That’s the title of an article on the attempted nationalist takeover of the state in Hungary in the Guardian, published yesterday afternoon but which I did not read before I wrote my blog on the same theme yesterday.
I recommend the Guardian article. It suggests there’s hope in the opposition in Hungary.
Paul Krugman posted this on his blog two days ago. I reproduce it as he clearly wants to give maximum coverage to the issue, as do I:
On New Year’s Day, the new Hungarian constitution became law. The Hungarian parliament has been preparing for this event by passing a blizzard of “cardinal” – or super-majority – laws, changing the shape of virtually every political institution in Hungary and making the guarantee of constitutional rights less secure. In the last two weeks alone, the parliament has enacted so many new laws that it has been almost impossible to keep up. And to top it off, there was also a huge new omnibus constitutional amendment – an amendment to the new constitution even before it went into effect. By one commentator’s count, the Fidesz government has enacted 359 new laws since it came to power 18 months ago.
All of the laws connected to the new constitutional structure kicked into action yesterday if they hadn’t already taken effect. As a result, with the new year, Hungarians began living in a new constitutional order. In this new order, all of the escape hatches that would permit reentry into a constitutional democracy have been bolted shut.
I would urge you to read the rest of the long blog in question. It’s important precisely because it is so scary, and precisely because what is happening is so close to what many have predicted could happen in the UK.
In effect a deeply neoliberal government has done all it can to completely gut the Hungarian constitution and leave single party rule in perpetuity. In the process it is silencing the opposition, rigging the judiciary, stacking all government positions with its place-people, over-ruling local government and ensuring a flat tax system for the benefit of the rich in perpetuity.
This is totalitarianism back in Europe.
And no one is raising a murmur.
Why, David Cameron? Where is William Hague saying that this is wrong? And why hasn’t Hungary been expelled from the EU for this?
Or is this the pathfinder case for what the right wing governments of Europe plan for us all? Certainly the Merkozy deal to outlaw Keynesian intervention looks like it.
Hat tip: Howard Reed
As is very clear from this week’s reaction to last week’s EU summit, the UK veto is just one part of another EU disaster that is still waiting to happen.
No credible plan for the Euro emerged. This is not surprising. There are only two options, in reality. Either Germany pays for the rest of the EU to join it in the Euro or the rest of the Euro pay for trying to be like Germany. The third option is economic collapse: only the scale needs discussion.
The Germans can, of course pay. The question is, will they?
The rest of Europe cannot become like Germany. That is technically impossible. We can’t all have surpluses: there have to be deficits on trade and even on spending. That’s an accounting fact. Trying to all be like Germany is therefore doomed to failure – and like the Merkozy pact first guarantees recession, second destroys social democracy and third is a guarantee for chaos. These are facts.
That leaves economic chaos sooner or later, which is much like option 2, or the pact on which agreement was reached.
Governments cannot deliver option 2. It will not happen.
Option 3 – economic chaos, arrives early in the new year when Italy cannot refinance its debts.
So it’s down to Germany, to pay or not; to deliver chaos or not; to spite itself, or not.
That’s all that’s left to speculate on in the short term.
The long term is another story. But in this case the short term is too real to get too worried about the long term, yet. Except to note that’s why Cameron was wrong: he had to be present for the short term to make the difference in the long term. And he isn’t. Which is why he’s wrong.
One fascinating aside of spending time in Copenhagen over the last couple of days with people from many countries that use the euro as their currency was the chance it gave to assess the risk they perceived to their well being as a result.
Both I and another person attending from the UK were surprised to find how relaxed they seemed to be about it. Or was it they are resigned to their fate?
And yet I am not sure that the latter was the case. Whilst I can’t see how Italy is going to raise the €100 billion plus it needs by March as its debts roll over, indicating that there are many more euro crises and summits to come between now and then, those with direct interest seem resigned to keeping calm and carrying on.
I hope they are right.
Cameron made his choice yesterday.
I make clear, the direction of travel in Europe is not one I like. But he simply chose to leave. And he did so for all the worst reasons.
He chose to support the City.
He demanded the right to exploit the working people of the UK on behalf o the City.
He demanded the right to undermine the economies of Europe and the regulation it wishes to establish over errant banks.
Cameron’s choice was a simple one: he declared the UK a tax haven. A land for the very rich. A land where abuse is not just tolerated but encouraged. A land where the ordinary people are treated with contempt.
It was the wrong choice. It was made for the wrong reason. It’s a choice we will bitterly regret.
Commission chief Jose Manuel Barroso unveiled his work programme for next year at the European Parliament in Strasbourg on Tuesday (15 November), calling it a “blueprint for stability and growth.”
Out of the list of 129 separate projects for new EU laws and assorted non-binding strategy papers and recommendations, he highlighted the publication of a commission Annual Growth Strategy; measures to put an end to tax havens and a “quick reaction mechanism” against VAT fraud; as well as laws to end fiddles in the disbursement of EU funds.
The reported continued:
According to commission papers, the tax-haven document, due in autumn 2012, will not be legally binding. But it will aim to “develop a reinforced strategy to protect the EU against the challenges of unco-operative jurisdictions outside the EU.”
Also welcome was the report that:
EU countries will next year be asked to create a pan-EU “framework” for freezing the funds of people involved in terrorist activity and build a joint electronic register to screen financial transactions for terrorist groups on the model of the US Terrorist Finance Tracking Programme.
The EU haw an impressive record in tackling tax haven abuse: in my opinion it has been the most effective agency in the world in doing so. Its European Union Savings Tax Directive is flawed, but is making progress, and even as it stands is a beacon for the importance of automatic information exchange whilst its EU Code of Conduct on Business Taxation has been enormously helpful in tackling tax abuse both on and offshore and is pushing the Crown Dependencies steadily out of business.
The new development looks like an update on the Code of Conduct on Business Taxation. That is also not law, but it has been extraordinarily effective. As such I warmly welcomne this move.
In addition, the moves on terrorist financing simply won’t work without bettr company registries and registries of trusts. Might they be on the way
#ows – Occupy Wall Street is being demolished by the New York Police Department as I write. By the sound of it the park they’re meant to be ‘cleansing’ is being destroyed with it.
Seven #occupylsx protestors are in a polcie station under arrest this morning for a peaceful protest outside the Guildhall – the offices of the City of London.
Greece and Italy have unelected prime minsters today as the bankers begin to take ove governments.
Spain’s interest rates are rising – the markets will seek to overthrow its democratic institutions next.
Germany admits Europe is facing its darkest hour since the second world war – but dithers and does nothing.
Throughout the continent and in the US we face the problem that timid politicians – all of them neoliberal whether from left or right – are frightenmded to act and do not know what to do if they gathered their courage.
And as Gideon Rachman says in the FT this morning:
Europe, and the world at large, has every reason to hope that Messrs Monti and Papademos can work miracles. For if the technocrats fail to do so, the extremists are waiting in the wings.
In Greece, about a quarter of the electorate now say that they favour parties of the far left, and a further 8 per cent back the nationalist right. Collectively, the political extremes in Greece now muster more support than either of the two mainstream parties. The shape of Italian politics, after the forced resignation of Silvio Berlusconi, is likely to be confused for a while. But Italy has spawned powerful communist and far right movements in the past. In the meantime, Umberto Bossi of the Northern League says that he will relish entering opposition – where he can rail against the EU, immigrants and southern Italians.
And it’s not just in the south, as Rachman points out
The radicalisation of politics is just as visible in the creditor nations of Europe as amongst the debtors. Marine Le Pen of the far right National Front will have a big impact on the 2012 presidential election in France, although she is unlikely to win. In the Netherlands the government is now reliant on the votes of the Freedom party led by Geert Wilders, which is running second in the polls. Austria’s far right Freedom party is at level pegging in the polls with the governing People’s party. In Finland the nationalist True Finns are still gaining ground and are easily over 20 per cent in the polls.
All of these rising parties rail against “elites”, whether in Brussels, Wall Street or their own governments. They are all hostile to globalisation and to immigration, particularly from the Muslim world. Some parts of the European far right, such as the Jobbik party in Hungary, still play on traditional anti-Semitic themes. But others, like Mr Wilders in the Netherlands, are strongly pro-Israel, perhaps because they see the Jewish state as an ally in a clash of civilisations with the Muslim world.
Increasingly, however, Europe’s populists are intent on breaking out of the electoral ghetto of hostility to immigration – and are instead stressing economic and eurosceptic themes that have a broader appeal.
This is the risk we face: of fascism, of totalitarianism, of extreme nationalism, of war.
I’m glad it is being said in the press.
Now for heaven’s sake – where are the mnainbstream politicioans saying it, and saying that unless democratrioc instiutions now take on and control finance, and act to promote growth the alternative is
This is the first of a four part interactive diagram in the FT this morning. It’s stunningly important, because it shows, literally graphically, the scale of the issue we are facing in Greece. I urge you to look at the rest. If anything it is more powerful:
Look what the FT is saying (and with which I concur). It’s suggesting that the path down which Greece might be forced leads to complete economic collapse, social chaos, the streets exploding and more.
And it makes clear that if others have to follow (and if Greece goes the dominoes will be falling) then the contagion spreads.
Then it will not just be streets exploding. Extremism will fill the void that neoliberal failure will have created, and that extremism will, inevitably be nationalistic. There is an inevitable consequence to that given the stresses that will exist. We have to be realistic: the choice now is whether or not we start down the road to war, or not.
We have faced such crises before, the only difference being this time it has arisen because of economic failure and not because of war. The precedents were in 1919 and 1945. In 1919 the decision was to divide Europe, and to punish those seen to be at fault. We got fascism, world war, dictatorship which was not finally eliminated until 1989 and outright disaster for Europe.
In 1945 the West, at least, made a different choice. It decided that it would work together despite crippling debts to build a vision of a shared Europe, and that’s what the Marshall Plan delivered. It also delivered peace.
We face that choice now. I am not overstating my case that the choice now is the path to war or peace.
Surely there is only one option?
The FT does, I think, know this. But will our politicians see sense and realise that we’re not just chooosing chaos for a few Greeks now – we’re consigning European unity to history if we don’t solve this crisis now.
And we can solve this crisis. It needs money printed. It needs economic stimulus and investment, now. It needs a plan for recovery, now. That will, I accept, devalue the wealth of some in Europe. But surely a little redistribution of wealth now is worth it? The alternative is modern war in Europe in my opinion – and I can, as a human being, as a father, as a compassionate person, imagine nothing worse.
And I think I have a duty to lay my concerns on the table.
Much of Europe wants a financial transaction tax (FTT). The reason why is obvious: they need the money.
The UK is adamant it will have no such tax. It says it will harm the City of London. Of course that’s not true: it’s the City of London that harms us, but Cameron ignores that fact and in the process spites the plans for an FTT to be discussed by Nicolas Sarkozy at the G20 later this week.
How can the impasse be broken? Well, let me suggest a simple solution. It’s called VAT.
VAT is, of course, an EU tax. And it is an EU tax with a difference: it can be imposed by majority vote. Unanimity is not required here. And that’s the critical point. Sarkozy can change VAT with dissent from the UK.
The relevance of that simple fact is this: VAT is not charged on financial dealing and it could be. Of course that is not quite what an FTT is expected to be, but the reality is that most financial dealing is about margin trading. So too are many other trades, such as second hand car dealing, and we have worked out ways to apply VAT to such dealings. OK, financial dealing is more complex – but it is also incredibly well tracked. So, it would be quite possible to apply VAT to the margin on bank dealing.
And they could not get round it easily. First, the rate would be low, and so too would be input tax as a result.
Second, relocating can be overcome – it would simply be deemed that settlements through Europe were located in Europe. And then what are called the ‘self supply’ rules would apply – the bank would have to register and charge itself the tax and pay it over.
I’m not saying banks would not try to avoid the charge: they would. But quite a lot could be done to prevent that happening.
I haven’t worked out all the detail. I don’t need to do so. All I need to do is tell Nicolas Sarkozy he has a way of getting what he wants from Cameron. The stick might be enough.
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