Tags: Europe, European Union, Eurozone, France, Germany, Greece
On June 3, when the President of the European Commission (EC), Jean-Claude Juncker conveyed the collective demands of Greece’s creditors—the European Central Bank (ECB), the European Commission, and the International Monetary Fund—to the embattled country’s Prime Minister, Alexis Tsipras, a member of his governing Syriza party said of the Greek delegation: “They came, they saw, and they had their balls handed to them.”
Five months after the anti-austerity party rode to victory in the Greek elections and had renounced efforts by previous Greek governments to impose austerity measures that had led the country’s debt grow from 124 per cent of GDP to 180 per cent and its unemployment rate soar to 25 per cent (and youth unemployment to 60 per cent) and its pensioners see their meagre pensions decline even faster, the German Chancellor Angela Merkel invited the IMF’s Managing Director Christine Lagarde and the President of the ECB, Mario Draghi to a previously scheduled meeting between herself, Juncker, and the French President Francois Hollande on June 1 to draft a common negotiating position among Greece’s creditors. Prime Minister Tsipras was notably not invited.
Papering over their differences, the 5-page demands Juncker delivered to Tsipras made some concessions to Greece—lowering the demand that the primary surplus for 2015 be 1 per cent rather than the 3-4 per cent that had been the earlier demand—but also included “red lines” that the Syriza-led government had vowed never to cross such as generating 2 per cent of the GDP from cutting pensions and raising VAT to a uniform level (except on food, medicines, and hotels), not to reverse the labor market reforms that the ‘troika’ (the ECB, the EC, and the IMF) had forced down the throats of previous governments, and even to establish an ‘independent’ tax and customs agency and thereby making its operations beyond the ambit of elected officials.
Yet, far beyond debates on primary surpluses and ‘red lines,’ the real struggle between Greece and its “European partners” is over politics. The positions are clear. Because of the single currency, an indebted country like Greece cannot devalue its currency and thereby cheapen its exports and with the increase in exports (and tourism) repay its debts. Hence the ‘troika’ (now renamed ‘the institutions’) were attempting to impose an ‘internal devaluation’ on Athens: forcing it to cut minimum wages and increase labor market ‘flexibility’ (making it easier to hire and fire workers and thereby also curb labor militancy) to force down the prices of Greek products to increase exports, to privatize government assets, improve taxation and efficiency in collecting taxes, and to sharply reduce government expenditures by severely cutting welfare programs and reducing public sector employment and pensions. Syriza and other opponents of the ‘austerity’ measures have argued that these measures actually impede Greece’s ability to repay its loans: if people don’t have money due to welfare cuts, job losses, etc., they cannot buy goods and hence more businesses fail. Indeed, Greece’s GDP has contracted by over 25 per cent in the five years of troika-mandated austerity and its unemployment remains high while its debt as a ratio of GDP has grown from 124 per cent to 180 per cent.
As Robert Preston, the BBC’s economics editor puts it:
But although for the pride of the creditors, the question of whether Greece is obliged to generate a surplus on its budget, excluding interest payments, of a bit more than zero or 3%, feels like a world of difference – it is a rounding error compared with the money Greece owes them, which is equivalent to 180% of Greek GDP.
In the highly unlikely event that Greece could generate a 2% or 3% surplus year-in and year-out without its economy shrinking further (which few economists would anticipate), it would take around half a century for Greek public sector debt to fall to a level regarded as sustainable. gett A half century of austerity? In what modern democracy would that be regarded as a realistic option?
Most egregiously, sharp cuts in expenditure has meant that in some hospitals budgets have fallen by 94 per cent. How can this be sustainable in a continent as rich as Europe?
It is clear that one way or another, as Nils Pratley wrote in the Guardian, there will have to be a debt write-down. What Greece’s European “partners” are unwilling to countenance is Syriza’s demands to reverse the “austerity” measures because they want to root out any left-wing challenge to the reigning neo-liberal orthodoxy. Once Greece caves in, subjects itself to ‘vasectomy’ in the words of one of its MPs, then debt-relief could be offered but not before. To offer a write-down of the debt is particularly terrifying to Spain where the governing party has already lost many local elections to a Syriza-like party, Podemos, which now controls the three major cities of Madrid, Barcelona, and Valencia. It is also threatening to other EU economies like Portugal, Ireland, and Italy which have been compelled to implement austerity measures.
Syriza has, however, done its cause no favors despite some eloquent posturing by its Finance Minister, Yanis Varoufakis. It has not demanded a write down of the debt—and we must remember that when the troika made the first loan to Greece in 2010, Germany and France explicitly demanded that the austerity not be extended to the military—and Greece has been the best customer of the German arms industry. How is the cutting of pensions and salaries to workers while maintaining higher than the EU average in military spending morally justifiable?
With Syriza maintaining the charade of negotiating with its European ‘partners’ over the last months, Greece’s position has rapidly deteriorated as frightened depositors have withdrawn their money from the banks and even transferred them outside the country. By the end of April, Greece’s bank deposits were at their lowest level since 2004 and by the end of last week deposits were being withdrawn at the daily rate of 1 billion euros.
Interestingly, the Speaker of the Greek Parliament, Zoe Konstantopoulou, has set up a Debt Truth Committee to report to parliament on June 18
is said to be on the point of finding some of Greece’s original bailout debt, from either 2010 or 2011, was unlawfully contracted. In addition, Ms Konstantopoulou is armed with a finding from experts that Germany owes Greece €350bn in war reparations – more than the whole of its debt to Europe.
This could open up a host of legal challenges even if Tsipiras was to finally cave into the troika’s demands. The question is whether the Left Platform within Syriza is strong enough to prevent a cave in when there is nothing the troika would like than to install a government of national unity with a rump Syriza. That would, temporarily at least till Spain’s November election, decapitate the European Left. Will it happen?
In the short run, if no resolution is found, Greece will be unable to make scheduled payments to its creditors and being declared to be in default would make its borrowing costs in private capital markets intolerable; Syriza’s reluctance to impose capital controls would lead to the swift collapse of its banking sector unless the government begins to issue a virtual currency against future revenues which could ease the liquify crunch domestically at least. But Greece cannot be thrown out of the EU without its consent as all decisions must be unanimous. Even if Greece were to exit the common currency—Grexit as it has been dubbed—it would call the whole European project into question. It is also unrealistic to expect a country as bankrupt as Greece to police its borders when hordes of refugees from Africa and the Middle East are streaming to Europe—and from Greece, they could move to any country in the Schengen area. Will this be enough for its European ‘partners’ to blink?
Tags: Brazil, China, democracy, Egypt, Europe, India, Libya, Middle East, South Africa, Tunisia, United States
Heaping irony upon irony, three weeks after protesters cheered the military for ousting Egypt’s President Mohamed Morsi, the new strongman, General Abdel Fattah al-Sisi called on the people to take to the streets in a show of support for him to defeat “violence and potential terrorism.” And taking the large crowds that gathered in Tahrir Square as a mandate to crush supporters of the democratically elected president, the army launched a massacre of Morsi loyalists at their Cairo sit-in on Saturday 27 June 2013.
Much has been written about President Morsi’s overreach for power despite having secured only 51.7% of the vote in a run-off against a factotum of the old regime, Ahmed Shafik, the last prime minister to serve under Hosni Mubarak. But perhaps his biggest failure was not to neutralize the country’s coercive apparatus, laughably called its security services.
Though human rights activists had hoped that as Morsi has himself been targeted by the police during his long years in opposition, he would rein in the police, he openly praised the police for its role in the 2011 revolution—a revolution in which uniformed and plain clothes officers had killed over 800 people, just as they killed Morsi’s supporters last Saturday. The military has also been unrepentant about its role under the old regime: as late as June 2011, General al-Sisi justified the “virginity tests” the Supreme Council of the Armed Forces inflicted, among other humiliations, on women demonstrators during the Cairo chapter of the Arab Spring.
In yet another irony, the liberals installed in the interim government by the military blamed the massacre on the protesters killing each other! Nor have the liberals protested the interior minister, General Mohamed Ibrahim, a holdover from Morsi’s cabinet claiming that the anti-Morsi crowds in Tahrir Square gave him the mandate to resurrect the old regime’s hated secret police, the Amn al-Dawla or State Security force that had been disbanded in March 2011. As University of Oklahoma professor Samer S Shehata observes, Egypt’s tragedy is that “its politics are dominated by democrats who are not liberals and liberals who are not democrats.”
When television cameras beam pictures of massive crowds in Tahrir Square opposing President Morsi and the Muslim Brotherhood, it is well to remember that in the first round of last year’s presidential elections, the candidate who won a plurality of votes in Cairo and in Alexandria, Egypt’s second city, was neither Morsi nor his opponent in the run off election, but a secular candidate, Hamdeen Sabahi. Long decades of providing social services to poor neighborhoods in Cairo and other cities, and in the rural areas where most Egyptians live has created a massive constituency of support for the Muslim Brotherhood. No democracy can take root in Egypt by excluding them as the military seeks to do with the connivance of the liberals and the West.
When secular Egyptians—even radicals like Samir Amin—rejoice at the military’s ouster of a democratically elected president and plaster the general’s photo all across Cairo, they repeat Morsi’s fatal mistake of relying on the army and the police rather than on democratic institutions and protocols. By shutting down Islamists’ media outlets, reviving the secret police, and conspiring to ban the Muslim Brotherhood entirely, the military is fast overturning the gains of the Arab Spring. No future government is safe from military intervention.
The coup d’etat against Egypt’s democratically elected government will have resonances far beyond the country’s borders. As the oldest and most influential Islamist movement, the Muslim Brotherhood has affiliates across the Islamic world and while these parties have largely renounced violence, now they could well conclude that violence is the only way to achieve power. After all, previously in 1992, as the Islamists were poised to win an election in Algeria, the army annulled the election. After they are denied office a second time, why should they place their hopes again in the electoral process? An ultraconservative Libyan cleric, Sheikh Mohamed Abu Sibra has already admitted that it has become impossible to persuade militias in Benghazi to lay down their weapons.
The interim government imposed by the military is also not going to be able to solve Egypt’s economic problems that also fueled the opposition to the Morsi government. When the tourist industry was in the doldrums and over 40% of the population was living below the poverty level, Morsi ended the food and utility subsidies as demanded by the IMF as the price for a $4.8 billion loan. As prices soared, food became unaffordable and the World Food Program reported that the growth of a third of all children in the country was stunted in 2011. Neither the military nor the interim government it installed is likely to reinstate subsidies and the military which controls 40% of the country’s economy will zealously safeguard its privileges. No future government will dare tamper with the military’s perks.
With poverty and disenchantment in the streets, and continuing oppression of the Muslim Brotherhood, chances are that Egypt is in for a prolonged bout of conflict unless international forces intervene. By closing the life-giving tunnels to the Palestinians brutally imprisoned in Gaza, the military has played on Israel’s security fears and inoculated the coup against pressure from Washington. And the collapse of Egypt’s democratic essay has once again prompted the racist trope that Islam is incompatible with democracy. In an op-ed in the New York Times on the day after the coup, David Brooks wrote: “It’s not that Egypt doesn’t have a recipe for a democratic transition. It seems to lack even the basic mental ingredients.”
It is a real pity that the so-called emerging powers—China, India, Brazil, and South Africa don’t weigh in on the events in Egypt and leave the West to define an ‘international response’! Democracy, after all, is not the exclusive preserve of the West—and the few governments elected by popular vote in Europe and North America before the Second World War were underpinned by colonial or neo-colonial exploitation of the peoples of Africa, Asia, Latin America, and the Middle East. Democracy is no privileged preserve of any peoples–and the peoples of the world ought to pressure governments everywhere to adhere to democratic norms!
Tags: Capitalism, democracy, Human Rights, Manufacturing, United States, Urban, world politics, World-economy
Detroitism has emerged a while ago to encapsulate the emergence of urban ruins in North America and Europe–from Camden NJ to Naples and Bucharest–with the decline of manufacturing and the outsourcing of production to low- and middle-income economies in Asia and Latin America. Populations of these cities have declined sharply–from 1.8 million fifty years ago to 700,000 today in Detroit, shrinking tax revenues and depressing property values leading to a degradation of city services and civic amenities and spiking the crime rate. Abandoned houses are stripped of their valuables–metal and copper are sold to junk merchants to be sent to India and China to be melted down and recycled to fuel these ’emerging economies.’
Smaller towns and cities in the United States have been declining even longer–for more than a century as the mechanization of agriculture and the exhaustion of natural resources set in even before manufacturing began to move to the non-unionized states of the ‘Sunbelt’ and later to even lower-wage locations overseas. And the emergence of ‘big box’ retailers like Wal-mart hollowed out their commercial cores as Edward Alden noted.
And so it has been with Binghamton, located at the confluence of the Susquehanna and the Chenango rivers in southern New York State. A small farming community till the Chenango Canal was constructed in the mid-1830s, linking it the the Erie Canal at Utica. In addition, the arrival of the railways in the mid-19th century transformed the area into a minor industrial hub for the production of cigars, and later shoes, and high-tech electronics. Between 1860 and 1880, the population of Binghamton rose from 8,325 to a little over 35,000. Tanneries and shoe factories–most notably the Endicott Johnson shoe factory–made Binghamton and its neighboring Johnson City one of the major shoe manufacturing centers in the United States
By the mid-1950s however, competition from several other locations led to a steep decline of shoe production though its impact was cushioned by the rise of several high-tech firms: IBM which was founded in nearby Endicott, Edwin Link who invented the flight stimulator, Valvoline which was to become Whirlpool Corporation
At the same time, the construction of the interstate highway system, led to a fall in ridership on the trains and the last passenger train rolled off the tracks of the Lackawanna Station in Binghamton in December 1964.
The continuing growth of IBM and other technology companies related to defense and the location of one of the four university centers of the State University of New York system led to further growth over the next two decades.
Yet, the gradual decline of IBM and the closure of the last shoe factory in the 1990s led to a precipitous decline in the fortunes of the city. The arrival of big box retailers like Wal-Mart finally hollowed out the city’s commercial core.
The population of Binghamton, which had peaked at 80.674 in 1950 slid to 47, 376 in the census of 2010–less than it was a 100 years ago in 1910.
Tags: Bolivia, France, Germany, Italy, Portugal, Russia, Spain, United Kingdom, United Nations, United States, whistle blower
Rarely in modern history has a statesman’s words been so at odds with his actions as those of French President Francois Hollande in dealing with US spying on its allies. When Mr Edward Snowden, the former US National Security Agency (NSA) infrastructure analyst, revealed that the NSA had bugged the European Union’s offices and embassies of several EU member states, tapped into communications cables, and bugged the 2009 meeting of the G20 leaders in the UK, the French president thundered that this was “unacceptable behaviour” among friends and allies. Yet, on suspicion that Mr Snowden may have been on board the Bolivian President Evo Morales’ plane, Paris took the unprecedented step of refusing the plane permission to fly over its territory on Tuesday.
Actions speak louder than words and while European leaders have feigned outrage about the US eavesdropping on the communications of its citizens and bugging of their embassies, they did not want the man who revealed the extent of US espionage to seek asylum in their countries. If Mr Snowden were on the Bolivian president’s plane and if he were to ask for asylum during a refuelling stop, it would have placed the government of a European state in an impossible situation. Since EU-wide laws prohibit the extradition of persons to countries with capital punishment, it would be politically suicidal for any government to deliver him to Washington. Yet, while European leaders were vociferous in denouncing US espionage, none were willing to defy the US on the issue.
Hence, France, Portugal and Spain took the unprecedented step of revoking pre-arranged flight permissions for President Morales’ plane—an action in which they were subsequently joined by Italy. When the plane, running low on fuel, finally landed in Vienna’s Schwechat airport, President Morales was prevented from leaving for 13 hours while the Austrians satisfied themselves that Mr. Snowden was not on the plane.
Let us be clear: Mr Snowden is not a spy. He did not steal US secrets at the behest of a foreign power. He did not publish the contents of the espionage. He merely revealed its massive reach, and its sheer illegality and violation of human rights on a planetary scale by tracking the communications of citizens the world over. He is a whistleblower. The UN defines a whistleblowers “as individuals releasing confidential or secret information although they are under an official or other obligation to maintain confidentiality of secrecy.”
The special UN rapporteur for the freedom of expression in 2004, along with his counterparts in the Organization for Security and Cooperation in Europe and the Organization of American states, the Guardian newspaper reports, enjoined all governments to protect whistleblowers from all “legal, administrative or employment-related sanctions if they act in ‘good faith’”. By revealing the magnitude of US espionage against their citizens and governments, Mr Snowden clearly acted in public interest.
Indeed, before Mr Snowden’s revelations, the Director of US National Intelligence, Mr James Clapper had testified to the US Senate Intelligence Committee that in March that the NSA did not collect data indiscriminately on millions of Americans—a testimony he was compelled to retract this week on the scarcely credible ground that he had “simply did not think” of the relevant provision in the Patriot Act that permitted the collection of such data. Likewise, President Barack Obama had claimed several times that the NSA was not eavesdropping on phone calls domestically without warrants—a claim that is proven wrong by Mr Snowden’s revelations.
Jean Asselborn, the foreign minister of Luxembourg, observed that “Americans justify everything by terrorism. The EU and its diplomats are not terrorists.”
Let us also recall that these very same European governments—especially Spain and Portugal—allowed the use of their “airspace and airports for flights associated with CIA secret detention and extraordinary rendition [torture] operations” as the Open Society’s Globalizing Torture: CIA Secret Detention and Extraordinary Rendition investigation uncovered in a report published earlier this year. An ongoing investigation in France is examining whether the government permitted similar CIA flights. Victims can be carried over their airspace to be tortured but whistleblowers who reveal breaches of their citizens’ privacy and of their own sovereignty cannot! And this from member states of the EU that won the 2012 Nobel Peace Prize for the “advancement of peace and reconciliation, democracy and human rights in Europe”!
Speaking out against US actions while surreptitiously aiding Washington is, of course, not a novel practice for its European allies. Ten years ago, the then French president Jacques Chirac loudly proclaimed that an assault against Saddam Hussein’s Iraq was unacceptable to Paris but when the US assault started Chirac opened French airspace to US military flights—something he had not done as premier for Reagan’s attack on Libya in 1986. Though Germany also opposed the Iraq war, once it had begun, its foreign minister prayed for the ‘rapid collapse’ of the resistance. Even Russian president Vladimir Putin for a decisive victory for the US ‘for economic and political reasons,’ just as he offered asylum to Mr Snowden on conditions that he knew would be unacceptable.
The current generation of European leaders have not known a time in their lives when the United States did not dominate their countries—in the economic, political, and perhaps even cultural arenas. For them to symbolically challenge the US is one thing, to challenge it substantively is another thing altogether. Hence, even when their sovereignty was violated with the bugging of their diplomatic missions and EU offices, and when the privacy of their citizens was infringed by the tapping of their phones and digital communications, all they could do was to do all they could to see that Mr Snowden does not seek asylum in their countries even if that meant endangering the lives of President Morales and his entourage. Would they have done that if President Morales was of European descent?
Tags: Egypt, European Union, Gaza, Human Rights, international relations, Israel, Middle East, Palestine, Qatar, Russia, Syria, Tunisia, Turkey, United Nations, United States, West Bank, world politics
Israel’s eight-day assault on Gaza caused enormous damage to the physical infrastructure of that impoverished coastal strip and a vastly disproportionate human toll on the Palestinians. Yet, in a preliminary balance sheet, Hamas is a clear winner. Long shunned by the European Union, Israel, and the United States, it has now emerged as a legitimate player. its rival–the Palestinian Authority–was completely sidelined with its foreign minister forced to visit Gaza with an Arab League delegation! The Palestinian Authority’s President Mahmud Abbas did not visit Gaza at all in contrast to the Egyptian Prime Minister and the Tunisian Foreign Minister. Four years ago, when the Israeli’s had launched their last assault on Gaza, the Palestinian Authority had prevented demonstrations in support of the people of Gaza on the West Bank: this time it could not hold back support for Gaza. It was able to launch rockets to Tel Aviv and Jerusalem that even the more militarily capable Hezbollah had not contemplated when Israel invaded Lebanon. Hezbollah, itself, by continuing to back Syria’s Bashar al-Assad who is engaged in a murderous internal war to retain his position, has also lost considerable legitimacy in the Arab street. Conversely, on this register too, Hamas by distancing itself from the Syrian regime and moving its headquarters from Damascus to Qatar, emerges stronger.
In the deliberately ambiguously worded ceasefire negotiated by Cairo and Washington, none of the terms insisted by the Quartet–the US, the EU, Russia, and the United Nations—that Hamas renounce violence and recognize Israel in return for an engagement were mentioned. Instead, the ceasefire agreement accepted, however vaguely, Hamas’ central demands that targeted assassinations of individuals be stopped and that the border crossings be opened to the free movement of goods and people has been accepted. Whether these agreements will be implemented remains to be seen of course.
Egypt’s newly elected president Mohamed Morsi has emerged as a key regional power weight. less than 48 hours after the Israeil bombardment, he dispatched his prime minister, Hesham Kandil, to Gaza in a show of support and pointedly condemned Israeli aggression. When the United States continued to unflinchingly support Israel, and refusing to engage Hamas, and with Turkey’s prime minister, Recip Tayyip Erdogan, having cut his ties to Israel, Morsi was the only credible interlocutor capable of negotiating a ceasefire. In fact, emboldened by his role in the Gaza ceasefire, Morsi has flexed his political muscle domestically: conferring on himself extensive powers and immunity from judicial overview.
Cementing Hamas’ role as a legitimate regional power has been a defeat for the United States. Once again, as the Israeli assault on Gaza began, President Barack Obama said he “fully supported israel’s right to self-defense” and both houses of Congress passed lopsided resolutions in favor of Israel. Yet, as even the Economist magazine indicated the casualties have been disproportionate.
- Number of Israelis killed by fire from Gaza between January 1st 2012 and November 11th 2012: 1
- Number of Palestinians in Gaza killed by Israeli fire during the same period: 78
- Number of Israelis killed by fire from Gaza, November 13th-19th 2012: 3
- Total number of Israelis killed by rocket, mortar or anti-tank fire from Gaza since 2006: 47
- Number of Palestinians in Gaza killed by Israeli fire from April 1st 2006 to July 21st 2012: 2,879
- Number of people killed in traffic accidents in Israel in 2011: 384
Unable to deal directly with Hamas with which it has no formal engagement, the United States was forced to deal with them through Morsi and thus for the first time in the long history of Israeli occupation of Palestine, the ceasefire was announced in an Arab capital!
Israeli Prime Minister Binyamin Netanyahu may have thought that another attack on Gaza, less than two months before an election, would have bolstered support for him. But continued international pressure, and the impossibility of stifling Gaza resistance to Israeli oppression compelled him to agree to a ceasefire. A poll found that more than 70 percent of those polled in Israel were opposed to the ceasefire, signaling possibly that Netanyahu had badly miscalculated his pre-election war strategy. No doubt, the US will fund a large part of the costs of the Israeli assault: each interceptor missile fired by its Iron Dome system costs $62,000 and each of the 5 Iron Dome batteries cost $50 million and it plans to deploy a total of 13 batteries. This cost will undoubtedly be borne by the American taxpayers–given the US Administration and Congress’ unconditional support for Israel.
Aid from Qatar and other Arab states–in October 2012, the Emir of Qater was the first head of state to visit Gaza since the tiny coastal enclave was turned into an open air prison by Israel in 2007–will help rebuild its arsenals and the infrastructure, along with of course support from Iran. Moreover, even as Israeli missiles and air-strikes may have devastated its weapons factories and arsenals, by bombing buses, Hamas has reminded Israeli leaders of its extraordinary resilience.
In any preliminary assessment of the Israeli assault on Gaza, Hamas and Morsi have emerged as winners, though at a terrible cost to the people of Gaza–another thing that Netanyahu has to answer for.
Tags: democracy, Human Rights, India
During the last weekend, the entire city of Mumbai, India’s commercial capital came to a standstill as the xenophobic Hindu fundamentalist leader, Balasaheb Thackeray died on Saturday November 17, 2012. A 21-year old woman from Palghar in the neighboring Thane district posted on Facebook, the message:
This was “liked” by another 20 year-old woman, Renu Srinivasan. Shockingly, the two were arrested for “hurting religious sentiments” and by Sunday night, Shiv Sainiks–members of Thackeray’s political party–ransacked the orthopedic hospital of Dr. Abdul Dhada, the uncle of the woman who had posted the original message on FB.
In cold death as in life, Thackeray has been a menace, Since he founded the Shiv Sena–the army of Shiv–in 1966, he has plagued Maharashtra, first, by unleashing campaigns against migrants from South India, and later in the 1990s by vicious anti-Muslim agitations that led to more than 900 deaths, and in this century campaigns against North Indians. His strength stemmed from the Shiv Sena’s unions, which worked with employers to counter–and eventually subdue the more militant trade unions of the city’s textile mills. The Sena also acted as a cultural police targeting Valentine’s day celebrations, Indo-Pakistani cricket matches, and Pakistani writers and artists. Anyone critical of Shivaji, the great Maratha emperor also faced the Sena’s wrath as the historian James Laine found out when he wrote a book about Shivaji, Hindu King in Muslim India. His book was banned first in Maharashtra, and later in all of India, and the Bhandarkar Oriental Research Institute where he conducted his research was vandalized.
Rather than confronting arguments in a book, the preferred policy of the Indian government is to ban them altogether. Any book–or cartoon–that depicts someone or some community in an unflattering light is banned: recently a textbook that had a cartoon of Ambedkar, the Dalit leader; a novel by Rohinton Mistry; the noted scholar A. K. Ramanujam’s essay on the Ramayana; Salman Rushdie’s Satanic Verses to name just a few. Banning of books means of course no one in the country can assess the validity of the charges laid against the work in question and why a research institution where an academic consulted books should be vandalized is beyond rational comprehension.
Even then, the case of the arrest of the two women who were arrested in the latest incident should send a chill down the spine of everyone. They had not mentioned Thackeray by name and there are suggestions the arrests were made and the hospital vandalized to settle some local scores. Yet, how these FB posts were singled out among the literally thousands of such posts expressing similar ideas gives great concern.
No one can doubt it is fear that shut Mumbai down: surely one cannot expect the South Indians, the Muslims, and more recently the North Indians to moan the death of a man who persecuted them. What is worse, major political figures from the President of India to Bollywood stars and sporting royalty like Sachin Tendulkar all queued up to pay homage to him on his deathbed!
This is the real legacy of Bal Thackeray. To make political violence so routine that it ceases to outrage. To make the strategy of scapegoating and targeting particular ethnic, religious, or political groups part of the calculus of everyday politics. To make fear and intimidation a legitimate, accepted part of political leadership. And to constantly remind any potential critic, in media or otherwise, of the threat of violent reprisal for saying something that Thackeray and his thugs might not appreciate.
No less part of Thackeray’s legacy is the fact that the political establishment, world of Bombay celebrities, and mediapersons who fawned over him when he was alive as much as they are doing now appear to have quiescently accepted all of this. The curious insistence on journalists addressing Bal Thackeray as ‘saheb’ — imagine, for instance, an article beginning with the words, “Herr Hitler, responsible for the death of millions of German citizens”–merely reflects this legacy.
Only the former Supreme Court of India justice and current Chair of the Press Council of India, Markandey Katju, courageously proclaimed that he could not pay tribute to Thackeray for persecuting his many victims. This too is because
Thackeray did not…come out of nowhere. He was not the creation simply of disaffected subaltern Maharashtrian communities or of middle-class Maharashtrian communities who felt outsiders had snatched what was their due. He represented something central in Indian political society–not an essentialist, ahistorical tendency but a historically produced capacity for using violence as a form of political reason, the absence of a coherent vision of solidarity that could respect similarity and difference, and the many deep failures of the postcolonial Indian state that our exceptionalist pieties about Indian tolerance, coexistence, and secularism often obscure.
They are already talking of constructing a memorial for him in Shivaji Park–imagine what this must indicate to his many victims! Yet another blot on the tattered fabric of Indian democracy
Tags: Capitalism, democracy, European Union, financial crisis, Germany, Greece, Political Economy, Spain, United States, world politics
Though it should not have caused any surprise, the news that Eurozone economies had contracted by 0.2 percent in the second quarter of 2012 underscored the deepening economic crisis faced by the 17-state bloc. Though the German economy may have grown by 0.3 percent, France recorded a third straight quarter of no growth, and the Finnish, Italian, Portuguese, and Spanish economies all fell sharply. Greece, of course, suffered the steepest fall: 6.2 percent in the second quarter–and was 18 percent below its GDP level in the April-June quarter of 2008.
There is little doubt that the declines have been aggravated by a failure of political imagination. Confronted by budget deficits brought about by high levels of government borrowing and by the collapses of housing bubbles, the creation of a common currency has meant that indebted Eurozone economies have not been able to resort to a currency devaluation to gain a competitive edge. Consequently, the troika of the European Commission, the European Central Bank, and the International Monetary Fund sought to impose an “internal devaluation” on these economies by forcing budget cuts to lower government deficits and wage cuts.
It follows as the night the day that if budgets and wages are cut, the economy will shrink. Lower government spending due to budget cuts means welfare and pension benefits fall, the cost of health care rises, and educational opportunities vaporize. These impact far more adversely on the elderly and the young. With wage cuts, people have less money to spend and this will depress all sectors of the economy–as sales reduce because of lower spending, companies will slash their work forces leading to greater declines in sales and to further cuts in employment. In the most severely affected of the southern European economies, unemployment rates for the youth are already at 50 percent or more. By May 2012, unemployment in the euro zone had already reached 11.1 percent or 17.5 million people and the International Labor Organization (ILO) estimates that it would rise to almost 22 million in the next four years. And if the euro zone were to break up, the ILO estimates unemployment in the 17-state bloc could reach 17 percent.
The adverse conditions created by the stringent cuts mandated by the troika are aggravated by the greater interest rates imposed on the weaker economies by international financial markets–thus for instance, while Austrian banks and other financial institutions can borrow at 2 percent, Italian banks have to pay 6 percent. As these higher interest costs are passed on by the banks to their borrowers, the cost of doing business in Italy, Spain, Portugal, or Greece increases correspondingly and could even negate the wage cuts imposed by the troika!
The effects of economic contraction will spread to the better performing economies. After all, Germany has been able to have a strong industrial sector because cheaper credit to other eurozone members had allowed them to buy German products while the German small-scale sector–which employs 60 percent of the country’s labor force–did not have to worry about currency movements in other European countries or fear that a strong German mark will price them out of the market in other countries.
As Susan Watkins has written, German lessons on debt repayment are especially galling to the Greeks.
Under the Nazi occupation, a hefty monthly payment was extracted from the Greek central bank to cover the Wehrmacht’s expenses; in March 1942 an additional forced loan of 476 million Reichsmarks was levied by the Axis powers. Greek partisans put up some of the toughest military resistance to the Nazis in Europe; the damage wreaked by the occupiers’ revenge was commensurate. Reprisals were exacted on the civilian population at a rate of fifty Greeks for every German killed. Much of the country’s infrastructure was destroyed; forced exports and economic collapse helped bring about one of the worst famines in modern European history.
German occupation (strictly a tripartite occupation since the Italians and the Bulgarians also participated) of Greece also led to hyperinflation–Richard Clogg says it was
five thousand times more severe than the Weimar inflation of the early 1920s. Price levels in January 1946 were more than five trillion times those of May 1941. The exchange rate for the gold sovereign in the autumn of 1944, shortly after the liberation, stood at 170 trillion drachmas.
After the war, the question of German reparations were deferred till German reunification and in the so-called 2+4 (Bonn and Berlin with the US, the USSR, the UK and France) agreement of 1990, Greek claims were excluded. Though several Greek politicians including the current prime minister, Antonis Samaras when he was the foreign affairs minister in 1991, had raised the issue of 476 million marks with the Germans, their demands were summarily dismissed. If this money had, in fact, been paid as the Germans are legally obliged to do, with interest for more than half a century, Greece would no longer be a problem economy.
It is galling too because while ancient historical myths as Greece being the ‘birthplace of democracy’ are routinely trotted out in discussions of the contemporary situation, recent history that people over 70 remember are carefully hidden from view! Be that as it may.
What is crucial is that the crisis demonstrates that capital and finance markets need to be regulated more stringently. It was irresponsible lending that led to high government deficits in Greece and to the housing bubbles in Spain and Ireland, to the subprime crisis in the US, and to the meltdown of the Icelandic economy to mention just the most obvious cases. Financial markets are continuing to demand punitive rates of interest from the weaker economies. The unchecked power of finance must be corralled–or we will enter another great depression just as the obsession with the gold standard led to the depression as Karl Polanyi showed in his Great Transformation.
What is required is a new political imagination not the shrill advocacy of measures that have already aggravated the situation!
Tags: European Union, Eurozone, France, Greece, Internnational Monetary Fund, NATO
In the Greek elections on Sunday May 6, 2012, the two main parties that had governed the country since the end of the dictatorship–New Democracy and Pasok–and both of which has subscribed to the stringent austerity measures imposed on Athens for a bailout suffered a stunning set-back. Used to dominating the polls, together they received just one-third of the votes. Two-thirds of the Greek electorate voted for parties–including a neo-Nazi party, Golden Dawn–that rejected the austerity measures, though most Greeks still want to remain within the Eurozone. Alexis Tsipras, the leader of the Syriza coalition of green and left parties that placed second in the elections, and was the big winner declared the austerity plan dead. That is certainly what the Greek voters indicated though the German Chancellor, Angela Merkel and the European Commission President, José Manuel Durão Barroso claimed that agreements are binding and cannot be negotiated after every election. By what perverted logic does this hold: last year, when the stringent bailout conditions were imposed on Greece by the ‘troika’–the European Union, the European Central Bank, and the International Monetary Fund–the then Greek Prime Minister Giorgios Papandreou wanted to hold a referendum. Merkel and French President Nicolas Sarkozy, forced him to rescind the referendum. The bailout agreement, then, was foisted on the Greek people not only without their consent, but on the explicit condition that their consent not be solicited. No such international agreement can have a shred of legitimacy and the Greeks voted, in their millions, to reject it!
It was, Albert Einstein I think who said that the clearest sign of insanity is to persist in doing something that has failed repeatedly. Clearly, austerity programs have not worked. In Greece, unemployment stands at 21 per cent and the OECD estimates that real wages have fallen by 25 per cent in the last two years.According to the IMF, this will be the fifth straight year of recession for Greece to be followed by a year of stagnation. Even if the Greek government were to implement the austerity measures, the IMF estimates that in 2017, the public debt to GDP ratio would be 137 per cent, higher than at the onset of the current crisis. And thus far, IMF projections have been overly optimistic!
None of this should be surprising! After all if incomes are slashed and taxes raised, people are not going to have the resources to buy as many goods and services as they did earlier. This will lead to a contraction of the market and greater unemployment–which in turn will lead to further contractions in demand and the economy will go into a tailspin. Even Antonis Samaras, leader of the conservative New Democracy party and one who adheres to the austerity pact acknowledges that fully a fourth of all Greek companies have closed their doors since 2009 and a further third of the companies do not pay their workers on time!
What is surprising is that by insisting that Greece implement further austerity measures–and even suspend the rights of collective bargaining–the ‘troika’ has excluded Greece’s military expenditures from the scalpel. As Paul Haydon reported in the Guardian:
In 2006, as the financial crisis was looming, Greece was the third biggest arms importer after China and India. And over the past 10 years its military budget has stood at an average of 4% of GDP, more than £900 per person. If Greece is in need of structural reform, then its oversized military would seem the most logical place to start. In fact, if it had only spent the EU average of 1.7% over the last 20 years, it would have saved a total of 52% of its GDP – meaning instead of being completely bankrupt it would be among the more typical countries struggling with the recession.
In the five years to 2010, Greece was the largest customer for Germany’s arms industry. And in 2010, when the first bailout was being negotiated for Greece, Athens spent 7.1 billion euros on arms even as it slashed 1.8 billion in social spending. Daniel Cohn-Bendit, the European member of parliament, even claimed that Papanreou had told him that German and French support for the bailout was specifically linked to continued military spending. In 2010, at 3 percent of its budget on military spending, Athens allocated a higher percentage of its spending to defense than any NATO state other than the United States.
While it is obvious why Germany and France don’t want Greece to cut its defense spending, why are Greek politicians not raising this as an issue?
Tags: European Union, Eurozone, France, Germany, Greece, Ireland, Italy, Spain, World-economy
Francois Hollande has defeated Nicolas Sarkozy to become the first Socialist president of France in 17 years. He campaigned on a platform to renegotiate the austerity package that the German Chancellor Angela Merkel and Sarkozy had championed, with the support of the British Prime Minister David Cameron and other ‘center-right’ politicians in Europe. The victorious Hollande argued that the way out of the fiscal crisis enveloping the Eurozone is to focus on growth rather than to reduce deficits. The austerity packages, by sharply curbing government expenditures not only leads to unemployment but also reduced payments to the elderly, the young, and the unemployed. They can therefore no longer consume at their previous levels leading to further unemployment as businesses curtail production and the economy continues its tailspin–as has already happened in Greece, Portugal, Italy, Spain, and Ireland.
But will Hollande be successful in reviving the Eurozone economies? Will this ‘marshmallow’ man (so-called because he hates fights) be strong enough to stand up to Merkel? His potential choice as prime minister, Jean-Marc Ayrault. has suggested that rather than reopening the draft fiscal treaty driven by Sarkozy and Merkel., Hollande will seek to incorporate a minor amendment on growth. This would not be surprising as Hollande’s previous experience in government was as an aide to the last Socialist president of France, Francous Mitterand, who in his second term initiated a wave of neo-liberal reforms that de-regulated much of the French economy.
Socialist and Labor parties in Europe, as political expressions of trade unions since the late nineteenth-century, have floundered as manufacturing has shifted to lower-waged countries and trade unions have suffered a tremendous erosion of memberships. After Margareth Thatcher defeated the miners strike in 1984, European unions have steadily declined in political and social significance.
What, too, is a ‘growth’ strategy has never been addressed except to say that it should not be based on austerity measures. As manufacturing is becoming increasingly automated–labor costs amounted to only $7.10 of a total production cost of $178.40 for Apple’s iPhone 4–high-paying jobs in industry are simply disappearing. In large, vertically-integrated industrial operations, workers going on strike in a singe shop can disrupt the entire assembly line and hence undermine corporate profits. If workers in a gear-box plant down their tools, the entire auto assembly line will soon grind to a halt. Workers in the service sector–in the fast food industry or tellers in banks–simply do not have this structural power and hence their ability to bargain for better wages are far more limited. And as industrial production relocates overseas, more and more workers enter the service industries.
With lower incomes, their ability to consume is more limited. And this makes it less profitable to produce more goods and so industrial production continues to plummet as capital is increasingly allocated to financial speculation. This has the strange effect that whenever an election is held, the first question asked by the talking heads on TV is what would be the reaction of the markets to the results–because after the de-regulation of capital controls, the flows of capital into and out of a country are crucial to its economy and there is not government mechanism to regulate these flows.
In these conditions, governments are compelled to maintain market-friendly conditions and this is not something Hollande is likely to change. So what does growth-oriented policies mean? This needs to be spelt out beyond saying that it is the opposite of austerity programs, How is the economy going to add well-paying jobs in a situation when manufacturing is being steadily downgraded in the hierarchy of economic activities?
Tags: 21st Century Capitalism, democracy, Euro, European Union, Eurozone, France, Germany, Greece, Libya, Spain, Syria, United Kingdom, World-economy
“A typical sight during the pre-election protests,” in Spain last year Katherine Ainger wrote in the Guardian, “was a respectable middle-aged man with a cigarette in one hand and a marker pen in the other going from municipal bin to municipal bin writing ‘Vote here’ on the lids.” A few months later, at the other end of the Eurozone, in return for loans from the European Union, leaders of all three major political parties in Greece were required to sign pledges not to rescind a savage austerity program cutting more than 3.3 billion euros from the budget, rendering these pledges concrete and irreversible regardless of the outcome of the general election in April 2012. If the ‘typical sight’ during last year’s Spanish elections suggested that all political parties are the same, the demand that the EU wrested from the Greek politicians proved that their general election, announced for May 6, was rendered meaningless as the victors could not implement a new program. Elections become meaningless.
Paradoxically, just as French President Nicholas Sarkozy and British Prime Minister David Cameron after a brief hesitation, abandoned their client dictators in North Africa–even violently overthrowing the Gaddafi regime in Libya and chafing at the bit to do the same to the Bashar al-Assad regime in Syria–Sarkozy and German Chancellor Angela Merkel abandoned all pretense of supporting democracy when they forced then Greek Prime Minister Giorgios Papandreou to cancel a referendum he had proposed on the harsh terms imposed by the European Union for a bailout to Athens in November 2011. Threatening to expel Greece from the Eurozone, they effectively forced Papandreou to resign two days later and for him to be replaced by a national unity government headed by a former Vice President of the European Central Bank, Lucas Papademos.
Reporting in the Guardian, Helena Smith wrote:
For a country not only burdened by debt but closer to default than ever before, his appointment at the helm of a transitional government in Athens would be widely welcomed. An avuncular figure, Papademos is well respected in the European Union. In the corridors of power in Paris and Berlin, the capitals that count in deciding Greece’s fate, he is seen as a safe pair of hands, more capable than most at navigating the crisis-hit nation away from the shores of economic Armageddon.
Yet, this ‘safe pair of hands’ was the very one who, as president of the Greek Central Bank cooked the books so that Greece could enter the monetary union–and he was helped in this creative accounting by the European division of the Goldman Sachs—which is to be headed soon by the current president of the European Central Bank, Mario Draghi—for a fee of $300 million. Northern European governments only feign ignorance of their Mediterranean neighbors’ debts and subsidies, as Wolfgang Streeck notes, because their surveillance agencies could not “have failed to notice how countries like Greece saturated themselves with cheap credit after their accession to the Eurozone.” In fact, as government subsidies slowed down in conditions of budget consolidation, it was private flows that made up the difference–and it profited the export industries of the north because of the improved purchasing power among the Mediterranean countries—the prosperity of the north was predicated on the indebtedness of the south! Despite the fact that Eurostat had disclosed in 2004 that billions of euros had been shifted off public records in Greece, Athens continued to enjoy triple-A ratings.
Even the money being borrowed by Greece may have been the money of wealthy Greeks sent abroad as the Greek upper classes were practically tax-exempt as Stathis Kouvelakis has pointed out. When PASOK took office in 1981, it began to institute a social welfare system but did not seek to enlarge the tax base and even the middle class and the moderately wealthy remained exempt. In a sense then it is the untaxed money of richer Greeks, recycled through European banks, that is the source of the Greek debt! Yet, precisely because these funds were recycled through European banks, a Greek default would undermine the whole European financial system.
It is no wonder then that Sarkozy and Merkel refused to countenance a referendum in Greece and not only installed their own man at the helm of the government in Athens but placed officials from the ‘troika’–the European Union, the European Central Bank, and the International Monetary Fund–to oversee the operations of the government. Unless the Greek government complied with the stringent terms of the agreement imposed on it, funds in the escrow account will be withheld from Athens: a 32 percent cut in the minimum wage for those under 25, a 22 percent cut for those above 25, a cut in pensions by 25 percent on top of the laying off of some 200,000 workers over the past 12 months.
Given that politicians are hand-in-glove with the banks–from Goldman Sachs helping the Papademos shift billions of euros off the books to the Greek police beat up its Greek citizens to impose order for banks and hedge funds–it is no wonder that citizens are turning their backs on the politicians!