Theresa May: Walking the Kingdom Down a Dark Alley

CounterPunch

Things are rocky on both sides of the Atlantic. In Washington, Donald Trump’s presidency, barely a month old, has made a chaotic start, and is getting sucked into ever deeper crisis. In London, Theresa May, prime minister of the United Kingdom which looks deeply split, is about to trigger Article 50 of the Lisbon Treaty. Thus she will begin the process of Britain leaving the European Union and its associated institutions.

In the midst of rancor between an infant presidency and its detractors, the White House meeting of May and Trump, seen hand in hand, was an extraordinary and rare demonstration of mutual love only a week after trump’s inauguration. A month on, it seems a long time ago.

Let us remind ourselves about what has happened in the past month. Donald Trump came to Washington promising to “drain the swamp.” The exodus of officials from numerous federal departments and agencies that keep the United States government functioning has been dramatic. Instead, Trump has created his own little swamp, which he has found difficult to fill.

First, the National Security Adviser, Michael Flynn, was forced out after revelations that he had held telephone conversations with the Russian ambassador to Washington, Sergey Kislyak, while President Barack Obama was still in office and Flynn was in Trump’s transition team. That in one telephone conversation Flynn discussed the sanctions President Obama had imposed on the same day was bad enough. What sealed Flynn’s fate was that he then lied to Vice President Mike Pence, who then publicly defended Flynn saying that there had been no discussion with the Russian ambassador about the sanctions.

Flynn was also interviewed by the FBI soon after Trump’s inauguration, and had given a similar account to the agency. Following leak after leak, speculation has become relentless that over the past year other Trump associates have had constant and repeated dealings with the Russians. President Trump’s plan to appoint a friendly individual as intelligence supremo to investigate and identify sources responsible for leaks shows how much the working relationship between the White House and the intelligence services has broken down. The consequences of this breakdown for Britain’s formidable intelligence headquarters GCHQ could be serious in the light of the UK’s disengagement from the European Union.

Second, Andrew Puzder, billionaire CEO of a fast-food restaurant chain, withdrew his nomination as Trump’s Labor Secretary because of intense criticism of him in the Senate prior to his confirmation hearings. Third, Trump’s choice to refill the national security adviser’s post, Robert Harward, turned down the offer despite the president’s repeated efforts to persuade him. And then, David Petraeus, once a celebrated army general, dropped out of the race for Trump’s national security adviser.

Petraeus has been on probation after pleading guilty to a misdemeanor charge after revelations of an extramarital affair and mishandling of classified material with his lover. It is as clear as daylight that President Trump is beleaguered and faces struggle to establish his authority like few of his predecessors.

For Prime Minister Theresa May to fly to Washington within a week of Trump’s inauguration was both an act of political expediency and perilous haste. He was mercifully courteous before television cameras. She was anxious to say, again and again, that she was there to “renew the special relationship” between the United States and Britain. She boasted in front of cameras that she had secured President Trump’s full commitment to NATO in private talks. Right up to his election, Trump had described NATO as obsolete, and threatened to reduce Washington’s commitment to defending smaller, more vulnerable countries of the alliance if they did not spend more money on defense.

Trump remained silent on the matter while his guest went ahead to announce that the American president had given a firm commitment to NATO. Barely two weeks later, Trump’s Defense Secretary, James Mattis, taking Trump’s original line, said that unless other alliance members spent more, America would “moderate” its commitment to their defense. Chancellor Angela Merkel’s blunt response was that Germany would not accelerate its existing, long-term plan to gradually increase military spending despite America’s demand to do so by the end of 2017.

Vice President Mike Pence immediately picked up where Mattis had left, making clear that he was delivering Donald Trump’s message. Apparently referring to Germany, France and Italy, the American Vice President said, “Some of our largest allies do not have a credible path.  The time has come to do more.”

So, we have turmoil in Washington; unprecedented tensions between the United States and NATO; and the European Union. Nonetheless, Britain’s Prime Minister looks determined to make a clean break from the European Union and all its institutions, and follow Trump’s America. It is a dangerous path.

Less than a year ago, Theresa May advocated Britain’s continued membership of the EU that gave the country access to the world’s largest market. Now, she is a passionate leader who will lead Britain out of the European Union and its economic, social, environmental and judicial instruments. She will accept estrangement from immediate European neighbors, but much greater reliance on a superpower governed by an isolationist, unpredictable president more than three thousand miles away across the Atlantic.

She will explore the “brave new world” more than half a century after Britain lost its empire, and ceased to rule the oceans. All with a small army and naval force smaller than those of the United States, Russia, China and Japan, and only slightly bigger than the French navy. Britain has nuclear weapons, but it cannot conceivably use them without America’s consent.

A country is never more vulnerable than when there is just one guarantor and not enough room for manoeuvre.

[END]

Austria Wakes Up and Rejects Far-Right Takeover

The Citizen

The June referendum in which Britain voted to leave the European Union, and Donald Trump’s victory in the November 2016 American presidential election, were massive right-wing political earthquakes.

Those who predicted aftershocks, this time in Austria’s presidential election and Italy’s constitutional referendum, thought that they were on safe ground in assuming that the right would triumph there, too.

Instead, the far right in Austria suffered a shock defeat. Independent candidate and former leader of the Green Party, Alexander Van der Bellen, beat the Freedom Party candidate, Norbert Hofer, by a margin of 53.3% – 46.7%. In May, Bellen had won by a tiny margin of 31000 votes, but the result was annulled by Austria’s highest Constitutional Court. Then, the judges found that although there was no fraud, thousands of absentee votes had been counted too early, influencing the main vote. And the court ordered that the election be held again.

In Italy, Prime Minister Matteo Renzi had called a constitutional referendum to curtail the powers of devolved regional governments and reduce the size of the Senate, arguing that these measures would reduce bureaucracy. Renzi suffered a heavy defeat and resigned as he had said before the vote. The outcome, however, did not cause the shock to the Italian system that many had predicted.

Britain’s right-wing press had made much about a new crisis for the euro and the stock markets if Renzi lost the referendum. In the event, Italy and the EU took Renzi’s departure in their stride. The truth is that governments in post-war Italy come and go frequently. Prime Minister Renzi’s was the latest. Italy’s economic and industrial decline has been going on since the end of World War II, with no real growth over the last twenty years. What was new and unexpected this time? It was business as usual for Italy.

The United Kingdom sees developments in mainland Europe very differently from Europeans themselves. So deep is the hostility against the European Union and its leading members, Germany and France, that diehard opponents on Britain’s political left and right will go to any extent to try to prove that the EU project is collapsing.

There are two different realities in mainland Europe. The far right, fervidly opposed to the idea of the European Union, has been on the rise for a number of years. But now support for the EU is also rising in many member-states, particularly in the wake of the Brexit vote in the United Kingdom.

That the far right poses a serious challenge for established parties throughout Europe is not in doubt. Nonetheless, Britain’s vote to leave the EU, the anti-Europe rhetoric and the prevailing uncertainty, all appear to have generated a new consciousness across the continent. The European Union may have its faults. But many of those who have been working for its disintegration in the name of nationalism and sovereignty are far from serious politicians who have credible alternatives to offer.

Austria’s newly-elected president, Van de Bellen, fought on the slogan: “Those who love their country do not divide it.” The result of the re-run is evidence that the new post-Brexit reality, and the forethought of what might happen to Austria in the event of a far-right victory, evidently changed the hearts and minds of many voters.

Other worries also concentrated the minds of Austrians in the event Norbert Hofer won the presidency. The post is largely ceremonial, but what if Hofer exercised his constitutional right to appoint a prime minister, and that person was from the fringe? Austria has been a liberal democracy since the devastation in two world wars in the last century. The prospect of upheaval threatening the country’s stability and prosperity was not something Austrians wanted to contemplate again.

Continuing arrival in Europe of great many refugees escaping Middle East wars, in which the West has played its own part, have helped create favourable conditions for the far right. But to many Austrians, a far-right takeover is a frightening prospect for their country which, along with Germany, still grapples with its history of fascism and World War II.

That history reminds us of the rise and fall of a great empire and the destruction wrought by extremist politics. So the Austrian people drew back from that prospect and elected Van der Bellen, a mild-mannered academic, who expressed faith in the country’s liberal parliamentary democracy.

Will the tide now turn against right-wing extremist groups in other countries? France, Germany and the Netherlands are among European Union states due to have elections in 2017. In France, the current Socialist President Francois Hollande, facing a humiliating defeat, has announced that he would not stand for re-election next year. The contest to succeed Hollande will almost certainly be between Francois Fillon, ex-prime minister, who recently won the Republican presidential primary, and Marine Le Penn, leader of the far-right French National Front. Opinion polls suggest that Fillon will easily overcome the challenge from Marine Le Penn.

In Germany, Chancellor Angela Merkel is seeking a fourth term. Despite criticisms of her decision to allow hundreds of thousands of refugees, Merkel remains popular among Germans. And her role is central to the success of the European Union and Germany’s leadership role.

The year 2016 has certainly produced big surprises, and it would be reckless to make predictions about the coming year. The best which can be said at this point is that even though support for the political right is causing alarm among established parties, far right nationalism has probably reached a peak from where it is unlikely to climb up much further.

[END]

Britain in the Doldrums After the Brexit Vote

CounterPunch

The recent referendum on Britain’s membership of the European Union was a people’s revolt which unleashed a series of unintended consequences. The result was unexpected, and its aftershocks ended more than a handful of political careers. Prime Minister David Cameron, who had vigorously campaigned to remain in the EU, resigned the following day. The euphoria which the Leave campaign’s ‘victory’ generated did not last. Several leading figures of the winning side withdrew from the front line.

Nigel Farage, a vehement anti-EU and anti-immigration politician, stood down as leader of the right-wing populist UK Independence Party. Farage claimed that he had done his bit, and was going to spend time with his family. Boris Johnson, former mayor of London, whose last-minute decision to join and become co-leader of the Leave campaign, announced that he would not enter the race to succeed David Cameron as the Conservative Party leader and prime minister. George Osborne, chancellor of the exchequer (finance minister), who was seen as a future prime minister, also decided not to enter the leadership contest.

Amid the shock of Brexit, the party’s ‘big beasts’ Michael Gove and Liam Fox were eliminated from the leadership race in the first two rounds. The Home Secretary Theresa May, a quiet Remainer, found herself in a commanding position among Conservative members of parliament. Chris Grayling, another Leaver, made a tactical retreat without even entering the race. Andrea Leadsom, a junior minister, took a distant second place. Her lack of judgment and experience were soon obvious. Leadsom retired hurt after growing criticisms from party members and the press.

Leadsom’s withdrawal left Theresa May as the last candidate standing in the field. Thus she became the leader of the party and prime minister.

Two striking features emerged from May’s appointment of a new cabinet on taking office. The overwhelming majority of her ministers were in the Remain camp, as she herself was, before the vote. Nevertheless, she did bring some prominent figures of the Leave camp into her cabinet. She has given them departments with the responsibility to negotiate Britain’s exit from the European Union, and to find new trade deals to plug the big hole which leaving the EU will create.

The appointment of Boris Johnson, an outspoken politician who has a reputation for making undiplomatic remarks, as Britain’s foreign secretary has caused astonishment, ridicule and anger in Europe and the United States. Johnson has few friends, but many foes. The new Brexit Secretary, David Davis, was minister of state for Europe twenty years ago. Liam Fox has been given the department of international trade, and Andrea Leadsom environment, food and rural affairs – a department which has to deal with massive EU subsidies for farmers.

These four politicians were the main faces of the Leave campaign in the governing Conservative Party before the referendum. Now they are entrusted with the heavy responsibility of making Britain’s exit happen. For them, the time for sloganeering is over. Now they must deliver. The presence of some of the most vocal Leavers in a cabinet which has a safe majority of Remainers looks like a Machiavellian device to keep opponents in and, at the same time, contain them. If they fail, people will hold them responsible.

The United Kingdom leaving the EU would be a walk into the dark, for there is no precedence of a member-state walking out of the association. Once Article 50 of the Lisbon Treaty is triggered, the process would be extremely complex, tense and risky. The prime minister has announced that she will chair three new cabinet committees which will focus on the European Union and international trade, economy and industrial strategy, and social reform. The Brexiteers who found a place in the cabinet achieved high office, but with their wings clipped. Theresa May, to whom they should be grateful, will always be watching their every move.

This outcome shows that winners are often losers in the chaotic aftermath of a popular mutiny, for that is what the referendum was. Rebellion continues to simmer under the surface in the governing Conservative Party, which has a working majority of just 16 in parliament. There are about 20 hard-line MPs who will stop at nothing short of complete exit from the EU, and Theresa May has either sacked or not promoted around 25 Tory MPs, who are unhappy. The prime minister may be safe in the cabinet she has chosen now, but the prospects of revolt in the near future are high.

The origins of the people’s revolt in the EU referendum are worth exploring. A close examination of how different groups voted is revealing (see Politico). While 70 percent 18 to 24-year-old voters wanted the United Kingdom to remain in the European Union, there was a steady decline in support for the EU among older age groups. Among those aged 65 years or more, 61 percent voted to Leave. Britain’s aging population has been on the rise for years. Older people with lingering memories of World War II look negatively at the EU, in which Germany is the most powerful member-state.

Support for remaining in the EU among voters with a university degree was 71 percent. It declined with lower education to the extent that almost two-thirds of voters with a high school diploma chose to Leave. Across the political spectrum, the more right-wing voters were, the stronger their opposition to Britain’s membership of the EU and free movement of people. So Labour and Liberal-Democrat voters backed the idea to remain in large numbers while backing for leaving among Conservative and UK Independence Party supporters was very high. Scotland and Northern Ireland voted to remain. England and Wales went against. The referendum has divided families, with young and ambitious graduates wanting to travel on one side. Their parents and grandparents on the other.

Most worrying is the divide between rich and poor in England and Wales. Communities devastated by the demise of the coal and steel industries since the 1980s have still not recovered. Young, able and ambitious have moved to other parts of the country, indeed to other European countries. Left behind are the old, the less educated and the poorly skilled whose wages are easily undercut by new arrivals from other EU countries. Years of hardship, isolation and hopelessness have made them bitter and resentful. A great many of them saw in the referendum their only opportunity to punish the rich and the powerful, who had failed them. To vote Leave was their only weapon.

The United Kingdom has not seen such deep polarization in living memory. The pound has crashed. Confidence in the economy has suffered a sharp decline. Prime Minister Theresa May has said that she will not trigger Article 50 of the Lisbon Treaty, and start the exit process this year. For the country faces major challenges – to negotiate the exit from the EU; at the same time to maintain as much access to the European single market as possible; to negotiate dozens of new trade deals with countries around the world. These are monumental challenges. It is doubtful whether the United Kingdom has the ability to meet them without having to pay the price.

[END]

The United States, Britain and the European Union

CounterPunch 

On his farewell tour, President Barack Obama has stirred the pot ahead of the June referendum in Britain on whether the United Kingdom should stay in the European Union or leave. His warning to leavers that Britain cannot expect a trade agreement with the United States any time soon if it withdraws from the EU has infuriated leaders of the Brexit campaign, and delighted those who want to remain, including Prime Minister David Cameron. Obama’s message to Britain was that it should remain in the EU, and that it was in America’s interest, too.

Some of the comments made by leading Brexit figures in the governing Conservative Party in retaliation to Obama’s intervention have been described as borderline racist.

In a particularly outspoken jibe, London mayor and a member of the British cabinet, Boris Johnson, accused the American president of interfering in British politics. Johnson went on to say that after entering the White House Obama had ordered the removal a bust of the British wartime leader, Winston Churchill, from the Oval Office. Furthermore, he suggested that this might be because of Obama’s “part Kenyan ancestral dislike of the British empire.”

Other leading Brexit campaigners expressed similar sentiments. Nigel Farage, leader of the United Kingdom Independence Party, told the American president to “butt” out of intervening in Britain’s referendum on EU membership. Farage, too, asserted that Obama was influenced by his Kenyan family’s colonial view of Britain. The use of this type of language about an American president is unprecedented for the British political establishment – a country which claims a “special relationship” with the United States.

There are striking similarities between insinuations by American conservatives about Barack Obama’s Kenyan heritage and his Muslim father, and comments heard in Britain. Some members of the Brexit lobby have privately expressed fears that such direct attacks on him will backfire, and help the pro-EU campaign in a tight race. Jingoism and xenophobia live on both sides of the Atlantic. There are people ready and willing to whip up such sentiments.

Winston Churchill’s grandson, Nicholas Soames, a member of the British parliament and a supporter of remaining in the EU, has described Boris Johnson’s remarks as appalling, and said it was “inconceivable” that his grandfather would not have welcomed Obama’s views. It was, after all, Churchill who first suggested closer European unity in a famous speech in the Swiss city of Zurich in 1946.

From the ruins of the Second World War, Churchill spoke of his vision to recreate “the European family” with a structure under which it can “dwell in peace, in safety and freedom.” He described it as something like a United States of Europe. Today, his party is tearing itself apart over whether Britain should be part of that structure.

Why should President Obama have intervened so publicly in the EU debate during his visit to Britain? And why did opponents of the European Union react so furiously? These questions require understanding of how Britain’s relations with the United States and the rest of Europe, Germany in particular, have evolved in the last century.

The Second World War was a watershed which brought enormous global change. Hitler’s Nazi regime in Europe, and imperial Japan in Asia, were defeated. But Europe was quickly divided into rival blocs again – one dominated by America, the other by the Soviet Union.

At the same time, Europe’s colonial powers, Britain and France in particular, were so exhausted that they would have found it difficult to keep distant territories under their control. And the foremost superpower, the United States, was exerting pressure on the masters to let their colonies go. The Americans wanted to expand their markets worldwide, for which they were in competition with the Soviets.

Imperial Britain had to yield to imperial America – the coming inevitability which Churchill intensely disliked. There was, however, another option. Accept that the United States was paramount; stay close to Washington; and, whenever possible, use diplomacy to maneuver America in the direction in which Britain’s interests would be served.

The United States, too, was looking for close allies – in Europe, in the United Nations Security Council and other international organizations. Germany had been the main enemy in two world wars. France, at times, was too independent for Washington’s liking. Under President Charles de Gaulle’s leadership, France left NATO’s integrated military structure in 1966, asserting its independent nuclear deterrent and broader defense policy. Only in 2009 did President Sarkozy announce that France would rejoin the military structure of NATO once again.

In contrast, the United Kingdom has enjoyed the closest military and intelligence ties with the United States. “Special relationship” is a term often invoked in London. The dissolution of the Soviet Union, and the fall of the iron curtain, have paved the way for NATO and the European Union to expand. Today, both organizations perform similar functions, having incorporated countries that were once in the Soviet bloc. NATO and the EU both do the job of containing Russia, and of projecting American power beyond Europe. Brexit campaigners fail to get it.

[END]

Britain’s EU Referendum: What Is At Stake?

History News Network

A continent away from the presidential primaries in the United States, Britain is in the midst of an acrimonious campaign ahead of a referendum to be held on June 23 this year. The purpose is to decide whether the United Kingdom should remain a member of the European Union, a political and economic association covering much of Europe, or leave.

The idea of such an association was first mooted by the British war-time leader Winston Churchill. In a famous address at the University of Zurich in 1946, just after World War II, Churchill spoke of there being “a remedy which would make all Europe free and happy.” It was to “recreate the European family” and provide it with “a structure under which it can dwell in peace, in safety and in freedom.” He called it “a kind of United States of Europe.”

Churchill’s dream became a reality with the Treaty of Rome of 1957, and the creation of the European Economic Community. That association is known as the European Union today – the result of years of evolution. Ironically, when the European Economic Community was established, the French President, Charles de Gaulle, doubted “the UK’s political will” to be a member. France vetoed Britain’s application twice, in 1963 and 1967, and London had to wait until 1973 before it could join.

More than half a century on, Britain faces uncertainty again in its relationship with the rest of Europe. The issue of whether to stay in the European Union or exit divides the country, and the argument is getting louder and louder as the June referendum approaches.

The governing Conservative Party of Prime Minister David Cameron is deeply split. A number of senior members of his cabinet, more junior ministers, and as many as a hundred Conservative MPs, have declared their support for leaving the European Union. Their decision goes against their own government’s policy to remain, with some “opt-outs” from the EU Treaty that the prime minister has secured after lengthy negotiations. The governing party’s divisions have created an extraordinary situation in a parliamentary democracy which is supposed to have a cabinet with collective responsibility.

On the other hand, members of other political parties generally support the idea of Britain’s continued membership, with the exception of the United Kingdom Independence Party. With just one member in the British Parliament, UKIP’s demands center around leaving the EU, and imposing rigid controls on immigration into Britain. UKIP and Conservative opponents of EU membership assert that this is the only way for the United Kingdom to regain its sovereignty lost to the European Union.

The essence of their argument is that membership of the EU means having to accept laws made by the European Commission and Parliament. Although both have representatives of Britain and other member-states, it hardly matters for opponents. Their complaint – it means that the United Kingdom cannot govern itself.

Advocates of Brexit, as the idea of leaving the EU is called, insist that all laws governing the United Kingdom, in particular immigration, trade, justice, must be made in the British Parliament in London. They will accept nothing short of total sovereignty. Their solution is to negotiate separate trade deals with countries which Britain wants to do business with, and for the UK Parliament to pass all legislation to govern the country.

As in the United States, the resentment in certain sections of British society against foreign workers is strong. Those sections form the core of opposition to Britain’s membership of the European Union. They want cuts in the numbers of foreign workers, and the benefits of those who remain in the country. Little attention is paid to consequences for nearly two million UK citizens living in the rest of the European Union.

Will British citizens keep their right of free movement and freedom to work across the European Union under the system of reciprocity currently available? Will their status as permanent residents, and benefits like health and social security, be safe in other member-countries if Britain leaves? How will Britain’s exit influence the attitudes of other countries? These and other questions must be part of the current debate which could lead to a major realignment of British foreign policy. Supporters of Britain’s continued membership of the European Union have begun to raise these questions. And a lot of heat is being generated between the two sides.

Words of warning are being heard from across the borders. President Hollande of France has said that if British voters backed exit from the European Union, there would be “consequences” for Britain. His economy minister Emmanuel Macron was more direct. He said that France would end border controls agreed with the United Kingdom, opening the way for large numbers of migrants to move into Britain. The English Channel separating Britain and France is less than 20 miles wide. And with millions of people arriving from war-torn countries of the Middle East to the European continent, the prospect of large numbers of them heading for Britain’s shores is a nightmare.

Supporters of Brexit lament not just the loss of national sovereignty, but also the size of Britain’s financial contribution, €11.3 billion in 2014, to the EU budget. In comparison, Germany paid nearly €26 billion, France €20 billion and Spain €10 billion. The argument of Brexit advocates is that the United Kingdom could negotiate separate agreements with EU member-states, and pay even less, like Norway – without joining the association. Often ignored is the fact that Norway still pays into the European Union budget for privileges it receives, and the Norwegian economy is much smaller.

The referendum in June is not just about Britain’s membership of the European Union. It is about unhindered trade, movement of EU citizens, cooperation for mutual security; and about how British expatriates are treated by others, depending on how their citizens are treated by the United Kingdom. The stakes are high, and the opinion so evenly divided that the outcome hangs in the balance. In this climate of uncertainty, some will still find justification in General de Gaulle’s skepticism about Britain, expressed more than half a century ago. Others will hope that British voters will make a choice driven on the idea of a shared destiny, not past doubts.

[END]

Cyprus and the Eurozone Crisis

CounterPunch, March 29, 2013

Cyprus crisisThe economic crisis of the Republic of Cyprus follows the Greek tragedy of the past year. Only the scale this time is bigger, but the anger in the small island with one-tenth of the population of its neighbor no less. Pressure applied by the troika of Germany, the European Central Bank and the International Monetary Fund has led to the imposition of draconian measures on the banking system of Cyprus, affecting the lives of its residents in ways unimaginable before the crisis. They include a tax on large savings, bank shutdowns and severe limitations on withdrawals and transfers for all.

These are unprecedented steps, forced on a western country by the European economic bloc which, in effect, is led by Germany. What transpired has caused humiliation among Cypriots­–a sentiment that often proves lasting and causes more problems in the longer run than it solves in the short run. Until a few days ago, Chris Pavlou was the vice chairman of the Laiki Bank of Cyprus, and was at the heart of discussions as the crisis unfolded.

An insider’s account given by him is instructive. Pavlou spoke to Britain’s Channel 4 News about the humiliation felt by Cypriot officials: “It’s not very nice actually to see two or three people half your age, clever people, coming over there and shaking their hands at the president and saying ‘you have to do this, otherwise we will bring you down’. It’s very painful for someone who has just been elected to actually face that.”

Lawmakers participate in a parliamentary session in NicosiaOnly a few days before, even after an amended version of the original package was introduced in the Cypriot parliament, not a single MP had voted in favor. In the streets of Nicosia people had celebrated the rejection, and seemed to go home happy.

There was talk of Cyprus turning to Russia to bail its economy out. The finance minister of Cyprus, Michalis Sarris, was in Moscow to seek help. But as the European Central Bank’s deadline to Nicosia to “sort it” by March 25 loomed, the Cypriot finance minister spoke of there being no hurry to leave the Russian capital. The two sides held negotiations about Russia investing in the vast gas fields around Cyprus and the Cypriot banks.

In the end, though, the Cypriot finance minister returned home disappointed, because Russia would not get involved as long as Cyprus was under the European Union’s economic regime. Turkey, which supports the unrecognized “Republic of Northern Cyprus” since Ankara invaded the island in 1974 during an intense proxy war with Greece, had indicated that it might challenge Nicosia’s use of gas reserves in the bailout.

It is the politics, rather than the economics, of the eurozone’s latest crisis which is more intriguing. Faced with a general election, Germany’s chancellor, Angela Merkel, was once again in an uncompromising mood. National interest and political expedience were no less powerful motives which proved critical in decisions taken in Berlin, Frankfurt and Brussels on the fate of Cyprus.

imagesThe euro has faced increasingly powerful challenges in more than a decade since the currency was introduced. The case of Cyprus is a watershed. Recent events confirm two main trends which were emerging for a number of years. One, the euro is a troubled currency whose problems do not seem to go away. Second, the survival of the European currency depends on one member-state, Germany, by far the most powerful country in Western Europe.

Germany’s domination thus sustains the single currency in the eurozone in the short run, but throws the entire project in its current enlarged form in doubt. Such power dynamic puts Germany at the center, and the rest on the periphery, perhaps with the exception of France, which also must go along with Germany’s leadership, despite sometimes diverging views between Berlin and Paris. It makes the eurozone not a community of equals, who are in the currency union voluntarily, but an empire with one ruler and many ruled, utterly dependent on the center of power. The economic crisis extending throughout Europe, but hitting Ireland and countries in the south hardest, is alarming.

We see the current state of affairs polarizing much of the European continent. We see rightwing, nationalist sentiments pushing elites who govern more and more to the right. Even so, the peoples’ frustration mounts, and we must ask how far these governing elites are likely to go to assuage the scale of discontent. These are reasons for instability and conflict, and far from the idea of unity and peace in Europe envisioned sixty years ago after two devastating wars.

[END]

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.

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