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Sunday, 9 April 2017

Does the Euro survive the ignorance and superficiality of the European populist politicians, but even more the moderate goverment leaders and politicians who increasingly follow in their footsteps?

Suddenly the odds for the survival of the European Union seem considerably higher in 2017 than during the catastrophic year 2016, in which the future for the European Union was very bleak indeed.

2016 was the year of the Syrian and African refugee crisis, in which the usual solidarity and good relations between the European countries came under fierce pressure. Many European countries, not lying in the front line of refugee arrivals like Spain, Greece and Italy do, refused to accept their fair share from the influx of refugees numbers. This left especially Italy and Greece in problems, as they were stuck with large numbers of desperate refugees, with nowhere to go and nowhere to hide.

It was also the year in which the authoritarian voices of Viktor Orbán (Prime Minister of Hungary) and Jarosław Kaczyński (leader Law and Justice Party of Poland) sounded more shrill than ever in their battle against the free press and other vital ingredients of a democratic structure. Already this behaviour led to steadily mounting animosity within the European Union

On top of that, 2016 was the year in which the Dutch referendum about the EU-Ukraine Association Agreement ended in a blatant loss for the pro-agreement government of Dutch PM Mark Rutte. This forced PM Rutte to kick the can down the road with respect to the Association Agreement and play a game of hide and seek with the people from the anti-agreement coalition.

These people demanded an immediate withdrawal from the whole agreement by The Netherlands – including the trade parts of it that were outside the scope of the Dutch government. This was a demand that PM Mark Rutte could never meet, without causing enormous commotion in Europe and everybody and their sister knew that.

And last, but not least, 2016 was the year of the British referendum about their membership of the European Union. A referendum, that had been dreaded and cursed in advance by most continental politicians and that left many British citizens and almost all European leaders in shock and awe, when the British population voted in majority in favour of a Brexit, thus making the British exit from the EU inevitable.

This referendum made an immediate end to the political career of British PM David Cameron – as I accurately predicted a few days before the referendum took place  and it showed that the Brexit camp did not even have the slighest hint of a plan, when they would indeed win the referendum. The ideological leader of the Brexit camp Nigel Farage (UKIP’s ) left the British ravage for others to clean up and PM Theresa May – who was in fact against the Brexit herself – was appointed as ‘volunteer’ to clean up the mess, which she did in a very decisive and even reckless way.

At these very moments it seemed that the European Union was ‘a dead man walking’. The union, of which the raison d’etre and usefulness had never been in doubt in the previous 50-odd years of its existence, came under heavy crossfire from the populist movements everywhere in Europe, as well as from the middle-of-the-road politicians. These moderate politicians closely followed in the populists' footsteps in order to not lose their own grassroots to them, leading to an ubiquitous movement in more populist directions.

Except from the influx of African and Middle-Eastern refugees for which nobody seemed to have compassion, solidarity and understanding anymore, the main targets of these relentless attacks against the European Union by both the right- and leftwing populists and the moderate rightwing politicians were the open borders (i.e. ‘Schengen’) and… the Euro.

The mantras of these politicians were: the borders must be closed again, to stop the dangerous influx of refugees, as this creates havoc in the open and rich societies of Europe.

And especially the euro was “the most dangerous and crazy experiment” in their views, as:
  • It started without a proper financial, economic and monetary union, which all are necessary as a foundation for a sound financial system;
  • There was generally a Europe of two speeds, with the “frugal, conscious and successful” countries in the North of Europe (according to politicians in a.o Germany and The Netherlands) and the “wasteful, inconsiderate and backwarded countries” in the South (according to the same politicians in these two countries);
  • Countries like Greece and Italy should never have been allowed in the Eurozone in the first place, as they were financially and economically unstable and they ‘had lied about their financial and economic situation’ by rigging their national statistics and national, financial reporting;

Summarizing, at the end of 2016 things seemed very dire for the European Union, with populism on the rise – also among moderate politicians – and the EU under general crossfire from right- and leftwing politicians, for the alleged mistakes that it made in past and present.

And with general elections soon to be held in The Netherlands (Party for Freedom (PVV) – Geert Wilders), France (Front National – Marine le Pen) and Germany (AfD – Frauke Petri), it seemed that the situation could only turn more awkward for the EU.

But look now in the first half of 2017: even though Geert Wilders of PVV has gained five more seats in parliament, it wasn’t by far the landslide increase in seats that everybody thought he would gain, according to earlier polls.

And in France, the social-democrat candidate for the presidency Emmanuel Macron seems a trustworthy and undisputed opponent for the anti-EU stance of Marine Le Pen.

Instead of protests against the European Union and the Euro, there is a growing number of protests in favour of the EU and the Euro, as many people now consider what they have and how valuable it is.

On top of that, everybody can nowadays see the ‘ultralarge-scale sociological experiment’ that is the Brexit; everybody can see how the British government is struggling to bring it to a good end. And how clueless the victors of this referendum were, when they had won it.

Perhaps is 2017 indeed the year of the turning point in populism. As many people have seen that he European populists are masters in asking the right (or wrong) questions, but utterly fail in addressing these questions in a structural, legal and acceptable way. And populists are also extremely poor in binding a nation together in a way that everybody can have a decent life in peace and prosperity.

In order for populists to be successful, there must be groups available to suffer for them: the scapegoats, on which anything being wrong in society can be blamed. This blame game is only successful when everybody (i.e. nearly the total lower and middle classes) is suffering from difficult economic circumstances, which can be blamed on these groups under fire. 

Now that the economy is reluctantly, but steadily improving and joblessness is finally dropping, the feeding ground for populism is slowly disappearing. So perhaps, the worst in populism might indeed lie behind us. But that does not automatically apply to the Euro currency yet.

Due to the Eurozone’s inadequate strategy of kicking the can down the road with regards to especially Greece and Italy – temporary taking away the effects of the euro crisis without really solving the causes for the euro crisis itself – the confidence in the Euro, as the currency of choice for the European Union, is still at a low.

The debt level of Greece is nearly infinite until this day and the country is still in a very dire situation, without easy solutions. Instead of taking away the debt itself through a (partial) bail-out, the debt is rolled over to the future with yet again new loans, that will be as always very hard to pay back. In this way, the dire situation can last forever, as the tax collection in Greece, as well as the economic outlook for the country is still close to a disaster. And so the debt level of Greece remains a huge millstone for the future of the Eurozone and real solutions are still very hard to find.

And also Italy has still many rivers to cross before the country will be totally healthy, from a economic and financial point of view. In Italy there is always the difficult North-South situation with the rich and successful Northern provinces, against the poor and backwarded Southern provinces (‘according to many Italians, Africa starts directly under Rome’). On top of that there is the top-heavy political system and the still widespread corruption and extremely powerful organized crime that makes any change for the better very difficult in Italy.

Even though the economic situation in Spain and Portugal, and also in France, is slowly improving, the challenges ahead for the Euro as a unity currency are still enormous.

What does not help at such a moment is when the chairman of the Eurogroup, the rectilinear, ‘Calvinist’ swashbuckler Jeroen Dijsselbloem, states in an interview that the Southern European countries ‘have spent their emergency help money on "drinks and women" and now come begging for more’. This was not only a blatant lie, but leads to enormous anger in the Southern European countries, while diminishing the confidence in the Euro in the Northern European countries.

As this is the biggest danger for the Euro as a unity currency: the ignorance and superficiality (and sometimes sheer stupidity) of not only the populist politicians, but also the formerly moderate politicians, who all seem to do their best to weaken the position of the Euro, instead of reinforcing it.

It is not surprising that every now and then the same story comes around again that ‘Greece and Italy should be kicked out of the Eurozone’. This story is especially popular among more moderate politicians, as the populist politicians state that they and their countries want to leave the Eurozone themselves and return to their classic currencies.

The former, as well as the latter isn’t going to happen… at all! Forget it! Don’t even think about it!

The operation to reintroduce the old currencies in (some of) the Eurozone countries is the same, extremely expensive operation as the introduction of the euro between 1995 and 2002. And it will be equally difficult. 

One could think about all kinds of ‘paper drachmes’ and ‘paper lires’ for Greece and Italy, but the bottomline is that countries leaving the Eurozone would lead to economic havoc and ubiquitous uncertainty everywhere in Europe, with the extremely entangled financial and economic system that we have nowadays. 

There is absolutely no way to prevent that from happening!

We – the united people of Europe, represented by our own elected politicians and representatives – chose to introduce the Euro. Whether we like it or not, the Euro is here to stay and will never go away anymore, unless an economic cataclysm happens, like a war or a widespread and long depression in Europe.

You might ask: "Is the euro flawed?!" Yes, it undoubtedly is!

"Should the euro perhaps have started under different conditions?!" Perhaps, yes!

"But is there a better alternative available?!" No, there is not, in my humble opinion!

Every politician in Europe should accept that the Euro is here to stay and that replacing it for another currency is a nearly impossible challenge and - on top of that - a very dangerous one, from a political and economical point of view.

What politicians should do in order to save the Euro, is just stopping with weakening its position to begin with and instead looking for ways to improve it in its current, flawed, but yet unchangeable form. 

Just like the partners in an average marriage, the Euro is far from perfect, but just like the same partners, the Eurozone countries should try to make the best of it. That is what the European leaders should also try to do: make the best of it and lead it through the current, difficult crisis; hopefully towards a better and more prosperous future. That is in the interest of every European!

And of course the politicians should try to reinforce its foundations, by slowly, but surely working towards the monetary, financial and economic union as the best way to make the euro a more balanced currency. 

However, at this moment it will still be very hard to achieve that, under the still quite anti-EU stance of large groups in European society. Nevertheless, the leading politicians should hold on to this paramount strategy, as the best warranty for a more successful future. 

Like Bryan Ferry of Roxy Music sang in the Seventies: “Let’s stick together!”

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