Has the Eurozone crisis undermined Europe’s place in the world? In an interview with EUROPP’s editors Stuart A Brown and Chris Gilson, Saskia Sassen discusses the role of finance in the crisis, the threat posed by transnational systems of surveillance, and the potential for public disorder to give a political voice to the powerless.
In your view, what is the root cause of the Eurozone crisis?
I have great respect and great admiration for the project that is European integration. That respect comes not from the notion that we should all get together and create some sort of ‘super-state’, but from the foundational elements that drove the project: the belief in law and the belief in non-military solutions. But there is one big qualifier to that respect, which is that when the push to accelerate the adoption of the euro was taking place it was driven by corporations. The big winners from the euro were the big corporations who could become bigger and who could enter the global economic space more effectively. The ones that suffered were the smaller firms connected to subnational and regional markets.
Now, I’m not against having an integrated currency – certainly for me, as someone who travels all over Europe, it’s fantastic – but the problem was therush. I remember the debates that there was supposedly no way we could do it. Well, we got it done. Why? Because enormously powerful corporate interests were behind it and when they want to get something done, by God they get it done. The fact that most of these national economies are constituted by small enterprises, regional markets, and localised production – that was simply overlooked. And now I think we’re paying the price for that.
There are, of course, other issues that come into the picture. One is that by integrating on the continental scale, and by having a single currency, it became much more worthwhile for finance – which is very different from banking – to do its thing. If we still had separate national currencies then central banks sitting on top of the situation tightly would have prevented the scale-up that makes it worthwhile for global finance. When you have that level of integration, finance moves in and finance ‘financialises’.
Finance is not about money: if you take outstanding derivatives, which are the basic measure of the value of finance, then it’s several times larger than global GDP. Finance is extraordinarily disruptive and part of the issue right now is not the lack of discipline in Eurozone economies. It’s not even the lack of responsibility displayed by national governments. It’s the financialisation of everything. The situation in Greece, where we suddenly had financial markets betting against the country is, to me, criminal conduct.