Tag Archive: Angela Merkel

Brexit and the Politics of Wishful Thinking

It has been a little while since I last posted something on the AngloDeutsch Blog.

The reason is simple: the UK´s referendum decision in favour of Brexit was not entirely a surprise but it still came as a shock that the majority of my fellow Britons voted to leave the European Union (EU), a club that they had been part and parcel of for over four decades (Britain joined in 1973), even if it has always been a less than wholehearted member.

Since 23 June 2016 I have observed the unfolding UK-EU divorce while trying to come to terms with that it means for Britons, for Europeans and of course for me personally, a Briton who has lived in various parts of the EU and is a resident of Germany.

I remain as shocked as ever but unlike many Remainers who retain dim hopes that Brexit might somehow be averted, that Parliament could override the outcome of the referendum or that a second referendum could be held when the actual terms and conditions of Brexit have been negotiated, I am expecting Brexit to occur. Not only that, but I do strongly believe that having voted for Brexit, it must happen. The referendum was a democratic process, the decision was clear and democracy would be undermined, perhaps fatally, by anything other than Brexit.

Slow-burning Brexit fuse

This is not to say that I think Brexit is a good thing for either the UK or the EU, as I have made clear in my blog. I remain as convinced as ever of the opposite, even if a growing number of people are jumping on the bandwagon to claim that there has been no crisis post-Brexit. This is hardly surprising since Article 50 triggering the process of withdrawal from the EU has not yet been invoked, Brexit has not yet happened and the Bank of England has been very active in pre-empting a possible crisis by launching an aggressive “sledgehammer” stimulus package. The real Brexit impact will be medium- to long-erm in nature; it will have a slow burning fuse but it will eventually be more keenly felt in terms of investment, jobs, real wages and wealth.

The most notable thing about the three months since the referendum is how little progress has actually been made in terms of defining what Brexit actually means. Since there have been no notable decisions made, investors have not had anything substantive, positive or negative, to react to and are keeping a watching brief on what happens. This in itself is a negative, albeit not one that the Brexiteers would acknowledge.

The extent of the current policy position of the new British Prime Minister, Theresa May, boils down to a political soundbite: “… Brexit means Brexit, and we’re going to make a success of it.”

Beyond this, very little is clear about the British Government´s Brexit position in respect to fundamental issues such as:

  • When Article 50 will be triggered to officially start the Brexit negotiations (sometime in 2017);
  • Whether Parliament will have a vote on Brexit;
  • If the aim is to stay in the common market or not (hard vs soft Brexit);
  • When Britain will actually leave the EU;
  • How long it will take to sign new trade agreements with the EU and other countries;
  • What the rights and responsibilities of the EU citizens living and working in the UK;
  • What does Brexit mean for Scotland and Northern Ireland;
  • The same for the Britons living in EU countries, etc.

The only firm policy position is that the UK will not accept one of the EU´s fundamental requirements, namely the freedom of movement of people, and insists upon taking full control of the borders in terms of who is let into the country. These are non-negotiable for the government.

Wishful thinking

Theresa May said in advance of her first cabinet meeting as Prime Minister: “So we will not allow the country to be defined by Brexit; but instead build the education, skills, and social mobility to allow everyone to prosper from the opportunities of leaving the EU.”

However, Brexit will undoubtedly define her government´s work for the current political term. Not only that, it will involve nigh on Herculean efforts to unpick over 4 decades of close legislative, economic, trade, cultural, financial, environmental and other ties. Without a doubt, Brexit will define the next 2-3 UK governments´ policy agenda and thus the country´s destiny. Whatever the Prime Minister may suggest, Britain has already been defined by Brexit, certainly for the other 27 countries, and this will only intensify in period until 2019 when the divorce proceedings are likely to conclude.

The wishful thinking does not stop there.

The Eurosceptic knives are out and being sharpened; the Government already stands accused of not doing enough to bring about Brexit, as if it such a complex and critical issue in terms of Britain´s future economic wellbeing is something that could be decided upon at the drop of a hat. The Brexiteers may have gone into the referendum in a blithe manner in terms of their complete lack of post-referendum plan but at least they are being consistent.

The headlong rush towards Brexit is irresponsible. To be sure, Britain has the right to unilaterally withdraw from the EU at any point of its choosing but there is broad consensus that this would be disastrous for all concerned. The default position is thus the negotiated route to Brexit, despite the unrest among the hard core Brexiteers. However, choosing to enter complex Brexit negotiations without adequate analysis, preparation and forethought in respect to Britain´s long term interests would be the equivalent of tying both Britain´s metaphorical hands behind its back in the forthcoming marathon negotiations with the EU. Just as in the case of unilateral withdrawal, there would only be losers from such a process. The Brexiteers have won the debate, so whatever their ideological desire to head for the exit door host-haste, they will just have to rein their horses in the interests of their country.

There is a school of thought that Mrs May has made a strategic mistake by offering key ministerial positions to leading Brexiteers as Boris Johnson (Foreign Office), David Davis (Brexit Negotiations) and Liam Fox (International Trade). I think it has actually been a strategic masterstroke on her part. The political onus has been neatly shifted to the Three Brexiteers, who must now take responsibility for preparatory work, negotiations and whatever outcome Britain is able to negotiate with the EU. The Brexiteers cannot claim to have been undermined by the Remainers if the critical political posts are all held by the Three Brexiteers.

Row, row your boat…

The advantages of this approach are already becoming evident. Among the chaos and obfuscation (which might be characterised as Project Lies or Project Fear, depending on which side of the fence you sit on) evident during the referendum campaign, there were a few concrete promises made by the Leave Campaign, though the Brexiteers are busily rowing away from them:

  1. GBP 350 million per week will be invested in the NHS: Nigel Farage (UKIP) admitted that it was a mistake to make such a claim and that the NHS would not get the extra funds.
  2. Article 50 to leave EU will be immediately triggered: Liam Fox (Conservatives) has admitted that Britain is nowhere near being prepared to begin negotiating Brexit and that this will take time.
  3. Brexit is a relatively straightforward process that can proceed quickly: David Davis (Conservatives) admitted that the Brexit negotiations may be the most complicated negotiation ever and that they will start sometime in 2017, followed by two years of negotiations.
  4. Introduction of a points based immigration system to take back control of the borders: Boris Johnson (Conservatives) has abandoned the plan for a points based immigration system promised during the election campaign stating that what matters is taking control of the borders.
  5. A favourably UK-EU free trade agreement will be negotiated as the EU has more to lose than the UK: David Davis (Conservatives) admitted that it might not happen and that the UK might exit without a trade agreement, thus having to revert to less favourable WTO tariffs instead.

The above can be interpreted in one way: the loud and clear sound of retreat can be heard and the buglers are none other than the Three Brexiteers.

For her part, Theresa May is keeping her cards close to her chest, holding bilateral preparatory meetings with the French, Germans, EU, etc. and repeating her “Brexit means Brexit” mantra. The three leading Brexiteers are the ones having to do all the running, carry the weight of political expectation and toil under the pressure to come up with a coherent plan for Brexit.

They are not giving the impression having much of a clue about what they are doing, let alone being capable of coordinating the process among themselves in a manner which inspires confidence about an outcome that will be at least as much in Britain´s interest as is the case today. Their fellow Eurosceptics in the Conservative Party are increasingly restless and if the current state of affairs continues, Mrs May might just be tempted in the future to relieve the Three Brexiteers of their duties. If she were then to appoint more capable replacements, whether Brexiteers or not, that might not be such a bad outcome and the Brexiteers would only have themselves to blame.

Choppy waters ahead

It takes two to do the Brexit tango, so how is the EU preparing for it?

Firstly, the rest of the EU insists upon Article 50 being triggered as soon as possible for the simple reason that an indeterminate period of uncertainty can only be negative for Britain and for the other EU countries. Ironically, the EU is pushing much harder for a quick Brexit than the Three Brexiteers and the rest of the government. However, since it cannot do anything about it, the rest of the EU is resigned to the likelihood that the UK will not invoke Article 50 and enter the negotiation phase until sometime in 2017, possibly later 2017 once the French and German General Elections are safely out of the way. Furthermore, the EU is firm about the fact that it will not start Brexit negotiations, formal or informal, until Article 50 is triggered by the UK. The hard core Brexiteers must be as bitterly disappointed about this likely delay as the rest of the EU, but at least they have finally one thing in common.

Secondly, it is not feasible for Britain to remain in the Common Market or join the European Economic Area (assuming the existing EEA members do not veto the UK from joining this club – the early indications are that these relatively small countries might not appreciate the prospect of being joined by what would become the dominant country, resulting in very different political dynamics) unless freedom of movement of people is guaranteed. Since this is a Rubicon that will not be crossed by the Brexiteers and/or the British Government, this option appears to be out of the question. The EU is inflexible on this fundamental issue, as illustrated by its handling of the Swiss referendum and the failed attempt to restrict freedom of movement while remaining in the EEA / common market. The omens are not good and the implication would be “hard” Brexit – leaving the EU and single market altogether without a free trade agreement with the EU.

The EU members are also unusually strong and consistent on other important issues.

Firstly, to make the UK divorce too easy would be to encourage other EU countries to consider leaving the EU club. Put simply, this is the very last thing that the other leading EU countries want. The negotiations will not be a stroll in the park, whatever the Brexiteers may claim. This is wishful thinking on their part and is misleading to it.

Secondly, it is entirely out of the question for the UK to expect to have its Brexit cake and eat it too. In other words, whatever is negotiated with the UK cannot possibly be as good as the current situation as a full and (formerly) leading member of the EU, something that the three Brexiteers continue to imply. Forget that sort of wishful thinking; it simply does not add up. If you join a club, you pay your membership fees, live by the rules and reap the benefits. If you choose to leave the club, you do not pay the fees, do not abide by the rules but do not get the benefits either. Period.

Thirdly, Angela Merkel has made Germany´s view unusually clear by stressing that Brexit is irrevocable (a one way ticket and Britons cannot expect otherwise) and that it is not feasible for the UK to be part of the common market without the EU´s four freedoms, one of which is freedom of movement. She has also stressed that Brexit negotiations cannot be a “cherry picking exercise” of keeping the good economic, trade and finance bits and ditching the rest. For someone renowned for mincing her words, this is as clear a statement as the Three Brexiteers will ever hear; not that they are paying any attention in their delusion.

The British government will also wish to factor in other important considerations in securing a Brexit deal. Whatever it turns out to be good, bad or indifferent, it can be vetoed by any of the remaining 27 countries. Any marginal hopes that Britain might harbour to somehow remain in the Common Market while avoiding the freedom of movement of people can and most probably will be vetoed by Visigrad nations such as Poland.

Loaded dice

There is thus a whole series of pitfalls to be avoided and the reality is that it will be very hard for a deal to be agreed within the maximum prescribed period. The negotiations are loaded in favour of the EU due to the time limit to finalise negotiations once Article 50 is triggered. Two years (unless there is a unanimous agreement by 27 nations to extend the negotiating period) does not sound like ample time to complete “…the most complicated negotiation ever” (David Davis) and do so in Britain´s favour while also securing a qualified majority of the EU leaders and the 27 Parliaments across the EU (as well as the European Parliament – see below).

As if that little lot was not enough to give the Three Brexiteers and their ilk food for thought, the EU has just appointed its team of Brexit negotiators and no one can claim that the intention is to give the UK and easy ride. The European Commission (EC) has put a Frenchman and former EU commissioner, Michel Barnier, in charge. The UK media was pretty clear about the possible implications. The Sun branded him “anti-British” and the Evening Standard called him the “scourge of the City”, with important implications given the significance of the financial sector and the sensitive issue of the UK retaining financial “passporting rights” without which a chunk of the financial sector concentrated in London could shift to Frankfurt, Paris and other EU cities.

Furthermore, the European Parliament has selected the MEP and former Belgian PM Guy Verhofstadt as the lead Brexit negotiator, since any deal agreed by EU Leaders will have to be ratified by the European Parliament, an institution which has often been in the crosshairs of the leading Brexiteers. The media immediately branded Verhofstadt a “diehard European federalist,” the worst possible insult that could ever be levelled by a Brexiteer. Without approval by the majority of the European Parliament, there will not be a Brexit deal. Perhaps Nigel Farage was a little unwise to gloat about Brexit at the European Parliament while still holding on to his seat and salary as a MEP (17 years and counting). Some might have concluded that Brexit was mission accomplished, but obviously not our Nigel.

Dream on

So the Brexit battle lines are being drawn.

It is evident that the EU´s position is a lot clearer than that of the UK, where pretty much everything is still up in the air, other than the intention to control its borders (despite being an island and not being part of the Schengen area) and avoiding freedom of movement of people (despite having almost as many Britons living in other EU countries, benefiting economically from EU migration and receiving the majority of its immigration from non-EU countries such as the Commonwealth).

The UK has yet to come up with the semblance of a cogent Brexit plan (“soft” or “hard” for a start), let alone one which unites the leading Brexiteers (a substantial minority of the Conservative Party) while also satisfying the majority Remainers in the same party. This is going to be tricky in the extreme: the Conservative Party has a slim overall majority of 16 in Parliament and UKIP will continue to breathe down the Conservatives´ political neck (the Labour Party is even worth mentioning, given its ongoing chaos and disarray).

Britain will need uncommon diplomatic and negotiating skills (eh hem! – yes, I am thinking of our Foreign Secretary), as well as a hefty dose of luck in navigating through the choppy waters coming up in 2017 and still coming out of with a Brexit deal, let alone a favourable one, whatever the Three Brexiteers and the British government may claim.

The likelihood of actually securing a deal that is at least as favourable as the status quo is nigh on impossible (though the EU is first and foremost a political construct and since politics trumps everything else, the possibility cannot be completely excluded). The prospect of the UK having its Brexit cake and eating it at the same time appears to be a load of wishful thinking and delusion. Everyone but the Brexiteers can clearly see the writing on the EU wall… in capital letters, underlined and bold.

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


The refugee backlash – pulling-up the European drawbridge

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU

2015 was another tumultuous year for Europe. Over a million refugees found their way into the European Union (EU), but already a new dynamic is evident in early 2016: the refugee backlash has begun and Europe is pulling-up the drawbridge on refugees and economic migrants. The broad contours of the dynamic evident can be summarised as follows:

  • The EU countries have accepted too many and cannot continue to absorb refugees at the same rate;
  • Germany was irresponsible in allowing so many refugees;
  • Without proper checks, the refugee will include a radical element that will pose a threat to the EU´s security, as illustrated by the terrifying Paris bombings in November 2015;
  • Once in Germany, or wherever, they will spread to other parts of the EU, so the freedom of movement of people principle may need to be looked at again;
  • Further sexual assaults on women and robberies by young men from “the African or North African region” are to be expected following the shameful New Year’s Eve experiences in Cologne, Hamburg and other cities;
  • The current levels of migration will destroy Europe as we know it; the borders must close, only legitimate applications up to a predetermined cap can be accepted and the rest sent back.

This all seems logical and it plays well as a populist theme. This certainly applies to parties such as the Alternative für Deutschland (AfD) in Germany and the UK Independence Party (UKIP), but it also goes down equally well with the mainstream political parties such as the Conservative Party in the UK and the CDU and especially CSU in Germany. This is without even mentioning the more radical right wing movements that exist throughout Europe. Not surprisingly, shrill criticism of the migration issue and the EU’s apparent inability to manage the situation is particularly evident in the UK, as it gears up for the forthcoming referendum (the exact date of which has not yet been announced) on whether to remain in the EU or not.

It is very difficult to unpack and analyse what is clearly a highly emotive theme, let alone have a sensible debate about it, which is the very reason why certain political parties are making hay with the refugee issue. Previously, their favourite theme was the Eurozone/Greece crisis, now it is migration but the overall gloom and doom narrative does not change very much.

I should stress that there are clearly legitimate public concerns throughout Europe about the migration issue, both within the EU and from outside. However, the use of scare tactics to gain political or other advantage is not something I enjoy witnessing so I aim to address a sub-set of issues, such as Germany’s alleged irresponsible behaviour, the argument that Europe simply cannot cope and the refugee backlash that is in full swing before the first month of 2016 is finished.

The blame game

I will start with Germany’s role in the European refugee crisis. There is certainly a messy situation, but did Germany act irresponsibly in 2015?

Any way you choose to cut it, Germany has played the key role in the refugee crisis. Germany accepted 1.1 million refugees in 2015, a number than could rise further on by the time the counting is official. Germany had in any case been experiencing significant flows of migrants, mainly from the EU. For the last few years this has been running at over 400,000 net migrants per year. Add this up and Germany received at least 1.5 million net migrants last year, which is an astonishing figure. Furthermore, under the German asylum law, refugees may be allowed to bring their family members, resulting in a significant and unquantifiable flow connected with 2015.

By any reasonable criteria Germany has been an incredibly good country to accept so many people. This is not just about the cost involved, which is undoubtedly significant albeit one which Germany is in a position to absorb. Being a good country is first and foremost about the willingness to recognise the human suffering cause by the migration crisis and to try to do something about it, rather than turning a blind eye to it all.

The contrast with many other EU countries could not be greater. Countries such as the UK have agreed to accept 5,000 Syrian refugees per year for the next five years. It has to be borne in mind that even this paltry number was only agreed to following a public outcry from British citizens appalled by their government’s hard heartedness, which bounced Parliament into agreeing to do more.

Germany is not alone in being a good country: about 90% of the refugees have been accepted by three countries out of 28 in the EU: Germany, Sweden and Austria. What about the response of the other 25 countries of the EU?  Following months of unedifying political squabbling, which continues to this day, the best they could come-up with was to agree to relocate 160,000 asylum seekers from Greece and Italy over the next two years: this is an average of 5,700 per country over two years, though very few of these transfers have actually occurred so far (less than 500 were achieved in 2015 and only 3 out of 10 “hot spots” have opened according to some estimates).

Is “pitiful” too strong a word to summarise the EU’s collective failure in the face of a mass humanitarian crisis? I don’t think so. It is not the first time that the EU has failed miserably to stand up to be counted and it will almost certainly not be the last. It is not as if the refugee crisis was some sudden, unexpected act of god; this is the result of steadily growing pressure and reaching its natural and inevitable conclusion. There was nothing about it that could not have been predicted by the civil servants of the European Commission or of the EU member states.

Germany’s decision to act more or less unilaterally in accepting 1.1 million refugees must be seen in the following context:

  1. This is the worst crisis since WW2: the number of forcibly displaced people, often due to wars, reached almost 60 million worldwide at the end of 2014, including over 14 million refugees. This was an increase of about 25% compared to the previous year and is mostly due civil war, violence and oppression in Syria, Eritrea, Afghanistan, Somalia, Iraq, etc. although other regions, including northern Africa and the Balkans, are also major sources of migrants (IMF, 2016 / The Refugee Surge in Europe: Economic Challenges). This is nothing short of a mass human tragedy, which Europe is neither immune to nor can afford to simply turn its back on. Globalisation entails many new developments, including the capacity of large numbers of people to move in the direction of Europe. It may take time, but sooner or later, it does reach Europe.
  2. This was not a crisis of Germany’s making: it did not chose to invade Iraq in 2003 and played little or no part in setting in chain a series of events which have destabilised parts of the Middle East, in an attempt to bring about democracy through regime change. Of all the European nations it is the UK, France and Italy (together with the USA) that bear the greatest responsibility for any resulting instability in the region. All are now conspicuous for their efforts to obfuscate causality and deny moral or other responsibility (if you break something, you should fix it) to deal with the resulting mess that they helped to set in chain.
  3. The EU failed spectacularly: the utter inability of the EU to find common ground in dealing with the huge volume of people heading towards Europe is what resulted in Germany’s more or less unilateral action. Just as in the Greek/Eurozone crises, it is proving extremely difficult for 28 countries to make decisions quickly and act in unison. This should not be in the least bit surprising. The EU is very far from being a United States of Europe; this simply reflects the fact that the nation-state is alive and well within the EU, despite exaggerated claims of its demise. Each nation retains the ability to follow its own mandate and block changes that it does not agree with. The Central European (Visegrad countries) and Western Balkans states have made their views crystal clear in respect to taking a share of the refugees, but they are not alone. Just as in the case of Greece and the Eurozone, finding a common solution to an unexpected large-scale problem is a slow, messy and costly process. In the end, to misquote slightly the famous words: Europeans Will Always Do the Right Thing — After Exhausting All the Alternatives. The 28 nation states plus the various Candidate Countries (i.e. Western Balkans including Turkey) will find an imperfect compromise and Germany will pay a disproportionate amount of the cost arising. Such is the iron rule of the EU. No other scenario is possible if 28+ nations are to continue to play broadly for the same team. How many other international agreements are you aware of that take a couple of weeks or months to resolve? Climate change agreements? International trade agreements? These things take years or decades, not weeks or months to sort out and are always and everywhere an uneasy compromise. 28+ countries finding a way to deal with the worst humanitarian crisis in 70 years takes time but in 2015, time was of the essence where people are involved, rather than just economics.

Cometh the hour, cometh the country: Germany chose not to sit on its hands but to act in alleviating the growing pressure along the Turkish-Greek-Balkan-Central European corridor.

Refugees in Miratovac, close to the border between Serbia and Macedonia. Photo by Djordje Savic / EPA

Refugees in Miratovac, close to the border between Serbia and Macedonia. Photo by Djordje Savic / EPA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

You are free to form your own opinion about whether Germany has acted irresponsibly or not. I personally think that not only has Germany acted incredibly responsibly, but as tax payer and resident of the country, I am proud of living in such a country. No doubt, Germany has already changed as a result and ordinary Germans are deeply unsettled about the implications, an issue which I plan to write about in the future. This is a reflection, among other issues of the fact that the scale of the problem is so great that no country can possibly solve it all on its own – not even Germany.

Europe Cannot Cope! Really?

The next issue is whether Germany and/or Europe have relevant experience and if they can absorb the numbers of refugees.

For a start, I can distinctly remember (since I was part of it) a small, poor, broken European country of 8.5 million absorbing about 1 million people from its former colonies during the mid- to late-1970s. While there are major differences with the current situation (common language, culture, religion, etc.), Portugal was not part of the EU but absorbed those numbers and did not collapse despite its politically chaotic and economically precarious post-colonial situation at the time. In fact, it thrived as a result of the influx. Don’t get me wrong: I am not suggesting that Europe should fling open its doors to all and sundry with no questions asked, but I am saying that Europe is much more robust than many would seem to believe.

After a short-lived spike of international approval for its decision to take on the refugees, Germany has since reaped criticism, direct and indirect, most of which has been leveled at Angela Merkel, the Germany Chancellor. The gist of the argument is that she has gambled Germany’s long term interests for personal hubris: she wanted to cap her career with a Nobel Peace Prize and/or improve Germany’s international image after the Greek crisis. Others of a more analytical bent sought instead to justify Germany’s actions (and presumably the inaction of their own governments) by pointing to Germany’s ageing population structure. It seems to me that almost all 28 EU countries are suffering from the same problem, albeit to varying degrees. Did others facing the same demographic situation jump to take their share of refugees? I don’t think so.

It is certainly true that Germany and many EU countries have a rapidly ageing population structure (fertility of around 1.5, which is below the replacement rate of 2.1) that would greatly benefit from significant immigration of the scale that happened during 2015. But I take issue with the implication that the German authorities naively failed to foresee the likely stresses and strains that would be generated by taking so many refugees in one year (the estimate at the time was 800,000 – 1 million refugees). The reality is that Europe generally and Germany specifically have plenty of experience of large scale refugee crises and indeed of Muslims culture.

Firstly, Germany has a large number of Muslims. According to the 2011 Population Census, there are just under 6.2 million foreigners in Germany and Turks alone accounted for the largest group (1.5 million people or 24.4%). In all, some 2.5 million people are of Turkish origin. It is not as though Germany is not aware of the stresses and strains associated with the religion, gender, education, labour market and other dimensions connected with integrating populations, including Muslims. The same applies to many countries of the EU but unlike others, it still went ahead with what is often described by its critics as its “open door” policy.

Secondly, it was not so long ago that Germany had to respond to a refugee crisis of similar proportion. During the 1990s, a large number of asylum applications were lodged due to crisis in the ex-Yugoslavia, though the peak of that crisis in 1991 (around 700,000) has been exceeded in 2015 (see first Figure below). That said the second Figure below illustrates the point that the numbers were relatively low compared to those of the 1990s, though the diagram does not take the 2015 influx of over a million refugees into consideration. It is probably not a coincidence that then, as now, Germany absorbed the lion’s share of refugees.


IMF graphic 2016

Source: IMF, 2016, p.11

Thirdly, to put things in context, Europe had only absorbed 1 out of the 14 million refuges worldwide in 2014 and this increased to 2 million in 2015. Whoever believes that what has happened in 2015 is the end of the matter and that the EU can simply put-up the fences, close the borders and turn its back on the rest of the world is deluded. A proportion of the 12 million other displaced people are heading our way in 2016 and beyond: the current estimate is that another 1 million will aim for the EU this year and possibly more. The way to end this catastrophe is not by pulling-up the drawbridge to Fortress Europe; if the conflicts in the countries in question are ended and if this is combined with a major reconstruction programme, in time, the human tragedy and the migratory process will also abate. Putting-up fences and closing borders will restrict some of the flow, but will also add to the human desperation without actually dealing with the root cause.

To conclude, in my view Germany did not saunter into the current situation blithely and Mrs Merkel was right in saying “Wir schaffen das.” We can do it: I agree with her. Other, much smaller and poorer countries have in the part or are currently absorbing the same or higher numbers of refugees. Germany knew, more or less, the implications of opening its borders to about a million refugees, even if the general public could not have predicted the exact consequences, including the outrages in Cologne and other cities. It is most unlikely that Europe’s pre-eminent politician would not have sniffed the potential political, social, religious and cultural implications of undertaking such a radical step. The numbers absorbed by Europe are relatively small by comparison with the numbers being absorbed by other countries, including Turkey. If they can do it, so can Europe. Indeed, a cursory reading of European history proves that it has coped with wave after wave of migration.

Refugee backlash

To ask if the refugee backlash is coming would be to pose the wrong question: it is already here.

The mood in Germany and the rest of Europe started turning ugly long before the Paris terrorist attacks and the mass sexual and other crimes in Cologne and other German cities during the New Year’s Eve celebrations that went wrong. Pensioners are up in arms about the way they perceive their country is changing. Parents are concerned about their children’s education as gymnasia are requisitioned as temporary accommodation and class rooms begin to take the strain of absorbing the influx of non-German speakers. House prices and rent levels are being pushed up in an overheating housing market where affordable accommodation is scarce.  Region and local authorities remain deeply concerned about practical matters in addition to shelter, such as state benefits and labour market opportunities for refugees. The issue of integration and whether it is possible to achieve or not, is “the” topic of conversation. This applies to Germany and it applies equally to other EU countries.

Angela Merkel has gone from being Europe’s pre-eminent politician and practically politically unassailable in Germany, to being under siege. Make no mistake about it; she is fighting for her political future.  Yet despite the ratcheting of pressure, even today, she is refusing to put a cap of the number of refugees that will be accepted by Germany in future (the CSU is openly advocating a cap of 200,000 per annum, which itself puts the UK’s response in the shade). There are probably two reasons for this. Firstly, German asylum law is based on individual assessments so caps would not be workable without changing the law (but we know laws can be changed at the drop of a political hat). Secondly, the huge numbers of forcibly displaced people out there (14 million and counting) are desperate and there is no end to their travails in prospect. What would you do in their shoes? Which safe harbour would you try to reach, possibly at the cost of perishing on the way? A cap would be a meaningless promise without a workable EU arrangement.

Mrs Merkel is displaying the hallmark of true leadership: political courage and acknowledging moral duties beyond her nation’s borders. That is the essence of being responsible in a European and global sense, though I recognise fully that many would much rather put national and personal interest before anything else, including in Germany.

Merkel probably expected the rest of Europe, especially the largest countries, most of which have had more than a hand in the unfolding disaster in the Middle East, to take a much greater share of the humanitarian burden. Despite the lessons of Greece, she has miscalculated in relation to most of the EU and is now in the middle of the biggest political crisis that she has ever faced. She also appears to have greatly overestimated the Greek and Turkish capacity to manage their borders.

But she is nothing if not a pragmatic leader. She has recognised that the whirlwind is not just gathering, it is already blowing. A change has already been signaled that 2016 will not be the same as 2015. The scale of the challenge means that Germany cannot shoulder the burden mostly on its own for much longer. All three of the most generous countries have introduced border visa checks (three others have also and many more are threatening to do the same). A closure of national borders has so far been resisted by the EU, but this could change. Sweden has announced that 80,000 of the 160,000 refugees it accepted will be sent back because they are economic migrants, not refugees. The EU has reinforced the message by stating that 60% of the applicants are not refugees at all but economic migrants mainly from the Balkans and North African countries such as Morocco and Tunisia. It has also threatened to suspend Greece from Schengen for systematic failures in the migrant crisis. In turn Greece is pointing its finger at Turkey for allowing migrants to “swamp” their border and islands.  Reports are piling up that in addition to anti-refugee demonstrations and hostels being set on fire in Germany, violence is erupting in Sweden and other countries.

A common EU approach is the only way forward, combined with a serious and concerted effort to end the conflicts and reconstruct economies, since these are the drivers of mass population displacement. But just like the Greek and Eurozone crises, which are also far from over, it will not happen miraculously or overnight.

So, get ready for a much more hard-nosed European approach to the refugee crisis, with an emphasis on only accepting people from conflict zones (true refugees and asylum seekers) and rejecting all others (i.e. economic migrants). The EU drawbridge is being pulled-up. The wider societal backlash is already underway and those that are leading it will not be pausing to distinguish those that deserve to be helped from those that do not.


Elitism in Britain and Germany

© Ricardo Pinto, 2015, AngloDeutsch™ Blog, www.AngloDeutsch.EU

There has been a lot of discussion about elitism, the Establishment, the 1%, etc., partly driven by the seminal work on wealth and income inequality by the French economist Thomas Piketty (see Capital in the Twenty-First Century). This has been exacerbated recently by the on-going discussion about David Cameron and his Oxford days, including allegations about some of the initiation rituals involved (see #piggate). This post examines elitism in Britain and Germany by analysing the people who make-up the Cabinets in both governments, as a means of establishing the extent to which they form part of elite or not.

First it is important to be clear what we are referring to when we talk about the elite or the Establishment, as illustrated in the box below.

Elite

1. The choice or best of anything considered collectively, as of a group or class of persons.

2. Persons of the highest class: only the elite were there.

3. A group of persons exercising the major share of authority or influence within a larger group: the power elite of a major political party.

4. Representing the most choice or select; best: an elite group of authors.

(the) Establishment

1. The existing power structure in society; the dominant groups in society and their customs or institutions; institutional authority (usually preceded by the): the Establishment believes exploring outer space is worth any tax money spent.

2. The dominant group in a field of endeavour, organisation, etc.: the literary Establishment.

Source: Dictionary.com

 

The elite is thus a small group of people who control a disproportionate amount of wealth and/or power. It is not easy to ascertain people´s wealth but there are surrogates that can be used for privilege and power. The Prime Minister and the rest of the Cabinet are generally considered to be the single most powerful group of people in any nation. Therefore, in assessing the elites and the Establishment, it makes sense to begin with this particular group of people.

In assessing the issue of whether the people concerned are part of the elite / the Establishment / the 1%, I look at two indicators for which information is relatively objective and easily available:

  • Whether they were privately/independently educated in the form of a fee paying school education or not: Britain has a well-established tradition of independent, fee paying schools. Germany too has such schools though their origins and emphasis are different. In both countries the state school system is free but some choose to educate their children privately. Since these involve significant costs compared with state schools, it is generally the privileged that tend to attend such schools. In the case of the UK, 7% of the students go to such schools compared with 6% in Germany;
  • Whether they attended the elite (two top) universities in their respective country or not: in the case of Britain, this would be Oxford University and Cambridge University, often conflated as “Oxbridge.” In the case of Germany, only a couple of universities make it into the top 50 universities in the world, namely Heidelberg’s Ruprecht-Karls-University and Munich’s Ludwig-Maximilians-University. The barriers to attending the elite universities are normally much higher than the rest but the rewards associated with graduating from the top two universities are also disproportionate (the subject of the next post).

It goes without saying that those lucky enough to have both attended a private school and graduated from the top two universities of their respective country are bound to be rewarded with disproportionately higher life-chances compared with their fellow citizen without the benefit of such privileges.

In this post, I explore the issue using official information provided by the respective governments, supplemented with research on cabinet members who are coy about their educational background. The results of the analysis for Britain and Germany are presented in the Table below.

Table 1. Educational Background of the Cabinet in the UK and Germany (2015)

Cabinet_table

Note: the private/independent schools are as easy to identify in Germany as in Britain. Furthermore, it is not always possible to match-up government ministries / departments in the two countries. Sources: www.gov.ukwww.bundesregierung.eu and Wikipedia

So what does the above table tell us about the UK and Germany, based on the educational background of their respective cabinets?

  • Independent school: 9/21 UK vs 1/16 Germany: 42.8% of the UK cabinet attended independent schools compared with only 6.2% in Germany. There is an incredibly high level of concentration in the UK, given that only 7% of the adult population attends independent schools. The German cabinet simply reflects the national trend of 6% of pupils attending such schools;
  • Top 2 universities: 13/21 UK vs 1/16 Germany: an even greater proportion (61.9%) of the UK cabinet attended Britain´s top two universities. To put this in context, only 1% of the adult population of Britain attended Oxbridge. This also contrasts with only 6.2% of the cabinet in Germany attending its top two universities. An astounding 38% of the British cabinet attended Oxford alone. If you think this is something new or specific to the Conservative party, you’d be wrong; it is merely a matter of degree. Ed Miliband, Gordon Brown and Tony Blair are all Oxbridge educated, as were 12 of Ed Miliband’s shadow cabinet. Jeremy Corbyn, the new leader of the Labour party, was educated in an independent school but did not complete his higher education;
  • Independent school and top 2 universities: 9/21 UK : 0/16 Germany: whereas none of the German cabinet were privately educated and went to the country’s top two universities, a staggering 42.8% of their British counterparts did, David Cameron and George Osborne included, thus being doubly privileged.

Based on the indicators of private / independent education and/or attending Oxbridge, as well as being a member of the Cabinet, the elite or the Establishment is very much alive and in rude health in Britain. Independently educated pupils, especially those from the elite schools, disproportionately go to Oxbridge (taking 44% of the places at Oxford and 38% at Cambridge) and end-up in the Cabinet. Coincidence is not the main factor at play; layer upon layer of privilege and entitlement piled upon each other is closer to the truth.

By contrast, the German cabinet is positively plebeian. I shall leave it to the reader to determine which they prefer and why.

The recent and totally unexpected election of Jeremy Corbyn as the Leader of the Labour Party (who has not exactly grown-up in the proverbial social housing estate or attended an inner city state school) appears to be partly a reaction to the “more of the same” politics by the ruling elites. No such trend is evident in Germany.


#ThisIsaCoup´s Germany Bashing is “Over the Top”

Quite a few people have taken to twitter under hashtag #ThisIsACoup to air their view that Greece has been bullied and coerced into an unjust and undemocratic agreement by the other Eurozone members, with the finger being pointing directly at Germany.

#ThisIsNOTaCoup

At least part of the reason for the popularity of hashtag #ThisIsACoup is that prominent commentators such as Paul Krugman, the Nobel-winning economist, have helped to legitimise it and propel the hashtag #ThisIsACoup to the global audience. Krugman wrote in his New York Times blog“The trending hashtag #ThisIsACoup is exactly right.” This was part of his campaign to encourage Greece to exit the Euro.

 I have shown that hashtag #ThisIsACoup is exactly wrong and on two counts. Firstly, “this is a coup” literally implies a great compliment to the Eurozone countries (a coup), which Krugman and the rest presumably did not mean. What they actually meant is hashtag #ThisIsACoupD’état. But here too they have got it completely wrong because the bailout agreement on offer has none of the defining characteristics of a coup d’état either.

I am not arguing that the Euro summit agreement is all fine and well. It most certainly is not and makes unrealistic demands of Greece given the almost non-existing willingness or capacity to reform. I am simply saying that referring to it as a coup d’état (or indeed comparing the agreement terms to the Versailles Treaty, which some commentators have taken to doing) is emotional claptrap directed at one country rather than the 19 that signed the agreement, Greece included.

 #ButItCertainlyISGermanyBashing

In this post I would like address the content being posted on hashtag #ThisIsACoup. This particular bandwagon is not only ill-informed but it is deteriorating into a full-on Germany bashing movement.

Have a look at a selection of photos on offer to get the general gist of what is going on.

Germany Bashing 1

This is a sub-set of the kinds of images being posted. Some of them are funny but the vast majority are simply misleading or spiteful. The tweets are laced with references to Nazism, Fourth Reich and other stuffpointing towards Germany´s true intentions, namely of subjugating Europe through the back door.

Which planet have these people been living on since 1945?

Germans are entitled to feel offended by what is going on. Make no mistake: this is not restricted to the Twittersphere. A reading of comments posted in many national newspaper articles relating to the Eurozone crisis reveals a rising level of enmity towards Germany and its supposedly true intentions towards Europe via the mechanism of the Euro.

As a Briton living and working in Germany, with a German family, friends, family and colleagues, I find this sort of thing, often under the guise of “humour”, unacceptable.

This is unfair. It is wrong. This is  Germany bashing.

If it has not yet been understood those in question, please reflect on the unequivocal fact that that vast majority of Germans would never have opted for the Euro if they had been given a choice and would gladly return to their beloved Deutschmark tomorrow if they could. The Greek tragicomedy is only adding fuel to this particular fire. But I guess whatever I say will never not cut much ice with some people.

Debt relief has already happened and will continue to happen

Now, having got that off my chest, I would like to turn to the rest of Paul Krugman´s quotation, since it appears to legitimise much of what is going on in hashtag #ThisIsACoup namely: “This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.”

I would like to start with the end bit: no hope of relief. It must be noted that Krugman wrote this before the finalisation of the bailout negotiations, so he was not aware of the fact that, for the first time publicly, “hope of relief” has been finessed into the agreement (“… including financing needs, debt sustainability and possible bridge financing.”). We all know there is no such thing as money for nothing; and so do the Greeks. Incidentally, Krugman also fails to acknowledge that there has already been very significant debt reduction in the first two bailouts for Greece. There will almost certainly be further debt reductions in the third bailout.

As for the final part of the quotation, “This goes beyond harsh into pure vindictiveness,” I suggest that the Nobel laureate actually looks are the terms of the bailout to justify his view. I do not see it, thought I do agree that many of the things in the Euro summit agreement will never be realised, just as they were barely realised in the first two bailouts and/or were reversed once Syriza assumed power.

Germany Bashing 2National sovereignty is a 19-way street

The “complete destruction of national sovereignty” part is a red herring. In a representative democracy, the Greeks elect their government and their government makes decisions in relation to spending, taxation, etc. Parliament does not have to agree to anything it does not wish to do. In the meantime, the Greek Parliament has voted to accept the draft agreement. Two general elections and multiple Parliamentary votes later, the Greek government continues to ratify bailout conditionality. The debate about national sovereignty cannot be about Greece and Greece only. In the Eurozone there are another 18 nations whose taxes are increased and/or expenditure is potentially curtailed as a result of bailout after bailout to help Greece get its own house in order. There is a duty and responsibility towards the sovereignty of 19 nations, not only one.

If a country runs out of money through its own actions and inactions and needs to get it from another 18 countries with no end in sight, then then that country can expect reforms. But remember, these are the things which everyone agrees (including the Greeks themselves) it has systematically avoided doing for decades. Ask other states that have gone broke (but do not have the benefit of a Eurozone sugar daddy) whether they have had to implement painful reforms or not and for how long they have had to do it for in order to get back to normalcy.

Greece is under tremendous pressure to accept the bailout and some of the conditionality is questionable, such as connected with the privatisation fund. This reflects the lack of progress made in the other two bailouts as well as the breakdown in trust as a result of the negotiation tactics deployed in the last six months, rather than pure vindictiveness. At the end of the day, Tsipras and the Greek government must decide what, on balance makes most sense for their country. If the conditionality is vindictive and humiliating, there is an obvious option for them. If the future is truly brighter outside the Euro then it is the duty and responsibility of the Greek Parliament to go in the direction advocated by Krugman and others. But this is something which they have steadfastly refused to do so far to many economists´ dismay and disbelief.

As an aside, Paul Krugman is reported to have said that in pushing for a Greek exit he may have “overestimated the competence of the Greek government” and that it didn’t even occur to him that Greece would make a stand against the rest of the Eurozone countries without having made a plan for an exit from the euro if things went wrong. Perhaps he will also come to agree that the latest bailout agreement may be better than the alternative after all.

He who pays the piper calls the tune

At the end of the day, the country which makes by far the biggest contribution to the bailouts and thus potentially incurs by far the greatest loss associated with the Greek bailouts is entitled to not just a vote but to a significant say in the matter. Failure to do so would be irresponsible in relation to its own tax payers and a failure in democracy vis-a-vis its own electorate.

Every country must look after its own national interests. Consider Britain steadfastly refusing to contribute a penny to the Euro bailouts but offering to show solidarity towards Greece in the form of “humanitarian and medical aid,” should the country choose to exit the Euro and default. Britain is doing what it considers acceptable to its own electorate, as are all 19 Eurozone countries. What about Greece? Its approach is the epitome of following its own national interests. Why not Germany?

Get real: Greece´s sovereignty is not the only one in question; 19 countries are affected by the crisis. As the biggest contributor, Germany is entitled to a significant voice in the decision making-process (just as Italy, France, etc. and the Troika/Institutions are – but Britain is not). Some may not like it, but that is the reality.

Grow up: WWII ended 70 years ago; there comes a point when it is just plain silly to keep rolling out the tired old war clichés.

Stop the “over the top” (pun intended) Germany bashing.

 


The Queen of the Referendum: Elizabeth II in Germany

© Ricardo Pinto, 2015, AngloDeutsch™ Blog, www.AngloDeutsch.EU

Queen Elizabeth II has just completed a four-day state visit to Germany, included a visit to the Bergen-Belsen prisoner of war and concentration camps (where Anne Frank wrote her famous diary and died shortly before liberation), met the President Joachim Gauk and the Chancellor Angela Merkel, and visited Berlin and Frankfurt. The German people went bananas about the state visit – it was almost as if Germany had become the 54th member of the Commonwealth!

The Royal Family is very popular among ordinary Germans despite the recent history of two World Wars. Royal marriages, divorces and births are followed closely and there is an obvious affection for the Queen. The pomp and ceremony, including the flag waving, are just not part of the culture in modern Germany, though it is noticeable that they have become a lot more at ease about waving the German flag since the football World Cup was staged in Germany in 2006. Partly because the Germans are much more buttoned-up about the whole concept of patriotism, the Royal visit was an occasion to dress up, go mad and just enjoy the state visit. English flags were still a lot more visible than German ones.

Queen Elizabeth in Germany 2015

Picture: John MacDougall/Pool Photo via Associated Press

Of course, there are strong connections between the British Royal Family and Germany, going back quite some time. But even in terms of the present, few realise that Prince Philip is a member of the House of Schleswig-Holstein-Sonderburg-Glücksburg and that he was partly educated in Germany. But at the end of the day what matters is quite simply that Germans admire the Queen’s charm and sheer will-power; it is a rare sight for an 89 going 90 year-old to perform her role so competently. A rapidly ageing nation such as Germany certainly knows how to appreciate this.

The royal couple’s first visit to Germany was actually back in 1965. It was an important state occasion, involving a marathon 11 cities and it is a generally acknowledged that it helped heal the wounds of World War II. As in the case of the first visit, the fifth and quite possibly last one, also drew large, enthusiastic crowds and generated significant media coverage.

Rex

Rex

Picture: Rex

Neither Mr David Cameron nor Mrs Angela Merkel would have had one-tenth of the pulling power of the Queen, let alone one-hundredth of her influence in terms of building positive international relations between the people of Germany and the UK citizens. And, let us face it, after the on-going centrifugal forces generated by a possible Grexit, not to mention a possible Brexit, as well as the austerity drive which, rightly or wrongly, is associated with the EU and Germany, Europe can certainly do with a lot more of this sort of thing – it is a precious glue binding two nations together.

However, what has been the most significant aspect of the official state visit is actually the speech she gave, which is not normally reported (other than the Opening of Parliament Speech). The Queen’s speech was widely discussed and reported in the British media. What she said was:

“The United Kingdom has always been closely involved in its continent… Even when our main focus was elsewhere in the world, our people played a key part in Europe.”

Blink and you would have missed what all the fuss is about, not least because the crucial word uttered only contained three letters, namely the reference to the UK and “its” continent. The Queen could easily have chosen the word which would normally have been used in the sentence, namely “the” rather than “its”, but for whatever reason chose to do otherwise.

It is very easy, indeed dangerous, to over- or mis-interpret the supposed meaning of a single word. Nevertheless, given the febrile discussions in the UK about the forthcoming referendum on whether to remain or exit the EU, the Queen’s speech is being widely regarded as an indication that the Queen favours continuing UK membership of the EU.

But the greater controversy concerned the speech delivered in Berlin on Wednesday, where she warned of the “dangers” of division in Europe and the need to “guard against it”. What she said was:

“We have witnessed how quickly things can change for the better. But we know that we must work hard to maintain the benefits of the postwar world… We know that division in Europe is dangerous and that we must guard against it in the west as well as in the east of our continent.”

This part of the speech, which could be read at different levels, is what has caused consternation among Eurosceptics in the Conservative Party as well as UKIP. The main reason is that it could be interpreted as being for the EU status quo and such speeches are normally done in conjunction with government officials. In other words, the suggestion is that the Queen is uttering that which Mr Cameron shirks saying himself.

Despite the protestations emanating from Buckingham Palace and Downing Street that the Queen was not setting out a position in favour of the UK remaining in the EU, the speech resonates. The sentences chosen by the Queen made it clear that Britain is part of the European continent, that it is not a matter of “us and them”, as some would wish to portray things and that Europe (EU?) should remain united (though the Greeks appear to be doing their best to do the opposite).

The Queen is supposed to be above politics but this is clearly nonsense. After all, she opens parliament. She appoints the Prime Minister and meets with him or her on a weekly basis. Not only does the Queen have a mostly ceremonial role in the Parliament of the whole of the UK, she also has formal responsibilities within the devolved assemblies of Scotland, Wales and Northern Ireland. It is therefore naive to maintain that she is a neutral observer and that and the Royal Family is above politics.

Yet this is precisely what Buckingham Palace maintains and the average Brit is happy to believe, despite the recent “Black Spider” memo letters written by Charles, Prince of Wales, to the British government ministers and politicians over the years. Despite the British monarchy being supposedly politically neutral, the letters sent by Charles may be interpreted as an attempt to exert influence over British government ministers on a wide-ranging set of issues including farming, genetic modification, global warming, social deprivation, planning and architecture. If this is the case with Charles’ private letters, surely the Queen is able to influence politics, not to mention her subjects.

If she is really trying to influence British voters to vote in favour of remaining in the EU in the forthcoming referendum on the matter, I would agree fully with her instincts. But the fact remains that she would not be politically neutral and neither should Bucking Palace, Downing Street nor anyone else pretend otherwise.

Besides, this would not be the first time that the Queen has waded into referendums and possibly influenced their outcome. The most recent example of this was in September 2014. Shortly before the voting day on the Scottish referendum, the English Establishment, not least Downing Street, was panicked by the exit polls suggesting that there would be a majority in favour of Scotland becoming independent, into using every means possible to sway the vote in favour of Union.

By all accounts, the Queen was encouraged by Downing Street to speak out on the issue. Her views on the matter had been made clear in her silver jubilee address to a joint session of parliament in 1977, when she said:

“I cannot forget that I was crowned Queen of the United Kingdom of Great Britain and Northern Ireland. Perhaps this jubilee is a time to remind ourselves of the benefits which union has conferred, at home and in our international dealings, on the inhabitants of all parts of this United Kingdom.”

In the end, the plea issued by Buckingham Palace, with perfect timing, was to urge voters in Scotland to “think very carefully” about the referendum in an apparently spontaneous response to someone in the crowd. Needless-to-say, this too was widely reported by the media shortly before the vote.

Like the words “its continent,” dangers of “division in Europe” and the need to “guard against it”, small things can make a significant difference in a country where her subjects revere the Queen. It is widely assumed that the urge to “think very carefully” was sufficient to influence swing voters during the Scottish referendum, resulting in a last-minute surge in favour of retaining the Union. That said, it is far from clear that the outcome of that particular referendum in favour of of retaining the Union will be the last word on the matter, as far as the Scottish National Party and the Scottish people are concerned.

When it comes to the most profound issues facing the UK and its future, I believe that the Queen is not quite as politically impartial and Buckingham Palace would suggest. I suspect that Elizabeth II may well turn out to be, among other things, the Queen of the Referendum.


The British Question: shall we stay or shall we leave the EU?

Since joining the European Union (or EEC at the time) in 1973, the United Kingdom has had an ambivalent attitude to being a member of the European Union (EU). The British general election due in May 2015 will determine whether Britain will hold a referendum over whether to stay or leave the EU. The skirmishes over the “British Question” or “Brexit”, in other words, whether Britain is to remain a part of the EU or not started long before the General Election.

EU Red Lines for Britain Staying

When Mr Jean-Claude Juncker sought to become the President of the European Commission (EC) his election manifesto had five priorities, the first four of which were:
• Creating jobs and growth.
• A European energy Union (diversify our energy sources, and reduce the energy dependency).
• A balanced trade agreement with the USA.
• Reform of the monetary union with a greater focus on social aspects (governance in the Eurozone beyond the ECB, reform of support to Eurozone countries in financial difficulties to take into account of the social impacts and strengthen the Eurozone’s voice in the IMF).

So far so good – nothing unexpected there. However, it is Mr Jean-Claude Juncker’s fifth priority (reproduced below with the original emphasis) that was a little bit unexpected and gave rise to the title of this post.

A fifth and last priority for me as Commission President will be to give an answer to the British question. No reasonable politician can ignore the fact that, during the next five years, we will have to find solutions for the political concerns of the United Kingdom. We have to do this if we want to keep the UK within the European Union – which I would like to do as Commission President. As Commission President, I will work for a fair deal with Britain. A deal that accepts the specificities of the UK in the EU, while allowing the Eurozone to integrate further. The UK will need to understand that in the Eurozone, we need more Europe, not less. On the other hand, the other EU countries will have to accept that the UK will never participate in the euro, even if we may regret this. We have to accept that the UK will not become a member of the Schengen area. And I am also ready to accept that the UK will stay outside new EU institutions such as the European Public Prosecutor’s Office, meant to improve the fight against fraud in the EU, but clearly rejected by the House of Commons and the House of Lords. We have to respect such clear positions of the British Parliament, based on the British “opt out” Protocol. David Cameron has recently written down a number of further key demands in an article published in the Daily Telegraph. As Commission President, I will be ready to talk to him about these demands in a fair and reasonable manner. My red line in such talks would be the integrity of the single market and its four freedoms; and the possibility to have more Europe within the Eurozone to strengthen the single currency shared so far by 18 and soon by 19 Member States. But I have the impression that this is as important for Britain as it will be for the next President of the Commission.

 

This was a remarkably explicit statement from a man seeking high political office at a point in time when he was far from certain of being successful in his bid to lead the EC. This uncertainty was largely due to a high-profile initiative on the part of the British government, led by the Prime Minister himself, to ensure that Mr Juncker did not become the President of the EC. Yet Mr Juncker won resoundingly, despite colourful rumours floating around about his alleged drinking habits.

There was a steely underlying determination to recognise but not pander to UK demands: the four freedoms of movement (of capital, people, goods and services) are non-negotiable, the UK can continue to opt out, but the Eurozone will continue its march towards further integration, so as to strengthen the Euro. But it is interesting to note the absence of a broad commitment towards “an ever-closer union”, 1957 Treaty of Rome, except in the context of the Eurozone countries.

Six months into his mandate as President of the EU, Mr Juncker has underlined his views of the British Question. On the 18 January 2015, he publicly floated the idea of a British exit (or Brexit) from the EU for the first time. Mr Juncker not only compared Britain’s membership of the EU to a “doomed love affair” but also suggested that it might be time to call it a day. He rounded off his comments by warning David Cameron that he will not be “grovelling” for the UK to stay in the EU during future negotiations. What was previously a personal “red line” prior to his election to the most influential of the EU’s Presidential posts, has now become the official EU one.

British Red Lines for leaving the EU

An answer to the British Question it is due now, in the run-up to the British General Election on 05 May 2015. Britain has been largely ambivalent towards the EU, tending to focus on the economy and trade issues and, for a period of time when it suited its economy and voters, enlargement of the EU. Due to a combination of the Eurosceptic wing within the Conservative Party and the growing influence of the Ukip, should they win the election, the Conservative Party has pledged to allow the voters a referendum on whether to stay in or leave the EU unless the current terms of membership are renegotiated. There is, of course, the possibility that the Conservatives will not win but the ambivalence towards the EU is more than likely to remain. Mr Juncker’s red lines are presumably of importance, regardless of whether the Conservatives win the general election or not.

The Conservative attempts at EU reform which would satisfy its Eurosceptic wing and win back Ukip defectors included renegotiated of the terms of EU membership, such as the principle of freedom of movement of people. The explicit aim was to find an acceptable half way house between “uncontrolled” and “no” immigration.

David Cameron has stressed that he favours staying in a reformed EU but that Britain will “rule nothing out” if the changes required are not made, some of which will necessitate EU treaty changes. There are several problems with this position, which the British Government is well aware of: treaty change requires the agreement of 28 member states, all member states are highly averse to such treaty changes because of the debacle of the aborted attempt to develop a EU constitution, several countries are required to hold referendums in relation to such changes and, quite simply, there is not enough time to undertake such changes before the UK referendum is due in 2017. Apart from anything else, why should other member states do anything unless and until there is a Conservative Government in power post May 2015? The insistence on EU treaty change appears to be a lot of hot air blown by the British government, which other politicians and the EU representatives are willing to play along with. There are obviously messages to be put out to the British voter between now and the general election.

For the British is it a serious matter: asylum and immigration are among the top four issues that are likely to determine the outcome of the general election. Consequently, the PM David Cameron has set out his own (latest) version of his “red lines” most recently in November 2014:

  • Workers from the EU: ban EU nationals from claiming in-work benefits or social housing in Britain for four years. No child benefits or tax credits paid for children living outside the UK.
  • Unemployed EU migrants: deport jobless migrants if they do not get work for six months.
  • Other: veto EU enlargement unless the new country impose controls on the movement of their workers until their economies reach UK levels, restrict EU migrants bringing in family members from outside the EU, longer bans on rough sleepers, beggars and fraudsters returning to the UK and tougher rules on deporting foreign criminals.

Notice that there is no mention of EU treaty changes, change to the principle of freedom of movement or renegotiation of the current terms of EU membership. The British Red Lines are highly specific and, to my mind, do not amount to a radical change in the British position within the EU. For the British government it seems as it the British Question or whether to remain in the EU or not simply boils down to these issues.

Early skirmishes over the red lines

The British Question is already being addressed by the two most influential people, namely Mrs Angela Merkel and Mr Jean-Claude Juncker. The German Chancellor Angela Merkel has made the position of the German government clear. In the same way as Mr Juncker and any other leader of the other 27 EU members, in her 07 January 2015 visit to the UK she said at the joint press conference with Mr Cameron: “We have no doubt about the principle of freedom of movement being in any way questioned.” Taking his cue from those words, in a speech on 18 January 2015, Mr Juncker said: “When one mentions the end of the free circulation of workers, there can be no debate, dialogue or compromise.” Not much wiggle room for Mr Cameron there. He added that: “We can fight against abuses, but the EU won’t change the treaties to satisfy the whim of certain politicians.” No other EU nation state has questioned the freedom of movement principle. Mr Juncker also added a dimension which is rather pertinent to Britain’s economy, dominated as it is by the financial industry: “if you question the free movement of workers, Great Britain has to know that one day the free movement of capital will also be called into question.” Do I detect an attempt by the EU to outflank Britain?

The Conservative Party if left with a weak hand: despite the threat to pull out of the EU if it does not get its way; its bluff is being called. Britain is on to a loser in terms of both treaty change and/or reform of the freedom of movement principle. The British government knows it, hence the reasons for the watered down version of Mr Cameron’s red lines above.

The only chink of light for the British government is in relation to cracking down on welfare abuse by EU migrants (but many doubt the extent to which this is widespread abuse). But even here, Britain is not being handed carte blanche. The possibility of tackling EU migration abuses been conceded by the German Chancellor, whose country is holding a similar debate connected with the end of the transition arrangements for Bulgaria and Romania: “We are looking at the legal (aspect) and we are looking at legislation here … abuse needs to be fought against so that freedom of movement can prevail.” But there is a sting in the tail for Britain – Mrs Merkel added: “One has to take a very close look at the social security systems of individual member states … and to what extent they have to be adjusted. And that’s something we need to address”. It hardly amounts to a ringing endorsement of reforms that might involve EU treaty changes before a possible 2017 referendum. It sounds as if the emphasis is placed on individual nation states (Britain and Germany?) getting their own house in order in terms of their welfare benefit eligibility rules and regulations.

It is still early days in the battle of the red lines over the British Question, though some of the early skirmishes have already been decisive. The latest British position appears to be mainly designed for domestic consumption in the run up to the General Election. However, the red lines are of importance, so I plan to address them in future posts.

Ricardo Pinto, 21 January 2015, www.AngloDeutsch.eu