Age Islam Edit Bureau
04 May 2017
Letting Women Drive
By Khaled Al-Suleiman
Is Breaking The Truth
By Yossi Mekelberg
and China Joining Hands for New Journey on Silk Road
By Ni Jian
France Really Rejected Populism?
By Mark Roe
Hate And The Arab-American Relationship
By Dr. Amal Mudallali
Upbeat On Mideast, But Crucial Issues Loom On Horizon
By Frank Kane
Economic Gains In Peril If Le Pen Wins
By Dr Sanjay Modak
By New Age Islam Edit Bureau
May 4, 2017
IT seems that allowing women to drive is a
matter of time only. It may happen faster than we expect.
The question arises as to what are the
preparations for this move which we should take other than issuing driving
licenses to women and the anticipated overcrowding in the car showrooms in
various parts of the Kingdom?
Firstly: The number of expatriate drivers
must be reduced. Driving licenses must be granted to certain expatriates who
are vocational and good drivers. This is done in a number of countries. This
also requires expediting the completion of the public transport system in all
towns and cities.
Secondly: Loopholes in the traffic safety
measures have to be corrected.
Marking the detours with blocks is only
confusing the traffic flow and is a real threat to motorists and their
Thirdly: The traffic department should
qualify its policemen who represent a weak point in its endeavours to promote
Sometimes you feel that a number of traffic
policemen were detached from their duties and are far away from the roles they
are expected to undertake.
On many occasions they impede traffic
instead of facilitating it. You will find them standing at the road entrances
to obstruct traffic instead of easing it.
I think it is time to prevent the traffic
policemen from using their cell phones while on duty so as not to be distracted
from their task.
The decision to allow women to drive is
expected to raise a lot of
controversy in our society. This
controversy will not, however, change anything.
The decision to allow women to drive will
be final and will not be rescinded once made.
The need of the Saudi women to drive their
own cars is both a personal option and a dire need for many of them and their
Those who object to women driving should
abandon their cars for a week and they definitely feel the pain and predicament
of women for not be allowed to drive their own cars.
Is Breaking the Truth
4 May 2017
There is an obsessiveness in Israeli Prime
Minister Benjamin Netanyahu’s and his political associates’ relentless campaign
against human rights organizations in Israel. In their preoccupation with these
organizations they are ready to compromise the country’s democratic values and
its standing in the world. This week his campaign against the human rights
organizations, Breaking the Silence and B’Tselem, reached new absurd levels. In
an act of hollow defiance he cancelled a meeting with the visiting German Foreign
Minister Sigmar Gabriel, who despite Israeli pressure, met with representatives
of these organizations. When Netanyahu tried to climb down from his high horse
and called Gabriel he found his call unanswered. Moreover, German Chancellor
Angela Merkel gave full and public backing to her foreign minister, putting
Netanyahu in his place and enhancing the international reputation of B’Tselem
and Breaking the Silence.
The Israeli government is not unique in
disliking criticism, especially from human rights organizations, but in recent
years it pursues a witch-hunt against them, which ranges from harassing them
through legislation to inciting against them. They are portrayed as traitors
that cause damage to Israel’s reputation in the world to an extent that would
bring calamity on the country. A member of Knesset from the ruling the Likud
party called Breaking the Silence activity a “poison” that had to be brought to
an end. They are frequently accused of spreading lies, though there is no shred
of evidence to these allegations.
Instead of smearing the names of these
dedicated human rights activists and irresponsibly inciting against them, the
state should thank them and work with them to eliminate abuses of human rights
and war crimes by Israeli soldiers against Palestinians in the occupied
Palestinian territories. After all these are what the Israeli law, government
officials and senior security force commanders claim to want.
To be absolutely clear, no Israeli human
rights organization accuses all IDF soldiers of being war criminals, for the
very simple reason that this would be categorically false. However, in 50 years
of occupation there have been many incidents in which soldiers killed, injured,
and beat Palestinians, damaged their property or used them as human shields.
Since the second intifada started in September 2000, B’Tselem has demanded an
investigation into 739 such cases. The lack of responsiveness of the law
enforcement system is staggering. The vast majority of cases were either not
investigated, or no further action was taken. Only 25 charges were brought
against soldiers who allegedly committed war crimes.
Since the State of Israel, celebrating its
69th independence anniversary this week, was established it prides itself on
being a vibrant democracy with the most moral and ethical military in the
world. Some would take Israel to task, especially with the latter assertion.
Nevertheless, if it genuinely believes in a moral army it should eradicate even
the slightest sign of human rights abuse within its ranks instead of closing
ranks around members of the security forces, who break not only international
law but also the Israeli law. Shouldn’t citizens that help to bring to justice
those who break the law be praised instead of condemned? Unless, heaven forbid,
there is a chasm between what the Israeli government says about the importance
of adhering to moral values and laws of war and what it really believes, it has
no reason to chastise and delegitimize those who hold the country, its society
and its military to these standards.
The case of the Israeli soldier Elor Azaria
who shot a Palestinian in the head when he was immobilized on the ground last
year, and was captured on camera by B’Tselem activist, highlights the
importance of such organizations. It provided indisputable evidence that war
crimes did take place and led to Azaria’s indictment and conviction. It would
take someone very naive, in denial, or with something to hide to argue that
this was a completely isolated case.
Regrettably, it is not only the members of
the coalition government that slur the watchdogs of Israeli behavior in the
West Bank, but also some of the major opposition parties. It is a testimony to
their weakness and pandering to what they think will help them gain public opinion.
It is not Breaking the Silence and B’Tselem that diminish Israel among nations,
but the ruthlessness of the occupation and the efforts to sweep it under the
carpet by almost the entire Israeli political system.
Those who attack human rights organizations
are using them as their human shield against reality and accountability in
order to justify the perpetuation of the occupation and ineptitude in bringing
the conflict with the Palestinians to a peaceful, just and lasting conclusion.
By doing so Israeli leadership is doing a disservice to the country and risking
breaking the very fragile democracy when the silence has already been broken.
And China Joining Hands For New Journey On Silk Road
May 3, 2017
The two countries established diplomatic
ties has been a period of economic miracles
Since ancient times, the Silk Road has been
the route of trade, mutual learning and win-win cooperation between China and
Arab countries. Across the Silk Road, two ancient civilizations have together
strived for development. Today, both China and the UAE are set to re-embark on
this road to boost regional development China and the UAE have a long-standing
and well-established friendship. As early as the seventh century, seaborne
trade had already existed between the two countries. On November 1, 1984, the
leaders of the two countries made a historical decision to establish diplomatic
relations with each other. The two countries, which had been connected by the ancient
maritime Silk Road, are now joining hands for a new journey.
As an Arab proverb goes, "Choose the
suitable partner before you start a journey". China and the UAE are the
right partners for each other with a common aspiration for development. The
last 33 years since the two countries established diplomatic ties has been a
period of economic miracles.
In 2012, the UAE became the first Arab
country in the Gulf region to establish Strategic Partnership with China.
Bilateral relationship has greatly improved and enriched since then. In recent
years, political mutual trust has deepened, cooperation in various fields has
been fruitful, and friend-ship between our two peoples has increased day by
day. For many years, the UAE has been the second largest trading partner and
the largest export market for China in the West Asia and North Africa region.
In 2016, our bilateral trade volume reached $40.6 billion.
At present, the development strategy of the
two countries is coordinated, with the Belt and Road Initiative put forward by
Chinese President Xi Jin-ping which is in line with the 'Restore the Silk Road'
vision announced by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown
Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.
Many UAE friends tell me that jointly
implementing the Belt and Road Initiative could help in the development of the
UAE. The UAE is a founding member of Asian Infrastructure Investment Bank
(AIIB), which demonstrates its keenness to be part of the venture.
We are striving for the best in commodities
trade, energy and finance, while cooperation in new fields such as clean energy
and information technology is taking off. Chinese enterprises are actively
involved in the construction of airports, ports, roads and telecommunications
in the UAE. The UAE-China Joint Investment Fund worth $10 billion is well
managed and has been a highlight for the deepening of pragmatic cooperation
between the two countries. The central banks of the two countries have renewed
their local currency swap agreement and are working to establish the RMB
Clearing Center in the UAE. The four major national banks of China have all set
up branches here.
As an important transportation hub and
financial centre in the region, the UAE plays an active role in promoting
cooperation between China and the Middle East as well as the Gulf region.
"The fire burns high when everybody adds wood to it." The smooth
progress of the Belt and Road Initiative calls for wisdom and resolve. I
believe the cooperation within the framework of the Belt and Road Initiative
will not only have a profound impact on the China-UAE Strategic Partnership,
but also become the main theme of pragmatic cooperation between the two
China will host the High Level Dialogue of
Belt and Road Forum for Inter-national Cooperation in Beijing later this month.
The UAE will send key officials to attend this forum. In the context of jointly
fulfilling the Belt and Road Initiative, China-UAE relations will embrace a
golden period for development. I firmly believe that with the support of the
leaders from both countries, and with concerted efforts of people from all
walks of life, the China-UAE Strategic Partnership will open a new chapter in
history, and the people of the two countries will undoubtedly realise their
dream of common development.
3 May 2017
The liberal West heaved a collective sigh
of relief when the results of the first round of the French presidential
election came in. After leading in the polls for weeks, Marine Le Pen of the
far-right National Front ended up in second place, while Emmanuel Macron, a
centrist political independent, finished first. Macron, the fresh face of
Europe’s democratic center at just 39 years old, is expected to prevail handily
in the second-round runoff on May 7.
With Macron’s victory in France following
Dutch voters’ rejection of the right-wing populist Geert Wilders earlier this
year, most observers are treating the result as another rebuke to the populist
revolt that fuelled the UK’s Brexit referendum and US President Donald Trump’s
election in 2016. Many seem convinced that the populist tide has crested.
And yet, below the headlines, the picture
is not so bright — or anti-populist. The total number of votes that went to
anti-establishment candidates in the French election indicates that a latent
French populist coalition could still emerge. In fact, the overall first-round
vote for populists comprised almost a majority of the French electorate.
Le Pen led the populist pack with an
anti-immigrant, anti-European, economically nationalist platform and a message
of coded racism. She did not fully shake the National Front’s anti-Semitic
past, and in 2017, her party’s bigotry took more of an anti-Muslim form. She
remains ready to pull France out of the euro zone and the EU itself, and —
unlike the UK’s Brexiteers — adopt protectionist trade measures.
Add Le Pen’s 21.3 percent of the vote to
the 19.6 percent captured by the far-left, anti-establishment candidate
Jean-Luc Melenchon, and you get a very sizable bloc of disgruntled French
voters. Melenchon has an appealing personality, a capacity for rousing
rhetoric, and a knack for clever campaigning, such as using holograms of
himself to address campaign rallies across France simultaneously. He far
surpassed the mainstream Socialist Party candidate, Benoit Hamon. Before the election,
when polling showed Melenchon and the other leaders within the polling margin
of error, many feared that the second round could be a runoff between him and
Melenchon does not share Le Pen’s
anti-immigrant animosity or authoritarian tendencies. But he has been an
anti-globalist tribune for many alienated workers and young people who fear for
their economic future. Both he and Le Pen represent angry voters who are ready
to overturn the established order. His supporters are not unlike the blue-collar
Americans who voted for Bernie Sanders in the Democratic primary, and then for
Trump in the general election. Melenchon has so far refused to endorse Macron
for the second round.
If you now add to Le Pen and Melenchon’s
combined 40.9 percent of the vote the totals for minor far-right and
anti-capitalist parties, including the Communist Party, the percentage of
anti-system voters reaches the upper 40s. The headlines declaring victory for
pro-European liberal democracy fail to highlight how narrow that victory
actually was. The truth is that France has a highly populist electorate: close
to half of French citizens cast a vote on April 23 to disrupt the status quo.
Once again, how votes translate into
electoral decisions looms large. In last year’s US presidential election,
Hillary Clinton won the popular-vote count by several million votes, but needed
another 100,000 votes across Wisconsin, Pennsylvania and Michigan to win the
Electoral College. In France this year, the total share of anti-establishment
voters is similar to Trump’s own share of the popular vote in the US, but
because of the configuration of the candidates and differences in election
rules, the populist, anti-trade candidates will lose in France.
This is not just a modern quirk: In the US
presidential election of 1860 — the most consequential in American history —
Abraham Lincoln received 39.9 percent of the vote, with the other votes going
to parties that were not anti-slavery. But the rules of the election made him
the clear winner; indeed, he would have won, even if the other parties’ votes
had been aggregated behind a single candidate. Nobel Prizes have gone to
academics who have shown how an electorate’s preferences can lead to sharply
differing outcomes, depending on how votes are aggregated into decision rules.
In France, a slight first-round shift of
just a few percentage points away from Macron and toward Melenchon would have
resulted in a fully anti-establishment runoff for the French presidency.
Moreover, if a single candidate had corralled economic-nationalist and
anti-immigrant voters, as Trump did with working- and lower-middle-class voters
in the US, that candidate would have won the first round — and would have been
in a strong position to claim the presidency in the second round.
Even though the French electorate rejected
anti-immigrant, anti-trade, anti-finance and anti-globalist policies this time
around, the fact remains that, beneath the surface of France’s election result
is a potential populist coalition. It is too early for those celebrating the
triumph of liberal democracy to declare victory.
Hate And The Arab-American Relationship
Dr. Amal Mudallali
Upon reviewing the results of the Arab
News/YouGov poll “The Arab Image in the US” in which 2,057 US citizens were
surveyed, I recalled something that happened to me when I was a student taking
a public transportation bus to my university in Washington.
A young man got on the bus and sat next to
me. He quickly started a conversation by asking me where I was from. I paused
before I answered, wondering if he would know the small country from which I am
from. I decided instead to make it easier for him and told him I was an Arab.
His response? “I hate Arabs!” I was
offended and horrified and shot back by asking: “Why? Have they hurt you in any
way?” He answered: “No. But you never know.”
It was an example of pre-emptive hate, I
thought, and this story stayed with me. I remember it every time the American
attitude toward the Arab world is discussed.
After reading about the findings of the
Arab News/YouGov poll, which found “massive gaps in the US public knowledge
about the region,” I wondered whether that bus rider even knew where the Arab
region was. The poll found that 65 percent of the Americans said they do not
know much about the Arab world and 81 percent could not identify it on a map.
Media coverage of the region was found to
be lacking. Half of the Americans who were polled wanted more news about the
Arab world than they are getting. The American public wants more coverage on
Arab societal issues and more arts, science and culture coverage. A lack of
knowledge regarding the region is at the core of the problem as 35 percent said
they do not know much about the Arab world and are keen to find out more.
However, 30 percent do not know much and said they are not interested in
finding out more.
Interestingly, 52 percent of the
respondents consider the media to be effective in depicting the true image of
What is unbelievable is that after more
than six decades of American involvement in the region politically, and over a
decade of military involvement, most Americans could not identify the Arab
world on a map. However, they were able to identify specific countries as being
part of the Arab world.
The most astonishing finding, in my view,
was that 21 percent of the Americans polled identified the “Sultanate of
Agrabah” as part of the Arab world even though it is a fictional place from the
movie “Aladdin.” A previous poll conducted by Public Policy Polling during the
American election campaign in 2016 found that 30 percent of Republican voters
supported bombing Agrabah, but thankfully 57 percent said they were not sure!
American attitudes toward Arabs have been
negative for a long time, even before the 9/11 attacks, according to polling
data from the past decade.
To be fair to Americans, Arab attitudes
toward the US are not much better. A poll by the Pew Research Center conducted
between 2002-2003, for example, found that the US was less popular in the
Middle East than in any other part of the world.
Why do the Arabs and the Americans seem as
though they are ships passing in the night? It is a historic and very complex
relationship that does not lend itself to the over-simplified question that was
asked during the Bush era: “Why do they hate us?” The reason is a combination
of politics, culture and economics as well as an ingrained habit and a lack of
knowledge about each other.
Jim Zogby, one of the best authorities on
America and the Arabs, told me: “America’s understanding of the Arab world is
derivative. The Arabs have not projected an image of their own so the Americans
get it from the media, politics and from popular culture.”
He also talked about the role of education,
saying that in American schools there are more students who study ancient Greek
than Arabic. He added that there is little knowledge of Islamic civilization
and no appreciation of Arab science or literature. What they know comes from
the media and political culture and that is skewed around Israel, he said.
David Pollock of the Washington Institute
for Near East Policy (WINEP) — another polling expert who has studied attitudes
in the region and US-Arab relations for a long time — agrees that it is a
negative and grim picture and believes it is due to a combination of factors.
For some people in the US “it is a general sense of isolationism” and “a trend
where people are like this with all foreign countries and not only the Arabs,”
he said. Others are “prejudiced” but most importantly, “there is a kind of
tendency to associate the whole region with terrorism, refugees and civil war.
The region does not have a positive image and a lot of it is based on ignorance
and narrow- mindedness.”
However, he also believes that it works
both ways. He has studied Arab views of the US and found similar trends but in
both cases attitudes fluctuate, he said. He also found a major difference
between the views of the elites and the street.
Zogby put his finger on the problem, saying
the media plays an important role in forming attitudes and these media organizations
“found their experts and they are people who have hostile attitudes toward the
Arabs. They have in-house commentators from previous administrations who have
an axe to grind and they … view the Arab world within the prism of Israel.”
But the Arab world also has a role in the
persistence of the negative image that the region and its people suffer in the
“The Arabs did nothing,” Zogby said. They
“think the president comes and gives a speech and that is enough. They have
done nothing to craft their image.”
If “you do nothing to define yourself,
others do it for you,” he added.
Pollock agrees that the Arabs “are not
working on it lately. It is more lobbying, public relations and media efforts
of different countries.”
The problem with this approach is that it
is too concentrated on individual countries and their bilateral relationships
with the US government rather than the general public and grassroots sentiment.
According to Pollock, working to change the
general public’s attitude is an “uphill battle and it takes big effort but it
is worth doing.”
Upbeat on Mideast, But Crucial Issues Loom on Horizon
There was not much discussion of the latter
two countries at the event hosted on Tuesday at the Dubai International
Financial Center (DIFC) by Jihad Azour, the new IMF director for the region.
Not that they do not deserve attention, but the big focus was on the Gulf
oil-producers, mainly Saudi Arabia and the UAE, and on Egypt, as the main
economic engines for the entire region.
Overall, the outlook is better, as Azour
said at the outset. The global context in which the region does business is
improving, with a “steady improvement” in world gross domestic product (GDP)
growth from 3.1 percent in 2016 to 3.5 percent this year and 3.6 percent next.
Steady, but slow.
The emerging markets, in general, are
laggards, but China, the increasing focus of MENAP trade, as well as the US and
Europe have been all been marked up. Risks to the global outlook come mainly
from the US, with higher interest rates and increasing protectionism on the
The crucial factor, as ever and for the
foreseeable future, is the oil price. The IMF has been quite cautious here,
basing its assumptions on an average $55 per barrel this year and next. The
fund is probably right to be conservative, with much uncertainty on
international energy markets adding to the cuts in production from some oil
producers adding to the volatility.
But even at this level, with the measures
taken by many Middle East economies to control budget positions, fiscal and
trade positions are expected to strengthen, the IMF said.
The big thing here is that the non-oil
sectors of the crude producers are beginning — slowly — to show the first
fruits of diversification programs. Non-oil growth in the Gulf Cooperation
Council (GCC) countries is expected to be at 3 percent this year, helping to
compensate to some degree for production cuts.
That is the good news, but it comes with a
warning: What the IMF calls “fiscal adjustment” (what many would call
“austerity”) needs to continue. Fiscal deficits of 10 percent of GDP are still
too high, even though they improved in 2016, but if the current programs are
continued it will be possible to hit the IMF target of 1 percent by 2022.
In many cases, that is quite a big “if.”
The scrapping of more subsidies, the introduction of a value-added tax (VAT)
and wholesale privatization programs are policies fraught with difficulties.
But, the IMF implies, there is no alternative.
So in this context, what the IMF had to say
about Saudi Arabia’s recent decision to resume benefit payments to government
employees is revealing.
“From time to time, you can allow some
fine-tuning in a program this big,” Azour said. In effect, he was siding with
those who have declined to call the benefits decision a U-turn and backed the
Kingdom to stick to its commitments in this regard.
Azour welcomed the privatization program
currently being planned, which he said was a vital component of the economic
diversification strategy. The subsequent comments of Mohammed Al-Jadaan, the
Saudi finance minister that he would stick to reforms in the coming months must
have been music to the IMF’s ears.
There is currently an IMF team in the
Kingdom doing a detailed study of the statistics and it looks likely that their
report, when it is forthcoming, could result in an upward revision of GDP
forecasts for this year and the next, set at a miserly 0.4 percent and 1.3
percent not so long ago.
Moving to the second-biggest GCC economy,
the UAE, Azour was again complimentary of the efforts toward non-oil
diversification. Again, the recent downgrade in GDP forecast, to 1.5 percent
this year, was miserly, and could also be the subject of an upward revision
once the IMF team in the UAE completes its mission, again depending on oil
price and production levels.
Whatever the overall level of GDP, it looks
certain that Dubai will outstrip it. The emirate is on a fast track to Expo
2020, and that deadline implies a higher growth rate than the rest of the UAE,
with the IMF pencilling in 4 percent.
Dubai debt watchers will be keenly awaiting
the IMF’s latest estimate of the emirate’s financial obligations, expected
later this month. There are several big maturities due over the next couple of
years that have to be met. Debt is still a bigger factor for Dubai than even
the oil price.
Egypt is probably the IMF’s biggest concern
at the moment in the region. The fund visited Cairo to assess the economic
situation before approving a disbursement of the $12 billion loan program
agreed last year. It will want to see firm evidence of further structural
reform and a commitment to bring down inflation, currently at a 30-year high of
30 percent annually, before it pays out.
It was a good start from the IMF’s new man
in the Middle East. But there will be much to ruminate over in the detail that
will come out in the next few weeks.
Economic Gains in Peril If Le Pen Wins
Dr Sanjay Modak
Will French voters leave sense and
sensibility at home when they enter polling booths?
Amidst all the tumult surrounding recent
events like the election of Donald Trump, Britain's decision to leave the
European Union, the Turkish referendum and North Korea's belligerence, the
Eurozone - the group of European countries that use the Euro as their currency
- has been undergoing a quiet but significant economic recovery. At a time when
good news is at a premium, this bit of cheer has gone largely unnoticed.
Though the Eurozone crisis is well known by
now, it may be useful to look back quickly to 2007-08 when the financial crisis
triggered by the collapse of Lehmann Brothers and the US sub-prime mortgage disaster
morphed into the deepest and longest lasting recession since the Great
Even as the crisis hit, several Eurozone
countries were already heading for trouble but could not (or did not) see the
writing on the wall. Spain was going through an enormous property bubble
fuelled by relaxed lending criteria, an excess of liquidity, overbuilding and
speculation. Portugal was much the same though at a lower level. Greece was
staring at a looming debt bubble caused by government profligacy and budget
deficits. France and Italy were suffering from low growth and economic malaise.
And all these countries, and others, have historically had high structural
unemployment rates. Only the largest Eurozone economy - Germany - had the
proper fundamentals in place to weather the coming storm.
Thus, conditions could not have been worse
for much of the Eurozone when the world at large plunged into what is now
called the Great Recession. Between 2008 and 2013, unemployment rates
quadrupled in Greece, and more than doubled in Spain and Portugal. Youth
un-employment in these countries and Italy was always high and reached levels
of 40 to 50 per cent during this period. Interestingly, in Spain and other
southern European countries, close family structures, where families come
together to support those out of jobs, coupled with a thriving informal
economy, helped ameliorate the situation and prevented it from assuming serious
John Maynard Keynes (1883-1946) was
arguably the most influential economist of the last 80 years, if not of all
time. Writing in the midst of the Great Depression in 1936, Keynes advocated
government spending as a means of stimulating economies out of deep
re-cessions, when private investment and consumption spending are too feeble
due to uncertainty and poor expectations to raise aggregate demand in an
economy. Following his death, a lively intellectual debate ensued between
Keynesians and opponents, which somehow missed the vital point that Keynes only
ever advocated government intervention when the private sector could not or
would not rise to the occasion in times of recession. In any case, when the
full impact of the Great Recession sunk in, and countries were staring at an
abyss, the United States, Japan and the Eurozone, among others, all resorted to
Keynesian stimuli mechanisms even as they invented a new vulgarism for it -
Quantitative Easing (QE). The Master had returned.
The European Central Bank (ECB) and the
European Commission (EC) swung into action with stimulus packages for the worst
hit countries, but these came with strict conditionality requiring extreme
government budget tightening and other unpopular measures. Spain and Portugal
took the bitter pill advisedly but in Greece, citizens took to the streets
pro-testing the cuts that would take away privileges that had become part of
their lives. The ECB straightened out badly hit banks across the Eurozone by
injecting capital and restoring their balance sheets. Credit approval processes
and lending norms were tightened. Annual stimulus injections into the Eurozone
economies of about 800 billion a year began to work, albeit slowly at first,
through the multiplier process.
The superstar of the Eurozone economic
recovery is one of the countries that was hit the hardest by the recession and
was all but written off only a few years ago. Spain grew by over 3 per cent in
real GDP terms in 2016 and that without a real government in power for most of
the year (maybe there is a lesson in this). Other countries are fashioning
their own recoveries, and despite lingering high youth unemployment and
continuing concerns over Italian banks and Greece in general, the Eurozone as a
whole grew by 0.5 percent in the fourth quarter of 2016, higher than the US,
and registered 14 consecutive quarters of positive real growth. More
importantly, economic sentiment is finally in positive territory, as is
manufacturing, after being in the doldrums for so long.
The key player in this unfolding drama is
Germany. Assuming a low profile but pulling the funding strings in a big way,
it was Germany (and its chancellor, Angela Merkel) that held the Eurozone
together during the worst moments of the crisis. Greece, which was threatening
to go under and sink, could easily have slipped out of the zone or have been
shown the door and that could well have triggered an unraveling of the EU and
the euro. But Germany stood firmly behind the principles of the union and was
helped by the fact that it had avoided the recession itself and could thereby
summon the economic and financial muscle and resolve to hold the group
together. Despite their many differences, the countries of the Eurozone
re-posed faith in their common currency, and in each other, and this teamwork
helped them overcome the worst of the bleak times that they went through.
But this is now under threat from another
quarter. The French presidential election in less than a week could throw up a
surprise winner in Marine Le Pen, who champions divisiveness, exclusion and
prejudice - ugly attributes, all of which go against the grain of the European
Union and the single currency. In such a situation, far removed from the
teamwork that rescued the Eurozone from the recessionary crisis, the EU could
once again be looking at a possible 'Frex-it' and a general unraveling of
everything it stands for. France is the second largest economy in the Eurozone,
and together with Germany one of the chief architects of the single currency
concept. All the good work of the past few years could go to naught if French
voters this week, like some voters in other countries before, leave sense and
sensibility at home when they enter the polling booths.