Collapse of the left’s economic agenda in the Eurozone

Collapse of the left’s economic agenda in the Eurozone

With the Eurozone’s economic woes, leaders on the Left, such as French President Hollande, have been forced to alter their policy promises.

“Hollande has not given us anything different. It’s nothing like his election pledges.”

These are, more often than not, the views of the French towards their President. François Hollande was elected in 2012 on a platform railing austerity and the financial markets’ monopoly of capital. The Left provided hope to the French of an alternative to the solutions posited by the right, under then-President Nicolas Sarkozy.

Yet, one year into Hollande’s presidency, while presented and packaged differently, the direction of his economic policies has barely differed from his predecessor’s. Is there a difference in the outcome of economic policies when one votes Left?

This is the reality of the Left-Right divide: there is no longer any real distinction on the economic front. As much as parties on the left-wing campaign against the monopoly of capital and the power of the financial markets, such promises cannot be effectively translated into action when they take office. This is because all states are locked into a global capitalist system which has its own set of norms. These norms then become the rules by which states have to adhere and play.

Whether a party is left-leaning or right-leaning, the party is still locked within the same paradigm as the state. One of these rules is the maintenance of financial credibility and confidence in the eyes of the markets. This rule has been acknowledged explicitly or implicitly from the moment states borrowed on the financial markets to fund policies and programmes. While the game does not entail that rules cannot be abrogated, the player must be willing to bear the consequences.

This is where the first dilemma of the left-wing exists. As much as it seeks to break the rules of the game – either out of conviction or from a need to differentiate itself politically — it is politically impossible. Failing to adhere to the norms of the financial markets, which currently demand growth and a controlled deficit that can be steadily reduced, can result in an inability to borrow sustainably and instigating cutbacks and reduction in state spending, including welfare.

And this is where the second dilemma of the Left arises. Is the Left willing to sacrifice its welfare policies – at least in the short-term – as it attempts to resist the rules of the game, in which it is locked? The general conception of the left-wing (as political parties that seek social justice and improvement in the general economic welfare of all) subjects it to a greater quagmire than the right-wing.

The rollback of social welfare effectively destroys the claims and legitimacy of the Left and is almost politically taboo. To affirm the rules demanded by the financial market during elections is also an erosion of the credibility of the left-wing. This is the reason why the Left, even when confronted with the necessity of austerity, is unable to campaign for the structural measures needed to resuscitate the economy during an election. To do so would be to lose its identity and its constituency base.

Unsurprisingly, Hollande’s government is pursuing this leftist logic: public denunciation of the rules of the game while implicitly attempting to work within the confines of the system. This route is similarly taken by the new Letta Administration in Italy, which so far has resulted in another round of trade union protests.

Where the rules of the financial markets define the scope of economic policies, the Left becomes almost indistinct from the Right in substance. It is not that the Left does not want to pursue an alternative; rather it cannot. For those trapped in the quagmire of the Eurozone, there is no longer an economic Left.

Categories: Economics, Europe

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