What's up, Comrade Bush?

Cajoled for years to take on Western-style economic liberalism there's more than a wry smile on the

The irony has not been lost on the political leaders of Latin America’s insurgent left movements that the governments of Europe and the US are now taking measures that involve far deeper state intervention in the economy than actions they themselves used to harshly criticize when attempted in other regions.

Venezuelan President Hugo Chavez joked that George Bush “is finally beginning to understand the road to socialism” and notes that “he isn’t criticized for nationalizing the largest bank in the world.”

“What’s up, Comrade Bush,”* he said.

Jabs coming from the leaders of left-leaning governments, which now run the vast majority of the countries of Latin America, have flowed freely as they feel vindicated in their criticisms of neoliberal policy prescriptions and as some of their interventions into their economies have sheltered them to some extent from the colossal global crisis.

But they are coupled with a deepening of resentment over the vigour and force with which certain forms of free-market policies were proposed to them in the last thirty years, often imposed as the necessary conditions for crucial loans from international organizations such as the IMF.

Their anger at opposition coming from the north to their recent attempts to re-introduce elements of regulation and protection into their economies has only intensified as global market forces and unrestricted capitalism brought even the most powerful states in the world to their knees.

Soon after important election victories for the left in Ecuador and Paraguay, the influence of neoliberal economic and ideas and of the United States, already by all accounts at an all-time low, have taken another hit in the region with the economic crisis.

John Ross, who along with Ken Livingstone is providing advice to the Venezuelan government, said that “they have abandoned every policy that they've advocated that other governments should follow over the past 20 years. And they've adopted the measures that they've condemned other governments for taking.”*

These sentiments are echoed by even the most centrist of the region’s left-of-centre governments, such as Brazil’s Luiz Inacio Lula de Silva. "We did our homework — and they didn't, they who've been telling us for three decades what to do,” he complained.

And the normally reserved Chilean president Michele Bachelet felt secure enough in the changed political climate to make the following joke, in the US, about the country’s history of intervention in the region.

“Why has there never been a coup in the United States?” she asked a group of investors.
“Because there is no U.S. embassy in the United States.”

Bachelet, the country’s first female president and member of the Socialist Party, was imprisoned and tortured by the government of Augusto Pinochet who took power in a US-supported military coup in 1973.

She was forced into exile as the government killed thousands of supporters of the democratically elected socialist Salvador Allende. The Pinochet government ruthlessly imposed neoliberal prescriptions and counted on Milton Friedman as an economic consultant.

But in the case of Chile at least the country did experience strong economic growth during the dictatorship. However, the movement of left leaders elected in the last ten years in the region was a self-conscious movement against neoliberalism, which in most cases led to unprecedented levels of inequality and historically low rates of economic growth in Latin America.

In many cases these polices were imposed under duress when these countries had their own crises. In 1982 when many Latin American countries defaulted on their huge debts to the developed world, rescue packages from international organizations influenced by the governments of Reagan and Thatcher were conditional on the acceptance of austere structural adjustment programs.

In theaftermath of the Asian financial crisis of 1997, the response from the IMF caused many commentators, especially in Asia, to complain that the measures imposed would never be so harsh if something similar happened in the West. Now that it has, leaders of the Latin American left are seeing it this way and many are disgusted at how easily the banks and rich are getting off.

Nicaraguan Congressman Edwin Castro said that "We think the Bush administration should follow the same policies that they and the International Monetary Fund have always told us to follow when we have economic problems.

"One of our economists was telling us that Bush has just implemented communism for the rich."

The Nicaraguan party to which Castro belongs is the Sandinistas, the leftist party violently opposed by the Reagan-backed Contras in the 1980s and which returned to power in 2006.

Hugo Chavez, elected in Venezuela in 1998, was the first of these left-leaning leaders to come to the fore and receives the lion’s share of attention due to his country’s oil money and his unique and controversial approach to public speaking. But since then, left-of-centre governments have also come to power in Argentina, Brazil, Chile, Bolivia, Ecuador, Nicaragua, Uruguay, and most recently, Paraguay.

Though the region will certainly be hurt by depressed commodity prices, to the extent that these governments have been able to push reforms past local and international opposition, taking forms ranging from political opposition, military coups to threats of capital flight, they have ironically served to insulate them somewhat from the current crisis.

For example, the FT’s Benedict Mander called the Caracas stock exchange an “oasis of calm” due to the country’s currency controls, implemented in 2003.

Reuters pointed out that: “Venezuela has suffered little direct effect from the market chaos because Chavez nationalised the most important companies that once traded on the minuscule Caracas stock exchange and because its currency is fixed by exchange controls.”

These kinds of economic policies, like those of Ecuador’s recently approved new constitution which allows greater government control over banks, are the exact opposite of the unregulated free-market policies promoted quite powerfully by international organizations and institutions influenced by the U.S., Europe and Japan. And pushing them through required facing stiff international opposition.

Eric Wingerter of left-leaning Latin America blog borev.net raised a comparison between the financial sector’s treatment praise of the U.S.’s recent forced nationalization of major banks and its reaction to Hugo Chavez’s decision two months ago to purchase a single and profitable bank on the open market.

The Wall Street Journal then claimed that move could lead to “mass withdrawls” that could “snowball into a systemic bank run that puts the economy and political system at play.”

Policymakers and analysts in the US and Europe will probably be concentrating on their own countries for the next weeks, or perhaps months. But if they ever turn back to Latin America, they will find they face a very difficult task if they would like to restore their credibility.

ALEXEI FATEEV/ALAMY
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The Catalan cauldron

The prospect of the break-up of Spain poses yet another challenge to Europe.

As Britain prepares to mark the centenary of the bloodiest battle in the First World War, the Somme, in July, Spain is bracing itself for an even more traumatic anniversary. In July 2016 it will be 80 years since the start of a civil war that tore the country apart and continues to divide it today. In the four decades since the return of democracy in the mid-1970s, Spaniards slowly inched towards rejecting the extreme violence of the Francoist right (and elements of the opposing left) as well as acceptance of various federal arrangements to accommodate the national sentiments of the Basques and Catalans, whose aspirations Franco had so brutally suppressed. In recent years, however, this consensus has been called fundamentally into question, with severe potential consequences not only for the unity of Spain, but the cohesion of the European Union.

On 27 October 2015, after the Catalan elections, the new parliament in Barcelona passed a declaration requesting the start of a formal secession process from Spain, to be in place in 18 months. The immediate reaction of Spain’s prime minister, Mariano Rajoy, was to announce that the state was entitled “to use any available judicial and political mechanism contained in the constitution and in the laws to defend the sovereignty of the Spanish people and of the general interest of Spain”. The preamble to the constitution proclaims the Spanish nation’s desire to “protect all Spaniards and the peoples of Spain in exercising their ­human rights, their cultures and traditions, languages and institutions”. Probably the most disputed articles are 2 and 8, which state, respectively, that “the constitution is based upon the indissoluble unity of the Spanish nation, common and indivisible patria of all Spaniards” and that “the army’s mission is to guarantee the sovereignty and independence of Spain, to defend its territorial integrity and the constitutional set-up”. Rajoy’s implication was clear: the unity of the country would be maintained, if necessary by military means.

It was Madrid, however, that broke with the federal consensus some years ago and thus boosted secessionist sentiment in Catalonia. José María Aznar’s government (1996-2004) failed to respond to demands for greater autonomy for Catalonia, at a time when secession was not even mentioned. This led to an increasing awareness among Catalans that the federal transfer system within Spain left them with an annual deficit of 8 per cent of Catalonia’s GDP because of the financial arrangements established by the Spanish state, an issue aggravated by the effect of the global financial crisis. Catalan nationalism thus became a matter of not only the heart, but also the pocket. Even more important was the Spanish legal challenge to the Statute of Autonomy of Catalonia 2006 and its subsequent dilution, after it had been sanctioned by the Catalan parliament, and by both the Spanish congress of deputies and the senate, not to mention the Catalan people in a legally binding referendum.

According to the Spanish high court of justice, some of the statute’s content did not comply with the Spanish constitution. This outraged many Catalans, who could not understand how the newly approved statute – after following all the procedures and modifications requested by Spain’s political institutions and constitution – could still be challenged. Four years later, the Spanish high court finally delivered its verdict on 28 June 2010. It removed vital points from the Statute of Autonomy 2006 and declared them non-constitutional. All this led to a revival of Catalan nationalism, culminating in a symbolic, non-binding referendum in November 2014, which was boycotted by opponents and produced a majority of 80 per cent in favour of independence.

The roots of this antagonism go deep, to the civil war that broke out on 17-18 July 1936 when some sectors of the army rebelled against the legitimate government of the Second Republic. The rebels rejected democracy, the party system, separation between church and state, and the autonomy of Catalonia, the Basque Country and Galicia. Their primary objective was to re-establish “order” by eliminating all vestiges of communism and anarchism, then quite strong in some parts of Spain.

High on the list of General Franco’s targets was Catalan nationalism, which had been growing since the late 19th century. The industrialisation of Catalonia and the Basque Country left the most economically developed parts of the Spanish state politically subject to the less prosperous Castile. By the end of the 19th century and influenced by German Romanticism, la Renaixença – a movement for national and cultural renaissance – prompted demands for Catalan autonomy, first in the form of regionalism
and later in demands for a federal state.

Catalan nationalism did not emerge as a unified phenomenon. Diverse political ideologies and cultural influences gave rise to various types of nationalism, from the conservative nationalism of Jaime Balmes to the federalism of Francesc Pi i Margall, to the Catholic nationalism of Bishop Torres i Bages and the Catalan Marxism of Andreu Nin, among others. Catalonia enjoyed some autonomy under the administrative government of the Mancomunitat or “commonwealth” from 1913 onwards. This was halted by the 1923 coup d’état of the dictator Miguel Primo de Rivera. Autonomy was granted again during the Second Spanish Republic from 1931-39 – but abolished by Francisco Franco’s decree of 5 April 1938.

Franco’s victory led to the suppression of Catalan political institutions, the banning of the Catalan language and proscription of all the symbolic elements of Catalan identity, from the national flag (the Senyera) to the national anthem (“Els Segadors”). In February 1939, the institutions of the autonomous Generalitat went into exile in France. In 1940 the Gestapo arrested the president of the Generalitat, Lluís Companys, and handed him over to Spanish officials. He was interrogated and tortured in Madrid, then sent to Barcelona, where he was court-martialled and executed at Montjuïc Castle on 15 October 1940. The most important representatives of the democratic parties banned by the regime went into exile, or were imprisoned or executed. The authoritarian state designed by Franco crushed dissent and used brute power to suppress the historical nations included within its territory. The regime’s aim was to annihilate the Catalans and the Basques as nations.

***

After almost 40 years of Franco’s dictatorship, Catalonia recovered its government, the Generalitat, in 1977 – before the drafting of the Spanish constitution in 1978 – and sanctioned a new statute of autonomy in 1979. The 2006 statute was expected, at the time, to update and expand Catalans’ aspiration for further devolution within Spain: never secession.

At present, a renewed nostalgia and enthusiasm for Francoism can be found among some sections of the Spanish right. One of the main challenges of the newly democratic government from the mid-1970s onwards was to get rid of the symbols of Francoism that had divided Spaniards between “winners” and “losers” in the civil war. It was only in 2007 that the then prime minister, José Luis Rodríguez Zapatero, guided the Law of Historic Memory through parliament with the aim of removing hundreds of Fascist symbols reminiscent of the Franco era from public buildings. It also sought to make reparations to victims of the civil war and the ensuing dictatorship.

There still exist hundreds of other references to the Fascist regime, however, with streets, colleges and roads named after Franco and his generals. The most controversial of these is the Valle de los Caídos (“Valley of the Fallen”), near Madrid, commissioned by Franco as his final resting place. It supposedly honours the civil war dead, but is primarily a monument to the general and his regime, housing the graves of Franco and José Antonio Primo de Rivera, the founder of the fascist Falange political party. Roughly 450,000 people visit it every year, and while most of them are foreign tourists, groups of Falangists and supporters of the old regime who come to pay tribute to the dictator have frequented it. Nostalgics for Francoism, though still a small minority within modern Spain, are becoming vociferous. They find common ground with far-right-wing conservatism, particularly in their shared aversion to federalism.

On 3 August last year Artur Mas, the then president of Catalonia, called an extraordinary parliamentary election after all attempts to negotiate and agree on a legally binding referendum with the Spanish government failed. Supporters of independence immediately announced that the forthcoming Catalan elections would be regarded as a plebiscite on independence.

On a turnout of more than three-quarters of the electorate, supporters of outright independence gained 48 per cent of the vote, while those backing a unitary state secured 39 per cent. On 9 November 2015 the Catalan parliament formally declared the start of the process leading to building an independent Catalan state in the form of a republic. It also proclaimed the beginning of a participative, open, integrating and active citizens’ constituent process to lay the foundations for a future Catalan constitution. The Catalan government vowed to move forward with its secession process. Immediately, the Spanish Constitutional Court suspended the Catalan law setting out a path to independence and warned that defiance could lead to criminal charges.

Worse still for Madrid, secessionism is gaining strength not only in Catalonia but also in the Basque Country, whose premier, Iñigo Urkullu, demands a “legal consultation” on the northern region’s future in Spain. He supports a new statute for the Basque Country and defends its status as a nation in the EU. Similarly to Catalonia, the Basque Country has a distinct language and culture, and benefits from the so-called concierto económico, an advantageous financial deal with the Spanish state.

***

The Spanish government’s refusal to engage constructively with Catalan nationalism contrasts markedly with London’s more relaxed and ultimately more successful response to Scottish nationalist aspirations. The “Edinburgh Agreement” between the British Prime Minister and the then first minister of Scotland to allow a binding referendum on Scottish independence stands in sharp contrast to the Spanish government’s outright opposition to a similar vote in Catalonia. Basques and Catalans find deaf ears regarding further devolution and binding referendums on self-determination. This highlights the distance between various conceptions of democracy that coexist inside the European Union, rooted in the diverse political cultures of nations with varying historical backgrounds.

All this matters, not only to Spain but to the EU, because it is part of a broad trend across the continent. In mainland Europe, demands for self-determination are running strong in Flanders as well as parts of Spain. In turn, tensions between Italy and Austria over control of South Tyrol (Trentino Alto Adige, to the Italians) remain high, as do demands advanced by the South Tyrol­ean secessionist movement. Bavarian regionalism is critical of the present German (and European) political order. Further to that, modern Venetian nationalism and its long-standing demands for independence have prompted a renewal of Venetian as a language taught in schools and spoken by almost four million people.

Matters are now coming to a head. Catalonia and Spain are in flux following two inconclusive elections. In January, after a prolonged stand-off, the sitting Catalan president, Artur Mas, made way for a fellow nationalist, Carles Puigdemont. He was the first to take the oath of office without making the traditional oath of loyalty to the Spanish constitution and the king. Felipe VI, in turn, did not congratulate Puigdemont.

The new president has announced that he plans to draw up a constitution, to be voted on in a referendum “to constitute the Catalan Republic” at the end of an 18-month consultation process. Puigdemont’s strategy envisages not a dramatic unilateral declaration
of independence, but a more gradual process of disconnection in constant dialogue with the Spanish government and Catalan political parties. Let no one be deceived by this “softly-softly” approach: it is designed to culminate, in a year and a half, perhaps sooner, in a vote on establishing a separate, sovereign state of Catalonia.

Meanwhile, Spanish politics are in flux. The elections to the Cortes on 20 December 2015 resulted in a victory for Conservatism, but also the most fragmented Spanish parliament ever and, as yet, no government. Almost the only thing the Spanish parties can agree on is opposition to Catalan independence, yet even here there are divisions over whether more autonomy should be granted and what response to make to unilateral moves by the Catalans.

The stakes are high for both sides. By pressing too hard, too early, Catalan nationalists may provoke Madrid. This would be a mistake. Strategy is important and recent events in Catalonia will weaken the Catalans’ democratic, peaceful and legitimate desire to hold a referendum on independence. Likewise, a heavy-handed response from Madrid will not only destroy the residual bonds between centre and periphery in Spain, but put the central government in the dock internationally. A confrontation will also cut across the only possible solution to this and all other national conflicts within the eurozone, which is full continental political union. Full union would render the separation of Catalonia from Spain as irrelevant to the functioning of the EU, and the inhabitants of both areas, as the separation of West Virginia from Virginia proper in the United States today.

In a nightmare scenario, radicalisation and unrest could emerge in Catalonia, with division between Catalans and memories of the Spanish Civil War coming to the fore. In this context, it might become very difficult to prevent violence.

This is the last thing that Brussels wants to hear as it grapples with the euro crisis, Russian territorial revisionism, Islamist terror, the migrant question and the prospect of Brexit. A meltdown in Catalonia will create dilemmas for Europe, starting from problems with Schengen, and raise questions about continued membership of the EU. It will also work against Catalans’ expectations of receiving EU support in their quest for independence, as turmoil in Europe will prompt nation states to close ranks. The EU will not be expected to intervene, because this scenario would – at least initially – be defined as an “internal affair of Spain”. Conflict between Barcelona and Madrid would shatter one of Europe’s biggest member states.

In that event, the peninsula will become the hottest point in an emerging “arc of crisis” across the southern flank of the EU, stretching from Portugal across Spain, an Italy struggling along with everything else to cope with the flow of migrants, the troubled Balkans, to Greece, which is perpetually perturbed. This highlights yet another flaw in the EU. It has no institutional framework for dealing with Catalan demands to become a nation within the Union, or those of other populations. Merely insisting on Spanish state sovereignty will not make the problem go away for Brussels, or for Europe as a whole. This is a potential matter of life and death not only for Spaniards and Catalans, but perhaps for the EU itself.

Brendan Simms is the director of the Forum on Geopolitics at the University of Cambridge and president of the Project for Democratic Union Montserrat Guibernau is a visiting scholar in the Department of Politics and International Studies at Cambridge and a member of the Forum on Geopolitics

This article first appeared in the 21 April 2016 issue of the New Statesman, Shakespeare 400 years Iater