Heiner Flassbeck Topic: Why Varoufakis’ DiEM2025 is fighting the wrong fight

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This text deals with strategy, but strategy cannot be seen separate from people and their histories and actions. SYRIZA has always been an uneasy conglomerate of groups of many political persuasions, but ever since it came to power in January 2015, until its capitulation seven months later, two main fractions fought a fierce fight. On one side, there was the heterogeneous left, which wanted to make good on the electoral promise (the Thessaloniki program): there was going to be no austerity any longer, Greece would negotiate a debt write off and if the Troika pushed the country to the brink, the group advocated leaving the euro zone. The leadership, on the other side, also wanted to end austerity. But under no condition was it willing to exit the euro zone.


As Lapavitsas explains, the Syriza leadership convinced itself that if it rejected a new bailout, European lenders would buckle in the face of financial and political unrest. The mastermind of this strategy was Yanis Varoufakis. He negotiated with the lenders for more than six months. But Greece could not negotiate effectively without an alternative plan, including the possibility of exiting the euro zone. Creating its own liquidity was the only way to avoid the Troika’s headlock. 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. The Syriza leadership would have none of it (see here).


‘SYRIZA failed,’ writes Lapavitsas, ‘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’ (see here and also here for his views about a Grexit).


Today Varoufakis is back as the initiator of DiEM2025 (Democracy in Europe). The former Greek minister of finance enjoys a lot of credibility with the European left. Much of this credibility is based on the urban myth that the SYRIZA government put up a heroic fight with the undemocratic powers in Europe that showed no economic insight, no consideration to the fate of the Greek people and blatant disrespect for democracy.


The same discourse now is being propagated again. In 2015, there was ultimately ‘no choice’ for the Greek government than to accept the Troika’s conditions. Today, DiEM2025 wants to reform the EU institutions. There is, again, ‘no choice.’ A fight at the national level is impossible, the left has to unite all over Europe and fight the EU institutions head on. DiEM2025’s aim is ‘to democratise the EU in the knowledge that it will otherwise disintegrate at a terrible cost to all’ (see here). Only two other ‘dreadful options’ remain: a retreat into the assumed antiquated ‘cocoon of the nation-state’ or ‘surrender’ to the European oligarchy. DiEM2025’s goal is ‘to convene a constitutional assembly’ where Europeans will deliberate on how to bring forward, by 2025, a fully fledged European democracy, featuring a ‘sovereign parliament’ that ‘respects national self-determination and shares power with national parliaments, regional assemblies and municipal councils’ (see here). This is, as Varoufakis admits in The Independent, indeed ‘utopian.’ But, he continues, it is ‘a lot more realistic than trying to maintain the system as it is’ or ‘trying to leave.’ Whether you’re Greek or British, ‘escape’ is impossible (see here and here). Does this ring a bell?


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DiEM2025 has a strategy (if you like) to achieve political change. The new European supra-national democracy needs to go in hand with the creation of a ‘post-national or supranational electorate’. But how would this work? As Thomas Fazi rightly notes, it is evident that for the great majority of ordinary European citizens linguistic barriers and cultural differences impair the opportunity for political participation at a supranational level (see here). This may be obvious, but it is a real concern. Why do we need such parties? What can they achieve that others cannot? There is no shred of evidence that this would advance matters.


The contrary is true. Further integration, even if accompanied by a strengthening of the parliament, is not equivalent to more popular control. Varoufakis naively assumes that an enhanced version of the European parliament would suffice for proper democratic control over the Union’s decisions. As Fazi rightly argues, this completely ignores the question of oligarchic capture (see here). Research consistently shows that problems relating to lobbying are exacerbated at the supranational level. Transfers of sovereignty to international loci contribute to the weakening of popular control. These loci are, in general, physically, culturally and linguistically more distant from the general public than nationals one. And this leads to more oligarchic capture (see here).


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Instead of this ‘façadism,’ as Kowalsky calls it (organising a ‘year of the EU citizen,’ etc.), there are a lot of initiatives that the EU could promote if it would be interested in democracy. It could, for example, make EU democracy real at the workplace and work towards industrial democracy – terms which are never to be found in any European policy document (the EP included). Instead, the institutions (the EP included) are now trying to intrude into national collective bargaining territory by setting limits on wage evolution – a clear strategy to destroy the autonomy of social partners (see here). But this, again, is also taking place, in some form or another, in most European countries and so, again, this is a fight that has to be fought at the national level, not by transnational parties, but by social-democratic and democratic leftist parties.


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If DiEM2025 wants to fight for ‘more democratic EU institutions,’ let them. But the more important fight will take place at the national level. Nothing can harm the European oligarchy more than countries dropping out of the EMU (or threaten to do so), re-adjusting, returning to growth and doing better than the dysfunctional, ultra-neoliberal euro zone. Everywhere in Europe, capital is setting up divides among fictitious ethnic and cultural fault lines to pursue a divide and conquer strategy vis-à-vis labour. The left has to fight this struggle on every possible scale. Internationalism never meant giving up on the national struggle. The contrary is true. This has absolutely nothing to do with nationalism. This is not about what the English or the Germans can do because they are English or German, but because most progress can be made on these levels. The Irish defeated the privatisation of water. That did not take a European struggle. The privatisation of water is probably impossible to defeat on this level. But the Irish did it in their country. It is, simply, a strategy to make progress where most progress can be made. This does not exclude international solidarity. On the contrary, it is a condition for such solidarity to exist. We need authentic social democratic parties that win elections nationally, send left-wing representatives to the European parliament, left-wing representatives to the Council and the Commission and Keynesians to the ECB. The fight for investment, recovery and against austerity and corporate lobbying has be to taken to the inside of these institutions. How will transnational political parties achieve this? It is on the national (and local) level that people relate to politics. It is there that the major strengths lie.

This is, of course, not how Varoufakis sees it. As he explained in the Independent, almost eight years after the outbreak of the financial crisis, unemployment in the EU is still at crisis levels, it is twice as high as in the US and the UK – ‘which are now reaching what economists consider ‘full employment.’’ To begin with, no one believes these statistics. There are millions of unemployed people in these countries. ‘If unemployment was still 10-11% in the UK or the US, the administration would have collapsed,’ Varoufakis tells the Independent (see here, see also here and here for critique). How does he know? Did Spain’s government, where unemployment is still over 20%, collapse? Did the Irish government collapse? Ireland’s main’s austerity party got re-elected and the old prime minister is back in power. No transnational party will change this. But decent, authentic and principled social democratic parties can, if they stand up.


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