Opening Address: Angela Merkel, Federal Chancellor of Germany

The social democrats are dead: only a left bloc will challenge austerity’s dominance in Europe

Europe’s future hangs in the balance and the social democrats are either dead or floundering. As southern Europe heads to the ballots and the Troika’s time marches on, the radical left is our best option for a rebellion against the austerity consensus, says David Ferreira.

From Lisbon to Athens there’s a shared European tragedy of mass unemployment, cuts in public services, emigration, and precarious labour conditions following nearly five years of austerity measures enforced by the Troika – the tripartite coalition of the International Monetary Fund, European Central Bank and the EU Commission. The prospect of a Syriza victory in Greece’s general election has the architects of these austerity measures scrambling to partition this European experience.

Italians, Spaniards and Portuguese have nothing at stake in the Greek election, or so we are to be made to believe: Greece is a failure that is now ‘ringfenced’ while Italy, Portugal and Spain are success stories for the prosperity brought by the impoverishment policies of the Troika.

Of course, just last year Greece was being worked into the narrative of a Europe recovering from an existential crisis that nearly undid decades of integration. All that’s changed from last year to today is Greece’s political calender; Greeks will vote early and suddenly the country is once again a candidate for expulsion from the currency union. This isn’t nothing new for European authorities who routinely wield market panics to force out uncooperative governments, most notably in Italy with Silvio Berlusconi and in Greece following George Papandreou’s bid to host a referendum on the bailout conditions.

Through these long years of economic depression, there’s been no political will in Europe to defy the deference to Berlin on economic and monetary policy, a deference that allows Angela Merkel to impose austerity across Europe’s periphery. Many European social democrats invested their hopes in François Hollande’s presidency, hoping France would act as a counterweight and negate Germany’s policy hegemony. Instead, Hollande brought the heaviest austerity yet seen in his country. The hopes of Europe’s social democrats were then reinvested in the SPD (Social Democratic Party) ahead of the German elections, only for SPD to enter into a coalition government with Merkel’s Christian Democrats. Berlin’s preference for austerity remains unaltered.

There’s nothing inevitable, however, about a similar disappointment by Syriza should it take power following this month’s elections. The German and French centre-left were never going to risk rupturing the EU for the sake of bringing relief to Europe’s periphery.

The rebellion would have to begin in the south. It almost started in 2012 when Syriza narrowly lost in Greek general elections, but it would been impossible for the party to have succeeded then: it was entirely isolated as a left wing force competing for power on the European continent. This is about European diplomacy as much as it is about national politics, and today, the rise of Podemos in a major European country like Spain alters the political landscape. Syriza doesn’t have to fight its battle with the Troika on its own.

Spaniards, Greeks and Portuguese will all vote in general elections this year, and all three will likely see the centre-right decimated and left wing parties either winning or playing a decisive role in the centre-left’s ability to form a government. Consent for years of budget cuts, privatizations, and labour market deregulation risks snapping across southern Europe. The promise of these elections is the rise of a periphery bloc of left governments that can make common cause against Berlin’s hegemony over European policy. For a continent that has operated for years on putting off monumental decisions about its structure and future, there’s suddenly a single opportunity to force the issue, to offer an egalitarian alternative for Europe to contest the neoliberal vision of unity only in passports, markets, and currency.

Building this periphery bloc isn’t straightforward and would demand an historic compromise between left forces and the center-left in both Portugal and Spain. While Syriza has a realistic shot at forming a government on its own thanks to the the 50 bonus MPs awarded to the first place party, there’s no such shortcut for the Spanish and Portuguese left. Podemos has come a long way since its emergence last spring but it’s only at parity with the traditional centre-right People’s Party and center-left PSOE (Spanish Socialist Workers’ Party). The Portuguese left has failed to make the sort of political gains seen by the Greek and Spanish left but would still take roughly 13-15% of the vote, enough to deny the Socialist Party the majority it last won in 2005.

In both the Spanish and Portuguese cases the choice is between a centre-right, centre-left national unity government that would continue austerity or a coalition between centre-left and left wing. The very idea of aligning with the centre-left is heresy for much of the left on the Iberian peninsula. They look to Greece and see Syriza benefiting from the collapse of PASOK and can’t help hoping the same scenario repeats in their own countries. Give it another election cycle and several more years of austerity by a national unity government and this may very well happen. But by then, an isolated Syriza government would’ve already been forced to capitulate to the demands of creditor states or driven out of the Eurozone should it have opted for courageous defiance.

As difficult as it will be for the Portuguese and Spanish left to consider coalitions with the centre-left, the greatest doubt is whether PSOE and the Portuguese Socialist Party have the political vision to avoid repeating PASOK’s mistakes. Misguided notions of ‘national unity’ and governing responsibility may compel both to share power with the centre-right should the elections offer no clear winner as the polls currently indicate.

The difference for the Portuguese Socialist Party and PSOE today from PASOK in 2011 is that there’s no longer any hope of external salvation to encourage them to stall for time. French and German elections came and went with no alternation to austerity policies. The hopes that labour reforms and budgets cuts in the periphery would be followed by steps towards federalization and a fiscal union by Germany were nothing more than a rationalization for complicity. The Portuguese and Spanish centre-left can lock in their historic decline for the reward of sharing power with the centre-right, or they can defect to the left resurgence represented by Syriza and Podemos and revive themselves ideologically and electorally. It’s not easy to trust them to make the right decision.

A periphery bloc of left governments is the one shot at a good outcome. For five years there have been plenty of scenarios for things to go horribly wrong for Europe; these scenarios are even being brought back to intimidate the public in the lead up to southern Europe’s elections. For once, though, there’s a potential alignment of left political forces to argue that the status quo is both undesirable and unsustainable; that there’s an option to overhaul Europe, rather than just a binary choice of either submission to the Troika or apocalyptic break-up.

This one shot at a good outcome for Europe’s intractable crisis can start this month in Greece, but it can’t stop there. It must continue across the periphery and into the core. Either Europe is rebuilt today by the left or it will be smashed by the nationalist right tomorrow.

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Published 9th January 2015

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