Opinion piece originally published in the EUobserver on 30.11.11.
Not everybody’s into techno music. Some folks are a little bit country; others a little bit rock and roll.
But under what one Brussels wag recently called the EU’s ‘techno-party’ strategy – replacing elected representatives with technocrats and an end to consideration of fiscal policies by parliaments in favour of fiat by civil-servant ‘experts’ – nobody has any choice any more about what kind of music they want to listen to.
Economic policies will be decided for them, by the experts, by, if you will, those bangin’ bureaucrat and banker DJs in Brussels and Frankfurt.
Fiscal policy, like monetary policy, is simply too important for it to be ‘politicised’, the argument goes. The eurozone cataclysm is so serious that we no longer have time for “political games”, as European Commission President Jose Manuel Barroso put it last Monday (21 November), speaking alongside Greece’s new unelected leader, ex-European-Central-Bank (ECB) man Lucas Papademos. Continue reading →
News article on the EU’s ‘European Semester’ originally published in the EUobserver on 09.06.11.
The European taskmaster has cracked the whip. However much austerity has been imposed by EU member states, it is simply not enough.
That is the overriding message from the European Commission that runs through its recommendations for each of the 27 member states in the new, post-crisis system of radically centralised oversight and correction of national economic policies by the EU known as the ‘European Semester’.
“We are now implementing the new system of European governance,” commission chief Jose Manuel Barroso said in the European Parliament in Strasbourg, heralding the unveiling of 27 detailed – or ‘granular’, to use the adjective EU officials use – national prescriptions, telling member states what they are getting right and wrong with their fiscal policies and what they must do to ‘fix’ their economies. Continue reading →
Analysis originally published in the EUobserver 13.12.10
But if what needs to happen cannot happen, what does Lord Skidelsky, a 71-year-old economic historian who has been witness to the full fifty years of European integration, think will?
“I don’t think immediately, but the most likely outcome is that some countries will have to devalue, which means leaving the eurozone. Germany’s domestic policy doesn’t allow any other option.”
“What I don’t know is whether the initial thrust for this will come from a Germany where people are fed up with bail-outs or from the peripheral states where people are fed up with continuous austerity.” Continue reading →
Analysis originally published in the EUobserver 13.12.10.
So how do we get out of this mess?
It’s relatively simple, really. All that has to happen is a rebalancing of competitiveness between the core and the periphery.
“Of course much of the responsibility lies with Germany, doesn’t it?” continues Lord Skidelsky. “The euro was constructed in a way that benefited an export-led economy like Germany, but not everyone else. They have repressed wages to create room for exports, which then chokes off growth paths for other eurozone countries, who can’t readily increase their exports to Germany.”
The short version is that Germany must be forced to sharply boost its wages and inject stimulus: “Domestic demand in Germany should be expanded,” he concludes. Continue reading →
Analysis originally appeared in the EUobserver 10.12.10.
But how did we get into this mess in the first place?
In the 1990s during the run-up to the single currency and throughout the 2000s, all European countries battened down wage demands and loosened the regulations on companies (or, to use the jargon you often hear on the news without really knowing what it means: ‘They liberalised their labour markets’), but it was Germany that won the mad dash to the bottom. The steroids that Berlin had access to that no one else did to the same extent were the aforementioned discipline of labour enabled by the cheap-as-chalk ex-GDR and the rest of the east.
This drastically heightened Germany’s competitive advantage as labour costs per unit – how much it takes to make a given widget – in the periphery of the eurozone outstripped those in the core. This also freed up more spondoolees for German capital to upgrade its products, making sexy German machines that much sexier. Continue reading →
Analysis originally appeared in the EUobserver 09.12.10.
There was a cheeky cartoon that made the Facebook and Twitter rounds a few days ago, posted by one of the Financial Times’ Alphaville bloggers. It went ‘viral,’ as the social-media consultants think the kids say. Bearing the title “Introducing Greater Germany,” it featured a map of Europe with all the German bits coloured blue.
The entire eurozone was blue.
If you passed over the map with your mouse, a caption popped up: “The area formerly known as the eurozone.”
Perhaps the author was taking a light jab at the good doctor of Berlin’s diagnosis and her decidedly uncomfortable austerity enemas prescribed to the entire euro area, or suggesting that through the EU’s bundesbank-inspired economic strictures, Germany, finally, in its third try at it, had managed to rule most of Europe. Continue reading →
Opinion piece originally published in the EUobserver, 17.06.11.
Europe seems to have slipped almost imperceptibly in the space of only a few months into an electoral interzone, a crack in the pavement of democracy.
The formal trappings of clean elections – in which political parties with competing manifestoes contest a ballot free of voter intimidation – are all still there, but someone else has decided in advance what the result will be.
It’s not the voters that are intimidated any more: it’s the parties that are.
The count of EU member states now tallies to four – Ireland, Portugal, Finland and Greece – where this post-political phenomenon has materialised, but committed democrats across the Union should wonder which country is next. Continue reading →