Socialist Register 2012 (behind a paywall) ELMAR ALTVATER, FROM SUBPRIME FARCE TO GREEK TRAGEDY: THE CRISIS DYNAMICS OF FINANCIALLY DRIVEN CAPITALISM
Conservative and neoliberal economists and politicians are toying with the idea of splitting the monetary union into two or even more groups, into a Europe of ‘different velocities’. A core Europe of Germany, France and a few other countries would continue using the euro (or a common currency with another name), while a European periphery might have Greece reintroduce the drachma, Italy the lira, Portugal the escudo, and so forth. There are also Left positions that point in this direction. In these views, exit from the euro creates new space for political action; better national conditions for overcoming the crisis can be enforced; and a break from the neoliberal integration project becomes possible.28 But what is likely to happen if the eurozone fails?29 Unlike the 1970s, today we are dealing not merely with the equivalent of the disintegration of the Bretton Woods regime of fixed exchange rates into its component parts of national currencies with flexible exchange rates. Instead, this would be a collapse of an actual monetary union that has existed for nearly two decades. The component parts – national currencies – would have to be reinvented. As conditions within the eurozone vary widely, this process would be extremely controversial, not the least because the ‘old’ economies existing within the borders of the nation-state do not exist anymore. Sovereign territories as spaces of regulation are no longer consistent with the reach of transnational corporations or of financial speculators. A new currency issued by an indebted country exiting the euro, for example, would likely suffer an immediate drop in value. But euro denominated debts would still need to be serviced in euros but now purchased by a non-euro currency. Rating agencies would likely further downgrade the credit rating and the financial crisis would be exacerbated. While the devaluation allowed by a non-euro currency would increase monetary competitiveness, this advantage is limited if real competitiveness does not increase as well. Many of the indebted European countries lack the relevant export industries. On the other side, the remaining eurozone will likely undergo currency appreciation. This revaluation would limit the competitiveness of industrial capital and further encourage financial capital to speculate on the euro. The ‘equilibrium’ that would result across Europe, after such a period of economic turbulence, is impossible to predict. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
