Monthly Archives: February 2014

Britain, Business, Economic, European Union, Government, Politics, Society

UK firms need direction over EU reform…

EU REFORM

Since the start of the year the row over Europe has intensified.

From speeches to signed letters, the Europhiles and Europhobes have played out and made known their disagreements in front of the press and media.

There is no doubt that renegotiation and reform of the EU is necessary. The majority of businesses are determined to see a revamped relationship.

But it has been a year now since the Prime Minister first announced his intentions on Europe, and UK firms are no clearer as to what this means in practice.

Maintaining the status quo and tinkering with some of the existing bureaucracy might seem attractive for some, but it is simply not realistic.

The eurozone, for one, is rapidly moving off in a direction of its own making. Through inter-governmental agreements – fiscal, banking and ever-greater political union – the single currency bloc is set to leave out other EU countries. Specific trading blocs between EU countries within the eurozone are likely to emerge, dismantling the free market as we understand it.

Such an outcome is hardly desirable for British firms. In a survey of over 3,000 businesses last September, only 7 per cent felt this would offer a positive future. Some 57 per cent said that re-calibrating the UK’s relationship would have the most positive impact on Britain’s business and economic interests.

On this basis, the Prime Minister has a clear mandate from business to try and rebalance Britain’s relationship with the European Union.

Even though companies are trading with the wider world, the cold hard truth is that the EU remains a significant trading partner. EU membership grants Britain advantageous access for the sale of goods and the movement of capital and people across national borders.

Firms want to remain in the single market and see it widened and strengthened, to include, for example, the services sector.

So if the Government is to succeed in reform it is vitally important we seek allies within the EU who have a similar desire for change.

It is equally important, too, that the EU knows that the UK is prepared to leave by taking its chances with faster-growing economies. A cacophony of doom regarding the consequences of exist is both irresponsible and misleading, and would undermine the negotiating position of those seeking to enact reform.

Leaving the EU is certainly not the preferred outcome for most businesses and would be very disruptive, but disruption creates opportunities as well as threats. Our ongoing trading relationship with the EU would be influenced positively by the exist negotiations, not least given the massive current deficit the UK has with the EU.

Regulations from Brussels have long been a millstone round the necks of British firms, in spite of the recent reduction in red tape.

Some will want to see action on areas such as employment law, health and safety, and regional development. Others will be hoping for changes in areas like justice and home affairs.

Whilst the Government has indicated that it is serious in its intentions, what remains in doubt, though, is what will constitute a win for the British people. So long as the Government fails to specifically announce what areas it will seek to renegotiate and what the reforms will look like, the government’s rhetoric will be perceived as an act of political opportunism right through to the 2015 general election.

UK business needs as much certainty as possible to provide the landscape on which to build long-term, sustainable growth. This is needed if a revival of our economic fortunes is to be realised.

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Foreign Affairs, Government, History, Middle East, Syria, United Nations, United States

The US Secretary of State faces challenges, but is John Kerry sufficiently supported?

US FOREIGN POLICY

John Kerry has illuminated the paradox of current American foreign policy. No where is this more embodied than in the Middle East, the region that continues to consume so much time and effort for the US Secretary of State. Rarely has the diplomacy and energies spent been as active and as bold as they are today. But flamboyant charges that the US is enfeebled and in retreat are also accusations that are running in parallel.

Mr Kerry is tacitly involved on three immensely challenging and overlapping fronts: his efforts to end the bloody civil war in Syria; the continued search for a nuclear deal with Iran that might end more than three decades of hostility between Washington and Tehran; and, the renewed and engaging process to secure a two-state settlement between Israel and Palestinians that has eluded negotiators since 1948.

An analysis of the progress being made will reveal a mixed picture. Encouragingly, the best advances have been made with Iran, with an interim deal that parts of the country’s nuclear programme have been frozen for a period of six months. This deal could yet unravel, but the U.S. and Iran are engaged in a process of constructive dialogue.

To the other extreme, Syria constitutes a total failure. The recent Geneva conference which could not even deliver an agreement on bringing humanitarian aid to tens of thousands of civilians, trapped by the savagery of the conflict, epitomises this rank failure. Vladimir Putin’s Russia continues to arm and supply the regime, while progress on securing Assad’s chemical weapons and stockpiles is, at best, described as being limited. More accurately, it would not be amiss to say that progress in removing Assad’s arsenal has been brought to a stuttering halt.

The current state of play in dealing with the Israeli/Palestinian conflict is less clear. Whilst Mr Kerry has been doggedly determined in keeping talks going, his indefatigability may be perceived from different angles of thought. For those who support him, this involvement and persistent diligence is proof of resolve. It is also recognition of his courage by placing his prestige on the line in a way that many of his predecessors never did. For the detractors, though, the US Secretary of State is merely on an ego trip, driven largely by the naïve belief that hope will triumph over experience. The more impartial may wonder whether Mr Kerry’s goal of a ‘framework’ plan – an agreement by the two sides on the shape of the final agreement with the details being worked out later – is really any different from the other diplomatic formulae’, such as the ‘road maps’, that have littered nearly seven decades of futile peacekeeping.

Underpinning Mr Kerry’s efforts on all three fronts is the ‘damned-if-you-do, damned-if-you-don’t’ scenario faced by the US in the Middle East. Most expect America to lead, even if its ability to shape and bend the region to its will is often grossly exaggerated. When the U.S. has taken decisive action, as in Iraq or Afghanistan, it has been accused of being a blundering warmonger. Following on from these two long and costly interventions, Americans will have no appetite for another. Yet, when it steadfastly refuses to robustly intervene in Syria (or to a lesser extent in Egypt), it is denounced for abandoning its responsibilities, and of condoning and supporting human rights abuses. It can hardly wave a magic wand and expect all to be well.

American history tends to suggest that the most effective Secretaries of State tend to be those that have been closest to their respective Presidents. Henry Kissinger, for instance, under President Richard Nixon, or James Baker who held post during the reign of President George HW Bush, spring to mind. Secretary of State Kerry is barely a year into his tenure, and so it is too early to say whether he will join this company. Success, however, on one of the three major challenges he is faced with would amount to a distinguished and noteworthy achievement.

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Britain, Foreign Affairs, Government, Intelligence, Military, National Security, Politics, Society, United States

Reconfiguring Defence for reasons of a changed world…

DEFENCE & FUTURE OVERSEAS PARTNERSHIPS

Over the course of the last half-century defence spending has attracted and been a hot issue of contention. This has been brought to the fore in recent times, through government rounds of budget and expenditure reductions. Most notably, the 2010 Strategic Defence and Security Review and the cuts to overall manning levels to the armed services have brought the issue into sharp focus. Critics argue this has seriously skewed our defence posture and capability towards mammoth (and massively expensive) commitments such as upgrading and maintaining Trident and the development of new aircraft carriers.

Last month, former US defence secretary, Robert Gates, asserted that defence cuts in Britain have left the UK unable to be a ‘full partner’ in future military operations with the United States. As a result of defence cuts, Mr Gates believes that the UK no longer has ‘full-spectrum capabilities’. This, he says, will affect the UK’s ability to be a full partner and will change the dynamics of how operations are conducted in the future. His comments came in the wake of remarks by General Sir Nicholas Houghton, the Chief of the Defence Staff, who said that manpower is increasingly being perceived as an ‘overhead’ and that Britain’s defence capabilities have been ‘hollowed out’.

It is right that these cuts have been questioned in the UK. The concerns over the knock-on direct and indirect effects on local economies, and the dangers of global military over-stretch, have been well aired. At the same time, however, many have long queried the need for such a large and over-bloated defence budget, particularly when our appetite for overseas engagements in the wake of Iraq and Afghanistan conflicts has greatly diminished.

The world has changed, too. Britain is certainly not the global power she once was. There is perhaps room for debate on the reasons for this relative decline, but some truths are incontrovertible. The growing focus of global power and wealth from West to East, the profound change in the nature and structure of armed conflict and the threats that we face to our national security are all factors that must enter the equation if we are to explain and account for how the world has changed and how, as a consequence, our influence has declined. Our reduced military capabilities reflect in large part the need to bear down and address our massive budget deficit and public debt. Such considerations have, as Gates himself stated, also forced spending reductions in the US.

But what is also true is that Britain is less committed in performing the role of being an acquiescent subordinate to the United States in international affairs. Widespread disquiet has also stemmed from the ubiquitous relationship that US intelligence has with Britain’s intelligence services and the close links that have existed between America’s National Security Agency (NSA) and Britain’s communications and listening posts at GCHQ in Cheltenham. In light of these considerations, it is only right and proper that the UK’s military relationship with the US be subject to re-examination.

Public ambivalence is not likely to stop there, either. It should also lead in due course to a more searching examination of Britain’s future commitment to Trident and what justifications there are in keeping a nuclear deterrent. Particularly so, given the changing political landscape in the UK and the very real prospect of Scotland (where Trident and the nuclear deterrent is housed against its will) becoming an independent nation. The referendum for Scottish independence is to be held this year in September.

It may be tempting to compare our defence capacity with what the country was able to sustain in the past and no-doubt some will rue Britain’s reduced capabilities. But the fact remains that the world has changed and with it the shifting balance of global power. It is to the future, not the past, which we should now look in how our overseas partnerships are formed. Britain’s defence arrangements will become a reflection of these changed requirements.

 

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