Jan 28 2015

The End of Austerity in Europe? 

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By Max Hänska

After a spectacular swing to the left, away from a political establishment that ruled the country uninterrupted for decades, Greece’s election signals the changed mood that is taking hold of Europe. Austerity has failed. What economists have been saying all along, has now been loudly affirmed by the electorate.

I take it as a given that Greek debt is unsustainable in the long run, and that austerity measures have precipitated a spiral of economic contractions that have aggravated economic woes—this much, at least, should be uncontroversial. But identifying the problem is the easy part. Finding a workable solution is the hard problem. In finding a solution Europe faces an economic and a political challenge.

The economic arithmetic

Greece rightly wants to get a reprieve from cuts that have battered the country for close to half a decade. The question is how to fund additional spending?

Greece is running a small primary surplus  (before servicing debt), so in theory it could decide to default on its loans (though the government has declared it will not default), strengthen its tax base by fighting tax evasion and direct additional revenue towards spending, instead of servicing debt.

However, reneging on its obligations would probably also force the ECB to retract its liquidity line to Greek banks—which have been drawing heavily on the ECB to remain liquid as capital flight has remained high. Disrupt this liquidity line, and Greece will have a banking crisis on its hand. To raise the money to shore up its banks without external funds (it is not clear that this would even be possible), it would have to cut public spending even further than it has already done, in turn suffocating the economy and reducing its tax base. A banking crisis would probably precipitate more cash-in-hand transactions further decreasing declared income, and thus tax revenue.

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Jan 26 2015

Greek elections 2015: a short overview

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By Vassilis Paipais

First reactions after such ambiguous and hotly disputed events always hide considerable dangers and possible errors of judgement. Nevertheless, some analysis has to be attempted bearing in mind that many unknowns remain to be seen and many riddles to be imagessolved. The Greek elections are already heralded across Europe as a watershed signalling consequences of enormous proportions for better or worse. The truth usually lies somewhere in the middle. Three things can be said with certainty.

First, what has to be granted unambiguously is that, despite the loss of the outright majority in parliament, this is a landslide victory for Syriza which managed to capitalise on the people’s frustration and anger after five stagnant years of brutal austerity. It is not a coincident that electoral support for Syriza cut across the dividing Left-Right fault lines as the Greek population experienced the troika-backed programme as a form of collective punishment. Syriza is now confronted with the challenges of the next day. ‘Re-negotiating’ a new package deal may prove a lot more dangerous than what the party’s masterminds might have initially expected. Even if some breathing space is granted to the new government and a new less burdensome agreement is eventually struck, some version of an austerity programme will have to be put in place possibly renamed as a ‘national reconstruction plan’. If Greece is going to benefit from Draghi’s huge QE scheme, the new government will have to call its revolutionary dreams off for a later stage.

However, if this new reconstructive plan does not combat widespread corruption, tax evasion and state bureaucracy the deadlocks that led to the collapse of the Samaras government will soon be reproduced. Syriza leaders seem to understand that the only way Europe will listen is if they are prepared to unravel the oligarchic structure of the Greek economy and bring down the domestic kleptocracy. This is a herculean task and doubts are raised about their ability, or even sincerity, to dismantle the clientelistic networks that hold the country captive and stifle its economic potential. After all, Syriza was quickly embraced by ex-members and voters of the totally discredited socialist party (Pasok) and many fear a repeat of the hollow hopes engendered by the rise to power of Andreas Papandreou in 1981, a figure Alexis Tsipras is often compared to. Despite the possible setbacks and doubts, however, the people’s feeling is that the country is making a fresh start. Yet, if this feeling is not to be quickly turned into a nightmare, Syriza has to rapidly show signs that it can achieve what Samaras failed to deliver, i.e. put the country on the track of sustainable growth by reforming the state and attracting investment. In other words, success for Syriza is a two-side story: negotiate a new debt restructuring deal that will inevitably include some austerity measures in order to secure the country’s inclusion in the QE programme and launch a large-scale plan of internal reform. Both tough to achieve and interrelated as one cannot be had without the other while time is extremely limited. A mind-blowing challenge even for experienced politicians.

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Jan 26 2015

Syriza’s win and the Greek elections: many shades of grey

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By Maria Kyriakidou

Reading the press headlines all over Europe today, one gets the impression of a schizophrenic Europe, with images of glory and gloom about what Syriza’s win means for the future of the Eurozone being painted by different newspapers. On the one hand, the win of the left party is constructed as the win of hope over strict austerity and its grave consequences, and the answer of the long-suffering Greeks to the policies of Brussels. This answer gives hope to the Left around Europe, from Spain’s Podemos, who have closely supported Tsipras, to UK’s Labour Party. On the other hand, the elite press highlights the risk of a rekindling of the crisis and the possibility of a ‘Grexit’, if Tsipras sticks to his position of renegotiating the terms of the Greek bailout and getting rid of the Troika.

The image and the sentiment in Greece is much more complex than these two opposing indexnarratives. Syriza’s win is indeed a historic moment for the country, which is to be governed by a party of the radical left for the first time in its history. Another important reason to celebrate is that the two parties that have monopolised power over the last thirty years through a system of corruption, clientelism and nepotism are for the first time left out of government, with PASOK receiving a mere 4,7 % of the votes, and facing oblivion. Illustrative of this tremendous change is the fact that for the first time in the last forty years a member of the Papandreou family is not in the Parliament. The last one was George Papandreou, the PASOK Prime Minister who signed the memorandum for the first Greek bailout in 2010, and participated in the last elections with his own new party, the Movement of Democratic Socialists, which failed to enter the parliament.

But apart from the supporters of Syriza, the majority of Greek people, even those who did vote for the party, do not probably feel like celebrating today. The result of the election is not only a huge win for the Left but also the reflection of the frustration and disenchantment of the Greek public with the practices and failures of the political system over the last forty years. Tsipras has not necessarily convinced the majority of Greeks that he is the right answer for the future of the country; but the rest of the parties have convinced them that they are not. This does not mean that Syriza’s win is any less significant; but it implies that the political climate in Greece is not so much of a turn towards the Left as a turn away from the politics of the Metapolitefsi and the grave situation it has led the country into.

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Jan 22 2015

E-residency – the beginning of a new era or the end of citizenship as we know it?

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By Anne Kaun & Signe Opermann

Estonia, one of the smallest EU member states in the North-Eastern part of the Union might not attract new residents and investors with its outstanding nature, weather conditions or natural resources. Who would like to live in a country where summer means “three months of bad weather for skiing”? As one of the former Soviet satellite states it had to find another strategy to launch itself as an attractive and unique country on a global scale. Early on technology was identified as a solution to all kinds of challenges ranging from democratization to marketization and attracting global businesses.

Extending this focus on innovation and technology, Estonia launched a new initiative: since Tallinna_kõrghooned_udusDecember 1, 2014 people from all-over the world can apply for the first ever e-residency in Estonia. The first e-Estonian was with the energy editor of the Economist Edward Lucas a carefully selected promoter of the new, merely economically driven campaign. Launched by the Estonian Ministry of Economics and Communication the e-residency campaign spends between 1.2 Million Euros in the first one and half years to attract 17.000 e-residents and through them about 5.000 enterprises in the first three years. The Ministry is projecting that there will be 10 million e-Residents by 2025. The English language campaign aims largely at wealthy investors by simplifying administrative procedures and making e-services for e-residents accessible, e.g. digital authentication and the digital signature of documents. One supportive commentator identified as the major goal to become like Switzerland, but as an updated version in terms of technological innovation. And the e-residency team invites us to become part of this innovative endeavour:

Estonia is launching e-Residency in order to make everyday matters for you and doing business with us more efficient and hassle-free. We hope to make our economy and community also bigger in the process, at least in the digital sphere. We are excited to have you join the most digital society in the world, e-Estonia! (from newsletter update)

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Jan 20 2015

Europe’s Future and Jihad

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By Roberto Orsi

800px-1595_Europa_MercatorRecent events in Paris have been commented upon by political leaders and public intellectuals alike with the recurring argument that France will emerge stronger from this incident. Countless other commentators have repeated that the ideas of an open, democratic, liberal, rule-of-law-based, multicultural, sexually-liberated, “free” society, with open borders, freedom of speech, of religion, of circulation, what can be termed “the European way”, will prevail. The standard narrative of the events in Paris has insisted on their nature of a crime perpetrated by a puny group of alienated minds, who are waging war against “Western values” and who will certainly be defeated. That may be so.

However, looking at it from a broader perspective, a much less reassuring picture of what is taking place starts to take form, alongside with a series of admittedly disturbing and regrettable questions, born out of a sudden radical doubt. Considering the trajectory connecting the 2004 and 2005 bombings in Madrid and London a decade ago to the unfolding scenario of these days and projecting it towards the future, it is worth investigating whether the precise opposite of what European leaders claim is occurring. What if Europe finds itself on a completely wrong track?

A rising sense that the continent finds itself in a systemic political crisis of historical proportions can be felt everywhere. Political leaders and intellectuals are panicking to construct a version and interpretation of developments in the Old Continent, one which may preserve the integrity of the “European way” in the face on the one hand of exponentially growing signs of deterioration and decay, on the other, of rising criticisms, which pre-date the recent massacres, and whose symptoms are ubiquitous. Among these, certainly the most prominent appear to be the rise of “populist”, parties such as UKIP, Front National, and Alternative für Deutschland, the spread of the PEGIDA demonstrations, the heated “immigration debates” in every country. Many are trying to argue that these developments constitute the regurgitation of some uncomfortable past, or are the product of sheer ignorance or prejudice. Much more likely, as even some liberal and radical commentators have started to accept, they constitute the reaction to some genuine and severe political problem, such as the rapid spread of degradation, the worsening of economic conditions, of territorial control by the authorities, the place of minorities communities, of past, present and future demographic trends (including migrations) in Europe. None of these will go away with some “debate” or “demonstration”, but it will certainly continue to grow, and even escalate, in the foreseeable future. It does not seem to be too far-fetched to argue at this point that European politics (and perhaps world politics with a different focus), will be dominated by demographic questions, particularly concerning the rapidly increasing ethnic-religious fragmentation of European countries, for many decades to come, particularly considering their economic and security implications.

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Jan 14 2015

Debt relief for Greece is necessary to avoid a crisis in the Eurozone

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By Paul De Grauwe

The Greek debt crisis that erupted in 2010 is back, and again threatens the stability of the Eurozone. That crisis was the result of two factors. First, an unbridled spending drift of both the private and the public sectors in Greece during the boom years of 2000-2010, which led to unsustainable large levels of debt. Second, reckless lending to Greece by Northern Eurozone banks. At no time the Northern bankers asked themselves the question of whether the Greeks would repay the loans.

The European Union chose to resolve the debt crisis by punishing the Greeks and by indexsaving the Northern banks. A punitive austerity programme was imposed on Greece, whose effects are now visible everywhere in this country. A decline in GDP of close to 25 per cent since 2010, a rise in unemployment to a level we have not seen since the 1930s, and impoverishment of large parts of the Greek population.

The banks went largely unpunished. True there was a debt restructuring of the Greek debt held by private investors. Some banks paid the price of excessive credit granted to Greece, but most banks escaped this fate by dumping their Greek claims onto the public sector. Those claims are now in the hands of national governments and the European Central Bank. And these want to have their money back whatever the consequences may be for the Greek people and the Greek political system.

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Jan 9 2015

The challenge of responding to extreme political views: Germany struggles to address Pegida’s anti-Islam protests

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By Stefan Bauchowitz

Unlike European countries in times of the financial crisis, Germany’s economic success meant that it largely avoided debates on closing off countries against a “tide of immigrants”, and populism was largely confined to opposition to bailouts in the Eurozone. Pegida’s success is not an indication that right wing extremism in Germany is on the rise, however, it shows that right-wing extremist ideas have entered the conservative mainstream. Large parts of the population remain economically and politically marginalised and there is significant potential for right-wing populism in Germany. The political response to the movement’s success has been inadequate: for fear of alienating voters many are tempted to make Pegida’s demands their own rather than addressing the causes of discontent and disaffection, with the pernicious consequence of legitimising xenophobia.

Angela Merkel’s New Year’s address marked a departure from her usual hesitant style of indexpolitics. The German chancellor condemned Pegida, a populist movement whose name roughly translates as Patriotic Europeans against the Islamisation of the Occident.

Since October, Pegida has been holding weekly anti-immigrant rallies, the most recent of which, in Dresden, has attracted 18,000 protesters. Pegida’s leaders are keen to appear as respectable citizens (a tough sell: in 1998 the movement’s chief rabble-rouser, Lutz Bachmann was convicted for burglary and fled to South Africa to avoid a three-and-a-half year prison sentence) and disavow any links to right-wing extremist ideology. Despite the movement’s name, its aims are somewhat diffuse and given their dissatisfaction with established parties and skepticism of the media Pegida’s protagonists refuse to enter into dialogue with outsiders. A 19-point document serves as an insurance policy and outlines the movement’s demands ranging from a more efficient asylum policy and the deportation of criminal asylum-seekers to opposition towards political correctness, the use of gender sensitive language and the establishment of sharia courts in Germany. The sentiments behind those demands and of those who attend the rallies are more overtly xenophobic than its “policy document” would suggest.

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Jan 8 2015

Pegida shouldn’t be dismissed that easily

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By Alessio Colonnelli

President Joachim Gauck and PM Angela Merkel have a point in cautioning the German public that Pegida (a German acronym standing for Patriotic Europeans Against the Islamization of the West) could normalize racism. Back in December Gauck warned about Pegida and similar xenophobic movements by arguing that “extremists and relating currents that are unhelpful” should get less attention.

Merkel has voiced similar concerns. In her New Year’s speech, she openly rejected the motives of Pegida’s organizers: by using mottos like ‘We are the people’, such activists imply that some citizens don’t belong because of their skin colour or their religion. Gauck’s and Merkel’s warnings are not politically motivated. Their plea is genuine, beyond any 606x340_292272electoral calculation. Gauck has no party membership. CDU leader Merkel also doesn’t have any interest in attacking Pegida for fear of losing votes. German political scientists and sociologists have found that those joining Pegida’s rallies tend to be from right-wing to far-right stances with many from the centre-right bourgeoisie. Sociologist Johannes Kiess from Leipzig University, whose research focuses on far-right and extremist political movements, told eastern German public radio MRD that “Pegida is reminiscent of several other anti-asylum demonstrations [...]. [The type of protesters range] from average citizens to neo-Nazis, everything is possible. [...] In Dresden people have demonstrated against immigration and the asylum seekers’ issue has also played a role in the rallies.”

Gauck and Merkel’s message seems a genuine effort to make citizens aware of the motives behind Pegida. A slow shift towards unreasonable, xenophobic attitudes by those who’d be otherwise politically moderate is easy to foreshadow. Pegida promoters say they don’t wish their movement to be linked to far-right extremists or be portrayed as racist. Yet, as the MDR journalist Christin Bohmann pointed out in her interview with Dr Kiess, well-known neo-Nazis have been seen taking part in Pegida’s parades. How likely is potential radicalisation to spread in this case? The sociologist’s reply is: “Crossing points are open in either directions. However, even though the organizers and participants do not see themselves as extremists, their views are nevertheless rather extreme, i.e. anti-democratic and derogatory against certain minorities.”

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Jan 5 2015

‘The Future has just started’: The Greek National Elections and the end of Austerity in Europe

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By Marina Prentoulis

After three voting rounds, the Greek coalition government has failed to secure the support of 180 MPs in order to appoint a new president. According to the constitution, the Greek parliament was dissolved on the 31st of December and national elections have to take place within a month, estimated for the 25th January.

Greek-parliament-takis-kolokotronis-sxc.hu_-e1339963084152-604x272Immediately after the results, the Greek media turned their attention to the negative reaction of the markets. Supported by the statements of conservative officials, the Greek media continue their blackmailing campaign, in order to avoid an electoral win for the deep anti -austerity sentiment amongst Greek society. Their message is clear: the economy will collapse if SYRIZA (the Radical Left Coalition leading the polls) comes to power. A very striking statement from the conservative PM Antonis Samaras exemplifies how those supporting the austerity policies and the pauperization of the Greek people understand the relationship between economy and democracy. As the PM said: “We did everything we could to avoid the elections”. In other words, in the name of economic stability (which translates to the domination of neoliberal policies in Europe) the right of the people of Europe to decide their future has to be “cancelled”.

The significance of the forthcoming Greek election challenges exactly the logic of this sinister, irrational and yet widely accepted link between democracy and neo-liberalism.  It is astonishing how neo-liberalism with a history of less than fifty years has managed to persuade so many people that it is the only alternative. It is now time to put an end to its dominance. It starts from Greece but it has to become our common struggle across Europe. The arrogance of the Greek conservative official who announced today that “there is no government in Europe which has similar positions as SYRIZA” needs to be confronted by all socialist, social-democratic and leftish parties of Europe. Only then we will be able to start building a Peoples’ Europe.

This article originally appeared on the blog of the University of East Anglia Eastminster.

Note: This article gives the views of the authors, and not the position of the Euro Crisis in the Press blog, nor of the London School of Economics.


Dr. Marina Prentoulis is a Senior Lecturer in Media and Politics at the University of East Anglia.

 

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Dec 23 2014

Financing of the Media in South East Europe

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By Marko Milosavljević

Photo: Marko Milosavljević

Photo: Marko Milosavljević

When looking at the market potential of a particular market, we usually analyse a number of factors: size of the nation market; GDP; advertising market and shares and trends within specific segments, such as TV, digital, print; size/reach of the national language and emigration; equipment in terms of high-speed internet penetration and other infrastructure aspects that influence consumption patterns and potential.

Fragmentation and pauperisation

Unfortunately, in all of these aspects the countries in SEE don’t show much potential. Although the term “Balkanization” has a historical and political dimension, in the case of the media it provides the exact definition of the key issue in the region: small fragmented markets that don’t offer the conditions for economically strong and viable media that could use the advantages of, for example, economies of scale, and enable media companies to offer high-quality products. Continue reading

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