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Living the Dream – Latvia, NATO and the EU

NATO membership makes Latvians feel less secure, whilst material gains from EU membership have been unspectacular.

Patrick Armstrong

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This article was first published by Russia Observer and is republished with the permission of the author.

This essay is an attempt to discuss the consequences of Latvia’s membership in both NATO and the EU. I chose Latvia simply because I found data for it. Membership in either standard bearer of Atlanticism, let alone both, would have been unimaginable for any citizen of the Latvian Soviet Socialist Republic and, for many, a glorious dream.

North Atlantic Treaty Organisation

Because Latvia joined it first, I will consider the NATO half of the dream first. Latvia became a full member in April 2004 (“From now on, 26 Allies will be joined in a commitment to defend each others’ security and territorial integrity. This is the strongest, most solemn commitment nations can undertake“).

There is a widespread meme that the new NATO members eagerly sought membership because of popular concerns about Russia but the truth, in Latvia at any rate, is that public opinion required some time (and lots of American GONGOs) to develop the preference. And while EU membership followed a referendum, NATO’s did not. In an opinion poll in 1998 we find a slight preference for neutrality “In Latvia, the larger group of population believe that the neutrality best guarantees Latvian security and stability (29%). The second option – NATO and EU membership together (26%) while NATO membership is the third option (15%). 10% of Latvian population believe that EU membership alone can guarantee stability and security for Latvia.” The same poll found that if there were to be a referendum on joining NATO in the three Baltic states “Latvia has the lowest number of the supporters for the country’s membership in alliance: 37% would vote for, 29% against, while 34% of Latvian population has not decided yet.” Not much enthusiasm there.

But Latvia has been a member for a decade now and one has to wonder whether Latvians feel secure. One would think that Article 5 of the NATO treaty gave as indisputable a security assurance as could be wanted. “Collective defence means that an attack against one Ally is considered as an attack against all Allies.” So, if Russia were to attack Latvia it would be the same as if it had attacked the USA, Canada or Germany; there would be no need for American, Canadian or German troops to actually be there. And yet there are always calls for more money to be spent and more troops to be stationed. And the recent NATO summit agreed to do so. Outsiders with weapons to sell Latvia have their interests in playing this up as when a BBC program in February 2016 had Russia invading Latvia. Propagandists keep the pot boiling: “Counting Down to a Russian Invasion of the Baltics“, “Reinforcing Deterrence on NATO’s Eastern Flank: Wargaming the Defense of the Baltics“, “If Russia Started a War in the Baltics, NATO Would Lose — Quickly“, “Russia’s aggression in Ukraine is part of a broader, and more dangerous, confrontation with the West“; War games show NATO’s eastern flank is vulnerable. To deter Moscow, the United States will need to deploy heavy armor on a large scale, a new study says.” And so on. There are sceptics, to be sure: “Why on Earth Would Russia Attack the Baltics?“, but the subject is omnipresent and the Warsaw communiqué is full of Russian “aggression”, “destabilising actions”, ” military intervention”, “provocative military activities near NATO borders” and so forth. (And, lest we forget profits: “We welcome Allied efforts to address, as appropriate, existing dependencies on Russian-sourced legacy military equipment”). Indeed, NATO is back in business at the old stand.

All this scare-mongering is having its effect. A recent Gallup poll finds 42% of Latvians seeing Russia as a potential threat. A 2015 poll finds 69% of Latvian speakers seeing a threat from Russia. We see these op-eds: “The society has fear“. “Who’s Afraid of the Big, Bad Bear?“, “Latvians fear elections could let Kremlin in by back door“, “Panic in Latvia: Trump Will Hand Ukraine, Syria and the Baltics to Putin“. “Russia’s Annexation Of Crimea Worries Baltic Nation Of Latvia“. “Baltic Russians could be the next pawns in new cold war“. In short, Latvians are becoming nervous.

Nonetheless, the cynic who really thinks about it understands that the foreign troops are wanted not because of some perceived immediate Russian threat, but because of a lack of confidence that, when it came to it, the NATO allies would stand up. Indeed, we have a poll that suggests just that: “NATO’s European Allies Won’t Fight for Article 5“. Another poll finds that not even Americans are very willing to fight for Latvia. So, the deployments probably owe less to the “Russian threat” than to the “indifference threat”. We are reminded of George Kennan’s prescient remark: “We have signed up to protect a whole series of countries, even though we have neither the resources nor the intention to do so in any serious way“.

It has to be said that the comparison between Crimea and Latvia (or the other two Baltic states) is rather forced. A thousand years ago, Crimea was clearly part of the Byzantine/Rus culture – indeed Vladimir the Great, ruler of Novgorod and later of Kiev, was baptised in Khersones in Crimea. Conquered by the Mongols in the 1200s, it became an appanage of the Ottoman Empire and was reconquered by Russia in 1783. The Russian Black Sea Fleet was then founded and has been based there ever since. In 1954 Khrushchev transferred Crimea from the RSFSR to the Ukrainian SSR (illegally it appears). When the USSR broke up, the Black Sea Fleet remained under treaty between Moscow and Kiev together with up to 25,000 Russian soldiers and sailors. In the 2014 referendum well over 90% voted to (re)join Russia and the Russian troops provided security; there was no “invasion”. As to the Donbass: when the president you voted for is ousted, the party you voted for is declared an enemy, the central government sends the army at you and your home is renamed the “Anti-Terror Operation Zone“, there’s no need to invent a “Russian invasion”. Latvia’s history is quite different: it has been ruled by Germans, Poles, Lithuanians and Swedes until absorbed by the Russian Empire about the same time Crimea was reacquired. Despite a substantial Russian minority, it has never been considered part of the “Russian lands” and there are no Russian troops there. So the parallels are very contrived – propagandisticly contrived – indeed. And, if Latvians are really concerned that a crafty Moscow may use the Russians inside Latvia as some sort of lever, then they might consider giving them full citizenship. (An idea, it is interesting to note, that seldom occurs to the reporters who write pieces like this one: “Latvia, with a large minority of Russians, worries about Putin’s goals“).

So, one could make the case that one part of the Latvian dream – NATO membership – has not in fact given the Latvian population a greater sense of security. Indeed, an effect of the non-stop anti-Russia campaign may be that Latvians feel less secure today than they did when they were neutral.

And, as a further irony, Latvian soldiers are back in Afghanistan: under a different flag this time but with much the same results.

European Union

Latvia became a full member of the EU in May 2004 after a referendum (“We welcome a country that naturally belongs to us and we trust, that Latvia as the others future Member States, will enrich and strengthen the European Union. Welcome home, Latvia!”) . It joined the Eurozone in January 2014 (no referendum then: support only about 20%).The source for most of what follows is “Latvia in the EU – Ten Years Later. A Different Latvia?” which is a fairly detailed assessment of the first decade’s experience. The purpose of the authors is described: “We intend to take a snapshot of the moment when Latvia joined the EU, and compare it with a snapshot of the country taken today”. It was published in May 2014, too early to show any effects of Eurozone membership; neither had the refugee criss bitten. A very quick summary of the various tables follows.

In the period defence expenditure declined and the armed forces became smaller. (We’ll see what effect the Russia scare will have on them). The unemployment rate improved, got a lot worse and is now about where it started. The service sector is larger, the industrial sector smaller, labour productivity significantly up, applications for high-tech patents down. The crime rate is much improved across the board with the exception of drug offences. The population has decreased (the authors don’t tell us how much). There are significantly fewer non-citizens, more foreigners live in Latvia, tourism is up quite a bit, the proportions of native Latvian speakers (73%-71%) and native Russian speakers (27%-27%) unchanged. The number of students is down, but those studying abroad is up, the proportion of the population with higher education has increased. The average net salary has better than doubled and GDP per capita has increased from about half the EU average to about two-thirds, the poverty rate is significantly down, agricultural production is significantly up. The population is a little more satisfied with the “quality of democracy” but trust in governmental institutions (including the EU) is down a bit, electoral participation is down nearly ten percentage points but the traffic police expect bribes significantly less. Life expectancy is up about 3 years, infant mortality is down, generally speaking health seems to be better (but a significant increase is reported for malignant tumours) although both doctors and hospital beds are down. Latvia is either “greener” or it isn’t, depending on what indicator you choose to emphasise. The authors sum it up as “in the course of ten years Latvia has become more secure and prosperous.”

So, altogether in the decade, there have been improvements in Latvia’s economic situation, health and crime. But these are not dramatic and, of course, there is no way of telling what the numbers would be if Latvia had taken some other course (cf Belarus, for example). The declining esteem in which institutions are held (trust in government down from 28% to 20%, parliament 20% to 15%, EU itself 39% to 36%) and drop in electoral participation (national from 72% to 59%, municipal 53% to 46%) argues a certain lack of enthusiasm for present circumstances.

The authors mention the population decline but don’t give the numbers.Wikipedia tells us the population in the EU decade dropped from 2.277 million to 1.995 million. It was 2.651 million in 1991. That’s a drop of a quarter; a significant decline indeed. “Demographic disaster” some say, “We are dying out“. If I were Latvian, I’d worry about that a lot more than about imaginary Russian invasions: at this rate, if they really wanted Latvia’s beaches, all the Russians have to do is wait fifty years or so to peacefully occupy an old folks’ home surrounded by vacant real estate.

Conclusion

It would appear that there are good reasons to argue that NATO membership has made Latvians feel less secure because they have been sucked into the NATO anti-Russia hysteria. In the ten years of EU membership there have been real gains albeit none very dramatic. There is no way of knowing where Latvia would be today had it adopted a different membership package.

So, it while it would certainly be wrong to call the dream a nightmare, it’s not proved as happy a dream as was no doubt expected. Improvements to be sure, but none of them dramatic and all overshadowed by depopulation (Latvia and Bulgaria are the only countries in the world with a smaller population today than in 1950.)

The downstream costs of the Euro and refugees – both direct consequences of EU membership – as well as pressures for greater defence expenditure from NATO are as yet uncalculated.

So, a bit of a wash altogether.

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French opposition rejects Macron’s concessions to Yellow Vests, some demand ‘citizen revolution’

Mélenchon: “I believe that Act 5 of the citizen revolution in our country will be a moment of great mobilization.”

RT

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Macron’s concessions to the Yellow Vests has failed to appease protesters and opposition politicians, such as Jean-Luc Mélenchon, who called for “citizen’s revolution” to continue until a fair distribution of wealth is achieved.

Immediately after French President Macron declared a “social and economic state of emergency” in response to large-scale protests by members of the Yellow Vest movement, promising a range of concessions to address their grievances, left-wing opposition politician Mélenchon called on the grassroots campaign to continue their revolution next Saturday.

I believe that Act 5 of the citizen revolution in our country will be a moment of great mobilization.

Macron’s promise of a €100 minimum wage increase, tax-free overtime pay and end-of-year bonuses, Mélenchon argued, will not affect any “considerable part” of the French population. Yet the leader of La France Insoumise stressed that the “decision” to rise up rests with “those who are in action.”

“We expect a real redistribution of wealth,” Benoît Hamon, a former presidential candidate and the founder of the Mouvement Génération, told BFM TV, accusing Macron’s package of measures that benefit the rich.

The Socialist Party’s first secretary, Olivier Faure, also slammed Macron’s financial concessions to struggling workers, noting that his general “course has not changed.”

Although welcoming certain tax measures, Marine Le Pen, president of the National Rally (previously National Front), accused the president’s “model” of governance based on “wild globalization, financialization of the economy, unfair competition,” of failing to address the social and cultural consequences of the Yellow Vest movement.

Macron’s speech was a “great comedy,”according to Debout la France chairman, Nicolas Dupont-Aignan, who accused the French President of “hypocrisy.”

Yet many found Melanchon’s calls to rise up against the government unreasonable, accusing the 67-year-old opposition politician of being an “opportunist” and “populist,” who is trying to hijack the social protest movement for his own gain.

Furthermore, some 54 percent of French believe the Yellow Vests achieved their goals and want rallies to stop, OpinionWay survey showed. While half of the survey respondents considered Macron’s anti-crisis measures unconvincing, another 49 percent found the president to be successful in addressing the demands of the protesters. Some 68 percent of those polled following Macron’s speech on Monday especially welcomed the increase in the minimum wage, while 78 percent favored tax cuts.

The Yellow Vest protests against pension cuts and fuel tax hikes last month were organized and kept strong via social media, without help from France’s powerful labor unions or official political parties. Some noted that such a mass mobilization of all levels of society managed to achieve unprecedented concessions from the government, which the unions failed to negotiate over the last three decades.

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Soros Mimics Hitler’s Bankers: Will Burden Europeans With Debt To ‘Save’ Them

George Soros is dissatisfied with the current EU refugee policy because it is still based on quotas.

The Duran

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Via GEFIRA:


After the Second World War, many economists racked their brains to answer the question of how Hitler managed to finance his armament, boost the economy and reduce unemployment.

Today his trick is well known. The economic miracle of Führer’s time became possible thanks to the so-called Mefo promissory notes.

The notes were the idea of the then President of the Reichsbank, Hjalmar Schacht, and served not only to finance the armament of the Wehrmacht for the Second World War, but also to create state jobs, which would otherwise not have been possible through the normal use of the money and capital markets, i.e. the annual increase in savings in Germany.

The Reich thus financed the armaments industry by accepting notes issued by the dummy company Metallurgische Forschungsgesellschaft GmbH (hence the name Mefo) rather than paying them in cash. The creation of money was in full swing from 1934 to 1938 – the total amount of notes issued at that time was 12 billion marks. The Reichsbank declared to the German banks that it was prepared to rediscount the Mefo notes, thus enabling the banks to discount them.

Because of their five-year term, the redemption of notes had to begin in 1939 at the latest. This threatened with enormous inflation. Since Schacht saw this as a threat to the Reichsmark, he expressed his doubts about the Reich Minister of Finance. But it did not help, and Schacht was quickly replaced by Economics Minister Walther Funk, who declared that the Reich would not redeem the Mefo notes, but would give Reich bonds to the Reichsbank in exchange. At the time of Funk, the autonomous Reichsbank statute was abolished, the Reichsbank was nationalized, and inflation exploded in such a way that Mefo notes with a circulation of 60 billion Reichsmark burdened the budget in post-war Germany.

George Soros also proposes such a money flurry in the style of Schacht and Funk.

Soros is dissatisfied with the current EU refugee policy because it is still based on quotas. He calls on the EU heads of state and governments to effectively deal with the migrant crisis through money flooding, which he calls “surge funding”.

“This would help to keep the influx of refugees at a level that Europe can absorb.”

Can absorb? Soros would be satisfied with the reception of 300,000 to 500,000 migrants per year. However, he is aware that the costs of his ethnic exchange plan are not financially feasible. In addition to the already enormous costs caused by migrants already in Europe, such a large number of new arrivals would add billions each year.

Soros calculates it at 30 billion euros a year, but argues that it would be worth it because “there is a real threat that the refugee crisis could cause the collapse of Europe’s Schengen system of open internal borders among twenty-six European states,” which would cost the EU between 47 and 100 billion euros in GDP losses.

Soros thus sees the financing of migrants and also of non-European countries that primarily receive migrants (which he also advocates) as a win-win relationship. He calls for the introduction of a new tax for the refugee crisis in the member states, including a financial transaction tax, an increase in VAT and the establishment of refugee funds. Soros knows, however, that such measures would not be accepted in the EU countries, so he proposes a different solution, which does not require a vote in the sovereign countries.

The new EU debt should be made by the EU taking advantage of its largely unused AAA credit status and issuing long-term bonds, which would boost the European economy. The funds could come from the European Stability Mechanism and the EU balance of payments support institution.

 “Both also have very similar institutional structures, and they are both backed entirely by the EU budget—and therefore do not require national guarantees or national parliamentary approval.“

In this way, the ESM and the BoPA (Balance of Payments Assistance Facility) would become the new Mefo’s that could issue bills of exchange, perhaps even cheques for Turks, Soros NGOs. Soros calculates that both institutions have a credit capacity of 60 billion, which should only increase as Portugal, Ireland and Greece repay each year the loans they received during the euro crisis. According to Soros, the old debts should be used to finance the new ones in such a way that it officially does not burden the budget in any of the EU Member States. The financial institutions that are to carry out this debt fraud must extend (indeed – cancel) their status, as the leader of the refugees expressed such a wish in his speech.

That Soros is striving to replace the indigenous European population with new arrivals from Africa and Asia is clear to anyone who observes its activities in Europe. The question is: what does he want to do this for and who is the real ruler, behind him, the real leader?

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The French People Feel Screwed

For the first time in his presidency, Macron is in trouble and Europe and America are looking on.

The Duran

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Authored by David Brown via The Gatestone Institute:


On December 4, French Prime Minister Édouard Phillipe told deputies of the ruling party, “La République en Marche”, that a proposed fuel tax rise, which had led to the largest protests France has seen in decades, would be suspended.

The protesters, called Gilets-Jaunes — “Yellow Vests,” because of the vests drivers are obliged by the government to carry in their vehicles in the event of a roadside breakdown — say that the fuel tax was the last straw from a president who took office with a promise to help the economically left-behind but instead has favoured the rich.

Even by French standards, the protests of the “Yellow Vests” during the weekend of December 1 were startling. Burning cars and vast plumes of grey smoke seemed to engulf the Arc De Triomphe as if Paris were at war. Comparisons were drawn with the Bread Wars of the 17th Century and the spirit of the Revolution of the 18th Century.

For more than two weeks, the “Yellow Vests” disrupted France. They paralyzed highways and forced roads to close — causing shortages across the country – and blocked fuel stations from Lille in the North to Marseilles in the South.

During protests in France’s capital, Paris, the “Yellow Vests” were soon joined by a more violent element, who began torching cars, smashing windows and looting stores. 133 were injured, 412 were arrested and more than 10,000 tear gas and stun grenades were fired.

One elderly lady was killed when she was struck by a stray grenade as she tried to shutter her windows against the melee.

There was talk of imposing a State of Emergency.

The “Yellow Vests” present the most significant opposition French President Emmanuel Macron has faced since coming to office in May 2017. Unlike previous protests in France, which have divided public opinion, these have widespread support – 72% according to a Harris Interactive Poll published December 1st.

Fuel tax rises — announced in November before being retracted on December — were intended to help bring down France’s carbon emissions by curbing the use of cars. Macron makes no secret of his wish to be seen as a global leader for environmental reform.

He forgets that back at home, among the people who elected him, fuel prices really matter to those outside big cities, where four-fifths of commuters drive to work and a third of them cover more than 30km each week.

The increases have incensed people in smaller communities, where they have already seen speed limits reduced to please the Greens and cuts to the local transport services.

These additional costs-of-living increases come at an extremely bad time for ordinary French people working outside of Paris. Lower-middle class families are not poor enough to receive welfare benefits but have seen their income flat-line whilst cost-of-living and taxes have risen.

An analysis by the Institut des Politiques Publiques think-tank shows that benefits cuts and tax changes in 2018 and 2019 will leave pensioners and the bottom fifth of households worse off, while the abolition of the wealth tax means that by far the biggest gains will go to the top 1%

This is tough to swallow. Macron is seen as being out of touch with ordinary people and is unlikely to escape his new title, “the President of the Rich.”

“People have this feeling that the Paris technocrats are doing complicated things to screw them,” said Charles Wyplosz, an economics professor at the Graduate Institute of International and Development Studies in Geneva.

It is probably not as complex as that. The French people feel screwed.

As employment and growth are slowing, Macron, for the first time in his presidency, is under serious pressure. Unemployment is at 9%; his efforts to reform Europe are stalling, and his approval rating has plummeted to just 23% according to a recent opinion poll by IFOP.

Images of Macron at the Arc De Triomphe daubed in graffiti calling for him to step down, or worse, have done little to bolster his image abroad.

So far, Macron had said he would not bow to street protests. To underline his point, in September 2017, he called protestors against French labour-market reform “slackers”.

The political U-Turn on the fuel tax is a turning point for the Macron presidency. The question is : What next, both for Macron and the “Yellow Vests”?

Macron most likely needs to plough ahead with his reform agenda, and doubtless knows he has the support of a solid majority in the National Assembly to do so. France is crippled by debt (nearly 100% of GDP) and its grossly bloated public sector. There are 5.2 million civil servants in France, and their number has increased by 36% since 1983. These represent 22% of the workforce compared to an OCDE average of 15%.

Tax-expert Jean-Philippe Delsol says France has 1.5 million too many “fonctionnaires [officials]. When you consider that public spending in France now accounts for 57 per cent of gross domestic product. Soon the system will no longer function as there will be less and less people working to support more and more people working less”.

Macron’s mistake, in addition to a seeming inclination for arrogance, is not to have made national economic reform his absolute priority right from his initial grace period after his election. Lower public expenses would have made it possible to lower taxes, hence creating what economists call a virtuous circle. Instead, he waited.

Now, at a time when he is deeply unpopular and social unrest is in full sway he is looking to make further reforms in unemployment benefits, scaling them back by reducing the payments and the length of time beneficiaries can receive the money. The “President of the Rich” strikes again.

There is talk that he may also re-introduce the wealth tax to try to placate the protestors.

Macron’s presidential term lasts until May 13, 2022. Understandably, Macron will be focused on the elections to the European Parliament expected to be held May 23-26, 2019. Headlines have signalled that Marine Le Pen and the National Rally (formally National Front) are ahead in the polls at 20%, compared to Macron’s En Marche at 19%.

The shift is understandable, given the divide between the countryside, where Le Pen has solid support, and the cities, where Macron’s centre-left prevail.

In contrast, the “Yellow Vests” have galvanised support after standing up for the “impotent ordinary”, and seem much buoyed by the solidarity they have been shown by both fire fighters and the police. There are images online of police removing their helmets and firefighters turning their backs on political authority to show their support for the protestors.

Whilst Macron’s political opposition may be fragmented, this new breed of coherent public opposition is something new. Leaderless, unstructured and organised online, the “Yellow Vests” have gained support from the left and right, yet resisted subjugation by either.

Being leaderless makes them difficult to negotiate withor to reason with in private. The “Yellow Vests” seem acutely aware of this strength, given their firm rebuttal of overtures for peace talks from the Macron government.

Enjoying huge support from the public and with reforms to the social welfare system on the horizon, the “Yellow Vests” are not going away.

For the first time in his Presidency, Macron is in trouble and Europe and America are looking on.

After Macron rebuked nationalism during his speech at the armistice ceremony, Trump was quick to remind the French President of his low approval rating and unemployment rate near 10%. A stinging broadside from Trump on twitter suggests that Macron may well be relegated to Trump’s list of global “Losers“:

“Emmanuel Macron suggests building its own army to protect Europe against the U.S., China and Russia. But it was Germany in World Wars One & Two – How did that work out for France? They were starting to learn German in Paris before the U.S. came along. Pay for NATO or not!”

The “impotent ordinary” in the United Kingdom, who might feel betrayed over Brexit, and the nationalists in Germany, who have suffered under Merkel , are no doubt staring in wonder at the “Yellow Vests”, wishing for the same moxie.

The historian Thomas Carlyle, chronicler of the French Revolution, said the French were unrivaled practitioners in the “art of insurrection”, and characterised the French mob as the “liveliest phenomena of our world”.

Mobs in other countries, by comparison, he argued were “dull masses” lacking audacity and inventiveness. The blazing yellow vests of the French protest movement , however, have made Macron appear increasingly dull and weak too.

David Brown is based in the United Kingdom.

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