Looking into the new direction

As we get ready to go into June, we must be as ambitious as possible. It is not just a question of optimism. It is not a matter of rhetoric. It is about building a better world. The pandemic has shown the key social and economic challenges we all face. It has revealed the competition and all the prejudices that exist between nations after we have spent seven decades talking about international cooperation. The option is not to keep going in that direction. The decision must be clear: to agree on the set of values that count for all of us and build the foundations of a new type of relations that are geared to promote solidarity, complementary and harmony.

The EU must be more creative in matters of crisis response

Josep Borrel, the EU High Representative for Foreign Policy, addressed the UN Security Council yesterday. It was a long speech about several crisis situations. But the true message was about multilateralism. He stated the strong support the EU is providing to the UN and repeated the message that global problems do call for multilateral action. That was positive. But he was speaking to a very divided and weak Security Council. His words were certainly the right ones, but I can safely guess that their impact was negligible. The climate in the Council is not favourable to global or multinational responses. In addition, his description of the crisis was not creative. For instance, he spoke about the Sahel but added no new idea to what is already known. His concern was to show that the situation in the region is deteriorating – an important message – and that the EU and the UN are cooperating throughout the Sahel. But there was no indication of a line of action that should be followed to stop the fall.

The EU must be more realist in terms of crisis resolution. It should recognise that the current approaches are not yielding results. And it must come up with alternative paths. That would be a much stronger message and a way of giving strength to the EU’s role in matters of peace and security.

A new model of politics

The huge amount of resources that the European Union member States will have available for recovery is a golden opportunity to change what needs to be changed. That means, as I see it, to invest on health and social matters, on an economy that is friendlier to the environment, on the digital dimensions and on greater inclusion of those who have less income and insecure jobs. The funding of new projects should be guided by these concerns. This is a turning point and we cannot miss it. I am confident the Commission will provide the necessary guidance and will try to make sure the governments do respect the paradigm change. The real challenge is to prevent these monies are used to enrich the supporters of those in power. That will be the old tendency. But we are in a new era. The European Commission must ensure that the citizens in each State have enough power to stop the old clientelism and the ways of doing things that make some richer and the vast majority more vulnerable.

A stronger European Union

The European Recovery Fund, proposed by the President of the European Commission, was favourably received in the various capitals of the Member States. The Italians and the Spaniards were happy, on one side, and the Scandinavians as well, notwithstanding earlier positions regarding the need for conditionalities.

It is, in fact, a balanced plan, which reserves a good part of the resources for grant-type financing. And it adds an incredible amount of money to other resources already announced, either by the Commission or by the European Central Bank. Ursula von der Leyen demonstrated opportunity and vision. Her standing as head of the Commission comes out strengthened. Of course, behind all this, we can guess there is the support of Angela Merkel and Wolfgang Schäuble, who is now President of the German Federal Parliament and who continues to have a lot of power, on the domestic scene of his country. In the end, these things happen if the Germans are on board. They do not express it too loudly, but their voice is the determinant one in matters of common economic policies, agriculture excepted.

Opinion texts must be short and direct

I said before that brevity is a sign of intelligence. And I am still convinced that is the case. The problem is that I have a few friends who are highly intelligent but think that a long text, with many words and shooting in several directions, is what is expected from an intellectual. How can I change their minds? I try to tell them that there is very little patience for meandering texts of opinion. But they don’t believe me. And they keep copying and pasting their ideas every time they produce a new piece.

Africa Day 2020

Africa Day 2020 was ignored in Europe. The pandemic pushes everything else out of the screen. In past years, today’s celebration would be part of the news in various countries of Western Europe. Now, we are so focused on our surroundings that I get the impression we have forgotten that the world is bigger than our small neighbourhood.

Well, let me congratulate my friends in Africa and wish them a better governed and more united Continent.

China, Europe and the others

This is the wrong time to behave like a bully in the international arena. The Chinese Foreign Minister, Wang Yi, seems to know it. He appealed for a better relationship between his country and the US, now that we are at the door of a new Cold War, to paraphrase what he said. The words that call for cooperation instead of competition are the right words. He for sure is aware of that. And I am sure he is also mindful that for the time being the relationship with the US will not improve. Actually, it is possible to forecast deterioration. That is certainly not good. But he and his fellow leaders in Beijing have a chance to show that they mean business. They can establish a better relationship with the European Union. The Europeans are ready for that if it is a more balanced and equal one. Let us see if the Chinese are also willing. That could have an incredibly positive influence on the trade, global affairs, and the image of China in the world. There are negotiations going on between Brussels and Beijing. They should be concluded by September and send the right signal.

My friend gets special treatment

It is a serious mistake to follow double standards when you are leading a country. You cannot be exacting for some and permissive for others, particularly when it is a political friend that is overstepping the red line. That fundamentally undermines the leader’s credibility. Once lost, it is not easy to recuperate.

New disparities in a changing world

People were queuing this afternoon to get into the most expensive shops in a well-to-do area of Brussels. The other shops, normally patronised by the medium-income people had almost no customer. And then, there was this incredibly sad sight of closed restaurants and bars and a big hotel, a huge tower, completely empty. For me, it was a vivid example of how the crisis is seriously affecting some segments of society whilst others are just returning to their old habits, as if the past were back. But it is not.

The realism and the utopia

Today I came back to a statement that I used to make when discussing with overly ambitious but unrealistic people. I would tell them that during my walks in the bush, and I did many in distinct types of bushes, I could see that the baboons would go for the lizards. At a different level, the wild dogs would do the run, with extreme efficiency, to catch the impala. And the lions would focus on the kudus, a much bigger animal than the poor lizard or the gracious impala. No baboon would make any effort to do the impossible and try to catch a kudu.

The ladies are in charge

Harvard professor Carmen Reinhart has just been appointed as the new Chief Economist at the World Bank. The Chief Economist at the IMF, Gita Gopinath, has also come from Harvard University. Both ladies have collaborated with Professor Ken Rogoff, from the same university. They might all think alike which is not the best approach in times of crisis. Diversity and contradictory opinions are much more creative, at a time when we have to imagine a new economic order. But they are all for debt forgiveness when the challenge is too big to be managed, which is not a bad approach. And they have studied financial crashes and deep national crisis extensively.

People say that when two economists discuss there are at least three divergent opinions. In this case, let us see if both ladies can bring fresh ideas to their institutions. The IMF and the WB will be very much in demand in many countries in the post-Covid situation. They must propose an approach that goes beyond austerity and keeps investments flowing across the globe, particularly in the direction of poorer countries.

Combating the xenophobia

The crisis created by the pandemic and the way countries have responded to it, particularly by closing the borders and banning international travel, are fertile soil for the xenophobic sentiments to grow. One of our challenges is to fight that. We cannot allow the narrow-minded and xenophobic ideas to win the day. The world would be a terrible place if we let prejudice and chauvinism to take control.

The European recovery

Today, Chancellor Angela Merkel and President Emmanuel Macron stated they will advocate for the establishment of a €500 billion recovery fund. In their view, the money should be raised in the international capital markets by the European Commission, as a common pot aimed at helping the Member States seriously affected by the Covid-19 pandemic. The disbursements would be approved by the Commission, following the criteria that are yet to be established. It would also be the Commission that would have the responsibility to pay the markets back, meaning, the principal and the interests or dividends.

I am not sure this will work. Austria’s leader, Sebastian Kurz, has already voiced strong objections to such an idea. He does not want to see a recovery mechanism that is dispensing grants to the States. He is for loans. Loans make the leaders a bit wiser than just getting free money, he seems to believe. We can expect that other voices will join his own.

In view of this, my position is that most of the money should be channelled to fund joint multinational projects that would reinforce the European system and would have an impact on the EU’s strategic self-sufficiency in matters of public health, bioresearch and other critical emergency response mechanisms. The pandemic has taught us that the health sector is vital, not only for medical reasons but also because of its impact on the functioning of the economy. We cannot no longer talk about strategy without including the strengthening of our common capacity to deal with epidemics, critical hospital equipment needs and essential medicines. Money should also be spent on common logistics and rapid deployment networks.

It is also clear that the recovery fund must be operational soonest. There is urgency. We are not yet at the end of the crisis. The intensity of the pandemic can have a new surge at any moment. We must be better prepared this time. In addition, the economy of the most affected countries needs resources that would encourage new investments, in greener areas, and in matters that address the issues of income and social security. The priority should go for those projects that are fundamental for a stronger Europe and that are not too much dependent on resources and means of transportation we do not control.

This is a time to think differently. The fund, if it is thoughtfully planned and wisely administered, can become a tool for transformation and progress. The alternative is for it to become a reason for further divisions within the European space. Nobody wants that to happen.

Times of change

We all agree the economic recovery is pressing. Truly, we are confronted with extreme urgency. There are too many people without income, or with a reduced one, too many companies close to insolvency, plenty of sectors working below capacity. The economy is seriously disrupted, in many countries, including in the EU states. Speed is, therefore, the key concern, in the minds of the politicians as well as in the private sector.

Then, a number of intellectuals have come forward and said this post-pandemic time is the big opportunity to change direction and make the economy greener and people-friendly. I agree with their proposals. They are not all of them entirely realistic, but they are well-meaning and the right type of utopia we need to make this world a better place. It would be a mistake not to give attention to them.

There will be some changes, for sure. More people will be working from home, there might be less commuting, and we will witness a lot of pressure from the politicians for the entrepreneurs to bring home some of the investments made far away. There will be a new impetus to move on to a greater share of renewable sources of energy.

But the urgency might upset some of these proposals. Jobs, investments, and revenue generation will be the key criteria for decision-making. And they might not coincide with the new economy we would like to see. But there will be progress in that direction. People are coming out of this crisis with a different approach to life and their own priorities. That is why I think it is important to keep insisting on progressive modifications to the way we produce and trade goods, and a new approach to the worth of some services the pandemic has shown to be of essential importance to our daily lives. 

  

There will be a process of change. Not as much as we would like, but we should not give up. This is an appropriate time to talk about a more balanced world.

The trend is negative and must be stopped

Their power resides on the capacity to build collective fear. In different parts of the world, some governments are taking advantage of the pandemic to create extreme anxiety among their people. Then, they make sure, through all kinds of media platforms, that they are perceived as very decisive, able to take tough decisions to save as many lives as possible. Some of those measures go far beyond the necessary, from a public health perspective. They basically have a political purpose, to strengthen those in power. In addition, such radical measures allow the governments to hide the weakness of their national health systems, their extremely poor capacity to respond to emergencies. The truth is that many governments are just inept and cannot find the balance between an adequate health response and the mitigation of poverty. That incompetence and the political dividends they expect to draw from tough decisions are just ruining their countries. We are going back to a world that will combine despotism, increased inequality, and desperation. Can we accept that trend? The answer must be clear and strong.

Power and dominance

In responding to a friend that lives in China, I said I am also genuinely concerned regarding the growing tension between his country and the US. We do not believe there will be, in the foreseeable future, an armed confrontation between these two powers. We both know that today's wars are fought in diverse ways, but no longer through the classical approach of bullets and boots on the battlefields. Big countries make use of other means to disrupt and weaken the adversaries. The armies are for smaller fights and to show off. We live in a more civilian world, and we fight with a variety of tools that are available in a multidimensional toolbox. Such means can be very destructive as well, with a wide impact on a number of the things, including on the livelihoods of many people.

And this time the conflict is not about ideology, like during the Cold War, but about what each side sees as its vital national interest. In addition, history has taught us that the dominant power perceives the emerging power as a major menace. That is the trigger. And all this makes the confrontation move way up to a more dangerous level, more multifaceted and certainly far more complex to mediate. Moreover, it brings in other countries that have no choice but end up by being forced to take sides. They will also be dramatically affected by the dispute.

In such a dangerous context, my view is that we should keep talking about international norms and cooperation, as well as about clairvoyant leadership. In all truth, the leadership thing is the key issue. It can bring us back to a more reasonable world or take us to the abyss.

A very unequal new world

One of the most damaging consequences of the pandemic will be the augmentation of social inequalities. Some people will not be particularly impacted by the economic crisis that results from the measures taken to combat the Covid-19. They will experience no real change in their lifestyles. But the others, many of them, will see their income disappear or be dramatically reduced. They will be the new poor, finding themselves in desperate conditions. Their numbers will reach new heights, causing a totally distorted social reality and extreme instability. Such a situation will be explosive. The new poor are not used to navigate the poverty waters. They will feel left behind. We should expect if nothing is done to mitigate the misery, a very serious political challenge.

Five fundamental questions

As I see it, there are five big questions on our European table. One, how to strike the balance between public health and the health of the economy? Two, what role should each State play and what are the limits the governments should not overstep? Three, what kind of societal changes should be promoted for a better type of human society in the post-Covid era? Four, what about the implications of this extraordinary crisis on the future of the European Union? And five, what will be the new shape of globalisation?

These are the key lines of reflection as we look ahead. The debate about each one of them is open. It is a complex one but must be conducted. The depth of the current crisis calls for a complete review of the way we have been doing business. Those who think that we just have to press the recovery button, and everything will be back to what we had in January are wrong. We are not going back.

Let the airlines take a chance

A brief note about civil aviation and everything related, including plane makers and service providers. This is a sector that is deeply impacted by the coronavirus crisis. It will be one where major losses will occur. Every airline is losing massive amounts of money daily. And no one can predict when the skies will open again. The longer the wait the greater the risk of insolvency, of extensive disruption. And governments cannot save the entire sector. Any public money invested in aviation economics will be based on a reduced presence in the skies, on fewer planes and fewer jobs. It will be very tough. They will be competing against so many other demands on limited public resources. But let me be clear: it is critical to resume a handful of flights. It might be less expensive than keeping the planes on the ground. And it will help everyone to see where the priorities must be. The airlines will make their choices. In this case, the first role of governments should be to facilitate air travel, to lift the restrictions that make no real sense from a public health point of view.

Three challenges

Besides the public health challenge and the balanced approach to the opening of economic life, the third big issue we are confronted with is about democracy and freedom. Our governments are imposing too many limitations and controls on matters that have to do with our liberties and personal choices. We can accept such decisions for a while and with full justification. But they must be temporary. No way we can have a state of exception for extended periods of time. Pandemics are not treated with limitations of liberties and the deployment of police forces. That was the practise in the middle ages. They are treated with masks, disinfection, hygiene, distancing, and medical surveillance and advice. We must understand that governments love to control people. It is in their genes, even in our multiparty societies. And if they can, they will keep some form of control for an awfully long time. That could be the beginning of a regime change that we certainly do not want. In the end, we do not want to copy the Chinese government when it comes to human rights issues.

CNN is only about US disasters

I have stopped watching CNN International for a while. The news is every day and every hour about President Trump and the virus. Tiring. These are two very disturbing subjects. Dangerous. An overdose of any of them can make you extremely sick. The combination of both is explosive. I feel sorry for my American friends that have to go through such a sorry moment. Nobody would expect the US to be confronted with such a complex situation.

Without borders

My point is that the borders should re-open shortly. First, the borders between European states, the Schengen area. To keep them closed for longer has a tremendous impact on the economy of the countries concerned and feeds the prejudiced views that the nationalist extremists try to propagate. Europe is about freedom of movement and accepting the others as fellow Europeans. To erect borders and obstacles between the countries undermines that critical dimension of the European Union. It sends an extremely negative message about the other. It makes us go back to the old suspicions and narrow views.

Second, it is necessary to resume international travel, well beyond the European space. Most of the progress that has been achieved during the last decades is linked to international contacts, to a global view of trade and tourism. Our world, the world we built during the last decades is based on mobility.

We have, of course, to ensure the safety of those who will be travelling as well as protect the health of those providing the services to this economic sector. That is possible. It does not require we keep each nation behind thick walls.

Plenty of hope

During the on-going crisis, a major one, lots of people have shown the better side of themselves. It has happened in various walks of life, from the health professionals and personnel to the common citizen, that has accepted the confinement with patience and discipline. That is very encouraging. They are certainly ready for a more reasonable approach to the future.

The judges and the economic crisis

The judgement issued by Germany’s Constitutional Court regarding the European Central Bank’s bond purchasing programme must be taken very seriously. It challenges the autonomy of the Bank, it gets the judges into monetary and fiscal matters, where the Court is not necessarily in familiar territory, and, above all undermines the authority and the mandate of the European Court of Justice. In the end, the judgement imperils the European Union itself.

But it came as no surprise. Many in Germany and elsewhere are still looking at some other European countries through the lenses of historical prejudice.

In any case, it must be responded to in a manner that is as comprehensive as possible. The ECB will take its part. It should be able to produce the justification the Constitutional Court requires. And key European politicians must state in clear terms the ultimate authority of the European Court of Justice. More concretely, Angela Merkel should come up with a statement that would underline the exceptionality of the current crisis and the need to go beyond the conventional approaches. It should add a word of respect for the Constitutional Court, of course, and, at the same time, remind everyone that the ECB’s plans and decisions are fundamental to overcome the calamity we are in.

Notes about China and Europe

In the last few days, I have re-tweeted some articles on China, must of them without a personal note about their content. Just sharing. I did it because I think we need to have, in this part of the world where I live, a serious debate about the future of our relations with China.

Looking ahead, my starting points are two. First, the growing hostility between the US and China is dangerous for both countries and for the rest of us. I have written about that and I will keep repeating it. I see such antagonism spreading in the US, both among Republicans and Democrats. And it has now reached some other circles in the West, from Australia to Europe. The second point is that the European Union must engage positively with China, meaning, in a balanced and frank way, defining clearly what we expect from this relationship and what are the limits we cannot cross. The Chinese would be expected to do the same. Such dialogue would be based on the understanding that both sides would gain from a close and fair relationship.

I do not want to spend time commenting on the internal politics of China. However, I should be clear about such an important matter. My approach is that there are values we all must follow. The list would include freedom of speech, human rights, and acceptance of political diversity. A leading country must be a sharp example of full respect for such values. In our dialogue with China, as well as in our policy discussions with the US, Russia, and others that play paramount roles in the world, we cannot ignore such values. The younger generations expect us to act based on fundamental principles, that are common to all peoples.

Having said that, I do recognise the great achievements the Chinese can legitimately claim and the potential they have for further innovation and the betterment of their society. I also know some of the contributions they made to the growth of other nations. All that is incredibly positive. I am also aware of China’s increased contributions to peace, security, and development in various parts of the world.

There is -- and there will be in the times ahead of us -- a good number of Western politicians that will try to gain popular support by systematically attacking the Beijing leadership. Please do not count me in that group.

The forthcoming confrontation

Tomorrow’s world should be better than yesterday. We should be able to learn a few lessons from the major crisis the world is in at present and organise ourselves in a more reasonable and humane way, as we overcome the pandemic. We should become better at international cooperation, at joint research and more responsive to the environment and poverty challenges. That might not happen, some might even say it is an impossible dream, but we must keep repeating it. The message cannot be silenced. In the meantime, we can expect major changes in international relations. The main fight will be between China and the US. As I see it, and as I fear it, we are getting to a point of no return, meaning, they both must battle the other side to be able to survive as superpowers. They both have the vocation to be competing superpowers, with two vastly different visions of the world politics. As such, they are heading towards an open confrontation. That is an extremely dangerous new development. It must be stopped. And that can only be done if we have a strong European Union, that can bring a new equilibrium to the international scene.

Hoping we will be sage and visionary

I can only hope that May will be a good transition month. I believe it can be if everyone in leadership positions understands that consultations and coordination between nations that have a similar destiny are crucial. Within the European Union, we need a renewed momentum, a stronger role coming from Brussels, and more discussions between key national leaders. There is no recovery if it is not done jointly.

Kim Jong-un keeps smiling

Today’s news is that Kim Jong-un is back. There has been a lot of speculation about his health. Now, thanks to the photos made available by the Korean Central News Agency, we know he is alive and smiling. He is also a bit fatter. That might be the result of some good time at his holiday villa, by the Sea of Japan. His sister, Kim Yo-jong, who is a powerful figure in the political landscape of mysterious North Korea, could tell him he should do some dieting. She appears in one of the pictures just next to him. That shows her importance and influence, I would dare to say.

In any case, Kim Yo-jong, who is a young person – age 32 years –, is now being studied and followed by several special people in the West. She might have a future in tomorrow’s North Korea. The country remains a family business.

May Day 2020

It is International Workers' Day. That is an important date for many in Europe and in other regions of the world. We celebrate the working people’s rights. And I add to that my deep appreciation for those who keep struggling to survive. Particularly currently when most of the economic system is upside down. At the same time, as I look ahead, I see continued disruption and new levels of hardship. And I do not see the collective political will that a situation like the present one would require. Each leader is hiding behind national border walls. That is the wrong approach. We need regional and international joint efforts. As we need to promote cooperation between the big economies, including the US and China. Harsh words, bellicose statements, at this stage, do take us in the wrong direction. Leaders that follow that path will be severely assessed by future generations.