Euro Crisis: Between the Streets and the Trading Floors

by Jerome Roos on May 28, 2013

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In this new paper, ROAR founder Jérôme Roos provides a theoretical framework for understanding the nature of popular resistance to austerity in Europe.

Between the Streets and the Trading Floors:
Popular Resistance and the Structural Power of Financial Capital in the European Debt Crisis

Jérôme E. Roos
European University Institute

Paper to be presented at the Fourth Annual IIPPE Conference:
‘Political Economy, Activism and Alternative Economic Strategies’
International Institute of Social Studies
The Hague, July 9-11, 2013

“The citizens will revolt against the dictatorship of the markets.”
~ Jean-Pierre Jouyet, President of the Financial Markets Authority in France



On June 28, 2011, as Greek lawmakers prepared to vote on an austerity memorandum demanded by the European Union and IMF, hundreds of thousands of outraged Greeks descended upon Syntagma Square to defend their livelihoods and contest the vote. With the country grinding to a halt in the first 48-hour strike since the fall of the military junta, and with the activists at Syntagma – who had already held Athens’ central square occupied for over a month – announcing their intention to encircle parliament and prevent the vote from taking place, international creditors and national authorities braced themselves for the worst. For two days, as police battled mostly unarmed protesters with inordinate amounts of asphyxiating gas, both the Greek people and global financial markets held their breath. A no-vote risked plunging Greece into a disorderly state of default, potentially unleashing a negative spiral of market panic that could culminate into a catastrophic collapse of the Eurozone. A yes-vote, by contrast, would condemn the Greek people to years, if not decades, of devastating austerity measures. As lawmakers voted and the square in front of parliament descended into chaos, sending echoes of Argentina’s 2001 default through the financial community, the fate of both Greece and global financial markets now seemed to hang in the balance. One of the two would have to give. As BBC Newsnight editor Paul Mason summarized the situation, “Syntagma Square had become the front-line of the global financial system,” (2013:99).

Eventually, the creditors won. The austerity memorandum was passed. EU leaders and global financial markets let out a sigh of relief. Unlike Argentina, Greece would continue to service its debts to foreign bondholders. But for those who experienced the state crackdown from up close, the dramatic events of June 28-29 in Athens raised a number of profound questions. How could the democratically elected representatives of a center-left party (PASOK) that claimed to represent working people turn so resolutely against their own constituency? How could a supposedly democratic state ever become so unresponsive to the needs of its own people, so violent towards peacefully protesting citizens, and so submissive to the demands of foreign creditors? And, perhaps the most puzzling question of all, how could a group of unarmed citizens peaceably assembled in a leafy square in a small peripheral country whose GDP constitutes a mere 2 percent of the Eurozone total ever come to be considered an existential threat to the monetary union, let alone the global financial system? Clearly, these questions force analysts of the crisis to confront the fundamentally contested concept of power. In fact, it seems that in June 2011, Syntagma briefly became the principal battleground in a global power struggle that has come to define the neoliberal era; a struggle that has already been playing out across much of the developing world for the past three decades but that has only recently penetrated into what was once the First World. It is the struggle of the people against the banks; of debtors against creditors – of the streets against the trading floors.

This paper concerns itself with this power struggle as it continues to unfold in the ongoing European debt crisis. Rather than pursuing an in-depth empirical investigation of the crisis itself, however, the paper instead aims to revive the contributions of a number of critical theorists in political economy in an attempt to provide an alternative conceptual framework for understanding the growing power of global finance over nation states, and the way in which these changing power relations at the transnational level are transforming predominant forms of political activism and social struggle within nation states. Most importantly, it argues that the ability to withhold much-needed credit endows private investors with a form of structural power over elected officials, allowing them to discipline government behavior without having to resort to direct political pressure. To expand on the ideas developed by Charles Lindblom, today’s globalized financial markets have come to resemble a prison – an automatic disciplinary mechanism that “is not dependent on conspiracy or intention to punish” (Lindblom 1982:237). With the capitalist state trapped in this global debtors’ prison, and with a generation of neoliberal technocrats now seeking to internalize the dictates of market discipline into the state apparatus, European citizens have become ever more aware of the limits to state-oriented forms of political activism (Holloway 2013). In other words, the way in which the ongoing European debt crisis is being managed has given rise to a widespread crisis of representation and a concerted move towards more autonomous forms of popular resistance that reject the political system altogether and seek to maintain living standards and bring about social change through direct action, mutual aid and prefigurative politics instead (Hardt and Negri 2011; Graeber 2011a).

After briefly outlining the deepening crisis of representation in Europe, the article moves on to present a theoretical discussion on the structural power of business, the nature of the capitalist state, and the changing dynamic of the debtor-creditor relationship in the contemporary global financial structure. By elucidating the inherent limitations to transformative state action within global capitalism, this theoretical discussion not only seeks to provide an alternative framework for understanding the ongoing European debt crisis, but also tries to provide a theoretical political-economic underpinning to some of the main claims resonating among activists in the emerging Real Democracy Movement.

Read more…


Jérôme E. Roos is a PhD researcher in International Political Economy at the European University Institute in Florence, Italy. His research focuses on the structural power of financial capital in the management of international debt crises and the implications for the quality of democracy. In addition to being the founder and editor of ROAR Magazine – an online journal providing critical reflections on the crisis of global capitalism and the ongoing cycle of protests around the world – he also serves as a volunteer for Take The Square, the international wing of the 15-M movement that helped coordinate the global days of action on September 17 and October 15, 2011. Together with Leonidas Oikonomakis, he is the director of Utopia on the Horizon (2012), a short documentary on the Real Democracy Movement in Greece. Jerome has appeared for interviews on Al Jazeera, BBC World and Russia Today, and his articles have been translated into Spanish, French, Italian, Portuguese, Turkish, Greek, Arabic, Persian, Russian, German, Dutch, Finnish, Slovenian and Polish.

{ 2 comments… read them below or add one }

Michel Baga May 29, 2013 at 23:07

Goeiedag Jerome,
een vraagje voor jou, een dilemma voor mij: is de beweging van die komiek uit Genova, waaraan ik mee wil doen, een voorbeeld van kleinburgerlijk reformisme? Hoe beschouw jij dat fenomeen?
Alvast bedankt,


Steven Frans May 30, 2013 at 20:07

Very interesting paper. My only remark would be that the opposition, or at least difference, you seem to see between the ‘real’ economy and the financial markets doesn’t really exist, or at least isn’t really that sharp. The structural power ascribed to financial capitalism followed from the deep crises that surfaced in the so-called real economy starting in the 60s. There weren’t enough profits to be made in the productive sectors of the post-war Western welfare (or at least state-managed) economies and apparently the only feasable or best option at the time for capital was to turn to the neoliberal model of global financial, rentier capitalism. But with this move, the ‘real’ economy didn’t disappear or succumb, manufacturing and increasingly also services were moved to developping nations but the Western transnational companies kept their firm grip on those delocalized productive sectors. Those companies forced those nations to open their borders for global capital flows so that profits kept flowing back to the Western financial centra and this in turn helped the US and the EU to keep accumulating capital and thus to grow. The credit / debitor relation (to which your paper attributes great powers) was, in my opinion, a logical consequence and welcome by-product of this modern age of capitalism which indead helped to secure capital’s firm grip on nation states all over the world but isn’t the only prison the 99% need to free themselves from. So yes, deepen the crisis but not just by saying no to debt, by defaulting, but by overcoming capital’s reign as such, by saying no to capital accumulation dictating human need and labour. I think the last sentence of your paper indead is the way to go ;-)


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