| | | | After French President Emmanuel Macron's Economist interview, in which he warned of the "brain death of NATO," the magazine sums up his argument in its own words: "that Europe needs to start thinking and acting not only as an economic grouping, whose chief project is market expansion, but as a strategic power. That should start with regaining 'military sovereignty', and re-opening a dialogue with Russia despite suspicion from Poland and other countries that were once under Soviet domination."
Macron's comments are part of an ongoing conversation for Europe: In June, a European Council on Foreign Relations paper called for European "strategic sovereignty," including nods to military capability. In July, another ECFR paper about "strategic autonomy" echoed some of its sentiments. Economist Paris Bureau Chief Sophie Pedder supplies more context in the magazine's "The Intelligence" podcast: Macron sees Europe "squeezed" by various factors, including a warring US and China, US-Russia tensions, and an America that is pulling back from the world, Pedder says, and he wants Europe to shake off its complacency before it gets left behind. | | China's Influence Campaigns Are Still Provoking a Backlash | | Just two years ago, the National Endowment for Democracy coined a term for China's geostrategy: "sharp power." As The Economist explained, that meant leveraging economic weight to influence lawmakers and suppress criticism abroad. (As an example, the magazine pointed to China's economic punishment of Norway after a pro-democracy Chinese activist won a Nobel Prize.)
China is still at it, and Drew Thompson writes for the South China Morning Post of a growing backlash. One example: After Chinese tourists claimed abuse at the hands of Swedish police last year, China's ambassador "released almost 60 statements criticising Sweden's commitment to human rights and accusing it of tyranny, arrogance, racism and xenophobia," leading Sweden ultimately to "reevaluate" its bilateral relationship. Singapore has faced Chinese online influence campaigns, Thompson writes, and it recently passed a law to counter foreign meddling. China may enjoy some tactical successes, Thompson writes, but its escalations are leading countries to resist. | |
Populists Complain About EU's Rules, but They Take Its Farm Subsidies | | Europe's East is home to its most populist leaders, but The New York Times writes in an editorial that some of those same countries have taken in generous EU farm subsidies: Post-communist states have "cynically taken advantage of the union's largess through opaque deals, feeding a new class of land barons," the paper writes, after a Times investigation revealed some details.
The transfers "have often become a lavish slush fund for political insiders, helping them amass wealth and consolidate power," the paper writes. "The examples cited in the Times study are appalling—in the Czech Republic, the prime minister, Andrej Babis, is a billionaire whose companies collected at least $42 million in agricultural subsidies last year." It's a hypocritical move for a populist, the paper implies. | | One of the World's Top Economies Is Also a Tax Haven | | The Netherlands is one of the world's richest countries—its 2018 per-capita GDP ranked in the top 15 in the world, according to the IMF, and seventh among the advanced economies of the OECD—and as Johan Langerock and Maarten Hietland note in a Foreign Affairs essay, the Dutch have overperformed since their days as a colonial sea power.
But the country is also a tax haven, Langerock and Hietland write. Tax treaties allow Dutch companies to bring home earnings without getting taxed, and foreign multinationals like Google, Pfizer, Nike, and Uber have launched operations there; the Dutch establishments of such multinationals avoided paying taxes on $100 billion in overseas profit in 2016 alone, they write. The European Parliament recognized the country as a tax haven earlier this year. The Dutch are caught in a predictable trap: if they change their laws, they'll lose the business. But there's reason for hope, Langerock and Hietland write: The Netherlands has begun altering its tax rules, and it is set to close a loophole with the US sometime next year. For a more dramatic shift to occur, they write, Dutch politics will have to turn against the way things have been. | | What Does Debt Mean for Democracy? | | With global debt hitting record highs—the IMF warned today it's reached $188 trillion (including debt owed by governments, businesses, and households), good for 230% of global economic output—Steven Klein asks in an essay for The Berlin Journal: What is debt doing to democracy? After all, the Eurozone crisis saw chaos on that continent, and in the US, President Trump has routinely browbeaten the Fed, undermining its traditional independence.
Klein suggests that democracy "in an age of debt" suffers from a disconnect between politics and market economics; workers want a living standard, for instance, that markets may not support. Drawing on the work of Hungarian political philosopher Karl Polanyi, Klein notes there are institutions that split the difference between electoral politics and market forces—central banks and labor unions, namely—and that the solution might be to represent more constituencies on central-bank boards, for instance, giving voice to more political interests as debt and finance are managed. | | | | | | |
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