Jayati Ghosh: the failed project of Europe

Jayati Ghosh, Jawaharlal Nehru University, New Delhi

Jayati Ghosh is Professor of Economics at the Centre for Economic Studies and Planning, School of Social Sciences, at the Jawaharlal Nehru University, in New Delhi, India. Her specialities include globalization, international finance, employment patterns in developing countries, macroeconomic policy, and issues related to gender and development. She has doctorate in economics from Cambridge University.



There is a stereotypical image of an abusive husband, who batters his wife and then beats her even more mercilessly if she dares to protest. Such violent behaviour usually reflects a failed relationship, unlikely to be resolved through superficial bandaging of wounds.

It is stomach-churningly hard to watch such bullies in action. But the world has been watching the negotiations in Europe over the fate of Greece in the Eurozone with the same sickening sense of horror and disbelief, as leaders of Germany and some other countries behave in similar fashion.

The extent of the aggression, the deeply punitive conditions being imposed for a very ungenerous bailout and the terrible humiliation and pain forced upon the Greek people are hard to explain in purely economic or even political terms. It seems to reflect some deep, visceral anger that has been awakened in the EU leadership by the sheer effrontery of a government of a small state that dared to consult its people rather than immediately bowing to their commands. The anger is also directed at the Greek people, who dared to vote in a referendum against the terms of a bailout package that offered them only more austerity, less hope and continued pain in the foreseeable future, just so that their country can continue to pay the foreign debts that everyone knows are ultimately unpayable.

The EU response to ignore completely the will of the Greek people as expressed in the referendum, and then to pushing even worse conditions on them for their resistance. These may be the most appalling and humiliating terms that have been seen in a non-war situation for any European nation, for the increasingly dubious advantage of staying within the eurozone.

Greece would become an economic protectorate, little more than a colony of Germany within the Eurozone. It will have no control over its fiscal policies, forced to sell valuable public assets just to keep trying to pay its creditors. It will have to reverse decisions to preserve some public employment (such as cleaning workers and security guards, whom it will now have to fire again). It will have to further cut pensions of elderly people who have already seen their incomes fall by 40 per cent. It will have to increase indirect taxes hitting the poor most. It will have to accept the constant presence of the external rulers, in the form of an IMF team that will monitor the budget and the activities of the Greek government. And the result of all this austerity will be more depression, in an economy that has been spiralling downwards for more than five years, encouraging the rise of rightwing zenophobic movements. This is a really prolonged Greek tragedy, with no clear end in sight.

EU leaders point to countries like Ireland and Spain and even Latvia, as supposed “success stories” of austerity because their governments took the bitter medicine and the economies are now recovering. This is nonsense. None of them has been made to suffer the extreme austerity imposed on Greece, and their much vaunted “recoveries” are on completely depressed levels of income that are still far lower than five years ago. Unemployment rates remain very high, even after the emigration of the young and of the best and brightest in these societies has made labour force numbers fall. They are being presented as successes only to promote a finance-driven approach to economic policy and camouflage the greater failure of the Eurozone to come out of stagnation.

The loudest European voices about how this is a betrayal of people’s will and how the current EU is incompatible with democracy today come from extreme rightwing parties like the National Front in France, the UK Independence Party, along with Beppe Grillo’s Five Star Movement in Italy. Centre-Left parties are too bound up in the flawed European project to protest, and more progressive movements like Podemos in Spain are in a state of shock. Indeed, the desire to prevent the rise of such progressive movements is probably a major force determining the bellicose stance of the EU towards Syriza.

But this drama is not over: the humiliation of Greece today will come back to torment European leaders tomorrow. The ideal of a united Europe is demolished, and the reality of the project is laid bare: in the interests of finance capital, enforced by the German state and fundamentally antagonistic to democracy and social justice.

This unhappy European marriage cannot last. The only questions now are: how long will it take before the breakdown becomes explicit? How much more pain and violence will be forced on people across Europe before that final break? And how long will German government bullying in the interests of finance capital be tolerated by the people of Europe and ultimately by the people of Germany themselves?