Another Europhillic post

Against all my predictions, Sunday’s elections in Greece were not an unmitigated disaster. While Europe winced in fretful anticipation, the Greek people handed victory to New Democracy, a centre-right, pro-bail out party.

I’m not going to start hypothesising about what this means for the future of the euro, because I have not got a clue and ‘renegotiation’ is an almost comically vague idea. But let us consider the purely political ramifications of this somewhat unforeseen result.

Domestically, the result shows that Greece does not really want to go for extremism. It rejected the far-left (albeit by a small margin), because the people saw through the empty promises and meaningless rhetoric. Instead they chose the party which they felt was being open and honest with them. They also rejected the far-right, which normally does well in this kind of climate. What does that say about modern politics in times of crisis?

Internationally, Greece gave Europe a thumbs-up. By recognising the need to stay in the euro, the country also effectively reinforced its consent for European integration. They believe that they are stronger within the Union than not, which is probably true. The Greek economy is dependent on European tourism, although leaving the euro may have given the country the options of devaluation. It is improbable that Europeans will want to travel to Greece when they hold it responsible for a financial disaster, so maybe the argument is mute.

However, I’m a natural Europhile and I genuinely believe that Europe will help solve Greece’s problems. An exportation of the German economic model will no doubt raise living standards, although that will obviously take decades and the Mediterranean way of life may be hard to change. But the ring of debt-ridden countries need to change, full stop. Just look at the banks in Spain, or Italy’s bizarre labour laws, and you will see why.

But my real question is this – why does political integration require the economic kind? Now that the euro exists it must be preserved, but most people would probably now agree that it was a flawed idea. Many have now taken this to mean that Europe itself is unworkable and should be avoided like the plague. This simply isn’t true. Taken generally, the EU has done nothing but good – it limits members’ carbon emissions, protects human rights and funds research into drug development, while being a much more efficient implementer of sanctions than the Russia/China dominated UN.

Admittedly, it could do more. While fostering democracy in individual states, it has yet to democratise itself. It has not taken actions against the dodgy regime in Belarus, or managed to improve the state of civil liberties in Turkey – once a potential member. But these problems are not due to complete incompetence. The EU simply hasn’t got enough power. As anethemic as the prospect is to the British right-wing press or the French isolationist instinct, if we want Europe to be successful, we are going to have to allow it to be so.

The Euro, Hollande and a strange British fixation

The euro has been in turmoil, on and off, for two years. We have become accustomed to doom-saying headlines, citing bond yields and sovereign debt, interest rates and double-dip recessions. At the beginning of these multiple crises, Europe was united. ‘Merkozy’ – the unfortunate Merkel-Sarkozy duo – expressed oodles of solidarity. Austerity was imposed – the banks took no notice.
The situation yo-yoed for some time. There were bail-outs in Ireland and Portugal – and multiple ones for Greece. We saw Italy loose it’s elected (if sleazy) government, which – along with Greece’s – was replaced with technocrats. In Spain a right-wing government came to power. Cuts in public spending became the order of the day.

But then things began to change. In Greece and Spain, people began to protest against the austerity programs enforced by Germany in return for cheap money. Anti-Europe sentiment has risen, as the solution has become more and more about integration. In Greece’s recent elections, no party won enough seats to form a government – but those who did well were those who pledged to renegotiate the terms of the bail-out agreement, and a neo-Nazi party did scarily well. A new election is now scheduled for mid-June, and the markets remain jumpy. Many hope that Greeks have now expressed their anger and will vote for pro-bail-out parties, but this is not guaranteed.

Meanwhile, in France Mr Sarkozy lost power to Francois Hollande – a Socialist. He was inaugurated with a promise for growth. He intends to achieve this by instigating a ‘growth pact’ to run alongside the euro-zone’s fiscal compact, comprising of measures to boost output and create jobs. The two agreements, on the face of it, will have to contradict each other. I feel inclined to explain the concept of aggregate demand here, but I’d be terrible at doing so and it would be very dull. Suffice to say, boosting output while keeping one’s fiscal situation on the right path is a tough call. Growth is needed to rectify the deficit, but more spending is needed if we are to grow. I can only wish Mr Hollande luck, especially as Mrs Merkel remains stone-faced and intransigent. With the Merkozy partnership gone, it will indeed be interesting to see what happens. A disagreement between Germany and France, who have so far acted together as Europe’s bank, could be what really ends the era of the single currency.

Along with all the hoo-haing in Europe, we in the UK have been subjected to David Cameron. Let’s ignore the shenanigans about the Levison Enquiry (it really is about time that ended) and the pasty tax. What has really got up my nose recently is the PM’s insistence that the UK is somehow not in Europe. And as ridiculous as that is, it is only symptomatic of a wider feeling prevalent in a majority of the public that ‘we’ do not belong to the Continent. I mean, come on – if we are not European, what in God’s name are we? It is about time that the British accepted that we are not important enough anymore to do without belonging somewhere. The Channel is a paltry fifty-odd miles wide – it hardly constitutes an ocean.

Now I’ve expressed my Europhillic views, I’ll sign off to go and check the euro is still in one piece. I have a feeling that its days are numbered and its impossible to tell if the final moments are indeed upon us or if the politicians have put off the day of reckoning a bit longer.

Happy New Year! 2011 in review

It’s been quite the year. Let me take you back in time and show you how the world changed – mostly for the better.

January and February saw most of Europe glued to its television screens as people in the Arab world joined together in open rebellion against the despots who have ruled the Magreb for decades. At the very beginning of the year we watched first Tunisians and then Egyptians throng the streets of their capitals in huge and unprecedented numbers. We watched in awe. By the 14th January, Tunisia’s President Ben Ali had resigned and he quickly fled to Saudi Arabia. The Arab spring had been born. Within a month Hosni Mubarak, Egypt’s long-serving strongman had suffered the same fate. Millions of people leaped up the ladder to democracy. What I think captivated the West so much was the sheer power of people. We hadn’t seen popular anger erupt like that since the end of the Soviet Union in 1989, long before I was born. We were fascinated by so much change.

As Winter turned to Spring, Japan was hit by an immense earthquake and tsunami – the strongest on record. Supply lines were destroyed and thousands of homes were destroyed when whole villages were washed away. As if that was not enough, it was not long before a new disaster unfolded. The tsunami had critically damaged the Fukushima Dai-ichi nuclear power plant, which soon began to leak radiation. Fears of meltdown and comparisons to Chernobyl resonated. Thousands more people were evacuated and, as other nuclear power-plants were shut-down due to public pressure, northern Japan started to suffer power cuts. Obviously, the disaster was awful for those whose lives were destroyed, but the real tragedy for the wider world might be the political shift away from nuclear power. This is sad, considering well-managed nuclear power production is one of the cleanest and greenest forms of energy. It’s bad name – which it had nearly lost – has now been reinforced by natural disaster and political failure.

In the same month, NATO launched its mission to protect civilians in Libya by creating a no-fly zone. Many warned that the problem was similar to that of Iraq in 2003 and that intervention would lead to the same disasterous consequences, which caused America to take a back-seat. Operations continued throughout the Summer, with NATO strikers disabling Colonel Gaddafi’s military capabilities in a bid to help the rebel fighters. Libya sunk into a deadly civil war.

April was gobbled up by the royal wedding – which rendered BBC News unbearable. Along side such important news the battles in Libya rumbled on. It seemed that the advantage switched sides almost daily – but the deathtoll mounted swiftly and steadily. As anger mounted against Gaddafi, Syria’s President Bashar Assad also saw increasing dissent on his streets. The military were sent in to cities, and have been engaged in running battles with peaceful protesters ever since.

May saw the Liberal Democrats destroyed by a referendum on the Alternative Vote, which also exposed the worst of British political campaigning. It also saw the arrest, after 15 years on the run, of Ratko Mladic – the Bosnian Serb general who was responsible for the Srebrenicia Massacre of 1990 in which 8,000 died. He went to trial in the Hague, raising the possibility of some justice finally being served. Then there was the big one – the death of Osama bin Laden, the mastermind of the 9/11 attacks of 2001. He was killed by US marines in a raid on his compound in a military town in Pakistan. The location of the West’s most wanted man raised some eyebrows and the once forced-cosiness of American-Pakistani relations has completely disappeared, with the US doubting the loyalty of its key ally in the so-called War on Terror. News of the death spread a somewhatd disturbing joy in America and scenes of people partying at Ground Zero raised fears of revenge attacks. Even if the press and politicians mismanaged the event, Osama bin Laden is unlikely to be missed.

The Summer was dominated by a few major stories. Fighting in Libya and Syria continued, as NATO dropped more bombs and Gaddafi looked weaker and weaker. The quick and relatively peaceful ends of Tunisia and Egypt’s regimes seemed from a different age. Closer to home, the phone hacking scandal put an end to Britain’s most-read rag, The News of the World, whose reporters had hacked the voicemail messages of – well – everyone, but things really came to a head when it emerged that they had access the messages of Milly Dowler, a murdered teenager. Public outrage gave the paper’s proprietor, Rupert Murdoch, no choice but to close the paper. It also lead to a review of the relationship between media moguls and politicians, the police’s relationship with journalists, and the standards of the press industry as a whole. The Leviston Inquiry into all this is ongoing. The media will never be the same again.

July and August were stressful months for Northern Europe, which was having a bad time of it anyway (see below). In July a far-right extremist, Anders Behring Brievik, set off a bomb in Oslo, the capital of Norway, before going on the rampage at a youth camp for young members of the Norwegian Labour Party. He killed 77 people. Amongst the horror, grief and anger, another emotion was present – surprise. The ‘War on Terror’ lead by America and Europe has concentrated so much on Islamic jihad that people could not believe that a European country had been attacked by a Christian native. It later emerged that Brievik had been protesting against the adoption of a multicultural society in Norway, and particularly the tolerance of Islam. This shocked the country, which prides itself on its acceptance and peacefulness. August saw violence erupt again, this time when several English cities witnessed mass riots and looting, reminding on lookers of the 1980s. The riots started as a protest in Tottenham, London against the police shooting of Mark Duggan in mysterious circumstances. Anger broke out into violence and the looting started. The police reacted poorly, and with a sense of hopelessness. It seems that people took this as an allowance to break the law, and over the next few days riots erupted all over London, as well as Manchester, Liverpool, Bristol and Birmingham. Although community leaders continued to blame the shooting, most of the rioters were just out to get free stuff and enjoy breaking the law. The Labour Party took the opportunity to do some cuts-bashing – blaming the lack of youth centres and job opportunities. The Tories responded by putting their tough-on-crime hats on, and got down to the business of putting people in prison. The political fall out was almost entertaining, but the violence was not. For four days the authorities had no control of the streets, and communities suffered arson and looting that destroyed homes and businesses. Whatever your political views, no one can disagree that these were sorry days for England.

Over the latter half of the year we were repeatedly shown the uselessness of the European Union as well as the incredible and unnerving power of the financial markets. European leaders repeatedly failed to reach an agreement to sort out the continent’s sovereign debt problems and save the Euro, but did manage to prevent complete collapse. Summit after summit ended in bitter political wrangling. Eventually the EU managed to force out the Greek Prime Minister, whose country’s debt was threatening to bring down the Euro. Many worried that the Union was showing too much control over the domestic politics of its member states, but the markets calmed. Not long after, the crisis claimed the premiership of Silvio Berlusconi, Italy’s maverick Prime Minister. The failings of the Euro had a silver lining after all. Both countries now have technocratic governments which are working to reduce their deficits. Although this state of affairs is democratically questionable, the markets seem a little happier. A deal to write-down some of Greece’s debt has also been reached, finally. However, the Euro is not safe. Talk of increasing fiscal unity and even a ‘two-speed’ Europe is both pleasing to the markets and terrifying to politicians. The Euro will (probably) survive 2012, but whether it is recognisable in a year’s time is anybody’s guess.

In Autumn the Arab spring was renewed. After the fall of Tripoli (Libya’s capital) into rebel control in August, the country was nearly free. However, Gadaffi loyalists continued to put up a bloody fight, especially from his stronghold of Bani Walid and his hometown of Sirte. It became clear that, to get anything resembling peace, Gadaffi had to be caught. Questions bounced around the streets of Benghazi and Tripoli: would he be found? would he be tried in Libya or at the Hague? was he even in the country. It was widely known that members of his family had fled into neighbouring Nigera, but no one knew if he had been among  them. However, in late October these questions proved futile. Sirte and Bani Walid fell, and Gadaffi was found by rebels hidng in a gutter in his hometown. He was killed in the chaos of his arrest (according to the rebels, although supporters say he was shot on purpose). The political arm of the rebel movement, the National Transitional Council (NTC) now had full control of the country. There is now a long road ahead – first to reconciliation and then to democracy. This may be harder for Libya than for other Arab countries, as it is deeply divided along tribal lines and because the civil war has brought a lot of guns onto the streets. However, the dictator is dead, and that is no bad thing. In Syria, on the other hand, things are still very grim. The army is still fighting with defiant protesters and the Assad regime is showing no intention of relaxing its grip. Thousands have been killed, with tens of thousands more arrested. As international sanctions begin to bite and the violence gets ever worse, it looks as if Syria is heading towards civil war. Because it is such a big regional power, such a conflict will have untold consequences. However, the Arab spring has also seen some successes recently. Tunisia held its first elections in four decades, which were said to be free and fair by international observers. The event passed without violence and all parties accepted the results. They will now begin to draft a constitution. The West will take heart that although an Islamic party secured the most votes, it is of a mild nature and did not win a majority. It has pledged to work with secular parties. Democracy in the Middle East does work.

2011 also saw the end of both American and Brittish military action in Iraq, nine years after the bombing of Baghdad and the end of the Saddam Hussein dictatorship. Since then, Iraq has been battered by sectarian violence, which the coalition troops have failed to stop. However, Iraq is now more stable than it has been since the invasion, so in some ways the mission has been a success. With the end of Labour governance in the UK, questions about the ethics of the Iraq war have become muted. One thing is clear, however, the Iraqis – for all the problems they face – are glad to see the end of foreign occupation. Politics in Iraq is still fractious. As the last US troops crossed the border into Kuwait, the main Shia faction pulled out of Parliament, leaving millions of Iraqis unrepresented and destabilising the government. A few days later, the Prime Minister Nouri al-Maliki issued an arrest warrant on charges of terrorism for the Vice President, Tariq al-Hushemi, after he declared that bomb attacks on Baghdad were so organised that they must have been carried out by the government. Mr al-Maliki is a Shia, Mr Hushemi is a Sunni.

Many, many other events have shaped 2011 – from the start of the Republican nomination race in America, to the creation of South Sudan, to the threatening of Putin’s power in Russia, and finally the death of Kim Jong-il. These events will be changing the world for a long time – stay tuned for my predictions for 2012. Happy New Year.

Arrivederci Berlusconi!

The old elite of European politics continues to self-implode (which may be no bad thing), as the Euro-crises blunders its way into November. I have not written about any of this before because, quite honestly, it’s boring and I don’t really understand it anyway. But when pressure from the EU fells two national leaders in a week, I have to say something, don’t I?

Let’s deal with Greece quickly – everyone knows the deal here; we’ve been hearing about it for months. But in case you’ve just returned from the Amazon rain forest: Greece has run out of money with which to pay its vast debts because the tax system is appalling and interest rates are sky high. Therefore, to prevent a nasty default that could bring down the Euro (maybe), the Euro-zone has been bailing the country out with sums of money that neither they nor we understand. Simple? No, the Euro-zone has taken this opportunity to force Greece to reform fiscally. The problem is that the Greeks don’t want to reform in the ways that they are being told to, so every loan deal takes an age to agree and then does not work. Great. By mid-October, however, we thought we’d had a breakthrough. A package of measures was agreed at the Euro-zone summit in Cannes that looked like it could finally save Greece and protect the Euro. Phew – even the markets (whoever they are, no one really knows) relaxed. And then, all hell broke loose. The then-Prime Minister of Greece, George Papandreou, called a referendum on whether or not to adopt the measures. Stunned silence resonated.
This little surprise may not have been as crazy as it appeared. The Greek people had been protesting all summer about EU-enforced austerity measures and Mr Papandreou must have known that harsher ones were not going to go down well. By asking the people to go to the polls, he was also making them accept what had to be done. This would have made the implementation of the measures much easier. But the Euro-zone and the markets did not see it that way. Panic resumed and reached such a pitch that Mr Papandreou had to cancel his referendum and not long after, having lost all credibility, resign his post. Over this weekend, the Greeks have been working to form a coalition government to help stabilise the country. During this palaver, the Euro-zone finally realised that a default, although by no means favourable, would not constitute Armageddon. Maybe this political mess had a silver lining after all?

When it began to be clear that Mr Papandreou would go and the austerity measures passed, the attention of the elusive market turned to Italy. Italy is bigger, more important to the Euro and more politically central to the EU than Greece – and therefore matters more. Italy could not default without bringing down the entire Euro (Angela Merkel also helpfully announced that a collapse of the single currency would soon lead to a European war, which was not really a necessary – or true – statement if you ask me). As panic spread across the Adriatic, Italy’s bond yields crossed the 7% threshold that had marked the beginning of bailouts for Ireland, Portugal and Greece. The problem, however, is that Italy is too big to be bailed out. There is not enough money. Full stop. And therefore Italy’s only option is to shrink its debts, or at least bring down its interest payments.
That is what Silvio Berlusconi, the Italian Prime Minister, tried to do. He tried again to get his Parliament to pass austerity measures, obviously smelling his own blood. When rumours circulated  that he was going to resign, the yeilds on Italien bonds fell, such was the global view of Mr Berlusconi’s leadership abilities. He clung on for a while until Thursday, when he tendered his conditional resignation to the President Giorgio Napolitano. This may, in fact, have been the best thing he ever did; Parliament was so desperate to get rid of him that they complied with his conditions and passed the austerity measures in record time. What a relief. Only now, there was some uncertainty over whether Berlusconi would actually go.
But go he did. Last night he headed to the Presidential Palace in Rome and formally resigned. The Berlusconi era, so often characterised by sex and sleaze, is over. Italians will be partying tonight.