You’ve gotta serve someone: Grexits, Ukrainian dreams and the systems that bind us

William Echols

Greece’s potential exit from the eurozone, if not the whole European project together, cuts a sharp contrast with Ukraine’s distant hope of one day joining the EU. The issue at hand, however, is not an ideal vision of what the world should be, but which system offers the best potential outcome for relatively small fish forced to tread deep global waters.

Reactions to Greece’s economic woes has almost become a modern day Rorschach test in eliciting a person’s social-political views. For those who put a strong focus on systems, fault for Greece’s imploding economy are almost always laid squarely at the feet of its creditors. One need only read any leading European daily with a leftist bent to see op-ed after op-ed declaring the Troika (the holy spirit of the EU represented by the father in the form of the European Commission, the IMF and the European Central Bank) as an elitist force whose primary aim is the very destruction of democracy itself. For those more enamored with notions of personal responsibility and an arguably inflated sense of personal agency, feckless governance and a wholly entitled population (retirement at 45 with the highest EU-wide pension payments to boot!) has seen Greece’s GDP shrink year-on-year while unemployment soared. Greek’s were living high on the hog on borrowed money, only to lash out at the ‘adults in the room’ when their allowance was cut off. Or so the argument goes.

 (AP Photo/Petros Giannakouris)

(AP Photo/Petros Giannakouris)

For those who recognize the global system as a deeply complicated and chaotic place, both positions contain kernels of truth, are not mutually exclusive, but are also more married to self-serving ideological interpretations of world events than reality on the ground.

This article, however, is less concerned with knowing how much of which finger to point at who in the unfolding Greek drama. The question, rather, is why would young Ukrainians risk their lives and the inevitable ire of Russia to subject themselves to a European system which many Greek’s are clambering to get out of?

One only need look to the eastern members of the financial union to see a very definite pattern emerge.

Writing for Bloomberg, Leonid Bershidsky noted that “eastern members of the euro are among the strongest opponents of bending to Greek demands.” This is partly explained by jealously — partly by the eastern member’s greater relative exposure to Greek debt. But as Bershidsky argues, these countries were also forced to “bend over backwards” to satisfy  the increasingly stringent requirements for membership placed on them by the monetary union. Ukrainians for their part, as he notes, have little sympathy for Greeks struggling to get by on pensions of 600 euro a month, with the average Ukrainian getting by on a fraction of that sum.

Ukrainian President Petro Poroshenko’s reaction followed a similar line.

“This year, our responsible and effective policies have consolidated the entire world’s help and solidarity around Ukraine,”Bershidsky cites Poroshenko as saying.

”Greece has found itself in isolation due to its less than responsible behavior when it tried to blackmail the European Commission,” he continued.

Petro Poroshenko

Petro Poroshenko

Poroshenko’s logic is simple, we are loved by the world because we do what Brussels asks of us. The Greeks, in contrast, are biting the hand which, for many Eastern Europeans, keeps the Russian wolves at bay.

Another reason for generally higher levels of enthusiasm among central and eastern Europeans regarding the EU as a whole is that they have something their western counterparts (apart from Eastern Germans) do not have — a parallel experience within another political and economic system.

If one were to take a Wallersteinian approach to the global order, peripheral nations have always been subsumed to the world system’s core nations.

America, the hyperpuissance or hyper power, has gone farther towards merging the nation state with the actions of world-system than perhaps any other political entity in human history. As George W. Bush’s senior political advisor Karl Rove allegedly said: “We’re an empire now, and when we act, we create our own reality.”

World Systems Theory has its problems, and the degree to which America creates its own “reality” (as well as the nature of that reality) are hotly contested. But in a world with regional centers of power which, at best, offer different conditions on which to interact with the global capitalist system, the argument is less about ideology, and more about which nexus (and by extension set of rules) offers the best outcomes.

Unfortunately, some countries find themselves on fault lines between these vying interests. Ukraine is by and large the greatest literal and metaphorical example of a state with the misfortune of being rent apart on every level due to its geography.

Prior to Moscow’s clandestine invasion, opinion was fairly evenly divided between whether Ukraine should seek integration in the European Union or the Eurasian Customs Union of Russia, Belarus and Kazakhstan (which now includes Armenia and Kyrgyzstan) — 42 vs 37 percent respectively. As the Washington Post noted, citing a poll conducted by Gallup, that discrepancy had grown to 59 vs 17 percent over the span of a year.

The US itself has decried the Customs Union as an attempt to resovietize the former Communist bloc states. This attitude is fundamentally incorrect. In Soviet times, Moscow (and Russia by extension) functioned more like Washington in regards to its worse performing states: a disproportionate amount of money was sent to the periphery to keep them afloat. For all its faults, the Soviet Union was engaged in a massive social welfare project, whose benefits are still exalted by many, especially in Soviet states far from Europe’s borders.

Rather than looking like a new Soviet Union, the Customs Union, in fact, is more interested in creating a rough analogue to the EU, with Russia taking the place of Germany. Despite the rhetoric, Russia’s political leadership is deeply committed to the global capitalist system and have little interest in the social responsibilities or political ideology implicit in the Soviet system. Russia might throw its support to disparate political forces in the West (one minute it’s the far-left Syriza, the next, neo-fascist Golden Dawn), but in truth, all Russia’s leadership wants if for the West to shut up about corruption and human rights and keep doing business.

Golden Dawn. Photo by Milos Bicanski /Getty Images

Golden Dawn. Photo by Milos Bicanski /Getty Images

As I wrote previously, Moscow has often been described as a ‘voronka’ or funnel, in the sense that it is the focal point for all of Russian wealth accumulation. Its not just a matter of the disproportionate amount of foreign direct invest that flows into the capital. Russia, after all, is a land bound empire with an extractive form of economy. The resources come out of the east, the money flows west.

Putin’s Customs Union is arguably a means of extending the mouth of that funnel to the former Soviet republics. In a country where the rule of law is virtually non-existent, that funnel is set to expand illicit gains as well. Last year, Ukraine’s chief prosecutor accused former president Viktor Yanukovich of  leading a mafia-style syndicate that siphoned $100 billion out of the country, $32 billion of which was sent to Russia by truck).

For many Ukrainians, even those who have no Soviet-style illusions about the West, there are very tangible benefits from moving away from a Russian-centric system where corruption is not just a by-product of economic activity, but in many cases the intended outcome. Moreover, Putin doesn’t care if you gun down at least 14 protesters (though to be fair, neither did Tony Blair,) nor will he be pushing for unified CO2 emission targets, bloc-wide anticorruption measures or cross-border healthcare rules. But for those seeking a far deeper social contract, Europe seems like the logical choice.

Scene from December 2011 Zhanaozen massacre in Kazakhstan

Scene from December 2011 Zhanaozen massacre in Kazakhstan

The question is, does Europe really offer a way out for Ukraine? Some have argued that one need look no further than Poland for an answer. Much has been written about the shock therapy given to Poland in the 90s, and there is much room for debate whether such harsh austerity measures were at all necessary. But one thing remains true. During the turbulent 90s, Poland was mired in debt and had a GDP per capita on par with Ukraine’s (roughly $1,600) Today, Ukraine’s GDP per capita is believed to be anywhere between a third and a fourth of its Western neighbor.

To be fair, Ukraine is an absolute basket case, with its annual GDP per capita growth rate coming in dead last when measured against 20 other Eastern Bloc states between 1992-2013. Even without Russian pressure or artificial wars being fomented in its east, Ukraine’s internal problems are legion.

Source; Quartz, citing IMF data

Source; Quartz, citing IMF data

It remains to be seen if, given another orbit, Ukraine would go the path of Poland, or stay the course of Greece, who, much like Odysseus, is still deciding whether to dance with Scylla or Charybdis. But seeing what Russia’s put on offer to those who would choose Brussels over Moscow (cheap gas in one hand and a knife to carve out new borders in the other), it is little wonder that the likes of Kiev and Tbilisi have set their sights for Brussels, even while many in the West, from the shore of the Mediterranean to the English channel, are looking to jump ship.

But whatever way you jump, in the end, you gotta serve someone. And given that the choice in the 21st century has thus far been reduced to variations on a capitalist theme, for idealists, as well as those on the far left and far right, there is no choice at all. But for those who have seen firsthand the actual differences that exist between the social contracts on offer between various players in the global financial system, what appears to be a game of inches to the ideologically committed amounts to oceans of difference when viewed at scale.


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