Can Europe Make It?

Where is another Europe now?

Europe either hangs together or - as the American revolutionaries liked to point out - the nations of Europe will be hanged separately.

Denis MacShane
18 April 2015
Brookings Institute, Washington DC.

Brookings Institution, Washington DC. Wikicommons/Gryffindor. Some rights reserved.The game of Greek chicken is unending. At the Brookings Institution in Washington DC where the world’s finance ministers assembled for the spring meeting of the International Monetary Fund and the World Bank this week, Germany’s austere finance minister Wolfgang Schäuble was asked, ‘Is Europe ready to lose Greece?’

‘No,’ he replied in his one-word answer to the questions that came from the floor. Fifteen minutes previously, also in Brookings, Yanis Varoufakis, who likes to portray himself and his country as the victim of hardline German economic philosophy dating from the pre-1914 Austrian school of Ordoliberalismus had spoken with his usual passion about how the previous corruption and clientelism of past Greek politicians had brought down his country. 

Both men are trapped in the iron grip of politics, rather than economics.  Varoufakis represents Plato’s philosopher-king, the man of ideas who becomes a ruler, catapulted from the backwaters of academic life into being the most famous finance minister the world has seen this century. But Varoufakis is right when he says that he has a mandate. And so does Schäuble. Varoufakis cannot return to Greece and say to voters – ‘You were wrong and previous governments who imposed austerity were right’. Schäuble cannot return to Germany and say to his voters, ‘You are wrong and Germans should agree to wipe off debts and give Greece lots of money to start growing again.’

The Greek drama has been presented as an economic crisis. It is, but it is also profoundly political. The disaster of the last ten years of EU economic management under leaders like Barroso, Sarkozy, Cameron, Berlusconi and Merkel was never seriously challenged until the arrival of Syriza.

There was opposition but it was diverted into support for populist rejectionist politics expressed by new parties of the right (UKIP, Front National, Swedish Democrats, Dutch Freedom Party) or new parties of the left (Syriza, Podemos) as well as the rise of nationalist partitionist parties like the SNP or Sinn Fein in Ireland.

The failure of the classic post-1945 ruling parties to work out a coordinated, EU-wide response to the crisis of the global banking failure in 2008 opened the way to the rise of all of these. The post-1945 party elites responded with bluster and denunciation or the smugness in Germany of saying, “we took all the pain years ago, and Vorsprung durch Leiden (in French one could paraphrase this as il faut suffrir pour être bon) is the only way forward.”

So today for Angela Merkel and Wolfgang Schäuble to ask the over-taxed and under-consuming Germans to accept more sacrifice to fund Greeks, even if for the Paul Krugmans and Paul Masons of the world it may make perfect economic sense, is no more politically possible than it is politically possible for the Greek Prime Minister Alexis Tsipras to tell the people who elected him, “You were all fools to believe a change of government could undo economic reality and the only way forward is years and decades of misery, pay and pension cuts and the continuing impoverishment of an entire nation.”

The economics may be with Athens, but the politics are with Berlin. Because behind Berlin are all the democratic left governing parties of Europe who watch with loathing and fascinated fear the spectre of their toeing of the austerity line since 2009 being repudiated. As Pierre Moscovici, the French socialist EU Finance Commissioner noted, it is impossible for European social democracy to accept Varoufakis’s demands as this would give a green light to the anti-austerity critique of Podemos in Spain, the left in France of Jean-Luc Mélanchon, Sinn Fein in Ireland, the SNP in Scotland, the Greens in England and other parties challenging the deficit and debt reduction priorities of the centre-left parties either in power as in France or Italy, or hoping to win power as in Spain or Britain.

These have watched with horror as Syriza has installed anti-Semitic or pro-Soviet ministers and broken ranks with blatant crawling to Putin. The economic analysis of Varoufakis actually meshes with the undeclared view of many of the mainstream left that the EU under the dominance of the centre-right since 2005 has made endless wrong decisions on major economic policy issues.

But the politics of Syriza, with its invocation of the old leftist themes and the vanity of the philosopher-kings who treat political relations with every other democratically elected Party of European Socialists government in Europe like a radio phone-in - the louder you shout and hurl abuse the better the programme ratings - has lost Greece so many friends and people of influence to the point that in Washington, Berlin and other EU capitals there is now a sullen passivity with regard to the idea that Grexit may be unavoidable. 

This will be a disaster for Greece, for Europe, for EuroAtlantic values that after 1950 delivered the  best years Europeans have ever enjoyed in their history.

It will accelerate the EU centrifuge driving European peoples and nations apart. The idea that Grexit will be a painless amputation is absurd. Europe either hangs together or - as the American revolutionaries liked to point out - the nations of Europe will be hanged separately.

But unless Syriza can rethink its political language and accept some compromise with the rest of Europe, this is a tragedy waiting to happen.

Denis MacShane spoke at Brookings on April 17 about his book Brexit: How Britain Will Leave Europe but to a much smaller audience than Yanis Varoufakis and Wolfgang Schäuble

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