Yanis Varoufakis's Blog, page 86
March 14, 2019
A European Spring is possible – The Nation
The 2008 global financial crisis—the modern 1929 crash—set off a vicious chain reaction across Europe. By 2010 it had irreparably damaged the foundations of the eurozone, causing the establishment to bend its own rules and commit crimes against logic in order to bail out its banker friends. By 2013 the neoliberal ideology that had legitimized the EU’s oligarchic technocracy had plunged millions into misery, even through the enactment of official policies: socialism for the financiers and harsh austerity for the many. These policies were practiced as much by conservatives as by social democrats. By 2015 the surrender of the Syriza government in Greece had divided and disheartened the left, robbing Europe of the short-lived hope that progressives’ rising up in the streets would alter the balance of power.
Since then, anger has combined with hopelessness to create a vacuum, soon filled by the organized misanthropy of a Nationalist International triumphing across Europe, and making Donald Trump a very happy man. Against the background of an establishment that increasingly resembles the unhappy Weimar Republic, and of the recalcitrant racists produced by the crisis’s deflationary forces, the European Union is fragmenting. With Angela Merkel on the way out and Emmanuel Macron’s European agenda dead on arrival, the European election in May could prove the last chance progressives have to make a difference at a pan-European level.
Since it was created in 2016, DiEM25 (Democracy in Europe Movement 2025) has resolved to make the most of this opportunity. First we prepared our program, the New Deal for Europe. Then we invited other movements and parties to help develop it and to create, together, our European Spring—the first transnational list pursuing a common policy agenda across Europe. Before discussing this project, the left must address two issues dividing and weakening progressives across Europe: borders and the EU.
BORDERS VS FREE MOVEMENT
Something very odd has been happening in recent years: Many on the left have come to view open borders as bad for the working class. Jean-Luc Mélenchon of La France Insoumise has said several times, “I’ve never been in favor of freedom of arrival.” In a speech on posted workers at the European Parliament in July 2016, he said migrants were “taking the bread out of the mouths” of French workers. He has since regretted this statement, though his views on the impact of migration on French wages have not changed.
This is not new. In 1907 Morris Hillquit, the founder of the Socialist Party of America, tabled a resolution to end “the willful importation of cheap foreign labor,” arguing that migrants were a “pool of unconscious strikebreakers.” What is new is that much of the left seems to have forgotten Lenin’s fierce reaction in 1915 to Hillquit’s call for curbs on migration: “We think that one cannot be internationalist and be at the same time in favor of such restrictions.… Such socialists are in reality jingoists.”
Lenin had provided the context in an article on October 29, 1913: “There can be no doubt that dire poverty alone compels people to abandon their native land, and that the capitalists exploit the immigrant workers in the most shameless manner. But only reactionaries can shut their eyes to the progressivesignificance of this modern migration of nations.… capitalism is drawing the masses of the working people of the whole world…breaking down national barriers and prejudices, uniting workers from all countries…”
DiEM25 adopts Lenin’s apt analysis: Walls that curb the free movement of people and goods are a reactionary response to capitalism. The socialist response is to bring down the walls and allow capitalism to undermine itself, while we organize transnational resistance to capitalist exploitation everywhere. It is not migrants who steal the jobs of native workers but governmental austerity, which is part of the class war waged on behalf of the domestic bourgeoisie.
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This is why we are adamant that xenophobia-lite must never be allowed to contaminate our agenda. As my friend Slavoj Žižek says, a leftist nationalism is a cruel and inane response to National Socialism. So DiEM25’s position on newcomers is that we refuse to differentiate between migrants and refugees. And we call upon Europe to #LetThemIn.
THE LEFT’S BEST STRATEGY
Comrades from across Europe call us utopian and say the EU cannot be reformed. They may well be right. So for argument’s sake, let us agree that the EU is unreformable. Is progressives’ best response to adopt Lexit (the left-wing campaign for the controlled disintegration of the EU)? Some of my happiest memories are of addressing large audiences in Germany in 2015, soon after Syriza’s surrender to Angela Merkel and the troika (the International Monetary Fund, European Central Bank, and European Commission). They were desperate to convey that what had been done to Greece had not been done in their name, the name of the German people. I remember how relieved they were on hearing the DiEM25 call to form one transnational movement, to unify, to fight together, to seize control of EU institutions—European Investment Bank (EIB), ECB etc—and redeploy them in the interests of all Europeans.
I still feel the elation of our German comrades on hearing our idea to run Greek candidates in Germany and German candidates in Greece to signify that our movement is transnational, that it intends to take over the neoliberal order’s institutions everywhere and at once, not to wreck them but to make them work for the many, in Brussels, Berlin, Athens, Paris. Everywhere.
Compare this with how they would have felt had I told them that the EU was unreformable and must be disbanded; that Greeks must fall back to their nation state and try to build socialism there, while Germans did the same. Once we succeeded, our delegations could meet to discuss collaboration between our newly sovereign progressive states. Our German comrades would undoubtedly have felt deflated, and returned home depressed, thinking that they would have to face the German establishment as Germans, not as part of a transnational movement.
If I am right, it does not matter whether the EU is or isn’t reformable, but it does matter that we put forward concrete proposals on what we would do with EU institutions. Not utopian proposals but complete descriptions of what we would do this week, next month, in the next year, under the existing rules and with the existing instruments—how we would reassign the role of the awful European Stability Mechanism, reorient the ECB’s quantitative easing, and finance immediately, and without new taxes, a green transition and campaign against poverty.
Why such a detailed agenda? To show voters that there is an alternative, even within the rules designed by the establishment to further the interests of the top 1 percent. No one expects the EU institutions to adopt our proposals, least of all us. All we want is for voters to see what could be done, instead of what is being done, so that they can see through the establishment without turning to the xenophobic right. This is the only way the left can escape its confines and build abroad progressive coalition.
TOWARD A DEMOCRATIC CONSTITUTION
DiEM25’s New Deal for Europe aims at this; it shows how the lives of the majority of people can be improved in the short run under existing rules and with the current institutions. And it maps out the transformation of these institutions while charting a constitutional assembly process that will, in the longer run, lead to a democratic European constitution to replace all existing treaties. And it demonstrates how the new mechanisms we will be introducing from day one can help us pick up the pieces if, despite our best efforts, the EU disintegrates.
Everyone talks about the importance of the green transition. What they do not say is where the money will come from and who will plan it. Our answer is clear: Europe needs to invest €2 trillion between 2019 and 2023 in green technologies, energy etc. We propose that the EIB issues an additional volume of its bonds, €500 billion annually for four years, and that the ECB announces that, if their value drops, it will purchase these on the secondary bond market. With that announcement, and the glut of savings around the world, the ECB will not have to spend a single euro, as the EIB bonds will sell out. A new European Green Transition Agency, modeled on the Marshall Plan’s Organization for European Economic Cooperation (the OECD’s precursor), will channel those funds to green projects across the continent.
This proposal requires no new taxes, builds on an existing European bond, and is fully legal under existing rules. The same applies to our other proposals, such as our Anti-Poverty Fund: We propose that the billions of profits of the European System of Central Banks (from assets purchased under the ECB’s quantitative easing or from the Target2 payment system) be used to provide every European under the poverty line with food, shelter, and energy security.
Another example is our plan to restructure the eurozone’s public debt: The ECB mediates between states and money markets to reduce their total debt burden, but without printing money or making Germany pay for, or guarantee, the public debt of the more indebted countries.
As these demonstrate, our New Deal combines technically competent plans, implementable under the EU’s existing framework, with a radical departure from austerity and the troika’s bailout logic. And it goes further by tabling new institutions that prepare for a post-capitalist European future.
A plan for post-capitalism proposes to partly socialize capital and the returns from automation: Big business corporations’ right to operate in the EU will be conditional on transferring a percentage of their shares to a new European Equity Fund. The dividends from these will then fund a Universal Basic Dividend (UBD) to be paid to each European citizen independently of other welfare payments or unemployment insurance.
Our proposals for reforming the euro are another radical change. Before getting bogged down in changing the charter of the ECB, we plan to create a public digital-payments platform in every eurozone country. Using their national tax office’s existing digital platform, taxpayers would have the opportunity to purchase digital tax credits, which they can use to pay one another or to pay future taxes at a substantial discount. These credits would be denominated in euros but transferable only between taxpayers within a single country, so would be impervious to sudden capital flight.
Governments would be able to create a limited number of these fiscal euros, to be given to citizens in need or used for the funding of public projects; fiscal euros would allow stressed governments to stimulate demand, lessen the tax burden, and ultimately reduce the crushing power of the ECB and costs of exiting the euro (or of the euro’s disintegration). In the long term, public digital-payment platforms would form a managed system of country-specific euros that work like an International Clearing Union, a modern version of John Maynard Keynes’s 1944 vision for the Bretton Woods system, which sadly failed to materialize.
Our New Deal for Europe is a comprehensive plan for smartly redeploying existing institutions in the interests of the majority, planning for a radical, post-capitalist green future, and preparing to pick up the pieces if the EU collapses.
A EUROPEAN SPRING IS POSSIBLE
The left’s great foes are disunity and incoherence. Unity is crucial, but it should not be pursued at the expense of coherence. Consider the state of the European Left party: How can it appeal to voters this May when it is represented in Greece by a party that, in government, implements the harshest austerity in the history of capitalism on behalf of the troika, while many of its leading lights in countries like France and Germany are euroskeptic?
Well-meaning left-wing friends ask, “Why doesn’t DiEM25 join up with Jean-Luc Mélenchon’s La France Insoumise or Sahra Wagenknecht and Oskar Lafontaine’s Aufstehen movement in Germany? How can the left make a difference if you fail to unite?” The reason is simple: Our duty is to create unity on a foundation of radical, rational, and internationalist humanism. This means a common agenda for all Europeans and a radical policy of an Open Europe that recognizes borders as scars on the planet and newcomers as welcome. Nothing less will do.
Our bid for unity was based on a simple idea: DiEM25 invited all progressives to participate in the joint authorship of our New Deal for Europe on the basis of radical, humanist Europeanism. Our call was answered. Génération-s (France), Razem (Poland), Alternativet (Denmark), DemA (Italy), MeRA25 (Greece), Demokratie in Europa (Germany), Der Wandel (Austria), Actua (Spain), Livre (Portugal) joined in. More movements are joining now. Together we have formed the European Spring coalition that will run in May in the European Parliament election to push for our project.
Our message to Europe’s authoritarian establishment: We will resist you through a radical program that is technically more sophisticated than yours. Our message to the fascistic xenophobes: We will fight you everywhere. Our message to our comrades of the European left: You can expect unlimited solidarity from us, and one day our paths will converge in the service of a radical, transnational humanism.
Yanis Varoufakis is the former finance minister of Greece and co-founder of the Democracy in Europe Movement 2025.
THE NATION’s website version can be found here.
March 12, 2019
Το Δικαστήριο της ΕΕ επέτρεψε στην ΕΚΤ να κρατά μυστική γνωμοδότηση για την νομιμότητα του κλεισίματος των ελληνικών τραπεζών. Εμείς ασκούμε έφεση!
Τον Iούνιο του 2015, η ΕΚΤ έκλεισε τις ελληνικές τραπεζών, επιβάλλοντας έμμεσα περιορισμούς στις συναλλαγές (capital controls), με ανυπολόγιστο κόστος για την ελληνική οικονομία. Γιατί; Για να εκβιάσει τον ελληνικό λαό να ψηφίσει ΝΑΙ στο δημοψήφισμα, να πνίξει την Ελληνική Άνοιξη, και να επιβάλει στην χώρα το 3ο Μνημόνιο – δηλαδή να μονιμοποιήσει την Χρεοδουλοπαροικία μέσω της νέων υφεσιακών και αντικοινωνικών μέτρων που από το 2019 ερημοποιούν την Ελλάδα.
Η γνωμοδότηση
Το επιχείρημα του Διοικητικού Συμβουλίου της ΕΚΤ, και του Προέδρου της κ. Μάριο Ντράγκι, ήταν ότι η ΕΚΤ έδρασε νομίμως, τεχνοκρατικά και χωρίς πολιτική σκοπιμότητα. Όμως, όπως έμαθα από πηγές εντός της ΕΚΤ, ο κ. Ντράγκι δεν ήταν σίγουρος για την νομιμότητα των αποφάσεων της ΕΚΤ. Για αυτό τον λόγο παρέκαμψε τις νομικές υπηρεσίες της ΕΚΤ ζητώντας, επί πληρωμή, νομική γνωμάτευση από ιδιωτικό νομικό γραφείο.
Τον Ιούλιο του 2015, με τον συνάδελφο γερμανό ευρωβουλευτή Φάμπιο Ντε Μάσι, ζητήσαμε αντίγραφο εκείνης της νομικής γνωμάτευσης από τον κ. Ντράγκι, δεδομένου ότι συντάχθηκε με χρήματα των ευρωπαίων πολιτών για να ρίξει φως στην νομιμότητα μιας τόσο κρίσιμης απόφασης που θέτει ερωτήματα για την πολιτική ανεξαρτησία της ΕΚΤ και για το κατά πόσον η λαϊκή κυριαρχία χωρών σε «πρόγραμμα» είναι συμβατή με την δυνατότητα της ΕΚΤ να κλείνει τις τράπεζές τους όταν οι κυβερνήσεις τους δεν «συμμορφώνονται» με τις επιταγές της.
Ο κ. Ντράγκι απάντησε εγγράφως ότι αρνείται να δημοσιοποιήσει την εν λόγω νομική γνωμάτευση επικαλούμενος την «υποχρέωσή του να προστατεύσει» την εμπιστευτικότητα της γνωμάτευσης του εν λόγω ιδιωτικού νομικού γραφείου.
Με την παραλαβή της άρνησης του κ. Ντράγκι, αναθέσαμε στον έγκριτο Καθηγητή Δημόσιου, Ευρωπαϊκού και Διεθνούς Δικαίου Andreas Fischer-Lescano (Πανεπιστήμιο Bremen, Γερμανία) να μας παράσχει νομική γνωμάτευση με το εξής ερώτημα: «Δικαιολογείται νομικά η άρνηση του κ. Ντράγκι να δημοσιοποιήσει την νομική γνωμάτευση περί της νομιμότητας των αποφάσεων της ΕΚΤ που έφεραν το κλείσιμο των ελληνικών τραπεζών;»
Η γνωμοδότηση του Καθηγητή Fischer-Lescano ήταν κατηγορηματική: Η ΕΚΤ δεν διαθέτει νομικά επιχειρήματα ώστε να μπορεί να αρνηθεί την δημοσιοποίηση των γνωμοδοτήσεων που ζήτησε σχετικά με τις ενέργειές της και, συνεπώς, η άρνηση του κ. Ντράγκι παραβιάζει τις αρχές διαφάνειας της Ευρωπαϊκής Ένωσης και το δικαίωμα των πολιτών στην ελεύθερη πρόσβαση στην πληροφόρηση (freedom of information).
Η καμπάνια μας
Στην βάση της γνωμοδότησης του Καθηγητή Fischer-Lescano, ξεκινήσαμε πανευρωπαϊκή καμπάνια μαζεύοντας πάνω από 30 χιλιάδες υπογραφές.
Με αυτές τις χιλιάδες ευρωπαίων να υποστηρίζουν την καμπάνια μας, υποβάλαμε επίσημο αίτημα (mass freedom of information request) προς την ΕΚΤ και τον Πρόεδρό της για δημοσιοποίηση της σχετικής νομικής γνωμάτευσης. Το αίτημα αυτό το προσυπέγραψαν ο Benoît Hamon, Υποψήφιος τότε του Σοσιαλιστικού κόματος για τη Γαλλική Προεδρία, η Katja Kipping, Συμπρόεδρος, Die Linke, Γερμανία, και η Gesine Schwan, δύο φορές υποψήφια του SPD για την Προεδρία της Ομοσπονδιακής Δημοκρατίας της Γερμανίας, Πρόεδρος του Viadrina European University. Από τον πανεπιστημιακό χώρο, συνυπέγραψαν οι:
Klaus Dörre, Πανεπιστήμιο Friedrich-Schiller, Jena, Γερμανία
James K. Galbraith, Πανεπιστήμιο του Texas, Austin, ΗΠΑ
Rudolf Hickel, Πανεπιστήμιο Bremen, Γερμανία
Gustav A. Horn, Hans-Böckler-Stiftung, Γερμανία
Aidan Regan, University College Dublin, Ιρλανδία
Jeffrey Sachs, University of Columbia, ΗΠΑ
Joseph Vogl, Πανεπιστήμιο Humboldt, Γερμανία
Arthur Gibson, Πανεπιστήμιο του Cambridge, Βρετανία
Η απάντηση της ΕΚΤ ήταν, και πάλι, αρνητική. Έτσι, μαζί με τον Φάμπιο Ντε Μάζι απευθυνθήκαμε πλέον στο Δικαστήριο της ΕΕ.
Η απόφαση του Δικαστηρίου της ΕΕ
Οι τρεις δικαστές απεφάνθησαν σήμερα, Τρίτη 12 Μαρτίου 2019, ως εξής:
“Αντίθετα με την άποψη των εναγόντων, η ΕΚΤ δικαιολογημένα έλαβε υπ’ όψιν της τον υποθετικό αντίκτυπο που θα είχε η κοινοποίηση της γνωμοδότησης στον “χώρο σκέψης της” [“its space to think”] το 2015 αλλά και μετά το 2015.”
Εν συντομία, οι τρεις δικαστές αποδέχθηκαν πλήρως το σαθρό σκεπτικό της ΕΚΤ, χωρίς την παραμικρή νομική αιτιολόγηση. Το επιχείρημα ότι εάν οι ευρωπαίοι πολίτες διάβαζαν την νομική γνωμοδότηση που πλήρωσαν (περί της νομιμότητας των πράξεων της ΕΚΤ) θα περιορίζονταν η δυνατότητα της ΕΚΤ να.. σκέφτεται δεν μπορεί να αντέξει στο φως ούτε της πιο καλοπροαίρετης κριτικής.
Για αυτό θα ασκήσουμε έφεση στο Ευρωπαϊκό Δικαστήριο
Τα γεγονότα του καλοκαιριού του 2015 επιβεβαιώνουν την τερατώδη, και ανάρμοστη, ισχή της ΕΚΤ επί των δημοκρατικά εκλεγμένων κυβερνήσεων της Ευρωζώνης, δεδομένης της δυνατότητάς της να κλείνει τις τράπεζες ενός κράτους-μέλους. Η αυθαίρετη και αδιαφανής άσκησή της από μη εκλεγμένους κεντρικούς τραπεζίτες που συσκέπτονται και αποφασίζουν κεκλεισμένων των θυρών να κλείσουν οι τράπεζες ενός κράτους-μέλους καταργεί την δημοκρατία και, έτσι, απαξιώνει την Ευρωπαϊκή Ένωση στα μάτια των λαών της.
Για αυτό τον λόγο, μαζί με τον Φάμπιο Ντε Μάζι, θα ασκήσουμε έφεση στο Ευρωπαϊκό Δικαστήριο. Είναι το λιγότερο που μπορούμε να κάνουμε εναντίον του αυταρχισμού τόσο της ευρωπαϊκής ολιγαρχίας όσο και της Εθνικιστικής Ευρωσκεπτιστικής Διεθνούς που τρέφεται από αυτές τις πρακτικές.
EU Court defends the ECB’s right to cover up its illegal closure of Greece’s banks
On 29th June 2015 the ECB decided to close down Greece’s banks. Why? The ECB acted in a naked attempt to prevent the newly-elected Greek government from renegotiating the country’s public debt, fiscal policy and reform agenda. Using Greece’s banks, instead of its… tanks, the ECB spearheaded a coup d’ etat against a democratically elected pro-European government on behalf of its troika of lenders.
The legal opinion
The ECB must have been so worried about the legality of its heavy-handed actions that it commissioned a legal opinion from a private law firm, which it paid for with public funds.
Our petition
Together with MEP Fabio de Masi, we petitioned the ECB to release this legal opinion. Mr Mario Draghi, ECB President, refused arguing that confidentiality prevented him from releasing the legal opinion. We retorted that confidentiality applies to the law firm but not to its client – the ECB, that commissioned the legal opinion on behalf of Europeans, has a duty to release it. We asked Mr Draghi publicly:
“Mr Draghi, if you acted legally, according to EU Law and the ECB charter, why do you not release the legal opinion you commissioned over the ECB’s actions that led to the closure of Greece’s banks?”
Following the ECB’s continued refusal to release the legal opinion, we took the matter to the EU Court and also began a petition that gathered more than thirty thousand signatures.
The EU Court’s full adoption of the ECB’s refusal – and language
The three judges of the EU Court delivered their verdict on Tuesday 12th March 2019, as follows:
“Contrary to the applicants’ claim, the ECB could legitimately take into account the hypothetical effects that the disclosure of the contested document could have on its space to think in 2015 and also after 2015”
In short, the three judges disgraced themselves by copy-pasting the ECB’s claims as their judicial verdict, without a smidgeon of a legal explanation of the merits of the ECB’s position. The argument that if European citizens could read the legal opinion on the legality of the ECB’s action would limit the ECB’s “space to think” does not deserve even a rebuke.
We shall appeal the verdict and take the matter to the European Court of Justice
What the events of the summer of 2015 reveal is the exorbitant power of the ECB to close down a Eurozone country’s banks. Exercising this power with decisions made behind closed doors and on the basis of undisclosed arguments is inconsistent with European democracy. The least Europeans can expect is access to legal opinions that they have paid for regarding the exercise of the ECB’s enormous power.
This is why MEP Fabio de Masi and myself will appeal the EU Court decision to the European Court of Justice. Failing to do so would be an enormous gift to the eurosceptic Nationalist International that is feeding of the EU’s incompetent authoritarianism.
WATCH THIS SPACE FOR OUR CONTINUED CAMPAIGN IN THE INTERESTS OF TRANSPARENCY AND EUROPEAN DEMOCRACY!
March 11, 2019
The European Spring holds the answer to the fragmenting EU’s plight – The Guardian, 11 MAR 2019
The European Union is fragmenting at a time when Europeans need it the most. Emmanuel Macron is right to point this out. But he is wrong to push another top-down agenda that lacks credibility, fails to speak to European’s concerns, and entrenches the democratic deficit at the heart of the EU. By entrusting Europe’s renewal to its unaccountable bureaucrats, Macron’s programme will only deepen the discontent that has given rise to the ultra-right he claims to oppose.
Over the past 12 months, we have worked with political parties, activists and practitioners to develop a different kind of renewal programme – one that offers immediate solutions to Europe’s overlapping crises, that gives control back to citizens in their communities, and that sets out a long-term vision for our democratic union. It is called a New Deal for Europe and it will be put to voters across the continent in May’s European parliament elections by our European Spring – the transnational coalition of progressive forces brought together by Democracy in Europe Movement (DiEM25).
The current political groupings in the European parliament are cynical alliances of convenience, comprising disparate forces and lacking a coherent agenda for Europe. Traditional conservatives are torn between moderates such as Angela Merkel and recalcitrant xenophobes such as Hungarian prime minister Viktor Orbán. The social democrats are trying to wean themselves off their destructive austerity agenda while being led down the path to electoral oblivion by Frans Timmermans, the Dutch first vice-president of the European commission and austerian hawk. The European Left party contains factions that disagree fiercely among themselves on migration, the euro and their broader attitude toward the EU. The European Greens remain divided on fiscal policy – and even on the funding of their worthy green transition programme.
In 2017, we invited Europe’s progressive movements to an open discussion of what needs to be done to tackle Europe’s five crises: underinvestment in the green transition, rising precariousness in the labour market, the crisis of the banking sector, the mountain of public debt that gave cover to austerity policies and, last but not least, the deep contempt for democracy in the EU’s decision-making centres. That gathering developed organically into the transnational, pan-European coalition we call the European Spring – the electoral vehicle that will present our New Deal to Europe’s voters this coming May in at least 10 countries.
Unlike most electoral manifestos, written in backrooms by special advisers, our New Deal was co-authored via open consultation with citizens and ratified by a transnational democratic vote in which every European could participate. It contains ambitious measures that could be implemented tomorrow morning, such as a Green New Deal that would plough €500bn each year into Europe’s ecological transition and a solidarity programme that would redirect central bank profits to an emergency anti-poverty fund.
But while replete with pan-European “big picture” policies, our New Deal will not result in more centralised power in the hands of unelected European bodies. Instead, by unshackling governments from fiscal constraints and competition directives enforced by Brussels, our New Deal will enhance democratic authority at every level – a sharp contrast to Macron’s “ambitious” agenda. There will be no Jupiterian salvation for the EU – Macron’s tenure has confirmed as much. Only a programme that citizens across Europe devise and implement can restore hope and enthusiasm in their hearts and minds.
May’s European parliament elections are presented as a faceoff between two camps: liberal Europhiles versus illiberal Eurosceptics: Emmanuel Macron versus Matteo Salvini. Or it is the “false prophets” versus the “European patriots”. Alas, this is a misleading account. Establishment figures such as Macron have lost their credibility even with centrist citizens. To rally voters, they rely on the threat that nationalists such as Salvini represent. Equally, strongmen such as the Italian deputy prime minister desperately need a hapless European establishment to fashion themselves as worthy rebels.
The only way to break this repugnant loop-wrecking Europe is a credible New Deal for Europeans – an antidote to the depressing belief that the only alternative to this EU is its breakup. In other words, our position does not fall on either side of the dichotomy between so-called pro-European and anti-European forces. We are for our Europe, but against this Europe. The purpose of European Spring is to revive Europeans’ belief that the EU is ours to shape and that we can start doing this tomorrow morning even within the EU’s current institutional setting – before moving on to transforming and democratising those very institutions in the medium term.
Europe’s crises – economic, social, political, and ecological – are all transnational in scope. No country can end tax evasion or fight climate change on its own. The old model of European politics revolving around national parties that form coalitions of convenience is anachronistic at best, reactionary at worst. That is why we are building a transnational movement, inviting all progressive forces to join us in demanding a New Deal for Europe. The doors of our coalition remain open.
For the The Guardian’s site click here.
Στις αγορές ακόμα πιο πτωχευμένοι – ΕφΣυν 8 ΜΑΡ 2019
Την περασμένη Τρίτη το κράτος μας «βγήκε στις αγορές» δανειζόμενο 2,5 δισ. ευρώ από ιδιώτες μέσω έκδοσης του πρώτου 10ετούς ομόλογου από το 2010. Κυβέρνηση, τραπεζίτες και σύσσωμα τα ΜΜΕ πανηγύρισαν αυτή την «έξοδο». Ο ελληνικός λαός, όμως, και ιδίως η Αριστερά, μόνο θλίψη και αγανάκτηση δικαιούμαστε να νιώσουμε, για τους λόγους που εξηγούσα στο πιο πάνω αναφερθέν άρθρο… πέντε χρόνια πριν.
Το Μνημονιακό Τόξο πασχίζει να μας πείσει πως η έξοδος στις αγορές ήταν ένα γενναίο βήμα που σηματοδοτεί την ανάκαμψη της χώρας. Τα επιχειρήματά τους είναι τρία:
Επιτόκιο δανεισμού 3,9%, το χαμηλότερο από το 2006.
Τετραπλάσια ζήτηση από «επενδυτές» από την ποσότητα ομολόγων που προσφέρθηκαν (11,8 δισ., από τα οποία τελικά δανειστήκαμε τα 2,5 δισ.).
Δανειστήκαμε, παρά το γεγονός ότι δεν είχαμε ανάγκη άμεση, μόνο και μόνο για να σηματοδοτήσουμε στο παγκόσμιο στερέωμα ότι η Ελλάδα επέστρεψε στις αγορές, ότι γίναμε ξανά «κανονική» χώρα.
Κανένα από αυτά τα τρία επιχειρήματα δεν αντέχει στο φως της λελογισμένης κριτικής. Ας τα πάρουμε ένα ένα.
Πόσο χαμηλό είναι το επιτόκιο δανεισμού;
Πράγματι, επιτόκιο 3,9% είχαμε να δούμε (για 10ετές ομόλογο) από το 2006. Ομως «ξεχνούν» να μας πουν ότι τότε, εν έτει 2006, το αντίστοιχο επιτόκιο με το οποίο δανειζόταν η Γερμανία ήταν 3,6% ενώ σήμερα είναι μόλις 0,13% – όπερ μεθερμηνευόμενον, για κάθε 1.000 ευρώ 10ετών ομολόγων που εκδίδει η Γερμανία (με επιτόκιο 0,13%) επιβαρύνεται με 101 ευρώ, ενώ το ελληνικό χρέος, με επιτόκιο 3,9%, επιβαρύνεται με… 446 ευρώ.
Το καλό της αριθμητικής είναι ότι δεν σηκώνει πολιτικές διαφωνίες: έχουμε ένα βουνό χρέους (περί τα 320 δισ.) και ένα κατά πολύ μικρότερο βουνό συνολικών εισοδημάτων (ΑΕΠ περί τα 180 δισ.). Οσο το βουνό του χρέους ψηλώνει γρηγορότερα απ’ ό,τι ψηλώνει το βουνό του ΑΕΠ, το χρέος γίνεται λιγότερο διαχειρίσιμο. Νέος δανεισμός δεν επιβαρύνει το χρέος μόνο εφόσον το επιτόκιο είναι ίσο με τον ρυθμό αύξησης του ΑΕΠ. Μπορεί το επιτόκιο δανεισμού σήμερα να είναι κοντά σ’ εκείνο του 2006 (3,6% το 2006, 3,9% σήμερα) όμως το ΑΕΠ μας σε τιμές αγοράς το 2006 μεγεθυνόταν κατά 9,8% ενώ σήμερα μεγεθύνεται κατά… 2% με 3% στην καλύτερη περίπτωση.
Συμπερασματικά, και άνευ αμφιβολίας, η πρόσφατη «έξοδος στις αγορές» κατέστησε το ήδη μη διαχειρίσιμο χρέος μας ακόμα λιγότερο διαχειρίσιμο.
Τότε γιατί οι επενδυτές έτρεξαν να μας δανείσουν;
Η κυβέρνηση απαντά ότι η «προαγωγή» της πιστοληπτικής ικανότητας του κράτους από τη Moody’s (στο επίπεδο B1) γέμισε τους επενδυτές με αισιοδοξία για την ανάκαμψη της Ελλάδας και το αξιόχρεο του κράτους μας. Τίποτα δεν απέχει από την αλήθεια περισσότερο.
Η κίνηση της Moody’s να αναβαθμίσει το ελληνικό δημόσιο χρέος κατά δύο «σκαλιά» δεν αρκεί για να κάνει τις τράπεζες να αγοράσουν το νέο ομόλογο, καθώς η ΕΚΤ απαιτεί άλλα τέσσερα «σκαλιά» αναβάθμισης πριν δώσει το πράσινο φως στις τράπεζες να το αγοράσουν. (Ουσιαστικά, η ΕΚΤ αρνείται στις τράπεζες που θα το αγόραζαν να το χρησιμοποιούν ως εχέγγυο για να δανείζονται από την ΕΚΤ). Ετσι, μόνο τα ιδιωτικά ταμεία υψηλού ρίσκου (hedge funds) αγόρασαν το νέο ομόλογο, παρά το γεγονός ότι ποτέ δεν πείστηκαν ότι το χρέος μας έγινε «βιώσιμο». Τότε γιατί το αγόρασαν;
Το αγόρασαν για δύο λόγους: το πολύ υψηλό επιτόκιο (3,9%, όταν τα γερμανικά ομόλογα αποδίδουν 0,13%) και το γεγονός ότι το μεγάλο μέρος του χρέους μας το χρωστάμε στην τρόικα και όχι στους ιδιώτες. Κρίνουν, λοιπόν, ότι όταν θα έρθει η στιγμή για νέο «κούρεμα» (λόγω της συνεχιζόμενης χρεοκοπίας μας), αυτό δεν θα πλήξει τους ίδιους (καθώς προστατεύονται από το αγγλικό δίκαιο στο οποίο υπάγεται –δυστυχώς– το νέο ομόλογο), αλλά τους Ευρωπαίους φορολογούμενους.
Περιληπτικά, τα γνωστά όρνια των αγορών μαζεύτηκαν άλλη μια φορά γύρω από το κουφάρι της ελληνικής οικονομίας τσιμπολογώντας ό,τι έμεινε, δανείζοντάς μας με επιτόκιο που επιβαρύνει κι άλλο ένα δυσβάστακτο, μη διαχειρίσιμο χρέος.
Δανειστήκαμε παρά το γεγονός ότι δεν είχαμε ανάγκη να δανειστούμε;
Φέτος, εντός του 2019, το κράτος πρέπει να αποπληρώσει 24 δισ. χρέους, συν άλλα 5 δισ. δανείων από διεθνείς οργανισμούς που «ωριμάζουν». Δηλαδή, 29 δισ. για ένα κράτος με συνολικά έσοδα περί τα 53 δισ. Πρόκειται για συντριπτικούς αριθμούς που αποτυπώνουν τη Χρεοδουλοπαροικία στην οποία ζούμε. Τότε γιατί επιμένει το Μνημονιακό Τόξο ότι δεν είχαμε ανάγκη να δανειστούμε αλλά το κάναμε για να δείξουμε ότι μπορούμε; Ο λόγος είναι ότι η τρόικα θα μας δανείσει περί τα 30 δισ. – το λεγόμενο, κατ’ ευφημισμόν, «μαξιλαράκι» που, στην ουσία, είναι ακάνθινο στεφάνι καθώς κι αυτό το ποσόν θα προστεθεί, τοκιζόμενο, στο μη διαχειρίσιμο χρέος.
Να γιατί η κυβέρνηση εκδίδει ομόλογα: επειδή από του χρόνου θα καλείται να καταβάλλει τοκοχρεολύσια τόσο στην τρόικα όσο και στους ιδιώτες, που θα δανειζόμαστε, αν και πτωχευμένοι, από τις αγορές με τη διαμεσολάβηση της τρόικας. Δηλαδή, ακριβώς όπως έγραφα τον Φεβρουάριο του 2014: «Βουλιάζοντας στον βούρκο της μακροπρόθεσμης πτώχευσης αλλά, βέβαια, παραμένοντας στις αγορές».
Ερωτήματα προς φίλους του ΣΥΡΙΖΑ
Σε αυτό το σημείο απευθύνω δύο ερωτήματα στους συντρόφους με τους οποίους πορευτήκαμε όλο το 2014 και τους πρώτους μήνες του 2015.
Θυμάστε ότι συμπορευτήκαμε επειδή συμφωνήσατε με την πιο πάνω ανάλυση που καταδείκνυε ότι η έξοδος στις αγορές ενός πτωχευμένου κράτους οδηγεί στη Χρεοδουλοπαροικία; Θυμάστε πως τον Απρίλιο του 2014 συμμεριστήκατε αυτή την κριτική στην έκδοση του ομολόγου του κ. Στουρνάρα, την τότε «έξοδο στις αγορές» που γιόρταζε αμετροεπώς ο κ. Σαμαράς;
Από την 6η Ιουλίου 2015 παραμένετε πιστοί στον πρωθυπουργό στη βάση του επιχειρήματος ότι δεν υπήρχε εναλλακτική στη συνθηκολόγηση με την τρόικα. Ας συμφωνήσουμε ότι σε αυτό διαφωνούμε. Τίθεται όμως το ερώτημα: Δεν καταλαβαίνετε ότι γιορτάζοντας την «έξοδο στις αγορές» υπογράφετε δήλωση μετανοίας για την κριτική στην έξοδο των κ. Σαμαρά – Στουρνάρα, ενώ, παράλληλα, παραδέχεστε ότι κάναμε λάθος το 2014 να θεωρούμε πως μέσα από το Μνημόνιο και τις ευκολίες πληρωμών που μας προσφέρει η τρόικα το χρέος μας δεν μπορεί ποτέ να γίνει διαχειρίσιμο;
Αν αναρωτιέστε γιατί το ΜέΡΑ25 κατεβαίνει στις εκλογές (εθνικές και ευρωπαϊκές), ο λόγος είναι απλός: Επειδή, ως ριζοσπάστες ευρωπαϊστές, δεν είμαστε διατεθειμένοι να παραβιάσουμε τις αρχές της αριθμητικής ώστε να δικαιολογήσουμε μια διαρκή συνθηκολόγηση με τη Χρεοδουλοπαροικία που ενισχύει καθημερινά την Ερημοποίηση της χώρας.
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March 10, 2019
Debate with Manfred Weber (EPP) and Christian Lindner (ALDE) on Anne Will’s ARD show – 10 MAR 2019
Here is a selection of what the press had to say about this debate:
Berliner Zeitung: https://www.berliner-zeitung.de/politik/rnd/-anne-will–zu-europa-beatrix-von-storch-haelt-emmanuel-macron-fuer-einen–loser–32199838
BILD: https://www.bild.de/politik/inland/politik-inland/anne-will-in-der-ard-afd-frau-beatrix-von-storch-beschimpft-macron-als-verlierer-60594026.bild.html
Elbe-Jeetzel-Zeitung: https://www.ejz.de/blick-in-die-welt/politik/das-establishment-in-deutschland-hat-macrons-ideen-von-europa-ldquoabgestochenrdquo_241_111679328-122-.html
FAZ: https://www.faz.net/aktuell/feuilleton/medien/tv-kritik-zu-anne-will-die-europawahl-und-praesident-macron-16082328.html?printPagedArticle=true#pageIndex_0
Focus: https://www.focus.de/politik/deutschland/bei-anne-will-als-es-um-eu-parlament-geht-argumentiert-sich-beatrix-von-storch-selbst-ins-abseits_id_10436219.html
Huffpost: https://www.huffingtonpost.de/entry/anne-will-varoufakis-entlarvt-mit-einer-einfachen-frage-die-ideenlose-debatte_de_5c8602c5e4b0d93616299711
Merkur: https://www.merkur.de/politik/anne-will-lindner-erntet-shitstorm-und-rechtfertigt-sich-in-ard-sendung-zr-11841663.html
NRZ: https://www.nrz.de/politik/anne-will-beatrix-von-storch-fordert-nach-brexit-dexit-lindner-und-varoufakis-zerlegen-sie-id216634089.html
NTV: https://www.n-tv.de/politik/Wie-europaeisch-wollen-wir-regiert-werden-article20898891.html
RTL: https://www.rtl.de/cms/beatrix-von-storch-giftet-bei-anne-will-macron-ist-ein-loser-4305832.html
Spiegel: http://www.spiegel.de/kultur/tv/anne-will-europa-talk-mit-yanis-varoufakis-christian-lindner-manfred-weber-a-1257162.html
Stern: https://www.stern.de/politik/deutschland/-anne-will—nur-beatrix-von-storch-haelt-macron-fuer-einen–loser–8615508.html
Tagesspiegel: https://www.tagesspiegel.de/gesellschaft/medien/tv-talk-anne-will-zur-europawahl-frau-von-storch-will-sowieso-lieber-den-dexit/24087140.html
T-Online: https://www.t-online.de/nachrichten/deutschland/gesellschaft/id_85384164/tv-kritik-anne-will-dann-ist-orban-nicht-mehr-zu-halten-.html
Web.de: https://web.de/magazine/politik/politische-talkshows/anne-europa-wahl-eu-nationalstaat-33602506
Der Westen: https://www.derwesten.de/panorama/anne-will-ard-christian-lindner-attackiert-beatrix-von-storch-id216634537.html
March 9, 2019
March 7, 2019
Two replies to Piketty’s critique of our New Deal for Europe
Our Green New Deal for Europe
(As proposed by DiEM25, the EUROPEAN SPRING and our earlier MODEST PROPOSAL)
The principle is simple: In the absence of reflation and reorientation towards sustainable growth by private enterprises that is due to self-fulfilling expectations of low aggregate demand, Europe needs a public investment-led drive toward ‘crowding-in’ idle savings and wealth. However, this must be done in a way that does not involve greater taxation of the exhausted working and middle classes or higher deficits of governments with little fiscal space. DiEM25 proposes, for this purpose, a investment-led recovery, or New Deal, program to the tune of 5% of European GDP annually to be financed via public bonds issued by Europe’s public investment banks (e.g. the new investment vehicle foreshadowed in countries like Britain, the European Investment Bank and the European Investment Fund in the European Union, etc.). To ensure that these bonds do not lose their value as their supply increases sharply, the central banks (in whose jurisdiction the investments will be made) announce their readiness to purchase them if their yields rise above a certain level. In summary, DiEM25 is proposing a re-calibrated real-green investment version of Quantitative Easing that utilises the central ban
Piketty’s critique: Democratising Europe by taxation or debt?
Thomas Piketty wrote in Social Europe on 11th February 2019: On December 10th 2018 we launched a Manifesto for the Democratisation of Europe, along with 120 European politicians and academics. Since it was launched, the manifesto has accrued over 110,000 signatures and it is still open for more. It includes a project for a treaty and a budget enabling the countries which so wish to set up a European Assembly and a genuine policy for fiscal, social and environmental justice in Europe—all available multilingually on the website.
In the Guardian, on December 13th, Yanis Varoufakis presented his ‘Green New Deal’ as an alternative to the manifesto, which he considers to be irrelevant. Concerned to ensure the quality of debate before the coming European elections, we set out some answers to his criticisms and clarify the differences between his plan and our proposals.
The Varoufakis plan builds on the European Investment Bank (EIB) which is responsible for issuing bonds to the value of €500 billion per annum, including these securities in the programme of purchase of securities by the European Central Bank (ECB). ‘They will sell like hot cakes,’ he says with the communicative enthusiasm which the former minister of finance in the Tsipras government in Greece is known to display for his own solutions.
What purpose would the funds thus raised serve—the ecological reconversion of the European economy, whence the slogan ‘New Green Deal? We have no intention to criticise this aim. The reconversion of our system of growth towards a sustainable economic regime is an absolute necessity today. It should be implemented at European level and indeed plays a central role in our own proposal.
What is the difference?
The main criticism by Varoufakis seems to be the following: why do you want to create yet more new taxes when one can create money? Our budget is indeed financed by taxation, whereas his plan is financed by public debt. In his proposals, private firms involved in the ecological transition borrow money from the ECB, after having been selected by the EIB. In fact, part of this arrangement already exists in the form of the Juncker plan. What Varoufakis adds is the purchase of securities by the ECB rather than by private investors.
In the first instance, our proposals are based on taxes because a major part of the expenditure which we propose is public expenditure: financing research in new technologies by universities and sharing the cost of migration among member countries are beyond the sphere of private firms. This is one of the fundamental differences between our proposals: we propose to give Europe the means to provide public goods to its citizens—including the campaign against global warming, but not uniquely.
Secondly, the new shared taxes we propose are aimed at reducing inequality within countries. There are rich Greeks who do not pay sufficient taxes and poor Germans who pay too much; our aim is to ensure greater participation by the richest, wherever they are, to the greater benefit of the poorer, whatever their country.
Varoufakis criticises us however for limiting transfers among countries associated with the new additional budget to 0.1 per cent of gross domestic product. We introduced this parameter to avoid the delusion of the ‘transfer union’ being once again aired as an excuse for doing nothing. If there is a consensus to increase the threshold to 0.5 per cent of GDP or more, and if Varoufakis knows a way of forcing the various countries to accept it, then we would be happy to support such a modification. But one can already achieve a lot by establishing more fiscal justice and reducing inequality within countries.
Technocracy to the aid of the climate?
Another major difference between our proposals is that we set ourselves the imperative of a legitimate, democratic framework. Not so with Varoufakis. By radically shifting the decision-making centre of European economic policy towards the central bankers of the ECB, Varoufakis does not seem to be as concerned as he previously was by the fact that high-ranking civil servants will take decisions behind closed doors which affect millions of European citizens. The Varoufakis plan hands the reins of European policy to an uncontrolled technocracy, as if he had not drawn all the consequences from the Greek crisis!
In contrast, our manifesto takes into consideration the lessons of the present day. It does not build on the hypothetical ecological awareness of central bankers. Our intention is to anchor the reorientation of European policies in a new, stable, institutional and democratic architecture; this will enable the intervention of actors who to date have been marginalised in arrangements not clearly defined, so as to change the balance of power at the centre of Europe.
The policies carried out at European level by ministers of finance lack legitimacy, among other things. To be legitimate, these European policies, which now intervene at the core of the social pacts of states, should be initiated and controlled by an assembly comprising European parliamentarians and, above all, nationally elected members, who, in the last resort, remain the guarantors of these pacts within our democracies.
To act as if everything could be settled by the issuance of a debt and to deem as negligible the question of fiscal justice and the democratic legitimacy of decisions concerning political economy, while restricting oneself to the eurozone, do not seem very convincing to us. That being said, we fully agree that our project would gain from being extended in many directions, in particular in matters of currency and debt.
The treaty we propose does indeed provide for the possibility of a sharing of debts above 60 per cent of GDP and would enable better democratic supervision of the ECB, thanks to the approval and examination of its senior staff by the European Assembly. But these parts of the treaty would gain from being aired and Varoufakis is right to stress the potential importance of the EIB and ECB in any credible strategy of ecological transition.
Financing the ecological transition
The Manifesto for the Democratisation of Europe enables states who so wish to sign a treaty creating a new European Assembly—20 per cent European elected members and 80 per cent nationally elected—which would raise new taxes such as on the profits of major firms or the wealth of the richest European citizens. This would ensure that those who have gained from the construction of Europe participate in the financing of European public goods, for example the ecological transition and the reception and integration of migrants. And provided that the states brought together represent at least 70 per cent of EU population, the European Assembly would take up the task to democratically control and direct the economic policies carried out by the ministers of finance of the states which made it up.
On these issues, it is very difficult to predict the transnational majorities which might emerge in the assembly. There is nothing for example to indicate whether the social fractions of the major European Christian-democrat parties would, or would not, side with left-wing parties to guarantee more social justice in our European societies—currently under threat everywhere from populist forces.
In conclusion, while they have the great merit of existing, the criticisms and proposals of Yanis Varoufakis do not seem to us to be in keeping with the issues at stake. Europe cannot ignore the questions of genuine democratic legitimacy and fiscal justice.
James Galbraith’s response: Financing the Green New Deal in Europe
James Galbraith replied to Piketty in Social Europe on 28th February 2019: Thomas Piketty and several colleagues have taken a shot at the European New Deal (END) of the Democracy in Europe Movement (DiEM25). Writing for DiEM25 last December, Yanis Varoufakis had noted how the taxes and spending Piketty advocates would now be implemented by each EU member individually with practically no Europe-wide component, a retreat from a previous agenda. So part of the difference between the two camps is over whether European green investment should be a continental project or merely each country doing what it chooses, more or less on its own.
But now Piketty calls attention to another big difference. The END of DiEM25 proposes to fund half a trillion euro of energy transformation and conservation with bonds—in other words, a policy of fiscal expansion backstopped by the European Central Bank. Piketty’s team proposes a series of tax measures, on corporate profits, a new progressive income-tax rate and an annual tax on wealth over one million euro—as well as a regressive carbon-emissions tax.
Overall, the Piketty proposal aims to redistribute 2 per cent of European gross domestic product (within countries, not between them) and to invest another 2 per cent in the Green New Deal, a number which comes to nearly €400 billion—close in principle to the DiEM25 proposal. In practice it would fall far short, since the taxes could not be imposed without national consent, and it would not only be tax havens such as Ireland and Luxembourg which would hold back. No conservative government in thrall to the wealthy would participate. Nor would any government that feared an insurrection such as that of the gilets jaunes.
The DiEM25 plan avoids this problem by promising to launch a green-investment programme without new taxes. But can one do this? Piketty and his colleagues say no. They want new taxes, ‘because a major part of the expenditure we propose is public expenditure’. They thus argue that one can’t have a Green New Deal without first putting up the taxes to ‘pay for it’.
Borrowing makes sense
But there is no requirement that any expenditure, whether public or private, be funded in advance by revenues. Expenditures in the nature of investments should, generally, not be funded in advance. If your house has a mortgage, you borrowed to pay for it. If you start a new business, you usually borrow the capital to get started. If a big corporation decides to build a new factory, it too borrows, from a bank or by issuing a bond. Borrowing makes sense when real resources are available and the benefits come over time. In making decisions to invest, governments have an extra advantage: they can write a cheque without having borrowed ‘in advance’. When the cheque is cashed, the recipient can (and often does) simply switch the proceeds for a bond; thus the ‘borrowing’ occurs after, not before, the project is launched.
Both sides agree that major investments are absolutely necessary to fight climate change and sustain high living standards. The question is: which approach would succeed? Piketty’s proposals would impose immediate hardship, through the carbon tax, in order to bring in funds in advance of the investments. By creating hardship, Piketty’s proposals would destroy the political basis for dealing with climate change at all—just as Emmanuel Macron’s diesel tax has already largely done in France. And, given non-compliance and tax evasion, it would probably fail to bring in the revenue anyway. To that extent, by placing taxes before spending, Piketty and his colleagues are promoting a fantasy.
For DiEM25, in contrast, progress would be evident at once and results would start coming in. The required resources would come by mobilising people who are currently unemployed (6.8 percent!) or underemployed (many more!) all across Europe. DiEM25’s proposal would reorganise existing economic activity, provide needed work and generate revenues over time to service the debts taken out at the beginning. Full employment, including a job guarantee, is integral to the European New Deal, both as economics and as the necessary politics of making it work.
A path charted
The DiEM25 proposal follows the path charted by the New Deal of Franklin Delano Roosevelt from 1933 to 1936. Using the technical expertise of the European Investment Bank, it would identify and plan out the large and small undertakings required to achieve the green-investment objectives. Using the credit of Europe, it would fund those projects for the long term at low interest rates. Using the power of the European Central Bank, it would ensure that the bonds were placed on favourable terms.
Stuart Holland’s response: Where the Piketty plan is mistaken
Stuart Holland replied to Piketty in Social Europe on 28th February 2019: In December Thomas Piketty and several others launched a Manifesto for the Democratisation of Europe, supported by 120 European politicians and academics, including proposals for a new European Union treaty, a new assembly and new European taxation. Since it was launched, the manifesto has gained over 110,000 signatures. In an article in the Guardian, Yanis Varoufakis countered this with the proposal from DiEM25, with which he is prominently associated, for a bond-funded Green New Deal. Piketty has responded in turn but both misunderstands and misrepresents the proposal.
A Green New Deal has been advanced not only by DiEM25 but also by the European Greens, which have made it the basis of their two last campaigns for the European Parliament. Its rationale is based on successive versions of A Modest Proposal for Resolving the Eurozone Crisis by Varoufakis and myself, in 2010, 2011 and 2012, and another with James Galbraith in 2013.
Piketty recognises that the Green New Deal proposition includes European Investment Bank (EIB) bonds, and that these could support ‘an ecological reconstruction of Europe’. But he claims that part of this is already in the Juncker plan for a European Fund for Strategic Investments, which is wrong.
The Juncker plan has entailed only €5 billion of EIB funds—rather than the €300 billion which Juncker made the first of ten commitments to the European Parliament, at the time of his adoption as commission president, or the €500 billion in the DiEM25 proposal, to which Varoufakis referred in the Guardian. It has also recently been strongly criticised by the EU Court of Auditors, for recycling existing funds rather than creating new resources.
While Piketty refers to EIB bonds in the DiEM25 New Deal proposal, he takes no account of the argument integral to it for bonds issued by the European Investment Fund (EIF). On my recommendation, the then commission president, Jacques Delors, embodied this in the commission White Paper on Growth, Competitiveness and Employment of December 1993 and persuaded the European Council to endorse it in 1994.
Eurobonds
The aim was to complement EIB micro-level project bonds with a macro-role for eurobonds to recycle surpluses in under-invested global pension and sovereign-wealth funds. Emmanuel Macron grasped this in 2014, as French economy minister, proposing to increase the subscribed capital of the EIF so that it could recycle a share of such surpluses to generate €200 billion or more of counterpart funds for EIB investments. At the time, he was opposed by the German finance minister, Wolfgang Schäuble, but Schäuble is no longer in office.
Piketty also neglects the fact that the Modest Proposal and its derivative case for a Green New Deal include more than funding environmental safeguards and green technology. Thanks to Antonio Guterres, when heading the government of Portugal, the Amsterdam Special Action Programme, endorsed by the European Council in 1997, persuaded the EIB to commit to this but also to fund investments in health, education, urban regeneration and venture capital for small and medium-sized firms to sustain innovative start-ups. These enabled it to quadruple its investment finance to more than double that of the World Bank in the following decade.
This fell to only some €60 billion after the 2008 financial crisis. Yet now, if quadrupled again—not least with EIF co-financing—it could reach some €240 billion, with investment multipliers of 2.5 to 3 double or more than fiscal multipliers, aided also by the EIF having become since 2000 part of the EIB Group.
Serviced by revenues
Unlike the Piketty proposals, none of this depends on a new treaty, a new assembly or new federal taxation—nor on national guarantees of eurobonds for a Green New Deal. For, although Piketty does not cite this, EIB bonds do not count on the national debt of EU member states any more than US Treasury bonds count on the debt of member states of the American union such as California or Delaware. Further, EIB Group bond finance does not depend on fiscal federalism, since it is serviced by revenues from the projects which it funds.
A real gain from EIB bond funding for public investment not counting on national debt is that this releases a major share of annual national taxation for current expenditures—such as raising minimum wages or increasing pensions, or both, without thereby increasing national debt or deficits. This has been integral to the successive versions of the Modest Proposal rationale for a European New Deal.
In claiming to highlight differences between his own proposals and those for a Green New Deal, Piketty claims that his are based on taxes because a major part of the public expenditure he proposes would finance research in new technologies by universities. This fails to appreciate that the key issue is not pure research but, as Mazzucato has evidenced, achieving synergies with entrepreneurship, which was already integral to the rationale for the EIF to issue venture capital.
Another difference claimed by Piketty between his proposals and those for a Green New Deal is ‘to provide public goods to citizens’. Yet, thanks to Guterres, since 1997 the EIB has been doing this in funding investment in health, education, urban regeneration and the environment, without this adding to national debt. Moreover, the Lisbon Agenda of 2000, also cited in the Modest Proposal, was concerned not only with public goods but also public rights, endorsing the principle of the right to a work-life balance which most EU member states thereafter adopted in national legislation—even if this would have been better as a European citizenship right, as originally proposed by Guterres to the European Council.
A further wrong claim by Piketty is that Varoufakis’aim is ‘radically shifting the decision-making centre of European economic policy towards the central bankers of the ECB’. This is a distortion of the point, referred to by Varoufakis in his Guardian article, and also in the Modest Proposal, that the European Central Bank could buy EIB bonds on the secondary market to support their credibility—but this is secondary to the main case we have made since 2010 for both EIB and EIF bonds (not the ECB) to fund a New Deal.
Real difference
While Piketty is concerned to highlight differences between his proposals and those for a Green New Deal, the real difference between them is that his—however well-intentioned—are a wish list for a new treaty, a new institution and taxation of wealth and income. A Green New Deal needs neither treaty revisions nor new institutions and would generate both income and direct and indirect taxation from a recovery of employment.
It is grounded in the precedent of the success of the bond-funded, Roosevelt New Deal which, from 1933 to 1941, reduced unemployment from over a fifth to less than a tenth, with an average annual fiscal deficit of only 3 per cent. Thereby, Americans recovered faith in their institutions, which—whether in the outcome of the ‘Brexit’ referendum in the UK or the gilets jaunes protests in France—is transparently not the case now in the EU.
Our Plan for a European Spring | DiEM25
Since then, anger has combined with hopelessness to create a vacuum, soon filled by the organised misanthropy of a Nationalist International triumphing across Europe, and making Donald Trump a very happy man. Against the background of an establishment that increasingly resembles the unhappy Weimar Republic, and of the recalcitrant racists produced by the crisis’s deflationary forces, the European Union is fragmenting. With Angela Merkel on the way out and Emmanuel Macron’s European agenda dead on arrival, the European election in May could prove the last chance progressives have to make a difference at a pan-European level.
Since it was created in 2016, DiEM25 (Democracy in Europe Movement 2025) has resolved to make the most of this opportunity. First we prepared our programme, the New Deal for Europe. Then we invited other movements and parties to help develop it and to create, together, our European Spring — the first transnational list pursuing a common policy agenda across Europe. Before discussing this project, the left must address two issues dividing and weakening progressives across Europe: borders and the EU.
Borders vs free movement
Something very odd has been happening in recent years: many on the left have come to view open borders as bad for the working class. Jean-Luc Mélenchon of La France Insoumise has said several times, ‘I’ve never been in favour of freedom of arrival.’ In a speech on posted workers at the European Parliament in July 2016, he said migrants were ‘taking the bread out of the mouths’ of French workers. He has since regretted this statement, though his views on the impact of migration on French wages have not changed.
This is not new. In 1907 Morris Hillquit, the founder of the Socialist Party of America, tabled a resolution to end ‘the wilful importation of cheap foreign labour’, arguing that migrants were a ‘pool of unconscious strike-breakers’. What is new is that much of the left seems to have forgotten Lenin’s fierce reaction in 1915 to Hillquit’s call for curbs on migration: ‘We think that one cannot be internationalist and be at the same time in favour of such restrictions … Such socialists are in reality jingoists.’
Lenin had provided the context in an article on 29 October 1913: ‘There can be no doubt that dire poverty alone compels people to abandon their native land, and that the capitalists exploit the immigrant workers in the most shameless manner. But only reactionaries can shut their eyes to the progressive significance of this modern migration of nations … capitalism is drawing the masses of the working people of the whole world … breaking down national barriers and prejudices, uniting workers from all countries.’
Only reactionaries can shut their eyes to the progressive significance of this modern migration of nationsLenin
DiEM25 adopts Lenin’s apt analysis: walls that curb the free movement of people and goods are a reactionary response to capitalism. The socialist response is to bring down the walls and allow capitalism to undermine itself, while we organise transnational resistance to capitalist exploitation everywhere. It is not migrants who steal the jobs of native workers but governmental austerity, which is part of the class war waged on behalf of the domestic bourgeoisie.
This is why we are adamant that xenophobia-lite must never be allowed to contaminate our agenda. As my friend Slavoj Žižek says, a leftist nationalism is a cruel and inane response to National Socialism. So DiEM25’s position on newcomers is that we refuse to differentiate between migrants and refugees. And we call upon Europe to #LetThemIn.
The left’s best strategy
Comrades from across Europe call us utopian and say the EU cannot be reformed. They may well be right. So for argument’s sake, let us agree that the EU is unreformable. Is progressives’ best response to adopt Lexit (the leftwing campaign for the controlled disintegration of the EU)? Some of my happiest memories are of addressing large audiences in Germany in 2015, soon after Syriza’s surrender to Angela Merkel and the troika (the International Monetary Fund, European Central Bank and European Commission). They were desperate to convey that what had been done to Greece had not been done in their name, the name of the German people. I remember how relieved they were on hearing the DiEM25 call to form one transnational movement, to unify, to fight together, to seize control of EU institutions — European Investment Bank (EIB), ECB etc — and re-deploy them in the interests of all Europeans.
I still feel the elation of our German comrades on hearing our idea to run Greek candidates in Germany and German candidates in Greece to signify that our movement is transnational, that it intends to take over the neoliberal order’s institutions everywhere and at once, not to wreck them but to make them work for the many, in Brussels, Berlin, Athens, Paris. Everywhere.
Compare this with how they would have felt had I told them that the EU was unreformable and must be disbanded; that Greeks must fall back to their nation state and try to build socialism there, while Germans did the same. Once we succeeded, our delegations could meet to discuss collaboration between our newly sovereign progressive states. Our German comrades would undoubtedly have felt deflated, and returned home depressed, thinking that they would have to face the German establishment as Germans, not as part of a transnational movement.
If I am right, it does not matter whether the EU is or isn’t reformable, but it does matter that we put forward concrete proposals on what we would do with EU institutions. Not utopian proposals but complete descriptions of what we would do this week, next month, in the next year, under the existing rules and with the existing instruments — how we would reassign the role of the awful European Stability Mechanism, reorient the ECB’s quantitative easing, and finance immediately, and without new taxes, a green transition and campaign against poverty.
Why such a detailed agenda? To show voters that there is an alternative, even within the rules designed by the establishment to further the interests of the top 1%. No one expects the EU institutions to adopt our proposals, least of all us. All we want is for voters to see what could be done, instead of what is being done, so that they can see through the establishment without turning to the xenophobic right. This is the only way the left can escape its confines and build abroad progressive coalition.
Towards a democratic constitution
DiEM25’s New Deal for Europe aims at this; it shows how the lives of the majority of people can be improved in the short run under existing rules and with the current institutions. And it maps out the transformation of these institutions while charting a constitutional assembly process that will, in the longer run, lead to a democratic European constitution to replace all existing treaties. And it demonstrates how the new mechanisms we will be introducing from Day 1 can help us pick up the pieces if, despite our best efforts, the EU disintegrates.
Everyone talks about the importance of the green transition. What they do not say is where the money will come from and who will plan it. Our answer is clear: Europe needs to invest €2 trillion between 2019 and 2023 in green technologies, energy etc. We propose that the EIB issues an additional volume of its bonds, €500bn annually for four years, and that the ECB announces that, if their value drops, it will purchase these on the secondary bond market. With that announcement, and the glut of savings around the world, the ECB will not have to spend a single euro, as the EIB bonds will sell out. A new European Green Transition Agency, modelled on the Marshall Plan’s Organisation for European Economic Cooperation (the OECD’s precursor), will channel those funds to green projects across the continent.
This proposal requires no new taxes, builds on an existing European bond and is fully legal under existing rules. The same applies to our other proposals, such as our Anti-Poverty Fund: we propose that the billions of profits of the European System of Central Banks (from assets purchased under the ECB’s quantitative easing or from the Target2 payment system) be used to provide every European under the poverty line with food, shelter and energy security.
Another example is our plan to restructure the eurozone’s public debt: the ECB mediates between states and money markets to reduce their total debt burden, but without printing money or making Germany pay for, or guarantee, the public debt of the more indebted countries.
As these demonstrate, our New Deal combines technically competent plans, implementable under the EU’s existing framework, with a radical departure from austerity and the troika’s bailout logic. And it goes further by tabling new institutions that prepare for a post-capitalist European future.
A plan for post-capitalism proposes to partly socialise capital and the returns from automation: big business corporations’ right to operate in the EU will be conditional on transferring a percentage of their shares to a new European Equity Fund. The dividends from these will then fund a Universal Basic Dividend (UBD) to be paid to each European citizen independently of other welfare payments or unemployment insurance.
Our proposals for reforming the euro are another radical change. Before getting bogged down in changing the charter of the ECB, we plan to create a public digital-payments platform in every eurozone country. Using their national tax office’s existing digital platform, taxpayers would have the opportunity to purchase digital tax credits, which they can use to pay one another or to pay future taxes at a substantial discount. These credits would be denominated in euros but transferable only between taxpayers within a single country, so would be impervious to sudden capital flight.
Governments would be able to create a limited number of these fiscal euros, to be given to citizens in need or used for the funding of public projects; fiscal euros would allow stressed governments to stimulate demand, lessen the tax burden, and ultimately reduce the crushing power of the ECB and costs of exiting the euro (or of the euro’s disintegration). In the long term, public digital-payment platforms would form a managed system of country-specific euros that work like an International Clearing Union, a modern version of John Maynard Keynes’s 1944 vision for the Bretton Woods system, which sadly failed to materialise.
Our New Deal for Europe is a comprehensive plan for smartly re-deploying existing institutions in the interests of the majority, planning for a radical, post-capitalist green future, and preparing to pick up the pieces if the EU collapses.
A European Spring is possible
The left’s great foes are disunity and incoherence. Unity is crucial, but it should not be pursued at the expense of coherence. Consider the state of the European Left party: how can it appeal to voters this May when it is represented in Greece by a party that, in government, implements the harshest austerity in the history of capitalism on behalf of the troika, while many of its leading lights in countries like France and Germany are eurosceptic?
Well-meaning leftwing friends ask, ‘Why doesn’t DiEM25 join up with Jean-Luc Mélenchon’s La France Insoumise or Sahra Wagenknecht and Oskar Lafontaine’s Aufstehen movement in Germany? How can the left make a difference if you fail to unite?’ The reason is simple: our duty is to create unity on a foundation of radical, rational and internationalist humanism. This means a common agenda for all Europeans and a radical policy of an Open Europe that recognises borders as scars on the planet and newcomers as welcome. Nothing less will do.
Our bid for unity was based on a simple idea: DiEM25 invited all progressives to participate in the joint authorship of our New Deal for Europe on the basis of radical, humanist Europeanism. Our call was answered. Génération-s (France), Razem (Poland), Alternativet (Denmark), DemA (Italy), MeRA25 (Greece), Demokratie in Europa (Germany), Der Wandel (Austria), Actua (Spain), Livre (Portugal) joined in. More movements are joining now. Together we have formed the European Spring coalition that will run in May in the European Parliament election to push for our project.
Our message to Europe’s authoritarian establishment: we will resist you through a radical programme that is technically more sophisticated than yours. Our message to the fascistic xenophobes: we will fight you everywhere. Our message to our comrades of the European left: you can expect unlimited solidarity from us, and one day our paths will converge in the service of a radical, transnational humanism.
Yanis Varoufakis
Yanis Varoufakis is an economist and former Greek finance minister (January-July 2015). He is the founder of the Democracy in Europe Movement 2025 (DiEM25).
Click here for the French version on the site of Le Monde Diplomatique. And here for their English site.
What’s wrong in Europe today and how to fix it tomorrow morning – Berlin speech
Demokratie in Europa is DiEM25’s new political party in Germany. Demokratie in Europa is running in the European Parliament election this coming May as part of our EUROPEAN SPRING that is campaigning across Europe on the basis of our transnational NEW DEAL FOR EUROPE. In this Berlin speech, and in my capacity as a candidate for MEP with Demokratie in Europa, I answer the question: “What is wrong with Europe today and what immediate steps we propose to fix it.”
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