European Politics

The Washington Post runs an editorial on the topic of the financial data privacy controversy that I blogged about a couple of weeks ago. Predictably, it’s an ill-informed harrumph.

THE PROGRAM has been credited with helping to capture the mastermind of the 2002 Bali nightclub bombings that killed more than 200 people, including some 50 Europeans. … Yet almost 400 members of the European Parliament want nothing to do with it and have effectively and indefensibly shut it down. … The tool in question is the Terrorist Finance Tracking Program, which the United States created shortly after the 2001 terrorist attacks in hopes of using financial transactions to trace the whereabouts of suspects. … The European Commission hashed out an interim deal to allow the United States to continue operations, but the European Parliament objected, largely on the basis of bogus privacy concerns. … The Obama administration should work with E.U. leaders to push for reconsideration. If need be, additional oversight should be considered. But the administration must not go too far. Gutting a legal and effective program for the sake of imagined privacy gains would be as unwise and potentially dangerous as having no program at all.

I know that when the WP editorial team sees the words ‘tracking terrorism,’ it responds with precisely that degree of judicious consideration which you apply when the doctor whacks your funny bone with a pointy rubber hammer. But the noxious guff about “bogus privacy concerns” and “imagined privacy gains” is just that – noxious guff. The program that the Washington Post is so fond of was implemented in blatant violation of EU law for years before the NYT had the guts to reveal its existence (despite strong pressure from the Bush administration not to do so). Nor are the European Parliament’s privacy concerns ‘bogus.’ The current administration has consistently refused to provide any guarantees whatsoever about how this data might, or might not, be shared with third countries. Given that many of our soi-disant allies in the war on terror have a distinctly robust attitude to the treatment and detention of possible terrorists, Europeans may very reasonably worry that any data they provide will be used to imprison and torture people, some innocent. I’ve talked about these issues with MEPs a lot over the last several years. Their memories of extraordinary rendition and the use of shared information (between the US and Canada in this instance) in the Maher Arar case left a very bad taste in their mouth. Nor is the US willing to talk about real redress or compensation for people unjustly targeted via this data.

In any event, like it or not, the editorial writers of the Washington Post are going to have to learn to live with a transatlantic relationship where an actor which cares about privacy can veto security arrangements. Abe Newman and I recently wrote a piece on Foreign Policy’s website that talks to this.

To build support for counterterrorism cooperation, the United States must explicitly accept that the European Parliament will play a key role in future negotiations. … The U.S. administration must treat the Parliament as a true negotiating partner, along with the EU member states, on information sharing and domestic security. The U.S. administration can also address the Parliament’s substantive worries by creating its own privacy oversight structures and extending its protection to European citizens…. If the United States wants to rebuild the transatlantic relationship and promote its own security interests, it must stop treating the European Parliament as an irrelevant afterthought.

Oh dear. Half of Greece is now protesting against the EU as the cause of budget cuts, and not, say, their own lying government(s), aversion to tax and an enormous black economy. They could even more logically protest about Goldman Sachs’ role in the affair. But no, it’s all the Germans’ fault.

Invoking the European statesman’s version of Godwin’s Law, Greece’s deputy prime minister Theodoros Pangalos says Germany never paid proper reparations following its occupation of Greece in 1941:

“They took away the Greek gold that was at the Bank of Greece, they took away the Greek money and they never gave it back. This is an issue that has to be faced sometime in the future,” Mr Pangalos told the BBC World Service.

“I don’t say they have to give back the money necessarily but they have at least to say ‘thanks’,” he added.
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Three Google executives have been convicted of violating Italian privacy law because of a children’s bullying video posted briefly by Google in 2006. Although Google took down the offending video of several children in Turin cruelly taunting a mentally disabled boy, and subsequently helped authorities to identify and convict the person who posted the video, three executives were convicted today of violating privacy. A fourth employee who has since left the company had his charges dropped, which seems to indicate that a political point is being made. The executives in question are outraged, and former UK Information Commissioner Richard Thomas is quoted as saying the episode makes a mockery of privacy laws.

For years I’ve observed that Italy always pushes for the most extreme EU version of laws about privacy and security and then domestically gold-plates them into laws that would seem more at home in Turkmenistan. It makes other Europeans scratch their heads as the Italians generally aren’t willing or able to enforce their draconian laws. Several years ago over a pint in Brussels, an exasperated UK official told me ‘the Italians have no intention of ever implementing this stuff, but we’re a common law country and if it’s on the books, we actually have to do it’.

Update: Milton Mueller has an interesting take on the decision and makes the point that the E-Commerce Directive has not aged well in an era of user-generated content.
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Paul Krugman, like others before him, fails to do justice to Martin Feldstein’s perspicacity.

Today, Martin Feldstein suggests that Greece make a temporary return to the drachma, so as to regain cost competitiveness. In terms of the macroeconomics, this actually does make sense. But it’s also impossible; Feldstein needs to read Barry Eichengreen.

What he doesn’t realise is that Feldstein is playing a much deeper game here, and that his fundamental objections to the euro have nothing to do with macroeconomic theory

War within Europe itself would be abhorrent but not impossible. The conflicts over economic policies and interference with national sovereignty could reinforce long-standing animosities based on history, nationality, and religion. Germany’s assertion that it needs to be contained in a larger European political entity is itself a warning. Would such a structure contain Germany, or tempt it to exercise hegemonic leadership?

A critical feature of the EU in general and EMU in particular is that there is no legitimate way for a member to withdraw. This is a marriage made in heaven that must last forever. But if countries discover that the shift to a single currency is hurting their economies and that the new political arrangements also are not to their liking, some of them will want to leave. The majority may not look kindly on secession, either out of economic self-interest or a more general concern about the stability of the entire union. The American experience with the secession of the South may contain some lessons about the danger of a treaty or constitution that has no exits.

Obviously, Feldstein can’t write about this in public; Germans have, after all, been known to read the Financial Times. But perhaps if Greece extricates itself very, very carefully from EMU, and promises (however disingenuously) that it really, really will return to the eurozone just as soon as it can, Angela Merkel will stand down the Panzertruppen she has amassed at the Greek border …

Update: see also Colm McCarthy.

The Economist’s Charlemagne argues that any Greek bailout will have no long term implications for EU integration.

THERE has been a lot of commentary, in the past couple of days, to the effect that Europe is on the brink of a great leap forward in political and economic integration. The theory goes: a bail-out of Greece, accompanied by intrusive monitoring by Eurocrats, would constitute an unprecedented level of EU interference in the fiscal affairs of a member country. … Paul Krugman … finds that logic dictates a swift move towards integration. … I fear I do not agree. Or rather, I think the siren lure of economic logic is blinding a lot of people to the political realities of this crisis. … I have watched the direction of EU travel head firmly away from closer federal integration, and towards a messy sort of intergovernmentalism … I don’t think a Greek default is a big enough crisis to change the political weather in the EU … cannot get that excited about intrusive, monthly monitoring of Greek government spending by officials from the European Commission and European Central Bank, matched by close scrutiny of Greece’s notoriously dodgy statistics by officials from Eurostat. … new territory for the EU … but the International Monetary Fund has been doing this kind of stuff for years. And nobody thinks that when the IMF meddles in the fiscal sovereignty of a country, it means that world government is about to break out …

bailing out Greece is already proving so politically painful for leaders like Mrs Merkel that she would not tolerate any discussion of how such a bailout might take place … a message to voters in rich countries like Germany: do not fear, we are not about to establish a systematic series of transfers to countries in the euro zone … this stuff is toxic politics. … a golden lesson of politics is: political leaders only do really hard and painful things when they absolutely have to. Until then, they would much rather fudge things. … the prospect of a messy, ad-hoc fudge of a bail-out for Greece. … countries … like … Poland … likely to take it rather badly if future convergence flows are diverted away from them, and back to countries that have wasted so much EU cash like Greece … Add to that that newcomers outside the euro zone, like Hungary or Latvia have had to endure horrible austerity programmes in the last two years under IMF supervision, while countries inside the euro zone are to be spared IMF programmes.

But does this really amount to a proper counter-argument? I don’t see any real disagreement here with the basic propositions that (a) EMU isn’t working as it stands, and (b) that the only sustainable equilibrium outcomes here are complete collapse or regearing to allow substantial fiscal transfers (and, insofar as they will do any good, labour market reforms to make increased mobility easier). Saying that politicians will want to muddle through is stating the obvious – but the point is that muddling through is not a sustainable long term strategy. Either the muddling through will be insufficient, in which case EMU will finally succumb to one of the succession of crises that will almost certainly result, or it will be sufficient, in which case it will serve as the basis for a long term shift in the economic governance of the Eurozone towards coordinated fiscal policies and some degree of fiscal transfers in times of crisis, and perhaps more than that. As Adrienne Heritier and I have argued, muddled looking informal deals very often lay the foundations for long term formal institutional changes in the EU.

Finally, the analogy to the IMF doesn’t really work at all. The IMF is not a notably clubby institution, and is particularly unclubby from the perspective of those countries unfortunate enough to need to seek its aid. The EU is quite clubby indeed (Greece will remain on the Council, and in the various eurozone coordination forums), so that whatever the final outcome, it will surely give rise to a lengthy decision making process involving the target countries, those giving aid, and those on the sidelines. This will almost certainly culminate in a set of general institutional mechanisms which applies to all the eurozone countries, including both those countries at risk of default and those which are highly unlikely to get into trouble. That’s the way that the EU works – and this will be a quite significant step towards further integration. Of course – the rescue effort may fail (for example, Germany and Greece’s current spat may reflect irreconcilable political differences) – but if it does fail, so too will the euro project.

Sometimes a thought occurs about something that might make for an interesting blog post, but I realise that whilst I know enough to have the thought, I’d have to do a great deal of research to write something that would survive the scrutiny of people who know their stuff. Still, it may be that commenters who know more than me can say something of value, and that I could at least serve as a prompt. So here goes. An article on the BBC website discusses the recommendations of a French parliamentary committee which described the veil as :

“contrary to the values of the republic” and called on parliament to adopt a formal resolution proclaiming “all of France is saying ‘no’ to the full veil”.

Hmm, I thought. It wasn’t so long ago that “all of France”, at least for some values of “all of France” had a more divided view about the veil. Roughly at this time, in fact:

(Picture nicked from the very excellent Images of France and Algeria blog, which has, incidentally, lots of interesting stuff on the 1961 Paris massacres of Algerians.)

But then I also remembered that official France had not, in fact, been very tolerant of the veiling of Algerian women. The photographer Marc Garanger is famous for his many pictures, taken during the war, of Muslim women forcibly unveiled so that they could be photographed for compulsory ID cards. There are some here . So how did that all work out then? A little googling reveals that this very month, historian Neil MacMaster has a new book entitled Burning the Veil: The Algerian war and the ‘emancipation’ of Muslim women, 1954-62 (Manchester University Press). I couldn’t find any reviews, as yet. The blurb writes about a campaign of forced modernisation followed by a post-revolutionary backlash involving a worsening of the position of women in Algeria.

So two thoughts then: (1) far from being an aberration in France, there was a very recent period when very many French women (or perhaps “French” women) were veiled; (2) attempts by the state to change that didn’t lead to female emancipation and the triumph of Enlightenment values.

Arthur Goldhammer’s excellent blog on French politics and society points to this article on the French pact civil de solidarité – a kind of civil union introduced in 1999/2000, largely as an alternative to gay marriage. But the pacs has had very interesting consequences for straight couples (95% of couples with pacs are straight), as this chart shows.

The growth of the pacs’ popularity over its first decade is striking. There are now two pacs for every three marriages. Interestingly, this is because of both a significant decline in marriage, and a significant increase in the overall number of people willing to engage in some kind of state-sanctioned relationship. While you would obviously need more finely grained data to establish this properly, the obviously intuitive interpretation of this (at least to me) is that the pacs have grown both by providing an option for people who would probably not have gotten married in the first place, and attracted a number of people who otherwise would have gotten married, but who prefer the pacs’ lower level of formality (it is much easier to cancel a pacs relationship than to get divorced). Perhaps this provides grist for the mills of social conservatives (who could claim, stretching the data a bit, that gay-appeasing civil unions are undermining the sacred institution of marriage) – but it would oblige them to face up to the question of whether they should prefer gay marriage to potentially corrosive civil unions that straight couples can take advantage of too. Liberals and leftwingers don’t face nearly the same dilemma, since they can reasonably assume that those who choose civil unions over marriage have good reason for doing so (and perhaps will get married later if they want to; obviously, you can’t tell from data like this how many partners in pacs decide to get married later on).

This NYT article on Germany is a useful book-end to the discussion on diversity of European models etc.

NEUÖTTING, GERMANY — Manuela Maier was branded a bad mother. A Rabenmutter, or raven mother, after the black bird that pushes chicks out of the nest. She was ostracized by other mothers, berated by neighbors and family, and screamed at in a local store.

She felt ostracized after signing up her 9-year-old for lunch and afternoon classess — and then returning to work. “I was told: ‘Why do you have children if you can’t take care of them?’” she said. Her crime? Signing up her 9-year-old son when the local primary school first offered lunch and afternoon classes last autumn — and returning to work. … Ten years into the 21st century, most schools in Germany still end at lunchtime, a tradition that dates back nearly 250 years. … Ten years into the 21st century, most schools in Germany still end at lunchtime, a tradition that dates back nearly 250 years. … For several mothers, their great-grandmothers’ maxim, “Kinder, Küche, Kirche” — children, kitchen, church — holds true, even if, as Mr. Haugeneder says, “increasingly it is a way of life people can’t afford.”

There’s been a fair amount of debate around Jim Manzi’s recent piece on the differences between Europe and the US. I contributed a bit myself in the Bloggingheads with Dan Drezner linked above (with discussion of Iceland, Stephen Cohen and Brad DeLong’s recent book, and other stuff too). In this wrap-up reply to his critics, Manzi maintains that some of the criticisms that have been made by e.g. Paul Krugman are flat out wrong (Paul seems to have misattributed the data series that he was using), while saying that he was not in fact setting out to prove empirically that European style welfare redistribution systems limit innovation and growth (if I understand him correctly, he still believes this to be true, but doesn’t claim that the figures he adduces show it). As he notes, he is actively advocating that the US turn to redistribution – but is also claiming that there are trade-offs involved. I should also note that I’ve met him a few times, and always found him to be a straightforward, decent and, fwiw, mildly Europhilic guy (with whom I disagree, obviously, on multitudes of things). But as per my original Bloggingheads, I am dissatisfied with one of the most basic claims of the argument – that there is a distinct “European model,” followed by all states within Europe, which can readily be distinguished from the American approach. This is a claim that you sometimes see on both left and right – but it is one that I think is very wrong indeed.
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Iceland has a population of about 300,000 , about 140,000 taxpayers and pre-crisis GDP of about $12bn. The Royal Bank of Scotland has about 140,000 employees and pre-crisis net profit of about £8.5bn – they’re about the same size as entities. Iceland, like RBS, did very well out of the debt bubble and picked up assets all over the world in an impressive but ultimately unsustainable spending spree. And in a final point of similarity, Iceland, like RBS, owes the British government a hell of a lot of money as a result of the bursting of the bubble.
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As Clive Davis notes, Charles Murray “is disconcerted by the number of black and brown faces he sees around him” during three days that he recently spent stranded in Paris.

I collected data as I walked along, counting people who looked like native French (which probably added in a few Brits and other Europeans) versus everyone else. I can’t vouch for the representativeness of the sample, but at about eight o’clock last night in the St. Denis area of Paris, it worked out to about 50-50, with the non-native French half consisting, in order of proportion, of African blacks, Middle-Eastern types, and East Asians. And on December 22, I don’t think a lot of them were tourists. Mark Steyn and Christopher Caldwell have already explained this to the rest of the world—Europe as we have known it is about to disappear—but it was still a shock to see how rapid the change has been in just the last half-dozen years.

The term “looked like native French” is an interesting euphemism, given that a quite substantial percentage (and, I suspect, a large majority) of the people whom Murray worried about during his peregrinations were citizens of France. I rather think that the word that Murray was looking for here is “white.” Meanwhile, Clive also links to this very good Foreign Policy article on the whole disgraceful Eurabia genre. Strongly recommended.

Brian Lenihan (Ireland’s finance minister) puts the best face he can on the external limits constraining Ireland’s economic decision making in his budget speech today:

In the recent Lisbon referendum the Irish people reaffirmed our place at the heart of Europe. This was the right decision for our economy, for our future and for our children. The single currency has provided huge protection and support to Ireland in the current crisis. It has prevented speculative attacks on our currency and provided funding to the banking system. But, membership of monetary union also means devaluation is not an option. Therefore the adjustment process must be made by way of reductions in wages, prices, profits and rents.

As a small open economy, Ireland would probably have devalued to help cushion the shock, if it had not been an EMU member with no effective control over its currency. Given EMU membership, devaluation (and exit from the system) would probably have been a very bad idea. Ireland is hoping to make the best of a bad job, adding levies, increasing taxes and making swingeing cuts to public sector pay so as to shore up its fiscal position.

The problem is that all the fiscal rectitude in the world cannot protect you from contagious crises of confidence.

One of the “signals” that could instigate a sudden stop in Ireland is a sudden stop somewhere else, particularly somewhere with regional or trade connections. This is why bad news for Greece is bad news for Ireland. If Greece hits a sudden stop, Ireland will wobble, and will be the next in line for a sudden stop in Europe. There is another simultaneous game being played: the ECB and its bailout policies playing a reputation game against member sovereign governments and their fiscal discipline. Again, the Greek situation is bad for Ireland. … Ireland has done everything (so far) that the ECB could reasonably ask of her to impose fiscal discipline and restore competitiveness. If it were only Ireland at risk of a sudden stop, the ECB could be very accommodating about bailout assistance. The ECB would not let a well-behaved minnow like Ireland cause market turmoil. If a sudden stop was brewing and Irish bond yields rocketed up, the ECB could easily mop up any excess of Irish sovereign bonds, killing the run, and later tell some convenient story about why this did not violate EMU no-bailout guidelines. On the other hand, we now know that the Greek government has deliberately and substantially falsified its national accounts over recent years. … no political will to impose any meaningful discipline on tax and spending … adherence to the Growth and Stability Pact is a charade. If the ECB bails out Greece, all semblance of future fiscal discipline throughout the Euro zone is lost. … How can the ECB bail out Ireland if it refuses to bail out Greece?

Greek government bonds tumbled today. It may very possibly be that Ireland is in the worst of both worlds – suffering the unmitigated agonies of fiscal rectitude imposed by the EMU’s straitjacket, but with at best highly uncertain prospects of support in the event of a new crisis of confidence. Brian Lenihan won’t be sleeping well the next couple of weeks.

I hadn’t been following the story of Switzerland’s efforts to ban the construction of minarets. Switzerland has about 400,000 muslims and — though there are many mosques — precisely four minarets. The referendum succeeded by a comfortable majority. As you can see from the poster, the rights of women under Islam were pointed to as a reason to support the ban. The Guardian reports that the pro-ban SPP

said that going to the European court would breach the popular sovereignty that underpins the Swiss democratic model and tradition … It dismissed the arguments about freedom or religion, asserting that minarets were not a religious but a political symbol, and the thin end of a wedge that would bring sharia law to the country, with forced marriages, “honour” killings, female genital mutilation and oppression of women … The prohibition also found substantial support on the left and among secularists worried about the status of women in Islamic cultures. Prominent feminists attacked minarets as male power symbols, deplored the oppression of Muslim women, and urged a vote for the ban.

The Times reports that there’s some evidence that more women were in favor of the ban than men, too. One can only suppose that, having waited until 1971 to give women the vote in Federal elections, and in some parts of the country until 1990 in Cantonal elections, the Swiss are now making up for lost time making good on their commitment to feminism.

So as Ingrid notes, EU member states have chosen Von Rompuy as the new President of the European Council. To use the terms that Euro-politicians have themselves been using (which were nicked, presumably by Brian Cowen, from the title of a political science text on Irish Taoisigh), they have decided to go for a chairman – someone with a low international profile who is good at conciliating warring factions – rather than a chief. I have no doubt that Von Rompuy will do very good work, but he surely will not be a colossus bestriding the world stage, banging the heads of Sarkozy, Merkel and Brown together to force them to agree common European policy and so on. This means, I think, that the interesting stuff will be happening at the level of the foreign policy representative, Baroness Ashton. This too is unlikely to be a high profile post in the short term – but unlike Von Rompuy, Ashton will have a very substantial set of bureaucratic resources to draw upon, with links both to the Council and Commission, as well as her own European External Action Service, which will have an independent budget line. This could add up to something pretty interesting in a few years time. (Update: via Matt Y. Annie Lowrey makes more or less the same point).

Turning to real European politics, the crisis continues but looks set to come to no good outcome. FIFA shows no interest in scheduling a rematch, despite Thierry Henry’s statement that a rematch would be the fairest option. Those involved seem determined to do a reductio ad absurdum on Richard Posner’s arguments about responsibility. French footballers (and – judging from Trappatoni’s discreet circumlocutions – perhaps Irish footballers too) clearly feel that it is their obligation to push the rules as far as they can go and further – and if the referee doesn’t spot the odd match-and-qualifying-round-determining handball here or there; well, the culprit has no obligation to seek anything but his own advantage, and anyway, it all balances out in the end, doesn’t it? Incompetent regulators shrug their shoulders and refuse to take any responsibility for the mess. And Irish and French politicians deplore the outcome – but declare themselves powerless to do anything about it. Whether this spells out a possible case for world government to prevent such atrocities occurring in the future, I leave to the theorists. However, I don’t think anyone can deny that the end result is manifestly contrary to even the most minimal principles of justice, fairness and efficiency, completely exploding Posner’s arguments in the eyes of all fairminded individuals.