Let’s just put it bluntly: anyone who still believes a victory of Francois Hollande in today’s French presidential elections is going to change even the tiniest little thing about Europe’s crippling debt crisis is completely deluding themselves. If the events of the past three years have taught us anything, it is that politicians do not rule Europe — financial markets do. It was true when Mitterrand came to power thirty years ago, and it is even more shockingly true today.
Much more important for the future of the continent will be the inevitable Greek bankruptcy. For the constitution of the European Union will not change through timid reform, but only through radical institutional measures imposed in response to total social chaos. While Hollande has promised to renegotiate the eurozone growth and stability pact, it won’t be until a full-blown Greek default that we might start seeing the emergence of a real alternative to austerity.
This is why, even though both Greece and France are going to the polls today, I refuse to read the news. Not because I do not care about politics — I have made a point of studying it for most of my life — but because I do not believe that the outcome of either of those elections will make a very big difference for the future of our continent. Yes, of course the outcome may be an important indicator of the social mood and the rising resistance against the politics of austerity. But in the grand scheme of things, it won’t be Hollande or Sarkozy calling the shots — it will be the powerful institutional investors who do.
Lest I be accused of political apathy, let me clarify straight away that I am neither misanthropic nor deterministic about Europe’s future. The future remains to be written, and popular resistance against the politics of austerity will be crucial for shifting the dynamics away from the neoliberal assault on social welfare and democratic principles. But today, in the 21st century, the decisive battles for the future of humanity are no longer fought in Parliaments and Ministries; they are fought on the trading floors and in the streets.
There are multiple reasons why the election of the Socialist candidate will fail to make a big impact on the future course of the eurozone debt crisis. First of all, French banks still hold the majority of Greek debt. They will exercise enormous pressure on Hollande not to renegotiate the austerity pact — and they will win. Secondly, Germany, the unquestioned European hegemon, will do the same — and they, too, will win. While Orwellian concessions might be made, such as the inclusion of an emphasis on “investment and growth”, the institutional coordinates of the crisis-ridden eurozone will remain the same.
The only thing these elections are likely to change is the popular perception of the system. By talking about growth, jobs and investment, Hollande might — just like the Argentine President Kirchner before him — help to sustain the illusion that the ills of the capitalist system can still be fixed through a change in policies. As the neo-Keynesian economist Paul Krugman so simplistically put it in the New York Review of Books, “The truth is that recovery would be almost ridiculously easy to achieve: all we need is to reverse the austerity policies of the past couple of years and temporarily boost spending.”
Obviously things are not as “ridiculously easy” as Krugman or Hollande would have it. The truth is that Europe’s problems, at the end of the day, are structural. This crisis is not the result of “bad” policies, nor can it be solved through “good” policies. Ultimately, the crisis is a logical outgrowth of the financialized capitalism of the neoliberal era combined with a dysfunctional institutional set-up that hopelessly seeks to balance deep economic integration at the European level with the survival of archaic representative institutions at the national level.
The eurozone debt crisis arose out of the internal contradictions of global capitalism — stagnating wages feeding into a capital surplus that had to be recycled by financial institutions, which in response bought up profitable but ultimately unproductive assets, like Spanish and Irish mortgages or Greek, Portuguese and Italian bonds. Solving the debt problem would require a massive restructuring of these bad loans (i.e., an unprecedented mass default) combined with a currency devaluation for the crisis-ridden periphery (i.e., a euro exit).
Hollande hasn’t proposed anything along these lines — and that in itself is no surprise. Social democrats are not particularly known for their radical bravado, and representative democracy as such was never really designed to produce radical solutions to structural crises. A more existential question is whether nation states can do anything to govern global markets to begin with. In this respect, Hollande’s campaign slogan, “le changement c’est maintenant”, rings about as hollow as Obama’s “change you can believe in.”
The elections in Greece are only marginally more interesting; not because Greek politicians can be presumed to have any form of policy autonomy (as it stands, the Greek government is in a state of total dependency on its foreign creditors to be able to keep paying its public employees), but rather because, as Costas Douzinas recently put it, “This is the first time a radical left government has been seriously on the cards in Europe.” Even though such a radical left coalition is highly unlikely to be formed, the formation of the next government will probably be mired in chaos.
The outcome of today’s elections in Greece is unlikely to yield any absolute majority, nor a very straightforward coalition. This means that the country may literally become ungovernable. A technocratic caretaker government may be called for by the President, but it is questionable how effective it will be in carrying out the demanded austerity measures — in particular in the face of continued popular resistance in the streets. Ironically, therefore, Europe’s only hope for a genuine alternative hinges on the very real possibility that Greece — a critical link in the chain — may simply descend into chaos.
At that point, a Greek default and euro exit could finally force the type of institutional change that “anti-austerity” leaders like Hollande are so terrified of proposing today. Sadly, it seems, in today’s era of broken dreams, our political representatives govern only through their incapacity to govern.