The European Greeks: A Figment of German Imagination?

By Steve Fuller

Rapid Response: Greece, Debt and Europe in Crisis

To my mind, the most striking features of the public discussion of the Greek debt crisis, including the bailout deal proposed by the EU, are the following: (1) an uncritical reliance on arguments from the power asymmetries between Germany and Greece; (2) a catering to national stereotypes, rendering the Germans blameworthy and the Greeks sympathetic; (3) a failure to take seriously the EU’s prima facie lack of trust in Greece’s ability to manage its economic affairs based on the country’s own track record.

Let me put my cards on the table: I think that the Germans are mainly responsible for the current crisis, but in a deeper way than most people seem to think. They are guilty of wishful thinking, perhaps even nostalgia. Their only defence on this score is that the Greeks bought into exactly the same fantasy. But then somehow the Germans woke up, but the Greeks remained asleep. From this standpoint, the vast majority of Western intellectuals who jumped to Greece’s defence also remain asleep.

The Germans welcomed Greece into the Eurozone and provided loans that perhaps both they and the Greeks should have anticipated would never be repaid. But this is understandable in a larger context, for which Germans in the 19th century were responsible – namely, the privileging of Greece as the origins of Europe. As Martin Bernal argued in his controversial ‘Black Athena’ thesis in 1987, German philologists – keen on providing a self-contained ‘Aryan’ history of Europe – minimized the extent to which ancient Greece had been settled or influenced by people from Egypt or the Near East. 

The idea was at once to place clear boundaries around ‘Europe’ linguistically, ethnically, geographically and conceptually – since Greece (mostly Athens) provided the historical origins for many of the values that 19th century progressive European thinkers wished to take forward, including democracy, free expression, individualism, intellectual curiosity and adventurousness. At the same time, Greece was not burdened by the legacy of the Roman Empire and its Catholic aftermath, the Holy Roman Empire, with which Germany and the other states of Europe struggled to establish their own distinct national identities following the Peace of Westphalia in 1648.

In short, those 19th German scholars delegated enormous cultural capital to the ancient Greeks, on which latter-day Greeks have been allowed to draw. Moreover, and importantly, latter-day Greeks appear happy to trade on this cultural capital, while setting aside Greece’s own economic and political backwater status for most of the modern period. Even though economists sympathetic to the Greeks in the debt crisis, such as Paul Krugman, have long suggested that Greece should not have entered the Eurozone and should now find a way to leave it, ‘Grexit’ seems never to have been in the cards for any recent Greek government, including the current Syriza-led one.

Indeed, the consistently pro-Euro stance of Greek politicians has been on the back of a democratic mandate, as most Greeks wish to remain in the single currency. Thus, in the current negotiations, the only formal Grexit proposal was made by the German Finance Minister, Wolfgang Schäuble, on terms that were generally regarded as reasonable from an economic standpoint (relative to Greece’s dire economic situation). But because Grexit was explicitly disavowed by the Greek government, it was widely reported as a hostile negotiating gesture.

Chris Cook, Policy Editor for the flagship BBC public affairs programme Newsnight has offered the shrewdest analysis so far of the failure of the Greek hand at the EU bargaining table. Cook argues that the Greeks misunderstood that the EU had much less to lose from a Grexit than the Greeks themselves did, and so were in no rush to conclude negotiations – except to provide humanitarian aid to the Greek people. Yet, this too was treated as a hostile negotiating gesture, dubbed ‘humilitarian aid’ on social media shortly after European Parliament President Martin Schulz first raised it. No doubt, the prospect of such aid prior to a final settlement suggested that Greece was becoming a ‘failed state’ unable to protect its people from unnecessary hardship.

As I suggested at the outset, there is an interesting question about when Germany ‘woke up’ from its Greek fantasy. However, this newly awakened state of mind is less about disillusionment with Greece per se than an enforcement of market logic when sovereign states are taken to be the market players. Thus, Cook’s game-theoretic analysis proves apposite. From this standpoint, successive democratically elected Greek governments have proved to be unreliable European market players, at increasing cost to the other European states, especially the larger ones, such as Germany. Long-term national debts can be restructured only if the indebted people – or their representatives — can be trusted to pay it back on some agreed schedule.

Sociologically speaking, the interesting point is the exact nature of the ‘trust’ that has broken down between Greece and the rest of Europe, which has come close to bringing the entire European project to its knees. The idea that social interaction – especially when it involves money – presupposes some sense of ‘trust’ is a truism. However, this case focusses the mind on the sorts of ideas and actions that build and destroy the rather specific sense of trust needed to maintain an economic union of sovereign states. More to the point, it raises the question of whether there are market conditions (e.g. a large unrepayable debt) under which a breakdown of trust between states would justify the partial suspension of state sovereignty. 

Interestingly, the former Greek finance minister, Yanis Varoufakis, notwithstanding his tantrums and grandstanding at the bargaining table, seemed to have raised exactly this point vis-à-vis Germany’s potential role as European hegemon, whereby it might provide a Marshall Plan-style policy to develop the more ‘backward’ areas of the continent, including Greece. This seems to me a promising direction of travel for a more integrated European Union, but the restoration of trust between nations remains the first problem on the doorstep.

Steve Fuller is Auguste Comte Professor of Social Epistemology at the University of Warwick. He wishes to thank Edwin Gold for the Varoufakis insight. 

Originally posted 21st July 2015

Photo credit: By FrangiscoDer (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

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