European Politics

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.

In July I couldn’t blog about a major episode in the Belgian political crisis – I was on holidays in the Walloon area of Belgium, in a cottage without electricity, and without access to the web. Today there is another sequel in the Belgian political crisis which has now been going on for about 15 months. By now most Belgians are suffering from political depression: they are no longer able to swallow yet another glass of this soap. Yet if anybody out there is still interested (I am, even if also politically slightly depressed), below the fold is a short summary of the last two episodes of the Belgian crisis. Warning: this post requires some knowledge on the Belgian political labyrinth, which I’ve tried to sketch here
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So I have a quite different take on the broader geo-politics of the Russia-Georgia conflict than either Matt Yglesias (in new digs – update blogroll accordingly) or Steve Clemons. Clemons:

much of what we are seeing unfold between Russia and Georgia involves a high quotient of American culpability. When Kosovo declared independence and the US and other European states recognized it—thus sidestepping Russia’s veto in the United Nations Security Council—many of us believed that the price for Russian cooperation in other major global problems just went much higher and that the chance of a clash over Georgia’s breakaway border provinces increased dramatically. By pushing Kosovo the way the US did and aggravating nationalist sensitivities, Russia could in reaction be rationally expected to further integrate and cultivate South Ossetia and Abkhazia under de facto Russian control and pull these provinces that border Russia away from the state of Georgia. At the time, there was word from senior level sources that Russia had asked the US to stretch an independence process for Kosovo over a longer stretch of time—and tie to it some process of independence for the two autonomous Georgia provinces. In exchange, Russia would not veto the creation of a new state of Kosovo at the Security Council. The U.S. rejected Russia’s secret entreaties and instead rushed recognition of Kosovo and said damn the consequences.

Yglesias:

In a broader sense Steve Clemons raises the good point that the government of Russia made it pretty clear that if the United States recognized Kosovo’s unilateral declaration of independence from Serbia over Russian objections that Russia would retaliate by stepping up support for separatists in Abkhazia and South Ossetia. This doesn’t seem to have given any of Georgia’s outspoken friends in the United States any pause. Indeed, strong pro-Georgian views in the U.S. media and foreign policy community correlate heavily with strong pro-Kosovo views. This highlights the fact that the underlying issue here is simply a disposition to take a dim view of Moscow and to favor aggressive policies to roll back Russian influence rather than some kind of deep and sincerely felt desire to help Georgia.

Now I’m not too keen on the ‘brave little Georgia’ crowd myself, but neither of these seems to me to be right. Steve, who’s a realist, doesn’t seem to me to be providing a realist enough take on Russia’s motivations, while Matt seems to be soft-pedalling his liberal internationalism. There are many ways to interpret what’s been happening over the last few days, but one important part of the explanation is an argument over norms, and specifically the relationship between the norms of territorial integrity and self determination, that has been playing out since the end of the Cold War. [click to continue…]

Kevin Drum links to an unusually stupid (by which I mean ‘unusually stupid, even by the standards of the Corner’) post by Byron York on Obama’s Berlin speech.

It’s a small passage from Obama’s Berlin speech, but this formulation, common in some circles, grates on some ears, like mine:

The terrorists of September 11th plotted in Hamburg and trained in Kandahar and Karachi before killing thousands from all over the globe on American soil.

Yes, the victims were from all over the globe — places like Brooklyn, and the Bronx, and Manhattan, and Queens, and Staten Island, and New Jersey — all over. And most were Americans, weren’t they?

I knew when I read this that I’d seen the same sentiment expressed in a speech by Secretary of the Department of Homeland Security, Michael Chertoff. And indeed, Google confirms that it is so.

Homeland Security’s Chertoff Addresses European Parliament Committee on Data Transfer, Privacy May 14, 2007

…Today’s terrorists fund their operations internationally. They recruit members, they train, they plan and they carry out attacks by exploiting the gaps in the seams in our international systems. The attack of September 11th was a clear illustration of this. The plot was hatched in Central Asia, the recruits came from Saudi Arabia, the training occurred in Afghanistan, the planning occurred here in Europe, and the attack culminated, of course, in the United States with citizens from many countries including many countries represented here lost in the World Trade Center.

I’m eagerly looking forward to Byron’s follow-up post on the dubious sentiments common among ‘some circles’ of senior Bush officials, Chertoff’s shameful failure to mention that most of those killed were American, und (to use the mots justes) so weiter. Byron?

This column from Wolfgang Munchau is a keeper. Challenged by Gideon Rachman last week to reveal the theory under which he believed that the Irish could be kicked out of the EU for having had the impertinence to vote ‘No’ a couple of weeks ago, Munchau obliges:

My own hunch is that they will try to find a way to enforce the Lisbon treaty without the non-ratifiers. As a first step, they will try to offer the No-sayers a quit-and-rejoin deal. It would be the least divisive option of all, but unfortunately, it may also be one of the least realistic. … … In Ireland’s case it may require a referendum to get out and another one to get back in. … If this is not possible, there are several other options involving varying degrees of involuntary separation. For example, everybody would formally remain inside the EU on the basis of the Nice treaty, but the ratifiers would organise their areas of co-operation outside the EU and its institutions – on foreign policy, immigration, economic governance, maybe even on energy and the environment. … There is, of course, the ultimate threat; not a trial separation, but permanent divorce. The Lisbon ratifiers formally leave the EU, and re-group under a new rival organisation. In reality, this is not so much an option, but the thing you do when you have run out of options, the strategic choice of last resort. Like a nuclear bomb, it is a useful device to be used in an emergency, not something you plan for.

This seems to me to be the most interesting analysis I’ve read so far.

A glance at the electoral map suffices to confirm what earlier opinion polls had indicated: the Irish vote divided along class lines in a stark and disturbing fashion. In the most affluent constituencies of Dublin, such as Dun Laoghaire, where even a modest home can cost upwards of €1 million (although that is changing), 60% or more voted for the treaty. In working class areas of the city, it was the no vote which scored in excess of 60%. Brouard and Tiberj (2006) show that precisely the same division between rich and poor, or the skilled and unskilled, can be discerned in the French 2005 vote. …

The argument would be that globalisation generally, and European integration more narrowly, has overwhelmingly favoured skilled workers, at least in affluent countries such as France, Ireland and the Netherlands. Unskilled workers, by contrast, feel under threat from Romanian (or Asian) competition, or immigration from Eastern Europe and further afield. And while those of us who are more fortunate might regret it, it is hardly surprising that—in accordance with Heckscher-Ohlin logic—they vote accordingly. … Unbelievably, given the importance of the vote, there were no exit polls taken which might give us an indication of why those who voted no did so. But I have to say that my bet is that the gap between middle-class and working-class voting patterns has a lot more to do with different interests, real or perceived, than with supposed differences in political sophistication. …

If this interpretation is correct, then the Irish referendum result, in one of the most pro-European members of the Union, should serve as a wake-up call to politicians that if they want to maintain the benefits of open international markets, as I do, they will simply have to take more notice of the concerns of those who are being left behind.

Update: The Eurobarometer report on a flash survey they did immediately post-referendum is available at Irishelection.com. Thanks to Simon in comments for the pointer.