Greece: conflation, contradiction and conflagration

by George Hatjoullis

Conflation seems to be the order of the day. The most striking is between democracy and sovereignty. These two concepts are not synonymous but they are being used as such in the Greece debate. It is unclear whether it is deliberate, ignorance or simply intellectual laziness. Probably a little of all three. Tsipras has presented the debate as democracy versus autocracy. This conflates democracy and sovereignty. Greece joined the EU and the eurozone of its own free will. Indeed it was so keen to join the eurozone that it lied. Much of the mess today originates in this lie. The European Commission has some complicity as it either failed to spot the (rather obvious) lie or turned a blind eye. Joining both the EU and the eurozone requires giving up some national sovereignty. The degree of sovereignty given up has increased but it has done so through a democratic process. Not convinced? See my blog Democracy in the EU. The loss of sovereignty means Greece has obligations within the ‘rules of the club’. It cannot just flout these rules because the government has changed and has different ideas. The issue for Greece is about sovereignty not democracy. The EZ and EU are democratic.

Some will argue that Greece gave up sovereignty without asking the ‘people’ . The same claim has been made in other member states. I would agree. However, this failure of democratic process was domestic and not at the EU or EZ level. This is a domestic failing. The same point applies in the UK. The EU is accused of having a democratic deficit. Really? UKip got four million votes and one seat at Westminster. In the European parliament they are the largest UK group of MEP. It is Westminster that has a democratic deficit not the EU. Power within the EU sits with the Council of Ministers and the European Parliament. Both are elected through democratic process. They impose rules on members that supersede national sovereignty but it is entirely democratic. If you want complete national sovereignty (whatever this might be) leave but do not claim it is about democracy.

So why has Syriza used the conflation? My guess is that if it admitted it was about sovereignty it would have less appeal. Intellectually lazy people find it easy to hate the EU/EZ because of the alleged democratic deficit. It is a nice modern myth. To admit it is about sovereignty exposes Syriza to the response that perhaps Greece should leave. Sovereignty is not quite such a powerful propaganda tool if the majority do not want to leave.  A democracy-attack also fits better with another conflation, namely anti-capitalist. Syriza has managed to generate a conflict between democratic socialism and autocratic capitalism. Quite impressive really but ultimately self destructive. This said, the characterisation is not entirely without validity.

The first Greek bail out was entirely about European banks and not the Greek people. The deal switched Greek debt from the banks to governments and supranational organisations. The banks could not cope with further capital losses at this stage, soon after the crisis of 2008. It was a bad deal for Greece which should have simply defaulted there and then. It was mystery to me at the time why they did not do this and one can see how the capitalist conspiracy idea has grown from this omission. Greece was later allowed to default on the remaining private sector debt but not before the banks had had a chance to adjust. Moreover, Greece was then told it could not default on the official debt, which had increased enormously. Successive Greek administrations made some very unwise decisions that led to the present situation. Nevertheless, this is not about capitalism as such but an economic system that relies on private sector banks to create ‘money’. Iceland is considering another way of generating ‘money’, within an essentially capitalist system. Once again let us not conflate concepts. I have some sympathy for the Iceland experiment, and for reform of our monetary systems, but this is not anti-capitalist.

Greece is also confronted with a huge contradiction. the IMF is contradicting Berlin. The IMF is of course correct but Berlin is unmoved. Berlin clearly has an agenda and it is not Greek-friendly. The institutions are thus conflicted and this conflict has led to contradictions and confusion. The Greeks feel they have been unfairly treated (which is quite true) but do not want to leave the EZ (which is quite sensible). They are frustrated because they are virtually powerless to affect their fate, except to make it worse.  The solution, as I keep saying, lies in rebuilding trust but this is not happening. Instead, we have yet another contradiction with pensioners likely to vote Yes in the referendum even though pension cuts was one of the Syriza red lines. The young, full of energy and passion (especially on a Friday night), are for taking on the ‘forces of darkness ‘and voting No. Greece is heating up and close to conflagration. It needs cool heads on all sides. I do not see many.