Another good crisis goes to waste

As stern guardians of the European dream, the German Chancellor and the president of the European Central Bank are not in the habit of tearing up their scripts. Yet last weekend their office shredders were overheating as the euro currency rescue forced monetary principles to be abandoned.

What could have driven Angela Merkel and Jean-Claude Trichet to lose face so spectacularly? How does the euro crisis relate to global poverty?

There are rumours that a Sarkozy tantrum threatened to bust the euro. Or that the assembled eurozone leaders suffered mass hysteria at the prospect of a sovereign replay of the Lehman Brothers collapse.

My guess is that much more calculating and external forces fired off the 750 billion euro bazooka….

….President Obama is warned that months of painstaking diplomacy to persuade the Chinese to revalue their currency will evaporate unless the downward spiral of the euro is reversed.

Obama calls Merkel to observe that, as a major exporter to China, Germany cannot afford his plan to fail. Merkel caves in but asks Obama to do the dirty work of telling the Spanish prime minister to jump. Zapatero is bounced into “politically impossible” spending cuts.

We know enough about Obama’s intervention for this speculative account to be credible. How could the value of the Chinese currency unite American and German interests in such decisive fashion?

This is a straightforward case of the richest countries closing ranks to preserve the status quo. Their bottom line is to retain the economic power necessary to appease their electorates and to keep a grip on international affairs, otherwise known as the rules of globalisation.

Like most political leaders, both Merkel and Obama win elections through promise of change. This is purely rhetorical; what they and their voters want most of all is business-as-usual.

A wider look at the events of last week illustrates the fate of those who genuinely seek change for a fairer world.

A good place to start is with those responsible for the task of measuring unfairness. Last week marked the 20th anniversary of the Human Development Index. The head of relevant research for UNDP, Francisco Rodríguez, is sufficiently open to change to write under the heading “do we really still need the HDI?”

I sense that Rodríguez wants to modernize the HDI by integrating environmental sustainability and well-being with traditional economic measures. Instead, he is forced to conclude that the existing crude index “addresses a need that will exist for as long as the world continues to be characterized by huge gaps in human development.”

Addressing a deplorable consequence of these huge gaps, the Global Child Labour Conference was held in The Hague on Monday and Tuesday. Few poverty issues arouse such strong feelings as child labour. Online visits to the OneWorld Child Labour Guide are more than double any other subject.

But the Conference was presented with a new report warning that the 2016 target to eliminate child labour is unlikely to be met. The communiqué calls for change, any change necessary “to fight the worst forms of child labour.”

Earlier on this eventful weekend, President Evo Morales of Bolivia continued his crusade on climate change in a personal meeting with UN Secretary-General Ban Ki-moon. He argued that international conventions brokered by the UN should be broadened to embrace the rights of “mother earth.” His efforts have been studiously ignored in the corridors of power.

In these contrasting tussles for stability and change, it is the Merkel-Obama mission for business-as-usual that is most likely to succeed, at least within the short time frame that suits politicians. Lacking economic muscle, the changemakers will fail, despite their moral authority.

We don’t know about their political authority because there is no mechanism for voting on global issues, although a world referendum on earth rights is another of Morales’ proposals. This international democratic deficit is one of the root causes of global poverty.

We cannot blame Obama and Merkel for any collusion in saving the euro. It’s the deafening silence of global justice campaigners that is worrying. If the case for radical reform cannot be trumpeted when panic takes hold amongst the bastions of global inequality, then change will remain elusive.


this article was first published by OneWorld UK