Recent Europe Articles
It feels like the calm before the coming storm. The situation in Ukraine is likely to escalate very quickly, and yet there seems to be worrying lack of urgency about it everywhere.
Three things happened over the last week that have set the stage.
1) Rather than going home after taking over Crimea, Russia started amassing troops on the Ukranian border. It also started directing its people inside Ukraine to take over various towns and cities in the east of the country. There are obvious examples of this: well-armed and well-trained ‘militias’ have sprung up everywhere; the newly appointed police chief in Horlivka admitted to being a lieutenant colonel in the Russian army.
2) In response, Ukraine said it would launch a military operation to take back its own territory unless the militias left peacefully by Monday morning. Fair enough: any government would want to fight back against armed (and foreign) militias who have taken over its towns without any democratic mandate.
3) The deadline passed and the Ukrainian govt did nothing. Then, it asked for UN peacekeeping forces to maintain order. Today, the Ukranian govt belatedly launched military operations, but there are reports that some troops in the east are defecting to the pro-Russian side. Meanwhile, the Ukranian economy is near collapse.
The key problem here is that Ukraine is too weak against Russia. If Ukraine gets bogged down in a long battle against pro-Russian forces in the east, it would only hasten a collapse of its economy.
Putin is betting that the Ukranian economy collapses before his does, which would trigger a crisis for the EU and force them to agree to his demands.
This is why we have to get involved now rather than later. This could mean all out trade sanctions, UN peacekeeping forces or NATO forces. If Ukraine collapses then Europe will feel the full force and force us to agree to Putin’s demands. It would be the worst crisis for Nato and the EU in a generation.
Hoping that Russia will back off from strong words is foolish – Putin’s only hope now is that Ukraine goes down before him. And he’s doing his utmost to make that happen.
‘Ukraine stands on the brink of a possible military showdown with Russia this morning,’ says Human Rights Watch today.
This isn’t an exaggeration either – the acting President of Ukraine issued a warning to pro-Russian forces yesterday, calling on them to lay down their weapons.
That deadline has now passed and there are no signs that the militants are giving up. In fact, they are bolstered by Russian money and weapons and the build-up of Russian troops on the border.
So what happens now? This is where confusion reigns and why Putin is resting easy for now.
Ukrainian forces will try and take back government buildings occupied by pro-Russian forces, but are likely to face heavy resistance and won’t be able to take them back quickly.
That will give Putin more time to create disorder and to reiterate his claim that Ukrainian forces are harming ordinary ethnic Russians. It would give him internal justification for more explicit military action in Ukraine.
If Putin then takes stronger military action in Ukraine, what do the UK and USA say then?
Calling on him to withdraw is not enough clearly, Putin has ignored them so far. I suspect Ukraine is looking for promises of military backing from the United States and European states before it continues.
But sooner or later we will have to confront the question: what do the USA and UK do is Ukraine goes to war with Russia? We cannot just sit on the sidelines and watch because it has huge security and energy implications for us.
But there seems to be no appetite for such promises from the West to guarantee Ukraine’s safety. Our politicians want to avoid answering such questions. Some of them are busy holidaying in Lanzarote. I don’t suspect Vladimir Putin is too worried for now.
The test of democracy and of the rule of law, both here and in Greece, is not how it treats the best of us but how it treats the worst.
That doesn’t mean we should be complacent. There are real threats to justice in Britain, such as cuts to legal aid. However the battle is clearly not yet lost here.
Meanwhile in Greece the authorities have moved to arrest members of the Neo-Nazi party Golden Dawn, including its leader Nikolaos Michaloliakos and four other Golden Dawn MPs. They’ve been charged with belonging to a criminal organisation and it’s claimed that guns and ammunition were found in Michaloliakos’ home.
Recent posts by reservists belonging to elite Greek military units calling for a coup, the killing of a prominent leftist musician, sustained attacks on immigrants and left wing protesters, had all brought things to a point where the state seems to have felt obliged to act.
I feel obliged to say two things. Firstly that I believe in muscular democracy; in other words I do not believe that a democracy, in the name of democracy, should hand the means of its own destruction to non-democratic forces.
When Turkey’s Prime Minister Recep Tayyip Erdogan declared at one point that he saw democracy as a bus, you use it to get to your destination and then get off, he associated himself with autocrats everywhere who have exploited democracy from Hitler onwards.
The minimum qualification for seeking power democracy must be a commitment to surrender power democratically when citizens demand it. For that reason it’s hard to justify allowing Golden Dawn or any other anti-democratic group an electoral platform.
The other thing I would say is this; however odious Golden Dawn the party and its members may be they must get due process and a fair trial. It’s not so much a concern about creating martyrs. Most knuckle dragging far right thugs would fetishise a rotting dog’s carcass if it served their warped cause. Nope, it’s because the damage done to Greek democracy by further degrading its already damaged institutions would be almost as bad as letting Golden Dawn damage them.
There’s a passage in A Man For All Seasons, where Sir Thomas More is debating with his son-in-law Wiolliam Roper, that puts it better than I could.
Roper: So now you’d give the Devil benefit of law!
More: Yes. What would you do? Cut a great road through the law to get after the Devil?
Roper: I’d cut down every law in England to do that!
More: Oh? And when the last law was down, and the Devil turned round on you — where would you hide, Roper, the laws all being flat? This country’s planted thick with laws from coast to coast — man’s laws, not God’s — and if you cut them down — and you’re just the man to do it — d’you really think you could stand upright in the winds that would blow then? Yes, I’d give the Devil benefit of law, for my own safety’s sake.
Bang ‘em up, throw away the key and all that, but do it proper and do it so a better, more confident, more self respecting, more honest, more democratic Greece can come out of this.
this blog was originally posted here.
Last Friday, the Green Alliance published their review of the three major political parties’ activity on the environment since May 2010. The “Green Standard 2013” makes disappointing reading for all parties – but for none more so than the Conservatives.
On becoming Prime Minister in 2010, David Cameron said he would lead the “greenest government” ever. He described the existence of a fourth, mysterious minster at the Department for Energy & Climate Change, “who cares passionately about this agenda – and that is me, the prime minister. I mean that from the bottom of my heart”.
Yet despite such reassurances, Cameron’s own Chancellor has repeatedly suggested that environmental progress would compromise a healthy economy. Meanwhile, Owen Paterson, the UK’s Secretary of State and political leader on all things environment, has publicly questioned the reality of human-induced climate change.
However, neither the Liberal Democrats nor Labour have come away unscathed either. The Green Standard describes Labour’s failure to lead upon, prioritise, or even propose credible solutions to green the UK economy.
The Liberal Democrats are portrayed as having “no clear vision for the environment” –a portrait which certainly rings true as only yesterday, the Lib Dems backed a motion to support fracking- a fossil fuel industry vociferously opposed by 1000s of demonstrators nationwide, with 67% of citizens preferring to have a wind turbine near their home than a fracking site.
As extreme weather and energy insecurity bear down on our continent, we need someone to lead us to a better place, fast. While British politicians flag, our EU membership may haul us out of the smoggy darkness. The EU’s record on the environment, while not perfect, is often better than Britain’s record.
From addressing carbon capture, to banning bee-harming pesticides, the EU is providing both a platform to debate these issues, as well as leadership in exploring change.
Let’s take fish as an example. In 2005, the Northeast Atlantic was 95% overfished. Recognising the seriousness of the situation, the European Commission tackled the issue head on through determined fisheries management. Today, the same waters are only 39% overfished.
Concurrently, the European policy governing fisheries has undergone significant, progressive reform; a process frequently led, perhaps surprisingly by Richard Benyon, the UK’s Tory Fisheries Minster. A chance on the world stage allowed him to push for positive change, in a way which he’s failed to do at home, as shown by his desultory progress in establishing only 31 of the originally propose 127 marine conservation zones in UK waters.
The possibility to participate, shape and share a common future on issues such as air quality, weather, natural resources and energy security is one that shouldn’t be overlooked by the debate on our membership of the European Union.
The environment is one issue we’re unable to go alone – we need to be in it to win it.
Those with an eye for economic optimism will have had their eyes on the Eurozone in the last two weeks, as the European Union announced a return to growth following almost 18 months of economic decline.
Then again, it will be economists with a nose for political rabble-rousing that may sense a sort of bureaucratic-bluff from the likes of Mario Draghi, Oli Rehn and co.
Instead this recovery has been for the most part intergovernmental, increasing the level of tension between heads of states and allowing a Franco-German alliance to play Napoleon over smaller members.
“No one should believe that another half century of peace in Europe is a given – it’s not” was the ominous tone set by Merkel just two years ago. This was on the back of Germany bailing out its fellow Eurozone members, a move agreed upon in the German parliament, leading to riots within the streets of Athens.
Mario Draghi, President of the European Central Bank, came to the fore following economic turmoil within the Europe, pledging that he and his colleagues would see that Brussels does “whatever it takes” in order to return to prosperity.
One measure announced was the proposed purchasing of the bonds and debts of weak member states in order to buttress a recovery. This never happened.
In fact evidence suggests that such moves are futile in attempting to resolve an economic downturn, due to the affinity that countries, safe in the knowledge that they have a fall-back option if things go awry, have for taking risks.
In January 2011 the EU saw through new legislation designed to combat the recession. This consisted of minimum requirements for national fiscal frameworks and sanctions against countries running up huge deficits. What is bemusing however is the emphasis put on such measures when evidence strongly suggests that the effect such behaviour has is almost wholly reliant on prior circumstances which are not being addressed by the Union.
The Eurozone is liable to fall into the same difficulties it has done previously if any of the member states experience renewed instability in the coming years.
Furthermore, the policy provisions in place to protect against further insolvency appear fundamentally flawed. How are we to have a financial union if the EU remains the “lender of last resort” to member states following a financial crisis? The answer given from Brussels is budgetary consolidation, to ensure that such problems never occur again, thus rendering any bail-outs unnecessary. Yet the IMF’s own figures show that for countries such as Greece and Ireland to attain debt ratios of 60% of GDP by 2030, they would have to maintain budgetary adjustments over 10%.
If the likes of Draghi and Barroso are to really deserve a pat on the back, then they need to enforce measures such as further fiscal union and a more powerful ECB. The argument over “more or less Europe” is becoming tiresome and to see technocrats in preparation for celebration is nauseating.
The EU needs to make decisions now and it needs to make them fast. To lumber around while sitting on the fence will no longer cut it. In fact, it never did and I imagine the founding fathers of the EC will be turning in their graves seeing EU officials commend the union as being on track while unemployment in Spain remains at 25%.
John Stephenson tweets from here: @JohnStephenso14
by Tom Gill
A showdown between the French Government and unions is looming over reforms to the country’s ‘generous’ pension system.
Strikes and protests are scheduled for September 10 in response to plans by the Socialist administration of President Francois Hollande to extend the 41.5-year contribution payment period required for a full pension and other possible changes.
Hollande has indicated he has no intention of touching the retirement age that former President Nicolas Sarkozy raised to 62 from 60, having fulfilled a campaign pledge to roll it back for those who started work early. Nor is he minded to trim annual pension increases to below inflation, another option under consideration.
Employers berate the President for timidity, and say more cuts to the system are needed to plug an expected 20 billion euro funding gap in the system by 2020.
‘We cannot wait any longer and be content with half-measures because our pension system is in a disastrous state,’ the new head of France’s Medef employers organisation Pierre Gattaz wrote in an op-ed in Le Monde newspaper this week
Medef will be making this point at a meeting with the government and unions on Monday and Tuesday, when Prime Minister Jean-Marc Ayrault is expected to formally outline the reform plans.
Gattaz said it was ‘urgent’ to review pension arrangements allowing the military, police and others to retire much younger, although Hollande is expected to leave them unchanged too.
The head of the Medef employers’ group also called for France’s state-dominated pension system to be curtailed and a bigger role given to privately funded pensions.
Public spending on pensions is 14.4 percent of output in France versus 12.9 percent in the EU.
Businesses in the eurozone’s second-largest economy, which has just exited recession, fret about a prospective rise in payroll taxes as part of the pension system reform. Gattaz claims that increasing their contributions would hurt employment further at a time when more people are out of a job in France than ever before.
And it is not just employers breathing down Hollande’s neck – the European Commission is reportedly looking for indications that the government is serious about ‘reform’ in exchange for agreeing some loosening of the country’s timetable in reigning in its deficit.
Hollande is right to fear a popular backlash against changes to the country’s pensions system. All past attempts – including under Sarkozy – have encountered weeks of demonstrations and costly industrial strikes.
But is ‘reform’ – in the modern turn-the-clock-back meaning of the word – inevitable?
First, it is important to clear up the nonsense that pensions are generous in France – the average pension is only 60 percent of working-age post-tax income, versus the 69 percent average for industrialised countries. http://uk.reuters.com/article/2013/07/21/uk-france-pensions-analysis-idUKBRE96K02W20130721
Second, companies will be able to claw back much of the rise in employer contributions (+ 0.1%, or 3 billion euros) expected in the changes, through tax breaks, and they will still be paying less than they did 20 odd years ago, point out Catherine Mills, from the University of Paris I Panthéon Sorbonne, and Frederick Rauch, editor of the journal Économie et Politique.
Third, the problem is not the cost of the system per se, but the lack of funds to underpin it. In an article in L’Humanite newspaper http://www.humanite.fr/social-eco/des-propositions-alternatives-pour-le-financement-547054 Mills and Rauch point out that this is due to rising unemployment and downward pressure on wages, the result of austerity policies pursued in France and Europe, and the fact that firms are more than ever putting shareholders before employees.
Firms now pay out twice as much to their owners and for their financing needs than on payroll taxes. Indeed, the proportion of companies’ financial resources handed out as dividends has risen from 30% to 80% since the end of the 1980s, according to a report in Alternatives Economiques. http://www.alternatives-economiques.fr/pourquoi-les-entreprises francaises_fr_art_1217_63975.html And a tidy 100 billion euros were pocketed by fat cat shareholders of France’s largest companies in the three years to 2011 alone.
The two economists calculate that a drop in the wages paid by employers of 1% costs the pension system 800 million euros in revenue. When the country has 100,000 more unemployed, the pension system loses 1 billion euros in funding. Thanks to economic rigor in France and across the Continent, the country now has over 10% out of work. ‘Thus boosting employment and wages is the key to making the pension system sustainable,’ say Mills and Rauch.
All of which implies an end to the mad, self-defeating austerity policies prevailing across Europe, and a radical ‘reform’ (in the traditional sense of the word) of the capitalist system.
Tom Gill blogs at www.revolting-europe.com
One constant theme in the Chancellor’s speeches has been that his austerity would be working wonderfully if it wasn’t for those pesky foreigners. There’s one problem with this: if they are holding us back, how come they’re mostly doing better than us?
There’s no mystery about why the Chancellor is looking for scapegoats.
Last week’s preliminary estimate for GDP (the one that showed 0.6% growth since the previous quarter) revealed that, between the second quarter of 2010 and the second quarter of 2013, the economy had grown a magnificent 2.1% – about a quarter of the trend rate.
The chart below shows GDP growth rates (comparing each quarter with the same quarter a year before) and the government ought to be very embarrassed by it.
Within six months of the government’s election, our economic growth had been cut off, with a downward trend that may (let’s hope) have come to an end in the most recent figures:
So you can understand why Mr. Osborne would like us to believe that it would have been higher if it hadn’t been for depressed European and US economies, making it difficult for us to export to them.
And that is the line he has stuck to.
A year ago, Mr. Osborne told us he was exasperated at the failure of Eurozone government to sort out their problems, which “would do more than anything else to give our economy a boost.”
Delivering the Autumn Statement, he told us “we face a multitude of problems from abroad. The US fiscal cliff, the slowing growth in China. Above all the eurozone, now in recession.”
By the time he got to this year’s Budget in March, he worried that the problems Cyprus was experiencing showed that “the crisis is not over, and the situation remains very worrying.” In June, it still wasn’t over, and his speech on the Spending Review returned to the theme:
But while we’ve been acting, the challenges from abroad have grown. A eurozone in crisis. Rising oil prices. The damage from our banking crisis worse than anyone feared. And the truth is Mr. Speaker, we have to deal with the world as it is, not as we wish it to be. So this country has to continue to make savings.
And, if those Eurozone economies and the USA had been growing more slowly than us, there might have been something to that line. But that isn’t the case. In the table below I’ve used OECD data (*) for GDP in the second quarter of 2010 and the first quarter of 2013 (there is no Q2 2013 data for most countries) and calculated how much it has grown or shrunk for the UK, all the Eurozone countries the OECD covers and the USA.
If slow growth abroad is holding us back, why have our first, second and third largest export markets grown faster than us? I’ve also included a column giving each country’s share of UK exports in 2011 (the most recent I could find, using HMRC data).
You can see from this that, while there is a group of Eurozone countries that has done worse than us, they only account for 15% of UK exports.
Problems in the Eurozone won’t have helped the UK’s recovery, but we can’t make it the main explanation for our stagnant economy.
by Tom Gill
The Greek government last night passed a law firing thousands of public sector workers.
Twenty five thousand workers – mainly teachers and municipal police – will be placed in a layoff scheme by the end of 2013. They have eight months to find another position or get laid off.
Why? According to Reuters, “Greece’s public sector is widely seen as oversized, inefficient…”
Lazy journalism, once again. What are the facts? Greece’s public sector may well be relatively inefficient, although there is little reliable data on public sector productivity and the press rarely if ever quote hard evidence. But the charge that it is oversized is nonsense.
The number of state employees in Greece is below the EU average. According to the OECD, “Greece has one of the lowest rates of public employment’ among advanced economies, with general government employing just 7.9% of the total labour force in 2008. Across the OECD area, the share of government employment ranges from 6.7% to 29.3%, with an average of 15%.”
This report also notes that compared to other OECD countries, the Greek government spends a much smaller portion of resources on education (8.3% vs. 13.1%), and only some of that is down to a smaller school-age population. So why are teachers targeted for lay-offs?
Not that there isn’t obvious waste in government expenditure. For example, Greece spends above average – in the EU it is about 2% of GDP – on defence. According to The Guardian, “No other area [of spending] has contributed as heavily to the country’s debt mountain. If Athens had cut defence spending to levels similar to other EU states over the past decade, economists claim it would have saved around €150bn – more than its last bailout. Instead, Greece dedicates up to €7bn a year to military expenditure – down from a high of €10bn in 2009.”
But the Troika is using international loans to force through more cuts to the public sector workforce.
At a time when the private sector is not hiring, this will add to total unemployment. This in turn will further hit the economy as in Greece which is heavily dependent on household spending (74% as against 58% in Germany, according to the World Bank.
More misery, in short, for a country now in its six year of recession and where unemployment is expected to rise to 28% by the end of next year, according to forecasts published this week.
With help by from the media, the myths perpetuate, and Greece burns.
Tom Gill is a London-based writer who blogs at www.revolting-europe.com on European affairs from a radical left perspective.
I wrote a post the other day that caused something of a stir. I argued that migration of the young & skilled from southern European countries could mean that those left behind face a very bleak future. Let me explain a bit further.
I am emphatically NOT arguing that there is anything intrinsically wrong with young, skilled people leaving in search of a better life elsewhere. Migration benefits both the migrants and the receiving countries. Immigration is a GOOD thing for countries that have ageing populations and skills shortages – as most Western countries do.
But where people can freely move to other countries, the sort of ‘internal devaluation’ that forces down wages in search of ‘competitiveness’ inevitably causes migration when the same jobs in Greece and Germany pay vastly different wages. Unfortunately it is this sort of ‘internal devaluation’ that has been forced on the Eurozone periphery because their membership of the Euro prevents them from devaluing their currencies vis-a-vis their main trading partners, which is the usual means by which countries restore competitiveness.
Traditionally, young migrants send money back to their parents. But in the West, with pension and healthcare systems that support the old, the explicit contract between children and parents is weakened. I don’t have evidence to support this but I think that young migrants are much more likely to send money home when there is little state pension or healthcare provision in their country of origin. If they believe that the state will support their parents, they may not send money home.
The problem is that the people left behind are older, less able and lower skilled, which makes these countries less attractive to businesses. After all, why would a business choose to locate itself somewhere where the local workforce is ageing and poorly skilled? So businesses would go elsewhere too. That would cause GDP to shrink further.
The population’s need for state support would actually increase as it ages and gets sicker, but tax revenue would fall as working people and businesses leave. That adds up to long-term decline and a growing burden on the state’s finances.
And old people and long-term disabled don’t generally pay taxes. So where will the taxes come from to support the welfare systems that these people depend on?
There is one final ingredient in this poisonous mixture. Most of these states are already highly indebted. With a growing burden on their healthcare and pension systems and falling tax take due to GDP decline, their debts can only get worse. The fiscal compact gives primacy to debt service over maintaining public services. As I see it, therefore, these states will eventually be forced to dismantle their welfare systems – the pensions and healthcare required by their ageing populations – to avoid debt default.
Eventually, I suppose, the old and the unskilled will also leave – if they can, and if any country will receive them. For although the European Union is in theory committed to the free movement of people, I wonder how real that commitment would turn out to be in the face of large-scale migration of pensioners and benefit claimants from the Eurozone periphery. I suspect that free movement of people might turn out to be another of those European laws that are binding in good times but illusory in bad.
Therefore as Krugman said, the combination of labour mobility with internal devaluation and lack of fiscal union in the Eurozone is potentially lethal.
There is no possibility of recovery for countries caught in the deadly embrace of high public debt and youth migration. For them, “internal devaluation” actually means creeping desertification.
A longer version of this blogpost is here.
Firstly, I’d like to thank Sunny, for saying that the campaign for Labour to support an EU referendum is “cool”.
He’s right; out of all the groups calling for the Labour Party to support a policy launched this week, Labour for a Referendum is the most in vogue.
However, on the main crux of his article, that our campaign is “Dead on Arrival”, we would have to, somewhat controversially, disagree.
Sunny outlines three main points for his argument. I will try and rebut each of these points as thoroughly, fairly and, crucially, quickly as possible.
1) Supporting a referendum would make Eurosceptic Tory backbenchers more demanding.
I don’t see this as being Ed Miliband’s problem. If Labour supported a referendum one suspects that Tory MPs would attempt to push their own leader into a more hardline position rather than ours.
Sure, Tory backbenchers might become more demanding, but that would only lead them to more internal bickering, rather than dividing our party?
2) You shouldn’t get involved when your opponents are infighting.
The idea that we should adopt a grab-the-popcorn approach to opposition and let the victory come to us seems flawed. While it makes perfect sense not to rush into policy commitments so far before the election, when we see the Tories in disarray we should capitalise on it as best we can.
Milk that subject for all it’s worth. Grab it and run. Put a spanner in the works. Use whatever metaphor you want, but sitting back and relaxing is easy, but it is no path to a Labour majority.
3) Labour’s line is settled, we can’t go back on it now.
We’re not expecting to change Labour’s policy by the end of the week. That’s not the plan. What we want is for a commitment to an EU referendum to be in our 2015 manifesto. We think it’s the right thing to do, we think it’s popular and we think it will help get Ed Miliband in 10 Downing Street.
But we’re happy to play the long game. 2017 is indeed “far, far away”, although it is likely/definitely going to be half as far away when we go into the next election. Everything Miliband has said about it so far has been couched in language that suggests that this is a policy liable to change if circumstances do.
Our job, as Labour for a Referendum, is to make sure that the pressure is kept on, and that Miliband knows just how helpful a pledge could be.
Finally, I can only apologise that Labour for a Referendum did not exist a year ago. Circumstances changed.
Dominic Moffitt is Campaign Director for Labour for a Referendum
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