Europe’s Unprecedented Challenge from the Authoritarians in the East – Jon Henley | The Guardian UK

Europe’s Unprecedented Challenge from the Authoritarians in the East

How the EU deals with members flouting core western liberal norms and values could overshadow Brexit wrangling in 2018

Jon Henley | The Guardian UK

 In 2017, Europe survived the crunch Dutch, French and German elections that – after Brexit and Trump – many predicted would mark the beginning of its end. In 2018, the biggest threats could come from the east.

When Poland and Hungary joined the EU in 2004, the integration of the former communist bloc countries was seen as critical to the bloc’s post-cold war advance. Barely a decade later, they risk becoming its first rogue states.    

How Europe deals with members deliberately flouting the core western liberal norms and values it strives to embody – social tolerance, respect for free speech, an independent judiciary – could dominate 2018 far more than Britain’s Exit.

Brussels this month triggered a process likely to lead to an unprecedented formal warning to Poland that “fundamental values” are at risk as relations with the EU continue to sour over the determination of the country’s de facto leader, Jarosław Kaczyński, to push through plans to seize more control of the courts and media.

The European commission also took Hungary to the European court of justice (ECJ) over prime minister Viktor Orbán’s ongoing assault on political freedoms and the emblematic Central European University (CEU), founded by the billionaire George Soros, and referred Hungary and Poland to the ECJ for refusing point-blank to take in refugees as part of the EU’s mandatory quota system.

A protracted, politically charged conflict looks increasingly likely. With unassailable poll ratings, weak and divided oppositions and their countries’ economies booming, Kaczyński’s increasingly authoritarian Law and Justice party and Orbán’s all-powerful Fidesz appear in no mood to back down.

It is Poland’s duty, Kaczyński said at his Independence Day speech in November, to “show the sick Europe of today the path back to health, fundamental values, true freedom and a stronger civilisation based on Christianity”.

Orbán, who appears to be cruising comfortably to a third term as prime minister-strongman in elections this spring, has been calling for the defence of Europe’s “Christian culture” against a “Muslim invasion” since 2015, and is taking his demonisation of the USA financier Soros to shocking levels.

Confronting countries that want the benefits of the EU but thumb their noses at its core values looks set to become an increasingly pressing question in 2018, arguably undermining the European project more significantly than the departure of traditionally doubtful Britain.

The formal warning to Poland, recommended by the Commission subject to the approval of at least 22 EU member states, is the first step of article 7 proceedings, the so-called “nuclear option” whose ultimate sanction is to deprive a member state of its EU voting rights.

That, however, is seen as unlikely because it requires a unanimous vote of all member states – including, Hungary, which has already said it would not back it. It also carries a risk of backfiring by alienating still fundamentally pro-EU populations.

But calls to make EU funds – of which Poland and Hungary are among the largest net recipients – conditional on upholding the rule of law will certainly grow louder. Germany, France and the Nordic states back them. The new Dutch government even wrote them into its coalition accord.

Working out how to handle its troublesome central European members is not, of course, the EU’s only concern in the coming year.Besides Hungary’s vote, potentially tricky elections are due in two other member states: Sweden and Italy. And the dust from last year’s German poll is still far from settled.

The populist Eurosceptic insurgents – with the exception of Germany’s AfD – fared less well in last year’s polls than they had hoped. Austria’s far-right Freedom party re-entered government, but its vote share was down on previous highs.

But the populist threat remains. At 14-percent, support for the anti-immigration Sweden Democrats is similarly down from its 2015 peak, yet it could still have enough clout to stop either the centre-left or centre-right blocs forming a government should they fail to reach a majority in the September elections.

In Italy, where elections are expected in early March, a new law allowing parties to fight elections as coalitions has been criticised as a coup d’état by the anti-establishment Five Star Movement, currently tied second in the polls with the ruling centre-left Democratic Party.

Both, though, lag behind a potential right-wing coalition of Silvio Berlusconi’s Forza Italia, the anti-immigrant Northern League and far-right Brothers of Italy. With no one bloc looking strong enough to secure a majority on its own, concerns about the fate of Italy’s massive debt pile – 130-percent of GDP – are mounting.

As so often happens – even after French president Emmanuel Macron’s vault on to the world stage – Europe will be looking to Germany to pull its weight next year. But after the collapse of three-way “Jamaica” coalition talks, and with the Social Democrats wary of renewing their partnership with Angela Merkel’s CDU, Berlin cannot yet do so.

Whatever happens, it is unlikely that there will be a new government in Berlin before February or even March, and if talks between the CDU-CSU and Martin Schulz’s SPD on a new grand coalition – or at least cooperation – fail, there will be fresh elections.

With Macron champing at the bit to launch major eurozone reforms and push on with a common defence force, much in Europe is, for the moment, on hold. The continent’s economy is faring significantly better than it has in years, but tangible progress remains out of reach.

Meanwhile, it faces an unprecedented challenge from the authoritarians in the east. Italy’s teetering economy, weak banks and complicated politics may yet implode. The migration crisis could erupt once more, and the populists are just biding their time. Europe is not out of the woods yet.

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  • Clyde Duncan  On December 30, 2017 at 3:57 am

    2018 hotspots are in Eurasia and Middle East

    M K Bhadrakumar | Indian Punchline

    The leitmotif of the USA foreign policy in 2018 is going to be a last-ditch attempt to “contain” Russia’s resurgence on the world stage.

    The US Secretary of State Rex Tillerson’s “yearender” in the New York Times on Wednesday makes this abundantly clear.

    Tillerson singled out China, Russia and Iran but had the harshest words reserved for Russia. This is what he wrote:

    On Russia, we have no illusions about the regime we are dealing with. The United States today has a poor relationship with a resurgent Russia that has invaded its neighbors Georgia and Ukraine in the last decade and undermined the sovereignty of Western nations by meddling in our election and others’. The appointment of Kurt Volker, a former NATO ambassador, as special representative for Ukraine reflects our commitment to restoring the country’s sovereignty and territorial integrity. Absent a peaceful resolution of the Ukraine situation, which must begin with Russia’s adherence to the Minsk Agreements, there cannot be business as usual with Russia.

    Tillerson was surprisingly laid-back regarding China. He stressed “American interests” in the relationship with China (not the Quad’s – USA-Australia-Japan-India) and mentioned the key issues – Beijing’s leverage on North Korea, trade, intellectual property rights, and “troubling military activities in the South China Sea and elsewhere”. But he viewed China’s rise from a long-term perspective, “carefully” managing the relationship “for the next 50 years.”

    In Tillerson’s words:
    A central component of our North Korea strategy is persuading China to exert its decisive economic leverage on Pyongyang. China has applied certain import bans and sanctions, but it could and should do more. We will also continue to pursue American interests in other areas of our relationship, including trade imbalances, intellectual property theft and China’s troubling military activities in the South China Sea and elsewhere. China’s rise as an economic and military power requires Washington and Beijing to consider carefully how to manage our relationship for the next 50 years.

    Of course, Beijing reacted nicely: “China and the US share a wide range of common interests in spite of some differences. However, our common interests far outweigh our differences. China-US cooperation conforms to the fundamental interests of both countries and the world at large, and cooperation is the only right choice for us. When it comes to disagreements, we shall strive to resolve them in a constructive way on the basis of mutual respect so as to avoid disrupting the long-term development of bilateral relations. We hope that the US could work with China to focus on cooperation and manage differences on the basis of mutual respect so that bilateral relations can move forward in a sound and steady way.”

    Ukraine will be the “hotspot” in USA-Russia relations next year. 2017 is ending with the Trump administration removing restrictions on supply of lethal weapons to Ukraine. The Rubicon has been crossed. Russia will be closely watching how the US military aid to Kiev develops. Russia will resist any US attempt to shift the military balance in Donbass.

    Meanwhile, the possibility cannot be ruled out that the USA might impose punitive sanctions against Russia next year. Herman Gref, the chief executive of Sberbank and an influential voice among Moscow elites, told Financial Times newspaper this week that if such stricter sanctions – against Russian oligarchs and/or state-owned corporations – are imposed, it will “make the Cold War look like child’s play.”

    In an interview with Interfax on Thursday, Russian Foreign Minister Sergey Lavrov said that Moscow relies on “pragmatic approaches and realistic assessments” vis-à-vis US. “We do not entertain any illusions… We will respond to any hostile actions against Russia and our citizens in the way that is best for us… In fact, the sooner certain American politicians get rid of the illusions that Russia can be cowed by restrictive measures or a show of force, the better it will be for everyone, including themselves.”

    The point is, the USA has no leverage over Russia – or China and Iran – for that matter. Tillerson’s essay conveys the impression of an ineffectual superpower.

    Even the reference to Pakistan betrayed weariness:
    “Pakistan must contribute by combating terrorist groups on its own soil. We are prepared to partner with Pakistan to defeat terrorist organizations seeking safe havens, but Pakistan must demonstrate its desire to partner with us.”

    The USA has no credible road map. Indeed, the cool war with China will continue, but Indian pundits shouldn’t get excited that 2018 will be a “kinetic” year in their “Indo-Pacific” parish.

    The Trump administration has no control over shaping that cool war. Basically, the USA has 3 options:

    Contain China’s rise as a military power; roll back China’s economic influence through a US-led regional alliance such as the Trans-Pacific Partnership agreement; or, accept China’s rise and share the liberal international order with it as participant. But Washington has no identifiable strategy.

    Suffice to say, it will be in the Eurasian and Middle East theatres – the two are inter-related – where the US will get bogged down. Make no mistake, Russia is determined to push through a settlement in Syria in 2018. And it will be a bitter pill for the Beltway establishment to swallow defeat in front of the world community.

    Moscow announced this week that the Tartus naval base and the Hmeimim airbase in Syria are being expanded as permanent bases with the capacity to deploy nuclear ships and aircraft. It signals a power projection far beyond anything that the former Soviet Union achieved in the Middle East.

    With a renewed 6-year term as president after the 18th March election in Russia, Vladimir Putin will be an alpha male.

    By the way, the election date itself is hugely symbolic, dripping with strategic defiance of the USA

    – 18th March is the date Crimea rejoined Russia four years ago!

  • Clyde Duncan  On December 30, 2017 at 4:07 am

    I was never a fan of history, but I recall something about the Ides of March and the deadline for settling debts in Roman Times??

    Perhaps, someone is saying something out loud?

    Perhaps, this is all a coincidence and my mind is playing tricks ….

    Perhaps, History repeating itself in 2018?

    • Ali  On December 30, 2017 at 8:08 am

      Talking about history repeating itself, you can be sure that Duncan will continue to pollute the forum with annoying, endless c&p. Some things always remain the same. Old dogs can’t be taught new tricks apparently.

      • guyaneseonline  On December 30, 2017 at 7:11 pm

        Ali:
        I have noted that you are criticizing others regarding their comments.
        As editor, I have let them all through the comment filter. …as I know that everyone is usually able to deal with criticisms.

        Therefore your comments are OK…. if they are not personal attacks..However it would be nice to see you commenting on the various subject matters rather than just criticizing others.

        Looking forward to your in-depth comments in the future .Thanks
        Editor

  • Veda Nath Mohabir  On December 30, 2017 at 9:22 pm

    Thx Cy. Was wondering if you were taking notice.

    While, I have your attention: All The Very Best for 2018!
    Veda.

    • guyaneseonline  On December 30, 2017 at 11:24 pm

      Hello Veda:

      Thank you for the New Year Greetings.
      I do look at all of the comments made on this Blog.
      I noticed the exchange between you and ALI earlier and I said nothing as I know that you would be able to handle his statements.
      I thought that you handled it well.

      I have had to warn certain persons before and banned one for vulgar comments.
      However I do not muzzle comments or edit comments that I do not agree with.
      This forum is free for everyone to voice their opinions.
      My job is to ensure that the high level of commentary is maintained.

      I enjoy reading your informed commentary as I, like many others, also learn much from them. So Veda… Keep on writing and ignore “Noise”.

      Thanks… and health, success etc to you and your family in 2018.

      Cyril

    • Ali  On December 30, 2017 at 11:43 pm

      I thought criticism is part of commenting in public forums.

      What I take exception to is when people like you get in the gutter and talking about slimy holes and calling people POS. That means there is a deficit somewhere upstairs.

  • Clyde Duncan  On December 30, 2017 at 11:07 pm

    How Western Capital Colonized Eastern Europe

    Populist politicians are too late with their nationalist messages.

    Leonid Bershidsky | Bloomberg News

    Yet another Eastern European country is about to get a populist, anti-immigration, Euroskeptic government:

    Billionaire Andrej Babis’s ANO party enjoys a wide poll lead ahead of the October parliamentary election in the Czech Republic.

    The central European country would join Poland, Hungary and Slovakia. If that sounds ominous, there is at least one bulwark against extremism in the region: Western European capital.

    Indeed, Western investment plays such an important role in economies of all these countries that nationalist politicians make their countries look more like truculent colonies than partners in a grand integration project.

    In a recent paper, Filip Novokmet, Thomas Piketty and Gabriel Zucman bluntly call Eastern European nations “foreign-owned countries”.

    “The owners tend to come from EU countries, in particular from Germany,” they write. “So in some sense it is not entirely different from the situation of peripheral regions that are being owned by more prosperous central regions in a large federal country.”

    To Piketty and collaborators, this is a nuisance because it distorts inequality measurements:

    Much of a country’s wealth and income accrues to foreign shareholders who do not belong to the local top one percent, so the country looks more egalitarian than it actually is. But it also has broader implications.

    Relative to their economic output, Eastern European nations have the biggest negative net investment positions in the EU, unless one counts Ireland, Greece, Cyprus, Portugal and Spain — all recipients of big bailouts during the recent financial crisis.

    Unlike the crisis-hit “PIGS,” the nations of Eastern Europe developed these positions by consistently attracting more investment than they sent out. The foreign investment stock in these economies, relative to gross domestic product, is higher than the developed-country average.

    Such levels of investment used to make these nations proud, showcasing their openness and their heartfelt desire to integrate into the wealthier part of Europe. But, until the EU was buffeted by economic storms, these nations didn’t fully realize that becoming “foreign-owned” has costs too.

    Local companies found out during the financial crisis that the foreign banks were the first to shrink loan origination. In other sectors, a large foreign presence means a huge unemployment threat if a country suddenly becomes less welcoming to foreign capital. In Poland and the Czech Republic, a third of the workforce is employed by foreign companies. And these tend to be the biggest, most economically important companies, too:

    In Poland, they produce two-thirds of all exports; in the Czech Republic, they are responsible for 42 percent of value added. Losing even a few of these firms could cause a painful reversal of economic trends, something Babis, a businessman and former finance minister, understands well.

    Germany, the Netherlands and France are the biggest investors in the Eastern European economies. The advantages of investing in the region are obvious for these countries’ firms:

    They can lower labor costs without moving production too far from their traditional markets or compromising on the protections they have at home. Populist governments can hit foreign banks and supermarket chains with special taxes, as Hungarian Prime Minister Viktor Orban and the Polish government have done and as Babis is likely to do if he comes to power, but only to a point; go too far and foreigners might decide to exit, leaving these relatively small economies in the dumps.

    The Hungarian, Polish and Czech governments can resist European directives on refugee resettlement and posture defiantly when their efforts to take over the courts are challenged:

    “We will not be a colony,” Orban and Polish ruling party leader Jaroslaw Kaczynski have told EU officials on separate occasions. That, however, won’t change their de facto status as economic colonies of the wealthier West, unless the populist governments move to expropriate the foreign companies — an unthinkable development.

    Milos Zeman, the Czech Republic’s populist president, said recently that it might be better to lose EU subsidies — something Western Europeans have threatened — than be forced to accept Muslim migrants.

    But the loss of aid is not the real threat; that would be foreign businesses’ unease about a changing business climate. Fracturing EU cohesion — and especially defying EU courts, which uphold the union’s policies — could in time lead to that because it would lessen the protection of Western European investors.

    Orban, who has been in power longer than his ideological allies in neighboring countries, understands that well:

    He has repeatedly softened policies as a result of European court rulings. Orban has not directly challenged the recent decision by the European Court of Justice that obliged Eastern European countries to take part in the bloc’s refugee resettlement scheme.

    The nationalist rhetoric may fool some voters into thinking their leaders are truly independent. But the choice politicians in Eastern Europe ultimately face is stark:

    Either they content themselves with mainly fig-leaf rebellion, or they raise the stakes and risk losing investment on which their economies depend.

    It’s not really a choice; Eastern Europe will eventually need to champion integration, just as it once championed membership.

    My own view is that eventually, it will no longer matter where a European company is headquartered because a united Europe will have a common budget, and economic cohesion will become inevitable. Nationalism may be having a moment, but it’s too late:

    The Eastern European countries have been open to investors for too long, and they’ve lost too much control over their economic future to hold on to political control.

    This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.

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