Friday, November 28, 2014

Shards of Europe

PRINCETON – As European leaders struggle after another failed summit, they should think hard about what their continent – and the world – might look like if they continue to produce unsatisfactory solutions to Europe’s financial and economic problems. What would follow the disintegration of the eurozone and – almost certainly with it – that of the European Union?

The best place to consider that question would not be Brussels, but Tiraspol, the capital of the entity that calls itself the Pridnestrovian Moldavian Republic, or Trans-Dniestr. This territorial sliver with a population of a half-million emerged in the early 1990’s, after the dissolution of the Soviet Union (population almost 300 million), when it broke away from the Republic of Moldova (population four million), which had separated in the 1940’s from Ukraine (population 50 million).

Trans-Dniestr has its own government and parliament, army, constitution, flag, and a rousing Soviet-style national anthem; of course, its nationhood would be incomplete without its own currency. This political entity is a precise counterpart in the political world to a well-known physical phenomenon of splintering or fissuring. When stressed, a big surface bifurcates in big chunks, but then the disintegration continues into smaller and smaller fragments.

Of the six larger EU states, only France has a really well-defined centralized political system.  Poland’s centralism comes close, but strong regional differences persist – a legacy of the three large and quite different imperial systems that encompassed today’s Poland in the nineteenth century.

Italy and Germany were nineteenth-century amalgamations of a colorful variety of small and medium-size political units. The United Kingdom looks older and more stable, but Scotland today is controlled by a political party that wants to repeal the 1707 Act of Union, with the future to be determined by a Scottish referendum in 2014. Spain after the Franco dictatorship stabilized itself by granting autonomy to its regions, which in many ways now behave like independent units.

In these fragmented political areas, the logic of integration in the past depended on areas that were dissatisfied with political outcomes appealing to new allies in larger units. Franconians in southern Germany disliked the fact that the Napoleonic Wars subjected them to Bavarian rule; they saw German nationalism as a way to use Prussia and Berlin as a counterweight to Munich’s hegemony. But, once Germany was united, Bavarians did not like the outcome, and then thought of a united Europe as a counterweight to the German state. Indeed, Bavaria became adept at using European Community resources to bolster its own political system.

Integration had its own historical momentum; if and when it goes into reverse, that process will have a counter-momentum. The argument against European structures depends on hostility to a transfer union that might lead to some redistribution of resources. Why should our money be taken away and given to people in a very different area? What sort of claim do those people have?

Germans thinking about the likelihood of transfers to southern Europe doubtless recall their country’s reunification after the collapse of communist East Germany in 1989-1990. There were massive transfers, and national resources were devoted to gigantic infrastructure projects. That was not enough to halt the hollowing out of the eastern Länder, as many of the ablest and most entrepreneurial people left – an experience that put enormous strain on national solidarity.

Problems of transfers in a large political unit are at the heart of federalism. The United States’ early history was dominated by a passionate debate about the issue of solidarity. In 1790, when Alexander Hamilton argued that the new federal government should assume the states’ debts from the War of Independence, he encountered fierce hostility. The only way to sustain such a new political order, James Madison argued in The Federalist Papers, was to ensure that federal powers were few and limited.

Europe is confronting a similar moment of destiny. It is now mired in an existential crisis more profound than at any point since 1945. And, while muddling through is a characteristic response of complex political systems, it is deeply destructive.

If Europe’s political center is widely perceived to be arbitrary and overweening, its authority will be rejected and resisted. While adopting a new treaty may look like an unwieldy process, ill-suited to managing a fast-moving modern financial crisis, it is the only way to generate legitimacy for the institutions that are needed to address that crisis – in particular to provide reassurance that transfers will not be indefinite and unlimited.

If European integration shifts into reverse, the outcome will not be a series of happy and prosperous nation-states, living in a sort of replica of the 1950’s or 1960’s. Southern Germans would wonder whether they were not transferring too much to the north’s old industrial rustbelt; northern Italians who support the anti-EU Lega Nord in the self-styled unit of “Padania” would want to escape from the rule of Rome and the south.

Setting the clock back would thus not simply return Europe to the mid-twentieth century. The small states of the mid-nineteenth century, with no fiscal transfers out of a relatively limited area, might be recreated. But the dynamic might go further: the German territories had around 350 independent political entities in the mid-eighteenth century, and more than 3,000 before the middle of the seventeenth century. Watch out, Trans-Dniestr.

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    1. CommentedMarius Arustei

      Well..., ms Harold James, a top rated international analyst and economist, makes a great mistake by not documenting himself when saying "Republic of Moldova, which had separated in the 1940’s from Ukraine"...

    2. CommentedAnthony St. John

      How I “Coaxed” the Ouster of Italian Prime Minister Silvio Berlusconi

      This essay is dedicated to two of my Florentine friends, Zara and Neri,
      with the hope that their futures will be more prosperous and fulfilling
      than ours—so brutally stupid...

      We are not prone to learn from The Past. As all other ways of life on the wane have revealed themselves, Italy—the dreadful bellwether of the decline of Western Civilization I (Europe) and Western Civilization II (DisUnited States of Northamerica)—is bending over backwards to deny the reality of its dismal plight. Just as in Roman times. Rousseau, not at all partial to Roman culture, ironized: “...the very day of its fall was the eve of that on which it conferred on one of its citizens the title of Arbiter of Good Taste.” So, too, today Italians are groping everywhere to preserve some sense of decorum in a stultifying state of lawlessness, corruption and the atrocious impression that Italy's institutions are unavailing, that they are flatbottom non-existent. Italy's wheels are spinning; yet, Italy is stuck in its mud. Italians are agoraphobic. They are exceptionally skittish.
      In this void it was uncomplicated for me to aid and abet the riddance of Silvio Berlusconi. Not many Italians, shamefully simmering in their selfishness and self-pity, cared to lift a finger to chase Berlusconi from his debased political perch. They unwisely cultivated—still do today—the baseless expectancy that some divine occurrence would hap upon Italy's most moneyed leader and miraculously pull The Boot out of its economic and political nosedive. The word “hope” is a hackneyed theme in desperate Italy. Italians prefer to hope more than they opt to work their way out of this their most abominable conundrum since the end of the Second World War. Italians themselves believe, subconsciously, that their condition is irremediable. They surmise, rightly so, that together Mario Draghi, president of the European Central Bank, and Mario Monti, stopgap prime minister of Italy, two big European blufferoos, one of whom was appointed during a coup d'etat, not a democratic election—could not operate a lemonade stand. Italy is in via d'estinzione.

      * * *

      Before I reveal my capers which facilitated the downfall of that creep, Silvio Berlusconi, some background information is required to enhance the quality of my debunking and, further, step up the joyfulness I am having in narrating for you this extraordinary subject matter which you would never learn of from the print, television and satellite media of any of the world's sophisticated media agencies. Their facade is my bull's-eye to shoot at.
      The Italian people want to be taken care of by their employers and government. They have been tended to for centuries. First, the Roman Catholic church offered solace. Then the feudal system. After, the Democratically Judeo-Christian Capitalistic Instrumentation. But the horribly devastating World War II changed the complexion of “caring” for once and for all. Italians lost any faith in their political leaders that they might at one time had possessed. Italians folded their arms in disgust. The Italian oligarchies realized that some kind of rebounding, soft social system (an olisocism?), had to be invented to navigate the howling resentment—accumulated as a consequence of that brainsick World War II—into a safe harbor where the energies of the Italian workers would not rebel, but where they could be utilized to pile up wealth for the captains of the Democratically Judeo-Christian Capitalistic, Aggrandizing Arrangement.
      An underground “war,” between the “have's” and the “have not's,” has been waging for decades in Italy. An analysis of these two opposing forces is not in the purview of this article; suffice it to say that this battle royal has sucked out of these Italians, these characters at war with themselves, the energy they now would need to survive in our roughshod global economic reality. Italy keeps sinking lower and lower, and one Italian newspaper ironically laments that Italy heads all the classifications for negative achievements—in most fields. The nation is crippled.
      In this debilitating state, it had been almost cushy for Silvio Berlusconi, Italy's richest citizen, to take over, as his nation's leader, the political power his ego so vied for, for so long. Italians truly believed that he, an enormous business success, would surely bring them an enormous economic success. He did not. In fact, he worsened Italy's prospects for progress and pay back. The short, ex-cruise ship crooner, bluffed his way for years keeping Italy glued together with bubble gum and rubber bands. The perfect fake.
      Yet, what could one expect from Silvio Berlusconi? If we look at him today, for all his efforts, he is not well—both physically and mentally. He is a balding, overweight, 75-year-old keepsake. His face is stressed with the verbal assaults and time-consuming lawsuits foisted upon his persona. He has undergone surgery for prostrate cancer. His thorax is implanted with a pacemaker. His visage twitches from the frozen, meaningless smile he has to maintain when appearing in public. He must have his way, and when he does not, he boils with ire. As most paranoid personalities are, the Italian politician, too, is a control freak. He carries a sponge in his pocket soaked with a purifying lotion which he uses to cleanse his hand after handshakes. He sends shampoo, in gift boxes, to individuals he thinks should wash their hair. Instead of surrounding himself with his grandchildren to set an example for the many childless Italian couples, he has encircled himself with young women many of whom have testified before Italian prosecutors admitting that they are prostitutes. His uncanny social behavior evidences an abnormality of the sexual perception he possesses of himself. He is unhappy. The poor soul just does not know that he is unfit for the office, President of Italy, he would so much like to hold and, worse, he cannot fathom that that post might strain his delicate health the more. As any duce, any Craxi, his megalomania does not permit him to discern appreciatively well, and he is fraught with frustration for not being esteemed by his fellow countrymen.
      We can say that Silvio Berlusconi is an incompetent politician; and, we can say that he is an astute businessman. He once decried the fact that when he was president of his media conglomerate, he could order his underlings to follow his instructions. But, when he became prime minister for the first time, he sobbed that he had failed to coordinate the thousands of government types under his bidding in Rome.
      It is said that SB's rise to financial and political power was blotched by many illegal shenanigans. No doubt about that. Italy is a cesspool of graft and corruption. Yet, what SB accomplished as a media mogul, and later as a very savvy Italian politician using those ethereal instruments of mightiness and influence that he had accrued as owner of the FININVEST media corporation, must be said to be remarkable. Sadly, SB could not distinguish both politics from business and intelligence from stupidity. Towards the end of his dubious and much contested political career, SB left himself open too many times. He became the traitor's favorite target. With so many skeletons in his closet, SB could not fend off the unceasing numbers of personal attacks he thought, as any despot would, he could brush off by using his corral of lackeys to do his dirty work for him and eliminate his most pressing travails. At the end, only a slight tip could make him topple over. And I, gleefully, participated in the demise of this ridiculous criminal, this “Italian politician” who now is broken and near his death—after he brought economic disarray and worldwide disrepute to his country and untold hardships to his countrymen and women.

      * * *

      They say all roads lead to Rome. But, for me, all roads lead to politics. When I arrived in Italy on 1 May 1983 from Caracas, I knew I had to stay very far away from the Italian political hub, the seat of Roman Civilization. I had been badly burnt by politics. First, by a gang of right-wing political and religious fanatics at William F Buckley, Jr's National Review. Then the United States Army sent me to Vietnam to help perpetrate its enormous travesty of justice. Finally—and this had been the last straw—I had worked in the corrupt government of Carlos Andrés Pérez in Venezuela. My view of politics was horribly negative. It looked to me as being some sort of game for gangsters with the license to steal without even using a pistol to do so.
      From my firsthand experiences, education, garnered from political organizations and the protagonists in them, I have ascertained that the proverbial “man at the top” has to depend on his subordinates to execute his plans and directives. If a political leader picks out well, he will be rewarded with success. If he selects subalterns—as Silvio Berlusconi did—individuals who are more interested in their own profit and advancement and not those of the citizens they are obligated to represent, political chaos is bound to result. Unfortunately for SB, his coterie of sycophants were mostly malefactors who, in the end, ratted on SB leaving him to wail, when he was replaced by Mario Monti, the following: “I've been betrayed.”
      One of these squealers was Denis Verdini. He was one of the three “colonels” SB had appointed to run his organization (National Coordination Office) in the central geographical portion of Business Italy. DV was once the president of a bank, Credito Cooperativo Fiorentino, whose headquarters was near my home, Calenzano, in the town of Campi Bisenzio. The bank was a tiny Italian entity with no more than seven branches, one in Calenzano, spread a bit around the Tuscan province of Firenze (Florence). At the beginning of 2010, Italian bank inspectors from the Banca d'Italia in Rome initiated an inspection into the dubious financial dealings of DV, and their findings led to the dismissal of DV from the presidency of the Credito Cooperativo Fiorentino on 23 July 2010. In March 2012, the Credito Cooperativo Fiorentino was defrocked and incorporated into the Chianti Banca Credito Cooperativo. For two years, behind the scenes maneuverings had been carried out to stave off the revolt of parties who had invested their funds in a bank rotten with dubious dealings and funny goings-on. (Denis Verdini is waiting trials for his alleged banking shenanigans, has been charged with manipulating public funding appropriated for reconstruction projects at the earthquake-devasted L'Aquila region, has been indicted with aiming to influence the verdicts of the Italian Constitutional Court, and is up for another legal proceeding in which he has been incriminated for corruption and participation in the illegal secret activities of the P3—an offshoot of the infamous P2, Propaganda Due, a Masonic lodge implicated in numerous Italian crimes, murders, acts of corruption, and the collapse of the Vatican-affiliated Banco Ambrosiano. Silvio Berlusconi was a member of the P2.)
      How I became “involved” in the Denis Verdini story might be considered purely fluky. An acquaitance-friend, the most “simpatico” Italian criminal I had ever known, in a drunken stupor, told me one day in his villa in Calenzano that Denis Verdini was a very close friend of his. So side by side that DV was invited to meetings Simpatico had had in his sprawling home (36 rooms) on Sundays with other friends who had gathered to talk about Italian politics and economics. P3?
      Simpatico's other revelations were a starting point for me. He had glibly told me that he was forced to chisel on his tax returns simply because the Italian government took such a high percentage of his company's profits—so much so that if he had not wandered from an unfair tax reality he would not have been left with any capital to invest in his establishment which, he proudly heralded, was feeding the mouths of sixty families. I had knowledge of many other Italian entrepreneurs, many of whom had confided in me, that they themselves hoarded much of their net incomes in foreign banks, particularly those in Switzerland, Luxembourg and Germany. “Everyone is doing it!” Birds of a feather flock together. That is, those birdies who have the cash to stash beyond Italy's borders.
      Simpatico also related to me, in another sottish grogginess, that he had to fight to convince his daughter, the mother of two girls, to give birth to the second of them in the United States so that she could enjoy the citizenship of that country. The mother was reluctant to do so, but Simpatico ultimately won her over by promising to have her gynecologist, who lived in Prato, Italy, accompany her to the hospital, then the delivery room, in Greenville, South Carolina where the blessed event was to take place with the proud grandfather beaming all the time.
      Simpatico was an extraordinary character. He hated Americans. He related to me, again soused, that he had invested $2,000,000 in the United States trying to eventually sell his products there. His attempt failed. His loss made him a very bitter man, and his antipathy towards Americans was uttermost. So why want so passionately to have a granddaughter own a United States' citizenship? Many fantastical things were occurring, and they all lead to the Denis Verdini chain of consequences which thusly extended itself to the prime minister of Italy, Silvio Berlusconi. I loaded my weapon.
      The first step I took was to collect and analyze the facts surrounding all the particulars that I had accumulated over the years concerning Italian banking and politics. That concentrated intelligence was crucial to my strategy. I did my homework very scrupulously. I considered an umpteenth quantity of propositions. I was determined. I was measured, unhurried. I had one bullet in my chamber, and I had no intention of missing the bull's-eye—Denis Verdini would help us bring down Silvio Berlusconi! I knew I was in the right as I closed in on the enemy. I smelled his blood.
      On 15 March 2010, I composed a memorandum addressed to: my friend, Franco Gabrielli, ex-director of the Italian secret services SISDE (Servizio per le Informazione e la Sicurezza Democratica), mandated to put the SISDE house in order but coerced to resign by the Silvio Berlusconi regime, and after made prefect of L'Aquila; the frivolous United States' ambassador, David H Thorne, ex-roomate at Yale and ex-brother-in-law of John Kerry and member of Skull & Bones; and, David A Thomas, FBI agent-in-charge of Columbia, South Carolina, United States. As a courtesy, I sent a copy to the Florence police chief, Dr Francesco Tagliente.
      In that communication, I simply listed the name and address of Simpatico and stated that Denis Verdini was an intimate of Simpatico. I also informed the recipients of the fact that Simpatico had a granddaughter who had been born in the United States.
      I waited a month. No answer—as I expected. I made twenty-five copies of the memo, and distributed them in bars and beauty shops around the areas where the midget banking system, Credito Cooperativo Fiorentino, had tried to thrive. A “run” was underway! Common Consent! Critical Mass! The Banca d'Italia investigators dug deeper into allegations made against Denis Verdini. I informed the carabinieri in Calenzano of my actions.
      On 15 May 2010, just to keep everyone honest, I penned another note addressed to the President of Italy, Giorgio Napolitano, and the useless United States' ambassador. Subject: the Florence police chief, Dr Tagliente. I accused Tagliente of not responding to my previous fax-memo which was made to tip off judicial authorities to the grotesque circumstances I had knowledge of and wanted to impart.
      My persistence at last piqued someone's interest! I was summoned to appear at the Firenze police headquarters where the DIGOS (Divisione Investigazioni Generali e Operazioni Speciali), a special operative division of the Italian State Police, was located. Riccardo Lamperi was the agent in charge who interviewed me. A very pleasant person who was respectful and professional in his questioning.
      Riccardo was very much stressed. It is important to realize that the Italian police have an impossible task trying to keep straight western Europe's most corrupt nation. In Florence, the officers of the DIGOS are understaffed, piles of dossiers are stacked on investigators' desks, and in the bureau where I was interrogated, four agents had been cramped in the same room while the almost summer heat made the air-condition-less area stifling. The DIGOS functionaries who quizzed me with Riccardo leading the examination, were efficient, serious police officers. To make things worse for them, these agents are expected to control violent soccer fans who often throw rocks and pieces of pavement at them hooded with protective head gear.
      I told Riccardo that I had come for one reason and one alone: I wanted him to know the name and address of Simpatico. I kept thinking of those Sunday get-togethers and the tag P3 revolved around my brain. When I returned home, I sent a fax to Riccardo with the name and address of Simpatico written in very large letters. I did not want him to forget.
      Would he? The mounds of written records on his desk made me think that perhaps Riccardo would put my folder under all the others and then forget about Simpatico in the rush of the countless things he and his colleagues had to accomplish.
      I called the United States' embassy in Rome.
      “Good morning, United States embassy.
      My name is Anthony St. John and I'm calling from Calenzano.
      Calenzano, Italy.
      How can I help you?
      Please tell David to ask the Central Intelligence Agency to take satellite photos of the cars parked outside Simpatico's villa this Sunday.
      David? Who's David.
      He's the ambassador of the United States in Italy.
      And you? Who are you?
      ...What's this all about?
      David knows me. Tell him Tony called.
      He must take those sat photos this Sunday. Do you understand?”
      I hung up. Then I called the DIGOS in Firenze and asked for agent-in-charge Riccardo Lamperi.

      “Lamperi is not in.
      Can you take a message for him, please? Tell him that I just called the United States' embassy in Rome and requested that satellite photos be taken this Sunday of Simpatico's villa and the cars parked in front of it.
      Why are you telling us this?
      I don't want you to be caught with your pants down. That's all. You must be prepared to receive a call from the Ministerio del Interno. Agent, please get moving! Grazie!”
      I hung up. On 15 March 2011 I prodded still again.
      I sent a memo to Dr Paolo Padoin, the prefetto di Firenze at the Prefettura di Firenze.
      I asked for a face-to-face meeting with him regarding something that might be considered important for him to know, and which concerned a possible threat to the national security of the Republic of Italy.
      I was called to the prefettura.
      Dr Padoin's right hand man, Dr Francesco Massidda, received me. I requested an appointment with Dr Padoin. Dr Massidda told me Dr Padoin was very busy these days, but I would be called as soon as an opening in his schedule appeared. I thanked him.
      I never heard another word from the Prefettura di Firenze.
      On 15 September 2011, I wrote to the office of the President of the European Commission, José Manuel Barroso, accusing Dr Padoin of obstructing justice.
      President Barroso's office never responded to my communication—naturally!
      I tried my best and I am sure I succeeded in making the Italian authorities tow the line. (I sleep exceptionally well at night, too!)
      Denis Verdini put the finger on Silvio Berlusconi to save his own skin. Quod erat demonstrandum: DV is still a “free” man today waiting for the beginnings of his trials which, in Italy, might start when he is dead. If you doubt that the Italian judiciary system is Kafkaesquely slow, just ask Amanda Knox! Worse, DV goes to bed every night thinking he might wake up in the morning with the head of a dead Tuscan wild boar on the pillow next to his. You never see him anymore on television—especially in the company of Silvio Berlusconi!
      As in all fascistic regimes, Italian law is above the law! It is arbitrary and effectuated when it suits the authorities and not the people those would-be trusted officials are supposed to represent.
      Italy is in via d'estinzione, n'est pas?

      Authored by Anthony St. John
      15 April MMXII
      Calenzano, Italy

      * * *

    3. CommentedPaul I

      The Republic of Moldova was not separated in the 1940’s from Ukraine. It was a province of Romania that in 1940 was occupied by the Soviet Union as a result of the Molotov–Ribbentrop Pact. It was later occupied again by the USSR in 1944 after Romania managed to gain it back in 1941.

    4. Portrait of Michael Heller

      CommentedMichael Heller

      Harold James:

      This kind of structural history is much more convincing that cultural explanations of vague differences in moralities. But I’m still puzzled. Does the fact that France takes for granted the stability given historically by its centralized system make it unable to appreciate the same benefits at a European level? It would lose power which may be more important to its self-esteem because of its centralized polity? It knows it would be the ideological loser since a centralized law-bound European order would likely move in the direction of laissez faire capitalism?

      The ongoing fragmentation of the UK is such a pointless petty wasteful exercise. It perhaps may be implied by what you say that Germany’s political elites (like the US founding fathers) know better than most why fragmentation is a cul-de-sac without endings, and -- even more importantly -- why the formal structure, procedures, and fiscal nature of the whole must be got right at the outset (the outset being the present revelatory crisis).

      I like this: “While adopting a new treaty may look like an unwieldy process... it is the only way to generate legitimacy for the institutions that are needed to address that crisis – in particular to provide reassurance that transfers will not be indefinite and unlimited”.

      Whatever the reason, among the players with power to shape Europe’s destiny Germany seems to be the decisive country that ‘gets it’ and France the decisive country that does not ‘get it’.