Dutch courage? Takeaways from the election

Relief! The Dutch voted against xenophobe populism. A clear victory against extremism, Francois Hollande called it. The nationalist Geert Wilders didn’t win. That’s what’s making the rounds. The fact that Wilders didn’t become the strongest party in town is significant. But let’s not drink too much of that Kool-Aid.

The closed-society populists didn’t per se lose. Wilders defined this election. He was front and centre of it. Issues of immigration, globalisation and Europe dominated the campaign discourse. And other parties rushed to join in, moving more to the right. Prime Minister Mark Rutte’s open letter, where he told immigrants to “doe normaal” (act normal) or go away, went in that direction.

Wilders won seats, the government parties lost seats. Labour tanked in this grand coalition. It lost around three-quarters of its seats, while the liberals lost eight. Now, Wilders PVV is the second largest party. It will be the parliament’s main opposition.

So this election didn’t stop the populists in their tracks. It slowed them down. It bought time. Time that will have to be used to win back the disenfranchised, dissatisfied and disillusioned. And this in a time where the political landscape is more fragmented than ever. Thirteen parties are entering the parliament. The new government is likely to be a coalition of four to six different parties. Agreeing on and sticking with an agenda for change will be difficult. But it’s imperative.

The election showed that politics is becoming political again. The field is wide open. Yes, it always was a bit more so in the Netherlands with its culture of multi-party government. But all over Europe we are witness to this phenomenon. Grand coalitions and the constant battle for the middle ground – with centre-right parties flirting left and centre-left parties flirting right – have drained politics. If everyone’s huddled in the centre, the extremist fringe looks like the only alternative.

Second, the election proved again that national elections are becoming more European. This election was a European election. All of Europe watched it, all of Europe discussed it, and Europe was part of the election debate. It also saw a record turnout of Dutch voters abroad. Twice as many Dutch from abroad voted in this election compared to 2012.

More importantly, however, it showed again that you can mobilise and motivate voters with a clear open-society, pro-European, constructive patriotic orientation. This pattern is hardening. Van der Bellen did it. Jesse Klaver just did it (almost quadrupling the Greens’ seats in the Dutch election). Macron is doing it. During the week of the Dutch election he went to Berlin with a pro-European message. And the Social Democrats in Germany are trying to do it. The Pulse of Europe citizens’ initiative demonstrates that people care about Europe and are willing to stand up for Europe. EU flags aren’t just swung in Ukraine. They are now swung every Sunday at 2pm in countless European cities, where citizens make their voice heard for a strong European Union.

This is part of the recipe on how to win elections currently – bringing together an open, tolerant, empathetic, pro-European vision with a grounded, civic, positive pride in your own country’s culture and way of life. It’s bringing together the outside and inside and forming it into an “us, together”. It’s a positive vision against the negative vision of the populists. And in doing so, it follows the advice of the great Dutch humanist Erasmus, namesake of the European student exchange programme: “Give light, and the darkness will disappear of itself.”


The cracks in society: Escaping the echo chamber is not enough

This year has been a watershed for progressive forces. The West is in the grip of a populist insurgency. Brexit and Trump are a result of this tide.

In search for explanations, one particular buzzword is defining the discourse: “echo chamber”. Many pundits have written insightfully on how progressives are stuck within their own filter bubble and have forgotten how to engage with those who think differently. They are right. But this doesn’t seem to go far enough. Perhaps, it’s too shallow an analysis. It’s not just about the (social media) echo chamber that simply reinforces your own worldview; it’s about the fact that societies have become more self-centred. Digitalisation has led to greater individualisation.

Yes, the digital environment empowers but it also makes selfish. With Fitbits and smartphones we continuously self-track our own activities and performance, in an effort to self-optimise. Facebook and Twitter echo our own views. It’s about ourselves. It’s an ethics of vanity that Edmund Burke warned against. The digital world reaffirms existence. I browse, therefore I am. Being online is who we are. Studies show that, on average, we are on our phones 221 times a day. Five and a half hours are each day supposedly spent on digital media. That number is even higher for younger generations. It diminishes the scope for intimate interaction. But it’s relationships and experiences that change people and make them grow. We cannot build our own individual ladders to heaven and leave the total human enterprise unredeemed, as Reinhold Niebuhr wrote.

The digital environment also breeds immediate desires, envy and painfully illustrates inequality. Algorithms show desirable products. Smartphones show how the most luxurious of society live. It’s now possible to constantly see a greener grass on the other side. Expectations are rising faster than before. And as digital technologies have grown so has participation in mediating institutions, such as trade unions, faith-based communities and civic organisations, fallen.

Alongside these trends there’s also greater isolation. Digitalisation and automation are changing the nature of the workforce in ways we do not yet comprehend, with people falling out of the workforce or falling into the digital self-employed. There are also too many losers of globalisation and people that feel left behind culturally. They feel no longer useful or part of something bigger. It’s like they’re falling out of society.

It is this mix of individualisation and isolation that weakens the social bonds of community and democracy. The World Values Survey has shown that there is a deconsolidation of democracy as particularly younger generations, drawn to digital technologies, are less attached to democratic values. The percentage of people who say it is essential to live in a democracy has plummeted. Less than 30% of Americans, Dutch and British citizens born in the 1980s believe so. Only 36% of millennials in Europe think that a military takeover against an incompetent government would be illegitimate.

Democracy is a system of compromise. But in this digital age, no one wants to compromise anymore. Over the past months and weeks I have met more and more people who are tired of compromise. They say they voted in an election and instead of getting what they wanted, they got a compromise. But democracy isn’t binary. It’s a long, messy, complicated, unsatisfactory compromising process. Populism, however, is the desire for fast, unrealistic solutions to complex problems.

The European Union is a prime example. Compromise has gotten ever more difficult to achieve between the EU Member States. But the EU is built on compromise. Compromising requires leadership. It usually requires the strong to give in and make that extra effort for the greater good. But Europe’s strongest Member State, Germany, has been reluctant to depart from its austerity drive, for example. Similarly with the United States. The US has been providing leadership and been an anchor for a rules-based world order. But with Donald Trump, the United States has voted to give up that role. People felt their country has done too much, given the world too much and that it was time to make America great again. Countless citizens feel that way about their country. Everybody wants to “Make X great again”, as Mark Lilla wrote in the New York Times.

We are moving from the Art of the Compromise to the Art of the Deal. Compromising is self-less. You give up something to find something greater together. Dealmaking is selfish. You expect something for giving something. No doubt, both are necessary in the tough world of international relations. And the EU, too, must engage in dealmaking. But dealmaking cannot stand alone in the world either.

There needs to be a better balance again between compromising and dealmaking, between change and security, between individualisation and community. Individualisation, too, can be a force for good. For example, when it unleashes the creative entrepreneurial spirit and allows people the freedom to fulfill themselves. But individualisation is getting more extreme. Simultaneously ,there is indeed a nascent desire for more community and coming together. The Munich “Refugee Welcome” event was one moment where that desire was awakened. Yet, bonds of society are currently loosening and societal rifts need healing.

That means it’s not enough to escape the echo chamber. One has to actively engage with opposing views and seek how these could be reconciled with one’s own and where common ground could lie. This is the tough question; it is a thin line that separates compromising from collaborating. How far can one go in finding common ground? Principled engagement should be the guide. Engaging and seeking compromise, finding common ground that can advance your principles. It’s the wisdom of the hitchhiker. If the first car that offers you a ride is only going halfway to your destination, take it.

Edmund Burke, the great conservative philosopher, warned against the loss of social wisdom, loss of community, loss of identity, all of which would bring social disorder. He highlighted that politics is not just about the interests of individuals; it’s about preserving a community, a social order. According to Jesse Norman, Burke epitomised the “balance between ego and circumstance, between ambition and constraint, between individuality and society”. Maybe it’s time again for more Burke and less Zuckerberg.

Sleepless in Europe: Implications of Trump’s Victory

The following is a longer article that I wrote for the Heinrich-Böll-Stiftung Europe. You can find the original here.

I wasn’t going to make the same mistake twice. The last time a vote of historic proportions took place, I went to bed thinking catastrophe might just be averted. The next morning, I woke to a changed Europe; the United Kingdom had voted to leave the European Union. This time, I stayed up all night fearing the worst. As dawn broke, I went to sleep in a changed world; Donald Trump is US President-elect.

For months we have been witness to an election campaign that has brought out the worst in people, one defined by populism, elitism, egotism, sexism and racism. This has uncovered a country riven with deep societal wounds: the Disunited States of America.

Donald Trump positioned himself as the election’s change agent from the right, channelling the rage against the political machine. He was the outsider who rallied the disenfranchised, disempowered and disillusioned. They decided, better the devil we don’t know than the Clinton we know. He tapped into the defining American impulse for freedom and bastardised it. Not only did he promise to break free from the establishment and political correctness, in his rallies he also shook off long-established social codes, and with them decency and civility. In doing so, he gave credence to the words of the American novelist Marilynne Robinson that ‘no society is at any time immune to moral catastrophe’.

This isn’t just an American story – it’s a global story, it’s a European story. It’s the new Zeitgeist. Autocratic, ‘strong man’ politicians and parties have become the vanguard against the establishment and globalisation, in the words of American political scientist Mark Lilla, to ‘Make X Great Again’. It’s Trump, not Trudeau. Orban, not Obama. Putin, Erdogan, Duterte, Kaczynski – the list is growing. Former fringe parties and candidates are becoming mainstream, while the centre ground is slowly crumbling. Since 1990, the share of the vote held by the centre left and centre right has fallen by 12%.

The US election result is a populist wake-up call for the European Union, and it’s not its first. The alarm has been ringing for years: Hungary’s slide into illiberal democracy, the increased popularity of far-right parties in the European elections, backsliding on women’s rights and the rule of law in Poland, Brexit. Too often, though, the EU has hit the snooze button and finally woken up without a clue of what to do, or found itself in political gridlock. This has not been helped by the fact that, as in Washington D.C. in recent years, Brussels is plagued by political dysfunction. The European Union and its Member States have failed to implement the planned financial transaction tax, to fight tax havens, to agree on a system to manage the inflow of refugees, to advance sustainable debt relief for Greece…. The list goes on. In a world that is burning, the EU’s ‘leaky bucket’ efforts to quell the flames have unsurprisingly inspired little confidence. As a result, right-wing populist, left-wing populist, anti-EU parties are in the ascendant and the forces of disintegration are on the march inside the European Union.

Last week Wednesday, while millions of Europeans looked across the pond in disbelief and dismay, there were clearly also those who celebrated the bloody nose Trump gave the establishment. Far-right leaders such as Le Pen in France, Wilders in the Netherlands and Strache in Austria rejoiced over Trump’s victory. Europe’s populists hope that it will give them increased momentum in a number of crucial elections – in particular the referendum on constitutional reform in Italy, the re-run of the Austrian presidential election in December, and the general elections in France, the Netherlands and Germany in 2017. But how will Trump’s win, and the way the election campaign was conducted, actually affect politics in the EU?

Trump’s playbook – a European translation?

Populist parties in EU Member States will study Trump’s (and Farage’s) methods very closely. They are likely to continue the march of post-truth politics – appealing to emotion over fact, making outrageous statements that will provide cash-poor populists with media coverage. German right-wing populist party Alternative für Deutschland (AfD) has already admitted that it makes contemptible, outrageous statements to gain media attention, allowing it to dominate the political narrative. Likewise, it aims to discredit traditional media outlets as simple pro-establishment propaganda machines. Like Trump, who baptised CNN the ‘Clinton News Network’ and accused the media of pro-Clinton bias, the AfD and others deride the classical media networks as Lügenpresse (lying press). Simultaneously, populists are building and advancing their own media brands. The Breitbart News Network, the so-called voice of Donald Trump’s campaign, has already announced that it will expand its European operations from the UK into France and Germany.

With a little help from friends…

Foreign interference in European elections is also likely to be an increasingly important factor. The US electoral campaign showed the havoc caused by leaks and hacked e-mails. It is undeniable that Russia played a role in this. The Kremlin is not only funding ‘insurgent’ parties, it is also engaging in information warfare for their benefit. At a recent press conference, Chancellor Merkel confirmed that Germany ‘is currently having to deal […] with internet attacks that are of Russian origin, or with news which sows false information’. A case in point is the alleged abduction and rape of a Russian-German girl by asylum seekers which was reported in the Russian media. Although subsequently found by the German police to be without grounds, these reports and the Russian authorities’ subsequent accusation of a cover-up led to anti-migrant protests by the country’s large Russian minority at a very sensitive time.

A Brave New World: foreign policy under Donald Trump and the EU

To paraphrase Eminem: ‘Will the real Donald Trump please stand up?’ Naturally, it’s hard to predict the extent to which candidate Trump will be President Trump – you can’t study the script of an improv act. Already Trump is sounding more conciliatory ranging from his victory speech to his latest remarks on Obamacare. But, leaving aside his flip-flopping, demagoguery and the question of whether transatlanticist Republicans would be able to manage him, he has stuck to one consistent, albeit raw, foreign policy approach: ‘America First’. US interests will be front and centre. Consequently, if he sticks to this, he is likely to pursue a purely self-interested transactional ‘the Art of the Deal’ foreign policy.

The possible contours of such a Trump scenario throw all of the United States’ commitments and guarantees around the world into doubt. Everything could be up for negotiation, shaking the transatlantic alliance to its foundations and changing the very nature of the West. It puts the international order into a black box. Under such a policy, the United States would no longer be the guardian of the global rules-based liberal order. It would leave the West rudderless in uncharted waters. Great uncertainty now hangs over the world’s many theatres of crisis, ranging from Southeast Asia to Eastern Europe and the Middle East.

While US estrangement from Europe isn’t particularly new, this would be a historic break. The Bush administration didn’t particularly invest in the transatlantic alliance and instead divided the continent into New Europe and Old Europe. President Obama, similarly, showed little interest in the EU. A Pacific-oriented president, he pushed forward the pivot towards Asia and downgraded the transatlantic alliance. In 2011, former US Defence Secretary Robert Gates ominously declared that there is a ‘real possibility for a dim, if not dismal, future for the transatlantic alliance’. That future seems to be now.

Trump’s break with 70 years of US guarantees is a watershed moment. He has made no commitments to the transatlantic alliance, to NATO or to the defence of the Baltics. NATO in particular has been weakened not only by Donald Trump’s position but also by the authoritarian putsch that recently took place in Turkey. There are cracks appearing in the European security umbrella through which Russia is becoming increasingly visible. The Kremlin is being emboldened by the lack of American leadership and Trump’s refusal to make commitments. A Russian government spokesman has already suggested that Trump scale back NATO deployments to improve relations. It is also telling that, more or less on the same day that he sent a congratulatory telegram to Trump on his election victory, Putin said that he was ready to restore a dialogue with Poland. Now that feelings of insecurity and uncertainty have increased in the capitals of the Baltics and Central and Eastern Europe, Putin approaches them – from a position of strength – to offer talks.

Following his transactional approach, it is likely that a Trump administration would explore a grand deal with Russia on Ukraine. This could take the form of requesting Russia’s withdrawal from eastern Ukraine in return for the recognition of the annexation of Crimea, and guarantees that NATO would not expand to include Ukraine. Any such overtures would endanger European sanctions against Russia, which are already under pressure from many social democrats. Many EU Member States, but in particular the Baltic countries, would be extremely concerned by such a development. To what extent, or rather for what price, might President Trump open the door for such deals and leave countries such as Estonia – ‘the suburbs of St Petersburg’ according to ally Newt Gingrich – to Russia? Such deals and negotiations would lead to a return to ‘spheres of privileged interests’ and encourage brinkmanship and showmanship in the game for the best deal.

Donald Trump’s foreign policy approach also presents serious challenges in other policy fields. Nuclear proliferation could accelerate, the Iran deal could unravel, and the spectre of a global trade war looms, with Trump promising to slap more, higher tariffs on Chinese products and label China a currency manipulator. Also, given his criticism for trade deals, the controversial Transatlantic Trade and Investment Partnership (TTIP) is, for better or for worse, if not dead then at least on ice. President Juncker has already said that he doesn’t see TTIP materialising in the next two years. On the climate front, the European Union will also face difficulties. Donald Trump has tweeted that climate change is a hoax perpetrated by the Chinese to hurt American industry. His energy transition team is stacked with oil lobbyists and climate change sceptics, and he has vowed to exit the Paris Agreement.

Europe’s foreign strategy for Trump: engage, mitigate and lead

Trump is a rule-breaker in a rules-based order. He is also likely to seek to divide the EU Member States and play them off against each other. They mustn’t let him. The European Union must have a strategy in place. It was the right call for German Foreign Minister Steinmeier and the Commission to insist on a special meeting of the EU’s Foreign Affairs Council on Sunday to discuss the implications of the US elections for Europe, and it is more than a disappointment that the Foreign Ministers of France and the UK decided not to attend. As Europe’s largest military powers, it would have been necessary to have them at the table, when discussing Trump’s implications for Europe and European security. But while French Foreign Minister Ayrault had an excuse (he was meeting the UN Secretary-General), it’s clear that Foreign Secretary Johnson simply wants to ride the elevator alone in Trump Tower.

A European strategy must be built on three interlinked features: engagement, mitigation, leadership.

First and foremost, European leaders cannot wait for Trump to make up his mind by himself. They need to engage with him in unison and lay down their concerns and interests. Presidents Tusk and Juncker have already taken the opportunity to invite Donald Trump to Brussels for an EU-US Summit at his earliest convenience. But this mustn’t lead to unnecessary temporising. Until such a possible summit, the time needs to be used to create links with the new Trump administration, reach out to Republicans, and promote track II diplomacy. This will help to gain a better understanding of the incoming presidency and shape its thinking and personnel on Europe. Obama’s visit to Germany should be a valuable opportunity to hear his views on the matter. Likewise, different contacts and forums need to be utilised – be it US ambassadors in Europe, NATO, the OSCE and particularly bilateral contacts and visits. European leaders should also reach out and visit the US. If Prime Minister Theresa May, or any other EU head of state or government, visits the US soon, they should make sure to debrief their European counterparts with regard to foreign and security issues on their return. And a special responsibility lies with Mogherini to quickly establish working relations with the upcoming US Secretary of State. Trump has had conversations with a number of European leaders following his victory, but the person with whom he has spent most time so far appears to be UKIP leader Nigel Farage. European leaders shouldn’t let that stand.

The EU also needs to mitigate the possible worst consequences of the Trump presidency. That means accepting as a starter, as President Juncker said, that ‘the US will not forever take care of our security. We need to do it ourselves’. Europe needs to come together in the sensitive field of defence. To quote Abraham Lincoln, ‘A divided house cannot stand’. The EU needs to further develop its Global Strategy and reinforce its security architecture. That means boldly moving forward with a European Defence Union and employing the various different options available under the Lisbon Treaty, such as Permanent Structured Cooperation, to advance a common European defence agenda, for example by pooling and sharing military assets, procurement, R&D, putting in place a European Semester for defence, and so on. It means advancing military and defence cooperation with its northern neighbour Norway and exploring it with the UK in the context of Brexit.

Thirdly, as wishful as it might sound, the European Union needs to increase international leadership. We now live in a ‘no (wo)man’s world’ – a ‘G-0’ as coined by Ian Bremmer from the Eurasia Foundation. The vacuum Trump might leave needs to be filled. That means building alliances, for example with regional organisations such as ASEAN to help manage the South China Sea, with powers such as China, Japan, South Korea, India, Indonesia, and Brazil, by building coalitions on issues such as the global commons (climate change, management of the high seas, cybersecurity, space policy, etc.), by establishing and investing in formats to mitigate conflict such as the Normandy format or the P5+1 effort on Iran, and by shoring up global institutions such as the OSCE and UN.

Of course, it could all end up differently. There is the off-chance that Trump will leave behind the Trump of the past and now become presidential. But that’s wishful thinking and not something to base a policy on. Hope for the best, prepare for the worst.

For an open, progressive movement that connects the struggles

Last but not least, European democrats and progressives need to draw lessons from America’s election result. There are two hard facts that confront us.

First fact: the populists are winning. They are becoming the agent of change because they empower people who feel disempowered. Progressives have been fighting amazing battles for minority rights and gender equality, and have made major cultural progress. But somewhere along that line, we forgot about those that felt left behind and disempowered, who have started to feel like politics isn’t about them any longer. Too often these people have then also been treated with resentment. This needs to be addressed if we wish to overcome the current social divisions.

It means listening to and engaging with the people that feel left behind economically, socially and particularly culturally. US opinion poll analysts FiveThirtyEight illustrate the culture gap by comparing which American counties with organic supermarket Whole Foods and which with Southern-themed restaurant Cracker Barrel voted for Trump: Trump won 76 per cent of counties with a Cracker Barrel and 22 per cent with a Whole Foods. That’s a 54 per cent gap compared to 19 per cent in the 1992 election.

Not everyone who voted Trump is a sexist or a racist. If those people will not be heard by progressives, then they will be heard by the Trumps of this world. If progressives do not open up and engage with people that think differently, then they are creating the very conditions in which demagogues like Donald Trump can thrive, and are contributing to the problem. Shaming and labelling people isn’t going to change their minds; it’s just going keep them silent in the opinion polls until that silent majority steps inside the polling booth and then exercises its right to vote Trump.

Second fact: the autocratic populists are an international movement. Putin helps Trump emboldens Le Pen and the downward spiral continues. Progressives are fighting many separate battles and campaigns but have no common, transatlantic movement. It’s really crucial to connect the different struggles – the divestment campaign, the campaign for the rule of law in Hungary and Poland, workers’ rights campaigns such as fighting precarious jobs at Amazon and the pitfalls of digitalisation, protests against the Keystone, North Dakota and Nord Stream 2 pipelines, campaigns for indigenous rights, environmental and social movements, human rights campaigns, literary movements, the Black cultural revival in the US as so well demonstrated by the novelist Ta-Nehisi Coates and musician Robert Glasper – and by doing so build a progressive narrative of change. These transatlantic and intra-European bridges need building. It also means engaging with young people in a transatlantic context. The millennials have mostly lost out in each election so far. They are not coming out en masse to vote and the decisions taken, such as Brexit, are against their own immediate interests. It’s a baby boomer backlash.

The US and the UK, the world’s two most open and liberal countries, have just voted to close off their societies. Hate crime levels in these countries have increased. Europe must fight the forces that wish to retreat into a populist cocoon. Now is the time to go out and engage, discuss and convince, change and be the change you want to see, build bridges and a movement that doesn’t stay still. It’s following the spirit of Winston Churchill: gather your strength for dawn, for the dawn shall come. The alternative is more sleepless nights in Europe.

Russia in Aleppo – cont.

Russia’s strategy of oscillating between escalation and de-escalation seems to be paying off. As soon as EU sanctions in response to the Aleppo bombings were raised, Russia announced a “humanitarian pause”. Coincidentally, that pause was on the very same day that the EU’s Heads of State and Government were going to discuss the issue. Even before that announcement support for more EU sanctions against Russia was rather weak. Moscow’s tactical play further emboldened the naysayers and undermined the pro-sanctions camp. Now the issue seems off the table again, Russia can go back to bombing.

Its aircraft carrier Admiral Kuznetsov is off to the Eastern Mediterranean to join operations in Syria. Spain was even going to allow the warship to refuel in one of its ports – provide it with oil so it may participate in the destruction of Aleppo. Only after an intervention by NATO’s Secretary General and others, did the Spaniards back down and have Russia withdraw its request for refuelling.

Meanwhile, the media cycle has moved on. Aleppo is no longer the story of the day; the Western offensive in Mosul is. Putin must be laughing to himself how he played this. He put the West off guard, sowed division and in the process even undermined Western sanctions policy. When Merkel intervened and invited him to Berlin for talks, Putin brought along with him Vladislav Surkov, who is on the EU sanctions list and banned from entering the EU (he was given an “exception” by the German Foreign Ministry in order to attend). And the day before his arrival, Putin mentioned at the BRICS Summit that Western sanctions can go “screw themselves”.

How much more time and escalation in Syria will it take before consequential action, such as additional sanctions, will be back on the front burner? Now is not the time to weaken resolve. Weakness and indecision embolden Moscow. It’s time for grit and backbone. You can’t “euro-fudge” the Kremlin.

It means making sure that Russia is not re-elected on the Human Rights Council this coming Friday at the UN General Assembly. It means already drafting sanctions proposals. It means not continuing business-as-usual, for example with Spain simply providing fuel to Russian warships. It means ratcheting up the pressure on Gazprom. The gas giant has raised the spectre of abandoning its Nord Stream 2 pipeline at a board meeting on 9 November. Well, let’s help them decide!

Bombs, Bullets and Bytes: Putin’s challenge

Aleppo is rubble. Men, women and children are torn apart limb by limb as bombs are dropped by Assad’s and Putin’s planes. Is that what it took for the West to come to the brutal realisation that it can’t manage Russia in Syria? Cynically speaking, the West lost Syria a while ago. Ever since President Obama drew that meaningless red line against chemical weapons, Putin knew Syria was his for the taking. Talks of cooperating with Russia in Syria and building an anti-ISIS alliance might have been genuine but they were self-deceiving. It was an attempt to use an enemy (ISIS) that unites us. But the proverb “the enemy of my enemy is my friend” ain’t enough. It cannot gloss over the divergence of core interests in Syria between Russia and the West.

The outrage of the international community now calls for action. Indiscriminate bombing of civilians cannot be left unanswered. But – woefully – there aren’t many potent options available in Syria it seems. Establish a no-fly zone? How would that work? Would the West really be prepared to shoot down Russian planes? Not a chance. There might have been a time when this option could have been feasible but its chances are gone. Provide Syrian rebels with anti-aircraft weaponry? These weapons might just end up in ISIS’ hands. Another set of sanctions against Russia? At first look a good idea. So far, however, there’s no united European front for this. The Russia-smitten Social-Democrats in Germany are against as are other EU Member States. The Conclusions of the EU Foreign Ministers of today (18 October 2016) don’t raise sanctions (that’s for the Heads of States and Governments to discuss this week) and they also show a reluctance to name Russia directly – instead it’s packed under the rubric of Syria and its “allies”. Sanctions imposed ideally also ought to be tied to demands. What would those be? Stop bombing Aleppo? They can easily do so when it’s fallen – would the sanctions then be lifted? Or bring those responsible to the International Criminal Court? Forget about it. Don’t get me wrong – sanctions would be symbolically important but it would be unclear how to proceed with them. Russia has the upper hand in Syria. It can escalate and de-escalate the situation as it sees fit. Just now it has said that it will have an 8-hour “humanitarian pause” on Thursday. This strategy of escalate/de-escalate allows the Kremlin to throw European decision-making off guard and tests internal Western cohesion.

So maybe the table of options needs to be widened to areas where we are strong and have influence. Merkel could – apart from floating sanctions – announce that Nord Stream 2 is a no-go. Germany could abandon its selfish rejection to join Central and Eastern European countries in an energy solidarity cluster. The EU’s anti-trust watchdog could weaken Gazprom’s pricing power in Eastern Europe. Murky Russian financial networks in the EU could be further examined and action considered, etc.

Simultaneously, the European Union also needs to dramatically step up its game when it comes to cyber-defence. Putin puts pressure externally and internally. He uses bombs in Syria, bullets in Ukraine and bytes in the West. Russia’s information warfare has entered a new level. Interfering in elections with cyber attacks against the Democratic National Committee and feeding information to Wikileaks, stoking up societal divisions in Europe via disinformation such as the German case of “Lisa”, and so on. Europe should prepare itself. Elections will take place in Germany and France in 2017 – besides promoting far-right parties via funding and other means, disinformation can play a role here too.

We have to strengthen our internal resilience and social cohesion. Vice-President Joe Biden came out saying that the US could engage in a reciprocal cyber attack by, for example, attaining and publishing information showing the hidden (corrupt) wealth of Putin. But again, this would be in an area where influence is limited. Putin squashes the domestic media – only few would dare put such stories out at the risk of their own life. We cannot play Putin’s game – we must play our own.

Walk it like you talk it: The Paris Climate Deal

After ducking and dodging, pausing and procrastinating, and finally stumbling and struggling, the European Union ratified the Paris climate agreement. This landmark accord will now enter into force on 4 November 2016. This is history in the making. In the past, climate conference after climate conference crushed hopes. With the momentous deal in Paris, the world community pledges to keep the increase in global average temperatures to well below 2ºC (aiming to limit it to 1.5ºC).

But now the real work begins. Emission-reduction promises need to be raised. Thus far, the ambition doesn’t add up. The currently submitted emission-reduction promises would still lead to a warming in excess of 3ºC – a catastrophic scenario. And that’s just the ambition on paper.  It’s time to move from words to deeds. That means investing in the transformation towards a low-carbon economy. Infrastructure is key here.

More than 60% of the world’s greenhouse gas emissions are associated with the current infrastructure stock. Meanwhile, Europe’s infrastructure is crumbling. Mobilising investments into sustainable, hi-tech infrastructure would kill two birds with one stone: make Europe’s infrastructure fit for the 21st century as well as climate-friendly. In addition, it would give a much needed economic boost. According to economist Lord Stern strong investment in sustainable infrastructure is “the growth story of the future”.

The current economic context is also favourable. We are living at a time of great technological development – it’s an opportunity to upgrade as well as build infrastructure with the latest technologies. Second, the low interest rate environment is a boon for such an investment drive. Germany, for example, is currently making money with its debt due to negative interest rates. It is irresponsible to not make use of this situation to renew Germany’s ailing infrastructure! Instead German Finance Minister Schäuble is dogmatically sticking to his austerity policies while floating short-sighted tax decreases.

Infrastructure investment is the talk of the town. The IMF and World Bank raised it in their annual meeting last week, both Hillary Clinton and Donald Trump have called for massive new infrastructure spending, the European Commission is going for it by doubling its Investment Plan, former President of Mexico, Felipe Calderón, has called for it with a major new report from the Global Commission on the Economy and Climate, and so on.

This investment drive into sustainable infrastructure needs to happen on two fronts. First, the EU and particularly those EU Member States who can (read: Germany) need to increase infrastructure investments. In spite of the European Investment Plan, the EU’s investment figures are still below pre-crisis levels. An intergovernmental investment fund – as proposed by the Jacques Delors Institute and the Bertelsmann Foundation – could for example also be established. In addition, it is important to note that only some EU Member States benefit from the low interest rate environment – other economies, most notably in Europe’s South are struggling with high rates. Mechanisms and facilities that would promote usage of low interest rates in the latter economies would be of great importance. In this context, the think tank Agora Energiewende has come up with the innovative proposal of an “EU Renewable Energy Cost Reduction Facility”. At the moment, the cost of capital for investments in renewables varies from country to country (for example, 10% in Spain, 12% in Greece, 6% in France, 4% in Germany). Such a programme would protect renewable energy operators from specific risks, which would reduce the cost of capital and thereby could, in their calculations, reduce the cost of expanding renewable energies by around €34 billion.

Second, private investments in sustainability need to be mobilised and the financial sector must be included in this task. A carrot and stick approach is required: financing climate solutions needs to be made easier and more attractive, while financing climate problems should be made more difficult. Many public actors are now realising the importance of making finance more sustainable by, for example, mandating climate risk disclosure standards for investments or defining clear criteria for green bonds. The G20 is working on it, the Financial Stability Board is working on it, as are China, the UK, France, and so on.

But the EU has been remarkably blind to these developments. Sustainability had been completely ignored in its Capital Markets Union. Only now the European Commission is waking up, aiming to establish a sustainable finance expert group that should develop a strategy. It’s unclear, however, whether this is a strategic shift or just a tactical delay. Is the European Commission really wanting to push the issue of sustainable finance? Or is it proposing an expert group to postpone taking action? If this committee is only established in 2017 and comes out with a strategy 2018, then it might be too late to draw any concrete legislative consequences this term, given that elections for a new European Parliament and Commission will come up in 2019. It reminds me of the saying by Charles Kettering: “If you want to kill any idea in the world, get a committee working on it.” Ingrid Holmes, Director of the E3G London Office, has come out with an excellent paper grading the progress made on sustainability in the Capital Markets Union, in this regard.

Simultaneously, investments in fossil fuel infrastructure need to be disincentivised. Such investments carry an economic risk as they are incompatible with a climate agenda and would therefore at some point or another lose their value. A whole range of actors starting with the Carbon Tracker Initiative and Bank of England to the ECB’s European Systemic Risk Board, have highlighted the risk of such a “carbon bubble”. End of this year, the European Commission will look at its Capital Requirements Regulation. This could, for example, be an occasion to discuss whether investors such as banks should hold particular capital buffers in place against the fossil fuel assets that they own – risk premiums for fossil fuel projects must be higher than for low carbon alternatives.

Last but not least, the global divestment movement has been incredibly successful in driving the climate agenda forward and getting institutions to divest from fossil fuels. So far over 50.000 individuals and 590 institutions, totalling $3.4 trillion in assets have divested from fossil fuels. This pressure must be kept up but simultaneously there should also be pressure on companies to switch to renewable energy sources themselves, thereby lifting demand for such renewable infrastructure. A bunch of initiatives, such as the Renewable Energy Buyers Alliance (REBA) or the RE100 are committing companies to go 100% renewable for their business operations. RE100, for example, so far includes 81 companies. Out of these, however, only three are from Germany (Commerzbank, BMW, SAP). Shouldn’t there be more companies in the land of the Energiewende that pledge to source all of their electricity needs from renewables? I could imagine, for example, that this might be worthy of a NGO campaign.

With the Paris deal, there’s now – on paper – a historic momentum on tackling climate change. This must now be galvanised into action by putting money where our mouths are and investing in the necessary climate infrastructure.

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.