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An agenda for Europe

The struggle for the solution of the debt and the Euro

Friday 26 February 2016, by Francisco Louçã

In this brief text I reflect on the international context and the European crisis on the basis of the experience of Portugal under the Troika and the political change that has happened since then. The first part presents a map for 2016, the second deals with Europe, the struggle for the restructuring of the debt and the question of exit from the Euro.

1. A prolonged stalemate that feeds successive crises

1. The world economy is stagnant. The international system is in transformation and crisis. In transformation, because new centres of profitability of capital and therefore of political power arise, with the Chinese economy being the most powerful while that of Brazil is experiencing a sharp fall. In crisis, because this mediocre growth maintains a high rate of unemployment in the more developed countries and because the difficulty of recovery of the rate of accumulation precipitates austerity measures and modification of the distribution of income between capital and labour, with effects which are socially regressive and economically recessive. This results in the weakening or disturbance of political regimes, as shown in the instability in France, in the referendum in the United Kingdom, the governmental impasse in Spain and the emergence of xenophobic populism, in Hungary and Poland but also in Belgium or the Netherlands. Finally, the centre of the empire, Washington, is a decadent power, with a decomposing hegemony and as such is even more dangerous.

2. The USA represents one third of the global economy. In the political arena, more than that. In demography and geography, much less. In currency, still almost everything. In military technology, the same. This monumental power, that dominated the last century and that now slowly degrades in the twenty-first century, is one of the greatest threats to global stability. For three reasons: its external action accentuates conflict, its policy is dangerous, and its economy is extractive and therefore decadent.

3. Foreign policy was the main factor in Obama’s election. He promised decompression (the closure of Guantanamo) and multilateralism (a minimum form inclusion of allies). But neither one nor the other has transpired and in all these areas of intervention he has retreated. In Europe, he has drawn Germany into a conflict in the East, in Ukraine, trying to place the boundary of NATO at the edge of Russia. Meanwhile, the three pillars of the US’s relationship in the Middle East have suffered serious disturbance or increasing risks: in Egypt, with a popular uprising and then with a military coup, while Israel and Saudi Arabia are both risking a suicide note through complacency or support for the Daesh. The foreign policy of the USA has failed because it allowed in the first case the resurgence of Russia as a military power and in the second Iran’s assertion as a regional force.

4. The biggest problem, however, is that for the USA, from its privileged position, foreign policy is determined by internal politics (in Europe is the opposite). This is imposed by the drift to the right of the US political system with the emergence of isolationist populism in the two major parties, moving from an imposing imperial leadership towards a hesitant government, with brutal and disjointed disciplinary actions that inflame the world. Also, the U.S. no longer has control as a territorial power. The defeat in Vietnam seems to have closed an epoch. Attack and withdrawal has become the US practice, so that internal politics becomes volatile in its external actions. This is a “drone militarism”. The technology allows air wars, with the immediate effect of amplifying the conflict and facilitating conditions for the globalization of terror, from Afghanistan to Iraq, Libya Syria.

5. Since internal politics is closed in on itself, the US can no longer lea