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Eurozone politics: Black, no sugar

 The European Council for Foreign Relations stages a Black Coffee Morning event on European Politics after the EU Summit. I have mine white, but from the general tone of the discussion among thinktankers, politicians and journos the prospects for the Eurozone and the EU could be as dark as the stiffest Italian expresso. Some contributors thought it might not survive a year

Discussion centres entirely on the one large existing member whose stubborn pursuit of its national interest is obstructing a long-term viable EU: Germany. France admittedly got a lot of what it wanted out of the summit, retaining the basically intergovernmental approach, but conceded the German demand for a reformed treaty of austerity-inducing financial discipline.

Germany and German politics are overwhelming what matter and, in some ways summit and the drama of the British veto-that-might-not-be-a-veto are sideshow compared with how Europe’s biggest and most economic powerful member decides to play it.

Photo: Tage Olsin

Was Angela Merkel playing a kind of high stakes poker waiting for the right moment to fold ‘em and concede some form of Eurobonds? Or was her government determined to press ahead to a possibly very bitter end?  German public debate and perceptions across political spectrum are, unsurprisingly, very different from those in many other places in Europe with little appetite for a Berlin bankrolled Euro bailout after painful and divisive economic restructuring (and the earlier costs of re-unification).

Indeed, some in Germany are apparently toying with the idea of partial break-up of Euro producing perhaps a sharp two-year recession followed by prosperous German-centred ‘small Euro’, which could ‘go global’ playing to Germany’s industrial and export strength. Unlikely, said some: anchoring in EU part of the political DNA of the FRG.  Be careful countered others:  re-united Germany was different country where old assumptions about how things work are  no longer always safe.

 The vision of Treaty-bound austerity Union in which a French-German tandem  (with the Germany as the senior partner) – European institutions have lost power and influence in the current crisis and may not regain it –  would run up against the interests of states normally closely economically and politically aligned with Germany in the EU such as Netherlands, Finland, Denmark, Poland and other CEE states (I have the phrase greater ‘Greater Germany’ scribbled down in my notebook – did somebody actually say that?). But none bar Poland  – in the remarkable speech by Foreign Minister Sikorski  – have actually raised these issues openly.

Seems in some ways as if history has run full circle and we back once again discussing the idea of a form of Mitteleuropa, albeit in the context of the more balanced and more democratic structures of the EU (or whatever it turn into)

And those pesky Brits? Well, those British demands were perhaps rather modest – maybe we should give Nick Clegg some credit (did I really just write that?) and in some ways leaning to  greater not less regulation.  The consensus view at the ECFR BCM seemed to be –  diplomatic and strategy of the UK were just a disaster, although the underlying issue of who (EU or UK)  regulates was perhaps the key issue was possibly less easily negotiable

Cameron (rather like Sarkozy) comes out a big short-term winner in domestic politics, but at the more strategic levels the Brits are left needing to improvise ‘creative diplomacy’ to prevent emergence of too starkly Two Speed Europe – perhaps pushing for varied integration, really going against the grain of European politics for more political integration. Underlying British problem is that it wants viable Euro to avoid economic meltdown, but fears the decline in own influence that integration necessary for this will bring.

Perhaps, however, if the politics of Euro rescue were to prove Mission Impossible, integration would painfully rebound, as someone put it, like piece of stretched elastics reverting to something closer to UK vision and/or status quo.

And there was distinct pessimism – reflecting in the dank rainy day visible taking shape outside – as to whether the politics could overcome economic diversity across EU with no underlying European identity or solidarity legitimising redistribution.

We are, it seems, caught in a vicious circle/cycle of technocracy and populism:  populist mood of public anger with elites, politicians and distant, illegitimate looking European institutions leads these elites to, as ever, look for quiet, backdoor technocratic workarounds feeding waves of inchoate (and ultimately unfocused and possibly inconsequential) anti-elite politics.

The weather  outside was dark, dank cold with storm brewing up for later.

European integration: A view from 1943

The internet has pretty much done for the traditional second-hand bookshop. I used to know of a least a dozen within half an hour’s walk in Brighton. Now I can only think of a couple. And besides, these days I don’t have the time or need to go browsing for second hand books. A cheap copy of anything is source-able through Amazon, Abebooks and the like.

This is a pity in some ways. It’s killed off the art of stumbling on a chance, obscure book that offers a sudden fresh, potentially paradigm-shifting perspective. After all, didn’t Philippe Schmitter come up with the idea of democratic (neo-) corporatism after a chance second-hand find in aBrazilian livraria ?

Despite this, I did stumble on something like this amid the celebrity biogs and crime thrillers on the book shelves of our local Oxfam shop: The Unity of Europe  (Victor Gollancz, London 1943) by Hilda Monte, a thin hardback book of just under two hundred pages printed on yellowing wartime paper, published as part of the 1936-48 Left Book Club series, which served as a popularising outlet for socialist and communist ideas.  The book says Not For Resale To The Public – presumably you had to subscribe to the LBC – but I bought it for £1.

Hilda Monte

Hilde Meisel (Hilda Monte)

 The book’s author Hilda Monte was, in fact,  Hilda Meisel, a socialist/Marxist journalist and economist of a slightly  unorthodox kind (never a CP member either in Germany or Great Britain, it seems)  of a Austro-German Jewish background who came to Britain in 1929 and remained after the Nazi takeover and into the war. Her book is one a broad genre of the period by writers of various political persuasion anticipating the political and social shaper of post-war Germany and post-war Germany. Part of this mix – awhich we we we are still grappling 60 years with this – is this issue of co-operation,  federation, integration of now, small and declining European states, whose political and economic power had peaked.

Proposals for a more federated and united Europe were, of course,  two a penny in 1930s and 1940s. Fascists, liberals, agrarians, socialists and communists all seem to have pretty much agreed that the interwar European system of multiple sovereign national states was a resounding failure. But Meisal’s argument is that as (more or less), a single economic unit, Europe needs be integrated as a whole (including Germany), rather than in the more widely floated form of two-three state federations with purely geopolitical rationales. She also rejects idea of initially integrating industrialised developed West European states – the form that integration, in fact, took after 1956 following the convenient amputation of the East by the Cold War division of the continent. The form of integration she proposes is, naturally, of the left.

Although aware of the need for decentalisation where possible (subsidarity, we might now call it), the socialist ‘‘European Union’ she envisages will be based around a European Central Authority to include both representatives of national government and the functional representation of interest groups – a prophetically Schmitterian touch – which will control post-war reconstruction, trade and immigration policies (140-1). Institutionally, she sees that a ‘… European Central Reserve Bank will need to be established, and either one single currency introduced across the Union, or a fixed relationship between currencies established’ (p.141).

Reasonably enough, given that this is 1943, she does not elaborate on just how these post-war institutions will come about or what they will look like – although the Tennessee Valley Authority of the Roosevelt New Deal is mentioned and, in general, the economic prosperity generated by Europe integration is expected to trump popular attachment to national states (at least in Eastern Europe). In outline, a kind of Marxist Monnet Method.

The book also has topical echoes in its preoccupation with inequalities and unevenness of European development. She sees the European

Inner and Outer Europe

Source: The Unity of Europe, p.40

(and indeed global) economy in terms of fairly modern terms core and periphery (‘Inner Europe’ and ‘Outer Europe’ as she puts it). However, the under-development and unevenness that preoccupies her is that between rural underdeveloped economies of Eastern and Southern Europe, on one hand, and industrial and/or modern economies of Scandinavia and Western Europe, on the other. She is thus very much focused on agrarian modernisation and peasant politics and strategies for industrialisation of the Balkans and East Europe.

Come the 21st century, such an East-West split is still with us, although it is no matter a question of industrial core versus agrarian periphery. Communism in Eastern Europe – not surprisingly, only distantly and vaguely anticipated an author writing at a time when German troops were in Stalingrad – brutally industrialised and agriculturally modernised the region, leaving its own distinct legacy of backwardness.

The Cold War division of Europe is only unanticipated: possible Soviet influence in Eastern Europe is seen as a benign complement to the socialism she hopes and believes and will develop at the heart of the continent. This is founded on a rosy, not to say naïve view of the economic and political system of Soviet Union, characteristic of much of the British Left in 1930s and 40s, as George Orwell lamented  at the time.

‘[W]ho knows’, the author asks ‘if , with fewer goods to buy and rather inadequate housing conditions, the workers and peasants of the Soviet Union have not been better off because they had not be afraid of idleness or lack of markets’ before claiming still more implausibly, as we now know with half a century’s hindsight that the USSR had ‘… devised methods of directing and controlling economic life without depriving the individual of every chance of making economic decisions’ (122, 137).

The author’s analysis of the prospects for post-war Europe has a similar dose ideological wishful thinking: ‘socialism’ – vaguely defined in terms of economic planned, collective ownership and workers’ control – is the only solution. Nothing else will do and a renewal or rebuilding under Capitalism Brought Up To Date is unimaginable. Proposals for what sound like a form of democratic social market corporatism or ‘co-determination’ – from of all quarters, the Federation of British Industry (the main employers’ organisation, forerunner of today’s CBI – are roundly rejected. A mistake, you feel in hindsight, given how easily the post-war settlement was dismantled in 1980s without formal corporatist institutions in this country.

Commemorative stone, Landhausstrasse 3, Berlin

Sadly, Hilde Meisal did not live to see the end of the war to do a second take on the subject. As interested in active resistance than writing and theorising – unconfirmed rumours say she was involved in a 1939 plot to assassinate Hitler – she became in clandestine operations of the US OSS (the precursor of the CIA) to infiltrate intelligence operatives into Germany and was shot by an SS patrol on the Swiss-German border 18 April 1945. She is best remembered as (in Germany) as a resister, leaving behind fragmentary  journalism and pamphleeting in German and English as well as two-three books for a popular audience of which The Unity of Europe is the most substantive.

If she had survived and lived a long life, she would be 97 .

You wonder what she would make of today’s Europe, the EU and its current crisis.

>German and Israel Greys hit by scandal and splits

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Germany’s long-established, but consistently marginal, pensioners’ party Die Grauen have been hit by financial scandal, reports reports Kölnische Rundschau (10 October 2007) in a reference very kindly sent by Michael Koss. Four party leaders as well as the Greys’ charismatic founder and leader, 82 year old Trude Unruh are implicated in a scandal involving the faking of receipts for donations and (as I think) and holding of undeclared party meeting in the guise of educational seminars. 60 Officals from the regional public prosecutors office and tax authorities raided and searched 22 business premises associated with the party and foundations and associations linked to it in six cities in North Rhine Westphalen. Germany’s party financing regime offers reasonably generous funding for minor parties able to pull in at least 1 per cent (I think) of the national poll in federal elections – which Die Grauen have generally managed – and in 2006 the party received 1.3 million euros in Federal subsidies. Party spokesmen denied tax evasion or fraud, claiming the accusations were driven by personal resentments of members passed over (I think) in elections.

Trude Unruh, briefly a Bundestag MP between 1987 and 1990 as an independent co-opted on the Green list, made her name through fiery parliamentary speeches advocating old people’s interests, founded Grey Panthers movement as an advocacy group for older people in her home city of Wuppterpal in 1975.

As Flickr photographer rrho notes, the Greys have recently toned down the militant rhetoric of social protest, emphasing instead with a strong undercurent of populism that they are ‘young’ (at heart) and ‘neutral’, bringing some success in regional elections in Berlin last year, another of the party’s strongholds (relatively speaking), where they entered the city council.

Meanwhile, Israel News International reports Israel’s pensioners party, Gil, one of only two ‘grey’ parties actually in government (the other is in Slovenia) has also been hit by splits and scandal. Eralier this week Gil seemed to be acting as a classic small interest party exercising its ‘blackmail potential’ bythreatening to leave the Kadima-Labour-Shas coalition, unless it agreed to stump up for increased pensions. Cynics would see this an attempt to raise the party’s visibility after a slide in the polls, apparent However, Gil has lost support in recent polls because of its backtracking on several campaign promises and internal scandals (yes, here too!) concerning an alleged sexual assault on a party activist by a Gil deputy, financial impropriety (adding an unauthorised signatory with the power to draw on party accounts) and violations of campaign contribution laws.

In the Israeli context, in addition to an ageing population and a growing number of retirees, pension issues are further complicated by the fact that 11% of the country’s 729,577 pensioners (as of August 2007) receive only a basic pensioner entitlement stemming from the fact of having immigrated to Israel when already past official retirement age (61 years four months for women and 66 years four months for men). Pensioner poverty is also high with 26% of pensioners or their spouses receiving supplementary benefits from the state. The leader of the Gil parliamentary group, Moshe Sharoni, also made its continuation in the coalition condition that no proposals for the division were agreed by the government.

However, Ha’aretz and Jersualem Post later reported, Sharoni’s line now seems to have been more of a personal initiative, which antagonised other Gil deputies who voted 4-3 to remove him from his post, raising the likelihood that Israeli’s Greys – true to the country’s traditions of fissiparous minor party politics – will split. His critics objected to him breaching coalition agreements by unsuccessfully trying to push through a bill hiking pensions by a massive 20% (from 16% to 20% of average salary – not too high in relative terms) usuing his post as Chair of the Knesset Labour and Welfare Committee. His recent statements about female party employees and the Israel courts have also beeen considered embarassing.

Top photo: rrho