Frank Browning

Obama faces Armageddon

The trouble in Greece may be Mitt Romney's best shot at winning the White House

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Obama faces ArmageddonPresident Obama, Angela Merkel and Francois Hollande

September 2008: The collapse of Wall Street giant Lehman Brothers provokes a worldwide economic meltdown.

May 2012: Barack Obama is warned before the Camp David G-8 summit that the financial maelstrom seizing Europe could turn out even worse. If much of Europe slides back into double-dip recession, as Britain has done, millions of Americans will be smacked hard, from Toyota workers in Kentucky to lettuce pickers in sunny California. And almost certainly, Mr. Obama will have turned over the keys to the White House come next January to the “vulture capitalist” Mitt Romney.

Here is the dreadful scenario that growing numbers of analysts fear: Long lines of Greeks, Spaniards and Portuguese pound on bank doors demanding to pull their money out before it is replaced by devalued drachmas, pesetas, escudos. Long-suffering Greek voters fail on June 17 to elect political parties that can form a governing coalition, and Greece takes a messy exit from the Euro. Europe’s already faltering financial system then collapses, sending the entire world into a long-lasting global depression for the new President Romney to tackle.

As one European insider put, the damage could be somewhere “between catastrophic and Armageddon,” while Mexico’s former central banker, Guillermo Ortiz, who was a leading candidate to head the International Monetary Fund (IMF), warned that a Greek exit from the Euro could have “an even bigger impact” globally than the Lehman bankruptcy. “If Greece leaves the eurozone, it could detonate a global financial crisis even worse than the 2008 credit crunch, dry up global trade financing and spur another U.S. recession.”

Seeing all this before the Camp David summit, President Obama joined with France’s mildly socialist president François Hollande in calling for new measures to stimulate European growth, against German Chancellor Angela Merkel’s insistence on austerity über alles. Obama went even further after the NATO summit in Chicago and urged European leaders to recapitalize their notoriously weak banks — and quickly. But his foresight will mean little if they do not come up with a hard-hitting and fast-moving plan of action, which their Wednesday night summit in Brussels failed to do.

Except for minor concessions toward growth, Merkel is standing firm on growth-destroying budget cuts. The “growth agenda” that Hollande and his Italian and Spanish allies put on the table looks like far too little and much too late to stop a global train wreck. And the bleary-eyed announcement early Thursday morning that European Council president Herman von Rompuy would draft a new plan for greater economic unification to back up the Euro looks like a belated step in the right direction that Europe should have taken years ago, preferably before creating the single currency, as American economists warned at the time.

In the meantime, the Euro is falling, investors are dumping Euro assets, and all eyes are on the June 17 do-over of Greek legislative elections, in which European leaders are playing a double game that will come back to haunt them. Publicly, they reaffirm their commitment to “do everything” to keep Greece from leaving the eurozone while framing the elections as “a referendum” for the Greeks to decide whether or not they wish to remain on the Euro. The major media echo the referendum line, and the once-great Le Monde even ran a front-page editorial by its director boldly proclaiming: “The Euro or the Drachma? It’s up to the Greeks to choose.”

In fact, all this poses a premeditated and not at all disguised threat to Greek voters: Back the conservative New Democracy and the Greek Socialist Party (PASOK), who conspired with Northern European banks and exporters to create the Greek mess and then agreed to the no-hope bailout deal forced on them by the European Union, the European Central Bank and the International Monetary Fund (IMF). Back the corrupt old guard who will do our bidding, the European leaders threaten, or we’ll push you even harder. And stay away from the left-wing SYRIZA coalition and its surprisingly effective leader Alexis Tsipras, a 37-year-old former student protest leader and Euro-communist.

Why threaten the Greeks? In their first election on May 6, SYRIZA came in second, and the latest polls now show them winning, but still without sufficient votes to form a government. They would, however, have the votes to make it impossible once again for the old guard to form a governing coalition. The party’s growing strength terrifies investors and poses a problem for European leaders, especially those from nominally socialist or social democratic parties that face similar challenges from a more radical Left.

Contrary to the pretense that Tsipras and SYRIZA want to leave the Euro, they have said again and again that they want to keep the Euro. They know that as many as 75 to 80 percent of the Greeks favor both the common currency and the European Union, and they might well refuse to leave even if the rest of Europe wants them out. Nothing in existing treaties permits expelling any country from the eurozone, and this gives Tsipras and SYRIZA a powerful threat of their own in rejecting the bailout deal, which has destroyed the Greek economy and squeezed ordinary Greeks beyond all endurance.

“We want to force European leaders to face reality,” Tsipras said Monday in Paris in the company of Jean-Luc Mélenchon, the leader of France’s Left Front, which is challenging Hollande’s party in legislative elections on June 10 and 17. “We want to raise awareness that we cannot drive any people in Europe into voluntary suicide.” If not stopped in Greece, Tsipras warned, the same treatment “will be exported to other European countries.”

In refusing even to renegotiate the “hellish” bailout deal, Tsipras is demanding that Europe and the IMF back down, an alternative that European leaders and their friends in the media portray as completely beyond reason. “It is not acceptable for a small country, by its refusal to play by the rules of the game, to continue to put the whole continent in danger,” concluded the front-page editorial in the pro-Hollande Le Monde. “It’s up to the Greeks to choose.” But if they make the wrong choice, the consequences will follow. And “without any qualms.”

That, in all its imperial splendor, is the threat Greek voters now appear to be ignoring. As Tsipras insists, Europe and the IMF will back down, and elements of their retreat are already visible. Hollande, who refuses even to meet with Tsipras, has suggested a willingness to give the Greeks additional time to cut their public spending, while a senior adviser to the German finance ministry suggests that Merkel will blink and make concessions to both Hollande and the Greeks after the elections. But nothing we’ve seen is anywhere near enough to put the Greeks – or the rest of Europe – back on the path to growth and away from leaving the Euro. That would take more than anything now on the table, and the smart money is betting Greece will leave the Euro by New Years Day 2013, with all the damage that will bring.

Europe’s dirty secrets

The EU's future will become clearer this week, as Francois Hollande meets Angela Merkel before heading to the U.S.

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Europe's dirty secretsFrancois Hollande (Credit: Reuters/Gonzalo Fuentes)

Angela Merkel, Europe’s master schoolmarm, scolds her neighbors that they have “no alternative to austerity.” François Hollande, the new French president, preaches the need for growth, challenging Merkel’s leadership with a social democratic alternative. The two meet in Berlin tomorrow, for the first time since Hollande ousted Merkel’s pal, Nicolas Sarkozy. And the tension will be on display later this week, as they head to the United States for the G-8 and NATO Summit. No matter how diplomatically conducted, their conflict will determine the direction of Hollande’s presidency and the very future of Europe.

The debate can be confusing, especially for Americans. Even as Merkel insists on cost cutting, her economic team rushes to explain that Germany has always been pro-growth. Well, maybe, but Merkel’s “growth” more likely means wasting Greece, Ireland, Portugal, Spain and France. Hollande, a one-time professor of political economy, understands this as he preps for the grip of Madame Merkel’s open arms. He knows that she will try to smother him with her much-loved Treaty on Stability, Coordination and Governance, which would press thorny sanctions on any country that fails to hold its deficits below 3 percent of gross domestic product. This fiscal compact, drawn up by Merkel and Hollande’s defeated predecessor Nicolas Sarkozy, mandates harsh spending cuts that would further deflate the continent’s already weak economies, boost  unemployment, agitate unrest, reduce GDP and thereby increase everyone’s debts and deficits — including very likely her own.

Before the treaty becomes binding, though, it still has to be ratified by at least nine more nations, including Germany, where Merkel needs the support of the opposition Social Democrats to get the measure through parliament. Hollande, who is closely allied with them, has promised to block ratification unless Merkel agrees to more growth.

To date, she’s said OK to €10 billion in new funding for the European Investment Bank, greater pro-growth flexibility for the European Central Bank, possible delays for Spain, if not for Greece, on deficit reduction, maybe some Europe-wide money for infrastructure projects like roads and rails, and boosting wages for German workers even at the risk of slightly increasing domestic inflation. However, politically, Merkel’s “growth agenda” appears much too late. Right-wing extremists are already showing new muscle across Europe. Anti-austerity protesters have taken to the streets in Spain and walked out on strike in Britain. Her Christian Democratic Union took a routing in a second state election on Sunday, which gravely weakens Merkel in the run-up to next year’s national elections. Her political kindred lost elections in France and Greece. The latest polls from Athens predict that the left-wing anti-bailout Syriza coalition will win new elections in June if, as widely predicted, the pro-bailout politicians fail to form a governing coalition.

Economically, the German growth talk sounds far too limited and is simply wrong-headed. Taken all together, Merkel’s concessions would barely touch the anti-growth impact of the fiscal compact’s prescribed spending cuts. Does the lady really believe that suicide, personal or collective, is painless?

Growing Irish, Greek and Spanish rebellion has also thrown light on two of Europe’s dirty little secrets. Back in the 1990s, Germany was suffering badly from the huge costs of unifying East and West. The novel solution came with the invention of the European Union and the creation of the euro. German and other northern European banks began flooding the European periphery with low-interest loans. These paid for massive imports, mostly from German industry and much of it from the low-wage factories in the newly liberated Eastern Europe. (In Ireland, farmers chuckled over all the new EU sheep that so crowded the pastures that they fell into the sea.) The late British economist John Maynard Keynes, the bête noire of austerity mongers, could hardly have devised a better application of deficit spending.

Then came the downer. Much like U.S. mortgage creditors, the German and EU lenders knew that many of their borrowers could never pay back the loans without government intervention. They knew that the Greeks and others were hiding the extent of their indebtedness, often with help from U.S. investment banks and their deadly credit default swaps.  Far worse, German industrialists – like Siemens and Ferrostaal – paid bribes by the millions to highly receptive Greek officials. So much for German self-righteousness and Greek corruption.

Shorn of the shoddiness, European institutions today could easily provide a similar flow of life-saving funds to the faltering economies through a combination of printing money, borrowing, and raising taxes, which could include a Tobin tax on financial transactions. Given the low level of demand, any inflation would be minimal and could even prove beneficial. All of Europe would then grow, and the beneficiaries could pay down their deficits when times get better. Lord Keynes taught that as well, though it’s a lesson that too many of his would-be followers forget to follow.

As the Nobel Prize winning economist Joseph Stiglitz has explained too many times to count, “If Europe – particularly the European Central Bank – were to borrow, and relend the proceeds, the cost of servicing Europe’s debt would fall, creating room for the kinds of expenditure that would promote growth and employment.”

The Germans had no problem following the  Keynesian path when it served their  own interests, but now Madame Merkel insists:  “Growth on credit would throw us back to the start of the crisis and therefore we will not do that.” Do as we say, not as we did.

Compare Germany’s earlier credit-driven success to the bailout deal that Merkel, the IMF and the European Union imposed on the Greeks and you’ll discover the second dirty secret. No one – neither economists nor policy-makers – ever imagined that the required cuts, privatizations and fire sales of public treasures would allow the Greeks to dig themselves out of their ever-deepening hole. The bailout was never meant to help Greece. Its goal was primarily to buy time: first for the banks and other financial institutions that lent Greece money or hedged the loans; and then for the EU to gather funds to preempt a run on Italian, Spanish, Portuguese – and even French – banks should the Greeks finally abandon the euro (which many German officials now want them to do).

All this prickly platter comes along with Madame Merkel’s “open arms” when she welcomes Monsieur Hollande first on Tuesday in Berlin, and then again in the United States for G-8 and NATO summits later in the week, and it will bubble up at an informal EU summit in Brussels next week on May 23. Merkel hopes that Hollande will accept her concessions as sufficient and have France ratify the austerity-minded fiscal pact. Never a dunce, the French president is more likely to hold off on any firm commitment until next month’s French legislative elections, which his party expects to win.

What will he do then? Will he put his stamp of approval to Madame Merkel’s pro-growth talk? Or will “the red Socialist” as Americans like to characterize him, hold out for a serious growth pact that could bring Europe back into the black?  That will be the big test of what François Hollande is made of.

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Europe’s far right marches on

From France to Norway, the far right is at its greatest strength since World War II

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Europe's far right marches onAnders Behring Breivik (Credit: Reuters)

Marine Le Pen, who put a friendly smile on her father’s neo-fascist National Front, has become “the third man” in French politics and could now determine whether the center-right incumbent Nicolas Sarkozy or the center-left Socialist François Hollande becomes the country’s next president. Geert Wilders, the golden-haired leader of the Dutch Freedom Party, has just brought down the right-wing coalition government that he had supported. And in an Oslo courtroom, Anders Behring Breivik fights to prove he was sane last July when he systematically slaughtered 77 innocent people, mostly teenagers, at a summer camp. He was, he explains, simply trying to spark a crusade against multiculturalism, “cultural Marxism” and Muslims living in Europe.

Le Pen, the “right-wing liberal” Wilders and the unbelievably weird Breivik differ in crucial ways, but they reflect the range and varied thrust of Europe’s far right, which is showing its greatest strength since World War II. All three have given up yesterday’s Jew-baiting, at least in public, and proudly proclaim their support of Israel. They all target Muslims as a major source of Europe’s current woes, preaching a white European nationalism that is largely Christian and intolerant of immigrants and other outsiders. And they all feed on a popular backlash against the European Union and Eurozone and the failure of mainstream leaders to provide any sense of hope at a time of crippling economic crisis.

“Vive Hitler”

Far and away the most important, Marine Le Pen often appears as little more than a right-wing populist seeking protest votes. But this ignores who she is, where she comes from and why she has never disavowed her father’s pro-Nazi past. “It’s the same politics of scapegoating that it always has been,” explains Professor Nonna Mayer, an expert on the French far right at the prestigious Paris Institute for Political Studies, or Sciences Po. “There’s no getting away from it.”

Crafty, charismatic and shamelessly provocative, her father Jean-Marie Le Pen is a former paratrooper and intelligence officer whose unit brutally tortured and killed “Arab terrorists” in Algeria. He created the National Front in 1972, bringing together self-proclaimed fascists, Vichy collaborators, well-known war criminals and more traditional right-wing Catholics. He publicly dismissed the Holocaust as “a mere detail in the history of the Second World War.” He publicly made puns about the Nazi gas ovens. He accused former president Jacques Chirac of being “in the pay of Jewish organizations,” and this February a French appeals court upheld his conviction for denying crimes against humanity when he said that the Nazi occupation of France “was not especially inhumane.” But as far back as his historic 2002 campaign against Chirac, he downplayed his signature anti-Semitism and directed his hatred primarily at Muslims, whom he accused of taking French jobs, threatening French culture and polluting the national identity. “Tomorrow, if you don’t watch out,” he warned, “they will take your home, eat your food and sleep with your wife, your daughter, or your son.”

One overlooked nugget from his past throws unexpected light on what his youngest daughter is now trying to do. In the late 1960s, the elder Le Pen ran a record company that produced “The Third Reich: Voices and Songs of the German Revolution.” The album included such old favorites as “Vive Hitler” and “The Hymn of the Nazi Party.” On the record jacket, Le Pen characterized Hitler and the National Socialists in their rise to power as “a powerful mass movement, altogether popular and democratic, that triumphed through elections.”

Marine shows how this might work today. Trying to remove the historic stigma from the National Front, she has presented herself as a wholesome girl next door become modern-day Joan of Arc. “I am not racist, not anti-Semitic, not xenophobic, but patriotic,” she insists. “Our party is not based on hate toward others, but on love for our own country.” She also dismissed the label “extreme right” and describes herself as a “moderate.” A lawyer with professional self-discipline, she has avoided Jean-Marie’s racist and anti-Semitic remarks, which she rightly sees as inflammatory and counter-productive. She has worked, not always successfully, to tone down her bodyguards and their bully-boy tactics. And she has made a knowledgeable attack on neoliberal economics and finance-dominated capitalism, which many voters found more credible than Hollande’s badly compromised social democratic critique or Jean-Luc Melénchon’s far-left update of Karl Marx.

Still, Marine follows Jean-Marie’s lead. She regularly attacks Muslims and made a huge uproar when a state-owned restaurant chain announced that eight of its outlets would offer exclusively halal meals. Distinguishing herself from Geert Wilders in the Netherlands, she insists that she is “not waging war against Islam,” but only against “the Islamization of French Society,” the phrase Jean-Marie used in his 2002 run for president.

All this picked up in March, after the killing of three French paratroopers, a rabbi and three Jewish schoolchildren in and around Toulouse. The alleged and apparently self-admitted killer, Mohamed Merah, was a French Muslim, and Marine wasted no time in escalating a string of blistering attacks against “radical Islam” and the laxity of Sarkozy’s government in allowing Muslim neighborhoods to fall into “the hands of bullies and fanatical imams.” Sarkozy himself gave legitimacy to her Muslim-bashing, shamelessly competing with her for the anti-immigrant, anti-Muslim vote and further helping the National Front gain acceptance as a respectable part of French politics.

Now, in the May 6 presidential run-off, she seems unlikely to endorse either Sarkozy or Hollande. The only question is whether she will encourage her voters to abstain, which if they do will guarantee defeat for Sarkozy and his UMP, the Union for a Popular Majority. Her goal, openly discussed, is to win several seats in June’s parliamentary elections and join forces with right-wing UMP defectors in a “Blue Marine Rally” to become leader of the country’s conservative opposition. This will be no easy task, but don’t underestimate her drive or determination. She is, after all, the daughter of Jean-Marie Le Pen, only more effective and, in our opinion, more dangerous.

Kicking Over the Table

Geert Wilders knows how to make people angry, and rarely more so than last week when he suddenly walked out of talks to cut the Dutch budget deficit to 3 percent, in line with longstanding and often ignored European Union requirements. His Freedom Party holds 23 seats in the lower house of parliament and his refusal to continue supporting the governing right-wing coalition forced the government to resign and schedule new elections for September. A caretaker government has just announced a new austerity budget deal without Wilders, but any further uncertainty could cause the country to lose its highly prized AAA rating on government bonds. No wonder backers of the customary Dutch consensus are railing so loudly against him for “kicking over the table.”

Wilders first gained notoriety – and support – with his abrasive attacks on Islam, which he sums up in a new book, “Marked for Death: Islam’s War against the West and Me.” He generally steers clear of Le Pen’s National Front and other right-wing groups with fascist roots, but has been no less militant in his passion against immigrants and Islam. He called on his fellow citizens to stop the building of new mosques, to prevent Muslim women from wearing full-face veils and to ban sales of the Koran, which he compared to Mein Kampf. Speaking in New York on Sept. 11, 2010, he condemned plans to build the Park 51 Islamic mosque and cultural center two blocks from ground zero, a project that the city’s mayor, Michael Bloomberg, had stuck out his neck to defend in the name of tolerance.

“Mayor Bloomberg forgets that openness cannot be open-ended,” Wilders countered. “A tolerant society is not a suicidal society. It must defend itself against the powers of darkness, the force of hatred and the blight of ignorance. It cannot tolerate the intolerant – and survive.” Or, as the French Revolution’s Louis de Saint-Just defended the Great Terror and its guillotine, “No liberty for the enemies of liberty.”

But Islam and immigration have never been Wilders’s only issues. A longtime Eurosceptic, he helped defeat the proposed European Constitution in the 2005 referendum and has talked about the advantages of leaving the Euro. Now he goes even further, risking his political career with an all-out attack. The polls say he will lose seats in the next election, which he will make a referendum on Europe, “unelected Eurocrats” and “the diktats of Brussels.” Given the continuing failure of European leaders to deal effectively with either the economic crisis or the growing backlash against their largely undemocratic institutions, don’t bet against him.

Deconstructing Breivik

Whatever the court in Oslo rules on the sanity of mass murderer Anders Behring Breivik, he is not wired like the rest of us. Prosecutors have skillfully forced him to admit that he has greatly embellished with “pompous language” all his talk of his Knights Templar secret society, covert cells of superbly trained Christian warriors and the 1,500-page compendium he called a European Declaration of independence. “So if you take away all the pompousness, what are you left with?” asked the soft-spoken government attorney Inga Bejer Engh. “You basically sat in your bedroom, on your own, and you copy-pasted your so-called compendium from the Internet.” Breivik had gotten the platform he so desperately wanted and he stood revealed as a failed businessman, a fraud, a video addict and, in the devastating headline of London’s Sunday Times, a “Loser Who Lived with His Mum.”

The deconstruction of Breivik brilliantly serves the needs of the Norwegian court, which can now find him criminally culpable without giving any credence to his claims. It also soothes the feelings of those who lost their loved ones or survived the nightmare he created with his car bomb in Oslo and his killing spree on Utoya Island. But the courtroom drama obscures a larger truth. Breivik may be living out a fantasy, but many far-right Europeans share the anti-Muslim, anti-immigrant and anti-elite views he expressed.

The newly respectable Marine Le Pen makes this clear. She immediately issued a statement saying that “The National Front condemns these barbarian and cowardly acts and expresses its total solidarity with the people of Norway.” But she continues to argue that “fear of a crazy man” will not stop her from fighting against the Islamic fundamentalism, Sharia law and the Islamization of France. Her father went even further, blaming the killings on Norway’s failure to understand the danger that wide-scale immigration poses to the world. As he said at the time with undiplomatic directness, “The murderous consequences seem to me much more linked to the naivety of the Norwegian state than the madness of this crazy person.”

For all their differences, the Le Pens, Wilders and even Breivik are all singing from the same hymn book, as Europe’s far right marches on.

* Research for this article was funded in part by One Horizon.

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Sayonara, Sarko!

He'll likely lose reelection. And in France's Sunday contest, the real winner could be a spoiler on the left

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Sayonara, Sarko!Nicolas Sarkozy gestures as he delivers a speech before building trade professionals as part of his campaign in Paris, April 17, 2012. ) (Credit: Reuters/POOL)

When French President Nicolas Sarkozy picked Place de la Concorde to stage his big Paris rally earlier this month, he was cloaking himself in the past conservative glories of Gen. Charles de Gaulle and Jacques Chirac. Even more, he was reliving his own victory parade in 2007, when “Sarko the American” promised to completely reform the French economy. But, as state-owned France 24 reminded its English-speaking viewers, the historic site was also where the original French revolutionaries brought King Louis XVI and Queen Marie Antoinette to the guillotine in 1793. Ah, yes, let them eat cake.

Sarkozy will begin to discover how his own fate compares when French voters cast their ballots Sunday, on April 22. His prospects look dire. Former President Chirac, whom he served as finance and interior minister, and many of Chirac’s family have told friends that they will vote for the center-left Socialist Francois Hollande, while mid-week polls show Sarkozy and Hollande in a dead heat at 27 percent each, far short of the majority either would need to win. The second-round runoff comes two weeks later, on May 6, and the polls predict that Hollande will win by as much as 12 percentage points. This would make Sarkozy the eighth European leader to fall from power since 2010. Hard times take their toll.

A decent enough apparatchik, Hollande headed the Socialist Party for many years, but never held high public office. He won his party’s nomination only after then IMF chief Dominique Strauss-Kahn found himself sucked into a New York City rape trial, and his campaign has generated little enthusiasm, especially among the young. As Hollande himself admitted, he has met far more people who want Sarkozy out than want him in. Should he win, which almost everyone including Sarkozy seems to expect, Hollande will owe his victory largely to Sarko-fatigue. Much of the country has grown tired of the flashy President Bling-Bling, with all his billionaire and show-business friends, and fed up with his running around like a hyper-active 3-year-old forever screaming “look at me.” Hollande, by contrast, has presented himself as calm, collected and more traditionally “presidential.”

Hollande’s program offers less of a contrast. Playing to widespread populist anger, he has promised to tax incomes over 1 million euros a year at a 75 percent rate, to consider higher taxes on luxury goods and a higher minimum wage and to return the age at which workers can retire and qualify for pensions to 60, provided they have worked and paid into the system for more than 40 years. He has also promised, at least rhetorically, to wage war on finance. But, like Sarkozy, he has emphasized the need for spending cuts, debt reduction and more austerity even in the face of a sluggish economic recovery in France and most of Europe. Kinder and gentler, he promises to balance the national budget by 2017, where Sarkozy promises to make the needed cuts by 2016. Either way, the drastic belt-tightening seems certain to slow economic growth even more, destroy jobs and further weaken the country’s hard-won social safety net.

In other words, more of the same bitter medicine that Dr. Sarkozy has prescribed, with a new face, a lot less frenzy and a few stabs at the rich. No wonder Hollande has failed to stir up much excitement. But one lesser candidate has, a former Socialist minister named Jean-Luc Mélenchon, a Trotskyist in his post-1968 youth who is running with the support of the Communist Party under the banner of the Left Front. Socialist Party supporters earlier dismissed Mélenchon as a Nader-like spoiler who could take enough votes from Hollande to allow the ultra-right National Front to slip into the second-round runoff, as they did in the presidential election of 2002. But the fiery Mélenchon has roused large enthusiastic rallies and surged to 15 percent in the polls. He could even take third place away from the National Front’s Marine Le Pen.

Third place? As many American voters might ask, so what? The answer is what makes French politics so different from our own and so fascinating to foreign observers. Candidate Hollande will want Mélenchon’s backing to guarantee victory in the second round, and the price he will have to pay could well change the way President Hollande will have to rule.

Mélenchon’s program is classic old French Left with a large dose of Keynesian economics and a lot more populist fire. He wants, quite rightly in our opinion, to seriously regulate the financial sector and to stimulate economic growth rather than impose more austerity. He also wants to withdraw from NATO. And, far more counterproductive in the current crisis, he wants to tax all income over 360,000 euros a year at 100 percent, raise the minimum wage by 20 percent, greatly increase the coverage of France’s celebrated healthcare system and renationalize certain industries.

If much of this sound hauntingly familiar, the last Socialist to win the presidency, Francois Mitterrand, similarly tried in the early 1980s to create Keynesianism in one country, and no one can deny that he failed miserably. The rich went on strike, taking their money out of the country, and Mitterrand famously reversed course without a fight. In place of attacking neoliberal economics, he led the way in turning the Common Market into an even more big business-friendly European Union. He also led in creating the ill-fated euro, which has exacerbated so many of Europe’s current economic problems, as American economists predicted it would.

But Mélenchon is no Mitterrand. He broke with the Socialist Party to oppose the treaty for a new EU constitution, and helped ensure its defeat in the French referendum of 2005. And where the elitist Mitterrand never mobilized his followers after he used them to win the presidency, the populist Mélenchon seems almost certain to take to the streets even after he loses. The test will be the May Day celebrations, which fall conveniently before the runoff. Expect to see an army of clenched fists, red flags and spirited singing of the Internationale, even as Mélenchon urges his supporters not to abstain, but to vote in overwhelming numbers for the soft and squishy Francois Hollande.

What will Mélenchon and his supporters get in return? He has already said that he would not join Hollande’s government, as he wants to remain free to fight for what he believes. He could change his mind, but more likely would be an electoral arrangement with the Socialist Party that enables the Left Front to gain a significant number of seats in June’s parliamentary elections. For good or ill, this is where the Mélenchon movement could gain traction, so please stay tuned.

In the meantime, Sarkozy is already criticizing Hollande as a hostage of Mélenchon’s, and has warned that a Socialist victory would set France on the path to becoming another Greece. Mélenchon is also looking at the Greek tragedy and dramatically compares Hollande to the Socialist Prime Minister George Papandreou, who tried to impose as much austerity as he could and was then forced to resign. Mélenchon calls France’s likely new president “Hollandreou.” It’s not nice, but it makes the point.

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Gunter Grass was right

His controversial poem about Israel may have lacked elegance, but it was also a dire warning about war with Iran

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Gunter Grass was rightGunter Grass (Credit: Reuters/Susana Vera)

With his controversial poem on Israel and Iran, Günter Grass has irritated, provoked and outraged people everywhere. As Germany’s greatest living writer and a Nobel laureate in literature, he has also raised a question both inconvenient and impolite. How can decent people support a preemptive war against Iran for moving ever closer to a limited nuclear capability and, at the same time, turn a blind eye to Israel’s extensive arsenal of existing atomic bombs?

Especially in a country with so much Jewish blood on its hands, this is – or was – a question that no Good German should ask in public. It was even more verboten when asked by someone who had belatedly admitted that as a teenager he had served, however briefly, in the Nazi paramilitary unit, the Waffen SS. But the 84-year-old Grass dared to break the taboo. He spoke out and said “What Must Be Said.”

Yet why do I hesitate to name
that other land in which
for years—although kept secret—
a growing nuclear power has existed
beyond supervision or verification,
subject to no inspection of any kind?

Predicting he would be branded an anti-Semite, as he has been in full measure, Grass named Israel and called its atomic power a threat to “an already fragile world peace.” Nor did he stop there. He berated his own country for complicity by selling the Israelis “yet another submarine equipped to transport nuclear warheads.”

Germany had already given Israel two Dolphin-class submarines, and subsidized one-third of the $540 million cost of another. The Germans are planning to similarly subsidize the sale of the latest submarine.

Nuclear arms and submarines are enough to drag down any poem, and “What Must Be Said” lacks elegance and grace, at least in the English translation by Breon Mitchell. But as a poet, Grass risks even more in suggesting a political solution. Our leaders should renounce the use of force, he writes, directly countering Obama’s insistence on keeping a military option on the table. And they should “insist that the governments of both Iran and Israel allow an international authority free and open inspection of the nuclear potential and capability of both.”

No other course offers help
to Israelis and Palestinians alike,
to all those living side by side in enmity
in this region occupied by illusions,
and ultimately, to all of us.

Will any significant world leader take up the challenge and publicly support such an even-handed and common-sense approach? Not if the Israeli government of Bibi Netanyahu and his defenders in Europe and the United States have their way. Their purpose in reviling Grass as a Nazi and anti-Semite is precisely to silence anyone who might even consider following his lead.

Odds are that their campaign of vilification will succeed, at least in the short term. But they may be overplaying their hand. In Germany, most of the great and good came down against Grass and his breaking of the old taboo against attacking Israel. But once Israeli Interior Minister Eli Yishai banned Grass from entering the country, German politicians of all stripes have criticized Israel for its “absurd overreaction.” Even more encouraging, few leaders in the rest of Europe have picked up the cudgels against Grass, while several prominent Israelis have publicly rejected any suggestion that he is an anti-Semite.

One might see in all this evidence that growing numbers of people, Jews as well as non-Jews, are growing sick and tired of the old smear. Europe, the United States and several Muslim countries have enough instances of real Jew-hating that crying wolf just to stifle debate has become reckless and counterproductive. One might also see in the current furor signs that both Israel and Germany are becoming “normal countries,” though Grass would be the first to insist that he and his fellow Germans are “tarnished by a stain that can never be removed.”

But, “What Must Be Said” has little time to act as a brake on a dangerous military catastrophe, as Grass still hopes it will. For all the Obama administration’s diplomatic efforts through Turkey and others, the Israeli-American war on Iran kicked off covertly years ago with the training of dissident Mujahideen-e-Khalq terrorists and their targeted killings of Iranian scientists and engineers, as well as with the Struxnet cyberattacks on the Iranian centrifuges. Open war appears almost certain follow, and the only thing likely to stop it would be for hundreds of thousands of voices to call on world leaders to heed Grass’ warning.

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The “NGOs” that spooked Egypt

History shows that the country is right to regard some U.S.-backed aid organizations warily

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The Egyptian protesters, left, spray burning aerosol over Muslim Brotherhood guards outside the Egyptian parliament. (Credit: AP)

Cairo and Washington breathed a sigh of relief last month when Secretary of State Hillary Clinton approved military aid to Egypt. But their hopes for the future proved to be wishful thinking, as Egypt asked Interpol this week to issue red notices for the arrest of six Americans whom the Egyptians accuse of illegally stirring unrest. The Americans are all employees of three ostensibly private groups that Washington funds “to promote democracy” in Egypt and other countries. The State Department paid as much as $5 million in bail for the defendants, all of whom had to pledge to return for subsequent court proceedings. They did not do so, which legally makes them fugitives.

Washington is currently pressing Interpol to deny Egypt’s request, even as other countries in the region regard the American NGOs with suspicion. The United Arab Emirates has just banned one of the American groups, the National Democratic Institute (NDI), and a similar group from Germany, the Konrad Adenauer Foundation. Observers are waiting to see if other countries will issue similar bans.

These attacks – and Washington’s effort to downplay any official role in the supposedly nongovernmental organizations (NGOs) – call into question American efforts to promote change in other countries. They also fuel long-standing suspicions that stem from the earliest days of the Cold War. A little history explains much of the present crisis.

Back in the day, the CIA secretly funded, sometimes created, and often ran supposedly private, nongovernmental organizations to make propaganda and provide cover for covert operations all over the world. The compromised groups included the Congress for Cultural Freedom with over 60 publications and an international news service, the European Movement, and France’s anti-communist trade union federation, Force Ouvrière, which worked closely with the legendary labor activist and CIA operative Irving Brown.

Inherently unwieldy and dependent on the willingness of too many people to turn a blind eye, the elaborate apparatus began to come apart in the late 1960s, undermined by growing opposition to the Vietnam War. Ramparts magazine (for which both of us subsequently worked) and other newly alert media exposed the agency’s use of private foundations, including the Ford Foundation, to channel government funds to a long list of CIA favorites. Congressional investigations led by Sen. Frank Church and Rep. Otis Pike revealed even more, creating what many in the foreign policy establishment saw as a void.

To fill it, the Reagan administration and a bipartisan majority of Congress created the National Endowment for Democracy (NED) in 1983. The new law stipulated that NED would work largely through three newly created “core grantees” – the Center for International Private Enterprise (CIPE), International Republican Institute (IRI) and National Democratic Institute (NDI) – and the AFL-CIO’s Free Trade Union Institute, which had a long history of working closely with the CIA.

Would the CIA continue to run the new apparatus under cover of the State’s Department’s “democracy bureaucracy?” It certainly looked that way in November 1985, when the Center for Investigative Reporting teamed up with the French daily Liberation to reveal that NED had secretly intervened against France’s socialist President Francois Mitterrand. As confirmed by the New York Times, NED gave $833,000 to Force Ouvrière and $575,000 to the right-wing National Inter-University Union, which the original exposé described as “the student arm of a banned paramilitary organization linked to political bombings and assassinations.” NED passed the money through the Free Trade Union Institute (now the Solidarity Center), and the AFL-CIO official handling the grant in Paris was the 74-year-old Irving Brown.

“We’re defending democracy in France,” he told the Los Angeles Times, which reported that the right-wing student group had plastered Paris with posters attacking Mitterrand. When the story broke, the U.S. Embassy in Paris denied any U.S. government role.

Flash forward to the present. Both IRI and NDI claim to be private and independent of the U.S. government. But both receive Congressional funding through the Endowment and directly from the State Department and U.S. Agency for International Development. According to their websites, IRI gets less than 1 percent of its funding from private donors, while NDI gets some additional funding from private foundations as well as multilateral organizations and foreign governments, from the U.K. and Germany to Yemen and Namibia.

Freedom House, the third NGO facing charges in Egypt, appears marginally less dependent on taxpayer money. According to its latest available financial report, the U.S. government provided over 75 percent of its funding. But its independence remains suspect. To cite only one example among many, the Financial Times reported in 2006 that Freedom House was “one of several organizations selected by the State Department to receive funding for clandestine activities inside Iran.” Freedom House confirmed the funding for activities in Iran, but declined to give details.

So what did these not exactly nongovernmental organizations do in Egypt? We put the question to one of their staunchest and most knowledgeable defenders, who asked to remain unidentified. Mostly the “NGOs” provided information to various Egyptian groups on how best to prepare themselves to participate in the various elections, he explained. Much of this information came from the experience of political groups all over the world.

Did the three “NGOs” provide this information to groups affiliated with the Muslim Brotherhood? Yes, they did, and our source considered the collaboration extremely beneficial.

Did the three “NGOs” report back what they learned while working in the field? No, said our source, “they do not do political intelligence work for the embassy.” They are, he insisted, “exactly what they say they are,” by which he meant pro-democracy and nongovernmental.

Will Egyptians – and Americans – believe that a U.S. government-funded “NGO” does not share information with U.S. officials or take its marching orders from them? For many, it’s a hard sell given the nearly 70 years in which the U.S. government and its intelligence agencies have made covert use of real and purpose-built “civil society” groups.

Even more troubling, these government-backed NGOs only cast suspicion on truly nongovernmental groups like Amnesty International and Human Rights Watch, and put at the risk the Egyptians and others who work with them. How pro-democratic is that?

But old habits die hard, and the faux NGOs  – even if they are not doing intelligence work — give Washington insight into, contacts with and a degree of leverage over formerly suppressed segments of Egyptian society that are now demanding a voice in who governs their country and how. These include everyone from Islamic groups like The Muslim Brotherhood to the nonviolent activists and computer nerds that Washington helped train and equip.

Does this mean, as many critics allege, that Washington tried to make a revolution in Egypt?

No, that’s much too simplistic. Washington continues to give far more support to old allies in the Egyptian military. From the State Department, CIA, Pentagon brass and military intelligence agencies to “pro-democracy’ NGOs, allied European groups like the Adenhauer Foundation, and various business and professional contacts, the U.S. has a finger in nearly every pie and tries, often without success, to use them all to promote whatever the White House perceives to be American interests in Egypt.

Like it or not, this is how Washington plays the game, and the wholesale meddling will continue unless and until the Egyptians truly decide they would rather run their own country their own way. In an Internet age, the tired tricks of the Cold War will increasingly blow up in Washington’s face, whether in Cairo, Havana or Tehran.

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