Lexit’s Digest is not a press or media review rushing for the most up-to-date ‘breaking news’. Its focus is on highlighting interesting opinion pieces, analysis and background information etc. from different free sources (progressive or not) on Lexit-related issues. By concentrating these in one place – Lexit’s Digest – we hope to create a modest information resource that might be useful for readers of this website.
Lexit’s Digest No. 6, 10 February 2017
European Union: tightening ‘Fortress Europe’, quarrels about the vision of a two-tier Europe
At their informal EU Summit in Malta on 3 February 2017, EU leaders agreed on next steps to block refugees coming to the European Union. This time the focus was on a deal with Lybia, but there is more in the pipeline along the same approach with other countries on the African continent, see here.
It seems that closing the routes for refugees via the ‘Balkans’ and the Mediterranean Sea, ‘Security & Defence’ and ‘handling Brexit’ will become the main items of the EU informal Summit on the 60th anniversary of the Rome Treaty, scheduled for 25 March 2017. This might entail postponing decisions on items such as a deepening the integration of the euro-zone as envisaged by the earlier Five Presidents Report. A recent euractiv analysis points out that “diverging views continue to undermine efforts to forge a common vision” (and a roadmap for the ‘future EU’).
Germany’s chancellor Angela Merkel might have hoped to reign in the right-wing populist government of Poland for her plans to move on towards a European Union with ‘different speeds’ (evidently: a core- periphery constellation, with Germany aiming at securing its status as the dominant power at the helm of both). But after Merkel’s visit to Warsaw the leader of the ruling PiS, Jarosław Kaczyński, stated his strong opposition to a ‘two-tier European Union’.
There is a lot of irony in this: US-President George W. Bush’s War on Iraq in 2003 established the notion of ‘Old vs. New Europe’ against Germany’s chancellor Gerhard Schröder and French President Jaques Chirac at the time. A lot of the Eastern European EU Member States (including Poland, and also quite a number from Western Europe with the UK at the helm) participated in the ‘Alliance of the Willing’ in that war effort, while Germany and France abstained officially. Now the rulers of Poland are afraid of Trump, and the leaders of the Baltic States share similar fears. They appeal to NATO for ‘more protection’ against ‘Russian imperialism’. On the other hand, key players of the Visegrad states (such as Hungary etc.) and other Eastern European member states, seek for more economic and political co-operation with Putin’s Russia (and/or China). As a recent example on this, see e.g. Slovenia (here).
What is often not so much noticed by the western European left, are the crises on the EU’s eastern periphery, such as Romania and Bulgaria (see here, here and here), and also in its ‘Balkan neighbourhoods’ (see eg. on Bosnia here, but there are equally ‘failed state’ EU protectorates such as Kosovo etc.). As regards the EU’s Eastern enlargement, there is a combination of economic domination by the ‘EU core’ and ‘internal’ problems concerning corruption, both based on deeper class-based structures. This and the resulting economic and social volatility in Eastern Europe adds to the core EU-elites problems of forging an ‘ever closer union’.
Merkel’s calculation at her recent visit to Warsaw was: Polish fears of a possible ‘détente’ on geo-strategy between Trump and Putin might be turned into a ‘bridge’ for forging an alliance between Germany, Poland and France on the future of the EU, thus trying to build a new powerhouse for keeping the EU 27 together. Concerning France, German elites prefer Fillon or Macron as future Presidents. Both are being regarded as candidates for securing ‘continuity and stability’ meaning continuing with neoliberal reforms, for repairing the German-Franco axis, and for enlarging this with allies in Eastern and Southern Europe. On the propagandistic level, this approach implicates to ‘speak toughly’ to the US, Russia and China, in ‘defence of western values’ and ‘European interests’.
The critical website German-Foreign-Policy.com recently provided some short analysis on how the German government envisages to ensure its dominance within the EU-27 (see here) and also to become an ascending power vis à vis the US under Donald Trump (see here). On the controversy over the skyrocketing German current surplus mentioned there, there is an interesting piece from ‘The Economist’.
The ‘Club Med’ (EU Mediterranean countries) recently held their second meeting in Lisbon and adopted a ‘Lisbon Declaration’. Hopes (from the euro-left) or fears (from conservatives) that this group – initiated by Alexis Tsipras – would challenge the dominance of the European core are unfounded. The Lisbon Declaration is clear about their support for Fortress Europe, the Defence Union, for the setting up of a fiscal capacity for the euro area etc.. The ministers of defence of France, Italy, Portugal and Spain even called for a stronger presence of NATO in their region. And by the way, there is a also the conservative minority government of Mariano Rajoy in Spain, which (as some other European counterparts) waves the flag towards Trump: We are ready to act as ‘honest mediators’ between the US, the EU – and in that case – Latin America (see here).
Look west, look east in the European Union – it’s ‘dog eats dog’. It is about diverging views of the not-so-rich member states elites on who could be the future ‘master’ with sufficient powers to preserve their respective ‘national interests’ – the US, Russia/China, or Germany – and how to gain room for manoeuvre for themselves in that international hierarchy which is becoming more unpredictable. This was always a feature in the history of ‘European integration’ after World War II, and is very visible now as the EU is confronted with handling multiple global and European crises.
Upcoming elections in the Netherlands on 15 March 2017
There is an interesting opinion piece by NRC Handelsblad columnist Tom-Jan Meeus on the rise of right-wing populist Geert Wilders, also dissecting the failures of the centre-left. Maybe to a higher degree as in other EU countries, the political spectrum in the Netherlands is currently very fragmentized, voting intentions very volatile etc. (so do not take the polls too seriously), and finally 5 to 6 parties may be needed to form any government at all (for an analysis see here). It’s a real shake-up of the former Dutch liberal ‘consensus democracy’ that always provided ‘stability’, whether entrusted to centre-right or centre-left coalitions …
Brexit on track …
The UK House of Commons adopted the ‘Brexit bill’ of Theresa May without amendments – see here. The UK government earlier on provided a White Paper on its Brexit Strategy, based on 12 principles (see the full document here). The Article 50 bill will now go to the House of Lords and is supposed to be finalised by mid March. On the troubles of Jeremy Corbyn’s Labour, see here. And how some leftist Irish Republicans perceive what is coming after Brexit, see here. So far, the ‘Global Britain’ Right calls the shots. Labour’s position to accept the Brexit vote is democractic, but its message and programme for a radical political alternative to the Tories and UKIP (finally, a ‘Lexit’) is still far from clear.
Some views from leftists on Trump and on left strategy in the European Union
Leading Russian leftist intellectual Boris Kagarlitzki criticises the US-Left concerning the Anti-Trump protests: “Surprisingly, the majority of “critically thinking” intellectuals turned into an easily managed and manipulated mass, without any personal opinions or will. However, even those who are skeptical about the protests, are not inclined to analyze what is happening in class or socio-political categories.” His conclusion: “The Left has a choice: to promote grass-roots organizations and to put forward significant social demands while defending the movement’s independence in relation to the Trump administration, or participate in the conspiracy of the elites as extras, becoming pawns moved by an invisible hand of the elite on the political chessboard“. For the full article see here.
With regard to Trump’s travel ban against seven Muslim countries, Patrick Cockburn provides an interesting analysis on how this fits in with an evolving strategy of the Trump administration against Iran, see here.
Finally, there is the Euromemorandum 2017 by the ‘European Economists for an Alternative Economic Policy in Europe’ available now. Its core orientation it is still about promoting ‘EU reform’. But there are also interesting analyses on other items such as ECB QE policy, the rise and programmes of the far right in Europe, the EU’s trade and neighbourhood policies etc.. We also hint to an interesting older paper (2016) by a collective of authors from the Committee for the Abolition of Illegitimate Debt (CADTM) on how to tackle the banks and the financial sector (see here). It pledges for ‘radical changes’ and a ‘socialisation of the financial sector’ – which is not so prominent in the current programmatic or propaganda of major parties of the ‘radical left’ in Europe any more …
Lexit’s Digest No. 5, 30 January 2017
European Union: Election year 2017
In 2017, there will be important national elections in the Netherlands, France, Germany (and maybe Italy). Insecurity about possible outcomes prevails. The right wing populists recently assembled their forces in Koblenz (Germany) and clung to some kind of ‘domino theory’ – after Victor Orban in Hungary, the PiS in Poland, Donald Trump in the US, new victories are looming for their lot in the Netherlands, France, Germany, Austria, Italy etc.
The Dutch will already vote in a general election on 15 March 2017, and a majority of voters seems to be ‘undecided‘ – an indication of maybe ‘surprising results’ that might come in any direction. The liberal VVD of incumbent Prime Minister Mark Rutte is adapting to the issues and language of Geert Wilder’s right-wing populist ‘Freedom Party’ (PVV) to survive. Labour, Green Left and the Socialist Party each are oscillating in the polls around 10 – 15 per cent. Whatever the outcome – against the background of an increasing fragmentation of the political spectrum with a lot of ‘new parties’ in the Netherlands: Creating ‘stable government’ might be a thorny task – whether on the right or the ‘centre left’.
There is possibly also much surprise waiting in the wings concerning the French elections in 2017 (presidential elections scheduled for 23 April/ 7 May; legislative elections for 11 and 18 June respectively). Already, with about 3.5 million voters participating in the primaries of the Right (former UMP, now re-baptized as Republicans), Francois Fillon unexpectedly beat his competitors such as Alain Juppé and Nicolas Sarkozy. With a much lesser turnout in the primaries of the Socialist Party (PS) and its smaller satellites (1.6. to 1.9 million), left-leaning Benoit Hammon stayed on top against Prime Minister Manuel Valls in the second round (see here). In the polls before the ‘socialist’ primary it looked that Hammon had no chance at all for winning that contest.
A recent French poll predicted that none of the major candidates in the PS primaries could expect to surmount 10 per cent of the vote in the first round of the presidential election. FN’s Marine Le Pen is leading in the polls with a constant 25 % share, Fillon now down to around the same, centrist candidate Emmanuel Macron around 20 %, and radical left candidate Jean-Luc Mélenchon between 13 – 15 %.
Roger Martelli (a veteran intellectutal of the French Communist Party, who quit the PCF years ago) envisages the end of Mitterand’s PS – with Valls supporters being attracted to the liberal agenda of Macron, and the remaining minority of a leftist electorate of the PS being attracted towards Mélenchon (see here, in French). The future might hold many more surprises and possible re-compositions of forces, however. For the legislative elections, the project of the Front de Gauche seems to be exhausted. There is an open conflict on a joint approach of the ‘Left of the Left’ on this in France between the current PCF-leadership around Pierre Laurent and Mélenchon’s movement ‘La France insoumise’ (see here, in French).
In a well orchestrated surprise move, Germany’s Social Democrats (SPD) nominated Martin Schulz, the former President of the European Parliament (EP), as their candidate for challenging Angela Merkel as chancellor of the republic in the Speptember 2017 general election (see here and here). Schulz is posing as the candidate representing the interests of both the ‘hard working’ middle strata and the ‘forgotten lower classes’, promising more social justice: ‘Saint Martin’ confronting the establishment and the right wing populists alike.
During his time as EP-President he was in favour of the European Semester and stronger EU surveillance on economic and fiscal policies (though always appealing for a ‘better balance’ between fiscal retrenchment and growth). Schulz campaigned against OXI in the Greek referendum, criticised Tsipras even more sharply from the right than Schäuble did afterwards, brokered a deal that the majority of the European Parliament supported TTIP (with a few reservations), supported the Juncker Commission etc. – all in all he was a reliable gatekeeper for continuous ‘grand coalition’ policies. ‘Good prospects’ for R2G (a red-red-green coalition) in Germany? It is doubtful in merely numerical terms whether SPD, Greens and LINKE can obtain a parliamentary majority (it was there in the past, although, and what happened?). But on programmatic terms, what is the R2G project?
EU austerity etc.
Commenting on possible EU initiatives on the 60th anniversary of the Treaty of Rome, on the election year 2017 and EU rules on deficits, EU Commissioner for Economic and Financial Affairs Pierre Moscovici concluded: “If the divisions continue to grow, the idea of dismantling the eurozone may become a more popular one, or even a reality. The euro is a brilliant, historic experiment, but it will always be fragile if it is not able to create convergence.” Indeed – so far the euro created ever greater divergence of its members’ economies, and austerity policies never led to the hoped for convergence. For the rest of the interesting interview, see here.
Moscovici calls for more progress on deficit reduction. For the time being, France, Italy, Spain and Portugal have been left off the hook, but with indications that the EU will come back to some of these later on (see here).
In the case of Spain, the Commission presses for an additional effort to cut its budget deficit (see here) amongst rising fears that internal strife within the Spanish Socialists over the leadership of the party might end the de-facto coalition of the PSOE with Mariano Rajoys conservatives.
On Greece, EU authorities hope to finalise the second review on the 3rd Memorandum to unlock the next tranche of credit by the end of February. However, ‘Whispers of Grexit start again’, so claims the politico website. If the IMF should not stay on board in ‘overseeing’ the programme for Greece, things might get rather complicated for the EU authorities (see also here and here).
ECB – quantitative easing policies
Against the background of rising (oli-price driven) inflation, first demands to end the ECB’s ‘ultra-easy monetary policy’ are coming up (see here). Which business sectors benefited most from the ECB’s corporate bond purchasing scheme in that context? Read a concise analysis from the Corporate Europe Observatory (CEO) here.
Trump’s fast-track executive actions, the future of NATO
On 21 January 2017 about 3 million people in the US protested against Trump’s inauguration. The now official US-President then quickly moved on with executive actions to demonstrate that he will deliver fast on his campaign promises (see here for an overview, and here for his immigration order concerning ‘Muslim’ countries). Remarkably, Trump planted his chief campaign strategist Steve Bannon (the former head of Breitbart news, a far-right, white supremacist media outlet) in the National Security Council’s principals committee (see here). This raised concerns from the out-going Obama administration. In that regard, counterpunch’s Paul Street takes a critical look at Obama’s legacy, also concerning the ‘deep state’ of the security apparatus and coorporate interests (see here).
Throughout his campaign Trump called NATO ‘obsolete’. After recent talks with German chancellor Angela Merkel both jointly underlined the ‘fundamental importance’ of NATO for peace and stability worldwide and for transatlantic relations. We shall see what finally will be the geopolitical game of the Trump administration. Harry Blain from the London School of Economics however warns that ‘NATO is becoming a threat to Europe’.
Finally, Joseph Stiglitz recently commented on ‘Trumpian Uncertainty’, warning of a trade war with China.
Brexit: Court rulings, Trade deals, ‘Red lines’ for Labour?
As expected, the UK Supreme Court ruled that Theresa May’s government must have a vote in both houses of parliament (the commons and the lords) to formally launch Brexit (see here and here). May’s speeches and comments have been interpreted that her government will go for a ‘hard Brexit’, looking for a special trade deal with the EU (see here) and hoping for a quick trade deal with the US – along her ‘Global Britain’ approach.
In order to keep her timetable to launch the Article 50 procedure for leaving the EU by the end of march, the UK government published a white paper and a short draft bill on that (see here). Jeremy Corbyn said that Labour would not block triggering Article 50, which has lead to renewed resignations from his ‘shadow cabinet’ and discussions in his party (see here).
So the big question is, what is Corbyn’s and Labours’ line for an alternative Brexit deal from the Left? On this an opinion piece by Richard Seymour (in the end, interestingly focusing on ‘access to the EU-Single Market’).
Seymor seems to hold the European Court of Justice (ECJ) in high esteem as regards judgements on the European Convention on Human Rights etc. But what about the ECJ-judgements on Single Market rules (mostly neo-liberal from the start) and in particular on the cases Laval, Viking Line, Luxemburg, Lower Saxony etc. curbing trade unions rights to take industrial action, prohibiting any demands from national or regional member states’ authorities that companies employing posted workers can be obliged to respect the usual rules on pay and working conditions enshrined in law or collective bargaining agreements in the EU country where they operate? The ECJ simply ruled that posted workers are only entitled to be paid the minimum wage of their EU member state of origin, anything going further (even minimum-wage-indexation to inflation e.g in Luxemburg also for this group) was prohibited.
So – these rulings (and other effects of the EU’s de-regulation policies) had no effect on the UK labour market? And if a country chooses to open its labour market based on free movement with equal rights and equal treatment – what about its task to expand its social infrastructure to meet and guarantee these needs (e.g. on healthcare etc.) for the incoming working people? In Corbyn’s 10 point programme, there are some indications in that direction. Turning the current hard-right Brexit into a left-wing exit (Lexit) would demand much more programmatic and strategic effort (and its ‘popularisation’) than currently available. Could be an interesting topic for further debates.
‘The future of Europe debate’: soul-searching on the European Left
The debate on how to tackle the obvious crisis of the EU-project has intensified on the European so called ‘radical left’ (in party terms: those forces organized independently from Social Democrats and Greens). So, the more the merrier, there are discourses about the ‘Plan A, B, C’ etc. and their possible interconnections (often in a ‘stagist’ approach).
Here are some links to more recent contributions:
Yanis Varoufakis proposes a ‘New Deal to save Europe’, which his DIEM25 ‘movement’ wants to unveil at the European Summit in Rome in March 2017, celebrating the 60th anniversary of the Treaty of Rome. He underlines: ” Unlike Franklin Delano Roosevelt’s original New Deal in the 1930s, a European New Deal must be realized without the tools of a functioning federation, relying instead on the EU’s existing institutions. Otherwise, Europe’s disintegration will accelerate, leaving nothing in its wake to federate.” Maybe DIEM25 will be mobilising hundreds of thousands of activists from Romania to Portugal to stress this message – we will see. ‘Relying on the EU’s existing institutions’ to that end? Good luck. There was Obama’s pledge at the start of his Presidency for a ‘Green New Deal’ – and he had all the tools of a ‘functioning federation’ at his service. It’s upon readers to judge on the outcome of such rhetoric. So finally, it’s about the ‘movement’ or the underlying relationship of forces that might enforce such a ‘compromise’ – or not.
Conn Halinan (likewise of DIEM25) and citing Varoufakis for a ‘third way’ on ending the impasse (right-wing policy of austerity versus ‘Lexit-wise return to the nation-state’, thus supposedly helping the right-wing populists ): “A pan-European movement of civil and governmental disobedience” to create a “democratic opposition to the way European elites do business at the local, national and EU levels.” On that, he reminds of ‘Rebel Cities’ (such as Barcelona, Naples etc., as he sees it) and ‘continental solidarity’.
Not bad, but this approach had always been practised by the ‘European radical left’ in the past decades and also up to now – regardless of their respective views on EU-integration as ‘good’ or ‘bad’ (e.g., the Nordics were always tilted ‘against’ in order to protect the ‘Scandinavian Welfare State Model’, some Communist Parties for other reasons). The parties and other components of the Left in the European Parliament (the GUE/NGL group) contributed strongly to the fight against EU austerity policies, ‘free trade agreements’, ‘fortress Europe’, EU militarization etc. And this both inside Parliament and in building opposition to and mobilisations on these issues outside on the streets (e.g. ETUC demonstrations in Brussels and elsewhere, Euromarches of the Unemployed, TTIP etc.) at national, EU and also at global levels. So why the polemics against those currents on the European Left who do not share the perspective of ‘relying on the EU’s existing institutions’ for ‘progressive change’? When it comes to ‘joint action’ against the ‘enemy’ (civil disobedience, democratic opposition in DIEM25 language), they mostly engage in mobilising forces according to a broad ‘united front’ approach.
A longer essay by Catherine Samaray published on the EReNSEP website claims that ‘No Lexit is possible without an ‘Another Europe’ Strategy – see here. Also interesting in that respect is the recent political document of the Party of the European Left (adopted at its 5th Congress in Berlin on 16 December 2016), which calls for a European Union respecting ‘popular sovereignty’ and broadly promoting a strategy of ‘disobedience’ against EU-Treaties and anti-social Single Market regulations.
Starting from the more moderate vision of a ‘Social and Democratic Europe’, Daniel Seikel (researcher at the German Institute on Economic and Social Affairs, WSI, linked to the German trade unions) reflects on critical contributions mainly from German Lexit supporters (such as Wolfgang Streeck, Fritz Scharpf, Martin Höpner, Andreas Nölke and others). He discusses possible options along that Social democratic approach. He concludes: “It should be noted that none of the proposals made here will be easy to implement, because first the obstacles described (… ) would have to be overcome. Besides, it is doubtful whether there currently exist political majorities in Europe that would implement such reforms.”
See also the contribution of Sébastien Villemot on ‘Does France have a future in the euro-area`, crisply and shortly providing his arguments.
Whatever one thinks of these different contributions – a rational and comradely debate on the ‘future of Europe’ on the left might be useful for all sides, to state the least.
Lexit’s Digest No. 4, 13 January 2017
‘Trumponomics’, the EU and the future of US geopolitics
With only a few days into the inauguration of Donald Trump as US-President, it might be useful to remind of his nominations for important posts in his government. Check the crisp overviews by Ralph Nader (here) and Vijay Prashad (here).
Will Trump’s announced big infrastructure programmes and his opposition to the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) mean a break with neo-liberalism? Leo Panitch (co-editor of the magazine Socialist Register) reflected on this in an interesting interview (see here).
Seventeen former leaders from Eastern European EU member states recently launched an open letter to warn Trump of any weakening of western sanctions against Russia (see here). To quite a number of observers it seems that the incoming Trump administration will play ‘Nixon in reverse‘: in 1973, Nixon and Kissinger promoted detente with China in order to weaken the Soviet Union. Currently Trump seems to favour a hard line on China and seeking detente with Putin’s Russia. Patrick Bond analyses the possible changes of US geopolitics with a view to what this could mean for the BRICS (see here) and Pepe Escobar envisages a ‘New Great Game in Eurasia’ (see here).
Germany’s chancellor Angela Merkel meanwhile tries to circle the wagons of the EU-27, remarking with regard to US – EU transatlantic relations that ‘there is no eternal guarantee for a close cooperation with us Europeans’.
‘Populism’ and ‘Europe disintegrating’ – Forthcoming EU-referendum in Iceland
In a thought-provoking piece, Alex Callinicos (Professor of European Studies at King’s College, London) takes on the mainstream debate on ‘populism’, examining the constitutional referendum in Italy, the Brexit-referendum and Trump’s election victory in comparative perspective, and also questioning the claim that a renewed ‘facism is on the march‘ (see here). From a social-liberal point of view, Timothy Garton Ash (Professor of European Studies at St. Antony’s College, Oxford) reflects on the recent history of the European Union and seems to be in difficulty on how to conceptualise the ‘new era’ after 2009 (Is Europe disintegrating?) – an interesting read nevertheless.
The rise of Donald Trump has often been compared to that of business-tycoon-cum-Prime-Minister Silvio Berlusconi in Italy. Cinzia Arruzza (assistant professor of philosophy at the New School, New York) provides some lessons from the failed strategies of the anti-Berlusconism of the past for leftist resistance to Trump and similar forces today (see here).
Looking at the aftermath of Matteo Renzi’s constitutional referendum defeat in Italy and the forthcoming reform of Italian electoral law under the new Prime Minister Paolo Gentiloni (PD), Roberto D’ Alimonte (of the mainstream ‘politico’ website) quite cynically concludes that ‘many in Italy — and Europe — may find themselves praying that former Prime Minister Silvio Berlusconi’s Forza Italia does well enough in the polls to steal support from his right-wing rivals and join the Democratic Party in government’ – see here.
The next referendum on EU issues might just be around the corner: the new centre-right coalition in Iceland agreed to have a vote in parliament on whether to hold a referendum on joining the European Union (see here). If that should materialize, a new round of hue and cry about ‘populism’ is sure to follow …
Brexit, Nothern Ireland, Jeremy Corbyn’s troubles
With the resignation of Northern Ireland’s deputy leader, Martin McGuiness (Sinn Féin), new elections to that regional parliament are becoming likely (see here). Controversies about Brexit seem to be the underlying reason for this. An informative analysis from the (mainstream) Brussels based Bruegel think-tank on what is at stake for Northern Ireland with Brexit can be found here.
Sinn Féin is advocating a ‘Special Designated Status within the EU’ for Northern Ireland in the short run, and re-unification with the Irish Republic in the long run (see here and here). However, the Democratic Unionist Party (DUP) as their coalition partner in Northern Ireland strongly campaigned for Brexit and support Theresa May’s government. Sinn Féin’s is an interesting gamble: Promoting a United Ireland by (critically) supporting the EU … The SNP-led government of Scotland takes a similar approach towards a ‘flexible Brexit’, allowing Scotland to stay within the EU Single Market with some kind of special status (see here). It remains to be seen whether all this might finally trigger stronger dynamics towards an unravelling of the UK state …
Meanwhile German minister of finance Wolfgang Schäuble seems to prepare for post-Brexit-EU-budget rules. If Angela Merkel’s CDU will still be the leading force in a German government in 2019, tighter rules on access to EU-Structural Funds shall be implemented (see here). Already after the latest reform of the Structural Funds some years ago, payments from the EU-budget may be conditioned on compliance with the ‘structural reform agenda’ enshrined in the EU 2020-Strategy. Schäuble thinks about making these even more conditional.
Finally, what are the prospects for Jeremy Corbyn’s Labour to eventually turn Brexit into a left exit from the European Union? Richard Seymour critically examines Corbyn’s recent ‘populist turn’ here.
Critics of the Lexit approach
Adam Tooze reviewed Wolfgang Streeck’s ‘How will Capitalism end’ in the latest issue of the London Review of Books, thereby criticizing the Lexit-approach – an interesting read nevertheless, see here.
Also interesting in this respect: an interview with Petros Stavrou (a former economic advisor of the parliamentary group of SYRIZA in Greece), on LeftEast, see here.
Lexit’s Digest No. 3, 8 December 2016
Italy after the referendum: “Il Rottamatore” Renzi – finito
The reform of the Italian Constitution put to a referendum on 4 December 2016 by (now ex-) Prime Minister Matteo Renzi was rejected by an overwhelming 59 % of voters. Finally, Renzi who liked to pose as the strong ‘Rottamatore’ (the demolition man) – sending the old political class back home and overcoming an ‘inefficient’ Italian economic and political system by radical structural reforms and modernization – was scrapped himself by this NO-vote.
The explanatory statement to justify the bill on the reform of the Italian Constitution pointed out – amongst other things – the need to enable the Italian political system to be more responsive to EU-procedures by becoming faster in decision-making:
“The shift of the center of gravity on decision-making related to the strong acceleration of the European integration process and, in particular, the need to adapt the internal organization of the recent evolution of EU Economic Governance (from which descended, among other things, the introduction of the European Semester and the reform of the Stability and Growth Pact) and its stringent budget rules (such as new rules on debt and expenditure); the challenges arising from the internationalization of economies and the changing context of global competition.”
Media attention mainly focused on the reform of the Senate (the second chamber of the Italian Parliament – for a rough sketch see here). However, the reform also would have included the repeal of earlier reforms to devolve powers to regions (e.g. abolishing the provinces). More importantly, the combined effects of constitutional reform and the reform of electoral law (the Italicum) adopted by the first chamber (the Camera) in May 2015 were seen by many as a threat to democracy.
The Italicum stipulates that if a party obtains 40 % of the votes, it would get bonus mandates so that such a party is attributed at least 54 % (340 of 617) of the seats in the Camera. If no party is able to meet the 40 % threshold, a second round shall take place at which voters have to choose between the two strongest parties. The winner will get 340 seats, the rest will be distributed proportionally between the other parties according to their results, see here.
In Italy, the three major parties – Renzi’s PD, Grillos 5-Star-Movement (M5S) and the Rightists of Salvini/Berlusconi Lega Nord/Forza Italia combined – are standing in the polls between 25 to 30 per cent. It is very unlikely that any of those would get 40 % at a next election. So the party coming on top in a second round would get a comfortable absolute majority with gaining e.g only 27 % of the proportional vote. And with that it could e.g. nominate the top of the judiciary (judges of the Constitutional Court, judges of the Highest Court – Consiglio Superiore della Magistratura etc.), the President of the Republic etc. as it would see fit. From ‘Europeanists’ and EU leaders there was not a single word of criticism what these combined effects of Renzi’s reforms would have meant for democracy. They prefer to deplore the rise of ‘populism’ instead, and Juncker called the Italians that voted ‘NO’ irresponsible.
The editor of the renowned left-leaning Italian magazine MicroMega, Paolo Flores d’Arcais, rightly argued that this combination of ‘reforms’ would provide for powers which the whole of the liberal-democratic tradition always considered to be proto-totalitarian, see here (Italian) or here (Spanish).
An interesting assessment of the referendum campaign (and in particular that of leftist forces) written before the vote can be found here. Reflections by David Broder (from the editorial board of the review Historical Materialism) on the outcome are available here.
Post-referendum Italy: financial problems at home and EU Economic Governance
Silvia Merler of the Brussels based (mainstream) Bruegel think-tank looked at the ‘Financial implications of the Italian referendum’, providing recent data on the troubled Italian banking sector. Economist Emiliano Brancaccio argues that Italian banks are indeed in a critical state, but not because of the referendum, and that the situation can be tackled if adequate measures are taken, see here (Italian) or here (French).
After the referendum and with Renzi gone, the Eurogroup is set to take a tougher line on Italy as regards the EU deficit procedure: “We note that according to the latest Commission assessment, Italy’s structural fiscal effort in 2017 will be -0.5% of GDP, whereas +0.6% of GDP is required under the preventive arm. On that basis, significant additional measures would be needed. (…)We recall the commitment to use windfall revenues or unforeseen expenditure savings in 2017 and step up privatisation efforts to bring the debt ratio on a declining path. We take note that in light of prima facie non-compliance with the debt reduction benchmark, the Commission will issue a new report under article 126(3) TFEU.”
Just in case that an Italian interim government may not deliver cuts and as a threat towards possible early elections the EU will come back to this in spring 2017, with the Eurogroup wanting to tighten the screws. The Eurogroup statement of 5 December 2016 on the Draft Budgetary Plans for 2017 can be downloaded here. Also interestingly, the Eurogroup does not share the ‘flexible approach’ on the EU fiscal rules that Commission President Jean Claude Juncker propagates, see here.
Wake up call to fellow Europeans – “May 9 Movement”
Several prominent personalities from EU politics (Daniel Cohn-Bendit, Guy Verhofstadt, Elmar Brok, Alain Lamassoure etc.), from business, arts and education and also trade unionists such as ETUC General Secretary Luca Visentini have launched an appeal to counter ‘anti-European populism’, see here. After Brexit, Trump and the Italian referendum, they fear “the collapse of the EU and the marginalisation of our values and interests” and point out: “We will not have then the power to be heard and to guaranty our safety from the increasing threats coming from all of our borders. Our economic interest and our market position – as first global export power –will become harder to defend while protectionism temptation rises everywhere.” They demand: “the time has come to adopt a genuine European foreign and defence policy.”
It’s notable that centre-left ‘progressives’ are so openly calling for strengthening the EU as a potential global ‘superpower’, including its military and geo-political aspects.
They should not worry: With its Bratislava-road map (and preparations long before), the EU is already on track. The Commission proposed an EU Defence Action Plan (including that military spending should not be taken into account when calculating budget deficits), and the European Parliament approved the first pilot projects on that line with the adoption of the EU budget 2017, see here. There is more on the wish list: A European Defence Union and some practical steps in preparation, see here.
It’s only the usual suspects – well-behaved NGO’s perhaps are now also ‘populists’ – who are campaigning against this supposedly ‘benign’ EU-imperialism, see here.
Iceland after the elections 2016
Iceland has been viewed by quite a number on the left and heterodox economists as an example of how to better tackle the 2007 – 2009 financial crisis, in particular by not taking over the debts of the financial sector. Árni Daníel Júlíusson reflects on popular movements in Iceland since then and the outcome of the recent elections on 29 October 2016 and further prospects, see here. For an older but highly informative analysis of Iceland’s centre-left government (Social Democrats and Left Green Movement, 2009 – 2013) after the financial crisis, see here.
Lexit’s Digest No. 2, 14 November 2016
US Presidential Election 2016
Both surprisingly and shockingly for leftist and mainstream commentators alike, Donald Trump won and there is an absolute majority for Republicans in both the US Congress and Senate. Australian commentator Tad Tietze of the blog ‘Left Flank’ was among the very few who saw this coming already in January 2016 – see his analysis here, the links he drew between the result of the Brexit-vote and the right wing version of anti-politics in June 2016 here, and his comment on the final outcome in the US here. Still interesting stuff, as the mainstream media just are starting the debate why their predictions of a Clinton victory and earlier assessments of the ‘Trump phenomenon’ were so utterly flawed.
It seems however that Hilary Clinton won the ‘popular vote’ in the US (61 million to Trump’s 60.4 million votes) – just like Al Gore did in 2000 against George Bush. On this and the flaws of the US electoral system, Daniel Lazare (author of The Velvet Coup: The Constitution, the Supreme Court, and the Decline of American Democracy), commented on jacobin.mag – see here.
EU Economic Governance, the European Semester and austerity
France, Italy, Spain and Portugal have been on the radar of the European Comission on deficit targets and compliance with EU fiscal rules (Stability and Growth Pact, Fiscal Compact etc.) for some time. For different reasons (no open confrontation with the EU ‘heavyweight’ France – support Hollande against the challenge of a rising ‘Front National’; wait for a stable government in Spain under Mariano Rajoy, which the PSOE finally enabled in late October 2016 by abstention etc.; don’t fuel up the EU’s problems after the Brexit-vote and so on) the Commission chose to take a ‘flexible stance’. Earlier on, it granted France, Italy and Spain more time for reaching the deficit targets. Lastly, the Commission refrained from imposing fines on Portugal and Spain (as ‘automatic sanctions’ in force under the six pack and two pack would have to be applied).
It is highly likely that the Commission will do nothing as concerns France and Italy, and also look for a ‘flexible compromise’ as regards Spain – all this in order not to further destabilise an already delicate situation (Presidential and Parliamentary elections in France in 2017, Referendum on constitutional reform in Italy on 4 December 2016 which might dump Renzi, and providing more time for Rajoy, PSOE and Ciudadanos to consolidate their de-facto bloc in Spain).
But what about Portugal? The Socialist minority government still thinks it can avoid further austerity and comply with the EU fiscal rules in the near future. The Left Bloc and the Portuguese Communist Party (PCP) – both tolerate that minority government – are sceptical, but supported the 2017 Portuguese draft budget. See their respective views on this here (Bloco) and here (PCP).
Will the EU continue to apply ‘fiscal flexibility’ as regards Portugal, the only EU country so far that revoked earlier austerity measures? As regards SYRIZA-led Greece (formerly hailed by the European Left as ‘the spark to end austerity in Europe’), Tsipras’ recent cabinet reshuffle (after his party’s free falling in election polls to 15 per cent) is a clear signal of further appeasement to the troika.
Silvia Merler of the Brussels based (mainstream) think-tank Bruegel-Institute assessed the legal and political implications of the UK High Court ruling that triggering Brexit via the EU Article 50 procedure should involve the UK Parliament (‘Brexit and the law’), see here, quite informative. However, the Labour Party already announced to vote in favour of launching the Article 50 procedure. Labour leader Jeremy Corbyn first demanded certain conditions for a positive vote of Labour – amongst them ‘guaranteeing UK access to the EU Single Market’, but then Labour clarified they would support launching the procedure also if these conditions should not be taken on board by the current government. Access to the Single Market entails compliance with numerous EU liberalisation directives – not so easy if Labour wants to re-nationalise the railways, water companies and so on. On the other side of the Channel, EU ministers press for an interim deal on Brexit.
Here is an interview with Leonardo Mazzei on the constitutional referendum in Italy and the overall political situation there. Mazzei is one of the spokespersons of Programma101, an incipient political organisation which has developed from the “Leftist Co-ordination against the Euro”. Furthermore, here are some reflections by Christophe Ventura on some strategic issues for the left after Brexit.
Lexit’s Digest No. 1, 28 October 2016
Post UK-Referendum Brexit Debate
Early in October 2016, UK Prime Minister Theresa May announced that her government will most probably trigger the negotiations in March 2017 on the UK leaving the EU. What Brexit could mean for the EU, the UK and the global political landscape has been addressed by some essays of left intellectuals earlier on. Here we point only to two examples.
The editor of New Left Review, Susan Watkins, provided a remarkable and nuanced analysis on the referendum (NLR 100 July/August 2016) which can be read or downloaded as a pdf-file for free here. Alex Callinicos, the editor of International Socialism, reviewed the political landscape in the UK after the referendum and the prospects of the left after the re-election of Jeremy Corbyn as Labour Party leader in IS 152 here.
Mainstream ‘Europeanist’ think-tanks are discussing possible alternatives to reduce the ‘economic damage’ of the Brexit-vote for capital – both concerning the UK and the EU-27 (Single Market) relationship. The information provided by them about the ‘options’, ‘difficulties’ and ‘technicalities’ of Brexit might be useful for those interested in a deeper understanding on what is involved with the coming negotiations and the search of EU-elites to contain ‘contagion’ from that.
André Sapir from the Brussels based (mainstream) think-tank Bruegel (‘Beyond hard, soft or no Brexit’) provided an informative overview on the respective (institutional) options here. Sapir co-authored a proposal for a ‘Continental Partnership’ agreement between the UK and the EU 27 (much discussed amongst the ‘expert community’) with – amongst others – Guntram Wolff. How Wolff perceives the speech of UK Prime Minister Theresa May at the Tory Party Conference early October 2016, can be read here (‘Is Europe drifting towards a hard Brexit?‘).
Earlier on, Charles Grant (Director of the Centre for European Reform), pointed out the difficulties concerning trade deals etc. linked to Brexit, which can be read here. His analysis of May’s line at the Tory Conference and the reaction of the EU 27 is available here.
Finally, in an opinion piece of 19 October 2016 on the EU-critical blog ‘The Current Moment‘, Philip Cunliffe and Peter Ramsay argue that current debates on ‘hard’ vs. ‘soft’ Brexit are misleading, obscuring the real choices to be made (see here).
EU democracy and so on
Several recent pieces by different authors might be interesting for the Lexit-debate on this.
Firstly, a polemics by Lee Jones criticising Varoufakis’ DIEM 25 approach as ‘Fantasy Politics’, see here.
Secondly, a longer essay by Catarina Príncipe dissecting the ‘Nature of the European Union’ and it’s potentialities for ‘democratic reform’, see here.
Thirdly, Michael Hudson reviewed James K. Galbraith’s recent book ‘Welcome to the Poisoned Chalice. The Destruction of Greece and the Future of Europe’ (New Haven & London, 2016).
Galbraith is Texas University Professor and arguing in the footsteps of his famous father, the Keynesian economist John Kenneth Galbraith. He worked as advisor to Yanis Varoufakis during the latters’ term as Minister of Finance in Greece. Based on James’ essays on the unfolding of the ‘Greek debacle’, Hudson is pointing out some uncomfortable lessons about ‘EU democracy’ and the link to a policy of ‘economic warfare’ lead by German capital, see here.
Future of the EU, the euro-zone, economics etc.
From 15 – 17 September 2016, the Euromemo-Group held its 22nd Conference on Alternative Economic Policy in Europe in Coimbra, Portugal. The outcome of this is the 2016 Euro-Memorandum, more information on that here. This group considers itself as assembling heterodox approaches to economic and social policies in Europe, and it is obvious that there are different views about strategic issues within that group (‘Europeanists’ vs. ‘EU-sceptics’ is only one strand of it).
However, Cédric Durand (of CEPN Paris XIII – CNRS) provided a remarkable input for the final discussion on policy alternatives from the left at this meeting, see here. Durand and Sébastien Villemot (from OFCE – Sciences Po, a French economic research institute) recently published an interesting Working Paper on how to tackle the redenomination into national currencies in the event of a possible break-up of the European Monetary Union – see here.
Also, and interestingly, many (mainstream) economists are very concerned about Germany’s ever bigger current account surplus putting a threat to the sustainability of EMU – see here.