Saturday 14 November 2009

Miliband for Brussels, Continued Recession Woes & the Motives of Medvedev

With the Lisbon Treaty now a historic reality rather than an uncertain possibility following its ratification by the Czech Republic, a specially convened EU summit next week called by Sweden will finally decide who gets the new top jobs of EU Council President and EU Foreign Minister. 

Two things do seem certain - neither of these two posts will have a Brit appointed to them. This to me is a mistake. I do understand the rants and ravings from some EU leaders that Britain doesn't deserve one of the new posts due to its fervent Euroscepticism - it is not part of the euro, nor the passport-free Schengen agreement and the impending regime change in Westminster next May will bring in a Conservative government more handicapped by anti-EUism than even John Major's stricken government was in the 1990s. David Cameron is to be applauded for not caving into the ludicrous calls for a referendum for the sake of a referendum from some of the fanatically anti-EU members of the party, such as Daniel Hannan and David Davis but his promises to repatriate certain powers from Brussels will indeed come back to haunt him - to do that would require treaty renegotiations and the other 26 nations are in absolutely no mood to do this after the long slog of getting Lisbon ratified.

Britain's prime candidate for the presidency, Tony Blair, seems to have failed in his quest, as early support from Nicholas Sarkozy has drained away and Angela Merkel remains sceptical about a Blair presidency. Heck, Blair never even confirmed publicly that he wanted the job, it has been the British Government that has pushed the bid. It seems that Sarkozy and Merkel prefer more of a "chairman" figure in the Presidency, hence the growing support for an appointment of a Benelux politician (and if it has to be one of these, I still support Jean-Claude Junker, Luxembourg's PM). For the foreign Mmnister post, David Miliband, Britain's current Foreign Secretary became the focus of gossip and rumours but he has claimed that he does not want the post and will remain loyally with the sinking ship that is the Labour Party. Thus, as a second-preference candidate, I would plump for Italy's former foreign minister and prime minister, Massimo D'Alema, who does have the charisma and negotiating skills necessary to ensure the EU becomes a leading voice in world affairs.

David Miliband is amazingly well-qualified to be the EU's foreign minister. Young, charismatic, internationally known and he has built a good relationship with the US Secretary of State, Hilary Clinton, an essential prerequisite if the foreign minister post is to become successful. He shouldn't give up the chance of becoming part of history by stubbornly staying loyal to a party which is doomed to electoral wipeout at the next election. Yes, he may become the leader of the Labour Party post-election, but as "The Times" rightly pointed out, his chances of becoming Prime Minister are incredibly slim. And he actually enjoys and cherishes his job as Foreign Secretary - he has an immense amount of energy and devotion to the role, which could easily be transferred to the European level. Being the foreign representative of 27 nations would be a incredible challenge for him, one which I'm sure he would exceed at. For Blair, I've always been much more skeptical about him taking the Presidency, being such a divisive figure. The only real benefit he would bring to the job is his international profile and his ability to command attention at international summits. My instinct still says "no" to a Blair presidency, but like David Cameron, one has to aim to be pragmatic with such issues.

A Brit should have one of the posts and it should be David Miliband. Not only does Britain have an amazing candidate in him for the foreign minister post (regardless of the fact he supposedly doesn't want it) and he should be judged on those assets alone, rather than his nationality but having a Brit in a top Brussels position could - and this is a very hopeful "could" - begin to engage the British with Europe, if they know that one of "their own" is representing the entire EU on a world level. 

Also, a top Brit in Brussels, particularly one as well-respected as Miliband could not be ignored by a new Conservative government in London - in fact, I think there is plenty of scope and professional understanding between William Hague and Miliband to work together on a number of important foreign issues crucial to the interests of Britain and the EU as a whole. The Conservatives would find it much easier to work with Miliband in Brussels than they would Blair in Brussels.

_____________________________________________________

In an updated recession tally, Britain is now joined only by Spain as the two major world economies still contracting. Italy exited recession in the third quarter, much sooner than expected (to the Italians as well, I imagine) and Russia has recorded 13.9% growth in the same quarter. Both the eurozone economy and the EU as a whole grew and France and Germany also continued expanding for the second quarter in a row, even though both grew slower than most economists had forecast.

The claims by Gordon Brown that Britain was better placed to weather the financial storm now look completely hollow and utopian. It was plain to see even at the beginning of our fall from grace back in autumn 2008 that our indebted society, obsession with house prices, the subsequent inflated property bubble and the importance of financial services ensured that our economy was least prepared out of all major economies to recover from the credit crunch. Next week, new figures will come out relating to Britain's economic performance in the third quarter and so there is still the slight possibility that they will be revised to show fractional growth - but don't bet on it.

_____________________________________________________

This week, President Dmitry Medvedev of Russia gave his annual State of the Union address, which brought surprise to ardent Russia-watchers, such as myself. To those of us who believe that Medvedev is merely a "puppet-president", keeping the throne warm before PM Vladimir Putin takes the presidency again in 2012, the address seemed to be Medvedev's way of telling us that we're wrong. That he is the man in control and Putin is HIS subordinate.

The part of the speech that most interested me was his call for the diversification of Russia's "Soviet-era" economy, away from a dependence on commodity exports, ironically as a rise in commodity prices and stability on the world's markets have allowed Russia to record double-digit economic growth for the third quarter. He also called for the rooting out of deeply entrenched corruption in both the Russian economy and Russian politics. It has always been my argument that Russia will never achieve its aim of becoming a major world power again, regardless of how many little Caucasus countries it invades or Eastern European nations it threatens unless it drastically overhauls its economy. Russian economic success is perilously dependent on a fluctuating commodity market.

Such a drastic overhaul though of the kind that Medvedev envisages would not be easy in any sense of the word - the obstacles facing such reform are staggering; societal issues, such as poverty, pitiful education provision resulting in an unskilled workforce, high levels of crime in the major cities, alcoholism and a shameful life expectancy rate. Political issues such as entrenched corruption, the continued chaos in Chechnya, Ingushetia, Dagestan and North Ossetia, the drift to authoritarianism in the political system, the growth of radical nationalism, human rights abuses and stifling of the free press - these are all factors that keep foreign investors away from Russia.

And of course, there's the biggest obstacle of them all - Medvedev's own prime minister. It was Putin who created the Russia of today, along with all of its problems during his eight year presidency. By stoking nationalism, state control and the eroding of civil liberties, he has duped the vast majority of Russians into believing that Russia is strong again and that Putin was the man who achieved this. With Medvedev now saying the opposite, it will cause this carefully painted conception to be questioned. How far Putin allows this to go - especially as he is already whetting his lips for the presidency in 2012 - is anyone's guess, but I don't think Medvedev's speech will enable him to throw off the claim of "puppet-president" anytime soon.