Tuesday, May 29, 2012


"Le ministre des affaires étrangères, Laurent Fabius, demande le départ du président syrien, prône la fermeté envers l'Iran, mais sans "compétition", et redoute, au Sahel, un "Afghanistan africain". En Syrie, les massacres se multiplient et les observateurs internationaux sont impuissants. Assistons-nous à un scénario "à la bosniaque", où la communauté internationale assiste en spectatrice à une catastrophe ? Bachar Al-Assad est l'assassin de son peuple. Il doit quitter le pouvoir. Le plus tôt sera le mieux. Jusqu'ici les actions entreprises pour cela ont rencontré deux limites. La première résulte de l'absence de consensus au Conseil de sécurité de l'ONU, du fait des Russes et des Chinois. La seconde est militaire : l'armée syrienne est puissante. Aucun Etat n'est prêt à envisager aujourd'hui une opération terrestre. Les risques d'extension régionale seraient redoutables, en particulier au Liban. Dans ce contexte, l'action de la France se déploie dans trois directions. D'abord, durcir les sanctions, si possible au niveau du Conseil de sécurité. Ensuite, travailler avec la Russie, qui joue un rôle déterminant. Vladimir Poutine sera vendredi à l'Elysée. Enfin, il faut favoriser le rassemblement de l'opposition. Ce que vous décrivez, c'est au fond la prolongation de ce qui est entrepris depuis déjà plusieurs mois. Le massacre d'Houla ne marque-t-il pas un tournant qui nécessiterait d'autres actions ? Par exemple, des livraisons d'armes à l'opposition, ou la mise à l'étude d'une action en dehors du Conseil de sécurité ? Ce massacre épouvantable peut avoir comme conséquence que des pays jusque-là réticents évoluent. La question des livraisons d'armes pose une alternative redoutable. Ou bien des armes sont livrées, cela accentue la militarisation du conflit et le pays glisse définitivement dans la guerre civile ; ou bien elles ne le sont pas, et dans ce cas, l'opposition risquerait d'être broyée. La réalité, c'est que les frontières sont poreuses et que des armes entrent en Syrie....".
Natalie Nougayrède & Thomas Wieder, "Laurent Fabius: sur la Syrie, 'La France est favorable `a ce que la CPI soit saisie'." Le Monde. 29 May 2012, in www.lemonde.fr/international
"You must conquer and rule/ or lose and serve/suffer or triumph/be the anvil or be the hammer."
Johann Wolfgang von Goethe. Der Gross-Cophta. (1791), Act two.
The horrid news coming out of Syria yesterday, the deliberate slaughter of innocent women and children to-day has naturally enough lead some Western statesman to increase the volume of criticism of the Assad regime. Hence the statement by the new French Foreign Minister, among others. With as per to-morrow's Financial Times, France, the United Kingdom, the USA, Canada, Australia, Germany, Spain and Italia declaring persona non grata, the Syrian Chiefs of Mission (either Ambassador or charge d'affaires) 1. The real question that I would like to inquire is however: has the recent events made the likelihood of Western and or International military intervention any greater? The answer is of course: non, pur et simple. With Assad Fils, allies in Persia, in Iraq and in Moskva showing absolutely no signs that they are in the least interested in withdrawing their backing of the regime. Indeed, as per Reuters, Russia is stepping up arm shipments to Damascus, notwithstanding the international outrage over the daily killing of innocent civilians by the Assad Regime 2. As the Lebanese commentator and politician, Charles Rizk noted cogently recently in the Lebanon Daily Star:
"Today, it is this powerful Iranian-Syrian bloc, with its Iraqi extension, that is covering Bashar Assad’s back and confronting the Syrian rebels. That explains the regime’s capacity for endurance and its indifference to international pressure. This indifference is all the more pronounced in that it is sustained by the backing of Russia, which has been able to reconstitute itself and stage a strong comeback in the Middle East by taking advantage of events in Syria....China, Russia and Iran support for Bashar Assad makes a Western military intervention in Syria impossible, given the likely catastrophic repercussions for all concerned. In the eyes of this coalition, Assad is a tool and pretext. He is the façade against which the courage of the insurgents will continue to collide as long as Russia and its allies on the one side, and the United States and its allies on the other, fail to dispassionately settle their differences, therefore reach agreement over their contending interests, through negotiations"3.
Au fond, one must (unfortunately!) agree with the former Bush Administration official and neo-conservative zealot (in the original meaning of the term), Elliot Abrams, when he states that sans American willingness to carry out a policy of va banque military intervention in Syria, that none of of the other powers: either Turkey or Saudi Arabia or the other Gulf States will become overtly involved. This may perhaps be a 'good thing' or a 'bad thing', but it is indeed as Abrams correctly notes as close to an empirical fact as one can imagine 4. In short, those who predicted that the Assad Fils regime was on its last legs, ten months ago, six months ago, three months ago and indeed one month ago, have been proven completely wrong. And as far as I can surmise, for what it is worth, there are no variables at play, which I can see, changing this state of affairs for quite some time to come.
1. Abigail Fielding-Smith, "Diplomatic Pressure mounts on Assad." The Financial Times.30th May 2012, in www.ft.com.
2. Louis Charbonneau, "Russian Arms shipment en route to Syria: report." Reuters. 25 May 2012, in www.reuters.com. This is courtesy of Syria Comment. See also a report in the semi-official Novosti news service where the Russian Deputy UN Ambassador implies that the massacre was perpetuated by the rebels as a 'provocation'. Something that even his chief did not quite endorse. Foreign Minister Lavrov did state openly that Mosvka is adamently opposed to 'regime change' in Syria. See: "Russia blames Assad Forces, Rebels for Syrian Massacre." Novosti. 28 May 2012, in www.en.rian.ru/russia.
3. Charles Rizk. "Beyond Bashar: Syrian Rebels are facing far more significant reisistance." The Daily Star.25 May 2012, in www.dailystar.com.lb.
4.Elliott Abrams, "Disgrace in Syria." The Council on Foreign Relations. 27 May 2012, in www.cfr.org.

Thursday, May 17, 2012


"What would constitute an economically rational choice for Greece, given the economic and political situation? I see four options, each of which is fraught with uncertainty. The first would be the status quo: more austerity and economic reforms as outlined by the International Monetary Fund and the EU. One risk is that this would keep Greece in an eternal depression and a debt trap, where economic output fell faster than growth. Another is that, while on paper it might just work economically, it would almost certainly fail politically.... The second option would be to pursue the same plan until Greece achieves a primary balance – the fiscal balance before the payment of interest – and then to default, or at least to renegotiate the programme with the IMF and the EU. This is more realistic than the first option. A variant of this option was under discussion in the negotiations last week. But there is a risk the austerity needed to reach this point is either so severe, or would take so long, that the political risk would start to have an impact as well. The third option is the one outlined by Alexis Tsipras, the Syriza leader. He wants Greece to cancel the programme immediately, reverse some of the reforms and consider the possibility of a default on the remaining foreign debt. He claims this would not lead to an exit from the eurozone. He is saying that the EU is bluffing. I am not sure he is right about the latter. But then again, I am not sure he is wrong either. What would happen if Greece cancelled the programme unilaterally? For a start, the EU would stop the loans to Greece. Greece would then default on all of its foreign debt. But given the primary deficit, Greece would have to impose an even bigger austerity programme. Assuming it still wanted to stay in the eurozone, could the others force it to leave?... The fourth option would be an immediate voluntary departure. Greece has only a tiny export sector and, as Willem Buiter of Citibank has said, the initial competitiveness gains would be quickly eroded through domestic policies. Of the four, the worst option is actually number one. By following the EU-IMF programme, Greece will end up with 10 years of depression, an inevitable euro exit and a possible breakdown of democracy. The best option, in my view, would be a strategy to achieve a primary balance by 2013 and then to default on all outstanding foreign debt, public and private. It would not be popular outside Greece but it would be hard to push Greece out of the eurozone. I consider Mr Tsipras’s approach too risky. But I can see why Greek citizens would vote for him. His position is certainly more rational than that of the austerity centre-ground establishment, which can offer no perspective of an economic turnround. This is Germany in the early 1930s all over again. This leaves us with a choice between default later and default now. I would prefer default later because it would make for a smoother fiscal adjustment, bring a few sensible reforms and increase the probability that Greece could stay in the eurozone. Sadly, the political momentum is swinging the other way".
Wolfgang Munchau,"Default now or default later?" The Financial Times. 13 May 2012, in www.ft.com.
"Here lies the crucial point for Europe's single currency. Those countries under the most severe fiscal pressure will obviously wish to print money sooner and faster than those better situated. Yet the Maastricht Treaty effectively rules out printing money; Article 104 of the treaty (now Article 101 of the Statute of the treaty establishing the European Community) and Article 21 of the Statute of the European System of Central Banks enshrine a strict 'no bail-out' rule. Member states that hope to inflate away their debts will simply be turned away. Much more likely is a series of collisions between national governments struggling to bring their finances under control and the ECB.... The Political will to implement spending cuts and tax increases may be strengthened by these considerations. Still history offers few examples of successful adjustments on the scale necessary in certain European countries today. What it does offer are several examples of monetary unions disintegrating when fiscal strains became incompatible with the unpleasant arithmetic of a single currency. In this respect, conventional measures of fiscal balance like debt and deficit ratios to GDP understate the magnitude of the eurozone's problems. Generational accounting suggests that EMU could degenerate-not overnight, but within the next decade."
Niall Ferguson & Lawrence J. Kotlikoff, "The Degeneration of the EMU." Foreign Affairs. (March / April 2000), pp. 120-121.
Wolfgang Munchau's newest piece in the Financial Times, provides the reader with a series of unpleasant to catastrophic scenarios for Greece and the Eurozone. Judging from the various options that he throws up, the most best one is for a default on all foreign loans, public and private, as soon as Greece manages to achieve the fabled 'primary balance'. Unfortunately, as he himself seems to realize, the same politicians (if one can label them that), who are willing to play va banque with defaulting, are completely unwilling to stick to the necessary reforms in the Greek public sector, which would enable Greece to achieve anytime soon a primary balance. The fact is, that if the Greek electorate chooses to re-elect a parliament which is unable or unwilling to adhere, to some of the more rational aspects of the austerity programme and instead wishes to default immediately on Greece's foreign debt, then the best scenario perhaps is for Greece to do so and face the ultra-unpleasant music. Unpleasant it will most definitely be. Admittedly, not as unpleasant as the music, that our modern-day Heinrich Brunnings are endeavoring to administer to Greece and the other peripheral countries of the Eurozone. The whole scenario and problem of these past three years, merely throwing into relief the issues raised by Niall Ferguson twelve years ago in his Foreign Affairs piece. Unfortunately, the pay-master of the Eurozone, Germany has like the Bourbon's circa 1815: "Ils n'ont rien appris, ni rien oublie.

Saturday, May 12, 2012


"Like the vast majority of the western world, France has lived well above her means for decades. Under your presidency, she must start on a healthier course. The challenge is ethical as much as political, economic and social. Without greater social justice, without the “fairness” you so often mention, the agonising but necessary reappraisal of our lifestyle cannot be considered. Equity and realism go hand in hand. But justice cannot be an end in itself in today’s world, which is more interdependent and competitive than ever. In the Scandinavian countries – which may partially serve you as a model – there is no contradiction between the scrupulous respect of a national “social contract”, ensuring an acceptable gap between rich and poor, and economic liberalism. A middle way can be found between discouraging the rich and humiliating the poor, dictated by realism, moderation and common sense. France more than ever needs innovative, competitive businesses bent on international conquest. The state is no substitute for their energy. Its role should be to protect the weakest while encouraging the creativity of its most dynamic citizens. The state alone cannot relaunch economic growth. Of course France, as much as Europe or the US, needs to invest in infrastructure. In some areas, we are lagging far behind the newly emerging countries of Asia. Yet, given our debt levels, and the reasonable and necessary constraints of the EU, to dream of a French or European “Super New Deal” is simply unrealistic.... In short, Mr President, our country needs courageous reforms that must this time be implemented in full. Fairness is a precondition, not an end in itself. Fairness will not affect the structural imbalance between French and German competitiveness. To reconcile the French among themselves does not mean cutting them off from global realities. France needs a patient, modest pedagogue who will reassure the country and, with energy and common sense, set it on a path of structural reform. It is a huge task that cannot be undertaken in a spirit of revenge or of ideological escapism. You have taken it upon yourself to fit your character and your resolve to the task of being president. You are up to that task. Don’t disappoint us".
Dominique Moisi, "Please Mr. President, use your economic sense". The Financial Times. 7 May 2012, in www.ft.com
"The Standard of living has turned into Pandora' box in every country. It is the focus of half of world politics".
Charles de Gaulle quoted in Andre Malraux. Fallen Oaks: conversations with De Gaulle. (1971). p. 21.
Over and above the specifics of the defeat of Nicolas Sarkozy by the Socialist candidate, there are elements which transcend the mauvais ton nature of the now defeated President. Which is not to gainsay the fact that indeed, au fond, Monsieur Sarkozy did not uphold the regal image that the Fifth Republic endows its Presidents with. Judged on that basis only, Monsieur Sarkozy did indeed deserve to win. In addition of course, is that fact that like almost every other ruling party in the European Union, which has faced re-election in the past two years and the onset of the current economic crisis in the European Union, the odds were indeed stacked against the incumbent President. Over and above these negative variables and even when added to the populist backlash provoked by the German-inspired 'austerity' regime, is the following fact: that overall, the ten years of Rightist, UMP government, has been in economic terms a failure. A failure pur et simple. The fact speaks for themselves: in percentage terms, France's economic performance since 2002 elections and the beginning of the Right's complete control of government, has been less than what it was under the co-habitation of the neo-Gaullist, Jacques Chirac (as President) and the Socialist, Lionel Jospin (as Prime Minister). Both indeed in terms of GDP growth and in terms of exports, the overall record of the Right has been, nothing other than a failure. Indeed, the failure stands out particularly well, when once compares the relative performances of France and Germany in the years in question. And while Nicolas Sarkozy, entered into office, promising a 'rupture', in terms of French economic performance, he proved to be unable to deliver on his promises. Hence, the grealy increased vote in the first-round of the Presidential elections for both the extreme Right and the Extreme Left 2. Please make no mistake: I seriously doubt, unlike Dominique Moisi, that Monsieur Holland, the newly elected President, will be able to fulfill many of the promises that he endeavored (not very successfully it would appear given the narrowness of his victory), to entrance the public with. With his opposite number in Berlin, no doubt only willing to oblige him to the smallest extent about any ideas as they relate to a 'growth agenda', for the European Union. And it I also doubt indeed, that Monsieur Holland will be the French equivalent of Gerhard Schroder, the German Chancellor whose reforms helped to pave the way for Germany's economic revival of the past half-dozen years. Instead what I foresee is that France will continue on a path of mediocre economic performance, which has the end-result of binding it further and further to an economically more dynamic Germany. Making the idea of that the European project is a joint-one between Paris and Berlin, more and more a hollow one. And of course putting paid forever to the notion expressed by then French President, Giscard D'Estaing, circa 1976, that with sufficient effort the French could catch-up and the surpass Germany economically speaking 3.
1. For this see, the useful web site: www.tradingeconomics.com/france.
2. The Economist. "Number-crunching: the only way for Sarkozy to win." The Economist. 30th of April 2012, in www.economist.com.
3. Quoted in Sir Nicholas Henderson. Mandarin: the diaries of Nicholas Henderson. (1994), pp. 132, 225 and passim.Henderson of course being Her Majesty's Ambassador to France, from 1975-1979.

Tuesday, May 08, 2012


"I doubt he will have a lot more success than the US has had in Iraq or Afghanistan, although, his army probably understands Syrians a lot better than US troops and commanders did Iraqis. But they will likely be provoked into over-reacting to terrorism, road-side bombs and demonstrations as they have already been. They can only lose the battle for hearts and minds. The Alawites cannot regain the battle for hearts and minds. They can only instill fear and play on Syrian anxieties about turning into a failed state, such as exists in Iraq. That is what worked in the past for the Assad regime. The regime has no new tricks up its sleeve. Syrian State TV is now trying to demonize the Saudi monarchy for being descended from Jews and backwards. That says a lot about the regime's tactics.
Joshua Landis, "Ceasefire Efforts Unlikely to Work". Syria Comment. 8 April 2012, in www.syriacomment.com
"The Arab world of 2012, moreover, is not the same as in the 1990s, when Saddam Hussein managed to restore the state of fear to the rebellious south of Iraq. Activists in Syria expect that both the peaceful protests and the armed opposition to the regime will persist. If a ceasefire takes hold, they will use it, they say, to regroup. And they will grab every opportunity, even if it is a short visit by the handful of UN monitors now on the ground, to take to the streets and demand the downfall of the regime. In the months to come there will be hand-wringing over the international response. In the end, though, it is the evolution of the protest movement in Syria’s embattled cities and towns that is likely to have the greatest impact on Mr Assad’s attempts to cling to power"
Roula Khalaf, "Assad's allies back President to complete term." The Financial Times. 25 April 2012, in www.ft.com.
The suppositions of the comments by the usually well-informed and wise Professor Landis of Syria Comment and the Financial Times's Beirut Correspondent, Roula Khalaf, are unfortunately both extremely questionable and at the same time, widespread in the Western press. The reasons for this are quite simple, notwithstanding the alleged changes ushered in by the 'Arab Spring' of 2011, there are only three models for ousting regimes in the Near & Middle East (word to the wise: Democratic elections so far have not proven to be one of these...): i) military coup d'etats overthrowing a weak and or unstable government, of which the most famous being those which brought to power the Free Officers in Egypt in 1952, the Baath regimes in Syria in 1963 and in Iraq in 1968 among numerous others; ii) foreign interventions leading to the overthrow of an existing government: Iraq of course in 2003, Persia in 1941 and 1953 and Libya in 2011; iii) a popular revolt leading to the removal of a soft, authoritarian regime, `a la Persia in 1979 and more recently, Egypt and Tunisia in 2011. Now by any rational definition, the Syrian case fits none of the above scenarios. It is neither 'weak' or really yet unstable and few will hazard that an internal, Army coup d'etat, will be able to eject the Alawite-Baathist, Assad Fils regime. Indeed, the regime entire raison d'etre, is such that a classical military coup d'etat, is pretty much impossible to successfully mount. As per the issue of foreign military intervention, while no one may doubt that an armed intervention using a combination of ground (Turkish) and air (Anglo-American) power could within a month or two deal a crippling blow or blows to the regime in Damascus, the most pertinent question would be 'at what cost'? Apparently, from the perspective of the most important actor in this equation, Ankara, the likely costs are too high for it to contemplate military intervention at the moment. No doubt, if there was a complete collapse of the entire Syrian state apparatus, resulting in a Somalia circa 1992 scenario, the AK regime might change it mind soo enough. But at the moment, there is nothing approaching a collapse of the Syrian state, qua state apparatus. As long as that is the case and as long as Russia and Peking, refuse to sanction United Nation's approval of outside military intervention `a la Libya last year, then I cannot fathom any likelihood of overt, outside military intervention. The final scenario is one which Khalaf hints at in her article: that under the new dispensation of the Arab Spring, the previous iron logic of the unconquerable nature of state power in the Arab World, is no longer true and via persistent if not indeed increased popular demonstrations, the Assad regime will eventually collapse and or withdraw / give-up power. To my mind this is a ex hypothesi which has very little by way of validity: simply put, the Baathist regime can only superficially (if at all) be said to resemble the fallen regimes of Ben-Ali & Mubarak. With numerous caveats and qualifiers, those two regimes can be said to have been 'soft' authoritarian regimes, regimes which while de facto undemocratic, did provide for a very limited (if toothless) political pluralism, with contested elections, a semi-free, albeit, muzzled press (with television being completely state controlled), with a limited, semi-autonomous civil society structure. With the military, also enjoying a limited degree of if not more (AKA Egypt), of autonomy. In Syria, like Iraq under Saddam Hussein, and Libya under Qaddafi, nothing of the sort existed. All three regimes, were 'one-party' states in the classical, 'totalitarian' sense, of the term. The upshot being from my perspective, that a simple collapse of the regime's due to public demonstrations akin to what took place in Egypt, Tunisia and prior to that in Persia, is completely farfetched if not indeed fantastical. Finally, I see little chance, per contra Professor Landis, that the military opposition has any chance of ousting the Assad regime 1. As we can see above, no regime in the Arab World has ever been ejected from power via a civil war & or uprising, not even as recent events have demonstrated, in Yemen. And while the opposition may perhaps score some local and limited victories, that is a far cry from being able to either militarily defeat the regime, or even continuously hold territory. With to my mind the Iraq scenario circa 2003-2008, being of little relevance, insofar as the Sunni insurgency against the American imposed regime, ultimately failed, hence the pro-Persian, pro-Assad, anti-Sunni policies of the government in Baghdad 2. As per the Afghanistan scenario, that to my mind also makes for little sense due simply to the fact, that either Afghan insurgency (that of the 1980's or that of the 2003 to present), was and is, au fond, unsuccessful, insofar as sans the cutting off of Russian economic assistance, the Najibullah regime would potentially have remained in power indefinitely. With possibly the same thing being true of Karzai government. Need one add, that given the sheer size of Afghanistan compared to Syria (almost four times larger), as well as the fact that Syria is a much more urbanized and denser country, makes any likelihood of a classical, guerrilla insurgency almost impossible to imagine succeeding. To conclude, in the absence of outside military intervention, look to see the Assad regime remain in power for sometime to come. Albeit with perhaps facing the same degree & type of violent, increasingly Islamist, terrorist and other attacks that we saw in Algeria in the 1990's. A situation which failed however to result in the downfall of said regime in Algeria, one might add...
1. For a good analysis of the Syrian Regime, see: Raymond Hinnebusch. "Syria: from 'authoritarian upgrading' to revolution?" International Affairs. (January 2012), pp. 95-113. For a good starting point for discussion of the pre-Arabl Spring Arab World, see: Fouad Ajami. "The Autumn of the Autocrats." Foreign Affairs. (May/June 2005), pp. 30-35. Of course, by employing the mot 'totalitarian', I do not mean to imply that the Baathist regimes in Syria and Iraq were / are by any means 'Totalitarian' in the same way that some scholars claim that the former Soviet Union was 'Totalitarian, et cetera. Merely that the level and degree of autonomous civil society organized outside of the state apparatus, was / is severely limited in these states, as compared to say the former regimes in Egypt and Tunisia.
2. For a well-informed discussion by a British academic, who was formerly stationed in Iraq as a 'Political Advisor', to the American Ground Commander in Baghdad about Baghdad's pro-Persian, pro-Syrian, anti-Turkish and anti-Sunni foreign policy, see: Robert Tollast."Iraq Update: A discussion with former US military Advisor Emma Sky." Global Politics. 6 May 2012, in www.global-politics.co.uk">

Saturday, May 05, 2012


"THE greatest short-term threat to the world economy continues to be Europe's debt crisis. The progress of the euro-zone crisis will, in turn, depend on the length and depth of the euro-area ecession. If output is shrinking and unemployment rising, then austerity measures are likely to make economic conditions worse while raising very little new revenue. The euro zone may fall ever deeper into a hole. That's an unnerving possibility. After shrinking in the fourth quarter of 2011, the euro-zone economy showed early signs of life in 2012. They were not to last. The soothing effect of the European Central Bank's trillion-euro effort to prop up the European banking system was wearing off by March. The latest industrial production and employment figures suggest a new phase of economic weakening may have begun. An analysis of recent data points by Now-Casting, which publishes "real-time" economic forecasts, suggests that the euro zone may have narrowly avoided contraction in the first quarter. That good fortune doesn't seem likely to persist through the second quarter. Even worse, contraction in the third quarter now looks a real possibility"
"Tracking the Euro-zone eonomy in real time." The Economist. 27 April 2012, in www.economist.com
"Senior European officials are championing an investment pact to stimulate economic growth in the eurozone as voters in France and Greece look set to punish leaders who have backed austerity measures."
Peter Spiegel & Hugh Carnegy, "Brussels signals shift to growth plan as voters look set to reject austerity." The Financial Times. 5 May 2012, in www.ft.com.
"This is like the Titanic. If there’s a sinking here, even the first-class passengers drown."
Jose Manuel Garcia-Margallo, Spanish Foreign Minister, quoted in the Financial Times, in: Victor Mallet, "Vulnerable Banks under spotlight." 27 April 2012, in www.ft.com.
With the fast approaching electoral ouster of the Sarkozy Government in France, following on the heels of the downfall of the Center-Right, austerity-driven, cabinet in the Netherlands, and the electoral weaknesses recently spotted in the UK's own, version of the same, it is time to consider the idea that the electoral drawnbacks of the politics of austerity have finally arrived. For some of course, like the American Nobel economist, Paul Krugman, it is a case of not a moment too soon, but, taking a historical perspective, it should not come entirely as a surprise the that fillip, that the (mostly) center-right in Europe has gained from promoting the politics of austerity has finally exhausted itself 1. Au fond, this should not be in the least surprising. Electorally speaking, regimes which endeavor to follow along the path of austerity, in a declining economic horizon, inevitably face unpopularity and soon enough ejection from the seats of power. The Great Depression examples of the Labor Government in 1931, The Bruning Cabinet in 1932, followed soon enough by the rejection of Hubert Hoover from the American Presidency are the most salient examples. The politics of 'austerity' can only truly be said to work, when they commence at the bottom of an economic cycle, `a la say the UK in 1992 or Sweden and Canada in almost exactly the same time period. In all three cases, 'austerity' was soon enough followed by a long-term economic upswing, due partly to the simple dynamics of the economic cycle and to the fact that the rest of the world economy was growing by leaps and bounds. Then and only then, does 'austerity' as a political tactic or slogan garner positive political dividends. As the alleged austerity is associated with rising economic growth and lower unemployment. Whether accurately or not, such cyclical improvements in the economy are thereby attributed to the rigors of austerity. What however the countries of the EU have experienced in the past three years is austerity in the midst of a sustained and indeed, in some countries (Greece, Italia, Portugal, and to an extent Ireland) deepening down-turn. In those and indeed soon enough other cases, the alleged benefits of austerity, qua austerity, are soon enough shown to be completely baseless. Which is not to gainsay the idea that many of the economies of the European Union need, nay require profound adjustments to their economic structures and in particular to their labour markets. The issue is merely that in the midst of the greatest economic crisis since the end of the Second World War, cuts in government spending and pro-cyclical fiscal policies are on the face of it, senseless and self-defeating. As many of the more intelligent economists have been repeating to all and sundry low these many, many months 2. And which finally segments of European Union officialdom are finally starting to realize, albeit rather late in the economic cycle 3. Given the stakes involved, the reference to the Titanic by the Spanish Foreign Minister is indeed not without merit in this context.
1. For the lastest most sustained view of matters from this Nobel Prize winning economist (other that is from his regular column and blog in the New York Times), see: Paul Krugman, "How to End this Depression". The New York Review of Books. 24 May 2012, pp. 12-14. For the problems that the UK's Centre-Right, Tory-Liberal coalition government is currently facing, see: James Forsyth, "Cameron's season of sorrows is not over yet." The Spectator. 28 April 2012, p. 12. For a historical example from the entre deux guerre period, see Lord Skidesky's, classic oeuvre on the subject from the British case: Politicians and the Slump: The Labour Government, 1929-1931. (Revised edition, 1994).
2. See in particular the columns of Martin Wolf, Wolfgang Munchau & Lawrence Summers among others in the Financial Times. For recent examples, see: Martin Feldstein, "Taxpayers must backstop Spain's budget. 30 April, 2012, in www.ft.com; Wolfgang Munchau, "The Prize for European Political Illiteracy." 8 April 2012, in www.ft.com; Martin Wolf, "The State of the UK Economy." 4 May 2012, in www.ft.com.
3. See Spiegel, op. cit.