It's More Than a Political Crisis, It's an Existential One

It's hard not to think all the time about the crisis that Europe is wading into ever more deeply. Reading the papers these days really reminds of the stories from the early years of the Great Depression: lots of trouble, availability of certain effective responses, but inability of leaders to implement them, individually or collectively, and often even measures that exacerbate the problems. I'm not an expert on international finance or economics, but there are many people writing who are, and if you try to interpret what they're really saying, the picture is grim. Greece won't be able to pay its debts (ever) or even meet Europe's requirements for the next transfer of aid money, but European leaders can't recognize this, even though to some observers (for example my trusty Economist) it's been clear for close to two years. The consequences of a restructuring of the Greek debt would hurt, especially in better-off European countries, like France and Germany, but it would hurt far less than continued uncertainty--uncertainty about what will happen to Greece (stay within the Euro, or not? go bankrupt, and if so, in what way?), but uncertainty especially about whether "Europe" is capable of addressing its most fundamental problems in an effective way. This particular kind of uncertainty also makes it more likely that other European countries become more vulnerable to falling market confidence. Some, we've all seen their names mentioned regularly, do have structural weaknesses in their economies and large budget deficits, but the biggest problem seems to be lack of confidence in "Europe's" ability to contain the real crisis to the weakest link--Greece--and protect the others.

The past day or two, we hear a lot more talk of a likely Greek debt restructuring, but this doesn't mean that the Euro zone's political leaders have accepted its inevitability, let alone their respective public opinions. So we still need to get leaders, Merkel, Sarkozy, to accept the inevitable. Once we get there, however, the next step is reaching a concrete European agreement on this new course, which for its part will then have to be cleared by the many national parliaments. (And as of today, September 23, we're still waiting for the ratification of Europe's last major plan for Greece and the Euro zone, dating back to July 21. You read that right: it's crisis time, but Europe takes more than two months to ratify essential and urgent plans to deal with the situation. Democracy is messy, but this looks more like self-mutulation).

Time is of the essence here, and the way "Europe" operates therefore virtually assures failure. "Europe" has always operated this way through its half-century of integration: very incrementally, often acrimoniously, certainly not always logically, let alone efficiently. (In hindsight, it really wasn't such a good idea to launch a common currency before having the concomitant common fiscal and economic policies in place). According to Angela Merkel recently (probably the one person who could, if she wanted to take the political risk, enforce a different modus operandi) it's still the way things get done, and her implication was that we'll just have to accept this. The scary thing is: she may be right: "Europe" as it exists right now--its institutions, its political leadership, its peoples--really may not be able to act swiftly and decisively, not even when the future of its currency, its standard of living, perhaps its many accomplishments since the 1950s are at stake. Measures that on the merits would make the most sense are politically unreachable, and so leaders don't want to go there, or they go there so slowly as to make the whole process virtually irrelevant.

And so too little gets done too late. That's irritating, but not lethal, in good times. In a dangerous financial situation such as ours today, it may well lead, not just to a new major global financial and economic downturn, it could also end "Europe" as we know it. Of course, if "Europe" can't, won't reach for available, constructive measures to save itself, by definition it cannot be saved, doesn't deserve to be. We'll be sorry in a few years, because for all of "Europe's" significant flaws, life without it is likely to be more chaotic and less prosperous, for Europeans, but also others. It's not that long ago that, in an disorderly post-Cold War or post 9/11 world, we thought that at least Europe had figured out how to work together on an ever-growing number of subjects--a model for other regions, really. Boy, were we all wrong.

Froome Watch: Stage Winner

Our man attacked, got reeled back in, and attacked again for the stage win. For a minute, it looked as if his attack on today's final climb would take him to the overall lead, but Juan Jose Cobo didn't really crack but instead fought himself back to Chris's wheel and even passed him. You could see how both racers were each giving the absolute maximum. But after being passed, Chris found it within himself to get to the finish, and the 20 seconds bonification, first. He was, however, just one second ahead of Cobo, who himself receives 12 extra seconds, and so the total gain was only nine seconds, which still leaves Chris 13 seconds short of the race lead. But it was the most exciting couple of minutes of bike racing I've watched all year. Chris just did his post-race interview and called today perhaps his hardest day ever on the bike. It showed, and what more can one expect? He's on the podium now, and actually looks the women in the eye (all around nice guy!). There aren't too many opportunities left, but Madrid is still a couple of days away (he's happily spraying the champagne around now), so who knows. It won't be the fans who will keep him from winning, if we go by today's conduct. When Chris was on the attack, and Cobo appeared to be cracking, I worried about some person interfering with the race, but even though (as usual on these steep climbs) the fans were all over the road, people cheered Chris just about as enthusiastically as Cobo. So there's probably some battle left, although Cobo seems very strong (and he has a good team). But it's awfully close, especially with these bonification bonuses at the finish every day. Of course, second in the Vuelta is more than anyone, including this Froome fan, expected at the outset. Chris himself seems very pleased too, and why not? It's his big breakthrough: grand tour contender--how many people can say that?

Froome Watch: Live

I am taking a break to watch the last hour of today's stage in the Vuelta, and who's mixing it up in the last intermediate sprint, coming away with two seconds time gain? Yes indeed. On Sunday, Chris also left his leader, Wiggins, behind on the horribly steep Angrilu, and now he's the best-placed rider on his team with a shot at the final victory. My Flemish commentators, Michel Wuyts and Jose de Cauwer, have been in awe of Chris for days now, and who can blame them?

It's About Politics And It's Not Looking Good

I'm not reporting anything new--shouldn't, at least--but even though the current crises in Europe and the U.S. continue to be referred to as "financial" or "economic" or "debt," they're really crises of politics. In Europe, plans that appear to have the best chance at stabilizing the common currency situation require greater political integration (a kind of European government), but no leader interested in his or her survival in power is going to put this to the electorate. Some appear to think that the old European muddling-through approach can get us to the same place without explicit voter approval, but I think they're deluding themselves. The alternative is letting countries like Greece fail as members of the Euro (it may be closer than we think), but that would cost banks and others in wealthier Euro countries money (and it could also trigger another economic downturn), and so we don't want to countenance that either. So what do we, what do Europeans want? Europeans don't want to good times to be over, don't want to make the downward adjustment after collectively living beyond their means for a decade or so. The Greeks don't want to do it, but the Germans don't want to either, and there do not appear to be leaders who can persuade them otherwise. It's not very different in the U.S., as we were able to see during the debt-ceiling farce this past summer. The national debt is a problem, but from what I read, it's especially a problem over the longer term and could be brought under control by some sensible policies for that longer term envisioning both tax and entitlement reform. But either kind of reform would inflict pain, and there's been a lot of it in the U.S. in the past years (though not divided evenly, just like wealth has not been divided evenly--less so than ever in the past 20-30 years), and so there's great resistance to it. This being America, the greatest clamor has been for budget cuts and entitlement reform, but in a time when the division of wealth is skewed so much in favor of the top 5%, and government revenue as a proportion of GDP is as low as it has been in 30 or so years, it's just not politically feasible to try to find all the money there while not doing something about tax loopholes and revenue increases. But a grand compromise appears very remote, maybe impossible before next year's presidential election. I think that the nitty-gritty of political compromise in both cases is so difficult because psychologically neither Europeans nor Americans have truly left the pre-crisis days behind. Many have been forced to do so, of course, but collectively we seem to believe that it just can't be that the 1990s, and even the early 2000s, really are history and that we'll have to adjust to a lower standard of living for the foreseeable future. It's easy to speak of a crisis of leadership, but what leader is going to go to the electorate with this message? It really does look like it has to get worse before it can get better; it may be that we need the collapse we avoided in 2008-2009 for enough people to realize that we're in a different era--a bit like the 1930s. (And maybe then there will be leaders who can force through the reforms needed to repair things). I'm not looking forward to it, and it's not inevitable, but given the problems and the way they fester, I think we may as well brace ourselves. That would be the ultimate irony, though: incapable of reaching for the compromises available to avoid disaster, we'd be preparing instead for the disaster. It would be (at least could be seen as) the bankruptcy of liberal democracy.

Froome Watch, the Bandwagon Version

Not sure if this is the right way to resume, but Christopher Froome, the Team Sky member whom I met last year at the start of the Giro d'Italia, has been doing very well in the Tour of Spain (Vuelta). He stayed close to the lead all through the first week and then did a hell of a turn at the front in support of his team leader Bradley Wiggins last Sunday, grinding off lots of big names in the process (and hanging on when Wiggins took over!). He next surprised everyone, including himself, with a second place in Monday's time trial, beating specialists like Wiggins and Fabian Cancellara ("Spartacus," he of the alleged electric bike--alleged!) on the way to first place overall and the red leader jersey. He lost the jersey to Wiggins yesterday, but he's still sitting pretty in second place. It's great to see a talented young racer pull it all together in a major stage race. So here we are: a new season of the Froome watch, a resumption of blogging here, and very soon also words about matters relating to war and peace.