Posts Tagged ‘European Union’

Trade war tactics and strategy

March 5, 2018

Reuters reported that the European Union is considering applying 25 percent tariffs on American motorcycles, bourbon and blue jeans, if President Trump imposes new tariffs on steel and aluminum imports.

Motorcycles, bourbon and blue jeans?  Kevin Drum of Mother Jones explained the significance.

Hmmm.  Harley-Davidsons are made in—what?  Wisconsin, right?  In Menomonee Falls, actually, about 50 miles from Janesville, where Paul Ryan lives.  The Jim Beam bourbon distillery is in Clermont, Kentucky, about 20 miles from Mitch McConnell’s house in Louisville.  Levi’s is headquartered in San Francisco, about two miles from Nancy Pelosi’s house.

I think that’s a pretty funny example of trade war tactics.

Mike Whitney on U.S. anti-Russian policy

March 24, 2017

Will Washington Risk WW3 to Block an Emerging Russia-EU Superstate? by Mike Whitney for Counterpunch.

Map via Wikimedia

Will Brexit be the scapegoat for UK’s problems?

July 11, 2016

I can’t judge all the consequences to Britain of the vote to exit the European Union, but there are a few things I am sure of.

  • The United Kingdom had many serious economic problems before Brexit—financialization, the hollowing out of manufacturing, the decline of the British pound, unnecessary government austerity.
  • Politicians and journalists will use Brexit as the scapegoat and explanation of these problems, and an excuse for not doing anything about them.
  • If the UK joins the Transatlantic Trade and Investment Partnership, the Trade In Services Agreement or other corporate-sponsored trade agreements, it will lose whatever national sovereignty it gained by exiting the European Union.

LINKS

Why They Left by Costos Lapavitsas for Jacobin magazine.

‘I want to stop something exploitative, divisive and dishonest’—conversation with a Leaver by Oliver Humpage for Medium.

Britain is not a rainy, fascist island — here’s my plan for ProgExit by Paul Mason for The Guardian.

Brexit: the revolt of the losers

June 28, 2016

The dominant neoliberal economy sorts people into winners and losers.  Brexit is a revolt of the losers.

The winners are the credentialed professionals, the cosmopolitan, the affluent.  The losers are the uncredentialed, the provincial, the working class.

Losers are revolting across the Western world, from the USA to Poland, and their revolt mostly takes the form of nationalism.

The reason the revolt takes the form of nationalism is that the world’s most important international institutions—the World Bank, the International Monetary Fund, and the European Central Bank—are under the control of a global financial elite that does not represent their interests.

17149339-Abstract-word-cloud-for-Neoliberalism-with-related-tags-and-terms-Stock-PhotoI don’t fully understand the decision-making process in the European Union, but looking at its web site, my impression is that public debate is not a part of it.

The only vehicles for exercising democratic control, at the present moment in history, is through democratic national governments.  I am in favor of international cooperation, and I don’t know how I would have voted on Brexit if I had been British, but I certainly can understand Britons who don’t want to be at the mercy of foreign bureaucrats and the London governmental, banking and intellectual elite.

Democratic nationalism is the only form that democracy can take until there is a radical restructuring of international institutions.  Without a strong progressive democratic movement, the only alternative to neo-liberal globalization is right-wing anti-democratic populism as represented by Donald Trump, the United Kingdom Independence Party, Marine le Pen’s National Front in France, Greece’s Golden Dawn and others.

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Why did Germany abandon the good path?

July 29, 2015

A decade ago, looking at the state of the union the Bush administration, it seems to me that it was the European Union, and Germany in particular, had replaced the USA as the last, best hope of earth.  As recently as five years ago, I posted an article on Germany as an Economic Role Model.

Germany had seemingly created an economy based not on cutting costs, but on creating value, investing in people and worker participation in decision-making.  The Germans had learned how how to hold their own in international trade and still enjoy high wages, generous social benefits and excellent public services, without sacrificing civil liberties.

Or so I thought at the time.  But the Greek debt crisis shows Germany as much in the grip of a financial oligarchy as the USA was.

Germany.austerity16678The German leaders have embraced the idea, very familiar to us Americans, that the purpose of an economic system is not cooperation for mutual benefit, but to reward winners and punish losers.

The best way to help Greece’s creditors is to promote Greece’s economic recovery, so at least a portion of the debt can be repaid.  The austerity measures being imposed by the European Central Bank, European Commission and International Monetary Fund are driving Greece deeper into economic depression.  They are being imposed as a punishment and a deterrent.

The German leaders also have made the mistake of allowing central banks, rather than the public, to determine economic policy.   The problem with this is that bankers have different priorities than the public.

Broadly speaking, bankers want zero inflation and debts to be repaid in full.  All other things being equal, these are desirable goals, but not at the cost of rising unemployment, falling wages and non-functioning government services.

Unfortunately the European Central Bank is in charge of European monetary policy, and the public has nothing to say about its policies.   It is governed by a committee consisting of 19 national central banks and a six-member executive board appointed by the European Council.   I looked up “accountability” on the bank’s web site, and found that this consists of regularly issuing reports.

The best way to enforce accountability for the Greek debt crisis would be to investigate the Greek public officials and their banker advisers who created it, and determined whether they should be charged with malfeasance.  Instead the banks have been bailed out, and the public officials escape blame—much the same as in the 2008 financial crisis in the United States.

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As Greece goes, so go other debtor nations

July 13, 2015

The Greek debt burden is more than the people of Greece can ever repay.

But evidently the creditor nations will not accept this until Greece is bled dry.

Their “austerity” plan is for higher taxes, lower wages and higher prices and the sale of Greek national assets at bargain prices.

Greece is being treated like a nation defeated in war, and, like a defeated nation, it will never prosper until it can free itself from the power of its conquerors.

A trust fund created by Greece’s creditors will sell off 50 billion Euros worth of Greek national assets, with half the money to be used to pay Greece’s debt and half to recapitalize Greek banks.   Greeks will not have a voice in what is sold or at what price.

greece-debt-crisisHeather Stewart of The Guardian recently listed 23 nations that, like Greece, are in an external debt crisis, and 14 at high risk of an external debt crisis.

The 23 nations also in external debt crisis are Armenia, Belize, Costa Rica, Croatia, Cyprus, the Dominican Republic, El Salvador, The Gambia, Grenada, Ireland, Jamaica, Lebanon, Macedonia, Marshall Islands, Montenegro, Portugal, Spain, Sri Lanka, St. Vincent and the Grenadines, Sudan, Tunisia, Ukraine and Zimbabwe.

The 14 high risk nations are Bhutan, Cape Verde, Dominica, Ethiopia, Ghana, Laos, Mauritania, Mongolia, Mozambique, Samoa, Sao Tome e Principe, Senegal, Tanzania and Uganda.

My guess is that Ukraine is the next country in line to lose its national sovereignty to creditors; this is likely as soon as the government no longer needs financing to crush the rebellion in Donetsk and Lugansk.

We Americans should remember that the United States is a debtor nation like Greece, not a creditor nation like Germany, Japan or China.  What happens to Greece today and to Ukraine tomorrow could happen to the USA someday, too, when our debts are in yuan or some other currency instead of dollars.

LINKS

Beyond Greece, the world is filled with debt crises by Heather Stewart for The Observer.

Global Debt Can’t Be Paid by Briton Ryle for WealthDaily.

There are more TPPs in the pipeline

July 1, 2015

The Trans-Pacific Partnership is just the beginning.

POLITICO reported that four more trade agreements are now being negotiated.

Following Congress’ hard-fought approval of “fast-track” trade authority last week, U.S. Trade Representative Michael Froman vowed not only to complete the 12-nation Trans-Pacific Partnership but an even bigger pact with the European Union and three other major trade deals — all in the 18 months remaining in President Barack Obama’s term.

It could add up to the biggest trade blitz in history, transforming the rules under which the world does business.

sw0625cd_590_356“We’ve got a lot of pots on the stove,” Froman told POLITICO while watching senators cast their final votes to send the legislation to the president. We want to get TPP done and through Congress. We want to get TTIP negotiated. We’re going to finish ITA. I’m hoping to finish EGA and TISA.”

Those would be, in order: the Transatlantic Trade and Investment Partnership agreement with the European Union, an even bigger pact than the TPP in terms of economic size; the World Trade Organization’s Information Technology Agreement, which covers about 97 percent of world IT trade; the Environmental Goods Agreement, accounting for 86 percent international commerce in green goods; and the 24-party Trade in International Services Agreement, which involves three-quarters of the United States’ gross domestic product and two-thirds of the world’s services, such as banking and communications.

via POLITICO.

I’d heard of the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TISA), but not the Information Technology Agreement or the Environmental Goods Agreement until now.

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Squeezing Greece won’t help German people

February 14, 2015

The Greek debt crisis is not a conflict between Germany and Greece.   It is the European Union acting as a debt collection agency for central bankers.

German working people get no benefit from the demand that the government of Greece impoverish the people of Greece so as to pay interest to the European Central Bank and the International Monetary Fund.

Cartoon by David Simonds. Angela Merkel's hard line on debt threatens the euro project.They in fact will suffer in the long run, because the more wages and living conditions are driven down in other countries, the harder it will be to maintain them in Germany.

Some five years ago, I wrote a post about how Germany was a good role model for the USA, because its leaders were committed to industrial productivity and a high-wage economy.   Unfortunately, the German leaders instead have taken the USA as a role model, and followed our downward path of financialization.

I believe that people who borrow money have a moral obligation to pay it back—if they can.  I believe that there are other moral obligations that take precedence, such as the welfare of those who depend on you.  That’s why the United States and other nations substituted bankruptcy laws for debtors’ prisons.

The Greek debt problem would have solved itself if Greece had its own currency instead of the Euro.  As Greece’s balance of trade worsened, its currency would be devalued and its products and services (including the tourist industry) would become cheaper in terms of dollars and euros.

The great fear of the “troika”–the ECB, IMP and the leaders of the European Union–is that Greece will stop using the euro, and that some of the other 17 countries that use the euro will follow suit.  That might be a problem for bond-holders.  I don’t see it as a problem for ordinary people in Germany, the USA or any other country.

LINKS 

It’s the class conflict, stupid! by David Ruccio on occasional links and commentary.

Europe: Shaking the Temple by Conn Hallinan for Dispatches from the Edge.  (Hat tip to Bill Harvey)

From Minsk to Brussels, it’s all about Germany by Pepe Escobar for RT Op-Edge.

 

Europe’s alternative to Putin’s oil and gas

October 20, 2014

gasSupplyAndDemand

Map: Global Research

Dependence of key European nations on imports of Russian oil and gas puts the European Union in weak position in relation to Vladimir Putin.

One way to get out of that position of weakness is to end the sanctions against Iran, and import Iranian oil and gas.  In the longer run, Europe would benefit from a new gas pipeline from Iran to Europe.

The European Union has no conflict of interests with Iran.  It is following the lead of the United States.  As far as that goes, the United States has no conflict of interests with Iran.  We Americans are merely nursing old resentments and following the lead of Israel and Saudi Arabia.

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Breaking Europe’s Putin addiction by Amir Handjani for Al Jazeera.

‘Drill, tovarich, drill’: Putin’s economic dilemma

September 4, 2014

russia.exports

Vladimir Putin’s Russia is a great military power with a backward economy.

Without a strong manufacturing base, Russia’s economy depends sale of oil and natural gas, which are non-renewable.   This means that, unless Russia changes direction, it is fated to become a resource colony of China or the European Union.

Economic sanctions promoted by the USA could be an opportunity for Russia to develop its domestic industries and its internal market, much as the infant USA did when it was cut off from trade with Europe prior to and during the War of 1812.  But according to this article by Mikhail Matveev for Inter-Press Service, Russia is going in the opposite direction.

The recent call from Russian Prime Minister Dmitry Medvedev for “tightening belts” has convinced even optimists that something is deeply wrong with the Russian economy.

No doubt the planned tax increases introduction of a sales tax and increases in VAT [1] and income tax will inflict severe damage on most businesses and their employees, if last year’s example of what happened when taxes were raised for individual entrepreneurs is anything to go by – 650,000 of them were forced to close their businesses.

Nevertheless, it looks like some lucky people are not only going to escape the “belt-tightening” but are also about to receive some dream tax vacations and the lucky few are not farmers, nor are they in technological, educational, scientific or professional fields – it is the Russian and international oil giants involved in oil and gas projects in the Arctic and in Eastern Siberia that stand to gain.

“In October [2013], Vladimir Putin signed a bill under which oil extraction at sea deposits will be exempt from severance tax.  Moreover, VAT will not need to be paid for the sales, transportation and utilization of the oil extracted from the sea shelf,” noted Russian newspaper Rossiiskie Nedra.

[snip]

In fact, the line of thinking adopted by Russian officials responsible for tax policy is very simple. Faced with the predicament of an economy dependent on oil and gas half of the state budget comes from oil and gas revenue, while two-thirds of exports come from the fossil fuel industry, they decided to act as usual – by stimulating more drilling and charging the rest of the economy with the additional tax burden.

Matveev wrote that Russia, like other countries, suffers the bad effects of global climate change caused by fossil fuel emissions.  The Russian economy is at risk, he wrote, if the USA or European Union ever achieve their announced goals for shifting to renewable energy sources.   I don’t think the latter is as likely as Matveev seems to think.

The fact that economic sanctions cause serious problems to Russia does not mean that they are a good idea.  Weaker nations than Russia have survived U.S.-led economic sanctions, and the economic war with Russia hurts European Union countries as much or more than Russia.

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EU pact makes Ukraine a colony

July 1, 2014

When Poland and the Baltic states joined the European Union, the EU invested in the infrastructure of these countries to bring them closer to the economic level of other European countries.

Economist Michael Hudson said, in an interview with the Real News Network, that the exact opposite is happening with Ukraine’s association agreement with the EU.

Ukraine will not be a member of the EU, will not get any EU investment and will not get any relief from its financial obligations to the International Monetary Fund and European banks, but will open itself up to have foreign investors buy up its assets at bargain prices.

Supposedly the 28 countries of Europe will be opened up as an export market, but, as Hudson asked, what does Ukraine have to export that European countries want?  Formerly Ukraine’s chief exports were military equipment made in Soviet-era factories for Russia.   Now that market is cut off and Russia will build its own armaments factories.

Hudson said the Ukrainians to benefit from the agreement will be that nation’s ruling kleptocrats.

The trouble with internationalism

May 29, 2014

I would like to see a world at peace, and I would like to see international institutions capable of settling disputes and addressing global problems such as climate change and nuclear arms.   Unfortunately these are not the kinds of international institutions that we the people are being asked to support.

Foreign Currency ExchangeThe most powerful global organizations, with the possible exception of the Roman Catholic church, are international banks and corporations.  International institutions such as the World Trade Organization, the International Monetary Fund and the European Central Bank enforce rules that serve the interests of banks and corporations.

The proposed Trans Pacific Partnership Agreement and similar proposals would give the world’s corporate and financial elite new tools for enforcing their agendas.  While there is urgent need for international agreement and institutions to deal with climate change, TPP-type agreements actually would give corporations the right to appeal national laws and local rules aimed at limiting greenhouse gasses.

What makes the banks and corporations powerful is that money can go anywhere while most people are stuck where they are. Migrant money is treated with deference.  Migrant Mexicans in the United States, migrant Uzbeks and Kazakhs in Russia, and migrant Filipinos in the Persian are treated like dirt.

The European Union’s current austerity program is an example.  The well-being of Europe’s people is being sacrificed to ensure that Europe’s banks never suffer losses.   I’d guess this is the main reason for the success of Europe’s nationalist right-wing parties in the recent elections to the European Parliament.

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