Tag Archives: eu

UK should Remain in the EU to stop the global advance of the far right

voteremain

Tomorrow the British will go to the polls to decide whether UK should stay within the European Union or not. I truly hope that the majority will vote to Remain.

Whatever the final result, the referendum debate has shown there is a worrying rise of xenophobia across all sectors of British society, in a country where migrants have always been welcomed and that has featured among the most cosmopolitan in the world. Many on the Leave side have openly campaigned against migrants and for national chauvinism, spreading incorrect information and unfounded arguments to fuel hate and resentment.

Even more worrying, the debate on immigration around the EU referendum saw many on the left opening the way for the legitimisation of the widespread resentment against migrants. Several prominent figures – including union leaders, intellectuals and Labour party members – have stressed the need for “controlled immigration” and the protection of British workers vis-a-vis all other workers.

Admirably, Labour leader Jeremy Corbyn has stuck to his principles and insisted on his pro-immigration stance. The priority should be solidarity across all those hit by the crisis to fight the devastations of neoliberalism and austerity. Migrants are a convenient scapegoat to divert the public’s attention from the real cause of their plight: the drastic reduction of state welfare, widespread privatisations and a wholesale attack on workers’ rights.

Other sectors of the radical left have maintained their commitment to internationalism and inclusion, but campaigned for Leave, hoping that a Leave victory would open a crisis within the Tories from which the left might emerge victorious. Like sectors of the Sanders’ base in the US, and leftists across Europe, they are unwittingly paving the way for the rise of the far right, in the hope that this pragmatic short-term convergence of interests will topple neoliberal technocracy and lead to systemic change.

The reality is that the Tory right and the far right UKIP are much better positioned to capitalise on UK exiting the EU, and they have been the real protagonists of the Leave campaign. Brexit would be one major step towards a global advance of far right populism. It could be followed by a Trump victory in the US presidential election in November, a Le Pen victory in the 2017 French presidential elections, and a victory of the left/right populist 5 Star movement in Italy in 2018.

The EU is in deep crisis and British PM Cameron’s EU deal means that if Britain votes to Remain, the way will be opened for a technocratic curtailing of freedom of movement – all member countries would be allowed to put a temporary break on migration from other EU countries, if they can prove that their state budgets are under substantial pressure. This would be no victory either. But handing the UK to a right-wing alliance that thrives on hate and xenophobia is undoubtedly far worse.
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Varoufakis announces pan-European movement to “democratise the EU”

In a recent interview for the Italian magazine L’Espresso, former finance minister of Greece Yanis Varoufakis announces the formation of a new Pan-European movement in February 2016, with the aim to democratise the EU, rather than working for its dissolution.

“Without a doubt, if we continue along the lines of present policies, that have failed so spectacularly, the centrifugal forces will get so strong that the Eurozone first, and then the EU, will fragment. … No one can tell where the rupture will take place. Maybe in Greece, maybe in Italy, maybe somewhere else. Like in the case of the Soviet Union, where it was impossible to predict how its end would come … we know that the present course is catastrophic for the EU even if ignorant of what will trigger it.”

Greek crisis round up – 24 July 2015

—> Wednesday night the Greek parliament approved a 977-page bill as required by the new EU memorandum. Syriza MPs only received it a day before the parliamentary debate. It is clear that nobody could possibly have gone through all the pages to have an informed debate. The hours of debate preceding the vote showed in fact that there was little talk of the actual measures under scrutiny.
We will have to wait for much more refined analysis to understand all the implications of the bill. What English-speaking analyses have reported so far is that the bill covered two main areas: a whole new Civil Procedure code – basically a reform of the civil justice system; and the implementation of the EU Bank Recovery and Resolution Directive, laying out rules for bank rescue – allegedly to avoid taxpayers to bear the burden, in practice to shift the burden towards bank depositors.

Important measures that have been downplayed by pro-agreement media:

– the EU directive now sets rules for bail-in (i.e. bank depositors’ haircuts) for banks recapitalisation in case of insolvency or bankruptcy; the rules will only come into force from January 2016, sparking speculation by some analysts that depositors will take a hit (i.e. they will lose part of their savings to recapitalise the Greek banks), and it is just a matter of when, rather than if. Business analyst Frances Coppola sees the continuation of capital controls as a prelude to bail-in of depositors. There are widespread fears of a repeat of Cyprus, where account holders with more than 100,000 euros lost money. In this scenario, Greek small and medium enterprises would take a major hit, further eroding any chance for economic growth and recovery;

– another hot topic is the issue of home repossessions on non-performing loans (i.e. large numbers of Greeks defaulted on their mortgages). Banks up to now have avoided mass repossessions. According to pro-agreement English-speaking Greek analysis outlet Macropolis, the new measures approved by the bill make it easier for banks to auction homes on non-performing loans. In his speech to the Greek parliament, Tsipras of course reassured with much emphasis that it would be the end of Syriza if the poorest and more vulnerable were not protected – he has not however said much about the real scope of potential home repossessions. This issue is connected to the bail-in. The general orientation of creditors is to make sure that Greek banks’ recapitalisation (accepted by everybody as inevitable) takes place with the least possible burden on international creditors (i.e. reducing the amount of money to be loaned to save the banks). This means of course that the hit will have to be borne by common people and the Greek economy.

—> Predictably, the bill was approved, with pro-agreement opposition New Democracy and PASOK supporting the government. The main attention was focused on Syriza internal dissent. 36 MPs voted no or abstained, down from 39 in the previous vote a week before – the fact remains that the Syriza-Anel coalition does not have a majority anymore. In another spectacular u-turn Varoufakis voted ‘yes’ – apparently arguing that he was already in favour of these measures before.

It is unclear what the implications of this continued dissent are. Syriza’s central committee has not been called yet, Tsipras seems to be stalling on that. There are contrasting views over the real intentions of the dissenters and whether there will be a split or not. Rumours about snap elections in autumn are rife – this seems to be a probable scenario if the dissenters leave and form a new party. Pollsters give Tsipras’ Syriza still firmly on the lead, and Tsipras ratings remain high – this is all to be taken with a grain of salt, these are the same pollsters who hugely underestimated the ‘no’ vote in the Greferendum.

Beyond the questionable numbers, Tsipras seems to be managing this transition pretty well. He has made strong inroads with the pro-agreement Greek media establishment, which was notoriously anti-Syriza and anti-referendum. The rhetoric of a heroic national leader crushed by the unbeatable powers of Germany and Europe, and forced into accepting an unfavourable agreement to avoid complete collapse, seems to be gaining ground. Syriza hopefuls are trying to make sense of Tsipras’ capitulation, while retaining Syriza’s ‘distinctiveness’ vis-a-vis the older political establishment. A popular narrative is that this is just a tactical move and in the end Syriza will rise again, ignore the agreement and get going with the long-term plan of radical and progressive change – but for now Tsipras needs more time to regain strength and come up with a viable plan, the story goes. Of course Syriza dissenters categorically reject such narratives as delusional, and claim that Tsipras’ choice has been disastrous and there is nothing heroic about giving in to creditors and betraying the Greferendum.

—> The Greek bill vote is another milestone of the agreement process, various government leaders and technocrats now estimate that the deal should be finalised in the second half of August. After €7.16bn disbursed as bridge funding last monday (all gone back to the creditors, mostly IMF and ECB), there is talk of another bridge loan to allow Greece to repay €3.2bn to the ECB, due on 20 August – the deal might not be finalised by then.

—> Talks from many quarters seem to confirm that debt restructuring is firmly on the agenda, even though we don’t really know how much, in what ways, what it really means etc. The Italian central bank governor noted yesterday that in fact interest rates on Greece’s negotiated debt repayments are quite low and the timelines spread over time – something that both Syriza and its opposers in the last election made sure to keep well hidden from public scrutiny. According to him, further extensions won’t be enough to sort out the problem, substantial debt relief needs to be on the agenda – translated, this is closer to the IMF line that part of the debt needs to be cancelled, something Germany is not even considering at the moment.

It is significant that high-level US officials continue to join in the conversation, reassuring that the talks are proceeding smoothly and that a deal will be struck and one that is not bringing Greece to its knees – something they did even during the heated days around the Greferendum. This is of course neither altruistic help for allies in trouble, nor merely a preoccupation for the stability of global financial markets. The US has very little interest in Grexit and will do whatever they can to avoid Greece falling into the hands of Putin – something a Grexit would make quite likely.

—> The bailout talks will now continue in Greece, the troika is about to return to its ‘debt colony’. The latest is that there are disagreements between troika chiefs and the Greek government over where the creditors will lodge. Of course this is more about the symbolic moment of capitulation which Tsipras is trying to manage by stalling and appearing like he’s got some say and leeway to contain the troika’s interference in Greek matters.

Major obstacles on the way – or should we say, other bitter pills to swallow for Greeks – are discussions around labour laws reforms that will further weaken workers’ position, market liberalisations and the even more controversial privatisation fund. The Greek parliament will have to approve more neoliberal measures in August. There also remains the open question of IMF disagreement with Germany and other EU countries over debt relief.

Greek crisis round up – 18 July 2015

GREEK CRISIS ROUND UP 18 JULY 2015

– The main news from yesterday is that the German parliament has given mandate to start talks for the 3rd bailout, the new ESM loan, with a vast majority of 439 in favour vs 119 against. A significant fact is the increase of dissent from within CDU/CSU (Merkel’s centre-right alliance) compared to previous votes on Greece. All other countries that needed approval from parliament or special committees to go ahead have now been given mandate to start talks for the new loan (France, Finland, Austria, Latvia and Netherlands).

– EU countries have finalised details for bridge financing to allow Greece to honour upcoming debt repayments and clear arrears. €7.16bn will be provided by the European Financial Stabilisation Mechanism (EFSM) – the EFSM includes non-euro EU countries, British concerns that their money would be used for Greece have been addressed through a system that gives guarantees to non-euro signatory countries in case Greece fails to repay this loan.

– After the extension of ECB emergency liquidity, Greek banks are set to reopen on Monday, but capital controls (weekly withdrawal limit of €420; bans on foreign transfers) will continue for some time after that, according to various sources. This means the reopening is more cosmetic than anything, the viability of Greek banks remains a serious concern and will for some time.

– Ongoing talks around the 3rd bailout are already marked by a major division among the creditors. IMF director Lagarde has emphasised that Greek debt is not sustainable without major debt relief – implying that the IMF might not participate in the new bailout, to follow its mandate of not lending to countries that are not likely to be solvent. EU countries are counting on €16bn or so from the IMF, a substantial chunk of the €85-86bn package for Greece.

– There are also ‘quieter’ calls from all quarters, from international left-leaning economists to right-wing creditor government technocrats, suggesting that in the end Grexit might be the best option for Greece and for everybody else – perhaps it is just a matter of timing and providing a ‘sweet’ Grexit offer when it becomes clear that Greeks cannot or do not want to bear the burden of the harsh conditions imposed by the new bailout.

– Syriza’s internal crisis continues, with the majority of Syriza’s central committee members opposing the deal (109 out of 201; https://www.jacobinmag.com/2015/07/syriza-debt-tsipras-left-platform-kouvelakis/), it’s clear that the rift is much bigger than the numbers of dissenters in parliament. Last night Tsipras has announced a cabinet (mini)reshuffle, confirming Tsakalotos (who replaces Varoufakis), and replacing Lafazanis, energy minister and vocal opponent of the deal – he was also pushing for a gas pipeline deal with Russia, among other things – with former labour minister Skourletis. Other dissenting deputy ministers were also replaced. These are still early stages anyway, we will have to see in the next days – the next votes in Greek parliament connected to the bailout deal will be an important test. Many are now talking about possible elections in autumn.

– Another interesting development is the rising number of prominent left voices in the UK standing against a EU left solution to austerity and neoliberal policies, some hinting at Brexit in view of the 2017 British referendum on EU membership. In fact Cameron’s dangerous play of showing EU failures while hoping for reforms towards more national sovereignty to win a Yes might backfire, with increasing numbers of Tory eurosceptics seriously considering Brexit. The leader of UNITE, the biggest trade union in Britain, is threatening to campaign for a No vote if Cameron pushes for EU treaty changes that weaken workers’ rights. Events in and around Greece in the following months are certainly set to influence the voting behaviour of the British left. A paradoxical effect of the Greek turmoil might be an unlikely convergence of right and left on Brexit, for rather different reasons of course.