European criticism of Angie's Greek policies

What happened the last few days with German Chancellor Angela Merkel's policies toward Greece is really remarkable. She proposed what can only be described as a dictator for Greece, responsible in theory to the EU but all but surely to be controlled by her. It would have given the new Gauleiter (the title for area chiefs for the Nazi Party back in the day) for Greece complete power over the Greek national budget with the restriction that repaying the sovereign debt would be the top priority over all others.

The good news is that the negative reaction from Greece and other EU members finally made Angie back off, though she was still pushing the idea on Monday. And the fiscal restrictions that the current EU summit may agree upon seem, according to the news reports, to be modified to the point that Germany won't have a routine veto over all the EU national budgets, which is what Angie actually wanted.

Yes, there are leading European politicians opposing neoliberalism: here, Austria's Laura Rudas

The Social Democratic Party (SPD) Sigmar Gabriel publicly opposed the proposal and said explicitly that such an official would be like a "dictator" who would be in a position "to abolish democracy in Greece". He went on to say, with sarcasm and surprise, that the only thing left would be to appoint a German to the position and put him in a "uniform". ("Sparkommissar" für Griechenland wäre "Diktator" Stern Online 30.01.2012)

This is encouraging to see that the major opposition party, the SPD, is still capable of opposing something like this.

But what the Hölle was going with the SPD guy Martin "Gustav Noske" Schulz who is President of the European Parliament instead endorsing Angie's Greek Gauleiter idea? That jerk must be like the Ben Nelson of German Social Democracy. They should kick him out of the SPD altogether. He would have been better off to imitate Sgt. Schulz of Hogan's Heroes and just say, "I know nothing, I see nothing!"

I was encouraged to see that Austrian Chancellor Wehner Faymann (Social Democratic, SPÖ) on his Facebook page clearly, if more diplomatically than his German colleague, criticize Angie's Greek Gauleiter scheme saying, "democratic values should not be hollowed out."

Faymann also talks about the larger eurozone problems in an English language article: Christoph Schult, Interview with Austrian Chancellor Faymann: 'Don't Overestimate the Fiscal Pact' Spiegel International 01/30/2012. Faymann supports a "debt brake" being added to the Austrian Constitution to limit the amount of debt the country can take on relative to GDP, a really bad idea in itself. But given Angie's current course, in the short run protecting Austria's national independence may require minimizing the debt burden more than sensible economic policy would otherwise allow.

Faymann favors a modified version of the idea of having the European Central Bank (ECB) act as a buyer of last resort for eurozone sovereign debt, something that would have been necessary for the eurozone to continue functioning if the EU had acted sensibly enough and early enough to save it. (The last pessimistic part is my view.) The short-term effect on Austria and most EU countries is likely to be bad when the euro ends (to put it mildly!), so Faymann is understandably still trying to take the position of saving it. I certainly hope he's making plans for a quick transition back to the Austrian schilling when the time comes, though. That idea for the ECB, though, is something that Angie completely rejects.

And I'm sure the Princess Angie von Merkel wouldn't be pleased to hear him be realistically modest about the likely benefits of the fiscal pact that is the supposedly big accomplishment she wants to see come out of the current summit: "one shouldn't overestimate the fiscal pact. Because of the narrow corset created by the Lisbon Treaty, one can't claim that we're reinventing the euro zone." And, of course, reinventing the eurozone - and fast - would be what it would require to save the euro.

And Faymann won back some credibility in my mind with this exchange:

SPIEGEL: With this Social Democratic agenda, you are rather in the minority among the EU's state and government leaders.

Faymann: Actually this agenda should be consistent with Christian Democratic or Christian Socialist values. I see the biggest difference with the neo-liberals.

SPIEGEL: In Davos Chancellor Merkel said that stricter rules are needed in Europe. It sounds more like a punishment than solidarity.

Faymann: Rules aren't positive or negative, it's about the content. I would welcome it if we regulated the financial markets more strictly, cut down on speculation and founded a European ratings agency. Yes, our high debts make us vulnerable, but speculators have intensified the crisis. Therefore, in the form of the transaction tax, they should also be involved in overcoming the crisis. [my emphasis]

He also makes what is an important point to keep in mind with this whole euro business. Everyone has had a few months now to think seriously about what would happen when a country leaves the euro. (I say when, not if, because I'm a pessimist on this.) But no one has a really good idea what it will look like, in no small part because the extent of credit default swap (CDS) exposure by major financial institution is unknown to everyone, even the fabled Gnomes of Zurich. Faymann says: "All of the experts with whom I speak say they can't reliably promise an orderly insolvency. Contagion is incalculable. It would be like a real-life experiment ..."

And not a fun one.

Faymann's interview and Facebook comments make me think he sees the proverbial writing on the wall and he is expecting the proverbial s*** to hit the proverbial fan soon.

My favorite Austrian Social Democratic leader, Laura Rudas, who is one of the main figures currently trying to expand the Party's appeal to younger voters, had an even more interesting piece on her Facebook page, "Schuldenabbau als Weg zur Unabhängigkeit" ("Debt Reduction as a way to independence"). Also in Aktuell 27.01.2012. She is the co-business manager for the SPÖ. She summarizes her points in slogan form at the start:

Finanzmärkte regulieren. Finanztransaktionssteuer einführen. Bildung, Forschung und Gesundheit voranbringen. Intelligent investieren. Wirtschaftswachstum ankurbeln. Alle diese Agenden brauchen vor allem eins: Autonomie in der politischen Prioritätensetzung. Das ist nur möglich, wenn wir uns aus den Fesseln der Finanzmärkte befreien!

[Regulate the financial markets. Introduction a financial transaction tax {aka, a Tobin tax}. Improve education, research and health. Crank up economic growth. All of these agendas require above all one thing: autonomy in the setting of political priorities. That is only possible, if we free ourselves from the chains of the financial markets!]

Dang! That sounds downright Jacksonian to me!

Her article goes on to argue in explicit terms that Austria's political priorities cannot be determined by the financial markets, which of course is Angie's goal and approach. She explicitly defends taxes as necessary for retirement funds (which are basically all run through the state in Austria), education, the health care system and other parts of what we call the social safety net in the US. And she calls for progressive tax increases to achieve agreed-upon debt limits.

She also criticize Austrian banks for implicating themselves in poor risk bets in eastern Europe.

Politics is politics, and as a Party figure she has to defend even suboptimal policies, like new debt limits during a depression. But I'm reading what she says in the current Austrian and eurozone context. And it sounds like a strategy primarily directed at protecting Austria against (1) bond speculators and (2) Angie's Anschluss economics:

In jedem Dilemma aber gibt es meist auch Profiteure. Und so hat auch die Abhängigkeit ganzer Staaten und das damit einhergehende Zurückdrängen der Politik ihre Profiteure. Oder ist es sogar Kalkül mancher, dass diese Abhängigkeit gegeben ist? Oder auch, dass man Finanzmärkte kaum regulieren kann, wenn man in ihrer Abhängigkeit steckt?

[In every dilemma, there are also usually profiteers. And so the dependence of whole countries and the suppression of political priorities that comes with it also has profiteers. Or is it even the calculation of some, that this dependence just is so {i.e., that it should be that way}? Or also, that one can scarcely regulate the financial markets if one is stuck in dependence to them?]

In the current context, this is clearly directed against both the bond speculators and Angie's ordoliberal policies.

It's very encouraging to see the SPÖ's sounding so aware of the issue and so ready to deal with it.

Tags: angela merkel, eu, euro, european union, laura rudas, werner faymann

New EU summit: the drama continues

The euro crisis is starting to seem like a B-movie tragedy, where everyone can see where the plot is going but the motives are hard to fathom and it's dragging on forever.

The latest EU summit started on Monday. Angela Merkel may be Obama's biggest threat to re-election. Because if Angie keeps getting her way, it maximizes the chances that the eurozone will crack up this year and maybe take down some major banks with it, like the mortgage crisis did in 2008.

This Euronews report plays up Angie's superficial rhetoric about the need to promote growth, EU leaders shift focus from austerity to growth 01/30/2012. But Angie isn't budging from her "ordoliberal" austerity policies. Her "growth" proposals pretty much consist of more austerity and anti-labor legislation, with a few extra dollars to be kicked in to so-far-undefined growth measures from various EU funds that has surpluses at the moment. In this report, we see her stressing the need for boosting youth employment, which Angie sees as yet another chance to weaken labor laws. She apparently expects the new conservative government in Spain to lead the way on that approach to youth unemployment.



Greece is bankrupt in all but name and they still haven't tied down the "voluntary" writedowns from private holders of Greek debt that were part of the stopgap measure for Greece agreed on at the December EU summit.

Portugal is on the verge of bankruptcy, with Italy, Spain and Ireland kind of shaky. And Europe is in a new recession. Belgium just had an apparently pretty effective one-day general strike against government austerity measures there.

Angie's proposal for an EU Gauleiter to run Greece until their debts are paid down and the bond markets like them again got a pretty negative reaction once the Financial Times reported on it publicly. Even Greece's Post Democracy 1.0 government, installed at Angie's insistence to act as banks' debt collectors, to her to go blow on that one. Austria's Social Democratic Chancellor Werner Faymann, who has been pushing a foolish "debt brake" austerity proposal like the one Angie is demanding from other EU members, criticized Angie's Greek Gauleiter proposal on his Facebook page (01/30.2012), though in more diplomatic language than Angie's proposal deserved:

Die Bedingungen, die Griechenland in den kommenden Jahren zu erfüllen hat, müssen strikt bleiben. Die Einhaltung dieser Bedingungen wird von der Trojka aus Europäischer Kommission, Internationalem Währungsfonds und Europäischer Zentralbank streng überprüft, überwacht und auch eingefordert.

Griechenland kann den Staatshaushalt derzeit bekanntlich nicht über Anleihen auf dem Finanzmarkt refinanzieren. Bis dies wieder möglich ist, sind glaubwürdige und feuerfeste Hilfsprogramme der internationalen Gemeinschaft notwendig, um die Eurozone stabil zu halten. Die Stabilität des gemeinsamen Währungsraums liegt auch im Interesse Österreichs. Es ist ganz klar, die Bedingungen sind einzuhalten. Deswegen muss aber niemand beleidigt werden, deswegen dürfen nicht demokratische Werte ausgehöhlt werden.

The conditions that Greece has to fulfill in the coming years must remain strict. The observance of the conditions will be monitored by the Troika of the European Commission, the International Monetary Fund and the European Central Bank.

It is known that Greece cannot refinance its budget with loans on the financial market. Until this is once again possible, credible and fireproof assistance programs from the international community are necessary in order to keep the eurozone stable. The stability of the common currency [the euro] is also in Austria's interest. It is clear that the conditions have to be met. But that is why no one should be insulted, that is why democratic values should not be hollowed out. [my emphasis]

Faymann sounds almost as timid as a US Democrat there. But still, even in diplomatese, it's clear that he's criticizing Angie's Post-Democracy 2.0 proposal for Greece.

Austria has had some rather unpleasant experiences with German Gauleiters in the last century.

Angie's policies are making all the eurozone's problems that much worse. Heckuva job, Angie!

Tags: angela merkel, eu, euro, european union, greece, post-democracy, werner faymann

Just do what you're told, Werner, and I won't have to remind you again what "Anschluss" means

Austria's Social Democratic Chancellor Werner Faymann went to Berlin today to kiss conservative German Chancellor Angela Merkel's ring.

Chancellors meet: Austria's Werner Faymann and Germany's Angela Merkel

If Faymann plans to offer even the slightest resistance to Merkel's determination to destroy the euro and the European Union by continuing with her already-disastrous of insisting that austerity economics is the solution to everything, it was scarcely apparent from this report, Kein Paukenschlag zur Lösung.Merkel stimmt auf langes Euro-Leiden ein Der Standard 02.12.2011.

Faymann agreed with Angie's demand that the EU treaties to be changed, and apparently is fine with her vision of changing them only to impose automatic austerity implemented at the EU level (aka, by Germany), despite what national parliaments decide. The only hint of democratic resistance reported in that piece is that Faymann timidly suggested that if treaty changes require Austria to give up its sovereign authority over its national budget, well, geepers, we'd have to have a national referendum on that.

As former Greek Prime Minister Georgios Papandreou found out a few weeks ago, Angie's not big on all this having the people vote business when it comes to following orders from Berlin. The plan that Berlin and Paris are floating is for the eurozone countries to write into their constitutions a debt limit and give Germany the EU to power to implement sanctions against any country violating Germany's the EU's idea of how well their budgets fit the German EU approach to achieving those limits.

Angie says that the plans won't violate the sovereign authority of eurozone countries, so no referendum will be needed in Austria. Come to think of it, the Austrian government has had some disagreement before with Germany over a referendum, back in 1938. Somewhat like Angie did with the Greek government this year, Germany blocked that referendum and forced a change in the Austrian government, though by more drastic means than those applied to Athens this year.

Of course, Angie's proposal very well does drastically impinge on the sovereignty of eurozone countries over their own budgets. As another Standard report on the plan, Sarkozy und Merkel kündigen Rettungsplan an 01.12.2011 puts it, "Faktisch bedeutet dies die Aufgabe nationaler Vetorechte in der Haushaltspolitik" ("In fact, that means the surrender of national veto rights in budget policy"), i.e., national governments will not have the final say over their own national budgets. That is not the current arrangement and for Angie or Faymann to claim otherwise is just blowing smoke.

I haven't seen it reported that Faymann publicly agreed or disagreed with that position of Angie's on the referendum issue. Since the proposals presumably won't be formally presented until next week's EU summit, diplomatic fudging is a bit easier than it will be in a week or so.

Schulterschluss statt Anschluss

As Standard reports, Vienna and Berlin are seeking a Schulterschluss (united position) on their position for next week's EU summit. Meaning that Faymann is expected to do what Angie tells him. I suppose Schulterschluss is preferable to Anschluss. If the duly elected government of Austria is content to make the demands of the finance lobby as interpreted by Angie their first priority in economic policy, Angie won't have to go to the trouble of installing overt governments of debt collectors for the big banks, as she did in Greece and Italy.

APA also makes the Schulterschluss position prominent in their report on Faymann's position in support of Angie's EU-destroying policies: Faymann und Merkel für Schulterschluss in Krise 02.12.2011.

Socialist Chancellor Faymann has already pushing a "debt-brake" (Schuldenbremse) amendment to the Austrian constitution to fix Austria's borrowing at a set level of GDP, a Herbert Hooverish idea based in ideas discredited in the Heinrich Brüning era. It copies a similar measure Germany has enacted for itself. Faymann justifies it by saying, "Wenn wir uns selber ernst nehmen, werden uns auch die anderen ernst nehmen" ("If we take ourselves seriously, we will also take others seriously"), meaning, uh, what? That Serious Leaders in Europe jump when Angie snaps her fingers? Good grief!

It sounds like Austria's SPÖ (Social Democratic Party of Austria) is almost in as bad a need for internal transformation as the Democratic Party in the US. Maybe Laura Rudas will make a risky career move and take on the challenge.

Tags: first subject, angela merkel, austria, european union, germany, laura rudas, werner faymann

Austrian Socialist Chancellor proposes Herbert Hooverish idea for the country's Constitution

Austrian Chancellor Werner Faymann is head of the Austrian Social Democratic Party (SPÖ) and head of government in a Grand Coalition with the conservative, Christian Democratic People's Party (ÖVP).

Now that Austria is coming under pressure from the bond speculators as part of the collapse of the euro currency, Faymann is proposing a foolish, Herbert Hooverish idea of writing a maximum debt limit into the Austrian Constitution. This is one more symptom of the kind of corruption of policy and economic thinking that the dominance of neoliberal economic thinking has produced. Writing a particular economic doctrine of this specificity into the national constitution is just a bad idea, like the concept of a balanced budget to the US Constitution. It could lock Austria into overly rigid policies in a future (or even not-so-future) economic crisis. It could be an powerful temptation to the kind of disguising the actual level of debt that both Greece and Italy did, both with significant help from Goldman Sachs.

So far, Faymann isn't proposing ruinous cuts to the budget. Austria's current employment rate is high. And, fortunately, some in both the SPÖ and the ÖVP are dubious about this proposal. Hopefully dubious enough that it fails.

This is a video in German of him defending his proposal, Bundeskanzler Werner Faymann zur Schuldenbremse YouTube date 22.11.2011.



I commented on his YouTube and Facebook message, "Es wäre einfach töricht, solche eine spezifische ökonomische Doktrin in die Verfassung zu verankern!" (It would be simply foolish to anchor such a specific economic doctrine in the Constitution!)

Tags: austria, austrian politics, österreich, österreichische politik, werner faymann