Looking forward, looking back

The eventual arrest and appearance in court in Serbia today of Ratko Mladić does indeed put a bookmark in the pages of history.

Looking forward, the lesson is clear that justice does – eventually – catch up with war criminals. The survivors of Srebrenica can look forward to justice being served on the part of loved ones casually murdered by Mladić’s troops – and to rape as a weapon of war getting a full examination in court. Serbia can look forward to claiming its place in European political structures and we can anticipate the anti-war aims of the original European Union claiming further territory albeit, in this case, twenty years too late to be of practical use to Yugoslavians.

Whatever the suspicions over the timing of the arrest, the last of the official, unofficial and private support structures that had sustained Mladić over fifteen years on the run had clearly fallen away. He might appear weak and unrecognisable as a result of an apparent stroke – but his adopted name, and his place of residence, hardly provided concealment (unlike, for example, the disguise adopted by Karadžić). Here, the conclusions of the investigation promised by Serbian President Boris Tadić will be interesting. There is an interest in bringing Mladić quickly to justice and, once the legal debates over his extradition have been observed, the court prosecutors at the ICTY clearly need to move quickly given Mladić’s apparently poor state of health. We don’t want another Milošević.

Karadžić’s repeated assertion today about working with Mladić’s legal team to ‘bring out the truth’ of what happened in Bosnia is one to anticipate. Foreign Secretary Hague’s warm words today were welcome, but he should not forget that the equivocation displayed by one of his predecessors in the post over a period of time was an unconscionable act of betrayal which gave a green light to Mladić and the rest of the Bosnian Serbs and which resulted in the Bosnian government accusing Hurd of being an accomplice to genocide. Britain’s Unfinest Hour, indeed.


Destination: a big hill

I’ve been in Poland for the last week for, firstly, the annual meeting of the Editorial Board of the SEER Journal for Labour and Social Affairs in Eastern Europe, a journal which I help edit; and then secondly in attendance at the 12th international conference of the Otto-Brenner-Stiftung, a German research trust attached to the metalworking union IG Metall.

It was my first trip to Poland, hitherto a (rather large) hole in my visited map of central Europe, while the event provided major opportunities to catch up with old and new colleagues in the European trade union movement. The conference was held in Katowice, a town with perhaps all the tourist pull of Redcar, with which it shares a steel industry past if not the coal mining one that also defines Katowice, although I travelled to, and spent some time in, the rather more lovely/touristy city of Krakow some 77kms away.

It’s clear that Katowice has changed, radically. From a position of a reliance on heavy industry, and in a situation where a glimpse of sunsets was an apparently rare event as a result (as well as constituting a personal definition of hell), Katowice has become, well, a city of conference and business hotels and not obviously a lot else. Even if the jobs are not necessarily ‘McJobs’, the shift in the employment base is evident and that of course presents great challenges to trade unions.

Against a backdrop of dramatic and almost universal decline amongst central and eastern European trade unions, the conference theme of environment and growth – with discussions centring on green jobs, shifts in production away from car manufacturing and a consumption based on environmental values rather than consumerist ones – presented the stage for a tough series of debates. With employees and their trade unions having gone through one, hugely costly transition already in terms of the shift to market-based systems, and for whose impact the blame can clearly be laid at the door of capitalism, the prospect of going through another represents clear difficulties to trade union colleagues from the region. Here, when it is western trade unions that are propounding the need for such a transition represents a unique difficulty as regards their eastern counterparts. Examples of successful, and inspirational, organising initiatives can be found – and the transition to environmental values is clearly a very necessary one – but these need to be made clearer, more imaginative and more relevant if central and eastern European trade unionists are to be convinced that this next transition will not lead to them being totally wiped from the map.

For those of you looking at the title of this post for a less metaphorical hill, how about this: the Kopiec Kościuszko (Kościuszko Mound) – one of four such surrounding Krakow, this one being 326m above sea level affording magnificant views over the city and surrounding area. And yes, it is of course absolutely possible to get to the top even though the path might be serpentine.

Turkey’s new ally?

So call-me-Dave has turned up in Ankara chummily vowing to ‘fight’ for Turkey’s membership of the EU.

Well, good on you – at least on the face of it (though comments as to the wider geo-political interests, with regard to Turkey’s ability to act as a restraint on Iranian nuclear ambitions, are no doubt also on the mark as to why this support was offered). It’s right that Turkey can play a bridging role between east and west, and provide a greater understanding of Islam within the EU, and this is the sort of role that Turkey, which applied for EU membership as far back as 50 years ago, has long sought for itself. In principle, and subject to meeting the demands of EU membership, including over EU member Cyprus and a better domestic human rights commitment, Turkey should be in the EU.

But: fine words butter no parsnips – and, aside of Cameron’s ability to say one thing to one audience when circumstances demand and another to a different audience (like here, for instance, over the Building Schools for the Future Fund; over the scrapping of the NHS central database; and over the continuing uncertainties over the establishment of the Green Investment Bank which, as the TUC’s Philip Pearson argues, are indeed stalling the coalition’s green ambitions), he also has policy inconsistences which mean that ‘fighting’ for the rights of Turkey may not, in the end, come to much. As Denis MacShane pointed out in yesterday’s ‘Comment Is Free’ bit of the The Guardian, these would include:

– leaving the mainstream of the European Parliament

– allying with the trenchant right-wing in the EU for which Cameron’s entirely legitimate desire for a greater understanding of Islam is not a policy priority

– a policy promise of a domestic referendum on any new EU treaties, endorsement of which is likely to be a tough ask in the context of domestic politics encompassing the UK Independence Party (though Cameron is not exactly a stranger to retreating from promises of an EU referendum).

It will be interesting to see whether Cameron’s self-portrayal as a friend of Turkey actually means anything in the tough battles to which these issues point, or whether his growing reputation as someone who backs down in the face of adversity will continue to find endorsement in, as I suspect, the eventual dropping of Turkey somewhere down the line.

ICJ says Kosovan independence ‘not illegal’

In a rather surprising move, the International Court of Justice has ruled that Kosovo’s declaration of independence in February 2008 did not violate international law or UN Resolution 1244. But the decision was an interestingly split one: nine of the fourteen judges agreed with the advisory opinion, plus the president, while four votes against and there was one abstention: see the Balkan Insight report.

The decision is non-binding and is likely, as Florian Bieber argued earlier this week, also on Balkan Insight, to have its major importance not as a golden bullet but in the form of continued diplomatic negotiations towards establishing a working relationship between Kosovo and Serbia. Nevertheless, it seems likely to give added emphasis to the former, whose President was – rightly – calling for a ‘dignified celebration’ of the decision (since the two sides do need to work together on their common future, and avoiding a backlash both in Serbia as well as amongst Serbian citizens living in Kosovo is a fundamentally important means to achieve that). Serbia, which had brought the case to the ICJ, may well not in the short-term change its position of non-recognition of an independent Kosovo, but the long-term future of both within the European Union will essentially make such a perspective redundant as well as, potentially, providing for the means by which it can be dealt with – even if that is something to which the EU itself needs to adjust.

States which have refused to recognise Kosovo pending the ICJ’s decision may well not be that numerous, since many have actually, or potentially, secessionist movements already in existence on their territories (chiefly, Georgia, Moldova and Bosnia, but also encompassing Romania and Slovakia, not least given the background of the stridently nationalist noises coming from a right-wing Hungary [subscription required]). The full ICJ decision needs to be digested as regards precisely how much succour it might give to such movements, or grounds for fear amongst countries hosting them – but, as I argued last week, the practical circumstances in the background of Kosovan independence do provide hopes that this particular ICJ decision can be distinguished on its facts without paving the way for secessions and unilateral, unagreed border ‘adjustments’ elsewhere.

Kosovan independence: ICJ decision soon

Balkan Insight has spotted that the International Court of Justice will announce its advisory opinion on the legality of Kosovo’s declaration of independence next Thursday, at 3pm.

The case, brought by Serbia, which rejects Kosovan independence as illegally constituted, is, of course, unlikely to be resolved next Thursday. Many discussions are yet to be held and the Court’s opinion provides one more landmark stage in this process. A genuinely reform-minded regime in Serbia under Boris Tadić provides a hopeful sign of optimism – his attendance at this weekend’s Srebrenica commemoration was welcome, as was the apology finally pushed through the Serbian parliament earlier this year.

Nevertheless, memories remain fresh; and wounds remain raw. They will heal – and tracking down and handing over Mladić, whose units were responsible for the massacres, to be tried in the Hague alongside Karađić will help. Tadić needs to follow through on his weekend words here.

In the meantime, and in this other theatre of that war, Kosovo’s independence must be allowed to stand. While upholding the general principle of the importance of protecting the integrity of national borders, a state that attacks its own people, conducting campaigns of terror amongst and making refugees of its citizens, has conceded the right to have those borders respected. Modern Serbia needs to recognise that its past approach is ultimately why Kosovo has gone: and both Kosovo and Serbia need to be given support for EU accession: preserving peace amongst states previously at war is simultaneously the Union’s raison d’être and its continuing most important role. Greater leadership is needed here, too – despite the Union’s other evident concerns, building peace and relationships is what it exists for and it needs urgently to expand its role in and for Serbia and Kosovo.

On regulation and the invisible hand

A very interesting article has appeared on Transitions Online over the last few days looking at the role of western banks in lending to central and eastern Europe in the run up to the financial crash – which has ended up hitting several countries in the region (chiefly Hungary, Romania and Latvia) particularly hard.

The article points out a couple of interesting things:

– that the net cumulative capital inflows into central and eastern Europe between 2003 and 2007 were, according to the IMF, three times greater than those flowing into Asia before the 1997 crisis there. Annualised capital inflows were running at 15% of GDP and, in Bulgaria, doubled in this period to reach a cumulative total of 192% of GDP

– most lending was to consumers, in the form of mortgages, rather than corporate lending which could have stimulated economic growth and employment. Some part of the corporate lending that did exist was for property developments (which may well have been targeted at (far) western Europeans)

– the consumer boom thus generated sucked in imports, which destabilised the structures of central and east European economies

– and, crucially, the debt offered was denominated in foreign currencies, leaving domestic borrowers absolutely exposed not only on the grounds of the global downturn and to the credit crunch, but also as a result of the ultimately destabilising impact which the nature of these loans had on local economies.

Consequently, average growth between 2003 and 2008 was higher in countries that did not have an economic boom before the crash – i.e. that the foreign bank-led lending boom actually made these countries poorer than they would have been with a more moderate lending policy.

Clearly, Someone Must Be To Blame For All This. The author resists apportioning blame – while giving space to the views of a board member of an Austrian bank within the Raiffeisen group to the effect that regulators and politicians must take a share of the blame.

I disagree.

What is ultimately to blame is unfettered free markets (thank you, Adam Smith). Where there’s demand in a capitalist economy, organisations will fill it – that’s the nature of the beast and it’s exactly what a free market would predict would happen. To a very major extent, banks can’t be blamed for fulfilling the role expected of them. They can’t help it – the natural trend of capitalism is towards supply, in the sure knowledge that a market correction will take place where over-supply takes place. It’s not the fault of politicians, who have other concerns, nor of regulators – it’s not their role, either. And neither is is the role of market-based organisations to be concerned with the impact of the activities.

What is to be done about it, is the key question. Regulation exists to fetter monopoly organisational powers created in this post-modern privatised world in the interests of liberalisation and removing the role of the state. It exists to protect consumers against the abuse of power by organisations that, in other times, would be a state monopoly. It’s not actually there to protect consumers against the red-blooded teeth and claws of capitalism in full flight – but it is clearly a very easy target when things go wrong. A failure of regulation is monopoly profits – not people (or organisations) suffering as a result of capitalism doing its thing. It’s not the job of regulation to stop private sector banks from lending so much money, and in the wrong areas of the economy – not in this system, anyway.

If we want a different future, one based on a more dirigiste approach, in which individual banks offering micro-solutions can be controlled in favour of macro- level interests, and forms of lending both directed appropriately and not over-concentrated beyond a country’s economic capability, it’s not regulation we want – and, I would suggest, neither is it a capitalist free market.