Europe’s Nanny Angela Merkel Feels Isolation: The Tide Is Turning

CounterPunchMay 21, 2012; The News, Pakistan, May 23, 2012; Iran Daily, May 23, 2012;  Le Grand Soir, mai 2012 

Recent elections in France and Greece have generated a good deal of comment, suggesting that the years of center-right governance in Europe may be coming to an end. The defeat of President Nicolas Sarkozy of France by the Socialist candidate Francois Hollande, and the collapse in Greece of political parties that allowed unrestrained capitalism and chaos to take hold, are major developments. But whether they represent a turning-point likely to return Western Europe to social democracy cannot be taken for granted yet.

Certainly, the public opinion has become radicalized to an alarming degree. European societies are undergoing a process of atomization as confidence in mainstream political parties and their leaders collapses. In the midst of a severe continental crisis, millions upon millions of people feel that their leaders are both unwilling and unable to look for solutions to help the most vulnerable.

The masses have become disgusted with professional politicians after giving them many opportunities. Recent national and regional elections in Greece, France and Germany are proof of voters walking away from mainstream parties whose political labels and programs are deceptive. The same trend has been repeated in the recent local elections in Britain. Unfortunately, when a government loses, the victor picks up where the defeated left. Callous disregard of the masses, and obsession with the accountants’ jargon of “balancing the books,” are behind the austerity imposed on ordinary citizens throughout the European continent. The result is the collapse of traditional politics and the rise of groups on the extremes.

This phenomenon across Europe mirrors what has long been happening in the United States. The difference is that in Europe the coercive power of supranational financial institutions, supported by the United States, is being applied with extraordinary ferocity and haste. It goes against the post-war liberal consensus, developed following the devastation of the two world wars in the last century.

The most traumatic events are taking place in Greece. The fall of the Panhellenic Socialist Movement (PASOK) from governance to near insignificance, and the collapse of the New Democracy Party vote by a third, in the recent general election are dramatic. The consequence is the rise of new political groups, most notably Syriza, vehemently opposed to the austerity package which, Germany, the wealthiest European country, insists upon.

The German chancellor, Angela Merkel, has her own domestic compulsions. Germany’s public opinion is strongly against bailing other countries out of the crisis. But in refusing to yield on harsh cuts and work for economic growth instead, the German chancellor has created a distinct impression that she does not recognize the Greek people’s democratic choice. The appearance of diktats from Bonn is a highly sensitive issue, for memories of Nazi occupation of Greece during the Second World War are still alive among many Greeks. They may be one of the poorest member-states in the European Union, but are proud of their history and civilization.

The Greek electorate’s refusal to accept harsh cuts any more, reflected in the country’s extraordinarily polarization, made the formation of a coalition government impossible. Reports of the German chancellor telling Greece to hold a referendum on whether Athens wanted to retain the euro currency added fuel to the fire and those reports had to be denied. Nevertheless, the coming election in June will in effect be a referendum on Greece’s continuing presence in the euro area. Otherwise, the country walks away from the straightjacket which eurozone has become, prompting a default on its debt payments and causing a financial “calamity,” as many free marketeers have been predicting with passion.

The past decade has been one of retreat for social democratic politics in Europe. From Scandinavian countries in the north to Italy and Greece in the south, the political right has been dominant across the continent. However, just when old social democrats looked utterly defeated, new forces of the left are beginning to come forward. They have begun to fight back and the tide has started to turn.

In recent months, Chancellor Merkel of Germany has looked like a heartless nanny who has mishandled the Greek crisis. As long as she had an ally in Nicolas Sarkozy as the president of France, the duo dominated. Now, however, Greece is not the only European Union member in crisis and Merkel stands severely weakened by at least two factors. One is the defiance of the Greek people. The other, even more decisive, is the defeat of Sarkozy by his Socialist rival Francois Hollande in the French presidential election. Along with Greece, France too goes to the polls for the National Assembly in June, when the domination of the French right is almost certain to end. At home, the defeat of Merkel’s party in Germany’s most populous region, North Rhine Westphalia, by the Social Democrats is a major jolt against her center-right coalition.

So the tide is turning in Europe and the left is emerging from the wilderness years. But it is not certain how bold the new left, splintered and still facing a strong challenge from the entrenched right, is going to be. It is to be seen whether the left is able to assert itself in the ideological battle with the right.

[END]

What’s Left?

International Policy Digest

The public suicide of 77-year-old pharmacist Demitris Christoulas a short distance from the parliament building in Athens and the outpouring of grief and anger reveal the trauma and desperation in Greek society in the midst of an economic crisis. In a handwritten note before he shot himself in the head, Christoulas complained that the government had made it impossible for him to survive on the pension he had paid into for 35 years. The note on his body said, “I find no other solution than a dignified end before I start searching through the trash for food.”

To get a rescue package for its economy and to keep its place in the euro zone, the Greek government has slashed wages and retirement pensions by as much as 25 percent. With the unemployment rate exceeding 20 percent, Greece faces a national ordeal. Last year, the government admitted that suicides had risen by 40 percent over the previous two years.

A day before Christoulas ended his life, an Italian woman of 78 in Sicily had jumped from the balcony of her third-floor apartment. Her monthly pension had been cut from 800 to 600 euros and she could take no more. Her son said, “The government is making us all poor, apart from the wealthy, who they don’t touch, in contrast with us workers and small businessmen who are struggling with heavy debts.”

A week before, a businessman tried to commit suicide by setting himself alight outside a tax office. He had lost his appeal against a claim of unpaid tax. And a 27-year-old construction worker of Moroccan descent set himself on fire because he had not been paid wages for four months.

Thus an alarming trend, first seen among India’s debt-ridden farmers in the 1990s, has spread to the European Union, where citizens have begun to end their lives because of crushing poverty and utter hopelessness. There is a feeling that rich will become richer at the expense of poor, that governments will either side with the wealthy, or be impotent in the face of powerful institutions determined to force economic reengineering on nations that will bring the greatest pain to the greatest number of people.

The age-old social contract between the state and its citizens is in an unprecedented crisis. Philosopher Jean Jacques Rousseau implied in his eighteenth-century work A Discourse On Inequality that natural inequality, meaning disparity between human strength and weakness, is established by nature. But moral inequality is based on a kind of convention that is established, or at least authorized, by the consent of men. Today, the system of privileges, which some enjoy to the prejudice of others, is fighting for legitimacy. Those who are privileged are “more rich, more honored, more powerful and in a position to extract obedience.”

Human evolution has been an epic struggle against moral inequality, which inevitably leads to accumulation of wealth and power and abuse of both. That monumental struggle is at a crucial juncture. On one end are forces of unrestrained capitalism that have been in the ascendancy since the collapse of communism. On the other, expressions of mass opposition in the form of the Arab awakening and the occupy movements in the American and European continents.

People’s movements are usurped by the very forces they were supposed to fight. The prospect looks more bleak and bloody. To pessimists, the contest between the corporate interests, international institutions and ruling elites on one hand and the citizens on the other is increasingly one-sided.

The feeling of disenfranchisement has spread to the north. Modern capitalism has created conditions not unlike those found under communism, which allowed party bosses and bureaucrats to control the population. Democratic centralism, sanctified by Lenin as “freedom for discussion, unity of action” at the Tenth Party Congress in 1933 may look obsolete a quarter century after Soviet communism collapsed. But corporate businesses and international financial institutions, working in harmony with politicians and other members of the ruling elites using state instruments, have gained unprecedented control over vast numbers of citizens today.

The pyramid of power is intact. Social democrats once provided an alternative with a conscience to the extreme rightwing monetarism. But they have all but surrendered to the neo-capitalist theory based only on growth and the idea that the one and only social responsibility of business is to make profit. Political labels of Left and Right have become meaningless. And autocratic instincts of capitalism of today mirror those of communism of the days gone by.

[END]

Iran Cutting Off Oil to Six European Union Countries – Press TV

Iran’s State TV (Press TV) says Iran is cutting off oil supplies to six European Union countries: France, the Netherlands, Spain, Portugal, Italy and Greece. It said Iran will only sell to those European countries that agree to strike long-term agreements and guarantee payment.”

The French and the Dutch governments had become among the most anti-Muslim, anti-Iran, ruling elites in recent years. Spain, Portugal, Italy and Greece are the most vulnerable economies in the European Union. So after a long time of Western bashing, Iran has responded with a significant retaliation. Counter-sanctions against France will hit President Sarkozy’s reelection prospects while, at the same time, hitting the weakest European Union economies has implications for EU unity.

However, the Guardian newspaper later reported that Tehran had denied cutting off oil supplies. What is known for sure right now is that the ambassadors of the six countries were called in to the Foreign Ministry in Tehran today and held separate talks with a senior Iranian official.

Oil prices began to rise after the initial Press TV report. Whatever turns out to be the case (supplies cut off or not), it shows how jittery the oil markets are.

[END]

How Capitalism Flopped

CounterPunch, November 7, 2011

In the struggle against global laissez faire capitalism that has brought the current economic collapse, protesters won an important victory last week in Britain, while stalemate continued in Greece. The alliance between the church, the main financial district called the City of London and Mayor Boris Johnson against the Occupy London protest crumbled. They had threatened legal action to remove peaceful demonstrators occupying an area near the London Stock Exchange for several weeks.

Legal moves against the protesters might lead to police action and violence. In particular, the readiness of St Paul’s Cathedral, the seat of the Bishop of London, to go to High Court split the church. Senior priests began to resign, signaling a crisis for the British establishment. Facing a growing sense of disquiet over possible use of force to remove peaceful demonstrators, the Corporation of London and St Paul’s Cathedral dropped the threat of immediate legal action.

In Greece, Prime Minister George Papandreou threw down the gauntlet to the two most powerful member-states of the European Union––Germany and France. To salvage the Greek economy and the European currency, they had agreed to finance a huge rescue plan, involving the International Monetary Fund and other sources, only days before. In the face of widespread demonstrations against draconian cuts in wages and public services, and rumors of a possible military coup, the Greek prime minister announced a referendum on the European Union rescue package.

Initially, the Greek cabinet gave its backing to the referendum plan, but the leaders of other EU member-states were furious. Deep political splits began to appear in Greece’s body politic. Germany and France have a lot to lose if Greece should default on its massive debt. Any government in Athens must have the people’s mandate to implement draconian austerity measures. Already, Greek people have started to take matters in own their hands.

Timing was of essence for Prime Minister Papandreou. First he agreed on a mega rescue deal with other European partners. When such a deal looked certain, he returned home and announced his referendum plan. European leaders, opposition politicians in Greece, even in his own Socialist Party, were surprised and angry. What might have been a straightforward move to secure a people’s mandate, if the timing was right, seemed to be an opportunistic attempt to save his government.

Chancellor Angela Merkel of Germany, leading paymaster of the euro bailout package, bluntly told Papandreou to accept the rescue deal with all conditions attached––or get out. Such warnings were bound to cause widespread offense in Greece, not least because the country had been under German occupation during the Second War. At the G20 summit in the French Mediterranean city of Cannes, European leaders waited to welcome the Chinese leader, Hu Jintao, hoping that China would contribute to the euro bailout.

Hu’s response: “To resolve the eurozone’s debt crisis, Europe still needs to rely on itself.” The Chinese are shrewd investors.

How did we get to this point? The question is posed frequently, though rarely answered truthfully.

The current globalization phase, beginning at the end of the Cold War around 1990, extended the markets across state boundaries. The movement of money, goods and services on a massive scale across national boundaries required regulations, but they also had to be relaxed in ways not seen before, to facilitate the ease of transfer. The Nobel Prize winning Columbia University economist Joseph Stiglitz points out that the ‘driver’ behind this phase of globalization is corporate interests.

Many transnational corporations are bigger than most national economies. Powerful corporations export not only goods and services, but also a certain culture of borrowing, cheap labor and money. Corporate interests are fundamentally linked to consumption, for profits are driven by consumption.

Corporate investments have flown to destinations of cheap labor and weak unions––China and Southeast Asia, India, Turkey, Southern European countries and South America. Factories in the United States and Western Europe have closed, new plants have spread in Asia and South America. Acceleration in this phenomenon in the last two decades has resulted in massive job losses in the industrialized world. Most products bought by Western consumers now come from the emerging economies.

Corporate profits have steadily grown, but the overall purchasing power of Western consumers has declined to alarming levels, caused by rising unemployment and shrinking incomes of those still in work. Government revenues, too, have been declining in the West, which has demonstrated a propensity to spend enormous sums of money on wars abroad and to cut public services at home.

For too long, consumers and governments tried to maintain the status quo by borrowing money at artificially low interest rates and cheap goods manufactured abroad. Loans secured on the real state to finance the lifestyle in the West sent property prices sky high. The crash had to come.

The case of the Greek tragedy is stark, but Greece is not alone. For a long time, its people have not been paying taxes they should have been paying. The country has been borrowing to maintain living standards, pay wages of government employees, to hold events like the Athens Olympics in 2004. The party had to be over one day–and that day has come. Less than a quarter century after long celebrations of victory over communism began in the West, capitalism has flopped.

[END]