Analysen

Parties and Democracy LEFT-WING STRATEGIES IN THE EURO CRISIS

A COMMENTED OVERVIEW

Mario Candeias Contents

1 Authoritarian neoliberalism and post-democracy in the European Union 2 1.1 Surfing on the waves of the crisis: The German export economy 4 1.2 A perspective for the countries in crisis? 7 1.3 Southern Europe – a special economic zone? 9

2 EUROPE.left? A synopsis of (diverging) positions in the Left Party 13 2.1 Short-term crisis intervention 13 2.2 Financial market regulation and a public banking system 15 2.3 A European clearing union 19 2.4 Marshall Plan, European industrial policy and a socio-ecological re-orientation 20 2.5 Fair taxes: wealth is taxable 21 2.6 Social corridors and minimum standards 22 2.7 The euro exit – selected positions from outside the party 23

3 Re-foundation of Europe 26 3.1 From pro-European to Euroscepticism 26 3.2 The condensation of societal mobilisation 28 3.3 Strategic disruption 30 3.4 Winning the majority in the heart of the beast? 32

Literature 35 2 1 AUTHORITARIAN NEOLIBERALISM AND POST-DEMOCRACY IN THE EUROPEAN UNION

It seems to have been confirmed that mines the bourgeoisie’s social foun- authoritarianism is (probably) the ‘last dation” and therefore – particularly in conjuncture’ of neoliberalism (Can- times of crisis – makes the bourgeoisie deias 2004 and 2009). Neoliberalism “yearn for the former more incomplete, confronts the crisis (as in earlier major more undeveloped, and precisely on crises) through an intensification of the that account less dangerous forms of old mechanisms of regulation (Can- this [democracy’s] rule” (Marx, MEW deias 2008; IfG 2011). The crisis is being 8: 140). For Friedrich August von Hayek used to strengthen neoliberal principles (1980: 156), a pioneering neoliberal the- through the implementation of cuts in orist, and ordoliberals such as Wilhelm social services and the intensification Röpke (1958: 107) democracy and dic- of the ‘debt brake’ (or Schuldenbremse tatorship are therefore not irreconcilable in German), and to help anchor these opposites, but rather different methods principles constitutionally in the whole of gaining power. of Europe. The aim is to re-establish the By no means does the technocratic ‘trust’ of financial markets and to disci- political ‘solution’ help to overcome pline politics. Whenever it is perceived the (organic) crisis; it simply ensures an as necessary elected governments are unjust distribution of crisis outcomes, forced to step down and are replaced and safeguards dominant interests in by supposedly neutral technocrats, as times when the ruling neoliberal bloc happened in Greece and Italy in 2011. has long forgone its ability to lead and This leads to power being re-distributed to organise an active consensus. The via constructed, supra-national con- increasing political instabilities, particu- straints to justify social cuts including larly in some eurozone countries, are cuts to working rights, as well as privati- a symptom of this. Between 2009 and sations and the expropriation of debtors. 2012, there were early elections and gov- This serves to delegitimise the claims ernment reshuffles in 12 EU countries, of people whose primary interest is not of which nine were eurozone countries. ‘stability-oriented’: employees, unions, With the exception of Belgium, these the unemployed and the socially margin- were all caused by disputes over the alised. “To an even greater extent than extent of social cuts under the diktat of before, the re-orientation of the EU is the Troika: the European Commission, becoming a decisive terrain for the strug- the European Central Bank and the gle surrounding social developments, International Monetary Fund. But the also in Germany” (IfG 2011: 6). governments that remained in office, Marx describes a post-democratic situ- for example, in Greece, Portugal, Spain ation in the following terms: democracy and Slovenia, are also unstable. At the is the “complete” political form of the end of February 2013, the Bulgarian capitalist mode of production. “Instinct”, government stepped down, and estab- though, teaches the bourgeoisie that lishing a government proved to be very democracy “at the same time under- difficult in Italy. Be it by social demo- crats or conservatives, authoritarian (the five stars movement), and in Poland, 3 ‘austerity measures’ are being enforced the Palikot Party. Even more worrying is on populations irrespective of mass the fact that the strength of right-wing protests. Even within their own ranks, parties (both populist and extremist) is political parties are losing legitimacy: growing in Greece and Italy. It is growing 1.5 million Portuguese citizens (15 per even more so in Hungary, which has cent of the population) followed the call become the first EU country whose par- by the Indignants movement to protest liament has withdrawn the right of the on the first March weekend in 2013 and constitutional court to determine the demanded – much like demonstrators in conformity of new laws with the consti- Spain – that the government step down tution. This turns the defence of democ- and end their destructive cuts. The Troika racy into a European task, whereby, con- price tag for loans of 78 billion euros for sidering the widespread perception of a Portugal, 65 billion for Spain and 31.5 lack of opportunities for participation, it is billion for Greece (the next credit tranche) necessary to unite the struggles of social consists of strict austerity measures that movements and left-wing parties. will do away with the last remnants of In the core European Union countries, the European welfare state. In Bulgaria, the number of protests will also rise. Par- with its rudimentary welfare state, the ticularly if the agreements – which had to drastic rise of electricity prices and other be signed by Ireland, Greece and Portu- living expenses have not been compen- gal in order to receive EU rescue pack- sated by social security. Consequen- ages – on the deregulation of national tially, people took to the streets day after labour markets and further privatisations day, asserting their right to a home with contained in the Memoranda of Under- heating. Severe confrontations between standing are implemented. France is the police and protesters occurred at the already witnessing protests against end of February 2013, which eventually socialist government policies that, based led Prime Minister Bojko Borissow to on the Gallois report1 and similar to the step down. How long the Greek gov- German Agenda 2010, are spurring a ernment can continue to withstand the cutback of worker’s rights and social pressure of protests and general strikes security. is as unclear as the situation in Slovenia In southern Europe, coercion is laid bare; or Spain, where government politicians effort is no longer made to develop a are involved in corruption, and auster- consensus. Faced by the uncertainties ity measures are implemented without caused by the crisis, the ruling classes remorse. are divided over the measures needed to Wherever the left has become insignif- end it. The regulation of financial markets icant, or social movements are weak or has come to a halt, debt reduction has without political partners or where these failed and financial over-accumulation is partners (and this includes the left) have become part of the establishment and 1 In a report for the French government ex-EADS CEO Louis Gallois proposes 22 measures, part of which he calls “compet- therefore incapable of providing society itiveness shock”, to promote competitiveness particularly in with alternatives, anti-parties develop. industry and the labour markets. In essence, these measures are about reducing unit wage labour costs by 30 billion euros In Italy it is Beppe Grillo’s Cinque Stelle (see also Dell Home/Wolf 2013). 4 growing (albeit more slowly than before The green economy’s potential cannot 2008). Still, with a view to the authori- be exploited under authoritarian neolib- tarian preservation and exercise of state eralism (left-wing Keynesian solutions power, the ruling classes are unified in are currently even less enforceable). their strategic focus on “the state as Antonio Gramsci distinguished between the ultimate guarantor of their survival” two forms of authoritarianism (or Caesa- (Porcaro 2013: 135). This is done ‘step- rism): one that permits only a quantitative by-step’ in the dark, and an incremental development of the particular society (the policy is enthroned as an act of rationality policy of Napoleon III), and forms (relating in uncertain times. The crisis continues to to Caesar and Napoleon Bonaparte) that require adaptation, and principles have actually lead to qualitative innovation (see to be thrown overboard: whether this ibid.: Heft 1, 194 f.). Neoliberal authoritari- means debt cuts, emergency lending anism is not capable of Caesarism. institutions, further rescue packages, a loosening of payment terms, a buy-up of government bonds by the European 1.1 Surfing on the waves Central Bank (ECB) or European banking of the crisis: The German control, in nearly all these cases the Export Economy German government has at least had to “We have managed the crisis well,” the revise its position. Often this has hap- German government and media repeat. pened too late and actually further aggra- The gap between the economic situ- vated the crisis. ation in Germany and the rest of the “Due to its lack of attractiveness and inad- EU is becoming ever greater. Whereas equate economic potential, authoritari- the European periphery is sinking ever anism is certainly too limited to develop deeper into a debt crisis and depression, into a hegemonic project in its own right” crisis corporatism and crisis manage- (Candeias 2009: 16). As a result, “The ele- ment have been comparatively success- ments of a solution cannot develop with ful in Germany. The magic words are bank the necessary speed. Those in power rescues, short-time working benefits and cannot solve the crisis; yet they wield the cash-for-clunkers programmes (to the power (which prevents other people stimulate car purchases), that is, quite the from solving the crisis). As such the only opposite to the policies of cuts inflicted power they have is the power to prolong upon other countries. Economic stimu- the crisis” (Gramsci 1991–2002, Gef., lus packages helped balance in part the H.14, § 58). In fact, solutions to the inher- enormous investment needs of schools ent systemic crisis are being blocked: and other infrastructure. Cuts in social financial over-accumulation cannot be and public services were comparatively tackled without either a massive destruc- moderate because benefits (from unem- tion of capital or the development of new ployment benefits to pensions) were cut fields for accumulation. In this respect, before the crisis, the retirement age was the dynamic of ‘Green Capitalism’ – the raised and public goods were left without green economy – is restrained by the funds and sold off. fossil fuel faction of capital and the limi- After Fukushima, Merkel’s government tations caused by austerity measures. rapidly changed its position and called for an end to nuclear power, and an energy in workloads, as well as overwork and 5 transition. At her party’s last party con- an increasing lack of time. At the same gress, she spelled out the key issues for time, the salaries of many people who the future: consolidation of budgets and are not part of the core workforce or who ecological modernisation (which sounds work in other branches are too low, as like a programme for a future coalition are unemployment benefits. Real wages between the CDU and the Green party). have stagnated for over a decade and sal- Currently Angela Merkel and Ursula von aries have dropped by over 20 per cent in der Leyen are even talking about intro- the low-wage sector since the introduc- ducing a kind of minimum wage, combat- tion of Agenda 2010. For many people ting poverty among the elderly and more and households this is hardly enough generally emphasising social needs. This to cover their basic needs. Accordingly, gamble is aimed at taking the wind out of even during economic upturns domes- the sails of the struggle for a higher stat- tic demand is weak. Government invest- utory minimum wage. All of these meas- ments cannot balance this, because ures are relatively successful attempts to public services and infrastructure have manage the crisis, take the edge off pro- been thinned out for decades. Moreo- tests and involve the unions. Faced with ver, the continuation of the old indus- the upcoming parliamentary elections, trial model of economic development social democrats and greens have also is reaching its ecological limits. Both begun emphasising social questions. The government and media fail to mention playing field for DIE LINKE (the Left Party) the lack of development in salaries in is certainly becoming smaller. Germany, the trade surplus and the loan From the German government to the IG policies of German banks as causes of Metall union, many people see their ideas the euro crisis. Instead, they prefer to rant as having been confirmed by the success about the supposedly lazy Greeks. This of the ‘German model’. For a long time it invokes the spectre of the euro crisis: that was said that in the future we would be other people are worse off in other coun- living in post-industrial societies. The tries is used to show that in Germany the focus in the US and Britain on well-paid reduction of wages and salaries, the drop financial services and low-wage prox- in the standard of living and the cuts to imity or personal services was seen as social security – that is, Agenda 2010 – a model. Meanwhile though, it is clear were both right and necessary. that the weight of industry in Germany’s Prognosis confirmed: obviously, Germany economic make-up has secured employ- has not gone unscathed in the crisis. Its ment (although this is a controversial one-sided dependency on exports in debate between service sector and combination with the austerity meas- industrial unions, because Scandinavian ures implemented throughout Europe countries, which have a large services endangers the existence of its industry. and relatively small industrial sector, Hardly any other country is so depend- also fared relatively well in the crisis). ent on exports as Germany (exports However, employment and relatively high account for nearly 50 per cent of GDP). wages in the core industrialised countries As could be expected, southern Europe often depend on considerable increases delved into a depression and the rest 6 of Europe went into recession in 2012 China (an increase of 28 per cent com- (Candeias 2010b: 61). Still, our prognosis pared with last year) and the other (partly that Germany would basically be able to overestimated) BRICS states,2 emerging continue as before, has been confirmed. economies such as Turkey, Indonesia, Global demand did decrease but there Vietnam and Mexico offer better condi- was no dramatic drop. “In this case, tions and higher growth rates – a poten- successful German exports (albeit at a tial that southern European economies lower level) could well ensure German are unlikely to demonstrate for years to growth without requiring a fundamental come. The new capitalist centres and the change of model. At most there will be upcoming semi-peripheral economies small and gradual changes – driven by have one great advantage: unlike Greece, a loss of acceptance and events such Portugal, Spain and Italy, countries in as the Fukushima disaster – towards which industry has severely contracted energy transition and ecological mod- over the last few years, their productive ernisation. Within the context of a weak structure remains competitive. global dynamic, reduced demand from According to Erhard Crome, this also the new capitalist centres – China, India means that: “For Germany, EU integra- and Brazil – combined with a half-hearted tion is no longer a goal in itself; rather, ecological modernisation could be it is the pre-condition for the interna- enough to temporarily maintain the ben- tional weight of Germany – a stand- efits of the German economic model of ing that builds on its strong position in exportism at the expense of other coun- global trade. In other words, Germa- tries. Precisely the weakness of the euro- ny’s dominance in the EU is the basis zone could lead to a relative undervalua- for its expansion in global trade” (taken tion of the euro and improve the position from IFG 2011: 6). As such, the German of Germany vis-à-vis competitors such as government’s priority is economic and Japan” (IfG 2011: 8). political domination but has no aspira- Germany’s export industry is clearly tions to hegemony. Interests are thereby suffering. Still, it is growing, although ideologically inverted and raised to the slower than before, and is even achiev- level of general principles. “The German ing record surpluses (188 billion euros elites are not interested in domination in 2012 according to the tageszeitung, as such, but in the dominance of certain 9.2.2013). Although exports are still principles” (Brangsch 2013). The result mainly into eurozone countries (in 2012 is a rule without leaders in Europe on the a total of 411.9 billion euros), the value basis of the smallest common neolib- of exports (minus 2.1 per cent compared eral denominator: social cuts along with with 2011) and exports to eurozone unavoidable measures to stabilise the countries as a share of total German financial and banking sectors. This is the exports (still slightly over 37 per cent) basis on which European integration is are decreasing. “This is the continuation to be deepened. Despite this, there is no of a longer-term trend” (IfG 2011: 8; see consensus about the finality of the Euro- also Candeias 2010a). For several years pean Union (see the most recent speech now, the growth of exports has been 2 The BRICS countries are China, Brazil, Russia, India and driven by other growing markets. Next to South Africa. by Cameron; Dellheim et al. 2013). Even nied by a further differentiation of wages. 7 though it seems unlikely that the EU Social democrats pointed to the impor- itself will break apart, this could occur tance of EU regional, structural and with monetary union; and a return to conversion funds that aim at balancing the model of a free trade area plus is also living standards. Nonetheless, integra- within the realms of possibility. The strat- tion into the European internal market egies of the left need to take all possible and monetary union led to (welcomed) scenarios into account. differentiation: the massive investments into infrastructure and European net- works (for transport, energy, etc.) served 1.2 A perspective for to open up the markets of the European the countries in crisis? periphery. Europeanization also meant What kind of roles and perspectives are globalisation and the abolition of national reserved for the southern (and eastern) restrictions on trade and capital flows crisis countries – and possibly Ireland – designed to protect national produc- in this authoritarian neoliberal and tion. In spite of low wages, the periph- post-democratic Europe? ery’s industrial structures did not stand The left’s criticism at the end of the 1990s a chance against the highly produc- of the structure of monetary union as tive competition. A massive process of enshrined in the Maastricht Treaty and de-industrialisation set in and traditional the Stability and Growth Pact has been branches closed down, which was by shown to be justified. The monetarist no means compensated through invest- form of the agreements only took into ments by transnational corporations account the level of debt, new borrowing (such as Volkswagen). To a certain extent and inflation, but not current account bal- (and this also occurred in East Germany) ances, the development of productivity profitable businesses were bought by or levels of social benefits and salaries. financially strong competitors and then This meant that different productivity closed to reduce over-capacity, to secure levels in the individual member states their own business locations or to then and regions of the European mone- open even more productive ones (for tary area could no longer be balanced example in eastern Europe). It was not through the exchange rate; at the same least the constant pressure of rising pro- time, there were no minimum stand- ductivity combined with wage restraints ards, no balancing of current accounts in Germany’s export industries that and no intra-national equalisation trans- murderously ruined southern European fers (beyond regional equalisation and industries through competition.3 As an conversion funds). The only possible balancing mechanisms remaining are 3 Jannis Milios, a consultant for Alexis Tsipras, and Dimitris Sot- iropoulos (2010) suggest that the current account deficits of the wage and collective bargaining policies crisis countries are not the cause but the result of high capital inflows. They deny the pressure from German industry compet- (Busch 1996: 61; Altvater/Mahnkopf itiveness. They argue that the high rates of growth and invest- 1993: 93), as well as a further cutback ment in Greece before the crisis are due to the high profitability of capital, as opposed to a lack of competitiveness. Given the of state social security in countries with fields of foreign investment, especially in the financial and con- current account deficits. The equalisation struction sector, we doubt this to be the case, and view current account deficits as an expression of a combination of compe- of price levels across Europe is accompa- tition and the pressure caused by cheap credit and rising debt. 8 alternative low-wage location, though, period, the demand from private house- southern Europe was not cheap enough holds, companies and governments in compared with eastern Europe and even the deficit countries, which was financed less so compared with Asian countries. through credit, supported German Agriculture in southern Europe in con- exports and led to modest growth rates trast survived by becoming an efficient in Germany. The speculation boom drove agro-industry.4 This has led to extreme prices up: the general level of prices in exploitation of workers, most of them large cities in southern Europe is today poorly paid – often illegalized – migrants, considerably higher than in most German and of water, as well as the destruction cities, in spite of lower salaries. of fertile soils and biodiversity. In con- The unions tried to balance the gap sequence, exports of products other between the development of prices and than agricultural products have become wages, also in other countries of the insignificant.5 Countries such as Greece periphery. In Poland and in Greece, real or Portugal, therefore, have had to face wages increased by 40 per cent between massive trade balance deficits. 2000 and 2008, in Britain by 26 per cent, The only option for governments such as in France by 10 per cent and in Spain the Greek government is to drive growth by 4.5 per cent, whilst in Germany they through state spending (and private bor- sank by 1 per cent over the same period. rowing) to compensate for the loss of This has not really improved the com- jobs, which would lead in turn to rising petitiveness of the European periphery. budget deficits. Other countries such as Moreover, households tried to maintain Spain or Portugal, in spite of trade balance their levels of consumption (or to even deficits, were able to keep national debt increase consumption) and (faced with relatively constant (Spain’s debt actu- basically non-existent rent markets) ally decreased) over a long time as a to buy housing property by massively result of rising revenue from economic indebting themselves, which, in times of growth. With the rising importance of low interest rates, banks told them was the building and financial sectors, as not a problem. Berthold Huber, presi- well as the state services sector (which dent of the IG Metall union, misses the had previously barely existed), mass connection between the pressures on unemployment was slowly reduced. prices and wages when he declares that The boom connected to this was driven the (Spanish) metal worker unions had by a mechanism that left-wing critics of “made the equality of real wages their monetary union had not thought about: top priority for collective bargaining” and the massive expansion of credit. Credit had thereby “forfeited their advantage expansion was not a problem as long of being cheaper than German industry” as interest rates stayed low, as the high (quoted by Bernd Riexinger, in: Junge liquidity of the markets ensured cheap Welt, 11.1.2013). credit and government bonds always found willing buyers (not least the large 4 This is especially true for Spain. Greece, however, even has a trade deficit in the food sector. 5 Between 1997 and 2007 German banks). The immense export of (the year before the crisis), the trade deficit in Greece increased capital from surplus countries guaran- from 14 to 38 billion euros, in Portugal from 8 to 15 billion euros, and in Spain from 12 to 88 billion euros (data compiled from teed continued refinancing. Over a long the AMECO database). The inflationary credit circle, based on working hours for public employees, 9 diverging current accounts in Europe, cutbacks in working rights, strike reg- prevented the pressure to adapt within ulations and social rights, a collapse of the monetary union from having a public services (including healthcare, quicker effect on wages, labour agree- especially in Greece), and half a million ments and transfer payments. Only with property evictions (in Spain), as well the crisis and then especially as a result as a massive rise in fees and taxes (par- of the austerity programmes ordered by ticularly VAT). Meanwhile, for many the Troika, did government debt rapidly people the strain has become unbeara- rise.6 The Troika also implemented ble: the number of cases of depression so-called internal devaluation, suppos- has exploded, suicides are the order of edly so that the countries in crisis could the day, and hundreds of thousands of become competitive again. But what people are leaving the country (in Spain does ‘internal devaluation’ mean for nearly a million people have left since the a comparatively poor country such as onset of the crisis); but protests are also Greece with an average monthly wage of growing. roughly 700 euros? To achieve competi- But what is the goal of such brutal auster- tiveness, wages would have to be cut by ity measures beyond attempting to guar- another 20 to 30 per cent. Actually, this antee (state) bonds? Is it to take away is about the amount wages have gone power from wage-earners and annihilate down since the onset of drastic austerity the unions? What would happen then? policies: the minimum wage has been What model of production could the reduced by 22.8 per cent. But in a Europe countries in crisis follow in the future? tending towards deflation, even that was And what kind of division of labour might not enough to increase exports. In any work in the eurozone? case, what could Greece export, consid- ering the rate of de-industrialisation and its lack of productivity and innovation? 1.3 Southern Europe – Currently, the result is a spiral of misery: a special economic zone? mass layoffs and an official unemploy- It is debatable “whether it is a necessary ment rate of at least 25 per cent – and evil or a blessing of the market economy rising. In Spain alone 3.5 million people that weak companies are pushed out of have lost their jobs since 2008 (Frank- the market, are broken up and disappear. furter Allgemeine Zeitung, 16.2.2012), But the simple question of where the EU whilst the youth unemployment rate member states that lose out in competi- lay at over 60 per cent and the unem- tion are to go already demonstrates the ployment rate among 50 to 60 year olds stupidity of the neoliberal concept of the exploded without any perspective of EU as a group of competing states. Are getting back into a job. Austerity-based 6 Between 2000 and 2007, Greek national debt rose by 4 per labour market reforms in Spain further cent; between 2008 and 2011 it dramatically increased by 58 relaxed layoff regulations, leading to per cent. In Portugal, national debt had increased by as much as 20 per cent by 2007; however, during the crisis and the aus- another 850,000 people becoming terity measures, it increased by a further 40 per cent. In Spain unemployed (ibid.). Adding to this are debt actually fell by 23 per cent between 2000 and 2007, but between 2007 and 2011 it increased by more than 33 per cent drastic wage and pension cuts, longer (own calculations based on data from Eurostat). 10 such states to disappear from the ‘market position inverts the causes of the crisis, of states’? Ought Greece be broken up and is also shared by the German govern- and the workers of Greece Inc. – that is ment. Everywhere in Europe they expect the Greek population – made to look for ‘difficult reforms’ – similar to Agenda a new place to work?” (Troost/Hersel 2010 – to be undertaken, even in coun- 2012: 2). Probably not. What, accord- tries such as France (ibid.). ing to the neoliberal block currently in Concerning the future development of power, should happen with economies Greece, some representatives of this like the Greek one? Will southern Europe position take NAFTA and the special develop into a kind of special economic economic zones in northern Mexico zone? and southern US states as an example William Tabb,7 the critical economist, to follow. Low taxes, a hostile climate brings it to the point: “Greece is not for unions, low wages and poor working the problem; the problem is Germany. conditions made re-industrialisation pos- The EU should expel Germany from the sible. Outsourcing into these regions euro.” This was an ironic statement, has led to an extreme weakening of the although based on real causes. This unions in the old industrial centres of though does not stop the former presi- the US. This is probably a pipe dream dent of the Federation of German Indus- of the BDI and the association of try BDI (Bundesverband der Deutschen German employers (Bundesverband der Industrie) Hans-Olaf Henkel from taking Deutschen Arbeitgeberverbände). the idea seriously: “There is an alternative In fact, the Greek government took up to the professed ‘euro policies without negotiations with the European Union alternatives’: the joint exit of Germany, in 2012 to permit the development of the Netherlands, Austria and Finland” special economic zones in selected (Handelsblatt, 10.12.2010). The BDI’s regions of the country. The government current president, Hans-Peter Keitel, promised that this would not be con- thinks differently: he believes that the nected to further wage cuts (the monthly countries in crisis “will have to shoulder minimum wage had already been their problems mainly by themselves” reduced from 751 to 586 euros), and (Spiegel Online, 10.9.2012). But, “as a collective bargaining agreements were businessman I would not let a wretched to remain valid. Faced with daily labour daughter fall; I would make sure she struggles and strikes, together with the changes. That is, Greece should become often harsh reaction of the government, a kind of special economic zone within which went so far as to limit the right to the eurozone, equipped with the nec- strike and criminalise unionists, these essary financial means and external EU government commitments seem more personnel” as well as “pledges”. For than doubtful. years to come, substantial rights of sov- Lower financial burdens and less bureau- ereignty are to be suspended. “Quid pro cracy for investors are enough to spark quo; no solidarity without control,” Keitel utopic levels of economic growth. Yet demands. He goes on to warn that other the desperate situation will not neces- countries should not be permitted to 7 During the “North American Left Dialogue”, held by the Rosa overstretch Germany’s capacities. This Luxemburg Stiftung on 1 December 2012 in Berlin. sarily lead to greater foreign investment, Consequentially, conservatives and neo- 11 and so the president of the European liberals in particular demand a Greek Parliament, Martin Schulz, (a member exit from monetary union: the so-called of the German Social Democratic Party) Grexit. Except for some prominent demands additional investment sub- people such as Hans-Werner Sinn, Hans- sidies for companies. Spelled out this Olaf Henkel, Thilo Sarrazin or the German means that the country is supposed to Liberal Party’s Eurosceptic spokesper- forego potential revenue and pay further son, Frank Schäffler, a Grexit has not subsidies. However, in the past in East been called for by any relevant business Germany and eastern Europe (and in association or government. Still, Grexit pre-crisis Greece) the combination of low partisans have substantial weight in the taxes and subsidised company re-loca- German media and offer the German tions proved to be ineffective, because government strong arguments that these then quickly move on to other support the government’s own position: places. On top of this, Schulz demands Greece should keep the euro and receive the establishment of an “agency for further support in exchange for even growth”. “The Greek state must accept more severe austerity measures and that the reforms are implemented in reductions in its sovereignty. Greece by EU bureaucrats”.8 According to a study by Prognos, a Considering the generally recognised Greek exit from monetary union would lack of competitiveness, it is not at all entail costs of approximately 17.2 tril- clear what is actually going to be pro- lion euros in the 42 most important duced.9 Competitiveness can hardly economies. Germany alone would have be restored simply by cutting wages, to accept losses of around 73 billion reducing taxes even further and offering until 2020. Beyond this, the write offs more subsidies. On this point, Hans-Wer- for private and public creditors would ner Sinn, president of the (neoliberal) cost 64 billion euros (if creditors were to Ifo-Institute for Economic Research, write off 60 per cent of the debt and the is for once actually right: “To compete drachma were to be devalued by about with Turkey, Greek goods would have to 50 per cent). Greece itself would be hit become 30 per cent cheaper” (Spiegel hardest. According to calculations, the Online, 20.2.2012). After “modern country would have to deal with growth forms of capital destruction first threw losses worth over 164 billion euros until Greece back to the level of an emerging 2020 (Handelsblatt, 17.10.2012). The economy, a limited upswing now seems possible” (Händel/Puskarev 2012b), yet 8 Tagesschau 2.9.2012, available at: www.tagesschau.de/ wirtschaft/griechenland-rettung100.html. 9 This is not so this would occur without any perspec- much a question of competitiveness for countries such as tive of ever climbing beyond a provider Greece that have traditionally had a low level of external trade. In such countries, the negative multiple effects of austerity of skilled yet cheap workers. The Euro- are more important, even if (their rather meaningless level of) foreign trade does also add to this. 10 This is particularly clear pean Union has no model of production in the case of Cyprus: it is obvious that the island’s oversized to offer Greece, and no new model for a financial and banking sector must be massively reduced. But what else could the island rely on? Besides tourism, and the sustainable European division of labour hope of profiting from recently discovered gas fields off the that would be capable of preventing the coast, it really does not have much economic potential. Cyprus also needs an alternative economic model and a model of Euro- same result coming about again.10 pean division of labour based on solidarity. 12 most dramatic consequences though term in a true transfer union; this though would be the immediate ones. After an is not planned. Troika measures hardly exit, “capital markets would also lose go beyond granting a little more time confidence in Portugal, Spain and Italy” to implement austerity measures and and cause “state defaults there too”; resorting to ever-new measures to tem- “the global economy would be dragged porarily prevent a default and stabilise the into a deep recession” (ibid.). It would banks. This neither improves the income therefore be cheaper to supply Greece of member states nor does it change the with the financial support it needs to structure of the monetary union itself. restart its economy over the medium The great inequalities remain untouched. 2 EUROPE.left? A SYNOPSIS OF (DIVeRGING) 13 POSITIONS IN THE LEFT PARTY

The Left Party aims to alleviate the finan- The government of such a country then cial and social strain on people through has 10 days to prove that special circum- short-term crisis interventions – at the stances exist and to explain the measures cost of those who caused and profited that will be taken to reduce its structural from the crisis. Second, it wishes to open deficit. If this is not done, sanctions apply. an alternative pathway for economic The tightening of the Maastricht crite- development in Europe that is both ria is thereby doubly secured: through resistant to crisis and centred on social automated procedures at the level of the justice. Third, the Left Party has a sustain- European Union and through permanent able vision for the future of the project national provisions, where possible at the of European integration (see Die LINKE constitutional level. The one-sided aus- 2013: 46). This chapter limits itself to terity measures connected to the fiscal aspects closely related to the euro crisis. compact intensify the crisis and are a The numerous proposals and positions direct attack on working and social rights. have so far not been brought together; As Bernd Riexinger and Sahra Wagenkne- the following is an attempt to do so. cht12 state, the brunt of the consequences of the crisis are loaded onto transfer payment receivers and wage-earners. 2.1 Short-term Sadly, the Left Party was the only party crisis intervention in the German parliament to vote against So far, the Left Party has publicly and the fiscal compact (the Green Party, with visibly taken a stance against the author- the exception of Hans-Christian Strö- itarian and neoliberal management of bele, voted in favour, in spite of declaring the crisis and in particular against the beforehand that it would not do so). fiscal compact. The compact expands In this context, the Left Party also posi- the EU’s tested excessive deficit proce- tioned itself against the establishment dure11 by ratcheting up the requirements of a so-called European rescue fund. The of the Stability and Growth Pact and permanently inscribing this – wherever 11 If member states have budget deficits of more than 3 per possible at the constitutional level – into cent, the European Commission launches an “excessive deficit procedure”. In a first stage of this process, the countries con- national legislation. The fiscal compact, cerned must submit a plan on how they intend to reduce the deficit. If they do not keep to this plan, penalties can be inspired by Germany’s ‘debt brake’, aims imposed of between of 0.2 and 0.5 per cent of GDP of the to counter the European debt crisis by country concerned. The EU Council of Ministers may require deficit countries to make an “appropriately sized” non-interest ‘taking partner countries by the hand’, bearing deposit in Brussels until the excessive deficit has been and enforcing budgetary discipline and corrected. A state may also be asked to publish additional infor- mation before issuing bonds and other securities. The Council a strict orientation towards competi- can also call on the European Investment Bank to reconsider its lending policy with a specific country. Whether penalties are tiveness. Moreover, the members of the actually imposed depends largely on the power of a member eurozone have committed themselves to state to block this process; however, it does at least act as a disciplinary mechanism, irrespective of whether specific sanc- procedures against countries that breach tions are imposed. 12 This was expressed at the meeting of the the Stability and Growth Pact, which are Rosa Luxemburg Stiftung “Europa kriegt die Krise” during the “Fest der Linken” on 16 June 2012 in Berlin, see: www.rosalux. overseen by the European Commission. de/event/46273/fest-der-linken-2012.html. 14 newly established European Financial isation of (financially stricken) banks. She Stability Facility (EFSF) and the Euro- then pleads for more private banks to be pean Stability Mechanism (ESM) have allowed to go bankrupt, whereas other been and remain necessary instruments party representatives such as Troost point to intervene and support banks and to the Lehman bankruptcy and warn of governments. The form of such ‘rescue the unpredictable consequences. packages’, however, is unacceptable. In the at-times-polemic debate, there The balance is tilted: on the one hand, is an evident divide between short- hundreds of billions of euros are spent term and medium-term perspectives. A to save the banks and ensure that states common denominator within the Left are able to service their debts, with these Party, however, is the criticism of the one- costs being loaded onto society; yet no sided decisions being made during the funds are available for social security. crisis, and who is expected to pay for the In fact, rising costs to save banks and crisis. The party also shares a perspec- finance states are tightly bound to auster- tive on the socialisation of banks and ity measures, and a cutback of the sov- the creation of a system of public banks ereignty of affected states, to the benefit (see below). The latter, though, is hardly of the troika. The point therefore is not conceivable, at least in the short term. generally to be against short-term crisis From our point of view, unconventional interventions or rescue funds, but against quasi-Keynesian injections of liquidity their neoliberal and authoritarian form. by the ECB should be able to prevent the The same is true for the buy-up of billions worst. At the same time, a radical debt of euros worth of (government) bonds cut as demanded by Wagenknecht could by the European Central Bank and their also alleviate the situation (Candeias liquidity injections for banks worth further 2010c). Opinions on the consequences billions of euros. In particular, the buy-up of such a measure, however, are divided: of government bonds – indirectly via the Troost believes small savers and pension so-called secondary market – was harshly funds could also be affected. Financial criticised by the German representatives markets could interpret a radical debt within the ECB and the German govern- cut as a default and initiate a chain reac- ment. Axel Troost from the Left Party, tion. A breakup of the eurozone would though, endorsed the bank’s unconven- have unpredictable and catastrophic tional way of proceeding. According to consequences and entail mass poverty. Troost, in the short term it stopped inter- It is also unclear whether Greece alone est rates on bonds from crisis countries should profit from a debt cut, or whether from continuing to rise and prevented an all the crisis countries or even further imminent default and thus a chain reac- countries should also benefit from it. tion. Sahra Wagenknecht, on the other Still, these problems could be solved hand, criticised the renewed “circum- within the framework of a public debt vention of parliaments” and the devel- audit (see below) (Candeias 2011).13 opment of the central bank into a “dump

for toxic assets” whilst the costs continue 13 See the Greek debt audit campaign, in: LuXemburg 2/2012, to be loaded onto society. Instead, she pp. 34 f; see CADTM – Committee for the Abolition of the Third World Debt: http://cadtm.org/Citizen-debt audits-how-and- demands tough debt cuts and a social­ why. Such an audit would have to provide the markets”, and the European Central 15 answers as to how the demands of small Bank should directly finance eurozone savers and pension funds – and to a states within a defined margin. certain limit also life insurances – could be guaranteed. Regarding the annulment 2.2 Financial market of debts, Troost and Wagenknecht state regulation and a public (2013): “In order to limit the damage to banking system the public coffers, banks and hedge Because current EU legislation bars the funds should immediately be forced European Central Bank from directly to cancel their remaining Greek debt financing states (the only way is via the claims.” The draft manifesto of the Left European Investment Bank and this is Party for the 2013 general election states limited to infrastructure programmes), that: “rescue-package-related debts with the Left Party and the DGB (the German the banks [should] be cancelled. The Union Confederation) demand the estab- public should guarantee the savings of lishment of a bank for public loans (see small savers and the legitimate lending Hersel/Troost 2012). This would be possi- business of banks” (the Left Party 2013). ble under current legislation. Consensus also exists on the trillion-euro The Left Party also supports the introduc- liquidity injections implemented for tion of a true financial transaction tax of the banks. It was hoped these injec- between 0.05 per cent and 0.1 per cent. tions would lead the banks to directly This is because the plans of the German buy crisis-country government bonds government and the EU Commission on the primary market and thereby foresee either a low level of taxation or lower these countries’ interest rates. It numerous exceptions, particularly for is absurd that banks should be able to derivatives such as the especially dan- borrow cheaply from the ECB and then gerous credit default swaps.14 In the re-lend for higher interest rates to states. EU Commission plans, these are to be Instead of providing income to banks taxed by only 0.01 per cent. This would through risk-free interest – or publicly further promote a shift away from tradi- subsidising extra profits – it would make tional standardised stock market prod- more sense and be cheaper to refinance ucts such as shares and loans towards crisis states directly via the central bank derivatives (Frankfurter Allgemeine at low interest rates. The entire liquid- Zeitung, 16.2.2013). With a true financial ity thus made available should be used transaction tax without exceptions, as for government bonds. This would demanded by the Left Party, numerous decrease interest rates for crisis states, financial operations such as computer- and income from this interest would flow ised high frequency trading would no back to the ECB. Troost and Wagenk- longer be profitable, which would lead necht therefore demand that: “within a defined framework, states all need the 14 The French version of a tax on financial transactions is more same access to cheap loans from the like a tax on the stock exchange, and is similar to the so-called stamp duty reserve tax on shares that already exists in the UK. ECB […] and solidarity-based European Business beyond the financial exchanges that is conducted bonds (Eurobonds).” Public borrowing directly between two financial investors (over the counter) are not consistently covered by this. This affects more than 60 per should be freed from the “dictatorship of cent of all transactions for derivatives. 16 to a slowing (or deceleration) of financial hensible, and sustainable ways to save markets.15 instead of taking risks with their clients’ Furthermore, the Left Party calls for a and the bank’s own money. Thirdly, reduction in the power of rating agen- banks need to fulfil their financing func- cies (see the Left Party 2013: 51). Cur- tion by financing company and state rently, their assessments of the risks of investments through loans at acceptable the balance sheets of banks and insur- conditions. The goal would be to shrink ance companies are to a certain degree the financial sector and curtail its eco- binding. Insurance companies and nomic and political power. Landesbanken, for example, are only The draft of the Left Party’s election permitted to take on a small percentage manifesto argues that the prerequisite of risky financial assets. When rating for an effective banking system is the agencies downgrade certain assets, disclosure of the risks hidden in bank such as government bonds, companies balance sheets that also restrict access are forced to sell them, whether they to new loans. As such, banks’ toxic share the rating agency’s assessment assets should be sold at market prices or not. The Left Party wants to replace to a separate entity. In cases where the these private agencies with a public, market price cannot be determined, toxic European-wide agency. Furthermore, assets should be valued at zero. A con- it calls for the introduction of a kind of trolled insolvency, in which small savings MOT for financial products, which all accounts are protected, is also viewed as new financial instruments would have to acceptable; this, too, is Wagenknecht’s pass. This would be applied in particular position (see the Left Party 2013: 48). to food and resource-based derivatives To prevent false incentives, the salaries and futures. The Left Party is convinced of managers and board members must that derivatives trading, if it is to continue be tied in a fixed relation to the sala- legally, should be handled restrictively. ries of their employees. The Left Party Party-near NGOs, such as WEED and is therefore calling for the income of a others, are still analysing the benefits of manager to be no more than 20 times hedges against currency fluctuations, that of an employee paying compulsory for example for farmers or companies.16

Undisputed, however, is the demand 15 The EU Commission is currently planning tougher action to ban intermediary trading by financial against the circumvention of this tax. This means the so-called ‘origin principle’ will be complimented by the so-called institutions that only speculate with, for ‘expenditure principle’ in taxation. The ‘origin principle’ affects financial institutions that have their headquarters in the scope example, food or resources. of this law and are liable to tax; this then would also include, Philipp Hersel and Axel Troost (2012) for example, a German bank involved in shares and derivatives transactions outside of Europe. The ‘expenditure principle’ have developed essential pillars for a means that trading in assets that are within the scope of the restructuring of the banking sector. They act is also subject to tax. This tax would then also apply, for example, if a US bank in Hong Kong were to trade in Italian gov- see ensuring reliable and efficient pay- ernment bonds (see Wahl 2013). 16 See: www.weed-online. org/themen/finanzen/nahrungsmittelspekulation/index_2010. ments, including a corresponding supply html; the Foodwatch report Die Hungermacher (2011) by of cash, as one of the central functions of Harald Schumann available at http://foodwatch.de/foodwatch/ content/e10/e45260/e45263/e45318/foodwatch-Report_Die_ banks. Secondly, the role of banks needs Hungermacher_Okt-2011_ger.pdf; and Heiner Flassbeck on to be reduced to that of capital collection food speculation as part of the available at: http://germanys- nextkabinettskueche.wordpress.com/2012/10/01/heiner-flass- bodies offering people secure, compre- beck-dirk-muller-u-a-nahrungsmittelspekulation. social insurance in the lowest wage tional financial regulation, for example, 17 group. According to their concept, over- through the socialisation of “banks con- draft interest rates should be limited to sidered systemically relevant”, through 5 per cent above the central bank inter- the expansion of a network of public est rate (ibid.: 13 and 49). Furthermore, banks and the introduction of participa- Hersel and Troost (2012) state that banks tory budgeting at all levels (see Candeias should be regulated more strictly in order 2011). to prevent high-risk speculation. They The Left Party’s 2013 election manifesto demand that investment banking be sep- proposes re-tightening the regulation of arated from business banking and that it banks and integrating this into a demo- be closed down. (German) savings and cratic economic policy. This task, though, cooperative banks are to become the cannot be left to the banks alone and the model for a new financial system. Simi- monitoring institutions that will have larly to savings banks, these new banks to be created. “The boards will need are to be committed to the common to count on the participation of social, good. Private banks and Landesbanken consumer-protection and environmen- are to become smaller and put under tal associations, as well as other actors effective public control. Off-balance- of civil society, rather than simply the sheet, special-purpose companies, so-called experts and politicians” (the hedge funds and private equity com- Left Party 2013: 49). These would have panies are to be dissolved, as they are to control the daily business activities useless to the economy. of banks, as well as control and assess To this we can add that a gradual sociali- the (further) development of business sation of investment is required, because models. To do this, it would be necessary who should actually decide on the use to create a movement for self-education of the resources of a society and which in economics (economic alphabetiza- work is socially necessary? The market tion), in the sense of Pierre Bourdieu. has failed embarrassingly as the most Debates on the crisis and the economy efficient allocation mechanism. The must be accessible to broad sections of neoliberal credit and financial system the population if people are to play a part still collects (latently productive) indi- in public regulation. vidual capital, but it is no longer able to The banking union the EU strives for is channel it into sufficiently productive viewed critically by the Left Party. The investments. Instead, the over-accumu- banking union is to provide a unified lation of capital produces waves of spec- supervision of the approximately 6,000 ulative bubbles followed by a destruction eurozone banks, a rescue fund for banks, of capital and jobs, whilst ever-larger a unified insolvency legislation, as well parts of social reproduction (for example as a joint deposit protection. So far, only education, environment, hunger reduc- the outlines of a supervision strategy tion, infrastructure and public services) have been decided upon. Jürgen Klute, are either not taken care of or are slowly member of the Left Party in the Euro- squeezed by spending cuts. The invest- pean Parliament, believes joint banking ment function must also become an supervision is “desperately needed” increasingly public task, beyond interna- but criticises both its make-up and – as 18 has already happened with the emer- cial centre. This throws the door wide gency lending institution and the fiscal open to the dangers of regulatory arbi- compact – that “legislation is to be imple- trage, whereby the differences in reg- mented by side-lining the European Par- ulatory standards are exploited. Given liament” (press statement, 12.9.2012). increasing regulation at the national level Furthermore, the Commission’s proposal (for example Germany’s law to separate gives insufficient consideration to banks’ investment and business banking), this different business models and their dif- points to a fundamental problem: “Faced ferent sizes. This position is shared by with the complexity and the slowness other party members in the Left Party. of EU-27 – and now also eurozone – Sahra Wagenknecht, for example, points decision-making, there is an increasing to the fact that savings banks could return to national measures.” Alterna- “easily be supervised at the national tively, argues Wahl, a mechanism for level” (press statement, 23.10.2012).17 deeper co-operation with a “coalition The ECB’s central banking council, of the willing” applies (Wahl 2013: 3). too, should not have the last say on the The European Union and its regulatory closure or continuation of a bank, nor on system therefore resemble a patchwork the provision of state support. system, and in the face of economic and Yet banking supervision could again political tensions, this surely does not prove to be a ‘paper tiger’ because super- strengthen cohesion. vision actually is already in place. Unfor- Most importantly, however, the planned tunately, though, it neither anticipated banking union foresees neither a strict the 2007/2008 crash nor did it recognise regulation of banks nor a structural the manipulation of the LIBOR. Even two reform of the banking sector, not least stress tests were not enough to reveal because banks are considered “too big that Spanish banks were teetering on to fail and also too complex and linked the brink of an abyss (Wahl 2013: 2). This to each other” to be “efficiently regu- led to a restructuring encompassing four lated” (ibid.). Therefore, demands Sahra different agencies.18 Now, a new struc- Wagenknecht, “systemically relevant” ture is to bring a breakthrough for which banks should be shrunk to such an extent up to 5,000 new civil servants will have that their potential bankruptcy no longer to be recruited. Public regulation is not poses a great threat. Anything less would foreseen. The planned unification under mean once again passing the costs of the auspices of the ECB also has severe mis-speculation onto taxpayers (Wagen- downsides, for example, compared with knecht 2012). today’s regulator (the European Banking The discussion about the banking union Authority) located in London. States at least has the benefit of showing that outside of the eurozone such as Britain the euro crisis is not a state debt crisis: and Poland have no decision-making “Europe’s patient was and is its finance power and will therefore be unlikely to succumb to the new supervisory author- 17 The protests by savings banks in particular led the Merkel government to prevent the ECB controlling all banks in the euro ity. The deeper integration therefore that area, and instead it now controls the 150 largest banks. 18 A the banking union is supposed to achieve banking authority (EBA), a securities exchange authority (ESMA), an insurance regulatory Authority (EIOPA) and a excludes Europe’s most important finan- European committee for the evaluation of systemic risk (ESRB). sector,” says Jürgen Klute (Neues the member countries of the mone- 19 Deutschland, 25.10.2012). “Even heads tary union) towards the greatest possi- of government understand this,” writes ble coordinated and coherent political financial journalist Lucas Zeise. “They action.19 Binding target corridors for know that this is not simply about res- current account imbalances (both for cuing some Spanish banks in the short deficits and surpluses) should be intro- term. Really, the whole euro area has to duced. To date, only excessive deficits deal with numerous ailing banks” (Junge have been sanctioned in the EU. Sur- Welt, 15.12.2012). pluses are currently only seen as prob- lematic if they surpass 6 per cent, but even then there are no penalties. In a 2.3 A European future clearing union, a mercantilist Clearing union and systematic production of surpluses One of the Left Party’s best developed would be penalised and this money proposals is the concept of a European should then flow into a fund for European clearing union (Hersel/Troost 2009; cohesion. Short-term fluctuations would Troost/Paus 2011; Troost/Hersel 2012). not be penalised. Fluctuations between The crisis of the European Monetary plus and minus 3 per cent would be Union – in short, the euro crisis – is often tolerated. There should be escalating portrayed as a debt crisis of Greece, Por- penalties for longer-term imbalances. tugal and other euro countries. The scope Due to the far better possibilities of of such an analysis, however, is limited surplus countries implementing struc- and comes to completely wrong conclu- tural change, higher penalty rates would sions. From the outset, the construction only be applied to them, up to the point of the European Monetary Union was where surpluses are again reduced to flawed, because the unification of mon- an acceptable level. “The penalty mech- etary policies was not accompanied by anism described should also be seen as coordinated economic, social and fiscal a system of threats designed to oblige policies. A unified monetary policy for a countries with current account imbal- set of countries with relatively disparate ances to participate constructively in economic structures and labour markets upstream forms of improved, deeper under conditions of competition neces- macroeconomic coordination within the sarily exacerbates their differences. It is EU. If the EU member states align their clear how far development has diverged economic, labour market, social, fiscal in the eurozone from the dramatic trade and structural policies in a sensible, for- imbalances. ward-looking way, then there should be The Left Party therefore sees the need to no problems when it comes to comply- establish a European clearing union to ing with the threshold values of the Euro- replace the current Stability and Growth pean clearing union, and to averting at an Pact, which was further strengthened during the crisis. Such a clearing union 19 The idea of European adjustment is inspired by John Maynard Keynes, who in the 1940s brought in the International would be a regime that would drive the Clearing Union on behalf of the British government. This was economic, social, fiscal and tax poli- a similar proposal and was suggested as part of the negotia- tions on the world economy in the post-war period (see Hersel/ cies of EU countries (initially at least Troost 2009). 20 early stage the need for infringement pro- banks and the finance sector, as well ceedings” (Troost/Hersel 2012). A Euro- as programmes to boost the economy, pean clearing union would be an impor- whereas proposals to restructure pro- tant catalyst or mechanism for putting duction are still widely lacking. Above, pressure on Germany to implement the we asked what a sustainable model of long-needed structural adjustments production for Greece (or Cyprus) might that would move its economy away look like. Merely specialising in existing from export dependency and towards a structures such as the agro-industry or stronger internal market orientation. tourism will hardly suffice. Therefore, it will be necessary to rebuild the produc- tion base of these countries and develop 2.4 Marshall plan, Euro- a working European division of labour. pean industrial policy This is the background of a proposal by and a socio-ecological Thomas Händel (a Left Party member re-orientation of the European Parliament) and Frank The Left Party supports the ‘Marshall Plan Puskarev, who see this as a comple- for Europe’ proposed by the DGB (2012). mentary industrial policy to a European Herein the DGB develops a programme Clearing Union and the ‘Marshall Plan for economic growth, investment and for Europe’. “Europe requires an inte- the reorganisation of Europe that focuses grated concept for a democratically con- on a strengthening of public infrastruc- trolled future economic development ture and public goods as well as on a that encompasses existing elements new European energy policy based on a of industry and service sector policies, switch to renewable resources. The pro- as well as structural and cohesion poli- gramme stands in opposition to current cies, builds on these and complements austerity policies and aims to promote them to a substantial degree” (Händel/ the need for investment to overcome the Puskarev 2012b). Here, too, the core is a crisis. This is to be financed by a Euro- democratic switch to renewable energy pean fund for the future. Its base capital resources. Neither the Left Party nor of between 200 and 250 billion euros is other European left-wing parties have to be collected through a European levy so far elaborated on how a European on capital. This fund would emit a ten- industrial policy or a comprehensive year fixed interest rate ‘New-Deal-Bond’ socio-ecological rebuilding of the Euro- that could finance investments of up to pean economy could look like. 2.6 trillion euro. This bond is to be repaid One example of the direction this could using the income generated from a Euro- take should suffice. Solar energy could pean financial transaction tax (see Payan- become a core project for Greece and deh 2013). The Left Party also demands potentially create 60,000 jobs and gen- “an investment programme with a focus erate around 15 billion euros in revenue on the development of public and social (ibid.). Furthermore, energy import costs services and a socio-ecological re-orien- would drop and income could be gener- tation” (the Left Party 2013: 50). ated from the export of solar energy. With There are already numerous and well- the necessary technical adjustments, worked-out proposals to regulate the around 10 gigawatts of electric energy could flow through Italy and Macedonia more strongly enlisted for public financ- 21 and into the European electricity grids. ing, and we should be ensuring that the This project – called Helios – requires surplus product is returned to society. investment into facilities and the grid, Doing so would mean the current redis- for which there is currently hardly any tribution of wealth could be blocked and money available in Greece’s government reversed: wealth could then be redistrib- budget. “Both in terms of investment and uted from above to below and from the technology, the state therefore requires private to the public sphere. This would the support of a European industrialisa- also provide space for different policies. tion policy. Its own solar industry does Clearly, a policy of redistribution is an not exist” (ibid.). Investments “in wind essential prerequisite of left-wing pol- energy, for which Greece is a particu- itics. Despite this, many people regu- larly promising location, together with larly claim that the Left Party either aims a decentralised energy supply in the to spend more money, or simply print hands of communities and regions could more money. In truth, the party strives create employment for tens of thousands to improve the revenue side of public of people in the region” (ibid.). There is finances, both in Germany and the rest of also further potential for the creation Europe. of employment and revenue in “ship- The Left Party is calling for a one-off building, the modernisation of the most European-wide capital tax of 5 per cent important Mediterranean port in Piraeus, on holdings of over 1 million euros. tourism, transport and the pharmaceuti- Additionally, a millionaire’s tax is to be cal industry” (ibid.). In this way, regional brought in at a rate of 75 per cent on a potentials and value chains would be yearly income of over 1 million euros; bound up with opportunities for export to this is similar to the one currently being Europe. discussed in France. According to Nonetheless, countries such as Greece the Frankfurter Allgemeine Zeitung will for a long time continue to depend on (17.06.12), Katja Kipping (chair of the Left “the import of capital goods”. It would be Party) and Jean-Luc Mélanchon (chair of an important task for a European struc- the Parti de Gauche) have even discussed tural and tax policy “to ensure this can be the possibility of a 100 per cent tax, that financed, not through further state debt is, placing an absolute limit on personal but through income from the goods and assets. Furthermore, income tax reforms services that have a potential for trade would be brought in to counter growing and on the market” (ibid.). social inequalities. Alongside European minimal tax standards, the Left Party also argues for an intensified fight against tax 2.5 Fair taxes: evasion; these measures would include wealth is taxable controls on the movement of capital, Once again, the current management of automatic reporting requirements for the crisis is exacerbating the neoliberal banks, the option of freezing suspicious policies of redistribution that have been funds, the withdrawal of the licenses implemented over the past 30 years. of uncooperative banks, and increased Instead capital and the wealthy should be punishments for tax evasion. 22 Many of the current debt-related prob- of implementing a bank levy as a means lems faced by a number of countries of supporting public financing, which using the euro have been caused by has significantly funded the bailout of reductions in tax revenues. Moreover, the banks over the last few years. This this has been caused by the increasing income would then be used to set up a tax breaks these countries have intro- publicly controlled fund for future cases duced for businesses and the wealthy. of bank collapses. The party views the This is particularly the case with coun- current bank levy of around 1.2 billion tries that have been hit particularly hard euros, introduced by the Merkel govern- by the crisis: Lithuania, Ireland, Cyprus ment, as insufficient to provide effective and Greece all introduced special low protection against the collapse of a large rates of tax as a means of attracting bank. Instead, the Left Party is calling for (speculative) capital. At the same time, an annual bank levy of 9 billion euros, when it comes to big business and the with the exception of savings and coop- rich – in Greece, but also in Germany – erative banks, which are to be exempted financial institutions rarely seem to sys- (press release from 24.8.2010). tematically collect tax debt. The Left Party is calling for corporate tax to be raised once again to 25 per cent and for 2.6 Social corridors a widening of the corporate tax assess- and minimum standards ment baseline. These policies should The Left Party views minimum standards be implemented uniformly throughout in European social security and tax poli- Europe. The party is also calling for tax cies as a method of preventing dumping loopholes to be closed, and as the OECD strategies while continuing to main- has demonstrated, this is particularly tain the diversity of national systems of important with regards to transnational social security. This includes providing corporations, which are often able to a minimum level of basic social security reduce their tax burden to less than 5 per (for example, 60 per cent of the respec- cent. In contrast, medium-sized busi- tive average per capita income), Euro- nesses generally pay between 25 and pean minimum wages (such as, 65 per 30 per cent of their profits in taxes. Addi- cent of the respective average national tionally, the Left Party argues that com- wage) and the right to housing. In addi- panies should no longer be able to offset tion, the party argues for the introduc- their costs from various locations to save tion of a new institutional mechanism taxes, and that companies must ensure that would ensure European living con- their costs are transparent. To meet this ditions can be carefully adjusted. This is aim, the tax authorities would need extra what is meant by ‘social corridors’. This staff; however, the cost of employing a idea has been developed by André Brie, tax inspector who assesses the accounts Klaus Dräger, Gabi Zimmer, Judith Dell- of large companies and financial institu- heim and others, and it has already been tions is returned many times over. incorporated into the Left Party‘s election In addition to the tax on financial trans- manifesto. The argument behind social actions supported by the Left Party, the corridors is that there is a provision that party has also discussed the possibility stipulates that social spending as a share of GDP (the social expenditure ratio) procedures of the European Union to 23 may not be reduced, but instead should be circumvented. The new budget and increase within a specific corridor. An EU macroeconomic powers of the Euro- country with a falling social expenditure pean Commission have led to a signif- ratio would have to implement a process icant shift in the institutional balance of consultation, and the government of powers within the European Union. concerned would have to implement These changes particularly affect the mandatory measures to restore the ratio European Parliament, but also the budg- to its original level. This would mean that etary powers of national parliaments. social policy would be jointly coordinated From the perspective of the Left Party, to enable member countries at the lowest this is linked to the question of whether scale of each social corridor to improve the party should seek to preserve the their situations (see the Left Party 2013: rights of the European Parliament and 47). The Left Party is also considering the support the democratisation of the Euro- establishment of a European Court of pean Union, or rather whether the party Social Justice as a counterweight to the should focus far more on defending competition-dominated European Court democratic achievements at the national of Justice. level and support a ‘re-foundation of a In addition, the European Trade Union new Europe’ instead. This latter view Confederation and European sector has developed out of the understanding unions need to better coordinate their that the EU is now almost completely collective bargaining policies. Orienting removed from any left-wing influence. wage policy towards the neutral margin The Left Party’s European policy also of distribution (inflation plus trends in aims to strengthen the European Par- productivity) would constitute an undeni- liament, ensure European referenda able move towards a more social Europe. are held, expand the European public Germany has not used this margin for sphere and strengthen human and civil years, which means it has a lot of catch- rights. In addition, the Left Party calls for ing up to do. reform of agricultural policy as well as the At the European level, successfully European migration and border regime. implemented projects such as European However, here we focus on the policy economic governance (tightening of the positions and debates specifically related Stability and Growth Pact, macroeco- to the euro crisis. nomic controls), the Euro Plus Pact, the fiscal compact and the bailout by the EFSF and ESM have not only intensified 2.7 The eURO Exit – neoliberal crisis management, they have Selected positions also had far-reaching consequences for from outside the party the institutional structure of the Euro- Axel Troost and other politicians from the pean Union. They have led to a massive Left Party argue that the European Mon- loss of democracy: the Euro Plus Pact etary Union’s core problems are caused and the fiscal compact – as international by divergent trade and current account agreements between governments – balances, which themselves are linked enable the legal system and the legal to the very different economic conditions 24 that exist throughout Europe. Heiner beck’s ideas overlap with those of neo- Flassbeck, former chief economist of liberals such as Hans-Olaf Henkel, and the UNCTAD, was commissioned by the Hans-Werner Sinn. Rosa Luxemburg Stiftung to produce a Given that German exports now make study on the euro crisis; Flassbeck came up 50 per cent of German GDP, Flass- to the same conclusion and argues that beck does not believe his proposals will Germany has “long been systemati- be implemented. A strong appreciation cally living under its means” (Flassbeck in the northern euro would set back 2012a). According to Flassbeck, if the the German economy by many years euro is to be saved, nominal wages in and result in the loss of millions of jobs. Germany will have to be increased more Flassbeck argues that this would mean than in the rest of the euro area. Flass- that, “the entire political elite would beck has calculated that, “increasing have to resign” (ibid.). Goldman Sachs wages annually by 4.5 per cent would have calculated that the new currency lead to a balance in price competitive- would be revalued in real terms by 25 ness by 2022” (Financial Times Germany, per cent. The bank estimates that the 17.3.2011). A useful means of bridg- costs to Germany of a break up of EMU ing this long period until these changes would be around 800 billion euros. It took affect would include: “Eurobonds, has been calculated (taking interest bailouts or consistent intervention by rates into account) that with such an the ECB” (Flassbeck 2012a). However, amount, “Germany could afford to pay Flassbeck is sceptical about whether 94 billion euros in benefit payments, German trade unions are in the position every year for ten years” (Frankfurter All- to enforce permanently high wages. He gemeine Zeitung, 16.2.2012). Accord- believes that if the “competitivity gap” ing to Flassbeck it would be better to is not closed, the euro area will break “nationalise the entire German banking up (Der Freitag, 18.2.2010). Before this system”. In addition, controls on the process reawakens “old resentments” movement of capital ought to be intro- or “creates new hostilities”, he calls on duced. However, it would lead to a Europeans to “separate yourselves” slump in industrial production by 40 per (Flassbeck 2012b). More specifically, he cent, which would spark the end of Ger- advocates a separation between north- many’s and other exporting countries’ ern and southern Europe. The southern export models. euro area would be composed of Greece, Flassbeck provides a stark warning that Italy, Spain and Portugal, and led by the euro is no longer tenable without France. Flassbeck argues that the south- fundamental change. Gary Cohn, CEO of ern euro could be immediately deval- Goldman Sachs, and Nouriel Roubini, the ued by about 40 per cent, which would star economist, also agree (Handelsblatt, quickly restore the competitiveness of 17.10.2012). Consequently, Flassbeck this large southern market. The north- and Costas Lapavitsas (2011), a Greek ern euro area, under German leadership, economist who teaches in the UK, argue would include countries such as Austria, at the very least for the possibility of an the Netherlands, Finland and perhaps orderly exit from monetary union and eventually the UK. Interestingly, Flass- mechanisms to prevent the euro area from falling apart uncontrollably. If an can only be realised in the form of a 25 orderly exit were to occur – in the case break” (Sotiris 2012: 26). This would of Greece, with debt restructuring, long- involve “an immediate cessation of debt term financial assistance, and currency servicing, the nationalisation of banks devaluation of up to 50 per cent – this and strategic infrastructure” as well other would still be possible. The costs would regulations such as the reintroduction remain within limits, and Greece would of controls on the movement of capital be provided with a chance to end its (ibid.: 26 f.) In this case, exit is viewed as a current “Recession martyrdom” (Axel means of building international relations Troost). However, Troost (2012) points “based on mutual benefit” (ibid.: 27). out that “the dramatic depletion of Greek The author is referring here to economic economic structures and infrastructure” relations with the countries of the Arab means that it is unclear whether “export Spring, but also to China, Latin America surpluses would provide a speedy recov- and Turkey, as well as countries in south- ery”, even if the European Union were to ern Europe that might be interested in endorse “support for a new start via the leaving the eurozone. “Leaving the euro- European Development Bank”. Despite zone, would not lead to isolation; it would this critique, Flassbeck does not actually open the only path to a wider range of view exports as the solution: “A country possible forms of international and eco- that is uncompetitive cannot open its nomic relations” (ibid.). borders for an unlimited period of time Following the Latin American example […] As far as possible, imports must be some think about an extractivist path of replaced by domestic products” (Tage- development. In other words, increased sanzeiger, 13.10.2012). exploitation of raw materials is proposed Unlike Flassbeck and Lapavitsas, Greek as the basis for a comprehensive state advocates of an exit, such as Panagiotis policy of redistribution. Large oil and Sotiris, do not believe an ‘orderly exit’ gas deposits are believed to be in the from the eurozone is possible. The differ- Aegean, and provide the hope behind ence is that the debate in Greece is being these ideas. According to the Reuters held in the context of the possibility of a news agency, these reserves – in par- real left-wing government. It is clear that ticular the gas – could provide the Greek such a government, which would have to government with a total of 600 billion US be based on a broad coalition of popular dollars (465 billion euros) over the next 25 support, would be unlikely to receive years (see Focus, 17.11.2012). This sum assistance from the European Union for exceeds Greece’s total debt by almost a new economic start; instead this would half. As such, if these suspicions prove to be contested. “It is impossible to bring be correct, Greece would certainly have about such profound change through an economic basis beyond the eurozone; simple decisions and decision-making however, this would constitute anything processes within the EU. Such change but socio-ecological development. 26 3 RE-FOUNDATION OF EUROPE

3.1 From pro-European (Wall Street Journal, 28.2.2013), or by to Euroscepticism regressively focusing on the defence of For decades, the European left have social rights at the national level. With a adopted an ambivalent stance towards few exceptions, such as Greece, the left European integration. Critique has aptly continues to struggle to provide an ade- targeted liberalisation, deregulation, the quate and compelling strategic position monetarist currency union, the Maas- on the crisis. tricht Treaty, the Stability Pact and the Both of the positions set out above are Lisbon treaties with their orientation rational: in the face of proceeding Euro- towards competitiveness. The tradition peanization and transnational power of internationalism, however, has meant structures, outdated political action con- that the left have firmly adhered to a fined to the nation-state is not even an pro-European stance, drafted propos- adequate means of defending central als for reform, and opposed nationalism social and political achievements. But, and right-wing protectionism (directed “the left has not yet succeeded in formu- against immigrants and ‘foreign’ lating their vote for a different Europe in workers). Given the unfavourable devel- a concise and shared idea and policy” opments in the relations of power in (Händel/Puskarev 2012a: 45). There is Europe, pro-European positions always growing unease over Europe, even within risk being perceived as naive and ideal- the Left Party; this unease is not based istic. One example of this occurred when on hollow nationalism, but on experi- Jürgen Habermas counterfactually cel- ence. Over recent decades, every step ebrated the blessings of the cosmopoli- towards European integration has been a tan new beginnings associated with the step towards the further implementation European Union without mentioning of neoliberal principals, even if there has the real social and economic disloca- indeed been real progress in some areas. tion linked to this process (see Anderson Not least for many people in eastern 2012: 14). Europe or in Turkey, the prospect of mem- Positions critical of Europe in the public bership of the European Union is tied to debate often are associated with right- hopes that this will guarantee greater wing nationalism and slandered as such, respect for civil and human rights. At the or they unintentionally support it. A left- same time, however, the European Union wing position for European perspectives increasingly resembles an undemocratic and another against the erosion of social and business-oriented lobbying organisa- rights at the national level could be easily tion, which, beyond the weak European connected in theory. However, left-wing Parliament, is hardly subject to political perspectives have continuously been control or influence by civil society and brought into false opposition through parliaments. Countless measures and political practices; for example, by con- programmes of liberalisation, deregula- tinuing to argue for a progressive Euro- tion and privatisation have been pushed pean social model despite the fact that through at the European level, even Mario Draghi has announced its end against national interests. European institutions are therefore a “no better elsewhere. Furthermore, if Greece were 27 environment for struggle than a coun- to exit the euro, it would also give away try’s own social structures and political its most powerful bargaining position: entities”, according to Panagiotis Sotiris the threat of a default. This could provide (2012: 25). Particularly since the situa- the backbone of a left-wing government tion in Greece, an attitude has emerged under SYRIZA: instead of an exit from the that seeks to ensure that “the important eurozone, comprehensive renegotiation democratic and internationalist traditions of the terms governing over its member- of the labour movement and the Euro- ship. pean left” are not forgotten, but actually It is currently unclear how long the concludes that they have “nothing to do current government in Greece will be with the reality of the actual institutional able to continue. This should send a framework of the EU” (ibid.). warning to the rulers in Europe: a new Viewed in this light, it seems all the more spectre is haunting Europe – SYRIZA, the urgent to promote consistent steps Coalition of the Radical Left in Greece, toward reforming the European Union with its chair, Alexis Tsipras, is currently during this crisis in order to prevent its considered both a threat to Europe and breakup. However, the current relations its hope. The ruling forces of authoritar- of powers make this impossible. Rather, ian neoliberalism fear the precedent: if developments are moving in the opposite one country is able to effectively resist direction; namely, towards an authoritar- the draconian diktat of austerity, this ian and post-democratic neoliberalism. could cause an economic and political Thus, Axel Troost and Sahra Wagenk- “domino effect” (see Onaran 2011). The necht demand that: “further transfers scattered left-wing forces in Europe, of competence to the European level in on the other hand, project their hopes the field of economic, financial and social onto a country in which large organised policy should take place only if they also movements exist and could potentially prevent labour, social and tax dumping.” provide a basis for the left to win the next The question of whether it would be election. In Greece, asserting positions better to exit the euro or move towards that stand in opposition to dominant pol- a utopian harmonisation of a European itics and classes does not seem to lead social model is, in the end, the wrong to isolation; instead it has succeeded in question. An exit from the euro – even taking hold and developing the passions if a country had a chance of promoting and demands of social movements and economic reconstruction through the broad sections of the population, which devaluation of its own separate cur- are against the authoritarian-neolib- rency – would be accompanied by an eral European Union and the power of economic collapse of an almost unim- finance capital, but remain pro-Europe. aginable size. It would probably cause a As such, SYRIZA has been able to clev- chain reaction in other states and lead to erly avoid the dilemmas in which the left the collapse not only of European Mon- in Europe usually become entangled. etary Union, but of the European Union Michel Husson (2012: 29) recommends as a whole, with equally disastrous con- implementing “good unilateral meas- sequences for people in Germany and ures” (for example, capital controls or 20 28 tax reform) wherever possible, instead Struggles have returned to Europe; of waiting “until a ‘good’ Europe has however, a European coordination of been created”. He argues that, “it is even these struggles continues to face dif- worth the political risk accompanied by ficulties. Numerous left-wing parties breaching EU directives” because other have expressed their solidarity with countries may follow the example. Con- Greece. This includes the Left Party, sequently, there would be a chance of which released a joint statement with expanding reforms that have begun in SYRIZA.21 However, there is still no one or several countries to other coun- common position among the European tries in Europe. Currently this perspective left. The disparity between European only seems realistic in Greece, and those trade unions regarding solidarity with in power are doing everything they can to Greece is particularly dramatic: the isolate such a position. strong self-interests of the European Trade Union Confederation’s individ- ual member associations and unions, 3.2 The condensation as well as the different situations in the of societal mobilisation respective countries, seem to prevent it The policies of dominant governments, from becoming a suitable means of Euro- the European Commission, the Euro- pean coordination (see Wahl 2012). Last pean Central Bank and the International year proved to be a historical moment in Monetary Fund, as well as the policies of the history of the European Trade Union powerful banks and financial institutions, Confederation: on 14th of November it point to a reversal of the cause and effect took the step towards a general strike in of the current financial crisis, redefining several European countries and joint sol- it as a crisis of government debt. This is idarity actions. But German trade unions causing divisions between countries and in particular, such as IG Metall, are torn stirring hatred between peoples. The between their critique of neoliberal ‘lazy Greeks’, the ‘crazy Italians’ and the austerity policies and the benefits they ‘megalomaniac Irish’ have all allegedly enjoy because of their involvement in lived beyond their means for far too long German crisis management; this comes and now need to be rigorously educated at the expense of other groups of wage in proper budgeting. The Spanish and the earners. They are practically uninvolved Portuguese governments are struggling in protests in Europe against the crisis to avoid being equated with the ‘irre- (see Bierbaum 2013). Although some sponsible Greeks’; in Italy, a technocratic sectors of the German trade unions, government sought to regain ‘market especially unions in the service, edu- confidence’ – this government has been cation and food sector, did criticise the since voted out, but this has only made European Union quite early on and stated it increasingly difficult to form a new

government. A strategic reorientation is 20 See: LuXemburg 2/2011 or the Occupy paper from the Rosa necessary if the European left is to play Luxemburg Stiftung available at: www.rosalux.de/fileadmin/ rls_uploads/pdfs/sonst_publikationen/RZ_OCCUPY_Dez2011. its part in the historical organic crisis and pdf. 21 “Alternativen zu Austeritätspolitik und Bankenret- position itself against the authoritarian tung”. The six-point joint programme from SYRIZA and the Left Party, available at: www.linksfraktion.de/positionspapiere/ “restoration-revolution” (Gramsci). alternativen-austeritaetspolitik-bankenrettung. their solidarity with Greece. This gained pinned by initiatives that provide informal 29 publicity relatively late in the form of an mutual support (see Wainwright 2012). official publication entitled Re-founding Mass demonstrations have become the Europe.22 order of the day. Be this as it may, the Yet even movements such as the Indig- repressive state apparatus does continue nants and Occupy are struggling to coor- to function. Yet these societies – from the dinate their European protests. Their ‘trenches’ of civil society to the newspa- struggles are mostly played out at the pers – are dominated by criticism of their national level and have only slowly and incompetent governments, the appall- sporadically developed across borders. ing levels of corruption, and the imperial The learning processes on the way to submission they are subjected to under practical solidarity are difficult, but not the troika. But even though people have without hope of success. This is clear returned to self-organisation, and the from the European strategy of action streets are taken by the masses again days in May 2012 on the anniversary of and again, the dominant groups and the occupation of the Puerta del Sol in classes continue to cut spending, despite Madrid and Blockupy Frankfurt. This has the lack of perspective conveyed by their even included cooperation between the policies. The various “flows” of organi- new (democratic) movements, ‘new-old’ zation in civil society are unable to per- social movements, left-wing parties and meate the “solid institutions” (Porcaro trade unions, and not only in Greece: 2013) of power. This clearly demon- in Spain, the indignad@s triggered a strates the limits of attempting to change dynamic that led to the revitalisation the world without seizing power. Pure and organisation of movements, to the movement-based mobilisation, or the re-foundation of the United Left and to “progressive growth of popular, self-or- a strategic reorientation of the unions. ganised subjectivity” no longer suffices In France the formation of the Left (ibid.). The time for condensation has Front, led by Jean-Luc Mélenchon, have come. demonstrated how protests and open Movements such as Spain’s 15M move- party politics can be brought together to ment and actions like the occupation of achieve good election results – not least Syntagma Square led to the formation of with a targeted campaign against Marine a plural subject. After the evictions from Le Pen’s Front National. Among these public squares, these forms of organ- movements, to a certain extent at least, ising radiated into the neighbourhoods a European consensus about minimum and numerous others areas without requirements does seem to be develop- facing dispersal. This molecular form of ing, and they are also experimenting with organisation involved broad sections different forms of coordination. of the population, and the movements Whether southern Europe is currently have long since spread to many parts of going through a “pre-revolutionary society (Juberías et al. 2012). The organic period” (Horst Kahrs) is hard to say. In cooperation that developed between Greece and Spain many social institu- such diverse groups means it is no longer tions and systems have basically col- lapsed. They are being replaced or under- 22 See: www.europa-neu-begruenden.de. 30 sensible to differentiate between them. of power, but also to avoid divisions and In Spain, for example, unions have stra- enable as many people as possible to tegically reoriented themselves as a con- participate. The movement is learning. sequence of the 15M movement, and Meanwhile, the Spanish parliament was unions now provide the basis of cam- shielded by lines of police; as such, it dis- paigns against evictions; similarly, move- tanced itself further from the population. ment activists organise strikes and stand In Greece, SYRIZA represents a similar as candidates for the Izquierda Unida point of condensation: it has translated (United Left), and both groups march civil society actions based around self-or- together on the streets. The most spec- ganisation and protest into a perspective tacular actions have been those in which that could seize power. banks were stormed and squatted. The iaioflautas,23 the 80-year-old “children of the 15M movement”, gained the most 3.3 Strategic disruption publicity; they fought their last battle The mobilisation within society detailed against the Franco dictatorship and now above is not merely targeting the troika bring their experience back to the streets, and national governments; it also explic- this time in the name of their grandchil- itly targets the traditional institutions of dren. representative democracy and capitalist Clearly, condensation has already taken rule. As a constituting power, this form place to a large extent; the numerous of societal mobilisation aims to develop divisions that do still exist are now far less a new form of constituted power. This important.24 The relationship between thought, however, still remains caught Izquierda Unida, the unions and the 15M up in ideas of the ‘cumulative’ expan- movement is often productive and these sion of the other from below. Condensa- groups regularly work together. More tion needs to be aimed once more at the and more people are getting involved, centres of power. This should be about and the United Left is now reaching 15 more than a simple set of demands, such per cent in opinion polls. The various as ending evictions, debt cancellation or waves of protests concerning health the call for a European-wide unemploy- and education, against evictions, or for a ment insurance scheme – even though free press have been highly coordinated each of these demands is vital. With and are strongly interconnected, as are regard to the struggles in Spain and the mass demonstrations and general Greece and the necessary wider Europe- strikes. Finally, a ‘tightly knit’ small group anization of the protests, demands and (of older left-wing activists) began an ini- struggles need to be connected to start tiative to occupy parliament. The groups a process that would firmly place the idea constituting the 15M movement con- 23 See: http://publik.verdi.de/2012/ausgabe-05/spezial/ ducted numerous discussions about this jugend/seiten-20-21/A0. 24 One problem is that regionalist and separatist parties in Spain are also gaining strength. Move- action. They finally decided to surround ments such as the 15M movement, PAH (Mortgage Victim‘s parliament on the 25th of September and Platform) or the Izquierda Unida (United Left) are attempting to build new connections and work together with other groups, as to do so regularly; the aim was to focus well as providing a central place for the question of autonomy in on a single centre of power. This deci- a new constitutional process and at the same time emphasise shared interests. In a way, this is similar to emphasising a class sion was taken in light of the relations perspective against neoliberalism in general. of re-founding Europe from below on the aimed at ensuring wide participation 31 agenda. Simply making new demands from below (as is currently fought for in would mean continuing to appeal pri- Chile, taking up lessons from Ecuador, marily to state institutions and political Bolivia and Venezuela) would question rulers; but they stopped listening a long the existing ruling constitution in Europe, time ago. But even if they were to listen, and their ‘headquarters’. Additionally, we do not trust them (anymore). this would also link the diverse positions In its new manifesto25 the Spanish 15M within movements and help construct a movement discusses how a process of ‘left-wing mosaic’: a common alterna- constituent assemblies can be developed tive aimed at re-founding Europe from from below. The movement is supported below. These interrelated processes in this by numerous other initiatives could act as condensation points that including unions and the United Left. The link mobilisation against the ‘headquar- double process of a constituent assem- ters’ to actions targeting its fundamental bly and a debt audit would provide for the transformation. At the same time these maximum participation of civil society. At processes – paraphrasing Walter Ben- the same time, these processes would jamin – can act as an emergency brake, correspond to the political forms of the a stoppage of the on-going disastrous new movements for real democracy, its austerity machine: this neoliberal Euro- councils-like structures of debate and pean project of rule has to stop. The Arab organisation, horizontally and diagonally Spring, the 15M movement and Occupy at the level of the neighbourhood, dis- were the first such stoppages. These trict and region, but also at the national movements need to be encouraged, in and European level. Importantly, this can the sense of connecting resistance and be started without a mandate from any politics from below that call for time and particular institution. And in contrast to use all of the time it will take to rebuild demands that are vital, but unattainable, Europe. this might be more effective, because However, without fundamentally ques- everything is at stake here, and it enables tioning and creating new institutions, everyone to participate. even a Greek government led by SYRIZA The debt audit highlights the illegiti- would not have a chance. The asym- macy of the rule of financial capitalism metries of power in Europe are immense. by questioning whether debts should Without overthrowing neoliberal govern- be settled with financial institutions that ments, the potential within constitutional were rescued by the state. Are not these processes and debt audits may just fizzle debts largely illegitimate, and therefore out. Whether a new type of party would unjust? Which debts should be repaid, be more sensible – as in Greece – or a and which should not? It would be essen- Frente Civico (a civil society association tial to discuss this in democratic consul- that does not seek government power) – tations and decision-making processes. as being discussed in Spain – to seize A debt tribunal could be held, similarly power will only become clear in time. to the one held in 2007 in Ecuador (see Both need to be done; neither should Candeias, 2011). But above all, a diag- 25 See: www.cronicapopular.es/2013/02/manifiesto-15m- onally-linked constitutional process la-via-para-el-cambio-social. 32 be left undone. There is no reason to enabled a clear class standpoint to be regard breaks with the existing EU and articulated instead of a nationalist cri- a re-foundation of Europe as opposites tique – for example, as in claims that the (Husson 2012: 30): one leads to the other. problem runs between crisis countries The Left Party’s manifesto states that: and ‘German taxpayers’. “The European Union needs a relaunch But there is the constant criticism, that and this includes a complete revision of the Left Party’s policies should not be the neoliberal, militaristic, and undem- confined only to ‘we are against’, a ocratic elements of EU primary law. We simple negation. As such, it is important therefore support a constitution that is to emphasize the many forward-looking shaped by citizens and is backed by a ref- proposals for handling the euro crisis and erendum that should be held in parallel in for a social Europe as part of a solidari- each EU member state. We are calling for ty-based process of European re-founda- nothing less than fundamental political tion. The Rosa Luxemburg Stiftung aims change.” to help further these discussions with analyses and studies such as those by Heiner Flassbeck and Costas Lapavitas 3.4 Winning the majority and this paper. Nevertheless, Axel Troost, in the heart of the beast? for example has pointed to the difficultly What does this actually mean for left- of turning the euro crisis into an issue for wing politics in Germany? Given Ger- the elections.26 Consequently, the posi- many’s unique political and economic tions of the Left Party should focus less power and its role as an important cause on the ‘great crisis’ and more on people’s as well as beneficiary of the euro crisis; in everyday lives. This should not be under- the face of a well-functioning crisis cor- stood as meaning that analyses and poratism, which has integrated a large suggestions for effectively overcoming part of the population; and given the the crisis are no longer needed; it merely fear of ‘Greek conditions’, the crisis pro- points to a different approach. vides little potential for politicization. The This would mean developing new and prospect of re-founding Europe or even original perspectives that are tied more developing a constitutional process, closely to the immediate needs of the which at least in southern Europe is a real population, but connecting them to possibility, is something that is extremely ‘European questions’; for example, a difficult to imagine in the current situa- European unemployment insurance, tion in Germany. which has already been discussed by the The Left Party’s clear rejection of the neo- (European) left. Clearly, such perspectives liberal crisis management, however, has should not drift towards the abstract. gained good media coverage and was What do I, as a nurse in Germany for certainly well received by supporters of instance, gain from a European unem- the party. It was particularly important ployment insurance? These are the ques- to repeatedly emphasize the causes tions that need to be answered. It would of the crisis to ensure that the critique also be possible to forge links with the was accompanied by solidarity with the 26 Strategy discussion with the chair of the Left Party on crisis victims and crisis countries. This 7.2.2012. first successful European citizens’ initia- has become more intensified, and living 33 tive, which ran under the slogan “Water is and working conditions have become a human right!” and which was directed precarious; wages are decreasing, and against the further privatisation of munic- working hours have become long and ipal service providers. unpredictable. Who takes care of them- Another possibility would be to revitalise selves and others? Public institutions are the common demand among left-wing being starved of resources. The question parties and social movements in the of a more equitable method of organising crisis countries for a debt audit at both and distributing reproductive labour – a the national and European level, by con- key feminist demand – has been side- necting it more closely with demands lined by neoliberalism and the crisis: that also reflect the specific situation can people – women – be found who in Germany. This is the case with the are willing to undertake the necessary so-called ‘debt brake’: it directly threat- reproduction for low pay? This is leading ens the precarious financial situation of to new global divisions. Our ‘imperial the municipalities (Reiner 2010). Clearly, way of life’ is destroying living condi- people are directly affected by the cuts to tions elsewhere, and exceeds ecological public service provision. Many debates limits. about social infrastructure take place Once again, struggles over modes of at the local level: from equipment in living are coming increasingly to the schools to the number of nursery places; fore.27 They were always present, but public transport, the re-municipaliza- have often been overshadowed by (tra- tion of ownership of water utilities and ditional) labour disputes – although this energy suppliers, to fighting for afforda- comparison is already unhelpful, as ble housing. It is at this level and in modes of production and modes of life these struggles where the crisis is most have always been very closely related: strongly felt. one leads to the other. It is individual Concentrating on the euro crisis as the people who have to suffer the resulting central field of contemporary devel- contradictions in everyday life and make opment blocks the politicization and decisions in order to ensure they are able struggle for the hearts and minds of the to stay active. This leads many people to people, because the crisis is presented call for change, for example in child care, as complex and distant from people’s education, health, nutrition, housing, or everyday problems. How do we want to to fight for more time and free spaces. live? What should tomorrow look like? This view of changes in the mode of What work is to be done so that every- living, work and reproduction makes it one is getting to work? How can society possible to view these individual and col- be preserved, expanded and developed? lective struggles as related and part of a The contradictions between the repro- whole. At the same time, this also makes duction of capital and people’s wishes it possible to identify contradictions, for a happy life, recreation, leisure, even within the left, that is, to develop the and participation has intensified: more conditions needed to prevent divisions, women are working, and family models are in motion. At the same time, work 27 See: LuXemburg 3/2012 and 4/2012. 34 to create the common, and organize just The left often assumes that circum- transitions. One example of a European stances and developments are ‘objec- perspective that links different struggles tive’, but there are good reasons to for basic social needs is to elaborate a develop political strategies from the per- concept of an unconditional socio-eco- spective of everyday lives and from peo- logical basic service provision of energy, ple’s capacity to act. water, mobility, Internet, etc., as well as free healthcare and education. This could Mario Candeias is a senior research fellow open up a wide field on which left-wing on capitalism critique and social analysis, politics could effectively build (Candeias and director of the Institute for Critical Social 2013). ­Analysis, at the Rosa Luxemburg Stiftung. Literature 35

Altvater, Elmar/Mahnkopf, Birgit Berlin, available at: www.rosalux.de/ (1993): Gewerkschaften vor der publication/36569/ein-fragwuerdiger- europäischen Herausforderung, weltmeister-deutschland-exportiert-­ Münster. arbeitslosigkeit.html. Anderson, Perry (2012): Deutsche Candeias, Mario (2010b): Interreg- Hegemonie und “Blaue Blume der num – Molekulare Verdichtung und Demokratie”, in: LuXemburg 2/2012, organische Krise, in: Demirović, Alex pp. 12–19. et al. (eds): VielFachkrise. Im finanz­ Bierbaum, Heinz (2013): Krisenkor­ dominierten Kapitalismus, Hamburg, poratismus, in: LuXemburg 1/2013, pp. 45–62. pp. 6–13. 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Hegemonie. rls_-uploads/pdfs/-sonst_-publikationen/ Grundrisse einer transnationalen kapi- RZ_OCCUPY_Dez2011.pdf. talistischen Produktions- und Lebens- Candeias, Mario (2013): Grundein­ weise, Berlin/Hamburg. kommen oder kollektiver Konsum?, Candeias, Mario (2008): Finanzkrise in: LuXemburg 3/2013 [forthcoming]. und neuer Staatsinterventionismus, Dellheim, Judith/Wolf, Frieder Otto Rosa-Luxemburg-Stiftung (ed), Stand- (2013): Neoliberale Modernisierung, um punkte 24/2008, Berlin, available at: globale Konkurrenzfähigkeit und welt- www.rosalux.de/fileadmin/rls_uploads/ weite Einflussnahme zu sichern – das pdfs/standpunkte_0824.pdf. Beispiel: “Pakt für die Wettbewerbsfähig­ Candeias, Mario (2009): Die letzte keit der französischen Industrie” (Gallois-­ Konjunktur. Organische Krise und ‘post- Bericht), Arbeitsmaterial für die Konfe­ neoliberale’ Tendenzen, in: Candeias (ed) renz linker Parlamentarier und Experten (2009): Neoliberalismus. Hochtechnolo- in Paris am 23.5.2013 [forthcoming]. gie. Hegemonie. Grundrisse einer trans- Dellheim, Judith/Zimmer, Gabi (2013): nationalen kapitalistischen Produktions- Offene Fragen zu Europa, ed. Rosa-Lux- und Lebensweise, New edition, Berlin/ emburg-Stiftung, Standpunkte 4/2013, Hamburg, pp. 7–22. Berlin, available at: www.rosalux. Candeias, Mario (2010a): Ein frag- de/-publication/39387/offene-fragen-zu- würdiger Weltmeister: Deutschland -europa.html. exportiert Arbeitslosigkeit, ed. Rosa-Lux- De Masi, Fabio/Krämer, Ralf (2012): emburg-Stiftung, Standpunkte 14/2010, Der Traum ist aus – Linke und Europäi­ 36 sche Union, in: LuXemburg 2/2012, märkte. Die Idee einer International Clea- pp. 46–51. ring Union, in: Candeias, Mario/Rilling, DGB [Deutscher Gewerkschafts- Rainer (eds): Krise. Neues vom Finanz- bund] (2012): Marshallplan für Europa, kapitalismus und seinem Staat, Berlin, Frankfurt a. 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Analysen Luxemburg argumente Green Is the whole World Transformation going bankrupt? Competing Strategic Projects Government debt: Analysis by Mario Candeias, May 2013 What it is and how it functions ISSN 2194-2951 By Stephan Kaufmann, Ingo Stützle, Available at: www.http://rosalux.de/ December 2012 publication/39522 ISSN 2193-5831 Available at: www.rosalux.de/ publication/38962 Recent Publications

Studien Manuskripte The systemic crisis From Revolution of the euro – to Coalition – true causes and Radical Left Parties effective therapies in Europe Study by Heiner Flassbeck, By Birgit Daiber, Cornelia Hildebrandt, Costas Lapavitsas, May 2013 Anna Striethorst (Ed.), July 2012 ISN 2194-2242 ISSN 2194-864X Available at: www.rosalux.de/ Available at: www.rosalux.de/ publication/39478 publication/38610 IMPRINT

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