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Observations of an Expat: European Complacency

By Tom Arms

Political Complacency is dangerous. It stifles innovation and sweeps problems under the carpet because they involve difficult decisions that might rock the boat, but end up sinking it if they are ignored too long.

Angela Merkel was in many ways a good German Chancellor. She was a good European leader. She was a consensus builder inside coalition structures. But her constant search for consensus led her to compromises on important issues which needed to be resolved. This was the downside of an otherwise upbeat chancellorship.

The political agreement resulted in economic prosperity for the Germans—and complacency about the unresolved issues, both in Germany and EU-wide. Her likely successor, Social Democrat Party (SPD) leader Olaf Scholz, appears to be heading the same way with a slight leftward bent.

Defence, climate change, public debt, China and infrastructure issues were problems Mrs Merkel faced when she first became chancellor back in 2005. Germany still faces them and you can now add to the list Russia, refugees and the troublesome East Europeans. And because Germany is the most populous and one of the richest countries in the European Union, its problems are EU problems.

In 1997 Environment Minister Angela Merkel called for urgent action on climate change. It is still one of Europe’s climate bad boys. In 2021 Germany relies on fossil fuels for 44 per cent of its electricity and emits more carbon dioxide than most European countries.

The long-term chancellor played a major role in attacking Russia’s annexation of Crimea and activities in Eastern Ukraine. But she has done little to oppose the development of Moscow’s intermediate-range nuclear weapons and has ensured Germany (and Europe’s) dependence on Russian natural gas with Nordstrom Two.

On Defence, Germany spends only 1.4 per cent of its GDP on its military— well short of the two per cent NATO target. Since the election of Donald Trump in 2016, Mrs Merkel has been saying that Europe cannot rely on the US for its protection. The message has been repeated after the Afghan withdrawal debacle and the AUKUS nuclear submarine deal. But defence spending remains low.

China is another reason for problems with the US. The Asian giant is one of Germany’s biggest markets. It swallows up seven per cent of German exports. The Chinese railway to Europe (a key part of China’s Belt/Road initiative) has its current terminus at the German city of Duisburg where it sends ten freight trains a day. Germany is reluctant to threaten this lucrative market by supporting America’s security-oriented Asia Pivot.

The East European countries in the Visegrad Group—especially Viktor Orban’s Hungary—have broken a string of EU regulations and laws. There have been some sanctions against them, but because of Merkel’s pursuit of no-matter-the-cost consensus their impact has been minimal and Orban and his ilk are allowed to make political capital out of continuing to thumb their noses at Merkel and her liberal European values. This constantly undermines the rule of law in the European Union.

In 2015 Angela Merkel made the incredibly brave moral decision to admit more than a million Syrian refugees to Germany. Unfortunately, her bravery spawned the growth of the right-wing Alternative for Deutschland (AfD) and failed to persuade other EU countries to follow her example. It also pushed the EU into a deal with Turkey to keep 3 million refugees in Turkish camps. Unfortunately, the arrangement has morphed into blackmail with the EU almost doubling its $3 billion a year payment to Turkey or face a flood of refugees across the Aegean.

Merkel’s policy of no new debt and limited public spending (which was implemented by Olaf Scholtz as finance minister and vice-chancellor from 2018) helped to keep a tight rein not only on spending in Germany but also on heavily indebted countries elsewhere in Europe. She allowed a substantial breather to deal with the coronavirus epidemic, but not much more. The result has been that creaking infrastructure across Europe requires a massive cash injection and a better EU-implemented public debt structure to finance it.

Of course, one problem is that although Germany is the most powerful EU country it is still only one of 26. Since the 2014 Lisbon Treaty, the European Council has had Qualified Majority Voting, but its meetings still aim for the consensus unanimous vote. The question of a two-tier Europe, especially as regards Eastern Europe, remains on the cards for whoever takes over in Berlin.

But then, then the European mantle may not continue to lie on the shoulders of the German Chancellor. French President Emmanuel Macron is keen to don it and uses every opportunity to project himself as the ultimate European. The next few months is an opportunity for him to lay the groundwork for the job. Germany will be self-obsessed with coalition negotiations. Those are expected to be completed by Christmas, at which time France will be entering its campaign for the two-round April presidential elections.

At last count, there were 19 declared and undeclared candidates for the tenancy of the Elysee Palace. The early money is on a return of Macron. The left-wing is hopelessly divided. The right-wing is usually dominated by Marine Le Pen and her National Rally. But this election has seen the rise of 63-year-old talk show host Eric Zemmour who is even further to the right than Ms Le Pen. He has the distinction of being convicted of internationally reported hate crimes and has called for the banning of Mohammed as the first name in France. At the latest poll ( September 25) Zemmour had 13 per cent of the vote and Le Pen had dropped from neck and neck with Macron with roughly 25 per cent each to 16 per cent of the vote. If there is a challenger to Macron at the moment it is former EU Brexit negotiator and centre-right Gaullist Michelle Barnier. He is standing at ten per cent in the polls, but if Marine le Pen and Zemmour are knocked out in the first round he could emerge as a serious second-round candidate.

The main problem with French dominance of the EU is the absence of a firm grip on their domestic economy. The unemployment rate in France is exactly double that of Germany (4.31 per cent to 8.62 per cent in 2020) and France’s GDP is $2.938 trillion compared to Germany’s $4.319 trillion in 2021.

Macron, however, controls the EU’s biggest military and its only nuclear weapons. He hopes to leverage that into political power along with a long tenancy at the top—if he wins in April. But any French president will still need German money.

Tom Arms’s book “America Made in Britain” is published on 15 October and can be ordered now from Amazon Books.

World Review

In most China shops I have visited there has been a prominently displayed sign that reads: “If you broke it you own it.” The same sign needs to hang over the door of 10 Downing Street. Boris Johnson led the Brexit campaign. He was elected on a “Get Brexit done” platform. He and his Brexiteering cabinet have broken the British economy with shortages of food, gas, petrol, turkeys and even children’s toys; and yet they refuse to own responsibility for their actions. They blame it on the pandemic and international circumstances. To be fair, the pandemic and world conditions are major contributing factors, but Britain is suffering more than any other Western country and the reason—as the trade association after professional body keeps telling us—is Brexit. The fact is that Johnson and Co had no plan A, B or C beyond the exit door.

To make matters worse, China (the world’s second-largest economy) is battening down the energy hatches. Faced with a shortage of carbon-emitting coal, the government has imposed widespread energy blackouts causing hundreds of factories to suspend production. At the same time, the Chinese Communist Party has decreed that energy companies should start purchasing stocks of natural gas, coal and oil “whatever the cost”. This will have an inevitable impact on prices and supplies elsewhere in the world and add to the problems caused by the potential collapse of giant Chinese property developer Evergrande.

China’s role as the world’s biggest emitter of carbon makes it a prime target for the COP Climate Change conference in Glasgow next month. Next on the list could well be Australia which supplies a big chunk of the coal that fuels Chinese power stations. Unfortunately, both Australia’s Conservative Prime Minister Scott Morrison and China’s Xi Jinping have said this week that they are unlikely to make the trip to Scotland. The Chinese have refused to decouple climate politics from security considerations and are furious at the formation of AUKUS and the US-UK-Australian nuclear sub deal. Scott Morrison is also saying he may not attend. He offers the weak excuse that he is fed up with having to quarantine after foreign trips. But it is more likely that he doesn’t want to be castigated for his climate change denial policies. Another national leader who is unlikely to visit Glasgow is Brazil’s Jair Bolsonaro. He is the steward of the world’s largest rain forest and an irredeemable climate change denier. The absence of these three key players would seriously weaken any decisions made at the summit.

North Korea’s Kim Jong-un is losing weight. This could be because his doctors have told him that his rolls of fat are a serious health hazard or that he is on a sympathy diet because of the famine that is sweeping through North Korea. People are dying from starvation and coronavirus. They cannot grow enough food to feed themselves and supplies from China have stopped as the Sino-Korean border has been closed because of the pandemic. At the same time, Kim has been firing off missile after missile. This could be to take the people’s minds off their stomachs and it could also be a stick to push the South Koreans into sending food northwards. As a carrot, Kim has suggested that the North-South hotline be restored and there is a suggestion from Kim’s politically active sister (Kim Yo-jong) that North Korea could agree to a peace treaty to formally end the war on the Korean Peninsula. So far, the North Korean leader has rebuffed American proposals for talks.

Attention is still focused on the AUKUS nuclear submarine deal and is spreading to French military interests elsewhere in the world. This week New Zealand said it would ban the submarines from its territorial waters; talks between the British and French defence ministers were called off and European Commission President Ursula von der Leyen said the EU was reconsidering its proposed trade deal with Australia. The French are stressing that they are more of a Pacific power than the British with 7,000 troops protecting two million citizens spread across several territories. This week the French also announced the sale of a frigate to Greece. Macron is painting the sale as a move towards a European defence agency by claiming it is meant to protect the Eastern wing of the EU. But this has not impressed either the US, the rest of NATO or EU partners because the deal is clearly aimed at supporting Greek claims in the Aegean over incursions by fellow NATO member Turkey. Then there is Africa. For several years France has had 5,000 troops supporting Sahel countries threatened by Islamic Jihadists. Joining them have been a limited contingent of British and Germans. But the war effort is unpopular in France, so Macron has announced a reduction to 2,500 troops with greater participation from other European countries. This has infuriated the Sahel governments. Malian Prime Minister Choguel Kokalla Maiga told the UN General Assembly that France was abandoning his country and it was quickly revealed that Mali was turning to Russian mercenaries to replace the French. The first Russian helicopters and weapons arrived on Friday. France, Britain and Germany have warned the Malians that they are supping with the devil. If Macron plans to project international political power through the barrel of a gun, he must find a way of securing domestic support.

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