Friday 23 December 2011

16 December 2011

My apologies if you loathe the expression “not fit for purpose”, but I’m beginning to wonder if we need to ask whether perhaps the European Union is, sorry, “not fit for purpose.”

(If you do loathe the expression, don’t blame me, blame John Reid, who introduced it into the political lexicon in 2006 when he took over at the Home Office and promptly declared the immigration department you-know-what. The Guardian style guide sniffs that it’s “a recent cliché that quickly proved itself unfit for the purpose of good writing”. To which I’m tempted to reply with another neologism: “wha’ever …”)

But I digress. It’s a week now since the bust-up in Brussels that resulted in all those headlines about the UK being left stranded in a minority of one on the question of how to devise a new framework to deal with potential financial melt-downs.

As so often with EU summits, in the cold light of day and when everyone has caught up on some sleep after an all-night negotiating session and too much coffee, the reality seems to be rather more complicated.

For one thing, the framework is so vague that no one seems quite sure what they’ve either signed up to, in the case of 23 EU governments, or refused to sign up to, in the case of David Cameron. Have a listen to our interview with the Swedish finance minister, Anders Borg, which was broadcast on Wednesday, to get a flavour of how opaque the whole thing is.

And to add confusion to the complexity, what are we to make of last night’s confirmation from Downing Street that the UK will have “observer” status at future negotiations and will take part in “technical discussions” about how to move forward.

If you were to conclude from all this that they’re making it up as they go along, I wouldn’t seek to change your mind.

I well remember during the 1990s traipsing from one EU capital to the next, as six-monthly summit followed six-monthly summit, watching in some bewilderment as Europe’s leaders went about designing the EU of their dreams.

The UK dream at the time (this was in the days of John Major at No. 10 and Douglas Hurd at the Foreign Office) was an EU that would gradually transmogrify into an entity that was, in the jargon of the time, “wider, not deeper”.

The Germans and the French, on the other hand, wanted an EU that was both deeper and wider. In other words, open up to new members (remember the Big Bang, when 10 new members joined in 2004?), which was what Britain favoured, and also build what in the words of the founding Treaty of Rome was called “an ever closer union among the peoples of Europe”, which Britain was a lot less keen on, even if Edward Heath had signed up to it when we joined in 1973.

So now we have a union of 27 member states, soon to be 28 when Croatia joins in two years’ time, and a currency union to which 17 of them belong and eight more are due to join at some unspecified time in the future.

Can it work? Can the lamb of Malta lie down with the lion of Germany? Can Portugal march hand in hand with Poland? Or has it all become too unwieldy, too stretched as a concept and too unbalanced as an economic entity, to survive the immense stresses to which it is now being subjected?

Perhaps the middle of a deep economic crisis is not the best time to try to tackle these issues. But you only have to listen to the sniping between London and Paris this week to understand that the bonds that bind this union (and I don’t mean bonds as in “sovereign bonds”) are beginning to fray quite seriously.

Gideon Rachman of the Financial Times wrote this week: “Markets and voters are increasingly refusing to obey the grand pronouncements issued by EU leaders at their ever more frequent crisis summits. Add to that the growing tensions between EU members, which go well beyond the isolation of Britain, and you have a formula for continuing confusion and disunity.” That’s the politics of it.

In The Times, Anatole Kaletsky wrote of last week’s “fiscal compact” plan: “It is arithmetically impossible for all the countries in the eurozone simultaneously to deflate their way out of a debt crisis ... By imposing permanent austerity on the whole eurozone, the fiscal compact would guarantee permanent depression. And that in turn guarantees that the treaty supposedly agreed last Friday will never see the light of day.” That’s the economics.

In our interview on Wednesday, the Swedish finance minister confidently predicted that 2012 will be even worse than 2011. And this is the man whom the Financial Times has named as the most successful finance minister in the EU.

23 December 2011

Do you remember what President Obama said 10 days ago when he marked the formal departure of the last American troops from Iraq?

“We left behind us a sovereign Iraq, stable and self-sufficient, with a representative government elected by its people.”

Hmm. Stable? Self-sufficient? Representative government? Maybe, yet again, a US President is allowing wishful thinking to get the better of him. (“Mission accomplished”, anyone?)

Yesterday, multiple bomb attacks in Baghdad killed at least 67 people. Most of the attacks appear to have been aimed at Shia targets, just as they were in the worst days of the sectarian violence in 2006-7, when thousands of people died.

(By the way, I wouldn’t want you to think that the US no longer has a significant presence in Iraq. Its embassy in Baghdad is reported to have about 15,000 people on its staff, and I imagine more than a handful receive their monthly pay cheques from the Pentagon.)

Why has the violence flared now, after several months of relative calm? As always, it seems the context is regional power-plays more than religious tensions. After all, if the US army are no longer a visible presence, doesn’t someone have to fill the vacuum?

Look at it this way: which regional power most wants to be seen as the dominant influence in Iraq? Which regional power has a clear strategic interest in being able to portray itself as a victor in Iraq, while the US is perceived as a loser?

And – not coincidentally – which regional power has most to lose if its one Arab ally, Syria, becomes the latest country where popular protests and armed insurrection topple a brutal and autocratic regime?

The answer, obviously enough, is Iran, Iraq’s giant Shia neighbour to the east which is closely tied to prime minister Nouri al-Maliki. Maybe that helps explain why within days of the final US troop withdrawal, he has moved to ratchet up the pressure on the country’s leading Sunni politicians.

A warrant has been issued for the arrest of the Sunni vice-president, Tareq al-Hashemi, on terrorism charges, and the Sunni deputy prime minister Saleh al-Mutlaq, who’s now facing a no confidence vote in parliament, told me this week that he regards Mr Maliki as a worse dictator than Saddam Hussein.

So, if the Iranians are keen to bolster Shia power in Iraq, who is likely to be equally keen to stop them? Saudi Arabia, perhaps, which has long been Iran’s main rival for regional hegemony and which regards itself as the protector of Sunni Arabs wherever they are threatened?

Could that be why Sunni bombers are suddenly back in action? (To be fair, we don’t yet know who yesterday’s bombers were, but there’s a widespread assumption that they were tied to, or affiliated with, al Qaeda.)

It’s worth recalling that the coalition government headed by Mr Maliki was painfully and reluctantly stitched together only as a result of enormous diplomatic pressure after the parliamentary elections of December 2005. It took six months of haggling to get it together, after Mr Maliki’s Dawa party and its allies failed to win enough seats to form a majority without the support of other parliamentary blocs.

Take away the US glue that was holding the coalition together, and – judging by the events of the past week – it soon comes crumbling down. Mr Hashemi has fled to the semi-autonomous Kurdish region of northern Iraq, where the prime minister’s writ doesn’t run, and there’s every reason to suppose that other Sunni leaders will soon decide to have no more to do with Mr Maliki.

In other words, Iraq is once again teetering on the brink of the abyss. It’s not a reassuring sight as we end this year of tumult right across the Arab world.

Footnote: I realise we've brought you a lot more doom and gloom over the past 12 months than you would have liked – so let me suggest what you can hope for in the coming year: a clement winter with no gales, blizzards or floods; an unexpected economic upturn with lots of new jobs; a mysterious benefactor who pays off all the eurozone’s debts; a successful London Olympics with a lovely clutch of gold medals for Team GB; and an end to strife in Syria, Yemen, Bahrain, Egypt, Libya, and Iraq.

I didn’t say it’ll happen – I suggested you can hope for it. Meanwhile, as I say at this time every year: enjoy the company of your family and friends; admire the trees and the flowers in parks and gardens; count your blessings.

Wednesday 14 December 2011

2 December 2011

Don’t worry – I’m not going to write about the economy, the euro, or the banks this week; I have no wish to ruin your weekend before it’s even started.

Instead, I’ve been thinking some more about the Arab uprisings which surely will come to be seen as the defining events of 2011, just as the end of Communism in Europe came to define 1989. Soon we’ll be marking the first anniversary of the death by self-immolation of Mohamed Bouazizi, the Tunisian street-seller who sparked the uprisings, so perhaps it’s a good time to try to take stock.

(Incidentally, you may remember that when the Chinese Communist leader Zhou Enlai was asked his opinion of the French revolution, he replied: “It’s too soon to tell.” This was in the early 1970s, but unfortunately, it now turns out that he was referring to the events of 1968, not 1789, which rather ruins the story.)

The trouble with revolutions is that they tend to be processes, rather than events. In the words of Professor Stephen Walt, of Harvard university, writing in Foreign Policy this week: “If the history of revolutions tells us anything, it is that rebuilding new political orders is a protracted, difficult, and unpredictable process.”

He offers three examples. First, the French revolution: the Bastille was stormed in 1789; Louis XVI and Marie Antoinette were executed four years later; Napoleon didn’t come to power until 1799. In other words, a full decade of turmoil and terror followed the initial uprising.

Or how about the Russian revolution? The Tsarist regime was overthrown in March 1917; the Bolsheviks came to power several months later, but then there was a grim civil war which didn’t end until 1923. And there was, of course, continued turmoil – pogroms, massacres, and purges -- for many years after that.

His third example is the Iranian revolution of 1978-9. The Shah was desposed in January 1979; Ayatollah Khomeini returned from exile in France a month later, but then there was a prolonged period of political unrest and uncertainty. The country’s first post-revolution president, Abdolhassan Bani-Sadr, was impeached in 1981 over his resistance to rule by the clerics – and you could argue that the debate over the role of the clerical establishment in Iran remains unresolved to this day.

All of which, I suppose, tends to lead to the conclusion that no, this is not yet a good time for a definitive assessment of the Arab uprisings. For one thing, in some countries the uncertainty is far from over: in Syria, most obviously, but also in Yemen, despite the transition of power agreement signed last week, and in Bahrain, where strains between the Sunni ruling family and the Shia majority continue to fester.

A sense of history may also be useful when outside governments consider how best they can shape events that are still in a state of flux. Professor Walt argues: “History … warns that outside powers have at best limited influence over the outcomes of a genuine revolutionary process. Even well-intentioned efforts to aid progressive forces can backfire, as can overt efforts to thwart them. Overall, a policy of "benevolent neglect" may be the more prudent course …”

I spoke a few days ago to the Syria analyst Peter Harling, of the conflict resolution think tank the International Crisis Group, who take a very similar view. He warned in his most recent report: “At a time when the international community is feeling a compulsion to do something, the overriding principle should remain to do no harm.”

Don’t rush to impose tighter economic sanctions, he argued, because they risk turning Syria into a pariah state and would enable the Assad regime to galvanise support against an “international conspiracy” – and don’t rush to legitimise the Syrian political “opposition”, who may have little, if any, support among the actual protesters on the streets of Syria’s towns and cities.

Politicians hate doing nothing. They are genetically programmed to act, to intervene, to initiate, because they are convinced that if they get it right, they can help to make the world a better place. After all, who’d vote for politicians who just sat on their hands all day, gazing out of the window at the mayhem all around them?

But sometimes, the wisest of them could be the ones who do least. So in my dreams, one day, when I ask a minister what s/he intends to do about the latest outbreak of violence somewhere, I’ll get the reply: “You know what? I think for now the best thing to do is nothing.”

9 December 2011

Perhaps I should start with a statement of the blindingly obvious: Russia is not Egypt.

Yes, there were thousands of anti-government protesters out on the streets of the capital this week. And yes, the security forces responded with great brutality. And yes again, online social networks played an important role in galvanising the protests and giving a voice to the protesters.

But no, an autocrat is not about to be toppled. And no, Vladimir Putin is not Hosni Mubarak. So I suspect any references to a “Russian spring” (in December, for goodness sake?) should be taken with a very large pinch of salt.

Let’s rewind a few days. Last weekend, Russian voters went to the polls to choose a new parliament. This is not an event that normally excites much interest, because there is rarely any doubt about who is likely to win.

But this time was different. It was the first test of public opinion since Vladimir Putin (currently prime minister) and Dmitri Medvedev (currently president) announced that they intend to repeat their little trick of four years ago and swap jobs. (It’s not an exact repeat, in fact, because four years ago, Mr Medvedev was a mere deputy prime minister. But the principle remains the same.)

It seems that Russian voters – or at least some of them – object to being treated as irrelevant by-standers at election time. Last month, there was an embarrassing episode when Mr Putin was booed at a martial arts contest where he tried to make a speech. These things shouldn’t happen in what the Russians call their “managed democracy”.

Then, in the run-up to last weekend’s parliamentary elections, opposition groups started a campaign to persuade voters to vote for any party except Mr Putin’s United Russia.

When the results were declared, they showed a substantial drop in support for United Russia. What’s more, according to independent election monitoring groups and foreign observers, the party would have done far, far worse had there not been widespread vote-rigging and fraud.

That’s why the protesters took to the streets. It’s also why they intend to do the same thing this weekend, after an online campaign that is reported to have gained tens of thousands of supporters.

What does it all mean? Well, it’s easier to suggest what it doesn’t mean, because no Russian analyst to whom I have spoken this week believes that Mr Putin will not be re-elected as president next March. (Apologies for the double negatives: what I mean is that every Russian analyst to whom I have spoken believes that Mr Putin will be re-elected next March.)

Millions of Russians remember the chaotic days of the Yeltsin era, and the financial melt-down which left the vast majority struggling to make ends meet, while a handful of oligarchs snapped up State enterprises and turned themselves overnight into billionaires. There is very little appetite to return to that.

Vladimir Putin has meticulously cultivated an image as a strong leader (remember those pictures of him bare-chested?) while benefiting politically from high oil and gas prices, which have sent billions of dollars cascading into the Kremlin exchequer. It all goes down well in a country with a long tradition of strong leaders.

But something did shift this week. After too many years of cronyism, corruption and inefficiency, young, educated Russians seem to have decided they want something better. The chant of the protesters was “Russia without Putin”.

Did they take their cue from the Arab spring protesters in Tunisia and Egypt? Not consciously, perhaps, but 2011 has become the year of street protests – all the way from the capitals of the Arab world to the Occupy movements of New York, London and many other major cities.

It’s interesting, isn’t it, how in an increasingly virtual, digitised world, lived more and more on line and on screen, the most potent form of political action once again is the mass protest on the streets and in the squares of the world’s major cities.

For now, Vladimir Putin seems determined to blame Washington for his troubles. Hillary Clinton has been rude about the conduct of the elections; and in return, Mr Putin has accused the US of spending hundreds of millions of dollars to influence Russian politics.

So far, so predictable. Far less predictable is how the anti-Putin protesters will respond when the security forces try to put an end to their demonstrations.

On your list of things to watch out for in the coming year – the economy, the euro, the Olympics and the US presidential election – you can now add one more item: Russia.