Kaletsky lumps the basic positions in the election in pro-Europe and Euro-sceptics, which is an inadequate framework for the current situation. Yanis Varoufakis' categories of Euro-loyalists, Euro-sceptics and Euro-critics work much better and correspond to the labels I've been using of, respectively, pro-Europe/pro-austerity, anti-Europe and pro-Europe/anti-austerity.
Kaletsky refers to "genuinely euro-sceptical and populist groups — ranging from the neo-fascist Golden Dawn in Greece to the French National Front and UK Independence Party to the neo-communist German Linke." The German Left Party is in part a successor part to the Party of Democratic Socialism (PDS), which was the post-unification,"postcommunist" organizational successor to the East German Communist Party. The Italian Democratic Party (PD), whose sitting Prime Minister Kaletsky praises in his column, is also in part a successor party to the Italian Communist Party. Italy's President (head of state) is a former Communist, as was the immediately preceding Prime Minister.
Kaletsky continues by saying, with somewhat of an over-generalization, "None of these parties can work together, even for tactical gains." The pro-Europe/anti-austerity/Euro-critical parties, which include the various Left and Green parties, have fundamentally different perspectives from those of the Greek, French and British nationalist parties he cites. There's no left/right alliance in sight for those groups with the Left and the Greens. But since the nationalists have a common goal of wrecking the EU itself, tactical cooperation is an obvious possibility.
One of his main points is a good one. Despite the media hype over the impressive showings of the far right in Britain, France, Greece and Hungary, the May vote can be plausibly read as a sign of stability, as well:
While the media were banging on about the shock and devastation of Sunday’s supposed political earthquake, this benign, and perfectly plausible, interpretation was quietly adopted by financial markets and the European business community.But this strikes me as a bit of "nothing to see here, move right along, folks."
Sober analysts noted that out of the 751 seats in the European parliament, an overwhelming majority of 467 were won by the three main blocs of conventional pro-European Union parties — the center-right European People’s Party, the center-left Socialists and the center-center Liberals. Another 53 seats are held by the even more pro-European Greens and 45 by the British Conservatives and allies.
Because "the three main blocs of conventional pro-European Union parties" are all committed to Angela Merkel's ruinous austerity program. I'm leery of interpreting votes for the far right as "protest" votes, just because that's a vague concept and easy to read whatever one's preferences are into that. Stability and continuity are arguably good in themselves for some purposes. But a 62% EP majority for continuity doesn't not change the economic processes that makes Merkel's austerity policies ruinous. Even if 62% of the voters believe in those austerity policies as intensely as Heinrich Brüning seems to have believed in his.
And it's telling that the pro-austerity conservatives and pro-austerity social-democrats had to package their support for austerity with at least lip service to stimulative policies. That's why it's useful at the moment to parse European politicians' statements on economic policy carefully to see if they are explicitly against austerity policies. Because if they aren't explicitly opposing Merkel's austerity policies, the chances are very high that they actively support them.
Kaletsky's article does leave me with the impression that he sees the problems with the austerity policies and with Merkel's playbook for a German-dominated eurozone:
The main lesson from Italy is that governments must offer voters immediate relief from the fiscal austerity imposed during the euro crisis by the dreaded "Troika" of the European Commission, the European Central Bank and the International Monetary Fund. [Prime Minister Matteo] Renzi's first action as prime minister was to promise Italians that there would be no further tax increases and then quickly translate these promises into legislation, though Italy’s budget deficits were overshooting EU-mandated targets.But the terms "labor liberalization, privatization and restructuring bureaucracy" have become stock ritual incantations in the neoliberal playbook for lowering wages, decreasing job security and cutting back public services. And Italy not buckling under Merkel's pressure to accelerate such destructive changes with obviously impractical deficit reduction measures is not at all the same thing as pushing for eurozone-wide stimulus, which is the urgent economic need right now. We'll see if Renzi is up to that.
The European Commission and the ECB have criticised this budgetary back-sliding. Renzi has made clear, however, that he would respond to such concerns not with further emergency austerity measures, but with long-term structural reforms, including gradual labor liberalization, privatization and restructuring bureaucracy.
A second lesson follows from this: Though Renzi has not yet faced that long-term structural reforms, they are more important than fiscal targets. For Europe's economic governance will have to be reconsidered if the euro is to survive.
Though the acute phase of the euro crisis may be over, the single currency has been revealed as a fundamentally unstable system. For the euro to be viable in the long-run, national debt burdens will have to be shared or mutually-guaranteed; banks will have to be jointly backed by? all euro-zone nations, and the ECB will have to become a lender of last resort in sovereign bond markets, like the Federal Reserve and the Bank of England. [my emphasis]
Tags: angela merkel, austerity economics, eu, euro, european union, italy