BREXIT - The Great Taboo in British Politics

George Parker and Chris Giles in The FT

As he battled to save his job this month, Boris Johnson warned his MPs not get into “some hellish, Groundhog Day debate about the merits of belonging to the single market”. Brexit, he warned his mutinous party in a sweaty House of Commons meeting room, was settled. 

Later that day, Johnson limped to victory in a confidence vote, but only after 41 per cent of his MPs had voted to oust him from Downing Street. He is safe for now but the defining project of his premiership — Brexit — still hangs like a cloud over Britain’s fragile economy. 

Johnson may not want his party “relitigating” Brexit but neither does Sir Keir Starmer, leader of the opposition Labour party, around a third of whose supporters voted Leave in the 2016 referendum. Nor does Andrew Bailey, governor of the Bank of England. Rishi Sunak, the chancellor, would rather talk about something else. Brexit has become the great British taboo. 

But as the sixth anniversary of the UK’s vote to leave the EU approaches, economists are starting to quantify the damage caused by the erection of trade barriers with its biggest market, separating the “Brexit effect” from the damage caused by the Covid-19 pandemic. They conclude that the damage is real and it is not over yet. 

The UK is lagging behind the rest of the G7 in terms of trade recovery after the pandemic; business investment, seen by Johnson and Sunak as the panacea to a poor growth rate, trails other industrialised countries, in spite of lavish Treasury tax breaks to try to drive it up. Next year, according to the OECD think-tank, the UK will have the lowest growth in the G20, apart from sanctioned Russia. 

The Office for Budget Responsibility, the official British forecaster, has seen no reason to change its prediction, first made in March 2020, that Brexit would ultimately reduce productivity and UK gross domestic product by 4 per cent compared with a world where the country remained inside the EU. It says that a little over half of that damage has yet to occur. 

That level of decline, worth about £100bn a year in lost output, would result in lost revenues for the Treasury of roughly £40bn a year. That is £40bn that might have been available to the beleaguered Johnson for the radical tax cuts demanded by the Tory right — the equivalent of 6p off the 20p in the pound basic rate of income tax. 

Despite these sobering figures, Johnson’s complaints about the prospect of “relitigating” Brexit was exaggerated, intended to portray himself as the victim of a putative plot by pro-Remain MPs. In fact, British politicians — and the wider country — are still traumatised by the bitter Brexit saga, and deeply unwilling to revisit it. 

Still, this month has seen the first stirrings of a debate that until now has been buried as the evidence of Brexit-induced economic self-harm starts to pile up. Few are talking about reversing Brexit altogether, but another question is being asked: should the UK start to explore with Brussels ways of softening its edges? 

Show, don’t tell 

Downing Street insisted this week it was “too early to pass judgment” on whether Brexit was having a negative impact on the economy, which could be heading into a recession. “The opportunities Brexit provides will be a boon to the UK economy in the long run,” Johnson’s spokesman said. 

Both Johnson and Sunak insist that it is hard at this stage to separate Brexit’s economic impact from the shock of Covid. In the meantime, the prime minister promotes the “benefits of Brexit”, such as new trade agreements with Australia and New Zealand and the freedom for the UK to set its own rules. 

Sunak has promised a reform of rules in the City of London, including reforming the EU’s Solvency II rules to allow insurers to spend more money on infrastructure projects. He has announced eight new freeports with special tax privileges. 

But economists have not yet been able to find any significant positive impacts of these policies. Some, including Johnson’s patriotic promise to put a “crown stamp” on pint glasses in pubs and to allow traders to sell their wares in pounds and ounces, are primarily symbolic. 

Critics of government Brexit policy are routinely derided. Suella Braverman, attorney-general, last week accused the ITV presenter Robert Peston of “Remainiac make-believe” after he challenged her over the government’s unilateral plan to rip up the Brexit treaty relating to Northern Ireland. Braverman claimed the so-called Northern Ireland protocol had left the region “lagging behind the rest of the UK”. In fact, Northern Ireland (the only area of the UK to remain in the EU’s single market for goods) is the best performing part of the country, apart from London. 

When Bailey appeared before the House of Commons treasury committee in mid May, the BoE governor acknowledged that his predecessor Mark Carney had made himself “unpopular” for saying Brexit would have a negative effect on trade, but that the bank held to that view. 

Kevin Hollinrake, a Tory member of the committee, says Bailey was trying to avoid becoming a political target and was “deliberately avoiding” talking about Brexit. “It’s a singular issue for the UK,” the MP says. “We have changed our immigration rules. It’s about non-tariff barriers. You’ve got to be willing to look at what’s happening on the ground.” 

While some gloomy predictions have failed to materialise, such as former chancellor George Osborne’s 2016 warning of a recession immediately after a Leave vote, there is growing evidence that Brexit is causing more lasting damage to UK economic prospects. 

Ministers are becoming more reluctant to proclaim the economic upsides of Brexit. Kwasi Kwarteng, business secretary, was asked last week at the FT Global Boardroom to list some Brexit benefits. He focused on the UK’s ability to respond swiftly to Russian aggression in Ukraine — “it has substantial benefits particularly in international policy” — rather than on business. Sunak’s allies say the chancellor’s approach is to “show, not tell” on Brexit, pushing through City regulatory reforms rather than giving boosterish speeches on its economic merits. 

The fallout in data 

The first and most obvious economic blow delivered by Brexit came when sterling fell almost 10 per cent after the referendum in June 2016, against currencies that match the UK’s pattern of imports. It did not recover. This sharp depreciation was not followed by a boom in exports as UK goods and services became cheaper on global markets, but it did raise the price of imports and pushed up inflation. 

By June 2018, a team of academic economists at the Centre for Economic Policy Research calculated that there had been a Brexit inflation effect, raising consumer prices by 2.9 per cent, with no corresponding increase in wages. 

Some households, such as those relying on state pensions, were compensated in higher benefits, but the CEPR team found no overall offset with higher incomes. “The Brexit vote delivered a swift negative shock to UK living standards,” they wrote. 

While the UK was still in the EU and during the Brexit “transition phase”, there were no significant effects on trade flows. But this has changed since stricter border controls were introduced at the start of 2021, imposing no tariffs, but significant checks and controls at the formerly frictionless border. 

Economists have used this point in time to contrast how the UK’s trade performance compares with those of other countries before and after the TCA’s imposition. The results have been increasingly ugly, especially for small companies trading with Europe. 

Red tape caused a “steep decline” in the number of trading relationships after January 2021, according to a study by the Centre for Economic Performance at the London School of Economics. The number of buyer-seller relationships fell by almost one-third, it found. 

The same group found food prices had risen as a result of Brexit. Comparing the prices of imported food such as pork, tomatoes and jam, which predominantly came from the EU, with those that came from further afield such as tuna and pineapples, it found a substantial Brexit effect. “Brexit increased average food prices by about 6 per cent over 2020 and 2021,” according to the research. 

Summing up the effects on trade in which imports from the EU have fallen while exports have not risen, Adam Posen, head of the Peterson Institute of International Economics, says “everybody else sees a recovery in trade following Covid and the UK sits flat”. 

The third visible effect of Brexit on the UK economy has been in discouraging business investment. In the first quarter of 2022, real business investment was 9.4 per cent lower than in the second quarter of 2016. That fall was mostly due to Covid, but it had flatlined since the referendum, ending a period of growth since 2010 and falling well short of the performance of other G7 countries. 

Weak investment is a particular worry for Sunak, who sees business investment as the route to greater prosperity. Before departing the BoE in 2020, Carney told a House of Lords Committee that Brexit uncertainty was holding back business investment. Worse, he said, business planning for various Brexit scenarios was taking up a lot of management effort. “Time spent on contingency planning is time not spent on strategic initiatives,” he said. 

Since then, negative perceptions of the UK have continued among business with the chancellor finding he had little bang for his £25bn buck of super deductions in corporation tax to encourage capital spending. As Bailey told MPs last month, the super-deductor was “not at the moment having the impact that was expected”. 

Complaints about high immigration was one of the most contentious issues of the referendum, with a central promise of the Brexit campaign being tougher controls over the number of people entering the country. While net immigration from EU countries has stopped, with effectively no change apparent in the two years to the end of June 2021, net immigration from non EU countries has remained high, with 250,000 in the latest year. 

Collateral damage 

There is, as yet, little appetite among Britain’s political leaders for a return to the EU — even if the other 27 member states were prepared to open the door. Even the pro-EU Liberal Democrats admit reversing course is a long-term aspiration, rather than an immediate goal. 

As part of his attempt to avert a coup, Johnson wrote to MPs this month that he had “created a new and friendly relationship with the EU”. The opposite is true. Brussels restarted legal action against the UK this week over the Northern Ireland protocol: relations are at rock bottom. 

The EU has warned that British scientists will be excluded from the €95bn Horizon research programme as “collateral damage” in the row about Northern Ireland. The prospect of any kind of rapprochement at the moment, at least while Johnson remains prime minister, seems remote. 

But in recent weeks, a tentative debate has started over whether the UK would be better off trying to reach accommodations with the EU to smooth trade in some areas, rather than launching a new front in the Brexit war with unilateral action over Northern Ireland. 

In an article much-discussed at Westminster, the pro-Leave Times columnist Iain Martin wrote this month: “To deny the downsides of Brexit on trade with the EU is to deny reality.” 

Tobias Ellwood, a former Tory defence minister, suggested Britain should rejoin the EU single market to soften the cost of living crisis, and said there was “an appetite” for a rethink and claimed polling indicated “this is not the Brexit most people imagined”. And Daniel Hannan, a leading Tory Brexiter, repeated his longstanding view that Britain should have stayed in the single market under a Norway-style relationship with the EU, while adding that to rejoin it now “would be madness”. 

Anna McMorrin, Labour shadow minister, was recorded telling activists: “I hope eventually that we will get back into the single market and customs union.” She was forced to apologise by Starmer: such talk remains dangerous in political circles. 

Even so, a Starmer-led future Labour government would change UK relations with the EU. The party’s mantra has become “make Brexit work”: rejoining the single market may be off the agenda, but Labour wants to find ways to improve on the bare-bones tariff-free trade agreement Johnson negotiated with the EU. 

Rachel Reeves, the shadow chancellor, told the Financial Times last year that Labour wanted to strike a deal with the EU to reduce the most onerous paperwork and checks on food exports. The party also wants an agreement with Brussels on the mutual recognition of professional qualifications. 

Even among the Eurosceptics in Johnson’s cabinet, there is now an acceptance that the UK should be seeking to rebuild economic relations with the EU, including in areas like the Horizon programme, to avoid exacerbating the looming cost of living crisis. 

“Would I like to be in a better place on Brexit?” asked one pro-Brexit cabinet member. “Yes, absolutely. But we’ve got to find a way of doing it without it looking like we’re running up the white flag and we’re compromising on sovereignty.”

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Why ‘the will of the people’ is a myth in British democracy

British people are fundamentally disempowered by our political system. Other countries show that there’s another way writes George Monbiot in The Guardian


 

Illustration: Sebastien Thibault


They promised sovereignty, but at first it was unclear which variety of sovereignty they meant. Were the politicians who swore we would regain it when we left the European Union referring to parliamentary or popular sovereignty? Now we know they didn’t mean parliamentary sovereignty. Boris Johnson’s government has sought to trick, rush, ignore and prorogue parliament at every turn.

“People v parliament” is Johnson’s pitch to the nation. So where do the people come in? If he is a champion of popular sovereignty, why does he propose no improvements to a 19th-century model of democracy that permits no popular engagement other than an election every few years, and a referendum every few decades? There is a tension between parliamentary and popular sovereignty. A lively, meaningful democracy would achieve a balance between the two. It would combine parliamentary (representative) democracy with participatory democracy. But no such balance is sought.


Rather than encouraging an informed, nuanced politics, Brexit has made our system even more adversarial

Representative democracy is a remarkably blunt instrument. Hundreds of issues are bundled together at every election, yet the vote tends to swing on just one or two of them. The government then presumes consent for its entire programme and, if it commands a parliamentary majority, for anything else it wants to introduce in its term of office. We don’t accept presumed consent in sex. Why should we accept it in politics?

I’ve often been asked, when I complain about a government policy, “So why don’t you stand for election?” This suggests that the only valid political role a citizen can play is to become a representative, so that only a tiny proportion of the population has a legitimate voice between elections. This is the shallowest and weakest conception of democracy. 

I do not want to abandon representative democracy. I want to see it balanced by popular sovereignty, especially the variety known as deliberative democracy. By contrast to the adversarial nature of representative democracy, in which politicians try to dominate and vanquish their opponents, deliberative democracy means drawing citizens together to solve problems. It means creating forums in which we listen respectfully to each other, seek to understand each other’s views, change our minds when necessary, and create the rich, informed democratic culture currently missing from national life.

Perhaps the best example is the participatory budgeting programme in the Brazilian city of Porto Alegre. Between 1989 and 2004, citizens were able to decide how the city’s entire investment budget should be spent. The process was designed by government and people working together, and was allowed to evolve as citizens suggested improvements. Some 50,000 people a year participated. 

Instead of being captured by corrupt politicians and local mafias, the people’s decisions ensured that the money went where it was needed most, greatly improving sanitation, clean water, green space, health and education, transforming the lives of the poor. Porto Alegre became the Brazilian state capital with the highest ranking on the human development index. The more people engaged, the wider and deeper their political understanding became. Short-termism was replaced by long-term thinking: essential if we are to confront environmental breakdown.

There are plenty of other ways in which deliberative democracy can change our lives. In Ireland, a citizens’ assembly on abortion law turned an angry debate into a considered one. It tested competing claims and ideas, and led eventually to a referendum. The Better Reykjavík programme allows the citizens of Iceland’s capital to put forward ideas for the city’s improvement, which other people vote on. The 15 most popular ideas every month are passed to the city council to consider. The programme has remodelled Reykjavík in fascinating ways.

Constitutional conventions can be used to draw up principles of government, on which the rest of the population can then vote. Some of the best models are those developed by the Canadian provinces of British Columbia and Ontario. Members of the convention are drawn by lot and informed by experts, field trips and submissions from other citizens. The UK is in urgent need of one.

But for all the rhetoric about the people’s will, nothing of the kind is on offer in Britain. The so-called citizens’ assembly on climate change proposed by parliament is a cynical caricature of participation. It has a restrictive agenda, a narrow range of advisers and no time for effective deliberation. Digital tools offer massive opportunities for fine-tuning political decisions, but our cod-medieval system – all Black Rods and serjeants at arms – is stuck in the age of the quill pen. The only new form of participation we have been granted this century is an enhanced right to petition parliament, introduced by Tony Blair in 2006. Did it seem radical and innovative? Only until you remember that a similar concession appears to have been made by Edward I in 1275.

The European referendum, that apparently represents the people’s will, was reduced to such a crude choice that no one knows exactly what the majority voted for. Rather than encouraging an informed, nuanced politics, it has made our system even more adversarial, binary and reductive.

I could see the point of Brexit if it meant returning power to the people. But Johnson is as contemptuous of popular sovereignty as he is of parliamentary sovereignty. He seeks sovereignty of a different kind: autocratic control over both parliament and people.

I would love to see Labour placing radical democratic reform at the heart of its manifesto, seeking not to take power but to give it away. I suspect its offer will be limited, until we can build movements big enough to force our governments to let the people speak. Participation in politics is a not a gift. It is our right.

The British Parliament can ignore a Brexit verdict

Michael White in The Guardian


 

Brexiteers claim to revere the ancient British constitution, and ‘sovereignty’ is what it’s all about. Photograph: Carl Court/Getty Images


What if the Brexit camp wins the referendum on 23 June, as some polls are currently scaring sterling by suggesting? Could pro-remain MPs do as one anonymous minister told the BBC and use their parliamentary majority in a “reverse Maastricht” to protect UK access to the EU single market as part of the withdrawal?

They would do so, according to today’s enjoyable speculation, because they have an overwhelming cross-party majority to do so – 454 to 147 mostly rightwing Tories, on some calculations – and because they will be able to claim Brexit has not put up a coherent policy for Britain’s trade relationship with Brussels. It has put up many options, but has no mandate for many of them. 

The very thought of such defiance – here’s the BBC’s James Landale’s account – will have Brexiteers spluttering in their foreign coffee. How dare those MPs defy what will, they hope, be the sovereign will of the British people as expressed through the ballot box?

The short answer to that is simple: of course parliament can defy the referendum result, because the British constitution clearly states that “the crown in parliament” – ie a majority of elected MPs, subject to whatever the Lords tries to moderate – is sovereign.

Since Brexiteers claim to revere the ancient British constitution, and “sovereignty” is what it’s all about – not an excess of Polish plumbers or Bangladeshi restaurants – they can hardly complain about its correct and immaculate application.

There’s a second, telling point, which you will instantly remember when I point it out. Because parliament is sovereign, it can’t be bound, even by a referendum result. Legally speaking, the vote is only advisory.

So much for the legal situation by which many rigid minds think these matters are resolved. In the practical world of politics – politics is always more practical than theoretical – could it be done, if there was the political will among assorted parties to do so?

The short answer, again, is yes. Again the Brexiteers will cry outrage, but since they don’t have a coherent answer themselves it will be open to bold leaders to seize the initiative and sort things out the best way they can.

Remember, even the mud-splattered figure of Michael Gove admitted at the weekend that Britain would still be in the EU when the 2020 election takes place, and that withdrawal would be protracted and messy. Remember too that all sorts of awkward events would follow a Brexit vote.

Sterling would take a hit, so would inward investment and, probably, exports. The Bank of England is making plans. Foreign holders of UK assets – they hold a lot of cash and debt, lots of property of one kind or another – will look at the balance of payments on traded goods and levels of government debt and start moving on, as footloose foreigners do everywhere. They’re not here for the weather. Unions arerightly anxious.

So it would be stormy. “We would accept the mandate of the people to leave the EU,” says one unnamed minister, but everything else would be negotiable. Since they regard access to the EU single market as the most important component of the deal, that is what they would insist on. A majority of MPs from Labour, Lib Dem, Tories (not backbench Tories) and assorted nationalists, notably the 56-strong SNP contingent (suspended MPs included), could then insist on embracing the Norwegian model, one of the many mooted as the ideal relationship by the Brexit campaign.

Yes, I know, there are many others, including the World Trade Organisation’s (WTO) open market scenario. But that is unlikely to stand up to much exposure to the sunlight that would pour through every British window every day after a Brexit triumph – east and west facing windows at the same time, too.

So it would be up to David Cameron and his advisers to decide how best to proceed. Yes, I realise that amateur plotters in the Tory ranks are planning to unseat Cameron if he loses, and some of them if he wins – Matthew D’Ancona is urging Dave to get tough. Does he have it in him? Not sure, but here’s hoping.

This has been a damaging period for Tory unity and many nasty things have been said on both sides. But come the day a majority of MPs will realise that their more swivel-eyed colleagues are best left to their own devices while the humdrum reality of day-to-day real life and government is resumed. If Brexit wins there would be much to do, all day and every day, and a country to run as well.

Cameron would look the best man to do the job and it would be his duty not to slope off because it was his decision alone that dropped us into this referendum shambles, done for party tactical reasons. In normal times that would be enough to finish him off, but these are not normal.

Jeremy Corbyn regularly shows how unsuited he is for any heavy lifting – he’s getting the worst of both worlds by campaigning only feebly against Brexit – and neither Boris Trump nor Govey have emerged with much dignity from the campaign. I’d watch that Theresa May if I were you, Dave, but why wouldn’t she want Cameron to clean up his own dirty kitchen before taking over and giving it a makeover?

Tory papers like the Mail and Telegraph are outraged by the attacks made over the weekend by the likes of Sir John Major. Norman Tebbit – the Tory Tony Benn, disloyal to the point of treachery but not quite crossing the fellow travellers’ Ukip line – is fuming. It would be funny if it were not serious.

Back to the Maastricht rebellion, which so disfigured and weakened decent John Major’s years in office in the 90s when, like Cameron now, he only had a wafer-thin majority. Actually Major did pretty well at the treaty negotiations, his opt-outs kept us out of the euro among other things. Were the ingrates grateful? Of course not. As Ken Clarke once witheringly put it, they are middle-aged (now elderly) men who feel their lives have not been sufficiently exciting.

The Maastricht years were a shambles, good sport for reporters like me, but grim. Yet it is diehard Maastricht disloyalists like Tebbit, John “Vulcan” Redwood and dear but daft Bill Cash who are now crying loyalty; Iain Duncan Smith, who inherited Tebbit’s Chingford seat, too. No wonder Major was so scornful.

Not since Jeremy Corbyn, serial rebel in 500 votes, appealed for loyalty from old comrades to whom he had shown little has there been such cause for dry mirth. Ah, but Iain and Jeremy were doing what they believe in and what their constituents want, will come the retort. And you think that pro-remain MPs can’t say that too?

So the “reverse Maastricht” tactic is both legal and politically feasible. All it would take – the Norway model or any that looks better on the day – is leadership and willpower. Nicola Sturgeon would be a more slippery but also more reliable ally for Cameron (pause for ironic laughter) than Corbyn-led Labour.

But what about the free movement of EU labour in and out of the UK, which Norway’s deal would require us to embrace as part of the price for access? Correct, but for all its populist talk and tabloid extravagance about immigration, Brexiters have not cracked that one either. And they’ve still got to win. Two weeks to go.

If "Protest never changes anything"? Look at how TTIP has been derailed

Owen Jones in The Guardian

People power has taken on big business over this transatlantic stitch-up and looks like winning. We should all be inspired.

 

Illustration by Ben Jennings


For those of us who want societies run in the interests of the majority rather than unaccountable corporate interests, this era can be best defined as an uphill struggle. So when victories occur, they should be loudly trumpeted to encourage us in a wider fight against a powerful elite of big businesses, media organisations, politicians, bureaucrats and corporate-funded thinktanks.

Today is one such moment. The Transatlantic Trade Investment Partnership (TTIP) – that notorious proposed trade agreement that hands even more sweeping powers to corporate titans – lies wounded, perhaps fatally. It isn’t dead yet, but TTIP is a tangled wreckage that will be difficult to reassemble.

Doubts rise over TTIP as France threatens to block EU-US deal



Those of us who campaigned against TTIP – not least fellow Guardian columnist George Monbiot – were dismissed as scaremongering. We said that TTIP would lead to a race to the bottom on everything from environmental to consumer protections, forcing us down to the lower level that exists in the United States. We warned that it would undermine our democracy and sovereignty, enabling corporate interests to use secret courts to block policies that they did not like.

Scaremongering, we were told. But hundreds of leaked documents from the negotiations reveal, in some ways, that the reality is worse – and now the French government has been forced to suggest it may block the agreement.

The documents imply that even craven European leaders believe the US demands go too far. As War on Want puts it, they show that TTIP would “open the door” to products currently banned in the EU “for public health and environmental reasons”.

As the documents reveal, there are now “irreconcilable” differences between the European Union’s and America’s positions. According to Greenpeace, “the EU position is very bad, and the US position is terrible”.

The documents show that the US is actively trying to dilute EU regulations on consumer and environmental protections. In future, for the EU to be even able to pass a regulation, it could be forced to involve both US authorities and US corporations, giving big businesses across the Atlantic the same input as those based in Europe.

With these damning revelations, the embattled French authorities have been forced to say they reject TTIP “at this stage”. President Hollande says France would refuse “the undermining of the essential principles of our agriculture, our culture, of mutual access to public markets”. And with the country’s trade representative saying that “there cannot be an agreement without France and much less against France”, TTIP currently has a bleak future indeed.

There are a number of things we learn from this, all of which should lift hopes. First, people power pays off. European politicians and bureaucrats, quite rightly, would never have imagined that a trade agreement would inspire any interest, let alone mass protests. Symptomatic of their contempt for the people they supposedly exist to serve, the negotiations over the most important aspects of the treaty were conducted in secret. Easy, then, to accuse anti-TTIP activists of “scaremongering” while revealing little of the reality publicly.

But rather than give up, activists across the continent organised. They toxified TTIP, forcing its designers on the defensive. Germany – the very heart of the European project – witnessed mass demonstrations with up to 250,000 people participating.

From London to Warsaw, from Prague to Madrid, the anti-TTIP cause has marched. Members of the European parliament have been subjected to passionate lobbying by angry citizens. Without this popular pressure, TTIP would have received little scrutiny and would surely have passed – with disastrous consequences.

Second, this is a real embarrassment to the British government. Back in 2011, David Cameron vetoed an EU treaty to supposedly defend the national interest: in fact, he was worried that it threatened Britain’s financial sector. The City of London and Britain are clearly not the same thing. But Cameron has been among the staunchest champions of TTIP. He is more than happy to undermine British sovereignty and democracy, as long as it is corporate interests who are the beneficiaries.

And so we end in the perverse situation where it is the French government, rather than our own administration, protecting our sovereignty.

And third, this has real consequences for the EU referendum debate. Rather cynically, Ukip have co-opted the TTIP argument. They have rightly argued that TTIP threatens our National Health Service – but given that their leader, Nigel Farage, has suggested abolishing the NHS in favour of private health insurance, this is the height of chutzpah.

Ukip have mocked those on the left, such as me, who back a critical remain position in the Brexit referendum over this issue. But if we were to leave the EU, not only would the social chapter and various workers’ rights be abandoned – and not replaced by our rightwing government – but Britain would end up negotiating a series of TTIP agreements. We would end up living with the consequences of TTIP, but without the remaining progressive elements of the EU.
Instead, we have seen what happens when ordinary Europeans put aside cultural and language barriers and unite. Their collective strength can achieve results. This should surely be a launchpad for a movement to build a democratic, accountable, transparent Europe governed in the interests of its citizens, not corporations. It will mean reaching across the Atlantic too.

For all President Obama’s hope-change rhetoric, his administration – which zealously promoted TTIP – has all too often championed corporate interests. However, though Bernie Sanders is unlikely to become the Democratic nominee, the incredible movement behind him shows – particularly among younger Americans – a growing desire for a different sort of US.

In the coming months, those Europeans who have campaigned against TTIP should surely reach out to their American counterparts. Even if TTIP is defeated, we still live in a world in which major corporations often have greater power than nation states: only organised movements that cross borders can have any hope of challenging this unaccountable dominance.

From tax justice to climate change, the “protest never achieves anything” brigade have been proved wrong. Here’s a potential victory to relish, and build on.

It took Barack Obama to crush the Brexit fantasy

Jonathan Freedland in The Guardian

The US president destroyed one of the Vote Leave campaign’s core arguments, ending a week that may define the referendum debate

‘The president spelled out that America has no intention of forming some new, closer relationship with a Brexited Britain … it would be at ‘the back of the queue’ if it sought to agree a new treaty with the US.’ Illustration: Nate Kitch


No wonder they were desperate that he keep his mouth shut. At his podium in Downing Street Barack Obama flattered his hosts, paid lip service to the notion that the referendum on British membership of the European Union on 23 June is a matter for the British people – and then calmly ripped apart the case for Brexit.

It was the Vote Leavers’ worst nightmare. For years – no, decades – the anti-EU camp has suggested that Britain’s natural habitat is not among its continental neighbours but in “the Anglosphere”, that solar system of English-speaking planets which revolves around the United States. Break free from Brussels and we could embrace our kindred spirits in Sydney, Toronto and especially New York, Washington and Los Angeles. The Brexit camp has long been like the man who dreams of leaving his wife for another woman, one who really understands him.

Barack Obama: Brexit would put UK 'back of the queue' for trade talks



Obama is that other woman. And today he told the outers their fantasies were no more than that. First in print and then, more explicitly, in person he spelled out that America has no intention of forming some new, closer relationship with a Brexited Britain. On the contrary, a post-EU Britain would be at “the back of the queue” if it sought to agree its own, new trade treaty with the US.

America, he told his British audience – hence his use of “queue”, not “line” – likes the fact that Britain is already married: it works out really well for all three parties involved. His message was unambiguous. Don’t rush into a hasty divorce because you think we’re waiting for you with open arms. We’re not.

At a stroke, he had crushed not only a core part of the leavers’ economic argument – that it’ll be a breeze for Britain to exit the EU and trade just as prosperously as a solo nation – but something bigger: the notion that a brighter, non-European future beckons. Obama burst that bubble.

He also explained that of course he had the right to speak, despite Brexiteer Liam Fox’s letter signed by 100 MPs urging him to stay out of the EU debate. As Obama put it, since the leavers are offering “an opinion about what the US is going to do, I thought you might want to hear an opinion from the president of the United States on what the US is going to do”. And the opinion he gave was devastating.

That he had every right to speak is obvious, by the leavers’ own logic. He and the country he leads have been invoked as central to the alternative utopia that awaits us on Brexit. If he wants to tell us that utopia is an illusion, we need to hear it.

Hence the Brexiteers’ fury. They know how badly Obama’s words undermine their case, especially after what has been a week from hell for the out campaign. One that ended in the absurdity of a Ukip MEP, Mike Hookem, lurching into full-bore anti-Americanism, winding the clock back to 1939 to argue that the US had it in for us even then, seeing the second world war as a way of “smashing the UK’s influence in the world”. When a party defined by its loathing of the EU finds itself attacking the US, you know things have gone awry.

The same is true of Boris Johnson’s Sun screed, which dipped into Donald Trump’s Bumper Book of Political Wisdom to suggest that the “half-Kenyan” president cannot be trusted because he is filled with “ancestral” loathing of Britain.

What an interesting choice of word that “ancestral” was. Not “post-colonial”, which would have located this supposed antipathy in the 20th century, but “ancestral” to be run alongside “half-Kenyan”. It was a reminder of the brilliant slapdown Obama once issued to Trump, when the tycoon was demanding to see Obama’s birth certificate. From the podium at the 2011 White House correspondents’ dinner, Obama said he could go one better and show his birth video. He promptly played a clip from the Lion King, of Simba the newborn cub held aloft – as graceful a way of calling out a racist as one can imagine.

This, incidentally, is where the contortions of Brexit have left Johnson. It may still be true that the London mayor’s decision to back Vote Leave – when his elastic relationship with principle could just as easily have sprung the other way – was politically smart, all but guaranteeing the backing of the Eurosceptic Tory selectorate when they choose a successor to David Cameron. But it’s extracting a price.

Once Johnson promised to be the face of metropolitan inclusivity, a Tory able to reach non-Tories by carrying less of their nasty party baggage. Yet this campaign is stripping away that gloss, reminding us that it was always a fake. Recall that Johnson once spoke of “piccaninnies” and wrote of African men with “watermelon smiles”. In the Spectator in 2002, he declared of Africa: “The problem is not that we were once in charge, but that we are not in charge any more.”

Every day he spends tag-teaming with Nigel Farage – who repeated the mayor’s “half-Kenyan” line – risks trashing the Boris brand, defining Johnson as less a future prime minister than a figure of the fringes, less a lovable maverick than a rather unpleasant oddball.

But it’s the wider Vote Leave campaign that has found itself in the wrong place. An anti-EU movement can’t also be anti-US, not without looking as if it hates everyone. Nor is it good to pit yourself against an American president who, whatever his domestic standing, remains in high esteem in Britain and Europe. It’s just too irresistibly tweetable to ask: if Obama’s for remain, and Trump and Le Pen are for leave, whose side are you on?

Above all, the core case advanced by the leavers on the US is flawed. Fox and others say Obama is a hypocrite because the US would never accept for itself the limitations on sovereignty demanded of Britain by the EU. But the comparison is silly. Britain is strong and rich, but it is also a relatively small country adjacent to a continent. The US virtually is a continent.

What makes sense for one would not make sense for the other. Besides, as Obama explained in Downing Street, the US does trim its sovereignty when it suits its purposes: it agrees to be bound by the trade rulings of the World Trade Organisation and Nafta, even if that means Congress is forced to back down on its own decisions.

All told, the Obama visit has been one of those episodes that say rather more than was ever intended. It says that this president retains a lustre even now, eight years on – one that only grows as you contemplate the contest to take his place. It says that, for all of the remain campaign’s problems, Leave now has to rebuild – after a dreadful seven days that began with Treasury numbers showing Brexit will make Britons poorer, and ended with a surgical evisceration from the world’s most powerful man.

And it said something about Britain’s relationship with the US. Ever needy to hear that we’re still special to the Americans, to hear that their president loves our queen and loves our talisman, Winston Churchill, we still listen to them – even when they tell us there’s no future for just the two of us together, that we need to stay in the marriage we’re in, even if sometimes it feels a little loveless.

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.