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The Greek CrisisPolitics, Economics, Ethics: A Debate

held at the Birkbeck Institute for the Humanities, Birkbeck


College, University of London, 5 May 2010

Costas Lapavitsas

Journal of Modern Greek Studies, Volume 28, Number 2, October 2010, pp.
293-310 (Article)

Published by Johns Hopkins University Press


DOI: https://doi.org/10.1353/mgs.2010.0422

For additional information about this article


https://muse.jhu.edu/article/399673

Access provided by University Diego Portales (1 Sep 2017 02:29 GMT)


The Greek Crisis
Politics, Economics, Ethics
A Debate held at the Birkbeck Institute for the
Humanities, Birkbeck College,
University of London, 5 May 2010

Costas Lapavitsas

Its a pleasure to be here, but not under these circumstances, obvi-


ously. Id like to thank Costas Douzinas for organizing the event. What
I intend to do here is to give you very briefly some elements of political
economy of the current crisis from a report we put together in March
with research funds at SOAS (School of Oriental and African Studies)
on money and finance in relation to the Eurozone. Then I want to
talk about the broader political issues invoked in this terrible situation
unfolding in Greece and more broadly.
What has caused this crisis? What are the more proximate causes
of this crisis? Id like to argue that there are two. The first has to do
with the structural nature, the structural bias of the Eurozone stemming
from the way the Eurozone has been set up. I dont mean by this the
contradiction between a unified monetary policy and a fragmented fiscal
policy. Ill come to that, but thats not what I mean. What I mean is that
the Eurozone has quite clearly become an area of structural generation
of surpluses for the core countries, Germany fundamentally among them,
and deficits for the rest, primarily the periphery. These surpluses appear
on current account, and then they become transformed into export of
capital in the form of foreign direct investment or bank lending (by
German firms primarily) to the periphery and elsewhere. In short, the
Eurozone has become an area of almost complete German domination
when it comes to current account. This is an unprecedented periodand
it isnt just in the Eurozone; there are the surrounding areas of Europe,
but the Eurozone is at the core of it.
The reason why this has happened is no mystery. Loss of

Journal of Modern Greek Studies 28 (2010) 293309 2010 by The Johns Hopkins University Press

293
294 Costas Lapavitsas

c ompetitiveness on the part of peripheral countries is fundamental to


this. This loss of competitiveness, again, is no mystery. Its got nothing
to do with German efficiency, German technologies, and so on. It has to
do primarily with the very high rates of exchange with which peripheral
countries joined the Eurozone, ostensibly to keep inflation down. But
more than that it has to do with the eye-watering, incredible wage sup-
pression in Germany itself. It has to do with the fact that the German
ruling class, the German employers, have been incredibly successful at
keeping wages down, something that has been tried across the Eurozone,
but with particular success in Germany for reasons [relating to] the politi-
cal economy of the country itself. As a result, Germany has been able
to gain competitiveness throughout this period, and it has managed to
create, to generate, structural surpluses in the Eurozone. The Eurozone
has become a mechanism for German domination of much of Europe.
The second reason for the current public debt crisis has to do with
the gigantic financial crisis that emerged in 2007, which then became a
recession by 2009. The state suffered from this for two reasons. First of
all, because the state across Europeto a lesser extent in Greece, but
clearly across Europerescued the banks, and rescuing the banks is a
very expensive business. More fundamental than that, however, is the
fact that the recession that followed crushed tax revenue. As a result,
state finances began to go into deficit and state debt began to rise. In
other words, the public debt crisis, which is happening in front of our
eyes in Greece and in the rest of southern Europe, has got nothing to
do with state profligacy, a sudden wild bout of expenditure on the part
of the Greek State. It follows from these two structural events, causes
that I have already explained.
Why Greece, though? If these are general causes (and I think
they are), they apply to the periphery, as we show in this report. Why
Greece? Again there is no mystery. First of all, the productive structure
of Greecethis structural imbalance between the core and periphery of
the Eurozone that Ive already mentionedis particularly weak. Of the
sixteen countries, Greece has suffered very severely from this contrast,
as you can see from the current account deficit, which has been gigantic
(1516% of GDP) and clearly unsustainable.
The second reason is, of course, the weakness of the state. The
crisis allowed the internal weaknesses of the Greek State to become clear.
It hasnt been caused by that. Because of these factors, the weakness
of the state, which we all knowcorruption, clientelism, inefficiency,
inadequacies, the lack of a welfare state, the lack of an ability to tax the
richcame to the fore.
The third reason for Why Greece is, of course, the fiddling of the
Interventions: The Greek CrisisPolitics, Economics, Ethics 295

figures, a systematic fiddling of the figures of a particular type, so that


the country lost credibility in the international markets.
The fourth reason for Why Greece is the small size of the country
and its public debt markets. You can speculate against Greece; its easier.
You cant speculate so easily against Italy; its much larger. So if youre
a speculator, and youve seen these structural weaknesses, you will pick
on Greece in the first instance.
These I think are the reasons for Why Greece. But theres some-
thing else, too, which has come out of this particular Greek turn of
events, which has to do with the nature of the Eurozone, and which has
become clearly a political reason. Not simply in terms of the surpluses
and deficits which Ive mentioned to start with, but in terms of the way
in which this monetary union and the broader economic and political
union have been set up. There is, of course, the contradiction between
singular monetary policy and fragmented fiscal policysixteen states
competing against each other for funds and one central bank managing
the money market. Theres more than that, however. This central bank,
as it became very clear, made its main task to rescue the banks. When
the banks were in trouble in 2008, the central bank, the ECB (European
Central Bank), pulled all the stops to rescue them (in terms of liquidity,
provision, and so on). When states were in trouble in 2009, the central
bank stood on the sidelines and simply watched. It did that because of
how it has been set up, reflecting the nature of the hierarchy of power
within the Eurozone, among the Eurozone states. When the central
bank actually intervened, when they actually agreed to provide money
to rescue temporarily the Greek State, they only did it fundamentally in
order to rescue French and German banks. The 120 billion Euros that
were made available were obviously aimed at preventing a bank collapse
in the core countries.
One more point about the crisis and what it reveals and where
it comes from. The crisis also reveals the social failure in Greece. This
social failure, again, is not of the type people talk about, which is that
Greeks are this, that, and the other; theyre corrupt, theyre crooks, and
so forth. The crisis shows that the Greek ruling class has failed, and has
failed in a profoundly historical sense. This lot of people, who has basi-
cally taken the lions share of political power and economic power in the
country for decades, has actually shown itself incapable of succeeding in
the European markets. It has shown itself incapable of sustaining invest-
ment. It has shown itself incapable of actually devising an independent
economic policy at all. It is being pulled and dragged. Its a sorry sight to
see the Greek ruling class the way it looks at the moment. It is unable to
formulate a strategy that will actually be in any way different from what
296 Costas Lapavitsas

Brussels demands that it should be. The failure of the state reflects the
failure of the ruling class at the moment. The state depicts and reflects
the ruling class. Its society has failed. Its class has failed, and its state
has failed as a result.
What will the measures do? What will happen? The measures are
disastrous. Theyre not only disastrous because they take away so much
income from people and impose taxeseveryone can see that. More
fundamentally, theyre disastrous because there is no way out if these
measures are followed. It doesnt require science or economics to under-
stand this. Consumption is declining. Investment is weak and falling in
the climate of uncertainty. Exports, which are not a particularly large
part of aggregate demand, cannot rise as a result of devaluation. Where
will growth come from? It will not. So the most likely outcome is deep
recession, and its result is, of course, default. Default is almost certain.
I dont believe the Greek State will avoid default, probably in 2011. The
money that has been given simply buys time, and it buys time to rescue
the French and the German banks and possibly prepare some defenses
for the Portuguese and Spanish economies. The Greeks are doomed in
that respect.
The real question is how will default be handled. It isnt whether
it should happen. There are people on the left who think, lets go for
default; they think this is a revolutionary and radical position. Actu-
ally its not, because defaulting can happen in many ways. Default can
happen by being managed by the IMF. Default can be managed by a
conservative Greek government. If we want a radical position in this,
weve got to demand that default is managed in the way that is in the
interests of the broad majority of Greek people. That default actually
opens up new paths for the Greek economy and breaks the deadlock
in which it finds itself at the moment. I would argue, then, that default
must be accompanied by a policy of exit from the Euro. The Eurozone
has been disastrous, for reasons I have touched upon, and I think that
there is no future for Greece within it. I think exiting from the Euro is
a position the left should seriously consider. However, if there is an exit,
and a default to accompany it, obviously other measures must be taken
very quickly because its clear that the banks will find themselves in a
bankrupt position. Banks will have to be nationalized. There can be no
ifs, ands, or buts about this. If that were to happen, other parts of the
national economy will have to come under public control, because either
they will go bankrupt themselves or their conditions of existence will be
severely affected. What that would betransport, energy, and so onis
for the left to work out. We need a program and a strategy on this.
The next thing that should happen is capital controls. If you have
Interventions: The Greek CrisisPolitics, Economics, Ethics 297

any program, any set of actions of this type without capital controls, it
will drag its feet. It will not be able to work. Next, there must also be
protection of workers income from the impact of exit from the Euro.
Finally, some kind of industrial policy must be put in place and some
kind of path to development, some kind of growth, must be worked out
to move the economy away from the situation of 7172% consumption,
next to no investment, and a huge current account deficit.
All these things, of course, cannot happen without some kind of
destruction of the state. The present Greek State is completely incapable
of delivering these changes. Were talking about profound political
change that will produce a state that can tax, a state that can transfer
income, a state that makes income and equality an important consid-
eration in how it operates, and tries to effect some income distribution
that Greece needs very badly.
Who will do all this? Clearly there are social and political require-
ments. A different alliance of social classes needs to go closer to power
in order to affect a shift of power away from capital and towards labor.
The social layers that hold power in Greece are bankrupt at the moment.
However, there are clearly working class layers in the cities, huge small
business type, professional type layers in both city and country, and of
course farmers, who are desperate for an alternative policy, desperate for
a social alliance that would bring some kind of shift out of the current
deadlock. A social alliance, then, of this typeand I believe with working
people being the natural leader in this. Politically, that would require
a front, a political front. The left must be at the heart of it. Unless the
left comes up with these ideas and suggestions, no one else will. The
left must go beyond its own weaknesses, beyond its own factionalism and
all the rest of it, which you know very well; it must position itself in the
center of a broad front that can take on the measures that are being
imposed on the Greek people, and begin to develop the alternative
program that I suggested.
Is this likely? Actually its more likely than you think. Things at the
moment are careening out of control in Greece. People are looking for
alternatives. Theyre not moving to the left necessarily, but theyre looking
for alternatives. They are open to radical ideas. If they dont find them,
and if the left cannot come up with coherent alternative ideas, they might
go to the right. They might do something else. Therefore the time is
now. It is for the left to work out how to take advantage of it.

SCHOOL OF ORIENTAL AND AFRICAN STUDIES


298 Kevin Featherstone

Kevin Featherstone

We do have a debate here. Because there are a number of points that


Costas has just made that I would disagree with. Why has Greece entered
this crisis? I think what made Greece vulnerable cannot be divorced from
the domestic conditions. It was ultimately, I think, a crisis invented in
Greece. It was a comfortable blame shift away from the general public
and the workers to a Greek ruling class, a European Union, interna-
tional capital. There is a list here that we could extend; a blame shift
away from society as a whole. It has nothing to do with state profligacy.
Sorry, I had understood that the debt to GDP ratio since 1993 has been
consistently around 100% of Gross Domestic Product. How could a state
sustain those levels of debt and not be vulnerable? Costas Lapavitsas
has also indicated theres no way out of the crisis unless these measures
are followed. He mentioned the extensive nationalization, an autarchic
position. Greece has a number of constraints which are accepted across
the political spectrum and across most of Greek public opinion. If you
wish to exit the EU, if you wish to exit a relatively liberal international
economy, well okay, but that is a different debate. In the conditions that
we find ourselves, Greece has to learn to live with constraints.
So how did Greece get into this position? I think it does ultimately
stem from the nature of the Greek State, which Costas mentioned. I think
there we can agree with all of the usual combination of factors that we
are aware of: politics of rent seeking, of rousfeti (bribes), of clientelism,
all of these are a growth of the state in a society in which there was no
constituency to limit the growth of the state.
Greece is therefore on its way to being a failed state. I agree there
is a continuing risk of default. I agree that there is a continuing risk
of the debt having to be restructured, of investors accepting haircuts
on loans to Greece. Weve seen the response of the international mar-
kets to the recent package. It may not be enough to give Greece the
assurances it needs. But nothing to do with state profligacy? I thought
that the relationship that the state has to wider society, and the wider
economy, is fundamental to the nature of the crisis that we have at the
moment. To bring it down to the most crude of examples, rousfeti poli-
tics, clientelism, etc.no one forces people to accept a bribe, no one
forces people to insist on bribes being offered. This is clearly a context
in which petty corruption, sometimes larger scale corruption, has been
tolerated. The state has become obese because of party, political, and
Interventions: The Greek CrisisPolitics, Economics, Ethics 299

clientelistic reasons. There is a cultural setting here, which has led to


the profligacy of the state.
But what have we learned about the Euro and the Eurozone? I agree
that whilst the crisis has been largely invented in Athens, it has been
greatly weakened by the inaction and the divided signals of Eurozone
leaders. The EU and the Eurozone have created the risk of contagion to
the so-called PIIGS (Portugal, Italy, Ireland, Greece, Spain). I agree that
the German stance in particular has been confusing and apparently self-
defeating. Germany consistently has reflected a position of auto-liberal
economics, a belief, an assumption that discipline cannot be imported;
it has to be nurtured, grown at home. I agree that Maastricht and the
design of the EU had a fundamental design problem from the very begin-
ning. The risk of establishing an economic and military union, which is
mostly a monetary union, without a European monetary fund, made the
system vulnerable. These limitations were foreseen at Maastricht, but the
solutions were ruled out by Germany. Germany, I think, is now bearing
the cost of the narrow vision it had for EU at Maastricht.
I also agree that Angela Merkels delay, all apparently because of a
few votes in North Rhine-Westphalia, has plunged the Eurozone into a
crisis. I cannot believe that any previous German chancellor of the postwar
period would have acted in such a small-minded, narrow-visioned fashion.
Belatedly, Merkel and Eurozone leaders have committed themselves to the
loan. Political credibility is clearly now on the line, for presidents are not
gurus. You can think of the difficulties of governments in Europe trying
to defend themselves against markets with, say, Black Wednesday here
in the UK in 1992, then later in August of 1993 for the wider exchange
rate mechanism and the wakeup of the ERM at that time. In each of
those cases, we could note from the history that Germany has behaved in
a way which has implied preference for a smaller Deutsch Mark zone. I
suspect that that is still the case today. That its not only just the German
stereotypical prejudices against lazy Greeks, but rather that Germany has
realized that the Eurozone is fundamentally flawed, and that German
interests are better served by a smaller Eurozone, something of the kind
of Deutsch Mark zone of the early 1990s.
Can Greece implement reforms and get out of crisis? We have
a failing state and a state that seems to be barely fit for purpose. The
crucial core functions of the state expose the inadequacies of the admin-
istration, if you think of the system of budget managements within the
Greek government, a chaotic, archaic system of management. In 2009,
budgets consisted of 14,000 separate budget lines. The difficulty of trying
to control spending, of having sufficient and reliable information in this
300 Kevin Featherstone

context, is tremendous. How much does Greece spend on education?


The answer tends to be, it is the amount of money spent by the Ministry
of Education. That is not exactly the answer to the question. What we
have is a system that is incapable of monitoring spending, coordinating
spending, and this now in a context in which budget time is of utmost
importance.
Greece, of course, has little experience of financial auditing and
the evaluation of public spending. Here in the UK, a couple of weeks
ago, we had major controversy as a result of a report published by the
Institute of Fiscal Studies. Oh for the want of an Institute of Fiscal Studies
in the Greek context, something which inculcates debates about where
the state is spending, the usefulness of that step, of that expenditure,
the rewards from it! If you think now in terms of the number of posts in
the public sector, the idea that the Greek State doesnt have an accurate
understanding of how many people are required in the wider public
sector as a whole, it is a fundamental dysfunction in terms of budget
management and audit. Also if you think in terms of the current fash-
ionable focus on opening up the closed professions, how well does the
Greek State know about these closed professions? Can it identify them
and know how to re-regulate them? We have a system within government
of very poor coordination and very weak centralization. We have a gov-
ernmental system which is full of paradoxes, a system which emphasizes
ministries and ministerial domains, a system in which the cabinet is very
weak; a prime minister that, in formal terms, is tremendously powerful,
but who lacks the resources to coordinate and direct.
You have the sense, when we look at the Greek system, of political
leaders being in government, but not necessarily in power. Not fully
in power. Of a machine in which those at the head of the administra-
tion lack the levers, the information, the resources, to provide effective
management. This must undermine our confidence in the ability of the
machine to implement the necessary reforms.
What is the alternative here? There is an emphasis that Greece
could readjust its policies and could leave the Eurozone, that it could
nationalize various industries. What is the effect of leaving the Eurozone
in this context? It would be financial Armageddon coming at full speed.
The idea that Greece could exit the system and then deal with the chaos
of state employees, benefits, and operations not being funded, is, I
think, not one that we could perceive being managed at all effectively.
So Greece leaving the Eurozone is not a realistic proposition. Turkeys
voting for Christmas comes to mind in this context. The measures are
extremely difficult. If we were trying to explain why Greece got into
this messand a mess it iswould we say that it has got into this mess
Interventions: The Greek CrisisPolitics, Economics, Ethics 301

because of external problems, etc? The imbalances within the Eurozone,


the structural benefits that Germany enjoys? Yes, to some degree. But
would we not say (and have I not heard generations upon generations
of Greek scholars emphasizing to outsiders like myself) that problems
within Greece stem in significant part from the nature of the Greek State?
That is, its clientalism, its corruption, its rousfeti, its profligacy, and state
expenditure? I dont think in this context we can deny, in other words,
that we have a crisis which was ultimately invented in Athens.

LONDON SCHOOL OF ECONOMICS

Peter Bratsis

Since it looks like our presentations will take more the form of a debate
than we thought originally, I think I would like to challenge some of
Kevins arguments and assertions. First of all, we have in the current
discourse on the crisis in Greece certain contradictory arguments
about why the PIIGS, as Kevin alluded to them, are all in crisis. PIIGS
is a troubling term for many of us. That it can be printed freely in the
New York Times, Wall Street Journal, Financial Times, is itself a sign of the
routinization of racism. Why are the PIIGS, like the Greeks, pigs? They
are pigs because they cannot control their urges. They cannot refrain
from immediate satisfaction: an easy job, retirement at 42, with a beach
house and maybe a chalet in Switzerland (if they have at least been a
member of Parliament). As opposed to the good white people who are
civilized and trained and can work dutifully up to at least 73 and 74 years
old and pay more than their share of taxes for the Greek citizens. Their
answer to the Greeks and the other PIIGSwho will, Im sure, have a
similar crisis in the near futureis clear: you expect us to sacrifice our
immediate wellbeing for you? You expect us German taxpayers to pay
our tax money to you lazy people? If civilized means we sacrifice our self
interests, or at least the immediate self interest, for longer term collec-
tive good, then the Germans very happily (if they were really civilized,
unlike the PIIGS), should say, yes, please; here take this money, you
need it, we are willing to sacrifice. But they dont say this because they
are pigs like the Greeks.
Secondly, the idea that corruption and clientelism are the sources
of the crisis is a completely ideological, metaphorical understanding of
the problem. It goes back to the old colonialist idea that the cause of
302 Peter Bratsis

poverty in the south is because the people are not hardworking enough,
not civilized enough, and corrupt in general. Why? Corruption in the
case of Greececlientelismis not qualitatively different, from the stand-
point of how public policy is made, from what happens in London or
in Washington or in Paris or Berlin. If corruption is a problem because
private interests infiltrate the policymaking process and result in policy
decisions based more upon private good rather than public wellbeing,
this is no different than the way the city of London controls the British
Parliament. One could argue that the difference is that in Greece, these
processes are personalized. In the eyes of the good white Europeans, it
looks like being dirty. From the standpoint of public policy in general, it
is difficult to argue that one system is inherently better or more efficient
at creating policies that are good for everybody. Public policy in Greece is
very bad. Its not because of clientelism, however; its not because private
interests are able to easily enter the public sphere, because thats also
true here in London. Its also true in Paris.
In the popular understanding, the Althusserian idea of the sponta-
neous ideology of the crisis is related to the racism, ethnicity, the dirty and
the clean. And this is, in my mind, a sign of the failure of the European
project. Lets keep in mind that the European project, as it was conceived
initially, was not simply to create an economic common market. It was to
create economic interdependencies so as to minimize the possibility of
violent political antagonismsinitially in France and Germanyso we
can avoid another world war. Lets create economic interdependencies
in such a way that whatever conflicts may arise in the future, they will
not result in war. Our existence is dependent on each other. Beginning
with these principles, which even those of us on the left can appreciate
and respect, we should organize ourselves in ways to minimize killing
each other. Now, it works the opposite way. The interdependencies are
such that a lot of the money goes to Germany or France and so forth.
The money sent to Greece didnt go to buying coffee and cigarettes. It
went to building the metro by Siemens, and to Volkswagen for all its
cars that the Greeks buy; it went to the wellbeing of the Germans. These
interdependencies make it more likely that we will have, or are seeing,
violence and conflict within Europe grow.
So this tells us something about the contemporary political moment
and the incapacity of economics in itself to solve anything. We need a
return to the question of politics, the question of organization, to the
question of culture and civility. Lets forget all the easy answers (i.e., its
a question of good policies, of not being corrupt, of being honest, of
being hardworking). We know for sure that they have been no good.

UNIVERSITY OF SALFORD
Interventions: The Greek CrisisPolitics, Economics, Ethics 303

Stathis Kouvelakis

One of the ways, it seems to me, that is more relevant to understanding


what is happening in Greece is to use a notion recently developed by
Naomi Klein in her book The Shock Doctrine. I think its interesting to pose
the terms of the problem in that way. What is going on in Greece simply
means that its the first time the so-called shock doctrine, as a necessary
constitutive element for any neoliberal purge, is put into practice in a
western European country. After having been tested, of course, many
times in the past in other parts of the world and in the eastern part of
the European continent, the results are now very familiar to us. The idea
of the shock doctrine is, to put it very simply and as briefly as possible,
the following: its impossible for this neoliberal purge, or, if you like, for
this kind of qualitative leap in rhythm and the depth of the neoliberal
purge, to be implementedbut furthermore, to be even, if not accepted,
at least tolerated by societiesoutside the creation and the staging of an
exceptional situation, of a situation of emergency, in the wake of which,
somehow, normal life is disrupted and what seemed until quite recently
unimaginable, just happens.
Shock and awe are exactly what the shock doctrine is about: shock
and awe, which are directed within societies, targeting the social body
itself, and of course within the social body, the popular classes and the
subaltern groups of society at its very core. The normal time and the
normal course of events are somehow interrupted. Ive been to Greece
many times, and each time I was amazed by the very concrete experi-
ence I had of acceleration, a constant acceleration, of the pace of events.
The acceleration was fed by the media, by the political system, but also
it came from the unfolding of the objective contradictions of the situ-
ation. This event has therefore to be understood as the unleashing of
violent elementary systemic forces, such as (to repeat or to quote some
examples underlined or analyzed by Klein in her book) wars, military
occupations that follow, military coups, and of course the use of certain
national disasters, such as Hurricane Katrina, for example. And I think
that a major economic crisis, such as the one that is happening, is pre-
cisely an event of this type. Major not in the sense of a usual cyclical
recession, but something close to a collapse affecting the foundations of
the economy of the state, of the social and political system in its entirety.
It is an organic crisis, to use the term of Antonio Gramsci.
This means that Greece, the social and political forces in Greece,
has to face a new and unprecedented situation. This is a situation for
304 Stathis Kouvelakis

which no one is prepared; neither on the top layers, on the ruling


layers of society, nor on the bottom, on the side of the popular forces
of all the people who would somehow suffer the consequences of what
is happening. Everyone somehow is destabilized, and this is why what is
going on now in Greece is absolutely crucial. What Ive said about this
shock therapy is, of course, of a much more general and varied validity,
it seems to me. What is specific to Greece is that, as has been suggested
in very powerful terms by the speakers before me, in Greece, this shock
therapy and this neoliberal purge is even more necessary because indeed
we have to deal here with the weakness of the political structures and of
the Greek State more specifically.
Costas Lapavitsas, in a very relevant way, emphasized the failure
of the ruling class. I think that failure can be understood in two ways.
The first is the short-term way. There has been an immediate failure to
deal with the contradictions of the Greek capitalist system. The conver-
sation of all these contradictions just happened, so I will not repeat it.
There is a more long-term understanding of this failure, however, that
I want to emphasize as a long-term event, because it seems to me that
it is relevant to the many points of the debate we just had among the
previous speakers.
I come from, and I situate myself, within the Marxist tradition. One
of the key ways within this tradition of dealing with the state is to talk
about its relative autonomy. Nicos Poulantzas famously elaborated a lot
on the relative autonomy of the state. Its relative autonomy means that
the state has the capacity to be at a distance from the different factions
of the ruling class and of the balance of class forces in society. That it
intervenes to constitute somehow the overall outcome of those class
forces and in-class relations is the condensation of that balance between
class forces, as Poulantzas famously said.
The characteristic of the Greek State is precisely that this relative
autonomy (for reasons that go very deep in Greek history) has been
much weaker, much more limited than in other cases. The Greek State,
indeed, has been in constant war with the popular classes and with its
own people for many decades. What is at the very root of the weakness
of the Greek State, paradoxical as it may sound to some people, is the
very failure of the popular classes in Greece to reach a permanent form
of representation and regulation of their interests within the state itself.
All the phenomena we are talking about are just ways to compensate,
from above and below if you prefer, this form of weakness. The popular
classes, precisely because they are deprived of the more institutionalized,
of the more stabilized form of the social compromises that have been
reached by the popular classes in other parts of the European continent
Interventions: The Greek CrisisPolitics, Economics, Ethics 305

in the context of the so-called welfare state, have to bypass these stable
forms somehow and reach some purely particularistic or fractional form
of fulfilling certain immediate interests via practices such as those men-
tioned before. But this is much more the case of the permanent classes,
of course, and the dominant groups. What we call corruption in Greece
just means how obscene and how incestuous the relations between frac-
tional capitalist interests and the Greek capitalist state as such are. This
is exactly, I think, what we are talking about.
What are the possibilities that are opened up by the structural
weakness of the Greek State? I would point to two of them. The first has
to do with the relative position of the Greek national formation within
the international division of labor. I think that one of the main interests
of this very important piece of research produced by Costas Lapavitsas
and the whole group of economists working with him is exactly the way
it updated and made relevant the analysis about this division and the
polarizing effects of the core/periphery division in Europe. We have to
distinguish two levels of periphery within Europe. The first with Greece,
the south, and the so-called PIIGS, and the second will be the peripheral,
which means Eastern Europe, of course. The weakness of the Greek State,
in the context of the shock therapy, just means the loss of the remnants
of what can be a form of national sovereignty. Which means also the
erosion of a level of control of the popular forces in the state and the
disorganization of the representation, of the relation of representation,
between the state and the factions of the dominant class. This downgrad-
ing of the position of the Greek State within the international system
will have far-reaching consequences. It is within this context that the
popular forces have to situate their own struggle, elaborate their own
strategy, and operate their own system of allowances on a European and
on an international level.
The second consequence of that weakness of the Greek State, to
put it very simply and a bit more optimistically, is that it opens up the
possibility of direct intervention of the popular forces. Indeed, as we
all know, Greek history and even recent events in Greece have been
characterized by exactly this direct intervention of the popular forces,
of the popular struggles in the political scene. Because it is important
to understand that what happens today just gives us a taste of what will
follow in the forthcoming weeks and months, I will offer some examples.
In 2001, an uprising of the Greek Trade Union movement succeeded in
preventing the brutal and savage reform of the pension system initiated by
the modernizing government of Costas Simitis. In 2006 and 2007, Greece
was the only country in Europe where a successful student movement
succeeded in blocking many of the effects of the Bologna process, and
306 Etienne Balibar

of blocking the partial privatization of higher education. In 2008, as a


result of the murder of Alexandros Grigoropoulos, the very legitimacy of
the state was put into question by the most important popular uprising
that has happened in Europe since the 1970s.
What we have seen happening in the streets of Athens is a com-
bination of all those events. The two-day-long national strike organized
by the unions, hundreds of thousands of people demonstrating, public
sector workers entering into clashes and violent insurrectionary form
of practices with the police. This form of social practices from below,
transgressed in the existing framework of political representation, of
political confrontation, and of public debate, will be one of the major
characteristics of the period to come. It will also be one of the major
challenges the Greek left and the popular forces in Greece will have to
face in the future. From this test and from this challenge, they can be
destroyed, but they can also open up a new and unprecedented per-
spective for the future of the country, for the popular movement, and,
moreover, for the progressive forces in Europe and elsewhere.

KINGS COLLEGE, london

Etienne Balibar

First I want to say that Im not an economist. Im not a politologist. Im


not Greek. Im not an expert on Greek issues. So what could I say that
would be relevant to the current discussion? Of course, something that
is tempting is to play the role of the arbiter. Pick up something from one
of the previous speakers, something from the other, they are opposing
each other on several issues, and I would take a moderate or some sort
of intermediary position, but thats not very serious. The reason why I
accepted the very kind offer that was made to me to become part of this
panel, in which initially I had no reason to be, was not only friendship
but also the fact that I was thinking that it would possibly, if only sym-
bolically, add to the pan-European dimension of this discussion which,
from my point of view, is extremely important here.
Basically, what I want to argue is that we cannot deal separately
with the problem of Greece and with the problem of Europe. The situ-
ation is extremely complicated, as has been illustrated in the previous
interventions, both from the point of view of the consideration of causes
and origins of the current situation and from the point of view of the
Interventions: The Greek CrisisPolitics, Economics, Ethics 307

possible outcomes and developments. If I have one thing to say, its pre-
cisely that: within this complexity lies an absolute interdependency of
both sides. Therefore, I dont see any possibility to play Europe against
Greece or Greece against Europe, since this has practical or concrete
consequences as soon as we come to some of the most burning issues
that are at stake.
If we take as an example the issue of whether it would be the good
solution for Greece, given the catastrophic situation, the extreme likeli-
ness, as was argued a moment ago that the default will come anyway,
and whether it could be a good solution or the only possible solution
for the Greeks to leave the Euro, or whether they should remain inside.
I dont know if anyone is in a position right now to say yes or no, but I
would argue that this question cannot be discussed only from the point
of view of the Greeks. It has to be discussed from the point of view of
the Europeans themselves.
This is a bit strange to argue, since we are here in Britain, there
is something a little surrealistic, because Britain is not part of the Euro-
zone. This is not to say that Britain is not involvedand again Im no
economistif we simply agree on the idea that the problem created by
this cycle of financial speculation, state intervention, opening the pos-
sibility for a new moment or a new level of financial situation which is
now directed not only at private firms but at states themselves, is not
something that concerns only Greece. Its not something that concerns
only the Eurozone itself with its common currency, but its something
that has a much wider meaning.
I brought with me (and I hope this is not considered a provoca-
tion) an issue of the French newspaper Le Monde, more particularly, its
economic weekly supplement, considered in France and in some other
places to be a serious journal, although you may disagree with many of
its positions. (The issue was published just a few days ago, I think on May
4th, though its dated May 3rd, so you can see its extremely recent.) The
big headline is the following: United Kingdom, Greek Peril. Agree or
not with the reasoning, I think that says something about the interde-
pendency of all this.
To conclude on these general considerations, I would like to say
two things. The first is, as European citizens, as leftists and leftist intel-
lectuals, some of us, like Stathis Kouvelakis, raise the Marxist flag. Im
not against that. Others would choose a slightly different etiquette, but
there is something I believe as part of a left intelligentsia. We have, as a
first obligation, to express solidarity with the protests of the Greek people
as it is developing now for at least two reasons, which do not concern
them. The first has to do with democracy. This has been powerfully
308 Etienne Balibar

argued by Costas Douzinas in a few recent papers, but I think it can be


expanded and it can be taken as a starting point for a common posi-
tion. The fact is that the purge, or the work of economic social measures
and restrictions that are now imposed on the Greek people on account
of solving the debt problem, has been imposed in fact without any
without the slightestelement of democratic discussion, both within the
country and outside the country. These are purely technocratic measures
which amount to a kind of dictatorial process. I have long argued that
democracy is in crisis in Europe, both at the national level and at the
supranational or communitarian level. This doesnt work as a zero sum
game. Democracy goes down at the national level as it is blocked at the
common level. The converse, the opposite process, is also true, though
there is no guarantee at all, only a possibility. This raises accompanying
issues. A moment ago, Stathis Kouvelakis was powerfully arguing that
popular movements and revolt forms of collective expression in Greece
could start something like a reversal of the current facts on the ground
at a more global and European level. I wish I could say immediately yes
you are right, but Im not absolutely sure of that. Perhaps for similar
reasons somebody else suggested a moment ago that the people (and I
would say not only Greek people, but others as well) are ripe for radi-
cal solutions. Whether or not these solutions will be on the right or be
on the left is not something that we can count on. Sometimes this is
called populism, but the name populism covers a wide range of different
possibilities. If as intellectuals, with our limited but not absolutely insig-
nificant possibilities, we have a role to play here, this is to act as quickly
and powerfully as possible to create a circulation of hypotheses, ideas,
and propositions at the European level in order to facilitate a positive
reaction from other countries to what is likely to take place.
The second thing I would like to say is that the program of bailout
that has been adopted in the course of only two days was presented first
in triumphalistic terms. At last, after one month or three weeks of contra-
dictions among the leading countries of Europe, they have reached the
solution that everyone was expecting. Then, no more than two days later,
some of the most influential media outlets, like The Wall Street Journal,
have titles such as The Greek Bailout Frapp. The solution that has
been proposed and adopted is not likely to block the cycle that I was
alluding to a moment ago. This being the case, the fact is that the plan
is nevertheless being adopted. What this plan means, in my opinion, is
that the European community, and particularly the Eurozone, is not now
asking some sort of complementary help or support from the IMF. It is
just he opposite. The figures show that three quarters of the money will
come from Europe and one quarter will come from the IMF, and there
Interventions: The Greek CrisisPolitics, Economics, Ethics 309

are rules according to which this help is provided. The IMF has been
implementing for decades such programs all over the world, even with
some precautions. The implementation of its plan in Greece means that
the Eurozone, which was meant to become a zone of complementarity
and solidarity among national economies in Europe, is now decidedly
a zone of fierce and wide competition among its own members. The
conclusion that I derive from this is not, despite all the good reasons we
have heard, that the inevitable outcome should be to leave the European
Union and allow its common currency to collapse and perish. I think
that result would be even worse, not only for the Greeks, but for all of
us. Some sort of radically alternative understanding and vision, both of
the European economic policy and of the European social model, is now
badly and urgently needed.

university of californiaIrvine