Some recent items of interest

April 11, 2016


The Greek prime minister Alexis Tsipras has just signed an anti-austerity pact with visiting Portuguese prime minister Antonio Costa, Tsipras describes it as “Joint declaration against austerity for a progressive democratic Europe”.

Full text is here.


Meanwhile the Bank of Portugal lowers growth forecast, below government’s forecast.

“The Bank of Portugal lowered its 2016 economic growth forecast on Wednesday to 1.5 percent, which is the same as last year, in a move that casts new doubts on the left-leaning government’s targets for growth and deficit.

The central bank projection is worse than the government’s forecast of 1.8 percent. When the new administration came to power in November, it began reversing austerity after years of debt crisis and bailout, and the deficit cuts it promised to the European Commission depend on growth reaching that level.

In the first update of its economic projections this year, the central bank expected growth to pick up to 1.7 percent in 2017, then slow to 1.6 percent in 2018. It noted various downside risks to the forecasts, mainly lower growth from foreign trade.

“The weakening of growth in 2018 reflects structural constraints to potential growth of the Portuguese economy, especially the high indebtedness of the private and public sectors,” it said.”


Very detailed and interesting review of Martin Sandbuby’s new book (The Future of the Euro and the Politics of Debt) by Wolfgang Streeck in the London Review of Books entitled “Scenario for a Wonderful Tomorrow”

Streeck starts his analysis rather obliquely by looking at how Merkel and Germany drove the agenda on the refugee crisis, and explains starting his review that way as follows:

“And why dwell so long on the refugee crisis when I’m supposed to be discussing a book on the euro crisis? The answer is that Merkel’s immigration policy offers an object lesson in what other countries can expect from Germany acting European. Just as the United States sees the world as an extended playing field for its domestic political economy, Germany has come to consider the European Union as an extension of itself, where what is right for Germany is by definition right for all others. There is nothing particularly immoral about this; indeed Germans think it is supremely moral, as they identify their control of Europe with a post-nationalism understood as anti-nationalism, which in turn is understood as the quintessential lesson of German history. Very much like the US, German elites project what they collectively regard as self-evident, natural and reasonable onto their outside world, and are puzzled that anyone could possibly fail to see things the way they do. Perhaps the dissenters suffer from cognitive deficits and require education by Schäuble in the Eurogroup classroom?

One problem with hegemonic self-righteousness is that it prevents the self-righteous from seeing that what they consider morally self-evident is informed by self-interest. The self-interest of German export industries, for example, underlies Germany’s identification of the ‘European idea’ with the single European currency. The problem is exacerbated by the fact that the national interest that is mistakenly seen as identical to the interest of all reasonable human beings, in Europe and beyond, is necessarily shaped by the political interest of the government and its dominant social bloc in preserving their power. This puts peripheral countries at the mercy of the national power games and the moral and semantic ethnocentrisms of countries at the centre, which are hard to decipher for outsiders – especially with a postmodern leader like Merkel who, free from substantive commitments and constitutional constraints, has perfected the art of staying in power by means of unpredictable changes of course.”

Thanks to Geraldine for pointing this review out to me.


Interesting article by Tom Mctague entitled “Corbyn to the rescue in Tories’ Brexit storm: Cameron needs the Labour leader to speak convincingly in favour of the EU, despite his Euroskeptic past”

“Labour leader Jeremy Corbyn will make a long-awaited intervention in the campaign to keep Britain in the EU next week, amid growing concern in Westminster that angry working-class voters may hand the Leave campaign an unlikely victory following a series of political controversies which have rocked the government.

Corbyn, a lifelong Euroskeptic who voted against British membership in the last referendum in 1975 and rejected both the Maastricht and Lisbon treaties, will deliver his first major speech on Europe on Thursday, senior party sources told POLITICO.

It follows a series of outspoken attacks on the controversial 66-year-old leader from within the Labour Party over his less-than-full-throated support for Britain’s continued membership, despite officially siding with the overwhelming majority of MPs in his party who are campaigning against Brexit.

Pro-European Conservative ministers and Labour MPs are increasingly concerned that a “perfect storm” of events undermining trust in the government threatens to send the U.K. crashing out of the EU.”


The FT has an article “Explaining Bernie Sanders’ ‘too big to fail’ plan” which looks at what Sanders is proposing in relation to reform of the finance sector compared to the policies proposed by Hilary Clinton.

“Mr Sanders’ main strategy for breaking up the banks would be to expand the authority of the Financial Stability Oversight Committee, a powerful committee of regulators that identifies “too big to fail” institutions. While the Dodd-Frank Act already gives the Treasury the authority to determine which financial institutions pose systemic risks to the economy, the Treasury has not actually broken up any financial institutions.

In an interview with MSNBC on Friday, Mr Sanders said he could take two routes to break up the banks. One would be to use Section 121 of the Dodd-Frank Act while a second would be to get his 2015 “Too Big To Fail, Too Big to Exist” act to be passed by Congress. That act would bar any financial institution deemed too big to fail from receiving financial assistance from the Federal Reserve and force the Treasury to break up the banks — rather than just deeming them systemically risky, as the current legislation does.“


A very interesting “Iraq Situation Report: The Military Campaign Against ISIS” By Ken Pollack at the Brookings Institution argues that the US led Iraqi counterattack against ISIS is going very well but there are inadequate political plans about what would come after a military defeat of ISIS. Part two of the analysis “Iraq Situation Report, Part II: Political and economic developments“ is also worth a look.

“The purely military aspects of the campaign appear to be progressing well, finally beginning to hit on all cylinders. A superb American command team has found important news to greatly improve the impact of U.S. air power, SOF, and direct support. The Iraqi Army has been partly rebuilt, and those units retrained and re-equipped by the coalition are performing noticeably better than the others. While the coalition’s military power is slowly building, the increasing pressure on Da’esh is diminishing its capacity to resist.

Unfortunately, as has been a trademark of American involvement with Iraq at least since 2003 (and arguably since 1991), military success is not being matched with the commensurate political-economic efforts that will ultimately determine whether battlefield successes are translated into lasting achievements. In particular, the absence of developed and resourced plans to deal with post-conflict stabilization and reconstruction, and the lingering question regarding the future status of the militias raise huge questions about whether these victories will prove as ephemeral as America’s many past triumphs in Iraq.”

Thanks to Andrew for pointing this article out to me.

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