Showing posts with label bullying. Show all posts
Showing posts with label bullying. Show all posts
Friday 5 March 2021
Monday 19 June 2017
Balance of power deters would-be whistleblowers from rocking the boat
Sean Ingle in The Guardian
A couple of days ago I asked a UK Sport insider why more athletes do not go public with their concerns. “Put yourself in their shoes,” came the reply. “One path is potentially well rewarded. And then there’s another that comes after speaking out. If you are a rational person, do you want to travel down the road of a Brian Cookson or a Jess Varnish? There is a massive disincentive to rock the boat.”
One can see their point. Cookson, having enjoyed a long career in sports administration, is now president of the UCI, earning £235,000 a year. Varnish, having spoken out about the problems in British Cycling – and having been largely vindicated – finds herself marginalised and ostracised. At 26 she also knows her career in elite sport is probably over. What would you do?
British Bobsleigh team told: keep quiet about bullying or miss Olympics
Of course not every complaint is serious or justified. And nor is elite sport a place to hold hands round the campfire and sing kumbaya. But in a week where fresh and disturbing allegations about bullying in British Bobsleigh and child abuse in British Canoeing were heard there is an urgent need to tilt the balance in favour of whistleblowers and honest brokers.
Indeed, lost amid the flurry of reports into British Cycling last Wednesday was the damning verdict from the financial accountants Moore Stephens on UK Sport’s whistleblower policy. In their view it was inadequate: it needed to be “more robust”, “encourage a culture of openness” and “provide statutory protection from unfair dismissal for making a protected disclosure”. The question is how.
The main problem is that a vast amount of power lies with UK Sport and the heads of each sport – and very little with the athletes, who are subject to an annual review whereby their lottery money can be cut or stopped completely.
“Player power” is often heard of in football but for those in Olympic sports the power dynamic favours coaches and administrators – which hardly encourages athletes to question them.
One coach recently told of an athlete who made some modest but justified criticisms of his sport. A few months later his lottery funding was trimmed. Perhaps it was coincidental but his fellow athletes took away a lesson: he rocked the boat and lost out. As the coach explained: “A lot of signals are sent to people to say don’t misbehave and I am troubled by that. No one is saying that bullying and other such behaviour is widespread but there is an environment that does not allow enough checks and balances.”
One can imagine how vulnerable this leaves the athletes. One false move and their livelihood is toast. It does not help that Olympic athletes do not really have a strong union. Nominally there is the British Athletes Commission, which represents 1,400 Olympians and Paralympians, but few believe it has enough resources or independence to be as effective as it needs to be.
There is another factor at play, too. Many athletes want to stay in sport, either as a coach or administrator, when they quit the field of play. For those who pick up a reputation as a troublemaker the stink is hard to shake. As the former British bobsleigher Henry Nwume, who spoke to the BBC last week about problems inside his sport, told me: “You have everything to lose by talking. Athletes know that they run the risk of being attacked, discredited and blackballed. And that continues even after they retire. They fear positions that might have been opened for them will be closed. And they will become persona non grata.”
Whistleblowers also know their accounts are likely to be belittled by athletes inside the system. This is not necessarily malicious. Coaches tend to treat potential medallists better: one I spoke to admitted he was seen as a “golden child” by his performance director and never received – or even saw – the abuse that many of his friends got. So when Sir Bradley Wiggins or Sir Chris Hoy is asked if there was anything wrong with British Cycling, perhaps one should not be shocked when they say no.
A couple of days ago I asked a UK Sport insider why more athletes do not go public with their concerns. “Put yourself in their shoes,” came the reply. “One path is potentially well rewarded. And then there’s another that comes after speaking out. If you are a rational person, do you want to travel down the road of a Brian Cookson or a Jess Varnish? There is a massive disincentive to rock the boat.”
One can see their point. Cookson, having enjoyed a long career in sports administration, is now president of the UCI, earning £235,000 a year. Varnish, having spoken out about the problems in British Cycling – and having been largely vindicated – finds herself marginalised and ostracised. At 26 she also knows her career in elite sport is probably over. What would you do?
British Bobsleigh team told: keep quiet about bullying or miss Olympics
Of course not every complaint is serious or justified. And nor is elite sport a place to hold hands round the campfire and sing kumbaya. But in a week where fresh and disturbing allegations about bullying in British Bobsleigh and child abuse in British Canoeing were heard there is an urgent need to tilt the balance in favour of whistleblowers and honest brokers.
Indeed, lost amid the flurry of reports into British Cycling last Wednesday was the damning verdict from the financial accountants Moore Stephens on UK Sport’s whistleblower policy. In their view it was inadequate: it needed to be “more robust”, “encourage a culture of openness” and “provide statutory protection from unfair dismissal for making a protected disclosure”. The question is how.
The main problem is that a vast amount of power lies with UK Sport and the heads of each sport – and very little with the athletes, who are subject to an annual review whereby their lottery money can be cut or stopped completely.
“Player power” is often heard of in football but for those in Olympic sports the power dynamic favours coaches and administrators – which hardly encourages athletes to question them.
One coach recently told of an athlete who made some modest but justified criticisms of his sport. A few months later his lottery funding was trimmed. Perhaps it was coincidental but his fellow athletes took away a lesson: he rocked the boat and lost out. As the coach explained: “A lot of signals are sent to people to say don’t misbehave and I am troubled by that. No one is saying that bullying and other such behaviour is widespread but there is an environment that does not allow enough checks and balances.”
One can imagine how vulnerable this leaves the athletes. One false move and their livelihood is toast. It does not help that Olympic athletes do not really have a strong union. Nominally there is the British Athletes Commission, which represents 1,400 Olympians and Paralympians, but few believe it has enough resources or independence to be as effective as it needs to be.
There is another factor at play, too. Many athletes want to stay in sport, either as a coach or administrator, when they quit the field of play. For those who pick up a reputation as a troublemaker the stink is hard to shake. As the former British bobsleigher Henry Nwume, who spoke to the BBC last week about problems inside his sport, told me: “You have everything to lose by talking. Athletes know that they run the risk of being attacked, discredited and blackballed. And that continues even after they retire. They fear positions that might have been opened for them will be closed. And they will become persona non grata.”
Whistleblowers also know their accounts are likely to be belittled by athletes inside the system. This is not necessarily malicious. Coaches tend to treat potential medallists better: one I spoke to admitted he was seen as a “golden child” by his performance director and never received – or even saw – the abuse that many of his friends got. So when Sir Bradley Wiggins or Sir Chris Hoy is asked if there was anything wrong with British Cycling, perhaps one should not be shocked when they say no.
One potential solution, put forward by Baroness Tanni-Grey Thompson’s duty of care review in April, is for an independent sports ombudsman – or duty of care quality commission – which is separate from UK Sport, to “maintain public confidence that sport is conducted ethically”. To me that makes sense. But change also has to come from within.
UK Sport deserves praise for lifting Britain from 36th in the medal table in 1996 to second in Rio last year. There are many smart people in the system, too. But it surely knows now that its tunnel‑vision focus on winning can breed the type of performance director or head coach who knows the main performance indicator is medals and so puts athlete welfare lower on the list of priorities. It does not help when UK Sport’s chief executive, Liz Nicholl, insists that “99% of this system is working really well” when increasingly the evidence suggests otherwise.
The best organisations do not just challenge themselves to be better. They allow themselves to be challenged in turn. In fact, they welcome it because they know being open and subject to rigorous examination helps them improve. Next month Katherine Grainger, a ferocious competitor with vast intellect, takes over as chair of UK Sport. How she responds to the mounting issues of athlete welfare, whilst keeping standards high, will surely define her tenure.
UK Sport deserves praise for lifting Britain from 36th in the medal table in 1996 to second in Rio last year. There are many smart people in the system, too. But it surely knows now that its tunnel‑vision focus on winning can breed the type of performance director or head coach who knows the main performance indicator is medals and so puts athlete welfare lower on the list of priorities. It does not help when UK Sport’s chief executive, Liz Nicholl, insists that “99% of this system is working really well” when increasingly the evidence suggests otherwise.
The best organisations do not just challenge themselves to be better. They allow themselves to be challenged in turn. In fact, they welcome it because they know being open and subject to rigorous examination helps them improve. Next month Katherine Grainger, a ferocious competitor with vast intellect, takes over as chair of UK Sport. How she responds to the mounting issues of athlete welfare, whilst keeping standards high, will surely define her tenure.
Monday 19 December 2016
Don’t complain about the strikers – they’re only doing what we all should in 2017
Paul Mason in The Guardian
We seem to love the working class as long as it is a) white and b) passive. The real working class is neither. It is multi-ethnic and, from Southern Rail to British Airways, it is set to strike.
Predictably, the Conservatives are calling for more legal restrictions on strike action. Theresa May accused strikers of “contempt for ordinary people”. And – as always – the neck veins of TV reporters are bulging as they express outrage on behalf of those affected.
Union leader says No 10 demonising working people in strikes row
Yet, try as they might, the politicians and journalists have failed to stir up mob hatred against the strikers, some of whom – such as the Southern Rail drivers and guards – have been taking industrial action for weeks. And the reasons for this are obvious: they are ordinary people.
While the miners and steelworkers of the 1980s worked in relatively insular steel and mining towns, everybody knows a BA cabin steward, a train guard, a baggage handler or a Post Office counter worker. What’s more, because so much of our work has become modular, low-paid and deskilled, many people know, or can guess, exactly what they are going through.
We have near full employment yet near wage stagnation. The strikes taking place over Christmas are happening among workers who have not seen a pay rise for years. BA’s onboard customer service managers, for example, have been stripped of their union negotiation rights and had their pay frozen for six years.
One of the most pitiful things about the political class, and the economists who whisper certainties in their ear, is their distance from the actual experience of work. As trade union rights have become eroded throughout the private sector, and large chunks of the public sector become privatised, a culture of coercion has taken root at work.
A commuter protests in support of Southern Rail staff. at Victoria Station in London. Photograph: Andy Rain/EPA
It does not have to be as bad as the leading fast-food cafe chain where a secret shopper deducts the bonus of an entire shift if one person does not smile. But it is pervasive.
Generally, you are supposed to smile, supposed to exhibit happiness for your seven quid an hour, obey orders without question, to hit meaningless targets or scam them on the instruction of your line manager – and, increasingly, you’re supposed to pretend you are self-employed.
You can spend entire days, if you think about it, being served only by people with no actual employment status: the Uber driver, the hairdresser, the physiotherapist. Even businesses where you’re paying a limited company through your credit card now routinely require their “associates” to be self-empolyed.
The result looks like a fake-tan version of Downtown Abbey with all the same levels of deference but zero paternal responsibility. And deep down, people who work for a living understand the modern “contract” between worker and employer is barely worth the paper it is written on.
That’s why workers with union rights and relative job security use the strike weapon. It’s never pleasant. But every cabin worker at BA and Virgin knows that, without the unions, they would see their pension rights stolen and their conditions eroded to the same levels enjoyed by their counterparts at the budget airlines.
And what’s driving the attacks is always the same familiar, financial pressure. Public services, once privatised, are forced to enter a race to the bottom in terms of pay, conditions and pensions for their workers. Once financial logic overtakes the logic of providing a service as efficiently as possible, you get the stupidities of Southern Rail, which cut its services to passengers in order to provide itself with an achievable target.
Jeremy Corbyn has been condemned for failing to condemn the strikes – and for attending a Christmas party with the Aslef union. If it were up to me, Corbyn would actually throw a Christmas party, not just for the Aslef strikers but for all the workers toiling on basic pay, fictitious contracts and unachievable targets over the festive period.
Those of us in unions – and there are still millions of us – know they make a massive and positive difference. Because workers on London Underground are unionised, there is a guard at my local tube station who refuses to wear any other name badge than one with “Lenin” on it.
No 10 accuses striking workers of 'contempt for ordinary people'
Although I do not recommend this level of resistance for everybody, it is a physical symbol of the fact that unionised workers are people you do not mess around with.
The Southern strikers, the BA crews and the Post Office workers are showing a different side of what it means to express your collective identity at work. So did the junior doctors, whose determined action got them a better deal than their leaders originally thought they could achieve.
Coming on top of the strikes by Deliveroo riders and a union-led court victory for Uber drivers, these are signs that even the heavily casualised workforce of the 21st century will not suffer indignity for ever.
In economics, it has become common to hear that one of the main failings of the current system is wage stagnation; even the Bank of England would like to see more inflation. So don’t complain about the posties, train drivers, cabin crews and baggage handlers – they’re only doing what we all should in 2017.
Ask for a pay rise, defend your pension rights, insist that work conditions are respectful and safe – and demand your employer negotiates with a real trade union and pays the rate for the job.
We seem to love the working class as long as it is a) white and b) passive. The real working class is neither. It is multi-ethnic and, from Southern Rail to British Airways, it is set to strike.
Predictably, the Conservatives are calling for more legal restrictions on strike action. Theresa May accused strikers of “contempt for ordinary people”. And – as always – the neck veins of TV reporters are bulging as they express outrage on behalf of those affected.
Union leader says No 10 demonising working people in strikes row
Yet, try as they might, the politicians and journalists have failed to stir up mob hatred against the strikers, some of whom – such as the Southern Rail drivers and guards – have been taking industrial action for weeks. And the reasons for this are obvious: they are ordinary people.
While the miners and steelworkers of the 1980s worked in relatively insular steel and mining towns, everybody knows a BA cabin steward, a train guard, a baggage handler or a Post Office counter worker. What’s more, because so much of our work has become modular, low-paid and deskilled, many people know, or can guess, exactly what they are going through.
We have near full employment yet near wage stagnation. The strikes taking place over Christmas are happening among workers who have not seen a pay rise for years. BA’s onboard customer service managers, for example, have been stripped of their union negotiation rights and had their pay frozen for six years.
One of the most pitiful things about the political class, and the economists who whisper certainties in their ear, is their distance from the actual experience of work. As trade union rights have become eroded throughout the private sector, and large chunks of the public sector become privatised, a culture of coercion has taken root at work.
A commuter protests in support of Southern Rail staff. at Victoria Station in London. Photograph: Andy Rain/EPA
It does not have to be as bad as the leading fast-food cafe chain where a secret shopper deducts the bonus of an entire shift if one person does not smile. But it is pervasive.
Generally, you are supposed to smile, supposed to exhibit happiness for your seven quid an hour, obey orders without question, to hit meaningless targets or scam them on the instruction of your line manager – and, increasingly, you’re supposed to pretend you are self-employed.
You can spend entire days, if you think about it, being served only by people with no actual employment status: the Uber driver, the hairdresser, the physiotherapist. Even businesses where you’re paying a limited company through your credit card now routinely require their “associates” to be self-empolyed.
The result looks like a fake-tan version of Downtown Abbey with all the same levels of deference but zero paternal responsibility. And deep down, people who work for a living understand the modern “contract” between worker and employer is barely worth the paper it is written on.
That’s why workers with union rights and relative job security use the strike weapon. It’s never pleasant. But every cabin worker at BA and Virgin knows that, without the unions, they would see their pension rights stolen and their conditions eroded to the same levels enjoyed by their counterparts at the budget airlines.
And what’s driving the attacks is always the same familiar, financial pressure. Public services, once privatised, are forced to enter a race to the bottom in terms of pay, conditions and pensions for their workers. Once financial logic overtakes the logic of providing a service as efficiently as possible, you get the stupidities of Southern Rail, which cut its services to passengers in order to provide itself with an achievable target.
Jeremy Corbyn has been condemned for failing to condemn the strikes – and for attending a Christmas party with the Aslef union. If it were up to me, Corbyn would actually throw a Christmas party, not just for the Aslef strikers but for all the workers toiling on basic pay, fictitious contracts and unachievable targets over the festive period.
Those of us in unions – and there are still millions of us – know they make a massive and positive difference. Because workers on London Underground are unionised, there is a guard at my local tube station who refuses to wear any other name badge than one with “Lenin” on it.
No 10 accuses striking workers of 'contempt for ordinary people'
Although I do not recommend this level of resistance for everybody, it is a physical symbol of the fact that unionised workers are people you do not mess around with.
The Southern strikers, the BA crews and the Post Office workers are showing a different side of what it means to express your collective identity at work. So did the junior doctors, whose determined action got them a better deal than their leaders originally thought they could achieve.
Coming on top of the strikes by Deliveroo riders and a union-led court victory for Uber drivers, these are signs that even the heavily casualised workforce of the 21st century will not suffer indignity for ever.
In economics, it has become common to hear that one of the main failings of the current system is wage stagnation; even the Bank of England would like to see more inflation. So don’t complain about the posties, train drivers, cabin crews and baggage handlers – they’re only doing what we all should in 2017.
Ask for a pay rise, defend your pension rights, insist that work conditions are respectful and safe – and demand your employer negotiates with a real trade union and pays the rate for the job.
Tuesday 23 August 2016
Follow the money: how left-behind cities can hold their corporate bullies to account
Paul Mason in The Guardian
If you walk along Britain’s poorest streets, the phrase “left behind” – in vogue again after many such places voted to leave the EU – takes on a complex meaning. It’s not just that they are lagging behind the richer, better-connected places. It can seem, as you survey the pound stores and shuttered pubs, that these towns have been discarded: left behind, as in “unwanted on the journey”. Wealth has flowed out of them to somewhere else.
The logical question should be: who did this? Sometimes it’s obvious: in Ebbw Vale, for example, the answer is the Anglo-Dutch steel company Corus, which closed the plant in 2002. In many places it’s not obvious. Jobs seep away; council services are privatised; bus timetables dwindle; the local school gets taken over by a “superhead” from somewhere else, outsourcing the dinner ladies on day one. You can get angry about it, but there is nobody specific to be angry at.
Faced with the same problem, union and community organisers in the US have, in the past 12 months, adopted a novel way of fighting back. Through a campaign group called Hedge Clippers, they have begun tracing the lineages of financial power behind the decisions that affect specific places, and targeting those financiers – pension funds – with a new kind of pressure.
Steve Lerner, one of the instigators of the 1980s Justice for Janitors campaign, which, for the first time, organised migrant cleaning workers in the US, explains how the tactic evolved. “We were organising janitors working for contract cleaning companies: but they’re just middlemen,” he said. “So we targeted the building owners. It turned out they, too, were dependent on banks and pension companies, so we got a trillion dollars worth of pension money to say it won’t invest unless there is decent pay. Then we asked ourselves: OK, what else do they own?”
It turns out, quite a lot. In Baltimore, the city’s privatised water industry hiked its bills. Then, when people started to fall behind in payments, the city agreed to bundle up their unpaid bills into a financial vehicle called a “tax lien” and sell it to investors. The investors can, after two years, evict people from their homes for non-payment.
When campaigners looked at who was buying up the debt, they included an anonymous company linked to one of the biggest hedge funds in America: Fortress Investments, with $23bn worth of assets invested in “the largest pension funds, university endowments and foundations”.
Since the 2008 crisis, with returns on government bonds negative, and stock market dividends depressed, pension funds have been pouring money into the hedge fund sector. “It’s a form of assisted suicide,” Lerner argues: “Workers are investing their pension money into firms whose mission is to destroy us.”
He set up Hedge Clippers, which aims to force pension funds to divest from companies whose investment strategies fuel the cycle of impoverishment.
If you apply the same approach to Britain, you’re dealing with a different ecosystem. No city has yet securitised the unpaid debts of the poor, as Baltimore did. While there is no shortage of predatory lenders to the poor, there are – after a campaign led by Labour MP Stella Creasy – at least elementary controls on them.
However, pension funds are now the biggest source of money for UK hedge funds, according to a Financial Conduct Authority survey last year, with 43% of their money coming from institutional investors. The most obvious act of financial predation is the private finance initiative (PFI), where schools and hospitals were built with vastly lucrative private loans. As a result, the taxpayer is committed to paying back £232bn on assets worth £57bn.
Many pension funds, either directly or indirectly, are investing in the so-called “infrastructure funds” who buy up PFI debt. The investment analyst Preqin found 588 institutional investors worldwide with “a preference for funds targeting PFI”, 40% of which were based in Europe.
Tracing the more complex ways institutional finance is funding the cycle of impoverishment is not easy. What you would want to know, in places such as Stoke-on-Trent or Newport, is not just who took the decisions to close high-value workplaces but, more importantly, who makes the decisions that lead to chronic under-investment now. Governments, including the devolved ones of the UK, spend a lot of time and money effectively bribing global companies to create jobs and keep them in Britain’s depressed areas. Communities themselves have little or no input into the process, which is in any case all carrot and no stick.
Lerner’s initiative in the US grew out of trade union activism, because the unions there learned to follow the money instead of wasting time trying to negotiate with the powerless underlings of global finance. They worked out that, in an age where the workplace and the community can seem like two different spheres of activism, it is the finance system that links the two.
Older ‘left-behind’ voters turned against a political class with values opposed to theirs
Union organising of the unorganised, and community activism in Britain have both traditionally been weak because top-down Labourism has been strong. Faced with PFI, predatory loans, rip-off landlords and privatisation, the British way is to demand legislation, not chain yourself to the door of a Mayfair hedge fund.
With or without Jeremy Corbyn, the near-impossibility of Labour gaining a Commons majority in 2020 – whether because of Scotland, boundary changes, a hostile media or self-destruction – has to refocus the left on to what is possible to achieve from below. We have to start, as the Americans did, by mapping the invisible forces that strip jobs, value and hope out of communities; make them visible; trace their dependencies and then use direct action to kick them in the corporate goolies until they desist.
If you walk along Britain’s poorest streets, the phrase “left behind” – in vogue again after many such places voted to leave the EU – takes on a complex meaning. It’s not just that they are lagging behind the richer, better-connected places. It can seem, as you survey the pound stores and shuttered pubs, that these towns have been discarded: left behind, as in “unwanted on the journey”. Wealth has flowed out of them to somewhere else.
The logical question should be: who did this? Sometimes it’s obvious: in Ebbw Vale, for example, the answer is the Anglo-Dutch steel company Corus, which closed the plant in 2002. In many places it’s not obvious. Jobs seep away; council services are privatised; bus timetables dwindle; the local school gets taken over by a “superhead” from somewhere else, outsourcing the dinner ladies on day one. You can get angry about it, but there is nobody specific to be angry at.
Faced with the same problem, union and community organisers in the US have, in the past 12 months, adopted a novel way of fighting back. Through a campaign group called Hedge Clippers, they have begun tracing the lineages of financial power behind the decisions that affect specific places, and targeting those financiers – pension funds – with a new kind of pressure.
Steve Lerner, one of the instigators of the 1980s Justice for Janitors campaign, which, for the first time, organised migrant cleaning workers in the US, explains how the tactic evolved. “We were organising janitors working for contract cleaning companies: but they’re just middlemen,” he said. “So we targeted the building owners. It turned out they, too, were dependent on banks and pension companies, so we got a trillion dollars worth of pension money to say it won’t invest unless there is decent pay. Then we asked ourselves: OK, what else do they own?”
It turns out, quite a lot. In Baltimore, the city’s privatised water industry hiked its bills. Then, when people started to fall behind in payments, the city agreed to bundle up their unpaid bills into a financial vehicle called a “tax lien” and sell it to investors. The investors can, after two years, evict people from their homes for non-payment.
When campaigners looked at who was buying up the debt, they included an anonymous company linked to one of the biggest hedge funds in America: Fortress Investments, with $23bn worth of assets invested in “the largest pension funds, university endowments and foundations”.
Since the 2008 crisis, with returns on government bonds negative, and stock market dividends depressed, pension funds have been pouring money into the hedge fund sector. “It’s a form of assisted suicide,” Lerner argues: “Workers are investing their pension money into firms whose mission is to destroy us.”
He set up Hedge Clippers, which aims to force pension funds to divest from companies whose investment strategies fuel the cycle of impoverishment.
If you apply the same approach to Britain, you’re dealing with a different ecosystem. No city has yet securitised the unpaid debts of the poor, as Baltimore did. While there is no shortage of predatory lenders to the poor, there are – after a campaign led by Labour MP Stella Creasy – at least elementary controls on them.
However, pension funds are now the biggest source of money for UK hedge funds, according to a Financial Conduct Authority survey last year, with 43% of their money coming from institutional investors. The most obvious act of financial predation is the private finance initiative (PFI), where schools and hospitals were built with vastly lucrative private loans. As a result, the taxpayer is committed to paying back £232bn on assets worth £57bn.
Many pension funds, either directly or indirectly, are investing in the so-called “infrastructure funds” who buy up PFI debt. The investment analyst Preqin found 588 institutional investors worldwide with “a preference for funds targeting PFI”, 40% of which were based in Europe.
Tracing the more complex ways institutional finance is funding the cycle of impoverishment is not easy. What you would want to know, in places such as Stoke-on-Trent or Newport, is not just who took the decisions to close high-value workplaces but, more importantly, who makes the decisions that lead to chronic under-investment now. Governments, including the devolved ones of the UK, spend a lot of time and money effectively bribing global companies to create jobs and keep them in Britain’s depressed areas. Communities themselves have little or no input into the process, which is in any case all carrot and no stick.
Lerner’s initiative in the US grew out of trade union activism, because the unions there learned to follow the money instead of wasting time trying to negotiate with the powerless underlings of global finance. They worked out that, in an age where the workplace and the community can seem like two different spheres of activism, it is the finance system that links the two.
Older ‘left-behind’ voters turned against a political class with values opposed to theirs
Union organising of the unorganised, and community activism in Britain have both traditionally been weak because top-down Labourism has been strong. Faced with PFI, predatory loans, rip-off landlords and privatisation, the British way is to demand legislation, not chain yourself to the door of a Mayfair hedge fund.
With or without Jeremy Corbyn, the near-impossibility of Labour gaining a Commons majority in 2020 – whether because of Scotland, boundary changes, a hostile media or self-destruction – has to refocus the left on to what is possible to achieve from below. We have to start, as the Americans did, by mapping the invisible forces that strip jobs, value and hope out of communities; make them visible; trace their dependencies and then use direct action to kick them in the corporate goolies until they desist.
Tuesday 21 June 2016
Why boarding schools produce bad leaders
Nick Duffell in The Guardian
In Britain, the link between private boarding education and leadership is gold-plated. If their parents can afford it, children are sent away from home to walk a well-trodden path that leads straight from boarding school through Oxbridge to high office in institutions such as the judiciary, the army, the City and, especially, government. Our prime minister was only seven when he was sent away to board at Heatherdown preparatory school in Berkshire. Like so many of the men who hold leadership roles in Britain, he learned to adapt his young character to survive both the loss of his family and the demands of boarding school culture. The psychological impact of these formative experiences on Cameron and other boys who grow up to occupy positions of great power and responsibility cannot be overstated. It leaves them ill-prepared for relationships in the adult world and the nation with a cadre of leaders who perpetuate a culture of elitism, bullying and misogyny affecting the whole of society.
In Britain, the link between private boarding education and leadership is gold-plated. If their parents can afford it, children are sent away from home to walk a well-trodden path that leads straight from boarding school through Oxbridge to high office in institutions such as the judiciary, the army, the City and, especially, government. Our prime minister was only seven when he was sent away to board at Heatherdown preparatory school in Berkshire. Like so many of the men who hold leadership roles in Britain, he learned to adapt his young character to survive both the loss of his family and the demands of boarding school culture. The psychological impact of these formative experiences on Cameron and other boys who grow up to occupy positions of great power and responsibility cannot be overstated. It leaves them ill-prepared for relationships in the adult world and the nation with a cadre of leaders who perpetuate a culture of elitism, bullying and misogyny affecting the whole of society.
Nevertheless, this golden path is as sure today as it was 100 years ago, when men from such backgrounds led us into a disastrous war; it is familiar, sometimes mocked, but taken for granted. But it is less well known that costly, elite boarding consistently turns out people who appear much more competent than they actually are. They are particularly deficient in non-rational skills, such as those needed to sustain relationships, and are not, in fact, well-equipped to be leaders in today's world.
I have been doing psychotherapy with ex-boarders for 25 years and I am a former boarding-school teacher and boarder. My pioneering study of privileged abandonment always sparks controversy: so embedded in British life is boarding that many struggle to see beyond the elitism and understand its impact. The prevalence of institutionalised abuse is finally emerging to public scrutiny, but the effects of normalised parental neglect are more widespread and much less obvious. Am I saying, then, that David Cameron, and the majority of our ruling elite, were damaged by boarding?
It's complex. My studies show that children survive boarding by cutting off their feelings and constructing a defensively organised self that severely limits their later lives. Cameron, Boris Johnson, Jeremy Hunt, Andrew Mitchell, Oliver Letwin et al tick all the boxes for being boarding-school survivors. For socially privileged children are forced into a deal not of their choosing, where a normal family-based childhood is traded for the hothousing of entitlement. Prematurely separated from home and family, from love and touch, they must speedily reinvent themselves as self-reliant pseudo-adults.
Paradoxically, they then struggle to properly mature, since the child who was not allowed to grow up organically gets stranded, as it were, inside them. In consequence, an abandoned child complex within such adults ends up running the show. This is why many British politicians appear so boyish. They are also reluctant to open their ranks to women, who are strangers to them and unconsciously held responsible for their abandonment by their mothers. With about two-thirds of the current cabinet from such a background, the political implications of this syndrome are huge – because it's the children inside the men running the country who are effectively in charge.
Boarding children invariably construct a survival personality that endures long after school and operates strategically. On rigid timetables, in rule-bound institutions, they must be ever alert to staying out of trouble. Crucially, they must not look unhappy, childish or foolish – in any way vulnerable – or they will be bullied by their peers. So they dissociate from all these qualities, project them out on to others, and develop duplicitous personalities that are on the run, which is why ex-boarders make the best spies.
Now attached to this internal structure instead of a parent, the boarding child survives, but takes into adulthood a permanent unconscious anxiety and will rarely develop what Daniel Goleman calls emotional intelligence. In adulthood he sticks to the same tactics: whenever he senses a threat of being made to look foolish, he will strike. We see this in Cameron's over-reaction to Angela Eagle MP, less than a year into his new job. "Calm down, dear!" the PM patronisingly insisted, as if she were the one upset and not he. The opposite benches loved it, of course, howling "Flashman!" (the public school bully from Tom Brown's Schooldays), but they never take on the cause of these leadership defects.
Bullying is inevitable and endemic in 24/7 institutions full of abandoned and frightened kids. Ex-boarders' partners often report that it ends up ruining home life, many years later. Bullying pervades British society, especially in politics and the media, but, like boarding, we normalise it. When, in 2011, Jeremy Clarkson ranted that he would have striking public-sector workers shot, he was even defended by Cameron – it was apparently a bit of fun. No prizes for guessing where both men learned their styles. And no wonder that the House of Commons, with its adversarial architecture of Victorian Gothic – just like a public school chapel – runs on polarised debate and bullying.
Strategic survival has many styles: bullying is one; others include keeping your head down, becoming a charming bumbler, or keeping an incongruently unruffled smile in place, like health secretary Jeremy Hunt, former head boy at Charterhouse. In a remarkable 1994 BBC documentary called The Making of Them, whose title I borrowed for my first book, young boarders were discreetly filmed over their first few weeks at prep school. Viewers can witness the "strategic survival personality" in the process of being built. "Boarding school," says nine-year-old Freddy, puffing himself up, putting on his Very Serious Face and staring at the camera, "has changed me, and the one thing I can do now is get used [to it]". This false independence, this display of pseudo-adult seriousness is as evident in the theatrical concern of Cameron as it was in Tony Blair. It displays the strategic duplicity learned in childhood; it is hard to get rid of, and, disastrously, deceives even its creator.
The social privilege of boarding is psychologically double-edged: it both creates shame that prevents sufferers from acknowledging their problems, as well as unconscious entitlement that explains why ex-boarder leaders are brittle and defensive while still projecting confidence. Boris is so supremely confident that he needs neither surname nor adult haircut; he trusts his buffoonery to distract the public from what Conrad Black called "a sly fox disguised as a teddy bear". On the steps of St Paul's, Boris commanded the Occupy movement: "In the name of God and Mammon, go!" Was it a lark – Boris doing Monty Python? Or a coded message, announcing someone who, for 10 years, heard the King James Bible read in chapel at Eton? Those who don't recognise this language, it suggests, have no right to be here, so they should just clear off.
This anachronistic entitlement cannot easily be renounced: it compensates for years without love, touch or family, for a personality under stress, for the lack of emotional, relational and sexual maturation. In my new book, Wounded Leaders, I trace the history of British elitism and the negative attitude towards children to colonial times and what I call the "rational man project", whose Victorian boarding schools were industrial power stations churning out stoic, superior leaders for the empire.
Recent evidence from neuroscience experts shows what a poor training for leaderships this actually is. In short, you cannot make good decisions without emotional information (Professor Antonio Damasio); nor grow a flexible brain without good attachments (Dr Sue Gerhardt); nor interpret facial signals if your heart has had to close down (Professor Stephen Porges); nor see the big picture if your brain has been fed on a strict diet of rationality (Dr Iain McGilchrist). These factors underpin Will Hutton's view that "the political judgments of the Tory party have, over the centuries, been almost continuously wrong".
With survival but not empathy on his school curriculum from age seven, Cameron is unlikely to make good decisions based on making relationships in Europe, as John Major could. He can talk of leading Europe, but not of belonging to it. Ex-boarder leaders cannot conceive of communal solutions, because they haven't had enough belonging at home to understand what it means. Instead, they are limited to esprit de corps with their own kind. In order to boost his standing with the rightwingers in his party, Cameron still thinks he can bully for concessions, make more supposedly "robust" vetos.
His European counterparts don't operate like this. Angela Merkel has held multiple fragile coalitions together through difficult times by means of her skill in relationships and collaboration. Though deadlocked at home, Barack Obama impressed both sides of British politics and in 2009 entered the hostile atmosphere of the Kremlin to befriend the then-president Dmitry Medvedev and make headway on a difficult disarmament treaty. In a subsequent meeting with the real power behind the throne, Obama invited Vladimir Putin to expound for an hour on what hadn't worked in recent Russian-American relationships, before responding. Despite their elitist education, and because of it, our own "wounded leaders" can't manage such statesmanship.
To change our politics, we'll have to change our education system. Today, most senior clinicians recognise boarding syndrome, several of whom recently signed a letter to the Observer calling for the end of early boarding. Its elitism ought to motivate the left. The Attlee government intended to disband the public schools, but not even Wilson's dared to. There's a cash problem: boarding is worth billions and has a massive lobby. Unlike most other European countries, our state does not contribute a per capita sum towards private education, so dismantling these schools, which still enjoy charitable status, would be costly. But can we really afford to sacrifice any more children for the sake of second-rate leadership?
I have been doing psychotherapy with ex-boarders for 25 years and I am a former boarding-school teacher and boarder. My pioneering study of privileged abandonment always sparks controversy: so embedded in British life is boarding that many struggle to see beyond the elitism and understand its impact. The prevalence of institutionalised abuse is finally emerging to public scrutiny, but the effects of normalised parental neglect are more widespread and much less obvious. Am I saying, then, that David Cameron, and the majority of our ruling elite, were damaged by boarding?
It's complex. My studies show that children survive boarding by cutting off their feelings and constructing a defensively organised self that severely limits their later lives. Cameron, Boris Johnson, Jeremy Hunt, Andrew Mitchell, Oliver Letwin et al tick all the boxes for being boarding-school survivors. For socially privileged children are forced into a deal not of their choosing, where a normal family-based childhood is traded for the hothousing of entitlement. Prematurely separated from home and family, from love and touch, they must speedily reinvent themselves as self-reliant pseudo-adults.
Paradoxically, they then struggle to properly mature, since the child who was not allowed to grow up organically gets stranded, as it were, inside them. In consequence, an abandoned child complex within such adults ends up running the show. This is why many British politicians appear so boyish. They are also reluctant to open their ranks to women, who are strangers to them and unconsciously held responsible for their abandonment by their mothers. With about two-thirds of the current cabinet from such a background, the political implications of this syndrome are huge – because it's the children inside the men running the country who are effectively in charge.
Boarding children invariably construct a survival personality that endures long after school and operates strategically. On rigid timetables, in rule-bound institutions, they must be ever alert to staying out of trouble. Crucially, they must not look unhappy, childish or foolish – in any way vulnerable – or they will be bullied by their peers. So they dissociate from all these qualities, project them out on to others, and develop duplicitous personalities that are on the run, which is why ex-boarders make the best spies.
Now attached to this internal structure instead of a parent, the boarding child survives, but takes into adulthood a permanent unconscious anxiety and will rarely develop what Daniel Goleman calls emotional intelligence. In adulthood he sticks to the same tactics: whenever he senses a threat of being made to look foolish, he will strike. We see this in Cameron's over-reaction to Angela Eagle MP, less than a year into his new job. "Calm down, dear!" the PM patronisingly insisted, as if she were the one upset and not he. The opposite benches loved it, of course, howling "Flashman!" (the public school bully from Tom Brown's Schooldays), but they never take on the cause of these leadership defects.
Bullying is inevitable and endemic in 24/7 institutions full of abandoned and frightened kids. Ex-boarders' partners often report that it ends up ruining home life, many years later. Bullying pervades British society, especially in politics and the media, but, like boarding, we normalise it. When, in 2011, Jeremy Clarkson ranted that he would have striking public-sector workers shot, he was even defended by Cameron – it was apparently a bit of fun. No prizes for guessing where both men learned their styles. And no wonder that the House of Commons, with its adversarial architecture of Victorian Gothic – just like a public school chapel – runs on polarised debate and bullying.
Strategic survival has many styles: bullying is one; others include keeping your head down, becoming a charming bumbler, or keeping an incongruently unruffled smile in place, like health secretary Jeremy Hunt, former head boy at Charterhouse. In a remarkable 1994 BBC documentary called The Making of Them, whose title I borrowed for my first book, young boarders were discreetly filmed over their first few weeks at prep school. Viewers can witness the "strategic survival personality" in the process of being built. "Boarding school," says nine-year-old Freddy, puffing himself up, putting on his Very Serious Face and staring at the camera, "has changed me, and the one thing I can do now is get used [to it]". This false independence, this display of pseudo-adult seriousness is as evident in the theatrical concern of Cameron as it was in Tony Blair. It displays the strategic duplicity learned in childhood; it is hard to get rid of, and, disastrously, deceives even its creator.
The social privilege of boarding is psychologically double-edged: it both creates shame that prevents sufferers from acknowledging their problems, as well as unconscious entitlement that explains why ex-boarder leaders are brittle and defensive while still projecting confidence. Boris is so supremely confident that he needs neither surname nor adult haircut; he trusts his buffoonery to distract the public from what Conrad Black called "a sly fox disguised as a teddy bear". On the steps of St Paul's, Boris commanded the Occupy movement: "In the name of God and Mammon, go!" Was it a lark – Boris doing Monty Python? Or a coded message, announcing someone who, for 10 years, heard the King James Bible read in chapel at Eton? Those who don't recognise this language, it suggests, have no right to be here, so they should just clear off.
This anachronistic entitlement cannot easily be renounced: it compensates for years without love, touch or family, for a personality under stress, for the lack of emotional, relational and sexual maturation. In my new book, Wounded Leaders, I trace the history of British elitism and the negative attitude towards children to colonial times and what I call the "rational man project", whose Victorian boarding schools were industrial power stations churning out stoic, superior leaders for the empire.
Recent evidence from neuroscience experts shows what a poor training for leaderships this actually is. In short, you cannot make good decisions without emotional information (Professor Antonio Damasio); nor grow a flexible brain without good attachments (Dr Sue Gerhardt); nor interpret facial signals if your heart has had to close down (Professor Stephen Porges); nor see the big picture if your brain has been fed on a strict diet of rationality (Dr Iain McGilchrist). These factors underpin Will Hutton's view that "the political judgments of the Tory party have, over the centuries, been almost continuously wrong".
With survival but not empathy on his school curriculum from age seven, Cameron is unlikely to make good decisions based on making relationships in Europe, as John Major could. He can talk of leading Europe, but not of belonging to it. Ex-boarder leaders cannot conceive of communal solutions, because they haven't had enough belonging at home to understand what it means. Instead, they are limited to esprit de corps with their own kind. In order to boost his standing with the rightwingers in his party, Cameron still thinks he can bully for concessions, make more supposedly "robust" vetos.
His European counterparts don't operate like this. Angela Merkel has held multiple fragile coalitions together through difficult times by means of her skill in relationships and collaboration. Though deadlocked at home, Barack Obama impressed both sides of British politics and in 2009 entered the hostile atmosphere of the Kremlin to befriend the then-president Dmitry Medvedev and make headway on a difficult disarmament treaty. In a subsequent meeting with the real power behind the throne, Obama invited Vladimir Putin to expound for an hour on what hadn't worked in recent Russian-American relationships, before responding. Despite their elitist education, and because of it, our own "wounded leaders" can't manage such statesmanship.
To change our politics, we'll have to change our education system. Today, most senior clinicians recognise boarding syndrome, several of whom recently signed a letter to the Observer calling for the end of early boarding. Its elitism ought to motivate the left. The Attlee government intended to disband the public schools, but not even Wilson's dared to. There's a cash problem: boarding is worth billions and has a massive lobby. Unlike most other European countries, our state does not contribute a per capita sum towards private education, so dismantling these schools, which still enjoy charitable status, would be costly. But can we really afford to sacrifice any more children for the sake of second-rate leadership?
Tuesday 5 April 2016
Why we must save the EU
Yannis Varoufakis in The Guardian
The first German word I ever learned was Siemens. It was emblazoned on our sturdy 1950s fridge, our washing machine, the vacuum cleaner – on almost every appliance in my family’s home in Athens. The reason for my parents’ peculiar loyalty to the German brand was my uncle Panayiotis, who was Siemens’ general manager in Greece from the mid-1950s to the late 1970s.
A Germanophile electrical engineer and a fluent speaker of Goethe’s language, Panayiotis had convinced his younger sister – my mother – to take up the study of German; she even planned to spend a year in Hamburg to take up a Goethe Institute scholarship in the summer of 1967.
Alas, on 21 April 1967, my mother’s plans were laid in ruins, along with our imperfect Greek democracy. For in the early hours of that morning, at the command of four army colonels, tanks rolled on to the streets of Athens and other major cities, and our country was soon enveloped in a thick cloud of neo-fascist gloom. It was also the day when Uncle Panayiotis’s world fell apart.
Unlike my dad, who in the late 1940s had paid for his leftist politics with several years in concentration camps, Panayiotis was what today would be referred to as a neoliberal. Fiercely anti-communist, and suspicious of social democracy, he supported the American intervention in the Greek civil war in 1946 (on the side of my father’s jailers). He backed the German Free Democratic party and the Greek Progressive party, which purveyed a blend of free-market economics with unconditional support for Greece’s oppressive US-led state security machine.
His political views, and his position as the head of Siemens’ operations in Greece, made Panayiotis a typical member of Greece’s postwar ruling class. When state security forces or their stooges roughed up leftwing protesters, or even killed a brilliant member of parliament, Grigoris Lambrakis, in 1963, Panayiotis would grudgingly approve, convinced that these were unpleasant but necessary actions. My ears are still ringing with the rowdy exchanges he often had with Dad, over what he considered “reasonable measures to defend democracy from its sworn enemies” – reasonable measures that my father had experienced first-hand, and from which he would never fully recover.
The heavy footprint of US agencies in Greek politics, even going so far as to engineer the dismissal of a popular centrist prime minister, Georgios Papandreou, in 1965, seemed to Panayiotis an acceptable trade-off: Greece had given up some sovereignty to western powers in exchange for freedom from a menacing eastern bloc lurking a short driving distance north of Athens. However, on that bleak April day in 1967, Panayiotis’s life was turned upside down.
He simply could not tolerate that “his” people (as he referred to the rightist army officers who had staged the coup and, more importantly, their American handlers) should dissolve parliament, suspend the constitution, and intern potential dissidents (including rightwing democrats) in football stadia, police stations and concentration camps. He had no great sympathy with the deposed centrist prime minister that the putschists and their US puppeteers were trying to keep out of government – but his worldview was torn asunder, leading him to a sudden spurt of almost comical radicalisation.
A few months after the military regime took power, Panayiotis joined an underground group called Democratic Defence, which consisted largely of other establishment liberals like himself – university professors, lawyers, and even a future prime minister. They planted a series of bombs around Athens, taking care to ensure there were no injuries, in order to demonstrate that the military regime was not in full control, despite its clampdown.
For a few years after the coup, Panayiotis appeared – even to his own mother – as yet another professional keeping his head down, minding his own business. No one had an inkling of his double life: corporate man during the day, subversive bomber by night. We were mostly relieved, meanwhile, that Dad had not disappeared again into some concentration camp.
My enduring memory of those years, in fact, is the crackling sound of a radio hidden under a red blanket in the middle of the living room in our Athens home. Every night at around nine, mum and dad would huddle together under the blanket – and upon hearing the muffled jingle announcing the beginning of the programme, followed by the voice of a German announcer, my own six-year-old imagination would travel from Athens to central Europe, a mythical place I had not visited yet except for the tantalising glimpses offered by an illustrated Brothers Grimm book I had in my bedroom.
Deutsche Welle, the German international radio station that my parents were listening to, became their most precious ally against the crushing power of state propaganda at home: a window looking out to faraway democratic Europe. At the end of each of its hour-long special broadcasts on Greece, my parents and I would sit around the dining table while they mulled over the latest news.
I didn’t fully understand what they were discussing, but this neither bored nor upset me. For I was gripped by a sense of excitement at the strangeness of our predicament: that, to find out what was happening in our very own Athens, we had to travel, through the airwaves, and veiled by a red blanket, to a place called Germany.
The reason for the red blanket was a grumpy old neighbour called Gregoris. Gregoris was known for his connections with the secret police and his penchant for spying on my parents; in particular my Dad, whose leftwing past made him an excellent target for an ambitious snitch. Strange as it may sound today, tuning in to Deutsche Welle broadcasts became one of a long list of activities punishable by anything from harassment to torture. So, having noticed Gregoris snooping around inside our backyard, my parents took no risks. Thus the red blanket became our defence from Gregoris’s prying ears.
A few years later, it was from Deutsche Welle that we learned what Panayiotis and his colleagues had been up to – when the radio announced that they had all been arrested. Dad would joke for years to come about the pathetic inability of these bourgeois liberals to organise an underground resistance group: only a few hours after one of the Democratic Defence members was accidentally caught, the rest were also rounded up. All the police had to do was read the first man’s diary – where he had meticulously listed his comrades’ names and addresses, in some cases including a description of each subversive “assignment”. Torture, court martial and long prison sentences – in some cases the death sentence – followed.
A year after Panayiotis’s capture, the military police guarding him decided to relax his isolation regime by allowing me, a harmless 10-year-old, to visit him once a week. Our already close bond grew stronger with boy-talk that allowed him a degree of escapism. He told me about machines I had never seen (computers, he called them), asked about the latest movies, described his favourite cars.
In anticipation of my visits, he would use matchsticks and other materials that prison guards would let him keep to build model planes for me. Often, he would hide inside his elegant artefacts a message for my aunt, my mother, on occasion even for his colleagues at Siemens. For my part, I was proud of my new skill of disassembling his models with minimal damage, retrieving the message, and putting them back together.
Long after Panayiotis’s death, I discovered the last of these: a matchstick model of a Stuka dive-bomber in my old family home’s attic. Torn between leaving it intact and looking inside, I decided to take it apart. And there it was. His last missive was not addressed to anyone in particular.
It was a single word: “kyriarchia”. Sovereignty.
A tank outside the parliament building in Athens during the military coup in 1967. Photograph: Bettmann/Corbis
It was almost 50 years after those childhood evenings under the red blanket that I made my first official visit to Berlin as finance minister of Greece, in February 2015. My first port of call was, of course, the federal finance ministry, to meet the legendary Dr Wolfgang Schäuble. To him, and his minions, I was a nuisance. Our leftwing government had just been elected, defeating a sister party of the Christian Democrats – New Democracy – on an electoral platform that was, to say the least, a form of inconvenience for Schäuble and Chancellor Angela Merkel, and their plans for keeping the eurozone in order.
Our success was, indeed, Berlin’s greatest fear. Were we to succeed in negotiating a new deal for Greece that ended the interminable recession gripping the nation, the Greek leftist “disease” would almost certainly spread to Portugal, Spain and Ireland, all of which had general elections looming.
Before I arrived in Berlin, and only three days after I had assumed office as minister, I received my first high-ranking visitor in my Athens office: Schäuble’s self-appointed envoy, Jeroen Dijsselbloem, the Dutch finance minister and president of the Eurogroup of finance ministers. Within seconds of meeting, he asked me whether I intended to implement fully and unwaveringly the economic programme that previous Greek governments had been forced by Berlin, Brussels and Frankfurt – the seat of the European Central Bank (ECB) – to adopt.
Given that our government had won a mandate to renegotiate the very logic of that disastrous programme (which had led to the loss of one third of national income and increased unemployment by 20%), his question was never going to be the beginning of a beautiful friendship.
For my part, I attempted a diplomatic reply that would be my standard line of argument for the months to follow: “Given that the existing economic programme has been an indisputable failure, I propose that we sit down together, the new Greek government and our European partners, and rethink the whole programme without prejudice or fear, designing together economic policies that may help Greece recover.”
My modest plea for a modicum of national sovereignty over the economic policies imposed on a nation languishing in the depths of a great depression was met with astonishing brutality. “This will not work!”, was Dijsselbloem’s opening line. In less than a minute he had laid his cards on the table: if I were to insist on any substantial renegotiation of the programme, the ECB would close down our banks by the end of February 2015 – a month after we had been elected.
The Greek finance ministry’s office overlooks Syntagma Square and the House of Parliament – the very stage on which, in April 1967, the tanks had crushed our democracy. As Dijsselbloem spoke, I caught myself looking over his shoulder out to the broad square teeming with people and thinking to myself: “This is interesting. In 1967 it was the tanks, now they are trying to do the same with the banks.”
The meeting with Dijsselbloem ended with a tumultuous press conference in which the Eurogroup’s president lost his cool when he heard me say that our government was not planning to work with the cabal of technicians the troika of lenders habitually sent to Athens to impose upon the elected government policies destined to fail. The die had been cast and the battle for reclaiming part of our lost sovereignty was only beginning. Berlin, where I was to meet the troika’s real master, beckoned.
As the car that was driving me from Berlin’s Tegel airport approached the old headquarters of Goering’s air ministry – now the home of the federal ministry of finance – I wondered whether my host, Schäuble, could even begin to imagine that I was arriving in Berlin with my head full of childhood memories in which Germany featured as an important friend.
Once inside the building, my aides and I were ushered briskly into a large lift. The lift door opened up into a long, cold corridor at the end of which awaited the great man in his famous wheelchair. As I approached, my extended hand was refused and, instead of a handshake, he ushered me purposefully into his office.
While my relationship with Schäuble warmed in the months that followed, the shunned hand symbolised a great deal that is wrong with Europe. It was symbolic proof that the half-century that had passed since my red blanket days, and those prison visits to Siemens’ man in Athens, had changed Europe to no end.
I have no idea what role Siemens played in securing my uncle’s release some time in 1972, two years before the regime’s collapse. What I do know is that my parents were convinced that the German company had played a decisive role. For that reason, every time I saw the word “Siemens” around our home, I felt a warm glow. It is the same kind of warmth I still feel when I hear the words Deutsche Welle. Indeed, back then, in the exciting, bleak years of my childhood, Germany featured in my imagination as a dear friend, a land of democrats that, under Chancellor Willy Brandt, did what was humanly possible to help Greeks rid ourselves of our ugly dictatorship.
Returning home to Athens from my first official visit to Berlin, I was struck by the irony. A continent that had been uniting under different languages and cultures was now divided by a common currency, the euro, and the awful centrifugal forces that it had unleashed throughout Europe.
A week after our first bilateral meeting in Berlin, Schäuble and I were to meet again across the long, rectangular table of the Eurogroup, the eurozone’s decision-making body, comprising the common currency’s finance ministers, plus the representatives of the troika – the ECB, the European Commission, and the International Monetary Fund. After I had recited our government’s plea for a substantial renegotiation of the so-called “Greek economic programme”, which had the troika’s fingerprints all over it, Dr Schäuble astounded me with a reply that should send shivers up the spine of every democrat: “Elections cannot be allowed to change an economic programme of a member state!” he said categorically.
During a break from that 10-hour Eurogroup meeting, in which I had struggled to reclaim some economic sovereignty on behalf of my battered parliament and our suffering people, another finance minister attempted to soothe me by saying: “Yanis, you must understand that no country can be sovereign today. Especially not a small and bankrupt one like yours.”
This line of argument is probably the most pernicious fallacy to have afflicted public debate in our modern liberal democracies. Indeed, I would go as far as to suggest that it may be the greatest threat to liberal democracy itself. Its true meaning is that sovereignty is passé unless you are the United States, China or, maybe, Putin’s Russia. In which case you might as well append your country to a transnational alliance of states where your parliament is reduced to a rubber stamp, and all authority is vested in the larger states.
Interestingly, this argument is not reserved for small, bankrupt countries such as Greece, trapped in a badly designed common currency area. This same noxious dictum is today being peddled in the UK – supposedly as a clinching argument in favour of the remain campaign. As a supporter of Britain remaining in the EU, nothing upsets me more than the enlistment to the “yes” cause of an argument that is as toxic as it is woolly.
The problem begins once the distinction between sovereignty and power is blurred. Sovereignty is about who decides legitimately on behalf of a people – whereas power is the capacity to impose these decisions on the outside world. Iceland is a tiny country. But to claim that Iceland’s sovereignty is illusory because it is too small to have much power is like arguing that a poor person with no political clout might as well give up her right to vote.
To put it slightly differently, small sovereign nations such as Iceland have choices to make within the broader constraints created for them by nature and by the rest of humanity. However limited these choices might be, Iceland’s citizens retain absolute authority to hold their elected officials accountable for the decisions they have reached (within the nation’s external constraints), and to strike down every piece of legislation those elected officials have decided upon in the past.
An alliance of states, which is what the EU is, can of course come to mutually beneficial arrangements, such as a defensive military alliance against a common aggressor, coordination between police forces, open borders, an agreement to common industry standards, or the creation of a free-trade zone. But it can never legitimately strike down or overrule the sovereignty of one of its member states on the basis of the limited power it has been granted by the sovereign states that have agreed to participate in the alliance. There is no collective European sovereignty from which Brussels could draw the legitimate political authority to do so.
One may retort that the European Union’s democratic credentials are beyond reproach. The European Council comprises heads of governments, while Ecofin and the Eurogroup are the councils of finance ministers (of the whole EU and of the eurozone respectively). All these representatives are, of course, democratically elected. Moreover, there is the European parliament, elected by the citizens of the member states, which has the power to send proposed legislation back to the Brussels bureaucracy. But these arguments demonstrate how badly European appreciation of the founding principles of liberal democracy has been degraded. The critical error of such a defence is once more to confuse political authority with power.
A parliament is sovereign, even if its country is not particularly powerful, when it can dismiss the executive for having failed to fulfil the tasks assigned to it within the constraints of whatever power the executive and the parliament possess. Nothing like this exists in the EU today.
For while the members of the European Council and the Eurogroup of finance ministers are elected politicians, answerable, theoretically, to their respective national parliaments, the Council and the Eurogroup are themselves not answerable to any parliament, nor indeed to any voting citizens whatsoever.
Moreover, the Eurogroup, where most of Europe’s important economic decisions are taken, is a body that does not even exist in European law, that keeps no minutes of its procedures and insists its deliberations are confidential – that is, not to be shared with the citizens of Europe. It operates on the basis – in the words of Thucydides – that “strong do as they please while the weak suffer what they must”. It is a set-up designed to preclude any sovereignty derived from the people of Europe.
While opposing Schäuble’s logic on Greece in the Eurogroup and elsewhere, at the back of my mind there were two thoughts. First, as the finance minister of a bankrupt state, whose citizens demanded an end to a great depression that had been caused by a denial of our bankruptcy – the imposition of new unpayable loans, so payments could be made on old unpayable loans – I had a political and moral duty to say no to more “extend-and-pretend” loan agreements. My second thought was the lesson of Sophocles’s Antigone, who taught us that good women and men have a duty to contradict rules lacking political and moral legitimacy.
Political authority is the cement that keeps legislation together, and the sovereignty of the body politic that engenders the legislation is its foundation. Saying no to Schäuble and the troika was an essential defence of our right to sovereignty. Not just as Greeks but as Europeans.
How ironic that this should also have been the last missive I received from Siemens’ long forgotten man in Athens.
Supporters of a no vote in Greece’s referendum on its bailout, outside the Greek parliament in Athens last summer. Photograph: Nicolas Koutsokostas/Demotix/Corbis
Coming into the highest level of European decision-making from the academic world, where argument and reason are the norm, the most striking realisation was the absence of any meaningful debate. If this was not bad enough, there was an even more painful realisation: that this absence is considered natural – indeed, considered a virtue, and one that newcomers like myself should embrace, or face the consequences.
Prearranged communiques, prefabricated votes, a solid coalition of finance ministers around Schäuble that was impenetrable to rational debate; this was the order to the day and, more often, of the long, long night. Not once did I get the feeling that my interlocutors were at all interested in Greece’s economic recovery while we were discussing the economic policies that should be implemented in my country.
From the day I assumed office I strove to put together sensible, moderate proposals that would create common ground between my government, the troika of Greece’s lenders and Schäuble’s people. The idea was to go to Brussels, put to them our own blueprint for Greece’s recovery and then discuss with them their own ideas and objections to ours.
My own Athens-based team worked hard on this, together with experts from abroad, including Jeff Sachs of Columbia University, Thomas Meyer, a former chief economist at Deutsche Bank, Daniel Cohen and Matthieu Pigasse, leading lights of the French investment bank Lazard, the former US treasury secretary Larry Summers, and my personal friend Lord Lamont – not exactly a group of leftist recalcitrants.
Soon we had a fully-fledged plan, whose final version I co-authored with Jeff Sachs. It consisted of three chapters. One proposed smart debt operations that would make Greece’s public debt manageable again, while guaranteeing maximum returns to our creditors. The second chapter put forward a medium-term fiscal consolidation policy that would ensure the Greek government would never get into deficit again, while limiting our budget surplus targets to levels low enough to be credible and consistent with recovery. Finally, the third chapter outlined deep reforms to public and tax administration, product markets, and the restructure of a broken banking system as well as the creation a development bank to manage public assets at an arm’s length from politicians.
I am often asked: Why were these proposals of your ministry rejected? They were not. The Eurogroup and the troika did not have to reject them because they never allowed me to put them on the table. When I began speaking about them, they would look at me as if I were singing the Swedish national anthem. And behind the scenes they were exerting pressure on the Greek prime minister, Alexis Tsipras, to repress these proposals, insinuating that there would be no agreement unless we stuck to the troika’s failed programme.
What was really going on, of course, was that the troika could simply ignore our proposals, tell the world that I had nothing credible to offer them, let the negotiations fail, impose an indefinite bank holiday, and then force the prime minister to acquiesce on everything – including a massive new loan that is at least double the size Greece would have required under our proposals.
Tragically, despite our prime minister’s acceptance of the troika’s terms of surrender, and the loss of another year during which Greece’s great depression is deepening, the same process is unfolding now. Only a few days ago WikiLeaks revealed the troubling transcript of a telephone conversation involving the International Monetary Fund’s participants in the Greek drama. Listening to their discussion confirms that nothing has changed since I resigned last July.
Once I put it to Schäuble that we, as the elected representatives of a continent in crisis, can not defer to unelected bureaucrats; we have a duty to find common ground on the policies that affect people’s lives through direct dialogue. He replied that, in his perspective, what matters most is the respect of the existing “rules”. And since the rules can only be enforced by technocrats, I should talk to them.
Whenever I attempted to discuss rules that were clearly impossible to enforce, the standard reply was: “But these are the rules!” Once, while I was pushing hard for the argument, resulting from our team’s policy work, that primary budget surplus targets of 4.5% of Greece’s national income were impossible, and undesirable even from the creditors’ perspective, Schäuble looked at me and asked me, perhaps for the first and last time, an economic question. “So, what would you like that target to be?” At last, I rejoiced, a chance to have a serious discussion.
In an attempt to be as reasonable as possible, I replied: “For the target of the government budget primary surplus to be credible and realistic, it needs to be consistent with our overall policy mix. The budget surplus number, when added to the difference between savings and investment, must equal Greece’s current account balance. Which means that we can strive for a higher budget primary surplus if we also put in place a credible strategy for boosting investment and delivering more credit to exporters.
“So, before I can answer your question, Wolfgang, on what the primary surplus target ought to be, it is crucial that we link this number to our policies on non-performing bank loans (that impede credit to exporters) and investment flows (which are reduced when we set the primary budget surplus target too high, scaring investors off with the implicit threat of higher future taxes). What I can tell you at this point is that the optimal target cannot be more than 1.5%. But let’s have our people study this together.”
Schäuble’s response to my point, addressing the rest of the Eurogroup while avoiding my eyes, was remarkable: “The previous government has committed Greece to 4.5% primary surpluses. And a commitment is a commitment!”
A few hours later, the media was full of leaks from the Eurogroup, claiming that “the Greek finance minister infuriated his colleagues in the Eurogroup by subjecting them to an economics lecture”.
Wolfgang Schäuble and Yanis Varoufakis before a finance ministers’ meeting in Brussels in 2015 Photograph: Olivier Hoslet/EPA
There is a reason why I began this piece with the story of my Uncle Panayiotis. That reason is a question asked by a journalist towards the end of the press conference after my first meeting with Wolfgang Schäuble in Berlin.
The question was about Siemens and a scandal that had broken out some years earlier, when an investigation initiated in the US found evidence that a certain Michalis Christoforakos, a successor of Panayiotis, was actively pushing bribes into the hands of Greek politicians to secure government contracts on behalf of Siemens. Soon after the Greek authorities began investigating the matter, the gentleman absconded to Germany, where the courts prevented his extradition to Athens.
“Did you, minister,” asked the journalist, “impress upon your German colleague” – that would be Wolfgang Schäuble – “the German state’s obligation to help the Greek government snuff out corruption by extraditing Mr Christoforakos to Greece?” I tried to honour the question with a reasonable answer. “I am sure,” I said, “that the German authorities will understand the importance of assisting our troubled state in its struggle against corruption in Greece. I trust that my colleagues in Germany understand the importance of not being seen to have double standards anywhere in Europe.” Looking terribly put out, Schäuble mumbled that this was not a matter for his finance ministry.
On the aeroplane back to Athens, my mind travelled to the late 1970s. After his release from prison, Panayiotis returned to the helm of Siemens Greece. He was happy in that job, as he kept telling me, and proud of his work. Until he stopped being proud of it – so much so that he resigned in anger.
I remember asking him why he had resigned. His answer still resonates. He told me that he was facing pressure from his superiors in Germany to pay bribes to Greek politicians to ensure that Siemens would maintain its dominant position in Greece, getting the lion’s share of contracts related to the lucrative digitisation of the Greek telephone network.
There is a touching faith in the European north that Europe comprises ants and grasshoppers – and that all the frugal and cautious ants live in the north, while the spendthrift grasshoppers have congregated mysteriously in the south. The reality is much more muddled. A mighty network of corrupt practices has been laid over all of our countries – and the collapse of democratic checks and balances, due in part to our receding sovereignty, has helped hide it from public view.
As legitimate political authority retreats, we fall in the lap of brute force, inertia and demonisation of the weak. Indeed, by the end of June of 2015, the ECB had shut our banks, our government was divided, I resigned my ministry, and my prime minister capitulated to the troika.
The crushing of the Athens spring was a serious blow for an already wounded Greece. But it was also a wholesale defeat for the idea of a united, humanist, democratic Europe.
Our European Union is disintegrating. Should we accelerate the disintegration of a failed confederacy? If one insists that even small countries can retain their sovereignty, as I have done, does this mean Brexit is the obvious course? My answer is an emphatic “No!”
Here is why: if Britain and Greece were not already in the EU, they should most certainly stay out. But, once inside, it is crucial to consider the consequences of a decision to leave. Whether we like it or not, the European Union is our environment – and it has become a terribly unstable environment, which will disintegrate even if a small, depressed country like Greece leaves, let alone a major economy like Britain. Should the Greeks or the Brits care about the disintegration of an infuriating EU? Yes, of course we should care. And we should care very much because the disintegration of this frustrating alliance will create a vortex that will consume us all – a postmodern replay of the 1930s.
It is a major error to assume, whether you are a remain or a leave supporter, that the EU is something constant “out there” that you may or may not want to be part of. The EU’s very existence depends on Britain staying in. Greece and Britain are facing the same three options. The first two are represented aptly by the two warring factions within the Tory party: deference to Brussels and exit. They are equally calamitous options. Both lead to the same dystopian future: a Europe fit only for those who flourish in times of a great Depression – the xenophobes, the ultra-nationalists, the enemies of democratic sovereignty. The third option is the only one worth going for: staying in the EU to form a cross-border alliance of democrats, which Europeans failed to manage in the 1930s, but which our generation must now attempt to prevent history repeating itself.
This is precisely what some of us are working towards in creating DiEM25 – the Democracy in Europe Movement, with a view to conjuring up a democratic surge across Europe, a common European identity, an authentic European sovereignty, an internationalist bulwark against both submission to Brussels and hyper-nationalist reaction.
Is this not utopian? Of course it is! But not more so than the notion that the current EU can survive its anti-democratic hubris, and the gross incompetence fuelled by its unaccountability. Or the idea that British or Greek democracy can be revived in the bosom of a nation-state whose sovereignty will never be restored within a single market controlled by Brussels.
Just like in the early 1930s, Britain and Greece cannot escape Europe by building a mental or legislative wall behind which to hide. Either we band together to democratise – or we suffer the consequences of a pan-European nightmare that no border can keep out.
The first German word I ever learned was Siemens. It was emblazoned on our sturdy 1950s fridge, our washing machine, the vacuum cleaner – on almost every appliance in my family’s home in Athens. The reason for my parents’ peculiar loyalty to the German brand was my uncle Panayiotis, who was Siemens’ general manager in Greece from the mid-1950s to the late 1970s.
A Germanophile electrical engineer and a fluent speaker of Goethe’s language, Panayiotis had convinced his younger sister – my mother – to take up the study of German; she even planned to spend a year in Hamburg to take up a Goethe Institute scholarship in the summer of 1967.
Alas, on 21 April 1967, my mother’s plans were laid in ruins, along with our imperfect Greek democracy. For in the early hours of that morning, at the command of four army colonels, tanks rolled on to the streets of Athens and other major cities, and our country was soon enveloped in a thick cloud of neo-fascist gloom. It was also the day when Uncle Panayiotis’s world fell apart.
Unlike my dad, who in the late 1940s had paid for his leftist politics with several years in concentration camps, Panayiotis was what today would be referred to as a neoliberal. Fiercely anti-communist, and suspicious of social democracy, he supported the American intervention in the Greek civil war in 1946 (on the side of my father’s jailers). He backed the German Free Democratic party and the Greek Progressive party, which purveyed a blend of free-market economics with unconditional support for Greece’s oppressive US-led state security machine.
His political views, and his position as the head of Siemens’ operations in Greece, made Panayiotis a typical member of Greece’s postwar ruling class. When state security forces or their stooges roughed up leftwing protesters, or even killed a brilliant member of parliament, Grigoris Lambrakis, in 1963, Panayiotis would grudgingly approve, convinced that these were unpleasant but necessary actions. My ears are still ringing with the rowdy exchanges he often had with Dad, over what he considered “reasonable measures to defend democracy from its sworn enemies” – reasonable measures that my father had experienced first-hand, and from which he would never fully recover.
The heavy footprint of US agencies in Greek politics, even going so far as to engineer the dismissal of a popular centrist prime minister, Georgios Papandreou, in 1965, seemed to Panayiotis an acceptable trade-off: Greece had given up some sovereignty to western powers in exchange for freedom from a menacing eastern bloc lurking a short driving distance north of Athens. However, on that bleak April day in 1967, Panayiotis’s life was turned upside down.
He simply could not tolerate that “his” people (as he referred to the rightist army officers who had staged the coup and, more importantly, their American handlers) should dissolve parliament, suspend the constitution, and intern potential dissidents (including rightwing democrats) in football stadia, police stations and concentration camps. He had no great sympathy with the deposed centrist prime minister that the putschists and their US puppeteers were trying to keep out of government – but his worldview was torn asunder, leading him to a sudden spurt of almost comical radicalisation.
A few months after the military regime took power, Panayiotis joined an underground group called Democratic Defence, which consisted largely of other establishment liberals like himself – university professors, lawyers, and even a future prime minister. They planted a series of bombs around Athens, taking care to ensure there were no injuries, in order to demonstrate that the military regime was not in full control, despite its clampdown.
For a few years after the coup, Panayiotis appeared – even to his own mother – as yet another professional keeping his head down, minding his own business. No one had an inkling of his double life: corporate man during the day, subversive bomber by night. We were mostly relieved, meanwhile, that Dad had not disappeared again into some concentration camp.
My enduring memory of those years, in fact, is the crackling sound of a radio hidden under a red blanket in the middle of the living room in our Athens home. Every night at around nine, mum and dad would huddle together under the blanket – and upon hearing the muffled jingle announcing the beginning of the programme, followed by the voice of a German announcer, my own six-year-old imagination would travel from Athens to central Europe, a mythical place I had not visited yet except for the tantalising glimpses offered by an illustrated Brothers Grimm book I had in my bedroom.
Deutsche Welle, the German international radio station that my parents were listening to, became their most precious ally against the crushing power of state propaganda at home: a window looking out to faraway democratic Europe. At the end of each of its hour-long special broadcasts on Greece, my parents and I would sit around the dining table while they mulled over the latest news.
I didn’t fully understand what they were discussing, but this neither bored nor upset me. For I was gripped by a sense of excitement at the strangeness of our predicament: that, to find out what was happening in our very own Athens, we had to travel, through the airwaves, and veiled by a red blanket, to a place called Germany.
The reason for the red blanket was a grumpy old neighbour called Gregoris. Gregoris was known for his connections with the secret police and his penchant for spying on my parents; in particular my Dad, whose leftwing past made him an excellent target for an ambitious snitch. Strange as it may sound today, tuning in to Deutsche Welle broadcasts became one of a long list of activities punishable by anything from harassment to torture. So, having noticed Gregoris snooping around inside our backyard, my parents took no risks. Thus the red blanket became our defence from Gregoris’s prying ears.
A few years later, it was from Deutsche Welle that we learned what Panayiotis and his colleagues had been up to – when the radio announced that they had all been arrested. Dad would joke for years to come about the pathetic inability of these bourgeois liberals to organise an underground resistance group: only a few hours after one of the Democratic Defence members was accidentally caught, the rest were also rounded up. All the police had to do was read the first man’s diary – where he had meticulously listed his comrades’ names and addresses, in some cases including a description of each subversive “assignment”. Torture, court martial and long prison sentences – in some cases the death sentence – followed.
A year after Panayiotis’s capture, the military police guarding him decided to relax his isolation regime by allowing me, a harmless 10-year-old, to visit him once a week. Our already close bond grew stronger with boy-talk that allowed him a degree of escapism. He told me about machines I had never seen (computers, he called them), asked about the latest movies, described his favourite cars.
In anticipation of my visits, he would use matchsticks and other materials that prison guards would let him keep to build model planes for me. Often, he would hide inside his elegant artefacts a message for my aunt, my mother, on occasion even for his colleagues at Siemens. For my part, I was proud of my new skill of disassembling his models with minimal damage, retrieving the message, and putting them back together.
Long after Panayiotis’s death, I discovered the last of these: a matchstick model of a Stuka dive-bomber in my old family home’s attic. Torn between leaving it intact and looking inside, I decided to take it apart. And there it was. His last missive was not addressed to anyone in particular.
It was a single word: “kyriarchia”. Sovereignty.
A tank outside the parliament building in Athens during the military coup in 1967. Photograph: Bettmann/Corbis
It was almost 50 years after those childhood evenings under the red blanket that I made my first official visit to Berlin as finance minister of Greece, in February 2015. My first port of call was, of course, the federal finance ministry, to meet the legendary Dr Wolfgang Schäuble. To him, and his minions, I was a nuisance. Our leftwing government had just been elected, defeating a sister party of the Christian Democrats – New Democracy – on an electoral platform that was, to say the least, a form of inconvenience for Schäuble and Chancellor Angela Merkel, and their plans for keeping the eurozone in order.
Our success was, indeed, Berlin’s greatest fear. Were we to succeed in negotiating a new deal for Greece that ended the interminable recession gripping the nation, the Greek leftist “disease” would almost certainly spread to Portugal, Spain and Ireland, all of which had general elections looming.
Before I arrived in Berlin, and only three days after I had assumed office as minister, I received my first high-ranking visitor in my Athens office: Schäuble’s self-appointed envoy, Jeroen Dijsselbloem, the Dutch finance minister and president of the Eurogroup of finance ministers. Within seconds of meeting, he asked me whether I intended to implement fully and unwaveringly the economic programme that previous Greek governments had been forced by Berlin, Brussels and Frankfurt – the seat of the European Central Bank (ECB) – to adopt.
Given that our government had won a mandate to renegotiate the very logic of that disastrous programme (which had led to the loss of one third of national income and increased unemployment by 20%), his question was never going to be the beginning of a beautiful friendship.
For my part, I attempted a diplomatic reply that would be my standard line of argument for the months to follow: “Given that the existing economic programme has been an indisputable failure, I propose that we sit down together, the new Greek government and our European partners, and rethink the whole programme without prejudice or fear, designing together economic policies that may help Greece recover.”
My modest plea for a modicum of national sovereignty over the economic policies imposed on a nation languishing in the depths of a great depression was met with astonishing brutality. “This will not work!”, was Dijsselbloem’s opening line. In less than a minute he had laid his cards on the table: if I were to insist on any substantial renegotiation of the programme, the ECB would close down our banks by the end of February 2015 – a month after we had been elected.
The Greek finance ministry’s office overlooks Syntagma Square and the House of Parliament – the very stage on which, in April 1967, the tanks had crushed our democracy. As Dijsselbloem spoke, I caught myself looking over his shoulder out to the broad square teeming with people and thinking to myself: “This is interesting. In 1967 it was the tanks, now they are trying to do the same with the banks.”
The meeting with Dijsselbloem ended with a tumultuous press conference in which the Eurogroup’s president lost his cool when he heard me say that our government was not planning to work with the cabal of technicians the troika of lenders habitually sent to Athens to impose upon the elected government policies destined to fail. The die had been cast and the battle for reclaiming part of our lost sovereignty was only beginning. Berlin, where I was to meet the troika’s real master, beckoned.
As the car that was driving me from Berlin’s Tegel airport approached the old headquarters of Goering’s air ministry – now the home of the federal ministry of finance – I wondered whether my host, Schäuble, could even begin to imagine that I was arriving in Berlin with my head full of childhood memories in which Germany featured as an important friend.
Once inside the building, my aides and I were ushered briskly into a large lift. The lift door opened up into a long, cold corridor at the end of which awaited the great man in his famous wheelchair. As I approached, my extended hand was refused and, instead of a handshake, he ushered me purposefully into his office.
While my relationship with Schäuble warmed in the months that followed, the shunned hand symbolised a great deal that is wrong with Europe. It was symbolic proof that the half-century that had passed since my red blanket days, and those prison visits to Siemens’ man in Athens, had changed Europe to no end.
I have no idea what role Siemens played in securing my uncle’s release some time in 1972, two years before the regime’s collapse. What I do know is that my parents were convinced that the German company had played a decisive role. For that reason, every time I saw the word “Siemens” around our home, I felt a warm glow. It is the same kind of warmth I still feel when I hear the words Deutsche Welle. Indeed, back then, in the exciting, bleak years of my childhood, Germany featured in my imagination as a dear friend, a land of democrats that, under Chancellor Willy Brandt, did what was humanly possible to help Greeks rid ourselves of our ugly dictatorship.
Returning home to Athens from my first official visit to Berlin, I was struck by the irony. A continent that had been uniting under different languages and cultures was now divided by a common currency, the euro, and the awful centrifugal forces that it had unleashed throughout Europe.
A week after our first bilateral meeting in Berlin, Schäuble and I were to meet again across the long, rectangular table of the Eurogroup, the eurozone’s decision-making body, comprising the common currency’s finance ministers, plus the representatives of the troika – the ECB, the European Commission, and the International Monetary Fund. After I had recited our government’s plea for a substantial renegotiation of the so-called “Greek economic programme”, which had the troika’s fingerprints all over it, Dr Schäuble astounded me with a reply that should send shivers up the spine of every democrat: “Elections cannot be allowed to change an economic programme of a member state!” he said categorically.
During a break from that 10-hour Eurogroup meeting, in which I had struggled to reclaim some economic sovereignty on behalf of my battered parliament and our suffering people, another finance minister attempted to soothe me by saying: “Yanis, you must understand that no country can be sovereign today. Especially not a small and bankrupt one like yours.”
This line of argument is probably the most pernicious fallacy to have afflicted public debate in our modern liberal democracies. Indeed, I would go as far as to suggest that it may be the greatest threat to liberal democracy itself. Its true meaning is that sovereignty is passé unless you are the United States, China or, maybe, Putin’s Russia. In which case you might as well append your country to a transnational alliance of states where your parliament is reduced to a rubber stamp, and all authority is vested in the larger states.
Interestingly, this argument is not reserved for small, bankrupt countries such as Greece, trapped in a badly designed common currency area. This same noxious dictum is today being peddled in the UK – supposedly as a clinching argument in favour of the remain campaign. As a supporter of Britain remaining in the EU, nothing upsets me more than the enlistment to the “yes” cause of an argument that is as toxic as it is woolly.
The problem begins once the distinction between sovereignty and power is blurred. Sovereignty is about who decides legitimately on behalf of a people – whereas power is the capacity to impose these decisions on the outside world. Iceland is a tiny country. But to claim that Iceland’s sovereignty is illusory because it is too small to have much power is like arguing that a poor person with no political clout might as well give up her right to vote.
To put it slightly differently, small sovereign nations such as Iceland have choices to make within the broader constraints created for them by nature and by the rest of humanity. However limited these choices might be, Iceland’s citizens retain absolute authority to hold their elected officials accountable for the decisions they have reached (within the nation’s external constraints), and to strike down every piece of legislation those elected officials have decided upon in the past.
An alliance of states, which is what the EU is, can of course come to mutually beneficial arrangements, such as a defensive military alliance against a common aggressor, coordination between police forces, open borders, an agreement to common industry standards, or the creation of a free-trade zone. But it can never legitimately strike down or overrule the sovereignty of one of its member states on the basis of the limited power it has been granted by the sovereign states that have agreed to participate in the alliance. There is no collective European sovereignty from which Brussels could draw the legitimate political authority to do so.
One may retort that the European Union’s democratic credentials are beyond reproach. The European Council comprises heads of governments, while Ecofin and the Eurogroup are the councils of finance ministers (of the whole EU and of the eurozone respectively). All these representatives are, of course, democratically elected. Moreover, there is the European parliament, elected by the citizens of the member states, which has the power to send proposed legislation back to the Brussels bureaucracy. But these arguments demonstrate how badly European appreciation of the founding principles of liberal democracy has been degraded. The critical error of such a defence is once more to confuse political authority with power.
A parliament is sovereign, even if its country is not particularly powerful, when it can dismiss the executive for having failed to fulfil the tasks assigned to it within the constraints of whatever power the executive and the parliament possess. Nothing like this exists in the EU today.
For while the members of the European Council and the Eurogroup of finance ministers are elected politicians, answerable, theoretically, to their respective national parliaments, the Council and the Eurogroup are themselves not answerable to any parliament, nor indeed to any voting citizens whatsoever.
Moreover, the Eurogroup, where most of Europe’s important economic decisions are taken, is a body that does not even exist in European law, that keeps no minutes of its procedures and insists its deliberations are confidential – that is, not to be shared with the citizens of Europe. It operates on the basis – in the words of Thucydides – that “strong do as they please while the weak suffer what they must”. It is a set-up designed to preclude any sovereignty derived from the people of Europe.
While opposing Schäuble’s logic on Greece in the Eurogroup and elsewhere, at the back of my mind there were two thoughts. First, as the finance minister of a bankrupt state, whose citizens demanded an end to a great depression that had been caused by a denial of our bankruptcy – the imposition of new unpayable loans, so payments could be made on old unpayable loans – I had a political and moral duty to say no to more “extend-and-pretend” loan agreements. My second thought was the lesson of Sophocles’s Antigone, who taught us that good women and men have a duty to contradict rules lacking political and moral legitimacy.
Political authority is the cement that keeps legislation together, and the sovereignty of the body politic that engenders the legislation is its foundation. Saying no to Schäuble and the troika was an essential defence of our right to sovereignty. Not just as Greeks but as Europeans.
How ironic that this should also have been the last missive I received from Siemens’ long forgotten man in Athens.
Supporters of a no vote in Greece’s referendum on its bailout, outside the Greek parliament in Athens last summer. Photograph: Nicolas Koutsokostas/Demotix/Corbis
Coming into the highest level of European decision-making from the academic world, where argument and reason are the norm, the most striking realisation was the absence of any meaningful debate. If this was not bad enough, there was an even more painful realisation: that this absence is considered natural – indeed, considered a virtue, and one that newcomers like myself should embrace, or face the consequences.
Prearranged communiques, prefabricated votes, a solid coalition of finance ministers around Schäuble that was impenetrable to rational debate; this was the order to the day and, more often, of the long, long night. Not once did I get the feeling that my interlocutors were at all interested in Greece’s economic recovery while we were discussing the economic policies that should be implemented in my country.
From the day I assumed office I strove to put together sensible, moderate proposals that would create common ground between my government, the troika of Greece’s lenders and Schäuble’s people. The idea was to go to Brussels, put to them our own blueprint for Greece’s recovery and then discuss with them their own ideas and objections to ours.
My own Athens-based team worked hard on this, together with experts from abroad, including Jeff Sachs of Columbia University, Thomas Meyer, a former chief economist at Deutsche Bank, Daniel Cohen and Matthieu Pigasse, leading lights of the French investment bank Lazard, the former US treasury secretary Larry Summers, and my personal friend Lord Lamont – not exactly a group of leftist recalcitrants.
Soon we had a fully-fledged plan, whose final version I co-authored with Jeff Sachs. It consisted of three chapters. One proposed smart debt operations that would make Greece’s public debt manageable again, while guaranteeing maximum returns to our creditors. The second chapter put forward a medium-term fiscal consolidation policy that would ensure the Greek government would never get into deficit again, while limiting our budget surplus targets to levels low enough to be credible and consistent with recovery. Finally, the third chapter outlined deep reforms to public and tax administration, product markets, and the restructure of a broken banking system as well as the creation a development bank to manage public assets at an arm’s length from politicians.
I am often asked: Why were these proposals of your ministry rejected? They were not. The Eurogroup and the troika did not have to reject them because they never allowed me to put them on the table. When I began speaking about them, they would look at me as if I were singing the Swedish national anthem. And behind the scenes they were exerting pressure on the Greek prime minister, Alexis Tsipras, to repress these proposals, insinuating that there would be no agreement unless we stuck to the troika’s failed programme.
What was really going on, of course, was that the troika could simply ignore our proposals, tell the world that I had nothing credible to offer them, let the negotiations fail, impose an indefinite bank holiday, and then force the prime minister to acquiesce on everything – including a massive new loan that is at least double the size Greece would have required under our proposals.
Tragically, despite our prime minister’s acceptance of the troika’s terms of surrender, and the loss of another year during which Greece’s great depression is deepening, the same process is unfolding now. Only a few days ago WikiLeaks revealed the troubling transcript of a telephone conversation involving the International Monetary Fund’s participants in the Greek drama. Listening to their discussion confirms that nothing has changed since I resigned last July.
Once I put it to Schäuble that we, as the elected representatives of a continent in crisis, can not defer to unelected bureaucrats; we have a duty to find common ground on the policies that affect people’s lives through direct dialogue. He replied that, in his perspective, what matters most is the respect of the existing “rules”. And since the rules can only be enforced by technocrats, I should talk to them.
Whenever I attempted to discuss rules that were clearly impossible to enforce, the standard reply was: “But these are the rules!” Once, while I was pushing hard for the argument, resulting from our team’s policy work, that primary budget surplus targets of 4.5% of Greece’s national income were impossible, and undesirable even from the creditors’ perspective, Schäuble looked at me and asked me, perhaps for the first and last time, an economic question. “So, what would you like that target to be?” At last, I rejoiced, a chance to have a serious discussion.
In an attempt to be as reasonable as possible, I replied: “For the target of the government budget primary surplus to be credible and realistic, it needs to be consistent with our overall policy mix. The budget surplus number, when added to the difference between savings and investment, must equal Greece’s current account balance. Which means that we can strive for a higher budget primary surplus if we also put in place a credible strategy for boosting investment and delivering more credit to exporters.
“So, before I can answer your question, Wolfgang, on what the primary surplus target ought to be, it is crucial that we link this number to our policies on non-performing bank loans (that impede credit to exporters) and investment flows (which are reduced when we set the primary budget surplus target too high, scaring investors off with the implicit threat of higher future taxes). What I can tell you at this point is that the optimal target cannot be more than 1.5%. But let’s have our people study this together.”
Schäuble’s response to my point, addressing the rest of the Eurogroup while avoiding my eyes, was remarkable: “The previous government has committed Greece to 4.5% primary surpluses. And a commitment is a commitment!”
A few hours later, the media was full of leaks from the Eurogroup, claiming that “the Greek finance minister infuriated his colleagues in the Eurogroup by subjecting them to an economics lecture”.
Wolfgang Schäuble and Yanis Varoufakis before a finance ministers’ meeting in Brussels in 2015 Photograph: Olivier Hoslet/EPA
There is a reason why I began this piece with the story of my Uncle Panayiotis. That reason is a question asked by a journalist towards the end of the press conference after my first meeting with Wolfgang Schäuble in Berlin.
The question was about Siemens and a scandal that had broken out some years earlier, when an investigation initiated in the US found evidence that a certain Michalis Christoforakos, a successor of Panayiotis, was actively pushing bribes into the hands of Greek politicians to secure government contracts on behalf of Siemens. Soon after the Greek authorities began investigating the matter, the gentleman absconded to Germany, where the courts prevented his extradition to Athens.
“Did you, minister,” asked the journalist, “impress upon your German colleague” – that would be Wolfgang Schäuble – “the German state’s obligation to help the Greek government snuff out corruption by extraditing Mr Christoforakos to Greece?” I tried to honour the question with a reasonable answer. “I am sure,” I said, “that the German authorities will understand the importance of assisting our troubled state in its struggle against corruption in Greece. I trust that my colleagues in Germany understand the importance of not being seen to have double standards anywhere in Europe.” Looking terribly put out, Schäuble mumbled that this was not a matter for his finance ministry.
On the aeroplane back to Athens, my mind travelled to the late 1970s. After his release from prison, Panayiotis returned to the helm of Siemens Greece. He was happy in that job, as he kept telling me, and proud of his work. Until he stopped being proud of it – so much so that he resigned in anger.
I remember asking him why he had resigned. His answer still resonates. He told me that he was facing pressure from his superiors in Germany to pay bribes to Greek politicians to ensure that Siemens would maintain its dominant position in Greece, getting the lion’s share of contracts related to the lucrative digitisation of the Greek telephone network.
There is a touching faith in the European north that Europe comprises ants and grasshoppers – and that all the frugal and cautious ants live in the north, while the spendthrift grasshoppers have congregated mysteriously in the south. The reality is much more muddled. A mighty network of corrupt practices has been laid over all of our countries – and the collapse of democratic checks and balances, due in part to our receding sovereignty, has helped hide it from public view.
As legitimate political authority retreats, we fall in the lap of brute force, inertia and demonisation of the weak. Indeed, by the end of June of 2015, the ECB had shut our banks, our government was divided, I resigned my ministry, and my prime minister capitulated to the troika.
The crushing of the Athens spring was a serious blow for an already wounded Greece. But it was also a wholesale defeat for the idea of a united, humanist, democratic Europe.
Our European Union is disintegrating. Should we accelerate the disintegration of a failed confederacy? If one insists that even small countries can retain their sovereignty, as I have done, does this mean Brexit is the obvious course? My answer is an emphatic “No!”
Here is why: if Britain and Greece were not already in the EU, they should most certainly stay out. But, once inside, it is crucial to consider the consequences of a decision to leave. Whether we like it or not, the European Union is our environment – and it has become a terribly unstable environment, which will disintegrate even if a small, depressed country like Greece leaves, let alone a major economy like Britain. Should the Greeks or the Brits care about the disintegration of an infuriating EU? Yes, of course we should care. And we should care very much because the disintegration of this frustrating alliance will create a vortex that will consume us all – a postmodern replay of the 1930s.
It is a major error to assume, whether you are a remain or a leave supporter, that the EU is something constant “out there” that you may or may not want to be part of. The EU’s very existence depends on Britain staying in. Greece and Britain are facing the same three options. The first two are represented aptly by the two warring factions within the Tory party: deference to Brussels and exit. They are equally calamitous options. Both lead to the same dystopian future: a Europe fit only for those who flourish in times of a great Depression – the xenophobes, the ultra-nationalists, the enemies of democratic sovereignty. The third option is the only one worth going for: staying in the EU to form a cross-border alliance of democrats, which Europeans failed to manage in the 1930s, but which our generation must now attempt to prevent history repeating itself.
This is precisely what some of us are working towards in creating DiEM25 – the Democracy in Europe Movement, with a view to conjuring up a democratic surge across Europe, a common European identity, an authentic European sovereignty, an internationalist bulwark against both submission to Brussels and hyper-nationalist reaction.
Is this not utopian? Of course it is! But not more so than the notion that the current EU can survive its anti-democratic hubris, and the gross incompetence fuelled by its unaccountability. Or the idea that British or Greek democracy can be revived in the bosom of a nation-state whose sovereignty will never be restored within a single market controlled by Brussels.
Just like in the early 1930s, Britain and Greece cannot escape Europe by building a mental or legislative wall behind which to hide. Either we band together to democratise – or we suffer the consequences of a pan-European nightmare that no border can keep out.
Monday 14 March 2016
Lecture on Nationalism at JNU #5 - Nivedita Menon
This attack on Nivedita Menon
Mary E John in The Hindu
A notable feature of the university protests that have rocked the nation in recent times is the prominent presence of women. Dalit research scholar Rohith Vemula’s mother Radhika was hounded by the media, and her personal life vilified in the attempt to prove that Rohith was not a Dalit. The faculty members from Jawaharlal Nehru University (JNU) who came to the Patiala House courts for JNU Students’ Union president Kanhaiya Kumar’s bail hearing and were attacked by irate ‘patriotic lawyers’ were mostly women. In Allahabad, the first woman president of the Allahabad University Students’ Union, Richa Singh, has faced physical intimidation from her political opponents who are now seeking other ways to oust her from the university. The latest in this series is JNU professor Nivedita Menon against whom a concerted campaign seems to have been launched, including media attacks and malicious police complaints.
One of the events that JNU teachers conducted in solidarity with students in the course of the campaign against JNU as a supposed den of anti-nationals was a series of lectures on nationalism. Professor Menon delivered a lecture in Hindi called “Nation, a daily plebiscite” (see video above) in which she made the argument that the formation of one nation does not automatically end all nationalist aspirations. Drawing attention to histories of nation formation as crucial to understanding present-day conflicts, she also discussed Kashmir’s complicated history of accession to India.
These lectures are available on YouTube, and some days afterwards, a TV channel started a campaign, continuously playing video clips taken out of context (including a clip from a speech at a political event in 2014), calling Prof. Menon anti-national, and creating an atmosphere of threat, intimidation and incitement to mob violence. In addition, according to media reports, two police complaints have been filed against her in Delhi by organisations linked to the Bharatiya Janata Party, and a complaint lodged against her in a court in Kanpur. The complaints against her are, in effect, part of a right-wing offensive to lay claim to nationalism by attacking any mode of dissent as anti-national.
Does this mean that men are ‘patriots’ and women ‘dissenters’? Any such claim is immediately demolished, of course, by the powerful presence of militant right-wing women like Uma Bharti and generations of ‘sadhvis’ known for their incendiary demagoguery, from Rithambhara to Prachi. So there are plenty of women ‘patriots’. The real distinction is that it is those women who lay claim to the legacy of feminism who are being singled out as ‘dissenters’. Why is this happening? Why are feminist scholars like Prof. Menon being targeted? What exactly is Indian feminism and what are the forms of dissent that feminists in India have adopted? How have feminists become leaders in the present struggles over democracy in India and why is this being perceived as dangerous?
Feminism in India
First and foremost, feminism in India, going back to the nineteenth century, has never had the luxury to simply be about women. This is because the struggles over women’s wrongs and rights in the Indian context have always been tied to larger issues — to the histories of colonialism and nationalism before Independence; to the meanings of development after 1947; and to the conflicts over democracy today. Feminists have been demonstrating how the hierarchies of gender in India are intertwined with those of caste; how the promises of national development remained unfulfilled for the vast majority of women; and how families have often turned into sites of the worst violence against their very own women.
First and foremost, feminism in India, going back to the nineteenth century, has never had the luxury to simply be about women. This is because the struggles over women’s wrongs and rights in the Indian context have always been tied to larger issues — to the histories of colonialism and nationalism before Independence; to the meanings of development after 1947; and to the conflicts over democracy today. Feminists have been demonstrating how the hierarchies of gender in India are intertwined with those of caste; how the promises of national development remained unfulfilled for the vast majority of women; and how families have often turned into sites of the worst violence against their very own women.
Second, we as feminists have had to learn over and over again that our movements can only grow if we do not claim immunity from our own tools of critique and dissent. Some of the fiercest debates witnessed in the Indian women’s movement have therefore been internal ones, addressed to each other. Prominent examples of such debates include those over a uniform civil code; over the need and direction for reserved seats for women in Parliament and legislatures; and over how best to combat the scourge of female foeticide.
It is therefore particularly shameful, but also revealing, that sections of the electronic media and countless vicious trolls on social media have tried to instil fear by singling out Prof. Menon among other teachers as an alleged ‘anti-national’. Anyone who is even remotely familiar with her writings should know better. Prof. Menon has drawn from prior scholarship (both in India and abroad) to lay out why, in fact, simple universal theories of women’s subordination will not work in contexts like India. By tracing the effects of colonial rule and the many responses to it, she has demonstrated how both community rights and individual rights have played themselves out in our history, and continue to have a massive impact on women’s equality and freedom to this very day. Some of her finest work takes issue with other feminists in offering a dissenting interpretation of the problems women face. Will a blanket demand for one-third reservation of seats actually be the best strategy for the women’s movement, or should we ‘call the bluff’ of those who demanded a sub-quota? Equally provocatively, might the sheer demand to combat sexual violence against women rebound against the basic freedom from violence that the women’s movement seeks to protect? Such examples could be multiplied. Lest anyone be misled, these are all feminist arguments that work through a form of dissent that simultaneously upholds feminist ways of seeing and feminist forms of struggle.
Does this mean that everything that a scholar like Prof. Menon writes or believes should demand our assent? Not at all. I cannot think of anyone who is more open to disagreement and welcoming of constructive dissent, and who, in fact, encourages this attitude from students and colleagues alike.
An undemocratic mindset
That is precisely why we are outraged not by the fact that people disagree with Prof. Menon or want to question her views, but by the mode in which they are choosing to do so. The malicious campaign we have witnessed in recent days is not about expressing dissent; it is about bullying and intimidation. It reveals a deeply undemocratic mindset that offers no arguments of its own, but tries to capture public attention by repeated, sensationalised attacks that work by twisting statements and taking them out of their context. What is truly worrisome is that it does not just stop at this; this campaign goes far beyond the limits of public debate to make opponents fear for their lives by whipping up a frenzy and creating a situation where the laws of the land are seen as irrelevant. These are acts of cowardice, not bravery, least of all acts of heroism in the service of Mother India.
That is precisely why we are outraged not by the fact that people disagree with Prof. Menon or want to question her views, but by the mode in which they are choosing to do so. The malicious campaign we have witnessed in recent days is not about expressing dissent; it is about bullying and intimidation. It reveals a deeply undemocratic mindset that offers no arguments of its own, but tries to capture public attention by repeated, sensationalised attacks that work by twisting statements and taking them out of their context. What is truly worrisome is that it does not just stop at this; this campaign goes far beyond the limits of public debate to make opponents fear for their lives by whipping up a frenzy and creating a situation where the laws of the land are seen as irrelevant. These are acts of cowardice, not bravery, least of all acts of heroism in the service of Mother India.
Such campaigns are also revealing because they inadvertently recognise the transformational potential of feminism in India today. For feminism believes that genuine gender equality can only come about where fundamental freedoms are guaranteed for all, and where no other forms of oppression can flourish. This is the legacy that feminists in India have been striving for so long to bring to fruition, and which is therefore perceived as being so dangerous. This is also the tradition that Prof. Menon has embodied with integrity and force. And if there are those who would attack such a feminism, they should at least have the courage to attack us all.
Monday 1 February 2016
One year on, Syriza has sold its soul for power .
Costas Lapavitsas in The Guardian
Alexis Tsipras has embraced wholesale the austerity he once decried
‘Above all, Tsipras and his circle were personally committed to the euro. Confronted with the catastrophic results of his strategy, he surrendered abjectly to the lenders.’ Photograph: Petros Giannakouris/AP
Today marks a year since a radical left government was elected in Greece; its dynamic young prime minster, Alexis Tsipras, promising a decisive blow against austerity. Yanis Varoufakis, his unconventional finance minister, arrived in London soon after and caused a media sensation. Here was a government that disregarded stuffy bourgeois conventions and was spoiling for a fight. Expectations were high.
A year on, the Syriza party is faithfully implementing the austerity policies that it once decried. It has been purged of its left wing and Tsipras has jettisoned his radicalism to stay in power at all costs. Greece is despondent.
Why did it end like this? An urban myth propagated in some media circles suggests that the radicals were stopped by a coup engineered by conservative politicians and EU officials, determined to eliminate any risk of contagion. Syriza was overcome by the monsters of neoliberalism and privilege. Still, it fought the good fight, perhaps even sowed the seeds of rebellion.
The reality is very different. A year ago the Syriza leadership was convinced that if it rejected a new bailout, European lenders would buckle in the face of generalised financial and political unrest. The risks to the eurozone were, they presumed, greater than the risks to Greece. If Syriza negotiated hard, it would be offered an “honourable compromise” relaxing austerity and lightening the national debt. The mastermind of this strategy was Varoufakis, but it was avidly adopted by Tsipras and most of Syriza’s leadership.
Well-meaning critics repeatedly pointed out that the euro had a rigid set of institutions with their own internal logic that would simply reject demands to abandon austerity and write off debt. Moreover, the European Central Bank stood ready to restrict the provision of liquidity to the Greek banks, throttling the economy – and the Syriza government with it. Greece could not negotiate effectively without an alternative plan, including the possibility of exiting the monetary union, since creating its own liquidity was the only way to avoid the headlock of the ECB. That would be far from easy, of course, but at least it would have offered the option of standing up to the catastrophic bailout strategies of the lenders. Unfortunately, the Syriza leadership would have none of it.
The disastrous nature of the Syriza strategy became clear as early as 20 February 2015. European politicians forced the new Greek government to agree to target budget surpluses, implement “reforms”, meet all debt obligations fully and desist from using existing bailout funds for any purpose other than supporting banks. The EU calmly turned off the liquidity tap at the European Central Bank, and refused to give a penny of additional financial support until Greece complied.
Conditions in the country became increasingly desperate as the government soaked up liquidity reserves, the banks went dry, and the economy barely ticked over. By June Greece was forced to impose capital controls and to declare a bank holiday. Syriza attempted one last throw of the dice in July, when Tsipras called a referendum on a new, harsh bailout. Amazingly, and with considerable bravery, 62% of Greeks voted to reject. Tsipras had campaigned for a rejection but when the result came in he realised that in practice, it meant exiting the euro, for which his government had made no serious preparations. To be sure there were back-of-the-envelope “plans” for a parallel currency, or a parallel banking system, but such amateurish ideas were of no use at one minute to midnight. Furthermore, the Greek people had not been prepared and Syriza as a political party barely functioned on the ground. Above all, Tsipras and his circle were personally committed to the euro. Confronted with the catastrophic results of his strategy, he surrendered abjectly to the lenders.
Since then he has adopted a harsh policy of budget surpluses, raised taxes and sold off Greek banks to speculative funds, privatised airports and ports, and is about to slash pensions. The new bailout has condemned a Greece mired in recession to long-term decline as growth prospects are poor, the educated youth is emigrating and national debt weighs heavily.
Syriza is the first example of a government of the left that has not simply failed to deliver on its promises but also adopted the programme of the opposition, wholesale. Its failure has strengthened the perception across Europe that austerity is the only way and nothing can ever change. The implications are severe for several countries, including Spain, where Podemos is knocking on the door of power.
Syriza failed not because austerity is invincible, nor because radical change is impossible, but because, disastrously, it was unwilling and unprepared to put up a direct challenge to the euro. Radical change and the abandonment of austerity in Europe require direct confrontation with the monetary union itself. For smaller countries this means preparing to exit, for core countries it means accepting decisive changes to dysfunctional monetary arrangements. This is the task ahead for the European left and the only positive lesson from the Syriza debacle.
Today marks a year since a radical left government was elected in Greece; its dynamic young prime minster, Alexis Tsipras, promising a decisive blow against austerity. Yanis Varoufakis, his unconventional finance minister, arrived in London soon after and caused a media sensation. Here was a government that disregarded stuffy bourgeois conventions and was spoiling for a fight. Expectations were high.
A year on, the Syriza party is faithfully implementing the austerity policies that it once decried. It has been purged of its left wing and Tsipras has jettisoned his radicalism to stay in power at all costs. Greece is despondent.
Why did it end like this? An urban myth propagated in some media circles suggests that the radicals were stopped by a coup engineered by conservative politicians and EU officials, determined to eliminate any risk of contagion. Syriza was overcome by the monsters of neoliberalism and privilege. Still, it fought the good fight, perhaps even sowed the seeds of rebellion.
The reality is very different. A year ago the Syriza leadership was convinced that if it rejected a new bailout, European lenders would buckle in the face of generalised financial and political unrest. The risks to the eurozone were, they presumed, greater than the risks to Greece. If Syriza negotiated hard, it would be offered an “honourable compromise” relaxing austerity and lightening the national debt. The mastermind of this strategy was Varoufakis, but it was avidly adopted by Tsipras and most of Syriza’s leadership.
Well-meaning critics repeatedly pointed out that the euro had a rigid set of institutions with their own internal logic that would simply reject demands to abandon austerity and write off debt. Moreover, the European Central Bank stood ready to restrict the provision of liquidity to the Greek banks, throttling the economy – and the Syriza government with it. Greece could not negotiate effectively without an alternative plan, including the possibility of exiting the monetary union, since creating its own liquidity was the only way to avoid the headlock of the ECB. That would be far from easy, of course, but at least it would have offered the option of standing up to the catastrophic bailout strategies of the lenders. Unfortunately, the Syriza leadership would have none of it.
The disastrous nature of the Syriza strategy became clear as early as 20 February 2015. European politicians forced the new Greek government to agree to target budget surpluses, implement “reforms”, meet all debt obligations fully and desist from using existing bailout funds for any purpose other than supporting banks. The EU calmly turned off the liquidity tap at the European Central Bank, and refused to give a penny of additional financial support until Greece complied.
Conditions in the country became increasingly desperate as the government soaked up liquidity reserves, the banks went dry, and the economy barely ticked over. By June Greece was forced to impose capital controls and to declare a bank holiday. Syriza attempted one last throw of the dice in July, when Tsipras called a referendum on a new, harsh bailout. Amazingly, and with considerable bravery, 62% of Greeks voted to reject. Tsipras had campaigned for a rejection but when the result came in he realised that in practice, it meant exiting the euro, for which his government had made no serious preparations. To be sure there were back-of-the-envelope “plans” for a parallel currency, or a parallel banking system, but such amateurish ideas were of no use at one minute to midnight. Furthermore, the Greek people had not been prepared and Syriza as a political party barely functioned on the ground. Above all, Tsipras and his circle were personally committed to the euro. Confronted with the catastrophic results of his strategy, he surrendered abjectly to the lenders.
Since then he has adopted a harsh policy of budget surpluses, raised taxes and sold off Greek banks to speculative funds, privatised airports and ports, and is about to slash pensions. The new bailout has condemned a Greece mired in recession to long-term decline as growth prospects are poor, the educated youth is emigrating and national debt weighs heavily.
Syriza is the first example of a government of the left that has not simply failed to deliver on its promises but also adopted the programme of the opposition, wholesale. Its failure has strengthened the perception across Europe that austerity is the only way and nothing can ever change. The implications are severe for several countries, including Spain, where Podemos is knocking on the door of power.
Syriza failed not because austerity is invincible, nor because radical change is impossible, but because, disastrously, it was unwilling and unprepared to put up a direct challenge to the euro. Radical change and the abandonment of austerity in Europe require direct confrontation with the monetary union itself. For smaller countries this means preparing to exit, for core countries it means accepting decisive changes to dysfunctional monetary arrangements. This is the task ahead for the European left and the only positive lesson from the Syriza debacle.
Saturday 20 June 2015
Greek debt crisis is the Iraq War of finance
Guardians of financial stability are deliberately provoking a bank run and endangering Europe's system in their zeal to force Greece to its knees.
By Ambrose Evans-Pritchard in The Telegraph 6:29PM BST 19 Jun 2015
Rarely in modern times have we witnessed such a display of petulance and bad judgment by those supposed to be in charge of global financial stability, and by those who set the tone for the Western world.
The spectacle is astonishing. The European Central Bank, the EMU bail-out fund, and the International Monetary Fund, among others, are lashing out in fury against an elected government that refuses to do what it is told. They entirely duck their own responsibility for five years of policy blunders that have led to this impasse.
They want to see these rebel Klephts hanged from the columns of the Parthenon – or impaled as Ottoman forces preferred, deeming them bandits - even if they degrade their own institutions in the process.
If we want to date the moment when the Atlantic liberal order lost its authority – and when the European Project ceased to be a motivating historic force – this may well be it. In a sense, the Greek crisis is the financial equivalent of the Iraq War, totemic for the Left, and for Souverainistes on the Right, and replete with its own “sexed up” dossiers.
Does anybody dispute that the ECB – via the Bank of Greece - is actively inciting a bank run in a country where it is also the banking regulator by issuing this report on Wednesday?
It warned of an "uncontrollable crisis" if there is no creditor deal, followed by soaring inflation, "an exponential rise in unemployment", and a "collapse of all that the Greek economy has achieved over the years of its EU, and especially its euro area, membership".
The guardian of financial stability is consciously and deliberately accelerating a financial crisis in an EMU member state - with possible risks of pan-EMU and broader global contagion – as a negotiating tactic to force Greece to the table.
It did so days after premier Alexis Tsipras accused the creditors of "laying traps" in the negotiations and acting with a political motive. He more or less accused them of trying to destroy an elected government and bring about regime change by financial coercion.
I leave it to lawyers to decide whether this report is a prima facie violation of the ECB’s primary duty under the EU treaties. It is certainly unusual. The ECB has just had to increase emergency liquidity to the Greek banks by €1.8bn (enough to last to Monday night) to offset the damage from rising deposit flight.
In its report, the Bank of Greece claimed that failure to meet creditor demands would “most likely” lead to the country’s ejection from the European Union. Let us be clear about the meaning of this. It is not the expression of an opinion. It is tantamount to a threat by the ECB to throw the Greeks out of the EU if they resist.
This is not the first time that the ECB has strayed far from its mandate. It forced the Irish state to make good the claims of junior bondholders of Anglo-Irish Bank, saddling Irish taxpayers with extra debt equal to 20pc of GDP.
This was done purely in order to save the European banking system at a time when the ECB was refusing to do the job itself, betraying the primary task of a central bank to act as a lender of last resort.
It sent secret letters to the elected leaders of Spain and Italy in August 2011 demanding detailed changes to internal laws for which it had no mandate or technical competence, even meddling in neuralgic issues of labour law that had previously led to the assassination of two Italian officials by the Red Brigades. It demanded changes to the Spanish constitution.
When Italy’s Silvio Berlusconi balked, the ECB switched off bond purchases, driving 10-year yields to 7.5pc. He was forced from office in a back-room coup d’etat, albeit one legitimised by the ageing ex-Stalinist EU fanatic who then happened to be president of Italy.
Lest we forget, it parachuted in its vice-president – Lucas Papademos – to take over Greece when premier George Papandreou merely suggested that he might submit the EMU bail-out package to a referendum, a wise idea in retrospect. That makes two coups d’etat. Now Syriza fears they are angling for a third.
The creditor power structure has lost its way. The IMF is in confusion. It is enforcing a contractionary austerity policy in Greece – with no debt relief, exchange cushion, or offsetting investment - that has been discredited by its own elite research department as scientifically unsound.
The Fund’s culpability in this fiasco is by now well known. As I argued last week, its own internal documents show that the original bail-out in 2010 was designed to rescue the EMU banking system and monetary union at a time when it had no defences against contagion. Greece was sacrificed.
One should have thought that the IMF would wish to lower the political temperature, given that its own credibility and long-term survival are at stake. But no, Christine Lagarde has upped the political ante by stating that Greece will fall into arrears immediately if it misses a €1.6bn payment to the Fund on June 30.
In my view, this is a discretionary escalation. The normal procedure is to notify the IMF Board after 30 days. This period is a de facto grace period, and in a number of past cases the arrears were cleared up quietly during the interval before the matter ever reached the Board.
The IMF could have let this process run in the case of Greece. It has chosen not to do so, ostensibly on the grounds that the sums are unusually large.
Klaus Regling, head of the eurozone bail-out fund (EFSF), entered on cue to hint strongly that his organisation would trigger cross-default clauses on its Greek bonds – 45pc of the Greek package – even though there is no necessary reason why it should do so. It is an optional matter for the EFSF board.
He seems to be threatening an EFSF default, even though the Greeks themselves are not doing so, a remarkable state of affairs.
It is obvious what is happening. The creditors are acting in concert. Instead of stopping to reflect for one moment on the deeper wisdom of their strategy, they are doubling down mechanically, appearing to assume that terror tactics will cow the Greeks at the twelfth hour.
Personally, I am a Burkean conservative with free market views. Ideologically, Syriza is not my cup tea. Yet we Burkeans do like democracy – and we don’t care for monetary juntas – even if it leads to the election of a radical-Left government.
As it happens, Edmund Burke would have found the plans presented to the Eurogroup last night by finance minister Yanis Varoufakis to be rational, reasonable, fair, and proportionate.
They include a debt swap with ECB bonds coming due in July and August exchanged for bonds from the bail-out fund. They would have longer maturities and lower interest rates, reflecting the market borrowing cost of the creditors.
Syriza said from the outset that it was eager to work on market reforms with the OECD, the leading authority. It wants to team up with the International Labour Organisation on Scandinavian style flexi-security and labour reforms, a valid alternative to the German-style Hartz IV reforms that have impoverished the bottom fifth of German society and which no Left-wing movement can stomach.
It wished to push through a more radical overhaul of the Greek state that anything yet done under five years of Troika rule – and much has been done, to be fair.
As Mr Varoufakis told Die Zeit: “Why does a kilometer of freeway cost three times as much where we are as it does in Germany? Because we’re dealing with a system of cronyism and corruption. That’s what we have to tackle. But, instead, we’re debating pharmacy opening times."
The Troika pushed privatisation of profitable state assets at knock-down depression prices to private monopolies, to the benefit of an entrenched elite. To call that reforms invites a bitter cynicism.
The only reason that the Troika pushed this policy was in order to extract money. It was acting at a debt collector. “The reforms were a smokescreen. Whenever I tried talking about proposals, they were bored. I could see it in their body language," Mr Varoufakis told me.
The truth is that the creditor power structure never even looked at the Greek proposals. They never entertained the possibility of tearing up their own stale, discredited, legalistic, fatuous Troika script.
The decision was made from the outset to demand strict enforcement of the terms agreed in the original Memorandum, which even the last conservative pro-Troika government was unable to implement - regardless of whether it makes any sense, or actually increases the chance that Germany and other lenders will recoup their money.
At best, it is bureaucratic inertia, a prime exhibit of why the EU has become unworkable, almost genetically incapable of recognising and correcting its own errors.
At worst, it is nasty, bullying, insistence on ritual capitulation for the sake of it.
We all know the argument. The EU is worried about political “moral hazard”, about what Podemos might achieve in Spain, or the eurosceptics in Italy, or the Front National in France, if Syriza is seen to buck the system and get away with it.
But do the proponents of this establishment view – and one hears it a lot – really think that Podemos can be defeated by crushing Syriza, or that they can discourage Marine Le Pen by violating the sovereignty and sensibilities of a nation?
Do they think that the EU’s ever-declining hold on the loyalty of Europe’s youth can be reversed by creating a martyr state on the Left? Do they not realize that this is their own Guatemala, the radical experiment of Jacobo Arbenz that was extinguished by the CIA in 1954, only to set off the Cuban revolution and thirty years of guerrilla warfare across Latin America? Don’t these lawyers – and yes they are almost all lawyers - ever look beyond their noses?
The Versailles victors assumed reflexively that they had the full weight of moral authority on their side when they imposed their Carthiginian settlement on a defeated Germany in 1919 and demanded the payment of debts that they themselves invented. History judged otherwise.
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