Monday, May 12, 2014

Merkel's austerity policies should be on trial in this month's European elections

With the European Parliamentary election coming in two weeks on May 25, a new poll shows that 70% of Austrians think the EU is on the wrong course.

Conrad Seidl, 70 Prozent der Österreicher sehen EU auf falschem Kurs Der Standard 11.05.2014

And it's not just Austria. It's France, too: Marcel Leubecher, Nur jeder dritte Franzose will in der EU bleiben Die Welt 12.05.2014. The British company YouGov did a poll for Die Welt that found only 34% in France saying they favored continuing French membership in the EU, with 33% opposed and 33% offering no opinion. This is not good news for the EU!

In non-eurozone member, the pool found 39% favoring, 38% opposed and 23% giving no opinion either way.

In Germany, where Angela Merkel has so far successfully made the euro a tool that favors Germany while devastating the economies of Cyrus, Greece, Ireland, Italy, Portugal and Spain, 57% support staying in the EU, 23% oppose and 20% express no opinion.

And what are the two leading candidates for the European conservative and Social Democratic parties, the center-right and the center-left, proposing to do about this dire situation? Repeat clicheed bromides, apparently.

Profil intereviews them, Europawahlen: Martin Schulz und Jean-Claude Juncker im Interview Profil 10.05.2014, Angie-bot Juncker for the conservatives, Angei-bot Schulz for the social democrats.

At this point, the only meaningful pro-Europe (pro-EU) position is one that opposes Angela Merkel's austerity policies. The rest is hot air at this juncture.

And both Juncker and Schulz offer hot air. Juncker wants Cyrus, France, Greece, Ireland, Italy, Portugal and Spain to soldier on with the ruinous austerity policies that have demonstrated their devastating consequences since 2009 and their failure to achieve even their stated purpose of reducing the burden of public debt relative to GDP about as clearly as any economic theory could prove or discredit itself. For Juncker to say what the EU needs to continue with "reforms," the currently poisoned term Angie-bots use to refer to her Herbert Hoover/Heinrich Brüning shows a complete lack of seriousness in preserving the EU as a democratic institution. It can continue on this road, but only by severely curbing the democratic part.

Schultz' position is basically the same, only slightly more worker-friendly on the margins, and there's no real reason to take those qualifications seriously. Any leader that is seriously pro-Europe at this point has to be opposed to Merkel's austerity politics. Schultz and his German Social Democratic Party (SPD) support them, and has since 2009. The SPD is currently the junior partner in Merkel's Grand Coalition (GroKo) government, completely in support of the basic lines of her Hoover/Brüning austerity policies. Juncker and Schultz are loyal servants of Merkel and the business lobbies.

I sometimes surprise myself at how harshly I'm judging the SPD in particular. But it's hard to come to any other conclusion. Because the only meaningful pro-Europe (pro-EU) position is one that opposes Angela Merkel's austerity policies.

Schultz repeats the left-neoliberal bromides that we've been hearing from US Democrats for two decades now. We need better jobs, so we should coddle business with less regulation and lower taxes. Especially small and medium businesses. (Otherwise you might think we're just corporates 'hos.) We need "targeted investment, research and development and a reindustrialization strategy," Angie-bot Schultz says. Also we'll say "justice" now and then. And we'll at least talk about cracking down on tax evaders.

Meanwhile, in the real existing eurozone deflation/lowflation gas taken hold, i.e., prolonged economic stagnation. Wolfgang Münchau reads the ECB's latest positions as indicating they are about to start charging actual negative interest, i.e., charging banks money to hold their money for them. (Wie negative Zinsen die Krisenkosten verschleiern Spiegel Online 12.05.2014) This is in hopes of getting banks to loan more money to businesses. But businesses need demand for their products and services to expand. Prolonged periods of stagnation do not provide those. And Merkel's Hoover/Brüning austerity policies offer no short-term hope for jump-starting an economy stuck in deflation/lowflation.

As Paul Krugman warns, "Exiting deflation or lowflation is really, really hard, which is why you never want to go there." (Already in the Lowflation Trap 05/10/2014)

Austria's lead Social Democratic candidate for the national representation in the European Parliament, Eugen Freund, has a problemita. His name popped up in the files of the old Yugoslavian secret police as a potential contact. But it's all pretty vague and he roundly denies having had any such contacts. (Freund weist Vorwurf der Geheimdienstmitarbeit zurück Der Standard 12. Mai 2014)


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