For an alliance of national liberation fronts – by Stefano Fassina MP

Stefano Fassina, MP and former Deputy Finance Minister of Italy, kindly sent me the following opinion piece. While convinced that the “controlled disintegration of the eurozone” that he advocates is pregnant with great dangers, this is a debate that Europeans cannot eschew.

The burning Greek tale has a general political value. Let’s start from the content of the Statement of the Euro Summit held on July 12th, before making any political assessments. It is impossible to hide the unsustainability of the provisions from economic and fiscal perspectives. Notwithstanding the adjustments won by the Greek delegation in Brussels, the imposed measures are brutally contractionary, as well as regressive on the social ground.
The macroeconomic compensation measures risk to be basically non-existent. The financing foreseen for the third bailout is devoted to recapitalizing banks and paying debts to the ECB, the IMF and private lenders. Nothing goes to capital expenditure, while the credibility of the European Commission in helping the Greek government mobilize up to €35bn for investments in 3-5 years has to be weighed against its inability to find the minimal resources for the “Juncker Plan”. And finally, the commitment to restructuring the Greece’s public debt opens a perspective that in any event won’t have real effects until 2023, the end of the grace period granted by the European states on their respective loans.

What lessons can we learn from the course of Greece? Alexis Tsipras, Syriza and the Greek people have the undeniable historical merit of having ripped away the veil of Europeanist rhetoric and technical objectivity aimed at covering up the dynamics in the eurozone. We now see the power politics and the social conflict between the financial aristocracy and the middle classes: Germany, incapable of hegemony, dominates the eurozone and pursues an economic order that is functional to its national interest and to those of big finance.

There are two points to be faced here. The first: neo-liberal mercantilism dictated by and centred on Berlin is unsustainable. The devaluation of labour, in alternative to national currency devaluation, as the main route to “real” adjustments results in a chronic insufficiency of aggregate demand, persistently high unemployment, deflation, and burgeoning public debt. In such a framework, beyond the borders of the dominant nation-state, the euro leads to a hollowing out of democracy, turning politics into administration on behalf of third parties and entertainment.

Is this route reversible? This is the second point. It’s hard to answer “yes”. Unfortunately, the necessary corrections to make the euro sustainable appear to be unfeasible for cultural, historical and political reasons. National public opinions have opposing views and confliting positions, made more distant by the agenda dominating in the eurozone after 2008. The views and positions prevalenting among the Germans are facts. German people deserves respect as any other people. In Germany, like everywhere, democratic principles matter within the only relevant political dimension: the nation-state.

The first two points of analysis lead to a unconfortable truth: We need to acknowledge that the euro was a mistake of political perspective. We need to admit that in the neo-liberal cage of the euro, the left loses its historical function and is dead as a force committed to the dignity and political relevance of labour and to social citizenship as a vehicle of effective democracy. The irrelevance or the connivance of the parties of the European socialist family are manifest. Continuing to invoke, as they do, the “United States of Europe” or a “pro-labour rewrite” of the Treaties is a virtual exercise leading to a continuing loss of political credibility.

What should be done? We are at a crossroads of history. On one hand, the path of continuity bound to the euro, that is, acceptance of the end of middle-class democracy and welfare States: a precarious balance of underemployment and social anger, threatened by very high risks of nationalistic and xenophobic rupture. On the other, a shared decision, without unilateral acts, to move beyond the single currency and the connected institutional framework, above all to fix the democratic accountability of monetary policy: a mutual beneficial solution, despite a difficult, uncertain path, with painful consequences at least in the initial period.

Germany has understood this and, still mindful of its history, indicates a way out to avoid a chaotic breakup of the eurozone and uncontrollable nationalistic drifts (already worrisome both among Germans and in their regard): a multilateral agreement to move beyond the single currency, as exemplified in the proposal of “assisted Grexit” written by Finance Minister Schäuble and endorsed by Chancellor Merkel. It implies not abandoning Greece to itself, but “an exit accompanied by haircut of public debt (impossible under the current Treaties) and technical, financial and humanitarian assistance.”

The choice is a dramatic one. The road of continuity is the explicit option of the “grand” conservative-led coalitions and “socialist” executives (in France and Italy for instance). The road of discontinuity may be the only one for attempting to save the European Union, revitalize the middle-class democracies and reverse the trend of the devaluation of labour. For a managed dis-integration of the single currency, we must build a broad alliance of national liberation fronts, starting from the eurozone’s Mediterranean “periphery”, made up of progressive forces open to the cooperation of the democratic right wing sovranist parties. The time available is increasingly short.

Stefano Fassina, Member of Parliament, former Deputy Minister of Finance, Italy


  • This tragedy is caused by two invisible demons: Sovereign debt debt, and trade imbalances. They’re invisible because people everywhere cannot see them clearly and the people of Europe have opposing moral beliefs about these unseen forces. People close to the Baltic sea consider trade imbalances benign while they see both sovereign money and sovereign debt as immoral. The mediterranean and Atlantic people see sovereign money and debt as benign, but see great risks in trade imbalances.

    What then is the outcome that Europe seeks? Currently, led by the Baltic people, Europe is marching to slay the demon of sovereign debt and money. In the process, the demon of imbalances is reigning free. If Europe succeeds, it will then have to slay the demon of imbalances or learn to live with it, for example by large institutional transfers. This path will be grim.

    If instead Europe chooses to slay the demon of imbalances first, we need to take some steps back. We need to revive the demon of debt and sovereign money to assist us, and we need to put some barriers in the path of imbalances. This is the path favoured by the Mediterranean people: we really should be fighting the demon of imbalances first.

    Maybe Europe can learn to live with both its demons, like the United States. But for that they both need to be put under control. The current approach of letting imbalances run free while strangling debt and money even in its benign form does not work. European people need to reach a common economic religion in order to get out of this crisis together.

  • This is huge and extremely important. Yani, please take this conversation forward with as much energy and determination as you can. Pay no attention to the fake shock-horror reactions of the oligarch newspapers this past weekend. The great majority of Greeks are 100% inured to their propaganda (and to external propaganda) and were simply relieved and thrilled to hear that this level of competence and national responsibility existed concerning Plan B. We are also horrified to discover that Troika holds the details of our bank accounts – the last group anyone can trust (since “Trust” is their fake issue). We also understand full well why they have our accounts – for more of their robbery (yes, that is exactly what it is) through bail ins.

    We on our part are organising a non-partisan Active Citizen movement inside Greece concerning Grexit.

  • Fassina is certainly correct. And just as Syriza tore off the veil they are going to have to lead this discussion. The Greek media every day are using this exit narrative to attack the government — not to mention certain ministers that have left — but Syriza needs to engage in a sort of ju jitsu trick and turn this back upon them by discussing a managed break up in rational rather than hysterical terms. If a managed break up does not occur an unmanaged one eventually will. That will greatly exacerbate nationalist tensions and will probably put the EU itself at risk — especially if exiting countries have to violate EU laws surrounding foreign trade and capital flows that they almost certainly will have to violate. In a managed exit these laws can be renegotiated temporarily to ease the burden of adjustment.

  • Moving closer to my position to reduce Brussels concentration of power and restore nation state civil liberties. Key element to unwind Eurozone and allow countries to leave, not only GREXIT. Also critical to reduce EU centralization and powers over member government, allowing different countries to chose their own path. The second point is a fundamental principle in the US, where States are laboratories with considerable local autonomy, not Soviet-style satellites.

  • I think he is right in principle and I hate to be a spoil-sport, but how on earth does Mr Fassina think this can be accomplished?
    It would be difficult enough to unite ‘the left’ with all its tiny factions constantly fighting amongst each other even within one of the nations itself, not to speak of building some kind of really international, or inter-european movement able to speak with one voice.
    But even if such a thing were possible, how would this pan-european left party rally the european people behind its cause?
    Except for Syriza, whose survival of the coming months of further negotiations with – and probably even more concessions to a fortified Troika is dubious at best, and maybe Podemos, who are also reported to have lost support cosiderably over the last few weeks, there doesn’t seem to be credible alternatives on the left in the other eurozone member countries. Especially not in the surplus countries of the north-west.

    On top of that, the propaganda campaign waged by the european media against a leftist greek government has been very successful in turning mainstream public opinion against any kind of socialist, or even truely social-democratic political movements. In fact it has mostly strengthened right-wing nationalists and anti-european parties like Front National or UKIP.
    The Germans and their friends have successfully turned an economic problem into moral question, while the left is still desperately trying to talk economic sense into people. Aside from the fact that they lack the billions of Euros worth of funding for extended propaganda campaigns that the conservatives have behind them, the left are at a clear disadvantage when it comes to public opinion. Ordinary people can much more easily relate to the moral issues brought up by the right than to complex elaborations about trade imbalances and monetary policy prevalent on the left.

    I think the only thing that the left can do at this point to save itself from total annihilation is to get off the high horse and start thinking about better ways to explain their point of view to the common folk, and if we have to go along with the morality tale then so be it.
    After all, it shouldn’t be too hard to explain the moral depravity of a capitalist system that takes from the poor and gives to the rich. Nobody needs to be a Marxian to understand this.