Wednesday, July 1, 2015
The missing "Yes" in the Greek referendum
In the hurried and chaotic referendum called by the Greek government on Sunday there are two "No" votes and so far only one "Yes" vote. There are two different positions asking people to vote no. Alexis Tsipras and Syriza ask people to vote no (to a question that is impossible to understand) to the Troika conditions, but with the willingness to keep Greece in the eurozone. But others, such as economist Paul Krugman, ask people to vote no and be ready to abandon the euro. These are two very different positions. Krugman is consistent with his position in the Scottish referendum: a currency union is incompatible with national sovereignty (which is why he criticized the position of the Scottish nationalists in that referendum, implicitly supporting the "No to independence" campaign). And he is consistent with Rodrik's trilemma: globalization, democracy and the nation-state are not simultaneoulsy compatible. We can choose only two of them, and in this case Krugman advocates in practice disconnecting Greece at least in part from globalization. Only in part, because his claim is that with a new currency Greece would boost its exports, although of course losing any influence on common policies to solve international and global market failures, including the one of its oligarchy sending their money to other countries (Branko Milanovic commented recently on the implications of the absence of a global federalism for the Russian oligarchy). The position of Tsipras, however, creates the fiction of an absence of trade-offs: he wants his country to stay in the euro, and at the same time proclaims its national sovereignty in terms of fiscal and other policies. In front of these "noes", there is so far only one yes: the yes of Angela Merkel and the troika, asking Greek citizens to vote yes to austerity policies and the tough conditions of creditors and the current governance of the euro zone. It would be very useful to have another "yes" campaign. A campaign that solves Rodrik's trilemma in a different way from the one envisaged by Krugman: let's ditch the fiction of national sovereignty. Let's keep democracy and globalization and build a transnational federalism where the eurozone has a significant budget and where creditors and debtors reach transparent agreements that are validated by democratic institutions, to share the costs of the crisis so that the most vulnerable sectors of society cease to pay for the bulk of them. This is a "Yes" vote that should be defended by the European social democracy. I remember that at one point in the Scottish campaign Krugman said that he had a preference for large democratic aggregates. Perhaps he has lost hope on turning Europe into one such large democratic aggregate, but many people in Europe, me included, have not lost this hope, perhaps because we are more aware of the ghosts of European history.