Category Archives: European Union

European Union, Government, Politics, Russia, Society, Ukraine, United States

Eastern Europe is growing stronger amid the war in Ukraine

EUROPEAN UNION

Intro: The balance of power in the European Union is shifting eastward

AS 2022 draws to a close, Russia’s war in Ukraine rages unabated. Russian President Vladimir Putin sees what he still calls a “special military operation” as a life-or-death contest with the United States and its NATO allies. The West, for its part, considers the war a threat to its own security and has thrown its weight behind the defence of Ukraine’s territorial sovereignty.

There is an inherent problem, however, with framing the war as a clash between the US and Russia. It underplays the spirit, resilience, and enormous daily sacrifices of Ukrainian’s in resisting their mighty neighbour bent on re-creating a Moscow-centred imperial order. Had there been no resolve among Ukrainians to fight back aggression and revanchism then no amount of military and financial aid for Kyiv would have been sufficient to thwart the Kremlin’s ambition. 

That Eastern European countries and nations have agency and are more than pawns in the power struggles of larger players is imperative to understand. And it goes well beyond the example of Ukraine.

Poland has become a much more significant and influential player in European defence than it ever was. It is not just the fact that it is a front-line country which takes in many displaced refugees fleeing war from Ukraine, nor that it provides a land route to supply its neighbour with weapons and humanitarian aid, but, strategically, Poland is also ramping up its defence spending from 2.2 per cent of its gross domestic product to a record 3 per cent in 2023. That is one of the highest rates within NATO. The money will go into modernising and expanding its military forces and could make the Polish army one of the largest on the continent.

Warsaw is purchasing tanks and self-propelled howitzers from South Korea in a deal worth $5.8bn and will acquire state-of-the-art F35 fighter jets from the US in the future.

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Britain, European Union, Government, Politics, Society

The tawdry show of Brexit goes to the brink

BREXIT

The decision by Prime Minister Theresa May to delay the “meaningful” Commons vote on her Brexit deal until March 12 – just 17 days before the UK is due to leave the EU – is, unquestionably, a gamble that takes things to the very brink. It is a colossal gamble, but one in which Mrs May had little option but to take.

MPs on all sides will finally have to choose between Mrs May’s deal, No Deal, or effectively no Brexit. This has removed all bluster and political manoeuvring. It leaves just stark choices.

A rehashed motion from Labour’s Yvette Cooper and Tory Nick Boles which is expected to pass the chamber tomorrow is likely to concentrate minds further. That motion says that if no deal is agreed before March 13, Article 50 – our formal departure from the EU – should be delayed, taking No Deal off the table.

But this has two huge drawbacks. It removes a crucial bargaining chip with Brussels. And while saying what Brexit shouldn’t be, the motion offers no viable plan for what it should be. Those who support Mrs May’s withdrawal agreement will suggest, as they have consistently done, that the only plan that is viable, honours the referendum result and averts No Deal, is the Prime Minister’s plan.

Whilst the odds are daunting, there may still be a way in which she is able to get it through.

First, the EU must offer legally binding assurances over the so-called Irish backstop to satisfy the Democratic Unionist Party that Northern Ireland’s place in the UK is not under threat. Without that, the deal is dead – with potentially calamitous consequences for the whole of Europe.

If the DUP is assuaged, Tory hardliners in the European Research Group (ERG) led by Jacob Rees-Mogg, may be persuaded to back their leader – especially in light of the Cooper-Boles amendment which could stop Brexit altogether.

True, some ERG members appear so implacably opposed to the deal that almost nothing would change their minds.

But with Labour in open rebellion against its leader, some Opposition MPs – especially those from Leave-voting areas – may be prepared to defy the Corbyn whip and make up the numbers needed to push the agreement through.

To be realised, this will require good faith on all sides – something conspicuously lacking so far. No one is totally happy with the deal, but it provides a pragmatic compromise. Tory MPs especially need to rediscover the virtues of party loyalty and service to their constituents if they wish to stay in office and by remaining the ruling party – by backing it.

The clock is ticking louder than ever towards March 29.

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

The EU has a natural propensity to haggle

BREXIT

LONG before the people of the UK voted to leave the EU in the 2016 referendum, before the term Brexit had even been coined, it was Grexit that was preoccupying the minds of Eurocrats.

Greece came close to crashing out of the single currency on at least four separate occasions after a vast black hole opened up in the country’s accounts in 2009.

At one stage in 2012, the British banknote printers De La Rue was asked by the government in Athens to make contingency plans to print new drachma notes (Greece’s pre-euro currency) in preparation for what many called the “Double D” solution to the economic problems Greece was facing: default on the country’s debt and devaluation with the return of the drachma.

Today, Greece remains one of the 17 members of the eurozone – and this fact alone should lift the spirits of the UK negotiators. Armed with her newly acquired Parliamentary majority, Theresa May returns to Brussels seeking at the very least to put a time limit on the Irish backstop deal she signed up to.

Each time a Greek default loomed into view, threatening the stability of the eurozone and raising the possibility that Italy or one of the other member countries might also head for the exit, the main protagonists – the hard-line German-dominated European Central Bank (ECB) in Frankfurt and the European Commission in Brussels – caved in and authorised a bailout.

Last-ditch negotiations, usually conducted over a weekend when the financial markets were closed, would typically go into the early hours of Sunday morning.

Late-night deals were hatched against a backdrop of TV screens showing central Athens on fire and anti-austerity protesters ripping up flagstones in the capital’s Syntagma Square.

The first £38bn bailout was agreed in the dead of the night on April 23, 2010, by the troika of the ECB, the European Commission and the International Monetary Fund. It was one of several rescue packages for Greece, some of which required a change of government to get them over the line.

 

WHAT happened to Greece is typical of the Eurocrat tendency to fudge, to muddy the waters and eventually to seek compromise in a crisis situation.

Indeed, the history of the EU is littered with examples of Britain locked into eleventh-hour talks with eurocrats as the UK has sought changes in our terms of membership.

John Major worked through the night in 1991 to secure Britain’s opt-out from the social chapter of the Maastricht Treaty which would have dictated working conditions in Britain and could have undermined the labour market reforms pioneered by his predecessor Margaret Thatcher. Indeed, she herself was a fierce negotiator in organising rebates from Brussels from the UK’s oversized contributions to the EU budget. In 1984, in the imperial grandeur at the historic palace of Fontainebleau in France, European leaders painfully conceded the famous British EU budget contribution rebate – or as the French sarcastically called it “le chéque Britannique”.

And let’s not forget that in the teeth of his promise to hold an in/out referendum, David Cameron returned from Brussels in the early hours one day in February 2016 with draft reform proposals agreed by European Council President Donald Tusk which he claimed would give Britain “special status”.

In the event, the pledges made by Brussels were so anaemic that they failed to convince British voters that sovereignty could be maintained by voting remain – a huge mistake by the eurocrats who failed to recognise the strength of anti-EU feeling among large swathes of the UK population.

Both in national negotiations and in commercial transactions, reaching an accord more often or not comes down to the wire.

With the clock now ticking inexorably to March 29, the desperation of the leaders of the other 27 EU countries to avoid an economic and financial crisis at the very moment that Germany and the eurozone are facing the bleak prospect of recession may be Theresa May’s best hope. This is regardless of how unyielding Brussels negotiators have been to date and their willingness to play havoc with business confidence and financial stability by its brinkmanship.

 

THE potential loss to Brussels of a £39bn one-off payment to a Commission cash starved as it is following years of economic slowdown, could potentially be a bargaining chip for the Prime Minister in the last-chance saloon.

In the final analysis, the anecdotal evidence of what the late-night sessions in Brussels, Nice, Maastricht and other destinations should tell us, is that it’s Germany and, to a lesser extent, France which decide.

Besieged by increasingly hostile populist movements, neither Berlin or Paris will want to make political life tougher than it already is.

The politics of the EU, at their most raw, are little different to those of the bazaar. The natural tendency should be now to relish an aggressive haggle but then, eventually, to compromise.

. See also Should we really despair over Brexit? Europe is in a mess.

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