The Left Case Against the EU (1/2)

January 17, 2019

Costas Lapavitsas, former MP of the Greek Parliament and author of The Left Case Against the EU, says the left needs to have honest debates about the EU and its limitations, which became evident in the political struggles associated with Brexit and Grexit

Costas Lapavitsas, former MP of the Greek Parliament and author of The Left Case Against the EU, says the left needs to have honest debates about the EU and its limitations, which became evident in the political struggles associated with Brexit and Grexit



The Left Case Against the EU

Story Transcript

SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.

Would it be good for progressive politics if the UK actually leaves the European Union? As the Brexit deadline comes near on March 29, and the decision of the British Parliament on whether to leave the European Union comes to a head, some voices on the left are taking the opportunity to make the case that leaving the EU would be good for progressive politics. For example, the London-based Greek economist Costas Lapavitsas has just published a book titled The Left Case Against the EU. In the book, Lapavitsas argues that the EU was designed to enforce neoliberalism, and it constrains some governments from pursuing progressive mandates even if the people in the country want to move in that direction.

Joining me now to discuss his book is Professor Costas Lapavitsas. Lapavitsas teaches at the School of Oriental and African Studies at the University of London. His book The Left Case Against the EU was published by Polity Press. Costas, always a pleasure to have you on.

COSTAS LAPAVITSAS: It’s pleasure to be with you.

SHARMINI PERIES: All right, Costas. As a strong advocate in the past for Grexit, as well as now Brexit, you take up two main questions in your book. First there is the issue of just how the EU prevents the pursuit of progressive policies, and even socialist politics. And second, there is the issue of whether the EU can be reformed. You take up these two questions, and that’s very good. Let’s look at the first. How does the European Union prevent the pursuit of progressive politics?

COSTAS LAPAVITSAS: Very actively, and very determinedly. The European Union has become a hardened, entrenched set of institutions defending neoliberalism. In Europe these institutions centered on the single market and the single currency, the Euro. Combined, together, they ensure that neoliberal policies dominate the European Union; individual countries, and the union as a whole. On top of that, what you also have is the prevalence of neoliberal ideology. Not just the institutions and mechanisms, but also ideology, the prevalence of this ideology, across the institutions. Particularly the main decision-making institutions, which together with the practice of these institutions ensure neoliberal dominance across the union.

To me this is obvious. And to all people who come close to the European Union it’s obvious that the notion that this structure could be mobilized in the interests of working people in Europe is absurd. Just absurd. There’s no other word to describe it.

SHARMINI PERIES: All right. Now, give me some specific examples so that people can get a better understanding of the progressive politics that, say, Greek government wanted to pursue and was unable to do; or if a Corbyn government succeeds in taking power, how they will be limited in terms of pursuing their political platform, which obviously they would be elected on.

COSTAS LAPAVITSAS: These are two very different cases, for the reason that obviously Britain is a much bigger and more powerful country; but crucially, it’s not a member of the Monetary Union. Britain, in a sense, has always been semi-detached from the rest of the European Union. But even so, it demonstrates the ability of the European Union to impose restrictive measures on not just progressive government or left wing government; on any government.

To start with the case of Greece, though, which is well known–although not as widely and properly discussed as it should have been, and I’m surprised by that–the lessons of Greece have not been learned, really, the last few years. In the case of Greece, it’s clear. The Greeks elected a radical government, which was radical in the sense they wanted to overturn neoliberalism, fundamentally. It wanted to follow policies that were perfectly sensible, and went against the destructive policies of neoliberalism that were applied to the country for many years, the beginning this decade, and destroyed its economy, basically. They were not anti-European. They were not even anti-Euro, the Syriza government. Actually, they were committed Europeans, Europhiles, very clearly so, and their trajectory absolutely proves it.

These were committed Europhiles, they just wanted to follow slightly different policies, more liberal, more social democratic, less repressive in terms of the economy, less neoliberal. They were destroyed, completely destroyed. And they were destroyed by the mechanisms and institutions of the Monetary Union. These institutions, the Euro Group, the Council, the EMS, these are unelected, hugely powerful institutions that through the European Central Bank and other unelected institutions and unaccountable institution were capable of undermining, and in the end subverting, any kind of radical policies that Syriza wanted to implement, and forced it to follow the policies that the European Union imposed on Greece.

And in Britain, there is no Corbyn government, although I hope and wish that there will one soon if this country is to go anywhere, because it’s not going anywhere at all at the moment. Obviously, such a government will not be subject to the communications and framework and institutions of the Monetary Union, because luckily for Britain, it is not a member of the Monetary Union. But it will still be constrained by the mechanisms, practices and regulations of the European Union.

And a crucial way in which that will happen, for instance, with be in terms of state aid, public procurement, methods and tools which are of crucial importance for any left government, any progressive government that wants to change the structure of the economy and wants to boost industry, manufacturing and the productive sector at the expense, of course, of finance and so on. You’d have to use public procurement, you’d have to use state aid in order to support productive enterprises, in order to create jobs, good jobs for people, in order to change the balance of the economy. The rules and regulations of the European Union on these things, state aid and public procurement, are thoroughly neoliberal and would stop a radical Corbyn government from effecting the kind of changes it wishes to affect.

SHARMINI PERIES: In spite of the fact that they are not a member of the European Monetary–

COSTAS LAPAVITSAS: That’s got nothing to do with it. The public procurement regulations and the state aid regulations apply across the European Union, not just to members of the Monetary Union, of the countries that use the euro. Now obviously, the regulations are the same for all members of the European Union. Some countries take advantage of these regulations better than other countries. Germany, for instance, today supports its domestic industry far more effectively through state aid than Britain does, although the same regulations apply to both.

So there is more scope for Britain to exploit these regulations even within the European Union. And some people hastily come out and say, “Oh, the European Union doesn’t stop us from doing anything.” They are wrong, because any kind of radical change such as Britain needs and such as we would like to seem in terms of changing the social structure of this country and supporting the poor, the working class and so on, would require decisive measures of state aid and public procurement to support productive jobs. And that would be stopped by the European Union, no doubt as well of that.

SHARMINI PERIES: Costas, a one interesting example that your book deals with extensively is what happened in Greece. It is something that you are very familiar with, given you were a member of Parliament for the Syriza Party in Greece until you defected to Popular Unity. Now, explain to us, since you were in the throes of the debate and discussion internally at the time, why Greece was so unsuccessful at its negotiations with the EU.

COSTAS LAPAVITSAS: These are very big questions, obviously, and there’s a lot of stuff going on. I’ll tell you in summary what I think about why things went wrong and where we are now. Fundamentally, things went wrong because, as I already indicated in the previous answers, the Syriza leadership, Alexis Tsipras and his immediate circle, were Europhiles from the beginning. They were committed to the European Union and to the European Monetary Union. They wanted to keep Greece within these restrictive and unaccountable mechanisms at all costs, and they proved it. That’s what they did.

Now that’s manifesting itself in a variety of ways. Basically, though, what happened was Syriza intended to negotiate with very hostile bureaucrats and politicians in the European Union, while remaining within the framework of the of the Monetary Union, attempted to negotiate with these people without having any ammunition, any fundamental ammunition. They thought that because they had the democratic mandate of the Greek people, they would go there, they would put across good arguments, they would dig their heels in, and then at some point, the other side would relent because it would see the weights and quality of these arguments.

And surely, in this alliance of nations, sense would prevail. Because after all, we’re all for fraternity and common endeavor in Europe, presumably. That’s what they believe. And they didn’t quite understand how the European Union works either. They also had the most incredible misconceptions about how the mechanisms work and what was going to happen. And when they went, they attempted to do that, they were subverted and destroyed fundamentally by the European Central Bank. That’s basically what happened. The European Central Bank turned the tap of liquidity off. When you are in the Monetary Union, liquidity ultimately comes from the European Central Bank. That’s the basic foundation of liquidity in the economy.

The European Central Bank knew that this was the case, knew that it would asphyxiate, it would strangle Greece, and it did. It lessened the provision of liquidity gradually until the Syriza government, over the first six, seven months, had no liquidity available to it and the economy had no liquidity available to it. And in the end it surrendered, it surrendered and it accepted entirely, completely the terms imposed by the lenders of the European Union, just as previous governments have done. I say this because if you listen to Syriza talk and if you listen to talk by people who still support Syriza, incredibly so, and people abroad, who ought to know much better than that, they believe that Syriza has been following different policies the last few years. He hasn’t.

He’s been following exactly the same policies that were applied to Greece in the first few years of the crisis. They basically completed the job. They completed the job that began in Greece in 2010. They were instruments, dissonant instruments of the lenders in the European Union, except that most of the dirty work had already been done. In 2011, 2012, most of the destruction of the economy had been done. They simply had to wrap up the job, and they did, they did that. And through that, through the application of these policies, which were terrible neoliberal policies, they stabilized it, and that’s what happened.

I mean, we always knew. Some of us who understand economics always knew that by applying these harsh neoliberal policies, yes, you can stabilize the economy through destruction. It’s the stabilization of destruction, basically, and they did it, yes, they completed the destruction of the economy, and the Greek economy today has been stabilized, and stabilized in the sense of it’s not shrinking anymore, it’s actually growing very little, very slowly. Its debt is just about manageable at the moment, and it doesn’t get the deficits that it got back in 2009, 2010 because of the imposition of austerity. On this basis, Syriza came out and incredibly, incredibly, asserted that he has rescued the country.

It’s the most–I don’t have the words to describe my contempt for this, because it’s politicking of the worst possible kind. The left shouldn’t be doing that, the left should be about truth, should be doing about policy. Because they are coming out now and saying that they’ve rescued the economy and a new page has been turned in Greece now that Syriza is safe in power and so on. None of that will happen. Greece is stagnant, very unequal, very weak, poor future, its youth is leaving the country, the economy’s fundamental weakness are not being cured and they won’t be cured through these policies. It’s basically a future of stagnation, and it’s a government presumably of the left that has presided over that. It’s a disgrace, complete disgrace.

SHARMINI PERIES: All right, Costas. Now that some time has passed and you have had a chance to reflect on that moment when the Syriza government decided to ignore the people’s referendum asking it not to accept the Troika offer. It went ahead and did so and it defied its own people and it defied its own referendum that it put forth. What do you say to those people who said that Syriza had no choice, that Greece was strangled, it had no choice but to honor the Troika demands in spite of the referendum, and that leaving the EU was too consequential, that it would put the whole country in disarray?

COSTAS LAPAVITSAS: The European Monetary Union. Because what would have happened with the European Union is a different story. I personally never argued at the time for leaving the European Union. I argued that we should leave the Monetary Union, that we should go back to national currency. What would happen with European Union would have been a different story. We would have explored that subsequently, one step at a time. I was never in favor of, and I still am not in favor of changes which have not been thought through. But the argument that there was no choice is a very weak argument that is ignorant of the plain facts. There was a choice, and the choice is what you mentioned, leaving the Monetary Union. This was argued, incidentally, by the lenders.

The lenders to Greece explicitly proposed to the Syriza government, but also to governments before Syriza, that Greece should leave. So it was a realistic option also proposed by the lenders, but proposed by people of the radical left from within Greece, obviously with not the same aims not the same mechanisms, because we and the lenders differ greatly. But we knew that it was feasible, just as the lenders knew it was feasible. It was a perfectly a feasible option. The reason why it wasn’t adopted has got nothing to do with the lenders. It’s not the Germans or the French or anybody else who kept the Greeks, the Syriza government, in the European Union and the Monetary Union against the wishes of the Greek people. It’s actually the Greek elite that did that, the Greek ruling class.

It’s the Greek ruling class that could never contemplate leaving the Monetary Union, because they knew that if the Monetary Union was left, all the structures of power, social, economic and other parts, would be put in doubt. They didn’t know what would follow from that, they were very scared by that. They were very scared by that and they wanted to avoid it at all costs. And that’s what Syriza did for them. Syriza complied with them, served their interests fully, and avoided that possibility and eventuality at all costs. But the option was on the table. We proposed this, we’ve thought it out, we worked our way through it, and we said to Syriza and his leadership, “You’ve got the option. It’s not an easy option. It can be done, it’s perfectly feasible. You need to mobilize the people to do it, and you need to be prepared for decisive action that will break the back of the power of the elites, the power of the ruling class in Greece, because it couldn’t be done otherwise.”

Going back the national currency would have meant breaking with the distinctive institutions of the Monetary Union of the European Union, acquiring some sovereignty, which would have allowed us to do things, and thus breaking the power of the domestic elites. Because that’s what was the issue, that’s what was the issue. And Syriza couldn’t even think of that. The leadership was in cahoots with the Greek elites, with the Greek ruling class. It still is, and that’s how they operate. Everything they say about social chance and so on is just words. They are the biggest wordsmiths in European politics. And in terms of delivering decisive radical action, they are nowhere to be seen.

But we lost. We lost, I mean the radical left within Syriza lost. What we proposed was not accepted, did not come to pass. Part of the reason why we lost was, of course, our own weakness, yes, I accept that. It’s not just Tsipras and his friends who managed to subvert the entire movement and turn it into something which is disgraceful, to be honest. It was also us. We failed to take action in appropriate ways, we failed to mobilize. This is a weakness of the radical left, and it’s a weakness that keeps being with us in Greece. The political situation right now in Greece is not good for the radical left, unfortunately. But back to what you asked me. The notion that Syriza, as it is at the moment, could have some promise for the left or for working people, for social change in Greece, or more broadly in Europe is just so far gone it’s just beyond description.

SHARMINI PERIES: And finally, Costas, speaking up for reforming the EU, the former Finance Minister, Yanis Varoufakis, of Greece, is a big advocate of reforming the EU. He believes in it so much that he is now running for the European Parliament. Why do you think that is not a progressive goal?

COSTAS LAPAVITSAS: I can give you a response that’s not principled, or it really shouldn’t be used widely, publicly, for many reasons that would become clear. But I’m going to be constrained and I’m going to be disciplined. The line that’s been coming from the ex-Finance Minister of Greece of reforming the European Union has actually been tried. That’s exactly what Syriza did, that’s exactly what was tried. It was tried. It’s not new. It’s nothing new. That’s exactly what Syriza did. Syriza believed, in his fairly radical days, he could go there, he could dig his heels in, he could affect change with regard to Greece, and that would act as a catalyst that would bring change across the European Union, because other people might see the example of Greece and all sorts of opportunities and possibilities would then open up for the European Union. That failed, and it failed abysmally.

And it didn’t just fail incidentally. When Syriza finally accepted the bailout imposed on Greece, the third bailout that was signed, the strategy actually failed a lot earlier. It failed immediately after the election of the Syriza government, less than a month. At the first meeting of the Eurogroup, which is this unelected, very powerful institution that runs the Monetary Union, at the first meeting of the Eurogroup, at which the then Syriza government went for negotiations led by the then Finance Minister, because of his position he was leading the Greek delegation, at the very first meeting when this approach was tested, the result was complete debacle.

And the outcome was the signing of an agreement less than a month, I repeat, after the election of the Syriza government, the signing an agreement in which the then Finance Minister accepted that no unilateral measures would be taken to change the Greek debt, that we would cooperate with our lenders and our partners, and we would deal with the issue in an amicable way within the confines of the Monetary Union. That actually put Greece and Syriza down the line of surrender. So the approach has been tested as practical politics, and didn’t just say it. It was a disaster.

Now, what we’ve got now is a proposal that this failed approach is used across Europe, sort of writ large perspective, and it would be twice as disastrous or three times as disastrous, because this time it’s proposed for Europe as a whole. There is no prospect of reforming the European Union, of marching through the institutions because you might win elections in a particular country, because these institutions are rigid, well-protected in terms of what they do, and thoroughly neoliberal. These people are very well-organized and they’ve got mechanisms of preventing radical change through the democratic process.

I can be even harder on this. The European Union, at the moment, represents the most blatant bypassing of democracy that we’ve seen in advanced, developed capitalist countries in decades. And it does that by using precisely those institutions that presumably the left will change. It bypasses democracy and it bypasses the democratic will, as that is expressed through elections, in the most rigid, thorough and systematic way, and it does that because the regulations of the institutions allow it to do because of the voting processes and because of the alliances that will happen for decisions that were taken.

The same goes for Parliament, and the same goes for all other decision-making institutions. Those who think that you can, as I said, march through these institutions and effect change, I either don’t understand how the institutions work, or they’re not honest to people when they tell them that they can change them. You can’t change them, you can’t. You can only break those institutions, smash them. Rupturing those institutions is the answer if you want progressive, radical policies in Europe.

SHARMINI PERIES: Costas, let’s leave it there. But please join me and Costas Lapavitsas, the author of The Left Case Against the EU, which was published by Polity Press. We will continue this discussion in segment two.