Quo Vadis Europa? | Dimitris Rapidis on progressive alliances and EU’s challenges ahead

 

 

Actually there was no decision to suspend Greece’s short-term debt relief measures. There was no such decision taken by any Eurogroup, nor ESM. It was a unilateral, retaliatory action against the mutual decision taken in December 5th Eurogroup on Greece’s debt relief, and against the decision of Greek PM Alexis Tsipras to distribute the one-time relief package to low-income pensioners and freeze VAT rise in the Aegean islands suffering from the massive refugee influxes. 

 

This so-called “decision” was initiated by Eurogroup’s President Jeroen Dijsselbloem though his spokesperson, and announced on Twitter (!). Therefore the reaction of EU officials and European Parliament’s leading figures in favor of the Greek government was expected.

 

Broadly speaking, the “suspension story” is a major blow to Eurozone’s institutional capacity, accountability and transparency. It is also a proof that some political circles inside Eurozone want the Greek government to fail, even if it abides by the program and over-performs in fiscal targets. These circles do not respect their part of the bailout deal, develop a biased and monolithic approach on financial policy, missing to interpret the growing grievances of the Greek and European electorate and the need to develop growth-oriented, flexible, cohesive policies.  

 

 

There is a big initiative taking place in the European Parliament called “Progressive Caucus“. It is a group of MEPs from GUE/NGL, S&D and the Greens, collectively working to shift balances within the European Parliament. So far, the major actions of the group have focused on CETA and the Greek fiscal consolidation program. In the coming months, the Caucus will develop more actions and keep fostering cross-party synergies, providing policy-oriented alternatives. 

The current circumstances and balances in the EU and Eurozone turn the creation of alliances between progressive forces an utmost necessity. There are different ideological approaches, concerns and debacles, but there is a growing effort to emphasize on issues that unite these groups rather than the issues that divide them. 

 

Nonetheless, the Socialists should work harder and start materializing their fundamental ideas rather than hitting around the bush. In addition to that, the role of the European Left should become more precise and active in the making of new politics in Europe, assuming the responsibility to preserve the founding principles of the European establishment. 

 

As political crises unfold and multiply, there are two distinct options merging in the mainstream debate: on the one side there are the populist far-right forces that want to broaden their own space and foster nationalism and division; on the other side there are those progressive forces that attempt to articulate an alternative approach. These forces have been gathered around the initiatives assumed by the radical left-wing forces in Europe, with Syriza party pushing hard for positive developments on that field.            

 

 

The European Institutions are generally positive on dealing with Greece’s debt relief, although there is growing concern that positive development for Greece’s debt will trigger similar requests from other debt-stricken Eurozone member-states, like Italy, France, Spain, Portugal and Cyprus. This is the reason why ESM is not generous on providing essential debt relief, whereas the German government, being the biggest European creditor of Greece, remains reluctant to more efficient relief. 

 

As of the IMF, it calls for more efficient debt relief measures in exchange for additional austerity measures that would further weaken wages and pensions, lowering public spending. This was always the policy of the Fund globally: minimize the state and dismantle the labor market to turn labor cost and cost of investments cheaper. Precisely for Greece, IMF is behaving as a lender of last resort, developing two parallel scenarios: either waiting in the corner to see the review and the negotiations fail and step in, forcing Greece to adopt additional austerity measures; or waiting for the Greek bailout to fail in 2018 and step in as the only funding source following Grexit, imposing, again, austerity.  

 

For these reasons, it is of paramount importance for the European Institutions to have a firm stance in the Greek issue, being committed in the success of the fiscal consolidation program and the return of financial normality in the country with sustainable growth rates and primary surpluses.  

 

 

Italy is in worse position comparing to Greece, taking into account the size of the market, the debt of the banking sector and the degree of economic expansion. Peppe Grillo’s Five Star Movement is doing pretty well in polls and should snap elections take place, it might well increase chances for a win, thus causing another big headache for the conservative, short-sighted establishment in Eurozone. 

 

As of Germany, there are some promising developments that could shift the course of the EU. A possible coalition between SPD, Die Linke and the Greens might be the answer against the ultra-conservative duo of CDU-CSU. This also depends on the performance of AfD which, according to the latest surveys, seems to increase gains and attract xenophobic parts of the German society used to find shelter in CSU.

 

In France, things seem more complicated. A landslide of Le Pen seems a distant scenario, but the win of far-right still looms over the country, as any other political alternative, except for Macron, seems dull. 

 

It is very difficult to see where things are going, but it is certain that we are entering a very challenging year. Along with Trump administration in the United States, the refugee crisis, the Syrian war, the Russian upsurge in power politics, and the nuclear race in the Pacific, there is no historical evidence that we could drag experience and knowledge. 2017 will be a shifting point for the European project  – for good or for bad.

 

*Interview by Nikolas Nenedakis