Europe 2020: Merchandising By Any Other Name

Following in the footsteps of the Lisbon Strategy, Europe 2020 was devised by the Barroso Commission as a common growth scheme for the European Union. The need for such a plan arises from the reality of the European economy in the past decades, one of slow growth and even stagnation. It is not as if Europe is not economically successful; it rather matters that its lead is wearing out against new emerging markets.

The impetus for this plan also arises from the fear that Europe’s social democratic model is highly dependent on growth for the maintenance of social endowments and that without it, such benefits will have to be phased out. The politicians who are to do it will likely be electorally punished as a consequence. French president Nicolas Sarkozy is one such paradigmatic example. His increase in the retirement age was economically sound but politically damaging.

What then could make Europe grow? It certainly cannot rely on natural resources as it is a small territory and demographically dense. Even when resources are discovered like recent findings of shale gas in Poland, their exploration does not suffice to fuel an entire national economy.

Europe certainly cannot compete in production either as the emerging economies possess cheaper labor and bigger markets.

Shopping for competitive economic models, Europeans came to the so-called “knowledge based economies.”

Drawing inspiration from the Asian tigers and Western economic miracles as Israel, Switzerland and the Scandinavian countries, it was determined that given enough funding, the educational system could be made the cornerstone of economic growth in Europe as a whole. The old continent was to become a huge Silicon Valley and economically compete with high end technology in the global market, thus offsetting losses in production delocalization — to emerging economies — or raw materials dependency — since the advent of decolonization.

The rationale isn’t as logical as it may appear however. In Asia and in the West, economies as those of Denmark, Hong Kong, Israel, Singapore and Taiwan are successful due to very specific conditions that Europe as a whole does not share.

These are small economies. It is easy to apply a single economic model to a small territory. One can find paradises of prosperity in even the largest of the poorest countries but that does not mean that the entire economy can follow the same path.

One of the main foundations for prosperity is access to sea and the facilities in commerce that arise wherewithal, which continentally sized territories cannot emulate.

Proportionately however, it is not possible for a large economy to specialize itself in anything because both manual and white collar labor are needed. There is then an invisible threshold of how many college graduates Europe can absorb which cannot be artificially expanded.

In the aforementioned nations, we are dealing with homogeneous societies. Political reforms and labor specialization are much more likely to naturally occur in small agglomerates of population than in large and diverse ones. Europe, by contrast, is very diverse in its cultural and geographic circumstance.

Finally, there is the question of productive work ethics. In Asia as in Europe, the more northern populations possess the most productive mentality. What has caused this divergence remains topic of academic debate. What is clear is that the northern hemisphere is the most industrialized while most of the pockets of similar economic development in the south are in territories which were heavily colonized by northern populations.

Just as Hong kong, Singapore and Taiwan are all ethnically Chinese, Switzerland and the Scandinavian countries are all protestant societies while Israel was heavily settled by Ashkenazi Jews coming from these same nations.

The point to retain here is that the very specific conditions which originate knowledge based economies in the aforementioned countries are not present in a territory as big as Europe and cannot therefore be extrapolated as a solution for its economic woes.

This ‘strategy’ is then a mere political artifice that contributes little other than feeding hope to an electorate whose representatives depend on popularity to politically survive; an artifice which ultimately prevents painful yet necessary reforms from being undertaken at the earliest and most opportune juncture. Austerity would need to be accompanied by structural reforms that would limit the size of the state apparatus, foreign policy would need to be reformed into a less charitable and more cunning agenda and the Single Market would have to diversify the individual strengths of each economy rather than supposedly trying to make them all uniform according to unreachable standards, such as those of the Nordic economies.

Europe 2020 is not so much a strategy as it is an escape forward; a passing of the hot potato.

The Problem with “Zero Problem Neighborhood”

While changes began in the foreign policy domain right from the onset of Prime Minister Recep Tayyip Erdoğan’s government, it was only in his second term, and after the nomination of Ahmet Davutoğlu, that Turkey’s foreign policy acquired a more “independent” flavor. Davutoğlu has been lauded for his “zero problem neighborhood” vision, but, as things stand today, there seems to be little merit for that praise.

Foreign affairs is one of those portfolios with peculiar pros and cons: there can be plenty of popularity gains for a foreign minister, who gets to socialize with international leaders and opinionmakers, but there is also the inherent uncertainty of securing results as diplomacy depends on at least two interlocutors and the government he belongs to is but one of them.

That said, it is one thing for a particular diplomatic initiative to founder into political oblivion; it is another altogether to turn a would-be close ally into a soon to be mortal enemy, as was the case recently in Turkish-Syrian relations. Read more “The Problem with “Zero Problem Neighborhood””

Berlin Consensus Redefines European Union

Europe is at a crossroads. The European model is failing and the Brussels Consensus seems to be at an end.

Until now, Europe was managed through careful compromise, centrism was the rule and social democracy the means.

The Brussels Consensus consisted in economic deregulation coupled with environmental and social caveats, all bungled together with an agreement in promoting human rights worldwide.

This consensus has been at the base of the acquis communautaire (“common body of law”) subsequently reflecting itself in the Copenhagen criteria for accession to the European Union and the Maastricht criteria for economic harmonization.

The consensus was the result of decades of negotiation and compromise between, fundamentally, France and Germany.

In 1957, the Rome Treaty was signed giving way to the Coal and Steel Community and Euratom, after Paris and Berlin had agreed to allow West Germany into the European community of nations politically and economically but protecting in the process the French steel industry which would have underperformed under free-market competition with Germany.

Decades later, with a much enlarged EU, the method was still the same: in the negotiations for the Maastricht Treaty and the Treaty of Amsterdam, French agriculture was protected through subsidization and the Deutsche Mark formed the basis for the euro currency in return for the permission to reunify the two Germanys.

The construction of Europe was political. Angela Merkel referred to it in her Brugge speech as the “Union method,” a hybrid between Jean Monnet’s gradual federalist “community method” and the pure and classic “intergovernmental method.”

Whenever an exception emerged against the consensus, there was an immediate ostracizing reflex by the community as a whole. Britain was often sidelined in spite of its economic and political importance and this tendency eventually came to be institutionalized as the opt out mechanism. The British faced difficulties even joining the European Economic Community and remain to this day outside of the euro area group.

Weaker countries such as Austria saw themselves ostracized diplomatically when they elected politicians (anti-immigration far-right leader Jörg Haider) from outside of the politically correct ideological spectrum and elections for the European Parliament were even more blatantly affected by this trend with candidates for the Barroso Commission being pushed away due to their ideological convictions (anti-gay rights Rocco Buttiglione).

In essence, Europe’s social democracy run system depends on a political compromise over most matters with dissenting voices being unwelcomed. However, Europe’s current tribulations are economic rather than political and they seem to require a clear radical and stark choice: more integration or none at all.

The maintenance of the euro is untenable according to many economists. Long-term sustainability is threatened by the partial financial integration process of the seventeen currencies which saw interest rates harmonized but not the labor market, where the European Central Bank fights inflation and capitals are free to move across borders but economic policies are still run separately. This gives rise to too many externalities and distortions and cannot be maintained.

The problem now is that the Brussels Consensus of political compromise as a solution for all problems is insufficient to handle the crisis.

Germany has been living in paradise being able to import basic agricultural products and cheap manufacturing goods making use of its strong currency but exporting back high end technology and industrial products which bring it greater comparative returns. There is nothing wrong with a semi-protectionist policy so long as international integration is not at stake. But Berlin cannot on one hand uphold “cohesion policies” aimed at streamlining development in Europe and on the other maintain a constant positive commercial balance.

Chancellor Merkel still lives in the past though. The “fixes” being applied to the Greek economy are nothing but band aids and will not solve Greece’s structural problems.

The other Mediterranean states look at Greece and are alarmed at how badly the lab rat is doing. They will push for a different agenda. Germany will have to eventually make an unpopular choice — escape forward or escape backward.

For the moment, Merkel is trying to escape making such a choice and keeps hoping to jump start the Greek economy but this populist stance deprives her of statesmanship. Angela Merkel is no Margaret Thatcher, even if her political career may turn out to be longer. It may be difficult, and even implosive for Europe, to generate a Berlin Consensus but in this case it seems to be more urgent to try and fail rather than not act at all. Ultimately, as a closet Euroskeptic, Chancellor Merkel simply lacks the political courage to give federalist elites in Europe a fatal diagnosis.

In the meantime, while Europe does not sort out its internal shortcomings, European power projection abroad will remain feeble and the Europeans will continue to be ignored in the most pressing issues of today’s international scene.

Brain Drain, Soft Power and Orientalist Revolutions

There is a narrative at work. Man has evolved from a savage uncivilized species to a level of sophistication which is today best exemplified by the Western world. This view of history is linear, it allows only for Hegelian progress and it is also ethnocentric since it makes Europe and America the leaders of human progress. Huntington’s “Western civilization” concept reflects this view.

When large political upheavals take place, most of the commentariat resorts in a Pavlovian fashion to this narrative to explain them. Thus is the case with all the series of revolutions since the fall of the Berlin Wall. The Velvet Revolution, the color revolutions and now the Arab Spring are all framed as being just one more step in the world’s adaptation to the Western concept of society and civilization. But are they?

If that were the case would they all happen to happen in Europe’s periphery? We have not seen dominos fall in sub-Saharan Africa, in South Asia or in the Far East.

The truth as British historian Timothy Garton Ash puts it is that:

One might suggest that the best chances are to be found in semiauthoritarian states that depend to a significant degree, politically, economically and, so to speak, psychologically, on more democratic ones — and most especially when the foreign states with the most passive influence or active leverage on them are Western democracies.

NATO states gave their best efforts to influence the elites of the Central and Eastern European states during the Cold War. Propaganda and subversion activities aside, even if very few of these intellectuals actually visited the West, Western books and culture were predominant in the world and therefore also, to a degree, behind the Iron Curtain. It is no surprise that Western influence continued to be felt in spite of Soviet censure since that had always been the case prior to the Cold War. Russian, Polish or Serb elites had always drifted westward in search of inspiration and that did not change with the old continent’s division in ideological blocs.

The same holds true for the color revolutions in Russia’s “Near Abroad.”

What to make of the Arab Spring? Unfortunately the same. It is not just a matter of European neighbors being demographically bigger and economically stronger; it is also the fact that the international narrative is dominated by European encultured states and societies: Europeans have colonized most of the world and the cultural standard is today a socially liberal, free-market economy-oriented, democratically-ruled nation state.

Phenomena such as brain drain and soft power only further emphasize this tendency. Where do the wealthiest and brightest Arabs study and obtain their entertainment if not in Europe and America? Sayyid Qutb sensed this very phenomenon and called it Jahiliyyah — referring to the prevalent “ignorance” prior to Islamic rule to categorize a contemporary prevalent corruption from within which hinders Islamic values.

What is important to understand is not that Western values are wrong but that they aren’t absolute. They may make sense to Westerners but not necessarily to other cultures and it is wrong to frame every political struggle as a conflict aiming at emulating the West. This has been done before by the Orientalists who analyzed Eastern cultures only by holding them to a Western standard.

The consequence of this narrative is a growing décalage between the perception of reality and reality itself. Al Jazeera is a perfect example of a corporate culture which is embedded with graduates of European and American universities and which covered the Arab Spring — and the terminology here is telling — as a struggle for democracy and liberalism, as if the values of the nonsecular protesters who prayed in Tahrir Square were reason for shame.

The mishaps of this décalage are evident in all of these cycles of revolution with socially conservative and illiberal parties and politicians “surprisingly” emerging in Central and Eastern Europe and the Arab world. Who knew that the same people who toppled dictators were prejudiced against homosexuals and Jews? Antisemitism, Euroskepticism, homophobia or misogeny are just some of the most depressing gifts that media such as Al Azhar magazine or the Polish Radio Maria bring us from these revolutions.

The most direct effect is counterrevolution and reactionary movements which view Western intervention and influence as intrusion in domestic affairs and turn to Moscow or Beijing for investment, trade and strategic relations.

Liberal elites are frequently the vanguard of revolutions in the West’s periphery but the people these intellectuals claim to speak for and liberate don’t often identify themselves with their Washington Consensus agendas. The Arab revolts cannot be Twitter or Facebook revolutions when most Arabs don’t use the Internet, much less in English, and they should never have been portrayed as liberal democratic revolutions when those values are indigenous only to Europe and European colonized territories.

Portugal’s Despondency Likely to Endure

Portuguese politics can be called “traditional”, but the term is used pejoratively.

As is the case in many Mediterranean countries, Portugal’s lack of a political culture and strong civil society have driven it to mismanage the political freedoms it acquired during the 1970s when the authoritarian government was replaced by a democratic one.

Similarly, it failed to properly manage the financial backing it gained by joining the European single currency in the early 2000s. Read more “Portugal’s Despondency Likely to Endure”

Samantha Power, the Millennials’ Savonarola

Like the sensationalist political pamphlets of the early stages of the printing age, today’s humanitarian activists’ purpose is to, artificially, stir public sentiment through their writing.

Samantha Power’s manifest A Problem from Hell: America and the Age of Genocide (2003) and the professor’s rhetoric seem to nowadays produce the same effect on those who read it.

Early in the last decade, when the name Paul Wolfowitz was controversial, Power had nothing but compliments for the Bush Administration’s “Iraqi Freedom” hawk. An uncomfortable truth considering that the Democratic Party withdrew its endorsement of the invasion of Iraq once weapons of mass destruction were found not to exist. Certainly if one takes into consideration that for some in the ranks of its pro-war intellectual base, the weapons were never the issue (mirror image apropos of French foreign minister Bernard Kouchner). But an even bigger embarrassment if we take into account that she currently sits on President Barack Obama’s National Security Council. Read more “Samantha Power, the Millennials’ Savonarola”

After Libya, Europe’s New Order in the Making

For all his blunders, George W. Bush may forever be remembered for vindicating the notion of the “coalition of the willing.” Until the world wars, all military alliances were in fact ad hoc and it was only the messianic Western prejudices that followed the defeat of absolutism in World War I, fascism in World War II and communism in the Cold War, that temporarily deluded the Western masses into thinking that an “alliance” should have a noble, morally righteous connotation.

The campaign to oust Colonel Muammar Gaddafi’s regime in Libya started as a simple ad hoc coalition led by Paris and London. Only later did it become embroiled in international politics with the likes of Rome and Berlin seeking to exercise some moderation by forcing the British and the French to accept NATO leadership and a subsequent bureaucratization of the intervention into inefficacy. Read more “After Libya, Europe’s New Order in the Making”

The Devil We Know

The balance of power in the Indian Ocean rim has been degrading for some time but China’s recent decision to sell submarines to Pakistan threatens to further upset South Asia’s fragile nuclear balance. The question we must ask ourselves is “who do we want counterbalancing India’s naval might in decades to come?”.

Pakistan is weak and not getting any better. It is an artificial polity and much of its problems stem from that very fact. It lacks a cohesive core ethnicity, it lacks geographical coherence (the Indus valley having never been an easily defensible position without strategic depth) and its demographic-raw materials proportion is worsening due to population growth.

What Pakistan has in abundance is geostrategic relevance. All those interested in counterbalancing India (China), Iran (Saudi Arabia) and Russia (the West) have a permanent and vested interest in propping up Pakistan.

For this reason, Pakistan’s military apparatus always has been and always will be powerful. While the Pakistani army and air force have made the difference in their wars with India and in small deployments to the Middle East (against Israel and later in support of Saudi Arabia in Yemen), Pakistan’s navy has long been the weaker branch. India always managed to control the sea lanes when in conflict with its rival. Read more “The Devil We Know”

The Distorted Legacy of Vietnam

As far as the Vietnam War is concerned, conventional wisdom is dominated more by ideological perception than historical fact.

The proponents of the “soft power” doctrine might call it “soft victory.” A victory practically in name only was what the socialist bloc could claim in Southeast Asia. For the nineteen years of its duration, the conflict in Vietnam took countless lives and left the country’s economy in shambles. This was a conflict desired only by the socialist countries which therefore owe some explaining in regards to their “victory.”

However brutal the South Vietnamese regime may have been, it did not interfere with communist operations north of the 17th parallel. It also abstained from engaging in the same Maoist inspired grand projects that Hanoi invested in, much to its later disillusionment.

In short, the onus of belligerence falls entirely upon the North Vietnamese and their Chinese and Soviet patrons. Read more “The Distorted Legacy of Vietnam”

The Ants and the Grasshoppers

Nicolas Sarkozy Barack Obama
Presidents Nicolas Sarkozy of France and Barack Obama of the United States are reflected in a mirror during a bilateral meeting in Caen, June 6, 2009 (White House/Pete Souza)

The advent of new governments in many countries around the world during the first decade of the twenty-first century brought with it strategic indefinition. The reason is found in small systemic revolutions that some of these newcomers represented in terms of geopolitics. In such countries as Brazil, Japan and Turkey, the newcomers had been away from power for decades. Thus the elections that swept them into office were practically regime changes. Read more “The Ants and the Grasshoppers”