By Dawn's Early Light

Germany and Japan in the News

Two interesting articles in the news today:  one story covering Japan and the other Germany.  Both are about the future direction of diplomacy in their respective countries. 

• Koizumi reshuffles his Cabinet
  Three contenders for prime minister handed key posts
  Japan Times Online, November 1, 2005
• Germany to retain SPD's foreign policies
  Financial Times, November 1, 2005

Japan

After PM Koizumi's September 11 sweeping re-election, he vowed to promote people in his cabinet that would further his reforms.  Who he has not elevated is almost as key as who he has to compete for position within the LDP for Prime Minister next year.

"Prime Minister Junichiro Koizumi reshuffled his Cabinet on Monday and gave key posts to three possible contenders to succeed him in the country's top job.

Koizumi's choices raise the curtain on the race of prime ministerial hopefuls that is expected to culminate next September when his term as Liberal Democratic Party president expires.

Koizumi has pledged to step down at that time, which means he also will leave the job of prime minister.

The three anointed candidates for Koizumi's job are deputy LDP Secretary General Shinzo Abe, who was appointed chief Cabinet secretary; Internal Affairs and Communications Minister Taro Aso, who received the foreign minister's portfolio; and Finance Minister Sadakazu Tanigaki, who has been reappointed.

During a news conference later in the day, Koizumi said his new Cabinet was formed to push his reform agenda further, and hinted that he would not name anyone who does not follow his administrative reform initiatives as a possible successor.

'I don't think anyone who steps out of this reform line will become president (of the LDP),' he said, noting that he formed the new Cabinet to continue with his 'small government' reforms.

'Everyone who joined the Cabinet this time is eager not to stop the reforms,' the prime minister said."

Mr. Koizumi did not elevate a former cabinet member who was expected to repair ties with China if he had been elevated to a new post.

"Former Chief Cabinet Secretary Yasuo Fukuda, another politician considered a possible future prime minister, was not given a Cabinet post -- a development observers see as a setback for Fukuda.

He had been expected to try to improve strained diplomatic ties with China if he had been given a key Cabinet post.

In contrast, the appointment of Abe, a conservative with tough positions on North Korea and China, as chief Cabinet secretary could further harden Japan's diplomatic stances toward those countries.

Abe has repeatedly called for economic sanctions against North Korea over the unresolved issue of the abductions of Japanese nationals in the 1970s and 1980s, while praising Koizumi's contentious visits to Yasukuni Shrine, which has long been a thorny issue in Japan's relationship with China and South Korea.

Abe said he has visited Yasukuni Shrine based on his private beliefs, hinting he will keep visiting the Shinto shrine even in his new capacity."

Mr. Koizumi has reshaped his government in his own reformist image that is mixed with a strong sense of Japanese pride.  His picks clearly indicate that Mr. Koizumi views China and North Korea as more than just strategic competitors. 

Germany

Ms. Angela Merkel, without the clear mandate Mr. Koizumi enjoys, has a government with a great deal more constraints in its foreign policy options.  The Financial Times reports:

"Germany's grand coalition will retain the central pillars of foreign policy established by Chancellor Gerhard Schröder's Social Democrat-led government, party officials in Berlin have told the Financial Times.

The SPD and Christian Democratic Union disagree over Turkey's bid for European Union membership, but there will be few big changes in Germany's stance on key issues such as relations with the US or with other EU partners under the coalition.

This was another success for the SPD, analysts said, although the bargaining process was thrown into confusion yesterday by the resignation of Franz Müntefering, SPD chairman.

Despite losing power in September's election, the party has nevertheless managed to block chancellor-in-waiting Angela Merkel's agenda in several areas, including economic reform, and now foreign affairs."

The focus of German foreign policy, according to the article, is on keeping Shroeder's policies alive and not providing a change in tone.

"Both parties said the coalition agreement would emphasise the central importance of Germany's relations with both the US and Nato, and that while Ms Merkel might set new foreign policy accents at certain points, the stress in the next few years would be on continuity."

This may be a big setback for Ms. Merkel.  However, she is a bright and capable politician.  I suspect that even without control of the foreign ministry, she will have a positive impact on US-German relations.

Nevertheless, the contrast between Mr. Koizumi's position and Ms. Merkel's is considerable.  Elections do matter, and the long-term alliance structure between the US and Japan is stronger for the will of the Japanese people than the results in Germany have supported.

Social Conservative Wins Polish Election

Warsaw's socially conservative mayor, Lech Kaczynski, came back from a 12% deficit to defeat economic conservative lawmaker Donald Tusk in the Polish presidential runoff.  Mr. Kaczynski will replace two-term, ex-communist President Aleksander Kwasniewski who is term-limited out.

This WSJ Europe (subscription required) article, written before the elections results were announced, relates some of the appeal of Mr. Kaczynski:

"The race has also turned on personalities, with the mild-mannered Mr. Tusk saying he wants to play a unifying role, while the more aggressive Mr. Kaczynski has talked tough about standing up to Russia and Germany and purging former communists from positions of influence. He has also stressed traditional Roman Catholic values such as opposition to gay rights and abortion...

Mr. Kaczynski trailed Mr. Tusk in the first round two weeks ago and lagged in polls immediately afterward, but has been helped by an endorsement from populist anti-European Union candidate Andrzej Lepper, one of those eliminated."

The WSJ goes on to note the different economic philosophies of the two:

"Mr. Tusk, head of the Civic Platform party, wants a 15% flat-tax rate on personal and corporate earnings, while Mr. Kaczynski, from Law and Justice, favors a greater role for the state in the economy. He wants tax cuts, but would maintain a system under which high earners pay more and large families enjoy deductions."

Mr. Kaczynski has defeated Mr. Tusk by a likely 10% or better margin, which is considerable given his prior 12% deficit.  Mr. Kacyznski's campaigning to get the support of voters nervous about Germany and Russia should help in befriending Germany's new Chancellor Angela Merkel.  This may not seem obvious at first, given expressed worries about Germany.  However, Polish nervousness about Germany was heightened by former Chancellor Gerhard Schroeder's cozy relationship with Vladimir Putin.  Ms. Merkel will be friendlier toward Washington than Moscow. 

"Merkel's friendlier attitude toward Washington will set the new transatlantic tone.... Schroeder's departure also means that Russian President Vladimir Putin has lost his closest ally and most voluble apologist in the West."

The Washington Post article (above) goes on to quote outgoing President Aleksander Kwasniewski with some interesting observations on where Polish and German relations will lead.

""The grand coalition should work out to be the best solution for Germany," Polish President Aleksander Kwasniewski said in our conversation in Washington last week. "Germany will remain close to Russia but will no longer depend on the very personalized symbols of Schroeder's politics. Germany under Merkel will work to establish the broad framework for a European Union policy toward Russia."

Merkel will make no abrupt changes on Iraq, Kwasniewski predicted. The Polish leader committed troops to the multinational force in Iraq and hopes his successor will keep them there after Kwasniewski leaves office in December. "You have elections and a new government in Iraq after December, and there will be a chance for new steps, perhaps a new United Nations resolution and a new international presence in Iraq," he said. "That is when a Germany that is more open to arguments from the United States could be helpful."

It is important, Kwasniewski continued, that Merkel has personally experienced the transformation of totalitarianism into democracy. Raised in communist East Germany, she tenaciously made her way to the top of the Christian Democratic Union after Germany's reunification.

"She understands the driving force of our times, the move to democracy, because she has lived it," said Kwasniewski, whose career traces the same arc. His successful mediation of the Ukraine crisis last December, as Poland's neighbor teetered on the edge of great bloodshed, has received too little international recognition."

Mr. Kaczynski's ant-communist bent should fit in well with Ms. Merkel's philosophy considering she grew up under communism in Eastern Europe.  This doesn't bode well for Putin's conservative, non-democratic ways.  The net effect of this election and the recent German election is to move Eastern and Central Europe closer to the United States and away from the Russians.  It also means greater support for the US-UK desire to see a stable democracy emerge in Iraq. 

Now if only France was ready for an election.

UPDATE: For a more indepth look at the Polish elections, visit The Beatroot's post.  His commentary comes from a Londoner's perspective living in Warsaw. (October 24, 2005)

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.

What the French "Non" Means (Part I)

Mr. Chirac knew the train wreck was coming.  The opinion polls foretold the outcome.  The French citizens, united from the left and right of the political spectrum, handed their French leader and the EU a decisive "Non" to a deeper political union by rejecting the proposed European Union Constitution by a vote of over 55% against with better than 70% voter participation.

The cynic can point to the several-hundred-page document (219 in English - see page 8 and 9 for the preamble) and 243-word preamble and compare it to the US Constitution that opens with these simple, yet profound words:

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

There were apparently too many competing political interests in Brussels during the draft of the European Union Constitution to produce a document that the average European could conceptualize, let alone explain to a neighbor.  It is striking that its potential demise was at the hands of the French rather than the English, who have yet to vote on it and now are unlikely to do so.

As Charlemagne argues in the Economist:

"The fact that the referendum campaigns in both countries have focused so much on the European Union as a whole underlines the dangers of the current debate. A 'double no' would not just signify rejection of the constitution itself. It might also start a backlash against elements of European integration that were already in place before the constitutional debate got going— in particular EU enlargement and the single market. The federalists' gamble would then have gone spectacularly wrong."

The cause of deeper integration may not just be stalled but could actually retreat as the heads of 25 nations must rethink a "more perfect union".  The French failure and likely Dutch government failure to ratify the constitution may have significant political, economic and military implications for the rest of the world.

The French EU Dream

The goal of Mr. Chirac in pushing forward the EU has always been twofold:  First, to leverage up French power by taking a primary lead in the EU to counterbalance the American superpower.  Mr. Chirac said in China:

"It is normal that a group of nations like the EU should wish to have the very closest relations with China, in such a way as to be able to build together the multipolar world which is in the process of being designed for tomorrow."

A multipolar world works by a counterbalancing system of relations.  Since the United States is the world's lone superpower, it is obvious what Mr. Chirac's goals are for the EU:  working in partnership through arms deals and economic arrangements to push forward a world order that constrains the US.

Mr. Chirac's second goal is to protect the French socialist system, which includes 35-hour work weeks and social benefits that are richer than most, if not all, in the EU.  As the Wall Street Journal (paid subscription required) points out:

"Voters in France, where unemployment is at a five-year high of 10.2%, worried that a more tightly knit EU would emphasize free-market reforms along American or British lines over France's traditional social protections. The emphatic 55%-45% 'no' vote warned Mr. Chirac not to go down that path. France's recent move to allow workweeks longer than 35 hours has already helped make his government unpopular."

With 10.2% unemployment in France and a projected growth rate of just slightly over 1% for 2005, compared to the US projection of 3.6% growth, the impact the "No" vote will have on the rest of Europe and the goal of political integration will be played out in the coming months and years.  Some of the effects likely will include:

• Investment uncertainties in Europe for all large companies (this will reduce investments)
• A move towards the dollar away from the euro.  This is especially important for the Chinese, who may continue to finance a large portion of US debt through the purchase of Treasuries
• Left-leaning governments in Europe (a majority of Western Europe) moving away from structural reforms to placate workers.  The lower income French workers and unemployed voted overwhelmingly against the EU (see WSJ article above)
• A slow-down of national legislation that increases interstate EU cooperation
• Stalled efforts on military integration that will continue to lead other friendly nations into joining American security arrangements
• A power struggle for the "driver's seat" of political leadership within Europe
• Less influence for European nations in world affairs, including possibly relations with the Middle East and Asia

However, the effect of the French vote will likely have some major implications for other powers.  I will address these in a follow-up post tomorrow.

This Picture Sums Up US-German Diffences

This picture ironically sums up a good deal of why Americans and Germans, and Western Europeans for that matter, see the world differently (source: White House photo).

To put it into perspective, roughly 92% of Americans believe in God. As of 1992 only 56% of Germans feel the same. Americans attend church or a religious service nearly every week at a 41%-44% rate. Only 10% of Germans attended church regularly. (German statistics here)

Dennis Prager recently commented on the "Liberal Feelings vs. Judeo Christian Values" with an insightful article of the religious battle here in the United States.  The same argument can be extrapolated to our European neighbors, and ultimately it affects how different nations see the role of morality in their foreign affairs. 

Because the United States is still a religious nation, there is a clearer sense of right and wrong and less of a relativist moral view that the Europeans embrace.  This ironically strengthens US Idealism in its foreign policy and surprisingly leads to short term European Realism in Europe.  As this article in Germany's Der Spiegel magazine editorializes, even though it does not reach for the logical conclusion regarding America's religious beliefs affecting foreign policy, it asks the right question: "Could George W. Bush Be Right?"

Bush Quotes in Germany

President Bush and German Chancellor Gerhard Schroder had several public news conferences.  The first press conference really shed very little light, as far as I could see, on either US or German positions that are not already widely known (the text can be found here).

A far more interesting dialog was in a Q&A of young German professionals and the two leaders.  While the questions were interesting, President Bush's thinking about the US and Europe was revealing (text here):

"For years, there was this sense that we could tolerate tyranny for the sake of energy. And yet, beneath the surface of that policy lurked this hatred and feeling of oppression and frustration and hopelessness, which lent itself to an ideology of hatred that ended up manifesting their hatred on America.

And let me say something about September the 11th. I think this will help frame the conversation as we go forward. For some, September the 11th was a passing moment in history. In other words, it was a terrible moment, but it passes. For me, and my government, and many in the United States, it permanently changed our outlook on the world. Those two attitudes caused us, sometimes, to talk past each other, and I plead guilty at times. But as this conversation goes on, I want you to remember that point of view."

In a very good, quick statement, Pres. Bush summarized why the US and Western Europeans do not see eye to eye and are "talk[ing] past each other".  While Pres. Bush is an Idealist in many of his pronouncements on democracy and freedom, this is clearly a Realist assessment of different security concerns and economic interests.