The strangest part of the Brexit referendum is the way that Left and Right in Britain have lined up on the opposite sides of where you’d expect them to be. The Leave campaign is being led largely by Conservatives, who have long wanted out of the EU. The Remain campaign got a big boost this month when Labour leader Jeremy Corbyn made a big speech in favour of staying in.
But there is nothing particularly conservative about leaving the EU: Sovereignty and the devolution of power have historically been left-wing causes. It was a Labour government that devolved powers to Scotland, Wales and Northern Ireland. Some Labour party MPs like Tristram Hunt believe they didn’t go far enough when last in government. They have looked on with jealousy as David Cameron’s Conservatives move power to the “Northern Powerhouse” region of cities around Liverpool and Manchester. Self-determination has long been a left-wing thing.
More pointedly, there is nothing particularly left-wing about remaining in Europe. If there is one thing that the experience of Greece ought to have taught the Left, it’s that Europe is an undemocratic club for capitalists whose finances are run largely for the benefit of international banks.
Greece is important in the Brexit debate because it shows us what the EU is capable of when push comes to shove. To recap a very complicated situation in just a couple of sentences, Greece elected its left-wing Syriza government in January 2015. The government attempted to renegotiate its debts with the EU, and failed. The EU wanted its money paid back, even though everyone knew the Greek economy was so feeble that it would cripple the country to do so.
So the government held a referendum in July 2015 on whether to accept the EU’s repayment plan. A majority voted to reject it. Both those votes were ignored by the EU, which eventually forced to country to accept onerous financing terms that have kept Greece in a deeper recession than the Great Depression of the 1930s in the US.
Whether you agree with the Greek government’s politics or not is irrelevant. This is about sovereignty and democracy: Twice the Greeks voted to reject the EU’s fiscal mandates, and twice they were ignored — to the benefit of the banks. That is how the EU behaves when faced with the will of a people.
The Greek debt didn’t spring from nowhere, of course. The Greeks have not been great at managing their debts, for sure. But originally, the credit was granted to them by private international banks like Goldman Sachs.
That debt was then catastrophically refinanced by the ECB and the IMF, transferring the debt from private banks to public/political banks like the ECB and the IMF. That manoeuvre was crucial, because it moved the debt from the private sphere — which is geared to accept risk — to the public/central bank sphere, which cannot allow defaults.
With the Greek debt in their hands (€5 billion at the time), the problem for the IMF and the ECB was that under no circumstances could they let Greece off the hook. If there was a default, then every country and debtor on the planet would know that the IMF and ECB aren’t serious about collecting their debts. Had the debt stayed in the private sector, a default would only have hurt Goldman’s shareholders, and no one else. Private banks accept defaults or “haircuts” all the time, because they only care about financial risk. Political risk isn’t really their thing.
In that context, it is no wonder that the banks are heavily in favour of Britain staying in the EU. Lloyds, Goldman Sachs, JP Morgan, Morgan Stanley, and a bunch of hedge funds have all come out in favour of Britain staying in. Some of them are even bankrolling the Remain campaign. Banks like the fact that when they screw up, there is a bigger central bank that will take that lousy debt of their hands. From Goldman’s point of view, Greece is Someone Else’s Problem right now, because of the EU.
That is why it’s so weird to see Corbyn showing solidarity with the banks’ campaign to stay in the EU.
Generally, the Left in Britain favours Europe because the EU requires its countries to adopt certain laws protecting human rights and workers’ rights. The EU is currently more liberal than the Conservative government in the UK. Certainly, it is likely that life would get worse for workers if Britain goes it alone. But those policies are temporary and political, and politics changes. In 10 years time who knows what right-wing German government will be holding sway in Europe? And what if, in 2026, a conservative EU forces a negation of Prime Minister Corbyn’s attempt to nationalise the railways? EU law literally bans countries from nationalising certain industries.
The Labour party just isn’t going to get its public-owned paradise off the ground while it remains inside the EU; conversely, we’re only likely to see the return of British Rail after a Brexit.
The EU isn’t even a very good guarantor of human rights. Read the human rights charter’s section on free speech — the exemptions to the free speech right are longer than the right itself, and cover pretty much everything. (That’s one of the reasons we don’t have free speech in Britain.)
Currently, it looks like Britain will vote to Remain. Despite the merits of its case, the pro-Brexit campaign is dominated by fringe figures in UK politics like UKIP leader Nigel Farage and George Galloway. The pro-Europe people will win, in a victory of odd bedfellows. The fact that Corbyn and Cameron are both on the same side tells you how bizarre the whole thing is.
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