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Europe

May 16, 2012

Rundle: Greece is now the cutting edge of the world

Greece is a harbinger of what will happen not merely in Europe, but across the world over the next decade as the vast global superbubble of neoliberalism slowly deflates.

“Everything’s fine out the window … oh no, look, I can see society collapsing,” said Paul, a French-Greek journalist working in Athens. Out his window is Ermou, the wide shopping street that leads down to Syntagma Square. I’d phoned him to see what was going on, and to check the “Greece in turmoil” line that has become de rigeur in the official coverage of the crisis.

Paul didn’t need much of an invitation to take the piss out of that line. What has happened in the development of the Greek-European crisis — and the inter-connected coverage of it — has been extraordinary, but also indicative of the topsy-turvy world of capitalism, finance, and its relation to everyday life. It is a lesson worth following closely, because Greece is a harbinger of what will happen not merely in Europe, but across the world over the next decade as the vast global superbubble of neoliberalism slowly deflates.

Six months ago, Greece really was starting to fray — due to the determination of the two major parties, PASOK and New Democracy, to impose the austerity measures of the EU “memorandum” no matter how stupid or self-defeating — and the deep frustration of the public at the impasse between the political system and popular feeling.

But then, after six months of “technocratic” rule (really, EU satrapy), an election was held, and lo and behold, the hold of the major parties was broken, and new forces — Syriza, a leftist outfit, and Independent Greeks, a right-wing nationalist breakaway — managed to break through, gaining about 50 and 30 seats respectively. The vote may have scattered across several parties but the result was clear — 60% of votes went to parties that rejected the terms of the memorandum. At the same time, 80% of Greeks want to stay in the euro and the EU. They reject the old parties, but they also reject the notion that the only way to square away the debt is needless pain enacted for largely ceremonial purposes.

So, in other words, the people’s desires have entirely transformed the structure of Greek politics. Or, as it might otherwise be called, democracy. For surely, if democracy means anything, it means the capacity of a vote to up-end everything. In any real democracy, the party structure should collapse and recombine every 25-30 years or so. Large parties are, after all, coalitions of temporarily united values and interests. When the circumstances change, so should they.

That is what has happened in Greece. Rather than the shell-game of finance capitalism dictating the terms, people have made a fairly clear statement of what they want — the social-political has come to the centre of society, as it should. What the morons who constitute the ranks of financial journalism call “chaos” is really the exact opposite — it is politics, people expressing their will in a non-violent form, and then trying to negotiate an arrangement between differing manifestations of ideas and interests.

Chaos, by contrast, can be seen on the screen on every finance trader across the Western world, where stocks, shares, currencies move according to no rational basis, driven by the echo chamber of rumour. The idea that the business of everyday life should be governed by these processes rather than by the rational activity of production for use, indicates the nihilism at the heart of the market, its alliance with dead matter — numbers, money, power — rather than life.

The Greeks have rebelled against this. It looks like their rebellion will continue — with the failure of the latest attempts to form a coalition government the country is going back to the polls. Syriza, the left coalition that had taken 5% of the vote in the last election, and 17% in this, is now polling in the mid-twenties.

Such a result — if it occurred in the new elections, to take place in mid-June — would give Syriza the 50-seat bonus still in place. That would give them about 120 seats out of 300. Presuming that Democratic Left retained 10 seats or so — they would lose some seats back to Syriza — then there would be extreme pressure on Independent Greeks — the right-wing breakaway party — to support Syriza in their shared belief, a rejection of the austerity measures contained in the second memorandum.

That would deliver a government expressing the popular sentiment — in Europe but rejecting the memorandum. That is the scenario — a rational democratic one — that finance journalists call “the nightmare”. It is, but not in the manner they suggest. The truth is, that if Syriza forms government while rejecting the memorandum, but refuses to unilaterally leave the euro, then it is really Europe’s problem, not Greece’s. The usual groupthink that has everyone writing articles as to how Greece will leave the euro next week, etc, fails to take account of the fact that there is no easy way to expel a country from the eurozone. The onus is on the EU to do the expelling.

So everything from here on is uncharted. The technocratic Greek government — which remains in place — paid off an €5 billion-plus bond issue that came due today — but interest is due on hundreds of billions of euros of debt in the next month — much of it euro-debt — and the country has less than a billion euros in foreign reserves. So the EU would have to decisively refuse to underwrite the next series of payments — which would simply go from one euro account to another — in order to force the crisis.

The sensible solution would be the one proposed by new French President Francois Hollande — that bad Greek debt be swapped for eurobonds, and that the private debt take an 80-90% haircut, and that a rational 10-20 year paydown of what debt remains be negotiated without strangling the Greek economy — which would then shrink the economy further, and make it impossible for the country to repay its debts. It is utterly irrational, but so too is neoliberalism — it is the equivalent of the Incas believing that only human sacrifice would keep the sun rising, and that the advance of the conquistadors meant that they should redouble their efforts of tearing hearts out of chests on the top of ziggurats, rather than responding to the immediate threat in a rational and direct manner.

Every number quoted by the finance journalists — the hundreds of billions of euros owed, the terms coming due — are all bullshit. All that is due is the interest payments, and most of those are ludicrously inflated by the shell-game that got Greece into this mess in the first place — the sudden downrating of Greek debt by ratings agencies part-owned by the very banks that would profit from a hike in interest rates in the first place. Most finance journalists are simply unthinking propagandists of a system they have neither the intelligence nor the desire to examine.

Greece is now the cutting edge of the world. And Syriza is the most advanced political expression around. The party that the finance journalists call “strident” and lump in with the Nazi freak-show of Golden Dawn, is in reality an expression of the rationality within modernity — the idea that complex systems such as finance capital should be tools of humanity, rather than vice versa. People who think that the world can be covered by noting the movements of the FTSE, the Dow and the Kak better get used to what is happening in Greece, because it will soon be happening elsewhere.

Of course, with a month before the new elections, it is always possible that the voters in Greece will return to a mainstream pro-memorandum party, guided by fear. Should that occur, the relationship between the polity and the people will be sundered afresh, and everything up to civil war will have happened. Should Syriza triumph, then history will have happened, and Europe, the markets and their trailing sycophants in the financial press will have to adjust. Look away from the screen and out the window, and you might see the world.

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28 comments

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28 thoughts on “Rundle: Greece is now the cutting edge of the world

  1. cairns50

    fantastic article, the pity is 99% of austrlians will not read it

    and more importantly the politicians that do read it as surely there will be a fw of them

    will simply take no notice, i can already imagine there utterances

    “oh just another rant by a raving left wing journo”

    bravo guy

  2. cannedheat

    So true but be prepared for ‘something else’ to happen. Dysfunction has infinite variety.

  3. puddleduck

    Fabulous article Guy! Should be on the front page of the major dailies.

    Democracy. Who’da thunk it?

  4. kookla

    Guy Rundle – you are brilliant and so right. You seem to be on the same path as David Graeber’s Debt: The First 5,000 Years which everyone should read today!

  5. form1planet

    Brilliant article Guy. So weird that such a basic concept – that the economy should serve humanity instead of the other way round – is so radical. We seem to operate under the notion that we are helpless slaves to the whims of the market, but the laws of thermodynamics (y’know, the ones that cause climate change) will meekly do our bidding.

  6. Frank Campbell

    “Most finance journalists are simply unthinking propagandists of a system they have neither the intelligence nor the desire to examine.”

    What a surprise. If they did, they’d be unemployed.

    But Rundle didn’t examine the system either. Only now, when it’s patently obvious that Greeks won’t tolerate paying for casino capitalism forever (5 years so far for Greece), does he elect Greece as “the cutting edge of the world”. The European souffle has been sagging slowly since 2007. No solutions from the Left yet- coopted as it was into the system- and no certainty that the Greek Left can offer coherence either.

    Let’s see some analysis of Syriza ideology and policy, not just Rundle bombast.

  7. Jimmy

    All Australians should read this article and ask themselves why they want to pursuit the same “expansionary austerity” rubbish proposed by Abbott that is being rejected in Greece when we have such low debt levels that they can’t evenuse that as an excuse.

    Also when considering the line “Chaos, by contrast, can be seen on the screen on every finance trader across the Western world, where stocks, shares, currencies move according to no rational basis, driven by the echo chamber of rumour.” People should look at the CBA’s profit and share price now in comparison to it’s profit and share price pre GFC.

  8. Mark Heydon

    Agree with the above posters, an excellent article with so many gems in it.

    “Chaos, by contrast, can be seen on the screen on every finance trader across the Western world, where stocks, shares, currencies move according to no rational basis, driven by the echo chamber of rumour. The idea that the business of everyday life should be governed by these processes rather than by the rational activity of production for use, indicates the nihilism at the heart of the market, its alliance with dead matter — numbers, money, power — rather than life.”

    Why do so few understand this?

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