Europe: Death Throes


Europe is at a crossroads and its survival may depend on the route taken. It is very clear that large numbers of ordinary folk have fallen out with the concept of ever closer integration, and with mass migration. Multinational companies are advocates of the EU, according to the analysis of focus-economics.com. This body paints a bright picture of vibrant colours for the immediate future of the Eurozone.
While the few, (big boys) find it exhilarating, hundreds of thousands, if not millions, of the poor throughout the EU fear the dark and unappealing clouds. Who is right and why the divergence of opinion?
Since the crash of 2008 not a lot has changed for the poor. Unemployment remains persistently high at around 11% for the Eurozone as a whole. The only country doing well is Germany with the lowest unemployment rate in 25 years.  www.focus-economics.com/germany
In contrast France has seen its unemployed rate rise above 10% as recently as December 2016. In Italy it’s almost 12%. In Spain youth unemployment is a persistent 24%. As the economist.com points out, there is “…high unemployment almost everywhere.” (October 2016).
Therein lies a major problem and to compound it we have the arrival of significant numbers of migrants. The figures vary, according to Frontex the EU border agency 1.8m came to Europe in 2015 with an estimated further one (1) million illegal entrants. Significant numbers continue to arrive. It really doesn’t matter whether you think it is a good idea, the humanitarian thing to do, or not. The crucial point stems from the impact. And the impact has proven seriously negative for the poor.
In highlighting the negative we need only look at the UK and that 73% of local councils take few, while councils in the most affluent areas take no migrants. Whereas, places like Boston in Lincolnshire has witnessed a huge influx. In consequence 72% of the electorate voted ‘Leave’ in the referendum of June 2016. Thus the burden of coping with migration has been firmly placed in areas with a high concentration of working class people. A class issue?
It is slowly being accepted that such an influx of numbers has a direct effect on: housing, rented accommodation and the cost of rent, school places, dentists, doctors’ appointments and the NHS especially the accident and emergency (A&E) departments. The same difficulties are not a part of daily life for those who castigate the poor for stating the obvious.
Therefore, it is the poor who carry the burden of migration. The well-off and the political elite berate the poor for moaning, and are unconcerned by the growing frustration and mounting anger of the people. As a means of demeaning and controlling any outbursts from the lower classes the establishment and their luvvie bedfellows demonize them as: ‘ignorant, uneducated, stupid or racist’ as experienced by Lord King, former governor of the Bank of England. (Daily Mail 2017/02/10)
A blind adherence to their prescribed agenda by the political class and their groupie acolytes has served only to alienate millions of voters. The consequence is now obvious.
Similar patterns are to be found throughout Europe. In Germany the altruism of Angela Merkel and her subsequent rise to fame has waned considerably. When the emotional high withers the harsh reality, the practical everyday environment comes to the fore. Germany was magnanimous but the rise of opposition has increased steadily. The AfD (Alternative for Deutschland) has been growing and estimates that it can now command roughly 25% to 30% of the electorate with an anti EU policy.
Now the Social Democratic Party (SPD) with their new leader Martin Schulz ex EU President, think they can muster a campaign. The youth movement of the party JuSos are filled by enthusiasm and think they could actually steal the election in September. www.theguardian.com/      15/02/2017
However, there are more fundamental consequences as many of the migrants are now feeling trapped in camps. Thousands complain that they cannot find work and their frustration and anger grows. Those who find work are usually a source of cheap labour paid below the minimum wage. Illegal workers are simply used and abused.
Nonetheless, the true horror comes from the sheer number of single male migrants, hundreds of thousands who have needs beyond that of shelter and food. Existing brothels will not cope with the increased need and so the void is likely filled by people traffickers to help satiate the overload. In consequence, thousands of women and children will be brought in and forced to meet the demand.
The sanctimonious will continue to berate their opposition with their abusive language and remain immune to the tragedy behind the closed doors. I’ve met their friends who accompany them everywhere they go:  see no evil – hear no evil – speak no evil! It’s unfortunate but reality cannot by itself break down a fixed ideology.
Throughout Europe there is fallout from the high unemployment, the migrant crisis and the deafness of the political class. In Sweden, once considered the hallmark of social democrat achievement has fallen foul to these undercurrents. In the city of Malmo the local police have asked for national assistance to combat the steep rise in crime.
One area particularly affected is the district of Rosengard which has an 80% migrant population but less than 40% of the total population have a job. A growth in social unrest, gang warfare and multi-ethnic violence has led to eleven (11) murders, 80 attempted murders and a spate of shootings, arson attacks and bombings. Little wonder that the local guys want additional help. (Reuters)
Si se puede
Meanwhile, a Spanish member of the EU parliament (MEP), Javier Lopez has written a piece on the ‘defense of democracy’. By democracy he means the maintenance of the existing order as he abhors the “bigoted populist movements”. Along social democratic lines he is calling for the reconstruction of the EU to incorporate a fiscal branch, harmonization of taxes, a minimum income throughout the Eurozone and better public services.
Lopez believes such a programme will curtail the build-up of populism. However, his ideas will necessitate closer integration which is the opposite of what many of the new parties in the EU want. Also, the Guardian newspaper, (theguardian.com October 2014) points to political scandals and corruption as prime reasons for the existing political parties losing ground.
In his homeland of Spain, has seen the rise of Podemos (We Can) founded in March 2014 and now the second largest party in Spain with a membership of 456,000 as of April 2016. It is also the third (3rd) largest group in the Spanish parliament. The party is a strong left leaning organisation that wants an end to austerity and changes to the Treaty of Lisbon. But to Lopez’s logic all members of Podemos and all those who voted for them are ‘bigoted populists’. Unfortunately for Lopez the motto of Podemos is – se si puede – Yes We Can!
www.socialeurope.eu/2016/12/europe-globalization-unrest
Of course all eyes are on Greece at this time and whether it can meet its debt repayment plan. There is little understanding from the ‘powers’ in Brussels of the political reality in Greece. The parties that once held sway, PASOK, centre left and New Democracy could look forward to 70% – 85% of the vote at elections.
Such numbers create a self-assuredness and in consequence a relaxed approach to the everyday needs of the electorate. The vote for PASOK has fallen to 5% at points and their joint vote to 31% at the May election of 2014. It is difficult to understand how such a change can go unheeded by the Brussels politburo.
The Greek economy has fallen by 25% which is equivalent to the 1929 crash in America. The country is on its third (3rd) bailout with the forth due soon. In the summer it has a debt of €7.5bn to repay before receiving its next tranche.
There is now an open rift between the IMF (International Monetary Fund)) and the ECB (European Central Bank) over how Greece should be bailed out. The debt problem of 184% of GDP which equals some €350bn means it will find it extremely difficult, if not impossible, to pay off any of its debt. The IMF says the debt is ‘unsustainable’.
If Greece had a vibrant economy it could possibly reschedule its debts. However, the country is still in the doldrums; high unemployment, poor investment levels, poor productivity and the fact that the people don’t have a lot to spend means it’s between a rock and a hard place.
Hence the IMF wants the next bailout package to include some debt relief. But, the ECB want more austerity and are really none too happy that the Prime Minister Tsipras gave a Christmas bonus to pensioners and free school meals to children of the poor.
Now you’re aware of the priorities of the ECB and the German finance minister Wolfgang Schäuble. Of course they may argue that the poor in Greece will be better off in the longer term but that don’t help when you’re hungry now. And that don’t help if you’re a political party trying to stay in power. And that don’t help unless it’s a stone cast guarantee!
www.theguardian.com/business/economics-blog/2017/feb/05/                   (A good read.)
BBC Business News 2017/02/15
Poor Greece (literally as well as metaphorically) has suffered years of austerity. And while other nations get a boost from retail sales Greece doesn’t have that luxury. Instead it is under pressure to cut pensions again which would be the thirteenth (13th) time. Unlucky for some – no pun intended. Therefore the Greek debt problem is a headache and perhaps, that’s why the German newspaper Bild has suggested that the German government would welcome Greece leaving the EU.
www.marketwatch.com   www.taieitimes.com/news/editorials/  (2017/02/06)
According to the economist Paul Krugman forcing Greece to suffer austerity which comes with every deal, “…it’s a grotesque betrayal of everything the European project was supposed to stand for.”
https://krugman.blogs.nytimes.com/2015/07/12/killing-the-european-project/?_r=0
CIAO Italy? (chow)
Another nightmare stirring in the background readying to wake the dead is Italy. This nightmare can truly disturb the sanity of the EU: dozing, dozing, dozing; alarm! The banks are described as “…an inexhaustible source of financial instability”. Unemployment hovers around 12%. It has the highest inflation rate (Feb: 2017) since 2013. Public debt continues to rise and there is no sign as yet of any economic recovery.
Interestingly, none of the major rating agencies: Standard & Poor, Moody or Finch is prepared to give the country a rating. The reasoning may be because the country’s debt stands at 132.6% of GDP the second largest in the EU. Bonds sold to keep Italy afloat are not being bought by private investors but by the ECB. Aggressively!!
The Times also reports that Italy has gained little from the euro. The paper also claims that the poorer countries in the EU can’t reach their potential because of poor growth and poor investment. Such a scenario may have fed into the logic of the Mediobanca report that states that many parts of the EU are caught in a “mouse trap” and adds “Without a major restructuring of the Eurozone, there is nothing you can do under these rules”
. www.focus-economics.com/countries/italy   www.times.com/2017/02/08/business/
Business Insider in discussing the problems of the EU concludes that “Actually, a lack of reforms, slow growth, a troubled banking sector and high government debt in Italy may be a bigger risk for the Eurozone.” Than Greece! www.businessinsider.com
La France – la sortie?
France the second biggest economy of the Eurozone has many of its own problems. Unemployment is up above 10% again and tales of political corruption have been in the headlines for a number of years. Add migration and terrorist attacks and the government is under severe pressure.
Since Hollande came to power taxes have risen to an all-time high at 47.9%, the highest in Europe. The real indicator of the well-being of the country is summed up thus, “… no significant economic improvement over the past five years”.
In terms of trade France exports 17% to Germany but imports 19% from the Germans. Their deficit is also high, while debt stands at around 102% of GDP. That only leaves Germany with a positive outlook.
www.ndtv.com/world-news/   citing an article by Reuters 2016/12/04.
It doesn’t look promising as the IMF say that the euro is about 15% undervalued but their analysis suggests that based on the French economy it is 6% overvalued. This is a problem faced by all the economies of the Eurozone but that of Germany. How would the other nations fare if the euro was 15% higher? The alternative is to leave the EU and devalue or a complete overhaul of the EU.
The French election should be an interesting one, Emmanuel Macron standing as an independent is now running high on the polls aided no doubt by the corruption scandal surrounding Fillon the right-wing conservative candidate.
Unfortunately for the French workers Macron is proposing more austerity with a package that includes cutting pensions and severely restricting trade unions to operating at company level rather than across the whole industry. Maggie’s back in town!
Marine Le Pen seems the likely opponent of Macron. The National Front programme is to leave the euro and devalue. Or create bedlam along the way.
Generally, the economic picture is not one to win investment and the policy of austerity has proved a disaster, so much so that it has been abandoned by some countries. Therefore there is no common policy to deal with the desperately slow growth that hangs over the Eurozone like a huge dark and brooding cloud as far as the eye can see.
The chief European economist for Goldman Sachs Huw Pill suggests at best the EU will stumble along making small gains. However, he warns that the EU needs ‘institutional and structural’ changes to overcome the weaknesses of the block.  www.goldmansachs.com
A further nail in the coffin comes from the economist.com (October 2016) and their assessment that there are “…deep flaws in the single currency’s design.” Flaws in the currency have been known for some time through the work of J Stiglitz and Paul Krugman both Nobel Prize winning economists.
Having already bailed out Greece, Spain and Ireland; the question must be how long can this process carry on. How long before the moneymen run for the hills?
On the political front the EU is open to severe attack from several flashpoints. In Austria Norbert Hofer of the Freedom Party lost the presidential election by a mere 0.6%. The latter is far-right politically as is the AfD in Germany and other such movements have sprung up in many areas of the EU.
Austria’s new chancellor Christian Kern has made it abundantly clear that he expects the Eurozone to make big changes. He at least recognises that the writing is on the wall unless the people’s wishes are given a hearing.
The Danish People’s Party has increased its vote by 50% in eight years. In the Netherlands the far-right party of Geert Wilders the PVV with its anti-EU stance could possibly win in the next election. In Italy the Five Star Movement (M5S) has gained the mayor ships of Rome and Turin and is polling nearly 30% of the electorate. www.theguardian.com/world/2016/may/25/
Just over a year ago Martin Schulz, the president of the European Parliament was quoted as saying, “The worst nightmare for the European project is an outbreak of populism or political upheaval in Germany. Now it is looking like a real possibility.” He went on to say that the Schengen area is ‘buckling’. www.express.co.uk/news/world/ (2016/01/15)
Which road will the politicians take? It seems that they have run out of rope but are afraid of the consequences once their actions become apparent. A Hungarian commissioner Sandor Lederer has demanded to know why the EU Commission has not released the extensive report on corruption.
He is of the opinion that “Corruption is rampant in Europe” and that transparency should be a “…top priority at all levels of governance.” Frans Timmermans reputedly told the Civil Liberty Committee that he sees no point in releasing the document. Hmm, interesting!
www.euractive.com/section/justice-home-affairs/opinions
Corruption stories keep coming up all over the continent and yet there are no sackings, no heads roll, it’s a carry on as usual syndrome. Meanwhile, ordinary Joe goes to prison for fraud. Hmm, interesting! The stories of corruption are causing a dust cloud.
It is little wonder that the populace have a growing contempt for the politicians. It doesn’t matter the party in power they follow roughly the same line of thought; it’s just different shades of grey.
There is a sweeping antagonism and a deep mistrust of the politicians and of the opaque bureaucracy they have installed. No one is accountable. No one takes responsibility for any wrong doing. No one admits to failure. Everything is fine in La La Land!
The most telling point comes from an 86 year old Frenchman Maurice Beauzac from Chartres during a street poll held by Reuters:
 “We are living at a time when the word integrity is becoming meaningless to our politicians.”
www.uk:reuters.com   2017/02/09
The crossroads has roadworks! Trapped in the mire of their own making all the politicians can think to do is attack with ever more disparaging language. Sad isn’t?
This year is one of crucial elections in France, Germany and the Netherlands the outcome could seal the fate of the European project.
If we assume that the establishment parties win by whatever margin will they read into the result a clear acceptance of their programme? Or will they note the size of the opposition, an opposition that did not exist a few years ago and concede that change must follow?
It may well be that they will carry on down that same road and continue with the policy of austerity. They may turn a blind eye to the exposé of corruption and continue their role as the proverbial ostrich.
Meanwhile, several notable commentators, Goldman Sachs, Mediobanca have called for serious institutional and structural change. The Economist magazine notes a weakness of the euro as have several leading economists. Many have commented on the sluggish performance of most of the economies of the EU and see few prospects in the near future.
The most recent set of stats from the German official statistical office Destatis paints a bright picture for Germany and the Eurozone. Germany it concludes has achieved 1.9% uplift in activity in 2016 making it the fastest growing of the top 20 nations, due to higher exports and the weak euro.
For the Eurozone it suggests the highest lift since 2011. Destatis also points to the French service sector as ‘booming’. However, this contrasts with France24.com when they highlighted that tourism, a major contributor to the French economy, had a steep decline and that Paris had seen a drop of 1.5m visitors alone.
Martin Baccardax, The Street 2017/02/23  reported in msn.com/news
Unemployment is too high throughout Europe it’s a persistent harbinger of poverty and causing a persistent distrust of the politicians. Ordinary Joe is not feeling any upsurge in their personal well being and there are few good signs on the horizon.
Note the point by the New York Times: 50% of all new jobs since 2010 are temporary jobs in Europe. It’s a job but one without prospects and one that simply keeps the debt man (raptors) from the door.
https://www.nytimes.com/2017/02/09/business/europe-jobs-economy-youth-unemployment-millenials.html?smid=tw-nytimesworld&smtyp=cur&_r=1
Part time work feeds many problems down the line. If people are barely managing then how can they save for a rainy day? They cannot contribute to a pension for their retirement, a tab that will in all probability have to be picked up by the state. Tax increases?
Big business is screwing ordinary Joe now with part-time work and zero hour contracts. And will screw Joe later when Joe has to rely on a pittance of a pension from the government to survive.
Alternatively, people just fuel their own debt by taking out loans at exorbitant rates of interest and spend. Keeping up with the Jones’ is such fun – until the bubble bursts.
Nonetheless, at some point a state of listlessness creeps in, anxiety increases, stress leads to a host of other problems: break up of relationships, increase in violence fed by a growing anger, illness and crime.  Add a less than causal approach to productivity, all of which help to dampen the economy and force more fuel into the fire of discontent that has been growing.
Add to the mix the migrant crisis. These are people with as many aspirations as anyone else but many are finding that Europe is not the Promised Land. Lack of employment, trapped in camps, their culture clashing with local beliefs and other migrant groups. Desperate for the good life many enter illegally and too many become sub-human cheap labour for the profit hungry businesses.
“…traffickers are increasingly bringing in vulnerable people for the sex trade and as slave labour.”
Such is the problem created by traffickers that Frontex recognises that they are a       “…significant threat to the EU”.
On integration: “The high numbers of economic migrants – mostly with low educational qualifications and with a different cultural background – are not truly integrated into European societies. This causes social conflicts and critical perceptions of migration.”  http://frontex.europa.eu/assets/Publications/Risk_Analysis/Annula_Risk_Analysis_2016.pdf

Banksy

And the sanctimonious speak to their best friends: – see no evil – hear no evil – speak no evil!   Happy to smile for the cameras while playing politics with people’s lives!

Such is the political cauldron we live in today. There is but a tinge of hope that one day a door will open and objectivity will enter but alas – don’t hold your breath.
Do some good join – Robin Hood!