Has Angela Merkel’s Twilight Begun?

This comment was published 23 May by Carnegie Europe

Merkelomics is specific to Germany. And while Berlin is not alone in having to adjust its budget to new economic realities, Merkel cannot be blamed for corrupt public finances in some southern European countries. Nor is she responsible for the Spanish housing bubble or the refusal of Greek governments of left or right to collect taxes from their voter clients.

Merkel was lucky in that her predecessor, Gerhard Schröder, did all the heavy lifting to clean up the German economy and make it competitive again. But her do-little management style is edging Germany toward zero growth, and she now faces the same populist anti-euro politics as seen from the UK’s Nigel Farage, the Netherlands’ Geert Wilders, Italy’s Beppe Grillo, and others.

Merkelomics needs to give way to smarter economic management. Other EU member states should benefit from this, but they won’t unless they too embrace reforms to free up their economies. They also need to allow the mountains of capital currently hoarded by the über-rich to become free-flowing rivers of capital that can create a new middle class of entrepeneurs and fair-paid workers.

That requires new economic thinking, but so far most politicians have been hankering after a return to an imagined past. Like former chancellors Helmut Kohl and Konrad Adenauer, Merkel can carry on. But she has done all she can and is now an obstacle to progress. All political stars fade, and Merkel’s twilight has begun

‘EU at the moment is a giant blame game’ Russia Today Interview 18 May 2013

‘EU at the moment is a giant blame game’

Published time: May 18, 2013 04:17

Britain should be a player in the EU, but can’t ‘cherry pick’ what part of Europe to take or to leave, Denis MacShane, former UK Minister for Europe told RT, as the debates of the nation’s membership in the union continue.

Addressing the euro skepticism growing throughout the UK, British Prime Minister says he intends to let British citizens decide if they want to be members of the EU in a vote in 2017.

French President Francois Hollande, criticizing Britain’s antipathy, reminded the UK that France, Germany and other nations made up the European Economic Community (EEC) long before Britain signed on fully in January 1973.

Europe existed before Britain joined it,” Hollande said during a nearly three-hour press conference Thursday.

MacShane stressed that the current EU is worse than a “playground” with the way nations continue to blame each other for the coalition’s troubles.

No member state has ever left the EU, although the British did hold a referendum on whether to continue their membership in 1975, two years after the country’s initial entry into the collective. Imminent structural change to the EU, spearheaded by France’s Hollande, has reignited British debate over the country’s place in the bloc.

RT: The French President had harsh words for Britain… deserved, do you think?

Denis MacShane: I think you’d find a lot of British politicians who’d agree with him, that Britain would be better off outside of the European Union. Go and listen to debates in the House of Commons where people are lecturing the French and everybody else in Europe on what to do. Sadly, the EU at the moment is a giant blame game, finger pointing. Brits blame the French, the French blame the Germans, the Germans blame the Spanish. Frankly, playgrounds have got more adults these days then the top leadership of Europe.


French president Francois Hollande delivers a speech at the city hall on May 17, 2013 in Caen. (AFP Photo / Charly Triballeau)

RT: In the past you’ve called for Britain to join the Eurozone – what’s your position on that now?

DM: We should be fully integrated. We have a heavily devalued pound and yet the balance of trade, what we export, is getting worse and worse. Either we should be properly in, or perhaps, thanks to the kind of political leadership we’ve had in the recent years, it’s likely we may decide to leave.  And then Europe will be split asunder and every European country, not just Britain will be much weaker as a result.

RT: You’ve been an outspoken Europe-supporter for years, are you actually supporting exit now?

DM: Not at all. I think Britain should be a player, we can be a player. A lot of the points put forward by Mr. Cameron and other British political leaders have a lot of good sense in them. But I also think that points put forward by Mrs. Merkel and François Hollande have sense – that Britain can’t ‘cherry pick,’ Britain can’t come in and say we take this little bit of Europe not all the rest. We are moving after the catastrophe of the banking crisis where the banks were run by all these people who destroyed the economy in 2008 and we are still living with the disasters of their incompetence. I think we should have more banking supervision, what is called a banking union. I think Britain should be part of that.

RT: In the past, you’ve said the Euro would not lead to a European super-state – but doesn’t the European Central Bank now having oversight over Eurozone banks contradict this?

DM: No, what I’m saying is that we need a much tougher regulatory systems for banks. We’ve got regulations in place for trade. We had them in place 60 years ago for the coal and steel industries of Europe. Britain said no to that. It made no difference; it wasn’t the arrival of a super state. What Europe needs, what we all need around the world is to do away with tax havens, tax dodging, to do away with people parking their money in London, Switzerland, Luxemburg or whatever to dodge taxes – we need to have  much tougher supervision. More broadly speaking, in my country, Britain has been going through 20 years of non-stop campaigning against Europe. We have just seen the death of Mrs. Thatcher, she contributed to this, and Mr. Cameron and all of the political leadership at the moment on the conservative side are the children of Mrs. Thatcher.  And they’ve been telling us for years that Europe is a terrible thing with awful people and we have to do as little with it as possible. Now, I think the British people are believing it and saying, ‘OK, give us a vote, maybe we’ll leave the EU’. And France, Germany, Poland and France are saying ‘OK, we’d rather you stay, but if you really want to go – Bye-Bye!’

Anyone Still in Favour of Staying in Europe

Wolfgang Munchau in the FT follows Michael Gove and Philip Hammond in saying the UK can live outside the EU. That is a truism. But after Nigel Lawson and Michael Portillo last week who is making the case to stay in Europe other than the two M – Michael Heseltine and Peter Mandelson – both big political beasts but no longer young cubs seeking to the lion kings.

Offhand I cannot think of any recent parallel in which cabinet ministers openly defied the prime minister’s policy – namely that the UK should stay in the EU but on different terms. Even if that is a wish and not an easily realisable policy, it remains the stated official position of HMG. But two of the most senior cabinet ministers say they would want a referendum asap and vote to leave.

All these development reinforce my view that a Brexit is now more not less likely. No-one has woken up to what this means



3 Books Relevant to Europe

Below a review of 3 books I have just sent Tribune. Tribune remains the only now fortnightly journal which is rooted in Labour Party and labour movement politics. The coverage in main papers is now threadbare which is sad.

The Passage to Europe. How A Continent Became a Union by Luuk van Middelaar, Yale University Press, £25

Murdoch’s Politics. How One Man’s Thirst for Power and Shapes the World, by David McKnight,  Pluto, £12.99

Oranges. A Global History by Clarissa Hyman, Reaktion Books, £9.99



Here are three excellent books all dealing with the Europe conundrum that consumes our daily media. Europe has never been a question of our identity but rather of interest. For most of the post-1945 era, Europe outperformed Britain in terms of economic growth. The balance of power was maintained by Nato, not the Royal Navy. But from Macmillan to Thatcher, British leaders understood that being in Europe added value.

This is no longer the case. Luuk Van Middelaar has written by far the best, accessible, thoughtful account of Europe as was and is and as he hopes will be that we have seen in years. Written first in Dutch and then into French and now English this is a profound narrative of European politics and at the same time a philosophical discussion of what Europe means. For that reason it will not be read by our political elites. Half of them want out off Europe. The other half imitate the 3 Wise Monkeys and see, speak and hear no Europe.

In 1990, the Government spent £25 million on its ‘Are EU Ready’ campaign to educate business and citizens about the single market. Today, our off-shore owned press spent that every month in wall2wall anti-EU coverage. Sir Simon Jenkins, the doyen of the smarter Europhobe writers writing in in the Guardian recently  put all the blame for EU unpopularity on the Euro. Yet latest opinion polls show three out of five Greeks wanting to keep the Euro. Luckily we have a control on Eurozone problems namely the United Kingdom. The rest of Europe sees a Britain outside the Euro, Schengen and on the point of leaving Europe. Yet here we have economic misery, a devalued pound unable to boost exports, increasing poverty and regional disparities, destructive attacks on public services, and the growth of populist, xenophobic politics. Youth unemployment in Sweden is at 28 % so not using the Euro appears not to be a panacea. The clumsy, crude approach by the EU’s dominant centre right ruling elite which controls the Commission, Council of Ministers and Parliament needs to change but Balkanizing Europe is not the answer.

However if the doyen of our off-shore press owners gets his way Britain will be the first big nation to leave Europe. David McKnight is an Australian left intellectual. He has written  a really good accessible book about Citizen Murdoch. What  drives him is political influence. When Rupert first came to England and bought the News of the World he was courted by Harold Wilson. In 1970, the Sun supported Labour just as it did when Tony Blair emerged as a winner and just as it didn’t when it was clear Gordon Brown was a loser. Murdoch likes inside influence and access. The best way to treat him would be Prince Hall on becoming Henry V and telling the blustering, braggart Falstaff, ‘I know thee not, old man.’ But Murdoch turns the strongest political beast into a crawler.

Murdoch does not know who will win the 2015 election but he does know that Ed Miliband delivered a dagger thrust to his modus operandi when Miliband called time on the Murdoch editors like Rebekkah Brooks and Andy Coulson. But the Murdoch snake was scotched not killed. It is preparing like a cobra from the deep to strike back. The chosen terrain is Europe and Murdoch will do all to boost UKIP and to get Britain out of the EU. His daily and Sunday tabloids as well as the Times and Sunday Times are lining up in a fight to the death to get us out of Europe. That will be Murdoch’s final revenge and final homage to his heroine Margaret Thatcher.

Meanwhile let us eat fruit. As someone who cannot begin a day without eating a quartered orange, surely the most versatile and varied fruit in the world, and long Europe’s favourite, Clarissa Hyman’s delightful book is a perfect read. Oranges are globalization’s first commodity producing beautiful still life art as well as the orange box posters from Florida and California or the decorated tissue paper wrappings of single oranges.

‘Oranges and lemons’ we used to sing until the chopper came to chop of our heads. In medieval times, the dead person was buried with an orange to keep him company to the other world. As we prepare to leave Europe for the brave new world that Nigels Lawson and Farage, Rupert Murdoch and the ghost of Thatcher are taking us to, let’s make sure we have a supply of fresh oranges with us. Not the chemicalised, pasteurized, frozen, reconstituted orange juice which, unless you see squeezed in front of you, avoid. In fact, there should be an EU directive against fake orange juice. Maybe Britain outside Europe will do the decent thing and insist on freshly squeezed OJ only.



Italian Politics Better Than Verdi

Just back from quick catch up trip to Italy and as I return I learn that dear old Silvio B has been found guilty – again – of tax evasion and sentenced to one year in prison. He won’t serve it of course because as long as he is in parliament he has some immunity. Perhaps he should have asked one of the ladies in his life to take some speeding points and then he would be behind bars but in Italy as in England the big corruption goes unpunished.
The Enrico Letta government is to put it mildly heterogenous. Letta himself started life as a DCer but on the more socially aware wing of Italian conservativism. He was then an MEP sitting in the liberal ALDE group in Strasbourg. Then he moved to become number 2 in the PD – the fusion party set up in 2007 mainly consisting of PCI (communist) members. I saw loads of posters for the Refondazione Communista which carries the torch for hard-line left politics like Jean Luc Mélanchon in France, Syriza in Greece, or Die Linke in Germany. It is curious that the economic crisis in Britain has not given birth to any leftwing political movement.
The new government has coupled PD, ex-commnist ministers with Berlusconi men and women. Already Letta has had to agree to withdraw a property tax that his predecessor, Mario Monti, had brought in. That was Berlusconi’s main campaign platform and he won – again – the votes of Italy’s middle classes who do not want to pay any new taxes.
Beppe Grillo, the clown (literally) with a Nigel Farage loudmouth style stays out of government but people seem now to see him as just a protest vote dustbin. There is something profoundly anti-democratic to campaign for votes, win 25 per cent, and then refuse to take any responsibility for the hard decisions Italy needs.
I was staying near Siena in rich(ish) Tuscany. But the poor farmers I have known over more than three decades seem to be driving bigger and faster cars and there is new housing development eating into the Sienese countryside. The city was heaving with shoppers and Pisa airport was fuller than ever.
So without getting into ‘crisis, what crisis?’ there is some sense that Italy will survive and the notion of the rest of Europe being in meltdown while plucky little England with its devalued currency, lack of growth, and wrenching north-south poverty divides is the blessed nation of Europe does not make sense.

Mrs T – My Efforts to Explain Her to the French

Below is an article I suppose an obituary published on Slate.fr when Margaret Thatcher died. I disliked both the absurd over-the-top accounts of her by her worshippers and the clumsy attempts by the prime minister to use her death and state(ish) funeral for his ends. She is memory not yet history and there is little doubt that she divided the nation and the divisions have not healed. Yet she was an immensely dominant politician. I remember Britain in 1979 and it was in a dreadful state rather like France in 1958 when General de Gaulle took over. He was hatred and detested by the French left especially at the time of the 1968 movement. Of course Margaret Thatcher was not a wartime leader like de Gaulle but along with Tony Blair she was the most dominant, significant, important PM of my lifetime.

9 April 2013

Margaret Thatcher, femme des années 80 et femme du siècle

Une tribune de Denis MacShane, ancien ministre britannique des affaires européennes.

Margaret Thatcher fut l’un des dirigeants britannique et européen les plus puissants de toute l’histoire nationale et continentale en temps de paix. D’un même mouvement, elle sut incarner et transformer le XXe siècle. Elle hérita d’une nation aussi acculée que la France l’était en 1958. Pour la Grande-Bretagne, les années 1970 ont été une décennie perdue. L’État ne savait plus quoi faire.

L’industrie se voyait paralysée par des grèves incessantes mettant régulièrement à l’arrêt les transports, quand elles ne causaient pas d’interminables coupures de courant. Les syndicats les plus bêtes du monde refusaient tout compromis. Et quand les fossoyeurs municipaux décidèrent de baisser leurs pelles et de faire eux aussi grève, même les morts furent privés de sépulture.

Les ministres travaillistes, à l’instar de leurs homologues français sous la IVe République, n’avaient rien appris ni rien oublié. Mme Thatcher n’était pas de Gaulle, mais elle transforma son pays aussi profondément que lui le sien. Et de même que la génération 1968 a fini par comprendre que le Président qu’elle détestait tant possédaient certaines qualités nécessaires aux chapitres de l’histoire restant à écrire, la contribution de Margaret Thatcher ne sera pas éternellement considérée sous un œil négatif.

Elle préférait la City aux usines, le sud au nord, et Ronald Reagan à François Mitterrand

Elle fut une guerrière, jamais une guérisseuse. Une Amazone, pas une pacificatrice. Pour elle, la politique se faisait dans le sturm und drangde Wagner, pas avec la petite musique de Mozart. Elle savait quels étaient ses ennemis et savait comment les combattre. Elle déclara la guerre au communisme, au socialisme et aux syndicats qui refusaient les compromis à la nordique ou à l’allemande. Elle transforma l’économie en vendant des compagnies alors aux mains de l’État, comme British Airways ou les secteurs de l’eau et de la sidérurgie. Elle préférait la City aux usines, le sud au nord, et Ronald Reagan à François Mitterrand.

Quand la junte fasciste et antisémite argentine envahit les Malouines, elle balaya les craintes des généraux et des amiraux qui voyaient dans ces îles des territoires trop isolés dans l’Atlantique sud pour être reconquis, et elle réussit à les récupérer. Dans cette opération, elle alla à l’encontre des États-Unis: en première intention, Washington avait préféré plier devant la junte de Buenos Aires. Cette humiliation des généraux et des colonels argentins fit éclater d’un seul coup toutes les prétentions politiques des armées sud-américaines – par la suite, la voie était ouverte pour un retour de la démocratie en Amérique Latine.

Elle ne prit jamais la peine de lire la presse. Un jour, sa directrice de la communication m’avait expliqué que si jamais elle informait Mme Thatcher d’un article intéressant publié dans les pages opinions du Times, elle ne savait même pas à quel niveau ouvrir le journal. «La presse me sera toujours hostile, pourquoi donc me fatiguer à la lire?», a-t-elle déclaré.

Pertes et profits

Mais sur tous les sujets, elle dévorait livres et documents et était toujours plus au fait que les ministres ou les fonctionnaires en charge de telle ou telle question. Quand François Mitterrand lui demanda comment elle réussissait à être autant choyée par les médias, elle lui répondit: «C’est facile, François, j’ai baissé les impôts que payent les journalistes».

Si vous étiez pauvre quand elle est arrivée au pouvoir, ou dépendiez des subsides de l’État pour payer une nouvelle école ou un nouvel hôpital, alors vous dû souffrir des années Thatcher. Mais si vous aviez un emploi, y compris dans le secteur public, et que vous étiez propriétaire d’une maison, alors votre vie s’est améliorée. Vous avez vu votre salaire augmenter, votre bien prendre de la valeur.

Les prêts pour vous payer une nouvelle voiture ou un gîte en Dordogne sont devenus plus accessibles. La génération 1968 n’a pas cessé de se plaindre de Mme Thatcher, mais sa vie fut bien meilleure sous son règne que pendant celui de l’inepte gouvernement travailliste qui la précéda.

Sous Mme Thatcher, la gauche que formaient le Parti travailliste et les syndicats a souffert. Mais la gauche des industries culturelles, des universités et des médias a pu tirer son épingle du jeu. Elle n’a pas remporté trois élections de suite par hasard. Elle était une fine stratège politique, capable d’exploiter les faiblesses d’un opposant.

La décennie de la liberté

Aux temps d’exception, une femme d’exception. Quand Maggie est arrivée au pouvoir, les Trente Glorieuses s’essoufflaient. Elle sut former une alliance idéologique mondiale avec Ronald Reagan. Moins d’État, davantage de liberté économique. Moins d’avantages acquis, davantage de chaînes de télé et de radio. A la fin de la décennie thatchéro-reaganienne, le communisme soviétique était mort, le communisme chinois était devenu capitaliste, l’apartheid était aboli et tous les présidents d’Amérique Latine étaient des civils élus démocratiquement.

Thatcher et Reagan n’en sont pas les premiers responsables. Les ouvriers polonais de Solidarność, les syndicats menés par Lula et les travailleurs noirs d’Afrique du Sud en sont les principaux architectes. Mais les années 1980 furent la décennie de liberté du XXe siècle – liberté politique, économique, culturelle, sociale, un temps où les gays sortaient du placard et où les noirs entraient en politique –, des libertés rendues possibles davantage par la droite que par la gauche.

Sans oublier l’Europe. Au départ, Mme Thatcher était une fervente européiste. Elle ratifia l’Acte Unique Européen. Soutint Jacques Delors à la présidence de la Commission Européenne. Et même en obtenant son rabais britannique, elle multiplia par quatre la contribution monétaire de la Grande-Bretagne à l’Europe. Avant de changer. S’il y a une cause dans laquelle Mme T. a cru corps et âme pendant les 23 années qui se sont écoulées depuis sa démission forcée, c’est bien que l’Europe et la Grande-Bretagne devenaient de moins en moins compatibles.

L’Europe en héritage

Dans son livre Statecraft, publié en 2002, elle en appelait à une renégociation des termes de l’adhésion britannique à l’Europe, pour lui permettre de sortir des politiques agricole, halieutique, étrangère et de sécurité communes, et de reprendre le contrôle de sa politique commerciale. Elle déclara l’UE «fondamentalement irréformable» et écrivit «On dit souvent qu’il est impensable de voir la Grande-Bretagne quitter l’Union européenne. Mais s’interdire une telle pensée, voilà un piètre substitut intellectuel». 

Aujourd’hui, le Premier Ministre David Cameron et tous les membres de son cabinet de moins de 60 ans sont des enfants de Mme Thatcher. Ils sont entrés en politiques en tant que disciples de la Dame de fer, ils ont mûri sous son influence et en ont fait leur modèle. La Grande-Bretagne est proche de la porte de sortie de l’Europe. Et ce pourrait bien être l’héritage de Mme Thatcher. David Cameron est à la fois l’héritier et le prisonnier du thatchérisme. Il ne peut prétendre à ses réussites économiques. Il n’y a plus rien à privatiser. Les syndicats britanniques sont moribonds. Il n’a aucun partenaire à Washington. Mais il peut poursuivre sa campagne contre l’Europe. Si la Grande-Bretagne sort de l’Europe après un référendum annoncé par David Cameron, Margaret Thatcher tiendra là son ultime victoire.

Attacking Merkel Won’t Create Jobs in France

This article was published by OMFIF and the Globalist late April/early May.

The French Socialist Party has launched a bizarre  broadside against Germany. In a draft resolution ahead of a party conference, there is a direct personal attack on Angela Merkel and an accusation that she, and she alone, is responsible for Europe’s austerity malaise.

Waiting for Germany to provide the answers to Europe’s collective economic misery, like Waiting for Godot, is simply Freudian transference – finding anyone other than oneself to blame for economic difficulties.

It is true that in the first years of the recession German growth was strong, reaching 3.7 per cent in 2011. This compares to today’s collapse of growth in France, Britain, Spain and Italy as well as the Eurozone crisis nations.

But that was then. This year, the Bundesbank reports that German growth will do well reach 0.5 per cent. Not quite as bad as across the Rhine or Channel but not enough to lift the European Union out of its recession.

Der Spiegel front=paged in its last issue the fact that in terms of household wealth, Cypriots and Spaniards, were richer than Germans. This is a fake statistic based on the fact that home ownerships is much higher in southern Europe than in Germany where renting an apartment is the norm. Wages, pensions, and health care access are better in Germany but as Die Welt reports  (29 April 2013) German television is dominated by demands that no more German taxes are sent to Cyprus.

New car registrations in Germany in March fell by 17.1 per cent, lower than any major EU country. Average wages in Germany remain 1.8 per cent below those in 2000. Jean Claude Juncker, the savvy Luxembourg prime minister once remarked ‘Every leader in Europe know what to do. They just don’t know how to get re-elected once they’ve done it.’ Gerhard Schroeder did what was needed with the 5-year freeze in industrial workers pay and the loosening up of the labour market to allow flexibility and low-pay jobs. It was great for German capitalism. It was a disaster for the social democratic government as Schroeder’s reward for reform was to be defeated by Mrs Merkel in 2005.

She does not want to make the same mistake ahead of the German election in September. Telling her core electoral base, the German Mittelstand of small and medium firms that they should boost demand by increasing wages is to tell them their profits should sink. The kind of Obama or Clinton model of economic boosterism based on importing millions of low-pay immigrants or fracking American soil to produce gas and oil will not work in Germany. The anti-immigant mood is as sour there as in Britain or France. Mrs Merkel has sought to buy the Green vote by closing down nuclear industry.

Germany is getting older and happy to rely on Russian energy to keep the old people’s homes warm in the years to come. This gemutlich, cosy Germany just wants to avoid experiments and be left alone to export Mercedes and Porsches to the world.

The OCED predicts German growth of not much over 1 per cent over the coming decades. It appears to be unknown to the rest of Europe that Germany made huge sacrifices to incorporate the bankrupt, corrupt, third world communist economy of East Germany – a bit like France merging with Tunisia – after 1990. Even today German taxpayers pay a solidarity tax of 5.5 per cent on top of income tax to pay for the costs of bringing up the former East Germany to the level of their western fellow citizens.

No British prime minister or French president ever thanked the Germans for this personal sacrifice and it seems hard to keep asking the German taxpayer to give money to pay for the serial mismanagement and lack of government supervision of banks and financial institutions in other EU member states.

There is a wider European problem which is politically driven. The austerity ideology that dominates Europe is the product of conventional thinkers who run most European governments and control the European Commission, the Council of Ministers, and the European Parliament. The conservative-liberal and centre right dominant ideology put into operation by politicians who grew up in the early days of globalization and worshipped at the Alan Greenspan shrine of deregulated debt driven growth now no longer works.

No-one appears to have an alternative except those who blame the Euro or call for their nations to leave the EU. The centre-left has its own worried electorate which rejects any reform that challenges its public sector, labour market and welfare state provisions. In France, President Hollande and his smarter ministers like Pierre Moscovici and Michel Sapin know this but they too can remember the fate of Gerhard Schroeder who lost to Mrs Merkel when his reforms hit voters hard.

Blaming Mrs Merkel for the failure of the French economy is not adult politics. New pro-growth reformism is now a priority for the intelligent left. But telling truth to power when you are in power is not easy politics.