Tag Archive: political issues

#ThisIsaCoup´s Germany Bashing is “Over the Top”

Quite a few people have taken to twitter under hashtag #ThisIsACoup to air their view that Greece has been bullied and coerced into an unjust and undemocratic agreement by the other Eurozone members, with the finger being pointing directly at Germany.

#ThisIsNOTaCoup

At least part of the reason for the popularity of hashtag #ThisIsACoup is that prominent commentators such as Paul Krugman, the Nobel-winning economist, have helped to legitimise it and propel the hashtag #ThisIsACoup to the global audience. Krugman wrote in his New York Times blog“The trending hashtag #ThisIsACoup is exactly right.” This was part of his campaign to encourage Greece to exit the Euro.

 I have shown that hashtag #ThisIsACoup is exactly wrong and on two counts. Firstly, “this is a coup” literally implies a great compliment to the Eurozone countries (a coup), which Krugman and the rest presumably did not mean. What they actually meant is hashtag #ThisIsACoupD’état. But here too they have got it completely wrong because the bailout agreement on offer has none of the defining characteristics of a coup d’état either.

I am not arguing that the Euro summit agreement is all fine and well. It most certainly is not and makes unrealistic demands of Greece given the almost non-existing willingness or capacity to reform. I am simply saying that referring to it as a coup d’état (or indeed comparing the agreement terms to the Versailles Treaty, which some commentators have taken to doing) is emotional claptrap directed at one country rather than the 19 that signed the agreement, Greece included.

 #ButItCertainlyISGermanyBashing

In this post I would like address the content being posted on hashtag #ThisIsACoup. This particular bandwagon is not only ill-informed but it is deteriorating into a full-on Germany bashing movement.

Have a look at a selection of photos on offer to get the general gist of what is going on.

Germany Bashing 1

This is a sub-set of the kinds of images being posted. Some of them are funny but the vast majority are simply misleading or spiteful. The tweets are laced with references to Nazism, Fourth Reich and other stuffpointing towards Germany´s true intentions, namely of subjugating Europe through the back door.

Which planet have these people been living on since 1945?

Germans are entitled to feel offended by what is going on. Make no mistake: this is not restricted to the Twittersphere. A reading of comments posted in many national newspaper articles relating to the Eurozone crisis reveals a rising level of enmity towards Germany and its supposedly true intentions towards Europe via the mechanism of the Euro.

As a Briton living and working in Germany, with a German family, friends, family and colleagues, I find this sort of thing, often under the guise of “humour”, unacceptable.

This is unfair. It is wrong. This is  Germany bashing.

If it has not yet been understood those in question, please reflect on the unequivocal fact that that vast majority of Germans would never have opted for the Euro if they had been given a choice and would gladly return to their beloved Deutschmark tomorrow if they could. The Greek tragicomedy is only adding fuel to this particular fire. But I guess whatever I say will never not cut much ice with some people.

Debt relief has already happened and will continue to happen

Now, having got that off my chest, I would like to turn to the rest of Paul Krugman´s quotation, since it appears to legitimise much of what is going on in hashtag #ThisIsACoup namely: “This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.”

I would like to start with the end bit: no hope of relief. It must be noted that Krugman wrote this before the finalisation of the bailout negotiations, so he was not aware of the fact that, for the first time publicly, “hope of relief” has been finessed into the agreement (“… including financing needs, debt sustainability and possible bridge financing.”). We all know there is no such thing as money for nothing; and so do the Greeks. Incidentally, Krugman also fails to acknowledge that there has already been very significant debt reduction in the first two bailouts for Greece. There will almost certainly be further debt reductions in the third bailout.

As for the final part of the quotation, “This goes beyond harsh into pure vindictiveness,” I suggest that the Nobel laureate actually looks are the terms of the bailout to justify his view. I do not see it, thought I do agree that many of the things in the Euro summit agreement will never be realised, just as they were barely realised in the first two bailouts and/or were reversed once Syriza assumed power.

Germany Bashing 2National sovereignty is a 19-way street

The “complete destruction of national sovereignty” part is a red herring. In a representative democracy, the Greeks elect their government and their government makes decisions in relation to spending, taxation, etc. Parliament does not have to agree to anything it does not wish to do. In the meantime, the Greek Parliament has voted to accept the draft agreement. Two general elections and multiple Parliamentary votes later, the Greek government continues to ratify bailout conditionality. The debate about national sovereignty cannot be about Greece and Greece only. In the Eurozone there are another 18 nations whose taxes are increased and/or expenditure is potentially curtailed as a result of bailout after bailout to help Greece get its own house in order. There is a duty and responsibility towards the sovereignty of 19 nations, not only one.

If a country runs out of money through its own actions and inactions and needs to get it from another 18 countries with no end in sight, then then that country can expect reforms. But remember, these are the things which everyone agrees (including the Greeks themselves) it has systematically avoided doing for decades. Ask other states that have gone broke (but do not have the benefit of a Eurozone sugar daddy) whether they have had to implement painful reforms or not and for how long they have had to do it for in order to get back to normalcy.

Greece is under tremendous pressure to accept the bailout and some of the conditionality is questionable, such as connected with the privatisation fund. This reflects the lack of progress made in the other two bailouts as well as the breakdown in trust as a result of the negotiation tactics deployed in the last six months, rather than pure vindictiveness. At the end of the day, Tsipras and the Greek government must decide what, on balance makes most sense for their country. If the conditionality is vindictive and humiliating, there is an obvious option for them. If the future is truly brighter outside the Euro then it is the duty and responsibility of the Greek Parliament to go in the direction advocated by Krugman and others. But this is something which they have steadfastly refused to do so far to many economists´ dismay and disbelief.

As an aside, Paul Krugman is reported to have said that in pushing for a Greek exit he may have “overestimated the competence of the Greek government” and that it didn’t even occur to him that Greece would make a stand against the rest of the Eurozone countries without having made a plan for an exit from the euro if things went wrong. Perhaps he will also come to agree that the latest bailout agreement may be better than the alternative after all.

He who pays the piper calls the tune

At the end of the day, the country which makes by far the biggest contribution to the bailouts and thus potentially incurs by far the greatest loss associated with the Greek bailouts is entitled to not just a vote but to a significant say in the matter. Failure to do so would be irresponsible in relation to its own tax payers and a failure in democracy vis-a-vis its own electorate.

Every country must look after its own national interests. Consider Britain steadfastly refusing to contribute a penny to the Euro bailouts but offering to show solidarity towards Greece in the form of “humanitarian and medical aid,” should the country choose to exit the Euro and default. Britain is doing what it considers acceptable to its own electorate, as are all 19 Eurozone countries. What about Greece? Its approach is the epitome of following its own national interests. Why not Germany?

Get real: Greece´s sovereignty is not the only one in question; 19 countries are affected by the crisis. As the biggest contributor, Germany is entitled to a significant voice in the decision making-process (just as Italy, France, etc. and the Troika/Institutions are – but Britain is not). Some may not like it, but that is the reality.

Grow up: WWII ended 70 years ago; there comes a point when it is just plain silly to keep rolling out the tired old war clichés.

Stop the “over the top” (pun intended) Germany bashing.

 


The Housing Crisis and the Main Political Parties´ Solutions

Britain has had a housing issue over a period of decades which has morphed into a full blown housing crisis. So it is worth asking the question: just how do the leading political parties aim to solve the housing crisis, an issue which has been extensively discussed in the media and which directly affects people´s quality of live? This question focuses mainly on Britain, though the German situation is also touched upon.

Is there a housing crisis?

In Britain, no one seriously questions the fact that there is not only a real housing crisis in Britain, but that it is the worst it has been in a generation. In fact the worst situation in a generation does not really capture the issue since the current levels of house building in Britain are actually the lowest in peacetime since the 1920s. Unlike frequent hints and suggestions to the contrary, this is not first and foremost due to an increase in migration from the European Union (EU), which started in 2004, peaked in 2009 and been running at lower levels since. This is not to suggest that net positive annual migration does not impact on housing demand and thus ultimately on house prices. It is to argue that a full-blown housing crisis has taken decades to reach the current level, rather than being a consequence of 11 years of migration from the new accession and other EU countries. Rather, it is the direct consequence of neglect by the leading political parties over generations.

Demand for housing is not simply about migration, it is also about the overall population growth, as well as other factors such as regional migratory patterns, trend towards smaller households and various many other factors. To argue, as the media, the politicians and many ordinary people increasingly have, that the current housing crisis is due to migration in general and/or so-called „uncontrolled“ EU migration in particular is quite simply pie in the sky.

The other key factor, of course, is supply of housing and here, we see the real problem which has resulted in the current housing crisis. Unlike Germany, where demand and supply are responsive to one another (albeit it with a time lag that is caused by investors, the construction industry and the planning system taking time to react to the changing circumstances), the same does not apply to Britain and has not done so for decades. Quite simply not enough housing is constructed to meet demand. At its core, this is fundamentally the cause of the housing crisis in Britain, though there are numerous factors which deliver this unsatisfactory outcome.

Of course, one could discuss the effects of certain policies which have affected the housing policy dynamic, the most important one being the Right-to-Buy policy, which since 1980 has resulted in 1,5 million homes being sold at discount. However, this does not affect demand and supply situation. People still need to live somewhere, regardless of whether a former council owned property is now owned by the last former tenant or not.

What are the solutions to the British housing crisis?

It is safe to say that one of the two leading parties is likely to lead whichever government comes into power after 07 May 2015. So it is worth asking the question of what they are proposing in their election manifestos to solve this major social and economic ill which affects the younger generations in particular (but not only). These are, of course, also the ones which either do not vote or tend to vote proportionately less than their parents´ and grandparents´ generation.

The answer in terms of what they are proposing is, sadly but perhaps predictably, not that much.

  • Labour Party: promises that 200,000 houses will be built annually by 2020, meaning that the numbers will be a lot lower until then. Given that annual construction is currently running at half that number, this is a realistic target but there is little detail on how this will actually be achieved, let alone ensuring that such housing is affordable.
  • Conservative Party: the supply of housing is not uppermost in the manifesto, since the emphasis is on privatising whatever social housing is left, namely the stock that is used by 1.3 million families living in housing associations. There will also be a requirement for local authorities to sell the most valuable properties from what remains of their housing stock (210,000 or 5%). The sales will be reinvested in new housing supposedly resulting in a larger number of new houses built, compared with those sold. The plan is to create 200,000 Starter Homes over the course of the next five years, which will be sold at a 20% discount to for first time buyers under the age of 40.

Is the end of the housing crisis in sight?

Any way you view the election promises of the two leading parties, the numbers simply do not add up. Even if it were possible to achieve the targets set by 2020, which is in itself doubtful (for example, the Conservative manifesto more or less rules out construction of Green Belt land and the Labour manifesto does not even mention it, referring only to the Lyons Review), neither party is seriously promoting serious, long-term solutions to the housing crisis. Housing is first and foremost a numbers game; the supply has to exceed demand and it needs to be maintained over decades in order to deliver not only sufficient, affordable homes, but also an increase in standards and quality over time.

The proposed solutions are not going to do much for the large numbers of people, especially those under the age of 35, who are currently having to live with their parents or paying high rents for low quality private rented housing. The proposed solutions represent yet another missed opportunity to think long-term and prioritise investment in what is a basic human necessity, as well as something which greatly influences our quality of life. The contrast with other European countries, such as Germany, could not be greater as illustrated in a previous post comparing the German and British housing systems.

Ricardo Pinto, AngloDeutsch™ Blog, www.AngloDeutsch.EU


Launch of the AngloDeutsch™ Blog

New AngloDeutsch™ Blog Launched

Today, the AngloDeutsch™ Blog was launched. The main reason is that Britain and Germany are countries that are absolutely critical to the future of Europe and the European Union. Yet, there is currently a gap in terms of comparing and contrasting the two countries in terms of various dimensions, such as economics, housing, health, etc. within the overarching context of the EU.

It was not always so. In the same year that Britain joined the European Economic Community in 1973, the Anglo German Foundation (AGF) was established in recognition of the fact that the Germany and Britain could learn a good deal from each other, not least to improve mutual knowledge between the two countries and deepen understanding of modern society and its problems. The AGF undertook policy-oriented comparative research on the Britain, Germany and what is now the European Union (EU). It was valuable to compare and contrast countries that were not only the two largest in the EU, which also exhibit rather different social, political and economic traditions. They are two of the largest EU trading and exporting nations, the people respect each other and, despite the differences, or perhaps because of them, they can learn from each other’s ways of doing things.

In 2009 the Trustees decided to abolish the AGF, the main argument being: “… other organisations at both national and European levels are now carrying this work forward, and the need for a specific institution for this purpose is no longer so compelling.” (Anglo-German Foundation for the Study of Industrial Society,p.3).

British and German Comparisons Growing in Importance

I disagree with this conclusion. Some 40 years on, the reality is that the need for comparative analysis and discussion in relation to Britain, Germany and EU is greater than ever before and it is far from obvious which other institutions are carrying this work forward. I believe that the last Trustees of the AGF would probably be astounded at how dramatically things have evolved since their decision to end the institution.

A number of momentous developments are affecting the socio-economic dynamic in Europe:

  • The recession that started in 2009 has morphed into full-blown global financial and economic crises. The sovereign debt and the commercial banking crisis drag on and the prospect of deflation still looms large in Europe and elsewhere.
  • The Euro and the significant political and financial reform efforts connected with ensuring that it is kept alive has resulted in enormous fissures arising between Britain, Germany and the EU countries. These tensions are, if anything, increasing over time.
  • The political strains of keeping the Euro (and thus the EU) together, not least through various forms of austerity, have taken a massive toll on the credibility of the EU as well as the level of cooperation and trust between nation states, not least the German-British-French axis. This applies doubly so to the so-called „PIIGS“ (Portugal, Italy, Ireland, Greece and Spain) and the north Europeans, especially Germany, Holland, Austria, Finland, etc.
  • The UK and DE play a critical role in the future of the EU. Germany has become the undisputed albeit reluctant European hegemon, though the jury is still out as to how long this status will last. The decisions and even ruminations of Europe’s preeminent politician, Angela Merkel, reverberate throughout the EU. The same cannot be said of David Cameron (and still less François Hollande) to the same extent. Still, the UK’s role in EU, influential though diminished, remains critical to the future of the EU (independent Sterling, monetary and fiscal policy, insistence on EU reform and devolving powers to the nation state, challenge to the freedom of movement principle, possible in/out referendum on whether to remain in the EU in 2017, etc.).

These stresses and strains are part and parcel of what has become a full-blown crisis of the legitimacy of the “European Project”, as understood since it was formed in 1951 by the Treaty of Rome. A process whose ambition was to “make war not only unthinkable but materially impossible”  (The Shuman Declaration, 9 May 1950) was not and could never have anything short of an economic, social and political project, even if the discourse was principally economic.

This ambition was not merely a Franco-German idea. Immediately after WWII Sir Winston Churchill was one of the first to call for a “United States of Europe” (“We must build a kind of United States of Europe. In this way only will hundreds of millions of toilers be able to regain the simple joys and hopes which make life worth living. ” 1946, p.1). The ambitions of the European Project have always been understood in its wider sense by its founder members, not least Germany, because of its particular historical specificities.  However, this ambition was and remains almost entirely an economic or trade issue in pragmatic Britain.

Longstanding concerns about the legitimacy of the EU, the steady erosion of the powers of the nation state (contrary to the principle of „subsidiarity“), the implications of principle of freedom of movement and indeed of the limits to the notion of „ever closer union“ in the EU have been forced to the foreground by the Euro crisis. These issues must be debated and tackled to maintain legitimacy with the people as well as the governments of all 28 EU nation states.

Britain and Germany at the leading edge of the EU

In this context, the British and German electorates have a critical role to play in the future of their respective countries, as well as that of the “European project”. They are at the nexus of the most important debates connected with the great issues confronting Europe, not least:

  • The future of the Euro and the EU (e.g. EU reform and in/out referendum in 2017).
  • The advent of anti-EU / Euro parties (e.g. the Ukip and AfD).
  • The solutions to the recession / depression, austerity and falling standards of living.
  • The debates on the future of housing, education, poverty, migration, health, ageing, etc.
  • But also the more fun things in life, such as sport and traditions such as Christmas.

Through the AngloDeutsch™ Blog, launched today, focuses mainly but not exclusively on Britain, Germany and the EU, it is hoped that a contribution can be made not only to better understanding in general but also to possible economic and social policy solutions and recommendations. This would be in keeping with the tradition of the now defunct AGF, even if the focus of a blog cannot be on rigorous academic research per se.

Focusing on the British and German perspectives has gained in salience. The target group of this blog is not the academic community, interest groups or indeed the politicians, though it is hoped that they too will get involved and/or be influenced by the AngloDeutsch™ Blog. The target group is anyone who has enough humility to be willing to learn about alternative ways of doing things, discuss different views and maybe implement some of the ideas, taking into consideration the uniqueness and specificity of every nation, region and locality. This aim is illustrated in the Box below.

The AngloDeutsch™ Blog aims to contribute to the policy process in Britain, Germany and the EU more generally by raising comparative economic, social and political issues and by stimulating an exchange of knowledge, views and experience between informed citizens in the two countries, as well as the EU.

 

To kick off the blog, the first few themes covered by the AngloDeutsch™ Blog will include the following:

  • The immigration debate.
  • Christmas traditions (since the blog is launched in December).
  • The housing crisis.
  • The future of the EU.

Other themes will follow as the blog evolves.

Ricardo Pinto, AngloDeutsch™ Blog, www.anglodeutsch.eu