Round 1 in Europe’s social struggle

Jürgen Klute explains why Greece is on the front line in a battle against failed EU policies

In your statement, you mention Greece being a “victim of machinations”. In what way do you think Greece is being targeted?

Klute: It is obvious that there is a campaign going on against Greece that aims at isolating the country. Greek politicians are targeted for having presented untrue balances which is particular implausible when we just learn that insiders in Brussels have tolerated this practices over years. Therefore, when European leaders point at visible internal problems, such as corruption and ineffective taxation, they try to isolate the country and hide that the dominant EU economic model of liberalization, privatization and export orientation is actually responsible for a “lost decade”.

The Greek government has highlighted the damaging role of international speculators. What effect do you think they have had?Klute: When seeking fresh capital, European countries heavily depend on private and internationally operating actors on financial markets. Both banks and rating agencies are exclusively interested in maximizing profits on the short run. In order to foster sustainable development, we therefore ask for two things: firstly, “Euro bonds” need to be introduced by European Central Bank. Secondly, financial market authorities need the right to suppress harmful financial practices.

The counter-argument to this would be that investors will always look to make a profit, so it’s up to governments not to give them the opportunity to be their victims. Isn’t the Greek government responsible for allowing itself to be exploited by the markets?

Klute: What seems true to me in this aspect, is that it is not helpful to debate about the crisis in a purely morally way. On the other hand, the free move of capital is one of the key principles of the Common market. Either, EU needs to introduce strong and effective solidarity mechanisms so that speculators will have fewer incentives to speculate against small economies. In addition, hazardous financial operations should not benefit automatically from the Common market principle of free movement for capital. In any case, it is crucial to remember that national government options are heavily restricted in the field of financial policy.

Die Linke suggests that the European Commission and neoliberal European governments are using the crisis as an opportunity to cut wages and increase retirement ages. If this is the threat, what is the response?

Klute: In October last year, European Commission issued a paper on the long-term sustainability of public finances. Accordingly, last years’ fiscal stimuli and rescue packages for banks shall be very soon financed by cuts in social pension and insurance systems. This proves in my view, that EU demands to the Greek government have nothing to do with a matched and sustainable solution for Greek economy. Furthermore, massive wage cuts as proposed contradict every common sense of justice and are therefore not likely to be an effective mean against corruption problems.

Some might argue that it is only right that wages and pensions be cut because Greece has been living beyond its means – would you disagree?

Klute: European Central Bank targets an inflation of less than two percent. This means that, every year, wages need to increase by two percent, as well. If not, living standards for employees decrease. This has, on the other hand, been the case in Germany that has made small countries pay for competitiveness gains based on unfair wage dumping. Public pension cuts are, by the way, also an enormous development program for private pension funds that will further boost oversized financial market. This certainly is no way of preventing bubbles for the future.

The government now imposing these measures in Greece is a center-left one and has a long Socialist history. If PASOK cannot resist these changes, then doesn’t it send the message that there is little the Left can do to halt this process, to present a credible alternative?

Klute: Unfortunately, EU treaties set up a very tight frame for national economic policy. For Euro zone members, there is no democratic influence on key aspects such as the currency’s exchange rate or monetary policies. If left governments are serious with their goals for a better life for their citizens, they imperatively need to build up European alliances in order to take influence in Brussels and Frankfurt where the ECB is based.

Die Linke scored impressive gains in last year’s German elections. Given the current economic climate, how do you think your party and parties of the Left throughout Europe can make a real impact on the political scene?

Klute: German Left party has primarily developed through the struggle for a decent minimum wage and against cuts for the unemployed. These demands are normally seen as national matters but, as I already mentioned, they are relevant to all countries in the Euro zone. In my point of view, the European left needs to interfere much more in debates about the future EU policies, such as the EU 2020 strategy or the reform of financial markets regulation.

As someone who used to teach peace education and intercultural dialogue, what is your view of the row that has broken out (mainly in the media) between Germany and Greece as a result of the crisis?

Klute: Usually, politicians claim that 60 years of peace between EU members are a result from economic integration. However, during the last decades, rigorous competitiveness policies go along with practically no common social standards. Especially in European middle classes, there is a growing (and grounded) fear of social degradation. I think this is why nationalist and racist tendencies in public opinion are getting constantly stronger everywhere in Europe.

Last week, Die Linke issued a statement in support of striking workers in Greece. Why did your party do that?

Klute: We have the strong impression that European leaders currently try to make an example of the “Greek case”. However, when implementing European Union’s demands, Greek government risks to effectively downsize its economy for many years to come. In fact, in the Greek strikers’ claim not to pay for a crisis they are not responsible for, we see the first part of a decisive social struggle all over Europe.

Some Greek politicians and journalists have raised the issue of German Second World War reparations. Do you think this is a valid argument or does it appear just to be a side issue that distracts from the main problem?

Klute: It certainly is a legitimate question why Greek resistance participants did not benefit from World War II reparations. On the other hand, it is unlikely that it will be helpful to introduce this aspect in the current debate; rather it is a question to be discussed apart, in a less emotionalized context.