Greek freedoms

The events around Taksim square in Istanbul rather drove the Greek government’s sudden and inconceivable closure of the state media (ERT) last week off most front pages. Journalists are not everyone’s favourite group of people; and it may well be true (as the Greek PM said) that there was a lot of slacking and underemployment in the state radio and television studios.But that is no justification for the sudden closure – Europe’s first in the post-war period. Yanis Vroufakis, the Greek economist who wrote The Global Minotaur, is hardly an admirer of the state broadcaster which actually banned him for more than 2 years from appearing on its channels - but he chose to spend 3 nights with the journalists who are, with quite a bit of public support, resisting the closure. His reasoning is a powerful comment on the current state of our freedoms..... 

As probably the only Greek commentator to have been blacklisted by ERT over the past two years (due to the previous government’s annoyance at my insistence that Greece was bankrupt and should default in 2010, instead of adding huge new loans to un-payable debts) I feel I have the moral authority to cry out against ERT’s passing. Despite ERT’s many ills, its sudden, authoritarian closure by our troika-led government is a crime against public media that all civilised people, the world over, should rise up against.
Why? Because however stale, inefficient, even corrupt our public media organisations may be, they are essential to a well functioning society. In our stratified societies the legal system, for instance, is arguably unfair toward the weaker members of society who cannot afford the top lawyers or who are inarticulate. Even in the most civilised society, courts offer us nothing more than a chance of justice. There are no guarantees of it. Similarly with our public education systems. Frequently, they serve the interests of the middle class better than those who truly need public education. Nevertheless, this is no reason to close down the courts or our public schools.
Similarly with public television and radio: they offer us no guarantee of current and affairs pluralism and cultural diversity. What they offer us is merely a chance of it. A chance for an electronic public space where values are irreducible to prices and voices can be heard that annoy our society’s high and mighty.

A good - and lovely - man

Another good man has died – the Scottish writer Iain Banks - at age 59. A computer scan revealed he had inoperable cancer – and he died 3 months later while at the crest of his craft and zest for life. You can get a good sense of both his writing and what he stood for in the last interview he did before his tragically early death 

As we chat, he frequently loops off into hilarious denunciations. "I can understand that people want to feel special and important and so on, but that self-obsession seems a bit pathetic somehow. Not being able to accept that you're just this collection of cells, intelligent to whatever degree, capable of feeling emotion to whatever degree, for a limited amount of time and so on, on this tiny little rock orbiting this not particularly important sun in one of just 400m galaxies, and whatever other levels of reality there might be via something like brain-theory [of multiple dimensions] … really, it's not about you. It's what religion does with this drive for acknowledgement of self-importance that really gets up my nose. 'Yeah, yeah, your individual consciousness is so important to the universe that it must be preserved at all costs' – oh, please. Do try to get a grip of something other than your self-obsession. How Californian. The idea that at all costs, no matter what, it always has to be all about you. Well, I think not."
His political zeal burns equally ardently. He confesses that "for half a second", as he and Adele travelled across the Alps from Venice to Paris on honeymoon, he was "elated" when he heard that Thatcher had died. "Then I realised I was celebrating the death of a human being, no matter how vile she was. And there was nothing symbolic about her death, because her baleful influence on British politics remains undiminished. Squeeze practically any Tory, any Blairite and any Lib Dem of the Orange Book persuasion, and it's the same poisonous Thatcherite pus that comes oozing out of all of them.
In the unlikely event that I'm around for the referendum on Scottish independence I'm definitely voting 'yes'. I was saying last year that if we don't get it in 2014 we'll get it in my lifetime and now it turns out my lifetime might not extend as far as the first referendum and that just seems wrong – a Scotland still shackled to a rightwing England, especially with the rise of the bizarrely named Ukip (I think they'll find their acronym should be EIP actually) – I won't be sorry to be missing that. I won't miss waiting for the next financial disaster because we haven't dealt with the underlying causes of the last one. Nor will I be disappointed not to experience the results of the proto-fascism that's rearing its grisly head right now. It's the utter idiocy, the sheer wrong-headedness of the response that beggars belief. I mean, your society's broken, so who should we blame? Should we blame the rich, powerful people who caused it? No let's blame the people with no power and no money and these immigrants who don't even have the vote, yeah it must be their fucking fault. So I might escape having to witness even greater catastrophe.

Attracting fans is not difficult in this age of personalities - what is much more difficult for artists is to retain a strong sense of decency and principles. I read only a few of Banks's books but was impressed more by what I knew of the man and the courage of his convictions.

German reading

German newspaper stands offer a profusion of titles – with the various regional titles reflecting perspectives not available in centralised England and France. The (weekly) Die Zeit is the country’s most weighty publication – in more senses than one (!). I had enjoyed last month the glimpse one of its articles had given us of ex-Chancellor Helmut Schmidt’s long love affair with painting - not least those of the German Expressionists. Schmidt is now a still active 94 year-old whose trademark cigarette was on display in a recent television interview here. He was not only German Chancellor 1974-82 but also publisher of the Hamburg-based paper for a couple of decades after he left the Chancellory. And I am now reading with interest the account of this rich life of his – Unser Schmidt written by Theo Sommer.

He will doubtless be reading with his usual critical eye the latest fat issue of Die Zeit whose special magazine today focuses on questions such as What is the good life?

From the profusion of titles, I’ve developed a taste for the much thinner and leftist daily - Die Tageszeitung whose sentence construction is less convoluted than the heavies such as Der Spiegel which I have now deserted for the easier Stern. Although Bavaria is a stronghold of the right, Die Suddeutsche Zeitung is an attractively packaged  left-leaning daily with interesting content. Franfurte Allgemeine Zeitung is a rather boring conservative paper - and the Cologne titles are very superficial.

Der Spiegel's English edition continues to be part of my daily reading - its latest offers first a take on some of the construction scandals which are filling the columns of German papers; then a rare insight into war-time Berlin -

The diary of Brigitte Eicke, a Berlin teenager in World War II, is an account of cinema visits, first kisses, hairdos and dressmaking, along with a brief, untroubled reference to disappearing Jews. Recently published, it highlights the public indifference that paved the road to Auschwitz.
Hers is a perspective seldom glimpsed in Germany's World War II literature, a field in which the female voice took a while to be heard.
"In the 1950s and '60s, the focus was more on memories of battle and the male experience," says Arnulf Scriba, who coordinates a project at the German Historical Museum called "Collective Memory," an archive of personal testimonies. "The school had been bombed when we arrived this morning. Waltraud, Melitta and I went back to Gisela's and danced to gramophone records." (1 Feb 1944)
Young girls are made of stern stuff. In December 1942, while Allied bombs rained on Berlin and Nazi troops fought for control of Stalingrad, 15-year-old Brigitte Eicke began keeping a diary. For the next three years, the young office apprentice wrote in it every single day.
Now published in German as "Backfisch im Bombenkrieg" -- backfisch being an old-fashioned term for a girl on the cusp of womanhood -- it adds a new perspective to Germany's World War II experience and shows not only how mundane war can become but also how the majority of Germans were able to turn a blind eye to Nazi brutality.
Until relatively recently, accounts of Germans' own wartime suffering were considered something of a taboo, their own trauma eclipsed by the horror of the Holocaust. But now that the wartime generation is dying, every slice of first-hand social history has inherent value.

Another story focuses on the German Constitutional Court's current consideration of the legality of  the ECB bond buying program known as Outright Monetary Transactions (OMT). 

The program, announced last autumn, envisions the ECB buying unlimited quantities of sovereign bonds from ailing euro-zone member states to hold down their borrowing costs. To date, the ECB has not made any bond purchases, but the mere announcement that it might has proven enough to calm the markets and provide European leaders with some to seek agreement on longer-term measures to solve the crisis.
Even opponents of the program have acknowledged its success. The OMT "has been the most successful measure taken in saving the euro thus far," says Dietrich Murswiek, who represents co-claimant Peter Gauweiler, a member of parliament with Bavaria's Christian Social Union.
But despite its success, the OMT program is illegal, say the plaintiffs. "State financing, whether direct or indirect, is not allowed for the ECB," says one of their attorneys, Karl Albrecht Schachtschneider. And his complaint is far from fanciful -- it is difficult not to see the OMT program as state financing. In essence, the court is being asked to decide whether economic pragmatism trumps a strict interpretation of the law.

Open Europe has a blog on the issue

The painting is one of Hans Purrmann's - a glorious colourist I have just come across who was strongly influenced by Matisse - and whose paintings were banned by the Nazis.

Saturday in Junkersdorf

The world could not have been more beautiful yesterday at the Rhein Energie Stadion and the Junkersdorf woods. The area is huge and intensively used by Koln people at weekends whether for ball games, cycling, festivals - or simply walking around its picturesque small lakes. 

A Sporting High school is also located in a superb wooded area. 

Yesterday an ecumenical group was singing its heart out in the stadium; a family athletics fair was in full swing in a nearby racing track; and a large number of young men and women were taking part in the finals of the German Touch Rugby competition in the complex of football fields. 

First time I've seen this game – the friendly spirit evident was very impressive – as was the sheer mix of shapes and sizes of those taking part.
Germany at its most civilised!

German Europe??

Ulrich Beck is a German sociologist whose name I encounter from time to time – from his work on risk society (which I don’t pretend to understand). He has now jumped to almost best-selling status in the UK by virtue of his small book with the fairly self-explanatory title of "German Europe"

It appeared in English in April and has got the English chattering classes drooling covering, as it does, two of the hate subjects of the English – Europe and the Germans.

The book itself seems a bit incoherent – a bit of knock-about fun at Angela Merkel's expense; an emphasis on her (and Germany's) Protestant/Lutheran discipline (rather missing the point about the Catholic contribution to the concept of the social market); some obvious assertions about the new divisions in Europe; and then some wishy-washy points about the future....... 

You can make up your own mind from this interview, podcast; and summary

I would say that the first thing we have to think about is what the purpose of the European Union actually is. Is there any purpose? Why Europe and not the whole world? Why not do it alone in Germany, or the UK, or France?
I think there are four answers in this respect. First, the European Union is about enemies becoming neighbours. In the context of European history this actually constitutes something of a miracle. The second purpose of the European Union is that it can prevent countries from being lost in world politics. A post-European Britain, or a post-European Germany, is a lost Britain, and a lost Germany. Europe is part of what makes these countries important from a global perspective.

The third point is that we should not only think about a new Europe, we also have to think about how the European nations have to change. They are part of the process and I would say that Europe is about redefining the national interest in a European way. Europe is not an obstacle to national sovereignty; it is the necessary means to improve national sovereignty. Nationalism is now the enemy of the nation because only through the European Union can these countries have genuine sovereignty.

The fourth point is that European modernity, which has been distributed all over the world, is a suicidal project. It’s producing all kinds of basic problems, such as climate change and the financial crisis. It’s a bit like if a car company created a car without any brakes and it started to cause accidents: the company would take these cars back to redesign them and that’s exactly what Europe should do with modernity. Reinventing modernity could be a specific purpose for Europe.

Taken together these four points form what you could say is a grand narrative of Europe, but one basic issue is missing in the whole design. So far we’ve thought about things like institutions, law, and economics, but we haven’t asked what the European Union means for individuals.

What do individuals gain from the European project?

First of all I would say that, particularly in terms of the younger generation, more Europe is producing more freedom. It’s not only about the free movement of people across Europe; it’s also about opening up your own perspective and living in a space which is essentially grounded on law.

Second, European workers, but also students as well, are now confronted with the kind of existential uncertainty which needs an answer. Half of the best educated generation in Spanish and Greek history lack any future prospects. So what we need is a vision for a social Europe in the sense that the individual can see that there is not necessarily social security, but that there is less uncertainty. Finally we need to redefine democracy from the bottom up. We need to ask how an individual can become engaged with the European project. In that respect I have made a manifesto, along with Daniel Cohn-Bendit, called “We Are Europe”, arguing that we need a free year for everyone to do a project in another country with other Europeans in order to start a European civil society.

The Council of Europe published recently a series of lectures by various intellectuals on the crisis and Beck's Europe at risk - a cosmopolitan perspective gives a good sense of his book - and his other contributions. Self-indulgent academic sloganising which comes from too much time in incestuous discussions.
Earlier in March, the Guardian had given us a typical piece of shallow British prejudice in their coverage of the same topic - giving us Beck and a German comedian (resident in the UK). Almost 500 respondents took part in the subsequent discussion thread - which confirmed just how little Brits seem to know about Germany

The curious behaviour of German banks

I mentioned the state-owned regional banks as one of the lynchpins of the post-war German success story – their support of the essentially family-owned industrial companies endowing its society with a long-term perspective difficult for Anglo-Americans to understand. In any other society, such a combination of finance and politics would make for collusive corruption of the highest degree - as is shown in the behaviour of the Spanish Cajas.
The consensual nature of corporate decision-making - as embodied in the Mitbestimmung system of worker representation and involvement has also been a key feature of the post-war German model. But. as Perry Anderson showed in his 2009 article on The New Germany 

the landscape of the Berlin Republic has become steadily more polarized in the past decade or so. At the top, traditional restraints on the accumulation and display of wealth were cast to the winds, as capital markets were prised loose and Anglo-American norms of executive pay increasingly accepted by German business.
Gerhard Schröder gave his own enrichissez-vous blessing to the process in the first half of the 2000s, slashing corporation and upper-bracket income tax, and rejecting any wealth tax,. Structurally still more important, by abolishing capital gains tax on the sale of cross-holdings, his government encouraged the dissolution of the long-term investments by banks in companies, and reciprocal stakes in firms, traditionally central to German corporatism—or in the consecrated phrase, the ‘Rhenish’ model of capitalism. In its place, shareholder value was increasingly set free. By 2006, foreigners had acquired an average of over 50 per cent of the free float of German blue-chip companies

I haven’t so far picked up any analysis on the internet about exactly how this has changed the German “social market”. On the face of it a lot of the basic features are still there – although the scale of the German banks’ exposure to the sub-prime market disaster did take us all by surprise. Michael Lewis got himself into some trouble a couple of years ago with his Vanity Fair article on Germany which focused a bit too much on anal vocabulary – but his article did contain some important vignettes -

He is a type familiar in Germany but absolutely freakish in Greece—or for that matter the United States: a keenly intelligent, highly ambitious civil servant who has no other desire but to serve his country. His sparkling curriculum vitae is missing a line that would be found on the résumés of men in his position most anywhere else in the world—the line where he leaves government service for Goldman Sachs to cash out. When I asked another prominent German civil servant why he hadn’t taken time out of public service to make his fortune working for some bank, the way every American civil servant who is anywhere near finance seems to want to do, his expression changed to alarm. “But I could never do this,” he said. “It would be disloyal!”

The curious thing about the eruption of cheap and indiscriminate lending of money during the past decade was the different effects it had from country to country. Every developed country was subjected to more or less the same temptation, but no two countries responded in precisely the same way. The rest of Europe, in effect, used Germany’s credit rating to indulge its material desires. They borrowed as cheaply as Germans could to buy stuff they couldn’t afford. Given the chance to take something for nothing, the German people alone simply ignored the offer. “There was no credit boom in Germany. Real-estate prices were completely flat. There was no borrowing for consumption. Because this behaviour is rather alien to Germans. Germans save whenever possible. This is deeply in German genes. Perhaps a leftover of the collective memory of the Great Depression and the hyperinflation of the 1920s.” The German government was equally prudent because, he went on, “there is a consensus among the different parties about this: if you’re not adhering to fiscal responsibility, you have no chance in elections, because the people are that way.”
In that moment of temptation, Germany became something like a mirror image of Iceland and Ireland and Greece and, for that matter, the United States. Other countries used foreign money to fuel various forms of insanity. The Germans, through their bankers, used their own money to enable foreigners to behave insanely.

This is what makes the German case so peculiar. If they had been merely the only big, developed nation with decent financial morals, they would present one sort of picture, of simple rectitude. But they had done something far more peculiar: during the boom German bankers had gone out of their way to get dirty. They lent money to American subprime borrowers, to Irish real-estate barons, to Icelandic banking tycoons to do things that no German would ever do. The German losses are still being toted up, but at last count they stand at $21 billion in the Icelandic banks, $100 billion in Irish banks, $60 billion in various U.S. subprime-backed bonds, and some yet-to-be-determined amount in Greek bonds. The only financial disaster in the last decade German bankers appear to have missed was investing with Bernie Madoff.

A German economist named Henrik Enderlein, who teaches at the Hertie School of Governance, in Berlin, has described the radical change that occurred in German banks beginning about 2003. In a paper in progress, Enderlein points out that “many observers initially believed German banks would be relatively less exposed to the crisis. The contrary turned out to be the case. German banks ended up being among the most severely affected in continental Europe and this despite relatively favorable economic conditions.” Everyone thought that German bankers were more conservative, and more isolated from the outside world, than, say, the French. And it wasn’t true. “There had never been any innovation in German banking,” says Enderlein. “You gave money to some company, and the company paid you back. They went [virtually overnight] from this to being American. And they weren’t any good at it.”
What Germans did with money between 2003 and 2008 would never have been possible within Germany, as there was no one to take the other side of the many deals they did which made no sense. They lost massive sums, in everything they touched. Indeed, one view of the European debt crisis—the Greek street view—is that it is an elaborate attempt by the German government on behalf of its banks to get their money back without calling attention to what they are up to. The German government gives money to the European Union rescue fund so that it can give money to the Irish government so that the Irish government can give money to Irish banks so the Irish banks can repay their loans to the German banks. “They are playing billiards,” says Enderlein. “The easier way to do it would be to give German money to the German banks and let the Irish banks fail.” Why they don’t simply do this is a question worth trying to answer.
…..On the surface IKB’s German bond traders resembled the reckless traders who made similarly stupid bets for Citigroup and Morgan Stanley. Beneath it they were playing an entirely different game. The American bond traders may have sunk their firms by turning a blind eye to the risks in the subprime-bond market, but they made a fortune for themselves in the bargain and have for the most part never been called to account. They were paid to put their firms in jeopardy, and so it is hard to know whether they did it intentionally or not. The German bond traders, on the other hand, had been paid roughly $100,000 a year, with, at most, another $50,000 bonus. In general, German bankers were paid peanuts to run the risk that sank their banks—which suggests they really didn’t know what they were doing. But—and here is the strange thing—unlike their American counterparts, they are being treated by the German public as crooks. The former C.E.O. of IKB, Stefan Ortseifen, received a 10-month suspended sentence and has been asked by the bank to return his salary: eight hundred and five thousand euros.

German perceptions

Germany is in election mode – although Neal Ascherson makes the point in the current LRB that

Europe and the euro crisis scarcely figure in this election campaign. Listening to the speeches or reading the manifestos, you would never guess that boys and girls in other countries are charging water cannon and raving about German neo-imperialism, or burning pictures of Merkel as the destroyer of Europe. There is some heavy cliché about wanting ‘a European Germany, not a German Europe’. But where are the positive ideas about how German economic strength might relieve nations swamped by debt? The turmoil seems a long way off.
Those who are aware of how hated Germany has become in parts of Southern Europe feel merely pained, misunderstood. The self-image of Germany as a bewildered, kindly nation, helpless to defend itself against greedy neighbours, dies hard. It was lent credibility a few weeks ago by an eccentric European Central Bank report which asserted that – in terms of ‘per household property’ – the Germans were among the poorest in the Eurozone, with an average wealth of €51,000 – less than the Slovaks and far less than a Greek or Cypriot household. This morally comforting estimate was soon rubbished; it ignored family income, which puts the Germans near the top of the league, and crudely set bank wealth against population (billions in septic bank holdings divided by the total number of Cypriot households equals €267,000, equals meaningless).
And yet, beyond the nonsense, the report implied some interesting things about German political psychology. People still prefer to rent rather than to own their homes, a contrast to post-Communist nations in the Eurozone where public housing was sold off to its tenants. The Germans tend to put their money into local savings banks (Sparkassen) at low but secure interest, rather than buy real estate or invest in the stock market.  Thrift and caution are still hard-wired into society. ……..

Interest in the German model

This blog has referred several times to ‘the Scandinavian model’ of society and government (or “governance” in modern parlance) but it had failed to pick up the growing interest of the British “chattering classes” in ‘the German model’. More than a year ago, one of the British Think Tanks was drawn to observe that -

at some point in every generation, British policymakers look in envy and awe at the German economy. It last happened in the early 1990s, when the UK was recovering from the post-Lawson bust and the ignominy of forced exit from the exchange rate mechanism. Will Hutton’s The State We’re In captured the zeitgeist of this era brilliantly: a time when the Rhineland social market economy appeared to offer a stronger and fairer variety of capitalism than its rapacious, unequal and structurally weak Anglo-Saxon competitor.
The tables turned as the 1990s wore on. Anglo-Saxon economies boomed and created jobs while the German economy got stuck in low growth and high unemployment. Gerhard Schroeder talked about the ‘Neue Mitte’, in conscious emulation of the Clinton–Blair ‘third way’. Germany embarked on difficult structural reform of its labour market and held down real wages as it entered the euro.
The pendulum has swung back and the German model is now in vogue again. The TUC produced in early 2012 a detailed report on the lessons of Germany’s manufacturing strength, attributing its export prowess to deep institutional foundations in its social partnerships, apprenticeships and industrial strategies. Maurice Glasman regularly sings hymns of praise to Germany’s regional banks, vocational traditions (implanted, he argues, by Ernie Bevin after the second world war), and the fact that workers share fully in company decision-making. Meanwhile, shadow business secretary Chuka Ummuna has recently been on a study tour of Germany to mug up on how it achieves a more patient, responsible and resilient capitalism.
Germany’s appeal is not difficult to understand. Its famous Mittelstand of medium-sized family companies that export all over the world has long been admired. It has a superb apprenticeship system and huge investments in both physical and human capital. Its industrial social partnerships have proved a source of durability and strength in the era of globalised markets, not a weakness. Recently it has coupled an expanding service sector to its historic industrial pre-eminence.
What has attracted most attention recently, however, is its employment performance. Germany’s unemployment rate is now lower than it was before the financial crisis struck, while in most of the rest of the OECD it remains high or rising. This is a huge turnaround from the position Germany was in barely half a dozen years ago.

I have always felt at home in Germany - my father was one of a few Scottish pastors who developed a “Reconciliation” mission in the post-war period there – focussing on Detmold, Heiligenkirchen and Bad Meinberg areas in Nord-Rhein Westphalia. He took us with him on at least one trip there in the mid 1950s and it is to this I owe my (mainland) European orientation and (in all probability) the direction my life has taken in the past 20 years in central Europe and Central Asia.

One of my fond family memories is of my father is his wading through the various parts of the weekend Die Zeit newspaper - printed on special thin but glossy paper - which was flown over to him. Not surprisingly I excelled at German and French at school - and started out on a language degree at University (which I changed half-way through to an Economics and Politics one)
In 1961 I ventured to a Polish student work-camp – via Berlin – and will never forget the sight from the train of a still-bombed out Wroclaw.
The next year I spent some weeks at a summer school at Gottingen University – where I was introduced to the post-war stories of Heinrich Boll. 

In 1964 I spent 2 months living and working in Berlin (thanks to the student economic association AISEC) where I encountered for the first time the fervour of an old Nazi – the mother of my girlfriend of the time.
And, as a regional politician, I visited the country several times in the 1980s becoming very aware of how civilised the coverage of German politics seemed to be compared with Britain and envious of the role and status of German regional politicians in national policy-making.

Such a federal system was, of course, the post-war creation of the Anglo-Americans - building on the older system of Laender. And the worker representation embodied in the cooperative system of Mitbestimmung was very much a British element. But the wider aspects of the "social market" (as clearly set out in chapter five of this book) and to be seen in the industrial role played by the state-owned regional banks; in the strength of the training system; in the constant emphasis given to savings were very German; and embodied in their neglected concept of "ordoliberalism" is specifically German. The role of social insurance in the funding of the health system (and of the churches in the management of schooling) are yet more examples of how pluralistic the German system is.
For those wanting something deeper on the subject of the German model - see the recent article on Ideas, institutions and organised capitalism