The Geo-Politics of Shale

Alphen, Netherlands, 26 November.  Energy is the stuff of power.  Long dead British Socialist Aneurin Bevan once remarked, “This Island is almost made of coal and surrounded by fish.  Only an organising genius could produce a shortage of coal AND fish at the same time”.  Aneurin (he was Welsh and they inflict such appellations on their young) lived in those long-distant days before the EU concentrated such organising genii in Brussels.  Today, Bevan would have to add shale oil and gas to his irony.  As Britain contemplates a new energy policy to stop the lights going out (and the UN starts yet another doomed to fail climate change conference) the British Geological Survey suggests that Britain’s shale oil and gas reserves are enough to make the Island again energy self-sufficient for many years to come with up to 1,000 trillion cubic feet of gas alone. 

 

Britain is not on its own.  Significant reserves have been found in France, northern Germany and Poland.  Indeed, current estimates are that the top five producers could be the US, Canada, China, Brazil and the UK, with the International Energy Agency suggesting this month that the Americans could be energy self-sufficient by 2035.  It is not often that a genuine geopolitical game changer comes along but all the signs are that shale oil and gas is precisely that.

At present it is still too expensive to extract such oil and gas in volume compared with conventional hydrocarbons.  Indeed, current extraction costs in the North Sea could be up to $200 per barrel, compared with between today's marginal costs of between $50-60bn for the extraction of conventional hydrocarbons.  However, US technology is driving down the cost of both onshore and offshore extraction, and the British are among world leaders in extracting energy from tough environments.

There are also concerns about just how much of the suggested reserves can be exploited.  This may explain the reticence of governments to make forecasts that prove over time to have been too optimistic.  It could also be that governments are concerned about possible environmental damage and must in any case continue the search for balanced energy policies in which renewables remain an important contribution to the national energy mix.  There are also some possible and unfortunate side-effects.  Last year concerns were expressed in Lancashire that the use of high pressure water (fracking) to drive oil and gas reserves up and out of the shale had caused small earthquakes (a Beatles song?). 

What about the geopolitics?  If for once the major producers of oil and gas also become the major consumers then one of the main causes of systemic friction will have been removed.  Hyper-competition over resources between the consumptive democracies and the consumptive oligarchies such as China, in which power is legitimised by economic growth rather than the vote, looks at present to become the signature threat of this century.  Moreover, a shift in the balance of energy power away from the Middle East could (just could) make the region more stable as it will certainly concentrate the minds of leaders therein, although I fully accept it could have precisely the opposite effect.  As for Russia, Moscow would become one producer amongst many and would have to compete for exports on price…and behaviour.  

The implications for Europe's security and defence would also be profound.  Absent the need to look beyond its borders for energy would the US be quite so prepared to pay the price it currently pays to stabilise Europe's extended region?  It will of course pay close attention to oil-rich Iran’s nuclear ambitions and Egypt's political turmoil because the US guarantees Israel's security.  However, absent the comforting presence of an America focussing much (not all) of its grand strategic effort on Asia-Pacific and Europeans will surely once and for all have to get serious about security and defence.  At the very least shale would change the terms and conditions of the transatlantic security contract which at present threat from the great European defence depression.

There is a also delicious irony to this story.  On 21^st October, 1912 the British began work on HMS Queen Elizabeth, a super-Dreadnought battleship which joined the Fleet in 1915.  The Royal Navy’s first all oil-fired ship paved the way for the conversion of the entire British Grand Fleet from coal to oil and in effect started the West’s dependence on the Middle East.  Ironically, the new HMS Queen Elizabeth, a 65,000 ton super aircraft-carrier will be launched in 2015, just at the moment when such oil dependence may begin to come to an end.

Shale will also change th balance of power within states.  The UK’s massive shale reserves are under England and the English North Sea.  Energy is indeed the stuff of power.  Good luck Scotland!  As for Lancashire, I have never had any problem with giving Lancastrians a good fracking! I am a Yorkshireman. 

Julian Lindley-French

Labour Stalinism?

Alphen, Netherlands. 24 November.  It is all over the British news.  A Labour Party-controlled town council in Rotherham has just taken three foster children away from guardians because allegedly they had joined the United Kingdom Independence Party (UKIP).  This was done on the grounds that UKIP is a 'racist' party.  UKIP might have strong views about Britain leaving the European Union and the damage done to Britain by Labour-inspired hyper-immigration, but there is no evidence it is racist.  

 

Rather, the story is now rebounding on the Labour Party which is accused by some of Stalinist - a lethal dictatorship posing as an ideology. That is utterly unfair. The Labour Party has many faults but it is not Stalinist.  However, behind the moderate social democratic facade of Labour's national leadership lurk some dogmatic and intolerant leftist extremists that too often once in power Labour spends too much time appeasing.  As a hitherto life-long Labour supporter I abandoned the Party precisely because of the leftist intolerance of this branch of the Party and which too often leads to this kind of nonsense. 

 

There is also something very South Yorkshire to this story.  Rotherham is the neighbouring town to my own city Sheffield.  Both have long been home to traditional Labour supporters; hafrd-working, fair-minded, tough people who can be blunt but rarely dogmatic.  Indeed, as one of the first ever comprehensive school (ordinary) kids to go to Oxford I am hewn from the same block.  The trouble is that the kind of intolerant leftist bigots behind such a decision are attracted to places like Rotherham because Labour could put up a donkey as a council or parliamentary candidate and it would get elected. 

 

Such a ridiculous decision made against people who on the face of it seem very decent foster parents can only have happened due to the intolerant political correctness that the Left is imposing on British society.  It is an intolerance in which almost everyone is now looking over their shoulder (or over their blogs and tweets). This is for fear of the anti-free speech race and equality laws Labour introduced when in power to prevent dissent and to mask the appalling mess they created in my country.  Indeed, I just had to edit out a sentence from this blog for fear it might be mis-interpreted as racist when it was most certainly not and having known discrimination myself I am no racist.

 

First, Labour must apologise to this couple publicly and nationally.  Second, the Labour Party must make it perfectly clear that it will not tolerate such intolerance and cast from its ranks those extremists that are doing so much to create a climate of fear and mistrust in Britain.  Third, those contemplating voting for Labour at the next general election in 2015 should read the small print.  There is a very real danger that once again we will all be sold a social demoratic and moderate manifesto only to find ourselves once again at the mercy of Labour's hard Left. 

 

Labour is not a Stalinist party, but one only has to look at the damage thirteen years of Labour rule did to Britain to see that Stalinist elements lurk within its ranks. This kind of intolerant Leftist madness just proves it.

 

Julian Lindley-French           

The EU Budget: Fog in the Channel Continent Isolated?

Alphen, Netherlands. 22 November. The Americans call it Thanksgiving.  Today is the day collected Yankdom commemorates the fact that the lunatics and fanatics we British (and sensible Dutch) had rather sensibly tossed out had survived for a year in a wilderness that was to degenerate into the United States.  They were helped by the local native Americans which was probably the greatest error of strategic judgement since (according to Blackadder) “Olaf the Hairy, High Chief of all the Vikings, accidentally ordered 80,000 battle helmets with the horns on the inside".  Today is also EU Budget Day when our Dear Leaders head to Brussels to spend what could be several nights (this summit could be a fabled ‘three-shirter’) disagreeing only for Germany’s Chancellor Merkel, the EU Headmistress, to eventually tell them the correct answer to a question none of them thought they should ask; just how much does European ‘solidarity’ cost? 

 

On the face of it the seven year 2014-2020 EU budget that they are disagreeing is a huge argument over relatively paltry sums.  At €940bn the EU Budget represents just under 1% of the entire EU economy.  However, there is an important principle at stake. At a time of real economic pain across the EU when cuts are biting deep everywhere the Omission wants a gob-smacking 5.9% increase to some 1.05% of EU GDP.  The Omission tries to finesse this away by saying much of the money has already been committed to projects and that since 2004 its tasks have grown exponentially.  However, that masks the two essential budgetary contradictions: the EU only works if there is economic growth and too few European taxpayers are expected to pay too much for too many. 

 

Twenty of the twenty-seven member-states are so-called ‘net beneficiaries’, i.e. they get to have significant amounts of my money transferred to them for what is meant to be investment in cross-Onion growth.  In other words some 200 million people in seven countries (Britain, France, Finland, Germany, Italy, the Netherlands and Sweden) effectively pay for 300 million others.  With Poland gaining the most such transfers are called ‘solidarity’, which in Onion-speak means give me your money or else.  That was fine when western European economies were able to afford it. But as yesterday’s increased British borrowing figures showed that is no longer the case.

 

The EU Budget is complicated further by the industry-specific subsidies which also generate transfers from rich country to rich country.  The Common Agricultural Policy or CAP represents some 40% of the EU Budget (down from 50% in 2004).  In 2013 Germany will contribute €3bn, Italy (which is broke) €1.9bn, the Netherlands (me - and I am soon to be broke) €900m and Belgium (definitely broke but pretending otherwise) €800m, with Greece, Poland, Spain, France, Ireland and Hungary the biggest beneficiaries.  The EU locks in aspic a chronically-outdated farming industry supported by a CAP that emerged in the early days of 'Europe' soon after World War Two when it was feared Europe could not feed its people.

 

The summit will quickly get silly.  France’s President Hollande is preparing to do battle with British PR-Meister Cameron over the CAP because when in doubt at home a French president always attacks Britain.  In fact, much though the British would love it to be about them so that Cameron can be seen to go down with ensigns a-flying and guns a-blazing, it is not.  The Germans, Dutch, Finns and Swedes are also unhappy with the Omission’s 5%.  Moreover, it is not just how much money is spent but where on earth much of it goes.  The Court of Auditors has refused to sign off on the Omission’s accounts for seventeen straight years because of implied fraud in many EU projects (that is why I call the Commission the Omission!). 

 

EU Pretend President Herman van Rompuy has suggested a rather natty, naughty little compromise designed to tempt the British into a political trap.  He wants a reduction of €60bn in the Omission’s proposals but rather sneakily demands Britain abandon a rebate that was negotiated by a handbag-slinging Margaret Thatcher back in the 1980s.  The aim is to make the British again the issue rather than the stupidity of the system. 

 

The solution?  It is precisely what the Germans are rather sensibly suggesting; a ceiling of 1% EU GDP, cuts and reform to the CAP and more money transferred to infrastructure and regional development funding which benefits Europe’s increasingly urban population. 

 

So, to avoid soiled hand-made, taxpayer-funded shirts why not just go to Brussels and listen to Headmistress Merkel?  In any case, the real battle will be over European political union which will erupt soon after she is re-elected next September. 

 

There may well be fog in the Channel, but it is made far thicker in Brussels by the opaque bureaucracy that the EU is fast becoming.  Enjoy your Turkey Yanks and give thanks; you could be an EU citizen!

 

Julian Lindley-French

 

Britain's New Defence Covenant

Alphen, Netherlands. 19 November. Last week, General Sir David Richards, Britain’s Defence Chief said, “We have a whole load of tasks expected of us. Our political masters are quite happy to reduce the size of the Armed Forces, but their appetite to exercise influence on the world stage is, quite understandably, the same as it has always been”. Implicit in Sir David’s statement is a fear that the British Government could be about to make the greatest strategic error since the Suez fiasco in 1956, by implicitly and effectively abandoning Britain’s strategic partnership with the US through further defence cuts and insisting London can build a new defence relationship with Europeans, many of whom are cutting their armed forces to the point of extinction. It would be strategic illiteracy at its very worst reducing Britain to the third rank of defence actors and critically undermining wider strategic influence. Therefore, Britain needs a new Defence Covenant with a commitment from both major political parties to spend at least 2% of GDP (and that means real money) on defence for the next decade at least.

 

Britain is of course facing difficult economic choices but it is precisely such moments that coherent defence strategy is vital. Doing ever more with ever less is not strategy. Just around the corner major crises lurk in the Middle East, North Africa and beyond in which the British armed forces may not only be required to act but given the strategic brand they still represent will underpin all other tools of national influence. Moreover, defence expenditure in much of the world beyond Europe is booming. The one thing this world will guarantee is strategic surprise.

 

First, Britain’s military strategy needs to be lifted above the current muddle which still too often reflects an internal struggle between the services over money. As Britain shifts emphasis post-Afghanistan from land to sea, driven by the strategic choices being made by the Americans and the non-choices of Europeans, a powerful Royal Navy will be critical to British strategy. And yet, in spite of the two future super-carriers the Navy has only 19 serviceable surface ships to operate and network across five domains; land, sea, air, space and cyber and at least five oceans. The new Astutenuclear-attack submarines are reputed to leak and are too slow, whilst the new Type-45 destroyers are too few in number. A reasoned balance also needs to be struck between full-time and part-time forces. If the regular Army is cut again to 75,000 as is rumoured then placing so much responsibility for Britain’s future operational élan on a new Reserve Army will be taking an enormous risk to say the very least.

 

Second, Europe’s great defence depression will lead Britain to rely more not less on the Americans with NATO critical as a planning and command nexus between three parties; North Americans and Europeans at very different levels of capability and strategic partners critical to defence grand strategy. NATO, with Britain and France at its core, will find itself the Atlantic wing of an American-led Western grand strategy which will span the Pacific. However, to make NATO Europe work London must lead by example and such strategy is only credible if the British retain armed forces which are seen by Washington and others as capable, adaptable, agile, sustainable, but above all powerful even if only modest in size.

 

Now, with vision and political and will all these problems can be fixed and the new system made to work. And, given the equipment planned a powerful and affordable future force is achievable. Therefore, the 2015 Strategic Defence and Security Review must make an unequivocally clear statement of ambition to rebuild Britain’s forces with funding to match. This will be the new Defence Covenant underpinning a revised force plan that will seeFuture Force 2020 as merely a milestone en route to Future Force 2025and then Future Force 2030. What matters is a clear force development strategy and no more cuts to the defence budget.

 

Cameron’s latest mantra is that Britain is engaged in a global race. What about the defence race? The government claims it will spend £160bn (c.$250bn) over the next ten years to rebuild the British armed forces, and that having closed the £38 billion (c$60bn) black hole in Britain’s defence budget money is coming available. However, the word is that the armed forces will take a further hit in the next Comprehensive Spending Review. Unfortunately, if London cuts the defence budget further not only will Britain’s strategic future be in jeopardy, but with it NATO and the alliance with the United States as London in effect chooses to tie itself solely to a defenceless continental Europe in headlong retreat and given events in the EU is fasting leaving Britain. History would not be kind. One deals with uncertainty by dominating it with strategy and capability not by cutting and prevaricating.

 

It is time for a new Defence Covenant and quickly.

Julian Lindley-French

Xi Jinping: China's Gorbachev?

Alphen, Netherlands. 15 November.  Watching Xi Jinping being anointed as General Secretary of the Chinese Communist Party I could not help but recall that old Confucian saying, “Choose a job you love and you will never have to work a day in your life”.  Xi is now head of the 82 million strong Party which will exert “popular sovereignty” over 1.34 billion people or twenty percent of the world’s population.  Xi is a ‘princeling’, the son of a revolutionary blue-blood who struggled successfully with Mao to overthrow Chiang Kai Shek and the nationalists back in 1949.  However, as ever all is not what it seems in China and as pressure grows within China for more pluralism the very anointing (rather than election) of Xi suggests that just over one hundred years since the 1911 abolition of the Chinese empire the Party may be retreating into old imperial habits – red imperial habits.   
 

On the face of it Xi is set fair. China already has the world’s second largest economy worth $11.4 trillion which many believe will eclipse the US $15.3 trillion economy by the end of Xi’s term in 2022.  Unlike his successor Hu Jintao Xi has moved quickly to consolidate power by taking over the leadership of the military as well as the Party.  He has also successfully slimmed down the Politburo’s Standing Committee from nine to seven and in March 2013 he will be elected President of the People’s Republic of China at the annual People’s Party Congress thus aligning his control of the Party with that of the Government.  
 

However, each of the ‘princelings’ on the Standing Committee represent over one hundred million people and Xi is by no means dominant.  This will tend to emphasise three trends within the leadership: a determinedly narrow focus on domestic issues; much expenditure of Xi’s own political capital to enforce Party discipline; and a tendency towards consolidation and conservatism.  And yet such conservatism is unlikely to satisfy a society facing deep inner frictions and fissures and which is changing at a pace unheard of in Chinese history.  Indeed, some senior Party members quasi-openly question whether the Party will survive to its centennial in 1921.
 

China is thus a Chinese recipe for instability and whilst China’s influence in the world will undoubtedly grow during Xi’s tenure, the Party’s influence could well diminish and undermine the stability that Chinese leaders obsess over.  For example, there are over two-hundred and fifty thousand micro-bloggers in China and the state media is fast losing the monopoly over information.  The metaphor for change in the Party stratosphere is an end to the endemic corruption in both the Party and the Government which has done so much to detach both from the Chinese people.  Hu Jintao made particular reference to this in his outgoing speech, even though he did little to combat it in his ten years in power and Xi himself referred to the need to combat “corruption and bribe-taking” in this morning’s speech.  Xi is also known to be considering the introduction of limited pluralism in Chinese civil society by encouraging institutions with little or no government patronage.  To that end, Singapore is being touted as a possible model.  The island-state’s one party rulers permit heavily prescribed opposition parties.  However, scaling the Singapore model up from a population of several millions to one of 1.34 billion underlines the challenges Xi faces and the dangers any reform poses for the Party.
 

The clamour for pluralism did not end with the massacre of the Tiananmen protesters back in 1989. Rather, it was either oppressed or bought off.  The opening of the Chinese economy in the immediate wake of the protests stimulated year-on-year double digit growth in the Chinese economy which laid the foundation for the post 1989 ‘popular sovereignty’ which the Party leadership has skilfully exploited ever since.  The deal was simple; the Party would stay in power so long as living standards rose.  However, the world economy is shaky to say the least and there are no guarantees that China’s export-led growth will continue, unless that is domestic consumption is stimulated. That in turn will lead to an expanding middle class which will also pose dangers for a closed leadership.  It is a leadership that has already been tarnished by the Bo Xilai scandal which went to the very top of the Party.

In his speech this morning Xi spoke of “the great renewal”.  It is renewal that will almost certainly take place on his watch.  If it fails, as well it could, Chinese nationalism lurks in the shadows.  Xi faces a difficult choice; do nothing and be swept aside by change or offer limited political reforms in an attempt to preserve the authority of the Party and like Russia's Gorbachev risk destroying it.

Julian Lindley-French

Britain and France in Flanders Fields

Alphen, Netherlands.  The eleventh hour of the eleventh day of the eleventh month.  As I write this I have just listened to the Last Post and observed two minutes of sombre silence to mark Britain’s war dead.  This year Remembrance Day was particularly poignant as on Friday I attended an excellent conference on the future of European defence in the heart of Vauban’s superb seventeenth century fortress, the Citadelle at Lille.  Europe in many ways started here.  To the immediate north and east of Lille are great battlegrounds of two world wars over which I drove in my two hour, three country freedom journey on a tarmac carpet across a quagmire of sacrifice from my home on the Dutch-Belgian border.

 

Now, I am a self-confessed Francophile who respects both France and its people. For all the British talk of“punching above our weight” it is in fact the French who repeatedly turn a difficult strategic position into effective influence at a reasonable price. And, one should be in no doubt that I believe the Franco-British strategic relationship is critical, not just for Europe but the wider world. The problem is that when the French elite talk (particularly the Left) about Britain they are not only wrong but so often determinedly wrong.  It was the same on Friday.  The specific (and implied) grouse was why can Britain not see that it has no alternative but to sooner or later accept the French view of Europe and the world?  That was not the only loaded question.  So, here is the response that my weapon of mass confusion (my Yorkshire French) failed to convey:

 

1.   How could Britain leave the EU and survive? Britain (GDP $2.3 trillion/€1.81 trillion, population 63.5 million, 2012 defence budget €57.9bn/$73.6bn) will become like Switzerland (GDP $600bn/€472bn, population 6.6 million, 2012 defence budget $4.9bn/€3.8bn).  No disrespect intended to the Swiss, but the facts speak for themselves.   

2.   Why does Poland offer more troops to EU missions than Britain?  It is because Britain is fighting real not paper wars. 

3.   Does Britain not realise France and Germany will replace Britain in EU defence with Poland (GDP €911bn/$1.16 trillion, population 38.4 million/ 2012 defence budget $8.79bn/€6.92bn)?  Again, no disrespect to the Poles but who are they kidding? 

4.   Why do you British keep mentioning the number of soldiers killed in Afghanistan as it suggests a lack of respect for the French fallen?  The French armed forces are impressive and critical partners of the British armed forces, as Libya ably demonstrated.  Moreover, I honour French fallen as much as I honour British.  However, sensitivity on this issue reflects an unwillingness to face an inconvenient truth; no union or alliance can survive the imbalance of risk and sacrifice evident in an Afghanistan that has critically polluted Britain’s trust in its European ‘allies’. 

5.   When the Americans pivot to Asia-Pacific you British will be forced to accept strategic modesty?  Well, no.  Given the stated British ambition to rebuild its armed forces around a maritime strategy the British will become more not less important to an America which will care much more for capable partners than incapable allies.

Sadly, this kind of nonsense is also beloved of the “Little Britain” mafia in London who preach that one of the world’s most potent political and military powers could not survive outside an EU moving in a direction that Britain neither wants nor can be part of.  And here is the irony; after almost a century since the struggles that made my journey possible the issue is still Germany and its power.  Indeed, for all the financial travails one hundred years on ‘Europe’ is still a metaphor for how to accommodate Germany; friend Germany, ally German, partner Germany, but nevertheless powerful Germany.  Thankfully, the most poignant moment this weekend was to witness the British and German ambassadors to Belgium laying wreaths together at Ypres's famous Menin Gate.  

Lille’s Citadelle was built at a time when Louis XIV was at the height of his powers.  However, it reflected the essentially defensive nature of French thinking during yet another war with Britain.  The British of course chose not to attack Louis’s strongest point, but rather his weakest.  In 1704 Marlborough defeated Louis at the Battle of Blenheim in Austria thus guaranteeing the very victory the Citadelle was built to prevent.

The question that no-one at the meeting dare pose was this; can Britain and France have a future strategic relationship above and beyond the EU?  Given the real world (as opposed to the Euro-world) Britain and France must.  However, for that to happen the French élite must abandon its comforting prejudice about l'albion perfide.  Indeed, even if Britain in time leaves an EU that has effectively left Britain, the British will never leave Europe.  Much of my drive was across our fallen in Flanders Fields. 

Britain and France together, forever, in Flanders Fields. 

Julian Lindley-French

Obama's Lessons for Europe

Alphen, Netherlands. 7 November.  James Freeman Clarke once said, “A politician thinks of the next election; a statesman of the next generation”.  President Obama has just been re-elected by the next generation.  Now is his chance to be the statesman he needs to become.  If 2008 was an economic-storm election to lose 2012 could be (could be) the election to win with a US economy predicted to grow at 3% next year with three million jobs being created over the next four years.  What is truly remarkable is that the president held together a coalition of young white suburbanites, women and urban minorities to get re-elected in what is still an instinctively centre-right country.  Certainly, this US election has profound lessons not just for Republicans and conservatives but also for Europeans. 

 

The first lesson for Europeans concerns the growing political gap in western societies between old and young, men and women, whites and minorities.  Women, who make up 54% of the US electorate, voted 55% for Obama.  Albeit a chronic generalisation the message from American women seems to be that at a time of economic crisis they want more government not less.  They also reject the machismo pain is gain logic of fiscal discipline and austerity which may make financial and economic sense over the longer-term, but causes suffering in the short-term.  Those preaching fiscal common sense clearly failed to resonate with many in an America facing a fifteen trillion dollar deficit and soon to peer over the edge of a fiscal cliff which come 1 January, 2013 could cut 4.7 percentage points off the US economy, and see taxes soar and public services savagely cut. 

The second lesson concerns the impact of changing demographics on the vote in all western societies.  In the US the white vote is now down to 72%.  In most European countries it is between 80-85% but given immigration it is heading in a similar direction.  For conservatives it means they can no longer hold onto their 1950s view of society and for all the frictions and failings of fifty years of the liberal experiment it has created a society that whilst fairer is grossly uncompetitive.  As globalisation bites that decadent reality will become ever more apparent.  For progressives immigration might work in the short-term because it shifts the ‘class’ vote in their favour but at the cost of social cohesion that is now a distant memory.  It also reinforces a culture of dependency on government which is economically unsustainable. 

 

There is another third and potentially more dangerous lesson. If (as now seems possible at midnight Washington time) Obama wins the presidency but Romney wins the popular vote what legitimacy the president?  At electoral day’s end the candidate who wins the most votes should be the one who is elected.  There are several countries on both sides of the Atlantic where too often a leader is elected on a minority vote, not least my own country Britain.  Semantic and sophisticated arguments can be made to justify this but over time all that happens is the growing alienation of a large minority who believe the systems works against them.  Alienation is a real threat to European democracy already under threat from centralising EU technocrats and Euro-federalists. 

There are also aspects of this vote that are peculiarly American.  No US president has ever been elected with unemployment over 7% as it is today.  Obama won as much on charisma as policy, which was very hard to discern on either side.  His charisma and celebrity made contact with the lives of millions of ordinary Americans in a way that a billionaire white, wooden opponent too close to irresponsible, greed-stricken extremist capitalism simply did and could not.  Democrats should and will rejoice but they should also remember that Obama is a one-off political phenomenon.  Four years hence it will be back to Washington business as normal…almost.  

Sadly, it is the precisely the mix of extreme capitalism and the politics of entitlement implicit in this election that has led Europe to the edge of the abyss.  America (like Europe) is today a society unable to face the hyper-competitive facts of globalised economic life and one in which capitalism red in tooth and claw is championed.  How and if that contradiction is resolved will define Americans (and Europeans) in the coming age.  There can and must be no return to some form of sweat shop economy but nor can Americans or Europeans defy economic gravity.  Rather, the political class left and right must seek a new balance between competitiveness and compassion, between government and civil society, between liberty, responsibility and entitlement to sustainably pay for the values that Americans and Europeans share and which not only define who we are but what we stand for together in the world.

Julian Lindley-French

Angela and David: Time for an Amicable Divorce

Alphen, Netherlands. 5 November.  Tonight is Guy Fawkes or bonfire night when the good people of England commemorate the burning at the stake of the leader of a 1605 Catholic plot to burn down Parliament, which to many Britons seems merely an idea that was ahead of its time.  This week Chancellor Angela Merkel is due to visit London as part of a German charm offensive to persuade PR-Meister Cameron to support an increase in the EU budget - if there are three things that have brought the EU low it is British ‘vision’, French ‘pragmatism’and German ‘charm’.  What Cameron should be telling Merkel is that Britain will leave the EU unless Germany ends its drive towards further political union.

   

Cameron of course will not do that.  Rather, surrounded by his group-think, europhile officials (one must be europhile to get promoted in London) he will meekly apologise to Merkel for last week’s outbreak of parliamentary democracy and MP’s demand for a real cut in the EU budget. He will instead agree with the German Chancellor to delay any decision on the budget so long as he can keep the deal from the British people...and hope. 

That will be difficult because Britain’s departure from the EU is now nigh on inevitable, not least because the EU seems determined to accelerate Britain’s departure.  Last night it became clear that the EU’s European Investment Bank has loaned the Ford Motor Company some €100bn (some of it British money) to establish a factory in Turkey, a non-EU member, so that Ford can close a factory in Britain, an EU member.  Ford clearly sees no real problem with basing production outside the EU to sell into it.  Indeed, any attempt to impose trade sanctions on a departing Britain would be illegal under World Trade Organisation rules, which is precisely why Ford can use British money via the European Investment Bank to shift production from Southamption to Turkey. 

Germany is the prime architect of Britain’s pending departure from the EU because Berlin is intent on changing the rules of the EU game in its favour.  It is a crisis-driven power game the full extent of which will only become apparent after the September 2013 German federal elections when a newly re-elected Merkel will then and only then the German people the enormous political and financial cost of the Eurozone crisis. 

At that point today’s phoney war will end and Europe will come to dominate British politics in the run-up to the 2015 British general election.  Indeed, battle-lines are already being drawn with Deputy Prime Minister Nick Clegg and his “Little Britain” followers (which by the way includes much of the Labour Party and some in the Conservative Party) who believe one of the world’s leading economic and military powers could not survive outside the EU and the massive bulk of the British people who now believe Britain can and should go.

The facts speak for themselves.  Today the Centre for Economic and Business Reform said Britain will enjoy the strongest growth of any major European economy over the next two years.  The percentage of British trade going to the EU is dropping fast from near fifty percent to around forty percent with the rest of the EU selling some €55bn more of goods and services to Britain than Britain sells to the EU, which suggests the EU needs Britain far more than Britain needs the EU.  Indeed, the huge transfers of British taxpayers’ money the EU demands is little more than a tax on the British people for no demonstrable benefit and even less influence because the link between such transfers and boosting the single market has now been broken.  Instead the cost of regulation that Brussels imposes on Britain has become one of the main breaks on economic recovery.

The irony is that tensions between a globalising Britain and the Eurosphere would have been rising even in the absence of the crisis.  Britain's future will depend far more on growing world economies than a doomed-to-be sclerotic Eurozone. British trade with the emerging markets is growing year-on-year in double-digit figures. It is perhaps no coincidence that Cameron is today visiting the booming Gulf States which suggests the PR-Meister may have an alternative strategy up his sleeve (do not hold your breath).  There are some surprising boom areas in the British economy such as the establishment of English law as the legal framework for global contract law. 

Therefore, if Cameron has any political sense he will politely tell Chancellor Merkel the truth at this week’s meeting; there is no place for Britain in her vision for Europe and no amount of ‘charm’ can change that.  She is a sensible woman and will of course understand the implications and she will also see benefits from an amicable divorce that would separate Britain’s political destiny from resolution of the Eurozone crisis.  If not David Cameron might soon find that he too joins Guy Fawkes atop a political bonfire of his own making.

Julian Lindley-French

Cloud Cleggo Land

London, England. 2 November. As I write this I am sitting in the Senate Chamber of Church House at the Chief of the Royal Air Force’s air power conference organised by the Royal United Services Institute.  Church House is the Supreme Spiritual Headquarters of the Church of England and there can be no better place to discuss the future of the Royal Air Force than the seat of the Lord High Air Power Almighty in London.  The good news is that British Defence Minister Philip Hammond has just given the strongest hint yet at this conference that HMS Prince of Wales, one of two super aircraft-carriers the British are building will be commissioned into the Royal Navy towards the end of the decade.  Rule Britannia!

 

And then there is Europe.  The latest foment over the road in the House of Commons has been triggered by the ‘we don’t do political principle’ Labour opposition who joined with Tory rebels Wednesday to inflict a humiliating defeat on PR-Meister Cameron as he prepares to head off to not-negotiate the European Omission’s five year Multi-Annual Financial Framework or EU budget.  The sceptics want the PR-Meister to negotiate a real-time reduction in the Omission’s budget.  Fat chance!

Last night at Chatham House Lib-Dem leader and David Cameron’s Coalition partner-in-crime Nick Clegg said that there was not the slightest hope in hell (or is that Brussels) of Britain securing an aforesaid reduction not least because a strong majority of EU member-states now have access to British money with Labour having in effect negotiated away any say over the matter.   Rather Nick wants Britain to confront changes in the EU “head on”, which in Nick-speak means join the Euro. He is after all the Omission’s point-man in London.

 

Now, I like Nick Clegg.  He is a fellow Sheffielder and given that we are an endangered species we really should stick together.  And, technically he is right but that is not the point.  What Nick fails to point out is that the changes taking place in the EU will inevitably lead to the runtification of the European nation-state and thus represent a clear and present danger to the British state.  Do you really think Scotland would be considering independence if not for the political backdrop of the EU?

Rather, Nick’s false ‘reality check’ reflects the lack of any sensible debate in this town about what next in Europe.  The choice Nick offers is either complete political immersion in Project Europe or a form of political Dunkirk, a false choice wrapped in a European flag.  In fact what is needed is a sensible chat about Britain and a very changed Europe.  There are huge questions of political philosophy implicit in the changes taking place in the EU, particularly as it affects the relationship between the state and the individual.  It may well be that in time the UK leaves the EU, although we are not there yet.  Therefore, London desperately needs grown-up people to talk in a grown-up way about one of the most important choices Britain will soon have to make.

 

This RUSI conference could point the way forward.  What has struck me about the British defence leadership is that they are slowly muddling towards something like a real defence strategy, although given the lack money and personnel committed it still too often smacks of hollow strategy. That said the emphasis on strategic partnerships with allies and partners both within institutions such as the EU and NATO and beyond is to be welcomed.  Britain foresees a series of powerful partnerships with emerging states and traditional allies befitting the world’s 5^th or 6^th real economy and 3^rd or 4^th defence actor. 

Whatever happens to Britain’s EU membership it is vital that the strategic state-to-state relationship with France is preserved and new relationships built with Germany and Italy.  However, that will require Europe’s power states to look at their respective relationships with London in a new light.  Equally, Britain must be freed to exploit deeper its strategic relationship with the United States and others, just like Germany is doing with China in pursuit of the German interest.  These relationships will be built on traditional forms of statecraft for which and to which Britain’s powerful defence strategic brand will be critical.

 

This will be the decade of choices for Britain and Nick’s implicit status quo at any cost is not an option.  It is not those who question Britain’s continued EU membership who are in cloud cuckoo land, even if sometimes they sound like a stuck record.  

Rather it is you Nick who is stuck in cloud Cleggo land with your misplaced “resistance is futile” nonsense.  At the very least give the rest of us a vision of how Britain could in future stay in the EU and outside the Euro.  We have yet to hear it.

 

Julian Lindley-French

2014: NATO Year Zero

Bologna, Italy. 29 October.  I love Italy.  As I write this I am gazing down from on high over-looking the Po Valley that separates Bologna from Milan re-thinking NATO.  That in any case was the title of the conference I have just attended (high level of course); Dynamic Change: Re-thinking NATO.  Still, as I wrapped up the conference in my now accustomed role as a strategic hooligan it struck me that if NATO’s members could just summon up even a modicum of strategic honesty NATO has an opportunity to remodel itself that it has never had before nor will likely ever have again.  Indeed, 2014 when NATO leaves Afghanistan (and it will), will be as close to a defence planning Year Zero as it is possible to get.  

The problem is that NATO members today range from the “I’m small get me out of here” type of country through the “I used to be important and I ought to be listened to” country up to (of course) the one “my way or the highway” country.  Apart from the latter they all suffer from a crippling disease called strategic pretence with “national strategies” for NOT doing things, also called “dynamic” and which talk about “change” a lot.  The result is NATO’s Defence Planning Process by which NATO’s Europeans – the pygmy powers - pretend to the “my way or the highway” country that they are fully committed to what the latter calls “transformation” and the "my way or the highway" country pretends to believe them.   

Naturally, the “my way or the highway” country has a 'plan' (they have a lot of those).  In the plan the pygmy powers and their bonzai militaries will join together to render unto someonw they call Uncle Same a NATO Europe cast in his image, albeit a midget version.  This may or may not include the Canadians as no-one can decipher anything Ottawa ever says these days as it is so politically-correct.  Does anyone speak Canadian around here?  Now, another reason the “my way or the highway” country pretends to believe the pygmies is because their defence-industrial “champions”, otherwise known as gangsters, have erected a big neon sign over Europe that flashes “suckers”.  

Today NATO Defence Planning is one of the greatest works of European fiction since Dante’s Inferno: the Four Choices before the Apocalypse.  Indeed, if the European Onion can be awarded the Nobel Prize for Not Yet Being in Pieces then surely NATO Defence Planning should be up for the Nobel Prize for Literature.

To finesse this lack of mutual comprehension away NATO talks a lot about “language”.  Indeed, anyone who has worked for NATO knows the importance of “language” which in human-speak means the use of long words in by and large indecipherable documents to present full-scale and rapid decline as efficiency and effectiveness.

The thing is that the pygmies, even the smaller pygmies, are slowly waking up to life beyond December 2014.  It is going to be a big, bad and for the first time in four hundred years not waking up every morning being impressed by Europeans world (I exaggerate that bit for effect).  In such a world defence transformation will really matter and in defence planning terms 2014 is yesterday.  Unfortunately, the gap between what Europeans need to do to defend their vital interests and what they can do is now so wide that only a true work of grand fiction can mask it.  Most small bands of bedraggled European brothers (and sisters) that these days pass for armies could now fit inside an old London double decker bus, if we could afford it that is. Strategic logic would suggest much deeper military synergy for some even defence integration.  The problem is the lack of trust after eleven years of Afghanistan.

 

For those reasons all the future planning I have seen is old wine in new bottles.  It is of course sprinkled with the current buzzwords of military-speak and much emphasis is now being placed on two blokes in the Special Forces who apparently in future will be able to achieve the same as an entire army today.  In the real world Europe’s pygmy governments are broke, want to cut armed forces further and have no intention of doing very much for their defence.  Their respective navies, air forces and armies are also far more interested in fighting each other than defending me, which in military-speak is called – jointness.

My own “I used to be important but ought to be listened to” country is a case in point.  Soon to become two “I’m small get me out of here” countries, and having spent the last eleven years fighting wars with “please after you” allies, it too has decided to become a “please, after you” ally as it seems a lot more effective to get others to fight your wars for you than do it yourself.  It is a sad delusion not least because the “my way or the highway” country will soon conclude NATO no way. 

Carpe diem as they say in these here parts (or at least used to).  NATO is not a Terry Pratchett novel and we Europeans do not live in a Disc-World atop a giant turtle - it just seems like that.

2014: NATO Year Zero

Julian Lindley-French