Dark clouds in the horizon

The eurozone banks are borrowing heavily from the European Central Bank. Current borrowing amounts to €1,31 trillion. They take the money at negative interest rates, which means that they are paid to borrow. The negative rates are now around minus 1 per cent. By doing so, the ECB is telling us that the funding needs are enormous and that the crisis resulting from the pandemic is very deep.

The picture shows me three more things.

One, that we have too many private banks in the eurozone. Some countries, with small economies, have an incredible number of banking players. Tiny banks are particularly vulnerable to shocks. They represent an additional financial risk at a time of many hazards.

Two, most of the borrowing has been applied by the banks in the purchase of government bonds. That means the ECB is using the commercial houses – and paying them a fee – to finance exceptional and current government expenditures. Public debt is growing fast and in a non-productive way. Its growth goes hand in hand with the tremendous levels of debt of the enterprises and of the poorer segments of the population. Overall debt, in some countries of the zone, is reaching unsustainable levels.

Then, my third point. Conservatives and extreme right parties and movements in richer eurozone States are getting ready to challenge the policy options of the ECB, particularly their easy money funding programmes. These challenges will combine political activism with legal proceedings. As an example, the ultra-nationalist and extremist German party Alternative for Germany has announced today they will move a legal action against the ECB’s emergency programme. It would be a mistake to underestimate this decision. That goes along the recent ruling of the country’s Constitutional Court on a comparable matter. And it must be seen in conjunction with the position that The Netherlands, Finland, and a few others have taken, asking for conditionalities to be added to the Von der Leyen rescue plan.

As I see it, all this contains the seeds for further divisions in Europe. This time, the division might mean severe rupture. It is the future of the Union that is at stake.

Fighting for a changed approach to security in conflict zones

Following what I wrote yesterday about the national armies in some of the Sahelian countries – that their low operational capacity is one of the key problems, on top of their human rights shortcomings and other serious governance issues – I was reminded by a friend of the example of Somalia. The international community, including European resources, have been engaged in the country for a long time with little results. Billions have been spent and many lives lost. However, the terrorists are all over, including in the capital city. And the national army, that we all have trained and keep repeating is essential to solve the insecurity threats, has a fighting capacity that is estimated at 8%. That means that almost everyone in the army is not prepared to fight an asymmetric war and cannot collect the intelligence needed to crush the terrorist cells. Or, there are two fundamental dimensions of any stabilisation project. They are not enough but if they do not happen nothing else can be achieved.

That’s why I keep repeating that we must look at these matters with frankness and be clear about what is going on and what needs to change. If we fail to do it, if we keep pretending and talk niceties, we will keep investing in the sand of those vast deserts. We will be wasting resources and lives. And we will be undermining the credibility of the international institutions and other players that are operating in such contexts. Can’t we find the courage to shift our approach?

The Europeans and the Sahel: a fake dialogue

A ministerial meeting of the International Coalition for the Sahel was held on Friday, 12 June 2020 and co-chaired by Mauritania, the EU and France.

The Sahel is going through enormous challenges. Therefore, an initiative like this conference can only be considered as positive. The problem is, however, that the emphasis was basically placed on the security dimensions, without a proper discussion about the human rights issues and the poor governance that prevails in much of the region. The armed forces of the G5 Sahelian countries – Burkina Faso, Chad, Mali, Mauritania, and Niger – are weak, except for the Chadian ones, and have a questionable record in terms of human rights. The weaknesses are ignored by the European partners and the human rights dimensions are always absent from the debate. Besides that, there has been a proliferation of militia groups, particularly in Burkina Faso. They are supported by the national governments and the experience has shown that they have become part of the problem

The Europeans, led by the French, are not fully sincere when discussing the Sahel situation. Their dialogue with the Sahelian leaders is not frank. It is too formal, full of niceties. It does not touch the root causes of the ongoing conflicts. And without frankness, there is no way the fast deteriorating situation can be addressed. It will continue to worsen.

Libya, Turkey and us

After Syria, Libya has become the new confrontation ground between Russia and Turkey. In both cases, confrontation means bullets, military deployments, and death. In Libya, Russia supports the Benghazi-based Field Marshal Khalifa Haftar and his forces, whilst Turkey has come into the country to fight side by side with the Tripoli-based Unitary provisional government, led by Fayez al-Sarraj. For the time being, the Turkish side of the conflict has gained more ground than the men Moscow has bet on.

 All this has a strategic impact on Europe and should be seen with great concern. Any decision and any critical move by these two countries might become a serious threat to Europe’s stability and security. Vladimir Putin and Recep Erdogan are no friends of Europe. I say so, and at the same time, I do not forget that the latter is the leader of a country that is a member of the NATO Alliance. Erdogan is the peril within.

First, the confrontation between both can bring Europe into a clash with Russia if Turkey invokes its membership of NATO and calls for assistance. However, I am not particularly worried by such possibility as I expect the key leaders of the Alliance to find a way of saying no to a Turkish request for assistance against Russia. Therefore, this prospect is rather remote.

The real problem is that President Erdogan is now in control of the two main migratory routes that bring illegal immigrants into the European Union. The Eastern one runs through his own country and he knows how to make use of it to put pressure on the European politicians. And now, being heavily present in Tripoli and the surrounded areas, his men and their Libyan allies are in command of the Central Mediterranean migratory lane. That gives President Erdogan enormous leverage when dealing with European countries. Mass migration remains a major issue that can seriously undermine the unity and the continuation of the EU. The Turkish President knows it and will keep playing that destabilising card to his own advantage.

Here, like in other areas, the EU foreign policy is being outsmarted by our adversaries.

Our dictators and our democracies

In any democratic society, as we understand them in our part of the world, to rule by decree or by Presidential Orders can only be accepted in exceptional circumstances. Besides that, it becomes a worrisome practice, that might easily lead to abuse of power and end up as an autocratic way of governing.

The separation of powers is still the best approach to democracy. But we should not forget that it requires an independent, impartial judiciary as well as a legislative chamber that is more than a rubber-stamping body.

Unfortunately, we are seeing the opposite in some of the most powerful Western countries. We stare at Presidents that ignore the institutions and the representative system and govern as if to be in charge means to be campaigning all the time. And we know of Parliaments that act only along partisan lines, with no will to be more than an excellent job opportunity that must be kept by being faithful to the party bosses. Not to mention the judges that are either relics of the past or just too concerned with the public opinion.

There is indeed a crisis of democracy in our countries. And I am not going beyond our corner of the world. In other corners, the situation can be even more dramatic.

Against those who divide us

The true leader brings people together. His/her main strength is the ability to create large coalitions by emphasising what is shared by many and proposing a way forward that appears as rewarding to most of the people. The politics of division and confrontation are the weapons of those who lack ideas and ideals. Politicians of that calibre end up by bringing disaster upon themselves and on those who believe in them. Therefore, it is our duty to combat them and make sure that they are out at the end of the next electoral day.

New era, new questions

Have the big questions changed because of Covid-19? What are the essential questions we all face today? Is there a new ranking in terms of global priorities? Do we see global threats differently? Can we keep trying to respond to shared problems through nation-based measures? Are we asking ourselves the right questions?

A plane trip in the new normal

Yesterday, I took the plane for the first time in this post-Covid era. I had a compelling reason to travel.

It was a three-hour trip out of Frankfurt. And I got a couple of surprises. First, the aircraft was full. Like in the old days. It is true that everyone was wearing a mask, but every seat was taken. And this is still a time of restrictions on travelling abroad, even within the Schengen area. Second, there were all types of passengers, from young families with small kids to older couples, and everyone in between. I would have loved to ask my fellow passengers what the reason for travel was, but I had no authority to do it. I know that the airline had asked them a similar question, in very vague terms and without requiring any supporting document. Third, there was no health or temperature checking before embarkation. Just a request to keep a safe distance before passing through the boarding pass control, a request that was in contradiction with the crowding on board.

Upon arrival at the destination, there was a temperature check. And that was it. We all left the airport to go and take care of our own business.

My conclusion was that it is better to re-open the air travel soon. And, at least, check the temperature of the would-be passengers before boarding. If there are more options to travel, more flights available, there might be less crowding on each plane. This should go hand in hand with the lifting of restrictions on cross border road and train trips.

At the same time, it is important to keep repeating the recommendation for people to think twice before travelling. Many will follow such advice, I am sure.

A busy summer ahead of us

People in Europe are rapidly moving past the pandemic and looking forward to a normal summer. There are still a number of restrictions in place, in most of the countries, but everyone seems convinced that by the end of the month they will be lifted. Optimism is a good thing, particularly after a difficult and long period of deep constraints, not to mention death, sorrow and anxiety. It might be somehow unjustified, but as I think of it, I get convinced we need a good dose of hopefulness. It helps us to move forward.

Beyond the health dimensions, it is true that for a good number of people the prolonged crisis has meant a serious loss of income. For others, it dramatically means either unemployment or job insecurity. It also threatens the survival of many companies, with a serious impact on national wealth and public revenue, well beyond the employment dimensions. We must be aware of all this and promote the right social and economic policies that we believe are most appropriate to respond to the many forthcoming challenges. And as we write or speak about these things, we must find a way of mixing realism with optimism.

The decision the European Central Bank has just announced, adding another 600 billion euros to the pandemic-related bond purchasing mechanism, is at the same time very encouraging and a clear indication of the crisis we are in. Money in substantial amounts is critically important. But we must be very judicious about the priorities and wise, in terms of change. The money must be an instrument of recovery, I agree, but also, a powerful tool to promote change.

One of key priorities must be the reestablishment of the education system. I have seen how the primary and secondary school pupils are being affected by the closure of the schools. Their current virtual studies are little more than a lie or a joke. It is crucial to create all the conditions to re-open the next school year, in September, effectively. Not much is being talked about that, less still is happening in terms of action. Teachers and academic authorities must be assisted from now on to create the conditions for a rentrée that makes sense and brings everybody back to the reorganised classrooms.

In the end, as we approach the summer period, we realise that this should be a very intense period of work. We must recuperate what has been lost and look forward to a better horizon.

The US is going in the wrong direction

Poor American society. I should not say more than that this evening. But I believe there are enough citizens in the United States who understand that the current direction must be changed, by democratic means. To continue the same path can only bring added conflict, divisions, and violence. That is not the kind of ally we want to have. That is not the kind of superpower that can make the world safer