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2 May 2024

Far-right seaside dreams

Why is the far right getting prominent in Mediterranean coastal regions? There are similarities and differences as featured in Politico’s election profiles in the Algarve and the Côte d’Azur regions. Immigration is a common issue for both, though with different flavours.

In Portugal, the turn to the far-right Chega comes from previous supporters of the left. The Algarve had been a traditional stronghold for the left with 62% voting for left-leaning parties in the 2019 elections compared to the national average of 57%. That support slowly eroded to 54% versus a 53% nationwide average in the 2022 snap elections. It completely flipped in this year’s elections where Chega came first in that region. This victory was backed by a campaign with anti-immigrant rhetoric, traditional family values, and corruption allegations against the Socialist government. Immigration is seen by locals as a threat to their way of living, be it local rules and the rise in house prices. There are two kinds of immigrants that threaten their traditional lifestyle. The good weather attracts wealthy pensioners to retire to the sea resorts, driving up house prices thanks to golden visa schemes and EU freedoms. The second type of immigration consists of workers from South Asian countries like India and Bangladesh, who come to Portugal’s costal region for seasonal work in the tourism sector.

In France, the turn towards Rassemblement National in the Provence-Alpes-Côte d’Azur region comes from the right. Since the 2015 elections, the region is in the hands of Les Républicains, but there also had been a strong showing of the far-right Rasssemblement National. In the last regional elections in 2021, the race was between the two, where the conservatives got 57.3% of the votes against 42.7% in the second round, while in the 2022 presidential elections, Marine Le Pen won for the first time in this region.

The far-right party no longer instils fear, but a promise, especially for an ageing population. In this region, it is predominantly the French who retire there, rather than foreigners. The Rivera offers a luxury lifestyle in cities like Cannes or Nice, or in the surrounding hills with their vast villas and vineyards. The French seniors are much more receptive to Le Pen’s promises of stopping immigration. Nice had its history of terrorist attacks, and the protective gear at the promenades are a daily reminder that the threat is still there. Here the threat is mainly conceived coming from Africa and Arab countries. This wealthy region may be the missing piece of the puzzle for Le Pen to reach the upper-income echelon constituency.

1 May 2024

Rafah and the moment of truth

Hamas has until tonight to respond to the Egypt mediated proposal of a hostage deal. If they agree to the deal, Benjamin Netanyahu would have no choice but to accept. But Netanyahu is also playing for his own political survival. After bowing to the pressures of members of Israel’s war cabinet to agree on a hostage deal with Hamas using the invasion of Rafah as leverage, Netanyahu flipped yesterday by assuring his far-right ministers Itamar Ben Givr and Bezalel Smotrich, who oppose the deal, that they will go into Rafah anyway, that this is not the end of the war, and that they will not accept any deal. The Biden administration is now floating the idea of suspending certain arms deliveries if Israel were to go into Rafah. There are also increasingly furious protests from hostage families to strike a deal with Hamas to return their loved ones. He could get the deal through even without the far-right, as opposition leader Yair Lapid has pledged to support one in parliament, according to Al-Monitor. So there is no way out for Netanyahu once Hamas agrees to the deal.

It is a tragedy that Israel’s attempt to teach Hamas a lesson caused such a collateral damage, not only for Palestinian lives, but also for how Israel is seen in the world. Rafah would cross the line for many countries. There is already talk of an arrest warrant from the International Criminal Court, and Netanyahu’s plea to Joe Biden to prevent this as if the US could do anything about it. Student protests in the US also signal that US support for Israel may no longer be so steadfast in the future as it has been in the past. There is also a question of how much longer Arab states can hold on to the promise of normalisation if Israel crosses this particular red line. The moment of choice between realpolitik and ideological warfare is about to come.

European and Arab foreign ministers, meanwhile, met in Riyadh on the sidelines of a two-day World Economic Forum event to discuss how to join forces in advancing the two-state solution. As one of the organisers of this meeting, Norway’s foreign minister Espen Barth Eide, put it:

“If we want to move this two-state solution forward it will not happen from the parties. I do not believe that Israel is ready to negotiate at this point, and I do not think that the US is ready to take the necessary leadership.”

If this initiative were to take off, it would be a great success indeed. For Europe, it would also be a way to play a more constructive role in conflict resolution. Josep Borrell invited Arab leaders to present their proposals for a two-state solution, and wants EU countries to invite them to Brussels for discussions, writes Euractiv. His hope is that a proposal from the Arab states would force European countries to overcome their divisions and work towards a joint solution. Several EU member states are also expected to recognise the state of Palestine soon. So far, eight of the 27 EU member states recognise Palestine, Poland, Bulgaria, Romania, Hungary, Czechia, Slovakia, Sweden and Cyprus. France’s foreign minister linked the question of recognition to a strategy towards a two state solution.

30 April 2024

Ukraine's bottleneck

The main reason why opinion in Washington has shifted over Ukraine is the assessment that the country will lose the war because it does not have enough troops on the ground. 

We saw a story in Bild yesterday that would confirm this story line. Of all German newspapers, Bild has been the strongest supporter of Ukraine, so we don't think we are dealing with a case of news selection bias. We know about shortages. This story goes further. Ukrainian commanders are saying that the bottleneck is no longer western weapons, but people who can use them.

We should not extrapolate that information. They may overstate their case to force a change in policy. For all we know, Russia may have the exact same problems, or worse.

Many young Ukrainian men have left the country to avoid the draft. President Volodymyr Zelensky has been hesitant to order a general draft of all Ukrainians. His government recently suspended consular services for Ukrainian males aged 18 to 60 years old, and reduced the age for the draft from 27 to 25 years. There is clearly more they can do. Only 15% of its male population is in active service. 

But what made us listen up is the assertion about bottlenecks. It quoted one brigadier general as saying that he used to think that the lack of artillery shells was the biggest problem, but now it was the lack of human resources. The question is whether the general mobilisation has been delayed for too long. The problem is not only the headline numbers. If you started a general mobilisation today, you would still not have the numbers of people trained to use the weapons.

Bild quoted Roderich Kiesewetter, a CDU defence expert and a former Bundeswehr general, as saying that the best-trained soldiers in Ukraine had been killed or injured, and those still active have been deployed without a break for two years. Exhaustion is becoming a factor in this war. He said Ukraine was lacking a predictable recruitment strategy. Another expert, from the Munich Security Conference, also believes that the right response is to start the draft immediately.

We are more sceptical. Young Ukrainians men who live abroad have means to resist a draft. EU countries cannot just deport them without recourse to legal processes. Nor will all EU countries want to do that. An army of draft dodgers who experienced the comfortable life abroad, and who are recruited against their will, are not going to win this war. Zelensky could lower the age of the draft to 18. But you would be training an essentially new army from scratch in the middle of a war.

So then, we ask, what is the strategy? That is also a question for the western countries that support Ukraine, who don't have any strategy whatsoever. 


29 April 2024

Not in my backyard - migrant edition

Who can send migrants to where? This question is at the heart of a new diplomatic row on the British isles, between the UK and the Republic of Ireland, or more generally between the UK and the EU.

While the UK is preparing to send migrants to Rwanda, Ireland recorded a rise in asylum-seekers that came via the land border from the UK, now making up 80% of the total number of asylum seekers according to the Irish home secretary.

The Irish government is preparing an emergency law this week to send them back to the UK, its prime minister vowing that Ireland is not providing loopholes for any other countries migration challenges. The UK’s response is that they will not take back migrants from the EU as long as France is not willing to take back migrants that made their journey on rubber boats across the channel to reach the UK in the first place. The UK accuses the EU of double standards, while it is not clear at all how the UK could return migrants to France after Brexit. France has been managing the border for the UK since the Le Touquet treaty in 2003. In return, the UK has been paying for French police missions and reception centres. French efforts to prevent people from leaving are often not enough to stop people from crossing and even risking drowning on that journey.

The number of small boat migrants arriving in the UK through the channel has reached an all-time high of more than 7000 in the first four months of this year. Rishi Sunak vowed to bring those numbers down last year. But it seems like the opposite is happening. For Sunak, the fact that Ireland gets more migrants is a good sign that the Rwanda scheme is working, as people realise that they cannot stay in the UK. So rather than deterring migrants from coming to the UK it looks more like they are offloading the problem to Ireland.

This logic is also at the heart of third-country deals, paying countries cash for taking migrants the European countries do not want. But for this, the country has to be declared safe first to comply with international standards. How? Last week, the UK’s Safety of Rwanda act declaring Rwanda a safe country was adopted by MPs and peers and cast into law. It may still be hold up by court cases, but the government’s plan is to send the first group of migrants to Rwanda in about 10 weeks. Being a safe country usually means that the applicant has a genuine connection to that country where it can apply for international protection. But the UK government employs a deterrence narrative saying that any illegal migrant entering the UK could be sent to Rwanda with their asylum requests to be processed there and not in the UK. It is very unlikely that all those arriving on small boats have a link to Rwanda. Will the ambiguity about the application of the law may be enough to slow down the flow of migrants in the coming months? The UK and France may have to revise their arrangement too if not.

This Rwanda pact is similar to the ones the EU has been drawing up with Tunisia and Egypt, paying cash to those governments to take migrants we do not want. It poses moral questions over what a safe third country is for migrants and what incentives and precedences we set when paying others to take migrants we do not want to deal with. It is ultimately a question about taking responsibility.

26 April 2024

Slow death of Scottish nationalism

In the aftermath of the 2016 Brexit referendum, one of the big spoilers was how differently Scotland voted to the UK as a whole. Voters north of Hadrian’s wall opted to remain by a solid two-thirds majority. It was a split that also transcended demographics. So-called left-behind industrial working-class towns in Scotland voted very differently from their northern English counterparts.

This led to a lot of speculation about whether Brexit would further boost separatism in Scotland, and accelerate a split. The idea would be that an independent Scotland would join the EU. It would gain a liberal-minded anglophone member, but one that was substantially smaller and therefore politically easier to handle. Now, however, it should be clear that if the UK ever rejoins the EU, it would be as one country.

Scottish independence as a cause has, for the foreseeable future, died. This is because the popularity of the main party supporting it, the SNP, has tanked. The latest sign of this is the Scottish Greens, the party’s coalition partner in Scotland’s regional government, withdrawing its support yesterday. Humza Yousef, the SNP’s leader and Scotland’s first minister, will face a confidence vote next week. He stands a good chance of losing it.

Based on current polling, a repeat Scottish election in the near future would see the SNP a large loss of its vote share, and power in Scotland’s regional parliament. Scottish elections use a parallel-voting system, with a Westminster-style constituency and proportional representation component. The SNP won almost 48% of this vote in 2021. Polls in the last couple of months put them at around 35% now.

In the PR component, they have gone from about 40% in 2021 to around 25-30% in recent polls. Some of the PR polls even show the SNP losing its lead to Labour. If you look at UK parliament election polling, Labour emerging as the largest party in Scotland in Westminster is a very real possibility. Labour’s own relative caution towards rapprochement with the EU under Sir Keir Starmer does not seem to be hurting it with the most pro-EU voters in the country.

What may be interesting, however, is what the SNP tries to do in order to claw back vote share if it is chucked out of power in Edinburgh and becomes the second Scottish party in Westminster. It is already the most ardently pro-EU big party in the UK parliament. This may become an even stronger feature of its pitch to voters. It will be one of the clearest dividing lines between it and a Labour government that, for the time being, is lukewarm on the EU. We will have to see how this plays out in the possible second term of a future Labour government if the party's overwhelmingly pro-EU base simultaneously launches internal rebellions against the leadership line. 

25 April 2024

Rafah and then what?

What is the point of red lines if they fail to stop what they meant to stop? And what does it tell us about the ones who are setting those red lines? Israel’s war in Gaza passed many red lines, right in front of our eyes. Whenever the Israeli government disregards the warnings from the US and its allies, the rhetoric sharpens, but no action is taken once the red line is crossed. The world adjusts to the new status quo until another unimaginable event shakes the world and a new precedent is set. It reminds us of the settlers’ strategy in the West Bank, where settlers take over land and create facts for everyone else to adapt to their reality. Palestinians only have the choice to go elsewhere or confront. The same happens to the US administration and our governments when it comes to political positioning, and everyone can see it. Israel’s capacity to produce facts on the ground exposes our biggest weakness: we cannot deliver on what we set out to do. What precedent does this set in the world?

Rafah has been one of those red lines. The IDF is ready for an operation in Rafah, waiting for the last go-ahead from the Israeli government. The US administration already softened its red line, now saying that it is not advisable. What will the US or the Europeans do if the IDF enters Rafah without an adequate evacuation plan for over a million civilians who are seeking shelter there? The US and European countries won’t suddenly stop supporting Israel or sending weapons there. A new narrative frame will emerge and everyone pretends that there will be a tomorrow without a yesterday. No one will be held accountable in the political discourse, neither Israel for the civilian deaths and destruction it caused in Gaza, nor the West for not doing more to stop this carnage.

This visible inaction comes at a high price. Our values and human rights principles sound hollow without visible action. There are already tension building up via street protests and at university campuses in the US that have a fledgling civil war quality to it. The West's reputation in the world at stake. Is our human rights discourse just virtue signalling, another way of selling our products with a feel good factpr attach to? Who will take us seriously after that?

China and Russia will not miss the occasion to turn the tables here. President Xi Jinping can point the fingers back to us whenever we raise the human rights violations against the Uyghur Muslims. And Russia is already in pay-back mode. They reportedly have been encouraging Nicaragua’s case against Germany at the International Court of Justice to accuse Berlin of facilitating genocide in Gaza. Will the fact that Russia is behind it disqualify the case in our eyes? That would be a mistake. Germany has a tendency to create dependency relations that eventually turn unhealthy. Be it with Russia for gas, with China for manufacturing, or Israel for Germany’s desire to be on the right side of history this time. It is time to take this mirror of hypocrisy, learn lessons, and develop a more balanced approach that allows real moral choices instead of blind backing of one side, which only leads to a reaction mode.

24 April 2024

Immigration talks we should be having

Politicians spend a lot of time in Europe fretting about illegal, or irregular, migration. One ill-fated attempt to deal with this, the UK’s plan to deport asylum-seekers to Rwanda, passed in the House of Commons earlier this week. Last week, the European Commission set out its ambitions to strike a deal with Lebanon, to stop asylum-seekers reaching the EU from there. Giorgia Meloni now spends so much time in Tunisia, where the EU signed another agreement to limit migration, that she should consider buying a time-share in Bizerte.

There is, basically, a lot of talk about limiting the kind of migration we do not want. But there is also an omerta around the bigger and perhaps more important topic, the necessity of figuring out, and encouraging, what kind of immigration we would prefer.

Fabio Panetta, the Banca d’Italia’s governor, recently made a welcome intervention on this. He made a point which you do not hear very often: that without more immigration, the EU will sink demographically. That will mean both its economic and fiscal situation becoming unsustainable. According to Panetta, a common EU-level policy is necessary. Migrants, legally or not, come into the EU as a whole. Even if they are legally restricted to one member state, practically speaking there is often little to stop them moving across borders in a border-free Schengen area.

In Panetta’s own home country, the situation is especially bad. Italy’s total fertility rate is now 1.25 as of 2021. This is far below the so-called replacement level of 2.1, which is necessary to keep a country’s population stable. The only thing stopping its population from cratering is the immigration it receives already. Even if the government could stumble on a way to increase the total fertility rate to replacement level, something virtually no developed country has managed, there would still be inertia.

This basic demographic reality is acute in Italy, but not unique to it. The only countries mitigating it so far are those that accept high numbers of immigrants and integrate them into the workforce, like the UK, Spain, and Portugal. Yet it is something politicians skirt around, for fear that their voters are not prepared to hear the truth.

What you end up with is a worst-of-both-worlds situation. Politicians, especially if they act on their own and not on the EU level, cannot get a handle on irregular migration and asylum-seekers, despite repeatedly promising to. All they accomplish is raising the issue’s salience, while driving disillusioned voters to the far-right.

But on the other hand, they dodge the other side of the coin, the need to accept and properly integrate migrants to keep demographic, and fiscal, balances stable. Until governments are prepared to acknowledge these trade-offs, we should be wary of the feasibility of any commitments they make to consolidate public finances in the long term.

23 April 2024

EU future goals in Zeno's grip

The EU may roll out programmes with its targets set for 2030 or 2050, but this does not mean that it has the capacity to achieve those. It is a bit like Zeno’s paradox, which taught us a long time ago that before a moving object can reach its end point, it has to move to an infinite numbers of half-way points. This makes it impossible to reach the final destination.

In the case of the EU, it has to pass an infinite number of decision points where its long-term goals have to stand up against current pressures. In economic models, present pressures have more sway than the future. Yet this is only true if the future is not sufficiently represented in the present. When the urgency of the moment leads us to deviate from a given path, it often does so by playing down the impact of this deviation on the future outcome. It is the classic kicking the can down the road tactic. If we were to have perfect foresight, we would take those consequences into account.

We have seen this tendency to procrastinate in the EU during the financial crisis, where a capital markets union would have solved many long term issues. Instead, we patched up the current system with some extra reporting requirements for banks. We see it again with the green agenda where difficult changes are postponed for another day. Long-term goals are increasingly difficult to achieve as more resistance builds up, which requires more compromises to keep everyone happy.

The problem is also a question of representation. We are an ageing society. As such, our time horizon of our own decision making is much shorter than 2050. Could a Commissioner for future generations, as suggested by Alberto Alemanno and Elizabeth Dirth in Le Monde, help to keep the long term perspective alive in European decision making? A representative for the next generation is already included in governments like Finland or Canada. He or she may be able to flag up those longer-term consequences of deviations from the path. But ultimately, will it matter? Smokers know that it is bad for their health to smoke, yet they still smoke. This may be explained by a state of mini-rebellion against what is considered the right way, or by a hope that one is strong enough to defy the predicted outcome, or simply by not minding to die earlier when one feels still young. It is an immature way of looking into the future.

The same could be said about climate change. It is not that we have any fewer warnings. Yet we collectively seem to prefer to look the other way and solve quarrels to reassure farmers, or give our votes to the more climate-sceptical conservatives and the far-right instead. Unless the future becomes our urgency-to-act momentum, a conscious choice everyone has to make in their own lives, there will always be collective action problems that sidetrack us from achieving those goals, even if we all agree that those goals are worthy and good.

22 April 2024

FDP throws down the gauntlet

The remaining 18-months of the German traffic light coalition are going to be hell. The main adversaries in that coalition nowadays are Olaf Scholz and Christian Lindner. On economic policy, the common ground that once formed the basis of this coalition has disappeared.

Today, the FDP will present a 12-point plan, designed to cause maximum push-back from the SPD. On that metric, it already succeeded.

Lindner is proposing a reform of the citizen's income with strict penalties on people who refuse acceptable job offers. He wants to freeze all welfare payments in 2025, reverse the cut in the pension to 63, reduce employer contributions to unemployment insurance, and abolish subsidies for renewable energy. He also wants to abolish the German supply chain directive and boycott the implementation of recently agreed EU directive.

If he had slipped the re-introduction of the death penalty into this list, it would probably not have made much difference in terms of its overall popularity.

Lindner's comments give a foretaste of the 2025 budget negotiations, in which Lindner needs to generate some €25bn in savings. The budget will pitch the three parties against each other like nothing ever did. The purpose of the FDP's 12-point plan is to generate massive protests by both SPD and Green, as they go against the core tenets of their coalition agreement.

We are clearly in an election campaign. It is possible, but not likely, that an increasingly desperate FDP will pull the plug on this coalition. This would depend on what happens at the European elections in June, and the three east German state elections in September. Lindner's game is clearly to cause as much havoc as possible so that he can claim to defend the interests of business in this coalition. It is hard to see that this ends well for him. His agenda lacks coherence. What he and Scholz have in common is that they are both driven by red lines.   

As we saw during his visit to China, Olaf Scholz is also in full retreat towards the neo-Mercantilist position his party adopted under Gerhard Schröder, even going so far as to question the EU's competence over trade policy. It should come as no surprise that the German government is currently not contributing to solutions of European or global problems.

19 April 2024

British mobility issues

Anyone who believes there will be a quick move from the UK back towards the EU can think again. If you believe it may happen under a future Labour government, you can think again even harder. There are various possible barriers to the UK becoming meaningfully closer with the EU, let alone rejoining. But the most important one, immigration, remains.

This has become clear based on the response to overtures from the European Commission about a youth mobility agreement. Yesterday, the Commission proposed to EU member states that it would begin negotiating a deal with the UK that would allow 18-30-year-olds from both sides to benefit from reciprocal four-year visas. Both the UK and several EU member states already have agreements like this with other non-European countries.

In the world of immigration, youth mobility is usually as uncontroversial as it gets, at least between developed countries. We have also seen recently that Brexit has not really led to reduced immigration. Instead, EU membership was an excuse for the fact that successive UK governments have been unwilling to make the trade-offs that come with lowering immigration. But the response from both the government and Labour has been very harsh.

The Conservative government said that it would not negotiate with the EU, preferring bilateral deals instead. These are not going to happen anytime soon. Every time the British government has tried, the member states in question have insisted on kicking the matter over to the Commission. Allowing the UK to pick and choose its mobility arrangements would be so bad for your relationship with the EU countries that are left out that it would not be worth any benefits. It would also pose complications for negotiations on other areas, like trade, that are strictly EU competencies.

Labour’s line has been even harder. A spokesperson for the party said that it had no plans for youth mobility to figure as part of a Labour government’s relationship with the EU. One unnamed official from the party told the FT that it was, in their words, synonymous with freedom of movement. Obviously, this is not objectively true. But it shows how determined Labour is to correct, and maybe over-correct, its own mistakes from the run-up to the 2019 election and the second referendum debate.

One thing we will note, however, is that if you wanted to try and avoid having an even bigger re-set of your relationship with the EU, agreeing to youth mobility would be one way to do it. One of the major grievances with Brexit afterwards has been that young people have lost their right to work and study in the EU, denying them something their own parents were able to do. Partially restoring that would be a good tactic for defusing some of the tension.

But not being able to meet this group halfway makes it more likely that they will push for a solution that goes all the way. One thing we noted is that Mark Francois, one of the old-guard Brexiters who gave Theresa May so much trouble when she was prime minister, seemed more open to the idea in principle than Labour did. He may know a thing or two about which side the Brexit project's bread is buttered on.