Category Archives: Middle East

Studying non-European/non-US History at the University of Birmingham: Welcome Meeting!

Poster - Non-European history induction event 20 sep 17 copy


Cairo, Vienna, Athens: Empire and Class on Planet Bailout.

Aufruf (Anleihe), Vˆlkerbundanleihe, 1923.06.01
Aufruf (Anleihe), Völkerbundanleihe, 1923.06.01. (League of Nations Loan, Austrian tranche issue date: 1 June) Bildarchiv Austria, PLA16304352.

Nathan Marcus


HSE, St. Petersburg

The debates surrounding the Greek bailout have prompted a look at historical examples of foreign financial assistance. Writing on colonial bailouts and the Austrian financial reconstruction of the 1920s, Jamie Martin discerns continuities that boil down to curtailing a state’s sovereignty in order to ensure the servicing of foreign debt. Installing foreign commissions of control that curtailed fiscal policy and public spending, from the Ottoman Public Debt Administration or the bailout of Egypt’s Khedive to the League of Nations’ schemes during the interwar period, prevented default or allowed for the provision of new foreign loans.[1]

Martin concludes by criticizing the League’s interwar interventions for introducing semi-colonial methods to Europe, noting the dangers such a precedent created for the future sovereignty of European states. Of course sovereign states are never completely free to do as they please. Nor does it seem unreasonable that creditors of bankrupt states link the supply of new capital, or the partial forgiveness of existing debt, to certain conditions. This is particularly true in cases where public funds or state guarantees are involved because private institutions refuse to lend money at reasonable interest rates. What is reminiscent of colonialism then, is not the partial curtailing of sovereignty itself, but rather the kind and the extent of conditions that are imposed and they way they get realized, sometimes against the explicit will of voters.

Key to Martin’s argument is that the League’s financial assistance programmes, foremost the Austrian reconstruction scheme of the 1920s, were extensive creditor-imposed infringements of sovereignty not unlike their colonial precedents in Egypt and elsewhere, and that they went on to inspire IMF Structural Adjustment Programs in the post-WWII era. The Austrian intervention is, on this account, an important pivot from disciplining the Khedive to disciplining Alexis Tsipras. And while it is indeed helpful to look at these programmes through the wide-angled lens of financial imperialism across the twentieth century, we must not neglect the transnational and domestic class relations and specific social histories that underpinned such interventions. The League assistance provided to Austria did provoke loud outcries about the alleged “Ottomanization” of the country, both from the Socialist left and the Pan-German right, but it was also welcomed by Austria’s industrial and administrative elites. Upon League General Commissioner Alfred Zimmerman’s arrival in Vienna, the liberal Neue Freie Presse hailed him as a “friend of Austria” and wrote:

The General Commissioner will not act like a Tyrant, he will only strengthen the government’s backbone, he will give it the moral authority to do what it itself desires to do and what it must do in order to live up to its commitments and prevent a relapse into the economics of stagnation and bankruptcy.[2]

Installing a form of foreign control in Austria was thus not a measure all its citizens were equally opposed to. There is every reason to believe that the conservative Chancellor and former Prelate Ignaz Seipel himself pushed for the idea, which was coupled to a so-called Empowerment-law that would allow him to rule by decree and outflank the strong socialist opposition. But local elites welcomed the League and its measures not just as a bastion against socialism, but also as a guarantor for what they considered sound economic policy, budgetary transparency and important socioeconomic change. At the core of Austria’s predicament were its enormous budget deficit and the destructive hyperinflation it entailed, both of which required heavy and unpopular cut-backs in fiscal spending. The League’s involvement provided the government with a tool to overcome a disastrous political and budgetary stalemate and, more importantly, with a scapegoat to blame for unpopular measures and thereby safeguard political peace in the country.[3]

The truth is that Mr Zimmerman hardly played any meaningful role beyond that of a useful scapegoat. Even before the League loan for Austria had been floated on foreign capital markets, Austrian Chancellor Seipel and his government mocked Zimmerman, ignored his inquires and circumvented his control whenever possible. Zimmerman himself became increasingly frustrated and disillusioned (he blamed the fact that the empowerment law had not been implemented as agreed), but the League of Nations was too invested (perhaps much like the European leaders in Greece today) to announce the project a failure – and so it kept up public impression that it was coming along as planned. The reconstruction scheme still proved an initial success, with foreign confidence in Austria rebounding and foreign capital flowing into the country, contributing to a boom on the Vienna stock-exchange, the flow of foreign loans to its banks and industries and short-term financing of its foreign trade.

The main reason for the temporary success of the League ‘s intervention lay not in foreign control of Austria’s budget, the pledging of revenues to foreign creditors and an infringement of Austrian sovereignty. Much like Greece today, the country’s economy was in dire need of hugely unpopular reforms, but the country’s political parties were too divided or lacked the necessary trust to find common ground and agree on changes. While politicians believed cutbacks were necessary, they were unwilling to take the blame and pay the political cost of implementing them. Meanwhile industrialists and bankers knew that only foreign loans could help rebuild the Austrian economy.[4] The most important contribution of the League was hence to give the government and the opposition the necessary moral and political cover to implement unpopular, but necessary changes, while blaming the cost in unemployment on Zimmerman, foreign financial interests, the League of Nations in Geneva, or even the Bank of England. The result was a balanced budget, a stable currency and economic recovery.

As charges of financial imperialism continue to be raised, its relationship to domestic class conflict should not be overlooked, even if the specifics of the latter are harder to grasp from case to case. Debt restructuring or financial reconstruction like in 1920s Austria inevitably required the balancing of public accounts through the curtailment of government expenditures and an increase in taxation. Given the existing balance of power between capitalists, industrialists, and the army on one hand and workers and unions on the other, supporting local elites’ self-allocated “right” to determine the nature of “their country’s” economic policies might have been the easiest way to lower borrowing costs. Where European intervention in nineteenth century Egypt, the League in 1920s Austria and the IMF’s Structural Adjustment Programs after WWII invariably failed was to protect those weakest in society from the costs of economic reform. Serving as a scapegoat, such interventions helped and sometimes encouraged entrenched national elites to impose measures in ways that disproportionately hurt the economically weak or politically powerless. It is this seeming disregard for the plain human suffering incurred by foreign bailouts that continues to evoke connotations of colonialism.

Importantly, after the League left Austria in 1926, the political polarization and blame-game returned and very quickly made Austria ungovernable. Political and economic elites squandered the opportunities League control had provided them with and instead led the country from one financial crisis to another. The fact that in Greece it is the left-wing Syriza that has negotiated reforms to supposedly heal the country’s economy might therefore present an important break in the continuity of economic government. If Syriza indeed gets re-elected and manages to form a coalition it will be a left-wing led government that will be forced to implement creditor demands in Greece, a fact that might or might not bode well for the future political stability of the country. Either way, observers of the situation will be well advised to pay close attention not just to creditor colonialism but also to internal Greek politics and class relations, which will significantly determine how it ends up exiting the current imbroglio.


[1] Mauro Megliani, Sovereign Debt: Genesis- Restructuring-Litigation (Springer, 2015), pp. 68-71.

[2] “Ankunft des Generalkomissärs in Wien“ in Neue Freie Presse, 15 Dec. 1922, p. 1. The original text reads as follows: „Der Generakomissär wird nicht den Tyrannen spielen, er wird nur der Regierung das Rückgrat stärken, er wird ihr die moralische Autorität geben das zu tun, was sie selber tun will und was sie tun muss, um ihren Pflichten zu genügen und den Rückfall in die Versumpfung und Bankerottiererwirtschaft zu verhindern.“ True to its political orientation, the socialist Arbeiterzeitung ignored Zimmerman’s arrival and the following day chose to mock the Neue Freie Presse’s adulations, commenting that with the General Commissioner’s appearance, Austria had ceased to be a “free and independent state.” “Die Ankunft” in Arbeiterzeitung, 16 Dec. 1922, p. 3.

[3] Tony Judt has argued similarly that it were domestic goals of change and reform that motivated most European statesmen to embrace the rhetoric of a united continent after 1945. See, Tony Judt, A Grand Illusion? An Essay on Europe (New York: NYU Press, 2011), p. 4.

[4] “Es ist ja auch Ihnen, hochverehrter Herr Minister bekannt, dass die wirtschaftliche Lage unseres Landes es unbedingt erforderlich erscheinen lässt, unseren heimischen Unternehmungen fremdes, wenn möglich westländisches Kapital zuzuführen. Nur mit Hilfe der billiger verzinslichen ausländischen Gelder wird es möglich sein, durch Investitionen die Productionsfähigkeit unserer Industrie auf eine konkurrenzfähige Höhe zu bringen.“ Vienna Chamber of Commerce to Minister Franckenstein, 26 Jun. 1924. Archiv der Republik, 01/9, Box 102.

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The rise and rise of Recep Tayyip Erdogan – and a slide towards autocracy in Turkey

The rise and rise of Recep Tayyip Erdogan – and a slide towards autocracy in Turkey

Mustafa Coban, University of Birmingham

Ever since Recep Tayyip Erdogan moved from being prime minister to president of Turkey in 2014, the country’s politics have continued an alarming drift towards autocracy. Erdogan has taken his strong party identity and command-and-control style with him – and is seriously eroding the nation’s checks and balances on personal power.

Turkey’s various presidents have been men of party political and military backgrounds alike. Though it would be naïve to suggest that none of them had any pre-existing political agenda, the record of direct party political manoeuvring is scant.

The previous president, Abdullah Gül was often condemned for his uncritical ratification of legislation passed by parliament, but in general he made an effort to stay above party politics – Gül and Erdogan shared a background in the conservative Justice and Development Party (AKP). Gül’s predecessor, former constitutional court judge Ahmet Necdet Sezer, was a firm check on the early years of AKP governments.

But things are different now. The structures that hold back the increasing authority of Erdogan and his party have been under attack for some time – and Erdogan may be on the brink of finally overwhelming them. He is quite openly manouvering to concentrate power in his person rather than the office he holds, and he has been doing so for some time.

Hands on

The Gezi Park demonstrations in May and June 2013, for instance, were sparked in part by his arrogant statements on municipal issues in Istanbul, blithely overriding the governor, mayor and city council.

When a massive corruption scandal broke in December 2013, Erdogan became combative. Wiretaps were released implicating AKP ministers, Erdogan and their sons in wide-scale embezzlement. Erdogan first dismissed the wiretaps as forgeries, then held them up as evidence of a conspiracy.

But ultimately, any “conspiracy” against him clearly failed, as 25 police officers and various others were arrested in raids against those who instituted the wiretaps in the first place.

This was just one of many attempts to reign Erdogan that have failed. After the wiretap scandal, he not only bounced back, but campaigned to great effect in the municipal elections of March 2014, sometimes appearing simultaneously in different places by way of a hologram. And despite the previous year’s upheavals the AKP won a majority across the country.

Erdogan appears in hologram form in 2014.

Neither Erdogan’s overreach nor evidence of corruption moved the electorate against the AKP. The verdict seemed to be “they steal, but they work hard,” in contrast to previous more secular-minded governments which were also accused of corruption, but were not seen to be working for the good of the country.

And while the AKP certainly benefited from heavily favourable coverage by the state broadcaster TRT, the charisma and personal power of Erdogan himself was also a major factor. Any attack on Erdogan simply seems to galvanise his supporters behind him.

Rallying the troops

Now Erdogan is president, not prime minister, he is meant to be on a much tighter leash. Article 101 of the Turkish constitution makes it explicit that the president must sever all connections with their party. But Erdogan is not just flouting this core requirement; he is openly campaigning for his party in the run-up to the 2015 general election.

So far, Erdogan has already addressed voters in a number of cities, including Denizli, Gaziantep, and most recently the capital Ankara.

Erdogan has also been giving a series of lectures to “muhtars“, village and neighbourhood officials who are elected but not affiliated with political parties. Since these officials have local influence and a role in registering voters, recruiting them to a party political agenda is also against the law.

Most shockingly of all, Erdogan has actually started asking the electorate to return 400 MPs for the AKP, which would provide the AKP government with the majority it needs to unilaterally amend the constitution. For the president to make this plea at all is illegal.

Regardless of what happens in the election, substantial damage has already been done. The previously ceremonial chair of the presidency is rapidly being turned into a powerful executive post, drawing influence and authority from a Parliament subservient to the person rather than the institution.

Little stands in Erdogan’s way. He chose his successor as PM, Ahmet Davutoğlu, precisely for his malleability, and Turkey’s moves towards a police state bear Erdogan’s fingerprints.

It is not inconceivable that if they were elected, 400 AKP members of parliament (out of a total of 550) under the de facto leadership of Erdogan could vote to rewrite the constitution and overnight make his currently illegal electioneering legal – and along with it, his radical effort to gather ever more unaccountable power for himself.

The Conversation

This article was originally published on The Conversation.
Read the original article.

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