Tuesday, May 31, 2005

Sweden Sliding

Sweden -- 2005 IMF Article IV Consultation, Concluding Statement

Last week, the Swedish media noted that the country's economic policy had been praised by the IMF.

Well, I wonder if the person who wrote that had read the Concluding Statement coming out of the so-called Article IV Consultations. This is an annual thing. Well Prepared. Carefully Drafted.

It's true that the IMF starts by speaking of "large gains in productivity, continued low inflation and a comfortable competitive position." 2004 was also a year of "strong economic expansion."

But that's really the end of the praise. And probably as far as the journalists read.

The rest is a rather damming indictment of the government for presiding over "gradual drift" towards higher and higher public deficits. The central government finances are already in deficit, and the overall public sector is heading there fast.

It might not be as bad as in some other countries - but certainly worse than most people are aware of.

But it's not only that. IMF speaks of an "institutional setup that discourages work effort", and notes that figures on how many people work in Sweden should be treated with a large grain of salt.

"Taking account of the large number of employees on sick leave, social assistance, labor market programs, and measures such as mid-life sabbaticals, effective employment is significantly lower. The marked rise in disability pensioners, especially among yonger workers, is particularly worrisome."

And it goes on by calling for redudce income taxes and says that "the pace of structural reforms needs to be accelerated."

Sweden is certainly a country well placed to benefit from the acceleration of European integration and globalization that we are now seeing.

But it requires more forward-looking policies. IMF is worth listening to - in everything it has to say in this report.

Force for Freedom

EUbusiness - EU court rules Swedish state monopoly on medicines is illegal

In these days of eurogloom it's nice to see that the institutions of the European Union continue their work in promoting and protecting the free and open economy that is the foundation for the prosperity of the member countries.

Today, the European Court of Justice ruled that Sweden's state monopoly on medical preparations is illegal. This has been a controversial issue for years in Sweden, with the present monopoly-happy government doing whatever it can to preserve the old-fashioned state of affairs.

It has clearly been an arrangement to the detriment of the consumer - with the state instead taking the side of the public monopoly producer.

Now, it's the end. Great! It didn't prevent the responsible minister in the government to state that they will do whatever, in spite of the European Court, to preserve the monopoly.

Good luck! Those that always insist on fighting losing battles normally end up on the wrong side of history.

Downing Street Decides


With another resounding No in the referendum in the Netherlands tomorrow highly likely, the focus of attention is rapidly shifting to London.

It's unlikly in the extreme that the Blair government will proceed with plans to hold a referendum on the Constitutional Treaty.

It is more likely to postpone everything indefinitely, perhaps saying that they eventually are ready to have a referendum after the French have had another one or ratified it in some otherway.

This, of course, is little more than pushing the buck around. Nothing of this will happen in the foreseeable future. And if this is the line from London, it is safe to expect that it will be the line coming out of additional capitals, although frenetic efforts are underway to stop the leaks from the ship.

It's far more constructive to note that this Constitutional Treaty will not come into effect in the foreseeable future, and start the real discussion on what really needs to be done.

Two things need to be in focus in that debate. Issues of peace, and issues of prosperity. What really needs to be done.

A debate with substance first and institutions second. Not the other way around. That might make it possible to getthe required support throughout Europe.

Monday - when the British government will show its cards - will be the really crucial day. I'll watch it from the perspective of Moscow.

Monday, May 30, 2005

Why No?

TNS Sofres - Sondages, opinion, etudes : Le r�f�rendum du 29 mai 2005

Why did those that voted No in the French refererendum did so? Did they really object to the one or other part of the Constitutional Treaty?

Not really. A quick poll by the TNS-Sofres opinion polling agency tries to answer why the No's noted No.

The number one reason (46 %) is the issue of unemployment and a fear that it will rise further. This is, in its essence, the question on whether globalization is a threat or a promise.

The number two reason (40 %) is the situation in the country in more general terms. It's difficult to see that this has anything to do with the Constitutional Treaty.

The number three reason (35 %) is the alleged possibility of re-negotiating the treaty. Unclear, however, what this re-negotiation should be about.

And the two reasons sharing the number four position (34 %) is that the treaty is difficult to understand and that it is too liberal.

That most constitutional text are rather far from being immediate crowd-pleasers seems to be a point lost, or that the ultimate in being liberal in terms of an open market is really the Treaty of Rome that France signed in 1957 and has been - well, more or less - implementing since then.

I guess that there will be more refined polling and analysis eventually, but these first results are not without their interest.

In the meantime, we are all waiting for the Nethetlands.

Europe will survive a French Non

Europe will survive a French Non

It was not a total surprise that France was going to vote No, and accordingly there have been some debates about the possible consequences.

As I have already indicated, I find the official line that everything should just go on in terms of ratification less than credible, in particular if there is a No in the referendum in the Netherlands on Wednesday as well.

It's worth noting that the government in London is not lining up with the official line from Brussels at the moment. From his vacation in Italy, Tony Blair is talking about a period of reflection, evidently wants to wait for the Dutch before he goes any further and announces that the Foreign Secretary will make a more official declaration on the possible road ahead next Monday.

The likelihood of them then saying that they wil go ahead with a referendum in the UK in spite of a double No in France and the Netherlands is virtually zero. And then we will have a situation where the UK de facto will withdraw ratification from this constitutional treaty.

And then it is less likely that the European Council on June 16-17 will just repeat the present official line. But we'll see.

The European Union will now be governed by the Treaty of Nice. That's perfectly OK for the time being. But at the same time one should start looking into ways in which some of the policy changes in the Constitutional Treaty could be implemented without any treaty changes.

In the linked OpEd piece in the Financial Times from last week, Charles Grant discusses certain of these options.

Particularly in the field of the Common Foreign and Security Policy, it is both desirable and possible to start to move in this direction.

The world needs a stronger European role.

Revolt of the Rural

Le Monde.fr : Les r�sultats d�partement par d�partement

As always, the pattern in election results is revealing, and the pattern in the French referendum result did not deviate from the pattern we have seen in other similar cases.

It's to a very large extent - in the middle of everything else - the revolt of the rural against the urban.

José Bové, who is the leader of the militant anti-globalisation movement in France and somewhat of a celebrity, was obviously right in calling it "a protest vote".

The large and outward-oriented urban areas of France voted yes. In the region of Paris with impressive 66,5 % and in the second biggest city Lyon with 61,4 %. Toulouse with its Airbus and space industries voted 51,3 % yes and Bordeaux did the same with 57,9 %. In Strasbourg, with its particular European history and experience, the Yes vote was 62,9 %.

But the cities were swamped by the rural areas that - with only part of western France as the exception - voted massively no. And they were joined not the least by problem-filled areas in the declining industrial north-east and in the politically polarized areas down by the Mediterranean. The city of Marseille voted no with 61,2 %.

In essence, this is not too dissimilar from the results that we had in the different referendums on European issues in the Nordic region.

The urban versus the rural, and the modernizers versus the protesters.

Sunday, May 29, 2005

Europe - What Now?

Lefigaro.fr, l'actualit�francophone au quotidien

With exit polls giving the No side 54,5 % of the vote in France the fate of the Constitutional Treaty is de facto sealed.

We have missed a possibility to create a better functioning European Union with the possibility of a stronger voice in the world and better possibilities of fighting crime in Europe itself.

That is, needless to say, bad. But it's not the end of neither the European Union nor of Europe. When some prominent voices claim that a No would mean "the end of the future of Europe" - in this case it was Romano Prodi - it is of course unmitigated rubbish.

Europe goes on. The question is how. There will be the need for a new leadership in a new situation.

The majority in France gave their no because they were dissatisfied with the present and fearful of the future. A substantial part of that clearly had to do with the domestic affairs of France, but a substantial part was also related to Europe as a whole.

They feel lost in a Europe where globalisation and integration is making change the necessity of the day. They evidently feared that their - in my view hopelessly outdated - view of France would be a loser in that Europe. In that sense, they might not have been that wrong.

The immediate result of the vote is obviously a crisis for France. It's a failure for both President Chirac and for the Socialist Party. There will have to be a serious soul-searching in the political forces of France before they can start to approach these issues again.

In itself, this might not be a bad thing.

In the capitals of Europe, and not the least in Brussels, the question is of course how to proceed with the issue that the French have now voted on - and the Dutch will vote on this Wednesday.

Prime Minister Jean-Claude Juncker of Luxembourg - holding the European Union presidence at the moment - have said that everything should go on and every country should take its decision on the treaty. A referendum should be held in Luxembourg on July 10.

But this doesn't make any sense whatsoever.

First there is the very obvious risk that it will be just an accumulation of further negative decisions. Even Luxembourg might well vote No if France and the Netherlands have already done it.

Then it is now clear that this particular text will never enter into any force. The decision of France must be respected. To continue with ratification in different countries is just to prolong the agony.

When the European Council meets in Brussels on June 16 they should close down the process officially. But they should also stick to their previous agreement to meet in November of next year to consider the situation and discuss what to do.

Then the period until then will be a period of further reflection and debate. In the meantime, everything will work in accordance with all the treaties in force.

In the meantime we might see changes in the political landscape of Europe. There will in all probability be a new government in Berlin by this autumn. There might well be a new Prime Minister in London within this period. And shortly thereafter - in March 2007 - there will be a new President in France.

Clearly, the Europe of today can provide the leadership that inspires. But after a debate across the borders in the coming years, there is at the least the possibility that we will get it.

We are entering a new and not uninteresting phase in the evolution of the European Union.

Sweden's Economy - Successful or Sick?

Not the least its government likes to portray Sweden as a big success story in terms of growth and employment, and not seldom this is what comes out of EU compatison based on the official statistics available.

But the thruth is somewhat different, and a row inside the trade union federation LO during the past weeks have exposed this in a somewhat brutal way.

By tradition, the economist of LO have intellectual freedom, alhough they are supposed to stay politically loyal to LO and the social democratic party.

Now, however, the limits of this intellectual freedom has been demonstrated as a report on the level of real unemployment in the Swedish economy was de facto supressed and the author left his position at LO in protest at this. As a result, the report has gotten far more attention than would otherwise have been the case.

The official unemployment rate in Sweden is 5,5 %. This is the figure the government likes to give out. It's considerably above the 4,0 % they have as their target - indeed "the promise" they have given the voters in the last few elections. That's bad enough.

But in addition there are 4,4 % of the labour force in different sorts of labour market programs. If you add these two together, the unemployment rate suddenly jumps to 9,9 %, which is very much higher, and doesn't make Sweden that much different from some of the more problematic economies in Europe.

But what Jan Edling - formerly at the LO - claims is that this figure is way too low. A number of other measures, notably putting people on early pension schemes of different sorts as well as on long-term sickness benefits, should add in the order of a further 10 % to this figure.

That's dramatic. That means that in the order of 20 % of the labour force is unemployed in the one way or the other.

Not much to boast about - mildly speaking. In terms of employment, the Swedish economy suddenly looks like being far more sick than it is succesful.

Saturday, May 28, 2005

The Splits of France on Europe

Le Monde.fr : Intentions de vote pour le r�f�rendum sur la Constitution

Tomorrow, France will say its Yes or No to the Constutional Treaty for the European Union.

But already today it's interesting to see how the campaign has evolved and how the split of France on the issue really looks. The opinion poll in Le Monde today gives some answers.

In political terms, the No side is most strongly supported by the extreme right of Le Pen and the extreme left of the Communist Party. That's hardly news. The extremes have always came together in their nationalist and nostalgic opposition to European integration.

But the opinion polls makes clear that the decisive support for No comes from the serious split in the Socialist Party, with this poll showing a clear majority of its supporters in the No camp. It's leadership has failed to secure the support of a majority of its followers, although the party itself in an internal vote in December come out solidly - well, 58 % - in support of the treaty.

Among the supporters of the parties of the centre-right, support for the Constitutional Treaty looks surprisingly solid.

The key conclusion is that in more concrete political terms it is the split in the Socialist Party that's threatening the position of France.

Crisis Postponed

The talks between Iran and the so-called EU3 - France, Britain and Germany - in Geneva earlier this week was a success in the sense that a collapse and a crisis was postponed. Now, the talks will resume after the presidential elections in Iran.

What was decided is that Iran for the time being will remain within the framework agreed in Paris in November 2004 by complying with all its provisions, including those dealing with the suspension of enrichment- and reprocessing-related activities.

It was also decided that the talks should continue, and the EU3 would make more detailed proposals to the Iranians, if possible at the end of July or early in August. It being understood that these proposals will normally cover all aspects under discussion, i.e. everything regarding security guarantees, economic, technological and nuclear cooperation and also political dialogue.

There was another event in Geneva in the week that wasn't entirely unrelated - the opening of negotiations on Iran’s membership in the WTO, which was one of the points discussed earlier with the Europeans.

We'll see what happens. The Iranians continue to insist on their right to the entire nuclear fuel cycle, and the EU3 continues to insist that Iran should abstain from any activities linked to the enrichment of uranium as well as to the reprocessing of spent fuel.

In itself this does not guantee that Iran will not seek to produce nuclear weapons - but it would make the time between a decision and a deployment of such a weapon substantially longer. That's in reality all that can be achieved.

Further on, another regime in Iran might make it possible for Europe as well as the United States to go into far more collaboratibe relationships, which would be good in itself from every conceivable point of view.

A More Ambitious Europe

mysan.de - be updated - Former Prime Ministers Call for More Ambitious Europe Ahead of French EU Vote

A brief account of a discussion I had yesterday in the European Parliament in Brussels on the competitiveness of Europe has found its way into cyberspace.

It was a discussion with former Prime Minister of Denmark Poul Nyrup Rasmussen and former Prime Minister of Estonia Mart Laar and myself on what Europe needs to do to grow better and create more new jobs for the future.

I called for structural reforms - the labour market flexibility of Denmark and the flat tax of Estonia are good examples - as well as new investments in research and development.

And we carefully avoided the subject that otherwise dominates everything in Brussels these days - the effects of a No in the French referendum on Sundaty.

Friday, May 27, 2005

Bush and Abbas

Bush Praises Palestinian; Tells Israel of Its Duties - New York Times

It seems to have been a good meeting yesterday in the White House as Palestinian president Mahmoud Abbas came to visit.

There is unlikely to have been uniformity of views on everything, but it was clear that President Bush was keen to express as strong a support as possible to the democratic transformation under way in Palestina and to the efforts to prepare for a proper peace process with Palestine.

Divergencies were there in public on the question of Hamas, but more informally it's obvious that Washington doesn't really see much of an alternative to the policies pursued on the issue by Mahmoud Abbas.

It's a question of drawing Hamas into a political process - and then defeating them there.

A good meeting. Hopefully it created a bit of a new momentum. But much will depend on the Palestinian parliamentary elections and the way the Gaza withdrawal is carried out.

Thursday, May 26, 2005

Future in Danger?

A dangerous game in France########### '

Daniel Cohn-Bendit is always worth listening to. Once one of the street leaders of the 1968 student rebellion in France, and since then Member of the European Parliament from first France and then Germany, he is now a leader of the Greens in that Parliament and a vocal debater on most European issues.

He's distinctly in favour of the new Constitutional Treaty and distinctly worried about the consequences of the No that he anticipates in the referendum on the issue in France on Sunday. And his arguments are worth listening to.

Nothing is certain in an election or a referendum. Opinion polls still indicate that a quarter of the electorate in France haven't yet made up their minds. There is still hope.

But if there is a No in France there is likely to be a No in the Netherlands three days later and that means, for all practical purposes, that the present proposed Constitutional Treaty is dead. To keep the process alive will only prolong the agony.

This will have consequences of different sorts, although - as Daniel points out - both the world and Europe will go on.The European Union works today and it will work tomorrow, but it has missed a good possibility of working even better in the years ahead.

And that's really needed. There is a large risk that Europe will be squeezed between the innovation potential of America and the production potential of Asia in the decades ahead.

Only a Europe that moves forward will have the ability to inspire not only its own citizens but also the wider global community.

Wednesday, May 25, 2005

Saving Sudan - and Africa

Annan heads to Ethiopia for conference to boost African Union efforts in Darfur

Everyone is heading for Addis Ababa in order to try to save Sudan.

Everyone? Well, the Secretary General of the United Nations, the High Representative of the European Union, the Secretary General of NATO and a couple of others. It's a conference to pledge support to the African Union peacekeeping efforts in the Darfur region of Sudan.

Good and worthy and nice in itself. The African Union certainly needs the support it is given. And there is most certainly a need for the AU peacekeeping forces that are now in Darfur and that will, at least according to plans, increase to 12 000 towards the end of the year.

But in itself this will not solve the situation. Stabilize, perhaps. Solve, distinctly not. You can stabilize with a military mission of this sort, but in order to solve you need a political process.

At the moment, there is hardly anything worthy of the name in Darfur.

The different rebel movements seems, according to the UN representative there, to be more interested in travelling around the world than in attenting peace talks. And there are obvious strains between these people and those actually doing the fighting on the ground in Sudan.

As long as this remains the case, there will be no peace worthy of the name, and that irrespectively of what the government in Khartoum is doing or not doing. It take two to tango - or to test the seriousness of each of them to the dance.

At the end of the day, everything is linked to the process with the implementation of the peace agreement between the South and the North of Sudan. That's the really big story for the coming years.

The UN has just started to deploy the beginning of a peace force that will build up to app 10 000 men and women in primarily the South of the country. It will in all probability be the biggest, most challenging and most important UN mission in the years ahead.

Also here, the political process is paramount.

In six years time there will be a referendum in Sudan on whether they want to stay together or split up with the South and the North going different ways. It's a very short time to demonstrate that a common future might actually work.

A breakup of the biggest state in Africa will have far-reaching consequences in the region. There might well a serious aggrevation of the tendencies towards disintegration in the entire region immediately to the South of the Sahara - from Somalia to Sierra Leona. Large parts of the region will be hovering on the brink of genocide.

The future of Sudan is of immense importance for the future of Africa. It's the biggest country of the continent - bordering on no less than ten other states. Its diversity in terms of cultures, traditions and languages is vast.

I hope that the discussions in Addis Ababa will not only the the usual beauty contest between international organisations on who can to the best to provide planning and logistical support to the efforts of the African Union. That's certainly important - but no more than the beginning.

There needs to be a proper political process. In Darfur - that's the most immediate challenge. In Sudan as a whole - really making certain that the peace agreement works over the years to come.

And a clear strategy from international actors on how to prevent the catastrophies that are likely to flow out of a gradual disintegration of important parts of Africa.

It might be there - in which case it remains a deep secret. An even deeper secret would be to absence of such a strategy.

Mood, Madness and Leadership

During the past few days I have spent some time talking to people first at UN Headquarters in New York and then in the European Union institutions in Brussels.

Neither is a place in a particularly good mood these days. Morale has suffered from real and perceived political and other setbacks. And there is the fear that more will come.

As always, mood swings too fast and too far in whichever direction it swings. Neither the UN nor the European Union is in as bad a shape as some people tend to believe. Beyond the turmoils and troubles of today are signs of change that can signal strength for the future.

But - as always - it requires the right policies. And they are not always in place.

In Brussels, the politics of the European Union is driven by the politics of the different member states. And sometimes this leads things off in directions that are obviously very wrong.

In some member states there is great agitation over the rapid rise in the import of T-shirts and underwear and similar things from China in the beginning of this year. Previously there were limits, but now trade is free. It didn't come as a surprise - the decision was taken no less than ten years ago.

This has lead to the European Commission looking into whether action needs to be taken against the Chinese in this sector, and in order to avoid such action the Chinese authorities have introduced some sort of export fee.

All this would have some logic if we saw a critical part of the economic future of the European Union as being the manufacturing of T-shirts and underwear. And this would of course signal the demise of any dream of being in the top of the global league in terms of economic and social development.

The future of the European economy is to produce innovative services and innovative production solutions to an increasingle globalized world. We need to move from low-cost producing to high-clasas and high-cost services.

But the very same forces that are skreaming over T-shirts from China are often the ones screaming over the liberalisation of trade in services proposed in the so-called service directive.

There is some logic in the madness: they see Europe as continuing with T-shirts, while not developing the competitive service sector that obviously would benefit all and make Europe more competitive. As said - it's madness.

If the somewhat pessimistic mood in Brussels should be broken, it will require a political leadership that clearly takes issue with madness of this sort. It's not a European Union drifting under populist pressures we need, but a Union with the will and the ability to give leadership for the future.

Let the Chinese and whoever wants supply us with cheap and good underwear. But let us develop as global first-class service providers.

Tuesday, May 24, 2005

Alternatives in Germany

Two days after the drama in Germany, the alternatives for the future are beginning to be somewhat more clear.

On the non-socialist side, it is obvious that CDU and CSU will nominate Angela Merkel as their candidate for chancellor the coming Monday. Bavarian PM and CSU Chairman Edmund Stoiber evidently want's to be part of the team, and is busy negotiating the conditions.

It's also clear that the aim is to form a coalition government between the CDU/CSU and the liberal party FDP. In a way, the FDP has cleared the way for this by making clear that its parliamentary leader Wolfgang Gerhardt will emerge as the contender for the position of foreign minister. He is widely seen as a safe pair of hands on these issues.

On the other side there is more of drama. Tensions inside the SPD was illustrated when left-wing former SPD Chairman and finance minister Oscar Lafontaine left the party.

And it's clear that the SDP will not campaign together with the Greens in any sort of way. Suddenly, there is no love lost between them.

A subtle reason for this is that Gerhard Schröder can't really combine his motives for going to early elections with a continued commitment to a red-green coalition. He claimed - rightly! - that it would be impossible for a red-green government with a CDU/CSU majority in the Bundesrat second chamber in which the state government are represented.

This argument, taken seriously, rules out a red-green coalition even in the event of the SPD and the Greens achieving a majority in the Bundestag after the election.

The only credible alternative in such a case would then probably be a grand coaliton between the SPD and the CDU/CSU. No one really wants to talk about it, but that seems to be the true alternative to a government between the CDU/CSU and the FDP.

So oder so - we are heading for a rather dramatic political change in Germany. It will have repercussions throughout Europe.

Sunday, May 22, 2005

Historic Red Green Collapse

Home | Deutsche Welle

The elections in Nordrhein-Westfalen - the biggest state of Germany, with 18 million inhabitants - turned into catastrophy for the social democrats SPD and the red-green coalitions in Dusseldorf and Berlin.

SPD registred their worst election result in the state for 50 years, and now have to leave the state government they have been in for no less than 39 years. It's quite something.

There is little doubt that what proved the undoing of the red-greens was their failure to deliver on their promises on employment. In the industrial hearth area of Germany, unemployment remained very high. In its true bastions, the SPD failed on its number one issue.

They could not give convincing answers to the worries that people had for the future in our increasingly open and increasingly changing world. Their old stories had no relevance in a new situation.

In a surprise move, Chancellor Schröder said that he will now seek new federal elections instead of the slow march to an almost certain political death in the regular September 2006 elections. He obviously made the assessment that the aftershocks of the NRW election would not only tear his SPD apart but would also make it de facto impossible to conduct government policy in the coming year.

It's not entirely straightforward under the German constitution how this can be done. A similar move was done in 1982, but wasn't entirely uncontroversial. We'll see.

A quick opinion poll just hours after the announcement on new federal election indicated that 67 % thought it was a good idea, and that 70 % believed it was going to work out to the benefit of the opposition.

What we have seen in Nordrhein-Westfalen tonight is thus in all probability the beginning of the end of red-green rule in Germany with important ramifications for all of Europe.

But nothing can be taken for granted. The opposition in CDU and CSU was taken by surprise along with everyone else, and will now have to agree very fast on a number of issues.

The first and most important is who will be their candidate for chancellor.

In all probability, it will be the CDU leader Angela Merkel. A girl from former East Germany, her constituency is as close to Sweden as one gets.

It's only a question of how long it will take for Bavarian Prime Minister Edmund Stoiber and CSU Chairman to announce that he support Angela Merkel. The sooner, the better.

But then CDU and CSU has to come together on a credible and clear programs for reforms in Germany and Europe. Tensions between the two parties on this have been much too obvious during the past year, with the CSU being more reluctant to face thre though issues that have to be tackled.

Now, these tensions have to be overcome if the momentum from tonight shall be carried forward to and during a federal election campaign sometimes during the autumn.

And it will also be of importance to see how the SPD decides to shape its political profile during the coming campaign. The strident anti-capitalist message launched in the NRW campaign obviously did not help, but that's no guarantee that this neoleftist approach will be abandoned.

It will be an unusually interesting summer in Germany.

The Middle East in the United States

Aljazeera.Net - Sharon to meet US Jews on Gaza plan

As one opens The New York Times this morning one encounters no less than two full-page ads in which different Jewish organisations is welcoming Israeli Prime Minister Ariel Sharon as he arrives here.

Sharon himself will not visit the White House - he's here to get support from the Jewish organisations for his plans to disengage from Gaza - but his advisors will be busy having talks.

The reason is that on Thursday it is Palestine President Mahmoud Abbas that will be the guest of President Bush. It will be a most important meeting.

There is a clear need to give a stronger impetus to the work towards peace in the region.

Both Ariel Sharon and Mahmoud Abbas have been forced to devote a large part of their energies the last months towards controlling the respective fundamentalist forces in their societies. It's not been easy, but it's moving in the right direction.

In Palestine, everything is now focused on the July 17 parliamentary election.

Judging by some of the local elections held, Hamas is likely to do rather well in these. This is also resulting from a perception that, once again, Mahmoud Abbas might be let down by Washington and Tel Aviv in his search for peace.

This makes the Thurday meeting in the White House extremely important. It is important that President Bush, in the same way as he went far in demonstrating his support for Prime Minister Sharons disengagement plan, is ready to announce concrete policy steps to support the Mahmoud Abbas policy of reconciliation, reform and peace.

So, this week the politics of peace in the Middle East will be played out here in New York and Washington. Sharon and Abbas will be dancing around in different circles.

Europe is slightly at the sidelines. But there is a much higher degree of consensus between Washington and Brussels on policy than was the case a year or so ago.

Let's hope that things can be moved forward.

The New World: Gotland versus China

Navy Times - News - More News

Soon, we will see a submarine of the Swedish navy transiting the Panama Canal for the first time ever.

It's part a deployment that vividly illustrates the new global strategic realities and the discreet role that even Sweden plays in these.

The submarine Gotland is on its way from the Swedish naval base area of Hårsfjärden outside Stockholm to the vast US navy base in San Diego in southern California. It left on May 12th, and is expected in San Diego in mid-June.

Its journey is part of a much bigger story.

Back in the days of the Cold War and the Soviet Union, the role of the security policy of Sweden was fairly obvious, although not often explained to public opinion.

We built impressive military forces to defend ourselves, not the least against a Soviet attack across the Baltic. And the submarine force was a very crucial part of that effort.

Over the decades, we developed, built and operated what was probably the very best submarines in the world for the sort of shallow waters that the Baltic is. They were - and are - truly formidable systems.

We also played a more discreet role in intelligence gathering and intelligence exchange. The island of Gotland was a solid intelligence gathering platform.

Now, the world has changed beyond recognition. And the role of Sweden is changing fast.

The journey of Gotland is intimately related to the military rise of China and the nervousness this causes in the US.

China is busy buying advanced submarines from Russia and building up advanced capabilities in this respect.

It has already bought four Kilo-class submarines, designed by the Rubin design bureau in St Petersburg and mostly built at the Admirality yards in the same city.

Now, a further eight submarines of the 636 class - a more advanced version of the Kilo - will be delivered. They are also equipped with advanced anti-ship missiles in addition to its torpedoes.

Again, it's the Admirality yard in St Petersburg that are building, and they are tested out in the waters of the Baltic.

The US Navy got really scared about the capabilities of modern conventional submarines also when they exercised against the Swedish submarine Halland in the Mediterranean some years ago. Their defences simply didn't work against advanced systems like this.

And now they see the Chinese starting to build up capabilities that over time might become as capable and as threathening.

This will have profound strategic implications. If US aircraft carriers can't get sufficiently close sufficiently fast to Taiwan, they can't defend the island. The threat from Chinese submarines might force them to stay at a distance, or to go much slower.

It changes the entire political and military equation in the area.

That's why the US asked Sweden to borrow a submarine to start to train against the Chinese threat they see emerging out of the shipyards in the Baltic.

Gotland will soon operate under Swedish flag as part of the command of Submarine Squadron 11 in San Diego. It will work with units of the US Third and Seventh Fleets in the Pacific in order to train their skills in meeting the emerging threat.

It's a truly unique assignment that should be seen against the background of the huge strategic shifts underway - and the sometimes discreet way in which also Sweden is part of these.

The island of Gotland was of great strategic importance in the old world. Now the submarine of Gotland is of obvious strategic significance in the emerging new world.

Friday, May 20, 2005

China, the Internet and Democracy

Xiao Qiang: The Development and the State Control of the Chinese Internet :: China Digital Times (CDT) 中国数字时代

Building a new Chinese Wall in cyberspace is proving to be a rather mammoth undertaking.

Nevertheless, this is what the authorities in China are trying to do. Very large resources evidently goes into this effort, but ultimately it seems bound for failure.

Xiao Qiang is Director of the China Internet Project at the University of California in Berkeley, and recently detailed his views on the ongoing Chinese efforts.

It's interesting in its details - but even more in its conclusions.

Eventually, says Xiao Qiang, the attempt will fail, and the spreading of information through the Internet will help to facilitate the transition of China to a more open and democratic society.

That's when the real peaceful rise of China will start!

We have seen what 20 million people of Taiwan can achieve in a free and democratic Chinese society.

In the rest of China, there are app 65 times as many people.

Think of 65 Taiwans in the global economy, and today's trade disputes over T-shirts will look like peanuts.

An Amazing and Beautiful World!

It's a truly amazing time we are living in!

I'm sitting high up in the sky passing one of the most beutiful sights this world of ours has to offer - the Southern tip of Greenland.

It's a cloudy day over the North Atlantic, but around the tip of Greenland the clouds have broken up and you can just enjoy the beauty of the barren cliffs, the frozen heights and the deep penetrating fjords.

It's a scenery with few rivals.

Add to all of this that modern technology has now brought the Internet to long-distance flying. Down there is nothing in terms of modernity. Up here there seems to be just about everything.

The display says that we have three hours and twenty-eight minutes to go until touch-down at Newark airport by New York.

It was down here that the Viking sailor Leif Eriksson on a windy day somewhat more than a thousand years missed Greenland and ended up at an even more far-away and unknown coastline.

Eventually, they followed it down to what they then called Vinland. Columbus was nowhere to be seen.

Chaos in the Kremlin?

It's increasingly strange news coming out of Russia these days. Signs are multiplying that a state of chaos might be emerging in the Kremlin.

After having been delayed until after the May 9 celebration, the sentencing of Mikhail Khodorkovsky was scheduled for Monday of this week.

But still - and it's Friday today - we haven't seen more than Judge Irina Kolasnikova mumbling through limited sections of the verdict in short daily doses. It's a parody of the worst sort. On present trends, this parody might well go on all of next week until she starts to approach the final and crucial parts of the lengthy text.

It is very hard to interpret this in any other way than as a reflection of a genuine political uncertainity on how to handle the case. It might well be that she doesn't know what will be on the final pages of the document she's mumbling through. Instructions have yet to arrive.

That there is nervousness was obvious from the hasty announcement Tuesday on the abandonment of the plan to merge state oil company Rosneft with the gas giant Gazprom.

This plan had previously had the explicit endorsement of President Putin, but was challenged by a security-associated part of his staff that wanted primarily to get their hands on the assets of Rosneft.

It become a confict in the higher reaches of the Kremlin - between Chief of Staff Medvedev as Chairman of Gazprom and Deputy Chief of Staff Sechin as Chairman of Rosneft - which paralyzed the entire issue.

The pattern of the last year is that when there is some profoundly bad news in Russia, the Kremlin suddenly sees the need to do something to reassure the international markets and investors.

Following this pattern, and with intense global attention on the mumbling lady in the courtroom, a decision was hastily taken to resolve the conflict over Rosneft and Gasprom.

So it was announced that there will be no merger, that the Russian state will buy a share of Gazprom for USD 7 billion, and that there will thereafter be a complete liberalisation of the shares in what will then be a clearly state-controlled company. And Rosneft will be a separate company that will eventually be open for minority private ownership as well.

In itself, this was good news, and the markets reacted accordingly.

But it was obviously a decision taken in haste, details might yet change, motives why it was taken now much too obvious - and it demonstrated that President Putin isn't necessarily the one that carries the day on vital issues in the Kremlin.

Slightly chaotic, the entire thing.

Wednesday, May 18, 2005

Betraying a Revolution?

Betraying a Revolution

News coming out of Kiev is not too encouraging these days, particularly in terms of the economic policies pursued by the Timoshenko government.

Part of the outburst of populist policies can be explained by the up-coming elections to the Rada in March of next year. It's simply necessary for the Orange revolution coalition to secure a majority there - otherwise everything is lost.

But part can probably be explained by an inability of the European-minded part of that coalition to set the proper strategic direction for the policies to be pursued.

It seems as if revenge against the old has been given prominence over reform for the new in the policies of the governnent.

With Yulia Timoshenko increasingly being the most popular player on the scene, there are also increasing question marks concerning where she wants to go. She's a very determined lady - I had lunch with her a month or so ago - but her horizons are somewhat limited due to her lack of international experience and contacts.

In today's Washington Post, Anders Åslund has a gloomy piece on what's going on.

That's good.

Bad publicity in Washington might focus the minds in Kiev. And that might cause them to start to discuss the radical corrections of course that will be imperate at the very latest after the 2006 elections.

Estonian and European Borders

CARL BILDT: Eesti-Vene piirilepe on Euroopale oluline - Eesti P�evaleht Online

The signing of the border agreement between Estonia and Russia - which I have commented upon earlier - continues to generate debate, and I was asked to contribute with my views in the leading Estonian daily Eesti Päevalehti:

These days it is 100 years since the peaceful dissolution of the union between Norway and Sweden, and the modern emergence of Norway as an independent nation.

The union had been an extremely loose one, with very few common institutions or policies. But the dissolution was nevertheless dramatic. Soldiers were mobilized on both sides.

One of the keys to the peaceful dissolution of the union and the peaceful coming together of the new neighbours in the decades that followed was that border issues were sorted out very quickly.

In theory, they could have been tricky. In medieval times, the present Swedish provinces of Jämtland and Härjedalen had been more Norwegian than Swedish. And there were some outstanding border issues in the sea.

But it was quickly decided that the present and future is more important than the past. The border was quickly ratified as it was at the time – and we have lived happily since then.

Few things can poison political relations like open border issues. They can be used by irresponsible forces in both domestic and foreign affairs in ways that are truly destabilizing.

Our new Europe is a Europe without border disputes. History- old disputes between France and Germany have been settled. Possible open issues in Central Europe have been solved. Finland’s border with Russia – immensely painful as the loss of Vyborg was – is disputed by no one. Denmark’s border with Germany – fought over during centuries – is now seen as natural.

It’s only in the Balkans there are some still open issues. But everyone is determined to settle them as soon as possible. Otherwise European integration will not work.

I salute Estonia as its long-standing work to get the border treaty with Russia signed will now be crowned with success.

For too long it was de facto Russia that wanted to keep the issue open in order to be able to accuse Estonia and play politics against the Baltic states at different international meetings. Every government in Tallinn that I can remember has made it clear that they were ready to sign, while Moscow was not.

Although this issue has been settled in reality for a long time, it is still an important contribution to European stability that it will now be formally signed.

Lithuania already has its treaty, and I can see no reason why not Latvia should be ready to follow Estonia, thus finalizing the search for stability anchored in internationally recognized borders in our part of Europe.

Then we must move on with all the truly important issues on our common agenda – how to promote peace, prosperity and freedom for all in our Europe. A lot has been achieved – but a lot remains to be done. Let’s not be distracted and bogged down by the issues of the past.

Tuesday, May 17, 2005

No Requiem for the Dead

Institute for War and Peace Reporting

Gradually, we are getting a clearer picture of the massacre as Uzbek security forces retook the city of Andijan.

The linked report gives a rather horrible picture of the immediate aftermath of the massacre.

We know from his own official bulletin that Uzbek President Kamirov had flown to the city, and that it was he who gave the orders to the security forces after attempts at talks with those that have taken posession of government buildings had broken down. He returned to Tasjkent when the mission was finished.

He will never be able to free himself of direct responsibility for what happened.

He should be treated by the international community accordingly.

Monday, May 16, 2005

A Day of Reckoning Will Come

A Day of Reckoning Will Come

Today we will know what sentence the disciplined court in Moscow has decided to give Mikhail Khodorkovsky.

It was a political trial from the very first minute, and it will undoubtedly be a political verdict.

I vividly remember the day he was arrested. Black commandos stormed an aircraft he was using in the early morning hours at the airport in Novosibirsk. He was on his way to Moscow and a meeting that I was attending as well.

There was profound shock among the other Russian business leaders there. Some feared an outright return to Soviet days. Several started to speak about what their parents had told them about the 1930's. No one doubted the hand of the Kremlin behind the arrest.

Since then we have seen the carefully staged trial. And it was certainly no coincidence that the verdict was delayed until after world leaders had left Mocow after the May 9 celebrations.

My own bet is that the Kremlin will do whatever it can to keep Khodorkovsky in prison as long as Putin is in power.

To free him would simply be too politically dangerous. He might emerge from prison not as a defeated, but as a strengthened, personality.

But we'll see.

In the meantime, the editorial in todays Moscow Times that I have linked to is certainly worth reading.

Sunday, May 15, 2005

Ferment in Ferghana

Ferghana.Ru Information Agency

It's difficult to know how many were killed when Uzbek security forces retook the city of Andijan in the Ferghana valley on Friday. New reports are mentioning numbers up to 500 killed and several thousand wounded in thre fighting.

It is highly likely to have been a very brutal operation.

President Kamirov is among the most brutal and authoritarian of leaders of Central Asia, and he is likely to authorize whatever violence he believes it takes to prevent a repetition in Uzbekistan of what happened recently in Kyrgyzstan.

Indeed, the sequence of events that lead to the fall of the regime there started in the city of Osh, which just happens to be very nearby Andijan in the Ferghana valley.

The Ferghana valley has always been important. Once upon a time, it was a key part of the Silk Road between China and Europe. Later, the fertility of its soil drew invaders and empire-builders of all sorts.

It was conquered by Russia in the 1870's, and then forcibly incorporated in the Soviet Union. Stalin dedided to split the valley between three republics, and with the demise of the Soviet Union they become independent states. Most of the valley, however, is in Uzbekistan.

Its mix of nationalities and traditions has made it vulnerable to ethnic strife, and there have been outbursts of national violence during also the past decades. The Soviet Union had a crack airborne division stationed there - just in case.

The last decade has seen the economic situation in the valley deterioating. There are reports of unemployment well over 50 %. At the same time the population is increasing very fast.

Add to that an amount of Islamist agitation linked to groups that also acquired prominence during the wars in nearby Afghanistan. And note that some of the drug networks from that country is passing through the valley.

It doesn't require much to get a mix like that to start being explosive in an ethnically mixed place like the Ferghana valley.

We are now likely to see a phase of extreme repression setting in throughout Uzbekistan - as if things weren't bad before. Moscow is likely to approve and support, and Washington might well have difficulties deciding which leg to stand on.

Hard repression might work - for a while.

Or it might not - in which case the valley and the region has better fasten the seat bealts...

Saturday, May 14, 2005

A Successful Palestinian State

RAND | News Release | RAND Studies Make Recommendations for a Successful Palestinian State

The RAND Corporation has just published the result of a very major study of the possibilities of building a succesful Palestinian state.

There have been different studies on different aspects of this issue before, but nothing as comprehensive as the RAND study. A follow-on volume to those already published will deal more in detail with the different security issues.

The broad conclusion of the study is that it could be done, that it's critical that such a state gets a contigous territory, that it will require substantial investments from the international territory and that it will indeed contribute to the stability of the region, including Israel.

The demographic problem is one of the major challenges. Even if one excludes Gaza, a Palestinian state will move towards a population density higher than Bangladesh. It will require major efforts to create jobs and hope for the future for all of them.

Failure will fuel resentment and rage - with all its consequences.

The study has been presented extensively in Washington and Brussels as well as Jerusalem and Ramallah, and will be the subject of follow-on discussions in the months to come.

At the moment, the challenges of state-building in Iraq are dominating the news headlines from the region, with the security situation deterioating at the same time as the new government starts working and discussions on the new constitution start in earnest.

But the challenges of state-building in Palestine should not be neglected. Proper policies need to be prepared.

We must succeed with the state-building efforts in both parts of the ancient Fertile Crescent.

Peaceful Rise In China?

RAND_CT240.pdf (application/pdf Object)

For all the talk about the peaceful rise of China, it is important to focus also on the peaceful rise in China.

Over the years there has been a constant increase in what the authorities refer to as "mass incidents" of different sorts.

The Ministry of Public Security - a powerful body - has released statistics that talk about a annual rise in such incidents of the order of 10%. From 8 700 in 1993, they recorded 58 000 cases in 2003.

A closer examination of what's happening and its significance can be founded in the presentation by researchers from the RAND Corporation that I have linked to.

I don't think there is any reason to expect anything too dramatic to happen immediately - but I do think there is reason to be aware of the tensions in the system in particular if we were to see economic growth starting to falter, inflation coming back or something of this nature.

Friday, May 13, 2005

Narva and Peipus

It's a good piece of news that Estonia and Russia will sign the agreement on their state border as well as the demarcation of the sea in the Narva Bay in the Gulf of Finland.

It's taken a long time to get to here. Most of the blame for that falls on the Russian side, but that's now history. There seems to have been a belief that by holding up agreement on the border one could slow down the process of Estonia entering NATO and the European Union.

But that was a mistake. And now Moscow seems intend to sort out the issue.

In the beginning - years ago - there were those on the Estonian side who were less pleased as well. The border as defined in the 1920 Dorpat peace treaty included in Estonia some minor bits of territory that now belong to Russia.

But these areas have been solidly Russian inhabited for a long time, with their citizens having no wish whatsoever to change that. The issue was dropped already by the first Mart Laar government in the early 1990's.

With the Estonian-Russian border issue being sorted out, and the one with Lithuania years ago, it's only the Latvian one remaining. I find it difficult to see that it will not be possible to sort it out fairly soon following the model and the principles applied in the Estonian case. The issues involved are the same.

The border between the East and the West of Europe will now follow the Narva river. There, the Teutonic castle in Narva looks across the border towards the East, and the Russian fortress of Ivangorod on the opposite shore looks towards the West.

Between them, traffic across the bridge is intensifying. It's the peaceful trade and interaction that is the wave of the future.

Thursday, May 12, 2005

An Emerging Chinese Threat?

The Atlantic Online | June 2005 | How We Would Fight China | Robert D. Kaplan

Across the Baltic from where I'm sitting in Stockholm, the shipyards in St Petersburg are busy building advanced submarines not for the Russian but for the Chinese navy.

And for the Indian and Iranian navies, by the way.

There is no doubt that China has started to invest heavily in the modernization of its obsolescent armed forces, and that this involves the adding of capabilities - among them advanced submarines - that they never had before.

But that this mean that there is a threatening Chinese military giant appearing on the horizon?

Increasingly, that seems to be the mood in the United States. The different debates there on China borders on an obsession. If it's not the trade deficit, it's the military dimension, the Taiwan issue, the currency regime or the Chinese role versus North Korea.

There is no doubt that there are genuine challenges ahead. China's peaceful rise, to use that official phrase, is still a rise that affects all the power relationships in an increasingly important part of the world. And one in which the United States remains the prime strategic stabilizer.

In the latest issue of always-worth-reading Atlantic Montly, Robert Kaplan lays out the case for a coming military rivalry with China.

In his view, the US military contest with China in the Pacific will define the 21st century, and China will be a more formidable adversary to the United States than the Soviet Union ever was.

Robert Kaplan is a prolific, well-informed and influential writer who has covered most issues of relevance when it comes to peace and war in our times. He's worth reading.

Another issue is whether these fears aren't somewhat overblown. I tend to believe that we are overlooking significant internal weaknesses in the Chinese development. We might not see the undisturbed and smooth rise to power and pre-eminance that Kaplan and others are forecasting.

But whatever will happen in the future, the debate now is undoubtedly a most important one.

Meanwhile, the shipyards in St Petersburg are kept busy.

Tuesday, May 10, 2005

Diplomatic Nuclear Meltdowns Ahead?


Will North Korea explode some sort of nuclear device? Will Iran resume the pursuit of the enrichment of highly enriched uranium?

Well, judging by the reports one reads it sounds as if both of these developments might be imminent. If that turns out to be the case, we are facing a serious double crisis for the efforts to prevent the further spread of nuclear weapons.

The North Korean issue is, in some ways, the most straightforward. It has been reported for years that North Korea has a rudimentary nuclear capability. There is talk of enough weapons-grade plutonium for perhaps up to six devices.

But a device is not necessarily a weapon. To get it to a target requires either to get it down in terms of size and weight or to develop very large weapons carriers of different sorts. It does not seem likely that North Korea has succeeded in either of these respects.

It is likely that they have the capability to explode a device. To do so would be a powerful political statement with powerful political effects. Strictly militarily, it wouldn't change that much.

Washington is highly frustrated with the failure to bring North Korea back to the six-party talks, and not the least with the somewhat mediating role that Beijing is playing.

Talks the last few days between President Bush and the leadership in Beijing are likely to have been an attempt to get the later to be far more active in stopping Pyongyang from a nuclear test and getting them back to the negotiating table.

So far there are no signs of progress. It is not inconceivable that Pyongyang actually intends to raise the stakes though a test. But it's equally conceivable that they are just raising the stakes in the diplomatic game.

They want a bilateral deal with Washington. Nothing more and nothing less.

Iran is somewhat but not entirely different. They are facing presidential elections in June, and there are certain to be different views in Teheran on how to go forward. No one really wants to be seen as weak prior to these elections.

News reporting is somewhat superficial, and the technical issues involved fairly complicated, but it does not look to me as the Iranians have announced that they will start a full uranium enrichment program.

They are taking a step - bad enough! - but they are deliberately not going the whole way. They want to pressure the Europeans and the Americans, but they are keeping all doors open.

Some in Teheran - not all - are most probably waiting for the offer of a grand bargain in which they get political recognition of their security needs, opening to the world through the WTO and access to technology, also nuclear, in exchange for a comprehensive and intrusive international monitoring of their entire nuclear program in order to gurantee its peaceful nature.

That would not be a bad deal, although some would clearly have difficulties with it.

It will be extremely important to keep heads cool in the diplomatic brinkmanship we might now be entering in both of these areas. Everything isn't lost yet - in fact, there might be new opportunities for genuine deals opening up.

Farsighted statesmanship is called for. Everywhere.

Proud in English

www.bundespraesident.de: Der Bundespr�sident / Home

Well, now there is a version of German President Horst Köhlers address to the special session of the Bundestag this Sunday available in English as well.

Worth reading - in English as well as in German.

Monday, May 09, 2005

A Funeral in Niksic

One of the world's most closely watched private funerals took place this Saturday in the small town of Niksic in northwestern Montenegro.

It was the final farwell to Jovanka Karadzic. She died in Niksic earlier last week after having been sick for some time. She was 83 years old, and her funeral was attended by high-level Orthodox officials as well as different former politicians.

This, of course, had far less to do with her than with her eldest son Radovan. But he, hardly surprising, was nowhere to be seen.

Radovan Karadzic has succesfully evaded the more or less serious efforts of the international forces in Bosnia to catch him since late 1997.

Prior to that - I know, since I was there - he made no such efforts because he knew that there were no attempts to get him. As a matter of fact, he lived most of the time in his own house in Pale, not far from Sarajevo. It wasn't too difficult to see when he was there and when he wasn't.

Since 1997 his life has been somewhat more difficult, but he in spite of the difficulties he has managed to avoid capture. He has been helped by people obviously professional on these sorts of things, but also by the rather miserable international efforts, with one arm sometimes not aware of what another was doing.

Strangely enough, he seems to remain in the area in which most people have always suspected that he is. The Karadzic family has a legendary name - well before Radovan - in the parts of Montenegro bordering to Bosnia, and the southeast of Bosnia is a difficult area in many different respects.

The mountains of Herzegovina and Montenegro has a tradition of hiding fugitives on the run from far-away authorities. Radovan was not at the funeral in Niksic, but I bet he wasn't too far away either.

Rumour has it that the Croat ex-general Ante Gotovina is also moving around in the mountaneous borderlands of Herzegovina. If Radovan is the eastern Herzegovina area and adjoining countries, Ante might well be spending his days roving western Herzegovina and the countries covering that area.

This summer, it is ten years since the deeds for which they have been indicted by the International Criminal Tribunal for Former Yugoslavia in the Hage. The same applies to fugitive ex-general Ratko Mladic.

It's high time they are all given a somewhat more permanent address than they are having at the moment.

Sunday, May 08, 2005

Proud of Germany

www.bundespraesident.de: Der Bundespr�sident / Home

These are the days of the speeches reflecting on the past and looking towards the future as the 60th year anniversary of the end of World War II in Europe is commemorated.

Today, the President of Germant Horst Köhler addressed a special session of the German Parliament in Berlin. It's a wideranging speech well worth reading, although there is still no English version available on the net.

Obviously, much of the speech deals with what he calls the "moral ruin" of Germany between 1933 and 1945 and the sufferings those years brought to the peoples of Europe, the German one certainly not excluded.

But he ends by looking forward and says that the present generation has reasons to be proud of Germany in the view of its achievement of building a stable democracy and a land governed by the rule of the law as well as achieving reconciliation with its neighbours.

Freedom Words from Riga

President Discusses Freedom and Democracy in Latvia

President Bush's speech in Riga on Saturday was undoubtedly a major one, laying down a policy line concerning both the past and the future of Europe that is unlikely to earn him much applause within the walls of the Kremlin of today.

That he proceeds from Moscow to Tbilisi in Georgia, where he is scheduled to have a major speech at Freedom Square, is unlikely to improve things from the Kremlin perspective.

Friday, May 06, 2005

It's Now The Real Story Starts.

I was sitting in the rather pleasant surrounding of Venice following the counting of the votes in the general election in the United Kingdiom.

It seems the result is one that leaves everyone slightly dissatisfied and no one really happy.

The Labour party had to accept a rather sizeable reduction in its parliamentary majority. If you look at absolute figures, only 22% of the electorate decided to go and cast their vote for Labour, which is the weakest support for any government in the UK in living memory.

But, in spite of all this, Labour did secure a third term in command of a majority in the House of Commons.

One might note, however, that during the Conservative "era" between 1979 and 1997, support for the government held up rather well until the collapse in the 1997 elections.

In the case of Labour, the elections since then has seen a gradual reduction in its support.

This has however not translated into support for the Conservatives. They do claim that they made gains, but in essence they failed. They seem to have mobilized their core supporters, but failed to attract very much else.

When I speak to UK business leaders - a number of them happen to be at the same event in Venice as I am - I find them uniformly taken aback by the raw tone in the Conservative campaign. These natural Conservative supporters have a very hard time seeing the Conservative party as their political home.

In one way, this is a good sign. The much too obvious effort to play at anti-immigrant sentiment simply did not work. Some of it was due to pre-emption by Labour, but a substantial part was due to people simply not wanting to associate themselves with these kinds of policies. Good.

Another good sign was the miserable showing of the fervently anti-European UK Independence Party. In essence, thet got nowhere. Good.

The the Labour party, we are now seeing the beginning of the end of the Blair era. If there is a Yes to the EU Constitutional Treaty in France on May 29th, and in the Netherlands on June 1st, everything will be geared to whether Blair can win the referendum in the UK likely a year from now.

But therafter - at the latest - it is likely to be another Labour part under another leader.

For the Conservatives, the next few months will be crucial. They just might decide to enter the modern world inhabited by modern, open-minded and outward-looking people. It will be a break with their recent past - but a necessary one if they are going to avoid the road to oblivion in the years to come.

The shape of the Labour party after Blair and whether the Conservatives get their act together and enter the modern world - these are the real stories out of the UK that will count in the years ahead.

Meanwhile, the sun sets over Venice...

Wednesday, May 04, 2005

To Riga with Love

Welcome to LETA

On Friday, President Bush touches down on Riga airport in Latvia and thus begins his new tour of different European countries.

The centrepiece of this trip is his participation in the celebrations in Moscow on Monday of the 60th year anniversary of the defeat of Hitler's Germany.

It was on May 9th 1945 that a full and final capitulation of German armed forces in all theatres of war was signed at the Soviet military headquarters in Berlin-Karlshorst. The war had finally ended.

A capitulation had in fact already been signed on May 7th at General Eisenhowers forward headquarters in Reims. Sitting at an old naval base by Flensburg just by the Danish border, the German leader after the suicide of Hitler, Admiral Dönitz, had been desperate to sign a capitulation first with the Western Countries.

But Stalin didn't like this Reims capitulation too much, and the entire thing had to be repeated in Berlin under Soviet auspicies.

The peoples of the then Soviet Union suffered beyond belief during this war. It's estimated that 27 million people lost their lives. This is many times more than all the Western allies taken together. A country like the Belarus of today lost nearly a third of its total population.

These sacrifices and this suffering is worth to be honoured and remembered. That's why it's correct for also Western leaders to go to Moscow.

But the problem is the way what happened is often presented by President Putin. For half of Europe it wasn't liberation - just the transition from one nightmare to another. This needs to be respected as well.

In this letter to Latvian President Vike-Freiberga prior to his arrival to Riga, President Bush states clearly that he shares this view, and talks about the Soviet occupation that followed immediately after liberation from the Nazi horrors.

It will be most interesting to see to which extent other Western leaders are prepared to express themselves on the same issue.

After being in Moscow on Monday, President Bush proceeds to Tbilisi in Georgia to give support to the new democratic reformers there. Neither the Riga nor the Tbilisi trip are likely to have been met with applause in the Kremlin.

That's probably also why a quick trip to the Netherlands was added. President Bush goes to the Hague from Riga, and from there to Moscow. It's the Queen's jubilee, but I guess the real reason is that by going directly from Riga to Moscow some Russians would simply have been too irritated.

It's worth noting that the trip to Riga is President Bush second visit to the Baltic countries - two years ago he was in Vilnius in Lithuania.

For a country like Sweden it's worth noting where the centre of political gravity in the Baltic region is these days.

Tuesday, May 03, 2005

To Where Goes Norway?

This year it is 100 years since the peaceful dissolution of the very loose union between Sweden and Norway that had existed since the end of the Napoleonic wars nearly a century earlier.

Up until then, Norway had been ruled from Copenhagen as a part of Denmark for centuries. But Denmark ended up on the wrong side of the cataclysm of Europe of those days, while Sweden ended up on the other side. As Russia managed to secure the sovereignity of Finland, which up until then had been part of Sweden, Norway was then given to Sweden as some sort of compensation.

But Norway was never ruled from Stockholm in the way it had been ruled from Copenhagen. The two countries had the same king and the same foreign policy, but that was it. Democracy came to Norway well before it come to Sweden, the country decided all its domestic affairs on its own, and even built up its own defence forces, including fortifications along the border with Sweden.

Nevertheless, the union was unsustainable, and was peacefully dissolved in 1905, thus giving Norway its modern independence.

To celebrate this, a number of seminars are being arranged. I have already spoken to one in Copenhagen, and today I have spent the day in Oslo on another one. They are useful fora for reflections not only on a common past in the Nordic area, but also on common challenges in the future.

But I was struck by how Norway fels lost in the new Europe. Always a staunch member of NATO, it now feels that NATO matters less, and that Norway matters less within this NATO. Parliamentarians at the seminar spoke about their feeling of Norway being marginalized in foreign and security affairs in Europe.

Increasingly, they are starting to look towards the European Union again.

They have tried twice before. But by thin margins, referenda in both 1972 and 1994 have failed to produce sufficient support for membership. There was always the feeling that one could do at the least as well outside.

There was the fish, the oil and... NATO.

But now all of this is starting to change. The fish needs to be exported, and the rest of Europe is the key market, although access to that market is proving increasingly challenging. And NATO isn't what it used to be in providing an important fora in foreign and security affairs for Norway.

We'll see where this takes our Norwegian neighbours during the years to come. The elections in September for the Storting will either reaffirm the existing centre-right government or pave the way for a new one of the centre-left, with opinion polls at the moment indicating that the later alternative is the more probable.

But on these bigger question it's unlikely to make much of a difference. The centre-left is as split on the European issue as is the centre-right. And it's this split that leads to the progressive further marginalization of Norway in Europe.

Sooner or later this will change. The union with Sweden did not work, but to be part of a union with all of Europe is clearly the road for the future. I'll put my money on Norway submitting an application for memberwship of the European Union within the next five years.

Towards Thursday

Economist.com | Our British election endorsement

The election campaign in Britan is entering its final and decisive days. On Thursday the choice will be made.

It has been a lacklustre campaign. Turn out on polling day might well be lower than what one is used to. Neither of the parties have managed to generate the enthusiasm necesssary to create a real bandwagon effect.

So far, one should add. Elections are always decided on polling day. Never before.

In general terms is seems as if the country has lost faith in Tony Blair, not the least because of the way he handled the run up to the war in Iraq, but that it is not ready to put its faith in the Conservative leader Michael Howard.

The one has lost the thrust of the nation - the other has failed to gain it.

Two of the internationally most prestigous publications - The Economist and Financial Times - have now both reluctantly endorsed the Labour Party and Tony Blair. It's reluctant endorsements.

The European policies of the Conservatives contributes to the scepticism against them. Financial Times describes them today as "impossible and infeasible", and says that they "could plunge a Conservative government into Britain's most severe isolation from the rest of Europe in more than 30 years."

It seems as if the really interesting time in the politics of Britain will start after the election.

There will be the beginning of the change in the Labour party to the post-Blair era. And there will have to be the beginning of a change in the Conservative party towards policies that are both possible to win on and to govern with.

Monday, May 02, 2005

One Year in Europe

One year after enlargement by Katinka Barysch

It's a year since the ten new member countries - from Estonia to Cyprus - joined the European Union. A new chapter in the long history of European integration took its beginning.

When I was in Vilnius in Lithuania last week, the Seimas - their Parliament - had a special session to celebrate what had been achieved during this year.

If we look at how public opinion has changed in the different parts of Europe during this year, it's a story of different trends.

In the new member states, public support for membership seems uniformly to have increased during the past years. It's very noticeable in a country like Poland, where there was a considerable sceptic section of public opinion before.

A concrete expression of this was the decision of Latvia during the weekend to join the so called ERM", which is the antechamber to becoming a full member of the monetary union and introduce the Euro. The move was taken together with Cyprus and Malta, and they then joined Estonia, Lithuania and Slovakia, with all of them aiming for Euro introduction in 2007 or, at the very latest, 2008.

The different steps might be different. But the trend in terms of both policies and public opinion is the same in all the countries. They feel the new opportunities that European Union membership has given them.

In the "old" member states, it seems to be a somewhat different picture. There is a growing apprehension over the effects of increased competition coming from the East of Asia and the East of Europe, and accordingly a certain fatigue with the process of further enlargement. Backward-looking politicians are looking at different ways of curbing the competitive advantages of the new member states.

Taken together, it's a picture of a Europe where change is accelerating, and where the different effects of the enlargement are the key drivers of that change.

It is - as I have written about - the Tallinn-Bratislava process that is starting to transform Europe.

We have only seen the first year.

Sunday, May 01, 2005

Good Morning China!

Front Paget

The remarkable visit of Kuomintang Chairman Lien Chan to mainland China continues.

It is worth noting that the visit has been given blanket and extensive coverage by the official Chinese media. Key parts of the visit have been broadcast live on national TV. Lien Chan was even able - truly unique! - to deliver a speech in Beijing that was broadcast live.

Yesterday he was in the historic city of Xian in the interior of China, as reported by the Taiwan newspaper I have linked to.

He was received by by a cheering crowd of more than 10 000 people that also waved KMT flags.

I very much doubt any such flags have been allowed in China since 1949, and there is no way they would have been seen there now without a high-level decision on the issue.

It seems as if the two great political forces in China during the post-imperial last century are finally coming to terms with each other. Then it remains to be seen which effects this will have over time on the policies of each of them.

One thing is for certain - it will not pass without fairly major consequences.