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Will Germany Return to Its Nationalist Past?

“Think of Europe today as an unexploded bomb, its detonator intact and functional, its explosives still live,” Robert Kagan warns us in Foreign Affairs, raising the possibility that Germany could return to its nationalist past, awakened and untethered in a Europe filled with nationalism and populism. The Proclamation of the German Empire, Anton von Werner, 1882 Germany has been a model of peace and liberalism in the post-World War II system, but the constraints are fading: Nationalist parties are on the rise, the free-trade system is threatened, and President Trump has thrown America’s security guarantees into question. It’s a frightening thought, but Kagan suggests Europe’s economic powerhouse could return to a natural state of nationalism and ambition, if this carefully laid system falls apart. If one were devising a formula to drive Europe and Germany back to some new version of their past, one could hardly do a better job than what U.S. President Donald Trump is doing now. Overtly hostile to the EU, the Trump administration is encouraging the renationalization of Europe, as Secretary of State Mike Pompeo did in Brussels at the end of 2018, when he gave a speech touting the virtues of the nation-state. In the European struggle that has pitted liberals against illiberals and internationalists against nationalists, the Trump administration has placed its thumb on the scales in favor of the two latter groups. It has criticized the leaders of the European center-right and center-left, from German Chancellor Angela Merkel to French President Emmanuel Macron to British Prime Minister Theresa May, while embracing the leaders of the populist illiberal right, from Viktor Orban in Hungary to Marine Le Pen in France to Matteo Salvini in Italy to Jaroslaw Kaczynski in Poland. It was in Germany, of all places, where the U.S. ambassador, Richard Grenell, expressed in an interview the desire to “empower” Europe’s “conservatives,” by which he did not mean the traditional German right-of-center party of Merkel. Besides encouraging right-wing nationalism and the dissolution of pan-European institutions, the Trump administration has turned against the global free-trade regime that undergirds European and German political stability. The president himself has specifically targeted Germany, complaining of its large trade surplus and threatening a tariff war against German automobiles in addition to the tariffs already imposed on European steel and aluminum. Imagine what the effects of even greater pressure and confrontation might be: a downturn in the German economy and, with it, the return of resentful nationalism and political instability. A burning poster of Angela Merkel in a Nazi uniform outside the Greek parliament in Athens, May 2013. Now imagine that Greece, Italy, and other weak European economies were teetering and in need of further German bailouts that might not be forthcoming. The result would be the reemergence of the economic nationalism and bitter divisions of the past. Add to this the growing doubts about the U.S. security guarantee that Trump has deliberately fanned, along with his demands for increased defense spending in Germany and the rest of Europe. American policy seems bent on creating the perfect European storm. Whether this storm will descend in five years or ten or 20, who can say? But things change quickly. In 1925, Germany was disarmed, a functioning, if unstable, democracy, working with its neighbors to establish a stable peace. French and German leaders reached a historic pact in Locarno, Switzerland. The U.S. economy was roaring, and the world economy was in relatively good health, or so it seemed. A decade later, Europe and the world were descending into hell. Today, it may well be that the German people and their neighbors in Europe can be counted on to save the world from this fate. Perhaps the Germans have been transformed forever and nothing can undo or alter this transformation, not even the breakdown of Europe all around them. But perhaps even these liberal and pacific Germans are not immune to the larger forces that shape history and over which they have little control. And so one can’t help but wonder how long the calm will last if the United States and the world continue along their present course. Across Germany, there are still thousands of unexploded bombs dropped by the Allies during World War II. One blew up in Göttingen a few years ago, killing the three men trying to defuse it. Think of Europe today as an unexploded bomb, its detonator intact and functional, its explosives still live. If this is an apt analogy, then Trump is a child with a hammer, gleefully and heedlessly pounding away. What could go wrong?

Elections Hit Erdogan Where it Hurts

President Recep Tayyip Erdogan has enjoyed a firm grip on power, but results in municipal elections have hit him where it hurts—his story—writes Selim Koru in The New York Times. Erdogan’s Justice and Development Party is contesting mayoral results in Istanbul and Ankara, but opposition candidates may have won in both cities. They’re important to the narrative of Erdogan’s political career, Koru writes: Erdogan launched his rise as mayor of Istanbul, when he and a then-allied mayor of Ankara created “islands of good governance” that set them apart from the ruling elite. The potential losses, then, not only cut into Erdogan’s base, but into his origin story. Less than three weeks before March 31 local elections, Turkish President Recep Tayyip Erdoğan has taken his animosity towards the opposition to new levels, opening a court case against opposition nationalist Good Party leader Meral Akşener on charges of insulting the president. Akşener, who faced Erdoğan as a rival in last year’s presidential race, can be directly tried since she does not have a seat in parliament or, consequently, parliamentary immunity. Not that this did much to help Selahattin Demirtaş, the former co-chair of the pro-Kurdish opposition Peoples’ Democratic Party (HDP), who had his immunity stripped after being detained on terror charges in November 2016. Demirtaş has remained in prison since then, despite the European Court of Human Rights’ ruling demanding his immediate release. Instead, Turkish courts rejected his appeal and upheld his four-year and eight-month prison sentence on charges of spreading terrorist propaganda and also banned Demirtaş from politics. Since the sentence is less than five years, he cannot take his case to the Court of Cassation. The treatment of the former HDP co-chair may be a sign of what is in store for Akşener. Erdoğan has been on the campaign trail supporting his Justice and Development Party (AKP) candidates in a series of meetings since the beginning of February, and the president has used these occasions to launch fierce attacks on opposition parties, accusing them of working with terrorist organisations. The Good Party and main opposition Republican People’s Party (CHP), he said, have entered a secret alliance with the HDP, which Erdoğan has called the equal of the Kurdistan Workers’ Party (PKK). Turkey, the United States and the European Union all list the PKK, which has been fighting for Kurdish self-rule in Turkey since 1984, as a terrorist organisation The president has said the opposition parties are taking orders from both the PKK and the Gülen movement, an Islamist former ally of the AKP that the government accuses of plotting the July 2016 coup attempt. Akşener’s response to these accusations landed her in hot water. At a joint rally organised by the CHP-Good Party alliance in Denizli in southwest Turkey, the opposition leader greeted the crowd by asking them, “How are all the president’s terrorists from Denizli?” “Are you well, all you terrorists, whose only wish is to bring bread to your table? Even as a joke, it hurts. The president of this country has called CHP and Good Party voters terrorists. A president who calls close to 18 million voters terrorists,” Akşener said. Akşener’s words evidently struck a nerve. Erdoğan felt compelled to respond during a rally, denying that he had called opposition voters terrorists and explaining he had only meant party leaders. It was then that the president announced he had called in his lawyers to open a case against Akşener. Even after this announcement, Akşener refused to back down. Instead, she repeated her greeting to voters at another rally, this time speaking to voters in Aydın in western Turkey. In the criminal complaint against Akşener, Erdoğan’s lawyers attempted to clearly draw the line the president had indicated in his speech, explaining that he had been “emphasising the CHP-Good Party alliance’s relationship with the PKK and Gülen movement, and inviting voters to act sensitively according to that information.” In a later speech, Erdoğan made references to imprisoned figures from the HDP and the Gülen movement, indicating that a jail term was a very real possibility for Akşener. It was a “significant setback” for Erdogan,and he acknowledged that his party has lost support.”We, as the AKP, have lost some of the municipalities,” Erdoğan said in a speechlate Sunday. “We will accept that we have won the hearts of our people in the places where we won, and we were not successful enough in the places where we lost, and we will decide on our action plan accordingly.” Preliminary results show the secularist Republican People’s Party (CHP) candidate Mansur Yavaş is set to win in Ankara, with Turkish broadcasters already declaring a clear opposition win in the capital on Sunday night.writes Politico Europe’s Zia Weise, while Reuters’ Dasha Afanasieva says it’s bad news for Turkey’s economy, as Erdogan will likely feel pressure to seek short-term fixes that won’t heal Turkey’s current recession. Amid Turkey’s first recession in a decade, local issues took a back seat during the campaign as the municipal elections turned into a litmus test of Erdoğan’s popularity. For years, Erdoğan successfully cast himself as the guarantor of prosperity and growth, but as living costs soared — with inflation at around 20 percent and food-price increases hitting above 30 percent — discontent grew widespread, even among the AKP’s conservative voter base. The president himself described the elections as an existential test for his country, calling the vote “a matter of survival.” In his speech on Sunday night, Erdoğan highlighted that the AKP and its allies, the Nationalist Movement Party (MHP), won a majority of the nationwide vote share. Combined, they received 52 percent of votes at 99 percent of ballots opened. But neither Erdoğan’s rhetoric nor his government’s subsidized vegetable scheme were enough to convince voters in many of Turkey’s cities — even with the playing field skewed firmly in favor of the president, whose allies control the vast majority of mainstream media outlets. Ankara was not alone in swinging to the opposition: The AKP-MHP alliance also lost Adana, Antalya and Mersin — all among Turkey’s 10 largest cities — and a number of Anatolian provinces, according to preliminary results. The CHP, on the other hand, defended its strongholds on the Aegean coast, including Turkey’s third-largest city of Izmir. Voters in the eastern Anatolian province of Tunceli, meanwhile, elected a mayor from the Communist Party, handing the Communists control over a provincial capital for the first time in Turkey’s history. The opposition’s municipal victories may be unlikely to loosen Erdoğan’s tight hold over Turkey; since winning reelection last year, he governs as executive president with sweeping powers. But they are still a severe blow to Erdoğan — signaling that after 17 years in power, his popularity may be declining. Sunday’s results will also breathe new life into the long-stagnant opposition.

Brexit Hits Its Nadir

For all the chaos of Brexit, things have never been this bad, writes David Allen Green in the Financial Times; with an April 12 deadline looming, the country is unprepared for a no-deal Brexit, Parliament is unable to support any other plan, and Britain has no solid case for another extension from the EU. Prime Minister Theresa May is making such a case, nonetheless, but Green says European countries have already braced themselves for a no-deal Brexit and might not agree this time. Still on the table is the “nuclear option” of revoking the UK’s Article 50 withdrawal—i.e., canceling Brexit—but that would only make sense as a stall tactic, buying time for a new referendum or general election, writes Carnegie Europe’s Peter Kellner, and Green says it might encounter legal problems to be done in time. However, such a deal would also limit the UK’s ability to strike new trade deals with other countries. That was one of the main objectives of Brexit. To abandon it would justifiably rile all those who campaigned for Leave and many who voted for it. What is more, the UK would have to abide by new EU trading rules and agreements, but without having any say in them. Far from “taking back control,” as the Leave campaigners demanded, the UK would have less say on many things than it does now. Even that assumes that the EU would agree to keep the UK in the Customs Union. My guess is that it would—but that it would demand a high price: continuing payments into the EU’s budget, and alignment with most current and future single market rules (again, with the UK having no say in them). Other ideas for a “soft” Brexit, such as one known as “Common Market 2.0,” suffer the same essential defect. They would save the UK from economic ruin, but at the price of political servitude to many of the most important EU decisions. The downsides to both a general election and a soft Brexit mean that Mrs. May still has an outside chance of securing a majority in Parliament this week for her withdrawal agreement—perhaps accompanied by a promise to MPs to give them a greater say in the negotiations in the months ahead over the UK’s long-term relationship with the EU. Alternatively, Parliament might build a majority for a combined proposal: a soft Brexit of some kind, subject to a “confirmatory vote.” A referendum would give voters a clear choice: go ahead with that form of Brexit or stay in the EU after all. This could attract both pro-Remain MPs (who want a referendum) and pro-soft-Brexit MPs (who want a closer relationship with the EU than what Mrs. May’s deal proposes). If neither proposal is agreed this week, then the chances of a no-deal Brexit next week will grow. I do not believe this will happen. MPs oppose it by nearly four to one. Business leaders and trade unions are appalled by the idea. It would be simultaneously catastrophic, absurd, and avoidable. I cannot believe it will happen, although I am not quite sure how it will be averted. Perhaps the nuclear option of revocation will be needed—or a national cross-party coalition government, mooted over the weekend by former Conservative prime minister John Major. Whatever happens, Britain and the EU have a fateful fortnight ahead.

How to Regulate Tech Giants: Make Them Share Data

As the world wrings its hands over how to regulate the Internet, the idea of data mobility seems to be gaining steam. Earlier this month, a UK government panel recommended allowing users to move their personal data between services—something Mark Zuckerberg endorsed—and for the big firms to make user data accessible to smaller competitors. “I believe we need a more active role for governments and regulators,” he wrote. “By updating the rules for the Internet, we can preserve what’s best about it – the freedom for people to express themselves and for entrepreneurs to build new things – while also protecting society from broader harms.” Zuckerberg’s missive was the most comprehensive the Facebook CEO has ever been on the issue of government regulation. His call comes as US federal prosecutors are reportedly probing Facebook’s data sharing deals with a number of large technology companies. The US Federal Trade Commission is said to be in talks with Facebook over a possible record fine. And European officials continue to scrutinize the company. Facebook was roundly condemned this month when it failed to stop a live stream by the suspect in the New Zealand terrorist attack that killed 50 people. The platform has also faced a litany of scandals, ranging from hate speech to privacy, and criticism over the spread of fake news, especially during national elections. “Every day, we make decisions about what speech is harmful, what constitutes political advertising, and how to prevent sophisticated cyberattacks. These are important for keeping our community safe,” he wrote. “But if we were starting from scratch, we wouldn’t ask companies to make these judgments alone.” Zuckerberg called for regulators to hold internet companies “accountable for enforcing standards on harmful content,” an idea that has served as a point of contention in the United States and other countries where social media platforms have long been immune from such legal punishments. He also mentioned Facebook’s efforts to patrol political content, much of which was done after the platform was linked with the spread of misleading information ahead of the 2016 US presidential election. “Our systems would be more effective if regulation created common standards for verifying political actors,” he said. Zuckerberg also called for a “global framework” for data privacy regulations modeled on the European Union’s General Data Protection Regulation. That law, which went into affect in May last year, threatens fines for internet companies that improperly share data about their users. His support of that regulation comes one year after details emerged about Cambridge Analytica, the now-shuttered company that was accused of trying to influence American voters using information gleaned from 50 million Facebook users. The CEO said data portability — which he described as the ability for users to move their data between social media platforms and other services — should be guaranteed.”True data portability should look more like the way people use our platform to sign into an app than the existing ways you can download an archive of your information,” he said. “But this requires clear rules about who’s responsible for protecting information when it moves between services.” It was the second op-are from a Facebook executive this weekend. Sheryl Sandberg wrote in the New Zealand Herald that the company had to get better at policing its platform. Sandberg said the company was considering restricting who can stream live video on its platform after the suspect in the New Zealand attack broadcast the massacre live on Facebook. A new paper from the Peterson Institute for International Economics echoes that recommendation. The concentration of user data in big firms like Google, Facebook, and Amazon “is at the root of a worrying power imbalance between dominant internet firms and the rest of society,” it finds. Massive data collections allow them to develop AI faster than competitors, bar new entrants, and add to the risks of consumer-data breaches. One answer, the paper suggests: Break up their data monopolies.

Iran Plays the Waiting Game, Looks East

Stung by US sanctions, which have cut Iranian oil exports by 1 million barrels per day, Iran appears content to wait out the Trump administration in the hopes that a Democratic replacement will reinstate the 2015 nuclear deal, Barbara Slavin writes for The Interpreter; it hasn’t pulled back from regional partnerships and has shown no interest in negotiating with President Trump. Iran has undoubtedly taken notice that half a dozen Democratic candidates for president have pledged to return to the Joint Comprehensive Plan of Action (JCPOA) if elected in 2020. Meanwhile, pro-JCPOA analysts at US think tanks are already providing road maps for resumed US compliance and new negotiations on a “more-for-more” agreement. (The Brookings Institution is the latest.) The Trump administration has described its policy on Iran as “maximum pressure”. But US ability to further squeeze Iran in the next 18 months is constrained by a number of factors. While sanctions have cut Iran’s oil exports by about a million barrels a day and are causing obvious pain to the Iranian population, Iran is still selling enough oil – about 1.2 million barrels – to get by and has the benefit of about $100 billion in hard currency reserves unfrozen after implementation of the JCPOA in 2016. In May, the Trump administration must decide whether to renew waivers to a half dozen countries permitted to buy Iranian oil without threat of US sanctions. A failure by the administration to renew waivers to key importers such as China and India risks spiking global oil prices at a time when Venezuelan crude exports are also restricted by US sanctions. In recent weeks, oil prices have flirted with $70 a barrel – a level that appears to worry President Donald Trump. It is also unlikely that the US will seek to punish the European Union for trying to maintain minimal economic ties with Iran. The EU has come up with a mechanism called INSTEX to facilitate trade in food and medicine with Iran. The Europeans are waiting for Iran’s parliament to pass anti-money laundering legislation before activating INSTEX later this year. The US must also balance conflicting interests with regard to Iraq, which shares a long border with Iran and relies on Iranian natural gas for nearly half its electricity. The Trump administration recently renewed waivers for Baghdad to keep importing Iranian natural gas for another three months. The last thing the US wants to see is more unrest in Iraq this summer because of electricity shortages and climate change-goosed high temperatures. On a recent visit to the Middle East, Secretary of State Mike Pompeo urged Iraq to clamp down on Iran-backed Shi’ite Muslim militias that took part in the campaign to defeat the Islamic State group. Iraq has instead put these militias on the government payroll. A US decision to declare Iran’s Revolutionary Guards as a terrorist group – reportedly being pushed by Pompeo – would put Iraq in an extremely difficult situation given the guards’ strong ties with Iraqi militias and politicians. It could also put the few thousand US troops in Iraq at greater risk. The Trump administration claims to be building a global coalition against Iran’s “malign” activities. But while many Western countries would like to see Iran pull back from regional interventions, curb its ballistic missile program and treat its own citizens better, US policy is strongly supported by only a handful of Iran’s rivals in the Middle East. In an interview on 28 March, Pompeo acknowledged: We’ve got the Gulf states and Israel sharing our view of the threat from the Islamic Republic of Iran. Ordinary Iranians are caught between their own government’s malfeasance and a hostile Washington. They are angry at their government’s poor performance, as evidenced in poor preparation for recent floods, but derive little comfort from an aggressive US propaganda campaign that seeks to blame every problem on Iranian officials. In the meantime, it’s looking East: To soften the blow, Iran has sought deeper ties with China, through a series of recent visits, including one by its parliamentary speaker, in an attempt to restart a gas-development project in which China had invested, and to spur trade and oil sales, write Masha Rouhi and Clement Therme of the International Institute for Strategic Studies. Iran was China’s fourth-largest supplier of oil and China was the top buyer of Iranian oil in 2018. But as the US moved to re-impose sanctions in November 2018, the value of Chinese imports of Iranian oil fell to US$628 million in October from US$1.78 billion in August. Imports did recover to US$1.06 billion in December – this was down to a US waiver scheme under which China and a handful of other nations are permitted to keep importing limited amounts of Iranian oil. (The intention behind the scheme is to limit Iran’s oil revenue, while averting the risk of an oil-price spike.) Nonetheless, the presence of Zangeneh, the oil minister, on this trip is a clear indication that trade and especially oil sales to China remain a priority for Iran. There are some expectations in Tehran that China could play a leading role in the further development of Iranian oil and gas resources. A decade ago, Iran gave an ultimatum to Total and Shell to complete phases 11 and 13 of South Pars, the largest gas field in the world. Uncertain that such a deal would ever come to fruition, Iran signalled that it was more likely that Asian companies, and not European ones, would ultimately develop the field. Neither deal materialised at the time, but the JCPOA paved the way for the signing of a new contract to develop South Pars in July 2017 with France’s Total, China’s CNPC International and Iran’s Petropars, a of NIOC. China’s state-owned oil company CNPC had a 30% stake in the US$4.8bn deal, but Total, which held a 50.1% interest, withdrew in 2018 as the threat of renewed US sanctions loomed large. In November 2018, it was announced that CNPC would replace Total, but CNPC in turn suspended its new deal in December, again as a result of US pressure.

Fareed’s MHI