Anti-aus­ter­ity show­man fails to mea­sure up

The Weekend Australian - Review - - Books -

As Greek fi­nance min­is­ter, Ya­nis Varo­ufakis presided over a run on the bank­ing sys­tem and in­ten­si­fied his coun­try’s long eco­nomic cri­sis. His poli­cies al­most forced Greece out of the euro, an out­come for which there was lit­tle public sup­port, and which would have caused an in­fla­tion­ary cri­sis and a col­lapse in mar­ket con­fi­dence. He man­aged this in lit­tle more than five months be­fore re­sign­ing in July last year.

For good mea­sure, he alien­ated every pos­si­ble ally among EU gov­ern­ments and earned the abid­ing dis­trust of other EU fi­nance min­is­ters. For all this fail­ure, he is lauded by Europe’s rad­i­cal anti-aus­ter­ity cam­paign­ers.

His new book is os­ten­si­bly an ac­count of how the forces of cap­i­tal have pre­vailed over the com­mon good and of the rick­ety na­ture of Europe’s pur­ported re­cov­ery from cri­sis. But most of all it is an ac­count of him­self and his own vi­sion­ary sta­tus. I won’t mince words. It’s a ten­den­tious and vain­glo­ri­ous book: a mon­u­ment to the dreams of a man whose elec­torate was ex­pend­able in the fur­ther­ance of dogma. “The slide into to­tal­i­tar­i­an­ism is not to be pre­vented,” he tells us, “by tech­ni­cal means ap­plied by face­less bu­reau­crats pri­mar­ily con­cerned with their own ba­nal ca­reers. It can be pre­vented only by a func­tion­ing, healthy democ­racy.”

No prizes for guess­ing who is in the van­guard of this demo­cratic up­ris­ing and who are the ba­nal bu­reau­crats, in Greece and Brus­sels.

The book is also abysmally writ­ten. Varo­ufakis has a sus­cep­ti­bil­ity to va­pid metaphor. It’s not enough to say that eco­nomic pol­icy has trade-offs. He has to talk — in re­la­tion to Bri­tain’s mem­ber­ship of the EU — of a “tug of war be­tween sovereignty on the one hand and the forces of fi­nan­cialised cap­i­tal on the other, [which] has led to a pre­car­i­ous half­way house”.

The book’s es­sen­tial the­sis is that the present eco­nomic man­age­ment of Europe by the Euro­pean Com­mis­sion and the Euro­pean Cen­tral Bank is not some tech­no­cratic, apo­lit­i­cal ex­er­cise; rather it is driven by an ide­o­log­i­cal be­lief in a smaller state. The rules that gov­ern Europe’s mone­tary in­te­gra­tion are, he main­tains, “po­lit­i­cal whims of the strong dis­guised as le­gal con­straints upon the weak. The strong break their rules at will and con­coct new rules when­ever they think it suits them.”

Ac­tu­ally, there’s some­thing in that. It’s true the big­ger mem­bers of the eu­ro­zone have shown tol­er­ance for them­selves in set­ting aside fis­cal tar­gets. But Varo­ufakis over­states his case. He lauds the anti-aus­ter­ity cam­paigns of Jeremy Cor­byn and the Euroscep­ti­cism of Mar­garet Thatcher, in par­tic­u­lar the lat­ter’s ob­jec­tion to the no­tion of “apo­lit­i­cal money”. By this, he means the Thatcherite cri­tique that a sin­gle Euro­pean cur­rency and sin­gle in­ter­est rate man­aged by an in­de­pen­dent cen­tral bank, sup­pos­edly above pol­i­tics, would un­der­mine the ac­count­abil­ity of eco­nomic pol­icy to demo­cratic gov­ern­ment.

(Thatcher is a par­tic­u­lar heroine of his ac­count de­spite his own fash­ion­able rad­i­cal­ism. “My ap­pre­ci­a­tion of her pre­scient cri­tique of the euro’s built-in demo­cratic deficit is par­tic­u­larly de­light­ful,” he gushes — ap­par­ently be­liev­ing that his own po­lit­i­cal stance is what his read­ers are most in­ter­ested in.)

Not every crit­i­cism in this book is in er­ror. Europe’s pol­i­cy­mak­ers took a long time to en­act sen­si­ble poli­cies to cope with the down­turn and there are big ques­tions about whether they can work. The be­lated adop­tion of quan­ti­ta­tive eas­ing was right but has prac­ti­cal ob­sta­cles. Europe’s bond mar­kets are not large or liq­uid enough; the euro was in­deed launched with­out the nec­es­sary in­sti­tu­tions to pool fis­cal as well as mone­tary sovereignty. It’s not hard to list the er­rors of pol­icy and the way the eu­ro­zone falls short of the ideal. Nor is Varo­ufakis wrong to note the ir­ra­tional “deficit pho­bia” of Euro­pean pol­i­cy­mak­ers. Ger­man hawk­ish­ness about bud­gets has been ex­tremely dam­ag­ing for Europe’s econ­omy. But all of these points are sec­ondary in Varo­ufakis’s telling to a grossly over­wrought de­pic­tion of Europe’s rulers as an un­demo­cratic ca­bal — hence his ab­surd ref­er­ences to “to­tal­i­tar­i­an­ism” and the “ser­pent”. In one florid pas­sage he asks: “Does the fact that the Nazis were the first to plan a Euro­pean eco­nomic and mone­tary union — one per­haps too close for com­fort to to­day’s Euro­pean Union — im­ply that the lat­ter was founded on fas­cist prin­ci­ples?”

Talk about a lead­ing ques­tion. Though Varo­ufakis gives the only sen­si­ble an­swer to that ques­tion (er, no), he has al­ready in­sin­u­ated this pre­pos­ter­ous, calum­nious no­tion.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.