Showing posts with label Adriatic. Show all posts
Showing posts with label Adriatic. Show all posts

Friday, October 20, 2017

Europe"s Secession Problems Aren"t Going Away

Authored by Ryan McMaken via The Mises Institute,



Earlier this week, The New York Times noted that movements for greater local autonomy appear to be spreading throughout Europe. In some ways, the conflict in Catalonia is just the tip of the iceberg. The Times reports


Coming on the heels of the Catalan vote, the Lombardy and Veneto referendums are yet another signal of the homegrown conflicts that persist in many of the European Union’s member states. Separatist movements are also simmering in Britain — where voters in Scotland rejected independence in a 2014 referendum but continue to debate the issue — as well as France, Germany, Belgium and Romania.



Like Catalonia - and unlike Scotland - the Lombardy and Veneto regions of Italy are among the wealthiest regions, and send enormous amounts of tax revenue to Rome. Italy"s southern regions, which are significantly poorer than northern Italy, have benefited from Northern wealth ever since Italians were all forced into a single nation-state in the late nineteenth century. 


This has never been forgotten by Italians from Veneto, many of whom participated in a referendum in 2014 to declare Independence. Naturally, the Italian government in Rome declared the vote invalid. At the time, however, I interviewed one of the organizers Paolo Bernardini about the referendum. (See "Inside Venice"s Secession Movement.") At the time, secessionists liek Bernardini appeared to be pursuing immediate and total independence from Rome, while remaining inside the EU: 


A tiny majority of Veneto people are in favor both of the EU and of the Euro as a currency. So I envisage a little, rich state, playing a major economic and political role in the EU, a stabilizing role. It will interact naturally with other rich and similar states, Bavaria (still part of Germany), Austria, and the Netherlands. It will be a Finland in the Adriatic. 



According to the Times piece, though, supporters of Northern independence have gone back to taking small steps, and realize - probably correctly - that there are numerous steps that must be taken between the status quo and total independence. 


The new effort appears to be focused on conducting local plebescites demanding more local autonomy. This doesn"t conflict with the goal of eventual independence, of course, although it probably is an essential first step. 


Flemish Independence? 


A region taking a gradualist approach is the Flemish-speaking region of northern Belgium, also known as Flanders. The Flanders situation has been noted in a multitude of media outlets looking to find "the next Catalonia." CNBC reports


Political groups such as the New Flemish Alliance, a nationalist, conservative group which is dominant in the Belgian parliament, advocate a gradual secession of Flanders from Belgium. Euronews reported that the party even hung a Catalan flag outside its headquarters recently in support of the Spanish separatist region. With elections in 2019, the issue of Flemish independence is not likely to disappear soon.



The Catalonia and Scotland situations have brought secession issues to the fore in the English-language media, but there"s nothing new about Belgium"s problem. The unlikely unions of French-speaking and Flemish-speaking regions date back to 1830 when northern regions of Belgium won independence from the Netherlands. The resulting union known as Belgium has never been a totally comfortable one, as noted in a 2007 Chicago Tribune article, which compared Beligum to an unhappy and tired married couple


They stay together mainly out of habit, and also because it would be such a headache to break up the household and divide the communal property.


 


If you know a couple like this, then you will understand the Belgians.


 


Dutch-speaking Flanders and French-speaking Wallonia are trapped in a loveless marriage called Belgium.


 


In today"s Europe, divorce no longer carries the opprobrium it once did. The Czechoslovakians had a very amicable split in 1993. The Yugoslavs less so. Even Scotland and England are talking about a separation.


 


But in Brussels, which these days feels more the capital of the far-flung European Union than the capital of a medium-size European nation, polite Belgian politicians don"t like the D-word. They wish the whole issue would just go away.


 


It won"t. That much became clear in December when RTBF, the French-language state broadcaster, interrupted its regular programming with an urgent bulletin announcing that Flanders had declared independence.


 


Grainy footage showed King Albert II and Queen Paola heading for the airport to flee the country. There also was video of trams stopped at the new Flemish border, and live interviews with familiar politicians discussing the crisis.


 


Not until half an hour into the broadcast did the message "This is fiction" appear on the screen. Too late. Embassies in Brussels already had scrambled to seek clarification while thousands of worried callers jammed RTBF"s switchboard...


 


Belgian politicians were not amused.



Mind you, this was back in 2007 before it had become well established that the Scots could vote on their own Independence, and before the British voted for Brexit. 


These more recent developments make regionalist movements such as those in Spain, Italy, and Belgium of increasing notability. 


The question remains, however, if nation-states lacking the Anglo-Saxon deference to electoral politics will be as tolerant of election outcomes as the British appear to be. 


The Democracy Problem 


At the core of all these issues remains an unanswered question: If a majority of voters in a region vote for independence or greater autonomy, will the vote be respected by the central government?


After all, European nation-states have for decades been lecturing the rest of the world about the wonderfulness of democracy and how "the will of the people" must prevail. At the national level, it is simply assumed that "the will of the majority" is what grants a state a "right" to rule over the citizenry. 


But if a majority in a specific region votes for a divorce from the central government, is all this talk about democracy and the will of the majority to suddenly be ignored? 


Ludwig von Mises, of course, in his book Liberalism, advocated for the idea that any region, right down to the village level, be allowed to gain independence based on the outcome of a freely held plebiscite. 


In recent years, opponents of independence movements in Italy and Spain have bickered over the way these votes are being conducted, and over the extent to which a majority actually wants indepenence. 


These arguments are good at buying time, but they conveniently ignore the central problem at hand: if Catalonia held a fair-and-square election, and, say, 75 percent of eligible voters opted for independence, would the Spanish government allow independence? What about a similar situation in northern Italy? It"s a yes-or-no question, but it doesn"t seem to be one either the Spanish or Italian government is willing to answer. 


Thus, Europe"s democracy problem persists. Is democracy only allowed when it is no threat to the established status quo for nation-states? Should the central government send in the troops to beat citizens and seize ballots when people vote "the wrong way"? 


This isn"t just a problem for Europe, of course. Most of the "democratic" world, including Europe and the Americas, has a similar problem. 


Old Borders Have Outlived their Usefulness 


As time goes on, though, it"s going to be harder and harder for nation-states to defend the current configuration of their national borders. 


The current model of nation-states is based on the idea that a single metropolis, or a group of them, can control surrounding rural frontier areas for reasons of military strategy and to ensure a food supply for the metropolis. In return, the wealthy metropolis will protect frontier areas from foreign invasions, and provide some semblance of order to far-flung regions lacking the wealth and power of the metropolis. 


This system of nation-states began to take firm shape in the seventeenth century, and was finally solidified in the nineteenth. The world wars of the 20th century showed us the heights to which nation-states can reach, and the extent to which they can seize and control resources.


This old model, however, was initially based on the idea that populations would be largely agricultural and rural, and that personal, cultural, and economic networks would be focused around the nation-states themselves, and the people within them.


As time has gone on, though, urbanization, international trade, and international communications have grown far beyond what the national governments of old could have ever imagined. Capital cities in nation states no longer command the attention and economic focus of other powerful cities within their nation states, and trade with foreign populations has in many cases become more important that trade within one"s own nation-state. Agriculture is no longer a key source of wealth, which makes city-states with only small rural hinterlands increasingly viable. 


At the same time, these newly forced international connections reduce the importance of the old nation-states as "protectors" from the neighboring regions. After all, if trade with the foreigners next door is just as important as trade with one"s own countrymen, it becomes increasingly difficult to see what one"s national government is offering protection from


Does northern Italy really need protection from Austrian or Swiss invaders? Does Flanders need protection from the Netherlands? In an age of thorough economic integration, a war between two European states would mostly be a matter of mutually-assured economic destruction. 


Nevertheless, the force of habit is an important factor in political ideology. Many people continue to see their national borders as quasi-sacred, reacting with horror at the idea that their nation-state should be "dismembered." National governments are careful to downplay the fact that the borders of most modern nation-states barely reach back as far as the nineteenth century. Even a look at a map of Europe from 1945 should disabuse us of any notion that national boundaries are anything but temporary. 


In fact, border changes can often be measured in lengths of time similar to those of a single human lifetime. But this doesn"t stop commentators from declaring that such-and-such region or such-and-such state (i.e., California) will never secede or dramatically change its national status.


In politics, claims of "never" should always be treated as laughably naive. 100 years is quite long enough to completely change the map of the world. 










Tuesday, July 4, 2017

Trump Hopes To Quietly Steal Russia's Natgas Dominance Over Europe

One month ago, after the shocking collapse of the Gulf nation status quo with the announcement of the diplomatic, naval and financial blockade of Qatar by the Saudi alliance, we said that while it is unclear how this latest political fiasco plays out, one thing was certain: with Saudi Arabia and Qatar suddenly adversaries, any likelihood of a Qatari natural gas pipeline crossing Syria - the fundamental cause behind the Qatar proxy war in the first place - was gone.


But one key question remained: why would Europe vacate all hopes of an alternative provider of cheap, copious LNG and concede the role of quasi-monopolist supplier of this critical for Europe resource to Gazprom, and thus Russia whose leverage over the continent would only grow as a result.


We now have the answer: none other than Donald Trump has been hoping to "steal" Russia"s European natgas relationships and clients, in hopes of making the US become the dominant supplier of LNG to Europe. According to Reuters, Trump "will use fast-growing supplies of U.S. natural gas as a political tool when he meets in Warsaw on Thursday with leaders of a dozen countries that are captive to Russia for their energy needs."



The love-but-mostly-hate relationship between Russia and Europe is familiar to regular readers: in recent years, Moscow has cut off gas shipments during pricing disputes with neighboring countries in winter months, or when the conflict with Ukraine resulted in a halt of transit shipments via the energy hub.


This is where Trump"s plan kicks in: exports from the United States would help reduce their dependence on Russia. Trump will tell the group of European nations that Washington wants to help allies by making it as easy as possible for U.S. companies to ship more liquefied natural gas (LNG) to central and eastern Europe, the White House said. Trump will attend the "Three Seas" summit - so named because several of its members surround the Adriatic, Baltic and Black Seas - before the Group of 20 leading economies meet in Germany, where he is slated to meet Russian President Vladimir Putin for the first time.


Among the aims of the Three Seas project is to expand regional energy infrastructure, including LNG import terminals and gas pipelines: in other words to replace Gazprom as the dominant supplier of European nat gas with US suppliers. Members of the initiative include Poland, Austria, Hungary and Russia"s neighbors Latvia and Estonia. According to James Jones, a former NATO Supreme Allied Commander, Trump"s presence will give the project a lift.



While it goes without saying, Jones adds that "Increased U.S. gas exports to the region would help weaken the impact of Russia using energy as a weapon or bargaining chip."


"I think the United States can show itself as a benevolent country by exporting energy and by helping countries that don’t have adequate supplies become more self-sufficient and less dependent and less threatened," he said.  It will also, if successful, infuriate Putin and the Russian energy establishment.


Meanwhile, Trump"s Russia policy is still taking shape, a process made awkward by investigations into intelligence findings that Russia tried to meddle in the 2016 U.S. presidential race. Russia denies the allegations and Trump says his team did not collude with Moscow. One thing that Trump has made clear during his campaign is that he wants to pursue ways to de-escalate tensions with Russia, however it is the deep state that prevents any such overture with yet another barrage of "Russian conspiracy" news hitting the WaPo, CNN or NYT.


And while Trump may not even realize the long-term implications of the "Three Seas" project, all those around him understand all too well: with Putin having made a Qatar gas pipeline though Syria impossible, it is up to the US to step in and replace Gazprom as Europe"s nat gas provide.


Which is also why many Republican lawmakers, many of whom want to see him take a hard line on Russia because of its interference in the election and in crises in Ukraine and Syria, support using gas exports for political leverage. "It undermines the strategies of Putin and other strong men who are trying to use the light switch as an element of strategic offense," said Senator Cory Gardner, a Republican from Colorado who is on the Senate Foreign Relations Committee.


The Kremlin relies on oil and gas revenue to finance the state budget, so taking market share would hurt Moscow.


"In many ways, the LNG exports by the U.S. is the most threatening U.S. policy to Russia," said Michal Baranowski, director of the Warsaw office of think-tank the German Marshall Fund. He is absolutely correct, and yet the question becomes: if Putin was ready to deploy thousands of soldiers and dozens of warplanes in Syria to defend Russia"s gas export market, what woud - or could - he do, if the US itself is hoping to replace Russia as Europe"s dominant source of energy.


* * *


To be sure, taking over Russia"s nat gas trade ties with European nations would be a slam dunk for the US, which is expected to become the world"s third-largest exporter of LNG in 2020, just four years after starting up its first export terminal. U.S. exporters have sold most of that gas in long-term contracts, but there are still some volumes on offer, and more export projects on the drawing board.


And if there is one thing US LNG exporters want more than anything, it is a virtually unlimited export market. Such as Europe.





Cheniere Energy which opened the first U.S. LNG export terminal in 2016, delivered its first cargo to Poland in June. Five more terminals are expected to be online by 2020. Tellurian has proposed a project with a price tag of as much as $16 billion that it hopes to complete by 2022, in time to compete for long-term contracts to supply Poland that expire the same year and are held by Russian gas giant Gazprom. "We would like to be a supplier that competes for that market," Tellurian Chief Executive Meg Gentle told Reuters.



There are other problems as well: a global glut in supply may, however, limit U.S. LNG export growth, regardless of Trump"s support. The glut has depressed prices and made it difficult for LNG exporters to turn a profit, said Adam Sieminski, an energy analyst with the Center for Strategic and International Studies.  Russia has the advantage in Europe due to its proximity and pipeline connections, however it is only a matter of time before technological advances make US LNG production price competitive: just ask OPEC.


"Europe is going to be the great competitive arena between Russian gas and LNG," said Daniel Yergin, the Pulitzer Prize-winning oil historian and vice-chairman with IHS Markit analysis firm.


* * *


For now, Europeans will be watching to see whether Trump clarifies his administration"s position on a new notorious pipeline to pump Russian gas to Germany, known as Nord Stream 2.


As we reported several weeks ago, the U.S. Senate passed a package of sanctions on Russia, including provisions to penalize Western firms involved in the pipeline. This prompted a furious response from close European allies such as Germany, France and Austria. However, should Trump assure Europe that American nat gas is competitive with Russia"s, we expect European leaders would quickly change their mind,


Once again, it should come as no surprise that the U.S. State Department has already lobbied against the Nord Stream 2 pipeline as a potential supply chokepoint that would make Europe more vulnerable to disruptions. What it really means is that if left unchecked, Nord Stream 2 would make Europe even more reliant on Moscow"s good will. 


Meanwhile, as Reuters reports, the threat of sanctions adds to tensions between Washington and Berlin. Germany"s government supports the pipeline, and Trump"s position on it is a concern for European diplomats.


While it is soon to say if Trump will be successful in stealing Russia"s European LNG business, the mere attempt will be seen by the Kremlin as an unmistakable aggression against it by the Trump admin, or those who are pulling the strings behind the scenes on the Three Seas project. And the fact that this takes place on the same day when China"s patience with Trump finally ended, and Xi warned that Trump"s actions since their Mar-A-Logo meeting have resulted in "negative factors" for the US-China relationship, will certainly have drastic consequences for the global balance of power and status quo, as Russia and China are drawn even closer politically to prevent the US from replacing Russia"s energy dominance, leaving Moscow with a fraction of its leverage over central Europe.


But the most interesting deliverable next will be what Putin"s reaction will be: should GazProm and various other Russian nat gas lose access to the European market, the consequence to the Kremlin would be far more dire than even the breakout of a small, regional, hard water. Finally, if Putin finds that no diplomatic recourse is left to preserve Russian supremacy, will the former KGB spy find a way to esalate?