Dialog International

A Nation of Tax Cheats

A huge tax scandal is unfolding in Germany, and it is having political consequences.  It seems that rich Germans would rather put their money in secret bank accounts in Liechtenstein than pay the taxes they owe under German tax laws.  The scandal is affecting some of Germany's best-known managers:

It began last week with the arrest of a leading German executive on suspicion of tax evasion. Now Germany is enthralled by a tale of unbridled greed that offers as much drama as any Hollywood thriller could — but with possibly far greater political consequences. Prosecutors have said that further probes are under way into the tax affairs of hundreds of individuals suspected of funneling millions of euros into anonymous bank accounts in Liechtenstein under the radar of German tax authorities. The targets are  thought to include some of Germany's wealthiest and most prominent citizens.

Everyone is outraged: this is further evidence of the sad state of affairs in the Banana Republic of Germany. Now it appears that even representatives in the Bundestag may be involved in tax evasion; the general outrage is helping the politcal fortunes of the LEFT party.  A climate of class warfare and general animosity towards the wealthy now pervades Germany.

On the other hand, cheating on taxes is an equal opportunity activity in Germany: everybody does it:

"So wird es von drei Vierteln aller Deutschen praktiziert und empfunden. Die meisten haben ja einen offiziellen Job und arbeiten dann eben nach Feierabend oder am Wochenende schwarz. Weil sie in ihrem offiziellen Job Steuern zahlen, haben sie kein Unrechtsbewusstsein. Wenn dann noch so prominente Fälle wie Zumwinkel bekannt werden, denken sie sich: Jetzt erst recht, wenn nicht mal der Steuern zahlt."

Schwarzarbeiten - or working of the books- loses more revenue for the German government than the secret accounts of the wealthy.

Why this refusal to pay taxes in Germany? And what can be done about it?  The SPD and its allies on the left are calling for harsher punishment - with stiff prison sentences for tax evaders.  Others say the tax rates are too high and tax reform is desperately needed.  Does the widespread dishonesty reflect a legitimation crises for the German government?

Or is tax avoidance simply wired into human behavior?  It is estimated that the United States loses approx. $300 billion each year in revenues because its citizens don't pay what they owe in taxes. The Bush administration has bankrupted the nation by granting generous tax cuts to the wealthiest Americans, so that the US now has the most regressive tax system among the wealthiest nations.  But this generosity towards rich Americans is evidently not enough: wealthy Americans have also been hiding their assets in Liechtenstein banks.

Combat Troops to Afghanistan? Nein, Danke!

Earlier in the week US secretary of defense Robert Gates sent a "stern" letter to his German counterpart requesting more German troops for the NATO mission in Afghanistan.  Berlin gave its answer yesterday:

BERLIN, Feb. 1 -- Germany on Friday rejected a formal request from the United States to send forces to war zones in southern Afghanistan, the latest setback to the NATO alliance as it tries to scrape together enough troops to battle resurgent Taliban forces and stabilize the country.

Defense Minister Franz-Josef Jung said his country's contingent of 3,200 soldiers would stay put in the northern provinces, where they patrol some of the most secure areas of Afghanistan. "That will have to continue to be our focus," Jung said to reporters.

NATO commanders have said they need to add 7,500 troops to the 40,000-member force that NATO oversees in Afghanistan. But there have been few countries willing to comply. Meanwhile, NATO has been struggling to persuade some members not to worsen matters by pulling out.

Joerg over at the Atlantic Review is alarmed, and sees this as a crisis for NATO's future. I'm not so sure. The NATO mission in Afghanistan is extremely unpopular in Germany.  The polls I've seen indicate that only 29% of Germans support the mission.  Why would they want to double it at this time, when Afghanistan is increasingly seen as a failed state? Even the US Afghan Study Group, in its new report (pdf)  admits the entire strategy in Afghanistan was flawed. Unfortunately, the Study Group recommends basically doubling down ("increasing the footprint") in Afghanistan - i.e. continuing the flawed strategy with more resources - as the way forward.

In its final days, the Bush administration is peddling furiously to salvage its "legacy" and pin its failures on others.  NATO is convenient scapegoat for the failure in Afghanistan. Jung did the right thing in telling Secretary Gates to f**k off that Germany would not agree to his request.

Forget America

Check out this video (accessed only from the Web site of Die Zeit) of journalist Jens Jessen exhorting viewers to Forget America (Vergesst Amerika!).

For non-German speakers, Jessen explains that the United States is in a weakened state thanks to broad array of problems - including the Iraq War fiasco - and so can no longer be considered as a model for Germany.  But America's woes have a silver lining for Germans, since now they can address problems in a way that makes sense within a European, or specifically German context without constantly glancing across the Atlantic at Big Brother.  Long Live Old Europe/ Es lebe das Alte Europa!

What is disconcerting about this video, however, is the painting of Vladimir Nicolai Lenin in the background (visible above to the right of Jessen).  What is Jessen trying to say with this image? 

Losing Heart in Afghanistan

Over at the Atlantic Review blog Joerg has started an interesting debate about Germany's  - and NATO's - mission in Afghanistan. There is a growing sentiment among the NATO participants that the peace-keeping and nation-building task is now undermined by the heavy-handed tactics of the US military, which have caused scores of civilian deaths in the country.  Things in Germany came to a head over the weekend when a suicide bomber killed three German soldiers.  Now the Afghanistan mission is exposing a rift in the governing CDU/SPD coalition in Berlin:

"The German soldiers are being identified with the way the US led the war," Annen said in an interview. "In my opinion, the mandate for Operation Enduring Freedom should not be extended."Trittin, whose Greens were in office with the Social Democrats when they made the decision in 2001 to send German troops to the American mission, said that the actions of US special forces were leading to the deaths of civilians and that German participation should be ended.Germany has the third-largest force serving in Afghanistan, after the United States and Britain

The opposition Left Party has gone even further, calling for the immediate withdrawal of all German troops from Afghanistan.  The Left Party has been derided as reckless and extremist, but it is simply giving voice to what the overwhelming majority of Germans think:

BERLIN, May 23 (Reuters) - Nearly two thirds of Germans want their troops to withdraw from Afghanistan after three German peacekeeping soldiers were killed over the weekend, a poll published on Wednesday showed. Carried out on Monday by the Forsa polling agency for weekly Stern magazine, the poll showed 63 percent of respondents believe Germany's Bundeswehr armed forces should withdraw from Afghanistan compared to 35 percent in favour of remaining.

The situation in Germany is similar in some respects to the rejection of the Iraq War in the United States.  Every poll shows that the overwhelming majority of Americans want US troops to be withdrawn sooner rather than later, even as the Bush adminisitration with the backing of the  Republican Party escalates the war with a surge of additional tens of thousands of troops. The difference is, Germans have come to the desire to withdraw from Afghanistan after losing only 21 troops, while it took the deaths of nearly 3,500 troops for Americans to wake to the folly of the Iraq misadventure. 

Putinizing Democracy

"What is pure democracy?" asked Vladimir Putin at the joint press conference with Chancellor Angela Merkel in Russia yesterday. "It is a question of ... whether you want to see the glass half full or half empty." Putin was lashing back at Merkel's criticism of Putin's crackdown on protesters in his country:

"Early on Friday, leaders of the Other Russia coalition of opposition - Garry Kasparov and Eduard Limonov - and right advocate Lev Ponomarev were prevented from leaving Moscow for Samara to join the Dissenters March, which is timed to the summit of Russia and Europe there. According to some sources, the opposition chiefs weren’t allowed to set aboard of plane, as police doubted validity of their tickets."

The other day I wrote about the efforts of the German police to disrupt the protests planned at the G-8 Summit in Heiligendamm.  I ended the post with this: "I can only laugh when Washington or Berlin express outrage at how Vladimir Putin has stifled dissent in Moscow." Well now it is Putin himself who is laughing at Merkel by pointing out how protesters in Germany are being are being taken into "preventive custody".

More about this in Telepolis:

Bundeskanzlerin Merkel kam durch den Gegenangriff Putins auf Estland, aber auch auf die Praxis in Deutschland, offensichtlich ein wenig aus dem Tritt und konnte nicht recht erläutern, was der Unterschied zwischen der Haltung gegenüber Demonstranten in Deutschland und Russland ist.

Putin will be watching with great satisfaction at the Summit how the protesters will be blocked from getting within 2 Kilometers of Heiligendam, how they will be shepherded into makeship prison camps for the duration of the Summit. Then he can listen to his good friend President Bush talk about "enhanced interrogation techniques" at the prison camp in Guantanamo Bay, Cuba, and the massive illegal surveillance progam on American citizens.

Dear Vladimir, you are wrong.  The glass of democracy is neither half-full nor half-empty. It has been completely empty for a long time.

A League of Our Own

Writing in the Tageszeitung, Armin Osmanovic almost sounds like he wants to sign on to John McCain's League of Democracies.  Osmanovic envisions an Allianz der Demokratien:

Um dem Ziel der globalen Sicherheit näher zu kommen, muss sich der Westen neuen Rückhalt innerhalb der Staatengemeinschaft organisieren. Notwendig ist die Bildung einer "Vereinigung von Demokratien", in der neben den Nato-Staaten auch Länder wie Japan, Brasilien, Mexiko, Indien, Südkorea, Ghana, Südafrika, Senegal oder Botswana einen Platz einnehmen könnten. In einer solchen Staatengemeinschaft könnten auch die vier gescheiterten Anwärter auf einen UN-Sicherheitsratssitz Japan, Brasilien, Indien und Deutschland eine herausgehobene Stellung einnehmen.

Würde eine solche "Vereinigung der Demokratien" bereits heute bestehen und wäre die Glaubwürdigkeit der westlichen Staaten nicht durch ihren Einsatz in Afghanistan und im Irak beschädigt, dann könnten diese Staaten heute viel effektiveren Druck auf die autoritären Regime im Sudan oder in Simbabwe ausüben. Gemeinsam könnten sie sich etwa den Vorschlag des französischen Politikers François Bayrou zu eigen machen: Er fordert, dass Frankreich die Olympischen Spiele in Peking 2008 boykottiert, wenn China Maßnahmen gegen den Sudan noch länger verhindert.

Speaking the other day at Stanford University, Senator John McCain called for a "League of Democracies" :

We should go further and start bringing democratic peoples and nations from around the world into one common organization, a worldwide League of Democracies. This would not be like the universal-membership and failed League of Nations' of Woodrow Wilson but much more like what Theodore Roosevelt envisioned: like-minded nations working together in the cause of peace. The new League of Democracies would form the core of an international order of peace based on freedom.

Of course, McCain and Osmanovic are coming at this from opposite poles. Osmanovic is harshly critical of the military interventions in Iraq and Afghanistan, while McCain wants the League of Democracies to beef up their military capabilities so that they become more of a Coalition of the Willing. Still, both see this as a way to circumvent the United Nations and a way to punish Russia and China. The concept of a group of democracies separate from the UN strikes me as wrong-headed since it would alienate not only Russia and China - who we want to move to more open societies - but also all Arab states, indeed the entire Middle East with the exception of Israel. In the end, it is also a silly idea, since it is absurd to think that European nations and anti-colonial nations in the developing world would join an alliance that is perceived as another vehicle for American hegemony, benign or otherwise.

Habermas on the EU's Future

Jürgen Habermas is always worth listening to. On the occasion of the EU's 50th birthday, Habermas was interviewed by Perlentaucher.de on the way forward in Europe.  Habermas celebrates the notable successes of the EU, but is also frustrated that further progress is stalled because of seemingly intractable differences among member states. His solution for the logjam is worth noting - Sign and Sight provides an English translation of the interview:

"(J.H.) A bold vision for 50 years down the line will not help us get on right now. I am content with a vision for the period leading up to the European elections in 2009. Those elections should be coupled with a Europe-wide referendum on three questions: whether the Union, beyond effective decision-making procedures, should have a directly elected president, its own foreign minister, and its own financial base. That is what Belgium's Prime Minister Guy Verhofstadt advocates. Such a proposal would pass muster if it won a "double majority" of EU member-states and of individual citizens' votes. At the same time, the referendum would be binding only on those EU member-nations in which a majority of citizens had voted for the reforms. If the referendum were to succeed, it would mean the abandonment of the model of Europe as a convoy in which the slowest vehicle sets the pace for all. But even in a Europe consisting of a core and a periphery, those countries which prefer to remain on the periphery for the time being would of course retain the option of becoming part of the core at any time.

Habermas has been an outspoken critic of the US-led "war on terror".  For this outspokenness he has often been accused of "anti-Americanism".  Here he rejects that label and mentions what America means to him:

"(J.H)my criticism of the Bush government bears not the faintest whiff of anti-American sentiment. Here in Germany, anti-Americanism has always been part of the most reactionary movements. But the fact that my generation in particular admires and has learned from the political culture of the United States, which is rooted in the 18th century, does not oblige me to unquestioning loyalty. Rather, it obliges me to hold fast to the normative significance of the Federal Republic's orientation towards the West, even against the self-destructive policies of an American government which can be voted out of office. Secondly, I am not naive enough to believe that even a Europe which has learned to speak with a single voice could alone bring about the long-overdue reform of the United Nations. If the United States does not spearhead the movement for reform – as it did twice in the course of the 20th century – there is little prospect of its success. We can at most cultivate the hope that a stronger Europe will be able to influence its allies along these lines. At the same time we must reckon with the likelihood that the next U.S. administration will pursue a neo-realist power policy and will tend not to be open to the normative prospects of a strengthened United Nations Organisation.

I like his reference to "the self-destructive policies of an American government which can be voted out of office."  That is what we are trying to achieve in 2008. And I also believe that some of the Democratic candidates such as Barack Obama are open to a reinvigorated UN.

US Missile Plan: Cui bono?

We have been following the Pentagon's plans to establish "missile defense" positions in Poland and Czech Republic. Up to now, only Vladimir Putin has complained loudly about this; but the German foreign secretary's office is now openly expressing irritation.  Today's Handelsblatt asks the right question: Wem nützt sie? (Whom does it benefit?):

Die Unzufriedenheit über die Konzentration auf Verfahrensfragen wächst auch deshalb, weil sie zunehmend als Augenwischerei empfunden wird. Da es sich um ein nationales Rüstungsprogramm der Supermacht USA handelt, werden letztlich weder die Russen noch die Europäer wirklich mitreden können. Das verstärkt den Frust, weil man sich in vielen europäischen Hauptstädten mit Blick auf russisches Grollen durchaus als politische Betroffene einer Stationierung sieht.

Reuters reports the German deputy foreign minister Gernot Erler is now warning that the missile shield system is the first phase of a new arms race; and furthermore:

Erler also criticized decisions by nuclear powers Britain, France and the United States to modernize their atomic arsenals, which he said would complicate non-proliferation efforts.

Germany needs to take the lead in forcing the US to bring the discussion into NATO, rather than the bi-lateral approach taken up to now. Could it be that Germany is finally waking up to the fact that it is a world power?  See the NZZ from yesterday (Deutschland - die ängstliche Grossmacht):

"The Federal Republic of Germany used to perceive itself as a middle-size power in Europe. And it still sees itself in this role, although the general set-up has changed. The revision of the balance of power which was cemented in Potsdam in 1945 has led to a loss of importance for the Soviet Union, which has now shrunk to Russia, but also for France, while Germany is among the winners in the 'new world order'. It no longer draws its strength from its economic power alone, as it did during the Cold War. Together with a handful of other states it now possesses the necessary clout to shape international politics. Reunified Germany has grown into a major power, but it's still clinging to its conservative ideal of being a middle-size power."

European Union at the Crossroads

Kai Ehlers gets to the crux of the matter in a piece this morning in Freitag.  The US plan to establish missile bases in Poland and the Czech Republic is a key test for the EU and its relations with both the US and Russia. No one really believes that these bases are needed to protect Europe from Iran or North Korea; these threats are non-existent, at least for the foreseeable future. The true target is Russia, in the first instance, and Europe, in the second.  For the bases represent a shrewd tactical maneuver by the Bush administration to drive a wedge between the EU and Russia:

Die EU-Erweiterung bis an die Grenzen Weißrusslands, Moldawiens und der Ukraine, die Option einer strategischen Partnerschaft zwischen Brüssel und Moskau, die in einen ost-westlichen Energieverbund münden kann, die Entfaltung einer eigenen "Europäischen Verteidigungsidentität" und nicht zuletzt die Rolle des Euro als Konkurrenz-Währung zum Dollar haben die atlantische Kräftebalance verändert. Aus amerikanischer Sicht mit einer für die eigenen Belangen wenig willkommenen Tendenz.  (the expansion of the EU to the borders of Belorussia, Moldavia and the Ukraine, the option of a strategic partnership between Brussels and Moscow, which could result in a east-west energy pact, the evolving European self-defense identity, and, finally, the role of the Euro as a competitive currency to the US dollar have changed the Atlantic balance of power. From the American viewpoint, an unwelcome trend with respect to its own interests.)

Europe can control its own destiny and pursue its own interests in a mult-polar world, recognizing once and for all the cold-war style American century is over.

Die entscheidende Frage, um die es zur Zeit geht, lautet deshalb nicht - oder besser - noch nicht: Neuer Rüstungswettlauf, neuer Kalter Krieg - ja oder nein? Sie lautet vielmehr: Wo steht Europa in diesem Konflikt? Ist es bereit, eine Art "Brückenkopf" für die Aufrechterhaltung des US-Anspruchs auf globale Alleinherrschaft zu sein? Oder emanzipiert es sich - gemeinsam mit den von Putin in seiner Münchner Rede genannten BRIC-Staaten Brasilien, Russland, Indien und China - auf dem Weg in eine internationale Ordnung, die dem heraufziehenden globalen Kräfteverhältnis entspricht? (The decisive question that confronts us is therefore not - or at least not yet- : New arms race, new cold war - yes or no? Rather the question is: Where does Europe stand in this conflict? Is it prepared to be a "beach head" for the US and it's insistence on remaining the sole superpower? Or will it break free - along with the BRIC states Brazil, Russia, India and China - on the path to a new world order which conforms to the emerging global power relations?)

Fischer: Attacking Iran "A Stupid Step"

Joschka Fischer was in Abu Dhabi and told a group of journalists, policy makers and political scientists that bombing Iran would be a "recipe for disaster" and result in a worse conflagration than the current Iraq debacle. I cannot find a transcript of Fischer's speech (which was in English) and so need to rely on the Spiegel report.  Evidently Fischer believes that economic sanctions would be effective in preventing Iran from moving forward with its nuclear program:

"Die Regierenden haben große Angst vor einer Isolation. Deshalb sollten wir weiter nach vorne gehen und Druck ausüben."

Michael Young, writing in Reason, sees some problems with Fischer's position on Iran:

But there are two problems in Fischer's analysis and that of other administration critics. First, Iran is plainly intending to build a nuclear device, and in the face of this the international community has repeatedly vacillated. Fischer's anxieties, which he wears on his sleeve, create a sense that he would prefer to let Iran have an atomic weapon than allow the U.S. to prevent this from happening. Part of the problem is that his argument is all carrots and no sticks. Fischer accepts that brinkmanship can produce good results, by paving the way toward serious negotiations; but he so undermines the argument in favor of using force, that that psychological merits of employing brinkmanship come to nothing.

Meanwhile, one of Joschka's old comrades reminisces about the good old days.