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Geopolitics

A New Marshall Plan? Why Europe Isn't Ready To Save Itself

No space to sit in Brussels, Belgium
No space to sit in Brussels, Belgium
Carl-Johan Karlsson

We've heard repeatedly the past two months that the coming economic crisis only compares to the rubble after World War II. It would then follow that leaders would look to the Marshall Plan as a model for economic revitalization. That is indeed the reference for European Commission chief Ursula Gertrud von der Leyen, who added in a recent speech that the European Union budget "will be the mothership of our recovery."

Marshall Plan or Mothership, pick your metaphor. But it should be noted that the leading proponents of a joint stimulus plan include Italy, Spain and France, the European countries most affected by the crisis and also the ones with some of the biggest piles of debt (Italy has a debt-to-GDP ratio of around 130%, while Spain's and France's debt are near 100% of GDP.) Northern European nations such as the Netherlands, Germany and Austria remain reluctant to the EU issuing joint debt. Their preference instead for making use of existing financial relief facilities is seen by Italy, Spain and France as a path that will lead to stringent austerity programs dictated by Brussels.

The 19 Eurozone members have so far failed to resolve the deadlock — with no agreement reached during the initial negotiations early this month which will resume on April 23.

Invoking the Marshall Plan has served as powerful symbolism, but the conflict between northern and southern states of Europe is a symptom of a very different situation. Most obviously, what is being discussed is not an enormous U.S.-financed program to rebuild the European market, as was launched after the War by then American Secretary of State George Marshall. Instead, the vast plan for post-coronavirus recovery would require EU-members to pool resources to fund themselves through a budget that has always been a considerably smaller part (about 1%) of the bloc's Gross National Income than the $13 billion of U.S. aid sent to Europe between 1948 and 1951 (roughly $142 billion today). It's also happening as nationalism is rising steadily across Europe, rather than in the wake of the total defeat of the worst kind of nationalism in Nazi Germany.

While the original Marshall Plan forced European integration by barring communists from recipient governments, national leaders today are likely weary of fueling right-wing populism by allocating funds to other countries at a time of national need. Hélène Laporte, Member of the European Parliament from French right-wing party Front National labeled an increased French contribution to the EU budget as "madness."


So far, the EU has made available 37 billion euro as part of a package to cushion the bloc's economies from the impact of coronavirus, while also granting flexibility on budget deficits and state aid. The European Central Bank has also committed to purchase at least 750 billion euro of government and corporate bonds this year. However, with a predicted drop in Eurozone GDP of up to 7%, a viable relief package would have to be in the trillion-euro category.

But beyond the scale of the investment, leading Milan economic daily Il Sole 24 Ore notes that there's also the question of "political responsibility." In an article entitled "The Mythology of the Marshall Plan, Mauro Campus concludes: "To really be honest, nobody in the EU today has the intention to lead the dramatic and much needed transition that's about to open. So let's stop the mindless evocation of historical fetishes."


So while pasting a Marshall Plan onto our current crisis isn't possible, some imminent and forceful action from the EU is clearly needed. If half-measures become the way, it's easy to imagine a scenario where relatively strong economies manage a proper recovery and weaker states see major parts of their private sector go bankrupt. Most certainly, this would fuel nationalism and pose an existential risk to the European single market. That would send the Mothership in a very different direction.


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Geopolitics

Why The Latin American Far Left Can't Stop Cozying Up To Iran's Regime

Among the Islamic Republic of Iran's very few diplomatic friends are too many from Latin America's left, who are always happy to milk their cash-rich allies for all they are worth.

Image of Bolivia's ambassador in Tehran, Romina Pérez Ramos.

Bolivia's ambassador in Tehran, Romina Pérez Ramos.

Bolivia's embassy in Tehran/Facebook
Bahram Farrokhi

-OpEd-

The Latin American Left has an incurable anti-Yankee fever. It is a sickness seen in the baffling support given by the socialist regimes of Cuba, Nicaragua, Venezuela or Bolivia to the Islamic Republic of Iran, which to many exemplifies clerical fascism. And all for a single, crass reason: together they hate the United States.

The Islamic Republic has so many of the traits the Left used to hate and fight in the 20th century: a religious (Islamic) vocation, medieval obscurantism, misogyny... Its kleptocratic economy has turned bog-standard class divisions into chasmic inequalities reminiscent of colonial times.

This support is, of course, cynical and in line with the mandates of realpolitik. The regional master in this regard is communist Cuba, which has peddled its anti-imperialist discourse for 60 years, even as it awaits another chance at détente with its ever wealthy neighbor.

I reflected on this on the back of recent remarks by Bolivia's ambassador in Tehran, the 64-year-old Romina Pérez Ramos. She must be the busiest diplomat in Tehran right now, and not a day goes by without her going, appearing or speaking somewhere, with all the publicity she can expect from the regime's media.

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