Sunday, January 12, 2014

Social Democratic German Foreign Minister to Greece: follow Angie the Great's orders!!

German Foreign Minister Frank-Walter Steinmeier headed down to Greece last week to praise the Greek govenrnment for knuckling under for years to German Chancellor Angela Merkel's ruinous austerity policies. And to tell them they had to keep on doing it. (Severin Weiland, Besuch in Griechenland: Steinmeiers schwierige Mission Spiegel Online 09.01.2014)

According to Weiland's report, there had been hope in Greece - presumably he means in the current Greek government - that a new Grand Coalition government in Germany might pursue a less ruthless economic policy toward Greece. How anyone thought that was likely in a government headed by Merkel with an SPD that has consistently supported her previous eurozone policies, Weiland does not explain, beyond the fact that in a pre-election visit to Greece Steinmeier had offered vague platitudes about lightening up on Greece. But eurozone policies were scarcely if at all a topic of the coalition negotiations with Merkel after the election. The SPD meekly agreed to continue Merkel's Herbert Hoover/Heinrich Brüning economic policies for the eurozone periphery nations like Greece.

Solidarity among countries and peoples is supposed to be one of the key features of the EU project. Steinmeier's main solidarity in this situation is with his Grand Coalition government headed by Merkel. The SPD's nominal sister party in Greece, PASOK, is on the verge of fading into political irrelevancy. It's continuing embrace of Merkel's austerity extremism has ruined its ability to compete to head a Greek government any time in the foreseeable future.

The Greek prime minister, Antonis Samaras, proudly defends ruining his country's economy by implementing Merkel's neoliberal "reforms." Greeek Foreign Minister Evangelos Venizelos plays the bad-cop role by warning anti-European parties could come to power in Greece with dire consequence. Actually, the largest opposition party, the left SYRIZA party, seems to be serious about keeping Greece in the EU and the euro currency zone, but demands an alternative to endless, crushing austerity policies. (Gregor Peter Schmitz, Griechischer Premier beklagt sich über die Deutschen Spiegel Online 10.01.2014)

But if the periphery countries have any prospect of forcing a break with the Hoover/Brüning policies imposed by Germany via the Troika (EU, ECB, IMF), it seems to me that it would have to involve one or more countries being willing to take matters to the brink of a eurozone exit to insist on an end from austerity economics.

Not much leadership in that direction is likely to come from France's Socialist President François Hollande. He was elected in 2012 criticizing Merkel's austerity policies, then proceeded to adopt a version of them. He's been far more interested in conducting war in Africa than in developing a realistic alternative to Merkel's euro policies. But there's an entertaining rumor making the rounds about his having an affair with a French actress. According to Raniah Salloum in Angebliche Liebesaffäre: Der Präsident und die Schauspielerin Spiegel Online 10.01.2014, "Er ist so unbeliebt wie kein französischer Präsident vor ihm. Dafür legt die extreme Rechte zu. Bei der Europawahl im Mai könnte der Front national sogar stärkste Kraft werden" ("He is more unloved than any French President before him. And because of that, the extreme right is gaining in strength. But the European election in May, the [far-right] National Front could even become the strongest political power.")

I'm referencing Der Spiegel here a lot. But their reporting on Greece could be better. This article from Spiegel International, Economic Health: Has Greece Turned a Corner? by Christoph Pauly, Gregor Peter Schmitz and Christoph Schult 01/08/2014, reads a lot like what one would expect from a press release out of Wolfgang Schäuble's Finance Ministry:

Greek Prime Minister Antonis Samaras has pledged that Greece's leadership will mark a presidency of "hope" -- a word he applies to his own country, which, he says, brings a "positive balance" into the six-month position of prestige. But it has often been the case that good news from Greece is coupled with the next set of demands -- such as the current request for a renewed debt reduction. Such a move would hit European taxpayers hard, particularly those in Germany.

Greece has undeniably made progress when it comes to reducing its budget deficit, improving its economy and ramping up exports, much of which came as a result of severe cuts to public spending, pensions and salaries. This year, the economy is even expected to grow for the first time since the crisis took hold, by 0.6 percent. The budget deficit is set to shrink to 2 percent this year and 1 percent in 2015. The improved macro-economic indicators are important conditions for the payout of the next tranche of aid from Europe and the International Monetary Fund.

Indeed, Athens has been praised even by one of Europe's senior-most crisis managers. "Greece is surely more than halfway there," says Klaus Regling, 63, head of the European Stability Mechanism (ESM), the EU's crisis backstop. "I am confident that further successes will materialize if they continue down this path."

But beyond such numbers, Greece remains what it has long been: a country without an efficient state apparatus. A closer look at the country's administration, judiciary and political structures raises doubts as to whether Greece will ever regain health. Improvements have been insufficient.
And this just reflects lazy conventional wisdom:

EU experts, though, say that a willingness to compromise, create consensus and engage in domestic political dialogue are still lacking. Instead, Samaras's government is being radically attacked by left- and right-wing extremists. This fundamental opposition has vowed to turn the European election in May into a pure protest vote. From the far left (Syriza) to the fascists (Golden Dawn), the purported goal is to send a crop of monsters to Brussels.
The reader would never know from this article about the economic devastation that the current depression has brought about in Greece, greatly increasing by Germany's Hoover/Brüning policies imposed on Greece.

Severin Weiland's article quoted above at least includes a sentence referencing the high unemployment in Greece, well over 50% among the young, and the debt ration of 175% of GDP, completely unsustainable. In the articles I've cited here, the reader would be more likely to get the impression that the main problem in Greece consists of lazy bureaucrats and whiny politicians.

But sticking with Spiegel a bit longer, they also have an interesting report on Italian politics by Hans-Jürgen Schlamp, Italiens Polit-Hoffnung Renzi: Das Jahr des Verschrotters 11.01.2014, about a social democratic leader in the ruling Partito democratico (PD), Matteo Renzi, the mayor of Florence who has also been the PD's chairperson for the last month, making him officially the Party leader. The PD's Enrico Letta - a former Italian Communist - as the Prime Minister obviously has a more senior role within the party at the moment. At first glance, one might think that Renzi is some kind of left-leaning reformer, because he criticizes the EU deficit limits. But actually Renzi is attacking Letta's government for not pushing neoliberal "reforms" hard enough. And by reforms, Renzi seems to have in mind speeding up the weakening of labor laws, lowering taxes (always a favorite nostrum of conservatives, it seems) and cutting back gubment. But he throws the customary rhetorical bone to the need for better education. Measures to directly address the economic problems Schlamp squeezes into a paragraph: nearly 50% youth unemployment, increasing bankruptcies, rising debt loads, stalled investment, those Renzi doesn't seem too hot on.

A Reuters piece on Renzi by Steve Scherer, Italy's Renzi ratchets up pressure on PM Letta over reformsItaly's Renzi ratchets up pressure on PM Letta over reforms 01/12/2014, puts it this way:

Italy's centre-left leader Matteo Renzi said the next two weeks will be "decisive" for Prime Minister Enrico Letta's government, which has so far struggled to make incisive reforms.

The government is supported by a broad left-right coalition. But since the 39-year-old Renzi was elected last month to lead the Democratic Party (PD) - Letta's own party - he has frequently criticised the government's choices and called for it to accelerate institutional and economic reforms.
He does call for a financial tax to offset the revenue loss from other tax cuts.

In this 01/03/2014 cartoon by Yannis Ioannou, he depicts Greece's six-month position in the rotating Presidency of the EU during the first half of 2014 as a "Puppet President" (Le Guignol President) of Angela Merkel. The Puppet President is addressing the EU wealthy countries France, Britain, the Netherlands, Denmark and Austria, who are demanding to know, "But how can we have as President of Europe ... Greece? Angie joins the wealthy nations griping about and ridiculing Greece, "Will he protect me?", even while she controls her handpuppet Greece in the EU Presidency:

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