In 2013, the world learned that the NSA and its UK equivalent, GCHQ, routinely spied on the German government. Amid the outrage, artists Mathias Jud and Christoph Wachter thought: Well, if they’re listening … let’s talk to them. With antennas mounted on the roof of the Swiss Embassy in Berlin’s government district, they set up an open network that let the world send messages to US and UK spies listening nearby. It’s one of three bold, often funny, and frankly subversive works detailed in this talk, which highlights the world’s growing discontent with surveillance and closed networks.
Three young Syrians crossing on foot from Austria stopped on border just as Berlin announces reintroduction of controls to deal with record refugee inflow
Barely four minutes after police put out traffic cones to begin Germany’s first border controls over a refugee influx surge, three young Syrians crossing on foot from Austria were stopped.
“Can I see your passports, please?” a federal police officer asked, halting the men in their tracks at Freilassing, a key land crossing for travellers between the Salzburg region and the southern German region of Bavaria.
The trio were told to remain on the side of the road to await the police’s decision on their fate.
“We have been walking through Europe for 22 days,” said 27-year-old Hatem Ali Ahaj, who suffers from asthma and was struggling to catch his breath.
Taking a puff from his inhaler, he recounted how they had fled their homes in the eastern Syrian city of Raqqa after it was seized by fighters from the Islamic State jihadist group.
The men’s trek across Europe started in Greece where they caught a bus before resuming their journey on foot through Serbia, Macedonia and Hungary.
After at last arriving by train in the Austrian town of Salzburg, the German border appeared tantalisingly close and the three had cautiously set their hopes on making it to the city of Stuttgart.
“We thought that Germany was the only country that would treat us like human beings,” the asylum seeker said.
The country has long been the most receptive in Europe to refugees.
Over the weekend, tens of thousands of migrants continued to push across Europe, most of them fleeing wars in Syria, Iraq, and Afghanistan, as European leaders scrambled to agree on a way to equitably distribute the newcomers across the continent. For many of the migrants, Germany has emerged as the most desired location:
On the march along the highway most of these migrants have one destination in mind: Germany pic.twitter.com/rO6YmfqwFy
— Richard Engel (@RichardEngel) September 4, 2015
The numbers tell the story: 100 migrants are arriving in Germany every hour, according to the Telegraph. Yesterday, Germany’s vice chancellor said his country can accommodate 500,000 migrants annually for the next several years, and that $6.6 billion has been set aside for costs related to processing and accommodating them. Up to 800,000 are expected to arrive this year alone, far more than in any other European nation. Already, Germany has Europe’s largest population of migrants, just shy of 10 million in total, comprising about 11 percent of the country’s population.
Why Germany? There are a few key reasons, said Jacqueline Bhabha, an expert on migration at Harvard’s School of Public Health. The first is inertia: Because many migrants have already made it to Germany, other family members are likely to stick together and follow suit.
The second is economics: Germany has Europe’s biggest economy and lowest unemployment rate. For migrants seeking jobs, Germany is probably the safest bet. In fact, some of the country’s most prominent backers of refugee-friendly policies are industry groups, who have argued that migrants are needed to help fill a labor shortage. In a recent op-ed for Newsweek, the head of the Association of German Chambers of Industry and Commerce wrote that “many companies are desperate to find trainees and qualified staff, while some refugees have qualifications that are dearly needed. This potential needs to be exploited to a much larger extent.”
But perhaps most importantly, Germany has a legacy of opening its doors to refugees that dates back to World War II, when millions of refugees fled out of the country.
“Germany sees itself as having a historical commitment,” Bhabha said.
Service and composite PMI figures out for Europe came out on Thursday and the key takeaway is this — Germany is driving Europe forward, while France is dragging us back.
The overall Eurozone PMI beat forecasts.
The purchasing managers’ index (PMI) is a measure of whether economies and sectors are expanding or contracting. Anything above 50 signals growth, while anything below signals contraction.
Europe’s PMI was 54.3, against a forecast of 54.1. That was driven by Germany beating forecasts by a big margin — an upward revision of an entire point (54 to 55).
We already had a positive flash readings for August, but Germany is doing even better than first thought.
France, meanwhile, is doing much worse. France’s flash PMI was 51.3, but today that got revised way down to 50.2 — more or less stagnation and dangerously close to slipping into decline.
We’ve already had dreadful manufacturing figures from France earlier this week, with French industry shrinking faster than expected. The service sector is similarly in a worse shape than economists expected — the PMI there was just 50.6, against a forecast of 51.8.
It’s not looking good for France.
That effectively means we’re looking at a two-tier Europe, one where the two biggest players are moving in completely different gears.
Right now the “single market” can trundle along as it has been. But this imbalance could cause serious problems further down the line, particularly given Germany has so much power in Europe and a tendency to push tough reforms on those foolish enough to fall into trouble. I made this point when the manufacturing numbers came out.
Here’s the breakdown of the PMI figures we got from Markit today:
- Europe: composite — 54.3, forecast 54.1; services — 54.4, forecasts 54.3.
- Spain: services — 59.6, in-line with forecasts.
- Italy: services — 54.6, beating forecast of 53.
- France: composite — 50.2, flash was 51.3; services — 50.6, 51.8 predicted; .
- Germany: composite — 55, flash 54 — services — 54.9, 53.6 predicted.
It is peak tourist season in China for European leaders. Shortly after the first bailout package to Greece in 2010, German Chancellor Angela Merkel celebrated her 56th birthday with Xi’an’s famous terra cotta warriors. She was accompanied by the usual coterie of German industry leaders who inked contracts in the tens of billions and has since cajoled her entire cabinet to join the annual pilgrimage to Beijing. Merkel took her eighth multiday tour this summer just weeks after the latest chapter in the financial crisis.
Chinese President Xi Jinping last visited Merkel on her home turf in 2014 during a high-profile visit to Berlin, where he sought to strengthen what is perhaps China’s strongest partnership in Europe. Speaking at one of Germany’s leading think tanks, he expressed his thanks for the country’s role in helping “Made in China” become more like “Made in Germany,” touting the widely recognized quality and craftsmanship of German goods, and praised the ties that bind Berlin and Beijing together as “two pillars of growth in Asia and Europe.” Trade with China helped Germany weather the global financial crisis and solidify its dominant position within the eurozone. During the course of only a few years, China has transitioned from an average export destination to Europe’s second most important trading partner after the United States.
Washington, however, has been slow to recognize these developments. In 2004, U.S. officials were surprised by a French and German bid to lift an arms export ban to China that was put in place after the Tiananmen Square massacre. More recently, the United States has blamed Berlin for maintaining a large trade surplus and keeping the euro undervalued—accusing Germany, in short, of acting like the China of Europe. This year, European enthusiasm for the Chinese-dominated Asian Infrastructure Investment Bank (AIIB) again caught U.S. policymakers flatfooted, which left U.S. President Barack Obama backtracking from his alleged initial opposition to the institution.
Yet after four decades of steady growth, Sino-European relations may now be moving past their peak. China’s assertive foreign policy differs from Europe’s own expectations of global order. The Chinese Communist Party’s old repressive tendencies, which are experiencing a revival, are also scaring away the investments in the economy and society that the country has relied upon. Global interest and engagement with China may be at a high point, but as Merkel pointedly asked China’s future leadersin 2010, “The question is: Can such a good thing last?”
Much of Europe followed the United States’ lead in formalizing relations with China in the 1970s. Two-way trade between the European Union and China has increased 30-fold since that time. When relations cooled after the Tiananmen Square massacre, European nations intensified their dialogue with China to support its domestic development and facilitate mutual commercial goals. There are now more than 60 official dialogues at the EU level, ranging from agricultural policy, human rights, and intellectual property protection to the use of satellite technology. Over the past decade, China has also established separate “strategic dialogues” with France, Germany, and the United Kingdom.
The rapid expansion of contact between Europe and China has raised eyebrows. A decade ago, George Washington University Professor David Shambaugh predicted that Brussels and Beijing would become centers of an “emerging axis.” Earlier this year, Hans Kundnani, research director at the European Council on Foreign Relations, argued in Foreign Affairs that Germany’s commercial stake in the East was evidence of a “post-Western” foreign policy. Both arguments, however, greatly overstate the character of the relationship. The ties between European nations and China have become increasingly comprehensive, yet they are far from special or even truly strategic. The disparities between the two sides’ preferences and objectives have only become more apparent. Europe’s lack of unity on a range of issues, as well as Beijing’s willingness to exploit these differences, suggests that this partnership will remain unequal.
STRENGTH IN NUMBERS?
The aftermath of the Iraq war has demonstrated the necessity of cross-national collaboration to solve both regional and global issues. And in the years that followed, European leaders have embraced what they call effective multilateralism as a strategy to solve world problems. China and other emerging powers have long been a focus of this effort to construct a more diverse world order, complete with joint action plans to address climate change, fund development projects, and resolve international security challenges. Chinese multilateral initiatives, such as the antipiracy mission around the Horn of Africa and the creation of the AIIB (despite the nation’s veto powers within the organization), have aligned with European hopes.
Much like plans for the European Union itself, however, grand ambitions have been tempered by reality. China’s assertive behavior near key trading routes in Asia has greatly concerned not only U.S. allies in the region but their European trading partners as well. The European Union is uneasy with China’s willingness to sidestep international law in order to establish its own sphere of influence. On issues such as climate change, development aid, or territorial disputes, the EU’s concept of multilateralism clearly diverges from Beijing’s when it comes to the power of big states over small states.
There is within the EU deeply ingrained disappointment with the direction of Chinese political reform. Ever since the Tiananmen Square massacre in 1989, European leaders have intermittently criticized China’s human rights record. Beijing has been quick to threaten economic retaliation following European leaders’ meetings with the Dalai Lama and is critical of any recognition of high-profile activists such as Nobel Prize laureate Liu Xiaobo or the artist Ai Weiwei. It is telling that only a third of people in Europe and the United States have a favorable view of China and its role in the world.
Tensions will only increase this November, when all foreign nongovernmental organizations operating in China must start abiding by a new national security law. New regulations are intended to root out “hostile foreign forces” and will require foreign organizations to work with a government-sanctioned sponsoring agency that is already established within the country. If implemented poorly, the law could very well stifle long-standing civil society initiatives that serve China’s own interests. For example, Europe’s social democratic parties have worked for nearly two decades in supporting sustainable development (limiting pollution and developing renewable energy) and social justice (improving China’s judiciary and tackling corruption).
There is also disenchantment in Europe’s commercial relationship with China. The two have always butted heads about intellectual property rights and market access with Beijing, but most Western businesses have accepted these issues as the costs of doing business in China. However, domestic competition and political uncertainty are encouraging European businesses to diversify away from the mainland. According to Stefan Mair, member of the executive board of the Federation of German Industries, “We had our pivot to Asia. Now a lot of companies are asking whether they shouldn’t be swinging in another direction.” European investors and luxury brands such as BMW are taking a hit after Beijing’s recent devaluation of its currency.
China, too, has become increasingly disenchanted with Europe. European countries have long been China’s primary source of industrial technology, but China has limited access to a range of dual-use goods because of Western export restrictions. Even though it joined the World Trade Organization in 2001, China is still denied market economy status by the United States and Europe because of the government’s role in manipulation of exchange rates, protection of state-owned enterprises, and dumping of subsidized goods on the global market.
THE SEVEN-YEAR ITCH
Europe and China have thus long passed their honeymoon period. After Iraq, China hoped that a strong Europe could act as a counterweight to American unilateralism. Yet both the euro and Ukraine crises have exposed Europe’s underlying weaknesses and the durability of transatlantic ties. Now the economic honeymoonmay also be coming to a close, especially if China remains outside major trade deals, including the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership, and lower growth rates and market volatility become the norm.
Washington’s policymakers tend to view U.S.-Chinese relations in isolation or discount the relevance of Europe. European nations have focused on regional integration, reconciliation, and providing technical assistance, but they are also major arms suppliers to U.S. allies in the region. However, Europe has yet to make a concerted effort to meet the strategic challenge of rising tensions in Asia.
Much of Europe’s relations with China instead appear to be bureaucratic exercises: summits are too often calibrated to maximize political impact rather than establish common strategic priorities on urgent issues; finalizing leaders’ travel schedules and setting formal agendas for summits also just take up a great deal of time; and the sheer number of joint communiqués weighs down efforts to forge a common purpose. What is needed is a more focused dialogue—not simply more dialogue.
China hosts the G-20 summit in November 2016, which will likely be one of Obama’s last foreign policy tests. He needs a credible partner in Europe to help resolve vulnerabilities in cyberspace and stabilize the global financial system but also test Beijing’s evolving views of global order. His successor will have to contend with the world order as it is but must also develop a vision with allies of how it should be. More work still needs to be done to convert common interests into collective action—or else let the waning summer of Europe-China relations slip by.
The situation in Greece seems to be settling down.
This past week, Greek parliament passed another set of measures that will allow the Greek government to begin negotiations with its European creditors, bringing Greece one step closer to a new bailout package.
But at the height of the most recent Greek crisis, when Greece was in limbo between calling a referendum, defaulting on a payment to the IMF, and waiting to see whether it would be able to stay in the euro, what people were really concerned about was political contagion in the eurozone.
Specifically, that if Greece’s anti-euro left-wing were able to get Greece’s European creditors to agree to taking haircuts on their debt — meaning they’d get back less than 100 cents on the dollar — then other heavily-indebted euro members like Spain and Italy would see similar political movements take hold.
Additionally, if Syriza did find itself taking Greece out of the euro, the worry is that other countries in similar fiscal positions would follow and the euro would collapse.
And when it came to these concerns about contagion, the focus was, and still remains, Podemos in Spain.
Spain is slated to hold a general election late in 2015. And over the last year Podemos, which is staunchly anti-bailout and anti-austerity, had been gaining in polls.
But in the wake of Greece’s most recent bailout negotiations, Podemos’ popularity has begun to slide, and markets have all but ruled out the possibility that Podemos will take power in a Syriza-like fashion.
In a note to clients earlier this week, strategists at Credit Suisse wrote that, “The euro area has weathered Greece for now but faces elections in Spain and Portugal this year. The market appears to be pricing a near 0% likelihood of the rekindling of anti-establishment/anti-euro tensions in the Spanish election, possibly on the back of the pullback in Podemos’ share of voter preference in the latest polls.”
In its note, Credit Suisse includes the following chart, showing the recent decline Podemos’ popularity in Spain.