Challenges Facing the Liberal Democracies: From Globalization to Disaggregation

As we face the new year, the liberal democracies are facing significant internal challenges and global challenges from the authoritarian states.

The main stream press has been focused on Donald Trump and the US turmoil, and have often highlighted the “globalism” of a leader like President Macron as a solid antidote.

But enter the Yellow Jackets and various other players within France and beyond.

And the leveling effect of domestic turmoil redefines the global landscape.

We have really not grasped how fundamental the turmoil is or what its global impact might be.

It is clear that the legacy of the last 20 years of globalism and collaboration is not the defining one for the period ahead.

But what is?

What will be the next phase of European development?

How significant will impact of the authoritarian states be in shaping that new phase of development?

And how will the Trump dynamic factor in?

Is Trump a moment of disruption, a force resetting how US foreign and defense policy for the longer term, or setting in motion a reaction returning the US towards a more traditional path?

And if the latter were to happen what actually does that mean given the dynamics of change generated by turmoil in Europe and the evolving engagements and strategies of the authoritarian states within the process of change DOMESTICALLY in the liberal democracies themselves?

How will crises generated by the authoritarian states interact with dynamics WITHIN a divided liberal democratic world?

Let us review the bidding with regard to change.

First, there is the British political crisis and Brexit.

At the current moment there is seems no way to avoid a British exit without an agreement with the European Union.

If this were to happen the British would have to deal with the internal repercussions as well as spend a great deal of time renegotiating agreements with the EU and the world.

Good for lawyers, not so good for Britain.

The Brexit Briefing by Oliver Wright and Henry Zeffman published by the London Times had this to say in their column published on December 13, 2018.

After last night’s narrow victory Theresa May joined her staff for what was described as a “small” drink to celebrate – if that’s the right word – the result.

But small is the apt word for the victory and the impact that it is likely to have on her unenviable political position.

First the good news. The prime minister now knows that there is not an easy mechanism to unseat her from the Tory party leadership no matter how grim things get in the months ahead. Conservative election rules dictate that she cannot be challenged again for another year.

On top of this the prime minister may have lost the support of 117 of her colleagues but unlike Thatcher there will be no men in grey suits knocking on the door of No 10.

That is because those cabinet ministers who would do the knocking know that, given the views of the Tory grassroots, her replacement would be a hardline Brexiteer and not one of them.

But the challenges she faces look just as – if not more – insurmountable than they did at the start of the week. 

And off she went to Brussels to meet with the EU to get some help.

Short trip and quick result; the EU response was swift and short: Kick sand and go away.

The EU-Brexit negotiations have highlighted a couple of stark realities.

The first is that the EU per se is not simply only the EU bureaucracy; it is the European member states per se.

Could the member states even find a common ground with Brexit given that several of these states are closer to Brexit positions than to that being propagated by the Brussels negotiators?

This underscores an even starker point — what would be a consensus on the way ahead with regard to the European Union versus the way ahead with regard to the European states?

The point here is that the two are NOT synonymous at all.

And given the upheaval in the continent, even if there was a second referendum in the UK, would the voters support remaining?

If Britain would hold such a referendum and vote to stay, there is little doubt that the UK government would lead the charge with regard to European reform and rally the neo-Brexit states in Europe against core Franco-German positions.

Many European leaders and commentators also seem to miss the point of the IMPACT on Europe of the UK leaving without an agreement.

Leaving aside the loss the revenue to the EU from Britain, there is the overarching impact of the central impact on the integration agenda.

Put bluntly, the integration envisaged by Macron in his various speeches since becoming President will not happen.

The disruption of  UK exit without an agreement which can be laid at the feet of Brussels as much as London will hardly enhance the reputation of the Commission and its leadership.

Not surprisingly

In an article highlighting the “results” of PM May’s visit to the EU meeting in Brussels on December 14, 2018. Eszter Zalan provided this perspective.

EU council chief Donald Tusk said he had no mandate to reopen Brexit talks with Britain.

“I have no mandate to organise any further negotiations. We have to exclude any further opening of the withdrawal agreement,” Tusk said.

“But of course, we are staying here in Brussels and I’m always at the PM’s disposal,” he added.

This comment by Tusk is priceless.

Let me translate from EU language.

You need to come to Brussels because we are the center of Europe.

And I do not need to deal with your problems and certainly do not need to travel to any of the secondary capitals in Europe to deal with the Brexit crisis, because I am already where all the “key” decisions will be taken.

All we need next is some reference to the road to Canossa and getting Mrs. May lined up for her next trip to Brussels a la the example of Holy Roman Emperor Henry IV’s trek to Canossa Castle, Italy, where Pope Gregory VII was staying as a guest at the height of the investiture controversy in January 1077 to seek absolution of his excommunication!

Top EU officials were keen to offer personal support for May after some press reports spoke of her “humiliation” in Brussels.

“We have to bring down the temperature,” European Commission president Jean-Claude Juncker said.

Thanks for that advice, mate.

And here is a good example of how Juncker is doing that.

Earlier in the day, Juncker had been caught on camera in a heated conversation with May.

He told press he did not mean to offend May and that his comment, which described the UK position as “nebulous”, had referred to the broader state of affairs in the UK and to not May’s presentation.

“I have the highest respect for the British prime minister,” Juncker said.

So something is “nebulous” in Juncker’s view of the UK and much better to just push it off his plate and get on with business as usual.

But not to worry, we can explain that one in EU talk as well or when “nebulous” is really about the speaker rather than the subject.

And on the continent, the challenge to EU financial rules by Italy have now been joined by President Macron who has been a harsh critic of what the Italian government wishes to do to bail itself out of crisis.

Becoming a bit like, folks who live in glass houses….

The recent article by Marcus Walker of the Wall Street Journal underscored how “Europe’s Division Post a Rising Threat to Governments.”

The U.K. government’s pratfalls over Brexit show one thing still unites London with the continent: the growing difficulty of governing Western European nations in which new schisms have made it hard to find a majority for any way forward.

British Prime Minister Theresa May’s decision to delay a parliamentary vote on her withdrawal deal with the European Union, and avoid a humiliating defeat on Tuesday that could have brought her down, sets up the tensest weeks for Brexit since Britons voted to leave the EU in 2016.

Meanwhile, political dramas are also simmering in France, Italy, Germany and Spain. Issues and plot lines differ by country….  

Yet the underlying drivers share some resemblance. Divisions over economics, culture and geography are challenging governments’ longevity or their ability to pursue their agenda.

A final source which provides a nice strategic stamp on the situation in Europe was provided by The Australian’s Greg Sheridan in an article published on December 11, 2018.

Though he won the presidency in May last year with waves of celebrity-like goodwill from the public, he now has an approval rating with his people way below that which Donald Trump enjoys in the US.

Macron was cast not only as the reformer of France but also the new hero of Europe. A passionate advocate of action on climate change, he also wanted deeper political integration for Europe, a European army, a new vision of a Brussels-centric future for his troubled continent, a new model of government for the world. The French people couldn’t care less.

For four weeks now not only Paris but cities around France have burned as the “yellow-vests” movement has protested against all Macron’s reforms. They want lower petrol prices much more than they want climate change activism. The yellow vests the protesters wear symbolise their commitment to their cars. And the yellow-vest movement, despite spasmodic violence and vandalism, is supported by a staggering 75 per cent of the population.

Macron, who had conducted himself with the hauteur of a Hollywood-style hero of the elites, could not make the grand climate summit in Poland. Instead, he had to go home and surrender. Political action now in France doesn’t occur in the National Assembly or the ballot box — it happens in violent encounters on the streets.

Macron’s surrender to the streets was abject. And comprehensive. First, he promised to postpone the fuel tax increases. Then, quickly, he promised to scrap them altogether. France’s budget deficit is at 3 per cent, the EU limit, although most member nations merrily ignore such EU rules. France’s unemployment rate is officially still nudging 10 per cent, although in reality it is much higher.

Macron, in the face of this persistent budget deficit, will now abandon plans to reform France’s pension system. He will introduce an increase in the minimum wage, remove income tax from overtime, introduce untaxed bonuses and increase welfare benefits.

Why should public spending in France stop at a paltry 57 per cent of GDP?

And back in the United States the President faces a new Congress, one in which the Democrats control the House but the Republicans in the Senate are not likely to sheepishly follow his lead.

Confrontation and redefinition will rule the day as Trump sorts through the future for his Administration and the country and faces the question of what 2020 might bring.

Recently, Harald Malmgren highlighted what the new political situation might mean for the country.

President Trump lost full control of Congress in November midterm elections, as Democrats took majority control of the House of Representatives. However, GOP Senators elected or reelected in 2018 do not face another election until 2024—after Trump. They can be expected to have their own priorities and ambitions….

Malmgren then addressed the specific area of tariff and trade policy, an area where the Congress has the clear dominate constitutional power.

Just read the Constitution!

In 2018 there was much concern in the Senate among members of both parties about Trump’s aggressive use of unilaterally imposed tariffs, but the House Ways and Means Committee remained passive.

In both House and Senate there was concern that the President was abusing Section 232 of trade law, which delegates authority to the President to act to limit imports if he determined that there was national security need for extraordinary measures.

This specific delegation of authority to the President was never meant by Congress to be a broad pass to ignore Constitution Art 1 provision that Congress shall regulate foreign commerce.

Under Democratic majority, the House Ways and Means Committee will likely seek to rein in Trump’s use of trade policy without Congressional involvement and approval at each stage of engagement with other governments.

Notably, Senator Grassley, Chairman of the Senate Finance Committee, which has jurisdiction over trade policy, just announced time had come to seek limits on Trump’s discretion in use of tariffs.

 In short, domestic dynamics and politics within the liberal democracies and the engagement of the authoritarian states in influencing them within and without will be a major challenge for 2019 and beyond.

What is clear is that the older period of globalization is over and a period of disaggregation is upon us.

The cartoon was taken from the Brexit brief mentioned above from the London Times.