Tag: austerity

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Politics

The Cantankerous Voter

The leader in this week’s Economist advocates a form of financial federalism as a sort of Plan B to combat the economic crisis. Europe has moved far from the “deepening vs widening” debates of the mid-nineties. After Maastricht the questions being asked were mainly with regard to the various geometries that the next step of integration would take and how far would states go in relinquishing sovereignty to a higher order. Then came the euro.

The launching of the single currency was meant to be a grand step in the wider project of integration. A european construct that had been built on the foundations of economic incentives and integration could not but rejoice in having its own single currency. One interesting remark in the Economist appreciation of the causes behind the euro crisis was with regard to this very moment of crystallisation – when Europe got its own coin.

In fact the euro came around a good sixty years into the roller-coaster ride that was gradual european unification. For most of that sixty years Europe had been built on the safe assumption that the project was one very good way to avoid the return to the bad habits of internecine warfare that had plagued the old continent from time immemorial. More importantly the constitutive demos of this project could be sold a series of integrative steps without having too much of a say in it.

The post-war generation did not need reminding that having the Germans and French sitting at a table discussing mutual improvement was much much more preferable than Blitzkrieg and the travails of la resistance. Up until the early nineties this meant an institutional construct that had glaringly obvious deficiencies in its democratic structures. The symbiosis between Council, Commission and Parliament together with the occasional wink from the court in Luxembourg delivered results – top among which was the huge relief that this was an ever growing club of nations NOT GOING TO WAR WITH EACH OTHER.

By the time the euro was launched the face of the demos had changed radically. Old threats and bogeys had either been long forgotten or been dropped along the way. 1989 and the disappearance of the big menace behind the Iron Curtain were also factors that distanced the link between the benefits of mutual cooperation on the one hand and the benefits of cooperation on the other.

The euro was born on the brink of world economic meltdown. A post 9/11 US was also reeling from its failed financial bets and the European crisis followed suit in the second half of the first decade of the 21st century. Europe’s baby was not exactly a crowd pleaser. The demos could only associate the euro with trouble – trouble of the worst kind that takes money out of pockets, destroys jobs and voraciously devours any dreams of prosperity,

The challenge of the European union and its leaders is to continue to sell the project for its benefits beyond the facile association with euro tinged misery. From Greece to France to Malta whether the demos will be able to relatch to a promise and a new european dream will depend on how the plan for the future is revealed and sold.

More importantly it depends on whether there is a plan that involves the kind of cooperation and integration that made the first half-century of European union such an outstanding success…. in spite of the feelings of doom that are all-pervading right now.

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Politics

Austerity : the vote killer

Given the choice between the opinion of resident Times economist Daniel Finkelstein and that of Cyrus Engerer on the current “wave of change” hitting Europe and the wider world I should be forgiven for opting for the former. It is an undeniable fact that popular sentiment lies closer to Cyrus Engerer’s way of thinking – that there is a social-democrat/socialist/progressive wave of change that is rejecting austerity and that has some plan to rebuild Europe through jobs and competitiveness. Or something like that.

I chose Cyrus simply as an example. His sentiments echo clearly those of many other “anti-austerity” hopefuls – and not just in Malta. Here is Cyrus posting on facebook commemorating Europe Day (my translation):

This year Europe Day has a more important meaning where we are watching Europe that has for a bit over ten years been practically run by conservative parties. Last year Denmark chose the Social-Democrat party, France did the same last Sunday and it seems that Social-Democrat parties have begun to win local and regional elections in many countries (Germany, Malta, United Kingdom). The call for the leftist parties is one of hope, progress and growth thanks to investment in youth, education and work instead of austerity. What do you think?

Well I think that Cyrus is confused about the real drive behind the votes. His activism within Malta’s Labour party, a party that is eager to jump onto what seems to be a progressive bandwagon might have much to do with this and he cannot be blamed for this bit of predictable rhetoric. On the other hand the current political situation merits a deeper analysis than the simple explanation of a pendulum switch from conservative to socialist (&c.).

I believe that this is not really a positive vote in favour of some progressive (or socialist or social democrat) pan-European movement but a negative vote against austerity. Cyrus omits to mention, for example, the administrative elections in Italy which were not exactly a success for the Partito Democratico – the largest leftist movement in Italy. Instead, the administrative elections produced a surprise result with the popularity of the Grillini (Movimento Cinque Stelle) best described as the anti-establishment party. Beppe Grillo – the movement’s founder described the success of his Movimento in this manner:

Qui siamo veramente a un cambiamento epocale di pensiero della politica. I cittadini votano se stessi. Stiamo avendo successo. Questo è solo l’inizio. Dalla rigenerazione di cui parlava il nostro presidente della Repubblica, siamo passati alla liquefazione. La destra, il Pdl, il centro: non c’è più nulla. Si stanno liquefacendo in questa diarrea politica. Finalmente i cittadini si riappropriano delle istituzioni perché sono le istituzioni.

Grillo’s analysis centres on the rejection of the current political establishment – the liquidation of the standard political system. Though not far from the truth, Grillo’s reading of the signs is also “egoistic” in political party terms. We could acknowledge “positive” voting for the grillini but then again the message of “ousting” the political establishment is much stronger and larger than the Grillo reality. For that we have just to look at the Le Pen vote in France. Once the first round of presidential elections was over and the options were red or blue we did not really witness the landslide rejection of Sarkozy and the tsunami of progressive votes that many had predicted. Hollande and his progressive growth promises just about scraped through.

Yes, socialist and labourite parties across Europe would love to believe in a wave of positive choices in favour of a program built on investment and spending to encourage growth. That would be the program that ultimately delivers the death sentence  to the Merkozy inspired austerity measures. But do they really have something going? Or is this the child spitting out the medicine and going for the sugared placebo? Even before we start hedging our bets on whether the placebo of “growth” and “the new Marshall plan” will work we should be asking what these programs really mean.

Back to Finkelstein – whom I will quote in order not to bastardise by summarising:

Here’s what I think happened in Greece, and in France, and in the local elections in Italy a few days ago. Voters went to the polls to see if they agreed that two plus two equals four and decided that they did not. Simple arithmetic ran for office, and lost.

Now what exactly does Finkelstein mean by “simple arithmetic”? Thankfully Finkelstein explains what this actually translates to in democratic terms:

The financial crisis saw governments step in to take over debts that had been incurred by private citizens. They could do this because their power to tax their citizens assured lenders that they were good for the money. But two things have happened since 2008. The first is that the size of the debt grew so large in some countries that even its power to tax wouldn’t raise enough money. The second, which was dramatically underlined by the election results at the weekend, is that the power to tax proved to be theoretical. Democratic governments can’t tax (or reduce spending) if voters won’t let them.

The clash between financial reality and democratic response is as big a political crisis as most of us have ever seen. All over Europe, voters are in revolt against paying the bills they and their fellow countrymen have incurred. And not just in Europe. A recent visit to Japan found a country flitting from one prime minister to the next and still, after many years of struggle, no closer to determining how — or even whether — to deal with its economic problems.

On Europe Day, we would do well to look more closely at this kind of message. The rhetoric of “growth” is all well and good. So is it facile to condemn “democracy controlled by markets”. The importance of responsible governance can never be sufficiently underlined. When I look at the recent outings by Joseph Muscat what with all the karma that “Taghlim. Tahrig. &c” I can only see a pandering to the huge chunk of voters who will act as most voters would: voting for the option that promises less tax and more spending.

Malta does not even have a movement such as the Movimento Cinque Stelle – and what with Alternattiva seeming to be lured by the progressive promises of a “growth driven” plan of recovery (an inevitable step given AD’s heart lies strongly with the working left) there seem to be less options for delivering the message of no confidence to the entire political class. Meanwhile in parliament today Tonio Fenech summarised what this year’s budget means to the population:

“(…) increasing pensions, the tax reductions for SMEs and for parents whose children are in private schools, the incentives for the property sector and the investment we’re carrying out in the economy,”

The brunt of his attack on Joseph Muscat was based on the notion that this government has actually increased spending notwithstanding the 40 million euro budget cuts. Interestingly Fenech’s damning accusation for Muscat was that “A Labour government will be an austerity government… “. This leaves us with much food for thought regarding both political parties. Is Gonzi’s PN eager to shed any links it has with “austerity” plans and if so does that mean that both our main political parties are jumping on the “growth” bandwagon because that is where the votes evidently lie?

Earlier Fenech had sung his praises for Francois Hollande’s policies regarding the stability pact stating that:

the Maltese government has “consistently emphasised that growth and stability go hand in hand and should not be divorced,” adding that the pact needs to be balanced between growth and stability because “there is no growth without stability.”

President Barroso of the European Commission has given a lukewarm reception to the Hollande ideas (see this article on the WSJ) so where does this put the PN government policy wise? Will it be backing Hollande to the hilt in this new battle of “austerity vs growth”?

Given that elections are still round the corner, and once the focus shifts away from Franco Debono’s timetable for parliament, it will be interesting to see how the “growth vs austerity” battle will translate in Malta. Better still, it will definitely be another sad day for the anti-establishment voters who would have hoped for an option that recaptures the power that has long been lost to the institutionally cocooned  behemoths that we have long labelled as “PLPN”.

 

* Note: The Times (UK) article links might not be immediately available to non-subscribers.

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Mediawatch Politics

Allons enfants de l’austerity

Some required reading from today’s Figaro. Unfortunately the editorial is still not available online for non-paying members so I have typed out the main quote. We will see more of this in tonight’s debate between Francois Hollande and Sarkozy  but what is more interesting is how the main thrust of the problems that will be debated is a universal set of issues that apply Europe-wide.

Last time round the nationalist party cloned Sarkozy’s slogan “Ensemble, tout est possible” (Flimkien kollox possibli). This time we might see some more inevitable parallels. France’s “progressive” left built around anti-Sarkozyism is running a campaign built on “Hope”.

Hollande has promised employment and work but while his appealing rhetoric might sound great for the anti-austerity crowd it has already attracted the worried stares of the financial markets. Sarkozy is basing his challenge on facing the stark reality of failed models and failed economies.

May day’ speeches in Malta might be a taste of similar things to come closer to home. Joseph Muscat’s hope and rhetoric still fails the basic test of “Show me the money”. Combine that with his pre-hedging regarding “Hofra Mark 2012” (or the gap in finances he will obviously be surprised to discover once he is elected PM) and you seem to be getting a perfect clone of François Hollande.

There is much more to be read into this and I will do so as soon as I find the time. Here is part of Le Figaro’s editorial. For an amusing reading try replacing NS with Lawrence Gonzi and FH with Joseph Muscat.

“(NS) a défendu un nouveau modèle français, fondé sur un constat d’évidence : la mondialisation bouscule tout, tout est donc à repenser si on ne veut pas etre englouti. Le viex modéle social, perpétuellement financé à crédit, ne tient plus la route. Si l’on ne fait rien, il s’écroulera bientot. (…) (FH) connait bien le problème de fond de sa campagne. Il promet des choses qu’il ne pourra tenir, puisque tous les créanciers de la France – la fameuse “finance” – l’observeront seconde par seconde.”

(watch the video top-right from 14 minutes)

Categories
Politics

The “after” party

In parliament it’s been reduced to a question of motions and counter-motions. While the nation fakes a collective breath-holding session as the MP’s battle out the latest round the few who can be bothered set up impromptu betting odds as to what will happen next in the drawn-out Debono saga. In the press we have the usual white elephants – from the White Rocks Sports Complex that resurfaced a few weeks ago to the Feasibility Plans for Bridges to Gozo.

All the while the business of government is stalled and hedged because the money bills have not been voted and because – let’s face it –  every other moment is being dedicated to secret strategy meetings (pace Maltatoday) that are about as secret as whatever Jeffrey Pullicino Orlando has had for lunch or Owen Bonnici’s latest hobby. The opposition is busy painting the state of the nation as one floundering in abject poverty, expensive bills and of course mention has now begun to be made of the debts and holes that this government will bequeath to its successor. Mais bien sur.

While the circus is in full force the world around the navel-gazing isle is on a rapid mission of the “change or bust” kind – one that cannot afford to give a rat’s arse about arty farty obvious promises in the form of Joseph Muscat’s latest populist mantras. Whether the circus lasts till June or October one thing is for sure. There will be an end to the party. After that it will be down to the business of governing in a time of austerity.

Speculation is rife that this spring could end up being a hot European spring politically with the anti-austerity wave finally taking the European leaders heads-on. A Hollande vicotry in France and a failure by Merkel to push on with further measures could risk spelling disaster for the fragile instability that currently is a European reality. Within that perspective – and outside the childish noise of the four walls of our Franco-led parliament – the future looks daunting.

Will our parties take the realist approach and moderate their promises in the run up for an election? Will they participate in a much needed eye-opening campaign for voters to appreciate the realities of the world beyond the shores of San Pawl-il Bahar and Mellieha? Or will they proceed with their pie-in-the-sky populisms feeding off a skewed view of the world and the immediate economic ills?

At this rate, the after party promises to be uglier than the mother of all hangovers.