"Europe, Europe"

The essay “Europe, Europe: Forays into a Continent” by the German writer Hans Magnus Enzensberger, written just before the “fall of the wall” (published  in 1989), contains the results of his observations about 10 European countries. The book testifies the culture variety of European countries and people and warn against the idea to make Europe into one State and preach for a larger confederation able to embrace all these varieties. The timing was the right one because after the “fall of the wall” the possibility for the two sides of Europe, East and West, to get free of the straitjacket imposed on them by the logic of the “cold war” and re-establish people sovereignty on their lives, on the political and economic systems was at arm-length.

But as it is well-known events took another course. The old power groups in the East disappeared but in the West they continued their course with strengthened power. The paradigmatic destruction of the agriculture systems and rural societies and environment in southern European countries during the previous decades was followed up by the economic marginalisation and the political destabilization of these areas with the diffusion of economic criminality and political corruption expanded to include Eastern Germany and Eastern Poland as new European Mezzogiornos. The process of cultural homologation and institutional standardisation of European countries continued with the Maastrich Treaty and the Lisbon Treaty and up to 2000s. The cold-war’s paranoia was replaced by the competition’s paranoia that still is the altar on which peoples, cultures and territories are sacrificed.

The current decade has flattered EU policy under the power of the financial centres and their Euro system administered by the European Central Bank. EU is resembling more and more to the USA’s system where financial and military groups are able to take over the governance of the whole system. The financial turbulence planned and provoked by these groups, an organized predatory act aimed at the expropriation of people savings, has been a demonstration of arrogance that the events have fully confirmed and legitimized. Their hold on power and their control of the European states institutions, financial and political as well, has been fully confirmed. Only few months ago the impression that something would be done by the European institutions to introduce more control and transparency on the financial centres and institutions were widespread. But things got soon clearer. The responsible of the “crisis” became chairman and members of the committees that should control and reforms the system. And when the European Commission spoke out a few weeks ago was not to establish control and sanctions on the financial centres and the so-called control institutions of the European and national central banks, but to put stronger constrains to the economic policies of the member state in order to hinder their efforts to reduce the damages produced by the economic and social crisis caused by the financial speculations.

In his essay about The Future of the American Economy James K. Galbraith writes: “We might have learned from all this that the line between bankers and crooks can be quite thin. It is imperative to police the neighbourhood. Following the savings and loan crisis over a thousand industry insiders faced federal prosecution, were convicted , and went to prison (Black, 2005). In this crisis, far larger and more aggressive perpetrators remain at large”. “What takes courage now is to recognize that government encouraged – no, it fostered – the largest financial swindle in world history. The economics profession remains, to this day, wilfully deaf, dumb and blind to the implication of this fact.” 

The targets of these new EU’s measures are the European welfare systems with the varieties of social and labour rights established in the past. Their destabilization follow the one implemented in industrial relations and industrial policies during the 1980s-1990s and the one applied to European agricultures since the 1960s. The increased process of de-location of European industry followed by the cancellation of social and labour rights are part of this scenario. The role of Washington and its financial institutions in the governance of globalization has found its European partner in the German-British-French alliance within the EU. This situation is analysed in the mentioned Galbraith essay: “As Baily notes, deficit hawkery is even more intense in Europe. There, those imposing it (mainly the Germans) have the vast advantage of a competitive manufacturing sector and a depreciated currency, generating economic growth in the face of fiscal contraction, while those bearing the burden (in Greece, Portugal, Ireland and elsewhere) are often in small countries whose prospects depend heavily on not making the great powers of Berlin and Frankfurt overly angry. For this reason, austerity plans imposed on Greece do not include sharp cuts in the purchase of German battle tanks – or French submarines for that matter, Greece continues to bear one of the highest per capita burden of military expenditure in the developed world, despite having zero prospect of armed conflict, with Turkey or anyone else.”

The social model to be imposed in Europe is the Danish Model. Danish industry has been very innovative entering the new sector of production dedicated to alternative energy (wind and solar energy). As it happened for the car industry in other EU’s countries during previous decades, the state and public institutions have favoured this sector with investments and infrastructures. Regional development funds were largely applied to help this industry (“green jobs”) to raise and with great success. The home market in strong expansion has obtained success also in other countries with a substantial export. However, the logic of the invested private capital became the same of any other for-profit business. It is not oriented to a stable and sustainable growth but to an ever increasing growth independently from real needs and production reality in other countries. Their dream would be to provide at least a wind-mill for each person as it has been done with car industry, Mobil phone, etc.. Instead to be an incentive to reduce energy consume it is just the opposite. The environment collapse that will come in two decades where all these machinery will become obsolete and will be replaced  does not bother the producers. Just as it has happened with the car industry. All this show that the roots to these and similar problems do not rely on alternative choices of specialisation (car, electric car or windmill) or smart innovative trends but on the predator capitalist culture of globalisation that inspires these behaviours.

Denmark is one of the best European producers of windmills. One of the dealing company is VESTAS. A company with big enterprises in various regions of Denmark and other countries. On November 26 the company informs the workers and the public opinion that due to reduced growth rate of this sector in Europe many factories will close down. About 3000 workers will be fired. The regions involved are among the less developed of Denmark strongly relying on this enterprise for their economic survival. They are regions (as Nakskov and Lolland Faster) that met serious problems during the closing of their shipyard few decades ago. This new industry had brought back some hopes on stabilization, and public work was done to improve the infrastructures for the shipping of the products.

The city majors were astonished to get this news via radio. The same took place for the trade unions. Nobody knew about it. And nobody expected to be informed! Everybody is worried about the future, but so it is in the Danish system of industrial relations. Worries are aloud, but conflict not, when outside the regulatory system of collective bargaining. Do not even think about it. The decisions will be implemented in one month. No room for bargaining. The role of the union is to explain to the workers that the best they can do is to find a job elsewhere. It is rational and in the common interested of everybody. Conflicts, like corruption, cannot exist in the country of H. C. Andersen Fairy Tales. We better sacrifice ourselves to maintain this status to the country and to its institutions. The workers interviewed in the TV were disappointed but prepared to sell their houses and to move in other regions of Denmark in hope of to find a new job. That is all. No doubt about the decisions taken by the company. These are the accepted conditions of competition and private capital. The representatives of the qualified metal workers say that there are no more jobs in the region and therefore the workers have to move south, maybe to Germany. It is a pity for these cities and small communities that will be abandoned and decline, but so it is.

The reasons of this closure of enterprises are that the expectations about a great jump forward for the “green” sector in Europe have not taken place yet. The expectations were higher than reality. And they have influenced the evaluation of the budget results in the third quarter of the year. Really not bad at all, but however. The turnover has been of 1,722 MIA. Euro (12,8 MIA. Kr.) compared to 1,814 MIA. Euro (13,5 MIA. Kr.) of the same period last year. The surplus before taxes amount to 175 Mio. Euro (1,3 MIA. Kr.) compared to 229 Mio. Euro (1,7 MIA. Kr.) the third quarter of 2009. Not a bad business you would say, but nothing that is not more than last year is good enough for VESTAS.

On the other hand, there is progress to trace in order backlog. In the first nine months of 2010 had VESTAS a request for permanent and unconditional orders on 6,567 MW, which is the highest ever. Order backlog represented by the end of the last quarter of the year 5,884 MW with a value of 5,7 billion Euros (42,5 billion kroner ). However VESTAS insists on its expectation of a total new orders on 7000-8000 MW throughout 2010. For the comparison collected VESTAS throughout 2009 only orders on 3,072 MW corresponding to a total value of 3,2 billion euros (23,8 billion kroner ).

At the beginning of 2010 chose this big win-mill producer  to maintain a substantial overcapacity in Europe in the expectation that demand would rise in 2010 and 2011. Now that is clear that market growth in Europe in 2011 will not achieve the expectations VESTAS has decided to reduce its production capacity with the closure of a number of factories, mainly in Denmark, where costs are highest. A number of administrative functions in a number Danish and foreign locations will also be adjusted. Therefore will around 3,000 jobs be eliminated as results of these measures. The affected factories in Denmark are placed in Skagen, Nakskov, Rudkøbing and Viborg. The cost of these operation for the dismissing of fixed capital and the redundancy of staff will be of 140-160 million euro (1,0-1,2 billion kroner) in extraordinary expenses during the fourth quarter of 2010.

These are the facts as cold as the reactions of the involved persons – workers, trade union and politicians. It is pity, it is said, let try to find a job elsewhere. No mention of the problem or conflict of any kind could be found  in the main Danish newspapers. The political agenda was busy with press scandal, principle discussions on human rights, terrorism and Islamism, Denmark role in the wars, etc.

The reactions have been different in Great Britain where VESTAS, an enterprise that has been able to create 21.000 green jobs in all the world, become object of workers, trade union leaders and environment activists criticism. The VESTAS and his directors are suddenly in the unfamiliar and unpleasant situation to be targets for angry workers, trade unions, green politicians who accuse the company to drive profit at the expense of jobs. The factory on the British Island Isle of Wight has been occupied in protest against the announced closure of a branch of the company with 525 employees. 'We feel that we have been treated unfairly being terminated by a company, which only aim seems to be to create profit,' said a local director yesterday by mobile telephone to The Guardian. The media are closely following the conflict and British police refused to break the occupation. Production cuts in Great Britain have been taken also in Newport and on the Isle of Wight where there have been strong reactions and conflict with talks at the government level to try to find a solution.

However the problem is more complex in Great Britain. The Environment Minister Ed Milliband has presented a new climate policy plan for the creation of 400.000 green jobs via the construction of at least 7.000 windmills. But there is a widespread opposition of the local authorities to the establishment of new windmills. VESTAS central director, Ditlev Engel, has talked about a “not-in-my-backyard-problem” that has stopped the possibility of any expansion of the sector in the country. The British government is trying to support VESTAS activities while the company seems more oriented to leave the British market. Workers representative are against to give more money to private enterprises and call instead for a nationalization of the windmills enterprises.

Jobs dismissal in a context of rising unemployment and severe public finance restrictions poses the problem of new employment policies in a situation of changing patterns in the international labour distribution and specialization. With reference to the USA situation notes Galbraith: “The problem of jobs has practically nothing to do with the condition of manufacturing….Jobs are lost in manufacturing due to productivity gains, to foreign competition and to off-shoring, initially to Mexico and later to China. Nothing can be done about this and nothing will be done about it. Job creation is about service. It’s a matter of finding useful things for people to do, providing them with income and the companies that employ them with fair profit. However, the role of profit-making in job creation should not be overstated, Some seventeen percent of total employment is in government. Another large part is in the not-for-profit sector, fuelled by philanthropic donations  and so forth. “ But all this brings us into the discussion of our (Italian and European) alternative development model, which deserves  to
 be continued.