Social Europe: Dutch Aggression

On September 26, Emmanuel Macron made a speech on new a vision for Europe. He spoke about the need to harmonize corporate taxes in the European Union, tackle tax avoidance and protect our welfare states. Just one day later President Trump gave a speech on exactly the same topic, albeit with an entirely different message. He vowed to lower corporate taxation for American companies by a whopping 15 percentage points.

Unintentionally, the two speeches give an excellent illustration of the dilemma that countries, and especially EU countries, face. This is a result of a new logic in corporate taxation, in which 20th century tax systems designed for brick-and-mortar industries are no match for the 21st century developments of digitalization and globalisation. The choice is clear. Either countries work together to tackle the ingenious tax avoidance schemes ran by multinationals, or they participate in the cynical race towards the lowest tax rate. [...]

In that sense, the Netherlands sets a bad example, taking a step back from earlier solutions, and thus genuflecting towards Trump’s bogus solution. The new four-party cabinet revealed its plan to reduce the corporate tax rate incrementally from 25 to 21 percent, and even from 20 to 16 percent for the first €200K of profit. Besides that, a 15 percent tax on shareholder dividends will be removed. Any reference to an EU-coordinated effort to modernise the corporate taxation system is missing. All that said, one good thing is that the incoming government wants to introduce a source tax on royalties and interest to counter the Netherlands’ reputation for facilitating letterbox companies.

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Deutsche Welle: Saudi Crown Prince Mohammed bin Salman pledges more 'moderate' kingdom

Saudi Arabia's Crown Prince Mohammed bin Salman said his country would become more "moderate" and "open" on Tuesday and pledged to "eradicate" radical Islamist ideology from the Gulf kingdom.

"We are returning to what we were before – a country of moderate Islam that is open to all religions and to the world," the 32-year-old said at a major investment conference in Riyadh. [...]

In September, the Saudi government issued a decree that overturned a previous ban on women driving. Some officials have hinted the government may soon permit long-banned cinemas.

The young prince has also been the primary force driving "Vision 2030," an initiative designed to wean Saudi Arabia off of its traditional dependency on oil revenues by creating a more dynamic and diverse Saudi economy. [...]

Earlier Tuesday, bin Salman promised the conference attendees, which included representatives from some of the world's largest companies, that the Gulf kingdom will create a massive economic zone along the country's northwestern coastline.

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openDemocracy: Global politics at a crossroads

Even in our fraught and imperfect world, the idea of the politics of compromise and accommodation – the bedrock of democratic politics  – can just about survive. Political compromises are made, negotiations continue, rhetoric rises and falls with the ebb and flow of democratic politics. Barring some extreme examples, legislators from different sides of the aisle can still talk and have tea across most, if not all, democratic countries. While all ideologies regard their views as right, in the politics of accommodation, opposing views are at least considered valid.

This is no longer is the case in several countries, with opponents and opposing views increasingly delegitimised and discarded, and their advocates mocked, dehumanised and even threatened. Recent examples range from Trump’s America to Brexit Britain, from Orbán’s Hungary to Modi’s India, and from Erdoğan’s Turkey to Duterte’s Philippines. When political systems become tolerant of falsehood and deceit on seismic levels, and when they even offer promotion to those who champion lies, democracy becomes vulnerable and highly fragile. And when those who oppose this are ridiculed and cast aside, the politics of accommodation begins to fracture. [...]

There are four reasons for this blockage, or four pathways to gridlock: rising multipolarity, harder problems, institutional inertia, and institutional fragmentation. Each pathway can be thought of as a growing trend that embodies a specific mix of causal mechanisms. [...]

We see such trends across many different kinds of countries. But the anti-global backlash is heterogeneous and rife with contradictions. It encompasses terrorism in the name of Islam, and Islamophobic discrimination against Muslims. It includes leftist rejection of trade agreements, and right-wing rejection of environmental agreements. The powerful tie that unites these disparate movements is a rejection of global interdependence and collective efforts to govern it. The resulting erosion of global cooperation is the fourth and final element of self-reinforcing gridlock, starting the whole cycle anew.  

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Jacobin Magazine: Austria’s Right Turn

Austrian voters have elected the most right-wing parliament since 1945. The FPÖ gained 5.5 points, totaling 26 percent of the vote. But the undisputed winner was the conservative People’s Party (ÖVP), which rose from 24 percent in 2013 to 31.5 percent.

With a combined share of 57.5 percent of the vote and 103 (out of 183) MPs, the right bloc has never been larger. After you add in the neoliberal, pro-business “Neos,” who entered parliament with 5.3 percent, right-wing elements enjoy a two-thirds majority, giving them the power to potentially change constitutional law. [...]

The plan worked. With Kurz, Austrian voters could vote for the FPÖ’s program without associating themselves with the far right or fascism. The extreme right’s preferred topics — Islam, migration, refugees — dominated the campaign. Both Kurz and FPÖ leader Heinz-Christian Strache presented closed borders and Islamophobic laws as the best solution to the country’s social and political problems. [...]

The new right-wing government will also target Austria’s system of collective bargaining, a key component of wage regulation in a country where 97 percent of all employment contracts are covered by a minimum union wage. Together, these reforms will create a low-wage sector with a highly flexible — read: precarious — workforce, which will drive up profits from global export markets. [...]

Authoritarian right-wing populism has now become a truly hegemonic, cross-class project. 74 percent of blue-collar workers voted for one of the two right-wing parties, as did 64 percent of entrepreneurs. Shockingly, the FPÖ won among voters 16 to 29 years old with 30 percent of the vote. Add Kurz’s 28 percent, and you have a 58 percent majority for authoritarian right-wing populism among young people. The only demographic that liked the Social Democrats were pensioners. This is what deep, right-wing hegemony looks like.

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Social Europe: Germany: What Happens Next?

The key question now is: What happens next? After the social democrats have (wisely, I think) opted for a role in the opposition, there will be an extended period of bargaining on coalition formation, with only one majority option remaining on the table: the black-yellow-green “Jamaica”. That option is likely to fail. Differences among the participants cannot possibly be bridged in stable ways. After all, the Greens would at the very least have to win the support of the majority of their membership constituency, which is hard to imagine. The next option is the formation of a black-yellow minority government. That would be without precedent in Germany at the federal level. But it will be tried, as new elections are unlikely to yield an easier-to-handle result, perhaps a worse one. Moreover, there are creeping succession leadership crises in both the CDU and CSU (if not SPD), plus looming divorce issues between the two Christian “sister” parties regarding the continuation of a joint faction in the Bundestag. [...]

Also, a historical virtue of PDS/die Linke is a thing of the past. It consisted of its capacity to mask the legacies of East German xenophobic, authoritarian nativism by reframing it in terms of social justice issues. Now die Linke has lost 420,000 of its voters to Alternative für Deutschland (AfD, which also mobilized nearly 1.5 million non-voters, making it the party with by far the greatest success in mobilizing this group relative to the number of votes it received). In spite of this massive loss to AfD, however, die Linke has been able to more than compensate for it by winning the support of 700,000 former social democratic and 330,000 former green voters.  

There is a clear East/West divide in Germany. The new Länder in the East provided almost twice the level of electoral support for AfD as that of the old Länder. In Saxony, AfD even overtook CDU by a narrow margin and came in first. The same divide worked in Berlin as well as in the EU in general: populists are in power in Hungary and Poland and (so far) nowhere in the West of Europe. [...]

One lesson we can draw from the 2017 campaign and its outcome is this: Centrism of grand coalition governments breeds anti-elite centrifugality and the further fragmentation of party system, with an unprecedented number of seven distinct parties now in the Bundestag. As one commentator observed: “Fighting extremism in Germany may demand less political centrism.” (Another one has joked: There are two right answers to the question: Are there still true social democrats in Germany? One answer is: No – all socialist projects have been abandoned by SPD. The other is: Yes – there are even two of them, namely both members of the grand coalition whose social and economic policies have become virtually indistinguishable.)

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