appeared in too many cases ready to sacrifice their constituents on the altar of unconditional loyalty to the euro and the single market and therefore can do no better than launch generic appeals for European solidarity. In short, we are faced with a further variant of the politics of liberoscambismo di sinistra (left-wing free traders) that has raged for over three decades among the more or less direct heirs of the workers’ movement, and we have tried to critically examine the book Austerity is Right-Wing. It is destroying Europe
However, regardless of Greek voters’ decisions, the current structure of European monetary union remains technically unsustainable. The gap between interest rates and growth will come back to haunt many European countries, and will certainly not be solved by minor adjustments to loan agreements or through European banking guarantees. Therefore, in the absence of significant changes in European economic policy, the final speculative attack against the euro zone may be delayed but not averted.
The question remaining is, therefore: with the Left paralyzed, who is to handle a possible collapse of the single currency?
Translation by Revolting Europe
About the Author:
Emiliano Brancaccio (Naples, Italy, 1971) is a researcher in Political economy and lecturer on Foundations of Political Economy and Labour Economics at the Faculty of Economic Sciences and Business Studies of Sannio University in Benevento. His main research interests are in the fields of comparative theories of growth and distribution, monetary theory and policy, european economic policies. He has published several academic articles, including publications in the Review of Political Economy, International Journal of Political Economy, European Journal of Economic and Social Systems, Studi Economici, Il Pensiero economico italiano and Cambridge Journal of Economics (forthcoming). He is co-editor of The global economic crisis. New perspectives in the critique of economic theory and policy (Routledge, London 2011; with G. Fontana). He has also published in books edited by Palgrave Macmillan, Feltrinelli, Il Saggiatore, among others. In 2002 he wrote the bill proposed by ATTAC for a levy on currency transactions modelled on the Tobin tax. Between 2006 and 2009 was a member of the Board of Directors of Banca Toscana, MPS group. He is also the author of articles published in various magazines and newspapers, including the Italian financial daily Il Sole 24 Ore.