For the Greek economist, the single currency has simply allowed Berlin to dominate the European market and to become a global exporter country: “The Euro was a disaster”. And on Greece he adds: “Syriza shows us what we should not do and how we should not organize ourselves. Those who want to change things from the Left must begin to fight the European institutions and create new ones.”
Interview with Costas Lapavitsas of Steven Forti
“The euro has only facilitated a German-centric Europe”. Costas Lapavitsas (1961), a professor of economics at the University of London’s School of Oriental and African Studies, is a partisan of Greece’s exit from the Euro. He is the author of several books, including Crisis in the Eurozone (Verso, 2012) and, with Heiner Flassbeck, Against the Troika. Crisis and austerity in the Eurozone (Verso, 2015). A long-time activist of the Hellenic Left, he joined Syriza in 2012 and was elected MP in the first government of Alexis Tsipras in January 2015. He abandoned the Greek Parliament and the party after the signing of the Third Memorandum in the summer two years ago. Since then, he’s been extremely critical of the experience of Syriza’s governments and DIEM25, the European project of former Finance Minister Yannis Varoufakis.
It seems that the crisis has come to an end. Is this really the case?
Things have calmed down, I would say. But more than a crisis, what seems to me to be more correct to speak of now is the new Europe that is emerging. And this is not a very pleasant Europe.
What would this “new” Europe be?
Germany has successfully tackled the Eurozone crisis. In Europe, a centre has been formed, represented by Germany, and more specifically by the German industrial complex. Especially the automotive and chemical industry, which is very focused on exports. Around this centre are forming a series of suburbs (peripheries). At the beginning of the crisis in the Eurozone, we were talking about a single periphery. And it was correct. Now we know that there are more. And in this, Italy is important because it is halfway between this new centre and the periphery. Italy is still suffering from the crisis, but it is also the only country in Europe that has an industrial complex that can compete with Germany. Much more than France which has destroyed its industries and has suffered a profound process of financialization of the economy over recent decades.
You talked about different peripheries. What are they? And in what way do they differentiate themselves?
We can clearly recognize two types of peripheries. One is that of the satellites of Germany. These are countries that can be part of the Euro or not, such as Poland, the Czech Republic, Slovakia, Slovenia and part of Austria. Countries that are directly linked to the German industrial process. This is the European manufacturing centre. Which is starting to attract other countries: Romania, Hungary … The economy of these countries is increasingly dependent on how the German automotive industry works. The other peripheries are the southern one: Greece, Spain, Portugal, a part of Italy. They are countries with a strong public sector, high levels of unemployment, are economically uncompetitive and have no industrial structure that can compete internationally. And, importantly, they are members of the Euro. Which is why they are not competitive. Their role is to provide labour to German industry.
What is the role of France in this “new” Europe?
France is a country in the centre [of Europe], but it has no industrial strength to compete with Germany. He lost the game with the Germans inside the Euro. Medium or long term it will be subordinate to Germany.
Can Macron’s arrival at the Elysee change this situation?
France remains a powerful country, but what can Macron do to compete economically with Germany? It can also make better relations with Merkel than Hollande or reinforce the French military presence in the world, but it will not change anything. Moreover, its economic program contains exactly what the Germans want: lower wages, labour reform, privatizations … the only hope for France in this context is to strengthen its financial system. There it has important advantages.
According to some economists, the Euro was a “protective shield” during the crisis. What is your answer to this interpretation?
Those who still believe that the Euro has been somehow a factor in protecting Europe either have not understood anything that has happened in recent years or are completely obsessed by the Euro. The Euro has been a disaster for the European economy’s ability to cope with the shock of the Great Crisis of 2007-2009. It has enhanced its effects, added other problems and devastated every sector of the economy. The Euro was a total failure in this regard. I think it is more interesting to reflect on the fact that the Euro has allowed Germany to become the dominant country in Europe. This is the true meaning of the Euro. The single currency has allowed Berlin to dominate the European market and to become a global-exporting country able to penetrate the Chinese or US market. And to convert itself into the owner of financial assets. The results that the Euro has produced are exactly the opposite to what we were led to expect.
Has anything changed with Brexit?
Brexit has in a sense been a response to the transformation of the EU into an institution that protects and masks German power. A reaction caused by the loss of sovereignty. It is important because it signals a response from below to the new power that is emerging in Europe. The will to separate from this new empire. The difficulties the UK is experiencing in the last year show how difficult this is. But I would not underestimate the strength of British capitalism. In Europe there are only three capitals that count: Moscow, Berlin and London. And London is aware of it.
Do you see analogies between Brexit and Trump’s victory?
Trump is a different thing. He is an answer that comes from the impasse of neoliberalism. Trump seeks to exploit the feeling of losing popular sovereignty and increasing social inequality through lies. I have not yet seen a Trump policy that respects his electoral promises. He seems to me like a typical republican president who liberalizes the economy. A classic populist demagogue.
Yannis Varoufakis argues that Europe can still be democratized. You are firmly opposed to this hypothesis. Why?
We have lost the last decade discussing how it was possible to change the European Union. Syriza thought naively that winning the elections and governing Greece could change the EU from within. Syriza has failed. And not because Greece is a small country. It would have been the same for any left-wing government in Spain or Italy. Compared to a few years ago, however, we now know why things have gone this way. It is due to the birth of a new centre-periphery structure in Europe with a centre that dominates and does not allow any dissidence. Those who want to change things from the left must begin to fight the European institutions and create new ones.
Can we learn something from Syriza’s experience?
We can learn what’s not to be done. There is nothing positive in this experience. Syriza promised a lot, won the elections and went into government, becoming a mass party. It was said that it was a new form of political organization for the left. But in 2012, when it became the first party of the opposition, and even more in 2015, when it went to the government, there was no internal democracy. Syriza is a machine absorbed by the state that revolves around a leader. He failed to create a new, truly democratic political organization. But he also failed to try to change the economy and politics. It lacked the ability to root itself into the territory. But if you really want to change the world, this is a key issue. Syriza did not do it. And it gave up, turning into a government party. Syriza shows us what should not be done and how it should not be organized.
What is Greece’s situation two years since the signing of the Third Memorandum?
I think there’s been no government more submissive than that of Tsipras in the years of the crisis. They have surrendered completely. They have accepted the target of a primary surplus of 3.5% of GDP for the next five years. It’s incredible. Nobody talks about debt restructuring anymore. They simply hope that liberalizations and privatizations will allow the economy to rebound. With these policies, the Greek economy may perhaps grow or contract a bit, but it will actually stagnate. Unemployment will not be significantly reduced and Greece will become a poor and irrelevant country at the borders of Europe. Inequality will grow, young people will continue to emigrate, the economy will rely on tourism. It’s a disaster.
There’s been a lot of talk about the Portuguese experience with António Costa’s socialist government supported by the leftists. What do you think?
If this is the best the Left can do, then we do not need the Left in Europe. The Left is a political current that has always fought against the powerful powers to build a new world. What is all this about in Portugal? What have they done? They went to the government. They may be able to limit the application of austerity measures. But what do they think will happen? A miracle? Portugal will not grow much. It will continue to be blocked. Like Greece. Do they not have any other ambitions? They will pay a price for this.
What does the Left need to do?
The key question is redefining sovereignty. What does popular sovereignty mean today? But we also need to redefine national sovereignty. Transnational bodies of the European Union work against the interests of workers and left-wing governments and maintain the existing hierarchy in Europe. These are crucial issues as they go to the heart of what socialism can be. To this must be added an anti-neoliberal and anti-capitalist economic program: nationalizing the banks, enhancing public investment, strengthening the welfare state … If you think that these goals can be achieved by changing the EU, it means that nothing has been understood about what has happened in the last ten years. It’s impossible. We must fight the mechanisms of the European Union and the power of Germany. It’s not anti-European what I’m saying. It is not nationalism. We must not confuse the international capitalism that has been imposed in Europe for the last thirty years with the internationalism of the Left and the workers.
Are you therefore in favour of a future European federation?
Of course. The fact that there is no European nation is not a weakness. We are what we are: Italians, French, Greeks … that’s what makes Europe what it is. What we need is not a European demos, but a genuine internationalism. Having said that, it’s obvious that there are many things we can share. And institutions can be built in this regard.
Are you optimistic?
I take Gramsci seriously. [Laughs] I’m particularly optimistic when I look at European youth. If I think about Greece, I am conscious that young people have travelled more and are more educated and informed of all the previous generations. They’re better than we were. We will see what European youth will do in the future. In this, I am confident.
Translation: Revolting Europe