Operation Nobel, part II

The prize committee issues Obama with a call to action

So, the weather didn't clear, but the mood in Oslo lifted distinctly yesterday evening: Barack Obama seems to have pulled off the remarkable trick of talking peace while standing firm to his commitments to war. And despite annoying the Norwegians at first by making his visit so peremptory -- "Everybody wants to visit the Peace Centre except Obama," snarked the newspaper Aftenposten -- he even seems to have warmed their hearts. He has done all this in less than a day. Living up to the prize will be nothing like as easy.

After his morning visit to the Nobel Peace Institute, Obama met with Prime Minister Jens Stoltenberg, who hardly needed the popularity boost, having just been re-elected, but who was doubtless grateful for it all the same. He set out a to-do list for the US president, beginning with a strong political agreement in Copenhagen.

That established one theme for the day: telling Obama how to do his job. At the press conference afterwards, a Norwegian journalist set the other: the search for justifications for his prize. What were the president's own views on it? Obama was asked. He replied by defusing the question with a one-liner: "The goal is not to win a popularity contest." That was the easy base covered, but the one American journalist then also granted a question went straight for the jugular: "Will the July 2011 date be when US troops actually withdraw [from Afghanistan]?" It would, Obama acknowledged, be just the beginning. He was doubtless relieved that the day's tight schedule would leave no time for follow-up questions.

The proddings and calls for justifications followed Obama over in the early afternoon to City Hall, where he was to give his Nobel Lecture, the prizewinner's address. Introducing Obama, the chairman of the Nobel Committee, Thorbjørn Jagland, gave his own, highly self-conscious defence of the committee's decision to award the prize to the US president, as well as a running commentary on the sort of world they would like to see him help create.

When Albert Luthuli received his prize in 1961, Obama was told, the struggle against apartheid was in its infancy; when Martin Luther King received his in 1964, the struggle for civil rights in America was also far from over. And as the committee has constantly been pointing out since making the award, Obama's prize, much more so than theirs, is intended to be "a call to action".

Some might, of course, say that all this is merely wishful thinking, and that their hopes of handing Obama a set of golden handcuffs at the same time as the Nobel gold medal are misplaced, misguided even. But as the words of Obama's own speech echoed literally right around the city this afternoon -- broadcast as they were from a large screen outside the City Hall -- he seemed to win a good few people to their cause.

In any case, "A Call to Action" is a phrase the Norwegians will keep hearing over the next year, it also being the title of the Obama exhibition that will run until December at the Nobel Peace Centre. Whether it is a phrase that still rings in the man's own ears in six months, let alone a year's time, remains to be seen.

With luck, he might still remember it next week at least, when he flies back this way to Copenhagen. But my guess is that he will not. After an afternoon spent tying himself in knots over the mirage of "just wars", and paying lip service -- however eloquent that lip service may have been -- to the much harder task of rebuilding the livelihoods of those in whose country he currently commands an army, it seems that Obama will not himself be making the shift from the probable to the possible any time soon.

 

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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump