Eurozone break-up may lead to a 'socialist' EU

If Syriza wins in the Greek elections and its programme is embraced by the radical left across Europe, the EU itself will become socialist – argues academic

More than 70 per cent of Greeks want to stay in the eurozone and nearly 70 per cent refuse to accept the humiliating austerity agreements the allegedly corrupt ruling bloc of the centre-left PASOK and the centre-right New Democracy agreed to. This fed a populist electoral campaign on behalf of the discredited duo - joined by international dignitaries such as International Monetary Fund Managing Director Christine Lagarde and Daniel Con Betit who said: "If Syriza wins the election, then Greece will be taken out of the euro and sent back to the Balkans – the bailouts are not negotiable."

This is the way opportunism operates. They and German Chancellor Angela Merkel know that the kind of the eurozone they defend and serve cannot last. Their hope could be seen by critics as predatory: if Syriza is sidelined in the wake of the election on June 17, and ND and PASOK form a government continuing the implementation of the Troika's – the IMF, European Central Bank and European Commission - austerity programme, then more usurious cash will run in the kitties of the bankers. Yet, this will happen without improving Europe's finances by even one iota. But this buys them time to further reflect and deliberate, while keeping the bond-dealers happy.

The Troika, on its part, may make some concessions to Greece's duo of PASOK and ND, giving the Greek taxpayer the impression that these two parties are the bastions of stability and that, in fact, they are tough negotiators. But none of this makes any sense. The problems facing the eurozone today are not Syriza's or Greece's making, but the single currency's and Germany's own. What are these problems and why is the eurozone bound to disintegrate in the foreseeable future, with Greece or without?

The first crucial problem is the monetarist and anti-inflationary design of the Maastricht Treaty, which had effectively adopted the Bundesbank's policy agenda. It amounted to - there is no conspiracy here, this is business. This further severed the ties between growth, employment targets, financial services and the monetary system - reproducing the asymmetrical and uneven socio-economic and political geography of the European architecture. All these three components were driven asunder, once the cracks in the monetarist financial architecture appeared, as a consequence of the global financial crisis in which bundles of fictitious money that have been building up since the 1980s have blown up.

Any currency unit starts its life as a socio-economic, political and geopolitical relation reflecting values circulating in the real economy. The hegemony of fictitious capital over the production of use-values led to serious imbalances between the monetary and the financial system, between the circulation and appropriation of use values and the circulation of fictitious ones. In this chorus of fictitious capital, Germany is ranked first and foremost due to the recycling of its financial surpluses within the eurozone; the result of European periphery's exploitation. The dialectic was simple: lending money to the periphery in order to buy German products.

The European Union and the eurozone are primarily German monetarist and imperial projects put together conscientiously. As such, however, it is bound to disintegrate not because of pressure by any 'anti-colonial movement' – although the Greeks and other European periphery societies, perhaps unwittingly, fight an anti-colonial struggle. No, it will be because of the structural contradictions and antinomies of this design that pertain to uneven socio-economic development and the callous, monetarist behaviour of financial and interest-bearing capital.

The second key problem of the so-called 'European integration', strictly connected to the first, has been the impossibility of advancing a 'United States of Europe'. It took a civil war for the Americans to become United States of America, which was essentially a bloody fight over the famous 'Co' – 'Federal' (the Northern project) or 'Co-federal', entailing basically two states (the Southern project). Twice in the 20th century, the Europeans attempted to stop Germany from politically uniting the continent by force. Napoleon tried to do the same two centuries before. Since the late 1940s, the German project has necessarily been transformed into a peaceful domination of, and expansion on, the continent via neo-liberal economic means. The culmination of which was the 'variable geometry' notion of the EU – as a party document of the German CDU-CSU called the process of integration in the early 1990s; implying a multi-speed Europe running in concentric cycles under Germany's primacy.

Again, there is no conspiracy here. Germany is an economic powerhouse with a structural tendency to outwards expansion - German polity and political forces have to adapt to that. The French were to become Germany's main partner, their assignment basically being the Mediterranean region – see the 'Barcelona process', which began in the Catalan city in 1995 and is now defunct. Germany, on the other hand, concentrated on East-Central European enlargement - which included the Balkans, hence the catastrophic policy in Yugoslavia. But neither can the Germans achieve Europe's unification via monetarist, anti-inflationary means alone, nor can the French stop the Germans from continuing to do so even under conditions of severe stress; jeopardising everything that has been achieved so far - the monetary union, certain common policies, the enlargement process and so on. As is well known, the French and the Germans have different political things in mind when they talk of the EU.

Beyond these structural contradictions and antinomies of the German project, one must also factor in the US. And this is the third crucial reason why Europe's political unification, henceforth the sustainability of the project, is impossible. At times, for example, especially when the French and the Germans seemed to be close to formulating a joint defence doctrine - the Americans rushed to stop them as this would duplicate the North Atlantic Treaty Organisation. Remember US President Bill Clinton in the 1990s? He said: "The Europeans can have a separable but not separate defence and security identity from NATO." In short, any attempt at unifying Europe under Germany's monetary and neo-liberal tutelage on the one hand and under France's nuclear clout on the other, is utopian. More to the point, Germany and France have neither the means to override America nor the appetite to go having another European or global war in order to political unify the continent. Let alone the fact that France will never fight on the side of Germany.

This is why recent talk about issuing Eurobonds - fundamentally having Germany sharing European periphery's debt – and subsequently advancing a form of fiscal union or quantitative easing ECB-style - pumping money into Europe's problematic banking system - can only be a provisional, short-sighted half-measure. It will not solve the disintegrative tendencies of the eurozone, but it will simply postpone them for a few months or years. Moreover, it will not advance growth and employment both in the core and the periphery, which is simply the wishful thinking of new French President François Hollande.

Another problem of European integration has been, and in a way continues to be, is the diversity of cultures, ethnicities and national bureaucracies. These are the result of the European Enlightenment as a historical process. Certain trends within the realist tradition have even reached the putative conclusion that the nation-state is the ultimate form of social organisation beyond the perimeter of which anything else is bound to perish. Nationalism, they argue, is an ontology from which there is no escape - however sad such a conclusion might be. But critical theory does not confuse nationalism and the state. You can very well have a socialist, non-nationalist state, the same way as you can have a nationalist state.

The realist view, must be said, is a reified perception of the world that surrounds us, the aim of the intellectual and labour movement being to de-reify and deconstruct this conjecture by presenting it as it is: capital, as a historical process and social relation, has no country. European integration failed in the field of economics and politics but was pretty successful in cross-fertilising cultures and nationalities, creating clear-cut social majorities against racism and xenophobia. Time and again, the monetarist and anti-inflationist recklessness of Germany threatens to destroy this, which is the only real achievement of European politics. By turning a blind eye on the social protection of labouring classes and the migrants, and by virtually abolishing the welfare state, large segments of the working population in several European countries look to the extreme-right for refuge.

But if a neo-liberal Europe is impossible and undesirable - then what it possible and expedient? Watch Greece and the aftermath of the June 17 election. Europe's and the IMF's monetarist voices have sided with their allegedly corrupt vassal parties in Greece, blackmailing the electorate that if Syriza ends up being in government then Greece would go back to the drachma and the Balkans. In fact, quite the opposite is the truth. If Syriza wins and if its programme is embraced by the radical left across Europe - then the euro has the potential to survive, because the EU itself will become socialist. Why is Syriza and Greece so important at this juncture?

At the moment, and as a social and political formation, Greece coagulates most of the aforementioned problems of Europe's political economy. The election of 6 May 6 has even given a racist party some 6 per cent of the vote. Lenin's ghost would say: 'Greece is the weakest link in the imperial chain - stupid'. Maybe. But no revolution in history has ever undone history itself. Even the Bolshevics, once in power, discovered that capitalism's propulsive force had not been exhausted; so they had to introduce 'tax in kind' and Lenin's New Economic Policy. This, in the main, was a social democratic programme for the development of productive forces in Russia. Read: growth led by both the public and the private sector, which was Lenin's preference. Lenin and later Keynes, Kallecki, Schumpeter, Polanyi, Sweezy, Mandel and so many others knew that financial services, derivatives and futures, CDOs and other financial vehicles and products are not conducive to growth.

If anything, they are conducive to processes of 'bubbles and busts', all the while artfully passing their own debt onto the consumer - the ultimate victim of the 'payback time' - as Lagarde callously warned the Greeks. Real growth requires generous investments in industry, agriculture, infrastructure and human resources. This would re-balance the values of the assets and commodities that circulate in the economy with the amount of paper money and interest-bearing capital that circulate in the market and the banks. In other words, what needs to be eliminated across Europe and the US is what Marx used to call 'fictitious capital' - which is mainly capital not committed to the production of use-values.

Syriza, as well as large factions of the European left, have that programme. This is the agenda that should permeate Europe's bureaucracies without undoing the power of the state, while at the same time making undesirable the power of nationalism. How is that latter possible? Let us take up the example of Greece again, which is a special and even difficult case, not least because of its geographical position. Greece did not enter the EU because of its economic robustness. It entered the club for security and geopolitical reasons. The fault-lines of the country are more than obvious: its geopolitics was and is over-valued, whereas its economy was and is under-valued. The large amounts of money spent by the warped two-party system in Greece on the country's defence has been a total waste.

The Greek deterrence against Turkey is not so much the type of F-16 or submarines it has purchased by issuing debt to its European and American creditors, but its society and its people. No invader has ever been able to tame societies and the determination of people to live free. The best recent examples being the US withdrawal from Iraq and the forthcoming pull back from Afghanistan. In other words, a radical socialist government in Greece can divert huge sources from funding obscure defence deals into welfare and productive projects generating growth and employment. The state, in other words, can be socialist and not nationalist. The former forms an ontological identity with the social world of labour and its needs, the latter forms an ontological identity with an imagined community, the 'nation'. Greece, we should note, is a special and difficult case. Italy, France and virtually all other European countries have much fewer security concerns than Greece, so diverting funds from the security sector to welfare and growth projects would be much easier and unproblematic; as long as the political approach to the problem changed. But if Syriza can put together such a courageous programme, then why not the rest of Europe?

Diverting funds from defence to welfare and economic development can be a catalyst for the initiation of a process that could lead to the foundation of a new, socialist Europe: doing the opposite as demanded by the US from Europe, namely to spend more money on defence, to commit more European troops in Eurasia's and Africa's losing imperial battles. Greece and Europe have not a single reason to follow America's advice on this. If Greece and the periphery of Europe first begin this process of disengagement from NATO and from the realist, security policies of defence spending at the expense of society - then it is almost certain that all other European societies, soon or later, would follow suit.

Significantly, this would be a serious challenge to the Turkish government, testing whether its neo-Islamic foreign policy has any social and democratic substance and pushing it - by talking directly to the Turkish and Kurdish people, to begin with the withdrawal of Turkey's troops from northern Cyprus. Syriza's new socialist security policy can act as a catalyst also on this front. But much of the above depends on the choice of the Greek electorate on June 17. Whatever the verdict, however, the type of the eurozone that exists today has no chance whatsoever of surviving this mayhem. And everybody knows that. It is such a consummate and discredited move for Lagarde, Merkel and so many others to take the side of the illegitimate political establishment in Greece - hoping to get them back to power for a fistful of dollars.

Vassilis Fouskas is professor of international relations at Richmond University, in the United Kingdom, and editor of the Journal of Balkan and Near Eastern Studies