Shortly after Syriza’s victory in January 2015, Yanis Varoufakis is traveling around Europe for his first official meetings with various and economics ministers. Here’s an interesting conversation with one of them:
Pier Carlo Padoan, Italy’s finance minister and formerly the OECD’s chief economist, is in many ways a typical European social democrat: sympathetic to the Left but not prepared to rock the boat… Our discussion was friendly and efficient. I explained my proposals, and he signalled that he understood what I was getting at, expressing not an iota of criticism but no support. To his credit, he explained why: when he had been appointed finance minister a few months earlier, Wolfgang Schäuble had made a point of having a go at him at every available opportunity…
I enquired how he had managed to curb Schäuble’s hostility. Pier Carlo said that he had asked Schäuble to tell him the one thing he could do to win his confidence. That turned out to be “labour market reform” – code for weakening workers’ rights, allowing companies to fire them more easily with little or no compensation and to hire people on lower pay with fewer protections. Once Pier Carlo had passed appropriate legislation through Italy’s parliament, at significant political cost to the Renzi government, the German finance minister went easy on him. “Why don’t you try something similar?” he suggested.
“I’ll think about it,” is Varoufakis’ diplomatic reply.
A couple days later, he has a meeting with the German finance minister himself, perhaps the most important single figure in the Euroepan establishment. Schauble brushes off Varoufakis’ suggestions for strengthening the Greek tax authorities, insisting instead on
his theory that the “overgenerous” European social model was no longer sustainable and had to be ditched. Comparing the costs to Europe of maintaining welfare states with the situation in places like India and China, where no social safety net exists at all, he argued that Europe was losing competitiveness and would stagnate unless social benefits were curtailed en masse. It was as if he was telling me that a start had to be made somewhere and that that somewhere might as well be Greece.
I’m supposed to be writing a review of Adults in the Room.That right there is the story, I think. Debates over fiscal arrangements were a pretext, the real agenda has always been restoring the rule of market over society, over labor in particular. And Greece was just a convenient place to start, or to make an example of. Despite the constant framing of Eruope’s divisions in national terms, I think it’s clear that for German conservatives like Schauble, the real target has always been their own working class.