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      Shaping the Future of Energy Collaboration

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      The cancelation of British Prime Minister Boris Johnson’s much-awaited visit to India is disappointing but unsurprising. India, a country with nearly 1.4 billion people, is currently confronting a second wave of COVID-19 infections. Though all is not lost as bilateral talks are expected to take place virtually on April 26. High on the agenda remains the launch of Roadmap 2030, which will foreseeably set the tone for India-UK relations in a post-COVID era and pave the way for a free trade agreement.

      The Missing Pieces to Avoid a Climate Disaster

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      This shared vision, forming a critical piece of the “global Britain” agenda and the UK’s post-Brexit foreign policy, is expected to lay out a framework for enhanced cooperation across a much broader set of policy pillars. One such area is climate action, which is a key part of economic growth strategies and the global green energy agenda for both countries.

      As signatories to the 2015 Paris Agreement — the international treaty on climate change — India and the UK have sizable ambitions to invest in creating cleaner and sustainable energy systems. This time last year, the United Kingdom experienced its longest coal-free run to date, a significant milestone for an economy that generated about 40% of its electricity from coal just a decade ago. While India’s green energy transition is comparatively nascent, it has made significant strides toward expanding its renewable energy capacity, especially in solar power, where it is emerging as a global leader.

      Energy Sources

      Although the two countries have vastly different energy sources and consumption patterns, this creates a unique opportunity for each economy to capitalize on its individual strengths. In offshore wind power, the UK is the largest global player, while India has only begun to scratch the surface of its wind potential. The United Kingdom’s technical prowess will play a crucial role in supporting the growth of India’s offshore wind energy — from the meteorological expertise required to evaluate wind patterns and energy production potential to joint research and development opportunities.

      The growth of electric vehicles (EVs) is another area where each market has distinct strengths. India, for example, can rely on the UK’s experience as it undertakes the massive infrastructure exercise of deploying smart charging EV stations. The UK can draw on India’s success with battery-powered three-wheelers to develop sustainable last-mile connectivity solutions. Strengthened bilateral cooperation on these fronts will not only accelerate the EV revolution globally but can also serve to contain China’s dominance in this market.

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      The Indian and British governments are closely collaborating around climate action. This is evident from recent trips to India by the UK’s Alok Sharma, the president of this year’s UN Climate Change Conference (COP26) that will take place in Glasgow, and Lord Tariq Ahmad, the minister for South Asia and the Commonwealth.

      It is, however, important to expand the scope of these engagements to include small and medium-sized enterprises (SMEs), which constitute a powerhouse of skill and experience. SMEs based in the UK can play a significant role in supporting India’s energy transition. British companies could adapt their innovations for the local market, while in turn benefiting from India’s strong manufacturing base and engineering skills. To tap into this market opportunity, governments could facilitate SME-focused trade delegations as well as joint-venture opportunities for cleantech startups.

      Green financing would play an equally important role in truly unlocking the value of such partnerships. This would be through existing bilateral instruments like the Sustainable Finance Forum and Green Growth Equity Fund or the UK’s soon-to-be-launched revenue mechanism that will mobilize private investment into carbon capture and hydrogen projects. This is especially important for India, which is looking at green hydrogen in a big way and is set to launch its first national hydrogen roadmap this year. As the UK’s carbon capture market grows, this could support India’s plans to produce hydrogen from natural gas, creating new avenues for technology sharing.

      If one thing is clear, it is that the opportunities are immense and the existing foundation is strong. With the stage set and the actors in place, Roadmap 2030 could certainly stand to benefit not just India and the UK, but the world at large in delivering a cleaner, more affordable and resilient energy future.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      What Led to Europe’s Vaccine Disaster?

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      In late December 2020, it was announced that Switzerland would start its COVID-19 vaccination campaign. Eligible persons were asked to make an appointment. Those of a particular age with certain health risks — such as diabetes, high blood pressure and allergies — were encouraged to register.

      Given my age and the fact that I suffer from pollen allergies in the spring, I filled out an online form and was informed I was eligible for a jab. So, I went through to the registration page only to be told that there were no appointments available. Two months have since passed and there are still no openings. The way things are going, I probably won’t get vaccinated before the end of summer — or perhaps by fall or Christmas.

      “Unacceptably Slow”

      Switzerland is not alone. The pace of vaccination is proceeding at a snail’s pace throughout the European Union. Just weeks ago, Hans Kluge, the World Health Organization’s director for Europe, vented his frustration, charging that the vaccine rollout in Europe was “unacceptably slow.” Germany is a key example. By the first week of April, 13% of the population had received the first dose of a COVID-19 vaccine and 5.6% had received the second dose. In comparison, around the same time, more than a third of the US adult population had received at least one dose and 20% were fully vaccinated. In the UK, which is no longer a member of the European Union, the vaccination rate was even higher.

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      In the face of heavy criticism for its alleged mishandling of the COVID-19 pandemic, Thierry Breton, the EU’s internal market commissioner, speaking on behalf of the union, went on the offensive. On French television, he defended the European Commission’s vaccine procurement strategy and affirmed that Europe had the capacity to deliver 300 to 350 million doses by the end of June. He also claimed that Europe would be able to attain “collective immunity” by July 14, France’s national day.  

      France’s premier conservative daily Le Figaro was not the least impressed. In a biting response, it characterized the EU’s vaccine procurement strategy as nothing short of a “fiasco” and frontally attacked Breton and, with him, the European Commission. Not only had Breton refused to admit “the slightest error,” continuing instead to defend his vaccine policy, but he also took French citizens for fools. Clearly, Breton’s statements had hit a raw nerve, at least in France.

      Why Is Europe Behind?

      There are a number of reasons why the European Union is trailing the US and the UK. One of the most important ones is the union itself. Its sheer size allowed the EU initially to negotiate lower prices for vaccines by buying in bulk for all 27 member states. Reducing costs, however, came at a heavy price in the form of the slow delivery of the vaccines. In addition, the European Commission had to get the green light from EU member states before it could arrive at a decision over which vaccines to purchase. As a result, the EU “ordered too few vaccines too late,” wrote Guntram Wolff, director of the Bruegel think tank in Brussels. Hesitation on the part of member states, given “the novelty of the technological approach,” led to delays in authorizing the leading vaccines, including the Pfizer/BioNTech vaccine that had been developed in Germany.   

      According to Le Canard Enchainé, a French weekly known for its investigative journalism, the UK ordered the Pfizer/BioNTech vaccine in late July 2020; the EU did so in November. The same held true for Moderna. The EU was so late that by mid-November, Stephane Bancel, the CEO of Moderna, warned that if the EU continued “dragging out negotiations to buy its promising Covid-19 vaccine,” deliveries would “slow down” since nations that had already signed agreements would get priority.

      Add to that what Spain’s premier daily El Pais has called the “AstraZeneca fiasco.” The Oxford-AstraZeneca vaccine was supposed “to power the bulk of the continent’s inoculation campaign,” according to El Pais. Instead, holdups and delays in the distribution of the vaccine, together with pauses in the vaccination campaign following reports about suspected side-effects from the Oxford-AstraZeneca jab — rare cases of blood clots — seriously jeopardized the EU’s strategy. In Germany, at the end of March, it was decided that AstraZeneca would no longer be administered to people under the age of 60. Denmark has ceased administering the vaccine completely.

      By now, the fallout of a strategy that was more concerned with saving money than potentially saving lives is obvious to all — as is the damage done to the image of the European Union. As Mark Leonard, the director of the European Council on Foreign Relations, recently put it, the EU’s vaccine crisis “has been catastrophic for the reputation of the European Union.” Ironically enough, this is the very same Leonard who, in late December, celebrated “the return of faith in government.” The pandemic, he stated, had “reminded everyone just how valuable competent public administration can be.” Three months later, his optimism — “five cheers for 2021,” to use his words — had turned into gloom and doom. And for good reason, given the unfolding of the full extent of the vaccination disaster.

      The results of a recent survey are stark. In early March, around 40% of respondents in France, Germany and Italy thought the pandemic had weakened the “case for the EU.” When asked whether the EU had helped their country to confront the pandemic, a third of respondents in France and Italy and more than half in Germany answered “no.” At the same time, however, member states have not fared much better. In response to the question of whether their country was taking the right measures to combat COVID-19, almost 60% of French respondents, nearly half of Germans and more than 40% of Italians answered in the negative.

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      This is the crux of the matter. As time has passed and vaccines have started to be delivered, it has become increasingly difficult for individual countries to blame the European Union for their own failures and shortcomings in securing and delivering the vaccine to their populations — or for the reluctance of citizens to get vaccinated.

      In late March, the European Centre for Disease Prevention and Control published a report on the vaccine rollout in the EU. By far, the most important challenge facing most member states was the limited supply of vaccines and frequent changes in the timing of deliveries from suppliers, “which can be unpredictable and can significantly affect the planning and efficiency of the rollout.” Other challenges included problems with logistics, limited personnel to administer the vaccines, shortage of equipment such as syringes and special needles, and issues related to communication such as information about the vaccine and scheduling appointments.

      Is the EU Goal Realistic?

      Under the circumstances, the EU’s stated goal of having at least 70% of the population vaccinated by the summer appears to be an increasingly distant prospect. Or perhaps not: It depends on whether individual countries — particularly France, Germany, Italy and Spain — will get their act together and move to “warp speed.”

      Some countries appear to be prepared to do so. In Spain, health authorities expect a significant acceleration in the vaccination campaign over the coming weeks. There is growing confidence that the country will meet the 70% mark by the start of summer. Even in Germany, whose blundering performance during the past several weeks made international headlines, experts are optimistic that the country will reach the target.

      More often than not, the problem is not necessarily the supply of vaccines, but difficulties in getting target groups vaccinated. This is, at least in part, a result of communication infrastructure, which in some cases are far behind the technological frontier. Take the case of Switzerland, which is not a member of the EU. In late March, Geneva’s Le Temps alerted its readers that when it comes to the digitalization of its health system, Switzerland was in the “Middle Ages.” Instead of using the internet, Swiss health authorities sent faxes to communicate the number of new infections. When it comes to digitalization, the author noted, Switzerland, which prided itself as the world champion in innovation, was “full of fear” if not outright “recalcitrant” to adopt new technologies. The consequences were fatal not only with regard to dealing with the pandemic, but also with respect to the country’s international competitiveness.

      The situation has not been any different in Germany. Earlier this year, when the vaccination campaign got going, public authorities sought to inform the most vulnerable groups — those older than 80 — that they could get vaccinated. Yet they had no way of finding out who was in that age group. So, they guessed based on first names. Katharina, yes; Angelique, no. This is German efficiency in 2021. Or, as a leading German business magazine put it, if “your name is Fritz or Adolf, you will (perhaps) be vaccinated.” And this in Western Europe’s biggest economy.

      Better Preparation for Crises

      The COVID-19 pandemic has not only brutally exposed Europe’s unpreparedness to confront a major crisis, but it has also shown the parochial state of mind of significant parts of the European population.  Much has been written over the past year about American science skepticism and conspiracy theories, held partly responsible for the toll that COVID-19 has taken on the US population. Yet Europeans are hardly any better. Not only have parts of the European population eagerly adopted even the craziest conspiracy theories, such as QAnon, but they have also shown high levels of skepticism with respect to COVID-19 vaccines, despite scientific assurances of their efficacy and safety.

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      Again, take the case of Switzerland. In December 2020, only around 56% of the population indicated they would get vaccinated. The rest expressed great reservation, despite the fact that the survey stated that the vaccine was deemed safe and effective. In the meantime, as the pandemic has continued with no end in sight, there are indications that the mood has changed. In Germany, only two-thirds of respondents indicated they would get vaccinated when asked in June 2020. By the end of March this year, that number had increased to over 70%. These developments are encouraging. 

      Not only have most European countries finally managed to live up to the challenge, but their populations appear to have realized that COVID-19 is worse than the flu, that the pandemic poses a fundamental threat to life as we know it, and that the only way to get back to “normality is to get vaccinated — not only for oneself, but also for everybody else. In the old days, this was called “civic culture.” With the rise of populism in advanced liberal democracies, civic culture more often than not has gone out the window, replaced by a culture centered upon “me, me, me.”

      Yet the fact is that this pandemic is only the beginning. The next big challenge is confronting climate change. It is to be hoped that Europeans will be better prepared than they have while confronting the coronavirus.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Athletes Shake Up Sports Governance

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      Sports governance worldwide has had its legs knocked out from under it. Yet national and international sports administrators are slow in realizing the magnitude of what has hit them. Tectonic plates underlying the guiding principle that sports and politics are unrelated have shifted, driven by a struggle against racism and a quest for human rights and social justice.

      The NBA Is Conflicted Over National Symbols

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      The principle was repeatedly challenged over the last year by athletes and businesses forcing national and international sports federations to either support anti-racist protest or, at the very least, refrain from penalizing those who use their sport to oppose racism and promote human rights and social justice — acts that are political by definition. The assault on what is a convenient fiction that sports and politics do not mix started in the US. This was not only the result of Black Lives Matter protests on US streets, but also the fact that, in contrast to the fan-club relationship in most of the world, American sports clubs and associations see fans as clients — and the client is king.

      From Football to F1

      The assault moved to Europe in the last month with the national football teams of Norway, Germany and the Netherlands wearing T-shirts during qualifiers for the 2022 FIFA World Cup that supported human rights and change. The European sides added their voices to perennial criticism of migrant workers’ rights in Qatar, the host of next year’s World Cup. Gareth Southgate, the manager of the English national team, said the Football Association was discussing migrant rights in the Gulf state with Amnesty International.

      While Qatar is the focus in Europe, greater sensitivity to human rights appears to be moving beyond. Formula One driver Lewis Hamilton told a news conference in Bahrain ahead of this season’s opening Grand Prix that there “are issues all around the world, but I do not think we should be going to these countries and just ignoring what is happening in those places, arriving, having a great time and then leave.” Hamilton has been prominent in speaking out against racial injustice and social inequality since the National Football League in the US endorsed the Black Lives Matter movement and players taking the knee during the playing of the American national anthem in protest against racism.

      Embed from Getty Images

      In a dramatic break with its ban on “any political, religious or personal slogans, statements or images” on the pitch, FIFA, the governing body of world football, said it would not open disciplinary proceedings against the European players who wore the T-shirts. “FIFA believes in the freedom of speech and in the power of football as a force for good,” a spokesperson said.

      The statement constituted an implicit acknowledgment that standing up for human rights and social justice was inherently political. It raises the question of how FIFA will reconcile its stand on human rights with its statutory ban on political expression. It makes maintaining the fiction of a separation between politics and sports ever more difficult to defend. It also opens the door to a debate on how the inseparable relationship that joins sports and politics at the hip like Siamese twins should be regulated.

      Georgia’s Voting Law

      Signaling that a flood barrier may have collapsed, Major League Baseball this month said it would be moving its 2021 All-Star Game out of Atlanta in response to a new law in the US state of Georgia that threatens to potentially restrict voting access for people of color. In a shot across the bow to FIFA and other international sports associations, major companies headquartered in Georgia, including Coca-Cola, Delta Airlines and Home Depot, adopted political positions in their condemnation of the Georgia voting law.

      The greater assertiveness of athletes and corporations in speaking out for fundamental rights and against racism and discrimination will make it increasingly difficult for sports associations to uphold the fiction of a separation between politics and sports. The willingness of FIFA, the US Olympic and Paralympic Committee (USOPC), and other national and international associations to look the other way when athletes take their support for rights and social justice to the sports arena has let the genie out of the bottle. It has sawed off the legs of the FIFA principle that players’ “equipment must not have any political, religious or personal slogans.”

      Already, the US committee has said it would not sanction American athletes who choose to raise their fists or kneel on the podium at this July’s Tokyo Olympic Games as well as future tournaments. The decision puts the USOPC at odds with the International Olympic Committee’s (IOC) strict rule against political protest. The IOC suspended and banned US medalists Tommie Smith and John Carlos after the sprinters raised their fists on the podium at the 1968 Mexico City Olympics to protest racial inequality in the United States.

      Regulation

      Acknowledging the incestuous relationship between sports and politics will ultimately require a charter or code of conduct that regulates it and introduces some form of independent oversight. This could be something akin to the supervision of banking systems or the regulation of the water sector in Britain, which, alongside the United States, holds privatized water as an asset.

      Human rights and social justice have emerged as monkey wrenches that could shatter the myth of a separation between sports and politics. If athletes take their protests to the Tokyo Olympics and the 2022 World Cup, the myth would sustain a significant body blow. In December 2020, a statement by US athletes seeking changes to the USOPC’s rule banning protest at sporting events said: “Prohibiting athletes to freely express their views during the Games, particularly those from historically underrepresented and minoritized groups, contributes to the dehumanization of athletes that is at odds with key Olympic and Paralympic values.”

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      EU Concern Over Ukraine Is Not Enough

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      Hostilities between Ukraine and Russia reached an alarming level last week when further Russian troops were deployed on the Ukrainian border. Despite a statement from the Kremlin describing the act as “not threatening,” Kyiv accused Moscow of moving thousands of soldiers to its northern and eastern borders and on the Russian-annexed Crimean Peninsula to create an intimidating atmosphere in violation of the Minsk agreements and the ceasefire in the Donbass region of eastern Ukraine. The Russian Foreign Ministry claimed it is Kyiv and NATO countries that are increasing their armed forces in Ukraine and the Black Sea close to Russia’s borders. 

      Nevertheless, the Russian Federation is following its usual scheme and is ready to seize any opportunity that arises. There may be three possible reasons behind these new developments: 1) Moscow wants to send a message to the US administration after recent statements regarding President Vladimir Putin; 2) the Russians are seeking a pretext to install their “peacekeepers” in Donetsk and Luhansk in eastern Ukraine; or 3) the Kremlin wants to use the water crisis in Crimea to intervene and build a corridor through the Donbass region.

      Assessing the Tensions Between Ukraine and Russia

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      There might be other drivers, such as the ongoing power struggle inside the Russian administration, despite the fact that Putin signed a law that would allow him to stay in office until 2036. A manufactured external threat to Russian citizens — Russian passports have been issued to many Ukrainians living in the two self-declared people’s republics of Donetsk and Luhansk — would help deflect attention from internal economic problems, which have only worsened during the COVID-19 pandemic.

      In February, Ukrainian President Volodymyr Zelensky shut down three television channels linked to Ukrainian oligarch Viktor Medvedchuk, which may have contributed to the latest tension. Not only does Medvedchuk have personal ties to Putin, but the stations have also broadcast pro-Russian propaganda to the Ukrainian people.

      In the end, the cause can be left to Kremlinologists to decipher. Yet what is clear is that Putin has proved to be ready to act whenever there is a chance, and he has plenty of opportunities to create an event to trigger action. Ultimately, it does not matter why. What matters is that other regional actors are now using peaceful means to prevent a further escalation between Russia and Ukraine.

      Is Dialogue Enough?

      The US and the European Union have declared their support for Kyiv. Josep Borrell, the EU foreign policy chief and vice-president of the European Commission, expressed concern over the latest developments. The European Parliament also released a statement in which it reiterates that Moscow must reduce tensions by ending its military buildup in and close to Ukrainian territory. This is certainly not enough, but what are the options?

      Embed from Getty Images

      Engaging in dialogue is fine, but it seems the meaning of it has been forgotten — that is, to listen to each other and try to understand. When there is an argument between parties, there should be a general assumption that the other person could be right. It is not sufficient to only listen in order to respond and get one’s own points across. It should also not be disregarded that there is a civil society in Russia. When there is a dispute with the Kremlin, it does not entail the whole population.

      What is important is that language matters, words become actions, and actions have consequences — and this could lead to a dangerous downward spiral. Nevertheless, there must also be some clear lines established. This tit-for-tat blame game that has dominated the discourse for decades has to stop. This is not a reasonable discussion. The demands by Zelensky to accelerate Ukraine’s membership in NATO are not helpful, but nor is a meeting between Russia, Germany and France on the situation in Ukraine without including representatives from Kyiv.

      Diplomatic relations among regional actors have been strained for years but deteriorated further over recent months. In February, Russian Foreign Minister Sergey Lavrov stated in an interview about relations between Russia and the European Union that “if you want peace, be prepared for war.” In the current political climate, this sounds far more threatening than it might have a few months ago. At that time, the German Foreign Ministry rightly called the comments “disconcerting and incomprehensible,” though Lavrov is known for his controversial statements.

      Nevertheless, this has marked a new low in the EU–Russia relations, and it seems that things could get worse. Expelling diplomats of EU member states while Borrell, the top European diplomat, was in Moscow is just power play. Despite Lavrov being in office for 17 years, the European Union has never found a way to reach a consensus on how to respond to his actions. In 2004, Central and Eastern European countries had just joined the EU, which was and still is a big success, but the necessary reforms in the institutional setup to be able to handle Lavrov have still not been implemented.

      What is even worse, the lack of capabilities to anticipate consequences has forever been a weak point in Brussels. Negotiations for an association agreement between the EU and Ukraine effectively led to the Russian annexation of Crimea in 2014. Politics is much more complicated and one action does not necessarily lead to a specific outcome, but there is certainly a possibility of a butterfly effect.

      Better Preparation

      In order to be better prepared, member states need to pool resources together and ultimately transfer sovereignty to the EU when it comes to foreign policy. Otherwise, the divide-and-conquer approach by Russia will continue. After a rather humiliating meeting with Lavrov in February, Borrell said, “As ever, it will be for member states to decide the next steps, and yes, these could include sanctions.” This is not a language that the Kremlin understands.

      The German government, for instance, has been reluctant when it comes to imposing sanctions. On the one hand, this is due to Berlin’s history with the Russian Federation, but to a lesser extent, it is because of the Nord Stream 2, a gas pipeline linking Russia and Germany via the Baltic Sea. Nevertheless, this would be an opportunity to act as the pipeline also threatens Ukraine’s energy supply and might open another opportunity to act for the Kremlin. Yet there is a very good argument against sanctions: They would hurt the general population in Russia, which would further alienate the people who, in turn, would rally around the flag.

      Nevertheless, there are other ways to respond, ideally targeting the circles close to the Kremlin. Suspending Russia from the SWIFT global financial network could also be an option; calls to do so first emerged in 2014 after Russia’s actions in Ukraine. Yet this might lead to a fragmentation of the international financial system; Russian authorities have already backed international use of its alternative payment network.

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      The biggest danger for the Putin regime would be if the majority of Russians understood that it is possible to live in a liberal democracy. This is why a closer relationship between Ukraine and the EU is so dangerous for the Kremlin. The current escalation is not about the expansion of Russia’s borders or preserving traditional values, as often spun by Russian media and Moscow. This is a facade that masks the fact that if people were given the possibility of improving their lives without the strongman in the Kremlin, the Putin system would become irrelevant.

      Sanctions on Russia will most likely not lead to this outcome. There will not be a democratic revolution on the streets — this can only be through a gradual process. The question is: Will Western democracy survive long enough to see that change coming in order to still be a model?

      Therefore, the EU has to send a clear and unified message to prevent further escalation and not only react or be taken by surprise, as was the case in 2014. Ideally, this would also strengthen transatlantic relations by finding a common approach to the evolving situation. After the EU’s top representatives suffered political embarrassment in Moscow and Ankara, it would be even more necessary to send a strong signal to Russia.

      Being concerned is not enough — neither by institutions in Brussels, nor by EU member states. There is a need to be better prepared for certain scenarios. Repeating the same mistakes will be unforgivable for the region and the future of the European Union itself.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      The Risk of a No-Deal Brexit Remains

      by

      The risk that we will wake up on May 1 to find we have a no-deal Brexit after all has not disappeared. The deadline for the ratification by the European Parliament of the trade deal between the European Union and the United Kingdom was due to be February 28. But Parliament postponed the deadline to April 30. It did this because it felt it could not trust the UK to implement the Trade and Cooperation Agreement (TCA) — as the deal is formally known as — properly and as agreed and ratified. 

      This distrust arose because the implementation of the Ireland and Northern Ireland Protocol of the withdrawal agreement — the treaty that took the UK out of the EU — had been unilaterally changed by the British government. If a party to an international agreement takes it upon itself to unilaterally alter a deal, the whole basis of international agreements with that party disappears.

      Brexit Trade Deal Brings Temporary, If Not Lasting, Relief

      READ MORE

      The matters in dispute between the UK and the EU — the protocol and COVID-19 vaccines — remain unresolved. The European Union is taking the United Kingdom to court over the protocol, but the court is unlikely to decide anything before the new deadline of April 30.

      In the normal course of events, the TCA between the UK and the EU would be discussed in the relevant committee of the European Parliament, before coming to the plenary session of Parliament for ratification. The next meeting of the Committee on International Trade is due to take place on April 14-15, and the agenda for the meeting has been published. It includes a discussion on the enforcement of trade agreements, the general system of preferences and, significantly, trade-related aspects of the COVID-19 pandemic. It makes no mention of the TCA with the UK.

      Trade-related aspects of the pandemic will inevitably include a discussion on vaccine protectionism, which is a highly contentious issue between the EU and the UK that has poisoned relations and led to bitter commentary in the media. The fact that the committee has not included a discussion of the TCA with the UK on its agenda for what may well be the only meeting it will have before the April deadline is potentially very significant.

      Ratifying the Trade Deal

      The TCA is a 1,246-page document, and its contents, if ratified, will take precedence over EU law. To ratify such an agreement without proper scrutiny in the relevant committees could be seen as a dereliction of the European Parliament’s responsibility of scrutiny. We should not forget the scrutiny that was applied to the much more modest EU trade agreement with Canada. The same goes for the deal with Mercosur states (Argentina, Brazil, Paraguay and Uruguay).

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      Furthermore, the TCA would, if ratified, set up a network of committees to oversee its implementation. These will meet in private and their work will diminish the ongoing oversight by the European Parliament of a host of issues affecting all 27 EU member states. The TCA also contains a system of dispute-resolution mechanisms that will quickly be overwhelmed by work. The TCA has many items of unfinished business, on which the European Parliament will want to express a view. It is hard to see how any of this can be done before the end of April.

      The UK government led by Prime Minister Boris Johnson has adopted a deliberately confrontational style in its negotiations with the European Union. The more rows there are, the happier the support base that Johnson is seeking to rally for his Conservative Party. Johnson’s European strategy has always been about electoral politics, not economic performance. This has led to almost complete confusion between the British government and the EU.

      If the European Parliament ratifies the TCA without there having been seen to be a satisfactory outcome to the EU-UK negotiations about the Ireland and Northern Ireland Protocol and over the export of vaccines, it will be a political setback for Parliament and a source of immense satisfaction for Johnson.

      Yet one should never underestimate the role emotion can play in politics. The entire Brexit saga is a story of repeated triumphs of emotion over reason — and the European Parliament is not immune to this ailment. Boris Johnson could be pushing his luck a bit far this time.

      *[A version of this article was posted on John Bruton’s blog.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Germany’s Refugees Face a Future Without Angela Merkel

      by

      In 2015, the European refugee crisis awoke Germans from a long and comforting slumber that Angela Merkel had lulled them into with her political style. The term “asymmetric demobilization” came to be known as a way of describing the German chancellor’s shrewd strategy of sitting on the fence and thereby winning elections. Merkel weakened her political competitors by avoiding controversial issues and, in doing so, choking off debate. Simultaneously, she adopted popular policy stances of her opponents and demobilized their potential voters.

      Angela Merkel: A Retrospective

      READ MORE

      This opportunistic strategy, with the retention of power as the main objective, was devoid of a vision and an ideological foundation. The German magazine Der Freitag put it succinctly back in 2012: “She is pragmatic and non-ideological — like many Germans. Only what the Chancellor stands for, no one knows.”

      Merkel’s reserved and pragmatic governing style hardly left room for symbolism. One of the few symbols associated with her was the famous diamond hand gesture, known as the “Merkel rhombus.” During the refugee crisis, Merkel abruptly left her trodden path of asymmetric demobilization. The symbolism and emotional outbursts caused by her course of action and its consequences astounded not only the German public, but it might have surprised the chancellor herself. 

      Driven by Deep Conviction

      At the height of the crisis, her deliberative rhetoric yielded to impassioned pleas for a liberal, open-minded Germany. Merkel’s most famous but polarizing catchphrase, “We can do this,” rallied Germans behind the “decision of her lifetime” to grant entry to hundreds of thousands of refugees and migrants. Wearing her heart on her sleeve, Merkel responded to critics in September 2015, saying, “If we now have to apologize for showing a friendly face in emergency situations, then this is not my country.” 

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      Sigmar Gabriel, a former leader of the Social Democratic Party (SPD) and the federal minister for economic affairs and energy at the time of the crisis, recalls Merkel’s conviction-driven view on the refugee influx. While debating the potential closure of German borders, Merkel replied, “But promise me one thing, Mr. Gabriel, we won’t build fences.” Looking back, Gabriel reflects, “I can still see her shaking her head … I remember thinking, this is not a superficial position, it was deep inside her.” Merkel had grown up during the Cold War in East Germany and had considered fleeing a dictatorial regime and repression herself.

      For that rare occasion, Merkel granted a glimpse into her convictions and let emotion visibly influence her actions. Unsurprisingly, this led to a reciprocation in emotional reactions. Not only did it expose her to hate from the (far) right that blossomed due to her decision, but it also resulted in symbolic affection — the likes she had rarely received before. Refugees in Budapest, the Hungarian capital, with their sights set on their final destination, chanted, “Germany! Germany!” Others posted love letters on social media after the news broke that Germany would temporarily suspend the European Union’s Dublin Regulation, which “states that asylum seekers must have their applications processed in the EU country in which they first arrive.” A selfie between Syrian refugee Anas Modamani and Merkel went viral.

      Mother Merkel and the Asylum Row

      More than five years later, Merkel’s tenure as chancellor is drawing to a close this fall as German voters head to the polls. In October 2018, most refugees in Germany met the news of her resignation as party leader and decision not to stand in the next election with disappointment and gratitude.

      Aras Bacho arrived in Germany from Syria in August 2015 and expressed his thoughts on her retirement from politics in passionate and sentimental — hence not typically German — terms. In an article on Vice, he wrote: “I am very sad about Merkel’s decision. The woman who gave me hope and future wants to leave? This is unimaginable, and I think other candidates for the chancellorship are unqualified. I hope that I will get up tomorrow and that it was all just a dream. For me, Germany without Merkel is like bread without butter.” He added that for refugees, “she is like a mother who looks after her children. Many refugees, including myself, have found a great love in Merkel.” 

      Bacho also touched upon concerns about a future in Germany without Merkel, who, according to him, acted “like a shield” in an increasingly polarized society. “Another chancellor would never have sacrificed herself for people who fled the war. She sacrificed her future for us, for which Merkel is hated … by a minority that is against us,” he said.

      If Merkel was a shield for refugees, that shield started to crack during her time in office. Soon after her controversial decision to open Germany’s borders, public support for her migration policies dwindled. As a result, the government sped up deportations of migrants who had little chance of being recognized as refugees in Germany. Yet this wasn’t enough for the Christian Social Union (CSU), the sister party of Merkel’s Christian Democratic Union (CDU).

      During the infamous “asylum row” in 2018, the CSU’s party leader, Horst Seehofer, demanded an even tougher stance on migration by turning back asylum seekers at the German border. A rebellion was on hand with the government and chancellor’s future on the line. A bruised Angela Merkel survived the onslaught but had to surrender large parts of her liberal approach to migration in an attempt to cling to power. As intra-party and public opinion turned against her, Merkel also refrained from her buoyant catchphrase, “We can do it!” Instead, she appeased skeptical supporters during the general election campaign in 2017 by saying, “A year like that cannot and should not ever happen again.”

      Refugees Now Live in a Split German Society

      Merkel changed the societal face of Germany by allowing an influx of 890,000 refugees and migrants in 2015 alone. By setting aside her usual cautious style of the politics of consensus and power retention, she exposed herself to two opposing sentiments.

      Embed from Getty Images

      On the one hand, the adulation that refugees had for Merkel seems unrelenting. They have settled in Germany, leaving behind political turmoil in their home countries after often arduous journeys. Statistics show steady progress regarding their integration into German society. About 50% of refugees who fled to Germany since 2015 have found a job. Now, most live in their own apartments. In schools, children and young people from refugee families usually integrate well. According to a study by the Federal Office for Migration and Refugees, conducted annually since 2016, refugees are almost as happy with life as Germans themselves.

      On the other hand, Merkel left behind a split society in which the once predominant “climate of welcome” has subsided. A majority of Germans now reject her refugee policies. Refugees and migrants often have to bear the wrath directed against Merkel and her policies. The crisis and its consequences have led to increased radical-right violence against refugees and the radicalization of right-wing extremist groups. As a result, the Alternative for Germany (AfD) established itself as a far-right party, serving as a mouthpiece for the radical right.

      The refugee crisis has thrown German society out of balance, bringing to the surface hidden feelings of injustice and loss of trust in democratic institutions. The COVID-19 pandemic has exacerbated these feelings. Reminiscent of the Capitol Hill insurrection in Washington on January 6, a group of right-wing extremists and conspiracy theorists attempted to storm the German parliament in August 2020. Similar to the US, German democracy has edged closer to a tipping point.

      That poses a particular danger to the vulnerable group of refugees. Their fears of having to endure the same instability they had fled are rising. Angela Merkel’s unprecedented handling of the refugee crisis might be justifiably disputable, but protecting refugees by taking a firm stand against extremism should not.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Fair Observer Scoop: Putin Engineered the Blockage of the Suez Canal

      by

      MSNBC’s star journalist Rachel Maddow was ready to break the news but hesitated when certain insiders worried that, if the accusation was not borne out by verifiable facts, the reaction might further damage the reputation of a news organization whose ratings have been plummeting for the past two months. This lapse has enabled Fair Observer to provide the scoop that Maddow was on the verge of making before being pulled back by MSNBC’s marketing department. Maddow did mention a rumor that Russia could have been involved, warning that if this could be confirmed it would be seen as “a new variation in Putin’s playbook.” But with no substantial evidence to present or names to cite, she went on to focus on the lurid details of Representative Matt Gaetz’s sex scandal.

      Credible witnesses with access to the Kremlin have revealed to The Daily Devil’s Dictionary that the sandstorm credited with disturbing the navigation of the Ever Given — the Japanese container ship that ended up blocking the Suez Canal — was the result of a covert operation by Russia’s weather modification team. Russian President Vladimir Putin’s aim was to damage the credibility of traditional trade routes, sowing doubt about the West’s ability to manage global commerce as the US prepares to disengage militarily from the Middle East. The message is clear. Russia is ready to mount similar operations in Syria, Iraq and even Egypt and Libya to further weaken the waning US influence in the region.

      Mohammed bin Salman’s Neom: A Case of Giga-Narcissism

      READ MORE

      But there is another dimension of this geopolitical struggle whose implications will stretch out over decades. Thanks to global warming, which the Russians officially blame the US for encouraging, Putin has been nourishing his plan to turn the increasingly navigable Arctic Ocean that stretches across Russia’s northern coastline into the obvious choice for most East-West trade. Thanks to the melting ice, Russia will soon be in a position to monitor and control as much as 60% of intercontinental trade in the decade to come.

      Fair Observer’s scoop resulted from a cryptic remark spoken by a Russian official and overheard by CNN’s correspondent at a lunch table at the Kremlin. One of Putin’s closest aides, Nikolai Stavrogin, sat down with the intention of explaining to New York Times reporter Shawn McDermott a major shift in geopolitical history that would soon become apparent. The past, he claimed, was being undone in front of our very eyes. When asked for a detailed explanation, Stavrogin leaned back in his chair and slowly articulated this enigmatic thought: “Ice melts and ships float. It is ever a given that when water evaporates stillness reigns.”

      Today’s Daily Devil’s Dictionary definition:

      Evaporate:

      A verb used alternatively to describe the transformation of water under the effect of heat and the fate of many news stories left in the hands of journalists who refuse to think below the surface

      Contextual Note

      CNN reporter Elizabeth Prynne, who was just near enough to overhear Stavrogin utter his enigmatic statement, noted the words “ever” and “given” in his arcane message and suspected the remark might have a deeper meaning. Convinced that it needed to be followed up, she asked her colleague at The NY Times for some background. The Times reporter told her that Stavrogin’s observation concerned climate change, a purely scientific matter. He had other matters to deal with and would refer this one to his scientific colleagues, always eager to speculate about the effects of global warming.

      Prynne began asking around what Stavrogin’s remark might mean. She mentioned it to a friend who happens to be a Fair Observer contributor, who then informed The Daily Devil’s Dictionary. We immediately understood that this did indeed refer to the phenomenon of global warming. But, as Prynne suspected, it concerned the geopolitical impact of climate change. Thanks to the ever more apparent annual Arctic thaw that has opened up previously inaccessible trade routes, Russia is certain to obtain a growing strategic advantage. 

      Thanks to another of our relations, we were then able to reach Stavrogin himself who, without offering any new details, confirmed that his remarks concerned an impending revolution in maritime commerce. He also dropped the telling hint that the Kremlin’s weather experts had the knowledge and expertise to cause the stranding of an oversized ship in the Suez Canal. He refused to confirm that the operation was actually carried out by the Russians, but his boast that they were capable of such an operation left no doubt in our minds.

      Historical Note

      Fair Observer is not in the business of seeking or publishing scoops. But when one lands in our lap, we will not hesitate to disseminate it, especially at this crucial moment of history on April 1, 2021. The Daily Devil’s Dictionary published one of the first warnings concerning the suspicious disappearance of journalist Jamal Khashoggi in early October 2018. We pointed to the nature and the probable author of the crime well before the mainstream news began reporting Saudi Crown Prince Mohammed bin Salman’s possible involvement in Khashoggi’s disappearance.

      Embed from Getty Images

      We have now established the fact that Vladimir Putin effectively intervened in beaching the Ever Given, an incident that for a full week dramatically disturbed global trade by blocking the Suez Canal. This is a major story that neither MSNBC nor CNN have shown the temerity to reveal. Proud of our scoop, we find ourselves in the embarrassing position of having to backtrack on our own recent and repeated claims that The New York Times has been pathologically obsessed with blaming Russia for every crime and misdemeanor on the international stage, or even in domestic politics in the US. We hope the Gray Lady will accept our belated apologies.

      This incident that came to light through such indirect means tells us that, contrary to our own claims, The Times’ executive editor, Dean Baquet, was in the end justified in pursuing beyond reason the paper’s campaign against Russia. After what has now become clear about Putin’s intervention in the Suez Canal, what rational person could possibly doubt what The Times has been claiming for the past five years — that Putin colluded with Donald Trump and personally played the decisive role by tampering in the 2016 US presidential election to ensure the defeat of Hillary Clinton?

      It was barely a week ago that the sandstorm occurred leading to the blockage of the Suez Canal. Some will say that so soon after the event, with the facts still difficult to pin down, that this first day of April is not the appropriate time to claim the truth of such allegations. But we proudly proclaim that April 1 is a far more appropriate moment than the other 364 days of the years when MSNBC, The New York Times, CNN, The Washington Post and others have consistently pushed a similar story, and that for more than five years.

      *[Humorists have always been attracted to the temptation of reporting patently fake news on April Fools’ Day. In our turn, we have succumbed. Our apologies to MSNBC, CNN and The New York Times for doing what they would never dare to do: print news that isn’t true. As Jonathan Swift might describe it, they are the Houyhnhnms, who “cannot say a thing which is not” and we are the Yahoos, whom he describes as “restive and indocible, mischievous and malicious.” (Disclaimer: we have no legal connection to Yahoo!) Read more of The Daily Devil’s Dictionary on Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      A New European Financial Landscape Is Emerging

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      The United Kingdom’s exit from the European single market on January 1 has sent trade in goods plummeting amid much confusion. By contrast, Brexit was carried out in an orderly manner in the financial sector, despite significant movement of trading in shares and derivatives away from the City of London.

      The Brexit Deal Presents Opportunities for a New Partnership

      READ MORE

      After five years of radical uncertainty, it has become clear that the European Union and the United Kingdom will be taking separate paths on financial regulations — a financial “decoupling” that means a significant loss of business for the City. Whether the EU financial sector can gain much of what London loses will depend on the EU’s willingness to embrace further financial market integration.

      Smart Sequencing Ensured an Orderly Brexit

      As with the Y2K problem, the Brexit transition could have gone worse. It took more than luck to avoid financial instability along the way.

      First, financial firms on both sides of the English Channel (and of the Irish Sea) worked hard and were able to preempt most of the operational challenges.

      Embed from Getty Images

      Second, despite all the recurring high-stakes drama between the UK government and the European Commission, the technical cooperation between the authorities actually in charge of financial stability, primarily the Bank of England and the European Central Bank (ECB), appears to have run smoothly.

      Third, the negotiators phased the process in a smart way. The Brexit Withdrawal Agreement of January 2020 helped reduce uncertainty by ensuring that the UK government would meet its financial obligations to the EU, avoiding what would have been akin to selective default. That agreement kept the United Kingdom in the single market during the transition period beyond the country’s formal exit from the European Union on January 31, 2020. It also set a late-June deadline for the British government to extend the transition period beyond December 31, 2020. As London decided not to do so, that left six months of effective preparation.

      To be sure, whether an EU-UK Trade and Cooperation Agreement (TCA) would be concluded remained unknown until late December. But that mattered comparatively little for financial services, since trade agreements typically do not cover them much. By one count, the 1,259-page TCA (which is still unratified by the European Union) contains only six pages relevant for the financial sector.

      The resulting legal environment for financial services between the European Union and the United Kingdom is unlikely to change much any time soon. Contrary to occasional portrayals in the United Kingdom, no bilateral negotiations on financial services are going on, except for a memorandum of understanding expected this month that is not expected to bind the parties on substance.

      From the EU perspective, the United Kingdom is now a “third country,” in other words an offshore financial center, following decades of onshore status. UK-registered financial firms have lost the right, or “passport,” to offer their services seamlessly anywhere in the EU single market. From a regulatory standpoint, they have no better access to that market than their peers in other third nations such as Japan, Singapore or the United States.

      Equivalence Status for UK Financial Market Segments

      Some segments of the financial sector in these other third countries actually have better single market access than British ones, because they are covered by a category in EU law allowing direct service provision by firms under a regulatory framework deemed “equivalent” to that in the European Union. The equivalence decision is at the European Commission’s discretion, even though it is based on a technical assessment. As a privilege and not a right, equivalence can be revoked on short notice.

      So far, the European Commission has not granted the UK any such segment-specific equivalence, except in a time-limited manner for securities depositories until mid-2021 and clearing services until mid-2022. For the moment, the commission appears to be leaning against making the latter permanent. In most other market segments, the commission will not likely grant equivalence to the United Kingdom in the foreseeable future. This may appear inconsistent with the fact that almost all current UK regulations stem from the existing EU body of law. But the UK authorities (including the Bank of England) have declined to commit to keeping that alignment intact.

      Embed from Getty Images

      The commission’s inclination to reduce EU dependence on the City of London is understandable. No comparable dependence on an offshore financial center has existed anywhere in recent financial history. Such dependence entails financial stability risk. In a crisis, UK authorities would not necessarily respond in a way that preserves vital EU interests. Think of the Icelandic crisis of 2008, when Reykjavik protected the failing banks’ domestic depositors but not foreign ones. It is hardly absurd for the European Union to try to reduce such a risk, even if — as appears to happen with derivatives — some of the activity migrates from the United Kingdom to the United States or other third countries as a consequence, and not to the European Union.

      At the same time, the argument that keeping EU liquidity pooled in London is more efficient than any alternative is unpersuasive given the European Union’s own vast size. In addition, the European Commission also follows mercantilist impulses to lure activity away from London, even though these generally do not make economic sense. Added up, these factors provide little incentive for the commission to grant equivalence status to more UK financial market segments, unless some other high-level political motives come into play. None are apparent right now.

      The UK Is Unlikely to Regain Lost Advantage

      How the European Union and the United Kingdom will decouple will not be uniform across all parts of the financial system. Regulatory competition between them may become a “race to the bottom” or “to the top,” depending on market segments and the circumstances of the moment, without a uniform pattern. In any case, such labels are more a matter of judgment in financial regulation than in, say, tax competition.

      In some areas, the European Union will be laxer, while in others, it will be the United Kingdom, as is presently the case between the EU and the US. For example, the European Union is more demanding than the United States on curbing bankers’ compensation but easier when it comes to enforcing securities laws or setting capital requirements for banks. At least some forthcoming UK financial regulatory decisions may be aimed at keeping or attracting financial institutions in London, but they are still not likely to offset the loss of passport to the EU single market.

      All these permutations suggest that the medium-term outlook for the City of London is unpromising, although the COVID-19 situation makes all quantitative observations more difficult to interpret. Once an onshore financial center for the entire EU single market, and a competitive offshore center for the rest of the world, the City has been reduced to an onshore center for the United Kingdom only and has become offshore for the European Union. That implies a different, in all likelihood less powerful, set of synergies across the City of London’s financial activities.

      The few relevant quantitative data points available reinforce this bleak view. Job offerings in British finance, as tracked by consultancy Morgan McKinley, have declined alarmingly since the 2016 Brexit referendum. The ECB (as bank supervisor) and national securities regulators coordinated by the European Securities and Markets Authority are tightening requirements for key personnel to reside mainly on EU territory rather than in the United Kingdom.

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      As noted by Financial Times columnist Simon Kuper, many financial firms’ Brexit policy until this year had been to “sit tight and do nothing until post-Brexit arrangements for finance forced [their] hand.” That phase has ended. Firms that drag their feet face regulatory disruption, as happened to broker TP ICAP in late January. Tussles between regulators and regulated entities, rather than between the European Commission and the UK government, are where most of the financial-sector Brexit action is likely to be in 2021. These disputes typically happen behind closed doors, and the regulators typically hold most of the cards.

      For all the optimistic talk in London of “Big Bang 2.0 or whatever,” the United Kingdom’s comparative advantage as the best location for financial business in the European time zone is unlikely to recover to its pre-Brexit level. The macroeconomic losses could be moderated or offset by cheaper currency and less expensive real estate in London, making the city a more attractive place to do nonfinancial business. Even so, a gap will likely remain for the UK government, which has for years depended heavily on financial sector–related tax revenue.

      The European Union stands to gain financial activity as a consequence of Brexit. How much and where is not clear yet. As some analysts had predicted, Amsterdam, Dublin, Frankfurt, Luxembourg and Paris are the leaders for the relocation of international (non-EU) firms. Dublin and Luxembourg specialize in asset management, Frankfurt in investment banking and Amsterdam in trading. But EU success in terms of financial services competitiveness and stability will depend on further market integration, the pace of which remains hard to predict.

      The European banking union is still only half-built because it lacks a consistent framework for bank crisis management and deposit insurance. The grand EU rhetoric on “capital markets union” has yielded little actual reform since its start in 2014. Events like the still-unfolding Wirecard saga may force additional steps toward market integration, even though a proactive approach would be preferable.

      The one near certainty is that London’s position in the European financial sector will be less than it used to be.

      *[This article was originally published by Bruegel and the Peterson Institute.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More