The last week has revealed once and for all the appalling euro-zone reality – the euro-zone political leaders and their IMF partners do not agree on how to deal with the euro-crisis now centred on Greece. They do not agree because it is becoming ever clearer that if they press the exit button on Greece, the crisis will become more profound than “which country will be next?”.
The very basis of trust in the euro-zone currency system is that it is a unified monetary system. The idea that you can hop out or be kicked out is like a wrecking ball to a building. California and many other states in the USA effectively went bankrupt in the last financial crisis. Was it ever considered they would be kicked out? This was not just a matter of political union, it was also the understanding that a monetary union is strongest when it shows it can survive a strong shock. Not only must it show that it can survive a strong shock – the parties to that union insist that it survives the shock.
That insistence on a monetary union is the essential political basis of a monetary union. When we see it in a long-term federation like the USA, it can easily assume some metaphysical features of permanence. It is nothing of the sort – the monetary union is at root a political decision of governments that survives and functions so long as they remain determined to the point of inviolability – until it seems like the most natural and only order of things.
The euro-group leaders failed their first test when some allowed their finance ministers to begin talking of Greece being ejected from the euro-zone (they dressed this as an ‘exit’). To begin to use membership of the euro zone as a bargaining chip was to undermine the very political insistence that defines and safeguards the monetary union.
The political strategy of the euro-zone leaders has been to deflect and obscure their political responsibility for the existential threat to the euro zone itself that has been created by their acquiescence to a ‘members are expendable’ approach. They have sought to do this by pretending that these are technical decisions that reflect the quality of the technical plans or the personalities and functioning of finance ministers.
That game has now ended. After months of submitting a series of proposals that were deemed insufficient or unclear or lacking in detail, the Greek government has submitted its detailed proposal in what is understood to be a complex and thorough detailing of Greek government commitments. These are commitments which have travelled a long way from the government’s starting point. They have indeed stretched the cohesion of the government itself as it has sought to go as far as possible driving changes and reforms that will structurally improve the financing position of the government and yet not impose undue and counterproductive harm to the economy and people’s lives.
The Greek government has in turn defined its red lines for the negotiations. It has insisted that it will not allow on its watch the continued implementation of policies that prolong the misery and deepen and extend the pauperisation of the Greek people. A country cannot be expected to participate in a monetary union, the price of which, is policies for the immediate impoverishment for the bulk of its people with no viable exit because it will never be able to generate the enormous budget surpluses required to pay off that debt.
The euro-emperors have scrambled in response to the detailed proposal of the Greek government. They will try again, but it will be difficult for them to hide once more and pretend they do not have to make a political decision. If they truly want a monetary union in Europe they will need to acknowledge the politics of punishment have come to an end because in the eyes of the Greek people and growing numbers across Europe these politics have failed. That is the political reality they must confront. The whole monetary union project is now at stake if they don’t accept the compromises offered by the Greek government and insist on confrontation with Greece (be it through an ideological obsession with the politics of austerity or a radical tactical gamble the Greek government will collapse).
Perhaps some euro-leaders and their mandarins assume that the Greek government (and by extension the Greek people) would not pursue a path that could lead to short-term economic ruin. They ignore or do not understand the sense of violation of their human dignity many Greeks feel at having their lives destroyed by imposed policies that failed as predicted, while the political leaders who manufactured a deformed state and economy over many decades are protected and preferred by the euro-emperors.
Perhaps, they also do not understand why one day someone chooses to stand in front of a tank coming down Tiananmen square. Or why a village might resist a foreign occupation when they have been told punishment will be ten people dead for every occupying soldier that is killed. But that too is part of human history and it would be unfortunate and irrational for the euro-emperors to ignore the history of civilisations – or assume that history has ended.
Rulers and leaders must provide at least the material essentials and accommodate human dignity if they are to command respect. Today the big leaders of Europe stand naked before the Greek people and many others across the continent. If the monetary union is to have a secure future, they can do a lot worse than supporting the Greek government implement its strategy for economic growth.
Solidarity movements and many people across the world are following closely the developments in Greece. It is possible some European leaders and the IMF decide in the next few days to embark on a major confrontation with the Greek government. If that transpires, then all people who share an understanding of the profound injustice wrought by the politics of austerity must stand ready to join in action that demonstrates our support for the Greek government and the Greek people.
National coordinator, Australia-Greece Solidarity Campaign