The Implications of the Inflation Reduction Act and our Allyship with the EU

In the summer of 2022, the Biden Administration signed the Inflation Reduction Act (IRA) into law. This massive bill allocates federal spending towards reducing national carbon emissions, lowering healthcare costs, funding the Internal Revenue Service (IRS) and improving taxpayer compliance. One of the most significant aspects of this bill concerns clean energy and advancing climate technology. This aspect works in conjunction with the Infrastructure Investment and Jobs Act (IIJA) and the CHIPS and Science Act. All three of these bills invest spending in manufacturing, job creation, infrastructure, and research and development in clean energy. The Inflation Reduction Act directs nearly $400 billion in federal funding to clean energy via tax incentives, grants, and loan guarantees. Clean electricity and transmission received the largest sum, followed by clean transportation, such as electric vehicles. The goal of the IRA, in addition to the IIJA and the CHIPS Act is to improve U.S. economic competitiveness, innovation, and industrial productivity while considering advancing clean energy efforts and encouraging investment. Leaders of the European Union have voiced their disapproval of the U.S. enacting the IRA for fear that it will disrupt the clean energy market, driving investment away from EU member states due to incentives offered by the U.S. However, the EU’s fears have no real merit. The U.S.’s commitment to clean energy generates a net positive on the global scale in terms of addressing climate change and puts no significant dent in Europe’s clean energy economic sector.  

Europe’s biggest concern in the IRA are the incentives it offers for private investment. The majority of funding for the bill is in the form of tax credits which are going primarily to corporations, approximately $216 billion of the nearly $400 billion bill. To be eligible for the full IRA tax credits, corporations must meet a set of criteria. These include prevailing wage and apprenticeship requirements, domestic-production, or domestic-procurement requirements, and in some cases a percentage of critical minerals that have been recycled, extracted, or processed in North America or a country that has a free trade agreement with the U.S. as well as being manufactured or processed in North America. EU leaders believe these incentives will encourage European corporations to relocate to the U.S. and their worries are not entirely unfounded.

During the World Economic Forum in Davos, U.S. governors from Michigan, Georgia, Illinois, and West Virginia Senator Joe Manchin attempted to lure European clean energy businesses to their states, promising cheaper costs of production. German, French, and Belgian leaders all denounced the U.S. politicians’ attempts to strip Europe of their clean energy producers. In response,  French President Emmanuel Macron has indicated that he believes the EU should introduce a comparable spending package to the IRA to bolster clean energy corporations in Europe. Some potential issues with this reaction is that the EU is unable to provide tax credits in the way the U.S. can, as only nation states have this authority. Many nation states do provide tax credits and Germany is already operating under a similar model to the IRA, however it is unlikely it would make a significant impact due to the smaller scale of their clean energy production market. Other EU leaders, such as Dutch Prime Minister Mark Rutte, believe throwing money at their existing system would make no difference, rather they should redistribute funding that already exists in clean energy investment. 

If the EU is content with the current state of the clean energy market, which considering their reaction to any possible shift they are, then they are realistically making a mountain out of a mole hill. Almost half of the funds provided by the IRA will be spent on upgrading, repurposing, and replacing the energy infrastructure and will be used as loans rather than subsidies. The biggest sector the EU may have concerns with is electric vehicles, however the EVs they are already manufacturing will most likely qualify for subsidies. Germany is the only major exporter of cars to the U.S. and Volkswagen is the only corporation that produces large numbers of electric vehicles. Its best-selling model is already being produced in Tennessee, making it qualify under the IRA as a corporation who will receive subsidies. Other major European automobile corporations such as Audi, BMW, and Mercedes already produce in North America as well. Because they all produce in either the U.S. or a nation with a U.S. free trade agreement, they will also qualify for subsidies. 

Concerning our transatlantic allyship, any significant shift would be an overreaction. Although these new subsidies concern European nations, the primary focus should be on coordinating with the U.S. on how to approach the clean energy market. Europe’s trade commissioner, Vladis Dombrovskis said as a reaction to the IRA that the fight against climate change should be done by “building transatlantic value chains, not breaking them apart”. Importantly, the U.S. and the EU need to ensure that they do not battle to drive away business and investment through distortionary subsidies and place reasonable boundaries on the support they are able to give to corporations. 

At first glance, it is reasonable for Europe to approach the enactment of the Inflation Reduction Act with a degree of hesitancy. It appears to threaten their existing clean energy market and disrupt this sector of the economy. Their fears were validated by U.S. politicians attempting to lure these corporations stateside with the appeal of subsidies, tax credits, and easy access to loans. Upon further analysis, however, it is highly unlikely Europe’s clean energy market will be disrupted at all by the IRA. The corporations which draw the most concern are manufacturing in the U.S. and already qualify for most of the IRA’s benefits. It is necessary for European leaders to take a less reactionary stance on the bill and focus on further coordination with the U.S. on how to approach clean energy and climate technology efforts moving forward.

National Pride and a National Healthcare System: The Strikes Defining the UK’s Future

In December of 2022, months of separate public service worker protests spiraled into the largest national health service strikes ever witnessed in British history.. Now, more than three months on since their start, Britain’s National Health Service workers show no signs of stopping as the stakes have only strengthened. At the core of these strikes are key demands by employees that have been routinely denied by the British government. The workers are asking for pay raises due to historic levels of inflation and greater overall funding for the NHS. 

This marks the NHS’ largest strike, and yet the government is still refusing to meet union demands. The government is refusing to meet the pay raises of NHS workers because they claim to be unable to afford it and for fear of increased pay leading to higher prices, thus worsening inflation and raising interest rates and mortgage payments. 

The UK has undergone a ‘cost of living crisis’ since late 2021 which has led to an decrease in British disposable incomes thanks to inflation. Although the government has attempted to aid in this crisis through support packages, such as capping household energy prices, many NHS workers say that this is still not sufficient support. Over 120 NHS trusts are expected to strike, including nurses in cancer wards, A&E departments and intensive care units.

The strikers are adamant that the public understand their need to protest. David Hendy, a 34 year old nurse, revealed his thoughts on the issue: “This job is slowly killing nurses. The nursing workforce in the last 10 years has been through hell and back. We've got through COVID, I've got colleagues who died from COVID. I myself have had it three times…morale is rock bottom.” Hendy is not alone in his experience, after decades of poor pay and the trauma of the COVID-19 pandemic, nurses are fed up. Despite being publicly supported for their heroism throughout the pandemic, many NHS workers feel unappreciated and ignored. Victoria Banerjee, a nurse for over two decades, stated that "The workload is phenomenal now and our patients are sicker than they’ve ever been.” 

Many nurses feel unable to keep up with the pressing demands placed upon them. There is a resource and staffing crisis within the NHS, magnified by over 25,000 nurses leaving the profession in the last year alone. The staff shortage means that many nurses are forced to double up on shifts and patients, performing unprecedented levels of care. Nurses have expressed their fear at endangering patients simply because they cannot adequately attend to each and every one. Pediatric nurse, Jessie Collins, revealed that “During one of my worst shifts I was the only nurse to 28 unwell children … it’s not safe and we cannot deliver the care that these children need at times.” Nurses on the picket lines have described their working conditions as dangerous and scary and their testaments reveal not just anger, but blatant fear for themselves and their patients. 

A Department of Health and Social Care spokesperson stated in an interview that “Ministers have had constructive talks with unions, including the RCN and Unison,” however these talks have not led to any sufficient action. The RCN (Royal College of Nursing) have rejected pay deals that do not properly address the impact of inflation. The core argument of the government is one of financial prudence. They refuse to increase salaries given the increase it will lead to in regards to the national budget and its potential to only worsen inflation. 

The National Health Service has played an influential role in the national fabric for decades, ever since its creation in 1948. It is regarded as a source of pride and unity for all citizens, which adds to the intensity of the recent strikes. 

History of the NHS

In 1948, following the devastation of World War II, a recently established Labour Party prime minister, Clement Attlee, set about establishing a radical new system for the British people. Atlee’s government implemented the economic reforms advocated by famed economist, John Keynes, that prioritized nationalizing industries, improving national infrastructure, and developing a welfare state designed to actively take care of three vulnerable groups in society: the young, the old, and the working class. Perhaps the most pivotal creation brought about by the new welfare state was the National Health Service, founded in 1948. 

The NHS did not provide new forms of medicine or care, but it radically transformed the average British individual’s relationship to healthcare. No longer did people pay for healthcare service on an individual basis, instead they paid collectively as taxpayers. The NHS redistributed and equalized the healthcare process, allowing everyone access to care for the first time in British history. British citizens no longer had to worry about affording care or going into debt due to high medical bills. Aneurin Bevan served as Minister of Health under Atlee’s government and was directly responsible for the creation of the NHS. The son of a coal miner, he spent his political career advocating for the working class. His foundational philosophy of the NHS can best be understood through his poignant statement that “Illness is neither an indulgence for which people have to pay, nor an offence for which they should be penalised, but a misfortune the cost of which should be shared by the community.”

The NHS continued to grow all throughout the latter of the 20th century despite major economic crises, such as the Winter of Discontent in 1978 and the rise of mass striking and inflation. Developments in healthy living and improved national knowledge surrounding daily health habits brought about lower mortality rates and changes in fatal diseases. The NHS sought to expand their care process and better understand how more external factors, such as diet, exercise, geography, and economic class were playing a role in the health of British citizens. Changes in daily habits and medical breakthroughs transformed people's understanding of the modern medicine and the NHS was capable of. 

The Politicization of Healthcare 

By the end of the 20th century, the NHS was widely beloved and respected for its life-changing impact on the British public; but it was also becoming an increasingly controversial institution in politics, with both Labour and Conservative using the NHS as a campaign and voting strategy. The demand of the NHS seemed endless and the services continued to grow in number, but this constant growth fueled by media and political attention only created a gap in which “what was possible and what was provided seemed to be widening.”

As the NHS continued to grow, so did the political debates surrounding it. Both Labour and Conservative argued over funding and regulation. In particular, many of the debates focused on the distribution of the financial burden to taxpayers and overall distribution of the national budget. Increases in immigration and national health crises became key factors in helping to politicize this institution. 

The British government has been defined by Conservative, Tory rule and a large variety of prime ministers for the past decade. As a result, the changes made to the NHS are rooted in Conservative policies. The recent downfall of the NHS is rooted in over a decade of underfunding from a Conservative government. 

A lack of staff and available resources destroyed the NHS. Waitlists for appointments are now a factor of daily life, forcing many citizens to wait months to receive basic care. This shortage has a death toll; in November of 2022, at least “1,488 patients are estimated to have died in Scotland as a result of waiting too long in emergency departments.” British citizens are dying in emergency rooms because nurses and doctors cannot tend to them with the urgency required but they are also slowly dying at home as they wait for an appointment. Delayed appointments are affecting overall well being according to a survey in which 25% of individuals said the wait for treatment has a “serious impact on their mental health” as over 7.2 million people are currently waiting for treatment. The inability of the NHS to properly support its citizens reveals a profound failure in matters of funding and organization. 

Identity Lost

Viewing the NHS strikes solely as a salary issue does not accurately portray the true issue at large. NHS employees are striking because the system is failing and the UK government is unwilling to help. The inability of the NHS to effectively provide for its patients reveals a far darker issue that goes beyond low salaries and inflation: The United Kingdom can no longer afford to take care of itself. 

The NHS is a tremendous source of pride for individuals all across the United Kingdom. In a recent study by Engage Britain, over 77% of British citizens polled stated that the NHS makes them feel proud to be British. However 20% of those surveyed also revealed that they had been forced to turn to private sector care due to limited appointments and resources. Private healthcare companies are growing rapidly as the “market for private health care in the United Kingdom has doubled since before the pandemic.” The growing influence of private healthcare across the UK demonstrates the dire nature of the situation. 

Perhaps that is why these strikes feel more intense than any other historically, and not just due to record turnout. The strikers are asking for more than a living wage; they are asking for a sense of dignity and pride that they can collectively unite behind, and above all they are asking for a sense of hope. The NHS strikes show a healthcare system that is clearly in shambles, but they also show a nation destroyed and without a unifying identity to rally behind. Even if the strikers and the government can come to an agreement based on each of their demands, it is unlikely that the true underlying issues of the strike will be solved anytime soon.

Strong Together: Why Europe’s Security Crises Invite Opportunities for Cooperation

European Commission President Ursula von der Leyen delivered this year’s State of the Union address in Strasbourg, France, like every other year. But events still occurring in another location far to her east dominated her thoughts and remarks. Though she waxed poetic about Europe’s united and swift response to Russia’s invasion of Ukraine this February, von der Leyen did not mince her words about the dangers remaining for Europe: “this is a war on our energy, a war on our economy, a war on our values and a war on our future.”

Ukrainians bear the biggest brunt of Russian President Vladimir Putin’s war against their nation, but its ramifications extend across the European continent. The conflict presents a security dilemma with immediate and lasting dimensions, as well as domestic and external implications. In particular, Europe has recognized the necessity of indigenous military capacity, prompting renewed focus on defense spending. More abrupt, perhaps, is the challenge of securing energy supply as winter approaches and many countries can no longer look to Russia. A significant rethink is accordingly underway in most capitals about how much to trust Moscow as long as it is led by Putin or someone likeminded, rewriting the playbook of currying a cooperative relationship through security pacts and economic exchange.

Although some European Union (EU) member-states face more daunting threats than others, this new security environment imperils the entire bloc. It also presents overwhelming incentive for enhanced cooperation across national borders. Several member-states, however, from those friendly with Moscow to those skeptical of deeper alignment to those whose political landscape skews nationalistic, may not be as keen on “more Europe” in these times. As the Euractiv Green Brief newsletter suggests, von der Leyen likely aimed her comments at “national governments who tend to pursue national interests when confronted with crises on a European scale.” 

Unilateralism would squander this opportunity. The impetus to pool resources is not simply for European integration’s sake, but because multilateral action could deliver better results. Not only would joint development, purchasing, and planning of military capabilities yield a more formidable Europe, but current energy insecurity endangers the European market and threatens to leave citizens literally out in the cold. Though von der Leyen’s address was promising, the present challenge is to translate her sentiment into attitude and action.

Toward a Geopolitical Europe

February 24, the day Putin launched his most recent invasion of Ukraine, is seen as a turning point for Europe. With Washington’s support, Brussels quickly marshaled numerous sanctions packages that have eroded Russia’s post-Cold War economic progress and upended its relationship with Moscow. Since then, the European Commission has adopted a more “geopolitical” approach, embracing candidate status for Ukraine and Moldova, and becoming more deeply involved in Europe’s foreign policy toward Russia. At the core of these developments is a recognition that efforts to build a constructive relationship with Russia since 1991 have failed. 

Germany’s recent history with Russia underscores these challenges. Berlin pursued Russian energy resources, even after Putin’s annexation of Crimea in 2014, through natural gas pipelines like Nord Stream 2, believing sustained commerce might incentivize Russia to temper its foreign policy so as to sustain such lucrative arrangements. Europe hoped Putin was truly “rational,” or, as writes Nathalie Tocci of Italian think-tank Istituto Affari Internazionali, subscribing to “a rationality that puts material interests above ideology.” But despite the threat of losing Germany’s business, Putin launched his attack on Ukraine and cut supply to European countries as retribution for supporting Kyiv. Reflecting on the unfolding war, then-recently elected German Foreign Minister Annalena Baerbock acknowledged that Europeans should have diversified their energy imports to rely less on Russia years ago, as “energy policy is always power policy… always security policy.” Because Putin has used energy as a political tool since the invasion, and indeed in other moments in the past two decades, this ideal relationship based on sanctity of contract, interdependence, and trade is unlikely.

Putin’s behavior seeks to anchor Ukraine in Moscow’s mir, or world, consistent with the Russian president’s conception of upholding Russian civilization and great power status. That Kyiv could opt to “join the West” through pursuit of EU or NATO membership was thus an unacceptable prospect, especially considering Putin’s view that the Western world is incompatible with Russia’s. This sense of historical right, if taken to its conclusions, is a different mode of thinking than that which underpins the European project, which in theory rejects sphere of influence politics and embraces the sort of peace through common progress that makes the EU’s promise so special. Because this undertaking does not interest Putin, the EU should adapt and fortify itself, not in the pursuit of war but of internal security. This pertains especially to the two most glaring areas: defense capabilities and energy.

Building European Defense Capability

In recent years, an increasingly complex security situation has imperiled Europe’s defense. The continent relies on U.S. capabilities, including military aid, troops, and large-scale sophisticated firepower, to guarantee its security. Though EU member-states’ military budgets have increased since Putin’s incursion in Crimea in 2014, Donald Trump’s presidency sparked unique concern over American commitment to Europe, given his questioning of NATO commitments and transactional approach to foreign policy. Most rank-and-file Republican lawmakers still support NATO, but a growing, vocal wing of the party shares Trump’s antipathy toward Europe. 

Perhaps the most durable shift in U.S. politics, however, is a bipartisan prioritization of great-power competition with China, auguring a strategic shift toward the Indo-Pacific. Though war in Ukraine returned considerable focus to Europe, National Security Adviser Jake Sullivan reaffirmed the Biden administration’s view of China as “the most consequential geopolitical challenge,” a belief echoed by the most recent U.S. national security strategy. Realizing these trends will persist, Europeans – notably French President Emmanuel Macron – have emphasized a need for “strategic autonomy,” or development of continental defense apart from Washington. So long as these efforts do not replace NATO or entirely reject the United States, but instead enhance existing systems, Europe will better insure itself against U.S. domestic volatility and strategic shifts as well as external threats by adopting this path.

The Ukraine crisis has introduced new urgency by demonstrating that war is still possible on the continent and that lack of preparation will prove costly. Europe’s dilemma thus remains improving capabilities in a productive manner, fearing that a lack of coordination and planning will limit the benefit of any additional spending. In EU High Representative Josep Borrell’s words, “after the Cold War, we shrunk our forces to bonsai armies. If each European state just increases its military capabilities… the result will be a big waste of resources. We’ll just have 27 bigger bonsais.” The EU has little competence over military strategy and, like NATO, does not have its own independent armed forces separate from the member-states. Its initiatives instead rely on the contributions of national forces.

Building the necessary technology will prove daunting. Ian Bond and Luigi Scazzieri of the Centre for European Reform write that, given current spending promises, it will still take years to procure necessary equipment and higher inflation rates will erode the value of new spending. And because the EU does not have a unified defense industrial base from which to draw, capacity development between member-states is limited and procurement processes remain biased toward national companies. This leaves European countries vulnerable to duplication and financial or practical obstacles. For example, two fighter aircraft programs in progress – one between Britain, Italy, and Sweden and another between France, Germany, and Spain – may both take longer and cost far more than might occur with greater cooperation, as both struggle to achieve economies of scale. Further, without common agreement on standardization and interoperability, EU member-states could find collaboration difficult in times of crisis. 

For its part, Brussels seeks to facilitate this process through initiatives like Permanent Structured Cooperation (PESCO) aimed at easing integration of member-states’ armed forces. The European Commission is also preparing proposals to incentivize joint procurement of weapons through VAT waivers and update the European Defense Fund (EDF) accordingly. Such steps toward greater multilateral planning could help maximize the defense of the European project and, in turn, each individual member.

Powering a New Energy Security

The more immediate concern for most EU member-states, however, is energy insecurity and economic havoc, especially with the downgrading of EU-Russia energy trade. As Jason Bordoff and Meghan L. O’Sullivan caution in Foreign Affairs, Moscow is “the dominant supplier of natural gas to Europe and a major exporter of coal and the low-enriched uranium used to power nuclear plants.” Some member-states like Lithuania or France rely less on Russia for energy to varying degrees, but before war broke out, others like Germany and several Central European counterparts counted on supplies from the east. Even before the EU’s ban on Russian oil imports, the European Commission and member-states like Italy resorted to a diplomatic blitz in preparation for a harsh winter without a key source. 

Russia progressively sealed the spigots to several countries over the course of the summer, weaponizing energy trade. With commodity prices so high, persistent supply disruptions threaten to worsen inflation and usher in a recession with global ramifications. Europe has turned to alternatives in lieu of Russia, between bilateral agreements and large-scale deals with partners like Norway, Algeria, Qatar, and Azerbaijan, to compensate for vulnerability. The United States has been supplying more liquified natural gas (LNG) than expected, resulting from the European Commission’s energy diplomacy early on in the crisis. These efforts have hardly been for naught; EU gas storages are 90% full and von der Leyen has expressed confidence ahead of winter. Among the most vulnerable are Central and Eastern European countries lacking the infrastructure to diversify quickly. However, bilateral deals like the one Greece and Bulgaria have reached on a long-delayed gas pipeline, providing the latter with an affordable alternative to its usual Russian flow, are promising. 

European countries’ collective efforts have evidently already yielded dividends. However, continued consensus may be necessary to deal with two additional challenges: weathering price fluctuations and ensuring future supply, especially ahead of the winter of 2023. Member-states have increasingly been engaging Brussels given the implications of energy policy in the European market. Discussion of price caps has dominated, alongside Germany’s announcement of a relief package worth 200 billion euros for households and businesses, which has attracted widespread criticism for undermining a level playing field in the single market. Whatever the result of these debates, divergent national measures threaten to unsettle markets and fracture an integrated approach to energy, which is why continued bloc-wide solutions to additional challenges like decreasing consumer demand are of paramount importance.

On the supply front, Ben McWilliams, Simone Tagliapietra, and Georg Zachmann write that the EU stands the best chance if member-states pool their resources with an eye to securing supply for the entire bloc if necessary. Just as with national defense capacities, having 27 different energy strategies makes the pursuit of EU-wide supply more costly and risks leaving some countries out in the cold. If breakthroughs on other fronts arrive, such as on the stalled pipeline between Spain and France, Europe would further be equipped to supply all of its members, especially with future winters in mind.

“Forged in Crisis”

As new obstacles confront the EU, a united front presents the greatest chance of success at handling them. Countries like Hungary – whose prime minister, Viktor Orban, maintains close ties with Putin – within the bloc are cumbersome realities that must be managed. Further, governments must stand firm in their support of Ukraine through sanctions on Russia when the temperature drops. Brussels has been quite active in and recognizing a new geopolitical imperative and seeking a uniform policy since February. However, not all authority needs to be centralized in Brussels for member-states to communicate with each other. This is significant, considering governments skeptical of greater European integration but seemingly likely to support Ukraine and improved European defense, like the one likely to form in Italy following September’s elections, can still engage productively in building European capacity.

It has long been said that the EU is forged in crisis. Russia’s behavior has granted EU member-states even more reason to mold a new security architecture, from heating homes this winter to deterring future aggression for years to come. Though Putin continues to wreak havoc on Ukraine, the EU can emerge a more capable ally by fortifying its own security. The chilling scenes emanating from Europe’s east this year are stark warnings of a new geopolitical relationship to come, but also reason to take action. If member-states maintain their momentum and unify behind this common motivation, they can realize von der Leyen’s goal of “a union that stands strong together,” and turn platitude into prophecy.

The World’s Economy Weakens Amid Russia’s Invasion of Ukraine

On 24 February 2022, Russia invaded Ukraine in a major escalation of the Russo-Ukrainian War, which began in 2014. Ever since, the effects of this invasion have been felt by most – if not all – countries around the world. The Russia-Ukraine war has significantly impacted the economy and stability of many nations that heavily relied on both Ukraine and Russia for trade and supply chains. 

Covid-19, a two-year long pandemic that greatly disrupted global markets and Europe’s economy due to the fact that many were forced to stay at home for an extended period of time, which caused trade and production to slow down, causing the Gross Domestic Product of many nations to collapted. As the continent was resurging from a two year global pandemic that greatly impacted its economic stability, the war triggered by Russia only weakened an already frail economy.

Worldwide, consumers can feel the weight of this conflict that has disrupted supply chains and affected many global markets, more specifically the global energy market. As a response to this conflict, many nations have imposed economic sanctions on Russia, in the sole purpose to economically pressure the country to put an end to this war that had already cost the lives of many. The volatility in European energy markets caused by the European Union  and United Kingdom sanctions on Russian energy - imposed in retaliation for Russia's invasion of Ukraine in February - have cut out a slice out of the continent's economy. 

The disruption of supply chain and trade caused by Russia’s invasion of Ukraine has led to an increase in the price of many goods, energy, and gas related goods in many European nations, which has created inflation throughout the continent.The reason for such increase in price is due to the fact that many nations were heavily dependent on Russia and Ukraine for many goods. Most importantly, Russia was an important oil and energy trade partner with European nations. Inflation is a general increase in the prices of goods and services in an economy. Inflation affects the economy of a country by increasing the price of food, energy, higher utility cost, while not receiving an increase in wages and higher interest rates on home loans which negatively affect consumers, and thus the economy, as inflation lowers the purchasing power of many.

Inflation is a hard thing to get rid of in an economy. Triggered by the disruption of trade as a consequence of Russia’s invasion of Ukraine, policy makers and governments are actively attempting to mitigate the negative effects of inflation on their country’s economy. However, while inflation remains a big issue in Europe and the rest of the world, the energy market is slowly collapsing under the sanctions against Russia.

As a response to inflation, the European Central Bank, the Bank of England and other central banks across Europe have aggressively raised interest rates to bring down high inflation. Raising interest rates is an economic policy used for the sole purpose to slow the economy down and bring down inflation. As a result of high interest rates, companies and individuals will cut back on spending, which will naturally bring down the price of goods and services that were previously increased due to the disruption of global markets. 

While interest rates rise around the world, stocks and bonds are being sold off. The reason behind which bonds are being sold off is that when interest rates rise, new bonds pay investors higher interest rates than old bonds, so old bonds tend to fall in price. Inflation caused by political instability  has led to this increase in interest rates as well as stocks to go down, which further highlights the lack of confidence in the economy from consumers, investors, and businesses. In a bear market—stock prices are falling—consumers and companies have less wealth and optimism—leading to less spending and lower GDP.

Households have found it challenging throughout the continent to keep up with inflation. While inflation results from changes in the cost of a market basket of goods, wages, on the other hand, are driven by changes to supply/demand for labor. As the weight of this conflict weighs on the shoulders of consumers and governments, Russia’s current economic and political instability keeps on harming the global economy, while disrupting markets.

While Russia’s invasion of Ukraine has greatly disrupted supply chain, trade, and global markets, all of which have had negative repercussions on Europe’s economy, the most important challenge to consider as to this day is the energy crisis that nations have been facing and are currently facing as a result of this bloody conflict. 

The repercussions of the war in Ukraine have "distorted" the natural gas market, leading to higher energy prices. Indeed, natural gas, used to generate electricity and heat, is now about ten times more expensive than it would have been a year ago. Electricity prices, which are tied to the price of gas, are also several times higher than what was considered reasonable. The reason behind such volatility in natural gas prices is due to the fact that Russia is an important producer of natural gas and thus, its role in trade is crucial.  The rise in natural gas’ prices is a fear that Europe will run out of gas this winter. 

On the bright side, governments are actively attempting to stem the energy crisis. European Union countries, such as Germany and the Netherlands, are scrambling to fill gas storage facilities to guard against a possible complete shutdown of Russian gas this winter. Governments have also taken steps to secure additional supplies in the form of liquefied natural gas from the United States and other countries. While France and other countries provide financial assistance to consumers, but not enough to offset the dramatic increase in costs faced by households. A wide range of politicians, consumer advocates and even energy executives are calling on governments to do much more.

The European Central Bank, which oversees economic policy for the 19 nations that use the euro, took an aggressive step to fight inflation with its biggest rate hike ever, three-quarters of a percentage point. 

European Union ministers were scheduled to meet on September 9th to discuss a plan to intervene in energy markets in order to control prices. At this meeting, they have discussed strategies that could include price caps and mandatory cuts in energy consumption.

The sharp drop in supplies from Russia, which previously provided about 40 per cent of the European Union's gas needs, has left governments scrambling to find alternative energy resources and raised fears of possible power cuts and a recession. After suffering an increase in the price of many goods amid Russia’s invasion of Ukraine, citizens of many countries now fear spending a winter in the cold, as the price of energy is going up. 

Nations across the continent are still attempting to fight inflation through different economic policies, the main one being the rise of interest rates by central banks. Although this has proven to be an efficient method to bring down prices and ultimately lower inflation, this method has also led to a collapse in the stock market. Ultimately, nations are attempting to find alternatives for natural gas, alternatives that will be less costly and harmful to their economies. 

Putin, President of Russia, offered the European continent gas through Nord Stream 2. Nord Stream is a natural gas pipeline through the Baltic Sea. The pipeline is a key factor in securing energy security in Europe. For many, this was interesting news, knowing that the country has been reducing gas supplies through Nord Stream 1 for a number of months. While this reduction in gas supplies is affecting many countries, Germany has been the most affected by it, as Russia contributed to 55% of its natural gas. Additionally, the pipelines were damaged, which only further impacted gas supplies, while having a negative impact on the environment. 

Aware of the natural gas shortage that Europe is currently facing, Putin offered Europe gas through Nord Stream 2. Germany, on the other hand, said it would not take Russian gas via the Nord Stream 2 pipeline, which has become a major focus of the Ukrainian crisis. Indeed, accepting Russia’s offer now would only go against all of the economic sanctions that were set up against the country to mitigate the repercussions of the crisis that has already affected the world’s economy. While nations seek alternatives to find natural gas, accepting gas from Russia would benefit Putin and his country, as he attempts to gain political power, and economic dominance, amid the war that he started back in February of 2022. 

Political and economic instability persist across Europe as relations with Russia are tense. Economic sanctions against the nation have proven to be effective, even if they are harming the world’s economy in the short run, through the disruption of global markets that have weakened the economy of many European countries. In the long run, the economy will self-adapt to these new changes in global financial markets, but in the meantime, governments are attempting to find in which they can alleviate economic and political tensions, in the sole purpose to achieve economic prosperity while improving relations between Russia and its trading partners.

As of today, it seems as if the future of Europe lies within the hands of Russia. The country’s next steps in this crisis will ultimately affect the economic and political stability of neighboring nations. Until Russia puts an end to this war, the world will feel its negative  repercussions. 

It’s Looking a Lot like 1979 in the UK… or Is It?

I am not the first to note that Queen Elizabeth II’s death on September 8th, 2022 heralds the end of an era. For many, her presence was the one constant during these past seventy years of change, and her death has come at the tail end of a summer representing a fork in the road for Britain. Public uncertainty surrounding the fate of the monarchy has also become representative of the general sense of unease that the United Kingdom has dealt with over the past year. In the few months since Boris Johnson stepped down, inflation has skyrocketed, energy bills have nearly doubled, the pound sterling has slumped nearly to parity with the dollar, strikes have continued to intensify, the airlines have continued to face challenges, and public satisfaction with the much-lauded National Health System (NHS) is at an all-time low. As such, it comes to nobody’s surprise that the very real fears of a recession have dominated the headlines. All of this comes at the heels of a fraught few years of former PM Boris Johnson’s repeated scandals, echoes of the coronavirus pandemic, and the continued economic fallout of Brexit.

To anyone who gives even a cursory look to 20th century British history, it is hard to stave off comparisons to the political and economic situation that gripped the UK in the mid to late 1970s, which was also characterized by internal turmoil. During the unprecedented freezing winter of 1978-1979, the so-called Winter of Discontent took hold, during which the country realized the status quo was no longer tenable. Over forty years later, the country seems poised at an eerily similar turning point. While the winter of 1979 heralded Margaret Thatcher’s rise to power, the 2022 so-called “Summer of Discontent” has left the country with new Prime Minister Liz Truss. Ms. Truss has famously attempted to fashion herself as a second Thatcher, and while there are similarities between the two, there are 40 years between them and the contexts in which they are operating. While there isn’t a single solution to fix national sentiment, Britain must understand that Truss is no Thatcher and that the new government must take immediate strides for structural reform, or face a series of dark, recessionary years in the foreseeable future.

For context, in the two decades following the Second World War, Britain experienced an economic "Golden Age”, during which the country experienced its fastest ever economic growth, 2% unemployment, the construction of national motorways, increased productivity, housing construction, the establishment of a strong welfare state, and overall raised standards of living. The prosperity reached such a degree that in 1959, Queen Magazine–now Harper’s Bazaar–declared that “Britain has launched into an age of unparalleled lavish living,” where average wage was high and unemployment low. Keynesian economic thinking came to dominate the post- war economic consensus, and Britain enjoyed nearly twenty years of economic success. All of this came to a screeching halt in the mid 1970’s.

Even though the UK finally entered the European Economic Community in 1972, throughout the decade, Britain experienced mass strikes by coal miners and rail workers, the effects of the 1973 oil crisis, and widespread blackouts due to lack of available electricity. Unemployment rose once again, exceeding 5%, and inflation peaked at a staggering 25%. In 1976, the Labour Government was forced to borrow $3.9 billion from the International Monetary Fund (IMF) to prop up the value of the pound sterling, which had severely dropped in value in relation to the dollar. All of which culminated in the aforementioned Winter of Discontent, where nearly every industrial union went on strike. This included everyone from gravediggers to waste collectors, NHS employees, and truck drivers. They demanded pay raises greater than the limits the Labour government was willing to give, as the government was desperate to tamp down inflation. The strikes caused massive public unrest and inconvenience amid unprecedented freezing temperatures. Unsurprisingly, the Labour government fell in 1979 and Margaret Thatcher was elected as Prime Minister.

Thatcher is perhaps the most controversial figure in modern British politics, equally reviled and beloved. Her government marked a new era in economic policy, adopting what is recognizable to Americans as traditional conservative policies. This included deregulation, privatization, an emphasis on the free market, an overhaul of relations with labor unions, and massive tax cuts. The government adopted stringent economic and fiscal policies to reduce inflation and stuck to them. And to Thatcher’s credit, they were overwhelmingly successful, as inflation was tamped down from 20% in 1980 to around 4% in 1987.

British conservatives are famously known for flip-flopping on issues and are not known for their ideological consistency. Most cynically put, the Conservative manifesto is to adopt policies that will help them stay in power and remain popular with voters. But Margaret Thatcher was famous for sticking to her policies. While there is no doubt as to the widespread suffering Thatcher’s policies caused through cuts to welfare and reduced government spending, she took the country off the brink of economic collapse. 

Returning to the present, it is easy to see where the parallels lie, and on the surface, the current economic situation does not look so different. Liz Truss, another young, female star of the party, from a state-school background, has quickly risen through the ranks to become Prime Minister. Truss has leaned wholeheartedly, and sometimes ridiculously, into this comparison, positioning herself as the second coming of Thatcher. A much-lampooned photo-op saw her in Moscow wearing a nearly identical outfit to Thatcher, and she is even known for wearing the same kind of blouse for which the Iron Lady was famous. However, there are some more meaningful parallels, perhaps best encapsulated by her Reagan-esque belief that cutting taxes will somehow spur productivity growth.

However, this is not 1979, Truss is no Thatcher, and ultimately, her policies make little coherent sense. The ongoing war in Ukraine has defined the current energy crisis, and it was recently announced that the UK was going to face a staggering 80% increase in household energy prices due to limited supply. One of Truss’s first announcements as PM was to cap the per unit cost of energy that providers can charge. This was too popular not to pursue, as the public was nearly united in a push for the government to do something about it. However, this seems to be more of a band aid on a bullet wound, as the government cannot credibly control inflation for the long term by placing a price cap on a good. 

The panic surrounding the Nord Stream 2 Pipeline sabotage is representative of this crisis and how a continued reliance on energy sources from Russia will continue to plague the UK. While Thatcher was saved by the discovery of North Sea oil, a miraculous new discovery of oil and gas resource in British waters seems unlikely. If the war drags on, which it seems likely to do, the scarcity of natural gas available to the UK will persist and prices will continue to rise, ultimately placing more pressure on the government to cover the difference, increasing the deficit––which could ultimately cause inflationary effects. Whether it be a serious investment in renewable energy sources or a shift back towards nuclear, Britain must shift away from this continued reliance on natural gas and oil, especially from foreign sources.  

Despite the inflationary effects that seem bound to occur, Truss seems determined to cut taxes, even as the government remains adamant that they will cover the shortfall between what consumers pay for energy and the market rate. The plan to avoid a fresh windfall tax on energy producers would mean pushing costs on to taxpayers, with as little as 1 pound in every 12 spent on energy support for households recouped from higher taxes on energy firms. Even Thatcher made the unpopular decision to raise taxes in 1981 to manage the deficit and inflation.

While currently Truss appears to hold steadfast in her views to not raise taxes and remain tough on labor unions, for many, she embodies the flip-flopping for which the conservatives are so well-known. For a historical example, she backed the Remain campaign during the 2016 election, but as the tide began turning, and looked as if they were going to lose, she quite suddenly changed her tune and became one of Boris Johnson’s most ardent supporters. While she has timidly announced increased government spending in the form of energy cost caps, she also remains determined to cut taxes, and reduce inflation. But this mixture is far from the Thatcherite policies that worked, and by pursuing what is popular, she remains sailing with the prevailing wind.

While Truss attempts to pursue Thatcherism 2.0, her government must face that they are operating in a completely different time and context. Thatcher was successful in dismantling the postwar economic consensus that was centered around Keynesian thought and instituting neoliberal economic policies, but Truss is operating in a country that is already neoliberalized and thus must face the fact that state intervention is necessary. The war in Ukraine is certain to drag on, and energy prices will continue to rise, especially during the coming winter when demand goes up as well. The leadership also must accept the reality that if they don’t stop the flood of discontent surrounding the party, they are in danger of losing the next general election in two years, as it was under their watch, not Labour’s, that the country has entered its current predicament. And the leader to get the economy back on track does not need to be from the Conservative party.

For millions, Queen Elizabeth II represented stability, reliability, and greatness. Now, without her constancy, the future state of the United Kingdom has been thrown into sharp relief. National sentiment is polling at an all-time low, and it's hard to find anyone in Britain who is optimistic for the future. The Conservative party must adopt hard and fast policies that take aim at the ailments of our time or risk losing the next election. But whether it occurs under Labour or the Tories, a serious change to the status quo is in order.

A special thank you to Daniel Dorey Rodriguez, who contributed much needed economic policy facts and lived experience for this piece!   

Uniting Europe: How Closing the Digital Divide Between Eastern and Western Europe Will Strengthen the EU

Putin’s invasion of Ukraine destabilized the entire international world order by bringing war back to Europe, but more importantly it has revealed the greater need for stability and unity between Western and Eastern Europe. One method to counteract Putin’s threats and to improve the international standing of the European Union is to close the digital divide between Eastern and Western Europe, thus working to unite the continent, bring technological innovation to regions previously untouched by it, and promoting EU initiatives and popularity. The OECD defines the digital divide as “the gap between individuals, households, businesses and geographic areas at different socioeconomic levels with regard both to their opportunities to access information and communication technologies (ICTs) and to their use of the Internet for a wide variety of activities.” The technological gap also reflects broader socio-economic issues of the impact of Communism. 

A Geographical Digital Divide 

The history of the digital divide lies in the legacy of the Cold War, a difference in economies, and the devastating impact of the COVID-19 Pandemic. Technology innovation has defined much of the European Union in the twentieth century. The member states involved have sought to digitize their economies and industries, while also setting the world wide standard for regulations regarding data and privacy. Yet, Eastern European countries, both in and out of the European Union have largely failed to adopt the same technological success of countries such as Germany and Finland. 

The root of this issue is an economic one. Eastern European countries tend to be poorer than Western Europe and thus have less financial resources to spend on investing in new technological projects or working to adapt to modern tech innovation. The Cold War deeply impacted Eastern Europe’s ability to adapt to technology. Although the internet boom occurred after the fall of the Berlin Wall in 1989, the countries under the Iron Curtain had already been cut off for decades from Western modernity. Despite the Soviet Union heavily promoting science and technology during its reign of power, the eventual weakening of their economy and the larger socio-economic issues of the late eighties prevented the Soviet Union from maintaining their high standards of technological innovation. When integration and trade between East and West finally started, the East was forced to exist in a state of perpetual “catch up” compared with their Western peers. 

The European Union has welcomed more and more former Soviet countries into its membership. In 2004 the largest enlargement took place, in which the EU added Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovakia and Slovenia. Since 2004 many Eastern European countries now play a role in the EU, but according to a report from the World Bank, they lack “​​the composition of spending across innovation activities and the allocation across the different types of technologies.” While the EU has attempted to spread its technological incentives throughout all states, the fact remains that some member states are better at adapting and implementing new technology given their stronger economic stability or prior interest in technological advancement. 

The COVID-19 Pandemic both worsened the digital divide but also highlighted the need for change. WIth in-person connection no longer a possibility, companies and economies were forced to adapt to a more digitized world, in which many firms moved entirely online. Member states such as Germany proved to adapt more easily to the digitalization required by the conditions of the pandemic and even thrive under it. During the pandemic, the city of Berlin developed the Digital Skills Map (DSM) to promote the sharing of ideas and encourage  “pan-EU dialogue around how digital developments are transforming the labor market. It also seeks to showcase the many effective interventions designed to boost digital skills, while giving a local voice to the EU debate around the future of work at the same time.” The success of Berlin and other cities across EU member states proves that there are benefits to the digital shift caused by the pandemic: businesses will no longer struggle to conduct work from peripheral regions, and both consumers and businesses have a better knowledge and understanding of digital tools. 

In contrast to Germany’s tech success story during the pandemic, a report from OECD revealed the devastating nature of the digital infrastructure challenges in the Western Balkans. The biggest issues in this region consisted of the low digitalization of households and the limited number of enterprises that were able to employ teleworking. The inability to shift to teleworking and digital work processes meant that businesses were far likelier to experience labor shortages caused by movement restrictions. Now that the pandemic has exposed the digital divide and the need for change, the European Union can actively begin improving digitalization within their Eastern European member states. 

Role of the EU 

The World Bank’s report on the digital dilemma in Europe reveals that there are three key goals for Europe’s digital future: “competitiveness, market inclusion of small and young firms, and geographic cohesion.” The report explains that for the European Union to achieve these goals they must better invest in the three types of digital technology, which are transactional, informational, and operational. Taking this information into account, the EU must now help member states including Bulgaria, Croatia, Poland, and Romania, to properly invest in technology creation and adoption. The report also details the distinction between the three most prominent digital technologies: transactional, informational, and operational. According to the World Bank, transactional technologies, mostly e-commerce related, are the only ones truly capable of achieving the European Union’s goals, due to their ability to bring together all forms of the digital sector. 

Bridging the divide between rural and urban areas is key to promoting technological development. Romania’s cities, such as Bucharest, have much higher rates of transactional technology initiatives compared with more rural areas where digitalization barely plays a role in local firms. Specifically targeting rural regions will also benefit the member state as a whole, as it will allow greater investment and collaboration between regions. 

The European Union should also work to promote telecommunication policies (policy concerned with the economic regulation of interstate as well as international communication, across the broader region). One way for Eastern European countries to improve digitalization is by driving competition through tech creation, but to do this they need to establish an institutional and legal environment that is ideal for tech development and can guarantee them the support of both public and private investors. Therefore promoting telecommunications policies is the quickest and most effective way to establish stability and legitimacy, thus drawing in external support. Ideally, states such as Poland and Bulgaria would create a telecommunications market with lower costs, greater competition, and a more diverse array of services provided. 

The Success of Estonia 

Despite many Eastern European member states being decades behind in regards to their Western peers, one nation stands out as an anomaly and example of the success of digitalization. Estonia, a former Soviet republic, has achieved the unthinkable. The nation state has achieved unprecedented digital success thanks to a variety of factors, and serves as a model for all other European Union member states.

The origins of Estonia’s digital success can be traced back to the early nineties when a group of amateur politicians developed a public digital architecture that specifically targeted IT. The goal was to promote IT as a public skill that would improve socio-economic skills nationwide. Estonia built up their digital network through the creation of small networks with dedicated government workers and support from the private sector. The collaboration between both public and private sector proved tremendously in creating a digital state which collaborated effectively. Since all sectors were being digitized at the same time, they were able to rely on each other for support and collaboration, such as the simultaneous development of cybersecurity alongside the online banking sector. Much of Estonia’s success can be attributed to its young politicians who possessed the energy and drive to completely rebuild Estonia, the close networks already in place, and their decision to digitize right as the internet was entering the mainstream world. However, there are still aspects of Estonia’s success story that other countries can copy. 

Estonia focused on convincing their citizens of the benefits of digitalization early on by creating digitization projects specifically designed to make their citizens' lives easier; this helped to convince skeptics and united the population. The digital Estonian ID card was launched in 2002 with a digital signature in place to allow citizens to make legally-binding decisions remotely and use their digital signature to easily sign documents. When asked about his country’s success, Chief Information Officer of Estonia, Siim Sikkut, stated that “ Digital leadership needs to be continuous across different administrations. This also involves a deeper understanding of the need to educate not just the wider society, but also government officials behind the transformation.” He also stressed the importance of creating a streamlined and efficient system: “one of the most important factors that helped streamline the government structures, authorities and databases is  the once-only-principle which exists to this day. This means that any type of data related to an individual can only be collected by one specific institution, thereby eliminating duplicate data and bureaucracy.” Studying the principle factors behind Estonia’s success reveals that other Eastern European countries must first focus on creating transactional technologies that better their citizens' lives through transparent, cooperative, and efficient digital systems. 

The EU’s Future in Eastern Europe

Closing the digital divide between East and West also begs the question: What would a digitally united and equal European Union look like? There are a multitude of ways in which digital cooperation would improve the EU’s status both on the continent and internationally. The end of the digital divide would help unite EU member states and promote the overall stability and success of the European Union. It would ease the burden felt by states such as Germany, Finland, and Estonia, who currently possess strong digitized systems, and allow then to confidently invest in the CEE countries (Bulgaria, Croatia, the Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia). The CEE countries do not possess the same economic power and stability of the ‘Big Four (France, Germany, Italy, and Spain) who do not need to rely on digital innovation efforts to promote their economies and international investment. However, greater digital innovation would most certainly draw in international investment which would strengthen Eastern European member states and the EU by extension. 

The  European Union is considered by many to be the leader in data privacy regulation. The institution has set precedents through its legislation that have created global benchmarks through privacy regulation. Despite angering many American tech companies through their strict enforcement of data protection legislation, the EU has remained firm even in the face of outlash from Google over the Digital Markets Act which prevents Google and Apple from collecting data from different services to offer targeted ads without users’ consent.  By demanding data protection of their member states and the outside world, the EU has been able to shape the global standard through its creation of the General Data Protection Regulation (GDPR) which has become the de facto global network. However, implementing greater digitization efforts in Eastern Europe would also provide the EU to ensure that their data protection regulations are more deeply ingrained throughout the continent and provide more opportunities to demonstrate the norm of implementing data privacy regulations in states with newly developing technologies. 

The past decade has severely weakened the European Union. Brexit, a damaged relationship with the US, China’s growing desire for tech domination, and now Russia’s invasion of Ukraine has damaged the EU’s internal and external reputation as a strong and powerful institution, but by solving the digital divide the EU would show the world the strength of their initiatives and their dedication to improving access to technology for citizens across all member states. Closing the digital divide does more than benefit the CEE countries, it also allows the EU the chance to redefine itself in the face of Russian aggression, Chinese domination, and American tech companies' anger over data privacy regulations.

A New Far-Right: How Éric Zemmour Stole Votes and Media Attention from Marine Le Pen throughout the French 2022 Presidential Election

The 2016 US presidential election may feel like a bygone era after several tumultuous years, but in France an eerily similar situation appears to be playing out reminiscent of Donald Trump’s rise to power.

 A mere six months ago Marine Le Pen, leader of France’s far-right party, the National Rally, appeared to be in a strong position for the upcoming French presidential election, despite her presidential loss in 2017. President Macron’s image and stronghold appeared to be failing thanks to his inability to control the ongoing pandemic and resentment over his tax policies and stance on immigration, whereas Marine Le Pen had maintained her supportive base, and used Macron’s failures to instigate disdain against him, thus growing her base.  

Yet in a series of events not unlike former President Trump’s campaign to the White House, another far-right candidate, Éric Zemmour, has entered into the French political arena. By many standards Éric Zemmour is a man of contradictions and hypocrisy, who has used his career as a journalist and author to routinely attack modern day French society. 

Who is Zemmour 

The son of Algerian, Jewish immigrants, Zemmour grew up in Paris where he started his career working as a newspaper journalist, before switching to radio and television. Zemmour’s main success comes from skills as a television presenter and author. He has mastered the art of controversy, routinely making xenophobic, racist, or sexist remarks, and yet frequently avoiding the social judgement that comes with his many convictions and fines of racial hatred. 

Zemmour’s Jewish identity has not prevented him from making anti-semitic public statements and promoting false statistics in regards to French complicity with the Vichy Regime of World War II. During a segment on CNews (a French far-right TV channel), Zemmour falsely claimed that Vichy sought to protect French Jews throughout the War, despite there being no such evidence to support this statement. Zemmour appears to show no recognition or connection to the immigrant experience of his parents, notoriously claiming that unaccompanied migrant children were essentially “rapists” and “murderers.”  

Zemmour’s appeal stems from a variety of skills and political tactics that he has manipulated throughout the election process. His provocative statements have struck a chord with voters, similar to the way Trump won over support in 2016 by saying the unsayable. Additionally, Zemmour’s status as a public figure, not a former politician, has helped him present himself as an alternative to the routine figures seen within the French political system. As the son of immigrants, a Jew, and alumnus of the elite SciencesPo university Zemmour is able to navigate a variety of identities that he can use as a form of protection against criticism. His Jewish identity has enabled him to make antisemitic comments without fearing reproach, and his academic prowess has given him a seat at the table amongst the other intellectual elites of his generation. The complexity of Zemmour’s character and identity allows him to attract a variety of voters from diverse backgrounds, but his best trait according to French voters? He is not Marine Le Pen. 

Le Pen’s weaknesses

Despite bringing the National Rally Party into the French presidential arena, Le Pen has struggled to shake off the image that is routinely associated with her and her party. The French have become accustomed to the National Rally party, ever since its creation in the late seventies. Under her father, Jean Marie Le Pen, the party achieved political success, but it was known mostly for its scandals and provocative political tactics. Since taking over the party from her father in the early 2010’s, Le Pen has done her best to modernize the National Rally, even going so far as to change its name from the National Front to the National Rally. She lost badly to Macron in the final round of the 2017 presidential election, but France was still forced to admit she had taken the party to new heights. Yet for all her efforts Le Pen has been unable to shake the older image of the National Rally; her usage of modern far-right political issues, such as promoting anti-immigration discourse and populist sentiments have resonated with voters, but her party is still seen as it was during her father’s reign when the National Rally represented Holocaust denial and pension reform. Ultimately, Zemmour’s biggest advantage stems from the fact that he has no association with Le Pen or the National Rally party. He represents the new French far-right, and thus can use his clean slate as a tool for success. 

Throughout his campaign Zemmour has frequently either ignored or humiliated Le Pen. He has declared himself to be the only true far-right candidate, insisting that Le Pen has betrayed France by embodying the centrist right. He also exploited tensions within Le Pen’s own party by welcoming former National Rally figureheads to his campaign, such as Jérôme Rivière and Gilbert Collard who were former spokespeople for the National Rally. Marine Le Pen’s own father, Jean Marie Le Pen (who has a fractured relationship with her) has shown little family loyalty in an interview where he declared himself to be both sympathetic and supportive of Zemmour. The former leader of the National Rally also emphasized when he sees as an advantage of Zemmour: “The only difference between me and Mr. Zemmour is that he’s a Jew, so it’s difficult to qualify him as a Nazi or a Fascist…That gives him great freedom » Jean Marie Le Pen’s comment also acknowledges the inconfortable the truth that many have been reluctant to admit: Part of Zemmour’s success in being viewed as a legitimate far-right candidate is that his Jewish identity gives him a minority status that protects him from political and cultural reproach. Zemmour can be critized for racism, sexism, and xenophobia, but he does not have to deny associations of Nazism, unlike many other current and former far-right politicians who are known for their fascist associations. Le Pen is thus facing both the expected reality of a tense political election between rival candidates, but also dealing with the unexpected betrayal of her party members. 

Zemmour’s triumph over Le Pen also stems from the political image that he has artfully crafted throughout his campaign. Both Le Pen and Zemmour have frequently drawn upon figures from France’s past throughout their campaigns, as they paint the picture of a return to the time when France ruled the continent. Le Pen has frequently evoked the image of Joan of Arc, presenting herself as a modern savior of France. With a pension for historical myths and legends, Le Pen often emphasizes France and Joan of Arc as a historical symbol of Christianity and purity in a modern and corrupted world. However Zemmour has taken a more modern historical approach, modeling himself off another « hero » of French history: resistance leader and former president, Charles de Gaulle. 

Zemmour as De Gaulle 

Despite his far-right politics, Zemmour’s video announcement of his 2022 presidential campaign showed an intense correlation with Charles De Gaulle’s famous speech calling for the liberation of France during World War II. Zemmour declares his presidential bid in the video while reading into an old fashioned microphone while barely making eye contact with the camera. The imagery is intense and reflects the exact movements of Charles De Gaulle in his famous speech on resistance, recognizable all across France. Zemmour’s decision to portray himself as Charles de Gaulle may appear to be an unlikely choice, given the two men’s differing political viewpoints (gaullism, a mixture of populisc liberalism and conservatism versus Zemmour’s obvious populism), but by aligning himself with one of France’s most well known and well respected war time leaders, Zemmour is convincing viewers of his legitimacy. Zemmour has succeeded in aligning himself with historical figures in a way that Marine Le Pen has not. While Le Pen has sought to reshape France into its mythical past of glory and tradition, Zemmour has focused on celebrating contemporary concrete history - a tactic that has clearly resonated with voters.

Zemmour also models himself off of more recent leaders, such as Donald Trump. Although he possesses the sophistication and vocabulary that former President Donal Trump notoriously lacked, Zemmour’s speeches reveal similar themes to Trump’s. During a speech in December, Zemmour stated that “We are a great nation, a great people. Our glorious past presages our future. Our soldiers conquered Europe and the world!” He added later that, “we will be worthy of our ancestors. We will not allow ourselves to be dominated, turned into vassals, conquered, colonized. We will not allow ourselves to be replaced.” Through his speeches Zemmour reveals the same populist tactics that won over millions of Americans in 2016.

Uniting the far and center right 

Zemmour has also succeeded in ways that Le Pen has failed to do through his ability to unite the center and far-right. Thanks to his pedigree, educational background, and magnetism, Zemmour is able to establish himself as a legitimate intellectual and man of culture. He has the academic credentials that allow him to remain within the status quo, which is a useful tool when appealing to the more traditionally conservative and rigid center-right. Le Pen has never succeeded in this field, due to issues such as her gender, family history, and the national image of her party. However, thanks to the many aspects of his identity and political tactics, Zemmour can present himself as an antidote to the decades long tension between the far and center right. He offers voters on both sides the chance to unite for a populist candidate, because he can also guarantee center-right voters the promise of stability and status-quo that they are accustomed to. Zemmour has taken Le Pen’s weakest points and used them against her; in areas where she has failed, he has won. It is no wonder that the two candidates would have such strong feelings against each other. Earlier this month in an interview for Figaro, Le Pen accused Zemmour of attempting to “kill” the National Rally, depicting him as a man who seeks destruction along with victory. Yet her intense feelings on Zemmour also reveal a harsh truth for the National Rally: Zemmour has beaten Le Pen at her own game.

Italy’s Never-Ending Political Crisis: New Prime Minister, Old Challenges

Introduction

Italy, the European Union’s third-largest economy, is well acquainted with political uncertainty. Its crisi di governo are incredibly frequent, resulting in 19 different governments since the fall of the Berlin Wall, with each having an average lifespan of slightly over 18 months. No strangers to political restructuring, Italians have seen their fair share of snap elections, coalition construction, and new prime ministers.

This winter’s political turmoil followed this trend. The government of Giuseppe Conte collapsed following disagreements over the distribution of coronavirus relief funds. After Conte failed to patch together a new coalition, President Sergio Mattarella tapped a replacement: Mario Draghi, the former European Central Bank chief who famously promised to do “whatever it takes” to save the euro. His new government is unique, as University of Birmingham Professor Daniele Albertazzi notes, in that it includes almost all major Italian parties from both the left and right wings. They certainly don’t call him “Super Mario” for nothing.

But it also includes a roster of many ambitious politicians, all with their own divergent political motives. Amidst a pandemic that has claimed over 100,000 Italian lives at the time of writing and decimated the economy, Draghi radiates hope. However appealing and necessary he may be at the moment, including to a wider Europe, his success in forming a government likely does not end Italy’s persistent political minefield. Regardless, Draghi’s entry offers an opportunity to investigate the roots of Italian political discord and the challenges they pose for one of Europe’s most crucial countries.

Politics As Usual

The 2010s saw the end of longtime Prime Minister Silvio Berlusconi’s controversial tenure and the shock waves of the global financial crisis, which devastated Italy. After a series of mainstream leaders, voters punished traditional parties in the 2018 parliamentary elections, instead favoring two populist Eurosceptic alternatives: the left-wing Five Star Movement (Italian: Movimento Cinque Stelle) and the far-right League (Italian: Lega). The resulting government chose Conte as prime minister, an unknown lawyer accepted by President Mattarella. Against the odds, Conte maintained his post through two governments — including by presiding over a second cabinet of erstwhile enemies Five Star and the Democratic Party — and maintained impressive approval ratings. The christened “people’s lawyer” seemed to be Italy’s new rising star.

The coronavirus pandemic only deepened public faith in Conte. But when it came time to oversee relief funds issued by the E.U., conflict brewed with a small party in his coalition: Italia Viva, started by former Prime Minister Matteo Renzi. The “Demolition Man,” as Italians know Renzi, lived up to his name by pulling his ministers, thus denying Conte his parliamentary majority and triggering his departure. President Mattarella, as Renzi likely wanted all along, tapped Draghi to move forward. Renzi may note that he owes this effective political maneuver to the fact that he hails from Florence like Niccolò Machiavelli; yet however successful he was, his low approval ratings suggest Italians see him as more of a dunce than a prince.

The ensuing unity government, buttressed by parties across the political spectrum, has fostered a sense of optimism among many. However, these parties and their leaders are rather strange allies, likely united more by opportunism than patriotism. This haphazard cast of characters presents a key challenge for Draghi: to keep all satisfied in perpetuity, even those who may find incentive to work against him. Like before, politics remains in flux, contributing to sustained unpredictability. Regardless of this, the new administration is a temporary boon: after some weeks of volatility, a nation enduring sweeping health and economic crises has regained leadership under an undeniably competent figure. But it remains to be seen if Draghi can maintain a dynamic enough presence to put an end to the constant infighting that has come to emblematize Italian politics, or if he even wants this role for long. Many of his new bedfellows have their own aspirations; likely, Draghi is just one more cumbersome step in the way toward political success. With an election set for early 2023 at the latest, it is conceivable that future maneuvers may imperil Draghi’s government before then and thus reopen the floodgates.

Five Star and PD: Changing Fates on the Left

The Five Star Movement’s (M5S) considerable victory in 2018 gave it the most seats in parliament. It was founded by comedian and blogger Beppe Grillo in 2009, famous for encouraging vulgar protests against the political class. More confounding is its ideological position; scholars Lorenzo Mosca and Filippo Tronconi find it does not fit neatly on the left-right spectrum, but instead advocates an “eclectic populism” of sorts. It has prioritized some key left-wing positions like strident environmentalism and a reddito di cittadinanza — a universal basic income — in combination with Grillo’s key ingredient: fury against the elitist, corrupt governing casta, which encompasses both domestic elites and external ones, like the E.U. While victorious at the polls, this stance made the transition into governance quite difficult. It has, albeit at different times, partnered with both the rightist League and its erstwhile enemy, the Democratic Party, as part of fractious coalitions.

Today it stands at risk of political implosion. At near 15%, M5S polls below the Democrats and two right-wing competitors. Its partnerships with other parties likely make it less authentic to many who supported it in a rage against the machine. When they asked their supporters online whether or not to back Draghi, a tepid 59% responded ‘sì,’ even with a question with wording some considered skewed to favor this outcome. On the day of voting to confirm Draghi’s government in parliament, at least 15 M5S members voted against him; more party defections have followed. Many cited working in coalition with Berlusconi as the final straw.

Even so, new elections would likely yield substantial losses. Thus the technocratic, establishment Draghi is a bitter pill to swallow, but digest it M5S must for now. (One development to watch is if Conte accepts offers to serve as a new party leader, which some polls suggest could revive M5S’s support.) Meanwhile, the center-left Democratic Party (PD) has reversed its fortunes since 2018, when it won the fewest number of votes in its history, and is now rising again in the polls. With Renzi having broken off for his personal Italia Viva project, the PD has again become a force that could improve its standing in the future. All three parties have joined forces with Draghi to govern. Whereas M5S is making a largely tactical move, PD and Italia Viva have a prime minister much more to their liking — for now at least. Draghi’s success and brand could also help rejuvenate theirs if he remains popular. 

Salvini and Friends: The Shadow of the Far Right

The right side of Italy’s political equation, on the other hand, includes some of the country’s most notorious politicians. The ubiquitous Matteo Salvini of the League is a far-right, Eurosceptic populist and immigration hardliner with a formidable social media following. As the former Minister of the Interior, he proudly denied boats carrying migrants from docking, contrary to international asylum principles. He also impressively helped to transform the League from a pro-northern, anti-southern regionalist party to a full blown right-wing populist outfit. Considering this political acumen and popularity, Salvini has certainly earned the title of “most feared man in Europe.”

His decision to back Draghi is a strategic one as well. The term ‘far-right’ has been an albatross around the League’s neck, and at the urging of some in parliament and a sizable northern moderate constituency, Salvini has chosen to downplay his Euroscepticism and support a mainstream government. The last time he saw an opportunity — albeit one that did not go quite as planned — to sink a government to consolidate power in a snap election, he did so. Salvini, without doubt, wants to be prime minister one day, and could bargain to collapse the government eventually if he smells blood. He would also have some allies to fall back upon. The right-wing Brothers of Italy (Italian: Fratelli d’Italia, FdI) has gained markedly in the polls, picking up much of any support Salvini has lost, claiming the title of Italy’s third most popular party at the moment. A consistent far-right option, party leader Giorgia Meloni could be a potential ally to Salvini, sharing his views on immigration, Islam, and other social matters. More than this, she has chosen to steer clear of joining Draghi’s government, allowing her to receive attention as the opposition and remain insulated from potential government controversy. The brash Berlusconi and his Forza Italia (FI) party have also reentered the limelight, granting support to Draghi.

For all the fears of a Marine Le Pen victory in France, Italy could very easily produce a far-right government in the hands of Salvini, with the backing of Meloni and Berlusconi. In the event of another shakeup, Salvini and Meloni likely fare well in elections and could be ready to form a replacement bloc. This is not to say the two do not also have reason to compete; if Brothers continues its growth and League remains on its current trajectory, their positions on the hierarchy could switch, rendering them Italy’s premier electoral competitors. Yet it is clear that Salvini’s ambition, which sometimes requires him to water down some positions and rhetoric, even those positions which have become integral to his identity, is not purely ideological. His will to power is clear.

Draghi’s Challenge and Italy’s Purgatory

“Why Italy wants Mr. Draghi is easy to see,” commented the Wall Street Journal Editorial Board, but “why Mr. Draghi wants the job… is a mystery for the ages.” It is true, premiers receive few thanks and suffer many headaches, as governing in Rome has not been easy. The last time a technocrat rode in on a white horse to “save Italy,” it was Mario Monti, who shepherded bitter austerity measures from 2011 to 2013. This time, explains Carlo Invernizzi Accetti of Foreign Policy, the E.U.’s coronavirus recovery aid will help Rome avoid this fate again, but this presents the challenge of how best to distribute it, a lesson Conte learned all too well. Draghi could be successful in reversing long-term decline in Italy’s economy using new stimulus, but could be constrained by entrenched obstacles and the need to satisfy his new allies as well.

Many politicos also favored Draghi in order to avoid new elections, which many see as an invitation for a right-wing, decidedly Eurosceptic coalition to enter government. But this is quite a double-edged sword. However successful he may be, selecting leaders in this fashion is an unsustainable strategy, as it simply pushes off inevitable consequences at the ballot box. Moreover, it can serve to shake faith in establishment politics. Continuing to push forth a chosen savior, technocratic figure when the going gets tough can create popular mistrust, fueling the rise of anti-establishment challenger parties. The potentially fractious nature of his coalition means that, beyond just governing, Draghi will need to hold together quarreling parties while also preserving his own political aspirations. Rumor has it he may hope to replace Mattarella as president in the coming years, for which he will need the continued support of parliament. 

What is clear is that Italian politics have become no simpler. Draghi may have calmed the waters, but sharks still circle. The party system fluctuates over the span of a few years, leading to rapid change, inconsistent fortunes, and inherently unstable compromise governments. Short-lived coalitions, however, have been endemic to Italy throughout its postwar democracy. But in an era where economic circumstances have changed, usual institutions are under duress, and the impacts of a global recession a decade ago continue to reverberate, Italy — and other European countries — suffer from this uncertainty.

Looking Abroad

Despite its large economy and cultural significance, Italy has a less prominent profile in European affairs than one might expect. As Karolina Muti and Arturo Varvelli at the European Council on Foreign Relations note, despite Italy’s rather consistent pro-European and transatlantic sentiments, “chronic internal instability tends to undermine its credibility and reliability in the eyes of both NATO and EU allies.” Increasingly though, Rome seeks a more outsized role in security, including by bolstering its military capabilities as part of a European framework and settling issues like the Libyan conflict on favorable terms. Draghi seems well positioned to bolster Italy’s profile within the E.U., given France’s Emmanuel Macron is concerned with his own reelection fight next year, Germany’s Angela Merkel is in the final year of her chancellorship, and the United Kingdom has sailed away. If successful, he could conceivably play a role in mitigating the dominant Franco-German partnership over the E.U. and reorient Rome as a renewed ally for Washington. In fact, there is reason to believe that U.S. President Joe Biden’s administration may be celebrating Draghi, especially as it looks to rejuvenate the transatlantic partnership.

Other European leaders also have reason to pray for his success. After all, the rise of Eurosceptic parties in Italy is hardly comforting and Draghi may well stave them off for long enough. The prospect of real reform in one of Europe’s most debt-ridden economies is also cause for cautious celebration. Last but not least, Italy is a founding member of the E.U. and a beacon of culture and history for the continent with untapped potential in the modern era. But the distinct possibility of a short-lived government dampens long-term hope. The favorable reception to Draghi is probably not sufficient to keep allies from fearing they may have to communicate with a new voice in Rome in due time. On the other hand, if Draghi manages to position Italy well during his tenure, it could provide an incentive for future governments to continue on a similar — or at least not totally dissimilar — path.

Conclusion

Draghi is clearly a capable leader for uncertain times in Rome. However, his arrival does not resolve the existing factors driving frequent turnover in Italy’s government. The party system fluctuates often, contributing to unpredictability and troubling discontinuity. Euroscepticism and populism have become part of mainstream politics, while the establishment increasingly relies on selected technocrats to hold together temporary coalitions. It is worth noting that Italy has long experienced this sort of turmoil, but modern trends like rising debt and shaken faith in the European project make them all the more worrying. If Rome could stabilize its politics, pursue fiscal reforms without resorting to austerity, and augment its role in foreign affairs, it could shake many of the stumbling blocks and fault lines which have grown to characterize its civic identity. Draghi certainly has his work cut out for him, but could begin to tackle these challenges if his premiership ultimately proves successful. Thus, the hope for Italy is not that he is simply triumphant, but that he is transformative.

Want to Close the Gender Gap in Finance? Start with Financial Supervisory Authorities

In 2018, during the buildup to an early November vote on the European Central Bank’s (ECB) next top supervisor, an influential member of the European Parliament implied that the candidacy of Sharon Donnery, deputy governor of Ireland’s central bank, owed its strength to Donnery’s gender as opposed to her qualifications. Whether this pronouncement contributed to Donnery’s subsequent loss to her male competitor is disputable. What the remark did achieve, however, was resurfacing the discussion about the relevance of gender balance in regional financial governance – a discussion that continued gaining prominence with Christine Lagarde’s appointment as the president of the ECB. 

In 2016, the European Banking Authority (EBA) – a regulatory body of the European System of Financial Supervision (ESFS) responsible for overseeing the “integrity, efficiency, and orderly functioning” of financial institutions across the European Union – published a report on the diversity practices of European credit rating agencies and investment firms. The only ESFS document to address gender inclusivity since the System’s creation in 2011, the report scolded private financial institutions for the disproportionately low number of women on management boards. However, the EBA’s own track record in gender diversity has only contributed to the invisibility of half of Europe’s population in the financial sector.   

Women comprise only 27 percent of the membership of the EBA’s governing, appeal, and advisory bodies, a modest increase of 5 percent from 2018. This includes the Board of Supervisors, which makes all policy decisions of the EBA, and the Management Board, responsible for the administration of the EBA’s operations. This figure even applies to bodies mandated to promote and protect diversity. The Banking Stakeholder Group, a major EBA advisory group valuable due to the “variety of perspectives and expertise that its diverse membership brings to the table,” is less inclusive than its mission suggests: a mere eight of its thirty members are women. 

As EBA officials themselves stated in the 2016 diversity report, homogenous decision-making entities are susceptible to groupthink and herd behavior. In a major regulatory authority like the EBA, these two phenomena can make it harder to spot shortcomings in governance and risk management practices that drive financial systems into crises, as they did in 2008. Indeed, a recent International Monetary Fund (IMF) study of 115 countries found that a lower number of women in financial oversight institutions is associated with a poorer quality of supervision and overall banking stability. Despite its potential benefits, gender parity in financial supervision remains the least well-studied and well-documented dimension of financial inclusion globally, the study noted. 

However, whether the 2008 crisis could have been avoided if Lehman Brothers had been Lehman Sisters is not the question ESFS officials should be focusing on. More important, the current composition of the EBA boards hampers the implementation of the European Commission’s post-2008 crisis strategic agenda, within which gender equality is not only a driver for more effective decision-making, but also an affirmation of fundamental EU values. 

Addressing gender imbalances in ESFS decision-making bodies can be challenging due to idiosyncratic board selection processes. For example, the EBA’s male-dominated Board of Supervisors comprises the heads of the national banking supervisors from each of the 28 EU member states. The EBA, as well as the broader ESFS network, has no direct control over the gender composition of governmental financial sector regulators, which oftentimes fall under the authority of national central banks. There, an even grimmer picture of women’s representation emerges: men constitute 79 percent of members of key decision-making bodies and 96 percent of central bank governors in the European Union. 

Nonetheless, the EBA can still contribute to achieving a gender-equal Europe while avoiding infringements on national interests and prerogatives. Building on the experience of the European Central Bank in introducing an explicit diversity agenda, the EBA can set long-overdue gender targets for the Banking Stakeholder Group. Since the group consists of interested parties outside of national authorities, the EBA can influence the group’s gender composition without compromising the sovereignty of European states. The Joint Board of Appeal is another EBA body whose independent, if opaque, selection process provides an opportunity for better diversity practices. Clearly, the EBA has sufficient autonomy in appointing and approving members of some of its critical decision-making bodies. What it lacks is willingness to utilize that authority to ensure women are equally represented.

The EBA is the watchdog of the European banking sector. Its treatment of gender diversity sets a standard for financial institutions across the EU. Women’s lack of representation in authoritative oversight entities reduces the already low likelihood that gender equality will be prioritized on regional and private institutional agendas. Setting concrete gender targets for EBA decision-making bodies whose gender composition is not controlled by national authorities would be a needed step toward giving women voice in the formulation, implementation, and assessment of policies that affect both providers and receivers of services throughout Europe’s entire financial sector. 

As a regulatory authority with the power to shape the gender diversity practices of thousands of financial institutions, the EBA must lead by example and demonstrate a genuine commitment to inclusivity. Until it does so, its demands to increase the visibility of women in the private sector will seem at best unconvincing, and at worst insincere. 

The Deficit the EU Should Really Worry About Is Not Fiscal – It’s Democratic

Earlier in February, the European Commission – the executive arm of the EU – published a report outlining a pessimistic economic outlook and persistent substantial market risks in the region, with the projected real GDP growth rate under 2 percent for 2020. The report came at a time the strength of European institutions is tested not only by poor macroeconomic indicators but also by declining citizen confidence in the ability of supranational governance to be transparent and accountable. According to a 2018 Eurobarometer poll, less than two-thirds of Europeans are satisfied with the opportunities for individual citizens to participate in political life. More alarmingly, voter turnout for the European Parliament elections has fallen by over 30 percent since 1980s and now constitutes only 40 percent of the EU population.

Weakening citizen trust – the main symptom of the EU’s growing ‘democratic deficit’ – and worsening economic performance are, however, not just coinciding with one another by chance. The perceived legitimacy of the EU, more so than that of the majority of political arrangements, is highly dependent on its delivery of satisfactory economic results to member-states. Economic self-interest, as illustrated by Britain’s break from Brussels, is a powerful driver of both regional integration and disintegration. Despite the limitations of examining the European project through a performance efficiency lens, the notion that a single common market – with standardized regulations and supervisory mechanisms – is good for member states continues to prevail in explanations of the EU’s emergence and survival.

The 2010 crisis, low levels of growth, high unemployment, and Italy’s current standoff with Brussels over its 2019 budget all undermine result-based legitimacy of the EU and can leave lasting damage on its authority. National governments and the public might be prompted to question the economic desirability of staying in the Union. While unlikely to follow the path of the UK and withdraw completely, countries can potentially model their conduct after Italy and undermine the internal cohesion of the EU by disregarding its rules.

No less urgent are concerns about the transparency and accountability of the European system of governance, oftentimes perceived as an elitist, unelected technocracy. Many citizens believe that supranational decision-making is becoming only more inaccessible to them due to its increasing complexity. The worsening of regional democratic deficit manifests itself in lower voter turnout and overall weaker citizen support for the European project.

The perceived failure of regional institutions to provide member-states with clear and otherwise unattainable economic benefits and the unresponsiveness of EU governance to the concerns of ordinary citizens both pose a major threat to the continuous success and even survival of the European project. However, the debate surrounding these two shortcomings of the current institutional setup not only tends to overlook the interconnectedness of the two issues but oftentimes portrays democratization of regional governance and economically optimal outcomes as being at odds with each other. From the ancient Greeks to the modern-day libertarians, the ‘short-sightedness and ignorance’ of the masses are cited as the reasons institutional arrangements – especially in spheres so technical as fiscal and monetary policy – should be protected from excessive popular influence if they are to yield desirable results. In the sphere of European economic and financial governance, however, the opposite seems to be true.

The undemocratic procedures by which European budgets and money are managed erode not only citizen confidence but the performance efficiency of European institutions. Greece provides perhaps the most telling lesson in the importance of transparency and accountability in economic governance on the national level, which is no less applicable to supranational institutions. It was, after all, falsification of data on the levels of sovereign debt that triggered the country’s crisis in 2010 and its subsequent spillover into the rest of the eurozone. The Greek government’s failure to accurately report on the country’s financial standing led to dramatic downgrades of Greek government bonds and overall reduced the attractiveness of the country’s financial markets.

That same year, several EU audit institutions published a joined report that acknowledged the importance of fiscal transparency and proper oversight of public finance management in crisis prevention and mitigation. Following the financial turmoil of 2010, a new strategy for the development of the European Monetary Union (EMU) identified “democratic legitimacy and accountability” as one of the five building blocks forming a more robust monetary system. All in all, EU officials seem to be coming to the realization that democratic accountability is more than a just complementary dimension of political legitimacy. It is an essential component of a sound economic and financial structure, upheld by both voter and investor confidence.

The unwillingness of technocratic elites to introduce democratic controls to the procedures that govern EU’s financial and monetary affairs will only strengthen the appeal of populism. Arguments pointing out the benefits of a technocratic form of governance over national economies and public finance are typically underpinned by the assumption that the average voter cannot be trusted with control over her country’s power of the purse. Such contempt for the ordinary citizen is what gives validity to claims like that of Michael Grove, who, at the height of Brexit, announced that the UK people “have had enough of experts.”

What makes technocratic arguments more dangerous is their propensity to shy away from the evident need for greater economic and financial literacy among the populace. Aside from the established associations this form of literacy has with countries’ national prosperity, citizens with a clearer understanding of the issues discussed away from the prying eyes of the public have better chances of becoming legitimate participates in policy debates that affect their everyday lives. It is, of course, unreasonable to expect an ordinary European to acquire the technical expertise necessary to understand all the intricacies of fiscal and monetary affairs of their countries and the EU, yet unelected officials deliberating on vital issues behind closed doors out of an irrational fear of the masses should seem no less absurd.

Security Implications of Post-Brexit Fragmentation in European Financial Governance

Combating illicit finance, ensuring the stability of capital markets, and preventing crises are not purely financial concerns anymore. Not only has the relevance of military power arguably declined and that of economic power rose since the end of the Cold War, but financial markets themselves underwent major securitization. Budgetary and financial considerations have always constrained foreign policy, but finance and security now merge in less obvious ways. The intensified surveillance of banking after 9/11, rising popularity of financial, rather than trade, wars, and the growth of government interest in acquiring financial data are all making it ever more difficult and dangerous to treat the governance of finance and security as only loosely connected.

The expanding overlap between finance and security should raise additional concerns over the so-called “Brexodus,” the shift of financial power and competence away from the UK and toward the Continent. The UK’s loss of access to the integrated financial market will not only hit bankers and investors. Its implications are of national, regional, and global security importance. The European Supervisory Authorities (ESAs), created to integrate financial supervision within the EU, are now preparing to relocate the headquarters of its major regulatory agency, the European Banking Authority (EBA), from London to Paris. The UK’s departure from the EU will exacerbate preexisting gaps in cross-border cooperation in combating illicit finance, which previously allowed for the movement of dirty funds revealed in the Panama Papers and the Global Laundromat series. Meanwhile, British firms continue to benefit from massive inflows of foreign capital, a significant portion of which the British government believes to be laundered, and London remains one of the most attractive destinations for potential ‘golden visa’ holders. Considering the reputation of the city as the money-laundering capital of the world, the relocation of such a prized regulatory body as the EBA is an especially salient issue, since Britain will now have to assume responsibility for building an independent administrative capacity to counter the estimated £90 billion worth of illicit financial flows that go through London each year. This number constitutes a staggering 17 per cent of total global money laundering – an amount challenging to handle in the absence of Europe’s regulatory framework the UK will lose access to. Having more than one-sixth of the world’s money laundering transactions face less regulation than ever before opens new opportunities for proliferation and terrorism financing, let alone tax evasion and anonymous shell companies.  

Back in 2016, British authorities lamented the deterioration of the UK’s status as a world leader on anti-corruption due to the continuing lack of transparency domestically. Now, its reputation as the upholder of European financial market stability is under threat, too. More than 90 percent of the euro-denominated derivatives business of euro banks are currently cleared via central counterparty clearing houses (CCPs) in the UK. Central clearing is a crucial function of the global financial system that ensures investors can access liquidity in multiple currencies across multiple markets. Britain handles the majority of euro banks’ interest rate and credit derivative transactions, as well as a significant number of commodity and equity derivatives. In light of Brexit, EU experts worry the potential CCP failure will result in massive, volatile movements in the comparative cost of using UK CCPs, which might trigger the transfer of hundreds of thousands of trades worth trillions of euros. Such disruption is likely to cause a liquidity drain and erode profitability in the short-run and leave systematic consequences on the global financial system in the long-run. With those concerns in mind, Yves Mersch, Member of the Executive Board of the European Central Bank, encouraged EU authorities to consider taking action to ensure the Eurosystem has adequate control over the impact of clearing activities in the UK. What it ultimately means is a transition towards a new European and global clearing system, over which London will have considerably less influence. Such a dramatic departure from the “London-centrism” of regional financial markets will undoubtedly give Britain more autonomy, but it will also weaken the UK’s ability to impose its preferences on regional and, consequently, global financial governance.

Some view fragmentation of financial governance as less detrimental, claiming it decreases chances of systemic risk due to more diversified and thus more robust regulatory systems. Jon Danielsson of London School of Economics and Political Science argues that divergent governance regimes protect against synchronized reactions of financial firms – one of the few mechanisms capable of triggering a collapse of an entire financial system. However, many consider it undesirable for the new British regulatory system to differ too dramatically from that of the EU. Fearing Brexit might pose a systemic risk not just to the domestic market but to the global financial system, Piers Haben, Director of Oversight at the European Banking Authority, has called for Britain’s exit from the EU’s financial system to be “as smooth as possible,” implying that the UK and EU should not do much to alter their regulatory regimes. Depending on what side of the argument one is on, Brexit can mean both greater and lesser systemic risk. What is certain is that there should be a balance between centralization, which provides convenience for market participants, and decentralization, which mitigates risks. Achieving such delicate balance requires key actors’ trust in one another and an environment conducive to successful negotiations. Brexit is very unlikely to encourage either of these things.

On the Continent, however, things are not looking entirely grim for the future of financial governance without extensive British involvement. While the prospects of a hard Brexit are becoming more and more likely with each week of unsuccessful negotiations, European financial governance is growing its emphasis on operational, rather than regulatory, functions, both regionally and globally. Scholars speculate that the UK’s presence in the EU was, in fact, a major friction preventing the euro area from further centralization of institutional governance. Now that this impediment is removed and the political support for a financial union is sufficiently high, the ESAs will find it easier to come to cooperative positions without the need to factor in the peculiar preferences of the largest financial market in Europe. The ESAs will be able to take a more assertive position and assume a more prominent role internationally. “If you’re tired of London, you’re tired of life,” the famous saying goes, but Brussels will have no choice but to make the most out of its inevitable break from the City.

Is This the End of a Free Internet in Europe As We Know It?

The Directive on Copyright in the Digital Single Market, also known as the EU Copyright Directive, is a proposed European Union directive intended to give the European Union a singular and universal copyright law, while moving towards a Digital Single Market. The Copyright Directive was first introduced by the European Parliament Committee on Legal Affairs on June 20, 2018. Just recently, as of  September 12, 2018, the European Union approved the directive and will enter formal discussions expected to conclude in January 2019. If ratified, each of the EU's member countries would then be required to enact laws to support the directive.

The EU says their main goal for pushing this directive through is to protect press publications, reduce the “value gap” between the profits made by internet platforms and content creators, and encourage collaboration between the two latter groups. This directive has gained a lot of media attention because of Articles 11 and 13.

Article 11, the “link tax,” and would require websites to obtain a license before linking to news stories. This specifically gives press publishers direct copyright over use of their publications by internet platforms like online news feeds. Some critics of Article 11 have said that this part of the law might stop ordinary web users sharing news stories, but the text of Article 11 does exempt individuals. It says that the new rights given to publishers “shall not prevent legitimate private and non-commercial use of press publications by individual users.” However, it’s not clear what counts as a commercial platform. What about blogs or RSS feeds that compile headlines like Google News does? What about a Facebook page that is followed by a lot of people? The other aspect of Article 11 that is unclear is what counts as sharing a news story? One amendment that was added to the directive says individual words or hyperlinks can’t be taxed, but how many words is that exactly and when do those words make up enough to be taxed?

Article 13, also known as the “meme ban,” requires websites which primarily host content posted by users to take “effective and proportionate” action to prevent unauthorised postings of copyrighted content and be liable for their users’ actions. The article further states that “storing and giving access to large amounts of works and other subject-matter uploaded by their users” are liable for copyright infringement committed by users. So, platforms and copyright holders must “cooperate in good faith” to stop this infringement from happening in the first place. The question now becomes how will this Article actually be enforced? The most effective, but controversial, enforcement would be implementing upload filters. Websites like Facebook and YouTube would be forced to scan every piece of content users share and checking it against a database of copyrighted material. The problems with having an upload filter are the filter would be subject to abuse, it would make millions of mistakes, and the technology for it simply doesn’t exist to scan the internet’s content in this way.

Most of the media attention facing Articles 11 and 13 is negative and widely critical. The Articles are opposed by over 200 academics from research centers, authors, journalists, publishers, law experts, internet experts, cultural institutions, internet users, civil rights organizations, and lawmakers. Google, which also owns YouTube, has opposed the directive since it was introduced. Executives from Google say the new rules would “turn the internet into a place where everything uploaded to the web must be cleared by lawyers.” In 2018 Google encouraged news publishers in its Digital News Initiative to lobby members of European Parliament on the proposals. Facebook is also opposed to the directive and released a statement expressing they believe the proposal “could have serious, unintended consequences for an open and creative internet.” A Change.org petition was also started to combat the directive and has gathered more than a million signatures. A few days before the parliamentary vote, Wikipedia also started a campaign against the directive. Members of the European Parliament who oppose the changes include Julia Reda (Germany, Pirate Party), Heidi Hautala (Finland, Green League), and Dan Dalton (UK, Conservative Party). Reda describes the law as large media companies trying to force “platforms and search engines to use their snippets and to pay for them.” Creators, however, are divided on this issue.

For the most part this directive is supported by mainstream newspapers, publishers, and the music industry. A campaign by the European Grouping of Societies of Authors and Composers collected a little over 50,000 signatures from creators in support of the directive, including one from world famous DJ David Guetta. Other famous musicians who support the directive include Paul McCartney and James Blunt. A different set of creators do not support this law - online creators. Cover artists and YouTubers like PewDiePie who use video games as part of their career, and artists who parody music. These are just a few of the creators who can be affected negatively from the directive and who have spoken out against it. YouTubers, like video gamer PewDiePie, used their platform to educate people on the directive and encouraging their viewers to get involved by calling their respective EU parliament members to vote against the law.

While Articles 11 and 13 have gotten the most attention so far, the new directive does also tighten up copyright in lots of smaller ways. There are concerns over how the directive treats text and data mining programs. This could apply copyright claims to automated scanners, for example. Another clause that was recently added to the directive would give sports leagues exclusive rights over any images or video of a game, making sports GIFs and photos taken by sports fans at games subject to copyright claims. This is the same for compilations, videos of people lip syncing to songs (like Music.lys), and many similar forms of media.

Alex Voss, a European Parliament member from Germany, is leading support for the bill in Parliament. Voss says companies like Google and Facebook are waging an unjust smear campaign against the directive. A coalition of European press publishers including the Press Association and the European Alliance of News Agencies issued a letter in support of the law. The publishers said the directive is “key for the media industry, the consumer’s future access to news, and ultimately a healthy democracy.”

The viability and constitutionality of versions of Articles 11 and 13 in the United States all depends on who you ask. Opponents of Articles 11 and 13 in the U.S. will be sure to cite the 1st Amendment as the reason why these articles would be unconstitutional. Putting these types of limitations on people’s creativity and on the press could set a dangerous precedent and it could definitely be seen as a violation of people’s right to free expression and free press. Proponents of the laws, however, would look to Article 1 Section 8, Clause 8 in our Constitution.  This clause is known as the copyright clause and it explicitly states the legislative branch has the power “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

We also have specific copyright laws here as well. The Copyright Act of 1976 is our main foundation for a majority of U.S. copyright law and exceptions to copyright. The Act spells out the basic rights of copyright holders. The United States copyright law protects "original works of authorship," in a tangible medium including literary, dramatic, musical, artistic, and other intellectual works. This protection is available to both published and unpublished works. Our copyright law, however, is not as straightforward as people would think or want. For example, in U.S. copyright law there is this distinction called the idea–expression dichotomy. This protects the “expression” of an idea, but copyright does not protect the “idea” itself and this concept is fundamental to copyright law.

There is also the gray area of parodies and fair use. Fair use is the use of limited amounts of copyrighted material that does not qualify as copyright infringement. There are four factors that determine if something is fair use, but there really are no clear guidelines it really is a case to case basis. The four factors are: “purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes; “the nature of the copyrighted work;” “the amount and substantiality of the portion used in relation to the copyrighted work as a whole;” and “the effect of the use upon the potential market for or value of the copyrighted work.” There is also another unofficial factor added on to that list: is the material in question highly transformative? Meaning, is it so different from the original work that it is fair use and cannot even be qualified as copyright infringement since it is so different. Fair use and the transformative nature of copyrighted work comes into question when dealing with parodies. Many musical artists, for instance, do not always like when shows or YouTubers parody them and their music. Back in 2013, YouTube parody creator Bart Baker made a parody of Lorde’s song Royals. Lorde’s team did not like this, filed a complaint, and YouTube took the video down for a few weeks. This instance called into question the issue of fair use and many people were critical of both Lorde’s team and YouTube’s response to them. Eventually YouTube put the video back up but these things happen frequently whether it be on YouTube, Spotify, Music.ly, and more platforms. 

Recently, aside from issues of copyright, we now live in a world rampant with fake news, alternative facts, sensationalized news clips, and David Dobrik’s favorite - clickbait. Part of the EU’s reasoning behind the EU Copyright Directive was not just to protect artists, but they say also to protect people from buying into false news. Article 11 is intended to help prevent websites from using such false headlines that leave readers with the wrong impression once they scroll past it.

The EU Copyright Directive is still a long way from becoming law. The EU Parliament has to take it to the European Council, which represents the 28 countries in the Union, and then it goes to the EU’s executive body, the European Commission. The Commission will finalize the law and then send it back to Parliament, who will vote on whether or not to officially make it law in January. If it does pass, which seems likely right now, it then goes to each member state, each of whom have the right to implement the directive as it sees fit. It is possible that some countries may decide to implement it fully whiles decide to implement the law to minimize consequences. Nonetheless, free speech and free internet are at stake in this.

Fork in the Steppe: Ukraine’s Difficult History with Western Integration

The success of American strategy in the European continent relies on key instruments, particularly NATO with respect to military affairs, and the European Union with respect to economic and social spheres. These institutions compete with Russian initiatives to the east, which demonstrate a lack of commitment to the liberal norms and values championed by the West, and replace them with opposing governing models and a willingness to assert military force to achieve national objectives. This is particularly concerning for policymakers in Kyiv, who, prior to 2014, attempted to maintain a balance between a Central European and Eurasian identity, and are now trapped in a heated “frozen conflict”. As Ukrainian political debate began to find itself increasingly calling to engage in economic integration with one side or the other, Kyiv realized the mounting difficulty in maintaining its claim of neutrality. The series of events surrounding this struggle within Ukraine demonstrates the disparity between Western and Russian worldviews. Ultimately, they suggest that the United States and its European allies may be unprepared to prevent a long-term Russian success in the region, rendering the prospect of Ukrainian accession into the European Union and NATO low.

Ukraine and Russia have a long and intertwined history, spanning interactions both remembered positively and negatively. Russia notably recognizes the founding of the Russian state in the Christianization of Kievan Rus’, and emphasises the mutual historical and cultural links between Russia, Ukraine, and Belarus whenever it can. Other events, however, such as the Treaty of Pereyaslav in 1654, or the more well-known Holodomor, are understood in the Ukrainian historical narrative as events characterizing a relationship of mistrust with Russia. The former is noted as having legally commenced the characterization of Ukrainians as an inseparable part of the Russian people, after the Zaporizhian Cossacks controversially pledged an oath of loyalty to the Russian Tsar in exchange for protection against Poland-Lithuania. The image of Ukraine as being a branch of the greater Russian nation has survived throughout the Imperial and Soviet eras, and is an important factor in understanding their current relationship.

On the other hand, Ukraine also has a strong Central European influence, most notably in its west. This is best expressed by Foreign Minister of the Ukrainian SSR Anatoliy Zlenko’s assertion in 1990 that “a common history existing a thousand years and a deep cultural, linguistic, and ideological closeness have linked [Ukraine] with neighboring Poland. The western regions of Ukraine and the eastern provinces of Poland … are similar in makeup of population and economy”. While it cannot be denied that historic links exist, he refrains from mentioning that they have been experienced as mostly negative, perhaps even worse than with Russia. Despite this friction, policymakers in Kyiv saw their interests as increasingly aligned with those of Central European states following the collapse of the USSR, lending truth to Zlenko’s claim of the region’s close ideological proximity to Ukraine.

This is largely due to the fact that Central European nations were successful in both severing Moscow’s influence, as well as crafting a new identity for themselves as “Central European.” In search of a similar future, the Ukrainian authorities made it their priority to become a part of several Central European institutions, most notably in what was then the Visegrád Triangle in 1992. Today the Visegrád Four, this institution was a grouping of Poland, Hungary, and Czechoslovakia, and was instrumental in developing a post-Communist Central European bloc independent of Moscow’s control. Despite close Polish-Ukrainian relations at this time, the initiative to “join” Central Europe ended in failure, hampered by other nations’ fears that accepting Ukraine would diminish their claims of a Central European identity and anger Moscow.

This aversion to antagonizing the Kremlin was not out of bad faith, as it is now understood that Russia certainly views social influence, such as perceptions of national identity, in zero-sum terms. In a world marked by greater international cooperation, a failure to participate in blocs or alliances can result in a significant loss of influence. In this way, a truly neutral Ukraine, as neither a part of the European Union or the Eurasian Economic Union, could have been in danger of marginalization. This led to pressure on Yanukovych to engage in an economic agreement with either the Eurasian or European Union, as maintaining equal partnership with both is technically and legally infeasible. Recognizing this, Russia did everything in its power to prevent a preference for greater Western ties, envisioning the risk of the eventual full admission of Ukraine into the European Union and possibly NATO. The Russian strategic mindset places a great importance on land as a defensive resource, most vehemently in the Northern European Plain, where no natural barriers exist between Russia and Europe. A Ukraine in NATO would put Western troops deep into this region, constituting unacceptable threat from the perception of Moscow.

This tug of war manifested itself in the back and forth saga over whether or not President Yanukovych would allow the passing of a Ukraine-European Union Association Agreement, which is designed to significantly increase the nation’s interactions with European institutions. Although having been largely committed to the agreement since March 2014, he experienced a last minute change of heart due to fears of Russian economic retaliation, a move which did not go over well with the Ukrainian public and sparked the Euromaidan Revolution. This climaxed in Yanukovych’s descent from power, putting celebrations in Moscow on hold.

A change in the balance of power almost never passes calmly, and this proved no exception, as, in early 2014, President Putin decided to use military force in Ukraine. This decision was partially inspired by NATO’s expression of military force against Serbia in 1999 as support for the self-determination of Kosovo. This use of hard power mixed with an emphasis on territorial self-determination was expressed in Russia’s use of unmarked soldiers to secure and eventually annex Crimea through referendum, as well as their support for armed separatists in eastern Ukraine. The annexation of Crimea was especially informative, as it not only violates international agreements, but levied accusations of disregarding the precedents set after the Second World War regarding the respect of territorial integrity between states in Europe. The Russian Federation thus revealed itself as a revisionist power in Europe, with a lack of commitment to the current world order that is seen as hypocritical and having been solely crafted by and for the West.

How the frozen conflict in Ukraine will mature is still to be seen. No nation engaged in territorial conflict can be admitted to the NATO alliance, and Ukrainian accession to the European Union has since become more unpopular with some member states, particularly Hungary. The reasons for this shift in Budapest’s positioning towards Ukraine are complex, but generally revolve around the Orban government’s newfound faith in illiberalism, a school of thought associated with Russia. Hungary has also espoused concern for the rights of the Hungarian diaspora in Transcarpathia, after a law was passed that greatly restricted the position of minority languages in education. This law was part of a broader movement of growing Ukrainian nationalism, which has crystalized in ways that would not have been possible without the spectre of an aggressive Russia. This national feeling is also marked by significant growth in Ukrainians’ positive perception of the European Union and Western institutions. This is a result of previous sentiments in Ukraine’s east, which were favorable to Russia, suffering due to the increased perception of a Russia that will act maliciously towards Ukraine, coupled with the loss of the most pro-Russian territories in the country: Crimea, Donetsk, and Luhansk. This has given way to a victory of western Ukraine’s vision of the nation. While there is still a great deal of caution when dealing with Ukraine, Central Europeans have recognized this more profound Western national consciousness, allowing Kyiv to make its way into institutions like the 2016 Visegrád Battlegroup. This stands in contrast to Ukrainian attempts to join Central European institutions in the early 1990s, when Central Europe itself was still fragile, Ukraine divided, and Russia less predictable.

Unfortunately for the current Ukrainian administration, the Russian strategy relies solely on time. As soon as it becomes clear that pro-Western Ukrainian officials are unable to fulfill their promises of economic and political integration, the public will become disenfranchised. This could lead to a rise in the support for more extreme platforms, such as Ukraine’s far-right, which is the most vehemently anti-Russian of Ukraine’s political movements, and has already gained a deal of respect due to its effectiveness in the War in Donbas. However, with enough time, economic stagnation, and Russian resiliency, disenfranchisement could also lead to a more pragmatic approach, one in which there is consensus that admission into the EU and NATO is quite unlikely, and only rapprochement with Russia is a viable path to developing into a prosperous nation. With Ukraine back on cordial terms with Russia, or even latter as a member of the Russian led Eurasian Economic Union, the public would experience increased economic growth and stability, the tangible benefits of which would likely cement support for this policy. Although with the potential to foster greater resentment, this strategy has already proven relatively effective. Moldova, the first country to experience a frozen conflict with pro-Russian separatists, since moved to become an observer state of the Eurasian Economic Union in 2017, 25 years after the Transnistria War.

The series of events surrounding Ukraine are a testament to the zero-sum reality that have materialized out of conflicting perceptions and onto the Ukrainian Steppe. For the post-Soviet nation, a difficult moment of choice between the values and identity of the West or Russia has begun, but only time will tell where that decision ultimately falls. In order for Ukraine to remain committed to Western values, it is in the interest of the United States and its European allies to ensure that Ukraine does not feel it is left out of Western institutions, even if NATO or EU membership is out of the question for the time being. Western assistance to Ukraine can be delivered not only politically, but also economically and militarily, and it would be unwise for Western policymakers to take these off the table. Corruption should be understood as an important piece of the Kremlin’s arsenal, and a tool with the potential to bypass unfavorable public sentiment. With popular support on the side of the West, decreasing the prevalence of corruption and helping to maintain Ukraine as a transparent democracy is a worthy strategy for Brussels and Washington. Despite their ultimate policy choices, however, it is critical for them to understand that time is not on their side.

NATO À La Carte, And Other Ways France Tried to Resist American Hegemony

In his most recent book The World America Made, Robert Kagan offers an account of the peculiarities that characterize the world order led by the United States. Among the most outstanding of them is the unprecedented acceptance of American leadership. The United States never goes to wars without a handful of allies on its side: even the unpopular invasion in Afghanistan was eventually joined by more than forty nations. Moreover, states with no geopolitical stakes in the initiatives the U.S. takes support them out of mere belief in American commitment to human rights and democracy. Even the security dilemma was effectively defied by the U.S., claims Kagan, since America’s arms buildup in the 1980s and 1990s was accompanied by significant reduction in military capabilities in many world regions. The world portrayed by Kagan’s work depicts the U.S.’ having decisively won the “hearts and minds” of so many wealthy and powerful countries that the American order is nearly impossible to undermine. In the reality, however, there are many doubts about the necessity and legitimacy of American leadership. Apart from Washington’s long-standing rivals, such as China, Iran, and Russia, one of the closest and most powerful allies of the U.S., France, is accustomed to renouncing the American order, and has been doing so for decades. France’s uneasiness with U.S. preeminence was never pronounced enough to shatter the world order, let alone give a reason to coin France as a revisionist state. However, this persisting suspicion of American power coming from one of its most trusted partners has shaped France’s foreign policy, as well as French-American relations, in a few profound ways. Beginning with Charles de Gaulle’s call for a “Europe of Europeans,” Paris was oftentimes a reluctant and confrontational ally. This hesitancy to stand by U.S.’ side dispels any illusion about the cohesion of American order, which, at some point or another, has failed the test of legitimacy in the eyes of not only its rivals but its closest friends.

When the French-American alliance was born in 1778, it was born out of parallel self-interest, not shared ideals. More than two centuries later, the two countries’ self-interests remain similar, and their cooperation in military, political, and intelligence areas are strong. Yet, it was not always consistent. U.S.-French relations went through several major crises that unsettled the Western alliance and showcased France’s persistent frustration with being subordinate to America. During the Cold War days, President Charles de Gaulle’s vision of a Europe led by Europeans instead of Americans created an additional divide, and this time within the Western block. An unparalleled initiative undertaken by de Gaulle to withdraw French troops from NATO and expel NATO forces from France shattered confidence in the Alliance’s ability to counter the Soviet military. De Gaulle, however, saw NATO primarily not as a defense mechanism against the USSR but as a “hated symbol of U.S. hegemony.” Distancing from it was a way to emancipate France from American influence and pursue an independent foreign policy. The General’s decision to demand the removal of NATO headquarters from Paris forced the relocation of 100,000 U.S. and NATO personnel and over one million ton of supplies and equipment – perhaps the least of the problems America was facing in dealing with France at the time. The four immediate successors of de Gaulle did not deviate from his foreign policy, and Paris remained partially withdrawn from the Alliance for forty-three years. When Nicolas Sarkozy, one of France’s most pro-American leaders, did choose to reverse the de Gaulle’s decision and return to NATO in 2009, the elite and media opposition to the alignment with the United States and rapprochement with NATO was still strong.

But before France returned to NATO as a full-fledged member, it made several attempts to undermine the organization’s influence on the continent, which ultimately undermined American power. After the disappearance of the U.S.’ main geo-political rival with the collapse of the USSR, France revived its calls for a European security system built free of American influence. As hesitant as the French were to endorse NATO’s expansion that was initiated by the U.S., they had little ability to counter it. What the could do is endorse proposals that countered NATO’s enlargement. France waged what Marie-Claude Plantin of the University of Lyon calls a kind of “guerrilla warfare” against any changes to strengthen American influence in the region. Plantin, in her book The Future of Nato, describes how the French government initially voiced opposition to initiatives as moderate as the North Atlantic Cooperation Council, due to a belief that it to be a political tool for Americans to exercise control over Europe. During his term, French President Mitterrand chose the Western European Union as the organization to counter U.S. military monopoly in the region. Eventually, Franco-German units, later joined by Belgium, Luxembourg, and Spain, were supposed to form the nucleuses for an independent European military force, but it later became evident that the U.S. military predominance and, consequently, NATO, could not easily be uprooted. After failing to shift focus from NATO to the EU/WEU tandem, Mitterrand attempted to Europeanize the North Atlantic Alliance. This undertaking, too, had little success, and the French leadership was compelled to accept NATO’s primacy in the matters of European security. 

Today, the United States and France are undoubtedly long-standing allies with many interests and values. Nevertheless, what created major divides between the two countries in the past were principal disagreements over important international issues.. These divides not only disrupted the bilateral relationship between the two nations but also shattered confidence in one of the U.S.’ most important military alliances. While clashes of interest between rival powers are natural, such turbulences in a relationship with what many see as a traditional American ally are more alarming. Even though President Macron and President Trump now appear to be on the same wavelength about French-American relations, it was American unilateralism and arrogance that have always ignited French dissent of U.S. foreign policy – and the current administration appears to be susceptible to both. Macron’s pragmatism, for now, outweighs traditional geopolitical uneasiness with which France treats its relationship with the U.S., but as Kagan remarks, the wide acceptance America enjoys should never be confused with “helpless tolerance of U.S. predominance.” French historical resistance of American hegemony was ever hardly an attempt to drastically rewrite the rules of the game, yet it is not to be discounted as mere whims of French nationalism, or ego clashes of presidential regimes. If the U.S. is interested in preserving its primacy, it should keep an eye on its friends as much as on its enemies. Ultimately, the world America made might not have rivals powerful enough to undermine it, but does it have admirers enthusiastic enough to sustain it?

Russia and Euro-Atlantic Security: Twenty-Six Years at the Doorstep of the European Order

The convoluted forces behind any country’s foreign policy are often hard to speculate about. However, some states and their international endeavors, are more perplexing than others. For many years, Russia has been an especially puzzling case both for theorists and practitioners of international relations, especially in the West. Forewarning the complications anyone inquiring about Russia’s intents will face, Winston Churchill famously remarked back in 1939 that this country is a “riddle, wrapped in a mystery, inside an enigma.” More than seventy years later, the European Union and the United States are still forced to busy itself with trying to discover the key to the Russian foreign policy riddle. The existing consensus among scholars, analysts, and policymakers in this guessing game is that Vladimir Putin’s aggressive land-grabbing and zero-sum politics are the sole reasons behind hostility between Russia and the West. However, scant attention has been paid to the role of the West itself in engendering this animosity. The U.S. and EU have been contributing — whether unwittingly, recklessly, or deliberately — to the debilitation of Russia’s ability to trust and therefore cooperate with them. While analysts are bemoaning their hopes that Moscow will eventually accommodate itself to be a partner in upholding the European and Euro-Atlantic security, they avoid discussing the lack of honest efforts to assist Russia in becoming a part of the post-Cold War regional and transatlantic arrangements.

When the Soviet Union collapsed, Russia found itself at the periphery of a bloc created by its adversaries. Despite proclaiming their intentions to include Moscow in the emerging European order, Western powers deliberately left it outside of European institutions. The norms that began governing the region after the end of the Cold War were mere extensions of the rules devised during the Cold War era by and for the countries who were historical rivals with Russia. In her 2009 book, 1989: The Struggle to Create Post-Cold War Europe, Mary Elise Sarotte reveals that U.S. and European diplomats were very conscious in their choice to adopt the institutions inherited from the Cold War and to reject or ignore other options in the process. By denying Russia the opportunity to contribute to designing the rules it was nevertheless obliged to abide by, Western leaders made the first step on the long road to alienating Moscow and creating an environment susceptible to uncertainty, hostility, and insecurity that now characterize its relationship with the West and fuel Russian great-power revisionism. In the early 1990s, Russia was pushing to transform the Organization for Security and Cooperation in Europe — the first truly pan-European institution with a comprehensive membership — into the central pillar of the new European order. Americans and Europeans, however, refused to give the OSCE more importance out of the fear that it might start competing with NATO and the EU and weaken U.S. domination of the regional security arrangements. Moreover, even though Russia was able to join the Council on Europe, G7, and WTO, none of them was as essential to the new security order as NATO and EU. Western leaders were so preoccupied with preserving their newly acquired hegemony on the global arena that they failed ensure Russia is effectively bound to the emerging institutions and has an interest in the success of regional security arrangements. More than two decades later, the costly consequences of these mistakes are one of the important ingredients that make up what some call a “state of Hobbesian anarchy and fear” of the Euro-Atlantic security system. Russia is now uninterested not only in being European but in playing by the European rules, the disregard for which it has clearly demonstrated in Crimea. Furthermore, security relations between the two biggest nuclear powers are increasingly, and dangerously, turbulent. The mutual accusations by the U.S. and Russia of violating arms control treaties have been around for quite some time, but only recently was the collapse of a key pillar of transatlantic nonproliferation regime seriously mooted. 

When the West did attempt to help the post-Soviet Russia restore its internal stability and become a part of the European peace, these attempts looked at best misguided, and at worst insincere in the eyes of the Russian public. Although American and European interference in Russian domestic affairs was in no way an attempt to isolate Russia from the rest of the region, its disastrous consequences nevertheless contributed to Russia’s growing mistrust towards its Cold War adversaries. The common sentiment of the public, voiced by Mikhail Gorbachev in his recent interview, is that the West very deliberately kicked Russia when it was down. As baffling as this view may seem to a Western observer, the catastrophic state Russia found itself in after following the Western recipe for democratic transition provides a solid justification for Russia’s current indignation and suspicion. The experience of the 1990s gave birth to a principle axiom of Russia’s current foreign policy: neither the U.S. nor Europe should be trusted, and everything should be done to draw a clear line between Russia and the West. 

It started with Boris Yeltsin’s instituting the shock therapy, a set of radical economic reforms prescribed by the IMF and designed by Harvard University economist Jeffrey Sachs, which was quickly characterized as “all shock and no therapy.” The implemented deregulations reversed 60 years of price controls, raising the prices by as much as 500 per cent. To attack this state-created inflation, the Central Bank simply stopped printing money. Additionally, the government massively cut the budget, which, in the absence of functioning economic infrastructure, led to predictable chaos. Living standards and life expectancy were rapidly falling, and the debt of state firms to one another and the Central Bank increased by 8,000 per cent in six months. The IMF and G-7, however, were holding a reward of $24 billion in credit in front of Yeltsin’s face for following the prescribed market liberalization policy, so the chaos continued unleashing. After the economic damage had reached a degree that the public was not willing to tolerate anymore, widespread opposition to Yeltsin promptedthe constitutional crisis during which the West actively voiced support for Yeltsin’s undemocratic course of actions that included the dissolution of the country’s legislature, encirclement of the White House with tanks, and the consequent storming of the building with special troops (spetsnaz). Fast forward to the presidential election of 1996, when the Russian economy was still on the verge of collapse and social protections were being stripped away — all the results of Sachs’ shock therapy — the IMF approved yet another loan to Russia. The timing was critical: the loan was expected to help Boris Yeltsin win the election. It did its job, but the consequences of Western meddling into the Russian political process reached far beyond one presidential term: less than four years later, Yeltsin would appoint Vladimir Putin the Acting President. 

The policies pursued by the U.S. and the EU toward Russia shortly after the dissolution of the Soviet Union resembled an agreement between the winners and the loser, where the former dictate the rules and the latter is forced to accept them. Russia, however, perceived itself as neither defeated nor conquered. It has been, after all, the largest polity on earth for most of the last 400 years, and was, by some measures, the most successful imperial enterprise in history. Even weakened and wounded, Moscow strove to be accepted as an equal by the great powers of the West. The actions of both the European Union and the U.S. have significantly debilitated Russia’s trust and willingness to cooperate, by both excluding the country from important security arrangements and intervening in its domestic politics. It should be therefore of no surprise to anyone on either side of the Atlantic that more than two decades after its struggle for a place in the existing European system, Moscow still finds itself at the doorstep of the European order but never inside — this time, however, by choice.