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The Politics of Dystopia Redux

Submitted by Erico Matias Taveras via Sinclair & Co.,

Dystopia: a community or society that is undesirable or frightening.

Nouriel Roubini recently penned an article titled “Europe’s Politics of Dystopia”, citing the rise of nationalistic movements across Europe as a harbinger of terrible things to come. It seems that the renowned Dr. Doom - one of the few economists to have anticipated the 2008 financial crisis - is back in the limelight with some more dire warnings.

Ah, but this time he’s late. In case you have been hibernating, the European Union (EU) is already in a complete state of disarray. Everywhere you look - economy, politics, security, society, demographics - there are very serious problems with no credible solution in sight.

This does not bode well for the future of the EU, starting with those who will be living in it.

Out of the top-10 OECD countries with the highest youth unemployment rate, 8 are EU member states, each with high double digit figures. Politicians might still blame the Eurozone financial crisis for this dire situation, but this is nothing new: the economic growth rates of member states have been very poor for over a decade now. The fact is that the EU has consistently failed to promote policies that can provide decent employment opportunities to its youngest citizens.

That first step in the job ladder is hugely important for the future prospects of any generation. This one is particularly important since their contribution is badly needed to pay for their elders’ welfare, as well as all the fiscal largesse to “stimulate the economy” facilitated by the ECB’s monetization of unprecedented levels of debt. Some of that stimulus found its way into the housing market. Good for the economy you say, but terrible if you need to find cheap housing to start a life.

One consequence for this generation is easy to predict: no job + expensive housing = put off starting a family.

Europe’s demographics is a complicated issue, but the current situation is alarming. Less babies means less people to pay for Europe’s generous welfare and retirement systems. Instead of addressing these problems head on, EU politicians prefer to let them fester. Populism trumps everything. After being elected President of France, François Hollande even lowered the retirement age!

Europeans are so desperate for new blood that they will take in virtually anybody, showering them with social benefits while demanding little integration into their societies in return. The result is growing pockets of alienated minorities, portraying a disintegrating social fabric especially in the richest member states. Sweden is an interesting case study in this regard. For decades it has been the most welcoming country in the world for refugees, but the failure to properly integrate them is evident in rampant crime and declining social performance statistics.

Sweden also showcases the current vigor of the EU’s diplomatic relations - or lack thereof. Earlier this year, Swedish foreign minister Margot Wallstrom dared to criticize Saudi Arabia for its appalling human rights record. A sensible and courageous position you might say, but one which got her into hot water with her own peers back home, no doubt reflecting pressure from the Saudis. Even the Swedish king, largely just a political figurehead, chastised her for such conduct. It turns out that one bright spot of European industry is the burgeoning arms sales to such repressive regimes (perhaps because there’s no need to fake emissions?). That they might actually end up in the hands of extremists is of no concern.

And now the EU is facing yet another gigantic crisis, unable to stop the flow of millions of migrants pouring in. There had been plenty of forewarning that something big was brewing, even by Europe’s laxist immigration standards. But once again EU leaders were caught totally on the back foot. The response was completely disjointed as a result, creating even more discord among member states.

Witnessing this situation, Chancellor Angela Merkel publicly announced a few months ago that Germany would take them all in. Whether this was to polish her image after the economic disaster that her government imposed on the Greeks, reverse the ageing demographics at home or just atonement for her country's past, we can't say. What we do know is that estimates of the number of migrants into Germany this year alone quickly snowballed from 400,000 to 800,000 to 1.5 million. The latest report suggests that 14 million could settle between now and 2020, in which case German society will be irreversibly impacted, perhaps even sooner than that.

According to official statistics, only 1 in 5 migrants arriving in Germany in 2015 are actually from Syria. So contrary to popular belief the majority of migrants are not refugees; rather, they are young men seeking a better life. And why wouldn't they come, when Merkel is doling out her fellow taxpayers' money? Whether they will find a job is a different matter, as the foreign worker unemployment rate is already much higher than that of the natives.

The cost for Germany to deal with all of this is enormous, with estimates suggesting that over the next twenty years it could easily rival the also enormous reunification cost with East Germany. And it’s the childless Germans who will foot the bill.

Facing criticism and divisive tensions seldom seen at home, Merkel had to act. First she tried to ‎spread these migrants all over Europe, claiming that this was the “fair thing” to do. Several countries refused. Then she went to Turkey to negotiate a deal to stop the influx at the source. Sensing weakness and in no mood to deal with Europe's migration problems, President Erdogan promptly demanded a hefty sum of cash to think about it and a fast track to join the EU (even the new Islamist government in Libya is now threatening to flood Europe with migrants, so this crisis has become a great way to hold the EU hostage – thanks to the EU itself).

The latest plan is to provide welfare benefits only to Syrian refugees, speed up processing times and tighten some border controls here and there. What to do with the hundreds of thousands of other migrants with “weak cases” was not disclosed. We speculate that they will not return home after all they went through, and as such might be condemned to a life in limbo. This pussy footing will also not stop the millions of others already on their way.

The security risks are staggering. Rather than protecting its borders, allowing Germany to eventually regain control of the situation and provide adequate care to those who are already there, Merkel prefers to risk the social fabric and the safety of her fellow citizens. Think about what a million plus of unemployed and alienated young men can do roaming around the country.

And why can’t she do it? Because she fears those same “politics of dystopia” proposed by Roubini. Each member state reinstating its borders is an intolerable step back in her quest to abolish their national identities. In her mind the solution to every EU problem is more EU, and for sure much less

, France, UK and whomever else.

Perhaps this could make sense if member state nationalism was replaced by a powerful new sense of European identity. But who wants to embrace the basket case that the EU has become? With some of the least charismatic world leaders to boot? Even its own currency is flawed, promoting deep structural imbalances among member states. [even its own currency is flawed!!!]

Worse, getting rid of nationalism makes the EU vulnerable to being taken over by other ideologies. Perhaps the most menacing to Europe right now is the rise of political Islam. Any Islamo-phobe will tell you that the demographics are on their side, especially once all these new migrants settle in. ‎It would be ironic that the most liberal continent on the planet might end up adopting the least liberal religion in the coming decades.

With all of this unfolding, it is natural for the EU’s allies and trading partners to be apprehensive about the prospects of it staying together. The US has even warned the UK of dire commercial consequences if it votes itself out in the forthcoming referendum. Well, forcing someone to stay against their democratic will is not a great solution either. Not that the voice of the people across member states matters in Brussels anyway.

Now, we don’t highlight all of this because we like to see Europe in the dumpster. Quite the opposite. It pains us to see what is going on and the lack of leadership to confront what are truly existential threats. The world needs a strong Europe. And for that to happen, the current political, social and economic guidelines need to change.

Roubini does have a point. There are politics of dystopia at work in Europe. But he puts the blame squarely on the wrong side.

The EU doesn't need any nationalists to destroy its future prospects. It’s doing absolutely fine on its own.