Germany, Greece and the Banks, in the context of the EU crisis
By Dimitris Konstantakopoulos
I remember the talk I had with the German ambassador in Athens and Mr. Tsipras in February 2013, during a reception at the Russian Embassy. I was speaking with the German ambassador when Tsipras, then leader of the opposition, having finished his own private discussion with the Russian ambassador, saw the German ambassador and myself talking and approached. I was in rather a facetious mood, so I decided, on a sudden impulse, to make a joke, which was not really so much of a joke. As Tsipras joined our company, I said “you will destroy Europe”.
The way I put it, not looking specifically at either of my interlocutors, did not make it clear whom I was really addressing. They were both startled and asked me: “Who?” (will destroy Europe). “Both”, I answered them. “You will revolt”, I said looking at Tsipras and then, turning to the German ambassador, I added, “and you will suppress him.”
Fifteen years ago I interviewed Karl Lamers on the subject of German strategy towards Europe and the world. He is regarded as the spiritual father of Wolfgang Schäuble and his characteristic brand of German nationalism (“financial”, not military, but not very well dissimulated).
Lamers explained to me, quite frankly, I acknowledge, his idea that Europe had to be “reorganized” in accordance with a principle of “variable geometry”. The gist of what he said was that Greece, since we are speaking of Greece, was to be included in a South-Eastern (Balkan) “pole”.
I professed agreement with Lamers on the “irrational” character of European integration (which, in fact, was not so “irrational”, simply the forces behind the architecture were shaping a very different structure from the one it was claimed they were and they were also capable of anticipating the crisis that would come, thus the “no bail-out” principle in the Maastricht Treaty!). And the irrationality would become much more obvious with the gigantic expansion of the EU in 2004 with 10 new members, of very different economic levels and historical backgrounds, without any mechanism of compensation for the imbalance thus created. The expansion and the way it was planned was more a “globalist” and NATO project than anything European. And it was also a huge and direct cause of the great “existential” crisis of the EU that erupted in 2010, when Europe had to decide how to handle the aftershock waves of the US financial crisis of 2008 (Brussels and Berlin solved this problem finally by transferring all the burden of the crisis to one of the EU member-states, Greece, literally destroying it. It seems monstrous, and indeed it was, but the idea had its own logic to it. After all if they had not done what they did with Greece, they would have had to try to make banks pay for all the chaos they had created).
The architecture of the EU structure – on this we agreed with Lamers – was deeply flawed. But you don’t correct one error by adding a second. I tried to tell him that if somebody is making a mistake by inviting some friends to join a family, he cannot just say to them later that they have to sit in the kitchen. Nobody wants to be confined to the kitchen, especially if he was invited as a full family member. Nobody got onto the EU train to be in the second or third class wagon. Only Procrustes used such methods to rectify the “faults” in human bodies. (Helmut Schmidt was of the same opinion on inviting Greece. He said it was a mistake to incorporate Greece into the eurozone, but after the mistake had been made Greece had to be helped to remain where it had been invited to be. Of course this would probably presuppose deep, structural reforms in the eurozone, which nobody was willing to undertake).
It goes without saying that I could not persuade Lamers, who was deeply in love with his own intellectual schemas, perhaps believing that they were a means for elaborating a new “grand strategy” for Germany after its unification. He clearly could not have imagined that he was paving the way for banks and the US to keep ruling Europe. About ten years after I took the interview, his disciple Schäuble found in the financial crisis, particularly as manifested in Greece, the opportunity to apply the master’s ideas. He applied the maximum pressure on Greece, probably hoping to make it quit the Eurozone. (Now he keeps saying that the unprecedented catastrophe the country has suffered is due to Greeks themselves. “It is the application (of the “bail-out program”), stupid”, he said to Tsipras in Davos. I once asked his man, Mr. Reichenbach, chief of the European Task Force, to explain the difference between Greece and Portugal. The explanation he gave me was more straightforward than to point to the stupidity of Greeks or the intelligence of Mr. Schäuble. “We extracted from the Greek economy three times more demand than we did from the Portugese economy”, he told me).
Turning Greece into the “perfect European province”
I published the Lamers interview in the newspaper I wrote for in Greece. I don’t remember the exact headline my editor put to it, but it was something like “they want Greece outside the hard core of Europe”. My editor was fond of sensational headlines and also liked the European appeal I was giving to his newspaper with my reporting.
But he was probably the only person in Greece who paid any attention to this interview. Nobody wanted to think about what was said in it. Already sated by the huge handouts Siemens was distributing everywhere in Athens, in exchange for conquest of the Greek market, the Greek “elite” did not even want to read what Lamers was saying. After all, Greeks were fans of “Europe” and Athens was doing everything possible to forget its own “eastern”, “Balkan” identity, not to mention Greek national interests.
The “neoliberal socialist” Minister of Economy Nikos Christodoulakis, a member of the very pro-German, pro-Europe government of Kostas Simitis, along with the President of the National Bank Karatzas, had even devised a pithy precept to convey the essence of Greek foreign policy, shedding an astounding light on the mentality of the forces governing Greece at that time: “We have to identify Greek national interests with the interests of the mighty and the wealthy.”
The fact that Christodoulakis and Karatzas knew nothing about foreign policy had made it easier for them to launch such guidelines, assimilating their inner contradictions. Given the objective character of the national interests of any country, to decide to “identify” them with the interests of the mighty and the wealthy (USA, Germany, EU, NATO, Israel) was in fact tantamount to renouncing them (at least in areas where there was potential divergence). In fact the new “doctrine” was nothing other than a reflection of the fact that, under Simitis, Athens’ “strategy” in all fields was to abolish as much of Greek national policy as possible, making the country “the perfect province” of EU and NATO.
The Greek elite was doing everything Berlin, Brussels, Washington and Paris were asking of it (including manipulating, with the help of Goldman Sachs, statistical data for meeting the Maastricht criteria for inclusion of Greece into the Eurozone). Their mentality was reminiscent of that of some Hellenistic kings in the late Roman Empire who voluntarily ceded their kingdoms to Rome (receiving in exchange of course guarantees of personal wealth and position). It was at this time that the celebrated “Greek corruption”, in particular the corruption nurtured by Siemens, was at its zenith. The end of this trajectory was, unsurprisingly, the surrender, from 2010 onwards, of the country and its people to “the creditors”.
The Greek elite wanted forever to forget its eastern, Balkan, identity, history, origin. Some were even ashamed of it. The last thing they were prepared to consider was a “return” to the south-eastern, Balkan pole Lamers sought to create. They were willing to do anything to remain in the “first circle” of the EU, which is why the strategy of Schaeuble (to destroy Greece and so provide it with a motive to leave the eurozone) has failed so miserably, bringing about the exact opposite result.
The syndrome of the whipped dog
By ruining Greece Schaeuble had instilled such paralysis and terror in the minds of the Greek elite that they felt (and still do) that the roof of their house is falling in on them. They did, and do not want to consider even for one second leaving the euro. The Greek elite was, and is, simply terrified by the prospect of suddenly being required to run a nation-state that long ago began to stop functioning and started just obeying orders from Brussels and Berlin, following their directives and landing in a terrible state of ruin after six years of the “help” it received from its alleged partners and the IMF.
It may not be entirely pointless to remind in this connection that, as a result of this “help” from the EU, ECB and IMF, Greece since 2010 has sustained greater material loss as a percentage of GDP than France did during the First World War.
For many years German leaders, bankers and Eurocrats played schoolteacher to Greek politicians and the Greek middle classes, who learned to be Europe’s perfect pupil for this was the way that all the country’s problems would be solved. Now what was required was that Greeks suddenly reverse course and abandon the “Europe” ideology on which everything had been based for decades, without the schoolteacher having anything else to say or propose!
Destructive (and self-destructive) “strategy”
I had asked to interview Lamers in 2001 because I was seeking to understand where Germany wanted to go. The last time I had visited Berlin was when, as a journalist, I was covering the Gorbachev visit to East Berlin that decided the fate of Honecker and the Wall. At the turn of the 21st century I was very curious to understand what this country, so important for all Europe, was thinking of its future and the future of the continent. I was amazed to discover that at the very centre of its reunited capital, the scene of some of the most dramatic events that had shaped the history of our world, Germans, as a nation the most romantic of Europeans, had nothing else to put but a huge Sony commercial structure. It seemed to my eyes the symbol of a new marriage between Germany and money. As Faust taught us, this is always a difficult relation, but the total absorption of this country into the pipedream of globalization still came as a shock. This Sony center seemed the German architectural equivalent of the Fukuyama’s “end of History”.
What had happened to German history and Germany’s identity? Where was it? How could it have evaporated? These were the questions I was asking. I am rather suspicious of people, whether Greeks, Germans or anybody, who try to conceal their real identities. And as happens sometimes with music, silence can mean more than sound.
Many Germans love Logic (and the Order and the certainty which is supposed to accompany it). One of their greatest thinkers, Hegel, wrote exactly a (rather obscure) treaty on “Logic”. A student of his in some respects, Karl Marx, also tried to found a comprehensive theory encompassing and explaining all economy and society, by writing his unfinished (and it could not be otherwise) “Das Kapital”. In his introduction he admits that he was inspired by that unparalleled (albeit very closed and deterministic) work of human thought that is the work of Newton. And there is a third German, Albert Einstein, who spent most of his life trying – and failing – to compose a general system to incorporate all the forces of nature. It was Einstein that introduced the notion of the observer into hard-core physics. Still you can feel his horror towards the “uncertainty” introduced by quantum mechanics in the famous phrase he launched to the direction of Niels Bohr, “God does not play dice with the universe” (by the way, the exact opposite of the Greek Heraclitus’ conception of the universe: “Time is a child playing at dice. To the child belongs the kingdom.”)
You look for something when you need it most. What is happening with German leaders, with Greece and with the European Union is not a triumph of Logic. It can be considered, on the contrary, a triumph for psychoanalysis, at least in some aspects. This is also a notion born in the German world (and maybe this was not just a coincidence). It tought us that what we state is not the most important. Feelings, desires, ambitions that go underground don’ t disappear. They come again to the surface with renewed force, hidden behind “economic reason” or necessity to punish and discipline in the context of “Protestant morality”, or whatever else you wish to use. Anyway, we don’ t need Freud, any student in European history can describe a lot of cases of “adverse” use of religions and ideologies, sometimes even rehabilitating sadism as a politically correct and economically sound way of behaving. Even in the Bible you can find nearly everything you need to justify a given action.
As for Keynes and Hayek or Friedman, they do not represent only two schools of economic policy, they represent two very different philosophies of life.
Psychology, politics and manipulations
A leftist (whatever that means nowadays) friend criticized me recently of relying too much on psychology, instead of sticking with “objective”, “material” factors. But this is exactly the difference between human society and the world of Newton. Even Engels, the close friend of Marx, a mind rather more “deterministic” and more “German” than his fellow philosopher, had to resort to ideas and mentalities born many centuries before the facts he tries to explain (in his “War of Peasants in Germany”).
It is simply impossible to explain the policy of any nation without taking into account its history, its national characteristics and the psychology of its leaders. Keeping of course in mind, in the same time, that this is not the whole story. The totalitarian forces in our societies have now an unprecedented scientific and technological capacity to influence events and the power to corrupt and control most politicians – it is becoming even more and more necessary for politicians to be corrupted, because if they are not, they cannot be controlled!
But to do their job, that is to manipulate successfully leaders and entire nations and put them in the desirable trajectories, those forces they cannot do it without exploiting in depth historical, national and psychological factors.
In reality, Mr. Schaeuble, followed by Mrs. Merkel, has tried to rehabilitate an (unspoken) variety of German nationalism and impose “German discipline” over all Europe but their achievement so far (and we have not seen the end yet!) has been only to inflict considerable damage on Germany’s international image and considerably diminish their country’s stock of political capital and their own capacity to “govern” Europe as it staggers towards possible collapse.
Berlin was able to defeat Greeks but it also persuaded French workers and Belgian public servants not to make the slightest concession – “we are not Greeks” was the slogan to be heard in some French demonstrations. All Europeans begun to understand, through the Greek example, what probably awaits them. The British are now wondering if they want to remain in this EU. Even Greece has been pacified only temporarily. The latest monstrous “agreement” with creditors was described by the oldest, and very right-wing Greek newspaper Estia, as a “Treaty of Versailles”. They are mistaken. The terms of this agreement remind seem closer to the ones of Potsdam surrender.
The situation in Greece not only will not be stabilized, it may enter a new and unpredictable phase (with geopolitical connotations). Washington knows that and this is probably why they have sent to Athens their previous ambassador to Kiev, one of the most “energetic” of US diplomats, with no EU background but with a very solid experience in Ukraine, Iran and Latin America.
In 1917 the isolationist and pacifist US President Wilson was excluding any idea of intervention by his country in the European war. Two months after his last such declaration he totally forgot what he had been saying and Washington intervened in Europe, sealing Germany’s defeat in the First World War. The US presence in Europe has been continuous since that time. (And the IMF invited by Germany to run Europe is here to stay, in spite of its negotiating threats to leave).
Through the policy they followed during the last years, in Greece, but also in Ukraine and elsewhere, the Berlin leaders have offered not only to the USA but also to the new, emerging “Empire of Finance” (collectively, “institutionally” represented by big banks and the IMF) their most valuable tool for continued domination of the continent, playing on its divisions. At the same time they destroyed good relations and prospects of cooperation with Russia, which is another basic precondition for Germany, and Europe as a whole, one day to become sovereign. This can hardly be considered as a victory for logic, or for the national interests of the German people.