By Ronan Burtenshaw
In late September 2009 I was walking through Dublin as the city prepared for the rerun of the Lisbon Treaty referendum.
Outside Dublin Castle I ran into canvassers from Generation Yes, a young, liberal, pro-Europe group established early that year to campaign for the passage of the treaty. Drawing them into conversation you could feel the passion of their arguments. They were the erasmus generation – students and graduates who saw the European Union as an engine of progress for Ireland and a liberator that had broken us from our bleak, parochial past.
Rather than the ‘Yes for Jobs’ vacuities many of the main political parties ran with in the campaign, Generation Yes spoke to direct experience living and working in Europe or for European businesses in Ireland. Many of its best advocates came from the tech sector and saw the EU as a vanguard project of a globalising world, breaking down borders, encouraging innovation and providing opportunity.
Generation Yes played a crucial role in the landslide victory of 2009. More clearly than any other organisation involved they developed an identity for the Yes camp. The European Union represented a young, modern, idealistic cosmopolitanism. The No camp, as I remember now-Senator John Crown saying on my local radio station, were the past, “Trotskyite communists and right-wing zealots”.
So, Lisbon II passed, Ireland’s political elite celebrated, and Generation Yes disappeared. But less than a year later the European Union, so long considered a benevolent actor in Irish politics, imposing human rights with a pat on the head from the continent, came to wear a quite different mask. 2010 brought the Troika.
Just five years after its arrival on the scene, the creditors’ union of the European Commission, the European Central Bank and the International Monetary Fund has come to dominate the popular imagination of the European Union. For the peripheral states they made their home their policies have inextricably linked the project of European integration to falling living standards, crumbling welfare states and debt servitude.
It isn’t an exaggeration to say that a Generation Yes for 2015 is almost impossible to imagine. A group of the same name might intervene in a referendum, it might even attempt to use a similar message, but it would have to reckon with the fact that the sickly-sweet vision of Europe it once sold has been indissolubly mixed with the bitterness of austerity.
It would also have to reckon with a rival identity. Not the eurosceptic Right, a nationalist opponent it had always comfortably beaten in Ireland. But, since 2011, a rival, pro-European identity has emerged which is highly critical of the Troika and the increasingly undemocratic apparatus of the European Union. Last month, in Greece, this movement was given a name: Generation No.
The vote in Greece was striking in its breakdown. The average No voter rejecting the Troika’s ultimatum was young, working-class and held increasingly left-wing views. The percentage for ‘oxi’ under 25 was 85, under 35 was 78. These were a new generation, living in conditions of over 60% unemployment, often having to stretch out their studies over many years to afford to complete them, relying on cash from their parents to survive. But also, it is a generation increasingly willing to challenge the shibboleths of our societies – to experiment in unorthodox relationships to the economy, to housing, to politics.
The price of building up the reputation of the European Union as an arena of opportunity for Europe’s periphery has been the weight of frustrated expectations when this turned out not to be the case. As a result not just in Greece but in an increasing number of states it isn’t Generation Yes which represents the future but Generation No.
This shift in orientation towards the European project is not down to a turn against Europe. In fact, the Greek No vote enjoyed enormous support from across the continent – marches, direct actions, statements from social movements, trade unions, NGOs, academics and intellectuals.
Instead what has happened is that the European Union has been stripped back to its essence as a neoliberal economic project. Gone are the pretences of internationalism or a social element – the Greek crisis has demonstrated that bonds of solidarity stretch only as far as is profitable.
To understand why this disconnect between growing internationalism of European peoples and the European Union exists, we have to explore its economic basis. The idea of a ‘social Europe’ has never been at the heart of this market-oriented project of European integration. At the same time as Jacque Delors was seducing Europe’s social democrats into this myth in the 1980s, he was trapping them into arrangements they would never agree to without it. First in 1988 the directive mandating for extensive free movement of capital and then, in 1992, the Maastricht Treaty.
These arrangements provided the foundation for the euro – a currency which was to drive the stake of neoliberalism into the heart of the European Union. The money in our pockets is the most right-wing currency ever designed, with a central bank that doesn’t care about unemployment and won’t act as a lender of last resort, modelled to work only in the free-market utopias predicted to arrive at Francis Fukuyama’s end of history.
It was also forged in two stages of class warfare. On its inception the policies of Agenda 2010 forced wages and conditions down for German workers to create optimal conditions for its export industry. On the occasion of its first crisis the same has been done to workers in peripheral Europe.
These divisions – between core and periphery, capital and labour – are key to understanding why the European project has ended up where it has. If we are mystified by the results of the recent negotiations in Greece it is only because so many stories about the euro haven’t been told.
Another hidden story takes place in the late 1990s, when German banks took on huge exposure in states like Greece by investing in high-yield bonds. For the business class this meant credit to Greek consumers – therefore a boon for exports. There was also the benefit of a heap of profit from financialising the peripheral economies with significant levels of returns. In Greece, it led to falling bond prices, cheaper credit and a bubble.
Between 1998 and 2007, Greece had the second highest growth rate in Europe. During roughly the same period Greece’s bond yields fell from over 15 per cent to 3 per cent. There’s an almost direct correlation.
This development was not led by demand from Greece but supply from Germany. In many ways the German business class was the sub-prime mortgage lender of the European financial system. But, because of this primacy of core over periphery and capital over labour, it has been workers in peripheral European states which paid the price for their recklessness.
Then there is the forgotten tale of the flexible rules. When German labour costs were driven down at the beginning of the euro, it was as a substitute for increased productivity that couldn’t be achieved. What happened was wage dumping, artificially low wages meant to out-compete rival economies in Europe, and under World Trade Organisation regulations should have resulted in tariffs being placed on German goods. It didn’t, because the aforementioned power imbalances also affect which rules get applied and when.
The numbers on this are stark. In the mid-1990s Germany had a small current account deficit – and Greece, Spain, Portugal, Italy and Ireland were all within +/- 3% of GDP. By 2006 Germany’s surplus was approaching 6% while all of the PIIGS were in deficit, Portugal, Greece and Spain very significantly so. Germany has kept this level of surplus now for over five years in contravention of the EU’s own rules. No punishment has been forthcoming.
But this model has reached its end. Greece, Spain, Portugal and Italy, which traditionally import a lot of German goods, are seeing a chronic problem of demand. Meanwhile Germany is struggling to keep up with the productivity and technological advances of emergent superpowers like China. The eurozone’s crisis resolution has been an attempt to reanimate a corpse.
It hasn’t worked and it was inevitable that a government like SYRIZA would come to power. The Greek economy has been destroyed – 25% decline in GDP, almost half of its population at risk of poverty, 60% of young people out of work, hospitals running out of anaesthetic. You don’t have to be a radical in circumstances like those to vote in socialists.
Despite the logic of this response by the Greek people, the election of SYRIZA has been met with absolute intransigence. Far from making concessions the Troika forced an unimplementable deflationary deal onto a state in decline worse than any seen since the Great Depression. They have directly intervened in a referendum of a sovereign state – cutting off funding to banks, threatening voters with public statements and even openly proposing regime change.
Some of this was politics – Europe’s elites did not want to see a left-wing alternative succeed. But most of it was economics. The eurozone is in an extremely fragile position. An election of two or three pro-development governments in Europe’s periphery would make the model unworkable and cause collapse.
On the contrary, for it to continue, there needs to be a doubling down of the core-periphery relationship. This is Wolfgang Schäuble’s vision, which seems to have become German state policy. Force Greece out of the euro, use the shock of this to discipline not only the remaining PII(G)S but also France and Italy. Increase productivity in Europe by another phase of brutal class warfare and produce a machine capable of rivalling China on the world stage.
This dystopian vision is increasingly exposing clear choices for citizens in Europe: you can have social justice or the European Union; you can have democracy or the European Union. But you cannot have both.
The arrival of these choices mark the end of the period of soft hegemony enjoyed by the European Union. It cannot anymore sell itself as a vehicle for European prosperity and convergence. It cannot even sell itself as a representative of Europe.
Instead it is now a project of economic pragmatism. States should support remaining part of the European Union because of the danger of life outside.
In the short term this will succeed. Greece is a lot worse off than the other peripheral states and is about to demonstrate just how costly it is to fight back.
But in even the medium term this will be a failure. The world economy is headed toward a period of prolonged stagnation and is storing up another shock in the financial system. When this comes and another state is forced into hardship its people can’t bear, the alternative will be clear: accept what’s happening or leave the common currency and the EU straitjacket.
It will be some time before Ireland, one of the most pro-European states, takes this position. Despite being on the edge of Europe with close links to Anglo-American capital, the European Union still plays an important role in our economy. Irish agriculture, for instance, is heavily reliant on the Common Agricultural Policy (CAP) and farmers know it – with 95% supporting remaining in the EU in a recent European Movement poll.
Another poll in December 2013, however, told a more interesting story. Commissioned by the People’s Movement it asked the question now being posed across the continent: “If the continued existence of the euro required people in the Eurozone to accept cuts in pay, pensions or welfare provisions would you be willing to do so or not?” 72% of respondents said no.
While the future of the neoliberal project of European integration is clearly bleak, there is plenty of hope to be found in the new Europe that is rising to challenge it.
Organising on an international level since 2011 – first with the interplay between the indignados and the movement of the squares, then with an attempted European general strike, more recently with Blockupy – this young, left-wing and internationalist Generation No has been given a focal point by the election of the SYRIZA government in Greece.
For them, Europe means something quite different. It is neither the colonial continent of the nineteenth century nor the war-torn one inherited by Jean Monet and Robert Schuman. It is not even their parents’ Europe, one of capitalist optimism and liberal progressiveness. For Generation No Europe is increasingly the field of an international class battle, with Greece simply a frontline.
So, in the face of the brutal treatment meted out to SYRIZA by the Troika, they developed an international solidarity movement for Greece. Now it has a motif too, the Greek word ‘oxi’.
This solidarity movement did not just call demonstrations – it created forums for European-wide discussion, strategising and activity.
The movement’s internationalism is, undoubtedly, partly down to the European Union. The freedom of movement of people has allowed for the development of strong bonds between young people across the continent. The interconnectivity of its universities has allowed many leading academics in parties like SYRIZA and Podemos to study abroad.
The trajectory, however, is very much into conflict with the European Union. The aspiration is a new Europe, from below, with the human face of many of those who have suffered the recent years’ austerity policies, against an increasingly faceless and authoritarian bureaucracy.
The path ahead for this new Europe won’t be easy in core European countries. In Germany it will have to break down the power of the myths about the eurozone crisis spun in the mainstream press. In France, it will have to arrest the rise of neofascist Marine Le Pen and her Front National. In the Netherlands it faces a similar challenge with Gert Wilders. And in the nordic countries there are also right-wing populists in government.
But a space has emerged for a more fundamental challenge than they offer, a movement that gives expression to popular aspirations for democracy and social justice, as well as support for policies like the free movement of people, which will define itself as the key challenge to Merkel, Juncker and Draghi in the coming years.
In debates on the EU’s future it will have just as passionate a case to make as the Generation Yes canvassers I met six years ago. “If you want decent working conditions, a welfare state and democracy – it’s time to say No.”