tag: Europe



2
Jun 2017

President Trump and the Paris Accord

I watched Trump’s inauguration with a mixture of disbelief and dismay. It was a strange event and occasionally even a little alarming.

At one stage a TV evangelist (Cate Blanchett will play her in the movie) recited a prayer that wove biblical verse and US Manifest Destiny into a heady brew of Blessed Exceptionalism. I briefly toyed with the image of her stepping back from the podium as two flunkies wheeled the Ark of The Covenant on stage… retrieved from that big warehouse at the end of Raiders of The Lost Ark. She defied my expectations on that, but she was immediately followed by a choir that appeared to be deliberately alluding to The Omen movies.

OK, so I enjoy hyperbole as a rhetorical device perhaps a little too much for my own good, but in reality I tend to be a good deal less alarmist than the stuff on this blog might suggest. I see our civilisation as ultimately doomed of course. So there’s that. But I also see it for the leviathan it is. We’re like a supertanker, and our colossal momentum propels us forward even though the engines have been on fire for a few years. I kind of expected it to continue that way for a bit longer.

The Irish banking fiasco, Brexit, the Syrian crisis… some of these events may be symptoms of an ongoing collapse, others just episodes in history’s unfolding tapestry whose origins will be argued and speculated though perhaps never understood. But none of them are going to usher in the end times, right?

Which brings us back to President Trump. This is — to use the parlance of our times — not a good guy. He’s a bad guy. A Real Bad Guy. The worst. THE worst. Sad.

I promise that’ll be the last time I lampoon Trump’s oration in this post. It’s a little too easy. I confess, I’ve never read “Art of The Deal” (note to self: I really should). But I feel certain there’s a chapter in there discussing public speaking and it includes nuggets of wisdom like “Use short, simple words” and “Repetition can be effective”.

Anyway, here’s the thing. I don’t expect everyone to agree with me on this, but I think we’re past the point where Trump is a weird joke, we’re past the point where he’s Americas’s problem, we’re even past the point where he is an annoyance or a hindrance on the world stage. The United States, under President Trump, has become a very serious and very pressing problem for the entire world. Pulling out of the Paris Accord is an act of such… gah!

… I want to use words like “existential threat” or “clear and present danger”… but those phrases pop up and people think you’re being unnecessarily hyperbolic.

And I’m not for a moment suggesting that the Paris Accord would have “fixed the problem”. Even if it was strictly adhered to — which it probably wouldn’t have been. It would not have averted Climate Change (a multi-century process already underway). But it formed a platform. A reminder that collective agreement could be reached, and a template for future attempts at it. It was a minimum point at which the entire planet could gather. A base-camp from which to forge forward. If the dude who owns most of the tents and the cooking gear decides to go home in a sulk? Well, you may as well cancel the expedition.

I have no idea how that metaphor got to where it did. Makes no bloody sense by the end. Still, my point is that effective action to limit Climate Change must now be put on hold. At least until the Americans rejoin civilised society and/or consensual reality. Not saying those two always overlap, but either will do right now.

We can imagine best-case scenarios where the rest of the world continues onward — even redoubling our efforts to compensate — and America swiftly rejoins us after Trump’s impeachment in December.

But we can also imagine the next few weeks being punctuated by announcements from Saudi Arabia, Russia and the Philippines, that after careful consideration they too have decided to withdraw. This provokes a complete breakdown of faith in the agreement and it’s another decade before we even get everyone around the same table on this issue. By which point the militarisation of southern and eastern Europe has begun in a desperate response by populist governments to the tens of millions of Africans and Central Asians fleeing the devastation of the places that once sustained them (Climate Change is going to hit those places first and hardest — places that have been politically and economically screwed for the past century are about to be given a whole other sort of kicking). Meanwhile topsoil depletion, drought and catastrophic land management decisions in China force a massive State of Emergency and tripartite tensions between China, India and Pakistan result in… … …

Well. See that’s the thing about Climate Change. Words like “existential threat” or “clear and present danger”? There are issues where they aren’t hyperbole. This is one of them.

Climate Change is no longer a binary possibility. It’s happening and it’s become a question of how much? How severe? Even small differences in the answers to that question can equate to huge amounts of human suffering. International cooperation is surely the best way to minimise that suffering… to adopt a united front against a problem that faces us as a species… as a biosphere.

And so. To turn your back on that is a grossly profane act. Whatever the hell the word “immoral” means; if it doesn’t cover this, it’s not a useful concept.

In a sane world, the United States would be hit with an active trade embargo until it returned to the fold. This sovereign individualism go-it-alone schtick only works when you’re not shitting in the village well. So long as you do that, you’re everyone’s problem and you need to be made aware of that. Trump should have his personal assets seized, just as we would do if it was a Liberian or Angolan president threatening the stability of others. He should be prevented from all foreign travel and all diplomats should be withdrawn from the US. All US embassies should be closed. The United Nations should collectively relocate to Beijing or Berlin (or wherever we think it would most annoy Trump) and we should send one bloke to sit in the UN building in New York with a pen and a copy of the Paris Agreement.

Soon as we get a signature, it all goes back to normal.

Sure sure, most Americans, even the liberal ones, will bristle at that suggestion. How dare anyone tell us what to do! US culture insidiously promotes exceptionalism to the extent that it’s a part of the fibre of anyone growing up in America (just like Catholic guilt burrows to the heart of every Irish person even if they’ve never gone to church, and the most militant British anarchist still unconsciously views the world through the prism of class stratification). It’s just in us because it’s the water we’ve spent our entire lives swimming through. We can’t help it.

But in this case, dear Americans, you can shove your exceptionalism right where you think this sentence was going to end. You’re shitting in our goddamn well. Stop it right now!.

2 comments  |  Posted in: Opinion


8
May 2017

Again with the lesser of two evils

Let’s be clear, I’m ecstatic that Le Pen lost. Thank you France — you did a great thing. And if I’d been in France (and eligible to vote) then I too would have cast my ballot for Macron. I would not have abstained; but nor would I have felt entirely happy about it. Certainly he would not have been my choice in the first round (or if Macron had been in the final round with almost anyone else). But compared with Fascist Frexit-loon Le Pen? It really wasn’t a choice.

And again, let’s be clear… I adore the little Climate Change video that Macron made…

There’s a lot to like about him. Certainly when you compare him with many of the other politicians astride our global stage here in darkest 2017. And yes that’s a pretty low bar — but it’s the one we’ve got right now, so whaddyagonnado? He seems, on the surface at least, to be semi-rational. And he’s not entirely unintelligible. These shouldn’t be praiseworthy things for the newly-elected leader of a major nation. But heigh-ho. We are where we are.

Incidentally, the way he pronounces “engineers” in that short video is awesome and doubtless will cause a chuckle or two. But I still maintain that… in his non-native tongue, he managed to deliver an eloquent and coherent message in a way that two minutes of Donald Trump or Theresa May speaking, in their native language, generally fails to do these days.

And yet, he’s still a guy I would only have voted for as (much) the lesser of two evils. Despite his ‘upstart’ image, he remains firmly a centre-right, free-market, capitalist, business-as-usual, establishment politician. Of course that’s better than a bloody fascist and anyone who says otherwise needs to rounded up, starved for several months and then gassed.

See what I did there?

I don’t really think that should happen to anyone of course. And it pains me that I need to explicitly state that. But if we are to have concentration camps, then I do think they should be filled exclusively with people who vote in favour of concentration camps. Everyone else gets a pass.

But all the same, I personally don’t think a centre-right, free-market, capitalist, business-as-usual, establishment politician is what we really need right now. Macron and Le Pen would both be part of the general global tendency towards driving our collective society off the edge of a very tall ecological cliff. Sure, I’d much rather spend the journey in Macron’s bus, but ultimately they both end in a flaming pile of twisted metal and sinew.

As it happens, in my heart-of-hearts, I don’t think we’re going to apply the brakes at this late stage. Hell, we may already be over the edge and just not aware of it yet.

And yet, my hope — do I still have one? — is that the French Left somehow use this to galvanise support. “Let’s not boil it down to a choice between a banker and a fascist next time!” Translate that into French and put it on a million leaflets. And I hope they join with the left-wing and the greens and the anarchists and the pacifists and the quakers and the scientists and the poets and the holy ones… across all Europe. I believe we need to develop a truly pro-European and pan-European alternative to the economic inequalities that face our society. Isolationism, Brexitism, MAGAism, nationalism… these are not the answers. Leastways, they’re not the ones I’m looking for.

But nor (certainly in the long term) is the brand of unsustainable corporate capitalism that ultimately has led to a situation where fascists are polling 34% in France.

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29
Nov 2016

The European position on Brexit

Just a quick one — but too long for twitter.

I’ve been reading a bunch of UK news stories about that “having cake and eating it” note. The note is irrelevant, but all of the news stories about it — in fact almost all of the UK news stories about Brexit — appear to be framing the impending negotiations in completely the wrong light.

boris-johnsonBrexit came as a shock to me. I suspect it came as a shock to most people reading this. But I believe there is a general consensus (even among Brexiteers) that the UK decision to leave was at least as much a political / cultural decision as it was an economic one. Certainly, many in the “Leave” camp would argue that the UK stands to be better-off, economically speaking, as a result of Brexit. I personally doubt that very much. But whether or not that might be true; it’s reasonable to say that political and cultural concerns played a part in the vote to leave.

However, the negotiations are being framed — by most UK media — in purely economic terms. At least from the European side. The media is well aware that British politics is going to shape the British position (whether or not free movement of people can be sold to the British people in the current political climate, should it be the only way to salvage access to the free market) but they seem to cast the European position as either being purely about balance sheets, or at best in terms of the internal politics of a particular nation (how will the current French election campaign affect Europe’s position, etc.)

What is being overlooked is that the negotiating team from the European side will not bring with them the politics of any specific nation. They will be tasked with getting the best deal for Europe. Yes, economics will take primacy as it often does. But the institutions of Europe will also bring their own very definite political agenda to the table. And that agenda will be to make the British option — leaving the EU — as unpalatable as possible to others.

The UK vote has created a huge amount of instability within Europe, at an already unstable time. The EU’s negotiators* will not be tasked with “getting the best deal for both sides”, though that will be the public stance of course. They will be quietly tasked with getting the best deal for Europe in a way that makes the entire thing look like a gigantic mistake for Britain. And ultimately I don’t think that’s going to end well for anyone.

* perhaps with the exception of any negotiator with an Irish accent, who will be desperate to make the process as smooth as possible thanks to the chaos a hard-border might cause us over here

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21
Apr 2015

Syriza demands war reparations

For a little while now the Leftist government in Greece, led by Syriza and most visibly represented by Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis, has been raising the issue of “German war reparations” whenever the Greek financial crisis is discussed. Up until now however, they had not proposed a figure. A few days ago they got down to brass tacks and suggested €279bn might be fair.

SyrizaOn facebook feeds and web forums I’ve seen a surprising number of people suggest that this somehow represents a “distasteful” strategy. That it’s somehow “below the belt”. So-called moderate leftists have been tut-tutting this apparently shameful behaviour and suggesting Syriza need to retreat to the centre, agree to EU/IMF instructions and calm the hell down. And it’s not just on social media you hear this… the bloody Guardian is full of these “moderate leftists” attacking Syriza. Going so far as to wonder aloud as to whether Greece’s Left is falling under the spell of Moscow. Yes, that is Britain’s flagship “left of centre” newspaper whispering “reds under the bed!” ominously in your ear. God only knows what the Mail and the Telegraph are up to.

There are two things to be said about left-wingers who call for Syriza to return to the centre… firstly, they are totally misreading the situation in Greece which is on a real knife-edge. And secondly, they are – unwittingly – calling for a course of action likely to produce a sharp swing to the far right in southern Europe. At best it’s an ignorant centre-right position. At worst it’s a bit more sinister than that. It’s certainly not “left wing”.

There is genuine concern among many Greeks about the volatility of politics there right now. By and large no modern democracy actually wants to be in a position where they are forced to vote for “a radical solution”. That almost always means something has gone terribly wrong and the safe, conservative, quiet middle ground is no longer working for some reason. And that’s the situation in Greece right now. The country is on the verge of economic collapse (in the sense of there being no money in the banks and no bread in the shops; not in the sense of middle class Greeks being unable to afford a second holiday this year). And the reason for this is two decades of centrist corruption, coupled with the subsequent European banking crisis.

If you’re one of the army of unemployed graduates in Greece right now, you’ve lived your entire life under a centre-left/centre-right political class which actively falsified national accounts at the behest of wealthy oligarchs who refused to pay tax. What’s more… pretty much everybody knew it was happening. Corruption was endemic and both the far left and the far right were shouting about it. But so long as the status quo permitted the Greek government to generate ECB credit; it was ECB policy to encourage it to continue.

And then, surprise surprise, the whole thing collapsed. The European financial institutions acted shocked (just as they did when the Irish property bubble burst… because that was never going to happen, right?) and demanded that the people of Greece be punished for the sins of their corrupt government. Try to remember… it was ECB policy to offer limitless credit to idiotic Irish property developers based on absurdly inflated valuations. And it was ECB policy to offer limitless credit to a corrupt Greek oligarchy (via the Greek Central Bank). I find it mystifying that so many people have bought into the idea that the citizenry of those countries be held responsible for the reckless debts and corrupt behaviour of a few private individuals and institutions.

And that, of course, is the point being made by Tsipras when he demands German reparations. This seems to have gone over the heads of many (or else they are wilfully ignoring it). He’s a pretty smart guy and he knows he’s not going to get any war reparations. He’s merely publicly highlighting a vast discrepancy… how the German people were supported after their government betrayed them, and yet the Germans (who are the principal drivers of European financial policy) are demanding the Greeks be treated entirely differently. It is not distasteful to point out a very relevant double-standard.

When a government betrays its people and rips the nation apart, the international community can offer a Versailles Treaty or a Marshall Plan. It was literally the single most obvious lesson of 20th century history, and we – quite staggeringly – appear not to have learnt it. (Hint: The Marshall Plan turns out better for absolutely everyone involved)

Tsipras and Varoufakis are walking a tight-rope. The IMF/ECB intervention was not working in Greece. The situation didn’t need “adjusting”, it needed a new approach. In Ireland austerity is biting very hard, but the fact is – life in Ireland today is still considerably better than it was for most of the past half century, so people have adjusted. It rankles that we’ve accepted this debt with so little resistance, but that’s how it went.

In Greece though… circumstances are very different and the country has been decimated by the policies imposed by the troika. In 2005 Greece had the lowest suicide rate in Europe. Today it has the highest. Let that statistic sink in. Seriously. Think about how radically a society must have changed for that to have happened… think about how socially damaging the policies of the troika have been to result in that outcome. Nobody can be happy when unaccountable international financial institutions are laying waste to their society. And nobody can be happy when all of their mainstream political parties have accepted this situation and speak almost casually of “a further 10 years of austerity”. Those are precisely the circumstances in which nations are stirred to seek “radical solutions”.

So of course the Greeks have looked for an alternative. To do otherwise is literally suicidal.

The policies currently being imposed on Greece today are very similar to those imposed on Yugoslavia in the 1980s by the IMF (under the behest of a rabidly anti-socialist Reagan administration). Are we really dooming ourselves to walking that grim path again? Golden Dawn are unlikely to ever gain a popular mandate the way Syriza did… but the Greek people will not quietly trudge back to the centre ground if Syriza fails. They can’t afford to. And if Syriza fails, if the current government collapses, it is very possible that a right wing coalition will find themselves requiring the tacit support of Golden Dawn in order to hold power. And once you let fascists into government, even in an unofficial capacity, it can be pretty tough to get them out again.

I believe that Tsipras has one card – and one card only – he needs to somehow stall the EU and the IMF until the Spanish elections and hope (against hope) that Podemos somehow do in Madrid what Syriza managed in Athens. If that happens, it’s just about possible that a leftwing bloc within Europe, strong enough to demand policy change, could emerge. Very unlikely but it’s really their best bet (and I suspect they know it). Hence all the delays and stalling and missed meetings and “promises to review”. Also hence the demands for war reparations. It’s a stalling tactic*, but one with bite, and one with a real point to make.

Those calling for Syriza to fail in Greece (and right now, a call for a return to the centre ground is a call for their failure) are either hoping for a hard-right government or – at best – another decade of the Greek people watching the elderly kill themselves because they can no longer afford their medicine, and young men kill themselves because they see no future in a country where youth unemployment has now passed 50% and is still rising. The Greek people don’t deserve what’s happening to them. It’s crushing them. And it’s business-as-usual centrists… moderates… that are doing it and insisting upon years more of it. So the only real choice facing Greece right now is “left” or “right”?

Those who want the left to fail should – in this instance – be very careful what they are wishing for.

* I also think the logistics of a rapid switch to the New Drachma take a while to put in place so every day they can stall is an extra day of preparation (if Tsipras hasn’t got a warehouse full of newly-printed banknotes and a fleet of trucks on stand-by, he’s not as smart as I think he is).

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17
Dec 2014

Low oil prices – a threat to the dollar

I’m on an email discussion list that includes a bunch of people in the oil industry. On an average day the ratio of shop-talk to global conspiracy stuff is 10:1… and really, there’s only so many times you can read the same impassioned arguments about the merits of different fluid injection methodologies. But every now and then a discussion about a wider political issue gains traction. By and large these are sober, conservative (small ‘c’) engineers not taken to flights of fancy. So when they start saying things like “there’s only a 60% chance the US dollar will still be a viable currency in 18 months”, it piques my interest.

For the past couple of months there has been an almost complete consensus among these people that the Gulf States are driving down the price of oil in order to destabilise Iran. There’s even a guy who – having spent some time chatting with a staffer in the UAE oil ministry – claims that Saudi Arabia, Kuwait and the UAE are targeting $40 per barrel by the middle of 2015 and they intend to keep it there for a year.

As an aside, I read a message from a guy who said he expects 5 year oil futures to drop below $85 any day now. That there… that’s as close to a sure thing investment as the modern financial industry is capable of. What’s more, given the short-sightedness of the financial industry, I wouldn’t be surprised if you could buy November 2020 oil futures for less than $70 by this time next year. Pretty crazy.

Anyway, there’s no doubt that Iran’s economy is utterly buggered if this continues for much longer. Even if the $40 for a year thing is exaggeration, this is presenting Tehran with very serious problems.

Thing is, Iran isn’t the only place this is hitting hard. The Gulf States can weather this storm, but almost no other major oil exporter can. And while oil importers are quite enjoying this period of temporary price-fixing, places like Venezuela and Nigeria are suffering. The fracking industry in the United States is also in trouble (though this price drop is only one of the reasons for that) but America isn’t too worried about that because they like seeing the squeeze put on Iran, while the damage being done to the Russian economy is being seen – curiously enough – through the lens of Ukraine, the Malaysia Airliner disaster and what’s being viewed as Putin’s increasingly aggressive stance towards the west. So the Americans are offering their explicit support to the Gulf States in order to put Russia under pressure.

Now, let’s be under no illusions here… Putin is a dangerous man. I’ve noticed more and more western liberals buying into the Russia Today narrative and viewing Putin with a kind of grudging, “enemy of my enemy” respect. Which is madness, because this guy should be viewed as at least as big an enemy as western capitalist imperialism. Anyway, it’s simply inconceivable that Russia won’t respond dramatically to this very real threat to their national economy. And what response will that be?

Well, according to the mailing list people, Putin is getting ready to announce a major shift in policy. Early next year he will be switching all of Russia’s petroleum trading to roubles. That’s what they’re saying on the grapevine anyway.

A lot of people – even economically literate ones – don’t fully understand the important link between the US dollar and the global oil trade. The pricing of oil in dollars isn’t just a matter of convenience. All trade in oil actually takes place in dollars. Dollars get exchanged for oil. Not euro, or roubles or yen. This ensures a constant demand for dollars as anyone who wants oil… i.e. everyone… needs to buy dollars before they can buy that oil.

Not sure if you’ve noticed the huge collapse in the value of the rouble in the past week? And the huge Russian interest rate hike? Well, according to some people Russia has deliberately torpedoed their currency in order to buy back roubles, from anyone who has them, at a bargain price. Because if Putin goes through with this and demands roubles in exchange for oil and gas? He will instantly make the rouble into a European reserve currency. Demand will rocket and the dollar flight will begin.

Unlike other countries, the US will not be able to intimidate Russia into backing down on this. Especially given the huge hardship being caused to Russia by this US-supported Gulf strategy. And if it turns out to be a success for Putin (which I think it will do) then there’s really nothing to prevent other countries doing the same.

The Saudis, with the support of the US, are playing a very risky game right now. And one that could result in the end of the dollar as global reserve currency. Sleep tight.

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14
Nov 2014

Oil at 80 dollars

Those who keep an eye on such things will know that something very strange has been happening with the oil price over the past few months. Saudi Arabia, Kuwait, Qatar and the Emirates have been aggressively driving down the price of oil (and have just signalled their intent to continue doing so). This fall has not coincided with an equally precipitous drop in demand, and it is not – except tangentially, in a manner I’ll discuss in the fifth paragraph – related to the “unconventional oil” coming out of America thanks to the fracking boom. That whole fracking thing is smoke and mirrors of the first order by the way.

No, what’s happening with the oil price right now is geopolitical. What’s more, it heralds an era of increased geopolitical tension.. something that’s only starting to filter through into the mainstream. There’s a big wake-up call coming folks.

What do I mean when I say the price drop is geopolitical? Well, it’s important to understand that when it comes to oil, the Saudis (and the other Gulf Kingdoms) are very astute. Right now they possess a large enough share of the oil export market to effectively drag the global price any direction they choose. And this has a massive effect on the global economy. However, it is extremely unlikely they will still possess this influence in 20 years (even 10 years from now there’s no guarantee). Based on depletion profiles that they take very seriously (even if the western media does not), they will never possess as great a global influence as they do today.

Saudi Arabia is taking the lead on this, and is being backed by Kuwait and Qatar (with the United Arab Emirates a more reluctant fellow-traveller… this hurts their economy more than it hurts the others for a bunch of reasons). It’s important to realise that it is not an OPEC thing. In fact… OPEC is bloody furious. And with good reason; a number of OPEC nations are going to end up as collateral damage in all this (Venezuela and Nigeria are both being crucified).

Russia is also feeling the pinch. And the fracking boom in America is being hit very hard. That entire industry is a pipe-dream. It can only exist thanks to massive government subsidy in tandem with a very high oil price. Both of which can be arranged, it’s true, but more importantly… there just isn’t as much of it as has been suggested. Nowhere near as much. And ramping up production to cover the drop in conventional crude production simply isn’t going to happen.

Now, it’s unlikely the Saudis are willing to take such a large economic hit themselves simply to undermine the US fracking industry. That Financial Times article suggests that the low price could put a strain on US / Saudi relations, but as an overall economy the United States benefits from a low oil price. So I don’t see that being the case. Besides which, the US and Saudi Arabia are firm allies and they share a common enemy… Iran.

The real reason the global oil price is low* right now is because Saudi Arabia is waging economic warfare on Iran.

When a country gains a large proportion of its income from oil exports, it is possible to calculate a “breakeven oil price” for that country. That is, the price at which they must sell oil to cover government spending. Different economists tend to come up with different numbers (no surprise there) but if you see them as a guideline rather than an absolute value then they can be illuminating. CitiGroup say Saudi Arabia’s breakeven number is $89. The IMF says it’s $80. Deutsche Bank say $78. So you can see that having oil down below $80 per barrel is going to hurt the Saudis, but it’s something they can live with – this is not a nation that finds credit hard to come by. Qatar’s down in the mid-70s. While Kuwait’s breakeven is between $54 and $75 depending on who you listen to.

Not so Iran. According to CitiGroup they have a breakeven price of $130. The IMF suggests it could be as high as $140. And if you hear an analyst on the news try to explain the current fall in oil prices in terms other than an outright economic assault by Saudi Arabia against Iran, they simply do not know what they’re talking about. Because this is shattering the Iranian economy. It’s also giving a proper kicking to a bunch of other oil exporters. Nigeria and Russia both have notional breakevens above $110 and Venezuela is right up there with Iran when it comes to exposure to low oil prices. As for Iraq… if the country is to have any chance of surviving as a united entity it needs a reliable income stream, and with a breakeven price around the $100 mark, it doesn’t have that right now.

The effect on Russia is particularly concerning, especially if you’re a European like me who has just witnessed Putin sign a contract to sell a whole bunch of gas to the Chinese and can see the spectre of European gas shortages should this looming Cold War escalate (when the normally taciturn Finns start complaining about something, it’s a good idea to listen). The notion that “they need our money as much as we need their gas” has simply never been true (the Russian capacity for belt-tightening far surpasses the capacity of European governments to survive power-cuts and cold winters… so European governments will always cave first). And it’s especially not true now when the Asian economies can provide an alternate source of income. Falling oil prices puts additional pressure on Russia and is likely to drive Putin towards a more aggressive foreign policy (in my view).

But Iran is the target, and while nobody outside Gulf aristocracy knows how long they plan to keep up this assault, it is likely to only be the first in a series of oil price manipulations over the next few years. And as a result, we’re likely to see the kind of geopolitical brinkmanship that has the potential to end very very badly indeed.

* Incidentally, describing $80 as a “low” price for oil would have been dystopian madness just a decade ago.

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2
Jul 2013

Free Trade, Subsidies and the CAP

There’s a post over at the Liberal Conspiracy blog that’s getting a bit of attention today. It’s called Why are UKIP silent supporters of the biggest EU rip-off of all? and it is primarily an attack on the hypocrisy of the UK Independence Party (UKIP).

UKIP, it seems, are quite unequivocal about their support for the European Common Agricultural Policy (CAP) and wish it to continue making large payments to farmers. And yes, given the stated aims (and general attitude) of UKIP, this does represent an interesting hypocrisy – one that appears to demonstrate UKIP’s allegiance to class above principles. Whether you agree with the principle of the CAP or not is irrelevant; it clearly represents a centralisation of power in Europe. Dishing out almost 50 billion a year makes it powerful. It’s enough to torpedo the economy of a small nation after all. The CAP should be against UKIP principles. They should be lobbying hard for its abolition (even if they believe food production should be subsidised, they should surely want it done by the UK government).
CAP
That they are not lobbying for the abolition of the CAP may well be because the CAP currently benefits, to a disproportionate degree, those who least need it… the wealthy. Where small farmers are being supported by the CAP – and yes it does happen – the argument is more fuzzy, but when the 8th richest man in Britain is being subsidised by the citizens of Europe to the tune of almost a million euro per year, clearly something is wrong with the system. The benefits – to the citizens of Europe – of giving a million euro of their money to the Duke of Westminster is surely vastly outweighed by the benefits of giving 100k each to ten struggling small-hold farmers. If you’re going to spend limited funds on subsidising food production, then do it properly. Otherwise just be honest and call it by its real name… theft.

The ultra-wealthy have gamed the system, and they have bought the support of – not the individual political parties, though they come with it – but the entire modern mainstream political system. Which is why a political party that all but defines itself by its opposition to European power can support those aspects of European power that unambiguously redistribute wealth from the bottom and middle to the top.

But what about The Principle of The Thing!?

Yes indeed. The principle of European food production subsidies… what about it? I have heard right wing ideologues argue that the CAP represents a distortion of the free market and should be abolished entirely. I’m not going to address that argument right now. The people who make it are fools. The citizens of Europe can distort the markets any way they damn well please. The citizenry is not subject to the market. It is subject to them.

On the other hand, there is the “global development” argument against the CAP. The Overseas Development Institute (anyone know how reliable these people are? I have a basic distrust of organisations that call themselves a “leading think-tank”, and an initial flick through their website revealed an awful lot of fluffy management-speak and PR waffle, but very little of substance) published a short paper in which they argue that the CAP could be damaging agriculture in “developing” countries. And while they admit that the damage can’t be quantified without further research, the fact that the CAP budget far exceeds the annual total value of African food exports does give a person pause for thought. And when you couple that with the fact that the African continent is a net food importer, you can’t help but think that the CAP might be giving European farmers an advantage that their African counterparts simply don’t have access to.

And while the sophisticated right-wing ideologues might claim that’s actually a restatement of their argument, they’d be wrong about that. One argument states that “distorting markets is primarily wrong, because free markets are in principle the best way to run things”. The other argument states that “distorting markets is not necessarily wrong, but in this specific case it may be because it might be causing some people to go hungry”.

The latter is a valid argument. The former is a dangerous delusion.

The trouble is though, I think the latter argument is a good deal more complex than it appears to be… as is so often the case. And this additional complexity gets lost when people on the liberal left shout about starving children in Africa and people on the neoliberal right insist that everything would be so much better if we’d only allow the market to be free*.

Of course, first there’s the issue of just how much of the CAP actually goes to the already wealthy. I genuinely doubt that the Duke of Westminster’s land is any more productive than it would be if he wasn’t receiving that million euro prize from Europe’s citizens for owning so much land. And realistically, I doubt he’d need to charge any more for his produce if he wasn’t receiving that money. If anything is distorting the market in the case of the Duke of Westminster, it’s his own vast fortune. A free-market argument for high wealth taxation? Not that they’d ever admit it.

So there’s that… if the CAP is truly an instrument of wealth redistribution within Europe (from poor to rich) then it’s unlikely to be affecting global trade all that much. Which, weirdly enough, suggests that those most concerned with overseas development may well want to abolish the CAP, but if that is unachievable then at the very least prevent any reform from which the European citizenry could derive benefit.

Here’s the thing though… I feel strongly that the CAP should be reformed precisely with that goal in mind. And yes, even if that distorts global markets. This probably puts me on the opposite side of the fence to almost everyone discussing the CAP right now, bar small scale farmers (of which I’m not one, by the way), but fact is, I’m not a supporter of the principle of global free trade. I believe very strongly that the essentials for life should be produced as locally as possible. Yes, the scale of modern population centres makes that vastly more difficult than it’s ever been. In some cases, impossible – the island of Britain would probably have some difficulty feeding itself if all food imports were to stop tomorrow for example. But that doesn’t mean we should abandon the principle completely.

Food shortages and poverty in large areas of Africa and other “developing” countries need to be addressed as a matter of urgency. But it should not be done at the expense of European self-sufficiency in food. Let’s everyone get self-sufficient and then we can trade our surpluses in a sustainable manner; I have no problem with that. But if subsidies help ensure food production thrives in Europe, then that seems like a damn fine use for our collective wealth. Of course, we need to ensure the subsidies are targeted at those smaller farmers to whom it would make the biggest difference. Giving our money to multi-millionaires is just bloody stupid. And I hope it goes without saying that we should also be helping our global neighbours achieve thriving and sustainable food production for themselves. It’s just so important on so many levels.

Helping others achieve sustainable self-sufficiency is a moral obligation. Ensuring we achieve it ourselves is just basic good sense.

* I can actually recall using the “but there’s no market for starving children” argument back when I briefly dallied with libertarian capitalism in my teens. As a political philosophy for a grown adult, it’s a distressing state of affairs… but it’s a useful enough way-station on the path to a fully rounded intellect I guess.

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27
May 2013

Even the ‘centre left’ is on The Right

A little while ago I put together a graphic as a metaphor for just how much the political spectrum has shifted (specifically in the western liberal democracies) over the past few decades. This shift wasn’t started by Thatcher and Reagan, but they – and those who followed them – did most of the heavy lifting. The result of this shift was to effectively exclude the left-wing from mainstream politics, so that today, those who would once have been viewed as being centrists, are now the hard-left. Views that would label one as a moderate left-winger in the 1960s would – in the opening decades of the 21st century – place one firmly in the radical communist camp (and as such, essentially irrelevant when viewed from the mainstream).
Modern political spectrum
In my view, this shift has been tremendously damaging to the societies in which it has happened – and to western civilisation in general. By narrowing the discussion, we narrow the possibilities available to us. The result is a significant reduction in the amount of flexibility* within our culture. Thatcher, Reagan, their acolytes and fore-bearers quite rightly must shoulder a large proportion of the blame for this loss of flexibility and consequent social damage. But the blame does not lie entirely with them. Indeed an argument could be made that their role in this political shift was less influential than that of the leftists and centre-leftists who allowed themselves to be dragged – or in many cases, who willingly stepped – to The Right.

And the fact that – for example – the Labour Party in the UK can still be described as “left wing” in the mainstream media demonstrates just how insidious this shift has been (it’s “the country’s leading left-wing party” according to The Guardian; a supposedly “left-wing” newspaper). This is despite the fact that some members of the Labour Party have denounced unions for “exert[ing] excessive left-wing influence” (source). At the same time, the party talks openly of its plans to “rescue capitalism” (source). When rampant capitalism plunges the entire world into major crisis, anyone who is genuinely “on the left” would be talking about ‘a new socialism’ or asking ‘how do we replace capitalism with something more just and sustainable?’ If your priority is to “rescue capitalism” then you are “on the right”. To suggest otherwise is ignorance. Or it’s propaganda.

Meanwhile, across the Irish Sea…

This shift to the right has, of course, not been restricted to a few places. Certainly there are exceptions (often significant ones… most notably in South America), but as a general rule it has swept across the globe and infected almost all so-called “liberal democracies”. Ireland’s socialist traditions were savaged by the Celtic Tiger, and the speed with which our own Labour Party dashed rightwards was undignified in the extreme. They almost kept pace with Tony Blair… and that’s saying something. Strangely enough though, our media appears to be slightly more perceptive than that of our British cousins, and it’s quite difficult to track down a recent example of the Irish Labour Party being described as “left-wing” in the mainstream media. Nonetheless, they are still described as being “centre left” by most political commentators and are still members of Socialist International and the Party of European Socialists.

This ill-informed nonsense really needs to be challenged. When a member of Labour (or indeed one of their critics) describes the party as being “left” or “centre left” they should be robustly lampooned for the sheer absurdity of their utterance. They should be viewed in roughly the same light as a spokesperson for the North Korean regime who insists on describing the nation as the “Democratic People’s Republic”. Sometimes labels are important. And when the Irish Labour Party talk about being “a centre left alternative” they not only make a mockery of our public discourse, they actually damage the political fabric of the nation. How can people – especially younger people who have grown up with this new political spectrum – possibly understand political reality, and hence make sensible use of their political influence, when identical policies born of rampant capitalism are labelled centre-right by one party and centre-left by another?

The Irish Labour Party was formed by James Connolly, William X. O’Brien and James Larkin… genuine revolutionary socialists. When I see the modern Labour Party’s annual Connolly Commemoration, it’s difficult to hold down the vomit. There’s a lot of “comedy of dubious taste” that I will admit to finding amusing. But this graceless charade is deeply unfunny, and they should really be required to stop it. If I were to visit Arbour Hill Cemetery every year to urinate on the grave of James Connolly I suspect I’d soon find myself behind bars. Why should Eamon Gilmore be treated any differently?

An Apple a Day keeps the Revenue Commissioner Away

Of course, these thoughts aren’t new to me (or this blog). But every now and then something will prompt them to bubble back to the surface where they must be vented, lest the pressure build up and blow the top off my head. Today that prompt was provided by Labour Senator, John Gilroy. In a single tweet, he illustrated just how far rightwards the Labour Party has moved since the days of Connolly, Larkin and O’Brien.

The tweet came as part of a conversation between Gilroy and Michael Taft. Taft is “Research Officer” for the Irish UNITE trade union and is one of the most recognisable faces of the modern Irish trade union movement. Of course, just as with mainstream political parties, the Irish Trade Union movement has been a victim of the rightward lurch. Thankfully, they’ve not been dragged quite as far from their original principles as the Labour Party and haven’t been quite as eager to embrace selfish individualism and unfettered capitalism. Yes, they’ve all but abandoned any tendency towards militancy. And their opposition to the austerity policies imposed by – among others – the Labour Party with which they are affiliated, has been muted and ineffective. Nonetheless, Taft and others within the movement have at least continued to publish the data which demonstrates the truth behind government lies.

Today for instance, Taft responded to the embarrassing nonsense emerging from the government on the subject of corporate taxation. For those who haven’t followed the story, it recently emerged that the largest corporation in the world (by certain metrics), Apple, “paid taxes of just 2 per cent on its foreign earnings”. It did this “by channelling much of its huge overseas earnings through a network of Irish subsidiaries to minimise its tax bill.” (source) In response to this revelation, the US Senate condemned Ireland’s status as a “tax haven”.

What was the response of the Irish government? Well, initially at least, it hasn’t involved a promise to clamp down on corporate tax avoidance. Instead, we’ve had both coalition parties issue whinging statements insisting that Ireland is not a tax haven, and how dare anyone suggest otherwise. In fact, our government plans on writing a stern letter to the US Senate to that effect.

“Yes”, they will say, “the largest corporation in the world funnels huge amounts of profit through our country. And yes, we pretty much ignore it and don’t even require them to adhere to our already laughably pro-corporate taxation regime. But that doesn’t make us a tax haven.”

They don’t really explain why Ireland isn’t a tax haven. I mean, they try of course; they talk about how US corporations actually employ people and manufacture things in Ireland, which is a far cry from buying a P.O. Box in the Bahamas. But while technically true, it’s misleading to the point of almost being a lie. Apple funnelled almost two-thirds of all profits earned in 2011 through Ireland despite less than 5% of its global workforce being employed here (source). So no, Ireland isn’t identical to the Bahamas, but in terms of tax policy, we certainly have a hell of a lot in common.

And today Michael Taft ably demonstrated this fact with an article (Tax Haven Dictionary) on his website. It includes data to prove that Ireland’s effective corporate tax rate is far closer to the likes of Luxembourg and the Bahamas, than it is to places like France or the UK. This article then sparked a twitter conversation between Taft and the Gilroy (the Labour Senator). Gilroy’s final contribution to the conversation was to pose the question: “does the current tax regieme give ireland a competitive advantage?” If it hadn’t been typed, one imagines it being asked in a fairly triumphalist tone of voice.

Now, Taft’s response to the question was: “Less than is imagined. Will be discussing that in an upcoming post.” However, I want to ignore that response (at least until Taft’s article is published) and concentrate on the question and what it implies about John Gilroy and the Labour Party in general.

The Purpose of Taxation

If you were to ask any one of the founder members of the Irish Labour Party, “what should be the prime motivation of Irish taxation policy?”, their responses would have all been along similar lines. “The redistribution of wealth with the purpose of reducing socio-economic inequality”. Pretty simple really. It’s a philosophy that underpins all genuine socialism, and – I would argue – is at the heart of any attempts to achieve widespread social justice in a large society. Taxation policy, therefore, is primarily designed with the interests of the majority in mind.

By the 1980s however, “redistribution” had become a dirty word and the left wing – as part of their inexorable shift rightwards – had begun to describe taxation policy as a means to fund essential social services for those who could not afford them. Already at this point we see a major change in the mainstream left’s attitude towards taxation. It’s no longer primarily aimed at reducing socio-economic equality and is now focussed on providing a basic safety net to prevent the poor from starving or dying of easily-preventable illness. The rich can get as rich as they want so long as they chuck a few quid into the bucket to pay for minimal social services. Taxation policy by this point (in the eyes of the mainstream left, remember) is no longer about the interests of the majority and has become a question of accommodating the interests of a small minority while retaining enough of a welfare state to ensure corpses don’t start piling up on the streets.

By the late 90s of course, the right wing was already begrudging society’s expectation of a minimal contribution from the rich and powerful. At this point the mainstream left could have salvaged a shred of dignity by standing firm, insisting that they’d already made a massive compromise in their wholesale abandonment of the social justice agenda, and The Right would just have to accept the obligation of the wealthy to allow the occasional crumb to fall from their replete table.

But they didn’t.

Instead they simply bought into the right-wing agenda of rampant greed and the increasing concentration of wealth. So now we have a Labour Party Senator openly acknowledging that taxation policy can be justified by how well it serves the interests of large multinational corporations even if it is clearly not catering for the needs of the wider population. It’s obscene. And any vote for Labour at the next election is obscene too.

Some might suggest that John Gilroy and his ilk are more concerned with the international competitiveness of Irish tax policy than they are with its fitness for purpose. But it’s a lot worse than that. John Gilroy and his ilk see Irish tax policy as perfectly fit for purpose. Because they see that purpose in terms of international competitiveness, not in terms of social justice. John Gilroy and his ilk need to be cast firmly into the political wilderness; they have no right to a place in our national discourse. Instead they should go work directly for the corporations they represent. Though I doubt they’d be considered competent enough to do so.

* I am using the word “flexibility” here in the Batesonian sense; see: “Bali: The Value System of a Steady State” and especially “Ecology and Flexibility in Urban Civilization” (both in Steps to an Ecology of Mind, by Gregory Bateson). At its most basic, Bateson’s “flexibility” can be defined as “uncommitted potential for change”, and he argues that any reduction in this flexibility will have negative consequences on the ability of society to handle crises. Ultimately, if you reduce flexibility enough you will be left with a society that cannot cope with even minimal change without sustaining damage (up to and including finding its very existence threatened). In this sense, flexibility becomes a measure of the health of a society. Bateson also argues that as the flexibility within a culture decreases, there is a corresponding decrease of flexibility within the environment that sustains the culture, but that’s a discussion for another day.

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31
Mar 2013

All fools

Tomorrow is April 1st. The day when, traditionally, we’re encouraged to play practical jokes on one another. Over in the UK, the Tory government (note: just because the Lib Dems are part of the coalition doesn’t stop it from being a Tory government… Clegg’s All-Star Sell-Outs are merely craven enablers) has got a truly hilarious jape up their collective sleeve. Because that’s the date when the new tax and welfare reforms come into force. “Hilarious?” Well, historically speaking, heaping misery upon the poor and vulnerable has generally provided an endless source of amusement for those in power.

Iain Duncan-Smith (the face of evil)Make no mistake, what’s happening in the UK tomorrow is not an honest attempt to reduce the deficit or “balance the books”. Rather, it’s the introduction of yet another series of policies aimed at transferring wealth from the bottom to the top. Tax cuts for the wealthy coupled with benefit cuts for the poor can’t be honestly interpreted otherwise. Especially when occurring in tandem with the wholesale dismantling of the National Health Service. It’s my contention that the UK is currently witnessing an extreme example of class warfare. One wonders when the poor will consider fighting back.

Certainly, social media is buzzing with exhortations to “rise up”. But in our digitally mediated world, that seems to translate to little more than adding one’s name to an online petition. And I’m sorry to say it, but I just don’t see the Tories changing their policies because lots of people type their email address into a website.

What’s more, the last polls I read suggested that a snap General Election would result in an overall majority for the Tories (with the Lib Dems facing complete meltdown, coming in fourth behind Labour and UKIP). This is not because the majority of voters are being made better off by these “reforms”; it’s because people are apparently easily persuaded to vote against their own best interests.

… under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.

Albert Einstein | Why Socialism?

Michael Noonan (the face of evil)Of course, it’s not just the British people who are guilty of this kind of self-harming behaviour. Here in Ireland the public have been reduced to a flock of turkeys consistently voting for Christmas. The heart was ripped out of the country by more than a decade of Fianna Fáil government. In response, we voted for Fine Gael – a slightly more right wing party whose policies were essentially identical to those of Fianna Fáil. And then we acted all surprised when nothing changed. Current polls suggest that Ireland is angry at this lack of change… and that as a result, Fianna Fáil are making huge gains once again. Seriously.

A Word About Cyprus

Meanwhile, on an island in the Mediterranean Sea something strange is happening. In an attempt to save their economy, the government of Cyprus (under extreme pressure from Germany and the ECB) is imposing a windfall tax on bank deposits above €100,000. The right wing see it as an outrageous attack on private wealth (though when they learn that the money will be used to prop up the banking system, some of them reluctantly accept it as a necessary evil). The left wing, meanwhile, find themselves backed into a contrarian naysayer corner. They oppose the policy because the ECB are in favour of it. And they warn that Cyprus is just the test-case, and that this policy will spread.

To which I reply… “Great!” I mean, isn’t this essentially a wealth tax? Isn’t that what the left have been calling for since this financial crisis began?

Personally I’d have set the limit a little higher than 100k (so that pensioners wouldn’t be hit quite so hard), but even at 100k this is a policy I would support not only for Cyprus, but for Ireland and on a pan-European basis. Of course, the extremely wealthy tend not to leave most of their wealth lying around in banks, so the policy should be introduced in tandem with a tax on stock-holdings and other investment devices. The fact is, Cyprus is the first nation to genuinely force the wealthy to bear some of the burden of austerity. Despite claims that “we’re all in this together” or “the burden must be shared”, European austerity measures have hit the poor and vulnerable hard while actively protecting the wealthy and powerful. Cyprus has turned that on its head and should be loudly applauded for it.

Meanwhile, here in Ireland (and across the water in Britain) our corporate media continues to push the market-capitalist, neoliberal agenda on the people. And we lap it up willingly despite the fact that it’s demonstrably against our own interests. April Fools… the lot of us.

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7
Feb 2013

The Anglo Promissory Notes

Still busy busy busy with work, but I’ve got just enough time to post a few thoughts here.

Today, over at On This Deity, my article on The Maastricht Treaty has come around again. I’m not sure whether it’s appropriate or entirely inappropriate that, on the anniversary of the treaty that probably did more for European political and economic integration than any other single act, the Irish government have passed the Irish Bank Resolution Corporation Bill 2013 (PDF).

supplicationThis Act of Parliament is being hailed by the government as a great success. And they expect it to lead to a deal with the ECB on the issue of the Promissory Notes. All of which probably sounds like gibberish if you’re not familiar with the Irish situation. So here’s a brief crash course:

In 2007 the Irish banking system began to creak. But everyone involved – bankers, regulators and the government – all insisted that nothing was wrong.

In 2008, the Irish banking system collapsed. The only thing that surprised me about this was the fact that lots of other people seemed surprised by it. The response of the Irish government was to issue a blanket Bank Guarantee. This was a massive mistake and I still believe the people responsible should be in prison. They’re not.

At the time Ireland had several banks, all of which were in serious trouble. The two main retail banks – Bank of Ireland and the Allied Irish Bank – were taken, in large part, into public ownership and the government is still propping them up. These are costing the Irish people quite a lot of money, but I can just about understand the argument in favour of the government’s course of action with these two banks, even if I think it’s wrong.

There was another bank, however, called Anglo-Irish Bank. This bank was responsible for massive loans to Irish property developers and – although we’re unlikely to ever get to the bottom of how this bank was mismanaged – the whiff of naked corruption coming from its direction is overpowering. Together with another failed financial institution (Irish Nationwide Bank) Anglo was renamed Irish Bank Resolution Corporation and effectively moth-balled. It ceased trading as a bank, but remained a trading corporation (or “zombie bank”, as it came to be known).

The reason for this was that the corporation owed upwards of €34 billion euros to European banks and investors who had pumped money – via Anglo-Irish Bank – into the Irish property market. Just so we’re clear; private investors and private financial institutions speculated on the Irish property bubble and when the bubble inevitably burst (as anyone with an IQ higher than that of a brain-damaged bumblebee knew it would), they demanded they suffer no losses as a result of their speculation. Instead, they exerted a huge amount of pressure on the Irish government to cover their losses. And – spineless gombeens, every last one of them – the Irish government acquiesced… transferring those gambling losses onto the shoulders of the Irish people.

This transfer was done using a mechanism called “Promissory notes”. In essence, our government promised to pay more than €3 billion to the zombie bank, on March 31st every year until 2023. The observant among you will note that €3.1 billion per year, every year between 2009 and 2023 comes to quite a bit more than the €34.7 billion owed by Anglo-Irish Bank. This is because the gamblers whose losses being covered by the Irish people are also demanding that we pay interest on their losses. You could make it up, but people would think you were high.

Anyway, this €3.1 billion per year is just for the Anglo mess. The Irish government is in all sorts of other financial and economic trouble without that particular millstone hanging around their neck. So ministers have been appearing on our screens for the past couple of years insisting that “a deal on the promissory notes” is just around the corner. It’s a hell of a big corner.

Because rushed, late-night decisions always turn out well

Last night, during a last-minute, rushed sitting of The Dáil (the Irish parliament) – in a move that eerily echoes the night of the blanket Bank Guarantee back in September 2008 – the zombie bank was finally wound up. Part of it was transferred to NAMA (the National Asset Management Agency), which was a structure set up to handle the bad debts of the banking industry after the collapse of 2008. And the promissory notes have disappeared for good.

CapitalismExcept they haven’t of course. The plan is to replace them with government-issued bonds. Perhaps 15 year bonds… perhaps 20 years… perhaps 30 years… who knows? Our government is awaiting instruction from the European Central Bank. Because heaven forbid the Irish people be permitted to have a say in the repayment terms for private debts they shouldered at the behest of the ECB.

As I say, this is being portrayed as a victory by our government. In reality it’s nothing more than the final step in the transformation of the private debt into sovereign debt. Up until now the mechanism of the promissory notes provided a barrier of sorts (albeit a very weak, almost invisible one) between the Anglo-Irish Bank losses and Irish sovereign debt. The Irish government – if it actually had any principles – could have cancelled those notes without triggering a sovereign default (though in all likelihood the markets would have reacted in much the same way as they would have done in the case of such a default). There would have been a short-term crisis, certainly, but this time next year the Irish people would have weathered that crisis and we’d have shrugged off €32 billion of debts we never incurred.

Of course, we’d still have billions of private debt on our books thanks to NAMA and the other banks, but that particular weight would have been lifted.

Instead, our government has basically mixed all that Anglo debt in with our other debt. It is ours now, and refusal to pay it would constitute a national default. Our finance minister, Michael Noonan, has managed to summon the awesome power of all twelve of his brain cells and sunk us even further into debt than we already were. As he did so, our glorious leader (Enda “The Irish People Went Mad Borrowing” Kenny) insisted that extending the terms of repayment represents some kind of triumph. I’m expecting to see a photo of him stepping off a plane waving an ECB document in the air. “Growth in our time” he’ll exclaim. And then trip down the stairs.

It strikes me that portraying a repayment extension as a victory is about as insidious as it gets. Ireland is like a man being forced to pay off someone else’s mortgage. “Look”, say the ECB, “we realise you’re having some problems paying this debt as fast as we’d like you to. So we’ve decided to let your kids help you pay it off once they’re old enough to work. Can’t say fairer than that!”

Except you can. Pretty much anything else you say would be fairer than that.

[The issuing of long-term bonds] is using posterity with the utmost cruelty; because it is leaving them the great work to do, and a debt upon their backs, from which they derive no advantage. Such a thought is unworthy a man of honor, and is the true characteristic of a narrow heart and a peddling politician.

Thomas Paine | Common Sense

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