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The global financial crisis has opened up the discussion for a more democratic governance of the economy. Questions about the possibilities the crisis has created for the progressive re-structuring of credit, labour, the welfare state and public investment seem to be finding a place in the mainstream political agenda. This series of interviews proposes an initial exploration on what types of institutions and mechanisms of the economic system should be re-structured, which should be abolished, and what types of arrangements might emerge in their place. All the interviews were conducted during the 2010 Symi Symposium held in Poros, Greece.

Kumi Naidoo, Greenpeace International Executive Director, discusses the challenges that global civil society faces in the wake of the convergence of a set of global crises. He argues that “this moment in history can be likened to a perfect storm. This term denotes a convergence of a range of crises coming together in a very short space of time: the fuel price crisis; the food price crisis; the ongoing poverty crisis which takes the lives of 50.000 men, women and children daily from preventable causes in the developing world; the climate crisis; and then the financial crisis. It’s only when the financial broke out that those who are in power finally recognised that we are in the midst of a crisis”.
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Poul Nyrup Rasmussen, president of the Party of European Socialists (PES), talks about the lack of effectiveness of the European Union in tackling the public debt crisis and urges for the establishment of a European-wide Financial Transaction Tax, while he opens up the discussion for setting up a Euro-bond system that would potentially allow for greatly reducing the risk in the financial sector within the European Union.
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Yanis Varoufakis argues that the EU-ECB-IMF financial support package constitutes punishment for Greece. With the exorbitant interest rates that it charges, and given its steadfast resistance to any renegotiation of Greece’s existing debt, it pushes Greece further into insolvency. Just like a cruel doctor administering enough medicine to keep the patient alive for a while longer so that she keeps suffering more excruciating pain, but not enough medicine to prevent her from shuffling off the mortal coil, so too the EU-ECB-IMF package, as it stands, only prolongs the Greek state’s agony without preventing the inevitable bankruptcy.
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Greece and California are hugely different. California has more than three times as many people, and a GDP more than five times larger. These two places are far apart on the globe, and have very different linkages with the world economy. Nonetheless, both places’ circumstances have strikingly similar features. Both are in profound fiscal crises that threaten to destroy their social safety-nets and cohesion; and both are located in larger political entities whose circumstances are far more tranquil (if far from healthy). Further, both find themselves in a dilemma that was very well captured in a lyric from “Welcome to the Hotel California,” the 1976 hit of the California-based group The Eagles: “You can check-out any time you like, but you can never leave.”
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The financial crisis that now threatens to engulf the Eurozone, and for which present and past Greek Governments are now being blamed, is in fact mostly due to policy errors by the leaders of the European Union and the faulty institutional design of the Eurozone. In both of these Greek Governments have played only a minor part. Indeed, if Greece were not part of the European Union, then the faults would simply emerge elsewhere. Even if the European union were reduced to its northern fringe, say Scandinavia, Germany, Austria, Benelux and France, then the crisis would break out in the Netherlands, where Government indebtedness relative to national income is not much below that of Greece (i.e., 99% of GDP in 2009, compared Greece’s 108%). This is because the critical variable is not the absolute level of government indebtedness, or even the level of that indebtedness relative to national income, as put forward in the Maastricht Treaty, but the level of indebtedness that central banks refuse to refinance.
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Joseph Halevi argues that there is no problem of an excessive Greek deficit, as such. It can easily be handled at the European level by devising common policies to revamp European and specifically Greece’s growth, as it is the only cure that does not kill the patient. Drastic cuts in public expenditure, while disarticulating the whole system of services and infrastructure on which a modern society rests, reduce the debt ratio only marginally, if at all.
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Global austerity leads to global crisis. Therefore, the European Union austerity policy will deepen the European crisis. On the contrary, in particular given the rating of some European member states on their ability to reimburse their sovereign debt, a global expansionary policy could weaken the Euro in international markets and endanger the European cohesion, at least on the productive aspect and at worst on the political side.
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