Stephen Booth: Does Germany’s pledge to rearm signal fundamental change – or is it a temporary reflex?

10 Mar

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

The horror of Russia’s unprovoked and brutal full-scale invasion of Ukraine has been shocking in so many ways. Much about what happens next is uncertain, but the crisis is clearly a pivotal moment, which the West and its allies will be grappling with for many years to come. Vladimir Putin’s appalling actions have upended long-held assumptions about the geopolitics of Europe and are leading to radical and fundamental changes in policy, most starkly in Germany.

Germany has long been the EU’s economic powerhouse but, due in large part to its history, has eschewed a leadership role in European foreign and security policy, which have traditionally been roles for France and Britain. However, faced with the new reality, the new coalition government, headed by the centre-left SDP and supported by the Greens and the liberal FDP, is now embarking on a new course.

For weeks prior to the invasion, Berlin had maintained a longstanding policy of not delivering weapons to active conflict zones. Meanwhile, Olaf Scholz, the new Chancellor, had refused to say publicly if the Nord Stream 2 gas pipeline would be scrapped if Russia moved into Ukraine. This position was increasingly unsustainable, and the pipeline was eventually suspended in response to Putin moving his forces into Ukraine’s eastern Donetsk and Luhansk regions.

A week later, Scholz’s speech to a special session of the Bundestag was the most striking illustration of how the crisis is altering the strategic outlook. Annalena Baerbock, the Green Foreign Minister, described it as a “180-degree turn” in the country’s foreign policy.

Scholz announced that Germany will now “year after year” meet the NATO target of investing more than two per cent of GDP in defence (up from around 1.5 per cent now) and will create a one-off €100 billion fund to modernise its under-resourced military. He committed Germany to NATO’s nuclear sharing, pledging to upgrade its outdated Tornado jets, and reversed the government’s opposition to providing weapons to Ukraine.

On energy, Scholz pledged to reduce dependence on Russian oil and gas, proposing new infrastructure to secure supply from other sources and providing economic support for consumers affected by the transition. There is however no plan to reverse the phase out of nuclear energy announced by Angela Merkel in 2011, which has prolonged German reliance on coal and Russian gas.

Nevertheless, the various policy announcements have overturned decades of German foreign policy and some fundamental tenets of the main political parties.

The SPD has been the party of “Ostpolitik” and has long seen engagement and interdependence with Russia as a key plank of German policy. The first gas pipeline between Germany and the then Soviet Union opened in 1973, under the then SPD Chancellor, Willy Brandt. Scholz also called on another former SPD Chancellor, Gerhard Schröder, to resign from his posts at Russian firms, dismissing the argument that he is now a private citizen, noting that a chancellor’s public service doesn’t end when he leaves office.

The Greens have accepted the pledge to increase capacity for coal and gas reserves and build new liquid natural gas terminals to accelerate the move away from Russian gas. The party’s former leader, Robert Habeck, first raised the prospect of providing Ukraine with defensive weapons in May 2021, but this was controversial with the rest of his party and the increase to defence spending is a major departure from the party’s pacifist roots. The fiscally conservative FDP have accepted the need to take on new debt to modernise the military.

Equally, Friedrich Merz, leader of the largest opposition party, the centre-right Christian Democrats, and Christian Social Union (CDU/CSU) came out with strong support for rearmament. This is significant, since investment foundered during the 16 years of CDU-led government under Angela Merkel. The breadth of cross-party support demonstrates the level of consensus behind this new direction.

These developments have been welcomed by Germany’s international partners, including the UK, who have long called on Berlin to shoulder a greater share of the security burden and re-evaluate its stance on Russia. Speaking to the House of Commons Foreign Affairs Committee this week, Liz Truss said, “I want to praise Germany for their change in stand, because that will have a huge impact. I want to see others follow their lead.”

Delivering the new suite of German policies is certainly more easily said than done. For example, Scholz has so far resisted any EU embargo on Russian oil, judging this too risky a step, which only underlines the country’s dependence on Russian energy. The US and the UK, which announced embargos this week, are less reliant. The EU has instead announced a plan to cut Russian gas imports by two-thirds within a year.

Germany has been repeatedly criticised for free riding on others’ NATO commitments. The question is whether we are witnessing a temporary reflex to the current situation, or whether the political environment has fundamentally changed for the long-term. Just as Germany’s energy dependence on Russia cannot be reversed overnight, decades of drift into quasi-pacifism reflect a deeply embedded outlook. Will this moment mark a shift towards a new forward-leaning posture regarding security and the use of hard power as a deterrent?

But assuming it is a long-term commitment, the planned boost to German spending will make it the biggest defence spender in Europe. However reluctant it is to actively engage in geopolitics, this fact alone will matter by virtue of Germany’s size, history, and geographic position at the heart of the EU. A more assertive Berlin could potentially alter EU and wider European affairs significantly in the years to come.

Emmanuel Macron, who looks likely to be re-elected this spring, has been positioning France to take on the geopolitical leadership of Europe post-Brexit and post-Merkel. However, Scholz may yet become a more influential and decisive Chancellor than Merkel. Recent events will certainly have boosted the relationship between Berlin and Washington.

Macron’s bid for European leadership has centred on a push for EU “strategic autonomy”, but Germany, Eastern Europe, and the UK have been keener to emphasise NATO’s role in European security, which could suggest a stronger role for Atlanticism.

On the other hand, Germany is likely to be reluctant to lead from the front, and German governments have consistently sought to embed foreign policy in an integrated EU framework. The current coalition agreement proposes qualified majority voting for foreign and security policy, with a mechanism to reassure the smaller member states. If this moment marks the birth of a more geopolitical EU, its character and configuration remain up for grabs.

Meanwhile, the UK’s early role in providing military aid to Ukraine and its support for eastern NATO states has been welcomed by several EU members. Broadly, both UK and EU politicians have sought to emphasise how the crisis has demonstrated the need for and value of cooperation on fundamental issues of security and upholding democracy. Truss, along with her counterparts from the US, Canada, and Ukraine, attended the EU’s Foreign Affairs Council last week.

When pressed at the Foreign Affairs Committee, Truss refused to engage in speculation about whether new UK-EU structures in this area might be explored. However, she said, “We do need to re-look at European security architecture. It needs to be tougher, it needs to be stronger, there needs to be much stronger support on the Eastern flank.” The key part of the conversation is between the EU and NATO, she added.

For now the most pressing issue is the appalling unfolding humanitarian disaster in Ukraine, which is only likely to get worse as the violence grinds on. Meanwhile, the war’s wider economic impact will soon be felt by households across Europe in the form of higher energy prices and living costs, which will compound already high levels of inflation. Neighbouring countries will need assistance in coping with the humanitarian fall-out as increasing numbers of refugees flee the country.

However, the crisis is also likely to have profound implications for our European neighbourhood, which require careful consideration.

Garvan Walshe: Germany’s new government may be tougher on Russia and China. Which would suit our own. But there’s a snag.

30 Sep

Garvan Walshe is a former National and International Security Policy Adviser to the Conservative Party.

Foreign policy rarely features much at election time, and Germany’s election last Sunday was no exception. It scarcely appeared during the three Chancellor candidates’ debates, conducted against a background of the US withdrawal from Afghanistan and the Franco-American spat over AUKUS. The result, however, sets the stage for an change in German foreign policy to which the UK will need to adapt.

The centre-left SPD came out narrowly on top with 26 per cent of the vote and 207 seats in the Bundestag. Their Olaf Scholz is likely to move to the chancellery once coalition negotiations conclude.

Angela Merkel’s successor-to-be, Armin Laschet, suffered a true shocker. He gave his CDU/CSU Uniuon their worst ever result ever (24 per cent of the vote and 196 bundestag seats).

Next came the Greens, up a third to 15 per cent and 118 seats, and the liberal FDP (92 seats and 12 per cent).

The far right AfD and far left Die Linke got 10 per cent and five per cent respectively, as their core electorate of elderly former GDR residents dwindles. Fans of the Schlewsig-Holstein question will be delighted to observe the seat won by Stefan Seidler of the Danish minority SSW.

The big electoral shift is not so much the revival of the SPD, up a fifth on their 2017 result, or unmet expectations of the Greens, who did not do as well as their early summer polling suggested, but the decline of the CDU/CSU. This was partly down to an uninspiring and gaffe- prone candidate, but also because of its difficulties in keeping its vote together at a time of electoral fragmentation.

An important strand of the CDU has come to think that a hard-boiled national conservative politics could consolidate the right-wing vote by winning back supporters lost to the AfD. Friedrich Merz, who narrowly failed to become CDU leader after Merkel’s successor Annegret Kramp-Karrenbauer was forced out, epitomised that thinking. This week’s results put its futility beyond doubt. The CDU picked up 80,000 votes from the AfD this time around, but lost almost three million to the SPD, Greens and FDP. If even ultra-moderate Laschet was too right-wing for that many CDU voters, it is hard to see how an AfD-lite offering could not have done even worse.

This election has moved German politics in a liberal, pro-European, pro-green direction. Norbert Röttgen is the CDU man best placed to take advantage. Yet after its battering, the CDU/CSU is now divided about whether even to take part in coalition negotiations. Though Laschet claimed a mandate to enter talks with the Greens and the FDP, many in his party, including the influential Bavarian sister party leader, Markus Söder, are wary. After sixteen years in power, an exhausted Union could do with some time in opposition to refresh itself.

Though a CDU-led government remains an outside possibility, the most likely coalition will be the so-called “traffic light” made up of the SPD (red), FDP (yellow) and the Greens. In a savvy move, the smaller Greens and FDP have decided to forge a joint neogtiating platform (together they acccount for 210 seats, four more than the SPD) that they will then put to the bigger parties’ leaderships.

And although Greens and FDP differ on economics, their positions on foreign affairs are much closer than might be expected. With the Green co-leader, Annalena Baerbock, tipped for the foreign ministry, German foreign policy is not set for radical revolution (this is Germany after all), but it can expect to receive a sizeable shove.

Both parties want to see more foreign policy made at the EU level, and by qualified majorities (rather than unanimity as it is now). The FDP are explicitly in favour of a European army. And while the Greens have a pacifist inheritance that makes them skittish about anything involving nuclear weapons, they have come around to multilateral military deployments abroad. Watch for an effort to change the EU’s treaties to bring all this about. If the new coalition is with the SDP, policy towards Hungary and Poland will also toughen.

Beyond Europe, both these parties are also tougher on Russia and China than both the SPD (whose former leader works for a Russian state oil firm) and the CDU, more focused on human rights, and less on industrial exports. Though they are unlikely to be strong enough to stop the Nordstream 2 pipeline in Germany, expect them to push to have it subjected to tougher EU-level regulation.

Overall, this is an agenda with which the UK can work well — provided it realises that the new government will be even more disposed to conduct its foreign policy through the EU. Bilateral relations will remain polite, of course, but London will find it much easier to pursue its interests if it comes to terms with the growing EU foreign and defence establishment in Brussels and engages with it.

Stephen Booth: As next month’s federal election draws closer, is Germany set for three party government?

26 Aug

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

What direction will Germany take in the post-Merkel era? Change is coming, but the German electorate appears to be undecided on the form it should take. With only a month to go, the outcome of the federal election on 26 September is currently impossible to call.

German politics has become increasingly fragmented in recent years as traditional party loyalties fade. This has been compounded by the end of Angela Merkel’s 16-year reign as Chancellor. More than ever, this election campaign has been dominated by personalities rather than policies, but no standout heir has emerged.

Armin Laschet, Merkel’s successor as CDU leader, was chosen as the conservative candidate best suited to continue Merkel’s brand of consensual, pragmatic politics. He was preferred over Markus Soeder, leader of the CDU’s smaller Bavarian CSU sister party, even though Soeder was the more popular figure with the public.

But Laschet has not enjoyed much personal support and he is perceived to have made several personal missteps in the campaign. The CDU/CSU have fallen from polling numbers of 35 per cent in February, before they announced their candidate, to under 25 per cent in recent weeks, which could herald the party’s worst ever performance.

Annalena Baerbock, the Green’s candidate, enjoyed a short honeymoon after her selection over party co-leader Robert Habeck. The Greens briefly overtook the CDU/CSU as the largest single party in the polls. But after riding high in the spring, the Greens have fallen back into third place, in part following accusations against Baerbock of plagiarism and inflated claims on her CV. Some commentators suggest the Greens, like the CDU/CSU, have chosen the wrong candidate.

Making a late surge to rival the CDU/CSU as the biggest party is the centre-left SPD. The party has struggled following several years as the junior partner in successive Merkel-led ‘grand coalitions’, but its lead candidate, Olaf Scholz, is now by far the most popular choice for Chancellor. Scholz, whose party is largely to the left of him, has benefitted from the lacklustre performance of Laschet and Baerbock, and is the only candidate with experience in senior government posts, currently serving as Vice-Chancellor and Finance Minister.

Meanwhile, Christian Lindner, the leader of the liberal, pro-business Free Democrats (FDP) has also had a strong campaign. The party has benefitted from the Greens’ rise, since the FDP is seen by many centre-right voters as an economically conservative counterweight, and it now stands a strong chance of entering government. The FDP has successfully positioned itself as the defender of small government as the CDU has moved to the centre. At the same time, the FDP’s reputation for modernisation and digitisation has been beneficial as the pandemic, and slow start to the vaccine roll-out, revealed inefficiencies in the public sector.

Ultimately, the race remains wide open. A Forsa poll this week put the SPD on 23 per cent, one point ahead of the CDU/CSU on 22 per cent, the Greens in third on 18 per cent, the FDP on 12 per cent, the Eurosceptic AfD on 10 per cent, and the Left party on 6 per cent.

If recent polling is correct, the only possible governing coalitions would need three parties to work together, likely with either the CDU/CSU or SPD at the helm in combination with the Greens and/or the FDP.  An outside possibility is a left-wing coalition of the SPD, Greens, and the Left. Coalitions of three parties have often been adopted at the state level, but not at the federal level, potentially making post-election negotiations complicated.

This makes the future direction of the EU’s most powerful member state very difficult to predict.

On the domestic front, the big economic debate is about fiscal restraint versus greater levels of investment in climate policies and greater digitisation of the economy. Most of the coalition options would straddle this divide uncomfortably.

When it comes to European and foreign policy, the Greens have offered the most comprehensive change from the Merkel era, but have fallen away in the campaign. The Greens are explicitly in favour of deeper Eurozone integration, calling for the EU’s €750 billion coronavirus recovery fund to become a permanent fiscal capacity, and favour a loosening of the EU’s debt rules.

In contrast, the CDU insists the recovery fund, which allows the EU to borrow collectively, was a one-off crisis measure. Despite describing it as a “Hamiltonian moment”, Scholz has been cautious when asked whether the recovery fund is a step towards a permanent EU borrowing capacity. “That’s not a debate we’re having right now,” he has said. Both the CDU and the SPD seem unwilling to break from Merkel’s cautious, piecemeal approach, where action was often prompted only by crises.

Meanwhile, the Greens are calling for a more active German foreign policy, which is tougher on authoritarian powers, focused on values and human rights. They have suggested that the EU impose import duties on state-backed Chinese companies to prevent environmental dumping and human rights abuses. The Greens have also called for the Nord Stream 2 Germany-Russia gas pipeline to be scrapped, arguing that it undermines security in Ukraine and Eastern Europe.

It should be noted that the Greens have not completely shed their pacifist roots. They remain opposed to nuclear weapons and have criticised demands to meet the NATO two per cent spending target, which Germany has consistently missed under previous governments. But, taken together, the Greens’ stance would tilt German policy in a more Atlanticist direction on the big issues of Russia and China.

While the CDU considers the transatlantic relationship and NATO central to Germany’s prosperity and security, it has also sought to preserve its economic engagement with China and Russia, resulting in a degree of geopolitical ambiguity. Merkel was instrumental in pushing the EU-China investment treaty over the finishing line, despite misgivings from Joe Biden’s team. Both the CDU and SPD have pushed for the completion of the Russian Nord Stream gas pipeline, and Scholz has called for a “new Ostpolitik”, referring to the Cold War-era detente strategy towards the Soviet Union pursued by Willy Brandt, SPD chancellor in the early 1970s.

The situation in Afghanistan is understandably the issue of the moment. Policymakers and commentators will digest the implications for Global Britain and the broader role of the West. Some have argued that the inevitable conclusion to be drawn from the episode is that the UK needs closer foreign policy cooperation with European partners to reduce its dependence on the United States.

There are of course many areas where UK cooperation with the EU and individual member states, such as Germany and France in particular, will continue to be important and this can be assessed on a case-by-case basis. However, it is worth noting the lack of a German, and therefore European, consensus on the major foreign policy challenges facing the West, particularly on Russia and China. Whether desirable or not, any ambitions for a more geopolitical or assertive EU have always been limited, among other reasons, by Germany’s reluctance or inability to take on a leadership role in such a project. There are few signs this is likely to change in the medium term and it is therefore not clear that there is much for the critics of Global Britain to reengage with.

Sam Hall: Conservative lessons from Houchen and Street about how to respond the Greens

11 May

Sam Hall is the Director of the Conservative Environment Network

The dominant stories from last week’s elections were the Conservatives’ hat-trick of English triumphs in Hartlepool, Tees Valley, and the West Midlands, and the SNP falling short of a majority in Scotland. But amid these headline-grabbing results, a new trend emerged: the quiet rise of the Green Party.

The Greens won 88 new council seats across England, including from Conservatives. Yes, they did well in their traditional strongholds, such as Bristol, Sheffield, and around Liverpool, where their main competitor is Labour.

But they also defeated incumbent Conservative councillors across England in places as diverse as Surrey, Sussex, Derbyshire, Stroud, and Northumberland. They won an additional two seats in the Scottish Parliament and an extra member of the London Assembly, recording their highest ever vote share in both contests.

Despite two brief surges around the 2015 general election and the 2019 local elections, the Greens have for decades struggled to break past five per cent of the national vote. But the signs from Thursday are that they are on the rise, and could become an electoral threat not just to Labour, but to the Conservatives too.

The reasons for the Greens’ recent electoral success are varied. Public concern about the environment is at historically high levels, with media and government focus on the issue growing, and climate change impacts becoming more visible. It’s understandable that, as the environment becomes more salient, more voters turn to the party whose defining mission is to save the planet.

Factionalism on the left is undoubtedly boosting the Greens, too. As Keir Starmer repudiates Corbynism, he is pushing some of the party’s more left-wing supporters towards the Greens, who have long supported some of the more radical ideas of John McDonnell, such as a universal basic income. The Liberal Democrats remain toxic to many on the left for going into coalition with the Conservatives. And in Scotland, the Greens provide a more environmentally-conscious alternative to the SNP.

Greens across Europe have benefited from a similar trend. Just a few months out from federal elections, the Greens are currently the highest polling party in Germany, two points ahead of the CDU. Greens are part of the coalition government in Austria, after securing 14 per cent of the vote in the last year’s elections. There was also a green surge in the 2019 elections for the European Parliament, with the green bloc growing from 50 seats to 74.

However, this phenomenon isn’t simply about splintering on the left. Nor is it the case that the Greens are just taking votes off Labour and allowing the Conservatives to come through the middle. As Thursday’s results show, the rise of the Greens threatens both the main parties.

That said, the threat shouldn’t be overstated at this stage: the Greens only control one council, Brighton and Hove (where they are a minority administration), and they still only have one MP. But a response will be needed nonetheless.

First, here’s what to avoid. Counteracting the Greens doesn’t entail copying their policies, which are a bad combination of the unfeasible (net zero by 2030), the unpopular (a meat tax), and the economically damaging (a four day week). But neither should they Conservatives shouldn’t become hostile to the entire green agenda, which is popular with a majority of voters. Nor should they ignore other policy priorities in favour of an exclusive focus on the environment. As James Frayne has argued convincingly on this site, this approach wouldn’t keep the party’s voter coalition together.

Instead, Conservatives should unite behind the strategy that the Prime Minister articulated in his ten point plan for a green industrial revolution, linking net zero to people’s immediate economic concerns. This prospectus has the best chance of binding together the Conservatives’ diverse supporter base and stalling the rise of the Greens.

This strategy has worked well for Ben Houchen, whose tireless advocacy for Teesside is helping to attract many of the UK’s leading net zero investments to his area, from GE’s new turbine manufacturing factory and BP’s blue hydrogen plant, to one of the first carbon capture projects and a hydrogen transport hub. He has been one of the biggest advocates for the PM’s green industrial revolution, including on this site, and was re-elected by a landslide.

The Government should copy this formula in other parts of the country. It should invest in enabling infrastructure, fund large-scale green demonstration projects, and put in place market frameworks to attract private investment in new clean industries, such as battery manufacturing, floating offshore wind, heat pumps, and green steel production.

But while it can unite Conservatives, this approach to net zero is divisive on the left. The red-greens can’t decide if they support ‘degrowth’ as a route to tackling climate change. They debate whether people’s lifestyles must be drastically curtailed, or whether to focus on clean technology. And they are divided over whether to attach radical cultural policies on race and gender to their environmental agenda.

The other main element of the Conservatives’ response should be to implement ambitious but practical environmental policies that improve people’s communities and their quality of life. Here, the Conservatives’ other great election-winner from Thursday, Andy Street, provides a blueprint.

He has overseen major improvements in public and active transport in the West Midlands, reopening rail stations, extending metro lines, putting in segregated cycle lanes, and freezing bus fares. He is showing how mayors can connect up their region, reduce the cost of living, and improve the local environment at the same time.

National government should enable more pragmatic local environmental leadership like this. Ministers could give councils the powers and funding to create and safeguard a new network of wild green spaces (a ‘wilbelt’) around towns and cities. They could devolve more funding to metro mayors to insulate social and fuel poor homes in their regions. And they could fund transport authorities to replace old diesel buses with electric or hydrogen ones, and to install electric charge points along the strategic road network.

The Greens, by contrast, have a poor record of delivery on the few occasions when they’ve been entrusted with office. Remember their failure in Brighton and Hove to arrange the bin collections, which lead to strikes and images of rubbish piled up on street corners. There is a political opportunity here for Conservative environmentalism that sets ambitious targets, actually delivers them, and does so in a way that benefits the economy and people’s standard of living.

The Greens had a good night on Thursday. But by uniting behind Boris Johnson’s green industrial revolution, and replicating the approach of Ben Houchen and Andy Street, the Conservatives can prevent them rising further and can make the environment a winning, unifying issue for the party.

Garvan Walshe: Russia’s building up troops on Ukraine’s border. Here’s what we can do to stymie Putin.

15 Apr

Garvan Walshe is a former national and international security policy adviser to the Conservative Party.

Tanks rolling towards the Ukrainian border. Paratroopers in Crimea. Mechanised troops to the Kaliningrad enclave on the Baltic sea between Poland and Lithuania. A “rotational” but in effect permanent presence on Ukraine’s frontier with Belarus.

These are just the most obviously military steps in Russia’s campaign to divide and confuse the West, and test the mettle of the Biden Administration.

They come as tensions increase in East Asia, with China increasing pressure on Taiwan, and the US trying to enlist Japan into backing up the island. The question on Russia’s mind is who are the Japans – the large, democratic American allies – of Europe?

Moscow could be forgiven for thinking there aren’t any. France was suckered into attempting a “reset” in relations in exchange for cooperation in the North Africa that never materialised. How seriously can Germany be taken until it cancels Nordstream 2? And the UK has just released a review of strategy promising a military tilt towards the Indo-Pacific.

Russia’s big disadvantage is that its economy is still relatively small (its GDP is the same as that of Spain and Portugal, or the Nordic countries), and its autocratic regime needs an expensive repressive apparatus to hold onto power.

Its advantage, however, is that such wealth as it has comes from natural resources, and these are easy for the ruling elite to capture. It’s much easier for the “Collective Putin”, as the ruling elite is sometimes known, to spend them on internal security, military hardware and foreign subversion than it is for a democracy constrained by law, voters unhappy about tax rises, and expensive welfase states.

Putin’s central belief is that the world is a transactional place where raw power is decisive. He finds it difficult to understand the Western talk of values, and dismisses it as cant, just has he knows that Russian lines about non-interference in the affairs of other nations or respect for international frontiers are empty propaganda – to be used, or discarded, as convenient.

But if he cannot quite fathom the levels of trust that Western countries still have for one another, he knows how to erode it by supporting nationalists from Marine Le Pen (whose party received loans from a Russian bank) to Alex Salmond (still a presenter on Russia Today), and of course, Donald Trump.

But 2021 has worsened the strategic environment. Biden has bluntly called him a “killer”. The autumn’s elections in Germany could deliver the Greens (who are not only anti-Putin, but anti-the oil and gas from which he makes his money).

His only solid European ally is Hungary, whose government has bought Russia’s vaccine, hired Rosatom to renovate its nuclear power plant, agreed to host and give diplomatic immunity from regulatory oversight,to the Russian state International Investment Bank, and provided a permissive environment for Russian spies. Viktor Orban’s collaboration with Putin, is however, enough to neutralise the EU’s Russia policy and limit the effectiveness of NATO.

The latest military build up is another attempt to increase pressure on the alliance now that Trump is no longer in a position to destroy it. Ukraine, which was formally offered a path to NATO membership in 2008, has repeated its request to join, splitting its friends from those who profess to be afraid to “poke the bear.”

But if immediate NATO membership for Ukraine is currently off the table, there is an opportunity here for the UK to be a “North European” Japan, and anchor North European security against Russia in support of the US-led alliance. This role should naturally fall to the UK, since France is heavily committed in North Africa, and Germany cannot be expected to be decisive, especially during a year where the election coincides with Russia’s annual Zapad military exercises.

Britain is in a position to convene a coalition of European countries worried about Russia, including Poland, Sweden, Finland, the Netherlands and the Baltic states, possibly with Ukraine in association. A semi-formal initiative and northern analogue of France’s European Intervention Initiative, but obviously more defensive in nature, could focus on reinforcing the territorial integrity of its members, as well as security of the Baltic sea, and develop programmes of mutual assistance in civil resilience for circumstances below those that would warrant the invocation of NATO’s Article Five.

Such an initiative would, I believe, be well received in Washington, where a reinforcement of Britain’s role in the Euro-Atlantic, and not just the distant Indo-Pacific, theatre would bring significant relief.

Garvan Walshe: Merkeldammerung. Germany’s polls put the Greens within striking distance of government.

1 Apr

Garvan Walshe is a former national and international security policy adviser to the Conservative Party

No leader gives up the job entirely on their own terms, but Angela Merkel, who will step down as Chancellor after what will be at least fifteen years in power, came closer than most.

She had the skill to keep the coalition of voters behind her Christian Democratic Union (which governs with its Bavarian sister party, the Christian Social Union) sufficiently broad to dominate German politics for a decade and a half. She’ll leave office as one of the great centre-right Chancellors of modern Germany, along with Konrad Adenauer and Helmut Kohl.

Known for waiting for what seems to everyone too long before making darting radical jumps, Merkel overcame the financial crisis, the refugee crisis, and even dealt effectively with the first wave of the Covid pandemic.

She saw off rivals internal (Wolfgang Schäuble) external (the AfD) and a man best described as standing just inside the tent, peeing in (Friedrich Merz).

Yet she was unable to find a successor. Karl Theodor zu Guttenberg imploded in a plagiarism scandal, Ursula von der Leyen’s mediocre efforts at the defence ministry would be repeated at the European Commission, Annegret Kramp Karrenbauer proved the dampest of squibs, while Armin Laschet was left holding the Coronavirus pandemic as the vaccination programme foundered.

Like every other centre-right party in proportional electoral systems, the CDU/CSU is struggling in a fragmenting political landscape. Party activists worry that she’s losing votes to her right, to the AfD (or, in a more liberal direction, the FDP), while larger numbers of voters defect to the Greens, who have governed impressively in Baden Württemburg (in coalition with the CDU), and who also increased their seats at the CDU’s expense in Rhineland-Palatinate.

The “Union” has a backup plan in the form of Markus Soder, the leader of the Bavarian CSU, who could replace Laschet as the centre-right’s Chancellor candidate in September’s elections, but he is now also suffering from the terrible vaccination campaign and PPE procurement corruption scandals. The Union is now polling in the mid twenties, ten points down on the beginning of the year. This doesn’t look like an election where “more of the same” is a winning formula.

The latest opinion polls have narrowed the gap between the CDU/CSU and the Greens to less than five points, and if the trend continues the Greens could even top the poll in September.

This opens up two new possibilites for post-election Germany. Until this month, it had seemed likely that a coalition between the CDU/CSU and the Greens, headed by a Union Chancellor, would have been the only way to avoid letting either the AfD or the post-communist Linke into national government.

But the green surge increases the options. A “traffic light” coalition, between the Greens, SPD (the social democrats, whose colour is red) and the liberal FDP (yellow), or a Jamaica coalition (after the Jamaican flag, because the CDU’s colour is black) involving Greens, Union and FDP would also add up to a majority. In these scenarios it is the Greens, not either of Germany’s two traditional parties, who could choose who to form a government with.

Germany’s Greens started as a conventional green party emphasising environmental politics, but have evolved into a centre-left formation without the industrial baggage of the SPD, which allows them to take clearer stances against polluting industry or in favour of immigration and accommodating refugees.

If their representation in the Berlin city government is radical (favouring rent control, for example) their adminsitration in prosperous Baden Würtemberg, home to much of Germany’s car industry, has been decidedly more pragmatic. Their independence from German industrial politics has also led them to take stronger stances against Putin’s Russia (remember that Gerhard Schröder, Germany’s former Chancellor, serves as chairman of Rosneft), and Orban’s Hungary.

A green-led government would, perhaps astonishingly, tilt German geopolitics closer to that of the United States. Transatlantic friction over Russia’s Nordstream pipeline to Germany, which both the Greens and Washington are against, would disappear. Leading the govenrment would, however, pose problems for the party in relation to nuclear weapons, with which much of its membership is deeply uncomfortable.

Nevertheless, the German Greens, which hse co-leaders, Robert Habek and Annalena Baerbock, would pursue international policy in step with the UK’s focus on addressing climate change, and upholding international human rights norms against Moscow and Beijing.  Nonetheless, they are strongly pro-European, and a Green-led German government would put renewed energy behind deeper European integration.

In September, the test for the Greens will be whether they can provide the right combination of reasssurance and change for an electorate that prized the stability and integrity Merkel provided them, but is now ready to give the system a bit of a jolt.

George Freeman: The industrial strategy reforms I led helped to deliver Britain’s vaccine success. Now for the next phase.

1 Feb

George Freeman is a former Minister for Life Science and Chair of the Prime Minister’s Policy Board (2016-18). He is co-author and editor of the 2020 Conservatives book Britain Beyond Brexit.

The combination of Covid-19 and the Crash of 2008 have left this country facing the most serious crisis in our public finances since 1776. Unless we make the post-Brexit, post-Covid recovery a transformational renaissance of enterprise & innovation on a par with that unlocked by Thatcher Governments of the 1980s, we risk a decade of high debts, rising interest rates and slow growth.

We have a truly unique opportunity before us. As a science and innovation superpower, with the City of London now outside the EU’s rules for the first time in nearly fifty years, we can unlock a New Elizabethan era of growth – with Britain a world-leader in global commercialisation of science, technology and innovation. It is what our entrepreneurs have been crying out for. Now is the moment to make it happen.

That’s why I’m delighted to have been asked by the Prime Minister to help set up the new Taskforce for Innovation and Growth through Regulatory Reform (TIGRR) with Iain Duncan Smith and Theresa Villiers.

Reporting directly to the Prime Minister & the Chancellor’s Cabinet Committee on deregulation, and supported by a secretariat in the Cabinet Office, the Taskforce will consider and recommend “quick wins” to use our new regulatory sovereignty to unlock high growth sectors of the economy to drive post-Brexit post-Covid recovery.

Rest assured: there will also be no big report or a thousand pages of footnotes to wade through. We will be crowd-sourcing the best ideas from the business community and the entrepreneurs and innovators who are the engine of our economy.

The Prime Minister has asked me to bring my career experience in business starting & financing high growth bioscience technology companies as well as my experience as Minister in Health, BEIS and Transport leading our groundbreaking Industrial Strategy for Life Science which has paid such dividends this year.

The reforms I led in our Industrial Strategy – launching Genomics England, the Early Access to Medicines Scheme, MHRA and NICE reform, Accelerated Access procurement have been fundamental to our ability to lead the world in developing a Covid vaccine.

We now need to make Brexit & Covid the catalyst for bold reforms to unlock big UK opportunities for recovery & GlobalBritain across a range of high-growth sectors such as those I have worked on extensively as both entrepreneur and Minister:?

  • LifeScience: harnessing the potential of the NHS as a research engine for new medicines, unlocking digital health & innovative approaches to Accelerated Access, clinical trials & value-based pricing.
  • Nutraceuticals: health-promoting “superfoods”, cannabis medicines.
  • AgriTech: smart clean green twenty-first farming technology like the blight resistant potato banned by the EU.
  • CleanTech: new biofuels, Carbon Capture & Storage & digital “smart grids” to reward households & businesses for generating more and using less.
  • BioSecurity: harnessing the potential of Porton Down and UK vaccine science for plant, animal & human biosecurity.
  • Digital: removing barriers to UK digital leadership outside the EU GDPR framework.
  • Hydrogen: using the full power of Gov to lead in this key sector as we did in genomics.
  • Mobility: making the UK a global test-bed for new mobility technologies,

Before being elected to Parliament, I spent 15 years working in life sciences around the Cambridge cluster, financing innovation. I saw time and time again how the best British entrepreneurs and their companies struggled to build business to scale here in the UK.

So often we have invented the technologies of the future and failed to commercialise them effectively.

After several years working as the Government Life Science Adviser, I published my report for the Fresh Start Group on The EU impact on Life Sciences: Avoiding the Global Slow Lane.

Three years before Brexit, the report was the first to highlight the growing hostility of the EU to ‘biotech’ and the increasing tide of ‘anti- biotech’ legislation – driven by a combination of the German Green Party, Catholic anti-science and lowest commons denominator regulation by the “precautionary principle” which was having a damaging effect on the Bioscience Economy and risked condemning the EU – and by extension the UK – to the global slow lane in biotechnology.

The report set out how the genomic revolution was beginning to offer untold opportunities across medicine and agriculture to help generate huge economic, social and political dividends for mankind. Billions of people were being liberated from the scourge of insufficient food, medicine and energy. The main threat to that? The EU’s hostile regulatory framework.

This was seen clearly in numerous case studies. At the time, the EU’s hostility to GM led German-based BASF and major U.S firm Monsanto to announce their withdrawal from Europe in agricultural research and development. My report argued that unless something was done soon, other companies would follow suit, with dire consequences for the UK Life Science sector.

The report recommended a shift away from the increasingly widely used risk-based ‘precautionary Principle’ and greater freedoms around data protection, using public healthcare systems to help accelerate early access to medical innovations, and for the UK to be able to ‘go it alone’ in designing appropriate regulatory frameworks for GM crops.

The UK’s departure from the laws and requirements of the EU provides us with a once-in-a-generation chance to redesign and improve our approach.

This new Taskforce, therefore, is emphatically not another long-term Whitehall de-regulation ‘initiative’. Neither is this is about cutting workers’ or environmental rights that we rightly guaranteed in the 2019 election manifesto.

It is of vital importance that the UK maintains the high regulatory standards that we have consistently championed. In some of the fastest growing new sectors like Digital Health, Nutraceuticals and Autonomous Vehicle Tech, clear global regulatory standards are key to investment confidence. By setting the new global standards here in the UK we can play a key role in leading whole new sectors.

But we must think innovatively about supporting businesses to start and grow, and make the most of the cutting-edge technologies and sectors we nurture in our universities for global impact. For example, why don’t we use our freedom to pioneer new disease and drought- resistant crops, and use our aid budget and variable tariffs to help create new global markets for UK Technology Transfer?

We won’t unlock a new era of the UK as an Innovation Nation generating the technologies and companies of tomorrow with technocratic tinkering. We need bold leadership, clear commercial vision and reforms to support innovation and enterprise. The two go hand in hand. We won’t unlock an innovation economy without an enterprise society. So we will need to look at tax and regulatory incentives for high risk start/ups like the “New Deal for New Businesses” I proposed back in 2010 to drive recovery after the Crash.

This is a once-in-a-generation moment. Together we must seize it.

Daniel Hamilton: So we have a new CDU Chairman. Will a CDU-Green coalition follow after Germany’s federal election?

18 Jan

Daniel Hamilton works in international business consultancy and was a Conservative candidate at the 2017 General Election.

In September, Angela Merkel will step down as German Chancellor after sixteen years in office. Regardless of how one may judge her record, Merkel’s influence over the substance of European governance has been immense; from stamping her mark on EU fiscal rules to her open-doors policy during the migrant crisis to her final ascent for the UK’s post-Brexit deal.

The cast of names that have come and gone during her term in office – Tony Blair, David Cameron, Theresa May, Jacques Chirac, Francois Hollande, Nicolas Sarkozy, George W.Bush, Barack Obama and Donald Trump– is without modern compare.

Partly because of constitutional constraints and partly due to post-war caution and conservatism, stability is a feature of German politics.  Since 1982, Germany has had only three Chancellors.  In the same period, the UK has had seven Prime Ministers.  Italy has had twenty-two.

The Große Koalition between the Christian Democrat Union (CDU) and Social Democrats (SPD) has now largely served in office since 2005.  This has effectively resulted in the two main parties adopting a similar, centrist persona, with disagreements tending to focus on tweaks and cadences of policies rather than fundamentals.

This has arguably hurt the SPD most, whose traditional platform, once grounded in patriotic labour unions and cosy accommodations with big businesses, has fractured as Germany has become more ethnically diverse, more start-up friendly and more ecologist in its views.  The party won 41 per cent of the vote in 1998, yet polls around 15 per cent today.

The CDU has its own problems.  Distinct from what “voting Merkel” meant – centrism, no surprises and the social market, with a strong nod to environmentalism – the CDU’s platform has a rather hollow feel.  It is accepted, for sure, that the party stands for the defence of Germany’s social market economy and a punchy approach to German influence at an EU level, yet its pro-immigration stances and seeming intransigence on tax cuts and deregulation have separately irked working class voters and entrepreneurs.

With the CDU and SPD unable to define their appeal effectively, an opportunity exists for other parties to gain ground.

While the hard-left Die Linke and market-liberal Free Democrats (FDP) are polling well enough to have a respectable presence in the next convocation of the Budestag, it would be wise to follow the public remarks of Die Grünen, Germany’s Green Party.

Overseas perceptions of the Greens are somewhat outdated and tend to revolve around images of the “68ers” – a radical student movement founded on ending the military draft, opposition to the Vietnam war and the modernisation of a stodgy political system still inhabited by the wartime generation.

Their march to the mainstream has, though, been a long one.

The decision in 1998 of Joschka Fischer, a veteran 68er and the country’s Foreign Minister during the Green coalition with the SPD, to advocate NATO airstrikes on Yugoslavia over the Kosovo crisis upended the party’s pacifism-at-all-costs agenda, and led Germany into an overseas conflict for the first time since World War Two.  A Green Minister-President, Winfried Kretschmann, has governed the manufacturing-dominated state of Baden-Württemberg in coalition with the CDU for more than a decade; implementing a pro-business, R&D-friendly agenda that feels more modern than the SPD’s staider rhetoric.

The issue of immigration is as polarising or more so an issue in Germany as in other European countries, yet polling suggests that recent-naturalised Germans and the descendents of the Gastarbeiter generation which moved to the country from Turkey and Yugoslavia in the 60s and 70s lean strongly towards the Greens.  This offers the party another electoral advantage over the SPD.

There is much to dislike – or even, given the party’s more extreme factions, fear – in the Green Party’s platform, but the fact remains that the party appears to be on the verge of stitching together arguably the most electorally-appealing platform in German politics today.

With the CDU on course to win roughly a third of the vote when September’s elections come, the Greens on upward or around 20 per cent of the vote and all other blocks trailing far behind, the prospect of a CDU-Green, Schwarz-Grüne coalition is a distinct possibility.

The election of Armin Laschet as the new Chairman of the CDU on Saturday morning would, on the face of it, appear to represent a “safe” choice for the party.  Coverage of his victory has focussed on his jolly nature, centrist political brand and stewardship of North Rhine-Westphalia, one of Germany’s most important manufacturing hubs.

A debate will take place in Germany during the coming months as to whether Laschet will be the party candidate for Chancellor (he faces a potential contest including the guttural Bavarian Governor, Markus Söder, and the liberal Health Minister, Jens Spahn), yet this is a battle he is likely to win.  The fact he was able to see off the socially-conservative, immigration-sceptic Friedrich Merz and media-friendly Norbert Röttgen to win the top job suggests the party is looking for stability, not revolution.

There is little debate about whether the CDU and its Bavarian affiliate, the Christian Social Union, will win the plurality of votes in September.  With Laschet as their candidate, a Große Koalition with either the rump remainder of the SPD or resurgent Greens would appear to be both mathematically and politically possible.

CDU/CSU voters have proven to be a loyal block, yet their combined 45 per cent vote share in 2013 is a distant memory.  They now poll 35 per cent.  The price of such a fall in support is that no clear path exists for Laschet to pursue a coalition with the CDU’s traditional partners, the liberal FDP.  His only options are on the left.

Given the recent momentum of the Greens, it is not beyond the realms of possibility they could further erode support from the SPD and Die Linke, leading to an electoral percentage showing in the high twenties.  In this scenario, the pressure from both Green insiders and those on the left, battered by sixteen years of losses, for a leftist GroKo may be insatiable.  The price of such a coalition, particularly for Die Linke, would likely be the shelving of Green moderation in favour of a distinctively leftist agenda.

The implications of such a centre-left coalition would be profound – for both the UK and EU.

Notwithstanding recent Coronavirus-related speeding, a coalition of this kind would see the abandonment of the ‘Schwarze Null’ fiscal policy that mandates a balanced budget domestically and higher taxes on personal incomes and business.

For a post-Brexit UK, seeking to steer a path as a low-tax, regulation-light economy, a malcontent leftist coalition in Germany would likely serve as a Trojan Horse in the European Council for policies designed to disadvantage and undermine UK interests.

For all the criticisms of Laschet’s unambitious centrism and the gap that exists between British conservatism and the CDU’s social market economy orthodoxies, the preferred outcome for the UK is clear.