Brexit, the PIIGS, and the eurozone crisis

The eurozone crisis has played into the hands of those campaigning for Brexit. Whilst, fanciful headlines on ‘federal Europe plots’ and gushingly Eurocentric hot-takes have dominated the referendum campaign, those who have been paying attention to the fates of countries like Greece and Ireland over the past six years have pointed to ‘brutal EU austerity programmes’ as one reason (among many more) for Britain to walk away from the EU.  Such views are the product of misguided narratives about the causes of the eurozone crisis.  Whatever the result this week, these narratives will continue to influence the debate taking place across Europe in multiple member states about the attractiveness of leaving the EU and ‘going it alone’.

The experience of the so-called PIIGS (Portugal, Ireland, Italy, Greece and Spain) during the eurozone crisis feeds into a broader critique of the EU as a transnational elite driven neoliberal project.  Ireland was allegedly blackmailed into a calamitous state guarantee of its banking sector by the ECB.  The EU’s intransigence towards Greece suggests an obsession with damaging policies of austerity as well as a cavalier attitude towards national democracy.  Moreover, as I have written about in a previous SPERI blog, ‘following the rules’ of European integration has been one of the main causes of fragile patterns of economic growth developing in Portugal, Greece, and Ireland.  Perhaps Owen Jones was right, ‘[p]rogressives should be appalled by European Union’s ruination of Greece. It’s time to reclaim the Eurosceptic cause’.

These criticisms of the EU are not wrong. Nor should they be downplayed or glossed over.  But neither are they the entire story.  The problem is that many left-wing advocates of Brexit (or ‘Lexit’) are at least partially motivated by problematic and misleading narratives of ‘victimisation’ towards countries in Europe’s periphery (although these arguments by no means begin and end with Greece).  The twin myths of the ‘lazy PIIGS’ and the German ‘big bad wolf’ have resonated for years through commentary on the Eurozone crisis.  In the case of the Brexit debate, they create two central misunderstandings.

First of all, countries in Europe’s periphery did not passively participate in a project of European integration that was tailored to ‘core Europe’ simply because it was in the interests of the more powerful core for them to do so.  Rather, they actively and enthusiastically participated because they believed that ‘tailoring’ themselves to core Europe would lead to their own modernisation.  As Greek PM Costas Simitis put it in 2005, Greece’s participation in the integration process was the ‘strongest lever for our exit from a reality of economic and social retardation’.  For Ireland, Europe appeared to ensure that Ireland would have an ‘industrial rather than a pastoral future’.

Generally speaking, political elites across the European periphery have always tended to view EU membership as a chance to allow external forces to re-shape them as modern, mature, and in reality, neoliberal European economies.  Peripheral elites were actively complicit in these agendas, and often used the EU as a ‘vincolo esterno’ to attempt to push through damaging and unpopular agendas of privatisation, liberalisation and deregulation.  The EU certainly provided a clear ‘one size fits all’ blueprint for neoliberal style restructuring.  But narratives of victimisation tend to gloss over the fact that peripheral elites eagerly shared this vision.  As Lee Willinscroft-Ferris has recognised, ‘[t]he European Union as we know it reflects the philosophies of the national governments of its member states, the vast majority of which are currently conservative in nature’.  Brexit, or indeed Grexit, is hardly likely to be sufficient in escaping deeper, path dependent national agendas of neoliberalism or austerity.  After all, Ireland and Portugal have been among Greece’s harshest critics and austerity’s biggest defenders.