The Genoa Bridge collapse, neoliberalism, and the Italian left-right coalition government

The deadly collapse of the Morandi Bridge in Genoa, Italy, on August 14 has focused the attention of numerous journalists and commentators on the economic situation of Italy.

• Hilary Clarke and Gianluca Mezzofiore, Genoa bridge collapse came after years of warnings CNN 08/16/2018
• Italy bridge collapse: Genoa death toll rises to 43 BBC News 08/19/2018
• Franz Kössler, Genua: Der Einsturz der Brücke und der Politik Falter 34:2018 22.08.2018 (momentan hinter Abo)
• Walter Mayr, "Schakale und Lügner" Der Spiegel 34:2018 (18.08.2018)
• Thomas Migge et al, "Ein Sommernachtsalptraum" Profil 34:2018 20.08/.2018
• Paola Subacchi, Hard Lessons from Genoa Project Syndicate 08/21/2018
• Christian Wüst in "Tod im Tragwerk" Der Spiegel 34:2018 (18.08.2018) goes into some of the technical issues around the collapse.

The political background

The EU establishment has been in a tizzy since the current Italian government took office in June. It is a coalition of the left-populist Five Star Movement (5Stars) and the right-populist Lega. The Prime Minister from the senior coalition party 5Stars is Giuseppe Conte and Matteo Salvini, the longtime head of the junior partner Lega, is the Deputy Prime Minister and Interior Minister, the latter being the country's chief law enforcement official. Conte is an attorney with very little experience in politics. So it's no surprise that Salvini seems to be the actual government leader on policy.

Salvini has been enthusiastically pressing forward an anti-immigrant policy, which has included banning ships carrying passengers rescued at sea from the high risk immigrant route from Northern Africa. (Alexander Stille, How Matteo Salvini pulled Italy to the far right The Guardian 08/09/2018) Such a ban is a serious rejection of international law. Stefan Schmidt, a sea captain with experience in Mediterranean rescues who is current commisioner for asylum and refugee issues in the German state of Schleswig-Holstein, in this interview talks about the broader issue of sea rescues in the Mediterranean, not simply in relation to Malvinini, in this German-language interview, Stefan Schmidt: "Menschenleben stehen bei mir an erster Stelle" Deutsche Welle 19.08.2018:

Salvini's actions on the chronic refugee crisis are anti-EU and narrowly nationalistic.

And defenders of democracy and the EU see good reason to worry about the direction he's going, as Stille reports:

Salvini’s rise to power has heightened concerns in Italy about the escalation of racist and xenophobic violence in the country. Dozens of attacks on black people and Roma have been recorded in the last year, all over Italy, from Treviso in the north to Gioia Tauro in the south, including Florence and Rome. The attacks range from drive-by shootings with air guns, in which the attackers were reported to shout “Salvini!” to the assassination of a Malian trade unionist campaigning for fair pay for migrant workers. An Italian athlete of Nigerian descent, Daisy Osakue, the Italian under-23 champion discus thrower, was hit in the eye by an egg thrown from a car. Police have been pursuing attackers and making arrests, but the government has been more reticent. After a torrent of criticism for his anti-migrant policies – culminating with the headline “Get behind me, Salvini” on the cover of Italy’s largest Catholic magazine – Salvini responded with a favorite phrase of Mussolini: “many enemies, much honor.” He also insisted that the idea of widespread Italian racism was “an invention of the left”.

He's also making a show of forming common fronts with other nationalist (and pro-Putin) groups, even though the whole notion in a Nationalist International is inherently bizarre. Even though that's exactly what far-right parties in Europe are trying to have. Salvini's stunt this week is to advertise his fondness for Viktor Orbán, the Prime Minister of Hungary, which joins Poland as one of two countries in the EU who seem to have become authoritarian enough to no longer meet basic EU requirements for democracy and rule of law.

Lorenzo Tondo reports in Matteo Salvini and Viktor Orbán to form anti-migration front Guardian 08/28/2018. "The Italian interior minister, Matteo Salvini, and the Hungarian prime minister, Viktor Orbán, have said they are “walking down the same path” after discussing the formation of a common anti-migration front they said would oppose the policies of the French president."

Diplomatically, it also strengthens the impression that Malvini and the Lega are in reality the dominant party in the Italian coalition.

But it's not only the anti-EU refugee policies that causes the EU establishment to worry. The new government is also committed, for the moment, to defying Angela Merkel's austerity politics, which is treated like religious truth in EU economic policy.

The obsession with austerity politics of the Herbert Hoover/Heinrich Brüning cast has meant, among other things, delays in upgrades, repair, and expansion of infrastructure. That's been true even in Germany, where Merkel's governments have been restrained on infrastructure projects.

This is a familiar story. When faced with budget shortages, deferred maintenance is one of the first budget-cutting methods governments resort to. Paola Subacchi describes the larger problem this way:

In Western Europe and the United States, bridges, roads, and railways built in the 1950s and 1960s during the post-war reconstruction and economic boom are now old, obsolete, and overused. Does any developed economy have a long-term strategy to manage its essential infrastructure? Are risks being correctly assessed and mitigated? What are the trade-offs between maintaining and replacing infrastructure approaching the end of its life? And how can citizens influence the public debate about who should pay for infrastructure and where it should be built?

It's not just in Italy this problem is occurring. It's a chronic feature of the neoliberal era ushered in by Ronald Reagan in the US and Maggie Thatcher in Britain.

This attitude toward public infrastructure is seriously different from the time before "when demand-management policies went out of fashion," as Subacchi puts it:

The Morandi Bridge was inaugurated in 1967 with great pomp by Italy’s president. Back then, political capital was built around such projects – and not only because of patronage and corruption. Nowadays, modern democracies seem stuck around the trade-off between collective benefits from infrastructure and individual rights, and large projects are often the kiss of death for a politician’s career. ...

With the can continuing to be kicked down the road while existing infrastructure approaches its expiration date, we can expect many more such headlines in the not-too-distant future.

She also means that more broadly than just for Italy.

The bridge

I'm not going to claim to have any special insight into the technical problems involved. Christian Wüst's article talks at length about how the collapse was supposed totally unpredictable. Wüst explains that the bridge was made from a steel-and-concrete combination whose flaws from rust are very difficult to evaluate.

Only very near the end do we read this:

Nur zwei weitere Brucken dieser Art (Patent Morandi M5) wurden damals gebaut, eine in Venezuela, eine in Libyen. Das Konzept erwies sich als Irrweg. Der Beton schützt die Spannelemente nicht auf Dauer var Rost, wie anfangs gedacht, er kann den Verfall sogar beschleunigen, verhindert eine zuverlässige Prüfung und erhöht unnötig die Masse der Konstruktion.

[Only two other bridges of this type (patent Morandi M5) were then built, one in Venezuela, one in Libya. The concept proved to be wrong. The concrete does not protect the elements of the span from rust over a long time, as was originally thought. It can even accelerate the decline, hinders an adequate examination, and increase the mass of the construction unnecessarily.]

In other words, it sounds like there was good reason for the company responsible for the bridge to be very concerned that the bridge posed serious risks. And that measures needed to be taken to mitigate the risks: repairs, restrictions on traffic and vehicle weights, even replacements of the bridge or parts of it.

The neoliberal bridge and Italian populism

What's that you say? The company that was responsible for it? Why, yes, the bridge was being managed by a private, for-profit company, the holding company Atlantia. According to Franz Kössler, Atlantia (he uses the older name Autostrade per l'Italia) "controls about half of the Italian highways." (my translation)

The Morandi Bridge was originally built a state-owned company, IRI, and opened in 1967. But it long since came under the neoliberal gospel, of which privatization is one of the cardinal dogmas. IRI itself, which as Franz Kössler observes, was once "Italy's largest employer and a center of economic miracle of the postwar era," now has "long since fallen victim to the privatization policy."

When a major bridge collapse like this happens, the citizens obviously should demand accountability for the problem and, at a minimum, a serious and honest answer as to what happened in the disaster. And democracies should expect that their government will take the necessary steps to make sure the country's public infrastructure is safe and adequate.

And the Italian government parties are pointing fingers. Prime Minister Conte and 5Stars are blaming Atlantia and calling attention to the large ownership role of the Benetton family of Italian oligarchs. And, as Walter Mayr reports, Atlantia's operational earnings in 2017 was €2.6 billion ($3 billion at current rates).

But Mayr's Spiegel article treat the idea that there could have been any neglect on the part of Atlantia with contempt. And takes the idea that Italy should reduce it's budget deficit to zero without any reference to actual economic conditions as self-evidently sensible.

Which comes to the left side of Italian populism. Both 5Stars and the Lega want to get out of the current fiscal constraints imposed by the EU. Malvini has blamed the EU for the bridge callapse, which conveniently fits with the Lega's narrow-nationalist, anti-EU outlook..

But the Hoover/Brüning economic policies dominant in the EU are bad. And while I've seen no reason to think the EU specifically directed neglect of the Morandi Bridge, it's also not just demagoguery to link the event to EU austerity policies. And Italy's economy does need a boost, even apart from rickety bridges.

Walter Mayr and and Franz Kössler make a point the some 5Stars figures had opposed a proposed road project that could have reduced traffic on the Morandi Bridge. And Profil that 5Stars "rejects big infrastructure programs on principle for ideological reasons." (my translation) Whether that is more a real ideological commitment of 5Stars or more of a "gotcha" point, I don't know. What does seem obvious is that some serious infrastruction

Italy's banks have been wobbly for a while and their economy is still slow in recovering from the Great Recession that began a decade ago. The Conte-Salvini (or Salvini-Conte?) government is pushing for a more expansive fiscal policy than Merkel and the EU want to allow.

But the combination of shaky banks and a government pushing back against Herbert Hooverish fiscal constraints imposed by the EU could bring a re-run of the Greek debt crisis and the eurozone confrontation of 2015. The Profil article cited above observes:

Die Populisten hatten Zeit genug, um erkennen zu konnen: Budgetdisziplin macht unpopular. Das, in Kombination mit ideologischer EU-Feindseligkeit, konnte Italien zum Sprengsatz der Eurozone machen.

[The {Italian} populists had enough time {since the 2008 economic crisis} to recognize: budget discipline makes you unpopular. That, in combination with ideological hostility to the EU, could make Italy into an explosive charge.]

Daniel Gros takes a wonkish look at the current risks in Italian risk spreads: Fiscal versus redenomination risk VoxEU 08/29/2018.

Former Greek Finance Minister Yanis Varoufakis notes in With his choice of prime minister, Italy’s president has gifted the far right Guardian 05/28/2018:

While it is true that Italy is in serious need of reforms, those who blame the stagnation on domestic inefficiencies and corruption must explain why Italy grew so fast throughout the postwar period until it entered the eurozone. Was its government and polity more efficient and virtuous in the 1970s and 1980s? Hardly.

The singular reason for Italy’s woes is its membership of a terribly designed monetary union, the eurozone, in which the Italian economy cannot breathe and which consecutive German governments refuse to reform.

The Genoa bridge collapse is another reminder that chronic austerity has longterm costs. The metaphorical collapse of the banks may be far more damaging to the economy and become the immediate cause of a new euozone crisis. But literal collapses are happening, too. And costing people who have the misfortune of being on the wrong bridge at the wrong time their lives.

Italy and the refugees rescued from the Mediterranean Sea on the Aquarius ship

Italy is still refusing to let the ship Aquarius with refugees rescued from the Mediterranean dock in Italy. (Steve Scherer and Massimiliano Di Giorgio, Italy and France try to patch up migrant row, draw papal rebuke Reuters 06/14/2018)

This is the new Italian face on immigration, and a grim, ugly start for the new left/right coalition government of Five Stars and the League. Interior Minister Matteo Salvini of the League is the public face of the policy. But the new Prime Minister Giuseppe Conte is going along with it. And, as reported by Dominik Straub und Irene Brickner in Nach geschlossenen Grenzen nun auch gesperrte Häfen Standard 13.06.2018, the ban on letting the ship with people in distress rescued from the ocean, a illegal position in international law that is the way it is for good reasons, could not have been implemented without the consent of the Five Stars Transportation Minister.

This is not a question of national security at all. It's a very cynical, bad-faith posture by the Italian government seeking to exploit nationalist hatreds as a basic part of its political project. As Reuters notes, "The [Italian Prime Minister and the French President] confirmed a lunch meeting on Friday to discuss 'new initiatives' on immigration, a day after Italian Interior Minister Matteo Salvini announced an 'axis' with Germany and Austria to fight illegal migration." (my emphasis)

Salvini's talk has to be taken seriously, though like our American xenophobes, we can't assume they have any particular devotion to accuracy in their public claims. Austria does have an anti-immigrant government, a coalition of conservative Christian Democrats and hard-right Putinists, i.e, the Freiheitliche Partei Österreichs (FPÖ), which has a formal "working agreement" with Putin's Russia United party. (Rechtspopulisten und Putin-Partei rücken enger zusammen FAZ 19.12.2016) The FPÖ/Russia United agreement commits them to the "strenthening of friendship and raising the young generation in the spirit of patriotism and joy in labor." Kind of an "Arbeit macht Frei" kind of thing, apparently.

But whatever political "axis" there may be among the Italian League and the Austrian governing parties, both Italy and Austria are EU members and both are still bound by general international law. In Germany, Interior Minister Horst Seehofer, a rightwing leader from Bavaria who is from the CSU, one of the parties in Angela Merkel's national coalition, has been playing footsie lately with Austria's Christian Democratic Chancellor Sebastian "Babyface" Kurz on anti-foreign politics. But, for all of her government's failings on immigration issues - and the general impression in the US that Merkel is very pro-immigration is a mistaken one - she isn't making a "axis" with Italy to drown immigrants in the Mediterranean Sea. The strange courtship between Chancellor Babyface and is actually aimed politically against Merkel.

(Dont' even try to shoehorn the mixing of internal and external policies in the EU into the framwork of the discussion on the Russian meddling in the US elecitons; you'll just give yourself a headache.)

Not to understate what a prick Seehofer is being on the subject. He is claiming that as Interior Minister, he has the authority to turn back refugees at the border, Angela Merkel and international law be damned. (Asylstreit: CSU droht mit Alleingang und Ultimatum ORF 147.06.2018) So far, this looks more like a weird political stunt than an actual move on immigration policy. But I wouldn't want to underestimate the possibility of it turning into something worse.

Immigration and the eurozone are currently the two biggest threats to the future of the EU. Both have been hampered by nationalist posturing by EU countries. Although as the de facto leader of the EU, Germany, and Angela's Merkel's governments in particular, bear the heaviest responsibility for it. I think of the both as chronic crises, both of which hit acute turns in 2015. Both are currently "solved" by classic Merkel extend-and-pretend non-solutions, forcing Greece to become Bangladesh via draconian austerity policies, on the euro front, and by contracting out the solution of the Mediterranean refugee problem to Turkey, Italy, and Greece. Both are highly unstable solutions.

The sad part is that the general shape of realistic solutions are very clear. The eurozone either has to be unwound with a return to national currencies, or change it into an optimal currency area with a common budget, shared public debt obligations, and "transfer union" structures.

With immigration, the broad solution is also clear: stop supporting wars in the Middle East, whether by direct intervention, facilitating American or Russian intervention, or selling arms to belligerent parties; get real about the fact that mass immigration to Europe is for all practical purposes a permanent situation that requires a structured, systematic sharing of burdens, i.e., accepting refugees, including, yes, the richer countries like Germany and Austria; and, systematic development work in North Africa to provide safer conditions and better opportunities there. Did I mention that to stop supporting wars in the Middle East is a critical part of this? Oh, and getting emergency services in shape to handle entirely predictable future surges in immigration.

But the obvious eurozone and refugee solutions aren't being undertaken as they should be, largely because too many political parties and groups and business lobbies like weapons manufacturers in particular find it advantageous to demagogue the issues.

But reality does have a nasty way of catching up with wishful thinking and flat-out denial. Facts do matter, despite being singularly inconvenient for narrow nationalists and xenophobes. Turkey, Italy, or Greece could change the calculation overnight by just sending a bunch of the refugees they are holding to parts northward. That would be irresponsible in itself absent real practical agreements on how to do it. But Hungarian, Austrian, and German politicians would have to respond with more than slogans about "close the borders." Austrian Chancellor Babyface likes to claim credit for "closing the Balkan route," but that's a joke. Angela Merkel's agreement with Turkey is what mitigated the acute phase of the immigration crisis of 2015, not any whizbang diplomacy by Austria.

And there's this fact-based reporting from Straub und Irene Brickner, illustrating how cynical and dishonest it is for the Matteo Salvinis of the world to conjure up phony claims to justify xenophobic cruelty:

Frage: Wie viele Flüchtlinge haben die Mittelmeerstaaten heuer bisher aufgenommen?

Antwort: Italien hat in diesem Jahr bis zum 12. Juni insgesamt 14.441 Bootsflüchtlinge aufgenommen; hinzu kommen die 932 Migranten, die am Mittwoch von der italienischen Küstenwache in Catania an Land gebracht wurden. Insgesamt knapp 80 Prozent weniger als im Vorjahr. Spanien hat im laufenden Jahr bisher 11.308 Flüchtlinge aufgenommen, Griechenland 12.065. Es kann also keine Rede davon sein, dass Italien die ganze Immigration allein schultere. Wahr ist aber, dass die nördlichen Grenzen Italiens – jene nach Frankreich, in die Schweiz, nach Österreich und Slowenien – für Flüchtlinge seit langem faktisch geschlossen sind.

[Question: How many refugees have the Mediterranean states taken on up until now?

Answer: Italy has taken 14,441 boat refugees; that includes 932 migrants who were brought to land by the Italian Coast Guard in Catania on Wednesday. In all, 80% less than in the previous year. In the current year, Spain has accepted 11,308 refugees, Greece 12,1065. So that can be no claim that Italy is shouldering the whole immigration alone. But what is [true], is that the borders north of Italy - that to France, in Switzerland, to Austria and Slovenia - have in fact been closed to refugees for a long time. [my emphasis in italics]

Anti-immigration sentiment in Italy and Austria

The European Union is facing a new round of the Greek debt crisis of 2015, only this time with Italy. Anti-immigrant sentiment is also intensifying, with the new Italian government saying they want to expel hundreds of thousands of refugees. There has not been any new upsurge in refugees like that wave of 2015. But mass migration would be a longterm reality for Europe just from the effects of climate change alone. But military conflicts in the Middle East, fed and sometimes initiated by outside powers, including massive arms sales.The US, Russia, and various European countries are in on this ugly and destructive game.

Angela Merkel became known for her extend-and-pretend solutions on the euro crisis, especially with Greece, where the unsuccessful anti-austerity pushback from Greece in 2015 highlighted. Piling on unpayable debt burdens to the eurozone "periphery" countries was the core of her economic extend-and-pretend approach. In immigration, the main extend-and-pretend solution was an agreement with Turkey to house refugees coming their direction. Ironically, they also rely on Greece for the same thing. And Italy to a smaller but significant degree as well..

Meanwhile, there has been no meaningful progress on practical intra-EU arrangements in meaningfully dealing with refugees on a fair burden-sharing basis. (The xenophobic politicians in Germany and Austria prefer to call them all "migrants," to more easily brand them as moochers coming live high on the hog in good white Christian countries.) Meanwhile, Greece has knuckled under to enduring a permanent depression on the orders of the EU establishment, and of Germany more particularly, and is in chronically desperate states. Italy is also fighting the austerity trap. And name-calling and hostile statements against Turkey are popular favorites for conservative politicians in Germany and Austria. Plus, Germany has known for years that BAMF, its own refugee-resettlement agency, had severe management problems and wasn't prepared for the 2015 upsurge. And still isn't prepared. (How Germany's BAMF refugee agency became a 'political scapegoat' Deutsche Welle 30.05.2018)

So this is an inherently unstable situation. And Greece, Italy, and Turkey can threaten to send large groups on their way north.

In Italy, the new Interior Minister, the national official in charge of law-enforcement - not natural resources like the Interior in the US - is Matteo Salvini, a toxic xenophobe from the far-right League party, which is the junior partner in the new national coalition government. Chico Harlan writes (The torchbearer of Italy’s far right is now in power and wants to make good on anti-migrant promises Washington Post 06/04/20118):

With an Italy-first message, Salvini has rocketed into the center of Europe’s battle over migration. He is recasting the cultural debate about how to treat those fleeing the Middle East and Africa, highlighting examples of migrant criminality and describing the influx as an “invasion.” And now, in his first week in control of Italy’s interior ministry, he has power to do what he has pledged: more tightly close the doors of a country that, several years ago, ranked among the most welcoming in Europe.

Salvini has risen to power on a mix of grass-roots anxiety and his own political acumen. He is the leader of Italy’s far-right League, a once-fringe regional secessionist party that polls now show is on the brink of becoming the country’s most popular party. He styles himself as a friend of Russian President Vladi­mir Putin and a thorn in the side of Brussels bureaucrats. He is an irrepressible social media user. He has a public profile far larger than that of ­Italy’s new prime minister, an academic with little political experience. ...

Among those who crossed the Mediterranean last year, 64 percent landed in Italy. Some 400,000 have applied for asylum here [Italy] over the past four years ...

What makes Salvini stand apart, though, is that he so unsparingly highlights what he sees as the problems with migration. When a Nigerian immigrant was arrested this year in the killing of an 18-year-old, Salvini wrote on Facebook, “What was this maggot still doing in Italy?” Last week, during negotiations to form a government, Salvini posted video footage of what he said was a supposed migrant plucking the feathers of a pigeon. “In broad daylight in the middle of the street,” he wrote. “Go home!!!”

Michael Brooks gives a good summary of the Italian coalition in the first 12 minutes or so of this video, TMBS - 43 - How Not To Do Identity Politics 06/06/2018 (?):

Italy's new government

After being stymied by the Italian President in their first attempt to form a government, the two coalition parties, the Five Stars Movement (Cinque Stelle) and the League, are making another attempt. (Jason Horowitz, Italy’s Populist Parties Win Approval to Form Government New York Times 05/31/2018) Giuseppe Conte is still their candidate for Prime Minister. Sergio Mattarella accepted the new government and cabinet Thursday evening. (Dominik Straub, Machtwechsel in Italien: Mattarella akzeptiert populistische Regierung Standard 01.06.2018)

Italy's new Prime Minister Giuseppe Conte

Unfortunately, the reporting on this one strikes me as a bit lazy (from the Times article):

... the newly constituted government, of the anti-establishment Five Star Movement and the anti-immigrant League, still left open the question of whether the reaction of financial markets to Italy’s political chaos this week had chastened them, or whether it simply had led them to disguise their hostility as the price of admission into power.

Populist leaders in Europe and across the Atlantic looked on with delight as they gained a powerful ally in the heart of Western Europe. European leaders in Brussels, already worried about Poland and Hungary, now fear a threat to European unity from within its core. [my emphasis]

For good measure, or to conform to superficial reporting conventions, he adds that the coalition parties "also want to lift sanctions against Russia and for Italy to move closer to its president, Vladimir V. Putin, who once said he didn’t need to meddle in the Italian elections because it was all going his way."

That treatment carelessly conflates the Italian coalition with the authoritarian regimes in Poland and Hungary and makes them sound like stooges of Vladimir Putin. It's a sloppy presentation.

And does the "paper of record" now just assume that it's the role of "financial markets" to "chasten democratically elected governments? Any lazy formulation.

EU Commission President Jean-Claude Juncker made it clear to Italians what the attitude of the EU leadership is, speaking like an English colonial viceroy (Stephanie Kirchgaessner Daniel Boffey, Juncker: Italians need to work harder and be less corrupt Guardian 05/31/2018):

Days after the Italian president, Sergio Mattarella, defended Italy’s place in the eurozone against the country’s populist leaders, the president of the European commission said he was in “deep love” with “bella Italia”, but could not accept that all the country’s problems should be blamed on the EU or the commission.

“Italians have to take care of the poor regions of Italy. That means more work; less corruption; seriousness,” Juncker said. “We will help them as we always did. But don’t play this game of loading with responsibility the EU. A country is a country, a nation is a nation. Countries first, Europe second.”

Believe it or not, that actually is diplomatic wording! Translated from EU-speak, it basically means: "Italy will do what the EU Commission, Angela Merkel, and the financial markets order them to do. Everybody knows that Italians (and Greeks and Spaniards and Portuguese and Irish people) are lazy and corrupt. More importantly, if you try to depart one iota from Herbert Hoover/Heinrich Brüning economic policies in good times or bad, we will crush your miserable, inferior little country."

Although Italy's not so little.

The new Italian government faces the same basic dilemma that the Syriza government faced in Greece in 2015. To provide Angela Merkel and the EU to release them from stone-conservative neoliberal economic policies, they have to be willing to credibly threaten to leave the eurozone. Which means that if Merkel and the EU refuse to make reasonable concessions, the Italian government really would have to be willing to take Italy out of the eurozone.

But there's definitely a dark side to the new Italian government. They are taking a xenophobic line, like the governments in Hungary and Austria, among others.

So they are supposedly prepared to take a run at forcing a realistic adjustment of one of the EU's two chronic problems, the poor construction of the eurozone, which falls seriously short of being an "optimal currency area." Given the stubborn resistance of Germany and other northern European governments, that's not likely to happen, sad to say.

Bill Mitchell explains why the Financial Markets as such are not the cause of the euro's problems in (The assault on democracy in Italy Billy Blog 05/30/2018). He explains that the EU has a mechanism to save bondholders from taking a bad on their bond holdings, he writes:

The ECB clearly signalled a willingness to buy unlimited quantities of government bonds if there was the risk of insolvency.

But this intervention required that the countries succumb to a fiscal austerity package that ensured their growth prospects were minimal.

And the combination just meant that the next crisis was just around the corner.

The SMP gave way to the more recent asset-buying programs, which have seen huge volumes of government debt (other than Greece) accumulate on the ECB’s balance sheet, which have funded fiscal deficits and kept the Eurozone intact.

The interesting point is that while the ECB eventually dealt the private bond dealers out of the game they waited a time (in each episode) for those dealers to express their market preferences.

Why? It is obvious. They wanted to create a sense of public debt crisis – let the spreads of the Member State bonds rise against the German bund – to make it clear that Germany’s position was sound and the example and the rest were out of control rabble with excessive deficits.

Then they could have it both ways.

But the other chronic EU crisis, mass immigration of refugees, which also had an acute moment in 2015, is still there. The immigration wave isn't stopping. The EU countries badly, badly need an EU-wide plan for processing, housing, and integrating refugees, a plan based on some kind of reasonable burden-sharing among the member states. They also need to have adequate emergency services for refugee waves like the one that came in 2015. Xenophobic governments aren't going to get there.

Italy, the euro, and the democracy deficit

Former German Finance Minister Wolfgang Schäauble during the 2015 Greek crisis delivered a succinct statement of the conflict between neoliberal Herbert Hoover/Heinrich Brüning economic policy: "Elections cannot be allowed to change economic policy."

His then Greek counterpart Yanis Varoufakis rightly called that attitude "a great gift to those who don't believe in democracy."

"Our #democracy was crushed because the Wolfgang #Schauble line was seen through and completely & utterly adopted, that 'elections cannot be allowed to change economic policy', which is a great gift to those who don't believe in democracy" @yanisvaroufakis https://t.co/DwIFIEdkBD pic.twitter.com/vhJZKjk7aR

— DiEM25 (@DiEM_25) April 5, 2018

Unfortunately, the European establishment is still singing from the same hymnbook:

European Budget Commissioner Günther Oettinger apologized on Tuesday after facing criticism for suggesting that financial markets would show Italians how to vote.

Oettinger told broadcaster Deutsche Welle in an interview conducted in German that the reaction of financial markets would give Italian voters a signal not to vote for populists.

“My concern and expectation is that the coming weeks will show that the development of the markets, government bonds and the economy of Italy will be so far-reaching that this will be a possible signal to voters not to vote for populists on the right or left,” Oettinger said.

“Already the developments of the government bonds, the market value of banks, the general course of the Italian economy is clearly overcast, is negative. This has to do with the possible government formation.” (Emma Anderson, Oettinger apologizes after Italy remarks spark storm Politico EU 05/29/2018; my emphasis)

EU Commission President felt compelled to distance himself (publicly) from that comment, saying, "President Jean-Claude Juncker, saying that “Italy’s fate does not lie in the hands of the financial markets."

But in substance, Italian voters have every reason to believe that it's no more than lip service. The article quoted doesn't mention any criticism of the Italian President's decision that effectively blocked the seating of the duly elected national government and instead proposed to install as President a former IMF official who is (of course!) devoted to austerity economics. Anderson also reports:

Juncker’s own comments before the Italian election seemed to impact financial markets in February when he said that the EU should “brace ourselves for the worst scenario and the worst scenario could be no operational government.”

The Commission president later tried to smooth things over, by saying “whatever the outcome, I am confident that we will have a government that makes sure that Italy remains a central player in Europe and in shaping its future.”

But in case there is any doubt that the Schäuble Principle of Eurozone Government remains in effect, Vítor Constâncio, vice president of the European Central Bank (ECB) explained how things are in an interview with Spiegel Online ('Italy Knows the Rules' 05/29/2018):

SPIEGEL ONLINE: These achievements are now hanging in the balance because one country may no longer want to do its part. Even if their attempt to form a government has failed for now, Italy's two dominant parties are both skeptical of the common currency. They want to push through massive tax cuts and increase spending dramatically, despite that fact that, at 132 percent of gross domestic product, Italy has one of the highest levels of sovereign debt in the world.

Constâncio: It is certainly a challenge, first and foremost for Italy itself. When financial markets attacked Italy in 2012, it demonstrated that perceptions on the financial markets can be volatile and the risk assessment of a given debtor can change abruptly, sometimes with severe consequences - and this even though Italy already had a primary surplus at the time. We will have to see what happens now.

SPIEGEL ONLINE: Risk premiums for Italian government bonds have risen sharply again recently. At what point would the ECB intervene again, as it did in 2012?

Constâncio: I would like to stress that every intervention has to contribute to the fulfilment of our mandate and is also subject to conditionality. The Outright Monetary Transactions program for intervening in national sovereign bond markets of vulnerable countries can only be used if the country in question also agrees to an adjustment program. The rules are very clear on this. Everyone should remember that.

SPIEGEL ONLINE: So if Italy wants to circumvent the EU's fiscal rules, it can't necessarily count on the ECB's help?

Constâncio: I will only say that Italy knows the rules. They should perhaps take another close look at them. [my emphasis in italics]

I guess the latter is a sort of Italian version of the stereotypical American-movie German who says, "Ve haf vays of making zis happen."

This is how the EU's Very Serious People see things.

Wolfgang Münchau in his May 29 Eurointelligence public site writes:

But what we found most remarkable about the quality of the [German press'] discussion [about Italy's increasing resistance to austerity economics] is the opening paragraph of this story by Frankfurter Allgemeine. Apparently, the reason why Emmanuel Macron has been pressing for a deal on a European deposit insurance scheme by June this year is so that Germany rescues French banks from their Italian exposure. With such a framing in the paper of record of the largest member state, abandon all hope ye who enter the eurozone debate.

Italy's political drama and the EU

Italy's left-populist 5Stars Movement (Movimento 5 Stelle) and the right-populist League (Liga), formerly called the Northern League, had agreed on a government. 5Stars got the largest percentage in the March national election with 32%, with the Liga third with 18%.

But the President and head of state of Italy, Sergio Mattarella, a former Christian Democrat and now Independent, refused to accept the proposed Finance Minister.

Alberto Mingardi reports (Italian voters head for euro showdown Politico EU 05/28/2018)

The two parties wanted Paolo Savona, an 82-year-old technocrat who has fantasized in public about a “secret plan to leave the euro,” as the all-powerful economy minister. And they refused to back down when Mattarella pushed back. The Italian president probably feared the effect of Savona’s appointment on a number of treasury auctions this week, and that Italy losing access to the bond markets was a very concrete possibility.

Politico identifies Mingardi as "director general of Istituto Bruno Leoni, Italy’s free-market think tank, and an adjunct scholar at the Cato Institute." So it's safe to assume that he's likely to be very sympathetic to ultra-conservative economic policies that have led so many Italian voters to reject the more mainstream center-left and center-right.

The coalition's Prime Minister candidate, whom Mattarella was willing to accept, refused to accept the job unless Mattarella was willing to accept a Finance Minister that the coalition wanted. The coalition parties are contesting the austerity policy required by the EU leadership, Angela Merkel in particular.

One thing I'm noticing on the reporting about this latest turn is that the distinction between "euorskeptic" and "eurocritical" seems to be getting blurred in the news. A euroskeptic has long been considered to be a person opposed to their country's membership in the EU, while eurocritics were pro-EU but insistent on reforms to reduced the much-discussed "democratic deficit" and the EU's Herbert Hoover/Heinrich Brüning economic policies. Given the current death-lock that neoliberal economic assumptions have on the European establishment, any country that seriously wants to reform the eurozone to make it into an optimal currency zone, which it has never been, will have to be willing to leave the eurozone if their minimal demands aren't met, maybe the distinction between euroskeptic and eurocritical is becoming less relevant.

Now President Mattarella has appointed an interim Prime Minister. "Carlo Cottarelli became known as 'Mr Scissors' for his cuts to public spending in Italy." (Carlo Cottarelli: Italy president names stop-gap PM BBC News 05/28/2018) Cottarelli was a former IMF official, making both the optics even worse. The IMF website notes that "served as Director of the Fiscal Affairs Department from November 2008 to October 22, 2013."

This is another kick in the face to the electorate, for whom the austerity policies are clearly a major problem. And they are right to consider them a problem. As the BBC explains:

After meeting the president, Mr Cottarelli said he would present a programme to parliament, including a budget, to take Italy into new elections "at the beginning of 2019".

If he was unable to pass a programme, which appears likely at this stage, "the government would resign immediately... until elections are held after the month of August", he added.

The BBC's James Reynolds in Rome says early elections are exactly what the two populist parties want, giving them a chance to rally support behind their claim that the Italian and the wider European establishments are getting in the way of the will of the people.

A source from Five Star told Reuters the party could campaign with the League in a fresh vote.

If Parliament refuses to approve the government, which is a real possibility, it will be a Presidentially-imposed technocratic government. And Italian voters will have very good reason to object to that.

To be clear, I have little confidence in the rightwing, xenophobic Liga as a governing party. But Liga leader Matteo Salvini is unfortunately correct in calling Mattarella's course an attack on democracy.

This editorial from The Independent is Italy's political crisis could have devastating effects on the European economy reinforces the stone-conservative narrative on economic policy that currently dominates the EU, Italy's political crisis could have devastating effects on the European economy 05/28/2018:

One of the few things the fractious putative coalition of the League, formerly the near-separatist Northern League, and the Five Star Movement agree on is that Italy should be allowed much more financial freedom, either within the euro or, if needs be, outside it. This is because they need to be able to print huge sums of money on an irresponsible programme, popular or not. The scale of the public spending required to satisfy their populist promises amounts to around 10 per cent of Italian GDP, a figure usually reached only during an extreme economic crisis. They can do that only by a vast increase in borrowing and taking grave risks with the viability of the euro and Italy’s membership of the system.

Ending the Hoover/Brüning is a necessity in order to fix the eurozone. But no one exactly knows what the effect would be of a eurozone member leaving the eurozone. But it will be very disruptive, almost certainly worse for all sides in the short run.

But if staying in the eurozone means that in Italy or other countries means that the bankers, the IMF, EU operatives, and Germany can dismiss the results of legitimate democratic elections and install a Hoover/Brüning "technocrat" instead, then Italy and other countries really are facing a choice between eurozone membership and democracy in their countries.

Wolfgang Münchau for years has been a perceptive critic of the eurozone construction and the EU response to the Greek debt crisis. He mentions again in his current column for the Financial Times his thoughts on what needs to be done with the eurozone (Euro must be made more robust to rival the dollar 05/27/2018):

Before the financial crisis the eurozone ran a small current account surplus. By last year, it reached 3.5 per cent of economic output. The larger the surpluses became, the more dependent the eurozone had become on the rest of the world.

Instead of hyperventilating about Mr Trump, Europeans might want to reflect on what got them into this mess. The EU would be more resilient today if it had not handled the eurozone crisis the way it did, and if its founders had made the euro more robust from the outset. Technically, it would still be possible for the EU to fix the problem, but that would require a degree of political union that goes far beyond even what Emmanuel Macron, the French president, has proposed. It requires at its core a mutualised debt instrument, a euro bond, as a financial instrument to underpin a large sovereign debt market. It would also require a broader mandate for the European Central Bank.

Italy and populist politics

Italy's election of March 4 left three parties that in one form or another are seen as populist parties. In Europe, notably Austria and Germany, "populist" is often used as more-or-less-synonymous with rightwing politics and demagoguery. It's too narrow a definition, which would exclude some of the most significant populist movements in history, including the Populist Party itself once led by William Jennings Bryan. That spin on what "populist" means is worth keeping in mind when reading commentaries on Italian politics of the moment.

The leading vote getter in March was the left populist Five Star Movement. Although they have in the past talked about anti-austerity economic policies in line with his own, Yanis Varoufakis is very cautious about finding hopeful results in their first place win. (LA STAMPA interview on the Italian election result (the original answers in English) yanisvaroufakis.eu 03/09/2018). Varoufakis describes himself and the DIEM25 group of which he is a leader as progressive Europeanist, i.e., pro-EU but anti-austerity.

"The Italian election yielded a sad impasse," he writes. "The only real beneficiaries are those who invested in xenophobia and fear." And he emphasizes the role of bad economic policies in the result: "Like every other European country in which the establishment pressed on with failed, austerity-based policies, pretending that they were the solution to our continent’s systemic crisis, the ballot box reinforced the forces of European disintegration."

He doesn't present Five Star in a very appealing light:

What’s your view of the Five Star? Do you categorise them as a populist movement or as a new left?

No party that invests in fear of the migrant, of the ‘other’, the refugee can pose as left-wing. The term ‘populist’, in my mind, has been widely abused of recent. In terms of domestic economic policies, Five Star is clearly trying to re-position itself as a centrist party that can be trusted by the establishment. It tries to maintain its perceived radicalism by targeting the old political class and it corrupt ways while refraining from challenging the ‘system’ itself. Of course, when a system is failing as obviously as Europe’s and Italy’s, the attempt to embrace the system while criticising its functionaries seems to me ill-fated.

What do you think of M5S’s proposal for a basic income? Is it radical? Is it progressive?

M5S are proposing a Guaranteed Minimum Income. This must not be confused with the Universal Basic Income, which would be paid to every citizen with no conditions attached. M5S’s proposal is for a minimum means-tested payment that is conditional also on registering at a job centre, demonstrating that you are looking for work, and not turning down job offers – even if they are low grade and demeaning. In essence, M5S is proposing a welfare net that is standard in most central and northern European countries. Many Italians need this payment and see it as a glimpse of hope – so we should not be quick to criticize it. Whether it will, in the end, be good for poorer Italians or not will depend on the implementation, and in particular what other benefits (e.g. disability or child benefits) are cut.

Angela Giuffrida in The Guardian describes also describes how the current Five Star position on immigration is on the same wavelength with reactionaries (From rebels to Italy's biggest single party: can the Five Star Movement govern? 03/05/2018):

The big question is with whom would the party ally in order to reach the 40% share of the vote required to govern Italy. Experts speculate that it could exploit the dismal performance of the Democratic party and attempt to split that party, or try to team up with the small leftwing group Free and Equal. Another scenario is a tie-up with the League, formerly known as the Northern League, a far-right party with whom it is more closely allied on issues such as immigration and Russia.

Di Maio has said he would stop sending the rescue boats that save migrants in the Mediterranean, which he has called a “sea taxi service”, while Matteo Salvini, the League’s leader, has pledged to deport thousands of illegal immigrants.

Maurizio Cotta looks at some of the "macro" factors at work in the Italian election (Italy: First European Country In The Hand Of Populists? Social Europe 03/09/2018):

According to the Bertelsmann Stiftung’s 2017 Sustainable Governance Indicators (SGI) on Italy the economic recovery started to take off under the Democratic Party-based governments of Matteo Renzi and Paolo Gentiloni, but people’s perceptions didn’t change much and are still dominated by the effects of the deep recession of the past years – fear of unemployment, experiences of business failures, and the tightening of living conditions. Naturally, the main governing parties suffer under such conditions, whereas opposition parties that are perceived as being far distant from the government enjoy voters’ goodwill. Thus, first and foremost the Five Star Movement and the League grew rather than Forza Italia which had headed the government three times between 1994 and 2008.

A second reason for the success of these two parties is the growing resentment in large strata of the population against the policies of the EU. Many people feel damaged by economic austerity on the one hand and resent the scant solidarity shown to Italy’s problems with immigration on the other. The Five Star Movement and the League have both shown very critical attitudes towards the EU – to the point of even suggesting a referendum on the Euro.

John Weeks thinks the centrist parties are ignoring Biblical signs of skeptical and critical attitudes toward the real existing EU (EU Takes Beating In Italian Elections: When Will They Ever Learn*? Social Europe 03/07/2018):

The centrist parties in the European Parliament treated the growth of the far right as a fringe phenomenon requiring no amendment to their “ever closer union” agenda. The British vote to leave brought no more than a momentary shock. Shrugging off Brexit as a uniquely British phenomenon and no threat to the continent, the centre-right (European Peoples’ Party) and centre-left (Progressive Alliance of Socialists and Democrats) pursued their top-down strategy of deepening through compromise.

Mario Pianta in Loathing And Poverty: Italy After The 2018 Elections Social Europe 03/06/2018 stresses economic issues in looking at the Italian election:

Ten years of severe economic and social crisis are the background to all these developments. Italy’s per capita income is now back to the levels of twenty years ago; behind this average there is a collapse – of about 30% – of the income of the 25% poorest Italians, living in the South or in the declining peripheries of the Center-North. Twenty years of stagnation and decline mean a generation with ever-lower expectations in terms of income, work and life. Impoverishment has become a reality for a very large swathe of Italians. The Five Star vote reflects the poverty of the South – their call for a general minimum income has been attractive in this regard. The vote for the League expresses the fear of impoverishment in the North. Only in the centres of major cities – where the richest and the highly educated live, and the economy is better – has the vote taken different directions, going to Forza Italia and the Democratic Party.

The particulars are different from country to country, of course. But people trying to understand this moment in politics in EU countries have to wrestle with the complex overlaps between economic situations and xeophobic sentiment:

Poverty is coupled with fear. The fear of worsening economic conditions and social status; the fear of having immigrants next door, other poor people competing for fewer low-skilled jobs and scarcer public services. In the elections the most prevalent fear was that of immigrants – the landings in Lampedusa, the inability to integrate them, the killing and shootings in Macerata. Salvini turned anti-immigration attitudes into his most effective political tool; Five Star expressed the same hostility – calling NGOs saving immigrants in the Mediterranean ‘water taxis’ for illegal aliens and refusing to vote for a bill granting citizenship to second generation Italians with migrant origins. [my emphasis]

So the left-leaning populist in Five Star did embrace the anti-immigrant rhetoric that rightly disgusts Yanis Varoufakis.

All over Europe, the phenomenon of the center-right Social Democratic parties collapsing after years of embracing Angela Merkel-style neoliberal economics is a major factor in the political picture.

Austria, Italy and refugees

Wolfgang Münchau‏'s Eurointelligence describes a new uptick in EU problems over immigration in Europe’s next migration crisis 07/05/2017 (link does to the most recent date on the website). Austria and Italy both have elections in 2018 and the parties in both countries are dancing around the immigration issue. Austria's ruling coalition parties, the SPÖ (Social Democrats) and ÖVP (Christian Democrats) came up with a diplomatic stunt this past week of announcing via the Defense Minister and the Foreign Minister that they were sending soldiers and tanks to guard the border to Italy at the Brenner Pass. This didn't go over well in Italy. Eurointelligence relates:

Since the beginning of the year 83,700 refugees have officially arrived in Italy, a 20% increase. But this number is misleading because there has been a dramatic acceleration in arrivals recently. There is no spillover to Austria yet. Applications for asylum have actually fallen by 53% to just over 10,000 this year. But there will probably rise again.

In classic cold-war style, the Italian foreign minister Angelino Alfano yesterday called in the Austrian ambassador to register the Italian government’s protest. He said the planned action was not justified since there is no actual emergency on the ground. Alfano said Austria's planned action would have repercussions on the security cooperation between the two countries, as Corriere della Sera reports this morning.

Italy is generally disappointed by the European response to the refugee crisis. Spain and France have rejected allowing refugee ships headed for Italy to be diverted to their ports. There is no chance of the EU now agreeing on refugee quotas when it resisted similar calls by Germany in 2015 and 2016.

European interior ministers meet in Tallinn today to discuss measures to alleviate the pressure on Italy. The envisaged help is small. The Commission is earmarking €35m of additional funds for Italy, and will ask EU members to step up their contributions to the EU-Africa fund by €200m. While welcome, this is clearly not the help sought by Italy. [my emphasis]

As Eurointelligence reports, "the Brenner border crossing [is] the most important transportation route between northern and southern Europe." And, more specifically, "the main commercial transport route between Italy and Germany. Each year 31m tonnes of freight pass the border on the road, and a further 13m tonnes through the railways." Angela Merkel can't be pleased by this little flap. Angie doesn't like such inconveniences.

The Austrian Chancellor is Christian Kern (SPÖ) and his Foreign Minister is Sebastian Kurz (ÖVP), who turns 32 in August. He has earned a lot of popularity by taking a hard line against immigration. He hopes to become Europe's youngest Chancellor in the election this year. This stunt with Italy was floated by the SPÖ Defense Minister and endorsed by Kurz. But then the ÖVP Interior Minister said he hadn't given it his required approval yet. And on Wednesday the Chancellor backed off the idea. (Soldaten auf dem Brenner: Nach harscher Kritik rudert SPÖ zurück/APA 05.07.2017) It has the look of a planned stunt all the way, although politicians do just blunder into embarrassments sometimes.

But it shows how toxic the immigration issue has become in European politics. And the nationalism generated by the economic crisis, especially the draconian measures against Greece on which Germany insisted, contributed to the temptation to strike nationalistic postures. against the EU.

I struggle to see why Austrian politicians play the immigration game the way they do. In the current situation, around 100,000 refugees are estimated to have arrived in Europe via the "Mediterranean route" during the first half of this year. Italy has taken on 85,000 of them. There has been no notable uptick in arrivals to Austria. Italy is getting additional EU resources to deal with their current immigrant load, though probably not overly generous given the burden they are bearing right now. So it seems particularly obnoxious for Austrian politicians of both the Austrian government parties to be playing this game.

The EU treaty arrangement under the Schengen Treaty is that the countries on the outer boundaries of the Union are responsible for controlling the immigration into the Union. Otherwise, the borders between EU member countries are required to have open borders, i.e., no border controls, like the borders between US states. There are exceptions, but the EU has to authorize those exceptions. Individual countries can't just decide on their own to do it.

And it's not just a matter of the psychological effect. Slowing down the traffic through the Brenner Pass will cost companies money. And the EU, dominated by neoliberal economics, really cares about that.

Profil columnist Christian Rainer provides a cynical take on the refugee issue, which also illustrates how difficult it seems to be for many Europeans to envision a decent solution to the refugee problem, which will go on for a long time: Potemkinsche Positionen Profil 24.06.2017. Or maybe it's just an example of that old Viennese attitude, "The situation is hopeless but not serious." (The quote is attributed to Karl Kraus, "In Berlin things are serious but not hopeless; in Vienna they are hopeless but not serious.")

Rainer, writing before this latest clown show stunt with the Italian border, grumps about the theatrics of the governing parties' anti-immigration posturing. But then he basically dismisses the whole idea that providing aid to African countries from which increasing numbers of immigrants are coming to Europe as hopeless. Like I said, a cynical viewpoint. Or maybe more accurately, an unserious viewpoint dressed up a worldly cynicism.

Also:

EU-Millionenspritze soll Italien in Flüchtlingskrise entlasten Salzburger Nachrichten/APA 05.07.2017

Italien: Flüchtlingsschiffe sollen auch andere EU-Häfen ansteuern
Salzburger Nachrichten 02.07.2017

Zeitgeist summary, featuring Greece, Italy and the US Democratic Party

I don't really think there is such a things as a Zeitgeist. A Weltgeist, maybe.

But if there were a Zeitgeist, Duncan "Atrios" Black sums up the American version of it remarkably succinctly here: "We're sort of reaching the breaking point of the decades long battle between the party that promises to kick those other people, and the party that promises not to kick them quite so hard." Nice Things Eschaton 12/23/2016

He elaborates:

ACA, for all its benefits, just couldn't be implemented without making it fucking hard for people. That the subsidies aren't generous enough makes it too expensive for people, and that's a problem, but it's one thing to be forced to buy a car you can't really afford, another to buy a car that you can't afford that you have to take in for repairs every other week. The government can't just provide the nice things it once provided because reasons. Hell, once upon a time they built community pools and golf courses. Now your HOA might have a pool.

We're the richest damn country in the history of the world (close enough, anyway). Life shouldn't be so hard. Not against The Data, but the data doesn't really capture what's going on for "the middle class." It isn't that wages are stagnant or shrinking - though that's an issue too! - It's that doing the right thing and having a tiny bit of luck is no longer enough to achieve economic security anymore. Life's a crap shoot from 18-67 (soon to be longer, if Republicans get their way). We're all one medium sized economic hit (including medical) away from the downward spiral. And thanks to that glorious bankruptcy bill, once you get into a hole you're probably trapped there. Bipartisany goodness to make David Broder swoon. 74-25 in the Senate, 302-126 in the House. But the Dems are the good guys! Yah, well, not enough of them and not consistently enough. Vote for Dems and the share of them voting for horrible things will shrink slightly!

He also makes a pitch for recognizing the dominance of the current neoliberal economic ideology in Europe and the US.

That dominance has been characterized more severely in Europe than even in the US by the capitulation of the center-left parties to Herbert Hooover/Heinrich Brüning policies.

The result in Europe is chronic crisis in the eurozone, now flaring up again in more urgent fashion in Italy (Philippe Legrain, Italy on the Brink Project Syndicate 12/08/2016) and Greece (Frances Coppola, Greece: The Game Is On Again Forbes 12/28/2016). But note that Legrain takes the neoliberal posture, lamenting that outgoing Italian Prime Minister Matteo Renzi "was the pro-EU establishment’s best – and perhaps last – hope for delivering the growth-enhancing reforms needed to secure Italy’s long-term future in the eurozone." Growth-enhancing reforms in the neoliberal vocabulary means deregulation, reduction of the public sector, weakening of labor unions and labor law, reduction of income for the majority.

I would read the failure of the Greek negotiating strategy against Angela Merkel in 2015 differently that Coppola does. But she's clear-headed about the stakes involved:

Now it is the IMF’s turn to misread the psychological framing. This is not a four-handed poker game, it is a duel to the death. And it is not really about Greece. The surface conflict is between Greece and its creditors, but the underlying power struggle is between the German-led creditor bloc and the European Commission. The eventual outcome will determine the shape of the Eurozone, and indeed the whole EU, in the future.

Neither the Greek government nor the European Commission want the IMF involved. The only reason the IMF is still involved is that the creditors want it to be. And the reason the creditors want the IMF involved is that they do not trust the Commission to deliver the harsh penance they have prescribed for Greece. The IMF has been cast in the role of creditors’ second.

Unfortunately, this is not how the IMF sees itself. It is still trying to act as a neutral broker, crafting a deal acceptable to both sides. It has repeatedly called for substantial debt relief, but has also demanded deep reforms to the Greek economy. But because it is no longer perceived as neutral, its call for debt relief is ignored while its reform initiative is inevitably seen as a disguised demand for more austerity.

And despite noises recently from the IMF that it may realize the disastrous effects of austerity policies, Coppola recounts how the European Commission (aka, Merkel) is actually defending a marginal departure from extreme austerity by the Greek government against the criticism of the IMF.

What.A.Mess

Spanish election - more problems for Angela Merkel's austerity program

Angela Merkel's neoliberal eurozone saw another crack open today as a result of elections in Spain.

In Sunday's national election, Mariano Rajoy's conservative People's Party (PP) lost the parliamentary majority it has held for four years. They came in first with, according to current projections (La izquierda podrá formar Gobierno Público 21.12.2015) with 122 parliamentary seats, with 176 needed for a majority.

The social democrats (PSOE), which embraced Merkel's austerity policies at the onset of the euro crisis, managed to come in second with 91 seats. That doesn't give the long-dominant two major parties a majority even between the two of them.

The new Podemos party led by Pablo Iglesias came in third with 69 seats, a real surge for the left. The PSOE has made some gestures in the way of criticizing austerity and Merkel's Herbert Hoover/Heinrich Brüning economics. With votes from some of the smaller left parties with seats in Parliament, the PSOE and Podemos could form a left government.

I should note here that when I talk about austerity, there are degrees of it that vary from country to country. It has not been been nearly so severe in Spain as in Greece, for instance. But it's been enormously damaging in Spain nonetheless.

A new rightwing party, Ciudadanos, captured 40 seats and fell short of general expectations.

I guess Angela Merkel is not Person of the Year in Spain.

And probably not in Italy, either: Francesco Guarascio, Italy's Renzi blasts German policies at EU summit Reuters 12/18/2015.

Greece, Italy, Spain and the fight against austerity economics

Greek Prime Minister Alexis Tsipras paid a visit to his Italian counterpart, social-democrat Matteo Renzi, Tsipras’ Roadshow taz 04.02.22015 reports:

Gelöst und gut gelaunt wirkten Italiens Ministerpräsident Matteo Renzi und Tsipras schon am Montagabend, als sie in Rom vor die Presse traten. „Wir sprechen die gleiche Sprache“, versicherte Tsipras. Renzi stellte zwei Dinge klar. Erstens sei auch Italien Griechenland-Gläubiger; und zweitens hätten die beiden „über technische Lösungen nicht gesprochen“. Dann aber legte er nach, gerade als Gläubiger habe Italien keinerlei Interesse, „den Schuldner zu erdrosseln“. Auch Italien will schließlich seit Monaten „Europa dazu bringen, dass mehr über Wachstum gesprochen wird“; das sei zwar „keine einfache Schlacht, aber „etwas in Europa ist in Bewegung geraten“.

Renzis Botschaft war klar. „Bei allen Meinungsverschiedenheiten im Detail“ sieht er Tsipras auch als Verbündeten, dem „wir helfen müssen, auch wenn wir ihm nicht immer recht geben“. Schließlich seien die beiden 40-Jährigen „geeint durch die Idee, der Politik wieder die Möglichkeit zu geben, die Dinge zu ändern und die jungen Generationen wieder näher an den Staat heranzuführen“. Ein Bonmot erlaubte sich Renzi dann auch noch: „Ich habe mein erstes Jahr als Premier damit zugebracht, in Europa als gefährlicher Linker und in Italien als gefährlicher Rechter angeklagt zu werden. Für mich ist es ein echter Segen, dass jetzt Tspiras auf der Bühne ist!“

[Italy's Prime minister Matteo Renzi and Tsipras seemed to be easy-going and in a good mood already on Monday evening when they appeared before the press in Rome. "We speak the same language," assured Tsipras.
Renzi made two thing clear. First, that Italy is also a creditor of Greece; and, second, the two "had not spoken about technical solutions." But then he added that precisely as a creditor, Italy has no interest "in strangling the debtor." And Italy wants finally after months "to bring Europe to the point where we talk more about growth." He said that was "not an easy battle["], but "something has started to move in Europe."

Renzi's message was clear. "Despite all the difference of opinion over details," he also sees Tsipras as an ally who "we must hep, even when he's not always right." In the end, the two 40-year-olds "are united by the idea on once again giving politics the possibility to change things and to draw the young generation back closer to the state." Renzi also allowed himself one more bonmot: "I spent my first year as Prime Minister being accused of being a radical leftist in Europe and in Italy a dangerous rightist. For me it's a real blessing that Tsipras is now on stage!"]

Euronews reports on Greek eurozone diplomacy, Greek PM Tsipras eyes debt help in Brussels talks 02/04/2015:

Lynn Parramore interviews economist Mario Seccareccia in Greece Shows the Limits of Austerity in the Eurozone. What Now? Institute for New Economic Thinking 01/29/2015. Seccareccia evaluates the results of Angela Merkel's Herbert Hoover/Heinrich Brüning austerity economics:

Deficit hawks started preaching long-term austerity, and we’ve seen the awful consequences ever since. People have suffered terrible hardship and dislocation, with countries such as Greece and Spain reaching rates of unemployment worse that what happened in the United States in depth of the Great Depression. You’d be hard-pressed to find examples of such a severe collapse historically, with the possible exception of certain Latin American countries, such as Argentina in 2001. Those who predicted that that this austerity policy would eventually lead to an economic turnaround because of the belief in private sector rebound obviously got it wrong. After five years of negative economic growth, the Greek electorate — with incredible courage — told the so-called Troika that they had had enough, especially with these deep cuts in wages, employment, and pension transfers. ...

the experience of the 1930s, which is being repeated with such vengeance in the Eurozone since 2010, is that pursuing austerity policies alone without some other outside stimulus, say, from increased net exports, can’t lead to balanced budgets. Instead, it leads to disaster. These policies destabilize the private sector to such an extent that they actually jeopardize chances of any future recovery. Many Greek citizens felt that they had reached this threshold and wanted a reversal of policy. [my emphasis]

He also discusses one idea in play as a possible tool for Greece in the near future, a parallel currency:

A lot depends on how big the European Central Bank is willing to go with its plans. If the action was bold enough, Greek banks could benefit indirectly and it could give the Greek government some breathing room and prevent a default, assuming its current creditors demand payment. In the medium term, Greece could create some form of parallel currency set at par with the euro, like Argentina did in the early 2000s. The government in Argentina used “patacones” to buy things and pay employees and they became quite acceptable because ultimately regular people could pay taxes with this currency. The Greeks could have a parallel national currency without altogether abandoning the euro.

Greece says will not cooperate with 'troika' or seek aid extension Buenos Aires Herald 01/30/2015

GERD HÖHLER, Abfuhr für Troika in Athen Frankfurter Rundschau 30.01.2015

Beatriz Talegón writes about related political development in Spain, Un cambio en marcha El Plural 02.02.2015. Talegón is a left-leaning activist of the social-democratic PSOE and head of a group called the Foro Ético. In this piece she talks about how the new Podemos party is attracting support from former PSOE voters disillusioned with the PSOE's capitulation to neoliberal austerity policies. She's very interested in seeing the PSOE make a turn toward cooperating on policy with Podemos instead of capitulating to the neoliberal policies of the current conservative government headed by the Partido Popular (PP).

Anatole Kaletsky on the state of EU politics

Anatole Kaletsky has an intriguing take on the European elections of last week in an article with a somewhat ill-fitting title, Despite election results, reason still rules Europe Reuters 05/30/2014.

Kaletsky lumps the basic positions in the election in pro-Europe and Euro-sceptics, which is an inadequate framework for the current situation. Yanis Varoufakis' categories of Euro-loyalists, Euro-sceptics and Euro-critics work much better and correspond to the labels I've been using of, respectively, pro-Europe/pro-austerity, anti-Europe and pro-Europe/anti-austerity.

Kaletsky refers to "genuinely euro-sceptical and populist groups — ranging from the neo-fascist Golden Dawn in Greece to the French National Front and UK Independence Party to the neo-communist German Linke." The German Left Party is in part a successor part to the Party of Democratic Socialism (PDS), which was the post-unification,"postcommunist" organizational successor to the East German Communist Party. The Italian Democratic Party (PD), whose sitting Prime Minister Kaletsky praises in his column, is also in part a successor party to the Italian Communist Party. Italy's President (head of state) is a former Communist, as was the immediately preceding Prime Minister.

Kaletsky continues by saying, with somewhat of an over-generalization, "None of these parties can work together, even for tactical gains." The pro-Europe/anti-austerity/Euro-critical parties, which include the various Left and Green parties, have fundamentally different perspectives from those of the Greek, French and British nationalist parties he cites. There's no left/right alliance in sight for those groups with the Left and the Greens. But since the nationalists have a common goal of wrecking the EU itself, tactical cooperation is an obvious possibility.

One of his main points is a good one. Despite the media hype over the impressive showings of the far right in Britain, France, Greece and Hungary, the May vote can be plausibly read as a sign of stability, as well:

While the media were banging on about the shock and devastation of Sunday’s supposed political earthquake, this benign, and perfectly plausible, interpretation was quietly adopted by financial markets and the European business community.

Sober analysts noted that out of the 751 seats in the European parliament, an overwhelming majority of 467 were won by the three main blocs of conventional pro-European Union parties — the center-right European People’s Party, the center-left Socialists and the center-center Liberals. Another 53 seats are held by the even more pro-European Greens and 45 by the British Conservatives and allies.

But this strikes me as a bit of "nothing to see here, move right along, folks."

Because "the three main blocs of conventional pro-European Union parties" are all committed to Angela Merkel's ruinous austerity program. I'm leery of interpreting votes for the far right as "protest" votes, just because that's a vague concept and easy to read whatever one's preferences are into that. Stability and continuity are arguably good in themselves for some purposes. But a 62% EP majority for continuity doesn't not change the economic processes that makes Merkel's austerity policies ruinous. Even if 62% of the voters believe in those austerity policies as intensely as Heinrich Brüning seems to have believed in his.

And it's telling that the pro-austerity conservatives and pro-austerity social-democrats had to package their support for austerity with at least lip service to stimulative policies. That's why it's useful at the moment to parse European politicians' statements on economic policy carefully to see if they are explicitly against austerity policies. Because if they aren't explicitly opposing Merkel's austerity policies, the chances are very high that they actively support them.

Kaletsky's article does leave me with the impression that he sees the problems with the austerity policies and with Merkel's playbook for a German-dominated eurozone:

The main lesson from Italy is that governments must offer voters immediate relief from the fiscal austerity imposed during the euro crisis by the dreaded "Troika" of the European Commission, the European Central Bank and the International Monetary Fund. [Prime Minister Matteo] Renzi's first action as prime minister was to promise Italians that there would be no further tax increases and then quickly translate these promises into legislation, though Italy’s budget deficits were overshooting EU-mandated targets.

The European Commission and the ECB have criticised this budgetary back-sliding. Renzi has made clear, however, that he would respond to such concerns not with further emergency austerity measures, but with long-term structural reforms, including gradual labor liberalization, privatization and restructuring bureaucracy.

A second lesson follows from this: Though Renzi has not yet faced that long-term structural reforms, they are more important than fiscal targets. For Europe's economic governance will have to be reconsidered if the euro is to survive.

Though the acute phase of the euro crisis may be over, the single currency has been revealed as a fundamentally unstable system. For the euro to be viable in the long-run, national debt burdens will have to be shared or mutually-guaranteed; banks will have to be jointly backed by? all euro-zone nations, and the ECB will have to become a lender of last resort in sovereign bond markets, like the Federal Reserve and the Bank of England. [my emphasis]

But the terms "labor liberalization, privatization and restructuring bureaucracy" have become stock ritual incantations in the neoliberal playbook for lowering wages, decreasing job security and cutting back public services. And Italy not buckling under Merkel's pressure to accelerate such destructive changes with obviously impractical deficit reduction measures is not at all the same thing as pushing for eurozone-wide stimulus, which is the urgent economic need right now. We'll see if Renzi is up to that.

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

Jürgen Habermas on EU politics

The "second generation" Frankfurt School philosopher Jürgen Habermas granted an interview to the Frankfurter Allgemeine Zeitung (FAZ) on last week's European election, Jürgen Habermas im Gespräch: Europa wird direkt ins Herz getroffen 30.05.2014. He gives this following description of the drastic change in perspective of German leadership from one of promoting European integration to one of nationalist advantage-seeking:

In der Bundesrepublik hat seit der Wiedervereinigung ein politischer Mentalitätswandel stattgefunden. Deutschland fühlt sich wieder als ein normaler Nationalstaat – und unsere Regierung benimmt sich auch so. Damit hat die Europäische Union gerade in ihrer schlimmsten Krise die leise, aber beharrlich auf eine weitere Integration drängende Stimme der alten Bundesrepublik, die sich ihrer Ausgangslage nach 1945 noch bewusst war, verloren. Diese wichtige, über Tagespolitik und Machtopportunismus hinausweisende Stimme war nie so nötig wie heute. Statt den schwächsten, nur scheinsouveränen Gliedern der Europäischen Währungsgemeinschaft einen Kurs aufzunötigen, der Opfer nur von den anderen verlangt, hätte die deutsche Regierung unter Inkaufnahme eigener Vorleistungen die Politik von Adenauer, Helmut Schmidt und Kohl fortsetzen müssen.

Aber ungerührt von den obszön ungleichen Krisenschicksalen, hat Deutschland von der Krise auch noch profitiert. Dieses unsolidarische Verhalten muss auf uns zurückschlagen. Wir müssen aufhören, eine hochgefährliche halbhegemoniale Stellung, in die die Bundesrepublik wieder hineingerutscht ist, in alter deutscher Manier rücksichtslos auszuspielen. Sollten die Wahlergebnisse in anderen Mitgliedstaaten davon wirklich unberührt geblieben sein?

[Since reunification {1990}, a change of political mentality has taken place in the Federal Republic {Germany}. Germany against feels itself to be a normal national state - and are government conducts itself that way, as well. Because of that, the European Union precisely during its worst crisis lost the voice of the old Federal Republic, which was still conscious of its starting point in 1945 and which carefully but persistently pressed for further {European} integration. This voice, which went beyond day-to-day politics and opportunistic power politics, was never so necessary as today. Instead of requiring the weakest, only apparently sovereign members of the European currency community to follow a course that demands sacrifices of the others {i.e., besides the Germans}, the German government have to move forward the policy of {Konrad} Adenauer, Helmut Schmidt and {Helmut} Kohl, taking account of their own compromises.

But unmoved by the obscenely unequal fates during the crisis {of other eurozone countries}, Germany even profited from the crisis. This unsolidarish conduct has to bounce back onto us. We must stop playing out in the old German manner a highly dangerous, half-hegemonic position into which the Federal Republic has again slipped. Should the election outcomes in other members states really not be touched by that?

Habermas talks about the horse-race aspects of the contest for the Presidency of the EU Commission. This basically has to do with whether Jean-Claude Juncker
the lead candidate of the party with the largest plurality in the EP elections, the conservative (pro-Europe/pro-austerity) European People's Party (EPP), will be chosen as the EU Commission President. The EU Council actually chooses the Commission President. They are required to take account of the results of the EP vote, but not required to select the top vote-getter as President.

To take an example from one type of parliamentary system, like those of Germany and Austria. Normally, the head of state (the elected President in those two cases) would "invite" the party winning the largest vote to form a government. If the largest party has a majority, that's pretty straightforward. If they have a minority, they have to work out deals with other parties for a coalition, like the current Grand Coalition (GroKo) in Germany, headed by Angela Merkel and her CDU, with the SPD as the junior partner. If the lead party is unable to form a government, then the head of state would as the second-largest vote-winning party to form a government.

Merkel has toggled back and forth over whether she will support Juncker as Commission President, even though her CDU is part of the EPP and he was the EPP's candidate. Reportedly he was also Merkel's top choice for that role. Late last week, Merkel's was taking a classica Mugwump stance: «Wir haben Jean-Claude Juncker für das Amt des Kommissionspräsidenten nominiert. Die ganze Agenda kann von ihm, aber auch von vielen anderen durchgesetzt werden. Daran habe ich keinen Zweifel.» ("We nominated Jean-Claude Juncker for the office of the Commission President. The whole agenda can be put through by him, but also there are many others who could do it. Of that I have no doubt.") At a Brussels summit this past weekend, Juncker's candidacy faced headwinds from some of his nominal supporters in the election: British Prime Minister David Cameron, Hungary's authoritarian Prime Minister Viktor Orbán, Swedish Prime Minister Fredrik Reinfeldt and Dutch Prime Minister Mark Rutte. (Juncker gerät bei EU-Gipfel zwischen die Fronten Lausitzer Rundscahu/DPA 28. Mai 2014)

By Monday, Von Merkel the Great had decided to back Juncker. (If only to show she can slap down Cameron and Orbán?) Her junior coalition partner, the SPD, supposedly pushed her in the direction of backing the European popular vote. How much of this is a genuine difference between Merkel and the SPD and how much political Kabuki is hard to say.

Habermas, who has long been very concerned and outspoken about what's known as the "democratic deficit," puts a high value on the Council respecting the EP vote in this regard. In the interview published Saturday, he was pretty sour about Merkel's posture on Juncker's selection: "Merkel, die Patronin der Geberländer, will das Fenster, das sich mit der frischen Luft der Europawahl für einen solchen Politikwechsel geöffnet hat, möglichst schnell wieder schließen." (Merkel, the patron of the giver countries {the northern European countries in the eurozone}, wants to close the window as soon as possible that was opened for the fresh air of such a political change by the European election.")

Habermas also takes a dig at the quality of the EPP's own "pro-Europe" credentials:

Zum ersten Mal erfährt das Europäische Parlament eine tatsächliche Legitimation – gerade dadurch, dass die Europagegner nach scharfem Meinungskampf Sitz und Stimme erlangt haben, um so die schlappen Europafreunde wachzurütteln – und die Böcke von den Schafen trennen. Man fragt sich ja, auf welche Seite eigentlich eine EVP-Fraktion gehört, die sich nicht einmal zu ihrem eigenen Kandidaten Jean-Claude Juncker zu bekennen wagt. Während sich die CDU zu Hause immer noch als europafreundliche Partei aufplustert, denkt deren Parteienfamilie im Europaparlament offensichtlich nicht daran, „Parteifreunde“ wie die offen europafeindlichen Orbán- und Berlusconi-Abgeordneten aus ihren Reihen auszuschließen.

[For the first time, the European Parliament is experiencing an actual legitimation - precisely thereby, that the enemies of Europe {anti-EU nationalist parties} after a sharp battle of opinions gained a place and a voice, in order to shake the flaccid friends of Europe awake - and to separate the sheep from the goats. One must certainly ask on which side the EPP caucus, which isn't even trying to support its own candidate Jean-Claude Juncker, actually belongs. While at home the CDU puffs up its feathers as a Europe-friendly party, their party family in the European Parliament clearly isn't thinking about removing from their ranks "party friends" like the openly Europe-hostile representatives of Orbán {Hungarian authoritarian conservatives} and Berlusconi {Italian plutocratic conservatives}.]

Italy's social-democratic Prime Minister Matteo Renzi has been making anti-austerity noises recently, which Wolfgang Münchau seems to take seriously. (Stunde der Schuldenmacher Spiegel Online 26.05.2014) "Renzi weiß, dass er nicht gleichzeitig sparen und reformieren kann." ("Renzi knows that one cannot at the same time pursue austerity policies and put through reforms.") Just how seriously Renzi is about opposing Merkel's austerity drive remains to be seen. It's a surprise to see he's doing this much.

Renzi over the weekend announced his, not opposition, but skepticism to Juncker as EU Commission President. As Ian Traynor reports for The Guardian, Italy's Matteo Renzi joins stand against Jean-Claude Juncker for European post 06/01/2014:

On Sunday, the Italian prime minister, Matteo Renzi, signalled that Juncker may not be acceptable to him. And after losing the elections in France to the far-right Front National, François Hollande is also said to oppose Juncker, allegedly telling the German chancellor, Angela Merkel, that the job should go to the French, preferably his former finance minister Pierre Moscovici.

Merkel, Europe's most powerful leader, is seen as the pivotal figure in seeking a compromise over the commission post. She has remained equivocal over Juncker's prospects, although formally, as Germany's Christian Democratic leader, she supports him.

On Renzi's position, see also Lizzy Davies, Is Matteo Renzi the man to save Europe's soul?
The Guardian 05/31/2014; Andrea Bachstein, "Wir sehen Deutschland nicht als Gegner, sondern als Vorbild" Süddeutsche Zeitung 31.05.2014.

Renzi seems to be tying his reserve on Juncker's EU Commission Presidential candidacy to his anti-austerity gestures. I want to see more before I start sharing Münchau optimsim about hims. As Davies notes, "His critics say it has barely begun, and, where it has, for instance in modest labour reform, it threatens to change the country for the worse, not the better." Althoug in the article she links, the grumping seems to be about Renzi not doing enough to push down living standards, which is a major goal of what is called "reform" in the neoliberal vocabulary: Gavin Jones, Italy's modest labor reform shows Renzi's momentum faltering Reuters 05/15/2014. If by "faltering" that means he's not doing enough to promote destructive neoliberal austerity, that's may be a good sign!

In any case, Habermas thinks it would be a very bad thing if neither of the two leading candidates were actually selected for the EU Commission Presidency. "Wenn diese Runde wirklich eine andere Person als einen der beiden Spitzenkandidaten vorschlagen sollte, würde sie das europäische Projekt ins Herz treffen." ("If this round really puts forward another person besides one of the two leading candidates, that would strike at the heart of the European project.")

Although Habermas has no sympathy for the xenophoblic program of the actual anti-Europe rightwing nationalist parties, he does encourage the supporters of the EU to think carefully about the strong performance of such parties in the EP election:

Ich finde es gut, dass die Europagegner ein Forum gefunden haben, auf dem sie den politischen Eliten die Notwendigkeit vor Augen führen, die Bevölkerungen selbst endlich in den Einigungsprozess einzubeziehen.

Der Rechtspopulismus erzwingt die Umstellung vom bisherigen Elitemodus auf die Beteiligung der Bürger. Das kann dem europäischen Parlament und seinem Einfluss auf die europäische Gesetzgebung nur guttun. Anders verhält es sich mit den Auswirkungen auf die nationalen Szenen in den Mitgliedstaaten. Hier mag in einigen Ländern die Gefahr entstehen, dass sich politische Parteien einschüchtern lassen und auf einen Anpassungskurs à la CSU umschwenken.

[I take it as a good thing that the opponents of Europe have found a forum in which they are bringing before the eyes of the political elites the necessity of finally bringing the population itself into the unity process.

Rightwing populism requires the adjustment of the elite mode up until now on the participation of the citizens. That can only do good {!!} for the European Parliament and European lawmaking. There is a different effect with the implications in the national scenes in the member states. Here there could develop the danger in some countries that political parties could allow themselves to be frightened and veer toward a course of accommodate à la the CSU.]

The CSU is the especially conservative, traditionalist Bavarian sister party of the CDU, which normally acts together with the CDU on the national level. They are known for resorting to anti-immigrant demagoguery and other hardline gestures to prevent any party from developing political strength to their right.

Tags: angela merkel, austerity economics, eu, euro, european union, italy, jürgen habermas, matteo renzi