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Brutish, Nasty, Prolonged

by john_evans Tue Aug 18th, 2015 at 02:11:09 AM EST

Wolfgang Streeck, in the Guardian's Comment Is Free, has a summary of recent events in the Eurozone and future developments (if that's the word).

Brutish, nasty - and not even short: the ominous future of the eurozone | Wolfgang Streeck | Comment is free | The Guardian

Politics can make strange bedfellows, but sometimes just for a one-night stand. In the end Varoufakis was overruled by Alexis Tsipras and Schäuble was overruled by Angela Merkel. The latter, displaying truly breathtaking political skills, managed within a day or two to redefine the resounding no of the Greek people to their creditors' demands into a yes to "the European idea", defined as a common currency - allowing him to sign on to even harsher conditions than had been rejected in the referendum (called, it seems, at the suggestion of Varoufakis, who was sacked on the very evening the results were in). Afraid of the unimaginable economic disaster publicly imagined by fear-mongering euro supporters, and perhaps encouraged by informal promises by Brussels functionaries of future injections of other peoples' money, Tsipras was ready to split his party and govern with those who had for decades let Greece rot in clientelism and corruption, offering the parties of Samaras and Papandreou an opportunity to regain legitimacy as pro-European supporters of "reform".

Merkel, for her part, used Schäuble's exit plan as a bargaining tool, certain that Tsipras would eventually cave in and get rid of Varoufakis. The new three-year rescue programme will carry her beyond her next election; it also avoids, or at least postpones, conflict with France, which wants Greece in for the same reasons that Schäuble wanted it out (Merkel expects less of France than Schäuble does, which makes it easier for her to live with François Hollande). It also spares her having to eat her famous motto from 2011: "If the euro fails, Europe fails" - as well as, for the time being, from having to let German voters in on the fact, commonplace among the cognoscenti but still mercifully hidden from the public, that the Greek rescue money will never be repaid. Moreover, after Schäuble had in earlier rounds talked the other EMU countries into sharing the Greek public debt, Merkel could count on their support for her refusal to consider debt restructuring. Most importantly, with Greece staying in common currency, she can now reassure her core constituency, the German export industry, that none of the captive members of eurozone will ever be released, not even on probation - something much appreciated also by the German trade unions, the Social Democrats, and her geostrategically-minded American friends.

Of course none of this means the euro mess won't continue. On the contrary, with a historic window for a fundamental recalibration of the euro system missed we are in for more of the same, and the next act of the drama is already beginning.

I think the whole article is a must-read. Another teaser below the fold:


Brutish, nasty - and not even short: the ominous future of the eurozone | Wolfgang Streeck | Comment is free | The Guardian

Not that the limits of development assistance for backward regions in a currency union with high regional disparities were unknown. Germany and Italy have experience here that is far from encouraging: Italy in the Mezzogiorno (southern) regions, Germany in its Neue Länder of the former GDR - the latter being another case of a misconceived monetary union with disastrous economic effects. Both countries are today transferring roughly 4% of their annual GDP to their poorer regions just to prevent the difference in per-capita income getting bigger. German taxpayers grudgingly continue to pay a "solidarity supplement" on top of their income tax for aid to East Germany: a region, incidentally, whose entire economic and political elite was after 1990 replaced with West German personnel, bringing with them the entire panoply of West German institutions. Still, the difference in per-capita income between West and East Germany has for years been stable at about 20%.

Nothing even remotely resembling the personal and institutional reform applied to East Germany will happen in southern Europe - as it has never happened in the Mezzogiorno. The domestic politics of the eurozone, conducted through international relations, will remain both deadlocked and unfriendly. After the Schäuble-Varoufakis interlude there is no prospect in the foreseeable future of a re-nationalisation of monetary sovereignty. Nor is there any movement toward a de-nationalisation of political and fiscal sovereignty, with political union complementing monetary union.

On the contrary, each member state is today more than ever jealously guarding its national capacities to defend its interests against others.

Political integration as a result of, and by means of, economic integration was a paying strategy in the early years of the "European Project". Thirty years now have been wasted on monetary union. There are more wasted years to come.

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Not sure I'd call Merkel masterful when it's become obvious Tsipras was looking to sell out.
by tjbuff (timhess@adelphia.net) on Tue Aug 18th, 2015 at 09:35:28 AM EST
Streek doesn't seem to get his enumeration of events in the right sequence.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Aug 18th, 2015 at 09:52:47 AM EST
[ Parent ]
It's smarter to be lucky than it's lucky to be smart.
by rifek on Tue Aug 18th, 2015 at 04:55:22 PM EST
[ Parent ]
Let's look on the bright side. If the original goal of the EU was to tap into the brains and productivity of Germany without German tanks rolling down the streets in France, so far so good. At least they aren't herding healthy young Greeks into holding pens for organ donation to the wealthy .

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Tue Aug 18th, 2015 at 06:09:23 PM EST
 At least they aren't herding healthy young Greeks into holding pens...

Instead they have the Greeks herding immigrants into holding pens due to the wonderfully functional EU immigration system.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Aug 19th, 2015 at 11:23:10 AM EST
[ Parent ]
Banks work better than tanks.

Who knew?

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Aug 21st, 2015 at 05:24:54 AM EST
[ Parent ]
Streeck correctly identifies some of the weaknesses of the Euro project - the lack of political integration, and the inadequacy of fiscal transfer mechanisms. However he ignores the institutional shortcomings of the ECB, and its use of a lack of liquidity as a coercive instrument. His side-swipe at American Macroeconomists is also misplaced - they have been pointing out the flaws in the architecture of the Eurozone since long before him, I suspect.

Where I fear he is correct is when he says the crisis will be Nasty, brutish and not even short (a play on Thomas Hobbes' Leviathan quotation). It will lead to a rise in a great deal of nationalism and xenophobia, and a destruction in popular support for the European ideal.  But it will also be prolonged.  The end, when it comes, may be sudden and catastrophic, but I suspect it will be a long time coming.

In the meantime we can look forward to a rise of ever more nationalist parties throughout Europe, an increasingly instrumentalist and reductionist attitude to all things European, and greater pressures towards Brexit or a reduction in the drive for integration. I'm not sure whether Merkel can do much about this, even if she wanted to, but she is certainly the only leader who could even begin to try.

Maybe after the next German elections, but I doubt it. Time to hunker down for a long dark winter in European affairs. Regrettably we will be hearing a lot more from the Jeroen Dijsselbloems of this world...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Aug 19th, 2015 at 04:52:48 AM EST
"No arts; no letters; no society; and which is worst of all, continual fear and danger of violent death; and the life of man solitary, poor, nasty, brutish, and short."
― Thomas Hobbes, Leviathan

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Thu Aug 20th, 2015 at 06:04:26 AM EST
[ Parent ]
How Not to Be a Leader - Umair Haque
Whether it's the rise of the extreme right in Europe, Donald Trump's ascent in the US, Canada's stunning plunge into fringe politics, the world is awash in a new political phenomenon: a tsunami of vocal, angry extremism, where once placid waters calmly shimmered. Not extreme enough for you? In one of the world's most advanced societies, unemployed kids, of which there are too many, are going to have to go...not to school, college, or even community service...but to boot camp.

... A few years ago, there was a huge leadership deficit in the world. No one, it seemed, was steering the ship. And perhaps you thought things couldn't get worse. But today things are different: there's not a deficit of leadership anymore. There is a surplus of bad leadership. ...

Fatalism. ... What the neo-demagogues share, above all, is an absurd answer to the great question of social inclusion: none. ... But the demagogue exploits people's selfishness in an age of stagnation -- why should the immigrant have any, when I suddenly have barely enough? ...

Scapegoating. ... Let me put it plainly. To persecute immigrants and the poor for a weak economy instead of bankers is like blaming your pet kitten for terrorism. ... Nowhere -- in not a single advanced economy -- do we see demagogues calling for bankers to be prosecuted ... They equate money with wealth -- and so they do not understand that wealth is what prosperity is actually composed of, and money is merely paper that helps us distribute it; therefore, money must be hoarded, concentrated, and denied to those who haven't "earned" it -- instead of distributed widely, precisely so society can continue to prosper. ...

Timidity. You may think that demogagues, angry and loud as they are, are reckless firebrands. But the truth is that they are timid, cowering, panicked things. Let me explain.

Because the demagogue believes that money is wealth, the next plank in his plan for society is to "eliminate the deficit". But this is a negative real interest rate world. Little could be more mind-bendingly absurd. ...

Dehumanization. ... The demagogue justifies his claims with a very simple appeal. If we'd exclude the weak, pay off the bills, and punish the undeserving, the demagogue claims, everyone else could have a life worth living. ... It is a dream of hyperrational individualistic materialism: a McMansion, a fleet of cars, and gadgets for every family. So what's wrong with that? Nothing. But there's not much right with it, either.

Another slam by Haque.

Schengen is toast!
by epochepoque on Wed Aug 19th, 2015 at 06:17:04 PM EST
Who are better leaders, especially on the left?

My generation X should be dominating now, but what do we have? Obama brought most experts from the Clinton times (like Bush Jr brought us the old Cheney, Rumsfeld), and Hillary Clinton is still the most talked about Democratic candidate. The new hopes Sanders (US) and Corbyn (UK) are about just as old. I am the only one missing badass leadership from the Xers?

by das monde on Wed Aug 19th, 2015 at 11:04:32 PM EST
[ Parent ]
the former mayor of baltimore, and former governor of maryland, is a gen x democrat, albeit on the older edge of the generation like obama.
by wu ming on Thu Aug 20th, 2015 at 04:06:31 AM EST
[ Parent ]
There's a raft of younger (say, currently under 50) leaders all over Europe. In Spain all political parties except the ruling PP have leaders around 40 years old. Some are in their early 30s.

That the next US president is likely to be about 70 is not that unusual for two reasons. First, the extension of life expectancy. And second, the last three US presidents were in their 40s at the time of election and the last two had older vicepresidents.

As to the US, here's the full list of Democratic/Republican primary contenders:

Ted Cruz (R), 44
Bobby Jindal (R), 44
Marco Rubio (R), 44
Scott Walker (R), 47
Chris Christie (R), 52
Martin O'Malley (D), 52
Rand Paul (R), 52
Rick Santorum (R), 57
Mike Huckabee (R), 59
Carly Fiorina (R), 60
Lindsey Graham (R), 60
Jeb Bush (R), 62
Lincoln Chaffee (D), 62
Ben Carson (R), 63
John Casich (D), 63
Jim Gilmore (R), 65
Rick Perry (R), 65
Hillary Clinton (D), 67
Donald Trump (R), 69
Jim Webb (D), 69
George Pataki (R), 70
Bernie Sanders (D), 73


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Aug 20th, 2015 at 04:42:57 AM EST
[ Parent ]
Same exercise for European Council representatives (heads of government or executive heads of state):

Taavi Rõivas (EE), 35
Charles Michel (BE), 39
Matteo Renzi (IT), 40
Joseph Muscat (MT), 41
Alexis Tsipras (EL), 41
Xavier Bettel (LU), 42
Bohuslav Sobotka (CZ), 43
David Cameron (UK), 48
Zoran Milanovic (HR), 48
Mark Rutte (NL), 48
Robert Fico (SK), 50
Miro Cerar (SL), 51
Pedro Passos Coelho (PT), 51
Lars Lokke Rasmussen (DK), 51
Viktor Orbán (HU), 52
Juha Sipilä (FI), 54
Werner Faymann (AT), 55
Boyko Borissov (BG), 56
Klaus Iohannis (RO), 56
Ewa Kopasz (PL), 58
Stefan Löfven (SE), 58
Dalia Grybauskaité (LT), 59
Mariano Rajoy (ES), 60
François Hollande (FR), 61
Angela Merkel (DE), 61
Enda Kenny (IE), 64
Laimdota Straujuma (LV), 64
Nicos Anastasiades (CY), 68

For comparison with US presidential primaries I would subtract 5 years (one of the current US primary hopefuls face half-term reelection in 5 years' time - Obama was reelected at 49).

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Aug 20th, 2015 at 05:03:22 AM EST
[ Parent ]
I never liked this youth cult. Perhaps because I have made the experience that my generation  - generation X, as the younger boomers tended to produce a bunch of neoliberals of the worst sort.
by IM on Thu Aug 20th, 2015 at 06:07:19 AM EST
[ Parent ]
This is something I wrote about in the last paragraph of a long comment on Spiegel's recent history five years ago:

...The current generation at the helm is the youth of the late seventies, the half-generation right after the '68ers. Every generation is supposed to rebel; but a large part of this generation chose to rebel against the fading and failing ideals of the hippies and beatniks and soixante-huitards of the previous generation. And they're still at it. Of course, the constant urge to bring down ideals can only be nihilistic, and if I am allowed some psychologising, the lack of own grand achievement only adds to the destructive urge...

Then again, the mostly even younger neolibs who managed to rise to the top in other EU countries (especially formerly communist ones) are even worse than underachievers like Westerwelle & co.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Sep 1st, 2015 at 04:29:55 AM EST
[ Parent ]
The tl;dr answer is the last generation of leaders of the Center Left destroyed the Center Left by their turn to the neo-liberal.  NuLabour is the current poster child but the same thing happened here in the US and in the (so-called) Social Democratic parties across Europe.


She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Thu Aug 20th, 2015 at 04:14:01 PM EST
[ Parent ]
The degeneration of Center Left is history already. Still, we could expect some (at least Blair-lite) leadership maniacs, not just overt corporate lackeys. Is the X-generation generally conformists, after all?
by das monde on Fri Aug 21st, 2015 at 05:53:38 AM EST
[ Parent ]
Every "generation" organises itself within the social currents existing at its historical point in time and may influence their development in its own way. If "the degeneration of the Center Left is history already" how can the failure of the Generation X to produce old-style centre-left leaders be seen as conformism?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Aug 21st, 2015 at 06:10:40 AM EST
[ Parent ]
The provocative suggestion is: the Xers are not into leadership "at all", old style or new. As if some leadership will come up by itself, pass the drink please :-] Are there many iconic business leaders, rock stars of that generation?

I may also suggest that economic currents are more influential.

by das monde on Fri Aug 21st, 2015 at 06:51:51 AM EST
[ Parent ]
Are you saying there are no "leaders" in the 35y-55y age bracket? I don't think that "provocative suggestion" needs to be taken seriously.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Aug 21st, 2015 at 07:00:54 AM EST
[ Parent ]
We are the serious generation :-) Can we share here the x-personalities that actually inspire us?
by das monde on Fri Aug 21st, 2015 at 08:49:27 PM EST
[ Parent ]
So we are hard to impress.
by das monde on Sun Aug 23rd, 2015 at 09:45:01 AM EST
[ Parent ]
Now that veers to much into Kid's today! territory.
by IM on Fri Aug 21st, 2015 at 12:41:51 PM EST
[ Parent ]
I don't know if this tallies with the ages of various figures listed by others, but my gut reaction is that "Generation X" (general definition birth late 1960s - early 1980s) is only really different from boomers in the second half (e.g. born late 70s or later). As such, maybe the ones who have a different view are only just coming towards power.

It may also be that the "Generation" thing isn't that meaningful - it's about the historical events that shape mindsets. So, maybe the Boomers and X are very similar - Cold War kids - and change comes later?

by Metatone (metatone [a|t] gmail (dot) com) on Thu Aug 20th, 2015 at 05:25:46 PM EST
[ Parent ]
Strauss and Howe in their book Generations identified a four generation cycle in US history going back to the generation that experienced the Armada. Each generation had its own characteristics, and each cycle started with a 'heroic generation, but events, such as the US Civil War could abort one or more of the generations and start a new cycle. Until the discovery of the New World there tended to be only occasional cycles that didn't repeat or no cycles for centuries. So, to the extent to which it applies, the Cold War continuation of the so called 'Greatest Generation' could have seriously affected the generation that followed.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Aug 20th, 2015 at 06:10:28 PM EST
[ Parent ]


I used to be afew. I'm still not many.
by john_evans (john(dot)evans(dot)et(at)gmail(dot)com) on Thu Aug 20th, 2015 at 01:28:24 AM EST


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