Tuesday, 13 June 2017

Has The Tide Finally Begun To Turn Against The Extremes

Has the tide started to change? Has the negative, extremist populism that has dominated political rhetoric for so long slowly begun to recede? Recent elections in Europe and the UK certainly give some hope to those who reject the hard-line uncompromising positions of either the far left or the far (alt) right.

            In France, recently elected Emmanuel Macron just saw his newly-formed party roar to an overwhelming victory in the crucial first round of parliamentary elections. On current form his party, La République En Marche, should win more than 400 of the 557 seats in parliament. With this victory, he completely overturned the political status quo by burying the traditional parties of the Left and Right. Macron, France’s anti-Trump, showed just how meaningless those traditional alignments have become, and in the process breathed some long-overdue fresh air and vitality into French politics.

He is now firmly in control
             He now has the power to enact the sweeping legislative reforms he promised to get the French economy growing. Among the first items on his ambitious agenda is reform of France’s notorious labor law that makes it very expensive to hire anyone and almost impossible to lay anyone off – regardless of prevailing economic conditions.

            Macron’s desire to introduce much more flexibility into French labor has – predictably -- incurred the wrath of the far left, who traditionally reject any move to relax the current strait jacket of regulations. Jean Luc Melanchon, leader of the far-left La France Insoumise (Unbowed France) has warned Macron that he should not tinker with the employment laws. The fact that his party received only a negligible share of the vote doesn’t seem to have made much impression of Melanchon. Like many people, he severely underestimated the desire of the vast majority of French people for a thorough, pragmatic approach to get their country moving again. Macron’s type of pragmatism now has the chance to do more for the sans culottes of France than anything the traditional Left or Right have to offer.

            As a deeply committed Europhile, another key part of Macron’s agenda is to deepen and strengthen the European Union. He has already moved to re-ignite the Franco-German motor of the EU. It is not all clear just how much Chancellor Angela Merkel shares his views about deeper integration, but with her recent comments about the EU having to act much more independently from the United Kingdom and the United States it is possible see much greater Franco-German cooperation for more integration.

They hold the keys to the European Union
            It is doubtful that anyone could live up to all the expectations that Macron has generated. He may find that using great power effectively is much more difficult than getting such power in the first place. Sooner or later he will stumble and generate a backlash from even his most fervent supporters. But, in the meantime, it will be fun to watch him trying to pull a country as steeped in tradition as France into the 21st century. Right now, he has the wind in his sails. One only hopes he is a good enough sailor to survive the inevitable storms.

            The reversal of fortune between France and Britain could not be more dramatic. After a startling election last week that saw the ruling Conservatives unexpectedly lose seats, Britain is now drifting rudderless in very dangerous seas. For years the British political and chattering classes have used France as a shining example of why Britain must leave the European Union. “How can we be tied to this failing enterprise called the European Union? Just look at France! What a mess! They will never get out of that hole.”

            Now, it is suddenly Britain that looks old and bungling compared with the youth and vitality across the channel. Macron is only 39, while British Prime Minister Theresa May looks very old and haggard at 60. We are already hearing voices that maybe the so-called Hard Brexit – a complete break from the EU – might not be the smartest thing to push for at this time. These concerns are supported by recent economic data that show Britain at the bottom of the league table. First quarter growth in Britain was only 0.2% while the Eurozone recorded growth in the same period of 0.6%. The much-derided Euro has also picked up strength against Sterling.

Whoops! This wasn't supposed to happen.
            We were recently in Holland, traditionally a strong British ally, and heard almost a sigh of relief at the prospect of Britain leaving the EU. “For years, all they did was say ‘no’ to every initiative for closer European integration. They wanted to opt out from this, opt out from that. In short, they always fought harder for British exceptionalism than for the whole concept of a strong European Union. It will be a relief to have them gone. Now we can get on with things,” said one senior Dutch executive.

            I doubt that Macron will be in a mood to do Britain any favors in the upcoming Brexit negotiations. I expect him to pay much more attention to moving his aggressive EU agenda forward than worrying about Britain’s continued relations – if any – with the union.


            The anticipated re-election of Chancellor Merkel in Germany and the election results in Holland and France demonstrate that, in Europe at least, the vast majority of voters want nothing to do with political extremes. They want solutions to their problems, not the theoretical rantings of the extreme Left or Right. It remains to be seen if the shock results in Britain will have the same results.

Thursday, 11 May 2017

Anger, Fear, Resignation Of The NO Voters Who Believe They Were Cheated

Superficially, the heart of Istanbul, the beautiful city rich in history that sits along the Bosphorus, is hanging on – barely. The hideous tsunami of concrete skyscrapers ruining the classic silhouette of the famous city encroaches from all sides with every passing day. The drive from the airport to the city used to be one of the most beautiful anywhere. You had the sea on one side and well-laid-out flower beds on the other. Now, it’s like driving down a dark tunnel with no view of anything.

Worse than the aesthetic and historical damage are the barely suppressed anger, fear, resignation, depression among the at least 49% who voted against the constitutional changes giving President Tayyip Erdoğan total control. Convinced that victory was stolen from them by complete fraud the opponents of Erdoğan’s power grab are thrashing around trying to come up with an effective response. The one heartening note for the NO voters is that Erdoğan lost all the major cities, including previously solid Erdoğan districts in Istanbul. Perhaps this development will form the basis for a serious challenge to Erdoğan in the next election. But never underestimate the ability of the opposition to shoot itself in both feet.
 
So much for the once-beautiful skyline of Istanbul
After changing the election rules while the vote was being counted the High Election Commission has been proven to be completely useless. The courts are no better. Essentially there are no genuinely independent institutions or internationally recognized law in Turkey.

Some have given up and already moved to Europe or the United States. Many of these wisely got EU or American passports several years ago. According to Greek reports more than 200 Turkish citizens have boosted the Greek real estate market by buying houses and flats there.

As one Turkish friend with a brand new Athenian apartment put it, “Tsipras is a loose cannon, but he is tightly controlled by the EU. There is nothing at all controlling Erdoğan. He is flat out dangerous.”
 
Who knows? Your new neighbor in Kolonaki could be Turkish
Other wealthy Turks now spend their holidays in Greece’s garden spots like Spetses, or Porto Heli. The attractions of Greece extend beyond tourism, however. One major Turkish company is having its annual senior management retreat at the Grand Bretagne Hotel in Athens. One of Turkey’s leading groups, the Doğuş Group, has made major investments in Greece by purchasing the Athens Hilton, joining the partnership in the redevelopment of the Astir Palace, and buying five marinas. This is just part of a trend where Turkish companies are investing outside Turkey at much faster rate than inside Turkey.

Still others are very concerned about their children’s education, and are looking all over Europe and the U.S. for schools. “This government wants to produce a generation of morons with frontal lobotomies that simply accepts everything by rote, never questions anything and certainly never criticizes anything. My kids deserve more." As if to confirm this fear the government recently banned the internet encyclopedia Wikipedia because it contained information that was insufficiently pro-Erdoğan. Knowledge unfiltered by the Reis can be a dangerous thing according to the government.

Meanwhile, the Turkish economy continues its dangerous downward slide. Inflation and unemployment continue to raise despite government spokesmen laughingly saying the problem is ‘under control.’ The only way the government can secure funds for the public works projects that feed Erdoğan’s close circle of friends and family is the increasing resort to Treasury guarantees – guarantees that cover everything from revenue from public/private projects and debt held by the contractors of these projects, some of the private bank debt issued to exporters and small/medium sized businesses. There is even talk of making the state the payer of last resort for mandated severances payments that companies must pay each employee according to seniority when they leave. In order to save cash and make the books look better, many companies don’t set aside enough money for these payments. Now the government is considering if it should bail the companies out and assume these payments. One Turkish investment banker in London laughed when discussing these guarantees. "It's the perfect set-up. There is absolutely no way for one of the favored contractors or concessionaires to lose money. This government will make sure they get bailed out regardless of the hit to the Treasury."

The most troubling part of all these guarantees is that there is absolutely no transparency. No one, certainly not the hapless taxpayer, has any idea of the details of this potential serious hit to the Turkish treasury and ultimately to his wallet. But, then again, why would you make these deals transparent if that very transparency would undermine the fantasy that you are trying to get the Turkish people to believe?

However, before people start thinking that any looming economic collapse will shake Erdoğan’s throne they should recall some other countries where dictators have not been affected by weak economies.

“Think about places like Zimbabwe, Russia, North Korea and Venezuela. All these economies are suffering and the ordinary people are in tough straits. The ruling clique stays in power by throwing the democratic rule book out the window and making its friends rich. Essentially the people are stuffed.”


Despite all the turmoil and disappointment one young NO voter estimates that most of his fellow NO voters will hunker down and try to make the best of a bad situation. Family ties, professional lives and a strong loyalty toward a vision of what Turkey could be will keep them in their native country, and perhaps form the core of resistance to turning Turkey into just another 3rd world dictatorship. One can hope.

Thursday, 4 May 2017

Forget Politics For A Moment. Food Is The Real Passion In Most Of France.

LIBOURNE, France – This town in the heart of the Gironde region of southwestern France sits on the bank of the broad Dordgone River and is surrounded by some of the most expensive vineyards in the world.  Names like Petrus, Cheval Blanc, or Figeac are just some of the names that attract very deep-pocketed wine buyers from all over the world.

But most of the time vineyards are a sedate sort of business. Major activity seems to come in spurts at different times of the year, and there is almost a reverential attitude toward the vines. The vines and the red gold that comes from them are discussed in the hushed tones that one might expect in a church or a Swiss bank vault. But then again, you might have to open that vault to buy a bottle or two.

No, for real activity and a real sense of La France Profonde – Deep France -- one must visit the open air market that takes place three times a week in the arcaded center of the town. In this market and others just like it across the country you get a real sense of what  French people consider important – food. It’s not just food, however. If the spirit moves you can pick up a nifty hat, a pair of shoes, a shirt, a couple of plates or just about anything you can think of.
Food markets have been held in this square for centuries
Seeing the food is one thing. Actually getting what you want, however, is something altogether more difficult. You are competing against experienced French housewives with massive carrier bags or pulling trolleys the size of your basic Range Rover intent on getting that luscious looking entrecôte you had your eye on. Their strategy and aggression would put the French national rugby scrum to shame. Just as you think you have caught the eye of the butcher a sharpish elbow to the ribs takes you momentarily out of the game. A few more incidents like that and you might just join their husbands who have long ago learned the futility of offering an opinion on a certain vegetable or piece of meat. They have now been relegated to a special section where they sip their coffee while waiting to be told where to go next.


Good luck getting that cut of meat you wanted
And the food is discussed with real passion. The different cuts of meat or poultry, the quality of the animal or what it ate are discussed with an almost religious fervor that the Jesuits would appreciate.  And the debate is no less fervent for the fruits and vegetables. “Well, of course, you do understand, don’t you, that while the Spaniards do produce strawberries, one isn’t quite sure exactly where they come from or how they’re grown.”  The stall holder will then inform you of the provenance of his own strawberries and how they come from a long line of good respectable French strawberries.
If you don't want the meat there's always the daily fresh fish catch

            And then there are the cheeses. None less than Charles de Gaulle moaned about the difficulty of running a country that had at least 246 different types of cheeses. He had a point. Just about all of those varieties, and then some, are on display, and you are encouraged to sample the subtle – very subtle – differences between this brie or that brie, Comté aged for different lengths of time, and many, many more.


Is this what makes France difficult to govern?

           Now that the taste buds in your mouth are clanging like church bells you move on to the shell fish. Huge baskets are over-flowing with oysters, clams, or scallops from the Bay of Arcachon about an hour away on the Atlantic coast. You think about buying some. And then you think again about your skills of opening an oyster without slicing off at least one of your fingers. Best leave that task to the experts.

            While my wife is off haggling about the price of fresh asparagus – white or green -- in her perfect French, I head to the nearby stalls filled with fresh paté. My French isn’t awful, but I have to admit that the names of some of the ingredients of these patés escaped me. I just nodded sagely, took the offered sample, tried not to gag and moved smartly onto the instantly recognizable foie gras.

            By this time your shopping bag is feeling a little heavy and it’s time to look around for a friendly patisserie that would offer a chair and a coffee to go with that nice looking, fresh pain au chocolat.  The first one went down so well that it had to be followed with another. Finally, it was time to lug the stuffed shopping bag, now containing the obligatory baguette or two, back to the car and head home.

            Now the real challenge begins. Just what do you do with all your purchases that seem to include enough food to feed several small countries? Well, this is France, after all. And figuring out what to do with food is something they do very, very well.


Friday, 28 April 2017

The Challenge Before French Voters -- Pull Up The Drawbridge Or Move Forward

BORDEAUX -- Very few elections offer voters a crystal-clear choice of policies. The presidential election in France next month is one of those rare occurrences. The two candidates in the final round offer polar-opposites of policies for surmounting the multiple challenges facing France as well as Europe. The choice couldn’t be more stark.

            In the first round of the presidential election voters swept away the sterile, failed policies of the traditional Left and Right parties who had ruled France for more than 60 years. The minute policy differences of these two groups were hotly debated among the chattering classes of Paris for decades while the rest of the country was left to stagnate in an economic morass.

            The first round on April 23 highlighted the new division in France. Instead of the old Left/Right construct France now has a sharp division between those favouring the so-called liberal world order with all its international institutions, global economic aspirations, human rights and freedoms that Europe has become used to. This camp thinks France is in a much stronger position to face global competition as an active member of the European Union than as an isolated, independent country caught between the huge forces of the United States, Russia and China. Opposing this are those who reject completely the liberal world order and who want to pull France out of institutions like NATO, the European Union, and the Euro. Their answer to France’s economic and social problems follows Trump’s recipe: pull up the drawbridge, cower behind high tariff walls, and – most of all – kick out all the immigrants.
           
            Why does all this matter? Why should anyone outside France worry about this election? Simple. France is a big country at the heart of Europe. A European Union without France is inconceivable. A revitalized French economy would be a huge shot in the arm for Europe as a whole. A re-confirmation of the values of human rights and equality in a country as central as France would send a clear message that Europe still firmly rejects the authoritarian, isolationist, and nativist policies of the extreme right.
Centrist Candidate Emmanuel Macron

             The centrist candidate, 39-year-old Emmanuel Macron, came out of nowhere to form a country-wide movement that propelled him to first place in the first round of the presidential elections. He is a former minister in the government of President Francois Holland, but left last year to start his own independent run with a new formation called En Marche! – Forward. He symbolizes the side of France that accepts the global challenges of the 21st Century and says France could clearly be on the winning side of those challenges. He is full of ideas for changing the stalled French economy, but these ideas involve changing the status quo in France – something that is very hard to accomplish in a country where traditions and fixed opinions are strong. In short, change is not something generally well received here.

            The extreme-right wing candidate, Marine Le Pen – otherwise known as Le Trump – says Rubbish to all that. She inherited the Front National leadership from her father who was one of the founders of the party. She has tried to change, without much success, the party’s racist, quasi-fascist, anti-Semitic image into pure, Trumpian social and economic nationalism. But sometimes the old image shines through as she whips up the crowd about restoring the Glory of France. The only ideas she proposes for accomplishing this ambitious goal are retreating rapidly from the global economy, leaving international institutions like NATO, giving up the Euro,  and throwing out all the immigrants. And along the way, she would cripple all international investment bankers – like Macron – whom she blames for France’s fall from power and glory.

Extreme Right Candidate Marine Le Pen
            In normal times Le Pen would never have a chance of winning the second round because the vast majority of votes from the losing parties would go to anyone opposing the National Front – seen by many as an affront to the sophisticated, socially responsible image of France. This would be a repeat of 2002 when Le Pen’s father made the final round, but was routed by conservative Jacques Chirac as even the leftist voters chose him over the National Front.

 But these are not normal times in a deeply divided country. If a large number of voters whose candidates lost in the first round decide to abstain rather than support a change advocate like Macron it is quite possible that Le Pen could sneak into the presidency.

            This danger comes from the fact that in the voters’ disgust with the status quo the extreme Left and the extreme Right accumulated almost 40% of the total vote in the first round. Despite their apparent contradictions very little separates the economic policies of both extremes. To them, issues like globalisation, international finance, or bankers in general are evils to be rejected at all costs. The extreme Left risks making the same mistake that the small splinter holier-than-thou parties in the United States made in 2016 when they took votes from Hillary Clinton and handed the presidency to Donald Trump. Many of France’s extreme left have said they prefer to maintain their intellectual purity by abstaining rather than voting for the hated globalisation they think Macron stands for. This electoral dilemma has driven the French café society into overdrive as everyone offers advice on what must be done. It remains to be seen just how much the French electorate pays attention to all this noise.


            French presidential election campaigns are mercifully short, and it will all be over on May 7. The French are also spared the tactics of Turkey’s ruler Tayyip Erdoğan. It’s a relief to be in a country where political opponents and critical journalists are not thrown in jail, newspapers represent every political point of view, there is equal time for the candidates, and – most important – there is no threat of rigging the results. Regardless of the outcome, we should all be grateful for free and fair elections. Experience in Turkey shows they can never be taken for granted.

Monday, 17 April 2017

Turkey's Already Difficult Path Just Got More Difficult

The only surprising thing about the outcome of yesterday’s Turkish referendum was just how close the result was. Given his total domination of the media, use of thuggish gangs to intimidate opposition rallies, jailing political opponents and journalists Turkish President Tayyip Erdoğan should have won his power grab by 20 points or more. Reflecting the complete split and sharp divisions of Turkish society he won by less than 3 percentage points. And the opposition is claiming that at least 2.5 million invalid votes were cast in favour of the constitutional changes. Because Erdoğan and his cronies control every branch of government it is very doubtful that those claims will get anywhere.

The map shows the huge problem Erdoğan faces. All the big cities, the Aegean coast and Kurdish areas
voted against him.
            A leader genuinely interested in representing the entire country would pay close attention to this vote, especially the fact that all major cities voted against the constitutional changes. This was the first time ever that Istanbul, for example, had voted against Erdoğan. But introspection and course alteration to meet the demands of 50% of the population are not on Erdoğan’s agenda. He is now free to move Turkey even further from the ideals of Europe and closer to the dictators and petty despots of Central Asia he admires so much.

            He never liked the European Union with all its emphasis on thorny issues like human rights, freedom of speech, or independent judiciary. He loved to whip up the crowds by railing against any European leader who had the temerity to criticize him. He promised to replace the EU’s Copenhagen criteria with his co-called Ankara criteria, which most likely include stiff jail sentences for any of those pesky EU leaders who set foot in Turkey.

Erdoğan votes in the referendum
            One would like to think that the better-than-usual results achieved by the opposition would encourage them to capitalize on this showing by getting better organized and broadening their appeal to all segments of Turkish society.

On one level, Turkish voters continued their vain search for a strong leader a Man on a White Horse who can solve all their problems with the flick of his wrist. This part of the society refuses to accept that the complicated process of improving the country starts with themselves and includes truly independent institutions like the judiciary, the press, the Central Bank, and above all else a quality education system. But that’s hard work. Much easier to rely on the strong man. However, it was encouraging to see that almost 50% of the population rejected this simplistic notion and demonstrated – against all odds – that they valued a real representative democracy, with all its faults. Perhaps they can keep the flame of democracy alive in Turkey.

            His cynical tirades against Europe paid off for him as the referendum results showed most of the Turks who voted in Germany or the Netherlands voted in favour of the constitutional changes. In fact, without these votes Erdoğan may well have lost the referendum. Most of these Turks may have no intention of returning to Turkey, but they told a German journalist friend of mine that Erdoğan made them ‘feel proud to be Turkish.’ It’s a pity that they don’t realize they were just useful tools for Erdoğan and are much better off in Germany or the Netherlands – where they enjoy the full spectrum of rights and economic opportunities -- than they ever would be back in Turkey.

            In all his push to resemble his Central Asia idols, Erdoğan faces one enormous problem – a problem he can’t solve with a jail sentence. The economy now resembles Venezuela-without-the-oil, and is eroding like sand under his feet. The budget deficit is increasing rapidly, unemployment is climbing, inflation is back in double digits, and inward investment has dropped sharply. To add insult to injury, Iran is now the favored destination for many European companies. It is becoming increasingly difficult to fund Erdoğan’s massive public spending projects, projects that have enriched his family and several of his close associates over the last several years. Many people have spoken about this ‘charmed circle’, but a recent analysis by Rainer Hermann in the Frankfurter Allgemeine Zeitung described it in great detail. But now, funding them has become a real problem. Money is disappearing from the Treasury. Erdoğan has had to resort to such desperate tactics as issuing government guarantees of profitability for the favored contractors or demanding the state banks lend to these projects when private banks refuse. He has also forced state companies into a so-called Wealth Fund which will enable him to re-direct the cash flow and borrowing capabilities of those companies into ever-increasing public works projects to keep the ‘charmed circle’ happy and rich – at the state’s expense.

            What comes next? Will massive statues of Tayyip Erdoğan begin to dot the landscape of Turkey?  Will his likeness be sculpted onto a cliff, like Mount Rushmore in America? Will he change his name to something like Türkbaşɩ, Chief Turk? Who knows? And more important, how will he react when faced with serious economic, international or military problems of his own making? He has already reduced the number of Turkey’s friends to such a level that they can hold their annual convention in a phone booth. Who will he call? Donald Trump? Vladimir Putin?


            For the immediate future the Turks can only wait nervously while Erdoğan determines just how to play his narrow win. Will he snuff out Turkish democracy completely or will he uncharacteristically reach out to the millions of Turks who actually like their democracy?