It's Wednesday, and as usual I scout around various issues that I have been thinking…
It’s hard to conceive of anything the EU could manage properly
Since Britain left the European Union, the Remainer Woke Brigade (RWB) has associated every little bit of bad news that has been published about that nation to the decision to leave the EU. Op Ed articles, Tweets and the like. All scathing of the decision, indicating a failure to accept the democratic volition of the 2016 Referendum. They lost. They can’t get over it. But in the last few weeks there has been an extraordinary silence from this media ‘traffic’. It is of no surprise to me that this should be so. Their beloved EU has been demonstrating across multiple fronts why no sensible nation would want to be part of it bungling and dysfunctional membership. I also admit that I have been astounded how bad things have become under this European administration. Britain did the right thing in getting free of it even though its political scene is not yet capable of dealing with the new scope it now has. But the events of the last few weeks in Europe have been nothing short of breathtaking in their hypocrisy, incompetence and venality. The cosmopolitan progressive set have surely now realised that their dreams of pan-national workers paradise led by Brussels is just a figment of their own imagination.
First, we are now 13 months into the worst crisis in a century and the virus is hardly under control in Europe.
If we visit the EU’s information source – Recovery plan for Europe – we find a lot of glowing description about the “recovery plan that will lead the way out of the crisis” and “lay the foundations for a modern and more sustainable Europe”.
But we also realise that the NextGenerationEU package was only just agreed upon (December 17, 2020).
The funding plan hasn’t yet been agreed upon by the Member States.
The funding to date that has been disbursed is trivial by comparison with what is necessary and is in the form of loans rather than unconditional disbursements.
The process through which the agreement was finally reached was marked by walk-outs, cross-nation abuse, acrimony and division. There was nothing like solidarity on display.
When an agreement was reached it was pitiful in scope and the proportion of loans rose and grants fell.
The Northern states (including the ridiculous ‘frugal four’) who at the time were experiencing less COVID issues refused to allow the Southern states any leeway in terms of unqualified grants.
This is at a time when GDP growth has been plunging. While there was some recovery during the third-quarter as summer brought some relief from the first wave and tourist spending increased, I expect the situation to deteriorate when we get the next set of data in, given the second wave has been much worse than the first and nations are being forced to go into lockdowns again to prevent their hospital systems from being overwhelmed.
The following graph shows the GDP growth rates for most EU nations (given Eurostat data availability) between the fourth-quarter 2020 and the third-quarter 2021 (red triangles) and between the fourth-quarter 2020 and the second-quarter 2021 (blue bars).
The data captures an economic situation where stimulus was required quickly and in substantial quantum, a requirement that the European Union is incapable of meeting given its dysfunctional structure and lack of solidarity across the geographic space.
I should also add that the Commission caved in on Hungary and Poland so that they would not scuttle the bailout package.
It is obvious that these nations are now violating EU rule-of-law standards. Also, in Poland’s case, the EU relented on its coal rules to allow the nation to continue polluting.
Second, more recently, we have seen the worst of European Commission behaviour in the way it has chosen to deal with the vaccine availability issue.
On January 29, 2021, the EU published – Vaccines: contract between European Commission and AstraZeneca now published – which was an attempt to guilt-trip the company into diverting supply of its vaccine to the EU.
The contract beween the Commission and the company was signed on August 27, 2020.
I don’t propose to go into the arcane legal meanings of words and the like.
It is clear that the contract says that the company will ensure the “best reasonable efforts” to meet issues that arise in its supply chain between the various agreements it has in place with nations and or blocs (like the EU).
The dispute is that the company is producing at various locations but the manufacturing process in Belgium and the Netherlands has encountered issues which means that the EU will not get as much as it thought for the time being.
As a result, the EU is demanding supply produced in Britain is diverted to the EU although the company has indicated its contracts with the British government prevents this from occurring.
The Commission President claimed that “There are binding orders and the contract is crystal clear”.
But we note, for example, that the Australian government signed its contract with AstraZeneca before the EU signed its contract.
And the British government signed its contract in June 2020 – that is, three months before the EU got around to securing a deal.
That delay is not inconsequential and the differential rates of vaccination to date between Britain and the EU nations tells a story in itself.
The company told the media last week that the earlier start to production in the UK has allowed it to smooth out any manufacturing glitches much more quickly in the case of the UK supply.
It is also apparent now that the contract with the UK is binding whereas the EU contract is about “best effort”, although a lawyer would have to tell us what the actual difference between those states is.
The EU’s response has been to rave on about legal obligations under contracts.
But are those obligations only about Europe?
Does the EU also respect the contract, say with Australia which came before its own deal? Or the British contract?
They are all legally binding.
Why should the EU think it has the moral high ground to demand its contract be fulfilled first, which in an environment of supply constraints means that the company would have to significantly deprive other contractual customers?
The EU has also responded by putting in place what are essentially export controls on any vaccine produced within Europe.
They are calling it a “transparency mechanism” (a typical sort of term they use). But it essentially means that the bullies in Brussels can deny authorisation for vaccine exports to non-EU nations.
At last count, 100 countries were included in the ban, including the US, UK, and Australia.
This has consolidated the trend that has been referred to as ‘vaccine nationalism’ which betrays any notion of cosmopolitanism in the EU.
The Europhile progressives love to talk about the big-heart of Europe as opposed to the small-mindedness of nation states.
But I have always said the ‘cosmopolitanism’ of Europe ends at its borders where they allow young children to die on beaches.
But even within the EU, there is no cosmopolitan solidarity or convergence.
The whole set up is divergent.
Already, there is evidence that the rich nations of the world are securing vaccine supply while poorer nations are finding it difficult.
The WHO’s COVAX plan is underfunded and will be under-supplied.
The evidence seems to be that this is another myopic strategy of neoliberal infested nations. It seems the contracts for the rich nations covers their own populations several times.
We cannot have open borders if significant virus is still around and replicating into new strains – which we have no idea whether they will worsen the crisis.
So it is in everyone’s interest to get as much coverage as possible.
I read this report over the weekend – COVID-19 and the cost of vaccine nationalism – which detailed why we should avoid ‘vaccine nationalism’.
One of the constraints on supply is cost.
Which is obviously where Modern Monetary Theory (MMT) comes in.
The rich, currency-issuing countries should announce immediately they will underwrite the purchase and delivery of the vaccine across the globe without requiring any payback from the poorer nations.
A simple stroke of the pen.
The Report makes it clear that this would not necessarily be just an act of charity:
If these high-income countries paid for the supply of vaccines, there could be a benefit-to-cost ratio of 4.8 to 1. For every $1 spent, high-income countries would get back about $4.8.
Such will be the GDP losses in the high-income nations.
But the EU is taking ‘vaccine nationalism’ to a new level with its export controls.
Which is why the Twitter set who constantly run the ‘Brexit is a disaster’ line are silent at present.
Their glorious EU is not drowning itself in much glory with its behaviour on the world stage at present.
It is looking like a very tawdry lot.
It couldn’t organise its contracts in time, now it wants to close its doors and let the rest of the world suffer. Hardly an example of pan-national cooperation.
Then we get to the latest fiasco which really shows how out of touch the EU has become and how self-important it is in its arrogance.
On Friday, January 29, 2021 , the EU invoked Article 16 of the – North Ireland Protocol – which was part of the UK-EU Withdrawal Agreement to formalise Brexit.
Article 16 is entitled ‘Safeguards’ and reads (first two clauses):
1. If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the United Kingdom may unilaterally take appropriate safeguard measures. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Protocol.
2. If a safeguard measure taken by the Union or the United Kingdom, as the case may be, in accordance with paragraph 1 creates an imbalance between the rights and obligations under this Protocol, the Union or the United Kingdom, as the case may be, may take such proportionate rebalancing measures as are strictly necessary to remedy the imbalance. Priority shall be given to such measures as will least disturb the functioning of this Protocol.
The EU triggered the Article apparently to give strength to its export ban of vaccines to Britain.
It obviously had some ridiculous idea that EU-based factories would ship the vaccine produced to Ireland, which would then see trucks full of vaccines heading north across the ‘open’ border (under the Protocol) and then put on boats and sent to London for British use.
Brussels didn’t consult the Irish government in its decision nor other EU Member States apparently.
But given the sensitivity of the North Ireland situation in the years leading up to the agreement and all the hype that was made about a hard border destroying the – Good Friday Agreement – one would have thought that any invocation of Article 16 in the case of the border between the two ‘Irelands’ would have to be based on something massive and be the result of extensive research and consultation.
The fact that the EU takes longer than is always reasonable to reach any agreement when it matters (like the stimulus package) but in this case just trumped up a ridiculous, unilateral decision is amazing in itself.
It tells me that the current EU administration is in chaos and not up to the job.
After a massive pushback from within the EU and from outside, the Commission backed off.
It issued a statement – Commission statement on the vaccine export authorisation scheme (January 29, 2021) – withdrawing the triggering of Article 16.
Embarrassment all round.
But it calls into question the judgement of the Commission bosses and their understanding of the Irish question and its willingness to use Northern Ireland as a pawn in its pathetic global supremacy games.
I note also that the British government is also now imposing export controls on medicines which is a typical consequence of this sort of ‘nationalism’.
Conclusion
I will write more about developments in the EU in the coming days.
But I think the recent behaviour renders any claims that being part of the Union should be a progressive ambition.
I have regularly said that there are some issues that are of such a scale that an organisation like the EU makes sense. Such issues as human rights, refugees and immigration, rule of law, climate change and global health issues.
When I say that I consider the pan-national arrangements should be of the form of inter-governmental agreements rather than treaties locking out Member State discretion to enter and leave according to the political will of the citizens.
But it seems that the EU cannot even manage global health issues, which goes with its disastrous immigration policies, to demonstrate its unsuitability as an on-going construct.
That is enough for today!
(c) Copyright 2021 William Mitchell. All Rights Reserved.
Politics limited by economics, or the economy determined by the politics?
Politician’s would have you believe that they would like to fund all these social goods, but unfortunately the economics don’t allow us. i.e. the economics determine what is politically possible. What we can outlay is limited by what we can raise in tax or afford to borrow. In demonstrating that these are artificial limits on government outlays, MMT expose these politicians. The truth is a larger range of expenditure is possible, but these are curtailed because expansion of social housing, manufacturing industries with high unionised wages, the social wage generally empower the working classes and encourage them to see the economy as something that can work for them; not their master that must be submitted to. Austerity is a political construct to maintain the social order. The politics come first – keeping those who are already on top, there and furthered – and the economic model, neoliberal austerity, is in place to maintain the existing political power structure.
“The following graph shows the GDP growth rates for most EU nations (given Eurostat data availability) between the fourth-quarter 2020 and the third-quarter 2021 (red triangles) and between the fourth-quarter 2020 and the second-quarter 2021 (blue bars).”
Are these dates accurate? I think we are in the 1st quarter of 2021. But it has been a strange year and it would not surprise me if the EU announced economic data ahead of time.
I have a strong hunch that the desperate hope invested in a vaccine, as that thing which will soon allow us to return to the pre-pandemic neoliberal world order, will prove to be forlorn. IMHO, it’s time we faced, as a species, that the old world has died, and that a new one is just BEGINNING its struggle to be born. There will be no “great reset” in the sense of finer tuning or ad hoc adjustments of our former way of life, obscenely oppressive and ecocidal in its trajectory as most us knew. No, I have this overpowering intimation that a “great reset” of this prior world order will be impossible, as this virus (providentially?) stays one step ahead of even the most feverish and draconian efforts to control it. The bottom line, as I see it, is that humanity has reached, has largely forced itself into, an evolutionary turning point from which there is no going back. The sooner we grasp this unalterable reality, wrap our minds and hearts around it, the sooner we can get about the crucial business at hand: the building largely from scratch, brick by brick, of a better, more beautiful world for us and all other living things. One brick already falling into place, thanks to Bill and his colleagues, is MMT, which provides the economic lens through which we must see in order to erect a substantial portion of the new edifice. Horrible and stressful as it is, as much as the suffering brought by the virus has touched all of our lives, what an extraordinary gift it is to be living at this pivotal moment, to be able to do what we can, each in our own way, to move humanity, which now MUST move, onward and upward.
The virus doesn’t snooze while humans waste time trying to gain the upper hand in vaccine politics. We are in a precarious situation now.
Research is showing that the bodies of some individuals with poorly functioning immune responses can become breeding grounds for new versions of the virus. Any single mutation could easily change the entire situation for better or worse. In the case of the new “UK variant” the virus transmissibility has increased significantly with no apparent loss of lethality.
There are also new more virile strains emerging in Africa and Brazil.
We will be lucky if this time wasting doesn’t result in a virus that is more lethal, transmissible and resistant to the current batch of vaccines we are now fighting over.
This is a global issue, so a nation getting it’s own population vaccinated, would be no protection against such new strains.
The form globalism has taken, dominated as it is by large corporations, whose business model depends on the neoliberal “rule of law”, that allows them to produce wherever they can best lever differentials in real costs vs real price fetched on the sale of their product in geographically distant regions, has demonstrated it’s vulnerability to changing circumstances.
Looking at things from an evolutionary perspective this form of globalism appears to be set to succumb to a more robust model.
Canada too is among the 100 countries now re calibrating vaccine distribution plans because of this nonsense, and despite having purchased enough vaccine to inoculate the entire population three times over.
It really exposes the folly of allowing the ability to produce so many vital goods domestically slip through our hands; and yet, we have journalists repeating the mantra’s “that ship has sailed” and “it’s impossible to turn back now” over and over.