Brexit, or the lack of imagination

Matt Dunham/Associated Press

Since June 23, 2016, the United Kingdom has been confronting a substantial task to leave the European Union after decades of deep cooperation and integration. Over the last two years, the UK political elite, Tories and Labor alike, has demonstrated an absolute lack of imagination and illustrated the inability to think beyond their wishes of a return to an illusory lost exceptionalism. Three weeks prior the fatidic deadline of March 29, 2019, the British political elite is unable to decide on what is next for the UK, a soft Brexit (based on the agreed terms between the May government and the EU), a hard Brexit (no deal), a revocation of Article 50, or an extension of the Article 50. On March 12, the House of Commons rejected the government’s deal, followed on March 13 by a rejection of a no-deal Brexit paving the way for a potential request for a delay.

A delay for what? And towards what outcome? The UK and EU agreed back on November 14, 2018 on two documents: the agreement on the orderly withdrawal of the UK from the EU and the Joint Political Declaration on the framework of future relationship. One of the most contentious points for the UK in the withdrawal agreement is the third Protocol concerning Ireland and North Ireland known as “backstop,” agreeing to create an EU-UK single customs territory. The backstop is “an apt paradox for a problem that may not have a solution.” The backstop would keep the UK in both the customs union and the single market until at least 2020 during which Brussels and London would negotiate the terms of a trade relationship.

The Brexit vote was based on a series of lies and political manipulations over the relationship between the UK and the EU. The UK has demonstrated over its decades in the Union its ability to control sovereignty in areas considered of national sovereignty such as the national currency, immigration and judiciary affairs, and so forth. The UK used its opt-out rights in core competencies. The debate prior to the referendum was tailored around immigration/borders, supposedly high cost of the EU membership (money to be utilized to the Health and Human Services), and national prestige allowing the UK to reestablish its grandeur internationally.

Two years later, the illusion of a positive outcome, potentially being a hard Brexit, remains as a possibility. The lack of imagination has been so visible throughout the process and since the end of the UK-EU negotiations. The last four months have exposed the inability of a political elite to think, govern and lead. It has been months of political talks and votes in London with a Prime Minister losing time after time votes on the same document thinking that the outcome of a new vote on a same document could have a different ending. Furthermore, PM May has failed to lead and unite her party, let alone the nation, to agree on the terms of a departure, yet manages to survive no confidence vote and hold her position. This demonstrates another level of political folly. At what point the House of Commons massively rejecting May’s deal, on two occasions, think that keeping the same captain defending the same deal would lead to a different outcome.

In a case of a decision to extend the Article 50 and a reopening of the negotiations, two questions arise. First, are the 27 EU Member States convinced that new rounds of negotiation will lead to a different outcome? PM May said it clearly, “the EU will want to know what use we will make of such an extension.” And second, will the negotiating team from the UK be different a different one bringing new propositions with regards to Northern Ireland to the table? In the current deal, the EU has rightfully protected one of its member states, Ireland, and the core of the Union, the common market. It is quite unimaginable to have the EU undermining one of its members to accommodate one exiting. Furthermore, seeking an extension to the negotiations could poison the debate ahead of the European elections on May 23-26 and require the UK to hold a campaign for the European Parliament elections.

Now the organization of a new referendum on Brexit to put back the decision in the hands of the citizens would send a mix message. The new referendum would be less about democracy and more about the political elite hiding its inabilities to lead and govern behind another popular vote. Regardless of the outcome of the 2016 vote, the government had a mandate and failed to deliver, which has become a common trend across the transatlantic community. After three years of toxic rhetoric, the outcome of new referendum tipping in favor of a remain vote could be damaging in the long-term for domestic and European politics. Can the UK strive back in the EU after this tumultuous period like nothing had ever happened? An optimist could argue that the EU, the 27 capitals and the UK have learnt the lessons being on the edge of a precipice and are willing to move head with substantial reforms by deepening the integration process. Why not?

Theresa May back in 2016 said, “Brexit means Brexit.” The initial understanding was that the UK will be leaving at the end of the two-year period. Today, “Brexit means Brexit” illustrates a total lack of imagination, of leadership and policy-making. Over two years, the UK has been unable to think about its own future outside the EU. How can the UK be in any position of strength in negotiating future relationships with world actors? “forging a new role for Britain in the world”? and to legislate in re-drafting and voting on a new set of rules and laws post-EU? “Brexit means Brexit” has become the mantra of a lost nation.

(COPYRIGHT 2019 BY POLITIPOND. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED WITHOUT PERMISSION).

Europe retaliates and the transatlantic split widens

Source image via EPA

The European Union (EU) retaliatory tariffs on a series of American goods, including peanut butter, motorcycles, bourbon, orange juice, sweetcorn and others, kicked in on June 22. The imposed duties on American products are worth $3.3bn in a tit-for-tat response by Brussels to the Trump administration’s unilateral imposition of tariffs on aluminum (10%) and steel (25%) back on March 23.

The EU Trade Commissioner, Cecilia Malmstrom, said that “the rules of international trade, which we have developed over the years hand in hand with our American partners, cannot be violated without a reaction from our side.” She argued that the EU was “left with no other choice” to impose tariffs on US products. Jean-Claude Juncker, president of the European Commission, said that the decision by the US to impose tariffs “goes against all logic and history.” In addition to the immediate tariffs, the EU seized the World Trade Organization (WTO) to challenge the US measures.

The US under President Trump is not at its first spike of tariffs on targeted foreign goods based on national security ground. Aside from the steel and aluminum tariffs, the US imposed a 20-30% tariff on washing machines and solar panels last year. It is as well discussed to impose a 25% tariff on over 800 Chinese goods. Trump seems to believe that the world is taking advantage of the US and that free trade is not being fair to the US. His sole argument is based on the reading of the US trade balance. If there is a trade deficit, the US is losing; if there is a surplus, the US is winning. Trade policies are more complex than what it is being portrayed in a tweet. The world, in particular US allies, has already responded to US ensuing the tariffs on steel and aluminum as listed in the table below.

Source: Amy Cheng, Humza Jilani, Keith Johnson, Amy Mackinnon. 2018. “State of the Trade Wars Tracking U.S. President Donald Trump’s tariffs — and the retaliatory measures other countries are taking.” Foreign Policy. June 21. (here)

Tariffs on auto imports?

In a very trumpian fashion, the American president went on on Friday by threatening to impose a 20% tariff on all U.S. imports of European Union-assembled cars. His message, via twitter, read “If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” The threat of imposing tariffs on cars is not new as a month ago he instructed the Department of Commerce, led by Wilbur Ross, to launch a probe into whether auto imports pose a national security threat.

Trump and his associates have used overtime the Section 232 of the Trade Expansion Act of 1962 in order to increase tariffs on ground of national security. The same rationale will potentially be used for tariffs on auto imports. The justification and connection between national security and tariffs was made by Wilbur Ross during a recent interview, wherein he said “National security is broadly defined to include the economy, to include the impact on employment, to include a very big variety of things.” He continued claiming that “Economic security is military security. And without economic security, you can’t have military security.” However, most of the tariffs are affecting traditional US allies, which happen to be NATO members and closely working on defense and security cooperation. Mr. Ross’s justification does hold any serious ground and is simply trying to hide basic protectionist policies being national security.

Congress could regain the control of decision-making on tariffs if the Republican establishment, holding the majority in the House and Senate, were committed to free trade and sound economic and trade policies. Earlier in June, republican and democrat lawmakers mentioned a plan to introduce a legislation that would force President Donald Trump to obtain Congress’ approval before imposing tariffs on national security grounds. Until the midterm elections, it is difficult to imagine the approval of such legislation by the Congress.

The current rates of tariffs for imports between the US and the EU are divided into two categories: for cars, 2.5% US import tax compared to 10% EU import tax; and for light trucks and SUVs: 25% US import tax compared to 10% EU import tax. The American president always focuses on the tariffs for cars and never on light trucks. He has been picking on Germany and its successful automobile industry. But he has failed to recognize the investments made by the three leading german companies in building assembly plants in South Carolina (BMW and Daimler), Alabama (Daimler), and Tennessee (Volkswagen). In 2017, 38% of 854,000 cars build in the US were sold in the US and over 500,000 were exported. With regards to employment, 116,500 jobs in US were connected to german auto-makers: 36,500 working at auto-maker plants and 80,000 as suppliers.

What would the impacts be for the US if the US president were to impose such tariffs? The Peterson Institute recently released a report on the potential impacts of a 25% proposed tariffs in auto imports. The report argues that the production in the industry could drop by 1.5% and that it could cause 195,000 US workers to lose their jobs over a 1-to-3 year period. In case of retaliation in-kind with tariffs by foreign countries on the same products, production would fall 4%, 624,000 US jobs would be lost, and 5% of the workforce in the auto and parts industries would be displaced. The ripple effects of such tariffs could have disastrous consequences for states hosting assembly plants in the long-term. The latest risk assessment by Airbus addressed to the UK government regarding the uncertain future around Brexit should be carefully read by US lawmakers and Trump associates when deciding on imposing tariffs or not. Multinational corporations hold quite a strong leverage in the decision-making process of trade policies.

Rocky transatlantic relations

Again, as argued in previous analyses, the future of transatlantic relations appears unstable and rocky. Several points shall be addressed reflecting on US treatment of historical allies and the future of the liberal order. First, The Trump administration has demonstrated over and over its decision to split with and humiliate America’s traditional allies. The message addressed by the American president and members of his cabinet, in particular Peter Navarro, towards the Canadian prime minister post-G7 meeting as well as the continuous undermining of the German chancellor illustrate Trump’s modus operandi. Per Wess Mitchell, US Assistant Secretary of State for European and Eurasian affairs, the Trump administration is implementing a “strategic renovation” with traditional allies. President Trump has made a point to undermine his German counterpart, Angela Merkel. She was one of the closest partners of President Obama, is leading the most stable and largest European economy, and has not shied away to defend the liberal order. The appointment of Mr. Grenell as US Ambassador to Germany, who has broken protocol on two occasions, confirms it. Mr. Grenell in an interview with Breitbart said “I absolutely want to empower other conservatives throughout Europe, other leaders. I think there is a groundswell of conservative policies that are taking hold because of the failed policies of the left.” The Trump administration is seeking to undermine and destabilize the German chancellor.

By looking at the trends and rhetorics (which can shift very quickly as demonstrated by the change of position by Trump towards the North Korean dictator), a trade war is quite an eventuality. For the EU, trade has been the core dimension of its external policy and international presence. The EU sees multilateralism and free trade as one of its most successful policies. Furthermore, the EU is at a crossroad with the continuous rise of populist forces gaining traction in core EU countries, such as recently Italy. The EU ought to defend its interests and cannot cave in to foreign pressures, otherwise it would play in the hands of the Orban, Salvini and Le Pen of Europe. And last, the European market is one of the richest, largest, developed and influential in the world. By the weight of its market, the EU shall not shy away from direct confrontation with the US. As per Charlemagne of The Economist, the EU has three strategies in hand to chose from: capitulation, resilience, and containment. Resilience is the most likely strategy at this period of time.

Lastly, the main issue with regards to trade is China, and it has remains unaddressed. Both the US and the EU agree with the fact that China, since joining the WTO in 2002, has not played by the rules. The US could have worked with the EU and utilized the common procedures and processes, the international trading system. However, Trump said it on the campaign trail, and is now doing it while in office, the rules-based global trading system is being portrayed as the cause of American demise. Trump wants a trade approach based on bilateral deal-making, transactional relations and only fair for the US. Donald Tusk, the president of the European Council said in Canada, “the rules-based international order is being challenged, quite surprisingly… by its main architect and guarantor, the US.” For instance, Trump refused to sign the G-7 communiqué. For the EU, the liberal order and rules-based trading system are critical for its functioning. Cecilia Malmstrom said this clearly, “The E.U. has a responsibility to stand up for open global trade.”

The American president seems more at ease surrounded by dictators and authoritarian leaders than with traditional American allies. The affronts to the liberal order and America’s allies are beginning to add up considering his policy choice to leave the TPP, Paris deal, the Iran deal, relocate the US embassy in Jerusalem, and unilateral imposition of tariffs. Europe knows that Trump is temporary, but his continuous attacks on the liberal order will not only undermine the US position in the world but lead to a highly unstable multipolar order. “Trump’s preference for a divide-and-rule strategy produces a game” writes Javier Solana “that will create only losers.” Europe knows it, the US may have a serious headache post-Trump.

(COPYRIGHT 2018 BY POLITIPOND. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED WITHOUT PERMISSION).

 

The stamp of America First on US foreign policy

Credit: AP

What if the implementation of the tenets of America First onto US foreign policy was for real? What if Donald Trump had been consistent on telling Americans and the world, that he was serious on taking the US out of the liberal order? and, ultimately on bringing the US status down from being the centerpiece of the liberal order to a simple superpower?

Since 2017, it seems that Trump and his advisors/implementers have been working on cutting all the strings attached around the US in terms of commitments, engagements, responsibilities and duties to transform the US from the ‘indispensable’ power into a simple sovereign power. After years of trying to grasp the logic of Trump’s foreign policy, it appears to be the most likely hypothesis at this point of time.

For two years, foreign policy experts and American allies have been trying to understand the logic of Trump’s approach to foreign policy. And based on the structures, heritage, norms and values of the post-World War two order, Trump’s decisions are incomprehensible. For instance, the departure of the US from the Paris climate deal, the different rounds of tariffs and quotas (washing machines, solar panels, aluminum and steel, and potentially car tariffs), the withdrawal from the Iran deal, the visceral despite for the European Union and deep support for Brexit, the departure from the Trans-Pacific Partnership negotiations, the lingering NAFTA talks, and lately the relocation of the US embassy to Jerusalem are all a direct affront to the trust of allies. These radical shifts are not increasing American security, not advancing American interests and undermining global security.

What does that tell us? Donald Trump wants nothing to do with the liberal order and believes that the US can be better off alone dealing on bilateral basis and imposing its weight and will onto others. Trump and his administration may appear to see a success in this approach considering the limited response by the Europeans (still at awe by the permanent affront of the liberal order), and a mild reaction by China (so far).

Donald Trump believes, as a large segment of the American electorate, that the US has no business in playing the role of the world policeman. The international institutions, designed post-1945s, making the liberal order are in fact limiting the American sovereignty and national interests. The multilateral system orchestrated via the United Nations system, the World Trade Organization, and the multitude of regimes undermines the way the US can act. In December, Susan Rice, Obama’s national security advisor, wrote “these omissions [of the liberal elements in Trump’s NSS] undercut global perceptions of American leadership; worse, they hinder our ability to rally the world to our cause when blithely dismiss the aspirations of others.” Barry Posen summarizes it into the argument that Trump’s grand strategy is “primacy without a purpose.”

This approach and shaping of American foreign policy are extremely dangerous for the US and the world at large. Donald Trump inherited a strong economy and a relatively stable global order. The US is not involved in any major crises, at the exception of Iraq, Syria and Afghanistan. Donald Trump did not have to save the American and world economy the way his predecessor needed to respond. These domestic and geopolitical realities have in fact created an illusion for this administration that has not proven itself in addressing any critical crises. The Trump administration feels almighty when it has in simple terms only been in cruise-control mode. Most of the crises faced by the Trump administration are in fact self-inflicted, as proven by the sudden cancellation by Donald Trump of the upcoming Singapore summit between the US and North Korea.

If Donald Trump continues on this trend and truly takes the US out of the order designed by the Americans and Europeans post-1945, he will not only launch the US into a motion of de-credibility of the US, weaken the liberal order, and simply downgrade the US into a regular superpower. Here are the dangers of such trend: first, history has taught us that multipolarity is greatly instable. The probability of war at a regional and global scale would increase. Second, the challenges ahead are becoming more global and complex to solve than ever before. The case of climate change, nuclear and chemical proliferation, free-trade, pandemics, mass migration, and stability of the financial system all require a network of institutions and regimes as a platform of discussion and interaction among states. These multilateral platforms permit to align interests, deepen cooperation and coordination and design mechanisms to implement and enforce agreements and policies. One country, as economically and militarily powerful as the US today, cannot solve any of these issues alone. Third, in his quest to greatness (almost like Don Quixote) Donald Trump will simply undermine the status, influence and power of the US and downgrade it to a superpower. Ironically, a long-term decline in influence and power will require the US to increase its alliances to balance its progressive global decline. That is the story of past hegemons. Fourth, this abrasive style may alienate once and for all American allies. The comments by President Donald Tusk at the recent EU summit in Bulgaria speak volume about the state of transatlantic relations. He said “We are witnessing today a new phenomenon: the capricious assertiveness of the American administration. Looking at the latest decisions of President Trump, some could even think, ‘With friends like that, who needs enemies?’”

The US foreign policy under this Trumpian paradigm is due to a lack of understanding of the past 70 years and world history, the arrogance of inheritance of such power, and ideology. Furthermore, the Republican establishment in power and control of the Congress (House and Senate) seems to agree with the current direction of US foreign policy considering the lack of opposition (at the exception of Senator McCain). The decline of the US has been projected for quite sometime and it certainly won’t occur overnight. However, the trends these last years of this administration confirm to American allies and the world that analyzing Trump’s foreign policy decisions based on past paradigms will lead to more confusion than understanding. Trump’s America first is for real and could have lasting negative impacts on the US, world affairs and global security.

(COPYRIGHT 2018 BY POLITIPOND. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED WITHOUT PERMISSION).

The unreliability of American foreign policy under the Trump administration

PHOTO: MARTIN H. SIMON/ZUMA PRESS

On May 8, commonly known as Victory in Europe Day (V-E Day), the American President, Donald Trump announced his decision to leave the Joint Comprehensive Plan of Action (JCPOA), the Iran deal.  The US departure from the deal is a blow to the transatlantic community, multilateralism, and the non-nuclear proliferation regime. On V-E Day, the US president directly told his European counterparts that the word of the United States is unreliable, and that any commitment/deal made by the United States is effectively worthless. One caveat, in foreign policy, credibility is as important as interests.

Trump’s foreign policy has been in the making for now over a year. Early on, experts, including myself have framed Trump’s approach to world affairs as transactional. That was in the first 6-month of his presidency when he was still under tutelage of the traditional American foreign policy establishment. In year 2 of his mandate, Trump is now surrounded by his choosing, that includes John Bolton, as national security advisor, and Mike Pompeo, as US Secretary of State. Both opposed to the Iran deal. James Goldgeier is correct when emphasizing that “Bolton and Pompeo joining the team left [US Secretary of Defense] Mattis isolated in arguing the Iran deal was working.” Year 2 is about the implementation of the pledges made on the campaign trail. One major pledge and a driving force behind Trump’s foreign policy has been erasing Obama’s legacy.

President Obama understood that American foreign policy and interests can better be served via multilateralism and diplomacy. Obama had learnt the mistakes of foreign interventions made by his predecessor and favored in fact the used of targeted operations (for better or worst). Under his two mandates, President Obama managed to finalize the COP-21 agreement, the JCPOA, rebuild transatlantic relations (one attempt was the Transatlantic Trade and Investment Partnership) and solidifying the US position in Asia with the Trans-Pacific Partnership (TPP). President Obama’s accomplishments had united the right and the Republican party and fuelled the message of candidate Trump on the campaign trail based on some sort of anti-globalist and anti-foreign policy elite defending the liberal order.

Once elected, President Trump did not wait too long before leaving the Paris climate deal, retrieving the US seat from the negotiation of the TPP, putting tariffs and quotas on aluminum and steel, moving the US embassy in Israel to Jerusalem and finally leaving the Iran deal. On the climate deal, the international community responded by reaffirming its commitment to meeting the goals defined in Paris without the US, one of the largest polluters. It was a disappointment for European allies. But many were not surprised considering the perceptions and rhetoric on climate change in the American political debate. The US withdrawal from the Paris climate deal sent the initial signal to Europe and the world about US foreign policy under Trump. But the successions of policy rebuttals are now building up in increasing tensions and discomfort between the two sides of the Atlantic. On the Iran deal, both French President Emmanuel Macron and German Chancellor Angela Merkel had been intensively lobbying the US president to reconsider its decision.

President Trump’s argument was that the Iran deal was one of the worst deals ever and that it did not do enough to address Iran’s ballistic program and curb Iranian foreign policy in the region. The Wall Street Journal’s editorial sums up very well the voice of the anti-Iran deal advocates. The Trump administration expects that by re-implementing the sanctions it would put so much pressure on the regime that it will ultimately bring it to collapse. President Trump and national security advisor Bolton are in fact hoping for regime change. When President Macron prepared his visit to the US a couple weeks ago, he talked on Fox News about not having a Plan B with regards to the Iran deal. The US neither has a Plan B today, nor one for tomorrow if the Iranian regime further radicalizes or even collapses.

From Europe’s point of view, the exit of the US from the Iran deal implies several dimensions: first, it undermines European commitment to multilateralism and more importantly the rules-based order, the centerpiece of European foreign policy. The Iranian nuclear deal is a “key element of the global nuclear non-proliferation architecture.” It embodies a success for European diplomacy, which has been the main driver over 12 years of negotiations beginning with HR Javier Solana (E3+1). The Iran deal represents “the foremost proof of their [European] capacity to act coherently and effectively.”

Second, it creates a considerable financial and economic dilemma under the current circumstances. With the US departure and re-imposition of US sanctions, European companies could be in violation of such sanctions. It comes at the time when of the Trump administration unilaterally increased tariffs and quotas on aluminum and steel and the Europeans are currently receiving a temporary exemption. As mentioned by EU chief foreign policy Frederica Mogherini, “the European Union is determined to act in accordance with its security interests and to protect its economic investments.” French, British and German officials must now navigate some tricky waters as EU companies, such as Airbus, Danone, Renault, Total and Sanofi, could be facing penalties under US sanctions. The US ambassador to Germany, Richard Grenell, told “German companies doing business in Iran should wind down operation immediately.” The lack of understanding of diplomatic protocol by the American diplomat is quite telling.

Third, there are considerable geopolitical ramifications in a highly volatile region. The nuclear deal has played a role in maintaining a certain level of stability (at least status-quo). The Europeans are seeking to maintain the deal and are committed to “work collectively on a broader framework” covering Iran’s nuclear activity, ballistic missile program and seeking for greater stability in the Middle East.

Fourth, it demonstrates one more time the lack of willingness by European powers to assume their European sovereignty in advancing and defending European interests. President Macron in his acceptance speech of the Prix Charlemagne, asked this critical question: “Are we accepting the rule of the other or the tyranny of the events or are we making a choice by ourselves of a deep autonomy and yes, of a European sovereignty?”  The US-EU relations are deep and have evolved over time. Since the 1950s, Washington has called on Europeans to build up their power and influence, and Europe has struggled with such task. Now with the current administration, the EU and Europeans are facing a complex conundrum: developing a tough and united position against the Trump administration without damaging its relationship with the United States.

On V-E day, a day of commorancy of transatlantic unity defeating Nazism and fascism, the American president made a case for an America first, America alone (at the exception of Israel and Saudi Arabia), and for undermining the interest of the international community. The case made by President Trump and some of his foreign policy allies, like Senator Marco Rubio, is that the Iran deal was a political agreement signed by President Obama and not by Congress (which is true). For instance, Senator Rubio emphasized in a tweet that the deal was “not a binding agreement under US law b/c never submitted for Senate approval. It is a political agreement made by the previous administration.” This is a dangerous game to start playing and to justify major diplomatic shifts.

Now the concept of ‘America First’ may play very well with a specific segment of the American electorate, however, it is not effective with the international community. Reciprocity is a core dimension of international relations. Under the liberal order, the US has certainly advanced its interests, while having positive and beneficial outcomes for American allies. In the case of the Iran deal, the Paris agreement, the tariffs/quotas, American allies are obvious losers. President Trump wants to keep his promises to his base, but what about his European counterparts? How can a European leader defend transatlantic cohesion under the terms and conditions advanced by this administration?France’s Finance Minister Bruno Le Maire said EU states would propose sanctions-blocking measures to the European Commission. He even asked “Do we accept the vassalization of Europe in commercial matters? The answer is no.”

President Trump mentioned in withdrawal speech that his action sends a critical message that “the United States no longer makes empty threats.” We will see on this point as so far US interventions abroad under President Trump have been so limited and frivolous. Trump is making unilateral decisions with lasting consequences without any grasp of the issues and policy outcomes. In year 2, President Trump is continuously isolating the US by proving that American commitments are in fact empty promises.

(COPYRIGHT 2018 BY POLITIPOND. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED WITHOUT PERMISSION).

Thoughts on populism and post-Italian elections

Credit: The Financial Times

Despite the election of Emmanuel Macron at the helm of France less than a year ago, the populist wave has maintained a strong footprint and influence over European politics. The outcomes of the recent legislative election in Italy confirm that a core EU member state and Eurozone’s third largest economy has chosen a populist movement, the Five Star Movement (M5S), and an extreme right party, Northern League, to lead Italian politics for the upcoming years.

The story behind the results of the Italian election of March 4, 2018 is shaped by a series of factors: migration (influx of over 750,000 migrants since 2011 from Sub-Saharan Africa), frustrations towards the EU and Eurozone governance, ethno-nationalism (especially for Northern Italy), stagnating economy and increase of poverty (11.1% unemployment rate and 37.8% youth unemployment rate), and disillusionment with Italian political establishment. In addition, the results highlight the division between several Italies: in the North, the Northern League gained the most voices; in the South, M5S was the big winner; and in the middle, a faction of center left.

In the upcoming weeks, party leaders will be working on building a coalition in order to gain a majority. It was projected to see a coalition between Forza Italia and the Northern League, but in recent days Party leader Matteo Salvini expressed openness to join a coalition with M5S and other parties, at the exception of the Democratic Party. “The choice of speakers for the lower house of parliament and the Senate, due after March 23,” writes Giada Zampano of Politico “will provide the first hint as to possible alliances before parties consult with President Sergio Mattarella about forming a new government.” Mathematically, no future government can be formed without either M5S and/or the Northern League.

Here is my discussion with eTBS This Morning‘s host, Alex Jensen, on the populist wave over Europe in light of the Italian election, and the transatlantic link between European and American populist movements: audio file here or on iTunes here.

(COPYRIGHT 2018 BY POLITIPOND. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED WITHOUT PERMISSION).

Paradise Papers – A Story of the Disdain for Democracy by the Transatlantic Elite

The “paradise papers” shine a light on the mechanisms utilized by global elites and corporations to avoid paying taxes. These latest revelations on the dark mechanisms of global finance, known as the “paradise papers,” emerge a little more than a year after the “panama papers.” But a clear distinction must be made between the two giant leaks: the panama papers were about illegal financial activities, while the paradise papers expose the legal financial and fiscal instruments available to the global elite and corporations.

Over a period of a year, 13.5 millions documents were analyzed and verified by the International Consortium of Investigative Journalists (ICIJ) and its 96 partners, such as the BBC, The New York Times, and Le Monde. These revelations are based on a leak of documents in 2016 shared to the german newspaper Süddeutsche Zeitung. This year long investigation has permitted to expose the complex mechanisms of fiscal optimization utilized by corporations and the global elite (see here the documentary by Vice on the investigation). The documents are composed of three major categories:

• 6.8 million internal documents belonging to the international offshore law firm, Appleby, located in Bermuda with branches in ten tax heavens,
• 566,000 internal documents from the law firm Asiaciti Trust in Singapore,
• and 6.2 millions documents from confidential registries in 19 tax heavens.

The paradise papers are particularly damaging for the transatlantic global elite involved in this massive tax evasion. The “paradise papers” are in fact the obvious demonstration of a total disrespect of democratic and social values by a segment of the transatlantic elite. As argued by an editorial of the french newspaper Le Monde, this mechanisms “endanger the principle of the equality of all in front of taxation.” Among them, so far the Queen of England, Elizabeth II, members of Trump and Trudeau’s entourages, and other wealthy individuals appear to have had prior or ongoing activities to avoid contributing to national taxation.

Politipond argues that the “paradise papers” are even more scandalous than the “panama papers” considering the current transatlantic political, economic, ideological and social climate. The “paradise papers” ought to be put into perspective along four points.

The first point ought to be political. The transatlantic political class has increasingly been more connected to, or simply is, the global elite. In the US, Donald Trump was brought to D.C. on the pledge to ‘clean up the swamp’ and on a variety of ‘America first’ slogans. Even though these rhetorics gathered great appeal on the campaign trail, the composition of his administration tells a completely different story. These latest papers show that three leading figures of the Trump

@Tom

 administration, Wilbur Ross, Secretary of Commerce, Rex Tillerson, Secretary of State, and Gary Cohn, Economic Advisor at the White House have or are utilizing these optimization mechanisms for personal profits. Other individuals and influential republican donors, such as Robert Mercer and the Koch brothers, appear in these documents. So far the most damaging allegations go against Mr. Ross, whom is potentially facing a conflict of interests, as he is still retaining “investments in a shipping firm he once controlled that has significant business ties to a Russian oligarch subject to American sanctions and President Vladimir V. Putin’s son-in-law.” This financial connection does not imply that Mr. Ross is a piece of the Russian puzzle involved in the meddling of the 2016 American elections. To the contrary, Ross’ spokeperson claimed that Mr. Ross has been supportive of the American sanctions against Russian entities. But this connection demonstrates an absolute lack of morality in the behavior of some members of the American elite and government officials. In a ‘normal’ democracy, Mr. Ross should have already provided his letter of resignation to the President (watch here Mr. Ross’ response).

The second point is economic. The Euro-Atlantic community has been confronting a considerable decline since the 2008 financial crisis. If the US has recovered quicker than European economies, the economic crisis has considerably affected a wide segment of the transatlantic citizenry. In both American and European economies, taxpayers were the one to fit the bill to bail-out, rightfully so, the banking and financial sectors in order to avoid a complete collapse of the transatlantic economies. But since then, the stock market, particularly in the US, has done fantastically well, while transatlantic wages for the middle class have stagnated. Unfortunately, strong financial data and performance have not translated into the real economy. Taxation is an important equalizing instrument in the hand of governments in order to finance the state and social programs among others.

The third point is related to ideology. These allegations contradict the push occurring in the US and some countries in the EU, lately in France with President Macron, to promote trickle down economics, meaning tax cuts on the wealthy, in order to promote investment. The concept/theory implies that income and capital gains maintained thanks to tax breaks and financial benefits to wealthy individuals and businesses permit to stimulate economic growth. This theory was, once more and recently, demonstrated as fantasy by the Kansas experiment.

In the US, the blame usually falls on the shoulders of the poorest and weakest. Elected officials have historically blamed welfare programs, such as food stamps, in order to explain the ever expanding  deficit. In this case, the American elite is demonstrating that in a country wherein taxation is not the highest in the world, fair contribution via taxation is not as automatic as expected. The New York Times reports that “Americans — companies and people — dominate the list of clients.” Among these American corporate giants, Apple, Nike and Uber, have avoided taxes legally through creative bookkeeping.

Helping the wealthy getting richer through offshore maneuvers is not a “benign benefit,” said Harrington, a Copenhagen Business School professor. “When the rich get richer, the poor get poorer, because individual wealthy people are not paying their fair share of taxes.” The inequalities within the Euro-Atlantic societies are increasing and the gap is becoming wider between the ultra-wealthy and the middle class.

In Gold, 2017

As illustrated above in the chart from an analysis published by Chicago Booth Review, the gap is not only wider, but the income of the bottom 50% earners has not increased in the last 34 years and the middle 40% only show a rise of its income by 42%. A 42% increase is not small, but compared to a 121% for the top 10 and 205% for the top 1%, it is quite minimal. In addition, over the last 30 years, the quality of the American welfare state has declined forcing Americans to increase their spending on their healthcare spending. Income inequality has considerable grown wider in the US since the 1960s. For instance, a recent report explained that “the richest 1% of families controlled a record-high 38.6% of the country’s [the US] wealth in 2016.”

Last but not least, the greatest consequence is social. Tax evasion, in this case legal, undermines that basic structure of Euro-American democratic societies. These directly undermine the basic ‘social contract’ and fabric that citizens have with their fellow citizens and governments. Taxation for too long has been framed as a punishment, when in fact it is an individual contribution, a civic duty, to the construction, physically and psychologically speaking, of the society, country and ultimately the defense of the public good. In a Western democracy, citizens are expected to contribute. But as it was demonstrated by the Trump campaign and rhetorics, a significant number of American voters agreed and supported a man proudly exposing his successful cheating (he has yet to release his taxes, which could prove the contrary). In an even more grotesque move, Mr. Trump pushed the argument further claiming that because he had successfully cheated, he would be the best person to ‘fix it.’

So far, we are only in the first weeks of the release of the documents. The “paradise papers” demonstrate the facility for the global elite to hide their wealth in all legality and impunity in tax havens through shell companies or other complex mechanisms. It is difficult to image Euro-Atlantic states pushing for an end to this legal loopholes, when states are increasingly in the hands of the global elite. “It won’t be lost on wealth managers and those in the offshore industry,” Professor Harrington said, “that we are reaching sort of French Revolution levels of inequality and injustice.”

In the case of Europe, the EU and other international organizations such as the OECD (listen here in French the recent interview of Pascal Saint-Amans, Director, Centre for Tax Policy and Administration at the OECD), have put pressures on offshore havens in order to reform their laws. As argued by Samuel White of EurActiv, the “paradise papers” may “provide the impetus the EU needs to finalise an effective tax havens blacklist and end tax competition between EU member states.” In the case of the US, the Congress has had no desire to address these issues in recent memory and the data in this latest leak demonstrate it. The Euro-Atlantic societies need to wake up and start pressing elected officials in order to tackle these systemic tax avoidance mechanisms. These inequalities are directly at the heart of the problem of the Euro-Atlantic societies seeking for alternatives in the extremes. Surprisingly enough, these allegations have not had the impacts as one would have expected. Impunity can only continue if the citizenry is consenting.

(COPYRIGHT 2017 BY POLITIPOND. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED WITHOUT PERMISSION).

 

The Iranian Dossier – France’s Position

Shortly after the decision by the Trump administration to refuse to certify the Iran deal, and “instead tasked Congress with determining whether to take punitive action,” I was invited by the Program in Arms Control and Domestic and International Security (ACDIS) at the University of Illinois at Urbana-Champaign to provide an analysis on the French and European position regarding the Joint Comprehensive Plan fo Action (JCPOA).

Concerns that Iran may seek to develop its own nuclear arsenal once the Joint Comprehensive Plan of Action (JCPOA) expires in 2025 are legitimate. But how can one make an informed decision to decertify the deal when so far Iran has complied with the terms of the 2015 agreement signed under the UN auspice?

Politically speaking, Donald Trump, against the recommendations of his top advisors decertified the deal after having already recertified it at two previous occasions. While this decision may appeal a Trumpian base that perceives multilateral and diplomatic efforts as a form of weakness undermining American grandeur, a divide between the US and the Europeans is apparent regarding the survival of the Iranian nuclear deal. European counterparts, especially France, Germany, the United Kingdom and the European Union (known as the E3/EU), have not shied away from expressing their opposition to such unilateral decision by the White House.

To read the rest of the analysis, click here. 

(COPYRIGHT 2017 BY POLITIPOND. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED WITHOUT PERMISSION).

The Disintegration of Europe?

Could the greatest threat to the unity and future of the European Union come from within the member states? For a long time, the concerns were coming from capitals seeking to leave the block, economic difficulties or even foreign pressures. With the 2016 Brexit vote, the national decision to exit the EU has in fact proven to foster unity among the member states on maintaining the integrity of the Union. But with the 2014 Scottish referendum (calls for a second referendum are being advanced), the movements within the nation-states to seek for greater regional autonomy, influence, and power from the national capital have been relentless.

The Catalan crisis is an illustration of a region seeking for independence from its state. The fraught relations between Madrid and Barcelona are real (read past analyses here and here). The crisis continues to escalate. Over the weekend, Prime Minister Mariano Rajoy declared that Madrid, the central government, would remove the region’s secessionist leaders. PM Rajoy announced the use of the Article 155 of the Spanish constitution, a radical step and an unprecedented event, which will dismiss the Catalan Cabinet, see Madrid assume all the powers of the regional executive, curb the role of the regional parliament and call for new regional election in the coming six-months. The central government does not seem keen at the moment to seek for mediation, but rather continues down the road of confrontation.

In addition, over the weekend, two wealthy Italian regions, Lombardy and Veneto, voted in non-binding referendums in favor of greater autonomy and seeking more power from Rome. These referendums, promoted by the Northern League ruling both regions, are not calls for secession from Rome, but instead a call for greater say and influence on issues of tax distribution and financial independence on several areas such as security, immigration and education.

@ European Commission

Both Northern Italian regions contribute to a significant share of the Italian economy, with 20 percent for Lombardy and 10 percent for Veneto. Despite a significant share of Italian GDP, last summer Veneto received a €17bn rescue deal to address the banking crisis.

Even though it is too early to talk of a full fragmentation of some member states and the European Union, several trends and observations shall be advanced in order to rationalize and explain these forces at play. Prior to looking at a series of questions, which could contribute to the development of a series of hypotheses, one ought to recognize the complexities and particularities of each secessionist movements and the unique histories of the member states within the EU and their relationships with Brussels. These hypotheses try to identify commonalities between the recent movements in order to comprehend the reemergence of these regional forces.

• Are wealthy regions done with solidarity via financial redistributions to other regions/states? Should the EU or the state be blamed for it?
• Are these referendums informed by a conscious desire to guarantee cultural and linguistic survival, authenticity and uniqueness in a globalized world? This feeling is very much represented in Catalonia (despite being a major global touristic destination), in Nice and Corsica (France), and so forth.
• Is the EU perceived as the enemy? In some regions of the EU, the EU or Brussels and in particular the Commission, are perceived as the actor promoting economic liberalism and ultimately undermining a certain savoir vivre. But in the recent case of Catalonia, the EU is called upon to mediate in domestic politics and national matters. Even further, there are some cases of desire to join the Union as a full member, which is a fantasy considering the responses of most European capitals and support to PM Rajoy.
• The regional calculus takes for granted the core responsibility of  the nation-state: national security and survival of the state. War and peace are forgotten concepts in Western Europe, which is quite ironic considering the state of European peripheries from the East (Ukraine) to the Mediterranean basin.
• Are referendums the way to proceed in order engage with the central government? Do referendums serve the interests of the majority or only of the few?
• Do these separatist movements inform us of a higher desire of activism and democratic inclusion? Meaning, there is a feeling of deposition to control civic life and influence the making of the nation. By scaling down from the national capital to the regional capital, there is a belief that one can have a greater say and influence in shaping the policy-making process and therefore the policy outputs. This democratic argument was very much present in the Brexit vote. These movements represent to some extent the end of centralized nation-states. But does this feeling of democratic inclusion at a lower level illustrate a narrow understanding of the world? It is not certain that an hypothetical sovereign Catalan state can, on its own, weather global forces from flow of capital to people.

@ Roland Brückner

Lastly, could we go even further and see these regional forces as the success of the European Union emphasizing that the state is now unable to fulfil the need of national citizens. In the case of Catalonia, the EU flag has been flown along the regional symbols. However, it is not certain that other regions would feel the same way. But if this were the case, the current EU would not be suited for the move towards a federation of regions considering that it is currently a Union of Sovereign States.

(COPYRIGHT 2017 BY POLITIPOND. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED WITHOUT PERMISSION).

Not all is well in Europe

 

@ Getty

With the election of President Macron in May and the guaranteed re-election of Angela Merkel, the European Union and the state of European affairs were supposed to return to the positive. Unfortunately, a series of recent events have exposed deep problems in Europe with the rise of AfD in Germany, the call for independence by Catalonia, the UK-EU tensions over the terms of Brexit, the election of Sebastian Kurz in Austria, and the recent assassination of a Maltese journalist. These recent events, prior to the European Council meeting on October 19/20 in Brussels, display domestic tensions and the need for greater unity at the EU level. But both seems incompatible at the moment.

Despite winning a fourth-term as Chancellor (past analyses here and here), Angela Merkel has yet to finalize the structure of her government. The strong results by the Alternative for Germany (AfD), extreme right party, was a response to Merkel’s Willkommenspolitik towards refugees since 2015. AfD capitalized on the fear associated to immigration and the perceived undermining of German identity. Chancellor Merkel is working on the coalition talk. On Sunday, Merkel’s CDU lost an election in the northern state of Lower Saxony to the SPD, which could affect her upcoming coalition talks. With the decision by SPD not to enter in a coalition with the CDU, Ms. Merkel will have to move towards the option of a Jamaica Coalition (with the pro-liberal and green party). The talks to form a coalition will be difficult considering the differences of policies and options on fundamental issues from immigration, EU reforms, taxation policies and environmental protection.

In the case of the UK-EU relationship as part of the Brexit negotiations, the current tension is centered around the financial obligations of the UK, or the net contributions of the UK to the EU’s budget in 2019 and 2020.

@ Olivier Hoslet/EPA 

 Until an agreement on the UK financial obligations is set, the EU is not willing to move forward regarding the terms and type of relationship between the UK and the EU post-Brexit. Prime Minister May changed the tone with her recent speech in Florence and confirmed that the UK will “honour commitments we have made during the period of our membership.” But the EU is expecting more concrete terms coming from the British leader. At home, PM May is facing a difficult front from the hard brexiters, framing the financial obligations as a ‘divorce bill,’ and members of her own party. She appears to have lost credibility domestically affecting her ability to shape a common position, and her European counterparts are concerned about her ability to stir the negotiations and ultimately deliver. Until the question of financial contributions is settled, PM May will not be able to move forward and discuss the terms of the future relationship between the UK and the EU. As reported by the Guardian, European leaders are the ones overruling EU chief negotiator, Mr. Barnier, whom suggested opening talks about the transition phase. But it appears that some European capitals are not ready to respond to May’s call. Ultimately, “the problem is not in the commission so you will not find the solution in the commission.” Therefore, the upcoming European Council will be critical for PM May to make a her case with as many EU leaders as possible.

On Sunday, Sebastian Kurz became one of the youngest elected leaders, at 31, as the Chancellor of Austria. Mr. Kurz, leader of the conservative right wing Austrian People’s Party (ÖVP), won the national election with 31 percent of the vote. The Social Democratic Party of Austria, which currently governs in coalition with People’s

@ David Sailer/FT

Party, received 26.7 percent, while the Freedom Party, extreme-right, had 27.4 percent. Traditionally, the People’s Party and the Social Democratic Party govern in a coalition, but this time, Kurz may be forming a coalition with the extreme-right taking the country back to 2000 when Jörg Haider led the country triggering political sanctions by the EU. Austria is one of the wealthiest EU countries with one of the lowest unemployment level and highest standard of living. But during the 2015-16 migration crisis, Austria took part of Merkel’s Willkommenspolitik welcoming a considerable number of refugees. During his tenure as Foreign Minister, Mr. Kurz, was behind the drive to seal the Western Balkan route in 2016 and was critical. The theme of the election, as it was the case in the other western countries, was identity, in particular anti-immigration and anti-Islamization. For instance, he has been calling for effective defence of the EU’s external borders, a stop to illegal immigration and curbs on foreigners’ access to welfare payments. “Anti-immigration populism and nationalism” wrote Steven Erlanger and James Kanter of the New York Times “are challenging the European Union’s commitment to open borders for trade and immigration.” In the coming days, Kurz will be building his coalition, but a move to the extreme-right appears as the new normal for Austria.

The continuous tension between Madrid and Catalonia represents a considerable crisis in one of the largest Eurozone economies (read two recent analyses here and here). After a referendum, considered by Carles Puigdemont, as a victory towards the independence of Catalonia from Spain, he has failed to call for it during his address to Catalan lawmakers on October 10. PM Rajoy asked Mr. Puigdemont to clarify his address by tomorrow (October 19). In case of a failure to comply, Madrid may use its emergency powers to take administrative control of the region by invoking the article 155 sending the country into a deeper political crisis. The tensions between Madrid and Catalonia continue to escalate despite a recent call by Mr. Puigdemont asking PM Rajoy to initiate a negotiation in order to find a solution.

Last but not least, Daphne Caruana Galizia, Maltese journalist, was assassinated on Monday in a car bombing in the smallest EU member state, Malta. She had made a name for herself exposing ramping corruption at every levels of the Maltese society and political arena. During the Panama Papers’ scandal, she exposed the link between politicians and shell companies. More recently, she uncovered financial dealings between family members of Azerbaijan’s president and Malta’s prime minister, forcing snap elections. Her assassination is latest attempt to undermining freedom of press and expression in Europe and it requires proper response and inquiry by the Maltese government and the European Union.

All these recent issues illustrate considerable challenges for the future unity of the bloc, but as well expose major systemic and domestic failures. These issues related to ethno-nationalism, populism, secessionist desires are ramping and require stronger domestic initiatives to shrink economic and social inequalities, address sub-national identity and cultural fears, and bring back a certain civility in the political discourse. At the EU level, these crises illustrate the  a growing disconnect between Brussels and the capitals. Fascinating enough the EU is being criticized for being too little integrated on issues of migration and being too passive on questions of regional secession, but the EU does always not have a mandate to dictate policies and rules in certain areas of political life.

Each selected case exposes the undermining of core EU values from freedom of expression, to maintaining democratic values, inclusion, and ultimately the centrality of the rule of law. Austria is another piece of the European populist puzzle and highlight the shift toward the extreme-right. Hungary and Poland are the examples of the undermining of EU values and a clear shift towards non-democratic regimes. For instance, Hungarian Prime Minister Viktor Orban has championed what is refered as “illiberal democracy.” Austria illustrates that the East-West divide continues to widen. Populism is vibrant and spreading throughout Europe and it is shacking the democratic foundations of EU countries and the EU.

(COPYRIGHT 2017 BY POLITIPOND. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED WITHOUT PERMISSION).

 

Catalonia: A Disaster Waiting to Happen?

Photograph: Brais G. Rouco / Barcroft Images

Guest Contributor: Diana Soller

Let’s get straight to the point: self-determination of peoples. It is a very laudable theoretical concept. All peoples should have the right to choose the nation they wish to belong to, especially when they have a distinctive culture and a different language, as well as political and economic viability to build an independent state. And we, Europeans, ex-colonialists, field with guilt for our ancestors’ acts, tend to favor the rebels, independently of the justice and the consequences of their cause.

Historical Rationales for Independence

But there is also the other side of the story: in his most recent book, Michael Walzer uses three case studies of the past, India, Algeria and Israel, whose legitimate claims of independence where much more consubstantiated, to prove that “liberation movements” do not represent the expression of the majority will (people are much more concerned in surviving and moving ahead with their lives in troubled times), but the position of a separatist elite who builds a narrative and does everything they can to convince the population that their intentions are fairer and their view of history is much more accurate than the one the status quo power has been trying to impose.

In practice the paths towards independence are sinuous and trapped. They are played in a dangerous arena where almost everything is admissible for the cause of independence. It is an opportunistic and dirty game where the two sides are waiting for a weakness of the rival. It generates violence. In more extreme cases, it generates civil war. In the most extreme cases, it generated ethnic cleansing. At the regional level it generates instability. Very often it is contagious to sleeping separatisms that start to reevaluate their possibilities. Of course, we think, nothing of this kind is going to happen in Catalonia. After all, it is the 21^st century, and this is Europe. But let me remind you of two things: on the one hand, the two sides of the conflict, Barcelona, and Madrid, have already reached extremes that we never thought possible in a democratic context. On the other hand, the last few years have demonstrated that nationalisms, of the emotional, ideological, centrist, and extremist kinds are not a relic of the 19^th century. They are alive and kicking. Remember that history does not repeat itself but it rimes. Nationalisms are back, now in a context, different from the past. And we, in Europe, are ill prepared to deal with them.

The Catalan Case

How did we get here? The Catalonian separatism has a long lineage. The national day of the region, September 11, is related to the events of 1714, when Barcelona lost its autonomy to Spain in that War of Succession. In the 20^th century, the mores and the language were trampled violently by the bloody Civil War and then by Franco’s regime, trying with particular roughness, to dissolve the Catalonian culture. The collective memory of these events has been passed along generations, as the testimonies from Barcelona, since the mock referendum of October 1, published in the international press, have been claiming. The nationalist feeling was partially placated (ironically) by the 1978

Cartoon: Kap

Constitution, that inscribed the right to regional autonomies in the context of the “indissociable unity of the Spanish nation”. But, albeit Catalonia’s acceptance of the founding text of Spanish democracy, the relationship between Madrid and Barcelona was always ambiguous. The Generalitat has always tried to find ways to further autonomy, while the central government has always been keen on protecting its powers. But for considerable period, the regional government was in the hands of moderates. First, a right-wing coalition, the CiU was ahead of it (1978-2003) and then it was replaced by its left-wing equivalent, a coalition led by the PSC, the Catalonian branch of the PSOE (2002-2010). The radical separatists were relayed to the margins, namely ERC, a leftist republican party that tried an independence coup a couple of years before the civil war and the several anarcho-unionist groups, also very active before the war.

However, minority ideas tend to fall asleep but never die. And the Catalonian separatism woke up due to three main factors: first, the economic crisis of 2008, that generated a feeling of injustice as Barcelona profits (around 20 percent of the Spanish GDP) were redistributed to the poorer provinces; second, the judicial process moved by Mariano Rajoy’s Popular Party, between 2006 and 2010, that resulted in the removal by the Supreme Court of the status of “nation” (ambiguous) that had been approved in a legal local referendum. The SC alleged reasons of unconstitutionality and the PP claimed reasons of balance between unitarists and regionalists; and third, the political change in the composition of the regional government, that started to be ruled by the coalition “Together for Yes” (to the independence) that mixes, since 2015, the CDC of Carles Puigdemont, a right liberal party that became separatist as a result of the policies of the central government; the ERC, the republican independentist party of the 1930’s; and the CUP a left wing separatist movement composed by several small radical groups. Together they have qualified majority at the Generalitat, even though their only commonality is the independence of the autonomous region.

The Volatility of Nationalist Separatism

This change went relatively unnoticed, but aligns with the similar rise/growth of diverse populist movements across Europe (old nationalisms, new times). But this particular one has a different element: the nationalist separatism is a much more sensitive issue, more emotional, and capable of mobilizing passions. Which usually is a Molotov cocktail in politics.

The events that have been succeeding since October 1^st are the culmination of all these tendencies: painful collective memories politicized by a coalition reaching the regional parliament thanks to protest votes against Madrid’s policies; all this in combination with a disastrous management of the Catalonian issue by the central government (including the King Felipe VI). Plus, Barcelona took advantage of the weakness of the chief of central government, Mariano Rajoy, who needed two general elections and almost a year to form a minority government.

This was the context of last Sunday’s referendum in Catalonia. Madrid had the law on its side. It forbidden the public consultation for reasons of unconstitutionality, but the Generalitat was more astute: it disobeyed, and dragged to disobedience more than two million citizens. Nothing was legal in the referendum: plastic ballot boxes, aleatory vote sites, on-line electoral lists of doubtful accurateness, and a very low affluence (around 42 percent) that indicates, according to specialists, that the unitarians simply did not bother to vote, considering the consultation bogus. These arguments would have been more than enough for Rajoy, with the support of Felipe VI, to declare the nullity of the act and move on. As it already happened in the past.

But Madrid lost its mind. So, it sent 12,000 civilian guards to preclude the voting. In this counter-information war, we know that the national police used force against the population (although we do not know how often), we saw mossos d’esquadra (the Catalonian regional police) crying and, according to hospital records, there were almost 900 injured (even though we ignore the extensiveness of the wounds). What remains from October 1^st is the image of the Catalonian people enduring the police intervention against them in the name of independence. TV cameras from around the world captured enough images of disproportional violence to leave Madrid’s international image in the mud and to revolt thousands of Catalans that so far had been happy with the status quo. Rajoy, they say, is an “independentists’ maker”. And in fact, he is. In 24 hours he did more for the independence cause than all separatists together. In democracy, when one has the law and at least part of the legitimacy on their side the use of force against the population (who possibly believed in the goodness of the idea of independence) has two consequences: one loses the morality battle and the support of the population. The independentists won a double victory: they opened a larger gap between then and Spain (and Europe), very difficult to get over and they won the sympathy of the “international public opinion”. If this concept, popularized by Jürgen Habermas during the demonstrations against the Iraq war, is vague and imprecise, its practical effect is well known.

What next?

And now what? There are three possible scenarios. For now, the most likely is a growing tension between the parts, as Carles Puigdemont is likely to declare independence unilaterally this week and Mariano Rajoy has threatened to use all means at his disposal to stop him. It is difficult to predict the endgame of escalation. In politics there are few things as dangerous as separatist nationalism for reasons described above but too important to forget: internal violence, regional instability, and domino effect. Europe is full of separatist movements that might see the Catalan moment as an opportunity put forward their claims for self-determination and autonomy.

The second scenario is that Madrid and Barcelona overcome their differences and start to negotiate (as the population ask them to do this weekend in very large demonstrations). However, the possibilities are scarce and the conflict already reached a high point and depending on Puigdemont’s call a potential point of no-return.

Which take us to the third scenario: bringing in an external referee, a mediator. The successive crisis of the European Union almost made us forget that the main goal of its creation was to avoid that war would return to the continent. And it does not matter how critical each of us might be, the truth is this goal has been fulfilled (except for the Balkans that were Europe but not EU). We reached a critical point where Brussels should refashion its peace-making credentials. Pretending Catalonia is none of the EU competency is the sort of decision that did not pay off in several situations in the past. Let’s hope that Europe is willing to mediate, if called upon, this internal crisis, because peace in the continent must be one of the main values that unites member-states. And lastly, if something goes really wrong in Catalonia, a Pandora Box will be opened challenging the integrity of member states. The Catalan crisis could have greater unforeseen and unwanted consequences on the integrity of the EU than a bad Brexit.

Diana Soller is a research follow at the Portuguese Institute of International Relations (Lisbon) and a weekly columnist at the daily Portuguese newspaper Observador.

The original version of this article was published in the Portuguese newspaper Observador, on October 6, 2017 and can be read here: http://observador.pt/opiniao/uma-batata-muito-quente/ . 

(COPYRIGHT 2017 BY POLITIPOND. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED WITHOUT PERMISSION).