Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search

 

Gordon Campbell on the Greek election, and EU turmoil

Gordon Campbell on the election in Greece, and EU turmoil

The election in Greece on Sunday – and the likely triumph of the left wing Syriza Party – will be only the first of three hammer blows this year to the European Union and its politics of austerity. Spain too will be holding a general election later this year ( in December) and the new left wing movement Podemos has already swept to the top of the polls on an anti-austerity platform similar to the one that the Greeks seem about to embrace. In Britain too, the May general election is likely to leave the Conservatives clinging to power in a coalition with UKIP, Britain’s right wing anti-EU party – although in UKIP’s case, its hostility to the EU is based on the EU’s immigration policy, not its economic policy. In sum, 2015 looks like sounding the death knell to the European Union as we currently know it.

If so, the Germans will have only themselves to blame. The self serving austerity measures in Europe dreamed up by Germany’s central bankers were bad social policy – in that the bailout terms systematically punished the most vulnerable members of society in Greece, Spain and elsewhere for the “ sins’ of those who had benefitted the most from Germany’s trade policies. It was also bad economic policy as well. If we have learned anything from the GFC, it is that recovery is not achieved via austerity, but by the policies of expansion that have been pursued in the United States and Britain. In the US and UK, their current economic recoveries have been on the back of quantitative easing and credit created by activist governments. The age of timid central bankers and governments fearful of market intervention obsessed with inflation and intent on budget-balancing is over, or should be.

On that point, Bloomberg News published an interesting overview last week:

…. The U.S., with the most activist central bank and after more than five years of quantitative easing and a zero interest rate policy, has the best looking economy in the developed world. Europe, where Germanic austerity and central-bank timidity prevails, looks the worst. Japan is somewhere in the middle, both in terms of its economic recovery and QE.

Preliminary results of these grand monetary experiments are now in and the results are clear: more monetary stimulus equals a stronger economic recovery.

(Yet as you may recall a few years ago, when the Greens suggested a form of QE here as a response to the GFC fallout, this was taken as evidence of those wacky Greens, and their desire to print money! In the end, New Zealand retained the zombie rhetoric of belt-tightening and austerity, but surfed off the back of the stimulus programmes that were being enacted in China and Australia. Not for the first or last time, Finance Minister Bill English was merely the conduit for decisions made offshore. )

The political re-alignments now playing out across Europe in the wake of the failed EU austerity programmes are significant. In Greece and Spain, political life has been dominated for decades by a relatively stable two party system whereby the mainstream parties of the centre-right and the centre-left have regularly swapped the reins of government. The GFC and the rash of punitive bailouts have now destroyed that cozy consensus – and in 2012 in Greece it took a grand coalition of these former enemies to keep Syriza at bay. That won’t work again this year. Regardless, the traditional centre-right and centre-left parties in Spain have also been talking of forming a united front against the rise and rise of Podemos. This ‘grand coalition’ trend has been evident right across Europe:

As populists gain electoral support, traditional center-left or center-right governments have lost their majorities. These parties, which have historically alternated in government, and have long seen each other as ideological rivals, have had to join forces to remain in power. Formal coalitions between the two biggest parties now rule in Germany, Austria, the Netherlands, Finland, and Ireland, among other countries. Some form of grand centrist bargain also props up the reforms pursued by Matteo Renzi, in Italy; assures the current majority in the European Parliament; and helped persuade the Scots to vote against independence.

If it wins on Sunday, Syriza is already promising to re-negotiate Greece’s bailout package and its debt repayment obligations. As it does so, Syriza has already made an unlikely new friend. Yesterday, the far right French politician Marine Le Pen and her National Front announced her support for Syriza, presumably on the grounds that her own anti-EU cause will be furthered by whatever damage Syriza can inflict on the EU as it follows through on its election promises.

In the short term, the reef fish in the global share-markets will be panicked by Syriza’s success. They shouldn’t be. The political backlash across Europe against the unjust and unworkable EU austerity programmes has been inevitable, and has been coming for years. What’s unpredictable is what happens when the plug is finally pulled on the EU common currency.

The Panic, The Panic

Poverty, injustice and sharemarket upheavals. Doggone, I mean the panic is on :


© Scoop Media

 
 
 
Top Scoops Headlines

 


Julian Assange: A Thousand Days In Belmarsh
Julian Assange has now been in the maximum-security facilities of Belmarsh prison for over 1,000 days. On the occasion of his 1,000th day of imprisonment, campaigners, supporters and kindred spirits gathered to show their support, indignation and solidarity at this political detention most foul... More>>

Binoy Kampmark: The Mauling Of Novak Djokovic
Rarely can the treatment of a grand sporting figure by officialdom have caused such consternation. Novak Djokovic, the tennis World Number One, has always had a tendency to get under skin and constitution, creating a large following of admirers and detractors. But his current treatment by Australian authorities, and his subsequent detention as an unlawful arrival despite being granted a visa to participate in the Australian Open, had the hallmarks of oppression and incompetent vulgarity... More>>

Binoy Kampmark: Voices Of Concern: Aussies For Assange’s Return

With Julian Assange now fighting the next stage of efforts to extradite him to the United States to face 18 charges, 17 of which are based on the brutal, archaic Espionage Act, some Australian politicians have found their voice. It might be said that a few have even found their conscience... More>>



Forbidden Parties: Boris Johnson’s Law On Illegal Covid Gatherings

It was meant to be time to reflect. The eager arms of a new pandemic were enfolding a society with asphyxiating, lethal effect. Public health authorities advocated various measures: social distancing, limited contact between family and friends, limited mobility. No grand booze-ups. No large parties. No bonking, except within dispensations of intimacy and various “bubble” arrangements. Certainly, no orgies... More>>

Dunne Speaks: Question Time Is Anything But
The focus placed on the first couple of Question Time exchanges between the new leader of the National Party and the Prime Minister will have seemed excessive to many but the most seasoned Parliamentary observers. Most people, especially those outside the Wellington beltway, imagine Question Time is exactly what it sounds... More>>



Gasbagging In Glasgow: COP26 And Phasing Down Coal

Words can provide sharp traps, fettering language and caging definitions. They can also speak to freedom of action and permissiveness. At COP26, that permissiveness was all the more present in the haggling ahead of what would become the Glasgow Climate Pact... More>>