11-11-19
Dear Partners in thought,
This month of November is heavy in celebrations and memories from the fall of the Berlin Wall to the Velvet Revolution in Prague and similar developments across the former Soviet sphere thirty years ago. While it was a momentous point in history, it proved not to be the end of it as Francis Fukuyama hoped for but rather a wind of freedom that ran into the daily hurdles of rebuilding a civilisation and a system that could could make us work together, especially in Europe.
As I was going through the rooms of the exhibit celebrating the Velvet Revolution in the Prague summer palace this past week I could not help but thinking that the broadcast news of my younger years were now, well, history. I remember the times when right after the fall of the Wall, as a young banker, my team leader Jan, a Londoner of historical Polish descent, and I went through the large Soviet style rooms of the Ministry of Finance in Warsaw to pitch for and win their pioneering and transformational Mass Privatisation Programme. This unusual banking episode likely led me to combine finance and history when I joined the new EBRD in 1993 to help rebuild at my small level a new continent and facilitate market transition through investment projects with high “additionality” (the institution’s then buzzword) throughout Central & Eastern Europe. As Dean Acheson for another period had stated and in a much lesser role for me then, the feeling of being “present at the creation” was very vivid and thrilling.
It is easy to moan about the failures, which were many in the 1990s and after, in terms of rebuilding a world where social and economic liberalism would lead the way as if there was no tomorrow. It is fair to say that we did our best given the constraints at play, however imperfect the outcome. However we need to be pragmatic and realistic and see where we are. Thirty years later, the West is under threat as to what it means, nationalism is resurgent both in Western and Central & Eastern Europe, liberalism is under siege and capitalism is no longer revered. And yet we keep going.
America under Trump has lost its mantle of Western leadership based on its founding fathers’ values that undeniably protected us while serving its interests very well the world over since WW2. An “America first”, prone to protectionism, further disengagement and unilateralism, gradually emerged in an erratic and troubling way, with allies getting increasingly lost as to its game plan, if any. From Europe and also for Americans and the world one would hope that voters, who still would back Trump while holding their noses, see beyond short-term economic gains and focus on what really matters and what made America this unique country in November 2020.
Russia, which was neglected in the 1990s notably by a supremely victorious, suddenly sole superpower, America, and suffered a deep national humiliation, got gradually resurgent under Putin who understood that its people wanted respect more than they wanted bread, with the exclusion of some docile oligarchs. Assertiveness paid off in Crimea and in Western Ukraine while sending shivers down spines from Warsaw to the Baltics. With the unwitting help of a new America that seems geopolitically unaware, Russia is now one of the game changers in the Middle East.
China which was going through one of its darkest modern hours in Tiananmen Square while East Germans were climbing the wall managed to keep a strong control over its population and politics while creating a massive change in economic well being and keeping rising as a superpower. Many Chinese, having become consumers and being able to act like quasi-Westerners almost forgot that freedom was not part of the deal offered by Beijing, something that Hongkongers came to realise the hard way and that most of the West has tacitly accepted as an internal matter for a sovereign country.
Europe kept building itself gradually welcoming the former Central & Eastern Europe states (minus Ukraine and the ex-Yugoslav countries) in the hope of strengthening the European bloc, putting an emphasis on trade and the economy while a NATO led by a benevolent and self-serving America was ensuring the peace for the traders. Nearly 15 years after this major step, divergences were clear between the old and new members especially in terms of identity and nationhood that the latter had lost for so long.
The Visegrad four (Poland, Czech Republic, Slovakia and Hungary) are now often taking a more nationalistic approach in terms of identity and immigration (like with the refugee crisis on 2015) than the older members. It is strange that the European stalwart supporters of nationalism, not to say populism are Poland and Hungary today with the Czechs not being far behind while Slovakia seems to be far more liberal (a wink to history for those who remember the Meciar years in the 1990s). It is sad to see Poland and Hungary being led by governments that are backed by solid majorities, supporting populist policies that indeed gained power with local, mostly rural electorates (following the American and British models) while they were the beacons of democracy and freedom thirty years ago (Orban, true to Hungarian legacy, being quite a liberal politician for those who remember the 1990s). It should be noted however that both Warsaw and Budapest, like Prague, have recently elected liberal politicians in municipal elections, counter-balancing the image their governments have created.
There is a lack of memory in parts of Poland, Hungary and to some extent the Czech Republic. Poland, now the sixth economy in the EU, was for years the leading recipient of economic aid from Brussels (some will remember that a week after receiving a massive EU aid programme 20 years ago they ordered US fighters jets, the weight of history taking precedence over continental partnership and economic gratitude). When I walk on Petrin Hill near Mala strana in Prague I cannot help remembering 20 years ago the billboard stating that the whole redevelopment of the hill, which is a beautiful area in the center of Prague, was then being funded by the EU. Memories fade and newer generations want to be elected, using what they can to do so while one should not expect gratitude to be a guarantee of true partnership. It is also true that France and Germany (and Britain of course) took the EU as a way to keep leading the continent, if not on their own, at least as a concert of key nations, seeing probably these new members as docile partners that should belong but follow. The refugee crisis (many thanks to Bashar al- Assad who knew what he was doing, something we should never forget) created pressure points with the old members not helping enough the new ones but also forgetting the ones on the front lines like Italy, helping the populists using that strategic mistake to seize power.
Macron, probably the only heavy weight leader in the EU as Merkel goes into the sunset, is right to emphasise that Europe needs to be redefined not only as a trading and economic club or bloc but as one also focused on foreign policy and defence, all the more given the vacuum if not disruptions created by today’s Washington. The choice is indeed between oblivion and leadership, if not sheer existence, playing a strategic role between America and China, both superpowers of our age that will lock horns in a world leadership contest. That Britain may chose to leave the EU at this time in history is a surprising sign of misunderstanding of the future directions of the world, all the more for a country that was once its leader. Macron, who increasingly speaks for Europe as much if not more than for France, the two agendas being intertwined (though not in the old French “European agenda” of old Présidents but more as a straight European game plan for the whole bloc), is also right in re-engaging with Russia, while being vigilant of its developments, as Europe will not benefit from an isolated and economically weak but strong military power in search of a renewed existential role in world affairs. Macron may be imperious to some but he has a vision for Europe and the words to say it.
Europe is not perfect and is a project constantly in progress. It is likely that the gaps between the old and new members, like on the subject of immigration, will be reduced as can be judged by the far more restrictive steps taken by the French in this area so identity is indeed preserved and immigration becomes more selective. Macron’s opposition to enlargement for North Macedonia and Albania (which is supported by his “friendly” incoming EU Commission President, Ursula von der Leyden, while many members states hide behind France) may be tactical and a bargaining chip with other member states for his “European Intervention Initiative” as well as his push for EU reform plans he would like to see hammered before any enlargement. It is also likely that voting mechanisms in the EU will be revisited, with the right of veto possibly no longer being a tool and the economic and population weight of members states playing a bigger, weighted role in decision-making, something that would make EU life more efficient and fair, this without weakening policy-making.
Thirty years later, Europe has grown stronger (even with Brexit – look at the one voice in the negotiations) and should redefine itself so the citizens of its members states see it for what it is: a strong bloc of nations that should become even stronger and not the end of sovereignty, which it never was. We are far from a more federalist Europe which some would like (myself included) and we should work harder at making the EU seen by the citizens of its member states as a beneficial tool for prosperity, happiness and indeed sovereignty in an increasingly challenging world for small nations.
We need to keep building a strong and independent Europe and living in our times, away even if respectful of past historical national achievements that are no longer relevant in the new world equation. We owe it to those who fought for freedom in the darkest years we remember this month and, more importantly, to future generations.
Warmest regards,
Serge
Desperate Measures 