The Atlantic reports: If Germany’s special parliamentary session on U.S. surveillance this week was any indication, European politicians are still worked up about former NSA contractor Edward Snowden’s leaks. Chancellor Angela Merkel declared that the revelations had “tested” U.S.-German relations. Green Party politician Hans-Christian Strobele urged the German leader to thank Snowden and offer him asylum for discovering that her cell phone “was probably bugged.” Merkel even got called a “scaredy-cat” for not standing up to Washington.
The criticism comes as politicians in the region — from Estonia to Germany — are calling for the European Union to create a cloud-computing infrastructure of its own to compete with American providers like Amazon, Google, and Verizon.
The idea is that if the EU has its own cloud — and what form it would take, who would build it, and where it would be based remain unclear — then member states could compel providers to abide by the EU’s (comparatively) stricter data-protection rules. It’s part of a backlash against the long arm of the U.S. intelligence community that has echoes everywhere from Brazil to the United Nations. [Continue reading...]
Politico reports: The NSA spying controversy is quickly transforming from a domestic headache for the Obama administration into a global public relations fiasco for the United States government.
After months of public and congressional debate over the National Security Agency’s collection of details on U.S. telephone calls, a series of reports about alleged spying on foreign countries and their leaders has unleashed an angry global reaction that appears likely to swamp the debate about gathering of metadata within American borders.
While prospects for a legislative or judicial curtailment of the U.S. call-tracking program are doubtful, damage from public revelations about NSA’s global surveillance is already evident and seems to be growing.
Citing the snooping disclosed by former NSA contractor Edward Snowden, Brazil’s president canceled a state visit to the U.S. set for this week. Leaders in France and Italy and Germany have lodged heated protests with Washington, with the Germans announcing plans to dispatch a delegation to Washington to discuss the issue. Boeing airplane sales are in jeopardy. And the European Union is threatening to slap restrictions on U.S. technology firms that profit from tens of millions of users on the Continent.
“Europe is talking about this. Some people in Europe are upset and may take steps to block us,” former Rep. Jane Harman (D-Calif.) said in a telephone interview from Rome on Friday. “The reaction of retail politicians is to mirror the upset of the people who elected them.”
“Confidence between countries and confidence between governments are important and sometime decisive and there’s almost no confidence between the United States of America and Europe” now, former German intelligence chief Hansjörg Geiger said. “I’m quite convinced there will be an impact…. It will be a real impact and not only the [intelligence] services will have some turbulence.”
Some analysts see immediate trouble for U.S.-European arrangements to share information about airline passengers, financial transactions and more.
“The bigger problems are not in Berlin or Paris, but in the future out of Brussels,” said Michael Leiter, former head of the National Counterterrorism Center. “At the EU, I expect them to be very, very resistant to any increase — and to have problems even with maintenance — of some of the information sharing we have now…..All of this complicates those discussions exponentially.”
For the average person, American or from elsewhere, the knowledge that their own communications are subject to NSA surveillance is likely to be a matter of relatively little concern. Even if they vehimently object to such collection as a matter of principle, they also are likely to feel reasonably confident that for all intents and purposes, this data gets lost almost as rapidly as it gets collected. It instantly becomes buried in vast databases where it will almost certainly never receive further scrutiny. Not only is the collection process unjustifiably intrusive, but it also seems grossly wasteful.
In response to this week’s revelations, Glenn Greenwald wrote:
[N]ote how leaders such as Chancellor Angela Merkel reacted with basic indifference when it was revealed months ago that the NSA was bulk-spying on all German citizens, but suddenly found her indignation only when it turned out that she personally was also targeted. That reaction gives potent insight into the true mindset of many western leaders.
No doubt our political leaders are guilty of all kinds of hypocrisy, but in this case, surveillance of heads of state can hardly be put on a par with surveillance of ordinary citizens.
When the NSA was monitoring Merkel’s communications, it’s reasonable to assume that the monitoring went far beyond recording. They were not getting tossed into a database where they might reside until the day there was some justification to examine them. Much more likely, they were subject to daily analysis.
The NSA might be listening to everyone, but it focuses its attention on far fewer, including as we now know, some of America’s closest allies.
The Guardian reports: Germany and France are to spearhead a drive to try to force the Americans to agree new transatlantic rules on intelligence and security service behaviour in the wake of the Snowden revelations and allegations of mass US spying in France and tapping of the German chancellor Angela Merkel’s mobile phone.
At an EU summit in Brussels that was hijacked by the furore over the activities of the National Security Agency in the US and Britain’s GCHQ, the French president, François Hollande, also called for a new code of conduct agreed between national intelligence services in the EU, raising the question of whether Britain would opt to join in.
Shaken by this week’s revelations of NSA operations in France and Germany, EU leaders and Merkel in particular warned that the international fight against terrorism was being jeopardised by the perception that mass US surveillance was out of control.
The leaders “stressed that intelligence-gathering is a vital element in the fight against terrorism”, a summit statement said. “A lack of trust could prejudice the necessary co-operation in the field of intelligence-gathering.”
Merkel drove the point home: “We need trust among allies and partners. Such trust now has to be built anew … The United States of America and Europe face common challenges. We are allies. But such an alliance can only be built on trust.” [Continue reading...]
The Los Angeles Times reports: European leaders united in outrage Thursday over reported U.S. spying, with German Chancellor Angela Merkel declaring that trust between her government and the Obama administration would need to be rebuilt after reports that U.S. intelligence agencies might have tapped her cellphone.
Amid signs of anger from close allies over mass electronic surveillance, Germany’s Foreign Ministry also summoned U.S. Ambassador John B. Emerson to make clear its displeasure. Foreign Minister Guido Westerwelle said afterward that he had demanded that “these activities that have been reported will be comprehensively investigated. We need the truth now.”
Arriving at a meeting of European Union leaders in Brussels, Merkel said she had “repeatedly made clear to the American president [that] spying among friends is absolutely not OK. I said that to him in June when he was in Berlin, also in July, and yesterday in a telephone call.
“We need trust among allies and partners,” she said. “Such trust must now be built anew.”
Her anger was matched by that of other European leaders at the 28-nation meeting. “We want the truth,” Italian Prime Minister Enrico Letta was quoted as telling reporters. “It is not in the least bit conceivable that activity of this type could be acceptable.”
Reuters adds: A delegation of lawmakers from the European Union will travel to Washington on Monday to seek a response to allegations of widespread spying by the United States against EU citizens and governments, including German Chancellor Angela Merkel.
The three-day visit by members of the European Parliament’s civil liberties committee follows reports this week that the U.S. National Security Agency accessed tens of thousands of French phone records and monitored Merkel’s mobile phone.
The revelations have drawn condemnation from EU leaders meeting in Brussels, with Merkel demanding that the United States sign up to a “no-spying” agreement with Germany and France by the end of the year, in line with similar deals with Britain and others.
The nine-member delegation will meet senior U.S. government and intelligence officials and explore “possible legal remedies for EU citizens” resulting from the alleged surveillance, although it is not clear what such remedies might entail.
The European Parliament has already opened an inquiry into the impact on Europe from leaks by former NSA contractor Edward Snowden, and has led a push for tougher data protection rules and the suspension of a major transatlantic data-sharing deal.
An editorial in the Washington Post says: In response to the serial revelations of National Security Agency (NSA) spying against allied countries, the Obama administration offers two standard explanations. One is pragmatic: sweeping up phone records and other data in places such as France and Germany is an important counterterrorism operation that protects citizens of those nations as well as Americans. The other is tinged with cynicism: Many governments spy on one another, including on their friends, so no one should be shocked to learn that the United States does it as well.
These are reasonable answers, to a point. Germany and other European countries have been home to dangerous Islamist militants, including several perpetrators of the Sept. 11, 2001, attacks. At least some of the spying on such targets is done in cooperation with European intelligence services. And France — which summoned the U.S. ambassador on Monday to express “shock” at the latest revelation of NSA data mining — is known to conduct similar operations, as well as industrial espionage sometimes aimed at U.S. targets.
There are, however, a couple of problems with the administration’s response. Some of the spying, revealed in leaks originating with NSA defector Edward Snowden, has targeted top political leaders and diplomats, including the last two presidents of Mexico, Brazilian President Dilma Rousseff and embassies and offices of the European Union. The NSA apparently scooped up e-mails and text messages of Ms. Rousseff and her top aides, as well as Mexican President Enrique Peña Nieto — something that cannot be explained away as counterterrorism.
The breezy U.S. response also overlooks the damage that revelations of spying are doing to important relationships. A furious Ms. Rousseff canceled a state visit to Washington last month and her government is now busy concocting ways to lessen U.S. leverage on the Internet, including a new encrypted e-mail service. French protests may be hypocritical, but they could also lead to demands that anti-surveillance measures be included in a proposed transatlantic trade treaty. Already the European Parliament is considering legislation that would require technology firms such as Google to consult E.U. governments before complying with U.S. warrants seeking data.
There may be justification for some of this spying. Brazil, for example, has been a problematic partner in recent years, working at cross-purposes to U.S. policy on Iran and several Latin American countries. But the potential benefits of collecting intelligence on nominally friendly leaders has to be weighed against the potential blowback if the operations are exposed — which in the Internet era has become increasingly likely. It seems unlikely that anything gleaned from Ms. Rousseff’s e-mail is worth the trouble it has caused.
Without quite conceding this point, President Obama has been suggesting that U.S. surveillance practices may need adjustment. He promised Mr. Peña Nieto an investigation into the spying and told French President François Hollande in a phone call Monday that there were “legitimate questions for our friends and allies about how these capabilities are employed.” The review that’s underway surely will not lead to an end to foreign surveillance activity, nor should it. But better political controls are needed, along with an injection of common sense.
The core issue here is not about surveillance practices per se but rather the mentality that has facilitated those practices. America continues to strut around the globe with a sense of impunity — with the attitude that its unchallenged power insulates it from any lasting harm that might be caused by offending others. In other words, the American mindset has long been and continues to be: we can get away with anything.
The U.S. can launch
preemptive preventive wars, conduct extrajudicial killings, engage in kidnapping, operate secret prisons, use torture, disregard basic human rights, and spy on the rest of the world, all without constraint. Were any other country to conduct itself in the same way, it would be branded by the U.S. government as a rogue state and face all kinds of threats and sanctions. But America defines itself as exceptional.
To the extent that this grandiosity once had an objective basis, this is now rapidly evaporating. The assumption that our allies need us more than we need them will eventually no longer hold. Indeed, in many ways it does not hold now.
New regulations that could soon be approved by the European Union will force companies such as Google to seek the authorization of European data protection authorities before complying with NSA data requests on European citizens. Any company failing to comply with these regulations could face fines of 5% of global revenue. That means, based on its current revenues, Google could get fined $2-3 billion for an infraction.
The U.S. government and U.S. companies will no doubt continue to fight against the imposition of these regulations, but as much as Americans may be in the habit of scoffing at European power, the fact is America is only two-thirds the size of the EU. The megalomania of NSA chief Keith Alexander notwithstanding, the interests of 500 million people can no longer be trampled on so easily in the name of America’s national security interests.
Slate reports: Lawmakers in the European Parliament have moved to combat clandestine mass surveillance programs by voting in favor of introducing tougher new data protection rules.
On Monday, the Parliament’s civil liberties committee approved the proposed reform, laying the groundwork for a significant overhaul of Europe’s current data protection framework. The changes have been in the works for 18 months, but the former NSA contractor Edward Snowden’s disclosures about U.S. and U.K. spy programs gave new urgency to the overhaul. The newly proposed rules, which still have to be agreed upon by EU member states, would restrict how companies such as Google and Microsoft could pass data on a European citizen to a third country. Companies would have to inform people whose data were requested and get any transfer of data signed off by the data protection authority. Any company caught breaching the regulations could face large fines of up to 5 percent of their revenue, which could in some cases amount to billions of dollars.
German member of the European Parliament Jan Albrecht described the vote as “a breakthrough for data protection rules in Europe, ensuring that they are up to the task of the challenges in the digital age.” Albrecht, a vocal critic of NSA and GCHQ surveillance on the civil liberties committee, added in a statement issued Monday that the legislation would introduce “overarching EU rules on data protection, replacing the current patchwork of national laws.” [Continue reading...]
Jeff Madrick writes: On the last day of 2011, a headline in The Wall Street Journal read: “Spain Misses Deficit Target, Sets Cuts.” The cruel forces of poor economic logic were at work to welcome in the new year. The European Union has become a vicious circle of burgeoning debt leading to radical austerity measures, which in turn further weaken economic conditions and result in calls for still more damaging cuts in government spending and higher taxes. The European debt crisis began with Greece, and that nation remains the European Union’s most stricken economy. But it has spread inexorably to Ireland, Portugal, Italy, and Spain, and even threatens France and possibly the U.K. It need not have done so. Rarely do we get so stark an example of bad—arguably even perverse—economic thinking in action.
Over the past two years, the severe 2009 recession, which started in the U.S. but spread across Europe, have imperiled the finances of one European country after another. As a result, Portugal, Ireland, Spain and Italy are coming under pressure from the EU to cut government spending and raise taxes to reduce their deficits if they wanted to qualify for a bailout. All have done so. Ireland and Portugal sharply cut spending and still had to take tens of billions of euros to help meet financial obligations as of course did Greece. The European Central Bank bought the bonds of Italy and Spain. Britain’s Conservative government led the way in ruthless government cutbacks in 2010. France has adopted its own austerity package, and even Germany, the supposed economic leader of Europe, has planned to cut its deficit by a record 80 billion euros in 2014.
Proponents of austerity claim that as nations take control of their finances businesses become more convinced that interest rates will not rise and that growth will resume. Their reasoning has been abetted by the financial markets, which drove up rates on Greek debt and soon enough on the debt of nations like Portugal, Spain and Italy. Should these nations not be able to pay their debts, bond buyers wanted a high enough interest rate to compensate for the risk.
But this is pre-Great Depression economics. How could the EU so misread history and treat with contempt the teachings of John Maynard Keynes, who argued that during recessions governments must expand economies through spending and tax cuts, not the opposite? In practice, making large-scale budget cuts or raising taxes, as Keynes showed, will reduce demand for goods and services just when an increase is needed. Faltering sales will undermine the confidence of businesses far more than fiscal consolidation will embolden them. By ignoring this, European policy makers will deepen, not solve, the financial crisis and millions of people will suffer needlessly.
The Obama administration’s definition of diplomacy with Iran is that it does not talk about “regime change.” Instead it talks about “tightening the noose.”
As the rial collapses and Iranians die because they can’t afford life-saving medicines, no doubt they feel deeply grateful for America’s kind attention.
The Washington Post reports: At a time when U.S. officials are increasingly confident that economic and political pressure alone may succeed in curbing Iran’s nuclear ambitions, the mood here has turned bleak and belligerent as Iranians prepare grimly for a period of prolonged hardship and, they fear, war.
This stark contrast has been evident in the Iranian capital this week as a top military commander declared a “critical point” in the country’s long feud with the West and ordinary Iranians stocked up on essential supplies. Merchants watched helplessly as the Iranian currency, the rial, shed more than a third of its value, triggering huge increases in the prices of imported goods.
“I will tell you what this is leading to: war,” said a merchant in Tehran’s popular Paytakht bazaar who gave his name only as Milad. “My family, friends and I — we are all desperate.”
The sense of impending confrontation is not shared in Washington and other Western capitals, where government officials and analysts expressed cautious satisfaction that their policies are working.
Former and current U.S. government officials did not dismiss the possibility of a military confrontation but said they saw recent threats by Iranian leaders — including warning a U.S. aircraft carrier this week not to return to the crucial Strait of Hormuz — mainly as signs of rising frustration. U.S. officials say this amounts to vindication of a years-long policy of increasing pressure, including through clandestine operations, on Iran’s clerical rulers without provoking war.
“The reasons you’re seeing the bluster now is because they’re feeling it,” said Dennis Ross, who was one of the White House’s chief advisers on Iran before stepping down late last year. With even tougher sanctions poised to take effect in weeks, the White House had succeeded in dramatically raising the costs of Iran’s nuclear program, he said.
“The measure, in the end, is, ‘Do they change their behavior?’ ” Ross said.
The Obama administration is readying new punitive measures targeting the Central Bank of Iran, while leaders of the European Union took a step this week toward approving strict curbs on imports of Iranian petroleum in hopes of pressuring the nation to abandon what they say is a drive to develop nuclear weapons. Iran says its nuclear program is for peaceful energy production.
State Department spokeswoman Victoria Nuland deemed as “very good news” the E.U.’s commitment to shutting off the flow of Iranian oil to Europe.
“This is consistent with tightening the noose on Iran economically,” Nuland told reporters Wednesday. “We think that the place to get Iran’s attention is with regard to its oil sector.”
In Tehran, that tightening is being felt by millions of people. Economists and independent analysts say the sanctions have aggravated the country’s chronic economic problems and fueled a currency crisis that is limiting the availability of a broad array of goods, including illegally imported iPhones and life-saving medicines.
Paul Krugman writes: It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege.
On that last point, I am not being alarmist. On the political as on the economic front it’s important not to fall into the “not as bad as” trap. High unemployment isn’t O.K. just because it hasn’t hit 1933 levels; ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight.
Let’s talk, in particular, about what’s happening in Europe — not because all is well with America, but because the gravity of European political developments isn’t widely understood.
First of all, the crisis of the euro is killing the European dream. The shared currency, which was supposed to bind nations together, has instead created an atmosphere of bitter acrimony.
Specifically, demands for ever-harsher austerity, with no offsetting effort to foster growth, have done double damage. They have failed as economic policy, worsening unemployment without restoring confidence; a Europe-wide recession now looks likely even if the immediate threat of financial crisis is contained. And they have created immense anger, with many Europeans furious at what is perceived, fairly or unfairly (or actually a bit of both), as a heavy-handed exercise of German power.
Nobody familiar with Europe’s history can look at this resurgence of hostility without feeling a shiver. Yet there may be worse things happening.
The Guardian reports: The European commission could be empowered to impose austerity measures on eurozone countries that are being bailed out, usurping the functions of government in countries such as Greece, Ireland, or Portugal.
Bailed-out countries could also be stripped of their voting rights in the European Union, under radical proposals that have been circulating at the highest level in Brussels before this week’s crucial EU summit on the sovereign debt crisis.
A confidential paper for EU leaders by the EU council president, Herman Van Rompuy, who will chair the summit on Thursday and Friday, said eurobonds or the pooling of eurozone debt would be a powerful tool in resolving the crisis, despite fierce German resistance to the idea.
It called for “more intrusive control of national budgetary policies by the EU” and laid out various options for enforcing fiscal discipline supra-nationally.
The two-page paper, obtained by the Guardian, formed the basis for discussions on an interim report tabled by Van Rompuy, the European commission and the Eurogroup of countries that have adopted the euro, which is to be debated on Wednesday among senior officials in an attempt to build a consensus ahead of the summit.
Elements, however, have already sparked a backlash among eurozone member states and the suggestion that countries could lose their voting rights seems already to have been dropped.
The options outlined by Van Rompuy heavily emphasise the need for a new punitive regime overseen by EU institutions that would be given new powers of intervention. The proposals and policy options, if agreed, will be seen as seriously curbing the sovereignty of member states in setting budgetary, economic, and fiscal policy.
Dean Baker writes: The world is eagerly waiting to see if the European Central Bank (ECB) will take the steps needed to save the euro. Specifically, is the ECB prepared to act as a central bank and guarantee the sovereign debt of the countries in the eurozone as the lender of last resort ordinarily does in a crisis?
If not, there is little doubt what the outcome will be. The austerity being imposed on country after country will slow GDP growth and throw workers out of jobs. Higher unemployment will worsen deficits, since it means less tax revenue coming in and more unemployment benefits and other transfers being paid out. Higher deficits will cause investors to worry about the solvency of the government, leading interest rates to rise.
This gives us the famous downward spiral that already sank Greece’s economy and government. It will soon sink Italy and Spain if the ECB doesn’t start acting like a central bank. The fallout from disorderly defaults from these two countries will cause banks throughout the eurozone to become insolvent, leading to another Lehman-type freeze-up of the financial system.
The end result will be a second recession and another sharp spike in unemployment, not just in the eurozone, but almost certainly across the globe. The finances and the economies of the eurozone are too intertwined with the rest of the world to envision a meltdown that doesn’t also push the rest of the world into recession. At the end of this story, the euro itself is likely to be placed in the dustbin of history, another failed monetary experiment.
Zvi Bar’el reports: It appears that Iranian President Mahmoud Ahmadinejad can rest easy for now, as voices coming from the European Union suggest a military operation is not in the offing. Not only do Syria and China reject such an attack, but on Monday, Germany, France and Turkey added their voices to those objecting to a military option. The United States also does not seem thrilled at the prospect of launching another war in the region.
The European and American plan to impose another dose of sanctions on Iran may be worrisome, but it likely isn’t threatening as long as China, Russia and several of the Gulf states continue regular trade relations with Iran.
The effort to impose restrictions on the export of gasoline to Iran, which can only supply 60 percent of its own demand, is unlikely to come to fruition, as some fear the restrictions would only harm the citizenry and not the regime. Furthermore, the efficacy of such a plan remains doubtful. Iran recently declared that it is capable of producing more gasoline; with a strict rationing program it might well be able to overcome the entire shortage. This would not necessarily mean that Iran could successfully supply its demand for gasoline over the long term, but it would certainly be able to significantly reduce its dependence on foreign imports.
The more ambitious aim of obtaining a UN Security Council resolution to impose international sanctions will have to wait, especially given Russia’s efforts to promote – together with Iran – a new diplomatic plan that is being dubbed “Step by Step.” Under the plan, Iran will begin to respond to the International Atomic Energy Agency’s demands. In exchange for every satisfactory response, the international community would gradually roll back the existing sanctions on Iran.
Iran’s deputy foreign minister visited Moscow last week to discuss this idea with his Russian counterpart, and on Sunday the Russian deputy foreign minister for Middle Eastern affairs, Mikhail Bogdanov, went to Tehran to discuss the joint diplomatic effort with Iranian Foreign Minister Ali Akbar Salehi.
Meanwhile, Iran is adopting a new line of public diplomacy aimed both at Europe and the United States. Yesterday Salehi declared, “Strengthening the ties between Europe and Iran will be very helpful to Europe, since if Turkey joins the European Union, Iran will be a close neighbor of Europe’s.”
Over the weekend Ahmadinejad also said that “The Iranians are a nation of culture and logic, and are not warmongers.” The remarks, made at an event marking the unveiling of ancient artifacts returned by Britain to Iran, received big headlines in the Iranian press.
It is not clear what Ahmadinejad meant by “logic,” yet it notably was Ahmadinejad who initiated the 2010 agreement to deposit Iranian uranium in Turkey. Ahmadinejad is also believed to lead a certain school of thought that maintains it is better to come to an agreement with the West now, as opposed to the views of much of the radical religious leadership, which objects to any agreement.
In the end, Ayatollah Ali Khamenei will be the one to decide whether to promote any new diplomatic options. But the assessment that he still hasn’t given the green light for the production of nuclear weapons seemingly leaves the window of diplomatic opportunity open.
Ahmadinejad also can rest easy about his domestic situation. Yesterday he got some unexpected support from Mohammad Khatami, Iran’s former president, who is considered the leader of the Iranian opposition, and who until now never failed to criticize his rival. Khatami declared that if there were an attack on Iran, all groups – those that want reform and those that don’t – would unite to rebuff the attack.
Khatami defined the Israeli threat as “psychological warfare and a bluff,” but expressed concern that such psychological warfare could persuade the international community that an attack on Iran was possible.
Iranian opposition sources say that the debate over a possible attack on Iran plays directly into Ahmadinejad’s hands, since it boosts his political position not only vis a vis the opposition, but also vis a vis the supreme leader, Khamenei, whose confidants see Ahmadinejad as a political threat.
Larry Elliott writes: Financial markets rallied last week when the Greek prime minister, George Papandreou, announced he was dropping plans for a referendum on the terms of his country’s bailout. Bond dealers liked the idea that the government in Athens could soon be headed by Lucas Papademos, a former vice-president of the European Central Bank. Angela Merkel and Nicolas Sarkozy think Papademos is the sort of hard-line technocrat with whom they can do business.
Silvio Berlusconi’s long-predicted departure as Italy’s prime minister will no doubt be greeted in the same way, particularly if he is replaced by a government of national unity headed by another technocrat, Mario Monti. A former Brussels commissioner, he is seen as someone who could be relied upon to push through the European Union’s austerity programme during the next 12 months, watched over by Christine Lagarde’s team of officials from the International Monetary Fund.
From the perspective of the financial markets, this makes perfect sense. Papandreou could no longer be relied upon, and his decision to hold a plebiscite threw Europe into turmoil last week, blighting the Cannes G20 summit. He had to go.
In Italy, Berlusconi is seen as entirely the wrong man to cope with his country’s deepening crisis; bond yields are above 6.5%, a level that eventually resulted in bailouts for Greece, Ireland and Portugal. He, too, has to go in the interests not just of financial and political stability but to prevent the eurozone from imploding.
The European Union has always had problems with democracy, a messy process that can interfere with the grand designs of people at the top who know best. When Ireland voted no to the Nice Treaty, it was told to come up with the right result in a second ballot. The European Central Bank wields immense power, but nobody knows how the unelected members of its governing council vote because no minutes of meetings are published. That said, the latest phase of Europe’s sovereign debt crisis has exposed the quite flagrant contempt for voters, the people who are going to bear the full weight of the austerity programmes being cooked up by the political elites.
Here’s how things work. The real decisions in Europe are now taken by the Frankfurt Group, an unelected cabal made of up eight people: Lagarde; Merkel; Sarkozy; Mario Draghi, the new president of the ECB; José Manuel Barroso, the president of the European Commission; Jean-Claude Juncker, chairman of the Eurogroup; Herman van Rompuy, the president of the European Council; and Olli Rehn, Europe’s economic and monetary affairs commissioner.
This group, which is accountable to no one, calls the shots in Europe. The cabal decides whether Greece should be allowed to hold a referendum and if and when Athens should get the next tranche of its bailout cash. What matters to this group is what the financial markets think not what voters might want. To the extent that governments had any power, it has been removed and placed in the hands of the European Commission, the European Central Bank and the IMF. It is as if the democratic clock has been turned back to the days when France was ruled by the Bourbons.
In the circumstances, it is hardly surprising that electorates have resorted to general strikes and street protests to have their say. Governments come and go but the policies remain the same, creating a glaring democratic deficit. This would be deeply troubling even if it could be shown that the Frankfurt Group’s economic remedies were working, which they are not. Instead, the insistence on ever more austerity is pushing Europe’s weaker countries into an economic death spiral while their voters are being bypassed. That is a dangerous mixture.
The Guardian reports:
Nicolas Sarkozy has called for targeted air strikes against Muammar Gaddafi’s regime if his forces use chemical weapons or launch air strikes against civilians.
As the EU foreign policy chief, Lady Ashton, warned that a no-fly zone could risk civilian lives in Libya, the French president told an emergency EU summit in Brussels that air strikes may soon be justified.
“The strikes would be solely of a defensive nature if Mr Gaddafi makes use of chemical weapons or air strikes against non-violent protesters,” Sarkozy said. The French president qualified his remarks by saying he had many reservations about military intervention in Libya “because Arab revolutions belong to Arabs”.
Sarkozy said he had won the support of David Cameron for his plan which would have to be approved by the UN, Arab states and Libyan opposition groups.