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The Spanish Labyrinth

The Spanish Labyrinth

Dispatches From The Edge

June 15, 2018

 

As the socialist-led government takes over in Spain, newly minted Prime Minister Pedro Sanchez faces at least two daunting tasks: cleaning up the wreckage wrought by years of European Union (EU) enforced austerity and resolving the Catalan crisis exacerbated by Madrid’s violent reaction to last fall’s independence referendum. Unfortunately, his Party’s track record is not exactly sterling on either issue.

 

Sanchez, leader of the Socialist Workers Party (PSOE), patched together parties in Catalonia and the Basque region, plus the leftist Podemos Party, to oust long-time Prime Minister Mariano Rajoy of the People’s Party (PP). But is the telegenic former economics professor up to the job, and will his Party challenge the economic program of the EU’s powerful “troika”—the International Monetary Fund, the European Central Bank and the European Commission?

 

The answers to those questions are hardly clear, and in many ways the cross currents and rip tides of Spanish politics still resemble Gerald Brenan’s classic study of the Civil War, The Spanish Labyrinth.

 

While the issue that brought Rajoy down was corruption—a massive kickback scheme that enriched scores of high-ranking PP members— his Party was already weakened by the 2015 election, and he has been forced to rely on the conservative Ciudadanos Party based in Catalonia to stay in power. In short, it was only a matter of time before he fell.

 

Sanchez promises to address the “pressing social needs” of Spaniards, although he has been vague about what that actually means. But Spain is hurting. While economic growth returned in 2013, unemployment is still at 16.1, and youth joblessness is 35 percent. Rajoy took credit for the economy’s rebound from the massive financial meltdown in 2008, but there is little evidence that budget cuts and austerity did the trick. The two main engines for growth were cheap oil and a weak currency.

 

The job growth has mainly been in short term and temp jobs, with lower pay and fewer benefits. That is not specific to Spain, however. Of the 5.2 million jobs created in the EU between 2013 and 2016, some 2.1 million of them have been short term, “mini” jobs that have been particularly hard on young people. Many continue to live at home with their aging parents, and 400,000 have emigrated to other European countries.

 

Education, health care, and infrastructure have all deteriorated under a blizzard of budget cuts, and Sanchez will have to address those problems. His party’s record on the economy, however, has been more centrist than social democratic, and the PSOE basically accepts the neo-liberal mantra of tax cuts, deregulation and privatization. It was PSOE Prime Minister Jose Zapatero who sliced more than $17 billion from the budget in 2010, froze pensions, cut child care funds and home care for the elderly, and passed legislation making it easier to lay off workers.

 

It was anger at the Socialists over rising unemployment that swept Rajoy and the PP into power in 2011. The PSOE has never recovered from that debacle, dropping from 44 percent of the vote to 24.9 percent today. It has only 84 deputies in the Parliament, just 14 more than Podemos.

 

When Podemos leader Pablo Iglesias proposed forming a government of the left. Sanchez rejected it and instead appointed all PSOE people to the cabinet. However, he will have to rely on support from the left to stay in power, and there is no guarantee that it will be there unless the Socialists step away from their centrism and begin rolling back the austerity measures.

 

Sanchez has a mixed record on leftism vs. centrism. He was ousted from the Party’s leadership last year by the PSOE’s rightwing when he considered forming a united front of the left. It was the Party’s rank and file, angered at the rightwing Socialists that allowed Rajoy to form a minority government that put him back in power. So far, Sanchez has been unwilling to consider the kind of alliance of left parties that has been so successful in Portugal.

 

The new government will also need the support of the two Catalan parties, and that will likely be an uphill slog. The Catalans just elected a government that supports independence, although its President, Quim Torra has called for “talks.”

 

The current Catalonia crisis was ignited when Rajoy torpedoed a 2006 agreement between the Spanish government and the Catalan government that would have given the province greater local control over its finances and recognized the Catalan’s unique culture. Under the prodding of the PP, the Constitutional Court overturned the agreement and shifted the dispute from the political realm to a legal issue.

 

At the time, the idea of independence was marginal in Catalonia, but the refusal of Rajoy to even discuss the issue shifted it to the mainstream. “Independentism, which until 2010 was a decidedly minority option in Catalonia, has grown immensely,” according to Thomas Harrington, a Professor of Hispanic Studies at Trinity College, CT.

 

The Catalans began pressing for a referendum on independence—nearly 80 percent supported holding one—although it was initially seen as non-binding. Even though Podemos did not support the idea of independence, it backed the basic democratic right of the Catalans to vote on the issue. The PSOE, however, was as hard-nosed on the issue as Rajoy and the PP. Not only did the Socialists not support the right of the Catalans to vote, they backed Rajoy’s crackdown on the province, although they decried the violence unleashed on citizens trying to vote during last October’s referendum.

 

Some 2.3 million Catalans out of the 5.3 million registered voters went to the polls and overwhelmingly endorsed independence in spite of the fact that Rajoy sent some 10,000 National Police and Guardia Civil into the province to seize ballot, beat voters and injure more than 850 people. Legal procedures have been filed against over 700 mayors and elected officials, and the Catalan leadership is either in jail or on the run. While Sanchez said the crackdown was “a sad day for our democracy,” he will have a lot of explaining to do to the Catalan government.

 

Unlike Rajoy, Sanchez says he wants a dialogue with the Catalans, although he also says he intends to uphold the Spanish constitution, which does not permit secession.

 

Catalan society is deeply split. The big cities tend to be opposed to independence, as are many trade unions. The left is divided on the issue, but many young people support it. As the Financial Times’ Tobias Buck points out, “The younger generation, who have been schooled in Catalan and have less contact with the rest of Spain than their parents, are among the most enthusiastic backers of independence.”

 

It is also clear that the brutality of Rajoy’s assault has moved people in that direction, although polls show independence still does not have a majority. But in a sense, that is irrelevant. When almost half the population wants something that “something” has to be addressed, and if Buck is right about the demographics, time is running out for Madrid.

 

There are other serious constitutional issues that need to be addressed as well. Rural areas are greatly favored over cities. While it takes 125,000 voters in Madrid to elect a representative, in some rural areas it takes as few as 38,000. There is also a need to address Rajoy’s draconian laws against free speech and assembly.

 

Just how stable Sanchez’s government will be is unclear. He must keep the Basques and the Catalans on board and do enough on the economy to maintain the support of Podemos.

 

The PP is badly wounded, and the rightwing Ciudadanos Party—the only one that voted against the no confidence resolution—will be looking to fill that vacuum. Ciudadanos calls itself the “center,” but its economic policies are the same as those of the PP, and it is rabidly opposed to separatism. It performed poorly in the last election and in regional elections in Galicia and the Basque region. It did well in the recent Catalan elections, but that is because the Popular Party collapsed and its voters shifted to Ciudadanos.

 

Sanchez must recognize that the Catalan issue is political, not legal, and that force is not an option. As Napoleon Bonaparte’s Foreign Minister Talleyrand once remarked, “You can do anything you like with bayonets, except sit on them,” summing up the truism that repression does not work in the long run.

 

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Why Europe’s Center-Left Keeps Losing Elections

Italy, Germany & the EU’s Future

Dispatches From The Edge

Mar. 19, 2018

 

More than a quarter of a century ago, much of the European center-left made a course change, edging away from its working class base, accommodating itself to the globalization of capital, and handing over the post World War II social contract to private industry. Whether it was the “New Labour” of Tony Blair in Britain or Gerhard Schroder’s “Agenda 2010” in Germany, social democracy came to terms with its traditional foe, capitalism.

 

Today, that compact is shattered, the once powerful center-left a shadow of its former self, and the European Union—the largest trading bloc on the planet—is in profound trouble.

 

In election after election over the past year, social democratic parties went down to defeat, although center-right parties also lost voters. Last year’s election in the Netherlands saw the Labor Party decimated, though its conservative coalition partner also took a hit. In France, both the Socialist Party and the traditional conservative parties didn’t even make the runoffs. September’s elections in Germany saw the Social Democrats (GPD) take a pounding, along with their conservative alliance partners, the Christian Democratic Union and Christian Social Union. And Italy’s center-left Democratic Party was decisively voted out of power.

 

It would be easy to see this as a shift to the right. The neo-Nazi Alternative for Germany (AfG) has 92 seats in the Bundestag. The Dutch anti-Muslim Party for Freedom picked up five seats. The extreme rightist National Front made the runoffs in France. The racist, anti-immigrant Northern League took 17.5 percent of the Italian vote and is in the running to form a government.

 

But the fall of the center-left has more to do with the 1990s course change than with any rightward shift by the continent. As the center-left accommodated itself to capital, it eroded its trade union base. In the case of New Labour, Blair explicitly distanced the Party from the unions that had been its backbone since it was founded in 1906.

 

In Germany, the Social Democrats began rolling back the safety net, cutting taxes for corporations and the wealthy, and undermining labor codes that had guaranteed workers steady jobs at decent wages.

 

The European Union—originally touted as a way to end the years of conflict that had embroiled the continent in two world wars— became a vehicle for enforcing economic discipline on its 27 members. Rigid fiscal rules favored countries like Germany, Britain, Austria and the Netherlands, while straitjacketing countries like Greece, Italy, Spain, Portugal and Ireland, particularly in times of economic crisis.

 

Center-left parties all over Europe bailed out banks and financial speculators, while inflicting ruinous austerity measures on their own populations to pay for it. It became difficult for most people to distinguish between the policies of the center-right and the center-left.

 

Both backed austerity as a strategy for the debt crisis. Both weakened trade unions through “reforms” that gave employers greater power. Short-term contracts—so-called “mini jobs”—with lower wages and benefits replaced long-term job security, a strategy that fell especially hard on young people.

 

The recent Italian elections are a case in point. While the center-left Democratic Party (DP) bailed out several regional banks, its Labor Minister recommended that young Italians emigrate to find jobs. It was the Five Star Movement that called for a guaranteed income for poor Italians and sharply criticized the economics of austerity.

 

In contrast, the DP called for “fiscal responsibility” and support for the EU, hardly a program that addressed inequality, economic malaise, and youth unemployment. Euro-skeptic parties took 55 percent of the vote, while the Democrats tumbled from 41 percent four years ago to 19 percent.

 

In the German elections, the SPD did raise the issue of economic justice, but since the Party had been part of the governing coalition, voters plainly did not believe it. The Party’s leader Martin Schulz, , called for a “united states of Europe,” not exactly a barnburner phrase when the EU is increasingly unpopular.

 

Breaking a pre-election promise to go into opposition, the SPD has re-joined Merkel’s “Grand Coalition.” While the SPD landed some important cabinet posts, history suggests the Party will pay for that decision. It also allows the neo-Nazi AfG to be the official opposition in the Bundestag, handing it a bully pulpit.

 

The unwillingness of Europe’s social democrats to break from the policies of accommodation has opened an economic flank for the right to attack, and the center-left’s unwillingness to come to grips with immigration makes them vulnerable to racist and xenophobic rhetoric. Both the Italian and German center-left avoided the issue during their elections, ceding the issue to the right.

 

Europe does have an immigration problem, but it is not the right’s specter of “job-stealing, Muslim rapists” overrunning the continent. EU members—most of all Italy—have a shrinking and increasingly aged population. If the continent does not turn those demographics around—and rein in “mini jobs” that discourage young workers from having children—it is in serious long-term trouble. There simply will not be enough workers to support the current level of pensions and health care.

 

In any case, many of the “immigrants” are EU members—Poles, Bulgarians, Greeks, Spaniards, Portuguese and Romanians—looking for work in England and Germany because their own austerity-burdened economies can’t offer them a decent living.

 

The center-left did not buy into the right’s racism, but neither did it make the point that immigrants are in the long-term interests of Europe. Nor did it do much to challenge the foreign policy of the EU and NATO that actively aids or abets wars in Afghanistan, Yemen, Somalia and Syria, wars that fuel millions of those immigrants.

 

One of the most telling critiques that Five Star aimed at the DP was that the Party supported the overthrow of the Libyan government and the consequent collapse of Libya as a functioning nation. Most the immigrants headed for Italy come from, or through, Libya.

 

When center-left parties embraced socially progressive policies, voters supported them. In Portugal two left parties formed a coalition with the Social Democrats to get the economy back on track, lower the jobless rate, and roll back many of the austerity measures enforced on the country by the EU. In recent local elections, voters gave them a ringing endorsement.

 

Jeremy Corbyn took the British Labour Party to the left with a program to re-nationalize railroads, water, energy and the postal service, and Labour is now running neck and neck with the Conservatives. Polls also indicate that voters like Labour’s program of green energy, improving health care, and funding education and public works.

 

The examples of Portugal and Britain argue that voters are not turning away from left policies, but from the direction that the center left has taken over the past quarter century.

 

The formulas of the right—xenophobia and nationalism—will do little to alleviate the growing economic inequality in Europe, nor will they address some very real existential problems like climate change. The real threat to the Dutch doesn’t comes from Muslims, but the melting of the Greenland ice cap and the West Antarctic ice sheet, which, sometime in the next few decades, will send the North Sea over the Netherland’s dikes.

 

When Europe emerged from the last world war, the left played an essential role in establishing a social contract that guaranteed decent housing, health care and employment for the continent’s people. There was still inequality, exploitation, and greed—it is, after all, capitalism—but there was also a compact that did its best to keep the playing field level. In the words of Mette Frederiksen, a leading Danish social democrat, “to save capitalism from itself.”

 

The Thatcher government in Britain and the Reagan government in Washington broke that compact. Taxes were shifted from corporations and the wealthy to the working class and poor. Public services were privatized, education defunded, and the safety net shredded.

 

If the center-left is to make a comeback, it will have to re-discover its roots and lure voters away from xenophobia and narrow nationalism with a program that improves peoples’ lives and begins the difficult task of facing up to what capitalism has wrought on the planet.

 

—30—

 

Conn Hallinan can be read at dispatchesfromtheedgeblog.wordpress.com and middlempireseries.wordpress.com

 

 

 

 

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Brexit and A Brave New World

Brexit & A Brave New World

Dispatches From The Edge

Oct. 31, 2017

 

As the clock ticks down on Britain’s exit from the European Union, one could not go far wrong casting British Labour Party leader Jeremy Corbyn as the hopeful Miranda in Shakespeare’s Tempest: ”How beauteous mankind is! O brave new world that has such people in’t.” And Conservative Party Prime Minister Theresa May as Lady Macbeth: “Out damned spot, out, I say!”

 

With the French sharpening their knives, the Tories in disarray, the Irish demanding answers, and a scant 17 months to go before Brexit kicks in, the whole matter is making for some pretty good theater. The difficulty is distinguishing between tragedy and farce.

 

The Conservative’s Party’s Oct. 1-4 conference in Manchester was certainly low comedy. The meeting hall was half empty, and May’s signature address was torpedoed by a coughing fit and a prankster who handed her a layoff notice. Then the Tories’ vapid slogan “Building a country that works for everyone” fell on to the stage. And several of May’s cabinet members were openly jockeying to replace her.

 

In contrast, the Labour Party’s conference at Brighton a week earlier was jam packed with young activists busily writing position papers, and Corbyn gave a rousing speech that called for rolling back austerity measures, raising taxes on the wealthy and investing in education, health care and technology.

 

Looming over all of this is March 2019, the date by which the complex issues involving Britain’s divorce from the EU need to be resolved. The actual timeline is even shorter, since it will take at least six months for the European parliament and the EU’s 28 members to ratify any agreement.

 

Keeping all those ducks in a row is going to take considerable skill, something May and the Conservatives have shown not a whit of.

 

The key questions to be resolved revolve around people and money, of which the first is the stickiest.

 

Members of the EU have the right to travel and work anywhere within the countries that make up the trade alliance. They also have access to health and welfare benefits, although there are some restrictions on these. Millions of non-British, EU citizens currently reside in the United Kingdom. What happens to those people when Brexit kicks in? And what about the two million British that live in other EU countries?

 

Controlling immigration was a major argument for those supporting an exit from the EU, though its role has been over-estimated. Many Brexit voters simply wanted to register their outrage with the mainstream parties—Labour and Tories alike—that had, to one extent or another, backed policies which favored the wealthy and increased economic inequality. In part, the EU was designed to lower labor costs in order to increase exports.

 

Indeed, German Chancellor Helmut Kohl (1982 to 1998) pressed the EU to admit Central and Eastern Europe countries precisely because they would provide a pool of cheap labor that could be used to weaken unions throughout the trade bloc. In this he was strongly supported by the British. Union membership in Britain has declined from over 13 million in 1979 to just over six million today.

 

The Conservatives want to impede immigration, and also have full access to the trade bloc, what has been termed the “have your cake and eat it too” strategy. So far that approach has been a non-starter with the rest of the EU. Polls show that only 30 percent of EU members think that that Britain should be offered a favorable deal. This drops to 19 percent in France

 

The Conservatives themselves are split on what they want. One faction is pressing for a “hard Brexit” that rigidly controls immigration, abandons the single market and customs union, and rejects any role for the European Court of Justice.

 

Another “soft Brexit” faction would accept EU regulations and the Court of Justice, because they are afraid that bailing out of the single market will damage the British economy. Given that countries like Japan, China and the U.S. seem reluctant to cut independent trade deals with Britain, that is probably an accurate assessment.

 

While the Tories are beating up on one another, the Labour Party has distanced itself from the issue, quietly supporting a “soft” exit, but mainly talking about the issues that motivated many of the Brexit voters in the first place: the housing crisis, health care, the rising cost of education, and growing inequality. That platform worked in the June 2017 snap election that saw the Conservatives lose their parliamentary majority and Labour pick up 32 seats.

 

Divorces are not only messy, they’re expensive.

 

This past September, May offered to pay the EU 20 billion Euros to disentangle Britain from the bloc, but EU members are demanding at least 60 billion Euros—some want up to 100 billion—and refuse to talk about Britain’s access to the trade bloc until that issue is resolved. All talk of “cake” has vanished.

 

And then there is Ireland.

 

The island is hardly a major player in the EU. The Republic’s GDP is 15th in the big bloc, but it shares a border with Northern Ireland. Even though the North voted to remain in the EU, it will have to leave when Britain does. What happens with its border is no small matter, in part because it is not a natural one.

 

Those counties that were a majority Protestant in 1921 became part of Ulster, while Catholic majority counties remained in the southern Republic. During the “Troubles” from the late 1960s to the late 1990s, the border was heavily militarized and guarded by thousands of British troops. No one—north or south—wants walls and watch towers again.

 

But trade between the Republic and Ulster will have to be monitored to insure that taxes are paid, environmental laws are followed, and all of the myriad of EU rules are adhered to.

 

Other than trade there is the matter of the 1998 Good Friday Agreement that ended the fighting between Catholics and Protestants. While laying out a way to settle the differences between the two communities through power sharing, it also re-defined the nature of sovereignty. Essentially the Irish Republic and Britain agreed that neither country had a claim on Ulster, and that Northern Irish residents be accepted as “Irish, or British or both, as they may so choose”

 

Such fluid definition of sovereignty is threatened by the Brexit, and most of all by the fact that May and the Conservatives—at the price of a two billion Euro bribe— have aligned themselves with the extremely right wing and sectarian Protestant party, the Democratic Unionist Party, in order to pass legislation. While the pact between the two is not a formal alliance, it nonetheless undermines the notion that the British government is a “neutral and honest broker” in Northern Ireland.

 

May did not even mention the Irish border issue in her September talk, although the EU has made it clear that the subject must be resolved.

 

Talks between Britain and the EU are barely inching along, partly because the Conservatives are deeply divided, partly because the EU is not sure May can deliver or that the current government will last to the next general elections in 2022. With Labour on the ascendency, May reliant on an extremist party to stay in power, and countries like France licking their chops at poaching the financial institutions that currently work out of London, EU members are in no rush to settle things. May is playing a weak hand and Brussels knows it.

 

Eventually, the Labour Party will have to engage with Brexit more than it has, but Corbyn is probably correct in his estimate that the major specter haunting Europe today is not Britain’s exit but anger at growing inequality, increasing job insecurity, a housing crisis, and EU strictures that have turned economic strategy over to unelected bureaucrats and banks.

 

“The neoliberal agenda of the last four decades may have been good for the 1 percent,” says Nobel Laureate Joseph Stiglitz, “but not for the rest.” Those policies were bound to have “political consequences,” he says, and “that day is finally upon us.”

 

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Leprechauns, Nazis and Truncheons

Of Leprechauns, Nazis, and truncheons

Dispatches From The Edge

Oct. 8, 2017

 

Ballingarry, Republic of Ireland

 

This tiny village in the heart of County Limerick, with its narrow streets and multiple churches, seems untouched by time and untroubled by the economic and political cross currents tearing away at the European Union (EU). But Ireland can be a deceptive place, and these days nowhere is immune from what happens in Barcelona, Paris and Berlin.

 

Ballingarry—the place my grandfather emigrated from 126 years ago—was a textile center before the 1845 potato famine starved to death or scattered its residents. Today it houses five pubs, “One for every 100 people” notes my third cousin Caroline, who, along with her husband John, live next to an old Protestant church that has been taken over by a high tech company.

 

When the American and European economies crashed in 2008, Ireland was especially victimized. Strong-armed into a “bailout” to save its banks and speculators, the Republic is only beginning to emerge from almost a decade of tax hikes, layoffs, and austerity policies that impoverished a significant section of its population. The crisis also re-ignited the island’s major export: people, particularly its young. Between 2008 and 2016, an average of 30,000 people, age 15 to 24, left each year.

 

The Irish economy is growing again, but the country is still burdened by a massive debt, whose repayment drains capital from much needed investments in housing, education and infrastructure. But “debt” can be a deceptive word. It is not the result of a spending spree, but the fallout from of a huge real estate bubble pumped up by German, Dutch and French banks in cahoots with local speculators and politicians, who turned the Irish economy into an enormous casino. From 1999 to 2007, Irish real estate prices jumped 500 percent.

 

People here have reason to be wary of official government press releases and Bank of Ireland predictions. The center-right government of former Prime Minister Enda Kenny crowed that the economy had grown an astounding 26 percent in 2015, but it turned out to be nothing more than a bunch of multinationals moving their intellectual property into Ireland to protect their profits. The forecast has since been labeled “Leprechaun economics.”

 

Former U.S. Speaker of the House, Thomas “Tip” O’Neill—whose ancestors hailed from County Donegal in Ireland’s northwest—once said, “All politics are local,” and that’s at least partly true here. The news outlets are full of a scandal about the Irish police, the Garda, cooking breathalyzer tests to arrest motorists, an upcoming abortion referendum, and a change of leadership in the left-wing Sinn Fein Party. There is also deep concern about the Brexit. Britain is Ireland’s number two trading partner—the U.S. is number one—and it is not clear how London’s exit from the EU will affect that. There is also the worrisome matter of the now open border between the Republic and Northern Ireland, accompanied by fears that Brexit will undermine the Good Friday peace agreement between northern Catholics and Protestants.

 

But even the Irish have a hard time focusing on themselves these days, what with the German elections vaulting Nazis into the Bundestag and Spanish Prime Minister Mariano Rajoy’s auto da fe against the Catalans. Watching Spain’s Guardia Civil using truncheons on old people, whose only crime was trying to vote, felt disturbingly like the dark days when Gen. Francisco Franco and his fascist Falange Party ran the country.

 

There is an interesting parallel between Catalonia and Ireland. Dublin is still awash with the100th anniversary commemorations of the 1916 Easter Rebellion. At the time the rising was opposed by many of the Irish, but when the British authorities began executing the rising’s leaders, sentiment began to shift. In 1921, the British threw in the towel after 751 years.

 

It is a lesson Rajoy should examine. Before he unleashed the Guardia Civil, polls showed the Catalans were deeply split on whether they wanted to break from Spain. That sentiment is liable to change rather dramatically in the coming weeks.

 

There are a number of cross currents in Europe these days, although many of them have a common source: an economic crisis in the European Union and austerity policies that have widened the inequality gap throughout the continent. The outcome of the German elections is a case in point.

 

Going into the Sept. 25 vote, the media projected a cakewalk for Chancellor Angela Merkel and her Christian Democratic Union/Christian Social Union alliance. What happened was more like a train wreck, The major parties, including the Social Democratic Party (SDP), dropped more than 100 seats in the Bundestag, and the openly racist, rightwing Alternative for Germany took almost 13 percent of the vote and 94 seats.

 

In some ways the German election was a replay of the British election last June, but without the Labour Party’s leftwing turn. Faced with the British Conservative Party’s numbingly vague platform of “experience” and “order,” voters went for Labour’s progressive program of tax the rich, free tuition, and improve health care and education, and denied the Tories a majority.

 

Merkel ran an election not very much different than the British Conservatives, but with the exception of the small Die Linke Party (which was itself divided) there were not a lot of alternatives for voters. The SDP were part of Merkel’s Grand Coalition government, making it rather hard to critique the Chancellor’s policies. The SDP leader, Martin Schultz started off campaigning against economic inequality, but shifted to the middle after losing three state elections. In their one big debate it was hard to distinguish Schultz from Merkel, and both avoided climate change, housing, the Brexit, and growing poverty.

 

There was certainly ammunition to go after the Chancellor with. In Merkel’s 12 years in power, the chasm between rich and poor in the EU’s wealthiest state has widened. In spite of low unemployment, almost 16 percent of the population is near the poverty line. The problem is that many are working low paying temp jobs.

 

Under normal circumstances that would be a powerful issue, except that it was Chancellor Gerhard Schoder and the SDP who put policies in place that led to rise of temporary jobs and reduced wages. Suppressing wages boosted German exports but left a whole section of the population behind.

 

It is a continent-wide problem. According to the European Commission, almost one-third of Europe’s workforce is part of the “gig” economy, many working for under minimum wage and without benefits. The replacement of employees with “independent contractors” has allowed companies like Uber to amass enormous wealth, but the company’s drivers end up earning barely enough to get by.

 

In short, German voters did not trust the SDP and looked for alternatives. Given the hysteria around immigration, some choose the fascist Alternative for Germany. As odious as it is to have the inheritors of the Third Reich sitting in the Bundestag, it would be a mistake to think the Party’s program was behind its success. The Alternative has nothing to offer but racism and reaction, and neither will do much to close the wealth gap in Germany.

 

Dublin has turned over a wing of its National Library to an exhibit of the great Irish poet and playwright, William Butler Yeates, who is much quoted these days. A favorite seems to be some lines from “The Second Coming”: “Thing fall apart; the Centre cannot hold…the best lack all conviction, while the worst are full of passionate intensity.”

 

On one level that seems a pretty good description of the rise of Europe’s extreme rightwing parties, and the precipitous decline of center and center-left parties. It is an attractive literary simile, but misleading. It was the “Centre” that introduced many of the neo-liberal policies that wiped out industries, cut wages, and abandoned whole sections of the population. When French, British, German, Spanish, Italian and Greek socialists embraced free trade and wide-open markets over strong unions and social democracy, is it any wonder that voters in those countries abandoned them?

 

When center-left parties returned to their roots, as they did in Britain and Portugal, voters rewarded them. After being dismissed as a deluded leftist who would destroy the British Labour Party, suddenly Jeremy Corbyn is being talked of as a future prime minister. In the meantime the alliance of the Portuguese Socialist Party with two other left parties is rolling back many of the more onerous austerity policies inflicted on Lisbon by the EU, sparking economic growth and a drop in the jobless rate.

 

Visually, Ireland is a lovely country, though one needs to prepare for prodigious amounts of rain and intimidatingly narrow roads (having destroyed two tires in 24 hours I was banished to riding shotgun half way through our trip). But while the meadows sweeping down from dark mountains in Kerry look timeless to the tourists who pack the scenic Ring, they are not. Ireland’s modern landscape is a deception.

 

In 1845 the population of Kerry was 416 people per square mile, compared to 272 in England and Wales. Those sweeping meadows that the tourists ogle were crowded with cottages before three years of potato blight swept them all away, “Look at those great grass fields, empty for miles and miles away,” wrote the Bishop of Clonfert in 1886,”every one of them contained once its little house, its potato ground, its patch of oats.”

 

It is ironic that Europe is so befuddled by the flood of immigrants pounding on its doors, or that Europeans somehow think the current crisis is unique. Between 1845 and 1848, one and half to two million Irish fled their famine-blackened land (another million—likely far more—starved to death) in large part due to the same kind of economics Europe is currently trying to force on countries like Ireland, Portugal, Italy, Greece, Spain and Cyprus.

 

“God brought the blight, the English brought the famine,” is an old Irish saying, and it is spot on. The Liberal Party government in London was deeply enamored with free trade and market economics, the 19th century version of neo-liberalism, and they rigidly applied its strictures to Ireland. The result was the single worst disaster to strike a population in the 19th century. Between 1845 and 1851 Ireland lost between 20 and 25 percent of its people, although those figures were far higher in the country’s west.

 

Today, the migrants are from Syria, Somalia, Yemen, Iraq, Afghanistan, and Libya, fleeing wars that Europeans helped start and from which some make a pretty penny dealing arms. Others are from Africa, where a century of colonialism dismantled existing states, suppressed local industries and throttled development. Now those chickens are coming home to roost.

 

Ireland is a small player in the scheme of things, but it has much to teach the world: courage, perseverance, and a sense of humor. When the Anglo-Irish Treaty was signed in 1921, the people of Galway pulled down a statue of Lord Dunkellen and tossed it into the sea, while a band played “I’m Forever Blowing Bubbles.”

 

And Europe would do well to pay attention to some if its poets, like Patrick Pierce, who was executed at Kilmainham jail for his part in the Easter Rebellion: “I say to the masters of my people, beware. Beware of the risen people who shall take from ye that which you would not give.”

 

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Spain: Breaking Up Is Hard To Do

Spain: Breaking Up Is Hard To Do

Dispatches From the EdgeConn Hallinan

Aug. 22, 2017

 

When the Catalans goes to the polls Oct. 1, much more than independence for Spain’s restive province will be at stake. In many ways the vote will be a sounding board for Spain’s future, but it is also a test of whether the European Union—divided between north and south, east and west—can long endure.

 

In some ways, the referendum on Catalan independence is a very Spanish affair, with grievances that run all the way back to Catalonia’s loss of independence in the War of the Spanish Succession (1701-1714). But the Catalans lost more than their political freedom when the combined French and Spanish army took Barcelona, they lost much of their language and culture, particularly during the long and brutal dictatorship of Francisco Franco from 1939 to 1975.

 

The current independence crisis dates back to 2010, when, at the urging of the rightwing Popular Party, the Spanish Constitutional Court overturned an autonomy agreement that had been endorsed by the Spanish and Catalan parliaments. Since then, the Catalans have elected a pro-independence government and narrowly defeated an initiative in 2014 calling for the creation of a free republic. The Oct. 1 vote will re-visit that vote.

 

But the backdrop for the upcoming election has much of Europe looking attentively, in part because there are other restive independence movements in places like Scotland, Belgium and Italy, and in part because many of the economic policies of the EU will be on the line, especially austerity, regressive taxation, and privatization of public resources as a strategy for economic recovery.

 

When the economic meltdown of 2008 struck, there were few countries harder hit than Spain. At the time Spain had a healthy debt burden and a booming economy, but one mainly based on real estate speculation fed by German, Austrian, French, British and U.S. banks. Real estate prices ballooned 500 percent. Such balloons are bound to pop, and this one did in a most spectacular fashion, forcing Spain to swallow a bailout from the EU’s “troika”—the International Monetary Fund, the European Commission, and the European Bank.

 

The price of the bailout—the bulk of which went to pay off the banks whose speculation had fed the bubble in the first place—was a troika-enforced policy of massive austerity, huge tax hikes, and what one commentator called “sado-monetarism.” The results were catastrophic. The economy tanked, unemployment rose to 27 percent—over 50 percent for youth—and some 400,000 people were forced to emigrate.

 

While the austerity bred widespread misery, it also jump-started the Left Podemos Party, now the third largest in the Spanish parliament and currently running neck and neck with the Spanish Socialist party. Podemos-allied mayors control most of Spain’s largest cities, including Madrid, Valencia, and Barcelona.

 

In the 2015 election the ruling Popular Party lost its majority and currently rules as a minority party, allied with the conservative Catalan Ciudadanos Party and the main Basque party.

 

Needless to say, the PP’s control of Spain is fragile.

 

Starting in 2014 the Spanish economy began to grow, unemployment came down, and Spain seemed on its way back to economic health. Or at least that is the story the Popular Party and the EU is peddling.

 

The economy is the fastest growing in the EU, averaging around 3 percent a year. Next year projections are that it will grow 2.5 percent. Unemployment has dropped from 28 percent—50 percent for youth—to just over 17 percent.

 

But youth unemployment is at 37 percent, the second highest in Europe, and wages have still not caught up to where they were before the 2008 crisis. Spain is adding some 60,000 jobs a year, but many of them are temporary and without the same benefits as full time workers.

 

This temp worker strategy is continent-wide. Of the 5.2 million jobs created between 2013 and 2016, some 2.1 million were temporary.

 

The “recovery” is partly due to “labor reforms” that make it easier to layoff workers and replace full-time workers with “temps.” The shift has been from full-time workers protected by labor agreements to insecure temps with few protections. While that might make products cheaper and, thus, more attractive, it impoverishes the work force.

 

The strategy has become so widespread that economists have borrowed a term from physics to describe it: hysteresis.

 

Hysteresis describes a phenomenon where force permanently distorts what it is applied to.

 

“When unemployment is high for a long period of time, the shape of the labour market alters,” says Financial Times economist Claire Jones. “Would-be workers lose their skills, or find that technology or other economic forces make them obsolete. When the recovery comes, they are unable to join in. longer-term, or structural levels of unemployment set in and economy’s potential diminishes.”

 

In short, hysteresis produces an army of under and unemployed workers, whose living standards decline and who are economically marginalized. It also creates a vicious cycle that eventually dampens an economy. If governments are not spending—and under the strictures of the troika that is a given—and if consumers don’t have money, growth will eventually come to a halt, or at least become so anemic that it will be unable to absorb the influx of a younger generation.

 

Those marginalized communities and sectors of the economy are fertile ground for rightists who use xenophobia and racism to whip up anti-immigrant sentiment, as recent elections in Europe and the U.S. have demonstrated.

 

The vote by Britain to withdraw from the EU was put down to racism, but ,while anti-immigrant sentiment did play a role in the Brexit, that argument is a vast oversimplification of what happened. Much of the Brexit vote was not so much xenophobic as a repudiation of the major political parties that abandoned whole sectors of the country.

This particularly included the policies instituted by former Prime Minister Tony Blair and the “New Labour Party” that jettisoned its ties with the trade union movement and bought into the neo-liberal policies of free trade and globalization.

 

However, many of those Brexit voters turned around a few months later and backed the Labour Party and Jeremy Corbin’s left agenda. Given an opportunity to vote for ending the long reign of austerity, and for free university tuition, improved health services, and re-nationalizing transportation, they voted Labour, xenophobia be dammed.

 

Because the Spanish Popular Party claims that the current economic recovery is the direct result of its austerity and labor policies, other EU players are paying attention to the Catalan vote. If the vote goes badly for Catalan independence—and polls are currently showing it will be defeated 42 percent to 48 percent—the PP will claim a victory, not only over Catalan separatism, but also for the Party’s economic recovery strategy.

 

The French are certainly paying attention. Newly elected President Emmanuel Macron is preparing a similar program of cutbacks and labor “reforms” that he intends to ram through by executive decree, bypassing the French parliament.

 

A victory for the PP is also in the interests of the troika as proof that its recovery formula works, even though the track record of austerity as a cure has few success stories, and even those are questionable. For instance, low energy prices and a weak euro have more to do with the Spanish recovery than cutbacks in social services and the evisceration of labor codes.

 

The Popular Party should be riding high these days, but in fact its poll numbers are declining. It is still the largest party in Spain, but that translates into only 31 percent of the voters. Between them, the Spanish Socialist Party and the leftist Podemos Party garner just short of 40 percent.

 

Part of the PP’s woes stem from the fact that many Spaniards recognize there is something sour about the recent “recovery,” but there are also the corruption charges leveled at the PP, charges that have even ensnared Mariano Rajoy. The Prime Minister was recently forced to testify in a bribery and fraud case against some leading members of his Party.

 

While the Socialists have also been tarred with the corruption brush, the current case has riveted the public’s attention because some of it reads like a script from the Sopranos. The key defendant is Francisco Correa, who likes to be called Don Vito, Marlon Brando’s character in The Godfather. Two of his associates are known as The Moustache and The Pearl. Correa and 10 others have already been sentenced to prison for fraud and bribery, but Correa is also on trial for setting up a slush fund. Rajoy testified in that trial, although so far the Prime Minister is not accused of any wrongdoing.

 

A survey by the CIS Institute found that almost 50 percent of Spanish voters are deeply concerned with corruption, and that sentiment is dragging the Popular Party down.

 

The left and center-left parties are split on the Catalan question. Both oppose separatism, but they come at it very differently. Podemos is urging a “no” vote Oct. 1, but it supports the right of the Catalans to have their initiative. That position, along with Podemos’s progressive political program, has made it the number one party in Catalonia.

 

The Socialists have traditionally opposed Catalan separatism, and even the right of the Catalans to vote on the issue. But that position has softened since a major upheaval in the party that began last year when the Socialist’s right wing pulled off a coup and drove the Party’s left wing out of power. But the Socialist right-wingers made a major mistake by voting to allow Rajoy to form a minority government and continue the austerity policies. That move was too much for the Party’s rank and file, who threw out the right this past May and reinstated the Socialist’s left wing.

 

The Socialists’ willingness to consider allowing the initiative is partly a matter of simple math. The Party’s opposition to Catalan independence has resulted in it being virtually annihilated in the province, and no Socialist Party has ever come to power in Spain without winning Catalonia.

 

Whatever happens Oct. 1, Spain is not going to be the same country it has been since the restoration of democracy in 1977. The old two-party domination of the government is over, and there is general recognition that there has to be some shift on the Catalan question. Even Rajoy—who has hinted that he might consider using the military to block the Oct. 1 vote, or ruling the province from Madrid—has offered to give Barcelona the same deal the Basque province have. That would include collecting taxes, something Catalans now don’t have the right to do.

 

There is no little irony in Rajoy’s offer. When the Catalans made that same offer in 2012, Rajoy and the Popular Party wouldn’t even discuss the proposal. It is a measure of how the issue has evolved that Rajoy is now making the same offer as the Catalans did a half decade ago.

 

Polls—weak reeds to lean on these days—show the initiative going down to defeat, but the situation is fluid. Rajoy’s recent proposal and the softening of the Socialist Party’s position might convince the majority of Catalans that some kind of deal can be cut. Young Catalans favor independence, but older Catalans are uncomfortable with what will be a leap into darkness.

 

On the other hand, if Rajoy comes down hard it will likely bolster the “no” vote.

 

The European Union is in a crisis of its own making. By blocking its members from pursuing different strategies for confronting economic trouble and, instead, insisting on one-size-fits-all strictures, the trade group has set loose centrifugal forces that now threaten to tear the organization apart.

 

The eastern members of the EU have charted a course that throttles democracy in the name of stability. The southern members of the bloc are struggling to emerge from austerity regimes that have inflicted widespread, possibly permanent, damage to their economies. Even members with powerful economies, like Germany and France, are trying to keep the lid on the desire of their people for a better standard of living.

 

The Catalan vote reflects many of these crosscurrents, and is likely to be felt far beyond the borders of Iberia.

 

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Europe’s Elections and The Barbarians

Europe’s Elections

Dispatches From The Edge

Mar. 17, 2017

 

Going in to the recent elections in the Netherlands, the mainstream story seemed lifted from William Butler Yeats poem, The Second Coming: ”Things fall apart; the centre cannot hold—The best lack all conviction, while the worst are full of passionate intensity.” The Right was on the march, the Left at war with itself, the traditional parties adrift, and the barbarians were hammering at the gates of the European Union.

 

It’s a grand image, a sort of a politics as the “Game of Thrones,” but the reality is considerably more complex. There is, of course, some truth in the apocalyptic imagery: rightwing parties in the Netherlands, France, and Germany have grown. There are indeed some sharp divisions among left parties. And many Europeans are pretty unhappy with those that have inflicted them with austerity policies that have tanked living standards for all but a sliver of the elite.

 

But there are other narratives at work in Europe these days besides an HBO mega series about blood, war, and treachery.

 

The recent election in the Netherlands is a case in point. After holding a lead over all the other parties, Geert Wilders rightwing, racist Party for Freedom (PVV) faltered. In the end, his Islamophobes did not break the gates (but they did pick up five seats). Overall it was a victory for the center, but it was also a warning for those who advocate “staying the course” politics and, most pointedly the consequences of abandoning principles for power.

 

The Left Greens did quite well by taking on Wilders’ anti-Islam agenda and challenging Prime Minister Mark Rutte’s center-right Popular Party for Freedom and Democracy (VVD) on the economic front. In one national debate, Jesse Klaver, the Left Green’s dynamic leader, argued that janitors should be paid more and bankers less. The election, he said, is not about “Islam and Muslims,” but about “housing, income and health care.” The voters clearly bought it.

 

Rutte’s coalition partner, the left Labour Party, was crushed, losing 29 seats. For the past four years Labour has gone along with Rutte’s program of raising the retirement age and cutting back social spending, and voters punished them for shelving their progressive politics for a seat at the table.

 

The VVD also lost eight seats, which probably went to centrist parties like Democrats66, suggesting that Rutte’s “business as usual” is not what voters want either . VVD is still the number one party in the 150-seat parliament.

 

There were some lessons from the Dutch elections, though not the simplistic one that the “populist” barbarians lost to the “reasonable” center. What it mainly demonstrated is that voters are unhappy with the current situation, they are looking for answers, and parties on the left and center left should think carefully about joining governments that think it “reasonable” to impoverish their own people.

 

Next up in the election docket is France, where polls show Marine Le Pen’s neo-Nazi National Front leading the pack in a five-way race with traditional rightwing candidate Francois Fillon, centrist and former Socialist Party member Emmanuel Macron, Socialist Party candidate Benoit Hamon, and leftist Jean-Luc Melenchon. The first round, scheduled for April 23, will eliminate all but the two top vote getters. A final round will be held May 7.

 

With Melenchon and Hamon running at 11.5 percent and 13.5 percent respectively, thus splitting the left vote, the race appears to be between Fillon, Macron and Le Pen, with the latter polling slightly ahead of Macron and considerably better than Fillon.

 

If you are is attracted to the apocalypse analogy, France is probably your ticket.

 

Le Pen is running a campaign aimed against anyone who doesn’t look like Charlemagne or Joan of Arc, but her strong anti-EU positions play well with young people, in small towns, and among rural inhabitants. All three groups have been left behind by the EU’s globalism policies that have resulted in de-industrialization and growing economic inequality. Polls indicate she commands 39 percent of 18 to 24 year olds, compared with 21 percent for Macron and 21 percent for Fillon.

 

Fillon has been wounded by the revelation that he has been using public funds to pay family members some $850,000 for work they never did. But even before the scandal, his social conservatism played poorly to the young and workers are alienated by his economic strategy that harkens back to those of British Prime Minister Margret Thatcher, whom he greatly admires. His programs sound much like Donald Trump’s: cut jobless benefits and social services, lay off public workers, and give tax cuts to the wealthy.

 

Macron, an ex-Rothschild banker and former minister of economics under Hollande, is running neck and neck with Le Pen under the slogan “En Marche” (“On Our Way”), compelling critics on the left to ask “to what?” His platform is a mix of fiscal discipline and mild economic stimulation, and he is young, 39, telegenic, and a good speaker. But his policies are vague, and it is not clear there is a there, there.

 

Most polls indicate a Le Pen vs. Macron runoff, with Macon coming out on top, but that may be dangerous thinking. Macron’s support is soft. Only about 50 percent of those who say they intend to vote for him are “certain” of their vote. In comparison, 80 percent of Le Pen’s voters are “certain” they will vote for her.

 

There are, as well, some disturbing polling indications for the second round. According to the IFOP poll, some 38 percent of Fillon’s supporters say they will jump to Le Pen—two million voters—and 7 percent of Hamon voters and 11 percent of Melenchon backers would shift to Le Pen as well. What may be the most disturbing number, however, is that 45 percent of Melenchon voters say they will not vote if Macron is the candidate. Some 26 percent of Fillon’s voters and 21 percent of Hamon’s votes would similarly abstain.

 

Le Pen will need at least 15 million votes to win—the Front has never won more than six million nationally—but if turnout is low, Le Pen’s strongly motivated voters could put her into the Elysee Palace. In this way, France most resembles Britain prior to the Brixit vote.

 

If that comes to pass, Le Pen will push for a national referendum on the EU. There is no guarantee the French will vote to stay in the Union, and if they leave, that will be the huge trade organization’s death knell. The EU can get along without Britain, but it could not survive a Frexit.

 

Germany will hold national elections, Sept. 24, but the story there is very different than the one being played out in France. The government is currently a grand coalition between Chancellor Andrea Merkel’s conservative Christian Democratic Union (CDU), the Bavarian-based Christian Social Union (CSU), and the Social Democrats(SD). The alliance has been a disaster for the SD, which at one point saw its poll numbers slip below 20 percent.

 

But German politics has suddenly shifted. On Merkel’s left, the Social Democrats changed leaders and have broken with industrial policies that have driven down the wages of German workers in order to make the country an export juggernaut. On the Chancellor’s right, the racist, neo-Nazi Alternative for Germany (AfG) has drained CDU and CSU voters to support a ban on immigration and a withdrawal from the EU, although the Alternative is dropping in the polls.

 

The game changer has been the sudden popularity of former EU President, Martin Schultz, the new leader of the Social Democrats. The SD is now neck and neck with the CDU/CSU front, and some polls show Schultz actually defeating Merkel. In terms of personal popularity, Schultz is now running 16 points ahead of Merkel. While the Chancellor’s CDU/CSU alliance tops the polls at 34 percent, the Social Democrats are polling at 32 percent and climbing.

 

Schultz has made considerable headway critiquing declining living standards. Germany has large numbers of poorly paid workers, and almost 20 percent of workers age 25 to 34 are on insecure, short-term contracts. Unemployment benefits have also been cut back, even though Germany’s economy is the most robust in Europe and the country has a $310 billion surplus.

 

In any case, the days when Merkel could pull down 40 percent of the vote are gone. Even if her coalition comes in number one, it may not have enough seats to govern, even if its traditional allies, the Free Democrats, make it back into the Bundestag.

 

That creates the possibility of the first so-called “red-red-green” national government of the SD, the left Die Linke Party, and the Green Party. Die Linke and the Greens are both polling at around 8 percent. Such an alliance currently runs several major cities, including Berlin. It would not be an entirely comfortable united front: the SD and the Greens are pro-EU, while Die Linke is highly critical of the organization.

 

But there is a model out there that gives hope.

 

Portugal is currently run by a three-party center-left to left alliance. Those parties also disagree on things like the EU, the debt, and NATO membership, but for the time being they have decided that stimulating the economy and easing the burden of almost decade of austerity trumps the disagreements.

And then there are the Italians.

 

While Italy has not scheduled elections, the defeat of Democratic Party leader and then Prime Minister Matteo Renzi’s constitutional referendum almost guarantees a vote sometime in the next six months.

 

Italy has one of the more dysfunctional economies in the EU, with one of the Union’s highest debt ratios and several major banks in deep trouble. It is the EU’s third largest economy, but growth is anemic and unemployment stubbornly high, particularly among the young.

 

Renzi’s center-left Democratic Party (PD) still tops the polls, but only just, and it has fallen nearly 15 points in two years. Nipping at its heels is the somewhat bizarre Five Star Party run by comedian Beppe Grillo, whose politics are, well, odd. Five Star is strongly opposed to the EU, and allies itself with several rightwing parties in the European Parliament. It applauded the election of Donald Trump. On the other hand, it has a platform with many progressive planks, including economic stimulation, increased social services, a guaranteed income for poor Italians, and government transparency. It is also critical of NATO.

 

Five Star has recently taken a few poll hits, because the Party’s Mayor of Rome has done a poor job keeping the big, sprawling city running—in truth, the ancient Romans found it a daunting task—and is caught up in a financial scandal. Some Democratic Party leaders are also being investigated for corruption.

 

The only other major parties in the mix are former Prime Minister Silvio Burlusconi’s center-right Forza Italia, which is polling around 13 percent, and the racist., xenophobic Northern League at 11.5 percent. The latter, which is based the northern Po Valley, made a recent effort to broaden its base by taking its campaign to Naples in southern Italy. The result was a riot with protestors tossing rocks, bottles and Molotov cocktails at Northern League leader Matteo Salvini.

 

There are informal talks going on about uniting the parties. Burlusconi has worked with the Northern League in the past.

 

There are also a gaggle of smaller parties in the parliament, ranging from the Left Ecology/Greens to the Brothers of Italy, none registering over 5 percent. But since whoever comes out on top will need to form a coalition, even small parties will likely punch above their weight.

 

If Five Star does come in first and patches together a government, it will press for a referendum on the EU, and there is no guarantee that Italians—battered by the austerity policies of the big trade group—won’t decide to bail like the British did. An Italexit would probably be a fatal blow to the EU.

 

Predicting election outcomes are tricky these days, the Brexit and the election of Donald Trump being cases in point. The most volatile of upcoming ballots are in France and Italy. Germany’s will certainly be important, but, even if Merkel survives, the center-right will be much diminished and the left will be stronger. And that will have EU-wide implications.

 

The European left is divided, but not all divisions are unhealthy, and a robust debate is not a bad thing. None of the problems Europe faces are simple. Is the EU salvageable? What are the alternatives to austerity? How do you tackle growing inequality and the marginalization of whole sections of society? How do you avoid the debt trap facing many countries, blocked by the EU’s economic strictures from pursuing any strategy other than more austerity?

 

In a recent interview, Yanis Varoufakis, former Greek economic minister and one of the founders of the left organization DiEM25, proposed a “New Deal” for Europe, where in “All Europeans should enjoy in their home country the right to a job paying a living wage, decent housing, high-quality health care and education, and a clean environment.”

 

The “Deal” has five goals that Varoufakis argues can be accomplished under the EU’s current rules and without centering more power in Brussels at the expense of democracy and sovereignty. These would include:

  • “Large-scale” investment in green technology.
  • Guaranteed employment with a living wage
  • An EU-wide anti-poverty fund.
  • Universal basic income.
  • Anti-eviction protection.

 

None of those goals will be easy to achieve, but neither can Europe continue on its current path. The rightwing “populists” may lose an election, but they aren’t going away.

 

Almost 40 years ago, British Prime Minister Margaret Thatcher launched her neo-conservative assault on trade union rights, health care, education and social services with the slogan, “There is no other choice.” The world is still harvesting the bitter fruits of those years and the tides of hatred and anger they unleashed. It is what put Trump into the Oval Office and Le Pen within smelling distance of the French presidency.

 

But there is a choice, and it starts with the simple idea of the greatest good to the greatest number.

 

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The European Union and the Left

The EU & the Left

Dispatches From The edge

Jan. 10, 2017

 

When European Union President Jean-Claude Juncker addressed the European Parliament in Strasbourg this past September, he told them the organization was facing an “existential crisis” and “national governments so weakened by the forces of populism and paralyzed by the risk of defeat in the next election.”

 

Indeed it has been a bad year for the huge trading group:

  • The “Breixit,” or the United Kingdom’s vote to withdraw.
  • Rome’s referendum to amend the country’s constitution was trounced, and several Italian banks are in deep trouble.
  • The austerity policies of the EU have kept most of its members’ economies either anemic or dead in the water. Even those showing growth, like Ireland and Spain, have yet to return to where they were before the 2008 economic melt down. Between 2007 and 2016, purchasing power fell 8 percent in Spain and 11 percent in Italy,

 

It is also true that number of national governments—in particular those in Germany and France—are looking nervously over their shoulders at parties to their right.

 

But the crisis of the EU does not spring from “populism,” a term that many times obscures more than it reveals, lumping together neo-fascist parties, like France’s National Front and Germany’s Alternative for Germany, with left parties, like Spain’s Podemos. Populism, as Juncker uses it, has a vaguely atavistic odor to it: ignorant peasants with torches and pitchforks storming the citadels of civilization.

 

But the barbarians at the EU’s gate did not just appear out of Europe’s dark forests like the Goths and Vandals of old. They were raised up by the profoundly flawed way that the Union was established in the first place, flaws that did not reveal themselves until an economic crisis took center stage.

 

That the crisis is existential, there is little doubt. In fact, the odds are pretty good that the EU will not be here in its current form a decade from now—and possibly considerably sooner. But Juncker’s solutions include a modest spending program aimed at business, closer military ties among the 28—soon to be 27—members of the organization, and the creation of a “European Solidarity Corps” of young volunteers to help out in cases of disasters, like earthquakes. But there was nothing to address the horrendous unemployment rate among young Europeans. In short, rearranging the Titanic’s deck chairs while the ice looms up to starboard.

 

But what is to be done is not obvious, nor is how one goes about reforming or dismantling an organization that currently produces a third of the world’s wealth. The complexity of the task has entangled Europe’s left in a sharp debate, the outcome of which will go a long way toward determining whether the EU—now a house divided between wealthy countries and debt-ridden ones—can survive.

 

It is not that the European left is strong, but it is the only player with a possible strategy to break the cycle of debt and low growth. The politics of racism, hatred of immigrants, and reactionary nationalism espoused by the National Front, the Alternative For Germany, Greece’s Golden Dawn, Denmark’s People’s Party, and Austria’s Freedom Party, will not generate economic growth, any more than Donald Trump will bring back jobs for U.S. steelworkers and coal miners and “make America great again.”

 

Indeed, if the anti-immigrant Alternative for Germany Party gets its way, that country will be in deep trouble. German deaths currently outnumber births by 200,000 a year, a figure that is accelerating. According to the Berlin Institute for Population and Development, to have a sufficient working-age population that can support a stable pension system, the country will require an influx of 500,000 immigrants a year for the next 35 years.

 

Many other European countries are in the same boat.

 

There are several currents among the European left, ranging from those who call for a full withdrawal, or “Lexit,” to reforms that would democratize the organization.

 

There is certainly a democracy deficit in the EU. The European Parliament has little power, with most key decisions made by the unelected “troika”—the International Monetary Fund (IMF), the European Central Bank, and the European Commission. The troika’s rigid debt policies mean members have lost the ability to manage their own economies or challenge the mantra that debt requires austerity, even though that formula has clearly been a failure.

 

As economists Markus Brunnermeier, Harold James, and Jean-Pierre Landau point out in their book “The Euro and the Battle of Ideas,” growth is impossible when consumers, corporations, and governments all stop spending. The only outcome for that formula is misery and more debt. Even the IMF has begun to question austerity.

 

But would a little more democracy really resolve this problem?

 

Nobel Laureate Joseph Stiglitz, a long-time critic of austerity, argues that while the EU does indeed need to be democratized, a major problem is the common currency. The euro is used by 19 of the EU’s 28 members that constitute the Eurozone.

 

Stiglitz argues that the Euro locked everyone into the German economic model of modest wages coupled with a high power export economy. But one size does not fit all, and when the economic crisis hit in 2008, that became painfully obvious. Those EU members that used a common currency were unable to devalue their currency—a standard economic strategy to deal with debt.

 

There is also no way to transfer wealth within the EU, unlike in the U.S. Powerful economies like California and New York have long paid the bills for states like Louisiana and Mississippi. As Stiglitz points out, “a lack of shared fiscal policy” in the EU made it “impossible to transfer wealth (via tax receipts) from richer states to poorer ones, ensuring growing inequality between the core and the periphery of Europe.”

 

Stiglitz proposes a series of reforms, including economic stimulus, creating a “flexible” euro, and removing the rigid requirement that no country can carry a deficit of more than 3 percent of GDP.

 

Former Greek Finance Minister Yanis Varoufakis, however, argues that the Union “is not suffering from a democratic deficit that can be fixed with a ‘little more democracy’ and a few reforms here and there.” The EU, he says, “was constructed intentionally as a democracy-free zone” to keep people out of decision-making process and to put business and finance in charge.

 

Is the machine so flawed that it ought to be dismantled? That is the opinion of British Pakistani writer and journalist Tariq Ali and King’s College Reader in politics, Stathis Kouvelakis, both whom supported the Brexit and are urging a campaign to hold similar referenda in other EU member countries.

 

But since that that position is already occupied by the xenophobic right, how does the left argue for Lexit without entangling itself with racist neo-Nazis? Varoufakis, a leading member of the left formation, DiEM25, asks whether “such a campaign is consistent with the Left’s fundamental principles” of internationalism?

 

He also argues that a Lexit would destroy the EU’s common environmental policy and the free movement of members, both of which find strong support among young people.

 

Is re-establishing borders and fences really what the left stands for, and wouldn’t re-nationalizing the fossil fuel industry simply turn environmental policies over to the multi-national energy giants? “Under the Lexit banner, in my estimation,” says Varoufakis, “the Left is heading for monumental defeats on both fronts.”

 

DiEM25 proposes a third way to challenge the disastrous policies of the EU, while avoiding a return to borders and “every country for itself” environmental policies. What is needed, according to Varoufakis, is “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.”

 

The idea is to avoid the kind of trap that Greece’s left party, Syriza, has found itself in: running against austerity only to find itself instituting the very policies it ran against.

 

What DiEM25 is proposing is simply to refuse to institute EU austerity rules, a strategy that will only work if the resistance is EU-wide. When Greece tried to resist the troika, the European Central Bank threatened to destroy the country’s economy, and Syriza folded. But if resistance is widespread enough, that will not be so easy to do. In any case, he says, “the debt-deflationary spiral that drives masses of Europeans into hopelessness and places them under the spell of bigotry” is not acceptable.

 

DiEM25 also calls for a universal basic income, a proposal that is supported by 64 percent of the EU’s members.

 

Portugal’s left has had the most success with trying to roll back the austerity measures that caused widespread misery throughout the country. The center-left Socialist Party formed a coalition with the Left Bloc, and the Communist/Green Alliance put aside their differences, and restored public sector wages and state pensions to pre-crisis levels. The economy only grew 1.2 percent in 2016 (slightly less than the EU as a whole), but it was enough to drop unemployment from 12.6 percent to 10 percent. The deficit has also declined.

 

Spain’s Podemos and Jeremy Corbyn of the British Labour Party have hailed the Portuguese left coalition as a model for an anti-austerity alliance across the continent.

 

Debt is the 800-pound gorilla in the living room. Most of the debt for countries like Spain, Portugal and Ireland was not the result of spendthrift ways. All three countries had positive balances until the real estate bubble pumped up by private speculators and banks burst in 2008, and taxpayers picked up the pieces. The “bailouts” from the troika came with onerous austerity measures attached, and most of the money went straight to the banks that had set off the crisis in the first place.

 

For small or underdeveloped countries, it will be impossible to pay off those debts. When Germany found itself in a similar position after World War II, other countries agreed to cut its debt in half, lower interest rates and spread out payments. The 1952 London Debt Conference led to an industrial boom that turned Germany into the biggest economy in Europe. There is no little irony in the fact that the current Berlin government is insisting on applying economic policies to debt-ridden countries that would have strangled that German post-war recovery had they not been modified.

 

It is possible that the EU cannot be reformed, but it seems early in the process to conclude that. In any case, DiEM25’s proposal to practice union-wide civil disobedience has not really been tried, and it certainly has potential as an organizing tool. It is already being implemented in several “rebel” cities like Barcelona, Naples, Berlin, Bristol, Krakow, Warsaw and Porto, where local mayors and city councils are digging in their heels and fighting back.

 

For that to be successful throughout the EU, however, the left will have to sideline some of the disputes that divide it and reach out to new constituencies. If it does not, the right has a dangerous narrative waiting in the wings.

 

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