Category: News Room

February 2018

By Thierry de Montbrial, The Security Times

There are two main reasons the United States will maintain its primacy on the world stage. The first is that, in a world of weak or broken identities, theirs remains strong, despite racial tensions and the growth of social inequality. The US is a land of immigrants, who swept the plate clean – almost – of its indigenous populations. From the outset, Americans have been bound together by a sacred text, the US Constitution, which has survived more than two centuries of adventures and crises.

The most recent crisis is Trump’s electoral college victory following a campaign marked by a populism that broadly rejected all traditional political elites. But the new president also represents the American Dream. His slogan “Make America Great Again” and his desire to serve the national interest according to right-wing gospel are not wholly out of tune with much of the US populace, despite the anger and disgust of a majority of voters.

The political and media elites, and much of the population as a whole, have maintained an unshakeable faith in the country’s institutions. Any president that fails to respect them would be voted out of office. That issue has many ramifications. For example, regardless of the 45th president’s intent to stop Mexicans from illegally crossing the border, the US will remain a land of immigration, yet one comprising a rigorous framework premised on the immigrants’ commitment to obey American law as it flows from the Constitution.

This is something altogether different from, for example, French-style ideological liberalism, which prioritizes unconditional “diversity.” The Constitution’s role as the cornerstone of American identity cannot be overemphasized. Only if an active minority were to one day transgress it, would there be reason to embrace serious concern for the country’s identity and future. That day has not yet come.

The second reason for the primacy of the United States is its effective “grand strategy” of means based on a simple idea: in all circumstances, the US armed forces must be larger than any imaginable foreign coalition, regardless of any current constellation of allies and adversaries. The arms industry and, more generally, the high-tech activities it encompasses are top priority.

And there’s more. Considerably well protected by its geography, the US has always aimed for energy independence and increasingly overt dominance in terms of information control. Technology has allowed the US to achieve both goals. The only possible challenger in the foreseeable future is China, which is striving to catch up.

The acronym GAFA provides an apt summation of the situation: search engines (Google), mobility (Apple), social media (Facebook) and e-commerce (Amazon), not to mention Microsoft. The singular combination of an unparalleled entrepreneurial culture with the active support of the government has enabled the US, and in particular California, to become the undisputed champion of big data, the internet and innovation. No country, not even China, can hope to overtake it anytime soon. The US has the whole world under surveillance and, militarily, can strike any target on the globe while bearing next to no risk – except in the extreme event of war with other nuclear powers.

America dominates the digital world, which is still embryonic but growing at a brisk pace. Its dominance in this realm is such that it can afford to make mistakes that the rest of the world cannot. While it is not immune to cyberattacks, unpleasant revelations from Wikileaks, disinformation campaigns (whether or not they can be categorized as post-truth) or other attempts at destabilization, the US is currently better prepared to overcome such setbacks than any other country in the world.

And yet, the United States is in no position to govern the world. Firstly, this would not be compatible with its ideology, and, even if it were, the country has frequently changed course throughout its history. Protecting its territory and national identity; furthering its economic interests from a position of strength; making and unmaking alliances accordingly; reserving the sovereign right to strike abroad without fearing a counterstrike; and fostering the spread of its values to boost its soft power are the implicit, unchanging foundations of its foreign policy. Not only is it less volatile in the long term than it may seem to be in the short or medium term, it also always reflects a unique, pragmatic combination where interests and values dovetail.

THIERRY DE MONTBRIAL

February 21, 2018

Fathallah Oualalou, OCP Policy Center

2018 marque incontestablement un tournant dans l’évolution de l’économie mondiale. L’Europe, après avoir amorcé une sortie de crise en 2017, pourrait entrer dans une phase d’expansion durable notamment grâce à une augmentation structurelle de la production industrielle, et au projet réformiste et pro-européen porté par le couple franco-allemand. L’Asie, elle, confirme sa position de moteur incontournable de l’économie mondiale, avec trois pays passant en 2018 dans le top 5 des Nations (Chine, Japon et Inde). Ces évolutions transforment le système économique mondial, et nous interrogent, nous Marocains, Maghrébins, et Africains, sur notre capacité à négocier avec cet environnement en mutation.

Lire le Policy Paper

May 15, 2018

Uri Dadush, OCP Policy Center

Looming trade wars unsettle investors and endanger the global economic upswing. The long-term consequences of a withdrawal from global markets, were it to occur, would be much worse. Productivity growth, already low, could turn negative. Citizens would see inflationary pressures escalate with the price of imported products, and their living standards would decline. Large investments have been made in value chains that span the world and turning back would be enormously costly. To avoid this catastrophe, one must look beyond the policy drama in Washington and instead focus more closely on the underlying causes of the trade tensions. The fault lines of the world trading system were visible long before the arrival of Mr. Trump and his departure from the scene will not make them disappear. When his administration ends, whether in January 2024, January 2020 or sooner, truncated by his legal troubles, there may be a return to civility in trade relations, but not to normality.

Three facts should by now be evident: President Trump is a convinced protectionist; he is determined to use American power to exact concessions without regard to World Trade Organization (WTO) rules; and his trade policies bitterly divide Americans. While his base, mainly composed of less educated white male workers whose incomes have stagnated over decades, continues to support him, the domestic opposition to his protectionism is formidable. It consists of the export interests, such as farmers and the high-tech sectors, the retail and logistics firms that depend on imports, many firms that are heavy users of imported parts and raw materials and that are part of global value chains, export-oriented States, the (regrettably largely silent) Republican majority in Congress as well as many Democrats, and the near-totality of the economic and political commentariat.

The President’s bullying and his open disregard of these concerns makes it clear that appeasement will not work, and that he must be confronted – and sooner is better. Those who support his protectionism must be made to realize that tariffs will trigger retaliation and that they will result not only in higher prices for consumers, which initially will be small and diffuse, but also cause large job and profit losses to firms and groups that depend on exports. Put simply, the political cost of tariffs must exceed the political gain of imposing them. Only then will Mr. Trump be deterred from his irresponsible course.

As a free trader, I do not argue for a hard line lightly; In my view, it represents the course that is most likely to minimize the damage to the world trading system before it is too late. Nor does my espousal of a hard line mean that the United States is the only one responsible for the current impasse. The United States remains, even today, the world’s most open large economy, and the causes of trade tensions extend well beyond America. They run much deeper than Mr. Trump. In the next section, I attempt to identify the deeper causes of the disease.

Four Growing Challenges to The Trading System

The present trade tensions reflect four sets of problems, none of which are new, and none of which are amenable to a quick fix. In order of importance these problems are: the uneven sharing of the benefits from the current era of globalization and technological advance, especially but not only in the United States; Chinese exceptionalism; macroeconomic imbalances; and the dysfunction of the World Trade Organization (WTO). Each of these issues have been the object of extensive study, including dozens if not hundreds of academic papers, and they have also been the object of many reform attempts. Yet, while progress has been made in some areas, each issue remains, and the trends, unfortunately, are not promising.

Inequality. Much of the rise in inequality and the increased economic disruption, which stirs the discontent with globalization, is due to unskilled-labor-saving technology, not trade. However, the disruptive effects of trade and technology interact and reinforce each other in many ways: for example, cheaper transport and communication facilitate outsourcing and all forms of trade; and, firms which are confronted with new sources of low-cost competitors respond by automating and innovating. Technology facilitates trade, and trade prompts technology adoption. Separating the effect of these two powerful forces is hard and workers who are employed in sectors exposed to international competition and who lose their jobs naturally find it easier to blame foreigners than to blame robots. The largest disruptive effects of trade liberalization may be behind us, as trade is already largely free, and there does not appear to be another China about to rise (India is a candidate for the next great trade disruption but its likeliness is a distant and uncertain prospect). Hence, ironically, the next wave of job losses is just as likely to come from increased protectionism as opposed to deriving from the trade liberalization so reviled by the anti-globalists.

However, there is no sign that technology and the other forces driving increased inequality are slowing, on the contrary. Labor-saving technology (artificial intelligence, autonomous vehicles, etc.) is, according to a recent Mc Kinsey report and to others, already capable of displacing hundreds of millions of workers. Furthermore, in our globalized IT-driven economy, the returns to innovation tend to accrue to small groups of people. And the return to capital – whose ownership is highly concentrated – continues to outstrip the rate of growth of GDP by a wide margin, as argued by Tomas Piketty and confirmed by recent empirical studies. Though governments should be fighting these trends, the recent tax, spending and health-care reforms in the United States, which is the advanced country with the most unequal income distribution, do the opposite. The reforms benefit wealthy individuals and companies far more than they help the average American. Even though social spending in the United States is very low by the standards of other advanced countries, in coming years rising budget deficits will put even greater pressure to reduce it.

China. A great paradox and unprecedented feature of the current era is that the world’s largest exporter and manufacturer (the Chinese manufacturing sector is as large as that of the United States and Japan combined) remains a state-driven developing country. Even as its firms conquer world markets, China’s average tariffs are two to three times higher than those of the European Union, Japan, and the United States. Although many Chinese firms already operate at the cutting edge of technology, and China is increasingly enforcing intellectual property rights at home, it continues to be accused by scores of firms and observers across Europe and the United States of forcing technology transfer from foreign investors and to engage in widespread intellectual property theft. Although the share of State Owned Enterprises in China’s employment has declined sharply in past decades, it remains far higher than that of any large economy, and these enterprises are widely believed to benefit from preferential non-transparent credit awarded by the formal banking system which also remains state owned. As Chinese firms penetrate global markets with exports and, increasingly with acquisitions and greenfield investment, the differences between the Chinese system and that of its advanced country competitors have become an increasing source of friction.

On one crucial issue, China has changed. China’s current account surplus has declined massively, from around 10% of GDP a few years ago to a shade above 1% of GDP projected by the IMF for 2018. To this extent, China is making rapid progress towards a more balanced growth model, one that is less reliant on exports and more reliant on domestic demand. In fact, for countries around the globe China is well on its way to becoming their largest export market by a wide margin. However, given the economy’s large presence on world markets, its high investment rate and rapid growth as both importer and exporter, the tensions associated with Chinese exceptionalism are more likely to increase than abate. As the old saying goes, it is difficult to sleep next to an elephant, whichever way it turns.

Imbalances in designing the International Monetary Fund (IMF) at the end of World War 2, the great British economist John Maynard Keynes and his American counterpart Harry White had imbalances, and the risk they posed for international macroeconomic stability and the trading system, at the center of their preoccupations. Tensions over large current account deficits and surpluses are always present. However, in recent years, the dramatic narrowing of China’s current account surplus and of the United States’ deficit had taken some steam out of the issue. But China’s large bilateral trade surplus with the United States remained a source of tension, and President Trump’s obsession with bilateral imbalances – whose importance economists dismiss – has added a lot of fuel to the fire. Yet it is not at all clear what China could do to significantly and quickly reduce its bilateral trade surplus with the United States, an outcome that Trump’s negotiators are demanding.

Germany’s very large current account surplus, which is nearly as big as that of China’s and Japan’s combined, is a more recent phenomenon, but it has become an equally important source of tension, not only with the United States but with other members of the Euro zone, especially the struggling countries of the South. To a significant degree, Germany’s surplus is the artificial result of the creation of the Euro – since had Germany retained the Deutsche Mark, it would almost certainly have seen a very large appreciation. It is true that Germany’s monetary, exchange rate and trade policies are in the hands of European institutions, so outside Germany’s direct control. But there is no sign as that Germany is prepared to undertake the increased government spending, higher wage policies, or tax reforms that would be needed to significantly dent its current account surplus and provide some relief to its Euro zone partners and help defuse trade tensions. Unfortunately, with the new tax and spending policies in the United States, the nation’s current account deficit is projected to widen again in coming years, spelling even more trouble in the future.

WTO. The institution which is the bedrock of the orderly, open and predictable trading system that emerged after World War 2 has – contrary to the popular narrative – registered significant successes since its establishment in 1995 as a follow-on to the GATT. Most notable are the expansion of its membership which now covers 98% of world trade (versus some 85% at inception), the Bali Trade Facilitation Agreement, the Government Procurement Agreement, the Information Technology Agreement and its extension, the prohibition of agricultural export subsidies, and of voluntary export restraints. However, the WTO’s incapacity to move forward on wide -ranging multilateral negotiations in the Doha agenda and to deal with many long-standing trade impediments, such as agricultural subsidies and barriers to services trade, and even less to take on new issues such as electronic commerce, has meant that its negotiating arm has fallen behind the times.

Its other major function, the dispute settlement system, has continued to be extensively used, but has come under increasing challenge, mainly from the United States, for “overreaching” and “gap-filling,” i.e. adjudicating on issues or in a way that goes beyond that which negotiators had agreed. All this preceded the arrival of Mr. Trump. Continuing a policy of the Obama administration, the United States is now refusing to replace the members of the Appellate Body of the WTO as their terms come due. This means that the Dispute Settlement system could effectively cease to function before the end of 2019. Moreover, three recent measures undertaken by the United States are almost certainly in violation of the WTO, namely the spurious appeal to national security in raising tariffs on steel and aluminum imports, the negotiation of voluntary export restraints on the same with Korea, and the section 301 action against China. Obviously, the effective demise of the Doha agenda, the flouting of WTO rules by its emblematic member and the United States’ increased reluctance to support its adjudication is bound to weaken it further. A de facto exit of the United States from the WTO leading to the organization’s demise or to a truncated WTO is no longer unthinkable.

This panoramic of the causes of the current trade tensions underscores the importance of a coordinated and broad-based approach in resolving them, such as could be undertaken by the G-20 context but looks distinctly unlikely at present. All this strongly suggests that things will get worse before they get better. Far from going away, the present challenges to the trading system are likely to become even more pressing in the future.

Drawing the Threads: Implications for Policy

Standing up to Mr. Trump is not easy. It risks escalation. But the greater risk is condoning polices which are likely only to result in more and more protectionism and which undermine the legal foundations of the present system. The Trump administration will end, perhaps sooner than later, and the next administration, whether Democrat of Republican is unlikely to be as disruptive or reckless as the current one. Even so, many of the trade concerns that are prevalent today will continue.

There is no easy solution to the issue of inequality and disruption caused by globalization and technology. Policy-makers must step up their efforts to explain the benefits of trade, while at the same time strengthening the mechanisms that protect the most vulnerable. However, there are limits to social assistance and the most promising long-term solutions are those that promote mobility of workers, which above-all means building skills and flexibility. In a forthcoming note prepared under the aegis of the T20, my co-authors and I have elaborated a set of proposals intended to mitigate the cost of adjustment to international trade shocks.

China must accelerate its market reforms, engage in more far-reaching trade liberalization and privatization, and take more aggressive measures to boost consumption. If it is, one day, to lead the reforms of the trading system, as its size and dynamism suggest it should, it must first resolve its internal contradictions. Germany must, for its own sake, enhance those of its Southern European partners, and for trade peace, increase public spending, raise its public sector and minimum wages, and encourage more domestic investment to bring down its current account surplus. The United States will sooner or later have to reverse its tax cuts on the wealthy to contain inequality and reverse its policy of fiscal stimulus to reduce its budget deficits. These measures will help contain the United States’ national overspending which lies at the root of its current account deficits.

The members of the WTO need to find ways to revitalize its negotiating arm – for example by undertaking multiple sectoral or plurilateral agreements. They should also prepare for a contingency where the United States effectively abandons the Dispute Settlement Understanding. At the same time, nations should accelerate their efforts to conclude bilateral and regional trade agreements that are complementary to the WTO. These agreements are very important in consolidating and deepening trade liberalization and can provide an insurance policy against a resurgence of protectionism. For example, members of the European Union, such as Belgium now conducts about 80% of their trade under regional and bilateral trade agreements.

As already said, trade tensions are likely to get worse before they get better. The current impasse may persist over many years, but my expectation (or perhaps more accurately, my hope) is that ultimately the international community will avoid a return to the trade wars of the 1930s and to the import substitution practiced in many parts of the world just a few decades ago. I do not base my cautious optimism on confidence in the capacity of policy-makers to deal comprehensively and rapidly with the issues – I expect that they will do what they can under severe political constraints and, at best, muddle through.

I base my hope on the forces that are pushing for a more integrated global economy, and which are becoming stronger with every passing day. The same information, communication and transportation technologies that are disrupting our societies are also bringing firms and consumers closer together irrespective of national borders. In addition, firms and consumers are more aware than ever of the opportunities of arbitrage across the world market in goods, services and capital. In such a world, it is increasingly difficult to separate free trade from individual freedom. History has shown again and again that those that choose to withdraw behind national borders in the face of the twin forces of markets and technology, sooner or later succumb to them.

6 mai 2018

Virginie Robert, Les Echos

En cas de retrait américain de l’accord nucléaire, Téhéran devra compenser l’incertitude créée en réformant son économie selon le FMI.

« Si les Etats-Unis quittent l’accord nucléaire, l’Iran doit accélérer le rythme de ses réformes et notamment le toilettage de son système bancaire », a prévenu Jihad Azour, directeur du Moyen-Orient et de l’Asie centrale au FMI, dans une interview à Bloomberg. Le pays est en effet toujours sur la liste du GAFI pour financement du terrorisme et blanchiment d’argent. Mais pour l’institution, qui a publié en mars s on rapport de l’article IV sur l’Iran , « il faut un paquet de réformes complet qui ancre la stabilité macro-économique, développe le secteur privé et s’assure que les ressources bénéficient à tous les citoyens ».

Malgré les incertitudes posées par le contexte international, le président iranien Hassan Rohani conserve des objectifs élevés. « La croissance économique atteindra l’an prochain 6,5 %, secteur pétrolier inclus, et 7 % sans le pétrole », a-t-il déclaré en présentant le projet de loi de finances pour le prochain exercice fiscal qui court de mars 2018 à mars 2019. Le FMI estime pour sa part que l’économie iranienne devrait croître de 4,3 % sur l’exercice 2017-2018 et de 4 % l’exercice suivant.
Le secteur du bâtiment repart

Le fort rebond de l’économie en 2016 avec la reprise des exportations de pétrole s’est étendu l’an dernier au-delà du secteur énergétique. Pour la première fois en six ans, le bâtiment a renoué avec la croissance, et le dynamisme du secteur des services s’est confirmé. En 2017, « la stabilisation de l’inflation a permis de soutenir la consommation des ménages », note la Coface . Mais la population iranienne s’impatiente du peu de fruits de la politique d’ouverture du président Rohani. Le régime a été ébranlé par les protestations du mois de janvier qui ont notamment dénoncé la corruption et le coût de la vie. Et malgré l’importance économique de Telegram – ils sont plus de 20 millions d’Iraniens à l’utiliser, y compris pour faire du commerce – une décision de la justice iranienne a fait fermer l’accès par VPN à la messagerie cryptée de peur de voir les contestations reprendre. Bien que le gouvernement iranien « n’approuve pas » ce blocage, a indiqué samedi le compte Instagram du président Hassan Rohani, se distanciant une nouvelle fois des ultra-conservateurs.

De leur côté, les entreprises étrangères sont de plus en plus réticentes à investir en raison du risque de suspension de l’accord nucléaire et par crainte de tomber sous le joug des sanctions extraterritoriales imposées par les Etats-Unis. Celles qui s’y sont aventurées se plaignent du double taux de change et souhaitent des réformes du marché du travail, du système fiscal ainsi que la mise en place d’une structure pour arbitrer les différends commerciaux.

V.R.

March 4, 2018

Steven Erlanger, The New York Times

BRUSSELS — A year ago, the self-styled global elite gathered at Davos, shaken by the election of Donald J. Trump, who made no secret of his contempt for the multilateral alliances and trade that underpin the European Union.

Then up stepped the Chinese president, Xi Jinping, promising that if America would no longer champion the global system, China would.

European officials and business leaders were thrilled.

But a year later, European leaders are confronted with the reality that Mr. Xi could also be a threat to the global system, rather than a great defender. The abolition of the two-term limit for the presidency, which could make Mr. Xi China’s ruler for life and which is expected to be ratified this week by China’s legislature, has punctured the hope that China would become “a responsible stakeholder” in the global order. Few still believe China is moving toward the Western values of democracy and rule of law.

Instead, many European leaders now accuse China of trying to divide the European Union as it woos Central Europe and the Balkan states with large investments. They are also wary of how China has become more aggressive militarily, in espionage and in its investment strategy abroad— with targets including its largest trading partner in Europe, Germany.

For decades the European Union has benefited from the global system created by the United States after World War II, as has China. Even as Russia under President Vladimir V. Putin has remained a revanchist power, trying to destabilize the bloc and win back territories lost in the Cold War, China’s economic success has depended on stability and order — which benefited Europe, too.

But the prospect of Mr. Xi as ruler in perpetuity has scrambled the equation. Many European leaders distrust Mr. Trump, who says he sees them less as allies than as competitors. But if moving closer to China once seemed like a smart hedge, at least while Mr. Trump was in office, now Mr. Xi also presents a problem — and he may not be going away.

“We’re at an inflection point,” said Orville Schell, director of the Center on U.S.-China Relations at the Asia Society. “The Western world now understands that we have to take China’s push out into the world much more seriously than we have in the past.”

Mr. Trump’s declaration that he will impose stinging tariffs on imported steel will hurt Europe more than China, another example of how Europe is getting caught between Washington and Beijing.

European political leaders were already growing wary of Chinese intentions, especially given the vacuum of foreign policy leadership from the Trump administration and the persistent meddling from Russia. Last month, Foreign Minister Sigmar Gabriel of Germany warned that China was pursuing its own model of world order and attempting “to put a Chinese stamp on the world and impose a Chinese system, a real global system but not like ours, based on human rights and individual liberties.”

Mr. Gabriel was especially concerned about China’s “One Belt, One Road” initiative, a huge infrastructure project promoted by Mr. Xi to expand Chinese power by developing new trade routes, including in Europe. To expedite this, Beijing has created the “16 plus 1” group, which brings China together with 16 European nations, 11 of them members of the European Union and the rest from the western Balkans.

“If we don’t succeed in developing a single strategy toward China,” said Mr. Gabriel in an earlier speech, “then China will succeed in dividing Europe.”

At the time, some regarded his remarks as alarmist. Less so now. Despite Germany’s huge exports to China and investment there — China is Germany’s largest trading partner, with two-way trade last year of $230 billion — even the German ambassador in Beijing, Michael Clauss, has openly criticized China’s policies and domestic repression, a marked change from years of German silence.

Chinese companies have also made waves by buying a major German machine-tool and robotics company, Kuka, and then trying to buy a key semiconductor company, Aixtron. The latter bid was blocked by American objections on security grounds. The sudden purchase last week of nearly 10 percent of Daimler, the iconic German car manufacturer, by a much smaller Chinese car company, Geely, has also raised hackles, and questions about where the money, some $9 billion, really comes from.

“It’s a highly public discussion about Chinese influence in Germany,” said Angela Stanzel, an Asia expert at the European Council on Foreign Relations. “There have been 10 times as many articles about Daimler than about Xi prolonging his rule.”

Berlin and Brussels have been shaken amid concerns that the real intent of Beijing’s “One Belt, One Road” program is as much political as economic.

“The main worry was China’s divide-and-rule policy,” Ms. Stanzel said. “The new worry is that because China is trying to make this format work, it will invest less effort and money into its relationship with Brussels.”

Both Germany and France have been pushing the European Commission, the bloc’s executive branch, to draw up stricter investment screening regulations to better protect European companies and European security. Europe will have to find a new China strategy, Ms. Stanzel added, one free of any illusions, “because now we’re sure we’ll have Xi for the rest of his life.”

Minxin Pei, a China scholar at Claremont McKenna College, said China’s actions in Europe, much like in the South China Sea, “have a probing quality, to test where the weaknesses are and where the pushback is.”

Trade is only part of the overall security and geopolitical picture, he said, noting that Mr. Xi may be pushing too hard, too fast and that “this grandiose vision and ruthless actions are a bit premature.”

Politically, the European Union has been troubled by convulsions in recent years as far-right parties have challenged the political establishment, while leaders in Poland and Hungary are challenging democratic norms. No European leader confused China with being an emerging democracy, yet analysts say many Western officials hoped and assumed the Chinese system would gradually become more like the democratic West.

“I don’t know who is still fooling themselves about convergence and liberalization — Xi put an end to that long ago,” François Godement, a China scholar at Sciences Po in Paris. “Official China has been increasingly frank about a systematic competition with democracies.”

By now, European leaders are accustomed to dealing with Mr. Putin and Russia. Mr. Xi is very different, says Susan Shirk, an expert on Chinese politics who served in the Clinton administration.

“While Putin wants to be a spoiler, Xi wants to be respected as a global leader,” said Ms. Shirk, who is now director of the 21st Century China Center at the University of California, San Diego. “He hasn’t tried to subvert the structures that exist. But he has recently started to build his own.”

With China returning to a more Leninist system, “we still don’t know what that will mean for global governance,” she said, “especially with Trump abdicating and trashing it.” Still, she said, the world must engage with China to get Mr. Xi “to fulfill his ambitions in the context of existing structures, and not overreact every time China takes the initiative.”

For Europe, the prospect of China as a strategic competitor, as well as a political competitor, is a major challenge. “Europe is so disaggregated and so lacking in fortitude that its countries don’t think like big leaders,” said Mr. Schell. “America always has, but with Trump we’ve gone missing, and nature abhors a vacuum.”

Now Mr. Xi’s open-ended tenure could give China a chance to plan long-term and carry out its policies systematically with “a steady hand on the helm of a great power,” Mr. Schell said. “But it is rooted in Leninism, autocracy and control, which will make it a tremendous challenge for liberal democracies rooted in a different value system, especially in a world reeling with no leadership.”

Mar 6, 2018

KEMAL DERVIŞ, Project Syndicate

Is the world on the cusp of a sustainable acceleration in global economic growth? The answer hinges on whether today’s much-touted innovative technologies finally have an appreciable impact on labor and total-factor productivity.

WASHINGTON, DC – In 2016, Northwestern University’s Robert Gordon published his 700-plus-page magnum opus, The Rise and Fall of American Growth. Two years on, with not just the United States, but the entire world economy experiencing a synchronized acceleration in growth, the second noun in Gordon’s title seems excessively pessimistic, to say the least.

Gordon’s main argument was that the century after the U.S. Civil War—from about 1870 to 1970—brought an unprecedented economic revolution, as innovations like electricity and piped water rapidly raised productivity and transformed people’s lifestyles. In his view, today’s innovations—especially in digital technology, machine learning, and artificial intelligence—may be breathtaking, but they do not have the same broad productivity-raising potential. Gordon is essentially a supply-side pessimist, though he also points out that income inequality can act as a drag on growth, by lowering effective demand.

Another gloomy take on future growth, advanced by former U.S. Treasury Secretary Lawrence H. Summers after the global economic crisis, has a decidedly more Keynesian or “demand-side” flavor. Summers’ theory of “secular stagnation” (a term first used by the economist Alvin Hansen back in 1938) holds that, in the United States, the desire to save chronically outweighs the desire to spend on growth-enhancing investments.

The balance between saving and investment could be achieved, Summers argues, only with a nominal interest rate that is below the zero lower bound. The fact that ample corporate profits were not being invested seemed to support this hypothesis, which also took root outside the U.S.

Today’s synchronized growth acceleration does not necessarily invalidate such pessimistic perspectives. After all, Summers—and Gordon even more so—was making an argument about the long term. If the current growth acceleration peters out after six months or a year, they could yet be vindicated. So, in assessing the possibility of weak long-term growth, it is worth looking at where exactly the Gordon and Summers hypotheses are linked, and what would invalidate them.

The lower the expected return on marginal investment in an economy, the lower the interest rate must be for that investment to be made. A low return on investment could be the result of demand-side factors, related to, say, income distribution or financial-sector activities. It could also be rooted in the supply side, with slow technological progress leading to weak productivity growth. In short, the secular stagnation that Summers has predicted, with low interest rates being necessary to offset low returns on investment, could well be caused by the slowdown in productivity-enhancing technological change that Gordon highlights.

It is useful to note, therefore, that what seems to have changed recently is not the supply of savings, but the expected return on investment. The economy is escaping the zero-interest-rate trap not because savings are declining, but because investment is becoming more appealing, owing to improved expectations.

That confidence may be derived partly from the business-friendly tax legislation that was recently enacted in the U.S. But, more fundamentally, it seems to reflect a shift in the way current and developing technologies are being perceived. Simply put, techno-optimism is gaining ground.

If, controverting Gordon’s thesis, today’s technologies do boost productivity significantly, the return on investment would rise (unless labor receives all of the gains in the form of higher wages, an outcome that nobody expects). That would lift the interest rate that balances supply and demand out of negative territory, solving Summers’ secular-stagnation problem.

 

It must be stressed, however, that what has changed are expectations, not estimated potential growth. In the U.S., annualized productivity growth reached 2 percent in the second and third quarters of 2017, but was negative in the first quarter of that year and zero in the last. According to the World Bank’s recent Global Economic Prospects report, “despite a recent acceleration of global economic activity, potential output growth is flagging.”

So whether or not we are on the cusp of a sustainable acceleration in global economic growth hinges on whether today’s innovative technologies finally have an appreciable impact on labor and total factor productivity. I happen to believe that they will. But the fact is that, so far, they haven’t.

Only if annual productivity growth rises from its current range of 0.5-1 percent to 1.5-2 percent in the coming years can one declare that the U.S. has avoided the fate predicted by Summers and Gordon. Today’s economic optimism should not be allowed to obscure that, much less breed complacency about the future. After all, even if technology does meet the optimists’ expectations in terms of its impact on growth, the challenge of ensuring that the added growth is inclusive will remain.

March 7, 2018

Masood Ahmed, Center for Global Development

On International Women’s Day it is right to celebrate the huge advances in women’s rights during our own lifetimes. In almost every country in the world, women are closer to achieving equality in economic and social activity. However, even as we celebrate progress, we cannot lose sight of the road still to travel. Every day millions of women around the globe face obstacles, small and large, in being able to make decisions about their own lives and being able to do what they want to realize their full economic and human potential.

These obstacles take many forms—social norms and expectations, legal barriers, and poverty and inequality—and changing attitudes and behaviors unfortunately can take years of education and exposure to new thinking. But there are areas where concerted international action can accelerate the pace of change, and we need to make sure that these are high enough on the agenda for international development leaders.

One such area is support for family planning and contraception. In development circles, only recently is the case for modern contraception being made on the grounds of economic empowerment. Access to contraception allows women to postpone childbearing and to take up career options that were previously precluded. With the help of family planning tools, women can now envisage investing in professional training that may take several years, because they are confident that their plans will not be derailed by the unexpected birth of a child. As my colleague, Nancy Birdsall, points out in her recent blog on this subject, the introduction of the birth control pill in the 1970s led to a rapid and marked increase in the US in the number of women applying for medical and law training, not only because they were able to plan their professional training with more confidence, but because the admission committees of these universities could also rely on the same phenomenon to increase their comfort in offering places to applicants who would more likely complete their courses.
More recent evidence, which we discussed at a recent conference here at CGD, found that access to family planning in developing countries can lead to “increased schooling, labor force participation, occupational choice, and wages.” The interesting new finding is that the simple availability (not necessarily use) of family planning services has an impact on the behavior and expectations of girls and their families. In Malaysia, for example, girls living near family planning clinics remained in school six months longer on average. In Indonesia researchers have found that the presence of family planning programs when young women are making school attendance decisions increases substantially their educational attainment. The explanation is that because girls and their parents can envisage a future where the timing of their first child and the spacing of children is possible, they are willing to invest more in schooling or to make a commitment to working in the future, even if they themselves are not using these services at that time.

The gains from greater women’s economic empowerment accrue not only to women but to society as a whole. According to a McKinsey study, achieving gender parity in economic participation could add a quarter ($28 trillion) to the world economy by 2025. In the Middle East, where the gap between male and female participation in the work force is three times larger than the average for all developing countries, simply narrowing that gap to being twice as large as the average would add $1 trillion to economic activity over a decade. If you look through the economic literature there are many equally striking estimates of the gains that would come through greater economic empowerment of women at the regional, national or global level.

While these numbers are impressive and helpful in making the case for increased access to family planning services on the grounds of economic impact, I believe that they must be secondary to the fundamental issue of women’s rights. Two hundred million women who want to prevent pregnancy are not currently using modern contraception—too often because of poverty or environmental restrictions that deny them access to this essential service.

Given these facts, it is a shame to see the decline in international support for expanding family planning services in developing countries. UNFPA, the UN agency charged with ending maternal deaths and promoting family planning services, is facing a $700 million gap for funding contraceptives over the next three years. Here in the US, the administration’s budget proposals for FY19 entail a 50 percent reduction in funding for international family planning. Some countries—Canada, the Netherlands, India, Indonesia, and the United Kingdom—have maintained or stepped up their support for family planning and women’s health but overall the scale of international funding and attention to this issue falls well short of needs.

Development is about more than improved living standards or a better quality of life—it is being empowered to make choices about one’s own life. Ensuring that half the world’s population can exercise their choices about whether and when to bear children is a development goal that should be a priority for all.

April 4, 2018

Peter Maurer, ICRC

Speech given by Mr Peter Maurer, President of the ICRC, during the Conference on International Security (Moscow).

It is a great privilege to be here today. Thank you to the Government of Russia, and in particular to the Russian Minister of Defence Sergey Shoigu for the invitation to address this important event. The Moscow Conference on International Security is an important platform to exchange on key global issues, including those related to humanitarian concerns in today’s armed conflicts.

I would like therefore, to give you an overview of the ICRC’s analysis of global trends in contemporary battlefields, rooted in its frontline knowledge and engagement with different belligerents; and to highlight two key areas for further dialogue between military-security and humanitarian actors.

For more than 150 years, through its neutral and impartial humanitarian action, the ICRC has amassed key insights and experiences as a frontline actor in favour of humanitarian space and as neutral intermediary between belligerents. These insights have informed our legal work, while principles and policies are guiding our practical response in almost all active conflicts.

New technologies are rapidly giving rise to unprecedented methods of warfare

In recent times, we’ve seen a strong new trend emerging, which defies the distinction between internal and international armed conflict, as articulated in the Geneva Conventions of 1949 and their Additional Protocols: We now see protracted situations of long-term violence continuing to rise with local, regional and global actors involved, with different types of support for partners and allies and opposing, often volatile, coalitions of State and non-state actors.

While each conflict has its particular dynamics, it is shocking to see the deep humanitarian impact of such fundamental transformations, which often is accompanied by a blurring of lines between civilians and militaries and an unwillingness and inability to adequately protect those who are not participating in hostilities.

Exponential growth of needs, combined with limited response capacities, are leaving millions of people without hope for a dignified life.

Over the last two months alone I have visited, amongst other places, ICRC operations in Syria, Iraq, Libya, Sudan and the Central African Republic. What I have seen in these countries is confronting:

increasingly fragmented actors;unrestrained strategies in the use of force and an obvious imbalance in pondering military necessities and the protection needs of civilians;
easily available weapons as a result of irresponsible transfers to irresponsible actors incapable and unwilling to implement the restraining rules of international humanitarian law;
and as a consequence, human suffering, social systems falling apart and massive displacement.

Whatever the motives by which present day warfare is legitimized, this cannot be an acceptable result for responsible leadership.

The figures give a good indication of the scale of the humanitarian needs of today’s world:
– 128 million people are in need of humanitarian assistance and protection worldwide;65 million are displaced – the highest number since the Second World War;
– More than 1.5 billion people, including 350 million of the world’s extreme poor, live in an environment of continuous fragility, violence and conflict;
– The annual economic impact of conflict and violence is $14 trillion – or 14% of global GDP.

Today’s conflicts are increasingly protracted, causing compounding impacts on populations. While the ICRC was created as a humanitarian organisation to respond to emergencies, we find ourselves working for decades in protracted contexts. In our ten largest operations, we have been on the ground for an average of 36 years… and still the wars continue.

The urbanisation of warfare is one of the important factors contributing to this bleak picture of suffering. Around the world, it is estimated that some 50 million people suffer the effects of urban conflicts. Cities and urban areas are intrinsically more vulnerable, especially to the use of massive explosive force and more amenable to illegal tactics of human shields.

Because of the significant likelihood of indiscriminate effects, we urge all parties to avoid the use of explosive weapons with a wide impact area in densely populated areas and to stop taking the civilian population hostage.

The consequences are devastating – not only in the immediate impacts of death, injury but also in the erosion of basic infrastructure like health, water, sanitation, education systems.

A sober analysis of our working environment tells us that our mitigating efforts through humanitarian assistance programs will have limited success if we do not make major efforts to shrink the needs through changes of behaviour in the battlefields. This will come first and foremost from respect for the rules of war, in particular the principles of distinction, proportionality and precaution.

Now I will turn to two critical areas of response – the dimensions of partnered warfare and of new technologies and cyber warfare.

Today no one fights alone. In many of the major conflicts in the Middle East, in Africa and beyond, coalitions pool their resources against common enemies.

We see wars that are fought by proxy; through both official and unofficial partnerships. This can create a climate in which political and military stakeholders see themselves freed from the scrutiny of accountability processes. Partnered warfare comes in different forms. Focuses can be on advice, training, equipment, surveillance, intelligence sharing, logistics, combined operations, kinetic support, detention operations and more, depending on circumstances.

In light of the global trends of conflict that we are witnessing, it has become increasingly urgent for States to look at how they can better leverage their partnerships and support to ensure civilians are better protected.

In partnerships, as in all other cases, the ICRC encourages all States to lead by example: to steadfastly respect their own obligations under international humanitarian law.
All States are obliged to ensure respect for IHL by the parties to armed conflicts, by refraining from encouraging or assisting violations of IHL, and by proactively influencing the parties to respect IHL.

The ICRC has developed a series of practical recommendations for States supporting parties to an armed conflict. To put it plainly, allied States have a responsibility to make sure their partners are not taking the cheap options.

Allied States can take a range of measures to ensure respect for international humanitarian law by their partners, such as:
– vetting potential partners to ensure they have the capacity and willingness to apply IHL;
– clarifying roles and responsibilities;
– and ensuring proper application of the rules governing the conduct of hostilities, detention and protection of civilians.

And to make a particular note on the arms trade. Arms transfers are at the highest levels since the end of the Cold War, with a significant proportion going to those fighting in the most brutal of wars. States have a special responsibility and must use their influence to ensure partners respect IHL, and cease transferring weapons, where there is a substantial or clear risk that the weapons would be used to commit IHL violations.

I believe there is huge untapped potential for States to positively use their influence over those they partner with or support. I have seen the positive impact when allied States do take such steps and measures and I encourage all States to examine their responsibilities and actions. Indeed, we look forward to constructively furthering this discussion with States over the coming year.

In today’s world, while major conflicts are happening in the physical world with kinetic power, we can’t ignore the new battlefields. New technologies are rapidly giving rise to unprecedented methods of warfare.

Innovations that yesterday were science fiction could cause catastrophe tomorrow, including fully autonomous combat robots and laser weapons. Cyber-attacks are a growing issue of concern because of their potential for serious humanitarian consequences.

The ICRC is urging States to look at the humanitarian impact of conflict in the virtual world and to uphold the protections afforded by the law.

In the ICRC’s view, it is clear that the general rules of international humanitarian law apply to and restrict the use of cyber capabilities as means and methods of warfare during armed conflicts. IHL prohibits cyber-attacks against civilian objects or networks, and prohibits indiscriminate and disproportionate cyber-attacks.

At the same time ICRC is raising critical questions such as : What is a security incident versus an act of war? How can cyber-attacks distinguish between civilian objects and military objectives? How to assess their proportionality? And what are States’ views on these questions?

The interconnectedness of military and civilian networks poses a significant practical and legal challenge in terms of protecting civilians from the dangers of cyber warfare. These challenges must be addressed. They also underscore the importance for States that develop or acquire cyber warfare capabilities – whether for offensive or defensive purposes – to assess their lawfulness under international humanitarian law.

To be clear, by asserting that IHL applies to cyber means and methods of warfare, the ICRC is not condoning cyber warfare or the militarization of cyberspace. Any resort to force by a State, whether physical or through cyberspace, remains constrained by the UN Charter.

The point is that – beyond the requirements of the UN Charter – IHL further restricts the use of cyber capabilities during armed conflicts.

I have focused my address today on the critical importance of international humanitarian law to prevent and mitigate the impacts of war. As seen in our recent history, when the law is respected, the cycle of violence can be broken, the impact of war contained and the foundations built for future peace and security, and much needed political solutions.

International humanitarian law is an inherently practical tool. It can shape behavior and influence those bound by it to exercise restraint. Each of its rules contains a balance between humanity and military necessity, allowing armies to exercise common decency. The law provides a basis, a shared language, for warring parties to eventually come to the table, and find common ground.

In today’s world where protracted, urban wars are the norm, when brutal conflicts are causing untold human suffering, we must use the tools at our disposal to break the cycle of violence and instability, and we must start work today.

19 avril 2018

CNES

Jean-Yves Le Gall, Président du CNES explique les enjeux de la mission INSIGHT – SEIS. La mission du sismomètre SEIS, conçu et développé par le CNES, sera d’aller “écouter battre le coeur de Mars”.

Publié le 20/03/2018 

Renaud Girard, Le Figaro

Le 17 mars 2018, Xi Jinping a été réélu à l’unanimité président pour cinq ans par les 2970 députés de l’Assemblée nationale populaire de Chine. C’est un progrès par rapport à 2013, où un député avait voté contre lui et trois autres s’étaient abstenus… Le 18 mars 2018, Vladimir Poutine a été réélu président de Russie pour six ans au suffrage universel, avec 76% des voix, en net progrès par rapport à 2012 (63% des suffrages).

Ni en Chine, ni en Russie, ne s’est établi un Etat de droit à la Montesquieu à la suite de la mort de l’idéologie communiste en 1989 (massacre de Tiananmen le 5 juin qui fait 10000 morts, chute du Mur de Berlin le 9 novembre sans une seule victime). La différence entre les deux grandes autocraties orientales est que la dissidence, tolérée à Moscou, est interdite à Pékin. Les Russes peuvent critiquer leur président dans certains journaux ou sur les réseaux sociaux ; en Chine, c’est impossible.

Est-ce à dire qu’il y aurait une loi d’airain autorisant le succès économique dans les pays totalitaires mais jamais chez les demi-despotes ? Qui expliquerait que le PNB par tête ait été multiplié par 17 au cours des 35 dernières années en Chine et qu’il ait, hors rente pétrolière, stagné en Russie au cours de la même période ?

Non. Le grand décalage entre les deux grandes puissances nucléaires orientales n’est pas dû à la plus ou moins grande dilution de leur autoritarisme. Il s’explique par le fait que, depuis 1989, la Chine n’a pas commis une seule erreur stratégique, alors que la stratégie russe a été, au mieux, brouillonne.

Politiquement, la Russie et la Chine étaient structurés par le parti communiste. A Moscou, Gorbatchev puis Eltsine ont détruit cette grande organisation qui encadrait à la fois l’Etat et la société russe. Mais ils l’ont remplacée par rien. A Pékin, les dirigeants n’ont cessé de renforcer l’efficacité du parti communiste, dont le but est de gérer au mieux la nouvelle société capitaliste chinoise. C’est par le biais des structures du parti que s’est déroulée la grande purge lancée contre la corruption par Xi Jinping (un million et demi d’arrestations). Les leaders chinois se moquent du sens original des mots « communiste » ou « capitaliste » ; ce sont des nationalistes, pour qui seul compte le rétablissement de la Chine comme 1ère puissance en Asie, rang qu’elle avait au début du XIXème siècle, avant que les Européens, les Américains et les Japonais ne viennent la soumettre à leurs intérêts.

Pour succéder au communisme, les dirigeants du parti ont choisi une voie proprement chinoise. Ils ont tablé sur le sens du commerce et de l’entreprenariat de leur population, qui avait été inhibé par le maoïsme, mais qui restait patent dans la diaspora (Singapour, Taïwan, Hong Kong, etc.). Ils ont gardé les conglomérats d’Etat, tout en encourageant l’entreprise privée à se développer non contre eux mais à côté d’eux. Face à l’étranger, ils ont montré trois visages successifs. D’abord celui d’un pays très sous-développé que l’Occident charitable devait aider. Ensuite celui d’une puissance commerciale amicale, respectueuse des règles de l’OMC, ouverte à des transferts technologiques maîtrisés. Les Occidentaux les ont cru sur parole et les Chinois se sont livrés à un gigantesque pillage technologique pour devenir le grand atelier du monde. Troisième phase avec Xi Jinping : la consolidation de leur hégémonisme commercial avec la stratégie de la « Route de la Soie » vers une Europe qu’il s’agit de coloniser petit à petit.

Pour remplacer le communisme, les dirigeants russes ont fait juste le contraire. Ils ont naïvement choisi une voie qu’ils croyaient occidentale, en faisant venir d’Harvard des « experts », économistes en chambre qui se sont livrés à de catastrophiques expériences. Tout l’appareil industriel a été privatisée de manière si précipitée qu’il s’est retrouvé aux mains d’oligarques mafieux, qui ont ensuite tenté d’imposer leurs vues au Kremlin. Poutine a rétabli l’ordre dans la rue, la prééminence du pouvoir central contre ces nouveaux boyards, le prestige international de la Russie. Mais il n’a pas su construire l’Etat de droit qui lui aurait permis de conserver en Russie ses chercheurs et ses investisseurs potentiels. En politique étrangère, il a repris la Crimée, mais a perdu l’Ukraine et les banques occidentales. Il a gagné en Syrie : mais que va rapporter concrètement sa victoire à la population russe ? Il présente des missiles nucléaires nouveaux, mais pour quel bénéfice réel ? Poutine patine dans de la tactique à court terme, tandis que Xi avance avec une stratégie à long terme.

Face à une Amérique qui les méprise et à une Chine qui veut les dévorer, les Européens n’ont plus qu’une option : comprendre la paranoïa de la Russie, puis la guérir, avant de la ramener dans la famille européenne. Pousser les Russes dans les bras des Chinois serait pour eux de la folie furieuse.

May 1, 2018

Steven Erlanger, The New York Times

BRUSSELS — The European Union is largely about money — who gives it, who gets it and why. In the face of a challenge to European democratic values from Poland and Hungary, Brussels is naturally turning to money to get at least some leverage over the popular, populist governments there.

The struggle at the heart of the European Union has infused what would normally be a humdrum moment in the life of its bureaucracy — the publishing of its proposed long-term budget on Wednesday — with novel importance.

How the European Union disperses its money will be hashed out over months — debated, amended and approved by the leaders of the member states and by the European Parliament, too.

But suddenly at stake in the tedium is whether the money that richer states transfer to poorer ones — long seen as a means of democratizing former dictatorships, like Portugal, Spain or Greece — is instead enabling new ones, namely in Poland and Hungary, among the top money-getters in the European Union.

That money is no small change. In Poland, European Union money has represented some 61 percent of infrastructure spending; in Hungary, the figure is 55 percent.

But both countries have been criticized for increasing state control over the news media and especially the judiciary, which goes to the heart of European commitments to freedom of the press, the rule of law and democratic transparency.

The means to influence or punish member states for violations of European principles are very weak, however. Real censure is subject to veto, making it difficult for Brussels to challenge democratically elected leaders, even when their practices in office are suspect.

But the challenge is of fundamental importance, argued Adam LeBor, an analyst of Central Europe. “Beyond Brexit and migration,” he wrote in The Financial Times, “the new Kulturkampf over national identity may be the biggest threat to the E.U.’s future unity and stability.”

So the European Commission, the bloc’s bureaucracy, is considering tying new aid to the credibility of the judiciary in member states, on the principle that oversight of European Union spending must depend on the rule of law and independent judges.

Such a change would attempt to skirt contentious judgments about “values” and instead shift the debate to sound financial management. Importantly, the finance rules work on a form of majority voting, eliminating the veto.

Fines would be considered approved unless the European Council, made up of the heads of government, votes to repeal them.

And even if those fines and aid reductions are passed, governments that are punished would still be liable to fulfill their budget obligations to fund agricultural and investment subsidies out of their own tax receipts.

That all may be too clever to survive the long process of approval. And even if successful, it would not take effect until at least 2021. But it is an effort to hit countries that have flouted European values and norms in the pocketbook.

All this is cresting because the European Union is beginning to debate its budget framework for 2021 through 2027, a budget that will have to deal with a significant reduction in funds given Britain’s intention to leave the bloc and stop paying into its budget after a transition period that will end in December 2020. Currently, about 10 percent of the European Union’s budget comes from Britain.

Compared with the national budgets of its 28 member states, the European Union budget is small. The last seven-year budget, passed in 2013, amounted to only about one percent of the European Union’s gross national income, about 155 billion euros, or about $186 billion, a year.

But about 9 percent of the European Union budget goes to Poland alone. Another 2.5 percent goes to much smaller Hungary.

That money reflects the bloc’s extraordinary commitment to aiding the development of its newer and poorer members, measured by gross domestic product per capita. It is also important to those countries’ growth and the popularity of their governments.

For instance, Hungary’s healthy growth rate of 3 percent a year would be as low as 1 percent without those regional support funds, known also as cohesion funds.

Recipient countries argue that much of that money is spent on buying equipment and services from some net-contributor states, like Germany and France, and returns to them in the form of markets and profits.

The Hungarian government spokesman, Zoltan Kovacs, has called the suggestion to tie political conditions to European Union funds “political blackmail.” He has pointed out that Hungary opened its markets to the bloc in 2004, when the economy was far from competitive.

“Don’t try to suggest that the E.U. cohesion fund is a gift for central and eastern member states,” he said here last year.

There are expected to be other contentious proposals, too. The distribution of regional support would be based not just on national income per capita but on other indicators like youth unemployment and migration burdens.

That is a clear effort to help older members like Italy and Greece that have borne the brunt of refugee and migrant flows, and other southern countries like Spain and Portugal, where youth unemployment is high.

Cohesion funds for newer member states could be cut by as much as 6 percent to make room for these other kinds of aid.

Of course, the talk of cuts also comes in the context of Britain’s exit from the European Union, along with its hefty contributions.

Some countries, like France, Germany, Poland and Hungary, have said that they would increase their future contributions to Brussels to help make up for Britain’s departure.

Other countries, like the Netherlands, have said that they do not want to contribute more, but that the bloc’s budget should absorb the loss of Britain by shrinking and becoming more efficient.

But the commission itself is expected to propose a larger budget than the current one, and aim for an overall amount of 1.13 to 1.18 percent of the bloc’s gross national income, compared with 1.03 percent when the current framework was approved.

But the prevailing mood, led by the Commission vice president, Frans Timmermans, is that the challenge of Poland and Hungary cannot go unmet, and that other countries flirting with forms of “illiberal democracy,” like Slovakia and the Czech Republic, should see consequences.

In an unusually explicit Twitter thread after the Czech elections last autumn, Juho Romakkaniemi, the former head of the cabinet of another European Commission vice president, Jyrki Katainen, asked: “How long the other MS [member states] are willing to pay large sums for cohesion if it leads to divergence?”

Mr. Romakkaniemi noted that Poland, Hungary and the Czech Republic were among the highest net recipients of European Union funds, while their governments indulge in euroskeptic politics. “My fear is that the populistic path leads to divergence from the E.U. core values of freedom and Rule of Law — until a breaking point,” he said.

“This would be a very sad and dangerous development,” he added. “But I can see big risks here. It is not too late to reconsider this path carefully.”

 

Publié le 14/05/2018

Renaud Girard, Le Figaro

Ce mardi 15 mai 2018, se tient à Bruxelles une réunion diplomatique d’une importance cruciale pour l’avenir de l’Union européenne (UE) en tant qu’entité politique. Autour de la Haute Représentante pour les affaires étrangères, Federica Mogherini, se réuniront les ministres des affaires étrangères d’Allemagne, de France et du Royaume-Uni. Ces trois puissances furent signataires, au nom de l’Europe, de l’accord international de Vienne du 14 juillet 2015 sur le nucléaire iranien. Le ministre iranien des affaires étrangères est invité à se joindre à la deuxième partie de la réunion de Bruxelles.

Négocié pendant près de dix ans, cet accord, dont le nom exact est JCPOA (Joint Comprehensive Plan of Action), permet à la Perse de redevenir une grande puissance commerciale (grâce à la suspension des sanctions internationales dirigées contre elle), en échange de son renoncement à devenir une puissance nucléaire. Mme Mogherini a affirmé le 11 mai 2018 que l’UE était « déterminée à préserver » le JCPOA, qu’elle a qualifié, à juste titre, de « l’une des plus belles réussites jamais réalisées de la diplomatie ».

Malgré le travail considérable qu’avait réalisé le Secrétaire d’Etat américain John Kerry pour obtenir cet accord garantissant l’arrêt de la prolifération nucléaire au Moyen-Orient, Donald Trump a décidé de le déchirer. L’allocution solennelle, le mardi 8 mai 2018, du président des Etats-Unis pour annoncer leur retrait du JCPOA et le rétablissement de leurs embargos contre l’Iran, restera dans l’Histoire diplomatique pour deux raisons:
1. Son accumulation d’inexactitudes factuelles;
2. Le reniement de sa signature par une grande puissance, pourtant jadis fondatrice de l’Onu (laquelle avait entériné le JCPOA sous forme de résolution du Conseil de sécurité).

Que vaut un engagement international de l’Amérique, s’il peut être déchiré à tout moment, en fonction des changements de locataire à la Maison Blanche ? Opposé au traité de Rome de 1957, Charles de Gaulle, revenu aux affaires en 1958, n’avait-il pas mis un point d’honneur à ce que l’Etat remplisse à l’avance toutes ses obligations découlant du traité européen, car était en jeu le respect de la signature de la France ?

Lors de leur réunion du 15 mai, les trois ministres auront à relever deux défis. Le premier, immédiat, consiste à sauver le JCPOA, afin de prévenir la reprise par l’Iran de ses activités d’enrichissement d’uranium, et sa possible sortie du TNP (Traité de non-prolifération nucléaire de 1968). Ils trouveront, dans cette tâche, le soutien de la Russie et de la Chine, cosignataires avec eux du JCPOA.

Le deuxième défi est encore plus ardu. Les Européens devront trouver une voie pour protéger leurs entreprises des sanctions promises par les Etats-Unis. John Bolton, le nouveau Conseiller à la Sécurité nationale de Donald Trump, a fait savoir qu’il n’hésiterait pas à faire sanctionner les sociétés européennes qui continueraient à investir ou commercer en Iran, dans les secteurs stratégiques définis par Washington. Le 10 mai, Richard Grenell, le nouvel ambassadeur américain à Berlin avait, dans un tweet, publiquement ordonné : « les entreprises allemandes qui font des affaires en Iran, doivent immédiatement se retirer ! » Les Allemands croyaient avoir recouvré leur pleine souveraineté il y a plus d’une génération. Ils s’aperçoivent que ce n’est pas une réalité internationale pour tout le monde…

La Maison Blanche menace de punir des entreprises européennes qui ne font qu’appliquer une résolution du Conseil de sécurité de l’Onu, adoptée unanimement il y a trois ans. On croit rêver !

Que peuvent faire les Européens face à une telle arrogance ? A court terme, ils peuvent activer un règlement du Conseil des Communautés européennes de novembre 1996 – surnommé « Blocking Regulations » -, qui interdit à toute personne physique ou morale européenne de se soumettre à des actes administratifs, législatifs ou judiciaires décidés par une puissance étrangère. Cela rassurera un peu les PME européennes, mais pas les grandes sociétés, qui ont trop d’intérêts en jeu sur le territoire américain. A moyen terme, les Européens peuvent dissuader les Américains de passer à l’acte, en promettant que toute sanction de leur part fera l’objet de représailles de même grandeur. A long terme, les Européens devront se préparer à ne commercer qu’en euros. La BNP a été condamné en 2016 à 9 milliards de dollars d’amende, au prétexte d’avoir utilisé des dollars pour financer le commerce de pays sous embargo américain. La compensation finale s’étant faite sur le territoire américain (au compte de la BNP à New York), il était donc « normal » que le droit américain s’appliquât à l’ensemble de l’opération…

A l’occasion de ce diktat américain inouï, les Européens sauront-ils recouvrer leur indépendance ? C’est l’épreuve de vérité pour le volet politique de l’UE. Si elle se soumet à Trump, elle perdra toute raison d’exister.

May 9, 2018

By Steven Erlanger, The New York Times

Apr 10, 2018 

KEMAL DERVIS ,  CAROLINE CONROY, Project Syndicate

Some view the rise of populism – mostly of the right-wing variety – in the EU as a sign that, far from being ready to play a global leadership role, the EU may be disintegrating. But the EU’s situation is much more complicated than the pessimists make it out to be – and not nearly as bleak.WASHINGTON, DC – Europe has a decision to make. It can stand by as nationalism and authoritarianism flourish from the United States (with Donald Trump’s “America First” approach) to China (which is moving from a single-party system to a single-leader regime). Or it can lead a reinvigoration of democratic values and international cooperation, at a time when rapid technology-driven change demands major political, economic, and social reforms.

Some view the rise of populism – mostly of the right-wing variety – in the European Union as a sign that, far from being ready to play a leadership role, the EU may be disintegrating. But the EU’s situation is much more complicated than the pessimists make it out to be – and not nearly as bleak.

Last autumn, the Special Eurobarometer 467 survey showed that 75% of respondents viewed the EU positively. Though a majority of respondents think their children’s lives will be more difficult than theirs own, two-thirds believe that the EU offers hope for Europe’s youth – an increase of six percentage points from 2016.

Young people seem to agree. The share of younger respondents (ages 15-39) who view the EU positively is particularly high. And, despite concerns about the EU’s “democratic deficit,” this cohort seems to appreciate the potential for political participation.

Faith in the EU’s future was buoyed last May by the election of French President Emmanuel Macron. If Macron can secure Germany’s cooperation for his European reform program, the EU’s prospects will be strengthened further.

While last September’s German federal election didn’t produce such a strongly pro-EU result – the far-right Alternative for Germany is now the largest opposition party, having secured nearly 13% of the vote – the main moderate parties still won the day, gaining more than 60% of the vote. Germany’s new coalition government is at least as pro-European as the one that preceded it, and a stronger Europe could be a fitting legacy for Chancellor Angela Merkel.

Italy’s recent election – in which the anti-immigrant League party (with its electoral base in the north) and the left-leaning populist Five Star Movement (whose support is concentrated in the south) together won more than 50% of the vote – is more worrying. Yet, given the antagonism between the two parties, it is likely that a governing coalition that can last will include the pro-European Democratic Party. Ultimately, whatever barriers Italy, with its debt-laden economy, poses to greater EU integration are unlikely to be insurmountable, if France and Germany exercise decisive leadership.

Of course, Brexit will not be easy on Europe. But, overall, Europe no longer appears to be a continent in crisis. Even in Greece, which has restored GDP growth, a majority of respondents now supports the EU.

In this context, the EU may be facing two related opportunities. Internally, it can adopt reforms that boost institutional efficiency and advance integration. Externally, it can stand strongly for international cooperation, human rights, and open society.

Europe must make progress on the first opportunity if it is to seize the second, and that means strengthening the eurozone. On this front, Macron has already offered ambitious proposals: a separate eurozone budget, a eurozone finance minister responsible for it, and a eurozone parliament (composed of members of the European Parliament and national parliamentarians) to hold the finance minister accountable.

Before Germany’s new coalition government was formed, a Franco-German working group was established to consider Macron’s proposals. Now that Merkel’s new administration is in place, we will find out how far Germany is willing to go in supporting greater eurozone cohesion.

In the short run, it seems unlikely that the new government will support Macron’s proposals in their current form. But it may back the completion of the banking union and some mechanism for greater coordination of eurozone economic policies.

In the longer run, some of Macron’s reforms should be possible, especially if the eurozone countries are allowed to move forward without unanimous approval from all 27 EU member countries. Such changes – along with more military and intelligence cooperation – will imbue the European project with a new dynamism, spurring more enthusiasm, not to mention a greater sense of security, among Europe’s citizens.

A more integrated and secure EU would be well positioned to assert itself more effectively on the international stage. With the European Single Market still boasting a larger GDP than China or the US, the EU can act as the third “pole” in a new world order. Its model of economic openness, social cohesion, and strong institutions can provide an alternative to the isolationist and nationalist tendencies that are threatening global cooperation.

And make no mistake: in areas such as trade, climate change, financial-sector regulation, competition policy, and cyber security, international cooperation remains critical. And it will become indispensable as advances in artificial intelligence and biotechnology raise thorny ethical issues that can be addressed effectively only at the international level.

The liberal world order that arose from the ruins of World War II to help prevent future catastrophes is facing its most difficult test yet. We must reaffirm the importance of internationalism, openness, and democracy in this new digital age, while adapting our policies and rules to new realities. Europe, with its unique experience of creating a democratic model of supranational governance, should lead the way. The world – especially its young people – is counting on it.

May 10, 2018

KEMAL DERVIŞ, Project Syndicate

French President Emmanuel Macron initially described his new political movement as being “neither on the right nor on the left,” and now says that it is “on both the right and the left.” But he won’t be able to fudge it indefinitely: sooner or later, he will have to pick a side with which to ally.

WASHINGTON, DC – French President Emmanuel Macron’s state visit to the United States last month was a study in contrasts. Despite the friendly dynamic, Macron’s agenda and rhetoric were almost diametrically opposed to US President Donald Trump’s. But Macron’s leadership is subject to an even more fundamental challenge; how he manages it could point the way forward for liberal-democratic politics.

Addressing the US Congress in English, Macron articulated a staunchly internationalist worldview, calling for stronger international institutions, a recommitment to the rules-based system of international trade, and a general embrace of globalization. With regard to Iran, he reiterated the need to preserve the 2015 nuclear deal, from which Trump has just withdrawn, though he did call for complementary agreements on topics that the existing agreement does not address.

Macron has also signaled that he will pursue a pan-European campaign for the 2019 European Parliament election. As a democrat, he believes that the deepening of the European Union must go hand in hand with the development of a truly European political space.

At a time of much hand-wringing over the decline of liberalism, the future of social democracy, the rise of nationalism, and the backlash against globalization, Macron’s unapologetically internationalist stance is notable. In fact, Macron has taken a leap into the unknown of the West’s “new politics,” a terrain no longer defined entirely by competition between large center-right and center-left parties. But is politics really turning the page on the traditional right-left cleavage?

It would be wrong to describe Macron, who served as a minister in his predecessor François Hollande’s Socialist government, simply as a centrist. Although he has moved toward the center, he did not join one of the small traditional centrist parties, but instead created his own “movement.”

Early on, Macron described that movement – which he called En Marche ! – as “neither on the right nor on the left” – avoiding the term “centrist.” Now, he says it is on “both the right and the left,” signaling his desire to win over traditional center-left and center-right voters.

If the traditional left-right divide is blurring, however, the question is what will replace it. With globalization at the center of political debate in most countries, it may seem that the answer is a division between cosmopolitan and parochial forces.

According to this interpretation, Macron leads France’s pro-globalization (and pro-European) movement, and those who oppose him, on the right or the left, are linked by a shared opposition to economic openness. And, indeed, the far right and the far left are espousing similar economic messages.

Meanwhile, existing center-left and center-right political parties – in France and throughout the West – tend to comprise internationally oriented factions and those who are more suspicious of globalization. If globalization is becoming the main electoral cleavage in Western countries, these two camps, the logic goes, are likely to split and form new political families.

Yet, while I believe there will be some movement in this direction, the traditional left-right cleavage seems unlikely to disappear. Traditional parties will continue to debate issues concerning income distribution, including the progressivity of tax systems and the proper scope and aims of social policy. The globalization “platform” alone will not be robust enough to define a large political party.

This means that in the coming years, Macron will have to align himself more closely with either the center-right or the center-left. The particular circumstances that enabled his electoral victory in 2017 – a discredited center-left, and a center-right candidate disqualified by scandal – will not reproduce themselves. He will have to become an internationalist left-leaning leader or an internationalist right-leaning one.

Only one of those appears to be a tenable option. The traditional policies of the center-right would not easily be compatible with a strong internationalist bent. If globalization, in its various dimensions, is to be backed by a popular majority, it will have to be accompanied by modernized social policies that provide effective help to those who need it. At a time of  continuous economic disruption, this will be all the more important.

Economic openness demands social solidarity. That does not means protecting specific jobs from trade competition or technological innovation. It means assisting people to adapt to continuous change, by providing all citizens with the necessary resources, such as education, accessible health care, and transitional support. In short, a popular pro-globalization stance must be accompanied by a new social contract – backed by public resources – that appeals to a large majority. Otherwise, the siren song of neo-nationalism will be difficult to resist.

While completing the necessary tax and labor-market reforms on which he has embarked, Macron will need to address this challenge. In the current political paradigm shift, those who favor openness will outshine nationalist unilateralism only by adopting as their primary objective a modernized approach to social solidarity.

 

 

16 May 2018

Prince Michael of Liechtenstein, GIS

Geographically, Europe is a peninsula on the northwestern end of the Afro-Eurasian continent, on the eastern shore of the North Atlantic. The United States, on the other side of the easily navigable ocean, can be considered – as former U.S. President Ronald Reagan once pointed out during a speech in Germany – a European power. Indeed, the U.S. has provided a protective shield over Europe since the end of World War II.

While the Soviet threat remained in place, Europe, and especially Germany, was highly appreciative of the U.S. However, the relationship began to deteriorate in the late 1960s, enhanced by Soviet disinformation and supported by protest movements of the so-called “1968 Generation” and the Vietnam War.

Since then, Europe’s relations with the U.S. have become increasingly schizophrenic: Europe still needs American protection, but is trying to build increasingly important relationships with Russia and China. This, however – due to lack of military power – is insufficient to balance Europe’s position as a North Atlantic and Eurasian region.

To keep good relationships, Europe needs both sides. However, in instances of tensions between the Atlantic partners, the European public and politicians have – especially over the past 20 years – taken a very one-sided course, looking for faults only on the American side.

European schizophrenia
This has been especially striking in the relationship with U.S. presidents. In Europe, President George W. Bush was considered a danger, while President Barack Obama was well-liked. Now, Donald Trump is considered a major threat to world peace. However, if one ignores some of his rude behavior, one can find sound policies and people in his administration who consider Europe’s protection a top priority.

There is a European schizophrenia in the admiration of President Obama’s policies and the claim that Presidents Bush and Trump hurt the transatlantic relationship. Both the Bush and Trump administrations considered Europe an important issue, while Mr. Obama’s pivot to Asia had a distinctively different orientation. Europe was clearly a less significant concern.

President Trump’s decision to withdraw the U.S. from the Iran nuclear agreement has again caused strain in the relationship. Some claim the move is a major threat to the international framework and stability. According to the European mantra, there is one culprit: Donald Trump. On the surface this might appear correct, but if we dive a little deeper, the story looks somewhat different.

Iran’s politics, as well as its military and paramilitary activities, including the support of terrorism, is destabilizing the entire Middle East. Tehran intends to become the dominant regional power and advances that agenda with all means, it supports civil wars and threatens Israel’s very existence. Moreover, it poses an existential danger to Saudi Arabia, doing its utmost to control Syria and Yemen. Its support of terrorist organization Hezbollah weakens Lebanon, strengthens its own access to the Mediterranean and makes possible direct attacks on Israel. All of this also presents significant challenges for Turkey.

The Iran nuclear agreement, which was reached between Iran, the five permanent members of the Security Council (the U.S., Russia, the United Kingdom, France and China) plus Germany, did not include any of the neighboring countries. It contained no provision that protected Iran’s Middle Eastern neighbors from its subversive and terrorist agitation. The agreement was a priority for President Obama, and the administration was in a rush to conclude it, but the Europeans could have pointed out this problem.

The European leaders in the UK, Germany and France are now appalled that the new administration withdrew, considering the deal damaging and incomplete. French President Emmanuel Macron and German Chancellor Angela Merkel both visited Washington in April, begging President Trump to maintain the agreement. President Macron tried to use French “grandeur” and youthful charm, while Chancellor Merkel tried the German attitude of “Bedenken” (compunction). Both in vain. Does that mean that Washington made the wrong move, and the White House is at fault? Not necessarily.

Since the 2016 U.S. presidential campaign it had been well-known that Mr. Trump considered the agreement deficient and that he wanted a replacement. Once he was elected, London, Paris and Berlin had ample time to try to renegotiate with the other partners of the agreement. This was neglected, and President Trump’s move cannot be a surprise.

The consequences of the withdrawal are still unknown. But now the paradox is that the UK, France and Germany are seeking the support of Russia and China in counterbalancing the U.S. This situation was only triggered by Washington’s decision, but widely caused by European negligence. The losers in all of this are certainly the countries of the Middle East, but also, and especially, the Western alliance.

Publié le 21/05/2018

Renaud Girard, Le Figaro

Même si elles sont anciennes, les relations entre grandes nations ont besoin d’être nourries de rencontres régulières au sommet. C’est le sens du voyage d’Emmanuel Macron à Saint-Pétersbourg les 24 et 25 mai prochains, qui répond à la visite de Vladimir Poutine du 29 mai 2017 à Versailles, laquelle célébrait 300 ans de relations diplomatiques entre la France et la Russie. Les deux présidents vont pouvoir renforcer le « Dialogue de Trianon », qui lance des ponts culturels et universitaires entre les deux nations. Mais améliorer les relations politiques et économiques sera beaucoup plus difficile, tant sont nombreux les obstacles obstruant la voie d’un rapprochement franco-russe.

Stratégiquement, l’objectif à long terme des Français devrait être clair : garder les Russes en Europe, ne pas les précipiter vers l’Asie, afin de constituer un bloc capable de parler d’égal à égal avec les Chinois, dont les tendances hégémoniques ne cessent de s’affirmer. La Chine vient de montrer doublement sa puissance. Le 18 mai 2018, elle a fait atterrir des avions H-6K (bombardiers à long rayon d’action) sur un îlot des Paracels, qu’elle a accaparé en mer de Chine méridionale, et où elle a construit un aérodrome militaire. De là, ses bombardiers stratégiques peuvent désormais atteindre le Nord de l’Australie ou l’île américaine de Guam. Deuxième signe de l’omnipotence chinoise, les Etats-Unis ont annoncé le 20 mai qu’ils suspendaient leurs mesures tarifaires punitives à l’égard de Pékin, confiants que les Chinois allaient augmenter leurs importations américaines – au détriment des Européens, cela va sans dire.

A long terme, la Chine inquiète les Russes, propriétaires d’une Sibérie quasi dépeuplée. Mais, à court et moyen terme, ils apprécient cette amie forte et fiable – si différente de l’Europe -, qui montre cohésion et indépendance, qui est leur premier partenaire commercial, qui ne leur fait pas la morale, et qui ne leur inflige pas de sanctions.

Trois sujets politiques principaux sont au menu du sommet Macron-Poutine : l’Ukraine, l’Iran et la Syrie.

Au Donbass, Moscou a accepté le principe d’un déploiement de Casques bleus de l’Onu, sur la ligne de cessez-le-feu séparant l’armée ukrainienne des séparatistes pro-russes. Berlin et Paris ont salué le geste. Mais les Russes ne vont pas permettre aux Casques bleus de se déployer sur la frontière russo-ukrainienne, tant que l’Ukraine n’aura pas voté une loi donnant une pleine autonomie culturelle et linguistique à la région du Donbass, assortie d’une amnistie générale pour les combattants séparatistes. Or, à Kiev, théâtre actuel d’une surenchère nationaliste, il n’y aura aucune initiative politique avant l’élection présidentielle de mars 2019. Mais si le Kremlin faisait un geste concret allant vers le rétablissement de la souveraineté de Kiev sur le Donbass, les Français pourraient encourager, dès juillet 2018, une suspension des sanctions de l’Union européenne contre la Russie.

Les Russes ne supportent pas l’idée d’une entrée de l’Ukraine dans l’Otan. Pourquoi l’Allemagne et la France n’inscriraient-elles pas dans le marbre leur veto d’avril 2008 d’une adhésion de l’Ukraine à l’Otan ? Pourquoi ce pays ne deviendrait-il pas neutre militairement, à l’instar de l’Autriche ? Le sommet Macron-Poutine ne débloquera pas la situation en Ukraine. Mais rien n’empêche les deux présidents de préparer l’avenir !

Sur le dossier iranien, Russes et Français s’accorderont sur la nécessité de maintenir l’accord nucléaire du 14 juillet 2015, dont les Américains se sont retirés unilatéralement. A court terme, les grandes sociétés françaises obéiront au diktat américain, car leurs échanges avec les Etats-Unis sont incomparablement supérieurs avec ceux qu’elles ont avec l’Iran. Mais Macron pourra aussi exposer à Poutine l’idée des Européens de faire financer le commerce avec l’Iran, en euros, par la BEI (Banque européenne d’investissement), institution à l’abri des représailles américaines.

C’est sur le dossier syrien que le président français aura avec son homologue russe la position la plus difficile. Depuis qu’elle a fermé son ambassade à Damas en mars 2012, la France a disparu du jeu. Elle n’a comme allié sur place que les Kurdes du Rojava (bande nord de la Syrie), courageux adversaires de Daesh. Or l’Amérique a déjà abandonné ces progressistes à l’armée turque dans le canton d’Afrine, au nord-ouest de la Syrie. Respectée par tous les Etats, la Russie est devenue la puissance pivotale du Moyen-Orient. Les Israéliens viennent de lui demander de prévenir une guerre avec les Iraniens en Syrie. Recevant Bachar al-Assad à Sotchi le 17 mai 2018, Poutine a donc prôné un prompt départ de « toutes les troupes étrangères » de Syrie.

Au Congrès de Vienne, Talleyrand avait déjà noté qu’on pouvait être le meilleur négociateur du monde, les rapports de force sur le terrain finissaient toujours pas se rappeler à vous. . .

May 15, 2018

By Steven Erlanger, The New York Times

BRUSSELS — After a series of decisions by President Trump that have split the trans-Atlantic alliance, European foreign ministers have begun a scramble to contain the fallout to their own interests, global institutions and stability in the Middle East.