Misguided Euro Skepticism The Dangerous Nationalism of Europe's Left
Rather than embracing euroskeptics on the populist right, Europe's leftists should throw their support behind center-left French President Macron's policies to create a stronger eurozone. The alternative is a splintered left and stronger right.
The father of the October Revolution had only been dead for a few months when, with just a few short sentences, his successor turned the state doctrine of the time on its head. Whereas Lenin had taught that communism could only be implemented after a successful global revolution, Stalin gave priority to the socialist development of his own nation. At a party congress in 1925, he held that a proletariat paradise could be created in the Soviet Union together with the farmers under the leadership of the working class, thus establishing his "Socialism in one country" theory, which from that point on would divide the communist movement between the nationalists and the internationalists.
If looks aren't deceiving, that bygone conflict has re-emerged within the political left in Western Europe today. As moderate center-left social democrats like France's Emmanuel Macron or Germany's Sigmar Gabriel are working toward a European economic and financial government to shore up the common currency, a growing community of more radical leftists are also pushing for the opposite: a return to the nation-state.
In Britain, Labour Party leader Jeremy Corbyn is only slightly more amenable to the European Union than his Conservative Party opponent Theresa May. In France, Socialist Party presidential candidate Jean-Luc Mélenchon ran a campaign against the euro, the rich and the "German poison," and garnered 20 percent of the vote in the process. And in Germany, leftist thought leaders are now speaking as vehemently of an alleged "Brussels machine stripping us of democracy" as they used to about international finance capital. Sociologist Wolfgang Streeck, for example, who once advised the government of former Chancellor Gerhard Schröder of the Social Democrats on labor-market reforms, today criticizes Macron's ideas as a "putschist path to European unity." And former Left Party leader Oskar Lafontaine says he would prefer to blow up the currency union because it is "dividing Europe rather than holding it together."
Right Is the New Left
These leftist nationalists claim to be progressive and class conscious. They regard themselves as the champions of disenfranchised pensioners and unemployed Southern Europeans and wage their battle under the banner of democracy. But they cannot hide the fact that their answer to Europe's unresolved currency crisis, at its core, is the same answer given by Marine Le Pen and Geert Wilders. Like the Continent's leading right-wing populists, they believe Europe's future lies in its past, in borders and capital controls along with the reintroduction of the deutsche mark, the French franc and the Spanish peseta -- as if all this could even out the Continent's economic conflicts like some kind of spa treatment.
Right is the new left, the radical critics chirp in stylish, modern image campaigns. But the truth is that they are all on a wrong and dangerous path. Europe's nation-states are too weak to keep up with a global economy that is coalescing; and the nostalgic romanticizing of the pre-euro age cultivated by those currently despising Brussels -- from Podemos in Spain to Frauke Petry in the right-wing populist Alternative for Germany party -- has little to do with reality.
Let's start with the fact that the Continent during the 1980s and 1990s was at least as economically divided as it is today. Back then, interest rates in Europe's southern countries were generally several percentage points higher than those in northern countries because investors constantly had to worry about exchange rate adjustments.
Southern Europe Has Greater Influence Today
That weakened the economy and hit the lowest strata of society hardest. It was Southern Europe's workers, pensioners and small-business owners who suffered the most when, as a consequence of one of the many currency devaluations in Portugal or Italy, the prices rose again and ate into peoples' savings. Indeed, it was when the lira and the drachma were in circulation that southern Italy and Greece became uncoupled from modern Europe.
"We want to take back control," leftist euroskeptics exclaim with the same vehemence that accompanied the conservative Brexit campaign. Yet the influence that Southern Europeans have on monetary policy today is greater than it was in the past. To Germany's irritation, the so-called Club Med group of countries has a majority in the European Central Bank. But in the pre-euro era, the formally independent central bankers in Rome or Paris had to mimic pretty much every interest rate decision made by their counterparts at the Bundesbank, Germany's central bank, in Frankfurt, because the deutsche mark dominated foreign exchange trading on the Continent.
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The international financial markets were among those who profited from Europe's monetary diversity. The exchange rates may have been set by the European Monetary System (EMS), but given the fact that adjustments were possible at any time, periods of economic weakness offered adventurous investors the opportunity to speculate on the possibility of future currency devaluations. The prime example was Hungarian-American finance magnate George Sorors, who made a billion dollars when he wagered against the British pound in 1992.
But nothing gets radical critics of the EU more worked up than the domination of big money. And this raises the larger question of whether they truly want to replace reliance on the alleged austerity diktat from Brussels with reliance on the Bundesbank and globally-acting speculators.
Yes, the Eurozone Needs Fixing, But There Is a Way
The Mélenchons and Lafontaines of the world are correct when they say the currency union is badly designed. They are merely identifying the wrong reasons. The problem isn't that Brussels has too much power -- it's that it has too little.
The eurozone is the world's second-largest currency area, but it doesn't have its own budget, it can't assess taxes and it can't borrow money or pursue its own economic policies. Instead of a single finance minister for the eurozone in Brussels, three different commissioners are responsible -- people whose names nobody knows, because they have no real power.
The true power lies with the 19 finance ministers of the eurozone member states who make all important decisions behind closed doors -- without adequate parliamentary oversight, but with a clear view of their national budgets, interest groups back home and the next election.
The result is that things that need to get done aren't getting done. The finance ministers have been promising, for example, to implement a Europe-wide tax on financial transactions for six years now. But because domestic banking lobbies oppose it, the levy still hasn't become a reality. Year after year, German Finance Minister Wolfgang Schäuble and his eurozone counterparts listen politely to European Commission recommendations for national taxation and spending policies -- only to immediately forget them. They argue incessantly about France's budget deficit and Germany's trade surplus, but no one acknowledges the fact that new borrowing in the eurozone has been under the 3 percent criteria laid out in the Maastricht Treaty for four years running, and that the community's collective trade surplus isn't even half that of Germany's.
That's why creating the institutions within the eurozone that have historically proven to be effective instruments in taming capitalism is, in fact, a deeply leftist project. If there was such a thing as a European unemployment insurance or an EU-levied tax, the eurozone would finally have what economists call "automatic stabilizers": In crisis situations, money would flow automatically from richer to poorer regions.
If the eurozone were steered by a finance minister and controlled by its own parliament, the monetary community would finally have a democratic structure. And if it had its own budget, European Commission President Jean-Claude Juncker would no longer have to tediously drum up money from member-state development banks every time he wants to stimulate investment across Europe.
The eurozone currently lacks virtually all the instruments that British economist John Maynard Keynes once considered necessary to balance out economic fluctuations and counter economic crises. Macron wants to remedy this deficiency. It would take years to implement his plans. But it would be worth it, because as Social Democrats well know, history does not head toward an historically determined end point. Rather, the journey itself is the goal.
Euroskeptics on the left must answer the question as to whether they really want to flee into the past and, by doing so, boost the right wing. That already proved to be a grave error once before: At the end of the 1920s, Germany's Communists -- inspired by Stalin's nationalist ideas -- declared the more internationalist-minded Social Democratic Party to be their sworn enemy.
The division of the left at the time, as we now know today, contributed to the rise of fascism.