Germany's blind spot: Latin America

At the beginning of the year, I wrote a post about Europe's foreign policy vis-à-vis Latin America with hopes for a boost of the relationship due to the Spanish EU presidency. Unfortunately, near state bancruptcies in some European Member States, tragic earthquakes in Haiti, Chile and Turkey as well as a dispute about the creation of the new European foreign service have tied up the EU's resources and a real breakthrough for the EU-Latin American relations is not in sight.

Meanwhile, Latin America has once more underscored its objective of leaving the US-American 'backyard' and becoming an independent region having an important word in global relations with the founding of the Community of Latin American and Caribbean States (CALC) in February 2010. The organization includes all Organization of the American States (OAS) members but USA and Canada, which is a clear signal towards more independence of the region.

Some Member States of the EU have understood that Latin America will be a key region in the future and have intensified their economic ties in the region instead of waiting for a coordinated EU approach towards Latin America. France winds up arms deals with Brasília, supplying a nuclear-powered submarine and probably Rafale fighters. At the same time Paris is courting Bolivia in order to gain access to the large Lithium deposits in the Uyuni salt lake. Non-EU states, like China, are pushing their economic relations with Latin America with even more force. China has become the number one trade partner of several countries in the region. Germany, on the other hand, has slept through most of the Latin American boom.

Companies from Spain, Portugal and Italy seized the moment when Brazil privatized its telecommunication market in the 90's and invested in the growing market that has gained considerable importance now. The Spanish Santander Consumer Bank is another good example for European companies that have seized their window of opportunity in Latin America. In Santander's rise to becoming a global player in the financial sector, it's early investments in the Brazilian banking sector play a crucial role. German companies did not even have a spectator role in all these developments, also a consequence of Germany's foreign policy that focused on India and China while practically ignoring Brazil. When Angela Merkel visited Brazil for the first and only time yet, she stayed for one and a half days, a bad joke considering the size of Brazil. Additionally it took the German government five months to name a new ambassador for Brazil. The downfall of German interests in Latin America is apparant, especially in comparison to the Interwar Years when 'Made in Germany' became a guarantee for quality in Latin America.

Against this background, it should be seen as a positive sign that Germany's new foreign minister, Guido Westerwelle, has declared Latin America one of his main areas of interest. There is definetly enough ground to be recovered for German foreign policy in Latin America to keep a foreign minister busy for a term or two. As a kick-off visit for his new Latin America strategy he visited Argentina, Uruguay and Brazil for five days. Unfortunately, German media's discussion of Mr. Westerwelle's trip mostly focused on one issue: the composition of his fellow travelers. His companion, Michael Mronz, is already an inherent part of his travels abroad. In the case of Brazil, which will soon host the Olympics and the Soccer World Cup, German news media see a commingling of private and professional interests on part of Mr. Westerwelle since his significant other is an event manager. There are speculations that Mr. Mronz used the trip to meet potential business partners on-site. Other members of Westerwelle's business delegation have been linked to himself and his brother, leading to further accusations of Westerwelle not respecting the red lines of his office.
One can only hope that this political discussion will not be the only public reaction to the foreign ministers first trip to Latin America. After all there were five days of talks with high government representatives in Latin America. The results of these talks should receive their fair share of attention in the national media. This is important for fostering the ties between civil society representatives so important in contemporary foreign politics.

Social benefits discussion revisited

Nearly one month ago I wrote a posting on our societal approach towards poverty, addressing the discussion of social benefits in German newspapers, especially a philosophical discussion in German feuilletons. Already some German right wing politicians were attacking the social consensus on welfare that had developed in Europe during decades.

Now, the German constitutional court recently delivered a judgement on the basis for calculating the social benefits. The judges reasoned that this basis is intransparent and does not take all the cost that incur in everyday life into consideration. This was not a judgement calling for a rise of social benefits, but for an overhaul of the basis for calculation. Theoretically even cuts would be possible as a reaction to the ruling, but in some areas the court deemed it obvious that benefits were too low. This especially applies to the rates for children. So far the needs of children have been calculated as a 60% of adult needs, which is obviously nonsense.

Furthering children and ensuring that they have the possibility to obtain an appropriate education can be very costly. Paying for private tutors, schoolbooks, private lessons for the piano or dancing lessons can easily add up to a monthly sum much superior to what an adult needs in the same period. And this does not even include spendings for clothes. Especially young children and teens need a lot of clothes simply due to the fact that they are growing rapidly.

But instead of triggering a discussion of how we can ensure that the poorest of our society can meet their needs and how to avoid that children growing up in poverty will automatically fail to advance in our educational system, the liberal party immediately started a discussion about the worth of labour in the German society. The discussion was spearheaded by the German foreing secretary and vice-chancellor Guido Westerwelle. After 100 days travelling across the globe and showing a reasonable diplomatic performance many Germans had already forgotten that the leader of the German liberal party was not only capable of a diplomatic demeanor but was also one of the loudest demagogues of the country. Now he has reentered the domestic political stage with a bang.

According to Westerwelle, Germany is approaching socialism and "late roman decadence" because people who do not work are leading lives in "wealth", earning more money than people who are working. Well, there is some truth in his claims. Some people work 8 to 10 hour shifts to earn a wage barely surpassing social benefit levels, but decadence is hardly the word for people struggling to get along with about 380 euros per month. Especially in times in which bankers, whose irresponsible gambling cost society a fortune, lose their jobs well endowed with a "golden parachute" or are even looking forward to record bonuses at the end of 2010. Westerwelle is demanding that the weak should be protected from the resourceful and sluggish. According to him, everybody is talking about the recipients of tax money while forgetting about those who pay taxes. 

What he does not realize is that the current asymmetry between social benefits and low wages might as well be a consequence of the increasing pressure on wages and the wage sacrifices of German workers and not following from immorally high social benefits. We do need a discussion about the worth of labour in our society, but from a completely different angle than Westerwelle is suggesting.

The Euro dilemma

Newspapers have been full of the potential bankrupcy of the Greek state lately. And financial analysts and newsmedia were quick to name the potential future candidates for state bankrupcy when the creditworthiness rating of Greece was lowered. Usually Portugal and Spain are listed first, followed by Ireland and Italy. Many commentators even go as far as seeing the whole Euro currency close to collapse. Having a closer look at the context of the latest developments on the financial markets, it becomes obvious quickly that the situation is not as severe as often suggested, but one will also soon discover the inherent flaws of the Euro system and the major dilemma that EU leaders now confront. From a Latin American perspective these developments are doubly interesting.

First and foremost because Latin America is aspiring to step into the footsteps of the European Union with it's UNASUR project. Since UNASUR is mainly driven by economical and financial integration, like the EU in it's early stages, there are valuable lessons to be learned from Eruope's approach to a common market and currency. This holds even if a common currency on the South American continent may be years or decades away or may even never come.

Secondly, it will be certainly interesting for Latin American states to see, how European states cope with rising debts and dangers of bankrupcy in comparison to, say, the Argentinian approach that tackled bankrupcy aggressively by ceasing the payment of debts in 2001. A decision that eased the pressure on the country's economy and financial system but came at the price that Argentina has still trouble to stock up on money on the world financial market.

Looking at the situation in Europe the figures in question have to be put into perspective first. Greece announced new debts summing up to 12,7 percent of the GDP for 2009, raising its total debt to 120 percent of the GDP. The old government had calculated with a 3,7 percent of new debts, a figure that was nearly quadripled when the new government stopped massaging the figures after years of 'creative' financial accounting. Portugal has debts summing up to around 77 percent of the GDP, Spain and Ireland are at about 50 percent. Spain incurs new debts of about 6 percent, Ireland 11 percent. The EU covenant for financial stability dictates a cap of 3 percent for new indebtedness and 60 percent for the total debt. At first glance these figures look dramatic, and in the case of Greece we certainly have to talk about an alarming situation since this development has been going on for years. Greece's total debt is massive and growing quickly. Speculations on the financial market concerning a possible bankrupcy and quick reactions of the other EU states are thus understandable. But the figures of the other states named as candidates for bankrupcy have to be read more carefully.

States that traditionally had a soft currency, like Spain, Portugal , Italy and also Greece, had higher debt levels and higher levels of new indebtedness in the past. For these countries higher debts have been normal for decades since they could be countered by inflation. And the high velocity with which debts are rising right now can be attributed to the world economic crisis, especially in the cases of Spain and Ireland.

But the figures hide a more fundamental dilemma. In the past the states were solely responsible for their own debts, meaning that they could also manage them with inflation. An exit now blocked by the EU criteria for financial stability. While the financial leeway has been restricted to a certain degree by the EU Commission, financial and economic policies still remain largely in the hands of the national governments. This means that EU Member States having the Euro are following different financial and economic approaches. They are profiting from the financial stability of the euro area which in some cases led to a blockade of economic reform since the need was not obvious in times of economic growth. Other states, like Germany, went through a cycle of economic reforms meanwhile, leading to wage sacrifice on a large scale. Germany thus gained a competitive edge in comparison to other EU states that experienced pay raises unheard-of in their recent history and are now paying the price in times of economic stagnation. They are not equiped to fare well on a global shrinking and increasingly competitive market. Thus, in a way, Germany is partly responsible for the debt situation in other Euro countries since it gained an edge against its European competitors.

Sharing a currency and a market without sharing financial and economic policies has led to this dicrepancy that is now endangering the finances of some member states. Should states like Greece fail to balance its budget, Europe will have to take the unpleasant decision to either help states like Greece and reward economically irresponsible behaviour or face growing doubts about the financial and economic stability of the EU and possibly even a new crisis stemming from the bankrupcy of EU Member States. There is still reasonable hope that Greece will be able to control it's problem on it's own by implementing strict savings schemes monitored by the EU Commission. The heads of the EU Member States declared their confidence in the Greek plans yesterday. But demonstrations in Greece against inevitable cutbacks show that things could become difficult. The demonstrations and the fact that Greece has an impressive record of tax evasion aliment suspicions that many Greek are not ready to pay for an efficient state but are expecting their fellow EU citizens to pay their bills.

The lesson Latin America can learn from these developments for it's own ongoing process of integration is to think twice if it is a wise move to share a currency without sharing economic and financial policies.

Fighting impunity - Latin America's and Europe's support of the ICC

I have already stressed in a couple of postings that Europe and Latin America may be closer in their values and aims than most people tend to perceive. Apart from a common, sometimes tragic, history dating back to colonial times and European imperialism, Latin America and Europe share core values of democracy and human rights. Together with Northern America they are forming a triangle of democratic believes. This is true in spite of tensions that arise in certain intervals, particularly between the US and some Latin American states. As I have stated before, Europe and the US do not further these similarities strongly enough, thus running the risk of losing a potential ally, e.g. to increasing Asian approaches.

I have recently started my research on a doctoral thesis about the influence of International Criminal Court (ICC) procedures on active conflicts. During my research it struck me that Europe and Latin America are the only continents in which the majority of states has signed and ratified the Rome Statute founding the ICC. In fact el Salvador, Guatemala and Nicaragua are the only states that still haven't signed the treaty in Latin America. In the Caribbean, Jamaica and Haiti have signed but not yet ratified the Rome Statute. Additionally, since 2003 the chief prosecutor of the ICC is the Argentinian Judge Luís Moreno Ocampo. Latin America and Europe are thus two of the main pillars of support for the ICC, even though the EU and Japan are by far the most important financiers of the court, providing more than 50% or nearly 25% of the budget respectively.

So what exactly does the ICC do and why are Europe and Latin America especially supportive of its work? The idea to found some kind of international court to judge severe crimes committed in wars and conflicts was already born at the beginning of the 20th century. Nevertheless, the Nuremberg trials, in which some Nazi war criminals were judged for crimes against humanity committed during the second world war, remained the only example for an international court judging crimes of individuals. The political situation during the Cold War made an establishment of such a court impossible for decades. After the cold war things started moving pretty fast though. In 1998 the Rome Statute, aiming to establish an International Criminal Court to judge severe crimes on a global scale, was adopted. In 2002, enough parties had ratified the treaty for it to enter into force. In 2003 the International Criminal Court started its work. Its mandate is to prosecute individuals for genocide, crimes against humanity and war crimes. The mandate is still limited to parties of the treaty or individual nationals of these states but the ICC can start investigations when a case is referred to the prosecutor in the scope of a Chapter VII decision of the United Nations Security Council as was the case with Sudan.

This may be only a first step towards fighting impunity on a global stage and some decisions of the ICC are being criticized as being counter-productive for peace negotiations, but humanity has to start in some way if a spirit of anarchy and impunity is to be replaced by some kind of universal legal order in the future. While the US, China and Russia remain skeptical of the ICC and thus impede a real global reach of the institution, 110 states have already ratified the statute. How come that nearly all of Europe and Latin America has done so?

The explanation lies in similar experiences in the past. While Europe has had it's good share of war crimes, genocides and mass murder in the 20th centuries and has thus decided to fight these phenomena as a lesson from their war ridden history, Latin America has recent experiences with impunity. After the Latin American dictatorships crumbled during the 1970's and 80's, most states passed amnesty laws (often initialized by the very people culpable of the crimes) or held truth commissions. Until today, many crimes remain unpunished, victims unaccounted for and perpetrators are living freely in comfort. These issues remain on the political agenda until today, as the Kirchner's hard-fought efforts to lift the Argentinian amnesty laws and the Fujimori trial in Peru show. The ratification of the Rome Statute is a signal from Latin America's democratic governments, that atrocities like those committed in the past will never go unpunished again. And here we come full circle when considering the biography of ICC chief prosecutor Moreno Ocampo. In 1985 he was assistant prosecutor in the Trials of the Junta, the first trial, in which high military leaders were prosecuted for mass killings since the 1945 Nuremberg Trials.

For further information on the ICC and Latin America consult this article in the ICC magazine of the Crimes of War Project.

How to approach poverty?

Last week Florencia from our bloging network wrote a very interesting article on the criminalization of poverty in Argentina, and interestingly the attitudes towards poor people and people living on welfare are in some aspects very similar to the current discussion in Germany. Of course the political environment is decidedly more polarized in Argentina at the moment with the Kirchner dynasty fighting for political survival, but the arguments which are used on both sides of the Atlantic ocean to deny the necessity of social transfers are interchangeable. Check out Florencia's article (in Spanish) here.

Europe in general and especially Germany is very proud of their social welfare system that they praise as a civilizing accomplishment, particularly in comparison with the United States. The condition of the US welfare system, with about 46 million citizens without medical insurance, and the repeated failures to reform it, show that we are indeed lucky to have developed a network of social welfare institutions that is working reasonably well. Barack Obama's experience with his personal take on the welfare reform, his main campaign promise which is getting more difficult to deliver by the minute, shows how difficult it is to introduce such a system without the underlying historical consensus that has grown in Europe over the decades. But this consensus is increasingly endangered also in Europe.

Like in Argentina, there is a growing tendency in Germany to doubt if social transfers from the rich to the poor are justified. This summer Peter Sloterdijk, a philosopher from the southern German city of Karlsruhe, published an article in the Frankfurter Allgemeine Zeitung, claiming that transferring money via income tax from the middle classes to the poor is a form of expropriation. His main argument was that the hard working middle classes are paying the bulk of social transfers and are such deprived of the fruits of their labor. He suggested that social transfers should be paid on a strictly voluntary basis. A series of agitated reactions and counter-reactions swept through the German feuilleton pages, some attacking others supporting Sloterdijk's argument. Many authors either understood his text as an Utopian vision, others as an insidious intent to abolish the social welfare system. Independently from Sloterdijk's true intentions his article definitely caused some damage to the idea of social solidarity since it voiced the common accusation that welfare transfers are some sort of appropriation. Of course he forgot to mention that the income tax is closely followed by the value-added tax, the second most important source of income of a modern state, that everybody, regardless of his income, is paying. The pool of funds from which the social transfers are paid is much more ample than just the reservoir of income tax funds.

Even more damaging was an article written by the prime minister of the German region of Hessia, who claimed that many people living of social welfare are doing so willingly because they are earning more money staying at home and not looking for a job than they would earn in a regular job. While the problem of unreasonably low wages in some jobs is a real problem and the option to accept any suitable job has to be made more attractive for unemployed, his rhetorics were again aiming at the growing resentment against social transfers in our society. He named the fact that unemployed gain as much, or even more, than working people "the perversion of the Social State Principle". Fueling these growing resentments is a dangerous game since the number of people who understand the ideas behind our social welfare system is slowly but constantly diminishing.

There are two main aims at the core of introducing a comprehensive social welfare system. First of all it is meant to ensure that every human being can lead a dignified life. An idea closely connected to our notion of human rights and democracy and as such one of the core values of our societies. Secondly social transfers ensure social peace and thus create the requirements for the advancement of the wealthy strata of society and establish an environment in which prosperous persons can put their wealth to use.

While nobody dares to contest the first aim directly, the second aim is consequently ignored by those well-off people who vilify social transfers as theft or expropriation. Europeans are dead wrong if they are only looking to other continents for social polarization. Growing economical competition on the global level and diminishing natural resources are eating away at the consensus of solidarity in our societies. The bitter irony about this development is that many well-off people condemning welfare transfers do not even realize that they were initially introduced in their own interest and are still serving them as much or even more than the poor.

The Spanish EU Presidency - towards closer ties with Latin America?

After years of arguments, reforms and failed referendums the Treaty of Lisbon, originally planned to be a constitutional treaty, finally came into force on the first of December 2009. On the first of January 2010 Spain entered the new decade as the first EU-Member State to preside the European Council in the post-Lisbon era. For a country in deep economic crisis this important role of Spain in the first half-year of 2010 is a source of pride and confidence. After traditionally eating the 12 grapes to the tune of the chimes of the clocktower of the Casa de Correos at the Puerta del Sol in Madrid, Spaniards in front of the TV screens  across the nation witnessed how the facade of the Casa de Correos became the screen for their hopes connected to the EU-Presidency. In an impressive light show the flags and well-known monuments of all 27 Member States were consecutively projected onto the old building, culminating in the publication of the beginning of Spain's Presidency. 

While Spain's youth spent the night on the streets to celebrate the new year until the early morning hours, the accurately prepared clockwork of Spanish initiatives for the EU policy in the first half of 2010 slowly kicked into gear. Apart from hackers replacing President José Luis Rodríguez Zapatero's welcome video on the official homepage of the Presidency (http://www.eu2010.es/) with a speech by Mr. Bean for a couple of minutes, things are so far running pretty smoothly.

On the foreign policy side, Miguel Ángel Moratinos is the first Foreign Minister that will have to share his role during the Presidency with the newly appointed High Representative for Foreign Affairs and Security Policy of the European Union, Baroness Catherine Ashton. While the public and the press reacted with incomprehension when Baroness Ashton was appointed to represent the EU's common foreign policy, perceiving the nomination as a sign of lacking commitment to strengthen the common foreign policy through nominating a globally known and respected politician, the tandem is so far working rather well. From the perspective of European - Latin American relations we can still expect to see a lot of movement stirred by those two in the months to come.

One of the first foreign policy initiatives of Spain during it's Presidency is the furthering of rapprochement between the EU and Cuba. Even though these efforts sustained a small setback through the repulse of a Spanish parliamentarian at the airport of Havana by Cuba, things are developing in the right direction. Forging closer ties to Cuba would reflect that the EU is aware of the changes and the complex political realities in Latin America and the Caribbean. Interdependence and integration is steadily advancing on the continent, even though the process is constantly being complicated by tensions between different groups of states in Latin America. Dividing the continent into relished partners (Brazil, Chile, Argentina) and somewhat shady states to be kept at bay (Venezuela, Cuba, Honduras) does not reflect the realities on the ground. Even though the Plan Colombia and the aggressive rhetorics of ALBA states highlight the political faults of the region, bridges are being built at the same time. The UNASUR process, including Brazil and Venezuela, is suffering frequent setbacks but is still slowly advancing. Colombia and Ecuador are slowly reestablishing diplomatic ties after the rupture resulting from a Colombian air strike on Ecuadorian territory and Latin America at least tried to forge a consensus vis-à-vis the coup in Honduras last year. Thus the foreign policy of the EU should try to address the region as a whole and refrain from singling out inconvenient states.

After this first step in the right direction Spain is aiming at dissolving the blockade of the negotiations of the treaties of association between the EU and Mercosur and the Andean Community. Zapatero declared that relations to Latin America are at the top of his list in foreign policy, stating that "If there is a Presidency that is looking towards Latin America, it has to be ours. We have to seize the opportunity." Lets hope that the Spanish Presidency will live up to it's words.

Man of the year 2009

First of all a happy new year to everyone! 2009 was certainly an interesting year. Barack Obama was elected as the first President of color of the United States of America, the G8 was practically replaced by the G20 as the most important forum for global decision-making, and China, India and Brasil have definitely stepped up as future powers on the global stage. But the decade ended nearly as bad as it had started on 9/11/2001. We saw the crisis peak (hopefully) in the summer months of 2009, followed by the UNFCCC failure of Copenhagen which diminished the hopes that humanity will be able to unite in order to face a serious threat to it's future and we saw another attempt at a terrorist attack on US soil on Christmas.

Apart from annual reviews that reflect these major events of each year on TV, the radio, the web and in the newspapers, the compilation of rankings is one of our favorite pastimes at the end of each year. Some of the most popular and influential ones of them present the person of the year. While most of us would probably have guessed that  Barack Obama will become the man of the year if somebody had asked us at the beginning of 2009, his first year in the White House has shown that many people (especially his European admirers) had completely unrealistic expectations. I remember people applauding every sentence that came out of Obama's mouth when I saw him during his Berlin speech at the 'Siegessäule' in Berlin. The enthusiasm did not even diminish when Obama indirectly demanded a stronger German commitment for Afghanistan, a mission hugely unpopular in Germany. Obama is a realist politician whose biggest advantage and worst problem is that people have chosen him as a projection screen for their idealism and hopes. The reactions to him being awarded the Nobel Peace Price show, how strong this discrepancy has become.

So, with Obama out, the person of the year lists get at least a bit more interesting and 'competitive'.  While TIME magazine, for example, opted for United States Federal Reserve Chairman Ben Shalom Bernanke, for his role in keeping the financial crisis in check, the French newspaper le Monde named Bazil's President Luis Inacio Lula da Silva. Apart from the fact that rankings of persons are a deeply subjective undertaking and that one can well doubt if there is any real sense in composing them, le Monde's result is interesting. A European newspaper voting Lula as man of the year 2009 is a signal for Brazil (and with it Latin America) being recognized as a global player in Europe.

One of the reasons of Lula being chosen as the man of the year 2009 by le Monde is surely his huge popularity in Brazil, where he still enjoys a 70% popularity near the end of his second presidency. This popularity has slowly carried over first to Latin America and then beyond. Like the biographies of Barack Obama and Bolivia's Evo Morales, Lula's humble beginnings as a steel-worker inspire people. The extreme divisions between poor and rich in Brazil further accentuate the importance of a worker holding the office of the President. But if le Monde had chosen Lula for popularity alone we could as well forget the list and switch to talking about the movie or the book of the year.

But Lula's top position in le Monde's list reflects a very important development in 2009. Brazil has established itself as a regional power in Latin America in the last few years. Its style of influencing intraregional relations in Latin America focuses on the forging of consensus and on the furthering of integration. And it was an integral part of Lula's Presidency to try to use Brazil's regional importance in Latin America as a stepping stone for its ascension to more influence on the global level. In 2009 this policy bared fruits when the G20, in which Brazil plays an important role, was upgraded in it's importance in the wake of the global financial crisis. Additionally Brazil has been able to position itself as a spokesperson of developing countries and was the only rising power and newly industrializing country that played a constructive role in Copenhagen. Brazil is well on it's way to becoming a respected global power.

Last but not least, Lula sets an example by bucking the trend of Latin American Presidents like Hugo Chavez, Evo Morales, Alvaro Uribe, Daniel Ortega and Manuel Zelaya who aim (or aimed) at a second or third term of presidency despite constitutional barriers. It seems like he did not let his huge popularity go to his head, even though he is trying to use it in order to mobilize the electorate in favor of his designated successor Dilma Rousseff.

Lula has definitely helped to put Brazil, and Latin America as a whole, on the map in Europe.