What Does Europe Want? The Union and its Discontents. Slavoj Žižek

‘Well, that’s my second reason.’

      It is easy to imagine a similar conversation between a European Union financial administrator and a Cypriote Rabinovitch today – Rabinovitch complains: ‘There are two reasons we are in a panic here. First, we are afraid that the EU will simply abandon Cyprus and let our economy collapse …’ The EU administrator interrupts him: ‘But you can trust us, we will not abandon you, we will tightly control you and advise you what to do!’ Rabinovitch responds calmly: ‘Well, that’s my second reason.’

      Such a deadlock effectively renders the core of the sad predicament of Cyprus: it cannot survive in prosperity without Europe, but also not with Europe – both options are worse, as Stalin would have put it. Recall the cruel joke from Lubitsch’s film To Be or Not to Be: when asked about the German concentration camps in occupied Poland, responsible Nazi officer ‘Concentration Camp Ehrhardt’ snaps back: ‘We do the concentrating, and the Poles do the camping.’ Does the same not hold for the ongoing financial crisis in Europe? The strong Northern Europe, focused in Germany, does the concentrating, while the weakened and vulnerable South does the camping. What is emerging on the horizon are thus the contours of a divided Europe: its Southern part will be more and more reduced to a zone with a cheaper labour force, outside the safety network of the welfare state, a domain appropriate for outsourcing and tourism. In short, the gap between the developed world and those lagging behind will now run within Europe itself.

      This gap is reflected in the two main stories about Cyprus which resemble the two earlier stories about Greece. There is what can be called the German story: free spending, debts and money laundering cannot go on indefinitely, etc. And there is the Cyprus story: the brutal EU measures amount to a new German occupation which is depriving Cyprus of its sovereignty. Both stories are wrong, and the demands they imply are nonsensical: Cyprus by definition cannot repay its debt, while Germany and the EU cannot simply go on throwing money to fill in the Cypriot financial hole. Both stories obfuscate the key fact: that there is something wrong with the entire system in which uncontrollable banking speculations can cause a whole country to go bankrupt. The Cyprus crisis is not a storm in the cup of a small marginal country; it is a symptom of what is wrong with the entire EU system.

      This is why the solution is not just more regulation to prevent money laundering etc., but (at least) a radical change in the entire banking system – to say the unsayable, some kind of socialisation of banks. The lesson to be taken from the crashes that accumulated worldwide from 2008 on (Wall Street, Iceland …) is clear: the whole network of financial funds and transactions, from individual deposits and retirement funds up to the functioning of all kinds of derivatives, will have to be somehow put under social control, streamlined and regulated. This may sound utopian, but the true utopia is the notion that we can somehow survive with small cosmetic changes.

      But there is a fatal trap to be avoided here: the socialisation of banks that is needed is not a compromise between wage labour and productive capital against the power of finance. Financial meltdowns and crises are obvious reminders that the circulation of capital is not a closed loop which can fully sustain itself, i.e., that this circulation points towards the reality of producing and selling actual goods that satisfy actual people’s needs. However, the more subtle lesson of crises and meltdowns is that there is no return to this reality – all the rhetoric of ‘let us move from the virtual space of financial speculations back to real people who produce and consume’ is deeply misleading; it is ideology at its purest. The paradox of capitalism is that you cannot throw out the dirty water of financial speculations and keep the healthy baby of real economy: the dirty water effectively is the ‘bloodline’ of the healthy baby.

      What this simply means is that the solution of the Cyprus crisis does not reside in Cyprus. For Cyprus to get a chance, something will have to change elsewhere. Otherwise we will all remain caught in the madness that distorts our behaviour in times of crises. Here is how Marx defines the traditional miser as ‘a capitalist gone mad’, hoarding his treasure in a secret hideout, in contrast to the ‘normal’ capitalist who augments his treasure by throwing it into circulation⁴:

      The restless never-ending process of profit-making alone is what he aims at. This boundless greed after riches, this passionate chase after exchange-value, is common to the capitalist and the miser; but while the miser is merely a capitalist gone mad, the capitalist is a rational miser. The never-ending augmentation of exchange-value, which the miser strives after, by seeking to save his money from circulation, is attained by the more acute capitalist, by constantly throwing it afresh into circulation.

      This madness of the miser is nonetheless not something which simply disappears with the rise of ‘normal’ capitalism, or its pathological deviation. It is rather inherent to it: the miser has his moment of triumph in the economic crisis. In a crisis, it is not – as one would expect – money which loses its value, and we have to resort to the ‘real’ value of commodities; commodities themselves (the embodiment of ‘real /use/ value’) become useless, because there is no-one to buy them. In a crisis, ‘money suddenly and immediately changes from its merely nominal shape, money of account, into hard cash. Profane commodities can no longer replace it. The use-value of commodities becomes value-less, and their value vanishes in the face of their own form of value. The bourgeois, drunk with prosperity and arrogantly certain of itself, has just declared that money is a purely imaginary creation. ‘Commodities alone are money,’ it said. But now the opposite cry resounds over the markets of the world: only money is a commodity … ‘In a crisis, the antithesis between commodities and their value-form, money, is raised to the level of an absolute contradiction.’⁵

      Does this not mean that at this moment, far from disintegrating, fetishism is fully asserted in its direct madness? In crisis, the underlying belief, disavowed and just practised, is thus directly asserted. And the same holds for today’s ongoing crisis: one of the spontaneous reactions to it is to turn to some commonsense guideline: ‘Debts have to be paid!’, ‘You cannot spend more than you produced!’, or something similar – and this, of course, is the worst thing one can do, since in this way, one gets caught in a downward spiral. First, such elementary wisdom is simply wrong – the United States was doing quite well for decades spending much more than it produced.

      At a more fundamental level, we should clearly perceive the paradox of debt: at the direct material level of social totality, debts are in a way irrelevant, inexistent even, since humanity as a whole consumes what it produces – by definition, one cannot consume more. One can reasonably speak of debt only with regard to natural resources (destroying the material conditions for the survival of future generations), where we are indebted to future generations which, precisely, do not yet exist and which, not without irony, will come to exist only through – and thus be indebted for their existence to – ourselves. So here also, the term ‘debt’ has no literal sense, it cannot be ‘financialised’, quantified into an amount of money. The debt we can talk about occurs when, within a global society, some group (nation or whichever) consumes more than it produces, which means that another group has to consume less than it produces – but here, relations are not as simple and clear as it may appear. Relations would be clear if, in a situation of debt, money would just have been a neutral instrument measuring how much more one group consumed with regard to what it produced, and at whose expense – but the actual situation is far from this. According to public data, around 90 per cent of money circulating around is the virtual credit money; so if ‘real’ producers find themselves indebted to financial institutions, one has good reason to doubt the status of their debt – how much of it was the result of speculations which happened in a sphere without any link to the reality of a local unit of production?

      So when a country finds itself under the pressure of international financial institutions, be it IMF or private banks, one should always bear in mind that their pressure (translated into concrete demands: reduce public spending by dismantling parts of the welfare state, privatise, open up your market, deregulate your banks …) is not the expression of some neutral objective, logic or knowledge, but of a doubly partial (‘interested’) knowledge: at the formal level, it is a knowledge which embodies a series of neoliberal presuppositions, while at the level of content, it privileges the interests of certain states or institutions (banks etc.).

      When the