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November 06, 2019

Could the German coalition fall over the basis minimum pension? Quite possibly.

We have tried to avoid getting too deep into the German debate on the basis minimum pension, an idea pushed by the SPD and rejected by the CDU. Depending on the outcome of the SPD leadership election, this might well turn into a critical issue for the future of the grand coalition. 

But it is the politics within the CDU that is really interesting. As Eckart Lohse und Markus Wehner dissect in FAZ this morning, this debate is tangled up with the succession of Angela Merkel. Next to Annegret Kramp-Karrenbauer there are two politicians who are now positioning themselves for the top job. One is Markus Söder, CSU chairman, who is playing the uncharacteristic role of nice guy. His strategy is for the CDU candidates to self-destruct, and then to be asked to step in. The other is Friedrich Merz, who is planning a big programmatic speech at the CDU party congress on November 22 and 23 in Leipzig. As the authors explain, Merz will not be stupid enough to challenge AKK for the leadership. He wants to win the battle for ideas, and claim the leadership role afterwards.

AKK has clearly spotted the danger, which is why she is not compromising on the minimum pension. The CDU's position is that there can be no minimum pension without a detailed assessment of the claimant's assets, and those of their children. The SPD rejects means-testing because it would massively limit the political appeal of the basic pension. For one of the teams in the SPD leadership race - Saskia Esken and Norbert Walter-Borjans - the basic minimum is the critical issue for the future of the grand coalition. This is why the SPD leadership contest matters more than usual this time.

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November 06, 2019

Philippe to present new immigration policies

Édouard Philippe is to present twenty measures on immigration today. Among the measures are: a quota system for skilled legal migrants in professions where there is a shortage of workers, and to deprive new asylum seekers of access to basic health care for three months. Every year the French government will issue a new list of professions for every region where expertise from abroad is welcome. But there are already voices warning that this is just hot air with few relevant measures.

Jean-Francis Pécresse warns that economic immigration is a measure for the elites, not for the masses, and as such it will not take the wind out from the wings of Le Pen's anti-migration rhetoric. It is one thing to explain why the French economy can only benefit from these economic migrants, as valuable tax payers who help to grow the economy. But immigration is more than just about economic matching. Canada has a similar system in place, and the erosion of social consent to accepting those migrant workers today is palpable. 

Depriving the newly arrived asylum seekers of health care is seen as a gift to the far right but infuriates the left. And, on the controversial issue of what to do with illegal migration and rejected asylum seekers, Emmanuel Macron is treading much more carefully. 

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November 06, 2019

The sharp edge of soft power

Zaki Laidi makes the point that in today's world the distinction between soft and hard power is blurry. This distinction made in international relations describes political influence as soft if it is attracting or co-opting others, and hard when it is coercing others to do what you want them to do. It is the carrot versus the stick. 

The EU always considered itself as the champion of soft power. But in his Project Syndicate column Laïdi notes that today traditional soft power areas are taking on a sharp edge and are being used to coerce others. Trade, legal standards and technology are prime examples. Donald Trump uses trade policy to harm competitors, with significant consequences for the EU. As for legal standards we see national laws being applied extraterritorially for political ends, again not by the EU but by US. Washington regularly uses the dollar to sanction activities that are against its foreign policy interests. European companies are at the receiving end of these sanctions and, unless the euro becomes a relevant international currency, these firms remain vulnerable to US threats. And then there is technology. Huawei's 5G dominance is seen by the US as carrying considerable security risks. The US could decide to support Huawei's European competitors, Ericsson and Nokia, to counterbalance this. But the EU cannot do this due to its competition rules. 

The EU is therefore facing new dynamics in international relations. Will the EU be able to find its role in the game of sharpened soft power? Will the outspoken Josep Borrell or Phil Hogan have any weight in this new world of coercion? The EU's complex decision-making process, its rules and power balance, are not made to use policy instruments to exert power in foreign policy. A lot of energy gets lost in hide-and-seek games. But the EU cannot ignore the new reality either. A wake-up call maybe, but not one that is likely to be acted upon.

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