Wrong Place, Wrong Time

Prit Buttar: Between Giants -The Battle for the Baltics in World War II

The Wall Street Journal, August 15, 2013

The finest English-language portrayal of the fate that came calling for the Baltic States in 1939 is  William Palmer’s  “The Good Republic,” a short novel written on the eve of the breakup of the U.S.S.R. that evokes both the horror that engulfed these nations and the monstrous dilemmas that the war left in its wake. Early in its pages, an aging émigré, back in his homeland after nearly 50 years, ruefully remembers how his (unnamed) Baltic country had, for a while, led “a charmed life . . . between mad giants.” That characterization is recalled in the title of Prit Buttar’s history of what happened when Nazi Germany and Soviet Russia carved up northeastern Europe between them before turning on each other.

The Nazi-Soviet pact of 1939 consigned the Baltic trio of Latvia, Lithuania and Estonia to Moscow’s sphere of influence. Mr. Buttar, a British physician and independent military historian, recounts how these three small countries were first forced to accept Soviet garrisons and then incorporated into the U.S.S.R. in August 1940 after elections that were as bogus as the choreographed “popular” revolutions that preceded them. The arrests, deportations and executions that followed were the standard Stalinist script.

When the Germans invaded the U.S.S.R. in June 1941, they quickly rid the Baltic States of their Soviet occupiers and were initially welcomed as liberators. This was an illusion that the countries’ Jews obviously didn’t share. Though Estonia had only a tiny Jewish minority, about 5% of the Latvian population (some 95,000 people) was of Jewish descent, as was around 9% of Lithuania’s (roughly 250,000). Most of these people were dead at the end of 1941, murdered by the Einsatzgruppen, German mobile killing squads.

The perception that the Jews had collaborated with Soviet rule reinforced older prejudice, and all too frequently Hitler’s butchers had local assistants. Mr. Buttar relates the dismal chronicle of the Baltic’s willing executioners with some skill, if, perhaps, with too little consideration of the way in which the Soviet destruction of the established political, economic and social order had eliminated the elements that might have put some brake on the descent into atrocity.

The danse macabre of ethnicity and ideology didn’t stop there. Had the Germans so chosen, they could have restored a measure of self-determination to the Baltic States and bought some strategically useful loyalty. But Hitler had other plans for the region. In his Teutonic take on manifest destiny, the indigenous populations, even purged of the Jews, offered little more than prospective labor for the greater German good.

As the Red Army pushed back and then west, though, the Reich’s leadership began to view the Baltic nations as a source not just of auxiliaries but of front-line troops. Latvian and Estonian formations were established within the Waffen-SS and fought in battles on the Eastern Front. Some of these recruits were true believers in the Third Reich, and some were simply opportunists. But a good number—knowing what the return of Soviet power would mean—signed up in the belief that they were choosing the lesser of two evils, their countries’ last hope, however remote. Others were the conscripts of any war, young men in the wrong place at the wrong time.

Mr. Buttar neither judges nor whitewashes these soldiers. But after going through his carefully balanced account of the predicament in which Balts found themselves in those years, readers will find it easier to understand why today’s reunions of Baltic Waffen-SS veterans, which include an annual parade through Riga, the Latvian capital, trigger not only outrage but also a degree of local approval.

The Red Army re-invaded the Baltic States in 1944 and in a sequence of brutal autumn battles evicted the Germans from Estonia and Lithuania. Several hundred thousand troops were cut off in Latvia’s “Courland Pocket” and continued fighting until war’s end in May 1945. Mr. Buttar is himself an army veteran, and it is from the military perspective that he relates the savage unraveling of the Baltic world during World War II’s last year. There’s plenty here on weaponry, on tactics and strategy, on the movement of units—and, as so often in volumes of this type, who won what decorations for what actions. Thus we are told that in January 1945 the soldiers holding out with desperate effectiveness against the Soviets were each “awarded a ‘Kurland’ badge or armband.” But what conditions were truly like in that cutoff redoubt has largely to be guessed from glimpses of exhausted men, references to continuous fighting and laconic details of “increasingly meaningless” battles fought on until the fall of the Reich many months later.

The Soviet “liberation” of the Baltic States, and their postwar reabsorption within the U.S.S.R., restarted the cruel machinery of Stalinist repression on an even more hideous scale than before. Unlike in 1940, however, tens of thousands of Balts took to the forests and staged a lonely epic of defiance often overlooked by historians. To his credit, Mr. Buttar takes his story through the postwar period. Partisan activity peaked in the mid- to late 1940s but was severely hampered by a wave of mass deportations—over 90,000 Balts were sent to Siberia in 1949. Despite this blow to its base, the resistance struggled on, outnumbered and outgunned, well into the next decade. They were hoping for effective Western support. It never turned up.

The Tragedy Europe Forgot

R.M. Douglas: Orderly and Humane - The Expulsion of the Germans After the Second World War

The Wall Street Journal,  August 9, 2012

By the late spring of 1945, Germany had lost a war, its honor and millions of dead. There was more to come. The Allies had decided that the country’s east should be carved up between Poland and the Soviet Union and that its German inhabitants should be moved to the truncated Reich. There they would encounter Sudeten Germans, Czechoslovakia’s second largest ethnic group, now also scheduled for deportation. In August 1945, the United Kingdom, the United States and the Soviet Union agreed at Potsdam that these transfers, which had in any case already begun, should be “orderly and humane.”

They were to be neither, and they rapidly evolved into the greatest forced migration of all time. In total, 12 million Germans or more—mostly women and children—were stripped of all they owned and expelled from a vast swath of Eastern and Central Europe. At least 500,000 lost their lives (some estimates are far higher) due to neglect, violence, disease and the debilitating effects of freight wagon and forced march. From the Baltic to the Carpathians and beyond, communities that had flourished for, in some cases, more than half a millennium were smashed and scattered until all that remained were buildings and graveyards.

In “Orderly and Humane: The Expulsion of the Germans After World War Two,” R.M. Douglas quotes the comments of a British diplomat who visited East Prussia in September 1945: “The towns of Deutsche Eylau, Freistadt and to a lesser extent Marienwerder, as well as the smaller villages, are not only devastated but also almost empty,” he wrote. “These are ruins in the raw, untouched and untidied, looking like horses disemboweled in a bull-ring.” Deutsche Eylau, a part of the Duchy of Prussia since 1525, is, like the other two towns, a part of Poland today.

Mr. Douglas is careful, however, to guide his readers away from any notions of moral equivalence between these events and the Nazi slaughterhouse that preceded them. The treatment of the Germans was savage, cruel and frequently murderous, but it most closely resembled (in type if not scale) the “ethnic cleansing” that would tear apart Yugoslavia during the 1990s. It was no new Holocaust: The “Germanic vermin” (to borrow the words of one Polish general) were to be driven to the west, not annihilated. There were shootings, but no Babi Yars; camps, but no gassings. Auschwitz was reopened, and prisoners again shuffled through the yard at Majdanek.

Mr. Douglas relies rather less on the chronicling of particular horrors than many who write about atrocity, a display of self-restraint that somehow makes his narrative all the more chilling. To be sure, widespread fears of yet another German resurgence coexisted alongside a general acceptance of the idea of German collective guilt and the necessity of teaching the Hun a harsh lesson. But Mr. Douglas shows that the expellees were the victims of realpolitik as well as rage, righteous or otherwise. In 1943, Gen. Władysław Sikorski, the leader of the “London Poles,” may have been moving toward accepting a postwar Poland shoved westward (to accommodate Stalin’s theft of the country’s eastern portion) at Germany’s expense, but he was clear that there would be no room within it for a substantial Jewish minority. If this was to be punishment for Hitler’s crimes, it was taking strange forms.

Even before the war, in the run-up to the 1938 Munich agreement, Czechoslovakia’s president, Edvard Beneš, had, as Mr. Douglas explains, already proposed the expulsion of Sudeten Germans (sweetened with the transfer of some territory to the Reich). No good could come of a Teuton presence in his Slavic republic.

After years of hard-fought Nazi occupation, Tito’s expulsion of Yugoslavia’s ethnic Germans citizens was perhaps no great surprise, but Moscow’s seizure of a slice of East Prussia was just the latest in a series of imperial land grabs engineered by Stalin. And the fact that Hungary and Romania, Axis partners for most of the war, turned on their Germans (admittedly prodded by the Kremlin) is yet another reminder that more than just vengeance was at work. The removal of this prosperous minority offered opportunities for looting, leftist social engineering and, for the region’s emerging communist parties, wrapping themselves in the national flag.

Above all, the expulsions of 1945 were, as Mr. Douglas shows, just the biggest in a series that had begun two to three decades earlier in Turkey, Greece, Central Europe and, even, France’s recovered Alsace-Lorraine. In many respects, the expulsion of the Germans represented the belated full flowering of the ideas that had shaped the Treaty of Versailles (1919). If ethnic self-determination was to be the basis of new European statehood, the multinational countries established by that treaty out of the wreckage of the Russian, German and Austro-Hungarian empires were a task half-completed, an invitation to instability and, as the world now knew, to war.

Most important of all, the “resolution” of what was left of Mitteleuropa’s ethnic muddle dovetailed with Stalin’s strategic objectives in lands now dominated by the victorious Red Army. The fate of the 12 million was sealed.

What followed was peace. Rather than attribute that to the brutal redrawing of Eastern Europe’s demographic and political frontiers (Germans were not the only expellees), Mr. Douglas gives most of the credit to the continent’s long Cold War domination by the two rival superpowers. Fair enough, but it’s impossible not to note that the only part of Europe to dissolve into war in the wake of the collapse of communism was Yugoslavia, a transnational federation whose blurred internal borders and overlapping ethnicities bore a resemblance to the old Eastern Europe and, in some respects, also to the more federal European Union that is now, however uncertainly, under construction. Brussels should take care: History does not always repeat itself as farce.

Eastern Reproaches

Max Egremont: Forgotten Land - Journey Among the Ghosts of East Prussia

The Wall Street Journal, November 11, 2011

In 1945, Stalin seized East Prussia, Germany's venerable redoubt on the Baltic Sea, as a spoil of war. A portion went to the "People's Republic" that the Soviets had just created in Poland. He kept the rest. The last surviving Germans were killed or deported. The cozy old Königsberg of the Teutonic Knights—the home, during the Enlightenment, of no less than Immanuel Kant—was transformed into Kaliningrad—a bleak Soviet place named after Mikhail Kalinin, the token peasant who was titular head of Stalin's USSR.

Nearly 70 years later, the countries behind these borders have changed, but the frontiers have not, and will not. The Polish part is finally and truly Polish; the sliver of East Prussia given to the Lithuanian Soviet Socialist Republic is now a part of independent Lithuania; the rest of the old Soviet slice is a seedy Russian exclave surrounded by the European Union. The only Germans there are tourists, in search of an elusive land that lingers on in family lore and in the dreams of the dispossessed for a vanished, fondly imagined, past.

Max Egremont's idiosyncratic, disjointed and beautifully written volume makes an ideal guide to this shifting, shadowy realm. In part a piecemeal history of the final half-century of German East Prussia, in part a travelogue through what was left behind, "Forgotten Land" is gently elegiac. Shifting constantly between present and a variety of pasts, it is as wistful as a flick-through of an old photo album, as melancholy as a rain-spattered northern autumn afternoon.

From East Prussia's tangled history Mr. Egremont extracts the one essential fact: To the Germans who lived there, this was the frontier, a vulnerable salient pierced deep into Slavic and Baltic realms. The Teutonic Knights of the Medieval Northern Crusades brought Christianity to the Eastern Baltic, and Germans into the region. Those who followed in their wake settled territories that became the Duchy of Prussia in the 16th century, then part of the larger Kingdom of Prussia in the 18th, before being absorbed into the German empire in the 19th. For all that, East Prussia was never quite able to shake off a vaguely colonial economy and a vaguely colonial unease, an unease exacerbated when the Treaty of Versailles left it separated from the Fatherland by a slice of newly reconstituted Poland.

The mansions of the Junkers that anchored this world—and this worldview—seemed frozen in a pre-industrial age, on occasion boasting moldering grandeur and aristocratic eccentricity on an English scale—Carol Lehndorff, owner between the wars of an ancestral pile that dominated Steinort (now Sztynort, Poland) rejoiced in alcohol, rejected vegetables and "when alone . . . lived in two rooms on the warm south side of the house, contemplating his collection of Prussian coins." Mr. Egremont grants us glimpses of an austerely gorgeous idyll, of untamed forests and wide Masurian lakes, of a "softly lit horizon . . . [and] the pale-blue East Prussian sky," of ice-sailing regattas and sleigh rides, of marzipan at Christmas.

The central tragedy of this book is the arrival of the Red Army in late 1944, raping, butchering and smashing its way through a civilization more than half a millennium old in a bloodbath that was both berserker vengeance and cold ethnic cleansing. But he does not let mourning for what was so cruelly lost obscure the edge to the old East Prussian idyll, the harshness that came from the hardscrabble rural life, an authoritarian culture and, always, the anxious politics of a borderland. Versailles turned this mix toxic; Hitler made it murderous.

And Mr. Egremont is unsparing in his account of the consequences. Thus he describes a massacre of Jews on the beach at Palmnicken (now Yantarny, Russia) just before the Soviets came, a killing field that, like so much in this area, came to be stripped of its story. When bodies were discovered in the 1960s, they were assumed to have been slaughtered Russian soldiers. A memorial went up. There was a wreath-laying each year and a parade. Decades later, a former Hitler Youth, returning to the scene of the crime, put the record straight.

Then there's the tale of Walter Frevert, senior forest master for Herman Goering at the kaiser's old hunting grounds at Rominten (now Krasnolesye, Russia). Asked to extend the estate into conquered Poland, Frevert complied, evicting inconvenient locals, a comparatively mild rehearsal for his subsequent transformation of another Polish forest, an exercise that involved the destruction of 35 villages and killing or deporting their inhabitants. After the war, Frevert published "Rominten" (1957), an evocative, if evasive, book about the "paradise" from which he—and Germany—had been expelled. It was a hit. And then the investigations began. The hunter shot himself. An accident, some said.

For others, confronting the past was easier. In early 1945, Marion Dönhoff, a countess long opposed to Hitler, jumped onto her horse and rode west, stopping off at the Bismarck estate at Varzin (now Warcino, Poland: Old Otto would not be pleased) to stay with the widow of the iron chancellor's youngest son. Dönhoff remained for two days listening to reminiscences of empire "as the refugees trailed by outside and an ancient butler served bottles of vintage wine." Then she rode on.

Dönhoff next saw her homeland 44 years later. In 1989, she gave Kaliningrad a statue of Kant, a symbol of reconciliation between old city and new. It was well-received. She was well-received. But the friendliness could not mask what everyone knew. East Prussia's mournful coda was coming to an end. The dwindling band of exiles grows smaller, and their sorrows, at last acknowledged, give off an ever fainter sound. Some buildings, some ruins and some tourists will soon be all that there is to show for the grand Teutonic centuries.

On visiting Kaliningrad in the 1960s, the poet Joseph Brodsky wrote that the trees "whisper in German." They don't any more. But Max Egremont heard their last words.

Masters of the Dark Arts

Igor Golomstock: Totalitarian Art

The Wall Street Journal, June  25, 2011

Marszalkowska 1, Warsaw, September 1988  © Andrew Stuttaford

Twentieth-century totalitarian art did not just gild the cage; it helped to build it. Paintings, movies, sculpture, architecture and festivals of choreographed joy were vital elements in the Nazi and Communist attempts to remake man. It is key to our understanding of the nightmare states that resulted, argues Igor Golomstock, and deserves to be classified as a distinctive artistic genre alongside Modernism, of which it was both byway and heir. Like Modernism, totalitarian art was intended to help sweep away what had gone before, but unlike Modernism it was prepared to steal from the past to do so. The style of the 19th-century "bourgeois" academy was thus conscripted into the service of Reich and eventually revolution, as hallmark, teacher and, to us, cliché.

In his newly updated (it was first published in 1990) "Totalitarian Art in the Soviet Union, the Third Reich, Fascist Italy and the People's Republic of China," Mr. Golomstock convincingly demonstrates how the overlapping aesthetic values of these superficially disparate regimes underlined how much they had in common. This was never clearer than at the Paris exhibition of 1937.  In an unsettling preview of the Molotov-Ribbentrop pact, the Eiffel Tower found itself squeezed between massive Nazi and Soviet pavilions. Conceived as fusions of sculpture and architecture, both were expressions of brute power that played Neanderthal tribute to ancient Rome and were guarded by giant images, of the master race on the one hand, the master class on the other.

The strongest sections of the book concern the Soviet Union, as one might expect from an author whose career included membership in the Union of Soviet Artists and direct encounters with Stalinist brutality. Mr. Golomstock's father was sent to the camps in 1934, and then, some years later, his mother, taking the young Igor with her, signed up to work as a doctor at Kolyma, one of the worst of the Gulag's outposts.

Mr. Golomstock tracks the way that the smash-it-all-up trial-and-error of late imperial Russia's avant-garde (experiments that were paralleled, revealingly enough, by Italy's proto-fascist Futurists) initially meshed with the ecstatic starting-from-scratch of the Bolshevik revolutionary intelligentsia.

The extraordinary artistic innovation of the early Soviet years was rapidly replaced, however, by the stodgy conservatism of high Stalinist culture. The revolutionary past was sanitized, then mythologized. The hardscrabble present was transformed into a time of abundance by what Mr. Golomstock marvelously calls the "magic mirror" of Socialist Realism. The didactic, neo-Victorian paintings, the monumental if clumsily neoclassical architecture and, after 1941, the numerous evocations of martial valor and national pride, were all manifestations of an ersatz traditionalism that resonated with a people exhausted by decades of upheaval and were, of course, perfectly suited to the maintenance of a tightly controlled, rigidly hierarchical new order.

That said, for all Mr. Golomstock's experience and erudition, he falls some way short of conveying the ambition, allure and, well, totality of totalitarianism's cultural projects. While his examination of Nazi art takes useful detours away from the time-worn trudge through lumpen Arcadias and leaden Valhallas to include discussion of the centralized (Soviet-style) control of artistic production, he devotes relatively little space to the party's sometimes brilliant manipulation of design, its use of spectacle—Albert Speer's cathedrals of light—or, even, the films of Leni Riefenstahl. The whole picture never quite comes into view, and it was the whole picture that was the point.

It is no less frustrating that Mr. Golomstock allocates such a small portion of his book to China, the third of the 20th century's great totalitarian empires—particularly as he does find room for an addendum on Saddam Hussein's Iraq, a revoltingly bloody but basically traditional despotism that left little behind it of artistic interest to anyone other than connoisseurs of peculiarly servile kitsch. By contrast, as Mao's Cultural Revolution gathered pace from 1966 on, the mounting political hysteria was reflected, channeled and amplified in and by the arts in ways still terrifying today.

There were the dazibao, the giant-lettered, largely hand-made "big character" wall posters that signaled its beginning. There was the hectoring banality of revolutionary opera. And there were the images—sometimes reproduced in their millions—that both drew upon Socialist Realism and transcended it, a process that culminated in the depiction of Mao as essentially divine. As a demonstration of the fundamentally religious nature of communism, the deification of the Great Helmsman is hard to beat, and it represents the logical conclusion of totalitarian art. Unfortunately, you won't find any direct reference to it in Mr. Golomstock's fascinating, painstaking but ultimately incomplete book.

Naming the Crime

Timothy Snyder: Bloodlands - Europe Between Hitler and Stalin

National Review Online, March 18, 2011

Winter is bleak enough as it is. This year the gloom was deepened by the publication of How to Change the World: Tales of Marx and Marxism, by Eric Hobsbawm, one of Britain’s most feted historians, and, oh yes, a man who stuck with the Communist party until 1991 despite a global killing spree that took perhaps one hundred million lives. Naturally Hobsbawm’s new book has triggered the usual hosannas from the usual congregation for, to quote the Guardian, this “grand old man.”

There had, of course, been that minor unpleasantness back in the 1990s when Hobsbawm had appeared to imply that the deaths of 15 or 20 million people might have been justified had the Communist utopia actually been achieved. This ancient ogre (he is 93) is now more discreet. Reviewing How to Change the World in the Financial Times, Francis Wheen, no rightist and the author of an erudite and entertaining biography of Karl Marx, noted how Hobsbawm could not “bring himself to mention the Hitler-Stalin pact, referring only to ‘temporary episodes such as 1939–41.’ The Soviet invasion of Hungary and the crushing of the Prague Spring were [also] skipped over.”

But who are we to quibble, when, as his admirers like to remind us, Hobsbawm’s life has been “shaped by the struggle against fascism,” an excuse understandable in the 1930s (Hobsbawm, who is Jewish, quit Germany as a teenager in 1933), but grotesque more than six decades after the fall of the Third Reich.

Just how grotesque was highlighted by two books that came out last year. In the first, Bloodlands: Europe between Hitler and Stalin, Yale history professor Timothy Snyder describes the darkness that engulfed a stretch of Eastern Europe in the mid-20th century. He leaves only one convincing response to the question that dominates the second, Stalin’s Genocides, by Stanford’s Norman Naimark: For all the unique evils of the Holocaust, was Stalin, no less than Hitler, guilty of genocide?

The first half of Professor Snyder’s grim saga revolves around the Ukrainian famine of 1932–33, a manufactured catastrophe in which zeal, malice and indifference conspired to create a horror in which, Snyder calculates, well over three million perished (there are other, much higher, estimates). It was, Snyder writes, “not food shortages but food distribution that killed millions in Soviet Ukraine, and it was Stalin who decided who was entitled to what.”

The Ukrainian countryside had already been devastated by collectivization and the killing, imprisonment, or exile of millions of its most enterprising inhabitants. Now it was to be stripped of what little it had left. The peasants were given targets for the amount of grain and other foodstuffs they were expected to hand over to the state, targets that would leave them with barely anything to live on, and often not even that. Refusal was not an option. Starvation was not an excuse. Nothing was left behind. Nobody was allowed to leave. The peasants were trapped. And they were condemned. In the spring of 1933 they died at the rate of more than ten thousand a day. “The only meat was human.”

That fall the United States extended diplomatic recognition to the Soviet Union.

Communism has brought mass starvation in its wake on a number of occasions (2010 also saw the appearance of Mao’s Great Famine,by Frank Dikötter, a harrowing account of the death of millions during the Chairman’s Great Leap Forward), but what distinguishes the Ukrainian Holodomor (a coinage that means murder by hunger) is that, as Snyder demonstrates, this particular famine was not just incidental to the business of fashioning utopia. It was deliberate, a weapon designed to break a class enemy, Ukraine’s embattled peasantry, and the battered nation of which it was the backbone.

It is this national element that some historians would like to deny. It unsettles the conventional narrative under which the ethnically based mass murders of mid-20th-century Europe are associated almost exclusively with Nazis, and, in so doing, it raises some awkward questions about those in the democratic world who looked so longingly to Moscow in the 1930s. The details of the Holodomor might have been obscure or obscured, but there was a fairly widespread awareness in the West that something had occurred. How else to explain all that talk of omelet and eggs? Those who claimed to have turned to Communism only because of the growing Nazi threat must have believed that those millions of dead Ukrainians counted for very little.

And it wasn’t just Ukrainians. As the Thirties curdled on, the list of peoples brutalized by Stalin grew ever longer. The “national operations” that were a murderous subset of the Great Terror of 1937–38 accounted for some 250,000 deaths, including those of at least 85,000 Soviet Poles. The hideous ethnic persecution developing in the Third Reich throughout the 1930s may have been more overt than its Soviet counterpart, but it was in the USSR that the cattle trucks were already rolling. At that stage Hitler’s haul of victims lagged far behind.

That was to change. The second part of Snyder’s book details how the Nazis brought their own flavor of hell to the territories he dubs the Bloodlands. With his feel for neglected history, Snyder restores focus to the terrible fate of the Soviet POWs who had fallen into German hands: “The Germans shot, on a conservative estimate, half a million Soviet prisoners of war. By way of starvation or mistreatment during transit, they killed about 2.6 million more.”

He correctly sees this not just as a matter of callousness and cruelty but as an adjunct to Hitler’s wider plans for a region that was to be emptied of most of its original inhabitants and re-peopled by the master race.

And then, of course, there were the Jews. In page after grueling page, Snyder depicts the pogrom that erupted across the Bloodlands. After all these years, after all the histories, there are still details that appall: “By spring 1943, fires burned at Treblinka day and night. . . . Women, with more fatty tissue, burned better than men; so the laborers learned to put them on the bottom of the pile.”

In an interesting twist, Snyder reveals how the usual Western understanding of the Holocaust, centered on the almost clinical danse macabre of deportation and eventual extermination in a camp far from Paris, Amsterdam, or Rome, fails to reflect the more typical experience to the east. The frenzied killings that swept the Bloodlands in the wake of the German invasion — within six months one million Soviet Jews had been butchered — are the clearest possible evidence of a primeval savagery unleashed.

To suggest, as some have, that, by twinning his chronicle of Nazi atrocity with a history of the Soviet slaughters of the previous decade, Snyder has in some way diminished the Holocaust is absurd. The Holocaust was underpinned by a dream of annihilation that was all its own, but it was also a product of its era. Like Communism, Nazism was a creed with a strong religious resonance (it’s no coincidence that this was a time when more conventional religions were losing their traditional hold over the human imagination), yet it aimed at creating a utopia for its elect here on earth, a dangerous enough delusion under the best of circumstances, let alone those developing in the early 20th century. For these utopias were, quite explicitly, to be built by bloodshed and sustained by force, a prospect made all the more menacing by technological advance, the growth of the modern state, and, critically, the shattering of so much of European civilization by the First World War. That conflict opened the door to the Bolshevik Revolution, which in turn helped pave the way for the Third Reich, a state that was both reaction against and imitation of the Soviet Union.

The Führer who, contemplating the Holocaust, once asked “who now remembers” the Armenian genocide. would certainly have noticed how quickly the Holodomor was allowed to vanish down the memory hole.

In some ways it is still there. That the Stalinist regime was guilty of what any reasonable person would describe as genocide has been beyond dispute for decades. Yet somehow there has been a hesitation about branding the Soviet state with the worst of the marks of Cain, a hesitation that still resonates — in politics, in diplomacy, and in high culture and low. Would there have been quite such an uproar if fashion designer John Galliano had said that he “loved” Stalin rather than Hitler?

In Stalin’s Genocides, Professor Naimark recounts how the definition of genocide was diluted before being enshrined in the 1948 United Nations convention. At the insistence of the Soviets — and others — the destruction of specific social and political groups was excluded. It was a distinction rooted neither in logic nor in morality, but it worked its sinister magic. Sparing Stalin, and by extension the state that he spawned, from the taint of genocide allowed the USSR to maintain some sort of hold over the radiant future that — against all the evidence — it still claimed to be building, that radiant future that has proved such a handy alibi for all the Hobsbawms and, even, for their successors today. It helped ensure that Mao’s famine too was largely passed over in silence. It still enables Russia to avoid the hard truths of its own history, an evasion that poisons its politics both at home and abroad. Sadly, it’s no surprise that the new pro-Moscow government in Ukraine has been playing down the genocidal nature of the Holodomor.

Since the Balkan wars, the jurisprudence of genocide has, as Professor Naimark shows, evolved to the point at which there could be no serious legal doubt that the architects of Soviet mass murder would, if hauled before a court today, receive the judgment they deserve. Prosecutions for the Soviet genocides have, however, been pitifully few and confined to the liberated Baltic states. Thus, in May 2008, one Arnold Meri was tried for his role in the deportation of 251 Estonians almost sixty years before. He died before a verdict could be reached. Not long later Dmitri Medvedev awarded Meri a posthumous medal for his wartime service.

And if you want just one reason why these books by Professors Snyder and Naimark are so important, that’s not a bad place to start. Hobsbawm you can junk.

Big Bruder Watching

Gary Bruce: The Firm - The Inside  story of the Stasi

The Weekly Standard, January 24, 2011

The Wall, Berlin, August 1978 © Andrew  Stuttaford

Stalin’s observation that the death of one man is a tragedy but the death of a million is a statistic helps explain why some of the finest portraits of 20th-century totalitarianism have been miniatures. Ivan Denisovich’s “day without a dark cloud” and the hunt for the Jewish schoolboys in Louis Malle’s Au Revoir les Enfants illuminate horrors that stretch far beyond one outpost of the Gulag or a stagnant Vichy town. The decision by the Canadian historian Gary Bruce to focus his new history of the East German secret police, the Stasi (Staatssicherheit), on Perleberg and Gransee, two out-of-the-way districts in communism’s distaff Germany, might have promised something of the same. But that’s not what his book delivers.

Instead, Bruce takes advantage of the fact that an unusually high proportion of the Stasi archives were left untouched in the backwaters that are his setting to produce a meticulous, grassroots examination of (to quote Timothy Garton Ash) “the quieter corruption of [East Germany’s] mature totalitarianism.” Supplemented by a series of interviews both with former secret policemen and those they watched over, The Firm is well done, even if Bruce’s approach has meant that the grand guignol of the Stasi’s formative years is passed over too lightly for his book to be viewed as a truly comprehensive analysis of that organization’s malignant DNA. The worst aspects of the later, more discreetly brutal, decades also escape the scrutiny they deserve. There’s little on the fates of those “the firm” (the Stasi’s smug nickname for itself) considered its most serious opponents. Their cases would have been handled by (and usually in) East Berlin.

This matters. East Germany’s past remains poorly known outside its former borders and, judging by the perverse phenomenon of Ostalgie, even within them. In making Au Revoir les Enfants, Malle could rely on his audience’s familiarity with the film’s backstory of war, occupation, and Holocaust. Bruce is in no position to make similar assumptions. Nonspecialists would thus do better to turn elsewhere, perhaps to Anne McElvoy’s The Saddled Cow (1992), a perceptive overview of East German history written by a journalist who witnessed its final years, or for a somewhat later examination of still raw memories, Anna Funder’s haunting Stasiland (2003):

Frau Paul started opening doors. First a compartment so small a person could only stand. It was designed to be filled with icy water up to the neck. There were sixty-eight of these, she told me. Then there were concrete cells with nothing in them where prisoners would be kept in the dark amid their own excrement. There was a cell lined entirely with padded rubber. Frau Paul was held nearby.

You won’t find much of that in The Firm. Also missing are the Stasi’s international activities, from espionage to the support of terrorism, dirty work that took place far from the dull towns in which Bruce’s narrative unfolds. Equally, there are few traces of the dangerous dance between regime and intelligentsia that forms the subtext of Florian Henckel von Donnersmarck’s Oscar-winning The Lives of Others (2006). The prominent playwright who is that movie’s principal protagonist bears scant resemblance to Bruce’s bullied provincials.

Where The Firm comes into its own, however, is as a demonstration of the remarkable reach of East Germany’s surveillance state. The Stasi employed 91,000 full-time officers at the time the regime fell. In the prewar Reich, a country with a population well over three times as large, the Gestapo made do with 7,000. To be sure, the Nazis enjoyed greater popular support than their Communist successors, but statistics from other Warsaw Pact countries suggest that this cannot be the sole explanation for the difference. As Bruce notes, “The secret services of .  .  . Czechoslovakia (1:867) or Poland (1:1,574) did not even come close to the ratio in East Germany of one full-time secret police officer for every 180 East German citizens.”

We are left to guess why. Fear of the vanquished fascist enemy? Maybe. Stereotypically Teutonic thoroughness? Probably. The dangerous, reproachful proximity of the free, increasingly prosperous, Germany next door? Almost certainly.

The snooping didn’t stop with the 91,000. In 1989, the Stasi had 173,000 informants on its books. They were given the generic, now reviled, name of unofficial coworker (I—Inoffizieller Mitarbeiter) but were then subclassified according to a distinctively totalitarian taxonomy. This included Secret Lead Informants (GHI), and below them, trusty Full-time Unofficial Coworkers (HIM), and below them, lowly Societal Coworkers for Security (GMS), and then, forming part of the base of this unlovely pyramid, Sporadic Contact Persons (KP) and Collaborative Operational Partners (POZW). In 1988, there was one informant for roughly every 76 preretirement adults in sleepy Perleberg District, a total that Bruce contrasts with one snitch for every 16,800 people in the Ukrainian regional hub of Kharkov at the depths of Stalinist terror.

The Gestapo, of course, benefited from the willingness (for varied reasons) of so many Germans to volunteer information on their neighbors to authorities for whom they had some sympathy. As “the sword and shield” (naturally the iconography was borrowed from the Soviet secret police) of a regime profoundly disliked for most of its existence, the Stasi had to be more proactive. Bruce shows how it recruited (predictably, a mixture of carrot and stick) and why. One Kurt Wollschläger was chosen because of the need to ferret out grumblers at the local river port. That Wollschläger was separated from his wife was, the Stasi (prudish when it came to behavior within its own ranks) reckoned, a plus: He had more time to hang around in bars. That he was a former Nazi was no problem.

Informants would report regularly to their handlers, a snippet here, an observation there, sometimes harmless, sometimes not, and sometimes, perhaps most characteristically, as a piece in a complex composite portrait being assembled of an individual that the regime was beginning to distrust. If it looked as if those suspicions might have been justifie—he bar was low: no laws needed to have been broke—he screws would tighten, relentlessly, remorselessly, but not necessarily attributably. There was not always a warning chat. A job would be suddenly lost; new employment would be hard to find. A child would not win that university place. Ugly gossip might be circulated. The phone would ring at night, with only silence at the other en— perfect expression of this shadowy, subtle, and devastating form of repression.

There was a word for this: Zersetzen (“to undermine” or “to break down”). For outright dissidents, for those “preparing to flee the Republic” or those whose mutters of discontent had tipped over into something more insistent, there was prison (and, on occasion, the bullet). The more fortunate won exile, or had exile forced upon them. For the law-abiding who never crossed such lines, there was always the reality or the risk of Zersetzen, a vital element in a system of understated control that Bruce describes as hovering “ominously in the distance, always threatening, always unsettling, a constant potential threat.” And it worked. The German Democratic Republic was, almost until the end, one of Moscow’s better-behaved satellites.

Coerced good behavior should not be confused with enthusiasm. An appropriately skeptical Bruce reports on reprehensible efforts by some historians to strip that ill-mannered adjective “totalitarian” from the regime that collapsed with the Wall: “Welfare dictatorship .  .  . post-totalitarian bureaucratic dictatorship .  .  . thoroughly ruled society .  .  . forced through society” and, thanks to its colossal number of informants, “participatory dictatorship” are amongst the euphemisms that have slithered into view. We can only speculate at what motivates such nonsense: Is it the persistent academic desire to minimize the crimes of the left, or is it an unwillingness to come to terms with the full implications of past horrors?

Such poisons have a way of seeping out from university campuses, but in the case of the former East Germany, their potency is reinforced by the natural tendency of its onetime citizens to allow past moments of personal happiness to cast a favorable glow over the republic in which they once endured: “Oh, it wasn’t all bad, you know.” Bruce handles this difficult topic with considerable subtlety before concluding that one can no more put a boundary between everyday life in the fallen republic and the ever-present awareness of the Stasi’s presence than “one can encircle a scent in a room.”

The Stasi’s stink not only lingers where it once did (and sometimes very strongly) but has also been allowed to waft into the former West Germany. The Left party, a grouping formed by the merger of western leftists with the “reformed” heirs to East Germany’s old governing party, took some 12 percent of the vote in the united Germany’s 2009 elections. Reformed? Well, when Joachim Gauck, a former dissident and for 10 years the first federal commissioner for the Stasi archives, addressed the parliament in Saxony, a territory that was once part of East Germany, the event was boycotted by all Left party parliamentarians.

A Flock of Black Swans

adam Fergusson: When Money Dies

The Wall Street Journal, December 30, 2010

It says something about present anxieties that a 35-year-old account of Weimar hyperinflation has come into vogue. In early 2010, Adam Fergusson's long-out-of-print volume was trading online for four-figure sums. There were (false) reports of kind words about it from Warren Buffett. Now back in print, this once obscure book from 1975 has been selling briskly. Just another manifestation of the financial millenarianism now sweeping the land? Perhaps, but "When Money Dies" remains a fascinating and disturbing book.

The death of the German mark (it took 20 of them to buy a British pound in 1914 but 310 billion in late 1923) plays a key part in the dark iconography of the 20th century: Images of kindling currency and economic chaos are an essential element in our understanding of the rise of Hitler. Mr. Fergusson adds valuable nuance to a familiar story. His tale begins not, as would be popularly assumed, in the aftermath of Germany's political and military collapse in 1918 (by which point the mark had halved against the pound) but in the original decision to fund the war effort largely through debt—a decision with uncomfortable contemporary parallels (one of many in this book) tailor-made for today's end-timers.

Yet the parallels go only so far. The almost inevitably inflationary consequences of paying for a world war on credit were exacerbated by: Germany's relatively shallow capital markets, the creation of "loan banks" funded solely by a printing press that was also at the disposal of the central bank; and the muffling of warning signals in a way unimaginable in our information age. The rise in prices was obvious to all. That it was due to more than wartime shortages was not. The country's stock markets were closed for the duration of the fighting. Foreign-exchange rates were not published.

And then there were the black swans. Early 20th-century Germany was savaged by a flock, including defeat in what was then the world's most destructive war, revolution, civil unrest, territorial loss, the imposition of punitive reparations, a fresh occupation of its industrial heartland and, as if these woes were not enough, a Reichsbank presided over by Rudolf Havenstein. Even in the era of Zimbabwe's Gideon Gono, Havenstein must be considered a strong contender for the title of worst central banker of all time. There seemed to be no limit to the amount of currency he was willing to print. Yes, America has its problems today, but by comparison . . .

"When Money Dies" was written in the early 1970s for a British audience. Inflation was accelerating fast, and London's political class was at a loss about what to do. Mr. Fergusson's book (which began as a series of newspaper articles) reflected the growing national alarm over inflation and hinted that price stability would not be won back without more focus on the quantity of money in circulation. With monetarist ideas just beginning to enter mainstream British political discourse, the Havenstein of "When Money Dies"—a printing-press banker supposedly unaware of the connection between soaring inflation and roaring money supply—made a useful villain.

Yet in all probability his behavior owed as much to desperation as ignorance. Mass unemployment seemed more of a threat to Weimar's dangerously fragile social order than rising prices. Devaluation was the other side of Germany's debased coin. It kept the country's exports competitive and its factories (given an extra boost by generous subsidy regimes) humming.

But in the end the music stopped. Without a reliable pricing mechanism, much of the German economy eventually ceased to function, even at the most basic level. Rent was payable in butter, a ticket to the movies with a lump of coal. Farmers stopped sending food to the cities. Under such circumstances the harsh medicine of monetary reform (the return to a fixed parity against gold and the dollar, the imposition of strict budgetary discipline) found the political support it needed despite the pain it was bound to bring to German industry and its work force.

And so, in November 1923, a new quasi-currency, the Rentenmark, was launched. Its asset backing was little more than a conjuring trick, but with the population desperate to believe (and with the Reichsbank no longer financing the government) the magic worked. Despite the rickety nature of the recovery that eventually ensued, Germany might have arrived at a lasting turning point had not black swans—the Great Crash and a global depression—returned to bedevil its future once again.

Readers of Mr. Fergusson's melancholy chronicle can comfort themselves with the thought: That was then, and this is now. "When Money Dies" cannot be used to prove that the combination of rising deficits and the modern money manufacture euphemized as "Quantitative Easing" can only end up in near-apocalyptic disaster. (In a note to this new edition, Mr. Fergusson, who subsequently became a Conservative member of the European Parliament in the early Thatcher years, stresses that no "advanced economy is threatened with inflation approaching such severity as in post-Imperial Germany.") Nevertheless, to borrow his adjective, the book is a "sobering" warning of what could go wrong.

His examination of both the seductions of inflation and its devastatingly corrosive effect is merciless and horrifying. Most haunting are the depictions of those broken on inflation's wheel, the workers without a union to protect them, the retired trying to live on pensions that had lost all meaning, the once-proud bourgeois after the annihilation of their savings. A nation can recover from hyperinflation, but for these people time had run out. Everybody ought to read this book. But baby boomers must.

Twentieth-Century Ghost

Metropolis

National Review Online, June 4, 2010 

To H. G. Wells, it was the “silliest film,” a “soupy whirlpool” and a “pretentious stew.” Yet on a Saturday night in Manhattan this May, 84 years after Metropolis was shot, the line to see Fritz Lang’s legendary sci-fi drama stretched halfway down the block. To be fair to Wells, the version of the movie he saw had been hacked down from an initial running time of 153 minutes to around an hour and a half in a counterproductive attempt to make its plot more comprehensible. He would probably not, however, have been much more impressed had he attended Metropolis’s January 1927 premiere. “The whole of Berlin” may have turned up to witness 153 minutes of a film intended to take German cinema to a whole new level, but by the end of those minutes much of Berlin was left thoroughly confused.

The managers of Germany’s UFA studios, the unfortunates who had spent nearly a year and a budget-busting 5 million reichsmarks (perhaps some $200 million today) on making Metropolis clearly knew that they had a problem on their hands even before their film was released and they marketed it as much as spectacle as cinema. A spread in the UFA magazine highlighted some of the movie’s vital (if not necessarily accurate) statistics: Seven hundred fifty children had, the publicists claimed, been used in the film’s making, along with “1,100 bald people, 100 Blacks, 25 Chinese, 3,500 pairs of shoes, 75 wigs” and, well, you get the picture. With 36,000 extras, how bad could Metropolis be? There was a tie-in novel by Lang’s wife, Thea von Harbou, that is, if anything, even more chaotic than the film, an overwrought mélange of pulp fiction, millennial raving, and begging-for-straitjacket hysteria that its author, at least, believed to have been art. Do not read it. I beg you.

UFA was not wrong. As story, Metropolis is a mess; as spectacle, it is superb, a glorious, oneiric depiction of a future urban dystopia (it’s set in 2026), part hive, part Manhattan, part megalopolis-of-the-future wow, and the inspiration for decades of cinematic cityscapes of not-yets to come, all the way from Just Imagine, a Depression-era musical comedy set in 1980, to Blade Runner, to the sadly underrated Dark City, to the sadly overrated Matrix trilogy. In a film where many characters fail to convince (the most striking exception to this is, tellingly, a robot), it is the city itself that is, like the Metropolis-influenced Gotham of the revived Batman franchise, the star.

But the future has a way of taking prophets by surprise. Within months of Metropolis’s opening, The Jazz Singer was released. This somewhat old-fashioned tale of a cantor’s son who performed in blackface heralded a technological change that was to drown out Lang’s suddenly dated depiction of modernity. Lang’s silent movie had been dumbed down overnight, its special effects eclipsed by the miracle of Vitaphone.

Metropolis faded from view. Its memory lingered, at least in cineaste lore, but the full breadth of Lang’s vision appeared to have vanished for good. All, it seemed, that remained was an abbreviation, a collection of truncated relics reasonably close to the bewildering 90 minutes of the international release. As for the rest, well, like the Weimar Berlin in which Metropolis had been filmed, it seemed to have been consigned to history.

Then something changed. As Europeans emerged from the devastation of 1939–45, the rebuilding of their ruined cities evolved into projects more ambitious than the hasty patchwork repair of the immediate post-war years. Historic town centers were painstakingly restored in an attempt to retrieve, reconnect, and sometimes reimagine the brutally shattered past. The same impulses can be detected in the reconstruction of Metropolis. It was an effort that gathered pace in the 1960s, and included a longer restoration put together by the East German state Film Archive (1968–72), disco guru Giorgio Moroder’s controversial 1984 appropriation  (shorter, but with color tinting and a classically 1980s soundtrack), and, after years of restoration work by Enno Patalas, the director of Munich’s film museum, the “Munich” Metropolis of 1987.

That’s not the end of the story. Using the Munich version as their core, and scrounging up every additional scrap of footage they could find, a team of restorers was able to assemble the “definitive” (124 minute) Metropolis issued in this country in 2002 on a fine DVD by Kino International. And that was meant to be that.

“Definitive” is a dangerous word. Six years after the Kino release, a 16mm copy of Lang’s epic was located in the archives of the film museum in, of all places, Buenos Aires. The footage was scratched, grubby, and the wrong size (16mm rather than 35mm), but it was as close to the original length as anyone could ever have hoped. Two years of restoration work followed as sections of the Argentine find were woven into the earlier definitive version filling in nearly all the missing links. Even after restoration, they are not perfect, but in their misty, messy way they are an evocative reminder of the time passed since the footage was shot and lost. The resulting patchwork—147 minutes long—comes as close to what was shown that long-ago night in Berlin as, probably, anything we are ever likely to see.

Fittingly enough, the new reunited Metropolis premiered earlier this year in the reunited Berlin that had too once seemed like an impossible dream. The movie arrived in the United States in April, debuting—where else—at Grauman’s Chinese Theatre. By May, it had made its way to New York City (the night I saw it, the film was introduced by the endearingly modest director of the Buenos Aires museum) and will, doubtless, once again become a regular on the art-house circuit. A DVD is not far behind.

Gaps have been filled, and subplots added. With the additions, the film makes a bit more sense than before. A bit. Metropolis remains a city where the economics fail (as Wells pointed out) to hang together, and its supposedly sophisticated machines are oddly clumsy, closer to treadmills than agents of production. Meanwhile, the Bildungsroman that lies at the movie’s heart, the awakening of the son of the city’s presiding genius to the injustice and oppression that are the essence of Metropolis, is muddied by apocalyptic mysticism, suggestions of magic, and a psychologically fraught love story involving the son, his father, his dead mother, a mad scientist, the holy Madonna-like Maria, and Futura, her disturbing “machine woman” robot doppelganger. The conclusion is as sappy as it is unconvincing, a sentimental submission to some sort of organic unity between all classes that helps explain why Goebbels was a fan (interestingly, Thea von Harbou later became a Nazi), but didn’t do much for me.

But not to worry—dazzlingly shot, frantically kinetic, and brilliantly edited, this is a film that can be enjoyed for its imagery alone, from the remarkable shots of Metropolis, to the portrayal of the flood that all but sweeps the city away, to the most famous sequence of all, the coming to life of the robot, a gorgeous deco goddess encircled by electric halos as she gradually assumes the form of the virginal Maria to become the whore—complete at one moment with Babylonian headgear—who will seduce the city into erotic and then self-destructive frenzy. Oh yes, a monk is also involved, and statues of the seven deadly sins come to life.

No wonder Wells, whose science-fiction vision was shortly to shift to an enlightened “air dictatorship” (Things to Come) run by clean-limbed flyboys in jackboots, disapproved, but then, for all its status as one of the first great sci-fi films, Metropolis was in reality something very different. It was not so much an anticipation of the future as a reflection of its own epoch. The greatest science-fiction movies, 2001, Blade Runner, the Soviet Solaris, are in many respects beyond their time — beyond any time. Any dates they include are there just for decoration. Not so with Metropolis. By setting the film in 2026, exactly a century after it was shot, Lang was guiding the audience back to their own time, an impression only reinforced by the costumes worn by the cast — and even the cars. “1926 models or earlier,” sniffed Wells. The notorious scenes shot in and around the Yoshiwara nightclub district conjure up images not of some 21st-century pleasure dome, but of the wicked delights of Weimar at its exuberant, brittle peak.

For Lang was making his movie during the brief interlude when it seemed as if Germany’s fragile democracy might survive, a fact that might have influenced the film’s message of reconciliation between the lower city’s (the proletariat lives a subterranean existence) crushed and regimented workers and those who — in all senses — lived above them. At the same time, to watch the sequences when the mob careens behind Maria/Futura, a pied piper bewitching them into a riot that can only lead to their doom, is to witness the anxieties of an era (less than ten years after the Bolshevik Revolution) all too conscious of where the failure to narrow too wide a gap between labor and capital might lead and, for that matter, of just how dangerously malleable the masses could be.

Within a few years, of course, Germany had found its pied piper, and the consequences of the lethal dance in which he led his people cannot help but shape how we view this film today. The horrors anticipated by Lang’s images of shaven-headed workers marching into the fiery maw of the machine-god Moloch are too obvious to need explanation, but the plight of the children trapped by the floodwaters rising in Metropolis’s underground city also seems like an uncanny foreshadowing of another tragedy, the fate of the thousands drowned when Hitler ordered the flooding of the Berlin subway system in April 1945. Even looking at the cast, one cannot help but wonder how many of those 36,000 extras, or the 750 children — in their twenties by the time of the war — were to perish in the course of Hitler’s rule, whether as victims, perpetrators, or, sometimes, both. As for Lang, Roman Catholic of partly Jewish descent, he rejected what he claimed was Goebbels’s invitation of a senior position within the Reich’s movie industry and decamped for France and thence to the United States and a second, Hollywood, career, leaving Metropolis behind him. It was lost, he later said.

But sometimes Atlantis can rise again.

The ‘Beneficial Crisis’

The Weekly Standard, May 31, 2010

It would have taken a heart of stone not to laugh. Wheeled out earlier this month for celebrations to mark his 80th birthday, a rickety Helmut Kohl announced that the fate of the EU’s floundering single currency was a matter of life and death: “European unification is a question of war and peace .  .  . and the euro is part of our guarantee of peace.”

The former chancellor’s dire warning might have been a touch more persuasive had it not been repeated quite so many times before. To take just one example, in the course of Sweden’s 2003 referendum on whether to sign up for the euro, a “weeping” Kohl told the Swedish premier that he did not want his sons to die in a third world war. A reasonable ambition, but hardly the strongest of arguments for junking the krona. Sensible folk that they are, the Swedes voted nej and are all the better for it today.

Panzers will not roll in the event of a euro collapse, but that doesn’t mean there isn’t a decent case to be made for the $1 trillion (actually $937 billion at the time of writing, but who’s counting?) support package for the EU’s single currency union announced on May 10. The growing financial panic triggered by Greece’s economic woes was metastasizing into a crisis of confidence in the eurozone’s southern and western rim—the now notorious PIIGS (Portugal, Italy, Ireland, Greece, Spain)—a development that threatened ruin for much of the EU’s fragile banking sector and the shattering of any hopes of European economic recovery. After a dangerous delay caused by German hostility to the idea of bankrolling the Greeks, a 110 billion euro ($137 billion) EU/IMF bailout of the Augean state had been agreed. But it came too late to head off the financial markets’ mounting unease.

Financial panics are best dissipated by a swift, decisive, and dramatic response that signals that a believable lender of last resort has arrived on the scene. This is why, for all its faults, TARP worked. Uncle Sam had rolled into town. There would be no need after all to storm the ATMs.

Jittery Europeans have had to make do with considerably less reassurance. The eurozone lacks the characteristics and resources of a unified nation. It is a hodgepodge of pacts—some observed, some not—whispered understandings, cultivated ambiguities, and clashing interests that does little to inspire confidence. The nearest it comes to a plausible lender of last resort is Germany, historically the EU’s most generous paymaster—a real nation, with real wealth but, awkwardly, real voters too.

Those voters have been up in arms at the thought of helping out Greece. This was the real reason that German chancellor Angela Merkel dithered so long before coming to Athens’s aid. She was right to be worried. Within a day or so of the Greek bailout, her governing coalition was thrashed in regional elections in North Rhine-Westphalia, Germany’s most populous state.

Something spectacular had to be done. And if $1 trillion isn’t spectacular I don’t know what is. The support package that finally emerged on May 10 falls into three main parts. The largest is the creation of a “temporary” (three-year) special purpose financing vehicle. This is authorized to borrow up to 440 billion euros ($550 billion) to fund or guarantee loans to member states who find themselves being frozen out of the capital markets. On top of this, there will be a 60 billion euro  ($75 billion) “rapid reaction” facility operated by the EU Commission and designed to help any eurozone country facing an immediate cash crunch. Oh yes, the IMF agreed to throw another 250 billion euros ($312 billion) into the kitty.

But, wait, there’s more. To make sure that struggling European financial institutions are not starved of dollars, a number of the world’s major central banks, including the European Central Bank (ECB) and the Fed, revived the emergency currency swap agreements put in place in late 2007. The ECB then topped up the punch bowl by commencing to purchase government debt from the PIIGS, a move explained by the need to move fast (it will be a while before the full support package can be put in place), but which opened the ECB to the charge that it had been reduced to printing money (“quantitative easing” is the preferred euphemism). The ECB denies this, saying the bond purchases are being “sterilized” by other maneuvers draining the excess liquidity the purchases create.

International investors feted the support package for all of one day. Then they recognized that, as Merkel conceded, it had “done nothing more than buy time.” The rot within the eurozone continues to fester. As for claims that this was all the fault of the wicked speculators of Wall Street and the City of London (a tiresome cry from the EU’s leadership in recent months that reached a new crescendo last week), well, that’s like blaming the canary for the gas in the coal mine.

The Greeks, Portuguese, and Spanish have all announced new austerity measures, but, even if we make the optimistic assumption that the recent riots in Greece will be the exception rather than the rule, these steps are unlikely to be enough to bring this story to happy ever after. Piled on top of existing budget cuts, the fresh rounds of slashing and taxing run the risk of crushing what’s left of domestic demand and with it an essential element in these countries’ ability to generate the additional tax revenues their treasuries so badly need. The usual remedy for such a predicament is devaluation and an export-led recovery, but with the PIIGS yoked to the euro that option is not available. The euro may be weakening against currencies outside the zone, but against their competitors within, the PIIGS are as uncompetitive as always.

It’s not easy to unscramble an egg. For one of the PIIGS to quit the euro would almost certainly mean both default on its public debt and the bankruptcy of wide swaths of its private sector. The domino effect across the rest of the continent, and beyond, would be appalling. Another, more promising, alternative, albeit one freighted with severe technical and practical risks of its own, would be for a German-led group to depart the euro and form a separate “hard currency” union of its own, leaving the PIIGS with the deeply depreciated (down perhaps 30-40 percent) euros they so obviously need. This would be tough on the PIIGS’ unfortunate creditors, but there would be a chance that default, and all its attendant dangers, could be sidestepped.

Yet no such alternative is on the menu. In confronting the hole into which joining the euro has dropped them, the eurozone’s leaders seem determined to dig ever deeper. We can debate their rationale, in all probability a mix of cowardice, conviction, careerism, and delusion, but not the likelihood of the conclusion to which they will come. Speaking in Aachen—the burial place of Charlemagne, an early Eurocrat—on May 13, Merkel made clear that she was still drinking the Kohl-Aid: “If the euro fails,” she warned, “Europe fails too, [and so does] the idea of European unification. We have a common currency, but no common political and economic union. And this is exactly what we must change. To achieve this, therein lies the opportunity of this crisis.”

Long before Rahm Emanuel’s infamous dictum, the idea of a “beneficial crisis” (to borrow the terminology of Jacques Delors, a former president of the EU Commission) was common in Brussels. Indeed, there is evidence to suggest that some smarter Eurocrats saw the flaws in the way that the euro had been set up as a feature, not a bug. The crisis to come would create the conditions in which the nations of the EU could be persuaded to submit to further federation.

On May 12, the current president of the EU Commission, José Manuel Barroso, argued that “member states should have the courage to say if they want an economic union or not. Because without it, monetary union is not possible.” The commission’s proposals include greater macroeconomic supervision, increased emphasis on deficit reduction, and the establishment of a permanent emergency financing mechanism. The most controversial idea is the suggestion EU governments submit their national budgets for review by their counterparts within the union before presenting them to their own parliaments. Whether this review would be merely advisory or carries a veto power has been left conveniently vague.

Barroso also wants a more punitive regime imposed on governments that persist in breaking the budgetary rules that supposedly underpin the euro. There are limits, however. The commission did not back Merkel’s call for provision to be made to allow the eurozone’s more persistent reprobates to be expelled from the currency union. Permitting such a procedure, even in theory, would imply that the grand European project could sometimes go into reverse, and that would never do.

Most of these measures will edge forward at best. Not all member states are enthusiastic about the push for what Herman Van Rompuy, the president of the EU’s council, has referred to as a European “gouvernement économique,” an elastic term capable of, in Van Rompuy’s sinuous prose, “asymmetric translation” in different languages, from the comparatively nebulous English “governance” to something altogether more concrete.

But, if some governments are not enthusiastic, it’s difficult to see what else they can do—unless they are prepared to quit the eurozone. And they are even less enthusiastic about that.

The next stage of this drama ought to have been something of an anticlimax as nerves were soothed by that calming trillion. Instead, Merkel sent markets sliding by imposing, amongst other measures, a “temporary” ban in Germany on “naked” short selling (selling securities that you do not own and have not made arrangements to borrow) of eurozone government bonds and the stocks of some of her country’s leading financial institutions. This was accompanied by promises of further regulation and yet more railing against speculators, “out-of-control” markets, and banks.

The message sent by the new rules was grim. And it was received. By playing the populist card, Merkel had highlighted the extent of the political problems she faces back home. That’s not what investors wanted to hear. Some also fretted that the new restrictions were a hint that the finances of Germany’s banking sector were even worse than feared.

So, what’s next? Predicting short-term currency movements at a time like this is a mug’s game. I’ll just stick with the word “choppy” and the belief that a trillion dollars ought to buy the euro some time. It won’t be a huge surprise if some of that time—and some of that money—is eventually used to smooth the increasingly inevitable “restructuring” of Greek, and possibly Portuguese, sovereign debt. Nevertheless that will not be the end of the matter. A trillion dollar band-aid is still a band-aid. This spring’s crisis has demonstrated that the existing system cannot survive as it stands.

To succeed, a monetary union the size of the eurozone needs a high degree of central control, consistent and enforceable budgetary discipline, and spending (and thus taxing) powers sufficient to ensure that the cyclical imbalances in its constituent parts can be evened out. That reality has now essentially been accepted by the German and the French governments. Although negotiating the details of common economic governance will drag on for years, in the end the French and the Germans will, despite some truly fundamental differences, get there—and they won’t be alone. Faced with the prospect of being excluded from the EU’s tightening core, more countries than might now be imagined will choose to jump in notwithstanding its tougher disciplinary regime. While today’s “two-speed” union will continue to exist, the division will deepen, and on one side of it there will be something that looks suspiciously like a European superstate.

The financial markets could still disrupt this transition, which is one reason that the EU’s leadership is so keen to rein them in. Trouble may also come from a group often ignored in the saga of “ever closer” union—the electorates of Europe.

One of the more telling characteristics of the EU’s progress is the way it has been forced through regardless of the wishes of ordinary voters. The “reuniting” of Europe has been a project of the elites, the fruit of mandarin cabal and backroom deal. Voters have rarely been given much of an opportunity to demur. And when they have been asked their opinion and called for a halt to further integration, the results have been ignored or subjected to do-over until the “right” result came through.

That’s not to claim that Europe’s mainland is seething with euroskepticism. It’s not. There is, however, widespread apathy and a profound alienation. As the voters of North Rhine-Westphalia have just reminded us, there’s not a lot of fellow-feeling in that imaginary European family.

This might have mattered less in economically more comfortable times, or in the times when Brussels was not stretching so far, blithe times when voters (foolishly) and Eurocrats (realistically) could, for the most part, pretend that the other did not exist. That’s over now. Building an economic union is messy and intrusive. It’ll be hard to slip it through on the quiet. The PIIGS are being ordered to take a long hard road. The peoples of Northern Europe will be told to pay for its paving.

What if either says no?

Do Mention the War

The Weekly Standard, March 8, 2010

Tolstoy was wrong. Every unhappy family is not unhappy in its own way. Scratch the surface of a foundering relationship, and you’ll often find that money is, if not the sole source of the misery, undeniably the most poisonous. This is certainly true within the “ever closer” family that the European Union is meant to be. Some of the EU’s most savage fights have been about cash, an awkward fact that can equally be read as underlining just how far from familial this most unnatural of unions really is. The different nations of the EU remain, emotionally at least, nations. They continue to be foreign to each other. And who wants to give their money to a bunch of foreigners?

So it shouldn’t be any surprise that Germans are infuriated at the thought of having to stump up for a rescue of Greece’s Augean state. Their own economy is faltering. They have held back labor costs for years. They have, often painfully, maintained budgetary discipline. That’s not the way it’s been in Greece. With Greek government debt at 125 percent of GDP, a budget deficit of 12.7 percent, and distinctly shaky public support for any sort of austerity program, there is little, beyond beaches, about that country to appeal to citizens of the thrifty Bundesrepublik. Opinion polls show that over two-thirds of Germans reject the idea of contributing to a Greek bailout, and the venom with which that opposition is expressed suggests that exasperation has drifted into contempt.

To give more money to the Greeks would be akin to giving schnapps to an alcoholic, argued Frank Schaeffler, deputy finance spokesman for the Free Democrats, the junior partner in Germany’s governing coalition. Focus magazine ran a cover story on “The Fraudster in the Euro-Family” (a reference to the more creative aspects of the Greek government’s accounting) and illustrated it with the Venus de Milo, one-armed and flipping the bird. The tabloid Bild raged at the “proud, cheating, profligate” Greeks. A writer for the rather more heavyweight Frankfurter Allgemeine Zeitung asked whether Germans should have to retire at 69 rather than 67 to pay for Greek workers striking against proposals to increase their retirement age from 61 to 63. The mood in Germany was not improved by Greece’s deputy prime minister. Stung by all the criticism of his country, he grumbled that, having made off with Greece’s gold during the war, the Germans were in no position to complain “about stealing and not being very specific about economic dealings.”

Germany has long paid the largest share (currently around 20 percent) of the cost of Europe’s trudge towards union. Its annual payments into the EU now exceed what it gets back by over $10 billion. In part this has been viewed as a fair price for Germany’s readmission into polite society. It was also an expression of the once widespread belief—deluded if understandable—among Germany’s political class that an ersatz European patriotism could take the place of the German nationalism that had turned out so unfortunately just a few years before. Over six decades after Hitler perished in his bunker, however, these arguments are running a little thin.

Making matters worse is the debt (in all senses) that the Greek crisis owes to the establishment of the euro, the single currency for which German politicians ignored their voters and junked the deutsche mark in a two-stage process ending in January 2002. The deutsche mark had been one of the great successes of postwar Germany, a symbol of renewed prosperity and bulwark against any return of the hyperinflation that stalks that country’s historical memory. But, to those that counted—i.e., not German voters—the European Union mattered more. The deutsche mark perished, and the economic and budgetary rules—the Maastricht Criteria—designed to preserve the integrity of its successor (and reassure the twitchy German electorate) have not been kept in much better shape.

The new currency proved both an enabler of Greece’s profligacy and an agent of its economic troubles—a double whammy not confined to Greece. From the first, the euro’s interest rates were primarily determined by economic conditions in the eurozone’s core—Germany, the Benelux, and France—which meant that rates were too low for the nations on the periphery. One size did not fit all. The low interest rates fueled inflation, speculative bubbles, and, in some cases, excessive government borrowing in Portugal, Ireland, Greece, and Spain, the four “PIGS” in the financial markets’ insulting jargon. (You’re welcome to throw in another I for Italy.) The usual response to disruptions of this nature is devaluation. Signing up for a single currency, however, has removed that option.

Despite German voters’ hopes, this mess cannot safely be confined within the PIIGS’ sties. Drastic austerity programs by the debt-struck might in theory do the trick—although the wisdom of this is debatable at a time of deeply depressed domestic demand—but to succeed they require a degree of consent. Consent, however, is not the message that all those Greek strikes are delivering. So far, Brussels appears to be resting its hopes on the idea that talk of austerity, promises of support, and the prospect of closer economic supervision will be enough to persuade markets to keep funding the PIIGS’ budget deficits. Greece will for now be the sharpest test of that idea, but ultimately the country will not be allowed to fail. Even if it did not destroy confidence in the surviving PIIGS, a Greek collapse would, just as a start, trigger mark-to-market downgrades across the battered balance sheets of Europe’s largest financial institutions. German banks, for instance, have loaned the equivalent of 20 percent of their country’s GDP to the PIIGS, and their French counterparts even more.

Throwing Greece out of the eurozone might be emotionally satisfying (over half of German voters are in favor, though it probably isn’t even legally possible), but inevitably the result, pushing the country into default, would achieve nothing constructive. What would make sense is for Germany and the other countries at the eurozone’s core to abandon the currency. The euro would slump, giving the nations that still use it the devaluation they so badly need. But that’s not going to happen either. The European elites have sunk too much political capital into the single currency to give it up now. They will plough forward regardless of the current crisis. If the logic of that course provides the rationale, or at least an excuse, for the even deeper EU integration that most European voters do not want, then so much the better.

But the opinions of the electorate no longer count for that much anywhere within the EU. With feelings running as they are in her country, Chancellor Angela Merkel has to be seen to be talking tough and doing everything she can to avoid Germany being stuck with the Greeks’ bills. At one level she may mean it, but she knows it is just theater. Merkel will huff and Merkel will puff, but she will not risk bringing down what is left of Athens’s ruins. If a rescue party has to be put together, Germany will be a prominent part of it.

To be fair, it’s not all bad news for Germany. If Greece is indeed bailed out by some or all of its EU partners, the longer-term impact will be both to weaken the euro (which will help Germany’s important export sector) and, by preserving the eurozone as it is, keep many of Germany’s competitors within the eurozone most helpfully hobbled. The combination of higher levels of cost inflation, lower levels of efficiency, and a shared, hard currency has eroded much of the price advantage that was once the main selling point for the industries of Europe’s less-advanced economies. It is estimated that the PIIGS would have to devalue by more than 30 percent to restore their competitive position against Germany, a situation that is only going to get worse.

Like so much to do with Brussels’s strange imperium, this story is a lot less straightforward than it first appears.