After the Elections

Egypt, Greece and France Leap into the Unknown 

Over the past two weeks we have witnessed three crucial elections that will influence the course of events in the Mid-East and the outcome of the “Euro-Crisis”. In Egypt, the “Islamist” candidate won the Presidency, but only after the military essentially usurped all powers of the President and Parliament. In Greece, a “Greek exit” from the EuroZone was temporarily staved off, as backers—albeit tepid—of the harsh bailout terms won a narrow victory. And in what might be the most crucial of the three elections, French voters gave newly-elected President Francois Hollande and his Socialist Party an absolute majority in the Parliament. But perhaps this just lays the ground for an inevitable Paris-Berlin clash over “austerity”.

Egypt: Are the Military and the Brotherhood Moving Toward A Showdown?

Egyptian voters went to the polls in the country’s first free presidential election and selected Islamist Mohammed Morsi. Morsi has been a dedicated member of the Muslim Brotherhood for 35 years, but is also a US trained (USC) engineer.

There are two major question marks hanging over Morsi’s election: first, will Morsi continue the Brotherhood’s tradition of enunciating a hard-line ideology while following a pragmatic course in practice? Secondly, will the ruling military clique permit the president and the parliament to act in accordance with the wishes of the populace or will it institute further actions to strengthen what is becoming a military dictatorship?

The Egyptian revolution that began in Tahir Square has now completed a very discordant first phase. Left on the sidelines of the political drama are the leftists and secular youth groups who began the uprising against Hosni Mubarak. They can only watch as a struggle emerges between the Islamist parties controlling the parliament and the ruling military council.

The Supreme Command of the Armed Forces (SCAF) recently stripped the presidency of most of its powers, while the puppet judiciary essentially dissolved the parliament. The SCAF has declared itself to be the country’s only legislative authority, has excepted itself from any form of civilian oversight and will oversee the efforts to write a new constitution. This would seem to herald an eventual confrontation between the president and the generals, between the Brotherhood and the Military.

Is Morsi a pragmatist at heart, or a true believer? His actions do not give one much hope for the former. Morsi has been an avid supporter of the most doctrinaire beliefs of the Brotherhood, calling for religious law, segregation of the sexes, and a strict anti-Zionist policy.  He seems to share the Brotherhood’s goal of a global Muslim caliphate with the Quran as the sole source of law (Sharia).

President Morsi has pledged not to disrupt existing international obligations, which first and foremost means the longstanding peace treaty with Israel. At the same time he said that he would never meet with any Israeli official himself (although, in the pragmatic tradition of the Brotherhood, he would allow lower level officials to have such contact). But Morsi will be under considerable pressure from other Islamic elements which are much more hard-line on domestic human rights and regional issues, especially the Salafist Nour Party.

Maintaining domestic tranquility, especially within his Muslim political allies, will not be easy, nor will engaging with the powerful military to reach a consensus on political power and policies. But Morsi is hardly Nelson Mandela and the military is unlikely to soon relax the imposition of martial law. Expecting the Muslim Brotherhood and its allies to embrace religious and political pluralism, and likewise expecting the military to step down from the dominant role it has enjoyed for more than 60 years, stretches the bounds of credulity.

The United States can do little in the short term to influence the course of events. Washington can withhold its generous foreign aid and military assistance it provides but it’s not certain who, if any side, that would assist.

Anyone have any bright ideas?

The Greeks back Away from a Euro Exit and Europe breathes a temporary sigh

The result of the elections in Greece temporarily eased fears that the country’s departure from the Euro Zone was imminent. The victory by Antonis Samaris and his center-right New Democracy Party provided a temporary respite. Germany was encouraged by the outcome, viewing it as an endorsement of the acceptance of further austerity moves in Southern Europe. Berlin believes this not only staved off a Greek default but lessened pressure to adopt a more concerted pro-growth set of policies.

The narrow victory for the pro-bailout forces in Greece restored what the New York Times called “an unhappy status quo, a situation dominated by bickering and uncertainty, one that was slowly bleeding the global economy of forward momentum.”  Many feel that the Greeks have been on a spending spree, treating Germany as an ATM machine. They have been living far above their means for years and seem to expect the north European countries to bail them out. Greeks are worried that won’t happen and that the country is heading for an economic collapse. Many Greeks are not paying their bills, withdrawals from banks are running at about 1 billion Euros a day, and we are seeing the rise of radical parties on the Left and on the Right. Shades of Weimar Germany?

However, the temporary victory hasn’t reduced the longer term issues of “keeping Greece on life support, rescuing Spanish banks, and preventing the crisis from infecting Italy.” In the future, particularly following the elections in France, we can expect Germany to be further isolated as support builds for softening the terms imposed on the Greeks. German Chancellor Angela Merkel is holding the line, believing that relinquishing on Greece will be followed by demands from Portugal, Spain, and Italy. The crisis has not been averted, only delayed.

France: Socialists Take Complete Control—Is a Showdown with Germany Inevitable?

It may be that the elections in France were even more significant. François Hollande and his Socialist Party will have an absolute majority in the parliament, freeing them from reliance on both the anti-austerity and “Euro skeptics” alike. Hollande earlier took the presidency from Nicolas Sarkozy due largely to unhappiness over the conservative government’s adherence to German financial dictates. In the parliamentary elections that followed, the Socialists took complete control of the legislature.

Hollande and his Socialists campaigned on a platform advocating a shift away from austerity measures in favor of growth-stimulating policies. At this weekend’s EU summit, Hollande is leading the charge for the creation of Eurobonds—a means of “mutualizing” the EU-wide debt. Germany is likely to resist, emphasizing that France—like the southern tier countries—must bring its own financial house in order through tough anti-deficit policies. The country has one of the highest levels of state spending in Europe and a deficit that runs about 4.3% of GDP annually, which Merkel thinks should be closer to 3%.

Hollande has the unenviable task of persuading “Europe’s pay master Germany” to support his call for a growth stimulus package while at the same time instituting measures to cut the deficit and produce a balanced budget at home. Campaigning against Sarkozy was easy; now the hard choices begin.

Amid rising tensions between Paris and Berlin, Merkel rejected Hollande’s call for joint efforts to resolve the crisis. She bluntly warned that France must immediately institute structural reforms and increase its competitiveness. Can that Paris-Berlin showdown be far off?

–Tyrus W. Cobb, June 29, 2012

This brief essay is replete with talk of “showdowns”, which will be the topic of two upcoming NSF meetings. On July 17 Bob Barone and Jerry O’Driscoll will discuss the EuroCrisis and its Impact on the United States, and in September Dick Hobbs and John Jandali will debate “Whither the Muslim Brotherhood”.