Category: Europe Page 15 of 17

The Decline of Europe

On April 2, 2014

While the US is the hegemonic state, and the sicknesses of the world largely emanate from it, Europe is falling apart as well, it is simply doing so more slowly–unless you are Greece, Portugal or Spain.

Europe has unquestionably swung right, and England in particular was entirely complicit in the great financial collapse. Neither were Germany, or France or pretty much everyone else not involved.

Germany’s behaviour since the financial collapse has been disgusting and cruel.

Nonetheless, the northern Europeans, overall, have done a better job than the US. They have made mistakes, one of which was playing along with Bush–there was an opportunity around 04 to put the boots to America, as Europe, to break America’s hegemonic power. Europe was too scared to take the chance, and as a result America has rebounded and Europe has grown weaker–in large part because they also have refused to discipline their bankers, and because they have decided to cannibalize the weak sisters.

Everyone in the developed world, with the small and essentially irrelevant exception of Iceland, and perhaps the Scandinavians except Sweden, is going in the wrong direction. Apparent exceptions, like Germany, are only apparent. Germany’s exports are reliant on the Euro being lower than it otherwise would be because of weak sister nations in the Euro. Germany is cannibalizing the South of Europe to stay prosperous, but it’s not a sustainable situation.

The Scandinavians, overall, are handling things best, with the Swedes the worst of the bunch. They have privatized a great deal, they have not been able to handle immigration well, and have developed an underclass.

England is completely dependent on the financial industry for its survival, having, under Thatcherism and the Labor governments which continued Thatcherism, completely destroyed its industrial base. Ireland is a basket case, whose politicians repeatedly betrayed its citizens in the aftermath of the financial collapse in order to bail out banks at maximum cost to their own population.

France has been complicit in Germany’s crimes and seems not to understand that they can’t have their socialist policies in a Europe where everyone doesn’t break the rich. The Greeks are victims, but they rolled over: they had a chance to vote for Syriza, but believed the Troika’s lies that if they just played along it wouldn’t be so bad. They failed to understand that to Germans and French, they aren’t actually Europeans and need not be treated as such.

Italy suffered a coup when Mario Monti was put in power without an election and imposed austerity. To be sure, his predecessor was a scumbag, but he was, y’know, elected.

Spain, again, made the mistake of bailing out banks.

You never borrow money from the Troika to bail out your bankers. All it does is add more unpayable debt and thus increase the depth of austerity.

Europe is on a downward trend. They started from a better place than the US (universal healthcare, decent welfare systems), but that does not alter the trajectory. Their fall is an odd mixture of an insistence on keeping the EU together, while refusing to actually make the EU a proper federal state and take care of everyone in it. As it stands, the EU does not make sense: most countries, including Greece, Italy, Spain and Portugal, but not limited to them, would be better off leaving it. Or, frankly, the rest of the EU should kick Germany out, and erect tariffs against their goods.

England should be kicked out as well, for serial bad behaviour.

It is impossible, right now, to regulate the world economy in any way beneficial to ordinary citizens of the majority of states. The doctrine of free trade, which is really about free financial flows and deregulation of labor, has made actual economic policy almost impossible unless a country finds a way to opt out of the neoliberal consensus (aka. China), or use its structure to their (temporary) advantage (aka. Germany.)

Everyone is going to have to learn that impoverishing other nations is not a sustainable path to wealth. We are destroying countries at a ferocious rate: Afghanistan, Pakistan, Iraq, Egypt, Libya, Syria, Greece, Portugal, the Ukraine; with many others tottering and in clear decline (Spain and Italy, for example).

Europe is not immune to these trends; nor immune to the policies which cause them. In fact Europe has become a major force for idiot austerity and for destroying nations, as the core states sacrifice the South in hopes that the Gods of austerity will spare them.

They won’t.

Greek election consequences and the shape of the developed world’s future

By Ian Welsh

On June 17, 2012

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will be more years of austerity, people winding up on the street, suicides and outright starvation. In this fertile ground, the neo-nazi right will rise. The left will most likely not compete, because they will refuse to create an enforcer class to protect their own people. The police in Greece voted about 50% for the Golden Dawn, they will not protect the left, either, but will enable the rise of the Golden Dawn.

Under these circumstances a coup of some variety, whether military or otherwise (remember, Hitler never won a majority) is very likely to occur. By blocking the rise of the left so that Greece can be looted, the oligarchs have created their own doom.

In general terms, we are in a pre-revolutionary period. The supreme court coup in Egypt, the outright refusal to obey even the letter of the law let alone the spirit in the case of Wikileaks and Assange, the reign of Obama, are teaching an entire generation that you cannot fix the system from within, through the mechanisms of the old system or through even semi-peaceful protest. The Pacific free trade deal will enshrine even more draconian IP laws and will extend NAFTA style takings regulations which give multinational companies sovereignty over governments.

This will not stand. There will be global war, and there will be global revolution. We are on track for it. The question is when and how. I would guess in less than 20 years the world will fully convulse. Many of the current generation of oligarchs will be dead by then and will win the death bet, but their heirs will reap the whirlwind. As for the population, I expect a billion deaths or so over the next 25 years from famine, disease, war and environmental issues.

Both populations and the oligarchs have refused, over and over again, to do what is necessary to peacefully restructure the world economy, but instead have opted to kick the can down the road. Each kicking of the can has led to more corrupt and sclerotic economics and politics.

In the period between now and the revolution, some nations will take control of their own destinies. Offered a choice between austerity in the international system and nationalism, they will choose nationalism. It will not be as comfortable as being a member of the old international order from before the financial collapse, but that is not being offered. A few nations will be able to work wedges to stay in the system and not suffer too much (Germany, France). But most developed world nations will continue to suffer real declines in their standard of living, driven by inequality and the resource trap which we refuse to restructure out of. The electrical economy wants to happen, but it will not happen on a wide scale until after war and revolution. Such is the choice both our elites and the regular population continue to make.

The left will have its chance in Europe

By Ian Welsh

On May 7, 2012

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So, in France Hollande has won, and in Greece, left wing parties have more of the vote than the center or the right (we’ll see if they can form a government, however.) They will now have their chance. If they fail, however, the right will sweep back in, and it will be the harder right, the neo-nazi, fascist right. If the left, or what passes for the left cannot do the job and turn things around, the right will offer its “solution”.

The elites, if they make it impossible for the left to do their work (or if the left just fails, quite possible), will, in many cases, be signing their own death warrant. If the neo-nazis in Greece or France take charge, be sure that they will liquidate much of the old order, the old elites. Since those elites are, in fact, corrupt and treasonous (selling out the interests of their own countries), they will be able to do so to cheers and by simply enforcing the law.

The right’s solution won’t work, of course, but it can be made to look like it works for a few years at least. And that it won’t work, won’t mean anything to dead oligarchs.

The elites aren’t going to keep getting financial oligarchy, where they force the government to borrow money from them, pay it back with interest and sell off the crown jewels at fire-sale prices. That game is NOT going to continue for much longer, in the grand scheme of things (at least not in Europe, the US is a different matter).

If they want to save their own necks, and yes, it will come to that, they’d best cut a deal now. The longer they wait, the worse the deal is going to get for them.

Of course, some part of the elites will make a deal, and will survive. But some won’t.

As for the left, remember that the rich are, as a class, your enemies. Treat them as such, or they will make sure you fail.

Next Steps for Greeks after the Austerity Bill (AKA: Hope for Greece, at last)

By Ian Welsh

On February 12, 2012

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Ok, another austerity package just passed. That’s the bad news, but amidst the bad news there is some good news. More than 40 MPs were expelled from the PASOK and ND parties, two from LAOS—those MPs need to form a new, explicitly anti-austerity, pro-default government. Odds are good they will win the next election, and can form the new government.

No deals made by a sovereign are unrevocable. Whatever this government is doing, has done and will do, can be undone by a new government.

Oh, and Greek rioters – if you’re going to riot and burn, burn down the houses of the MPs and bankers, the banks and their offices (I see some of the right places did get firebombed.)

Greece can be fixed, if the Greeks are willing to do what it takes, both in terms of electing a new government and that government doing the right things. Those things will be unorthodox and painful, but no more painful than austerity, and unlike austerity, they will lead to a better economy, and based on experience elsewhere, probably within two or three years of doing the right thing, with some relief being felt within 6 months.

Perhaps the Only Thing Cameron Will Ever Do That I Agree With

By Ian Welsh

On December 10, 2011

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was to tell Merkel to take a long leap of a short pier, and refusing to sign on board for European control of member state’s fiscal policies. Such control in the current context (forced austerity) is a recipe for outright, extended depression. Cameron may be throwing Britain into depression all on his own, but not signing away control to Germany (and be clear, in this context, European means German) was the right thing to do, even if he did it for what appear to be all the wrong reasons.

As a friend of mine quipped, who thinks Europe should have a common currency. “By common currency, however, I don’t mean everyone using the EuroMark.”

The insistence on policies which everyone knows, and which even straightforward macro-economics shows clearly, will throw Europe into a semi-permanent depression is rather remarkable.

Oh well.

The blindingly obvious about the proposed fiscal union in Europe

By Ian Welsh

On December 4, 2011

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What it means is German control over other countries budgets. What that means is semi-permanent austerity. What that means is semi-permanent depression.

I somehow doubt that this will be accomplished, if it is accomplished, through referenda. I doubt any major party will stand against it. So, to add to the blindingly obvious, it is blindingly obviously undemocratic.

It is true that the Euro requires fiscal union. It always did, shared currencies don’t work without union. However, if fiscal union is to occur, then it should occur with each member state’s population voting for it, especially as this fiscal union’s purpose is to impose corporate friendly austerity measure’s on the populations of countries that would almost certainly vote against them.

I will note that this is not going to redound to Germany’s favor in the not-very long run. Permanent European depression is not to Germany’s advantage. Who, exactly, they think is going to buy their high-end goods is beyond me. They shouldn’t expect India and China to play along, those countries are creating their own auto industries and do not intend to be dumping grounds for Western goods.

Franklin Delano Roosevelt’s words are applicable:

The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism — ownership of government by an individual, by a group, or by any other controlling private power.

The states in Europe are controlled by private interests. We have seen this, clearly, in Greece and Italy in the past weeks. If this fiscal union passes, the Rubicon will have been crossed for all states remaining in the Euro. Ironically, Europeans will have given up real democracy in exchange for depression. Lose/lose.

For them.

What’s happening in Europe is what matters: rules of the financial rich

By Ian Welsh

On November 18, 2011

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The oligarchs have taken down two governments in the past two weeks – Italy and Greece. The idea that the Mario Monti, the new PM of Italy, is something wonderful, is deranged. Note that once again, neither an election nor a referendum was allowed.

If you want to save the Euro and some form of European prosperity, there is only one solution, the European Central Bank (ECB) must do what it keeps insisting it won’t do, it must buy Eurobonds from members. And it must buy them at fixed prices. Italian, Greek, French, German bonds will be issued at X price, and if insufficient investors want to buy at that price, tough, the ECB will buy. If this causes inflation, great, Europe needs inflation right now.

Even France and to a lesser extent, Germany, are coming under attack. However France is under significant attack, and Merkel and the ECB seem unwilling to really do anything about it. France has the option to go off the Euro in a way that most other countries don’t. The issue with going off the Euro is simple: oil prices. You now have to buy oil with your lousy currency, which is even more worthless than the Euro. But if you happen to control countries that have oil, like France does (for example, France is mostly in control of Libya right now, not the US), then hey, sign some long term contracts and voila. It is not written in stone that prices must be set on open bid markets.

Which leads us to the sudden surge in the price of oil to $107 a barrel. On the face of it, this is crazy. Yes, the US has had a bit of a recovery, but Europe is going hard core austerity. But this is the game the hot money is playing: they move out of bonds and into oil, out of oil and into bonds. $107/barrel oil means the US recovery (such as it is, which isn’t much) isn’t going to last much longer.

Being rich is about being liquid when everyone else isn’t, so you can buy up assets on the cheap. When the rich are properly under control (ie. when you keep them poor and terrified of government and the people, as they should be) they can’t create such buying opportunities, they have to wait for them, and the government makes it so that the rich can’t take too much advantage of them, because taking advantage of them means taking advantage of other people when they’re most vulnerable.

Right now the rich can and are crashing asset prices by forcing countries into austerity through attacks on their currencies and control of their elites. They then buy up assets for fire-sale prices. (The history of fire-sale is worth commenting on. Crassus, the Roman Senator of the first triumvirate, had a fire fighting team. When a fire broke out they’d go to the fire, fight off the other fire teams, then Crassus would buy the burning buildings from their owners, negotiating as they burned. If they refused to sell, well, they lost everything.)

These attacks on currencies are deranged. The countries are not in that much difficulty, certainly the idea that France is in enough difficulty to be under attack is crazy. These attacks are about power: the global rich were bailed out after the crash, now they are using their hot money in attack after attack, demanding austerity, which will cause semi-permanent depression in those countries which accept it. That allows them to buy up what they want, keeps their labor costs down, and lets them divert what money they spend on investment which creates actual real economic growth into developing countries which are cheaper for them.

But watching European leaders respond has also made clear that they are either compromised, ideologically neo-liberals or completely ineffective. Watching the ECB insist that it won’t just buy bonds has been particularly amusing, because if the ECB won’t defend even France, the Euro is in great danger of not existing in a few years, and if the Euro doesn’t exist, neither does the ECB, which means all those central bankers will be out of jobs. They won’t even act to save their own jobs.

All of this is crazy. The financial elites are on a plundering spree, gleefully using their power to force entire nations into poverty, blackmailing governments into huge payouts. Pay extra on bonds, or pay extra on oil, or hey, why not both!

The political elites are clearly either bought or completely ineffective at resisting. If the ECB won’t buy bonds, then countries just need to leave the Euro so they can print money. Yes, that might cause inflation and various other problems, but that is better than semi-permanent depression through austerity.

Now, what can the people do when the elites won’t allow direct referendums, and when there are elections you can only vote for parties which are all in favor of austerity?

Make them fear you. Start as follows, which is what was done in Argentina: find their cars, those nice expensive cars, and trash them. Every time you see someone in a suit coming from the airport, surround the car and slash the tires.

And if you’re going to riot, don’t do it in your own neighbourhoods. Go to the parliament buildings, the bank HEADQUARTERS or to the neighbourhoods in which the rich live, and riot there.

If you insist on some form of pure nonviolence (which the European left and right don’t) then you must chain and twist tie yourselves around important areas. Go to the headquarters and shut them down by tying yourself up to all the entrances. Twist ties aren’t just the cop’s friends, they are yours. Love them and learn how to use them.

The elites will only respond when they feel your pain. And they will only feel it if you make them feel it.

Unbelievable disrespect to a black man in Britain

By Ian Welsh

On August 15, 2011

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Watch. Seriously, watch it.

It’s hard to know what to say, because what I’m thinking is unprintable. Yeah, what a surprise that the riots occurred. What a surprise. And cracking down will make it worse, not better. This isn’t even close to over, and it will never be over while men or women like that interviewer are in any position of influence or power. (h/t Feminist Philosophers.)

Update: a friend points out the social reasons behind the insistence that any explanation is an excuse and that anyone who “excuses” the rioters must be immediately asked if they condone the riots as if explaining is the same thing as condoning.

The insistence on not allowing an explanation reminds me of Obama refusing to “play the blame game” with reference to the Bush administration and the shutting down of discourse around the 9/11 attacks. Any attempt to actually understand why something happened threaten the official narrative, and might cast blame blame on those in power. That can’t be allowed, so no explanation is allowed, only condemnation. (Ian note: Remember all the nonsense about how the 9/11 hijackers were cowards? They were many bad things, they weren’t cowards.)