The New Atlantic Order

The financial collapse of 2008 and the subsequent global economic downturn have left American prestige badly damaged. For years its free-trade rhetoric dominated debate within fora like the World Trade Organization and urged second-rate powers to privatize and reduce tariffs. Whatever its political course, American economic leadership seemed unchallenged. It was the era of the Washington Consensus.

Today, the American economy lies in shambles and eight years of George W. Bush have obliterated a great amount of the international leverage and respect that the country could previously count on. American management of globalization is contested as is American predominance on the world stage. Rising powers as Brazil, China and India and old world players as Europe and Russia all demand a place in the Obama Administration’s “multilateral” game.

Serious attempts are made in that direction. The G20 is a fine example of what Henry Kissinger called for last January in “The chance for a new world order“: “creating an international political regulatory system with the same reach as that of the economic world.” A promise that the United Nations has never been able to fulfill, the G20 now revives by shaping the political and financial framework of the future. Read more “The New Atlantic Order”

Five Hundred Is Not Enough?

As we’ve been recently been informed by the various media, Gordon Brown, the prime minister, has pledged five hundred new (presumably) combat-role servicemen to Operation Herrick — the British mission in Afghanistan. Five hundred would boost the British presence to a total of 9,500 service personnel from all the services including the Royal Air Force and the large Royal Navy training body. Within your humble correspondent’s lifetime, Britain deployed whole divisions to operational theatres such as Northern Ireland, where three brigades numbering several thousand kept the police in support of the Royal Ulster Constabulary. A task force of 9,500 does little to compare to the 68,000 American service personnel in “Afghan.”

American defense spending is a staggering 41 percent of the global total. Its armed forces population is so large that the United States Marine Corps is bigger than the entire British Army and due to its all-arms nature, considerably more effective. At a time when American military expenditure dwarfs the whole of the British economy, it is hardly surprising that there is some difference in capability here.

Therefore it is curious that the British media remain shocked that British forces get little mention in American strategic and military dialogue about the region. What is more surprising is that American commentators and possibly even politicos expect a greater contribution from the British Armed Forces.

The briefest of glances at the history of the services from 1945 onward will provide anyone with the knowledge that defense cuts by both parties across all successive governments have neutered the operational capabilities of state. The possibility of fighting the Falklands War in 1982 was small enough, now it would be next to impossible. With the end of the Cold War and the subduing of the Troubles in the Province, further cuts and reductions seem not only economic but dare I say it sensible, certainly in the Army. That this hasn’t been taken on board by our erstwhile journalists is probably due to the myth of the special relationship, on which I have spoken on in the (scarcely) public domain before.

What is certain is that until required reforms in the British Armed Forces are implemented, five hundred troops is about as much as can be deployed with political constraints, and without them there wouldn’t be that much more.

Sarkozy Strikes at the City

With France, along with Germany, leading the way of European recovery, President Nicolas Sarkozy has both the power and the prestige to launch a reinvigorated campaign against what he calls the “freewheeling Anglo-Saxon” model of finance. With his countryman Jean-Claude Trichet heading the European Central Bank and UMP-ally Michel Barnier soon to be installed as the union’s internal market commissioner, Sarkozy appears to have everything in place to make the world see “the victory of the European model, which has nothing to do with the excesses of financial capitalism.” No wonder that people are worried in the City of London.

London was quick to respond. Mayor Boris Johnson traveled to Brussels to lecture the European Parliament but his entourage of rabble-rousers and cameramen did little to persuade them. Nor was Chancellor of the Exchequer Alistair Darling’s argument that “London is New York’s only rival as a truly global financial center,” and therefore Europe should strengthen, not weaken it, well received.

Earlier, in conference with his colleagues from across the continent, Darling compromised on the creation of a European financial regulator. French finance minister Christine Lagarde praised the deal which according to Darling leaves considerable responsibility with national authorities. That is not how his counterparts sold the agreement at home.

Nevertheless, there is some truth in Darling’s statement. A European Systemic Risk Board is to be put in place to spot irregularities in the financial system that threaten to harm it. But it will have no power to leap upon banks to put any questionable practices to a halt. Rather it is supposed to issue recommendations and warnings alone.

Sarkozy has more weapons in store to bombard Paris to the world’s next financial capital however. A European Alternative Investment Directive seeks to install a framework for all alternative fund managers which in London is rather perceived as an attempt to shackle another sector of “freewheeling Anglo-Saxon” capitalism. If that were true, Paris in fact stands to gain very little: hedge funds taking a pre-emptive decision to leave London headed straight for Switzerland, not Paris or Frankfurt.

There is more reason for Londoners to be hopeful. As Ambrose Evans-Pritchard notes in the Telegraph, Barnier is actually “deeply averse to trampling on British sensitivities.” Moreover, his director-general, Jonathan Faull, is British. “Given the circumstances, the Barnier-Faull team is the best that Britain could hope for.” Whether that will stop Sarkozy remains to be seen.

Spanish Socialism is Hampering Europe

Most of the economies of the European Union are slowly moving out of recession. Both Germany and France are boasting modest growth rates and they are pulling other countries, like Italy, on the road to recovery. There is one country that seems utterly incapable of keeping pace however and that is Spain.

Government stimuli have been of some help but the Spanish national bank warns that early signs of recovery are misleading: because imports have fallen even more dramatically than exports have, BNP-figures might appear optimistic but in truth, the country lacks a solid foundation for economic growth.

During the ten years between 1997 and 2007 the Spanish economy was almost exclusively driven by a rapidly expanding real estate market, producing a stable growth rate of 4 percent annually. In the same period the country attracted almost four million immigrants. Now that construction has come to a standstill many of these people are moving away while millions of Spaniards are left unemployed with so much as two million living off unemployment benefits.

Spain’s prime minister Rodríguez Zapatero came to power in 2004 promising to diversify the country’s economy. He intended to invest in renewable energies, bioengineering, high-speed infrastructure, construction and logistics to encourage innovation and the emergence of a solid services economy. Now, five years later, the prime minister continues to repeat his promise will little progress made in the meantime.

“My government’s ambition is to make this an innovative, creative, entrepreneurial country while upholding the social welfare state,” said Zapatero last July. He foresaw no trouble combining the two at the time. “Some people will say that a social welfare state and a competitive economy are incompatible, that innovation is incompatible with workers’ rights. They want to deregulate workers rights, deregulate social rights. That is exactly the same tune as people who say we have to deregulate the financial markets and I do not dance to that tune.”

As a result, Spain faces both an enormous trade deficit and a deficit on the state’s budget of almost 10 percent with the public debt, of course, mounting fast. Zapatero nevertheless counts on foreign investments to carry his country out of recession although no one in their right mind would entertain the notion of investing in Spain nowadays.

It’s not just money from abroad that is lacking however. Spanish banks are hesitant to borrow which is hurting small businesses and the whole of the real estate market because people can’t a mortgage.

Today, finally, the Spanish government announced long awaited labor market reform after unemployment reached a staggering 19.3 percent in October this year. Zapatero proposes to provide for greater flexibility, reducing high dismissal costs but also reducing working hours to preserve employment: a controversial step that seems unwise considering how little it did to once ail Britain’s economy during the 1970s.

Spain’s lack of recovery left the European Central Bank with a difficult choice to make. As the French economy grows once more it is expected to see inflation go up above the European average next year. France has proposed to temper it by increasing the interest rate (a step Australia and Norway have already taken) although this would hurt the Spanish economy terribly by further depriving it of credit. The Bank had to chose between serving France, whose recovery is helping other European economies also, and supporting wearisome Spain because its own government lacks the political will to do so. For the time being, it elects do to the latter, maintaining the interest rate at 1 percent.

Swiss Vote to Ban Minarets

In a referendum proposed by the Swiss People’s Party, the Schweizerische Volkspartei, an alliance of farmers and urban conservatives, a majority of Swiss voters (57.5 percent) agreed to ban the construction of minarets in their country. The government, perfectly democratic, will uphold the outcome while assuring Muslims, mostly immigrants from the Balkans and Turkey, that the vote does not represent “a rejection of the Muslim community, religion or culture.”

It seems odd that one of the wealthiest and safest countries in the world should be so frightened of this architectural display of Islamic culture, especially when one considers that of the 150 mosques and prayer rooms in Switzerland, just four boats minarets with only two more planned. None conduct the traditional call to prayer. Moreover, of the circa 400,000 Muslims in the country, out of a total population of some 7.5 million, virtually none adhere to the codes of dress and conduct associated with orthodox Islam. In other words, the Muslim presence in Switzerland is hardly noticeable.

The Associated Press notes that the vote “taps into anxieties about Muslims that have been rippling through Europe in recent years, ranging from French fears of women in body veils to Dutch alarm over the murder by a Muslim fanatic of a filmmaker who made a documentary that criticized Islam.” In fact, Dutch right-wing politician Geert Wilders immediately called for a similar referendum to be held in the Netherlands today. Considering the opposition he faces in parliament, such a referendum, let alone a ban, is unlikely to come about, but with his support currently polling at around 17 percent (making him the second largest party), Wilders’ fierce crusade against what he believes is a growing Muslim corruption of Western culture is telling.

Unlike the United States, which actually fell victim to a destructive attack by Muslim extremists, most European countries never experienced such extremism first hand. Yet the countries that have (specifically Britain and Spain) seem the least determined to wipe out any traces of Islamic culture whereas in France, the Netherlands and Switzerland, countries that have significant Muslim populations, fear is more widespread.

When Geert Wilders declares the Quran a “fascist” book and proposes to outlaw it, he finds many people agreeing with him. Now, a majority of the Swissdemand that no more minarets be erected in their streets. These are all outward displays of Islam however. Burning the Quran or banning minarets will do little to diminish the threat of Muslim extremism. Quite to the contrary, such measures might well strengthen the fundamentalists in their conviction that the West intends to wage a religious war against them.

Meanwhile, the voice of moderate Islam is overlooked. Hundreds of thousands of Muslims who have adapted perfectly to Western culture while retained part of their heritage feel threatened. While perhaps not an explicit infringement of their freedom to worship, the Swiss ban of minarets is a sad display of intolerance all the same that is terribly unbecoming of a country renowned for its democratic tradition.

Does the Chilcot Inquiry into the Iraq Invasion Matter?

The role of the United Kingdom in the international arena has been one of much debate over the past three decades, but more particularly since the ending of the Cold War. Summed up neatly by former Foreign Secretary Douglas Hurd, the United Kingdom has been ‘punching above its weight’ internationally effectively, driving international policy at the UN during a period of American uncertainty following the disastrous American-led Somalian adventure in the early and mid-1990s and dominating the UN Security Council discussions under Sir David Hannay (then British ambassador to the UN).

This confidence has been knocked more recently through the long engagement in both Iraq and Afghanistan. The war in Afghanistan is Britain’s longest engagement since the nineteenth century, and while public sentiment is still generally behind engagement, Prime Minister Brown and American president Obama have been framing their words with care in the run-up to increased troop deployments, speaking of defending American and British streets from terrorism, rather than rebuilding some far away land’s political infrastructure.

Behind Afghanistan still lurks the specter of Iraq. While American troops remain with boots on the ground, pressure to disengage from Iraq is increasing — British troops withdrew from the country earlier in 2009, and publically, the United States intend to have combat troops out of the arena by August 2010, having already withdrawn from Iraq’s cities in July 2009.  Given the strong feelings expressed by both supporters and opposers of the invasion of Iraq in 2001, the British electorate had repeatedly been informed by the government that an enquiry into the Iraq war would be held once British troops had been withdrawn.

Following the official launch of the Iraq Inquiry on 30 July 2009, the first evidence was heard on 16 November 2009.  According to Sir John Chilcot:

Our terms of reference are very broad, but the essential points, as set out by the Prime Minister and agreed by the House of Commons, are that this is an Inquiry by a committee of Privy Counsellors. It will consider the period from the summer of 2001 to the end of July 2009, embracing the run-up to the conflict in Iraq, the military action and its aftermath. We will therefore be considering the United Kingdom’s involvement in Iraq, including the way decisions were made and actions taken, to establish, as accurately as possible, what happened and to identify the lessons that can be learned. Those lessons will help ensure that, if we face similar situations in future, the government of the day is best equipped to respond to those situations in the most effective manner in the best interests of the country.

The Inquiry committee members are Sir John Chilcot (Chairman), Sir Lawrence Freedman, Sir Martin Gilbert, Sir Roderic Lyne and Baroness Usha Prashar.

The first week of the Inquiry’s evidential hearings proved interesting, and included:

  • British policy toward Iraq in 2001, 24 November, Chairman’s Opening Statement;  Simon Webb, Peter Ricketts and William Patey
  • Weapons of Mass Destruction, 25 November, William Ehrman and Tim Dowse
  • The Transatlantic Relationship, 26 November, Christopher Meyer
  • Developments in the United Nations, 27 November, Jeremy Greenstock

For many, it is this opening week which is probably the most important, and hinges upon two important questions — was the invasion of Iraq by the American-led international force legal, and, whether legal or not, when was the decision to invade taken?

British politicos and public interactions with the media, not least upon radio and television debates, demonstrate that the latter of these two questions is considered the most important. In many ways, the timing of the decision to invade is important, but not for the obvious reasons. The previous Clinton Administration had passed the Iraq Liberation Act in 1998 in the United States, with a stated claim of regime change in Iraq, although not much publically perceptable action was subsequently seen. The Act aimed to work through the Iraqi opposition to establish regime change, but did not sanction invasion. There are numerous UN Security Council Resolutions (UNSCRs) on Iraq, but the most important were UNSCR 678, 687, and 782 which set out Iraq’s obligations over weapons of mass destruction (WMD) and the territorial integrity of Kuwait. UNSCR 1205 of 1998 framed the possibility of military action in the event of non-compliance under the WMD declarations. Discussions over the toppling of Saddam and regime change in Iraq by members of the public — including ex-soldiers who fought in the first Gulf War — focus upon the viability of ‘going all the way to Baghdad’ after expelling Iraqi forces from Kuwait, often concluding that such a proposition was not possible due to the resources available and the threat of becoming bogged down in a long guerilla war. Other arguments for removing Saddam are premised upon the authoritarian and inhumane nature of the regime, and the humanitiarian reasons for invasion. However, these discussions miss the point. The first Gulf War was fought to preserve the territorial integrity of a sovereign state which had been invaded by another state, as protected under the UN Charter, and the responsibility of the UN Security Council to preserve — i.e., to protect Kuwait’s right to exist as a state against invasion by Iraq. To then ‘go on to Bagdhad’ would have violated the very ideals and international obligations under which Iraqi forces had been expelled from Kuwait. Humanitarian intervention was a very popular premise in the early 1990s, until events in Rwanda, Bosnia-Herzegovina, and Somalia (amongst others) deterred further military adventures on the part of Western powers in the name of humanitarian intervention. Besides, humanitarian affairs falls under the UN’s 6th Committee and not the 7th (the Security Council), and has no remit under international law for military action on its humanitarian merits.

These international obligations then frame the engagement with Iraq until the decision to invade was taken. The Second Gulf War was undertaken due to Iraq’s perceived refusal to oblige with UNSCRs on WMD since UNSCR 687, despite the work of the UN’s Weapons Inspection teams. This was made clear under Tony Blair’s statements to the House of Commons, and was the remit under which the House of Commons voted to take the United Kingdom to war. If UNSCR 1441 is seen as giving permission for military action — despite omitting the key wording of ‘all necessary measures’ — then this is only due to the obligations of Iraq under the WMD issues included in previous UNSC resolutions. Only subsequently has the public vocabulary changed to include ‘regime change’ — something which is illegal under international law, under which the two Gulf Wars were fought. If regime change was the true reason for invasion, UNSCR1441 does not permit military action for this, and this then makes the invasion illegal, and its proponents and instigators liable to prosecution for war crimes.

This is why the timing of the decision to invade is so important. If a decision was made, as intimated by some evidence already given to the Chilcot Inquiry, in a private meeting between Tony Blair and George Bush early in 2002 to invade Iraq to instigate regime change, then the legality of the invasion is questionable (to say the least) under UNSCR1441. 

This is why those private meetings between President George Bush and Prime Minister Blair are so crucial to the Inquiry. However, only George Bush and Tony Blair are able to speak of the events in those meetings. Blair is to give evidence to the Chilcot Inquiry, and this is one reason why the Inquiry matters.

Why Van Rompuy Might Be a Wise Choice After All

When the Belgian prime minister Herman Van Rompuy was selected to become Europe’s very first “president” of sorts, all media were quick to characterize his election as the kind of compromise that is so typical of how the continent continues to handle its political future. Especially across the pond, newspapers were weary of the man. Both The New York Times and The Wall Street Journal called him a step backward for Europe: with Van Rompuy at the top, the Americans seem to think, the union can never hope to claim its rightful stake in world politics.

Van Rompuy is something of a bore, that much even the greatest Europhile ought to admit. He was picked over the likes of Tony Blair because he is a conservative and a patient negotiator. Germany, France and especially the United Kingdom don’t care for a Brussels that dictates foreign policy to them: the larger states believe, for good reasons, that they’re quite able to look after their own interests overseas. Besides, Van Rompuy is known to oppose Turkey’s entry into the union: a position that Germany and France both share.

At the same time, whoever occupies the position of permanent chairman of the European Council (which is really all the “presidency” entails) must be able to satisfy the many smaller member states. Hence, the chairman had to come from such a smaller member state himself. Someone of a higher profile, like Blair, would never have been able to secure support in all countries on the continent — that is not even mentioning his initial support for the Iraq War which so many Europeans opposed.

Anita Kirpalani describes the “cautious choice” for Van Rompuy as a wise one therefore. In Newsweek she writes that with Van Rompuy and Baroness Ashton, Europe “picked people who actually have a chance at fostering consensus,” especially on what to do with Afghanistan and Iraq. “What looks like timidity might just lead to a stronger Europe after all.”

David Cameron and the British Welfare State

The Conservative Party in Britain has never been a fan of anything that reeks of socialism. But with David Cameron, it takes on something of a new attitude toward it.

In a speech delivered earlier this month, party leader Cameron admitted that social policies enacted since the Second World War have benefited lots of people: inequality has decreased while access to education and health care is now near universal.

At the same time, people seem to feel less responsible for their own lives and because of that lack of responsibility, they are less inclined to contribute to society voluntarily. “As the state continued to expand, it took away from people more and more things that they should and could be doing for themselves, their families and their neighbors,” said Cameron.

Human kindness, generosity and imagination are steadily being squeezed out by the work of the state. The result is that today, the character of our society — and indeed the character of some people themselves, as actors in society, is changing.

And change, of course, is not something the Conservative particularly cares for. The solution is not so simple as to diminish the role of the state, however. “Just because big government has undermined our society, it does not follow that retrenchment of the state will automatically trigger its revival.”

What Cameron wants is not big government but something he calls a “big society” in which everyone truly takes part. The state is still necessary to bring it about, though. “We must use the state to remake society,” he said.

In the first place, that implies a shift of power from London to local government. Cameron’s thinking is that if you grant people more responsibility, they will act more responsibly.

Compare that for a moment with what Margaret Thatcher said in 1977. “The economic success of the Western world is a product of its moral philosophy and practice. The economic results are better because the moral philosophy is superior,” declared the woman who would go on to lead the United Kingdom for more than a decade. “It is superior because it starts with the individual, with his uniqueness, his responsibility and his capacity to choose.”

Choice is the essence of ethics: if there were no choice, there would be no ethics, no good, no evil; good and evil have meaning only insofar as man is free to choose.

Cameron gives new meaning to this Thatcherist thinking by demanding that Britons be allowed to take charge of their own lives once again.

At the same time, he does set himself the task of fighting poverty and social inequality. “We need new answers now,” he said, “and they will only come from a bigger society, not bigger government.”

Wasn’t it also Thatcher who stated that there exists no such thing as “society” you might ask? “There are individual men and women and there are families,” she said in 1897. “And no government can do anything except through people and people must look after themselves first.” But, she added, “It is our duty to look after ourselves and then, also, to look after our neighbors.”

That’s something that might be contested but it isn’t all too different from what Cameron is saying these days.