Friday 22nd June, 2018

Two stories on European follies today; the ongoing Migration saga of Europe, and the Greek ‘debt relief’ agreed on Thursday night. They are contrasting examples of eras of European integration: the latter, the last hurrah for the Merkel style of politics that were seemingly going to shape Europe for decades to come; the former, the new Europe, where Merkel is isolated and intergovernmental agreements can no longer be made to look like they suite everyone’s interests. Both are signs of Europe not working. Both need to be taken in a radical, alternative direction.

 

Pacts, Axes & Festung Europa

MUNICH – The dispute continued this week as Europe’s struggle to come up with an effective and sustainable policy to deal with migration and refugee flows to the continent intensified after further calls came for bold action on the issue or risk the collapse of a coordinated, Europe-wide response. At the centre of the dispute is German Chancellor Angela Merkel and her allies in the ruling CDU’s Bavarian sister party, the CSU. After facing an ultimatum last week from CSU leader and Federal Interior Minister, Horst Seehofer, backed by the 46 CSU deputies in the Bundestag, Merkel came under fire from Bavarian Premier Markus Söder on Friday (22nd June) criticising her in Die Welt. In the comment, he wrote that Merkel had committed a fundamental error in 2015 allowing the German borders to remain open, and demanded a turn around in policy. He further threatened to officially split from Merkel’s CDU if there’s was no change, saying his party “fulfils a mission as a bourgeois-conservative party that extends far beyond Bavaria”.

It is rapidly becoming clear that the idea of a European Union under Merkel’s managerial, schoolmistress-like supervision has almost completely disappeared, and what remains is severely lacking any sense of cohesion. Many now ask whether even Germany will stay under Merkel’s control, which is what makes the threat from Markus Söder far from insignificant. Seehofer’s ultimatum last week came after Merkel refused to accept his plan to unilaterally order German police to turn away asylum seekers who had registered their status in other EU states; given that the German Interior Minister theoretically can put this into action without the backing of the Chancellor, Merkel’s room for manoeuvre has now shrunk to the size of a postage stamp. As of today, she has just over a week to find a deal at the European level on the settlement of refugees, something the Union has been grappling with, despite deals with Turkey and border closures in Hungary and Denmark, since the major waves first hit the Mediterranean shore in 2015. Almost 3 years, most of which time Merkel had more robust support from her parliament and party, in which nothing has been achieved. The resettlement scheme organised by the Commission achieved nothing, the Dublin Convention was not reformed, only more borders closed since Orbán first ordered the erection of a fence on the southern border of Hungary, and now far-right parties are in government in Italy and Austria.

The far-right AfD now threatens to strip the Bavarian CSU of their majority, who are looking at a result worse than 2008 when they lost their majority for the first time in 46 years. In September, the CSU lost 10.5% since the previous general election in 2013, after which they concluded they had left their right flank exposed to the AfD; the result is this desperate attempt to blunt the far-right’s advance by playing their own game. Not a strategy which has shown much success in the past. Regardless, the politics of a regional election in central Europe should be irrelevant – except that now they have the potential to undermine and potentially topple the Merkel Chancellery. Söder’s threat to split from the CDU is no idle threat: an Insa poll revealed this week that in the hypothetical event that the two christian democrat parties did split, the CSU would win 18% of the vote Germany-wide, taking votes from the AfD, and at the same time reducing the CDU to 22%. Were the Chancellor to fire Seehofer to prevent him from initiating his own unilateral national solution, that would surely spell the end of the christian democratic bloc and the governing coalition’s majority

Furthermore, the Bavarian premier met with Austrian Chancellor Sebastian Kurz on Tuesday (20th June) in Linz to reinforce the image of Bavaria working with the Chancellor’s opponents in Europe in demanding a hard line against refugees; only last week after a meeting with Seehofer, the Austrian Chancellor called for an ‘Axis of the willing’ between Rome, Vienna and Berlin (with a detour through Munich) to take a tougher stance on people coming to Europe from Africa and the Middle East. At the same time as the meeting in Linz, Merkel was hosting Jean-Claude Juncker and Emmanuel Macron at Schloss Meseberg outside Berlin, where she agreed to a eurozone budget in the hopes of gaining more support for a common asylum policy with which she could appease the CSU-hardliners. It was followed up by a call for an informal summit of 10 EU states on Sunday by Mr Juncker – typical Merkel, win on one terrain from which she can better direct her fire at her opponents on a different terrain, and thus outmanoeuvre them. However, time it seems is up on ‘Merkelism’ as Markus Söder put it, as she didn’t get a centimetre from them. Instead, Söder criticised her relaxed stance on the EU budget, and Salvini, Italy’s far-right Interior Minister, criticised the draft measures put forward in a statement accompanying the invitation to the informal meeting on Sunday. The measures would make it much more difficult for new arrivals to move around the EU and would hence leave many stuck in Italy, similar to the state Greece was left in after the Turkey agreement was signed in 2016. In a meeting with Kurz’s own far-right coalition partner, Vice-Chancellor Heinz-Christian Strache, Salvini declared that he would reconsider Italy’s EU-budget contributions if the common migration policy didn’t favour Rome’s agenda. He has also threatened to withdraw Italy from Schengen and has ordered the Navy to patrol closer to the Italian coast, leaving the task of rescuing imperilled migrant craft to the Spanish and French flotillas.

All this serves to highlight two things: the undeniable folly of trying to solve this migrant issue nationally; and the utter hollowness of the style of government which is best exemplified by Merkel but is not only practised by her but several statesmen across Europe – intergovernmentalism. Macron is the same – his whole attempt to re-energise the European Project has been approached from the perspective of ‘statesman’. He does not want more common procedures at the EU-level; he doesn’t even support the resettlement scheme, like the Visegrád states. Merkel’s argument to Seehofer why not to unilaterally turn registered refugees away at the border was there should be bilateral agreements in place first so as not to stoke tensions with Germany’s neighbours. But of course in appeasing the one, you find yourself with another problem as this is totally opposed to what Salvini wants from Europe: a more equal distribution of the refugee burden, and failing that, throw hundreds of thousands of people out of the country.

The cruelty and barbarism of this suggestion sets him apart from the rest of Europe’s politicians with the power to decide on this issue. But that is the problem with this mode of decision-making; everyone has the power to decide and no one is beholden to any common law or objective, just what you can promise them and what they’ll offer in return. It is an utterly corrupt form of government – how can we all agree to kick the can down the road and pretend the problem has gone away? How can we avoid doing anything meaningful that will get one of us thrown out of office? How can we pretend we’ve all won when in fact, we’ve condemned hundreds of thousands of people to a state of purgatory and permanent uncertainty. It’s currently happening in Brexit Britain with EU citizens rights, and Britons on the continent aren’t anymore safe either. This happened in Greece. And now its happening to refugees and others trying to come to this continent to build a better life. Instead they’re being met with ‘Fortress Europe’ as all the national leaders abdicate responsibility for the Union as a whole and Europe is powerless to act united. Coincidentally, this term was used during the Second World War to describe the fortification of occupied Europe against invasion by the Western Allies – combined with talk of Axes and pacts, we can’t ignore the further continued descent by Europe

The Merkel method crucially is accepting the European method doesn’t work; we can’t come up with common solutions to a common problem, instead our leaders go into a room to try to work out a way to solve their separate problems in a way that looks like they’ve all won, when in fact no one has. Europe is supposed to allow us to do better than this.

 

Beware eurozone Finance Ministers bearing gifts…

LUXEMBOURG – Europe’s powers that be declared today that the Greek debt programme was coming to an end, 8 years after the first bailout loans were agreed in 2010. The Financial Times reports after a traditionally European summit in Luxembourg with talks lasting into Thursday night (21st June), an agreement for ‘debt relief’ was struck between Greece and its creditors in the rest of the eurozone. EU Commissioner for Economic and Financial Affairs, Pierre Moscovici, declared “the Greek Crisis ends here tonight”. Debt repayments for 40% of Greece’s outstanding loans will be pushed back 10 years, meaning the earliest repayments deadlines will be in 2033. €1bn of annual profits that the Eurosystem makes off of holdings of Greek debt will also be returned to Greece.

As is so often with European politics, grand declarations are made to ensure that people ignore the details which might contradict the political line being pushed. Now most debt relief programmes are composed of several parts – reorganised payment plans are a indeed a part of it, however the purpose of this is supposed to make payments easier and not leave the indebted entity under the same pressure as prior to debt relief – the fact Greece will still be monitored so that it maintains a primary budget surplus (not including debt repayments) of 3.5% of GDP until 2022, and then 2.2% on average until 2060, the date predicted when debt payments will be completed, suggest that the country will not have much of the pressure of debt relieved, it will simply be extended until 2060. The idea of tying further debt relief to the performance of the Greek economy was also left out of the agreement, though not ruled out altogether. But most importantly, the other key component of debt relief, reducing the total debt burden, was not agreed on Thursday. It remains the exact same as before, plus the last tranche of bailout money to be released before the programme ‘ends’ on 20th August. Yanis Varoufakis tweeted this morning “Congratulations, comrades. They extend our bankruptcy until 2060 and you celebrate the debt viability.” In another tweet “Europe’s descent into greater denial is in full swing. They extend the Greek state”s bankruptcy into 2060 and they call it debt…relief.”

So what this constitutes in simple terms is just another case of extend and pretend, except this time with less fireworks as everyone has forgotten about the matter in Brussels and Berlin and no one would like to be reminded of it. One 6-hour round of talks on a Thursday evening in Luxembourg, just in time to make it home for the weekend to watch Sweden get trounced by Germany in the World Cup (we assume, though nothing is certain these days). One giant kick of the can down the road, much further than anything else so far, or so they hope. What this isn’t is a sign of success for anyone – for Germany, for Europe, for Greece, for the SYRIZA government in Athens. With 3.5% primary budget surpluses for the next four years, the stranglehold will be maintained on the Greek economy. Eventually, it will become clear that the Greek debt burden has remained just as large and as real as it was at the beginning of the crisis. But now Europe must turn its sights away from puny Greece to much larger problems, as the death-blow dealt to solidarity during this 8-year Greek tragedy now has terrible consequences for the rest of Europe, in that Germany’s trade surplus is now reaching excessive levels, Italy’s economy remains stagnant, migration and refugees is a common issue which no one seems interested in finding a common solution to and the era of wheeling and dealing intergovernmental diplomacy where we all just want a communiqué to present to the press and go home is over. Merkelism is over. Unlike what Martin Sandbu seems to want to see in the meeting at Meseberg on Tuesday, no, the Franco-German motor is no longer revving up because it can no longer carry the rest of the Union along with it as it used to by sheer diplomatic weight and momentum. We are no longer living in the Chancellor’s Europe, and it’ll all come crashing down on us if we don’t try to build a new one democratically and openly, and don’t stop pretending that things are going to go back to the old days if we just wish it enough.