Europe: The Danger From The Center

Europe: The Danger of the Center

Foreign Policy In Focus

June 13, 2017

 

The good news out of Europe is that Marine Le Pen’s neo-Nazi National Front took a beating in the May 7 French presidential election. The bad news is that the program of the winner, Emmanuel Macron, might put Le Pen back in the running six years from now.

 

Macron pledges to cut 120,000 public jobs, reduce spending by 60 billion Euros, jettison the 35-hour workweek, raise the retirement age, weaken unions’ negotiating strength and cut corporate taxes. It is a program that is unlikely to revive the morbid French economy, but it will certainly worsen the plight of jobless youth and seniors and hand the National Front ammunition for the 2022 election.

 

Europe is enmeshed in an economic crisis brought on by the structure of the European Union (EU), on one hand, and the nature of capitalism, on the other. That convergence has derailed economies throughout the 27-member trade group, impoverished tens of millions, and helped conjure up racist, rightwing movements that are not likely to be deterred by a few election losses.

 

Obscuring the roots of this crisis is the myth that debt is the result of spendthrift behavior, the economic sluggishness a consequence of high taxes, and rigid labor rules that handcuff businesses and inhibit growth. German Chancellor Angela Merkel is fond of saying that countries should behave like a “frugal Swabian house frau.”

 

Is Merkel’s observation bases on a myth or is it allegory? While an allegory is the “figurative treatment of one subject under the guise of another,” a myth is “an unproven or false collective belief that is used to justify a social institution.” The difference may seem pedantic, however, it is anything but, and, because myths are particularly hard to dislodge once they become widespread, it is essential to unpack exactly how the EU got itself in trouble.

 

Part of the problem is capitalism itself, an economic system that generates both enormous productive capacity and economic chaos.

 

Capitalism is afflicted by two kinds of crisis, cyclical and structural. The cyclical ones—recessions—tend to occur pretty much every 10 ten years. The U.S. and Europe went through recessions in the early 1980s, early 1990s, and the first years of 2000. They are painful and unpleasant but generally over in about 18 months.

 

Every 40 or 50 years, however, there is a structural crisis like the 1929 crash and the ensuing Great Depression.

 

When a structural crisis hits, capitalism re-organizes itself. In the 1930s, the solution was to create a re-distributive capitalism that used the power of the state to prime the economic pump and alleviate some of the chaos that accompanies such re-organizations. Unemployment insurance and Social Security took some of the edge off the pain, public works absorbed some of the jobless, and unions got the right to organize and strike.

 

Capitalism went through another structural crisis at the end of the 1970s, and it is the fallout from that one that currently plagues the EU—and the U.S. Using the 1979-81 recession as a screen, taxes on corporations and the wealthy were slashed, business and finance de-regulated, public institutions privatized, and unions assaulted. Capitalism also went global.

 

Globalism did spur enormous growth, but with a deep flaw. With unions weakened—in part by direct attack, in part by the enormous pool of cheap labor now available in the developing world—wages either stagnated or fell in Europe and the U.S., and the gap between rich and poor widened. A 2015 study by Oxfam found that 1 percent of humanity now controls over half the world’s wealth, and the top 20 percent owns 94.5 percent. In short, 80 percent of the world gets by on 5.5 percent of the world’s wealth.

 

This is not just a problem for the developing and under developed world. Germany has the biggest economy in the EU, and the fourth largest in the world. In 2000, Germany’s top 20 percent earned 3.5 percent more than the bottom 20 percent. Today that number has increased five times. For the bottom 10 percent, income has actually fallen. While earnings are up 6 percent, the cost of living has increased 24 percent. If that Swabian house frau was among that 10 percent, it didn’t make a whole lot of difference how frugal she was, she was broke.

 

Globalization generated instability by creating a crisis of accumulation. A few people had lots of money, but far too many had very little, certainly not enough to absorb the output of the global economy. Global capitalism was awash with cash, but where to use it? The answer was financial speculation—especially since many of the restraints and safety measures had been removed through deregulation.

 

For Europe, most of that speculation went into land. Land prices in Spain and Ireland rose 500 percent from 1999 to 2007. In the case of Ireland, it was almost unreal. Irish real estate loans went from 5 billion Euros in 1999 to 96.2 billion Euros in 2007, or more than half the Gross Domestic Product (GDP) of the Republic. Over the same period, European household debt increased on the average by 39 percent.

 

That this was a bubble was obvious and all bubbles pop sooner or later. This one exploded in the U.S. in late 2007 and quickly spread to Europe.

 

What is important to keep in mind is that the EU countries that got in trouble were hardly spendthrifts. Spain, Portugal, and Ireland all had modest debt ratios and budget surpluses at the time of the crisis.

 

The problem was not prodigal governments but a sudden hike in borrowing rates, which made it expensive to finance government operations. That was coupled with a decision to use taxpayer money to bail out banks that had gotten themselves in trouble speculating on real estate. Essentially, Portuguese, Spaniards, Greeks and Irish picked up the debts of banks they had never borrowed anything from.

 

Irish taxpayers shelled out 30 billion Euros to bailout the Irish-Anglo bank, a figure equivalent to the Republic’s tax revenues for an entire year. Since none of these countries had that kind of money on hand, they applied for “bailouts” from the International Monetary Fund, the European Central Bank, and the European Commission, the so-called “troika.” Some 89 percent of those bailouts went to banks. The day the Greek bailout was announced, French bank shares rose 24 percent.

 

It was not that EU countries were debt free, but in 2014, the Committee for a Citizen’s Audit on the Public Debt found that between 60 and 70 percent of those debts were due not to overspending, but instead tax cuts for corporations and the wealthy, and increases in interest rates. The latter favors creditors and speculators. The Committee found that most deficits were the result of “political decisions” that shift the wealth from one class to another.

 

In the long run, some of that debt will have to be forgiven because it is simply unpayable. The 1952 London Debt Convention that cut Germany’s post-war debt and ignited an economic revival could serve as a template.

 

Converging with this crisis of capitalism is the way the EU is structured, although the two are hardly independent of one another. Many of EU’s strictures were specifically designed to favor capital and finance and to marginalize the control that the Union’s 500 million members have over economic matters.

 

The first problem is that all economic decisions are made by the “troika,” an unelected body that answers to no one. There is a European Parliament, but it has little power or control over finance. The same is true for EU member governments. When former Greek Finance Minister Yanis Varoufakis told German Finance Minister Wolfgang Wolfgang Schauble that his left-wing Syriza Party was elected to resist the austerity policies of the EU, Schuable replied, “We cannot possibly let an election change anything.”

 

The second problem is that national governments have no control over the value of the Euro. Of the EU’s 27 members, 19 of them use the common currency and make up the Eurozone. Germany’s condition for giving up the Mark and adopting the Euro was that Eurozone members were required to keep budget deficits to no more than 3 percent of national income, and debt levels to no higher than 60 percent of GDP. While that formula works well for Germany’s powerful export model, it doesn’t for of a number of other Eurozone economies.

 

The Euro’s value is set by the European Central Bank, which means that members cannot devalue their currency, a common strategy for dealing with debt, and one near and dear to the U.S. Treasury. As long as it’s smooth sailing, this rule works, but when a financial crisis hits, the common currency and the debt restrictions can mean big trouble for the smaller, less export-centered economies. When the financial bubble popped in 2008, countries like Italy, Spain, Portugal and Ireland—and to a certain extent, France—saw their debts soar, with strategies for dealing with it hamstrung by the Eurozone rules.

 

And that is when the third problem with the Eurozone kicked in. While there is a common currency, there is no sharing of debt through tax receipts. In a single currency system like the U.S., powerful economies in California and New York pay for bills in places like Mississippi and Louisiana.

 

Some 44 percent of Louisiana’s state budget is paid for by the federal government, which collects taxes in wealthy states and doles out some of it to regions whose economies are either too small or inefficient to meet their budget needs. If you get into trouble in the Eurozone, you are on your own.

 

While the EU has been good for banks and countries like Germany and Austria, it hasn’t been so good for many other of its members. Applying austerity as a cure for debt doesn’t cure the problem, it just creates a spiral of more debt and yet more austerity. As Rana Foroohar, business columnist for the Financial Times put it, “No nation can grow when the consumer, the corporate sector, and the public sector stop spending.”

 

Because most the center-left parties bought into the austerity-as-a-cure-for-debt formula, they have been devastated at the polls. The Dutch Labor Party was crushed in the last election, the French Socialists got less than 7 percent of the vote, and the Spanish Socialists are barely keeping ahead of the much more left Podemos Party. The Italian Socialist Party has dropped over 15 points in the polls and is now running behind the rather bizarre Five Star Movement. The Greek Socialists are a footnote.

 

The lesson for the left would seem to be that moving to the center or the right is a prescription for electoral disaster,

 

Macron’s new centrist party, En Marche!, won, but mostly due to the anti-Le Pen vote. His program of austerity, restraints on unions, and corporate tax cuts is not popular with everyone, although En Marche! did well in the first round of voting for the legislature, and poll indicate he may get a majority. If he does not, he plans to push the measures through by decree.

 

It is unlikely that such a centrist program will do anything to reduce France’s unemployment rate—9.6 percent overall and 25 percent among youth age 18 to 29—or lift the economy. Labor “reform” and austerity do not jump start economies, and tax cuts have an equally dreary record. Indeed, as Foroohar points out, there is not a single example in the last 20 years where tax cuts for business or the wealthy stimulated an economy. Indeed, the economic surge in the 1990s happened while tax rates were on the rise.

 

If the economic situation worsens, or even stays the same, the right will be waiting to pounce with their easy answers to economic crisis: nationalism and racism.

 

The clock is ticking. Germany will hold elections in September, and it looks as if Italy will also go to the polls this fall. In Spain, the right-wing minority government is looking increasingly fragile and another election is a strong possibility.

 

Center-left parties are doing well in Portugal, where the Socialists have made common cause with two more leftist parties. In Britain the Labour Party’s sharp break with the Party’s centrism upended the Conservative Party, denied it a majority in Parliament. A recent YouGov poll found that a majority of Britains supported Labour’s left-wing platform over the Conservatives’ austerity program.

 

The Portuguese coalition is demonstrating that there are successful economic models out there to deal with debt and growth that don’t impoverish the many for the benefit of a few. The question is, can the left in Italy, Spain and Germany put together programs that tap into the seething unrest that globalism’s inequality has generated?

 

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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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Brexit and Spain: Europe On The Edge

The Brexit & Spain: Europe On The Edge?

Dispatches From The Edge

July 5, 2016

 

On the surface, the June 23 Brexit and the June 26 Spanish elections don’t look comparable. After a nasty campaign filled with racism and Islamophobia, the British—or rather, the English and the Welsh—took a leap into darkness and voted to leave the European Union (EU). Spanish voters, on the other hand, rejected change and backed a rightwing party that embodies the policies of the Brussels-based trade organization.

 

But deep down the fault lines in both countries converge.

 

For the first time since Margaret Thatcher and Ronald Reagan rolled out a variety of free market capitalism and globalization that captured much of the world in the 1980s, that model is under siege. The economic strategy of regressive taxes, widespread privatization and deregulation has generated enormous wealth for the few, but growing impoverishment for the many. The top 1 percent now owns more than 50 percent of the world’s wealth.

 

The British election may have focused on immigration and the fear of “the other”—Turks, Syrians, Greeks, Poles, etc—but this xenophobia stems from the anger and despair of people who have been marginalized or left behind by the globalization of the labor force that has systematically hollowed out small communities and destroyed decent paying jobs and benefits.

 

“Great Britain’s citizens haven’t been losing control of their fate to the EU,” wrote Richard Eskow of the Campaign for America’s Future, “They’ve have been losing it because their own country’s leaders—as well as those of most Western democracies—are increasingly in thrall to corporate and financial interests.”

 

While most of the mainstream media reported the Spanish election as a “victory” for acting Prime Minister Mariano Rajoy’s Popular Party (PP) and defeat for the left, it was more a reshuffle than a major turn to the right, and, if Rajoy manages to cobble together a government, it is likely to be fragile and short lived.

 

It was a dark night for pollsters in both countries. British polls predicted a narrow defeat for the Brexit, and Spanish polls projected a major breakthrough for Spain’s left, in particular Unidos Podemos (UP), a new alliance between Podemos and the Communist/Green party, Izquierda Unida.

 

Instead, the Brexit passed easily and the UP lost 1 million votes from the last election, ending up with the same number of seats they had in the old parliament. In contrast, the Popular Party added 14 seats, although it fell well short of a majority.

 

A major reason for the Spanish outcome was the Brexit, which roiled markets all over the world, but had a particularly dramatic effect on Spain. The Ibex share index plunged more than 12 percent and blue-chip stocks took a pounding, losing about $70 billion dollars. It was, according to Spain’s largest business newspaper, “The worst session ever.” Rajoy—as well as the Socialist Party (SP)—flooded the media with scare talk about stability, and it partly worked.

 

The Popular Party poached eight of its 14 new seats from the center-right Ciudadanos Party and probably convinced some UP voters to shift to the mainstream SP.

 

But Rajoy’s claim that “We won the election. We demand the right to govern” is a reach. The PP has 137 seats, and it needs 176 seats to reach a majority in the 350-seat parliament. The Prime Minister says he plans to join with Ciudadanos, but because the latter lost seats in the election such an alliance would put the PP seven votes short. An offer for a “grand alliance” with the SP doesn’t seem to be going anywhere. “We are not going to support Rajoy’s investiture or abstain,” said Socialist Party spokesman Antonio Hernando. An abstention would allow the PP to form a government.

 

Which doesn’t mean Rajoy can’t form a government. There are some independent deputies from the Basque country and the Canary Islands who might put Rajoy over the top, but it would be the first coalition government in Spain and a fragile one at that.

 

Part of that fragility is a scandal over an email between Rajoy and Jean-Claude Juncker, head of the European Commission, that was leaked to the media. The Commission is part of the “troika” with the International Monetary Fund and the European Central Bank that largely decides economic policy in the EU.

 

During the election Rajoy promised to cut taxes and moderate the troika-imposed austerity measures that have driven Spain’s national unemployment rate to 22 percent, and a catastrophic 45 percent among young people. But in a confidential email to Juncker, the Prime Minister pledged that, “In the second half of 2016, once there is a new government, we will be ready to take further measures to meet deficit goals.”

 

In short, Rajoy lied to the voters. If the PP had won an absolute majority that might not be a problem, but a coalition government is another matter. Would Ciudadanos and the independents be willing to associate themselves with such deceit and take the risk that the electorate would not punish them, given that such a government is not likely to last four years?

 

Unidos Podemos supporters were deeply disappointed in the outcome, although the UP took the bulk of the youth vote and triumphed in Catalonia, Spain’s wealthiest province, and the Basque country. What impact UP’s poor showing will have on divisions within the alliance is not clear, but predictions of the organization’s demise are premature. “We represent the future,” party leader Pablo Iglesia said after the vote.

 

There is a possible path to power for the left, although it leads through the Socialist Party. The SP dropped from 90 seats to 85 for its worst showing in history, but if it joins with the UP it would control 156 seats. If such a coalition includes the Catalans that would bring it to 173 seats, and the alliance could probably pick up some independents to make a majority. This is exactly what the left, agreeing to shelve their differences for the time being, did in Portugal after the last election.

 

The problem is that the SP refuses to break bread with the Catalans because separatists dominate the province’s delegation and the Socialist Party opposes letting Catalonia hold a referendum on independence. Podemos also opposes Catalan separatism, but it supports the right of the Catalans to vote on the issue.

 

Rajoy may construct a government, but it will be one that supports the dead-end austerity policies that have encumbered most of the EU’s members with low or flat growth rates, high unemployment and widening economic inequality. Support for the EU is at an all time low, even in the organization’s core members, France and Germany.

 

The crisis generated by the free market model is hardly restricted to Europe. Much of Donald Trump’s support comes from the same disaffected cohort that drove the Brexit, and, while “The Donald” is down in the polls, so were the Brexit and the Spanish Popular Party.

 

The next few years will be filled with opportunity, as well as danger. Anti-austerity forces in Spain, Italy, Greece, Portugal and Ireland are organizing and beginning to coordinate resistance to the “troika”. But so, too, are parties on the right: France’s National Front, Hungary’s Jobbik, Greece’s Golden Dawn, Britain’s United Kingdom Independence Party, Austria’s Freedom Party, Denmark’s People’s Party and Sweden’s Democratic Party.

 

Instead of reconsidering the policies that have spread so much misery through the continent, European elites were quick to blame “stupid” and “racist” voters for the Brexit. “We are witnessing the implosion of the postwar cultural and economic order that has dominated the Euro-American zone for more than six decades,” writes Andrew O’Helir of Salon. “Closing our eyes and hoping that it will go away is not likely to be successful.”

 

A majority of Britain said “enough,” and while the Spanish right scared voters into backing away from a major course change, those voters will soon discover that what is in store for them is yet more austerity.

 

“We need to end austerity to end this disaffection and this existential crisis of the European project,” said a UP statement following the election. “We need to democratize decision making, guarantee social rights and respect human rights.”

 

The European Union is now officially a house divided. It is not clear how long it can endure.”

 

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The Brexit: A Very British Affair

Brexit Vote: A Very British Affair

Dispatches From The edge

June 24, 2016

 

In the end, the Brexit—the vote on whether the United Kingdom should remain in the European Union (EU) or be the first in the 29-member trade group to bail out—was a close fought matter, but for all the sturm und drang about a pivotal moment for the EU, the June 23 referendum that saw the Brexit pass was a very British affair.

 

While the European Union is clearly in a crisis—countries weighed down with unpayable debt, economies virtually dead in the water, double digit unemployment, and a rising chorus of opposition to the austerity policies of the EU authorities in Brussels—those were not the issues that brought the British people to the polls.

 

Indeed, the whole affair started as an entirely homegrown matter, an internal split in the ruling Conservative Party. Back in 2013, Conservative Prime Minister David Cameron cut a deal with the euro skeptic part of his party that if they would close ranks until after the 2015 general election, he would hold a referendum on the EU.

 

At the time, Cameron was also looking over his shoulder at the rise of the extreme right wing, racist United Kingdom Independence Party (UKIP), which had begun using anti-immigrant issues to poach Conservatives. It is likely that Cameron never really intended to follow through on the 2013 pledge, but once he let slip the dogs of war he had little control over the havoc that followed.

 

When the Conservatives defeated the Labour Party last year, the “out” faction demanded their due, and what emerged was a deeply disturbing campaign that focused on race, religion and “sovereignty,” the latter a code-word for a particularly nasty brand of nationalism that is on the rise all over Europe.

 

Brexiters conjured up hordes of Turks pouring into Britain, even though Turkey is not a EU member—or likely to become one. In any case, the UK is not part of the Schengen countries, those members of the EU that allow visa less travel.

 

“Vote Leave” ran posters depicting crowds of Syrians and endless ads on Turkish birthrates. “None of this needs decoding,” wrote Philip Stephens of the Financial Times, “The dog whistle has made way for the Klaxon. EU membership talks with Turkey, we are to understand, will soon see Britain overrun by millions of (Muslim) Turks—most of them thugs or welfare scroungers.”

 

Last year Britain did process some 330,000 immigrants, but the overwhelming majority of them hailed from Spain, Poland, the Baltic countries, and Greece. The UK has accepted very few Syrian refugees and Turks, certainly not enough to “overrun” the place.

 

The openly racist and xenophobic character of the “Leave” campaign put the UK left in a difficult spot. While the left, including the Labour Party, has profound differences with current policies and structures of the EU, these are not over immigration and religion. How to express those critiques without bedding down with the likes of UKIP or the euro skeptic Conservatives was a tricky business.

 

Labour Party head Jeremy Corbyn chose to endorse the “remain” campaign, but also to point out that the EU is an undemocratic organization whose financial policies have spread poverty and unemployment throughout the continent. However, because the trade groups have a progressive stance on climate change, equal pay, work hours, vacations, and maternity leave, Corbyn argued—if somewhat tepidly—that all in all, it was best to stay in and try to reform the organization.

 

Part of the “leave” vote sprang from one of Britain’s most pernicious ideologies—nostalgia. Run through a few verses of “Rule Britannia” and a considerable portion of older Britains go misty eyed with the mythology of Trafalgar, Waterloo, and Omdurman. Polls indicate that support for the EU among people over 60 was just 33 percent. It was only 10 percent more among Conservative Party members of all ages.

 

In contrast, young Britains, Labour Party members, the Scots and Northern Irish supported remaining, though in the end they were not enough. The fallout? There will almost certainly be another referendum for Scottish independence. Will Northern Ireland do the same?

 

Is this the beginning of end for the EU? It is hard to imagine how the organization can continue as it is since the second largest economy in the trade group has debarked. But the European Union’s troubles have only just begun, and a far more important measure of the future of the organization will come when Spanish voters go to the polls June 26.

 

In that election the austerity policies of the “troika”—the European Central Bank, the International Monetary Fund, and the European Commission—will be directly confronted by a spanking new left formation, Unidos Podemos (United We Can). UP comes out of an alliance of Izquierda Unida (United Left) and Podemos. It is currently running number #2 in the polls and nipping at the heels of the ruling rightwing Popular Party.

 

The UP calls for rolling back the austerity policies of the troika, a public works program to create 300,000 jobs, and economic stimulation to tackle Spain’s horrendous unemployment problem. Joblessness is over 22 percent nationwide and 48.5 percent among young Spaniards.

 

A recent manifesto by more than 200 leading Spanish economists charges that the austerity policies of the EU have created an “economic crisis” that “has had devastating consequences for our country, as well as the euro zone as a whole” and “unnecessarily prolonged the recession across the continent and generated deep social fractures by increasing economic and social inequalities.”

 

The euro zone is the 19 members of the EU that use the common currency, the euro.

 

UP plans to link up with similar minded forces in Greece, Portugal, Italy and Ireland to demand that Brussels adopt fiscal stimulation as a strategy against the economic malaise plaguing most of the EU.

 

United Left leader and Communist Alberto Garzon, probably the most popular politician in the country, says “Brussels has to understand that if they continue to apply austerity politics in Spain our social emergency will get worse, which only helps the rise of fascism—as we have already seen in Austria and other EU countries.”

 

The Brexit vote was a British affair (and promises to be a messy one). The Spanish election is a continental affair that will have reverberations worldwide.

 

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Spanish Elections: EU Watershed?

The Spanish Challenge

Dispatches From The Edge

June 8, 2016

 

For the past quarter of a century there have been few watershed moments in Spanish political history. Like a well-choreographed pas de deux, the center-left Socialist Workers Party (PSOE) and right-wing Popular Party (PP) have taken turns governing the country.

 

But the 2015 election changed all that. Upstart parties on the right and left crashed the ball, punished the two major parties, and forced another round of voting on June 26 that could be a turning point in a growing campaign to roll back austerity policies that have spread poverty and unemployment throughout the continent.

 

Last December’s vote saw the ruling PP drop 63 seats and lose its majority. But voters chastised the Socialists as well, with the party losing 20 seats. Many of the seats that formerly went to the two major parties shifted to the left-wing Podemos Party and, to a lesser degree, the rightist Ciudadanos Party. In the current parliament, the PP controls 123 seats, the Socialists 90, Podemos 69, and Ciudadanos 40. Regional parties of Basques, Catalans and Canary Island independents hold 28 seats. The parliament has 350 seats and a ruling majority is 176.

 

The new election was forced when none of the parties could form a working majority. The PP and Ciudadanos are on the same page politically, but together fall short of a majority. The Socialists, Podemos and the regional parties—most of which are leftist to one extent or another—could have formed a government, but the Socialist Party refuses to have anything to do with Catalan separatists.

 

While polls indicate that Spaniards are likely to vote pretty much the same way they did in December, a new kid on the block has altered the electoral terrain and raised the pressure on the center-left Socialists to make a choice: follow the lead of Portugal, where the Socialist Party formed a united front with the Left Bloc and the Communist/Green alliance, or imitate the Social Democrats in Germany and join a “grand coalition” and make common cause with the right?

 

The “new kid” is “Unidos Podemos” (“United We Can”), a coalition of Podemos and the United Left (UL). No one expects the new alliance to win a majority, but most analysts predict, that under Spain’s quirky election system the coalition could increase its representation by 25 percent, or somewhere between 15 to 20 seats. That would vault the new formation past the PSOE, making United Podemos (UP) the second largest bloc in the parliament. The PP is still number one and on track to slightly increase the 29 percent they received in the last election.

 

Spain’s election geography is heavily weighted toward rural areas, where the PP and Socialist Party are strong. While it takes 128,000 votes to elect someone in Madrid, it only takes 38,000 in some areas of the countryside. The rules also favor regional depth over broad support. In December, the UL won almost a million votes but only got two representatives. Other parties averaged one seat for every 60,000 votes.

 

United Podemos has internal tensions, but both parties have put these aside for the moment. For instance, Podemos supports continued membership in NATO, while United Left opposes the military alliance. The UL is also opposed to the current structure of the European Union and calls for a “refounding” of the organization.

 

What both agree on is ending Spain’s punishing austerity regime and confronting the country’s staggering unemployment. The national jobless rate is 21 percent, with a catastrophic 45.5 percent for youth 25 and under. The education system is in a state of collapse, and there is a national housing crisis. In the face of those conditions, the UP has decided to shelve disagreements over NATO and the EU and make common cause.

 

This is almost exactly what the left did in Portugal, where disagreements on NATO and the EU were sidelined in favor of freezing privatizations, rolling back tax increases, increasing the minimum wage and augmenting funding for education and medical care. There is no question that differences will eventually surface, but the Portuguese left has decided that when the house is burning down saving the inhabitants takes precedent. Whether the Spanish Socialist Party will take that step is an open question.

 

In some ways the divisions of the left in Spain are narrower than they are in the Portuguese alliance: part of the UP—specifically Podemos—backs NATO membership and the EU. But the PSOE’s opposition to Catalan independence is a major roadblock to an alliance with the UP. Podemos also believes Catalonia should remain part of Spain, but it supports the right of the Catalans to hold a referendum on the issue.

 

The Socialist Party’s hostility to Catalan independence allies it with the PP and Ciudadanos. The latter was formed to oppose Catalan independence, and the PP has led a mean-spirited campaign against Barcelona. When Catalans banned bull fighting, Madrid made bull fighting a “national cultural heritage” to thwart the ban. When Catalans flew their nationalist “Estelada” flag at the Copa Del Rey soccer match finals in Madrid, the government tried to block it. A court stopped the authorities from banning the flag, and Barcelona defeated Madrid in the match.

 

PP leader and acting Prime Minister, Mariano Rajoy, is pressing the Socialists to join a grand coalition that, so far, the latter has resisted. But the PSOE is deeply split. Some in the Party would rather bed down with the right than break bread with Podemos United. Others are afraid that, if the Socialist Party enters a grand alliance with the Popular Party, the Socialists will end up suffering the consequences. Center-left parties that join with center-right parties tend to do badly come election time.

 

The Greek Socialist Party was decimated by the left-wing Syriza Party after the former went into a grand coalition with the right. The Liberal Party’s alliance with the Conservative Party in England turned out to be a disaster. The Liberal Party barely exists today. And the German Social Democrat’s grand coalition with Chancellor Angela Merkel’s Christian Democratic Union has seen the once mighty Socialists slip below 20 percent in the polls. In Spain the mantel of “the left” would clearly shift to the UP alliance, something that many in the Socialist Party deeply fear.

 

There are profound differences among the European left, making unity difficult. The Socialist parties in Portugal and Spain, for instance, support paying off their countries debts to European banks and the International Monetary Fund (IMF). The Portuguese Socialist Party’s alliance partners, as well as the Spanish United Left, think the debt is unpayable and, in any case, unfair because most of the debt is the result of the 2008 economic crisis brought on by the irresponsible speculation of private banks. Speculators may have lost the money, but the taxpayers are picking up the tab.

 

There is a potential path out of the current situation, but it will have to overcome powerful interests and a deeply flawed economic system.

 

Those “interests” are the debt holders, ranging from governments to the European Central bank and the IMF.

 

The flaw is built into the eurozone, which is made up of the 19 countries in the 28-member European Union that use the common currency, the euro. As economist Thomas Piketty puts it, the eurozone has “a single currency with 19 different public debts, 19 interests rates upon which the financial markets are completely free to speculate, 19 corporate tax rates in unbridled competition with one another, without a common social safety net or shared educational standard—this cannot possibly work, and never will.”

 

Piketty argues the eurozone’s rigidity on debt and its strategy for solving it—austerity and yet more austerity—has “throttled” a recovery, particularly in Greece, Spain, Portugal, and Ireland. Even where countries economies are finally growing—Spain and Ireland—their debts are actually higher than when they instituted austerity regimes. And the “growth” is not due to the EU’s economic strategy, but rather to cheap oil and the declining value of the euro.

 

Piketty proposes a conference on debt, similar to the one that saved postwar Germany. Syriza has long called for such a gathering. Such a conference could cut debt burdens, lower interest rates and spread out repayments.

 

However, the eurozone would also have to be democratized. The current European parliament includes non-eurozone members and is largely powerless. Decisions are largely made by the unelected Troika—the IMF, the European Central Bank, and the European Commission. One thing that could be done immediately would be to institute a common corporate tax rate, which could be used to finance infrastructure improvements and education.

 

Germany is unlikely to support such an approach, but Germany only represents 25 percent of the EU’s population and GDP, while France, Italy and Spain combined account for 50 percent. Add in Ireland, Portugal and Greece, and Germany and its allies are a distinct minority.

 

Italy is openly advocating debt reductions and loosening of the eurozone’s rules, and France has already raised the issue of a more democratic and transparent EU political structure along the lines of what Piketty is proposing.

 

Can it be done? It won’t be easy, but Germany is increasingly isolated, and countries in the southern tier of the eurozone are desperate for relief from the endless rounds of austerity. They are also no longer convinced that such a strategy will lower their debt burdens and stimulate their economies. In fact, most the debt is unpayable no matter how much austerity is applied.

 

There are some wild cards in the upcoming election. Both the PP and PSOE have been tarred with the corruption bush, and two former Socialist governors of Andalusia have just been charged with illegal payments to supporters. Turnout will likely be lower than in the December election, but the left’s effective grassroots organizations may offset that.

 

The Spanish elections arrive at a critical time for the European Union, and a Madrid government that resists the increasingly discredited economic strategy of the troika could shift the balance in the direction imagined by Piketty.

 

That, however, will depend on whether the Socialist Party decides to join with the left or go into a grand coalition with the right.

 

A failure by the left to unite will open the door for Europe’s resurgent far right, whose xenophobia and racism have gained ground all over the continent.The only way to effectively counter the far right is to democratize the European Union and pursue economic policies that will provide jobs and raise living standards. Only the left can deliver such a program.

 

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The EU: A House Divided

European Union: A House Divided

Dispatches From The Edge

May 16, 2016

 

“Larger now than the Roman Empire of two thousand years ago, more opaque than the Byzantine, the European Union continues to baffle observers and participants alike.”

Perry Anderson

British historian

 

The European Union is one of the premier trade organizations on the planet, with a collective GDP that matches the world’s largest economies. But it is far more than a trade group. It is also a banker, a judicial system, a watchdog, a military alliance, and, increasingly, an enforcer of economic rules among its 28 members.

 

On the one hand it functions like a super state, on the other, a collection of squabbling competitors, with deep divisions between north and south. On June 23, the two-decade-old organization will be put to the test when Great Britain—its second largest economy—votes to stay in the EU or bail out.

 

The awkwardly named “Brexit” has stirred up a witches’ brew of xenophobia, racism and nationalism, but it has also served to sharpen a long standing debate among the European left over the nature of the organization, and whether it serves to unite a continent shattered by two world wars or functions as little more than a vehicle to spread a particular species of capitalism that has impoverished more people than it has lifted up.

 

The EU was originally sold as an effective way to compete with U.S. and Japanese commercial power (and later China) by integrating the economies of Western Europe into a common market. The 1957 Treaty of Rome established the European Economic Community (EEC), but that organization was plagued by currency instability.

 

Currency manipulation is a standard economic strategy, one the U.S. Treasury follows to this day. The idea is to boost exports by deflating one’s currency, thus making one’s products cheaper. In an organization like the EEC, however, where currencies were traded back and forth, that strategy caused chaos, particularly after the Americans decoupled the dollar from gold in 1971. The U.S. immediately began aggressively devaluing its currency and undercutting Germany.

 

To make a long history brief, Germany and France began pushing for a common currency, though for different reasons.

 

For Germany, fluctuating currency rates cut into that country’s export engine. For France, a common currency would give Paris some say over the EEC’s economic policies through the creation of a European Central Bank, policies that at the time were largely determined by Germany’s powerful economy.

 

Although Britain opted out of adopting the Euro, London rapidly became the financial center of the continent. In the end, 19 countries would adopt the Euro, creating the Eurozone. Eight others, including Denmark, Sweden and Poland kept their own currencies.

 

The common currency—established by the 1991 Maastricht Treaty and launched in 1999—effectively put the German Bundesbank in charge. Bonn agreed to the common currency, but only on the condition that everyone kept their budget deficits to 3 percent of national income and held their government debt level at 60 percent of GDP. Those figures matched Germany’s economy, but very few of the other states in the EU.

 

The Maastricht Treaty also transformed the EEC into the EU in 1993.

 

Deflating one’s currency as a tactic to increase exports and stimulate growth during a downturn was no longer an option, and the debt ratio was set so low that few economies could keep to its strictures. When the bottom fell out during the 2008 economic meltdown, EU states found out just what they had signed on for: draconian austerity measures, the widespread privatization of state owned enterprises—from water and electrical systems, to airports and harbors—and emigration. Millions of mainly young Portuguese, Irish, Greeks and Spaniards fled abroad.

 

The European Central Bank—with its cohorts, the International Monetary Fund and the European Commission, the so-called Troika—straitjacketed economies throughout the continent, turning countries like Greece, Spain, Portugal, and Ireland into basket cases, forcing them to borrow money to keep their banks afloat while instituting austerity regimes that led to massive unemployment, huge service cutbacks, and rising poverty rates.

 

The Troika had a neat trick: it shifted the debts incurred by private speculators on to the public, while the Germans spun up a fairy tale to explain the counter-example: the frugal frau.

 

“The Swabian housewife,” lectured German Chancellor Angela Merkel, “would have told us her worldly wisdom: In the long run you cannot live beyond your means.”

 

Except that the debts were not due to the Greeks, Irish, Spaniards, and Portuguese “living beyond their means.” They were just picking up the tab run up by the speculators. The vast majority of “bailouts” that followed the crash went directly into the vaults of French, British, German, and Austrian banks. On the day the Greek “bailout” was announced, French bank shares rose 24 percent.

 

In many ways, the EU resembles a military alliance on the march. Jan Zielonka, a professor of European politics at Oxford, calls the EU a “postmodern empire,” filling the vacuum created by the fall of the Soviet Union, using “checkbooks rather than swords as leverage.” During the Clinton administration, the EU—along with NATO—pushed eastward, creating what Zbigniew Brzezinski called “the Eurasian bridgehead for American power and the potential springboard for the democratic system’s expansion into Eurasia.”

 

The Obama administration strongly supports the UK remaining in the EU.

 

But the EU has very little to do with “democracy,” as the recent Greek crisis demonstrated. In a confrontation between the then newly elected Greek Finance Minister Yanis Varoufakis and German Finance Minister Wolfgang Schauble, the latter refused to negotiate over the austerity program that had cratered Greece’s economy. “I’m not discussing the program,” said Schauble, “This was accepted by the previous [Greek] government and we can’t possibly let an election change anything.”

 

In short, the Troika—an unelected body—makes all economic decisions and is unwilling to consider any other approach but that of the mythical Swabian housewife. It isn’t democracy moving east, but the Bundesbank, and a species of capitalism that is unmoved by unemployment, poverty and widespread misery

 

So is the Brexit a challenge to the growing might of capital and an implicit critique of the EU’s dearth of democracy? Nothing’s that simple.

 

First, the loudest critics of the EU are people one needs a very long spoon to sup with: Marine Le Pen’s racist National Front, Britain’s xenophobic United Kingdom Independence Party, Hungary’s thuggish Jobbik, Greece’s openly Nazi Golden Dawn, and Italy’s odious Northern League. Hatred of immigrants and Islamophobia are the glue that binds these parties, which are active and growing throughout the EU.

 

Indeed, some on the British left have suggested voting against a Brexit precisely because the most vocal opposition to the EU comes from the most reactionary elements in the UK. The British Conservative Party is deeply split on the issue, with its most rightwing and anti-immigrant members favoring getting out.

 

The left is also filled with crosscurrents. While some argue for getting out because they see the EU as an undemocratic vehicle for the expansion of international capital, others are critical, but advocate staying in. British Labour Party leader Jeremy Corbyn—hardly a friend to international capital— opposes the Brexit.

 

While Corbyn is deeply critical of the EU’s lack of “democratic accountability, “ and its push to “privatize public services,” he argues that there is a “strong socialist case” for staying in. Corbyn says the EU plays a positive role on climate change, and that exiting the EU would initiate a race to the bottom on issues like equal pay, work hours, vacations and maternity leave. The Scottish National Party, which is to the left of the Labour Party, also opposes a Brexit, and threatens to call for another independence referendum if it passes.

 

Left parties in Greece, Italy, Spain, Portugal, and Ireland are critical of the EU, but most do not advocate withdrawing. What they are demanding is a say over their economic decisions and relief from the rigid rules that favor economies like Germany, and bar many others from ever becoming debt free.

 

It is ironic that Germany—the country that refuses to even consider retiring some of the overwhelming debts that enchain countries like Greece—owes its current wealth to the 1951 London Conference that cut post-war Germany’s debt in half, lowered interest rates, and stretched out debt payments. The result was the “Wirtschaftwunder” [economic miracle] and the creation of an industrial juggernaut. Greece’s Syriza Party has long called for such a conference to deal with the EU countries mired in debt.

 

There is no secret why Germany, France and the European Banks oppose debt reduction, or “haircuts”: Between the three of them they hold almost $84 billion of Greece’s debt

 

The polls show the British electorate could go either way on a Brexit. What happens if they do leave is hardly clear, because it would be a first. The predictions range from doom and gloom to sunny days, and everything in between, although it is doubtful the EU would severely punish Europe’s second largest economy.

 

One model the left needs to look at in this battle is Portugal, where three left parties, who have long fought with each other, found common ground around reversing the austerity policies that have racked the country’s economy for four years. Portugal just recently received a barely favorable bond rating that gives the coalition government some breathing room. The economy is growing and unemployment down, but at 129 percent of GDP, Portugal’s debt burden is still the third highest in Europe.

 

Alone, Portugal is no match for power of the Troika, but Lisbon has allies in Spain, Greece, Ireland and increasingly, Italy. Support for the EU in Italy has gone from 73 percent in 2010 to 40 percent today. “Europe has taken the wrong road,” says Italian Prime Minister Matteo Renzi. “Austerity alone is not enough.”

 

Given the absence of a strong, continent-wide left, however, reversing the current economic rules of the EU may be a country-by-country battle.

 

It is already underway, and for all of the economic power of the EU, the organization is vulnerable to charges that Brussels has sidelined democracy.

 

If Brussels—read Germany—can be persuaded or forced to agree to debt reductions, to loosen the spending restrictions and start pump priming, Europe can do something about its horrendous unemployment rate and underperforming economies. If not, whether the British leave or not may be irrelevant: a house divided cannot stand for long.

 

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A Terrible Beauty: Ireland’s Easter Rebellion

A Terrible Beauty: The 1916 Easter Rebellion

Dispatches From The Edge

March 22, 2016

 

“Poblacht na hEireann”: The speaker of these words, standing on the front steps of Dublin’s General Post Office and reading from a proclamation, the ink was barely dry, of the “provisional government of the Irish Republic” was the poet Padraig Pearse. It was just after noon on April 24, 1916, the opening scene in a drama that would mix tragedy and triumph, the twin heralds of Irish history.

 

It is a hundred years since some 750 men and women threw up barricades and seized strong points in downtown Dublin. They would be joined by maybe a 1,000 more. In six days it would be over, the post office in flames, the streets blackened by shell fire, and the rebellion’s leaders on their way to face firing squads against the walls of Kilmainham Jail.

 

And yet the failure of the Easter Rebellion would eventually become one of the most important events in Irish history, a “failure” that would reverberate worldwide and be mirrored by colonial uprisings almost a half-century later.

 

Anniversaries—particularly centennials—are equal parts myth and memory, and drawing lessons from them is always a tricky business. And, while 1916 is not 2016, there are parallels, pieces of the story that overlap and dovetail in the Europe of then with the Europe of today.

 

Europe in 1916 was a world at war. The “lamps,” as the expression goes, had gone out in August 1914, and the continent was wrapped in barbed wire and steeped in almost inconceivable death. Shortly after the last Irish rebel was shot, the British launched the battle of the Somme. More than 20,000 would die in the first hour of that battle, and, by the end, there would be more than a million casualties on both sides.

 

Europe is still at war, in some ways influenced by the footsteps of a colonial world supposedly long gone. Britain is fighting its fourth war in Afghanistan. Italian Special Forces are stalking Islamists in Libya. French warplanes are bombing their old stomping grounds in Syria and chasing down Tuaregs in Mali.

 

And Europe is also at war with itself. Barbed wire is once again being unrolled, not to make killing zones out of the no man’s land between trenches, but to block the floods of refugees generated by European—and American—armies and proxies in Afghanistan, Iraq, Yemen, Somalia, and Syria.

 

In many ways, the colonial chickens are coming home to roost. The British and French between them secretly sliced up the Middle East in 1916, using religion and ethnicity to divide and conquer the region. Instability was built in. Indeed, that was the whole idea. There would never be enough Frenchmen or Englishmen to rule the Levant, but with Shiites, Sunnis and Christians busily trying to tear out one another’s throats, they wouldn’t notice the well dressed bankers on the sidelines—“tut tutting” the lack of civilized behavior and counting their money.

 

The Irish of 1916 understood that gambit, after all, they were its first victims.

 

Ireland was a colony long before the great powers divided up the world in the 18^th and 19^th centuries, and the strategies that kept the island poor, backward and profitable were transplanted elsewhere. Religious divisions kept India largely docile. Tribal and religious divisions made it possible to rule Nigeria. Ethnic conflict short-circuited resistance in Kenya and South Africa. Division by sect worked well in Syria, Lebanon and Iraq.

 

For Ireland was the great laboratory of colonialism where the English experimented with ways to keep a grip over the population. Culture, religion, language and kinship were all grist for the mill. And when all else failed, Ireland was a short sail across the Irish Sea: kill all the lab rats and start anew.

 

The fact that the English had been in Ireland for 747 years by 1916 was relevant. The Irish call the occupation “the long sorrow,” and it had made them a bit bonkers. Picking a fight in the middle of a war with one of the most powerful empires in human history doesn’t seem like a terribly rational thing to do (and, in truth, there were many Irish who agreed that it was a doomed endeavor.).

 

The European left denounced the Easter rising, mostly because they couldn’t make much sense of it. What was a disciplined Marxist intellectual and trade union leader like James Connolly doing taking up arms with mystic nationalists like Padraig Pearse and Joseph Mary Plunkett? One of the few radicals to get it was V.I. Lenin, who called criticism of the rebellion “monstrously pedantic.”

 

What both Connolly and Lenin understood was that the uprising reflected a society profoundly distorted by colonialism. Unlike in the rest of Europe, in Ireland different classes and viewpoints could find common ground precisely because they had one similar experience: no matter what their education, no matter what their resources, in the end they were Irish, and treated in everyway as inferior by their overlords.

 

Most of the European left was suspicious of nationalism in general because it blurred the lines between oppressed and oppressors and undermined the analysis that class was the great fault line. But as the world would discover a half-century later, nationalism was an ideology that united the many against the few. In the end, it would create its own problems and raise up its own monsters, but for the vast majority of the colonial world it was an essential ingredient of national liberation.

 

The Easter rebellion was not the first anti-colonial uprising. The American threw off the English in 1783; the Greeks drove out the Turks in 1832. India’s great Sepoy rebellion almost succeeded in driving the British out of the sub-continent in 1857. There were others as well.

 

But there was a special drama to the idea of a revolution in the heart of an empire, and it was the drama more than the act that drew the world’s attention. The Times of London blamed the Easter rising for the 1919 unrest in India, where the British Army massacred 380 Sikh civilians at Amristsan. How the Irish were responsible for this, the Times never bothered to explain.

 

But the Irish saw the connection, if somewhat differently than did the Times. Roger Casement, a leader of the 1916 rebellion who was executed for treason in August of that year, said that the cause of Ireland was also the cause of India, because the Easter rebels were fighting “to join again the free civilizations of the earth.”

 

As a rising it was a failure, in part because the entire affair was carried out in secret. Probably no more than a dozen or so people knew that it was going to happen. When the Irish Volunteer Force and the Irish Citizens Army marched up to the Post Office, most of the passersby—including the English ones—thought it was just the “boys” out having a little fun by provoking the authorities again.

 

But secrets don’t make for successful revolutions. The plotters imagined that their example would fire the whole of Ireland, but by the time most the Irish had found out about it, it was over. It was not even an overly bloody affair. There were about 3,000 casualties and 485 deaths, many of them civilians. Of the combatants, the British lost 151, the rebels 83, including the 16 executed in the coming weeks. It devastated a square mile of downtown Dublin, and, when the British troops marched the rebels through the streets after their surrender, crowds spit on the rebels.

 

But as the firing squads did their work day after day, the sentiment began to shift. Connolly was so badly wounded he could not stand, so they tied him to a chair and shot him. The authorities also refused to release the executed leaders to their families, burying them in quicklime instead. Some 3,439 men and 79 women were arrested and imprisoned. Almost 2,000 were sent to internment camps, and 98 were given death sentences. Another 100 received long prison sentences.

 

All of this did not go down well with the public, and the authorities were forced to call off more executions. Plus, the idea of an “Irish Republic” was not going to go away, no matter how many people were shot, hanged or imprisoned.

 

The Easter rising was certainly an awkward affair. Pearse called it a “blood sacrifice,” which makes the rebellion sound uncomfortably close to the Catholic Church’s motto that “The blood of the martyrs is the seat of the church.” And, yet, that is the nature of things like the Easter rising. 1916 churned up all of the ideologies, divisions, and prejudices that colonialism had crafted over hundreds of years, making for some very odd bedfellows. Those who dreamed of re-constituting the ancient kingdom of Meath manned barricades with students of Karl Marx. Illiterate tenant farmers took up arms with Countess Markievicz, who counseled women to “leave your jewels in the bank and buy a revolver.”

 

Some of those divisions have not gone away. There will be at least two celebrations of the Easter rising. The establishment parties—Fine Gael, Fianna Fail, and the Labour Party—have organized events leading up to the main commemoration March 27. Sinn Fein, representing the bulk of the Irish left, will have its own celebration. There are several small splinter groups that will present their own particular story of the Easter rising.

 

And if you want to be part of it, you can go on the Internet and buy a “genuine” Easter Rebellion T-shirt from “Eire Apparent.”

Everything is for sale, even revolution.

 

In some ways, 1916 was about Ireland and its long, strange history. But 1916 is also about the willingness of human beings to resist, sometimes against almost hopeless odds. There is nothing special or uniquely Irish about that.

 

In the short run, the Easter rebellion executed the people who might have prevented the 1922-23 civil war between republicans and nationalists that followed the establishment of the Irish Free State in 1921. The Free State was independent and self-governing, but still part of the empire, while the British had lopped off Northern Ireland to keep as its own. Ireland did not become truly independent until 1937.

 

In the long run, however, the Easter rising made continued British rule in Ireland impossible. In that sense, Pearse was right: the blood sacrifice had worked.

 

Does the centennial mean anything for today’s Europe? It may. Like the Europe of 1916, the Europe of 2016 is dominated by a few at the expense of the many. The colonialism of empires has been replaced by the colonialism of banks and finance. The British occupation impoverished the Irish, but they were not so very different than today’s Greeks, Spanish and Portuguese—and yes, Irish—who have seen their living standards degraded and their young exported, all to “repay” banks from which they never borrowed anything. Do most Europeans really control their lives today any more than the Irish did in 1916?

 

How different is today’s “Troika”—the European Central Bank, the European Commission, and the International Monetary Fund—from Whitehall in 1916? The latter came unasked into Ireland, the former dominates the economic and political life of the European Union.

 

In his poem, “Easter Week 1916,” the poet William Butler Yeats called the rising the birth of “a terrible beauty.” And so it was. But Pearse’s oration at the graveside of the old Fenian warrior Jeremiah O’Donovan Rossa may be more relevant: “I say to the masters of my people, beware. Beware of the thing that is coming. Beware of the risen people who shall take what yea would not give.”

 

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Socialists Rain On Spain

Socialists Rain On Spain

Dispatches From the Edge

March 5, 2016

 

The effort by Pedro Sanchez, leader of the Spanish Socialist Workers Party, to form a government on March 2 brings to mind the story of the hunter who goes into the forest with one bullet in his rifle. Seeing a deer on his right and a boar on his left, he shoots in the middle.

 

Sanchez’s search for a viable coalition partner began when the ruling right-wing Popular Party (PP) took a pounding in Spain’s Dec. 20 election, dropping 63 seats and losing its majority. Voters, angered by years of savage austerity that drove poverty and unemployment rates to among the highest in Europe, voted PP Prime Minster Mariano Rajoy out and anti-austerity parties in, although leaving the PP as the largest single party in the parliament.

 

The only real winner in election was the left-wing Podemos Party, which took 20.6 percent of the vote. The Socialist Party actually lost 20 seats, its worst showing ever, and at 22 percent, barely edged out Podemos. And if the Spanish political system were not rigged to give rural voters more power than urban ones, Podemos would have done much better. The Socialists and the PP are particularly strong in rural areas, while Podemos is strong in the cities.

 

While a candidate in Madrid needs 128,000 votes to be elected, in rural areas as few as 38,000 votes will get you into the parliament. Podemos and the Socialists both won over five million votes, with the difference only 341,000. But the Socialists took 89 seats to Podemos’s 65.

 

Spaniards voted for change, but the Socialists, who ran an anti-austerity campaign, chose to form an alliance with the conservative Ciudadanos or Citizens Party, which refuses to have anything to do with Podemos—and the feeling is mutual. Ciudadanos also underperformed at the polls. Ciudadanos was predicted to get as much as 25 percent of the vote and surpass Podemos, but instead came in under 14 percent with only 40 seats.

 

On the surface the only thing the Socialists and Ciudadanos have in common is their adamant opposition to Catalonia’s push for a referendum on independence. Podemos is also opposed to a Catalan breakaway, but supports the right of the region to vote on the matter.

 

Catalonia’s drive for independence is certainly controversial and would have a major impact on Spain’s economy, but exactly how the Spanish government thinks it can block a referendum is not clear. And if Catalans did vote for independence, how would Madrid stop it? One doubts that the government would send in the army or that such an intervention would be successful.

 

Indeed, the fierceness with which the PP, Socialist Party and Ciudadanos oppose the right of Catalans to vote is more likely to drive the province toward independence, rather than discourage it. At this point Catalonia’s voters are split slightly in favor of remaining in Spain, although young voters favor independence, a demographic factor that will loom larger in the future. In provincial elections last September, candidates who supported independence took 47.7 percent of the vote.

 

The Socialists had a path to form a government, but one that would have required the party to modify its position on a Catalan referendum. If it had done so, it could have formed a government using Podemos, the Republican Left of Catalonia (ERC), the Basque Nationalist Party, (EJA-PNV), Canary Islanders, and a mix of independents. Had the Socialists compromised on Catalonia, they might even have picked up the votes from the center-right Democracy and Freedom Party (DIL).

Left parties in the Parliament can put together 162 votes on their own, which is short of the 176 needed to form a government. But it would not have been impossible to pick up 13 more votes from the mix of 14 independents and eight seats controlled by the Catalan DIL.

 

Choosing Ciudadanos as a partner makes little sense. Podemos immediately dropped cooperation talks with the Socialists and sharply criticized Sanchez for not building a genuine left government. Ciudadanos’ economic policies are not much different than the PP’s, plus it opposes abortion, and is hawkish on immigration. In any case the party did poorly in the national elections. The merger “prevents the possibility of forming a pluralistic government of change,” according to the parliamentary deputy and Podemos spokesperson, Inigo Errejon.

 

“Negotiate with us,” Podemos leader Pablo Iglesias told Sanchez, “stop obeying the oligarchs.” The Socialist Party leader pleaded with Podemos to vote for him so that the Socialist-Ciudadanos alliance could pass “progressive” legislation like raising the minimum wage and addressing the gender wage gap. The Socialists also presented a plan to tax the wealthy, improve health care, and try to stop the growth of “temporary” worker contracts that have reduced benefits and job security.

 

But those issues do not really address the underlying humanitarian crisis most Spaniards are experiencing, like poverty and growing homelessness, and the damage austerity has inflicted on education and social services. And Ciudadanos’ views on abortion, immigration and privatizing public services are repugnant to Podemos.

 

Spain’s unemployment rate is still over 20 percent—far more among the youth in the country’s south—and many of the jobless will soon run out of government aid. While the economy grew 3.1 percent in 2015 and is projected to grow 2.7 percent in 2016, it is not nearly where it was before the great 2008 financial crisis and the implosion of Spain’s enormous real estate bubble. On top of which, that growth rate had nothing to do with the austerity policies, but instead was the result declining value of the euro, low interest rates, and cheap oil.

 

If the Socialists have no success in forming a government, there will be new elections, probably in late June. Polls show the outcome of such a vote would be similar to the last election, but Spanish polls are notoriously inaccurate. In the last election they predicted Ciudadanos would eclipse Podemos. The opposite was the case.

 

The right-wing Popular Party is likely to do worse, because it is mired in a series of corruption scandals over bid-rigging and illegal commissions. In Valencia, nine out of the 10 PP councilors are considered formal suspects in the case. Indeed, the Party’s reputation for corruption makes it difficult for any other grouping in the parliament to make common cause with it. And even if Ciudadanos dumped its anti-corruption plank and broke its promise never to cooperate with the PP, such a government would still fall short of the 176 votes needed. The PP controls 119 seats.

 

In part, the Socialists are frightened by the growth of Podemos and the fact that it might replace them as the number two party in the parliament. In part, the Socialists also tend to run from the left and govern from the center, even the center-right. That is a formula that will simply not work anymore in Spain. The domination of the Spanish government by the two major parties since 1977 is a thing of the past, having been replaced by regional and anti-austerity parties like Podemos.

 

Before the recent election, the two major parties controlled between 75 percent and 85 percent of the voters. In the December election, they fell to just over 50 percent.

 

A more successful model is being built next door in Portugal, where the Socialists united with two left-wing parties to form a government. All the parties involved had to compromise to make it work, and the alliance might come apart in the long run. But for now it is working, and the government is dismantling the more egregious austerity measures and has put a halt to the privatization of public services like transportation.

 

Spain’s Socialist Party is riven with factions, some more conservative than others. Sanchez—whose nickname is “ El Guapo” (handsome)—has so far out-maneuvered his party opponents, but this latest debacle will do him little good. He did receive support from the party’s rank and file for the Ciudadanos move, but that led nowhere in the end. Sanchez got 130 votes in the first round and only picked up one more vote in the second round.

 

Another election will probably not produce a sea change in terms of party support, but voters may punish the Socialists for their unwillingness to compromise. Those votes are unlikely to go to Ciudadanos, and the PP is so mired in corruption that it will struggle to keep its current status as the largest party in the parliament. A recent poll taken after Prime Minster Rajoy passed on trying to form a government found that 71 percent of the voters felt that the PP did not have the best interests of Spain in mind. That refusal may come to haunt the PP in June.

 

Podemos will undoubtedly pick up some Socialist Party voters, but probably not enough to form a government. That will only happen if Socialists put aside their stubborn opposition to a Catalan referendum and help build what Podemos calls a “genuine” leftist government.

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Irish Shillelagh Austerity

Irish Shillelagh Austerity *

Dispatches From The Edge

Conn Hallinan

Mar. 1, 2016

 

If there is one thing clear after Ireland’s recent election, it is that people no longer buy the myth that austerity is the path to economic salvation. It is the same message that Greeks, Portuguese and Spaniards delivered to their elites over the past year: the prophets of tough love, regressive taxes, and massive social services cutbacks should update their resumes and consider a different profession than politics.

 

Ireland is a small country but the Feb. 26 election drove a big spike into the policies of the “troika”—the European Central Bank, the European Commission and the International Monetary Fund—that have blitzed economies across the continent and made chronic unemployment and growing economic inequality a continuing source of malaise.

 

The governing center-right Fine Gael lost 16 seats, and its partner, the center-left Labour Party, was virtually wiped out, dropping from 37 seats it controlled after the 2011 election only to six. The two parties had overseen an economic program that almost doubled child poverty rates, drove some 500,000 young people to emigrate, reduced wages by 15 percent, and sharply raised the jobless rate.

 

Ireland’s economic difficulties had nothing to do with public spending, but were the fallout from private speculators and banks caught in the great 2008 financial meltdown. Rather than making the speculators pay, the then government of Fianna Fail shifted the bank debts to taxpayers. The troika agreed to a $67 billion bailout of the banks, but only if major bondholders were exempted and the government would institute a draconian austerity program. Most Irish voters were unaware of this “trade off” until just before the election.

 

The Fine Gael/Labour government has long claimed that it had no choice but to apply the austerity formulas and that, in any case, the policies worked, because the economy was recovering. Voters didn’t buy it. The “recovery” has largely been restricted to Dublin—where homelessness in January reached a record high—and the growth was largely a product of falling oil prices and a decline in the value of the euro, rather than the result of austerity.

 

As Fintan O’Toole of the Irish Times put it, “What voters said on Friday is in some ways highly complex, but in relation to the dominant narrative” that austerity is the path to recovery, the Irish said, ‘We don’t believe you.’” The Fine Gael-Labour campaign slogans of “stability” and “all is well” fell flat. The government, O’Toole said, “imagined that it would ride back to power on a feel-good factor, as if people who had been repeatedly beaten should feel good that the beating has stopped.”

 

At first glance, the Irish election looked like a shootout between the two center-right parties—Fine Gael and Fianna Fail—that have taken turns governing Ireland for more than eight decades. But this time around Fianna Fail ran from the left—mild left, as it were—promising greater fairness and more public services. Fianna Fail, which was crushed in the 2011 election, bounced back from 21 seats to 44 and is now the second largest party in the Dail after Fine Gael.

 

The Dail has 158 seats.

 

Another winner was the unabashedly leftist Sinn Fein Party, which picked up nine seats for a total of 23 and is now the third largest force in the Dail. The People Before Profits/Anti-Austerity Party gained two seats, and the independent bloc picked up a seat. In contrast, the rightwing Renua Party lost its three seats.

 

Irish elections are complex affairs, employing a proportional representation system that provides a path for small parties to gain a foothold in the Dail, but makes campaigning complicated.

 

What emerged from the Feb. 26 vote was a hung parliament: Fine Gael/Labour did not win enough seats for a majority, but neither did anyone else. There is talk of a “grand coalition” between Fine Gael and Fianna Fail, but both parties would have to renege on pre-election promises that they wouldn’t consider such a move, and it would automatically make Sinn Fein the leader of the opposition. The latter possibility scares both center-right parties.

 

Fine Gael, Fianna Fail, and Labour refuse to consider a coalition with Sinn Fein because of the Party’s links to the Irish Republican Army and violence. It is an odd rationale, considering that all three parties have roots in the sometimes quite violent struggle for Irish independence and the bloody 1922-23 civil war over the Anglo-Irish Treaty that freed the Republic from Great Britain.

 

In any case, Sinn Fein leader Gerry Adams made it clear that his party has no interest in being a minority member of any combination that Fine Gael or Fianna Fail put together. And there is no way that Sinn Fein can construct a majority coalition. At most, the left and center-left parties could muster 60 votes, and that would include the Labour Party, a dubious possibility. Indeed, one Labour Party leader, Alan Kelly, has already called for a Fine Gael-Fianna Fail unity government.

 

It is possible that Fine Gael will try to rule as a minority government, but that would require Fianna Fail to abstain when it comes time to elect a Prime Minister, or Taoiseach. And it would also mean that Fianna Fail might have to choose between swallowing some of Fine Gael’s austerity policies that it ran against in the election, or bringing down the government. Since any minority government will be extremely fragile, another round of elections is a real possibility. During the campaign, Fianna Fail leader Michael Martin said he would not go into a coalition with Fine Gael, and Irish voters in a re-match might punish any party that broke its promises.

 

Irish voters essentially gave two messages in the last election, one directed at Europe and the other at its own political structure.

 

About Europe, the voters firmly rejected the increasingly discredited policies of the troika, joining Greek, Spanish and Portuguese voters in saying “enough.” Austerity as a cure for economic crisis, as O’Toole points out, “was not just an Irish story—it was a European narrative.” That narrative is under siege.

 

About Ireland, voters turned their own political structure upside down. The two parties that have dominated Ireland since the end of the 1922-23 civil war can now claim the allegiance of slightly less than 50 percent of the electorate. This election, as Sinn Fein’s Adams argues, represents “a fundamental realignment of Irish politics.”

 

*A shillelagh is a blackthorn walking stick that the Irish use for whacking things they don’t like.

 

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Spain Says “No” to Austerity

Spain Says “No”

Dispatches From The Edge

Dec. 23, 2016

 

For the third time in a year, the tight-fisted, austerity policies of the European Union (EU) took a beating, as Spanish voters crushed their rightwing government and overturned four decades of two-party reign. Following in the footsteps of Greek and Portuguese voters earlier this year, Spaniards soundly rejected the economic formula of the Troika—the European Central Bank, the European Commission and the International Monetary Fund—that has impoverished millions of people and driven the jobless rate to almost a quarter of the country.

 

Greece’s leftist prime minister, Alex Tsipras said “Austerity has been politically defeated in Spain,” and that the election was a sign “that Europe was changing.” Italy’s prime minister, Matteo Renzi said, “As already happened in Greece and Portugal, governments which apply rigid austerity measures…are destined to lose their majorities.”

 

The big loser in the Spanish elections was the rightwing Popular Party (PP) that lost 63 seats and its majority in the 350-member parliament. The PP won more votes than any other single party, but its support fell from 44 percent in the 2011 elections to 28.7 percent. While PP Prime Minister Mariano Rajoy ran on a platform that the Spanish economy had recovered from its disastrous plummet following the 2007-08 worldwide financial crisis, voters were not buying.

 

The economy is indeed growing—3.1 percent this year and projections for 2.7 percent in 2016—but after four years it has yet to reach pre-crisis levels. Unemployment has remained at 21 percent nationwide and more than double that figure among youth and in Spain’s battered south.

 

Besides delivering a decisive “no” to austerity, Spaniards also turned out the two-party system that has dominated Spain since the death of dictator Francisco Franco in 1975. For 40 years the PP and Socialists Workers Party (PSOE) have taken turns running the country, racking up a track record of corruption and malfeasance. The Socialists also took a drubbing, albeit less so than the PP. PSOE lost 20 seats and fell from 28.8 percent support in 2011 to 22 percent in 2015.

 

The winners were two new parties, the left-wing Podemos (“We Can”) and the center-right Ciudadanos (Citizens), although it was former that really won the day.

 

In pre-election polls the Citizens party was projected to become the second largest party, but voters clearly decided that its free market economic strategies and backward positions on abortion and immigration made it look like PP-lite. Ciudadanos was supposed to win upwards of 25 percent. Instead it took less than 14 percent of the vote, although that translates into 40 seats.

 

For months the Spanish and European media have been filled with stories on Podemos’ falling support—one newspaper called it “No Podemos” (“No we can’t”)—and the New York Times essentially anointed Ciudadanos as the new up and comer. Voters had a different idea and gave the left party 20.6 percent of the vote and 69 seats in the parliament.

 

Spain’s political system is heavily weighted toward rural areas, where both the PP and the Socialists are strong. In Madrid, a candidate needs more than 128,000 votes to be elected. In a rural area that figure can be only a little over 38,000. The difference in votes between the Socialists and Podemos—both won more than five million—was only 341,000, but the Socialists have 90 seats and Podemos has 69.

 

Podemos came out of the 2011 plaza demonstrations by “Los Indignados” fighting against home foreclosures, social inequality, evictions, and massive cuts in support for education and health care. Its membership is mainly urban, although it has made gains in rural areas. Its grassroots organizing experience came in handy it when it needed to turn out votes.

 

Cuidadanos started as a regional party opposed to Catalan independence but, taking a page from Podemos’s book, went national last year.

 

Rajoy says he intends to form a government, but how that would work is not clear. Both Podemos and the Socialists—between them they control 159 seats—have made it clear they intend to fight any attempt by the PP to remain in power. Rajoy could try a coalition with the Citizens Party, but that would only amount to 163 seats, and one needs 176 seats to control the parliament. In any case, Citizens’ leader, Albert Rivera, says he won’t go into an alliance with Rajoy because of the PP’s history of corruption.

 

There are other members of the parliament representing the Basque regions and Catalonia, and Podemos emerged as the strongest party in both regions. However, it will not be easy for a Socialist Party/Podemos alliance to patch together a majority, and it will require navigating the tricky politics of Catalonia.

 

Catalonia, Spain’s richest province has 17 seats in the parliament, all of whom support either greater independence or outright secession. Catalonia became part of Spain after it was conquered by a joint French/Spanish army during the War of the Spanish Succession (1701-14). It has its own language and culture, which until recently was suppressed by Madrid. In September, 47.7 percent of Catalans voted for independence-leaning candidates, who now control the regional parliament.

 

The Socialists Party and Podemos are both opposed to Catalonian independence, although Podemos believes the issue should be up to the Catalans and supports a referendum on the issue. Ciudadanos is adamantly opposed to Catalan independence.

 

It might be possible to cobble together a government from the 159 seats that the Socialists and Podemos control with the 28 other seats representing Basques, Catalans, Canary Islanders, plus other leftish groups. While such a government looks fragile, it might be better than trying to forge a three-way alliance of Socialists, Podemos and Ciudadanos.

 

The latter party is opposed to government regulation, supports privatization of publically owned assets and, at its core, is socially conservative. The left, on the other hand, wants a strong role for government and is firmly opposed to privatization. And the election, says Socialist Party leader Pedro Sanchez, shows Spain wants “a move to the left.”

 

On January 13, King Felipe VI will most likely offer Rajoy the first shot at forming a government. If he does, it will be a short-lived minority one. Last month the right-wing Portuguese president appointed a minority rightist government, which only lasted a week. The Portuguese left is currently hammering together a three-way alliance that will run the country.

 

If Rajoy fails, and the Socialists can’t cobble something together, then there will have to be new elections. However, the left has the best chance of pulling a coalition together.

Whatever happens, the old two-party system is broken. Before this election, the two major parties controlled 75 percent to 85 percent of the votes. In this last election that fell to just over 50 percent. And that, as Podemos leader Pablo Iglesias says, means, “Spain is not going to be the same, and we are happy.”

 

The next hurtle is the EU. But while the Troika could beat up on Greece, Spain, with the fifth largest economy in the EU, is altogether another matter. The game is changing, and Spain is a new piece on the board, one that the Troika will not be able to bully quite as easily as Greece and Portugal.

 

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