Nicola Sturgeon, unlike too many other European social democrats, has been true to her political values: she has spoken out clearly against the dead-end option of imposing yet more “crude” austerity on Greeks in the run-up to Sunday’s (July 5) referendum on the Eurozone/Troika “offer.”
She has called for urgent debt relief for Athens – the only viable option and one that can be tied to genuine economic reforms promoting growth, not just “internal devaluation” (poverty, wage/pension cuts). And, rightly so, she has warned EU leaders against making “bad history” by forcing Greece out of the euro (perhaps even out of the EU) in the event of a No vote.
Scotland’s First Minister is not unique in her analysis: it’s one made by many economists, political scientists, even politicians and they have clearly influenced her. But few other centre-left government heads have adopted it: Francois Hollande, the enfeebled French president, has slightly broken ranks with Angela Merkel on the need to cut a pre-referendum deal; Pierre Moscovici, EU economy commissioner and fellow French socialist, is more emollient than Jeroen Dijsselbloem, Eurogroup president and a Dutch social democrat whose own PvdA party is in freefall; Matteo Renzi, Italian premier, is all huff and no puff.
Sigmar Gabriel, Germany’s vice-chancellor and SPD head, is now an unashamed austerian under savage attack by his country’s trade union leaders and some social democrats for his craven adoption of the Merkel-Schäuble demand for “regime change” in Athens. British Labour politicians – aside from, say, Jeremy Corbyn and Neil Findlay – have been barely even lukewarm. The main reason is obvious: Syriza, with all its naive incompetence at times, challenges mainstream social democratic parties’ complicity in failed austerity.
Sturgeon also has the merit of consistency: throughout the GE2015 campaign she spoke out strongly against “simply piling austerity on top of austerity.” But her position, that of her government and of her party is not as clear-cut as that. George Kerevan, journo turned backbench MP, seems to favour a return to the drachma; Stewart Hosie, economy spokesman in the Commons, worries about “contagion”; and the Scottish Government has little or nothing to say of any value talking vaguely of “brinkmanship” between the “institutions” and Syria ministers. The problem is, indeed, more deep-rooted. Sturgeon’s and the SG’s policy towards Europe is full of contradictions.
The First Minister is unashamedly pro-EU and sees it as of great benefit for Scotland and its economy. But she has not spelled out what kind of Europe we should be aiming for. It clearly isn’t the kind of `a la carte, pick’n’choose free trade zone favoured by most Conservatives/eurosceptics.
But it’s far from clear how far she and/or her government – if it were an independent member state – would go down the integrationist/federal route. Would it sign up for the fiscal pact, for instance? Would it accept all the budgetary constraints implied within the European Semester? These, of course, are not immediate issues but it would be good to get an inkling of what Europe Sturgeon and the SNP really endorse.
The confusion is compounded by Sturgeon’s recent – during her USA tour – endorsement of Rhineland capitalism aka social market economy as a model for the Scottish economy. This has attributes that are enormously beneficial: long-termism, investment-orientation, a balanced approach to economic development, including a strong role for manufacturing and, not least, a powerful role for workers and their unions acting in concert with business. Above all, it purports to serve society as a whole, not a privileged elite, let alone the “1%” and, in one variant, actively favours state intervention to correct market failure.
But it has its roots, too, in what is called “ordo-liberalism” or a highly legalistic vision of a pretty minimalist state acting to correct barriers to competition such as high business taxation. In many ways, it is deeply hostile to the Keynesianism that most SNP politicians and supporters favour and can, arguably, be seen as a source of the Blairite Third Way.
This, of course, is what, under the tutelage of Berlin, the Eurozone – and the IMF and European Central Bank – is actively pursuing vis-a-vis Greece. Or the very opposite of what Surgeon would wish for as set out in her Guardian article this week. The Germans, self-righteously proclaiming their correctness, are imposing an ordo-liberal straitjacket on policy-makers that encourages strict adherence to rules – debt brakes, “black zero” budgets – rather than work to improve the lives of ordinary people and a more sharing economy.
The “crashing” of the Greek economy in the past five years of austerity politics is a terrible witness to the damage this model can wreak if applied in wholly different national circumstances. And, to make matters worse, it is now accompanied by blatant moves to “crush” Greek democracy.
Whatever the outcome of the July 5 referendum in Greece, a huge and fundamental debate about the euro and the EU as a whole is under way. Many of us fear that the Europe on offer – a German Europe of pain and punishment – will swiftly undermine the progress made in uniting half a billion people and will begin breaking up amidst great rancour. The tendency towards far right populism, xenophobia and extremism will grow.
Nobody expects the First Minister and her government to define all these enormous issues but it is time for clearer, more unambiguous statements on why Europe matters – and what kind of Europe we wish to help construct.