Could Paddington leave the train?

It seems that the UK debate as to whether to leave the EU, a possibility known as Brexit, pauses only for moments to be thankful that we didn’t join the euro. The latest and somewhat surreal development is that the Institute of Economic Affairs has awarded its Brexit Prize of 100,000 euros (!) to a 30-year old Foreign Office employee, Iain Mansfield, for his outline “blueprint for Britain after the EU”. According to a piece in The Times Diary (TMS) (£) on 11 April, Our Man in Coventry*, William Hague is “said to be furious” about the award and Mansfield has “seemingly since been silenced”, deleting his Twitter account and personal website.

This personal website has in the past touched on the possibility of France leaving the eurozone. For example, last year I posted about an article by Philippe Villin in Le Figaro Magazine which was a spoof of the speech which François Hollande would give when the time came. And back in 2011, I commented on the way that some till receipts in France still show the price that would have been paid in francs. Now I’m beginning to wonder whether the UK debate is being framed in the wrong way. At the end of Tom Stoppard’s play Jumpers, George, a Professor of Moral Philosophy, observes that “… all the observable phenomena associated with the train leaving Paddington could equally well be accounted for by Paddington leaving the train …”. Or, in this case and putting it another way, rather than Britain leaving the EU, what if the EU were to leave the euro?

This is the suggestion being made by François Heisbourg, an énarque like Villin, but writing much more seriously in the current issue of Survival: Global Politics and Strategy, the journal of the IISS (Heisbourg is Chairman of the IISS Council). Last year his book, La Fin du rêve européen (The end of the European dream) was published in France, but so far it has only been translated into Greek! We can probably assume that his article, The EU Without the Euro, conveys the essence of his ideas.

Put crudely, Heisbourg believes that however unpleasant the abandonment of the euro might be, the alternatives are worse:

There would be no need to contemplate an economically risky, technically tricky and politically backward-looking option such as the orderly dismantling of the euro if more promising policies were at hand.

He rules out the creation of fully federal Europe capable of underpinning the euro as politically impossible. On the other hand:

… the actual set of policies currently followed, sometimes described as 'muddling through', [would be] more aptly called 'muddling down' in terms of its effects on growth and mass unemployment.

What he wants to avoid is a disorderly break-up of the euro, better “a deliberate and orderly unravelling of the euro in the framework of a preserved European Union”. His comments on the current situation are interesting:

… there are now two eurozones. One, composed of Germany, Finland and Austria enjoys limited unemployment … an early retum to pre-crisis levels of GDP … and great impatience with efforts by less fortunate states to transfer their liabilities to the EU level. The other eurozone has yet to recover to pre-crisis levels, with mass unemployment and long-term joblessness creating a 'lost generation', and unbelievably patient electorates who have not at the time of writing, voted in latter-day fascists or Bolsheviks. France falls squarely in between these two blocs. In short, muddling down does not look good.

Post-euro, Heisbourg would prefer a return to the European Monetary System with each country having its own currency and aspiring to stable exchange rates, to the alternatives of sub-euro common currencies:

Some have gone further by suggesting, facetiously or in earnest, the creation of a northern euro - a 'neuro' or, worse 'Bis-mark' - eventually balanced by a southern euro, or 'sudo' (as in pseudo'). It is not clear why countries that would have dismantled the euro to recover a degree of monetary autonomy would want to jump into another straitjacket.

Heisbourg sees the challenges in a “return to national currencies [which] would be universally considered a humbling setback” as being political rather than technical. He identifies precedents which support its feasibility and observes that disagreements with the suggestion he first made in La Fin du rêve européen were not mainly based on its technical difficulties. However political support from both Germany and France would be a necessity in his view. Making the best of the consequences of having to walk back from the euro (he quotes Churchill on Dunkirk – ‘wars are not won by evacuations’), he suggests that “the fact of being seen as acting decisively and competently will redound, Dunkirk-style, to the EU’s credit”.

On the subject of the UK, and pertinent to Paddington and the train, Heisbourg thinks that:

This could also be a Union in which traditional British euroscepticism would have fewer reasons to develop into full-blown, exit-prone europhobia. … Although there can be no guarantee that an EU without the euro would eliminate the risk, the probability of a British exit is much higher in all other scenarios. … an EU of which the UK is a member and whose long-term status is no longer in question would be strategically stabilising, not least as a war-shy, balancing-to-Asia United States adopts a more instrumental, tough-love attitude towards NATO and its European neighbours.

He goes on to make some interesting observations about the circumstances of individual nations in the immediate post-euro phase, and regards France as possibly being the most acutely affected in the short term. He concludes by calling for more research and debate, at which point earlier passages in his article are worth revisiting:

… upstream debate could in its academic stages be broad-ranging and systematic, with a view to assessing the most promising political avenues; political decision-making could be careful and deliberate, albeit under the conditions of secrecy called for in monetary affairs; and implementation would have to be sudden and comprehensive.

and

In order to be successful, the demonetisation of the euro and the recreation of national currencies has to occur during the compressed time frame of a longer-than-usual bank holiday, initially with a very small group of institutional actors (no more than the heads of a couple of states and the Chairman of the ECB), before the circle is broadened after the basic decision to unravel the euro has been taken.

Heisbourg’s closing words are that “the preservation of the EU must be [the] primary objective, to which the positive or negative fate of the euro must be subordinated”. Opinions, many much better-informed than mine, will differ about the practicability of adopting his proposal, but I imagine that most would accept his point that a successful implementation would be to the EU’s credit.


*Our Man in ... + Send to Coventry

2014 and All That

Like Sam Cooke I “Don’t know much about history … But I do know that one and one is two” and know enough maths to be sceptical about what non-mathematicians call round numbers, the ones that end with one or more 0s. But, probably because homo sapiens has two hands with five digits and therefore adopted the decimal system, we want to attach significance to the occurrence of numbers like the millennium in 2000 and the 100th anniversary of the outbreak of the First World War in 1914. The latter looks as though it will provide a journalistic field day for at least a year. For example, in an article, China must not copy the Kaiser’s errors, last month in the Financial Times (£), Martin Wolf asked:

Will we sustain an open global economy while also managing tensions between a rising autocracy and democracies in relative economic decline? That was the question posed by the arrival of imperial Germany as Europe’s leading economic and military power in the late 19th century. It is the question posed today by the rise of communist China. Now, as then, mistrust is high and rising. Now, as then, actions of the rising power raise risks of conflict. We know how this story ended in 1914. How will the new one end, a century later?

and the big 100 has set off high-powered academics like Margaret MacMillan who has produced a Brookings Essay, The Rhyme of History, (horrid to read on-screen, the text having been invaded by the graphics) in the ‘dreadful lessons’ genre. For her:

While history does not repeat itself precisely, the Middle East today bears a worrying resemblance to the Balkans then.

whereas

China is a rising power but its preoccupations are likely to be focused on Asia. Further afield it will concentrate, as it is doing at present, on securing the resources it needs for its economy, while probably being reluctant to intervene in far-off conflicts where it has little at stake.

Reassuring, then. But what about two distinctly non-round numbers, 76 and 74, which arise not from the difference between now and 1914, but now and 1938 and 1942?  I recently came across a post by Geoff Wade on The Strategist - The Australian Strategic Policy Institute Blog called China’s six wars in the next 50 years. It’s definitely worth reading in full – he is commenting on:

... an article which appeared on the website of the Chinese news agency Zhongguo Xinwenshe (Chinese, English translation here) in July this year. Entitled ‘Revealing the Six Wars China Must Fight in the Coming 50 Years’ (曝光中国在未来50年里必打的六场战争), the article is another manifestation of the hyper-nationalist attitude seen within some parts of the PLA. However, that an article of this nature was carried by a PRC national news agency suggests that it was approved at a very high level. 

The six ‘inevitable’ wars suggested in the article’s title are presented in the chronological order in which they will take place: 

1. The war to unify Taiwan (2020–2025) 

2. The war to recover the various islands of the South China Sea (2025–2030) 

3. The war to recover southern Tibet (2035–2040) 

4. The war to recover Diaoyutai and the Ryukyus (2040–2045) 

5. The war to unify Outer Mongolia (2045–2050) 

6. The war to recover the territory seized by Russia (2055–2060) 

… the claims to territories which this article avers need to be ‘recovered’ through warfare are long-standing and are remarkably congruent with a 1938 map of ‘China’s shame’ authorised by the Ministry of the Interior of the Republican Government which shows the areas torn from China by imperialists — European and Japanese. (See map below) The ‘lost’ Chinese territories on this map include not only the Russian Far East, the Ryukyus, Taiwan and the South China Sea, but also Korea, Vietnam, Cambodia, Laos, Thailand, the Malay Peninsula and Singapore, Myanmar, Nepal, parts of Pakistan and most of Central Asia.

The map reminded me of the Greater East Asia Co-Prosperity Sphere, the programme for Imperial Japan’s expansion and aggression which reached its maximum extent in 1942. The best map of this that I’ve found is:

At which point an Infographic by John Saeki, AFP graphics editor in Hong Kong, on the China-Japan military balance (or the China-Japan+US military balance) might be food for thought:

This is based on data from the International Institute for Strategic Studies, so it seems appropriate to draw readers’ attention to an article by their Director of Transnational Threats and Political Risk, Nigel Inkster, Conflict Foretold: America and China, published last October. Again definitely worth reading in full, not just because of the author’s background, but also for the incisive summary of the main academic security-dilemma theories which it provides (none based on round numbers), and the fact that he chooses to concentrate on space and cyber as areas of contention and uncertainty. He concludes:

… the Sino-American relationship has to be seen in terms of a dynamic involving one power in relative decline, though still globally pre-eminent, coming to terms with another which is rapidly rising and naturally driven to challenge the status quo imposed and policed by the former. It must also be viewed in light of two guiding political philosophies that are more or less in polar opposition to one another. Even in the best of circumstances, this would be a recipe for tension and competition, exacerbated by the chronic inability of each state’s policymakers to see the world from the other’s perspective.

UPDATE 6 JANUARY

Busy with  other things, I missed a significant article by Liu Xiaoming, the Chinese ambassador to the United Kingdom, which appeared in the Daily Telegraph on 2 January. Called China and Britain won the war together, its thesis was that “Japan’s refusal to face up to its aggressive past is posing a serious threat to global peace”. The particular issue it focussed on was Shinzo Abe, the Japanese prime minister, paying homage at the Yasukuni Shrine, an action which the Chinese clearly perceive as offensive. The article is skilfully written for a UK audience, starting with a reference to Harry Potter:

In the Harry Potter story, the dark wizard Voldemort dies hard because the seven horcruxes, which contain parts of his soul, have been destroyed. If militarism is like the haunting Voldemort of Japan, the Yasukuni Shrine in Tokyo is a kind of horcrux, representing the darkest parts of that nation’s soul.

and ending with a reference to the forthcoming film, The Railway Man:

It tells the tragic story of a British PoW tortured by the Japanese in the Second World War. The film is not only about the atrocities committed by his Japanese captors, but also how one of them is harrowed by his own past. His redemption is only effected through deep remorse and penitence. 

China and Britain were wartime allies. Our troops fought shoulder to shoulder against Japanese aggressors and made enormous sacrifices. Sixty-eight years have passed since that horrible war. Yet there are always some incorrigible people in Japan who show no signs of remorse for war crimes. Instead, they seek to reinterpret history. They pose a serious threat to global peace. The Chinese will not allow such attempts. I am sure British and all other peace-loving folk will not remain indifferent. 

China and Britain are both victors of the Second World War. We played a key role in establishing the post-war international order that has delivered great benefits for mankind. Our two countries have a common responsibility to work with the international community to oppose and condemn any words or actions aimed at invalidating the peaceful post-war consensus and challenging international order. We should join together both to uphold the UN Charter and to safeguard regional stability and world peace.

Rather different in tone from the Beijing Global Times which pointed out last month during David Cameron’s visit to China that:

The Cameron administration should acknowledge that the UK is not a big power in the eyes of the Chinese. It is just an old European country apt for travel and study. This has gradually become the habitual thought of the Chinese people.

Today, Keiichi Hayashi, Japan’s ambassador to the United Kingdom, had his say in the Daily Telegraph, in an article, China risks becoming Asia’s Voldemort. He defends Abe’s visit to Yasukuni, the most recent of many by Japanese prime ministers, and points out that:

As in the case of the Japan-UK relationship, exemplified in the meeting between Eric Lomax and Takashi Nagase described in the book The Railway Man, the only way to heal the wounds of the past is through the pursuit of reconciliation. But, critically, it takes two for this to be achieved. 

… East Asia is now at a crossroads. There are two paths open to China. One is to seek dialogue, and abide by the rule of law. The other is to play the role of Voldemort in the region by letting loose the evil of an arms race and escalation of tensions, although Japan will not escalate the situation from its side. The answer seems obvious. Although China has so far refused to enable dialogue between our leaders, I sincerely hope that it will come forward, rather than keep invoking the ghost of “militarism” of seven decades ago, which no longer exists.

I can’t help wondering whether Japan and China are taking advantage of this old European country’s timezone and being anglophone to express their views because it would be too provocative to do so directly in the US.


UPDATE 7 JANUARY

 The Daily Telegraph today has a third piece on this subject by an ambo, in this case our former man in Hanoi, John Everard, who was British Ambassador to North Korea, 2006-2008. His article, Are China, Japan and South Korea fanning the flames of war?, provides a  summary of  one of the island problems and the recent ADIZ and points out the lack of any regional forum in which they could be addressed.  The article could have done with a map and ends with a 1914/2014 round numbers homily.

This map from Money Morning is helpful and shows that Senkaku/Diaoyu is just one part of a problem which involves states other than the three Everard mentions.