Saudi Arabia: A Kingdom Stumbles

A Kingdom Stumbles: Saudi Arabia

Dispatches From The Edge

Oct. 31, 2015


For the past eight decades Saudi Arabia has been careful.


Using its vast oil wealth, it has quietly spread its ultra-conservative brand of Islam throughout the Muslim world, secretly undermined secular regimes in its region and prudently kept to the shadows, while others did the fighting and dying. It was Saudi money that fueled the Mujahedeen in Afghanistan, underwrote Saddam Hussein’s invasion of Iran, and bankrolled Islamic movements and terrorist groups from the Caucuses to Hindu Kush.


Today that circumspect diplomacy is in ruins, and the House of Saud looks more vulnerable than it has since the country was founded in 1926. Unraveling the reasons for the current train wreck is a study in how easily hubris, illusion, and old-fashioned ineptness can trump even bottomless wealth.


The Kingdom’s first stumble was a strategic decision last fall to undermine competitors by upping oil production and, thus, lowering the price. Their reasoning was that, if the price of a barrel of oil dropped from over $100 to around $80, it would strangle competition from more expensive sources and new technologies, including the U.S. fracking industry, the arctic, and emergent producers like Brazil. That, in turn, would allow Riyadh to reclaim its shrinking share of the energy market.


There was also the added benefit that lower oil prices would damage countries that the Saudis didn’t like: Russia, Venezuela, Ecuador, and Iran.


In one sense it worked. The American fracking industry is scaling back, the exploitation of Canada’s oil sands has slowed, and many arctic drillers closed up shop. And, indeed, countries like Venezuela, Ecuador, and Russia took a serious economic hit. But despite obvious signs, the Saudis failed to anticipate China’s economic slowdown and how that would dampen economic growth in the leading industrial nations. The price of oil went from $115 a barrel in June 2014 to $44 today. Because it is so pure, it costs less than $10 to produce a barrel of Saudi oil.


The Kingdom planned to use its almost $800 billion in financial reserves to ride out the drop in prices, but it figured that oil would not fall below $80 a barrel, and then only for a few months.


According to the Financial Times, in order to balance its budget, Saudi Arabia needs a price of between $95 and $105 a barrel. And while oil prices will likely rise over the next five years, projections are that price per barrel will only reach $65. Saudi debt is on schedule to rise from 6.7 percent of GDP this year to 17.3 percent next year, and its 2015 budget deficit is $130 billion.


Saudi Arabia is spending $10 billion a month in foreign exchange reserves to pay the bills and has been forced to borrow money on the international financial market. Two weeks ago the International Monetary Fund’s (IMF) regional director, Masood Ahmed, warned Riyadh that the country would deplete its financial reserves in five years unless it drastically cut its budget.


But the Kingdom can’t do that.


When the Arab Spring broke out in 2011, the Saudi Arabia headed it off by pumping $130 billion into the economy, raising wages, improving services and providing jobs for its growing population. Saudi Arabia has one of the youngest populations in the Middle East, a lot of it unemployed and much of it poorly educated. Some 25 percent of the population lives in poverty. Money keeps the lid on, but for how long, even with the heavy-handed repression that characterizes Saudi political life?


In March, the Kingdom intervened in Yemen, launching an air war, a naval blockade, and partial ground campaign on the pretense that Iran was behind the civil war, a conclusion not even the Americans agree with.


Again, the Saudis miscalculated, even though one of its major allies, Pakistan, warned Riyadh that it was headed for trouble. In part, the Kingdom’s hubris was fed by the illusion that U.S. support would make it a short war—the Americans are arming the Saudis, supplying them with bombing targets, backing up the naval blockade, and refueling their warplanes in mid-air.


But six months down the line the conflict has turned into a stalemate. The war has killed 5,000 people, including 500 children, flattened cities, and alienated much of the local population. It has also generated a food and medical crisis, as well as creating opportunities for the IS and Al-Qaeda to seize territory in Southern Yemen. Efforts by the UN to investigate the possibility of war crimes were blocked by Saudi Arabia and the U.S.


As the Saudis are finding out, war is a very expensive business, a burden the Saudis could meet under normal circumstances, but not when the price the Kingdom’s only commodity, oil, is plummeting.


Nor is Yemen the only war that the Saudis are involved with. Riyadh, along with other Gulf monarchies, including Qatar and the United Arab Emirates, are underwriting many of the groups trying to overthrow Syria’s Bashar al-Assad. When anti-government demonstrations broke out in 2011, the Saudis—along with the Americans and the Turks—calculated that Assad could be toppled in a few months.


But that was magical thinking. As bad as Assad is, a lot of Syrians, particularly minorities like Shiites, Christians, and Druze, were far more afraid of the Islamists from al-Qaeda and the IS then they were of their own government. So the war has dragged on for four years and has now killed close to 250,000 people.


Once again, the Saudis miscalculated, though in this case they were hardly alone. The Syrian government turned out to be more resilient that it appeared. And Riyadh’s bottom line that Assad had to go just ended up bringing Iran and Russia into the picture, checkmating any direct intervention by the anti-Assad coalition. Any attempt to establish a no-fly zone will have to confront the Russian air force, not something that anyone other than U.S. presidential aspirants are eager to do.


The war has also generated a flood of refugees, deeply alarming the European Union, which finally seems to be listening to Moscow’s point about the consequences of overthrowing governments without a plan as to who takes over. There is nothing like millions of refugees headed in your direction to cause some serious re-thinking of strategic goals.


The Saudis goal of isolating Iran is rapidly collapsing. The P5+1—The U.S., China, Russia, Great Britain, France, and Germany—successfully completed a nuclear agreement with Teheran, despite every effort by the Saudis and Israel to torpedo it. And at Moscow’s insistence, Washington has reversed its opposition to Iran being included in peace talks around Syria.


Stymied in Syria, mired down in Yemen, its finances increasingly fragile, the Kingdom also faces internal unrest from its long marginalized Shiia minority in the country’s east and south. To top it off, the IS has called for the “liberation” of Mecca from the House of Saud and launched a bombing campaign aimed at the Kingdom’s Shiites.


Last month’s Hajj disaster that killed more than 2100 pilgrims—and anger at the Saudi authorities foot dragging on investigating the tragedy—have added to the royal family’s woes. The Saudi’s claim 769 people were killed, a figure that no other country in the world accepts. And there are persistent rumors that the deadly stampede was caused when police blocked off an area in order to allow high-ranking Saudis special access to the holy sites.


Some of these missteps can be laid at the feet of the new king, Salman bin Abud-Aziz Al Saud, and of a younger generation of aggressive Saudis he has appointed to key positions. But Saudi Arabia’s troubles are also a reflection of a Middle East in transition. Exactly where that it is headed is by no means clear, but change is in the wind.


Iran is breaking out of its isolation and, with its large, well-educated population, strong industrial base, and plentiful energy resources, is poised to play a major regional, if not international, role. Turkey is in the midst of a political upheaval, and there is growing opposition among Turks to Ankara’s meddling in the Syrian civil war


Saudi Arabia, on the other hand, is impaled on its own policies, both foreign and domestic. “The expensive social contract between the Royal family and Saudi citizens will get more difficult, and eventually impossible to sustain if oil prices don’t recover,” Meghan L. O’Sullivan, director of the Geopolitics of Energy project at Harvard told the New York Times.


However, the House of Saud has little choice but to keep pumping oil to pay for its wars and keep the internal peace. But more production drives down prices even further, and, once the sanctions come off of Iran, the oil glut will become worse.


While it is still immensely wealthy, there are lots of bills coming due. It is not clear the Kingdom has the capital or the ability to meet them.











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Portugal and Europe’s Democracy Crisis

Portugal’s Democracy Crisis

Dispatches From The Edge

Nov. 5, 2015


Within a week, Europe will face one of the most serious challenges to democracy it has seen in many decades. On Nov. 10 Portugal’s minority rightwing government will likely lose a vote of confidence, initiating a series of events that will determine whether voters in the European Union (EU) still have the right to a government of their own choosing.


The crisis was set off by the Oct. 4 elections that saw the rightwing Forward Portugal coalition, which has overseen austerity policies that have driven 20 percent of the population below the poverty line, lose its majority in the parliament to three parties on the left, the Socialist Party, the Left Bloc, and a Communist/Green alliance.


Forward Portugal, an alliance of the Social Democratic Party and the Popular Party, lost 28 seats in the election, dropping from 135 seats to 107. The left parties, meanwhile,won over 50 percent of the vote and picked up 25 seats, for a total of 122. An animal rights party won 1 seat.


The Portuguese parliament has 230 seats. A majority is 116 seats.


Instead of asking the left if it could form a government, however, on Oct. 23, Portuguese president Cavaco Silva—a former prime minister for the Social Democratic Party—reappointed the rightwing alliance’s leader, Pedro Coelho as prime minister.


Silva went further, however, delivering an incendiary speech in which he declared that he would never appoint “anti-European forces” to run the government, and denouncing parties on the left for opposing the North Atlantic Treaty Organization (NATO) and the common currency, the euro.


“It is my duty, within the constitutional powers, to do everything possible to prevent false signals being sent to financial institutions, investors and markets,” he concluded.


The speech has set off a firestorm in Portugal, one that is reverberating throughout the EU. It is one thing for the EU and its financial enforcer, the Troika—the European Commission, the European Central Bank, and the International Monetary Fund—to exert pressure on a country from the outside. It has done exactly that in Greece. It is quite another to say that a particular political or economic program is beyond the pale.


Portugal’s austerity program, originally introduced by the Socialist Party, has impoverished the country and driven half a million young people emigrate. Unemployment, while down from its height of 17 percent, is still at 12 percent, and over 31 percent for youth. One out five in the population is below the poverty line of $5,589 a year, and Portugal has one of the highest in income inequality in the EU. The average household income has fallen 8.9 percent since 2009. Exhausted by austerity, Portugal’s voters turned against the rightwing government and turned it into a minority.


In what is an historic development—one commentator called it a “Berlin Wall moment”—the three left parties put aside their differences and agreed to form a united front government.


While all the left parties opposed austerity—the Socialist Party having finally seen the light— they differed on many other issues. The Left Bloc and the Communist Green alliance opposes Portugal’s membership in NATO and wanted the country to get out of the Eurozone, the group of 19 countries in the 28-member EU that use the euro.


The euro is a controversial issue. It has been a boon for Germany, Austria and the Netherlands, and to the large banks that dominate European finance. But it has had a generally negative impact on many other countries, particularly those in the distressed south—Italy, Spain, Greece, and Portugal. Since Ireland is also in this same the problems are economic, not geographical.


As far as NATO goes, there are a number of political organizations that argue the old Cold War alliance should be retired and that NATO does more to raise tensions on the continent that it does protect its members.


In any case, opposition to NATO and the euro are hardly opinions that should bar one from government, but that is exactly what the Portuguese president has done.


He has received support for his position as well. Joseph Daul, president of the center-right grouping in the European Parliament, said, “The sacrifices made by the people of Portugal must not be jeopardized by a government composed of anti-EU and anti-NATO parties.” German Chancellor Angela Merkel said an anti-austerity government in Portugal would be a “very negative” development.


Some of the comments have an Alice in Wonderland quality to them. Coelho said, “It’s time to say loud and clear that the Socialist Party lost the elections…we’re not going to stand the elections results on their head.” He was joined by the rightwing Prime Minister of Spain, Mariano Rajoy, who warned, “coalitions of losers want to join forces to do away with moderate majorities in our societies, to attain through deals what they didn’t achieve at the ballot box.”


But as the Socialist Party grouping in the European Parliament pointed out in a statement, “Portuguese voters were very clear in the last general election with a strong majority (62 percent) against the austerity policies of the last four years.”


Rajoy, of course, has his own problems. His rightwing People’s Party will probably lose its majority to the Socialist Party and the leftwing Podemos Party in Spain’s upcoming Dec. 20 elections, but it still may be the single largest vote getter. He wants to stay in power and the Portugal maneuver gives him a strategy for doing just that.


What clearly surprised the Portuguese right is that the left could agree to work together. The Socialist Party has long been at loggerheads with the Communists, who accuse it of being too much like the rightwing Social Democratic Party. Indeed, the fact that the Socialists did not win the election outright is in part due to the fact that voters are still angry with the party for introducing the austerity policies in the first place.


But the dramatic gains for the Left Bloc—it is now the third largest in the parliament, ahead of the Communist/Green alliance—clearly convinced the left that it should find issues to agree on. After several meetings, the Left Bloc and the Communist/Greens agreed to temporarily shelve the euro and NATO issues, and the Socialists pledged to end austerity.


There are still major questions to iron out. The Left Bloc and the Communist/Greens want to challenge Portugal’s staggering debt—they have a solid basis for claiming that much of it is illegitimate—while the Socialists have been silent on the subject. Eventually the euro, NATO, and the debt will be on the table, but such disagreements are hardly unique to Portugal. There is virtually no government in Europe without ideological divisions.


In any case, despite their differences, the left parties are on the same wavelength as the majority of Portuguese voters: no more austerity.


If the Portuguese president refuses to allow the left to form a government and Portugal Forward is defeated in the Nov. 10 vote, Silva can appoint Coelho to run a caretaker government and call for new elections. But those won’t be for eight months. Silva’s presidency runs out in January, and new elections can’t be held for six months following the appointment of a new president.


The left has the votes to insure a president compatible with the will of the voters—they have already overridden the right’s candidate for Speaker of the House and put their own candidate in—but there will still be six months before the next election. Eight months is enough time for a rightwing caretaker government and its backers in the EU and the Troika to do considerable mischief. Greece has felt the power of the Troika and seen what it can do to undermine opposition to its policies.


During the recent Greek crisis, German finance minister Wolfgang Schaueble made it clear that what Greek voters wanted was irrelevant. Greece would bow to the Troika or the Troika would strangle the Greek economy, period. In essence, national governments should restrict themselves to things like what color park benches should be painted—provided the paint is affordable.


If this “soft coup” stands, taxes, interest rates, public ownership, investments, and economic strategies to control inflation and unemployment—long the battleground for conflicting ideologies—will no longer be issues to be decided democratically. Unelected bodies, like the Troika, will make those decisions, in spite of the fact that many of the Troika’s policies—like austerity—are highly controversial and have an almost unbroken track record of failure.


Democracy is what is at stake in Portugal, and it is a crisis that cuts to the heart of the European Union experiment. Do people still have the right to make decisions about policies that have a profound impact on their lives? Or do they only get to quarrel about the color of park benches?


















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The Price Of Turkey’s Election

Turkish Elections

Dispatches From The Edge

Nov. 2, 2015


If there is a lesson to be drawn from the Nov. 1 Turkish elections, it is that fear works, and there are few people better at engendering it than Turkish President Recep Tayyip Erdogan. Only five months after the Justice and Development Party (AKP) lost its majority in the Turkish parliament, a snap election put it back in the driver’s seat.


The cost of the victory, however, may be dear, because, to achieve it, Erdogan reignited Turkey’s long and bloody war with the Kurds, stood silent while mobs of nationalists attacked his opponents, and unilaterally altered the constitutional role of his office.


Observers from the Council of Europe and the Organization for Security and Cooperation in Europe said that violence and attacks on the media had a significant impact on the election. “Unfortunately we come to the conclusion that this campaign was unfair, and was characterized by too much violence and fear,” said Andreas Gross, a Swiss parliamentarian and head of the Parliamentary Assembly of the Council of Europe delegation,


At the same time the European Union (EU) seemed to favor an AKP victory. The EU Commission held off a report critical of Turkish democracy until after the vote. Two weeks before the election German Chancellor Angela Merkel visited Turkey bearing $3.3 billion in aid for Syrian refugees and an offer for Turkey to revive its efforts to get into the EU. Previously, Merkel had been opposed to Turkish membership in the EU.


The finally tally is almost everything Erdogan wanted, although he fell short of his dream of a supermajority that would let him change the nature of the Turkish political system from a parliamentary government to one ruled by a powerful and centralized executive—himself.


There are 550 seats in the Turkish parliament. The AKP took 49.4 percent of the vote and won 317 seats, an increase of 64 over the June election. While 276 seats is a majority, what Erdogan wanted was a supermajority of 367 seats that would allow him to change the constitution without involving the electorate. He did not achieve this.


The secular Republican People’s Party (CHP) picked up two seats over the June election for a total of 134 seats. The Kurdish-dominated leftwing People’s Democratic Party (HDP), which scored an historic 13.1 percent of the vote and 80 seats in the June election, managed to squeak by with 10.7% of the vote and 61 seats. If it had failed to pass the 10 Percent barrier for parliamentary representation, most of those seats would have gone to the AKP, possibly giving Erdogan’s party the supermajority it craved.


Indeed, it was a statement of the HDP’s resilience that despite the violence directed at the party and the arrest of many HDP activists, the organizations still managed to clear the 10 percent bar for representation in the parliament. The HDP announced that it planned to challenge several seats that the party says involved fraud.


The rightwing Nationalist Action Party (HDP) dropped 31 seats, falling to fourth place with only 40 seats. It would appear that most of their voters jumped to the AKP.


Erdogan set out to change the Turkish constitution back in 2007 and has pushed to reconstruct the country’s politics ever since. However, the AKP has never had 330 votes in the parliament, the number needed to place a referendum before the voters. Erdogan did not get that magic number this time either, but he is close and may be able to pry a dozen or so voters from the ranks of the rightwing nationalists and get his referendum.


The AKP won almost five million more votes than it did last June. Voter turnout was over 86 percent.


A referendum is a disquieting thought. Erdogan is a relentless campaigner, and opponents are worried that, while most Turks do not show much enthusiasm for his constitutional changes, scare tactics, repression, and money will push such a referendum through. Pre-election polls predicted that the AKP would get about the same number of votes in November that it got in June. They were dead wrong. Erdogan’s formidable political skills and his willingness to polarize the country are not to be underestimated.


While the AKP now has a majority, it is at the expense of re-igniting the war with the Kurds, a conflict that has cost Turkey $1.2 trillion and some 40,000 lives. It has also seen an almost unprecedented wave of attacks on the Kurdish party, its supporters, and the press.


Four days before the Nov. 1 election, police raided the offices of Ipek Media, closing down two newspapers and two TV stations. The news outlets have been handed over to a government trustee who is investigating them for “supporting terrorism.” Ipek Media is closely associated with Fethullah Gulen, an Islamic preacher currently living in exile in the U.S. Gulen and Erdogan were formerly allies, but had a falling out in 2012.


Erdogan has also gone after several other media outlets, including the Dogan Group, which owns Turkey’ popular daily, Hurriyet, and CNNTurk. Both outlets have interviewed politicians from the HDP, which the President charges is a front for the Kurdish Workers Party (PKK). The PKK is designated a terrorist organization and the target of Turkey’s current war on the Kurds.


While there is a relationship between the PKK and the HDP, the latter has sharply condemned the violence of the former and has a far broader base among Kurds and non-Kurds. Apparently some of the conservative religious Kurds, who voted for the HDP in June, were spooked by the violence and returned to the AKP.


Mobs led by the Ottoman Hearths—the youth arm of the AKP—and the Idealist Hearth—youth arm of the rightwing MHP—have burned HDP offices, attacked Kurdish businesses and homes, and attacked leftwing book stores. On Sept. 8 a nationalist mob rioted for seven hours, burning offices and stores in the city of Kirsehir, while police stood by and watched.


The chair of a local branch of the HDP, Demet Resuloglu, said she warned police about the mob, but they did nothing. She and several others were temporarily trapped in a bookstore by a mob that set the establishment on fire. “We escaped with our lives after jumping from the second floor. It was an organized affair. Everything happened with the knowledge of the police, the governor and everybody,” she told the news outlet Al-Monitor.


Similar attacks took place in the resort towns of Alanya and Manargat.


During the election campaign, Turkish Kurds and leftists were the targets of several bombings that took over 130 lives and were almost certainly the work of the Islamic State. But Erdogan and his prime minister, Ahmet Davutoglu, blamed it on the PKK and tried to tar the HDP with the same brush.


Selahattin Demirtas, a leader of the HDP and a member of parliament, is currently being investigated for supporting “terrorism” and insulting the president, Since Erdogan became president in August of last year, more than 240 people have been charged with insulting him.


Erdogan is likely to treat the AKP’s victory as endorsement of his campaign to overthrow Syrian President Bashar al-Assad, even though polls show that 63 percent of Turks disapprove of getting involved in Syria.


The war has turned into a disastrous quagmire, and the Europeans and the Russians are pushing for a political settlement. Erdogan—a man with a stubborn streak—will probably insist that Assad first must go, a formula that will endear him to the Gulf monarchies, but will almost certainly keep the war going. Turkey is already hosting 2 million Syrian refugees and millions more are headed toward Europe.


The Turkish president has unilaterally redefined the office of the president from one of neutrality to partisan activist. Rather than trying to form a coalition government after last June’s election—a major part of the president’s job—Erdogan sabotaged every effort to compromise, banking he could stir up the furies of sectarianism and fear to create the climate for a comeback. While the AKP is wealthy, parties like the HDP were tapped out by the June election and could not marshal the resources for another national campaign. In the last weeks of the election the HDP canceled rallies, fearing they would be attacked by rightwing mobs or create targets for Islamic State bombers.


Erdogan created chaos and then told voters the AKP was the only path to peace and stability. It was an argument a lot of voters bought, but the costs are high. The press has been muzzled, a war that was over has been re-started, and Turks and Kurds are once more at each other’s throats. The war in Syria is likely to drag on, and the polarization of Turkish society will deepen.


But the AKP has only a slim majority, and the peace and stability it promises is an illusion. As the British Guardian noted, “President Erdogan has got his majority back, but Turkey has been damaged in the process…Sadly, this election is unlikely to mark a passage into calm waters for Turkey.”













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Turkey’s Election Turmoil

Turkey’s Election Turmoil

Dispatches From The Edge

Oct. 18, 2015


As Turkey gears up for one of the most important elections in its recent history, the country appears, as one analyst noted, to be coming apart at the “seams”:


*Longstanding tensions with the country’s Kurdish population have broken out into open war.


*A Kurdish-led left political party is under siege by rightwing nationalists and the terrorist organization, the Islamic Front.


*Independent journalists have been attacked by mobs led by leading members of the ruling Justice and Development Party (AKP) of Turkish President Recep Tayyip Erdogan.


*Erdogan, his family, and leading figures in the AKP have been entangled in several major corruption schemes.


*The economy has stalled, inflation is on the rise, unemployment is at a five year high, tourism is tanking, and the Turkish lira is plunging, driving up the national debt.


All Turkey lacks these days is a rain of frogs and rivers of blood, but there is still time before Nov. 1 election.


Some of these plagues are long standing, but most are the direct result of Erdogan’s determination to reverse the outcome of last June’s election that saw the AKP lose control of the parliament, and the President’s grand plan for an all-powerful executive—run by him—died aborning.


In the June 7 election, Erdogan’s AKP lost its absolute majority in the legislature. The defeat was mainly due to a breakthrough by the Kurdish-led, leftist, People’s Democratic Party (HDP) that took 13.1 percent of the vote and won 80 seats, seats that in the past usually went to the AKP.


Almost before the final tallies were announced, Erdogan moved to prevent the formation of a government and force another election. Key to this has been an all-out campaign to suppress the HDP and prevent the party from getting at least 10 percent of the vote, the required threshold for representation


And in true Old Testament fashion, he has unleashed the furies.


First, he ended negotiations and a two-year old ceasefire with the Kurdish Workers Party (PKK) and began bombing Kurds in Syria and Iraq. He also charged that the HDP was a front for the PKK and demanded that the HDP’s dynamic leader, Selahattin Demirtas, be charged with supporting terrorism. HDP offices have been targeted by rightwing nationalist mobs from the AKP and the extreme rightist National Action Party.


Several anti-Erdogan newspapers and magazines were also set upon, attacks that the government either ignored or belatedly condemned.


The kind of suicide bombings that plague much of the Middle East have made an appearance. Some 32 leftist Kurdish activists were killed July 20 in the border town of Suruc, and on Oct. 10 a peace demonstration in Ankara organized by the HDP was bombed, killing more than 100 people and wounding hundreds more.


While the culprit in both cases was likely the Islamic State, paranoia is running rampant these days. Turkish Prime Minster Ahmet Davutoglu blamed the PKK—extremely improbable, given that the rally was protesting the war against the Kurds—and HDP leader Demirtas blamed the government. Others charge it was the work of the National Action Party’s “Gray Wolves,” a shadowy death squad that killed thousands of Kurds and leftists in the 1980s and ‘90s.


Not only did the government remain silent for several days after the massacre, Turkish security forces broke up memorial demonstrations in Ankara and Istanbul.


A decade ago, Turkey was at peace with its neighbors, its economy was humming, democracy was flowering, the country’s coup-minded military relegated to the barracks, and the 40-year war with its Kurdish population appeared to be over. Turkey, with its efforts to find a peaceful solution to the nuclear crisis with Iran, had also become an international player.


Today, Turkey is engaged in an unpopular war in Syria, its economy is troubled, its people are polarized, its relationships with Egypt and Israel are hostile, the Kurdish peace is shattered, and democracy is under siege. It has alienated Russia, Iraq and Iran, and even failed to get re-elected to the UN Security Council.


What happened?


Much of it goes back to the man who has dominated Turkish politics these past 12 years, and who would like to run the country for another decade, Recep Tayyip Erdogan. He bears limited responsibility for some of this. For instance, the economy is bad, but so are most economies worldwide. But much of what has happened in Turkey—for good and bad—is in large part due to his creation of a moderate Islamic regime that curbed the power of the military and the secular elites who had dominated Turkish politics since the nation’s foundation in 1923.


Erdogan and his allies—allies he has since fallen out with—reined in a military that had carried out four coups since 1960. He also made peace with the Kurds, ending a war that took 40,000 lives and cost $1.2 trillion. A side benefit for that was that many rural and religious Kurds migrated into the AKP, giving it a significant edge over all other parties in the parliament.


But things began to go off the rails in 2010, when the Arab Spring took the Middle East by storm and Turkey made two fateful steps: backing insurgents trying to overthrow Bashar al-Assad in Syria, and supporting the Muslim Brotherhood in Egypt. The first step trapped Ankara in a quagmire, wrecking its relations with Russia, Iraq and Iran, and the second was a bad bet: the Egyptian military, bankrolled by Saudi Arabia, overthrew the Brotherhood in 2013.


It is all this sturm und drang that makes these elections so critical for the AKP, and Erdogan in particular. A failure to win an outright majority will be seen as a repudiation of the Kurdish war, Ankara’s Syria policy, and may resurrect the corruption changes that the AKP has managed to dodge so far. “For him, this is existential,” one former Turkish official told the Financial Times. “There is still accountability in this country and he knows it.”


This “existential” nature of the Nov. 1 vote is the reason why Erdogan has pulled out all the stops, but polls show that the outcome is likely to be much like last June’s election. The AKP may pick up a percentage point or two, but it will fall far short of the majority it requires to push through its constitutional changes and create an all-powerful presidency.


The polls also show that Erdogan’s major pre-election target, the HDP, may do slightly better this time around, in part because he has totally alienated the Kurdish community. The Kurds make up 20 percent of the population and about 17 to 18 percent of the voting population.


If the polls are correct, Turkey will have a divided government, and that will create its own dangers.


First, there are the President’s increasingly authoritarian stratagy.


Erdogan, for instance, says he is no longer bound by the constitution because he is the first directly elected president in Turkish history. He won that post with 52 percent of the vote in 2014. Presidents are normally appointed by the parliament and are supposed to be non-partisan. Abdurrahim Boynukalin, the leader of the AKP’s youth wing and a deputy in the parliament, said recently that, “Whatever the results of the election on November 1, we will make him [Erdogan] the leader.”


Second, the AKP may form an alliance with the ultra-rightwing National Action Party, which would almost certainly mean an escalation of the war against the Kurds and put into positions of power an organization that celebrates violence and is openly contemptuous of democracy. While the merger would still not give the AKP the 400 seat super majority it needs to amend the constitution, it would have a chilling effect on political activity.


There is also the possibility of a “grand coalition” government with the secular People’s Republican Party, the second largest in the parliament. But that would require sharing power, not one of Erdogan’s strong suits.


There are, however, strong counter-trends.


In spite of Erdogan’s flirtation with authoritarian rule, Turkey is still a democracy, and its military shows no interest in intervening in civil affairs. Indeed, there is some unrest in the military over the Kurdish war, and the government has been denounced at several military funerals. The military has also made it quite clear that they have no interest in getting involved in the Syrian civil war.


Erdogan calculated that re-igniting the Kurdish war would unite the country behind him, but it has not turned out that way, and his international allies are lukewarm about the whole endeavor. While saying that Turkey had the right to defend itself, The Europeans and the U.S. call for a “proportional” response, not the massive bombing Ankara has launched on Kurds in Northern Iraq and Syria.


Of course, the allies discomfort is a reflection of the fact that while the AKP government draws no distinction between the Islamic State (IS), the PKK, and the latter’s Syrian offshoot, the Kurdish Democratic Union, the allies consider the Kurds their most reliable and effective forces against the IS. The Turks recently complained to Russia and the U.S. about their arming of Syrian Kurds, a complaint that neither country is likely to pay much attention to.


The Syria war has been a disaster for Erdogan. Some 63 percent of Turks oppose the AKP’s Syria policy, and only 20 percent back overthrowing Assad. Over 65 percent oppose one of Erdogan’s fixations, the formation of a buffer zone inside Syria.


And, while in the past the AKP can say it delivered on the economic front that is a hard sell these days.


The next few weeks will be fraught with danger. The AKP and the ultra-nationalists will try to suppress the vote, particular in Istanbul and the Kurdish east and south. The PKK declared a ceasefire for the election, but the Turkish government has ignored it. Will Erdogan use the war as an excuse to cancel the election in the Kurdish regions?


Erdogan may even refuse to accept the results of the election if the AKP does poorly, and he has already demonstrated his willingness to use violence. His brutal crushing of the 2013 Gezi Park demonstrations is a case in point.


But Erdogan can no longer claim the support of a majority of the Turks, and what he does internally will be watched closely by the international community, focused as it is on the refugee crisis that the Syrian war has generated.


In less than two weeks, the Turks will vote in an election that will have major regional and international implications. Its outcome may decide whether the Middle East slides deeper into war and chaos, or begins to move in the direction that the Arab Spring originally envisioned.





























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Portugal: European Left Batting 1,000

Portugal: Europe’s Left Batting 1000

Dispatches From The Edge

Oct. 7, 2015


In spite of a well-financed scare campaign, and a not very subtle effort by the European Union (EU) to load the dice in the Oct. 4 Portuguese elections, the ruling rightwing Forward Portugal coalition lost its majority in the parliament, Left parties garnered more than 50 percent of the vote, and the austerity policies that have paralyzed the country for four years took a major hit.


Along with last month’s Greek election, it was two in a row for the European Left.


While most the mainstream media touted the election as a victory for Prime Minister Passos Coelho’s Social Democratic Party/Popular Party coalition, the rightist alliance dropped from 50.4 percent in the 2011 election to 38.4 percent, losing 28 seats. In contrast, the center-left Socialist Party picked up 11 seats, the Communist/Green alliance 1 seat, and the Left Bloc 13 seats. All in all, the Left went from 40 percent of the vote in 2011 to a little over 50 percent in 2015.


There are still four seats to be determined by the votes of expatriates, but even if all four went to Forward Portugal, it would still be short of a majority. And given that a flood of young, mostly professional, Portuguese fled the austerity regime inflicted on the country by the “Troika”—the European Central Bank, the International Monetary Fund, and the European Commission—those votes may well end up in the Left’s column.


The parliament has 230 seats. The Right now controls 104 and the left 121. A majority is 116 seats.


The surprise in the election was that the Left Bloc more than doubled its representation in spite of the fact that there were three Left parties vying for voters.


The Right ran endless images of poor Greek pensioners lining up at banks, and warned voters that voting for the Left could result in the kinds draconian measures the EU took out on Greece, but the scare tactics didn’t work.


The Troika also eased up on Portugal prior to the election, exactly the opposite approach it took in Greece, even though Portugal’s debt is still high and its growth is anemic—1.6 percent this year. Unemployment has come down from a high of 17 percent, but it is still 12 percent, and over 30 percent among youth—those that haven’t emigrated. Out of a population of 10.4 million, some 485,000 young people emigrated from 2011 to 2014.


In what one leftwing party member told the Financial Times was an “unseemly interference” in the election, Standard & Poor’s upgraded Portugal’s credit rating just two weeks before the election. S&P has long been accused of politicizing its credit ratings.


Forward Portugal is already backing away from some of its more bombastic attacks on the Left, and Coelho says his coalition would enter into “necessary agreements” with the Socialists in the future. Most commentators think the new parliamentary alignment is too unstable to last long.


The question now is, can the Left unite to roll back the four years of austerity that has impoverished the country? One in five Portuguese are below the poverty line of $5,589 income a year, and the minimum wage is $584 a month. Portugal has one of the greatest income disparities in Europe—the top 20 percent earn six times more than the bottom 20 percent—and education levels are among the lowest in the EU.


But much of the Left is not on the same page. Indeed, it did surprising well in the election considering its message was hardly consistent.


The Socialist Party is still saddled with the fact that it instituted the austerity policies in 2011 when financial speculators in the rest of Europe drove up interest rates on borrowing. Contrary to the Right’s charge, the debt was due to financial speculation, not spending. The Socialists also had a corruption problem, so voters turned to the Right in the 2011 election.


With an absolute majority in the parliament, the rightist alliance slashed wages, cut back pensions, privatized public property and raised taxes. One of the few checks on the slash-and-burn assault was the Portuguese Constitutional Court, which blocked some of the more onerous austerity measures.


In this election the Socialists ran against the austerity policies, but the message voters got was mixed: roll back austerity, but abide by EU rules. However, given that it was the EU rules that brought on the austerity, it was a message that voters found hard to decipher. The Socialists were also silent on the debt, a large part of which is of a questionable nature.


A study by the Committee for a Citizen’s Audit on the Public Debt found that most debt was not due to government spending, but massive tax cuts and rising interest rates. The Committee concluded that as much as 50 percent to 60 percent of most countries debts were “illegitimate.”


The Left Bloc—which is close to Greece’s Syriza and Spain’s anti-austerity Podemos Party—not only opposed the austerity, it demanded debt reduction. Indeed, without debt reduction—a so-called “haircut”—it is unlikely that small countries, like Greece, Portugal or Ireland, can ever emerge from their current economic crises. After years of austerity, Portugal’s debt is still among the highest in Europe.


The Communist/Green alliance did marginally better than 2011, although the Left Bloc passed if for the first time. The Communist Party has a strong reservoir of respect in Portugal because of its long resistance to the 48-year military dictatorship. It has been a consistent opponent of the austerity policies, but so far it has shown little interest in working with the Socialists, which its leaders say is Forward Portugal light. The Party calls for an exit from the Eurozone, the 19 countries in the 28-member European Union that use the Euro. While some on the Left also want to leave the Eurozone, the Socialist Party is committed to the common currency.


However, there is agreement scross the Left around privatizations and cuts, and that the crisis in housing, education, and daily life—including food and medical care—has to be addressed. Without a majority, the Right will have to back away from more austerity and plans to privatize some schools and public pensions.


Does this election have reverberations outside of Portugal? The Wall Street Journal’s headline on the outcome was that it was “a cause for concern” for Spain’s rightwing government, which goes before the voters in about 10 weeks.


But if there is one thing that the recent election in Greece made obvious, it is that small countries cannot take on the power of the EU by themselves. The European Union is now the single most powerful alliance of capital on the planet, and it is not a bit shy about crushing anything it sees as a potential threat. However, the Troika’s efforts to scare—and bribe—Portugal failed.


So, what is to be done?


In the long run, a common currency was a bad idea for everyone but Germany, Austria, the Netherlands and the banks, but a quick exit would be like pulling a spear out of your leg—without careful preparations you are likely to hemorrhage to death. While the ultimate goal should be to move away from the euro, the process may take awhile.


One thing the European Union is vulnerable on is democracy. Being in the EU essentially means abandoning sovereignty. The recently signed agreement between the Troika and Greece says that the former can veto any policy it does not agree with, including anti-corruption legislation aimed at tax scofflaws. Essentially, democracy has become dispensible.


Syriza and the Portuguese Left successfully made this an issue in their campaigns, and it has great potential to become a pan-European issue. At the same time, there is potential danger with the issue of sovereignty, and the Left must clearly distinguish itself from the xenophobic European Right’s opportunistic adoption of the issue.


Ronan Burtenshaw, vice-chair of the Irish Congress of Trade Union Youth Committee and Coordinator of the Greek Solidarity Committee in Ireland, has proposed that the European Left look to Latin America for a model.


Mercosur, the huge Latin American trading block, is the third largest on the planet, but it doesn’t dictate economic policy to its members. The Bolivarian Alliance, ALBA, draws progressive countries into a political and economic union, and the Community of Latin American and Caribbean States has replaced the U.S. dominated Organization of American States. The Bank of the South offers development loans without the rigid strictures of the IMF and the World Bank.


Latin America is a counter to the European mantra that “there is no alternative” to economic crisis and debt but austerity. Each country in the region developed its own way of turning away from the market-driven, austerity laden “Washington consensus” that blitzed economies from Brasilia to Santiago during the 1980s and ‘90s. And the Left played an important role in establishing continent-wide political and economic connections, specifically in Venezuela, Brazil, Argentina, Ecuador and Bolivia.


There are, of course, differences. Many in the European Left contrast Argentina’s successful replacement of the dollar with the peso and its refusal to service its debt with Syriza’s acceptance of the Troika’s demands.


But Argentina is a big, powerful country, self-sufficient in energy and food. Greece—or Portugal or Ireland—is neither. And while Argentina had support from other countries in the region, Greece stood alone, even from parties like the French Socialists and the German Social Democrats.


Somehow the Left will have to chart a perilous passage between resisting austerity on one hand, and not committing suicide on the other—or rather, allowing the Troika to impoverish its base even more than it currently has. How that will happen is hardly clear, but solidarity is its essential ingredient, along with a willingness to work with others.


The Left will have to persuade or pressure center-left forces to abandon their romance with the euro and confront the social crisis created by austerity. Social democratic parties should take note that moving to the right does not translate into political power. Syriza smoked the center forces in Greece, and the Left Bloc made the biggest gains in Portugal.


To a certain extent, this process is underway with the election of long-time leftist Jeremy Corbyn to head the British Labor Party.


In his speech at the Fete de la Rose this past summer, former Greek finance minister, Yanis Varoufakis, told the Socialist Party gathering that what the Left in Greece had done was to give Europeans “a sense that democracy can change things.” Portugal was another step on that path, with Spain due up in December and Ireland in April.

















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Europe’s Elections: A Coming Storm?

Europe’s Elections: A Coming Storm?

Dispatches From The Edge

Aug. 26, 2015



Between now and next April, four members of the European Union (EU) will hold national elections that will go a long ways toward determining whether the 28-member organization will continue to follow an economic model that has generated vast wealth for a few, widespread misery for many, and growing income inequality. The choice is between an almost religious focus on the “sin” of debt and the “redemption” of austerity, as opposed to a re-calibration toward economic stimulus and social welfare.


The backdrop for elections in Greece, Portugal, Spain and Ireland is one of deep economic crisis originally ignited by the American financial collapse of 2007-08. That meltdown burst real estate bubbles all over Europe—particularly in Spain and Ireland—and economies from the Baltic to the Mediterranean went off the rails. Countries like Ireland, Greece, Spain and Portugal saw their GDPs plummet, their banks implode and their unemployment rates reach levels not seen since the Great Depression of the 1930s. Debt levels went through the ceiling.


The response of the EU to the crisis was a carbon copy of the so-called “Washington consensus” that the International Monetary Fund (IMF) applied to indebted Latin American countries during the 1990s: massive cutbacks in government spending, widespread layoffs and double digit tax raises on consumers.


Instead of lower debt levels and jumpstarting economies, however, the IMF strictures for Latin America did exactly the opposite. Cutbacks, layoffs, and high taxes impoverished the majority, which in turn tanked economies and raised debt levels. The formula was a catastrophe that Latin America is still digging itself out from.


But the strategy was very good for a narrow stratum, led by banks, speculators, and multinational corporations. U.S, British, German, Dutch and French banks helped inflate real estate bubbles by pouring low interest money into building binges. The banks certainly knew they were feeding a bubble—land prices in Spain and Ireland jumped 500 percent.


However, as economist Joseph Stiglitz points out, the banks had a trick: their private debts would be paid for by the public. Taxpayers did pick up the tab, but only by borrowing money from the Troika—the IMF, the European Central Bank, and the European Commission—and accepting the same conditions that tanked Latin American in the 1990s. Needless to say, history was replicated on another continent.


The upcoming elections will pit the policies of the Troika against anti-austerity movements in Portugal, Greece, Spain and Ireland. If these movements are to succeed, they will first have to confront the mythology that the current economic crisis springs from avaricious pensioners, entitled trade unionists, and free spending bureaucracies, rather than irresponsible speculation by banks and financiers. And they will have to do so in a political arena in which their opponents control virtually all of the mass media.


Never have so few controlled so much that informs so many.


The election terrain is enormously complex, and, while resistance to austerity gives these movements a common goal, the political geography is different in each country. Plus the Left essentially has to fight on two fronts: one, against the policies of the Troika, and two, against a rising tide of racist, xenophobic and increasingly violent right-wing movements that have opportunistically adopted anti-austerity rhetoric. The openly Nazi Golden Dawn in Greece and the fascist National Front in France may attack the policies of the EU, but their programs have nothing in common with organizations like Greece’s Syriza, Ireland’s Sinn Fein, Spain’s Podemos, or Portugal’s Left Bloc.


Size counts in this coming battle. Because Greece makes up only 1.3 percent of the EU’s GDP, the Troika could force Greece to make a choice between, in the words of former Syriza economic minister Yanis Varoufakis, “suicide or execution”—suicide if Syriza accepted another round of austerity, execution of the country’s banks and financial structure if it did not. Because it is small, Greece’s death would scarcely cause a ripple in the EU. A similar situation exists for Ireland and Portugal.


But not for Spain. Spain is the 14th largest economy in the world and the fifth largest economy in the EU. Bankrupting it or driving it out of the Eurozone—the 19 countries that use the euro instead of a national currency—would cause more than a ripple, it could sink the entire enterprise. That is why the austerity measures the Troika impressed on Spain were severe, but not as onerous as those inflicted on Ireland, Portugal and Greece.


Besides trying to ameliorate the worst aspects of the Troika program, the anti-austerity Left faces an existential question: should their indebted countries remain in the Eurozone, or should they call for withdrawal and a return to national currencies?


The Eurozone has been a disaster for most its members, except Germany, and, to a certain extent, Austria and the Netherlands. While the currency is common, there is no shared responsibility for the results of economic unevenness. In the U.S., big economies like California help pay the way for Mississippi, under the assumption that a common interstate market is a good thing and why shouldn’t the wealthier states help the less fortunate? In the Eurozone, it is every man for himself, and if you’re in trouble, talk to the Troika loan sharks.


Since the euro is controlled by the European Central Bank—read Germany—countries can’t manipulate their currencies to help get themselves out of trouble the way the U.S., China, Russia, India, Brazil, Great Britain, and others do. A currency union doesn’t work without a political union, and such a union is a bad idea when it puts countries like Germany and Greece on the same playing field. In the end, the big dogs dominate.


While the issues throughout the Eurozone may be similar, each country is different. A short scorecard:


Greece-Sept. 20


Syriza, the leftwing party that won the last election, has split with 25 former Syriza deputies who formed the Popular Union Party and called for full resistance to the Troika’s demands. Despite retreating from his previous opposition to any new austerity, polls show Syriza’s former prime minister, Alexis Tsipras, is popular. The parties that formerly dominated Greece—the right-wing New Democracy and center-left PSAOK—have been badly discredited, and the centrist Potami Party doesn’t have a clear program, except none of the above. The Left should do well, but it will be divided. Division in the face of the Troika is perilous, but this battle is a long way from over, and there are creative ways to resist the Troika without taking it head on. A civil war within the Left, however, could be disastrous.


Portugal-Oct. 4


The country is currently dominated by the conservative Popular Party/Social Democratic Party coalition that holds 132 seats in the 230-seat assembly. But polls show the opposition is running neck and neck with the Socialists (74 seats), The Socialists put in the austerity program, but have since turned against it. The leftwing United Democratic Coalition (16 seats), an alliance of the Communist Party and the Greens, and the Left Bloc (8 seats), looks like they will pick up deputies. There is a strong possibility that the conservatives will fall, and that the center-left and left opposition will form a coalition government. The Left already controls 98 seats. It will need 116 to form a government.


Spain, December, 2015


The political situation in Spain is fluid. The rightwing ruling Popular Party is in trouble because of several major corruption scandals and its enthusiastic support for austerity. The Socialist Party has recently increased its popularity but it was the Socialists that instituted the austerity policies. Support for the leftwing anti-austerity Podemos Party appears to have stalled, but it has elected, or helped to elect, the mayors of Madrid, Barcelona, Cadiz and Zaragoza. Unlike Syriza, which is a coalition of left parties, Podemos is a grassroots organization that knows how to get the voters out.


There is also the center-right Ciudadanos Party that did well in spring elections, but is anti-immigrant and anti-abortion, and whose economic program is at best opaque.   Those things are not likely to translate into major electoral gains. Whatever happens, Spain is no longer a two party country, and the Left will play a key role in any coalition building to form a government.


There is a wildcard in this election: the newly minted Citizens Security Law, which the Popular Party rammed through Parliament and is aimed at suppressing demonstrations, criticism of the government, and free speech. It is clearly aimed at shutting down Podemos.



Ireland, April 2016


“Volatile” is the only way one can describe the Irish Republic, where the polls shift from month to month. The economy is growing, but the Troika’s austerity regime is still raw. Over 100,000 mortgages are under water and since 2008, some 400,00—mostly young professionals—have fled to Britain, Canada, Australia, New Zealand and the U.S., inflicting a crippling brain drain on the island.


The centrist coalition of Fine Gael and Labor currently rules, but that is likely to change after the election. Polls show Fine Gael at 28 percent, and Labor at 7 percent. At 21 percent, the leftwing, anti-austerity Sinn Fein Party is in the number two post, although its support has fallen off slightly since last year. However, the popularity of its leader, Gerry Adams, has been climbing. Lastly, there is a mix of independent parties, ranging from Greens to socialists, supported by 24 percent of the voters. Most are anti-austerity and potential coalition partners if the ruling parties fall. The conservative Fianna Fail Party is polling about 20 percent.


In these upcoming elections, the Left will have to confront the enormous power of the Troika on the one hand, and on the other, deliver services and jobs. It will also have to clearly differentiate itself from the racism of the right on the immigration crisis and challenge the unwillingness of their own governments to find a humane solution to the problem. Since of the bulk of the refugees are generated by the irresponsible policies of countries like France, Britain, Italy and Germany in Afghanistan, Libya, and Syria, the Left must clearly link the foreign adventurism of their elites to the flood of people now seeking safety from the storms those elites help generate.


None of this will be easy and disunity will make it harder. The Left elsewhere in the world cannot expect small countries like Greece, Portugal and Ireland to take on the power of international capital by themselves. Not since the rise of Nazism has there been such a pressing need for international solidarity. In a very real way, we are all Greeks, Spanish, Portuguese and Irish. These elections are as much about the U.S. as they are about the parties and movements that have decided to resist a species of capitalism that is particularly red of tooth and claw.






















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Europe’s New Barbarians

Europe’s New Barbarians

Dispatches From The Edge

Aug. 28, 2015


On one level, the recent financial agreement between the European Union (EU) and Greece makes no sense: not a single major economist thinks the $96 billion loan will allow Athens to repay its debts, or to get the economy moving anywhere but downwards. It is what former Greek Economic Minister Yanis Varoufakis called a “suicide” pact, with a strong emphasis on humiliating the leftwing Syriza government.


Why construct a pact that everyone knows will fail?


On the Left, the interpretation is that the agreement is a conscious act of vengeance by the “Troika”—the European Central Bank, the European Commission and the International Monetary Fund—to punish Greece for daring to challenge the austerity program that has devastated the economy and impoverished its people. The evidence for this explanation is certainly persuasive. The more the Greeks tried to negotiate a compromise with the EU, the worse the deal got. The final agreement was the most punitive of all. The message was clear: rattle the gates of Heaven at your own peril.


It was certainly a grim warning to other countries with strong anti-austerity movements, in particular Portugal, Spain and Ireland.


But austerity as an economic strategy is about more than just throwing a scare into countries that, exhausted by years of cutbacks and high unemployment, are thinking of changing course. It is also about laying the groundwork for the triumph of multinational corporate capitalism and undermining the social contract between labor and capital that has characterized much of Europe for the past two generations.


It is a new kind of barbarism, one that sacks countries with fine print.


Take Greece’s pharmacy law that the Troika has targeted for elimination in the name of “reform.” Current rules require that drug stores be owned by a pharmacist, who can’t own more than one establishment, that over the counter drugs can only be sold in drug stores, and that the price of medicines be capped. Similar laws exist in Spain, Germany, Portugal, France, Cyprus, Austria and Bulgaria, and were successfully defended before the European Court of Justice in 2009.


For obvious reasons multinational pharmacy corporations like CVS, Walgreen, and Rite Aid, plus retail goliaths like Wal-Mart, don’t like these laws, because they restrict the ability of these giant firms to dominate the market.


But the pharmacy law is hardly Greeks being “quaint” and old-fashioned. The U.S. state of North Dakota has a similar law, one that Wal-Mart and Walgreens have been trying to overturn since 2011. Twice thwarted by the state’s legislature, the two retail giants recruited an out-of-state signature gathering firm and poured $3 million into an initiative to repeal it. North Dakotans voted to keep their pharmacy law 59 percent to 41 percent.


The reason is straightforward: “North Dakotans have pharmacy care that outperforms care in other states on every key measure, from cost to access,” says author David Morris. Drug prices are cheaper in North Dakota than in most other states, rural areas are better served, and there is more competition.


The Troika is also demanding that Greece ditch its fresh milk law, which favors local dairy producers over industrial-size firms in the Netherlands and Scandinavia. The EU claims that, while quality may be affected, prices will go down. But, as Nobel Laureate economist Joseph Stiglitz found, “savings” in efficiency are not always passed on to consumers.


In general, smaller firms hire more workers and provide more full time jobs than big corporations. Large operations like Wal-Mart are more efficient, but the company’s workforce is mostly part time and paid wages so low that workers are forced to use government support services. In essence, taxpayers subsidize corporations like Wal-Mart.


A key demand of the Troika is “reform” of the labor market to make it easier for employers to dismiss workers, establish “two-tier” wage scales—new hires are paid less than long time employees—and to end industry-wide collective bargaining. The latter means that unions—already weakened by layoffs—will have to bargain unit by unit, an expensive, exhausting and time consuming undertaking.


The results of such “reforms” are changing the labor market in places like Spain, France, and Italy.


After years of rising poverty rates, the Spanish economy has finally begun to grow, but the growth is largely a consequence of falling energy prices, and the jobs being created are mostly part-time or temporary, and at considerably lower wages than pre-2007. As Daniel Alastuey, the secretary-general of Aragon’s UGT, one of Spain’s largest unions told the New York Times, “A new figure has emerged in Spain: the employed person who is below the poverty threshold.”


According to the Financial Times, France has seen a similar development. In 2000, some 25 percent of all labor contracts were for permanent jobs. That has fallen to less than 16 percent, and out of 20 million yearly labor contracts, two-thirds are for less than a month. Employers are dismissing workers, than re-hiring them under a temporary contract.


In 1995, temporary workers made up 7.2 percent of the jobs in Italy. Today, according to the Financial Times, that figure is 13.2 percent, and 52.5 percent for Italians aged 15 to 24. It is extremely difficult to organize temporary workers, and their growing presence in the workforce has eroded the power of trade unions to fight for better wages, working conditions and benefits.


In spite of promises that tight money and austerity would re-start economies devastated by the 2007-2008 financial crisis, growth is pretty much dead in the water continent-wide. And economies that have shown growth have yet to approach their pre-meltdown levels. Even the more prosperous northern parts of the continent are sluggish. Finland and the Netherlands are in a recession.


There is also considerable regional unevenness in economic development. Italy’s output contracted 0.4% in 2014, but the country’s south fell by 1.3%. Income for southern residents is also plummeting. Some 60% of southern Italians live on less than $13,400 a year, as compared to 28.5% of the north. “We’re in an era in which the winners become ever stronger and weakest move even further behind,” Italian economist Matteo Caroli told the Financial Times.


That economic division of the house is also characteristic of Spain, While the national jobless rate is an horrendous 23.7 percent, the country’s most populous province in the south, Andalusia, sports an unemployment rate of 41 percent. Only Spanish youth are worse off. Their jobless rate is over 50 percent.


Italy and Spain are microcosms for the rest of Europe. The EU’s south—Italy, Portugal, Spain, Greece, Cyprus, and Bulgaria—are characterized by high unemployment, deeply stressed economies, and falling standards of living. While the big economies of the north, France, Great Britain, the Netherlands, and Germany, are hardly booming—the EU growth rate over all is a modest 1.6 percent—they are in better shape than their southern neighbors.


Geographically, Ireland is in the north, but with high unemployment and widespread poverty brought on by the austerity policies of the EU, it is in the same boat as the south. Indeed, Greek Finance Minister Euclid Tsakalotos told the annual conference of the leftwing, anti-austerity party Sinn Fein that Greece considered the Irish “honorary southerners.”


Austerity has become a Trojan horse for multinational corporations, and a strategy for weakening trade unions and eroding democracy. But it is not popular, and governments that have adopted it have many times found themselves driven out of power or nervously watching their polls numbers fall. Spain’s rightwing Populist Party is on the ropes, Sinn Fein is the second largest party in Ireland, Portugal’s rightwing government is running scared, and polls indicate that the French electorate supports the Greeks in their resistance to austerity.


The Troika is an unelected body, and yet it has the power to command economies. National parliaments are being reduced to rubber stamps, endorsing economic and social programs over which they have little control. If the Troika successfully removes peoples’ right to choose their own economic policies, then it will have cemented the last bricks into the fortress that multinational capital is constructing on the continent.


In 415 BC, the Athenians told the residents of Milos that they had no choice but to ally themselves with Athens in the Peloponnesian War. “The powerful do whatever their power allows and the weak simply give in and accept it,” Thucydides says the Athenians told the island’s residents. Milos refused and was utterly destroyed. The ancient Greeks could out-barbarian the barbarians any day.


But it is not the 5th century BC, and while the Troika has enormous power, it is finding it increasingly difficult to rule over 500 million people, a growing number of whom want a say in their lives. Between now and next April, four countries, all suffering under the painful stewardship of the Troika, will hold national elections: Portugal, Greece, Spain and Ireland. The outcomes of those campaigns will go a long way toward determining whether democracy or autocracy is the future of the continent.



















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