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Weaponisation of War Memories and Anti-German Sentiment

By Roberto Orsi

In the aftermath of the tumultuous events in Brussels and Athens, public opinions in Europe and elsewhere have been rapidly polarised, to an extent perhaps not seen in decades. The dramatic deterioration of Greek finances (both public and private) with the consequent set of social and political impacts, have produced the mobilisation of very strong language and imageries from all sides. Many commentators, some as authoritative and diverse as Jürgen Habermas, or Slavoj Žižek, have explicitly sounded the alarm that this may well be the end of the European project, preluding a return of inter-state rivalries and possibly wars. The handling of the Greek crisis has allegedly shown both within the EU as an organisation, as well as in the mindset and behaviour of the European political leaders, a lack of concern for “core values” such as democracy and solidarity.

i1This polarisation owes much to the uncomfortable landscape of political communication in Europe, dominated as it is, for reasons which escape the scope of this piece, by slogans built on gross oversimplifications and emotional appeals to knee-jerk reactions. The Greek government has been particularly active on this front by using the escamotage of a snap referendum to present its course of action and its position as the “democratic” one. It does not actually matter what is meant here by democracy in analytical terms. The point is that, in a binary opposition (Germany vs. Greece), if one side occupies the ground of “democracy”, i.e. of something practically all Europeans have been raised to consider as a synonym of “absolute good”, the other must rest on the ground of “absolute evil”. Any attempt at showing that the matter is more complicated than this is doomed to fail considering that it would require a somewhat more sophisticated form of communication, currently restricted to a certainly influential, nevertheless rather small part of the population and the electorate. The same is true of “solidarity”, whose alleged counterpart, the dreaded austerity, cannot be but the manifestation of sheer sadism, greed and other moral evils, incarnated by essentially degenerated individuals. More nuanced analyses of the Greek economic and political situation, often with remarkable long-term historical insights, are plenty, but they can hardly scratch the thick skin of the Manichean behemot. Continue reading “Weaponisation of War Memories and Anti-German Sentiment”

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The real sins of Varoufakis: why Greece is being punished for refusing to play by the Eurogroup’s rules

By Christopher Bickerton

Talks continued through the night in Brussels, with Eurozone leaders eventually reaching an agreement on Greece. While negotiations were always likely to be tough, the original discussions between Greece and its creditors did not break down because of an unbridgeable ideological gap, but instead reflected a reaction to the negotiating tactics pursued by the Greek government under finance minister Yanis Varoufakis. By breaching the etiquette of the Eurogroup’s decision-making process, Varoufakis generated entrenched opposition among Greece’s creditors for which the country is now being punished.

Why did the original negotiations between Greece and its creditors collapse, to a point of virtual no return, when both sides had repeatedly said they want the same thing: for Greece to stay in the euro?

The conventional wisdom is that the policy gap between the two sides was simply too great. Elected in January, the Syriza-led government sought to reverse years of austerity under the slogan of no more bailouts. Its flamboyant finance minister, Yanis Varoufakis (who has since stood down), spoke of an economic transformation in Greece, taking on the long-standing power of the country’s oligarchs. His renegotiation with the Troika was part of this broader agenda.

Yanis Varoufakis with Finland's Finance Minister Alexander Stubb, Credit: EU Council Eurozone (CC-BY-ND-NC-SA-3.0)
Yanis Varoufakis with Finland’s Finance Minister Alexander Stubb, Credit: EU Council Eurozone (CC-BY-ND-NC-SA-3.0)

Facing Greece was a German-led bloc committed to more austerity and structural reforms. Within this bloc were countries – Ireland, Portugal – that had turned to the EU for their own bailouts and had undertaken the cuts and reforms asked of them. They were implacable in their belief that Greece should do the same.

But this view cannot explain why both sides came as close as they did. The often-forgotten truth of the last few weeks is that Greece and the Troika very nearly secured a deal. From the outset, the policy differences between them were minor, largely because of Syriza’s moderate demands.

Continue reading “The real sins of Varoufakis: why Greece is being punished for refusing to play by the Eurogroup’s rules”

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Are Italian Public Debt Forecasts Too Optimistic?

By Giuseppe Bianchimani

Italy, a history of large public debt

By Maryb60 [CC BY-SA 3.0], via Wikimedia Commons
By Maryb60 [CC BY-SA 3.0], via Wikimedia Commons
Italy has the third largest stock of public debt in the world, the second in the euro zone next to Greece and the highest debt service ratio in the G7.

The last point is particularly important to understand the difficulties of managing Italian public debt. Japan holds roughly twice of the Italian public debt, but it spends less than one percent of GDP to service its public debt while Italy spends 5.4 percent of GDP.

The burden of interest payments and slow growth have heavily contributed to enhancing the weight of debt, developing a dangerous vicious circle.

However, there are several optimistic forecasts on debt dynamics (IMF, European Commission, OECD). This is the result of the deep efforts which have occurred in recent years, in particular since 2012. Continue reading “Are Italian Public Debt Forecasts Too Optimistic?”

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Eurosceptics at a Junction: Antagonising the EU for the Sake of it is Risky

By Alessio Colonnelli

By Woodennature (Own work) [CC BY 3.0], via Wikimedia Commons
By Woodennature (Own work) [CC BY 3.0], via Wikimedia Commons
All right-wing parties seem to dabble in anti-EU rhetoric more or less radically: the EU weakens the prerogatives of their nation-states. Germany’s Christian Democratic Union is a conspicuous exception; it sharply antagonises the further-to-the-right Alternative for Germany, an anti-Eurozone outfit enjoying increasing support. Progressive parties are not immune to all this.

EU governance is indeed perceived as intricate, unnecessarily cumbersome and therefore lacking legitimacy. The UK Independence party (UKIP), Marine Le Pen’s National Front, Italy’s Northern League and Five Star Movement, plus several other parties, try their best to turn Europeans’ embitterment even more sour. Continue reading “Eurosceptics at a Junction: Antagonising the EU for the Sake of it is Risky”

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The Greek Government’s programme: an act of defiance or a call for compromise?

By Eleftherios Antonopoulos & Konstantinos Kostagiannis

International media described the Greek prime minister’s address to the parliament on Sunday as “defiant” (BBC and Reuters for example). Yet, what emerged from the speech was a mildly coherent attempt to bridge the internal policy preferences with the positions of European creditors. The speech lowered reform expectations while at the same time refrained from challenging fundamentally the structure of Greece’s model of capitalism. In light of this we examine how progressive Greek government priorities can be deemed and what their underlying political purpose is, especially ahead of Wednesday’s Eurogroup meeting.

An uneasy alliance? The SYRIZA – ANEL government agenda:

Tsipras

The newly elected Greek government is based on the alliance between left-wing SYRIZA and nationalist, europhobic ANEL. As such, the whole endeavor is founded upon maintaining the austerity – antiausterity dichotomy, which forms the only solid common ideological ground between the two. Some analysts believe this alliance is possible based on the populist characteristics of the two partners (quoting a possible link between SYRIZA and Laclau) while others hold mainstream forces to account for not preventing such outcomes.

Given the importance of opposition to austerity for both government partners as well as the dire economic situation of Greece in the past few years, it is of little surprise that this issue comprises most of the speech. The reading of the domestic results of the crisis is one of the few parts of the speech that concentrates on evidence: 1/4 of the GDP lost, 1.5 million unemployed, and the unsustainable levels of debt at 180% of GDP. In its discussion of EU rules, the speech adopts the mantra that “austerity is not a founding principle of the EU”, selectively interpreting Art. 120 and 126 TFEU. Besides, all hopes for creating domestic employment are directed to current EU interventions such as the Juncker package and other EU structural investments. Under this light, Greece’s fiscal adjustment program is viewed as lacking “output legitimacy” although this is of second order to its perceived lack of input legitimacy by the electorate.

Continue reading “The Greek Government’s programme: an act of defiance or a call for compromise?”

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Crisis Discourses in Europe: Media EU-phemisms and Alternative Narratives

By Tamsin Murray-Leach

It would be catastrophising to claim that euroscepticism won the European elections earlier this year – but it certainly staked a claim. Two years ago, we predicted the capturing of Europe by populist parties in our study of progressive activists in Europe, The ‘Bubbling Up’ of Subterranean Politics in Europe (Kaldor and Selchow 2012). What that report found was that Europe, as a political space, was invisible to the majority of these activists; at worst, it was considered part of the problem in the current moment of crisis.

Pablo Iglesias (Podemos 23-05-2014)In a recent background paper, we set out to explore the dominant discourses around the euro crisis to understand why there appears to be such a mismatch between the concerns of these actors and the way in which the crisis is framed in the dominant discourse.

What we found confirmed what was suggested by our initial report: that these (primarily mediatised) narratives have (mis) represented the crisis as a predominantly economic one, rather than addressing the political concerns of these subterranean actors. It is a framing that discursively rules out alternatives to the prominent executive actors and their prescribed solutions, and which maintains political Europe as a distant ‘other’ to the majority of Europeans. Continue reading “Crisis Discourses in Europe: Media EU-phemisms and Alternative Narratives”

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Beppe Grillo’s Bitter Moment of Truth

By Roberto Orsi

Beppe Grillo 1 The European election results in Italy have been rather surprising. In the context of today’s three-party political landscape (the centre-left Democratic Party, Beppe Grillo’s Five Star Movement, and Berlusconi’s Forza Italia), most pre-vote polls indicated a rise of Grillo’s movement, closing in on current PM Matteo Renzi’s Democratic Party, and with Berlusconi’s faction below 20%. Instead, results have been surprisingly in favour of the ruling establishment, while Grillo has suffered a defeat which, while not so substantial in terms of sheer numbers, entails a deep political cost. Grillo himself appeared confident that his movement might become the first party in Italy. However, the Democratic Party reached 40.8%, against 21.6% for the Five Star Movement, and a meagre 16.8% for Berlusconi. The Northern League has been recovering from a series of scandals and electoral defeats, scoring 6.2% at national level.

There are several lessons which can be drawn from these results. The first one is the slow but constant decline of Berlusconi’s party and his personal power. Since Berlusconi stepped down as PM in the dramatic days of a financial tempest in November 2011, apparently under unprecedented international pressures, he has been convicted for fiscal evasion, deprived of his passport and expelled from the Parliament. Continue reading “Beppe Grillo’s Bitter Moment of Truth”

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A Legitimization of the Italian Government More Than a Vote for Europe

By Monica Poletti

The overwhelming victory of the Democratic Party

RenziMatteo conferenza 2012 Elections in Italy rarely fail to surprise. The victory at the 2014 EP elections of the Prime Minister Matteo Renzi and his centre-left, pro-European Democratic Party (PD) came as a shock due to the size of the victory. Two weeks before the elections polls average (Electio2014) indicated that preferences for the centre-left party were at 33.6%, a large percentage that suggested the PD had become the first party of the country. Yet, the PD was closely followed by the Five Star Movement (M5S), the anti-establishment and anti-Euro party (self-labelled as movement) led by former comedian Beppe Grillo with a 24.1% share. Given the margin of uncertainty in polls predictions and the fact that at previous national elections M5S preferences were profoundly underestimated, a close battle between Renzi and Grillo was envisaged for Election Day. Go Italy (FI) party, led by Silvio Berlusconi, was instead expected to follow as the third party with an unprecedentedly low 18.3% share, following the decline of their leader. Yet, the surprise arrived with a sound victory for Renzi’s party with 40.8% of votes, almost double the votes achieved by M5S who “only” obtained a 21.1% share. Furthermore, Berlusconi’s FI lost even more share than expected, gaining just 16.8% of votes, their worst result ever. Whereas the New Centre-Right (NCD), a detached part of Berlusconi’s former People of Freedom party (PDL), currently in government with the PD, obtained only 4.4% of the votes.

A victory for the PD with more than 40% of the votes not only is a victory of the PD over the M5S, it is a victory with a percentage that was not even conceivable for a party coming from the left tradition. Parties of the left tradition could not aspire at winning more than 33% of the electorate (1 voter over 3), if very successful, because they were intentionally not trying to attract voters coming from other traditions. After great changes within the PD following the “earthquake” national elections of 2013, however, the young leader Renzi, so-called “rottamatore” (demolition man), has decided to change strategy. First, he relegated the old PD establishment as minority within his party, and then, during the electoral campaign, he successfully addressed former voters of M5S, PDL and, above all, centrist smaller parties (e.g. SC – Civic Choice). The result of this strategy is that the M5S stopped attracting new voters and gained just 21% of the electorate. Not only this is less than what has been forecasted by polls, but it is also less than the share of votes they obtained at the 2013 national election (25.5%), when they lost by a very small margin only because the PD was in coalition with other smaller leftist parties. Continue reading “A Legitimization of the Italian Government More Than a Vote for Europe”

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What has been agreed on banking union risks reigniting, rather than resolving the crisis

By Iain Begg

In December 2013 EU finance ministers negotiated an agreement aimed at establishing a banking union, with further talks between the European Parliament and the Member States ending in an agreement last week. Iain Begg provides a detailed overview of the main objectives of banking union and what has been agreed so far. He argues that while European leaders have probably gone as far as they can over reaching a compromise, the measures agreed are still insufficient and could potentially exacerbate the risk of another Cyprus-style crisis taking place within the Eurozone.

A German 2 Euro coin. The word Freiheit (freedom) can be read on the edge lettering.

Among the many economic governance initiatives undertaken over the last few years, those intended to achieve deeper financial integration have been widely regarded as crucial and urgent. The financial crisis and the subsequent sovereign debt crisis had revealed a number of flaws in the governance of the euro, and the EU’s leaders have since tried hard to put in place a new framework for economic policy-making which deals with these flaws. However, progress has been slow and has exposed deep differences among the Member States.

After some very tough negotiations, the EU finance ministers came to an agreement just before Christmas on the second stage of what has come to be known as banking union and, after protracted negotiations about procedures, the proposals were agreed with the European Parliament on the 20th of March 2014. A single resolution mechanism (SRM) for dealing with failing banks will now be added to the single supervisory mechanism (SSM) which completed its legislative journey in October. A third element originally envisaged for banking union, common deposit insurance, continues to divide EU Member States and has made no tangible progress.

According to Michel Barnier, the Commissioner responsible for financial services, the December deal was ‘a momentous day for banking union. A memorable day for Europe’s financial sector’. But is it and will it prove to be enduring?

Continue reading “What has been agreed on banking union risks reigniting, rather than resolving the crisis”

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Europe is diverging: ignore it at your peril

By Lorenzo Marsili

untitledIn the optimistic 1990s, the introduction of the Euro was to represent the kernel of the European integration process. The single currency was meant to act as the motor for the “ever-closer” convergence of European economies, thereby promoting the integration of public spheres and national policies, leading eventually to a form of political union.

This logic has by now proved both misleading and inadequate. In the absence of a strong political direction in common, the EU is undergoing a process of structural divergence, featuring diverging employment, growth, productivity, competition, and fiscal trajectories. Far from producing cohesion, in the absence of common fiscal policies the euro is reinforcing such a pattern of divergence, undermining in the process the legitimacy and capacity for action of transnational institutions.

Monetary policy, the area where most integration in principle is already achieved, is just the most blatant example: failing transmission belts mean that interest rates set for the whole of the Eurozone by the ECB no longer translate into similar financial environments across member states. The recent lowering of interest rates to a record-low of 0.25% has been much decried in Germany. But SMEs in Spain live on a totally different planet: the average refinancing rate for companies from the south of Europe is closer to 8% if not higher, more than double the borrowing costs for their northern competitors. In the absence of exchange-rate fluctuations this translates into a tremendous drag on the competitiveness of southern enterprises, thereby increasing the productivity gap within the Eurozone. Similar considerations could be made about the refinancing rates of the public debt.

Continue reading “Europe is diverging: ignore it at your peril”