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How a Green New Deal could change Europe

July 28th, 2020
topic:Sustainable Development
by:Yair Oded
located in:Germany, France, Greece
tags:Capitalism, climate action, climate crisis, Coronavirus, democracy, economic crisis, EU, European Commission, Green New Deal, Green New Deal for Europe

Across the globe, humanity is faced with mounting, concurring crises, all of which are inextricably linked: a worsening ecological collapse, a global pandemic, the erosion of democratic regimes, egregious violations of human and civil rights, and recurring economic meltdowns that wreak havoc on an increasing number of demographics.

Over the past couple of years, initiatives calling for the implementation of Green New Deals began to emerge across the world. Generally speaking, Green New Deals advocate for the immediate transition to large scale, state-sponsored production of renewable energy sources that addresses and remedies long-standing socio-economic injustices. 

In April 2019, the Democracy in Europe Movement (DiEM25) launched a campaign dubbed the Green New Deal for Europe, through which it advocates for systemic transformations in Europe that will render it just, equitable, and sustainable. 

FairPlanet spoke with the initiative’s campaign coordinator, Pawel Wargan, about the objectives of their campaign and how they believe a Green New Deal for Europe could help address challenges such as the climate, economic, and refugee crises. 

FairPlanet: Tell us briefly what the Green New Deal for Europe is.

Pawel Wargan: The Green New Deal for Europe is a campaign that emerged in the wake of the European Parliament elections last year as an attempt to carry forward the Green New Deal platform, which DiEM25 in its electoral dimension ran on. It wanted to carry forward some of its electoral agenda beyond those elections, not only to capitalise on the growing climate movement that was picking up steam, but also to define the boundaries of what a Green New Deal for Europe should be before the European Commission had a chance to set its own agenda, and to lay down the gauntlet.

How did that initiative evolve? 

Over the first few months we started speaking to people who had done work on Green New Deal projects - from think tanks to research organisations to academics and activists around the continent. We decided that the best thing we could do initially was to put together a comprehensive and detailed proposal for what a Green New Deal for Europe that is achievable within the political and economic architecture of the EU could look like. So we built a fairly broad coalition around the Green New Deal for Europe and wrote a policy paper, and the idea ever since was to try to use the paper and policy ideas that emerged from it to push other parts of the climate movement to more politicised and more concrete demands, and away from the kind of reactive activism of opposing climate inaction rather than calling for something concrete.

You wrote in a 2019 article for Tribune that our financial system is “the fuel of the climate crisis.” Would you explain in what ways global finance systems and banks are exacerbating the planet’s ecological collapse? 

The starting point is that pretty much everything in our material reality is funded by private finance. Whether it’s the phone you’re using or the infrastructure that we use in cities, it’s mostly funded by private banks, and this model of funding has been so deeply embedded in the EU’s legal architecture that even when there’s public funding, it’s usually a small amount of public funding to incentivise a private loan with the profits going to the private sector. So, effectively, you have the state subsidising private profits and socialising the risks of investment by issuing guarantees for these loans. The problem with private banking of this kind is that it demands a return on its investment, so banks charge an interest rate and you need to repay back more than you borrowed, which means that you have to grow as a business; you have to generate enough profit, not only to pay back the loans, but also to placate your shareholders and senior staff. 

What ends up happening is you have a system in which the profit motive demands the increasing exploitation of resources. It doesn’t seem to be possible to move beyond this mode of over-production and over-consumption when most of that activity is still financed by the private sector, which makes decisions based on what generates the highest returns at the lowest risk instead of what generates the greatest social utility. 

As part of the Green New Deal for Europe, DiEM25 is advocating for the issuance of Green Bonds. What are they exactly and how could they rectify issues embedded in the current system? 

In Europe you have this public investment bank, called the European Investment Bank - and it has the power to issue bonds which are safe, in part because European banking legislation subjects them to preferential capital treatment, recognising that they’re backed by the European Central Bank. The idea is that if the EIB issued a ton of [green] bonds, the bonds will effectively act as a sponge, providing a safe asset to the financial sector. A lot of the money that’s floating around the banking sector, not really doing anything, would then be absorbed by this investment institution. Then what we advocate is that that money is invested directly by the public, not through this model of public-private co-financing, and with some democratic accountability. So people can have a say over where the money actually ends up. [Which would mean] quite a fundamental reversal in the financial architecture of the EU.

Your initiative references austerity quite often. How does austerity tie into this crisis in your view? 

If you think about austerity as a function of privatisation, what we see is that for the longest time austerity has been wielded by the mlulti-lateral financial institutions in the Global North against predominantly socialist countries in the Global South, where the IMF and World Bank would come in and say ‘O.K. you’re in trouble, we’ll give you a big loan to pay off all of your other Northern creditors, but in exchange you have to sell off your public infrastructure, you have to sell off your hospitals, your airports,’ and this has been very successfully used to undermine states across Southeast Asia, South America, and Africa. And then in the Greek crisis in 2005, that strategy was brought home to Europe, where the very same techniques were used against countries like Greece, with mass market liberalisation, the privatisation of public services and deep long-term austerity. 

Aside from issuance of Green Bonds, how will a Green New Deal seek to tackle these environmentally destructive financial systems? 

I think that, at its most abstract, the kind of Green New Deal that we’re advocating is about shifting systems in society from a mode of competition to a mode of cooperation. And I think a world in which the main determinant of your success is how much profit you make is one in which you’re necessarily going to be ruthless towards others; you’re necessarily going to undermine the basis of social stability by cutting wages, firing people, using the threat of unemployment as a disciplinary tool to prevent labour unions from forming. The aggregate effect of all of this is that society begins to splinter into units of individuals battling for self-preservation. And so the idea is that by empowering people to have more of a say in their lives about where investment goes, about what they need, about what a good job is, and so on, then you necessarily have to take a broader perspective.

Does your team collaborate with like-minded organisations outside of Europe, specifically in the global south? Is there an attempt to create a global network of Green New Deal initiatives?

This whole campaign was very much geared towards trying to shape the discourse within Europe, and as part of that, of course, we reached out to people in the global south, in the U.S., to learn from their experiences. But this from the beginning was a project to transform Europe, which included, necessarily, various proposals to make amends for Europe's history of colonialism and extraction across the global south, through reparations, technology transfers, and so on. 

But I think that the bigger issue in this is, for example, when you look at the Black Lives Matter protests, I started to get a sense that these protests are much more powerful as a climate movement than the climate movement that we’ve seen explode over the past few years. Black Lives Matter is fundamentally about human dignity, and it recognises in its call for dignity the idea that justice has to be central to any kind of future political project that respects human life over profit. And you can’t build a just society that recognises its legacy in the global south without also recognising the legacy of environmental plunder, of environmental destruction and pollution that’s happening there. And so if we are to respond to that call and acknowledge it as something that’s a worthwhile political project, then it necessarily means supporting all those people who have been pushed and kept down by Europe and the U.S. for decades and centuries. I think this recognition of the interconnectedness of the poverty of the global south and the prosperity of the global north that this movement has brought to light is vital.

Will a Green New Deal for Europe address the issue of migration and the treatment of asylum seekers? 

I think it must, but it calls for a nuanced assessment of the situation. A lot of the migration we see coming into Europe now is involuntary migration. It’s not necessarily in all cases people fleeing war, although it might be, but it’s people fleeing violence, people fleeing abject poverty, people living in conditions in which there is nothing left for them where they are, and so they’re forced to leave. We’re going to see more and more people in that situation as the climate crisis intensifies, and there is a case to be made that if you are serious as an economic bloc as powerful as the EU about supporting green transitions in other parts of the world, then you can help create the conditions for people to stay home instead of being forced to leave. 

What practical steps can be taken to achieve that? 

That means making reparations, making amends; it means huge technology transfers and making sure that green technology is available for free in countries that have been plundered. It means supporting job creation. But of course you’re always going to have some migration, and my view is that we need an open door policy. This mythology of the migrants stealing people’s jobs is just not true, and part of the reason it’s been so powerfully weaponised in the past few years is that the political centre has started buying into the rhetoric of the far right about immigrants, about refugees, about them exporting terrorism, and it’s a really toxic narrative that is difficult to contest because the entire European political establishment has bought into the rhetoric of the far right. 

In your Tribune article you state that the free-market ideology has penetrated our lived experience to such an extent that people are viewed as “consumers” and national budgets as “shareholder reports.” Would you elaborate on what you mean by that? 

What I meant by the phrase is that, literally, the logic of the market applies everywhere. When you pick up your phone and you open Instagram or your Twitter and scroll through it, the fact that you’re spending a lot of time on these platforms is by design, because the more time you spend on them the more money goes into these things, so our very routine behaviours are being programmed around particular market-oriented activities, and to change that you need to make a massive appeal to the public, which we haven’t been that good at doing, I’ll admit. 

What would you say are your challenges in that particular area? 

In the European election campaign last year DiEM got a couple of million votes - many people were inspired by the programme - but that’s not enough. There needs to be a broad appeal also along class lines. This is difficult to do in Europe because, unlike in the U.S. - where neoliberalism has really taken hold and you can’t get access to healthcare, the infrastructure is crumbling, and most people are two paychecks away from homelessness - people in Europe have less of a reason to be pissed off. Here, on the whole, the centre is still holding, and has really consolidated its support in the past few months with the coronavirus response. And so a lot of the labour unions, a lot of the people who would ordinarily fight against the system aren’t doing so because they view the systemic struggle as too radical. 

Given these circumstances, what can be done to galvanise the broader European public?

I think that protest action that brings together the climate movement but also these parts of the labour movement that are increasingly climate conscious are the most powerful tool we have right now. They’re the most effective at bringing these issues to people’s attention.

How did the coronavirus pandemic verify, if at all, things you suspected to be true about the system of governance in Europe? Do you find that it bolstered the call for a Green New Deal?

I don’t know that it has, and I worry that it might have the opposite effect. But the coronavirus pandemic exposed a lot of the things that we knew to be true about the political and economic system but weren’t really obvious to many. For example, this idea that the state is toothless, the state has no power, that we have to wait around for the market to do anything - that was proven to be false within a matter of weeks. All of a sudden governments went on total lockdown, in Germany businesses got support, freelancers got money; they really kicked into action very quickly. This shows that when a state wants to act for the protection and benefit of its citizens, it can. So the first big neoliberal lie that the state is toothless, that the state has no agency, was proven false. 

Now, in theory, it should open up the possibility for more radical climate action and more interventionist state policies, but the precedent in Europe with this kind of stuff, the most immediate precedent being the global financial crisis, is that when states go all out to sustain the economy in times of crisis then the flip side to that will be austerity.

So the question now, and I know that some European member states like Germany are pulling away from this logic of austerity and are extending this period of expanded fiscal space for a few years, but it’s really not clear what they’re going to do when the coronavirus situation dissipates and states find themselves with massive debts on their balance sheets. 

Before we wrap up, what would you say are the main challenges your team is facing as you promote the Green New Deal? 

The two big challenges for us is that on one side we have the whole institutional architecture of the EU, which is just not capable of changing at the pace required to deliver the kind of bold action that we need to have on the climate, and on the other hand we have a climate movement which is increasingly politicised but was founded on this insane idea that their struggle is not political, that all they want is for politicians to read the IPCC report and understand what’s happening. Their analysis is that what was happening was ignorance on part of our leaders and legislatures rather than a kind of more structural crisis that we have with the deep imbalance of economic power and political power within our democracies. And so we realised very quickly that there’s no point in lobbying the European institutions, because the change is not going to come from them, and shifted towards lobbying the climate movement - trying to pull them towards a more politicised position with more concrete demands and more detailed vision of the future.

Is there an indication that things are moving in a positive direction? 

What gives me hope is not only that the climate movement is, in parts of Europe at least, becoming quite politicised, and recognises that it has to have concrete demands and political strategies to make these demands a reality, but also just the huge response to the Black Lives Matter protests in Europe. It has the potential to become the most powerful climate movement that we have. So I have some hope, if not optimism. 

Article written by:
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Yair Oded
Author, Project Editor, Contributing Editor
Germany France Greece
Over the past couple of years, initiatives calling for the implementation of Green New Deals began to emerge across the world.
The Green New Deal for Europe stands for systemic transformations in Europe that will render it just, equitable, and sustainable.
The kind of Green New Deal that we’re advocating is about shifting systems in society from a mode of competition to a mode of cooperation.