The Questions Posed by the World’s 2015 Elections

15 national elections I’m watching on 2015 and the questions I’m asking about them, organized in chronological order.

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Greece: Can modern Greek democracy survive the combined effects of years of extraordinary fiscal mismanagement, a devastating recession, and a sudden day of reckoning (austerity) stage-managed from Berlin? That’s the bigger question the world is asking when Greece heads to the polls this coming weekend, behind narrow questions of what might happen in the next six months. Newcomer “Syriza” – a party with moderate rhetoric, yet still an unknown quantity – has led the polling average since November 2013, more than a year before snap elections were called. Syriza could shake things up — for good or ill — in the country whose ancestors founded much of Western democracy. On the other hand, the ancient Greeks also formalized the concepts of “oligarchy,” “aristocracy,” and “tyranny,” so that’s not a huge comfort. Modern Greek democracy is just 40 years old, and Plato might forecast a turn to a less participatory form of The Kyklos (the cycle of governance between such forms) is about due. The rise of the neo-Nazi “Golden Dawn” as a potent force in Greek politics offers that grim path.

Nigeria: Should a young democracy re-elect a civilian president from the same party that has won every election since 1998? Should it do so despite his record of extreme incompetence in handling an insurgency that has now seized more territory than ISIS controls in Africa’s most populous nation and largest economy? What if the alternative choice is a former military dictator and perennial also-ran? These are the basic questions facing Nigerians in February’s election that will see once-accidental President Goodluck Jonathan of the People’s Democratic Party face off against Gen. Muhammadu Buhari at the head of an increasingly powerful opposition coalition and amid plunging oil prices. The legislative chambers are also up for election. Even if Jonathan is re-elected, he may face a hostile majority.

Israel: Can the Israeli left make a serious comeback in the country’s politics after Israel voters increasingly veered to the right and after significant party changes shattered the Labor Party for almost a decade? Would it make any difference to Israel’s relations with its neighbors and the world at large? Would it change the economic fortunes of average Israelis?

United Kingdom: Is the Westminster System — as it has traditionally existed in its tripartite form since the arrival of universal male suffrage — finished in Westminster itself? UKIP, the Scottish National Party, and other parties outside the Big Three make another coalition government of some kind almost a certainty – likely with huge effects for the British populace and their place within the European Union.

Mexico: Will the insulated Federal District finally be shaken out of its slumber by a growing protest movement and other reactions to the total capture of Mexican state and local government by the cartels? The Congress is up for election, but without a sea change in the foreign-focused Peña Nieto administration, few expect serious policy shifts at home, whatever the outcome of the midterms. Still, nobody expects the Spanish Inquisition any more than they expect a spontaneous mass uprising that forces just such a sea change. Could be too early to tell.
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Greece’s Syriza, Germany, and the Gordian Knot

The talk of Europe in the past week has been the snap elections called for Greece at the end of January, which may bring to power a new leftist party called Syriza, which seeks to make domestic reforms and EU reforms that will help average working people and end widespread corruption. Critics have called it “populist” or “radical,” but everything I’ve seen indicates it’s not particularly radical in reality:

Syriza’s manifesto proposes that repayment of debt could come through economic growth, rather than from budget cuts. It wants a European new deal backed up by an investment bank; an all-out war against the tax avoidance endemic in Greek society; an emergency employment programme; a raised minimum wage; and the restoration of collective bargaining.

 
More:

Syriza promises first to achieve a substantial write-off of Greek debt and, second, to lift austerity by aiming for balanced budgets, instead of the surpluses demanded by the troika. It will reconnect families to the electricity network, provide food relief and shelter the homeless. It will take immediate action to reduce unemployment through public programmes. It is committed to lowering the enormous tax burden and to boosting public investment in an effort to accelerate growth.

There is nothing radical, much less revolutionary, in these policies. They represent modest common sense and would open a fresh path for other European countries. After all, Syriza has repeatedly declared its intention to keep the country within the economic and monetary union, and to avoid unilateral actions. There is little doubt that its leaders are committed Europeanists who truly believe that they could help transform the EU from within.

 
Arsenal For Democracy’s guest post by Etienne Borocco, on the 2014 European Union elections, also drew a strong contrast between Syriza on the populist left and the legitimately frightening populist but ultra-right-wing parties rising across Europe, including in Greece:

Additionally, we should also qualify the right’s surge by noting that the radical left made a sharp increase in Southern Europe and in Ireland. The EUL/NGL gained 10 seats. The Greek party Syriza, whose national leader Alexis Tsipras was the EUL/NGL’s candidate for the European Commission, arrived first in Greece. In Spain and in Portugal, the radical left also earned very good results, via new parties such as Spain’s “Podemos,” which ideologically aligns with parties like Syriza, or via older organizations like the Communist Party of Portugal. The far left collectively won as many seats as the Non-Attached members. Notably, in contrast with the right, leftists like Tsipras are not against euro or the EU as a concept; he only denounced the austerity policies advocated by the EU leaders in recent years.

 
They are pro-Europe and pro-reform, just not pro-austerity. They are also not neo-Nazis like Golden Dawn, the ultra-right-wing party in Greece that has also been boosted significantly after four years of economic grind on the poor and lower middle class.

In a recent post on his blog, economist Uwe Bott argues that the rise of Syriza in Greece provides an incredible opportunity for Greece to escape the tangle of its debts — like Alexander the Great slicing through the Gordian Knot instead of trying to untie it — and for eurozone-leader Germany to help the country do so in a responsible manner … if it chooses to:

Like many fables or legends there is a moral to this story: Was Alexander the Great cheating when he cut the knot with his sword or was his an act of genius? Or to put the analogy in this context: Would a Greek default be cheating or the only plausible solution to an intractable problem?

Of course, the troika would scream: Fraud! After all, most of the irresponsible lending to Greece has long been transferred from the private banking sector to public accounts at the IMF, the EU Commission and the ECB.

Now, many Greeks would call a default ingenious. After all, Greek GDP has plummeted by 25% during the austerity program. Unemployment stands at 25% with youth unemployment double that. Pensions have been cut in half. Poverty is skyrocketing. Suicide rates have doubled and infant mortality is up as the public healthcare system has collapsed.

So, from a Greek perspective what is not to like about a default? Some of the alleged consequences, such as kicking Greece out of the Eurozone, turn out to be paper tigers. There are no means by which Eurozone countries can actually expel a member. In other words, a Greek default within the Eurozone is possible.

However, defaulting on one’s debt is not to be taken lightly. The default would exclude Greece from access to capital markets important to its private sector and banks.

 
He also warns in the full post (which I’ve only clipped bits out of) that there is a real risk that an entirely unrestrained default — which Syriza seems to want to avoid anyway, if the EU will help work out a deal — could cause a contagious shock that topples other economies and markets (particularly, he finds Italy a likely candidate). But that’s why Germany needs to lean in and embrace the new movement in Greece, to ensure it has a say in how any default or partial default is managed, so it doesn’t cause panic across Europe: Read more

The Incomprehensible David Cameron

David Cameron must have actually lost his mind. In the middle of all the sanctions, he just loaned one of the Elgin Marbles to Russia, further infuriating Greece (from whom they were originally, famously stolen) after Greece loyally backed up the rest of the European Union (and NATO) on anti-Russia policies this year.

It’s one thing to petulantly insist on keeping the British Museum’s stolen artifacts from the Parthenon. It’s quite another to loan them out to an active enemy country in a taunt to one’s ally.

Surviving figures from the East Pediment of the Parthenon, exhibited as part of the Elgin Marbles in the British Museum. (Credit: Andrew Dunn)

Surviving figures from the East Pediment of the Parthenon, exhibited as part of the Elgin Marbles in the British Museum. (Credit: Andrew Dunn)

June 9, 2014 – Arsenal For Democracy 87

AFD-logo-470
Extended Episode. Topics: Right-wing extremism in the US & Europe, FIFA is terrible. People: Bill, Nate, guest expert Etienne Borocco.

Discussion Points:

– Should right-wing violence in America be considered terrorism? Should terrorism be treated differently from other crimes?
– Just how awful is FIFA? Is the World Cup a net harm to host countries and cities?
– How should Europe respond to the rise of neo-Nazi parties such as Golden Dawn?
– Who are the Front National and why are they winning in France?
– Who are the UKIP and why are the winning in Britain?

Part 1 – Nevada Attack:
Part 1 – Nevada Attack – AFD 87
Part 2 – FIFA/World Cup:
Part 2 – FIFA World Cup – AFD 87
Part 3 – Golden Dawn:
Part 3 – Golden Dawn – AFD 87
Part 4 – Etienne Borocco on French and UK Populism:
Part 4 – European Elections – AFD 87

To get one file for the whole episode, we recommend using one of the subscribe links at the bottom of the post.

Related links

– AFD Guest: “EU Elections, the Rising Populists, and Why Europe is Worried” by Etienne Borocco
– AFD: “Cameron making louder “Brexit” noises after UKIP win
– Guardian: “SS songs and antisemitism: the week Golden Dawn turned openly Nazi
– AFD: “Vegas attack was domestic terrorism, tied to Bundy standoff
– AFD: “Alt-history novelists have got nothing on Cliven Bundy
– AFD: “No shock there: Bundy a raging racist
– AFD Radio: “April 21, 2014 – Arsenal For Democracy 81
– Last Week Tonight: John Oliver explains the mess that is FIFA
– AFD: “2022: Slavery World Cup

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And don’t forget to check out The Digitized Ramblings of an 8-Bit Animal, the video blog of our announcer, Justin.

A brief history of the Greek debt coverup

The problem with not giving anyone central monetary control of a shared currency is that it can become very chaotic and disorganized if everyone is pursuing contradictory fiscal policy at the national level. To avoid this, when the Eurozone was being designed, members agreed that they would have to meet certain deficit and debt targets — keeping the budget deficit (amount spent more than collected) below a certain ratio for a few years — to join and then even below that initial target every year after becoming members.

(Sidebar: The major downside to this strategy is that the economies and parliaments remain separate despite sharing a currency, yet they can’t respond to specific economic conditions in their own countries without violating their deficit and debt targets. This extends recessions in some places, even as other members of the Eurozone continue to do well.)

By 1998, eleven countries had met their targets for joining the Eurozone. Greece was not one of them.

As of 1999, when the currency virtually launched for trading purposes but not ordinary people, Greece had still not met their target to join the Eurozone when it would launch on paper a few years later. In large part, this resulted less from generous social spending and pensions and more from Greece’s chronic inability to collect tax revenues from its citizens – one of the most tax-evading populations in the world.

They were also five years away from hosting the 2004 Summer Olympics, which they had been awarded in 1997. The games had run into huge budget problems and cost overruns, which the government (as a matter of national pride, being Greece) had to help manage. They needed to take on even more debt to pull off the games, which was the opposite of what they needed to join the Eurozone before currency began circulating.

US Investment Bank Goldman Sachs came up with some very elaborate and expensive schemes (see this detailed video explanation of the mechanics from the BBC), which essentially allowed Greece to get the money it needed, while hiding how big their debt (and yearly deficits) had become. This scam allowed Greece to join the Eurozone in 2001, while it was still in its virtual stage, in time to participate when the physical currency launched in January 2002.

greek-euro-10-acropolisOutside observers started exposing the Goldman scam in 2003, and Greek government officials (from a new cabinet) revealed the deal in 2005, but EU regulators essentially pretended it had never happened until well after the crisis hit in 2009 (and continued to deny prior knowledge of it).

Meanwhile, Greece’s already bad debt situation was exploding from 2000 to 2008, as a direct result of the terms of the deal.

In a sense, like so many American homeowners before the end of 2007, Greece was given subprime loans it couldn’t possibly repay. Regulators and monetary authorities failed to perform due diligence ahead of the accession of Greece to the eurozone and then ignored the escalating danger as long as the rest of the global and European economy was doing fine. They only stepped in after the house of cards collapsed and then demanded round after round of budget cuts and other measures that hurt average Greeks who had nothing to do with the bad debt decisions that the rest of the Eurozone should have stepped in to prevent years earlier.

Greece played a part in setting up its own crisis, but the bigger picture is that Greece was failed by its peers and partners in the monetary union, and it was failed by abusive and manipulative lenders, who preyed upon a desperate government and gave them loans it never should have received in the first place.