Putinian utopias and the challenges of the West

27 February 20222 years ago babelfish

Better to think of a more cohesive West, ready to face the challenges of that bloc that seems to be increasingly destined to revive the great social-communist utopia. Gianfranco Polillo's comment

Any self-criticism is fine, but don't overdo it. Massimo D'Alema, in his interview with La Stampa , after having firmly condemned the Russian military aggression against Ukraine, mentions the wrongs of Europe not only against the nomenclature, but against the Russian people themselves. Left alone, after the dissolution of the empire, in a painful crisis that marked the fate of an entire generation. Vladimir Putin – this is the reasoning – is nothing more than the product of those immense deprivations. On that rubble he reconstructed the design of a Russia with new imperial aims.

Europe, when the time came, had to intervene. It was to give rise to a sort of "Marshall Plan" that would alleviate the suffering of the people. By tying the new ruling classes of the country to the fate of the Old Continent. With hindsight: one might say. Usually unnecessary justification. For the occasion, however, very little respectful of the real events that marked, in those years of tears and blood, the whole of European life.

As will be remembered after the fall of the Berlin Wall, a difficult decade followed, in which the European elites engaged in the not simple construction of their own future, with uncertain developments. The first step was German reunification: a precondition for any future European progress towards the construction of a common home. On the part of the German authorities, the eastward enlargement – because this was the case, given the invariance of the Grundgesetz – could have been managed better.

Instead, the need to protect the country's internal assets prevailed. Above all, to demonstrate to the inhabitants of the former GDR that they would not be treated as second-rate citizens. For this reason, in contrast to any economic law, the exchange rate between the two currencies (western and eastern mark) was set at par. Although the distances between the two territories, in terms of productivity, wage levels, tangible and intangible infrastructures, and so on, were abysmal.

The economic consequences of those choices were immediate. Domestic demand skyrocketed, mainly thanks to the increased consumption of newcomers, after the years of deprivation of the communist regime. The supply of goods, despite the strong industrial potential of the FRG, soon proved insufficient, giving rise to persistent inflation and a growing imbalance in the external accounts. The latter was destined to last until the birth of the euro.

To cope with a financial situation, which recalled the ghosts of the Weimar Republic, the Bundesbank pushed interest rates to the maximum. Through this path they wanted to pursue two distinct objectives: to support the exchange of the new currency; to attract the necessary capital from abroad to finance the reunification of the country. And that was the end. The collapse of the European Monetary System, which began in 1979, marked the end of an era. Devaluation of the lira, pound, peseta and Portuguese escudo. Credit crunch in France and Sweden, where interest rates reached the hyperbolic figure of 500 percent, to stop the bleeding of capital.

The chaos lasted mainly from 1992 to 1994. Needless to add, then it was more than difficult to hypothesize any "Marshall plans". In the following period, the main attention was paid to the construction of the EMU (Economic and Monetary Union) according to the Delors Plan of 1988. The new rules indicated a path marked above all by financial rigor. The convergence criteria towards the new currency were stringent: compliance with the Maastricht rules (debt and budget deficit), control of the inflationary process, stability of the balance of payments, long-term interest within threshold values.

Under the given conditions it was difficult to think of subsidized loans in favor of the Russian Federation. Compared to the American experience of the immediate post-war period, the essential element was also missing. In 1947, the year the Marshall Plan was launched, the US enjoyed a large balance of payments surplus, both on the commercial and financial fronts. At the same time, the industry, which had grown enormously thanks to war orders, risked a crisis of overproduction. The Marshall Plan was Columbus's egg: financing to Europe for the purchases of American products.

On the contrary, the Europe of the 1990s, but the United States itself, was in an opposite position. Washington was struggling with a large trade deficit and prudent fiscal policy in an attempt to counter it. In turn, the European balance of payments was in a precarious balance. While from a financial point of view, Europe itself was an importer of capital rather than an exporter. It was therefore difficult to think at the time of that act of generosity, which D'Alema would have wanted. But not for this, at least in the following years, there was indifference. On the contrary, the opposite was wrong, abandoning – as Mario Draghi recalled – any hypothesis of diversification of energy supply sources. To deliver, hand and foot, to a single monopolistic supplier. That Russian gas which, today, with the controlled cuts in supplies, risks strangling the continent's economy.

The progressive dismantling of the old energy policy, in the past so careful in diversifying sources, was the result of different assessments. The supinely accepting the mercantilist logic of the globalization process. The idea of the "end of history": not of the universal one, but of the 1900s. The maneuvering ability of the Russian autarchs, owners of the supplier companies: just think of the events of Gerhard Schröder. The persistence of ancient links between the new nomenclature and some exponents of the old European world.

Be that as it may, the fact remains that although the Marshall Plan was missing, it was nevertheless largely replaced by the proceeds from gas supplies. Strategic asset that Russia should have protected. Instead of throwing away the relative contracts, to make reason of state prevail. Bad precedent. Which will undermine future diplomatic and trade relations. And so the differences with D'Alema's reasoning become profound. More than a united Europe to be opposed to the USA and China, as he suggested. Better to think of a more cohesive West, ready to face the challenges of that bloc that seems to be increasingly destined to revive the great social-communist utopia.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/le-utopie-putiniane-e-le-sfide-delloccidente/ on Sat, 26 Feb 2022 18:23:33 +0000.