Tag Archives: Europe

George Soros Speech on Europe and the EU Goes Viral

George Soros

George Soros

It’s not often that one thinks of George Soros going viral but his speech the other day on Europe and the EU has become the talk of more than just the business community. The full speech is on Soros’ website and runs through a broad range of concepts from the scientific method to social behavior. In it, Soros argues that the European Union was designed as:

  • a fantastical object – unreal but immensely attractive
  • a product of piecemeal social engineering
  • deliberately inadequate so as to require further steps
  • When those steps didn’t happen, the bottom began to fall out
Soros gives the European Union three months to work everything out or collapse as a failed experiment. Probably an accurate a deadline as any.
If you don’t want to work through Soros’ speech, Business Insider helpfully reprints the core section which is definitely worth reading:

I contend that the European Union itself is like a bubble. In the boom phase the EU was what the psychoanalyst David Tuckett calls a “fantastic object” – unreal but immensely attractive. The EU was the embodiment of an open society –an association of nations founded on the principles of democracy, human rights, and rule of law in which no nation or nationality would have a dominant position. 

The process of integration was spearheaded by a small group of far sighted statesmen who practiced what Karl Popper called piecemeal social engineering. They recognized that perfection is unattainable; so they set limited objectives and firm timelines and then mobilized the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step. The process fed on its own success, very much like a financial bubble. That is how the Coal and Steel Community was gradually transformed into the European Union, step by step.

Germany used to be in the forefront of the effort. When the Soviet empire started to disintegrate, Germany’s leaders realized that reunification was possible only in the context of a more united Europe and they were willing to make considerable sacrifices to achieve it.  When it came to bargaining they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement.  At that time, German statesmen used to assert that Germany has no independent foreign policy, only a European one.

The process culminated with the Maastricht Treaty and the introduction of the euro. It was followed by a period of stagnation which, after the crash of 2008, turned into a process of disintegration. The first step was taken by Germany when, after the bankruptcy of Lehman BrothersAngela Merkel declared that the virtual guarantee extended to other financial institutions should come from each country acting separately, not by Europe acting jointly. It took financial markets more than a year to realize the implication of that declaration, showing that they are not perfect.

In effect, Europe got a financial union without a political union and as Soros goes on to argue, the founders thought that the that “. . . when the need arose the political will could be generated to take the necessary steps towards a political union.” Obviously, it hasn’t worked out that way.

This is not a pretty picture and the next few months will be decisive not only for the EU but for nations around the globe. Spain is teetering on the brink, Greece is headed toward elections that will lead them out of the EU and into financial default or continue within it and suffer greater economic deprivation (in other words, basically the same no matter which way they vote for the person on the street). European leaders are looking at proposals for greater monetary integration but the political will may not be there. And in effect, they are still focusing on the monetary side and not the political side.

As of this morning, the markets are plunging in Asia and it will be a turbulent week in the European and U.S. financial markets.

Buckle up and hold tight.

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Anti-austerity Shockwaves in the European Elections

Pedestrians are reflected in a poster advertising the Greek national elections, on the day of voting in Athens.  -Simon Dawson/Bloomberg

Pedestrians are reflected in a poster advertising the Greek national elections, on the day of voting in Athens. -Simon Dawson/Bloomberg

The election of Socialist Party leader François Hollande and serious loses in the coalition parties (New Democracy and Pasok) in the current Greek government are sending shockwaves throughout  Europe. Whatever challenges the Euro has faced up to this point, they pale in comparison to what the future holds.

The Telegraph has a good initial take on the events:

The economic doctrine of austerity, to cut the burden of state spending to free up the economy, has ruled supreme with the support all of Europe’s leaders, the European Union and financial markets.

But political leaders were on Sunday night conceding the consensus had been shattered beyond repair.

With Europe’s economies plunging further into recession and as unemployment in the eurozone breaks record levels, voters demands for a new approach had finally become to great to ignore.

The popular backlash to EU imposed austerity to the centrist New Democracy and Socialist parties in Greece threatens the existence of the euro itself. 

Greece is potentially ungovernable as a minority government must try and pass a new raft of austerity measures next month which are a condition of an EU-IMF bailout and Greek membership of the euro.

In France, while Hollande, the Socialist President-elect is a centrist, he is sitting on a powder keg of resentment at measures that his government will have to pass if it is not spark a meltdown of financial markets.

He has refused to ratify the treaty unless the eurozone and EU also sign up to a “growth pact”.

And as a footnote, despite Chancellor’s Merkel’s popularity in Germany, it appears that her coalition government suffered a lose in the state of Schleswig-Holstein.

France may muddle through - François Mitterrand came to power in 1981 and after a brief move to the left (inviting the Communist Party into his government) was forced by pressures from the international markets and domestic politics to move to the right. But Greece is in a fundamentally different situation with a negotiated $171 billion dollar agreement with the EU that ostensibly cannot be revoked by the new post-election government.

Problem is – the current coalition parties, New Democracy and Pasok, may have received no more than 34% of the total votes and Syriza, the Coalition of the Radical Left party – which is pushing for an end to the austerity measures – may get as much as 17%. Syriza is looking to form it’s own coalition based on an end to the austerity measures and if the current coalition collapses, the shockwaves will hit the global financial markets. As the Washington Post remarked:

The vote was a stunning repudiation of the two political parties that have ruled Greece since the end of dictatorship here nearly 40 years ago. The pro-business New Democracy Party and the Socialists have traded power for decades. Now, a cacophony of new, skeptical voices will crowd the halls of parliament — including a far-right party called Golden Dawn, whose supporters celebrated Sunday night with flaming torches and the Nazi salute.

Yes, you read that right – Nazi salutes. And Golden Dawn will enter Parliament for the first time.

Members of the Greek neo-Nazi Golden Dawn Party celebrate in Thessaloniki on Sunday.

Members of the Greek neo-Nazi Golden Dawn Party celebrate in Thessaloniki on Sunday.

A scary development, but in all honesty, while the press here – elsewhere – speaks of a “downturn” or a “recession” in Greece, Spain, Portugal, etc., the unemployment numbers and business statistics indicate that this is essentially an economic depression (in Greece, unemployment has reached 21 percent and GDP has declined by 20 percent in just two years). People are tired of sacrifice that seems to only call for more of the same, and the result will be a resurgence of radical parties on both the left and the right. With all the debate about bailout packages, deadlines and who should pay, the leaders at the center of the crisis have forgotten that people need hope. The austerity measures are clearly not providing it, which will lead people into the arms of those with much more radical solutions.

Greece has reached a breaking point. And the political decisions ahead may well reverberate throughout Europe.

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ACTA Protests in Throughout Europe

There have been protests in over 200 European cities today against the Anti-Counterfeiting Trade Agreement (ACTA) despite the brutal winter weather of the past few weeks. ACTA’s already been approved by most European governments but still needs the approval of the European Parliament and will probably come up for a vote in June. In ways similar to the now slumbering SOPA and PIPA legislation in the United States, it would criminalize a good deal of activity on the Web without effectively stopping piracy.

Here’s a map of today’s ACTA protests:

ACTA is not actually legislation, but far worse: a  trade agreement negotiated in secret by the United States and Japan with the participation of a few other countries and industries. It’s all been done in secrecy and were it not for leaked drafts, even less would be known about how it was developed.

Bulgarian MPs in Guy Fawkes Masks to Protest ACTA

Bulgarian MPs in Guy Fawkes Masks

You’ll find two good accounts of ACTA agreement at Stop ACTA and at the  Electronic Frontier Foundation. If you are in favor of an open society, of creativity, of the right to remix and make appropriate reuse of material on the Web, this is not the time to fall asleep. The concept of copyright needs to be upheld; criminalizing everything we do on the Web is not the solution. If your really undecided or think this agreement is a good idea, take a look at Killacta.org. Just read through reason number 5:

ACTA Permanently bypasses democracy by giving the “ACTA Committee” the power to “propose amendments to [ACTA]” (article 6.4). In other words, voting for ACTA writes a blank check to an unelected committee. These closed-door proceedings will be a playground for SOPA-supporters like the MPAA. 

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