Ten proposals for the European left
Two years ago, the left-wing SYRIZA government came to power in Greece, bearing the hopes of everyone who opposes the brutal austerity agenda--but it capitulated to a series of neoliberal austerity measures. Now, it is necessary to examine the balance of power in the European Union so the left can put forward a strategy for organizing against austerity and neoliberalism--and an alternative to the existing form of European integration.
The following statement and series of 10 proposals was initiated by Eric Toussaint of the Committee for the Abolition of Illegitimate Debt and supported by forces on the radical and anti-capitalist left across the continent.
SINCE MAY 2010, the question of national debt has become a central concern for Greece and for the rest of the eurozone. The first program of $116.2 billion, imposed by the Troika--constituted for the purpose of elaborating and executing this program--provoked a brutal increase in Greek public debt. This was also the case in various forms in Ireland (2010), Portugal (2011), Cyprus (2013) and Spain.
This program had five fundamental objectives:
-- 1. Bail-out the private banks with public funds so that they may avoid the damaging consequences of their own private credit bubble, and to avert a new major international financial crisis.
2. Give the new public creditors, who replaced the private creditors, enormous coercive powers over the governments and institutions of the peripheral countries in order to impose policies of radical austerity, deregulation (restricting large numbers of labor and welfare benefits), privatization and stricter authoritarian controls (see 5 below).
3. Preserve the eurozone perimeter (in other words, keep Greece and the other peripheral countries within the eurozone), which is a powerful instrument in the hands of the multinational corporations and the major economies of the zone.
4. Bring neoliberal policies to bear more heavily on Greece, in particular, but also on the other eurozone peripheral countries as an example to all the European populations.
5. Reinforce Europe-wide (as much for the European Union generally as for each member state) authoritarian forms of governance, without resorting to new experiments resembling fascist or Nazi regimes or that of Franco, Salazar or the Greek colonels (1967-1974).
There are lessons to be learned from the failure of the policies adopted by the government of Alexis Tsipras in 2015 to break the bonds of austerity. Also, it is necessary to realize the limits of the socialist minority government of Antonio Costa in Portugal.
ALTERNATIVE POLICIES in the people's interest must at the same time deal with austerity, public debt, private banks, the eurozone and opposing authoritarian tendencies. The experiences in the eurozone over the 2010-2016 period clearly show that: It is impossible to break with austerity unless responses to, at the least, all the above problems are put forward. Of course, the climatic and ecological crises must also be addressed. So must the humanitarian crisis caused by Europe's fortified-borders policy--the cause of so many deaths in the Mediterranean of immigration and asylum seekers--the Middle East crisis, the far right and the rise of racism.
Since the election of Trump, and also since the appearance of the radical movements that gathered around the Bernie Sanders candidacy and are called into the front line of opposition against Trump and his program, the European radical left, trade unions, feminists and ecologists must create links with the forces of resistance in the U.S.
A large part of the radical left that has sitting members of parliament had, and still have, a mistaken idea of what European Union (EU) integration and the eurozone is. To say it simply, they seem to see more advantages than disadvantages in the EU. They consider that the EU, as much as the eurozone, is compatible with a return of social-democratic policies, somewhat less injustice and a Keynesian style relaunching of the economy.
Considering the experiences of 2015, it is fundamental that those who have no illusions about the EU or the eurozone, and are proposing authentic ecological and socialist perspectives in rupture with the EU, as it exists, be reinforced. It is clear that neither the EU nor the eurozone can be reformed. It was demonstrated that it is impossible, on the basis of the legitimacy of universal suffrage or democratic debate, to talk the European Commission, the International Monetary Fund (IMF), the European Central Bank (ECB) and the conservative governments in power over most of Europe into taking measures that are respectful of the Greek people's--or, broadly, any other people's--rights.
The July 5 referendum, which the institutions rejected tooth and nail by blackmail and coercion (such as forcing the Greek banks to close for five days preceding the referendum), did not bring them to make any concessions. On the contrary, totally ignoring all democratic principles, their demands became considerably more oppressive.
Certainly, there are many measures that may, could and should be taken at the European level to stimulate the economy, reduce social injustice, make the debt sustainable and invigorate democracy. In February 2015, Yanis Varoufakis, while Greek minister of the economy, presented proposals in this sense suggesting that Greek debt be exchanged for two new kinds of bonds--either growth indexed obligations or "perpetual" obligations--which would never be reimbursed but would be paid out, interest only, perpetually. These proposals, although moderate and perfectly realisable, had no chance at all of being accepted by the European authorities.
This is the case with many proposals aiming to ease Greece's and numerous other countries' debt (joint-debt recognition, euro-denominated mutual bonds, etc.) Technically, these proposals are all viable, but there is not the will in the present political context and balance of power in the EU. A progressive government cannot hope to be heard, respected and, even less, assisted by the European commission, the ECB and the European Stability Mechanism.
The ECB can paralyze a eurozone country's banking system by cutting off its banks' access to liquidities. The arbitrary power of the ECB and the banking union used these means to reinforce the coercive powers of the European institutions over Greece in 2015 to be sure that the attempt at progressive government would fail.
The treaties have become extremely restrictive on matters of debt and deficit. The European authorities, in control of policies, could easily decide to derogate regulations in consideration of the state of crisis (they do this for governments that suit them ), but they clearly had no intention of doing so.
On the contrary, all the negotiating parties fiercely fought the Greek government, even though it gave proof of great moderation (to say the least). The mainstream media and numerous European leaders treated Alexis Tsipras and Yanis Varoufakis as rebels, or even radical anti-Europeans. The Troika fought against the Greek government's experiment, between January and July 2015, in order to have the European people believe that there is no alternative to neoliberal capitalism.
THE CAPITULATION of the first Tsipras government was not enough to satisfy the IMF or the European leaders. Pressure continued to be laid on the second Tsipras government to apply ever more neoliberal policies, especially attacking common property and the welfare and retirement systems, and assisting big capital through the introduction of further judicial and legal frameworks favoring privatization processes and fundamental structural regression.
All these new measures and counter-measures produced greater injustice and precariousness. If the creditors agree to a new restructuring of the debt, it will be under the condition that the same kind of policies be continued. In this case, a reduction of the debt will not at all be a victory or even a consolation. It will be no more than a measure to ensure continual reimbursements while seeking to dampen any arising social struggles.
This is the first lesson: The peoples and the authorities they have entrusted to break with austerity programs cannot put an end to the human rights violations perpetrated by the creditors and the big corporations unless they take strong unilateral measures of self-defense.
Some would argue that should a leftist government come to power in Madrid, it could use the weight of the Spanish economy (with the fourth-largest GDP in the eurozone) to negotiate concessions that Tsipras was unable to obtain. What concessions? Relaunching production and employment through heavy public spending and deficits? The ECB and Berlin along with at least five or six other capitals would oppose such policies! Taking strong measures against the banks? The ECB, with the support of the European Commission would reject such policies.
What is also sure is that if the radical left entered into the government of a country like Cyprus, Ireland, Portugal, Slovenia or one of the three Baltic States, they would not have the weight, before an unyielding European Commission or board of the ECB, to convince these institutions to let them renounce austerity, stop privatizations, develop public services and drastically reduce the debt. These countries will have to resist and take unilateral measures in the interest of their populations. Could several progressive governments of eurozone countries form a common front for renegotiations? It would certainly be very welcome if this could happen, but the possibility is remote, if only for reasons of electoral agenda.
Should Jean-Luc Mélenchon win the upcoming presidential election in France, and his coalition win the following general election, could a French left-wing government achieve a reform of the euro? The Mélenchon camp believes so.
It is reasonable to have doubts about this possibility. Suppose Mélenchon does win and forms a government intent on introducing social policies and tries to reform the euro. What would be possible? It is quite within the realms of possibility for a French government to disregard the current treaties, but he will not achieve a far-reaching reform of the eurozone. To do this would take simultaneous progressive electoral victories in the major countries as well as in peripheral countries.
This said, it is clear that a government of a defiant France, and its allies, taking measures in favor of the French population and the peoples of the world (for instance, by abolishing Greece's and developing countries' debts towards France) could have a positive effect throughout Europe.
Having said that, the way out of the crisis is not of a nationalist nature. As much as in the past it is necessary to adopt an Internationalist strategy and aim for a European integration that binds all the peoples opposed to the present form of integration that is totally dominated by the interests of big capital.
The weak links in the inter-European chain of domination are to be found in the peripheral countries. If SYRIZA had adopted a correct strategy in 2015, it could well have been a turning point. It didn't happen.
Other weak links where the radical left may gain power in the not so distant future are Portugal and Spain and, perhaps, Cyprus, Ireland and Slovenia etc. A new progressive advance would be dependent on the capacity of the radical left to learn the lessons of 2015 and thus make anti-capitalist and democratic proposals that rouse support. Without doubt, the force of popular mobilization will be an important decisive factor. If the pressure for real uncompromising change does not invade the streets, the neighbourhoods and the work places, the future will be very dim.
Ten Proposals for Avoiding a Repeat of Greece's Capitulation:
To avoid a repeat of the capitulation we saw in Greece in 2015, here are 10 proposals for social mobilization and actions to be taken by any government that is truly operating in the interests of the people, to be taken immediately and simultaneously.
1. A left-wing government must disobey the European Commission in a very transparent manner, with prior announcements. The party or coalition of parties (the example of Spain comes to mind) which claims to govern should refuse to obey the austerity measures from the outset, and pledge to refuse measures for the sole reason of balancing the budget. They should announce: "We will not yield to the European treaties' diktat of a balanced budget because we want to increase public expenditures for fighting anti-social and austerity measures and embark on the ecological transition."
Therefore, the first step is to begin disobeying in a clear and determined way. The Greek capitulation has shown us why we must shed the illusion that the EC and other European governments respect popular will. This illusion can only lead to disaster. We must disobey.
2. Resolve to appeal for popular mobilization both at the national and the European levels. In 2015, this initiative was unsuccessful in Greece and elsewhere in Europe. It is obvious that the European social movements did not achieve great success in mobilizing demonstrations, which did take place, but did not show enough solidarity with the Greek people. However, it is also true that SYRIZA's strategy did not include appeals for popular mobilization in Europe, or even in Greece. And when the Tsipras government did call for mobilization by means of the referendum of July 5, 2015, the popular will of the 61.5 percent of Greeks who refused to accept the creditors' demands was not respected.
Remember that starting in late February 2015, until the end of June 2015, Yanis Varoufakis and Alexis Tsipras made statements aimed at convincing public opinion that an agreement was in sight and that the situation was improving. Imagine that instead, after each important negotiation, they had explained what was at stake through press releases, statements to the media, and declarations in public places--in front of the headquarters of the European institutions in Brussels and elsewhere. Imagine that they had revealed what was really going on. It would have led to gatherings of thousands or tens of thousands of people, and the social networks would have relayed this alternative discourse to hundreds of thousands or millions of others.
3. Resolve to launch a debt audit with citizens' participation. The situations in the 28 EU countries, and of course within the eurozone, are diverse. In some European countries--as in Greece--it is a matter of utmost necessity and priority to suspend debt repayments, in order to make an absolute priority of meeting social needs and guaranteeing basic human rights. It is also a key element of a self-defense strategy. In Spain, in Portugal, in Cyprus and in Ireland, it depends on the balance of power and the current economic picture. In other countries, it is possible to carry out the audit first and then decide on the suspension of repayments. The specific situation of each country must be weighed before implementing these measures.
4. Establish supervision of capital movements and understand what that means. It does not mean that people cannot transfer a few hundred Euros abroad. Obviously, international financial transactions would be allowed up to a certain amount. On the other hand, it is important to enforce strict control over capital flow beyond a certain limit.
5. Socialize the financial sector and the energy sector. Socializing the financial sector does not merely mean developing a public banking hub. It implies decreeing a public monopoly on the financial sector, i.e. the banks, building societies and insurance companies. That is, a socialization of the financial sector under citizen control. In other words, turning the financial sector into a public service . Of course, socialising the energy sector will also remain a priority during the ecological transition. Ecological transition cannot take place without a public monopoly over the energy sector, both in terms of production and distribution.
6. Creation of a complementary, non-convertible currency and the unavoidable debate on the euro. Whether it is a case of exiting the eurozone or remaining in it, it is necessary to create a non-convertible complementary currency. In other words, a currency that is used locally, for exchanges within the country--for example, for paying increased pensions, salary increases for civil servants, taxes, public services etc. The use of a complementary currency enables partial relief from the dictatorship of the euro and the European Central Bank.
Of course, we cannot avoid the debate on the eurozone. In several countries, exiting the eurozone is an option that must be defended by political parties, trade unions and other social movements. Several eurozone countries will not be able to truly break away from austerity and launch an eco-socialist transition without leaving the eurozone. A redistributive monetary reform , or else the levying of a special progressive tax on incomes above $211,000, should be implemented in the case of an exit. That proposal would apply only to cash assets, and not personal property (principal residence, etc.)
7. Radical tax reform. Remove value added tax (VAT) on basic consumer goods and services, such as food, electricity and water (up to a certain level of consumption per individual) , and other basic necessities. On the other hand, increase VAT on luxury goods and services, etc. We also need to increase the taxes on corporate profits and incomes above a certain level--in other words, a progressive tax on income, wealth, and luxury residences. Owner-occupied homes will not be targeted. The reform of taxation must produce immediate effects: a very significant decrease in indirect and direct taxes for the majority of the population and a very significant increase for the wealthiest 10% and for major corporations. Also, strict new measures will be taken against fraud and tax evasion.
8. De-privatization--"buy back" privatized companies for a symbolic euro. Paying no more than a symbolic euro to those who have benefited from privatizations would be an appropriate gesture and would strengthen and extend public services under citizen control.
9. Implement a broad emergency plan for creating socially useful jobs and for justice. Reduce working hours with no reduction in wages. Repeal antisocial laws and adopt laws to remedy the situation of abusive mortgage debt; countries such as Spain, Ireland, Greece, etc., are the most concerned. This could well be fixed legislatively, to avoid court actions (since many households have to face litigation by banks). For example, a parliament could pass a law to cancel mortgage debts below $158,000 euros and so put an end to such cases. A vast program of public expenditures would be implemented in order to stimulate employment and socially useful activity by encouraging local systems.
10. Initiate a genuine constituent process. This does not imply constitutional changes within the existing parliamentary institutions. It involves dissolving the parliament and electing a constituent assembly by direct vote.
These are ten basic proposals for discussion. But one thing is certain: the measures to be taken must go to the root of the problems, and must be applied simultaneously within a coherent program. Breaking away from austerity policies cannot be achieved if radical measures against big capital are not taken, from the very start. Believing there is another choice is like hiding behind a smokescreen and can never achieve real concrete progress.
The architecture of Europe is such, and the capitalist crisis is so great, that there is no room for neo-Keynesian productivist politics. Eco-socialism must be put at the heart of the debate, not left aside. Immediate and concrete proposals must emerge. We must carry out the anti-austerity struggle and embark on the path of an eco-socialist transition. It is an absolute and immediate necessity.
Christian Zeller, professor of economic geography, University of Salzburg
Bosnia and Herzegovina
Tijana Okic, philosopher
Olivier Bonfond, economist, member of the Greek Truth Committee on Public Debt
Mauro Gasparini, LCR/SAP
Jean-Claude Deroubaix, sociologist at the University of Mons
Corinne Gobin, politologist at the Free University Brussels (ULB)
Herman Michiel, publisher of the Ander Europa periodical
Christine Pagnoulle, honorary professor at the University of Liège, president of ATTAC-Liège
Éric Toussaint, spokesperson of the CADTM International, scientific coordinator of the Greek Truth Committee on Public Debt
Stavros Tombazos, economist, university professor, member of the Greek Truth Committee on Public Debt
Soren Sondergaard, member of parliament (MP), former member of European parliament (MEP)
Olivier Besancenot, spokesperson of the NPA (Nouveau Parti Anticapitaliste)
Jeanne Chevalier, Parti de Gauche (subscribes to the 10 proposals but not to the introduction)
Eric Coquerel, political coordinator of Parti de Gauche (subscribes to the 10 proposals but not to the introduction)
Pierre Cours-Salies, professor of sociology, University of Paris 8, Ensemble!
Léon Crémieux, NPA
Alexis Cukier, Ensemble!, EReNSEP
Penelope Duggan, publisher of International Viewpoint
Pascal Franchet, president of CADTM France
Pierre Khalfa, co-president of Fondation Copernic
Djordje Kuzmanovic, Parti de Gauche (subscribes to the 10 proposals but not to the introduction)
Jan Malewski, editor of Inprecor
Myriam Martin, spokesperson of Ensemble!
Corinne Morel Darleux, Parti de Gauche (subscribes to the 10 proposals but not to the introduction)
Jean-François Pellissier, spokesperson of Ensemble!
Christine Poupin, spokesperson of NPA
Catherine Samary, economist, member of ATTAC France
Patrick Saurin, unionist (SUD), member of CADTM, member of the Greek Truth Committee on Public Debt
Angela Klein, SoZ periodical
Tassos Anastassiadis, sociologist and journalist (ANTARSYA)
Aris Chatzistefanou, director of Debtocracy and Catastroika documentaries
Nikos Chountis, MEP, Popular Unity, former deputy minister in the first Tsipras government
Zoe Konstantopoulou, former president of the Greek parliament, founder of the political movement Plefsi Eleftherias, president of the Greek Truth Committee on Public Debt (subscribes to the 10 proposals but not to the introduction)
Stathis Kouvelakis, King's College London, Popular Unity
Costas Lapavitsas, economist, SOAS University of London, EReNSEP
Spyros Marchetos, Aristotle University of Thessaloniki, member of ANTARSYA and of the Greek Truth Committee on Public Debt
Yorgos Mitralias, Greeks for Bernie's Mass Movement, CADTM Greece, member of the Greek Truth Committee on Public Debt
Antonis Davanellos, RedNetwork, Popular Unity
Leonidas Vatikiotis, Periodista (ANTARSYA), member of the Greek Truth Committee on Public Debt
Judit Morva, economist, editor of BALMIX
Gigi Malabarba, worker in the self-managed RiMaflow, Fuorimercato, former senator, Communia Network
Checchino Antonini, editor of L'Anticapitalista
Justin Turpel, former MP, déi Lénk--la Gauche
David Wagner, MP, déi Lénk--la Gauche
Willem Bosch, Another Europe
Zbigniew Marcin Kowalewski, journalist
Dariusz Zalega, journalist
Francisco Louça, economist, Bloco de Esquera, former MP. (Puts forward some hesitations on a few technical aspects regarding the 10 proposals)
Alda Sousa, University of Porto, former MEP, Bloco de Esquerda
Rui Viana Pereira, sound designer, member of CADPP
Andreja Zivkovic, researcher
Maja Breznik, researcher
Rastko Močnik, sociologist, university professor
Daniel Albarracín, economist and sociologist, Podemos, member of the Greek Truth Committee on Public Debt
Marina Albiol, MEP, Izquierda Unida, spokesperson of Izquierda Plural's delegation in the European parliament
Yago Álvarez, activist, member of the citizen debt audit platform (PACD)
Josep Maria Antentas, professor of sociology, Autonomous University of Barcelona
Rommy Arce, member of the city council of Madrid, member of the coalition Ahora Madrid, Podemos
Raúl Camargo, political secretary of Podemos in the Community of Madrid, MP of the Community of Madrid, Anticapitalistas
Sergi Cutillas, economist (Ekona), member of the promoting group for the new Catalan political movement Un País En Comú, member of the Greek Truth Committee on Public Debt
Jérôme Duval, member of CADTM, member of PACD
Manolo Gari, economist, eco-socialist activist, Anticapitalistas, Podemos
Fátima Martín, journalist, member of CADTM, member of PACD
Mikel Noval, member of the leadership of the trade union ELA (basque country)
Jaime Pastor, editor Viento Sur
Teresa Rodríguez, MP of Andalusia, former MEP, spokesperson of Podemos Andalusia.
Carlos Sanchez Mato, member of the city council of Madrid in charge of finances, responsable of the Economic Policy Commission of United Left (Izquierda Unida)
Miguel Urbán, MEP, Podemos
Jean Batou, MP of the Grand Council of Geneva, professor, University of Lausanne
Susan Pashkoff, Left Unity, Economic Policy Commission
Alan Thornett, Socialist Resistance, Britain
1. In Greece, this was about 15 major Belgian, Dutch, French, German and Greek banks. For a detailed analysis see the "Preliminary Report of the Truth Committee on Public Debt," June 2015, chapters 1 and 2; Eric Toussaint's presentation of the Preliminary Report of the Truth Committee, June 17, 2015, and "Banks are responsible for the crisis in Greece," December 23, 2016.
2. The major banks are greatly involved in the U.S. and UK financial markets and banking systems. They had access to large Federal Reserve lines of credit. It's for this reason that the Obama administration took an interest in the European banking crisis and the Greek and Irish situations in particular.
3. In the case of Greece, this was the 14 eurozone countries, represented by the European Commission, the European Financial Stability Facility (which was replaced by the ESM--European Stability Mechanism), the ECB and the IMF.
4. This aspect is insufficiently taken into account because the accent is placed on the economic and social repercussions. The authoritarian tendency within the EU and the eurozone is a key issue and goal of the European Commission and the big corporations. This touches on executive powers, expeditious voting procedures, limiting or violating many rights, disregarding electors' choices and, among more, increased repression of dissent.
5. The outgoing right-wing coalition won the most votes in the October 4, 2015 general election but did not win the ruling majority. Various left-wing groups won the majority of seats in the Assembly of the Republic: the Socialist Party was second with 32.4 percent; the Bloco de Esquerda (Left Block), was third with 10.3 percent, and 19 seats (from 8 in 2011); the Portuguese Communist Party gained one seat to make 15; the Green Party maintained its two seats. A governing agreement was concluded in November 2015. The PS governed alone, and the BE and the PCP, although they refused to enter the government, would give their support when they thought it suitable.
6. See "Les propositions grecques pour restructurer la dette" (in French).
7. To cite the least of examples: France under Nicolas Sarkozy and Germany under Angela Merkel were never sanctioned for their continual non-respect of deficit limits; more recently, the European Commission has been equally "understanding" towards the Mariano Rajoy government in Spain through 2015-16.
8. Laws were changed so that in the case of companies put into liquidation creditor banks become priority creditors ahead of employees (who may be owed wages) or beneficiaries of company pension funds (summer 2015); total marginalization of the influence of public authorities holding stakes in banks (December 2015); increased power of tax collecting entities; reducing retirement pensions, abolishing labor protection laws; carving in stone of the Third Memorandum; automatic budget reduction mechanisms should surplus budget objectives not be attained. A worsening of the conditions of household debt has also been identified.
9. The debt was already restructured in 2012 when European authorities announced a 50 percent reduction of Greek debt. In fact, immediately afterwards the Greek debt went on the increase. The measures announced in December 2016 are laughable (see Michel Husson, "Grèce : « allègement » en trompe-l'oeil" [in French or Portuguese]).
10. For an explanation regarding socialization of banks, see "What is to be Done with the Banks?" Version 2.0.
11. By applying a progressive exchange rate when moving from the euro to the new currency, the amount of cash in the hands of the wealthiest 1 percent would be reduced and wealth redistributed to households.
12. This could be combined with measures to provide water, electricity, gas, etc., free of charge to individuals up to a certain level of consumption.
Translated by Mike Krolikowski and Snake Arbusto. First published at the Committee for Abolition of Illegitimate Debt.