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Maria Margaronis | The Nation

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Maria Margaronis

Maria Margaronis

Politics and culture, news and views from Europe.

The Day After: Europe Rejects Austerity


Supporters of France’s newly elected President François Hollande react after the early results during a victory rally at Place de la Bastille in Paris May 6, 2012. France voted in elections on Sunday and Hollande becomes the nation’s first Socialist president in seventeen years. Reuters/Charles Platiau

So the voters have voted—in Britain, in France, in Greece, in Schleswig-Holstein—and the markets are tumbling. In Britain, the Tories took a serious beating from Labour in local elections, though Ken Livingston lost in London to Mayor Boris Johnson; their Liberal Democrat coalition partners were more or less wiped out. France has elected a socialist president for the first time since 1981 (though, as I recall, that one didn’t turn out so well); François Hollande has pledged to challenge European austerity and renegotiate the German-driven fiscal treaty that has effectively outlawed Keynesianism on the continent. Schleswig-Holstein dealt a blow to Angela Merkel’s ruling CDU and elected members of the Pirate Party to its regional assembly. And Greece has voted loudly, if incoherently, against the austerity program imposed by the EU and IMF. Across Europe, it’s no to austerity, and yes to—what?

European voters everywhere are turning against the elites that have managed most of the continent for the last few decades. The financial crisis has broken the illusion of stability; the cracks in the concrete of the Eurozone are gaping. As I wrote here on Friday, the voices being raised against austerity come from the far right as well as the left. Yesterday Greece became the first European country to elect neo-Nazis—twenty-one members of the racist Golden Dawn party—to its parliament. Their leader, Nikolaos Michaloliakos, dedicated his victory to “the brave boys in the black shirts”; some candidates used the rising phoenix, emblem of the colonels’ junta of 1967 to 1974, as their election poster. “Those who slander us,” he barked, and “those who betray this country should be afraid: we’re coming.” Golden Dawn won votes across much of the country—and not just in the inner cities, where its supporters stage pogroms against immigrants and woo old ladies with offers to escort them to the cash machine. It also got the votes of one in ten young people. If you add that vote to those of the other two far-right parties, Laos and Panos Kammenos’ Independent Greeks, then one in five Greeks voted for rabid nationalism and anti-immigrant rhetoric.

I’ve tried to explain the rise of Golden Dawn in my piece for the Guardian today—and also the success of Alexis Tsipras’s Syriza, the Coalition of the Radical Left. Syriza was the breakthrough party of the Greek election, taking all of the greater Athens region and central Thessaloniki and coming in second—ahead of the discredited socialist Pasok—overall. The charismatic Tsipras managed to articulate a very basic program—opposition to the EU/IMF measures, redistribution of wealth, a restoration of welfare rights—that much of the broad left opposition to austerity could sign up to; he’s also the man who figured out how to speak to the people in the streets. “We are the many, they are the few,” goes one of Syriza’s slogans; “They decide without us, we proceed without them,” goes another.

Greeks who remember the ’80s and the speeches of Pasosk’s founder, Andreas Papandreou, find much in Tsipras to remind them of that master rabble-rouser. Although he swears he’s for “the people,” not “the state,” he has refused to talk about the reform of Greece’s creaking bureaucracy, or about how exactly he plans to save the economy, beyond taxing the rich and calling the Europeans’ bluff on ejecting Greece from the Eurozone. But at moment like this, populism can be (very briefly) useful, as well as seductive and dangerous. Set beside Hollande’s victory in France, Tsipras’s success has helped drive home the message that Europeans have had it with austerity. Both elections were referendums on European economic strategy; both roundly rejected it. The German finance minister issued a shameful threat to the Greeks the day before the vote, saying that they must honor their commitments or “take the consequences.” It isn’t clear yet what those consequences will be; but then, what we’ve got now clearly isn’t working either. In the long battle between the markets and democracy, it’s one to democracy, with all its flaws and pitfalls. No one said it would be easy.

Voting in the Dark: Greece Goes to the Polls

How do you hold an election in a country that has lost its sovereignty, its sense of its own past and its imagined future? What promises can discredited politicians sell, in the fifth year of recession, to people whose wages have vanished or plummeted by a third, pensioners living on less than 300 euros a month, a younger generation facing one job between two?

Greece goes to the polls on Sunday, the same day as France, which is predicted to elect a Socialist president who has vowed to renegotiate the German austerity-driven European fiscal compact. If Hollande, in partnership with Spain and Italy, can add weight to the growing consensus against austerity, the French election may turn out to matter more for Greeks than their own. The economic crisis has exposed a crisis of representation: even the control nation states used to imagine they had over their own affairs has been sacrificed to the power of the financial markets. At the same time, in Greece, the collapse has completely discredited the two mainstream parties that have alternated in power since the colonels’ dictatorship fell in 1974—the center-left Pasok and the center-right New Democracy—laying bare the corruption and stagnation of the whole clientelist system. In Greek, “thief” is almost a synonym now for “politician.”

This is partly a local phenomenon, a consequence of the particular deformations of Greek politics, but it’s also part of a wider European pattern. From the Netherlands to France to Portugal people are losing faith in the old political elites, who have failed to protect democracy, hard-won rights and basic solvency from the financial markets and the impact of globalization. In the strange, shifting landscape of the Greek election campaign, in which thirty-two parties are running and nine or ten are expected to enter parliament, the deepest rift has opened not between left and right but between pro- and anti-Memorandum forces—between those committed to the EU/IMF bailout program and the Eurozone at any cost, and those prepared to take a leap of faith into an uncertain future, betting against the continuation of austerity politics and perhaps of the euro itself.

In Greece, as elsewhere (France, the Netherlands, Italy, Finland, even Britain) the anti-austerity camp includes the nationalist far right. This Sunday the neo-Nazi Golden Dawn—which escorts old ladies to cash machine and beats up immigrants, which sells protection to shopkeepers and harbours Holocaust deniers, whose symbol is the ancient Greek meander, shaped rather like a swastika, in black on a red ground—is almost certain to win seats, for the first time, in parliament. New Democracy’s leader, Antonis Samaras, has pandered shamelessly to the far right’s supporters: if he can’t win their votes, he may well need their parties (Golden Dawn, the Popular Orthodox Rally and the new Independent Greeks, led by a former New Democracy politican who thinks Greece should look to Vladimir Putin for salvation) to prop up a minority government. His rallies have been a sea of blue and white Greek flags (the same flags that were waved by some of the aganaktismenoi in Syntagma last summer before the anti-austerity movement started to fragment); he has vowed to protect the church and religious education as the core of Greek identity and to repeal a law giving citizenship rights to the children of legal immigrants. One of his campaign ads features Aghia Sophia in Istanbul, the lost heart of Byzantium and symbol of Greek irredentism, with its Ottoman minarets conveniently cropped away.

But populist nationalism is not confined to the right. At least since the rule of the first Pasok prime minister, Andreas Papandreou, in the 1980s, parts of the Greek left have had a strong nationalist streak, rooted in the anti-imperialist opposition to the CIA-backed junta and to decades of cold war meddling in Greek politics. Now, with Greece’s sovereignty once again hemmed in by foreign powers, those buttons are easy to push, and make for strange bedfellows. Politicians of all stripes reach for ugly metaphors of disease and war. In April Pasok ministers called the migrants in Athens a “hygenic time bomb” and began turning military bases into detention centers. A Russian prostitute who tested HIV-positive was locked up on criminal charges and had her picture plastered all over the media; when several Greek hookers were also found to be carriers, the immigration panic morphed into a moral one. Half the worried johns who called a public helpline turned out to be—shock, horror—married men, carrying infection into the heart of the “Greek family.”

Alexis Tsipras, the young leader of Syriza, the Coalition of the Radical Left, also plays the nationalist card (though he has never stooped to anti-immigrant rhetoric) and explicitly claims the mantle of the old populist PASOK—which is why, despite his recent embrace by the US media as a possible king-maker, I can’t bring myself to trust him. Together the three left parties in Greece—the neo-Stalinist KKE, the social democratic DIMAR and the hybrid Syriza—have polled at 37 percent. (There is also the Green Ecology party, perhaps the only one to take a truly global view, which is also likely to win its first seats in parliament.) Though pigs would fly before the KKE cooperates with any other party, and Dimar split from Syriza in 2007, Tsipras has made repeated overtures towards a coalition; some on the left have hailed this as the promise of a new dawn. Pasok leader Evangelos Venizelos launched a full frontal attack on him today, a sure sign he’s becoming a significant threat.

Tsipras has said that his first act if elected would be to cancel the EU/IMF memorandum and, “with the people backing us on the streets,” tell the European Commission that the Greeks demand a policy of redistribution and growth; otherwise Spain and Italy will follow Greece into despair, leading to the inevitable breakup of the Eurozone. The old liberal politicians are horrified by his nods to Chávez and Allende and his cheerful embrace of the masses on the streets, as are the reformers gathered in Dimar and in one or two small pro-European “modernizing” parties. I admire his chutzpah—someone should have taken such a stand many moons ago—and envy his certainty, but I can’t help feeling that it’s not going to be that simple. Without a wider European shift away from austerity and democratic reform of Greece’s political culture and economy (along lines which have hardly begun to be discussed), there’s no way out of this labyrinth for many years to come.

For Europe as a whole though, perhaps the most important fact about the Greek election is that almost all the candidates see support for austerity as political suicide. Samaras has promised to renegotiate some of the terms of the bailout and to halve unemployment in three years; even Venizelos has vowed to bring Greece “out of the memorandum” in the same period while slowing the pace of reform. The old parties reach deep and will die hard, but the air is crackling with rage against the politicians who drove the country’s economy into the ground, called in the IMF and let the heaviest blows fall on the most vulnerable. How Greeks will vote on Sunday remains an open question. The likeliest outcome is an inconclusive vote, followed by days or weeks of tortuous negotiations. What happens after that depends to some extent on what happens elsewhere Europe. But the opposite is also true: coupled with the election of Hollande in France, a strong anti-austerity vote in Greece may well push the Eurocrisis round another corner. There is no way to know what’s waiting for us there: the maiden or the minotaur, a new commitment to growth, solidarity and investment or a convulsive break-up of the Eurozone.

Athens Burning

When I was in Athens last week many people I talked to wondered aloud why there hadn’t yet been an uprising against the austerity measures that are devastating the country. There was anger everywhere, but sullen and suppressed. Maybe there’s still some fat left in the system, they said. Maybe they’ve just brainwashed us, put us all to sleep. I took a taxi one day when the subway wasn’t working because of a suicide; the driver opined that the deceased was clearly an idiot. “He should have killed himself in Parliament,” he scoffed, “and taken five or six of those idiots down with him.”

Well, now there has been an uprising of sorts, but it doesn’t feel any better. More—perhaps many more—than 100,000 people turned out on Sunday afternoon to protest the new austerity package being voted through parliament to secure a further 130 billion euro loan; the riot police used tear gas to clear them from Syntagma Square, out of sight of the TV cameras perched on the balconies of the grand hotels. In the side streets there were running battles between police and hooded protesters, tear gas and truncheons and boots against firebombs and Molotov cocktails and flying marble shards. Some forty-five buildings blazed, not only banks but some of the neoclassical beauties that have stood through fifty years of rampant development. Better buildings than people. Amazingly, no one died and only 100 (officially) were injured. But a weapons shop on Omonoia Square was broken into and looted. I passed it last week and wondered at the racks of guns and scimitars openly on display.

Following the Twitter feeds from Syntagma last night, I read that 20,000 people were singing all together and wished that I could be there, in spite of the flames and tear gas, to feel the lift of the crowd. But this morning I spoke to a friend in Athens who was out on the streets last night and reality returned. She told me she’d met many people she knew and all of them felt alone. “We don’t know what to believe in, what to think any more,” she said. “It’s as if the violence is meant to make us feel more defeated and more powerless, to warn us that we can’t even begin to lift our heads.”

Greece now feels like a labyrinth with all the exits blocked. The new austerity program, which includes a 22 percent cut to the minimum wage (32 percent for the young) and 150,000 public sector losses cuts by 2016, will further sink an already devastated economy. Unemployment is above 20 percent (near 50 percent for the young); manufacturing output fell by 11 percent in a month; tax revenues are down 18 percent since last year; 60,000 businesses have closed since the summer. If you ask people on the street if they would rather Greece went bankrupt than accept further “measures,” they point out that Greece is already bankrupt; that many public sector workers haven’t been paid in months; that hospitals have no bandages and schools are short of books; that the poor are being wrung dry to pay the banks. If the new loan comes through—and those who decide these things in Brussels and Berlin don’t seem at all sure that it will, even after last night’s vote—up to 70 percent of it will go to pay Greece’s creditors. More and more voices—from IMF officials to Italy’s Mario Monti to countless economists—are joining the chorus of those who admit that the program will not work. (For more, please see my piece on the Guardian’s site today.) Meanwhile democracy is indefinitely suspended: though elections are now planned for April, all party leaders have to sign up in writing to the new loan agreement before anything changes hands.

For a long time I thought default would be a terrible mistake. I was irritated by glib comparisons with Argentina, which defaulted in a boom time with far greater resources, and where people still went hungry. I thought about the shelves of Athenian supermarkets, stacked with foreign products; about oil and energy and the run on the banks; about the violence that erupts when there isn’t enough to go round. But many companies are already refusing to export to Greece because they think they won’t get paid; the only country that will sell Greece oil on credit is Iran, which is shortly to face an embargo; and last night Athens went spectacularly up in flames.

I still think default would be terrible. But the only alternative path on offer is also terrible; and default still waits at the end.

European Summit: German Austerity Blues

Nein! Nein! Nein!” roars today’s headline on Ta Nea, Greece’s largest circulation daily, over a caricature of Angela Merkel controlling a map of Greece with puppet strings. This is not just the usual Greek rage against the EU’s austerity measures: Last Friday the Financial Times made public a German proposal to take over Greece’s finances so extreme as to look like parody. In order to receive the next tranche of its bailout, the document explains, Greece would have to agree a “transfer of national budgetary sovereignty” to a European commissar, “preferably through constitutional amendment,” making an absolute commitment to service its debt before spending public funds on anything else

Merkel has since backed off from the document, but whoever leaked it obviously wasn’t aiming at a warm, candle-lit atmostphere between Greece and Germany at the ongoing negotiations for a write-down of Greece’s private sector debt, or at today’s European summit in Brussels (where there’s also a general strike in progress against austerity measures). Once again, the Greek crisis is at the heart of the talks, though it’s not on the published agenda. The official business on the table includes the new European fiscal compact, due to be signed in March, which would punish states that exceed fixed deficit and debt levels and has been described by one official as a plan to outlaw Keynesianism; and measures to promote growth and create jobs, especially for the young, who are now being tagged as a “lost generation.”

If that sounds a bit schizophrenic, that’s because it is: the tensions at the heart of the Eurozone, between German-style take-no-prisoners fiscal discipline and a more growth-oriented Gallic approach, are being pulled to breaking point. Germany, as Europe’s engine, still holds most of the cards. But with all the southern countries now in crisis (the bond markets are dropping Portugal; Spanish unemployment is at 22 percent, and 51 percent for the young; Italy will be in recession at least until the end of 2013 even though Mario Monti’s cuts have made him the darling of the Eurocrats; Greece’s economy is in meltdown), it’s become obvious to almost everyone else that austerity isn’t working. Financiers tend to speak softly: when IMF chief Christine Lagarde acknowledged earlier this month that austerity “could strangle growth prospects”, and when the ratings agency Standard & Poor’s pointed out that reform “based on…fiscal austerity alone risks becoming self-defeating,” what they really meant was, Wake up and smell the coffee, we’re heading for the cliff.

Will the Germans bend? According to the International Herald Tribune, the hope is that a treaty on fiscal discipline will make it possible for them to countenance “far reaching efforts to end the debt crisis,” whatever those might be. But such bargaining is worryingly reminiscent of the trade-offs made to keep Germany happy in the early days of the Eurozone, which left economic “convergence” between richer and poorer countries in the lap of market forces. Nor is it clear how Europe’s poorer countries would ever be able to meet Germany’s fiscal targets, or how such restrictions might coexist with democracy and national sovereignty.

Which brings us back to the leaked Greek document, a veritable goldmine for Internet theorists. One blog claims that Germany has now decided that European banks are sufficiently protected against the consequences of a Greek default that Greece can now be dropped—the “soft landing” (for Europe, not for Greece) that’s been in preparation for some time. Another suggests that the proposal is meant as a warning to Portugal, Spain and Ireland against seeking their own debt “haircut”: try to renegotiate, and we take you over. A third points out that Germany’s Minister of Economics, Philipp Roesler of the Free Democrats, has openly endorsed the proposal—which suggests it might have been a shot across Merkel’s bows from her coalition partners before the Euro summit.

Whether all or none of these turn out to be correct, the Greek economist Yannis Varoufakis is surely right to argue that the proposal is the logical consequence (for Germany) of piling loans on an insolvent nation while imposing an austerity program that has shattered the economy and (for Greece) of accepting both the loans and the conditions. Time for Greece in this game appears to be running out (more on that on another occasion); for the rest of Europe, much depends on whether the leaders at the summit can make a real commitment, even at this late date, to job creation and growth over rigid fiscal discipline, and to democracy over the rule of the financial markets.

Going... Going... Greece on the Brink

Man-made catastrophes tend to happen in slow motion. The danger is evident but the steps required to avert it are too difficult, or controversial, or unclear. So we keep leaning over the parapet, just a bit longer, just a little further; the tipping point is only obvious when it is too late.

On the European debt crisis, we are now in planking mode. In a marathon teleconference set to continue today, Greek finance minister Evangelos Venizelos is desperately trying to hammer out a last-ditch deal with the EU and the IMF, which have put off the decision to release the next tranche of Greece’s bailout because the country has once again failed to implement agreed reforms and austerity measures. The program voted through the Greek parliament in a fog of tear gas at the end of June has been rendered inadequate by delay—and by the fact that the measures taken so far have only plunged the country further into recession. According to Greek newspapers the creditors’ demands include the lay-off or suspension of 70,000 public employees by the end of 2012; further cuts to wages and pensions; higher social security contributions; and yet more tax rises.

The threat is that if the EU and the IMF don’t like what the Greeks come up with they will take their toys and go home, leaving Greece to—what, exactly? And with what consequences for the rest of the Eurozone? Beyond the fact that the Greek government is due to run out of cash in mid October for wages and welfare payments, nobody seems to know. The Financial Times has produced a handy graphic showing the chain reactions that might be triggered by default and, in a worst-case scenario, lead to a breakup of the euro; the steps along the way include “market turbulence,” “economy stalls,” “streets explode” and “social misery.” Like a malign goblin bent on making mischief, the rating agency Standard & Poor helped those predictions along today by downgrading Italy’s debt. The markets bumped down half a floor at stomach-churning speed.

In Greece, apart from deepening poverty, the pattern of “last chances” followed by painful reprieves has produced a stifling sense of dread, anxiety and drift. With each round, the government makes promises it lacks the will or the capacity to keep. Paralyzed before the task of ending large-scale tax evasion, unwilling to slash its public sector base (some, but not all, of whose members are also its clients), unable to sell the country’s assets even at Walmart prices, riven by dissent, George Papandreou’s socialist administration is flailing for quick fixes to offer its creditors. An ill-thought-out universal property tax announced this month, to be collected through electricity bills and enforced by the threat of power cuts, was meant to raise 2 billion euros; it failed to convince the money men at the EU and IMF. Rumors of an impending election or referendum don’t help. It’s not only the Europeans who’ve had it with Greek politicians: at home, disgust with the entire political class is close to boiling point.

Meanwhile the Eurozone’s leaders are just as paralyzed, divided and ineffective. Individually, they all defend the single currency (“If the euro fails, Europe fails,” in Angela Merkel's phrase); collectively, they won’t step up to the measures needed to save it. Torn between placating their own electorates (who don’t want to cough up for the Greeks, the Irish and the Portuguese) and appeasing the markets (which want a quick resolution), they fudge and prevaricate; the structural problems of the Eurozone—just like the structural problems of the Greek economy—remain beyond their reach.

But the game can't go on for ever, and given the general failure of leadership and will, the gathering consensus is that Greece must be cut loose. Hence the new tougher line from the EU and IMF. Back in June, EU Commissioner Ollie Rehn declared there was “no Plan B” for Greece; but what he actually meant was that there was no Plan B yet . Since then, Merkel especially has been under fierce pressure not to keep throwing good money after bad; the wizards in her finance ministry have been working away on plans to protect the rest of Europe from a Greek default. That default has been “priced in” to the markets for some time; central banks are preparing for it as if for a hurricane, pledging extra liquidity to keep the system afloat. Judging by the rating agency Fitch’s announcement today, the preferred scenario now is for Greece to default on its loans without leaving the Euro—which, less than three months ago, was seen as impossible. The stage is being set for a collective sigh of regret for a peripheral country which just couldn’t get it together—and a barrage of talking heads explaining why this is the best outcome for the Eurozone, why the Italian downgrade can now be contained, why the FT’s worst-case scenario just won’t come to pass, at least until the next big crisis comes along.

Will that be such a bad thing for Greece? Plenty of learned economists and serious commentators argue that the country should long ago have jumped before it’s pushed, as Argentina did in 2002. I  hope they're right; I wish I thought they were. But their theories presuppose a faith in Greek politicians that I can’t quite share. They see a new beginning with the capacity to devalue, reform and develop in a more sustainable way. I see the government falling; an election that brings Antonis Samaras’s New Democracy to power on a populist and xenophobic platform; corruption and tax evasion continuing as before; people—even more than now—rummaging through rubbish bins; and all the country’s assets sold off anyway to multinational corporations, Russian and Chinese developers, anyone looking for a cheap deal in a sunny place. I have never, ever wanted so much to be wrong.

Anarchy in the UK

London

Perhaps the whole point of a riot is to defy explanation: it’s an eruption of the irrational, a shattering of glass and boundaries, a testosterone-fueled roar that briefly flips anger and emptiness into something like ecstasy. What’s in the minds of the young men (and women, too) in London, Birmingham, Bristol and Liverpool who’ve sent great sheets of flame rising into the August night, devouring local businesses that it took years to build; who’ve turned plate glass to spiderwebs with one crack of a brick; who’ve gone home with their backpacks stuffed with cell phones, Nike trainers, X-boxes and Wiis? Well, wouldn’t we like to know, we middle-class types with access to a blog and an analysis, a “network” and a future?

Today Prime Minister David Cameron and London Mayor Boris Johnson returned reluctantly from their  vacations to confront the arson and looting that have spread through Britain's cities over the last three nights, like a pair of Eton prefects summoned to contain the fifth form. Parliament has been recalled for the second time this summer (the first was over phone hacking by Murdoch’s News International); 450 people have already been arrested; Cameron has promised 6,000 more police on London’s streets this evening. But will it be enough?

Missy, who works at a small shop selling jeans and sneakers down the road from where I live, shrugs when I ask her what she’s going to do tonight. The metal grille was down and properly locked yesterday; "they" trashed the place anyway. “They know the shop,” she says. “They went straight upstairs where we keep the expensive stuff, the £300 jeans.” A few blocks on, outside a smashed-up cycle shop where twisted bikes lie like skeletons on the pavement, a forensic expert carefully dusts glass with fingerprint powder. Does she think she’ll find anything? Another shrug. In Dalston, next to Hackney which saw some of the worst rioting, the Turkish Kurdish community have taken charge themselves, standing guard outside their shops, some of them with baseball bats.

The blue touchpaper that lit the conflagration was the killing of Mark Duggan, a 29-year-old black father of four, by armed police in Tottenham, one of London's poorest boroughs, as he rode in a minicab; he had a handgun but there’s been no claim that he made a move to fire it. A small crowd of local residents gathered at the police station to demand explanations; though the protesters were peaceful, the police were not forthcoming. By nightfall, against the wishes of Duggan’s relatives, rioting had broken out in Tottenham and elsewhere. Police cars and a double decker bus were set on fire and shop windows were smashed, mostly by teenage boys.

What began as an outburst of anger against police violence soon morphed into an orgy of nocturnal “shopping” as kids broke into sports and electronics shops, cellphone stores and supermarkets. A brave woman in Hackney gave a streetcorner sermon amid heaps of litter, excoriating the rioters for turning grief to greed: “This is about a fucking man who got shot in Tottenham. This isn’t about having fun on a riot and busting up the place. Get real, black people, get real. If we’re fighting for a cause let’s fight for a fucking cause.” But in the deprived neighbourhoods of Britain’s crumbling cities, consumerism is a more accessible dream than commitment or community.

And so it has gone on, night after night since then, frightening, unpredictable and uncontainable. The police are overwhelmed; the politicians nervously continue to plough their furrows. “Sheer criminality,” says Home Secretary Teresa May, as if any attempt to understand what’s at the root of all this rage would imply condoning it. Labour politicians flirt with the temptation to blame government spending cuts, as if such fury could build up in a matter of mere months. Of course the cuts don’t help: they are the final straw, the irrefutable evidence that the poor are now dispensable, outside society. Nor does the larger sense that nobody’s in charge, that the economy’s in freefall, that bankers have been looting the public purse for years, and that our leaders have no idea what to do about any of it. There is a doomsday feeling on the streets of London: time to grab what you can, burn it down and live for now, because who knows what’s coming for us all tomorrow.

But it’s taken years to brew the toxic mix of hopelessness, frustration and disenfranchisement, envy, anger and boredom, greed and selfishness, humiliation and recklessness that’s erupted in Britain this week--years in which the gap between rich and poor grew wider, racism was allowed to fester, consumerism and celebrity culture replaced community. While we in the middle classes got on with our oh-so-busy lives, averting our eyes from the poverty just a few blocks away, sending our kids to schools where there are other “motivated parents,” talking politics, we allowed the rifts in our own neighbourhoods to deepen until they became almost unbridgeable.

This morning, down the road, people stared at the broken shops, shaking their heads in disbelief. “It’s mad,” they said. “Just mad.” Small groups of women set out with brooms and dustpans to sweep up the broken glass. There is a kind of solidarity taking shape, a wish to protect what we have, now that it’s under threat. People are talking to each other, asking if everything's all right. The challenge, when all this dies down, will be to stay awake, to keep on doing that, until solidarity spreads.

The Markets, the Pols and the Greek Bogeyman

When Greek finance minister Evangelos Venizelos met Timothy Geithner in Washington yesterday, did they commiserate about the depredations of the rating agencies which have wreaked havoc on European economies over the last months, and which are now attempting to dictate terms in Washington? Standard and Poor’s has threatened to withdraw the United States’ AAA rating unless a timely agreement is reached on raising the debt ceiling—and unless legislators agree on a $4 trillion package of deficit reduction measures. Greece has suffered repeated assaults from the three unelected Fates, which have now pushed interest payments on the country’s two-year bonds up to 27.7 percent. On Monday Moody’s cut Greece’s rating by three notches to Ca—implicit default—further dampening the squib of euphoria that greeted last week’s European summit agreement on a new bailout for Greece, along with measures meant to contain the crisis and stabilize the Eurozone.

Not that the agreement was about to save the world, though some of its terms are welcome. It does ease the pressure on Greece, Ireland and Portugal by extending the term of EU loans from four to thirty years and reducing the interest rate to 3.5 percent; it also provides for a voluntary “haircut” of 21 percent (too little and too late) for Greece’s private creditors—a victory for German Chancellor Angela Merkel, who didn’t want to hand the whole burden to German taxpayers. (An arcane mechanism is supposed to contain the rating agencies’ threat to consider such a haircut a technical default, triggering debt insurance payments across the world; it is still not clear how far this has been successful.) The agreement is also a step towards greater European fiscal union—read redistribution—with provision for the new European Financial Stability Fund to buy up sovereign debt and recapitalize the banks not only of failing Eurozone countries but of those deemed at future risk. Of course, no decision has yet been reached on how the EFSF itself is to be financed; details at eleven, or more likely in September when the Bundestag gets back from its vacation, hopefully in a more charitable frame of mind.

But the EU’s attempt, once again, to ringfence Greece as if the European debt crisis was caused by Greece alone looks doomed and dangerous: Paul Krugman responded to it with a short blog titled “1937! 1937! 1937!” After emphasizing that the haircut for private lenders applies only to Greece’s creditors, the document goes on to whistle loudly in the dark, “All other euro countries solemnly reaffirm their inflexible determination to honour fully their own individual sovereign signature and all their commitments to sustainable fiscal conditions and structural reforms.” As any parent knows, making concessions to one child while strictly forbidding the same concessions to the others is a fatal sign of weakness; and as the Greek economist Yiannis Varoufakis points out, expecting Portugal and Ireland (and Italy and Spain) to go on making pledges they can’t meet is an open invitation to speculators (and the rating agencies that serve them) to push up bond spreads, hedge their bets and keep the whole destructive cycle going.

This is why the popular game of Blame the Greeks, played in the Western media since the crisis began, is so irresponsible: it perpetuates the myth that the whole European financial crisis with its global repercussions has been caused by one little country and its pathetic people who won’t pay their taxes and who expect to retire at 55, and that if those people can be made to stop whining and take their medicine, everything will be all right. The wizards at Moody’s know this isn’t true; the Greeks know this isn’t true; and, judging by the defensive tone of the summit agreement, European leaders also know this isn’t true—only they can’t admit it, because that would mean acknowledging that they have no idea how to get out of this mess, caught as they are between the financiers threatening Armaggedon on the one side and their own voters threatening to unelect them on the other.

This is not to say that Greece’s economy and political culture are not in need of root-and-branch reform, or that the country has not been living beyond its means for decades; they are, and it has. But to rehearse Greece’s ills yet again (as a piece on this website did last week) without acknowledging the wider context of an unbalanced European economy and a deregulated, overpowerful financial system is to obscure the systemic problems, which will keep erupting until Europe decides what it wants to be when it grows up and the markets are restrained from dictating government policy. Inside and outside Greece, there’s a misleading argument between those who think the roots of the problem are domestic and those who think they’re international and systemic; both are right, and both aspects need to be addressed.

There’s often a political difference, though, between those in either camp. Those on the domestic causes side also tend to dismiss the Greek protests against austerity measures imposed by the EU and IMF as self-interested resistance to necessary reforms—a canard levelled at popular movements for centuries. But while many Greeks voted for George Papandreou’s government precisely because they were sick of politics as usual and wanted an end to corruption and clientelism, none of them voted for the extreme wage cuts, pension cuts and tax rises that are now pushing them into poverty, or for the forced sell-off of public assets and public lands that will lay the country open to further exploitation and environmental damage. Reform was bound to be difficult and painful; but it need not have been devastating.

The problem of political agency is fundamental here. As John Lanchester pointed out in The London Review of Books, we can’t retroactively demand of individuals an agency they never had, expecting them to make personal decisions based on an abstract sense of what might be best for the country—to turn down a public sector job, for instance, because the state has too many people on its payroll—and then be surprised when they won’t pay for the “past sins” of their goverment. We may like to dream that we live in democracies, but they were long ago hijacked by the Hydra of “the markets”; the question is whether the leaders we elect, in Athens or in Washington, can find the will to tame them, and whether we can keep the pressure on until they do.

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Greece in Crisis: Protest, Violence and Necessity

The Greek parliament has just passed the package of savage austerity measures and privatizations required to get the last tranche of a 110 billion euro loan from the EU and IMF; without it, the country would have been broke by mid-July. Outside in Syntagma Square, protesters in cycling masks are running from clouds of teargas. Since yesterday, the square has been filled with surging crowds pushed back by riot police; Greek TV reports that 500 people aged between 15 and 65 have been treated in the metro station for respiratory problems and injuries.

Ambulances can’t get anywhere near the scene. The Twitter feeds give the flavor: “Fog of chemicals around #Syntagma they keep gas bombing us situation getting worse again”—“People are trapped at the sqr gas bombed from all sides”—“More doctors and supplies needed urgently at Syntagma Square in Greece. Please help”—“Police just hit directly to us. We were running, I saw a man spitting blood, 3 more fainted 3 steps away from me. Its really bad”—“Greek ministry of finance is on fire.”

By the skin of its teeth, Greece has escaped imminent bankruptcy; the Eurozone is safe for another week or two as the EU and IMF try to hammer out a second rescue package. Jose Manuel Barroso and Herbert von Rompuy, the presidents of the European Commission and Council, have hailed an “important step forward along the path of fiscal consolidation and growth-enhancing structural reform.” But the long-term prognosis is far from positive. First, the cuts and privatizations will not be easy to implement, leaving plenty of wiggle room for lenders later on. Second, this year’s austerity program has only plunged the country deeper into recession; even the EU and the IMF project that the debt and the interest on it are likely to keep rising, and the consensus is that Greece will have to default sooner or later anyway. Third, it isn’t clear how much more austerity the Greeks are willing or able to take. Almost a quarter already live below the poverty line; 50,000 businesses have closed in the last year; youth unemployment is at 42 percent; people are at breaking point.

It’s very hard to predict what is likely to happen next. The government still has to pass an enabling law on Thursday to speed up the pace of reform; after that, it has to put the austerity measures into practice. If it stumbles and is forced to call elections, Antonis Samaras, the leader of the opposition conservative party New Democracy, is most likely to win. He has no substantive alternative solution to the crisis, but has made populist hay by promising to “renegotiate” Greece’s loan agreement and to rescind a law granting citizenship to children born in Greece to legally settled immigrants.

The “aganaktismenoi” who have occupied Syntagma since the end of May are a new force in Greece—a popular movement that embraces leftists, centrists, nationalists, radical democrats and the apolitical, united by a collective allergy to traditional politics, with its cronyism and self-interest, its petty-mindedness and parochial machismo, its corruption and dishonesty. Some of them have been camped in the square for weeks, engaged in an experiment in direct democracy; whether that will survive today’s cataclysm of violence remains to be seen. Yesterday, peaceful protesters tried to stop the black clad agitators who were ripping up marble slabs and setting fire to vans and rubbish bins; today’s indiscriminate assault by the police has changed the atmosphere.

Classical analogies for modern Greek politics are always irritating. But today I can’t help thinking about tragedy, not in the tabloid sense of something terrible happening but as a clash between irreconcilable laws, or Free Will banging its head against Necessity. My heart is with the protesters, with their spirit and recklessness and energy and desire, but my head knows that parliament had to pass the appalling measures, because at this point the alternative would be worse, for Greece and also, perhaps, for the rest of Europe. Due to the long recalcitrance and rigidity of European leaders and their refusal to challenge the dominance of the markets; due to Greek politicians’ even longer failure to set their house in order; due to the absurd time pressure placed on this decision, there was, as EU commissioner Olli Rehn put it, “no Plan B.”

The tragic flaw is in Greece’s own responsibility for its problems, which has allowed Northern European pundits and politicians to demonize its people as incorrigibly lazy, feckless, criminal and corrupt: There simply wasn’t enough solidarity from outside the country to support a heroic last stand against austerity, the banks and the IMF. Perhaps political and economic pressure will soften the measures and ease the terms of Greece’s loans; perhaps, when default eventually comes, Greece will be better prepared to weather it. Perhaps the sight of a European country being forced to its knees might prompt a belated rethinking of the European project and the relationship between democracy and the markets. Perhaps. Otherwise, as one tweet coming out of Athens put it, “You are all in Syntagma Square. You just don’t know it yet.”

Talking Tory Blues

It wasn’t quite rearranging the deckchairs on the Titanic, but the May 5th referendum on whether to change Britain’s voting system seemed, to many people, at best an irrelevance and at worst a cheat. A vote on electoral reform was the prize Liberal Democrat leader (and Former Nation Intern TM) Nick Clegg waved at his party when he signed his coalition pact with the Tories after last year’s election—a foothold, it was said, towards fairer votes and truer representation in parliament for the Lib Dems, who because of demographics and the UK’s winner-takes-all voting system have so far played the role of the perpetual bridesmaid. The proposed Alternative Vote (AV) system, which asks voters to rank candidates in order and takes second preferences into account until a winner emerges with more than 50%, wasn’t even the one most Liberal Democrats wanted: Clegg himself called it “a miserable little compromise.”

Held on the same day as elections for local councils and the Scottish and Welsh assemblies, the vote became instead a referendum on Clegg and his party, who crashed in spectacular flames, losing half their English council seats and scuppering electoral reform for many years to come. The Tories emerged from the wreckage startlingly unscathed. Ever since they broke their promise to scrap university tuition fees (voting instead for a Tory plan for a 300% increase) the Lib Dems have become the nation’s punching bag, taking the rap for Tory cuts just as Prime Minister David Cameron clearly hoped they would: the words “human shield” have been all over the airwaves, and not only with reference to the killing of bin Laden. Labour picked up most of the Lib Dems’s dropped seats in England but made no dent in the Tory vote—and suffered its own devastating defeat in Scotland.

Disgust with the government in Westminster led to a historic victory for the left-leaning Scottish National Party, whose leader Alex Salmond promised “the rocks would melt in the sun” before he made Scottish students pay tuition fees. Salmond’s party plans a referendum on full independence for Scotland before the end of the current Edinburgh parliament; if they win, and take Scotland out of the union, the Tories will have a huge majority in what’s left of Britain. A vote that was meant to lead to one kind of constitutional change—an electoral system that would, in theory, empower Britain’s left-of-centre majority—may instead produce another, which could shut the left out of Westminster for decades.

Why didn’t government spending cuts produce more of a backlash at the polls against their Tory architects? In politics, timing is everything. The school budget cuts, the withdrawal of housing support and legal aid and disability allowance, the closing down of day centres and libraries, the planned gutting of the National Health Service have barely begun to bite; this is the last moment when that will be true. What’s more, by agreeing to hold the AV referendum at the same time as local elections, Cameron allowed his party to launch an all-out attack on its coalition partners. The “No to AV” campaign, bankrolled almost entirely by Tories and Tory donors, used every sleazy trick at its compendious disposal, from suggesting that babies would die if voting reform went through to promoting Clegg—the coalition’s deputy prime minister--as the scapegoat for everything. “The AV means more coalitions and more broken promises,” proclaimed the Tory-funded posters. “Under AV the only vote that counts is Nick Clegg’s.”

The Labour Party also bears some of the blame. Endlessly worried about being seen as fiscally irresponsible, it has still failed to articulate an alternative plan for the economy. In depressing contrast to Cameron, whose personal intervention against AV was greeted with rage by his coalition partners and joy by his own back benchers, Labour leader (and Former Nation Intern TM) Ed Miliband couldn’t unite his party behind the AV campaign or make a convincing link with supposedly Labour values like participation and democracy. Labour has long been split on electoral reform, and on the whole question of working with the Liberal Democrats. Indeed, many of the New Labour dinosaurs whose emphatic lack of interest in forming a coalition last May helped push the Liberal Democrats into the arms of the Tories were outspoken in support of the “No” campaign. Some of them come from seats where the opposition is evenly split between Tories and Lib Dems, and benefit from the current system. Many more simply have a tribal hatred for the Liberal Democrats and anyone who isn’t Labour. With Clegg humiliated and his party in disarray, their argument goes, voters seeking an alternative to the Tory program will simply have to vote Labour, which will then return to office without any need to share power—or patronage—with any outsiders. Scotland has changed all that. Alex Salmond’s triumph shows that disaffected voters will, eventually, find another way. In Britain they’ll have to do it now under the old voting system, which shuts out smaller parties and let the Tories sneak into office despite being rejected by most of the voters through much of the last century.

The voting reforms so comprehensively rejected may not have been perfect, but they did offer a real chance to break the logjam of British politics. Even if all they achieved was a reduction in the number of safe seats—few MPs now ever face the prospect of real opposition—that would have been a gain for democracy. Instead the next election will be fought in even fewer constituencies, with the new boundaries drawn by the current government. This is a Tory moment if ever there was one: the ease with which Labour’s former prime ministers, Tony Blair and Gordon Brown, were left like wicked fairies off That Wedding list reflects the new confidence of the old ruling class, whose reunion party filled Britain’s TV screens last week. There may yet come a day when the voting system here produces results that reflect the views of the majority, who favor a well-funded, universal NHS, redistributive taxation and high quality public services. But it may not be in our lifetimes, or even in Charles and Camilla’s. Perhaps by the time William and Kate come to the throne…

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A Tea Party for Europe?

“Unemployment and inflation are not caused by immigration. Bullshit! Come off it! The enemy is profit.”
 
As recession bites across Europe it may be time to revamp that old chant from the antiracist marches of the Thatcherite 1980s. Europe’s far right has been bubbling just off the boil for some time now. In France, Germany and Britain mainstream conservatives are playing a dangerous game, using Islamophobia and anti-immigrant rhetoric to woo working-class voters angered by cuts and job losses and offered no alternative story by politicians on the left.

Europe’s far-right groups don’t (yet?) form a movement. Though they share a hostility to immigrants and Muslims, they occupy different zones on the political fringe. The anti-Muslim Dutch MP Geert Wilders, for instance, on trial in the Netherlands for hate speech, turned his back on support from the street-fighting English Defence League at a rally last year: Wilders plays to the high ground with the free-speech card beloved of racists everywhere—and is busy chatting up the far right in the United States. (Banned from entering Britain, Wilders has been welcomed as martyr by Tea Party sympathizers; last month his claim that Islam is not a religion but a totalitarian ideology graced the opinion pages of the Wall Street Journal. Compare that piece with this more explicit attack on “an ideology that can produce only deserts,” posted approvingly on Radio Patriot.)  But the more they’re invited to tea by polite conservatives, the likelier they are to learn to play nicely together.

In France it will be illegal from next month for a woman to wear a veil that covers her face in public, even though only a few hundred women in the country do so; any woman caught outdoors in a niqab will be fined 130 euros and made to take a “citizenship class” on French republican values. This is no feminist measure: it penalizes women directly and restricts a choice which, in any case, may or may not be theirs. (Those who coerce women into wearing the niqab face much higher fines and a year in jail, but I doubt very many will ever be prosecuted.) President Nicolas Sarkozy is desperate to win the far-right vote in next year’s presidential election: Marine Le Pen, leader of the neo-fascist Front National and daughter of Jean-Marie, who recently compared Muslims praying outside overcrowded mosques to the Nazi occupation of France, is currently leading the polls. Marine’s no fool; she’s very pleased with Sarkozy’s strategy: “Every time he goes blah blah, my ratings jump five points.”

In Germany, Hans-Peter Friedrich, the newly appointed Interior Minister from the anti-immigrant Bavarian Christian Social Union—one of Angela Merkel’s two coalition partners—said last week that Islam doesn’t belong in Germany, after a gun attack by a 21-year-old Kosovar killed two US servicemen in Frankfurt. Other government members immediately pointed out that Muslims have been part of German life for generations. But Friedrich’s comment stands, another brick in the wall, alongside Merkel’s claim last October that multiculturalism has “utterly failed” and former Federal Bank board member Thilo Sarrazin’s best-selling book Germany is Destroying Itself, which argues that the country is being undermined from within by uneducated Turks and Arabs.

British Prime Minister David Cameron—who took his party into the far-right grouping of the European Parliament before the last election--echoed Merkel’s attack on multiculturalism in a speech last month in Germany, made on the day of a rally by the anti-Muslim EDL in Luton, north of London. His argument that involvement in nonviolent Islamic organizations leads on to violent extremism stigmatized a whole swath of community and religious groups, to which he plans to deny all public money and the right to meet in publicly funded institutions (read universities) unless they promote “British values.” It also gave aid and comfort to the Luton marchers chanting “Allah, Allah, who the fuck is Allah” in the biggest anti-Muslim rally Britain has yet seen.

As in Germany and France, Cameron’s remarks were disavowed by other ruling politicians—in this case Deputy Prime Minister Nick Clegg, whose Liberal Democrats sank like a stone in a vote last week for a vacant seat in parliament, ceding second place to the nationalist and anti-immgrant UK Independence Party. But this ritual rowing back doesn’t undo the damage caused by Europe’s ascendant conservatives as they open the door to neo-fascists, racists and Islamophobes who used to be beyond the pale of mainstream politics.

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