I would like to comment on the article “Greece did not cause the euro crisis” by former Greek Prime Minister Costas Simitis, published in The Guardian on 26 April.
While I agree with the economic arguments for the crisis listed by Mr Simitis, I certainly cannot agree with his general conclusions. To some extent, the article seems to be an attempt at justifying his own errors in government.
According to Mr Simitis, the fault for Greece’s external debt and the euro crisis lies anywhere else but with Greece.In my opinion, the cause of Greece’s debt crisis is Greece itself. And the economic situation in Greece, compared to that in other Eurozone members, is the cause of the euro crisis.
Consider the following question: why do the eight most advanced European welfare states (Sweden, Finland, Denmark, Norway, Holland, Germany, Austria and Switzerland) not have a similar problem with their external debt? Why are they not experiencing the same economic problems as Greece?
There are three reasons for the problems of Greece:
1. The neoliberal politics of the two major parties, Pasok and New Democracy, which have ruled the country in the last 30 years;
2. The undeveloped Greek democracy;
3. The undeveloped Greek economy, which cannot compete with the economies of the other Eurozone countries.
The neoliberalism adopted by Pasok and New Democracy has resulted in that the two parties are now ideologically identical, differing only in their leaders’ names.
The latest stage of the capitalist system in which we live, neoliberalism, which spread around the world in its American version in President Ronald Reagan’s days, is not only an economic doctrine, but also a powerful ideology affecting all social areas of life and shaping people’s values in a way different from that of previous times.
Three core elements distinguish neoliberalism from traditional capitalism:
Globalism, with dictatorship of the market and rejection of the national state;
A ruling financial oligarchy (the private banks);
Total rejection of the ‘real democracy’ achieved by Europe in the 20th century.
If you watch Canadian director Richard Brouillette’s excellent documentary film ‘Еncirclement. Neo-liberalism ensnares democracy’, which presents the views of some of the most renowned thinkers of today, you will understand how deeply reactionary an ideology neoliberalism actually is.
Arriving in Europe, neoliberalism has gradually destroyed the old left powers and brought all political parties, left and right, to one and the same way of thinking. It is destructive to the European welfare state, which is completely different from the neoliberal American state.
The European welfare state is a humane state created for the people and their needs, a fair state which brings society to material and spiritual prosperity and is considered the most highly developed rule of law democracy in the world. Neoliberalism, in contrast, takes us back to the initial predatory form of capitalism and brings with it widespread poverty and misery.
Mr Costas Simitis does not once mention neoliberalism in his article.
The Greeks pride themselves in being the fathers of democracy. But in the 21st century, classic Greek democracy in Europe was enriched with new features and principles, in the democratic model of the European welfare state known as ‘real democracy’.
Real democracy in Europe adopted essential new principles:
1. Strict adherence to the supremacy of law, which minimizes corruption in society, opens vistas for swift, properly channeled economic development, and is the basic tenet of the European rule of law state;
2. Introduction of new forms of people’s rule, by which the people truly and completely transparently govern their own country or control its government;
3. Enforcement of ‘the fourth separation of powers’ (my term), which fights corruption by separating business and corporate interests from politics and government and does not allow for the creation of an oligarchy
* ‘The fourth separation of powers’ is the crown of ‘European real democracy’ which not only distinguishes it from, but elevates it above American ‘representative democracy’, and makes it be regarded as the most advanced democratic model in the world.
The above principlesmake for an uncorrupted and nationally responsible political elite which asks for people’s opinions on all matters, accounts for every penny of taxpayers’ money spent, and rules honestly and transparently.
It was along these principles of ‘real democracy’ that the majority of Finns opposed their country’s participation in the European Crisis Fund’s bailout package to Greece and made politicians pay attention to the voice of society. In accordance with the ‘fourth separation of powers’, four Members of Parliament in Finland were recently sentenced to prison and fined for breaking the law in their election campaigns. Far from being anti-humane, this act served to prove the strength of the Finnish rule of law state, where laws are strictly observed.
The eight most advanced European welfare states which I previously mentioned have solid, highly productive economies capable of securing employment for their people and paying off external debts.
The above-said raises a few questions to Mr Simitis:
1. How well do these principles of real democracy function in Greece?
2. Why is corruption so rampant in Greece that the country is considered to be the most corrupt in the Eurozone?
3. Is there a real separation in Greece between business interests, on the one hand, and politics and government, on the other? And why is the country’s political elite so close to the business sector, especially that of banking, thus forming an oligarchy?
4. Why does Greece not have a productive economy, but a 60% offshore economy and a banking sector which exports the country’s money to unknown locations?
5. Has a single politician in Greece ever be convicted for breaking the law?
6. Finally – is Greece a rule of law state and is it a welfare state?
After the Second World War, Europe embraced peace and made war no longer possible on its territory. Since then, the only decisive factor for the prosperity of a nation has been the LEVEL OF DEMOCRACY. In Europe, all countries are sovereign states which resolve their problems internally, independently, and always peacefully. No one is capable of imposing from outside, by means of violence or bombs, any decisions which run counter to those of the sovereign European states’ real democracies.
The countries in Europe where the principles of real democracy work well and the level of democracy is high are rapidly moving forward to prosperity – an undeniable fact when one considers their constantly rising standard of living.
Since neoliberalism rejects democracy, it was able find a place for itself in countries with an underdeveloped democracy, putting a stop to any potential further development. Mired in neoliberalism are the Eastern European countries of the former Soviet Bloc: in 1989, they came out of their totalitarian regimes unacquainted with democracy and were easy prey for neoliberalism, which has now completely stopped the development of democracy in these countries and has seriously damaged their economic and social systems.
Victims of neoliberalism are also the Southern European countries (Greece, Italy, Spain and Portugal), where, in comparison with the 8 most advanced welfare states, the supremacy of law and the rule of law state do not function properly, the welfare state is not well developed, the political elite is corrupt and corruption runs high. It is no coincidence that precisely these countries were the first to fall into a deep neoliberal crisis.
Neorealism’s rejection of democracy is why countries with differing levels of democracy and consequently differing levels of economic development entered the Eurozone – i.e., both countries with developed and undeveloped economies. And the adoption of a single currency has resulted in the greatest injustice of all: economically developed countries having to pay off the debts of economically undeveloped countries such as Greece.
There can be only one conclusion. Both problems – Greece’s external debt and the crisis of the euro – can be overcome only if serious reforms are made within Greece itself, starting with major POLITICAL reforms followed by economic such. Greece must enforce the cast-iron principles of real democracy and the European rule of law state as in the 8 best-developed welfare states, it must start to observe the supremacy of law and only then proceed to major economic reforms in order to build a new kind of economy – a productive economy which will make the country competitive with the developed members of the Eurozone instead of being a burden to them.
The euro is a great achievement for Europe and must be preserved, but new rules have to be applied.
Only countries with the same level of economic development must remain in the Eurozone. These are Finland, Holland, Germany and Austria, which also follow the same social model. This will not be an elitist project, but a change of rules in the Eurozone which will help stabilize the euro. All other EU member states will have to try and fulfill the criteria of these economic high performers in order to enter the Eurozone and become rich and prosperous. To that end, they will have no choice but to apply the principles of ‘real democracy’, which is the only way to surmount the euro crisis and preserve the euro.
Similar problems face the USA and its ‘representative democracy’.
The European ‘fourth separation of power’ does not exist in the USA and the country has become a private state run by oligarchic corporations. A case in point is the way in which private corporations actually form the government. Treasury Secretary Timothy Geithner represents Goldman Sachs, the largest banking and insurance consortium, which together with the Federal Reserve System rules the country. It emerges that President Obama governs nobody, and the actual governing is in the hands of the FRS and the big oligarchic corporations.
To avoid bankruptcy, the USA must:
1. Return the principle of rule of the people to its constitution and give the American people the right to run their country. This is, in fact, what the Occupy Wall Street movement is calling for.
2. Enforce, by way of political reform, the European ‘fourth separation of powers’ in order to fight corruption by separating corporate interests from politics and the country’s government. This should happen in Congress, but the US Congress is ruled by the oligarchy which runs the country, thus excluding the people from governing their own state. In my opinion, a new POLITICAL WAY must be found first in the USA, which will benefit the rest of the world. All eyes are on the USA in anticipation of reforms, and we expect real actions on the part of the powerful American intelligentsia.
The "real democracy" of developed European countries is their "immune system" to preserve freedom and protect national interests. For example: now U.S. financial consortium "Goldman Sachs" buys hard the external debt of Western European countries using the neoliberal policies of "game with an empty paper-bonds" in order to make them dependent on U.S. and stow their money. But it hits a stone, because the United States, proceeding from the thinking of its representative democracy, is facing the European Iron Wall of the "real democracy" and the U.S. experience to make their satellites is completely unsuccessful.
The "Real democracy" in Western developed countries are "their healthy social and political instincts."
In recent elections in Greece wins new left nationalist party SYRIZA carriers of new left ideas of the real European democracy. Greek people are first of the other Balkan nations realizes the power of the "real democracy", with its levers to escape from the crisis events and will powerfully to follow its path and the path of developed European democracies.
Author’s note: The separation between economic (corporate) and political power is the most recent development in the European welfare state after the Second World War and has so far been enforced by ‘conflict of interest’ laws. * ‘The fourth separation of powers’ is a provisional term of my own coinage. Previously, there have been two widely accepted theories of ‘separation of powers’ – John Locke’s and Charles de Montesquieu’s, the latter of which (1748) divides power among an executive, a legislature and a judiciary. It is still arguable whether John Locke separates judiciary power from political power.
Author: Dora Apostolova-Kestilä*
28 April 2012.
Helsinki
* Dora Apostolova-Kestilä is a historian and political philosopher. Born in Bulgaria, for the past 30 years she has lived in Finland. She does research into the rule of law and the democratic aspects of the European welfare state, investigating the model of Finland, which is regarded as the best-developed welfare state in Europe (Tony Judt, "Ill Fares the Land"). She has formulated the principles of its democratic model – ‘real democracy’ – and proposed ‘the development of the welfare state and its democratic model – real democracy’ for the emergence of a new left idea in Europe to oppose the extremely radical neoliberalism. In Bulgaria, she is the founder of the non-government organization Movement for Real Democracy – An Idea for Bulgaria (www.ideyazabulgaria.org), which aims to popularize the ideas of real democracy in the country.