Meaning of Merkozy

Translation of a piece by Manuel Castells, from a short while ago, on the secretive anti-democratic arrogance of EU elites, and how self-serving politicians use the terrain afforded them by EU institutions to boost their stature, and also on how leaving the euro is no big deal, really (sort of). Strip the politicians of their power, ditch the euro, get on with building a life lived in common.

Whom does the euro serve?

There is no longer any doubt about the anti-democratic mood in the European Union. Papandreou’s proposal to ask his fellow citizens if they would accept living in Spartan austerity in order to pay with Euros unleashed a financial and political storm which amid threats and insults from Merkozy and Cameron caused the Greek government crisis and turned the country upside down?


What is wrong with people deciding about their health, their education and their employment? Are these subjects too complex for the rabble? Let’s not get carried away, some of us are more qualified than the mandarins. I, along with a few colleagues, shall commit to explaining very clearly to citizens what the euro is about, who benefits from it and who is harmed by it, and what the different possible options are, including sending the euro back to Brussels. On the condition, naturally, that we have the same information that financiers and rulers have access to. The problem is not one of complexity, but of democracy. What politicians fear most in these days is that they get occupied, that they get stripped of that delegated power which they hold onto via a controlled mechanism of choices between options locked within systemic limits and legitimated by the media. A referendum, while not a perfect form of popular decision, opens up a range of possibilities, as long as it is conducted cleanly. What a sight to see European political advisors advising that if there was going to be a referendum it should be done with an intelligent question, that is, biased towards what suits. There is deep elitist arrogance and repulsion towards the will of the people, however much they might try to hide it. Because even if the people make a mistake, they have the right to make it. The time of those who saved us because we did not know what we were doing has passed.


It is not really a matter of saving the people, but of saving the euro, as though this were the same thing. Why is there so much interest? And from whom? Because ten of the 27 EU member states live without the euro and some of their economies (UK, Sweden, Poland) are a lot more solid than the Union average. To defend the Euro until the last Greek is the first line of defence for a currency that is doomed because it covers divergent economies and it has no state to support it.

With Portugal and Ireland in the intensive care unit, Spain hanging by a thread and Italy in a permanent political crisis and in debt up to the ears of its histrionic former leader, the Franco-German defence of the Euro has other explanations than the horror story they tell us about the financial catastrophe that would entail devastating effects in our daily lives as if life depended on the stock market. The first reason is obvious: saving banks, especially German and French ones, which made loans without guarantees to Greece and other PIGS via the manipulation of accounts which, at least in the case of Greece, was carried out by Goldman Sachs’s consultants (by the way, it must be a mere coincidence that Draghi, the brand new ECB president was also an employee of Goldman Sachs). For starters they have to forget about 50% of Greece’s debt, although it is not clear who will end up paying for it. If Greece were to renounce the debt, as Iceland which is doing so well did, a drachma devalued by 60% would make the rest of the debt unpayable. Furthermore, the contagion effect in financial markets would lead to the non-payment of a large part of sovereign debt, sending into bankruptcy those banks that took advantage of the euro to lend without solvency.

So, it is about saving certain banks, and in broader terms, avoiding a new crisis in the financial system. Countries are driven to bankruptcy so banks don’t have to? But why are they doing this? At the end of the day, the Merkozys are not banking sector employees. They have their political interests, country-wise and personally. Germany is the one that really needs the euro to be the European currency and for its partners to be unable to devalue. Because the German model of growth is really the Chinese one: to grow via exports helped by an undervalued currency and cut wages (down by 2% in real terms in the last five years). If there were a strong euro-mark, Germany would lose markets in Europe and competitiveness vis-à-vis Spanish or Italian exports. But there is another political-personal dimension: both Merkel and Sarkozy need to establish their European leadership as much for reasons of internal politics as for plans for national greatness that have to be disguised as European so as not to rouse old phantoms. And the other European political elites? Something similar is happening, their personal importance and that of their country is raised by being the tail of the European lion, since the mouse-like insignificance of their backyard is too small for them. To feel European, in a world in transit from North America to Asia, gives them the impression of being something more than the smalltown products of the party apparatus for which they have so much contempt.

What about us in all this? It is true that the financial debacle that arrival of the euro-peseta will cause (there is no typo in the tense of the verb) will cause transition problems in the economy and in our pockets, in conditions that depend on how the transition comes about. But sovereignty over economic policy will be regained, monetary and financial reality will be adjusted to the real economy, competitiveness will rise, gaining external and internal markets, there will be an explosion of tourism at knockdown prices. The economy could be reactivated by printing currency. Because the essential thing is to grow, not to flagellate oneself. True: there will be inflation. But it is the best prescription for lowering debt, including that of your mortgage.

And the European dream? Well, let’s do that with its people, with love for each other, instead of seeing who’s going to pick up the tab. When you think ‘euro’, think swindle. When you think Europe, think friends.


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One response to “Meaning of Merkozy

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