Geopolitical investments into Europe – What you gonna do when they come for you?

So far 2016 has seen a record of Chinese corporate dealmaking in Germany. These first six months alone €8 billion in mergers and acquisitions were announced – a sum bigger than all Chinese M&A in Germany over the last five years combined. Germany isn’t an isolated case. Chinese investment has grown all over Europe. Between 2010 and 2014 Chinese investments into the EU have increased ten-fold.

Interest in Europe’s corporate landscape is natural. Europe is home to a large market, leading R&D and top-notch companies. There’d be something seriously wrong if China wouldn’t want to invest in Europe. So this ain’t a bad thing.

But then again, Chinese investment is entering a different ball game. Gone are the days when China invested in low-value added economic segments such as natural resources and basic manufacturing. It’s now about high-value added companies ranging from software and robotics to waste management and advanced machinery – all technological areas highlighted as economic priorities in the 13th Five-Year-Plan and the Made in China 2025 industrial strategy. Second, in a majority of these deals the Chinese state looms large. Last year 70 per cent of all Chinese investment in Europe was undertaken by state-owned enterprises, who enjoy access to cheap Chinese capital to fund such takeovers. What we are seeing, according to Sebastian Heilmann, President of the Berlin-based Mercator Institute for China Studies, is “governmental-program capital working behind the scenes”. Chinese companies are – with the help of the state – buying some very promising European firms that would provide China with an economic competitive edge in the future. In addition, now that a lot of companies are digitalised and working with clouds, buying one company can provide important insights and data into other customer companies. Some cases, such as the recent buy-out of Aixtron, raise particular questions as the Chinese state seems to have been involved in first ensuring a massive crash of Aixtron shares, only then to be bought up by a Chinese company “on the cheap”.

This new trend is so far met by two particular tendencies in Europe’s political sphere: naivety and fear.

Naivety by those free trade liberals that believe a market should be entirely left to its own devices as well as those that believe “reciprocity” is the name of the game, meaning we should focus on European companies being able to invest as freely in China as vice-versa. Both, the European External Action Service and the EU Member States, have stressed this need for reciprocity in investment relations.

Then there’s the fear. Regrettably, too often reporting about rising Chinese investment is coming with an underlying sensationalist emotional undertone; fear mixed with an inherent racism (think ‘yellow peril’) that China is on a shopping spree, buying out and overrunning Europe.

Both are obviously wrong and say more about ourselves than others. Naivety places too much confidence in our free market. It ignores the geopolitical dimension. Too much blind faith is put in the belief that China would swing open the doors to its own economic market just because we ask and that’s what our markets are like. China doesn’t have an open market. China’s top rulers sitting in the Zhongnanhai complex have every tool at their disposal to intervene in the market at any time convenient. An opening for investment now, can easily be followed by a clampdown later. Their lever will always be bigger than ours. Contrarily, fear underscores a lack of confidence in Europe’s economic system and its political leadership. It doesn’t believe we’re up to the challenge of facing off politicised investments. Marilynne Robinson aptly described this in her essay “Decline” recalling the period of Japanese economic strength in the 1980s:

“Remember when Japan seemed bent on buying every stick and stone of this perishing republic? At least so far as our journalism was concerned. None of these things were the fault of the Japanese. They were simply the screen on which, for the moment, we projected our anxieties.”

Between these two sentiments, a clear-headed pragmatism needs to prevail, which places confidence in the market economy, builds resilience against political motives and takes national and European interests better into account when it comes to mergers and acquisitions by foreign-owned enterprises. Basically, we need better national security investment screening regimes.

At the moment, there is a lack of effectiveness and quite frankly confusion when it comes to foreign investments in Europe. Let’s remember the case of Kuka, a robotics company described as Germany’s crown jewels in its drive to automate and digitise manufacturing. Just this year Chancellor Merkel together with President Obama visited Kuka’s exhibition at the Hannover Industrial Fair, describing the company as the future of German industry. When it was announced that China’s Midea launched a takeover offer for Kuka, the German government’s response was silence. It took nearly a month for them to register the event. By then they were scrambling for an answer, in the end realising that their prescriptive national security regime governing investments didn’t give them any leeway in this merger anyway. Or consider the case in France when GE made an offer for Alstom back in 2014. Wanting to inhibit the offer but having no leverage from its own investment screening regime, France hurriedly passed the “Montebourg Decree”. This expanded the regime’s sectoral operations, requiring would-be foreign buyers to get permission from the Minister of Economy when investing in French energy, transport, water, health or telecoms companies. Before, the 2005 version of France’s investment security screening regime limited government intervention to M&A activity related to national defence.

Europe has a hodgepodge of different national security screening regimes for foreign investment (the think-tank MERICS has an excellent overview in this recommendable paper written by Thilo Hanemann and Mikko Huotari).

A two-pronged strategy is needed to strengthen the screening of foreign investments into Europe.

First, national security screening regimes need to be strengthened. Some EU Member States only look at the defence sector, others look at a number of sectors, and again others don’t have any screening regime at all. The European Commission should organise a conference bringing together national, European and US officials in this field in order to discuss these issues and share best-practice. Why include US officials? Because the US is the gold standard when it comes to screening foreign investments. It has ample experience through its Committee on Foreign Investment in the US (CFIUS).

This inter-agency committee can ask companies to modify the terms of their deal and advise the US President to shoot down a deal. Its mandate is broad enough to look at a very wide variety of investments and it commands such respect internationally that the mere notification that it is investigating a deal can suffice for companies to withdraw their offer. In 2012, for example, out of 114 notices of mergers and acquisitions, CFIUS investigated 45 cases. Out of these, a single one was blocked with executive power by President Obama while 22 cases were abandoned as the companies withdrew their merger plans after they knew they had CFIUS breathing down their necks. This agency actively looks for transactions of interests, particularly those that hadn’t been notified. I’m sure the German equivalent doesn’t necessarily do that. Most likely it only looks at the big cases that come to light due to media attention – as the case of Kuka highlights.

As such, there’s great room for improvement on the Member State level. Bringing national, EU and US officials together to exchange views and experiences, the European Commission could then publish a best-practice document with guidance that would allow EU Member States to consider updating their respective legislation.

Secondly, these national screening regimes should be supplanted by a supplementary European screening regime. The EU is too interconnected to consider foreign-based investments into a single national company through the national lens alone. European interests and solidarity must be taken into account. Two particular arguments come to mind.

Put simply, foreign investments into national companies have cross-border implications. Gazprom buying up strategic gas storage in Germany has implications for European, especially Polish, energy security. Or, hypothetical example, imagine a Chinese state-owned enterprise buying up a small Italian company, which has relevant subsidiaries in other Member States or which owns a piece of land near an important military facility somewhere else. That one deal that President Obama blocked in 2012 is a case in point. He denied Ralls Corporation, a firm owned by two Chinese nationals, from acquiring wind-farms in Oregon, because these renewables installations were all within range of restricted air space used for drone testing by the Naval Weapons Systems Training Facility.

Secondly, the EU Member States are strongest in cohesion through the EU. It might be difficult for a Member State like Malta, Lithuania or Hungary to block a massive Chinese, Russian or other great-power foreign-based investment, as there could be political consequences for preventing such a deal. But were the EU to block such a deal, the individual Member State wouldn’t be singled out for blame. Apple and Microsoft are two cases in point. It’s the EU that called out Microsoft’s anti-competitive behaviour and slapped Apple with a massive bill in back taxes, not individual Member States. This European dimension therefore has clear benefits to Member States and Commissioner Oettinger has already called for a European investment screening regime.

Therefore, the European Union could establish a CFIUS equivalent – a kind of Committee on Foreign Investment in the EU (CFIEU) which would bring together national officials and European officials from different policy fields to screen investments into Europe.

However, chances of a powerful, decision-making CFIEU being established seem pretty slim. It’s clear that the EU Member States wouldn’t accept a supranational authority that decides on foreign investments into their national corporate landscape.

In this context, it might be more realistic to start with a consultative body. For example, in the field of energy security, the EU has a European Gas Coordination Group that brings together national and EU experts on gas security and adopts opinions and reports. Perhaps there could be a kind of “European Foreign Investment Coordination Group”.

This group would look for transactions of interests, consider the political circumstances and investigate the European dimension of the deal. In the end it could adopt an opinion that would be made publicly available and that would have to be addressed at the national level. That way it could still influence national decision-making and put pressure on Member States. By highlighting possible ramifications of a deal for third-party Member States, it would also allow those to publicly comment and get engaged in the deal. This would to a certain degree Europeanise national processes.

Some of the recent merger cases should be a wake-up call to get active. Europe shouldn’t fear Chinese, Russian or any other investment but neither should it naively believe all these investments are pursued by a purely company logic. It should put in place security safeguards that make sure we separate the wheat from the chaff.

Did Juncker Rise to the Occasion? The State of the Union

There are speeches that give goosebumps, speeches that entertain, speeches that make one fall asleep, and then there are speeches that are so serious they leave an instant void; the audience needs time to digest and come to grips with it. This was the annual State of the Union speech (SOTEU) that Commission President Jean-Claude Juncker gave this Wednesday in the plenary of the European Parliament.

It didn’t get much applause from Members of the European Parliament. The German daily Sueddeutsche Zeitung was one of the first to title it a “disheartened speech” with no push. Others criticised the lack of vision and emotion. But this speech wasn’t, in the words of former President George H.W. Bush, about “the vision thing”. It wasn’t meant to be an emotional rallying cry for Europe. And it certainly wasn’t meant to be an ego-show by Juncker either. Those already took place before his speech. Both European Parliament President Martin Schulz and European Council President Donald Tusk, IMHO, engaged in one-upmanship. The day before the SOTEU Schulz launched a Facebook Live Debate with his own views on Europe (which garnered 1.4 million views) while Tusk did a press release with a five page letter he sent to the EU’s Heads of State and Government outlining his perspectives. That letter was conveniently sent in the evening of 13 September so that everybody would see it in their inbox the morning of Juncker’s speech.

No, to me, Juncker rose above this. His speeches are known to be off-script, natural and humorous. He likes to be a centre of attention. But this time was different. He stayed on script and exerted particular effort to stay completely in control, aiming to avoid attention to his particular person. This seemed to have thrown off guard many Members of the European Parliament.

His speech was intended to bridge divides, smoothen political atmospherics, and lay the ground for a successful European Summit in Bratislava that will take place later this week. Let’s not forget how many divisions have come to the fore between EU Member States and EU institutions over the last year alone. His speech meant to bring sides together again.

First, Juncker made appeals to different European political parties. He turned to Socialists by calling for a more social Europe, to Conservatives by highlighting the need for debt reduction, to Liberals by emphasising free trade, to Greens by demanding the EU’s speedy ratification of the Paris Climate Agreement.

Second, if there was an institutional power struggle between Member States and the European Commission, between more or less Europe, then Juncker took the wind out of those sails. He emphasised that “Europe can only be built with Member States and not against Member States” and that the EU “will and can never become a unitary state”.

Third, he made clear advances towards different regional splits (ie. North, South, East). This is particularly the case for Central and Eastern European Member States, which have had a particularly acrimonious relationship with the Commission. Poland was singled out as “a great nation”, the Postal Worker’s Directive, which is important to Central and Eastern European states, was given full support, and an olive branch was offered to their opposition to a fixed refugee relocation scheme with this paragraph: “When it comes to managing the refugee crisis, we have started to see solidarity. I am convinced much more solidarity is needed. But I also know that solidarity must be given voluntarily. It must come from the heart. It cannot be forced.” He also focused on the South. He highlighted Spain, Portugal and Cyprus and he took up the proposal of the Athens Declaration of the 1st Mediterranean EU Countries’ Summit, hosted by Greek Prime Minister Tsipras, to double the financing capacity of the Investment Plan. Simultaneously, he also mentioned the need for a Defence Union and took up proposals by France and Germany released in a paper this week to create a European Battle Group HQ, pool military spending and create a defence research fund.

Fourth, this SOTEU was also meant to provide ambitious new proposals that would deliver real benefits to its citizens. He proposed a fully deployed 5g network by 2025 and free WIFI access in all public places in Europe’s major cities by 2020, he pulled the initial proposal of roaming charges off the table in order to revise it with a text that would see all charges fully scrapped, he set out to create a European Solidarity Corps, in which young people across the EU will be able to volunteer their help, he moved forward plans for a EU Border and Coast Guard, called for a European Travel Information System to know who enters the EU when, promised to continue the fight against tax evasion emphasising the Apple case as an example, and so on and so forth.

And last but not least, I believe President Juncker is also trying to bring the EU and European discussions deeper into the Member States. In his SOTEU he called for more European debates in the national parliaments and said that all European Commissioners will go to their respective national assemblies to explain the European Commission’s policies, thinking, etc. This seems like a classical bear-hug strategy. At the moment, national capitals hijack the praise when Brussels does something good and they blame Brussels when something goes bad (especially when it’s their fault). But by encouraging more EU discussions in the national parliaments, and tying the European debates closer into the national debates, he might just manage to break this pattern. After all, it’ll be more difficult to lay blame at Brussels’ doorstep when issues have been adequately discussed at home and people are informed about the situation.

Did Juncker leave things out in his speech? Sure. He didn’t mention TTIP, the economic situation in Greece, the banking union and Italy’s banking crisis in the making, nor Russia, Ukraine and Turkey. Do a word frequency comparison of his 2015 and 2016 State of the Union speeches and the result will be a prevalence of “refugee”, “euro”, “Greece”, “crisis” (2015) compared to “work”, “invest”, “solidarity”, “people” (2016).

And will he be able to deliver on some of his proposals? That’s a mixed bag. A doubling of the European Investment Fund and scrapping Roaming charges, is very likely. But creating a European Solidarity Corps with 100.000 young volunteers by 2020? The idea is great but considering that the US Peace Corps has had 220.000 participants over the last 50 years, maybe his numbers are too far-fetched? Or maybe they aren’t given that 2013-2014 alone saw 272.000 Erasmus students, and this could be a major contingent to be tapped. Likewise, the proposal for free WIFI in public places in major cities by 2020, raised some eyebrows how that could be achieved.

But did he rise to the occasion? I believe he did. He intended to bring different constituencies together and create more unity, show that the EU can provide clear advantages to its citizens, and bring the European debate inside the national capitals. More work certainly lies ahead but Juncker is making sure that on the road to Bratislava the EU is not losing its way.


The Return of Europe’s Nation-States: A Response

This month’s edition of Foreign Affairs features a strongly anti-EU piece by Jakub Grygiel (“The return of Europe’s Nation-States: The Upside to the EU’s Crisis”), a Senior Fellow at the Center for European Policy Analysis. In his article, Grygiel argues that citizens are disillusioned with the European Union and that the EU has failed. He claims that a return to newly assertive nation states is necessary to master the continent’s pressing security challenges.

It’s easy to fall into the trap of believing that a return to the nation state is the answer to the problems the EU is facing. But there is no wall high or wide enough to insulate a country from the globalised challenges we are facing. As recently noted by former German Foreign Minister Joschka Fischer, “in the twenty-first century, the turn away from cooperation and integration amounts to burying one’s head in the sand and hoping the dangers will pass.” It was exactly a lack of coordination between national intelligence services that facilitated terrorist strikes, and it was many years of neglect and lacking solidarity that worsened the refugee crisis. Instead, EU Member States need to cooperate better.

Mr Grygiel, for example, believes that European nation states would do a better job on their own checking Russia, but how? Europe’s sanctions against Moscow would be the first victim of a return to nation states. China’s and Russia’s ‘divide and rule’ tactics would flourish in such an environment. Germany would happily continue to conduct bilateral energy deals with Gazprom, to the detriment of Central and Eastern Europe, without EU legislation binding its hands.

Furthermore, recalling Senator Moynihan, Mr Grygiel is of course entitled to his own opinion but not his own facts. Public opinion polls show support for the EU. According to Eurobarometer, citizens consistently trust EU institutions over their own national governments. After the historic Brexit vote, support for the EU actually increased in a number of Member States, particularly Germany. A recent annual survey of the World Economic Forum also highlighted that only 13% of European millennials identify primarily with their nation state, while over 50% see themselves as either global or European citizens.

What the European Union needs is neither ever more integration, nor a complete return to the nation state as supported by Mr Grygiel. Instead, flexibility is key, allowing for different types of deepening integration. EU Member States have an arsenal of integration models at their disposal. They can advance “enhanced cooperation” between groups of Member States or they can use Permanent Structured Cooperation under Article 46 of the Treaty of the EU, as is currently being debated with regards to creating a Defence Union. Options for different forms of integration exist and need to be used.

Quoting the American theologian Reinhold Niebuhr, Mr Grygiel argues that individual countries will provide the kind of safety that Brussels can’t. Well, let me return the favour with another Niebuhr quote: “Nothing we do, however virtuous, can be accomplished alone.”

Where does the EU go from here? The upcoming Bratislava Summit

It is clear that after the UK’s historic decision to leave the European Union, the EU could no longer dodge the question that’s been increasingly on everybody’s lips: What is to be done? The EU is facing its deepest crisis with doubts about its very purpose emerging through the cracks. The forces of disintegration are on the rise. What’s the turnaround strategy that will bring Europe forward and renew confidence in this unique project? What’s the post-Brexit European narrative?

Following the UK referendum, confusion and disarray reigned supreme. The Brexiteers had no plan in case of Brexit, but neither did the EU institutions. No concrete ideas on the way forward for the EU after such a result were presented. Mogherini’s Global Strategy came closest in charting some course. Instead, there was scaremongering, flip-flopping, and calls for Commission President Juncker’s resignation.

Only after the dust started to settle and shock gave way to sober analysis did action follow. Now European leaders will meet in Bratislava on 16 September to flesh out a plan for the future of Europe post-Brexit. In the meantime, an array of actors has come out with position papers, interviews and political lines in attempts to set the agenda. Some are new, some are old, and some is just old wine in new bottles. A confrontation is emerging on two fronts. First, on the governance of the European Union and second on which policy areas should be the ones where the EU drives forward, achieves results, regains relevance and wins back confidence from its citizens.

The former is an old debate regarding the balance of power between EU institutions and governance models. It’s about “more” or “less” Europe, pitting federalism against intergovernmentalism. The social-democratic camp came out early in this one. European Parliament President Martin Schulz and German Vice-Chancellor Sigmar Gabriel co-published a paper calling for more integration and a federal Europe with a bicameral European government. A rather unrealistic proposition given the current situation. Others used the opportunity to highlight the importance of a two-speed Europe where a core – such as for example the founding Member States or Eurozone – move forward with integration leaving others behind. And then there are the voices, particularly from Central and Eastern Europe, calling for a re-nationalisation of European policy. Polish President Beata Szydło, for example, sees “the need to strengthen national control over EU decision making processes” and the Marshal of the Polish Sejm stated in a declaration that “the coexistence and cooperation in Europe should be based on sovereignty of nation states”.

German Finance Minister Schäuble also weighed in to this debate, declaring that if the European Commission can’t get things done the Member States will take matters into their own hands. Laying blame for lacking progress on the European Commission’s doorstep, however, is hypocritical. It’s the EU Member States in the European Council themselves that most often cannot come to an agreement and thereby halt progress! Schäuble is disingenuous when he refers to the Eurozone crisis or the Turkey deal as examples of intergovernmentalism where the Member States took charge, solving problems. It wasn’t the Member States; it was Germany. It was a domineering Berlin that forced its deals onto others. This is what led to divisions and bad blood amongst the Member States.

In such a crisis where the core of the European project is in doubt, the Member States should especially show solidarity and walk together in lockstep. But this is not happening. Instead, Member States are descending into bloc politics. After Brexit, German Foreign Minister Steinmeier invited only Foreign Ministers of EU founding members for consultation to Berlin, snubbing the rest. The Central and Eastern European bloc is coordinating its position for the Bratislava Summit with the Visegrad Group of Poland, Hungary, Czech Republic and Slovakia planning to publish a joint contribution beforehand. And the southern axis is coming together too: Greek Prime Minister Tsipras has invited his counterparts from France, Italy, Spain, Portugal, Cyprus and Malta to a summit in Athens on 9 September. Meanwhile, the three largest voting members in the European Council – Germany, France and Italy – have met at Ventotene on 22 August to discuss Bratislava.

Of course coordination before this important Bratislava Summit is necessary. But the question to me is rather, which format is more likely to unite rather than divide, on the road towards Bratislava? A strategic centre of Member States is needed that is small enough for conducive debate but representative enough to cover all Member States. Teaming up with Presidents Renzi and Hollande, Chancellor Merkel has tried to form such a centre between Germany, France and Italy. But this constellation is woefully lacking Central and Eastern Europe, forcing Merkel on a whirlwind tour of meetings with Member States (14 Member States in one week). Forming a Quartet together with Poland, which holds the current Presidency of the Visegrad Group, would have ensured that this region is also represented. It could have brought EU Member States better together before Bratislava. To quote Lyndon B. Johnson: “It’s probably better to have them inside the tent pissing out, than outside the tent pissing in”.

And Member States are coming together in bloc politics to push forward the policy issues important to them, which brings me to the second front I highlighted earlier. The South is rallying to achieve progress on economic growth, investment, fighting austerity while Central and Eastern Europe is focusing on the refugee issue, reinforcing borders and strengthening national sovereignty.

The Ventotene meeting on 22 August between Merkel, Renzi and Hollande showcased the splits and highlighted some of the issues that could come into play in Bratislava. Issues raised were external/internal security, youth, refugees and economic growth/investment. Little was reached on the last two while on youth it was agreed to expand the Erasmus student exchange programme also to apprenticeships. Only the issue of external/internal security had broad agreement. Generally, this much anticipated meeting was hyped up beyond proportion. After all the three weren’t going to announce some ambitious proposals ahead of the Bratislava Summit, as this would have simply strained ties with the other 24 Member States. As such, Ventotene was largely symbolic with the three laying flowers at the tomb of Altiero Spinelli, who wrote the Ventotene Manifesto calling for a federation of European states to prevent nationalism from sparking war. The meeting seemed to be very much geared towards domestic consumption, intended to bolster support for Renzi who will be facing his own referendum on constitutional reform this October.

In the context of Ventotene, it seems that the most likely progress at the Bratislava Summit will be a declaration to move forward in the area of security and defence. An agreement in this area seems clear as I highlighted in an earlier blog post. Mogherini’s Global Strategy laid groundwork for this, the French and German Foreign Ministers also called for more integration on security and defence, as did the Italian Foreign and Defence Ministers in an op-ed in Le Monde, and Central and Eastern European Member States would also be in favour with Czech Prime Minister Bohuslav Sobotka having recently declared that he hopes the Bratislava Summit will bring progress on a joint military. In addition, Russian military aggression in Ukraine has also made the Nordic countries more willing to co-operate on defence issues, with Sweden and Finland raising security through defence collaboration agreements with the United States.

Pushing the EU forward in the nexus external-internal security is important. It’s an area where the EU can and must deliver. It should show that the EU provides security to Member States and its citizens, an elementary requirement given that in the context of a world in flames ranging from Libya and Syria to Ukraine and homegrown terrorism, ever more people ask whether the Union can provide security.

But I fear that this won’t be enough. Discontent with the EU isn’t merely based on fears about ISIS or geopolitics. It’s also about globalisation, feelings of being left behind, economic insecurity and social inequality – it’s about pocketbook issues. Here the EU needs to provide answers, too, lest it find itself portrayed as the cause of such malaise. This means boosting investments, strengthening the social pillar of the EU, making progress on fighting tax evasion, and tackling youth unemployment. Especially the last is crucial. Youth still feels great affection for the EU as evidenced in the UK referendum, but the EU is at risk of losing its youth if they don’t see any future prospects or have a stake in the EU. An open letter signed by prominent societal actors and politicians rightly made this point recently in Die Welt calling for a strengthening of the European Youth Guarantee, a revision of Erasmus to an Erasmus for all, and developing a common school curriculum on European culture.

On the road towards Bratislava, progress is on the horizon. But more is needed. As it stands, it is doubtful, whether the EU Member States will be able to overcome their divisions. This will make the next half year especially tough with further challenges ahead: a possible renewed refugee influx as Syria’s bloodbath continues, winter is approaching and the Turkey refugee deal hangs in the balance, a presidential vote in Austria between a far-right politician and a Green, a referendum in Italy, a volatile Ukraine, and so on.

Is Europe falling into the ISIS playbook?

Expressions of unity, strength and support followed the atrocious attack against the French satirical paper Charlie Hebdo. Europe’s political leaders marched together, millions of people demonstrated solidarity declaring Je suis Charlie. Instead of bringing France to her knees as the terrorists had hoped, they had brought France to her feet. Citizens all across Europe, particularly in France, rose to the occasion countering hatred with hope and confidence. But this is changing and our communication strategies and narrative to counter ISIS are partly to blame.

From Paris and Brussels to Nice and Würzburg, that hope and confidence is fading. The frequency and horror of these terrorist attacks has continuously hammered away at society. When one person can do so much damage at such public places, everybody feels affected and threatened. Hate is starting to gain on hope. A spectre of hate crime and counter-attacks against Muslim communities is emerging. A European Kristallnacht against Muslims is no longer an unthinkable scenario.

In France, Muslims have been harassed at the Nice commemoration and some citizens have vented their anger by spitting and throwing trash on the spot where the lone-wolf terrorist, Mohamed Lahouaiej-Bouhlel, had been shot. Patrick Calvar, France’s domestic intelligence chief, has recently told a closed-door parliamentary hearing that there will soon be “a confrontation between the extreme right and the Muslim world…one or two more attacks, and it will happen”. In Germany, the country that proudly stood for welcoming refugees, more than 200 refugee homes have been burned or otherwise attacked over the last year. In the United Kingdom, there had been more than 3.000 allegations of hate crime in the weeks of its Brexit referendum as populists, such as Nigel Farage, blamed foreigners for Britain’s woes.

A latest Pew survey of ten EU Member States published a few days prior to the attack in Nice, substantiates this worrying trend. Six in ten EU Member States have an unfavourable view of Muslims. In eight out of ten more than half of the respondents believe refugees increase the probability of a terrorist attack. And in seven out of ten EU Member States, views towards Muslims have become more unfavourable compared to last year. A median of only 18 per cent believe that ethnic, cultural and ethnic diversity is a benefit to their country. Each new attack is likely to add to these developments.

Our politics are failing. Each new attack questions the ability of the political establishment to deal with terrorism, in turn strengthening far-right political parties such as the Front National or the Alternative für Deutschland. EU Member States have been unable to agree to a permanent effort-sharing system for dealing with the refugee influx, again sending a certain message of helplessness.

Communication strategies are particularly using a war rhetoric, which tends to feed fear and feelings of insecurity, worsening the situation. President Hollande has called the November 2015 attack an “act of war” and after Nice France’s Minister of the Interior, Bernard Cazeneuve, called on all “patriotic citizens” to join the reserve police force. Asking citizens to fill the ranks of the police, does not exactly inspire confidence.

All of this, however, can tear at the very social fabric of society. It plays directly into the strategy of Islamic State. Europe and especially France are in danger of falling into the ISIS game plan. By following a rhetoric that emphasises a war with Islamic State and allows a picture of France under siege and the enemy at the European gates to arise, feelings of insecurity persist and contempt towards Muslim communities increases. It is that very contempt that feeds the ISIS narrative. This downward spiral, where only Islamic State can benefit, must be broken.

European governments shouldn’t allow each successful lone-wolf terrorist attack to be claimed as an ISIS victory. A pattern is emerging that many of these lone-wolf perpetrators were emotionally unstable, disconnected from society, extremely narcissistic and looking for a greater purpose in their life. As asserted by Professor Olivier Roy, a leading expert on political Islam, many of these lone-wolf perpetrators were petty criminals that didn’t undergo a radicalisation of Islam but rather an Islamisation of radicality. They are already drawn to radicalism and Islamic State offers them a heroic narrative and purpose to go with it. In the words of Robert Pape, founding director of the Chicago Project on Security and Terrorism, ISIS makes “an appeal to the individual’s sense of self” and “let’s angry men with oversize egos identify with the group…and eventually use the tool kit of Islamic State to carry out their own violent agendas”. With this interpretation in mind, the lone-wolf acts of terror shouldn’t be seen as part of a war with ISIS nor primarily focus on Islam. Mr Pape, for example, notes how a US campaign to paint Islamic State as un-Islamic was particularly unsuccessful. Instead, it must perforate the “hero’s image” and make it unattractive by showing that these lone-wolf perpetrators are nothing more but unhinged petty criminals that won’t be remembered in posterity. Such a narrative would have a dual benefit of deterring future potential lone-wolf terrorists while simultaneously not putting religion front and centre thereby not increasing fears in society about Muslim communities.

Europe is walking down a slippery slope of populism and increasing xenophobia. The focus on fighting Islamic State and using war-like rhetoric is feeding this trend. Of course ISIS must be fought but we shouldn’t allow each terrorist attack to be claimed by ISIS or frame it into the narrative of ISIS – it makes this wretched organisation bigger than it is. A new narrative should emerge. Nice shouldn’t be a reminder of Islamic State. It should be a reminder of why Bastille Day is celebrated – because it represents the spirit of unity, the rights of man and woman, of liberté, egalité, fraternité.

Terror on Bastille Day

For months we have been living on edge. We’ve had the Paris attacks, the Brussels bombings, the San Bernadino attack, the Orlando nightclub shooting, the Istanbul airport attacks. Numerous terrorist warnings had been made during the European Football Championship. In Brussels and I’m sure elsewhere, concerns had been aired, security had been stepped up; it was recommended not to attend large public gatherings.

Then Euro 2016 finished. Holidays were about to start. French President Hollande declared that the state of emergency, which had been enacted following the heinous Paris attacks in November 2015, would be lifted end of July. And then it happened. Again. In Nice, the Promenade des Anglais that had filled for the celebrations of Bastille Day on 14 July, turned into a living nightmare. More than 80 men, women and children killed. More than 200 people injured. Families torn apart, lives and limbs lost as Mohamed Lahouaiej-Bouhlel drove a truck through the crowds.

How does one begin to comprehend this act? The sheer shift from celebration to chaos, from enjoying to surviving the night. Similar to the Paris attacks, it was a strike during ones night-out where anybody could have been the target. It was a strike during Bastille Day where France celebrates its unity, its revolution, its declaration of the Rights of Man, its very liberté, egalité, fraternité. And similar to Orlando, it was committed by a single man. A single man that had not been particularly known by intelligence officials. A petty criminal who had no sign of radicalisation.

It’s the awful singularity that gives this horrendous night even more worrying thoughts. It’s what Thomas Friedman called the growing power of one. One person with a truck or an assault rifle. One person with a home-made suicide belt. One person with biochemical or radioactive material. One person with a virus that could spread to a pandemic. How do you protect against that one person? How can a state protect society against a single individual? And that without withering away the very freedoms of society.

And it’s the awful singularity that makes one also wonder, how many more attacks might yet be to come? There are undoubtedly a range of people out there – be they returned ISIS fighters, radicalised youth, or petty criminals looking for a purpose – that are daydreaming with raising havoc. Many might still be held back by some sort of social norms, inner angst, fear for life. But will this last? Or will the regularity of such horrendous acts slowly wither away these last barriers, embolden them, and transform their thoughts into action as they see others do.

And when these people aren’t known as radicalised terrorists, what gives them the underlying ideological drive to destroy? How do we understand the killers’ minds? A pattern seems to emerge of small-time criminals looking for a purpose and an audience. The Chicago Project on Security and Terrorism might be on to something when they write that it’s not Islamic radicalisation via ISIS itself that just induces these young men – who have not been particularly devout – to terror but the fact that ISIS appeals to these young men’s self-worth. Islamic State makes them heroes in a narrative at a time when they are most likely in a state where they see no larger purpose to pursue.

Last, the events further hammer away at society. They increase fear and hatred and racism and divisions. I’m concerned of how far-right Marine Le Pen might gain from such a situation with the French Presidential elections less than a year away. And I’m concerned how Donald Trump might become a more realistic option for the White House. In crises, people usually tend to look for stability, leaders with experience, something or someone they know. But this time it feels different. With the world in flames, establishment politicians are losing credibility and there seems to be a gravitation towards tough-talking, non-conformist leaders. Contexts and situations of course differ from country to country but what seemed a joke in the US presidential elections is turning into a frightening possibility. And the more crises the world experiences, the more Trump might benefit from his isolationist “batten-down-the-hatches”, build-a-wall approach, which stands in stark contrast to Hillary Clinton, the internationalist and former Secretary of State. The state of the world will undoubtedly be used against her by the Trumpians.

So much pain and so many questions left unanswered. Yet, as we mourn the losses at Nice and our thoughts are with the families torn apart, the spirit of Bastille Day – of unity, the rights of man, of liberté, egalité, fraternité – should continue to ring forth.

Is Italy Europe’s next (banking) crisis?

Since the outbreak of the global financial crisis in 2008, the European Union has made great strides in insulating its banking system. A banking union has been created and more than 40 legislative and non-legislative measures have been proposed, all to strengthen the banks, the euro and the financial architecture at large. Despite shortcomings and work ahead, progress has been made.

Now, Brexit has rocked this edifice. The ensuing market turmoil has put Europe’s banks in the spotlight. Barclays, RBS, Deutsche Bank, Société Générale, Unicredit, all saw their stock prices decline by 25% or more. Shortselling and extremely low interest rates that make lending less profitable, are putting pressure on the whole banking market.

But Italy in particular might be the catalyst for the next European banking crisis. Its banks are in the eye of the storm. They are sitting on roughly €360 billion (more than 20% of Italy’s GDP) of foul loans. Previous attempts by Prime Minister Renzi to solve this issue have failed. Experts estimate he needs €40 billion to cushion the banks against their losses. Renzi would like to inject public money but that would be illegal state aid under EU rules. The EU’s banking directive – as a consequence of the financial crisis – doesn’t allow a simple bail-out where taxpayers end up coughing up the cash for bank rescues. Instead, to protect taxpayers, it forces the banks’ investors to be bailed-in and take a hit.

This is a political nightmare for Renzi. Unlike in other countries, in Italy, these investors to be bailed-in aren’t just some kind of corporate giants who could stand a loss; they are ordinary Italian families. They own roughly 40% of bank debt. When the government applied these bail-in rules for a couple of small banks last November, widespread protests erupted. Already fear seems to be spreading in the market. A simple Google Trends analysis of the search term “Italian Banks” shows that, according to Google, there has been a breakout moment. July has seen a drastic increase of such searches.

This is the last thing Renzi needs. He’s already suffered a bloody nose in the local elections a month ago when he lost the mayoral contests in Rome and Turin to the 5 Star Movement, and now has to look towards his October national referendum on constitutional reform, on which he has staked his political future. Should this episode cost him the October referendum, Italy would be in a political crisis with no clear idea where it could lead. Undoubtedly, it would embolden the 5 Star Movement, particularly in its call for Italy to abandon the euro.

Italy’s banking issue is opening well-known wounds: it is again pitting the northern creditors against the southern debtors as well as banks against governments.

Chancellor Merkel has already said that the new rules for bank rescues have to be respected while Eurogroup President Dijsselbloem tried to downplay the issue this week saying that he sees no acute crisis with Italian banks. It’s understandable that Germany doesn’t want the EU’s banking union to fail its first test and have again more taxpayer money propping up banks; an issue that has led to widespread societal resentment against the financial sector and governments. Yet, to me Germany’s current dogmatism is a bit rich. Italy didn’t pursue any bailouts during the 2008 financial crisis while Germany whipped up a nearly €500 billion bank bailout programme. That’s of course a different context and the rules have changed since then, nonetheless it does leave a somewhat hypocritical aftertaste.

Germany’s Finance Minister Wolfgang Schäuble seems to have left the door open to some flexibility by not ruling anything out and is simultaneously temporizing. By arguing at this week’s Eurogroup meeting that one should wait for the results of a European bank stress-test, which will be published later this month, he’s buying more time. The question is, is he doing this to strengthen his bargaining position vis-a-vis Italy or because the results of the stress-test could give an objective assessment from which to legally take action? Or maybe both? Should the stress-test as expected come out negative for Italian banks, requiring them to raise more capital, it would clearly worsen the situation. It could lead to even higher losses, as was the case when the ECB sent a confidential warning to Monte dei Paschi di Siena a week ago. This would increase market pressure on Renzi and could put pressure on him to follow options prescribed by the Eurogroup/Schäuble with restructuring strings attached (and yes, restructuring of the Italian banking sector is necessary). But couldn’t such a strategy also backfire if there isn’t already an outline of an agreement fixed prior to the stress-test publication? Once the stress-test is published, couldn’t a market reaction be faster than political talks can come up with a solution if they haven’t by then come up with one? What if it prompts investors to stop lending and depositors to withdraw their money leading to a bank run? And wouldn’t a solution under such conditions possibly end up being more expensive than already coming up with a solution now under manageable circumstances?

Renzi has already started hitting back at German intransigence by pointing out the massive risk of Germany’s Deutsche Bank. At a joint press conference with Swedish Prime Minister Löfven he argued “if this non-performing loan problem is worth one, the question of derivatives at other banks, at big banks, is worth one hundred. This is the ratio: one to hundred”. Deutsche Bank, with its €54 trillion derivatives book that’s five-times the entire economic output of the eurozone, certainly is a problem. It has failed the stress-test in the US and its share price has taken a beating. As a possible indicator of worries, over the last month, google searches for its share price in Germany have increased by 800%. Worse yet, all these financial players are of course interconnected. Should Italy’s banking crisis worsen it could put pressure on Italian government debt to which again a whole range of other players are exposed. French and German banks hold around €330 billion of Italian government bonds with Deutsche Bank alone having more than €11 billion on its books.

Deutsche Bank knows how dire the situation is in Europe’s banking sector. That’s why its Chief Economist, David Folkerts-Landau, proposed on 9 July a €150 billion rescue fund to recapitalize European banks. This, however, is three times as much as the €40 billion needed by Italy’s banks and it seems Deutsche Bank is using the Italian banks as a pretext to launch a larger rescue fund that could buffer banks more generally and stabilize their bonds and shares by providing investors with more security. This plan has already been met with great opposition by various political parties.

So far it seems that only France’s Finance Minister, Michel Sapin, has shown flexibility towards Italy arguing that “it’s our duty to show solidarity…and apply the rules in an intelligent manner.” Indeed, there are exemptions in Europe’s state aid rules that could allow public money for Italian banks. For example, bail-ins could be avoided under exceptional circumstances, if they could have disproportionate results. And forcing losses on Italian household investors, could possibly fall under such a definition. This and other possibilities will undoubtedly be looked at, as the situation progresses.

Brexit isn’t solely responsible for Europe’s banking sector woes. But it triggered a shock that has exposed the significant underlying weakness that still remains in Europe’s banks, particularly for Italy. This is yet another European litmus test. If the EU and its Member States cannot come up with a sound solution, beyond the usual euro fudge of muddling through, markets could trigger a banking crisis with resulting political consequences that would further strengthen populists from Italy’s 5 Star Movement to France’s Le Pen.

The EU’s new Global Strategy – the EU’s next integration step forward?

Last week on 28 June, when Europe’s Heads of State and Government met in Brussels, they didn’t just deliberate on the UK’s historic decision to leave the EU. Far away from the limelight and press headlines was also the presentation of a new EU Global Strategy (EUGS) unveiled by the EU’s High Representative Federica Mogherini. Such a new foreign strategy was long overdue. The last one – the European Security Strategy (ESS) – dates back from 2003. Europe and the world have changed since then.

While the publication was supposedly purposefully held back in order to not give Brexiteers cannon fodder in the referendum given that the UK views efforts towards an EU foreign policy with great distrust, it’s arguable whether releasing it 4 days after the results of the referendum was any better. The combination of a Brexit-dominated European debate and the coming summer lull, could hinder a European public debate on this Global Strategy. This strategy, however, deserves reflection and discussion. It takes a reality check and provides thinking on the new strategic environment the EU finds itself in.

In my view, the document puts forth 4 particular strategic lines.

First, it tries to put European citizens at the centre and bridges internal and external dimensions. Doing a simple word frequency comparison the EUGS mentions “citizens” over 30 times while in the ESS the word only came up 3 times. The strategy endeavours to give European citizens confidence in the European project again. Mogherini notes in the very first sentence of her foreword that, especially after the UK vote to leave, the “purpose, even existence, of our Union is being questioned”. After the gruesome terrorist attacks in Paris and Brussels, the exposure of terrorist networks in Europe, the violation of the European security order in Ukraine and the horrors of war in Syria and Iraq leading desperate families to seek shelter abroad, European citizens are anxious about their security. What good is this Union for if it cannot provide basic security and answers to citizens’ fears?

The Global Strategy addresses this directly by placing a strong emphasis on the link between internal and external security, noting that security at home depends on peace beyond our borders. This theme has hit a nerve in European political circles; it is being taken up by many different actors. The Foreign Ministers of Germany and France in a joint paper have called for a European Security Compact that ensures “the security of our citizens confronted with growing external and internal threats”, and the former EU High Representative, Javier Solana, has proposed that Europe create a Defence Union, pooling defence policy efforts.

Second, under the heading “principled pragmatism” it strikes a balance between realpolitik and ideals/principles in foreign policy. Such a nuanced approach is attractive but the strategy doesn’t define it more deeply, which – IMHO – leaves some underlying internal contradictions unanswered. Where, under this heading, would principles begin and end? When would pragmatism overshadow principles? Or in practical terms: could an anti-ISIS alliance with Assad fall under this category? The concept is a difficult balancing act. On one hand, it provides the necessary flexibility to arrive at a number of foreign policy stances and options. On the other, without defining some sort of limiting parameters to how far that flexibility can stretch, might the concept not risk becoming meaningless? Reading the paper “A strong Europe in a world of uncertainties” by the Foreign Ministers Ayrault and Steinmeier, one wonders whether they haven’t poured cold water over the concept already. In their chapter on a European Security Compact, principles, ideals, values aren’t given attention. While the EUGS talks of principled pragmatism and moving “beyond the illusion that international politics can be a zero-sum game”, the Foreign Ministers write that “power politics are back on the world stage” and that the EU is a key power in its neighbourhood that will support an international order underpinned by “strategic stability based on a peaceful balance of interests”.

Third, the EUGS places a strong emphasis on the concept of “strategic autonomy”. Again, the document doesn’t adequately define what it means under this heading. Strategic autonomy has been used by a variety of actors to distance Europe’s ties to the United States and NATO arguing that Europe should act autonomously in world affairs. This would be a mistake. At a time when the United States, after its pivot to Asia, is recommitting itself to Europe’s security order with its European Reassurance Initiative (ERI) which will hold a budget of $3.4 billion for 2017, we’re calling for “strategic autonomy”? The EU is strongest when it works together with its American partners and Jan Techau from Carnegie Europe has put it succinctly writing that “the US will remain key to the EU’s role in the world for many years to come, and the paper’s blind spot on this crucial and uncomfortable part of the transatlantic relationship is not healthy”.

Fourth, the EU Global Strategy places great emphasis on the concept of state and societal resilience. It wants to strengthen the capacity of the EU and its neighbours to weather internal and external crises. In this context, the strategy also focuses on a range of sectors from energy and cyber security to strategic communications. This is a novel and important approach and ties in with Mogherini’s internal-external security nexus. However, it too falls into a similar conundrum as principled pragmatism. The EUGS argues on one hand, that “a resilient state is a secure state and security is key for prosperity and democracy” while rightly noting that the reverse is also true and that a resilient society featuring democracy lies at the heart of a resilient state. But which resilience will the EU provide? Sven Biscop from the Egmont Institute has put it well in his security policy brief arguing that “increasing the resilience of a state against external threats can easily lead to increasing the resilience of a repressive regime”. I have also stumbled over the wording in the EUGS that the EU will invest in the resilience of states and societies “stretching into Central Asia”. Is this an indication that the EU wants to become a player in that great game alongside Russia and China? I would believe that our levers in this region are rather limited.

These main lines provide a lot of food for thought to Europe’s foreign policy circles and they will have to be filled with further ideas and particularly actions. Because this is an area that the strategy so far falls short; the words aren’t matched with deeds, yet.

Under the heading “From Vision to Action” the document tends to make very little new proposals. It emphasises the lack of spending and coordination on defence and calls for the implementation of legislation that is already underway (such as the firearms directive). IMHO there were more interesting proposals from the paper by Foreign Minister Ayrault and Steinmeier than in Mogherini’s. They, for instance, suggested a European Semester on defence capabilities, a European civil protection corps, a standing maritime force, a once a year European Security Council meeting to discuss defence and internal and external security, and so on.

I would also level some other criticisms towards the EUGS. Ranging from the hijacking of development and certain foreign policy funds for defence purposes – such as the new proposal adopted on 6 July to allow funds of the EU’s only civilian conflict prevention instrument to be used for training and equipment of third-country armies – to the, in my view, ambivalence towards the transatlantic partnership, where the US has for example not been mentioned in connection with counter-terrorism work even though intelligence cooperation is crucial in this regard.

All in all, however, the EU Global Strategy is a breath of fresh air. It sets out new ways of approaching Europe’s foreign policy environment and it will serve as a basis for a new integration push in the defence area. Many actors are already highlighting the need for a more integrated European security and defence line and using EU governance options, such as the Permanent Structured Cooperation under Article 46 of the Treaty of the European Union, in that regard. The challenge now lies in identifying where further integration makes sense and how it can be taken forward. For this, more debate and consideration will be needed. Over the last year, Mogherini did a veritable road tour in the different Member States in preparation of the EU Global Strategy. Seems to me it’s time to hit the road again and now discuss her proposal and further integration steps in this field in the different capitals and foreign policy circles.

Brexit – The Great Societal Divide

The result of last week’s EU referendum in the UK wasn’t only a wake-up call to the European Union to get its act together. It was also an indication of great dividing lines running through society. Instead of bringing the UK closer together again, the vote has shown the extent of its fragmentation. The social fabric that is holding it together is under increasing strain. Never mind the obvious geographical divide with Scotland and Northern Ireland having voted to remain while Wales and England voted to leave. Three other particular divides are noticeable at first glance.

First, the generational divide. This was an election fought between age groups. While the 18 to 44 year olds voted overwhelmingly for remain, the 45 and up tended to vote to leave the European Union. This is particularly bitter for the young, especially those that weren’t old enough to vote, as they will have to live with the consequences for a long time to come. It also shows how changing demographics is affecting political decisions. In the future, political parties will vie increasingly for the votes of an older voter base. In the last German federal election in 2013, for example, almost 32% of the vote came from the age group 60 and up. This will also increase with time and can lead political parties to woo this particular electoral base with promises which could run counter to the interests of younger generations.

Second, a cultural divide. There is an increasing split between a kind of globalised, progressive, multicultural class – labelled the “Liberal Class” by Thomas Frank – and the regular blue-collar worker class. The former –a grouping that is internationalist with cross-border networks and experiences – thrives with globalisation while the latter is largely left behind. The world is increasingly complex. To understand and benefit from this complexity people use big data, global networks, global education and cross-sectoral understanding. As Joshua Cooper Ramo, Co-Chief Executive of Kissinger Associates, illustrates in his book The Seventh Sense – Power, Fortune and Survival in the Age of Networks, the secret to power now is understanding the new age of networks and how everything is connected. But this is not an option to the average worker. He, instead, feels ever more disenfranchised from global developments. It explains why university towns in the UK such as Oxford and Cambridge and cosmopolitan London voted overwhelmingly to remain in stark opposition to the shires in England. And why parts of Labour weren’t able to mobilise their own traditional supporter base for the Remain camp. This particular division, however, doesn’t just hold true to the UK. It’s a divide in a whole range of countries in the West. Be it from the US where Donald Trump has positioned himself as the antidote to a globalised out-of-touch elite, to France or Germany.

Third, as has been raised by many economists, there is increasing social inequality. All these divides of course overlap and they have most likely always existed in some form or another but what has changed is that they have become even wider, even more pronounced and even more virulent.

Society has become fragmented and this fragmentation has also been hardened by digital technologies. First, social interaction is decreasing. More and more products and services are provided online. It’s not necessary anymore to engage in social interaction to order something. Similarly, how often do you see people sitting at the same table looking at their mobile phones as opposed to engaging with each other? Secondly, social media has the potential to harden existing views, possibly decreasing dialogue and mutual understanding. When you go to Facebook, google and co. you get to see those articles and feeds that correspond to your previous browsing experience, clicks, likes, shares and views. One is in his own personal bubble, getting his or her views constantly reinforced rather than challenged. This hardens views and could undermine the willingness to understand where others are coming from. Perhaps it is one of the reason that pundits have recently been getting more and more social phenomena, such as the rise of Donald Trump, wrong. As they have not been in touch enough with real people on the ground but instead have been in their own digital cocoon.

Divides are also becoming more poisonous in other very obvious ways, such as “natives” versus “foreigners” and concerning the whole refugee debate. Racist rhetoric that over the years has started to thrive online has spilled into reality when politicians stand in front of a bus pointing a finger at a picture of desolate humans fleeing the atrocities of war and ISIS and blaming them for a countries’ woes. The most recent reporting about xenophobic attacks in the UK following the Brexit vote are particularly worrying, as are the increasing number of refugee shelters being burned in Germany.

The Brexit referendum has unveiled all the open, festering wounds in society. But before the country can address these it must find new leadership and resolve its relationship with the EU after the vote. Cameron has turned himself into a lame-duck prime minister, Corbyn is stubbornly clinging on to the Labour leadership, and with the exception of Nicola Sturgeon nobody is willing to as of yet take real action in finding a solution on how to move forward. The British political establishment seems to be in a state of shock. After the shock has passed, and it seems to be already passing, a new leadership will have to emerge that can not only address the UK’s relationship with Europe but also the relationships within its own society. And this – alas – is not just a task for the UK alone. It’s the responsibility for political leaders in many European countries. A new sense of social togetherness needs to be found. In the meantime, keep calm and carry on.