Reclaiming Europa and the uncontrolled power of business

The common denominator of Greece's and Europe's (and the world's) problems is the uncontrolled power of business. Politics has become privatised. On behalf of ‘efficiency’ the defence of the common good was outsourced to business groups. With the result that is unfolding in front of our eyes.

Yudit Kiss
9 July 2012

In Dionysiaca, the last epic poem of Greek antiquity, Nonnus of Panopolis tells his version of the kidnapping of princess Europa. She's attracted by a particularly handsome bull (Zeus in disguise) and when she caresses him, the bull lifts her and starts to cruise over the surface of the ocean. Europa is overwhelmed with fear, awe and desire. As this "mimic ship of the sea" passes by, an Achaian seaman cries out: 

“O my eyes, what’s this miracle? How come that he cuts the waves with his legs, and swims over the barren sea, this land-pasturing bull? Navigable earth – is that the new creation of Cronides? Shall the farmer’s wain trace a watery rut through the brine-sprent deep? Surely that’s a bastard voyage I descry upon the waves!"[1] 

When they arrive at shore, Zeus takes the form of an attractive young man and unites with the virgin. He conceives twins, hands Europa over right away to Asterion, king of Crete, and leaves in search of new adventures. 

For several years now the concerned citizens of Europe have been watching astonished the hijacking of the European project that promised democracy, prosperity and solidarity. They have seen that national elections can be decided depending on which political party has the financial support of the most powerful business groups; that governments depend more on the evaluation of rating agencies than the judgement of their own people; that elected heads of state are removed from their position by a non-elected European Union leadership and replaced by “neutral technocrats”, who execute their instructions without asking unpleasant questions.

They have seen that the fruits of decades of political struggle embodied in their national legislation, their labour code or environmental laws, have been unilaterally binned in the name of austerity. They have heard Wolfgang Schäuble, the German Minister of Finance declare that whatever people vote for in Athens, their government will have no right to change the terms of the financial aid package; they have seen their countries' leaders summoned to a EU meeting to sign a Fiscal Treaty that seriously limits their national governments' right to take economic and political decisions, a Treaty that is supposed to be valid "forever" as Angela Merkel put it. 

No wonder if those citizens of Europe who still care about what is happening in their continent, who are not completely overwhelmed by the ever harder struggle for everyday survival, have either turned their backs on politics and public life, or abandoned themselves to ephemeral earthly pleasures, witnessing these events with a gathering sense of discontent and outrage. 

It is in fact a "bastard voyage ". 

It has symbolic significance that Greece has become the sick horse of the European constellation, highlighting what is wrong with the political and economic model that prevails on our continent. The present Greek plight is the result of a corrupted national politics that has led to a systematic plundering of the country's resources for the benefit of a business and political elite that lives in tight symbiosis. Their example has been followed by many of their citizens who tried to benefit from the system in their modest way, from tax evasion to fighting to secure state jobs and creating a flourishing parallel economy; a population that after centuries of historical backwardness and a hectic twentieth century, traumatised by two world wars, a bloody civil war and two military dictatorships, was hurriedly ushered into a consumerist paradise, actively encouraged to spend money, brain-washed by a powerful propaganda machine, courtesy of the business-controlled private and public media. 

The international financial groups that dedicate themselves to high-speed, high-level, high-risk speculation that can produce billions of dollars overnight, destroying en passant whole countries and productive branches, has also played a decisive role in triggering Greece's descent to hell and they keep benefiting from it.

The irresponsibility of the European Union institutions that ‘did not notice’ that something was wrong with the Greek economy - a ‘negligence’ that highlights the profound structural problems of the Union's economic management - magnified these inherent problems to a critical extent. Once the Greek bubble burst, the EU has been enforcing on the country a ‘cure’ that instead of paving the way for consolidation, has led to a complete economic standstill and the pauperization of broad segments of the population, only further deepening the crisis. The problem of masses of illegal immigrants that the EU dumps on a completely unprepared Greek society is one more ingredient in this lethal cocktail. 

Last, but not least, the lack of feasible alternatives offered by credible political forces creates an overwhelming feeling of hopelessness.

To reassure their voters, prominent representatives of the world's political elite and their mainstream media keep repeating that "Greece is a special case" or "the Greeks just get what they deserve". Corruption, clientelism, opaque politics, tax evasion, inefficiency, soft budget constraints might have reached extreme levels in the country, but they are not a Hellenic speciality, far from it. Instead of demonising Greece or treating it as a special, contagious illness, Europe should look into the mirror Greece is holding up to it and begin to address the roots of the Greek conundrum, one by one.

The dictatorship of money

The common denominator of Greece's and Europe's (and the world's) problems is the uncontrolled power of business. Politics has become privatised. On behalf of ‘efficiency’ the defence of the common good was outsourced to business groups. With the result that is unfolding in front of our eyes. 

In a healthy society, citizens, politics and economics are in a dynamic equilibrium. The state and the political institutions represent people's interests and provide a framework in which business, while pursuing its own interests, serves society. If any elements in this triangle become persistently dominant, limiting the other forces' possibilities to react and moving the whole system towards a new balancing act, society starts to malfunction. To put it simply: too much uncontrolled state power leads to authoritarian regimes and dictatorships; too much disorganised people power leads to anarchy; and too much corporate power leads to the dictatorship of money. 

This is the state we find ourselves at present. In a "global finance-dominated post-democracy".[2] The kidnapping of Europe is one of the results of the triumph of neo-liberal ideology and its world-wide economic implementation, rampant financialization and the extreme concentration of global wealth in the hands of a very limited business group. Genuine democracy and sustainable economic prosperity can not be achieved without a break from this dominance. 

Examining the architecture of the international ownership network, three Swiss experts recently concluded that nearly 40% of the control over the total wealth of the world's TNCs is held by an economic “super-entity", a small, tightly-knit core of 147 corporations. 3/4 of the core TNCs are financial institutions.[3] Another study highlights that in the USA the bulk of manufacturing is controlled by the largest four companies and in 2007 the top four companies accounted for about 73% of all retail sales. Yet another study shows that in 2010 the six largest bank-holding companies - JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley - had assets equal to 64% of US GDP (up from 17 % in 1995).[4] In the last decades the income gap between the lowest and highest income groups has increased dramatically on both sides of the Atlantic.[5] The extraordinary wealth the richest have generated over recent decades is used to produce more wealth and exercise more control over the world's affairs. 

Contrary to rational expectations and the declarations of US and European political leaders, the way the 2008 US financial melt-down was treated only reinforced corporate power, particularly international financial groups, instead of weakening it. In the last two decades transnational business groups have gained a decisive impact on policy-making in the European Union. The EU Commission's work is based on recommendations of expert committees that prepare legislation and decisions. These, supposedly independent consulting bodies have been taken over by lobby groups that represent particular business interests.[6] Several high-level EU commissioners and officials have cooperated directly with corporations and when their mandate was over, they were recycled in business circles.[7] Together with other economic legislation that redraws the parameters of economic management inside the Union, the EU's Fiscal Stability Treaty was written in indecent haste and pushed through the decision-making machine, even though analysts from very different backgrounds warned that instead of stabilizing them, it would push the continent's economies deeper into crisis. The treaty was both partially inspired and warmly welcomed by business lobbies like BusinessEurope and the European Roundtable of Industrialists. [8] 

In 2009 independent civil observers concluded that the European Commission and its Internal Market Directorate had been "totally captured" by the financial sector.[9] Since then the European Central Bank has had a new President appointed, Mario Draghi, who is a former vice chairman of Goldman Sachs International.[10] The two "neutral technocrats", who lead Italy and Greece, have strong connections with financial groups; Mario Monti has been an international adviser to Goldman Sachs, while Lucas Papadémos served as governor of the Greek central bank between 1994 to 2002, the period when Goldman Sachs assisted the Greek government to falsify its books.[11] The current General Director of Greece’s Public Debt Management Agency, Petros Christodoulou had worked earlier for J.P. Morgan, Credit Suisse First Boston and Goldman Sachs.[12] Since 2008 the EU has regularly expressed the intention to introduce stricter financial regulation to defend the economies of its member countries[13], but these efforts regularly shipwreck on the resistance of the very same financial groups, whose voice is far stronger then that of the regulators. Even Michel Barnier, the EU Commissioner for Internal Market and Services has stated recently that the biggest obstacle to progress is financial lobbying that has a clear vested interest in the status quo and in neutralising reforms.[14] 

Beyond the evident conflicts of interest that undermine the legitimacy of the EU machine, even if the former or would-be political-cum-business officials happened to be personally honest, they represent very different values and rationales from those one naively expects from politicians representing the interests of their communities. Needless to say, they should not be in the position of dictating politics. Political decisions should be the fruit of an open, accountable, participative process in which those who are affected should have their word to say. 

Rescue packages 

Greece's ‘rescue packages’ were designed by this EU, the ECB and the IMF. The latter too has its own agenda, not exactly inspired by the defence of social values, together with its own history of imposing ‘rescue packages’ on a series of emerging countries, with disastrous social and mixed economic consequences.[15] The Memorandums are to be executed by the representatives of the Greek financial-political elite, headed by Mr Papadémos. No wonder that the prescribed radical structural reforms were hardly carried out, and that tax evasion is prosecuted at the level of small players, while the big fish manage to export their assets to peaceful havens, without any danger of sanctions. The enormous sums of money lent to Greece are not meant to stimulate the economy and redress the disastrous social consequences of the crisis, but to continue servicing the country's debt, owned partially to those business and financial groups that pushed the country into its present situation.[16]

And Europe's political elite keep threatening the Greeks that if they do not accept the conditions of the Memorandums on their next election, they will have to face dire consequences – and that ‘there is no alternative’ to their crisis-tackling methods. 

Europe's increasingly self-confident national populists, at the same time, offer their own alternatives. Thanks to the current crisis, international business groups have realised astronomical financial gains and Europe's nationalists and extreme right have realised spectacular political breakthroughs. The voice of the French Marine le Pen, the Dutch Geert Wilders, the Hungarian Jobbik, the Greek Golden Dawn, the Serb Tomislav Nicolic become stronger with every passing day and their voter's base larger. They oppose the EU's policies and evoke genuine unresolved problems, like unemployment, worsening living conditions, the abuses of a non-elected EU bureaucracy, the uncontrolled power of multinational capital. Since in the last two decades Europe's political left was busy implementing the neo-liberal agenda, the extreme right have also taken over many of their traditional demands, like the call for a stronger state, social welfare and a politics of proximity.

The concerned citizens of Europe have to come out of their torpor and propose attractive and feasible alternatives to both the ‘solutions’ as currently applied and the recipes of nationalist demagogy. We are not the Achaian seaman who witnesses astonished the rapture of the beautiful princess. We are in the place of Asterion. Whatever happened to Europa, there are its children whom we have to bring up. 

Come hither all ye people 

Greek civil society has taken some initiatives over the last two years: the take-over of some bankrupt companies, hospitals, media sources to introduce self-management; the creation of direct links between producers and consumers, in order to break the monopoly of powerful retailers; the establishment of public discussion forums and mutual help and share networks. The opposition movement's intention to create a political alternative, in particular by federating all progressive forces, is an encouraging development. But it is far from strong enough to change the status quo as yet. (Despite such unexpected external assistance, as Christine Lagarde's heartfelt comments – comments that certainly helped many hesitant Greeks to decide where to cast their votes.[17]

These efforts would gain far more weight if they became part of a concerted movement of Europe's citizens to claim back their rights and, simultaneously, start to construct a genuine European community. Beyond rage and frustration, there is an immense constructive potential in the "indignados movements" that have been shaking Europe (and the world) in the last couple of years. There are already crystallised, shared demands from the Manifesto of the Spanish M15 to the Occupy Handbook. These include calls for economic policies that aim at sustainability, both at the individual (to secure a living wage) and global level (to secure the survival of the planet); the introduction of a financial transaction tax and tax reforms that serve a better redistribution of wealth; the regulation of financial markets and the banking system; massive public investment to stimulate growth and develop or protect society's common goods: public education, health-care, culture, transport, natural resources. The more articulate these demands are, the easier it is to turn them into a political agenda. 

There are sound economic proposals elaborated by alternative think tanks and the most brilliant brains of our times, like Joseph Stiglitz and Paul Krugman; there are ongoing experiments with alternative forms of production and policy-making, there are concrete policy proposals addressing specific issues, like transparency or food security offered by civil society organisations, trade unions and new public forums, including several virtual ones. There are two political leaders in Europe, Elio Di Rupo in Belgium and François Hollande in France who dare to say out loud that "austerity is not decreed by fate." 

All these progressive forces; citizens, academics, political movements and civil society organizations should share their knowledge and experience and join forces for reclaiming Europe. We should start to build together a community, where transparency, accountability and professionalism is guaranteed on the side of power-holders, and civic participation and responsibility is granted on the side of the citizens, at all levels of decision-making, from local communities through national level policy-making up to the highest instances of the Union. This gigantic undertaking encompasses two, simultaneous processes: one concentrating on inventing and introducing new forms of economic management, political representation and social organisation and another one aiming to cleanse the existing national and EU level structures and institutions from their counterproductive and toxic elements. The latter should include dismantling existing organizations and legislation, since political customer-tailored laws are not only the lot of Berlusconi's Italy and Orban's Hungary, but of the European Union as well. 

This cleansing process would yield plenty of still valuable elements. We don’t have to throw out Europa's babies with the bathwater. European construction has a whole set of positive practices, regulations and laws, from the European Social Charter that requests member states to guarantee fundamental human rights and freedoms, including housing, health, education, employment, social and legal protection - to a recent EU-level strategy that demands respect for fundamental human rights in business management.[18] There are European Parliament members and EU officials who fight relentlessly for human rights, political freedom, a decent livelihood or business regulation, the prevalence of ethics and efficiency inside the Union.

Their struggle can be made more efficient with the contribution of those external forces that monitor the Union's activity and elaborate concrete proposals for its improvement. The studies prepared by the Corporate Europe Observatory or independent academics, like the Modest proposal For Overcoming The Euro Crisis[19]; civil society-based initiatives like the campaigns of the Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU)[20]; calls from other international agencies, like the recent plea of independent UN experts for a global financial transaction tax to offset the costs of the enduring economic, financial, fuel, climate and food crises, and to protect basic human rights [21] can all contribute to the building of a genuinely democratic, just and prosperous European community. Taken out of its present context, even the Troika's proposals have reasonable elements that Greece's future leaders could implement for the benefit of their country.

                                                        * * *

One of Europa's sons, the Cretan king, Minos levied a terrible tax on the Athenians: seven young men and seven young women had to be eaten by the monster Minotaur, born from the union of his wife and a giant bull.  The Athenian who defied this unbreakable rule was called Theseus; he killed the Minotaur, returned home, achieved Attica's political unification and laid down the principles of democracy in Athens. Plutarch says that:

"he gathered together all the inhabitants of Attica into one town, and made them one people of one city, whereas before they lived dispersed, and were not easy to assemble upon any affair for the common interest (…) he invited all strangers to come and enjoy equal privileges with the natives, and it is said that the common form, Come hither, all ye people, was the words that Theseus proclaimed when he thus set up a commonwealth, in a manner, for all nations."

He was pushed into exile later, "overpowered by demagogues and factions".

[1] http://www.theoi.com/Text/NonnusDionysiaca1.html

[2] Claus Offe, Two and a half theories about the operation of democratic capitalism. Paper presented at the meeting Reinvent Democracy in Europe; Barcelona, 3-4 May 2012.

[3] Stefania Vitali, James B. Glattfelder, and Stefano Battiston, The network of global corporate control, 19 Sept 2011

[4] Nancy Folbre, Who Rules the Global Economy? November 7, 2011.

[5] Divided We Stand. Why Inequality Keeps Rising. OECD, 2012 ; Paul Krugman, We Are the 99.9%, New York Times, November 24, 2011

[6] Lobbying the European Union by Committee, Corporate Europe Observatory, July 2007; European Commission Expert Groups Secrecy and corporate dominance. A study on the composition and transparency of European Commission Expert Groups. The Alliance for Lobbying Transparency and Ethics Regulation in the European Union (ALTER-EU), 2007,

[7] Europe Inc. in crisis - the EU's alliance with big business is a dead-end. Corporate Europe Observatory, April 16, 2012;

[8] Fiscal Pact Deepens Euro Area Crisis. Joint analysis of the Macro Group. IMK (Duesseldorf), OFCE (Paris) and WIFO (Vienna); Inspired by big business: the EU Austerity Treaty, Corporate Europe Observatory, March 8, 2012 

[9] Harald Schumann, Finance Watch – a lobby to break the lobbies, 23 February 2012; Ian Fraser, Who Will Win The War Over Financial Regulations? 30 January 2012; Daron Acemoglu and Simon Johnson, Captured Europe; Banks feel at home in Brussels, Libération, 2 July, 2010,

[10] Lobby to take presidency of ECB again. Corporate Europe Observatory, Oct 2011

[11] Nicholas Dunbar and Elisa Martinuzzi, Goldman Secret Greece Loan Shows Two Sinners as Client Unravels, Mar 6, 2012

[12] Marc Roche, Goldman Sachs, le trait d'union entre Mario Draghi, Mario Monti et Lucas Papadémos, Le Monde 15.11.2011;

[13] Financial regulation: The EU's agenda, Updated 23 December 2011

[14] Ian Fraser, Can Consumers and Taxpayers Be Saved From The Bonus-Crazed Financial Sector? Economy watch, 6 April 2012

[15] Joseph Stiglitz, Globalization and Its Discontents 2002; Weisbrot, Mark and Juan Montecino. “The IMF and Economic Recovery: Is Fund Policy Contributing to Downside Risks?” Washington D.C. 2010. Center for Economic and Policy Research. 

[16] Yanis Varoufakis, Greece's austerity measures doomed to fail, BBC News Europe, 23 November 2010; Yanis Varoufakis, For Europe’s sake Greece must renege on its bailout commitments, Le Monde, 25 May, 2012; Jean Pisani-Ferry, Who Lost Greece?, Feb 28, 2012 ; Franco Bruni, Europe is just as guilty as Greece, 10 February 2012, La Stampa; Costas Lapavitsas, It is in Greece’s interest to leave the euro, Financial Times, May 23, 2012 ; Mark Mazower, Democracy’s Cradle, Rocking the World, New York Times, June 29, 2011, It's very instructive to see the common points of authors of rather different theoretical and ideological background.

[17] Larry Elliott and Decca Aitkenhead, It's payback time: don't expect sympathy – Lagarde to Greeks, The Guardian, 25 May 2012; Christine Lagarde: can the head of the IMF save the euro?, The Guardian, 25 May 2012, 

[18] Council of Europe, European Social Charter, 3 May 1996 ;  European Commission, A renewed EU strategy 2011-14 for Corporate Social Responsibility. Brussels, 5.10.2011

[19] Stuart Holland and Yanis Varoufakis, A Modest Proposal For Overcoming The Euro Crisis 

[20] http://www.alter-eu.org/fr

[21] G-8 / EU: “A global financial transaction tax, a human rights imperative now more than ever" 

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