Tuesday, November 17, 2015

Euro crisis and its twin, the refugee crisis

Wolfgang Münchau is writing aboput Gemeinsame Währung: Die wahre Krise (Common Currency: The True Crisis) Spiegel Online 13.11.2015. His column is an early postmortum on the euro:

Die Flüchtlingskrise ist politisch wichtig, aber nicht wirklich ökonomisch. Sie wirkt kurzfristig wie ein leichtes Konjunkturprogramm und wird langfristig die deutsche Demographie etwas verbessern. Ich halte den Effekt für positiv, aber viel mehr ist dazu nicht zu sagen.

Die Eurokrise hingegen ist weder ausgestanden noch bewältigt. Sie wirkt weiter, jeden Tag. Sie wirkt ökonomisch auf Europa wie die Flüchtlingskrise politisch. Jeden Tag wird es schlimmer, weil man nicht das Problem löst, sondern weil man damit beschäftigt ist, irgendwelche Feuer zu löschen, die man durch die eigene Inkompetenz entfacht hat.

[The refugee crisis is politically important but not really economically. It has the short-term effect of a mild stimulus program and in the long run with improve German demography a bit. I see the effect as positive, but there's not a lot more to say about it.

The euro crisis, on the other hand, has been neither survived nor overcome. It's still going on, every day. It acts economically on Europe like the refugee crisis politically. Every day it gets worse, because the problem has not been solved, but we are rather busy putting out some fire or other that our own incompetence started.]
He actually uses the indeterminate "one (man)" where I translate "we." But I'm pretty sure the main "one" he means is Angela Merkel.

He also sees the growing German trade surplus as a problem in itself.

In a separate column, Münchau warns that Italy could soon find itself in the position where it finds the political and/or economic advantages of leaving the euro immediately compelling. (Italy’s economic recovery is not what it seems Financial Times 11/15/2015) He praises social-democratic Prime Minister Matteo Renzi for his important though relatively modest departures from Angela Merkel's austerity regime. "But," he writes, "what worries me is that the Italian government is not ready for when the impact of the slowdown in China and emerging markets hits Europe." And he observes, "Friday’s preliminary figures for eurozone gross domestic product show that the slowdown has started."

Andreas Schnauder calls attention to the connections between the euro crisis and the refugee crisis in Zwei Krisen, ein Versagen Der Standard 12.11.2015:

In Griechenland wird wieder großflächig gestreikt. Dadurch werden Erinnerungen wach, dass das Land vor nur vier Monaten noch am Abgrund stand und mehr als nur Spekulationen über einen Austritt aus der Eurozone die Runde machten. Inzwischen hat sich die Lage dank umfassender Hilfszusagen wieder beruhigt, doch gelöst wurden die Probleme nicht. Vielmehr hat sich die europäische Aufmerksamkeit zum Thema Flüchtlinge verlagert. Beide Krisen haben eines gemein: Sie waren lange vorhersehbar, ohne dass die EU rechtzeitig und richtig reagiert hätte.

[In Greece, there are again widespread strikes. Thereby memories are kept alive, the the country just four months ago stood on the abyss and not merely speculation was making the rounds about an exit from the eurozone. Since then things have calmed down, thanks to comprehensive promises of assistance, but the problems are certainly not solved. The attention of Europe has fastened much more on the refugee theme. Both crises have something in common: they were foreseeable long ago, with the EU reacting in a timely and correct way.]

Deutsche Welle English reports, Paris attacks stoke fears amongst refugees 11/17/2015:

Lisa Caspari in Der Anfang vom Ende Die Zeit 11.11.2015 takes note of how Merkel's attempt to create a short-term fix for this year's acute phase of the refugee problem is already looking like a failure.

Caspari takes the dissent withing the CDU/CSU against Merkel's refugee policies more seriously than I would. They look to me like the kind of political Kabuki on xenophobia that the CDU/CSU has used in the past, trying to have it both ways by having the leaders argue to respect law and human rights while dissenters argue for anti-immigrant, xenophobic position to protect their right flank politically. An ENSA poll commissioned by the sensationalist tabloid Bild-Zeitung is showing the far-right Alternative für Deutschland (AfD) as the third most popular party in Germany, after Merkel's coalition parties, the CDU/CSU and the SPD. But (CDU/CSU stoppen Umfrage-Absturz Bild-Zeitung 17.11.2015)

Yiannis Baboulias also describes the political tensions within the EU, even before last Friday's terrorist killings (The refugee crisis is tearing Europe apart Aljazeera America 11/05/2015. He also points to the cheap nationalist spirit Merkel and her CDU/CSU/SPD government promoted over the euro crisis:

The political divisions between the EU’s richer and poorer members are also growing. Treaties are being thrown out the window, as country after country is building walls and reinstating passport controls even for EU citizens. Activists took to the streets last weekend near Greece’s land border with Turkey, demanding to open the fence that was built there three years ago. They were met with riot police and tear gas. Opening the border is not a decision the Greek government can make alone; if they do so unilaterally, it’s almost certain every border north of Greece will be sealed. Greece would become a purgatory for hundreds of thousands of people who don’t want to be there. There is virtually zero chance European leaders will ever allow for this safe pathway to open.

As with the battle over austerity, the refugee crisis has turned into a class issue and a cultural divide. In northern Europe, the scorn facing “refugees” and “economic migrants” mirrors that facing “lazy, profligate southerners” in countries such as Greece and Spain. [my emphasis]

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