Thursday, 29 May 2014


Introduction: Political Polarization, Downward Socioeconomic Mobility and Core-Periphery Division  

The results of the European Parliamentary election on 25 May 2014 should not have come as a surprise to the EU leaders, especially to Germany’s conservative Chancellor, France’s Socialist President and UK’s conservative PM, all linked together by their commitment to globalization, neoliberal policies, and strengthening the corporate welfare state at the expense of the social safety net and downward socioeconomic mobility of the middle classes. That Marine Le Pen’s ultra-right wing, a camouflaged neo-Fascist xenophobic political party, won 25% of the vote and became the resounding winner indicates not only a problem for France’s debilitated Socialist Party that is hardly much different in its economic approach than any European conservative party, but Le Pen’s (Front National) FN party victory signals a serious political problem for all of Europe. If we consider that extreme right wingers in the UK, neo-Fascists and neo-Nazis across Europe increased their popularity in the EU elections, as did leftists outside the confines of the traditional leftists - Socialists and Communists - then we must ask what policies are at fault for the anti-EU and Euro-skepticism sentiment that has become so strong.   

One could argue that with 10.5% official unemployment, a steadily decline in middle class and workers’ incomes, and lack of prospects for the youth the EU election results are not surprising. After all, during economic contractions sociopolitical polarization is expected, even if there is no illegal immigration issue confronting society as there is in Europe’s case with roughly 140,000 people entering every year. The Great Depression of the 1930s brought onto the political arena as movement and regimes ultra-right elements across Europe, not just in Fascist Italy and Nazi Germany, while France and UK maintained their pluralistic liberal bourgeois systems. In 2014, after several years of recession that has cut deep into middle class living standards and eroded not just working class wages and benefits, but contributed to rising unemployment and dim prospects for upward socioeconomic mobility, what could people do except to seek solutions in the extreme right wing that offers fantasy of immediate solutions of strong nation with which people identify, and to the left that promises greater social justice. An unemployed professional, a small store owner, a college graduate unable to find a job may not have much money or great prospects for themselves and their children, but they embrace themselves around the mythology of the strong and pure nation-state free of foreigners, gypsies and Muslims who are the scapegoats for all calamities of Europe.

This is not to say that the EU is in imminent danger of falling under the control of the ultra-right wing. After all, the EU Parliament has some influence but not a determining voice in national policies. Moreover,
conservatives and socialists between them hold a majority, while the small varieties of leftist and right wing parties are fairly divided and cannot really do as much damage as Marine Le Pen has announced by blocking the will of the majority. However, the mere presence of so many anti-EU right wingers, so many varieties of leftists who either want an EU committed to workers and the middle class instead of the banks and multinationals makes Chancellor Merkel and EU supporters very uneasy. Europeans against the EU or wishing a different model of integration perceive a threat to national sovereignty by the hegemonic German economy and state working behind the veneer of EU institutions that do not represent the will of the majority. That France has elected a neo-Fascist party and Greece a Socialist one (SYRIZA) sends a message to the EU of how polarized Europe has become as a result of the deep economic recession and austerity regime. This is not to suggest that the EU is about to break up or even change very much from its current neoliberal/monetarist policy orientation. After all, new nations like Ukraine are eager to join, as the behind the scenes manipulation that has been unfolding throughout 2013 and 2014 reveals. Nor is the EU about to become unstable and its reserve currency about to weaken along with its global trade relations because of political polarization at this early stage. The question, at least for now, is what happened that things have gone so badly for the EU mainstream political supporters. 

It is not just the deep recession of 2008-2013 that contributed to the socioeconomic polarization reflected in the political arena, because if there were continued prosperity and a solid social safety net we would not have polarization in Europe. Below, I will briefly analyze the changing integration model that is at the core of the problem for socioeconomic, political and geographic polarization in Europe. In addition, I will look into the image that the EU projects as the super-powerful entity spending taxpayer money to strengthen banks and large corporations, while weakening the social safety net once strong in the EU and the envy of many countries. I will also examine the issue of collusion between public and private sector corruption that many see as a product of the mainstream (conservative and socialist or labor in the case of UK) political parties that appear different in modalities but are following the same economic and social policies. Finally, I will examine the question of nationalism and identity in the age of globalization to determine the role it played in voters choosing Euro-skeptics, right wingers of various types and leftists. 

Changing Integration Models: From the "inter-dependent model" to the "patron-client model"
The European Union was founded on principles of solidarity, common values based on human rights and social justice, and a sense of greater equalization across national borders under what I call an interdependent integration model. The ideological and political foundations for the EU integration model were laid down before the downfall of the Communist bloc and globalization that swept the international arena and became institutionalized in the 1990s. This is not to say that the EU integration model of interdependence did not have as a goal strengthening the EU economically and politically at the expense of countries outside this economic bloc. However, the EU was not as aggressively imperialistic as the US toward its Latin American neighbors in the last one hundred years operating under the patron-client integration model, or the Sterling Area that the UK used as a means of maintaining its supremacy even after its former colonies secured their political independence.

From the very inception of the EU, the integration model of interdependence was clear that the stronger economies of northwest Europe, especially Germany, would be providing capital in the form of loans, subsidies and grants to the weaker periphery southern and eastern members that lacked the ability to compete economically under a strong reserve currency favoring the core nations of the EU. This meant massive spending on infrastructal development, but also some funds for the primary sector of production as well as tourism. In return for ready access to capital, the periphery EU members would be the consumers of products and services from northwest Europe that would also enjoy cheap labor, cheap land, and natural resources from its southern and eastern neighbors. No doubt, the major beneficiaries in the periphery nations of the EU would be the larger enterprises especially those linked to EU commercial interests, but with some protection and benefits through various programs accorded to small and medium-sized businesses. Such a model, its advocates argued, would actually result in greater trade within the EU and it would result in greater upward socioeconomic mobility. 

The EU integration model in the last five years has caused many people across Europe to realize that Germany has emerged hegemonic and essentially the periphery members have been reduced into quasi-colonies within the union. This is exactly what some politicians in Spain, Portugal and Greece have been saying, but even the nationalistic right-wing Silvio Berlusconi agrees with this assessment, as do leftist politicians across Europe, even the French and British nationalists. If Germany is using the EU as its economic empire in order to compete effectively in the world, what is in it for the rest of Europe? When people across the Southern and Eastern European regions opted for integration with the EU they hardly expected that their countries would be the Third World within the economic bloc, something that is becoming a reality and on which Germany insists. 

EU as an instrument of Corporate Welfare Capitalism
The global economic crisis for the EU started in 2008 and became a debt crisis for the EU when Greece entered under an austerity regime under the extremely corrupt PASOK - Socialist Party turned neoliberal  - in 2010. Soon thereafter followed Portugal and Ireland, with Spain and Italy flirting with becoming mere dependencies of Germany that determined policy for all EU. Many people became convinced that the EU existed not to safeguard the interests of European citizens, but those of the banks and large corporations to the detriment of the declining middle class and workers suffering loss of labor rights amid lower wages and benefits and higher unemployment. If we consider that the root cause of the financial crisis rested with the banks that the governments and EU central authorities should have been watching and regulating much closer, then the common sense answer for everyone from Madrid to Rome is that those responsible for the crisis must pay. However, the EU, in cooperation with the International Monetary Fund (IMF) imposed austerity, officially in Portugal Greece and Ireland, unofficially in Italy and Spain and gradually across all of Europe as part of an effort to strengthen banks that were responsible for the financial crisis in the first place, partly owing to corrupt and illegal practices for which they paid token fines to European governments and US if they had operations there. 

As the supposedly neutral arbiters for society, politicians opted to strengthen not just banks during the deep recessionary cycle that started in 2008, but they used austerity measures as a means of transferring massive wealth from social welfare programs to corporate welfare, and from the periphery EU members to the core. At the same time, governments used austerity as a means to sell lucrative public enterprises to private concerns invariably linked to the ruling political parties (clientist politics), invariably at low cost and to the detriment of the public interest and taxpayers. Privatization schemes that had started in the Reagan-Thatcher decade accelerated in the last five years (2009-2014) in EU because politicians argued this was the way to “save” capitalism and return society to growth and development. After all, the state was corrupt and horrible manager, though the same corrupt and horrible managers were in charge. The result has been higher costs to the taxpayers for services wherever private enterprises have taken over public concerns, in everything from utilities to transportation. No matter the neoliberal propaganda, many Europeans see privatization as something that helps specific corporate interests within the periphery EU members, but also benefiting German and northwest European core EU members to the detriment of the rest. 

Corruption: Public-Private Sector Collusion 
The level of corruption in banks, insurance companies, pharmaceuticals, industrial giants like Siemens, GSK pharma, Deutsche Bank, Royal Bank of Scotland, and dozens of others. has not been a secret any more than the consequences of such corruption scandals that usually involve public officials. When governments employed Goldman Sachs to “cook the numbers” so that public debt appears as an asset on the books instead of a liability, EU officials in Brussels knew about it but did nothing. After all, many EU public officials have past linked to corrupt financial institutions, including Mario Draghi who worked for Goldman.Eventually, the EU discreetly asked member countries to stop employing Goldman and "cooking the books", but the legacy was enormous public debt, much of it the result of massive bribes spread all around to various officials. 

Besides official-private sector corruption that helped create the debt crisis, the parasitic defense sector was another favorite, considering that the core EU members were the sellers and the periphery the buyers. Everything from tanks to submarines was among the most notorious in bribery schemes, everything from government purchases of buses to signing privatization deals involved bribes, resulting in massive markups for often defective hardware. Meanwhile, to make up the gap in public finances that parasitic defense linked to corruption created governments borrowed and added to the public debt that firms like Goldman Sachs made it appear like an asset; that is, until the deep recession of 2008 hit the world and the Greek crisis spread across Southern and Eastern Europe. Only then did EU officials, the same ones turning a blind eye to massive corruption, argued that austerity and neoliberalism is the medicine for public debt problems.

Ordinary citizens read in the press and watched on TV story after story of scandals involving bribes, corruption schemes about which EU officials were fully aware, and all along, people observed the enormous salaries and luxurious lifestyles of EU officials who imposed austerity on workers and the middle class. Without shame or any sense of reality, the same EU officials lecturing ordinary citizens on how they must endure austerity for the good of society - no mention of shared sacrifice by EU officials who were themselves responsible for lack of oversight regarding public debt schemes and corruption scandals. This did not go unnoticed with many people who viewed the elitist EU officials as well paid servants of banks and corporations, rather than servants of the public good for all Europeans. The same officials imposing austerity across Europe invoked the propaganda term democracy and freedom at a time that their actions were authoritarian veiled under the constitutional cover of the EU. This until many people began to doubt the very constitutionality of the EU and its authoritarian nature, and more recently the blatantly open backing of neo-Nazis in Ukraine, while condemning neo-Nazis inside the EU.

Nationalism, National Sovereignty and Social Justice
From John Locke in the 17th century to John Stuart Mill in the 19th century, political philosophers argued that citizens voluntarily surrender their autonomy to be under the social contract because they assume the state will afford them basic protections and services. The question of course is which people or social classes does the state represent and which does it oppress? Just as people understand that surrendering their freedom and autonomy to live under laws of a state entails benefiting from all the organized state has to offer, similarly nations surrendered their national sovereignty to the EU and subordinated their nationalism to their European identity in exchange for some benefits. But what if the benefits outweigh the detriments, or the benefits accrue to a very small group of people within the member state? 

Besides the sense that EU members have surrendered national sovereignty and by extension they have compromised their national identity for few benefits falling onto the lap of the domestic socioeconomic and political elites, there is the larger question of what the future holds for member states, even larger countries like France that in essence play second fiddle to Germany. Is cooperation much better within the EU than competition outside of it, as nationalists contend? Clearly, politicians of the far right are selling fantasies of a strong nation-state against the evil EU behind which is German hegemony, a strong symbolic presence given its legacy of two world wars and its Nazi past. Anti-EU politicians realize as much as the pro-EU neoliberals that Europeans have no choice but to trade with each other just as the US trade with its neighbors. But the question is one of degree of strength as a nation state inside or outside of the EU. 

The immigration from outside the continent and internal migration (Eastern European, and especially gypsies) issue that has inflamed the right wingers, including neo-Nazis and neo-Fascists targeting Asians and African, especially of Muslim faith, is one that the EU has helped create. If we focus on the numbers of illegal immigrants, we see that most come from Syria, Iraq, Afghanistan and Libya, all countries that the US and its northwest EU allies invaded and caused such tremendous social disruption to society that people have been fleeing. This is something about which both the rightists and the leftists agree, just as they agree that the Ukrainian crisis is the result of US and EU overt and covert intervention, and not just Russian imperialism Ukrainian ethnic differences. In other words, people within the EU recognize that the foreign policy of the bloc is an extension of US policy that causes tremendous disruptions and instability in Africa, Middle East and Eastern Europe, thus causing a massive refugee problem. While it is true that the Europeans have a long history of conflict among their own nations and they do not really need an external player like African and Asian illegal immigrants to remind them of their strong nationalistic tendencies, the ultra-right wing mythology of the pure super race of white European appeals to a segment of the disgruntled population. 

Finally, there are the leftist critics who point to the erosion of social justice in the EU that was once on the forefront of protecting all social classes, minorities and defending human rights. Leftists are also concerned that EU operating under the NATO military structure remains essentially the junior partner of the US, thus lacking its own defense and foreign policy. Defense spending is hardly the sole cause for the debt crisis, but it is an area that contributed and one where we find most of the public-private sector corruption, as well as an area that shifts money from social projects intended to strengthen health care and education. That the EU has been carrying out policies as though it is the instrument of the European Central Bank working on behalf of private banks and corporations has further strengthened the argument of the leftists who believe there can be no social justice within the bloc any more than national sovereignty. 

Leftists also recognize that EU mainstream politicians are responsible for strengthening the ultra-right wing with policies targeting illegal immigrants, gypsies and Muslims, especially in the northwest core nations. The mainstreat EU politicians have played right into the political propaganda of the far right and alienated the left by ignoring human rights whenever it is convenient as in the case of Muslims, gypsies and Africans. Social policy of the mainstream EU parties has not been that far off from those of the ultra-right with which the conservatives are competing for votes at home.

It took many years, decades, for political leaders to convince their citizens that EU membership was good for everyone and not just for banks and multinational corporations based mostly in northwest Europe. It has taken a relatively shorter time for people to judge for themselves the degree to which the EU best serves the interests of all people in all the member states. As far as many ultra-rightists are concerned, the EU has been eroding not just their living standards and prospects for the future, but the cultural purity of ethnic and national identity many see as part of their personal identity. If they will be poorer in the future, at least they want to hold on to the myth of ethnic and cultural purity, whatever that means to varieties of people, from  neo-Nazis in Greece to ultra-nationalists in the UK and Denmark and Holland.

The EU always had opponents, but they are a small minority largely because the promise of national integration under the strong dynamic bloc offered the prospect of better economic conditions for the members and its people. There has been a growing realization that the EU best serves its strongest members, especially Germany that has prevailed in monetary and economic policies imposed on the weaker periphery members, while leaving segments of the middle class and workers disgrtuntled and without much confidence in the EU. The skepticism of whether there are really any benefits to the national economy and society as an EU member, or if membership really serves the domestic financial and political elites as well as the core EU members, especially Germany, is an issue that cannot be overcome with propaganda, but rather substantive policies resulting in real changes across Europe. 

Such changes will not come because the powerful banks, insurance companies, pharmaceutical, defense, and other multinationals are behind the regimes of Europe and they resist any change in the patron-client integration model, and in making a commitment to social justice by strengthening the middle class and workers that have suffered high unemployment and major cuts in living standards. Along with some programs to reduce unemployment by strengthening businesses and providing even greater tax and other incentives to corporations to hire and keep workers, there will be a major propaganda campaign for people to support the EU. The result will be continued rise in the right wing and left wing political parties and disparate groups that want their countries to leave the EU or they demand a different integration model.  Geographic, social, economic and political polarization will continue in Europe, with mainstream political parties adopting policies of authoritarian regimes but defending them as “democratic”. 

The contradiction of the EU is that it is trying to project itself as the most desirable bloc with the strongest reserve currency on earth, as it tries to attract new members in Eastern Europe, while at the same time, it is chocking off grown and development within the periphery areas precisely because it has a strong currency under monetarist policies and neoliberal course of privatization and corporate welfare programs undercutting the middle class as the popular base of a democraci society.
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