Le temps de la démondialisation
With this essay, Guillaume Vuillemey, lecturer in finance at HEC Paris, sets out to “take a new, in-depth look at the criticism of globalisation” (our translation throughout). In his view, “the dominant aspect of globalisation is not that it increases the distances between trade, but that it puts countries in competition with each other and, ultimately, offers the possibility to opt almost completely out of any contribution to the common good”. The author therefore argues that there is “an urgent need to invent a new form of economic sovereignty, with compulsory social and environmental protectionism”.
Although he does not claim to “dispute the obvious fact that globalisation has effectively made everything, or almost everything, on the planet available to us at low cost”, Vuillemey stresses that “certain needs, which do not boil down to individual consumption, are no longer being met adequately”. He lists these needs: enjoying a healthy natural environment; the feeling of a fair social order; the existence of strong collective belonging; the need to give meaning to everyday activities. “As private consumers, we have never had so many opportunities to satisfy our own ‘needs’, but as social and political beings, our life is far more impoverished than in the past. It is as if there were two worlds: the flourishing world of private interests and the neglected world of collective interests”, he writes.
The work dwells at great length on the hidden costs of globalisation, both direct, as in the case of sea and air transport, due to the pollution and emissions of greenhouse gases these cause, and indirect, with delocalisation allowing industries to evade the strictest tax and regulatory conditions by going and setting up production wherever the social and environmental rule book is, if not non-existent, at least a far slimmer volume. The author also takes pains to describe the direct and indirect costs of the practice of ships flying flags of convenience (more than 70% of global tonnage for tankers and more than 80% of global tonnage for container ships in 2020), which has seen the emergence of ‘parallel law’ outside the control of States. There are also direct costs in terms of pollution (oil slicks, de-ballasting, shipwrecks), which in most cases escape any sanctions, and indirect costs, in the sense that “transport costs have been artificially low for decades, as shipowners have been able to opt out of the economic and social consequences of their activities”. “Without the possibility of getting round State law, the globalisation and delocalisation of manufacturing activities to low-cost countries would have been far less of a phenomenon”, the author rightly observes.
“In dealing with a globalisation that has considerably reduced the states’ capacity to put right the damage caused by industrial and commercial activities, it is vital to reinstate political orders that guarantee the collective interests”, Vuillemey argues, adding that “if this is to be done, the gap between the two worlds of globalisation must be closed, by ensuring that it is no longer possible to pursue private commercial interests with no consideration for the common good. Without this, the ecological and social damage caused by free trade will continue to mount up, to the detriment of the many”. He believes that what is needed is to reterritorialize individuals and activities, “in other words (…) making them legally and fiscally less mobile, but obviously without infringing people’s right to mobility, to travel, to move, etc.”. He clarifies that “what needs to be pushed back is not mobility itself, but lawless spaces. In legal terms, therefore, it is a matter of re-establishing a substantial link between activities that are carried out at local level (where the various externalities and damage take place) and the regulatory and fiscal treatment of these activities, which must also be local. This would potentially require mobility to be taxed on the territorial borders, in other words a form of protectionism”.
While acknowledging that “brutal and disordered protectionism, proceeding from a sudden and ill-thought-out break with the rest of the world, on the basis of national borders alone, is not desirable”, Vuillemey makes the case for “social and environmental protectionism”. “Another justifying factor is that it serves to defend a vision of the common good on a given territory”, adding that “in this way, political communities may have different conceptions of the common good and consequently opt for higher or lower degrees of commercial openness”. “Taxation is not the only tool at the service of protectionist policy: it could also make use of regulatory measures, for instance bans on certain pollutants”, the author goes on to stress, before concluding that “here again, the nature of the decisions to be made depends on local collective interests. Ultimately, reconsidering the place of the common good in trade is to put politics back at front and centre of economic activity. It is high time that this were done”. (Olivier Jehin)
Guillaume Vuillemey. Le temps de la démondialisation – Protéger les biens communs contre le libre-échange (available in French only). Seuil. ISBN: 978-2-0214-8629-2. 100 pages. €28,80
Social policy in the European Union: state of play 2022
“Extreme weather – the day-to-day ‘face’ of climate change – led to hundreds of billions of dollars in economic losses and wreaked a heavy toll on human lives and well-being, while triggering shocks for food and water security and displacement”, states the introduction to this report, covering mostly the year 2021 and the first half of 2022. The description of the context of permanent and multifaceted crisis continues: “unsurprisingly, the outlook for the global economy, still reeling from the pandemic and Russia’s invasion of Ukraine, is increasingly gloomy and uncertain (…). For the first time in the 32 years that the United Nations Development Programme (UNDP) has been calculating the Human Development Index, this index – which measures the nation’s health, education, and standard of living – declined globally for two years in a row (…). As a result of Covid-19 and the war in Ukraine hitting the world back-to-back, human development slipped back to its 2016 levels in nine out of ten countries, reversing much of the progress made towards achieving the Sustainable Development Goals (SDGs). While some countries are beginning to get back on their feet, recovery is patchy and partial, further widening inequalities in human development”.
Bearing witness to this period of permanent crisis, the ‘State of Play 2022’ begins with a chapter by Federico Fabbrini on the war in Ukraine, which has “increased the urgency to reform the EU”. “In particular, the war has strengthened the case for improving the EU system of governance to make it more effective and legitimate, and for increasing its powers, including by boosting its fiscal capacity”, the author argues, pointing out that this is also the conclusion emerging from the Conference on the Future of Europe. “Besides several lights, the response of the EU and its member states to military conflict on its eastern border also revealed several shadows”, Fabbrini observes, correctly pointing out that the “objective of establishing a 5000-strong EU Rapid Reaction Force deployable in hostile environments by 2025 (…) smacked of too little too late”. “Also in the area of energy supply and security, EU action fell short of what was required. On the one hand, the ambition to leverage the collective force of the EU and the international energy markets did not take off the ground (…). On the other hand, strong economic and political interests delayed and diluted the Commission’s efforts to phase out Russian crude oil”, he writes.
Slavina Spasova and Matteo Marenco, on the other hand, praise the ambition displayed by the von der Leyen Commission in the social area, “putting forward legislative initiatives including the notable Minimum Wage Directive, the proposal for a Directive on Platform Work, the revision of legal provisions linked to work-related health and safety as well as innovative ‘soft law’ initiatives such as the Child Guarantee, a Council Recommendation on minimum income, the Gender Equality Strategy 2020-2025 and the new European Long-Term Care Strategy”.
In their conclusions, Vanhercke, Sabato and Spasova argue that “no less than a paradigm shift is taking place as regards the EU’s open strategic autonomy”. They go on to explain that “recent events clearly flag the weaknesses of the excessive openness of EU economic relations and a maximum global marketisation as a desirable socio-economic optimum. Consequently, the evolving and increasingly broad notion of the EU’s open strategic autonomy – including socio-economic and environmental considerations – can be considered as a key driver of the European project in the future. It could allow a rebalancing of the EU’s economic and (still underdeveloped) social dimensions may provide a tool for improving social and environmental standards globally”. (OJ)
Bart Vanhercke, Sebastiano Sabato and Slavina Spasova (edited by). Social policy in the European Union: state of play 2022 – Policy-making in a permacrisis. ETUI. ISBN: 978-2-87452-649-7. 184 pages. The 23rd annual report of the European Trade Union Institute is available in French and English. Hard copies can be ordered at a price of €30,00, or the report can be downloaded free of charge from the Institute’s website: https://www.etui.org
Guerre en Ukraine: déflagrations et recompositions économiques et financières
Edition 147 of the Revue d’économie financière is devoted to the war in Ukraine and its economic and financial consequences. Having pointed out that the war “influenced the Russian economy just as it was engaged on a post-Covid recovery trajectory” (+4.7% in 2021, but with inflation of 8.4%), economics lecturer (INALCO) Julien Vercueil stresses that the “Russian economy is not only experiencing a halt to its post-Covid recovery, but also net recession, which has been accompanied by an acceleration of inflation and a worsening of the public accounts”(our translation throughout).
Together with consultant Christophe Cordonnier, Vercueil also stresses that the three Caucasian republics (Armenia, Azerbaijan and Georgia) had to “create and then assume an official stance toward conflict while there were Russian troops stationed on the territory of each of them”. “Economically speaking, they are facing spiralling prices for energy inputs – a boon for Azerbaijan, devastation for the other two – tensions on the international and regional supply of cereals, sudden fluctuations in the price of the ruble, recession in their most important trade partner, i.e. Russia, and migration flows – considerable in size – from Russia”, the authors point out, arguing that the impact of these migrations has been positive in Armenia, “where the growth in real-term salaries is currently being driven by the digital sector, which it appears could be linked to the fact that many Russian specialists have relocated to Armenia”. They note, however, that the “value of apartment housing in Erevan rose by 19% between July 2021 and July 2022”. The arrival of more than 100,000 Russian citizens in Georgia over the last few months “is, in some cases, making the local populace nervous, as the Georgians tend to see Russia as an occupying state”, they write, noting that real estate prices have shot up (+27% for sales and +79% for rental costs in Tbilisi). The fact that trade flows have been redirected south as a result of the war in Ukraine is also a positive factor for these countries. “In the second quarter of 2022, road transport, for instance, grew by 38% in Georgia and rail by 19% on the previous year”, the authors report, stressing that the “brilliant results of the Caucasian economies reported in 2022 could be interpreted as dividends for their ambiguous positions towards Russia”. (OJ)
Guerre en Ukraine: déflagrations et recompositions économiques et financières (available in French only). Association Europe Finances Régulations. Revue d’économie financière. No. 147, Q3 2022. ISBN: 978-2-3764-7069-4. 315 pages. €32,00
Der Krieg und Russlands Einfluss in Südosteuropa
The review Südosteuropa Mitteilungen published this fascinating special dossier on Russian influence in the countries of south-eastern Europe. It includes, amongst other things, and analysis by Prof Florian Bieber (University of Graz), stressing that the refusal of the Serbian government to come on board with the sanctions against Russia is par for the course in Serbian foreign policy. Far from being the consequence of being caught in the crossfire between East and West, as the Serbian president has been trying to claim, “the ambiguity is a deliberate strategy on the part of Aleksander Vucic to shore up his power nationally and maximise his room for manoeuvre at international level, he argues (our translation throughout).
Armina Galijas (University of Graz) takes a look at Russian influence over the Republika Srpska, for instance through politicians such as Dodik, the orthodox church and propaganda spread by Russian, Serbian and local media. However, Galijas also stresses that Russia’s power and influence have been fed by the weakness of the EU: “it is the void that the EU’s lukewarm and often hypocritical integration policy left behind it in the region that has allowed players such as Russia to position themselves as ‘soft power’ giants, despite their economic weakness”. “It appears, however, that the war has been a wake-up call to the EU and that it is trying to become not just a bureaucratic actor in the Balkans, but also a geopolitical one”, he writes, adding that it has still to translate its words into actions.
The journalist Alexander Andreev (Deutsche Welle) draws a vitriolic portrait of Bulgaria, a country under the influence of Russia and potentially “Moscow’s Trojan horse in the EU and NATO”. He goes on to point out that it is also the “most corrupt country in the European Union, with a judicial system not worthy of the name”. Andreev adds that “journalists are bought, politicians and magistrates are bought, entire media, businesses and even institutions are bought. Bulgaria is a country in which Putin’s supporters make up perhaps 20% of the population, but the percentage of Putin apologists is even higher”. (OJ)
Der Krieg und Russlands Einfluss in Südosteuropa (available in German only). Südosteuropa-Gesellschaft. Südosteuropa Mitteilungen. 05-06/2022. ISSN: 0340-174X. 160 pages. €15,00