European Politics

So I’ve been thinking that I ought to do more posts on stuff that is happening in Italy, Germany and France but that isn’t being covered well in the English language newspapers. Such as, for example, this story about how Italy’s minister of defence, Ignazio La Russa, has gotten into trouble for saying some offensive things about the United Nations, and the UNHCR representative in Italy (who has been critical of the Berlusconi government’s nastiness to aliens). But I’m being distracted from this high minded mission by La Russa’s quite extraordinary resemblance to a left-over special effect from classic Rodenberry-era Star Trek. It’s juvenile of me, but there you go. I’m figuring him for a Romulan-Klingon hybrid, but I’m not really a Star Trek buff (haven’t seen the show in two decades or so), so am prepared to bow to superior wisdom should such exist out there on the Interwebs …

So, because I was in Europe last week, I didn’t post to my bloggingheads with Dan Drezner, talking about the joys (and limitations) of the European (for which read Dutch – EU member states differ dramatically in their provision of social services) welfare state. This was all riffing on a piece in the NYT which talks about the kinds of stuff that insurance covers in the Netherlands.

insurance covered prenatal care, the birth of their children and after-care, which began with seven days of five-hours-per-day home assistance. “That means someone comes and does your laundry, vacuums and teaches you how to care for a newborn,” Julie said.

I thought that this sounded great myself, having gone through the ‘oh my god, they’ve sent us home with a baby and what the hell are we supposed to do now’ panic with our firstborn. Dan, not so much. Matt Yglesias and Matthew Continetti discussed the same article a few days later. Diavlogs below …

I was at a conference in Italy last week, where I read as much as I can about last Saturday’s meeting, brokered by Giorgio Napolitano, Italy’s President, between the widows of Giuseppe Pinelli (who, after three days of interrogation without food or sleep, either fell to his death from a window in the Milan magistracy or was pushed) and Luigi Calabresi (the magistrate who was interrogating Pinelli, and who was himself murdered a couple of years later). This hasn’t gotten any attention in the English speaking press that I can see. Still, it was a very significant event in Italian politics – an attempt by some of the parties at least to draw a close to Italy’s ‘years of lead,’ in which leftist unrest, kidnappings and murders went together with brutal state repression and tacit state help for fascists who organized large scale terrorist bombings to create the enabling conditions for a coup.¹ And it is particularly interesting to me because I’ve just finished reading Phil Edwards’s fascinating account of one very poorly understood aspect of this period – the birth of the Autonomist left, and its relationship both with terrorist groups (my term, not Phil’s) and the Italian Communist Party. This is, to say the least, a very well timed publication (although Manchester University Press’s decision to print it only in an expensive and difficult-to-find hardback edition, is arguably rather less well judged). [click to continue…]

This seems pretty plausible to me.

The opening hours of EU summits can often be a little slow (so can the closing and middle hours of some of them, to be frank). But the sense of calm, even drift, is a little eerie this time. … behind this time of phony war there lurks the prospect of a proper policy fight. Not about stimulus plans, but about future regulation of the financial sector. And, to simplify things, what is really, really going on is that the camp led by France and Germany are determined that Europe’s common position, going into the G20 summit, should be to bang the table and demand an end to light-touch regulation, of the sort that flourished for so long on Wall Street and in the City of London, and which they see as more or less the sole cause of the current mess. But the French and Germans do not trust the British to support that common position. Once the Americans are in the room in London, they fear the British will scuttle away from the European position, side with the Americans, and seek to defend the wheeler-dealers of the City.

The post finishes with some obligatory Economist-style harrumphs about how the unregulated bits of global capitalism aren’t really the problem &c &c, but its analysis of the underlying politics seems spot on. Differences between national regulatory systems are still enormously important, and help explain why we have seen so little international coordination on common frameworks for financial regulation. Not only are differences in regulation associated with different national interests, but also with very different analyses of what the underlying problem is (which of course in part stem from those interests). Abe Newman at Georgetown and I have a paper on historical institutionalism in international relations that talks a lot about the persistence and importance of these national level differences in explaining international outcomes. Our framework (as others, such as Dan Drezner’s) would predict likely stalemate in negotiations of this sort. I honestly hope that we’re wrong (although I suspect that we are not). But even if we are, the problems that the EU faces in coordinating a regulatory response are, of course, dwarfed by the problems of coordinating such a response at the global level, which is where it really needs to take place (but is highly unlikely to, for the reasons given).

Two recent versions of the same argument. First, the simplified 800 word version, from Roger Cohen.

To paraphrase Mauriac, I love France, but I don’t want there to be two of them, least of all if one is in the United States. … I think President Obama’s counter-revolution goes in the right direction. … Still, the $3.6 trillion Obama budget made me a little queasy. There is a touch of France in its “étatisme” — the state as all-embracing solution rather than problem — and there’s more than a touch of France in the bash-the-rich righteousness with which the new president cast his plans as “a threat to the status quo in Washington.” … You know possibility when you breathe it. For an immigrant, it lies in the ease of American identity and the boundlessness of American horizons after the narrower confines of European nationhood and the stifling attentions of the European nanny state, which has often made it more attractive not to work than to work. High French unemployment was never much of a mystery. Americans, at least in their imaginations, have always lived at the new frontier; French frontiers have not shifted much in centuries. Churn is the American way. … If America loses sight of these truths, it will cease to be itself.

Gideon Rachman links to the Economist’s new ‘Charlemagne’ EU affairs blog which is indeed quite good. Even if you don’t agree with its take, it’s funny, well written and states its prejudices quite clearly up front. It’s also written by only one person, so that the “Free Exchange” problem of individuals pursuing personal gripes under cover of anonymity doesn’t arise. But one of the reasons why Gideon says he likes the blog is that it

shares my low opinion of the European Parliament. Describing it as a “student union with better expenses” is about right

I liked this piece of writing from Arthur Goldhammer’s consistently excellent blog on French politics.

It’s always interesting to watch the fissures develop in the Socialist Party. It’s almost a geological process. Each aspirant is a tectonic plate moved by the immense pressure of his or her ambitions. For a time a couple of these plates may move in tandem, but then an opposing force impinges from some odd angle, subduction occurs, and one begins to witness surface changes: a ridge or wrinkle developing here, a fissure there.

No sooner did Martine Aubry open the party leadership to a dozen or so Royalistes than we witness[ed] the emergence of a first fissure …

While we’re waiting for Jonah to pronounce, Sheri Berman, whose arguments about 1930s social democrats and fascists is the issue of debate, has a piece in Dissent that I’d like to respond to. Sheri argues that the current crisis is a major opportunity for the left, but that it is hampered in its ability to respond because of internecine arguments over whether we should try to reform capitalism, or get rid of it altogether. She singles out Michael Harrington as her main exemplar of a leftist whose failure to appreciate the benefits of capitalism led him to irrelevance and political near-incoherence.
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A few years ago, I wrote that

Nearly every corridor in every building of the Commission, Council and Parliament has two or three examples [of EU official art] along its walls – spectacularly bland and uninteresting prints and photographs, always with the twelve stars on a blue flag in there somewhere. The art is contentless and affectless because any strong statement, or even conveyed sense of geographic location, would probably offend somebody in one or another of the member states. There’s something about the EU that seems completely inimical to lively cultural expression.

Now a Czech art-prankster has put this theory to its test, and found that member states are indeed liable to get offended.

Sited prominently in the headquarters of the EU Council in Brussels, a flagship work of art – which was designed to demolish national stereotypes by mocking them – has caused diplomatic outrage. Not only that, the piece turns out to be the work of a single Czech artist despite having been billed as the collaborative effort of all 27 member states. … As countries digested depictions of their character, such as a Dracula-inspired theme park (Romania), a rudimentary lavatory (Bulgaria) and a flooded land with minarets poking through (the Netherlands), the Czech presidency was forced into a public apology. … Other national depictions in the artwork include: Luxembourg as a lump of gold on sale to the highest bidder; France emblazoned with the word grève , or strike; Denmark made of Lego; and Sweden lying within an Ikea flatpack. Britain is simply missing – supposedly a reference to its euro-scepticism. But some diplomats appear in little doubt of what action they would like to see, namely the removal of the eight-tonne “modern art installation” from the bleak and lofty but all-too prominent atrium of the council’s main building.

In fairness, the artist seems to have gone out of his way to prod national sore spots – other depictions include Germany (autobahns making up a rather thinly disguised swastika) and Poland (a group of monks erecting the Rainbow flag). Pictures below.

Ever since the last elections in Belgium, in June 2007, there have been events and background conditions, which have led to a political crisis. We’ve discussed that ongoing crisis here at CT at length (one two three four five six). So it is super-ironic that the Belgian government fell last Friday, not because of the communautarian tensions, but because of a chain of events that is linked to the global financial crisis.
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The Financial Times published an article based on an interview with Jean-Claude Trichet today (the article itself seems to be borked, along with the rest of the FT’s website, but the interview itself, which is more informative in any event, is available here ). In the interview, Trichet suggests that large scale deficit spending is a bad idea because of ‘Ricardian effects.’

Consider the Ricardian effects, the level of confidence or the lack of confidence that you observe in the various constituencies of economic agents, particularly at the level of households: they suggest that there are certain situations where if you do not behave properly you might lose more in terms of confidence than what you are supposed to gain through the additional spending.

and

Every nation has its own Ricardian effects and its own assessment of the situation. I do not want to comment on any particular country, because my duty is to look at the continent of 320 million fellow citizens as a whole. But I fully accept that there are differences in the capacity of households in various cultures to accept a deterioration of their situation, and again, the Ricardian channel tells us that one might lose more by loss of confidence than one might gain by additional spending.

Is this plausible? The broad political economy literature on consumer behaviour that I’m aware of would suggest that this argument rests on some fairly heroic assumptions about individual information (and in particular their awareness of the possible long term consequences of government spending – and this leaves aside the claim that for some reason they will systematically overestimate the consequences tomorrow of deficit spending today). As best as I’ve been able to tell from a quick glance at the WWW, the claim that Trichet is making is a controversial one, which lacks solid empirical support. But then, my understanding of macro theory is based on fast-disappearing memories of my BA coursework. So is there any solid empirical basis for the claim that strong Ricardian effects exist and are a real issue for policy makers? Or is this just a theoretical figleaf to cover over the less abstract political-economic reasons (to do with institutional prerogatives, inter-state relations, worries about defection etc) why the European Central Bank really wants to keep controls on national spending? This is not a rhetorical question – I honestly don’t know the answer, and would appreciate information from those who know this literature better than I do.

Gideon Rachman says what I’ve been thinking.

In fact, I would even argue that the G8 was quite well-placed to see off the upstart G20 - were it not for one thing. Next year it will be presided over by that one-man wrecking crew, Silvio Berlusconi, the prime minister of Italy. Berlusconi has a “sense of humour” that makes him a uniquely disastrous chair for international organisations. His presidency of the European Union in 2003 was catastrophic. He caused uproar in the European Parliament by comparing a German politician to a Nazi concentration-camp guard. In an official photo, he made the sign of the cuckold’s horns behind the head of a Spanish minister. He opened a summit designed to discuss the future of Europe by suggesting to his fellow leaders that they discuss women and football instead. Then he turned to the chancellor of Germany, Gerhard Schroeder, and suggested that he should open the discussion since he had been married four times. Amazingly enough, Schroeder did not see the funny side.

Not that any of this is likely to hurt his domestic approval ratings or anything (the public persona he has constructed for himself is quite extraordinary), but it certainly should be interesting to watch from a safe distance.

Arthur Goldhammer (whose blog on French politics is one of the treasures of the blogosphere).

Sarkozy has announced the creation of a French investment fund with a capital of $200 billion. He is also temporarily suspending the taxe professionnelle. Call it an investment fund or sovereign wealth fund. Call Sarkozy a socialist in wolf’s clothing (as one MEP did the other day). Mock his inconsistency or praise his political versatility. In fact he’s merely doing what leaders of all the advanced industrial countries will be doing shortly, if they are not doing it already: trying to minimize the damage of the recession by turning on massive government investment. This can do a lot of good, especially if it is seen not solely as countercyclical spending but as a chance to do something about decaying infrastructure and make foundational changes with a chance for long-term impact. In France it’s hardly unprecedented for major capital spending to be directed by the state, whether under the Commissariat au Plan, through state-controlled-or-influenced enterprises, or directly by the Ministry of Finance. Sarkozy always danced nimbly between the neoliberal and state-capitalist camps. If the last two decades were the neoliberal decades, the coming two are likely to consecrate the hegemony of state capitalism. Sarkozy has been quicker than most to draw that conclusion and try to get ahead of the tsunami. Let’s see what happens next.

When I suggested a couple of weeks ago that the intellectual hegemony of free market capitalism was under threat, Dan Drezner expressed polite skepticism.

Is this the beginning of a norm shift in the global economy? It’s tempting to say yes, but I have my doubts. The last time the United States intervened on this scale in its own financial sector was the S&L bailout — and despite that intervention, financial globalization took off. The last time we’ve seen coordinated global interventions like this was the Asian financial crisis of a decade ago — and that intervention reinforced rather than retarded the privilege of private actors in the marketplace. In other words, massive interventions can take place without undercutting the ideological consensus that private actors should control the commanding heights of the economy.