Jurgen Habermas, famous German philosopher and sociologist on the European Union

Berlin - Jurgen Habermas is a famous German philosopher and sociologist now 86 years young. He still believes in the possibility of rational discourse on issues and rejects post-modernist views.

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Unlike many modern thinkers Habermas does not reject the Enlightenment but considers it an "unfinished project" to be corrected and added to rather than discarded as a basis for understanding. Although Habermas was influenced by the Frankfurt School of Marxism he moved beyond it and rejected postmodernism as well considering it too pessimistic and radical. He was influenced by American pragmatism, and the analysis of speech acts in philosophers such as John Searle, and John Austin and numerous other groups. One of his talents is to meld together diverse threads of thought into some type of unity. Habermas has always spoken out on important issues of the day often in language that is much simpler and clearer than in his academic writing.

Lately he has been speaking out on the issue of Europe. He sees what he thinks of as the European ideal as being destroyed by inept politicians and forces of the market. In a discussion at the Goethe Institute in Paris Habermas says:"I'm speaking here as a citizen. I would rather be sitting back home at my desk, believe me. But this is too important. Everyone has to understand that we have critical decisions facing us. That's why I'm so involved in this debate. The European project can no longer continue in elite modus."

Habermas finds that the EU dictating debt terms to Greece violating its sovereignty "simply unacceptable". He lashes out at politicians complaining that they have no political substance and aspire to nothing except to be re-elected. He accuses EU politicians of cynicism and rejecting European ideals. He recently wrote a booklet on the issues facing Europe "On Europe's Constitution".

Habermas argues that under the pressure of markets the essence of democracy has changed. As a result political power has shifted from the people and voters to bodies that have questionable democratic legitimacy such as the European Council. One might add the European Central Bank. Habermas claims that power has been usurped by technocrats. This is seen in Greece where in return for a bailout Greece must bend to the will of the Troika with the legislature simply being an instrument to legitimize what is commanded.

Habermas argues that an agreement between German Chancellor Angela Merkel and then French president Nicolas Sarkozy in 2011 gave political supremacy to the European Council creating what he calls "post-democracy" in Europe. The European parliament he sees as having little influence. Habermas sees a Europe driven by markets with the EU technocrats exerting huge influence on formation of governments in Italy and Greece. Habermas seems to have forgotten the most elementary aspects of Marxist analysis. It is not markets that are driving the changes but the needs of capital. The power structure is meant to serve the interests of the ruling class. When these interests are seen as deregulating labor markets, reducing welfare costs and social programs etc. then this is what is demanded using debt as leverage. The technocrats are simply servants of these interests. Of course there are opinion differences on what these interests are with some liberal economists wanting to save capitalism from itself and anti-austerity programs that they regard as against the interests of capital. It has nothing to do with markets per se. Indeed free trade agreements have as a key feature enforcement of intellectual property rights that are intended to reduce market competition not foster it.

Habermas is a voice in the wilderness with his continuing belief in reason and the power of public uncoerced discourse in the public sphere. He is not one to try make himself a spectacle or a performer as with a philosopher such as Slavoj Zizek. He believes people discussing political issues and then being able to act within a democratic framework can make things better. He is angry that this is not happening and feels he must speak out with others as a way of eventually changing the situation. He offers no magic bullet to a better future, the only way forward is through discourse and the creation of structures that make the democratic will powerful again.

Eurogroup demands its reforms before it releases cash to Greece

The Eurogroup of finance minister meeting in Riga Latvia had harsh words for Greek Finance Minister Yanis Varoufakis as they refused his bid to find a shortcut to get badly need financial aid.

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Jeroen Dijsselbloem, the chair of the euro-zone finance ministers, ruled out any partial aid payment, such as Varoufakis has requested, in exchange for fewer and narrower reforms:“It was a very critical discussion and it showed a great sense of urgency around the room,” Dijsselbloem said at a press conference after the meeting. Asked if there was any chance of a partial disbursement, he said, “The answer can be very short: No.”Also, Dijsselbloem told reporters at the end of the Riga meeting: "I'll be quite frank - it was a very critical discussion. We had hoped to hear a positive result..we are still far from that."Varoufakis was severely criticized for not bringing forward and implementing the "reforms" demanded of creditors including to pensions and the labor market even though such changes are termed by the Greek government as "red lines" that cannot be crossed. Perhaps the government is intending to show the Greek public that any reform is impossible within the EU. However, there seems to be little or no planning by the government for a possible Grexit or exit from Greece. Given the situation, and the positions of each side, it is hardly surprising that no agreement was reached at the meeting in Riga Latvia yesterday. The discussion on Greece at the meeting lasted little more than an hour. Dijsselbloem made it crystal clear that no funds were forthcoming unless Greece delivered on the reforms demanded: "A comprehensive and detailed list of reforms is needed. A comprehensive deal is necessary before any disbursement can take place ... We are all aware that time is running out."He also warned that if there were no deal completed by the end of June, the 7.2 billion euros in the loan would no longer be available and that creditors would not talk about longer term funding until a full interim agreement was reached.

An anonymous person familiar with the talks said that the finance ministers described Varoufakis as behaving irresponsibly in the talks, and being a gambler, time-waster, and amateur. In spite of this, Varoufakis himself said the two sides were now "much closer together" and that Greece was intending to achieve a deal as soon as possible. The president of the European Central Bank(ECB), Mario Draghi, threatened to even increase the pressure on Greece and warned that ECB policy makers might review the conditions set for emergency funding of Greek banks. The council governing the regulations is said to meet as early as May 6.Some ministers accused Varoufakis of backtracking on commitments he had made and failing to understand the deep differences that divide the Greek government from the position of Greece's creditors. Many eurozone officials believe that without new funds, Greece could default on debt by the middle of May. However, no one seems to know for sure.

The finance ministers were angry that the Greek Prime Minister Alexis Tsipras had met with German Chancellor Angela Merkel on Thursday a day before their meeting in an attempt to get her to approve financial aid and bypass them. He also met with French President Francois Hollande as well. Merkel said that she is not prepared to override the controls requiring that the finance ministers approve any release of funds. Greek Finance Minister Varoufakis also irritates the finance ministers by sending contradictory messages and little detail about the Greek financial situation. Varoufakis described the Friday talks as "intense" and told reporters after the meeting: “The cost of no solution would be enormous, not only for us but also for all."

The situation is becoming so critical that some finance ministers including from Germany and Slovenia have said that the group is considering plans as to what should be done if no deal can be reached with Greece by the end of June when the present bailout loan expires but large Greek debt repayments become due over the summer.

German chancellor supports Sarkozy against Hollande in French presidential elections

The German Chancellor Angela Merkel avoids meeting with Francois Hollande the Socialist Party leader who is leading in the French presidential race. She is a strong supporter of Nicolas Sarkozy's bid for re-election. However Sarkozy is not popular and is trailing in the polls.

Apparently other conservative leaning governments in Europe are also going to give Hollande the cold shoulder. As well as Germany, Italy, Spain and the UK hope that Hollande fails in his bid. According to Der Spiegel Merkel met with both Italian Prime Minister Mario Monti and the Spanish prime minister and they agreed not to meet with Hollande.

The group are angry at Hollande because he says that he wants to renegotiate the fiscal pact agreed to by all but two EU members. The agreement on fiscal discipline is a key plank in Merkel's plan to save the Euro.

The German Foreign Minister worries about Merkel's intervention in French presidential politics. Hollande seems likely to win in France. As a result Merkel and others who oppose Hollande will find themselves having already alienated an important leader they will be forced to work with. For many the best policy is to remain strictly neutral and stay out of the politics of France. For much more see this article in Der Spiegel.

Greek crisis still unsolved

     Late last year Greek bondholders agreed to take a haircut. Also the unreliable elected Prime Minister George Papandreou resigned. He was replaced by the unelected EU approved Lucas Papademos.
    But the Greece situation is still not sorted out even as press attention focuses on Italy and even France. The creditors banks and hedge funds are locked in battle with the Troika--the EU, IMF and European Central Bank and in negotiations with the Greek government.
   Some of the bondholders are reluctant to accept the 50 per cent haircut. There is a conflict of interest in that some debt holders who hold insurance in the form of credit default swaps can actually make money if Greece defaults! However Angela Merkel has urged that Greece be given a chance and that IMF austerity may work as it has elsewhere she claims. But Greece is already in recession and it is not clear how austerity measures will increase production. Quite the opposite by reducing demand it will probably lead to a further decline in GDP making the debt load worse. For more see this article.
    A more detailed account of the crisis can be found here.  The Troika is seeking a deal that would see Greek's debt fall from 180 per cent of GDP to 120 per cent. The talks broke up last Friday without a deal . If a deal is not reached Greece will not get the next installment of its bailout money. Within a couple of months Greece will be unable to pay its bills if this happens.
   The IMF warns that if creditors make the terms even harsher they could win only to see Greece default a situation much worse. Many analysts such as London based Professor Costas Lapavistas are concerned about the situation. Lapavistas says: "There is rising despair in Athens," "There is sullen anger and a lot of fear. The mix is combustible."
  Even if an agreement is reached it will do little but buy time for what looks to be an eventual default. Unemployment in Greece is a horrendous 18 per cent. Investment is collapsing both public and private.The  Greek economy has already shrunk by more than 15 per cent. With the economy shrinking further there is little hope that the debt burden will decrease.

French and German leaders support financial transactions tax

For some time French president Sarkozy has supported a financial transactions tax. German Chancellor Angela Merkel has now also expressed her support for such a tax.
 Great Britain however is against such a tax unless it is global in scope. This is not likely as the U.S. opposes the tax.
 Merkel said:“Personally, I’m in favor of thinking about such a tax in the euro zone,” Merkel said. “Germany and France both equally view the financial transaction tax as a correct response.” Last September the European Commission suggested the tax rate be .1 per cent on all bond and equity trades and .o1 per on derivative trades. The Commission calculated the tax would raise 71 billion dollars a year.
 Sarkozy has even suggested that he might be willing to go it alone and impose the tax on France even if others do not join. The French financial establishment is opposed to the tax claiming that it would make France less competitive. For more see this article.

German paper: Israel releases Palestine funds to seal submarine purchase

The Israeli newspaper Haaretz reports that the World on Sunday (Welt am Sonntag) claims that Israel freed funds collected for Palestine as a concession to complete the purchase of a German submarine.

The newspaper report claims that aides of the chancellor informed opposition leaders in confidence that Israel had made the concession. The submarine sale was approved last Wednesday. On the same day the Israeli prime minister announced that 100 million dollars in revenues collected for the Palestinians had been released to the Palestinian Authority.

Israel punished Palestine for joining UNESCO by freezing the funds. The submarine sale has been held up for a year as Germany tried to extract political concessions from Israel.Chancellor Merkel has tried to get Netanyahu to restart the Palestinian peace process. Obviously she was unable to do that! For more see this article