Thursday 27 March 2014

The Tactical Unity of Thieves

How is it possible to forge an alliance between an imperialist power that is committed to EMU and one that may hold a referendum on whether to leave the European Union? Or between a big manufacturing power and one whose interests lie in the promotion of financial 'services'? It is not so difficult in these troubled times, when the shifting tectonic plates of power balances make all the key players consider their position. Consider the joint article written by (writers for) Germany's finance minister, Wolfgang Schäuble, and Britain's chancellor of the exchequer, George Osborne, in today's Financial Times. It is an important political concession to the UK, but one that also reflects Germany's interests. Furthermore, it reveals a striking view of the future for Europe's population.
They start out by lauding their policies to rein in public spending deficits and 'reform' their economies, adding that measures have been taken to prevent future financial crises from damaging public finances (strangely omitting to mention the Bank of England's policy to expand the UK banking system to nine times GDP). Then, ever so bravely, they rail against Russia's actions in Crimea, also failing to note the EU's role in putting Russia in a position where it had little choice but to act. There will be 'consequences' for Russia, but they will be 'balanced and proportionate'. They do not mention that any further measures will not be against UK financial, etc, and German energy supply interests, but perhaps their writers were too busy and overlooked that point of clarification. Surely, the Chelsea football team would not be incarcerated if Russian assets in London were to be seized?!
Striking points are made next on Europe's decline: Europe's economy has 'stalled', others have grown; Europe's share of patent applications has halved in the past decade; there is 25% youth unemployment. The solution? Reform! What kind of reform? 'Europe accounts for just over 7 per cent of the world’s population but 50 per cent of global social welfare spending'. Draw the obvious conclusions about what this means for the lifestyles of a privileged population.
The key concession for the UK in this article is Schäuble's agreement to the view that 'countries outside the euro area are not at a systematic disadvantage in the EU' and that there is a guaranteed 'fairness for those EU countries inside the single market but outside the single currency'. The reason for Germany's position on this is that, as the paymaster for Europe, it is very happy with the UK's influence in restricting the EU budget. It also agrees with the UK perspective of boosting trade deals with the US and other regions, and there is little conflict here as each country has different things to sell, each with its own distinct market power.

Tony Norfield, 27 March 2014

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