Showing posts with label Eurozone. Show all posts
Showing posts with label Eurozone. Show all posts

Friday, 5 February 2016

Cameron's EU draft deal makes a two speed Europe a fact and gives the European Union a chance to move forward

For progressives, the bright side of Cameron's renegotiation for two speeds of membership is that it keeps Britain at the heart of the EU, where they can continue to campaign for better, more democratic, system.
David Cameron has got, in draft form, his deal on Europe (Sparrow & Smith, 2016). The deal came with an unequivocal statement that the Prime Minister would, if Britain where not part of the EU, join if these were the terms. The Cameron deal, negotiated and Donald Tusk, President of the European Council (chair of the council of EU member states) came to a short list of agreements.

Member states to have the right to use an 'emergency brake' on providing social security to migrants when movement was above ordinary levels, that those outside bodies like the Eurozone should not be expected to fund them, a commitment from the EU to better regulations and more efficient administration, and for national parliaments that make up 55% of seats on the European Council to represent a veto on European legislation (Sparrow, 2016). What these concessions most clearly establish is a two speed Europe (Verhofstadt, 2016).

Romano Prodi, former Italian Prime Minister and former President of the European Commission (Europe's executive branch), had previously foreseen this outcome (CNN, 2004). An attempt had been made to bring together the various European treaties to create a clear Constitution for Europe, only for it to be rejected at referendums in both France and the Netherlands (BBC, 2005; The Guardian; 2005).

Prodi accepted that, with the failure to establish a constitution for Europe, to make progress the European Union must now move at two speeds (EurActiv, 2007) - so that those who do not want to move forward could have their choice respected, without it overriding the choice of others to move ever closer. Without some formal resolution on that direction, however, Europe has seemingly spent the last decade stalled.

Guy Verhofstadt, leader of the liberals in Europe, praised the chance the renegotiations offered for clarity (Verhofstadt, 2015). Verhofstadt stressed that their was common ground in Europe for clearing up the messy boundaries and agreements, so that all countries could align themselves with a sure understanding of where they were headed.

Making the European Union a two speed institution essentially realigns Europe into two groups: some countries pursuing ever closer union, while others stay at arms length. The first group will accept the Eurozone, Schengen, joint border agencies, and the pursuit of better political and economic governance. Those at the edge will continue to have a seat at the table and important relationships and votes on governance, but there will be opt-outs rather than a veto.

For those in the UK who favour European Union membership, this seems to be the best deal on the table for now. What it certainly does offer is a chance to remain close. As Romano Prodi put it (EurActiv, 2007), "a two-speed Europe does not mean that countries that are in the second group cannot move to the first".

To the UK's progressives, this means the chance to renew efforts for a more social Europe (Shaheen, 2015), for the positive impacts that the EU can have in the fight for a greener world (Vidal, 2016), and to engage with continental campaigns for better democracy, like that being launched in Berlin next week on 9th February by Yanis Varoufakis to improve democracy in Europe (Varoufakis, 2016).

Sunday, 12 July 2015

The fiscal politics of Osborne and Merkel are a retreat to the Nineteenth Century - fortunately we find Oscar Wilde there reminding us why we need to resist

In The Soul of Man, Oscar Wilde warns against impertinent attempts to tyrannise over the lives of those to whom support is extended. Photograph: Oscar Wilde via photopin (license) (cropped)
When looking at the harsh terms laid before Greece, as the conditions for the aid it needs (Traynor et al, 2015), it's hard not to draw comparisons with five years of budgets authored by George Osborne and welfare policy managed by Iain Duncan Smith.

The Osborne-Duncan Smith approach has been to make harsh cutbacks in funding for welfare and offer harsh terms of compliance for receipt of what little is available  (Stewart & Wintour, 2015; Malik, 2013). Greece has been offered much the same austerian deal by European leaders, headed by Germany's Chancellor Angela Merkel.

After all of the poverty and destitution, with support shrinking under the weight of austerity cuts, there came one more indignity: conservative European leaders demanding that Greece effectively surrender its fiscal sovereignty. The proposal seems almost like something out of Victorian England, where the charitable would offer, as Oscar Wilde describes:
"a sentimental dole, usually accompanied by some impertinent attempt on the part of the sentimentalist to tyrannise over their private lives."
France's Socialist President Hollande apparently spent considerable effort trying to wrangle a deal out of Chancellor Merkel, only for the deal that emerged to be something unlikely to achieve much more than incite further resistance - as seen by #ThisIsACoup trending on twitter. Italian Premier Matteo Renzi, of the Centre-Left Partito Democratico, has also been open in his opposition to austerian attempts to further humble or humiliate Greece (Ekathimerini, 2015).

However, there were others who did not want to extend any assistance at all and appeared more favourable to Greece being shown the Eurozone door (Traynor & Rankin, 2015).

Between the UK Conservative Party, and its trimming away of social security, and the conservative leaders of the Eurozone, there seems to be more concern for a kind of narrow and ideological fiscal rectitude than for the alleviation of suffering, for either individuals or communities. A society where freedoms reduced to a framework within which we must compete for dignity. It's like the nineteenth century conservative-liberal French Premier Francois Guizot has returned.

When challenged by radicals over suffrage being restricted to a propertied elite, he responded with the words "enrichissez-vous". That is, "enrich yourselves". (Rapport, 2008). That social attitude seems to have returned, throughout Europe. It says: there is the ladder - your rights, liberties and hopes are at the top, as privileges to be attained - if you want what is enjoyed by the elites, climb and put yourself on their level.

That ideological composition can only function on an assumption that humans are equals, with failure as the exposure of a weakness of 'moral character' - all of which, of course, precludes incapacity or plain disagreement. The historical interest that the democratic Left has taken in equality of outcomes, and the liberal Left has taken in equality of opportunity, is not the result of people being equal. It is because they are not - and nor is the world in which they live.

As such, the Left has tried to resist these conservative narratives, where money comes first and limited support is only offered with conditions (Williams, 2015) - though often not resisted enough (Wintour, 2015), at least by the standards of Oscar Wilde:
"We are often told that the poor are grateful for charity. Some of them are, no doubt, but the best amongst the poor are never grateful. They are ungrateful, discontented, disobedient, and rebellious. They are quite right to be so. Charity they feel to be a ridiculously inadequate mode of partial restitution, or a sentimental dole, usually accompanied by some impertinent attempt on the part of the sentimentalist to tyrannise over their private lives. Why should they be grateful for the crumbs that fall from the rich man's table? They should be seated at the board, and are beginning to know it. As for being discontented, a man who would not be discontented with such surroundings and such a low mode of life would be a perfect brute. Disobedience, in the eyes of any one who has read history, is man's original virtue."
Europe and its spirit of internationalism and co-operation has been taken hostage. Austerian national conservatives have subsumed its values beneath fiscal conservatism and the 'national interest' (The Guardian, 2015).

Not only in Greece, but in the UK and the rest of Europe, the Left need to find an answer to the power of the politics of austerity. Part of that will be reclaiming Europe as a coordinator of positive, co-operative and democratic movements. The rest will be rising above rivalries to co-operate in pursuit of an alternative, one that puts the common good at the very heart of any fiscal plan - instead of leaving it on the periphery to be handled and fed by the invisible hand of the market.

Monday, 15 June 2015

Greece's creditors are playing with fire - Grexit would be bad for Greece, but could ultimately be worse for the Eurozone

With their creditors circling and the IMF in particular apparently tired of negotiating (Inman et al, 2015), it does appear as if Greece is being bullied towards a Eurozone exit due to its unwillingness to sacrifice the country's dignity by slashing pensions (BBC, 2015).

Yet as bad as fears are that a 'Grexit' would be bad for Greece, and so might act as an incentive for it to agree to the terms of conservative austerity laid out by its creditors, their exit could be a lot worse for the Eurozone and those with a vested interest in its success (Garton Ash, 2015).

With debts due, and passed due, Greece has been scrambling to scrape together the funds needed to make repayments (Kirby, 2015). Without the repayments, Greece will not qualify for the bailout funds it needs to afford continued debt payments and to run the country.

Alexis Tsipras, the Prime Minister of Greece from the Radical Left Syriza party, has remained determined to resist the pressure from creditors for conservative economic reforms in exchange for the bailout (BBC, 2015). Tsipras has been attempting to negotiate the terms of the bailouts and the repayments, in opposition to the deep public sector cuts expected by creditors. Europe's rivals are already circling. China has a major interest in Greece, via its stake in the port at Piraeus (Smith, 2015), and, in what has been seen as a negotiation tactic, Greece has even held talks with the Russian government (Christides, 2015).

But on top of the demands of creditors, there have been warnings to Greece of the dangers and consequences of defaulting on its debt and leaving the Eurozone (Khan 2015). There are fears that a newly introduced currency would plummet in value quickly against the value of the Euro, and that this could result an effective pay cut for ordinary citizens of as much as 50% (The Hamilton Spectator, 2012).

Between being bludgeoned with creditor demands and being warned of the danger of default and withdrawal from the Eurozone, the present situation has the feeling of a deliberate strategy designed to diminish the negotiating power of Greece, and back the country into a corner. By bullying Greece into a corner, it would certainly be a lot easier to force the country to reform in a particular way - notably conservative and austerian (Jones, 2015).

That situation is being compounded by the pressure that Alexis Tsipras faces from his own supporters at home over electoral promises to reinstate the public sector's role and to protect pensions (Morris, 2015).

However, the determination to force Greece into playing by the conservative rules or face a damaging exit looks like a dangerous game for those with an interest in the Eurozone to be playing. It has been noted that, rather than talk of solidarity with the Greek people in their time of need, the attitude of negotiators has been of cold "matter-of-fact talks that take place when a big indebted business gets into trouble" (Peston, 2015).

If that attitude were allowed to force Greece out, then something very stark will have been stated about the Eurozone: that it is only for the 'economic convenience' of certain members, and that it is not necessarily for everyone - something that would surely undermine the future of the Euro.

With the Euro's future undermined, the Eurozone project itself could be undermined (Garton Ash, 2015). If one debt ridden nation might default and withdraw to pay off its debts with a new devalued currency, are creditors to other economically weak European countries with substantial debts going to refrain from increasing their demands - thus increasing pressures across Europe.

For what its worth, the attitude of Yanis Varoufakis, the finance minister of Greece, has been that Greece should not leave, instead seeking to reform the old system (J. Luis Martin, 2015). Varoufakis has talked at length about the need to work within the old system to arrest the dangerous social impact of the conservative austerity agenda and the crises that result, from which progressives do not benefit (Varoufakis, 2015). That means supporting a 'modest agenda for stabilising a system that I criticise', in order to 'minimise the unnecessary human toll from this crisis'.

Though Tsipras and Varoufakis have been unwilling to give ground on issues like pensions, tied to the welfare of a currently struggling people and key party election promises, they have shown a willingness to negotiate. Considering that while leaving the Eurozone is clearly not ideal for Greece, and reforms to the system would be preferable, an exit would at least mean more freedom over its own economic affairs - though it would purchase that freedom at a very high cost for to its citizens - their unwillingness to leave, has at least been a show of a constructive attitude.

For the Eurozone, however, there would be less of a sunny side. A Greek exit would undermine the Eurozone itself, severely weakening what has become one of the most recognisable cornerstones of European project by cast doubts upon other debt-beleaguered Eurozone nations. For now, the conservative austerians remain in charge and it is they who will continue to dictate the narrative of negotiations in Greece according to their own ideological terms.

Yet saving the Eurozone will need Greece's creditors to show some reciprocal goodwill. Through cooperation and reciprocity, there remains an alternative and progressive way out of the present crisis, where the common good can be placed at the heart of economic action.