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5 April 2024

Who will be Slovakia's next president?

In Slovakia, presidential elections often turn into camps that split on pro-Eastern and pro-Western lines. This time is no different. The electorate is split between a pro-West camp that feels threatened by Russia’s aggressions, and a camp that is more attuned to Moscow’s narratives.

The last polls ahead of tomorrow’s second-round election is a tight race between the two candidates: Peter Pellegrini, former parliamentary speaker and prime minister backed by Robert Fico’s coalition, and Ivan Korcok, a former foreign minister and career diplomat who surprisingly came out on top in the first round. The polls show no clear winner, at least not within the margin of error. The last two polls before the 48h moratorium suggest that Pellegrini wins with 51.1% and 51.7% of the vote respectively, while one poll indicates that Korkok could just about make it with 50.1%. But the polls got it wrong in the first round, so they may not have picked up what is going on this time either.

How far either candidate can outperform the other depends on whether they can attract the voters of candidates that dropped out of the first round. It also depends on the mobilising forces of smear campaigns that have been launched against Korcok. When it comes to addressing voters from first round candidates, for Korcok this means addressing the Alliance party with its ethnic Hungarians, and assuring them despite his Orbán-critical stance. For Pellegrini, this means getting votes from supporters of Stefan Harabin, the pro-Russian politician who came third with 11.7% of the votes. A recent poll suggests that 60% of his voters may turn up tomorrow, many of them in favour of Pellegrini. Then there is this smear campaign run by Pellegrini sponsors, portraying Korcok as a candidate who would not act in the interests of Slovakia. This may mobilise Pellegrini voters, but could also counter-mobilise Korcok voters too. This is what happened when Andrej Babis used the false dichotomy of “war vs peace” against Petr Pavel, notes Visegrad Insight.

Both men are not nearly as controversial as candidates in past elections have previously been. But the geopolitical situation today means that the choice between the two directions matter more.

In the end, voters need to decide whether they want a president that is a counterweight to Fico’s government, or a carte blanche. In Slovakia's parliamentary system, the president does not have much power. But the results will matter for whether the government under Fico can continue implement Victor Orban’s playbook. After Fico came back to power last year, he moved fast and cut weapons delivery to Ukraine, dissolved the Special Prosecutor’s Office, revised the penal code and plans to take more control in state media. Pellegrini as president is likely to give him a free hand, and cement Fico’s power to do so. With Korcok, the president would be a counterweight, who could frame and change debates in the country and take legal action as he sees fit to stop Fico’s power grab.

While largely ceremonial, the president has some powers, as demonstrated by the incumbent, Zuzana Caputová. She signed off Fico’s penal code reform despite her disapproval. But then she filed a complaint with the Constitutional Court, which suspended parts of the law to allow the judges to look into this.

3 April 2024

Israel's escalation bet

The IDF’s military attack that killed World Central Kitchen aid workers led to a storm of condemnation worldwide, and prompted aid organisations to pause their work in Gaza at a time when they are needed most. Israel’s targeted strike on Iran’s consulate in Syria is a first open attack against Iran, and could escalate the war to the wider region. No one was expecting Israel to initiate an escalation in this shadow war with Iran where containment is key. It is a message from Israel to Iran to end Tehran’s self-declared immunity, a way of holding them accountable for financing its proxy militias: Hezbollah, Hamas, and the Houthis. It implicates the US more directly in the conflict as well.

Israel’s attack on an annex building of the Iranian consulate in Damascus allegedly killed Hassan Mahdavi, Al Quds Force Commander in Syria and Lebanon, and several of his colleagues. Since 7 October, Iran has officially stayed out of the military confrontation of its militia Hamas and Hezbollah with Israel, signalling at a diplomatic level that it had no interest in an escalation of war into the wider region.

After the attack on one of its premises and killing such a high ranking commander, the regime in Tehran has now has to chose its military response. What are the options? Alon Pinkas puts forward four scenarios in his op-ed for Haaretz. The first is that Iran refrains from reacting immediately, and waits for the right time and target. The second would be that Iran has no choice but to act swiftly by targeting Israel’s ships, embassies or individuals, with the risk of reciprocal deterioration. The third would be escalating the war through Hezbollah, opening up a new front against Israel that is far more lethal than it was so far. The question here is how much leverage Iran has to get Hezbollah to wreak havoc over Lebanon. The fourth scenario would see an angered Iran reacting not only against Israeli targets but US ones too.

The assumption of the US administration has been from the beginning of the war in Gaza that a conflict in the wider region would draw the US in too. To avoid this, the US has been working at the diplomatic level to avoid another war between Israel and Lebanon. In response to the Damascus attack, the US administration immediately sent a message to Iran that it was not properly informed by Israel ahead of the attack, as reported by Axios. How could they not been informed?

While the US and Iran are sending their signals, Israel is raising its price, testing the red lines of both. It is a dangerous moment where escalation can easily happen, and take on a life of its own.

2 April 2024

Erdogan's first defeat

The defeat of Recep Tayyip Erdogan’s Justice and Development party (AKP) in local elections was quite a surprise. No one really expected such a loss after Erdogan won last year’s general elections. But the odds seem to have turned against the AKP this time, and they lost against the Republican People’s Party (CHP). AKP voters either did not show up at the ballot, or voted for an unexpected rival, the Islamist party New Welfare (YRP), according to Al Monitor.

For the first time since 2001 the AKP's overall vote share fell behind the main opposition’s party. In this instance, the CHP won with 37.76%, ahead of 35.5% for the AKP. The CHP also recorded landslide victories in large metropolitan cities such as Ankara and Istanbul, and won 16 provincial municipalities which were formally in AKP hands. The YRP, a party formally in the AKP-led alliance with its own candidates in several cities and municipalities, won two of them, and deprived AKP candidates of a victory in other municipalities, often only by a small margin. It is also perhaps worth noting that the AKP did win most of the districts and town mayorships, so the granular picture is less devastating than the higher echelons of power and headlines suggest. Turnout was around 76%, according to the state-run Anadolu Agency, compared to 87% last year.

The results do not mean much at the national level for now, but they could become a pivotal moment for change.

The first implication is momentum for the CHP party. The local elections confirm to the opposition alliance that it was not the party but their candidate, Kemal Kilicdaroglu, who lost the general elections last year. Two strong alternative candidates were confirmed in these local elections: Mansur Yavas, the mayor of Ankara, and Ekrem Imamoglu, the mayor of Istanbul. Both elections cemented their power. One or the other of them is now in the position to become the candidate to challenge Erdogan in the next presidential elections.

The second dynamic to watch out for is within the AKP-led alliance. This used to be a tight ship under Erdogan. But with the surprising emergence of the YRP, which came third with 6% of the vote, this dynamic is about to change. The YRP benefits from voters who no longer want to vote for the AKP, but are not quite ready yet to back the CHP. Fatih Erbakan, the youthful YRP leader, made Israel’s war in Gaza one of their main campaign themes, slamming the Turkish government for not cutting ties with Israel. Erbakan is the son of Necmettin Erbakan, the first Islamist prime minister, who served from 1997 to 1998.

Will Erdogan change course in response? He promised some courageous self-criticism, and a change in his speech accepting defeat. He insisted, however, that the government will stay on course with its economic programme, though we expect that the pressure on him to reassess this is only about to grow. After being re-elected last year, Erdogan completely reversed his economic course from lowering to hiking interest rates in order to get on top of high inflation. Interest rates rose to 50% and it became more difficult to get loans. Inflation still hit the 70% mark in February this year. For many of those who voted AKP last year in May, the economic situation has worsened. Erdogan promised a better economic outlook, in particular for inflation, in the second half of this year. What will Erdogan do if this does not materialise?

The local election result may also stop Erdogan’s ambitions for a constitutional reform, which many observers expected to have strengthened his powers. Erdogan is known for his agility. He has managed to adapt before to stay in power. While this local election result looks like a proper defeat for the AKP, it may not be the end for Erdogan, who is still the most popular leader in the history of the country. Watch that space.

27 March 2024

Europe's next financial crisis

In our last briefing before the Easter break, we would like to alert our readers to a theme that has been preoccupying us for a while - the possibility of another financial crisis in Europe. We have generally been restrained in our warning of financial crises. The main exception was the global financial crisis and its cousin, the euro area's sovereign debt crisis. Fifteen or so years later, we see another financial crisis ahead here in Europe: a crisis of the European social and political model with deep consequences for fiscal and financial stability.

The canary in the coal0mine is the overshooting budget deficits in France and Italy, at over 7% and over 5% for 2024 respectively. These numbers are a symptom, not a cause. Behind them lies a lack of economic growth needed to sustain Europe's social model. Germany's fiscal policy could not be more different than that of France or Italy, and yet Germany is afflicted by the exact same problem. The collapse of Nicolae Ceaucescu's repressive but debt-free regime in Romania should serve as a lesson that it is not the volume of debt that determines sustainability. It is, in the broadest sense, about a state's ability to provide welfare and contentment whilst remaining solvent. Politics is the art of keeping those three balls in the air permanently. 

The European model was powered by oligopolistic industrial companies, which were heavily supported by the state through regulation that tilted the level-playing field in their favour. The German car industry is a classic example, but everybody did this. The services sector existed mostly to service industry: state-owned banks that give preferential loans to industrial companies; repair shops for industrial products, like car services. These industries enjoyed large profits margins because of the monopolistic or oligopolistic markets in which they operated, together with high barriers of entry. This system powered the entire social policy structure - in the form of fiscal transfers and labour market policies to make sure that the spoils of the model would trickle down in an even manner.

A remarkable feature of that system was its long-termism. The EU, governments, industry and universities organised research that fed this model. 

After the end of the Cold War two further factors sustained the model: a large decline in defence spending, in some case by several percentage points of GDP, and the rise in globalisation.

What is killing this model now is a shift in technology and geopolitical fragmentation. Of the two, we would argue the first is the more important. More and more functions in our lives that were previously the realm of purely mechanical processes are nowadays wholly or partially digitalised. Barriers of entry have collapsed. China went from zero to the world leader in electric cars.

European companies no longer generate sufficient profits to fuel the social model - and to fund long-term research. The heavy bias in Europe's research towards existing companies is taking its toll. It is not about the public versus the private sector. Government intervention played a huge role in the development of the digital industry. Picking winners is still possible, for as long as you pick the winners. In Germany, for example, if research is not done by the car or the big chemical companies, it is not happening. It is no surprise that Europe has only very few tech companies.

In short, Europe's oligopolistic old-tech model no longer works in a digital world. We have been reporting on the attempts by the EU to stem against technological developments through regulation. But this is a way of addressing symptoms, not causes.

After the multiple global shocks of this decade, the consequences of Europe's technological decline translate into lower potential growth rates. Italy came first. Its productivity growth has been near zero since it joined the euro. The UK's productivity growth slumped after the global financial crisis, and never recovered since. Germany's productivity growth is unlikely to recover, even if the economic cycle does. The German Council of Economic Experts see a potential growth of around 0.5% until the end of the decade. With productivity growth that low, Europe's model has become financially unsustainable. It is unsurprising that the political system is fragmenting everywhere. The argument for sustained deficits, in France for example, is that you need them to keep Marine Le Pen out of power. This means they will persist.

We have a fiscal crisis ahead, caused by a combination of falling productivity growth and political gridlock. Technology is the main cause of the decline. Geopolitics is what accelerated it. The solutions we have been advocating over the years - a joint fiscal capacity, a capital markets union, joint defence procurement to neutralise the rise in defence spending - are further away than ever. Unless one of these parameters change, a financial crisis is a very plausible scenario. 

27 March 2024

Farmers vs Nature restoration law?

The EU and its member states have gone to lengths to show that it is pro-active to respond to farmers protests. It decided to soften some of the red tape under the Common Agricultural Policy. And it shelved the Nature restoration law, the flagship bill of the green agenda, after it emerged that more and more member states turned against it.

The Nature restoration law has been in the making for the past two years as a way to make nature part of the solution to achieve climate change goals. The objective is to restore 20% of natural habitat and biodiversity on land and waterways, gradually starting 2030 until 2050 with goals for specific areas such as peat land, forests or coral reefs. The law, in an already watered down version from the original proposal by the European Commission, had been adopted by the European Parliament despite the opposition from the EPP, it was backed by the EU member states and the Commission. Under the Belgian EU presidency, this law was supposed to be rubber stamped by EU ambassadors last week as a mere formality, but it all turned into a political fiasco after eight member states decided to oppose the law and thus deprive the vote the qualified majority it needs to pass. Hungary was critical for passing that threshold. The final count had just 1% between those in favour and those who object or abstain. The vote had to be postponed.

Even if the Belgian EU presidency reassures that it would to work on a compromise it is unlikely to pass before the European elections. Any substantial change means that the legislation has to go back for a second reading to the European parliament, which holds its last session end of April.

The tragedy is that farmers protests are not fundamentally one against nature but to ensure their income. It is the classic dilemma for all common goods, whose benefits are shared but whose costs are carried by only a few. EU member states will have to go back to the drawing board and find a solution that can square the equation in a fairer way.

But there are political hurdles for that to happen. The next European Parliament is expected to shift to the right with a big push expected for eurosceptic groups. It will be even less inclined to talk about the environment than the current one. The past five years have been the high noon for a green agenda movement, every party endorsed its own version of environmental policies. That movement is on its way out. The Green party stands to loose significantly in the elections, while conservative and far-right parties hooked on to farmers as their new voter contingent. A solution is not impossible, but it needs to engage farmers with natural restoration, otherwise this will only be a contest between two sides where none of them has an interest to move.

27 March 2024

Diplomatic tango with Israel

A UN resolution calling for a cease fire in Gaza in return for Hamas’s hostage release finally passed without a US veto. Another act of political drama is unfolding as Benjamin Netanyahu cancelled his visit to the US, while his defence minister was received with open arms, with his list of arms requests in tow. Iran, meanwhile, celebrated the UN vote as a triumph for Hamas, while Israeli security forces warn that Iran plans to supply weapons to Gaza. The more Iran potentially gets implicated in this war, the more pressure there would be on the US to respond on the side of Israel. So far, neither Iran nor the US have signalled any interest in escalating the war.

Expect a lot of hot air ahead of the US elections, where Democrats are increasingly split and uncomfortable over Gaza. Netanyahu can capitalise from this split, and use his swipes against Joe Biden to mobilise Israelis behind him. Perhaps he is betting on Donald Trump to return to power after this November's elections. After all, it was Trump’s peace proposal that granted Israel the right to confiscate an additional 30% of the occupied West Bank, and folded Palestine into a vision of a Greater Israel.

For Biden, the aim had been to get Israel to commit to a two state solution as a long-term goal. With Trump as an opponent on the campaign trail, this question has also a domestic dimension. The US administration has been holding talks behind close doors with Israel and Arab leaders. The question is how hard the White House is prepared to push Israel to accept it, with only seven months left before the elections. Diplomats are keen to avoid the errors of the Oslo agreement, namely letting Israel get away without fully committing to a Palestinian state as a long term goal, and leaving it up to the Israelis and the Palestinians to sort out their differences. How far can a US president, who is in election campaign mode, go to get a recognition of Palestinian statehood? Biden has his reputation and legacy to hold up, but may not be able to do much before the elections. If re-elected, he would be able to put much more pressure on Netanyahu's government.

Biden’s administration has already put forward various proposals to Israel, include recognising a nascent Palestinian state, a Palestinian state with some conditions to be met, or merely affirming an incontestable Palestinian right to a state, according to the Atlantic. What matters at this point is that Israel commits to the principle before they get to the details. So far, Netanyahu’s government won’t have any of this. On the contrary they continue to commission more confiscations of land in the West Bank.

The Europeans are not really players in these negotiations, but they add their tones to the music. The UK, France and Spain have signalled that they are considering unilateral recognition of a Palestinian state.

The two-state solution is key for Israel’s own security. Hamas’s 7 October terrorist attack shook Israel’s sense of security to its core. Israel’s disproportionate response caused the death of more that 32,000 Palestinian civilians dead and famine in Gaza, likely to rise once they enter Rafah. What is necessary is the prospect of a long-term solution that ensures Israelis and Palestinians both have their place, which would take out the fuel for extremism. Political courage is essential to embrace this path.

One of Biden’s objectives in the region before Hamas's attacks was to get Israel and Saudi Arabia to normalise their relations with agreements on nuclear and defence matters. Since the war in Gaza, Riyadh has increased its price, demanding Palestinian statehood as a condition for normalisation. Its government concluded that their security is also not guaranteed unless there is a solution for Palestine. That is probably true for other Arab nations as well.

Israel’s war not only devastated Gaza. It also strengthened Iran’s role in the region. This is why Iran’s regime cautions its militias not to drag the region into a conflict, which the Houthis seem not to have listened to. Iran and Saudi Arabia are the big players amongst Muslim and Arab nations. It is for the West to choose where and how much of their efforts go towards convincing Israel that the two-state solution is in their best interest too.

27 March 2024

Price cap cakeism

One of the many lessons from Clausewitz’s On War that remain relevant to modern times is that warfare is, as much as anything else, a contest of wills. The capabilities anyone can muster matter little if they either do not want to fight, or are not mentally prepared for the consequences of doing so. Pain thresholds are easy to ignore, because they are difficult to quantify. But they matter hugely.

This is something we risk learning, to our detriment, in our own economic struggle against Russia after its invasion of Ukraine. Our sanctions against Russia, both on finance and energy, have been designed to maximise the impact on the Kremlin, but only insofar as the negative short-term consequences do not rebound on us. This is, we think, an approach that has run out of road, especially as Ukraine fatigue on weapons deliveries sets in.

Another example of how this has a real-life impact comes to us from the Dallas Fed. It recently published an interesting working paper on the different effects the two main oil sanctions the west used against Russia had on Russian oil prices. One of these was the embargo which western countries, namely European ones, enforced against Russian oil. The other is the now better-known G7 oil price cap.

What the paper found is that the embargo did have a material effect on oil prices. But inasmuch as the price cap itself had an effect, this was limited to the opportunity cost Russia bore when it has to assemble its so-called shadow fleet of tankers to circumvent the cap. The most obvious example of the cap’s failure is how benchmark prices for Russian oil have frequently exceeded the $60-per-barrel cap limit since the summer of 2023.

Instead, the fluctuations in Russian oil discounts seem to have more to do with global oil prices. When there was a glut, and oil prices were relatively weak in early 2023, it was worse for Russia. As oil prices rose again, Russia’s situation improved.

This is relevant to the wider issue of how far we are prepared to go for Ukraine because of the purpose the oil price cap was supposed to serve. The idea was that, instead of a total ban on tankers carrying Russian oil using western-provided maritime services, like insurance, you’d have the cap. Russia’s oil revenues would be limited, but without disruption to Russian oil supplies, and therefore the global market.

There is always an argument to be made for trying to design a policy optimally, to raise the benefits and limit the costs. But this is just a foreign policy equivalent of having your cake and eating it. It is a sign of what is becoming more evident now. Vladimir Putin’s big advantage over us is how much he is prepared to put his own country, and the world, through for the sake of victory in Ukraine compared to us.

27 March 2024

Trying to make sense of the US Congress

The US Congress is inching towards a Ukraine aid bill, but the obstacles and risks remain formidable. The Atlantic did a good job of trying to disentangle the legislative choices ahead, which are so hard to comprehend for Europeans not versed in the intricacies of US legislative procedures. 

The US Congress is currently on holiday, as is most of the western political world. In the US, this is called recess. Behind the scenes, Mike Johnson, the Republican Speaker of the House, will be negotiating both with Republicans and Democrats to allow him to bring forward the bill. As the Atlantic writes, he has four choices, each with different implications for Ukraine.

The first would be to introduce the bill already approved by the Senate after the recess. Secondly, he could draft his own competing legislative package that would include various contentious Republican demands, again after the recess. Choices three and four are so-called discharge petitions, legislation the House can approve during a recess. Here, too, the same options apply: a Democrat-led version based on the Senate draft, or a Republican-led version. In the US, recess legislation requires a two-thirds majority.

Johnson's problem is that his once slim majority has eroded and that he is facing a leadership challenge from the far-right of his own party. In his public comments, previously he said the only version of a Ukraine bill that could pass would be on discharge. 

He may opt for amendments, for example, a loan-only military aid programme, a problem that could end on the plate of the Europeans who will probably end up as the ultimate guarantors of all Ukrainian debt. 

There is a scenario where Johnson colludes with the Democrats if they protect him from a no-confidence vote. But that would end his political career beyond the current term. There are still also scenarios of gridlock where the only legislation Republicans could approve would carry so many sticks that Democrats would vote against it. The big risk is that Johnson brings forward legislation so contentious that it faces defeat.

Another factor is timing. The advantage of passing an unamended Senate bill is speed. It could move straight to the president for signature. If the House passed a different bill, it would go into what is known as a conference committee, made up of members of both houses. After that it goes back to a vote in both the Senate and the House. This is how legislation dies.

We know that Donald Trump is personally opposed to aid for Ukraine, as are some Republicans. But this is not the main reason why this package is stuck. It is stuck because the issue is not sufficiently important to a sufficient number of legislators to override the domestic issues they care about more. 

Whether or not this package succeeds is ultimately less important than what happens in November. If Trump wins the presidential election, all bets are off. There is some movement in the opinion polls in some critical swing states towards Biden. Just as we should not dismiss Trump - as Europeans habitually did until not to long ago - we should also not take his victory as given. 

27 March 2024

How to think about disruption

When something bad in our world happens, the natural response is often to shift wildly from complacency to panic. Either we all overreact at the beginning, and then calm down a bit later, or we don’t take a problem seriously enough until it is too late. But, in a more disruptive world, the best thing we can try and do is see through things towards the longer-term, and interconnected, implications.

Yesterday’s Baltimore bridge collapse is a case in point. At first, aside from the human tragedy, the economic implications seem scary: Baltimore is a major port on the US east coast. Then, in context, it’s less dramatic when you consider Baltimore is responsible for only about 3% of US shipping on the east coast and Gulf of Mexico.

But the impact of a prolonged port closure would hit specific sectors harder. It is the most important port in the US for car trade, with more than 750,000 passing through it in the past year. It is also not necessarily a one-off, since much of the US’s infrastructure is in a bad state. The bridge collapsing is not the sort of thing that matters on its own. It’s when other things happen at the same time, maybe to the car industry, that it has an impact.

Another example is the impact of Houthi attacks in the Red Sea. The impact of diversions on global container shipping has been absorbed by over-capacity in the market. Maersk, one of the world’s largest shipping firms, gave a downbeat assessment of its profits for 2024 last month. But the root cause was the oversupply issue, even if the Red Sea also has an impact.

Instead, where this should be more concerning is how it fits into a pattern globally. Along with recent Ukrainian attacks on Russian oil refineries, what the Red Sea disruption shows is how easy it has become for someone in the right place at the right time to do this kind of thing. Lower-cost drone technology, plus US foreign policy’s recent indecisiveness and European ineffectuality, have played a role in both. The real concern should be things like this happening more often as US hegemony recedes, and the world becomes a more multipolar, and possibly chaotic, place.

We therefore encourage readers to try and think about the bigger picture when looking at any of these news stories. One will often find that there’s no reason to panic. But there can be one to be concerned.  

26 March 2024

It's the housing, stupid!

Simon Harris, Ireland’s 37 year old education minister, was elected to take over from Leo Varadkar as Fine Gael party leader. He will take over also as prime minister once parliament is back from its Easter break. Harris was the only candidate coming forward in this leadership contest. He now has less than a year to establish himself as leader of a party that is trailing behind Sinn Féin in the polls. If Sinn Fein were to win next year’s elections in March with the 28% predicted in the polls, it would need a coalition partner. Both Fine Gael and Fianna Fail, which are at 20 and 18% in the latest poll, have excluded a deal with Sinn Féin, though Fianna Fail is perhaps less adamant about it.

In his first speech as party leader Harris took several swipes at Sinn Féin and moved the goal posts for the centrist party a smidge further to the right. He inherits a thriving economy with full employment and no budget worries, unlike other European countries. But the lack of affordable housing is the number one hot topic, and one where Sinn Féin scores particularly well. The country also has seen the largest influx of immigration over the past years, which is exacerbating the housing crisis. Anti-immigrant protests started popping up since last year, driven by fringe groups or locals who oppose the housing of asylum seekers in their communities. The lack of access to education, healthcare and mental health services is also linked increasingly to the lack of affordable housing.

It is not clear what Harris can do about this housing crisis in less than a year. But by taking a tougher stance on immigration, he may tap into the anti-immigration mood in the country and attract those falling out with Sinn Fein over its open door policy.

Blaming the housing problem on immigration is a sign of desperation in a country known for its hospitality. Compared with other EU countries, Ireland has no significant far-right political party, but lots of micro parties, including the Irish Freedom party, Ireland First and the Nationalist party. One of the reasons for this exception in Europe lies in Ireland’s history and its armed conflict, the Troubles, from which a strongly nationalist Sinn Féin emerged. Being nationalist on the left made any emergence on the far-right unnecessary. But if immigration is now becoming an issue in Ireland, the mix could become toxic. It already served as the impetus for a bunch of conspiracy theorists to block access to parliament and to organise riots last winter.

Varadkar may indeed have chosen the right time to retire before it gets nasty. We ourselves observed that the coverage in newspapers like the Irish Times has become gloomier over the past years. This is despite a thriving economy and plenty of good things to say about Ireland, as we grew so used to reading. Paul Lynch, an award-winning novelist, imagined a far-right party in power in his book Prophet Song. Is this the end of the Irish exception? We hope not.