Dirk Laabs in The Guardian
Every drama needs a great baddie, and in the latest act of the Greek crisis Wolfgang Schäuble, the 72-year-old German finance minister, has emerged as the standout villain: critics see him as a ruthless technocrat who strong-armed an entire country and now plans to strip it of its assets. One part of the bailout deal in particular has scandalised many Europeans: the proposed creation of a fund designated to cherrypick €50bn (£35bn) worth of Greek public assets and privatise them to pay the country’s debts. But the key to understanding Germany’s strategy is that for Schäuble there is nothing new about any of this.
It was 25 years ago, during the summer of 1990, that Schäuble led the West German delegation negotiating the terms of the unification with formerly communist East Germany. A doctor of law, he was West Germany’s interior minister and one of Chancellor Helmut Kohl’s closest advisers, the go-to guy whenever things got tricky.
The situation in the former GDR was not too dissimilar from that in Greece when Syriza swept to power: East Germans had just held their first free elections in history, only months after the Berlin Wall fell, and some of the delegates from East Berlin dreamed of a new political system, a “third way” between the west’s market economy and the east’s socialist system – while also having no idea how to pay the bills anymore.
The West Germans, on the other side of the table, had the momentum, the money and a plan: everything the state of East Germany owned was to be absorbed by the West German system and then quickly sold to private investors to recoup some of the money East Germany would need in the coming years. In other words: Schäuble and his team wanted collateral.
At that time almost every former communist company, shop or petrol station was owned by the Treuhand, or trust agency – an institution originally thought up by a handful of East German dissidents to stop state-run firms from being sold to West German banks and companies by corrupt communist cadres. The Treuhand’s mission: to turn all the big conglomerates, companies and tiny shops into private firms, so they could be part of a market economy.
Schäuble and his team didn’t care that the dissidents had planned to hand out shares of companies to the East Germans, issued by the Treuhand – a concept that incidentally led to the rise of the oligarchs in Russia. But they liked the idea of a trust fund because it operated outside the government: while technically overseen by the finance ministry, it was publicly perceived as an independent agency. Even before Germany merged into a single state in October 1990, the Treuhand was firmly in West German hands.
Their aim was to privatise as many companies as possible, as soon as possible – and if you were to ask most Germans about the Treuhand today they would say it achieved that objective. It didn’t do so in a way that was popular with the people of East Germany, where the Treuhand quickly became known as the ugly face of capitalism. It did a horrible job in explaining the transformation to shellshocked East Germans who felt overpowered by this strange new agency. To make matters worse, the Treuhand became a hotbed of corruption.
The agency took all the blame for the bleak situation in East Germany. Kohl and Schäuble’s party, the conservative CDU, was re-elected for years to come, while others paid the price: one of the Treuhand’s presidents, Detlev Karsten Rohwedder, was shot and killed by leftwing terrorists. (Schäuble too became the victim of an attack that left him permanently in a wheelchair, only days after German reunification – but his paranoid attacker’s motives were unrelated to the political events)
But the reality of what the Treuhand did is different from the popular perception – and that should be a warning for both Schäuble and the rest of Europe. Selling East Germany’s assets for maximum profit turned out to be more difficult than imagined. Almost all assets of real value – the banks, the energy sector – had already been snapped up by West German companies. Within days of the introduction of the West German mark, the economy in the east completely broke down. Like Greece, it required a massive bailout programme organised by Schäuble’s government, but in secret: they set aside 100bn marks (£35bn) to keep the old East German economy afloat, a figure that became public only years later.
With prices for labour and supplies going through the roof, the already stressed East Germany economy went into freefall and the Treuhand had no chance to sell many of its businesses. After a couple of months it started to close down entire companies, firing thousands of workers. In the end the Treuhand didn’t make any money for the German government at all: it took in a mere €34bn for all the companies in the east combined, losing €105bn.
Wolfgang Schäuble led the West German delegation negotiating the terms of the unification with formerly communist East Germany. Photograph: Lionel Cironneau/AP
In reality, the Treuhand became not just a tool for privatisation but a quasi-socialist holding company. It lost billions of marks because it went on paying the wages of many workers in the east and kept some unviable factories alive – a positive aspect usually drowned out in the vilifications of the agency. Because Kohl and, during the summer of 1990, Schäuble weren’t Chicago economists keen on radical experiments but politicians who wanted to be re-elected, they pumped millions into a failing economy. This is where parallels with Greece end: there were political limits to the austerity a government could impose on its own people.
The lesson Schäuble learned – and which is likely to influence his decision-making now – is that if you act the pure-hearted neoliberal you can still get away with decisions that don’t make perfect economic sense. If Schäuble is acting tough with Greece right now, it is because his electorate wants him to act that way; it’s not just that he doesn’t care about the Greek people, he wants people to believe he doesn’t care, because he sees the political advantage in it.
But Schäuble should have learned from history that the Treuhand gamble had catastrophic psychological consequences. Even though the agency was run by Germans, who spoke German, still it was seen by many in the east as an occupying force.
Schäuble’s idea of foreign countries controlling Greek assets and moving them abroad is an even more humiliating concept for any country. Schäuble comes across as a tough and sober accountant. In fact he is just an ordinary politician repeating old mistakes.
Robert Fisk in The Independent
Hitler set a bad example. He was evil. His regime was evil. His Reich was destroyed, the Nazis vanquished, the Fuhrer dying by his own hand in the ashes of the European nightmare. Bad guys lose. Good guys win. Morality, human rights, law, democracy – though with the latter, we should perhaps speak carefully – will always prevail over wickedness. That’s what the Second World War taught us.
We have grown up in a Western society that believes in such simple, dodgy, history lessons. The world’s major religions teach us about goodness, humility, family, love, faith. So why should we not – however liberal, agnostic, cynical – cling on to our fundamental belief that violence and torture and cruelty will never outlast the power and courage of the righteous?
Isis is evil. It massacres its opponents, slaughters civilians, beheads the innocent, rapes children and enslaves women. It is “apocalyptic”, according to the Americans, and therefore it is doomed. Better still, Ash Carter – the US Secretary of Defence who accused the Iraqis of running away from Isis – lectured the Iraqi Prime Minister last week. His message – I could hardly believe this naivety – was Hollywood-clear. “Civilisation always wins over barbarism.”
But does it? We only have to go back to the lie about the Second World War in my first sentence. Sure, Hitler lost. But our ally Stalin won. The 1917 Russian Revolution gave rise to one of the Gorgons of our age: Soviet dictatorship, the mass starvation leading the to death of millions, barbarism – on an Ash Carter scale – and evil incarnate ruled in Russia and Eastern Europe for more than 70 years, 40 of them after the Second World War.
The Romans kept “barbarism” at bay for almost a thousand years, but in the end the Goths, Ostrogoths and Visigoths – the Isis of their time – won. Unless you were opposed to Rome, in which case Roman barbarism – crucifixion, slavery, torture, massacre (the whole Isis gamut minus the videotapes) – was victorious for almost a thousand years.
Attila the Hun, the Scourge of God, destroyed almost everything between Persia and the Mediterranean. Ghengis Khan, an inevitable actor in this sordid drama, kept going until his death in 1227 – 30 years longer than Isis has so far ruled. His grandson Hulagu was invoked by General Angus Maude when he “liberated” Baghdad in 1917 and brought “civilisation” to Mesopotamia. Ash Carter should read Maude’s proclamation to the people of Baghdad: “Since the days of Hulagu, your citizens have been subject to the tyranny of strangers, your palaces have fallen into ruins, your gardens have sunken in desolation and your forefathers and yourselves have groaned in bondage.” Pretty much like Isis, in other words. But, by Maude’s count, this “tyranny” lasted for around 700 years.
Now let’s go forward to the years immediately after we brought “civilisation” – again – to Baghdad, by illegally invading Iraq in 2003. Between daily trips to the city mortuary and visits to tents of mourning, angry families would tell us that the “freedom” we brought had given them anarchy. They hated the dictator Saddam who slaughtered his opponents – and who imposed 24 years of “barbarism” on his people – but at least he gave them security. If you have children, these people would tell us, you want them to come home from school. You do not want them to be murdered. So which do we prefer, they asked us? Freedom or security? Democracy or Saddam?
Fearful of the Shia-dominated Iraqi government, whose militias slaughtered them, and the corrupt Arab dictatorships, who suppressed them, many hundreds of thousands of Sunni Muslims appear to have found security under Isis. Not the Shias, nor the Christians, nor the Yazidis. There is no “freedom”, as we would call it. But Sunni Iraqi men in Beirut, for example, regularly travel to and from the Isis Syrian capital Raqqa and report that – provided they don’t smoke or drink alcohol, their women are covered, and they do not oppose Isis – they are left alone: to do business, to visit families, to travel in safety. (Much the same applied under the Taliban in Afghanistan.)
ID cards are issued in Isis-land, the river police have newly-painted boats, taxes are raised, and yes, punishment is barbarous. But that does not mean the “Islamic Caliphate” is going to be conquered by “civilisation”.
And how can we believe that it will, when our own public-relations boss raves on about “British values” – and at the same time worships the venal, hypocritical, immensely wealthy and dangerous men who have helped to inspire Isis. I refer, of course, to those Saudis whose crazed Sunni Wahhabist cult has encouraged Isis, whose grotesque puritanism has led them to adopt a head-chopping extremism, which lies at the heart of Isis’s own “barbarism”. Sure, the Saudi state arrests Isis cells. But these same Saudis are now killing thousands of Shia Houthis in Yemen in a bombing campaign supported by our Western nations. And what does David Cameron do when the desiccated old king of this weird state dies? Money talks louder than “civilisation”. So he orders that British flags should be flown at half-mast. Now that’s what I call British values!
Poor old Dave. He loathes Isis but adores one of its elderly “facilitators”. Yet fear not. “Civilisation” may yet win over “barbarism”. My own suspicion is that Ash, Dave and the rest will try to buy up Isis, split them into factions and choose the “moderates” among them. Then we’ll have a new, liberal Isis – people we can do business with, the sort of chaps we can get along with, sins forgotten – and we can then establish relations with them as cosy as those the Americans maintained with Hitler’s murderous rocket scientists after “civilisation” conquered “barbarism” in the Second World War.
So much for “civilisation”.
Simon Kelner in The Independent
When he narrows his eyes and stares into the camera, there is something of Jose Mourhino about Jeremy Corbyn. “The Special One” of Labour’s left wing may be a bit older and have less of a confident swagger, but he has the tousled grey hair, the deep-set eyes and the craggy, unshaven look of the all-conquering Chelsea manager.
There the similarity may end, because Corbyn is not a natural born winner. It is true that he has lived much of his political life on the fringes of the Labour Party, the vocal champion of special interest groups like the Palestinian Solidarity Campaign, Amnesty International and the Campaign for Nuclear Disarmament.
He’s never played in the Premier League of politics, and the sense is that he rather enjoyed his position as something of a provocateur, a man who, when the occasion demanded, could act as Labour’s conscience, reminding his colleagues that this is the party that should look after the poor and the disadvantaged, not the rich and the privileged.
He’s “a romantic idiot who wants high taxes”, according to Labour peer Lord Sewel, although the opinion of a 69-year-old man wearing an orange brassiere while snorting coke off a prostitute’s bosom might be considered inadmissible.
Nevertheless, it’s true that Mr Corbyn is a romantic, and not just because the thrice-married MP seems to find it quite easy to fall in love. He’s a conviction politician, a man who has the rather old-fashioned notion that his ideals shouldn’t be compromised in the pursuit of power. And now he stands, almost accidentally, on the brink of the leadership of the Labour Party and people are suddenly asking: How the hell did that happen?
For the past few weeks, Labour stalwarts have been trying to discredit Mr Corbyn and his wild, left-wing views, like his wanting the railways to be renationalised or saying the wealthiest in society should pay higher taxes or campaigning against tuition fees. Tony Blair has warned that the election of Mr Corbyn as leader would be a gift to the Tories, while others have said that moving the party to the left would make it unelectable (they seem to have forgotten that there is recent evidence that Labour is pretty unelectable as it is).
Now, however, a new narrative is getting traction. Jeremy Corbyn is ahead in the race because he believes in something, and is consistent in those beliefs. Andy Burnham, one of his rivals, has acknowledged this by saying that Labour “has become a purveyor of retail politics, trading in the devalued currency of policy gimmicks designed to grab a quick headline”. He added: “It is in this context that we need to judge the current leadership race and ask why Jeremy Corbyn is having such an impact.”
Mr Corbyn, like Nigel Farage, is unafraid to say the unpopular, and both are brave enough to eschew middle-ground politics because it’s not where their heart is. Tony Blair gives the game away somewhat when he talks about politics in terms of winning and losing. “Personally, I prefer winning,” Blair said.
The irony is that because Jeremy Corbyn is a principled man (a legendary paltry expenses claimer) and is true to his values and beliefs, he might – in this election, at least – end up being a winner, too.
Lillian Cunningham in The Independent
As of September, one of the largest companies in the world will do all of its employees and managers an enormous favor: It will get rid of the annual performance review.
Accenture CEO Pierre Nanterme told The Washington Post that the professional services firm, which employs hundreds of thousands of workers in cities around the globe, has been quietly preparing for this “massive revolution” in its internal operations.
“Imagine, for a company of 330,000 people, changing the performance management process—it’s huge,” Nanterme said. “We’re going to get rid of probably 90 percent of what we did in the past.”
The firm will disband rankings and the once-a-year evaluation process starting in fiscal year 2016, which for Accenture begins this September. It will implement a more fluid system, in which employees receive timely feedback from their managers on an ongoing basis following assignments.
Accenture is joining a small but prominent list of major corporations that have had enough with the forced rankings, the time-consuming paperwork and the frustration engendered among managers and employees alike. Six percent of Fortune 500 companies have gotten rid of rankings, according to management research firm CEB.
These companies say their own research, as well as outside studies, ultimately convinced them that all the time, money and effort spent didn't ultimately accomplish their main goal — to drive better performance among employees.
In March, the consulting and accounting giant Deloitte announced that it was piloting a new program in which, like at Accenture, rankings would disappear and the evaluation process would unfold incrementally throughout the year. Deloitte is also experimenting with using only four simple questions in its reviews, two of which simply require yes or no answers.
Microsoft did away with its rankings nearly two years ago, attracting particular attention since it had long evangelized about the merits of its system that judged employees against each other. Adobe, Gap and Medtronic have also transformed their performance-review process.
“All this terminology of rankings—forcing rankings along some distribution curve or whatever—we’re done with that,” Nanterme said of Accenture's decision. “We’re going to evaluate you in your role, not vis à vis someone else who might work in Washington, who might work in Bangalore. It’s irrelevant. It should be about you.”
Though many major companies still haven’t taken the leap, most are aware that their current systems are flawed. CEB found that 95 percent of managers are dissatisfied with the way their companies conduct performance reviews, and nearly 90 percent of HR leaders say the process doesn’t even yield accurate information.
“Employees that do best in performance management systems tend to be the employees that are the most narcissistic and self-promoting,” said Brian Kropp, the HR practice leader for CEB. “Those aren’t necessarily the employees you need to be the best organization going forward.”
Brain research has shown that even employees who get positive reviews experience negative effects from the process. It often triggers disengagement, and constricts our openness to creativity and growth.
CEB also found that the average manager spends more than 200 hours a year on activities related to performance reviews—things like sitting in training sessions, filling out forms and delivering evaluations to employees. When you add up those hours, plus the cost of the performance-management technology itself, CEB estimates that a company of about 10,000 employees spends roughly $35 million a year to conduct reviews.
“The process is too heavy, too costly for the outcome,” Nanterme said. “And the outcome is not great.”
Interestingly, though, the decision to roll out an updated approach usually has little to do with reining in those numbers. Kropp said companies aren’t likely to save much time or money by transitioning away from their old ratings systems to a new evaluation process. Where they stand to benefit is, instead, the return on those investments. “The smartest companies are asking, how do we get the best value out of the time and money we are spending?” Kropp said.
That’s the question Accenture posed to itself. And its answer was that performance management had to change from trying to measure the value of employees’ contribution after the fact. It needed instead to regularly support and position workers to perform better in the future.
“The art of leadership is not to spend your time measuring, evaluating,” Nanterme said. “It’s all about selecting the person. And if you believe you selected the right person, then you give that person the freedom, the authority, the delegation to innovate and to lead with some very simple measure.”