The current Greek crisis is raising serious doubts on the neoliberal model’s sustainability, at least in Europe. The continent is dichotomized between the ostensible technocrats, on the one hand, and the rising public discontent (primarily of the victims) from their austerity resolution, on the other.

The new measures in exchange for another bailout fund include income taxes, privatization of public assets, and cutting pension funds. The creditors are being accused of blackmail and extortion, as their new austerity policies stand in stark contrast to the Syriza government’s radical-leftist party as well as the will of the Greek people, expressed in the recent referendum. The technocratic approach from European politicians is out of touch with the economic crisis Greece is enduring, characterised by continuous financial depression, which has now turned into bare desperation. Austerity has proven its economic failure in debtor countries, yet despite this, European technocrats remain obstinate.

New forms of opposition to austerity are emerging as a result in other parts of Europe, suggesting that the struggle moves beyond Berlin and Athens. For example, a new anti-austerity movement in Spain Podemos (meaning ‘We Can’) is gaining an increasing amount of public support. However, concerns are rising that grassroots opposition movements could also lead to the rise of extreme right-wing nationalist parties.

Jürgen Habermas, the German sociologist and philosopher, noted: Germany ‘unashamedly revealed itself as Europe’s chief disciplinarian and for the first time openly made a claim [to its] hegemony’. Debtor countries are therefore concerned with the erosion of their sovereignty, and as a result, nationalist movements are gaining popularity as they seem to secure a lost sense of autonomy. Noam Chomsky, a renowned intellectual, has defined the current European crisis as a class war; not just in our conventional understanding as a struggle between rich and poor, but at a more political level between those who propose solutions and those who are forced to endure their consequences.

‘What’s going on with the austerity is really class war. As an economic program, austerity, under recession, makes no sense. It just makes the situation worse (…) the policies that are designed by the troika, you know, are basically paying off the banks, the perpetrators, much like here. The population is suffering (…) the so-called welfare state, is being eroded. That’s class war. And there is a reaction to it—Greece, Spain and some in Ireland, growing elsewhere, France. But it’s a very dangerous situation, which could lead to a right-wing response, very right-wing. The alternative to Syriza might be Golden Dawn, neo-Nazi party’. – Noam Chmsky

The Economist Joseph Stiglitz also pointed out that the money which allegedly went to bailout Greece was predominantly given to the creditors: ‘It was a bailout of western banks lending to Greece under the cloak of the name of another country’, suggesting that the well-known right-wing narrative that Greeks are merely ‘lazy and unwilling to work’ is inaccurate.

Furthermore, creditors simply see the crisis as an administrative and regulatory issue, rather than a political-ideological asymmetry based on normative preferences. A recent article by the Guardian showed Germany startled by the media’s denouncement of their stance towards Greece, as they see their position as fair play by the rules that were clearly outlined prior to lending Greece money. This reaction is further evidence of their detachment from the political to the administrative sphere. Slavoj Žižek, a well-known Slovenian philosopher and cultural critic, has expressed his criticism to the troika’s approach of working under the guise of neutrality.

‘This passage from politics proper to neutral expert administration characterises our entire political process: strategic decisions based on power are more and more masked as administrative regulations based on neutral expert knowledge, and they are more and more negotiated in secrecy and enforced without democratic consultation’. – Slavoj Žižek

Paul Krugman, Nobel Prize-winning economist, has furthermore remarked that the question now is ‘Who will ever trust Germany’s good intentions after this? … Being a member of the Eurozone means that the creditors can destroy your economy if you step out of line’. The mistrust is not merely directed at Germany, but more importantly at the political system it represents and advocates, which many now deem unsustainable. It is no longer an economic dispute, these intellectuals argue, as austerity has now long-proven its failure in resolving the economic crisis. It’s a dispute between masked technocratic neoliberalism and its alternatives (whatever forms these may take).

Many however insist that the primary cause of the crisis is not neoliberal orthodoxy, but rather the creation of a monetary union itself, which was ill-advised by many free-market advocates in the first place (whether the English Hayek/Friedman or the American leftist-pro-market version) given that Europe lacked the necessary political cohesion for a single currency to succeed. As free-market advocate, economist Milton Friedman noted: ‘Monetary unity imposed under unfavourable conditions will prove a barrier to the achievement of political unity’. Surely so; the creation of the European Union barely shared anything beside a name and as a result political tensions between member states exacerbated under a single currency. One can also argue that the Euro exacerbated existing problems in the neoliberal model at a more acute and pervasive rate. The difference now is that media and politicians can no longer avoid this issue.

Intellectuals can give us invaluable insight on the Greek crisis and the wider issues it represents. Europe is now characterised by a dichotomy between the neoliberals working under the guise of neutrality and the people enduring the regulatory and administrative consequences. Suffice it to say, the viability of neoliberal technocracy for Europe’s future remains precarious.

 

Sources:

http://www.democracynow.org/blog/2015/7/1/chomsky_greece_s_syriza_spain_s

http://www.theguardian.com/world/2015/jul/14/greek-bailout-angela-merkel-blackmail-athens-opposition

http://www.nytimes.com/2015/07/16/business/international/imf-greece-debt-relief.html?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news

http://www.newstatesman.com/politics/2015/07/Slavoj-Zizek-greece-chance-europe-awaken

http://krugman.blogs.nytimes.com/2015/07/12/killing-the-european-project/

http://krugman.blogs.nytimes.com/2015/07/15/an-unsustainable-position/

http://www.aljazeera.com/news/2015/07/joseph-stiglitz-greece-debt-crisis-150713054357586.html

http://www.theguardian.com/commentisfree/2015/jul/07/greece-financial-elite-democracy-liassez-faire-neoliberalism

http://www.forbes.com/sites/timworstall/2015/07/09/whatever-is-happening-to-greece-its-simply-not-neoliberalism/

http://www.rdwolff.com/content/austerity-and-neoliberalism-greece