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Winning Diplomacy

by Frank Schnittger Fri Jul 10th, 2020 at 09:00:11 AM EST

Ireland has scored a few significant diplomatic victories in recent times in getting the EU, and ultimately Boris Johnson, to accept its position on the N. Ireland border and winning a seat on the UN Security Council against strong opposition from Canada.

Paschal Donohoe's election as President of the Eurogroup of Eurozone finance ministers yesterday may not seem like much of a coup to casual observers, but it was gained against strong opposition from Spain's Finance Minster Nadia Calvino, who had been favoured by France, Germany and some Mediterranean countries as an economist with experience working within the EU institutions who would make the argument for a generous response to the Coronavirus pandemic.

Although who voted for who in the secret ballot hasn't been publicly revealed, it seems he was viewed as a compromise candidate who could bridge the gap between the "frugal four" (Austria, Denmark, the Netherlands and Sweden) and those member states in favour of stronger fiscal support at EU level. Ireland's position as a country which went through a Troika led austerity programme, and yet has recovered to become a net contributor to the EU budget may also have been a factor in his election.

Of course winning diplomatic battles is all very well, but what matters is what you do with those achievements. With the prospects of a significant post-Brexit trade deal diminishing by the day, the fact that the N. Ireland "backstop" ended up becoming a "front-stop" included in the Withdrawal Agreement, already signed and ratified, as opposed to part of a possibly never to be agreed trade deal, becomes more important by the day.

Ireland's victory in the UN Security Council election came just at the time the new Fianna Fail, Fianna Gael and Green Government failed to include the Occupied territories Bill in the programme for government which hopefully is not a harbinger of more bad things to come. Smaller countries look to post-colonial Ireland to represent their interests, and there is hardly any small country in need of greater support than the Palestinian people right now.

The role of President of the Eurogroup is an informal one, but was pretty influential in a negative way when Jeroen Dijsselbloem held the post during the last financial crisis. It is to be hoped Paschal Donohoe will play a more constructive and positive role during the current crisis. Although a leading light in the conservative Fine Gael Party, allied in Europe to the EPP, Paschal Donohue has managed to achieve a widespread consensus on Irish fiscal policy since his appointment as Minister for Finance in 2017.

In particular, he has been widely praised for his strongly interventionist approach to addressing the Covid-19 crisis which will see a projected government surplus of several billion Euro transformed into an estimated deficit of c. €23 Billion for this year. His increase of the unemployment benefit from c. €200 to €350 per week, and the introduction of a wage subsidy scheme of up to €400 per week for businesses impacted by the pandemic has done much to mitigate the immediate economic shock of the lockdown.

He tends not to be a polarising figure, has not been doctrinaire in his approach, and is always looking to find pragmatic solutions to opposing interests and political positions. I doubt there are many finance ministers in the world who have read, never mind favourably reviewed Thomas Piketty's 1,150 page magnum opus, Capital and Ideology, and he is said to be the most widely read member of the current cabinet.

The challenges he will face as President of the Eurogroup is a daunting one, trying to reconcile the opposing views of the frugal four and Mediterranean countries such as Italy on the need for a large fiscal stimulus to help the Eurozone, collectively, to recover from the crisis. He will be helped by the fact that Germany, which holds the Presidency of the European Union, has already committed to supporting a major move away from exclusive reliance on loans to greater fiscal transfer financed through debt held at EU level.

If the frugal four thought that he would act as a counterweight to the influence of France and Germany, in championing this approach, they are likely to be disappointed. He will be inclusive in his approach, trying to achieve the widest possible consensus, but he will not oppose the general thrust of the Merkel Macron policy initiative. Although Ireland has been aligned with some of the frugal four on some issues, notably corporate tax reform, it has also supported the Mediterranean countries in their search for greater central EU funding.

More difficult may be achieving a consensus on the forthcoming 2021-2027 EU budget. These negotiations are always slow, painful, difficult and fraught, and this time around may be complicated by the fact that some of the biggest potential beneficiaries - Hungary and Poland - are also the most in conflict with the ethos and values of the EU as a whole.

Already there have been calls for any net transfers to be made conditional on greater compliance with the spirit, as well as the letter of the Treaties. The free ride which some Eastern European countries have enjoyed in terms of fiscal transfers while showing nothing but contempt for EU values and institutions may be coming to an end.

But there are also issues of national sovereignty and pride at stake, and Hungary and Poland could react very badly to any attempts to make fiscal transfers directly dependent on greater compliance to democratic norms. Minister Donohoe might be just the man to square the circle of achieving greater compliance while leaving national pride intact.

Unusually for a politician, Paschal Donohue seems to have a small ego. Although one of the three most prominent politicians in Fine Gael, along with former Taoiseach, now Tánaiste (deputy Prime Minister) Leo Varadkar and foreign Minister and deputy leader, Simon Coveney, he did not challenge for the leadership when Leo Varadkar replaced Enda Kenny as party leader and Taoiseach. He doesn't pose as an intellectual despite obvious intelligence, and tends not to grandstand.

All in all he could be just the man to lead the Eurogroup through turbulent times: Conservative enough not to frighten the EPP horses, and yet open to compromise with opposing views. He is probably better at listening and building relationships than articulating radical visions, but that is probably not what the Eurogroup expect their President to do.

Media reaction in Ireland has been predictably positive:
Donohoe's new role puts State at centre of debate over EU's future
Eurogroup presidents become a kind of super finance minister, continuing their duties at home while setting the agenda for discussions with their euro-zone counterparts, chairing the talks, acting as co-ordinator and becoming the public voice of the group in the press conferences that follow the regular meetings.

Outgoing president Mario Centeno described the role of the president as "a co-ordinator, but not a passive one. It is a co-ordinator with an agenda, to strengthen integration and protect the euro."

The power of the role depends upon the ability of the person to wield it. The Eurogroup is largely an informal institution, and comes into its own during crises, when it is forced by circumstance into a decisive position to combat threats to the single currency.

With Donohoe in the role, Ireland now has a constellation of figures in key posts in what could be an era-defining moment in history. With a seat on the United Nations Security Council, commissioner Phil Hogan in the key role of EU trade chief, and even Dr Mike Ryan over at the World Health Organisation, the stage is set for a moment of global Irish influence.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Jul 10th, 2020 at 09:17:53 AM EST
John Bolton on Trump's presidency: `Every day is a new adventure'
More recently, Bolton accompanied president Trump on his visit to Doonbeg, Co Clare, in 2019. "I don't play golf," he quips, but says it was a beautiful place. He sat in on the meeting with Leo Varadkar and previous St Patrick's Day meetings in the Oval Office. On one occasion, Trump jokingly asked Bolton during a meeting with Varadkar if Ireland was one of the countries he wanted to invade, a dig at Bolton's hawkish credentials.


"I think the European Union has made Europe less than the sum of its parts. What started out, at least for some, as a free trade idea has gotten transformed into something else," he tells me. "There's no doubt that the Brussels institutions are much more important in a whole range of policy areas than the elected governments of the members of the European Union. I told [the British] at the time, and have said since, the Brexit referendum was like a declaration of independence. The US constitution opens with the words `We the people' - well, that's where sovereignty is vested. `We the people' make the rules that govern us, not a bunch of distant rulers, in this case in Brussels."

In what way is Brussels more distant from Ireland than Arizona is from Washington? States within the EU retain far more sovereignty than US states ever had. And is the EU any more divided than the USA is, at the resent time?

In any case, Bolton is unapologetic in stating that US Foreign Policy is, and should be, about projecting US power ad promoting its interests. So why should we take his comments on (say) Brexit as anything other than part of a divide and conquer strategy to promote US interests? And why would anyone want to cooperate with the US on that basis?

The UK is about to find out what bing a neocolonial client state is all about.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jul 11th, 2020 at 01:42:22 PM EST
Belgium helps Ireland to a Brexit boon
Belgium was also key to Ireland's other victory this week. Belgian support was key to Finance Minister Paschal Donohoe winning the Eurogroup presidency, giving him a platform and potential to influence that will put Ireland at the heart of debates about the future of the EU in a historic moment of change.

Some had expected Belgium to follow its neighbour France in backing Spanish finance minister Nadia Calvino for the post. However, the Benelux countries voted as a block for Mr Donohoe after the Luxembourg candidate dropped out, turning the tables on a victory Spain had thought was certain and delivering a surprise victory into Dublin's hands.

Among the motivations for Belgium's vote, according to insiders, was the Irish candidate's keen appreciation of the challenge that Brexit poses to states that are geographically close to the UK.

It was a reminder to the EU big four of Germany, Spain, France and Italy that while they are focused on nailing down a generous joint response to the economic damage of coronavirus, the interests of small nations can't be overlooked.

My Spanish contacts are also blaming Malta for not voting for the Spanish Candidate...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jul 11th, 2020 at 05:08:23 PM EST

Calvino's support by all the big countries turned out to be a weakness. Donohoe's win is also another victory for the EPP (and another defeat for women).
by Bernard on Sat Jul 11th, 2020 at 07:01:42 PM EST
[ Parent ]
As Politico points out, the EPP has gone from controlling all three top Presidencies of the EU recently to just one now, Presidency of the Commission. President of the Eurogroup is a minor consolation prize in that context.

In any case I don't see the appointment in party political or gendered terms. Donohoe is hardly a macho alpha male apex preditor.  

Rather I see his electoral win as a determination by smaller states not to be taken for granted by the larger ones, and also a recognition that the Eurogroup operates by consensus and that the President needs to be someone who can create and represent that consensus.

It will be easier for the frugal four to accept a compromise proposal brokered and presented by Donohoe than it would have been had that role been taken by a southern socialist like Calviño. The fact she is now no longer expected to represent a consensus will make it easier for her to take a hardline approach on behalf of Spain (and Italy).

I will be interested to see how he handles the Hungary/Poland issue. Ireland, too, was a social and economic backwater when it joined the EU and spent a long time as a net budgetary beneficiary. But it always saw itself as very committed to the European project and doesn't have a significant Eurosceptic party. Common catholic cultural roots may help, but otherwise there is a huge gulf between Fine Gael and the ruling parties there.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jul 11th, 2020 at 10:18:22 PM EST
[ Parent ]
Loved to see him play ... nickname the "Giraffe" ... a towering personality. The Irish stopped by a lucky goal from Wim Kieft in 1988.

by Oui on Sat Jul 11th, 2020 at 06:12:27 PM EST
I'm in a minority here, but I didn't see him as a good manager. Ireland, at the time, had an absolutely fantastically skilled team and he made them play like an English First division side. He never got the best out of gifted players like Liam Brady, David O'Leary, Paul McGrath, Mark Lawrenson, Kevin Sheedy, Frank Stapleton, etc. We haven't a single player of the same standard now.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jul 11th, 2020 at 10:24:14 PM EST
[ Parent ]
Paschal Donohue has reviewed another book:

Paschal Donohoe on The Economics of Belonging: Crisp analysis of discontent Martin Sandbu contends that economic change is the primary cause of political disruption and offers solutions

First, his analysis contends that economic change is the primary cause of political disruption: "Economic grievance expresses itself as cultural or values-driven behaviour. It intensifies or politicises particular values and attitudes, which may have been more or less close to the surface in different individuals but would not have motivated political choice in the absence of economic pressure."

This approach differs from other analysts who discern other roots to recent political changes. This includes Roger Eatwell and Matthew Goodwin in their work National Populism, where they ascribe equal importance to how bonds between voters and traditional political parties have become frayed.

However, this more singular focus facilitates the second important quality in this book: the willingness of the author to suggest solutions, to argue for the kind of changes he believes are necessary.

This is after Sandbu lacerates leaders for "half a century of policy mistakes". These include not adequately supporting workers in the shift from industrial to service-based economies and responding with scale and speed to the Great Financial Crisis.

Leaders have not confronted these failures. The convenient alternative, this book argues, is to blame globalisation for the loss of jobs or decline in living standards. Different strands of global integration are analysed, including immigration, trade and the growth of financial services.

The conclusion is clear, that political choices are at fault, and that policymakers have acquired a "learned helplessness" in the face of forces that they played a role in strengthening. The answer is not the reversal of globalisation, but the creation of more inclusive forms of economic and political integration.

The author concludes that "the West's economies of belonging withered as the consequence not of globalisation but of technological change and more or less wilful domestic policy mismanagement". A policy agenda is argued for that looks to reclaim economic openness as "a positive contribution to the domestic economy of belonging".

This agenda included the development of a universal basic income at the centre of reformed social support systems. Other elements include stronger representation rights for workers and a more radical approach to competition policy. It is possible to deliver protective policies that can also be pro-competitive. "Otherwise, disempowered workers and small businesses cannot challenge and compete with the most powerful actors."

This is accompanied by a very well-argued chapter on budgetary policy. The case is made for using tax and public spending policy to inject higher levels of demand into the economy to combat underemployment and the marginalisation of vulnerable workers. Such a claim resonates with debate now under way about the trade-offs between budgetary policy and employment levels.

This should be allowed to fund an investment strategy that will "turn places of decline into poles of attraction".

There is silence on other policies that are normally included in such an agenda. Little is said on the key topics of redistribution, the future of political and economic integration or the future of education. These are curiously significant omissions given their role in domestic policies.

This book could appear wistfully Blairite, harking back to arguments of an age that is now all too distant and moderate. For this reviewer, that, of course, is praise.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jul 12th, 2020 at 02:35:02 PM EST
Nitpick: the Piketty book Donohoe reviewed in 2017, was not Capital and Ideology published in 2019 (English translation four months ago, in March 2020), but his earlier Capital in the Twenty-First Century, published in English language in 2014.
by Bernard on Sun Jul 12th, 2020 at 06:30:56 PM EST
[ Parent ]
Thanks. Actually, on re-reading his book review, it seems to be based on After Piketty: The Agenda for Economics and Inequality,  ISBN-13: 9780674504776 Author:
Edited by Heather Boushey, J. Bradford DeLong and Marshall Steinbaum; Which is in turn a response to Capital in the Twenty-First Century.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jul 12th, 2020 at 07:06:13 PM EST
[ Parent ]
To correct myself again, I linked to the wrong book review. here is his more recent review of Capital and Ideology.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jul 12th, 2020 at 07:17:08 PM EST
[ Parent ]
Technocrats make poor people managers and have no idea what makes society tick. From my own experience at a Dutch multinational with former HQ in the licht city of Eindhoven. An outstanding research engineer needed to be kept within the concern and enticed with a higher salary. Thus he had to be promoted to a position as supervisor overseeing a dozen other technicians. That never quite works out to benefit the group in the long run.

The large tech companies in Silicon Valley put on big trousers in local, state or national discourse on civic and political issues. Big capitalism functions on greed and takes inequality as an unfortunate by-product of modern times. When Hollywood has no ethical and moral views, but feels comfortable with the status quo of violence, police, crime and the military enterprise, one gets a perpetuum with a positive feedback loop that spurts on bad behavior.

A Trump presidency and a political party completely interdependent for election succes, the speeding train will crash in the end.

Complete lacking of leadership is also a result. Even a common goal to save the Planet is too farfetched for busines and political leaders to unite. For decades the trust in politicians in Washington DC hovers around 15% ... a clear indication where corruption reigns and people cling to their overpaid and valued seats. Just a rant as I'm sitting in the back yard enjoying a nice summer day in the City of The Hague. My two cents worth. 😉😄🤣🧗🏿‍♀️🎭

by Oui on Sun Jul 12th, 2020 at 04:43:18 PM EST
In what ways will  Paschal Donohue be better for Europe as a whole than Nadia Calvino would have been? It seems to me that Calvino's push for more spending is exactly what the EU needs, notwithstanding the 'frugal four'.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jul 12th, 2020 at 06:10:41 PM EST
Fair question, and there is no definitive answer. Ultimately it is a matter of political judgement. My guess is that Calvino as President would have been a more polarising figure resulting in no substantial stimulus plan agreed by the Eurogroup, while I would be confident Paschal will be able to broker a deal which may be sub-optimal, but will at least get agreement.

Ultimately the broad shape of the deal will probably be agreed at Prime Ministerial level led by Merkel and Macron, with the Eurogroup being given the task of operationalising the details, in which case the Presidency of the Eurogroup may make little difference one way or the other.

However the opposing view is that any agreement has to be hammered out within the Eurogroup first, with the Prime Ministers then rubber stamping the agreement at head of government level. If that is the case, then the Presidency of the Eurogroup will be crucial, and I see Paschal as being far more able to keep mostly conservative politicians on board than a Spanish socialist.

However I may be dong Calvino a disservice. I don't know much about her and perhaps she would have been ideally suited for the task. The fact that she wasn't able to command a majority of members votes despite having the public support of Germany, France, Italy, Spain and Portugal would seem to indicate she was not widely viewed as having the background and skills others were looking for.

Perhaps, in de-railing her candidacy, the Frugal Four have given themselves a small victory and the political cover they need to agree a deal many have vehemently opposed until now. YMMV. My concern is that the deal is agreed and is as good as can be achieved. The issue of who is President of the Eurogroup is a minor consideration so long as we get a good deal.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jul 12th, 2020 at 07:36:51 PM EST
[ Parent ]
Some views/gossip in Politico's Brussels Playbook. In short: she was perceived as more polarizing (and too Southern).
by Bernard on Sun Jul 12th, 2020 at 09:20:27 PM EST
[ Parent ]
Whereas Paschal Donohoe is more Nordic?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 13th, 2020 at 12:09:11 AM EST
[ Parent ]
Dublin's latitude is 53°21'N, further north than Amsterdam or Berlin
by Bernard on Mon Jul 13th, 2020 at 09:09:25 AM EST
[ Parent ]
Ireland is aligned with the Hanseatic league AKA Nordics, aka, Frugal Four on some issues and with Mediterranean states on others. The Irish government would tend toward the left wing of the EPP, fairly centrist in terms of the liberal/ALDE group, and not far out of line with more conservative social democrat parties. Pretty centrist in terms of European politics overall, and with a fashionable Green tinge.

Not being a direct competitor or close neighbour to most other states and being seen as a potential bridge between the EU and the USA despite not being a member of NATO would also lend it a neutral air,.

Ireland is also acknowledged as likely to suffer the most from Brexit and other EU states will want to keep it on side as relations with the UK get ever more distant and difficult. Having run a couple of small national budget surpluses up until this year will also burnish Donohue's fiscal conservative credentials, and isn't everyone a Keynesian now?

All in all not too much to object to, unless you are Spanish or Italian...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jul 13th, 2020 at 02:15:03 PM EST
[ Parent ]
Women MEPs take aim at male-dominated finance posts
The days of men dominating Europe's top financial institutions may be numbered if a group of women MEPs get their way.

After men prevailed over well-qualified women in this month's contests to run the Eurogroup of finance ministers and the European Banking Authority (EBA), a cross-party group in the European Parliament is channeling its frustration into a push to improve gender parity in future appointments.

"I am disappointed, yes," said Evelyn Regner, an Austrian MEP who led an ultimately failed campaign to block François-Louis Michaud from taking over as executive director of the EBA. After losing an initial vote in the European Parliament's economic and financial committee (ECON), Michaud eventually won last week, with 343 MEPs voting in favor and 296 against.

However, Regner said the backlash at Michaud's appointment has constituted "huge progress" in opening people's eyes to the difficulty of ensuring qualified women are considered for prime jobs, especially since the COVID-19 pandemic has shown that "this is an important question linked to good-quality decisions."

by Bernard on Thu Jul 16th, 2020 at 04:54:39 PM EST
While I have no doubt that sexism is rampant in many parts of the political biosphere, I also have a difficulty with appointing women just to make up a gender quota. I'm sure there are dozens of women and men well qualified for the post of executive director of the EBA, but that doesn't mean the job should automatically go to a women. It is vital that it goes to the best person for the job.

Some women have appropriated feminism for their own careerist ends and may or may not have much interest in promoting women into leadership roles more generally. But most women, like most men have no great interest or qualification for top leadership roles and their lives are generally unaffected by whether the head of some institution is a man or a women.

Far more important, from a feminist point of view, is reducing the incidence of domestic violence, forced sex or pregnancy, achieving equal pay and opportunity, greater sharing of child rearing and housework, better work/life balance, and ensuring women aren't disadvantaged by taking maternity leave now and then. Elite feminism can be just another branch of elite politics, of little benefit to the vast majority of women, although I concede that having female role models in leadership positions may encourage girls to be more ambitious in their career choices.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Jul 16th, 2020 at 07:20:05 PM EST
[ Parent ]
For a good account of recent diplomatic victories, see How Ireland gets its way, a recent Economist article.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Jul 23rd, 2020 at 01:53:42 PM EST
For most visitors ... but NOT Americans due to Trump's virus pandemic from coast to coast.

Ireland offers a hundred thousand welcomes - unless you're American | The Guardian |

But that was before Covid-19 turned everything upside down and Americans became objects of suspicion - unwanted interlopers from a country which last week surpassed four million cases.

"It's never a good business model to turn away visitors but this isn't about business," said Noel Keane, a chef who recently barred two groups of Americans from Croí restaurant in Tralee, County Kerry. "From a moral point of view, it's the right thing to do."

The would-be diners admitted they had not self-isolated for 14 days after entering Ireland, compelling a rebuff, said Keane. "I said no. There was no malice. It's certainly not an anti-American sentiment."

Other businesses have followed suit, some openly, others discreetly.

JP McMahon, a chef and owner of Cava Bodega in Galway, started questioning tourists and turning away those that admitted violating quarantine after his staff felt "uncomfortable" serving a group from Texas.

by Oui on Sat Jul 25th, 2020 at 09:12:16 PM EST

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