France, the European left and European austerity policies

Eva Roth writes in the Left Party paper Neues Deutschland (Europa: Hauptsache Sparen? 10.10.2017):

In der politischen Debatte war und ist selten davon die Rede, dass die Sparpolitik ein Problem für Millionen Europäer ist. Stattdessen werden Bürger gegeneinander in Stellung gebracht: Deutsche dürfen nicht für Griechen zahlen! Sozialleistungen werden zu Problemen umdefiniert: In Griechenland sind die Renten zu hoch! Frankreich droht an seinem Sozialstaat zu ersticken!

In Deutschland haben Politiker, denen soziale Fragen nicht wurscht sind, die Macron-Regierung zu Recht für die Arbeitsmarktreformen kritisiert. Dumm wäre es, wenn sie den Versuch der französischen Regierung, die europäische Sparpolitik zu beenden, deshalb nicht unterstützen würden.

[In the poilitical debate, there has been and is seldom said that austerity policy is a problem for millions of Europeans. Instead, citizens are set against each other: German shouldn't have to pay for the Greeks! Social services are redefined into a problem: In Greece, the pensions are too high! France is about to be smothered by its social state!

In Germany, politicians who are not indifferent to social questions rightly criticize the Macron government for its [austerian] labor market reforms. It would be dumb for that to become a reason not to support the French government's attempt to put an end to the Euorpean austerity policy.]

Sounds right to me. Or left, as the case may be.

Friday's Paris terrorist attack and the dream of rebooting history

The Austrian news service, Nachrichten.at, the website of the Oberösterreichische Nachrichten, ran an editorial on Saturday, Europa in Krieg (Europe At War) 14.11.2015:

Unser Mitgefühl gilt allen Opfern, unsere Solidarität Frankreich.

Dabei hat das wahllose gestrige Morden nicht Frankreich allein gegolten. Es ist ein Anschlag auf Europa, unsere Werte, unsere Form des Zusammenlebens, unsere Prinzipien, die offenen Grenzen, das Nebeneinander verschiedener Kulturen, die Freiheiten. Die Codewörter dazu sind eindeutig: Syrien, Islamischer Staat, radikaler Islam. Unabhängig von der Zahl der Toten, die sich stündlich erhöht, steht der gestrige Tag gleichauf neben 9/11, er wird die globale Politik verändern. Europa befindet sich im Ausnahmezustand. Uns muss klar sein.

Es wird sich wehren und den Kampf aufnehmen. Es wird ihn überall dort führen müssen, wo der Angriff auf unsere Werte seinen Ausgang nimmt. Auch dazu bestehen keine Alternativen.

[All the victims have our sympathy, France has our solidarity.

In the event, the innumerable {sic} murders yesterday did not affect only France. It is an attack on Europe, our values, our form of living together, our principles, the open borders, the co-existence of different cultures, the freedoms. The code words there are clear: Syria, Islamic State, radical Islam. Regardless of the number of dead, that keeps increasing, yesterday stands next to 9/11, it will change global politics. Europe finds itself in a state of emergency. We must be clear.

It {Europe} will defend itself and take up the fight. It will have to conduct it everywhere from which the attack on our value originated. And there are no alternatives available.]

The euro crisis alone should have taught everyone that TINA (There Is No Alternative) can be a bad guide to action. At least, if the goal is to actually solve problems.

This kind of pompous, melodramatic declaration is painfully familiar to Americans. At least to the majority who don't want the Permanent War for Permanent Peace to which Donald Trump, Dr. Ben Carson and the rest of today's Republican Party leaders are committed.

Realism and reason go out the window with this kind of posturing. And it's not just newspaper editors. The French President struck a similar tone (Adam Nossiter et al, Three Teams of Coordinated Attackers Carried Out Assault on Paris, Officials Say; Hollande Blames ISIS 11/14/2015):

“It is an act of war that was committed by a terrorist army, a jihadist army, Daesh, against France,” President François Hollande told the nation from the Élysée Palace, using an Arabic acronym for the Islamic State. “It is an act of war that was prepared, organized and planned from abroad, with complicity from the inside, which the investigation will help establish.”

The Oberösterreichische Nachrichten editorial is sadly reminiscent of the war and revenge talk after the 9/11 attacks in the US.

The 9/11 attacks were planned in Germany, but at least we didn't attack Germany. Early indications on the Paris attack Friday are that two of the places "from which the attack ... originated" could be Germany and Belgium. Hopefully, France will have the restraint not to invade either of those two countries. But defending our civilized values by bombing the crap out of some Arab (or maybe Persian) country has become a dreary cliche in American politics. So far, over 14 years after 9/11, our interventions and freedom bombs have left us with civil wars in Afghanistan, Iraq, Syria and Libya. The "war on terrorism" obviously hasn't done away with terrorism as a form of military conflict. And Europe is already experiencing a refugee crisis, many of whom are fleeing conflicts connected with our Afghanistan War and Iraq War, neither of which are entirely over.

The editorial's comment that the Paris attack "will change global politics" reminds me so much of the comment that Deputy Secretary of State Richard Armitage made to the Pakistani head of intelligence just after 9/11, "History starts today." But history didn't reboot itself. Nuclear-armed Pakistan is still supporting the Taliban in Afghanistan, and their long-standing dispute with nuclear-armed India over Kashmir still takes precedence over Washington's demands in their strategic decisions, in which the current Afghan government is a "pro-Indian" danger in their eyes. (James Mann quotes the Armitage comment in Rise of the Vulcans, 2004)

And the justifiable outrage over the Paris attacks won't make any French intervention in Syria any easier. History didn't reboot on Friday any more than it did on 9/11/2001. Many of the current problems in the Middle East go directly back to the ways in which Britain and France enacted their civilizing mission to the Arab countries after they dismembered the Ottoman Empire after the First World War. France got Syria as a colony, uh, "mandate." France and Britain took the lead in their most recent effort to civilize Libya with bombs, which the US joined. Even supporters of that intervention have a difficult time seeing the results as anything but grim.

Friday didn't "change global politics" in any way that will make an military intervention in Syria and Iraq easier. Outside powers will still have to make choices among supporting the Syrian government, of Daesh/ISIS, or the Al Qaeda affiliate there. They will still have to navigate the conflicting allegiances of Israel, Saudi Arabia, Iran, Turkey, Qatar and Russia.

It's not as though nationalist delusions haven't already done tremendous damage to the EU with the euro and refugee crises, neither of which are over. A massive escalation of war in Syria will make the latter even worse. More border controls, more (literal) walls between countries, more refugees. The actions to come by France and NATO can certainly "change global politics" in some way. Further disintegrative pressures on the EU could definitely have that effect.

If the comment, "Europe finds itself in a state of emergency," is meant for, say, this weekend, it is just routine hyperbole. But if France or the EU were to respond to Friday's attack by creating something like a permanent state of emergency, well, Carl Schmitt will be laughing heartily in whatever nasty precincts of the Great Beyond he currently finds himself.

I see that France is already dropping their freedom bombs, which will surely kill no innocent civilians as the terrorists did in Paris on Friday. (Francia lanza primeros ataques aéreos contra ISIS en Siria La Opinión/BBC Mundo 14.11.2015)

By the way, the Obama Administration is still dropping our freedom bombs in Libya: Libya IS head 'killed in US air strike' BBC News 11/14/2015. Also magically avoiding killing civilian noncombatants, no doubt.

Sad state of the EU

Wolfgang Münchau warns, "The eurozone is once again in a position where economic recovery is weakening before it really started, where the global risks are rising, and where inflation remains way off target." (Draghi must be more unconventional Financial Times 10/25/2015)

Yanis Varoufakis says, "Europe’s crisis is poised to enter its most dangerous phase." (Schäuble’s Gathering Storm Project Syndicate 10/23/2015)

Münchau there is writing more narrowly about the course of the eurozone economy. But Varoufakis is writing about that, too, as well as the political dimensions of the crisis. But in his FT piece, he notes of the Italian situation, "Matteo Renzi, the Italian prime minister, is currently using every trick in the book to circumvent European budget rules. His previously planned spending cuts are lower; the tax cuts are bigger — and of the wrong kind; and against the advice of the European Commission, he is now cutting unpopular property tariffs instead of labour taxes."

Varoufakis also discusses Italy's bucking of Germany's domination of the eurozone economy:

Renzi has come close to demolishing, at least rhetorically, the fiscal rules that Germany has defended for so long. In a remarkable act of defiance, he threatened that if the European Commission rejected Italy’s national budget, he would re-submit it without change.

This was not the first time Renzi had alienated Germany’s leaders. And it was no accident that his statement followed a months-long effort by his own finance minister, Pier Carlo Padoan, to demonstrate Italy’s commitment to the eurozone’s German-backed “rules.” Renzi understands that adherence to German-inspired parsimony is leading Italy’s economy and public finances into deeper stagnation, accompanied by further deterioration of the debt-to-GDP ratio. A consummate politician, Renzi knows that this is a short path to electoral disaster.

He also discusses the increasingly public dissent by the Socialist government of France to German misrule in the eurozone.

Ambrose Evans-Pritchard reports France signals EU treaty change to avert Brexit, warns on euro survival Telegraph 09/24/2015:

Mr Macron had even tougher words for Germany, warning that the eurozone will disintegrate in a storm of populist revolt unless Berlin drops its vehement opposition to fiscal union and large transfers to the poorer regions.

The former Rothschild banker said the currency bloc is fundamentally unworkable without a joint budget to back it up and will leave debt-stricken countries on the periphery in permanent trouble.

“If we don’t move forward, we are deciding the dismantling of the eurozone. We have to choose: is it a fixed exchange system or a monetary union?” he said.

He called the struggle over the euro a new Thirty Years war in Europe between Calvinists and Catholics. "The Calvinists want to make others pay until the end of their life. They want reforms or no contributions toward any solidarity. On the other side are the Catholics, largely on the periphery,” he said.

"At every eurozone summit, at every Eurogroup, we have this same dilemma between member states. We have to exit this religious war," he said. [my emphasis]

Varoufakis seems to approve Macron's use of "Calvinists" to describe the supporters of Angela Merkel's ruinous austerity economics.

Neither France nor Italy is mounting the kind of challenge that Greece did earlier this year. But their situations are also not nearly as desperate as Greece's is. But Münchau in Spiegel Online recommends Renzi's example along with that of the Canadian Liberal Party's leader Justin Trudeau as potential models for the German Social Democratic Party (SPD) as to how they might revive their steadily declining political prospects: by offering meaningful alternatives to austerity policies. (So könnte die SPD zum Erfolg zurückkehren 23.10.2015)

Michael Krätke writes (Das Problem ist Deutschland Der Freitag 14.12.014), "Die Euro-Krise signalisiert seit mehr als fünf Jahren, dass die Währungsunion umgebaut werden muss, um zu überleben." ("The euro crisis signaled more than five years ago that the currency union had to be reconstructed to survive.")

He's right. But Angela Merkel continues to milk the eurozone arrangements for the narrow benefit they can provide for Germany. And the walls between EU members continue to go up.

Meanwhile, a majority left bloc in the Portuguese Parliament is now confronting President Aníbal Cavaco Silva over his attempt to keep a pro-austerity government in power after the recent elections there. When it comes to enforcing austerity, Merkel and her allies aren't terribly scrupulous about this whole democracy business.

France and German austerity

I'm not inclined to give French President François Hollande much the benefit of the doubt on economic policy. He was elected President in 2012 on a platform of opposing Merkel's austerity policies and immediately capitulated to Merkel, agreeing to the Fiscal (Suicide) Pact that he had promised to demand be renegotiated. (See my Angela Merkel's policy for the euro crisis: put the pedal to the metal, head straight for the cliff 06/27/2012 and EU summit result: Angie pwns Hollande, rolling train wreck continues 06/29/2012)

But one thing that has emerged this year from Greece's desperate attempt to escape the Merkel-imposed austerity that has been destroying the Greek economy for years is that France sees itself in a position of definite subordination to Germany. Even an object of coercion. And Merkel's government sees France the same way.

As this report from France 24 shows, Joseph Stiglitz also perceives their relations in that France, France 'intimidated' by Germany on economic policy: Stiglitz 08/31/2015

"There is a kind of intimidation," Stiglitz, an outspoken opponent of austerity policy, said of the influence of Germany over the economic policy pursued by President Francois Hollande.

Stiglitz also said he agreed with former Greek finance minister Yanis Varoufakis that Germany's intransigence against Athens was aimed at striking fear in Paris and convincing the French government to continue austerity policies.

"The centre-left government in France has not been able to stand up against Germany" on its budget policy, eurozone policy, or on the response to the Greek crisis, said the former World Bank chief economist and advisor to US president Bill Clinton.

But what is France waiting for in fighting the austerity policies, if that's what they intend to do.

That's why it's hard for me to get optimistic over these reports. If France intended to take a stand against austerity, this year's negotiations with Greece were an ideal opportunity. But France backed Germany's punitive anti-Greek policies, even if they did grumble about them behind the scenes.

The advent of the new government in 2012 with a majority in Parliament would have also been an excellent time to openly resist. But they didn't then, either.

In another France 24 report states the issue this way (As Germany squeezes Greece, where does France stand? 02/20/2015):

It was not so long ago that France – not Greece – was the champion of Europe’s anti-austerity camp. In the run-up to his successful presidential bid in 2012, François Hollande was full of fiery rhetoric about ditching belt-tightening and promoting growth. The German chancellor, he said, would simply have to back down. As it turned out, Angela Merkel has barely budged.

In his first weeks in office, Hollande huffed and puffed but precious little happened. Paris did secure a vague pledge to promote growth in the EU, but Germany’s hallowed “stability pact” – which places a strict 3% cap on budget deficits across the EU – remained intact while Hollande’s cherished Eurobonds were junked.

I say that the French/German difference "emerged" during this year's negotiations with Greece. But there were press reports last year about such dissent, e.g., France's economy minister slams German austerity measures AFP/Yahoo! Finance 08/23/2014.

But why did that supposed resistance on France's part not get beyond closed doors during the critical negotiations this year with Greece.

So what will it take to get the Hollande government to resist Germany's Herbert Hoover/Heinrich Brüning economic policies?

The Varoufakis pseudoscandal

Greek police have investigated the Varoufakis pseudoscandal around his emergency planning as Greek Finance Minister for a "Grexit."

The found no "there" there. No surprise at all. (Polizei findet keine Spur von Varoufakis' Hacker-Manöver Süddeutsche Zeitung 08.08.2015)

Varoufakis is still keeping the international public informed via his blog. Here he reproduces an article, Vindicated, while Lagarde emerges a loser? – David Marsh in MarketWatch 08/04/2015. Marsh focuses on whether the IMF will come through with additional funds that were expected but not specifically agreed upon in the July capitulation forced on Greece by Germany:

Something is going badly wrong in relations between Christine Lagarde, the International Monetary Fund’s managing director, and the staff of the institution. Three times this month, in politically fraught negotiations over a Greek debt package, the IMF staff has disavowed its management over providing more loans to Greece as part of the third bailout deal of €82 billion to €86 billion that euro leaders stated they sealed on July 13.

More Varoufakis: "Plan B"

Former Greek Finance Minister Yanis Varoufakis is still causing consternation in the eurozone a Member of the Greek Parliament.

There was some melodramatic rending of garments and gnashing of teeth over a recording of Varoufakis on July 16 (Peter Spiegel, Varoufakis unplugged: the London call transcript FT Brussels Blog 07/27/2015; emphasis in FT transcript):

That would have created a parallel banking system while the banks were shut as a result of the ECB’s aggressive action, to give us some breathing space. This was very well developed and I think it would have made a very big difference, because very soon we could have extended it using apps on smart phones. It would become a functioning and functional parallel system. Then of course this would be euro denominated, but at a drop of a hat, it could be converted to a new drachma.

Now let me tell you, and I thank this is a quite fascinating story, what difficulties I faced. The general secretariat of public revenues, within my ministry, is controlled fully and directly by the troika. It was not under control of my ministry, of [unclear] ministry, it was controlled by Brussels. The general secretary is appointed, effectively, through a process that troika-controlled and the whole mechanism within. It’s like Inland Revenue in the United Kingdom being controlled by Brussels. I am sure as you’re hearing these words, your hair is standing up. Ok. So problem number one.

The general secretariat of information systems, on the other hand, was controlled by me as minister. I appointed a good friend of mine, a childhood friend of mine, who had become a professor of IT at Columbia University in the States, and so on, I put him there because I trusted him to develop the system. At some point, a week or so after we moved into the ministry, he calls me up and says to me: “You know what, I control the machines, I control the hardware. I don’t control the software.” The software belongs to the troika-controlled general secretariat for public revenues.

What do we do? So we had a meeting, just the two of us, nobody else knew. He said: “Listen, if I ask for permission from them to start implementing this programme then the troika will immediately know we are designing a parallel system.” Well, I said, “That won’t do, we don’t want to reveal our hand at this stage.” So I authorised him, and you can’t tell anyone that, this is totally between us, to hack ...

Despite the fainting-couch routine from Varoufakis' critics, this is pretty straightforward. (Peter Spiegel and Kerin Hope, Yanis Varoufakis defends ‘Plan B’ tax hack Financial Times 07/27/2015) There is no reason I can see to think the hack was actually done, since Prime Minister Alexis Tsipras didn't give Varoufakis the go-ahead for the additional preparations for a new national currency that would have required the hack:

So, we decided to hack into my minister’s own software programme in order to be able to bring it all, to just copy, just copy the codes of the tax systems’ website onto a large computer in his office, so he can work out how to design and implement this parallel payment system. We were ready to get the green light from the prime minister when the banks closed in order to move into the general secretariat of public revenues, which was not controlled by us but is controlled by Brussels, and to plug this laptop in and to energise the system.

I’m trying to convey to you the kind of institutional problems that we had, and institutional impediments to carrying out an independent policy for ameliorating the affects of having our banks being closed down by the ECB. [emphasis in FT transcript]

And even if they had done the hack, if it was a necessary move to set up a new currency in the face of ECB strangling their national financial system to force them into compliance with Angela Merkel's draconian austerity program, what's the problem?

And from what Varoufakis says, maybe François Hollande has been putting up more resistance to Merkel behind the scenes than I was aware of:

The French are terrified. They’re terrified because they know if they’re going to shrink their budget deficit to the levels that Berlin demands the Parisian government will certainly fall. There is no way that they can politically handle the kinds of austerity which is demanded of them by Berlin. And when I say by Berlin, I mean by Berlin, I don’t mean Brussels. I mean Berlin.

So they are trying to buy time. This is what they’ve been doing now, as you know, for a couple of years. They’ve been trying to buy time in terms of an extension of the time period during which they will have to reduce their deficit to below 3.5 per cent, 3 per cent, the Maastricht criteria in the Stability and Growth Pact.

At the very same time, Wolfgang Schäuble has a plan .... This is one of the very sweet moments in one’s life when one does not have to theorise, because all I did was to convey the plan as Dr Schäuble described it to me. The way he described it to me is very simple. He believes the eurozone is not sustainable as it is. He believes there has to be some fiscal transfers, some degree of political union. He believes for that political union to work without federation, without the legitimacy that a properly-elected federal parliament can render, can bestow upon an executive, it will have to be done in a very disciplinarian way. He said explicitly to me that a Grexit, a Greek exit, is going to equip him with sufficient bargaining power, with sufficient terrorising power in order to impose upon the French that which Paris is resisting. What is that? A degree of transfer of budget-making powers from Paris to Brussels. [emphasis in FT transcript]

Varoufakis' parliamentary office put out this statement, which he put on his blog (07/27/2015):

During the Greek government’s negotiations with the Eurogroup, Minister Varoufakis oversaw a Working Group with a remit to prepare contingency plans against the creditors’ efforts to undermine the Greek government and in view of forces at work within the Eurozone to have Greece expelled from the euro. The Working Group was convened by the Minister, at the behest of the Prime Minister, and was coordinated by Professor James K. Galbraith. (Click here for a statement on the matter by Professor Galbraith).

It is worth noting that, prior to Mr Varoufakis’ comfirmation of the existence of the said Working Group, the Minister was criticized widely for having neglected to make such contingency plans. The Bank of Greece, the ECB, treasuries of EU member-states, banks, international organisations etc. had all drawn up such plans since 2012. Greece’s Ministry of Finance would have been remiss had it made no attempt to draw up contingency plans.

Ever since Mr Varoufakis announced the existence of the Working Group, the media have indulged in far-fetched articles that damage the quality of public debate. The Ministry of Finance’s Working Group worked exclusively within the framework of government policy and its recommendations were always aimed at serving the public interest, at respecting the laws of the land, and at keeping the country in the Eurozone.

Regarding the recent article by “Kathimerini” newspaper entitled “Plan B involving highjacking and hacking”, Kathimerini’s failure to contact Mr Varoufakis for comment and its reporter’s erroneous references to “highjacking tax file numbers of all taxpayers” sowed confusion and contributed to the media-induced disinformation. The article refers to the Ministry’s project as described by Minister Varoufakis in his 6th July farewell speech during the handover ceremony in the Ministry of Finance. In that speech Mr Varoufakis clearly stated: “The General Secretariat of Information Systems had begun investigating means by which Taxisnet (Nb. the Ministry’s Tax Web Interface) could become something more than it currently is, to become a payments system for third parties, a system that improves efficiency and minimises the arrears of the state to citizens and vice versa.” That project was not part of the Working Group’s remit, was presented in full by Minister Varoufakis to Cabinet, and should, in Minister Varoufakis’ view, be implemented independently of the negotiations with Greece’s creditors, as it will contribute considerable efficiency gains in transactions between the state and taxpayers as well as between taxpayers.

In conclusion, during the five months of negotiations that gripped Europe and changed the debate throughout the Continent, the Ministry of Finance did everything possible to serve the public interest against many odds. The current media campaign to besmirch these efforts will fail to dent the legacy of a crucial five month struggle for democracy and common sense. [emphasis in original]

The Jamie Galbraith statement to which he links is also at Varoufakis' blog (07/27/2015):

I spent five months from early February through early July in close association with the Greek Finance Minister, Yanis Varoufakis, and was part of the Working Group that did contingency planning for potential attempts to asphyxiate the Greek government, including aggressive moves to force the country out of the euro. Since a great deal of public confusion has now arisen over this effort, the following should be stated:(1) At no time was the Working Group engaged in advocating exit or any policy choice. The job was strictly to study the operational issues that would arise if Greece were forced to issue scrip or if it were forced out of the euro.

(2) The group operated under the axiom that the government was fully committed to negotiating within the euro, and took extreme precautions not to jeopardize that commitment by allowing any hint of our work to reach the outside world. There were no leaks whatever, until the existence of the group was disclosed by the former Finance Minister himself, in response to criticism that his ministry had made no contingency plans when it was known that forces within the Eurozone were planning the forced exit of Greece.

(3) The existence of preliminary plans could not play any role in the Greek negotiating position, since their circulation (before there was a need to implement them) would have destabilized government policy.

(4) Apart from one late, inconclusive telephone conversation between MP Costas Lapavitsas and myself, we had no coordination with the Left Platform and our Working Group’s ideas had little in common with theirs.

(5) Our work ended for practical purposes in early May, with a long memorandum outlining major issues and scenaria that we studied.

(6) My work in this area was unpaid and unofficial, based on my friendship with Yanis Varoufakis and on my respect for the cause of the Greek people. [my emphasis]

Greek crisis: Tsipras' mistake in negotiations with the Troika

Georg Diaz in a thought-provoking column, Glossar zur Krise: Der Wandel in den Worten Spiegel Online 24.07.2015, talks about how the euro "crisis" has morphed into a permanent condition, a kind of state of emergency as normalcy.

So there will continue to be new chapters of the Greek crisis. Here I want to comment on what I understand to be the fault of Alexis Tsipras' government in the recent negotiations.

My perspective is very different from the disputes within his Syriza Party. One of Tsipras' responses to his internal Syriza critics is provided by The Greek Analyst, Tsipras’s nonpaper slamming SYRIZA dissenters 07/21/2015.

Tsipras made a very practical call taking into account the risks and opportunities within the very narrow range of options that German Chancellor Angela Merkel had successfully established as the dominant leader in the EU. Syriza had a clear policy of solving their debt crisis within the eurozone. It was the program on which they were elected. It was established in internal discussions and disputes within Syriza. It was a clear distinction from the explicit goal of leaving the eurozone and establishing a separate currency, which everyone seems to assume would be called the drachma, like the last separate Greek currency.

That goal was advocated by the Communist Party and the far-right Golden Dawn, as well as by some members of Syriza. But that approach was rejected by Syriza. Part of Syriza's hope, which presumably persists, is that hopefully sooner than later, they will gain effective allies in other eurozone countries. Upcoming Portuguese and Spanish elections could provide some of that support. In fact, Merkel's hardline opposition to any departure from the draconian austerity program in Greece is due to her determination to scare Portuguese and Spanish voters from elected anti-austerity governments.

How realistic Syriza's hope in that regard is, is another question. Recent public grumbling by the social-democratic governments of France and Italy have provided some encouragement on that front. On the other hand, France's President François Hollande was elected in 2012 promising to oppose Merkel's austerity program. Once elected, he hardly made any pretence of resistance to it. Maybe one of these days, he will actually get around to it.

Prime Minister Matteo Renzi of the Democratic Party in Italy has even more rational reasons than the government of France to oppose austerity measures. But since taken office in early 2014, he has been singing from the neoliberal hymnbook pretty faithfully. And the language of faith is appropriate here. Austericide economics is very much a faith-based devotion, not evidence-based economics. Susanna Böhme-Kuby in Bulldozer Renzi Blätter für deutsche und internationale Politik 07/2015 describes his demonstrated commitment to deflationary, neoliberal policies.

The one big miscalculation that I can see in the Tsipras government's approach to the negotiations is that, given the enormous determination by Merkel and her Finance Minister Wolfgang Schäuble to crush Greece's political resistance to their austerity program was that to attain meaningful concessions within the eurozone, he had to be prepared to actually exit the eurozone. And that Tsipras wasn't willing to do.

Wolfgang Münchau describes this correctly, if in a way somewhat less sympathetic to Tsipras' dilemma than I would be, in Grexit remains the likely outcome of this sorry process Financial Times 07/19/2015

Alexis Tsipras should never have hired Yanis Varoufakis as his finance minister. Or he should have listened to him, and kept him on. But instead the Greek prime minister chose the worst of all options. He followed Mr Varoufakis’ advice of rejecting the offer of the creditors - until last week. But having done this, Mr Tsipras committed a critical error by rejecting Mr Varoufakis’ plan B for the moment when the country’s banks closed down: the immediate introduction of a parallel currency - IOUs issues by the Greek state but denominated in euros. A parallel currency would have allowed the Greeks to pay for their daily transactions when cash withdrawals were limited to €60 a day. A total economic collapse would have been avoided.

In Wie Deutschland den Euro sprengt Spiegel Online 20.07.2015, he emphasizes how shortsighted a self-destructive Germany's behavior in those negotiations really were. The short-term destruction, of course, hits Greece. The longer-term destruction will eventually wreck Germany's leadership in the EU if it is not corrected by future, post-Merkel governments. There he writes:

Die Griechenlandkrise hat uns gezeigt, dass eine ökonomisch nicht nachhaltige Situation in kürzester Zeit alle politischen Tabus sprengt. Das Primat der Politik kann sich langfristig nicht über ökonomische Logik hinwegsetzen.

Aus ökonomischer Sicht ist Griechenland im Euroraum nicht mehr lebensfähig. In diesem Punkt hat Wolfgang Schäuble recht. Aus griechischer Sicht wäre ein Austritt besser.

[The Greece crisis has shown us that an economically unsustainable situation can int the shortest time blow up all political taboos. The primacy of politics cannot in the long run prevail over economic logic.

From an economic point of view, Greece is no longer viable in the euro area. On this point, Wolfgang Schäuble is correct. From the Greek point of view, an exit would be better.]

Christiane Amanpour interviewed Varoufakis for CNN International ( Mick Krever, Varoufakis: 'We made mistakes' 07/20/2015):

Varoufakis said he had sympathy for his former boss [Tsipras].

"He was faced with a choice: Commit suicide or be executed."

"Alexis Tsipras decided that it [would] be best for the Greek people for this government to stay put and to implement a program which the very same government disagrees with."

"People like me thought that it would be more honorable, and in the long term more appropriate, for us to resign. This is why I resigned. But I recognize his arguments as being equally powerful as mine."

The video is here, Varoufakis: 'We made mistakes' 07/20/2015:

Why debt sustains corruption in Greece and vice versa

Christos Koulovatianos, John Tsoukalas Vox 20 July 2015

Olaf Boehnke (Greece and Germany's game of chicken European Council on Foreign Relations 07/17/2015) holds out optimism that Merkel may come to her senses:

Although many observers expected that Angela Merkel and Wolfgang Schäuble would have been feted for their victory upon their return to Berlin, the exact opposite has been the case. The tersest reaction came from Thomas Strobl, vice chairman of the Christian Democrats (CDU) and Schäuble’s son-in-law. Prior to the CDU’s steering committee meeting after the euro summit last Monday he said: "The Greek has now annoyed long enough." While Strobl has since been heavily criticised for this remark, this chauvinistic attitude does reflect strongly the sentiment of many people in Germany and in Strobl’s party in particular. ...

These elements - plus the broadening criticism of German hegemony in Europe- may well bring her to the point where she has to demonstrate political leadership in a way Mario Draghi did when he announced that the ECB will “do whatever it takes to preserve the euro”. Once all Eurozone member states have agreed to the new negotiations it would be wise for Merkel to demonstrate her political commitment to the Greek people with a speech in front of the Greek parliament or a public place in Greece in order to reinforce what she has been best at: getting conflicting parties back to the table and finding a compromise. In her speech today, she paid special attention to the importance of the French-German cooperation. If she is really interested in achieving a reliable solution for the current crisis, she and Francois Hollande must include Alexis Tsipras in finding a political agreement which gives him and the Greek people real, not forced, ownership of such a deal.

I don't think Merkel sees the world that way. She the leader of the economically most powerful country in the eurozone and she's done very well from her German point of view with her strategy of domination. One of the greatest risks for political and business leaders is there is an inevitable tendency to continue doing what has been successful in the past. Unfortunately for the eurozone and for the periphery countries especially, what has been successful for Merkel and her hardline neoliberal outlook is horribly destructive for the countries practicing her austerity policies, especially for Greece.

Jamie Galbraith and Ambrose Evans-Pritchard on Greece

The Institute for New Economic Thinking has an interview by Lynn Parramore with economic Jamie Galbraith, The Greek Revolt Against Bad Economics Threatens European Elites 07/09/2015. Definitely worth reading the whole thing. Here's part (emphasis in original):

What happened on the 26 th of June was that Alexis (Tsipras) came to realize, at long last, that no matter how many concessions he made he wasn't going to get the first one from the creditors. That's something Wolfgang Schäuble had made clear to Yanis (Varoufakis) months before.

But it was hard to persuade the Greek government of this because its members naturally expected, as you would when you're in a negotiation, that if you make a concession the other side will make a concession. That isn't the way this one worked. The Greeks kept making concessions. They'd present a program and the other side would say —as you can read in the press — oh, no, that's not good enough. Do another one. Then they'd complain that the Greeks were not being serious.

What the creditors meant by that was this: when you come around and agree to what we tell you, then you're serious. Otherwise not. This is the way bad professors treat extremely recalcitrant students. You come in with a paper draft and they say, no, that's not good enough. Do another one.

Galbraith also refers to this article, which he says "is very much on the mark": Ambrose Evans-Pritchard, Europe is blowing itself apart over Greece - and nobody seems able to stop it Telegraph 07/07/2015:

This ultimatum came as a shock to the Greek cabinet. They thought they were on the cusp of a deal, bad though it was. Mr Tsipras had already made the decision to acquiesce to austerity demands, recognizing that Syriza had failed to bring about a debtors' cartel of southern EMU states and had seriously misjudged the mood across the eurozone.

Instead they were confronted with a text from the creditors that upped the ante, demanding a rise in VAT on tourist hotels from 7pc (de facto) to 23pc at a single stroke.

Creditors insisted on further pension cuts of 1pc of GDP by next year and a phase out of welfare assistance (EKAS) for poorer pensioners, even though pensions have already been cut by 44pc.

They insisted on fiscal tightening equal to 2pc of GDP in an economy reeling from six years of depression and devastating hysteresis. They offered no debt relief. The Europeans intervened behind the scenes to suppress a report by the International Monetary Fund validating Greece's claim that its debt is "unsustainable". The IMF concluded that the country not only needs a 30pc haircut to restore viability, but also €52bn of fresh money to claw its way out of crisis.

Varoufakis makes an 11th-hour appeal for reason and decency to German Chancellor Angela Merkel

Greek Finance Minister Yanis Varoufakis in a column today reminds Germany that the United States took the lead in allowing Germany the chance to build a prosperous peacetime economy after the Second World War, including massive write-offs of Germany's sovereign debt: A Speech of Hope for Greece Project Syndicate 06/04/2015.

He cites this 09/06/1946 speech in Stuttgart by Secretary of State James Byrnes, officially titled Restatement of Policy on Germany (Stuttgart).

Varoufakis writes:

Prior to Byrnes’ speech, and for a while afterwards, America’s allies were not keen to restore hope to the defeated Germans. But once President Harry Truman’s administration decided to rehabilitate Germany, there was no turning back. Its rebirth was underway, facilitated by the Marshall Plan, the US-sponsored 1953 debt write-down, and by the infusion of migrant labor from Italy, Yugoslavia, and Greece.

Europe could not have united in peace and democracy without that sea change. Someone had to put aside moralistic objections and look dispassionately at a country locked in a set of circumstances that would only reproduce discord and fragmentation across the continent. The US, having emerged from the war as the only creditor country, did precisely that.

Today, it is my country that is locked in such circumstances and in need of hope. Moralistic objections to helping Greece abound, denying its people a shot at achieving their own renaissance. Greater austerity is being demanded from an economy that is on its knees, owing to the heftiest dose of austerity any country has ever had to endure in peacetime. No offer of debt relief. No plan for boosting investment. And certainly, as of yet, no “Speech of Hope” for this fallen people. [my emphasis in bold]

Surprising pushback in Europe against Angela Merkel's threats to Greece

Austrian Chancellor Werner Faymann (SPÖ) is somewhat surprisingly pushing back against German Chancellor Angela Merkel on her threats toward Greece, along with Austrian Finance Minister Hans Jörg Schelling (ÖVP).

They are referring specifically to comments by Merkel, her Finance Minister Wolfgang Schäuble and her sadly compliant Social Democratic Grand Coalition junior partners that a "Grexit," a Greek exit from the eurozone, would be no big deal and easily manageable. It's a crass threat to the Greek voters that they better not elect SYRIZA, the anti-austerity party headed by Alexis Tsipras.

Faymann called the threats "unnecessary Wichtigtuerei," the latter meaning something like "a lot of hot air."

Nachrichten.at (Faymann: "Grexit-Diskussion ist unnötige Wichtigtuerei" 06.01.2015) quotes Faymann as follows (my translation follows):

Ich halte es für entbehrlich, einem Land, das vor Wahlen steht, auszurichten, was man da alles wie sieht. Die griechische Bevölkerung hat das Recht, ein Parlament und eine Regierung zu wählen, wie sie das für richtig halten. Griechenland hat in der Vergangenheit die Verpflichtungen eingehalten. Für mich gibt es da keinen Zweifel, dass das auch in Zukunft so ist.

[I consider it inappropriate to tell a country that stands before elections how they should see things. The Greek population has the right to elect a Parliament and a government that they think is right. Greece in the past has complied with its obligations. For me, there is no doubt that it will also be the same in the future.]

In the context, this is a clear statement of support for Greece and a criticism of Merkel's arrogant, bullying threats.

The part about Greece's "obligations" is more ambiguous. Greece can't meet its current debt and budget-reduction obligation without enduring years more of depression.

On the other hand, when the current conservative government of Greece is still claiming it will meet those obligations, the Austrian Chancellor can't very well take a position that the eurozone should recognize reality on Greece's "obligations" when the Greek government isn't defending such a position itself.

Even the head of the Österreichische Institut für Wirtschaftsforschung (WIFO) is objecting to Merkel's highwire threats about kicking Greece out of the eurozone:

Auch Wifo-Chef Karl Aiginger hält die Debatte über einen Euro Austritt Griechenlands für "absolut entbehrlich". Sie würde Griechenland und Europa schaden und die Autorität von EU-Kommissionschef Jean-Claude Juncker untergraben.

"Griechenland hat hohe Opfer auf sich genommen, aber zu wenig an einer eigenen Strategie für die Jugend, neue Arbeitsplätze und Gründung von neuen Firmen gearbeitet. Zu viele alte Privilegien, von Schiffsreedern, Militär, Kirche, übergroßem Staatssektor und die Dominanz von Old Boys Networks wurden erhalten, mit geringem positiven Einfluss europäischer Programme zur Veränderung der Strukturen und zur Erneuerung", sagte Aiginger.

Europa brauche Griechenland, weil es ein Brückenkopf sowohl zu Nordafrika, als auch zu Arabien und zum Schwarzmeerraum sei. "Ohne Griechenland wird die Integration des Balkanraumes in das Europäische Projekt gestoppt", warnt Aiginger am Dienstag.

[Even WIFO chief Auch Wifo-Chef Karl Aiginger considers the debate about an exit of Greece from the euro to be "absolutely inappropriate." It would damage Greece and Europe and undermine the authority of EU Commission President Jean-Claude Juncker.

"Greece has accepted great sacrifices, but has worked too little on their own strategy for the youth, new jobs and the creation of new businesses. Too many old privileges of the big shippers, generals, the Church, a bloated state sector and the dominance of Old Boys Networks have been maintained, with little positive influence of the European program for structural change and renewal," said Aiginer.

Europe needs Greece, because it is a bridgehead to North Africa, as well as to Arabia and to the Black Sea area. "Without Greece, the integration of the Balkan area in the European project will stop," warned Aiginger on Tuesday.]

Aiginger is repeating the austerity mantra of "reform," not surprisingly for the head of a very establishment, business-oriented group. But he sounds pretty alarmed at Merkel's arrogant threats.

Other countries seem to be positioning themselves to take advantage of the opening a SYRIZA victory in Greece would create. Nachtrichten.at notes that Italy's social-democratic-led government has so far been restrained in its public statements. But it quotes Gianni Pittella, chairman of the Social Democratic caucus in the European Parliament and an ally of Italian Prime Minister Matteo Renzi, "Das Ausscheiden Griechenlands aus dem Euro hätte einen Domino-Effekt für die gesamte Eurozone" ("The separation of Greece from the euro would have a domino effect for the whole eurozone").

French President François Hollande, who nominally resists Merkel's hardline austerity but has a pitiful record when it comes to actually resisting it, also said on Monday that Greece alone would decide on its continuing participation in the eurozone. About as decisive as soggy toast, but still a distancing from Merkel's arrogant posture.

The mainstream El País editorializes in Respetad a los griegos 06.01.2015 warning against the possibility of a new contagion of crisis around the potential German confrontation with a new anti-austerity government in Athens. El País also expresses alarm over the threats that "some European institutions and leaders" have been making to the Greeks on how they should vote - this basically means Angela Merkel and the German government - and warns they could be counterproductive.

In a statement that sounds downright nostalgic, the editorial notes:

Hay que respetar la libertad y la voluntad de los griegos — siempre que se plasme en alternativas respetuosas con el Estado de derecho — por principio democrático, porque la Unión es una comunidad de derecho y una federación de democracias.

[The freedom and the choice of the Greeks have to be respected - as long as they are expressed as respectable alternative within the rule of law - for the democratic principle, because the Union is a community of law and a federation of democracies.]

It's becoming harder for anyone to pretend that Angela Merkel observes such niceties. And the EU's much-discussed "democratic deficit" is becoming harder and harder to ignore. (See also, Hungary, Orbán government)

Without specifying Angela Merkel as the main leader doing threats, the editorial notes that the "stupid general threat of expulsion from the euro" is not only "imprudent" but could facilitate "catastrophe."

Also in El País, Claudi Pérez (La Comisión Europea enfría los temores de salida del euro en Grecia 05.01.2015), quotes a former adivseity supporter:

“Es indignante que Berlín chantajee a los griegos si eligen democráticamente a Syriza, que ha prometido un alivio de la deuda que el país necesita desesperadamente”, apuntó el analista Philippe Legrain, ex asesor de José Manuel Barroso. “Ese tipo de comportamientos, condicionados por los intereses egoístas de los acreedores, han transformado la comunidad de iguales que era la eurozona en una cárcel para los deudores”, , añadió. “La austeridad ha sido desastrosa en Grecia y si los líderes europeos no ofrecen un acuerdo favorable a Atenas la crisis será inevitable.

["It is outrageous that Berlin is blackmailing the Greeks if they democratically elect SYRIZA, which has promised a reduction of the debt that the country desperately needs," indicates the analyst Philippe Legrain, ex-adviser to José Manuel Barroso. "The type of behavior, conditioned by the egoistic interests of the creditors, has transformed the community of equals that was the eurozone into a debtors' prison," he added.]

Wow, I guess it's not just "heterodox" economist like Jamie Galbraith and Yanis Varoufakis or New Keynesians like Paul "the Shrill One" Krugman saying stuff like this any more!

Germany and the eurozone depression

"I woke up this morning/And none of the news was good" - Steve Earle, "Jerusalem"

The business press is paying more attention lately to the euro crisis. A report by Stefan Riecher and Simon Kennedy, The European Central Bank May Have to Defy Germany Bloomberg Businessweek 10/09/2014 provide an interesting example of reporting stuck in a narrow model - though not as narrow as German Chancellor Angela Merkel's "ordoliberalism." They seem to think that only central bank action counts as legitimate public stimulus:

The ECB boss [Mario Draghi] ended Europe’s sovereign debt crisis by promising in 2012 to do “whatever it takes” to save the euro. Investors ask if he’s willing to do the same to save the economy. That leaves Draghi under pressure to introduce a full-bore quantitative easing program, one that would make more money available for cheap lending by having the ECB buy government bonds held by the banks, companies, and others. [my emphasis]

What the ECB ended in the summer of 2012 was an acute phase in the euro debt crisis, not the whole thing. Greece, Portugal, Spain and probably Italy are likely to have to take debt haircuts, in the case of Greece about as certainly as such things can be, with the debt-to-GDP ratio up in the 170%-plus range.

They recognize that an economic solution for the eurozone depression would involve an increase in inflation. Duh! They're on the verge of deflation if not already into it. But Riecher and Kennedy seem to think only the mystical arts of the central bank can bring such needed inflation that would accompany economic growth:

An ECB program of government bond buying, by making even more cheap credit available, would promote spending, which in turn would nudge inflation upward. Because of the lower yields on sovereign debt, ECB bond purchases would encourage a weaker euro as investors seek higher returns elsewhere. A soft euro would make exports more competitive and increase the likelihood of inflation as imported commodities such as oil became pricier. It would also help improve the balance sheets of banks. Draghi may have to act soon: How many more back-to-back recessions can Europe take?

Of course, the main barrier to even that modest kind of effort is Merkel and her Herbert Hoover/Heinrich Brüning economics:

The stumbling block is Germany, which doesn’t want the ECB conducting bailouts in disguise. Buying sovereign bonds — as the U.S. Federal Reserve and a string of other central banks have done — is anathema to the Germans. The ECB, by buying sovereign debt from the member states of the European Monetary Union, would come very close to financing individual governments, something the founding treaty of the EMU bans. And if the ECB did buy that debt, it would also likely lessen the pressure on countries such as Greece and France to put their budgets in order and make their economies more productive. , president of Germany’s Bundesbank, has already spoken out against bond purchases and objected to some of the ECB’s recent stimulus steps. If Germany’s economic weakness worsens, the resistance to the program may diminish. The latest data from Germany show a severe contraction in its manufacturing sector. [my emphasis]

Jens Weidmann was an Angie-bot, but he now may be more hardline than Merkel, though not because Merkel has started acknowledging basic macroeconomics.

This is a Euronews report on Germany pressuring France to tighten austerity, EU finance ministers aim to defuse Paris, Berlin row 10/13/2014:

Interest rates on Greek bonds spiked last week, after the ruling New Democratic Party staged a confidence vote as a political stunt to boost their pitiful standing. Niels Kadritzke refers to polls showing that SYRIZA is showing more support right now than the two government parties combined. SYRIZA party leader Alexis Tsipras has made it clear that as head of government he would push for a relief from the draconian economic policies that Merkel has imposed on Greece via the shamelessly compliant EU.

Elaine Moore et al report for the Financial Times (Market turmoil casts further doubt over Europe revival 10/16/2014):

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For the first time this year, Greece’s benchmark bond yields rose above 9 per cent as mounting political instability raised doubts about Athens’ ability to sustain its heavy debt burden. European countries hit hardest by the eurozone debt crisis also saw their borrowing costs jump at rates not seen for a year. ...

Across wider Europe, global investors moved to reallocate their money away from debt issued by countries at the region’s periphery into German bonds, considered the safest and most liquid debt market.

The move sent the yield on 10-year German Bunds to 0.72 per cent during the day – a historic low. Yields on equivalent Italian, Spanish and Portuguese debt rose by about 30 basis points in the morning before falling back.

But Angie loves her some Hoover/Brüning economics, so she's demanding that the eurozone stay the course, as Old Man Bush and Shrub too liked to say when they were Presidents. Stefal Wagstyl and James Politi report (Financial Times 10/16/2014):

“All member states must accept in full the strengthened rules,” she told the German parliament.

As well as rebuffing French president François Hollande and Italian premier Matteo Renzi, who are demanding that Brussels allow them more budget flexibility, Ms Merkel seemed intent on calming the world’s financial markets, which saw some of their sharpest sell-offs of the week on Thursday, including a steep drop in Greek bonds. ...

Paris and Rome have argued that their embrace of structural reforms, such as a recent Italian move to overhaul a sclerotic labour market, should afford them some relief from the fiscal rules.

As the EU’s biggest economy, Berlin has always had the key say in that debate and has privately been urging the European Commission to take a tough line. Ms Merkel said the financial crisis in Europe was “not permanent” but neither had it been “sustainably overcome”.

Merkel is worried about fighting the bond vigilantes and further slam down the purchasing power of eurozone citizens to coax the Confidence Fairy into her long-delayed arrival.

Fighting the eurozone depression? Not so much.

That report gives the Italian debt-to-GDP ratio as 134%. Possibly sustainable with economic recovery, unsupportable in a continued depression.

Horand Knaup and Christian Reiermann write about pressure on Merkel in Out of Balance? Criticism of Germany Grows as Economy Stalls Spiegel International 10/14/2014:

[Finance Minister Wolfgang Schäuble:] "In Germany, we have shown in recent years that solid finances and better growth are not contradictory -- they are necessary complementary elements," he said on Monday in Luxembourg, where he was for a meeting of euro zone finance ministers. He added that calls for state spending were "old fashioned."

Criticism of Schäuble's position is also mounting in Germany. "The decision to balance the budget is a risky one," says Marcel Fratzscher, the head of the German Institute for Economic Research (DIW) in Berlin. "If the economy continues to weaken, that goal will no longer be sustainable."

If the government were to stick to its guns, he argues, it would have to implement budget cuts that would further hasten the crisis. Instead, he argues, the finance minister should take advantage of the "wiggle room" provided in the balanced budget amendment to Germany's constitution "to increase public investments." Under the law, which was approved by parliament in 2009 and goes into full effect in 2016, the federal government is permitted maximum annual borrowing of 0.35 percent of gross domestic product, the equivalent of about €10 billion next year. "That would send a strong message to the German business community and to Europe that Germany takes its responsibility seriously," Fratzscher says.

But Merkel's government seems set on achieving a balanced budget. Even worse, the current government made the very decisions that are now robbing it of the means it would need to counter a possible economic downturn. [my emphasis]

Social Democrats opposing eurozone austerity? Can this be true?

I'm in a bit of a hopeful mood at the moment. So I'm willing to interpret it as some kind of progress that we're seeing signs that the Social Democratic parties in Europe are realizing they need to make more of a show of opposing German Chancellor Angela Merkel's austerity policies that are wrecking the "periphery" countries of the eurozone.

I'm referring to a report in Spiegel Online (Gregor Peter Schmitz, Debatte um Euro-Spardiktat: Vier gegen Merkel 18.06.2014) that describes how the leaders of four Social Democratic parties are making such a show: French President François Hollande, German SPD leader Sigmar "Sigi Pop" Gabriel, Social Democratic candidate for EU President in May's elections Marting Schulz, and Italian Prime Minister Matteo Renzi.

Renzi's success in the May European elections in keeping his Democratic Party in first place and the Five Star Movement a distinct second is probably a big part of the impetus for this. He took a position that austerity measures should be lightened in the short run in exchange for a commitment to even more drastic neoliberal measures to reduce wages and living standards in the near future. And that's what the four Social Democratic leaders are demanding, according to Schmitz' report.

I believe that the Social Democrats see a need to raise their profile among their base voters if they don't want to lose their status as the largest left party in various countries. And it's good that they recognize that they have to at least pretend to not be such enthusiastic fans of austerity as they have been during the current depression.

But as a change of policy, I just don't buy it yet. For one thing, the messengers are questionable. Hollande campaigned in 2012 on a promise that he would oppose Merkel and insist on a renegotiation of the EU Fiscal Suicide Pact before he would recommend the French Parliament to approve it. But as soon as he got elected, it was embarrassing how fast he scrambled to cave in to Merkel and start promoting austerity, not to mention looking eagerly for wars in which to get involved.

So I'm skeptical that Hollande is really ready to stand up to his pal Merkel now. As Bush the Magnificent, Liberator of Peoples and Scourge of the Heathen famously said, "Fool me once, shame on ... shame on you. Fool me, can't get fooled again."

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Renzi replaced the previous Prime Minister of his own party sounding like he was more eager than his predecssor to push "reforms," the neoliberal euphemism for reducing salaries and wages, deregulation, and cutting public services.

SPD Chairman Sigi Pop is current Vice Chancellor and Economics Minister in Merkel's Grand Coalition (GroKo) government. In a thoroughly lackluster campaign last year, the SPD also mildly criticized Merkel's austerity measures, especially as they touched German voters, but didn't give much attention to articulating any kind of alternative to Merkel's eurozone policies. And after their second-place finish, they couldn't wait to become junior partner (again!) in a Merkel-headed GroKo government.

Martin Schultz as leader of the Social Democrats in the European Parliament has generally been a faithful Angie-bot on European issues. And he's part of the German SPD, as well.

And these four are going to leading the charge against Angie-nomics?

Miracles happen. Depressions and losing elections have been known to focus politicians' minds.

But the real test is whether they will seriously fight Merkel on this, or whether it's just political Kabuki. When the SPD seriously threatens to pull out of Merkel's GroKo and form a left government in Germany with the Greens and the Left Party, then I'll take Sigi Pop and Angie-bot Schultz more seriously.

Schmitz also features this recent quote from Sigi Pop:

Wir Deutschen stehen heute besser da als viele andere Staaten, weil wir uns mit Gerhard Schröders Agenda 2010 ein hartes Reformprogramm auferlegt haben. Aber auch wir haben damals Zeit gebraucht, um die Staatsschulden zu senken.

[We Germans are in better shape today than many other states because we imposed a difficult reform program with Gerhard Schröders Agenda 2010. But we also needed time then to reduced the public debt.]

Agenda 2010 was basically the Social Democrats' bigger capitulation to the neoliberal agenda, and its effects limited German income and decreased job security. If Sigi Pop is praising Agenda 2010 while he's suggesting that, well, maybe we should possibly think about easing up on the austerity in the eurozone for a brief time as long as the neoliberal "reforms" are enforced even more intensely soon after - he's not serious about fighting austerity.

Tags: angela merkel, austerity economics, eu, euro, european union, france, françois hollande, spd

Resisting European austerity: Greek version

The European Parliamentary elections don't present any immediate challenge to Angela Merkel's austerity policies that currently dominate the eurozone.

But it does set off some new dynamics that will influence the course of the austerity battle from this point on. In Greece, SYRIZA came out as the leading party in a national election for the first time.

The pro-austerity writer John Psaropoulos reassures us in Left on top The New Athenian 05/26/2014 that the hippies aren't taking over. Yet.

Greece has had centre-left governments before, but never has a left wing party taken the top slot in any election. Syriza was founded in 1988 as a coalition of Greece's two parliamentary communist parties.

They're Commies, people! Also, you kids git off my lawn!!

Prime Minister Antonis Samaras went on the defensive. "Those who tried to turn this into a referendum have failed," he said. "They didn't manage to create instability or uncertainty, nor the ungovernability they sought." However, he did signal a change in government policy. "I have listened to people carefully. I know their problems. I know what has to change and how. And we will proceed apace!"

And that necessary change would be ...??? More austerity with a nicer smile?

Syriza also scored victory in two out of Greece's 13 administrative regions in local government elections, which were held simultaneously to European ones. Those victories offer Syriza a chance to prove itself in the first executive positions the party has ever held.

The follow is a telling paragraph:

Overall, parties that in 2012 espoused fiscally responsible, pro-austerity policies (New Democracy, The Olive and Democrtic Left) shed 16 points in their voter bases; but the anti-austerity parties (Syriza, Independent Greeks, Communists and Golden Dawn) remained neutral as a group. Voter indifference and a fall in turnout claimed four points, but fully one half of the migration went to The River, a centrist new party that has not positioned itself on austerity, and Laos, a party that has flip-flopped on austerity. [my emphasis]

For the Very Serious People, Herbert Hoover/Heinrich Brüning economics in a depression is "fiscally responsible."

Also he notes that the Social Democratic PASOK party, which had so badly discredited itself by embracing austerity policies and knuckling under shamelessly to Berlin had to take on a new identity to be competitive electorally any more:

In 2012 Pasok took 12.3 percent of the vote. Yesterday the Olive, the socialists' new vehicle, took eight percent. Nonetheless, their leader, Evangelos Venizelos, jubilantly declared, "We can keep our head above water. We can breathe as a nation once more. We can set wrongs right. We can recapture lost ground."

Well, sounds good.

But then he adds: "Venizelos said the country had decided to maintain a stable course out of the crisis and austerity policies." Oh, yeah, a "stable course." Meaning austerity policies and depression for an indefinite numbers of years into the future. But with a spiffy new name, I'm sure the voters will come rushing back! I mean, hey, they lost only a third of their vote percentage from two years ago, let the good times roll!

Presumably, the poor showing of the austerity policies - or the "fiscally responsible" parties, if you prefer - has something to do with events since the current conservative-led government was elected in 2012, as Psaropoulos notes: "Although it managed to balance the Greek budget last year and produce an unforeseen primary surplus of almost three billion euros, very little material benefit has reached beleaguered taxpayers." Strangely, the beauty of a balanced budget and the joy of following Angela Merkel's dictates while unemployment is stuck and ruinous highs and the majority of people are experiencing declines in living standards due to internal devaluation - are just lost on a lot of voters. Democracy is so inconvenient!

SYRIZA leader Alexis Tsipras is calling for a new general election in Greece. Psaropoulos thinks it's possible that such an election could put Tsipras in as leader of a SYRIZA-headed coalition government. But he's hoping that Greek voters have finally grown up enough to start worrying about all this austerity stuff, though: "Greeks are tired of the pro-austerity versus anti-austerity rhetoric that has defined the political debate for four years. They have put up with austerity for so long, that it is now accepted as an inevitable part of the policy mix."

Sure, jobs and opportunity are soo-ooo overrated! Besides, the lazy kids can move to Germany or somewhere and get a job if they can't find one at home, right?

Tags: alexis tispras, angela merkel, austerity economics, eu, euro, european union, france, greece

European elections (2): austerity and nationalism

The conservatives/Christian Democrats of the European People's Parties (EPP) came out in the lead in this weekend's European Parliament elections. Whether the EPP's lead candidate for the Presidency of the EU Commission, Jean-Claude Juncker, will actually win the office is not yet clear. The selection is formally made by the EU Council of governments, and German Chancellor Angela Merkel and British Prime Minister David Cameron may insist on a different President. Even though Juncker is from their European conservative party.

In the following, I look at some of the national results, based on the results as of this writing as reported by, among others, European Parliament results BBC News, which as of this writing shows 740 of the 751 EP seats determined. The EU's website's European elections 2014 page has background information on the functioning of the EP. The final, official accounts may vary somewhat from what I'm using here.

The strong showing of the far right nationalists in Britain and France is certainly notable. But it's hard to say how much of that vote represents a protest by pro-Europe voters who are upset with austerity policies is hard to say at this point. I suspect it's small. Because those parties are blatantly nationalistic and xenophobic.

The critical economic issue at stake right now is the continuance of Merkel's brutal and destructive austerity policies. The conservatives/Christian Democrats, the Social Democrats and the liberals are generally committed to austerity, perhaps better described as austericide. The Greens, who are seated to the right of the Social Democrats in the German and Austrian parliaments, are pro-Europe and anti-austerity. So are the parties associated with the European Left Party, mostly notably right now SYRIZA in Greece.

So the results of the EP election is to leave pro-Europe/pro-austerity policies with a clear majority. It's worth noting that with the Social Democratic base in particular, party loyalty probably won out over opposition to austerity in some non-trivial amounts. And the Social Democratic campaign did stress the need for jobs and public investment, though without opposing austerity and without getting out of the general realm of neoliberal cliches, in which "education" and "public investment" are largely empty slogans.

But the Greens and the Left did offer clear criticism of austerity policies while maintaining a definite pro-Europe position. So, on the whole, only the Green and Left votes can be counted as clearly pro-Europe/anti-austerity votes. The Five Start Movement in Italy should probably also be regarded as a pro-Europe/anti-austerity vote.

Germany: The good news here is that Merkel's conservative Christian Democratic Union (CDU) got the fewest votes it ever has in a European Parliamentary election; the bad news is that the CDU still got the highest vote percentage. A Público headline linked below calls it a "Pyrrhic victory." But out of 96 European Parliament seats, the CDU won 34, the Social Democrats (SPD) 26; since the SPD supports Merkel's Herbert Hoover/Heinrich Brüning austerity economics, that is more than a three-fifths vote for the Hoover/Brüning policies that are wrecking the eurozone and the possible the EU as well. The SPD improved their voting percentage, which their current leadership is virtually certain to take as a sign of approval for their participation in the German government as the junior coalition partner to the CDU - along with their endorsement of Hoover/Brüning austerity policies.

The Free Democratic Party (FDP), the liberal party (which means hardline "free market" in Europe) won four seats, still maintaining themselves (barely) as a viable electoral alternative. Their four seats would have to be counted as pro-austerity, as well, making a two-thirds majority for pro-Europe/pro-austerity policies.

The Greens got 12 seats, the Left Party seven. Both parties were pro-Europe and critical of Merkel's austerity policies, making only 20% of the seats pro-Europe and anti-austerity. The Left Party still can't seem to get traction, even with the stagnation of wages in Germany. The Greens are nominally more conservative than the SPD - they are seated to the right of the SPD in the national Bundestag - but on the urgent European policy issue of Merkel's austertiy program, the SPD supports it and the Greens and the Left oppose it.

The nationalist, far-right Alternativ für Deutschland (AfD) also won seven seats, with a somewhat lower popular vote than the Left Party. This will produce no small amount of hand-wringing in the German media, justifiable as far as it goes. It's not clear to me to what extent voters attracted by the AfD's anti-EU stance could be won over by parties to the left of the CDU. Not a lot, I'm guessing, because both the Greens and the Left Party took a distinctly critical but pro-EU position in this election, the Left Party more so. The AfD is basically pulling votes from nationalist righwingers for whom the CDU is rightwing enough.

France: The results of two years with a Socialist majority in Parliament and a Socialist President, François Hollande, are downright depressing. Maybe a party whose voting base is composed of workers and union members was ill-advised to adopt Hoover/Brüning austerity policies and a foreign policy of jumping into any war in Africa or the Middle East that they can find.

Hollande's Socialists came in third, with 13 seats out of a total 71. Sarkozy's conservative UMP came in second with 20 seats. And the far-right National Front (FN) party of Marine Le Pen came in first, with 24% of the vote and 24 seats. The liberals took seven seats and the Greens six, with the Left grouping taking four seats. The combined seats of Socialists, conservatives and liberals represent less than a majority for pro-Europe/pro-austerity parties; the FN's 24 seats would be anti-Europe and I assume in practice pro-austerity. With the Greens and the Left counting as pro-Europe/anti-austerity, that sentiment pulled a smaller percentage in France than in Germany.

Austria: With 18 MEP (Member of European Parliament) seats, the Christian Democratic Austrian People's Party (ÖVP) won five seats, the Social Democrats (SPÖ) also five with a second-place vote percentage, followed by the anti-Europe rightwing Freedom Party (FPÖ) with the Greens winning three seats on a 14% vote, and the protest party Neos polling wining 8% of the vote.

Cyprus: With six seats at stake, the conservatives, the Left and the Social Democrats each won two, with the vote percentage in that order from high to low.

Greece: Alex Tsipras' pro-Europe anti-austerity SYRIZA party (technically a coalition of parties) won the largest vote at 30% to conservative New Democracy's 26%. The Social Democratic Party, one of the two major parties until the 2009 debt crisis exploded, got one seat. At the moment, they seem to be on the verge of being replaced completely by SYRIZA. They discredited themselves radically in knuckling under to Merkel's austerity policies, which have damaged Greece more severely than any other country. The far-right and violence-inclined Golden Dawn party, frequently described (not without reason) as a neo-Nazi party, took third place. (Grecia vota contra la austeridad y le da la victoria a Syriza Público 26.05.2014))

With 21 seats total for Greece, SYRIZA gets 7 seats and the Communist Party 1, the conservative ND 6, Golden Dawn 2 and another far-right grouping 2, the Social Democrats 1 and a closely allied new center-left-liberal party Potami 1, and another anti-Europe party 1.

Ireland: The conservatives came out ahead, with the Left and the liberals following in that order. The reporting I'm seeing on the Irish outcome at the moment is somewhat confusing, but the anti-austerity position represented by second-place Sinn Fein is clearly significant: "A near meltdown for Labour, the junior coalition partner, and a swing to Sinn Fein that left that party jubilant, led the [conservative] Prime Minister Enda Kenny to concede: 'Sometimes in politics you get a wallop.'" (David McKittrick, Election results 2014: Sinn Fein profits as voters reject austerity policies The Independent 26.05.2014) This continues a trend we've seen as well in the "periphery" countries Greece and Italy, in which the Social Democrats' embrace of Herbert Hoover/Heinrich Brüning austerity politics has boosted the support for newly-rising left parties, SYRIZA in Greece and the Five Star Movement in Italy.

Italy: From the BBC News European Parliament results: "EU projected result as of 08:49. Centre-left PM Matteo Renzi won a strong 40% [31 of 73 seats], Beppe Grillo's Five Star [17 seats] achieved 22% and ex-PM Silvio Berlusconi's Forza Italia 16% [17 seats]." This was a significant fall in Five Star's vote from last year's national election.

Portugal: The Socialist Party (social-democratic) won seven seats, the conservative party (which is confusingly named the Social Democratic Party in Portugal) won six, the Left three.

Spain: Five years of crisis and austerity policies can evidently shift voters' perspectives. The two leading parties in the 2009 EP vote, the conservative People's Party (PP) and the Socialist Party (PSOE), came in first and second respectively as they did in 2009. But with a notable difference. The PP's vote in 2009 was 43%, 27% in 2014; the PSOE's 29% in 2009, 24% in 2014. In 2014 out of 54 seats, the PP wins 16, the PSOE 14, the Left six, the liberals three, the Greens two. While it was an electoral shock to the PP and PSOE, the pro-Europe/anti-austerity votes can't be said to be that strong in these results.

One hopeful note in Spain is that the leader of the PSOE, the pro-austerity and neoliberal Alfredo Pérez Rubalcaba, announced that he will step down as party leader in July, with the new leader to be selected in primary votes. [Update 05/28/2014: what Rebalcaba initially proposed is that the Secretary General of the party, his current position, be selected by a special party convention of delegates. The next lead candidate for the party for national elections would be selected later in primary elections, in his proposal.] This gives the PSOE base a chance to push the leadership away from the neoliberal, pro-austerity course. (Iñigo Aduriz, Rubalcaba sitúa en julio su despedida y delega en su sucesor la convocatoria de primarias Público 26.05.2014)

See also:

Juncker gegen Schulz: Personalpoker nach EU-Wahl Salzburger Nachrichten 26.05.2014

ÖVP verteidigt ihren ersten Platz - FPÖ und Grüne gewinnen stark - Neos bei acht Prozent Standard
25. Mai 2014

SPD legt deutlich zu, Union bleibt stärkste Partei-Liveticker Die Welt 25.05.2014

Elecciones europeas 2014 Público

Pírrica victoria de Merkel, subida del SPD y un escaño para los neonazis, según los sondeos Público 25.05.2014

Jairo Vargas, Alexis Tsipras, el peligro real para la Europa de los mercados Público 24/05/2014

Syriza gana en Grecia y Le Pen en Francia EFE/Público 25.05.2014

Tags: angela merkel, austerity economics, ep election 2014, eu, euro, european union, france, françois hollande, greece

European elections (1)

For those of us who see the current austerity policies in the eurozone and in the EU more generally as disastrous, the percentage of the clearly pro-Europe but anti-austerity votes in this weekend's European Parliament elections is disappointing, if not actually that surprising. The fact that the far-right, anti-Europe parties in Britain and France (UK Independence Party and Marine Le Pen's National Front) came in first place in those countries is a big deal.

According to this projections chart from BBC News, the conservatives/Christian Democrats came in first at 28%; the Social Democrats at 21%, "Other" which would include the UKIP and the French National Front at 21%. The two pro-Europe but anti-austerity parties, the Greens and the European Left, came in fifth and sixth, respectively, with a combined 15%. The Christian Democrats, the Social Democrats and the Liberal party are all pro-Europe and pro-austerity, and they collectively pulled 58%. So there's little hope this election will be seen in Berlin as any kind of impediment to continuing with the austericide economic program. Alexis Tsipras' Left Party did come in a clear first place in Greece, the country most damaged by the austerity policies so far. In Italy, the ruling pro-austerity Social Democrats got 40%, the pro-Europe/anti-austerity Five Star Movement 22%.

Depression conditions encouraging the growth of far-right parties in Europe: who could ever have foreseen such a thing? (Duh!)

Tags: austerity economics, ep elections 2014, eu, european union, france, greece

Euro crisis in the latest GDP numbers

Stephan Kaufmann in Von Deutschland abgehängt Frankfurter Rundschau 16.05.2014 discusses the latest GDP reports on Europe and the eurozone (here from Eurostat). Kaufman writes:

In der Euro-Zone tut sich ein tiefer Riss auf: Während die deutsche Wirtschaft voranprescht, fallen andere Länder zurück. Zwischen Januar und März stagnierte die Produktion in Frankreich. In Italien, Portugal, Finnland und den Niederlanden ging sie sogar zurück. ...

Obwohl die starke deutsche Konjunktur im ersten Quartal den Euro-Zonen-Durchschnitt in die Höhe trieb, blieb das Wirtschaftswachstum der Währungsunion schwach. Mit einem Plus von nur 0,2 Prozent gegenüber dem Vorquartal blieb es deutlich hinter den Erwartungen der Ökonomen zurück, die im Durchschnitt mit 0,4 Prozent Wachstum gerechnet hatten.

[In the eurozone a deeper divide is opening: While the German economy dashes ahead, other countries are falling behind. Between January and March, production in France stagnation. In Italy, Portugal, Finland and the Netherlands it even shrank.

Even though in the first quarter the German upswing drive up the uerozone average, economic growth remains weak in the currency union. With an increase of only 0.2% compared to the previous quarter, it remains significantly below the expectations of the economists, who on the average had counted on growth of 0.4%.]

But it's not all peaches and cream in Germany, either. Chancellor Angela Merkel hasn't yet inflicted the kind of ruinous austerity on her own countries that she has inflicted on much of the eurozone.

Heinrich Flassbeck notes that unusually mild winter weather in Germany helped boost Germany growth in the first quarter, allowing more building activity for example than one would normally expect this time of year. (Die deutsche und europäische Konjunktur im Frühjahr 2014: Gemischte Zeichen, aber keine Besserung in Euroland flassbeck-economics 16.05.2014) And further:

Und selbst aus der Zahl für Deutschland kann man nicht sicher auf eine durchgreifende Belebung hierzulande schließen. Denn die Einkommensverhältnisse der Mehrheit der Menschen haben sich nicht in einer Weise verbessert bzw. werden das in naher Zukunft angesichts der getroffenen Lohnvereinbarungen auch nicht so tun, dass man blind auf einen anhaltenden Schwung beim privaten Verbrauch zählen könnte (jedenfalls nicht ohne eine Senkung der Sparquote der privaten Haushalte). Darüber hinaus lässt die Schuldenbremse den öffentlichen Konsum wie die öffentlichen Investitionen nicht aus ihrem starren Korsett. Abgesehen von Witterungseffekten mag der Wunsch nach Betongold als Reaktion auf die Eurokrise in Verbindung mit den extrem niedrigen Zinsen den Bauinvestitionen auf die Sprünge geholfen haben und auch noch in naher Zukunft eine gewisse Rolle spielen.

Doch schon im März – das ist der letzte verfügbare Berichtsmonat – ist der von uns am meisten beachtete Indikator für die laufende monatliche Entwicklung in Deutschland, die Auftragseingänge in der Industrie, erheblich zurückgegangen ...

[And even from the number for German, one cannot conclude with certain of a thorough economic reanimation here in our country. Because the income conditions of the majority of people have not improved in any way, that is, in light of the wage agreements that have been struck, that will also not have the effect that one can count on a continuing uptick in private consumption (in any case not without a reduction of the savings rate of private households). And besides that, the debt brakes {Merkel's austerity policies now embedded in the German Consitution that severely limits public borrowing and deficit spending} will not release public consumption like public investments out of their tight corset. Besides the effects of the weather, the desire for safe real estate investments {Betongold} as a reaction to the euro crisis together with the extremely low interest rates helped construction investments to jump up and still even in the future may play a certain role.

But already in March - that is the last available reported month - the most followed indicator for long-term monthly development in Germany, the new contracts for industry, has materially fallen back.]

Flassbeck reads the latest numbers as showing that the eurozone outside Germany is basically at zero growth, meaning the "nicht über die Stagnation hinausgekommen sind" ("have not emerged from stagnation").

In the case of Italy, which has been practicing Merkel's Herbert Hoover/Heinrich Brüning heavily for a while, and of France, which more recently began embracing the dubious blessings of Hoover/Brüning policies, the benefits at the moment are, well, dubious: "Die hartnäckige Stagnation lässt sich insbesondere für Frankreich und Italien konstatieren, wo immer noch keinerlei Aufwärtstendenz zu erkennen ist. Italien liegt jetzt ganz nahe bei seinem absoluten Tiefpunkt aus dem Jahr 2009" ("The stiff-necked stagnation is particularly to be seen in France and Italy while there is still not any kind of upward tendency to be seen. Italy now lies near its abolute low point of the year 2009").

And within Germany, the largest corruption of the neoliberal system has frozen the political system from effectively addressing the real economic problems of the majority even of Germans. Jacob Augstein writes in Die Deutschen lassen sich zu viel gefallen Spiegel Online 15.05.2014:

Die Reichen waren in Deutschland noch nie so reich wie heute. Sie haben sich in den vergangenen zwanzig Jahren schamlos selbst bedient - und man hat sie gewähren lassen. Hat man darauf vertraut, dass die Parteien, die Gewerkschaften, die Medien sich der Sache der Gerechtigkeit annehmen würden? Die Arbeitnehmer wurden im Stich gelassen. Am schlimmsten haben die Gewerkschaften versagt.

"Danke, lieber Herr Sommer, für Ihre Hingabe und Ihre Hartnäckigkeit, für Ihre Weitsicht und auch für Ihre Kompromissbereitschaft, wenn sie nötig wurde." So hat Bundespräsident Gauck gerade den scheidenden DGB-Chef gelobt. Tatsächlich. Unter Sommer waren die Gewerkschaften so "kompromissbereit", dass die Vorstände der DAX-Unternehmen in aller Ruhe ihr Salär von 500.000 DM im Jahr 1989 auf durchschnittlich sechs Millionen Euro im Jahr 2010 wachsen lassen konnten - erst zwanzigmal so viel wie ein durchschnittlicher Arbeitnehmer, dann zweihundertmal. Rechtfertigung? Keine. Eine Frage der Macht, nicht der Moral.

Auch auf die Medien war kein Verlass. Als zum letzten Mal eine große Gewerkschaft die Machtfrage stellte - die IG-Metall im Osten im Jahr 2003 - da nannte der SPIEGEL das "absurd", die "Süddeutsche" sprach von "Irrsinn", das "Handelsblatt" von "Anmaßung" und die "Zeit" von "Machtspielen zum falschen Zeitpunkt". Die Wahrheit ist: Die Medien haben den Weg in die Ungleichheit freundlich begleitet. Der Metallerstreik scheiterte damals jämmerlich. Und seitdem gilt in Anlehnung an ein berühmtes Wort über einen Politiker der britischen Konservativen: Ein Angriff der deutschen Gewerkschaften ist wie der Angriff eines toten Schafes.

The wealthy in Germany were never so rich as today. They have shameless helped themselves in the past 20 year - and they were allowed to do so. Did one trust that the parties, the unions, the media would take on the matter of justice? The worker were left in the lurch. The unions have failed the most seriously.

"Thanks, dear Herr Sommer, for your commitment and your stubbornness, for your broad vision and also for your readiness to compromise when it was necessary." So praised Federal President Gauck the departing DGB chief. {The DGB is the umbrella union alliance in Germany, roughly similar to the AFL-CIO in the US.} Just so. Under Sommer the unions were so "willing to compromise" that the boards of the DAX firms could calmly let their salaries grow from DM 500,000 in the year 1989 to an average of six million euros in the year 2010 - first 20 times a much as the average work, then 200 times. Justification? None. A question of power, not of morality.

There was also no reason to trust the media. The last time a large union made a test of strength - the IG-Metall union in the east in the year 2003 - Der Spiegel called it "absurd,", the Süddeutsche [Zeitung] spoke of "lunacy," the Handelsblatt of "arrogance" and Die Zeit of "power plays at the wrong time." The truth is: the media followed the way into inequality cheefully. The metal workers' strikes failed miserably at the time. And since then, to use a famous saying about a British Conservative politician: An attack by the German unions is like being savaged by a dead sheep. {The saying apparently came from Denis Healey about Sir Geoffrey Howe.}

All I can say in conclusion is:

Heckuva job, Angie, heckuva job!

Tags: angela merkel, austerity economics, eu, euro, european union, france, italy, germany