Translation of an article by the Madrilonia collective, published on their website 6th July.
Do you get up in the mornings and look in the mirror and a Guten Morgen comes out? Do you look at your fellow citizens and feel like calling them wasters? Do your neighbours seem to be getting pig-faced? Worry not, you are being possessed by the spirit of the German government.
In Germany and other countries in the north of Europe, there is an account of the crisis, repeated tiresomely, which puts the blame on ‘wasteful’ countries and confers Germany with a superiority that legitimates its veto power over the future of the European Union. A key figure in Angela Merkel’s party, the CDU, laid it out clearly: “Suddenly Europe is speaking German” (especially in Majorca and the institutions of the EU). The new debtor status held by the ‘bailed out’ countries is placed before democracy in Europe: there are no equal European citizens deciding on the construction of Europe, but rather hierarchical relations between different nationalities. Europe’s ghosts are coming back. Debtocracy is a political relation that imposes legislative and budgetary changes on us against our will and prevents us from making proposals about the design of the Union.
Is this debt legitimate? Are the German elites right and we are nothing more than PIIGS? Is strangling the economies of the south a good solution? How then will there be an exit from the crisis? Eurobonds or the purchase of bonds on the part of the European Central Bank from 2008 would have diminished or rendered unnecessary (by eliminating uncertainty and speculation and as such, the consequent rise in national risk premiums) the bailing out of Greece, Portugal, Ireland and Spain. We would have saved hundreds of billions of euros for the EU and for the ‘bailed out’ countries that would have been able to invest in saving the citizens and not the banks. Bailouts are a hijacking, because they impose adjustment conditions that lead nowhere. They are also a swindle: if the bailouts had been provided at 1%, which is the rate at which the ECB lends to European Banks (including Deutsche Bank and Commerzbank) it would reduce the debt of the bailed out countries enormously. The German government supposedly ought to know that there is a point of no return with debt, which keeps growing until the countries are not able to pay it back, and that the German banks are up to their necks in Greek, Irish and Spanish debt. The question that any European ought to ask is as follows: “What the fuck is Germany winning?” [Translator’s note: this question appeared in English in the original]
1. A national-populist account of the crisis.
When Germany says it’s ‘the Southern countries’ fault’, on the one hand it is hiding the economic interrelation of the European Union and the despotic rule of finance capital; and, on the other, it is legitimating the elimination of social and labour rights that has been in process in Germany since 2003, first by chancellor Schröder with Agenda 2010, and later with Merkel.
To present oneself as an example of austerity and rigour (in contradiction to the facts) legitimates the policies of the German elites, who are always prepared to exercise an iron control over the labour force, both national and immigrant. By defending austerity in Europe, they defend the removal of rights in Germany. Let us remember that the minimum wage does not exist there, jobs are subsidised with public money (mini-jobs), real wages have been in decline for many years, and inequality is on the rise along with the number of poor workers. Imposing these neoliberal measures in Europe seems to act as a consolation for rights lost in Germany itself: “we did it before and it was the correct thing to do”.
But, furthermore, one has to understand that if the German State can continue funding social policies and strategies for corporations and unions that austerity policies prohibit in half of Europe, it is because it is directly driving the peripheral countries to ruin. Many funds take refuge in the German bond, which means that Germany funds itself at rates close to 0% and drives up the risk premiums of the PIIGS, which are calculated in relation to the German bond. Let us recall that risk premiums are a relational matter, the more they go up for Greece and Spain, the more they go down for Germany. It is that simple, arbitrary and unjust. Naturally, any plan for debt mutualisation, such as Eurobonds or the purchase of PIIG debt on the part of the ECB in order to ease the risk premium, is rejected by Germany. At the end of the day, the German government avoids its internal crisis at the cost of the peripheral countries.
Elsewhere, if the fault is that of the Southern countries, where did they got the money, in the case of the Spanish miracle, for a gigantic property bubble? Did capital not arrive from the rest of Europe? Did they not invest this capital, as they have been doing since Francoism, in bricks and mortar on the coast? The German banks fed inflated prices and financed suicidal banking operations. These loans moreover raised the purchasing power of Spanish, Greek and Irish people and in turn, German exports to the rest of the continent (nearly 72% of German exports stay on European soil). The (scarcely democratic) construction of the European Union has entailed the establishment of regional specialisations which have brought with them a transformation in the productive structures of each country. The elimination of farming and ranching areas was a condition for Spain’s entry to the EU. The obligation to remove the vast majority of the industrial apparatus so as not to affect the core countries led to a dismantling of industry in the majority of regions in Spain, not a conversion of production. It is thoroughly unjust for the EU to criticise productive specialisation in tourism and construction when it has been promoted by successive treaties and cohesion funds.
Lastly, to say that the fault is that of the PIIGS and to reactivate all the racist stereotypes (lazy, wasters, irresponsible) is to give a makeover to the European policies that have deregulated the financial system, and all those who have got rich on the back of it and who continue to do so with the sovereign debt crisis. The indebtedness of countries is a business and, right now, many European banks, including German banks, continue to obtain profits by expensive lending to states with cheap money they get from the ECB. Since 2008 the ECB has injected month on month figures that oscillate between €600bn (the GDP of Holland) and €350bn (the GDP of Greece) into the major European financial agencies in a continuous attempt to save their liquidity shortfall (in reality their insolvency). Hence we say that this is bailout in disguise for the European banking sector, at the cost of the populations. The European Union, led by Germany on behalf of the financial powers, is playing at the old tactic of using national borders as containers of the crisis and lines for offloading the costs.
3. Deustchland über alles
“Europe is speaking German” and a little bit of French. Undoubtedly, Germany and France have always been the decision-making centre of the European Union. Since 2008, and more still with the sovereign debt crisis, this leading role has grown exponentially. Now, from the least democratic institutions of the European Union (the ECB, the Commission, the Eurogroup and other technocrats in unknown posts), referendums are prohibited, policies are dictated and presidents are installed. Nonetheless, it remains surprising that the German parliament should decide upon what the timelines and arrangements for payment of this illegitimate debt brought about by the bailouts. Meanwhile, citizens of the bailed out countries have absolutely nothing to say about the issue. Are we Germany’s backyard? Are we slaves of the banking disaster? Are our politicians mere middlemen who take advantage of being so?
What is evident is that the sovereignty of European nation states no longer exists. The decisions are taken in the Eurogroup and certain opinions are worth more than others. There is no democracy in Europe. And without democracy in Europe, the elites will keep on blaming the populations for their own financial excesses and extracting resources from everyone through the mechanism of debt. How does one confront the power of the financial elites with a majority in the Reichstag? The governments of Spain, Greece, Portugal, Italy and Ireland are the weakest links in the European chain of command. If there are shifts in the balance in these countries, there is no doubt that the Banking Reich will be forced to adopt a different tack. How might the chain be broken in the weakest links? On the one hand, pressure from the markets and the European Union brings about cuts and deepens governments’ loss of legitimacy. On the other, mobilisations must play a central role in the democratisation of Europe. In Greece they nearly managed to see off bipartisan rule and force a change in European policies without an exit from the euro. In Spain, it still has not been possible to stop the cuts, or to achieve a real democracy, despite the rise of the 15M movement and the huge mobilisations in education and health. Let us not despair, a good attack is the best form of defence.