Europe - France left the initiative to Germany...

For those interested in a critical account of the French government of Hollande's European politics, below is an article that may interest you. I do not know of a similar account of the Dutch government of Rutte's coalition government with the Partij van de Arbeid (the Dutch labour party), which might indicate the lack of critical analysis in the Dutch media on Netherlands' European policy (which would be a serious shortcoming) or it may demonstrate my lack of knowledge about it, partly because I read better the foreign media than the Dutch media.
However, if one of you has seen a similar critical article about the Dutch government's record in European policymaking, please let me know (j.j.teunissen@planet.nl).

Here is the French account of Hollande's European policy, published by Sauvons l'Europe.

L’Europe : un point noir du bilan de Hollande

Auteur : Sauvons lEurope Dans Actualités, En Une, Opinions 15 février 2017

François Hollande a peu fait pour infléchir la politique de l’Union européenne

L’Europe fait partie des points faibles du bilan de François Hollande. En 2012, celui-ci avait commencé par la ratification du traité sur la stabilité, la coordination et la gouvernance (TSCG), un texte voulu par Angela Merkel pour renforcer et pérenniser l’austérité budgétaire en Europe. Durant sa campagne électorale, le futur président avait pourtant promis de renégocier ce traité. Finalement, il n’en fut rien.
En échange de ce renoncement, l’Union était censée investir 120 milliards d’euros supplémentaires pour relancer l’activité, mais cet argent est resté largement fictif. Au contraire, le nouveau président fit le choix, dès 2013, de chercher à revenir sous la barre des 3 % du PIB de déficit public. Un choix funeste car il freina l’activité, empêchant au final à la fois de réduire les déficits et d’inverser la courbe du chômage, tout en entraînant l’explosion du débat sur le « matraquage fiscal ».
François Hollande a certes joué un rôle important par la suite pour empêcher que la Grèce soit éjectée de la zone euro lors de la crise de l’été 2015, mais il n’avait pas réellement tenté auparavant d’engager une médiation entre le gouvernement Tsipras et les instances européennes pour éviter d’en arriver à cette crise ouverte.
La France a aussi laissé l’Allemagne en première ligne sur la question des réfugiés syriens, sans prendre sa part du fardeau, en refusant d’en recevoir un nombre significatif sur son territoire. Elle n’a pas mis non plus réellement son poids dans la balance pour aboutir à une solution européenne coordonnée. Manuel Valls s’est au contraire désolidarisé bruyamment de nos partenaires allemands à Munich en février 2016. Quant au projet de taxe européenne sur les transactions financières (TTF), théoriquement porté en particulier par la France, le gouvernement a en réalité cherché constamment à le vider de sa substance sur l’insistance du lobby bancaire hexagonal.

Pas de propositions pour l’avenir

Mais ce qui a surtout péché dans le quinquennat en la matière, c’est ce qui n’a pas été fait : Paris s’est fait remarquer par sa discrétion remarquable sur les grands dossiers européens de l’avenir. La France n’a fait aucune proposition significative à ses partenaires pour régler la question des dettes, relancer l’activité économique en Europe, accélérer la transition énergétique, lutter davantage contre le dumping fiscal ou encore réorienter la construction européenne dans un sens plus social, comme on aurait pu (ou plutôt dû) s’y attendre de la part d’un disciple de Jacques Delors.
Guillaume Duval
Alternatives Economiques n°364 – 01/2017 

Popular revolt in the Netherlands?

In the United States they have Trump and we in the Netherlands have Wilders. In both cases one should look at what they say, and what they do. In the case of Trump, he is now in a position he can do things, as president of the United States. In the case of Wilders, it is unlikely that he will be in that position by becoming the prime or deputy prime minister of the Netherlands, even when he would get more votes than any other party. But he is already criticizing, warning and threatening the other political leaders that if they exclude him from government power, they are not taking seriously the votes of 2,5 million Dutch who are likely to vote for him, and then they will be in for trouble. In a recent television interview he said that neglecting his party will create a popular revolt.

The best strategy to stop Wilders from becoming even more popular after an electoral victory and exclusion from government power (something that once happened to the Dutch labour party before) is to discuss his main electoral points in a serious way, including his criticism of the European Union and political elites and his untenable stance on islam. I hope Dutch politicians will do that and I hope Dutch media will pay attention to a more serious debate than just the rivalry between political leaders. However, I am afraid that the low level of debate and information of what is at stake will continue in the Netherlands.

The low level of political debate and the low level of information is a serious problem and undermines our democracy, not only in the Netherlands but in many countries around the globe.

In the meantime, as a person who likes to read information about what's going on in the world, I am forced to see Wilders' face popping up around every corner and read his propagandistic warnings which serve to increase his popularity. Below is the latest I saw and read.

Pays-Bas : Geert Wilders se présente comme un incontournable du prochain gouvernement

13 févr. 2017, 22:06

© Emmanuel Dunand Source: AFP

Le leader du PVV, Geert Wilders

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Favoris des sondages à quelques semaines des élections législatives, les nationalistes du PVV pourraient être tenus à l'écart du gouvernement. Tout en détaillant son programme, Geert Wilders a mis en garde contre l'exclusion de millions d'électeurs.

«Vous ne pouvez pas ignorer 2,5 millions d'électeurs après des élections démocratiques. Cela serait une très mauvaise idée», a déclaré avec force le leader du Parti pour la Liberté (PVV) néerlandais, Geert Wilders, au cours d'une interview accordée le 12 février à la chaîne de télévision néerlandaise WNL.

Lire aussi

Pays-Bas : l'extrême droite promet de faire fermer les mosquées et interdire le Coran

Geert Wilders a également affirmé qu'une coalition gouvernementale sans le PVV conduirait à «une assemblée politique instable... qui s'effondrera en moins d'un an». Celui qui est déjà surnommé le «Donald Trump néerlandais» a par ailleurs réaffirmé, au cours de l'interview, qu'une mise à l'écart de sa formation politique provoquerait une révolte populaire.
Le dirigeant du parti nationaliste a également précisé les propositions du PVV lors de cet entretien télévisé. Il a notamment indiqué vouloir retirer les «licences» des mosquées plutôt que de les faire fermer par la force. Il a par ailleurs fait un parallèle entre l'interdiction du Coran, qu'il souhaite mettre en place, et l'interdiction déjà en vigueur aux Pays-Bas de Mein Kampf, l’autobiographie d'Adolf Hitler.
Des mesures qui permettront, d'après le PVV, de «dés-islamiser» les Pays-Bas, que le parti veut faire sortir de l'Union européenne pour mieux fermer les frontières aux immigrants.
(...)

The neverending Greek debt crisis

Two key players in the Greek debt saga, Dijsselbloem and Lagarde.

In the recent series of thought-provoking articles on this blog, here is a fourth one, on the lingering Greek debt crisis, written by Larry Elliot, "Greek debt crisis: an existentialist drama with no good end in sight".

The article begins as follows:

Put three people in a room who can’t get on with each other. Condemn them to stay there for all eternity while they torture each other. Sit and watch as the gruesome story plays out. And what do you have?
One answer is the 1944 existentialist play by Jean-Paul Sartre, Huis Clos. Another is the story of the neverending Greek debt crisis in which the three main characters are Alexis Tsipras, Wolfgang Schäuble and Christine Lagarde.
The plot is as follows. Greece has been through a terrible slump. Its economy has shrunk by more than a quarter, equivalent to the Great Depression in the US. Its financial position has become so parlous and its credit-rating so poor that it needs financial help to get by. It is currently on its third bailout.
Up until now the money has been provided by Europe and the International Monetary Fund and it has come with strings attached. The money for Athens is disbursed in tranches and can be stopped if Greece fails to go ahead with promised reforms. Athens is balking at inflicting further pain on its population, which has led to the threat that no more assistance will be forthcoming. To complicate matters, the Europeans and the IMF have fallen out.
Put simply, the Greeks say the conditions on them are too severe. They want debt relief but are resisting demands at pension reform and for “hire and fire” labour market reform.
The IMF agrees that Greece’s debt burden is far too high and the stipulation that the country should run an underlying budget surplus of 3.5% a year is unrealistic. The Fund is warning that the debt could become “highly explosive” and will not financially back the latest rescue attempt without meaningful debt relief. But it is also insisting that Greece sticks to a reform programme that the Fund believes will improve growth prospects.
(...)

And the article ends this way:

Another key player, Schaeuble.

The Europeans have said they would like Greece to be sorted at the meeting of finance ministers planned for 20 February. This could still happen if Tsipras decides that the only alternative to liberalising redundancy rules and pension reform would be to hold a “who runs Greece?” election that he would almost certainly lose.
The situation could also be resolved if Germany decided to support the IMF’s call for much more generous debt relief for Greece, or if Berlin bowed to pressure from Trump and boosted domestic spending.
But the ingredients are there for the neverending crisis to rumble on into the summer, when Greece will eventually run out of money and will not be able to pay its creditors. If there is no swift resolution, bond yields will rise and talk of Grexit will resurface.
Huis Clos is known in English as No Exit. For Greece, if life becomes even more intolerable, there is one way out.

If you want to read the recent view of the IMF on the Greek debt crisis, you will find interesting information in this IMF Press Briefing of February 9, 2017: Transcript IMF Press Briefing.

Trump plays chicken game with the Eurozone

Lukas Daalder

Trump plays chicken game, said Dutch columnist Lukas Daalder in an opinion piece hosted by Het Financieele Dagblad of January 6, 2017, under the title "Trump speelt chicken game". You may like the metaphor or not, you may find it realistic or not, but it gives food for thought and that is what I aim at with this series of articles. Below is an account of the article by Lukas Daalder published by Cyprus News Agency; the translation into English of Daalder's words is by Wayne Hall.

"As explained by Lukas Daalder, the American president has adopted as his navigational guide the well-known game where two drivers race towards each other to see who will chicken out first and turn the wheel to avoid a fatal head-on collision. Trump’s objective goal, according to the article writer is to clear the oncoming  traffic lane from potential competitors or other obstacles that impede his drive for hegemony.
According to Lukas Daalder, Trump himself circulates in a heavily armoured  vehicle, so that the choice is very simple for those driving in the opposite lane: either proceed to a head-on collision or swerve to escape the fatal crash. But the swerving will take the driver out of the game, to the side of the road, and the damage he will have sustained will be irreparable. Note that Trump set off on this course by choosing an easy target, i.e. Mexico, which on account of its objective weakness is doomed to end up at the side of the road, wrecked.
The point is made that the next victim will be Germany, which Trump has elevated to the status of number one opponent and for that reason seeks to neutralize. At first sight such a stance does not appear logical, Lukas Daalder observes, given that the automobile that conveys the German chancellor on her rounds is also an armour-plated Mercedes, so that in the event of a collision Trump himself will not escape unscathed.
At this point Lukas Daalder brings into the game the Eurozone, which he likens to a “beaten-up and clapped-out vehicle (a trailer, let’s say) being towed behind the Mercedes.
As Lukas Daalder puts it: “Trump wouldn’t be Trump if he hadn’t succeeded spotting the weak link, i.e. the Eurozone.
So why should the American president risk a collision with the Mercedes when he has the option of trapping the lead vehicle by sabotaging the trailer in that way forcing the vehicle in front (i.e. Germany) off the road, in that was accomplishing his strategic goal.
Trump doesn’t have to do much, Daalder makes clear. Today  (6^th February)  the Executive Council of the IMF is convening to make its decisions on the provision of new economic assistance to Greece. Trump may admittedly not be the boss of the IMF,  but he is the chief shareholder.
So what will the INF do, given that it has reservations about continuing the program, seeing Trump in his armoured vehicle descending on the hapless trailer? Reasonability  may be sidelined. But in that case, the article writer asks, who honestly believes that the Eurozone will of its own accord make the necessary contribution  to Greece, on the eve – indeed – of crucial elections in many European countries? Lukas Daalder’s conclusion is that if this scenario materializes, the run-down trailer (i.e. the Eurozone) will start wobbling dangerously and heading for ruin."

Famous leftist professor James Petras defends Trump

Following up on my previous post, here is another though-provoking article, "President Trump: Nationalist Capitalism, An Alternative to Globalization", written by James Petras.

I do not fully agree with all of Petras' arguments but he says a couple of interesting things. His main argument is that anti-Trump journalists and academics have distorted Trump's views and neglected his critique of US policies and the current state of affairs.

Petras seems to support Trump's industrial policy (I am not fully sure) whereas other academics like Dani Rodrik have serious doubts about it. However, there are other academics, like Andrew Sheng, who also believe that Trump may be successful in his envisaged economic policies: "Contrary to the claims of some doomsayers, Trump’s economic policies might actually work. With enough investment in infrastructure – and with the help of negative real interest rates – Trump may well manage to revive productivity and GDP growth enough to reduce America’s debt overhang in real terms."

Let me now turn to Petras's article and quote him extensively below:

The centerpiece of Trump’s critique of the current ruling elite is the negative impact of its form of globalization on US production, trade and fiscal imbalances and on the labor market.... For two decades many politicians and pundits have bemoaned the loss of well-paid jobs and stable local industries as part of their campaign rhetoric or in public meetings, but none have taken any effective action against these most harmful aspects of globalization.  Trump denounced them as “all talk and no action” while promising to end the empty speeches and implement major changes.

His economic strategy of prioritizing US industries is an implicit critique of the shift from productive capital to financial and speculative capital under the previous four administrations.  His inaugural address attacking the elites who abandon the ‘rust belt’ for Wall Street is matched by his promise to the working class: “Hear these words!  You will never be ignored again.”

President Trump emphasizes market negotiations with overseas partners and adversaries.  He has repeatedly criticized the mass media and politicians’ mindless promotion of free markets and aggressive militarism as undermining the nation’s capacity to negotiate profitable deals.

Trump points to trade agreements, which have led to huge deficits, and concludes that US negotiators have been failures.  He argues that previous US presidents have signed multi-lateral agreements, to secure military alliances and bases, at the expense of negotiating job-creating economic pacts.

Trump’s agenda has featured plans for hundred-billion dollar infrastructure projects, including building controversial oil and gas pipelines from Canada to the US Gulf.  It is clear that these pipelines violate existing treaties with indigenous people and threaten ecological mayhem.  However, by prioritizing the use of American-made construction material and insisting on hiring only US workers, his controversial policies will form the basis for developing well-paid American jobs.

The emphasis on investment and jobs in the US is a complete break with the previous Administration, where President Obama focused on waging multiple wars in the Middle East , increasing public debt and the trade deficit.

Despite the transformation of the world order, recent US presidents have failed to recognize the need to re-organize the American political economy.  Instead of recognizing, adapting and accepting shifts in power and market relations, they sought to intensify previous patterns of dominance through war, military intervention and bloody destructive ‘regime changes’ – thus devastating, rather than creating markets for US goods. Instead of recognizing China’s immense economic power and seek to re-negotiate trade and co-operative agreements, they have stupidly excluded China from regional and international trade pacts, to the extent of crudely bullying their junior Asian trade partners, and launching a policy of military encirclement and provocation in the South China Seas.  While Trump recognized these changes and the need to renegotiate economic ties, his cabinet appointees seek to extend Obama’s militarist policies of confrontation.

Early in his campaign, Trump recognized the new world realities and proposed to change the substance, symbols, rhetoric and relations with adversaries and allies – adding up to a New Economy.

First and foremost, Trump looked at the disastrous wars in the Middle East and recognized the limits of US military power:  The US could not engage in multiple, open-ended wars of conquest and occupation in the Middle East, North Africa and Asia without paying major domestic costs.

Secondly, Trump recognized that Russia was not a strategic military threat to the United States .  Furthermore, the Russian government under Vladimir Putin was willing to cooperate with the US to defeat a mutual enemy – ISIS and its terrorist networks.  Russia was also keen to re-open its markets to the US investors, who were also anxious to return after years of the Obama-Clinton-Kerry imposed sanctions.  Trump, the realist, proposes to end sanctions and restore favorable market relations.

Thirdly, it is clear to Trump that the US wars in the Middle East imposed enormous costs with minimal benefits for the US economy.  He wants to increase market relations with the regional economic and military powers, like Turkey , Israel and the Gulf monarchies.  Trump is not interested in Palestine , Yemen , Syria or the Kurds – which do not offer much investment and trade opportunities.

Trump will most probably maintain, but not expand, Obama’s military encirclement of China ’s maritime boundaries which threaten its vital shipping routes.  Nevertheless, unlike Obama, Trump will re-negotiate economic and trade relations with Beijing – viewing China as a major economic power and not a developing nation intent on protecting its ‘infant industries’.

The negotiations with the Chinese will be very difficult because the US importer-elite are against the Trump agenda and side with the Beijing ’s formidable export-oriented ruling class.

Moreover, because Wall Street’s banking elite is pleading with Beijing to enter China ’s financial markets, the financial sector is an unwilling and unstable ally to Trump’s pro-industrial policies.

Trump does not oppose US economic imperialist policies abroad.  However, Trump is a market realist who recognizes that military conquest is costly and, in the contemporary world context, a losing economic proposition for the US.  He recognizes that the US must turn from a predominant finance and import economy to a manufacturing and export economy.

PS: I took the picture of James Petras and my wife Aafke Steenhuis in the early 1980s when he was staying a few days at our ship (houseboat) in the river Amstel in Amsterdam.

The end of the antidemocratic European Union?

Europe is entering a shaky period in its history in which almost nothing seems certain anymore. But, as with a future financial crisis, we can be sure that people and nature and buildings and infrastructure and institutions remain, which are the essence of our existence and our communities.

There is much talk about the Europe and the world we live in, but little of it contributes to a good understanding and shows ways to solve our problems. Politicians prefer to defend or attack the existing order and many journalists and social scientists simply echo their opinions (especially of those who defend the existing order). Conformism is widespread in the media, universities, ministries and large corporations.

I like to read descriptions of realities and thought-provoking analyses of them. I also like to read analyses I do not (fully) agree with, and when I agree, I often wonder if there is reason to disagree.

The following analysis is stimulating. It is written by Greek journalist Dimitris Konstantakopoulos. You can read the full article here, End of Regime in Europe!  I highlight some of his thoughts below.

About Brexit and the European Union
The European Union, at least as it stands now and with the policies and the arrogance it is producing, is simply unacceptable not just by British, but by a clear majority of all European citizens. The Maastricht system, institutional incarnation of neoliberalism (and atlanticism), imposed in Western Europe in the wake, and under the enormous impact of the collapse of “Soviet socialism”, and also of the Mitterrand (and the British Left) defeat and capitulation and of the German reunification, as it was executed, proved to be a socially regressive, economically inefficient, politically oligarchic, antidemocratic structure.
The final political blow to the legitimacy of the European Union was inflicted last year [2015], when all the world saw the way Berlin and Brussels crashed Greece, a member of the European Union.
Greeks were too weak to succeed in their rebellion. British were too strong to accept such a Union. It was History, not the Left or the Right, which put European revolt on the order of the day. European Left proved in 2015 too hesitating, too weak, too unwilling to become the leader of the Revolt till the end. A part of the European Right was there to fill the vacuum, at least at that stage. And it did it.
By voting the way they voted, British did the same that did, before them, the citizens of Cyprus, of France, of Netherlands, of Ireland, of Greece, every time they had the opportunity. They rejected massively the policies produced and imposed by the elites, both national and European ones (the two more and more indistinguishable), in spite of the enormous terror and propaganda campaigns to do the opposite.

About today's revolts in Europe
It is not a coincidence, that those revolts are happening mainly in nations which have, more or less, a strong national tradition. Cypriots have done one of the first anti-colonial revolutions after the 2^nd World War, in spite of being a handful of people opposing an Empire. In the administration councils of French multinationals they speak now English, still France remains the country of the Marseillaise and it has a tendency to remember it, every time it feels the need. By the way, the first communist revolution in modern European history, the Paris commune, begun because French bourgeoisie wanted to handle the capital to the Germans. Netherlands is one of the birthplaces of European freedom, the country of Spinoza. Ireland as a country has been defined by the revolt against foreign rule. Greeks have mounted a ferocious resistance against Hitler, when most European nations had compromised with him. They inflicted in 1940-41 the first military defeat in Europe to the Axis and their subsequent resistance has provided to the Soviets and the “General Winter” precious time, while it disturbed seriously Rommel’ s logistics in Africa.

About the collapse of the neoliberal EU
Neoliberals have been able to control nearly all the media and political landscape, intellectuals and the public opinion. They were even capable of erasing mush of History from the program of western universities. You can be a graduated economist nowadays, but ignore completely Keynes or Galbraith...
By controlling everything, they fell victim of their success, believing finally blindly their own propaganda.
In the environment of prosperity of the ’90s, all that seemed extremely strong and successful. But as both the middle classes and more oppressed social strata felt the pressure of the economic crisis and then of the financial crisis of 2008, the material conditions for neoliberal hegemony begun to collapse and with them the political and ideological foundations of the European Union.

About the solution
For various reasons, the simple return of Europe to its nation-states, cannot be the solution. And even if British, French and Germans can as a minimum think and try it, nobody else can seriously believe to such a perspective. This is why, the defense of the nation-states and of what remains of democracy in their context is absolutely necessary, but in the same time is impossible without the emergence of a new project, socio-economic and international, able to replace the collapsing neoliberal Order.

Why did the Troika not resolve the Greek debt problem?

I get tired and angry when I read once again that the Troika of financial policy makers (ECB, Eurogroup, IMF) have not yet resolved the foreign debt problem of Greece (see e.g., http://www.cnbc.com/2017/01/27/greece-must-step-up-reforms-or-risk-losing-imf-support.html).
It's a shame they still dare to bother us with a problem they should have resolved long ago. It's a shame we do not have more capable policy makers including, and especially, given his responsibility as chair of the Eurogroup, Dutch minister of finance Jeroen Dijsselbloem. They should have resolved Greece's foreign debt problem in 2010 when it was discussed by the IMF.
One of the executive directors of the IMF who then (in 2010) saw the Greek debt problem in the right perspective and criticised his colleagues for getting onto an unhealthy and economically unsound path of lending money to Greece presumably to help it resolve its foreign debt problem but, in practice, helping it to increase its foreign debt problem and helping the banks to get payments on loans they had extended to Greece, was Brazilian economist Paulo Nogueira Batista. "The first program of 2010 was presented as a bailout for Greece, but in reality was more a bailout of the private creditors of Greece," observed Nogueira Batista.
On this blog I wrote a post about him, which happens to be one of the most-read posts (and from which I copied the quote of him): Remarkable interview on Greek debt with IMF executive director Paulo Nogueira Batista.

The unthoughtful and shameful policies of western policy makers vis-à-vis a small country like Greece reminds me of the equally shameful and unthoughtful policies they applied to so-called highly indebted poor countries (HIPCs). Once I was asked by the Dutch Ministry of Foreign Affairs to organise a workshop in order to help resolve the HIPCs foreign debt problem and this is what I said in my opening speech:

When I was asked in early summer of 2002 by officials of the Dutch Ministry of Foreign Affairs whether I was willing to organise an international workshop on how debt relief for heavily indebted poor countries (HIPCs) could be made more effective, my first thought was: “Gosh, why did they let this problem drag on for so many years? They should have resolved it long ago!”
In my opening remarks to the workshop in August 2002, I hinted at my spontaneous (but silenced) outcry in somewhat more diplomatic, but still provocative, terms, saying that I hoped the Forum on Debt and Development (FONDAD) would not be asked in three years time to organise yet another workshop on how the HIPC Initiative could be made more effective.
“The Initiative should just achieve what it is meant to do: get rid of the debt problem,” I stressed.
During the coffee break, one of the Ugandan participants came to me and said with an ironic smile “You have been pretty tough with us.”
“No,” I answered, amused, “I wasn’t blaming you so much, but rather the officials in the rich countries.”

You can read my opening speech in this book, Fondad-HIPC-BookComplete HIPC Debt Relief: Myths and Reality, on pages 1-10. It has interesting lessons for how the Greek debt problem should have been resolved instead of letting it drag on and increase.