Lessons from Varoufakis should not be ignored

Lessons from Varoufakis should not be ignored

by William Ross
article from Wednesday 8, November, 2017

A MONTH OR TWO AGO, I noticed that a pro-Remain correspondent to The National, Hugh Mclean, had claimed that the EU Commission was "the civil service of the EU". Describing the EU Commission as a humble civil service has been used to defend the indefensible by other Remainers, including Alyn Smith MEP. I wrote a letter in response that was not published, but have reproduced it in slightly amended form below. (May I point out as an aside that The National publishes lots of my letters so I am not suggesting unfairness). 

This episode got me thinking again about how Remain had steadfastly refused to actually defend the EU during the referendum. Remain's themes were statements like: "Our economy is heavily dependent on the EU"; "The EU is a safe stable place"; "The EU has kept the peace in Europe since 1945 and to leave means a voyage into the unknown". As George Osborne said afterwards, Remain could not coherently defend the EU because it was so unpopular in the UK. Remain also relied on widespread public ignorance about how the EU actually functions. 

I have already reviewed Guy Verhofstadt's excellent book "Europe's Last Chance" for this website. It pulls no punches on how EU institutions actually function. 

More recently, I have navigated  Yanis Varoufakis' "Adults in the Room: My Battle with Europe's Deep Establishment". Varoufakis is a charismatic left-wing intellectual who became Greece's Finance Minister when Syriza sensationally won the Greek election of January 2015. The story ends with Varoufakis resigning after his Prime Minister comes to an agreement with the Troika (EU Commission, ECB and IMF) days after the Greek population reject the Troika deal in a referendum. Sounds familiar? You'll have your referendum then?

I must confess that while being charmed by Varoufakis, I find the book difficult to get through, largely because it is a story of internecine Greek politics and strategising for and the conduct of meeting after meeting with high-level European and World financial figures. Varoufakis undoubtedly has a very high opinion of himself but he has support from many different quarters, which include, interestingly, former UK Chancellor Norman Lamont.  Varoufakis's essential story however, is very relevant for Brexiteers, and more should be made of it.

Varoufakis led an attempt to re-structure Greece's crushing fiscal burden and was cut to pieces by the octopus of EU institutions in cahoots with the IMF. In fact, his view is that even though EU institutions are chaotic and undemocratic the more chilling truth is they only wield apparent control. Varoufakis believes that people like Jean Claude Juncker are merely the playthings of powerful background power brokers. While Varoufakis does not believe that the EU is led by some coherent evil conspiracy (and neither do I), he takes the view that it is led above all by business leaders and bureaucrats who act according to a consensus which protects the Union and rejects any intellectual challenge. This happens like an auto-pilot. 

It is hard to exaggerate the contempt with which the EU institutions treated Greece. These are by and large the same Eurocrats who are negotiating Brexit. 

If I may I will quote some lines from Varoufakis at page 231 of his book: 

"The Eurogroup is an interesting beast. It has no legal standing in any of the EU treaties and yet it is the body that makes Europe's most vital decisions. At the same time most Europeans, including most politicians, know almost nothing about it"

He then goes on to describe how the Eurogroup functions. Meetings involve finance ministers of the EU 28, but the "real power" is the Eurogroup president Jeroen Djiselbloem, Thomas Wieser (Eurogroup Working Group president) representatives of the IMF (yes the IMF!!), members of the EU Commission, and Mario Draghi of the ECB. According to Varoufakis, items are first discussed by the IMF, Commission and ECB and only then by the national representatives. I quote again from Varoufakis at page 232:

"Only after these unelected officials [give] their assessment and set the tone and terms of the debate [can] the elected representatives get a chance to speak. Moreover, for almost  all the meetings at which I was present the ministers received no substantial briefing on any of the topics under discussion. A reasonable and impartial spectator might easily [conclude] that the purpose of the Eurogroup is for the ministers to approve and legitimise decisions that have already been taken by the three [unelected] institutions" 

Remarkably, Varoufakis' view is that the most powerful man in Brussels is really Thomas Wieser! (see page 135) Who? Wieser is actually an Austrian, not a German. But Varoufakis' whole account is about an EU dominated by and ran by Germany. 

Interestingly, the lynchpin of Varoufakis' negotiating strategy was that Grexit (meaning Greece crashing out of the Euro and the EU) would be very bad for Greece and the EU, but not as bad as the continuing recurring bailouts that, in his view, kept a bankrupt Greece in penury and were not even good for Greece's creditors. In Varoufakis' view a third win-win alternative of re-negotiation could have been arrived at but  would require new thinking and an acceptance by the EU that major mistakes had been made. For Varoufakis, it was indispensable that Greece had the option to walk away. While we are far from being as hapless as Greece, and we are not in the Eurozone (thank you Gordon) we must hold to the same negotiating tactic. No deal is better than a bad deal. We must be actively ready at all times to proceed without an agreement. The alternative is the 100 per cent certainty of a bad deal.

How could this unelected, elitist, bureaucratic EU institutions represent the will of the people of Europe, you might ask? It is a great question that has no answer. But there is far more important underlying truth, which is that no European governmental structure, no matter how virtuous, could ever be democratic. There may be EU citizens but there are no European people. An EU demos does not exist and all you have is a chaos of national politicians, led the Germans, desperately trying to create a country.

Of course you can argue all this until you are blue in face with a dedicated Remainer. Sadly, the Scottish establishment largely falls into this latter category. Their faith in the EU is, as Rev. David Robertson notes, religious. For them the EU is the "greatest project" every launched, which has prevented war in Europe and gives a wonderful future to every young person. In Scotland the Single Market is vital to our economy, much more so than poor failing RUK. How will do without generous EU funds? In chauvinistic rebellious Britain, the Brexit recession has started. Indeed, as we speak bankers are slipping away from their London desks heading to Dublin and Paris and this exodus is being kept secret by the British press (Yes, Lesley Riddoch actually wrote that in The National!). As for Jean Claude Juncker, well, he is just a humble civil servant…….

You couldn`t make it up!

Dear National,

I write in connection with Hugh McLean's letter of 29 July, in which he critiques the Leave position of Julia Pannell. I could take issue with most of what he writes but there is one bobby dazzler that needs to be tackled. I quote: "It should be made clear that the [EU] Commission is the civil service of the EU and in no country in the world are elections held for the posts". This is pure nonsense.

The role of the EU Commission is explained in the official website of the EU, which is www.europa.eu. There it is stated: "The European Commission is the EU's politically independent executive arm (emphasis in original text) it is alone responsible for drawing up proposals for new European legislation". The Commission is also, among many other things, the "guardian of the EU treaties [i.e. the EU Constitution]", enforces EU law, draws up EU budgets, prioritises EU spending, negotiates international agreements for the EU including the tariff elements of all free trade agreements, and functions as a foreign ministry. The foreign minister is known as the "High Representative of the Union for Foreign Affairs". Enforcing EU law involves among other things applying competition and state aid law. It was the Commission that recently struck down Ireland's tax agreement with Apple. These are some powerful civil servants! 

A normal civil service is appointed by an executive and is responsible to ministers. For every Sir Humphrey there should be a Jim Hacker. The EU Commission, as the EU itself makes clear, is a "politically independent executive arm". In normal speak that means a "politically independent government". This unelected government is so powerful that it has the "sole" and exclusive right to present new legislative proposals to the EU Parliament. What other civil service in the world can do that? What if the House of Lords had the sole right to initiate UK legislation? To the extent that the EU Commission is answerable to anyone, it answers to the EU Parliament. The only legal way that the Parliament has to restrain the EU Commission is to sack the President and all the 28 Commissioners. It was amusing that only a month or two ago, Jean Claude Juncker told the EU Parliamentarians to their faces that they were a "ridiculous institution". Well, at least the humble civil servant got that right. Sir Humphrey would have loved it! 

Hugh might be interested to know that Guy Verhofstadt laments the shocking state of EU democracy in his excellent recent  book "Europe's Last Chance". It is the best argument for Brexit that I have ever read. I quote from page 261: "Today's European Commission, … has become a mishmash of appointments from all those member states. A lottery, rather than voters decides its composition, and its size – twenty eight commissioners – is grotesque". Wait a minute, Hugh believes that these same Commissioners are merely civil servants! Why would voters elect civil servants?

Contrary to Hugh, no democratic state in the world would allow these Commissioner's positions to be unelected. The EU Commission is the unelected and autonomous executive arm of a powerful, centralised but still chaotic confederation. Not only that, more than half of our laws originates from the Commissioners! 

If the true nature of the EU Commission were more widely understood, would 62% of Scots have voted for Remain? 

William Ross, Aberdeenshire

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