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. 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.