Where European Populism Will Be Strongest In 2018

While the establishment may breathe a sigh of relief looking back at political developments and events in Europe - which was spared some of the supposedly "worst-case scenarios" including a Marine le Pen presidency, a Merkel loss and a Geert Wilders victory - in 2017, any victory laps will have to be indefinitely postponed because as Goldman writes in its "Top of Mind" peek at 2018, Europe"s nationalist and populist tide was just resting, and as Pascal Lamy, the former Chief of Staff to the President of the European Commission admitted earlier this year, "Euroskeptic politicians are largely following the pulse of domestic sentiment. The fact is that the public is less enthusiastic about Europe than it once was."

Echoing the sentiment by the europhile, Goldman"s Allison Nathan writes that while the Euro area’s most immediate political risks—i.e., populist or euroskeptic parties winning key elections this year— did not materialize, these movements have continued to gain traction.

• In the Dutch elections in March, the far-right Party for Freedom performed worse than polls had once predicted, but still increased its share of the vote relative to the 2012 elections. It remains the second-largest party in parliament.


• In France, concerns about the prospect of Marine Le Pen winning the presidency gave way to optimism over Emmanuel Macron’s reform agenda; nonetheless, Le Pen posted the best-ever showing for her party in a presidential race.


• In Germany, Chancellor Angela Merkel’s CDU-CSU retained the largest number of seats in the Bundestag, but the far-right Alternative für Deutschland (AfD) entered it for the first time with 13% of the vote.


• And elsewhere in Europe, populist parties on various parts of the political spectrum performed well enough to participate in government coalitions; indeed, an anti-establishment candidate in the Czech Republic recently became prime minister

Some other observations and lessons from recent European events in the twilight days of 2017:

• The transition from campaigning to governing has proved difficult. Europe’s increasingly fragmented political landscape has made coalition-building challenging. In the Netherlands, it took over 200 days to form a government with only a single-seat majority. Similarly, German coalition talks with the Green party and the Liberal (FDP) party collapsed in November. But, after having planned to move into the opposition, the SPD—Merkel’s former coalition partner—decided at its congress last week to open talks with the CDU-CSU. Talks were set to begin this week.


• Other sources of uncertainty remain unresolved. Spain continues to grapple with the standoff between Madrid and Catalonia; regional elections in Catalonia on December 21 will influence the trajectory of the situation. Meanwhile, the UK and EU-27 seem likely to agree to move past the first phase of the Brexit talks (covering separation issues). But in a setback for UK Prime Minister Theresa May, UK lawmakers recently voted for an amendment to the Brexit bill that will guarantee Parliament a vote on the final deal agreed with the EU.


• The decline in political risk bolstered European assets, though fundamentals likely played a decisive role. The market-friendly outcome of the French elections dovetailed with a pick-up in European growth, supporting European equity markets. US inflows into European equities rose significantly but have since stabilized with the acceleration in growth and the decline in the risk premium likely behind us. Receding political risks also contributed to a stronger euro, which is up 12.5% against the dollar this year. Given the currency move, the SXXP is up roughly 7.5% in local terms and 20.6% in USD terms year-to-date.

Next, here"s what Goldman expects and will look for in 2018 and beyond:

• A continuation of the populist pull. The socioeconomic and cultural factors driving public opinion are unlikely to dissipate. Indeed, they may come into greater focus if growth moderates on a sequential basis starting in mid-2018.


• Constraints to further fiscal integration. Opposition to fiscal transfers within the Euro area makes incremental revisions to existing EU programs more likely than transformational change. Key to watch will be Macron’s credibility as a champion of integration, which will hinge on his ability to push through reforms in the face of political and economic constraints.


• Risks around Italian elections set to take place in March. Polls show the largest populist party, the 5 Star Movement (M5S), leading with roughly 27% of the vote. However, the new electoral law and M5S’s unwillingness to join a coalition suggest a centrist coalition is most likely. Such a government, while pro-EU/euro, would likely struggle to implement reforms.


• An eventual resolution of political issues in Germany and Spain. We believe Germany’s major parties will work to avoid new elections, given limited public appetite for a new vote and the risk of AfD gaining more seats in parliament. In Spain, economic and policy uncertainty could persist, but in our view, it is not likely to have lasting or systemic implications. Eventually, we expect a compromise that grants Catalonia greater autonomy within Spain.


• A bumpy road to Brexit. Expect the UK and EU to eventually agree to a two-year “status quo” transition plan.

And finally, here is a map showing where the forces of populism are expected to remain strong - and grow - across the continent.

EU Militarizes Africa To Halt Migration

Authored by Finian Cunningham via The Strategic Culture Foundation,

Fighting terrorism is now morphing into clamping down on human migration, as far as the European Union is concerned.

France’s President Emmanuel Macron is leading the charge, claiming at a conference in Paris last week that terrorism and human trafficking are part of the same problem, requiring the deployment of a military force spread across Africa.

The melding of the two concepts provokes serious legal and moral questions.

But so desperate, it seems, is the EU to halt illegal migration into the bloc that it is moving to militarize the problem in Africa – under the guise of “fighting terrorism”.

This is tantamount to European Neo-imperialism. That is, attempting to sort out deep-seated socio-economic problems down the barrel of a gun. Not only that, but using futile heavy-handed methods to deal with problems that European powers themselves are responsible for creating.

Such an approach will only worsen humanitarian problems for millions of displaced war-torn and impoverished people. In typical arrogant imperialist fashion, the EU is not addressing root causes of the problem – its own role in shattering African societies from illegal wars and predatory economics.

The panicky reaction this week in Brussels to the formation of the new Austrian government led by populist Chancellor Sebastian Kurz shows that the other European powers are still rattled by the rise of nationalistic politics across Europe and the underlying long-term problem of migration into the EU.

Kurz’s People’s Party has formed a coalition government with the Freedom Party. Both share anti-immigration policies and are deeply critical of the EU. The new Austrian administration has been described with trepidation in the news media as the first “far-right” government in the European Union. That epithet appears to be aimed at demonizing the new Austrian authorities with the taint of “fascism”.

However, what seems to be the real concern among the pro-EU governments of Germany and France is that Austria rekindles wider fears in regard to large uncontrolled flows of refugees entering into Europe and the knock-on effect of rising anti-EU populist politics that those fears tend to fan.

Another sign of the EU’s concern over the flow of migrants into the bloc is the attempt by France, Germany and Italy to morph the issue of refugees into one of “fighting terrorism”. This is an audacious, not to say reprehensible, step of treating a humanitarian crisis with military force. But because the emotive “anti-terror” card is invoked, the intention is to mask the controversial, unethical move with a veneer of humanitarianism.

Last week, French President Emmanuel Macron hosted a summit in Paris which was billed as countering terrorism in the Sahel – the vast Northwest desert region of Africa. Macron has taken the lead earlier this year in forming what is known as the Group of Five (G5) countries straddling the Sahel region, comprising Mali, Niger, Burkina Faso, Chad and Mauritania.

The leaders of the G5 were hosted by Macron at a chateau near Paris on December 13. Also in attendance were German Chancellor Angela Merkel and Italy’s premier Paolo Gentiloni. Significant too was the attendance at the summit by the foreign ministers of Saudi Arabia and the United Arab Emirates.

In a brazen appeal for financial funding, Macron asked the Saudis and Emiratis to stump up money for the G5 military force. Both the oil-rich states responded with pledges of $100 million and $30 million, respectively. Other donors to the G5 “anti-terror operations” were the EU and the United States, each pledging $60 million. In other words, the Saudis and Emiratis are bankrolling the G5 “anti-terror” military coalition to the tune of nearly half its total budget.

The G5 comprises some 4,000 troops from the five mentioned African countries – all of them former French colonies. The French forces in the region are believed to number around the same. There are also American special forces operating, as was shown by the dramatic deadly shootout in Niger in October when four US troops were killed in an ambush.

What Macron is claiming to do is to replace the French forces with local troops from the G5. That move will save Paris millions of euro it is currently shelling out on the presence of its military in the Sahel. Knowing that these poor African countries would never be able to finance the operations, the French president is deftly involving the Saudis and Emiratis in the funding.

Macron’s proposal beggars belief. Given the record of the Gulf Arab hardline Sunni regimes in sponsoring terrorism across the Middle East, it is absurd to propose that these same regimes could support “anti-terror” operations in the Sahel.

The contradiction raises the real issue and purpose. France, Germany and Italy, on behalf of the EU, are actually using the moral and political cover of “fighting terrorism” in Africa to further their agenda of stemming the flow of migrants from the continent to Europe. And getting the Gulf Arabs to pay for it. The latter get PR value in return.

It is reckoned that the total African population will double in the next three decades to some 2.5 billion people. That presents European leaders with a formidable headache of worsening migration flows. Already in the last two years, there is estimated to have been 1.5 million refugees entering the EU, many of them from Africa. That phenomenon has, in turn, fueled anti-immigrant political parties across Europe who blame the EU political establishment for the problem. The populist backlash poses a threat to the cohesiveness of the EU. It was one of the issues that drove the British electorate to vote last year for leaving the bloc.

Rather than sniffing at “populist” politics in Austria, Hungary, Poland, the Czech Republic, Slovenia, Denmark, France, Italy, Netherlands and Germany – and denigrating it as “fascist” – European leaders need to question their own responsibility. It is understandable that European communities can feel unnerved by the sudden influx of foreigners into their country. Given the relentless socio-economic austerity imposed on communities by Neo-Liberal capitalist governments, the anxieties over scarce public resources are accentuated, and understandable.

Moreover, the European members of the US-led NATO military alliance bear direct responsibility for opening the migration floodgates when they destroyed the state of Libya in an illegal war for regime change in 2011. France, Italy, Britain and Germany, among others, were complicit in that criminal war.

France too went on an illegal military expedition in Mali in 2013 to “defeat terrorism” – and its forces remain in that country today.

The real reason for that French intervention may likely have been securing uranium ore mines in Mali and Niger.

All those illegal military interventions by the Europeans in Northwest Africa unleashed militants, migration and human trafficking on a massive scale.

A report last week by Amnesty International also openly condemned European governments for colluding with human traffickers in Libya by forcibly sending would-be migrants trying to cross the Mediterranean back into the clutches of the traffickers on land.

Europe is so desperate to stem the flow of migrants because it is destabilizing the internal politics of the EU. So desperate is Europe that it is willing to force refugees back into the human trafficking networks to a fate of slavery in order to impede the flow into Europe.

Macron’s military “solution” for the Sahel is part of the same futile problem-solving. The French president, with the support of Germany, Italy and the rest of the EU, is using military force to combat “terrorism and human trafficking” which he equates as the same.

Furthermore, Macron and the EU are trying to do it on the cheap, by getting the Saudis and Emiratis to pay a large part of the budget.

This militarist policy is nothing short of a Neo-imperialist agenda in Europe, which can only make matters much, much worse.

European powers, as with the Americans, must stop interfering militarily in the affairs of Africa.

What is needed is a radical new economic and political model of massive public investment in Africa and Europe. The money is there, from the trillions of dollars that European corporations have stashed away in global tax havens. In short, what is required is a repudiation of neoliberal capitalism and the militarism that goes with it.

But there can be no solution under the current political leadership in Europe, as epitomized by French President Emmanuel Macron. Under the cynical guise of being a “liberal progressive”, he is offering the same old destructive policies that end up digging ever deeper holes for societies and the wider world.

So much for his recent corny slogan copying Trump, “Make the Planet Great Again”.

The false solution of dealing with European migration as a military problem of “terrorism” and “human traffickers” only lets the real perpetrators of the problems off the hook. France and the other European NATO powers have created their own problems from illegal wars and predatory economic policies. Now they want to “solve” those problems by adding more of the same problems. Make the Planet Groan Again.

How The US Swindled Russia In The Early 1990s

Authored by Eric Zuesse via The Strategic Culture Foundation,

Due to a historic data-dump on December 10th, the biggest swindle that occurred in the 20th Century (or perhaps ever) is now proven as a historical fact; and this swindle was done by the US Government, against the Government and people of Russia, and it continues today and keeps getting worse under every US President.

It was secretly started by US President George Herbert Walker Bush on the night of 24 February 1990; and, unless it becomes publicly recognized and repudiated so that it can stop, a nuclear war between the US and all of NATO on one side, versus Russia on the other, is inevitable unless Russia capitulates before then, which would be vastly less likely than such a world-ending nuclear war now is.

This swindle has finally been displayed beyond question, by this, the first-ever complete release of the evidence.

It demonstrates beyond any reasonable doubt (as you’ll verify yourself from the evidence here), that US President G.H.W. Bush (and his team) lied through their teeth to Soviet President Mikhail Gorbachev (and his team) to end the Cold War on Russia’s side, when the US team were secretly determined never to end it on the US-and-NATO side until Russia itself is conquered.

And this swindle continues today, and keeps getting worse and worse for Russians.

Until now, apologists for the US-Government side have been able to get away with various lies about these lies, such as that there weren’t any, and that Gorbachev didn’t really think that the NATO issue was terribly important for Russia’s future national security anyway, and that the only limitation upon NATO’s future expansion that was discussed during the negotiations to end the Cold War concerned NATO not expanding itself eastward (i.e., closer to Russia) within Germany, not going beyond the then-existing dividing-line between West and East Germany — that no restriction against other east-bloc (Soviet-allied) nations ever being admitted into NATO was discussed, at all. The now-standard US excuse that the deal concerned only Germany and not all of Europe is now conclusively disproven by the biggest single data-dump ever released about those negotiations. 

The release on December 10th, by the National Security Archives, of a treasure-trove of all the existing documentation — 33 key documents — that’s been made available to them from numerous archives around the world, and brought together finally for the very first time complete and in chronological order, makes crystal clear that the American apologists’ lies about the lies WERE lies, not accurate accounts of the history, at all.

The assemblers at the National Security Archives assume that the numerous and repeated false promises that were made by Bush’s team were mistakes, instead of as what they so clearly were (but you’ll judge it here for yourself): strategic lies that were essential to Bush’s goal of America ultimately conquering a future isolated Russia that would then have little-to-no foreign allies, and all of whose then-existing-as-Soviet allied nations within the Soviet Union itself, and beyond, including all of its former Warsaw Pact allies, would have become ultimately swallowed up by the US-NATO bloc, which then would be able to dictate, to a finally alone nation of Russia, terms of Russia’s ultimate surrender to the US That view (which the National Security Archives documents to be clearly true, even as it denies it and says that only Bill Clinton and subsequent Presidents were to blame) is now exposed irrefutably to have been the US plan ever since GHW Bush’s Presidency.

In other words: This release of documents about the turning-point, provides capstone evidence that the US never really had been in the Cold War against communism; the US was instead aiming ultimately to be the imperial nation, controlling the entire planet.

For America’s Deep State, or what President Eisenhower famously warned about as the “military-industrial complex,” the Cold War was actually about empire, and about conquest, not really about ideology at all. This also had been shown, for example, by America’s having assisted so many ‘former’ Nazis to escape and come to America and to be paid now by the US Government. After World War II, the top level of the US power-structure became increasingly taken over by the military-industrial complex, America’s Deep State, so that increasingly the US Government is in a condition of “perpetual war for perpetual peace” — a warfare state and economy: fascism.

Here, then, are highlights from this historic data-dump, presented in chronological order, just as in the release itself, and with a minimum of added commentary from myself [placed in brackets], but all stripping away here the dross of accompanying inconsequentials, and leaving only the golden steady core of stunningly successful American deceit of Russia. These are those highlights, from the data-dump, which the National Security Archives headlined “NATO Expansion: What Gorbachev Heard” and sub-headed “Declassified documents show security assurances against NATO expansion to Soviet leaders from Baker, Bush, Genscher, Kohl, Gates, Mitterrand, Thatcher, Hurd, Major, and Woerner,” so that the swindlers (or as the National Security Archive view them as having instead been blunderers) can become immediately recognized and known.

All of these documents pertain to negotiations that occurred throughout the month of February 1990, and a few relate also to the immediate aftermath. That’s the crucial period, when the geostrategic reality of today (which all the world now know to be a continuation of the Cold War, but this time against only Russia, and not against the Soviet Union and its Warsaw Pact) was actually created.

At the negotiations’ start, West Germany’s Chancellor Helmut Kohl’s agent, Germany’s Foreign Minister, Hans-Dietrich Genscher, stated publicly to the whole world, West Germany’s initial offer to the Soviet Union’s President Mikhail Gorbachev, and this offer did not include a simultaneous termination of both military alliances — the Soviets’ Warsaw Pact and America’s NATO — but instead only a promise that NATO would never absorb any additional territory, especially to the east of West Germany (and this publicly made promise was never kept). So: right from the get-go, there was no actual termination of the Cold War that was being proposed by the US group, but only an arrangement that wouldn’t threaten Russia more than the then-existing split Germany did (and yet even that promise turned out to have been a lie):

Document 01

US Embassy Bonn Confidential Cable to Secretary of State on the speech of the German Foreign Minister: Genscher Outlines His Vision of a New European Architecture.

1990-02-01

Source: US Department of State. FOIA Reading Room. Case F-2015 10829

“This US Embassy Bonn cable reporting back to Washington details both of Hans-Dietrich Genscher’s proposals – that NATO would not expand to the east, and that the former territory of the GDR in a unified Germany would be treated differently from other NATO territory.”

Document 02

Mr. Hurd to Sir C. Mallaby (Bonn). Telegraphic N. 85: Secretary of State’s Call on Herr Genscher: German Unification.

1990-02-06

Source: Documents on British Policy Overseas, series III, volume VII: German Unification, 1989-1990.

“The US State Department’s subsequent view of the German unification negotiations, expressed in a 1996 cable sent to all posts, mistakenly asserts that the entire negotiation over the future of Germany limited its discussion of the future of NATO to the specific arrangements over the territory of the former GDR.” [The National Security Archives’ calling that Bill-Clinton-era State Department cable ‘mistaken’ is unsupported by, and even contradicted by, the evidence they actually present from the February 1990 negotiations.]

Document 03

Memorandum from Paul H. Nitze to George H.W. Bush about “Forum for Germany” meeting in Berlin.

1990-02-06

Source: George H. W. Bush Presidential Library

“This concise note to President Bush from one of the Cold War’s architects, Paul Nitze (based at his namesake Johns Hopkins University School of International Studies), captures the debate over the future of NATO in early 1990. Nitze relates that Central and Eastern European leaders attending the ‘Forum for Germany’ conference in Berlin were advocating the dissolution of both the superpower blocs, NATO and the Warsaw Pact, until he (and a few western Europeans) turned around that view and instead emphasized the importance of NATO as the basis of stability and US presence in Europe.”

Document 04

Memorandum of Conversation between James Baker and Eduard Shevardnadze in Moscow.

1990-02-09

Source: US Department of State, FOIA 199504567 (National Security Archive Flashpoints Collection, Box 38)

“Baker tells the Soviet foreign minister, ‘A neutral Germany would undoubtedly acquire its own independent nuclear capability. However, a Germany that is firmly anchored in a changed NATO, by that I mean a NATO that is far less of [a] military organization, much more of a political one, would have no need for independent capability. There would, of course, have to be iron-clad guarantees that NATO’s jurisdiction or forces would not move eastward.’”

Document 05

Memorandum of conversation between Mikhail Gorbachev and James Baker in Moscow.

1990-02-09

Source: US Department of State, FOIA 199504567 (National Security Archive Flashpoints Collection, Box 38)

“Even with (unjustified) redactions by US classification officers, this American transcript of perhaps the most famous US assurance to the Soviets on NATO expansion confirms the Soviet transcript of the same conversation. Repeating what Bush said at the Malta summit in December 1989, Baker tells Gorbachev: ‘The President and I have made clear that we seek no unilateral advantage in this process’ of inevitable German unification. Baker goes on to say, ‘We understand the need for assurances to the countries in the East. If we maintain a presence in a Germany that is a part of NATO, there would be no extension of NATO’s jurisdiction for forces of NATO one inch to the east.’”

Document 06

Record of conversation between Mikhail Gorbachev and James Baker in Moscow. (Excerpts)

1990-02-09

Source: Gorbachev Foundation Archive, Fond 1, Opis 1.

“The key exchange takes place when Baker asks whether Gorbachev would prefer ‘a united Germany outside of NATO, absolutely independent and without American troops; or a united Germany keeping its connections with NATO, but with the guarantee that NATO’s jurisdiction or troops will not spread east of the present boundary.’ … Turning to German unification, Baker assures Gorbachev that ‘neither the president nor I intend to extract any unilateral advantages from the processes that are taking place,’ and that the Americans understand the importance for the USSR and Europe of guarantees that ‘not an inch of NATO’s present military jurisdiction will spread in an eastern direction.’”

Document 07

Memorandum of conversation between Robert Gates and Vladimir Kryuchkov in Moscow.

1990-02-09

Source: George H.W. Bush Presidential Library, NSC Scowcroft Files, Box 91128, Folder “Gorbachev (Dobrynin) Sensitive.”

“This conversation is especially important because subsequent researchers have speculated that Secretary Baker may have been speaking beyond his brief in his ‘not one inch eastward’ conversation with Gorbachev. Robert Gates, the former top CIA intelligence analyst and a specialist on the USSR, here tells his kind-of-counterpart, the head of the KGB, in his office at the Lubyanka KGB headquarters, exactly what Baker told Gorbachev that day at the Kremlin: not one inch eastward. At that point, Gates was the top deputy to the president’s national security adviser, Gen. Brent Scowcroft, so this document speaks to a coordinated approach by the US government to Gorbachev.”

Document 08

Letter from James Baker to Helmut Kohl

1990-02-10

Source: Deutsche Enheit Sonderedition und den Akten des Budeskanzleramtes 1989/90

“Baker especially remarks on Gorbachev’s noncommittal response to the question about a neutral Germany versus a NATO Germany with pledges against eastward expansion.”

Document 09

Memorandum of conversation between Mikhail Gorbachev and Helmut Kohl

1990-02-10

Source: Mikhail Gorbachev i germanskii vopros, edited by Alexander Galkin and Anatoly Chernyaev, (Moscow: Ves Mir, 2006)

“Prepared by Baker’s letter and his own foreign minister’s Tutzing formula, Kohl early in the conversation assures Gorbachev, ‘We believe that NATO should not expand the sphere of its activity. We have to find a reasonable resolution. I correctly understand the security interests of the Soviet Union, and I realize that you, Mr. General Secretary, and the Soviet leadership will have to clearly explain what is happening to the Soviet people.’ Later the two leaders tussle about NATO and the Warsaw Pact, with Gorbachev commenting, ‘They say what is NATO without the FRG. But we could also ask: What is the WTO without the GDR?’ When Kohl disagrees, Gorbachev calls merely for ‘reasonable solutions that do not poison the atmosphere in our relations’ and says this part of the conversation should not be made public.”

Document 10-1

Teimuraz Stepanov-Mamaladze notes from Conference on Open Skies, Ottawa, Canada.

1990-02-12

Source: Hoover Institution Archive, Stepanov-Mamaladze Collection.

“Notes from the first days of the conference are very brief, but they contain one important line that shows that Baker offered the same assurance formula in Ottawa as he did in Moscow: ‘And if U[nited] G[ermany] stays in NATO, we should take care about nonexpansion of its jurisdiction to the East.’”

Document 10-2

Teimuraz Stepanov-Mamaladze diary, February 12, 1990.

1990-02-12

Source: Hoover Institution Archive, Stepanov-Mamaladze Collection.

“This diary entry is evidence, from a critical perspective, that the United States and West Germany did give Moscow concrete assurances about keeping NATO to its current size and scope. In fact, the diary further indicates that at least in Shevardnadze’s view those assurances amounted to a deal – which Gorbachev accepted.”

Document 10-3

Teimuraz Stepanov-Mamaladze diary, February 13, 1990.

1990-02-13

Source: Hoover Institution Archive, Stepanov-Mamaladze Collection.

“Stepanov-Mamaladze describes difficult negotiations about the exact wording on the joint statement. … ‘During the day, active games were taking place between all of them. E.A. [Shevardnadze] met with Baker five times, twice with Genscher, talked with Fischer [GDR foreign minister], Dumas [French foreign minister], and the ministers of the ATS countries,’ and finally, the text of the settlement was settled.”

Document 11

US State Department, “Two Plus Four: Advantages, Possible Concerns and Rebuttal Points.”

1990-02-21

Source: State Department FOIA release, National Security Archive Flashpoints Collection, Box 38.

“The American fear was that the West Germans would make their own deal with Moscow for rapid unification, giving up some of the bottom lines for the US, mainly membership in NATO.”

Document 12-1

Memorandum of conversation between Vaclav Havel and George Bush in Washington.

1990-02-20

Source: George H.W. Bush Presidential Library, Memcons and Telcons (https://bush41library.tamu.edu/)

“Bush took the opportunity to lecture the Czech leader about the value of NATO and its essential role as the basis for the US presence in Europe.”

Document 12-2

Memorandum of conversation between Vaclav Havel and George Bush in Washington.

1990-02-21

Source: George H.W. Bush Presidential Library, Memcons and Telcons (https://bush41library.tamu.edu/)

“Bush’s request to Havel to pass the message to Gorbachev that the Americans support him personally, and that ‘We will not conduct ourselves in the wrong way by saying “we win, you lose.” Emphasizing the point, Bush says, ‘tell Gorbachev that … I asked you to tell Gorbachev that we will not conduct ourselves regarding Czechoslovakia or any other country in a way that would complicate the problems he has so frankly discussed with me.’ The Czechoslovak leader adds his own caution to the Americans about how to proceed with the unification of Germany and address Soviet insecurities. Havel remarks to Bush, ‘It is a question of prestige.’”

[I think that Havel was deceived to believe that “prestige” was the issue here. This is what the US team wanted the Soviet team to think was the US team’s chief motivation for wanting NATO to continue. But subsequent historical events, especially the US team’s proceeding under President Bill Clinton and up through Donald Trump to expand NATO to include, by now, virtually all of the Warsaw Pact and of the Soviet Union itself except for Russia, in NATO, proves that US aggression against Russia has been the US aim from the start, and the US Government has been working assiduously at this plan for ultimate conquest. I think that Havel’s use there of the word “prestige” was very revealing of the total snookering of Gorbachev that Bush achieved. Gorbachev and his team trusted the US side. Russia has paid dearly for that. If the US side continues and NATO isn’t voluntarily terminated by the US Government, then WW III will be the inevitable result. NATO will end either after the ‘conquest’ of Russia or before that WW-III ‘conquest’ (likelier to be actually destruction of the entire world) even happens. The world, today, will decide which. NATO should have ended in 1991, when the Soviet Union and its Warsaw Pact did.]

Document 13

Memorandum of Conversation between Helmut Kohl and George Bush at Camp David.

1990-02-24

Source: George H.W. Bush Presidential Library, Memcons and Telcons (https://bush41library.tamu.edu/)

“The Bush administration’s main worry about German unification as the process accelerated in February 1990 was that the West Germans might make their own deal bilaterally with the Soviets (see Document 11) and might be willing to bargain away NATO membership. … The German chancellor arrives at Camp David without [West German Foreign Minister] Genscher because the latter does not entirely share the Bush-Kohl position on full German membership in NATO, and he recently angered both leaders by speaking publicly about the CSCE as the future European security mechanism.[11] … Bush’s priority is to keep the US presence, especially the nuclear umbrella, in Europe: ‘if US nuclear forces are withdrawn from Germany, I don’t see how we can persuade any other ally on the continent to retain these weapons.’ … [Bush wanted Lockheed and other US weapons-makers to continue booming after the Cold War ‘ended’ — not for the nuclear-weapons market to end. Bush continued:] ‘We have weird thinking in our Congress today, ideas like this peace dividend. We can’t do that in these uncertain times.’ [For the US team, ‘perpetual war for perpetual peace’ would be the way forward; a ‘peace dividend’ was the last thing they wanted — ever.] … At one point in the conversation, Bush seems to view his Soviet counterpart not as a partner but as a defeated enemy. Referring to talk in some Soviet quarters against Germany staying in NATO, he says: ‘To hell with that. We prevailed and they didn’t. We cannot let the Soviets clutch victory from the jaws of defeat.’” [I earlier had placed that crucial secret statement from Bush into historical perspective, under the headline, “How America Double-Crossed Russia and Shamed the West”.] 

Document 14

Memorandum of conversation between George Bush and Eduard Shevardnadze in Washington.

1990-04-06

Source: George H.W. Bush Presidential Library, Memcons and Telcons (https://bush41library.tamu.edu/)

“Shevardnadze mentions the upcoming CSCE summit and the Soviet expectation that it will discuss the new European security structures. Bush does not contradict this but ties it to the issues of the US presence in Europe and German unification in NATO. He declares that he wants to ‘contribute to stability and to the creation of a Europe whole and free, or as you call it, a common European home. A[n] idea that is very close to our own.’ The Soviets — wrongly — interpret this as a declaration that the US administration shares Gorbachev’s idea.”

Document 15

Sir R. Braithwaite (Moscow). Telegraphic N. 667: “Secretary of State’s Meeting with President Gorbachev.”

1990-04-11

Source: Documents on British Policy Overseas, series III, volume VII: German Unification, 1989-1990. (Foreign and Commonwealth Office.

“Ambassador Braithwaite’s telegram summarizes the meeting between Secretary of State for Foreign and Commonwealth Affairs Douglas Hurd and President Gorbachev, noting Gorbachev’s ‘expansive mood.’ Gorbachev asks the secretary to pass his appreciation for Margaret Thatcher’s letter to him after her summit with Kohl, at which, according to Gorbachev, she followed the lines of policy Gorbachev and Thatcher discussed in their recent phone call, on the basis of which the Soviet leader concluded that ‘the British and Soviet positions were very close indeed.’”

Document 16

Valentin Falin Memorandum to Mikhail Gorbachev (Excerpts)

1990-04-18

Source: Mikhail Gorbachev i germanskii vopros, edited by Alexander Galkin and Anatoly Chernyaev, (Moscow: Ves Mir, 2006)

“This memorandum from the Central Committee’s most senior expert on Germany sounds like a wake-up call for Gorbachev. Falin puts it in blunt terms: while Soviet European policy has fallen into inactivity and even ‘depression after the March 18 elections in East Germany, and Gorbachev himself has let Kohl speed up the process of unification, his compromises on Germany in NATO can only lead to the slipping away of his main goal for Europe – the common European home. ‘Summing up the past six months, one has to conclude that the “common European home,” which used to be a concrete task the countries of the continent were starting to implement, is now turning into a mirage.’ While the West is sweet-talking Gorbachev into accepting German unification in NATO, Falin notes (correctly) that ‘the Western states are already violating the consensus principle by making preliminary agreements among themselves’ regarding German unification and the future of Europe that do not include a ‘long phase of constructive development.’ He notes the West’s ‘intensive cultivation of not only NATO but also our Warsaw Pact allies’ with the goal to isolate the USSR. … He also suggests using arms control negotiations in Vienna and Geneva as leverage if the West keeps taking advantage of Soviet flexibility. … The main idea of the memo is to warn Gorbachev not to be naive about the intentions of his American partners: ‘The West is outplaying us, promising to respect the interests of the USSR, but in practice, step by step, separating us from “traditional Europe”.’”

Document 17

James A. Baker III, Memorandum for the President, “My meeting with Shevardnadze.”

1990-05-04

Source: George H. W. Bush Presidential Library, NSC Scowcroft Files, Box 91126, Folder “Gorbachev (Dobrynin) Sensitive 1989 – June 1990 [3]”

“Baker reports, ‘I also used your speech and our recognition of the need to adapt NATO, politically and militarily, and to develop CSCE to reassure Shevardnadze that the process would not yield winners and losers. Instead, it would produce a new legitimate European structure – one that would be inclusive, not exclusive.’”

Document 18

Record of conversation between Mikhail Gorbachev and James Baker in Moscow.

1990-05-18

Source: Gorbachev Foundation Archive, Fond 1

“When Gorbachev mentions the need to build new security structures to replace the blocs, Baker lets slip a personal reaction that reveals much about the real US position on the subject: ‘It’s nice to talk about pan-European security structures, the role of the CSCE. It is a wonderful dream, but just a dream. In the meantime, NATO exists. …’ Gorbachev suggests that if the US side insists on Germany in NATO, then he would ‘announce publicly that we want to join NATO too.’ Shevardnadze goes further, offering a prophetic observation: ‘if united Germany becomes a member of NATO, it will blow up perestroika. Our people will not forgive us. People will say that we ended up the losers, not the winners.’”

Document 19

Record of conversation between Mikhail Gorbachev and Francois Mitterrand (excerpts).

1990-05-25

Source: Mikhail Gorbachev i germanskii vopros

“[Miterrand] implies that NATO is not the key issue now and could be drowned out in further negotiations; rather, the important thing is to ensure Soviet participation in new European security system. He repeats that he is ‘personally in favor of gradually dismantling the military blocs.’ Gorbachev expresses his wariness and suspicion about US effort to ‘perpetuate NATO’.” [This was extraordinary documentation that the US team had deceived Gorbachev to think that they were trying to suggest to him that both military alliances — NATO and Warsaw Pact — would be ended, but that Gorbachev was “wary” and “suspicious” that maybe they didn’t really mean it. Stunning.]

Document 20

Letter from Francois Mitterrand to George Bush

1990-05-25

Source: George H.W. Bush Presidential Library, NSC Scowcroft Files

True to his word, Mitterrand writes a letter to George Bush describing Gorbachev’s predicament on the issue of German unification in NATO, calling it genuine, not ‘fake or tactical.’ He warns the American president against doing it as a fait accompli without Gorbachev’s consent implying that Gorbachev might retaliate on arms control (exactly what Mitterrand himself – and Falin earlier – suggested in his conversation). Mitterrand argues in favor of a formal ‘peace settlement in International law,’ and informs Bush that in his conversation with Gorbachev he “‘indicated that, on the Western side, we would certainly not refuse to detail the guarantees that he would have a right to expect for his country’s security.’”

Document 21

Record of conversation between Mikhail Gorbachev and George Bush. White House, Washington D.C.

1990-05-31

Source: Gorbachev Foundation Archive, Moscow, Fond 1, opis 1.[12]

“Baker repeats the nine assurances made previously by the administration, including that the United States now agrees to support the pan-European process and transformation of NATO in order to remove the Soviet perception of threat. Gorbachev’s preferred position is Germany with one foot in both NATO and the Warsaw Pact — the ‘two anchors’ — creating a kind of associated membership. Baker intervenes, saying that ‘the simultaneous obligations of one and the same country toward the WTO and NATO smack of schizophrenia.’ After the US president frames the issue in the context of the Helsinki agreement, Gorbachev proposes that the German people have the right to choose their alliance — which he in essence already affirmed to Kohl during their meeting in February 1990. Here, Gorbachev significantly exceeds his brief, and incurs the ire of other members of his delegation, especially the official with the German portfolio, Valentin Falin, and Marshal Sergey Akhromeyev. Gorbachev issues a key warning about the future: ‘If the Soviet people get an impression that we are disregarded in the German question, then all the positive processes in Europe, including the negotiations in Vienna [over conventional forces], would be in serious danger. This is not just bluffing. It is simply that the people will force us to stop and to look around.’ It is a remarkable admission about domestic political pressures from the last Soviet leader.”

Document 22

Letter from Mr. Powell (N. 10) to Mr. Wall: Thatcher-Gorbachev memorandum of conversation.

1990-06-08

Source: Documents on British Policy Overseas, series III, volume VII: German Unification, 1989-1990. (Foreign and Commonwealth Office

“Gorbachev says he wants to ‘be completely frank with the Prime Minister’ that if the processes were to become one-sided, ‘there could be a very difficult situation [and the] Soviet Union would feel its security in jeopardy.’ Thatcher responds firmly that it was in nobody’s interest to put Soviet security in jeopardy: ‘we must find ways to give the Soviet Union confidence that its security would be assured.’”

Document 23

Record of Conversation between Mikhail Gorbachev and Helmut Kohl, Moscow (Excerpts).

1990-07-15

Source: Mikhail Gorbachev i germanskii vopros

“This key conversation between Chancellor Kohl and President Gorbachev sets the final parameters for German unification. Kohl talks repeatedly about the new era of relations between a united Germany and the Soviet Union, and how this relationship would contribute to European stability and security. Gorbachev demands assurances on non-expansion of NATO: ‘We must talk about the nonproliferation of NATO military structures to the territory of the GDR, and maintaining Soviet troops there for a certain transition period.’ The Soviet leader notes earlier in the conversation that NATO has already begun transforming itself. For him, the pledge of NATO non-expansion to the territory of the GDR in spirit means that NATO would not take advantage of the Soviet willingness to compromise on Germany.”

[Of course, Gorbachev never knew that Bush had instructed his agents, on the night of 24 February 1990, “To hell with that. We prevailed and they didn’t. We cannot let the Soviets clutch victory from the jaws of defeat,” indicating that for the US aristocracy, conquest of an isolated Russia was the actual ultimate aim — there would be no actual end of the Cold War until the US would conquer Russia itself — grab the whole thing. Gorbachev was, it is now absolutely undeniable, conned.]

Document 24

Memorandum of Telephone Conversation between Mikhail Gorbachev and George Bush

1990-07-17

Source: George H.W. Bush Presidential Library, Memcons and Telcons ((https://bush41library.tamu.edu/)

“In this phone call, Bush expands on Kohl’s security assurances and reinforces the message from the London Declaration: ‘So what we tried to do was to take account of your concerns expressed to me and others, and we did it in the following ways: by our joint declaration on non-aggression; in our invitation to you to come to NATO; in our agreement to open NATO to regular diplomatic contact with your government and those of the Eastern European countries; and our offer on assurances on the future size of the armed forces of a united Germany – an issue I know you discussed with Helmut Kohl. We also fundamentally changed our military approach on conventional and nuclear forces. We conveyed the idea of an expanded, stronger CSCE with new institutions in which the USSR can share and be part of the new Europe.’”

Document 25

September 12 Two-Plus-Four Ministerial in Moscow: Detailed account [includes text of the Treaty on the Final Settlement with Respect to Germany and Agreed Minute to the Treaty on the special military status of the GDR after unification]

1990-11-02

Source: George H.W. Bush Presidential Library, NSC Condoleezza Rice Files

“the agreed text of the final treaty on German unification. The treaty codified what Bush had earlier offered to Gorbachev – ‘special military status’ for the former GDR territory. At the last minute, British and American concerns that the language would restrict emergency NATO troop movements there forced the inclusion of a ‘minute’ that left it up to the newly unified and sovereign Germany what the meaning of the word ‘deployed’ should be. Kohl had committed to Gorbachev that only German NATO troops would be allowed on that territory after the Soviets left, and Germany stuck to that commitment, even though the ‘minute’ was meant to allow other NATO troops to traverse or exercise there at least temporarily. Subsequently, Gorbachev aides such as Pavel Palazhshenko would point to the treaty language to argue that NATO expansion violated the ‘spirit’ of this Final Settlement treaty.”

[Obviously, now, it was no “Final Settlement” at all.]

Document 26

US Department of State, European Bureau: Revised NATO Strategy Paper for Discussion at Sub-Ungroup Meeting

1990-10-22

Source: George H. W. Bush Presidential Library, NSC Heather Wilson Files,

“Joint Chiefs and other agencies, posits that ‘[a] potential Soviet threat remains and constitutes one basic justification for the continuance of NATO.’ At the same time, in the discussion of potential East European membership in NATO, the review suggests that ‘In the current environment, it is not in the best interest of NATO or of the US that these states be granted full NATO membership and its security guarantees.’ The United States does not ‘wish to organize an anti-Soviet coalition whose frontier is the Soviet border’ – not least because of the negative impact this might have on reforms in the USSR. NATO liaison offices would do for the present time, the group concluded, but the relationship will develop in the future. In the absence of the Cold War confrontation, NATO ‘out of area’ functions will have to be redefined.” [Clearly, they wanted the revolving door to land them in high-paid positions supported by US weapons-making corporations, not just in retirements with only military pensions. Or else, they just loved war and, like Bush, didn’t want there to be any “peace dividend.”] 

Document 27

James F. Dobbins, State Department European Bureau, Memorandum to National Security Council: NATO Strategy Review Paper for October 29 Discussion.

1990-10-25

Source: George H. W. Bush Presidential Library: NSC Philip Zelikow Files

“This concise memorandum comes from the State Department’s European Bureau as a cover note for briefing papers for a scheduled October 29, 1990 meeting on the issues of NATO expansion and European defense cooperation with NATO. Most important is the document’s summary of the internal debate within the Bush administration, primarily between the Defense Department (specifically the Office of the Secretary of Defense, Dick Cheney) and the State Department. On the issue of NATO expansion, OSD ‘wishes to leave the door ajar’ while State ‘prefers simply to note that discussion of expanding membership is not on the agenda….’ The Bush administration effectively adopts State’s view in its public statements, yet the Defense view would prevail in the next administration.”

[This allegation, by the National Security Archives, fundamentally misrepresents, by its underlying assumption that the Bush Administration’s statements such as that NATO would move “not one inch to the east” weren’t lies but instead reflected Bush’s actual intention. They ignore altogether Bush’s having secretly told his vassals on the crucial night of 24 February 1990, “To hell with that. We prevailed and they didn’t. We cannot let the Soviets clutch victory from the jaws of defeat.” Gorbachev believed that this was to be a win-win game; but, the US side were now under secret instructions that it’s to be purely more of the win-lose game, and that now a lone Russia would end up being its ultimate loser. The despicable statement by the National Security Archives, “yet the Defense view would prevail in the next administration,” presumes that it didn’t actually already ‘prevail’ in the Bush Administration itself. It prevailed actually in George Herbert Walker Bush himself, and not only in his Defense Department. Bush brilliantly took advantage of Gorbachev’s decency and expectation that Bush, like himself, was decent. Bush lied — and his team and their successors ever since have been carrying out his vicious plan. The National Security Archives downplays to insignificance Bush’s crucial instruction to his people, “To hell with that. We prevailed and they didn’t. We cannot let the Soviets clutch victory from the jaws of defeat.” That statement, at that crucial moment, is what enables us to understand what was actually going on throughout these negotiations. The Archives’ blaming only Bill Clinton and the other Presidents after Bush is a despicable lie. And it wasn’t just “the Defense view” — Cheney — who prevailed within the Bush Administration there. Cheney, like Baker, were doing what GHW Bush had hired them to do. Baker’s job was to lie. If it weren’t, then he’d have told Gorbachev the next day not to trust what the Bush team were saying, but instead to demand everything to be put in writing in the final document, and to assume the worst regarding anything that the Bush team were refusing to put in writing in the final document. Baker was a lawyer, and a very skilled liar, who was just doing his job for Bush. For some inexplicable reason, the National Security Archives simply assumes otherwise.]

Document 28

Ambassador Rodric Braithwaite diary, 05 March 1991

1991-03-05

Source: Rodric Braithwaite personal diary

“British Ambassador Rodric Braithwaite was present for a number of the assurances given to Soviet leaders in 1990 and 1991 about NATO expansion. Here, Braithwaite in his diary describes a meeting between British Prime Minister John Major and Soviet military officials, led by Minister of Defense Marshal Dmitry Yazov. The meeting took place during Major’s visit to Moscow and right after his one-on-one with President Gorbachev. During the meeting with Major, Gorbachev had raised his concerns about the new NATO dynamics: ‘Against the background of favorable processes in Europe, I suddenly start receiving information that certain circles intend to go on further strengthening NATO as the main security instrument in Europe. Previously they talked about changing the nature of NATO, about transformation of the existing military-political blocs into pan-European structures and security mechanisms. And now suddenly again [they are talking about] a special peace-keeping role of NATO. They are talking again about NATO as the cornerstone. This does not sound complementary to the common European home that we have started to build.’ Major responded: ‘I believe that your thoughts about the role of NATO in the current situation are the result of misunderstanding. We are not talking about strengthening of NATO.’”

Document 29

Paul Wolfowitz Memoranda of Conversation with Vaclav Havel and Lubos Dobrovsky in Prague.

1991-04-27

Source: US Department of Defense, FOIA release 2016

“These memcons from April 1991 provide the bookends for the ‘education of Vaclav Havel’ on NATO (see Documents 12-1 and 12-2 above). US Undersecretary of Defense for Policy Paul Wolfowitz included these memcons in his report to the NSC and the State Department about his attendance at a conference in Prague on ‘The Future of European Security,’ on April 24-27, 1991. During the conference Wolfowitz had separate meetings with Havel and Minister of Defense Dobrovsky. In the conversation with Havel, Wolfowitz thanks him for his statements about the importance of NATO and US troops in Europe. … In conversation with Dobrovsky, Wolfowitz remarks that ‘the very existence of NATO was in doubt a year ago.’“

Document 30

Memorandum to Boris Yeltsin from Russian Supreme Soviet delegation to NATO HQs

1991-07-01

Source: State Archive of the Russian Federation (GARF), Fond 10026, Opis 1

“This document is important for describing the clear message in 1991 from the highest levels of NATO – Secretary General Manfred Woerner – that NATO expansion was not happening. The audience was a Russian Supreme Soviet delegation, which in this memo was reporting back to Boris Yeltsin (who in June had been elected president of the Russian republic, largest in the Soviet Union), but no doubt Gorbachev and his aides were hearing the same assurance at that time. The emerging Russian security establishment was already worried about the possibility of NATO expansion, so in June 1991 this delegation visited Brussels to meet NATO’s leadership, hear their views about the future of NATO, and share Russian concerns. Woerner had given a well-regarded speech in Brussels in May 1990 in which he argued: ‘The principal task of the next decade will be to build a new European security structure, to include the Soviet Union and the Warsaw Pact nations. The Soviet Union will have an important role to play in the construction of such a system. If you consider the current predicament of the Soviet Union, which has practically no allies left, then you can understand its justified wish not to be forced out of Europe.’ Now in mid-1991, Woerner responds to the Russians by stating that he personally and the NATO Council are both against expansion — ’13 out of 16 NATO members share this point of view’ — and that he will speak against Poland’s and Romania’s membership in NATO to those countries’ leaders as he has already done with leaders of Hungary and Czechoslovakia.”

Billionaire Tycoon Will Be Next President Of Chile

A billionaire who has been described as one of the world’s wealthiest politicians just won his second non-consecutive term as president of Chile when he defeated his center-left opponent in what observers are calling a landslide victory in Sunday"s election.

As the Washington Post reported, Sebastián Piñera, of the right-leaning National Renovation party and conservative Let’s Go Chile coalition, defeated center-left candidate Alejandro Guillier, of the ruling New Majority coalition, by 9 percentage points, turning the current government out of office. Piñera previously governed Chile between 2009 and 2014. Turnout increased between yesterday’s vote and a Nov. 19 runoff, as large numbers of conservative voters showed up at the polls, while leftists stayed home.

Guillier conceded and congratulated his opponent on his win and his return to the presidency after a four-year gap, according to the BBC.

Like we mentioned above, Piñera is a billionaire who once owned the television channel Chilevision, a large share of Lan Chile airlines, and the Colo-Colo soccer team. He won despite criticisms of his offshore holdings and use of tax havens. He joins Trump and Adrej Babis, a Czech tycoon who rode to electoral victory in a landslide in his home country earlier this year.

As WaPo points out, the 67-year-old will succeed Socialist President Michelle Bachelet, whose New Majority coalition came to power in 2014 on a platform promising sweeping change. Her administration reformed Chile’s tax and education systems and legalized abortion in the event of rape, endangerment to the mother’s life, or an unviable pregnancy. Bachelet began reforming Chile’s constitution, submitting a bill to the Congress earlier this year that would allow for a constitutional convention. Pinera is apparently a fan of many of these reforms and has vowed to preserve them. According to Reuters, Pinera said on Monday he would work to form a “broad cabinet, of continuity and change,” as he sought to strike a tone of conciliation a day after his resounding victory.

Regarding the bill calling for a constitutional convention to reform the dictatorship-era constitution, Pinera said he was in agreement “of perfecting it but in a climate of unity,” according to Reuters.

Pinera’s victory didn’t represent a sharp turn to the right for Chile - the world’s largest copper producer and widely considered Latin America"s most-stable economy - as it did exhaustion with Bachelet, whose second term was clouded by accusations of corruption, including an incident involving her son and daughter-in-law. The media and opposition politicians condemned Bachelet’s family for having secured a loan days before her 2013 victory to purchase land that was resold shortly thereafter, generating millions of dollars in profit. Though leftists weren’t the only ones impugned by scandal during her tenure: The right-wing Independent Democratic Union party was implicated in a campaign finance scandal, leading many Chileans to perceive the overall political system as corrupt. Bachelet leaves office with a dismal 23% approval rating.

Though Pinera’s victory is the latest in a wave of support for right-wing candidates across South America. Last year and this year, right-wing parties have won in Argentina and Peru. In Brazil, the impeachment of Dilma Rousseff brought right-wing Michel Temer to office.

According to WaPo, support for leftists parties was still strong during the runoff race, forcing Pinera to move to the center on issues like education and pensions, and managed to exploit divisions between the country’s far-left and center-left factions that caused many voters to stay home in the final round.

Piñera represents a coalition of conservative parties, but his victory does not signal a right turn. In the first round, Piñera won 36.6 percent of the vote, while Guillier took 22.7 percent, and the further left Broad Front candidate, Beatriz Sánchez, won 20.27 percent. The Broad Front increased its seats from 3 to 20 in the lower house, surpassing expectations. The coalition’s strong performance shows support for leftist ideology and pushed Guillier to the left during the second-round campaign; he changed his position on student debt forgiveness and pension reform.

 

Piñera sought to woo centrist voters by shifting his position on education and pension policy, while also mobilizing the far-right, in part because far-right independent José Antonio Kast did well in the first round. Kast ran a nationalist campaign that called for the construction of a wall between Chile and Peru and won just under 8 percent of votes. Piñera attempted to attract these voters, accusing the center-left parties of moving Chile in the direction of Venezuela and hinted that voter fraud had helped the center-left in the first round. These appeals likely motivated increased conservative turnout in Sunday’s runoff election.

If there’s any broader takeaway from the vote, it’s that Chile’s center is vanishing. In the first round, centrist Christian Democratic Party candidate Carolina Goic won only 5.88% of the vote.

Still, while he won the presidency by a wide margin, Pinera’s administration faces seemingly insurmountable obstacles in the battle to get things done.

This morning, he shared breakfast with president Bachelet and her family.

 

Newly elected president Piñera shares breakfast with president Bachelet and Min. of National Affairs Mario Fernandez, discussing transition of power. pic.twitter.com/0jC6H7116z

— SantiagoTimes (@SantiagoTimes) December 18, 2017

 

His coalition controls only 73 of the 155 seats in the lower house. The composition of congress means that the president will need support from the opposition to pass legislation. As we already noted, with fewer centrist lawmakers, the divisiveness in the legislature might soon rival the US Congress.

This may reinforce the electorate’s perception that Chile is “stuck,” generating further discontent.

Pinera will lead Chile until his term ends in 2022.
 

Austria"s Anti-Immigrant Freedom Party Enters Government; Wins Key Ministry Posts

Two months ago, in Europe"s latest shocking, anti-establishment outcome, Austria"s 31-year-old Sebastian Kurz became the world"s youngest leader after his conservative People"s Party won the Austrian National Council elections, making him Austria"s youngest Chancellor in history, while the establishment Social Democrat party suffered its "worst result since Hitler rule."

Sebastian Kurz and his girlfriend Susanne Thier

And now, two months later, in a double whammy for Europe"s outraged liberal establishment, the anti-immigrant Freedom Party of Austria (FPO) - which finished third in October"s elections with 26% of the vote, less than a percent behind the Social Democrats, has joined a coalition government with Sebastian Kurz and his People’s Party (OVP). The agreement between the People’s Party and the Freedom Party, which is returning to government after more than a decade"s absence, was struck on Friday, the two parties’ leaders, Sebastian Kurz and Heinz-Christian Strache announced in a joint news conference.

Austria"s president approved the new coalition on Saturday, two months after inconclusive elections. According to BBC, the coalition government makes Austria the only country in Western Europe to have a far-right party in power.

Sebastian Kurz and Freedom Party chair Heinz-Christian Strache

Introducing the new government, and the 180-page document setting out its agenda, Mr Kurz said the two parties had agreed "on a clear pro-European outlook". Meanwhile, Strache, who in January advocated a law similar to the ban on Nazi practices to be introduced against “fascist Islam,” spoke about “mutual appreciation” with Kurz, adding that they share “the responsibility for our homeland Austria and for the people in this country.”

While the two parties have yet to unveil the details of the coalition agreement, some of the key points that will shape the next government have already been discussed: among them is a further crackdown on migration

“We want to reduce the burden on taxpayers ... and above all we want to ensure greater security in our country, including through the fight against illegal immigration,” Kurz said.

And while the FPO will be the junior coalition partner, it has already secured several critical posts in the new cabinet. Party leader Heinz-Christian Strache will be vice-chancellor, while his party colleagues will run the ministries of the interior, defense and health and social security. Specifically, Herbert Kickl, will be the new iterior minister: the party"s general secretary and campaign director, 49, was a speechwriter for the late party leader Jorg Haider and is a close confidant of the current leader, Hans-Christian Strache.

For one, the sweep assures that any and all benefits for migrants will be eliminated. To be sure, the opposition has expressed concern that the police and the security apparatus are now all firmly in the hands of the Freedom Party.

Separately, the new foreign minister will be Middle East expert and writer Karin Kneissl, who is not a Freedom Party member but was nominated by the party, which to some suggests that the Freedom Party now effectively runs Austria.  At the request of Austria"s president, the posts of justice minister and interior minister would not be held by the same party, Mr Kurz said.

Today"s crowning success of the far-right Freedom Party, which gained 7 percentage points on the previous elections, come amid a backlash to the immigrant wave that swept Europe in 2015 in the aftermath of Angela Merkel"s now defunct "open door" policy. The party"s hardline anti-immigrant stance emerged after Austria was overwhelmed by a wave of refugees fleeing the US-stoked proxy war in Syria.

Since 2015, the Alpine country took in some 150,000 asylum seekers, which accounts for over 1 percent of its population, one of the largest shares per capita alongside Sweden. The signs of the growing popularity of the far-right was evident in December last year, when Freedom Party candidate Norbert Hofer’s bid to become modern Austria"s first far-right president was only narrowly defeated in a neck-and-neck contest with centrist Van der Bellen.

And so, with Austria set to form a right-wing government, institutionalized opposition to Europe"s liberal “open door” policies on migrants is no longer restricted to the EU"s eastern territories. Poland, Hungary, the Czech Republic and Slovakia, with their own conservative governments, remain staunchly opposed to the EU relocation scheme and refuse to take in a single refugee. Now, with Austria joining the "resistance", the anti-migrant wave have officially broken into central Europe.

And now, we await Europe"s response: when the Freedom Party last entered a coalition in Austria in 2000, the country"s fellow EU member states froze bilateral diplomatic relations in response. While they were lifted months later, such measures are unlikely to happen again, as resurgent populist groups have been promoting anti-immigration and eurosceptic agendas across much of the EU, and the last thing any other establishment party wants is to experience a similar revolution in the top political echelons.

EU Could Scrap "Divisive & Ineffective" Refugee Quota Scheme

The Guardian reports that EU could scrap a divisive scheme that compels member states to accept quotas of refugees, one of the bloc’s most senior leaders will say this week.

The president of the European council, Donald Tusk, will tell EU leaders at a summit on Thursday that mandatory quotas have been divisive and ineffective, in a clear sign that he is ready to abandon the policy that has created bitter splits across the continent.

Jennifer Rankin reports that Tusk will set a six-month deadline for EU leaders to reach unanimous agreement on reforms to the European asylum system, but will propose alternatives if there is no consensus. 

“If there is no solution... including on the issue of mandatory quotas, the president of the European council will present a way forward,” states a draft letter from Tusk to national capitals, seen by the Guardian.

In effect this means scrapping mandatory quotas, because Hungary, Poland and Czech Republic are fiercely opposed to the idea of dispersing refugees around the bloc based on a formula drawn up in Brussels. Tusk is likely to face opposition, however, from other EU bodies, including the European commission.

EU leaders introduced compulsory quotas in 2015 at the height of the migration crisis, as thousands of people arrived daily on Europe’s shores, many of whom were refugees from Syria, Iraq and Eritrea.

Hungary, Slovakia, Romania and the Czech Republic voted against the move, but the policy was forced through by a majority vote.

Hungary and Poland have defied the rest of the EU by not taking a single refugee under the scheme, which aimed to relocate about 120,000 refugees, mainly Syrians. The Czech republic has taken in only 12.

All three countries were referred to the European court of justice last week for failing to implement the policy, the usual procedure for flouting EU rules.

Despite the backlash against the emergency scheme, the European commission proposed making quotas a permanent feature of EU law in 2016. Under its proposal, countries that refuse to take part in a “corrective allocation mechanism” to take the pressure off member states bearing the brunt would have to pay a “solidarity contribution” of €250,000 (£220,000) per asylum seeker.

The idea has been stalled for months, as home affairs ministers who make the law have been unable to agree on it.

Tusk will call on EU governments to take charge, rather than leaving Brussels to set the pace in managing refugee policy.

“Only member states are able to tackle the migration crisis effectively,” Tusk’s letter says. “The EU’s role is to offer its full support in all possible ways to help member states handle the migration crisis. But the EU has neither the capacity nor legal possibilities to replace member states.”

Any move to drop the plan is likely to upset Italy and Greece, countries that have urged the rest of the EU to help them cope with large numbers of refugees and migrants in recent years. Germany and Sweden, backed by the European commission, are also likely to contest any plan deemed to reduce the help offered by other member states.

One EU diplomat said some member states were surprised by Tusk’s letter “because it doesn’t seem to be in sync” with work undertaken by home affairs ministers working on the file.

We suspect we know one other "European" that will not be pleased... George Soros.

Bond Bears Beware As Ag Prices Hit Record Low

Long-end bond yields are lower and the front-end higher once again this morning as the US Treasury yield curve continues to confound by flattening. Bloomberg macro strategist Mark Cudmore suspects there is more to come... for one simple reason, so often overlooked...

Via Bloomberg,

Cheaper eats are great, but maybe not if you’re one of the many expecting a sustainable bump in bond yields next year.

Falling food prices risk wrecking the forecasts -- seen pretty much every December for years now -- for yields to climb in the new year. Ten-year Treasury rates haven’t closed a year above 2.45 percent since 2013.

 

Bond bears seem to struggle to incorporate structural disinflationary pressures that have come from technology and globalization.

 

The Bloomberg Agriculture Subindex on Monday hit its lowest level since the series began in 1991. Technology and science are making the agriculture industry increasingly efficient, and there are still plenty of production gains to be made globally.

 

 

Combined with the overhang of energy supply that’s capping oil prices -- and therefore processing, transport and distribution costs -- that means the long-term trend remains one of cheaper food prices.

 

And food prices are a key component of consumer price index baskets around the world.

 

The impact is global, real and seems to be constantly underestimated.

 

Since Saturday, China, Denmark, Norway and the Czech Republic have all released CPI prints where the annual rate was both decelerating and below expectations. Food prices were specifically cited in China’s case.

None of this is to argue that bond yields can’t spike higher for short periods, notes Cudmore, but it’s just an argument to highlight that structural disinflationary pressures from technology remain strong and shouldn’t be dismissed.

With several major central banks indicating that the marginal bias is to tighten policy, that will further crimp price rises. And that doesn’t bode well for a sustainable broad rise in developed-market yields.

Geert Wilders: "It"s Time To Drain The Swamp... In Europe"

Authored by Geert Wilders via The Gatestone Institute,

• Our democracies in the Western half of Europe have been subverted. Their goal is no longer to do what the people want. On the contrary, our political elites often do exactly the opposite. Our parliaments promote open-door policies that the majority of the people reject. Our governments sell out sovereignty to the EU against the will of the people. Our rulers welcome ever more Islam, although the majority of the people oppose it.


• Our democracies have become fake democracies. They are multi-party dictatorships, ruled by groups of establishment parties.... The establishment parties control everything, not just the politicians in their pay, but also the top brass of the civil service, the mainstream media, even the courts.... They call us "populists" because we stand for what the people want. They even drag us to court.


• We need to show that Europe"s streets are our streets, that we want to stay who and what we are, and do not want to be colonized by Islam. Europe belongs to us!

Next month, I will be visiting Prague, the capital of the Czech Republic. I have been invited to speak to a group of Czech patriots. The Czechs are a freedom loving people. In 2011, on the occasion of the 100^th birthday of Ronald Reagan, they named a street in Prague after this great American president and freedom fighter.

This fact reminded me of a shameful event in my home town of The Hague, the seat of the Dutch Parliament and the government of the Netherlands. Look for a Ronald Reagan Street in The Hague and you will find none. A proposal in 2011 to name a street in The Hague after Reagan ran into fierce political opposition. Leftist parties, such as Labor, the Greens and the liberal D66 party, argued that naming a street in honor of Reagan would "do the image of the city no good." The whole affair ended in a disgraceful political compromise. Last year, a short stretch of a local bicycle path was named the "Reagan and Gorbachev Lane".

This anecdote is indicative of the difference between East and West in Europe. We can see the same difference in the attitude of their ruling elites towards Islam, the new totalitarianism that is threatening Europe today. In the East, political leaders oppose Islam; in the West, they surrender.

Islam has already gained a strong foothold in Western Europe. Its streets have come to resemble the Middle East, with headscarves everywhere. Parts of Western Europe, such as the Schilderswijk district in The Hague, the Molenbeek borough in Brussels, the banlieues [suburbs] of Paris, Birmingham in Britain, the Rosengård area in Malmö, Sweden, and many other neighborhoods, have become hotbeds of Islamic subversion.

Islam"s totalitarian nature cannot be denied. The command to murder and terrorize non-Muslims is in the Koran. Islam"s prophet Muhammad was a mass murderer and a pedophile. Those who leave Islam supposedly deserve death. And everyone who criticizes Islam and exposes what it actually says, ends up like me: on an Islamic death list.

In the past decades, Islam has entered Western Europe with the millions of immigrants from Islamic countries. Now, the European Union wants to distribute third-world immigrants over all the 28 EU member states. The nations in Central and Eastern Europe reject the EU plans to impose permanent and mandatory relocation quotas for all EU member states. They warn about the dilution of their identity, which is not Islamic, but Judeo-Christian and humanist -- rooted in the legacy of Jerusalem, Athens and Rome; not Mecca.

Hungarian Prime Minister Viktor Orbán has denounced the EU"s pro-immigration agenda as a means to eradicate the culture and Christian identity of Hungary. Czech President Miloš Zeman is an outspoken opponent of immigration and the Islamification of the Czech Republic. Slovak Prime Minister Robert Fico has said that "Islam has no place in Slovakia" and warns that "migrants change the character of our country." Polish Prime Minister Beata Szyd?o staunchly defends Poland"s refusal to accept the EU-imposed immigration quotas. "We are not going to take part in this madness," she says. In the Eastern part of Europe, anti-Islamification and anti-mass migration parties see a surge in popular support.

Resistance is growing in the West, as well. This year, we have seen my party, the Party for Freedom (PVV), become the second-largest party in the Netherlands. This is a great achievement in a country with 13 parties in Parliament. In France, Marine Le Pen made it to the second round in the French presidential elections and her party, the Front National, got more votes than ever. In Austria, the FPÖ became the second biggest party. In Germany, the patriots of the AfD forced their way into the Bundestag.

Geert Wilders, leader of the Party for Freedom (PVV), casts his vote in The Hague during the Dutch general election that made his the second-largest party in the Netherlands, on March 15, 2017. (Photo by Carl Court/Getty Images)

However, the political elites in the West do all they can to keep the winners of the elections from power. Last month, in my country, the Netherlands, a new government coalition consisting of no less than four parties was formed. Because they stubbornly refused to talk to PVV, it took the political elites a record seven months to put together a coalition. They preferred to take in D66, the party which had denied Ronald Reagan his street in The Hague, and still they were only able to form a government with a majority of just one single seat in Parliament.

Our democracies in the Western half of Europe have been subverted. Their goal is no longer to do what the people want. On the contrary, our political elites often do exactly the opposite. Our parliaments promote open-door policies that the majority of the people reject. Our governments sell out sovereignty to the EU against the will of the people. Our rulers welcome ever more Islam, although the majority of the people oppose it.

Our democracies have become fake democracies. They are multi-party dictatorships, ruled by groups of establishment parties. They wheel and deal, often selling away the principles for which they have been elected. The establishment parties control everything, not just the politicians in their pay, but also the top brass of the civil service, the mainstream media, even the courts. Parties such as mine are excluded from coalition talks. They call us "populists" because we stand for what the people want. They even drag us to court.

Three decades ago, the countries in Central Europe witnessed a Velvet Revolution: Democratic, political and peaceful. They took to the streets. They decided that enough was enough. Thanks to their Velvet Revolution, they have leaders today who truly represent the people and who are not afraid to stand up for their nation and its identity.

We, in Western Europe, can learn lessons from the Velvet Revolution in the East. We, too, urgently need to make clear that enough is enough. In Western Europe, too, it is time to drain the swamp and to drive the elites from power. Peaceful and democratic, but thorough. We have to make our so-called democratic systems truly democratic again. The political actors should no longer be the professional politicians alone. The crisis is existential. It is time for every man and woman to do his and her duty. Because the survival of our nations itself is at stake.

We, too, have to make it very clear that we no longer want to take part in the madness of leaders, who sell out their country to the EU institutions in Brussels, and the madness of the EU elites, who sell out our continent to mass-immigration and Islam. That is why the PVV will demonstrate in the streets of Rotterdam on January 20^th. We need to show that Europe"s streets are our streets, that we want to stay who and what we are, and do not want to be colonized by Islam. Europe belongs to us!