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Austerity: The History Of A Dangerous Idea
Canada has now been governed for some time by conservatives who allegedly care about deficits and debt, yet when the implosion of American banks dragged Canada into a recession, our government started spending far more, not less. Years later, we continue to spend into the red and our debt lurches ever higher. By contrast, even since the ascent of the Conservative Party in London, the U.K. has been biting a fiscal bullet. They have chosen to trim government spending in the hope of jump-starting future economic growth—in a word, austerity. According to Mark Blyth, this is a bad idea: “Austerity doesn’t work. Period.” Believing it only persists due to “epistemic arrogance and ideological insistence,” he sets out to trace the intellectual history of austerity, going back to its roots, from Adam Smith, David Hume and John Locke to more recent proponents like Joseph Schumpeter, Friedrich Hayek and current German leader Angela Merkel. Then Blyth gives us a decidedly discouraging historical tour of austerity in action, which among other things makes us feel sorry for Great Britain’s prospects.
Blyth, a professor at Brown University, is an unusually gifted communicator of complex economic ideas. But though he pens such colloquial sentences—“Iceland, in many ways, was Ireland on crack”—this book is most suitable for readers with at least an intermediate familiarity with macroeconomics. Blyth does not pause long to explain the importance of bond yields. Yet his book provides a rich background for understanding the policy options facing those who would solve the ongoing Euro-crisis. Blyth also revisits the momentous American decision to bail out its banks, which continues to prompt Republican murmurings about the necessity for belt-tightening. Insofar as the United States and Europe have a debt crisis, it is partly the result of a banking crisis. Bank bailouts created much of the debt that we hear so much hyperventilating about. As for puny Iceland, it chose to let its toxic banks go bust, and its economy is now doing rather well.
Blyth is too rigorous to be an ideologue. He thinks austerity measures have their place, but only under the right conditions. Now, apparently, is not such a time.
via Austerity: The History Of A Dangerous Idea – Bookmarked, Books – Macleans.ca.
Thousands in Germany protest NSA surveillance
AP)—Thousands of people are taking to the streets in Germany to protest against the alleged widespread surveillance of Internet users by U.S. intelligence services.
Protesters, responding to calls by a loose network calling itself #stopwatchingus, braved searing summer temperatures Saturday to demonstrate in Hamburg, Munich, Berlin and up to 35 other German cities and towns.
Some wore tinfoil hats to shield themselves from the sun—and make a political statement about warding off unwanted eavesdroppers.
Others held placards showing support for National Security Agency leaker Edward Snowden.
Chancellor Angela Merkel raised the issue of the NSA’s alleged interception of Web traffic when U.S. President Barack Obama visited Berlin last month. But German opposition parties remain skeptical of the government’s claim that it had known nothing about the surveillance.
Read more at: http://phys.org/news/2013-07-thousands-germany-protest-nsa-surveillance.html#jCp
How Europe’s Solution for Economic Crisis is Actually the Problem
Europe‘s current crisis is more than economic. Between the German government advocating a dangerous austerity policy and European authorities lacking any other suggestions, it is clear that the 2008 financial crisis is no longer solely responsible for the downward spiral of Europe.
The GDP for countries in Europe has fallen by a considerable amount: 5.3% for Greece, 3.9% for Portugal, 4.1% for Cyprus, 2.3% for Italy, and 2% for Spain. This is without even mentioning the recession into which France is entering. In the first quarter of this year, the European Union economy contracted by 0.7%, or one percent when only taking into consideration the eurozone.
If it was only the 2008 economic crisis that was responsible for all this, Europe would not be one of the only one to suffer so much. For example, the United States, the birthplace of this crisis, registered a 1.9% increase in their economy in 2013 [fr] while their unemployment rate was at its lowest in four years.
Europe, which for a long time has aimed to maintain growth that compares favorably with United States, now finds itself completely lost among incoherent policies and disputes between countries[fr].
One of the main reasons for this current instability in Europe is the evident failure of the European policy authorities when their proposals seem more than enigmatic. Restricting interchange fees as proposed by Michel Barnier, the European Union Commissioner for the Internal Market and Services, is a perfect example of the Commission taking measures that will not have any concrete impact.
Capping interchange fees, bank charges paid by retailers when they make a card payment, would not only increase personal bank charges [fr], as the banks would want to recuperate the money lost by this cap, but the retailers profit margin will also increase, as they rarely lower their prices just because their costs have decreased.
The other significant issue which has notably accelerated the decline of Europe is the restricted austerity policy which the majority of EU countries have undertaken. It would be more logical for Europe to take inspiration from the countries that have pulled through, i.e. the United States, in order to stimulate the market rather than only focusing on reducing the deficit.
Youth unemployment rate in Europe between 2005-2013 via Les Crises – public domain
The most frustrating aspect about this issue is that the majority of the European leaders agree on this point, but no one dares to confront the life-long defenders of austerity, also know as « Sparkurs » [de] in Germany and its strict chancellor, Angela Merkel [fr]. But there are also critics of austerity on the German side. Last week, Gilles Moëc, head economist at Deutsche Bank, admitted to the news outlet Agence France-Presse that “there were some errors” [fr] in the selected strategy.
However, it’s not as if the Merkel method was fully tried and tested, in fact, it was far from it. Portugal, for example, had never been in such a terrible state until it was subjected to the European austerity policy. In two years, its unemployment rate increased by 5.3%, its budget deficit by 1.1%. As for its public debt, it’s now 123% higher than its GDP.
Julio Salazar Moreno, Secretary-General of Spanish worker’s trade union, USO, believes that the countries within the European Union need to stop with the austerity policy [pt], according to online newspaper Público:
Os países da União Europeia (UE) têm de parar “de uma vez por todas” com a aplicação de medidas recessivas, porque os cidadãos, alerta, estão a viver no limite dos sacrifícios
The countries within the European Union (EU) must refrain from enforcing austerity policies “once and for all” because the alert citizens are living at the very limits of their possible sacrifices.
The sledgehammer approach is just as inefficient for Greece, claims Gregor Gyzi, a president from a left-wing parliamentary group in Germany, Bundestag, by addressing the Greek readers [el] of news247:
οι επιβληθείσες, κυρίως από την γερμανική κυβέρνηση, περικοπές σε μισθούς και συντάξεις, οι απολύσεις και οι ιδιωτικοποιήσεις, όχι μόνο ώθησαν την Ελλάδα σε βαθιά ύφεση και κοινωνικά προβλήματα, αλλά κατέστησαν και αδύνατη την επιστροφή των δανείων στο εγγύς μέλλον
Imposed primarily by the German government, salary and retirement cuts, redundancies and privatisations, are not only going to push Greece into a major recession and cause social problems, but its also going to make loan repayments equally impossible.
Emigration figures for Europe are also far from surprising. In two years, 2.5% of the Portuguese population left the country. Who would have said ten years ago that today many Europeans would leave the continent to work in countries like Angola or Brazil?
Facing this alarming development, it is even more depressing to hear the responses of others, like that of the Prime Minister of Luxembourg, Jean-Claude Juncker, also the former minister of the Eurogroup, who recently gave his thoughts on the European crisis [fr] and concluded that what Europe needs is some “TLC”: a statement which speaks for itself.
Written by Laurent Delors · Translated by Hayley Warden
NSA Snooping: The War on Terror Is America’s Mania- The View from Germany
The NSA spying scandal shows that America’s pursuit of terrorists has turned into a mania. Spying on citizens is as monstrous and unlawful as Guantanamo Bay and drone warfare. The German government‘s response has been woefully weak.
America is sick. September 11 left it wounded and unsettled — that’s been obvious for nearly 12 years — but we are only now finding out just how grave the illness really is. The actions of the NSA exposed more than just the telephone conversations and digital lives of many millions of people. The global spying scandal shows that the US has become manic, that it is behaving pathologically, invasively. Its actions are entirely out of proportion to the danger.
Since 2005, an average of 23 Americans per year have been killed through terrorism, mostly outside of the US. “More Americans die of falling televisions and other appliances than from terrorism,” writes Nicholas Kristof in the New York Times, and “15 times as many die by falling off ladders.” The US has spent $8 trillion on the military and homeland security since 2001.
America has other threats. The true short-term danger is homegrown: More than 30,000 Americans are killed by firearms every year. An American child is 13 times more likely to be shot than a child in another industrialized country. When it comes to combating the problem, President Barack Obama and Congress are doing very little — or, to be fair, nothing at all. They talk about it every now and then, after every killing spree. The gun lobby, incurably ill, counters that the weapons are necessary for self-defense.
And when it comes to real long-term dangers, such as climate change, America, its prime perpetrator, does nothing — or, to be fair, too little too late.
As Monstrous as Guantanamo
Eleven and a half years later, Guantanamo Bay detention camp is still up and running.
All of this is not to say that terrorism doesn’t exist: 9/11 happened, and al Qaida is real. But spying on citizens and embassies, on businesses and allies, violates international law. It is as monstrous and as unlawful as Guantanamo Bay, where for 11 and a half years, men have been detained and force-fed, often without evidence against them, many of whom are still there to this day. It is as unlawful as the drones that are killing people, launched with a mere signature from Obama.
There has been virtually no political discussion about all of this. Attacks have been prevented through the spying program — Obama says it, German Chancellor Angela Merkel says it, and we have to believe them. Voters and citizens are akin to children, whose parents — the government — know what is best for them. But does the free America that should be defended even still exist, or has it abolished itself through its own defense?
An American government that gives its blessing to a program like Prism respects nothing and no one. It acts out its omnipotence, considers itself above international law — certainly on its own territory and even on foreign ground. The fact that it’s Obama behaving in such a way is bleak. If this were happening during the administration of George W. Bush, we could at least think, “It’s just Bush. He’s predictable. There is a better America.” Now we know: There is only one America. Did Obama, the Harvard Law student, even believe what he was saying in his speeches about the return of civil liberties? Can someone be so cynical that they promise to heal the world, then act in such a way all the while giving the xenophobic explanation that only foreigners would be monitored? Martin Luther King and Nelson Mandela are Obama’s role models. What would they say?
The Stasi Comparison Stands
The German government has shown devastating weakness. Merkel should say, “You are manic, and what you are doing is sick.” That’s what friends do. Instead she weighs every word to avoid annoying the Americans. She said that a comparison between the NSA and the Stasi is inappropriate, but she’s wrong. A comparison doesn’t require that two things be identical. The Stasi destroyed families, the NSA probably not. But the use of technology, the careful nurturing of the image of the enemy, the obsessive collection of data, the belief of being on the right side, the good side: Is there really no resemblance?
Angela Merkel promised to defend the German people from harm. To have your phone wiretapped and accept the fact that every one of your emails could be monitored — the violation of the private sphere — that qualifies as harm.
Every voter knows that realpolitik can be ugly, because politics require the balancing of many considerations. The decisive question is: What greater good justifies this breach of law by the US and the cooperation of German agencies? It is time for answers.
via SPIEGEL Commentary on US Internet Surveillance – SPIEGEL ONLINE.
The Irish bail-out programme: The meaning of exit
WHEN tapes of conversations between senior executives at the failed Anglo Irish Bank at the height of the financial crisis in 2008 were leaked in June, Irish credibility as a true penitent among the five bailed-out euro-zone countries took a knock. At last month’s European summit Angela Merkel, the German chancellor who calls the shots in the 17-state currency block, expressed her contempt for the bankers’ conduct, which included crass anti-German sentiment.
But any fears that this unwelcome reminder of past sins and sinners might upset Ireland’s path to exit from the rescue programme have been short-lived. This week’s review by the troika – the European Commission, the European Central Bank (ECB) and the IMF – concluded that Ireland should be able to leave on schedule by the end of 2013. That’s precisely three years after fiscal and banking woes forced the Irish to go cap in hand for €67 billion ($87 billion) of official loans from Europe and the IMF.
A punctual Irish exit has seemed likely for some time if only to show that the German-inspired programmes of austerity and structural reform can work. The worse things get in other bailed-out countries – Greece, Portugal, Cyprus and Spain (for its banks) – the more that Ireland is favoured. Thus Portugal’s recent political ructions, which has caused the planned inspection by the troika on July 15th to be postponed, have strengthened Ireland’s hand.
Moreover, Irish debt managers have deftly exploited chances to raise funds as Ireland’s fiscal credibility improved and its bond yields subsided. They have benefited along with the other crisis countries from the ECB’s commitment last September to make unlimited purchases of bonds in secondary markets under strict conditions – its “Outright Monetary Transactions” (OMT) programme, which has proved so successful a deterrent that it has not yet been used. Helped by the debt-management agency’s forays into the markets, the Irish government is now fully funded into early 2015.
That’s handy because on the economic front things haven’t been going so smoothly. Irish cheerleaders can no longer brag about their country being a bright spot in the recessionary gloom on the euro-zone southern and western periphery. In fact, GDP has shrunk for three consecutive quarters (the second half of last year and the first quarter of 2013) as exports have been hit first by a slowdown in global trade and secondly by the lapsing of patents on blockbuster drugs that have hurt pharmaceutical exports. The budget deficit remains high at 7.5% of GDP and public debt will reach 124% this year, a figure that underestimates the effective burden because a big chunk of Irish GDP is profits made by foreign multinationals which are lightly taxed.
The Irish government thus has good reasons to be nervous about having to fend for itself. That’s why Michael Noonan, the finance minister, is angling for a backstop to be available after the bail-out ends. But it is not just a credit line that the Irish are seeking: they want to be eligible for the ECB’s OMT programme.
That will be possible, however, only if the Irish apply to the European Stability Mechanism (ESM), the eurozone’s bail-out fund, for an “enhanced conditions” credit line. The Irish argue that there would be no need to comply with extra conditions, but whether the other euro-zone finance ministers who are on the board of the ESM will concur remains to be seen. Ireland may find that the best it can secure is a deal where it is still subject to intrusive monitoring.
If all goes to plan the Irish exit from its ignominious bail-out at the end of this year will be hailed as a big success. But the reality will be fuzzier. The official funding may end but the price of support remaining available if necessary is that Ireland will not secure full independence.
via The Irish bail-out programme: The meaning of exit | The Economist.
Merkel highlights failings in Irish data protection ahead of EU action
“We have great data protection laws in Germany but if Facebook is based in Ireland, then Irish law applies”
Chancellor Angela Merkel said yesterday the ongoing Snowden controversy made clear that EU members should force US companies to explain what happens to user data when it leaves European computer servers
The Government faces pressure from Germany this week to improve oversight of how Irish-based companies like Google and Facebook process data they collect on European users.
Chancellor Angela Merkel said yesterday the ongoing Snowden controversy made clear that EU members should force US companies to explain what happens to user data when it leaves European computer servers. She has ordered her interior and justice ministers to adopt a “strict position” on data protection in Brussels talks on Thursday and Friday of this week and to end a stand-off over new common EU data protection rules.
“We have great data protection laws in Germany but if Facebook is based in Ireland, then Irish law applies,” said Dr Merkel on public television last night. “We wish that companies make clear to us in Europe to whom they give their data. This will have to be part of a [European] data protection directive.”
This turns the spotlight on the Portlaoise-based Data Protection Commissioner (DPC) which has front-line responsibility for policing whether companies based in Ireland adhere to EU data protection rules.
In recent years the DPC has been flooded with complaints from citizens around Europe that Facebook and other technology companies are collating information in violation of EU law.
Austerity Today -Economic recovery ‘will take 20 years’
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| Lenders Pressuring Greece Over Austerity Pledges Voice of America The lenders – Greece’s European neighbors, the European Central Bank and the International Monetary Fund – have been meeting with government officials in Athens. They are demanding that the government make progress on its austerity pledges ahead of … See all stories on this topic » |
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| New Study Dispels Myths of European Austerity OpenMarket.org Cries throughout the media of “savage austerity” notwithstanding, only a handful of European countries have actually implemented austerity in the true sense of the term: reducing both public spending and taxation. On the other hand, most countries in … See all stories on this topic » |
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| Portugal gov’t in peril as another minister quits TheNewsTribune.com Portugal’s government was in danger of collapse Tuesday after Foreign Minister Paulo Portas, the leader of the junior party in the center-right coalition government, resigned over the bailed-out country’s austerity policies. By BARRY HATTON; Associated … See all stories on this topic » |
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| Rug buyers look for round rugs in austere times PRWire (press release) Rug buyers across Australia are looking to make their homes cosier as they hunker down for a period of relative economic austerity. That’s the view of the team at The Bespoke Rug Company (www.bespokerugs.com.au) Australia’s leading retailer of … See all stories on this topic » |
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| Bailed-out Portugal’s finance minister resigns Fresno Bee Workers’ unions called a 24-hour general strike to protest the government’s austerity measures with public transport and government offices expected to be the worst-hit services. The banner reads in Portuguese: “The street is our. Nothing to lose”. See all stories on this topic » |
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| The Tories must beware these feelings of irrational exuberance Telegraph.co.uk (blog) We have had enough of five years of austerity and doubt. All around there are signs that the economy is stirring, that the combination of low interest rates and high employment is beginning to encourage consumer activity. Even beyond the powerhouse of … See all stories on this topic » |
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| There are few bright spots for them in last week’s spending review by George … Third Sector There are one or two other bright spots for the sector in the sixth year of austerity announced by George Osborne in last week’s spending review, which was in effect the opening salvo of the next general election campaign. The continuing expansion of … See all stories on this topic » |
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| Portuguese Finance Minister’s Exit Elicits Few Gasps Wall Street Journal (blog) Yields on Portuguese government bonds ticked up a bit to 6.42% after the unexpected resignation of Mr. Gaspar–the architect of Portugal’s austerity plan–but volumes were low, and the news didn’t prompt predictions of outright default. Instead … See all stories on this topic » |
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| Democratic Deficit Scolds Get Desperate and Weird New York Magazine Liberals may complain about austerity, but, they argue, “we haven’t had an austerity budget.” Cowan and Kessler’s evidence for this — that the federal government spent more, on average, during Obama’s first term than during George W. Bush’s second … See all stories on this topic » |
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| Lapid: Deficit could cause collapse Globes Finance Minister: The austerity measures will stop Israel reaching the conditions in Europe with high unemployment. 2 July 13 12:42, Moshe Golan. Tweet. “The idea that we have people here whose lives are at risk because they are doing their jobs is … See all stories on this topic » |
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| EU Rehn: New Portugal Finance Minister Must Maintain Tempo of Reform Wall Street Journal The former treasury secretary took the post after Vitor Gaspar, chief enforcer of austerity demands under Portugal’s EUR78 billion international bailout program, said Monday he was stepping down after two years in the job. Mr. Rehn praised Mr. Gaspar … See all stories on this topic » |
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| The Strain in Spain Could Help Firefox OS Take Root TechNewsWorld Due to the extreme austerity measures in certain South American and European countries, “low-cost smartphones will be very appealing,” said Joshua Flood, a senior analyst at ABI Research. The ZTE Open — the first commercially available smartphone … See all stories on this topic » |
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| Merkel opponent derides jobless summit as cynical ploy Reuters BERLIN (Reuters) – Angela Merkel’s summit on youth unemployment in Europe is an attempt to paper over the economic consequences of the austerity policies she championed in the region, a leading member of Germany’s opposition Social Democrats … See all stories on this topic » |
| Portugal’s austerity government feels the pinch BBC News The resignation in quick succession of two of Portugal’s biggest political beasts has left many questioning whether the right-of-centre government which has enthusiastically embraced austeritymeasures can survive more than a few weeks, let alone months. See all stories on this topic » |
| Twenty years of austerity ahead, says Sir Jeremy Heywood Telegraph.co.uk Sir Jeremy Heywood also suggested that the cuts made to public services to date were not sufficient and that austerity measures would have to continue for “at least” another four years. The comments from the Cabinet Secretary will have a sobering … See all stories on this topic » |
| Austerity Blitz: Eurozone Notes From Beyond the Grave Truth-Out The criminal effects of the austerity blitz strategy that the European Union (EU) conceived of on Germany’s insistence as the answer to the global financial crisis when it hit Europe’s shores with the triggering of the Greek sovereign debt crisis have … See all stories on this topic » |
| Portugal’s Budget Austerity May Do More Harm Than Good KTEP LAUREN FRAYER, BYLINE: Of all the bailed-out countries in Europe, Portugal has been the good student – taking the austerity medicine its lenders prescribe. Portuguese Finance Minister Vitor Gaspar took it even further – doubling budget cuts and tax hikes. See all stories on this topic » |
| Public sector austerity drive ‘hitting women the hardest’ Gulf Times George Osborne’s revelation in his spending review that a further 144,000 jobs are to be slashed from the public sector means there is more pain to come for women, critics say. Data collated by the Guardian highlights the disproportionate blow to … See all stories on this topic » |
| Lapid: Without Austerity Measures, Deficit Could ‘Bury’ Israel Algemeiner Most Popular. Recent Posts. The BioHug vest. Photo: BioHug.com. Israeli-Developed Vest Hugs People to Health · Yair Lapid, leader of the Yesh Atid party. Lapid: Without Austerity Measures, Deficit Could ‘Bury’ Israel · Amy Winehouse. Photo: wiki commons. See all stories on this topic » |
| Portugal’s PM says he won’t quit despite resignations over austerity measures Fox News But the government’s future is hanging in the balance after the resignation earlier Tuesday of Foreign Minister Paulo Portas, the leader of the junior party in the governing center-right coalition, in protest against austerity measures. Passos Coelho … See all stories on this topic » |
| Trade unions call for social investment Morning Star Online And he said the people of Northern Ireland were suffering the same fate at the hands of the austerity-mad Westminster government. “Austerity is now no more than a mantra without meaning. The intellectual underpinning for it has been discredited,” he … See all stories on this topic » |
| Portugal’s finance minister resigns amid pressure for government to soften … Malaysia Sun Portugal’s finance minister resigns amid pressure for government to soften austerity | Malaysia Sun. Malaysia Sun. Issue 11/0183. Malaysia Sun · http://www.malaysiasun.com · Malaysia News · Southeast Asia News · Breaking International News · Asia … See all stories on this topic » |
| Activists climb County Hall, Westminster in anti war, anti austerity protest Indymedia UK The newly formed Black Katz Kollektive has within the last hour occupied County Hall on the south side of Westminster Bridge facing the Houses of Parliament, with banners unfurled down the side of the building. Their message is simple: stop the war … See all stories on this topic » |
| Portuguese government in peril as foreign minister, head of junior party in … The Republic Austerity is widely blamed for driving the jobless rate in Portugal to 17.6 percent and for what is forecast to be a third straight year of recession in 2013. Portugal needed a 78 billion euros ($102 billion) bailout two years ago after a decade of … See all stories on this topic » |
| Portugal PM defiant despite another resignation Boston.com Gaspar, a non-political economist specially selected by Passos Coelho to push the austerity drive, said he lacked the political and public support for his ongoing program of cutting public sector pay and pensions and raising taxes. Portas, the leader … See all stories on this topic » |
| Portuguese Finance Minister Gaspar resigns Channel News Asia Portuguese Finance Minister Vitor Gaspar, the architect of the country’s reforms under its EU-IMF bailout, resigned on Monday as the economy reels and social discontent mounts under the impact ofausterity measures. PHOTOS. File photo of Portuguese … See all stories on this topic » |
| Miss. tax receipts approach $5 billion in FY2013 WJTV Top budget writers say they expect pressure from schools, universities and state agencies that saw budgets slashed during four years of austerity. Tax receipts have surged more strongly than jobs or Mississippi’s overall economy, leading to notes of … See all stories on this topic » |
| Portuguese PM adamant he will not stand down Radio New Zealand Austerity measures are blamed for causing Portugal’s worst economic crisis since the 1970s. Portugal has been in recession for two years and the economy is expected to contract by 2.3% this year. Unemployment is over 17.5%. A general strike was held … See all stories on this topic » |
| Portuguese Finance Minister Resigns New York Times MADRID — Portugal’s finance minister, Vítor Gaspar, unexpectedly resigned Monday amid a prolonged recession that citizens have attributed largely to austerity measures that he helped enforce in accordance with the demands of the country’s … See all stories on this topic » |
| Concern over Portugal bailout Independent Online Lisbon – The resignation of the main architect of Portugal’s austerity policies has sparked concern over the country’s ability to complete its EU-IMF bailout programme. Analysts say the departure Monday of finance minister Vitor Gaspar has weakened a … See all stories on this topic » |
| Portugal foreign minister steps down in second major ministerial resignation Deutsche Welle Former Treasury Secretary, Albuquerque was appointed on Monday following the shock resignation of Finance Minister Vitor Gaspar, the main architect of the austerity measures. ccp/kms (AFP, AP, dpa). Date 02.07.2013; Share Send Facebook Twitter … See all stories on this topic » |
EU confronts U.S. over reports it spies on European allies
Reuters/Reuters – Broken antenna covers of Former National Security Agency (NSA) listening station are seen at the Teufelsberg hill (German for Devil’s Mountain) in Berlin, June 30, 2013. The United States
By Ben Deighton and Annika Breidthardt
BRUSSELS/BERLIN (Reuters) – The European Union has demanded that the United States explain a report in a German magazine that Washington is spying on the group, using strong language to confront its closest trading partner over its alleged surveillance activities.
EU High Representative Catherine Ashton said on Sunday that U.S. authorities were immediately contacted about a report in Der Spiegel magazine that the U.S. spy agency had tapped EU offices in Washington, Brussels and at the United Nations.
“As soon as we saw these reports, the European External Action Service made contact with the U.S. authorities in both Washington D.C. and Brussels to seek urgent clarification of the veracity of, and facts surrounding, these allegations,” Ashton said in a statement.
“The U.S. authorities have told us they are checking on the accuracy of the information released yesterday and will come back to us as soon as possible,” she said.
France also asked for an explanation.
“These acts, if confirmed, would be completely unacceptable,” Foreign Minister Laurent Fabius said.
The U.S. government said it would respond through diplomatic channels.
“We will also discuss these issues bilaterally with EU member states,” a spokesperson for the Director of National Intelligence said.
“While we are not going to comment publicly on specific alleged intelligence activities, as a matter of policy we have made clear that the United States gathers foreign intelligence of the type gathered by all nations.”
The Guardian newspaper said in an article late on Sunday that the United States had also targeted non-European allies for spying.
Citing a September 2010 NSA document, the British newspaper said that “Along with traditional ideological adversaries and sensitive Middle Eastern countries, the list of targets includes the EU missions and the French, Italian and Greek embassies, as well as a number of other American allies, including Japan, Mexico, South Korea, India and Turkey.”
Der Spiegel reported on Saturday that the National Security Agency bugged EU offices and gained access to EU internal computer networks, the latest revelation of alleged U.S. spying that has prompted outrage from EU politicians.
The magazine followed up on Sunday with a report that the U.S. agency taps half a billion phone calls, emails and text messages in Germany in a typical month, much more than any other European peer and similar to the data tapped in China or Iraq.
It also uses data from Internet hubs in south and west Germany that organise data traffic to Syria and Mali.
Revelations about the U.S. surveillance programme, which was made public by fugitive former NSA contractor Edward Snowden, have raised a furore in the United States and abroad over the balance between privacy rights and national security.
The extent to which Washington’s EU allies are being monitored emerged is a particular concern in Europe.
“If the media reports are correct, this brings to memory actions among enemies during the Cold War. It goes beyond any imagination that our friends in the United States view the Europeans as enemies,” German Justice Minister Sabine Leutheusser-Schnarrenberger said.
“If it is true that EU representations in Brussels and Washington were indeed tapped by the American Secret Service, it can hardly be explained with the argument of fighting terrorism,” she said in a statement.
TAPPED GERMANS
Germany’s federal prosecutor’s office, which has authority in matters of national security, said it was looking into whether or not it should start an investigation. Criminal charges are expected to be filed, spokeswoman Frauke Koehler told Reuters.
Germans are particularly sensitive about government monitoring, having lived through the Stasi secret police in the former communist East Germany and with lingering memories of the Gestapo of Hitler’s Nazi regime.
German Chancellor Angela Merkel has not commented on the latest report. Before a visit by U.S. President Barack Obama earlier this month, Merkel defended governments’ monitoring of Internet communications, however, and said that the U.S. cyber-snooping had helped prevent attacks on German soil.
She stressed during Obama’s visit that there were limits to monitoring, but stopped short of pressing the issue hard.
Martin Schulz, president of the EU Parliament and also a German, said if the report was correct, it would have a “severe impact” on relations between the EU and the United States.
He told French radio the United States had crossed a line.
“I was always sure that dictatorships, some authoritarian systems, tried to listen … but that measures like that are now practiced by an ally, by a friend, that is shocking, in the case that it is true,” Schulz said in an interview with France 2.
Some EU policymakers said talks for a free trade agreement between Washington and the EU should be put on ice until further clarification from the United States.
“Partners do not spy on each other,” the European commissioner for justice and fundamental rights, Viviane Reding, said at a public event in Luxembourg on Sunday.
“We cannot negotiate over a big transatlantic market if there is the slightest doubt that our partners are carrying out spying activities on the offices of our negotiators,” Reding said in comments passed on to reporters by her spokeswoman.
The European Parliament’s foreign affairs committee head Elmar Brok, from Chancellor Angela Merkel’s Christian Democrats, echoed those views.
“The spying has taken on dimensions that I would never have thought possible from a democratic state,” he told Der Spiegel.
“How should we still negotiate if we must fear that our negotiating position is being listened to beforehand?”
(Additional reporting by Sabine Siebold, Claire Davenport in Luxembourg and Laurence Frost in Paris, Tabassum Zakaria and Deborah Charles in Washington; Writing by Annika Breidthardt; Editing by Sonya Hepinstall)
via EU confronts U.S. over reports it spies on European allies – Yahoo! News UK.
Anglo Irish Banks -Most Recent Updates from home and Abroad
Banks treated Irish people with contempt, says O’Malley
Irish Times
“The contempt shown by Anglo Irish Bank for the Irish people and for their welfare and their public institutions was probably not very different from the attitude taken up by some of the other banks. We just do not have first-hand aural evidence of the …
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Merkel calls Anglo Irish Bank chatter damaging to democracy |
| Deutsche Welle In Ireland, transcripts of telephone conversations between employees from 2008 at Anglo Irish Bankhave caused a massive outrage. In the tapes, the workers make fun of the government’s decision to guarantee bank liabilities at the height of the … See all stories on this topic » |
Anglo Irish tapes are only the tip of the iceberg when it comes to other banksIrishCentral |
Money trail
David Drumm carried out a number of personal financial moves that coincided with Anglo’s demise, writes investigative correspondent Conor Ryan read full article
irishexaminer.comThe Anglo Tapes, The Guarantee And Ireland’s Economic Crisis
Probably the biggest economic story in Europe this week has been the release of recorded phone calls from 2008 between executives of the now-notorious Anglo Irish Bank. Anglo was a recklessly… read full article
forbes.comIrish PM shocked by ‘vulgar’ Anglo Irish Bank tapes
New Straits Times
BRUSSELS : Irish Prime Minister Enda Kenny said Friday he was thunderstruck by leaked tapes at the centre of a scandal at the bailed-out Anglo Irish Bank which he said has tarnished Ireland’s reputation. But Kenny said after an EU summit in Brussels …
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Mocking Germans Adds Irish Insult to Banking Injury
Bloomberg
Irish politicians say jibes at Germans by some of the country’s former bankers undermine their case for securing help to cut the 64 billion-euro ($83 billion) bill for saving the financial system. John Bowe, a former executive at the now defunct Anglo …
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Anglo Irish Bank scandal ‘damages democracy’, Angela Merkel says
The Guardian
Angela Merkel has expressed “contempt” for the disgraced Anglo Irish Bank executives caught on tape mocking Germany’s involvement in the institution’s €30bn (£25.7bn) bailout. The German chancellor delivered a strong condemnation of the revelations, …
Businessweek
BRUSSELS (AP) — German Chancellor Angela Merkel on Friday blasted newly disclosed comments by former directors of Ireland’s most notorious bank, who mocked foreign depositors and conspired to conceal the true scale of their losses while winning a …
The Guardian
Speaking at the EU summit in Brussels, Enda Kenny, the Irish prime minister, gives his response to recordings of Anglo Irish Bank staff joking about a bailout deal and mocking Germany. His comments follow an accusation from the German chancellor …
Germany Has Created An Accidental Empire
Are we now living in a German Europe? In an interview with EUROPP editors Stuart A Brown and Chris Gilson, Ulrich Beck discusses German dominance of the European Union, the divisive effects of austerity policies, and the relevance of his concept of the ‘risk society’ to the current problems being experienced in the Eurozone.
How has Germany come to dominate the European Union?
Well it happened somehow by accident. Germany has actually created an ‘accidental empire’. There is no master plan; no intention to occupy Europe. It doesn’t have a military basis, so all the talk about a ‘Fourth Reich’ is misplaced. Rather it has an economic basis – it’s about economic power – and it’s interesting to see how in the anticipation of a European catastrophe, with fears that the Eurozone and maybe even the European Union might break down, the landscape of power in Europe has changed fundamentally.
First of all there’s a split between the Eurozone countries and the non-Eurozone countries. Suddenly for example the UK, which is only a member of the EU and not a member of the Eurozone, is losing its veto power. It’s a tragic comedy how the British Prime Minister is trying to tell us that he is still the one who is in charge of changing the European situation. The second split is that among the Eurozone countries there is an important division of power between the lender countries and the debtor countries. As a result Germany, the strongest economic country, has become the most powerful EU state.
Are austerity policies dividing Europe?
Indeed they are, in many ways. First of all we have a new line of division between northern European and southern European countries. Of course this is very evident, but the background from a sociological point of view is that we are experiencing the redistribution of risk from the banks, through the states, to the poor, the unemployed and the elderly. This is an amazing new inequality, but we are still thinking in national terms and trying to locate this redistribution of risk in terms of national categories.
At the same time there are two leading ideologies in relation to austerity policies. The first is pretty much based on what I call the ‘Merkiavelli’ model – by this I mean a combination of Niccolò Machiavelli and Angela Merkel. On a personal level, Merkel takes a long time to make decisions: she’s always waiting until some kind of consensus appears. But this kind of waiting makes the countries depending on Germany’s decision realise that actually Germany holds the power. This deliberate hesitation is quite an interesting strategy in terms of the way that Germany has taken over economically.
The second element is that Germany’s austerity policies are not based simply on pragmatism, but also underlying values. The German objection to countries spending more money than they have is a moral issue which, from a sociological point of view, ties in with the ‘Protestant Ethic’. It’s a perspective which has Martin Luther and Max Weber in the background. But this is not seen as a moral issue in Germany, instead it’s viewed as economic rationality. They don’t see it as a German way of resolving the crisis; they see it as if they are the teachers instructing southern European countries on how to manage their economies.
This creates another ideological split because the strategy doesn’t seem to be working so far and we see many forms of protest, of which Cyprus is the latest example. But on the other hand there is still a very important and powerful neo-liberal faction in Europe which continues to believe that austerity policies are the answer to the crisis.
Is the Eurozone crisis proof that we live in a risk society?
Yes, this is the way I see it. My idea of the risk society could easily be misunderstood because the term ‘risk’ actually signifies that we are in a situation to cope with uncertainty, but to me the risk society is a situation in which we are not able to cope with the uncertainty and consequences that we produce in society.
I make a distinction between ‘first modernity’ and our current situation. First modernity, which lasted from around the 18th century until perhaps the 1960s or 1970s, was a period where there was a great deal of space for experimentation and we had a lot of answers for the uncertainties that we produced: probability models, insurance mechanisms, and so on. But then because of the success of modernity we are now producing consequences for which we don’t have any answers, such as climate change and the financial crisis. The financial crisis is an example of the victory of a specific interpretation of modernity: neo-liberal modernity after the breakdown of the Communist system, which dictates that the market is the solution and that the more we increase the role of the market, the better. But now we see that this model is failing and we don’t have any answers.
We have to make a distinction between a risk society and a catastrophe society. A catastrophe society would be one in which the motto is ‘too late’: where we give in to the panic of desperation. A risk society in contrast is about the anticipation of future catastrophes in order to prevent them from happening. But because these potential catastrophes are not supposed to happen – the financial system could collapse, or nuclear technology could be a threat to the whole world – we don’t have the basis for experimentation. The rationality of calculating risk doesn’t work anymore. We are trying to anticipate something that is not supposed to happen, which is an entirely new situation.
Take Germany as an example. If we look at Angela Merkel, a few years ago she didn’t believe that Greece posed a major problem, or that she needed to engage with it as an issue. Yet now we are in a completely different situation because she has learned that if you look into the eyes of a potential catastrophe, suddenly new things become possible. Suddenly you think about new institutions, or about the fiscal compact, or about a banking union, because you anticipate a catastrophe which is not supposed to happen. This is a huge mobilising force, but it’s highly ambivalent because it can be used in different ways. It could be used to develop a new vision for Europe, or it could be used to justify leaving the European Union.
How should Europe solve its problems?
I would say that the first thing we have to think about is what the purpose of the European Union actually is. Is there any purpose? Why Europe and not the whole world? Why not do it alone in Germany, or the UK, or France?
I think there are four answers in this respect. First, the European Union is about enemies becoming neighbours. In the context of European history this actually constitutes something of a miracle. The second purpose of the European Union is that it can prevent countries from being lost in world politics. A post-European Britain, or a post-European Germany, is a lost Britain, and a lost Germany. Europe is part of what makes these countries important from a global perspective.
The third point is that we should not only think about a new Europe, we also have to think about how the European nations have to change. They are part of the process and I would say that Europe is about redefining the national interest in a European way. Europe is not an obstacle to national sovereignty; it is the necessary means to improve national sovereignty. Nationalism is now the enemy of the nation because only through the European Union can these countries have genuine sovereignty.
The fourth point is that European modernity, which has been distributed all over the world, is a suicidal project. It’s producing all kinds of basic problems, such as climate change and the financial crisis. It’s a bit like if a car company created a car without any brakes and it started to cause accidents: the company would take these cars back to redesign them and that’s exactly what Europe should do with modernity. Reinventing modernity could be a specific purpose for Europe.
Taken together these four points form what you could say is a grand narrative of Europe, but one basic issue is missing in the whole design. So far we’ve thought about things like institutions, law, and economics, but we haven’t asked what the European Union means for individuals. What do individuals gain from the European project? First of all I would say that, particularly in terms of the younger generation, more Europe is producing more freedom. It’s not only about the free movement of people across Europe; it’s also about opening up your own perspective and living in a space which is essentially grounded on law.
Second, European workers, but also students as well, are now confronted with the kind of existential uncertainty which needs an answer. Half of the best educated generation in Spanish and Greek history lack any future prospects. So what we need is a vision for a social Europe in the sense that the individual can see that there is not necessarily social security, but that there is less uncertainty. Finally we need to redefine democracy from the bottom up. We need to ask how an individual can become engaged with the European project. In that respect I have made a manifesto, along with Daniel Cohn-Bendit, called “We Are Europe”, arguing that we need a free year for everyone to do a project in another country with other Europeans in order to start a European civil society.
A more detailed discussion of the topics covered in this article is available in Ulrich Beck’s latest book, German Europe (Polity 2013). This interview was first published on EUROPP@LSE
NSA surveillance: what Germany could teach the US
At the end of the G8 meeting in Northern Ireland on Tuesday night, Barack Obama and Angela Merkel will hop on a plane bound for Berlin together. Merkel has already boasted that she will make their meeting an awkward one, promising to ask uncomfortable questions about the Prism affair. The image that comes to my mind is that of a pinscher yapping at a great dane, while the great dane just benignly gazes into the distance.
Of course, the pinscher has every reason to bark its lungs out. Surveillance of worldwide internet communications, as practised by the National Security Agency (NSA) through Prism, is the stuff of Orwellian nightmares. Any democratic system rests on the idea that its citizens can think and act freely – but no individual can act and think freely while being watched. The very fact of being watched means that we act differently. Unsupervised communication between individuals is an essential precondition for a functioning democracy.
There will always be people who dismiss complaints about state surveillance as hysteria. Since 11 September 2001 it has become increasingly easy to discourage those who care about their fundamental rights. Just insist that a new measure will aid the fight against terrorism, and that legitimises it. Particularly in Britain and the US, many people seem surprisingly blase about the idea of the state watching over them.
I despair at such indifference. Germany endured two totalitarian systems in the 20th century. Not just Nazism, but the GDR too, built a dictatorship on the surveillance, registration and selection of individuals. People became objects who were divided into nebulous categories. The fight against terror requires a similar division of civil society according to sex, age, ethnicity, religion and politics. The problem with such machine-led screening methods is not only that it is very hard for people to escape them once they get caught, but that they no longer presume innocence – everyone is now a potential suspect.
Because of this, Germans have traditionally been more sensitive to assaults on their private sphere. There are fewer CCTV cameras, and Google’s Street View project was met with widespread resistance in 2010: click yourself through a map of Germany and you’ll still find large areas still pixelated. A few weeks ago, Germany published its first post-reunification census – the previous ones in the 1980s were widely boycotted on ethical grounds. But that Germany hasn’t reached the level of the US is not thanks to politicians’ sense of history, but to the so-called “basic law” that anchors our constitution and the federal constitutional court that protects it. One “security law” after the next has been proposed and then rejected by the court for infringing on civil rights.
But being a little more sensible on civil rights issues than other European states will no longer do. On the contrary: with its unique historical background, Germany should be leading the charge against any form of Big Brother system.
Having been raised in East Germany, Merkel especially should know what is at stake here. She experienced in her youth how long-term surveillance can demoralise the human spirit and distort the character of a society.Explaining that to her American counterpart would be a start for Merkel. She should explain to him that there is a lesson for the rest of the world in Germany’s history. In the 21st century, modern technology will take the possibility for total surveillance to a completely new level. Compared with what Prism allows you to do, Stasi activities look like child’s play: the size and speed of the data flow threatens to overwhelm the lawmakers who are meant to control it.
My fear is that Merkel’s protest will be hard to take seriously, and that Obama will notice this. Since 9/11, Merkel’s government has also passed laws that allow the state to virtually x-ray its citizens. Der Spiegel recently reported that Germany’s equivalent of the NSA, the BND, is planning to expand its web monitoring programme over the next five years.
Ultimately, Merkel’s emphatic concern about the Prism affair stems from the fact there will a federal election in Germany in September. It’s a convenient chance to demonstrate a bit of political spine. Once the pinscher’s done with the yapping, the great dane will give her a kindly smile and assure her that everything is happening within the law. After that, the excitement about Prism will soon evaporate, and they in America and we in Europe will continue collecting data.
Data protection is to the communication age what environmental protection was for the age of industrialisation. Back then, we lost decades because we didn’t realise how severe the damage we were causing really was. Let’s try not to make the same mistake twice.
• This article was amended on Tuesday 18 June. Angela Merkel was born in Hamburg, not East Germany, as the seventh paragraph originally stated. She was raised in East Germany.
via NSA surveillance: what Germany could teach the US | Juli Zeh | Comment is free | The Guardian.
Why Europe can’t just “fix” youth unemployment
Our problems are not due to a lack of innovative ideas; they are due to an excess of financial power concentrated in the hands of an elite of bankers.
For years already, the youth of Europe’s heavily indebted periphery has been facing mass unemployment. In Greece and Spain, a respective 59 and 56 percent of young people are now out of work, while youth unemployment in the EU as a whole currently stands at a troubling 24 percent, up from 22.5 percent last year. The “lucky” ones are those waiting tables with PhD degrees in their back pockets. Those who were forced to leave their families and friends behind to join the generational exodus to Germany or Angola don’t even show up in the statistics.
In recent weeks, European leaders somewhat belatedly seem to have become mightily interested in the issue. Italy’s new Prime Minister Enrico Letta called youth unemployment the most serious problem facing his country and called for an EU plan to “combat” it. German Chancellor Angela Merkel, flag-bearer of the European austerity movement, similarly considers youth unemployment to be “Europe’s biggest challenge.” Meanwhile, a new campaign by Big Think somewhat naively asks “what’s causing youth unemployment and what can fix it?”
Apart from the obvious hypocrisy of these concerns — coming from the lips of the same officials whose unrelenting insistence on austerity, neoliberal reforms and full debt repayment largely caused the unemployment crisis to begin with — this newfound sympathy for our generation’s plight hinges on a dangerous assumption that serves to ideologically re-construct youth unemployment as a “problem” that can somehow be “solved” with a magic fix or a continental master plan — without addressing the underlying causes of austerity, depression, and a fundamentally unsustainable debt load, let alone the internal contradictions of the eurozone and globalized financial capitalism more generally.
It should be clear to any intelligent person by now that youth unemployment is not a problem in the ordinary sense of the word; it is a symptom of a much more deep-seated disease that’s breaking down our society from within. Other symptoms include the rise of neo-Nazism and xenophobic violence in Greece; the wave of suicides across Southern Europe; the 400.000 families that have been evicted from their homes in Spain; the thousands of starving horses that have been abandoned by their owners in Ireland; the UK students who had their tuition fees tripled and now face the prospect of either dropping out, studying abroad, or accruing massive student debts; the eurozone record levels of mortgage debt held by Dutch households, etc., etc. — not to mention the thorough discrediting of democratic institutions and the massive riots that have rocked major European capitals like London, Athens, Madrid, Lisbon and Rome.
But European leaders seem blind to the metastasis of misery that has crept into the social fabric of our continent. Wouldn’t it be great, they now seem to tell us, if we could have crippling austerity, an increasing debt load, a devastating social crisis, starving pensioners, the return of fascism, a wave of suicides and mass deprivation — but without the youth unemployment? I’m not buying this story, and I don’t think any of us should. The attempt to cast the current crisis in generational terms serves to drive a wedge between us and our unemployed, indebted and/or retired (grand)parents. It serves to co-opt the youth in the ongoing wave of neoliberal reforms, making us believe it is in our best interest to crack down on the labor rights, jobs and pensions of our parents so we ourselves can better compete for the increasingly precarious jobs of the future.
The real reason European leaders are suddenly so concerned about youth unemployment — while they remain unmoved by the plight of Greek AIDS patients, for instance, who now can’t get their anti-retroviral drugs — is simply that they are terrified by the prospect of social unrest. As the New York Times reported today, “it is clear that policy makers are seriously worried that millions of frustrated young job seekers pose as much of a threat to the euro zone as excessive government debt or weak banks.” German Finance Minister Wolfgang Schäuble literally admitted that “We will have to speed up in fighting youth unemployment, because otherwise we will lose the support, in a democratic way, in some populations of the European Union.” What they fear, in other words, is a continent-wide youth uprising. At its worst, their plans to “fix” youth unemployment serve to distract us from the obvious class dimension at play, promoting the illusion that the social crisis we face is just a series of economic problems that can be fixed without radical changes to the political status quo.
The inconvenient truth is that unemployment is an integral element of the neoliberal policy response to the crisis pursued by the European Union and the IMF. This, in itself, is nothing new. IMF austerity programs in the developing world have long involved dramatic reductions in wages and rises in unemployment. Careful quantitative analysis of the Latin American debt crisis of the 1980s has shown that “the most consistent and statistically significant impact of Fund programs in Latin America … was the reduction in labor share of income.” Even official IMF studies recognize that its austerity programs “boost unemployment and lower paychecks.” Most importantly, the authors of a 2011 IMF report, Painful Medicine, conclude that austerity causes not just short-term but “particularly long-term unemployment.”
In other words, asking for austerity measures without youth unemployment is like insisting on the medieval practice of blood-letting without the blood-loss. It is not only brutal, but also practically impossible. Austerity and unemployment are like Siamese twins, conjoined at the hip, designed to strengthen and reinforce one another. As long as the EU and IMF keep imposing these highly destructive adjustment measures, unemployment will keep on rising. The only genuine “solution” to unemployment, therefore, would be to break free from the shackles of austerity and to default on the foreign debt. This is the reformist vision pursued by SYRIZA in Greece, and despite the lack of revolutionary imagination of this quasi-Keynesian approach, there is certainly something to be said for it from a humanitarian point of view.
At the same time, I have now written some 50,000 words on this question — why not default? – for my PhD thesis, showing precisely why the option of default is often so elusive. In a word, default would greatly harm the interests of foreign private creditors, who just happen to control virtually all the critical resources in the global economy, giving them a disproportionate ability to block the type of solutions that would favor the unemployed. So to get to the phase where we can even realistically start considering genuine “solutions” to the “problem” of youth unemployment, we first have to confront the financial power structures that obstruct the pursuit of such solutions to begin with. This requires much more than a continental master plan to combat youth unemployment. It requires a radical break with the status quo.
Our problems, in short, are not due to a lack of innovative ideas; they are due to an excess of financial power concentrated within the hands of a tiny elite of bankers. This means we have to dramatically reformulate our question. Rather than asking what innovative ideas can solve the problem of youth employment, we should be asking what type of strategies could upend the structural power of international creditors. This leads us away from economics and back into the realm of revolutionary theory and praxis. How could Europe’s downtrodden youth ever possibly conceive of shaking the global financial order? It is to this impossible question that I will turn in my next post.
via Why Europe can’t just “fix” youth unemployment | ROAR Magazine.
