Italy and the Euro

 

June 17, 2018

The change of government in Italy calls into question the German leadership of the European Union, which was myopic at best.
Italy has never benefited from the introduction of the euro. Its GDP per capita after the introduction of the common currency has stagnated. German-imposed austerity measures and the lack of solidarity among member countries in the euro club have contributed to transforming a once-promising monetary initiative into a fiasco. The common currency was supposed to bring prosperity and unity among its members. Instead, it brought misery in the South and pitched countries against one another (Joseph Stiglitz).
Sadly, nobody within the EU expects Germany to live up to the fact that it should have done much more to avert the euro crisis or to help countries in deep financial trouble. President Macron’s valiant efforts at reforming the Union and its common currency are likewise being torpedoed systematically by the German chancellor, who had lost touch with reality a long time ago and looks set to become the Union’s gravedigger.
In the current political climate, nationalists are gaining power in one member-state after another and xenophobia is on the rise. Such developments can only spell doom for the embattled Union, already weakened by Brexit and the debt crisis. Unfortunately, many economists or political analysts are not optimistic when it comes to the EU’s chances of overcoming its current woes. One can only hope that they are wrong and that the worst – i.e. the implosion of the Union – could still be avoided.

A Bad Case of Ottomanism

 February 22, 2018

When the AKP Islamic Party came to power in Turkey at the turn of the century, the event was saluted by many specialists as a victory for political Islam. For an entire decade, Turkey became a model of Islamic democracy envied by many in the Arab world. The 2011 revolutions were ignited by the hope that other Islamic societies might achieve the level of economic development and political stability that characterized the AKP rule in the first years in power.
Not anymore. The AKP moderates – such as former President Abdullah Gul, or former Foreign Minister Ahmet Davutoglu – were sidelined or brutally dismissed from office in a power-grabbing exercise that consolidated the authority of a single individual, Recep Tayyip Erdogan, over both the party and the country as a whole.
One of the most unsettling consequences is the 180-degree change in Turkey’s foreign policy. During the first 10 years of AKP rule, the then Foreign Minister Davutoglu – a noted professor of International Relations – crafted a policy called “zero problems with the neighbours”. He initiated dialogues with the Kurds, the Greeks and other neighbouring countries, and tried his best to make Turkey a respectable regional player in Asia and in Europe.
This enlightened foreign policy has been all but abandoned a few years ago in favour of military interventionism in Iraq, then Syria, as well as an unwise increase in tensions with both Russia and Greece. The revival of Ottomanism by President Erdogan is nothing new, in a country subjected to authoritarian rule. The use of history in order to elicit widespread popular support for government policies and to shore up one-man rule has been tried countless of times before in many other countries around the world. What makes Turkey’s Ottoman nostalgia particularly dangerous is the fact that it takes place at a point in time when the Middle East is a war zone and the European Union is practically unable to defend its borders. By unleashing hundreds of thousands of Syrian refugees onto European shores, Erdogan has proven to many an EU political leader that his intentions towards Europe, and particularly towards Greece, are at least as bellicose as his rhetoric.
This turn of events in Turkey brings thus to a sad conclusion an experiment with political Islam that had started as very promising, but may yet end up in disaster.

Western Diplomacy and the North Korean Nuclear Menace

 September 10, 2017

The current North Korean threat highlights one of the most troubling shortcomings facing today’s Western governments : the almost total inability of diplomacy to help solve such crises.

For thousands of years, various states in different periods of history have nurtured the development of a special class of bureaucrats, employed exclusively in the diplomatic service. In time, these people acquired the know-how necessary to deal with countries’ foreign friends and foes alike. Diplomats were always at hand when war was declared, peace terms negotiated or when tensions between states needed mediation.

Closer to the modern era, career diplomats became leading members of government. Their advice was highly respected and their status was second in importance only to the prime minister of the day.

Alas, after thirty years of neoliberal budget cuts and political leaders’ insistence on small government, the diplomatic services of Western countries have been severely degraded and the number of competent career diplomats has been drastically diminished. The global international relations system, as a result, is experiencing the effects of a dangerous loss of shock absorbers.

Everywhere in the world, Russia and China excepted, diplomats are being marginalised and face near extinction as a professional foreign affairs elite. This unheard-of development in history is due to the fact that Western leaders these days prefer to deal directly with one another, “to get things done”, even though they don’t possess the specialised knowledge and skills to do so.

To put it more bluntly, we can compare the performance of a political leader in the field of international relations to that of a quack next to a doctor. By relying on executive briefs instead of drawing on a solid knowledge of history, culture and international events, career politicians usually delude themselves as to their abilities in the field of foreign relations.

Unfortunately, we are talking here about political leaders who have, in the words of Henry Kissinger, oversized egos and think they could match the skills of career diplomats when negotiating treaties, appeasing important allies or dealing with enemies. Elected Western leaders, however, owe their jobs to their ability to convince their constituencies to vote for them on domestic issues, and not to their skills in dealing with other heads of state.

The above can easily be illustrated with the classic example of the negotiations between Presidents George H. Bush and Mikhail Gorbachev, which took place prior to the reunification of Germany in 1991. On that occasion, Gorbachev agreed to peacefully remove the Red Army units from East Germany in exchange of a verbal promise from his American counterpart that NATO would not expand to the east. The deal was concluded among the two presidents directly, without the involvement of their top diplomats or the signing of a formal treaty to that effect. Needless to mention, the handshake deal between the two leaders did not stop NATO from expanding eastwards a decade later and generating the military tensions witnessed today at Russia’s western borders.

There is no doubt that – as the leader of the Western world – the United States is chiefly responsible for these negative developments. The US has never consistently nurtured the development of a professional diplomatic corps and, bare a few exceptions, American foreign ministers have never carried significant weight within the US government. The performance of Henry Kissinger as State Secretary remains exceptional simply because it confirms the rule.

The US State Department has consistently been denied adequate funding, especially over the last thirty years, with the bulk of the budget allocations going into the Pentagon’s coffers. In the first decade of the 21st century, George W Bush even named a general as Secretary of State (Colin Powell) and the invasion of Iraq soon followed, despite stark warnings and protests on the part of career diplomats and UN officials. Moreover, as events in Ukraine have recently shown, US ambassadors are repeatedly being used, in a subordinate capacity, to assist the CIA in organising coups d’etat or to influence election results in a variety of countries around the globe. More often than not, American diplomats are continuously undermined in the performance of their duty by the CIA or other representatives of the military-industrial complex.

The Obama Administration has tried and partially succeeded in diminishing the influence of the military-industrial complex in the framing of US foreign policy. It provided more adequate funding for the US State Department by constantly insisting that the use of military force should only occur as a last resort and that diplomacy and negotiation should be given priority. This has resulted in one of the few successes of the Obama administration: the Iran deal. Barack Obama’s error, however, was that of naming Hilary Clinton as Secretary of State. She lacked the intellectual standing necessary in the field of international relations and, like her husband, was mired in controversy.

The influence and respectability of diplomats is even more problematic within the European Union, where various heads of the EAS (European Action Service), from Catherine Ashton to Federica Mogherini, have failed in getting the respect and trust of the EU’s external partners. As a result, the EAS is perceived as an annex to the American State Department and as a nuisance by the foreign policy establishments of EU member states. At the national level as well, very few EU states have succeeded in preserving diplomats’ former status and in protecting their departments from budget cuts.

In countries like Romania, for instance, we are also witnessing an exceedingly worrisome development, namely the replacement of career diplomats with former industrial engineers without language skills and/or with covert operatives of the country’s spy agencies. This bizarre development has been made possible by the fact that over the past ten years Romania’s foreign affairs ministers have been – either prior to or after their mandates – directors of the state’s spy services (SIE). Moreover, ex- foreign intelligence directors like Catalin Harnagea or those of the country’s internal secret service SRI, have been awarded ambassadorial positions despite the lack of prior experience or solid training in international relations.

Taking the above developments into account, it comes as no surprise that there is no negotiated settlement possible between the West and the North Korean regime.

Even at the height of the Cold War -as Britain’s late Sir Michael Alexander duly noted in one of his books – career diplomats from both sides of the fence were able to keep communication channels open and thus avoid major nuclear catastrophes in the process. De-nuclearisation treaties were negotiated and signed and the fall of communism, as a result, happened in a peaceful manner.

Today, when the military call the shots in the White House and there are no more top American or European career diplomats to speak of, the world edges closer to nuclear holocaust than ever before. We should also be frank in admitting that President Trump’s “Twitter diplomacy” is a poor substitute to the real thing. His tête-à-tête meetings with Vladimir Putin, for example, have not succeeded in improving the US’s relationship with Russia, on the contrary.

Let us all hope that it is not too late to reverse this dangerous trend. Diplomats need to be put back in charge of framing foreign policy and in conducting difficult negotiations, without the overriding interference of their political leaders, intelligence or military establishments.

A Possible Blueprint for Preserving Peace in Europe

 August 2, 2017

Remember Montesquieu and his “doux commerce” ? “L’effet naturel du commerce est de porter à la paix. Deux nations qui négocient ensemble, se rendent réciproquement dépendantes: si l’une a intérêt d’acheter, l’autre a intérêt de vendre; et toutes les unions sont fondées sur des besoins mutuelles. Mais si l’esprit de commerce unit les nations, il n’unit pas de même les particuliers.”

Over the past few hundred years, this belief has become an integral part of the liberal credo and it animates the economic thinking of globalists to this day. Alas, the promise of trade as a peace-promoting activity among nations has never been fulfilled to date. The recent adoption of additional sanctions against Russia by the US senate amply proves that geopolitical tensions among nations and blocks of nations can thwart the beneficial effects of trade among them. One of the problems is that Russia and the United States are essentially alike tradewise. Both countries rely heavily for their export earnings on commodities (oil & gas) and sales of military hardware to their allies…

In many ways, the European Union is caught in the current crossfire between the former cold war enemies. A new and more dangerous version of the first cold war between the Americans and the Russians has emerged, one that is commonly called cold war 2.0. It has occurred as a direct result of the relentless expansion of NATO eastwards since the turn of the millennium and it is now seriously affecting international trade.

Nevertheless, restoring peaceful relations between the EU, US and Russia is an essential precondition of resuming normal trade relationships. But how to achieve this?

First, the Western alliance should recognize that the presence of NATO in the countries bordering Russia is viewed in Moscow as a huge security threat. Thus, not only should its expansion into Ukraine, Moldova and Georgia be halted, but additional confidence-building steps should be undertaken in order to defuse the current tensions.

Second, the Baltic countries should themselves revert to a neutral status, even as they retain EU membership.

Third, a newly-formed neutral zone between NATO and Russia should be created. This would include Estonia, Latvia and Lithuania, Ukraine, Moldova and Georgia, whose security should be guaranteed by multilateral treaties between NATO powers and Russia.

Past experience has proven that in case of conflict, in all these countries with sizeable Russian minorities, their allegiance naturally tilts towards Moscow. This makes these states, at the best of times, unreliable NATO allies or candidates. Furthermore, history has also shown that states like Ukraine, Moldova and Georgia achieve a relatively higher level of internal stability when led by pro-Russian leaders.

Putting a stop to NATO’s expansion and taking a step back from the Russian borders would restore peaceful relations with Russia and improve trade ties. Just as important, it would prove that NATO is not bent on expansion at the expense of trade, but stays true to its original mandate of preserving peace on the continent.

Three Seas or Five Seas Initiative ?

 July 6, 2017

Polish President Andrzej Duda’s Three Seas Initiative project is a logical outcome of the European Union’s eastward expansion since the turn of the millennium.

To observers in the former Soviet satellite states of Central and Eastern Europe, the expansion of the EU looks very much like a “drang nach Osten” affair minus the tanks, that is. Even the French regarded this group of countries as lands to be conquered economically. Pascal Lorot, for example, one of the co-founders of geoeconomics, even wrote a book on the subject suggestively titled “La conquête de l’Est”.

Truth be told, ex-Soviet satellite states which have adhered to the European Union since 2004 have quickly become second-class countries within it. This is, by-and-large, a development I fully expected. As the Nobel-prize winning Swedish economist Gunnar Myrdal pointed out in the seventies, from the association of a group of rich countries with a group of developing or poor countries, the latter would end up as the losers.

At the time the membership of the EU was restricted to Western Europe and Germany, things had worked out rather smoothly. Most if not all of its members were economically developed, former imperial powers, institutionally compatible with each other.

The EU’s new entrants since 2004, on the other hand, have a shared history of anti-imperialist struggles in their quest for nationhood that sometimes go back centuries. Some, like Poland, had even suffered partitions at the hands of all neighbouring empires: Austria-Hungary, Prussia and Russia. The countries in this group see their economic development stifled by Brussels’ over-regulation, their national sovereignty infringed upon in ways they cannot accept, and their future within the Union as a bleak one. These are but a few reasons why a closer integration between countries like Czechia, Croatia, Hungary, Poland, Slovakia, Romania, Bulgaria and ex-Yugoslav states makes much more sense now than it did in the inter-war period.

Still, in my view, Poland would be an unlikely nucleus for promoting closer economic, military and even political links between them. To be successful, the group has to shy away from including states like the Baltic republics, Ukraine or Moldova. The latter states have millions of Russians or Russian-speaking citizens within their borders and, short of resorting to Stalinist-era eviction solutions, these countries’ eventual adherence would prove poisonous to the entire group. Needless to say, Russia would strongly oppose the formation of such a group if the Polish-inspired drive to include the largely neutral countries on its border would somehow prevail.

And last but not least, Greece should also potentially be included as a member of the TSI, which would thus become FSI (Five Seas Initiative). Greece’s adherence would give the group increased international clout, an enviable geostrategic configuration and better access to the Mediterranean. As matters now stand, there is no love lost between the Greeks and the German-led EU officialdom.

In fact, the driver of such an integration project should be Romania, for strategic and historical reasons. The inter-war Romanian foreign minister N. Titulescu had succeeded in 1934 in merging the Little Entente (made up by Czechoslovakia, Romania and Yugoslavia) with the countries from the Balkan Pact, which included Greece and Bulgaria. He was also careful not to antagonize the USSR, with which he signed a non-aggression pact.

Tragically, however, at this point in time Romania is unable to play such an essential role. Practically all the politicians we inherited from Ceausescu’s dictatorship – and Iliescu’s “original democracy” experiment – lack decency, credibility, vision, solid qualifications and political skill. Most of them are an illustration of the sociological nightmare of the worst who get on top, which makes it very difficult for the country to solve its internal woes, let alone participate in such a demanding undertaking.

The support of the United States, although not necessarily a military one, is a prerequisite for the successful completion of any of the above projects. It is no accident that President Trump gets a better reception in Poland than, say, Germany or Britain. The United States have themselves appeared on the world map after a successful war of independence, fought against imperial Britain.

If successful, the efforts of Central and Eastern Europeans to closer integrate their economies and markets and to build the needed physical infrastructure would also benefit the European continent as a whole.

Should the EU Agree to the Partition of Libya ?

 April 13, 2017

News has it that White House foreign policy aides are toying with the idea of partitioning Libya in three, roughly copying the Ottoman Empire’s former administrative entities in the region. As the “America First” political philosophy seems to have lost its appeal for the Trump team’s policymakers, there is now a flurry of initiatives on the foreign policy front. Needless to say, most such initiatives are misguided and, according to French and American experts, the grand strategy is not even decided upon in Washington, but in Israel.

The idea of partitioning Libya is yet another example of an amateurish approach to international relations which does not bode well, either for Libya or for its neighbour across the Mediterranean, the EU.

It would be useful at this point to remind readers that for at least 50 years before the September 11 attack, North Africa’s Maghreb had been the special responsibility of European powers, especially France, whereas the problems of the Middle East had for obvious reasons, for better or for worse, been handled by the United States. Since the start of GW. Bush’s “war on terror” however, the Americans have decided to enlarge their footprint in the Arab world. Consequently, a new strategic region was created to that end, commonly known as MENA (Middle East + North Africa). The Pentagon’s Africa command started to interfere in the way Maghreb countries were being run, the plan to partition Libya being only the culmination of such meddling.

European foreign policy experts and political representatives should, however, insist on adopting statecraft solutions for Tunisia, Libya and Algeria that are consistent with the region’s past and options for the future without any interference from America’s foreign policy operatives or from the Pentagon. Failing that, this region of the Arab world which has been reasonably peaceful until recently risks being engulfed in the same intractable conflicts that have characterised American leadership in the Middle East.

The Transatlantic "War of Fines"

 September 23, 2016

I’m not going to write about Bratislava’s informal September summit, for nothing of substance regarding the future of the Union has been decided there. Fact is, EU political leaders have delayed important decisions for the spring of 2017, after the results of the American elections are in.

Why does the next American president matter ? For a start, if Trump wins in November he will try to make good of the promise to squeeze more money for NATO from rich EU member states. If H. Clinton gets into the White House, pressure to do more for the common defence of the continent will somewhat be diminished and global elites from both sides of the Atlantic will get a powerful ally in Washington.

As matters now stand, transatlantic relations are deteriorating at a rapid pace. Indeed, for a few months now the “war of fines” has been well and truly underway. The EU has slapped a 13 billion-euro fine on Apple, the US’ best-performing corporation. The US retaliated with a 14 billion-dollar fine on Deutsche Bank, which – if enforced – could trigger a collapse of the entire German banking system and a full-fledged banking crisis within the EU. A few months prior to this the US had fined Volkswagen, the EU’s largest car manufacturer, 15 billion dollars. All these come on top of BNP Paribas’ 9 billion-euro fine from 2014, one of the largest ever applied to a bank outside the US.

The amount of money collected in fines by the US government is a clear indication that Uncle Sam has his coffers empty and finds it very hard to continue to provide adequate funding for Europe’s defence via NATO. The realisation of this fact might have prompted Jean-Claude Juncker to ask for the creation of an European army, albeit at the wrong time in the EU’s history.

In truth, the EU is able to provide for its own defence. The size of its member states’ armies combined, their air forces and navies could successfully deter would-be aggressors. Juncker, however, is the wrong person to undertake such a project, simply because he is a federalist. The EU does not need an “European army” as such, but rather a common NATO-like command structure in Brussels (or elsewhere) that could coordinate the militaries of member states in the event of a major conflict. That’s all.

Naturally, the new structure will in time replace NATO as a collective defence organisation and all member states will need to agree to higher levels of defence spending than it has been the case for the past sixty years. A common defence policy and collective security structures will not, however, alleviate the EU’s major crises, such as economic stagnation and migration. For those problems to be solved, the EU has to rid itself first of austeritarians and federalist-minded political leaders, who are chiefly responsible for the predicament the Union is currently in.