By Dawn's Early Light

Sec Rice endures European Grandstanding

The Washington Post began the reporting on the United States using European prisons to ferry terrorist suspects to for interrogation.  Today's WaPo story sums up their original reporting and the European response:

"The Washington Post reported on Nov. 2 that the CIA has been hiding and interrogating some of its most important al Qaeda captives at a Soviet-era compound in Eastern Europe as part of a covert prison system that at various times has included sites in eight countries, including Thailand, Afghanistan and several democracies in Eastern Europe. The Post did not identify the Eastern European countries at the request of senior U.S. officials, who said the disclosure could disrupt counterterrorism efforts in those countries and elsewhere and make them targets of retaliation."

The article begins with putting Secretary of State Rice on the hot seat with this opening:

"Rice's tour of Europe has been dogged by questions concerning the treatment of prisoners at secret CIA prisons. She issued a detailed statement on U.S. policy before she left for Europe on Monday, intending to dampen the furor, but there has been confusion in the United States and Europe over its precise meaning."

Poland is one of these countries and the story has been covered well by Beatroot.  The United Kingdom is another, which makes Foreign Secretary Jack Straw's request for US "clarifaction" silly.

Can one honestly think for a moment that the US intelligence agencies are not working in concert with their European counterparts in a fight against terrorism?  Only the most die-hard liberal would think the US is running its own clandestine prisons on European soil without the host government's knowledge.

Fortunately this WSJ Opinion piece puts it all into perspective while declaring the Europeans opportunistic and political cowards:

"One of Europe's moral conceits is to fret constantly about the looming outbreak of fascism in America, even though it is on the Continent itself where the dictators seem to pop up every couple of decades. Then Europe dials 9-11, and Washington dutifully rides to the rescue. The last time was just a few years ago, as U.S. firepower stopped Slobodan Milosevic, who had bedeviled Europe for years.

In return, it would be nice if once in a while Europe decided to help America with its security problem, especially since Islamic terrorism is also Europe's security problem. But instead the U.S. Secretary of State has to put up with lectures about the phony issue of 'secret' prisons housing terrorists who killed 3,000 Americans.

We put 'secret' in quotes because the CIA could hardly carry on operations in Europe without the knowledge of the countries involved. Rather, as Ms. Rice dryly put it, the U.S. often engages "the enemy through the cooperation of our intelligence services with their foreign counterparts." So the so-called "rendition" programs at issue -- involving the transportation, detention and questioning of terror suspects -- are precisely the kind of anti-terror efforts that multilateral Europeans ought to love."

Europe is a relativist, post-Christian (post believing in good-evil), society.  Along with this moral relativism coincides a collection of governments who have abdicated their ability to project military power and defend their interests abroad.  However, their ability to hold press conferences and badger the US on human rights and torture, aside from being laughably disengenious, is about all that Europe can muster. 

On trade, security, immigration, terrorism and economic growth, the Europeans have proven, over the past decade, an impotent lot.  Carping on a Ms. Rice matches the dignity of the position of strength Europeans now find themselves in.  Dawn's Early Light has advocated often why Europe matters.  It is stories like this that give me second thoughts.

EU in the Headlights: Blair's Challenge

Fighting in the Family

United Kingdom and EU rotating President Tony Blair has a tough road ahead of him as he seeks to get the 25 nations of the European Union to agree on a seven-year budget.  The Common Agriculture Policy or CAP is loathed by the British, loved by the French, and attractive to the 10 new members of the union.  Margaret Thatcher, in 1984, was faced with a Britain that was much poorer and with little farming compared to the other EU members.  She negotiated the British rebate on UK membership dues, loathed by the French, loved by the British, and a growing drain on EU coffers. 

What complicates the entire framework of discussion is the current Doha round of trade talks that is stalled after Jacque Chirac killed even the lackluster EU offer to reform agriculture trade policies [see DEL: "Note to Brazil and India:Blame France!"].  According to The Economist, Tony Blair:

"proposes to increase Britain’s net contribution by a total of €8 billion ($9.4 billion) over the six-year budget period, either through a lump-sum payment or a reduction of the rebate. In exchange, he wants to see the overall budget cut. His plan trims about €24 billion off the €871 billion figure proposed by Mr Juncker, largely through cuts in rural-development aid and assistance to the EU’s new members in central and eastern Europe.

But though the proposal avoids direct confrontation on the CAP, the issue still looms large. Britain wants to keep the bulk of its rebate as compensation for the EU keeping the CAP. And Mr Blair’s plan calls for a review of all EU revenue and spending in 2008, when Britain will presumably once again go after the CAP with a carving knife."

To put the CAP in perspective, only 2% of the European workforce farm, the CAP sucks up 40% of Europe's budget (did you think it was going towards technology?), while 80% of the subsidy goes to 20% of the richest farmers. 

Why do people not in the EU care about how the Europeans want to misguidedly spend their citizens' taxes?  Because the subsidy significantly impedes development in the third world and is blocking an agreement on free trade.

What EU Stagnation Means to the Developing World

In 2003 the Europeans attempted a compromise that demonstrates how far the divide still is.  The Economist writes:

"In 2003, the EU agreed to replace a blizzard of farm-support payments with a single payment scheme, which subsidises farmers' incomes directly, rather than by paying higher prices for their crops and livestock. This should remove the worst trade-distorting aspects of the CAP. Farmers now get paid an average of only one-third above world market prices, compared with 80% in the mid-1980s. Overall subsidies are down: from over two-fifths of farm receipts in the 1980s to one-third and falling in 2004.

The trouble is that the 2003 changes were a classic case of only partial reform, as everyone knew at the time. They were too little both for Europeans and for Europe's trading partners. They did not affect tariff levels, which are now the main subject of dispute between the EU and the rest of the world. Nor did the 2003 reforms do enough to resolve looming budget problems. Even so, they went too far for many farmers, who now see themselves as an endangered species."

Given the recent French rejection of the EU Constitution and their desire to not create more political turmoil to compete against the Paris riots, there is little likelihood of any political willingness to promote change.

However, farm subsidies in the developed world are not constrained to just Europeans.  Another Economist article illustrates how beholden the OECD is to farm subsidies.

"There is, though, wide variation between OECD members. Producer support is worth less than 5% of farm receipts in New Zealand and Australia, but amounts to roughly 20% throughout North America, 34% in the European Union, and a whopping 60% in Japan. And while the overall value of support has fallen from 2.3% of GDP in 1986-88 to 1.2% now, the reductions have been uneven. Canada and Mexico have made deep cuts in their farm supports, for instance, while Turkey has actually increased its supports."

The developed world is worried about the spread of AIDS, radical Islam, avian bird flu, and a host of other troubles in the developing world.  However without radical farm subsidy reform, starting in Europe (as proposed by the United States) and followed by Japan, the Doha round will accomplish little.  If the developing world continues without the opportunity for sustainable development and the ability to trade for hard currency with the industrialized world, it will find other exports that may be far more costly to the world.

Terrorism, drugs, diseased and impoverished immigrants are the likely exports the third world will trade with the industrialized nations if a fair trade round is not concluded.  This will be far costlier than sustaining 2% of the European workforce.

The Belmont Club Weighs In on Merkel

Wretchard of The Belmont Club poses this important question: "What foreign policy will the new Chancellor of Germany pursue?"  Along with citing DEL, he links to Hero von Essens' piece "Angela Merkel's Travels (And Her Limits)," which reasons:

"Under Merkel, Germany's foreign policy focus will free itself of Schroeder's shortsighted French fixation, and she will desist from the anti-American posturing which so disfigured Schroeder and Fischer's tenure. Germany assumes the EU Presidency in 2007, so these small signs of opening up to the outside world are mildly encouraging for proponents of such things as reform of the EU budget, including the ludicrous CAP system, a more Atlanticist foreign policy, and integration of the new, eastern EU countries."

Wretchard then asks in reflection of Ms. Angela Merkel's recent European tour:

"Dawn's Early Light in comparing Merkel to Bismarck made a suggestive comparison. Bismarck unified Germany: what might she do for Europe? Although the European Union draft constitution has fallen into a coma, its departure did not permanently answer the question of what Europe should be."

Therefore, taking liberty with his two questions, let me rephrase: "How will Ms. Merkel's foreign and domestic policy, even in her weakened grand-coalition position, affect European development and integration?" 

Wretchard gives an interesting take on Germany, given its historical position on European and American relations.

"Now it is doubtful whether the European Union will be around in the year 2100 at all. Significantly the Germans did not share the French illusion of thinking the Second World War and the Cold War that followed was won from the Elysee Palace and Brussels. Germany knew that the fourth leading nation in Europe was located across the Atlantic. Puschmann  noted, 'It may not be immediately obvious at present, but Germany does, at least potentially, share Britain’s positive outlook on the transatlantic alliance. Post-war Germany has historically been an Atlanticist nation, standing firmly by the side of the United States and the United Kingdom'. If Merkel sees Europe within the wider context of the West, rather than through the fantasy prism of the Euroleft, she will at least have Bismarck's breadth of vision, though not, perhaps, his opportunities."

Where Chancellor Merkel stands on domestic and foreign policy issues is important to the extent she can influence international relations.

Step 1: Ms. Merkel Needs to Increase her Political Capital

For Ms. Merkel to succeed in transforming Europe and retaining power, she must increase her political capital.  Voters were reluctant to outright support Ms. Merkel's harsher economic reforms of her Christian Democrat Party compared to the Social Democrat approach of supporting the status quo that had failed to reform Germany's 11% unemployment rate.  While America may be the 50/50 nation, German's unfortunately can't even get either party's plan to a 50% voter approval rate.  Given the state of affairs in Germany's current government, Ms. Merkel benefits from extremely low expectations.  Yet she and her chief political opponent share a good deal in common that may help with bringing modest economic change.  As The Economist notes:

"Both of the country's big parties are now led by eastern Germans: the Christian Democrats by Angela Merkel, the prospective chancellor, and the Social Democrats by Matthias Platzeck, premier of Brandenburg. Predictably, the tabloids say that Ossis are the new Bossis. More striking are the similarities between the two.

Both leaders grew up in Brandenburg; both are 51; both are Protestant; both come from a relatively bourgeois background (Ms Merkel's father was a priest, Mr Platzeck's a doctor); both became scientists; and both are divorced, although Ms Merkel has now remarried and Mr Platzeck has three adult daughters. The pair's political lives have also developed in parallel. Both entered politics after the fall of the Berlin Wall (Mr Platzeck as a Green minister in East Germany's last communist government, Ms Merkel as a spokesperson for the first democratic one). Both rose through the ranks and took the helm of their parties more or less by accident. Both are modernisers, but also pragmatists."

Ideologues do not make for good compromisers but pragmatists do.  Ms. Merkel has strong convictions but is shrewd enough to make incremental advances.  This may buy her time domestically to bring about economic change.  The negotiated "coalition contract" will raise the sales tax (VAT) from 16% to 19%, increasing the retirement age to 67 from 65 for workers born after 1970, cut spending by $41 billion in order to create a budget that does not increase debt beyond the 3% of GDP allowed by the EU (source The Economist). So while domestic policy may be limited for great short-term success, Ms. Merkel is unlikely to lead Germany along Schroeder's self-destructive path.

Step 2: Foreign Policy is Ms. Merkel's Key to Achieve Political Capital

Ms. Merkel's political capital for domestic reform and winning an election 4 years out will require a winning European foreign policy.  I see her opportunities as follows in Europe:

1. Tony Blair and Jacque Chirac have vastly different goals for the United Kindgom and France and are often bitter enemies politically.  France and Britain need an "honest broker" to help compromise on the British Rebate and Common Agriculture Policy (CAP).
2. Former Chancellor Schroeder's relations with President Bush were icy at best.  America, fighting it out in Iraq, needs allies in Europe.  Ms. Merkel, not caught up in the Blair/Chirac feud over the War in Iraq, can be an "honest broker" for America with Europe.
3. French President Jacque Chirac, weakened by the recent internationally devastating Paris Riots, can no longer claim French Socialism is the model for Europe.  Ms. Merkel can play an "honest broker" in a middle approach between Anglo-American capitalism and French socialism to pull together a weakened European Union.

Otto von Bismarck's brilliance was apparent in his ability to fashion alliances to strengthen Germany and keep a healthy balance in Europe, playing the French, British, Russians and Eastern Europeans at times against each other.  Ms. Merkel's ability to be an "honest broker" towards Europe and with Washington across the Atlantic may allow her the flexibility to again bring about radical reform to restructuring a broken Europe.  A more efficient Europe will enhance the German economic engine that has historically powered Europe.

This does not answer the important question of "what Europe will be," but it does hopefully address Ms. Merkel's ability to build the political capital necessary to push forward a Europe that would integrate East and West, with an economic model more towards capitalism than socialism and ultimately not at loggerheads with American foreign policy.

Germany's Angela Merkel the Next Bismarck?

November 26, 2005 - Welcome Instapundit and Belmont Club readers.  Make sure you click on the comments section to read some challenging ideas by Joe Katzman and M. Simon of Winds of Change along with UK's Peter Gentle of the up and coming Polish based blog Beatroot and systemic thinker Dan from tdaxp.  Also see DEL post "The Belmont Club Weighs In on Merkel" as a follow up to the Belmont Club piece (above).

Prussian Bismarck's Strategic Genius

Otto von Bismarck was the brilliant leader of Germany (1862-1890), responsible for unifying the country, building an empire and securing peace in Europe through a complex system of alliances that his successors could not maintain.

"His most significant policy objective was that of securing German unification; he took advantage of skillful diplomacy and a series of wars to achieve this goal...  In foreign affairs, opposed to his previous "Blood and Iron" policies before the unification, Bismarck pursued the goal of uniting Germany under Prussia's leadership, and as 'honest broker' securing the German Empire's position by maintaining peace in Europe with a complicated system of alliances."

Bismarck built a strong German military, sought to not compete with the British with its colonies or navy, contain the French by securing alliances with Austria, Italy and at times Russia.  He was the leading statesman of Europe, being responsible for such treaties as the "Three Emperors' League" (Germany, Austria-Hungary, Russia), "Triple Alliance" (Germany, Austria-Hungary, Italy), "Reinsurance Treaty" (Germany, Russia).  What Bismarck created in Europe with him at the helm provided great stability for Europe (though not necessarily needed economic reform), but was too complicated a system for leaders of less than his caliber to grow, let alone maintain.  The result of the failure of European leaders to continue the balance of power in Europe led directly to the First World War [DEL strongly recommends Pulitzer Prize winning, Barbara W. Tuchman's Guns of August as an exceptional novel on WWI, Dr. Henry Kissinger's Diplomacy and noted Military Historian John Keegan's The First World War] and changed civilization forever.

Former German Chancellor Schroeder's French Folly

The balance of power in Europe changed radically after the collapse of the Soviet Union.  Germany became focused on integrating its two separate countries.  The United Kingdom continued its Atlantic focus while slowly moving towards European integration.  This left France coyly attempting to leverage German strength yoked to Franco-diplomacy, thereby creating a new center in Europe.   

Once Gerhard Schroeder defeated Helmut Kohl for leadership of the German state and her diplomacy, his goals where short term in nature.  Attempting to secure his position in power domestically appeared often his only long-term goal.  Chancellor Schroeder tacked every which way the wind blew to gain domestic support, including anti-American positions, such as colluding with the French to thwart US efforts in Iraq.  He succeeded in damaging the US-German relationship and threw his efforts behind Franco-Russian diplomatic enterprises, even creating a "special relationship" with Vladimir Putin, to the rightful frustration of Poland. 

While UK Prime Minister Tony Blair was often described as America's "Poodle" in the British media, Chancellor Schroeder proved himself far better as Chirac's "Poodle".  German foreign policy was marked by stagnation in the past decade without pushing forward major economic reforms other than European Union integration (with an anti-American bent) that moved along until the French "Non" vote and betrayal of the German position over the EU Constitution [See DEL posts "Why France's Self-Destruction Matters" and "France and the EU Constitution"].

Germany's economy, much like France's, was marked by chronic high unemployment and a growing welfare system, and was unable to support a future Germany that was robust in world affairs.

German Chancellor Angela Merkel's Brilliant Diplomacy - Another Bismarck?

Asia Summary

For Dawn's Early Light readers interested in Asia, here are some articles worthy of mention, though due to my cold I will not be able to provide the normal longer commentary.  However, they are well worth reading and mentioning in this space.

Japan Draft Constitutional Changes Strengthens Military

"Japan's Draft Charter Redefines Military", Washington Post, November 23, 2005

"The governing Liberal Democratic Party on Tuesday released a draft revision of Japan's pacifist constitution that for the first time since World War II would recognize the country's armed forces as a fully functioning military...

The constitutional draft would broaden the government's ability to send forces overseas; such an order now requires special legislation in parliament.

The revision also opens the door to a broader interpretation of the constitution, permitting what some call "collective self-defense" -- or coming to the military aid of other countries. The most likely beneficiary would be Japan's closest ally, the United States, which has urged Japan to adopt such measures. Changes in Japan's constitutional status would have major significance in the region, particularly in the event of a conflict between China and the United States over Taiwan."

DEL posted on this development in "What is Japan's Asia Strategy? (Part II)" on October 29, 2005.  After PM Koizumi's crushing September 11, 2005 electoral victory and his ability to purge his LPD party members that were unsupportive, he is in a good position to continue steps towards strengthening the US-Japanese alliance as well as contain China over issues such as Taiwan and check China's growing military strength.

India to unveil new thinking on foreign investment

The Financial Times (subscription required) writes an article on the above title that is important with respect to India's goals in catching up to China and put some extra horsepower into their economy.

"India’s Communist-backed government will on Thursday afternoon consider a sweeping liberalisation of foreign direct investment rules that would kick start a long-stalled programme of economic reforms.

Kamal Nath, India’s minister for commerce and industry, has proposed allowing 100 per cent foreign direct investment in a range of sectors, including airport construction, oil & gas infrastructure and cash & carry wholesale trading."

Indonesia to Again Receive US Military Support

The US wants Indonesia back in its sphere of influence and not that of the Russians or Chinese.  Goodwill created by the US in the wake of last year's devastating tsunami helped US standing in Indonesia.  This, coupled with its strategic importance as the largest Muslim nation, is the reason for the aggressive US diplomatic move.  The Asia Times Online reports:

"Citing 'national security interests' and noting that Indonesia plays a strategic role in Southeast Asia and is a 'voice of moderation in the Islamic world', the US State Department jumped the gun on Tuesday and lifted a Congress-approved arms embargo against Indonesia.

With East Timor now independent and Aceh no longer a theater of war, Indonesia's pressing need is to upgrade its armed forces to cope with internal security, fight terrorism, guard vital sea lanes, protect the country's numerous oil and gas platforms from terrorist strikes and enforce its maritime boundaries to prevent foreign trawlers from poaching its resources.

Smuggling, illegal fishing and maritime piracy are rife in Indonesian waters, and the addition of more sophisticated vessels will go a long way to curbing these threats...After discussions with President George W Bush, Yudhyono, an ex-general, told a news conference, "I am not pleading for a resumption. We deserve it because we have undergone a reform in our military, with an emphasis on respecting human rights and democracy."

The bulk of Indonesia's hardware is US-made and the TNI - as the army is called - suffers shortages as it can't get replacements and spares.

As a result, Jakarta has increasingly turned to Moscow. After Yudhyono's discussions with Russian President Vladimir Putin, it was announced that both leaders had agreed to start up intensive negotiations on setting up a joint production facility for certain sophisticated military equipment and to develop a national defense industry in cash-strapped Indonesia."

Read the whole article for the details on Indonesia's Type 209-class submarines, Ahmed Yani-class ships, Tribal-class frigates, Claude Jones-class frigates, F-5 fighter and A-4 attack planes, F-16As, Su-27SKs Su-30MK fighters and Hawk 209 light attack jets.

China's Awkward Relations with the EU

DEL has written before on the failure of Chinese foreign policy to lift the arms embargo from the European Union (thanks to a strong US diplomatic effort against French profit motives).  Another Asia Times Online piece discusses the EU-French-Sino relationship.

"The recent state visits by President Hu Jintao to the United Kingdom, Germany and Spain are the latest steps in a continuing effort by the Chinese government and its European counterparts to strengthen their ties, but they also demonstrate some of the contradictions China faces in dealing with Europe and its constituent member states.

Both the European Union and China have described their relationship as strategic, although sometimes this seems no more than a hyperbolic way of saying each considers the other important. It is perhaps true that the relationship is more strategic for China than the EU. The promotion of multipolarity is one of the key foreign policy aims of the Chinese government, and the EU is a crucial element in the policy." 

The piece discusses UK, German and French positions within the EU trade and military policy regarding China. 

Hope you enjoy the articles.

French Riots - A Debate on Reasons

Dawn's Early Light has taken the position the French riots are largely a result of French domestic policies which have contributed to a long-term high unemployment rate [Prior DEL posts here and here].  While religion is a portion of the issue of the riots, it is, in DEL's opinion, a small one at this point, though the news stories like to phrase it with religious overtones.  Fellow SCBA blogger Mr. Gillmartin at Sheep's Crib believes religion is the primary reason and that the riots will spread in Europe.

The larger question that is emerging, as Mr. Gillmartin notes above, is "Will the riots spread to other European nations with large Muslim populations?"  These countries include Holland, Spain and Germany.

Dawn's Early Light's position is that it is not likely because I hold the position it is a fundamental problem with France's economic structure, and while the issue could morph into a religious uprising, it is not its genesis.  The International Herald Tribune has an article that explores this question with respect to Germany.  German officials are cautiously optimistic that they will not experience the same riots as France.  Here are the reasons given, plus bonus DEL suggestions:

• Germany, in its immigrant communities, lacks the high-rise, crime-infested housing projects like where the riots broke out in France.
• Germany, unlike the French government, has had more interaction with its Muslim communities in discussing issues.
• DEL suggestion 1 - The economic conditions in Germany are less dire than France
• DEL suggestion 2 - There are a greater number of Turkish Muslims in Germany compared to the Algerian Muslims in France.  Turkey has a much greater history of stability than Algeria, and therefore the immigrant communities can assimilate better in Germany than France.
• DEL suggestion 3 - As much as state boundaries (ie., nationalism) has decreased in Europe compared to other parts of the world, including North America and Asia, the cause belli for the riots in France was the death of two teenagers perceived running from French police.  This is not a readily exportable anger.

While the IHT article does mention a few car burnings in Berlin, the riots have not spread by any large or even medium scale at this point to other nations in Europe.  Der Spiegel subscribes mainly to the DEL position, along with most German media outlets:

"As the rioting in Paris enters into its eleventh day, commentators in Germany look to neighboring France in dismay. Fortunately, there is no talk of a clash of civilizations, an unbridgeable religious divide or other nonsense. Most papers see it for what it is: a classic clash between the haves and have nots."

Time will tell who is right in this debate, but the reasons for the riots appear more akin to the Rodney King/Los Angeles riots of 1992 than the "Arab street" rising up in France. 

DEL Bonus Prediction

One bonus prediction Dawn's Early Light will make today is that Turkey's prospects of joining the EU, while in jeopardy before, are most likely damaged beyond repair as Europeans will increasingly wish to exclude Muslims from their economic union, no matter how broken in some portions of Europe.

Update: DEL has asked his SCBA fellow bloggers to chime in on where they stand on the source of the French Riots.  Here are the following reactions and blog posts based on position.

Supportive of the DEL Position it is mainly about Economics:

• Rick Moore of Holy Coast has this post summarizing the DEL position, "He's probably right..." (Nov. 7, 2005)
• Chirol and Curzon of Coming Anarchy agree with DEL and have two post regarding here and here.  "[S]ocieties that do not properly integrate minorities and immigrants socially and economically will result in the disenfranchised resenting the society they live in. They will lash out, often in bursts of coordinated violence. Europe has a serious problem on its hand that it must figure out by itself." From the second link - "The looting in New Oreans had nothing to do with Christianity just as the LA riots were equally secular."
• Cheat Seeking Missiles has an excellent, well sourced piece that lays a large portion of the blame on the broken French system that needs to be "rethought".  However, he does note the strong religious undertones of the have nots versus the haves.  [DEL: readers may differ with my opinion of which side of the debate to put this post on, but I believe the main vein is the broken model over the religious aspects, but they are nevertheless intertwined.]
• Okie on the Lam writes from a personal comparative analysis of the French riots compared to the 1992 Los Angeles riots.  It seems his conclusion so far is that it is economic, but religion could play a larger role and the decisions the French need to make will not be easy.  Okie has two more posts on the topic as well, one a touching letter from a lady in France from The Anchoress and the other a post on an email dialogue between the two of us on the 1992 LA Riots.
• 21st Century Reformation comes down on the side of economics and the failed French welfare state with this post: "The reality is not that these riots are a result of a failed “integration” policy but a failed government welfare policy. The French have built subsidized government housing for their unemployed immigrant population."

Bloggers who believe it is a Muslim/religious issue at is core:

• Mr. Gillmartin's original post can be found here.  He lays out 3 points: 1) he thinks there is reason to believe the riots will spill out over Europe 2) "this is neither an economic or race issue... this is a spiritual and cultural one." 3) Europe has provided a lot of assistance to their immigrants and that Muslim nations do not have a history of providing jobs in their own lands.
• John Schroeder of Blogotional sent DEL an email asking these questions: "If they are economic in origin, why have we not seen the same elsewhere with similar economic policy?  Why are other ethnicities, in similar economic situations in France [not] acting in this fashion?"  DEL's reply to the first question is there were over 74,000 riots and protests in China last year, a Communist (ie., comparable in some ways to a Socialist) government [See DEL post here].  I think the motivations are largely comparable.  The other ethnicities in France did not suffer the death of two teenagers from their community.  (Nov. 7, 2005) Further Update: John couldn't stay away from joining the fray and does so with this extensive, stratfor quoting post making an argument about the differences of cultural and national identity between the US and Europe. 

Also, see The Redhunter's comments below for another great commentary below.

Note to Brazil and India: Blame France!

Trade negotiations are tough between nations.  World trade negotiations are extremely difficult, painful, and often very public.  The Doha round of trade talks began in Qatar in November 2001 and is set for another meeting in Hong Kong in December.  The trade talks have not produced substantial results in reducing barriers.  However, the US, in a Zurich meeting of five trade members -- the US, Australia, Brazil, the EU, and India -- proposed a massive cut in trade tariff ceilings.  The Economist reports:

"America can currently spend up to $19.1 billion on farm-production subsidies, which heavily distort trade. The EU can spend over $75 billion. Robert Portman, America's trade representative, offered to cut his country's limit by 60%, if the EU agreed to cut its permitted subsidies by 80%. Mr Portman also suggested limiting other subsidies, which do not distort trade as heavily, to 2.5% of the value of agricultural production. These two limits provide plenty of scope for creative accounting. Even as America lowers the ceiling on the most trade-distorting subsidies, some of this money will be reclassified as something else.

To the big agricultural exporters, such as Brazil, handouts to rich-world farmers, however galling, matter less than access to rich-world consumers. The trade powers appear to have settled on how to cut farm tariffs, if not by how much. Following a scheme outlined in July, tariffs will be divided into four “tiers”, according to their height. Those in the top tiers will be cut by more than those in the bottom. This week, Mr Portman proposed that rich countries should cut any tariff over 60% by as much as 90%, and any under 20% by more than half. No rich country should impose a tariff above 75%, he said."

This proposal woke up the trade negotiations and required a global response.  The US approach definitely supports a more liberal economic view of trade, and it is encouraging to see the US champion an approach that can help the developing world improve its economic lot while making a major American concession.

Background on Trade and the Developing World

It is common knowledge that the US, Japan and Europe have massive farm subsidies that are politically dear to the governments in power.  These subsidies greatly distort the ability of the developing nations to compete with their crops.  Additionally, it applies negative pressure on developing nation farmers as they cannot make their farms profitable, which, of course, does not benefit the developing nations.  The US, Japan and Europe then provide large subsidies, loans and grants to the developing world in attempting to move them out of their economically poor condition.  DEL understands this is a simplified argument and that it doesn't take into account other large inefficiencies in the developing world, like corruption and other policies and practices that keep the poorest people from rising out of their predicament.

Brazil and India wait on Europe

Brazil and India have much to gain by seeing the US proposal advanced.  This left first the potential for Japanese obstruction.  But given Koizumi's September electoral victory, which depended far more on urban support than rural support, it is likely that Japan can find some room for compromise.

The European Union responded with a proposal that is about half of what the US was proposing.  The Financial Times writes:

"The EU said its offer would cut European farm tariffs by an average of 46 per cent and reduce its highest tariffs by 60 per cent, against the 50 per cent cut tabled earlier this month.

However, the US said the average tariff cut would actually amount to 39 per cent and concluded: 'If the final Doha agreement on agriculture were to go no further than this, other areas would also be weak and the Doha round would not approach its potential for promoting development, opportunity and global economic growth.'

The US criticised in particular the EU's continued demand to maintain steeper tariffs on 8 per cent of its 'sensitive' imports. The US and others have called on the EU to reduce the list of sensitive products to only 1 per cent of the total and have also set 54 per cent as the minimum average tariff cut that the EU should offer."

While the EU proposal is not strong enough, the irony is that France's Chirac has vowed to veto even the EU proposal now on the table. FinFacts of Ireland reports:

"'It is totally out of the question for us to go a single step further,' Chirac told a news conference after the EU's informal summit at Hampton Court Palace, near London today. France would have a veto over any agreement, he added."

For background and analysis on Chirac and EU trade negotiator Mandelson's political maneuvers with each other, see this Financial Times piece.

So the EU response yesterday was to table the entire agriculture portion of the debate and move directly towards industry and services, an area of concern more to the developed world and less to the developing world. 

Blame France

The European Union, by French veto power, is the stumbling block in making major agriculture trade reform.  This apparent arrogance directly impacts Brazilian and Indian farmers and should be a good reminder of where French interests lie:  with Chirac's short-term best interests.  France's actions are like a spoiled child who has been indulged for far too long.  The US, Eastern European farming nations, Brazil and India, along with the African nations, should continue to apply pressure on France to reform its farm policies and rightfully link other issues of international relations to produce change.

Balance of Power in Europe

The fallout from the French and Dutch votes against the EU Constitution is growing.  Small fractures in the union have grown and are visible for the world to see.  The recent failed EU summit, chaired by strong EU supporter Jean-Claude Juncker, the Prime Minister of Luxembourg, prompted Mr. Juncker to describe the union as being in "a deep crisis".

What should have been a summit to think about and discuss the demise of the constitution was instead focused on the 2007-2013 EU budget, which has until next year to be worked out.  Mr. Chirac, handed a huge personal defeat during the constitution voting, looked not to heal the European divide his government partially caused but to shift blame elsewhere.  There are two conflicting economic systems competing for primacy in the EU: the United Kingdom, with an economic model closer to American capitalist standards of competition, and the current Franco-German socialist model.  The philosophies are so different that it is extremely difficult to build an EU budget and formulate policy among the 25 member nations, that have widely different views of the world and economics.  Winning the heart of this debate in favor of the United Kingdom model is vital to Europe's future prosperity and security.  Mr. Chirac coldly attacked the British rebate in the EU, a deal that Margaret Thatcher cut with a smaller EU in 1984.  The British rebate compensates the UK for its disproportionate payments into the EU budget and grows annually.  The rebate is expected to be about 4.5 billion euros ($5.5 billion) this year. 

Mr. Chirac's attack was clever on several fronts.  There is no love lost between Mr. Chirac and Mr. Blair, who have clashed on issues regarding the leadership of Europe and, more noticeably, the Iraq war, where France effectively blocked UN support for the war against a strong British desire.  PM Blair was not willing to give up or renegotiate the rebate unless the French were willing to revise their own generous subsidy in the form of the Common Agricultural Policy (CAP).  Mr. Chirac, not willing to give an inch, ruled it out.  A proposal from Luxembourg would have ended the British rebate and left open the French CAP benefits to discussion midway through the next budget.  This proposal could not be taken seriously by the English. 

What was so clever in Mr. Chirac's attack is where it put the English with their allies in Eastern Europe.  Towards the end of the failed summit, Poland and the other Eastern European nations proposed paying more into the EU budget so the British rebate could be preserved.  Mr. Chirac effectively drove a public wedge between the UK and "New Europe". 

Why didn't PM Blair cut a deal?  Mr. Chirac likes to think big in the long term but conducts policy in the short term, which explains his 24% approval rating.  He is not willing to make long-term political choices that are painful and instead is working to detract attention from his failed policies and wound his neighbor across the channel. 

Mr. Blair, who is set to take over the EU presidency for 6 months, thinks long term as well but is willing to make painful short-term moves to accomplish long-term change.  Mr. Blair, sensing a weak Mr. Chirac and an even weaker German leader, likely to be replaced by a more friendly Angela Markel, is willing to wait to reform Europe.  In order to do that, Mr. Blair must work out a framework for Europe not in an 11th hour room in Brussels, but by building an alliance with New Europe along with Germany to push the EU in a more competitive and US-cooperative direction. 

That type of vision takes time and dedication.  Mr. Chirac will continue to play the obstructionist.  But if the Europeans want a "closer union", they would be wise to follow the Blair model.

Suggested Reading for more insight:

1. The Economist "Europe's identity crisis deepens"
2. The Guardian "Blair defends rebate stance to MPs"
3. The New Zealand Herald "French press put boot into Chirac"
4. Financial Times "Blair takes diplomatic line over EU budget"
5. Der Spiegel "EU Summit Collapse is 'Historic Failure'"

Why France's Self Destruction Matters

I have received comments and email when I have posted on European matters, such as the rejection of the EU Constitution, that question the relevance of these issues to US foreign policy.  Many view the European project as an enterprise of long conversations with little change.  Europe, long now weak on "hard" power, is becoming even softer in the "soft" power category, many rightfully charge.

However, while following power is important, the reverse is also true.  Where there is a vacuum, changes usually occur, and oftentimes radical ones at that.  From the turn of the 20th Century sick man of Europe, Turkey (of the late great Ottoman Empire) to the Soviet Union's disintegration a power, vacuum creates great uncertainty and often leads to shifting alliances with major powers.  Fourteen years after the fall of the Soviet Union, many of the former Soviet states are actively pursing a policy that aligns them with the West and in the good graces of the US foreign policy and military establishments. 

The Franco-German alliance

The Franco-German alliance, centered around a socialist, non-US world centric view, attempted to take the European nations (both East and West) in a direction that reflects their economic and strategic priorities.  The Iraq War was a clear case in point.  Gerhard Schroeder's siding with Mr. Chirac and turning away from the US, a historic ally, and Great Britain helped him secure his party's narrow reelection.  His chance of beating Ms. Markel, with no anti-US sentiment to again rally his people, is grim come September. 

Mr. Chirac's 24% approval ratings (almost half that of the world-hated Mr. Bush's approval ratings) and his defeat over the EU Constitution led him to elevate Mr. Dominique de Villepin (the chief French "Non" at the UN against the US position) to be Prime Minister.

Double-digit unemployment in both Germany and France are the chief reasons for their citizens' discontent.  What remaining soft power the Franco-German alliance retains in the EU is draining away as their economies continue to sputter.  This example from the Economist of Mr. de Villepin's prescription for handling the unemployment problem looks like a short-term solution with long-term problems.

"It relies heavily on subsidised municipal job creation. The scheme could dent the unemployment figures, which show that 10.2% of the workforce is without a job. But it will do little to free up the labour market. And its expansion will come at a price—an extra €4.5 billion ($5.5 billion) in 2006, said Mr de Villepin. He added that, as all extra money had to be dedicated to jobs, he would have to suspend Mr Chirac’s promised income-tax cuts. Even so, Eric Chaney, chief European economist at Morgan Stanley, says he is raising his budget-deficit forecast for 2006 from 3% to 3.5%."

Rather than take on structural reform of the powerful French unions, 35-hour work weeks, or 60-year retirement age that France cannot continue to afford, the government will pay large government contracts to unions through public debt and set aside already promised tax relief that would have encouraged new business.

The French solution is far from it.  Handing out benefits to the portions of their economy they most need to reform will continue to eat away at French soft power as they become an economic embarrassment to Europe, especially when viewed against Great Britain with a 4.8% unemployment rate. 

A British-German alliance?

With Tony Blair heading up the EU and being pro-American, and former East German Angela Markel likely to win Mr. Schroeder's job, the Franco-German alliance of the big three powers in Europe will collapse and with it, the dream of a European "third way" apart from the US.  France will find itself isolated further within Europe.

However, a weak Germany and a continued weak France, while cynically amusing to those in the US who supported the Iraq war and promoting democracy in the Middle East, is not in the long-term interests of the US.

An EU focused on economic growth, good structural policy, and a desire to invest in their military capability is in the US interest.  A British-German alliance within the EU would go a long way towards increasing Europe's relevance and promote stability not only on their continent but in the Middle East, Africa (as seen in the recent G8 debt relief) and Asia as well.

UPDATE:The Scotsman has an interesting article that leads "Blair aims to split Franco-German alliance" and opens:

"TONY BLAIR yesterday launched his strategy to isolate Jacques Chirac - by building an alliance with the woman expected to replace Gerhard Schröder as chancellor of Germany.

The Prime Minister's first stop when he arrived in Berlin was not to the Germany chancellery, but to visit Angela Merkel, the right-winger expected to come to power if the country's elections go ahead in September as planned.

While he was rebuffed by Mr Schröder yesterday, Ms Merkel gave a speech where she attacked Mr Chirac - and said that Britain's European Union budget rebate was fully justified, as it pays so much in taxes. Mr Blair spent half an hour in talks with Ms Merkel, and is understood to have presented her with an argument for a root-and-branch reform of the EU which would punish French farmers and reward eastern Europe."

A Name to Watch in Germany

Angela Merkel is a name you may not have heard but you are likely to hear a good deal about in the near future.  Ms. Merkel was nominated to head the German Christian Democratic Alliance (CDU and CSU parties) for the September 18th election against current chancellor Gerhard Schroeder.  She is from East Germany, has a science background, is the daughter of a Protestant minister (which is in contrast to most of her party's Catholic members) and is known for being shrewd.

Mr. Schroeder, much like his counterpart Mr. Chirac in France, is unpopular.  With a growth rate of an anemic 1.1% and unemployment near 12% (source: Economist), German and French citizens have much in common to bemoan about their current leadership.

Ms. Merkel is important to the future of Europe and the future of US-European relations for many reasons if she wins election.  To win the support of Germans, she is focusing on jobs and fears about Turkey joining the EU.  As the San Diego Union Tribune points out:

"Merkel also called for 'a truly honest discussion of Turkish membership in the European Union.' Merkel, in contrast with Schroeder, says the largely Muslim country would overstretch the 25-nation EU and should instead be offered a vaguely defined 'privileged partnership.'"

Her election would move Germany closer to the British in European politics and away from France.  This would also alleviate many of the tensions between the US and Germany stemming from Mr. Shroeder's decision to use Iraq as an election issue and strain relations.  As the Economist explains, Ms. Merkel will lead from a conservative position:

"[W]itness her long list of planned reforms, which are quite radical in the German context: simplifying tax, overhauling pensions, reducing job protection and curbing the trade unions. In some ways, she resembles another single-minded lady, who rose from modest low-church origins and a scientific training to take her country by the horns and shift it in a rightward direction—Margaret Thatcher. Perhaps that explains why she also prefers the current British prime minister to Nicolas Sarkozy, who may well be her opposite number in Paris if he becomes president of France." 

Her election in Germany, which is likely, will further minimize France and be yet another democratic rejection of the unaffordable socialist policies of Western Europe.  Her election would also benefit Prime Minister Tony Blair as he begins his 6-month presidency of the EU in the fallout of the French and Dutch revolt on the proposed constitution. 

France could be further isolated not only internationally but also within Europe.  The policies Europe undertakes by the main powers and its attitude towards Turkish integration, which appears to be on a long-term holding pattern, will have a major impact on European foreign policy towards America and the Middle East.

The likely rejection of EU membership to Turkey will assist US-Turkish ties, which is likely why Deputy Secretary of State Robert Zoellick explained today in in Washington:

"My hope is that as Turkey looks to its own future, the connections that it has with Europe, which are very important, need to be complemented by a global perspective, and that's why I think the partnership with the United States becomes particularly valuable.  The US is still a unique country in terms of its global reach."

Ms. Merkel's election would be a win for the Germans and a win for the US on multiple diplomatic fronts from US-German relations to US-EU relations and including US-Turkish relations.