Yanis Varoufakis — Can Europe Escape Its Crisis Without Turning Into An Iron Cage?

This article is a sequel to an earlier piece entitled ‘Why is Europe not coming together in response to the Euro Crisis?’ and is best read in conjunction with this article (co-authored with James K. Galbraith) that compares our Modest Proposal for Resolving the Euro Crisiswith alternative proposals for defeating the Euro Crisis. In what follows below , I argue that, as things stand, ‘political union’, ‘more Europe’, calls for a ‘Eurozone economic government’, or for a ‘Euro Chamber’ within the European Parliament, are not preludes to a democratic federal Europe. Instead, they are steps towards a postmodern European feudalism that is, in fact, the very antithesis of a democratic federation. The article concludes with an analysis of why our Modest Proposal offers Europe a rare chance to prevent the creation of a European iron cage in which what is left of our democracies must suffocate. Unlike all moves that are currently heralded as ‘baby-steps’ towards federalism, the Modest Proposal’s emphasis on ‘Europeanised Decentralisation’ is perhaps Europe’s best shot at a future consistent with the basic principles of a constitutional democracy.

Can Europe Escape Its Crisis Without Turning Into An Iron Cage?
Yanis Varoufakis

In the midst of this legitimation crisis, as Jurgen Habermas might describe, Europeans are being lured into a dreadful Faustian bargain: accept less democracy, more centralisation, greater discipline now and, in the future, you may be getting something akin to a federal state. Alas, accepting this deal will not bring federation any closer. Instead, it will:

• Bolster the Euro Crisis
• De-legitimise the European Union further in the eyes of Europeans
• Replace whatever democracy we have left at the national level with consultative processes that Brussels uses in order to cement a permanent commitment to deflationary, highly redistributive (in favour, primarily, of banks and, reliably, of the top income groups) policies
• Reduce political debates on economic policy to technocratic discussions amongst unelected managers whose allegiance lies with the technocracy that was created to service the interests of the ubiquitous Central European cartel and an all-devouring financial sector
• Ascribe pretend- accountability to a European Parliament or a Euro- Chamber which, in reality, acts nothing like a parliament but, rather, uses the semblance of a parliament in order to conceal the fact that European Law is passed in the radical absence of a genuine parliamentary process, and
• Entrench in European law the dangerous idea that sovereignty is passé in the era of globalisation.

None of these developments is consistent with a sustainable European Union. At some point, Europeans will shake this monstrosity off their backs and escape from the iron cage under construction around them. Unfortunately, the resulting European disintegration will come at a horrendous socio-economic cost.