Europe’s Uncrowned Leader
“Total German triumph as EU minnows subjugated,” The Daily Telegraph headlines a report by Ambrose Evans-Pritchard on Chancellor Angela Merkel’s latest diktat. Whoever wants credit must fulfill our conditions, she declared. Her conditions amount to capitulation by three vulnerable states on core policies, and further erosion of sovereignty for the rest of the eurozone.
For Greece, Evans-Pritchard explains, the terms include a fire-sale of €50bn of national assets within four years—a tenfold increase from what premier George Papandreou thought he signed up to a year ago—and include state holdings in Hellenic Post, Hellenic Railways, Athens Public Gas, the Pireaus port authority, Athens airport, Thessaloniki water, and ATEbank. In return, Chancellor Merkel has agreed to a slight reduction in the penal interest rate on the EU share of Greece’s €110bn loan package and stretch the maturity to 7.5 years; but “[t]his does not restore solvency. Greece’s debt spiral is too far advanced. The debt load will approach 150pc of GDP this year, and debt service costs are 14.4pc of tax revenue.” Coupled with 15% unemployment rate (closer to 40% among the young), the mix is politically explosive.
For Portugal, the condition is more austerity. “Pensions, welfare, and health will be cut, following wage cuts already under way… Fiscal tightening of this magnitude in a country with public-private debt of 330pc of GDP, an over-valued currency, and reliance on fickle foreign financing, is not a happy prospect.” For Ireland, one condition is to give up its 12.5% corporate tax rate. This comes on top of an “exorbitant” 5.8% interest on the EU rescue package—a rate “suffocating for an economy in the grip of core deflation, already reeling from a 22pc contraction in nominal GNP.” Overall, Evans-Pritchard concludes, we are witnessing a new stage of “economic integration on Teutonic terms, but without the prize of shared debt liability”:
Just as eurosceptics always feared, monetary union has led to a state of affairs where—in order to "save the euro" as Mrs Merkel puts it—Europe’s ancient states find themselves having to accept a quantum leap towards political union and a degree of subjugation that would not have been tolerated otherwise. There is no democratic machinery to hold this central system to account since the European Parliament lacks a unifying language or demos, and remains a technical body in practical terms. Raw power is shifting, but to whom exactly? It is as if Merkel has somehow been crowned Magna Mater Europae by the Consilium, behind closed doors.
The British analyst’s summary is accurate. This is not how the experiment with monetary union was supposed to work, however. Back in 1990, the euro was a French idea, the late President François Mitterrand’s condition for his approval of Germany’s reunification. In theory it was supposed to remove exchange-rate risks from the eurozone market, reduce the costs of transactions, stimulate cross-border trade, create an area of monetary stability, and force member countries to practice fiscal responsibility. The unstated intent was to curtail the power of the Deutschmark and to bind reunited Germany more closely to Europe.
A decade ago the scheme worked to the advantage of the periphery. It was possible to obtain loans in Athens, Madrid, and Dublin at interest rates as low as those in Frankfurt. The result was a period of rapid growth in the south and German stagnation. The “PIIGS” (Portugal, Ireland, Italy, Greece and Spain) used the cheap cash not to modernize their economies, however, or to increase their competitiveness, but to finance speculative projects and to indulge in excessive public and private consumption.
In the long run this proved to be an unexpected blessing in disguise for the Germans. Their manufacturers realized that they had to become more efficient and globally competitive. Workers had to endure years of flat wages and high unemployment, but since 2007 Germany’s export-led economy has continued growing in spite of the crisis, and her superior quality products are successfully competing with those of the Asian Tigers. Her budget deficit will drop to zero in 2014, and her budget will likely move into the black thereafter. A conspiracy theorist may argue that the Germans had known all along that the euro would create a captive market for their export juggernaut. The southern periphery could no longer protect its domestic markets by resorting to occasional devaluations vis-à-vis the Deutschmark. At the same time, because of stagnant German wages there has been no offsetting demand north of the Alps for southern goods (food, oil, wine, textiles, coastal real estate) or services (tourism). The growing trade deficit was bridged by northern banks supplying loans for southern purchasers of German goods.
Portugal, Ireland, Greece and Spain are now caught in a triple bind: their exports cannot grow because they cannot be boosted by devaluation; their domestic demand cannot be stimulated because of draconian austerity measures; and their economies are additionally burdened by high interest rates on huge, German-led rescue packages. By design or by default, Germany appears to have created a new European order. Decisions made in Berlin and Frankfurt are affecting the economies of some half-dozen peripheral countries inhabited by a hundred million people.
In the long run this is but a Pyrrhic victory for the Germans. Eventually they’ll still need to write off a significant portion of southern debt, but this would set a precedent that would undermine the credibility of the eurozone. Even less acceptable alternatives entail allowing higher inflation rates all over the zone, or else continuing with large net transfers and ad hoc rescue packages when crises erupt. Squaring the circle of operating a single monetary policy and uniform interest rates for a widely different group of countries will continue to produce periodic emergencies all along the periphery. The alarms will take different forms at different times—a fiscal crisis here, a banking collapse there, a property slump everywhere—but like the erupting lava finding its way through the Earth’s crust, the crises will never stop and can never be resolved.
If the eurozone is abolished—or perhaps after it is reduced to its northern, hard-currency, inflation-free core—it will be possible to recreate a self-adjusting exchange-rate mechanism that reflects different countries’ economic efficiencies and fiscal policies. Once it is accepted that the euro has always been a political project not justified by economic considerations, Germany will no longer be obliged to go on “helping” the EU periphery, and southern Europe’s historic small nations will be free from the unloved Leaderin’s coldly suffocating embrace.
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The American educated George Papandreou and former head of the Socialist International has proven to be a complete glove puppet of German banking interests. Frau Merkel does indeed appear to be pulling the strings. US Treasury Secretary Tim Geithner shocked the British Telegraph yesterday with his statement that the Obama Administration is open to a new global currency. It should be noted that Estonia is running a tighter fiscal policy than southern Europe or the United States. Corruption greatly increases the cost of government.
So far, Greece and Hungary have proven to be the only countries where riots happen when it is discovered that the government has "shockingly" lied. Perhaps other nations accept lies. The German reaction to Defence Minister Gutenberg's false doctoral dissertation was a telling positive about German culture. In America, holidays are named after individuals who have done the same.
^^
I am sure people in other nations don't accept lies, but simply have the patience to endure and move on, without wanting to burn cars on the street. The French, British, and Germans are more civilized than some of the crazies in Greece.
Greece seems to be a hotbed of violent radicals, such as the Cells of the Fire Conspiracy of Athens and Thessalonica and others. They hope to terrify governments into submission to demands by attacking police officers, government headquarters, and business interests.
What is amazing is that attacks by these anarchists outnumber attempted or successful Islamic terror attacks by a factor of 40 (as per EU Terror Trends report). The recent crisis in Spain, Italy, and Greece has fueled support for spinoffs of Red Brigades and Catalonian anarchists, who hope to recruit unemployed men into their nihilistic pyromania.
And one place where such violent attacks don't happen is, ironically, Estonia, which has had the most brutal liberalisation ever imagined. And Estonians love it and want to continue voting for that same leader.
And now that Estonians will never be dependent on credit from EU, they can laugh all the way to the bank.
@Prateek Sanjay
Greece is not a hotbed for violent radicals, I don't rank terrorism as one of my country's most serious problems. The huge public sector, with it's crippling bureaucracy, the widespread corruption, and above all, the lack of social responsibility among the citizens, are far more critical issues.
Most Greeks are beginning to acknowledge the wrongdoings of the previous era, that lead our country to this woeful situation. Don't be deceived by small violent gangs, left leaning political rhetoric, or by the public servants' strikes. The silent majority, that suffers the most, wants reformations for a better future.
It's poetic justice that, the ruling party PASOK, has the daunting task to implement all those IMF and EE imposed austerity measures. Mr Papandreu's party has to class with interest groups, like public servants, that consist their voters' base. Many privileges given to them, in order to gain their political loyalty, have to be taken away...
Wasn't something like that the idea of Adolf Hitler, or we were just led to believe so?
Besides, Germany seems to have magical reserves of liquid capital in every given moment throughout recent century. Reserves so big that it bails itself out of two major World Devastations but not as a winner but as an ultimate loser, or so we were led to believe. At the moment, Germany is able to bail, (reposses, extort?) all the little PIIGS (in form of five European countries which had been forced into that "union" by "democratic means" as we should all HAVE to believe).
Impressive? Well, it is rather strange to me however unimportant my doubts would be. One thing is clear though: since there is no smarter or more able leadership displayed anywhere else on this planet (the one that actually works that is), the rest of us have two options: we all start learning German ASAP, or we pass some Resolution somwhere and bomb Germany to oblivion (but this time more resolved please).
Mr. Milosevic,
Why is the Germany economy so strong despite being on the receiving end of 2 World Wars that Germany lost?
There are two principal reasons:
1. The Germans are disciplined, industrious people who combine business smarts with a strong sense of social solidarity. Such a people tend to bounce back from extreme adversity better than others.
2. The German big capital in both World Wars was always closely intertwined with that of the Anglo-Saxon Powers who were on the winning side. First London, and then increasingly Washington-New York wanted a Germany that could not overtake them but that was still strong enough to act as their primary European partner.
I would also kindly suggest that we stay away from fantasies about marching on Berlin for a third time. For one thing, the Russian elites, for all their sympathy for the tough little Serbs, see Germany as their foremost strategic power and will want no part of it. European history strongly suggests that if the Russians do not join in, the united Germans cannot be beat.
#4
Well, Adolph Hitler wanted Germany to be a self-sufficient, independent autarky that had enough resources from conquered territories.
Today's Germany is rather one that gains more from outward reach and globalization, and has gained far more economic power without a single foreign territory occupied. And it's good for them too. Germany soared past the recession, with astonishing industrial capacity and job creation.
#5, last paragraph, "...see Germany as their foremost strategic partner".
#4 Mr.M.: Envy is the nastiest, the meanest of the deadly sins; it's only satisfaction is endless self-torment. It must always try to level what it can not emulate. The gossip column and conspiracy theories are the symbols of an envious age. The dullards envy of brilliant(lucky) men is always assuaged bt the suspicion(hope) that they will come to a bad end. "Stirr'd up with envy and revenge..,"
#8
Mr. Kenny, while I appreciate the wisdom you have acquired in the 70 years of your life, have you considered that when speculators "attack" some bonds, they are just reacting to the circumstances and not generating them?
Speculators, by definition, only buy because they intend to sell. They can't drive up prices by themselves; they only bid higher, because they know the prices are going to higher one way or another. If that isn't so, they lose money. And speculators start selling cheap, only because they know the prices are going to fall anyway and they'll lose more money.
I think it may be too much of a - I don't want to say it - conspiracy theory that American financial speculators wanted to destroy the European Union and thus deliberately tried to lose billions of dollars in order to do so. Either financial institutions are staffed by evil geniuses who commit arson on their own houses to make more money in the long run. Or those people are incompetents that couldn't hedge against a housing crisis. But we can't have it both ways.
Seems to me another example of big power politics at work. Or, said differently, to matter politically and economically, a nation must be of a certain scale. In the EU, Germany and France have the loudest voices because they have scale of population, military, land, and economy. They may exhibit different cultural traits but whatever the case the PIIGS and other hangers-on tiny states are treated dismissively as provinces at best and as criminals at worst.
What's very interesting though is that Germany is still very much an occupied country. When the Albanian terrorist decided to shoot up a military bus at Franffurt airport a couple of weeks ago, it appeared that the German police cordoned off the area until an armed contingent of American military police arrived to investigate.
Germany's one act of indpendent military assertion these past 60 years was when the US deemed them useful in the Balkans. In this matter, because US policy shifted 180 degrees from its historic stand, Germany was permitted for a third time in one hundred years to attack Serbia in Germany's eagerness to violently dismember Yugoslavia.
In this regard, Mr.Schulz, in his conjectures, may consider that Mr. Milosevic may be driven more by a sense of outrage or even revenge rather than envy. The consolidated German nation since its inception seems to have regarded a Slavic country of any scale in the Balkans as a threat to it and acted to thwart such a development by any and all means, including outright vicious asault and genocide.
For all their many merits - including their indsutriousness and social cohesion - the Germans have also displayed many serious deficiencies and barbarities since their consolidation from principlaities and dukedoms to a one giant nation...an act they themselves have aggressively sought to deny their Slavic neighbors whenever possible.
#10,
"Speculators, by definition, only buy because they intend to sell. They can’t drive up prices by themselves; they only bid higher, because they know the prices are going to higher one way or another. If that isn’t so, they lose money. And speculators start selling cheap, only because they know the prices are going to fall anyway and they’ll lose more money."
That is only true if you have a market full of relatively equally-sized participants with relatively equal access to information. It is no longer true if you have a few big players with vastly superior information and who can stir up a wave via derivatives (so they no longer really need to "buy" the product before they sell it) , suck in all the little investors, and then ride that wave until near the crashing point before they exit and leave the little guys in the lurch. To describe the machinations of Goldman Sachs, JP Morgan, Citibank and such in the terms of classical market participant analysis is a bit unreal.
The Germans will go east as they usually have always done, as the expansion of the EU eastwards attests. I dont think they are all too concerned with the Balkans, though I would point out that it might be in Germany's interest to have a relatively large and powerful state there in order to serve as a shield. After all, the Turks can get irritating at times.
The Germans may be shooting themselves in the foot by not working to help build such a state. No power vacuum must exist between the shores of Ionia and the Danube. Serbia would be the perfect power to serve this purpose. The Europeans are not really thinking about what might be in their long-term geo-strategic interest, in a case where the defence interests of Serbia and other Balkan states and of Germany converge.
The Germans never learnt the hard lessons of Manzikert, or of how you shouldn't attack your natural allies as happened in 1204. Instead, they joined the attack on Serbia and imported the riff raff of Turkish-occupied Anatolia. How stupid.
Mr. Kenney,
" The aim of Wall St’s attack on the euro was to attack country after country, thereby running up a huge bailout bill and leading to an anti-euro revolt in Germany. That blew up in the “plotters” faces! The attacks lowered the value of the euro, thereby generating an economic boom in Germany."
What is even more interesting is who set the fuse for the blow up?
Pay back is awful in this business. It easy to see these linear plans up to a point i.e. Wall Street watching Soros, watching Euro, watching wind falls, but there is always at least a few left watching who? --that is always the real game.
Wikileaks documents suggest it is the German CDU's coalition parter, the uber-neo liberal Free Democrats and its "extravagant" leader Guido Westerwelle, that is keeping the Luftwaffe out of Libya, unlike its bombing of Belgrade in the 1990s. Military adventurism costs countless euros and the Germans are savers.
The only example of the Catholic right in Europe ironically is in Lutheran, rural Finland, which is posed to elect on April 17 in a coalition a devout Catholic named Timo Soini, the leader of the True Finns who oddly looks like Drew Carey. Pia Kjaersgaard of the Danish People's Party is showing its commitment to ethics by vowing to recognize Taiwan. She is sort of a Danish Lutheran version of Marine Le Pen.
Mr. Jonathan,
Thank You for reading exacly what I wrote.
Regarding Your first reason: there are many Nations on this planet that are disciplined and industrious but only Germany is a Phoenix.
Regarding the second: that and more I had in mind when I felt compelled to contribute to this topic.
Last line was just a consequent sarcasm which is strongest part of my nature. I have been the stongest oponent to ANY bombing of ANYTHING all my life, most probably due to the fact that my birthplace, Beograd, holds the record in the category.
Furthermore, envy is something I, and many other Serbs have yet to discover as a personal feeling. Consequences of being envied, on the other hand, we know all too well.
#13 "The Germans will go east as they usually have always done, as the expansion of the EU eastwards attests."
Mr. Wilson, this is the most interesting dimension of contemporary German policy. The Germans are very pragmatic people. After being crushed twice for being too impetuous in their ambitions, it seems that their leaders now understand that to rise a third time will require a more indirect method. While the German political elites played the obedient vassal to the Anglo-Americans (providing intelligence on Iraq to the US in 2003 while simultaneously supporting French diplomatic opposition to the war), their economic elites have gradually built up an immense community of interest with Russia (as their largest supplier of energy) and also with China (as the largest market for their indispensable advanced machine parts). At one time, German economic penetration of Russia was seen by the Anglo-Americans as a useful way to keep Russia under US influence. But now it is increasingly unclear who is being pulled towards whom. This economic Eurasianism is the new Drang Nach Osten, and it remains to be seen how it will square with the existing Atlanticist networks of influence in Germany.
Ah yes, one more thing. I mentioned in an earlier post that the German BND is said to be backing Albanian separatists throughout the Balkans.
In addition, Germany has also cultivated increasingly close military relations with Israel.
Germany seems to be a country whose ruling networks are trying to keep a foot in every camp. But this kind of "every face to every interlocutor" policy must necessarily be transitional. At some point, the German elites must come to a new consensus or there will be complete chaos within their ranks.
#13. "At one time, German economic penetration of Russia was seen by the Anglo-Americans as a useful way to keep Russia under US influence. But now it is increasingly unclear who is being pulled towards whom. "
Germany is easily the most important overseas alliance we have, rivaled only by that with Japan. It is critically important that the respective leaders and elites keep American and German interests aligned and the alliance strong. The rest will fall into place. I think the Germans understand this also. So long as that core alliance is strong it will be Russia that will be pulled. Not just because of Germany, but because of the countries that lie between them.
You're right, Johnathan. I remember how, back in 1990, some German politicians expressed a desire to reunite Germany according to her 1937 borders. Then they either shut up about it or were made to, so that Germany would be allowed to reunite at all. Sooner or later this issue will rise again, and it will likely happen after the elites reach their consensus.
As the EU begins to crumble, she may well jettison that yoke and take on this issue in earnest, in the indirect way you have described, unless, of course, the EU yoke must be maintained as a convenient cover to mask her eastern aims.
It will be interesting to see when they decide that the indirect approach can be discarded and they can be more up front with their territorial revanchism.
I had thought that the old Eastern deportee lobby in Germany had largely withered by now. But then again, in the long run, it is probably a safe bet that the national self-loathing imposed on the Germans by their Allied conquerors will be lifted and the long-term trends of German history will return to the fore. After all, all of Europe is in the grip of growing ethnic separatism and territorial irrendentism. Just look at the Catalans, the Flemish, the Hungarians, the Slovaks, and so forth (according to Pierre Hillard, these movements have all been financed by the Germans!). The continuing economic crisis could be the perfect storm for the Germans to join in on this general trend.
However, I would add that I am skeptical that the old visceral anti-Slavism will be back. There is another geopolitical tradition in Germany, suppressed by both the Hitler faction of the Nazis and later by the Western Allies, that had always favoured entente between Germany and Russia.
Jonathan, multi-billion dollar players such as Goldman Sachs and JP Morgan are still small fish in a trillion dollar market.
Japan's Mizohu was a bank with profits exceeding GDPs of Australia and New Zealand put together. Largest bank in the world. It went bust some years ago, with its stock falling by 93%. Small time player that easily got its fingers burnt trying to play a market several times its size.
The likes of GS and JPM come and go. Do remember it was relatively recently that GS went public, and it only replaced the likes of Barings Bank, that were far larger than it ever was. They all just come and go, even billion dollar businesses.
Individual oligarchs may come and go. When they go it is because the other oligarchs did them in (i.e. Lehman Brothers). The oligarchy itself remains.
Of course the total amount of money in financial markets far exceeds the available reserves of any single player. If that were not true there would be no point for the big players to play the market because they would just be stealing their own money.
The key issue is the extreme information asymmetry between the great mass of little investors and these big players. You basically have a massive flock of sheep and a few wolves. What "efficient markets" hypothesis essentially argues is that the sheep are just as perceptive as the wolves and have the numbers to trample the wolves if need be. But in reality, the sheep are deaf, dumb, and practically blind, and can be led around by the wolves at will.
Furthermore, under present conditions the financial markets are more oligarchic than ever. Why? Well let us consider why these markets are still afloat rather than crushed by the weight of God knows how many zillions of compromised derivatives. It is because the US Federal Reserve has dropped interest rates down to zero to allow the major financial institutions free credit. That is the real "bailout", not the chump change the US Congress had been fulminating over. The US Federal Reserve of course, is not controlled by the formal US government, nor by the masses of little investors in the market, but by a cartel of major financial institutions.
Information assymetry is one thing, and quite valid, but...
but...
Well, it's a metaphysical point about uncertainty. Other than known knowns, and known unknowns, there are unknowns unknowns.
For example, a few expert mathematicians were asked to calculate the probability of a particular thing happening after seeing a few repetitions of it. They all had to make statements of the type: "I am 95% certain, the value will be between X1 and X2."
Obviously, in order to be 95% certain, they had to stretch the upper and lower limits wide apart. Still, the 5% margin of error came about 45% of the time.
Much the same way, financial institutions can never have enough information for reasonable prediction of the future. There is another compounding problem. Human behaviour is uncertain. A market player acts on behaviour of other human beings, so his own behaviour is also uncertain. And progressively, the behaviour of every other market player is uncertain. Unless we can read thousands of people's minds at once, it is playing in the dark. Their best chances are to make a dozen bets - one of them turns up right and they make a lot of money.
Berkshire Hathaway said that if one removes their top 10 best gains, the rest of their historical portfolio shows enough gains to only break even after adjusting for inflation.
That uncertainty best applies to the maneuvers among the top players in the financial markets themselves. But there we do not have thousands of players, just a few dozen at most.
Furthermore, I do not see how it applies to the mass of little investors who make their decisions based on what the financial press tells them the "market" (i.e. the big players listed above) seems to be doing.
The key point is that Goldman Sachs and its peers do not need to predict the future per se, so much as to create enough movement in the markets to foster a general belief among investors about what will happen in the future.
To bring our discussion back to Europe, Goldman Sachs did advise the Greek government about concealing the level of its debt to begin with. That should have provided them with pretty good intelligence about which way things would go.
In German elections yesterday in Saxony, a middle of the road CDU-SDP coalition was re-elected, even though the Left Party (Ex-Communists) received more votes than the Social Democrats. The fascist NDP only received 4.5 percent of the vote and will not be represented in the regional government. Also announced yesterday, ATT is going to pay $39 Billion for Deutsche-Telecom USA, (T-Mobile.) Seems only fair considering the Germans are buying the N.Y.S.E.
Left of center Der Spiegel was chosen as the outlet for photos of American soldiers posing with dead Afghan children, as if they were whitetail deer. St.Augustine's ban on the targeting of civilians has been ignored many times, from Sherman to Dresden, and now reaches a new low. The New York Times that once boldly published the Pentagon Papers, now asks permission of the White House before publishing Wikileaks documents. It may be why a foreign media outlet was chosen.
After all, the Turks can get irritating at times.
Mr Allen Wilson is penetrating and learned in his entire address; however I must comment on the remark quoted above. To my judgment, the natural governing nation of the Near-East is Turkey. The Iranians, whilst bold and constant in the defence of their country against Liberal Modernity, are apt to be languid and therefore unsuited to the demands of an imperial destiny supervising so many petty cavilling tribes and principalities as populate the region. That Iran professes a version of Mohammedanism damned as heretical by the Arab masses, unlike Turkey's orthodoxy, is the decisive bar to her further ascent. Since the Seljuks, Iran has been second to Turkey in territory and success at arms.
This is rank conjecture with none of the inspiration of a Tiresias, but it is probable that a future alliance of the natural governing nations of Europe - Germany, Russia and a de-Sarkozied France - (Britain is finished even in Europe, and the 'Anglosphere' is following America off the precipice) may negotiate for the cession of Turkey's last European possession in exchange for them allowing the Turks a free hand in the Near-East. Similarly, the Turks are the fit choice for overseers of the mostly Moslem and Turkicised Caucasus chain which has been a bloody encumbrance to Russia and is kept now for its proximity to oil and gas wells.
Geography and history would combine to appoint Austria and/or Hungary as the great states of the Balkans, but WWI terminated their prosperity. I agree that Serbia is the most vigourous and deserving Christian state to superintend the south-east; the Bulgarians and Greeks will have to be content with the evacuation of the Turks and fresh land in eastern Thrace (as per my prediction, which I don't foresee as even possible for three or so decades).
#33 My prediction presupposes what I think the good Mr Allen Wilson is willing to allow as inevitable and impending; the 'removal', either voluntary and gradual or resisted and sudden, of American 'influence' (I'm being demure), that the Jewish State will decline into impotence and be swallowed up or evacuated (expect huge swarms of fugitives fleeing Justice in either Brooklyn or Shanghai), and that as Liberal Modernity 'progresses' itself to death, the Leviathan of Liberal Modernity - Technology (useless toys and gewgaws for overgrown schoolboys)*, Urban Life (foetid cities and homogenised pig-pen suburbs), Free Enteprise (uprooting, corrupting, money-making greed), Liberty™ (whorish reign of Money; by bureaucrats, for bankers) and Free Choice© (Self-interest and egoism) - will waste away to be succeeded by the rural, paternalistic, hierarchical and organic; what is Right and Eternal.
* Man isn't virtuous so as to renounce and abstain from these evil fruits; cheap oil, which Mr Reagan taught us we were entitled to, is almost exhausted - the Leviathan will die of thirst!
"To my judgment, the natural governing nation of the Near-East is Turkey. The Iranians, whilst bold and constant in the defence of their country against Liberal Modernity, are apt to be languid and therefore unsuited to the demands of an imperial destiny supervising so many petty cavilling tribes and principalities as populate the region."
Peter, to a large extent I agree.
With open political disarray in over-populated Egypt and latent political disarray in medieval (in the negative sense) Saudi Arabia, the leadership of the Sunni Muslims in Western Asia will necessarily fall to neo-Ottoman Turkey.
On its northern front, Turkey will remain Russia's eternal competitor as an alternative transit hub for energy supplies to Europe, though the competition is likely to be more restrained once the US is no longer there to stoke Pan-Turkic fires for its own purposes. The Turkish foreign minister may eventually get his visa-free travel deal with Russia (if he has not already). Both Moscow and Ankara have discovered that their traditional animosity needs to be dialed back to manageable levels.
But to the east, I think that the Iran of today has much more potential than its monarchial predecessors, and so is not doomed to play second fiddle to the Turks. The political system left by Ayatollah Khomenei appears to be in the process of consolidation as the more opportunistic elements represented by men like Ayatollah Rafsanjani are increasingly marginalized. Its armed forces also possess a high level of ideological unity and vigour.
On the economic front, Iran is a major oil and gas supplier in its own right, whereas Turkey (even if it does annex northern Iraq at some point) may aspire only to be an important energy transit hub. Iran is also the recipient of massive Chinese investment in its energy industry as part of the latter's strategy to build a continental Eurasian energy corridor from the Middle East to China; and thereby bypass the American and Indian navies in the Indian Ocean.
As for Iran's predominant Twelver Shia religion, it does pose some geopolitical handicap, but if I am not mistaken, Ayatollah Khomenei and his heirs cannot merely be seen as the successors of the militantly anti-Sunni Safavid Shahs. Khomenei's ideology is one of struggle against tyranny, fortified by the Twelver Shia faith but not reducible to it. Its pan-Islamic appeal is feared by the Sunni Arab regimes and it is for this reason that these regimes are constantly characterizing post-1979 Iran as the new Safavid Empire, hoping to conjure up enough sectarian nightmares to keep that appeal at bay.
In short, the Arab nations are in once again in eclipse, and once the Americano-Zionist hegemon is ejected, a Turco-Iranian condominium of sorts may settle on the region. These are nations with substantial historical depth with whom the European countries will be able to come to common terms, so long as the latter manage to reclaim their own sovereign destinies first.
I am a little confused as to why we speak of modern Iran and modern Turkey as the same as ancient Iran and ancient Turkey.
There are no Turks left in Turkey AFAIK, only people of Greek, Albanian, Syrian, and Kurdish origin. The Turkic tribes of Central Asia and Russia are probably the only true Turks left.
More or less the same for Iran.
Turkey's imperial reach is likely to be limited to the Turkic-speaking peoples of the former Soviet republics and their moderate blend of Islam. China already is the power in Algeria and they build infrastructure, unlike other imperial powers and they are building a first class port in Gwadar, the Baluchistan region of Pakistan. The atheism of China is an obstacle for the Gulf Governing Council Arab states, with the exception of Bahrain, where the Pakistani diaspora could help China make inroads. If the Gulf Governing Council comes to view the Americans as permanently unreliable, France could possibly fill the void. Iran will always be the mecca of the global Shia' population, with the exception of non-Twelver, Yemen, which is going to fall quicker than Libya. Saleh's own Hamid tribe has dumped him.
Mr Arnold, I think you're right on every point, except that I dont know enough about the Turkey/Iran issue to discuss it, so I must leave it to you and Jonathan. It does look like one or the other of those two countries will be the power in that region.
Yes, once the 'hyperpower' hyperventilates, Israel is doomed, unless they can find another power to back them, but I dont see any possibilities for the time being.
I suppose one strategy for European powers, if the Middle East gets too powerful and hostile, and if it becomes a real military threat, might be to maintain Israel as a thorn in the backside of the enemy, but the cost could well outweigh the benefit.
As for Liberal Modernity, let it die.
German banking pressure has caused the resignation of Prime Minister Jose Socrates of Portugal, a Fabian socialist who liberalized Portugal's anti-Christian abortion laws, calling its Catholic heritage "backward." Socrates tried to carry water for the globalists and was rejected by the national legislature.
The French left would have to be utterly shameless to nominate Dominic Strauss-Kahn, President of the International Monetary Fund for French President. It would be as if the Progressive Caucus in Congress pushed Robert Rubin or Jamie Dimon for President.
#36, Mr. Sanjay,
The Turks have been warlike nomads for much of their history, and as such have absorbed numerous conquered peoples into their collective genepool. The Oghuz Turks may have been a small minority when they wrested Anatolia from the Eastern Roman Empire, but a small ruling minority can still have a cultural impact on its subjects far out of proportion to its size. In that sense, Anatolia has been Turkish for almost 1000 years now. The Central Asian Turks themselves are a mix of the ancient Turks, various Indo-European peoples like the Tocharians, a splash of Arab missionaries, and later infusions of Mongols under Genghis Khan. If one wants to find "pure" Turks, Central Asia is not enough. One probably has to go to Siberia, and there those Turks are still Tengri-worshipping pagans.
As for the peoples of the Iranian plateau, they have primarily been agriculturalists for millenia and have never been subject to massive population replacement. The invasions of Alexander and Hulagu certainly depopulated Iran a great deal, but one did not have vast numbers of Greeks and Mongols arriving to settle in that country as a result. Granted, there has long been a substantial Turkic population in Iran, but that population has been an integral part of the traditional Iranian society. Before the 19th century, much of the Persianate world was characterized by a dual ruling elite of Persian bureaucrats and Turkish warriors. If I am not mistaken, Christian Georgians and Armenians also often played a key military role in the old Iranian power structure.
#39 Mr. Nicoletti,
The bulk of the French Left (including most of the so-called radicals) has been shameless for at least 2 decades now, ever since the French Communist Party's share of the popular vote fell from about 20 percent to the approximately 2 percent that it gets these days (not coincidentally, the National Front's vote has increased from a meager 2 percent or so to about 20 percent during those same years!). Despite the colourful spectacle of Trotskyists, Anarchists, and so forth that one sees there, the French Left has become as much the useful idiot/willing accomplice of corporate globalization as its Anglo-Saxon counterparts.
Sarko is finished politically. The project of the reigning French elites and their Anglo-Saxon/Israeli masters is to play the old Left-Right alternance game. DSK fits the bill perfectly: a man of the historic French Left who is a creature of the same interests that backed Sarko. I find the following analysis very compelling:
Marine Le Pen is being built up as the sparring partner for DSK in the upcoming Presidential elections. Come the second round of voting, the large media organs along with most of the so-called radical lefists like Mélenchon will rally behind DSK as the bulwark against the "fascist threat" emanating from the National Front and thereby hope to achieve a crushing landslide for the former.
#38,
"I suppose one strategy for European powers, if the Middle East gets too powerful and hostile, and if it becomes a real military threat, might be to maintain Israel as a thorn in the backside of the enemy, but the cost could well outweigh the benefit."
Mr. Wilson, your intuition is correct. One cannot use a state that is hell-bent on territorial aggrandizement as a front-line state unless one wants to be sucked into more and more wars.
A better strategy which I have heard enunciated would be for the major Western and Central European states to build up close military and economic ties with Russia and China. Unlike in 1945, Europe's salvation this time lies to the East instead of further to the West.
Russia, with its large indigenous Muslim population, could be seen as a barometer for relations between Europe and the Islamic nations to its east and south. Contemporary Russia is a country that has no reason to seek out conflict with its Muslim neighbours (for risk of radicalizing its own Muslims), and at the same time has every reason not to back down if that conflict comes to its doorstep.
A similar argument can be made for China. Furthermore, for Beijing the Muslim world is an important source of energy resources first and foremost. Europe is first and foremost a key export market and source of advanced technology. Neither represents a significant threat to China. Consequently, the Chinese Politburo is unlikely to look favourably on any attempt by one to conquer the other.
Of course, that is only the geopolitical dimension of the issue. Europe's most immediate problem vis-a-vis Islam is unchecked immigration (not just from Muslim countries, but also from non-Muslim Black Africa). To deal with that problem, a comprehensive solution is needed. On the one hand, border controls must be enforced and pro-natality policies instituted, all in the context of a general program of economic revitalization. On the other hand, real economic cooperation (not "aid") must be offered to Europe's Muslim neighbours so that the masses in Algeria, Turkey, Morroco, and so forth can understand that their proper destiny is to lead dignified lives inside their home countries, rather than to crowd into an de-racinating existence in European suburbs.
Standard and Poor's has downgraded Greece to junk bond status and Portugal to one notch above junk.
Red Thessalonika should be riotous this summer.