Jayati Ghosh — The Failed Project of Europe

There is a stereotypical image of an abusive husband, who batters his wife and then beats her even more mercilessly if she dares to protest. It is self-evident that such violent behaviour reflects a failed relationship, one that is unlikely to be resolved through superficial bandaging of wounds. And it is usually stomach-churningly hard to watch such bullies in action, or even read about them.

Much of the world has been watching the negotiations in Europe over the fate of Greece in the eurozone with the same sickening sense of horror and disbelief, as leaders of Germany and some other countries behave in similar fashion.…

Whatever happens, the economic and political landscape of the European Union is now changed fundamentally. The humiliation of Greece today will come back to torment European leaders tomorrow. The co-operative ideal of a united Europe is demolished forever, and the reality of the project as a measure in the interests of finance capital, enforced by the German state and fundamentally at odds with any real attempt at people’s participation, is now laid bare.

So there’s now no question about it: this European marriage will not last. At least three reasons make this denouement inevitable. First, a monetary union without some modalities for fiscal transfers cannot last because the requirements placed on deficit countries to adjust are too severe and essentially unachievable; yet the pressure in Europe are pushing towards the opposite of fiscal union. Second, this strategy in any case generates severe deflationary pressure in which the only impulse for expansion must come from outside, that is net export growth, and even that cannot prevent stagnation, which means worse labour market conditions, worse prospects for the young, more inequality and so on. Third, the growing tension between these institutions and popular reaction cannot be completely controlled by finance capital and its agents. The political tensions can be expressed from the left (like Podemos) or the right (like the Front National) but they are definitely growing across Europe and sooner or later they will find some reflection in policies. In the current context that implies not greater integration but disintegration in Europe.

The only questions now are: how long will it take before the breakdown becomes explicit?  

Triple Crisis
The Failed Project of Europe

Jayati Ghosh | Professor of Economics at the Centre for Economic Studies and Planning, School of Social Sciences, at the Jawaharlal Nehru University, New Delhi, India