Thursday, July 23, 2015

Friday, July 17, 2015

Yanis Varoufakis, Dr Schäuble’s Plan for Europe: Do Europeans approve?









http://yanisvaroufakis.eu/2015/07/17/dr-schaubles-plan-for-europe-do-europeans-approve-english-version-of-my-article-in-die-zeit/



Dr Schäuble’s Plan for the Eurozone


The avalanche of toxic bailouts that followed the Eurozone’s first financial crisis offers ample proof that the non-credible ‘no bailout clause’ was a terrible substitute for political union. Wolfgang Schäuble knows this and has made clear his plan to forge a closer union. “Ideally, Europe would be a political union”, he wrote in a joint article with Karl Lamers, the CDU’s former foreign affairs chief (Financial Times, 1st September 2014).


Dr Schäuble is right to advocate institutional changes that might provide the Eurozone with its missing political mechanisms. Not only because it is impossible otherwise to address the Eurozone’s current crisis but also for the purpose of preparing our monetary union for the next crisis. The question is: Is his specific plan a good one? Is it one that Europeans should want? How do its authors propose that it be implemented?


The Schäuble-Lamers Plan rests on two ideas: “Why not have a European budget commissioner” asked Schäuble and Lamers “with powers to reject national budgets if they do not correspond to the rules we jointly agreed?” “We also favour”, they added “a ‘Eurozone parliament’ comprising the MEPs of Eurozone countries to strengthen the democratic legitimacy of decisions affecting the single currency bloc.”


The first point to raise about the Schäuble-Lamers Plan is that it is at odds with any notion of democratic federalism. A federal democracy, like Germany, the United States or Australia, is founded on the sovereignty of its citizens as reflected in the positive power of their representatives to legislate what must be done on the sovereign people’s behalf.


In sharp contrast, the Schäuble-Lamers Plan envisages only negative powers: A Eurozonal budget overlord (possibly a glorified version of the Eurogroup’s President) equipped solely with negative, or veto, powers over national Parliaments. The problem with this is twofold. First, it would not help sufficiently to safeguard the Eurozone’s macro-economy. Secondly, it would violate basic principles of Western liberal democracy.


Consider events both prior to the eruption of the euro crisis, in 2010, and afterwards. Before the crisis, had Dr Schäuble’s fiscal overlord existed, she or he might have been able to veto the Greek government’s profligacy but would be in no position to do anything regarding the tsunami of loans flowing from the private banks of Frankfurt and Paris to the Periphery’s private banks.[2] Those capital outflows underpinned unsustainable debt that, unavoidably, got transferred back onto the public’s shoulders the moment financial markets imploded. Post-crisis, Dr Schäuble’s budget Leviathan would also be powerless, in the face of potential insolvency of several states caused by their bailing out (directly or indirectly) the private banks.


In short, the new high office envisioned by the Schäuble-Lamers Plan would have been impotent to prevent the causes of the crisis and to deal with its repercussions. Moreover, every time it did act, by vetoing a national budget, the new high office would be annulling the sovereignty of a European people without having replaced it by a higher-order sovereignty at a federal or supra-national level.


Dr Schäuble has been impressively consistent in his espousal of a political union that runs contrary to the basic principles of a democratic federation. In an article in Die Welt published on 15th June 1995, he dismissed the “academic debate” over whether Europe should be “…a federation or an alliance of states”. Was he right that there is no difference between a federation and an ‘alliance of states’? I submit that a failure to distinguish between the two constitutes a major threat to European democracy.


Forgotten prerequisites for a liberal democratic, multinational political union


One often forgotten fact about liberal democracies is that the legitimacy of its laws and constitution is determined not by its legal content but by politics. To claim, as Dr Schäuble did in 1995, and implied again in 2014, that it makes no difference whether the Eurozone is an alliance of sovereign states or a federal state is purposely to ignore that the latter can create political authority whereas the former cannot.


An ‘alliance of states’ can, of course, come to mutually beneficial arrangements against a common aggressor (e.g. in the context of a defensive military alliance), or in agreeing to common industry standards, or even effect a free trade zone. But, such an alliance of sovereign states can never legitimately create an overlord with the right to strike down a states’ sovereignty, since there is no collective, alliance-wide sovereignty from which to draw the necessary political authority to do so.


This is why the difference between a federation and an ‘alliance of states’ matters hugely. For while a federation replaces the sovereignty forfeited at the national or state level with a new-fangled sovereignty at the unitary, federal level, centralising power within an ‘alliance of states’ is, by definition, illegitimate, and lacks any sovereign body politic that can anoint it. Nor can any Euro Chamber of the European Parliament, itself lacking the power to legislate at will, legitimise the Budget Commissioner’s veto power over national Parliaments.


To put it slightly differently, small sovereign nations, e.g. Iceland, have choices to make within the broader constraints created for them by nature and by the rest of humanity. However limited these choices, Iceland’s body politic retains absolute authority to hold their elected officials accountable for the decisions they have reached within the nation’s exogenous constraints and to strike down every piece of legislation that it has decided upon in the past. In juxtaposition, the Eurozone’s finance ministers often return from Eurogroup meetings decrying the decisions that they have just signed up to, using the standard excuse that “it was the best we could negotiate within the Eurogroup”.


The euro crisis has expanded this lacuna at the centre of Europe hideously. An informal body, the Eurogroup, that keeps no minutes, abides by no written rules, and is answerable to precisely no one, is running the world’s largest macro-economy, with a Central Bank struggling to stay within vague rules that it creates as it goes along, and no body politic to provide the necessary bedrock of political legitimacy on which fiscal and monetary decisions may rest.


Will Dr Schäuble’s Plan remedy this indefensible system of governance? If anything, it would dress up the Eurogroup’s present ineffective macro-governance and political authoritarianism in a cloak of pseudo-legitimacy. The malignancies of the present ‘Alliance of States’ would be cast in stone and the dream of a democratic European federation would be pushed further into an uncertain future.


Dr Schäuble’s perilous strategy for implementing the Schäuble-Lamers Plan


Back in May, in the sidelines of yet another Eurogroup meeting, I had had the privilege of a fascinating conversation with Dr Schäuble. We talked extensively both about Greece and regarding the future of the Eurozone. Later on that day, the Eurogroup meeting’s agenda included an item on future institutional changes to bolster the Eurozone. In that conversation, it was abundantly clear that Dr Schäuble’s Plan was the axis around which the majority of finance ministers were revolving.


Though Grexit was not referred to directly in that Eurogroup meeting of nineteen ministers, plus the institutions’ leaders, veiled references were most certainly made to it. I heard a colleague say that member-states that cannot meet their commitments should not count on the Eurozone’s indivisibility, since reinforced discipline was of the essence. Some mentioned the importance of bestowing upon a permanent Eurogroup President the power to veto national budgets. Others discussed the need to convene a Euro Chamber of Parliamentarians to legitimise her or his authority. Echoes of Dr Schäuble’s Plan reverberated throughout the room.


Judging from that Eurogroup conversation, and from my discussions with Germany’s Finance Minister, Grexit features in Dr Schäuble’s Plan as a crucial move that would kickstart the process of its implementation. A controlled escalation of the long suffering Greeks’ pains, intensified by shut banks while ameliorated by some humanitarian aid, was foreshadowed as the harbinger of the New Eurozone. On the one hand, the fate of the prodigal Greeks would act as a morality tale for governments toying with the idea of challenging the existing ‘rules’ (e.g. Italy), or of resisting the transfer of national sovereignty over budgets to the Eurogroup (e.g. France). On the other hand, the prospect of (limited) fiscal transfers (e.g. a closer banking union and a common unemployment benefit pool) would offer the requisite carrot (that smaller nations craved).


Setting aside any moral or philosophical objections to the idea of forging a better union through controlled boosts in the suffering of a constituent member-state, several broader questions pose themselves urgently:


Are the means fit for the ends?


Is the abrogation of the Eurozone’s constitutional indivisibility a safe means of securing its future as a realm of shared prosperity?


Will the ritual sacrifice of a member-state help bring Europeans closer together?


Does the argument that elections cannot change anything in indebted member-states inspire trust in Europe’s institutions?


Or might it have the precise opposite effect, as fear and loathing become established parts of Europe’s intercourse?


Conclusion: Europe at a crossroads


The Eurozone’s faulty foundations revealed themselves first in Greece, before the crisis spread elsewhere. Five years later, Greece is again in the limelight as Germany’s sole surviving statesman from the era that forged the euro, Dr Wolfgang Schäuble, has a plan to refurbish Europe’s monetary union that involves jettisoning Greece on the excuse that the Greek government has no ‘credible’ reforms on offer.


The reality is that a Eurogroup sold to Dr Schäuble’s Plan, and strategy, never had any serious intention to strike a New Deal with Greece reflecting the common interests of creditors and of a nation whose income had been crushed, and whose society was fragmented, as a result of a terribly designed ‘Program’. Official Europe’s insistence that this failed ‘Program’ be adopted by our new government ‘or else’ was nothing but the trigger for the implementation of Dr Schäuble’s Plan.


It is quite telling that, the moment negotiations collapsed, our government’s argument that Greece’s debt had to be restructured as part of any viable agreement was, belatedly, acknowledged. The International Monetary Fund was the first institution to do so. Remarkably Dr Schäuble himself also acknowledged that debt relief was needed but hastened to add that it was politically “impossible”. What I am sure he really meant was that it was undesirable, to him, because his aim is to justify a Grexit that triggers the implementation of his Plan for Europe.


Perhaps it is true that, as a Greek and a protagonist in the past five months of negotiations, my assessment of the Schäuble-Lamers Plan, and of their chosen means, is too biased to matter in Germany.


Germany has been a loyal European ‘citizen’ and the German people, to their credit, have always yearned to embed their nation-state, to lose themselves in an important sense, within a united Europe. So, setting aside my views on the matter, the question is this:


What do you, dear reader, think of it? Is Dr Schäuble’s Plan consistent with your dream of a democratic Europe? Or will its implementation, beginning with the treatment of Greece as something between a pariah state and a sacrificial lamb, spark off a never-ending feedback between economic instability and the authoritarianism that feeds off it?


[1] “Elections can change nothing” and “It is the MoU or nothing”, were typical of the utterances that he greeted my first intervention at the Eurogroup with.


[2] Moreover, if the Greek state had been barred from borrowing by Dr Schäuble’s budget commissioner, Greek debt would still have piled up via the private banks – as it did in Ireland and Spain.









Sinicisation (excerpt)







by Slavoj Žižek



http://www.lrb.co.uk/v37/n14/slavoj-zizek/sinicisation



[…]



An exemplary case of today’s ‘socialism’ is China, where the Communist Party is engaged in a campaign of self-legitimisation which promotes three theses: 1) Communist Party rule alone can guarantee successful capitalism; 2) the rule of the atheist Communist Party alone can guarantee authentic religious freedom; and 3) continuing Communist Party rule alone can guarantee that China will be a society of Confucian conservative values (social harmony, patriotism, moral order). These aren’t simply nonsensical paradoxes. The reasoning might go as follows: 1) without the party’s stabilising power, capitalist development would explode into a chaos of riots and protests; 2) religious factional struggles would disturb social stability; and 3) unbridled hedonist individualism would corrode social harmony. The third point is crucial, since what lies in the background is a fear of the corrosive influence of Western ‘universal values’: freedom, democracy, human rights and hedonist individualism. The ultimate enemy is not capitalism as such but the rootless Western culture threatening China through the free flow of the internet. It must be fought with Chinese patriotism; even religion should be ‘sinicised’ to ensure social stability. A Communist Party official in Xinjiang, Zhang Chunxian, said recently that while ‘hostile forces’ are stepping up their infiltration, religions must work under socialism to serve economic development, social harmony, ethnic unity and the unification of the country: ‘Only when one is a good citizen can one be a good believer.’



But this ‘sinicisation’ of religion isn’t enough: any religion, no matter how ‘sinicised’, is incompatible with membership of the Communist Party. An article in the newsletter of the party’s Central Commission for Discipline Inspection claims that since it is a ‘founding ideological principle that Communist Party members cannot be religious’, party members don’t enjoy the right to religious freedom: ‘Chinese citizens have the freedom of religious belief, but Communist Party members are not the same as regular citizens; they are fighters in the vanguard for a communist consciousness.’ How does this exclusion of believers from the party aid religious freedom? Marx’s analysis of the political imbroglio of the French Revolution of 1848 comes to mind. The ruling Party of Order was the coalition of the two royalist wings, the Bourbons and the Orleanists. The two parties were, by definition, unable to find a common denominator in their royalism, since one cannot be a royalist in general, only a supporter of a particular royal house, so the only way for the two to unite was under the banner of the ‘anonymous kingdom of the Republic’. In other words, the only way to be a royalist in general is to be a republican. The same is true of religion. One cannot be religious in general: one can only believe in a particular god, or gods, to the detriment of others. The failure of all attempts to unite religions shows that the only way to be religious in general is under the banner of the ‘anonymous religion of atheism’. Effectively, only an atheist regime can guarantee religious tolerance: the moment this atheist frame disappears, factional struggle among different religions will explode. Although fundamentalist Islamists all attack the godless West, the worst struggles go on between them (IS focuses on killing Shia Muslims).



There is, however, a deeper fear at work in the prohibition of religious belief for members of the Communist Party. ‘It would have been best for the Chinese Communist Party if its members were not to believe in anything, not even in communism,’ Zorana Baković, the China correspondent for the Slovenian newspaper Delo, wrote recently, ‘since numerous party members joined churches (most of them Protestant churches) precisely because of their disappointment at how even the smallest trace of their communist ideals had disappeared from today’s Chinese politics.’



In short, the most serious opposition to the Chinese party leadership today is presented by truly convinced communists, a group composed of old, mostly retired party cadres who feel betrayed by the unbridled capitalist corruption along with those proletarians whom the ‘Chinese miracle’ has failed: farmers who have lost their land, workers who have lost their jobs and wander around searching for a means of survival, others who are exploited by companies like Foxconn etc. They often take part in mass protests carrying placards bearing quotes from Mao. This combination of experienced cadres and the poor who have nothing to lose is potentially explosive. China is not a stable country with an authoritarian regime that guarantees harmony and is thus able to keep capitalist dynamics under control: every year thousands of rebellions of workers, farmers and minorities have to be squashed by the authorities. No wonder official propaganda talks incessantly of a harmonious society. This very insistence bears witness to its opposite, the ever present threat of chaos and disorder. One should apply the basic rule of Stalinist hermeneutics here: since the official media do not openly report on the troubles, the most reliable way to detect them is to search for the positive excesses in state propaganda – the more harmony is celebrated, the more chaos and antagonism should be inferred. China is full of antagonisms and barely controlled instabilities that continually threaten to explode.



It is only against this background that one can understand the religious politics of the Chinese Party: the fear of belief is effectively the fear of communist ‘belief’, the fear of those who remain faithful to the universal emancipatory message of communism. One looks in vain at the ongoing ideological campaign for any mention of the basic class antagonism made evident in the workers’ protests. There is no talk of the threat of ‘proletarian communism’; all the fury is directed instead against the foreign enemy. ‘Certain countries in the West,’ the party secretary of the Chinese Academy of Social Sciences wrote in June 2014,



advertise their own values as ‘universal values’, and claim that their interpretations of freedom, democracy and human rights are the standard by which all others must be measured. They spare no expense when it comes to hawking their goods and peddling their wares to every corner of the planet, and stir up ‘colour revolutions’ both before and behind the curtain. Their goal is to infiltrate, break down and overthrow other regimes. At home and abroad certain enemy forces make use of the term ‘universal values’ to smear the Chinese Communist Party, socialism with Chinese characteristics, and China’s mainstream ideology. They scheme to use Western value systems to change China, with the goal of letting Chinese people renounce the Chinese Communist Party’s leadership and socialism with Chinese characteristics, and allow China to once again become a colony of some developed capitalist country.



Some of this is true, but the particular truths cover over a more general lie. It is of course right that one cannot and should not trust the Western powers’ promulgation of the ‘universal values’ of freedom, democracy and human rights: that universality is false, and conceals the West’s ideological biases. Even so, is it then enough to oppose Western values with a particular alternative, such as the Confucianism that is ‘China’s mainstream ideology’? 



Don’t we need a different universalism, a different project of universal emancipation? The irony here is that ‘socialism with Chinese characteristics’ effectively means socialism with capitalist characteristics, i.e. a socialism that fully integrates China into the global market. The universality of global capitalism is left intact, quietly accepted as the only possible frame; the project of Confucian harmony is mobilised only in order to keep a lid on the antagonisms that come along with global capitalist dynamics. All that remains is a socialism with Confucian ‘national colours’: a national socialism, whose social horizon is the patriotic promotion of one’s own nation, while the antagonisms immanent in capitalist development are projected onto a foreign enemy who poses a threat to social harmony. What the Chinese party aims at in its patriotic propaganda, what it calls ‘socialism with Chinese characteristics’, is yet another version of ‘alternative modernity’: capitalism without class struggle.