Europe’s fiscal pact: The final irony?

Illustration by Manos Symeonakis

Last Friday, December 9 — the day when 26 of the European Union’s 27 leaders agreed on a “fiscal compact” designed to save the euro and place the bloc on a sounder economic footing — marked exactly 20 years since Germany and France presided over a similar meeting that led to the drafting of the Maastricht Treaty, which became the cornerstone of the single currency.

Among the euro entry conditions agreed in 1991, a country’s public debt would have to be limited to 60 percent of gross domestic product and its deficit to 3 percent of GDP. The first countries to breach the deficit rule were France and Germany in 2003 but they voted to let each other off, thereby undermining the rules that they had been instrumental in drawing up. So, there is more than a hint of irony in the fact that two decades on, France and Germany are again at the forefront of pushing for strict budget discipline, this time as a way of keeping the euro from falling apart.

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No countries for old ideas

Illustration in linocut by Manos Symeonakis

Brussels – There’s a homeless man who sits with his back against the wall of Gare du Nord railway station in Brussels and begs for money. He chooses a spot near the station’s side exit, where few people pass. It also rains a lot in the Belgian capital, so he doesn’t look like a happy man. But by the end of Friday, when European Union leaders will have finished negotiating on new, stricter budget rules for member states just a couple of kilometers from where the beggar sits, they could make him look like the happiest guy in town.

Such has been the intensity of disagreement over how to take economic governance up a notch in the 27-nation bloc that there will be a lot of fraught faces in Brussels this week. Of course, if a deal is reached, the smiles will break out – until people start questioning the implications of what has been agreed.

The negotiations leading up to the summit, which began on Thursday, have been overshadowed by events on October 17: Just as a task force of EU finance ministers led by European Council President Herman Van Rompuy and assisted by the head of the European Central Bank, Jean-Claude Trichet, was putting the finishing touches to proposals designed to stop member states like Greece from overspending, Germany and France decided they would save everyone the trouble and decide on the final scheme on their behalf.

The task force had come up with a system of issuing sanctions against countries that violate the 3 percent of gross domestic product (GDP) limit on their public deficits and the 60 percent of GDP limit on debt, as set out in the EU’s Stability and Growth Pact. Countries that fail to conform would face the prospect of being fined. Both the ECB and the European Monetary Affairs Commissioner Olli Rehn had wanted this process to be semi-automatic, in other words not to be open to political interpretation or manipulation.

Before the mechanism – which for now will only apply to countries that use the euro – was even properly conceived, German Chancellor Angela Merkel and French President Nicolas Sarkozy announced they had agreed on a different method. In a two-way compromise, Merkel agreed that a qualified majority of eurozone governments would be required to start disciplinary action (including political sanctions such as withdrawal of a state’s voting rights) and that a permanent emergency fund should be created for members that can’t balance their books, while Sarkozy conceded that any changes to budget rules should be included in an amended EU treaty.

The Franco-German power play prompted dismay – Trichet insisted a footnote be added to the final version of the proposals stating that he did not agree with all of them – and horror – Luxembourg’s Foreign Minister Jean Asselborn accused the French and Germans of dragging the EU back into the 19^th century with the idea of removing members’ voting rights: “You are threatening states, threatening peoples, humiliating them.”

Rehn, meanwhile, insisted in Brussels on Tuesday that he would push up to the last minute for the sanctions process to be free of political intervention and disagreed openly with the prospect of denying offending members the right to vote, which he said is “not in line with the idea of an ever-closer Union.”

The Finn was speaking at the launch of a new system for monitoring the performance of eurozone economies. Dubbed the Euro Monitor 2010, the report compiled by the Lisbon Council think-tank and the Allianz financial services provider uses a range of 15 indicators in four key categories – fiscal sustainability; competitiveness and domestic demand; jobs, productivity and resource efficiency; and private and foreign debt – to evaluate performance rather than just fiscal measurements. The idea is that the Euro Monitor would provide a better early warning system of failing economies and would be a more comprehensive way of monitoring and encouraging balanced growth in the member states.

Given that he’s had more numbers thrown at him this year than a bingo hall announcer, perhaps Rehn, who expressed his support for such an analytical tool, could be excused for missing the irony of the occasion. He may well favor a more rounded approach to assessing economic progress but the measures due to be approved this week use purely fiscal indicators as their totem poles. Even though the EU is more acutely aware of its failings thanks to Greece’s spectacular implosion, the Union is about to commit to a form of “reinforced economic governance” that is predicated on the same terms that have underpinned eurozone economies for the last decade and which failed to prevent the current mess in which many member states find themselves. It uses the same debt and deficit limits that were consistently violated, not only by rulebreaker Greece but by rulemakers France and Germany as well.

Also, the proposed mechanism pounces on failure rather than encouraging success. It threatens to punish member states that fail to comply with somewhat arbitrary fiscal limits but does not suggest how they can drive their economies to stay clear of trouble. It proposes sanctions when there is no evidence that financial penalties bring states into line. Greece, for example, was the first EU country to ever be fined for an offense – for the operation of an illegal trash dump on Crete – in July 2000. It spent the following 10 years amassing fines for breaching EU environmental legislation. At the end of the decade, Greece still had one of the worst environmental records in the Union. It had neither reformed nor conformed as a result of the fines.

There is a deeper problem, though, with the proposals. They show the EU to be running short of ideas at a most crucial juncture: When countries across Europe, from Greece to Britain and Ireland to Portugal, are taking the austerity hatchet to their troubled economies, there seems to be no attempt to develop a more sophisticated and nuanced economic model to deal with the challenges of the 21^st century. Europe appears to have accepted the cost-cutting, tax-hiking philosophy of the International Monetary Fund without question.

This undermines the Union much more than any disagreements or backroom politics. The EU was once about breaking through the waves; its budget proposals are only about staying afloat. The measures reek of bleakness and there is nothing there to inspire the Union’s 500 million inhabitants. As John Rentoul, a commentator for the British daily The Independent, wrote in the wake of his government’s drastic spending cuts: “This isn’t about economics – as ever, that can be argued either way – it is about a strategy for the country.” Or in this case, the Union, and there doesn’t seem to be one.

Whatever is finally agreed this week, EU leaders will not be able to escape the fact that they are talking one language — that of debt, deficit, austerity, limits and sanctions – when many of their people would like to hear them speak another – that of jobs, security, prospects, fairness and quality of life. Even the homeless man in the street would be able to tell them that avoiding financial bankruptcy does not prevent you from being morally bankrupt, balancing your budget does not mean you have an equal society and reducing your deficit does not preclude you from being short of ideas.

This commentary was written by Nick Malkoutzis and was published in Athens Plus on October 29, 2010.

The World Cup: a measure of life

Illustration by Manos Symeonakis

“I have measured out my life with coffee spoons,” wrote T.S. Eliot in one of his poems. I know exactly what he means. I have measured out my life with cups, World Cups.

The significant moments in my life – meeting special people, saying goodbye to others, obtaining academic qualifications and reaching career milestones – all seem to have coincided with international football’s top tournament every four years. Obviously, things have happened in between World Cups but my recollection of them is a little blurry – like vaguely remembering the name of someone you met at a party while on your way to greet another person you actually wanted to talk to.

Every four years, I become the object of ridicule as I read up on the participating teams like a scientist preparing for a job interview at NASA, check the TV schedule with the fastidiousness of a railway stationmaster and spread out my World Cup wall chart like a general preparing for battle. I go through this ritual each time because I have always regarded the World Cup as a unique learning experience. “All that I know most surely about morality and obligations, I owe to football,” wrote Albert Camus. To paraphrase him, most of the important things I have learnt about life, I owe to the World Cup.

My first memories are of the 1982 tournament in Spain, when I would rush home from school during gloomy English summer afternoons to watch the teams play in the brilliant Iberian sunshine. The first incident that made an impression on me was in the Kuwait v France group game when the French, already 3-1 up, scored a fourth goal. Bizarrely, the Kuwait defenders stood still, allowing the French to hit the back of the net. They immediately remonstrated with the referee, claiming they had heard him blow the whistle during the build up to the goal. A sheikh who was president of the Kuwaiti federation stormed onto the pitch and demanded that the goal be cancelled. The Russian referee eventually caved in. I watched agog – this wasn’t the World Cup, this was my playground game being broadcast on TV. It was at that point that the tournament taught me my first lesson: there are no children and adults in this world, just small children and bigger ones.

Spain 1982 was also my first experience of Brazilian brilliance. The 1982 team is regarded by some as the most beautiful side never to have won the tournament. Echoing the remarkable Brazilian World Cup-winning team of 1970 – generally deemed to be the most entertaining to have won the trophy – the Brazil of 1982 played with panache and abandon, radiating optimism. Watching their yellow shirts dart across the screen felt like liquid sunshine was flooding into the room. Years later, I would read a book written by Garry Jenkins about Brazil’s 1970 victory, and his memories of watching the team on small colour TV in a tiny Welsh Village. “All coffee browns and ebony blacks, cobalt blues and canary yellows, their players and their playing came in shades I had never seen before. They have occupied a sun-kissed corner of my mind ever since,” he wrote in “The Beautiful Team.” I knew exactly what he meant.

The Brazil of 1982 would succumb to the eventual winners, Italy, in an epic game that finished 3-2. This match provided me with two more useful lessons. Firstly, Brazil’s defeat at the hands of the less imaginative but much more functional Italians made it clear that the most worthy are not always rewarded. Secondly, I came to realise that no boundaries, be they geographical, social or emotional, can contain the unifying power of sport. We were driving through what was then Yugoslavia when the Italians were taking on Brazil. We stopped at a village for something to eat but found the streets completely deserted. Like extras in a spaghetti western, we searched for signs of life before stumbling on the locals ensconced in cafe, watching the game together in absolute fascination. Ten years later, this same group of people would be torn apart by ethnic war.

In 1986, the football world gathered in Mexico and I was given special parental dispensation to stay up to watch the games being played in exotic-sounding places like Guadalajara and the Azteca Stadium in Mexico City. Two memories stand out from this summer – the first is recreating scenes from the World Cup on the football pitch with my schoolmates. We were all given names of the players we resembled and lunch breaks immediately became flights of fantasy in the afternoon sun. The other memory is more of a childhood trauma, which involved sitting on an Athens balcony on a hot summer night and watching Argentinean midfield genius Diego Maradona punch the ball into the net to set his team on the way to knocking my beloved England out of the tournament. Aged 11, I was in a complete state of shock. I did not for a second believe that authorities would let this stand and was convinced that the next day football’s world governing body, FIFA, would order the game to be replayed. When this didn’t happen, I started a petition. I only ever got around to collecting three signatures – two of them were my parents’ and the other was my grandmother’s. She had no idea who this dastardly Maradona chap was but he had clearly upset her grandson and that was all the reason she needed to sign on the dotted line.

My indignation at Maradona’s cheating blinded me to the sublime nature of his second goal against England that day, as he danced passed player after player to score what many believe is the best World Cup finals goal. Years later I would be able to marvel at how his balance and strength were for a few seconds in complete harmony with his improvisation and creativity. But in the summer of 1986, I was too busy coming to terms with the fact that cheaters sometimes get away with it and that fairness can prove as elusive in life as a stocky man from the slums of Buenos Aires weaving his way towards goal.

In Italy four years later, there was more anguish for England as they were eliminated by West Germany in the semi-finals. The match became synonymous with the tears of young English midfielder Paul Gascoigne, who was inconsolable after England’s defeat. I shared in his tearful dejection. The obliviousness of youth meant that I had never considered defeat was a possibility for the team I was supporting. Coping with its reality proved a test of my emotions. Coming a few months after my mother’s death, England’s loss revealed to me that pain and disappointment don’t come in neat packages but that they can crash in on you like waves, one after another, and you either stand up to them or face being swept away. Gascoigne, known simply as “Gazza” in England, never fully recovered from his disappointment in Turin in 1990. Although his career lasted almost another decade, it was blighted by injury, controversy and drink and drug problems. Gascoigne is still struggling with his demons in retirement and is a stark example of how fame can destroy people as well as create stars.

It was Gazza’s tears that first made me aware of the fact that I was not the only one experiencing moments of clarity thanks to the World Cup. It was also happening on a collective level. England’s unlikely run to the semi-final in 1990 and its unjust defeat to the Germans prompted a rare awakening of people’s conscience back home. It led to England increasingly trying to establish and project its identity through sport. More importantly though, the English had recast themselves in the role of gallant losers who wanted to be loved rather than aloof snobs. The game against the West Germans inspired a play, a film, a documentary and a host of books suggesting that England had emerged from the embarrassment of the hooligan- and Thatcherism-filled 80s with a new creative, positive energy.

At this point, I began to join the dots and connect the significance of what was happening on the field of play with what was taking place beyond the confines of football. This link was described most eloquently by journalist Arthur Hopcraft in his 1968 book “The Football Man”. “It [football] has more significance to the national character than theatre has,” he wrote. “What happens on the football field matters, not in the way food matters but as poetry does to some people – the way we play the game, organise it and reward it reflects the kind of community we are.”

My first visit to a World Cup was in 1998 when France hosted the tournament and the local team’s victory was certainly taken as a reflection of the successful integration of different ethnicities and nationalities in the country’s social fabric. Such powerful symbols are too important for politicians to ignore and it was at this tournament that I became acutely aware of how desperate leaders are to bask in sport’s glory. French President Jacques Chirac – who along the country’s other politicians had been largely oblivious to the tournament until France started to do well – attended the final with a France scarf awkwardly draped over his shoulders, looking as if he had mistakenly put on one of his wife’s shawls for the evening. If the Brazilian strikers had displayed the same opportunism against France in the final, he would have little to celebrate and no opinion poll “bounce” to enjoy after the match.

The enthusiasm displayed in Germany eight years later was much more genuine. I experienced first-hand a nation that embraced the event – not just its own team – and used the World Cup as an opportunity to break down stereotypes. This attitude was reflected in the country’s national team, which played with a freedom and attacking spirit that was untypical of its predecessors as it progressed to the semi-finals, where it was beaten by Italy. The Italians defeated France in the final, where it’s captain and the epitome of racial equilibrium, Zinedine Zidane, was sent off for headbutting an opponent.

Zidane’s dismissal proved to be the moment when French harmony began to disintegrate. Just as the team imploded at this year’s World Cup amid a bitter exchange of insults between players and coaching staff, so France appears a society ill at ease with itself and in search of a collective identity.

Germany is another country which is going through turmoil – political rather than social. Once the spiritual and physical driving force of the European Union, Germany is now suffering a crisis of conscience. So, it was no surprise to see Chancellor Angela Merkel in the stands of South Africa’s stadiums, cheering on her country’s young, effervescent team, hoping some of the positivity would rub off. In their progress to the semifinal, their determination to attack games rather than to rely on the all-out defensive tactics that have been popular with many teams helped to dispel the image of Germans as cautious conservatives who could not inspire others to admire or respect them. “In the history of German football, there have been many successes but they were expected, hard-fought and enforced. Achieved with limited skills, with accomplished destroyers who made life difficult for the star opponents, with iron feet, iron calves and an iron will,” wrote Die Welt daily after Germany’s historic 4-1 win over England in the second round. “Often our national team was strangely alien to us. We wanted to love them but we were unable to. They often found their way into the semi-finals and finals but rarely into the hearts of fans.”

The performance of individual teams apart, South Africa’s World Cup has taken football’s significance to another level. First of all, there was an opportunity for Africans to come together, especially when Ghana were the continent’s last remaining representatives in the competition. “Ghana’s exploits, and the team’s epically tragic exit, arguably did more for grassroots African unity in a few days than the African Union did over decades,” wrote Simon Tisdall in The Guardian on July 7. “It also re-focused attention on the lack of African coaches and under-investment in the sport and the young people that play it.” FIFA certainly wanted to make this last aspect – offering young South Africans an opportunity to learn football – to be a lasting legacy of this World Cup, The efforts that have been made so far have been laudable. Whether they will have a lasting impact remains to be seen. However, one of this tournament’s greatest legacies will be something that FIFA could never plan. It’s the fact that thousands of Europeans, Asians, North and South Americans have had first-hand experience of the huge divide in living standards that exist in South Africa and of the barriers that still exist in this beautiful country. It’s the thousands of foreigners who have visited Robben Island over the last few weeks and have been reminded or made aware of the damage that hate can wreak. It’s the fact that outsiders have had an opportunity to contribute to South Africa’s future, like the group of England fans who built an orphanage in the Valley of a Thousand Hills. The World Cup won’t make South Africa a fair or equal society but if it can help push it in that direction, then it’s been a worthwhile effort.

So, now we look to Sunday’s final between the Netherlands and Spain, which will no doubt also provide plenty to absorb. The winners will see at as confirmation that their country is doing something right while the losers will hold an inquest into what they are doing wrong. For the rest of us, there will be something very tangible to take away from the game – it will be less than 1,460 days until the next tournament begins in Brazil, when we can all attempt to measure out our lives, individually or collectively, again.

Nick Malkoutzis

A dangerous game

Illustration by Manos Symeonakis

If you typed the word “Greece” into an Internet search engine a few weeks ago, all you would have got in return were stories about the economic crisis. If you conducted the same search over the past few days, those reports would have been about the national team’s involvement in the World Cup. That’s the power of sport – it doesn’t always write history but it defines the present and that’s the hard currency the world’s politicians increasingly deal in, which is why they both love and fear sport, especially its most popular exponent, football.

Sport has a unique ability to unite disparate sections of society in a way that politicians can only dream of. No amount of slick campaigning or spin doctoring can give leaders the kind of universal appeal they get by associating themselves with successful sportsmen or teams. No amount of populist rhetoric and analysis of focus group statistics can help politicians connect with the public in the way that relating to sport can.

“You can occupy a cathedral and you will have upset Catholics, a fringe of approving dissidents, an indulgent left wing, while the secular parties will be (secretly) happy. You can occupy a party’s headquarters, and other parties, with or without a show of solidarity, will think it serves them right,” wrote Italian author and philosopher Umberto Eco. “But if a football stadium is occupied, the disclaiming of responsibility will be total: Church, Left, Right, State, Judiciary, Divorce League, anarchist unions, all will send the criminals to the pillory.”

An example of how football can lure politicians who want to bask in its glory came at the beginning of this week when Prime Minister George Papandreou, who hitherto had not shown any interest in sport beyond jogging and going to the gym, lauded Greece for its 2-1 win over Nigeria at the World Cup and suggested it should serve as an example for his government. “The Greek national football team won because the players displayed team spirit, which is something that Greece needs if it is to overcome the economic crisis,” he said.

Interestingly, the prime minister had not commented on Greece’s 2-0 defeat to South Korea in the opening game, when the team’s disjointed performance would presumably have served as an even timelier reminder that his government will have difficulty getting anything done if it remains as divided as it is now. Equally, the 2-0 loss against Argentina might suggest that a lack of decisiveness in the face of powerful forces will lead to the country’s ultimate failure.

Politicians toy with sport at their peril – its outcome cannot be predicted by an opinion poll and it has an uncanny knack of refusing to conform. Papandreou joins a long line of his political colleagues that have hoped a positive result on the field of play would lead to favorable developments off it. Most of them end up being deeply disappointed.

In 1970, British Prime Minister Harold Wilson had been hoping that a rousing display by England at that summer’s World Cup in Mexico would help his Labour Party be reelected. But England, then world champions, suffered a shock 3-2 defeat to Germany in the quarter-finals despite having led their opponents 2-0 late in the game. Four days later, on June 18, Wilson and Labour suffered an unexpected loss of their own at the ballot box despite having held a 7.5 percent lead in the opinion polls three weeks earlier. Wilson denied any connection between the two events. “Governance of a country has nothing to do with a study of its football fixtures,” he said. But the memoirs of top officials published in later years revealed that strategy meetings had been held when the elections were called to discuss the possible impact of an England defeat.

French President Nicolas Sarkozy is the latest leader to reap the ill-wind of a sporting disaster after his country’s national team imploded in the most spectacular way at the World Cup. The decision of striker Nicolas Anelka to cast aspersions about the sexual habits of unpopular coach Raymond Domenech’s mother during a half-time team talk sparked an almighty crisis of confidence within the team and crisis of conscience at home. Anelka was expelled by France’s soccer federation after the content of his outburst was leaked to the press. The players refused to train the following day in protest at his dismissal.

Sarkozy dispatched his Sports Minister Roselyne Bachelot to try and smooth things over. Bachelot said that she and the president shared “the indignation of the French people” and called for “dignity and responsibility”. Back in France, the squad’s disintegration was seen as reflecting a failed society and a failing president. “Soccer should be exemplary, but instead it has become a symptom of everything that is wrong with France: the lack of respect pupils have towards their teachers, contempt for authority, civil disobedience,” said Parisian Left Bank philosopher Alain Finkielkraut.

“We take them to be role models for kids who lost their way in life, but in reality they are just bling bling merchants for a sport which yesterday lost a lot of credit in France,” wrote daily Liberation of the players. The newspaper’s choice of words was probably no coincidence given that Sarkozy is also known as “President Bling Bling” for his showy, sometimes lavish, style.

“The shipwreck of the French team tells us something about the weaknesses of France, of a model of society that is based above all on money, which is adulated,” said Francois Bayrou, president of the centrist Union for French Democracy. Socialist deputy Jerome Cahuzac went even further. “The atmosphere that prevails in the French team is one that Nicolas Sarkozy exults – it’s all about individualism, egotism, everyone for themselves, and the only way to judge human success is the check you get at the end of the month,” he said.

A public relations disaster of this magnitude is the last thing a president with declining ratings wants to deal with. Yet, this is exactly what Sarkozy has been forced to do. After an emergency meeting with Prime Minister Francois Fillon at the Elysee Palace on Wednesday, the president was due to meet star striker Thierry Henry on Thursday. The latter meeting was taking place at the request of the player, underlining just how sport has the power to master politics and not the other way around.

Sarkozy’s travails are a far cry from the summer of 1998 when France won the World Cup on home soil with a squad known as the “Blacks, Blancs, Beurs” (Blacks, Whites, Arabs) that was the epitome of racial harmony and social cohesion. Then, President Jacques Chirac and Prime Minister Lionel Jospin enjoyed a double digit surge in their poll ratings. It helps explain why for decades, politicians have tried to harness sport’s positive power and deflect its negative energy. But ultimately, sport, particularly football, has proved too raw, too elusive and too ephemeral for politics to capture and tame. The politicians that remain in the hunt are clearly playing a dangerous game. 

This commentary was written by Nick Malkoutzis and appeared in Athens Plus on June 25, 2010.