Monthly Archives: August 2015

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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The U.S./Turkey Deal-Disaster in the Making

U.S.-Turkish Deal: Disaster in the Making

Dispatches From the Edge

July 29, 2015

 

The recent agreement between Turkey and the U.S. to cooperate against the Islamic State (IS) in Syria brings to mind the sociologist C. Wright Mills description of those who make American foreign policy as “crackpot realists”: realists about advancing their careers, crackpots about the policies they pursue.

 

The plan will allow the U.S. to use Turkish airbases to bomb the IS in exchange for Washington’s support for Ankara re-igniting its 40 year old war with the Kurds. The U.S. will also buy in to creating a “buffer zone” on Syria’s northern border that, according to Turkish Prime Minister Ahmet Davutoglu, will allow “Moderate forces like the Free Syrian Army…to take control of areas freed from the ISIL,” or IS. One U.S. official describe the agreement as “a game changer.”

 

In reality it will entangle the U.S. more deeply in the Syrian civil war and give cover to Turkish President Recep Tayyip Erdogan’ gambit to deepen ethnic divisions in Turkey as part of a strategy to bring his conservative Justice and Development Party (AKP) back into power.

 

The “plan” will also toss the Kurds, one of Washington’s most reliable allies in the fight against the Islamic State, under a bus. “The Americans are not very clever in calculating this sort of thing,” Kamran Karadaghi, former chief of staff to Iraqi President and Kurdish leader Jalal Talabani, told the Independent’s Patrick Cockburn. “Maybe they calculate that with Turkey on their side, they don’t need the Kurds.”

 

While Turkey is also bombing the IS, the major focus of its attacks have been the Kurds. On July 23 a few Turkish F-16s bombed a handful of IS targets in Northern Syria. In contrast, 75 Turkish F-16s and F-4Es pounded the Kurdish Workers Party (PKK) with 300 smart bombs, striking hundreds of targets.

 

Asked about the bombings, U.S. State Department official Brett McGurk said that Washington recognized Turkey’s “right to self-defense.”

 

The massive bombing attack on the PKK in Iraq’s Qandil Mountains shatters a two-year truce in a four-decade old war that has killed more than 40,000 people. The ostensible reason for re-starting a war with the Kurds was a PKK assassination of two Turkish policemen following an Islamic State bombing that killed 31 young Kurdish activists in the Turkish border town of Suruc July 20. The Kurds have long complained that the Erdogan government has encouraged the Syrian insurgents, including turning a blind eye to the activities of the IS.

 

The real reason behind ending the truce, however, was not the assassination of the two policemen, but Erdogan’s calculated campaign to spin up a new round of ethnic hated and force another election.

 

First, there are no “moderate” forces in the Syrian civil war. The Free Syrian Army is, at best, a marginal player. The major antagonists of the Assad regime are Islamic extremists, the al-Qaeda associated Nusra Front , Ahrar al-Sham, and the Islamic State. Indeed, one reason why the Turkish Army is so wary of getting involved in Syria is because it doesn’t want to be allied with the groups leading the fighting. A “buffer” zone will allow those extremist groups to take refuge in a zone protected by Turkish air power.

 

Erdogan is fixated on overthrowing Syrian President Bashar al-Assad, arguing that a regime change in Damascus will weaken the IS. But many analysts think the exact opposite and cite the Libya experience as an example. If the Assad regime falls, the extremists, not the moderates, will fill the vacuum. A spillover of violence into Jordan and Lebanon is almost guaranteed, just as the Libya debacle has spread unrest throughout Central Africa.

 

The “buffer” is also directed at the Kurdish forces that have been so effective in fighting the IS, successfully defending the city of Kobani and liberating several other towns.

 

Bombing is only effective if it is coordinated with ground forces, and right now the only effective ground forces fighting the IS are the Kurds, the ones we just threw under a bus. Bombing by itself has never worked, as the Saudis are rapidly finding out in Yemen.

 

As for the Kurds, a little history.

 

One of Erdogan’s major accomplishments as prime minister was a 2012 ceasefire with the PKK and a promise to deliver more autonomy to Turkey’s 25 million Kurds. Erdogan saw the ceasefire as a way to bring the Kurds on board in his campaign to change the Turkish constitution and create a centralized and powerful presidency. With this in mind, he successfully ran for President in 2014.

 

But the promised reforms in governance, education and language rights—the Kurds speak several dialects, none of them Turkish—never came through, because the AKP also wanted to attract rightwing nationalist voters who were deeply hostile to anything that smacked of Kurdish autonomy.

Nor is the Kurdish community monolithic. Many Kurds—most of them older, rural, and deeply religious—supported the AKP because for them Islam trumped Kurdish nationalism.

 

But then AKP made a major mistake.

 

When the Islamic State besieged the town of Kobani, Turkey refused to help the Kurdish defenders. Indeed, Erdogan equated “Kurdish terrorists” with the IS. Demonstrations demanding that Turkey come to Kurds’ aid were brutally suppressed by the police, and scores of Kurds were killed. Kobani and the police attacks shifted sentiment in the Kurdish community and former AKP backers transferred their support to the left wing People’s Democratic Party (HDP).

 

The HDP also transformed itself from a Kurdish-based party to a national organization, winning 1.1 million non-Kurdish votes and 80 seats in the 2015 parliamentary elections, effectively denying the AKP its majority and derailing Erdogan’s drive to create a powerful executive.

 

The rightwing nationalist Nation Action Party (MHP) also did well in those elections, winning 80 seats.

 

Erdogan has maneuvered ever since to force new elections. By attacking the Kurds, he hopes to make the HDP once again into a Kurdish party by forcing it to choose between its base and the rest of Turkey. And he is gambling that the assault on the Kurds will rally right-wing nationalists to abandon the MHP and move to the AKP. If a lot of Kurds and Turks die because of this cynical stratagem, so be it.

 

Why is the White House going along with this madness?

 

In part, because a number of U.S. State Department officials have the same obsession with overthrowing Assad as Erdogan does. In part because the U.S. military generally manages to convince civilians that dropping a lot of bombs will work, all experience to the contrary. And partly that crackpot thing.

 

As Hugh Roberts points out in his excellent analysis of Syria in the London Review of Books, there is a possible path out, but it is almost exactly the opposite of the one Turkey and the U.S. are pursuing.

 

To begin with, the primary demand that Assad has to go before there can be serious talks is aimed at torpedoing any prospect of negotiations. No one—least of all Assad—is going to negotiate his own demise, and the Syrian Army and the country’s Alawite, Christian and Druze minorities know exactly what will happen to them if the Damascus regime collapses. The Nusra Front may not as brutal as the IS, but al-Qaeda only looks good if your standard of comparison is the Islamic Front. Anyone who believes the “moderates” will take over should consider unicorn hunting as a profession.

 

In the long run Assad should go, and one suspects that Syrians will vote him out at some point. But the “out first” demand is just a way to continue the war. The only real hope is a ceasefire and a national unity government representative of Syria’s enormously diverse population. An arms embargo on all parties, and a commitment to block fighters infiltrating the country would encourage the parties to step back from the current stalemate and consider negotiations.

 

Will that get rid of IS? Nope. The Islamic State is an actual state, with a large population, a lot of whom are not just waiting to rise against their Islamic captors. The IS is brutal—though the Arabs suffered far more deaths in the invasion of Iraq—but it is not corrupt. To imagine that the inept and corruption-riddled Iraqi Army is up for a serious scrap is delusional.

 

The Shiite militias are tough and capable, but also very sectarian, and many Sunnis simply don’t trust them.

 

The Turkish Army does not want to go into Syria, and there is zero support in any Western country for a replay of Iraq and Afghanistan. On top of which, a U.S. or NATO invasion is exactly what the IS would like to provoke. Ironically, the only force that could possibility defeat the Islamic State is the Syrian Army. Getting from here to there, however, will require a diplomatic sea change in the region. But one thing is certain: the current U.S.-Turkish “plan” will make everything worse.

 

How do these crackpots come up with this stuff?

 

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