Thursday, November 12, 2015

Shocks to the European Union

The European Union is facing a wide array of challenges, and not just the blow back from the cracking apart of the Middle East. Several developments this past week point to a series of shocks ahead for the continental union.

First, I should say that I think that the EU is an institution that serves the United States. The way it works is that you create a political union that is subordinate to the economic union, and the economic union answers to Germany. Germany answers to the United States in foreign policy matters. So in a series of short steps you have a huge continent-sized economy that eclipses the U.S. but is politically supine at its feet.

The left has to give up for the time being on its European Dream of progressive government in Brussels. It is not going to happen before several shocks shake the shack.

Shock #1: Anti-austerity government is coming to Portugal.  Despite headlines early last month touting the first-place finish of the coalition of Portuguese prime minister Pedro Passos Coelho as a great vindication of austerity, the conservatives were unable to form a government. Now it will be up to the left anti-austerity bloc, led by the Socialists but also including the long-resistant-to-left-leaning-coalitions Communist Party, to form a government, assuming that conservative president, Aníbal Cavaco Silva, allows them to. He might ask Passos Coelho to remain at the head of a caretaker government until new elections can be held next year.

Waiting until new elections is likely the preferred outcome for the elites who preside over governance in Brussels. Despite the object lesson that Greece was supposed to provide for all the restless natives who didn't wanted to accept a pauperized future of ever-increasing austerity, it is apparent the citizens of another European nation are ready to tilt again at the neoliberal consensus.

As Raphael Minder pointed out last week, "Rising Left Bloc in Portugal Could Threaten Austerity Drive," if the left bloc is successful at forming a government in Portugal, this points the way to a fall of the conservative, pro-austerity Popular Party in Spain:
Prime Minister Mariano Rajoy of Spain, who champions austerity, hopes to get re-elected, but most polls show his Popular Party falling short of keeping its parliamentary majority. That raises the possibility that the Spanish could end up in a similar situation to that of the Portuguese. 
“The Iberian left is forming alliances against those in power and trying to create governments of losers,” said Pablo Casado, a conservative lawmaker who is spokesman for Mr. Rajoy’s Popular Party. “This could also happen in Spain.” 
At the very least, Portugal’s political deadlock has signaled the deep divisions the austerity debate continues to generate. 
“You can have an election where there is no winner, only losers,” said Mr. Cabral, the economics professor. “Which is an odd situation in a democracy.”
Shock #2: Spain Splits Over Catalan Independence. Despite a ruling from the Spanish constitutional court, the parliament of Catalonia is moving full speed to independence. How is that for a shock to the system?

Shock #3: Greece Burns. Today the first general strike directed at the once "great leftist hope" Syriza government shows that Alexis Tsipras' capitulation to the troika bought Brussels maybe six months.

Shock #4: Brexit. Cameron published the list of demands that Conservatives need met in order to support remaining in the EU. Wishy washy and ready-made for fudging is how I would characterize them. The main item garnering attention is reduced welfare payments for immigrants. I don't see how the referendum on remaining in the EU passes.

Shock #5: Walls Go Up. Slovenia is the latest country to erect a border wall in Europe. So much for the promise of an "ever closer union."

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