UK, France, EU, US and much else including Christmas

A new dawn in Anglo-French political cooperation, demonstrated by the signing of a potentially ground breaking military treaty & followed by unprecedented physical cooperation in Libya has given way to unedifying sniping worthy of jostling teenagers in a school playground.  France has now apparently agreed to cool the temperature on the basis that it should be understood that Britain - or more precisely George Osborne - started it!  The childish behaviour by both sides relates however to a serious subject; the relative likelihood of each country hanging on to her AAA credit rating.  The crisis has led to ballooning deficits and public debt in both countries though also, it's fair to say, credible austerity programmes in both.  However, just as Britain's job is made dramatically more difficult as a result of Gordon Brown having run a deficit of 3% of GDP and more, over 7 years of economic boom prior to Lehman's collapse; France's medicine is far bitterer than would have been the case had Sarkozy not wavered from his election platform to trim the size of France's leviathan State.  In not one year since Sarko came to power has public spending fallen below half of the entire economy — not exactly the 'rupture with the past' he had promised on the campaign trail. 

The most recent Anglo-French hostility is of course a result of Cameron's veto wielding at the last European summit.  What is surprising is just how genuine the hostility appears to be.  There was a popular view that everyone was playing their preordained role with France and Germany proposing changes to the Lisbon Treaty that all players knew very well the UK could never accept.  Having played the only card in his hand and exercised the veto, Cameron gave the Eurozone 17 and any others who wished to participate, the necessary freedom to negotiate an intergovernmental treaty which would not - unlike a change to the Lisbon Treaty - automatically trigger a referendum in many of the participating countries; thus allowing the process of fiscal harmonisation amongst the eurozone members — essential though not sufficient for the currency's survival — to proceed at a less snail-like pace.  It seems those of us who read the situation this way were labouring under a massive misapprehension and that, in fact, France and Germany really did expect Cameron to roll over and agree to a modified Treaty without any of the relatively modest safeguards the UK was seeking for the City.  Moreover, various countries do still, it seems, need to ask their electorates to vote yay or nay to the proposed intergovernmental arrangement.  The level of ignorance displayed by all sides is baffling; both on the part of our negotiators who apparently had no idea as to our European partners' unwillingness to entertain the UK's proposals (for preserving the competitiveness of the City), and that of France, Germany & the European Commission in not understanding that their proposition could never have been accepted by any British PM - Tory or indeed Labour.  What on earth were the diplomats up to in the run up to this summit?  Anyway, after all that, the summit and the proposed intergovernmental treaty seem to have been for nothing and the eurozone, the Euro and hence the global economy all remain on the very edge of a precipice.  2012 could spell the word UGLY in floodlights if Merkozy and the ECB don't come up with a game changer.  

Things are perhaps a touch better in the US where there is at least growth, some anyway, and Obama has managed to outwit an intransigent congress to get the payroll tax cut extended by two months.  Given that this is already being touted as a major victory for the man the party with the intellectual capacity of amoebae - that is to say the Republicans - believe is a hoof and horn sporting communist, it seems likely that the Tea Party headbangers egged on by the abominable Grover Norquist will do everything in their power to subordinate the American economy to their singular & myopic aim of ensuring Obama is a one term President.  If the price of ousting their nemesis is economic rack & ruin they seem predisposed toward signing the cheque on behalf of the American people and the rest of us.  

All this in the context of North Korea's totalitarian self styled monarchy now being headed by a child and Iran apparently ever closer to acquiring a nuclear weapon; something the US and Israel will not tolerate, and all that this implies.  To boot, Israel's PM Bibi Netanyahu is a disingenuous player who has no interest in making peace with the Palestinians and so, akin to the Republicans in the US, will merrily subordinate the fate of his own people to his perennial political vanity.

Given all the above and the changes we have seen/are seeing in Tunisia, Egypt, Libya, Syria and Russia; the world is possibly at its most unstable than at any time since the height of the cold war.  Add in the two wild cards of North Korea and Iran, plus an economic context that might, if the eurozone does implode, be worse than anyone's greatest fears; and the Mayan prophecy for 2012 is perhaps something we should credit as more than just a fringe belief!?

I'd like to make the disclaimer that the author of this page is naturally an optimist!

Merry Christmas everyone and to misquote Shane MacGowan & Kirsty Maccoll - let's hope it's not our last!

South African model for Russia?

This post is in response to the following question asked by a good friend of mine in Moscow: "What would you see as an ideal, however realistic scenario (use real current players on both sides)?"

Judging what is or what might be realistic is a very difficult call given that what was deemed utterly unrealistic yesterday has a habit of becoming tomorrow's reality.  2011 is converting the realm of fantasy into stark reality with alarming speed.  Those who hoped to see Mubarak tried for corruption - as the lightest charge deserved - were occupying an unrealistic position until he appeared in court.  Saif Gadaffi was deemed the leading light of the reform movement in Libya but will now go on trial for crimes against humanity either in Libya or - less likely - The Hague.  The Syrian people are rising up against the Assad regime in a fashion that would have been deemed utterly unrealistic not so long ago.  The idea of 50,000 Russians, a people so emphatically disengaged from politics, demonstrating in Moscow would have been fantastical until Putin was booed at a martial arts fight setting off a chain reaction which led to 50,000 protesters becoming a reality.

What realistic scenario can emanate from the current political crisis?  Moreover what constructive scenario can follow?  The bottom line must be that the parliamentary election is re-run.  Right now that seems unrealistic but might not seem so tomorrow.  The main demand is that the people's votes are counted and that they are represented accordingly.  This would almost certainly lead to a government comprised of parties other than United Russia and, consequently, of someone other than Putin becoming president next March.  Therein lies the fundamental problem: Putin must run - and win - and his colleagues must stay in power as he & they see it as the only way to keep the staggering number of $ billions - perhaps well in excess of $100bn - that have been amassed over the past decade.  They also see it as the only way to maintain their freedom.  Andrei Piontkovsky quoted a 'Kremlin ideologist' in an excellent editorial in the Wall Street Journal (not usually my favourite paper) today as saying "We perfectly realise what is going on.  But its too late to jump off the train.  The new authorities will come after us and arrest us if we lose power.  That's why we have no option but to keep running like a hamster on a wheel".  There's the rub; every single actor on this stage could be prosecuted.  The entire edifice is rotten to its very foundations.  Everyone knows the corruption is monumental but the rot goes beyond kickbacks and the theft of state funds.  What would happen if the apartment bombings of '99 were thoroughly investigated?  What would happen if we could benefit from a proper enquiry into the destruction of Yukos, and those who profited from it?  What would happen if those responsible for the murder of Sergei Magnitsky (whom I had the fortune to know, albeit briefly) were brought to justice and their wider relationships with more senior actors in the corridors of power exposed?  Pull on one thread and it all unravels.

Russia has had enough revolutions and re distributions; something the protesters and Russians in general are apparently weary of.  So how does one reform the system and make a dramatic break with the past without tearing down the whole damn edifice, leading to inevitable profiteering by those claiming to rebuild it in the name of the people?  There needs to be a 'way out' whereby the perpetrators of crimes can know they will at least keep their freedom.  

The only process I can envisage is justice without retribution.  The populace needs to know exactly what has happened, who has stolen what and the details of crimes which are likely to include many far worse than theft.  By instituting a system similar to South Africa's Truth & Reconciliation Commission - whereby those who admit their crimes in detail are granted immunity from prosecution - Russia can benefit from the catharsis she was denied in the aftermath of the Soviet Union's collapse.  Unlike the examples, to name just three, of Poland, Estonia, & the Czech Republic where the old guard were largely expelled from political involvement; so many of the nomenklatura remained in power in Russia - and now not a few are billionaires guarding their treasure - which is the root cause of the imperfection of Russia's transition and why it has been so much less complete than is the case for its former Eastern Bloc vassals.  

Justice without retribution would, or might, allow those who are guilty to finally relinquish power without blood being spilt and allow the people to understand the full extent of crimes committed and lies serially told; thus affording a more transparent, representative, responsive and effective system to develop.  A system that would not rely on the current regime's preferred mechanism of show trials and jailings.  That might not seem realistic now but between now and March '12 who knows?

Prokhorov, Gryzlov, Usmanov

The media is abuzz with news of Mikhail Prokhorov's stated intention to challenge Putin for the presidency. Regime stooge or genuine challenge? A little chronology for the sake of completeness:

- June 25th Prokhorov is appointed as leader of 'Right Cause' - a Kremlin sponsored lightening rod for the liberal vote.

- September 16th Prokhorov is removed from Right Cause whilst Prokhorov simultaneously urges supporters to desert the party. He attacks Surkov - chief 'political technologist' of the Kremlin - for wanting to be the puppeteer but surely Russia's 3rd richest man didn't really believe he would be allowed to proceed according to an independent course? Or did he think that once in place he could cut the puppet strings?

- December 12th Prokhorov announces he will run for office having stated a few days earlier that Putin is the only man capable of running the 'inefficient state machine'.

Given Prokhorov's public spat with ideologue-in-chief Vladislav Surkov he could claim some credibility in opposing the regime. The problem is that the man has form, having been willing to act in concert with the Kremlin in the first place. Moreover it seems a tall order for a man worth $18bn to risk everything. The most likely explanation must be that he has reached some sort of accommodation with a regime desperately looking for a safety valve. By agreeing to play that role whilst at the same time espousing an alternative platform perhaps Prokhorov is trying to maneuver himself into an enviable position whichever way this political crisis manifests?  Having said that, it is difficult to see an oligarch who was instrumental in loans-for-shares being celebrated by the 'Bolotnaya Ploshod Caucus'!

Boris Gryzlov, Speaker of the Duma for the last 8 years, resigns having been a loyal servant to Putin and instrumental in the creation and maintenance of a supine parliament. Potentially a very significant event though as ever the back story is far from clear.

Alisher Usmanov, owner of Kommersant (an independent and authoritative daily in Russia), fires the editor in chief of the weekly magazine Kommersant Vlast (along with the director general for the holding company) for printing allegations of election rigging and a picture of Putin with unflattering slogans. Journalists are fired all the time for 'infractions' by owners, either after getting a call from the Kremlin or in anticipation of one. What is surprising here is how far the journalist felt emboldened to go. The heat is rising!

Weekend's Events - December 11th 2011

Russia

Finally it happened.  The social compact between the Kleptocracy and its subjects mutated into something approaching the relationship between state and citizen and all of the implications of legitimacy - or lack of - that this highlights.  Without the props of apartment bombings, a Chechen war, a war against the oligarchs - or certain of their number - or any other narrative; United Russia relied on its status as the 'ruling party' and guarantor of so called stability to try to attract the votes it manifestly failed to garner.  Given that ballot boxes were stuffed like the proverbial Christmas turkey and United Russia - the notorious party of 'crooks & thieves' -  still could not breach the 50% watermark is an indictment of monumental proportions against the regime.  The dramatic decline in UR's fortunes should not be underestimated.  The last Duma elections gave UR a constitutional or 2/3rds majority but it's likely that, given the overwhelming advantage of one sided & fawning TV coverage, UR would in 2008 anyway have received a comfortable absolute majority based on the will of the people.  The 'dark arts' probably just made the difference between that and the constitutional majority that was so important for the then impending Putin & Puppy Dog tandem. 

Despite the fact that workers of state enterprises were instructed to vote one way on pain of the dole; despite the fact that no true opposition parties were permitted to register for the elections; despite the fact that the Caucasian republics - ruled by strongmen for whom the rule of law is even more of an abstract concept than for Moscow's 'Siloviki' - returned stupendous results for UR of circa 99%; despite this entire grotesquely undemocratic and amoral reality, it took the falsification of over 20% of the votes in Moscow - that is to say merging the gap between exit polls of around 27% and a manufactured tally of around 48% - to give United Russia a majority in the Duma this time.   UR returned around 30% in many districts including St Pete and 'stuffing' the result was either too hard or too obvious or many of the districts were deemed too inconsequential!! As if the Russian people could not be insulted further, the ruling elite could not be bothered to falsify the votes in certain regions on the basis that ballot stuffing in the capital would give the desired result.  But it is testimony to how disconnected the regime is from reality that - as far as we know - the most egregious examples of falsification took place in the capital where the people are the most educated, have the greatest opportunities that are not based on the largess of UR and are the most web savvy and 'socially networked' group of the whole Russian Federation. As the apathy of the past 10 years & more seems finally to be giving way to mobile & vigorous indignation; it was very definitely not a clever strategy to target Moscow as the epicenter of such an audacious attempt at political swindle.

I personally know many of the people who went to Bolotnaya Square yesterday, not knowing if they would be arrested or beaten, the same people who told me over and over that they had no interest in politics.  Many of them I am sure are less motivated by political objectives than one main and fundamental imperative which is to be treated with respect - intellectually, physically, morally.