The high priests of austerity

To an EU elite determined to push harmful economic policies, democracy is an inconvenience.

Jean-Claude Trichet could have enjoyed a comfortable retirement after stepping down as president of the European Central Bank in 2011.  Commanding an annual salary of €370,000 in his old job, the Frenchman is now paid a pension of up to 70 per cent that amount.

Instead, Trichet has been kept busy playing a game of musical chairs with Italy's technocrat former prime minister Mario Monti. In one of his final acts as ECB chief, Trichet spearheaded the downfall of Silvio Berlusconi by insisting that the lascivious rogue introduce unpalatable economic "reforms" in Italy as a condition of emergency "assistance". 

The diktat helped Monti replace Berlusconi as prime minister (without an election). It also allowed Trichet to fill two posts that Monti had to vacate: those of European chairman with the Trilateral Commission, that secretive club for political and business leaders, and chairman of Bruegel, a think tank based in Brussels.  Trichet combines these responsibilities with overseeing the Group of 30, a Washington-based institution dominated by bankers.  

All this hyper-activity might explain why Trichet has been sending out some muddled messages.  During an interview on French television earlier this month, he blamed mass unemployment for the killing of a far-left activist by skinheads before advocating deep cuts to public expenditure: a recipe for mass unemployment.

Suave and confident,  Trichet probably didn't realise he was contradicting himself.  So I'd recommend that he reads a paper published by his minions at Bruegel in May.  An assessment of measures taken in embattled eurozone economies, it stated that austerity has caused "very high unemployment" in Greece and "record unemployment levels" in Portugal.

This was a rare admission from Bruegel that its preferred prescriptions are counterproductive.

Funded by Goldman Sachs (another one-time Monti employer), Deutsche Bank, Pfizer and Microsoft, the think tank has helped cloak the crude politics of austerity with intellectual gravitas. It is treated with reverence among the elite in Brussels and beyond. Top-ranking EU officials regularly attend its events, while opinion pieces by its staff grace such newspapers as Le Monde and The Financial Times.

Bruegel was established by Jean Pisani-Ferry, who was hired as an economic adviser by François Hollande, the French president, in April. The appointment indicates that Hollande, nominally a socialist, is shifting  to the right. In a syndicated column from December 2012, Pisani-Ferry parroted Margaret Thatcher's argument that "there is no alternative" to eviscerating the welfare state. "Rather than flirting with illusions, governments should confront the hard choices ahead of them," he stated.

Pisani-Ferry's new responsibilities have not caused him to be more reticent. When flaws were recently pinpointed in a by now infamous paper from the economists Carmen Reinhart and Kenneth Rogoff, he claimed it was "never a celebrated piece of economic research". The shortcomings did not undermine the case for austerity, he suggested.

One common misperception is that the EU's most powerful figures have made up their response to the economic crisis as it went along. The truth is that they have exploited the situation to dust down plans hatched earlier but which would have been difficult to implement under less straitened circumstances.

André Sapir, a senior fellow at Bruegel, was tasked with drawing up a series of recommendations for the European Commission nearly a decade ago.  The 2004 Sapir report advocated that the Brussels authorities be given greater powers to monitor the budgets of EU countries. 

Known to policy wonks as the "European semester", his proposal urged meddling in areas of responsibility that national governments guarded jealously.  The concept has been turned into reality over the past few years, leading to a situation where details of Ireland's budgets are sent to other European capitals before law-makers in Dublin get to see them.

Bruegel is part of a mushrooming network of corporate-financed think tanks dedicated to influencing debate.  A video posted on Bruegel's website about Latvia's bid to join the euro illustrates this point.  It tells the viewer that there is "wide consensus" that signing up to the single currency would be "the right move for the country". 

That must be news to the people of Latvia, most of whom don't want the euro, according to opinion polls. Such inconvenient details can, of course, be glossed over. More than likely, the Riga government won't be calling a referendum on this matter.

Democracy does not gatecrash the cheese and wine receptions that happen almost nightly in the world of think tanks. Without scrutiny, their "experts" can mould the outside world in the way that the wealthy and influential want. 

David Cronin's "Corporate Europe: How Big Business Sets Policies on Food, Climate and War" will be published by Pluto in August. Follow him on Twitter @dvcronin

A recent debate at the European Parliament in Strasbourg. (Photo: Getty.)
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Scarred lands: visiting the villages Boko Haram left behind reveals the toxic legacy of terrorism

The progress and challenges of Nigerian communities rebuilding after Boko Haram’s insurgency begins to wane.

“Sometimes it’s when I go to bed that what happened comes back to me.” Two years ago, Boko Haram militants stormed into 23-year-old John Amida’s home late at night in a village in Gwoza, Borno State, northeast Nigeria. Shielding his eyes with his hands from the torchlight saved his life. He shows me the mark in the centre of his forearm where the bullet aimed for his head went instead.

“All my friends were either killed or abducted,” he says. “I don’t try to forget what happened because it’s not possible; it’s with you even when it is not in your mind. The best thing is just to keep on living every day.”

After a broadly effective 18-month military campaign, Boko Haram remains a deadly yet waning force. Many communities once occupied by Boko Haram are now liberated. In Adamawa, just south of Borno, over 630,000 people previously displaced by Boko Haram have returned home.

With them, over 170,000 internally displaced people (IDPs) now live in camps, or – like John and his family – in host communities. He and his family live in a home vacated and lent to them by a local. All over Adamawa, IDPs live in homes shared with residents or given to them temporarily in exchange for help, crops or token sums of rent.

Adamawa is a serene, largely rural, mountainous state. Even deep into the dry season, driving through the roads that cut between its vast countryside, its land is incredibly scenic. But within local communities, in more rural, isolated villages north of the state’s capital, Yola, the picture is more complicated.

Gombi, a small town a few hours’ drive from Yola, was recaptured from Boko Haram in late 2014. Much of what was destroyed in the insurgency – shops and small businesses – have been rebuilt or replaced. The local government buildings have been largely restored. The impact is still visible but, according to locals, decreasingly so.

But in less urban areas, like in Garaha, a village in Adamawa, rebuilt homes sit next to broken, abandoned houses, churches, mosques and buildings blackened by the fires that damaged them. Local government officials say the damage across Adamawa by the insurgency has set the state’s development back by a decade. Funding for rebuilding the state, which local governments complain is insufficient, is concentrated on urban areas.

According to Chief Suleimanu, a traditional ruler in Garaha, mental health issues are widespread but few are financially able to access support. While some people have been able to move on, others are still dealing with the consequences.

“Many couples and families have separated,” he tells me, detailing how in some couples one partner feels attached to their home while the other can’t face returning, or feel there is little to return to.

“The same with the children, some of the young people have gone to bigger cities like Kano or Abuja because of a lack of opportunities.”

Many returnees, who left camps in Cameroon to come back to Adamawa, are from families who have lived in their villages for generations. Their ancestral roots anchor them to their homes because their farmland is their main source of income. Non-agriculture-based industries provide few jobs. For many people, fleeing their homes meant abandoning their livelihoods.

As of 2015, 52 per cent of people in Nigeria lived in rural areas. Their relative isolation is a blessing and a curse. Larger rural spaces provide them with adequate land to cultivate their crops – but it also leaves them exposed.

During Boko Haram attacks on Garaha through to early 2015, there was minimal protection from security forces who often take hours to arrive.

For many people living in rural Adamawa, life is getting harder and easier at the same time. Armed herdsmen, mainly from the Fulani ethnicity have become a greater threat across Nigeria, partly due to tensions between land ownership and cattle grazing.

According to locals, killings by herdsmen have increased this year. But villages are addressing their vulnerability. Armed vigilantes, some of which formed due to the lack of military protection against Boko Haram, are increasing. The police services are often too far away or too under-resourced to protect them. But some vigilantes now have more weapons and vehicles due to help from state services and locals. It is not an ideal solution but it has made places like Garaha safer.

With this new-found relative safety, villagers have begun farming again. With cash grants and donated tools from charities like Tearfund, it has been easier for thousands of people to begin cultivating land. In many villages there are small, lively recreation centres where young people play snooker and watch sport. Many of their places of worship have been rebuilt.

But the situation is grimmer in communities where such charities are not present.  Without resources, state or non-government help, rebuilding is a real challenge.

Adamawa is a state maxing on its credit of hospitality, relative safety and appreciation of agriculture. A recession in Nigeria and a severe food crisis in the northeast have added pressures on returnees and IDPs. Liberated communities will need more help and attention before they truly feel free.

Emmanuel Akinwotu is a journalist based between Lagos and London who writes about Africa, migration, and specialises in Nigeria.