Is eco­nom­ic opti­mism real­ly what’s get­ting export­ed?

The Wash­ing­ton Post
Germany’s major export: eco­nom­ic opti­mism
By Harold Mey­er­son Opin­ion writer Sep­tem­ber 24 at 7:49 PM

If you live in an advanced econ­o­my — in West­ern Europe, Japan or the Unit­ed States — odds are you’re in a funk. Unless you live in Ger­many.

This month, the Pew Research Cen­ter released the the results of polling it con­duct­ed in 44 nations — 10 of them with what Pew char­ac­ter­ized as “advanced” economies (includ­ing the Unit­ed States, France, Japan, Ger­many, Italy and the Unit­ed King­dom). The two key ques­tions posed were whether respon­dents were “sat­is­fied or dis­sat­is­fied” with the way things were going in their coun­try and whether they thought the “eco­nom­ic sit­u­a­tion in [their] coun­try was good or bad.” Over­all, sat­is­fac­tion with one’s coun­try fol­lowed the respondent’s judg­ment on its econ­o­my as the night the day.

While the noon­day sun was blaz­ing in Chi­na (where 89 per­cent judged their econ­o­my good and 87 per­cent expressed their sat­is­fac­tion with the way things were going — allow­ing that some may have feared giv­ing neg­a­tive answers), night had descend­ed on peo­ple in the advanced economies. In nine of those 10, peo­ple were more dis­sat­is­fied than con­tent with the way things were head­ed, and in eight of them, they felt their nation’s eco­nom­ic sit­u­a­tion was bad. The polit­i­cal com­po­si­tion of their gov­ern­ment didn’t seem to mat­ter. In Tory Britain, 55 per­cent said the econ­o­my was bad; in the Oba­ma-led Unit­ed States, 58 per­cent said the same. In nation­al­ist-Key­ne­sian Japan, the fig­ure was 63 per­cent; in Social­ist France, 88 per­cent; in con­ser­v­a­tive Spain, 93 per­cent. The gloomi­est con­ti­nent (includ­ing both its advanced economies and such emerg­ing economies as Poland and Ukraine) was Europe, where 88 per­cent said their economies weren’t doing well.

Except for Ger­many. Ful­ly 85 per­cent of Ger­mans said their homeland’s eco­nom­ic sit­u­a­tion was good. How do we account for this Ger­man excep­tion­al­ism?

Let’s start with man­u­fac­tur­ing. Like the only two nations with even high­er per­cent­ages call­ing their economies a suc­cess (Chi­na and Viet­nam), Ger­many is an export dynamo, with a huge trade sur­plus that bol­sters its cof­fers. It owes part of that sur­plus to the euro, which makes Ger­man goods cheap­er than they’d be if Ger­many had its own cur­ren­cy. But part is due to the strength of the country’s man­u­fac­tur­ing sec­tor and the con­comi­tant weak­ness of its finan­cial sec­tor.

...

The arti­cle goes on to make a num­ber of valid points about dif­fer­ences in cor­po­rate struc­ture, gen­er­al busi­ness prac­tices, and wealth dis­tri­b­u­tion between the US and Ger­many, although the high­ly ben­e­fi­cial role played by using the euro vs the Deutsche Mark or the impos­si­bil­i­ty of the rest of the world simul­ta­ne­ous­ly becom­ing high-tech export pow­er­hous­es nev­er get men­tioned. Also not men­tioned is the “high­ly explo­sive” loss of social cohe­sion due to Ger­many’s oth­er main export (aus­ter­i­ty) recent­ly observed by a new study by the Ber­tels­mann Foun­da­tion. It’s not exact­ly opti­mistic:

Euractiv.com
Social jus­tice index reveals ‘high­ly explo­sive sit­u­a­tion’ in Europe
Pub­lished: 25/09/2014 — 14:28 | Updat­ed: 25/09/2014 — 14:29

The next Euro­pean Com­mis­sion must step up efforts to tack­le social jus­tice in the EU, as the eco­nom­ic imbal­ance between mem­ber states inten­si­fied dur­ing the cri­sis, warns the Ber­tels­mann Stiftung.

Accord­ing to the Ger­man think tank’s Social Jus­tice Index for 2014, which com­pares the 28 mem­ber states across six indi­ca­tors — pover­ty pre­ven­tion, equi­table edu­ca­tion, labour mar­ket access, social cohe­sion and non-dis­crim­i­na­tion, health, as well as inter­gen­er­a­tional jus­tice — equal­i­ty varies wide­ly across the EU.

Grow­ing gap

“The gap between par­tic­i­pa­tion oppor­tu­ni­ties in the still-wealthy coun­tries of north­ern Europe and in the cri­sis-struck south­ern nations has thus sig­nif­i­cant­ly increased,” the think tank said.

“This is a high­ly explo­sive sit­u­a­tion with regard to soci­etal cohe­sion and social sta­bil­i­ty with­in the EU. Should these social divi­sions per­sist for some time, or even wors­en fur­ther, this will endan­ger the future via­bil­i­ty of the entire Euro­pean inte­gra­tion project,” it added.

While the Index shows that there’s still a high lev­el of social inclu­sion in Swe­den, Fin­land, Den­mark and the Nether­lands, social injus­tice in coun­tries such as Greece, Spain, Italy and Hun­gary has increased since 2009.

Though the Nordic coun­tries, Swe­den, Fin­land and Den­mark, as well as the fourth-ranked Nether­lands, score par­tic­u­lar­ly well in the areas of pover­ty pre­ven­tion, labour mar­ket access, social cohe­sion and non-dis­crim­i­na­tion, there’s room for improve­ment.

For exam­ple, these coun­tries lack equal labour mar­ket access oppor­tu­ni­ties for migrants. Swe­den and Finland’s efforts to com­bat rel­a­tive­ly high rates of youth unem­ploy­ment have also not been suc­cess­ful. In Swe­den, 23.5% of young peo­ple are unem­ployed, along with 19.9% in Fin­land.

Greece at the bot­tom

Greece, which is at the bot­tom of the rank­ing, strug­gles with both a youth unem­ploy­ment rate of near­ly 60%, a rapid increase in the risk of pover­ty par­tic­u­lar­ly among chil­dren and youth, a health care sys­tem bad­ly under­mined by aus­ter­i­ty mea­sures, dis­crim­i­na­tion against minori­ties as a result of strength­ened rad­i­cal polit­i­cal forces, and an enor­mous moun­tain of debt that rep­re­sents a mort­gage on the future of com­ing gen­er­a­tions.

The Ber­tels­mann Stiftung said these prospects rep­re­sent a sig­nif­i­cant dan­ger to Greece’s polit­i­cal and social sta­bil­i­ty.

“These devel­op­ments illus­trate that the cuts induced by the cri­sis are not admin­is­tered in a bal­anced way through­out the pop­u­la­tion,” the think tank said.

Along­side the North-South divide, the analy­sis also shows the grow­ing imbal­ance between gen­er­a­tions. For exam­ple, young peo­ple are much hard­er hit by social injus­tice than those who are old­er. At the moment, 28% of the EU’s youth pop­u­la­tion are threat­ened by pover­ty or social exclu­sion.

...

If stats like “28% of the EU’s youth pop­u­la­tion are threat­ened by pover­ty or social exclu­sion” leave you feel­ing less than opti­mistic about Europe’s future, keep mind things can change. For instance, the Euro­pean Com­mis­sion and OECD just put out a report on what how to get more younger peo­ple back into the work­force. The key find­ing? Young peo­ple need to migrate more. Feel­ing opti­mistic yet?

“Anoth­er rea­son how­ev­er, is that Sama­ras wants to stop pos­si­ble loss­es of New Democ­ra­cy MPs to right-wing par­ties. He believes that Voridis and Geor­giadis can serve as the uni­fy­ing link between the con­ser­v­a­tives and the right­ists of the par­ty”:

Greek Reporter
Voridis to Rep­re­sent Sama­ras in Par­lia­ment-SYRIZA Oppo­si­tion Reacts

Pol­i­tics

by Daphne Tsagari — Oct 8, 2014

The three-day par­lia­men­tary debate that will lead to a vote of con­fi­dence for the gov­ern­ment begins today and the MPs will cast their vote on Fri­day at mid­night.

The first heat­ed argu­ments have already start­ed as SYRIZA oppo­si­tion par­ty react­ed to the fact that Prime Min­is­ter Anto­nis Sama­ras will be absent from the par­lia­men­tary debate. Sama­ras, who is in Milan for the EU sum­mit, appoint­ed Health Min­is­ter Makis Voridis to be his rep­re­sen­ta­tive in today’s dis­cus­sion.

SYRIZA par­ty mem­bers have expressed their dis­sat­is­fac­tion for the appoint­ment of the min­is­ter of health, speak­ing of “a gov­ern­ment set by Voridis”, while the inter­net was flood­ed with com­ments and pho­tos from the time when Voridis was a mem­ber of right-wing LAOS par­ty and, before that, mem­ber of the jun­ta-friend­ly par­ty EPEN.

The atti­tude of the oppo­si­tion was denounced by gov­ern­ment spokesper­son Sofia Voul­tep­si, who after announc­ing that PM Sama­ras would be going to Milan for the EU sum­mit on employ­ment, com­ment­ed iron­i­cal­ly: “We assure SYRIZA that Euro­pean lead­ers will def­i­nite­ly ask per­mis­sion from Mr. Skourletis as to when to hold the next sum­mit. ”

...

Before Mr. Voridis, how­ev­er, the oppo­si­tion had tar­get­ed the oth­er promi­nent mem­ber of the gov­ern­ment par­ty who also came to New Democ­ra­cy from LAOS, par­lia­men­tary rep­re­sen­ta­tive for New Democ­ra­cy, Ado­nis Geor­giadis.

SYRIZA has put Geor­giadis in “quar­an­tine” and sev­er­al of its mem­bers refuse to par­tic­i­pate in dis­cus­sions with him after a state­ment he made a few days ago “that he would take his mon­ey out of Greece if SYRIZA was elect­ed gov­ern­ment.”

SYRIZA mem­bers have also stat­ed that they would walk out of the par­lia­ment when­ev­er Geor­giadis address­es the ple­nary. This was one of the rea­sons the prime min­is­ter chose to appoint Makis Voridis to rep­re­sent him instead of Geor­giadis.

Anoth­er rea­son how­ev­er, is that Sama­ras wants to stop pos­si­ble loss­es of New Democ­ra­cy MPs to right-wing par­ties. He believes that Voridis and Geor­giadis can serve as the uni­fy­ing link between the con­ser­v­a­tives and the right­ists of the par­ty.

“You had bet­ter not do that! It’ll be sui­cide!” That’s basi­cal­ly the atti­tude expressed by the EU’s Finance Com­mis­sion­er in response to sug­ges­tions that Greece’s debt repay­ments are impos­si­ble to achieve. The EU clear­ly prefers that Greece sticks to the much slow­er, more painful form of nation­al sui­cide its already been pre­scribed:

AP
EU: Greek Defi­ance on Debt Would Be ‘Sui­ci­dal’
ATHENS, Greece — Dec 15, 2014, 12:33 PM ET
By DEREK GATOPOULOS and RAPHAEL KOMINIS

A refusal by Greece to repay bailout debts would be “sui­ci­dal” for the coun­try, the Euro­pean Union’s top finance offi­cial said Mon­day in a clear warn­ing to the coun­try’s pop­u­lar oppo­si­tion.

EU Finance Com­mis­sion­er Pierre Moscovi­ci made the remarks after a three-hour meet­ing with con­ser­v­a­tive Prime Min­is­ter Anto­nis Sama­ras.

“The idea of con­tem­plat­ing the pos­si­bil­i­ty not to reim­burse a huge debt is sui­ci­dal ? it’s not pos­si­ble, you’ll be in default and that’s what we’ve been try­ing to avoid for years,” Moscovi­ci said.

Moscovi­ci’s two-day vis­it went ahead despite stalled nego­ti­a­tions between Greece and bailout cred­i­tors, and took place ahead of a par­lia­men­tary vote that could top­ple Greece’s pro-bailout gov­ern­ment this month.

“There is a need for struc­tur­al reforms. It’s not only for Greece, it’s for all the coun­tries in the euro­zone ... It would be a pity for (Greece) not to go on.”

Greek law­mak­ers will start vot­ing Wednes­day for a new Greek pres­i­dent, in a bal­lot like­ly to last three rounds through Dec. 29.

Sama­ras could be forced to call an ear­ly gen­er­al elec­tion if he fails to attract enough sup­port from the oppo­si­tion for a gov­ern­ment-backed can­di­date.

The anti-bailout Syriza par­ty is press­ing for a snap elec­tion, argu­ing that aus­ter­i­ty poli­cies have failed. After a bru­tal six-year reces­sion, it says Greece still has an unsus­tain­able debt bur­den which can­not be repaid to res­cue lenders in full.

Syriza retains a lead in the lat­est opin­ion poll pub­lished Mon­day by pri­vate Real FM radio. It pro­ject­ed a gen­er­al elec­tion vic­to­ry for the left-wing par­ty by a 5.1 per­cent­age-point mar­gin over the con­ser­v­a­tive New Democ­ra­cy. How­ev­er, vic­to­ry on such a scale would not give Syriza enough seats to gov­ern with­out a coali­tion.

The polit­i­cal uncer­tain­ty has rat­tled Greek mar­kets over the past week or so as investors have fret­ted over the coun­try’s place in the 18-coun­try euro­zone.

...

Note that the first round of votes just took place. Snap elec­tions here we come? Pos­si­bly. The vote did­n’t go so well for Greece’s gov­ern­ment:

AFP, dpa
Greek par­lia­ment tries to avert dis­as­ter in sec­ond-round pres­i­den­tial bal­lot

Greek law­mak­ers face a sec­ond round of vot­ing after the only can­di­date Stavros Dimas failed to gain enough votes in the pres­i­den­tial bal­lot. The stale­mate could spell ruin for the nation’s eco­nom­ic recov­ery.

Date 17.12.2014

Greek par­lia­men­tar­i­ans entered a sec­ond round of vot­ing on Wednes­day after the first end­ed in defeat for the only can­di­date, for­mer EU Envi­ron­ment Com­mis­sion­er Stavros Dimas. Prime Min­is­ter Anto­nis Sama­ras’ rul­ing coali­tion, which only has 155 seats, failed to muster the required 200 votes from the 300 mem­bers of par­lia­ment.

He only got 160 votes, with many deputies abstain­ing or remain­ing pur­pose­ly absent for the bal­lot.

Should a third and final round be nec­es­sary on Decem­ber 29, Dimas will only need 180.

The high-stakes bal­lot could lead to snap elec­tions. Although it is large­ly a cer­e­mo­ni­al posi­tion, if Dimas does­n’t win the pres­i­den­tial vote, this would pave the way for ear­ly leg­isla­tive elec­tions. This could be a gold­en oppor­tu­ni­ty for left­ist par­ty Syriza, who wants to change the eco­nom­ic course of Greece, and is cur­rent­ly lead­ing in the opin­ion polls.

“Very soon our peo­ple will take cen­ter stage in devel­op­ments,” said Syriza leader Alex­is Tspi­ras on Wednes­day, adding that the vote was a clear sign the “fear cam­paign” launched by gov­ern­ment had col­lapsed.

Wor­ry over the future of reforms put in place to tack­le the coun­try’s eco­nom­ic cri­sis and to receive a 240 bil­lion euro (300 bil­lion dol­lar) bailout sent shock­waves through the mar­kets, with Athens stocks los­ing more than one fifth of the val­ue over four days and reduc­ing the val­ue of the euro.

EU Com­mis­sion­er Jean-Claude Junck­er even took the unusu­al step of telling Greeks not to vote the “wrong” way.

The elec­tion for pres­i­dent has been moved up from Feb­ru­ary, a huge gam­ble for prime min­is­ter Anto­nis Sama­ras, who bare­ly holds on to a major­i­ty in par­lia­ment. The bal­lot was moved to Wednes­day to reduce uncer­tain­ly when frag­ile nego­ti­a­tions with the nation’s cred­i­tors, the Euro­pean Union and the Inter­na­tion­al Mon­ey Fund, will be tak­ing place.

A Greek tragedy

The gov­ern­ment was hop­ing to win over at least six oppo­si­tion mem­bers on Wednes­day night, as well as sev­er­al inde­pen­dents, lead­ing to Dimas’ con­fir­ma­tion. If they fail to vote him in, Sama­ras warned, it will be “fatal to the Euro­pean devel­op­ment of the coun­try.”

...

It’s worth point­ing out that Greece’s econ­o­my real­ly pull out of six straight years of reces­sion next year. Not that this would end the calls for more aus­ter­i­ty but at least a grow­ing econ­o­my would help Greece reduce its debt-to-GDP ratio if the econ­o­my can start grow­ing again (refrain­ing from inten­tion­al­ly stran­gling your econ­o­my can do won­ders for the debt-to-GDP ratio). We’ll see how it goes.

Days before the sec­ond round of pres­i­den­tial vot­ing, charges of bribery were being bandied about when an MP with the right-wing anti-aus­ter­i­ty Inde­pen­dent Greeks par­ty alleged he was being bribed to vote for the right-wing pro-aus­ter­i­ty pres­i­den­tial can­di­date

Finan­cial Times
Sama­ras in last-ditch bid to avert snap elec­tion amid bribe claims

Kerin Hope in Athens
Decem­ber 21, 2014 7:08 pm

Anto­nis Sama­ras, Greece’s belea­guered prime min­is­ter, has offered last-minute con­ces­sions to per­suade oppo­si­tion law­mak­ers to back his party’s pres­i­den­tial can­di­date, in an increas­ing­ly fran­tic effort to avert a snap gen­er­al elec­tion, deep­er polit­i­cal tur­moil and quell renewed fears of a Greek exit from the euro.

The premier’s move came as details emerged — includ­ing poten­tial­ly incrim­i­nat­ing audio tapes and a DVD — of an alleged bun­gled attempt to bribe a rightwing oppo­si­tion MP to break ranks and sup­port Stavros Dimas, a for­mer Euro­pean com­mis­sion­er, in Tuesday’s sec­ond-round pres­i­den­tial vote.

In an unsched­uled tele­vi­sion address on Sun­day, Mr Sama­ras called for a “con­sen­sus” vote for Mr Dimas, urg­ing MPs to “lis­ten to the voice of con­science, nation­al inter­est and com­mon sense”.

In last week’s first-round vote, Mr Dimas secured only a hand­ful of bal­lots from inde­pen­dent deputies whose sup­port is need­ed to secure a three-fifths major­i­ty in the third and final round of vot­ing on Decem­ber 29.

If par­lia­ment fails to elect a new head of state, a gen­er­al elec­tion would be held in ear­ly Feb­ru­ary before the com­ple­tion of a final round of talks between Greece and its inter­na­tion­al cred­i­tors. Opin­ion polls sug­gest an ear­ly elec­tion would be won by the hard-left Syriza par­ty, which wants to nego­ti­ate a sub­stan­tial write­down of Greece’s sov­er­eign debt with inter­na­tion­al cred­i­tors.

...

Alex­is Tsipras, leader of Syriza, accused the prime minister’s office of involve­ment in the alleged attempt to bribe a deputy from the rightwing Inde­pen­dent Greeks par­ty, who claimed he was offered €3m to switch sides in the pres­i­den­tial elec­tion.

“We have an anom­alous sit­u­a­tion in the rightwing envi­ron­ment of the prime min­is­ter, includ­ing accu­sa­tions of vote-buy­ing and — to put it polite­ly — of foot-drag­ging by the judi­cia­ry,” Mr Tsipras said, echo­ing state­ments made ear­li­er by Inde­pen­dent Greeks.

Offi­cials in the prime minister’s office rebutted the accu­sa­tions, claim­ing that Syriza offi­cials had col­lud­ed with Panos Kam­menos, the leader of the Inde­pen­dent Greeks, to frame the MP accused in the scan­dal. Mr Kam­menos denied the claim.

Pav­los Haikalis, the deputy involved, denied wrong­do­ing, while mem­bers of parliament’s ethics com­mit­tee voiced doubts about the authen­tic­i­ty of a DVD pur­port­ed­ly show­ing the bribery attempt.

The rev­e­la­tion that the finan­cial advis­er who alleged­ly dis­cussed the pay­ment with Mr Haikalis also worked for Mr Kam­menos, which was backed up by pic­tures of the two men hold­ing a meet­ing with Mr Tsipras, only added to the con­fu­sion.

One ana­lyst said: “Who­ev­er was behind this affair, it’s clear­ly cast a shad­ow over the elec­tion process, and must have dis­suad­ed some inde­pen­dents from back­ing Mr Dimas.”

So days before the sec­ond round of vot­ing for Greece’s pres­i­dent, a right-wing MP, Palvos Haikalis, charges that he was offered a bribe to switch his vote to the right-wing pres­i­den­tial can­di­date Mr. Dimas. And Alex­is Tsipras, leader of the left-wing Syriza, echoed those charges. And the evi­dence for this includ­ed a pic­ture show­ing Haikalis and the finan­cial advis­er that worked for Panos Kam­menos, the head of the Inde­pen­dence Par­ty, meet­ing with Alex­is Tsipras. Yeah, that’s con­fus­ing.

Also note that Mr. Dimas failed to get the votes he need­ed in the sec­ond round of vot­ing, so Greece is now slat­ed to have a third and final vote on Decem­ber 29, and if that vote does­n’t pass, Greece’s gov­ern­ment dis­solves and new elec­tions are to be held in Feb­ru­ary:

Bloomberg News
Samaras’s Call Fails to Lure MPs to Back Nom­i­nee, Avert Elec­tion
By Eleni Chrepa and Anto­nis Galanopou­los Dec 23, 2014 4:29 AM CT

Greek Prime Min­is­ter Anto­nis Sama­ras failed in his sec­ond effort to get law­mak­ers to back his nom­i­nee for pres­i­dent and avert snap gen­er­al elec­tions.

With vot­ing ongo­ing in Athens, more than 100 law­mak­ers in the country’s 300-seat cham­ber with­held sup­port for Samaras’s can­di­date Stavros Dimas, leav­ing him short of the required 200 bal­lots.

If Sama­ras fails in the third and final vote on Dec. 29, par­lia­ment will be dis­solved, prompt­ing the call­ing of ear­ly elec­tions. Sama­ras, who didn’t man­age to gar­ner enough sup­port in the first vote on Dec. 17, called on Greek law­mak­ers on Dec. 21 to join him in the effort to avert ear­ly elec­tions, say­ing Greece “must end polit­i­cal uncer­tain­ty.”

...

The prospect of ear­ly par­lia­men­tary elec­tions has roiled finan­cial mar­kets in Greece, evok­ing mem­o­ries of the height of the finan­cial cri­sis in 2012 when the country’s euro mem­ber­ship was in jeop­ardy. Polls show anti-aus­ter­i­ty oppo­si­tion par­ty Syriza ahead of Samaras’s New Democ­ra­cy.

Get ready for a lot more sto­ries like this.