February 1, 2012

What about a rescue deal for Euro-democracy?

Tuesday 31 January 2012

Mick Hume

What about a rescue deal for Euro-democracy?


A ‘secret’ German proposal for a commissioner to veto Greek budgets sparked outrage. But the EU has already usurped Greece’s sovereignty.
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One outraged Greek government minister described it as ‘the product of a sick imagination’. Another called it ‘absolutely laughable’. The formal title of the document in question is ‘Assurance of Compliance in the Second GRC Programme’. It is neither a joke, nor a sick fantasy. It reads more like the draft of a death warrant for democracy, first in Greece and then elsewhere in Europe.


This supposedly secret document was issued by Angela Merkel’s German government to its partners in the Eurozone – and then carefully leaked, to ensure maximum impact. It sets out two extraordinary measures that the Germans want to impose to ensure that the Greek authorities comply with the swingeing budget cuts which they promised but have apparently failed to deliver to the markets’ satisfaction.

First, it says Greece must ‘legally commit itself to giving absolute priority to future debt service’. All state revenues must go first to paying debts and interest due, before a cent can be spent on public services. And the Greek government will not be allowed to threaten to default on its debts in future; if it cannot pay, it must accept that ‘further cuts’ will be ‘the only possible consequence’.

Second, the Germans want the Eurozone to oversee the ‘transfer of national budgetary sovereignty’ from Greece to ‘the European level’ under a ‘strict steering and control system’. The plan is for the Eurozone group to appoint a budget commissioner to oversee Greek finances, with the power ‘to veto decisions not in line with the budgetary targets’ set by European and international officials. If that was not humiliating enough, the Greeks would also have to look happy to bend the knee by ensuring that this new system of outside control ‘is fully enshrined in national law, preferably through constitutional amendment’.

To get the Greeks to agree to these unprecedented conditions, the German document also offers incentives – or as we used to call it, threats. If Athens does not accept the compliance measures, then ‘the Eurozone will not be able to approve guarantees for GRC II’. That is the second huge bailout of €130 billion which Greece desperately needs if it is not to go officially bust in weeks. The ‘Assurance of Compliance’ document is a ‘secret’ blackmail note.

Unsurprisingly, the publication of these proposals caused some consternation in the run-up to yet another Euro-crisis summit this week. While Greek ministers ranted about it as a sick joke, more photoshopped images of Merkel-as-Hitler appeared in Athens.

British Tory MPs joined in the re-enactment of the Second World War, with one declaring that the Germans were sending a Nazi-style gauleiter to run Greece.

Even other Eurozone governments appeared taken aback by the bluntness of the proposals. One senior official involved in the Greek rescue package was quoted as saying that ‘the Germans have a lot of influence, but that goes a little beyond the limits the outer member states could support’. Those states outside the Franco-German core of the Eurozone are worried that, where democracy in Greece goes today, so their democracy might follow tomorrow. And they are right to be worried. The latest plan – agreed to by the UK – to allow the judges of the European Court to punish democratic nations that fail to stick to the Franco-German rules on spending shows which way the wind is blowing across the continent.



However, whether these precise punitive measures get written into the Greek constitution or (most likely) not is really beside the point. The fact is that ‘national budgetary sovereignty’ has already effectively been ‘transferred’ from Greece. The Greek economy is already being run by foreign officials – from the ‘Troika’ of the EU, the European Central Bank (ECB) and the International Monetary Fund (IMF).

Before the Germans circulated their new proposals to the Eurozone states, the Troika had already delivered its latest demands to the Greek government, which it insists must be fulfilled before the new bailout can be agreed. Their 10-page blackmail note includes demands for 150,000 public-sector job cuts, and for further big cuts in public spending this year, notably on health.

It was telling that, when the leak of the ‘secret’ German proposals sparked a political furore, the German government’s reaction was not to show any embarrassment, but openly to reiterate its case. Germany’s right-wing economic minister Phillip Roesler took to the media to spell out that, if the Greeks could not make the cuts, then ‘the leadership and monitoring must come in a stronger way from outside, for example via the EU’. And the French Socialist Christine Lagarde, now head of the IMF, backed them up, with headlines declaring ‘IMF tells Greece it will lose control of budget for bailout’. Nothing secret about that.

Moreover, as well as assuming authority over the national budget, the Eurozone authorities have already overthrown parliamentary democracy in Greece.

We might recall what happened after prime minister George Panandreou suggested a referendum to consult the Greek people on the austerity package. The self-appointed ‘Frankfurt Group’ of the Euro-elite – comprising the heads of the German and French governments, European Commission, ECB and IMF – were appalled by this slightest whiff of democracy. They twisted Papandreou’s arm, not only to make him withdraw the referendum, but to resign from office.

In his place as prime minister they installed the supposedly non-political ‘technocrat’ Lucas Papademos to force through their austerity plans for Greece. German frustration at his failure to cut quickly and deeply enough led to last week’s draconian scheme. But Papademos is still there at the bidding of the Euro-elite, not the Greek people.

And we shouldn’t expect the Greek political establishment to struggle for democracy. None of the major political parties wants to be seen supporting the austerity measures in the run-up to April’s Greek elections. That is why they all took the opportunity to lay into the German government document over the weekend. But they all accept the need to satisfy the international lenders and get the next huge handout. As chief technocrat Papademos put it over the weekend, all of the parties backing his coalition are in ‘total convergence’ on the need to force through austerity measures. His rallying cry was: ‘We will put up a hard fight to guarantee the country’s place in Europe and the Eurozone. United we can succeed.’ The Greek political elite will unite to ‘fight hard’, not for its democracy, but for its subordinate place at the foot of the Frankfurt Group’s table.

Even if the German government’s draft death warrant is never officially issued by the Euro-group, the reality is that democracy in Greece has long been a terminal-looking case on its death bed. And the leading political parties look less likely to fight to revive it than volunteer to assist in its euthanasia. There is a crying need for somebody to breath life into the democratic struggle.

However, what nobody needs are politicians or protesters pretending this is a re-run of the German occupation of Greece during the Second World War. Such comparisons only ever denigrate history and distort the present.

Merkel’s Germany is not an expansionist ‘Fourth Reich’ aggressively seeking to conquer Europe. It is a relatively strong yet slightly insecure European power, defensive about the failure of its EU dream and trying hard to hold the Euro-club together by keeping fringe members such as Greece in line. The ambivalence in German attitudes toward their own power is evident in this latest episode. They were bold enough to put in writing their demands for Greeks to surrender economic sovereignty, yet sufficiently bashful to want to hide behind the Euro-group and avoid imposing these measures in their own name. The leading candidate for the post of budget commissioner – the gauleiter, as it were – was reportedly a Finnish EU official whose main qualification for the job was that ‘he is not German’.

Perhaps the only comparison between Hitler and Merkel’s Germany here is that neither wanted to invade Greece; Hitler only got sucked in to bail out his Italian fascist allies after the Greeks kicked Mussolini’s backside. But there the similarities end abruptly. Many thousands of Greeks starved to death under the Nazis, even in Athens, or were executed in mass reprisals after the Greek resistance struck at the occupying forces. It seems unlikely that the current German authorities are about to switch from writing strongly worded documents about Greece to burning down a thousand Greek villages.

One other sign of how far things have changed is the British attitude to the Greek and wider Euro-crisis today. Despite Britain’s alleged ‘isolation’ from Europe, Tory chancellor George Osborne has supported calls for greater financial integration in the Eurozone – that is, more central control over the budgets of indebted states such as Greece. Osborne said at last week’s Davos economic summit that to stabilise the Euro, wealthy Germany must make ‘permanent fiscal transfers’ to the poorer peripheral states, just as the UK capital subsidised the north of England. So keen is Osborne to see the Euro survive at all costs, he wants Germany to treat Greece as a province. Not exactly Winston Churchill, is it? (Though come to think of it, Churchill’s wartime government and its Labour successor did conspire with real Nazis and the Americans to shaft Greek democracy back then.)

Back in the present, meanwhile, the Greek people might be looking forward to the worst of all worlds. Not only is their political democracy being hacked up and handed over to technocrats, Eurocrats and budget commissioners, but the economic consequences will be dire. The austerity measures proposed by the bumbling Euro-authorities promise Greece nothing but misery for the foreseeable future.

One leading Greek economist says that the package to be imposed could not return Greece to growth ‘even if God and his angels were to descend upon Athens and put this in place’. As it is, the Greek people are being descended upon not by the three archangels, but by another Troika. More banal than angels but still other-worldly and, they would have us believe, omnipotent.

Mick Hume is editor-at-large of spiked.

http://www.spiked-online.com/index.php/site/article/12027/

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