Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Europe Page 6 of 16

What May’s Brexit Deal Tells Us About the EU and Britain’s Future

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On November 16, 2018

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So, May has a Brexit deal. It’s a terrible deal, which makes the UK subject to many EU laws, and which doesn’t allow Britain to withdraw from the deal if the EU doesn’t want it to.

This has caused ministerial resignations, and Corbyn has come out against it.

But the interesting part is what the EU and May have negotiated. This clause, for example:

Corbyn’s policies include straight up re-nationalization of the railways, regulation of housing prices, and the government outright building vast numbers of flats, among many other similar policies.

In other words, Corbyn’s policies interfere with liberal market rules. They are, actually, forbidden by the EU–but on occasion exceptions are made.

Of course, retaining privileged access to the EU market was going to require some rule taking, but May has chosen to take more rules that are “no socialism” and less rules that are “treat your people decently.”

What May has done is negotiate a deal which ties Corbyn’s hands: He can’t implement his policies if he becomes Prime Minister, and he can’t leave the deal. (Well, in theory, and perhaps in practice.)

Of course, Britain can still leave the deal: Parliament is supreme, and one parliament cannot tie the hands of another parliament. Nonetheless, leaving the deal would be damaging to Britain’s relationship with the EU, to put it mildly.

These sorts of efforts to tie future government’s hands so that are forced to preserve neoliberal policies are common. The now-dead Canadian Chinese trade deal had a clause which required a 20-year withdrawal notice, for example. The Canadian-EU free trade deal forbids the Canadian government from many of the same sorts of policies that May rejected as well.

This is the great problem with the neoliberal world order: It is set up to force countries into a specific sort of economy, and to punish them if they resist or refuse. That would be somewhat okay–but only somewhat–if neoliberal economics worked, but they don’t.

What neoliberal economics does, instead, is impoverish large minorities, even pluralities, in the countries which adopt its policies. Those pluralities then become demagogue bait. (Hello, Trump!)

Meanwhile Macron has proposed an EU military, and Germany’s Merkel has said she supports the idea.

EU elites are absolutely convinced their way is best, and that anyone who is against it is wrong. They are not primarily concerned with democracy (the EU is run primarily by un-elected bureaucrats), and do not consider democratic legitimacy as primary. If people vote for the “wrong” thing, EU elites feel they have the right to override that. They have overseen what amount to coups in both Greece and Italy in the past ten years.

The funny thing is that orthodox neoliberal economic theory admits there will be losers to neoliberal policies and states that they must be compensated. The problem is that this has never been done, and indeed, with accelerating austerity, they’ve done just the opposite: At the same time as a plurality is impoverished, the social supports have been kicked out from under them.

Macron has been particularly pointed in this, gutting labor rights in the name of “labor market flexibility.”

Neoliberalism, in other words, creates the conditions of its own failure. It is failing around the world: In the US, (Trump does not believe in the multilateral, neoliberal order), in Europe, and so on.

Even in countries that “support” the EU, there are substantial minorities, pushing into plurality status, which don’t support neoliberalism.

So Europe needs an army. Because Eurocrats know best, and since neoliberalism isn’t working for enough people that things like Brexit happen; that Italy is ignoring rules, that the East is boiling over with right-wing xenophobia, well, force is going to be needed. A European military, with French nukes, is the core of a great power military. And soon countries won’t be able to leave.

That, at any rate, is where things are headed. We’ll see if the EU cracks up first.

In the meantime, May’s Brexit deal really is worse than no deal, and in no way should be passed. In fact, if I’m Corbyn, and it’s been passed, if I became PM, I’d get rid of it. Because it either goes or he’ll have to substantially break all of his most important electoral promises.

The EU is loathsome. I won’t say it’s done no good, but it’s now doing more harm than good (indeed it has been for at least a decade). As with the US, because the EU is misusing its power, it needs to lose it. That process will be ugly, as a lot of those who are rising to challenge it are right-wing assholes (because the left has abandoned sovereignty).

You simply can’t fail pluralities of your population and stay stable without being a police state and holding yourself together with brutal force.

Those are the EU’s two most likely futures: brutal police state or crackup.

Pity, but that’s what EUcrats, with their insistence on neoliberal rules and hatred of democracy have made damn near inevitable.

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When Will the US Lose Control of the World Payments System?

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On August 31, 2018

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One of the greatest powers of the United States, one which was hardly used before Clinton, is the ability to freeze people out of the payments system. When Argentina had its previous debt crisis, it cut a deal with investors: They took a haircut, and the government agreed to pay them the haircut. Some investors refused.

Later, that deal was effectively destroyed, because Argentina lost in a US court. As a result, they could not pay the investors who had taken the haircut–a US judge was able to cut a sovereign state off from paying its debtors. Argentina could only have access if it paid both those who took the haircut and those who didn’t.

Over the last 20 years, in particular, the US has enforced financial sanctions against a bewildering number of people and states. Right now, it is disallowing Venezuela from buying many foreign goods. (When “socialism” doesn’t collapse fast enough, the US is always on hand to give it a shove.)

During the Iran sanctions period, before the Iran nuclear deal, the US and the EU cut Iran off from the payments system, virtually wholesale. SWIFT, the electronic payments system headquartered in Brussels refused to cooperate, saying that it should not be used as a tool of politics.

But the EU threatened the board and senior SWIFT executives with criminal charges, and SWIFT folded.

Lots of Iranians died and suffered under those sanctions, just like Iraqis did under the sanctions in the 90s.

When the Iran deal was cut, the sanctions were eased.

But Trump, when he tore up the Iran deal, re-imposed sanctions. The EU disagreed, but many EU companies are obeying the American order because America has said that it will sanction both companies and individuals who disobey.

And even if SWIFT doesn’t cooperate as a body, the problem is that most payments at some point touch American banks. The moment they do, America jurisdiction cuts in. (This is how FIFA got hit for corruption by US law enforcement. None of the bribes had anything to do with the US, but payments went thru US banks.)

So Europe is considering creating a payments system which does not ever touch US jurisdiction:

Germany’s foreign minister has called for the creation of a new payments system independent of the US as a means of rescuing the nuclear deal between Iran and the west that Donald Trump withdrew from in May…

…“For that reason it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent Swift system,” he wrote.

This adds Europe to a group which includes Russia and China, along with virtually every nation who has been subject to US sanctions.

The thing is that such sanctions used to be fairly rare. But Clinton weaponized them against Iraq and every President since them has used them as a bludgeon. They are a way, like drones to punish countries and individuals and to ignore sovereign rights.

The MMT types go on and on about being sovereign in one’s currency, but the fact is that you aren’t sovereign if another country can cut you out of the payments system. And right now the only countries in the world that are sovereign in that sense are America, the EU and China. And the EU and China are only somewhat sovereign.

These punishments are extra-territorial, they are an imposition of US law on non US countries and citizens. They are possible only because the US is the world hegemonic power, and sits at the center of the world payments system. Venezuela can sanction, but no one cares unless they have assets actually in Venezuela.

This power has been abused, repeatedly, to interfere in business that is none of America’s business. One can say that it might have been used acceptably when the entire UN security council agreed (I disagree), but when it doesn’t, the US has acted anyway.

And so, now, every great power in the world, with the possible exception of Japan, wants to take that power away from the US.

About time, but it will take time. It isn’t just about virtual links, it is about physical links: it must be done over continental cables and thru satellites which are not American. The way current software acts doesn’t take that in account, and physical infrastructure as well as software needs to be built.

But I hope that Europe is serious, because combined with China and Russia this is something which can be done, and done fairly fast (within a decade, I’d guess.) The only problem is that the EU, too, likes having this power. Are they really willing to give it up? Because the best way to do this would be to create a system which cannot be sanctioned without the agreement of all the powers who create: a system which cannot be sanctioned unilaterally. Everyone involved should have a veto.

Time will tell if Europe and, indeed, other nations, truly want a system that none of them can use to punish others.

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The Left-wing Case for Brexit

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On May 2, 2018

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Jacobin recently had an excellent article on left-wing Brexit, which I suggest you read. But this is the graf I want to focus on:

for a Corbyn-led Labour government, not being a member of the European Union “solves more problems than it creates,” as Weeks notes. He is referring to the fact that many aspects of Corbyn’s manifesto — such as the renationalization of mail, rail, and energy firms and developmental support to specific companies — or other policies that a future Labour government may decide to implement, such as the adoption of capital controls, would be hard to implement under EU law and would almost certainly be challenged by the European Commission and European Court of Justice. After all, the EU was created with the precise intention of permanently outlawing such “radical” policies.

That is why Corbyn must resist the pressure from all quarters — first and foremost within his own party — to back a “soft Brexit.”

This is the issue. As Jacobin’s European editor wrote:

I have pointed this out multiple times before. The European Union, in its current form (post-Maastricht) is neoliberal at its core. The Euro (which Britain at least did not adopt) was also intended to break local labor power and gut wages.

Watching the EU break Greece upon the wheel to bail out German bankers indirectly, so that they wouldn’t be seen to directly bail them out ought to have been the corpse on everyone’s doorstep that alerted people to the fact that the people running the EU, are, in certain ways, really, really bad people.

The main reason to fear Brexit isn’t “economic apocalypse,” it’s that the EU elites will do everything they can to make Britain pay to send a message.

In other words, mafia logic: “Once you’re part of the family, you don’t ever leave.”

I agree with Jacobin: Britain’s best hope of an economy which works for most Britons is Jeremy Corbyn becoming Prime Minister and instituting the policies he has said he would. Moreover, having this work is the best hope for the left in a world where all major multinational institutions and treaties are coercively neoliberal–intended to take economic decision-making out of the hands of voters and to enable free movement of capital above all other considerations.

None of this is to say that Brexit will be without some dangers and costs, but those dangers are mostly of the “save us from ourselves” variety: Tories and Blairite Labour MPs are even nastier than EU elites. And the loss of the ability to work freely on the continent, or for continentals to work freely in Britain is also a loss (though one that need not be inevitable).

But equally, the EU makes it impossible to pursue a lot of actual left-wing policies.

You can have the EU, or you can move to the left.

It’s that simple.

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France Ends Freedom

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On October 9, 2017

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The terrorists don’t hate us for our freedom, but if they did, well, they’d stop attacking France.

Fifty seven percent of the French approve, according to a poll.

It takes so very little to get people to give up their freedom. Find an enemy, have a few atrocities, and they’ll squeal for you to take it from them. Shades of Goerring’s comment on how easy it is to get citizens to line up behind wars.

“Why, of course, the people don’t want war. Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece. Naturally, the common people don’t want war; neither in Russia nor in England nor in America, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a Parliament or a Communist dictatorship…

Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.”

Such laws as France has passed, will be used against others. The anti-terrorism laws in the US have been used vigorously against environmental protestors, including entirely peaceful ones.

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Centuries ago Machiavelli observed that some peoples lacked sufficient virtue for freedom. They could only be ruled by despots. Increasingly, the West has shown that they have fallen into this class.

While the young are quite good on issues of economic fairness (out of self interest), they are not particularly good on most civil liberties, so we cannot be sure that the tide moving through the Anglo-West, towards more equal economic arrangements and less corporate control will necessarily push back on civil liberties abuses.

Humans didn’t evolve to live in large societies. We are terrible at it, and our decision-making heuristics are not capable of handling it. We cannot evaluate threats properly, our enlarged senses of identity (like nationalism and ethnic identification) are easily hijacked and usually we are unable to change our minds about anything important once we become an adult unless there is a catastrophe which personally devastates us, and when there is, we simply pick up (as Friedman noted) whatever ideas are around, rather than think critically.

And so, so much for Liberte.

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France’s Macron Wants a Technocratic Presidential State

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On July 6, 2017

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Rizal Park Tricolor

So, Macron has a huge majority, won on an historically low turnout. He has spent the summer fighting France’s Labor unions, his first priority being to overhaul France’s labor laws. For example, right now, workers can’t be made to answer emails outside of work hours. Macron will end that.

Of course, the changes are far more wide-ranging than that. The long argument has been that France’s economy isn’t all that it could be because it is not flexible: It’s hard to fire people, and you can’t make them do anything you want them to when you manage them. Arguably, you can make them do very little.

Macron, who ran the vastly unpopular economic policy of the last government (something people seem to have forgotten) is a dedicated technocrat.

In his recent speech, Macron said he wanted to shrink the legislature by one third, from over 900. And he thinks that the legislature should legislate less, and just judge what the executive does. This amounts, of course, to passing only bills suggested by him. Additionally, and of course, his party controls both houses of parliament right now, but this goes beyond normal French politics, where bills are not just suggested by the President and Prime Minister.

(The President appoints the Prime Minister, and the PM is then generally seen as following the President in most things.)

So this isn’t a small thing, it’s Macron saying he wants the power of a Westminister-style Prime Minister with a solid majority. Generally and theoretically, in this type of country, parliament can not simply do what the President orders. But in these days of tight party discipline, a PM with a majority is, in practice, close to being an elected dictator.

Such strong executives have their advantages, no doubt, but Macron does want a change that gives him more power, and he’s willing to go to a plebiscite to get it.

Then he will use it to remove French workers’ rights and reduce their wages and benefits. Because that is what he wants; it is the core neoliberal project, in which Macron is a true believer.

Macron is “young” but he’s not that young; he’s of the generation in which if you wanted to be taken seriously, and have any power, you had to sign on to neoliberal verities.

The French are going to get what they voted for, good and hard.

But little to none of what Macron does cannot be undone, and his making the executive more powerful may turn out to be a mistake in five or ten years, when someone like LaPen or Melenchon becomes president and wields those powers for which Macron fought.

Simply put, neoliberal policies never actually work. They can produce brief sugar highs of frothy economies, and France may get some of that, as money boils away from the middle and up to the top and housing bubbles and others stupidity are engaged. But this is late neoliberalism, the French middle class and poor are already suffering, and I don’t think enough bribes will be given to them to keep them onboard. They gave Macron a huge majority, yes, but on low turnout. This is neoliberalism’s last big chance in France.

When it fails, and it will, the French will turn either to the right or to the left. Within a decade, most likely.

And the boy prince, riding so high now, will be left spluttering like Tony Blair, wondering why all his wonderful plans didn’t work out, and assuming that those who reject his brilliance are buffoons.

So it shall be.

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You Can’t Stay in the EU or Single Market And Be For Labour’s Manifesto

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On June 21, 2017

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So, 30 Labour MPs have signed a letter calling for Corbyn to stay in the EU’s single market as a member.

This is not possible IF Labour’s manifesto is meant seriously. EU single market law is explicitly neoliberal, it does not allow for things that Labour wants to do, like nationization.

Access to the single market is one thing, being a member is another. Corbyn cannot do it and keep his promises, it is that simple.

The EU is a barrier against horrible things the Tories want to do, but it is a roadblock against basic social-democratic policies that Corbyn wants.

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The Real Threat To Europe Is Neither America Nor Russia

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On May 29, 2017

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So, much hysteria over Donald Trump’s disdain for NATO and his dislike of Germany.

Angela Merkel said that Germany no longer has a reliable US partner.

Oh dear. Oh dear.

Let us lay out the simple facts:

..the EU’s population is 508 million. When the UK leaves, it will be 447 million.

Russia’s population is 143 million.

Minus Britain, the EU has a GDP of 18.1 trillion (purchasing power parity), Russia has an economy of 3.5 trillion (ppp). Germany alone has a GDP (ppp) of four trillion.

So, if NATO dissolves, Europe should be perfectly capable of defending itself. It it cannot, it is because it refuses to actually allocate resources for defense against an opponent it outweighs.

Europe does not need NATO to defend itself from Russia.

Now, let us be even more brutally frank: Since WWII, Europe has been an American protectorate. It is that simple. Some commenters will probably disagree, but I’m not going to waste time proving the obvious. Indeed, “protectorate” is a kind way of putting it.

The truth is that the US withdrawing is no danger to Europe. Europe has all the resources it needs to defend itself and care for its own affairs: people, a large economy, and technology. What specific technologies it does not have, it is completely capable of developing or buying.

Furthermore, NATO expansion is one of the major causes for enmity between Europe and Russia; Russians note that NATO is far, far more powerful than they are, and they see its expansion (especially as George Bush Sr. promised NATO wouldn’t expand) as offensive. (I agree with them. You may be foolish, and disagree, but US foreign policy bobbleheads and “thinkers” have been quite clear about their intent.)

The real threat to Europe is not Russia, nor US disengagement, but, as it has been since German unification under Bismarck, Germany.

Germany is already integrating the units of smaller European countries into its own military.

Germany (and, yes, Germany WAS the prime mover) already destroyed an entire European country, Greece, to bail out its own bankers.

Germany’s industrial policy and clout has impoverished the European “South” through enforced austerity and the imposition of the Euro, which makes German exports cheaper than they should be and the exports of Southern European more expensive than they should be.

Germany essentially runs the EU’s monetary policy at this point, a policy which has been in the self-perceived interests of Germany, and only in any other country’s interest by coincidence. (Something the French should get around to noticing, and stop kneepadding for the next German annexation of France, even it is in name only.)

Germany is the actual threat to other European countries’ sovereignty. This might be acceptable if a German hegemony had a record of caring about what happens to non-German countries, but the record is clear and visible that it is not, and this is on the ground in Italy, Portugal, Spain, Greece and even France.

It is entirely true that the entire Eurocrat class is implicated, and that every European country has collaborators, including France (Macron is merely the latest to take the throne, and there is no question of his complicity, as he ran Hollande’s austerity program).

Nonetheless, and weirdly, the policies they promote are the ones that rebound to the benefit of Germany, and it is Germany who is widely understood, as in the case of Greece, to have the deciding vote.

Europeans should decide if a further federalized European Union, run by the Germans, for the Germans, is what they want, because that is what is on offer.

Trump should be a sideshow issue for Europeans. He is not a significant danger to them, except in the sense that he may be unleashing the Germans even further.

As is often the case, the politicians Europeans should be most scared of are their own: the collaborators who run their governments, and the German politicans who are sure that what is best for other Europeans countries is, coincidentally, identical with what they are sure is best for Germany.

(And anyone who thinks that Merkel is not essentially malign simply has not paid attention. If an evil person opposes a more evil person they do not become “good.” This is not to deny, that like many evil people, she has not done some good things.)

Look to your own house for the person who will beat, abuse, and likely kill you. This is true at every level.

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Macron vs. Le Pen in France

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On April 23, 2017

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This is the final showdown. A reminder, Macron ran Hollande’s economic policy, and wants to do even more “liberalizing” of the French economy. A.K.A., more gutting of worker’s rights, wages, and so on.

The polls show Macron winning, but given the reliability of polls lately, who knows?

What I do know is this: Macron will swiftly be as popular as Hollande (meaning, in the doghouse), and the next election, if LePen doesn’t win this one, will be LePen’s to lose (and if she loses, it will be to someone like Melanchon—a left wing populist).

Britain needs LaPen to win. LePen is willing to take the pain to Frexit. She won’t be slowed down by the EU’s promises of pain–instead, she’ll pile it on.

This is what 37 years of international neoliberalism has brought, and bought, us.

(Oh, and Corbyn is Britain’s only chance to do Brexit in a way that isn’t an enema with a sledgehammer, but it looks like that’s what Brits want.)

Should be interesting, anyway.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

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