Two hundred and thirty years after the French Revolution and 50 years after 1968, are we witnessing another transformation of Europe towards a fairer society based on the principles of equality, liberty and fraternity?

The last three weekends have seen the French begin to awaken from lethargy with a movement that is spreading beyond the anger at rising costs of living towards student unrest. Right and left extremists are fanning the movement for the sake of chaos as they always do.

All this does not help to bring back the peace and quiet that we all thought we would enjoy with the wave of globalisation, free trade and liberalism that the last 25 years were heralded to produce.

Yes, globalisation and the opening up of markets is one of the best things that happened, and it really could have produced what it was intended to do.

It was intended to bring the 70 per cent of the world’s population that until the late 1990s lived in utter poverty in the so-called Third World out of poverty. It was intended to transfer low-paying and repetitive jobs out of the developed world into the Third World, bringing about a drastic reduction of costs to industry and therefore allowing the developed world to wallow in absolute materialism and consumerism, which it did. It was meant to bring about economies of scale to multinationals and their integrated supply chains across the world which it did.

It was supposed to create wealth and innovation, which it did.

Why is then the world so upset and unstable now? In the last five years we have seen a breakdown of that stability and order that apparently reigned across the globe. China was getting richer, India has created a new billion-strong middle class, US and European multinationals were growing with plants in all the developing tiger economies of Asia.

We were blessed with a unique accumulation of positive trends that should have been fanned and allowed to grow to bring improvement to all our economies.

Well they did just that. A study by John Hopkins University for the American Chamber of Commerce to the EU showed that the wealth growth of the global economy has accelerated in the last 20 years because of the addition to the Western sphere of the growing Far Eastern economies and the expectations of the awakening of Africa.

Aside from the bank crisis of the 2008-12 period, the curve is constantly upward.

Yet and in spite of all this, we have seen a growing anger and disillusionment of the working classes and the lesser-paid segments of our western economies leading to the appearance of Trumpism in the US, far right movements in central Europe, the rise of the protest-based right wing parties in Northern Europe, the radical and anti-EU movements in Italy and now the yellow vests French revolution.

These movements calling for nationalism or anti-foreigner sentiment , in my opinion, are not the result of the rise of illegal or economic migration from Africa and South America pushing northwards, even though these movements may have provided the spark. They are the result of the blindness or foolishness of our political leaders starting with Clinton, Bush and Obama in the US and continuing with the Barroso and now the Juncker Commission in the EU, the last French presidents, German chancellor, British prime ministers from Blair through to Cameron and Swedish, Dutch, Spanish and Belgian governments who, in the name of a liberal economic model and a stupid belief in the trickle down economy, fell for the lobbying efforts of industry and investors across the globe to be lax in controls and in tax collection.

US  Delaware companies and the US tax with its deferral of non-repatriated incomes, together with the schemes invented in Dublin, Amsterdam, London, Luxembourg and Malta to create loopholes for multinationals  and the constant erosion of levels of taxation on investors, wealthy private citizens, oligarchs from dictatorships in Eastern Europe and Russia to let the market forces create wealth have led to a severe accumulation of wealth in the hands of a very few, as well as a very wide level of unemployment in the basic industries across the developed world.

Beneath the surface the unrest was growing and has surfaced in the past three years. It is probably almost too late to keep the lid on the pressure cooker from exploding

This has created a wide swathe of very poor, displaced and unhappy persons usually aged between 40 and 65 and a very wide group of unemployable youngsters aged 16 to 30 across Europe and the US.

A study in Germany published by Der Spiegel this year shows that in Germany alone, but mirrored across France, Spain and Italy too, the top 10 per cent of the population, nine million persons, owned 77 per cent of the National wealth (that is each having an average of €670,000 each) with the top 0.1 per cent or 900 persons owning three per cent of the national wealth (€490,000,000 each).

On the other hand, the bottom 90 per cent of the population of Germany, or 80 million people, owned 23 per cent of the wealth. The bottom segment of the poorest 45,000,000 people in Europe’s richest country only own an average of €4,750 each.

The same subdivision of the National GDP in the main economies of Europe occurs as well as the in the US, Canada and other developed economies. Malta is no exception  even though no studies have been made as far as I am aware.

It is these unhappy millions in the lower middle and working classes as well as the unemployed and the immigrant communities in our countries that have led to the breakdown of globalisation. We are now in the phase of populist leaders feeding on the unhappiness of these masses to take power.

Had former leaders in the last decade and the first decade of this century understood this and forced a fair collection of taxes from the beneficiaries then and used those revenues to retrain the dislodged workers and the growing youth unemployment, then we might have avoided the rise of Trump, of Salvini, Le Pen, Orban, Muscat, the right-wing parties in Germany and Sweden and now Spain. We might have given our labour force new skills for the new economy and we would have been able to turn our economies towards a greener and more sustainable course.

But we did not.

Macron was elected on such a clarion call in France but , even he, carried away by the trappings of regal power, and the hubris of finding himself as the strongest leader in Europe, failed to understand that it was not lowering the taxes for the rich and for industry that was needed. What was needed to avoid what may become a cross European revolution that could lead to terrible consequences was a fair and proper control of application of existing tax laws. What was needed was an early closure of tax haven schemes within the EU.

Unfortunately, this did not happen. The wealth created did produce a bit of trickle-down effects. These effects dampened the unrest and unhappiness at the bottom of the pyramid for some years at least. In fact, things did look quite rosy for a while, at least on the surface.

But beneath the surface the unrest was growing and has surfaced in the past three years. It is probably almost too late to keep the lid on the pressure cooker from exploding.

Yet there could be hope if drastic measures aimed to bring comfort to 250 million Europeans and 200 million Americans, the bottom 50 per cent of the population, to allow inflation to do its job, to urge wage increments that are much larger than the one or two per year we have seen in the last 20 years.

A low and fair level of taxation but severely and fairly collected would have done the trick. But politicians were stupid, afraid, lobbied or bribed to allow absolute laissez faire for too long.

The cost of dampening the brewing revolution will be a big one and will have to be borne by the wealthy.

Have the politicians courage?

I believe not. They continue to be blind. The violence in Paris and the main French cities is spreading to Brussels and Madrid and soon to Rome and Milan. When this happens there will be no chance left to “Give them cake”.

I hope I am wrong.

John Vassallo is a former senior counsel and director for EU Affairs at General Electric, a former vice president, EU Affairs, associate general counsel, Microsoft, and a former Ambassador of Malta to the EU.

This is a Times of Malta print opinion piece

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