The Euro and the firefighters of Crassus

IN THE RADICAL PRESS / IL MANIFESTO

By Leo Manfredi

The European house is on fire: Athens has been burning for nearly three years, yet nothing seems to work, despite the austerity measures, despite the interventions of the European institutions, despite a significant restructuring of public debt.

It is said that in ancient Rome, when a building was in flames, the fire brigade arrived as quick as lightning. It consisted of Celtic slaves hired by the wealthy Crassus. They arrived accompanied by an accountant who offered, on behalf of the wealthy landowner, to buy the house that burned: the flames which devoured the building were without doubt the best ally of the general and his business, because before the house fell, so too did its price. The desperate owner agreed to sell his house for a ridiculously low price, because that was
better than nothing. Crassus purchased it, and then firefighters went into action, so houses in Rome were rarely reduced to ashes. Perhaps there were some doubts about the causes of all those fires though.

When Greece began to burn, back in the autumn of 2009, the European Commission, the European Central Bank and the International Monetary Fund turned up. Yet the flames continue to flare up, almost three years later, devouring the wages of workers, carrying off 15,000 civil servants, eroding pensions, destroying the health care system and bringing state education to its knees. To make matters worse, the fire is spreading across Europe, with hot temperatures recorded by the Italian and Spanish bond spreads.

In the face of this tragic spectacle, however, someone is preparing a bill, just as they did in Rome of Crassus. Athens has yet to unlock the privatization bonanza, by which the large capitalists will be able to ge into protected areas of the economy and the the most profitable local services. Moreover, while national labour agreements have been almost completely emptied of meaning, they still exist, and therefore there are hopes of removing them completely from the country’s regulatory framework, in order to prevent Greek workers -reduced to ashes – from regaining in the future ground lost during the years of austerity.

A few days ago, the governor of the European Central Bank (ECB), Mario Draghi, fanned the flames: but his band of firefighters wil not yet intervene. He will be watching while Europe burns. The governor does his job, like Crassus’ accountant, and explains the rules of the game. The European Stability Mechanism which will start operating from September, is able to cool the spread at any time (especially if backed by unlimited funding from the ECB), buying government bonds at auction or directly countering speculation in the financial markets. But, warns Draghi, it will only intervene if governments specifically require it.

Why so much emphasis on the need to submit a formal request for assistance? Because the statute of the fund requires, in response to this request, European institutions to attach strict conditions to the
intervention of firefighters: the support offered by the fund is conditional on the adoption of austerity measures as heavy as those imposed on Greece.

The European Stability Mechanism is the systematization of the processes that have led to the imposition on a sovereign country of a real distortion of economic relations, a revolution of the rules that determine the distribution of wealth within society. In the case of Athens, those processes have been carried out in a clumsy and sometimes even violent fashion (think of the referendum on the policies of austerity denied to the Greek people by the creditors). With each tranche of the loan granted to the country the technicians from Brussels, Frankfurt and Washington arrived and demanded something: one day lowering the minimum wage, then raising the pensionable age, then the closure of a public hospital and so on, until the recent application of yet another tightening from 11.5 billion euros.

It is said that the debts lengthen life, and Greece seems demonstrate this every day: the imminent release of the country from the euro has been declared for nearly three years now , but Greece is still there. Only, poorer than before, more vulnerable. The European policy-makers have always intervened but in the manner of the firefighters of Crassus: only when the country was on the brink of the abyss.

Like the flames that enriched the wealthy Roman businessman, the current crisis seems to be a method for conducting the class struggle on a European scale, and the ESM fund is merely the refinement of this technique: the countries of the periphery of Europe, paralyzed in the refinancing of the debt
due to the absence of a lender of last resort, must beg for aid from the ESM. Which will extinguish the fire only if we are willing to retire later, deny university to our children and care for our elderly, to give up our wages or even our jobs.

This is the European project before us, and it worth discussing, without any prejudice, the more radical options, such as those in an [Italian] e-book Oltre l’austerità (“Beyond austerity”). Because the fire is getting out of control, and only the most diligent servants of Crassus could suggest that “the euro is an irreversible decision.”

Translation by Revolting Europe

Il Manifesto