Monthly Archives: July 2015

What if the template for the Greek crisis would be Yugoslavia?


There are many historical parallels being conjured since the Greek referendum was announced and looking for ‘historical’ lessons is as usual a favourite pastime of media comments. But one historical case has as far as I can see not been mentioned at all: the Socialist Federal Republic of Yugoslavia (FRY) in the 1980s. Clearly, the narrative that the wars in former Yugoslavia were all about ethnic-nationalist hatred still overshadows any political economy analysis. Yet, a closer look at Yugoslavia in its last hours reveals many disquieting parallels to the mess Europe and Greece are in today as the bloody wars of the 1990s were, in fact, triggered by the debt crisis of the FRY in the 1980s.

Like Greece the FRY had been piling up international debt that had been given mainly for geostrategic and ideological reasons and although the political and economic system had become highly dysfunctional, leaving the federal and some (not all!) republican institutions without far lower revenues than their expenses required (for all sorts of reasons that I cannot discuss here but which are well discussed in the very fine edited volume of Nabojsa Popov, or in the analyses of Susan Woodward here and here).

Like for Greece today, creditors at the time (the IMF, the US and the European Communities) became highly intransigent and nasty, requesting neoliberal restructuring and building up more and more pressure to oust the ‘socialist’ governments. And just like in Europe now, all sides fell back into nationalist-aggressive macho rhetoric’s to defend their position. The questions who or what had caused the Yugoslav debt, which republic had to repay just how much and who had to bear the brunt of the burden of restructuring were the key problems to be solved in the Federalist institutions of Yugoslavia; the response, however, was the rise of nationalist populists like Milosevic and Tudjman who, instead of proposing political programmes by which to rebuild one functioning welfare market economy in Yugoslavia, jumped around like a bunch of Kangaroo males sticking their tiny fists into each other faces.

The Yugoslav population was left out of the picture despite all sides claiming to represent ‘the people’. As David Dyker showed, concrete information on the debt burden and on the restructuring plans rarely reached the wider public; and if information did go out, it was clad in such a bureaucratic and technical language that it was perceived as insulting simply by the fact that it was incomprehensible. In last Sunday’s referendum, too, the technical aspects of the question were entirely irrelevant to the debate over the referendum, which became the stage of a highly ideologized confrontation between anti- and pro-neoliberal policies as well as anti- and pro-Europeans. The two cleavages are not congruent and also do not match up well with more classical socialist-conservative divides – again, like in former Yugoslavia where the divisions within the FRY did not follow simple patterns of liberal reformists vs. communists, federalists vs. nationalists or between those who argued for debt relief vs. those who aggressively used the debt question for their nationalist-populist agendas. In the end, the nationalist rethoric crushed all other voices, at gunpoint when needed, so that the multiplicity of voices and interests that these multiple cleavages reflected did not transform into a pluralist democratic debate but into nasty chauvinist warfare.

In the case of Yugoslavia the populists won over the real political debate on the rebuilding of Yugoslavia’s economy and political institutions. They then did exactly what macho nationalists have always done, they made war. In the Manichean logic of populist Kangaroo fighting there is no other way to keep in power. The nationalist boxing suited well the ‘international community’ whose harsh debt repayment conditions had thrown the FRY’s leadership into those ring fights in the first place. The initial question on the table, namely how to reform a failing economy in order to save guard high levels of social justice, i.e. the quarrel between welfare market economies and neoliberal policies, was brushed away by the ethnic-nationalistic bickering over whose great-grandfather had killed whose great-grandfather two or more generations ago or whether strong, concentrated black coffee is to be called ‘Croatian’, ‘Bosnian’ or ‘Serb’ coffee. No need to rethink neoliberalism, it was all ancient ethnic hatred.

Unless last Sunday’s ‘No’ is taken as invitation to think collectively about a common solution to Greece’s debt – and debt relief certainly seems as the solution which makes political and economic sense – and unless all sides drive back the nationalist populist rhetoric of the past weeks the risk is that the parallel with former Yugoslavia becomes ever more real. Varoufakis’ resignation and the toning down of aggressive breast banging it will bring, is a clear Greek step in the latter sense. Now it’s the EU’s turn…