[GegenStandpunkt home page]

The Case of Greece

Europe’s Crisis 2014

[Translated from Gegenstandpunkt: Politische Vierteljahreszeitschrift 4-14, Gegenstandpunkt Verlag, Munich]

I. Europe is destroying its credit by rescuing it

There is a difference between the contradictions of the currency union and the way the years-long economic crisis (i.e., recession) has been managed in the eurozone. But in practice one cannot distinguish between the way the euro countries are competing for a nationally useful common credit and the way they are implementing the devaluation of capital. Especially in the latest phase of crisis and competition.

When it comes to the crisis and its management, this phase is characterized by professional guardians of the currency warning against deflation. And as far as the competition of the eurozone partners is concerned, they are all fighting, against each other of course, for the capitalistic efficiency of their national debt — some by requesting more debt, others by objecting to that. This fight is showing increasingly clear effects.

1. What the European Central Bank (ECB) prescribes for the crisis: Inflation to counter deflation — growth brought about by more and more excess credit-money

The ECB has been conjuring up the risk of deflation in the eurozone. It sees this as involving a “downward spiral” of falling prices, a resulting decrease (rather than increase) in sales due to consumers expecting further prices cuts, consequently a lack of investment, a decline in production accompanied by layoffs, a shrinking buying power, therefore further price cuts, etc. This is roughly the way experts inform the public of the mortal danger that looms as soon as everything might keep getting cheaper for once, instead of more expensive: it wouldn’t be a bargain paradise but one huge disaster. Alongside the market participants’ dire strategy of buying nothing so as to buy it cheaper later — and then buying nothing until they have no money left… — experts offer another explanation for the lack of economic growth that might soon actually become negative: a sampling of world affairs that consist essentially of Putin and Ukraine, lower growth rates in China, Ebola virus, ISIS, wars in the Middle East and, specifically in Germany, unwise pension and gender-equality policies. The common denominator making these disparate “phenomena” coagulate into one big economic disaster is known as uncertainty, i.e. for business and its beneficial advance through the world. This sheds a somewhat different light on the legend of consumer psychology as the cause of deflation, for it at least suggests the objective finding that is being exemplified by this or that adverse aspect of world politics or the global economy: business no longer pays off at the moment. More capital investment does not make enough more profit; the same capital advance often even fails to yield the previous returns. The cause might be seen to be anything and everything that investors are afraid of, because the real reason is certain: at the moment, investing does not yield what it rightfully should.

The remedy the ECB has provided for some years now, and promises to continue providing, is to combat the feared risk of deflation with huge amounts of fresh credit-money — granted to commercial banks at zero interest and used for buying up debt securities of both private and public borrowers — in order to get the loan business back on track and thereby create growth. This remedy turns the causal relations upside down, but at the same time it confirms and clarifies the diagnosis. After all, ECB president Draghi & Co are right in assuming that the growth of capital is launched by credit, starts off with debt as an advance, and consists in turning debt into profit-producing capital. But if credit is no longer being created and granted by commercial banks based on their own calculations; if instead, the central bank is “flooding” commercial banks with practically zero-interest credit-money that is not flowing into any productive business but being used by governments to refinance their debt or by speculators to invest in increasingly dubious listed stocks or in the growth of firms through the purchase of other firms — i.e. in the centralization of capital rather than its accumulation; if not even the money genuinely earned by ongoing business is used for continuing business but instead increasingly left in bank accounts in the form of non-interest-bearing assets; then this is the way bankruptcy is virtually being admitted on a large scale. For it is now evident, quite generally, that it’s not just that business depends on its financing but that the credit granted for business depends on the success of the credited business — and quite specifically, that much too little business is succeeding in proportion to the amount of circulating credit. This is due, not to any omission or negligence, but to the logic of market-economy activity: heedless of “the market,” more and more and finally much too much credit has been granted and capital advanced for a profit to be made and the credit to pay off. The deflation the ECB fears and combats with ever more, ever cheaper credit-money is nothing but the next form of the necessarily resulting crisis: a surplus of credit-financed growth shifting into a general stagnation of business activity.

That is why the ECB is wrong to produce a glut of money with the goal of reviving profitable business and stimulating new economic growth through credit for free. All its efforts that fail notoriously in this regard only go to show that credit is not too expensive and too scarce to be transformed into capital, but has been put into circulation much too plentifully to achieve any more capitalistically productive results. The ECB is doubly wrong when, bravely intent on achieving a general boom, it sets itself — or rather the business world it “floods” with money — an inflation target actually quantified as 2%. In reality, “inflation” designates an effect of the officially sanctioned credit business operating with legal tender and triggered by the central bank in charge, this being the negative effect that the available funds have been used to get more business started than can be profitably completed, because the credit-financed demand does not bring about a profitable supply of goods to keep up with it, but rather promotes the freedom to put through price increases everywhere. Profit from a mere mark-up that businessmen charge each other all around to reimburse themselves increases not their wealth but only the figures that quantify it, and this fact makes itself felt under these circumstances as devaluation of the unit serving to measure this wealth. But even an effect like this, much less the kind of inflation the ECB would like to have, i.e., one that doesn’t merely simulate capital growth through rising prices but accompanies (while relativizing) a real and effective increase in capital’s financial power — even that is only to be had when businesses take out credit as a means for growth on the basis of their own calculations. Therefore, theoretically speaking, the plan to induce growth by way of inflation, i.e., to trigger an accumulation of capital using an overabundance of means of growth, already measured beforehand in a percentage decrease in the monetary value of capitalistically acting wealth, is a fairly absurd mix-up. Practically speaking, this idea at least has going for it that the ECB has no other tool for “boosting the economy” than providing a whole lot of dirt-cheap credit-money; so this “false consciousness” of the central bankers has a certain professionally based necessity to it. But the immediate reason for and practical purpose of their measures is not to create a bit of inflation, anyway, but to buy up government and other debt in order to maintain its market value that has long been in question and meanwhile largely annulled, i.e., to rescue the general payments system and the capacity for economic action of the countries that use the euro.

But, above all, one thing is clear. The fact that the euro is not undergoing an inflationary loss of value although the euro-denominated bank debt and especially government debt has been called into question and at times massively devalued and this devaluation has been compensated by ECB credit-money; the fact that the crisis of credit business in the eurozone, including the ECB’s preventing the financial world from having to explicitly admit bankruptcy, has not led to a devaluation of the monetary unit: this can’t be helped by the ECB. It is due to the special construction of the European Economic and Monetary Union (EMU), whose members have handed over their monetary sovereignty to the ECB in order to compete as nations for one and the same money, the famous euro.

2. The precarious strength of the euro

It was the way the German Chancellor, Helmut Kohl, and his minister of finance, Theo Waigel, promised before the new common currency was introduced: “The euro will be as strong as the Deutschmark!” From the very beginning, the new money represented the intra-European and worldwide competitive success of the firms dominating the markets from their bases in Germany and a few other pivotal locations, concentrating and increasing in their home countries the capitalist wealth realized in euros. Public debt, which the common credit-money also represents, was deemed by the financial world to be justified by the economic success achieved and anticipated, i.e., to simply be a particularly safe investment in their own calculation. The fact that this success was distributed extremely unevenly and increasingly one-sidedly among the nations whose firms and banks operated with the same money everywhere and brought their competitive power to bear freely, without any modifications due to varying exchange rates, additionally boosted credit business within the EU. Freed from any exchange-rate risk, the financial institutions amassing the accumulating monetary wealth financed the budget deficits of countries whose firms performed poorly and increasingly worse in the unleashed competition. Up till now it didn’t bother anybody, least of all shrewd financiers, that these countries were not turning the credit they were granted into capital but increasingly consuming it to compensate for their competitive weakness, i.e., that the economies of these countries were not reproducing the money spent there, much less increasing it. On the contrary, financiers saw a big advantage in the fact that the money to be earned in these countries was not a local product that reflected with its value — i.e., as the unit of measurement for the nation’s capital and its growth — the weakness of the local economy, the deficits in the reproduction of the wealth available and consumed there. They profited from the fact that this money instead represented the growth being achieved in the EU as a whole, growth reflected in the form of stable-valued debt securities in the hands of investors and, in the successful countries, as an accumulation of profits. So the fact that the competition unleashed in the eurozone caused national capital to shrink in quite a few countries acted as a particularly favorable condition of business both for the winning firms and for intra-European finance. This made the euro ‘hard’ and ‘strong.’

The financial crisis destroyed this idyll. The banks that had been most keenly involved in the global speculation business and consequently had the most to slash once the devaluation of irredeemable assets had gotten underway, “consolidated” their business operations. They applied more critical standards to their worldwide commitments and withdrew from less important or promising spheres of business. This had different effects on the eurozone countries with their different success stories, and the longer it lasted the more dramatic it got. The highly competitive nations either remained or were the first to again become destinations for the monetary capital seeking international investment, and attracted bigger shares than before. In the other countries, the notorious deficit grew and its refinancing became more problematic, i.e., more expensive, according to the logic of finance capital. The creditworthiness of these countries, and especially of their governments, which need euro-credit for managing their business location and even for their self-preservation, was no longer judged by the quality of the money they financed themselves with, which was still not exposed to any exchange-rate risk, but was measured by their autonomous performance and accordingly downgraded. This made credit more expensive; made its refinancing accordingly more difficult, reduced their creditworthiness further, and drove countries to the verge of official bankruptcy. In this way, the crisis revealed that quite a few members of the Economic and Monetary Union had long since been far from able to reproduce the capitalist wealth they lived on — let alone increase it to the extent of their accumulated and still growing debt. The crisis revealed this in the fact that these countries no longer had any money, which must be there for maintaining their capitalist economy. Governments and businesses could no longer borrow what they needed to finance themselves — and they no longer had a credit-money of their own, which would have given their inability to reproduce their monetary wealth the form of a drop in value of the national unit of measurement; this is exactly what they exchanged, by joining the EMU, for a common currency that was no longer producible nationally but stable in value.

Actual bankruptcy was averted with credit support and guarantees, in cooperation with the IMF, by the partner countries whose debt enjoyed recognition and esteem, more than ever for lack of alternatives. Furthermore, by promising to buy up public debt obligations and other financial securities with no prior limits even from overindebted countries, the ECB provided the guarantee for the value of euro loans that nobody wanted to have or grant anymore. With the huge amounts of credit-money it created and put into circulation, it saw to revitalizing trade in these debts — even if this meant they landed pretty directly at the ECB — thereby making sure the countries beaten in competition were still solvent. It did so in the face of resistance and persistent reservations on the part of the competitively capable euro states, in particular the German government. The latter additionally insisted on restrictive conditions for crediting otherwise insolvent partner countries and for the corresponding credit guarantees, conditions aiming to enforce the once adopted “Maastricht” criteria for a stable common currency no matter what, i.e., aiming in practice to reduce the spending of the countries accordingly placed under supervision to the amount they generated themselves. The declared purpose of this “hard line” was to spare taxpayers in the successful countries, who would some way or other be liable for the weak partners’ unproductive debt — an honest avowal of national egotism and the spirit of intra-European competition and that these virtues must under no circumstances be bought off. Yet, irrespective of how politicians viewed the connection between their partners’ bad debt and its strain on their national wealth, and irrespective especially of how they spelled it out to their audience at home they addressed as “taxpayers”: restoring the solvency of the euro states saved from bankruptcy, and the ECB’s “flood of money,” did in fact entail one danger for the capitalist success of the competition winners. And that was that the European credit-money thus increased and spent by the deficit countries largely in capitalistically unproductive ways would — simply in view of its unproductively employed mass — embody less and less the economic success that had accumulated in the successful nations and was still continuing, albeit to a decreasing extent; instead it would increasingly reflect the inability of the weak euro countries to make euro-credit productive and to reproduce the monetary wealth they consumed. There is no politico-economic automatism here. But standing between the nations’ capitalist performance and the value of the money created and used for capital accumulation on their respective territories there is always the comparative assessment of the current and anticipated balance sheets of the competing monetary powers by the money and capital markets. These markets have been known to terminate credit to the weakest members of the eurozone, thereby putting the common currency itself at risk. So if credit guarantees and the ECB’s money creation continued to lastingly ensure that national and other debts of all the eurozone countries were equated, i.e., to override the effects of a differentiated credit rating among the euro countries, the markets could definitely be trusted to draw their conclusions about the value of the money representing so much and ever more “bad” debt. And then, along with the euro, all the euro-denominated wealth would be devalued indeed, wealth that the winners of intra-European competition had accumulated in such a one-sidedly advantageous way and that they had plenty of plans to use in worldwide competition.

This is exactly what these countries and especially Germany are out to prevent with their monetary and credit policy line. When they strictly refuse any joint liability of eurozone countries for their joint credit-money, demand that their weaker partners rigidly align their budgets with the “Maastricht” criteria (long since unattainable for them), publicly criticize the ECB’s money creation, and when Germany as the leading power makes so much public noise celebrating the historic achievement of its “black zero,” i.e. no-new-debt budget, then, no matter how absurd some of the reasons cited may be, what is going on here is a struggle over the value of the euro. That is, these countries are fighting for the money markets not to judge the common currency by the weak growth of the loser countries — despite the financial crisis, its consequences for the euro countries’ budgets, and the compensation of growing insolvency through ECB money — but still as the result and expression of the crisis winners’ positive accumulation balance. The markets’ response shows that the fight has by no means been decided according to the opportunistically speculating referees in the centers of the global money trade. It is being waged, with increasing — but meanwhile abating — bitterness, on the budget-policy front.

3. “Growth through debt” versus “black zero”:
The crisis competition of the euro partners

Europe’s ‘crisis states’ need and want more credit for their budgets than is permitted by the Maastricht criteria and conceded by Germany and some other partners. They need more just to keep their political operations functioning at all. And they want significantly more to pull their countries out of crisis economically and set them on a growth course. What they are asking for is in principle nothing extraordinary, just “countercyclical economic policy”: more credit-financed government spending is wanted to let the nation’s capital earn additional money and make it generate more profit, accordingly invest more, thereby make even more profit, and on and on like that. And like the ECB, whose creation of credit-money has the same goal, the politicians managing the budget in the ‘crisis countries’ are right in one respect: a modern state sets not only the legal conditions for the capitalist mode of production that is to prevail and thrive in its country, but also essential economic conditions. Specifically with its debt, it, on the one hand, creates a business article that is welcomed by financial institutions as a safe item for investment and therefore as backing for their own creation of credit and credit-money. On the other hand, with the mobilized funds the government creates incentives for the productive use of available financial resources or even provides capital advances at its own expense.

To be sure, such debt is a lasting burden on the national budget and thus again has a restrictive effect on the government’s ability to foster economic growth. But it might succeed in creating business or even entire lines of business, which subsequently realize and accumulate capital of their own accord. Then the national accumulation of capital justifies the public debt, which itself doesn’t exist to become profitable capital. This also marks the limits of the power of countercyclical policy, however: it does not intend and is not supposed to replace capitalist business, but to advance it; so the business world must have its own calculation and be successfully enriched to take up the incentives that the state offers with its demand and extra help for profit-making and reinvesting. So, in the particular case of the state’s crisis management policy, this is clear: when the business world’s ventures no longer generate any returns to justify the expense; when the markets show that it has long been creating and deploying too many claims to growth and means of growth for them, or even more of them, to be able to augment its wealth; when even the reproduction of wealth comes to a halt: then the business conditions provided by the state remain mere conditions, i.e., lead to nothing, and the funds spent on them only increase the level of public deficit.

Even in a crisis, public funds can certainly be quite effective in one respect: if enough are applied purposefully enough, they might make it possible to shift the relations of international competition; it might be possible to ruin the business success of a foreign competitor and bring it to one’s own country at the state’s expense. And it is obvious for the losers of intra-European competition to fight for this kind of advance for their nations when they demand access to more financial resources, both in their own budgets and in those of their more successful partners. After all, those in charge are constantly being admonished by their colleagues to do more for the competitiveness of their national economies. But it is fairly unlikely that additional resources could enable them, in the midst of a persistent, general economic crisis, to bring about growth once it has come to a general standstill due to the general overaccumulation of capitalist wealth. Even in the decades of their Common Market and the one-and-a-half decades of their Monetary Union they never managed to keep business in their own country or to bring back as much to their own country as they lost to foreign competitors. And it is even less likely that, in this situation and in this way, they could succeed in making up for the losses accumulated and competitive weakness entrenched during this period. All they have left is a prospect for success that is no better a recipe for overcoming the crisis than the ECB’s plan to bring about growth-inducing inflation by excessively increasing the money supply: the governments in charge of Europe’s ‘crisis countries’ hope that huge amounts of additional public debt, transformed into accordingly huge amounts of additional liquidity, will reduce the euro’s exchange value, thereby improving their competitive position on markets outside Europe and leading to improved trade balances and consequently more growth. This speculation is correct insofar as the exchange rate of a domestic currency is definitely a condition for competition for domestic business. Less correct is the notion that by manipulating the relation between supply and demand, one could lastingly worsen the external value of a freely traded currency and thereby crucially improve the competitive situation of the capital operating with that currency. One cannot simply shut out the fact that a credit-money’s exchange rate is basically the result of current foreign business, and a worsening exchange rate is a negative result, meaning that a notorious surplus of credit has been created in a currency zone beyond the ability of the firms operating there to transform it into realized capital; i.e., it is the balance of a lack of productive force across the board and is not itself one. Furthermore, the effects of a reduced external value of a currency on the competitive power of the firms operating with it are anything but clear. The only clear thing is that any resulting benefit mainly goes to firms that are successful anyway, firms that can cope with higher import costs and are already active on foreign markets — that is, on balance, the successful powers of the Monetary Union again, which the impaired rest want to catch up with. These powers therefore actually find a certain appeal in this one item on the suggestion list of the ‘crisis countries,’ but without budging from their standpoint of a ‘strong’ common currency. The way they calculate, the size and the preservation of the capital power they have generated outweigh any advantages in functionally deploying it.

However, the whole experiment of using a great amount of euro-credit for the national budgets of specifically the Union’s ‘crisis countries’ to remedy their desolate situation has never gotten off the ground, much less to the degree desired by the countries with the enormous need for credit, because the leading economic power and its like-minded partners have objected. They have laid out a contrary plan to combine growth with sound financing and link any public debt to a commitment to a balanced budget. The government in Berlin declares its own “black zero” to be proof that this works and how well it works, recommending it as a compulsory guideline. So its self-praise for this magnificent achievement is not intended merely to promote the good impression of Germany and its euro that financial markets are to gain and maintain, but also to put pressure on its partners’ debt policy. It intensifies the pressure by pointing out that the euro countries with the largest deficits and highest levels of debt also have the lowest growth figures to show for it, clearly demonstrating how unsuitable abundantly increased public debt is for national growth. And they are right in one respect: there is no general automatism to be relied on for public debt to generate growth; not even when borrowed sums are explicitly earmarked for investment; and especially not when there is a crisis on, i.e., capital is failing to be realized across the board. Even without any politico-economic explanation, Berlin in any case currently holds the view that credit-financed government demand can produce at most a “flash in the pan.” In the name of this piece of budgetary wisdom, the German government takes the liberty of turning the real connection between excess public debt and lack of national growth upside down and blaming the deficit for its cause, the poor rate of success of a national economy. By recommending that they make sure to generate growth without any additional debt, the exemplary German politicians counter their partners’ desperate program of regaining competitiveness by more debt with a no less absurd remedy — demanding from them no less than to restrict all government activity to what can be autonomously financed with tax revenue. What the pivotal power of the euro union is thereby making known is that it is determined neither to temper its interest in a ‘strong’ world currency, nor to give up any of the superiority it has achieved in intra-European competition or any of its strengths in global competition.

The budget disputes of the governments concerned have caused the crisis competition between the euro countries to develop into a political dispute that not only obstructs the budget planning of finance ministers, but fundamentally throws into question the Europe-focused reason of state of all those involved.

II. Europe is destroying its Union by completing it

1. Undermining the EU partners’ European reason of state

Through the crisis and through their competition to manage it, the euro countries are losing command of their national wealth. This is not exactly what they had in mind when they created a common credit-money for an ever-lasting common upturn! What is being lost is not just the fiction that the political authorities have the accumulation of capitalist wealth in their countries under control, can govern it into being and steer it towards sovereignly set goals if they just do everything right. The euro countries are really losing something crucial: their rulers’ free disposal over the money that they draw from their national economies and use to pay for all their political activities, in particular to promote investment, steer firms, cover welfare costs, i.e., do all the things that keep making both citizens and their democratic masters believe in the planned control of the market economy as the task of good governance. What is being lost is nothing less than the state’s sovereign regime over the national budget.

This loss affects all the members, in different ways. The ‘crisis states’ are deprived of sovereignty over their national budgets by the enforcement of restrictions holding under European law or even at times by a higher financial supervisory body. The financially better-off partner countries including the leading economic nation are held liable willy-nilly — likewise by treaty law and more or less regardless of their parliamentary reservations, their supreme courts’ right to object, and all political resistance — for financing the continued existence of their Union, i.e., their weaker partners. Each side has lost the unrestricted mastery over its means of rule; and this is not merely due to legal obligations, which a sovereign power could always interpret in its own favor or even terminate if necessary, but because they are members of a club with powers and institutions of its own, which has created and continues to create accomplished facts of policy, and because their markets have been communitized, and even their money in the eurozone, resulting in many quite real economic constraints.

This loss was intended. And in the calculation of the sovereign powers involved, it was justified by success, or, more precisely, by the prospects of their nations’ participating in an overall success of the communitized European economic power, so as to promote each nation’s prosperity. The crisis put an end to this good reason. What remains is the loss of sovereignty, which manifests itself as a restriction if not almost deprivation of their power in handling the current crisis situation. And this impairment of their financial power and political competence takes place — and is perceived by them — as a restriction or making of demands by their partners and by a Union bureaucracy serving, or at least suspected of serving, the self-interests of the others. The loss of sovereignty not only appears to be an act of self-serving encroachment by the partners, but actually takes place in this form.

This consequence is not without historical irony. The project of achieving an ever closer symbiosis that can eventually not be undone in practice has succeeded — the result being that the crisis competition has not merely revived the conflicts of interests that are always on the agenda between competing nations when the global economy is in crisis. At the same time, the unity that has been attained gets in the way of settling these conflicts, leads the competitors into unresolvable contradictions between dependency and self-assertion, and produces never-ending disputes distinguished by special animosity. The partners thereby mutually demolish the political objective that they each pursue, namely, to profit nationally — both economically and in terms of world politics — from an ever-closer union as equally entitled sovereigns respected by all the others. Their crisis competition is the failure of the EU members’ European reason of state.

2. Upswing for Europe’s opposition:
An orgy of nationalism, with a few variations

It lies in the democratic nature of the matter that this result brings about a strong revival of opposition movements in the EU countries. Each in their own way, they perceive the breakdown of their nation’s European reason of state as a failure of their government, and integrate this finding into their traditional, previously rather unsuccessful political cause; or expand it into a radical attack, sometimes more on the leadership of their own nation, sometimes more on the EU or the encroaching European neighbors. Either way, they propagate the standpoint that “it” can’t go on like this anymore, thereby agitating in their countries for the acute necessity of a political reorientation that follows from the crisis competition of their nations. And almost all of them know only one alternative: more homeland.

— In the member countries with imperialist ambitions, which are bent on acting and being recognized as key players in their Union but find this status endangered by the crisis and Europe’s crisis policy, the democratic opinion makers of the opposition react with a firmly anti-European nationalism. Thus in France, the Front National sees its Grande Nation as being attacked by dictates from Berlin; restricted in its ability to act externally and even domestically above all by the strict ‘austerity policy’ that Germany wants to impose on the whole eurozone and of course also France; altogether degraded to second rank and thereby humiliated. In Italy, a pan-national party emerging from the hitherto separatist Lega Nord, citing devastating loss figures as a result of the euro and the German euro regime, makes the case for emancipation from the ruinous and insulting paternalism of the Monetary Union and its superintendents in Berlin. In both cases — and a number of others — rhetorical attacks on big financial capital as the sole beneficiary and appeals to “ordinary people” as those wrongfully victimized by the EU’s crisis management policy establish an equation between the common people and the nation’s honor, the honor that is being trampled by the EU and its German leading power and not being defended by the nation’s own leaders.

— On the other side, in Germany, the suspicion that the successful nation and its industrious taxpayers are increasingly being held liable for their weak partners’ lack of discipline is hardening into the accusation that the Berlin government is allowing Germany to soon become poor through the common currency that chains the country to the bankrupt southern countries. As a serious representative of this judgment and closely related concerns about an intact homeland, the Alternative for Germany has scored its first electoral success. Transferred to the Republic of Austria and free of regard for the anti-racist morals and ostracism of fascism that are still fostered in Germany, the Freedom Party of Austria elaborates this standpoint into an overall program for restoring love for one’s homeland, which is to show concrete and practical effects above all in a tougher exclusion of foreigners and their uncompromising deportation — a program shared by the like-minded Swiss People’s Party.

— On a third side, Great Britain’s anti-European patriotism sees its rejection of a Europe programmed to “grow together” confirmed by the euro crisis and the results of the contradictions in its political management, or, more precisely, by the comforting notion of being far enough away from the “continent” to be less affected by the financial crisis than the euro countries. The United Kingdom Independence Party draws the radical consequence and calls for an exit from the failed enterprise, thereby shaking up the country’s landscape of established political parties. For other eurosceptic opposition parties, too — Geert Wilders’ Party for Freedom in the Netherlands, the Danish People’s Party, the Finns Party, the Sweden Democrats … — the economic crisis and the damage it has caused in their countries only confirm their fundamental rejection of the Union. They take European supranationalism more seriously than it has been, i.e., as actually forcing Europeans to abandon their traditional national standpoint and exchange it for a European one; this they reject. The material they find to demonstrate the wrongs the supranational community has done to their national ones is the poor immigrants, whom they blame on the EU, namely, its free movement for workers or its asylum policy. They identify the presence of foreigners as the real, tangible assault of “Europe’s artificial multiculturalism” on their nations: it blurs the line between membership and non-membership. By imposing the presence of foreigners, the EU alienates native citizens from their polities and thereby the national collectives from themselves. These alternative nationalists see the Union as deliberately making each people unsure of unconditionally belonging together, and as equally deliberately destroying everything a patriot wants to be able to be proud of. They don’t need Europe’s crisis for this diagnosis; but it could gain them support, so they hope.

— In some cases, disappointment about the nation’s failed path to success is directed less or not at all at the Union and its internal power relations but instead or mainly at the custodians of their own states, whose fundamental failure in their responsibility for the condition of the people is blamed for the consequences of the crisis and crisis-management policy. Spain offers an example of two different variants of this opposition. The regional parties of Catalonia, which have always maintained the standpoint that their province is undervalued the way it is incorporated into the centralized state and unjustly degraded to a mere province, know then who they have to thank for such disasters as a real-estate bubble gone bust and bank-rescue programs that are ruinous for the general public. Because they have from the beginning not perceived this situation from the standpoint of the entire nation but instead critically evaluated it in the name of their smaller “us,” as custodians of their politically prohibited (sub-)national cause, this situation demonstrates to them once more how Catalonia is being looted by an arrogant central power. Freed from such foreign domination, it could well be a successful part of the EU, a member of the winning euro team, which the rest of the country clearly does not belong to. In Spain’s center, a protest movement without such a (sub-)national substitute perspective articulates its radical politico-moral rejection of the ruling administrators of the national economy and its crisis, presenting itself as an electoral party called “Podemos” (“we can”). The title signifies a pure, collective self-encouragement to take political action without a political objective that could exclude any good will from the large community of the good-willed, and therefore goes well with the accusation that for the time being makes up the party program: corruption. According to this critical diagnosis, the political establishment is only out to line its own pockets instead of working for the good of the country; that’s why the treatment can only be: “Throw All Of Them Out!” A government has to put up with being completely subsumed under its moral lapses and any legal transgressions when there are no national success stories in sight to justify what else it does and how it treats its people. The Five Star Movement in Italy has won seats in both houses of parliament in the same situation and with the same moralism, enriched by an internet-fetishizing, authoritarian, grass-roots-democracy idealism, with polemics against finance capital and the German Chancellor, and with enough anarchic spirit to refuse all political cooperation.

The political positions on the spectrum between nationalism and political moralism, anarchism and separatism with which traditional as well as newly founded opposition parties are attracting attention are, just like the ubiquitous xenophobia, nothing new and not a product of the crisis. But their increasing strength is a symptom; and their agreement in uncompromisingly claiming that “it” can’t go on like this anymore with politics and its movers and shakers suggests of what: such an opposition shows that in the EU countries a pro-European reason of state, accepted in principle because it promises national success, is losing out as the solid foundation of a functioning democratic pluralism.

3. The EU’s new perspective:
The “Franco-German axis” is superseded by a struggle for and against Germany’s hegemony

The governments of the EU states — even in the two special cases of Great Britain and Hungary — are sticking to their Union: as the option promising the most success for their nations, as a political reality that for practical reasons can’t be readily terminated, and therefore as the enduring most important premise of their politics. But what they plan on this basis, and what they undertake in order to deal with their crisis situation and their so closely allied competitors, definitely no longer consists in continuing with their traditional Europe politics, which was aimed at consensually functionalizing the community, i.e., the other members, for one’s own increase in power and money, this politics being possible because and as long as each one’s — admittedly always very different — participation in a general growth made the contradiction of the project bearable and thus sustainable.

Instead, what is now at stake can be seen, and not merely as an example, in the relations between Germany and France, the two pivotal states of the eurozone and the EU’s leading powers. The contradiction of European unification has always been fought out and developed further in the relations between the two heavyweights. For decades, this took the shape of these two states seeking to agree as to how the relation between the individual state’s autonomy and “Brussels’” powers, between national self-interest and community budget management, between sovereignty and supranationalism, should be arranged. The notably effective method of establishing constraints of mutual dependence between the member countries, above all in the economic field, and of developing pan-European needs and powers for regulation on this basis, never worked on its own, but rather always required consensus between the two great powers to really become politically effective. This was always a consensus of unequal partners: between a globally successful capitalist colossus on the right side of the Rhine, which with its global money, the D-mark, set the standards for the competition of Europe’s national economies; and an economically more or less evenly matched nuclear power on the other side, which politically moderated the Germans’ economic predominance in the common market, prevented German hegemony in and over Europe, and thereby actually made possible and real the contradictory construct of a union of national sovereigns under collective leadership, with equal rights for all and a clear hierarchy between members: a combination that was still kept up, albeit with difficulty, even after the intra-European balance of power was shifted through Germany’s expansion up to the Oder-Neisse line and through the Free World’s front-line state being freed from the “Soviet threat.”

This “Franco-German axis” essential to the EU is now almost only mentioned in retrospect. It has become too obvious that the two sides no longer are really reaching this consensus, if they seek it at all. When the German government has for years blocked its French partner’s demand to communitize at least part of at least the new national euro debt to be taken on, or at least to assume a certain liability for it; when it currently turns down France’s request for a joint, community-financed growth policy and instead keeps on repeating its own demand for budget discipline and “structural reforms”; when it insists that France, too, has to reduce its budget deficits according to plan for fear of a “waning zeal for reform”; then this is not just a matter of different, basically incompatible economic policies being reduced to some common denominator in the typical European manner. Instead, the German side is expressing its fundamental disapproval of the policies pursued in Paris; it wants to make clear that it considers France a loser in the ongoing crisis competition and intends to treat it as such, no longer being willing to grant equal status in managing the European economic area and its wealth. Germany is presenting itself as clearly as still diplomatically possible as being the guarantor power of the European Economic and Monetary Union, the guarantor of the common credit-money and therefore the creditworthiness of the euro partner countries, thus also of France’s solvency. For Germany, the national interest in a strong currency and the enforcement of strict budgetary discipline in the euro countries on the German model and under German direction seamlessly coincides with the necessities of the Union’s economic survival. It is in the Union’s name that Germany contests even big partner France’s sovereign power of disposal over its national wealth, which is no longer solely its national wealth. When the French government, on the other side, fights for concessions on the budget issue and over a common growth policy, then it is thinking of the weaknesses of its nation’s capitalism that can at any rate not be remedied under the dictate of the ‘austerity policy’ demanded by Germany; it also has in mind the increasing unemployment in the country and a further reduction of its means for the social policy to handle it; and there is even more. What Berlin is calling for is a blow to the French state’s ability to act altogether, a blow that the government in Paris is expected not only to suffer but to carry out itself: from the French point of view this is little less than a betrayal of the great cause of the Grande Nation. And Paris is nevertheless unable to simply say no to what in fact and in its own eyes means degrading France to second rank in Europe.

Franco-German agreement, which has lost its basis and its meaning in terms of a Europe policy, has of course not been officially terminated by either side. But efforts to reach it have changed in substance. The one side is out to be conceded the assertion of its power to make policy; the other is fighting more to limit and whitewash its loss of status than to prevent it. There is at any rate no longer an “axis,” i.e. a continuation of the work of art of jointly dominating Europe. This means that Franco-German relations are not only losing their crucial basis, but the EU as a whole and the Monetary Union in particular are losing the vital condition for their functioning: the freedom of each member to fit in to the Union’s hierarchy and submit to a common regime, at the same time reserving the option of which side of the “leadership duo” to align with and in this way having a say about what happens with regime and hierarchy. This is being replaced by a power struggle over something new. The German side is aiming at leadership in the alliance (a claim it partly denies and partly asserts all the while sighing about how heavy the responsibility is); it wants a hegemony that was up to now shared with France and therefore wasn’t one. And since the partners are not being deprived of their sovereignty, Germany is not out for them to simply obey, but for them to consent to their subordination to the conditions decreed in Berlin for the sovereign exercise of national power, i.e., to fitting in to a hierarchy that is clear at last. The partners on their part are faced with the decision to replace their previous, Europe-oriented reason of state with a fight either against their subordination to Germany’s policy-making power or over how their nations can come to terms with it — or to actually risk the adventure of terminating their membership.