Thursday, August 27, 2015

Widening and Deepening in French and European Politics

Is this blog dead? Some might think so, but in fact I'm still here. Indeed, I should have more time to write than ever, because I've translated my last book--or so I tell myself. But retirement from translation has seen me working harder than ever on a variety of projects. I'm writing a novel and an historical essay, reviewing books, and developing a computer program that "reads" a dozen European newspapers and presents me with a morning news briefing in four languages, with hundreds of articles automatically classified in a number of categories. It's working pretty well, and I may even make it publicly accessible at some point. But none of this fits very well in a blog space ostensibly devoted to French politics.

So what's up with French politics, as opposed to the blog "French Politics?" Not much, at least on the surface, and that is the problem. Indeed, as I reflect on what's been happening over the past little while, it seems to me that Europe's problems, like the European Union itself, have grown deeper even as they have grown broader. "Widening" is of course in some ways the cause of "deepening" on the problem level, or, to put it the other way around, the absence of political "deepening" has made "widening" increasingly untenable.

Although the problem of the euro and its role in the Greek debt crisis have dominated the headlines over the summer, in the great historical scheme of things I think that the euro problem will recede. The crisis that will loom large in the history books is the refugee crisis and--still more broadly--the great population shift that is taking place before our eyes. Refugee troubles have lately displaced the euro from the headlines. Yesterday Angela Merkel spoke at the scene of violent attacks on recent immigrants by extreme right-wingers in Germany. France, which complains loudly about the burden of immigration, has been much less affected than other countries, including Greece and Germany. Indeed, France's main border control problem at the moment is dealing with refugees who are trying to get out, who prefer the greener pastures they believe await them in England and are camped out in Calais waiting for a chance to cross the Channel. Germany, on the other hand, is on track to receive more than 800,000 refugees this year, more than four times as many as last year.

This is an extraordinary number, a number so large in proportion to the population that any country would have trouble dealing with it. Merkel, to her credit, was quite outspoken in her defense of the refugees and of the need for compassion in this moment of tragic upheaval across a vast swath of territory, but of course talk is cheap. The German government faces enormous challenges, which France can only be thankful it does not yet have to confront. But it needs to do more, if only to alleviate the pressures on the Germans. Indeed, one path toward the much desired "ever closer union" would be to come to an agreement about the sharing of the refugee burden, but such an agreement would probably be even harder to achieve than the impossible but also necessary agreement about fiscal coordination, eurobonds, and the like.

The refugee problem is complicated by the fact that the very countries from which refugees are streaming into Europe (Syria, Iraq, Afghanistan, Libya, and sub-Saharan Africa) are also foyers of an ideology that appears to be behind several recent terrorist attacks on European soil. The thwarted attack on the Thalys train last week was perpetrated, we are told, by an individual who had traveled to Syria and been in touch with elements of ISIS.

This situation strikes me as potentially explosive. Its implications for the electoral balance in France are quite worrisome. Marine Le Pen has been somewhat distracted by the contretemps with her father, but I expect that she will begin to exploit the compassion-vs.-security dilemma at the rentrée. The rhetoric will get ugly, and I am not at all confident that the current government will respond well. The challenge may divide the Republicans as well. It is easy to foresee a Sarkozy hard line confronting a disappointingly tepid response from Juppé about the need for "Europe" to shoulder more responsibility.

For the blogger, the problem has become that to write about French politics, one must write about European politics, because none of the salient issues of the day can be confined within national boundaries. And European politics is extraordinarily difficult to write about for the same reason that it is extraordinarily difficult to practice: all its actors are two-faced (in the literal as well as the pejorative sense: they must address both domestic publics and international interlocutors, and they speak different languages in each context).

In any case, I hope to be blogging more once the dog days of summer are over and political life resumes. But I am at the mercy of events. The blog form is perforce episodic and superficial--"event-driven" in the common parlance. But European politics has become increasingly subterranean, a matter of tectonic shifts whose surface manifestations are hard to track until "the big one" comes and permanently alters the landscape. My fear is that the likelihood of a large shock--an 8 on the Richter scale--is increasing daily.

Friday, July 17, 2015

Batman, Proust, and I

A little self-promotion. I can't say I ever expected to share a bill with Batman, but there it is (NY Times Best Seller List):

Hardcover Graphic Books

  1. BATMAN: THE KILLING JOKE, by Alan Moore and Brian Bolland
  3. SECONDS, by Bryan Lee O'Malley
  5. IN SEARCH OF LOST TIME: SWANN'S WAY, by Marcel Proust, Stéphane Heuet and Arthur Goldhammer

Anyone eager to buy a copy can find it here. It's a nice, gentle introduction to Proust for those who haven't had the pleasure.

Thursday, July 16, 2015

Whither Europe?

The lull did not last long. Whatever Merkel and Hollande thought they had accomplished with their Potemkin bailout has now been exposed for the sham it is by none other than Mario Draghi. Draghi announced that the ECB will increase its Emergency Liquidity Assistance (ELA) to Greek banks to €900 million a week, but he also said that Greece "indisputably" needs debt relief, thus reinforcing the position of the IMF (or at any rate its research staff as opposed, thus far, to its policy arm).

L’homme fort de l’institution de Francfort a également clairement pris position dans le vaste débat sur la dette grecque. Selon lui, il est « indiscutable » qu’un allégement de la dette de la Grèce est nécessaire — dette dont le poids représente quelque 180 % de son PIB. « La question sera quelle est la meilleure forme d’allégement », a-t-il ajouté lors d’une conférence de presse à Francfort.
The question is now squarely on the table. The Eurozone as presently constituted does not work. It either needs to cease and desist or face the challenge of establishing central--and hopefully democratic--political control in place of the unworkable combination of deregulated markets, semi-sovereign member states, and ad hoc emergency arrangements. One of the staunchest supporters of the European project, Jürgen Habermas, has conceded that left-wing critics such as Wolfgang Streeck have a point: "Europe is stuck in a political trap," he says. But he disagrees with Streeck that "a return to nation-states can solve the problem."

I agree. For Habermas,
Such tendencies [toward de-democratization and growing social inequality] can only be countered, if at all, by a change in political direction, brought about by democratic majorities in a more strongly integrated ‘core Europe’. The currency union must gain the capacity to act at the supra-national level. In view of the chaotic political process triggered by the crisis in Greece, we can no longer afford to ignore the limits of the present method of intergovernmental compromise.
Indeed. But Habermas simply skips over the formidable, perhaps insurmountable, political obstacles to achieving this "ever closer union." Doubts about the wisdom of continuing with the European project are on the rise everywhere. The problem of the Greek debt is urgent, but the EU moves glacially when it moves at all. Still, denial of the Merkel-Hollande variety is becoming daily more untenable.

Wednesday, July 15, 2015

The Eurozone Must Change

I don't have time today for a full post, but I just want to reiterate what I said yesterday. Eurozone leaders are patting themselves on the back for having prevented Greece from abandoning the euro. But their "solution" is merely another futile exercise in temporizing, kicking the can further down the road and Greece once again in the gut. The IMF minces no words on the futility of this maneuver, and Eurozone leaders knew this before they forced Greece to sign the agreement:

Dans un rapport publié mardi mais dont les autorités européennes ont eu connaissance le 11 juillet, soit avant que l’accord qui conditionne un nouveau plan d’aide à Athènes ne soit signé, le FMI estime en effet que la dette grecque ne peut être viable qu’« avec des mesures d’allégement ».
Continuing with this denial is madness. It will end badly.

Tuesday, July 14, 2015

Tragedy, Farce, Theater of the Absurd

Even as François Hollande was preening himself in today's 14 July interview on his brilliant role in "saving the euro" ("J'ai dit à Alexis, maintenant, après le réferendum tu es plus fort, mais tu es aussi plus faible"), the IMF was revealing the absurdity of the latest round of extend and pretend:
Greece’s public debt has become highly unsustainable. This is due to the easing of policies during the last year, with the recent deterioration in the domestic macroeconomic and financial environment because of the closure of the banking system adding significantly to the adverse dynamics.
The financing need through end-2018 is now estimated at €85bn and debt is expected to peak at close to 200 percent of GDP in the next two years, provided that there is an early agreement on a program. Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far.
This charade cannot go on. Hollande's participation in it discredits and dishonors him. To echo Matteo Renzi, enough is enough.

Monday, July 13, 2015

Endgame in Greece

It didn't end as I had hoped, but it's important to be lucid about what this episode has demonstrated. European politics will not be the same going forward. I offer some initial thoughts here. The implications for French politics are profound.

Euro wins, Europe loses: From Beethoven's Ode to Joy to Rihanna's S&M

So in the end my faint glimmer of hope was misplaced. It came down to a German diktat, with Hollande sitting in the room probably congratulating himself that he had prevented Wolfgang Schäuble from forcing Greece out of the euro, along the lines I suggested yesterday. But in retrospect it seems clear that Schäuble was prepared to yield on Grexit if nothing else. He got everything he wanted and more. Merkel, when she finally ended her temporizing, proved to be German at heart rather than European.

So the euro is saved, but the euro, it is now clear, is going to be a thorn in Europe's side if not a spike in its heart for years to come. Institutional change is impossible in today's climate of inflamed nationalism. One can even doubt that there is anything left in the European project worth saving. Europe should change its anthem from Beethoven's Ode to Joy to Rihanna's S&M.

Perhaps tomorrow will look brighter.

Saturday, July 11, 2015

An Ingenious Blunder?

As I have written elsewhere, the obvious strategy for Greece in its debt negotiations was to try to split the creditors. This the Greek government failed to do up to the moment of the referendum. The subsequent backtracking from the No position and apparent unconditional surrender made the decision to hold the referendum at all appear to be a monumental blunder. Or was it monumental duplicity? There are some who say that the only reason Tsipras called the referendum was because he expected the Yes to carry the day:
The Greek government and particularly the circle around Alexis, were worn down by this process. They saw that the other side does, in fact, have the power to destroy the Greek economy and the Greek society — which it is doing — in a very brutal, very sadistic way, because the burden falls particularly heavily on pensions. They were in some respects expecting that the yes would prevail, and even to some degree thinking that that was the best way to get out of this. The voters would speak and they would acquiesce.
But what has happened since the referendum is interesting. The creditors have at last been split. Two cleavages are of the utmost importance: between Germany and France and between Schäuble and Merkel.

France has emerged in recent days as Greece's strongest and perhaps only active ally in the crisis. A technical team dispatched from Paris helped draft the Syriza surrender document, which appears to have satisfied the immediate demands of the Eurogroup if nothing else. François Hollande has at last found a voice of sorts. If nothing else, he has made it clear that he would regard a Grexit as a genuine disaster. This puts him at odds with his German Social Democratic counterpart Sigmar Gabriel, leader of the SPD, who wasted no time in saying that the Greek No vote meant that there was no choice but Grexit.

With this declaration, Gabriel aligned himself with Schäuble against Merkel, who is caught in a dilemma of her own making. She does not want Grexit, but her uncompromising position on Greece until now has convinced many in the CDU-CSU that no matter what the Greeks say, they cannot be trusted. Hence even abject capitulation is not enough. If Merkel tries to save the euro by coming to an agreement, she makes herself vulnerable to a challenge from Schäuble within her party and from Gabriel without, but within her Grand Coalition.

Meanwhile, former Greek finance minister Varoufakis, who fled Athens to his island home in order to avoid voting on whether to accept the surrender to the Troika and thus became one of 17 Syriza deputies to abandon Tsipras, claims,  rather bizarrely, that Schäuble's ultimate goal is to intimidate France:
Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.
Of course France and Germany are not the only players. There are other countries, some more recalcitrant than Germany. And there is the IMF, which has suddenly become more vocal about the need for debt reduction as part of an overall settlement.

Can one say that Tsipras's endgame has been an ingenious blunder? It has achieved two things. First, it has moved the debate away from the terrain of economics and into the realm of politics. This of course complicates the picture enormously and introduces many imponderables. But there was always something absurd about having the fate of the European project hinge on a debate about whether hotels on Greek islands should pay a VAT of 17% or 23%. At least now there is scope for removing the green eyeshades and beginning to contemplate the real stakes, even if it also means contemplating the abyss.

Second, it has put Merkel in a position where she can no longer temporize. She always prefers delay to decision, and she has been encouraged in her passivity by Hollande's equal and opposite aversion to choice. But Hollande now seems to have been forced at last to stand firm against Grexit, and Tsipras's blunder may have made it more expedient for Merkel to seek an alliance with Hollande in order to wrongfoot both Gabriel and Schäuble simultaneously. We do not yet know which way she will go, but her place in history will depend on her choice.

Thursday, July 9, 2015

French Cavalry Arrives, Deal in Sight?

The NY Times:
The French assistance appeared to be an effort to make sure the Greek proposal,, submitted just before a midnight deadline, would be as thorough and salable as possible to Greece’s creditors and would smooth the way for a compromise on a new bailout package to keep Greece afloat financially and inside the euro.
“There is a group of people who have been sent to help the Greeks, to try to transform words into action,” said a French government official with knowledge of the effort.
France has been the most steadfast major nation in Europe supporting Greece ever since Prime Minister Alexis Tsipras was ushered in to power in January on a mandate to repudiate austerity. Paris has been particularly outspoken in recent days about the need for a compromise that would help Greece and hold the eurozone together.
Have I been selling Flanby short? He has pulled out all the stops, and, together with Wolfgang Schäuble's concession that debt reduction is possible, we have the makings of a way out of this crisis:
Wolfgang Schäuble, finally gave a little on that Thursday, admitting that “debt sustainability is not feasible without a haircut,” or writedown of debt, even if he then appeared to backtrack.