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. 26, 06 February 2019
As there was no Lexit’s Digest in January 2019 – apologies for that – this one is quite long. In the next two weeks or so there will follow two or three special sections: Focus on Eastern Europe (which is not so much followed up by the Western European Left), also one on recent developments on the ‘radical Left’ in Europe concerning the 2019 European elections, and another one on geopolitics. If you are also interested in these special sections, just have a look at http://lexit-network.org/digest for those latter items later on.
Brexit: Theresa May’s ‘Plan B’ – or a ‘No Deal’ on autopilot?
Alex Callinicos provided a thoughtful analysis of the withdrawal agreement between the EU and the UK government, its possible international repercussions and the forces behind it – before the British Parliament dumped that agreement in mid-January 2019. Callinicos observed: “Maybe fearing that a Trump administration hostile to the EU might encourage Britain to act as a deregulated offshore spoiler, France, Belgium, the Netherlands and Denmark successfully pushed for the transitional arrangements in the withdrawal treaty to include maintaining a “level playing field” between Britain and the EU-27 and allowing the Commission and the European Court of Justice to police state support for industry (a shot across Corbyn’s bows as well). This dimension of inter-imperialist competition will continue to inform negotiations on the crucial final trade agreement between Britain and the EU.” His piece on ‘Brexit Blues’ is for all these reasons still a good read.
Equally, Paul Mason (supporting the ‘Remain’ camp) provided useful insights into Labour’s dilemma with Corbyn’s ‘Brexit ambiguity’ strategy: ‘Brexit or Bremain?‘ However, Guardian columnist Owen Jones argued that ‘Labour can’t be held responsible for the Brexit fiasco’. How the UK’s MPs voted on the Withdrawal Agreement, see here.
Finally, Theresa May survived two no-confidence votes (the first from her own party, the second from Labour). She supported an amendment by Tory MP Graham Brady calling for alternatives to the backstop which was approved by 317 to 301 by the House of Commons. Her ‘Plan B’ is to renegotiate ‘alternatives’ with the EU on preventing a hard border between the Irish Republic and Northern Ireland. Andy Storey fears that Ireland will be left in the cold by the EU on this – read his ‘Ireland: the Hard Border, the EU, and Brexit’. Dawn Foster however argues: ‘Thanks to the dogmatism of Northern Ireland’s Unionists, Sinn Féin gets to have it both ways: shielding its voters from a hard Irish border while boosting the chances of reunification.’ Which is also the preferred option of this author (see Lexit’s Digest No 25) … On Ireland and Northern Ireland, see also a long piece by historians Colin Kidd and Ian McBride on ‘How the Irish Question returned to destabilise the UK’ – a very interesting read.
Currently, the EU is not comforting May’s attempts to renegotiate the Withdrawal Agreement. EU Brexit Commissioner Barnier’s deputy, Sabine Weyand, soberly declared: “There’s a very high risk of a crash out not by design, but by accident. Perhaps by the design of article 50, but not by policymakers.” Which means: if the EU and the governments of the UK and Ireland can not commonly agree on some alternative Brexit deal in due time – 29 March 2019 is the very final deadline – a ‘No Deal’ Brexit might result on autopilot (‘by design of Article 50’) – even if this is the most unintended option which all three sides want to avoid. We shall see …
For the Labour Party, a ‘No Deal’ Brexit might boost their perspectives of winning the next UK election and implementing its programme for a social and ecological transition for the many, not the few. Labour’s talk about preventing a ‘No Deal’ Brexit as their major priority is quite empty, as their officially presented ‘alternatives’ (a comprehensive customs Union with the EU etc.) are even more far fetched and equally unrealistic as May’s ‘Plan B’. If a No Deal scenario should finally emerge, they could put the blame on Theresa May’s conservative government for the Brexit chaos that it generated. Then, in the UK it would be simply like this: the free trade, low tax ‘Anglosphere’/ Global Britain agenda promoted by the Tories and UKIP versus Corbyn’s and McDonnell’s agenda of reviving the UK’s domestic economy along social and ecological lines. Then, the UK electorate would have a strategic choice between clearly demarcated options how to revamp and reshape the UK’s society, economy and its state.
The EU and British capitalists tirelessly explain that Brexit will lead to economic catastrophe for the EU and the UK, and that first signs of this already can be observed. Australian economist Bill Mitchell disagrees. Firstly, ‘rising Brexit anxiety’ is mere propaganda – the UK economy fared better than the rest of the EU up to December 2018 (the month to which there are reliable data available). Secondly, citing some study: “Export growth, we may safely conclude, has not been one of the benefits of the Single Market for the UK. Countries exporting under WTO rules, like the US, do not appear to be at any great disadvantage.” And one could add China or even Australia to that league of countries increasing exports to the EU under WTO-rules. For his sober analysis, see here.
Finally, some recommendations for further reading on the Brexit-debate of more or less progressive forces:
- Larry Elliot (the Guardians economic editor) why ‘Only a rupture with the EU will alter the failed status quo’;
- Grace Blakely (The New Statesman) on ‘ Why the Left should champion Brexit’;
- Andrea Pisauro and Roesemary Bechler on their open letter to ‘Another Europe is possible’: A People’s Vote without a People’s Debate won’t bring about Another Europe;
- Asif Mohammed (on Open Democracy) on ‘We need a peoples government, not a peoples vote‘;
- Paul Rogers (perhaps wishful thinking) about Labour’s plans on combating climate change;
- Alex Gourevitch on why the UK should leave the EU already.
Political developments at the EU’s core …
In France, the protests of the yellow vests continue. Alan Kirman (of the London School of Economics) points at Macron’s discredited economic vision as the root of the yellow vests uprising. Cole Stangler provides an update of recent events since December 2018, growing repression and Macron’s call for a great national debate: ‘Back on the offensive’. Dimitris Konstantakopoulos informs about the first national assembly of the yellow vests, its appeal for further mobilisation and a general strike on 5 February 2019.
According to Konstantakopoulos, with the yellow vests ‘revolution returns to Europe’ – an interesting read. Vladimir Unkovski-Korica (LeftEast) points at similar mass protests across Europe and envisages a European ‘people’s spring’. Perhaps wishful thinking: apart from declarations of solidarity (on paper) and perhaps some visits of delegations of protesters to each other there is not that very much happening. The protest movements still act at national levels, not interlinking so much as a ‘European force’. Just as the 1848 revolutions (and what happens currently is definitely below that level) claimed a common ‘idea’ of a ‘people’s spring’ in Europe against the forces of the ‘Holy Alliance’, but failed to interconnect in pursuing such a common strategy.
Earlier on, Jacobin spoke to Olivier Besancenot on his assessment of the movements dynamics and the future of Macron’s Presidency. On the latter, Besancenot commented: “One section of the elite believes Macron has been weakened and may no longer represent a good option for them. After all, as long as Macronism works, it works, but when it fails, it threatens to create a vacuum of power.” Nicolas Vinocur (of the mainstream Politico website) is of the opposite opinion: “The yellow jackets movement is a gift to Macron“. His main argument: If the yellow vests should create a list for the 2019 European Elections, according to recent polls Macron’s EnMarche would be unaffected by this. But the opposition of the hard right (Le Pen’s RN) and the left (Mélenchon’s LFI) would be weakened. Maybe this is a too narrow ‘electoralist’ perspective, against the background of the quite successful joint protests and strikes of French trade unions and the yellow vests on 5 February 2019. The spirit of social upheaval is still alive and kicking in France. We shall see whether new momentum for the convergence of struggles of trade unions, yellow vests, students and youth etc. will follow from this. But also, whether Macronism can withstand this – by combining even harsher repression, granting some further concessions, and regaining some ground with his initiatives on national dialogue.
As the German economy is further slowing down, the German government – surprise, surprise – has a €25 billion budget problem. Economist Ashoka Mody predicts: “An inevitably slower Chinese economy and gradual obsolescence of Germany’s old industrial structure will weigh heavily on German growth, which will depress Europe’s already low long-term growth potential.” Germany’s ‘grand coalition’ governments (CDU/CSU & SPD) avoided harsh austerity policies during the last decade – but what will happen if the current slowdown evolves towards a fully fledged recession?
As Mody rightly points out, public support for Germany’s mainstream parties is eroding. On this and Angela Merkel’s foreseeable demise, Ingar Solty (of the Rosa-Luxemburg Foundation) spelled out his analysis to Jacobin: “The death of the German dream“. In another interview, Solty tries to explain the difficulties of the German left to develop a strategy for taking power – also an interesting read. Óscar García Agustín and Martin Bak Jørgensen provide a very informative overview on the turn of Denmarks Social Democrats towards a tough anti-immigration stance: “Danes First, Welfare Last“. A further example of the EU’s core shifting to the right …
… and at its southern periphery
Greece‘s Prime Minister Alexis Tsipras survived a vote of no-confidence on 16 January 2019 with the help of the centrist To Potami party. As the name dispute over Macedonia now is settled also by the Greek Parliament, the newly baptized ‘North Macedonia’ is on track for joining Nato and to pursue accession talks with EU. The EU and Nato must be very happy about Tsipras unconditional support for their expansionary geo-strategy in the Western Balkans – which has been fiercely opposed e.g. by the Macedonian Left Party (Levica) and other leftist forces in the Balkans.
Hilary Wainwright, Leo Panitch, Jodi Dean and others are very concerned (and rightly so) about the rise and the political orientation of the Greek conservatives (ND): “The right’s looming challenge to democracy in Greece“. The authors however call on SYRIZA “to re-invent itself and avoid complete integration into the existing state apparatus as a typical social democratic party” – Lord have mercy … Perhaps they should take a closer look at the actually existing repressive policies of Tsipras’ government against activists and politicians opposing home foreclosures, auction sales and the like – which may not even be called ‘social-democratic’ by these above authors own standards. There is an international appeal for solidarity against that repression. Meanwhile, trouble with the ECB is going on for Greek banks …
In Spain, the minority PSOE government of Pedro Sánchez is insecure whether it can get the 2019 budget adopted – due to the Catalan independence parties (ERC, PDeCAT) needed for a majority still opposing it. On 17 January 2019, the PSOE’s 36-years rule over its traditional stronghold Andalusia ended with the installation of a right-wing government of the PP and Ciudadanos, tolerated by the far-right Vox. If Sanchez’ draft budget fails to win a majority in parliament, maybe a ‘Super Sunday’ will be scheduled for May 2019 to cast a snap general election together with the already scheduled regional, local and European elections.
The Andalusia nightmare might return. According to recent polls the Spanish right might win such a snap general election. Also Unidos Podemos and its regional ‘confluencias’ (alliances) are in big trouble. As the regional Unidos Podemos alliance in Andalusia (Adelante Andalusia) suffered heavy losses, internal tensions within the whole spectrum of that ‘left of the left’ increased also in other regions. The most visible split recently occurred in the region of Madrid, where Podemos co-founder Iñigo Errejón quit to run his own list. Whether Podemos leader Pablo Iglesias and IU leader Alberto Gárzon can circle the wagons and keep the stagnating Unidos Podemos project on track, remains to be seen …
The Euro at twenty – views from heterodox economists
The EU elite’s plans for a ‘grand solution’ on reforming the euro-zone have come to a standstill, as both the French and the German government are at odds over this issue and paralysed by domestic problems. As the Euro has gone 20, it seems reasonable to just provide a reading list of recent critical articles for further thinking:
- As a progressive Italian economist, Antonio Lettieri argues for the cancellation of the EU’ s Fiscal Compact, and to “go back to the Treaty of Maastricht, which in 1992 set the founding principles of the euro-zone.” He believes that “Recognizing the failure of current policy will become the lever to establish a new balance based on the use of the single currency as an instrument that the Member States collectively employ to create a more advanced economic and social balance in a framework of reconciled popular consensus.” Whatever that should mean in practice …
- Thomas Fazi seems to be more sceptical about such a perspective: “As the Italian case shows, not only is the ECB unable to protect countries from rising interest rates, but more often than not the European institutions actively (and, one must presume, deliberately) contribute to exacerbating market tensions, as the harsh pronouncements by Jean-Claude Juncker, Pierre Moscovici and others did in the recent standoff.” See his ‘Lessons from the Italian budget crisis’.
- Norbert Häring convincingly argues that the euro-zone could fall apart because of the EU’s single minded craze on ‘improving competitiveness’.
- Marshall Auerback makes the same case as Häring, and concludes: “The urgency reflected in Mario Draghi’s “whatever it takes” speech would have been more admirable if it had focused not on saving the euro at all costs, but rather on establishing a full employment economy that benefits all European citizens, not just its financiers and oligarchs. There is no point in preserving a currency union if it comes at a cost of sabotaging economic growth and the broad welfare of the EU’s citizens. Likewise the power of the nation state’s fiscal policy should not be restricted, but freely deployed alongside of, or if necessary, substituting “the market,” to ensure that equitable prosperity is achieved for the many, not the few.”
- Ashoka Mody again dissects the euro-zone’s founding myths on the 20ieth anniversary of that currency.
- Heiner Flassbeck criticizes the ‘German Europe’ and in particular its conception of central bank independence – a quite emotional contribution …
So much on that, make up your own mind on these post-, neo- or whatever Keynesian arguments.
Remember the Juncker-Plan? The EU’s Court of Auditors recently stated that the Plans’ strategy based on public-private investment partnership was quite ineffective.
As Juncker will quit as President of the European Commission this year, the German magazine Der Spiegel provided a moody and lofty balance sheet of his term (perhaps drink a Cognac or a glass of whine when reading …). Will the European Peoples Party (EPP) lead candidate Manfred Weber (Germany, CSU) make it to becoming the next Commission President? Politico has some doubts about that. Also quite ‘moody’ …
As readers now might be in a more leisurely temper at the end of this Digest (after all the fine Cognac and whine), you may like to read what former Baywatch star Pamela Anderson has to say on Europe and its discontents. You might sober up and be surprised: curvy blonde actresses are not as stupid as the media wish to have them … Cheers to you …
Lexit’s Digest No. 25, 13 December 2018
The Brexit Debacle: Deal or No deal? Or no Brexit at all?
UK Prime Minister Theresa May postponed the Brexit deal vote in the British Parliament scheduled for 11 December 2018, as she could not secure sufficient support from her own party and the DUP to get it adopted. The ultimate deadline for this vote is 21 January 2019. The EU sticks to the Withdrawal Agreement with the UK that had been negotiated by Barnier and May – it’s either that deal or a no-deal Brexit. The European Court of Justice confirmed that the UK could unilaterally stop the Article 50 procedure if it wished so – that option means no Brexit at all. A short summary of the key points of the draft Withdrawal Agreement, links to the text and some legal analysis are available at the left leaning ‘Full Brexit’ Website. Interestingly, supporters of that platform disagree about May’s deal with the EU: Chris Bickerton argues for supporting it, Lee Jones for rejecting it.
Costas Lapavitsas points out: “May’s deal does not deliver the clean exit from the Single Market and the Customs Union that people voted for. It is a clear betrayal of the democratic will of the British people.” As before, he proposes a no-deal scenario as the best possible option towards a left exit from the EU. Addressing and criticizing the pro-EU strategy of the leftist ‘Remainers’, Richard Seymour considers: “There are a lot of people saying that a no deal is the only thing that there’s a majority for in the House of Commons. The problem is, that rests on the idea that Labour MPs will vote loyally. I would be surprised if there wasn’t a significant faction of Labour MPs willing to break ranks on this.” In his typical ‘Brexit ambiguity’, trying to unite the leave and the remain segments of Labour’s electoral base, Jeremy Corbyn wants to prevent a ‘no-deal’ outcome, argues for a new customs union with the EU, urges a new general election and possibly another referendum.
Regarding the issue of preventing a hard border between Northern Ireland and the Irish Republic, Sinn Féins leader Mary Lou McDonald points to a referendum on Irish unification. That Sinn Féin is now amongst the strongest defenders of the European Union is another (regrettable) issue. However, at least since the times of Oliver Cromwell, Ireland was subdued to being a European colony of the emerging British Empire. Later on, a neo-colony, even after the creation of the Irish Republic. Northern Ireland attached to the UK is the last remnant of that imperial history. To argue that Northern Ireland belongs to the UK, full stop etc. – what about the Left’s history on ‘anti-imperialism’?
Richard Seymour poses some intelligent questions on Labour’s official Brexit-strategy, on a ‘comprehensive customs union’ etc.: “The EU would likely want to bind the hands of a Corbyn-led government, so would insist on state aid and competition rules, among other things. Labour would be negotiating on the terms of its shackles, in order to have an economy that could sustain its reform agenda. It would be negotiating for wiggle-room. It’s hard to say how well any resulting deal would go down, although the effect of passing any half-sensible deal at all would likely be to temporarily boost the economy.”
As a UK snap election might be around the corner: even amongst Corbyn supporters such as Momentum there are now feverish activities to forge a left-wing coalition for a new referendum and to push Labour towards supporting the ‘remain’ side. Interestingly, in her Guardian column Ellie Mae O’Hagan warns about another peoples vote on Brexit: “Be careful what you wish for.” So, expect turbulent weeks ahead concerning this ball of confusion on Brexit, left or right…
In between Xmas and the New Year, you may like to read thought provoking pieces by Prof. Martin Upchurch (Middlesex University, London) on ‘The Labour Party and post-neoliberalism’ and by Scott Lavery (Sheffield Political Economy Research Institute) on Global Capitalism and Labour’s Economic Programme. An equally interesting piece by Tamasin Cave (from Spinwatch) and Kenneth Haar (from Corporate Europe Observatory) explores how corporate lobbyists have been working to ensure any future EU-UK trade deal delivers maximum benefits and as little disruption to them as possible.
EU: Reform – or go bust?
Let’s start with the recent agreement in November 2018 between the French and the German governments to propose the creation of a modest (20 – 25 billion Euro) euro-zone budget to the EU: more window dressing, writes Bill Mitchell. The EU’s ECOFIN Council in December did not discuss the Franco-German proposal and postponed the issue of ‘euro-zone reform’ to next year, as was to be expected. Even Politico comments: “The last few days have illustrated what’s left of Macron’s vision: not much. Whether it’s the French fuel tax, plans for an EU digital tax or planned reforms of the euro-zone, Macron has achieved little of what he promised.”
So let’s look at the next ‘visionary’ on reforming the European Union: Yannis Varoufakis proposing a New Deal for Europe. There is an illuminating interview with him on Jacobin on all this – enjoy. Prof. Martin Höpner is quite sceptical about such EU-reform talk and dissects the ‘Myth of Social Europe’ which is at the core of the thinking of trade unions, social democracy and quite a number on the left. Attac Austria published a free e-book (The European Illusion) claiming that “in practice, a fundamental reform of the EU is impossible”.
Costas Lapavitsas published a new book at Polity (The Left case against the EU) and was interviewed on this by Red Pepper magazine, pointing out that ‘the struggle for socialism must start at home’: “We have relations of domination, new ways in which imperialism manifests itself. That’s the reality of Europe, not the fairy stories of an alliance of nations, overcoming national borders, becoming one big, happy family. These things might exist in people’s dreams, or in political slogans of various people who support the EU, but that’s not the reality. In that context, the ideas of popular and national sovereignty are real issues. That’s the way in which the world will move in the future and should move.”
Red Pepper’s editor Hilary Wainwright disagrees, and emblematically calls for ‘socialism beyond borders’. Wainwright claims that “The origins of European integration lie (…) in 1941, with a group of socialist and communist anti-fascists, imprisoned by Mussolini on the island of Ventotene. Led by Altiero Spinelli, they produced the Ventotene Manifesto, a strategy for a united socialist Europe as ‘the only way out of their common predicament of domination by Hitler’. In today’s context of a new ‘common predicament’ – of austerity and the corporate-driven market – this socialist European tradition needs to be retrieved in a modern, pluralist form. Certainly, it is needed to counter the decline of social democratic parties across Europe, where only the Portuguese Socialists under António Costa (in coalition with parties to its left) and Jeremy Corbyn’s Labour, with its unique success in re-building the party’s membership and voter base, have bucked the trend.”
Unfortunately, the myth that the ‘Ventotene Manifesto’ was some founding document for the later (Western) European integration process (the EEC) does not hold to historical scrutiny. That Merkel, Hollande and Renzi tried to revive this ‘leftist Ventotene myth’ for their own purposes – the 60ieth anniversary of the Treaty of Rome in 2016- is a telling example on how to ‘re-construct’ history from the ‘extreme centre’s’ perspective. It is pitiable to see how lefties followed suit on such endeavors, with only few exceptions …
Also – unfortunately for the ‘reforming the EU’ tale – Spinelli and his friends from the Union of European Federalists in the early 1950ies accepted a free trade agenda etc. and allied with Winston Churchill in their hope to ‘later on’ push the process further towards a ‘real federal and social Europe’. Finally, Spinelli himself and the anti-fascist ‘core’ of that movement split away from the UEF and became very hostile to the European Economic Community as a market driven functionalist integration project.
As Wainwright mentions the ‘Mitterand experience’ in the 1980ies and Syriza in 2015: both neatly show how ‘these lefts in government’ retreated from pursuing their original domestic programmes for which they achieved voter majorities. All these ‘historical turns’ were justified by arguments that ‘higher concerns’ to keep ‘European integration’ on track necessitated domestic austerity. For example: Le tournant de la rigueur, officially initiated in 1983 by the later Commission President Jacques Delors, with a monetary policy orientation prioritizing a hard ‘French Franc’ to compete with the Deutsche Mark in the EMS. Or the simple capitulation of Tsipras to the Troika, as a left ‘Grexit’ never was an option for his Syriza-led government (and also not for Varoufakis …).
Anyhow, this discussion about the history of European integration, or whether the current institutions are (gradually) changeable in a left emancipatory direction etc. deserves to be further explored ….
To come back to the contemporary real EU – a few recommendations for further reading:
- Bill Mitchell’s fine analysis on the EU’s approach to Financial Services;
- Özlem Onaran and others on disciplining workers in Europe;
- Crina Boros (of Investigate Europe) on the pity state (and salaries) of road haulage and truckers in Europe, based on social dumping;
- a recent publication by the Transnational Institute (TNI) – on Greece and what the memoranda implicated for ‘food sovereignty’ and the populations’ right to food;
- a TNI-publication on ‘Building Walls – Fear and Securitization in the European Union’, and on the same issue something from Northern America on the ‘Migrant Caravans’ from Latin America – everyone might easily see the connections and the like-minded policy responses by the ruling circles in the U.S. and the EU;
- Judith Clifton et. al. from LSE on their research ‘Why the Troika treated Ireland less harshly than Greece‘;
- last but not least: Patrick Kaczmarczyk (from LSE) on Germany’s mercantilist model, concluding: “If the euro-zone is to survive, one cannot expect Germany to function as a “fixer of last resort”, but rather, it must be remembered that if it does not act as the primary fixer, the breaking apart of the euro-zone is just a matter of time.” Pessimism of the intellect- as Gramsci would have put it…
France, Italy, Spain – and ‘Belgian obscurities’ …
The ‘yellow vests’ protests in France have become a serious challenge for Macron and his government. Aurélie Dianara provides an informative analysis of this movement and its dynamics: We´re with the rebels. Historian Sophie Wahnich compares the current social upheaval in France with the Sans-Culottes of the French Revolution – an interesting read. Macron announced that his government will raise the minimum wage and lower taxes. Attac France criticizes his announcements as mere deception: “Rather than having companies pay for higher wages, it makes taxpayers pay. The tax exemption for overtime will also benefit the most highly paid employees who have the opportunity to do so. It means also less resources for the state budget. De-socialization will mechanically lead to a weakening of our social protection system.” On the more recent developments with the ‘yellow vests’ protest, see the analysis of Cédric Durand: ‘There’s Yellow in the Air’.
Even before the eruption of the ‘yellow vests’ movement, economist Ashoka Mody explained ‘Why Emmanuel Macron is following Matteo Renzi’s path to political oblivion’ – still a very interesting read, and quite prophetic. With Macron’s partial retreat and the tax cuts announced by him, the French budget deficit is expected to rise from 2.8 per cent in 2019 (accepted by the EU Commission) to maybe 3.5 per cent of GDP – violating the EU’s Maastricht rules. Politico’s pundits are very concerned that this may mean further trouble for the European Union: “The French president’s planned budget giveaways to appease protesters are music to Rome’s ears.” Just before Macron’s announcements, it looked that the Italian Five Stars – Lega coalition was set to compromise with the European Commission on its draft 2019 budget, in order to avoid the launch of an ‘Excessive Deficit Procedure’ (EDP) which in the end could lead to penalties of about 8 billion euro to be paid: ‘Italy waves white flag on budget‘. And now? … We shall see …
Digging deeper into the looming EU crisis around Italy etc., economists become very concerned. Read for example Helen Thompson’s piece on ‘The unintended euro and the problem of Italy‘, or Paul De Grauwe’s appeal that ‘The European Commission should accept democratic change in Italy‘, or Carlo Clericetti’s warnings that in Italy, ‘change is not enough; it has to be for the better‘. The Brussels based Bruegel think tank provides interesting information about the structure of Italy’s general debt: “Italian debt is overwhelmingly and increasingly held by resident banks and investors.” Indeed, about 65 – 70 per cent of Italian debt is owed to domestic creditors – what is bad about that?
As Bruegel notes: “Italian households have high wealth levels, an important buffer against future shocks and also a potentially substantial source of funding for the government. Such funding might alternatively occur through a substantial one-off property tax, the so-called patrimoniale. This nation-centred approach is in sharp opposition to Banking Union and capital markets union, which aim to spread the holding of sovereign and credit risk across the entire euro area and move away from national concentration of sovereign debt holdings.”
Got the picture? To tax the ‘high wealth levels’, property etc. could be a feasible solution to fund eco-social investment in Italy and at least create a solidaristic welfare state. But it runs counter to the EU design for a banking and capital markets union. Taxing domestic wealth is anathema to the current Five Stars – Lega coalition. They have no intention to attack the rich or the ‘bourgeoisie’ at home. The EU would prefer that more of Italian debt is ‘foreign-owned’ – in order to pressure ‘discipline’ via the ‘plebiscite of financial markets’ on any Italian government. That the EU should be more conciliatory towards the Italian government, perhaps rethink its rules on the Stability and Growth Pact – all these advices from concerned economists are very nice. However, they seem to overlook that there is a double fight needed: against the ‘Hayekian EU’, and also against the national bourgeoisie (or ‘power elites’, whatever your concepts may be …).
Complying with the EU’s existing rules (Stability and Growth Pact, Fiscal Compact etc.) while modestly abandoning austerity and reviving economic growth – this was the line proclaimed by the PSOE minority government of Pedro Sanchez in Spain. Unidos Podemos (UP) supported this in principle in order to avoid a direct confrontation with the EU, as Syriza’s strategy in 2015 only lead to total defeat. UP’s strategy: conflict with the Spanish national elites yes (about higher taxation etc.), but keep in line with EU rules on deficits etc. by pursuing a Kalecki/Haavelmo style ‘balanced budget expansion’.
There was some agreement between Sanchez’ PSOE and UP on the budgetary strategy for Spain, weaknesses included. However, this project of a modest anti-austerity budget crumbled swiftly, as the Catalan independence parties needed to adopt it (PDeCAT, ERC) rejected to support the draft 2019 budget.
Then came the regional elections in Andalusia on 2 December 2018. Andalusia was for the last 36 years the major stronghold of the PSOE. Opinion polls predicted an easy win for PSOE and its regional leader Susana Diaz. But the result was catastrophic for the Spanish Left: the PSOE losing about 7.5 per cent of its former voters, the regional UP-coalition (Adelante Andalusia, composed of Podemos, IU and some minor groups) lost about 6 per cent compared to 2015. The clear winners were the neo-liberal Ciudadanos (C’s, doubling their 2015 score) and the hard right Francoist Vox (receiving about 11 per cent from scratch). Now the Spanish right (PP, C’s, Vox) have a majority in Andalusia’s regional parliament and try to form a PP-C’s government tolerated by Vox. The political repercussions of the Andalusia vote, the future trajectory of PSOE and Unidos Podemos are very much under debate, to say the least. For a first assessment, read Jorge Tamames’ piece on ‘Spain against itself’. Unidos Podemos is quite desperate, as the earlier ‘M15/Podemos moment’ evaporated and C’s are on the rise: A darkening horizon in Spain … (updated 17 Dec. 2018)
Concerning ‘Belgian obscurities’- this is about what happened to Libyan former ruler Muammar Gaddafi’s monies. On that, Politico provided some interesting investigative reports, not so much noted by other media. “Lawmakers want to know why hundreds of millions flowed from frozen accounts — and who benefited” came first, and that also other EU governments were involved in the Libya shackle later on. So far – nobody (except Médiapart France) seems to be much interested in this. Mainstream media are more concerned about the break up of the Belgian government about the ‘UN Migration Pact’. The Flemish nationalist hard right N-VA (in former times a member party of the Green/EFA group in the European Parliament) seeks to capitalize on widespread social discontent in Belgium. On the other side of the political spectrum, the leftist PTB/PvdA is growing. Their leader Peter Mertens explains the backgrounds of its recent regional brakethroughs.
Fragmentations and possible re-alignments on the Left in Europe
Earlier issues of Lexit’s Digest pointed out: the so called ‘radical left’ (apart from Social Democrats and Greens, represented at the European Parliament by the GUE/NGL group) may become more fragmented. There is the alliance of the French LFI, Podemos from Spain, the Portuguese Left Bloc and the Scandinavian Left around a ‘sovereignist’ EU-critical platform (Now the people).
There is DIEM25 with its electoral wing, the European Spring and its proposal for a ‘New Deal for Europe’. Its leader Yannis Varoufakis now is head of the list of DIEM’s German electoral wing ‘Democracy in Europe’. Currently, there is no 5 % threshold in Germany for EP elections in place. Which means, that a result of slightly above 1 % in the 2019 EP election contest might secure an MEP seat for Varoufakis. In 2014 e.g. some fringe parties such as ‘Animal Rights’ (Tierschutzpartei), the fascist NPD etc. gained MEP’s on that basis. Apart from such a comfortable situation in Germany, Varoufakis’ European Spring Alliance might not gain much MEP’s from other EU countries. It seems that all this is about ‘getting the prophet in’.
So what about the Party of the European Left, led by chairman Gregor Gysi (Die LINKE, Germany)? They seem to think about a re-composition of the Left in the European Parliament: unite Social Democrats, Greens and Liberals against the ‘populist right’. They held a ‘progressive forum’ in Bilbao. It’s worth documenting the statements following from that: ‘Escape from ‘self isolation’ , regroup Social Democrats, Greens and the Left to ‘save Europe‘. Ironically (but quite in that logic), the Greek PASOK is not any more welcome to the German SPD, their hero now is Syriza’s Tsipras. And Tsipras seems to have a plan … (maybe a futile one, as so often).
Well – that’s ‘like it is’. As it stands, it’s neither ‘Another Europe with Tsipras’ (the slogan chosen by an Italian ‘leftist’ list in 2014), nor ‘Another Europe with Varoufakis’. The EL might refrain this time to propose a candidate of its own for Commission President (Spitzenkandidat). Looking at the real fragmentation amongst the ‘radical left’ in Europe, the EL is troubled and might lose its former position as being the backbone of those forces in the European Parliament …
Lexit’s Digest No. 24, 24 October 2018
The Italian challenge
The International Monetary Fund’s (IMF) October 2018 World Economic Outlook predicts dark clouds gathering over the euro-area. Economic growth projections for 2019 have again been revised downwards to 1.9 per cent for the euro-zone, and to a meagre 1 per cent for Italy. Economist Ashoka Mody points out that the IMF has always been overly optimistic with its growth projections in the past and why. Concerning the European Union, he points out: “Along with world trade deceleration since the start of the year, industrial production growth has sharply slowed in the large European countries — Germany, France, and Italy. With continued global trade deceleration, the IMF’s projection of 1.9% euro-area growth in 2019 appears highly unrealistic.” Mody also claims that the European Central Bank’s bond purchasing programme was a flop and that with euro-zone slowdown already under way the ECB has hit its political limits. In particular Spain, Portugal, Greece and Italy might again be confronted with severe crises.
Hence the ‘Italian challenge‘: Italy’s coalition government of the Five Stars Movement (M5S) and the Lega proposed a budget for 2019 with a deficit of 2.4 per cent, arguing that stimulating economic growth against those bad prospects is the most important task. Minister for European Affairs Paolo Savona sent the European Commission a lengthy paper explaining the Italian government’s position (the English translation starts from page 19, with equally interesting appendixes). The paper argues quite along ‘Keynesian’ lines and politely criticizes the EU’s economic and monetary policy of past decades. The Commission hit back and insisted that the Italian government revises its draft budget. So is this all heading towards some ‘shootout at the O.K. corral‘ between Italy and the Commission? And will Wyatt Earp and his helpers win (‘EU-Marshals’ Moscovici and Dombrovskis) – or the rogue ‘cowboys’ Di Maio and Salvini?
Tom Gill envisages ‘a storm brewing in Europe’, with Italy at its centre – a crisp and interesting analysis. New Europe interviewed economist Sergio Cesaratto on the Italian economy and asked: “Will Italy destroy the euro-zone?” To which Cesaratto coolly replied: “My spontaneous answer would be “I hope so.” (…) Italy will destroy the euro-zone if Brussels pushes the country towards its destruction by market speculation and austerity policies.” Politico thinks that Italy can’t lose the battle with Brussels: “The Commission taking on Rome but not Paris would allow the Italian populists to push their line that the EU is biased against “the people” and widen the gap between Salvini and Emmanuel Macron (…).” So far the Italian government did not bow to the Commission, which issued a harsh ‘negative opinion’ and insisted on a revision of the draft budget.
In between there are two major problems for Italy: firstly, the ECB will not be supportive in buying Italian bonds to dampen the rise of the spreads. Taking on new debt might therefore become more costly for that country. The rating agency Moody’s already judged Italian bonds just one step above ‘junk’ status. Secondly, the ECB, the Commission and the governments of the EU’s core will promote everything via corporate media etc. to support a ‘plebiscite of the financial markets’ against Italy. Whether the M5S-Lega coalition can cope with that (and how), remains to be seen …
Brexit: towards end-game?
The EU October Summit on Brexit ended without a breakthrough (though afterwards EU Commissioner Barnier stated that 90 per cent of issues had been settled). Nevertheless, the UK government still hopes that an agreement can be reached in due time. May’s government now proposes that the UK as a whole could stay within the customs union to avoid a hard border with Ireland. Patricia Mac Bride proposes a different solution: A vote on the re-unification of Ireland (which Paul McCartney already suggested in the 1970ies with his song ‘Give Ireland back to the Irish’).
According to the Guardian, on 20 October about 700 000 people marched in London to demand a ‘peoples vote’ – a strong mobilisation of the ‘Remainers’ camp. Adam Ramsay noted before: “Passionate Remainers describing the crimes of the Brexit campaign as “the biggest scandal in British history” should probably be taught about the Tasmanian genocide or the plunder of India or the castration and rape of the Mau Mau. Regular claims that Brexit is the biggest crisis we face should be met with calm explanations of the implications of climate science and soil erosion and the Yemen famine. (…).”
The U.S. based Political Economy Research Institute (PERI) provided a study on the UK’s Finance Curse (meaning that its financial sector is much too big, and curbing the development of more productive sectors) – an interesting read. The rise of the UK’s financial sector centred around London cost the UK £4,500 billion loss in economic output, whereas many other areas experienced decline and depravation. That’s the link to Brexit – the deprived areas overwhelmingly voting ‘Leave’ (except for Scotland).
Cosmopolitanism vs. Internationalism?
The ‘Remain and Reform’ currents of the EU’s ‘radical left’ claim that keeping the EU together is ‘internationalist’. The euro-sceptic currents of that ‘radical left’ respond: that’s not internationalism, it is (social-liberal or libertarian) cosmopolitanism. At the heart of this debate are theoeretical and conceptional differences on issues such as the nation, the nation state, democratic popular sovereignty, migration policies (open borders vs. ‘regulation’) etc.
So let’s start with Philip Cunliffe’s piece (author at The Full Brexit) about Phoney Cosmopolitanism versus Genuine Internationalism, boldly trying to underline the demarcations between these two lines of argument as he perceives them. Christine Berry argues for a more ‘differentiated’ approach: ” If the new left – influenced by both socialist and anarchist traditions – wants both stronger democratic direction of the economy and weaker enforcement of borders, it needs to tackle head-on its love-hate relationship with the nation-state. It needs to think more seriously about the relationship between national and international democratic governance. It needs to debate the role and limits of the nation-state in democratising a globalised economy and in achieving global social justice. And it needs to envision new forms of international and global co-operation that can meet these aims.” Peter Ramsay of the London School of Economics (LSE) neatly explains how EU membership undermines the left, and concludes: “Supranational cosmopolitanism is chief among the ruling ideas of our age, the ideas of our ruling class. Anyone who is serious about political change, about reviving the democratic internationalism of the left, will find hope for it not in elite supranational networks but in the insurgent rebellious nations.”
So what about ‘open borders vs. regulation of migration’ as a part of that broader debate? Wolfgang Streeck recently provided a lengthy think-piece on that: ‘Remarks on the social construction of immigration policy in rich democracies’. An interesting read in many respects, very thoughtful (whether one agrees with his conclusions or not). His criticism against the ‘open border’ propagandists on the left is this: “The goal now is to open domestic labour markets for everybody from everywhere, with the Left, now as a liberal-libertarian Left, fighting side-by-side with the neo-liberal Right” – a provocative indictment.
There are equally interesting pieces by those leftist currents arguing for ‘open borders’ – e.g. the Amsterdam based Transnational Institute (TNI). Their publications address the ‘shrinking space for solidarity with migrants and refugees‘, and the ‘rise of border imperialism’. Also recommended – TNI’s publication on the EU and the corporate impunity nexus – which adds amongst others to ‘migration pressure’ because of human rights violations by TNC’s across the globe.
These discussions won’t go away. ‘Open borders’ may be quite naive as presented by the ‘revolutionary’, ‘interventionist’ and reformist pro-EU left currents. But ‘regulation’ (if this should promote emancipatory goals) is equally challenging: what are then the criteria for letting migrants in, what is needed for integrating them in terms of social infrastructure, housing, health care, culture etc., and how to regulate all this? Both sides then may be asked: how to differ from the neo-liberal conceptions on migration policies, which aim to attract the most educated workforce (brain-drain) from abroad and also the cheapest ones to support ‘their’ countries low-wage sectors and the resulting super-exploitation of migrants?
See for this an elaborate study by Ana Podvršič on the projected integration of the ‘Western Balkans’ (WB’s) as the next move promoted by the Juncker EU Commission towards further ‘Eastern enlargement’. That enlargement is highly controversial amongst the EU’s member states. One of her conclusions: “The hypothesis proposed here is that the WBs’ structural role is to export labour, and to supply the core countries and their non-tradable sectors with cheap but relatively educated labour force. If this hypothesis makes sense, then – and this is the last point – the European core-periphery relations should be analysed not only in terms of asymmetrical flows of commodities, money capital and industrial capital, but also in terms of asymmetrical flows of labour.”
This discussion has been put more or less on the ‘waiting line’ – ‘muddling through’ is what every government within the EU (and ‘experts’ alike) are interested in at the current conjuncture. If at all, the EU will begin to discuss Macron’s and other proposals for ‘EU- and euro-zone reform’ in December 2018.
Even prominent thinkers such as Jürgen Habermas – though declaring his sympathies for Macron’s reform proposals – are now quite shattered: “Let’s face it: if the suspected link between the economic drifting apart of the euro-zone member economies on the one hand and the strengthening of right-wing populism on the other hand in fact holds, then we’re sitting in a trap in which the necessary social and cultural preconditions for a vital and safe democracy face further damage. This negative scenario naturally cannot count for more than just that. But already common-sense experience tells us that the European integration process is on a dangerous downward curve. You only recognise the point of no return when it’s too late.”
The Brussels based EU think tank Bruegel modestly proposes a more flexible EU: ‘One club does not fit all in Europe’ – again some kind of ‘multi-speed EU’, but without forming a ‘core’ and avoiding a hierarchal structure putting economically weaker member states on the periphery. Perhaps well intentioned, but currently without any chance of realisation.
Wolfgang Streeck, again, explores the future of ‘Western Democratic Capitalism’. Concerning the EU, he concludes: “A democratic European Union – one that is not an, inevitably unstable, outgrowth of imperial ambitions of individual member states like France and Germany, or both together – cannot be a European super-state. Anti-technocratic and anti-centralist sentiment is strong in Europe, even in countries like Germany and France, not to mention the United Kingdom or Eastern Europe. What “the European project” might be, and then it will perhaps survive, is a platform for voluntary international cooperation, among countries desiring to do things together or to maintain a common physical and institutional infrastructure, based on respect for the external sovereignty of participating countries as an essential precondition of their internal democracy.”
Eric Toussaint crisply argues for an anti-capitalist roadmap for Europe: ‘The challenges for the Left in Europe and the euro-zone’. “Breaking away from austerity policies cannot be achieved if radical measures against big capital are not taken, from the very start. Eco-socialism must be put at the heart of the debate, not left aside”, is his credo.
Concerning Toussaint’s wider objective of eco-socialism, there is some discussion going on. Firstly, read Jean-Luc Mélenchon’s address to the ‘World Transformed Conference’ in Liverpool in September 2018: ‘A future in common’. Secondly, read Red Pepper’s editor Hilary Wainwright’s shortened piece on ‘Participatory Socialist Economics` here. And also the reflections by veteran Socialists Leo Panitch and Sam Gindin on these issues: ‘In and against the state’. All these interventions might provide something to think about …
Some notes on Spain and Greece
The social democratic minority government of Pedro Sanchez in Spain achieved a compromise with Unidos Podemos on the draft budget for 2019. Podemos leader Pablo Iglesias is negotiating with the Catalan independence parties to get their support for the deal. Tom Gill explores whether there is a left turn in Spain. Eoghan Gilmartin draws a first balance sheet on what the ‘rebel cities’ governed by left coalitions (e.g. Barcelona, Madrid) did achieve so far or not: The Mayors and the Movements. Andrew Dowling assesses the ongoing crisis in Catalan independence.
Zsolt Darvas of the Brussels based Bruegel think tank provides a sobering analysis about the post-bail-out period in Greece: “If Greece fails to achieve a very large boost to investment, sooner or later the low capital stock will become a bottleneck to economic growth. When that happens, growth will slow down, especially if the current negative output gap has closed by then. Slower growth will make it much more difficult to meet fiscal targets and might require a new round of austerity, which in turn could lead to political turmoil within Greece and a renewed dispute with the Eurogroup.” Stathis Kouvelakis and Costas Lapavitsas report how the Tsipras government is defending the banks against people evicted from their homes and persecuting those who protest: Syriza’s repressive turn.
Lexit’s Digest No. 23, 18 September 2018
Slowdown of the EU’s economies?
10 years after the global financial crisis and the Great Recession, Euractiv assesses that “clouds gather for Europe“. Their analysis focuses on the risks of an intensifying trade dispute with the U.S. (EU, China etc.), Brexit, quarrels over the 2019 European Semester deficit etc. procedures and the next Multi-annual Financial Framework (MFF) for the EU budget etc.. Iain Begg provided an informative overview on the Commission’s proposal on the MFF 2021 – 2027 and the ongoing discussion between member states on this for the European Trade Union Institute (ETUI). Add to this cloudy scenario the decline of the Turkish lira (affecting most notably Italian, French and German creditors) – see here for a conventional view and here for a more ‘heterodox’ one on this. This is the ‘political’ side of fears about a possible new recession in the making.
On the economic side, the French government already had to revise its economic growth forecasts for 2018 and 2019 downwards, as did the Italian M5S & Lega coalition. Already in July 2018, the International Monetary Fund revised growth projections for the euro-zone for 2019 downwards to 1.9 percent. The IMF points out a number of downward risks: global trade war, the recent ‘global recovery’ becoming more uneven (slowdown in ’emerging markets’ such as Brazil, Argentina, India, but also in powerful Japan etc.), the risk of sharp exchange rate movements and so on. The September 2018 Interim Economic Outlook of the OECD projects further downward trends on global economic growth.
The IMF’s latest Global Financial Stability Report (April 2018) also predicted a ‘Bumpy road ahead’: “Higher inflation may lead central banks to respond more aggressively than currently expected, which could lead to a sharp tightening of financial conditions. Valuations of risky assets are still stretched, and liquidity mismatches, leverage, and other factors could amplify asset price moves and their impact on the financial system.”
The latter issue has also been addressed by economists of the French OFCE: ‘Major adjustments are awaiting the euro-zone’. The authors expect that the ECB will slowly depart from its ‘Quantitative Easing’ strategy and return ‘to normal monetary policy’, as the U.S. Federal Reserve already does step by step by slightly increasing interest rates. If the ECB would follow that approach, in those economist’s view this could lead to an appreciation of the Euro vs. the U.S. Dollar, putting severe constraints on the ‘competitiveness’ of the economies of the EU’s ‘southern periphery’ (interestingly: including France). And through this mechanism the ‘old’ spectres of the euro-crisis might come back. Whether one believes in this hypothesis of euro-appreciation or not (this author doesn’t), their analysis of the persistent structural problems of the euro-area and its current regime are very valid: persisting macro-economic imbalances. The southern periphery reduced current account deficits, but the northern EU countries steadily increased their current account surplus. So the misalignments and the resulting ‘drifting apart’ of the EU’s economies and all of its consequences are still there. And the ‘German Europe’ now adds to global macroeconomic imbalances (with the EU’s rising current account surpluses, which did not exist before the Great Recession).
Catherine Mathieu and Henri Sterdyniak of the OFCE (the latter also being one of the leaders of the French ‘Economistes Atterrés’) recently provided a very informative historical overview on the EU-Institution’s and economist’s conceptions and discussions on macro-economic policy for the euro-area. Their approach is broadly ‘Keynesian’ and still in favour of reforming the current EU framework on this. But they honestly concede: “It should however be recognised that our proposal is politically impossible to implement, since Germany and many Northern countries refuse to depart from the European Treaties, the SGP or the TSCG; they require that financial markets exert control on MS, and that the EU authorities can impose structural reforms to MS. If one adds the refusal of a EU of transfers and the refusal of tax harmonisation, it seems unlikely that ambitious projects, such as Emmanuel Macron’s, for instance, may be implemented.” Wolfgang Streeck is even more critical and pessimistic about the future of ‘Germany’s European Empire’.
On Brexit, EU elites hope for a deal at the very last minute (November 2018). The Brussels based Bruegel think tank just expresses what quite a number of member states seem to think: ‘Europe should avoid a no-deal Brexit’, thus pressuring the EU’s Brexit Commissioner Michel Barnier to take a softer stance on Theresa May’s proposals. We shall see whether the UK government and the EU may find some common ground for a ‘trade deal’. If not, the Guardian provides a crisp (and somehow funny) overview on how May’s government would cope with a no-deal Brexit. What will finally happen on that front, is still up for bets …
However, isn’t there the spectre of ‘populist resistance’ – e.g. the new Italian government challenging the EU’s Stability Pact and the like? David Broder’s former analysis featured on Lexit’s Digest (that this is mere ‘tough talk’ and Anti-EU posturing without practical consequences) seems to be confirmed. Even Salvini now pledges that Italy will respect the deficit rules and EU rules in general. Look at Austria, where the same toning down of ‘right wing anti-EU populism’ occurred (and hardcore neo-liberal reforms were pushed by the ÖVP-FPÖ coalition).
Will at least Spain’s PSOE minority government oppose the EU’s demands on ‘fiscal consolidation’ and further neo-liberal ‘structural reforms’? This does not seem to be the case, as Sergi Cutillas reports: Sanchez presents a ‘neo-liberal deficit target’. Unidos Podemos (UP) and regionalist parties which supported Sanchez in the no-confidence vote to topple the conservative minority government of Rajoy abstained at the first reading of the proposal for the 2019 budget, the PP and Ciudadanos voted against. The co-ordinator of Podemos’ economic team, Nacho Álvarez, hopes that the PSOE will come forward with more social concessions, based on the concept of ‘balanced budget fiscal expansion’ outlined by Norwegian economist and Nobel laureate Trygve Haavelmo in the 1940ies. So raise taxes on large companies and the rich, extinguish tax exemptions and loopholes on that front, raise wages, employment and social spending – and the budget will look at itself, as Keynes promised. However, such a strategy would implicate a tough struggle with the Spanish economic elites, which the PSOE never dared to launch after the Second World War. So it remains to be seen whether at all (and if, on which basis) there might emerge an agreement between PSOE and UP on that issue. This will also be a litmus test for UP concerning its allegiance to the ‘principles of the 15-M Indignados rebellion of the squares’.
So far, it seems, that the hard right, the ‘extreme centre’ and also significant parts of the ‘radical left’ are (each from their own perspective) searching for ways towards ‘muddling through’ the possibly upcoming economic slowdown, without challenging ‘the EU system’ as such.
Global perspectives: a looming new ‘financial crisis’?
U.S. Economist Dean Baker of the CEPR crisply reminds us that the ‘Bank Bailout of 2008 was unnecessary’ and why. Star-economist Nouriel Roubini – who correctly predicted the crash of 2007/8 and its reasons – acts again as the ‘prophet of doom’. In his view, the next global recession is likely to come in 2020: “Although the global economy has been undergoing a sustained period of synchronized growth, it will inevitably lose steam as unsustainable fiscal policies in the US start to phase out. Come 2020, the stage will be set for another downturn – and, unlike in 2008, governments will lack the policy tools to manage it.”
Michael Hudson claims that the financial crisis and the Great Recession never have been overcome, and why. Hudson predicts: “If you have bets over where trillions of dollars of securities, interest rates, bonds and currencies are going to go, somebody is going to be on the losing side. And someone on the losing side of these bets is going to go under, like Lehman Brothers did. They’re not going to be able to pay their customers. You’re going to have rolling defaults.” See also his piece on ‘The Lehman 10th Anniversary spin as a Teachable Moment’.
Thomas Palley of PERI looks at the economic and geo-political shifts to come between the U.S. under Trump, China and the EU. Concerning the Trump administrations’ combination of neo-conservatism and neo-liberalism, he concludes: “Ironically, his biggest impact may be on the European Union, particularly Germany, which is being compelled to recognize the neo-con nature of the US and the vulnerabilities of dependence on US exports and technology.” See also an interesting interview with social critic Morris Berman on ‘Declinism‘ (referring to the U.S. Empire, but also the ‘West’) on future economic and social perspectives.
In his recent ‘State of the Union’ address, Commission President Jean-Claude Juncker again called on the bloc that the EU must finally act as a “global player” and take “its destiny into its own hands.” This is mainly wishful thinking, given the EU’s internal divisions.
Could the BRICS emerge as a counterweight to ‘Globalization Checkmated’? Patrick Bond is highly sceptical about this after the BRICS recent Johannesburg Summit. However, there is still one optimist at counterpunch, outlining an alternative economic and geo-political strategy addressed to Putin’s Russia: Gary Leupp on ‘Trump’s Global Impact (and what Russia could do) – enjoy, provocative and funnily written.
Political repercussions: how to tackle fears about a coming crisis?
Take for example the results of the recent general election in Sweden on 9 September 2018: Andreas Malm points out that the far right (though reaching only third place) had its best ever election result and pushes the rest of the political spectrum to capitulate to their agenda. That’s a development that we already could observe quite across the EU. Hard right forces making electoral gains, striving to become part of a government coalition, and being able to shift the public discourse and the policies of ‘centre-right’ and ‘centre-left’ governments in their anti-immigrant, security state etc. direction. Co-opted in government, they are reliable allies of the ‘centre’ to continue with neo-liberal ‘reforms’.
Concerning the Swedish Left Party (which improved its result to 7.9 percent), Malm comments: “On its own, it can make a difference on the margins. (…) But as long as the Left Party is one lonely voice, with few material forces to back it up, it rests on rickety foundations. Indeed, if it achieved its long-term goal of entering a government with the Social Democrats, it could fall prey to the deeper forces that hollowed out Italy’s Rifondazione and Greece’s Syriza after they reached office.”
That’s how it is for the majority of radical left forces in Europe elsewhere, in particular with a view to the decline and self-destruction of the centre-left. Discussing the future of Germany’s Social Democracy, Oliver Nachtwey recently commented: “The Social Democratic Party is now functionally the left wing of the CDU. If it persists on its current course, it risks sharing the same fate as its Greek, French, and Italian sister parties, who have descended from governing their respective countries into political irrelevance.” To counter that development in Germany, Sahra Wagenknecht (co-chair of the parliamentary group of DIE LINKE) launched an appeal to create a broad left movement for change (Aufstehen! – Stand up!), addressing militants and voters of SPD, Greens, DIE LINKE and the like. By 4 September 2018 about 100 000 people registered as supporters via Internet. The templates for this project seem to be Jean Luc Mélenchons La France Insoumise, Podemos in Spain and Momentum in the UK. This move is highly controversial within DIE LINKE party – Victor Grossmann considered the pro’s and con’s of ‘Stand up’.
Francisco Louçã (one of the founders of the Left Bloc in Portugal) points at the heart of the radical left’s problems: parliamentary institutionalisation absorbing the bulk of the party’s activist capacities, whereas as a force of ‘social representation’ (e.g. in terms of trade union delegates, influence in workplaces or social movements) the Left Bloc did not progress. Such issues now seem to be the core of the radical left’s controversies over how to build a party that at the same time is a ‘social movement’, or about alternatively abandoning the party form in favour of a more fluid ‘left-populist’ movement formation and so on.
Concerning the UK Labour Party’s perspectives (perhaps currently the only ‘hope’ for a broader left on the European continent, but soon outside the EU), Robin Blackburn recently published a deep analysis in New Left Review: ‘The Corbyn Project’ – an interesting read. The British mainstream media (and their helpers within Labour) try everything to destroy Corbyn, as Daniel Finn demonstrates on the example of the ‘anti-semitism’ smear campaign. So even a social-democratic reform agenda today is seen by the establishment as a genuine threat to their rule, countered by all sorts of deception efforts. Corbyn rightly addressed the need for ‘democratic control of the media’ as a further point of his agenda.
The European Union – and Germany’s chancellor Angela Merkel in particular – always claimed to be the vanguard pressing for global action on climate change, environmental sustainability and the like. Environmental NGO’s rightly pointed out that the EU’s self-proclaimed targets on reducing CO2 emissions and the like were too timid and that even these targets would not be met in due time. After ‘dieselgate‘ such criticisms intensified.
The European Commission recently proposed to raise the EU’s climate target for 2030 from a cut in CO2 emissions of 40 percent to 45 percent. Germany’s chancellor Angela Merkel ‘is not very happy about this’.
In France, Macron claimed to push for an ecological transition and engaged Nicolas Hulot (an environmental campaigner and TV presenter close to the French Greens) as his minister on that subject. In August 2018, Hulot stepped down from his post, because he could not attain even modest progress in governmental policy on environmental issues. Clémentin Autain (MP for LFI) reports: “Hulot told us that the reasons for the government’s failure on environmental questions were structural.” So the dynamic ‘reformer’ Macron has lost his green cover, and Hulot neatly exposed Macron as the henchman of corporate lobbies that he is.
What is to be done? Linda Schneider firstly points out what should not be done: ‘artificial geo-engineering’, as such schemes “carry their own profound political, economic, and ecological risks“. New Left Review recently provided a series of articles on what strategies an international left might propose for an egalitarian environmentalism. Herman Daly (one of the founders of ecological economics) proposes a three-plank programme for an ecologically ‘steady-state economy’. Troy Vettese calls for a radical programme of ‘natural geo-engineering’, leaving half of the planet’s land space to wilderness to replicate the hemispheric cooling of the Little Ice Age and thus push back global warming. Robert Pollin is sceptical about both Daly, Vettese and the De-Growth strategy in general. He argues for a global ‘Green New Deal’. All these are very interesting reads.
Who could bring about social change towards an ecological transition? The network Trade Unions for Energy Democracy (TUED) proposed a ‘Just Transition’ based on a ‘social power’ approach. Graham Petersen and Philip Pearson of the UK Greener Jobs Alliance wrote a short critical paper on this: “Social Power’ without a budget is not a credible option. This is referred to as ‘a post-capitalist future’ (Page 34), but there is no real sense of how this will be achieved and what post-capitalism will consist of. The institutions of state power on which capitalism is based are not addressed. The slogan ‘System change not Climate Change’ requires a much clearer definition of the kind of ‘system’ we want to put in place.”
Well, to cite the famous literary critic Marcel Reich-Ranicki (1920 – 2013): “The curtain is closed and all questions open”.
Lexit’s Digest No. 22, summer issue, 26 July 2018
June and July 2018 saw U.S. President Donald Trump perform ‘at his best’ on the international stage. First, he torpedoed the G7 Summit in Canada, which for the first time ended without any joint declaration of those ‘masters of the world’. As long as Trump will be U.S. President, the ‘West’ and the trans-Atlantic partnership seem to be defunct.
Then he blew up the July NATO-Summit, declaring the U.S. could go it alone on military and defence issues (so NATO is ‘obsolete’, again). Only to praise NATO afterwards as a ‘fine-tuned machine’. The other NATO partners tried their best to appease Trump, but not to much avail. By the way, what is ‘good’ about NATO for working people? Nothing, as Branco Marcetic eloquently explains.
Eventually, Trump met Russian President Vladimir Putin face to face, signalling the possibility of future detente between Washington and Moscow. Only to concede later on that ‘Russia’ somehow meddled with the U.S. Presidential election in 2016 and to underline that he did not give in to Putin after being confronted by a massive campaign from the U.S. Democrats and liberal ‘Europeanists’. Now the U.S. administration is again talking ‘tough’ about Russia …
Earlier on, Counterpunch’s Garry Leup saw most of these developments coming. Read his provocative piece ‘Trump is alienating Europe, and this is a good thing’. Something to consider for the lefties in Europe – ‘thinking big’ about alternative geo-strategy after Helsinki is the challenge …
Finally, the global trade war scenario (U.S. vs. China and the European Union) seems to build up one step forward, half a step back. So is Trump just an incompetent ‘idiot’, as many western liberals judge him, or is there some ‘long-term’ strategic thinking behind his ‘unpredictability’? Seth Ackerman tries to explore Trump’s contradictions: ‘The Jerry Lewis of international diplomacy’.
Trade negotiations between the EU and the U.S. are again under way to avoid U.S. tariffs on European cars. Economist David M. Kotz tries to explain what is behind all this. Heiner Flassbeck demonstrates that Trump has a point in criticizing Germany for its exorbitant current account surplus. Dorothy Guerrero argues that both neo-liberal ‘free trade’ and ‘America First protectionism’ are wrong and toxic alternatives.
After the June EU Summit: the European Union in further disarray
This ‘mother of all EU-Summits’ provided a further shift of the ‘extreme centre’ (the EU mainstream political forces) to the right: on the military, and on the so called ‘refugee and migration crisis’.
Not so much noted are the Councils’ agreements on the EU’s future ‘defence and security’ policies: “The Union is therefore taking steps to bolster European defence, by enhancing defence investment, capability development and operational readiness. These initiatives enhance its strategic autonomy while complementing and reinforcing the activities of NATO, in line with previous conclusions.” Add to this the launching of the ‘European Intervention Initiative’ promoted by France and Germany – a European Coalition of those willing to go to war. However, concerning the European Defence Fund, its research and industrial development programme, EU member states have difficulties on agreeing on concrete projects … For the EU to become a major global military player may still be a long way to go.
French President Emmanuel Macron boasted that the EU finally found a ‘European solution’ on its approach to migration and asylum policies. As analysed in earlier issues of Lexit’s Digest, this ‘solution’ builds on tightening ‘Fortress Europe’: boosting Frontex, criminalizing civil sea-rescue operations from NGO’s, strengthening the EU-Turkey deal, seeking co-operation with dictatorships etc. in Africa to stop the transit of migrants and refugees and to erect ‘disembarkation platforms’ there, building up ‘controlled centres’ for migrants and refugees in EU member states etc.). To put it bluntly: migrants and refugees shall be ‘handled’ in ‘prison-like’ institutions outside and inside the EU. Hungary’s Viktor Orbàn really has ‘won the argument’ …
This is the EU’s erstwhile ‘common approach’ – but it exists only on paper. It relies on ‘voluntary’ co-operation of ‘willing’ member states and is not binding for the EU as a whole. So far, third countries like e.g. Albania, Egypt, Marocco, Tunisia and the targeted African States have no intention to erect ‘disembarkation centres’. And not a single EU member state came out to provide for ‘controlled centres’ within the EU. The perhaps strange and ridiculous thing behind all this is the crisis in the German government (mainly between the ruling CDU and its Bavarian sister party CSU, the latter taking a ‘hard right’ line on migration hoping to win back voters from the rightist AfD at the October Länder election in Bavaria). Germany’s social democrats – although in government – only comment on these controversies from the fringes. This particular German political constellation triggered the recent chaotic developments at EU level. For a crisp analysis of the German background of this EU-move, see Ines Schwerdtner’s short piece on Jacobin here.
Perhaps needless to say, the intention of the CSU to control Bavaria’s borders to Austria (and to create so called ‘transit centres’ there in order to send any refugee back who was granted asylum in another EU member state) alarmed the Austrian government (announcing that then they would close the border to Italy), and equally the Italian government (which wants to close all its ports on the Mediterranean to incoming migrants and refugees). Thus, the European Union now openly shows its real inhumane face. Talk about its ‘human rights based values’ are neatly exposed as phoney lip service.
The logic behind these moves is pretty clear: the Schengen agreement will soon be dead, and also the different ‘Dublin’ agreements on migration and refugee policies of the EU. The European Commission may ‘adapt’ its proposals on controlling the EU’s external borders as it sees fit – but the next ‘twists and turns’ by member states on this might even be too much for a very flexible figure such as the acting Commission President Jean Claude Juncker. Also needless to say: the Dublin agreements are nothing to be defended from a leftist perspective. The interesting thing is that these are now being destroyed by their neo-liberal creators in the first place, as the try to ‘contain’ the challenges from the hard right…
Thus even the mainstream Politico website has something critical to say about ‘How Merkel broke the EU’ – an interesting read. In the summer issue of American Affairs, Wolfgang Streeck takes readers on a grand ‘tour d’horizon‘ on Angela Merkel’s fourth government and its implications for Europe. This lengthy article was written before the emergence of the Five Stars – Lega coalition in Italy, but already provides a well argued and very pessimistic picture about the future of the European Union: ‘A balance of impotence’.
For further reading on EU migration policies: Vicki Squire on the EU’s migration failings, Nick Dearden on the EU migration deal, Antonio Lettieri with a focus on Italy, and Leanne Tory-Murphy on the ‘Wall and the Sea’, looking at the EU’s and the U.S. migration policies in comparative perspective.
Euro-zone reform & Brexit
As was to be expected, next to nothing happened on ‘reforming the euro-zone’ at that summit, postponing further discussions to December. Earlier on, Macron and Merkel had agreed on the so called ‘Meseberg’ declaration on that issue, which is quite vague. Bill Mitchell rightly predicted that this Franco-German proposal would not gain any political momentum within the current EU, and he rigorously dissects that paper. Again, even Politico is very sceptical about the Merkel-Macron paper: ‘Three fudges and a funeral for euro-zone-reform’.
Equally, Brexit was not an issue at that summit. Turbulence on that followed later: Donald Trump supporting Boris Johnson’s line on Brexit (after Johnson as Minister of Foreign Affairs and David Davis as Minister for Brexit quit the UK government in protest, as Theresa May switched her position to a supposedly ‘softer’ approach). May narrowly survived rebellion from within her own Tory party afterwards. “In the end, it was the Labour votes of Brexiteers Kate Hoey, John Mann, Graham Stringer, Frank Field and the suspended Kelvin Hopkins that saved the government’s skin.” On her government’s new White Paper, EU Brexit-Commissioner Michel Barnier is quite sceptical – stopping short of accusing May for a ‘cherry picking’ approach. That is: picky on the EU Customs Union (only for goods), a ‘free trade agreement’ post-Brexit along a UK wish-list etc.. The toughest issue still is how to avoid a ‘hard border’ between Northern Ireland and the Irish Republic. Thus the project of a united (republican) Ireland seems to win traction, even in Northern Ireland (which is good).
Commentators from the broader left rightly ask what Labour’s stance is on all this. Guardian editor Larry Elliot is concerned that the British left does not seem to recognize opportunity in that crisis. Ray Bellchambers questions the illusions of the leftist ‘Remainers’ in the UK. Spiked! editor Brendan O’ Neill ravages against May’s ‘betrayal’. Make up your own mind on all this as you see fit … Time seems to be running out to get an ‘orderly Brexit’ of whatever sort on track …
The EU and the Mediterranean: a selective political mapping exercise
This section provides links to (hopefully) interesting articles analysing recent political developments in some countries of this region.
Let’s start with Turkey: Recep Tayyip Erdoğan was again elected President in the first round in June, but in the Turkish Parliament the AKP could not achieve an absolute majority, and despite massive repression against it the left HDP managed to pass the 10 percent threshold. For an informative overview, see Jacobin’s ‘Six takeaways from the Turkish elections’.
The June parliamentary elections in Slovenia led to a quite complicated situation: the rise of a xenophobic right, the stagnation of a fragmented centre and a modestly rising left. The Slovenian left (Levica) is discussing about its approach to national politics and the EU: ‘Against Janša, Against Brussels’. Gal Kirn reflects – amongst other items – about Levica’s debate on the European Union and the forthcoming European Elections in 2019: “There might be three different left electoral options in the coming EU elections (Melenchon’s front, Gysi’s European left, and Yanis Varoufakis’s Diem25), at a moment when two extremes, the centre and the authoritarian right wing, seem to become more unified than ever. If the Left does not work towards a viable and united front, it risks becoming a force identified with the legacy of the welfare state whose renovation can seemingly be realized only by the authoritarian right.” To no one’s surprise, there seems to be a similar spectrum of opinions on programmatic, strategy and tactics within the Slovenian Left as in other formations of the radical left in Europe.
With the ousting of Mariano Rajoy and the installation of a social democratic minority government led by PSOE Secretary General Pedro Sanchez – will Spain now be ‘turning left’? Analyst Steven Forti is mildly optimistic, see here and here. Antonio Maestre takes a more sceptical view: Sanchez’ government is just the ‘lesser evil’. Luke Stobart takes a closer look at ‘Sanchez and the Catalan crisis’ – a highly informative analysis (whether one shares the authors pro-independence stance or not). Unidos Podemos will try to push the PSOE minority government to adopt more progressive measures, with the Portuguese constellation serving as its role-model. Whether and how far this will work, we shall see …
Hence, it might be useful to take a closer look at what is happening in Portugal under the social democratic minority government of Antonio Costa. From the point of view of the Portuguese Left Bloc, Adriano Campos et. al. draw a first detailed and informative balance sheet since 2015 of what they call a ‘non-model’. For a more critical analysis, see Catarina Principe’s ‘The Portuguese Myth’ and Nuno Teles’ ‘The Portuguese Illusion’, both claiming that there is ‘austerity-lite’ and a restructuring of the Portuguese economy centred on low productivity sectors, plagued by precarity and with little need for new investment.
Greece will exit the third memorandum in August, and Prime Minister Alexis Tsipras promises a ‘social dividend’ coming soon. However, the Syriza led government committed itself to continue with austerity and neo-liberal structural reforms, based on conditionality demanded by the ESM. Furthermore, the IMF has serious doubts whether the projected annual budget surpluses can be met over the next 10 years or so, once again questioning the sustainability of Greece’s public debt. Greece will be put under ‘enhanced surveillance’ of its fiscal and economic policies by the European Commission, which is a newly invented procedure. Anouk Renaud explores the details of the deal reached between Greece and its EU creditors. Sergio Cesarotto assess the ‘Greek tragedy’ and asks: ‘What moral can we draw from the Greek crisis?‘. He pessimistically concludes: “The Left, however, lives in a parallel world in which Aesop’s tales are told without learning their moral, and for this reason it is destined to disappear in a world of adults.” Dimitris Konstantakopoulos draws a crisp balance sheet of past and ongoing subjugation of this country. In an op-ed for the Guardian, Zoe Konstantopoulou states: “The Greek prime minister and Syriza have betrayed their people and their principles. They have to go.”
Italy‘s economy: towards Euro-Exit?
Let’s start with Heiner Flassbeck’s analysis of the current state of the Italian economy: ‘The Italian patient‘. Sergio Cutillas reminds of the selective use the ECB made of its bond purchasing programmes to put pressure on the EU’s southern countries (Greece, Italy, Spain in the past) to implement neo-liberal reforms. He explores this practice in the more recent Italian context and asks: ‘Is it possible to call the political regime of the euro democracy?‘ German Foreign Policy.com provides a crisp account on discussions within Italy and between the governments of Italy and Germany on the economic policy stance of the Five Stars – Lega coalition: ‘Too big to fail’.
Discussion is on about Italy leaving the euro-zone or setting up a parallel currency if the EU does not support the governments plans for an investment programme. Joseph Stiglitz boldly argues in favour of Ital-exit, and explains measures to be taken on ‘How to exit the euro-zone’. Economists of the Italian Group of Fiscal Money argue that Italy can regain control of its monetary policy without breaking the rules of the euro-zone: ‘A parallel currency for Italy is possible‘. An interesting debate … On Hereticus Economicus, Serban V.C. Enache breezily provides a “more or less practical guide” (the author’s own words) on ‘How to leave the Euro’ – enjoy.
Lexit’s Digest No. 21, 31 May 2018
The end of the West?
U.S. President Trump’s announcement to withdraw from the Iran nuclear deal (a formal international agreement, endorsed by the Security Council of the United Nations) is a heavy blow to the erstwhile ‘transatlantic partnership’ between the U.S. and Europe. Commentators fear that this decision will lead to a further destabilisation of the Middle East after the Israeli air strikes on Syria etc. in May 2018.
Patrick Cockburn thinks of déja vu: “The crisis is beginning to feel very much like that in the buildup to the invasion of Iraq in 2003.” A sharp op-ed by Ralph Nader crisply exposed the distractions of the U.S. administration on Iran. Jeffrey D. Sachs (the intellectual father of neo-liberal shock-therapy in Russia in the 1990ies) states what is obvious: “European leaders act as if the US still cares about a trans-Atlantic alliance of shared interests, values, and approaches. Sadly, this is no longer the case.”
The European Union led by the four Ms (Merkel, Macron, May, Morgherini) claims it stands firm on the Iran nuclear deal, together with Russia and China. However, if the current U.S. government should apply extra-territorial sanctions against EU firms that invest or trade with Iran, most of the bigger EU companies with business in the U.S. market will most likely withdraw from their investments already made in that latter country. Supporting firms (mostly small and medium enterprises) with no exposure to the U.S. investing in Iran might not suffice to create a recovery of the Iranian economy and thus help to stabilize the ‘moderate’ forces in Iran.
U.S. sanctions against Iran and Russia sharpened, decisions on tariffs on EU steel, aluminium and possibly cars incoming – is there a global trade war in the making? Even before the U.S. and China stopped their recently imposed import tariffs and now seem to work on an agreement, some leftist analysts had doubts about the mainstream economists ‘global trade war hypothesis’. Prof. Martin Hart-Landsberg earlier on suggested that “US tariff threats are, in reality, a bargaining chip to get the Chinese government to accept stronger protections for the intellectual property rights and technology of leading US firms in industries such as pharmaceuticals, aerospace, telecommunications, and autos.” According to counterpunch’s columnist Jack Rasmus, “What Trump wants from US allies trade partners are token adjustments to current trade relations that he can then exaggerate and misrepresent to his domestic political base as evidence that his ‘economic nationalism’ theme raised during the 2016 US elections is still being pursued.” Concerning China, Rasmus considers that Trump’s rhetoric is simply about a ‘phony trade war’ – making ‘radical’ postures to his voters, but ready to reconcile according to the different interests of U.S. capital fractions active in the ‘China business’. The European Union is still hoping for a trade detente after the U.S. – China import tariffs were put on a halt. But expect that game to go on, as Trump wants to wear the EU down to servitude on his agenda …
What’s the upshot on all this? Brahma Chellaney (Professor of Strategic Studies at the New Delhi-based Centre for Policy Research) points to a possibly emerging disorderly G2 -structure, consisting of the U.S. and China: “Trump’s “America First” strategy and Xi’s “Chinese dream” are founded on a common premise: that the world’s two biggest powers have complete latitude to act in their own interest.” Something to think about.
The EU does not seem to have a feasible strategy, as regards its own proclaimed goal to become a strong global player after Brexit, able to project ‘power’ (hard or soft) around the world. Sanctions against Russia because of the unresolved conflict in Ukraine yes – but also ‘dialogue’ with Putin (because the EU needs ‘Russian gas’, capitalists from France and Germany are keen on reviving their exports to Russia); co-operation with China and Russia to save the Iran deal yes – but no full confrontation with Trump; creating an ‘EU Defence Union’ yes – but in close co-operation with NATO, eager to deliver on its 2 per cent of GDP spending on the military, as Trump insists, and so on …
So seen from the EU’s own proclaimed perspectives, at best it may come third in a moving international geo-political ‘order’ (which is not any more ‘rules-based’ multilateral co-operation between ‘global players’), if at all. The EU empire is not so strong as it wants people to believe, and differences between EU governments on almost everything are aggravating …
Italy‘s organic crisis …
EU elites feared that an euro-skeptic government will emerge in Italy: a coalition of the Five Stars Movement and the Lega. The German government was very alarmed, and the EU mainstream press always was concerned about the Italian election’s impact on ‘EU economic governance’. Economist Mario Pianta provided an interesting analysis of the programme of the planned M5S – Lega coalition: ‘Italy’s new government is more neo-liberal than populist’.
Macro-economists such as Larry Summers and Heiner Flassbeck point out what is obvious – that the current euro-regime is bad for Italy’s economy. Flassbeck also addresses some political conclusions: “anyone who today denies a democratically newly elected government – be it centre, left, or right – a dialogue with an open outcome, despite them having perfectly justified economic concerns, will reap a nationalist-fascist storm in comparison to which what we are now experiencing is only a mild breeze.”
Italy’s President Sergio Mattarella initiated steps to install a caretaker government of ‘expert technocrats’ lead by former IMF official Carlo Cottarelli. Remember similar efforts before – the last ditch in 2011 was the ousting of Berlusconi under pressure of the European Central Bank, sweeping the unelected ‘expert’- government of Mario Monti into office.
Mattarella blocked the nomination of the economist Paolo Savona as minister of finance simply on the grounds that Savona had published euro-skeptic books and articles and was critical about German captial’s dominance of the European Union. As EU grandees grudingly accept right-wing euro-sceptics as ministers in coalition governments elsewhere (e.g. Austria, Eastern Europe etc .), this was a remarkable step by Italy’s President against the outcomes of democratic elections.
As Jan Zielonka notes: “The president cited concerns about international markets as the prime reason for his veto. This implies that the markets, and not voters, are in a position to determine the future of the Italian Republic. Put differently, elections can be considered valid only if they lead to outcomes welcomed by the markets.” The usual campaign of fear soon set in – see for example EU Budget Commissioner Oettinger’s remarks :”My concern and expectation is that the coming weeks will show that the development of the markets, government bonds and the economy of Italy will be so far-reaching that this will be a possible signal to voters not to vote for populists on the right or left.” But such talk seems to backfire on the EU …
Thomas Fazi provides an excellent historical analysis of the political and economic reasons why Italy’s organic crisis is here to stay. David Broder takes a pessimistic view on that country’s future outlook: “While in the general election the M5S was the leading force in most regions, the Lega is today advancing outside its heartlands to become an all-Italian nationalist movement. Its rise in national polls since March 4 (rising from 17 percent to 25 percent, mainly at the expense of Berlusconi’s party) has been borne out in recent regional contests.” In a surprise move, Lega and Five Stars offered to reshuffle their cabinet list, and Mattarella agreed to approve Guiseppe Conte as Prime Minister and his proposed team (update 01-06-2018). Bets are open whether the usual Italian transformismo may be able to do its work again.
… and the future of the euro-regime
With Italy as a source of political uncertainty, resolving the EU’s difficulties looks very complicated. Additionally, the future of Spain is overshadowed by the ongoing Catalonia crisis and a no-confidence motion of PSOE leader Pedro Sanchez against prime minister Mariano Rajoy which may lead to a change of government. Rajoys conservative Peoples Party has for long been exposed as a force of corruption. No progress emerged on Jucker’s pet-project for further eastern enlargement of the EU to the ‘Western Balkans’ because of Macron’s opposition.
As a result, expectations on forging a Franco-German compromise on reforming the euro-zone are low. The European Commission included the creation of an ‘investment and stabilisation facility’ for euro area countries in trouble in its proposal for the EU’s post-Brexit long-term budget plan (the Multi-annual Financial Framework for the period 2021-27). Of course, support from that new facility would be conditional on member states pursuing neo-liberal ‘structural reforms’ in return for receiving funding. Supporters of Macron’s more far reaching euro-zone plans are disappointed: “The Commission’s proposals on a stabilisation function will not be a game-changer for stabilisation policy in Europe,” writes Grégory Claeys of the Brussels based mainstream Bruegel think tank.
On nearly all the issues of euro-zone reform under discussion, EU governments disagree. The same holds for the Commission’s separate proposal to allow for sanctions (cutting cohesion funds monies) against member states that do not respect the rule of law. Economic experts also disagree on euro-zone reform: e.g. Isabel Schnabel (professor of financial economics at Bonn University and a member of the German Council of Economic Experts) argues that at least small-step reforms of the euro-zone must be undertaken now. Her colleague Peter Bofinger of the same expert group however declared that “no deal is better than a bad deal“.
What about the exit of Greece from the last bailout programme and future debt relief so much awaited by Alexis Tsipras? The EU creditors did not reach a deal with the IMF on restructuring debt, and it is doubtful whether a last minute agreement on this may be reached at the next G7 meeting. Generally, the EU insists on strict post-program surveillance of Greece to enforce the continuation of austerity policies after exit from the bailout. The ECB demands that Greece accepts a ‘precautionary credit line’, as the spreads of Greek bonds are rising again due to uncertainty about the Italian political situation. So, Greece shall be kept on a ‘short leash’, underlining its current status as a ‘quasi colony’ of an EU dominated by Germany.
If Sanchez should become prime minister of a social-democratic minority government in Spain, he might gain genuine support from Portugal’s social-democratic government, and also rhetoric advances from the Greek government of Alexis Tsipras. The troubles for Merkel and Macron to get the Franco-German tandem back on track are obvious, also because of these developments on the EU’s southern ‘periphery’.
The upshot on all this: With economic and political instability looming ahead (the spectre of an emerging transatlantic trade war, Brexit, more sluggish economic growth after 2019, and hardening disagreements between EU member states on multiple strategic items), even muddling through will be difficult for the EU. It will be interesting to see how the EU Council meetings scheduled for June 2018 will cope with all these challenges …
From a Lexit perspective, Thomas Fazi and Giacomo Bracci explore the costs and benefits of Euro-exit – an interesting read.
The Amsterdam based Transnational Institute (TNI) published an informative study on the EU’s migration control policies, in particular on its border externalisation measures that require neighbouring and even far off countries to act as Europe’s border guards: Expanding the Fortress. Stathis Kouvelakis examines the links between Fortress Europe and the EU’s quasi neo-colonial economic strangulation of Greece: Borderland – a highly interesting read.
On social movements old and new, class struggle and left strategy
Firstly, some takes on feminism(s). The recent Irish referendum on the strict anti-abortion rules of its constitution ended with a clear two thirds majority for repealing those. On the campaign by the feminist group IMELDA in Ireland, see here.
New Left Review recently provided two highly interesting pieces on feminism(s): Firstly, an in depth analysis of Spain’s feminist strike in March 2018; and secondly a longer study by Susan Watkins on global institutionalised feminism (based on ‘anti-discrimination’, ‘gender mainstreaming’, ‘affirmative action’ etc.) versus those feminist movements more strongly addressing precarious labour, poverty and social exclusion. The latter is a very long article, but full of empirical evidence and very thoughtfully argued.
Let’s continue with another recent publication of TNI: Disrupting European authoritarianism. Its authors argue: “EU institutions and governments responded to the euro-zone crisis with a combination of austerity and authoritarianism that increased precarity and eroded liberal democracy. However, a survey of social movements shows that this technocratic de-politicization was only partially successful as the increasing exclusion of people from democratic decision-making also sparked novel forms of organizing that have opened up potential avenues for radical social change.”
Equally interesting in that respect is Adam Churchard’s review of Red Pepper editor Hilary Wainwright’s latest book: A new politics from the Left. Wainwright focuses on showing ‘how positive alternatives to neo-liberalism can be developed from a bottom up, participatory capacity, through everyday shared knowledge. More than just resisting, these examples developed new forms of social relations beyond austerity and market logic.‘ This is indeed very important, as even the ‘radical left’ in Europe is often focused on parliamentary representation and on functioning as ‘electoral machines’. Wainwright explored her participatory approach early on, e.g. from her experience with the Greater London Council experiment under Ken Livingstone in the 1980ies, in her book ‘Reclaim the State’ (2003/2009), and in numerous articles on Rifondazione Communista (under Bertinotti) as a promising ‘alter-globalisation network party’ or on Syriza before 2015 (as a similar force able to link and combine trade unions, new social movements etc. towards a joint strategy for power). However, why e.g. Rifondazione or Syriza failed to deliver on their earlier promises to trade unions and social movements alike (when in government), and what mechanisms were behind such developments, is perhaps deserving a more in depth analysis.
As on the European Left many hopes are put on Jeremy Corbyn to deliver on a progressive course, two takes on the UK might be interesting for readers. Firstly, on the controversy between Paul Mason and Daniel Randall on ‘Why class still matters‘. Secondly, on Corbyn’s ambiguity concerning Brexit and the Single Market. Costas Lapavitsas recently wrote on this stratgic item: ” In three interrelated areas EU rules would place severe restrictions on a future Corbyn government: State Aid, public procurement and nationalization. These are not minor issues. They lie at the heart of any attempt to transform Britain’s economy in a socialist direction, especially when it comes to industrial policy. As the debate over Brexit rumbles on it is clear that the EU would place unique barriers to a Corbyn-led Labour government—making even a reversal to WTO rules more advantageous than either EU or Single Market membership in these respects.”
Last but not least – if only for your amusement – the mainstream Politico magazine fears about the 2019 elections to the European Parliament (e.g. that the pro-EU mainstream parties could lose their current majority in the assembly …).
Lexit’s Digest No. 20, 28 April 2018
Empire(s) of chaos
On 14 April 2018 the governments of the U.S., France and the UK jointly launched limited missile strikes against Syria (conducted a few hours before inspectors from the Organisation for the Prohibition of Chemical Weapons (OPCW) were due in Syria to examine the site of the suspected chemical attack in Douma on 7 April). Paul Rogers (who believes that the Assad-regime used chemical weapons) provides an interesting analysis on why the missile strikes were so limited (and more or less ‘symbolic’). The conservative ‘realists’ from earlier U.S. administrations (and from Israel) are quite concerned: Richard N. Haass argues that ‘Missile Strikes are not a Syria Strategy‘, and Shlomo Ben-Ami (a former Israeli foreign minister) warns Trump of withdrawing U.S. military presence from Syria. What they may agree upon: if the U.S. should withdraw, its Arab allies (Egypt, Saudi Arabia, the United Arab Emirates, and Jordan) should engage to create a Sunni force that would ‘maintain order’ in areas liberated from ISIS. Officially, Erdogan’s government in Turkey promotes a similar line (as regards e.g. Northern Iraq, taking in Egypt etc. as ‘guarantee states’ there). However, such allegedly stabilizing ‘Sunni forces’ often are ‘mutations’ of or from ISIS and the like.
In between: a short reminder on how the ‘democratic West’ reacted to chemical attacks in the past – e.g. by Saddam Hussein during the Iran-Iraq war of the 1980ies, when Saddam’s regime was strongly supported by the U.S. and Europe. See Robert Fisk on ‘Chemical Weapons Hypocrisy’. And some follow up on the war of propaganda addressed in the latest Lexit’s Digest: a very long but interesting interview with Glenn Greenwald on ‘The Psychology of ‘Russiagate’ (commenting on the findings of special U.S. investigator Robert Mueller, of former FBI-chief Jim Comey, the role of the NSA, the CIA, the FBI etc.), former Green U.S. Presidential Candidate Jill Stein on the same issues, and an equally interesting interview on euractiv.com with the Russian Ambassador to the EU Vladimir Chizhov on Syria, the Skripal affair, EU-Russia relations and so on.
The reaction of the European Union to the missile strikes on Syria is also quite telling. For example, Germany’s chancellor Angela Merkel ruled out that ‘Bundeswehr’ forces directly participate in the attacks. But her government was supportive of that move of its ‘western partners’, the SPD’s new minister of Foreign Affairs Heiko Maas taking a particularly hawkish stance against ‘Russia’. The Scientific Service of the German Bundestag (Wissenschaftlicher Dienst) however provided an expertise stating that these actions were a clear breach of international law …
EU Council President Donald Tusk initially echoed Merkel’s government in her support for the attacks. However, the EU’s Foreign Ministers were not so convinced by that statement from Tusk. They only conceded that “the Council understands that the targeted US, French and UK airstrikes on chemical weapons facilities in Syria were specific measures having been taken with the sole objective to prevent further use of chemical weapons and chemical substances as weapons by the Syrian regime to kill its own people.” In diplomatic ‘speak’, this does not mean endorsing the missile strikes as justified by international law, but only expressing some ‘understanding’ for the ‘reasons behind’. In essence, there were four groups: the governments of France and the UK, defending the attack; Germany and the majority of the EU’s NATO partners being ‘supportive’ of these as ‘adequate actions’; Italy being more cautious, and the ‘neutral’ countries such as Sweden, Austria, Finland, Ireland, Malta and Cyprus being very sceptical. So, also on this there are rifts within the EU, see here (only German version available).
The EU promises to provide financial assistance to Syria as regards humanitarian aid, reconstruction and development for that war-torn country. It wants to revive the ‘peace talks’ at the UN between the Assad-regime and the Syrian opposition forces (many of them djihadist, and others such as the assumedly pro-western ‘Free Syrian Army’ co-operating with such groups). However, those external forces who fought on the ground within Syria (such as the Russian military, the different militias linked to Iran etc.) will not so easily be sidelined by such diplomatic manoeuvres. Conn Hallinan dissects the ‘Great Game coming to Syria’: “the war in Syria looks as if it is coming to some kind of resolution, and at this point Iran, Russia and Turkey seem to be the only actors who have a script that goes beyond lobbing cruise missiles at people.”
With regard to Turkey’s current regime, Hallinan’s projections might be overly optimistic. What about Erdoğan’s vision to re-conquer parts of Syria and Iraq, in line with his pledge to re-draw some frontiers in order to (modestly) re-establish the former Ottoman Empire? This mainly concerns areas where Kurds live, in a campaign aimed at ‘liquidating Kurdish resistance’ both at home (PKK) and in Turkey’s ‘neighbourhoods’. The Syrian YPG, their sister party PKK and the Iraqi Peshmergas (despite severe political differences between PKK/YPG on the one hand and the Peshmergas on the other), joined forces to defeat ISIS in Iraq and Syria. YPG and Peshmergas were trained and militarily supported by the West – the U.S., the German government etc..
As Erdoğan’s army invaded Afrin etc., this former tale of the brave Kurdish liberation fighters dissipated in the ‘democratic West’ – ‘realpolitik’ is the EU’s agenda (do not criticize the Turkish government too much, they might abandon the EU-Turkey deal otherwise …). Robert Fisk reports on the plight of the Yazidi of Afrin, and questions himself on the perils of predicting events in the Middle East – both interesting reads. Red Pepper UK reports on the current state of the Rojava experiment in Syria, which may not survive the onslaught by the Turkish army. Sultan Erdoğan goes for early elections in June 2018 to keep up momentum for his ‘Ottoman’ plans.
As noted above: the U.S. under Trump wants to withdraw its troops from Syria, hoping that ‘Sunni forces’ from the region (Egypt, Saudi Arabia etc.) will come as replacements. Macron would like the U.S. to stay, but got no positive answer on this. He already offered Trump to take a tougher stance on Iran, for which he already ensured support from the UK and German governments before his visit to the U.S. – meaning new negotiations on “the development of ballistic missiles, “sunset clauses” covering the expiration of certain sanctions against Iran, verification of Iran’s nuclear and weapons programs and its role in neighbouring countries, namely Syria and Yemen”. All that in an effort to convince Trump that the U.S. should not revoke the Iran nuclear deal that was negotiated by his predecessor Obama, but to march forward with ‘Europe’ to tighten and sharpen that deal, which the government of Iran will not accept. So far, with no effect on Trump.
All that told, it might be quite obvious to readers that all this is not only about Syria, but about the future of the wider ‘Middle East’ and more. For a long time this region was under U.S. domination after the Second World War. Looking back to Somalia in the early 1990ies (remember Black Hawk Down), and forward to the Iraq Wars, Afghanistan, the results of the Arab Spring, the bombing and dissolution of Libya, the EU/UN interventions in Mali etc. – it is mainly a picture of creating ‘failed states’ by ‘humanitarian intervention’ and societal disintegration aggravating further in that region… The decline of U.S. hegemony and the unleashing of competing regional powers – in the main stream media portrayed as a possible ‘Eurasian axis’ of Russia, Iran, Turkey with conflicting interests; versus the Western axis of the U.S. and the European Union also divided by conflicting interests – all this neatly exposes the U.S. and its European allies as empire(s) of chaos.
The EU’s woes: the difficulties of muddling through …
Let’s start with the economy: the IMF predicts further global economic growth for this year, but warns of an economic slowdown possibly starting in 2019. Politico complains that EU member states have not sufficiently done their ‘homework’ on ‘structural reforms’ in order to resist a possible downturn – the usual neo-liberal interpretations. Trumps first steps towards a global trade war (with China, but also possibly with the EU) could hit the German ‘export surplus model’ hard. Prospects to avoid ‘U.S. protectionism’ do not look that good for Macron or the EU, as also Angela Merkel (as the much trumpeted ‘last beacon of the liberal Western order’) finally had to note. ‘Dog eats dog’ (an essential feature of capitalism, whether between companies or between governments wanting to enhance ‘their’ national state’s overall ‘competitiveness’), ‘beggar thy neighbour’ policies as criticized by Keynes – all this takes more sharpened forms now. Multilateral ‘rules based’ systems for global trade are fading away, hard core neo-liberalism is not. ‘Make America great again’ (or the EU, or the UK-right’s fantasies about creating a free trade Anglosphere) – this is what drives and also divides the former ‘West’. The EU ‘responds’ to Trump: trade deal with Mexico, along the lines of CETA, more in the making … And continues to destroy local farming in Africa etc. …
Massimiliano Mascherini rightly points out persisting youth unemployment in many EU countries as a legacy of the Great Recession 2007/2009 – in particular regarding long-term unemployed young people. If there is an economic slowdown in the EU to be expected (as the IMF fears), not only these already existing problems will aggravate. The hopes that this author and other progressives (e.g. the Euromemo Group) put on the EU Youth Guarantee Scheme are not convincing at all. It is (at its lowest level) about providing a ‘traineeship’ (no obligation that this is paid for) for all young people under the age of 25 within four months of leaving a job or formal education. And about fostering ‘labour mobility’ of young job-seekers across the EU. In essence, this is a further tool of the EU to promote ‘flexploitation’ of young people and the workforce in general, long ago baptised as ‘flexicurity’ (assumedly enhancing flexibility and security for workers – there always was more ‘flexibility’ in the interest of capital, but not more security for employees as a result).
Some main-stream Europeanists are very concerned about the EU’s perspectives. The last Lexit’s Digest provided some analysis from left, mainstream or right-wing commentators on the outcome of the 4 March 2018 Italian election. Talks between Salvini (for Italy’s right-wing alliance) and Di Maio (for the Five Stars, M5S) on forming a government broke down. Now Di Maio wants to talk with the PD and others to form a coalition. The ‘Europeanists’ hope that M5S becomes ‘more reasonable’ (that is: adapting more to EU-discourse and ‘recommendations’, as it already did). However, even the ‘Europeanist’ think tanks have their second thoughts: “Italian euroscepticism is not yet virulent, but many Italians feel the EU does not work for them“.
The Brussels based Bruegel institute provides an interesting overview about the debate on euro-zone reform between mainstream economists. Harris Hatziioannou dissects the 14 Franco-German economists proposal in detail and concludes: “The structure of the currency union (…) would become even more restrictive, severely limiting the political and economic possibilities of future generations of peripheral nation states, as it would condemn them to remain in perpetuity within a debtor’s prison.” Recent discussions on how to go on with debt relief for Greece after the current ‘programme’ expires in August 2018 very much underline this analysis.
However, also muddling through on euro-zone reform seems to be more complicated than expected. Ashoka Mody neatly explores why the so-called ‘Franco-German friendship’ has always been a myth. When French governments were quite in line with the demands of German capital, – e.g. Mitterand & Kohl in the 1980ies on the European Single Market and later on the European Monetary Union; Sarkozy and Hollande with Merkel during and after the Great Recession 2007- 2009 on fostering ‘competitiveness’ etc. – the Franco-German tandem seemed to work in tune. Meaning that French governments were reluctantly bowing to ‘Germany’s economic dominance’ and its recipees for ‘reform’. That is not exactly Mody’s analysis (who maybe supportingly cites Juncker that the ‘French spend too much money and spend it on the wrong things’), but perhaps closer to what really happened. On euro-zone reform plans, economist Bill Mitchell puts it straight: Forget European Reform – the Germans have anyway.
Léon Crémieux reviews the still ongoing strike wave in the public sector and student protests in France: Is this a ‘return of 1968’, or of 1995 when the conservative Juppé government was brought down by trade union action? Future will tell … Owen Jones recently exposed Macron’s ‘reforms’ in France for what they are: not ‘moderate‘ at all, but right-wing. This is also true for his ‘reform’ of French migration and asylum policies. On that issue, there are new fronts emerging: the Southern EU States against the EU’s recent proposals to ‘reform’ the EU’s Dublin Conventions on this.
Regarding Eastern Europe (the notion of ‘illiberal democracy’), the EU is spineless to push through its ‘democratic values’. This has to do with EU procedures: to implement real sanctions against countries such as Poland governed by the PiS or Hungary governed by Victor Orbàn’s Fidez on violations of the ‘rule of law’ etc., there would need to be ‘unanimity’ within the EU Council. As the governments of Poland and Hungary support each other to avoid such sanctions from the EU, they can continue with their respective agendas to restrict ‘liberal democracy’ at home. Two takes on Hungary after the recent national election may be interesting: Comelli & Horváth assessing the mistakes of the liberal (and mostly non-existing left-wing) opposition, and a piece from G. M. Tamás on Orbán vs. the Enlightenment.
Somehow amusingly, Politico is already concerned about China’s increasing influence in Central and Eastern Europe supposedly creating a ‘New Eastern Bloc’. So beware of the ‘New Silk Road’ … (which could entail a perspective for ‘peace and stability’ on the ‘Eurasian continent’, but also a threat to environmental sustainability etc. – all that not so much reflected by a European Left divided by ‘campism’; that is Russia and China seen as the ‘good guys’ against western imperialism, no strings attached; and others regarding Russia and China as the emerging ‘new imperialists of the 21st Century’; a ‘concrete analysis of a concrete situation’ might demand more reflection than this …)
Eco-socialism is one of the emblematic pillars of Jean-Luc Mélenchon’s movement La France Insoumise. It seems that this vision is increasingly taken up in political debates of the left in other countries, e.g. very prominently by Jeremy Corbyn at Labour’s ‘Alternative Models of Ownership Conference’ in February 2018. See also the interesting piece by Sebastian Livingston on ‘Consumerism, Capitalism and Eco-socialism’.
Red Pepper editor Hilary Wainwright argues for ‘Creating an economy that works for all’ and points out the need for a strategy to build ‘power from below’. This is also being addressed by a recent publication of the network Trade Unions for Energy Democracy (TUED), arguing for a ‘Social Power Approach’ towards a ‘Just Transition’.
Based on their work on the historical ‘Insecurity Cycle’, Sue Konzelmann and her colleagues optimistically argue: “The links between social movements like Momentum in the UK, and Our Revolution, which has grown out of Bernie Sanders’ presidential campaign in the US, offer the intriguing possibility that politicians like Jeremy Corbyn and Sanders – who are articulating an alternative vision of society and politics – may produce an axis as influential as that of Reagan and Thatcher during the 1980s.” History will tell …
‘Europe 2019’ and the radical left
It seems that the fragmentation of the forces of the radical left in Europe is going on, as well as possible re-groupings due to programmatic, strategic and tactical differences. At its Executive Board meeting in March in Vienna the Party of the European Left (EL) rejected the proposal of the French Left Party (PdG) to exclude SYRIZA and adopted a call for ‘Unity of Left and Progressive Forces’. The aim is to create an alliance of political forces as represented by the Forum of Marseille (which so far has produced some declarations, but otherwise no tangible organisational results).
Then there is DIEM25, which met on 26 April 2018 in Lisbon, joined by the EL, DIE LINKE and the Party of the European Greens as ‘observers’. It remains to be seen whether the ‘observers’ finally join that project of a trans-national list for the EP elections in May 2019 and accept DIEM25’s political platform (European New Deal). Prior to the meeting in Lisbon, Varoufakis and De Magistris wrote an Open Letter to Gregor Gysi (EL President), Pablo Iglesias (Podemos), Catarina Martins (Left Bloc Portugal) and Jean-Luc Mélenchon (LFI).
Already on 12 April the latter three launched their own alliance for the EP election with a joint declaration ‘Maintenant le peuple !’ (‘Now the people’; Portuguese; Spanish, Italian). We shall see where all this will lead and what it will mean for the future of the current left group in the European Parliament (GUE/NGL) …
Lexit’s Digest No. 19, 7 April 2018
The euro-zone and its ‘reform’ after the Italian election
As was to be expected, the results of the 4 March 2018 national election in Italy make it complicated to form a comprehensive government. Lorenzo Zamponi looks deeper into Italy’s depressing stalemate. David Broder comments that “what is happening in Italy is also a concentration of certain broader dynamics. Currently, these are mostly negative lessons, in a country struck by a postmodern counter-revolution that feeds on a broader social malaise.” Jacobin provides interesting insights into the dynamics of Beppe Grillo’s Five Star Movement and on the roots of the unsuccessful left Potere al Popolo formation. Lucrezia Reichlin (a former director of research at the European Central Bank) provides a pessimistic view (from her Europeanist standpoint) on ‘What Italy’s election means for the EU’ – very interesting.
French President Macron is currently facing public sector strikes, but so far he shows no intention to change his plans to ‘reform’ the public administration. With Germany’s ‘grand coalition’ back on track (two thirds of the SPD’s members voted in favour of the coalition agreement on 4 March 2018), the Franco-German tandem is expected to deliver on ‘reforming the euro-zone’. Merkel and Macron promised to present a joint strategy paper on this for the June 2018 EU Council.
However, this is a rocky road ahead. Firstly there are frictions between the French and German governments on important topics (such as banking regulation etc.). Secondly, eight countries from the EU’s north led by the Dutch government are defending the old line of former German Finance Minister Wolfgang Schäuble, opposing not only Macron’s reform proposals, but also the plans of the new German coalition to put a European Monetary Fund under scrutiny of the European Parliament. “The status quo has become impossible in several key areas of European policy, but European politics is not in breakthrough mode“, writes Josef Janning of the European Council on Foreign Relations – a compellingly sober analysis. As regards Spain as a potential ally for Merkel, even Politico is not very optimistic: “The Spanish state may soon have its Catalan arch-enemy, Carles Puigdemont, in its clutches — but that doesn’t mean Prime Minister Mariano Rajoy can relax“. Looking at political developments in Germany and Italy, economist Ashoka Mody argues: “The answers will not be found in ‘more Europe’. For too long, euro area leaders have dismissed or denigrated the domestic public rebellions. This is a terrible mistake.”
Konstantinos Myrodias of the London School of Economics criticizes the European Commission’s ‘grand reform’ agenda: “This ‘do more of the same’ approach based on brutal enforcement and discipline does not tackle the sources of the uneven development.” Anne Karrass of the EU Liaison Office of the German trade union verdi informs about the most recent plans of the EU Commission to make payments from EU Funds conditional on implementing neo-liberal ‘structural reforms’ (as already envisaged by the infamous ‘EuroPlusPact’).
The Juncker Plan promotes Public Private Partnerships to stimulate investment by the EU – now the same approach is being propagated concerning ‘social infrastructure’. Richard Pond provides an interesting critical assessment on this: We need more social investment but no more PPP’s. Thomas Fazi dissects the neo-liberal myths on ‘unsustainable public debt’ within the euro-zone. And Paul De Grauwe takes a critical look at the joint proposal of French and German economists on reconciling risk-sharing and market discipline in the euro-zone. Referring to Donald Trump’s menace of a possible global trade war, Pierre Briançon points out: “Far from being a sign of economic well-being, the eurozone’s surplus — $380 billion last year or about 3 percent of the region’s gross domestic product — reflects the monetary union’s deep structural flaws, worsened by the way it addressed its long crisis.”
What is left of the European traditional left?
Not that much, as regards social democracy, Euro communism and its heirs. Historian Fulvio Lorefice comments on the historical failure of the traditional Italian left. Serge Halimi (editor of Le Monde Diplomatique) provides a lucid analysis on the French lefts long march to the right and its consequences. Ines Schwerdtner considers the prospects of Germany’s Social Democracy in a new grand coalition and those of DIE LINKE. Stathis Kouvelakis recently talked about “the Scylla of Pasokification and the Charybdis of Syrizification” – with due regard to the ‘Corbyn moment’ in the UK. As has been argued on Lexits’ Digest for long, Kouvelakis suggests that “the Labour party with Corbyn and the Portuguese PSP are probably the two exceptions” to the observable decline of the ‘traditional’ (social democratic and communist) left in Europe. The ‘radical left’ in Europe so far has not found a recipe to compensate for these historical losses, in order to get stronger mass support.
So what about the ‘new formations’? DIEM 25 proudly announced its plans for a sort of ‘transnational’ list for the forthcoming EP elections in 2019. Apart from the mayor of Naples (Luigi de Magistris), the current list of supporters is not particularly impressive. Even the intellectual followers of Varoufakis’ newly created party in Greece – MeRA25 – are quite pessimistic about its electoral prospects. The debate on the ‘radical left’ on how to innovate goes on: left-wing ‘populism’ vs. the ‘traditional party formation’ and so on. For a recent reflection on this, see here.
Greece: The Macedonia question, debt relief?
In January and February 2018 there were nationalist mass rallies in Greece protesting against any international ‘compromise’ on re-naming the so called ‘Former Yugoslav Republic of Macedonia’ (FYROM). This looks quite strange to outsiders – but in the 1990ies there were even more massive demonstrations in Greece claiming that ‘Macedonia is ours since 3000 years’ (going back to ‘Alexander the Great’ and the heritage of his Hellenic Empire). Stathis Kouvelakis provides a compelling analysis on that conflict and its historical background. See also the interesting statement from DEA (an anti-capitalist current within Popular Unity) and the Red Network on this here.
With regard to Greece exiting the third ‘Memorandum‘ imposed by the EU institutions, there seem to be discussions underway within the ESM (European Stability Mechanism) on how to proceed further with the unsustainable debt burden of that country. The different proposals do not implicate any new ‘haircut’, a moratorium on the debt etc., but focus on capping interest rates on existing loans, extending bond maturities and so on. Even these modest proposals are highly controversial amongst member states, as some are arguing for further ‘conditionality’ (read: neo-liberal structural reforms) to be imposed in exchange for such ‘relief’.
Hungary: Orbán forever, economic policy
Viktor Orbáns far-right Fidesz party will be the most likely winner of the national election in Hungary on 8 April 2018 – perhaps losing its former two thirds majority in Parliament, but so what? Important structural reforms towards authoritarianism and a workfare-state have been already achieved. The EU criticized the former (curbing media-pluralism, ‘reforming’ the jurisdiction etc.) and accepted cosmetic changes afterwards. But the EU never criticized the ‘workfare-state’ reforms in Hungary – on the contrary. The more important question therefore is: why can his ‘system’ survive? According to Martino Comelli and Vera Horváth: “Much like the Italian left under Berlusconi, the Hungarian opposition is obsessed with Orbán but not really interested in why he’s so popular.” What these ‘liberal’ opposition forces mainly have on offer is a failed neo-liberalist economic and social policy. Orbàn poses strong on ‘national identity’, preferential treatment for national capital and SME’S etc.. But the reality is different, as Mihály Koltai eloquently shows: “ Making big foreign investors content and building its domestic business coalition, while watching out for budgetary and macroeconomic stability – has Orbán found a winning and sustainable formula (…)?” We shall see …
In any case: Eastern Europe is the work bench of mainly German manufacturing companies, the East deeply integrated into its chains of production and value creation. German (and French) governments might criticize ‘illiberal democracy’ in Hungary and Poland or corruption in Romania and Bulgaria and elsewhere (sounds good for their audience ‘at home’). But they also sell cosmetic changes on the rule of law, the judiciary, freedom of the press etc. by these countries as ‘achievements’ of the EU’s ‘democratic pressure’. All this to continue German (and the lesser EU core) capital’s economic domination of that region.
Vice versa: As long as the right-wing governments of Poland, Hungary etc. and the Baltic states can ‘export’ a considerable part of their unemployed to other EU-countries (via ‘freedom of movement’, ‘freedom of service provision’ etc.), and as long as they obtain – in their view – sufficient financial flows from EU Funds (they do not bother about conditionality linked to ‘structural reforms’), the East will cling to the current EU. If these latter conditions should change drastically, the calculations of the bigger Eastern states might become different …
Brexit: Gaining time …
The EU and the UK reached a so called Brexit tranisition deal. There is still no agreement on how to avoid a hard border between the Republic of Ireland and Northern Ireland. In essence, the UK will stay within the EU until 31 December 2020 – so more time for negotiations on a future trade deal and other items. According to a crisp analysis from German Foreign Policy com, the EU aims at creating a ‘special relationship’ with the UK (avoiding a ‘hard Brexit’, and continuing military cooperation). The Labour opposition is quite vague on all that – somehow staying in the EU customs union is ok for them, staying in the Single Market (with some exceptions to be negotiated) as well … There is some mild criticism emerging on the more radical fringes of Corbyn supporters on Labours stance, see e.g. here. There are others on the left who polemically call Labour’s position simply ‘Brexit-betrayal’ … Whatever the views – Labour’s line on Brexit has always been ‘a moving target’ of sorts, trying to somehow square the circle between the expectations of its metropolitan ‘Remainers’ base and its ‘Leave’ voters in poor areas of the rest of the UK. The upshot is: nobody understands what Labour really wants on Brexit …
Russia and Mark Zuckerberg’s Facebook are the new enemies of the people, if you get it right. So let’s take a closer look at the connections between all that.
Cambridge Analytica (which ‘stole’ millions of Facebook data for political campaign purposes), is an offspring of its parent firm Strategic Communication Laboratories (which conceptualized the coverage of the ‘Gulf Wars’ for the western media on orders from the Pentagon). Adam Ramsay provides a very informative piece on that, claiming that “You can’t understand the Cambridge Analytica scandal until you understand what its parent company does.” Edward Snowden earlier on revealed the nexus between the state, private companies and uninhibited surveillance. The Cambridge Analytica case neatly shows how far micro- and nano-targeting (for information warfare of any kind) have developed. What does all this tell us about ‘freedom’ in the democratic West?
Well, forget about the NSA, BND and other scandals – they are history. Now it’s Russian cyberwar, trolls and disinformation campaigns from outside which are destabilizing Western democracy. Branco Marcetic reminds us: “The US, not Russia, pioneered the use of state-sponsored social media manipulation.” Telesur’s Richard Gaunt tells the story how the U.S. won the 1996 Russian elections.
And it must have been Putin’s Secret Service that poisoned former 1970ies KGB agent Skripal in Salisbury – the West reacting with further sanctions against Russia (without providing clear evidence for its accusations): “A dangerous game of Russian roulette that seems to escalate with each passing day, all based on a campaign of disinformation.” The democratic West of course does not practice ‘extraterritorial elimination’ …
From propaganda to action: the next NATO Summit in July 2018 shall discuss how to improve its ‘defence capabilities’ against Russia. The EU in Brussels will lend a helping hand: “By next year, the Commission said it will review transport networks to assess where investment is needed to ensure infrastructure is suitable to move military wares like tanks around.” Michael T. Clare asks: Could the Cold War return with a vengeance? Well, it’s already in the making – Clare provides very interesting information on what the Pentagon wants.
Lexit’s Digest No. 18, 14 February 2018
Europe: the cracking centre?
In a recent piece, Alexis Callinicos suggested: “As we enter 2018, the picture doesn’t look so good for the neo-liberal centre in Europe”. He pointed out: “Macron’s popularity has plummeted as he drove through a pro-business budget and labour market “reforms”. Discussion of EU integration may well run aground, partly because of German resistance (reinforced by the success of the Eurosceptic AfD and FDP in the elections) to anything that smacks of a “transfer union” redistributing from rich to poor states and partly because the Commission is overplaying its hand by proposing a European Monetary Fund run from Brussels.”
True, the political landscape of most EU countries has become more fragmented, and forming ‘normal’ bourgeois governments ‘as we knew them’ has become more complicated. However, is there a defeat of the neo-liberal centre already waiting in the wings? Or do we observe that this centre is shifting to the right under pressure from hard right forces, as in quite a number of EU countries these already were co-opted by them in government? Some country reviews might be useful for getting a more concrete picture of what is going on.
Austria and Eastern Europe
On the new Austrian government coalition of the conservative ÖVP and the hard right FPÖ Jürgen Becker writes: “In the heart of Europe, a new “Mitteleuropa” is in formation. It is quite different from the liberal-democratic visions of Mitteleuropa which Milan Kundera and others had nourished in the 1980s and early 1990s. The renewed axis between Austria and Hungary rests on anti-social policies, the stigmatisation of the poor and of specific migrants and other minorities.”
Bulgaria, which has taken over the current rotating EU-Presidency, is being courted by the Juncker Commission for its ‘sound finance’ and neo-liberal policies. So is Romania, which Juncker would like to see joining the euro-zone as quickly as possible. “Romania is so well regarded that Juncker has chosen it for the historic first post-Brexit summit of the EU, to be held in Sibiu on 30 May 2019—the day after Britain’s formal departure—for a grand upward look at the future of a united Europe“, writes Alexander Clapp in a very interesting piece in New Left Review on Romania’s past and present.
In much of Eastern Europe, a revived nationalism goes hand in hand with the continuation of neo-liberal policies – the ‘illiberal democracies’ of Hungary (update 18/02/2018) and Poland are good examples of this, but also the Czech republic under business tycoon Andrej Babiš’s ANO Party after the victory of Miloš Zeman in the Presidential election. Viktor Orbán and Silvio Berlusconi are being criticized in the western European media as ‘right-wing populists’, but their respective parties (Fidesz in Hungary, Forza Italia) still are members of the European Peoples Party, jointly with Angela Merkel’s CDU.
On the forthcoming national election on 4 March 2018 in Italy, Sergio Cesaratto asks: “Who should I vote for?” Not so easy to answer … David Broder provides an overview on Berlusconi’s resurgent right, the Five Star Movement and Renzi’s PD, the small centre-left ‘Free and Equal’ Party and the tiny ‘Power to the People’ slate (supported by Rifondazione Communista and the PCI): Italy’s terrible alternatives. Richard Brodie assesses the political climate in Italy after the Macerata attack (a facist and former candidate of the Northern League shot eight West-Africans dead and others wounded): Italy’s new racist storm. Brodie’s conclusion: “Italian xenophobia has reached such intensity over the past few years that the actions of a fascist, in a country that has the prohibition of fascism inscribed into its constitution, can somehow be excused so long as the targets are black.”
Euroscepticism has been strongly on the rise amongst the population in Italy in recent years, but the debate on Euro-zone membership seems to have vanished from the political stage, writes David Broder. On political perspectives he concludes: “The heated exchanges between the main parties, allied with their increasing convergence on defining economic and political issues, express a context in which a clash of identities replaces hopes of meaningful change.” Transformismo re-loaded (everything must change so that nothing changes) … The other side of that coin seems to be: Although being a founding member of the European Union, Italy is more often treated by EU grandees as a political lightweight and an economic basket case than as its third-biggest economy (as it will be after Brexit).
Finally, on the historical decline of the once powerful Italian Left, see an interesting interview from Il Ponte with Gian M. Cazzaniga here.
Macron’s popularity is declining, but his ‘structural reforms’ are on the march. Neo-liberal Blitzkrieg so far has been effective, writes Philippe Marlière. Labour (trade unions and the left) seems to be in retreat. On La France Insoumise and its future prospects, see here (update 16.02.2018). The French neo-liberal centre still holds, due to the strong executive power provided for it by France’s particular electoral system …
Spain’s Prime Minister Mariano Rajoy had hoped that Catalonia would come back to ‘normal’ after the 21 December 2017 Catalan election, but his strategy failed. Although the neo-liberal and Spanish-nationalist Ciudadanos became the strongest party in the Catalonian Parliament, the pro-independence parties again achieved an absolute majority of seats. Steven Forti explores the reasons behind these election results: Two Catalonias. Dick Nichols reports about the stop and go concerning ousted Catalonian President Puigdemonts right or not to an investiture to become President again: a political struggle obfuscated by ‘juridical concerns`, the Spanish Constitutional Court coming to the rescue of Rajoy’s government again and again … And also internal rifts in the pro-independence bloc surfacing …
Among the losers in that election were the federalist left Catalunya en Comú-Podem and the pro-independence anti-capitalist CUP. On this and the prospects of Unidos Podemos (UP) in Spain see an interesting interview with Podemos’ leader Pablo Iglesias. Podemos is quite troubled (update 17/02/2018).
The re-percussions of the unresolved Catalan question are already visible at national level: in a recent Metroscopia poll Ciudadanos emerged as the strongest party, the PP losing because of its corruption scandals and its poor management of the Catalonian crisis, the PSOE more or less stagnating, and UP falling back to fourth place. Analysts see the ‘Podemos moment’ vanishing away, and a ‘centre moment’ on the rise (as Ciudadanos attracts centrist voters from PP, PSOE and UP alike). Of course this is only a snapshot of the current political mood in Spain, but also there the neo-liberal centre seems to hold …
Apart from Jeremy Corbyn’s Labour, Portugal is often portrayed by the European left as a source of hope to end EU austerity etc.. Lexit’s Digest featured a lot of differentiated analysis on the policy of Antonio Costa’s social democratic minority government. Here is some more by one of the Left Blocs founders, Francisco Louça. He insists: “As has been exemplified in Greece, there is only one plan B to support the restructuring of the debt, and that is exit from the Euro.” And he clarifies: “The current government in Portugal, which results from an electoral defeat of the right, is not a left government with the commitment to restructure the debt. It is a government of a centre party, PS, with the conditional support of the left, in the context of commitments to the recovery of wages and pensions, an end to the privatization process and no rise in direct and indirect taxes on employment.” So much for the ‘cracking centre’ hypothesis concerning that country …
In the German Parliament (the ‘Bundestag’), parties of the neo-liberal centre (CDU/CSU, SPD, FDP and Greens) together hold nearly 80 percent of seats. After the failure of building a ‘Jamaica coalition’, the leaderships of CDU/CSU and SPD finally could agree on a draft programme for establishing another ‘grand coalition’ (as was to be expected). However, what makes this outcome still unpredictable is the helter-skelter of the SPD, triggered by various zigzags of its leader Martin Schulz. There is mounting opposition from some corners of the party against its current leadership, which is dismantling itself by internal intrigues. Schulz finally stepped down as party leader and revoked his intention to become minister of foreign affairs in the new government. And there is perhaps even more turbulence for Germany’s Social Democracy to come …
What about the ‘No-Groko’ front inside the SPD? Lead by the chairman of the SPD’s youth wing (the ‘Jusos’), Kevin Kühnert, they think that the SPD can only renew itself as a party of the opposition. But they do not provide for an alternative programmatic line of the party – it’s just ‘No Groko’. On this, see the interesting views of Lauren Balhorn and Fabio De Masi (MP of DIE LINKE). Germany’s DIE LINKE is also deeply divided on its future perspectives, and currently not so able to pick up the pieces from the crisis of Social Democracy …
It may also be interesting to look at the crisis of Social Democracy in a comparative perspective. On this, two picks are recommended: Asbjørn Wahl on the Nordics, Marcel Pauly on the decline of Europe’s Social Democrats.
What about the German trade unions? The president of the German Trade Union Confederation DGB, Reiner Hoffmann, strongly supported the SPD leadership’s move to enter a grand coalition again. He argued that the draft coalition agreement is better on social policy issues than what a Jamaica coalition (CDU/CSU, Liberals and Greens) had on offer (which is true). Germany’s branch trade unions may be more critical on several aspects, but more or less share that assessment. As regards collective bargaining, the recent agreement in the German metal industry has been applauded from nearly all sides of the political spectrum – even DIE LINKE co-chair Bernd Riexinger expressed his (critical) approval of the deal as a first step in the right direction. Economists Heiner Flassbeck and Michael Paetz from Makroskop come to a quite different conclusion: Making a success out of failure (the original German version of this article can be read here).
What about Germany’s Groko and future EU-Policy? Firstly, Merkel and Macron already announced steps to re-invigorate the Franco-German axis by renewing the Élysée Treaty between both countries. The SPD will proudly follow that line. Secondly, German policy think tanks insist that possible concessions to Macron’s euro-zone reform agenda should be limited and ‘symmetrically’ linked to the promotion of further neo-liberal ‘structural reforms – see e.g. here. Whether this is more Juncker than Macron (as the analyst seems to think), is not so important. Both Macron and Merkel promote models of a ‘multi-speed Europe’, with the euro-zone at its core and the eastern and southern peripheries having to follow the EU-cores’ orientations. Both support Juncker’s strategy on further eastern enlargement (to the ‘Western Balkans’), with sticks and carrots to get the respective regional entities aligned to Nato (and away from ‘Russian influencers’) and also to the EU’s neo-liberal ‘consensus’. The same goes for Franco-German support to the EU’s policy on development aid and ‘Fortress Europe’.
However, what if the SPD members should reject the grand coalition agreement in a ballot vote scheduled for 4 March 2018? Then there might come a complicated ‘inter-regnum’ period (both for Germany and the EU). Also, Merkel would be finished as leader of the conservatives, a lot of fiery debates following this debacle etc.. A post-Merkel CDU might be inclined to think about the call of its CSU sister parties’ strong man Alexander Dobrindt etc. on the need for a ‘conservative revolution’ in Germany (echoing that notion of the early Carl Schmitt in the Weimar Republic). And possibly warm up to the ‘Austrian example’, that is considering a more right-wing arrangement with the FDP and the AfD – we shall see …
On Germany at least, Alexis Callinicos has a point: the neo-liberal centre – although representing near to 80 percent of the votes cast in the Sepember 2017 elections – has severe problems in forming a ‘stable government’ in a country which economically and polticially is dominating the whole of the EU …
O.k. – not a member state of the European Union. But it is interesting to see that after the failure of many government coalitions of any sort (centre-left, centre-right), now there is a quite unusual government in place. Led by Katrín Jakobsdóttir of the Icelandic Left-Green Movement as prime minister, the coalition partners are the conservative Independence party and the centre-right Progressives – red-green, black, yellow … So, the ‘system’ seems to have many ‘reserves’ – even leftwingers joining the ‘centre’.
Brexit: Towards phase two …
After officially finding agreement over phase one of Brexit (the Brexit Bill, the terms of separation etc.), negotiations on phase two (on a transition period, future trade arrangements EU – UK etc.) have been launched. That is a much tougher exercise, and different interpretations of what has been agreed in phase one come to the surface.
Firstly, the EU hardened its stance on the transition period. Secondly, the EU also took a much stricter stance on avoiding a hard border between the UK and the Irish Republic in Northern Ireland. So far EU Commissioner Pierre Moscovici seems to support the demand by Sinn Féin and others to grant a ‘special status’ to Northern Ireland, keeping that region within the EU Customs Union and possibly the Single Market. For a crisp analysis of the contradictions between the governments of the remaining EU 27 member states on Brexit, see here.
Interestingly, ‘as a Marxist’, Yanis Varoufakis recently promoted a ‘Norway Plus’ approach as his preferred model for a Brexit trade-deal with the EU – that is, the UK should principally stay in the Single Market. Jonathan Shafi strongly disagreed with this in an article published by the Independent: If Corbyn’s Labour would accept staying in the Single Market, it’s plans to nationalise the railways etc. and a lot of its planned anti-privatisation measures would become impossible to implement.
Many mainstream commentators point out that CETA (the EU-Canada agreement on trade and investment) could serve as a model for a Brexit trade deal. The British NGO ‘War on want’ strongly warns about such a perspective. However, what ‘trade democracy’ as their preferred aim would mean concretely for a ‘left Brexit’, remains very vague. ‘Leave’ campaign supporters Jennifer Jones and Julian Sayarer argue for a ‘Green Brexit’. This issue – how to combat climate change etc. after Brexit – is indeed important and not so present in current debates. The strategy proposed by both seems to be to enshrine what is ‘progressive’ about existing EU environmental law into UK law (as a fall back position). A ‘left exit’ approach might propose more radical measures on the ecological front …
Greece – escaping the grip of Troika dictates in 2018?
Not so few on the European Left believe in the optimistic claims of Tsipras’ Syriza-led government that there is a silver lining on the horizon for Greece: exiting the crisis and the bail-out programmes by autumn 2018, and then go for a fresh start enabling a ‘social turn’ in Greek politics. All this may become possible because of renewed economic growth and a sound budget surplus (after all the sacrifices of the latest bail-out package), so they argue. Bill Mitchell does not agree: the next bailout for Greece is just around the corner.
That Tsipra’s government implemented demands by the creditors to further curb the right to strike in Greece enraged the French Left Party (PdG) of Jean Luc Mélenchon. The PdG recently tabled a resolution calling on the Party of the European Left (EL) to expel Syriza for pursuing such anti-worker policies. EL President Gregor Gysi (DIE LINKE) rejects any such move, because “the government policy of SYRIZA is to a great extent marked by the blackmailing of the troika and the German government. This includes measures as the restriction of the right to strike, of which I am very critical myself. Yet, these measures are imposed by the creditors.” So, the Syriza-led government (and the party) are not responsible for what they do …
Also recently, European media were shocked by Donald Trump’s announcement that he intends to relocate the U.S. embassy to Jerusalem and supports the right-wing Israeli government’s stance that Jerusalem should become Israel’s capital. The radical leftist Tsipras already said the same at his visit to Israel in November 2015, and the Greek Ministry of Foreign Affairs issued a statement disagreeing with the EU policy of labelling products from the Occupied Territories. All that was not much reported in the European media. Stathis Kouvelakis dryly commented at that time: “This is what I mean by nihilism: Schäuble asked for pension cuts, for home repossessions by the banks; he didn’t ask for subservience to Netanyahu.” Some update on this strange geo-political alliance (Greece, Cyprus, U.S., Israel) can be read on counterpunch here.
Eric Toussaint (CADTM) recently gave an interesting interview on the work of the former Greek Debt Truth Audit Commission (dissolved in October 2015), on Tsipras and Varoufakis role at that time and more. Also interesting: an interview with Kostis Megalios from Popular Unity on the strategy of the Greek Left after Syrizas U-Turn.
European elections 2019
A majority of the European Parliament rejected the proposal for a transnational list for the European elections 2019 – Macron and Varoufakis may not be very happy with this.
DIEM 25 is working on its ‘transnational party’ project nevertheless – in France Benoit Hamon’s Génération-s and Pierre Laurent’s Communist Party seem to be interested.
European Economy, European Democracy: controversies
What follows are just a few hints on the above items, all interesting reads.
Ulrike Guérot responded to critics of her vision of a ‘European Republic’: Now the EU needs to hand power to its citizens – here’s why.
Thomas Fazi and Bill Mitchell published a sort of rejoinder to that: The EU cannot be democratised – here’s why.
The Euromemo Group (alternative economists) published their Euromemorandum 2018: Can the EU still be saved? This is a quite contradictory document, to say the least. Some interesting analysis on macro-economic policies, finance, sustainable development etc.; mainly framed on ‘reforming’ respective current EU policies step by step. On the debate on euro-zone reform, the message from this group could not be more clear cut: “From our perspective, a likely compromise solution that enshrines the fiscal compact in EU law and does not provide a euro area treasury with real fiscal resources, must be clearly avoided“. Alas – it’s o.k. with the fiscal compact (which former euro-memos criticized heavily), if there comes an Euro-zone Finance Minister and a budget in return, as a possible compromise? Vive Macron … (really ‘heterodox alternative economics’, isn’t it?)
Jacques Mazier – one of the founding members of the Euromemo Group – provided a discussion paper arguing for a differentiated Europe (with euro-exit as one of the possible options).
Bill Mitchell took a critical look at the latest IMF Working Paper on Economic Convergence in the Euro Area: Coming together or drifting apart?– a very interesting read, see here.
State of Nature blog asked some prominent political thinkers: ‘Are we heading for another economic crash?‘ Short answers by Wolfgang Streeck, Cedric Durand and others can be found here.
Frédéric Lordon commented on French historian Bruno Bruneteau’s book Les ‘Collabos’ de l’Europe nouvelle, which deals with conservative and fascist visions of a United Europe in the Interwar period and World War II. Lordon finds amazing parallels between the ideas of the ‘economic rationalists’ of the 1940ies (arguing for collaborating with Hitler towards a ‘New Europe’, thus the ‘collabos’) and the neo-liberal concept of the European Union today.
Jim Kavanagh takes a look Behind the Money Curtain: A Left Take on Taxes, Spending and Modern Monetary Theory – also an interesting piece.
Lexit’s Digest No. 17, 8 December 2017
Euro-zone: reform on track?
On 6 December 2017, the European Commission presented its proposal for a thorough reform of the Economic and Monetary Union. It’s a mix of ideas from both Macron and Schäuble: euro-zone budget, European Monetary Fund, finance minister etc. The Brussels based mainstream think-tank Bruegel provides an interesting collection of articles on that subject – if you want to know more about the ‘Europeanists’ conceptions. However, it is not very likely that the European Council will follow the Commission’s roadmap for reform, the eastern EU countries and even the Dutch government remaining very sceptical. And it remains to be seen, if and on what the governments of France and Germany may be able to agree.
Differences over euro-zone reform were a major point why the German Liberals (FDP) blew up the talks on a possible ‘Jamaica coalition’ with Conservatives and Greens. However, as was to be expected, Germany’s Social Democrats are now open for talks with Merkel’s CDU, in order to prevent a ‘crisis of the state’. It will be interesting to see how far the SPD can press the Conservatives to move in Macron’s direction on deepening EMU. And how much they might achieve with the designated president of the Eurogroup, Portugal’s Socialist Finance Minister Mário Centeno, to promote inclusive growth and prosperity and to end the strict budgetary control of recent years. What the Portuguese Communist Party thinks about Centeno’s nomination, see here.
The former director of the Max Planck Institute for the Study of Societies, Fritz Scharpf, recently published a proposal for a ‘flexible’ euro-zone, combining a common currency for the Northern EU countries and an exchange rate mechanism ‘EMS II’ for the Southern EU countries – see here (2016 paper) and a shorter new article here (in German). Economist Bill Mitchell takes a critical look at the EMU reform ruse, including the proposals of Scharpf. Bill’s colleague and co-author Thomas Fazi recently wrote about ‘the reforms that Europe doesn’t need‘, and boldly states that “the European Union should indeed be viewed a trans-national capitalist project, but one that is subordinated to a clear state-centred hierarchy of power, with Germany in the dominant position.” Finally, Fazi looks at the ‘Left and Euro-zone Realities’ – all very interesting reads, at least for the Lexit-Community.
Meanwhile, the Greek government led by Syriza’s Alexis Tsipras concluded a deal with the EU Commission, the ECB, the ESM and the IMF on the third review of the Greek ‘bailout package’ – further energy and labour market reforms, tax hikes and privatisations to follow. On privatisations and the EU Semester on ‘economic governance’, see an interesting report by Corporate Europe Observatory.
Commission President Juncker and Council President Tusk attested ‘sufficient progress’ for Brexit negotiations with UK Prime Minister Theresa May to move to ‘phase two’ (future trade deals between the UK and the EU etc.). Will financial trading worth some €1 trillion per day be forced to move from London into the EU after Brexit? EU27 governments and experts already begin to have second thoughts about this.
As expected, the European Commission published a blacklist of 17 countries named as tax havens, leaving out British territories and EU member states. Tax Justice Network comes to quite different conclusions …
Catalonia and the Spanish State
Jorge Tamames reviews Spanish nationalism, the ‘regime of 1978’ and prospects for constitutional reform in Spain towards a pluri-national state. He sadly notes: “Podemos is paying the price for its role as the political force bridging the unionist-secessionist divide in a time of growing polarization.”
In 2015, Podemos’ General Secretary Pablo Iglesias gave the King of Spain a present – the DVDs of the TV-series ‘Game of Thrones’. In Iglesias’ view, this was to remind the king, that ‘in a democracy everything is possible’, maybe even overcoming the monarchy. With the election in Catalonia on 21 December 2017 approaching, another TV-series is regarded as emblematic by some pundits: who will govern that entity afterwards?
The current thrilling template seems to be Borgen. In that popular Danish fictional ‘political drama’, the leader of a minority party (Birgitte Nyborg) became Prime Minister – because the bigger parties in Denmark blocked each other from gaining power. So the leader of the Socialists in Catalonia (PSC), Miquel Iceta, and also Xavier Domènech of Catalunya en Comú Podem (CatEPC) pledge to be the real Borgen-style candidates against the pro-independence parties and the neo-liberal wing of the Spanish ‘unionists’ (PP and C’s). For a quick overview on the contending parties in Catalonia, see here. Dick Nichols of green left weekly takes a closer look, identifying three competing blocs: pro-independence, unionist, and possibly a transversal and thus ‘hybrid social coalition’ (ERC, PSC, CatEPC) made of formations of both camps.
ERC and also PDeCat (as the social-liberal and the more firmly ‘bourgeois’ representatives of Catalonian independence) interestingly both declared that they would no longer promote ‘unilateral secession’ from the Spanish State, but rather go for a dialogue with central government and the EU on a ‘guaranteed new referendum’ etc. Only the CUP sticks to the unilateral declaration of independence (DUI) of 27 October 2017. So, finally, the two bigger pro-independence parties watered down their former stance (most probably in the face of repression and juridical persecution from the Rajoy government), and now ‘officially’ campaign for ‘the right to decide’ and a ‘negotiated settlement of the Catalan question’. These positions are close to what Unidos Podemos always argued for in the past years. Opinion polls show a quite volatile picture of voter preferences. Both the anti-capitalist CUP and also the regional Podemos-alliance CatEPC seem to have problems to repeat their scores of September 2015. So, maybe buy a DVD set of Borgen, wait till X-mas or later, and see what will be happening (in the electoral game) …
If you think that such a comment is perhaps too saricastic: well, look at this – the economic divergence of Spanish regions, only regarding GDP 2017 and the respective unemployment rates. This economic and social reality is behind the Spanish nationalist mobilisation drives of the neo-liberal Ciudadanos and the PP mentioned in Jorge Tamames’ thoughtful piece on Jacobin. One of the central slogans of the Catalonian independence movement and parties always was: Spain robs us! Why should a poor worker e.g. in Extremadura or Andalusia support giving more fiscal leverage to Catalonia and the Basque Country (meaning enabling those already relatively rich regions to keep more taxes for themselves)?
This item might backfire on Podemos’ regional electoral alliances – the troubles with Compromis in the autonomous region of Valencia are an illuminating example. That formation (composed of moderate Valencian forces such as El Bloc – the biggest component of that alliance – and IU, Podemos etc.) voted with the neo-liberal Ciudadanos against an agreement of Rajoy with the regional government of the Basque Country (a coalition of the social-catholic PNV and PSOE) on the financing of that autonomous region for the next five years (called the ‘Cupo vasco’). Also, PSOE and UP voted in favour of the ‘Cupo‘. The PP, because Rajoy needed the Basque PNV for getting the Spanish budget for 2016 adopted and hopes for such support further on; the PSOE, because they are the PNV’s regional coalition partner; and Podemos, because Iglesias hopes to win over the PNV and similar regionalist parties to support an ‘alternative government’ of PSOE and UP along the ‘Portuguese model’.
However, Compromis claimed that this deal was further strengthening the already rich Basque Country, leaving not much room for the poorer regions of Spain in the projected talks on the reform of revenue sharing/fiscal equalisation in the Spanish State. El Bloc openly discusses whether to continue the Valencian coalition with Podemos and IU.
That the different ‘minority nations’ or autonomous regions in Spain support each other in ‘solidarity’, has always been a myth. Competition between them for central state funds has been the rule since the transition, and this has been a historically in-built feature of the concept of an ‘integral Spanish State‘. Currently there is mainly a fragile alliance between the richer regions of Catalonia and the Basque Country concerning negotiations with the central government on more (financial and cultural) ‘self rule’. The concept of a pluri-national-state is fine. But without concrete conceptions for overcoming that economic divide between Spain’s regions (fiscal re-distribution and more), the Spanish right will be in a good position to divide and rule further on, to play the game ‘worker against worker’ etc. … On that issue, unfortunately, there is not that much coming from the Unidos Podemos camp – despite all their components’ reflections on the centrality of the ‘social question’ – be it the anticapitalistas ‘class struggle’ or Iglesias ‘transversal plebejan mobilisation’ à la Laclau or Chantal Mouffe.
PESCO and Portugal
Just recently, some more EU countries including Portugal joined PESCO (that is the EU’s structured co-operation on ‘defense and military affairs’ – see also Lexit’s Digest No 16 on the controversies in Portugal on this below). The aim of this operation is to forge a flexible but ever closer EU ‘Defense Union’, see here (update from 11 Dec. 2017). The left wing forces in Portugal still oppose this – see here for the stance of PCP and here for the Left Bloc (video in Portuguese). So the Portuguese toleration model comes under strain of stratgegic disagreements between the PS and its leftist partners on this item, but also on others. These are still not reaching ‘breaking point’ …
On Monthly Review, John Bellamy Foster criticises that “some self-styled socialists have jumped on the eco-modernist bandwagon, arguing against most ecologists and eco-socialists that what is required to address climate change and environmental problems as a whole is simply technological change, coupled with progressive redistribution of resources.” Foster argues for a ‘Long Ecological Revolution’ – an interesting read.
Lexit’s Digest No. 16, 17 November 2017
Social Pillar: Strengthening the EU’s social dimension?
The EU Council officially proclaimed the inter-institutional agreement with the Commission and the European Parliament on the European Pillar of Social Rights at its special summit in Gothenburg on 17 November 2017. Esther Lynch of the European Trade Union Confederation (ETUC) is mildly optimistic about this: “The Social Pillar is not the promised triple AAA Social Europe but it is a threshold of decency that no one in the EU should fall below.” The General director of the European Trade Union Institute (ETUI), Philippe Pochet, is more sceptical, looking at the history of the development of the EU’s ‘social dimension’. For example, and beyond Pochet’s analysis, the European Employment Strategy so much greeted by the centre-left in the late 1990ies soon became a ‘Trojan horse’ to promote labour market flexibility and ‘structural reforms’ across the continent. Pochet’s wishful thinking that there is possibly great (social) potential with the Pillar and the Social Scoreboard can be doubted – just look what ‘powerful actors’ such as French President Macron recently have done to de-regulate labour markets, or his tax reforms benefiting the rich. The reality on the ground in Europe looks bleak: insecure and badly paid jobs on the rise due to neo-liberal ‘reforms’. These were certainly also home-made, but strongly influenced by the EU’s Treaty of Maastricht, the Lisbon-Strategy, the Fiscal Treaty, the European Semester on Economic Governance and the like.
EU Defence Union on track
On 13 November 2017, 23 EU member states signed an agreement on Permanent Structured Cooperation (PESCO) on ‘defence’. Apostolis Fotiadis analyses these developments in the U.S. magazine The Nation and concludes: “The emergence of a military-industrial complex in conjunction with opportunities for the EU to go to war will inevitably have a profound impact on the future of the EU.” German Foreign Policy.com provides interesting information on France and Germany as building the core of the EU’s military-industrial complex. Portugal’s socialist minority government led by António Costa also wants to join PESCO, but missed the launch ceremony in Brussels. The Portuguese Communist Party and the Left Bloc fiercely oppose this move, but the conservative opposition PSD will support Costa. The honeymoon period of Portugal’s left forces seems to be over.
Economy and the future of the euro-zone
As the Commission’s Autumn Economic Forecast 2017 optimistically predicts 2.2 percent growth for the euro-zone, politico points out the weaknesses of the recent economic recovery: “At around 2 percent, the expansion is back in line with the monetary union’s growth rate in the first 10 years of its existence before the financial crisis hit in 2008. But unemployment remains high in the region, wages are stagnating, and productivity is only growing slowly.” So wages are still stagnating? Thorsten Schulten and Malte Luebker of the Hans-Böckler-Foundation (of the German trade unions) some months ago explained why. Philip Arestis and Malcolm Sawyer look at the history of the European Monetary Union and explain the reasons behind the euro-zone’s poor performance.
As the rest of the European Union is waiting for Germany to form a new government, experts and think tanks are urging Merkel to compromise with Macron’s euro-zone reform plans. Jean Pisani-Ferry warns about Germany’s dangerous obsession, Bruegel’s Marek Dabrowski examines the chances of Juncker’s one-speed Europe, and his colleague Emmanuel Mourlon-Druol asseses the Franco-German relations from a historical perspective. All interesting reads, if only to know better what the ‘Europeanists’ are thinking.
Rob Macquarie of the Positive Money Network criticizes the mainstream monetary policy: “The Bank of England’s quantative easing (QE) has resulted in a radical increase in inequality in the United Kingdom.”
The so-called Paradise Papers provided strong evidence that a great number of tax havens are located within the European Union. Social justice NGO’s such as Global Witness rightly call for legislative action of the EU against this, but it is a quite safe bet that not much will happen. Maybe the European Commission will propose a blacklist on some offshore tax havens – but Commission and Council strongly agree that EU member states shall not be named and shamed in that context. Jacobin.mag provided a highly informative and interesting piece on the assassination of Maltese journalist Daphne Caruana Galizia, who accused the wife of Malta’s Prime Minister Joseph Muscat of corruption (linked to evidence from the earlier Panama Papers). Authors Raisa Galea and Michael Grech suggest: “Caruana Galizia’s unparalleled influence and tragic death should not prevent us from critically assessing her legacy and motivation.”
Political analysis: Eastern Europe, Turkey, Greece, Italy, UK
Let’s start with the Czech Republic: Dan Swain provides a very informative overview on the ‘avoidable rise of Andrej Babiš’, on the decline of the traditional Czech centre-left and the Communists. On openDemocracy.net, Benjamin Tallis and Derek Sayer expose – from a liberal point of view – the ‘Iron Curtain of the mind’ of their fellow liberal western commentators: “Much ‘western’ analysis of central and eastern Europe remains rife with prejudices, half-truths and a lack of critical perspective” – also an interesting read.
How ‘new left’ forces in broader Eastern Europe reflect the political situation in that region and their efforts to build social movements and left parties, see here.
Daniel Finn of the New Left Review provides a critical long-term view on the AKP’s rule in Turkey: Erdogan’s cesspit – very recommended. See also Cengiz Gunes informative account on the history and current situation of the Turkish left formation HDP in the latest NLR.
On Greece today, check the concise account by counterpunch‘s author Kenneth Surin.
The regional elections in Sicily on 5 November 2017 were regarded by many pundits around Europe as a test for the Italian general election to be held in spring 2018. Berlusconi’s right-wing bloc won with nearly 40 percent. The former PD administration of Sicily was heavily defeated, achieving only 19 percent of the vote, the Five Star Movement coming second with 34.7 percent. For a crisp summary of the ‘lessons learned’, see The Local.it website (which usually is more concerned with tourism in Sicily, where to eat well and the like). Their indictment: the (Italian) left is a mess.
Finally, on the UK: Julian Sayarer doubts that Labour leader Jeremy Corbyn is promoting a Lexit-strategy (a left exit of the UK from the EU). In his view, this is a ‘centrist fantasy’ of Corbyn’s opponents in the mainstream media – an interesting read. The radical left-libertarian Brexiteers seem to share this view (although for different reasons). On the past and future of Labour’s right wing (not only the Blairites), John Cooper provided an interesting assessment.
Debating Catalunya and the vision of a ‘Europe of Regions’
As a follow-up to Lexit’s Digest Special on Catalunya (October 2017), some perhaps interesting picks are presented here. Firstly, an interesting piece on politico arguing for constitutional change in Spain towards a pluri-national federation. Secondly, an interview with Josep Maria Antentas on the latest developments and perspectives – see here. That the threat of unilateral independence of Catalunya could press the ‘forces of the regime of 1978’ to grant ‘federalist concessions’ to that region, however, does not seem to look very realistic in the light of the recent developments. For a provocative and polemical opposite view on Catalonian independence from the left, see e.g. a piece by John K. White here. Thirdly, Costas Lapavitsas appeals to the Spanish Left (Unidos Podemos and its allies) and the anti-capitalist CUP etc. that “reaching an understanding among them is feasible, particularly as another shambles for the Catalan independence movement would probably lead to the resurgence of the Spanish Far Right – already waiting in the wings.” But how realistic is that perspective of forging a ‘unity of the left’?
The Italian referendum on greater autonomy for its rich northern regions (Veneto and Lombardy) also fuelled quite confuse debates about a Europe of Regions. A social-liberal version of such ‘Eurovisions’ can be assessed here. It’s author from the mainstream Bruegel think-tank promotes an interesting agenda: more Europe (at the top), and then “decentralizing wage bargaining in Italy, because a median wage following median productivity there means lower salaries in the more advanced North and excessive ones in the less developed South, thus giving the competitive advantage to the North that lies behind its trade surplus with the South.” In that logic: promote lower wages in the poorer regions, so that they can become more ‘competitive’ – this is also a vision for building a ‘Europe of Regions’.
EP elections 2019
Well, everybody seems to prepare for that electoral contest. The mainstream parties in the European Parliament plan a big PR-campaign against the ‘euro-skeptic populists’, right or left.
DIEM 25 has its own plans (creating parties here and there, supporting coalitions of forces that support the DIEM 25 platform etc.). All that looks very complicated – see here, and on the respective propaganda in Italy on that (DIEM 25 as the ‘European Podemos’) here (in Italian). Jean Luc Mélenchon’s La France Insoumise also looks for new partners for a European ‘Podemos-like’ Alliance – see here, and also for a view from the PCF here (in French). So, maybe we can expect a still more fragmented European ‘radical left’ in the future…
Lexit’s Digest Special Issue, 27 October 2017
The battle over Catalunya
The unilateral independence referendum in Catalunya on 1 October 2017 deservedly attracted much media attention. About 43 percent of voters in this region participated in it, despite the Spanish Constitutional Court declaring it ‘illegal’, and despite massive repression from the Spanish national police Guardia Civil (900 persons injured) trying to bloc the referendum on orders from Mariano Rajoy’s conservative minority government. About 90 percent of those voting were in favour of secession from the Spanish State. What the other 57 per cent of Catalonian voters want, nobody knows. Opinion polls before the referendum showed that the pro-independence forces could perhaps rally around 45 to 48 percent of Catalonian voters to their cause. Why could the Rajoy government not do what the conservative David Cameron did as the UK’s Prime Minister in 2014 – agreeing to a guaranteed and peaceful referendum on Scottish independence?
It’s about Spanish history (Rajoy’s PP still carrying the heritage of the Franco-regime in its ranks). The PP minority government can again polarize Spanish society at large by ‘defending the poorer regions of Spain’ against the ‘rich and egotistic Catalans’. About 63 percent of Spaniards are opposed to Catalonian secession – here is something to build upon ‘nationwide’ for a contested PP…
Rajoy’s PP is only a minority force in the regional Catalonian Parliament (8.5 percent obtained in the 2015 regional elections). So they do not have to bother about regional repercussions amongst their voter base, which anyhow expects a strong stance against independence. By pursuing the ‘legalistic way’ – appealing to the Constitutional Court, and getting its support – the PP can claim that its actions are about defending the Spanish Constitution of 1978 and generally the rule of law. And thus detract voters from the multiple corruption files facing their party. Last but not least, the PP has the support of the neo-liberal Ciudadanos (C’s), which is even more hard-line than them on centralism and the concept of an ‘integral Spanish State’.
On this line, the PP also could reign in the PSOE for a joint pact to defend the Constitution (the ‘regime of 1978’, so much criticized by Podemos and IU). The PSOE’s General Secretary Pedro Sanchez re-conquered that office again with his ‘No to Rajoy’ in an internal competition against the candidate of the PSOE ‘barones’, Susana Diaz (the regional prime minister of Andalusia). He was also trying to reorient his party towards a more ‘federalist’ perspective (Spain as a ‘pluri-national’ state, constitutional reform etc.; thus accommodating to the slogans of Unidos Podemos; UP). Finally, the PSOE under the ‘leftist’ Sanchez again succumbed to Rajoy: abstaining on UP’s censure motion in June 2017 against the PP minority government; voting no to UP’s resolution on not to activate Articles 155 and 116 against Catalonia in October 2017 etc. The PSOE is not in a shape to form even a mildly ‘Portuguese’ alternative government with UP and some other regionalist partners, although an arithmetic majority in the upper house of the Spanish parliament (the Cortes) for such an option exists. The Spanish ‘centre’, the defenders of the ‘regime of 1978’ – PP, C’s, PSOE – currently stand together to the benefit of Rajoy’s minority government.
The Catalan independentists (Junts pel Si, composed of the liberal PDeCAT, the social-liberal ERC and others, and the oppositional anti-capitalist CUP) in 2015 together gained 47.8 percent of the regional vote. With this they attained an absolute majority of seats in the Catalonian parliament. Their common aim was to unilaterally declare secession from the Spanish State within 48 hours after the referendum of 1 October 2017. This did not happen. The regional Prime Minister Puigdemont (PDeCAT) stated on 10 October that the referendum result is valid, but that independence was suspended in favour of seeking a dialogue with the central government and the international community. This approach led to (mild) criticism from the ERC, and harsher reactions from the CUP.
Background to Puigdemont’s hesitations were threats from the Catalonian business community to re-locate the juridical seats of their companies to other regions of Spain (which many already did, courtesy of ‘fast track procedures’ enabled by central government). Capital is a shy deer, and also in Catalonia not very ‘patriotic’. If many big firms move out, this means a serious erosion of the tax base and of the fiscal strength of an independent Catalonian Republic. Puigdemont also played on gaining time for getting more international support, mediation from the EU-Commission etc. However, the October 2017 EU-Summit fully supported Rajoy’s position, only the Belgian government had some reservations on this. Puigdemont accused Rajoys government of preventing a last-minute deal on solving the institutional crisis. He offered to dissolve the Catalan parliament and call an early election (which PP, PSOE, C’s had demanded earlier on) in order to de-escalate tensions with Madrid. But he wanted guarantees for a fair election (and possibly also about ending juridical prosecution against independentists), which Rajoy didn’t seem to be willing to concede.
Finally, on 27 October the Catalonian regional parliament adopted a declaration of independence (with Junts pel Si and CUP voting in favour, see also here). On the same day, the Spanish Senate (the PP commanding an absolute majority in that second chamber of the national parliament) voted for activating Article 155 of the Constitution (putting Catalonia under control of the central government). As the confrontation between the central government and Catalonia escalates, future twists and turns from both sides are to be expected. Their outcome is unpredictable at this stage.
The next step according to Rajoy’s ‘legalistic’ approach would be to initiate juridical prosecution against Puigdemont and other leading figures of the Catalonian regional government. The problem for Rajoy is: how to enforce compliance of the regional administration in Catalonia (e.g. the regional police force ‘Mossos‘, the financial administration, the municipalities etc.) to the orders of the central state. This looks complicated. If his government ‘overreacts’ with repressive measures, the EU and the ‘international community’ will be very ‘concerned’ (if only about the stability of bourgeois rule in Spain). The latter is the hope of the moderate Catalan independentists – that they can get these international forces ‘in’ to mediate between the central Spanish State and Catalonia.
On the other hand: how loyal is the regional state apparatus to the declaration of an independent Republic of Catalonia? Will further general strikes, demonstrations, civil disobedience etc. suffice to stare the central government down and enable ‘dialogue and negotiations’? In the break-up of Yugoslavia, e.g. the Slovene and Croatian separatists had well armed and trained militias at their disposal (‘hard power’), and diplomatic (and other) support for secession from the Western powers. Concerning Catalonia, this is not the case. The anti-capitalist CUP may strive for a fully-fledged ‘Socialist Republic of Catalonia’, but what this would mean in terms of popular (and possibly military) confrontation with the Spanish State seems to be far from clear. Memories on the run-up to the Spanish Civil War in the 1930ies (the declaration of independence of Catalunya by its regional President Lluis Companys of the ERC in 1934, the following repression, his execution by the Franco regime in 1940) are still alive. No one wants a repetition of these nightmares – currently it is a ‘war of propaganda’ on both sides (the Catalan independence movement on one side, the forces of the ‘regime of 1978’ on the other).
The Spanish Left (Podemos, IU and their regional allies) always took a ‘third position’ in the conflict: yes to a guaranteed referendum on Catalonian independence (‘the right to decide’); no to Catalonian secession and no to the unilateral referendum; yes to a ‘constituent assembly’ and constitutional reform towards a pluri-national, federalist Spanish State, no to activating Article 155 and yes to pursuing a dialogue in order to reach a political solution of the conflict. Their regional alliance En Comu Podem currently is one of the strongest parties in Catalonia. They are warning: if Catalonia breaks away from Spain, there is no perspective for ‘cambio‘ (progressive ‘reformist’ political change) at national level. With the current escalation, this ‘third position’ has been quite sidelined. To achieve a federalist constitutional reform with an absolute PP majority in the Senate – this line is also hard to explain as a ‘realistic perspective’. So the defenders of the ‘regime of 1978’ – despite internal quarrels on how to move on, how to dose a convincing mix of ‘dialogue’ and ‘repression’ – they have their fingers on the trigger.
What follows now, is simply a reading list for all those interested in the development of the battle over Catalonia, focusing on different views from the left.
Update from 2 November 2017: The PDeCAT leaders of the Catalan government fled to Belgium after the activation of Article 155, the ERC leaders stay in Catalonia and face the juridical procedures launched against them there. There is a very excellent analysis by David Broder (one of the editors of the review Historical Materialism) available on the verso blog on the whole spectrum of the battle over Catalunya, see here.
For following and understanding the earlier events, including the divisions on the Left in Spain on Catalunya, see the links provided below.
Andrés Gil interprets Rajoy’s moves on the conflict as a victorious ‘Schmittian reaction’ over ‘Gramscian hegemony’ (in Spanish). Carl Schmitt was a political theorist of the ‘conservative revolution’ in Germany between the two World Wars and later on the ‘crown jurist’ of the Nazi Third Reich. His famous statement ‘Sovereign is he who decides on the state of exception‘ has (analytically) fascinated quite a number of leftists – so this is a point of reference in Gil’s thought provoking comment.
The director of ‘el diario’, Ignacio Escolar, provides an illuminating analysis of the failed attempts towards ‘dialogue’ (in Spanish) between Puidgemont and Rajoy, and on whether the declaration of independence was suspended or not.
On the history of the battle over Catalonia, Luke Stobart (pro-independence) provides a very informative overview, from the Spanish Congress of 1812, the Civil War in the 1930ies up till today.
Josep Maria Antentas piece (written before the 1 October referendum, also pro-independence) is very informative about the more recent rise of the independence movement, its social composition and its aims.
An interesting interview on jacobin.mag with Lluc Salellas (a member of the CUP’s national executive) provides interesting insights on the thinking and strategy of the pro-independence anti-capitalists.
Podemos MP Txema Guijarro explains his party’s views on alternatives for Catalonia (against independence).
Very sharp and illuminating is the controversy between Alberto Garzón (leader of Izquierda Unida) and Pau Llonch (CUP): Debating Catalonia, marking the differences in theory and strategy between the Unidos Podemos camp and the CUP to the point.
The battle over Catalonia seems to inspire a lot of ‘experts’ in the broader ‘progressive camp’ on ‘thinking bold’ about ‘future Europe’. Want some examples? Here you go: Daphne Büllesbach and Lorenzo Marsili ask on open democracy.net: Catalunya and beyond – What’s after the nation state?. Thomas Seibert (of DIEM25) dreams of “the city as cosmopolis, and it is the cause of a federation of cities as a cosmopolitan federation: a federation of individuals.” He concludes with regard to the Catalonian crisis: “The good part of this is that in the cosmopolitan trajectory path and goal always coincide. Spain is dead, this EU is dead.” Sounds quite ‘Marxian’: the Paris Commune, the idea to organise France as an alliance of self-governed communes in the late 19th century etc.; an alliance of emerging ‘rebel cities’ today – so towards a vision of a cosmopolitan ‘commune state’? But what about Marx’ analysis on the failure of the Paris Commune?
Ulrike Guérot (of the European Council for Foreign Relations) argues in a similar manner for a ‘European Republic’ conceived as a ‘Europe of regions’ (in German): dissolving the nation states, empowering the 50 to 60 regions in the EU as its consitutive units, governed by a federal ‘European democracy’ on top (see her simplistic scheme here). Citing her Austrian brother in arms, the writer Robert Menasse (winner of the German book prize 2017): “Nation is fiction, region is home“. Apart from the question whether such utopias are desirable, viable or not: Considering bourgeois rule, the existing coercive apparatus of nation states, imperialism, class and power relationships – all these are no questions for them. Their ‘model solutions’ simply boil down to convincing the current elites about changing their present course by appeal and encouraging ‘democratic discourse in civil society’. Maybe good intentioned – but quite naive, isn’t it?
Well, have a good read on all of this – there are a lot of conflicting arguments amongst the lefties and ‘progressives’ …
Lexit’s Digest No. 15, 27 October 2017
October 2017 EU-Summit: hard right consensus on ‘security matters’, persistent divisions on ‘future EU’
The leaders of the EU 27 noted that recent negotiations on ‘Brexit’ were insufficient to come to an agreement with the conservative UK government of Theresa May. They expect concrete offers by the UK government on the ‘Brexit bill’ (payment obligations of the UK to the EU budget before leaving). If these can be settled, discussing future arrangements on trade etc. can be dealt with next. The German government in particular demonstrated a will to ‘flexibility’ in that respect, hoping that the financial terms of the EU-UK ‘divorce’ could be agreed by December this year. For an informative account on all this, see here.
The EU 27 governments all seem to agree on further steps to be taken on shunting ‘Fortress Europe’, expanding the EU’s military capacities, strengthening NATO commitments, streamlining its development and trade policies along these lines etc. On ‘security matters’, there is already a hard right turn in the making (the ‘centre’ adapting to the agenda of the ‘right wing populists’).
On ‘future Europe’ – one-speed or multi-speed EU – well known divisions remain (see e.g. Lexit’s Digest No 14 on this). On these items, look here and here for a mainstream ‘psychological’ interpretation on France vs. Germany (containing perhaps a bit of truth). And here for an analysis on Eastern European EU governments’ policy stances on that. On ‘future EU’, there is still ‘uneven and combined development’: a ‘consensus’ right wing shift on ‘security items’ of any sort, and a ‘muddling through approach’ on anything else …
EU election year 2017
The German general election on 24 September 2017 was quite disappointing for the major parties. Angela Merkel’s CDU achieved its worst result since 1949 (26.8 percent, a loss of 7.4 percent), her Bavarian sister party CSU lost even more than the CDU (achieved 38.8 percent in Bavaria, lost 10.5 percent in that region). The Social Democrats (SPD) also came down to a historical low (20.5 percent) – for an overview, see here. Germany’s progressive community (social-liberals, greens, lefties etc. – the ‘Gutmenschen’) is shocked by the result of the hard-right AfD (12.6 percent). However, this is much in line with advances of such formations elsewhere in the European Union – Germany being a ‘late-comer’ in that respect.
How did this happen? Mathew D. Rose (editor of braveneweurope.com) tries to explain why – see here. Loren Balhorn reflects on what this means for Germany and in particular for the Left Party. Leandros Fischer and Mark Bergfeld analyse the strengths and weaknesses of DIE LINKE’s strategy.
As long as negotiations on forming a coalition in Germany take place, the ‘EU partners’ will have to wait. This could take quite some time – December 2017 is the preliminary deadline according to Merkel. The usual German (economic) dominance on EU affairs is weakened in between, responding on Macron’s proposals on renewing the Franco-German axis included. Whether a Jamaica coalition (CDU/CSU, Greens, Liberals) will emerge or another Grand Coalition (CDU/CSU and SPD – for the latter to prevent a ‘crisis of the state’), remains to be seen. All in all – bourgeois government in Germany (an arrangement on ‘centrist’ policies, in continuation with neo-liberalism) is very likely.
The early election on 15 October 2017 in Austria was hyped as some writing on the wall for the future of the EU. Concerning some of its aspects (an increasingly xenophobic discourse across the whole mainstream political spectrum) – this is true. But this happened already earlier on e.g. in the Netherlands (Rutte’s Liberals and the Christian Democrats trying to outflank Wilders Freedom Party on talking ‘tough’ on immigration and Islam, quite successfully). The EU’s ‘centre’ parties already adopted measures for blocking both the ‘Balkan route’ and the ‘Mediterranean Sea route’ for refugees, and also for sharpening internal security legislation to ‘combat terrorism’, secure border-regimes and the like (as indicated in earlier issues of Lexit’s Digest). All this happened before the elections in Austria. It is pretty clear that the political ‘centre’ is co-opting the xenophobic agenda of the hard right to stabilize ‘normal bourgeois’ governance in Europe, both at national and EU level.
During the whole year of 2016 and up to March 2017 the hard right Austrian Freedom Party (FPÖ) was leading in the polls. However, on 15 October 2017 they came third (with a remarkable result of 26 %; only somewhat below their record result in 2000 with their historical but deceived leader Jörg Haider, at that period leading to coalition with the ÖVP which lasted up to 2007). The Social Democrats came in second (SPÖ; 26.9 %) and the Conservatives first (ÖVP; 31.5 %). Social Democrats and Conservatives are principally open to a coalition with the FPÖ. Such is the state of things: three more or less equally strong political blocs, all biased on ‘checking and reducing migration’. The mainstream Politico-website provided some informative analysis on this, see here, and recommends a rightward shift of policies to Germany’s conservatives following the ÖVP’s example. For a leftist analysis from jacobin.mag, see here. Also, an interesting piece by Wilhelm Langthaler from Euro-Exit Austria (in German) here.
The Social Democrats of the Czech Republic suffered a devastating defeat at the recent general election on 21 October 2017 – from 20.5 percent down to 7.27 percent of the vote. Also the Communists lost nearly half of their former voters (from 14.9 percent to 7.8 percent). The traditional left lies in ruins, the winner is billionaire Andrej Babiš (the Czech Trump) ANO Party. Interestingly, the Czech Pirate Party came in third with 10.8 percent of the vote. The European Pirate Parties have a genuine ‘social-liberal’ political profile: clear on data protection, digitalization, civil rights, education etc. – but open to compromise with neo-liberal economic policies. These formations often weakened the ‘traditional left’. But they withered away when social conflict moved more to the fore of national political debates. They seem to be a ‘transitional’ phenomenon – ‘progressive IT-literate’ youngsters against the ‘resignative’, IT-illiterate older generation of all sorts. So, the Czech Republic has its own ‘cross-class modernization’ debate with this …
In Portugal however, the recent local elections seem to indicate a renaissance of Social Democracy there, as João Paulo Batalha reports. See also this authors very interesting piece about the corruption of the Portuguese ‘old guard’, former Socialist Prime Minister Socrates amongst them.
On Macron’s neo-liberal labour market reform, Cole Stangler assesses the chances of the French trade unions and the political left to stop it.
Finally, the Italian Parliament passed a new law on electoral reform – the so called ‘Rosatellum bis’. 36 per cent of all mandates to the Camera and the Senate (232 MPs and 116 Senators) shall be distributed according to first-past-the-post voting, the remaining 64 per cent by proportional representation, with a 3 percent threshold for parties and a 10 percent threshold for electoral alliances. The Five-Star-Movement (M5S) and the small left opposition criticize the law because it is favouring electoral alliances. Meanwhile M5S is watering down its critical stance on the EU, and the hard right leader of the Lega, Matteo Salvini, is open to talk with M5S about forming a future government …
British Labour and the Corbyn factor
‘What Jeremy Corbyn can teach the left in Europe’, according to Politico, is this: he “reassembled an electoral coalition between the metropolitan left and the working class, which has withered away in many other European democracies.” Red Pepper editor Hilary Wainwright suggests that a transformed Labour Party is now a movement preparing for power. Alex Nunns provides a very informative account of the ‘fascinating’ Labour Party conference in Brighton.
Varoufakis’ New Deal; Discussions on a PlanB for Europe
In an op-ed for the U.S. magazine ‘The Nation’, Yanis Varoufakis and economist James K. Galbraith present DIEM25 proposals for a ‘New Deal for Europe’ – quite similar ideas as their earlier ‘modest proposal‘ (criticized by Eric Toussaint). Interestingly, in a recent interview on euractiv.com, Varoufakis posed as a friendly advisor to French President Macron – generally sharing his federalist elements, including a trans-national list for the 2019 European elections. He recommends to Macron to adopt De Gaulle’s ’empty-chair tactic’ to put pressure on Germany to re-launch the federalist process. DIEM25 and Macron: the beginning of a beautiful friendship, soon en marche side by side?
Olivier Tonneau and Sophie Rauszer write about the 5th PlanB conference in Lisbon, the earlier events and the debates of that spectrum.
IMF, Trump’s foreign policy, Kurdistan
U.S. economist Mark Weisbrot dissects the recent IMF World Economic Outlook.
Edward Hunt analyses U.S. President Donald Trump’s foreign policy record so far and concludes: ” Trump’s outbursts notwithstanding, establishment Washington appears to have made significant gains in its ongoing effort to maintain Pax Americana.”
Patrick Cockburn explained early in October 2017 why the referendum on Kurdish independence was a miscalculation, and feels proven right with his earlier prognosis after the latest moves by the Iraqi army – both are interesting reads.
Lexit’s Digest Special Issue, 30 September 2017
Geopolitics: EU, USA, Eurasian Union, China & BRICS
French President Emmanuel Macron delivered his speech on the future of Europe on 26 September at the Sorbonne University in Paris. As everybody expected, he repeated his demands on the reform of the euro-zone (budget, finance minister etc.). But he also strongly promoted ‘puissance Europe’ – the EU as a big global player (militarily, fight against terrorism, greater involvement in Africa etc.) Politico comments: “Macron seemed to take on the mantle of past French presidents such as Charles De Gaulle and François Mitterrand, who saw Europe as the vehicle that would one day replace France’s diminishing power in world affairs. Macron sees Europe as gradually taking over more defence responsibilities because of the U.S.’ diminishing influence and fighting back against China in trade matters. “Only Europe can give us some capacity for action in today’s world,” he said.” See also Politico’s more in depth follow up on these issues here.
On the Defence Union, NATO and EU, the EU’s plans for Africa (not only about tightening Fortress Europe), the conflicting U.S. and EU approaches on sanctions against Russia etc. see the earlier issues of Lexit’s Digest. It is no secret that important factions of the French and German business communities (e.g. the German Committee on Eastern European Economic Relations) would like to end EU sanctions against Russia as soon as possible.
In that context it may be interesting to look at what is going on behind the Eastern frontier of the European Union. Pepe Escobar earlier on enthusiastically described the cooperation of the Eurasian Economic Union (Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan) with Central Asian countries and China on the New Silk Roads as leading to an Eurasian Big Bang of intensified economic integration of the East. Euractiv recently provided a very interesting interview with Kazakhstan’s Deputy Minister of Foreign Affairs on the ‘two revolutions’ going on with that project, also showing how the EU is involved in this. See also an interview by the deputy director of the Kazakhstan Institute for Strategic Studies on the approach of the Central Asian countries on Eurasian cooperation. So does all that mean that the U.S. is in decline and growing integration of the ‘Eurasian heartlands’ (possibly including the EU) on the march?
Alfred McCoy of the University of Wisconsin-Madison provided a highly interesting historical overview of the geopolitical battle for control of the Eurasian continent starting with Mackinder’s ‘Great Game’ before the First World War up to present days. He is deeply convinced that this time China will have the upper hand. In a more recent piece, McCoy argues how China could even win World War III. Artyom Lukin of the Far Eastern Federal University Vladivostok is more sceptical: “Despite the seemingly inexorable rise of Chinese power, it would be premature to proclaim the advent of a new Eurasian empire.” Salvatore Babones of the University of Sydney holds the view that for the EU, the real ‘middle kingdom’ is still the U.S.. Citing Chinese General Qiao Liang, Pepe Escobar on the contrary thinks that “the real challenge to the United States is not China; it is the United States itself, and the United States will bury itself. (…) Through the virtual economy, the United States has already eaten up all the profits of capitalism“. In his view, the ‘Chinese Dream’ of a de-dollarized global economy will most probably come true. In a similar vein as McCoy and Escobar, Federico Pieraccini argues that the US is already in decline as a military superpower, pointing to the joint containment strategy of Russia and China against the U.S. from Syria, Ukraine, Quatar to North Korea.
For many on the left, the cooperation of the BRICS countries is regarded as a breakthrough towards a more peaceful multi-polar world ending U.S. dominance. Zhao Minghao provides an optimistic outlook on the outcome of the recent BRICS-Summit held in Xianmen. Patrick Bond of the University of the Witwatersrand in Johannesburg however takes a very sceptical view: Capitalist ‘deglobalisation’ could crack the bloc even if internal geopolitical strife eases. Peter Koenig acknowledges that China and Russia are the real driving forces of the BRICS process, whereas the current governments of India and Brazil follow the dictates of Wall Street and the IMF. Nevertheless, he is optimistic about BRICS future and explores the steps to be taken after Xianmen.
Hopefully, the controversial views provided in this special are an interesting read for followers of Lexit’s Digest. It is noteworthy that even the leftist enthusiasts for a multi-polar world order, for BRICS and the New Silk Roads etc. do not consider issues such as their impact on or contribution to environmental sustainability, social justice, human emancipation as something to be reflected upon within the context of geopolitics. They cheer expanding pipeline-projects (oil and gas), high-speed road networks, new airports and so on as economic ‘progress’, as if there was no climate change, and do not ask any questions about workers rights, democracy and so on. Pretty sad …
Lexit’s Digest No. 14, 19 September 2017
Juncker’s recent ‘State of the Union’ address was widely applauded by Europeanist media outlets. For example, Politico was very impressed by the Commission President’s ‘bold vision for Europe’: One speed. One currency. One president. No to a multi-speed Europe, all 27 Member States shall join the euro-zone and the Schengen agreement rather quickly after Brexit. EU enlargement shall continue, in particular with the Balkan states. How the governments of these entities ‘adapt’ to the Greek style ‘labour market reforms’ expected by the EU from such poor peripheral countries – see an interesting interview on LeftEast on this with Aleksandar Matković (a researcher at the Institute for Philosophy and Social Theory at the University of Belgrade) here.
In that general context it is interesting to see that Andrew Watt – formerly a senior researcher at the European Trade Union Institute in Brussels and now working at the Hans Böckler Foundation of the German trade unions – was very positive about Juncker’s proposals. Equally interesting, his colleague Daniel Seikel, also of the Böckler Foundation, argues for the opposite of Juncker’s vision: A Flexible Union and an Open Constitution. Whereas Watt seems to believe that the Commission wants to improve the EU’s social policy stance (e.g. by its initiative on the European Pillar of Social Rights etc.), his colleague Seikel provided a scathing critique of that project.
Nobody will be surprised that the governments of the EU’s core do not take Juncker’s euro-vision seriously. Also, the Nordics (Sweden, Denmark) and some Eastern European governments (e.g. Poland, Hungary) have no intention at all to join the euro-zone. On how to reform the euro-zone, Paris and Berlin are still at odds. Other governments of EU member states are concerned about Macron’s ideas for EU ‘treaty change’. Those on the southern and eastern EU peripheries fear to be sidelined by a possible Franco-German core. Reactions to this are both ‘centripetal’ and ‘centrifugal’: some think it is better to align with the ‘EU core’, others think it is better to go for a selective confrontation with the core, simply demanding more structural funds monies for themselves and a further liberalisation of the EU Single Market.
On these issues, the divisions within the Eastern European Visegrad Group (Hungary, Poland, Czech Republic and Slovakia) are an illuminating example: the governments of the latter two aim at moving closer to the EU’s core (France and Germany). The current governments of Poland and Hungary, however, insist on their differences with Macron and Merkel – based on a right-wing, authoritarian discourse on ‘national sovereignty’. How to disentangle the Gordian knot on euro-zone reform, multi-speed Europe etc. wished by German and French governments and capitalists, will remain a tricky question for the different national ruling elites in the EU even after the German general election on 24 September 2017 …
Fiscal Money – an alternative to Euro-Exit?
Yanis Varoufakis argues that the creation of fiscal money “would give Italy, France, and other eurozone members much needed fiscal space, and possibly provide a foundation for a revamped eurozone with interlocking domestic fiscal euros, rather than parallel currencies, playing a stabilizing macroeconomic role.” The concept of fiscal money has been strongly promoted by Enrico Grazzini and others in Italy on MicroMega and other left-leaning reviews. What fiscal money is about see e.g. articles by Grazzini here and here. Interestingly, the idea of a parallel domestic currency of some sort has been taken up by a quite unexpected figure: Silvio Berlusconi …
Brexit and the Labour Party
The first of the many expected Brexit bills has recently been approved by the UK parliament. The Labour Party rows back and forth on Brexit: initially, ‘access to the EU Single Market’ was its most important political demand, then in his election campaign Corbyn was very critical of the Single Market, and now again Labour is calling for a ‘soft Brexit’. John Weeks is not convinced and comments: “The belief that the health of the British economy depends on trade policies with Europe or anywhere else comes directly from neoliberal ideology, that “openness”, globalization of trade and capital flows, bring prosperity.” In an effort to counter Theresa May’s strategy to re-invigorate the UK as a major free trading force in the ‘Anglosphere’, Juncker recently proposed fast-track deals of the EU targeting Australia and New Zealand as first priorities. It’s ‘dog eats dog’, as usual …
The centre can (still) hold …
Perry Anderson’s hypothesis about political dynamics in Europe was again confirmed by the results of the recent general election in Norway. The centre-right coalition lost in voter support, but can continue with a reduced majority. Before the election, Jacobin.mag provided two interesting interviews with leaders of Norwegian parties to the left of social democracy: Snorre Valen of the Socialist Left Party (from 4 up to 6 percent, 11 seats), and Marie Sneve Martinussen of the ‘Red’ Party (also up to 2.4 percent, 1 seat).
As regards Germany, the ‘extreme centre’ may also hold. The current election campaign is quite boring, as conservatives (CDU/CSU) and social democrats (SPD) do not differ very much on substantial issues. Angela Merkel’s CDU is expected to be the clear winner. The four lesser parties (the right-wing AfD, the liberal FDP, the Greens and DIE LINKE) are daily changing their rank in the polls, mostly in the 7 – 11 percent range. So mainstream media hype is this: Who will come third? ‘Who whom’ (Lenin) is already settled – Martin Schulz and the SPD will have no chance to become the leading party in Germany and to claim the post of chancellor. The much narrower question ‘Who with whom’ is an open race till the end. The scramble of the lesser parties for third position is also a phoney exercise for some: for the Liberals and the Greens, it is about strengthening their quest to become coalition-partners of Merkel’s CDU. For DIE LINKE and the AfD, it is about the slot to ‘lead’ the opposition in the German parliament against any such constellation of the ‘extreme centre’, from very opposite angles.
If pollsters are right, there are only two options for forming a government after that election: another grand coalition (CDU/CSU and SPD), or a so called ‘Jamaica coalition’ (according to the colours of the Jamaican flag – black for the CDU/CSU, yellow for the FDP, and Green). The German Greens recently demonstrated that they are open to this option, in order to prevent another grand coalition. Anyhow – grand coalition or Jamaica in Germany – this is all about ‘defending the extreme centre’ at the heart of the European Union (meaning the supremacy of German capital as its dominating force). What may these German coalition-options mean for ‘Europe’ and for solving the current woes of its ruling classes (e.g. on reform of the euro-zone etc.)? Sophia Besch of the mainstream Centre for European Reform provided an interesting analysis on this (although one of her scenarios, a possible red-red-green alliance R2G, has not been a realistic option in 2017 from the start …).
Looking at France, Macron’s plans on the reform of French labour-law have been met with extra-parliamentary opposition on the streets – about 500 000 people striking and manifesting all over the country on 12 September 2017, on the call of the CGT trade union and others. This is quite the same turn-out as with the protests against the earlier ‘loi El Khomri’ on labour market deregulation at the end of Hollande’s Presidency. There will be another such event on 23 September, on the initiative of Melenchon’s La France Insoumise (see the comment by Roger Martelli on this, in French). Whether all these social protests will be strong enough to block or derail Macron’s ‘reform’ remains to be seen. Will these actions work as a catalyst to forge the political and the social opposition in France closer together? If so, this might become a starting point for rallying a quite fragmented French left opposition against Macron’s regime.
Next in the ongoing European election cycle (2015 – 2018) will be Austria and Italy (the latter in 2018, after failed attempts to reform its electoral law in order to clear the way for early elections in autumn 2017) – both to be considered soon. After those events, a balance sheet on that cycle (and the supposed challenges of right- or left-wing ‘populism’ to the system) might be drawn …
The European Court of Justice (ECJ) recently upheld the EU’s right to oblige member states to take in refugees. The government of Hungary rejects the ECJ’s judgement. Germany’s Finance Minister Wolfgag Schäuble warns against tough sanctions for Hungary. No wonder – in real life the EU is already implementing similar anti-migration policies as promoted by Hungary’s President Viktor Orbán. Macron and Merkel are very busy to set up a roadmap for intensifying border controls in Africa. The EU also plans steps towards the militarization of its development aid.
Against that background, it may be interesting to read the new brochure by activists of Moving Europe, a network on migrant solidarity work, on ‘Resistance along the Balkan route’. In the London Review of Books, Daniel Trilling discusses the present state of affairs and alternatives to the EU’s migration policies: Should we build a wall around North Wales?
History: Greece and the euro-zone crisis
Eric Toussaint of CADTM provides an interesting and extensive review in three parts of Yanis Varoufakis recent book ‘Adults in the Room – My battle with Europe’s deep establishment’, which provides the former Greek finance minister’s view about the reasons behind the capitulation of Tsipras’ government in July 2015. See part 1 here, part 2 here and part 3 here. Highly recommended, as it is not simply a book review, but a devastating critique of Varoufakis account and his own role in the Greek debacle.
On counterpunch, there is an interesting piece by Leonidas Vatikiotis on Andreas Georgiou, the former head of the Greek statistics office, Elstat. He illegally inflated both the Greek public deficit and public debt figures for the period before the Memorandum of 2010 and was sentenced by a Greek court of appeal for breach of duty in August 2017. Vatikiotis demonstrates: The road to the Greek hell is paved with false EU and IMF statistics.
Lexit’s Digest’s summer break is over, and here we go again.
Lexit’s Digest Special Issue, 24 August 2017
After Macron – political perspectives
Politico surveyed the first 100 days of Macron’s Presidency: ‘Coming down to earth with a bump’. Macron had pledged to revolutionize French policy, but his labour market reform and likewise neo-liberal projects of his government are simply a continuation of the authoritarian course of the late Hollande Presidency. This is the same transformismo as described by Tomasi di Lampedusa in his famous novel Il Gattopardo (The Leopard): ‘Everything must change so that nothing changes’.
Meanwhile a number of leftist authors are trying to make sense of the results of the second round of the French legislative elections and its aftermath. David Broder analyses an ‘uninspired victory’, Perry Anderson soberly states that ‘the centre can hold’, Diana Johnstone dissects the hollowing out of French style ‘representative democracy’. Pierre Rousset provides a highly critical review on Mélenchon and his movement La France Insoumise, and Roger Martelli reflects about the future of the French left. The former presidential candidate of the French Socialists, Benoît Hamon, quit the party and launched a new movement. It remains to be seen whether the severely battered Parti Socialiste may survive and how the political forces to its left will deal with their current fragmentation.
Against the European wide trend of a declining and even collapsing Social Democracy, the UK and Portugal seem to stand as examples for its renaissance. In the latest New Left Review, Daniel Finn takes a closer look at the Portuguese ‘toleration model’ (PS minority government supported by the Left Bloc and the Communist Party): ‘Luso-anomalies’. Equally interesting, an interview with the Left Bloc’s leader Catarina Martins on her assessment of the Portuguese experiment.
On the UK, Alex Callinicos is highly optimistic: “Whatever the fate of Labour under Corbyn, we are participating in a renewal and expansion of the radical left in Britain whose effects will be felt for many years to come.” Lee Jones and Peter Ramsay are more sceptical: “Blair may have gone, but the Labour Party both in its approach to police security and its wider approach to social security remains very much a party focused on the politics of safety rather than the politics of self-government.”
In Spain, the General Secretary of the PSOE, Pedro Sanchez, tries to stabilize Social Democracy and to avoid that an internally divided party meets the same fate as the French Socialists: a left turn in the making? Josep Maria Antentas is skeptical about the ‘new PSOE’ and reflects about the future strategy of Unidos Podemos: ‘after the censure motion’. See also his interesting piece on the Catalonian independence referendum scheduled for 1 October 2017. Eoghan Gilmartin provides an illuminating balance sheet of what the left alliance Ahora Madrid did achieve in two years of governing Madrid.
Finally, as the ‘extreme centre’ (Tariq Ali) did hold in most of the EU countries in the 2016/17 election cycle so far, what strategy for strengthening and renewing the left? Is ‘left populism’ (Chantal Mouffe) of the sort of La France Insoumise or Unidos Podemos the adequate way to grow? Or building a ‘connective party’ that strongly links with trade unions and social movements, as the co-chair of Germany’s DIE LINKE, Bernd Riexinger, advises? Is promoting popular sovereignty the key to a renaissance of the left in Europe, as Costas Lapavitsas argues?
What about the trade unions? On their current state, there is an excellent survey by the European Trade Union Institute: ‘European Trade Unions in a time of crises’.
Lexit’s Digest No. 13, 24 August 2017
After Macron’s victory in the French legislative elections in June 2017, the mainstream ‘Europeanist’ intellectuals are very hopeful about a political re-alignment between the EU ‘Big Four’ (Germany, France, Italy, Spain) to address and ‘resolve’ the bloc’s main political woes as they perceive them: reform of the euro-zone, foreign policy, and further developing the single market after Brexit. The Bruegel think tank’s view on all this is: ‘Europe must seize this moment of opportunity’. An interesting read, as knowing the arguments of the opponents is always useful.
- Reforming the euro-zone; Brexit
Firstly, pundits hope that France, Italy and Spain put pressure on the German government on ‘reforming’ the euro-zone: euro-bonds, a finance minister, a budget etc. – all the former shibboleths propagated by Hollande, Macron, Renzi etc. and supported also by the SPD candidate for chancellor Martin Schulz in Germany are expected to be pushed forward after the German elections in September 2017. For a concise summary, see here. Angela Merkel already claimed that she is looking forward to these discussions in a positive spirit. German Finance Minister Wolfgang Schäuble seems to think about a possible compromise. Whether and on what the Big Four may agree is an open question, to say the least.
The Bruegel think-tank is also very active on conceptualizing on these issues. On the one hand, it discusses the pro’s and con’s of Schäuble’s alternative proposals for a European Monetary Fund: ‘We need a European Monetary Fund, but how should it work?’ On the other hand, it asks questions concerning the separation of a euro-zone budget from the general EU-budget: ‘Eurozone or EU budget? Confronting a complex political question’.
It is also interesting to see that similar perspectives are propagated from some forces on the left. John Grahl of the steering committee of the Euromemo-Group (‘European Economists for an Alternative Economic Policy in Europe’) recently posted a discussion paper on these issues: “a programmatic section advocates a democratisation at the European level, centred on the introduction of a modest but significant budgetary capacity under the control of the European Parliament, or of the sub-set of parliamentarians representing eurozone members.” Also, a study by the transform! network examines these issues of EU Economic Governance, available for download here. Both papers might be an interesting read for Lexit-supporters, if only to know and assess the arguments from the ‘Europeanist left’ more in detail …
Secondly, official negotiations on Brexit are under way and are very complicated. For an informative overview on what is at stake in these talks, Politico provides some essential information. The UK government wishes to go ahead to trade talks very soon. The EU is reluctant on this (settle ‘divorce items’ first) – see here. How to deal with the question of the UK border to Northern Ireland? An informative piece on the juridical and technical issues involved is available here.
- Global and European Economy – analysis and perspectives
To start with a quite mainstream analysis on the global economy: Carmen Reinhart reminds her fellow economists that ‘Recovery is not Resolution’. Recent forecasts from IMF, OECD, EU Commission etc. predict that Europe is on the road to renewed economic growth, faring better than the USA. However, non-performing loans from the financial crisis still overshadow these optimistic scenarios: “In Europe, the high level of non-performing loans continues to act as a drag on economic growth, by inhibiting new credit creation. Furthermore, these bad assets pose a substantial contingent liability for some governments.” True – hence the re-shuffling exercises on bad loans in Italy and elsewhere, contradicting the EU ‘Banking Union’ principles and the EU official propaganda on these items. This is the obvious ‘Achilles heel’ of the present EU ‘financial markets regulation’ – and all this may come back with a vengeance in the future.
However, there are also deeper problems of European capitalism, as Austrian economist Joachim Becker explained in a two part interview with ‘Left East’, see here and here. The European Trade Union Institute (ETUI) recently published a study that may be read as accompanying evidence to Becker’s findings: A working paper on the automotive industry in Southern and Eastern Europe since the 1990ies (which was mainly based on German foreign direct investment).
- The European ‘Refugee Crisis’ – ‘Fortress Europe’ re-strenghtened
Firstly, there is a crisp summary on recent developments on this issue available at German Foreign Policy.com, roughly explaining the approach taken by the June 2017 European Council meeting, see here. Currently, closing the ‘Lybia route’ is the most pressing issue for the EU, confronted with reports from the Italian government that the situation in Italy becomes more and more untenable. So secondly, for an informative summary from euractiv.com on the EU Commission’s ‘migration action plan’ on this, see here. Thirdly, for a more principled discussion on the stance taken by the Italian PD-led government and the EU see Richard Brodie’s piece on ‘Fortress Europe’s last stand?’. What about the earlier ‘Balkan route’ concerning Greece (and the EU – Turkey deal)? Stathis Kouvelakis earlier on provided a very scholarly argued review on ‘Greece, the frontier, and Europe’ (in French) – very much recommended to readers. As tensions between the EU and Turkey are sharpening, this issue might come back to EU-elites with a vengeance.
- Geo-strategy: Trade, Russia sanctions, Military and War
Maybe the only positive thing from the Trump-Presidency is that negotiations on TTIP (Transatlantic Trade and Investment Partnership) between the EU and the USA have been ‘frozen’. However, the EU is very active in seeking alternative routes for neo-liberal ‘trade and investment agreements’ with other countries. Ironically, also the leadership of the Chinese Communist Party is now one of the most passionate promoters of ‘free trade’. An informative summary on the EU’s activities and agenda in that field is available here.
In his election campaign, Trump pledged to dump NAFTA. That latter ‘free trade agreement’ had been rightly criticized by US, Canadian and Mexican trade unions and leftists. However, Trump is now promoting a re-negotiation of NAFTA. US-businesses (and ‘their’ workers) have been treated unfavourably by this agreement, so his tale goes. It is time to reshape it in line with his ‘America First’ agenda, meaning to ‘reform’ NAFTA at the dispense of Mexican and Canadian workers etc. See a short piece on this by Ethan Earle here, a more in depth investigation of the changes demanded by the Trump administration by Pete Dolack here, and more general considerations by socialist project (Canada) here. For a quite illuminating account on why Trump changed his earlier position on NAFTA, see counterpunch’s John Feffer reporting here.
EU trade policy is on a similar track – e.g. demanding from African countries to further open up their markets for EU imports and investments. Here it is about conditioning EU development aids to ‘restricting migration’ and establishing ‘effective’ border control regimes. And all this based on a ‘bi-lateral approach’ putting the EU in an advantageous position vis à vis the poorer African economies. The EU’s rhetoric’s is not so blunt as Trump’s – it is camouflaging its strategy as one aiming to improve ‘sustainability and resilience to crises’ on the African continent, see e.g here. So – imperialism is a thing of the past?
4.2. US-Sanctions against Russia
The US Congress and Senate recently approved new sanctions against Russia. President Trump lamented a bit about these decisions. For Republicans and Democrats alike (who supported the sanctions), all this is symbolically about punishing the hated Putin regime in Russia. But effectively, this decision of Congress was very much in line Trump’s ‘America First’ Strategy. The bi-partisan upshot on this is: ‘domesticate’ the EU and promote the sale of US liquid gas to Europe.
For a short overview from the mainstream EU euractiv-website, see here. How the EU reacted and sent their lobbyists to the US to water down these sanctions, see an informative report by politico here. Finally, all that ‘Russia sanctions business’ seems to be mainly an affair of ‘inter-imperialist rivalry’ between the USA and the EU (concerning the prospects of ‘their’ businesses). All this falls short of a return to nationalist capitalist protectionism, which either side is still afraid of. See Diana Johnstone’s analysis on all this here (although: why giving any mercy for Deutsche Bank, these manipulators and criminals?). Another crisp analysis by Pepe Escobar on this here.
4.3. Military and War
In June 2017 Lexit’s Digest reported about the EU striving for a ‘Defence Union’ (= enhancing and rationalizing its military capabilities). German Foreign Policy.com recently provided a crisp summary on developments in this field after the June EU Council meeting, see here. Equally interesting in this context is a crisp ‘mapping exercise’ by Bruegel author Alexander Roth on ‘The size and location of Europe’s defence industry’. However, the EU’s present capabilities in this respect are still very much below those of the U.S.. If at all, the EU might expect to be able exert some control in a distant future (still foremost by its economic power) over the regions in its African (from South-Sudan to Tunisia) and Eastern European ‘neighbourhoods’ (such as Moldova, Georgia, Ukraine etc.), if anything.
Concerning more immediate global-scale war threats, the conflict between the U.S. and North Korea intensified. Most recently, North-Korea’s President Kim Jong-un retreated from his earlier threat to attack the U.S. base at Guam (which conservative media interpreted as a success for US-President’s Donald Trump’s ‘tough stance’). What the ‘Fire and Fury’ rhetoric’s of Trump might have implicated – see here a piece by Sheldon Richman reminding of the 1950ies Korea War. Also think-piece by Richard Falk and David Krieger on how to tackle the North Korea crisis might be an interesting read.
Lexit’s Digest No. 12, 14 June 2017
The future of the European Monetary Union
The European Commission recently published its long awaited reflection paper on the deepening of the economic and monetary union, discussing several options. For a critical review of its proposals, see a piece by Steffen Stierle and Paul Steinhardt here (in German).
The mainstream Europeanists are dreaming about a realignment of France and Germany to reform the euro-zone. But to find agreement on the next steps to be taken looks very difficult. Guntram Wolff of the Brussels based Bruegel think tank asks: What could a euro-area finance minister mean? An interesting read, as the author argues for harder limits on national borrowing etc., exposing all the mainstream stuff on further EU governance without democracy. The current German government wants to make receipt of EU cohesion funds monies conditional on implementing ‘structural reforms’, that is, tightening the existing arrangements even further.
The Economist magazine ironically asks: What is federalism? Whereas the US-discussion on this is about devolving powers downstream, the mainstream vision of a federal European Union is about giving Brussels more centralized and undemocratic powers. The Eurogroup already is a telling example for such a lack of democratic accountability…
The finance ministers of the euro-zone could not agree at their meeting on 22 May 2017 on how to proceed with the debt relief for Greece etc. They will most probably disburse the next loan tranche to Greece soon, but not take any measures at debt relief or providing access for Greece to the European Central Bank’s quantitative easing program. French economist Michel Husson dissects the latest events and attacks the imbecile violence of the creditors (in French). Even the mainstream Politico-website now considers that Greece is nothing than Germany’s de-facto colony …
Eastern Europe‘s troubles
In many Eastern European member states, multinational supermarket chains are wiping out small shopkeepers, and big agribusiness is grabbing more and more farmland. Efforts by Eastern European governments to limit these developments are viewed by the European Commission as violating EU Single Market rules and countered with infringement procedures. However, cheap and easily exploitable labour from those countries is welcome, in particular Romanians. The de-regulation of labour law for example in Hungary is also no matter of concern for the EU.
EU Commission attacks worker’s rights to strike
On 8 June 2017, the European Commission presented its new initiative on air traffic: Aviation – An Open and Connected Europe for Jobs, Growth, Investment and Global Leadership. Amongst other things, it proposes restrictions on air controller’s right to strike – see here. The European Trade Union Confederation (ETUC) is certainly right to criticize that proposal. However, permanent appeals to the Commission to clearly state if it is for or against ‘Social Europe’ are pointless. The historical record of that institution since Maastricht is pretty clear in that respect, despite all its earlier rhetoric about the ‘social dimension of the internal market’, or currently on creating ‘a pillar of social rights’ etc..
EU ‘Defence Fund’, NATO
A multi-billion euro Defence Fund will be created out of the EU budget as part of a larger ‘European Defence Action Plan’. Commission President Jean-Claude Juncker is pressing ahead with all this. Former CIA analyst Ray McGovern of the US-based Veteran Intelligence Professionals for Sanity thinks that the West already spends too much on its military and asks: Will Europe finally rethink NATO’s costs? The opposite is the case – the dear ‘Europeans’ want to increase their ‘defence budgets’ to NATO’s target of 2 percent of their respective GDP, and also are keen on developing the EU’s military capabilities.
Wolfgang Streeck recently gave an interesting interview to Aleksandar Matković on capitalism, democracy and the future of the European Union, and a likewise interesting one on similar issues here. Furthermore, a discussion between Geoff Eley (Univ. of Michigan, USA), Leonardo Paggi (Univ. of Modena), and Wolfgang Streeck on the EU crisis and Europe’s divided memories, which will be published by the Italian journal Ricerche Storiche. Walden Bello examines in a working paper how social democracy’s Faustian pact with global finance unravels (in the European Union).
Lexit’s Digest Special Issue, 14 June 2017
Mapping exercises: EU election year 2017
In the March 2017 issue of Le Monde Diplomatique (LMD), Perry Anderson explained ‘Why the system will still win’. In the European Union, protest movements and parties of the right and the left challenged the neo-liberal consensus. But – he wrote – “the established order is far from beaten in either country, and, as Greece has shown, is capable of absorbing and neutralising revolts from whatever direction with impressive speed.”
In a similar vein, LMD’s Serge Halimi remarked after the French Presidential election: “France’s right and left have been taking turns applying the same policies since 1983. Now whole sections of both are in the same government and soon will belong to the same parliamentary majority. All you can say is that things are clearer. A corrupt Spanish right clinging on to power, the neoliberals’ victory in the Netherlands, further terms in government predicted, perhaps incautiously, for the conservatives in the UK and Germany: all suggest that last year’s period of anger may have run out of steam for lack of political outlets.”
So let’s take a closer look at recent elections and political developments.
The snap election on 8 June 2017 called by Theresa May in the hope to dump Jeremy Corbyn and the Labour Party turned out badly for the Tories, them losing their absolute majority of seats. Labour’s old-social democratic election manifesto proved to be highly popular. Michal Rozworski points out that Labour’s plans to pursue democratic models of ownership are the most radical aspect of Corbyn’s program. Guardian columnist Owen Jones, who only some months ago argued that Corbyn’s political vision is ok, but that he should step down as party leader, now sent his apologies.
The Guardian claims that ‘a unique alliance of enthused younger voters and previous non-voters combined with older austerity-hit, anti-establishment Ukippers delivered a 10-point rise in Labour’s vote compared with two years ago, to 40%. This is just below the 41% secured by Tony Blair in his 2001 landslide victory.‘ However, Brendan O’Neill (editor of spiked magazine) points out that Labour ‘gained the most ground in 2017 in seats with the largest concentrations of middle-class professionals and the rich’ – the rise of Labour without Labourism.
With Theresa May now depending on the support of Northern Irelands DUP to form a government and command a narrow majority in the UK parliament, what will happen with the peace process and regional government in Northern Ireland, with Brexit and the negotiations with the EU? With the Scottish National Party having been reduced in this election, what are the prospects for the SNP’s project of Scottish independence? There are quite uncertain times awaiting the UK with a hung parliament …
Pundits across the EU are euphoric about the ‘landslide victory’ of the Macron camp (his new party La Republique En Marche and the older liberal MoDem) in the first round of the French legislative elections on 11 June 2017. However, only 48.71 percent of registered French voters went to this vote at all – a huge majority abstaining. This is what is left from western ‘representative democracy’ in France’s ‘first past the post’ electoral system: with about 32 percent gained from less than half of registered voters, an absolute majority of parliamentary seats can be obtained on 18 June 2017 for the Macron camp. No questions asked about that. It will be lauded as the astounding success of an energetic ‘modernizer’ that serves the renewal of the European Union.
Both the ‘radical left’ (La France Insoumise FI; PCF) and the radical right (Front National and others) saw their earlier dynamics from the first round of the presidential election evaporate. Against the 19.6 percent obtained by Jean-Luc Mélenchon in April, his FI only obtained 11 percent, the PCF 2.7 and the extreme left (Lutte Ouvriere) 0.77. Taken together, the ‘radical left’ now is on a par with Marine Le Pen’s FN (13.2 percent in the first round of the legislatives, 21.3 percent in the first round of the presidential contest). However, FI (and PCF taken together) almost doubled the score of the ‘left of the left’ (as against the 6.9 percent obtained in the 2012 election by the now defunct Front De Gauche). The big loser this time was the Parti Socialiste (less than 10 percent), and the conservatives also took a major hit.
Looking at the abstention rate, the polling firm Ifop found out that 61 percent of former Green, 50 percent of PCF and FI, 50 percent of FN and 48 percent of the PS voters did not go to the vote at all (see here, page 9 in particular).
The historian of the French Communist Party (and no longer a member), Roger Martelli, analyses these outcomes more in detail (here in French; update 24 June 2017: English version here). For the campaign of Mélenchon’s FI and the divisions on the left, see this interesting interview with FI’s spokesperson Hadrien Clouet.
Partial local elections were held in Italy, the first round also took place on 11 June 2017. Their outcome may be not so important as such – but with negotiations about electoral reform at national level and plans for an early general election in autumn 2017 perhaps interesting. Beppe Grillo’s Five Star movement (M5S) took a severe hit at those local elections, whereas the ‘centre’ (PD) held its position and the bloc of the Right (Forza Italia, Lega Nord, Fratelli D’ Italia) gained moderate increases, mostly the Lega and the extreme right FdI (see here – in Italian).
PD, M5S and Forza Italia agree ‘in principle’ about the envisaged electoral reform, hyped as importing the ‘German stability model’ to Italy. Voters shall have two votes for both chambers of the Italian parliament (camera of deputies and senate) – one for the constituency, one for a party list. A 5 percent threshold shall keep out minority parties and lists. However, in contrast to the existing ‘German model’, the overall composition of parliament shall not be adjusted according to the ‘party vote’ (meaning a proportional representation system with a 5 percent barrage against small parties). In essence, 50 % of seats shall be distributed according to a ‘first past the post’ relative majority system in the constituencies, and the other 50 % proportionally according to the results obtained by party lists. Thus, so the three major Italian party blocs hope, ‘stable small coalitions’ may emerge, improving the governability of Italy.
Renzi as the newly elected General Secretary of the Democratic Party (which is not social democratic, but ‘extreme centre’ along similar lines as the US Democrats or Macron’s alliance) hopes to become Prime Minister again in a coalition with Berlusconi’s Forza Italia, and if necessary co-opting some minor ‘centre-right’ political forces. Grillo dreamt about a ‘toleration agreement’ with the anti-euro far right (Lega, Fratelli) with his M5S at the helm of government.
Also here are interesting developments in sight: the traditional left (e.g. PRC, Sinistra Italiana) and the centre-left split-offs from the PD standing no good chances to jump over the 5 % threshold, a comeback of Renzi and Berlusconi seems possible.
No elections are scheduled here yet. But the comeback of Pedro Sanchez as General Secretary of the Spanish Socialists (PSOE) – he won the contest with his ‘No to Rajoy’ campaign – creates concerns within national and EU elites that new troubles may be waiting in the wings. Unidos Podemos (UP) recently tabled a motion of no confidence in the Spanish parliament to oust the acting conservative minority government, but the effort failed. UP appeals to the PSOE to try again with a joint motion for a no confidence vote. In particular, the planned Catalonian independence referendum in October might again provide for some ‘up shake’ of the Spanish political system.
Currently there is manoeuvring from all sides of the political spectrum. If the PSOE should again abstain for fear of derailing the Rajoy government, ‘things are clearer’ in Spain, as Halimi put it for France. If Rajoy should be ousted, it will be hard times for PSOE, UP and others to form an ‘alternative government’ along the ‘Portuguese model’ favoured by Sanchez and UP. With Rajoys conservative PP commanding an absolute majority in the Spanish Senate, and strictly opposing any amendments to the Spanish constitution opening even a slight leeway for a referendum on Catalonian independence – the conflict on this issue would fully fall on such a ‘centre-left’ government lacking any powers for constitutional change.
On the forthcoming general election in Germany in September 2017, there will be more on Lexit’s Digest later on. Currently, it does not look that any fundamental change is on offer – the most realistic outcome may be another ‘grand coalition’ of Social Democrats (SPD) and Conservatives (CDU), perhaps even a coalition of CDU and the Liberals (FDP). The more interesting thing is the evolution of Germany’s DIE LINKE. It’s leadership promotes a ‘red-red-green’ coalition and meanwhile tries to promote the party as the ‘saviour of the middle classes’ (of course, also stressing that the lowlier sections of society at least should have minimum wages, minimum pensions etc., so that nobody is ‘left alone’ and will have to live in poverty). For some takes on DIE LINKE’s identity crisis, see here. However, this is not any more about how to react to the former rise of the rightist AfD (xenophobia, racism etc.), but on DIE LINKE’s general political profile. Self-proclaimed ‘realists’ want to make that party more ‘compatible’ for entering a (very unlikely) R2G centre-left government.
Also, recent events in Finland are quite telling: the right wing True Finns split, the majority of their MP’s nevertheless supporting the conservative-liberal government.
So the preliminary upshot is this: at least in the remaining EU core (France, Benelux, Germany, Italy), the ‘extreme centre’ will most probably be capable of holding ground. The southern and eastern peripheries may be causing problems here and there, but no fundamental challenges emerging from this. Brexit will be dealt with this way or another. Anderson and Halimi are quite right: As long as fear and disenchantment trump anger, ‘the system will still win’.
Lexit’s Digest No. 11, 12 May 2017
2nd Round of the French Presidential Election 2017: Analysis, repercussions
The second round of the French Presidential election on 7 May 2017 went even better for Emmanuel Macron as pollsters predicted: Marine Le Pen scored only 33.9 percent of votes cast (the polls saw her at 40 percent), Macron won with 66.1 percent. However, abstentions, nil and blank votes representing in total 34 percent of registered voters marked a record high compared to any French Presidential election since 1969. So Macron got the support of 43.6 percent of French registered voters, Le Pen 22.4 percent respectively.
For more in depth analysis, see a study by the French polling firm IFOP (on abstentionism, and how the voters of presidential candidates from the first round voted in the second – see in particular page 27; in French). And also two analyses by Roger Martelli – the first one in English, and an additional complementary one looking at the Front National and Mélenchon’s La France Insoumise (in French).
Le Pen battered – will this mean a decline of the radical right in France? Sylvain Laurens warns that the National Front isn’t dead (despite internal clashes after that defeat). Stathis Kouvelakis explores in an interview how the political landscape in France has changed (the two-party system is finished) and which prospects there are for the left in the upcoming legislative elections in June 2017.
For more (and controversial) opinions and proposals on the French Presidential election see the verso-blog here. For example, French philosopher Alain Badiou thinks that voting serves for nothing. However, Aude Lancelin (a journalist formerly at L’ Obs) wrote a piece on the rise of Macron as the candidate of the French stock exchange – highly recommended for its in depth analysis on the connection between a changing media landsacpe in France, the ‘investors’ having bought them up, Macron and Hollande – a masterpiece of ‘historical materialist’ investigation. We also highlight a piece by French sociologist Razmig Keucheyan on the strategy for the left to win hegemony. Finally: Mélenchon’s La France Insoumise and the leadership of the French Communist Party (PCF) did not find agreement on joining forces for the legislative elections (article in French) – to be followed up in the next Digest.
Mark Weisbrot (Co-Director of the U.S. based Center for Economic and Policy Research, CEPR) provided very interesting op-eds on the link between EU and French economic policy and the outcome of the Presidential elections – see here and here.
What about incoming President Macron, the EU’s agenda and Germany? Commission President Juncker keeps up the pressure on France to cut public spending. Germany’s minister of finance Wolfgang Schäuble cautiously supports Macron’s idea to create a parliament for the euro-zone – but he backtracks from his and former ECB President Trichet’s earlier proposals to move towards a euro-zone budget and a finance minister, both proposals which Macron promoted during his campaign.
Schäuble now prefers the creation of a European Monetary Fund to be developed out of the current European Stability Mechanism, which in his view should have oversight over member state’s fiscal and economic policies. Thus the European Commission would be sidelined on these issues – as the Juncker ‘political’ Commission was not willing to apply its sanctioning powers provided for by the six-and-two packs (European Semester) on EU economic governance against ‘debt sinner’ member states. It remains to be seen how this evolves further – with no enthusiasm in the Council in sight for either version of ‘euro-zone-reform’. On the biography, political role and thinking of Schäuble, see an interesting piece in the latest issue of New Left Review: The soul of the euro-zone.
Europe‘s political forecast: turmoil?
The mainstream website politico is very concerned: economically, the EU might recover slowly. But politically, things might become ever more volatile. Their question is: can the ‘extreme centre’ (Tariq Ali) remedy the dissatisfaction of their (actual and former) voters and offer an alternative to cope with the effects of neo-liberal globalisation? The main threat according to this narrative: ‘populist upsurge’ in Europe. On this mainstream notion of populism, see an interesting piece by Jacques Rancière here.
Wolfgang Streeck soberly analyses the ‘Return of the repressed‘, and finds that with Trump, Brexit etc. we are in a sort of ‘interregnum’ as conceptualised by Gramsci’s hegemony theory earlier on: “Antonio Gramsci’s term ‘interregnum’, a period of uncertain duration in which an old order is dying but a new one cannot yet be born. The old order that was destroyed by the onslaught of the populist barbarians in 2016 was the state system of global capitalism. Its governments had neutralized their national democracies in post-democratic fashion so as not to lose touch with the global expansion of capital, putting off demands for democratic and egalitarian interventions in capitalist markets by conjuring up a global democracy of the future. What the still to be created new order will look like is uncertain, as is to be expected of an interregnum. Until it comes into being, according to Gramsci, we have to accept that ‘a great variety of morbid symptoms will appear’”. Maybe – and there are parallels to Perry Anderson’s analysis in LMD on why the extreme centre still upholds. Whether there will be only an ‘interregnum’ and where Europe and the world will go from that – we shall see.
Looking closer: Spain, Portugal, Italy, UK
Spain‘s Prime Minister Mariono Rajoy tried to construct an alliance with the social-catholic PNV from the Basque country to secure the state budget for his current minority government (not so much austerity, some more funding for Euskadi). So far, the PNV reacted positively. The Socialists (PSOE) remained out of these deals, as they currently face an internal leadership contest. The party is very divided: the coming PSOE leadership primaries may become a hard showdown between the followers of former PSOE General Secretary Pedro Sanchez and Susana Diaz, the current regional prime minister of Andalusia. The lead of Diaz is very shaky (she received 59.390 verified supportive signatures from PSOE members for her candidature; Sanchez 53.117, and Paxti Lopez 10.866.). Sanchez favours a ‘Portuguese model’ to topple Rajoy’s conservatives, Diaz defends the de-facto grand coalition PP-PSOE. So what are the prospects for Podemos in this conjuncture, asks Manolo Monero?
Concerning Portugal, some Social Democrats around Europe (mostly on the left wings of these parties) regard the minority PS government tolerated by the Left (Bloco and PCP) as a model for modestly breaking out of the neo-liberal consensus (contraption) and recovering strength for Social Democracy – see for example here. From the ‘radical left’ in Portugal, the benefits of this model (though admitting that it has blocked a further impoverishment of the Portuguese population so far) are increasingly questioned – see here (from the Bloco).
Concerning Italy, everything seems to be on track for the ‘extreme centre’ to continue. Firstly, Matteo Renzi was re-elected in a primary as leader of the Democratic Party (PD) with 70 percent of votes cast. Secondly, the centre-left split-offs from the PD (Bersani, D’ Alema etc.) do not fare very well in the Italian polls, and neither does the newly formed Sinistra Italiana. With the ‘social democratic’ wing of the PD gone, Renzi seems to have a free hand to press for early elections in October 2017 (or a bit later) and go for a coalition of his PD and Berlusconi’s Forza Italia. The main opposition force in Italy is Beppe Grillo’s Five Star Movement. The traditional left – the PCI once was one of the strongest Italian parties – is eradicated as regards parliamentary representation.
The European Council and the European Commission agreed on guidelines for the Brexit negotiations with the UK (see here and here). First settle the accounts with the EU budget, then move on to a trade deal is their principal message. The critical website German Foreign Policy.com provides interesting insights on Berlin’s special role in this. If the recent partial local elections in the UK set the trend for the general election on 8 June 2017, hard times will come for Jeremy Corbyn’s Labour Party. Richard Seymour argues that also hard times will come for Theresa May. Corbyn’s former press officer Matt Zarb-Cousin is still optimistic for Labour. We will know more only after 8 June …
The Greek debacle continued
On 2 May the European Commission, the ECB, the ESM and the IMF announced to have come to an agreement with Tsipras’ Greek government on further ‘reforms’: a new round of pension cuts, privatisation of the energy sector, tax hikes and further labour market deregulation. There will be no debt relief for Greece before 2018, and this option is conditioned on the ‘successful implementation’ of the agreement. Anyhow: both the IMF and the EU creditors do not offer debt forgiveness, but only lower interest rates and longer maturity etc. for Greek bonds. CADTM provides an interesting overview on the odiousness of Greek debt. Economist Michael Hudson comments on the new austerity measures: it’s class war pure and simple.
Interestingly, the creditors insist on labour market de-regulation, although the IMF found out that there is no evidence that such ‘structural reforms’ have any positive impact on increasing the economy’s growth potential. More on this is provided by a new publication of the European Trade Union Institute (ETUI): Myths of employment deregulation. ETUI also offers interesting information on labour market and pension reforms in the EU-28: ReformsWatch.
EU financial regulation, ECB quantitative easing
The European Commission proposes to deregulate rules introduced after the financial crisis on derivatives. It’s mere bubblenomics – as before the financial crisis it is argued that financial sector deregulation will save costs and help to boost the economy. However, the opposite happened: The interaction of banks and insurance corporations with shadow banking entities led to the amplification of risks and spillovers which were transmitted across sectors and national borders. An interesting report about the interconnectedness between EU banks and shadow banking entities can be found here. Still a good read on the origins of the financial crisis is Robert Brenner’s 2009 essay ‘What is good for Goldman Sachs is good for America’.
For nearly ten years now the European Central Bank (ECB) massively injected liquidity by purchasing sovereign bonds and corporate bonds – its quantitative easing (QE) strategy. Recently the ECB openly admitted that its QE program has increased the richest citizen’s wealth. Clément Fontan and Stanislas Jourdan provide a critical analysis on this and demand ‘QE for the people’.
Lexit’s Digest No. 10, 25 April 2017
Where is France going?
The first round of the French Presidential election on 23 April 2017 roughly went as pollsters predicted: Emmanuel Macron came in first with 24 percent, Marine Le Pen second with 21.3 percent, followed by the conservative François Fillon with 20 percent and leftist Jean-Luc Mélenchon with remarkable 19.6 percent. The crisis of the French Socialist Party is now very obvious – its candidate Benoit Hammon received only 6.4 percent of the vote. If pollsters are again right, Marine Le Pen has no chance to win in the second round on 7 May 2017.
In Diana Johnstone’s view, national sovereignty was the main issue of that election. Mélenchon’s La France Insoumise could become the rallying point of the French left. For more background on that movement, see here and here. French society is deeply divided into four major political camps (Front National, Conservatives, Macron’s liberals, Mélenchons left), each garnering around 20 to 25 percent voter support. For an analysis of the new situation, see Roger Martelli’s ‘radiographie‘ (in French; similar short English version here). We shall see how the leftist forces and also Macron’s movement En Marche will regroup for tackling the legislative elections in France scheduled for 11 and 18 June 2017.
Next showdown in the UK
UK prime minister Theresa May recently called a snap general election for 8 June 2017 in order to get a strong mandate for the forthcoming Brexit negotiations. In most opinion polls, the British Conservatives have a lead over Corbyn’s Labour Party of about 20 percent. “The disparagement and backbiting of Corbyn has come from the Blairite remnant in his party as much as it has come from the Conservatives and their megaphones in the media“, writes Kenneth Surin (Duke University, North Carolina). Richard Seymour already argues that “the British left’s task isn’t to win the next general election — it’s to fight for the survival of the Labour Party itself.” Lee Jones and Peter Ramsay deplore Labours performance on Brexit: “the last nine months have been wasted in pointless wrangling over whether to respect the vote, and who gets to pull the Article 50 lever, rather than on the terms of Brexit.” Labours recent announcements on its ‘alternative Brexit strategy‘ do not provide much reasons for optimism either …
Germany: Martin Schulz, R2G and DIE LINKE
In a recent essay on leftist strategy, Michael Brie and Mario Candeias of the Rosa Luxemburg Foundation argued that Germany’s DIE LINKE should offer to tolerate a minority government of Martin Schulz’ Social Democrats and Greens along the Portuguese ‘model’ (Socialists, PCP, Left Bloc). Hopeful references to Rosa Luxemburg’s notion of ‘revolutionary realpolitik‘ and Gramsci’s hegemony theory however can not ignore that currently there is no mood among Germany’s voters for a change of government: 51 percent of voters still prefer a grand coalition, against only 26 percent favouring a coalition of SPD, Greens and DIE LINKE (R2G). Current polls also do not signal an arithmetic majority for R2G. Loren Balhorn provides a critical analysis of the SPD’s trajectory and questions the durability of the ‘Schulz-effect’, and Sahra Wagenknecht is testing the SPD candidate. Florian Wilde, also of the Rosa Luxemburg Foundation, draws a sobering balance sheet on the participation of ‘radical left’ forces in governments in Europe.
EU austerity: Greece, Italy, France
The Greek government of Alexis Tsipras this month already bowed to new demands by the Troika on further austerity and ‘structural reforms’ – but it is still not clear whether the IMF will stay on board. The IMF is concerned about the credibility of targets being maintained over the medium term. If there is no agreement until July 2017, Greece might default on its debt … Equally, Italy’s government has given in to EU pressure and agreed to cut its budget deficit by an extra €3.4 billion.
Also interesting in this respect: a recent report from the U.S. based Center for Economic and Policy Research (CEPR) concluded that policy constraints imposed on France by the European authorities, including the International Monetary Fund (IMF), are likely a significant drag on the French economy that limit options for increasing economic growth and decreasing unemployment.
Some picks on Finland, Bulgaria, Hungary, Serbia, Turkey
What happened to the right-wing populist True Finns after their participation in government? An interesting piece on this by politico can be found here, and Tatu Ahponen concludes: ‘True Finns, False Hopes‘. In Bulgaria, the extreme right ‘United Patriots’ are set to form a coalition with the right wing GERB – the next authoritarian government in Eastern Europe emerging. Leftist philosopher Gáspár Miklós Tamás comments on the situation in Hungary and the closing down of the Central European University in Budapest. On the protest movements in Serbia after the presidential election, jacobin.mag offers two interesting pieces by activists (see here and here).
Justus Links provides an interesting analysis of the recent constitutional referendum in Turkey. An opinion piece by three authors on jacobin.mag suggests: “If Erdoğan continues to test the limits of his power, it will hardly be long before the power structure supporting him collapses.” Patrick Cockburn predicts: A Turkey divided by Erdoğan will become prey to its enemies.
Lexit’s Digest No. 9, 3 April 2017
Brexit officially launched
On 29 March 2017, Theresa May triggered the Article 50 procedure for the UK leaving the European Union with her official letter to Council President Donald Tusk. The Council’s response has already been drafted, to be adopted at Brussels on 29 April 2017: first deal with the ‘divorce’ as such, then negotiate about future arrangements. Politico surveyed the positions of EU member state governments: whether to take a soft or a tough line on the UK in the negotiations. Pundits claim that the EU 27 would be even ready for letting the UK leave the EU without an agreement, should negotiations fail. This ‘tough talking’ was replaced by a more conciliatory EU rhetoric only a few days later (see here).
The regional government of Scotland is mounting up pressure for a second referendum on independence, see here (and also here for more background on the Scottish National Party’s strategy on this). For an interesting opinion piece by Patrick Cockburn on nationalisms within the UK state and Brexit, see here. Like Cockburn, Irish Times columnist Paul Gillespie also envisages a deepening crisis of the UK state as a result of Brexit. He speculates about Irish re-unification and the prospects of a United Ireland and an independent Scotland creating a joint confederation – enjoy.
Spain’s conservative government is very concerned about Scottish demands for independence, which are further aggravating the conflict over the secession of Catalonia from Spain. The German government wants to reassure Spanish Prime Minister Mariano Rajoy on safeguarding the unity of the Spanish state. The Spanish government in return takes a wait-and-see stance on Scottish independence. In Merkel’s view Spain will be needed as a close ally in the ‘Big Four’ of the EU. However, the German government takes a quite opaque position on Scotland (for a critical analysis see here). So much for ‘Unity in Diversity’ …
The ‘Rome Declaration’ and ‘Future EU’
Some minor nuisances irritating the other EU leaders had to be tackled with – statements by Alexis Tsipras’ Greek government and by the Polish government that they might not sign up to the EU 27 consensus statement celebrating the 60th anniversary of the Treaty of Rome. However, finally the EU 27 adopted the ‘Rome Declaration’ unanimously at the Summit on 25 March 2017. See for an interesting report on this here.
Essentially, there is not much new in that declaration – references to the issues of the Bratislava roadmap (fighting terrorism, tightening border controls, investing in defence etc.), the usual EU-elite verbiage on commitments towards a social Europe (but look more closely at the ‘structural reforms-speak’ on this in the text) etc. None of the conflicts disrupting the Union have been resolved – see e.g. on migration policies here and here.
On the much discussed multi-speed Europe, there is only a small opening so far: “We will act together, at different paces and intensity where necessary, while moving in the same direction, as we have done in the past, in line with the Treaties and keeping the door open to those who want to join later.” Using the possibilities of the Lisbon Treaty as regards enhanced co-operation etc. – this seems to be it. The least common denominator on all controversial issues is: ‘solutions’ on those may come in the next 10 years.
The current focus is on the outcome of more short-term developments (French and German elections in 2017, stability of the current de-facto grand coalition arrangement in Spain, next elections in Italy 2018). Thereafter we shall see whether or not the current ‘Big Four‘ hypothesis might hold – that Germany, France, Italy and Spain may converge as dominating powers of an EU core, standing together to shape the ‘Future EU’ along compromise-lines agreed between them to safeguard the interests of their respective elites and continuous neo-liberal bourgeois rule in general within the EU.
Reactions from some prominent figures on the pro-EU left (‘Remain and Reform’) on the Rome Declaration are very interesting. See a piece by DIEM-25 front man Yannis Varoufakis here. Paul Mason, the much acclaimed author of ‘Post-capitalism’, recently made a heartbreaking intervention on Social Europe magazine, claiming that his ideas point out a realistic path towards European reneweal – enjoy. Mason initially promoted a Left Exit from the European Union, but during the campaign on the Brexit-referendum he argued that this was not the right time to do it in the UK. There is also a piece by Podemos MEP Miguel Urbán from Spain (supporting a Plan-B-approach) on the Rome Declaration here. So far: manyfold soul-searching exercises on the Left after ‘Rome’ …
Concerning the Treaty of Rome as such, what is there to be celebrated? Dissecting the myths of both right and left on the origins of European integration and the role of its ‘founding fathers’ such as Jean Monnet and Robert Schuman, Oisín Gilmore critically examines the ‘roots of the European Union’ – that is the history of the creation of the European Economic Community (EEC) after World War II.
Geopolitics: EU, US, NATO – ending confrontation with Russia?
The critical website German Foreign Policy.com analyses the background of the ‘Rome Declaration’s’ orientations on ‘Defence’, which it considers as preparing for an EU-Army with Germany and France at the helm. In that respect, Germany is also increasing its ‘defence co-operation’ with Romania.
What about US-President Trump’s earlier statements that NATO is ‘obsolete’ and that he would try to make a deal with Putin’s Russia?
At his recent visit to NATO headquarters in Brussels, U.S. Secretary of State Rex Tillerson re-assured the Europeans of a strong U.S. commitment to NATO and called for strength and unity in dealing with Russia’s President Vladimir Putin. Trump and Tillerson support Montenegro’s accession to NATO, and the US-Senate overwhelmingly voted in favour on this (for a short overview see here and here, for more background here). Finally, Brian Cloughley provides an interesting analysis on ‘the beneficiaries of conflict with Russia’.
So NATO’s eastward expansion is still in full swing also under Trump, but the US and the EU blame Russia for political interference in the Western Balkans. An interesting opinion piece by a former minister of Tony Blair’s government, Denis MacShane, points to internal power struggles of Trump-style leaders in Macedonia, Albania, Bosnia and Kosovo rather than Russia as the real ones to be blamed. About the recent elections in Bulgaria, there was a similar hype: the ‘pro-Russian’ Bulgarian Socialist Party could win – the EU could be duped. On the outcome of the elections and Bulgaria’s recent political history see an interesting piece by Jana Tsoneva here.
Adding to the EU’s and NATO’s worries, Turkey’s President Recep Tayyip Erdoğan announced that he will review relations with the EU after the 16 April 2017 constitutional referendum. On Germany’s geopolitical interests and Turkey, see here. For a short report by the Turkish NGO Academics for Peace on the repressive situation in Turkey and a call for solidarity see here. Michael Brenner (Professor of International Affairs at the University of Pittsburgh) looks at the changing Great Game in the Middle-East related to all this.
2017 Presidential election in France; speculations about an emerging ‘anti-systemic’ alliance in Italy
Currently, Emmanuel Macron is the candidate in the French Presidential election most favoured by the mainstream media and EU elites. From the standpoint of pro-EU liberal centrism, Charles Grant (the director of the Centre for European Reform) puts Macron in a line with past ‘reformers’ such as Tony Blair. He supportively describes Macron’s neo-liberal reform-agenda and portrays him as the potential saviour of the European Union and the Franco-German tandem. His opinion-piece ‘The meaning of Macron’ therefore is an essential read … Macron’s chief economic advisor is Jean Pisani-Ferry of the Brussels based think tank Bruegel, see more on this here.
In Lexit’s Digest No. 7 we pointed out the interesting analysis by Roger Martelli, predicting that with Mélenchon at the left and Macron at the liberal centre, a re-composition of forces in France is emerging, possibly ringing the death-bells for Mitterand’s Parti Socialiste (PS) as we knew it. Recent developments seem to prove Martelli right: the former PS Prime Minister Manuel Valls now openly calls to vote for Macron (and not for the official PS-candidate Benoit Hammon), a greater number of PS parliamentarians already defected to the Macron camp. However, a dissident French analyst explains why – despite all the hype on Macron – Marine Le Pen might nevertheless have a realistic chance to win in the second round. We will know more after 7 May 2017 …
Looking at the campaign of Jean-Luc Mélenchon (JLM), it is interesting to see how the mainstream Politico-website tries to present him to become the demolition-man for what is left of the PS on the one hand. And how on the other hand, he supposedly is very close to Marine Le Pen’s Front National on rejecting globalisation, the current EU etc. – heavy differences between both forces on migration duly acknowledged. A ‘red-brown’ alliance between the French ‘left of the left’ and the FN might be possible on such anti-globalisation and anti-EU programmatic grounds, so goes Politico’s spin.
The ‘progressive’ French journal Marianne also criticized JLM’s stance on ‘Europe’ – here is a rejoinder (in French) on that from a working group of La France Insoumise (France Untamed) – the collectif Citoyens pour un Peuple souverain (which drafted most of the JLM campaign proposals on EU matters). ‘Eco-socialism’ (even the light-brand of it à la JLM) and rightwing-protectionism (à la Donald Trump and Marine Le Pen) are not quite the same, to say the least …
In a similar vein, Politico speculates about an emerging ‘anti-systemic’ alliance in Italy in the run-up to possible elections in 2018 – this time between Beppe Grillo’s Five Star Movement (M5S) and the extreme right forces of Salvini’s Lega and the neo-facist Fratelli d’ Italia. An interesting read, nevertheless (and if it’s only about the ‘art of propaganda’). For an earlier analysis on the history and trajectory of M5S, see here.
Mainstream pundits always claim that ‘left’ and ‘right’ populisms converge on almost everything, against democracy and western values. As regards the right, see here for a critical analysis by Alexandre Afonso and Line Rennwald. About the underlying concept of ‘populism’, see here for a very thoughtful earlier piece by Marco D’ Eramo (once a journalist for the Italian daily Il Manifesto) on this.
Oxfam Report on (also European) Tax heavens
Oxfam recently published a report about (mostly legal) tax-avoidance schemes by banks – both within the European Union and outside. The 20 banks analysed there declared 26% of their profits in tax havens, but just 12% of their revenue and 7% of their employees. They declared €628 million in tax havens where they employed no staff and €383m of profits on which they paid not a single euro in tax.
The report also focuses on European tax havens, like Ireland and Luxembourg, where five banks (RBS, Société Générale, UniCrédit, Santander and BBVA) managed to book profits higher than their revenues. For example, at €39m, Société Générale’s Ireland profits for 2015 were more than four times higher than its €9m revenue. For further information and the report, see here.
Lexit’s Digest Special Issue, 16 March 2017
Political Forces in Europe, Geo-strategy after Trump
From about 2012 to 2016, the European Left Party hyped a domino-theory, claiming that a ‘left-turn’ in Europe could be within reach: beginning with the Dutch Socialist Party rising in the polls towards 20 per cent, Syriza becoming the dominant political force in Greece, Podemos and Izquierda Unida in Spain, the Left Bloc and the PCP in Portugal, Sinn Féin in Ireland and the Red-Green Alliance in Denmark to follow. All of them having a stronger say in the formation of national governments, and creating more leaverage for Social Democracy and Greens in Europe to end austerity. We know about the outcomes.
In 2017, the right-wing populists in Europe propagated the same narrative for their lot: after Victor Orban in Hungary, the PiS in Poland, Donald Trump in the US, they equally expected new victories in the Netherlands, France, Germany, Austria, Italy etc.
In a recent article in Le Monde Diplomatique, neo-Marxist historian Perry Anderson provided a very interesting survey on all this. He interprets ‘populist’ strategies of the right and the left as opposing neo-liberalism and its effects from very opposite angles. One might remember Bertolt Brecht: the right- wing alternative boils down to the argument ‘Für alle reicht es nicht’ (there is not enough for everybody); the left-wing alternative to the socially inclusive logic of ‘Alle oder keiner – alles oder nichts’ (all or nobody). Anderson concludes that ‘the system will still win’, and he also explains why this is likely to be so. His advice to the left: “For anti-systemic movements of the left in Europe, the lesson of recent years is clear. If they are not to go on being outpaced by movements of the right, they cannot afford to be less radical in attacking the system, and must be more coherent in their opposition to it.”
The outcome of the general election in the Netherlands on 15 March 2017 seems to prove Perry Anderson right. Geert Wilders’ Freedom Party (PVV) came in second after Rutte’s Liberals (VVD). But with around 13 per cent obtained, Wilders’ PVV lagged much behind the 17 per cent predicted for them in the polls. Labour, Greens and the SP taken together obtained less than 25 per cent of the votes cast. Wilders’ campaign certainly had an effect on mainstream parties such as the Liberals and Christian Democrats, them further shifting to the right on immigration and also promising ‘less Brussels’. For an overview on the long-term trends of the erstwhile ‘Dutch consensus model’ (written before the 2017 general election) and the difficulties of the left, see an interesting piece by Alex de Jong. Why the Dutch Socialist Party in 2012 failed to become the dominant force for a ‘left turn’ in the Netherlands, see an earlier article by Daniel Finn in New Left Review.
Similar observations – the political mainstream shifting to the right, Marine Le Pen not very likely to become the next President – can be made about France. Here is a quite pessimistic view from Stefan Kipfer (Associate Professor in the Faculty of Environmental Studies at York University, Toronto) on the legacy of Hollande’s Presidency and the political climate in France before the forthcoming elections. Currently, Hammon and Mélenchon (JLM) could not agree to join forces for the Presidential election (the French Greens EELV now support Hammon). Also, talks between the PCF and JLM’s movement ‘La France insoumise’ on the legislative elections seem to be complicated. On this, see here an interview (in French) with Éric Cocquerel, the co-ordinator of the French Left Party (PdG), who believes that JLM will make it to the second round of the Presidential election. And (also in French), there is a critical assessment of the economic programme of JLM’s campaign by Henri Wilno.
As regards Germany‘s DIE LINKE, here is a provocative piece by Leandros Fischer reflecting on the party’s electoral (and other) strategies. Fischer is dealing with topics such as: how to stop the rise of the right-wing populist AfD, what are the prospects and flaws of the orientation towards a ‘Red-Red-Green’ coalition (R2G) etc.. He also dissects Wagenknecht’s and Lafontaine’s narrative to defend ‘the market economy against capitalism’. In a similar vein like those two – and like them linking his fundamental arguments to the ‘legacy’ of German ordo-liberalisms’ frontman Ludwig Erhard – the former Secretary General of the conservative CDU, Heiner Geißler, insisted for decades that ‘the social market economy is opposed to capitalism’. Fischer’s essay touching upon all this is an interesting read.
Looking at Italy, the split of the ruling Democratic Party (PD) has become reality – and there is perhaps more to come. On Matteo Renzi’s troubles, see an analysis from politico website here. A thorough and nuanced analysis by Cinzia Arruzza on the Italian constitutional referendum and what might follow from this is available on New Left Review. All in all, the Italian ‘traditional left’ (what is left of Rifondazione Communista (PRC); the newly formed social-democratic ‘Sinistra Italiana’, and the current split-offs from the PD trying to create a new centre-left) currently do not seem to benefit politically from these developments.
The rest-PRC is around 1 per cent; Sinistra Italiana going down towards 2 per cent, as many of ‘their’ prospective voters seem to prefer the ‘centre-left’ approach; the centre-left PD-split currently also only between 4 and 6 per cent. Beppe Grillo’s 5-Star-Movement continues to capture a good part of the discontent formerly expressed by that traditional left, currently overtaking the PD in the polls (see here). Also, the polls suggest a fragmented Italian political landscape, no breakthrough in sight for the bloc of the political right (Lega, Forza Italia, Fratelli D’Italia etc.), nor for the PD, the M5S or anyone else.
It might be useful – in the light of all this – to return to history for understanding the demise of the Italian ‘traditional’ left. The PCI (including its ‘euro-communist turn’) was up to the late 1970ies one of the strongest political forces in Italy. Firstly, David Broder on ‘Assessing Togliatti’ (who is held in high esteem by the newly founded but still small PCI, along with Enrico Berlinguer). Secondly, Perry Anderson on ‘An Invertebrate Left’ in Italy (2009) and on the ‘Italian Desaster’ (2014) – pretty provocative, but very scholarly argued background information.
In Spain, the newly installed conservative minority government of Mariano Rajoy (PP) seemed to run safely on support from the neo-liberal Ciudadanos Party (C’s) and the Social Democrats (PSOE) alike – on the basis of mutual dialogue with this ‘official opposition ‘. C’s are attacking the PP on corruption – Rajoy could eventually muster this by compromising on legislation on this issue. However, the PSOE’s leadership contest scheduled for spring 2017 could make things more difficult for Rajoy. The ousted former Secretary General Pedro Sanchez stands as candidate against Susana Diaz, who pulled the strings for his removal. Sanchez complained about the heavy pressure put on him from ‘powers’ during his negotiations with C’s and Podemos in 2016 on forming a PSOE-minority government. He sticks to his ‘No’ to Rajoy and promises to create a ‘Portuguese-style’ arrangement with Unidos Podemos (UP) and others as an ‘alternative to continous PP rule’. In that respect, he updated his political platform to promote the redistribution of wage labour, to introduce a universal social allowance and to envisage a federalist constitutional reform to acclaim the pluri-national character of the Spanish state – all this intended as a clear gesture towards UP.
If Diaz should win, the de-facto grand coalition arrangement in Spain might continue in substance – perhaps bringing about some modernization of the ‘Regime of 1978’ so much attacked by UP. If Sanchez should win, new troubles for the PP (but also for Unidos Podemos) might be on offer. On this still fragile Spanish constellation, see here an article by Jaime Pastor. A critical assessment of the second Vistalegre conference of Podemos by Josep Maria Antentas is available here.
In the United Kingdom, Labour Party leader Jeremy Corbyn is again under fire – this time even from Owen Jones, who first called for a ‘Lexit’, then ‘critically’ supported the ‘Remain campaign’ on the Brexit referendum etc. See here for Daniel Finn’s thoughtful rejoinder on this.
Last but not least: what about the trade unions and the traditional workers’ movement in that volatile political environment in Europe and globally? Asbjørn Wahl (Senior Advisor at the Norwegian Campaign for the Welfare State) comments on the notion of a seemingly ‘Reactionary Working Class’.
On geo-strategy after Trump
Again, let’s open this with a thought-provoking piece from Perry Anderson: ‘Passing the Baton‘, which dissects the legacy of Obama and speculates about what the Trump Presidency may mean in different respects.
Earlier on (2013), Anderson analyzed American Foreign Policy and its Thinkers, recommended to all readers of this Digest interested in historical background information (it is composed of three parts in a special edition of NLR, the last part can be read for free here. The book version is available here). And also see his Russia under Putin (2015).
So what about the current US geo-political discussions within the so-called ‘expert community’? A pretty informative analysis on this by Conn Hallinan can be found here. And what about the US as a superpower in decline? See a critical analysis on this by Edward Hunt here. Also very interesting on that track: a piece by Michael Crowley on ‘The Man who wants to unmake the West’ – both highly informative and speculative. We shall see what the Trump administration finally does and what it will not do in this regard …
EU leaders and the mainstream think-tanks are very concerned about the EU’s influence beyond its eastern member states. They complain about ‘increasing Russian destabilization efforts’. The ‘Balkans’ have been detected as a newly emerging terrain of power struggles, see here, here and here. Equally, the think-tanks ask about the effectiveness of the EU Eastern neighbourhood policies in drawing these states into the realm of the EU-Empire, see e.g. here. And they worry about more to come from Russia and China (Eurasian Economic Union, New Silk Road Initiative, Shanghai Cooperation Organisation), see here.
On the row between the EU and Turkey (constitutional referendum in April 2017, how to deal with AKP ministers campaigning for a yes-vote for that in Europe), politico website provided interesting information. Christopher de Bellaigue recently argued that Erdogan’s quest for a ‘Presidential regime’ follows in the footsteps of the earlier Ottoman Empire (‘The return of the Sultan’). The authoritarian AKP-Regime in Turkey discusses quite openly about a re-alignment with Russia and China towards a ‘Eurasian perspective’. This rings alarm bells within NATO …
All of them are ‘bandits’, of course. But who pushes things and who reacts in the emerging geopolitcal ‘New Great Game’ – this deserves a closer (historically informed) look.
Lexit’s Digest No. 8, 16 March 2017
EU Council on 9/10 March 2017: EU elite agendas, multiple conflicts unresolved
Bloomberg recently published a graphic about the EU ‘disintegrating’ or alternatively finding ‘a path for the future’. The ‘experts’ consulted by them predicted a ‘muddling through’ approach to prevail in the short term. Not surprisingly, this is what happened at the latest EU Summit.
There was heavy turmoil: the right-wing-populist government of Poland strongly opposed the re-nomination of Donald Tusk as President of the European Council. 27 of the still 28 EU member states governments voted for Tusk (also the UK government of Theresa May). The government of Poland then did not support the usual document on ‘Council Conclusions’ as a first measure of revenge.
The row around Tusk and Poland was perhaps a highly symbolic attempt at ‘rebellion’ within the current EU from a government of the Eastern European Right – reminiscent of Charles de Gaulles’ policy of the ’empty chair’ in the 1960ies. However, unlike the France of de Gaulle at the time, the ‘economic power’ of Poland within the EU 27 is no match against German economic dominance – in that respect, most of Eastern Europe’s economy is simply a sub-supplier-chain for German manufacturers and some others. Despite its nationalist rhetoric, the PIS government does not want to abandon the EU project for economic (they call for more monies from the EU Structural Funds for Poland) and also for geo-strategic reasons (NATO, EU protection against ‘Russian Imperialism) – see here and here. For those interested in a longer-term view on Polish nationalism, nation-state-debate, the PIS-concept etc. see a piece by Leszek Koczanowicz on New Left Review.
Euractiv commented on the Summit’s results: conclusions on the discussion on a multi-speed Europe postponed, no changes to the current EU-Treaties envisaged so far, timelines set for the end of 2017.
Concerning the issue of ‘migration‘ addressed at this event, here is a critical rejoinder by Lee Jones (the current moment blog), and also an interesting piece by Peter Mayo (who believes in ‘Social Europe’).
Discussions on ‘multi-speed Europe’
It seems that the Commissions White Paper on ‘Future Europe’ was not that very much debated at the March EU Summit.
Here is an analysis from the politico-website (mainstream, but nevertheless informative) on the vagueness of most concepts for a ‘multi-speed’ Europe; and here a report from the same source on the current discussions and divisions amongst EU governments about this.
The latter report points out that the governments of the Benelux countries want to discuss with the Eastern European EU member states how to counterbalance the influence of the ‘Big Four’ (Germany, France, Italy, Spain) in going too far in their effort to create a multi-speed Europe. From their perspective, this could lead to a European Union in which they contribute money (in particular the Benelux-countries and some other smaller but richer countries), but potentially have lesser influence on EU decision making. So there might be a cautious rebellion of some smaller EU states in the making. But the bourgeois leaders of those smaller EU member states always were very ‘pragmatic’ (= finally bowing to the bigger ones), when confronted by a dominating ‘EU-core’ (in the last years, this was only Germany).
The ‘Big Four’ are also not so united in their approaches of what a Europe of different speeds should mean concretely. Possibly, the final shots on this issue may only be clarified after the elections in France, Germany (and later on in Italy). This may also depend on whether the current de-facto Grand Coalition (PP-PSOE-C’s) in Spain can achieve more stability.
The current German government of Angela Merkel would certainly be pleased if Emmanuel Macron would win the French Presidential elections in 2017 (and the same goes for Martin Schulz as the SPD candidate for chancellor). Macron supports a ‘Europe of different speeds’ as such, and claims to close the gap in ‘competitiveness’ of the French economy towards the German one by ‘radical’ measures, in order to reconstruct the Franco-German axis on a par. The candidate of the French Socialist Party, Benoit Hammon, surprised with his proposal for a closer co-operation within the euro-zone (arguing for a special international treaty to ‘democratize’ the governance of the euro-zone, to be controlled not by the European Parliament, but by national Parliaments). Thus he is trying to square the circle for ‘more and better Europe’ and ‘enhancing sovereignty’ of euro-zone member states. Francois Hollande at the time pledged to ‘re-negotiate’ the Fiscal Compact – well, we shall see …
The current German government still promotes the pet-project of its minister of finance Wolfgang Schäuble: creating a European Monetary Fund (EMF), which would make the participation of the IMF in future Troika-like ‘rescue operations’ obsolete. In that line of thinking, the EMF would also take over much of the current responsibilities of the European Commission as regards the European Semester (oversight on member states fiscal and economic policies, early warnings etc.). That is a central part of the ‘German’ concept for a ‘multi-speed Europe’. So far, the vision of a ‘Europe of different speeds’ is an embattled ground …
The UK Parliament finally passed Theresa May’s Brexit Bill without amendments. For an informative overview on what will be the next procedural steps on Brexit see here. The European Commission calculates that the UK has €60 billion of charges to settle with the EU budget for Brexit, the UK government opposes these demands. Here is a quite informative policy brief of the Centre for European Reform on this.
As noted before in Lexit’s Digest, conflict with Northern Ireland and Scotland on Brexit is escalating. The SNP-led regional government of Scotland is demanding a second referendum on Scottish independence. After the regional elections in Northern Ireland on 2 March 2017 (see here for results), direct rule by the UK government could be re-installed if DUP and Sinn Féin should not be able to agree on a coalition again. Sinn Féin hoped to outflank the DUP and to claim the post of First Minister in order to launch negotiations on a ‘Special Designated Status within the EU’ for Northern Ireland. However, despite strong gains of Sinn Féin, the DUP came in again as the first party, though by a very narrow margin. Sean Bell analyses the election’s results and predicts ‘exceptional times’ coming for Northern Ireland.
Black Box ECB – ‘Release the Greek files’ campaign
The bank closures enforced by the European Central Bank on Greece in 2015 were part of the ‘Troika’ campaign to subdue the Syriza-led government to a third memorandum. ECB President Mario Draghi commissioned an independent legal opinion whether the closure process was legal and within the ECB’s charter and mandate. The ECB refuses to provide access to this document. Yanis Varoufakis and Fabio De Masi MEP launched a public campaign demanding the immediate publication of Draghi’s legal opinion – see a video of their interview with euractiv here. See also here for the related petition, and here for some background material on that campaign.
The latter background material of DIEM25 suggests that the ECB should be fully independent from the political process (and its actions transparent). Historically, the European Left, the Euromemorandum economists etc. always opposed such independence of the ECB as enshrined in the Treaties. Most of them still call for a ‘democratisation of the ECB’ and the like. It is one thing to claim that the ECB’s operation on Greece in 2015 violated its existing mandate. Also, Draghi should be forced to publish the legal opinion – no doubt. But DIEM25 arguing for ‘real independence of the ECB’ – isn’t that ironic?
Lexit’s Digest No. 7, 1 March 2017
Initially, EU elites planned to agree on a roadmap for ‘Future EU’ at their meeting on the 60th Anniversary of the Rome Treaty, scheduled for 25 March 2017. Now, it seems, the EU postpones clarifying its stance to the end of 2017. After talks with the current governments of Germany and France, Commission President Jean Claude Juncker decided to propose only a ‘White Paper’ on this item. The White Paper examines five different options for ‘Future EU’, and weighs the pros and cons on each. The Rome Summit then shall start a ‘process of reflection’, with conclusions to be drawn eventually by December 2017. The full text of the Commission’s White Paper on ‘Future EU’ is available here. To be further analysed in the Lexit-blogsphere, hopefully, also with regard to what a ‘Lexit-wise’ alternative might implicate.
Wait for the results of the elections in France and Germany (the latter in September 2017), look whether a Franco-German axis to ‘lead the European Union’ can be re-installed afterwards – this seems to be the rationale behind this. As Juncker made clear beforehand, his (and Merkel/Hollandes) current main idea is: a ‘Europe of different speeds’ is the best alternative to tackle the old continents’ economic and social problems, its divisions over geostrategy and the like.
Their concept is a European Union with a ‘core’ (e.g. the current euro-area; but also allowing for closer co-operation in military affairs, technology and science etc. for ‘coalitions of the willing’) at its ‘centre’. This is to be combined with a periphery of EU member states that do not want closer integration (such as e.g. Poland and Hungary), and also selective co-operation with a number of non-EU states (such as the UK after Brexit, Turkey) and others (currently addressed by the diverse ‘EU-neighbourhood policies’, east or south) as the ‘outer zone of influence’ of the ‘EU-Empire’.
This idea of a ‘flexible European integration’ looks like a mix of the old proposal of 1994 for a ‘core-Europe’ by German conservatives such as Wolfgang Schäuble and Karl Lamers, and French President Jacques Chirac’s proposal at the time for a ‘European Union of variable geometries’. Its essence: move towards a Europe of ‘concentric circles’, hierarchically structured, with dominance of the ‘core’ over all of it. Consolidating ‘EU-Empire’ in its economic and geopolitical aspects (including Ukraine etc.) – in an ‘epoch of rising uncertainty’ (regarding the future geopolitical stances of the US under Trump, Putin’s Russia, China etc.) – is central to this.
In that respect, the German government is already very active, deepening military co-operation between EU member states and continuing with the militarization of the EU’s borders. What about the future of NATO in that context? This issue had been hotly debated at the Munich Security Conference on 18 and 19 February 2017 – for a concise critical summary see here.
Worried whether former US ‘nuclear guarantees’ for Europe might be upheld in the future, German pundits are fantasising about a ‘European key’ to the nuclear arsenal of France (and maybe the UK). These discussions have a long tradition in Germany. People from diverse political strands such as the (long deceived) historic leader of the conservative Bavarian CSU, Franz-Josef Strauss (in the 1950ies and 1960ies) and the Greens’ Daniel Cohn-Bendit (in the late 1980ies) argued either for a ‘Europeanization’ of nuclear capabilities or even for Germany building up its own ‘potential’.
For an analysis on what is behind the Trump administration’s announcements to increase and modernize the US nuclear arsenal, see a piece by veteran US military experts Chuck Spinney and Pierre Sprey here.
European Economy, European Semester etc.
The European Commission recently published its ‘European Semester Winter Package‘. It provides detailed assessments of member states’ economic and social developments and shall serve as a basis for formulating ‘country-specific recommendations’ at the official EU-Summit on 9 – 10 March 2017 (compliance with the Fiscal Compact, the six and two packs etc.). Germany’s skyrocketing current account surplus is only regarded as an ‘imbalance’ by the Commission’s services, as usual. However, euro-area members France, Italy, Portugal and Cyprus are found to be experiencing ‘excessive economic imbalances’. In the case of Italy, there are threats that this country should be fined under the ‘excessive deficit procedure’.
The Juncker ‘political’ Commission has no interest in further destabilizing the political situation in that country, as Renzi’s ruling Democratic Party (PD) is heading towards a split. The irony in this is: The European Parliament lobbied for more ‘automatic sanctions’ in the past and a stronger role of the Commission in EU economic governance, and succeeded in that effort in 2012 (six and two packs). But finally it was the Commission refraining from using such powers, out of fear of creating further ‘political turmoil’ in ‘founding member states’ of the European project. Sanctioning smaller member states etc.? This is ok – these had been harshly treated in the past. But the Commission confronting Italy, France, Germany etc. head on with possible sanctions procedures? So far – no way. Never forget about the real hierarchies in this European Union …
Meanwhile, there is not much progress on the Commission’s pet project of a Capital Markets Union. One major controversy on this is about the role of securitizations, which the Commission would like to promote on a grand scale again. However, securitizations in the U.S. mortgage market were a major factor in triggering the 2008 global financial crisis. Rescue packages for banks were what followed after such toxic assets blew up. The Amsterdam based Transnational-Institute (TNI) recently analysed who benefited from that bail out of the banks. It is now quite commonly acknowledged that the burden of bank losses was shifted towards the ‘ordinary tax-payers’ at that time. The TNI report also examines the ‘Big Four’ international audit firms’ role in managing the bail-outs and making a nice profit for them out of that – a very interesting read (full report available here).
EU election year 2017
Let’s start with Portugal – not facing a major election in 2017 (only local ones). For the ‘left-wing’ of the European centre-left, the Portuguese ‘contraption model’ (minority government of Socialists, supported by the radical left PCP and Left Bloc) seems to become a reference point for forging centre-left alliances ‘at home’.
The Portuguese Communist Party (PCP) does not seem to be over-optimistic about this models’ mid- or long-term prospects: in December 2016, its Central Committee ‘has decided to carry out a campaign, between January and June 2017, on the release from submission to the Euro which, in conjunction with the demand for renegotiation of the debt and the recovery of public control of banking, clarifies the unsustainability of the constraints and impositions of the European Union, and mobilises various sectors of society for the need and possibility of liberation from submission to the Euro, for production, employment and national sovereignty.’ The Left Bloc is usually more moderate in its public statements on these issues, but likewise is in favour of leaving the euro-zone if no agreement on reducing Portugal’s’ debt can be achieved.
PCP and Left Bloc have important historic and cultural differences and thus attract quite different communities. Together they are representing roughly 20 per cent of voters in Portugal. Both are supporting the current social-democratic minority government of Antonio Costa for one major reason: As long as the Socialists stay on track on preventing a further impoverishment of the lower classes in Portugal and are open for incremental social improvements, this constellation might continue. If not – given the public commitments of both parties – a severe crisis of government may be expected. This particular constellation is different from the usual ‘European model’ of centre-left governments so far, which always implicated submission of the ‘radical left’ forces to the ‘centre’ on austerity policies of any kind, as part of a fixed ‘coalition agreement’ on those issues – already beforehand … We will see what happens in the future …
The last two issues of Lexit’s Digest prominently covered the upcoming elections in the Netherlands on 15 March 2017. Here is our last take (from Social Europe journal) before that national election. Perhaps needless to say: Wilders’ PVV ‘heads’ in the polls over a very fragmented political landscape with a predicted score of 17 per cent (and needing quite a number of ‘coalition partners’ to form a government later on) – is this really the Dutch breakthrough for right wing populism? Culturally, perhaps – as Wilders was successful in shifting the overall political agenda towards his propaganda. In ‘real terms’ – it depends… That the ‘centre-left’ spectrum (Labour, Green Left, SP) in the Netherlands is in misery and may not be capable of gaining a parliamentary majority – no doubt about that … but what would be the ‘alternative programme ‘of such a centre-left?
Similar trends of ‘voter volatility’ are shaking up France and Germany. To start with France, here is an interesting analysis on Marine Le Pen’s Front National from jacobin.mag..
On the left side of the political spectrum, there is a discussion to create a united candidature of the left for the Presidential elections and further on (encompassing the PS of Bennoit Hammon, Jean Luc Mélenchon’s ‘La France insoumise’, and the French Greens’ headed by Yannick Jadot). If these three forces could agree on a joint candidate for the French Presidential elections, this candidate might have a good chance to stand against Marine Le Pen in the second round, so the argument goes. This is based on simple ‘polling-arithmetic’: Hammon, Mélenchon and Jadot taken together stand for 25 – 29 per cent of current voting intentions.
But what about political programmes, and what about securing parliamentary majorities for a ‘renewed left’ in the French legislative elections afterwards? Not so easy … Hammon and Mélenchon quite strongly disagree about Europe. On this and other political dividing lines, see for example a sober analysis from Roger Martelli (in French). Marie-Pierre Vieu (a leading member of the French Communist Party – PCF) argues for the widest possible unity with the Socialists (also in French). This is pointing to older underlying differences over strategy within the long defunct Front de Gauche. Last but not least, a quite pessimistic ‘note on the political situation in France’ from the New Anti-capitalist Party (NPA), just to complete the picture of opinions from the French left. Well, have a good read on all that, nevertheless …
With Martin Schulz as its candidate for chancellor of Germany, the SPD has been rising in the polls for some weeks. Germany’s DIE LINKE Party recently spoke out in favour of forming a coalition with SPD and Greens. On the political difficulties of DIE LINKE and how to tackle them, there are diverging views – see here and here.
Daniel Finn (deputy editor of New Left Review) looks into the soul-searching on the British left on Brexit and argues for an independent leftist strategy ‘Neither Washington nor Brussels’.
There is another Plan-B text signed by different authors (e.g. Eric Toussaint , Miguel Urbán Crespo , Stathis Kouvelakis , Teresa Rodríguez , Costas Lapavitsas, Zoe Konstantopoulou , Marina Albiol , Olivier Besancenot etc.) on the challenges of the left in the euro-zone: Ten Proposals to Beat the European Union (for the full list of signatories see here).
See also the study and report by Costas Lapavitsas and others on Euro-zone Failure, German Policies, and a New Path for Greece here, which was presented at the December 2016 EReNSEP meeting in Paris.
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 account 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.