Eén van de ironieën van de sinds afgelopen weekend ontstane politieke crisis waar Nederland zich in bevindt, is dat ik – en ik niet alleen – het eigenlijk wel eens ben met Geert Wilders over de 3-procentsnorm. Een enorme keur aan economen en beleidsmakers, van het IMF, de Amerikaanse regering tot aan allerlei wetenschappers, hebben de afgelopen maanden terecht betoogd dat vasthouden aan een maximaal begrotingstekort van 3 procent van het BBP als recept om “uit de crisis te komen” een vorm van monetaristisch neoliberaal cijferfetisjisme is (zie afbeelding).
Nederland doet het per saldo helemaal niet slecht. De staatsschuld is lang niet zo groot als in vele Europese landen en de VS, de werkloosheid is niet hoog, en ook het begrotingstekort valt in de huidige Europese context echt wel mee. Waar we mee te maken hebben is een economische recessie, en die wordt grotendeels veroorzaakt door een gebrek aan consumentenvertrouwen, door de belachelijk hoge hypotheekschuld in dit land. Die wordt weer veroorzaakt door de hypotheekrenteaftrek, het behoud van welke voor CDA en VVD bij de vorige verkiezingen een breekpunt was. Dát is wat ons nu belemmert, en niet in de eerste plaats de staatsschuld of het begrotingstekort.
Als we weer economische groei willen hebben, is het laatste wat we moeten doen rücksichtlose bezuinigingen doorvoeren, VVD-style. Daar waarschuwt het IMF, nota bene, al tijden tegen. In Europa deelt Duitsland echter de lakens uit, en daar zijn politici aan de macht die in hetzelfde monetaristische cijferfetisjisme geloven als de VVD in Nederland. Dus moet er gehakt worden, ten koste van economische groei. Dit komt voort uit een bewust doorgevoerde beperking van de mogelijkheden van de politiek om de financiële markten af te weren. In plaats van een grotere rol voor de Europese centrale bank, iets waar ze in de VS en Groot-Brittannië wel gebruik van maken, zijn regeringen hier met handen gebonden om het vertrouwen van de markten te behouden. Hun enige optie, bij gebrek aan euro-obligaties of andere mogelijkheden tot verruiming van de acute nood (hoewel het ECB natuurlijk stiekem, tegen de zin van Duitsland en Nederland in, bezig is geweest met geld in het bankensysteem te pompen), is hakken in de begroting. Ten koste van alles.
De Europese Commissie (EC) legt dit ook op, en daar komt dat hele Catshuisberaad uit voort. Wilders en de PvdA, hoewel ze verschillen van mening over hervormingen, merken terecht op dat het ook wel wat rustiger aan kan met die miljarden. Juist om economische groei te stimuleren, in plaats van te dempen. Wilders is een Keynesiaan geworden. Er is heel wat voor te zeggen om in te zetten op hervormingen die op de lange termijn beter zijn, en later het begrotingstekort in evenwicht brengen, dan nu als een malle te gaan hakken.
De PvdA, Wilders, en andere linkse partijen in Nederland staan daarin niet alleen. De mogelijke verkiezingsuitslagen in Frankrijk, met een overwinning van Hollande, wijzen ook in de richting van een voorkeur van het electoraat in die richting. En in Praag wordt er ook flink gedemonstreerd. Iemand als Coen Teulings, directeur van het Centraal Planbureau (CPB), pleit hier al tijden voor. Idem dito Christine Lagarde van het IMF, en Geithner van de Amerikaanse regering. En zelfs kredietbeoordeelaars als Standard & Poor’s zien puur snijden als “kannibalisme”. Zoals de New York Timesanalyseert: Angela Merkel en haar geestverwanten komen steeds meer alleen te staan.
De vraag – en die vraag speelt al vanaf het begin van de eurocrisis – is hoe lang Duitsland, de EC, en de conservatieven en liberalen die nog de toon zetten met hun nergens in de wereld in deze strikte zin voorkomende monetaristische opvattingen, nog hun zin gaan krijgen. Laat maar lekker een tikje oplopen dat begrotingstekort, zou ik zeggen. Nu alleen inzetten op bezuinigen om die 3 procent maar in no time te halen, zonder structureel te hervormen, richt onherstelbare schade aan aan de economie én aan publieke voorzieningen en de verzorgingsstaat. Wanneer de economie weer groeit, in plaats van krimpt of matig groeit, kan er afgelost worden. En nog beter zou daarbij zijn wanneer de ECB een grotere rol zou krijgen, en/of eurobonds ingesteld zouden worden, zodat de armslag om financiële markten af te weren ook ruimer wordt.
”I want to denounce in the strongest possible manner the entire process that led to the signature of this agreement: no inclusion of civil society organisations, a lack of transparency from the start of the negotiations, repeated postponing of the signature of the text without an explanation being ever given, exclusion of the EU Parliament’s demands that were expressed on several occasions in our assembly.”
“As rapporteur of this text, I have faced never-before-seen manoeuvres from the right wing of this Parliament to impose a rushed calendar before public opinion could be alerted, thus depriving the Parliament of its right to expression and of the tools at its disposal to convey citizens’ legitimate demands.”
“Everyone knows the ACTA agreement is problematic, whether it is its impact on civil liberties, the way it makes Internet access providers liable, its consequences on generic drugs manufacturing, or how little protection it gives to our geographical indications.”
“This agreement might have major consequences on citizens’ lives, and still, everything is being done to prevent the European Parliament from having its say in this matter. That is why today, as I release this report for which I was in charge, I want to send a strong signal and alert the public opinion about this unacceptable situation. I will not take part in this masquerade.”
Vanwege grote workload en even grote onderbezetting hebben uw doorgaans zo kritische bloggertjes van LSD ernstig gefaald waar het gaat over ACTA -- het in geheime achterkamertjes zonder invloed van parlementen bekokstoofde internationaal-juridische verdrag via welke de copyright-industrie het vrije Internet aan banden meent te gaan leggen. En, bovenal, een elektronische surveillancestaat met permanente monitoring van Internetters (iedereen) aan te gaan leggen waar je U tegen zegt.
Het Europees Parlement -- om precies te zijn, 16 van de 736 Europarlementariërs -- is het laatste wat nog tussen ondertekening en implementatie van ACTA staat.
Daarom deze onbeschaamde re-post van een dringende oproep tot actie van GeenStijl, in samenwerking met D66-Europarlementariër Marietje Schaake. Ook overgenomen door Retecool, Sargasso en Bits of Freedom. Dit is collectieve burgeractie in het Internettijdperk, en wat de Amerikanen konden met SOPA en PIPA kunnen wij met ACTA:
Prima initiatief van Marietje Schaake, europarlementariër voor D66. Via reddit -- dat al eerder zeer succesvol actie voerde tegen copyrightbeschermende maatregelen die het internet aan banden proberen te leggen -- probeert ze internetters te mobiliseren om parlementsleden online te stalken om op die manier ACTA van tafel te krijgen. Waarom? Omdat door ACTA straks individuele F5′ers snoeihard aangepakt gaan worden. Lees maar in het verdrag (PDF) onder Sectie 5, digital enforcement. KIJK MAAR! En omdat een petitie ook maar een middeleeuws middel is dat eigenlijk geen zier helpt. Een ontploffende mailbox maakt natuurlijk veel meer indruk. Eens kijken hoe ze in Brussel en Den Haag reageren wanneer de machtige netwerkgeneratie uit woede massaal haar harige vuist online op tafel slaat. Het internet kan wel een beetje burgerlijke ongehoorzaamheid gebruiken. HIER ziet u wie er in het EP eigenlijk voor en tegen ACTA hebben gestemd. Dat is vooral handig wanneer de PVV voor de zoveelste keer probeert te spinnen dat ze heus wel tegen ACTA zijn, terwijl ze zich destijds gewoon ijskoud van stemmen hebben onthouden. Welnu, een lijst met mailadressen van EP-leden waar u uw grieven omtrent ACTA kunt droppen staat HIER. Eenzelfde lijst met leden van de Tweede Kamer vindt u DAAR. Probeer voor een keer de goatses en tubgirls thuis te laten. Een inhoudelijk verhaal waarom u ACTA niet ziet zitten werkt veel beter. Voor vragen kunt u Marietje natuurlijk ook zelf mailen op marietje.schaake-office@europarl.europa.eu. Met een beetje goede wil scharen meerdere partijen (we denken aan Bits of Freedom, De Piratenpartij en nog meer goedwillende blogs) zich achter deze actie en kunnen we dat verwerpelijke ACTA slopen. Power to the internets! ¡No pasarán! UPDATE: Mensen opletten: de politici die VOOR die motie stemden zijn TEGEN het ACTA-verdrag. Degene die TEGEN hebben gestemd zijn dus de villains die u moet mailbomben. Duidelijk zo? UPDATE: Website van EP heeft het zwaar wegens vermeende ddos-aanvallen van scriptkiddies. Hier en hier lijst met mailadressen. UPDATE: Solidariteit in de blogosfeer: Retecool & Sargasso doen mee. UPDATE: Ook Bits of Freedom sluit zich aan.
Hier de oproep van Marietje Schaake, die veel nuttige info bevat (dit is waarom ik lid ben van D66 trouwens):
As a Member of the European Parliament (EP), I am concerned about the ACTA treaty in the international trade committee (INTA). Please find some information about the procedure of the ACTA treaty in the EU, especially the EP, below. You can reach me on Twitter via @marietjed66, where I will also post a message about this post.
The internet blackouts by thousands of websites last week in protest of the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA) have raised lively discussions. Not only in the US but also in the EU the question is how to balance or reform copyright laws whilst preserving an open internet.
The success of the protests against SOPA and PIPA has also given the internet community quite a confidence boost. How will this development influence future legislative proposals? The Anti-Counterfeiting and Trade Agreement (ACTA) is the next controversial treaty which may be about to become law. This is an international trade agreement which aims to halt counterfeited products, but also affects the internet. Already massive protests have taken place on the streets of Poland against ACTA.
A wide range of NGO’s, scholars, civil society organisations, engineers, industry and activists have expressed concern about the impact ACTA will have on online freedom and freedom of speech. But there are also serious questions about access to medicine and the fact that ACTA may violate international law. Certainly, the lack of transparency of the negotiations has made it very difficult for both civil society and the European Parliament to monitor the drafting process.
The European Commission and Member States will sign ACTA on Thursday January 26th in Japan. However, the European Parliament has a decisive voice on ACTA. It can determine whether the EU ratifies the treaty or not. Ratification means the treaty will actually be enacted; the signature itself is not legally binding but expresses intent and agreement on the text.
Next steps
The European Parliament has the decisive voice on ACTA and the INTA committee has the lead. Other committees will be developing their opinions on ACTA in the coming months. You can find some more information about the procedures and relevant committees on this official EP website
The 1st exchange of views on ACTA in the INTA committee is scheduled for either the 29th of February or the 1st of March. The committee will then most likely vote on the ratification of the treaty in April or May.
After that, the most important vote will be during the Strasbourg plenary session on June 11th to 14th, where all MEPs will be able to vote on ACTA. (Please note that these dates may change). If the majority of MEPs vote in favour of ratification ACTA will be ratified by the EU.
So what can we do to stop ACTA?
If you are concerned about ACTA, you can convince the EP to vote against ACTA. In November 2010 we proposed an alternative resolution on ACTA, which intended to take away the main concerns. It was voted down by a very slight majority,please see here (the red section represents MEPs voting against our resolution). As you can see, the difference is only 16 votes, out of 736 (or 754 as it stands now). Another text was then voted in favour, which said the Commission should carry on its negotiations.
If you are concerned about ACTA, contact MEPs (from your country of political party), especially targeting the ones who are in the committees who will vote on ACTA in the coming months. You can find their email addresses on the EP website. Perhaps it won’t have to come to a blackout!
I will organise a hearing in April, where parties that will be affected by ACTA can give their opinion. This meeting will be live streamed. If you wish to be informed about this, please send me an email: marietje.schaake-office@europarl.europa.eu.
I believe internet offers tremendous opportunities to bring makers of music, film and other cultural content closer to audiences at lower prices. However, while Europe offers the most attractive and diverse content in the world, much of it is locked behind fragmented copyright laws. Instead of focusing on enforcement, we must focus on reform, while keeping in mind that it is not the government’s job to preserve certain business models against the forces of the free market.
TL;DR: Important dates for ACTA in the European Parliament:
- 29 February/1 March: Discussion in international trade committee,
- April or May: Vote in international trade committee,
- 12, 13 or 14 June: Final vote in plenary (most important vote).
(Please note, all dates may be changed)
Hey look, what’s that? Is it… the European Central Bank (ECB) taking up a central role in solving the euro crisis? But that’s unheard of! Weren’t budget cuts in Mediterranean countries going to accomplish that?
The ECB may not be issuing eurobonds or print money, but out of the public eye, they’ve definitely taken up a central role. They do this by providing banks with almost interest-free emergency capital. And those banks have come to the rescue of the governments that couldn’t sell bonds for very high interest rates a few months ago. So, as was argued for by a lot of people back then, the ECB, albeit not straightforwardly, has started to act like all other central banks around the world. Only they will not tell us this. And it seems that the eurozone now, unlike a month ago, is not teetering on the brink of collapse.
Throughout the month, countries caught in the eye of the European financial storm, including Italy, Spain and France, have repeatedly defied expectations, selling big batches of bonds to the public at interest rates significantly lower than investors demanded at the height of the euro crisis late last year.
The surprisingly successful auctions owe little to improving economic data around the region. On the contrary, many of the countries that use the euro as their currency appear to be confronting a renewed recession, and pessimism about their growth prospects remains abundant. Just last week, Standard & Poor’s stripped France of its coveted AAA rating for the first time in recent history and downgraded eight others.
Instead, most of the credit seems to go to the European Central Bank, which in late December under its new president, Mario Draghi, quietly began providing emergency loans to European banks — hundreds of billions of dollars of almost interest-free capital that the banks have used to come to the rescue of their national governments.
The central bank, based in Frankfurt, used typically understated and technical language to describe its actions, but it appears to have done what its leadership said throughout 2011 that it would not do: namely, flood the financial markets with euros in a Hail Mary attempt to make sure that the region’s sovereign debt crisis does not lead to a major financial shock.
Though on a smaller scale and in a subtler manner, it has in many ways taken a page from the United States Federal Reserve’s playbook for the 2008 financial crisis, which has been roundly criticized in Europe as a reckless bailout that risks setting off uncontrolled inflation. And, at least for now, the effort has worked. Spain’s 10-year bonds carry interest rates that hover around 5.5 percent, compared with 7 percent and higher in November, and Italy’s five-year bonds are approaching 5 percent, down from nearly 8 percent at their peak.
There have been moments before when European leaders declared the crisis contained, only to see it return with renewed fury. But the central bank’s incentives, combined with a push from the private banks’ home governments, seem to have convinced investors that this time may be different, and financial markets in Asia, Europe and the United States have responded with strong gains this year.
Yet another sign that the northern European conservative and liberal dogmatic creeds against using the ECB as a true central bank are not so widely spread outside their own little hub. Leaving ECB executive board member Lorenzo Smaghi said today that he doesn’t understand the “quasi-religious” discussions about letting the ECB use the money printing press, if necessary, just like every other central bank in the world does.
Note that Smaghi says that the ECB should do this only to combat deflation (and not to reduce unnecessary exposure to the financial markets). Yet it was already predicted a while ago that policymakers would increasingly try to give the ECB a more prominent role in solving the short-term crisis by framing it as an inflationary matter - which is in tune with the central task of the ECB. Also note that the ECB is increasingly pumping money into the tightening European credit system, to battle the credit squeeze.
European Central Bank Executive Board member Lorenzo Bini Smaghi said that policy makers shouldn’t shirk from using quantitative easing if deflation becomes a danger to the euro region.
“I do not understand the quasi-religious discussions about quantitative easing,” Bini Smaghi, who will leave his post at the end of the month, said in an interview published yesterday by the Financial Times. The ECB confirmed the comments. “It is appropriate if economic conditions justify it, in particular in countries facing a liquidity trap that may lead to deflation.”
Unlike the U.S. Federal Reserve and the Bank of England, the ECB has offset liquidity created by purchases of government bonds so that such operations don’t amount to quantitative easing that stokes inflation. ECB Executive Board member Juergen Stark told Germany’s Die Welt newspaper in an interview published today that the central bank doesn’t “have a mandate” for unlimited purchases of government bonds.
Growth prospects in Europe “have deteriorated” since September, U.K. central bank Governor Mervyn King said yesterday after a risk assessment by European officials. Stark, who resigned in September to protest bond purchases, said while the euro-region economy could shrink at the end of 2011, deflation threats are “significantly lower” than after the collapse of Lehman Brothers Holdings Inc. in 2008.
(…)
“Central banks are given a clear mandate, to achieve price stability, and the independence to achieve it through the instruments they consider most appropriate,” Bini Smaghi said. “If conditions changed and the need to further increase liquidity emerged, I would see no reason why such an instrument, tailor made for the specific characteristics of the euro area, should not be used.”
(…)
Quantitative easing “is implemented in the U.K. and U.S., where the central banks consider that there are risks of deflation and where the policy rate is constrained by the zero lower bound,” Bini Smaghi said. “This is currently not the case in the euro area because the ECB currently sees no risk of deflation.”
Instead of more bond purchases, the ECB has so far opted to grease the banking system with unlimited liquidity of up to three years, hoping financial institutions will lend the money on to companies and households. The institution loaned banks a record 489 billion euros ($636 billion) for three years on Dec. 21 to avert a credit crunch from the sovereign debt crisis.
As I’ve blogged before, I’m kinda tired of writing about the eurozone debt crisis. The results of the once again ”crucial” European summit that starts today are fairly predictable: announcements of more, even radical, fiscal discipline and sanction mechanisms across the European Union (or the eurozone), a further integration of tax and labour market policies, and no hopes whatsoever for an expanded role of the ECB in the form of it acting as lender of last resort or as issuer of eurobonds. Everything that Germany wants, happens.
In other words: in order to please the financial markets, only one of the structural deficiencies of the eurozone is being addressed: the disparity in budgetary policies across member states. The other ones - the existence of separate bonds markets and the absence of a true central bank, which leads to Europe’s heightened exposure to the judgment of financial markets and credit rating agencies - are not addressed at all. All this because of Germany’s fear of inflation.
The European debt crisis is now starting to become a democratic crisis as well. This is happening on two levels. First, in order to please the financial markets, “reforms” and budget cuts are being imposed on southern European countries at huge social and economic costs without the population having any say in it. Elected politicians are removed not by elections or the people on the street, but replaced by so-called “technocrats” under pressure of the financial markets. Moreover, across the entire eurozone radically tightened fiscal discipline, which will have a huge bearing on social and economic policies, is being imposed without the population having any say in it; once again, to please the markets. The German, i.e. the conservative/(neo-) liberal policy solution for everything – fiscal discipline, budget cuts and market reforms - is imposed throughout the eurozone by Diktat.
Whether you like this particular economic policy package or not (I’m personally not against it), there’s no escaping the fact that the past months we’ve witnessed a huge shift in sovereignty from democracy to the market. Financial markets dictate what must be done; and it is reinforced by those policy-makers in charge who happen to walk in tune with those markets.
The second level at which democracy is under attack is in the transfer of powers from the national level to the European one. It is by now accepted that the only solution for the eurozone is a further federalization of fiscal, social and economic policies. The European Commission (EC) is likely the institution that will benefit the most from this. Yet, whether you are in favour of the European project or not, the EC is ultimately a technocratic institution; it is a super-regulator that issues “directives” and “regulations” to be imposed uniformly across member states without interference of national parliaments. The European Parliament (EP), the only European institution that is truly democratically legitimized (but only by a minority of voters), does not have the right of initiative; it is the barely legitimized EC that is the one policy ”motor” of the European Union. This situation will only be exacerbated by the current eurozone crisis.
In short, there’s a double crisis of democracy going on: one in the shift of decision-making power from the political sphere to the market, and a second in the transfer of powers from the national level to a barely legitimized European one. In between, the voice of the people is crushed. Particularly worrying is the talk, to be heard here and there, that “democracy” really is just one way to govern a country, that it was a nice experiment, but that it doesn’t really work in an age of globalized financial markets and much-needed technocratic European governance. Have we now really entered a 1930s-style “crisis of democracy”? Is the democratic principle itself being questioned?
To me, the need for a more unified Europe if the single currency is to be saved is clear. But the democratic deficit is getting painful. German solutions mean a half-hearted attempt to create a fully functioning economic zone, but an almost complete transfer of fiscal discretionary powers to an incompletely legitimized supra-European entity. Is that what we want? Do we have any say in that? In my view, the democratic level of the European Union is to be deepened if any of this is the result of current talks. This would mean a broadening of the powers of the EP to become a fully-fledged representative body with legislative powers, as well as finally some concerted effort on the part of European and national policy-makers to promote European democratic institutions amongst the populace. The ECB should also really be allowed to function as a central bank.
Otherwise, the result will be something we have now, but even more overbearing. A soft kind of technocratic regime, composed of an intricate byzantine web of committees, networks, councils and summits and a super-regulator, governed by one particular budgetary philosophy, all the while constricting national discretion to formulate policies, that is whipped from here to there by the financial markets. Even if this solution is, for now, accepted by those financial markets, I don’t think it will hold in the future. And there is no place for democracy in it either.
Yesterday and today, lots of ‘authoritative’ newspapers and journals once more published gloomy articles about the coming end of the eurozone, largely due to the perceived inaction of leading (German and other northern European, notably Dutch) politicians. Particularly their refusal to set up the ECB as lender of last resort and/or let it buy state bonds on large scale and/or let it issue eurobonds, and their continued insistence on austerity and budget cuts as the only “solution”, now leading such esteemed organizations as the OECD to condemn their inaction. France is threatened with a credit rating downgrade, as a matter of fact the entire eurozone is threatened with a downgrade, the stability fund doesn’t have nearly enough funds, and… oh well.
I’m getting kinda tired writing about this so maybe I’ll quit doing it, but here goes once more (my bet is on the end of the eurozone before New Year’s Day, by the way)…
Bloomberg (‘The Euro Area Is Coming To An End’, written by the former chief economist of the IMF):
Investors sent Europe’s politicians a painful message last week when Germany had a seriously disappointing government bond auction. It was unable to sell more than a third of the benchmark 10-year bonds it had sought to auction off on Nov. 23, and interest rates on 30-year German debt rose from 2.61 percent to 2.83 percent. The message? Germany is no longer a safe haven.
Since the global financial crisis of 2008, investors have focused on credit risk and rewarded Germany with low interest rates for its perceived frugality. But now markets will focus on currency risk. Inflation will accelerate and the euro may break up in a way that calls into question all euro-denominated obligations. This is the beginning of the end for the euro zone.
Germany is the only country in Europe that can act to save the eurozone and the wider European Union from “a crisis of apocalyptic proportions”, the Polish foreign minister warned on Monday in a passionate call for more drastic action to prevent the collapse of the European monetary union.
The extraordinary appeal by Radoslaw Sikorski, delivered in the shadow of the Brandenburg Gate in the German capital, came as the Organisation for Economic Co-operation and Development called on European leaders to provide “credible and large enough firepower” to halt the sell-off in the eurozone sovereign debt market, or risk a severe recession.
The OECD’s comments came as the organisation slashed its half-yearly forecasts for growth in the world’s richest countries, warning that economic activity in Europe would grind to a near-halt.
Yet their calls were met by a stubborn insistence in Berlin that only EU treaty change to forge a “stability union” in the eurozone would revive confidence in the markets.
Wolfgang Schäuble, German finance minister, rejected calls for the European Central Bank to act as a “lender of last resort” in the eurozone, and for the introduction of jointly guaranteed eurozone bonds to relieve the pressure on the most debt-strapped members of the common currency such as Greece and Italy.
De eurocrisis is in een eindfase gekomen, in beleggerstermen: het eindspel. De ontwikkelingen gaan nu razendsnel, en de tijd dat de sterke eurolanden de zwakke konden redden, is voorbij. Volgens veel economen is het een kwestie van weken, misschien van dagen, en dan moet er iets op tafel liggen om het uiteenvallen van de euro te voorkomen.
Over negen dagen houden de Europese leiders nog maar eens een ‘top der toppen’. Er was er al een op 21 juli, op 23 oktober en op 26 oktober. Maar nu leeft meer dan ooit het gevoel dat het erop of eronder is. De reeds geplande Brusselse top van vrijdag 9 december is inmiddels uitgebreid met een werkdiner op de avond ervoor. Er is immers veel te bespreken.
(…)
Columns in de Financial Times en commentaren in The Economist waarschuwen inmiddels dat de euro snel verleden tijd kan zijn. Jean Pisani-Ferry, directeur van de gerenommeerde Brusselse denktank Bruegel, stelt onderkoeld dat er ‘een nieuwe situatie in Europa’ is ontstaan. Met iets meer gevoel voor dramatiek schrijft de Vlaamse econoom Paul De Grauwe: ‘De euro heeft nog enkele weken om zichzelf te redden, terwijl verschillende instituties zich al voorbereiden op de klap.’
Wat de situatie nu zo wezenlijk anders maakt dan enkele weken geleden? Verreweg het belangrijkste signaal is dat zelfs Duitsland meer moeite heeft om zijn staatsleningen in de markt kwijt te raken. En opvallend, direct na de half mislukte emissie van vorige week verloor de euro in een tel 0,72 eurocent in waarde. Voor centrale bankiers een serieuze aanwijzing dat de munt zelf het volgende doelwit zal zijn.
(…)
Het is bijna tragisch dat de ministers van financiën vanavond alweer naar Brussel moeten afreizen om over het noodfonds te praten. Nog altijd zijn de afspraken van 21 juli (uitbreiding van noodinstrumentarium) niet in werking getreden, en nu zwoegen ze op de deal van 26 oktober (vergroting slagkracht). Het fonds heeft nog ongeveer € 250 mrd beschikbaar, maar niemand gelooft meer dat daar € 1000 mrd van te maken is, zoals een maand geleden werd beloofd.
(…)
Inmiddels is duidelijk dat het beleggers helemaal niet meer uitmaakt dat de betrouwbare technocraat Mario Monti als premier is aangetreden. Net zomin als zijn bezuinigingsplannen nog indruk maken. Het is de les van twee jaar eurocrisis: paniek en wantrouwen slaan niet met enkele ferme politieke daden om in volledig vertrouwen. Voor België dreigt hetzelfde lot. Verrassend genoeg reageerden beleggers maandag positief op het nieuws dat er na anderhalf jaar eindelijk een regering komt. Maar de aanstaande premier Elio Di Rupo kan de snel opgelopen rentelasten voor België waarschijnlijk niet zomaar ongedaan maken. Ook hij zal ervaren dat eenmaal afgehaakte beleggers niet snel tevreden zijn.
De euro is een misgeboorte en had beter niet ingevoerd kunnen worden. Dat zegt oud-AFM-topman Hans Hoogervorst in een aflevering van het geschiedenisprogramma Andere Tijden, die op 11 december wordt uitgezonden.
Hoogervorst zegt daarin: ‘De enorme problemen die we nu hebben op de kapitaalmarkten en de enorme risico’s die worden gelopen, als we dat tevoren hadden geweten, dan denk ik niet dat iemand bij zijn volle verstand eraan was begonnen.’
Volgens Hoogervorst kan de munt ‘wel als mislukt’ kan worden beschouwd.
Minister De Jager (r) measuring up the size of the ECB’s new role.
And now Merkel is alone. Even the Dutch government (along with the Finnish) now grudgingly supports a bigger role for the ECB in solving the debt crisis (if any solution other than a grand eurozone conflagration is still at hand). They call it a ’last resort’, but you don’t put messages like this out in the open if you’re not seriously considering it – or even have already committed to it. Of course, this role can vary from buying up state bonds in larger amounts to introducing the much-called for eurobonds.
Finance minister De Jager’s message is spun differently by some Dutch news outlets, by the way (but similarly by others).
My bet is on the 60 percent option: creating eurobonds covering a maximum of 60 percent GDP. Beyond that it’s lousy national bonds for profligate nations. Combine this with a stringent system of fiscal discipline (also advocated by the Dutch government for a while now) and maybe some solution is there. Although a system totally consisting of eurobonds might be better (but has its own drawbacks, such as added costs for taxpayers in some countries).
Jan Kees de Jager, the Dutch finance minister, endorsed a more active role for the European Central Bank “as a last resort” to contain the eurozone debt crisis ahead of a meeting in Berlin with his counterparts from Germany and Finland.
In a hearing of the Dutch parliament’s finance committee, Mr de Jager said that the other firewall measures seem to be failing, with European countries unwilling to contribute more funds themselves to the European Financial Stability Fund, and private investors uninterested in the plan agreed to by European leaders on October 26 of leveraging the fund up to an effective capacity of €1,000bn.
If neither of those measures succeed, leaving ECB intervention the only plausible course, then “in the end, something has to happen”, Mr de Jager said.
On Wednesday, the Finnish finance minister, Jutta Urpilainen, also moderated her stance, saying, “If all else fails, we have to reflect on the role of the ECB.”
The Netherlands and Finland have until now hewed close to Germany’s position of opposing major intervention by the ECB as part of a firewall against the spreading eurozone debt crisis but appear to be taking a more pragmatic line.
The Dutch share German scepticism that any ECB firewall would merely “fight the symptoms” of the debt crisis, and say that the top priority is creating a strict Europe-wide budget authority to force Greece, Italy, Spain and other at-risk eurozone countries to cut their deficits and implement economic reforms.
But as the urgency mounts, many voices in the Dutch economics and business community are pressing the government to take a more assertive tack.
On Sunday, a group of four top Dutch economists wrote to Mark Rutte, prime minister, urging him to press European leaders to commit to contributing more directly to the EFSF and to supporting an ECB role. The group included Lex Hoogduin, who stepped down this year as the number two official at the Dutch central bank.
“I hope the Dutch authorities, who are very close in their philosophy to Germany, can convince the Germans that there is a role for the ECB,” Mr Hoogduin told the Financial Times. He said markets had lost faith that European leaders will come up with the funds to support southern European countries, even if those countries do comply with budget-cutting and governance reforms.
One of the most worrying articles I’ve read so far on the ongoing European debt crisis. The Economistis seriously discussing the prospect of imminent bank runs in the eurozone. In fact, in one country, Latvia, this has already happened with a mid-sized bank. That’s the first time I read something about this most scary of economic malfunctions (although Paul Krugman was there first, I’m informed).
With the debt crisis spreading and deepening further to the core of the eurozone – France and Austria are defending their triple-A ratings, Belgium, the Netherlands and now Germany are having bonds issues – and politicians unable (and unwilling) to do something about it, banks are more and more exposed to great financial risks. These stem from the drying up of funds to these financial institutions, which could ultimately lead to one or more of them going down. One of the most worrying signs of this is corporate institutions withdrawing their money from banks. And that’s exactly what’s happening now in Italy, Spain, France and Belgium.
I believe articles like these are called “bearish” in the financial world. Still frightening nonetheless.
- Edit: CNBC is on it as well, referring to the same Economist article. Their message: hoping that customers don’t notice that every other source of bank funding is depleting is not a wise strategy.
ONE can almost hear the gates clanging: one after the other the sources of funding for Europe’s banks are being shut. It is a result of the highly visible run on Europe’s government bond markets, which today reached the heart of the euro zone: an auction of new German bonds failed to generate enough demand for the full amount, causing a drop in bond prices (and prompting the Bundesbank to buy 39% of the bonds offered, according to Reuters).
Now another run—more hidden, but potentially more dangerous—is taking place: on the continents’ banks. People are not yet queuing up in front of bank branches (except in Latvia’s capital Riga where savers today were trying to withdraw money from Krajbanka, a mid-sized bank, pictured). But billions of euros are flooding out of Europe’s banking system through bond and money markets.
At best, the result may be a credit crunch that leaves businesses unable to get loans and invest. At worst, some banks may fail—and trigger real bank runs in countries whose shaky public finances have left them ill equipped to prop up their financial institutions.
To make loans, banks need funding. For this, they mainly tap into three sources: long-term bonds, deposits from consumers, and short-term loans from money markets as well as other banks. Bond issues and short-term funding have been seizing up as the panic over government bonds has spread to banks (which themselves are large holders of government bonds). This blockage has been made worse by tighter capital regulations that are encouraging banks to cut lending (instead of raising capital).
Markets for bank bonds were the first to freeze. In the third quarter bonds issues by European banks only reached 15% of the amount they raised over the same period in the past two years, reckon analysts at Citi Group. It is unlikely that European banks have sold many more bonds since.
Short-term funding markets were next to dry up. Hardest hit were European banks that need dollars to finance world trade (more than one third of which is funded by European banks, according to Barclays). American money market funds, in particular, have pulled back from Europe. Loans to French banks have plunged 69% since the end of May and nearly 20% over the past month alone, according to Fitch, a ratings agency. Over the past six months, it reckons, American money market funds have pulled 42% of their money out of European banks. European money market funds, too, continue to reduce their exposure to France, Italy and Spain, according to the latest numbers from Fitch.
Interbank markets, in which banks lend to one another, are now also showing signs of severe strain. Banks based in London are paying the highest rate on three month loans since 2009 (compared with a risk-free rate). Banks are also depositing cash with the ECB for a paltry, but risk-free rate instead of making loans.
That leaves retail and commercial deposits, and even these may have begun to slip away. “We are starting to witness signs that corporates are withdrawing deposits from banks in Spain, Italy, France and Belgium,” an anlayst at Citi Group wrote in a recent report. “This is a worrying development.”
With funding ever harder to come by, banks are resorting to the financial industry’s equivalent of a pawn broker: parking assets on repo markets or at the central bank to get cash. “We have no alternative to deposits and the ECB,” says a senior executive at one European bank.
So far the liquidity of the European Central Bank (ECB) has kept the system alive. Only one large European bank, Dexia, has collapsed because of a funding shortage. Yet what happens if banks run out of collateral to borrow against? Some already seem to scrape the barrel. The boss of UniCredit, an Italian bank, has reportedly asked the ECB to accept a broader range of collateral. And an increasing number of banks are said to conduct what is known as “liquidity swaps”: banks borrow an asset that the ECB accepts as collateral from an insurer or a hedge fund in return for an ineligible asset—plus, of course, a hefty fee.
The risk of all this is two-fold. For one, banks could stop supplying credit. To some extent, this is already happening. Earlier this week Austria’s central bank instructed the country’s banks to limit cross-border lending. And some European banks are not just selling foreign assets to meet capital requirements, but have withdrawn entirely from some markets, such as trade finance and aircraft leasing.
Secondly and more dangerously, as banks are pushed ever closer to their funding limits, one or more may fail—sparking a wider panic. Most bankers think that the ECB would not allow a large bank to fail. But the collapse of Dexia in October after it ran out of cash suggests that the ECB may not provide unlimited liquidity. The falling domino could also be a “shadow” bank that cannot borrow from the ECB.
The European Commission chief said Monday he wants to introduce eurobonds issued jointly by the 17 euro nations as an effective way to tackle the financial crisis, an idea that puts him on a collision course with German Chancellor Angela Merkel.
Jose Manuel Barroso said a eurobonds plan makes sense if linked to fiscal rigor among the member states sufficiently stringent to make it impossible for profligate nations to live on the back of budget-conscious countries.
- Original post: As blogged about for a while nowhere, everyone except for liberal and conservative policy-makers in northern Europe by now knows what the solution for the eurozone debt crisis is. That is for the ECB to start acting as lender of last resort – like every other central bank in the world, f.e. in the US, Japan, the UK, China, etc. – and start issuing euro bonds or buying sovereign debt in larger amounts.
But the German ruling coalition of conservatives and liberals, supported in this by their peers in the Netherlands, will not do it. Because in their heads, the only solution that can be is austerity and budget cuts.
It hasn’t worked so far, and it doesn’t work now. The debt crisis has spread to the eurozone core, with Austria now defending its triple-A status. We’re currently waiting for the biggest economy yet to get into trouble (France). Meanwhile, the solution is at hand, with American and European economists, policy analysts, journalists and bloggers all calling for it. Let the ECB take up its proper role as central bank.
Does it suck? Of course it sucks. Some inflation may occur. You’re creating moral hazard for profligate economies (the Club Med ones) to go on spending sprees, paid for by their northern neighbours. But it beats breaking up the eurozone and let huge economies go default, doesn’t it?! Moreover, this crisis is not entirely the fault of the south. The entire EMU has failed to create a political and economic system coherent enough to facilitate a single currency. Southern bonds were judged way too safe by central banks and regulators throughout the Union (including the ECB). So, Germany and the rest of the north are as much to fault as the south. And now, they have to face their responsibilities and move towards closer integration.
But no. Austerity and budget cuts that nobody believes in. Watching the eurozone right now is like watching the end-of-the-world scene in Lars on Trier’s Melancholia: you know it’s inevitable, you know it’s going to happen, and it will be massive. Oh well. Better than inflation I guess.
If you haven’t read the partial transcript of Citi economist Willem Buiter on Bloomberg TV today, you ought to.
The key part, which he said with some anger rising in his voice, was this:
“Because after the error of the Bundesbank, they consider central banks purchasing sovereign debt outright to be like swearing in church. It’s just not done. This has been in fact to a certain extent embedded in the treaty which forbids the ECB from lending directly to governments or buying stuff in the primary market. But there is no restriction at all on them buying any amount of sovereign debt at any time in the secondary market, so they can do it.”
“This crisis is the result of the failure to provide the minimal institutional underpinning for a monetary union in the euro area and also a result of the ECB unfortunately being the heir of the Bundesbank and therefore not understanding and rejecting the role of central bank as lenders’ last resort to sovereigns. They certainly are a central bank. They just are a central bank that prefers to fight with both hands behind their back. If they just let go of one hand, that would be enough.”
It’s not just that the ECB could immediately push Italian yields down to 4% if it wanted to… it’s that this role that the ECB is being asked to play is not even extraordinary by modern economic standards. Every other major economy in the world: Japan, the UK, the US, China, etc. has a central bank that funds the government. Only Europe doesn’t have that, and that’s why, with debt-to-GDP ratios high around the world (Japan has a 200% debt-to-GDP remember), it’s just Europe that’s in crisis.
But there is this problem with the ECB being the descendant of the Bundesbank, and, well, the Germans are really not into anything that looks like debt monetization.
That’s why the Germans will look for any explanation of the current crisis other than the obvious one. As Bundesbank chief Jens Wiedmann said this weekend, Italy has a political problem, and Greece has a debt problem. That both Italy and Greece (and Portugal and Cyprus and Ireland) could have problems relating to something more fundamental to their monetary structure either completely eludes Wiedmann, or he’s just not allowed to admit it due to German ideology.
(…)
Now granted, there is a defense of the ECB, which Edward Harrison makes brilliantly in a post today. Unlike, say, when the Fed or the Bank of England do QE, ECB bond buying is a fiscal operation that would be creating winners and losers and also fostering moral hazard. After all, why not spend like crazy to get ahead of your peers, if the ECB is holding your debt at a certain level. That does make the question tricky.
But the bottom line remains: There’s no chance of anything that’s been planned so far working out, since the only solution (more fiscal austerity) only makes the underlying debt dynamic worse.
So the question is: Will the ECB wait too long and blow it?
The problem for the market is whether to take these comments at face value or to see them as part of a general tactic of trying to force other leaders into line or believing that the comments will be reversed if the alternative to an aggressive ECB is the collapse of the Euro. If you don’t think Merkel’s tone will change then our investment advice is to dig a hole in the ground and hide. It’s difficult to see any other scenario than widescale Sovereign defaults without an aggressive ECB. Indeed it doesn’t seem we’re alone on this anymore. An Irish Times story overnight said that Sarkozy told his deputies yesterday that the euro would not survive unless the ECB decisively entered the fray.
[When] the UK government, for example, is perceived to have borrowed too much, the Bank of England can buy some of its debt and turn it into money. This is, in fact, the Bank of England is doing, to the tune of £275bn, through quantitative easing (though it hasn’t gone the whole hog – which it could do if the UK were ever in a seriously deflationary recession – of cancelling the debt).Of course, this so-called monetisation can debase the currency and spark inflation.
(…)
But here’s the thing. Although devaluation of the currency and inflation would generate losses for creditors, those losses are typically a fraction of losses that would arise from a default by government or – as Greece is trying to do – from a request to creditors to voluntarily forgo an element of what they’re owed.
Also, inflation and devaluation are worst for overseas creditors. If you are resident in the UK, and you have substantial liabilities and outgoings in sterling, a bit of inflation will help you service what you owe at the same time as eroding the real value of your assets (or in this case, the real value of your loans to Her Majesty’s Government).
[Surely], you may say, the eurozone has a central bank: the European Central Bank. What is to stop it buying up Italian government debt or Spanish government debt in substantially bigger amounts than it is currently doing?
To be clear, right now the ECB is purchasing modest amounts of Italian and Spanish government debt, for example, in an attempt to keep the respective interest rates they’re charged at a bit less than the penal and prohibitive 7%.
But the ECB is prevented both by its own constitution and by the passionately held views of the Bundesbank – the German central bank and the ECB’s most influential shareholder – from purchasing substantially more than that.
Although many economists believe the Germans are wrong-headed in refusing to countenance substantial purchases of government debt by the ECB, there is some logic to the prohibition.
Brad Plumer did an excellent post earlier this week calling bullshit on ECB claims that it would be illegal for them to step up to the plate and provide relief in the European debt crisis. In a speech delivered early this morning in Frankfurt, ECB Chief Mario Draghi took another stab at explaining himself. His view is that if the ECB stepped in to offer relief, that might undermine its credibility as an inflation-fighter over the long term. “Losing credibility can happen quickly,” he warned, “and history shows that regaining it has huge economic and social costs.”
I’m running out of analogies to explain how frustrating I find this logic. So let’s just be frank. What is it that Draghi thinks is happening now? Is Ireland enjoying a walk in the park? Have the past 12 months been party time for Greece and Spain and Portugal? Another year of this kind of suffering is baked into the cake for those four countries. If Italy tips into a Spain-esque depression, wouldn’t that have huge economic and social costs? Aren’t there costs to prolonging the Spanish depression? Or think about plucky little Ireland and Estonia, winning praise from bureaucrats everywhere for their imposition of internal devaluation, aren’t they going to smacked with a sledgehammer if things go to shit? And what about France?
Now I don’t want to be alarmist, but let’s talk a bit about credibility. Suppose there’s a prolonged, continent-wide depression. Suppose the European Union and its institutions lose all credibility as a force for human welfare. Suppose the mainstream political parties in every European country lose all credibility as vehicles for popular aspiration. How does that story end? Don’t we already know? Didn’t we build these institutions for a reason? I think they were built for a reason. A reason that had something to do with huge economic and social costs. But it wasn’t fear of the Harmonized Index of Consumer Prices increasing at a four percent annual rate.
Spanish bond rates are soaring, and now even The Netherlands (!) are not considered a safe haven anymore. The debt crisis thus is spreading to the eurozone core, which includes France and Austria as well. So as predicted here last week (and downplayed by commenters), the solutions of Merkel, Germany and other northern countries – merely insisting on “reforms”, “budget cuts” and “austerity” in southern Europe as the one way to get out of this crisis – are not working. The financial markets, for one, are not buying it.
The question is: will political leaders continue on this road to nowhere, and ultimately be responsible for the break-up of the eurozone? Or will true reform finally be made, and the ECB be allowed to act as lender of last resort? We’ll find out soon enough.
The turmoil in the eurozone has taken a troubling turn in recent days, with anxiety spreading from Europe’s periphery to its “core” countries. Even as Italy’s Mario Monti readies his economic agenda to be presented today, investors are looking at France, the Netherlands and Austria with increasing unease and wondering whether the ECB might yet ride to the rescue. Over in Greece, today is the anniversary of 1973′s mass student protests – with demonstrators once more planning to take to the streets. And the bond markets are showing ever more strain, with today’s Spanish bond auction souring sentiment still further.
It is make your mind up time for Angela Merkel. Not next year. Not even next month. But this week. The financial markets were ugly on Tuesday, flashing a loud and consistent message: the crisis in the eurozone is no longer confined to the weak Club Med countries but is spreading to the core.
Germany has to decide whether to drop its visceral opposition to the European Central Bank acting like a true lender of last resort, or face being blamed for the break-up of the single currency.
This is a tough call for Merkel, but what happened in the markets on Tuesday was significant. The loss of confidence in Greece, Italy, Spain and Portugal was old news. The new development was that investors were also increasingly wary of lending to those countries that would, along with Germany, form the nucleus of a hard-core euro in the event of a break-up.
Interest rates on Belgian, Austrian and French debt rose sharply. There was even pressure on Dutch bonds, traditionally seen as the second safest in the eurozone after German bunds. Bond dealers reported a full-scale run on French bonds.
By contrast, Switzerland – the safe haven of choice for nervous investors at present – sold six-month bonds at an interest rate of -0.3%. Investors, in other words, were paying the Swiss government for the privilege of being allowed to lend money to a country seen as rock solid. This is simply a posh way of hiding money under the mattress.
The financial markets understand just how critical the situation is, even if the pfennig has yet to drop in Berlin.
Symmetrical reflation is the best option for restoring growth and competitiveness on the eurozone’s periphery while undertaking necessary austerity measures and structural reforms. This implies significant easing of monetary policy by the European Central Bank; provision of unlimited lender-of-last-resort support to illiquid but potentially solvent economies; a sharp depreciation of the euro, which would turn current-account deficits into surpluses; and fiscal stimulus in the core if the periphery is forced into austerity.
(…)
Unfortunately, Germany and the ECB oppose this option, owing to the prospect of a temporary dose of modestly higher inflation in the core relative to the periphery.
The bitter medicine that Germany and the ECB want to impose on the periphery – the second option – is recessionary deflation: Fiscal austerity, structural reforms to boost productivity growth and reduce unit labour costs and real depreciation via price adjustment, as opposed to nominal exchange-rate adjustment.
The Guardianschrijft dat er al maanden gesprekken gaande zijn om de eurozone toch maar op te breken. Nu de rente op Italiaanse obligaties torenhoog is, en er zeker geen kans is op een bail out van Italië door het Europees noodfonds, komt een ’herstructurering’ van Italiaanse schulden (d.w.z. een half bankroet) in zicht. Dat treft de Franse financiële mega-conglomeraten hard, betekent een monsterrecessie, en waarschijnlijk het einde van de euro.
Wtf! Opbreken van de eurozone? Say what? Het lijkt erop dat de negatiefste voorspellingen van commentatoren stuk voor stuk uitkomen. De totale ellende is inmiddels niet meer te overzien.
Het lijkt er ook steeds meer op dat er een realisering ontstaat dat het door Merkel, de ECB en het IMF voorgeschreven programma van “bezuinigen” als panacée voor alle problemen niet de weg is. Je kunt bezuinigen wat je wil, maar speculanten op de financiële markten geloven er toch niet in. Sterker nog, ze hebben er belang bij als de boel onderuit gaat. Bovendien wordt landen onder curatele stellen en de hele verzorgingsstaat wegbezuinigen op een gegeven moment ook ondemocratisch; wat dat betreft is het jammer dat dat Griekse referendum er niet gekomen is, dan konden ze tenminste kiezen.
Wilders heeft gelijk gehad: Griekenland had bij het begin van de crisis al uit de eurozone gekickt moeten worden, i.c.m. schuldherstructurering en een terugkeer van dit land naar een eigen monetair systeem. Zoals een LSD-reaguurder schrijft:
Misschien een interessant alternatief voor het hameren van Merkel en de ECB op een uitgebalanceerd huishoudboekje voor Griekenland, met als gevolg elkaar versterkende opeenvolgende bezuinigingen en hemeltergende werkloosheidscijfers enkel om de schuldeisers te plezieren: laat Griekenland de weg van Argentiniė volgen! Dus een gecontroleerd bankroet en herstructurering van schulden (plus een vertrek uit de euro), zodat het land weer kan investeren en ja, ook werk maken van hervormingen en een minder gestoord belastingsysteem opzetten. Hebben ze ook geen vaste wisselkoers meer. Voorheen alleen de positie van de PVV en SP, nu hoor je het vaker.
Een klein landje kan zich terugtrekken uit de financiële markten, zich minder afhankelijk maken van speculanten en geld bijdrukken, zodat er weer geïnvesteerd kan worden i.p.v. alle economische groei op recept van het IMF en Noord-Europese liberalen kapotbezuinigen. Wellicht dat de crisis dan niet was verspreid naar Italië. Maar nu is het te laat voor deze optie (al kan het nog steeds als de hele euro uit elkaar klapt).
Het enige alternatief nu? De ECB staatsobligaties laten opkopen, en instellen als lender of last resort. Dat wil zeggen dat de ECB gaat functioneren zoals de centrale bank doet in normale economieën. De eurozone is een mislukt project gebleken, omdat landen met uiteenlopende economieën én aparte obligaties niet kunnen functioneren onder een regime dat één munt hanteert. Amerikaanse economen roepen het al maanden, en misschien wordt het tijd dat dit ook eens doordringt in Europa. De EMU in haar huidige vorm kan niet bestaan.
Dat betekent dus “meer Europa”. Want als je dat doet, moet je je economische systeem ook verder integreren. Duitsland wil geen ECB als lender of last resort, omdat ze bang zijn voor inflatie. Maar het is dit, of het opbreken van de eurozone. De heilloze weg van het voorschrijven van bezuinigingen, leidend tot nieuwe vertrouwenscrises en weer nieuwe landen die de prooi worden van speculanten (Frankrijk?) moet in ieder geval verlaten worden.
Morgen is het zo ver: de Nederlandse vertakking van de Occupy-beweging slaat haar vleugels uit te Amsterdam. De Occupy Wall Street-beweging in de V.S. is al wekenlang bezig, in groeiende getale en onder toenemende media-aandacht, een progressieve protestbeweging van formaat te worden. Een linkse variant op de Tea Party.
De concrete doelen zijn wellicht nog onduidelijk, maar het van de Arabische Lente overgenomen permanent kamperen op de heilige grond van het financieel kapitalisme blijkt een succesvolle innovatie in protestmethodes te zijn. Evenals in Caïro, en daarna in Madrid en Barcelona, wordt geëxperimenteerd met directe vormen van democratie en participatie, als alternatief naast de vertegenwoordige democratie. Men maakt bovendien – eindelijk - een vuist tegen die sector die de Westerse maatschappij nu al jaren in haar greep houdt: de financiële industrie. De door haar veroorzaakte financiële crisis wordt betaald door de belastingbetaler, die er het oprollen van de verzorgingsstaat voor terug krijgt. Ondertussen worden de bonussen nog steeds uitgedeeld. Gek genoeg zijn het alleen de meest linkse partijen in het parlement die hiertegen ageren.
Er bestaat regionale variatie – in de V.S. staan drommen politici op de loonlijst van Wall Street, in Griekenland is de staat mede debet aan de ellende – maar overal in het Westen kan de financiële sector uiteindelijk verantwoordelijk worden gehouden voor de huidige economische ellende. In de meeste landen buiten Nederland is de (jeugd)werkloosheid afschuwelijk opgelopen; er groeit nu een ‘verloren generatie’ op zonder uitzicht op een baan. Speculanten houden de eurozone bovendien nog steeds in hun greep. Maar ook in Nederland zijn onder dit kabinet, met haar domme mantra van ‘achttien miljard‘, de gevolgen groots: eliminering van zorg voor (jong)gehandicapten, sociale werkplaatsen, speciaal onderwijs, korten op hoger onderwijs, het verdwijnen van openbaar vervoer, bezuinigingen op kunst en cultuur, en ga zo maar door. Terwijl er tegelijkertijd wél een extreem kostbare subsidie voor rijken in stand wordt gehouden: de hypotheekrenteaftrek.
Ik hoop dan ook dat de Nederlandse Occupy-beweging dáárover zal gaan: de Nederlandse issues, die niettemin niet los van de internationale financiële crisis kunnen worden gezien. Het kabinet-Rutte staat evident niet aan de kant van gedupeerden in de crisis. Er is Nederland meer, meer dan genoeg om massaal tegen te protesteren, waarbij het overkoepelende punt zou kunnen zijn: de onrechtvaardige maatschappelijke verdeling van de kosten van de crisis. Dat geldt in alle landen, en dat is waarin in Nederland die waardeloze, onnadenkende bezuinigingen vandaan komen, terwijl de financiële sector op oude voet verder gaat en regelingen voor het niet-hulpbehoevende deel der natie in stand blijven.
Occupy Amsterdam heeft potentie. Tradionele media als Nieuwsuur, 1Vandaag, DWDD, BNR en AT5 hebben er al aandacht aan besteed. De Twitter loopt, en de Facebook-pagina telt bijna 3500 aanmeldingen. Het is te hopen dat men een algemeen aansprekende, op Nederland toepasbare boodschap weet te formuleren; en het is te hopen dat de boel niet, zoals in Nederland vaker gebeurd, door krakers of andere links-radicale figuren wordt overgenomen. Kritiek op de uitwassen van een doorgeschoten kapitalisme en haar vervlechting met politieke systemen isniet per se links of radicaal; het is pure common sense die iedereen aan kan spreken, wat hij of zij ook stemt.
Volgens mij bestaat er onder veel mensen die zich niet vertegenwoordigd voelen door dit kabinet – en met name onder jongeren – al tijden een grote behoefte om de straat op te gaan. Misschien wordt dit ‘m dan…
Check out Nobel Prize winner Paul Krugman in the NYT on the response of both Wall Street financiers and Republican politicians to the Occupy Wall Street protests, aptly titled ‘Panic of the Plutocrats’:
It remains to be seen whether the Occupy Wall Street protests will change America’s direction. Yet the protests have already elicited a remarkably hysterical reaction from Wall Street, the super-rich in general, and politicians and pundits who reliably serve the interests of the wealthiest hundredth of a percent.
And this reaction tells you something important — namely, that the extremists threatening American values are what F.D.R. called “economic royalists,” not the people camping in Zuccotti Park.
Consider first how Republican politicians have portrayed the modest-sized if growing demonstrations, which have involved some confrontations with the police — confrontations that seem to have involved a lot of police overreaction — but nothing one could call a riot. And there has in fact been nothing so far to match the behavior of Tea Party crowds in the summer of 2009.
Nonetheless, Eric Cantor, the House majority leader, has denounced “mobs” and “the pitting of Americans against Americans.” The G.O.P. presidential candidates have weighed in, with Mitt Romney accusing the protesters of waging “class warfare,” while Herman Cain calls them “anti-American.” My favorite, however, is Senator Rand Paul, who for some reason worries that the protesters will start seizing iPads, because they believe rich people don’t deserve to have them.
Michael Bloomberg, New York’s mayor and a financial-industry titan in his own right, was a bit more moderate, but still accused the protesters of trying to “take the jobs away from people working in this city,” a statement that bears no resemblance to the movement’s actual goals.
And if you were listening to talking heads on CNBC, you learned that the protesters “let their freak flags fly,” and are “aligned with Lenin.”
The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.
Last year, you may recall, a number of financial-industry barons went wild over very mild criticism from President Obama. They denounced Mr. Obama as being almost a socialist for endorsing the so-called Volcker rule, which would simply prohibit banks backed by federal guarantees from engaging in risky speculation. And as for their reaction to proposals to close a loophole that lets some of them pay remarkably low taxes — well, Stephen Schwarzman, chairman of the Blackstone Group, compared it to Hitler’s invasion of Poland.
(…)
What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re not John Galt; they’re not even Steve Jobs. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.
Yet they have paid no price. Their institutions were bailed out by taxpayers, with few strings attached. They continue to benefit from explicit and implicit federal guarantees — basically, they’re still in a game of heads they win, tails taxpayers lose. And they benefit from tax loopholes that in many cases have people with multimillion-dollar incomes paying lower rates than middle-class families.
This special treatment can’t bear close scrutiny — and therefore, as they see it, there must be no close scrutiny. Anyone who points out the obvious, no matter how calmly and moderately, must be demonized and driven from the stage. In fact, the more reasonable and moderate a critic sounds, the more urgently he or she must be demonized, hence the frantic sliming of Elizabeth Warren.
So who’s really being un-American here? Not the protesters, who are simply trying to get their voices heard. No, the real extremists here are America’s oligarchs, who want to suppress any criticism of the sources of their wealth.
What I think the best thing of Occupy Wall Street is is that it finally puts the financial malpractices of an industry very much related to the actual top 1 percent of super-rich people in the US, in combination with their rescue by 99 percent of tax payers (i.e., the public), on the democratic agenda.
But the fundamental injustice in pretty much the entire Western world nowadays is the fact that the welfare state, a scheme for the public good, is being dismantled as a result of costs made to save the financial industry. An industry that through its own corrupt schemes, not beneficial to anyone but themselves, has itself created the greatest economic recession since the nineteen-thirties. They should not be awarded bonuses. And poor, sick and unemployed people should not have to suffer for them. There is nothing ‘left-wing’ about that. It’s common sense. That’s why I would love to see these protests spread to Europe, even though I myself am in favour of a regulated form of capitalism.
Finally – not from Paul Krugman – to point out empirically how disparagingly vast the gap between the top 1 percent and the lower 90 percent in the US is, check out these stats from Mother Jones. The first shows the composition of the top 1 percent; the second shows their wealth.
I mean, seriously. There’s nothing wrong with a bit of wealth inequality. But you don’t need to be a socialist to understand that such a huge gap between rich, middle class (if not already vaporized) and poor is not beneficial to any society, let alone a democratic one. And this gap has widened exponentially in the last thirty years, it wasn’t there before. The most fucked up societies are the ones with sudden, huge material inequalities. With the exception of the UK, Europe’s not as bad as the US in this respect – but getting close.
Check out this raving stock trader on BBC News the other night! As the interviewer says, ‘jaws have collectively dropped’. Either this guy is totally honest and reveals what stock market traders and speculators really do on the financial market; or he’s on cocaine; or it’s a hoax.
Some of the things independent trader Alessio Rastani says include the statement that ‘governments don’t rule the world, Goldman Sachs rules the world’. He’s saying that stock market traders don’t really care about the euro anymore, that the financial crisis is spreading like a ‘cancer’, and that he goes to bed to dream about a new recession. Also he says that people should ‘prepare’ and that the savings of millions of people are gonna vanish into thin air.
So this clip is making rounds on the blogs and headlines at the Washington Post, The Guardian, Reuters, CNBC and Forbes. Now some people suspect this is a hoax, instigated by political satirists the Yes Men, who have previously hoaxed the BBC. The Yes Men, though, have denied all involvement, and Alessio Rastani seems to be a real-life independent stock trader. Over at the Dangerous Minds blog, they have some more proof that this is for real.
Andrew Sullivan contrasts two takes on the future of the euro, the European Monetary Union, and the world financial system: one optimistic, and one very pessimistic. I’d suggest to read them both: each provides a good account of what’s currently at stake. But I don’t know which of them is more realistic. In a few weeks or months we’ll know, I guess.
- Edit: From hilmerv come two more interesting articles. One is of Paul Krugman in the NYT, making (once again) the Keynesian argument that austerity measures and budgets in Europe are worsening the crisis rather than ameliorating it. The other is from the Center for Economic and Policy Research, arguing that China will have to come to the rescue because of the refusal of policy-makers to invest rather than make budget cuts.
- Original post: First the pessimistic one, from The Economist:
TWO significant messages emerged from the weekend’s IMF meetings that are both striking in their own right and which, when set against each other, are deeply disconcerting. On the one hand, journalists seem to be unable to describe the meetings without noting the high level of fear and anxiety among the participants. (The Financial Times‘ Wolfgang Münchau closes his column today by saying, “I have never seen Europe’s policymakers as scared as I saw them in Washington last week.“) Along those lines, leaders came away from the meetings promising bold action by early November, including agreements on steps to recapitalise banks and increase the capacity of the European Financial Stability Facility. The message seems to be that officials have been scared into a recognition of the severity of the world’s problems and are now prepared to act.
Yet the day’s headlines carry another message: the euro zone is riven by conflict and unable to agree on the most basic of rescue measures. Euro-zone governments are still struggling to put in place an agreement reached in July. Some officials insist that Greece’s creditors must take much larger haircuts than those assumed in that deal, while Greek leaders continue to argue that they will not default. Observers are biting their nails over looming parliamentary votes on the plan to increase the EFSF, even as it becomes clear that a rise to €440 billion isn’t sufficient. On the one hand, it’s as clear as ever that the euro zone needs a massive, ambitious policy to avoid a catastrophic financial scenario. And on the other, it seems ever less likely that the euro zone’s leaders can agree on such a policy and muster the domestic political support to ratify and implement it. If Europe simply can’t do what it needs to do, that leaves the euro zone, and the world, facing a very dark economic reality.
This reality could scarcely come at a worse time. Europe is sliding toward recession. America is uncomfortably close to following behind. Even in the absence of a major financial shock, a renewed downturn across major economies would be very painful, given the lack of recovery in many labour markets and the stress contraction places on budgets. Were a double-dip to strike, far fewer economies would have the political will to intervene to support the economy, even among those with the fiscal room to help.
It’s just shocking to think about the dangers that loom and consider the extent to which they’re driven by governmental failures. Despite having been in a state of constant crisis for more than a year, the euro zone is far away from a real solution; the politics may be such that no solution is possible without a dramatic, Lehman-like collapse, at which point it may be too late to save the euro zone. Meanwhile, the European Central Bank blundered into policy tightening, seriously worsening the crisis out of a fear of mild and temporary inflation. Leaders elsewhere have hardly done better. America’s fiscal policymaking has steadily deteriorated, and the Congress needlessly sent confidence tumbling over the summer with a battle over the government’s debt ceiling. At the same time, Ben Bernanke seems to have forgotten everything he once knew about the crises in the 1930s and in Japan in the 1990s. America is sinking back toward recession while the global economy nears a cliff, and the Fed—by its own acknowledgment—has plenty of heavy ammunition sitting untouched on the shelf.
It is a damning performance. If the world economy does indeed face a new crisis and a new contraction in the weeks ahead, rich-world citizens will have every reason to question the institutions of global capitalism. If the liberal order begins to falter, even darker times still may lie ahead.
Gloomy indeed. Here’s the optimistic one, from the Daily Beast:
So the question is, will Europe implode? Contrary to the widespread assumption, I think not.
It isn’t just that Angela Merkel, Germany’s answer to Margaret Thatcher, has drawn what for her is an unequivocal line that Greece will not leave the European Union or the euro zone. It’s that slowly, sloppily, the governments of Europe are awakening to the realization that since they have tethered their collective economic fate to each other, the costs of unraveling are so immense as to be untenable. No government feels comfortable demanding more funds to bail out Greece or shore up banks or create a backstop for the tenuous finances of Italy. But each government understands at some animalistic level that no electorate will celebrate the consequences of doing too little. Even those supposedly dour, disapproving burghers of Düsseldorf who are tired of bailing out what they see as profligate Greeks would blanch at the market consequences of the end of the euro. Germany doesn’t just pay to maintain that union; it benefits mightily as well.
There is no way to prove that the officials of the EU will access their better angels at the last moment (however auspiciously named the German chancellor is). But this crisis is shaping up as the European version of the American debt-ceiling debate: messy, disheartening, but when pushed to stare at the alternatives, deeply clarifying.
Hence the lurch in the past days toward a more explicit, aggressive response, ranging from a more robust stabilization fund, to plans and statements from German Finance Minister Wolfgang Schaeuble to new IMF head Christine Lagarde that suggest at the least a recognition that this won’t magically resolve itself. Yes, the German minister has to speak cautiously, ahead of an important vote on bailout money on Thursday, and yes, Lagarde has been a study in rhetorical excess, but still, no one is in denial and most now recognize what is at stake.
(…)
To expect the resolution to be easy is foolish, but to assume that dissolution is the inevitable outcome after generations have fought and striven—that, too, is foolish. The formation of the union was never widely or easily digested, but neither was the carving together of the United States in the early to mid-19th century.
The risk remains that globally, because of Europe, we are on a precipice and will fall. That needs to be factored into any near-term decision about money, business, and economic outlook. But the costs of dissolution are prohibitive, for Europe and for the world. China, Brazil, India, the new creditor nations of the world, have begun the unthinkable conversation about bailing out Europe if Europe will not bail out itself: an unlikely event but indicative of how serious this is. In the end, it is those costs for Germany, for France, and for the entire euro zone that should act as a bulwark against the worst-case scenario.
In verschillende media wordt de dader van de slachtpartij in Noorwegen, Anders Breivik, nog altijd ‘extreem’-rechts en christelijk-’fundamentalistisch’ genoemd. Dit gebeurt gelukkig steeds minder, naarmate het duidelijker wordt dat Breivik in principe een vrij doorsnee versie van de nieuw-rechtse ideologie van het afgelopen decennium aanhangt. Wat hij in het eerste deel van zijn manifest schrijft, is tegenwoordig tamelijk mainstream.
Gisteren heb ik een tijdje het 1500 pagina’s tellende boekwerk 2083 (pdf) zitten lezen. Eén van de dingen die gelijk opvalt is dat Breivik zich expliciet distantieert van wat normaliter bekend staat als extreem-rechts: het (neo-) nazisme en het fascisme. Hier wil hij helemaal niets mee te maken hebben. Breivik noemt zichzelf daarentegen voortdurend een ‘cultureel-conservatief’, soms een ‘conservatief-nationalist’, en doet moeite zich te onderscheiden van andere rechtse stromingen.
En het klopt: wie het manifest van Breivik leest, komt teksten tegen die niet verschillen van die al tien jaar gedebiteerd worden op GeenStijl, op de Dagelijkse Standaard, in Elsevier, in de Telegraaf, door de LPF, de PVV, en in toenemende mate ook binnen VVD en CDA. Breivik had lid van de Edmund Burke Stichting kunnen zijn, of de SGP-jongeren. Zo ziet hij er trouwens ook uit, met z’n blonde coup en Lacoste-truien. Breivik past naadloos binnen de opkomst van het ‘nieuwe conservatisme’ van de eenentwintigste eeuw.
Dit conservatisme is sterk ideologisch getint, en zoals iedere ideologie heeft het een eigen geschiedbeeld. Dat gaat als volgt: door heel Europa hebben linkse elites ter veiligstelling van gesubsidieerde baantjes massa-immigratie en islamisering in de hand gewerkt. De islam, bovendien, is uniform radicaal en gewelddadig. De linkse elites zijn dus eigenlijk landverraders.
Dit geschiedbeeld wordt in Nederland al een decennium lang consequent en stelselmatig verkondigd in rechtse media en blogs zoals GeenStijl, DDS, Elsevier en andere bovengenoemde. Ooit was het randdenken, een retorisch wapen van Pim Fortuyn tegen de Paarse regenten. Maar inmiddels is het een in steen gebijtelde ideologie worden, die fungeert als geloofsbrief voor wie serieus genomen wil worden ter rechterzijde. Lees maar eens een column van Martin Bosma, of sla eens een Telegraaf open. Echo’s ervan zijn zelfs terug te vinden in de speech van Maxime Verhagen. “Links” is verantwoordelijk voor alles wat fout is in dit land, en dat al sinds de jaren zestig; de multiculturele samenleving, massa-immigratie en islamisering zijn daar de belangrijkste consequenties van.
Dat het pure fictie is – er bestaat geen monolithische linkse elite die alle macht in handen heeft; CDA- en VVD-regeringen hebben evenzeer bijgedragen aan de massa-immigratie; met die demografische islamisering valt het reuze mee – doet er niet toe. Een ideologie is een gesloten systeem dat geen behoefte heeft aan nuanceringen.
Dus lezen we in 2083 zeer uitgebreid hoe de ‘linkse ideologie’ (in Breiviks woorden consequent ‘cultureel Marxisme’ genoemd) vanaf de jaren zestig de universiteiten, de wetenschap, de ambtenarij, de journalistiek en de politiek heeft overgenomen, vanaf de Frankfurter Schule tot de opkomst van gender studies, van de overname van publieke omroepen tot het invoeren van een vak als naaien op school. Er zijn volgens Breivik over heel Europa politieke partijen die niets liever willen dan de multiculturele samenleving invoeren. Dit zijn allemaal zaken die even goed door Bart-Jan Spruyt, Afshin Ellian, Joshua Livestro of Martin Bosma geschreven hadden kunnen zijn. Dit geschiedbeeld, ooit radicaal, is tegenwoordig gemeengoed op nieuw-rechts, en in toenemende mate ook op rechts.
Waar Breivik in verschilt met al deze mensen, uiteraard, is de gewelddadige consequenties die hij aan zijn ideologie verbindt. Waar het eerste deel van zijn boekwerk leest als een tamelijk complex en goed geïnformeerd verhaal (wel veel copy-paste), excelleert het tweede deel in wreedheid en gruwelijkheid. Hij beschrijft zonder veel omwegen hoe je het beste kunstmestbommen maakt, een Kevlar-harnas en wapens koopt; hoe politici, journalisten en wetenschappers vallen in Categorie A,- B,- en C-landverraders die je het beste en masse kunt vermoorden; welke muziek je daarbij het beste via je oordopjes kunt luisteren (vocal trance en epische Scandinavische muziek); hoeveel linkse verraders en moslims er per West-Europees land vermoord moeten worden, en dat je ook in staat moet zijn vrouwen, ‘zelfs aantrekkelijke’, te vermoorden. Dit alles in het kader van de heroprichting van de Tempeliers, als paramilitaire orde die West-Europa moet heroveren op de linkse multiculturele elites die het land ten koste van de eigen bevolking wil islamiseren.
“Anders kun je beter weer een nieuwe rechtse blog beginnen”, zo schrijft Breivik.
Het is duidelijk dat Wilders, noch de PVV, noch (nieuw-) rechtse opiniemakers of bloggers op enige wijze schuldig zijn aan de daden van deze figuur. Ze zijn ook niet verantwoordelijk. Maar door hun voortdurende, stelselmatige hameren op een gesloten ideologie, op een wereldbeeld dat aan elkaar hangt van ‘linkse elites’ en ‘multikul’, van ’EUSSR’ en ‘policor’ tot ‘dhimmitude’, zou je hen en hun eveneens door Breivik geciteerde internationale geestverwanten – van de Amerikaanse anti-islamblogster Pamela Geller tot de Lega Nord-parlementariër die Breiviks ideeën ”volkomen gezond” noemt - wel ‘indirect medeverantwoordelijk’ kunnen noemen. Want als iemand werkelijk gaat denken dat er een linkse elite bestaat die niets liever doet dan massa’s achterlijke moslims hierheen halen voor de eigen gesubsidieerde baantjes, ten koste van de eigen bevolking, dan is de stap naar gewapend verzet niet zo groot meer. Breivik beschrijft het zelf: pogingen het linkse en islamitisch gevaar democratisch tegemoet te treden hebben gefaald, en het is nu tijd om het met geweld te bestrijden, ter verdediging van het christelijke Europa.
Het maken en verspreiden van een ideologisch wereldbeeld als het nieuw-conservatisme is geen vrijblijvende bezigheid. Dat heeft een impact op de wereld, zeker wanneer daar in zulke duidelijk te identificeren zondebokken (de multiculturele elites en de moslims) worden aangewezen. Dat zouden rechtse opiniemakers, bloggers en politici zich moeten realiseren. Wanneer Wilders iets schrijft als dit:
Door heel Europa, niet alleen in Nederland, maar in heel Europa vechten de multiculturalistische elites een totale oorlog uit tegen hun bevolkingen. Met als inzet de voortzetting van de massa-immigratie en de islamisering, uiteindelijk resulterend in een islamitisch Europa – een Europa zonder vrijheid: Eurabië.
… en het daarbij heeft over de ‘Partij van de Allochtonen’ die ‘islamitisch stemvee’ naar Nederland haalt, en wanneer dat consequent herhaald wordt in online en papieren media, dan is het eigenlijk een wonder dat er door een gek nog geen aanslag is gepleegd op een partijcongres van de PvdA. Logisch toch, met zo’n apocalyptisch gevaar?
‘Guilt by association’? Nee, dit is niet de schuld van Wilders. Maar sommige opiniemakers, bloggers en politici zouden wel eens mogen kappen met het verspreiden van het kinderlijke wereldbeeld dat een almachtige linkse elite al een halve eeuw eigenhandig verantwoordelijk is voor het hierheen halen van volksstammen allemaal criminele én radicale moslims. Het is gewoon niet waar, and you know it. Hou ermee op.
Het debat over de multiculturele samenleving hoeft niet op slot. Je kunt discussiëren over de negatieve gevolgen van massa-immigratie, of over de inhoud van de islam. Maar stop ‘links’ neer te zetten als in essentie landverraders (of je die term nou letterlijk gebruikt of niet). Je delegitimeert daarmee niet alleen je tegenstander in het debat; je brengt ze ook in concreet, fysiek gevaar, zoals blijkt uit de slachting op een sociaal-democratisch partijevenement. De oproep van de Noorse koning – en het moet gezegd, ook van enkele bloggers op de Dagelijkse Standaard – tot meer beschaving, tot matiging is daarom een hele goeie. Voer gewoon een discussie, zonder de tegenstander af te schilderen op ideologische wijze.
- Edit 1: Het behoeft geen uitleg dat dit vanzelfsprekend ook geldt voor de linkerzijde in het debat. Het geldt voor iedereen.
- Edit 2: Sommige rechtse opiniemakers hebben er nog steeds niets van begrepen. Volgens Afshin Ellian is Anders Breivik alsnog een islamitische terrorist. En op GeenStijl laten ze hun ware aard zien: die van de grote pestkop op het schoolplein, die eenmaal betrapt alleen maar naar hunnie kan wijzen.
We wrote about Portugal’s succesful drug decriminalization experiment before, and a couple of days ago this success was once again confirmed. At the press conference marking the tenth anniversary of the law, Portuguese health experts have shown that drug addiction has hugely declined, that drug-related infections have declined, and that drug-related crimes have declined.
The facts: the number of frequent hard drug users has declined from 100,000 in the early 1990s to 50,000 now. The reduction in numbers of infections and crimes is deemed “spectacular”.
In short, along almost every conceivable line, decriminalizing drugs has been a success. It should be stressed that Portugal’s policy does not consist of decriminalization alone: the core is treating drug use as a health problem instead of a crime. People getting caught with a sufficient amount of banned substances have to appear before special addiction panels rather than a criminal court. Here, it is determined whether a person is a casual user or an addict. Personal possession was decriminalized, allowing police authorities to focus on large-scale drug trafficking.
Conservative politicians need to recognize this objective, measurable success. The facts are clear for all to see: drug criminalization does. not. work. It just doesn’t. Battling drug use through criminal law alone only results in stigmatization, unnecessary financial costs, people’s lives wasted in jail and a neglect of the health problem. Moreover, it fails to distinguish between casual users who are no problem to society at all, and addicts.
Read more about the empirical success of Portugal’s drug policy here and here. Also see Glenn Greenwald’s report on the effects of drug decriminalization in Portugal.
Health experts in Portugal said Friday that Portugal’s decision 10 years ago to decriminalise drug use and treat addicts rather than punishing them is an experiment that has worked.
“There is no doubt that the phenomenon of addiction is in decline in Portugal,” said Joao Goulao, President of the Institute of Drugs and Drugs Addiction, a press conference to mark the 10th anniversary of the law.
The number of addicts considered “problematic” — those who repeatedly use “hard” drugs and intravenous users — had fallen by half since the early 1990s, when the figure was estimated at around 100,000 people, Goulao said.
Other factors had also played their part however, Goulao, a medical doctor added.
“This development can not only be attributed to decriminalisation but to a confluence of treatment and risk reduction policies.”
Portugal’s holistic approach had also led to a “spectacular” reduction in the number of infections among intravenous users and a significant drop in drug-related crimes, he added.
A law that became active on July 1, 2001 did not legalise drug use, but forced users caught with banned substances to appear in front of special addiction panels rather than in a criminal court.
The panels composed of psychologists, judges and social workers recommended action based on the specifics of each case.
Since then, government panels have recommended a response based largely on whether the individual is an occasional drug user or an addict.
Of the nearly 40,000 people currently being treated, “the vast majority of problematic users are today supported by a system that does not treat them as delinquents but as sick people,” Goulao said.
In a report published last week, the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) said Portugal had dealt with this issue “in a pragmatic and innovative way.”
Drug use statistics in Portugal are generally “below the European average and much lower than its only European neighbour, Spain,” the report also said.
“The changes that were made in Portugal provide an interesting before-and-after study on the possible effects of decriminalisation,” EMCDDA said.
Many of these innovative treatment procedures would not have emerged if addicts had continued to be arrested and locked up rather than treated by medical experts and psychologists. Currently 40,000 people in Portugal are being treated for drug abuse. This is a far cheaper, far more humane way to tackle the problem. Rather than locking up 100,000 criminals, the Portuguese are working to cure 40,000 patients and fine-tuning a whole new canon of drug treatment knowledge at the same time. None of this is possible when waging a war.
The data show that, judged by virtually every metric, the Portuguese decriminalization framework has been a resounding success. Within this success lie self-evident lessons that should guide drug policy debates around the world.
And finally, one last reference to the recent report by the Global Commission on Drug Policy, which has come to the same conclusions.
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