Friday, 7 August 2015

Ruling the Void; Governing the Absurd

On the topic of my earlier post about the power of the state and the imposed legality of Europe, to wit: Yanis Varoufakis on the acute migraine that is life as Greek Finance Minister:

“Our state apparatus had been contaminated by the Troika, very, very badly. Let me give you an example. There is something called the Hellenic Financial Stability Facility, which is an offshoot of the European Financial Stability Facility [EFSF]. This is a fund that contained initially €50 billion – by the time I took over it was €11 billion – for the purpose of recapitalising the Greek banks. This is money that the taxpayers of Greece have borrowed for the purpose of bolstering the banks. I didn’t get to choose its CEO and I didn’t get to have any impact on the way it ran its affairs vis-à-vis the Greek banks. The Greek people who had elected me had no control on how the money they had borrowed was going to be used.

“I discovered at some point that the law that constituted the EFSF allowed me one power, and that was to determine the salary of these people. I realised that the salaries of these functionaries were monstrous by Greek standards. In a country with so much hunger and where the minimum wage has fallen to €520 a month, these people were making something like €18,000 a month.

“So I decided, since I had the power, I would exercise that power. I used a really simple rule. Pensions and salaries have fallen by an average of 40% since the beginning of the crisis. I issued a ministerial decree by which I reduced the salaries of these functionaries by 40%. Still a huge salary, still a huge salary. You know what happened? I got a letter from the Troika, saying that my decision has been overruled as it was insufficiently explained. So in a country in which the Troika is insisting that people on a €300-a-month pension now live on €100, they were refusing my cost-cutting exercise, my ability as a minister of finance to curtail the salaries of these people.”

This situation of absurd bureaucratic opposition by Europe to even the most obvious streamlining of public costs  reminds me of nothing so much as the Polish economist Michal Kalecki's observation that "obstinate ignorance is usually a manifestation of underlying political motives." As Varoufakis says, "The class-consciousness of the Troika was mind-boggling." 

In short, the European powers are much less interested in sorting out the Greek state than in maintaining their own disciplinary power. Even within their own institutions they would not accept concrete proposals that cut costs. Rather than rationally pursuing their self-interest (which is surely to allow the Greek state to grow, collect some of their debts, collaborate in reform of the state, etc.) they want to neutralise any threat to what is ultimately - guff about trans nationalisation of constitutional law aside - a form of class power. The inefficiency and corruption of the Greek state, the nakedly corrupt and manipulative Greek oligarchy, in the end matter far less to the Europeans than the prospect of a pro-working class reflation of the Greek economy. It is the latter they have worked so hard to stamp out.

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