Why Did the US Even Get Involved in Syria?

US-SECURITY-OBAMA

A candid memoir by former US Defense Secretary Ash Carter provides a rare opportunity to better understand President Barack Obama’s Syria strategy before it recedes into the historical distance. His many valuable insights raise one big question, however: Why did the US even get involved?

The apparent goal of Carter’s detailed reminiscences is to establish his role in the defeat of ISIS. The former defense secretary asserts that effective operations against ISIS and a specific battle plan, which Carter claims US and allied forces still follow (the two “red arrows” pointing toward Mosul and Raqqa), only took shape after his appointment in February 2015. But, the self-serving part aside, Carter’s 45-page report describes an effort that had few supporters in the region it affected.

Carter blames the US withdrawal from Iraq for the emergence of ISIS. But even after the terror militia set up its “state,” “the people of the region did not want invasion-sized forces to return,” the ex-secretary recalls. Throughout his two-year tenure, Carter had to “ease [Iraqi] Prime Minister [Haider al-]Abadi into accepting more US forces (which was controversial for him at home).” The Iraqi forces, too, initially were reluctant to fight, to the open irritation of Carter and US generals who had to keep prodding the Iraqis into action.

Obviously, the Syrian government of President Bashar al-Assad was even less welcoming of US intervention, even when the US administration’s idea was to set up local anti-ISIS forces from scratch “by recruiting individual fighters, forming them into units, providing them training and equipment in Turkey and Jordan, and re-inserting them into the fight in Syria.” Even though, as Carter explains, the idea was that these fighters wouldn’t get involved in the Syrian civil war, Assad was well aware of what the US thought of him. Then, Carter came in and changed the plan, switching US support to existing paramilitary formations. “Almost all the real fighters were already part of ad hoc groups and all wanted to fight Assad as well as ISIS,” he explains.

It was after the US decided that this was OK that Assad made his case to Russian President Vladimir Putin. What Putin saw was US interference in the civil war, an attempt at regime change — something he had vehemently opposed in Libya, even quarrelling with then-President Dmitri Medvedev, who had allowed the Western interference there to go unchallenged. By arming and training anti-Assad groups, the Obama administration — and Carter personally if indeed it was he who brought about the change of strategy — drew Russia into the conflict.

After Putin began the Russian operation in September 2015, Carter recalls persistent Russian efforts to establish a pattern of cooperation with the US “From that first moment, Russia sought to associate us and the counter-ISIS campaign with what they were doing in Syria — constantly telling the world of their desire to coordinate and cooperate with us, asking to share targeting and intelligence information,” Carter wrote. He rebuffed these advances for three main reasons. First, coordinating with Russia, which was closely allied with Iran in Syria, could have weakened Iraqi Prime Minister Abadi’s resolve to work with the US Next, it could link the US to the “inhuman” Russian campaign (a questionable reason at best given the multiple civilian casualties inflicted by the US-led coalition). Finally — and I think most importantly for the Obama administration — “it would naively grant Russia an undeserved leadership role in the Middle East.”

Unsatisfactory interactions with Russia, and Carter’s struggle to stop John Kerry’s State Department from making a deal with Putin that would involve military coordination rather than mere deconfliction, are described in a chapter about “spoilers and fence-sitters.” Apart from Russia and Iran, these include Turkey — which, according to the ex-secretary, “caused the most complications for the campaign” — and the Arab neighborhood, the Gulf states, which, Carter writes, “were active in lobbying and PR that somehow never translated into battlefield action.”

To sum up, US interests weren’t clearly aligned with: Iraq, Iran, Russia, Turkey, the Assad government in Syria and the Gulf states. Did the US have any enthusiastic allies at all?

Well, there were some of the anti-Assad rebels (except the ones wedded to Islamist causes) and, most of all, the Kurds. US support of them, of course, was the main reason Turkey turned from an ally into a “spoiler.” But at least someone really wanted the US to be involved, if for reasons that had less to do with ISIS than with the Kurdish dream of a sovereign state. Now, the Kurds of Iraq have voted for independence, justifying all the misgivings Abadi had about the US anti-ISIS operation.

In fighting ISIS, the US managed to step on everybody’s toes in a battered, short-fused region that was already leery of US interference after the Iraq and Libya adventures. Carter’s account sheds light on how that happened, as much as into the mechanics of defeating ISIS. It explains why peace in the region won’t be a given even after ISIS is gone: Carter himself writes that he’s concerned “the international community’s stabilization and governance efforts will lag behind the military campaign.” The account also raises the question whether a more lasting solution could have been achieved if Assad and his allies on the one hand and Turkey on the other had been left to deal with the ISIS problem without US interference.

Counterfactuals, however, are useless. The US involvement has only intensified after the Obama administration left, and political stability in Syria and Iraq is ever more elusive as Middle Eastern nations and armed groups try to get used to the US/Russia/Turkey triangle of power brokers. Carter can proudly claim a part in bringing about this new, volatile configuration.

(Bloomberg)

Germany’s Nationalists Join the 13-Percent Club

The Alternative for Germany’s 12.6 percent result in Sunday’s election wraps up an important political season for European nationalist populists. It’s a showing that has worried many both in and outside Germany; but, all things considered, it’s another defeat for the far right, which appears to have hit its ceiling in Western Europe for now.

The AfD was promptly congratulated by Geert Wilders, whose Party for Freedom (PVV) won 13.1 percent of the vote in the Netherlands in March, and by Marine Le Pen, whose National Front won 13.2 percent in the first round of the French legislative election in June. Many see the the AfD’s performance as more significant than that of the rest of the 13 percent club, since it’s a German party and German nationalism has an especially scary history. But 72 years after the Nazis’ defeat, they’re no more dangerous than those in neighboring countries.

The AfD had an advantage compared with their allies in the rest of Western Europe. Germany contains its own eastern European nation — the former German Democratic Republic. It’s poorer than the rest of the country and subject to the same post-Communist trauma as Poland or Hungary, and thus prone to elect either leftists or nationalists. The AfD’s success is largely based on gains in the east German states. But otherwise, the parties in the 13 percent club are rather similar — not just in their anti-immigrant, anti-European Union ideology but also in the ways they win, lose and react to the wins and losses. 

The AfD, the National Front and the PVV attract a lot of attention, and millions of votes, as parties — but voters don’t seem to like their candidates in direct elections. The French nationalist party ended up with just eight seats in the National Assembly. In the Netherlands, where people only vote for parties, a vote for the PVV is a vote for Wilders, the only official member the party has. 

Germans get two votes in an election — one for a party and one for a candidate in a constituency; the AfD only managed to get three people elected directly, all in the eastern land of Saxony. One of the party’s two leading candidates, Alexander Gauland, ran as a direct candidate in the neighboring eastern state of Brandenburg, where anti-immigrant sentiment also runs high — and lost to Martin Patzelt, a candidate from Chancellor Angela Merkel’s party who had opened his home to two Eritrean refugees. In fact, Merkel’s party, the Christian Democratic Union, and its Bavarian sister group, the Christian Social Union, won an overwhelming majority of constituencies; had the German electoral system not prioritized the party vote, the AfD would have done worse than the National Front this year and only a little better than United Kingdom Independence Party (UKIP) in the U.K. in 2015, when the nationalist party won one parliament seat.

Constituency voting is a test of political professionalism: It involves very personal campaigning, door-to-door, at local fairs and pubs. Plenty of nationalist parties don’t do that very well. But it’s not required to collect the protest vote, which ebbs and flows with little regard to a party’s effort, driven by news events. That’s what these parties pick up to achieve their best results; some 20 percent of AfD voters backed leftist parties in the previous election — they are hardly principled nationalists. The identity-based parties use similar techniques to keep people angry and collect their votes — they all had the highest levels of Facebook activity and engagement in their respective countries this year — but the outcomes showed the limitations of this approach, especially given low levels of penetration by social networks in Western Europe.

The dependence on voter anger can play ugly tricks on the parties: The PVV, for example, went to 10 percent in 2012 from its record high result of 15.45 percent in 2010. The AfD is in line for a similar disappointment unless there’s a steady stream of strongly negative news about immigrants and the EU.

A shortage of direct, local support has meant there is little to force these parties to behave constructively in parliament. The PVV has sponsored almost no legislation, but it has distinguished itself as a relentless questioner, putting thousands of questions to cabinet members — far more than any other political force. It has also proposed more (failed) votes of no confidence in government ministers than anyone else. That is likely the kind of activity, aimed at exploiting the parliament as a stage, that one can expect of the AfD in Germany: Gauland has promised to “hunt” Merkel so that “people on the street come to believe the parliament plays a role again.” Theatrics are guaranteed — but, in fairness, there’s not much a party can achieve with 13 percent representation except make some noise.

That tactic is not conducive to good teamwork. Internal conflicts and ego flare-ups are the norm. On Monday, one of the AfD’s three directly elected legislators, Frauke Petry, surprised her comrades by declaring at a joint press conference that she wouldn’t be part of the AfD faction in parliament. Petry represents the AfD’s moderate wing; she’s said the party would have a better future if it distanced itself from the more controversial nationalist ideas. There are others like her, who will be scared off by Gauland’s unashamed brinkmanship.

The scene starring Petry was reminiscent of the recent departure of Florian Philippot from the National Front. Philippot was once Le Pen’s right-hand man, the party’s top strategist. Like Petry, he fretted about his shrinking role in his party’s leadership.

There’s not much for the nationalists left to win or lose this year. In Austria, the Freedom Party, which led in the polls until last summer, is down dramatically — a pattern both the PVV and the AfD have also followed. Though it’ll probably do better on Oct. 15 than the 13 percent club, it won’t win the election.

Identity-based parties counted on better results after the Brexit vote and the election of Donald Trump. Their representation in parliaments confers no real power on them, though by being in the limelight, they become bigger targets for more established, more professional and less odious rivals. The backlash can be punishing in the next electoral cycle. Their only hope is that life in Western Europe will get far worse so they can avoid backsliding.


Bloomberg View

The Future of the IPhone Is Boring

Iphone

There are objective reasons why some of Apple’s new smartphones, to be unveiled on Tuesday, will sell for more than $1,000. The iPhones, including the top-of-the line X model — the 10th anniversary edition — will have some cutting-edge components, which are expensive and rare. Prices are increasing for all leading smartphones that come ever closer to combining computer and camera in one perfect device. But Apple also needs the higher margin to meet the enormous expectations of an increasingly competitive market.

To differentiate itself, a modern phone, especially a flagship one, needs an impressive screen, a processor able to handle some relatively advanced gaming, and a camera that can take pictures comparable to those of the best amateur cameras. It’s getting increasingly difficult — even for Apple, with its superior supply chain management and ability to make or break suppliers — to source the right components in the necessary quantities. That drives up the cost of producing phones. According to IHS-Markit, the iPhone 6s cost $188 to manufacture, and the 32 GB iPhone 7 cost $220. The manufacturing cost of iPhone-X is expected to rise to a hefty $387.

Manufacturing costs are also going up for Samsung — to $307 for the Galaxy S8 from $264 for the S7 — and for the makers of cheaper phones, such as Huawei, Lenovo and other Chinese manufacturers. Even though less is expected from their products, they cannot afford to lag too far behind in terms of features. But while the average prices of a phone sold by Apple and Samsung have held steady in the last couple of years, the makers of cheaper handsets, which have less of a profitability cushion, have noticeably increased prices.

Apple, however, is not just trying to keep its admittedly wide profit margins stable. If it made $550 on every iPhone 7 it sold (with only production cost, and not the company’s other expenses, taken into consideration), a price of $1,000 for the X will bring in $613. Is Apple actually getting greedier, figuring its customers, hooked on the company’s closed ecosystem and constantly improving services, can’t go anywhere?

I doubt it. This is a difficult environment for greed. Apple knows that its installed base is getting older; according to one estimate, by mid-2018, 35 percent of working iPhones will be at least two years old. There are two reasons people aren’t upgrading to the new model as fast as they used to: Mobile operators in the US and Europe have stopped subsidizing handsets, and the annual changes to the smartphones have ceased to make a difference to many users.

A 2015 phone can pretty much do the same things as a 2017 one. Apple managers understand they are running a risk with a $1,000-plus price tag: People will wonder whether any phone, no matter how advanced — even one that’s all screen, even one that’s equipped with facial recognition like a Microsoft Surface and wireless charging like a Samsung — is worth that much money.

The decision to market an ultra-expensive device likely stems from necessity. Apple needs to keep showing growth in order to maintain its lofty valuation. The iPhone is still the mainstay of Apple’s business, steadily generating about two-thirds of the company’s revenue in the quarter immediately after a new model is released, and it’s important to shore up its sales.

eIncreasing prices is the only way to post significant growth in a mature, relatively slow-growing market where your market share is stagnating. According to IDC, Apple’s market share by value, 27.6 percent in the last full quarter, was slightly lower than at the same point in the product cycle last year. That’s also been a pattern for the other market leader, Samsung. The only big manufacturers showing market share increases are Chinese ones — Huawei, Xiaomi, and BBK Electronics brands Oppo and Vivo.

Apple, ever the crafty marketer, is trying to maintain sales volume by releasing its usual incremental update, the iPhone 8, along with the $1,000 iPhone X. Only the biggest admirers of the brand and those who like to show off their wealth will go for the anniversary model — and their purchases should give the whole line a revenue boost. The end result may well prove euphoric to markets.

It’s already impressive that Apple has avoided steep revenue drop-offs everywhere except China, where the trend has been negative for quite some time. There’s really no good reason for anyone to indulge the company’s fat profit margins in the absence of operator subsidies. Chief Executive Officer Tim Cook has done a stellar job of maintaining the brand’s cachet and expanding the model range to appeal to a range of incomes.

The Apple services ecosystem, which Cook has worked hard to expand, gives the company a long-term edge over Samsung, whose software efforts keep falling flat. It’s much harder for the Korean company to push prices over the $1,000 line, and it needs to do that for the same reasons as Apple — rising costs and stagnating market share.

But the Chinese threat to both leaders remains: The option of not paying for familiar logos, just for the actual phone, is there for consumers to pick until the leaders come up with something that truly adds value. That, most likely, won’t be a brighter screen, a better camera, a slightly faster processor or even the ability to graft one’s facial expressions onto emojis — one of iPhone X’s probable features. The incremental game, even if played with Cook’s mastery, is increasingly boring and harder to buy into.

Bloomberg View

Brexit Is Beginning to Look Like No Brexit

Brexit

“Brexit means Brexit,” British politicians have been saying for months. Now it seems like it may not mean anything at all.

As the third round of Brexit talks commenced on Monday, it’s absurdly difficult to identify specific changes that would actually affect people’s daily lives or the running of businesses before 2021 at the very earliest, and likely for many years after that.

Facing the deadline to leave Europe by 2019, both the UK government and the opposition Labour Party are looking to buy more time. Labour’s shadow Brexit secretary, Keir Starmer, declared unambiguously that his party would push for a transition preserving the current economic arrangements, including the UK’s membership in the European Union’s common market and customs union.

The government is less unequivocal, but its position paper on the future EU-customs arrangement says, amid all the nebulous verbiage, that the transition’s goal should be to “ensure that businesses and people in the UK and the EU only have to adjust once to a new customs relationship.” That can only mean that the transitional deal should match the current one; otherwise at least two adjustments would be required.

Britain’s leaders have been fighting over Brexit for years. Now the difference between the Labour stance and the government one is simply rhetorical. Essentially, the government is trying to hold onto its base of Leave voters while seeking the same interim outcome as Labour.

For now, both the UK government and the opposition are talking about a finite transition period. Labour would like to see it last up to four years, potentially extending it beyond the next election, to be held in 2022. The most enthusiastic Brexiters in the government, such as International Trade Secretary Liam Fox, are talking about two years, with the cutoff before the next election.

In the context of UK politics, that difference is substantive rather than rhetorical — Fox and his allies want to deny the current opposition any control over the final, post-transition arrangement. But in reality, British leaders have little control over the length of the transitional period.

It will last as long as it takes the UK and the EU to agree on a new trade deal; otherwise, a transition is pointless. But the UK cannot dictate the pace of the negotiations, and the EU isn’t interested in dictating it as long as the transition period preserves current arrangements. The EU, after all, didn’t initiate Brexit; it’s happy for the UK to stay on current terms, and if it loses its vote, too, that’ll only be a bonus.

More than ever, the EU has the upper hand. With the UK eager for a transitional period, chief EU negotiator Michel Barnier doesn’t need to back down on any of the initial issues, such as protections for EU citizens in the UK, the eventual exit bill, or the EU’s demand that the European Court of Justice supervise any transition. The UK will have to accept Barnier’s terms to assure it doesn’t face a cliff edge in 2019.

Unless the UK government suddenly reverts to Prime Minister Theresa May’s earlier contention that “no deal is better than a bad deal,” the net effect of the Brexit vote and the resulting hullabaloo may just be that the UK will simply lose its vote in the EU. The rest will remain as it is now for an indefinite period during which a new trade deal will be discussed in the standard EU fashion — slowly, deliberately, with each of the 27 EU countries working through its own agenda until there’s a consensus. And even then, the result may not be much different from the current one — or from Norway’s relationship with the EU, which includes an emergency brake on immigration (something the EU was willing to give the UK before it decided to leave, anyway) but not much economic or legal leeway.

One could argue that the Brexit vote has alarmed EU citizens enough to consider leaving the UK or simply staying away in the first place. But “Brexodus” may well be a myth. Though the latest data show a substantial drop in net migration from Eastern Europe, there is still a net inflow. Perhaps, for some Brexit voters, this reduction in immigration is adequate compensation for the current uncertainties and the loss of the UK’s vote. But for the rest of us, Brexit is beginning to look like a classic case of a mountain giving birth to a mouse.

One could argue that the Brexit vote has alarmed EU citizens enough to consider leaving the UK or simply staying away in the first place. But “Brexodus” may well be a myth. Though the latest data show a substantial drop in net migration from Eastern Europe, there is still a net inflow. Perhaps, for some Brexit voters, this reduction in immigration is adequate compensation for the current uncertainties and the loss of the UK’s vote. But for the rest of us, Brexit is beginning to look like a classic case of a mountain giving birth to a mouse.

Bloomberg

Brexit Reversal? The EU Should Say ‘No Way’

Though most UK politicians would have us believe that “Brexit is Brexit,” European leaders have recently spoken of a reversal of the UK’s decision to leave the European Union as a real possibility. That should be alarming to anyone who cares about continuing the EU’s resurgence since the 2016 vote.

“For the first time, I’m starting to believe that Brexit will not happen,” Maltese Prime Minister Joseph Muscat said last week. “I see encouraging signs that the tide is turning.” Muscat is knowledgeable about the Brexit process: His country held the EU’s rotating presidency in January through June.

“Well I still hope that it won’t happen,” Irish Prime Minister Leo Varadkar said when asked about Brexit on Monday. He also knows more than most about Brexit because his country’s border with the UK is one of the thorniest issues under negotiation.

There are good reasons why UK politicians, affiliated with both the government and the opposition, won’t say similar things. Calling for another EU referendum did nothing for the Liberal Democrats in the June election. Most major figures in UK politics have pledged to respect the result of last year’s Brexit vote. No one wants to be first with a risky reversal, even if some polls show that most Britons would now vote to remain in the EU. Foreign leaders such as Muscat and Varadkar have no such constraints, so their sudden optimism is a strong hint that the ground is shifting behind the scenes.

But those who, like Muscat and Varadkar, hope that Brexit won’t actually happen should be careful what they wish for.

After the 2016 catharsis, the EU looks stronger both economically and politically. But it still has trouble defining its goals and even basic values, as evidenced by the current strife between Western and Eastern Europe. The easterners, led by Poland and Hungary, are pushing toward more authoritarian government and tougher measures to remain ethnically homogeneous. The Westerners stand on traditional liberal values and are softer on immigration despite pressure from right-wing parties. There are plenty of other divides, and new ones emerge constantly. Now, there’s sudden tension between France and Italy over the former’s decision to block the takeover of a major shipyard by an Italian company. French President Emmanuel Macron’s foray into trying to settle the Libyan political crisis — traditionally Italy’s domain in Europe — hasn’t helped matters.

The EU bureaucracy and the bloc’s core nations are trying to formulate a clearer common line on the union’s future. The last thing they need is another centrifugal force — and the UK, with its current political establishment, would certainly be one. Even before Brexit burst into political reality, the UK was the most outvoted member state in the EU Council. Now, with millions of citizens who have voted against the EU, it would likely be even more contrary and anti-federalist.

The UK also had the most opt-outs of important EU policies — the Schengen free travel area, the euro, the Charter of Fundamental Human Rights (the UK wanted to block the European Court of Justice from overruling its laws on Charter-related grounds) — and, uniquely, a rebate on the EU budget. The UK’s ability to obtain these exemptions has inspired Eastern European countries — whose English-speaking elites have long idolized Britain — to seek their own opt-outs. If it hadn’t been for the UK example, the euro area would probably be bigger today. When that example is eliminated, it will be easier for the EU to make a case for more uniformity and a closer union.

The UK is certainly to blame for Ireland’s forced opt-out of the Schengen area: It would have wanted the travelers with Schengen visas to come without making a separate visit to the embassy, but seamless travel with the UK was more important. Even after Brexit, Ireland may be forced to stay out of the borderless area.

The scenario under which the UK comes back into the fold humbled and willing to accept everything — the euro, Schengen, full ECJ jurisdiction — or at least to make some concessions is probably what pro-European leaders such as Macron and German Finance Minister Wolfgang Schaeuble meant when they said they’d welcome a Brexit reversal. Such a turnaround, however, appears unrealistic. As long as brain surgery remains off the table, there’s no way for the British public to change their minds so soon after making the decision to leave.

There is a better scenario for everyone than either a hard Brexit or a return to the pre-referendum status quo. It would involve the UK joining the European Free Trade Association, along with Iceland, Liechtenstein, Norway and Switzerland. Trade ties and current border arrangements would largely be preserved, but the UK would have no vote in Europe. It would stop being a centrifugal force, just as Norway isn’t. Though UK politicians say the Norwegian scenario is not being considered, it’s far easier to revive than full EU membership, perhaps for a transitional period first — with an eye to making a transition to permanence. Britons didn’t vote against EFTA membership in 2016. Simply not overdoing Brexit would be better than forcing it or reversing it.

Bloomberg View

Merkel Wins by Not Being There

Germany’s September election is like no other the Western world has seen in the last two years. As the leading candidate, Chancellor Angela Merkel, relaxed on a three-week vacation, her top challenger, Social Democrat Martin Schulz, worked the campaign trail furiously — but that only got him into deeper trouble. His party has now lost its majority in yet another German state, just as it was revealed that the state’s Social Democrat first minister had allowed Volkswagen to edit his speech about the company’s emissions scandal.

Whether or not it’s an election year, Merkel unfailingly goes on a three-week vacation in late July. Like many Germans she returns to the same spot every year; in her case, hiking in the South Tyrol, Italy’s German-speaking province. The pictures are similar every year, down to the cap Merkel likes to wear on her hikes.

Meanwhile, her rival, the indefatigable former European Parliament speaker, has crisscrossed the country, holding rallies and party events. Since his party has spent the last four years as the junior coalition partner of Merkel’s Christian Democrats, Schulz is working to stress their differences. He talks about social justice, tenants’ rights, mandatory infrastructure investment, an end to Germany’s North Atlantic Treaty Organization commitment to spend 2 percent of economic output on defense. He takes a harder line on German carmakers in the wake of their scandals.

It doesn’t seem to be helping. The CDU’s formidable poll advantage has held. And, as the chancellor’s Tyrol idyll drew to a close, Schulz found himself picking up the pieces from a political crash in Lower Saxony, an important state with about 10 percent of Germany’s population.

In the 2013 state election there, Merkel’s CDU fell just short of being able to form a coalition; instead, the SPD joined up with the Greens, which gave them a one-seat majority. Stephan Weil, the state SPD leader, became first minister — and took a seat on the supervisory board of Volkswagen, which is headquartered in Lower Saxony and has the state as its second-largest shareholder.

On Friday, all hell broke loose. A 20-year veteran of the Green Party, Elke Twesten, who had long had conservative leanings, announced she was leaving the party for the CDU. The CDU apparently started working on her just after she lost a primary vote in June; but she considered the initial approaches “immoral.” By the time she was ripe for the switch, the general election was less than two months away.

Outrage among Green and SPD politicians and supporters ensued: The CDU was accused of “buying” Twesten. But the legislator had taken the plunge and the ruling coalition no longer had a majority. Rather than hang on with a minority government until January 2018, Weil decided to call an early election. It may take place on Sept. 24, simultaneously with the national one, and Weil will have trouble improving on his party’s 2013 performance.

He is embroiled in a fresh scandal of his own after the tabloid Bild reported that Weil had allowed Volkswagen to censor an October 2015 speech about its diesel emissions scandal. The first minister argued that he’d only done that for fact-checking purposes and that all the harsh criticism he had intended to level at VW remained in the text. But now that Weil’s office has released the speech, tracked changes and all, it’s clear that wasn’t quite the case. Weil refused to soften a sentence accusing VW of manipulating emissions data for many years (the carmaker suggested adding “during tests”) — but he did soften a harsher sentence that originally said, “Volkswagen thus broke the law and abused trust.” The edited version read, “Thus, the law was broken and trust abused.”

The closeness between the CDU and the car industry was supposed to be a handicap for Merkel’s party; but now the tables have suddenly been turned and voters — in Lower Saxony and elsewhere in Germany — were deftly reminded that the scandal in Volkswagen-land took place on the SPD’s watch. Lower Saxony also is the home state of many prominent SPD politicians, including Foreign Minister Sigmar Gabriel — the party’s top official in the ruling coalition.

The CDU seized the initiative from a seemingly resurgent SPD this year by winning three state elections in a row. Lower Saxony’s looks set to be a fourth. Merkel seems to have played her hand flawlessly. As Jacques Schuster wrote in Die Welt, “through silence and absence, she has made sure all of her competitor’s blows land on cotton wool.”

As Merkel returns from vacation for the final stretch of a campaign in which she’s played a masterful defensive game, her biggest challenge is to figure out the shape of the future ruling coalition. Continuing on with the SPD is not her preferred option, although she could probably make peace with Schulz. The Greens are not a reliable partner: Too few of its members are like Twesten. And the leader of the liberal Free Democrats, a traditional CDU coalition partner, Christian Lindner, appears to be excessively hungry for the limelight — and besides, polls show the CDU and the FDP may not have a majority together in September.

By German standards, though, there’s still plenty of time to work out an alliance. Merkel will concentrate on equaling or beating her 2013 result, when her party won 41.5 percent of the vote. She is certainly on track to do so.

Bloomberg

US Sanctions Are Another Gift to Putin

Russians miss out on these delights. Photographer: Jean Christophe Verhaegen/AFP/Getty Images

Russian President Vladimir Putin tends to respond to Western sanctions in ways its authors probably didn’t anticipate: by going after those Russians who could most help their own country and who want to build ties with the West. His order last week to US diplomatic missions in Russia to cut their staff to 455 people — the exact number of staff that Russia has in the US — is the latest example.

In 2012, when the US Congress passed the Magnitsky Act, which authorized the government to impose travel bans and asset freezes on Russian officials involved in human rights violations, Russia responded by banning US adoptions of Russian children. The asymmetrical response was preposterous to many Russians, and thousands protested in Moscow. Those children whom no Russians wanted to adopt — usually those with severe disabilities — were put up for foreign adoption, and it was mindlessly cruel to deprive them of a chance for a better life. But Russian state TV conducted a major campaign at the time alleging cruel treatment of Russian kids by US adoptive families and stressing national pride. Polls at the time showed about half of Russians supporting the retaliatory bill while less than a third were opposed.

In 2014, in response to Ukraine-related sanctions imposed by the US and Europe, Russia banned the import of a long list of foods from Europe. The effect on European food producers hasn’t been major: It was largely offset by export increases to other markets and by immediate European Union support measures for certain countries and sectors. But every time I have visitors from Moscow in Berlin, I watch them stock up on cheese to take home.

People who miss French cheese are a relatively Westernized minority. Most Russians loved another state TV campaign (complete with images of illegally imported food trampled by tractors) that told them the countersanctions were good for Russian agriculture. Two-thirds of Russians say the government was right to introduce the food embargo. Only 12 percent contend that it hurts Russians more than the West.

Now that the US Congress has passed a new sanctions package, which codifies and tightens some previously existing restrictions, Putin wants US diplomatic missions — the embassy in Moscow and the consulates in St. Petersburg, Yekaterinburg and Vladivostok — to shed staff. There are only about 300 people in the missions who were hired in the US; the rest, more than 900 of them, are local hires, most of them Russians who do technical work. The US will likely choose to keep most of its diplomats (and spies) in place but get rid of the locals. This means the loss of several hundred Russian jobs. But, more to the point, the cuts will almost certainly hurt Russians’ ability to travel to the US, as former ambassador Michael McFaul pointed out in a tweet.

Even today, a Russian applying for a visitor visa to the U.S. in Moscow must wait 46 days for an obligatory consular appointment. The wait times are considerably shorter in St. Petersburg, Yekaterinburg and Vladivostok, but now they will likely converge toward the current Moscow norm, and in Moscow, people will have to wait long enough to make travel planning impossible.

If Putin wanted his retaliatory measures to be symmetrical, he would have taken into consideration that the Russian consular service in the US issued about 86,000 visas in 2015, while the US missions in Russia issued almost 183,000 visas in fiscal year 2016. But Putin doesn’t care about the kind of Russians who want to travel to the US He has repeatedly warned officials and law enforcement officers against going to Western countries where they could be targeted by intelligence services and where their assets could be seized under one set of sanctions or another. Those who still want to go are perceived almost as representatives of a pro-Western fifth column — just like those hapless cheese-eaters and the minority that believes Russian orphans can have a better life in the US than at home.

This pattern of Russian responses provides an important part of the answer to an often-asked question: Why is Russia preoccupied with Western sanctions despite their obvious inability to achieve stated goals?

It’s impossible to know the counterfactual — what Putin would have done were there no sanctions — but the sanctions have not deterred him from propping up separatists in eastern Ukraine, holding on to Crimea or allowing cyber campaigns against Western countries to go ahead. Nor do they really hurt his rich friends. There have been no high-profile seizures of their assets since Italy froze $30 million worth of real estate owned by Putin’s former judo partner Arkady Rotenberg — a mosquito bite to the billionaire. Sanctions have also failed to inflict much pain on the Russian economy, which has greatly reduced its debt exposure to Western nations and is working to increase its technological self-sufficiency in key areas such as oil and gas.

But just as the US sanctions were primarily about playing to a domestic audience — a way to respond to the Trump-Russia scandal — the Kremlin’s response is to use them for domestic fodder. They are held up as proof of “Russophobia” — Russian officials’ favorite term to describe what they see as the unfair treatment of Russia, a desire to curb it rather than cooperate with it. The Kremlin anger isn’t a sign of real pain; it’s strategic.

Being angry about sanctions strengthens Putin’s domestic message about a country surrounded by enemies and undermined by unpatriotic Russians subverted by a hostile West. The anger is aimed largely at the domestic audience and meant to tell it that looking for friends, opportunities or just plain fun in the West is futile, perhaps even hostile to the Motherland.

(Bloomberg)

How Do Weapons Reach Terrorists?

How Do Weapons Reach Terrorists?

The permissiveness of US gun laws is not just a domestic problem. Judging from a new study of internet gun sales, it’s also making the country a source of illicit weapons in Europe.

Following reports that guns for the 2016 Munich shootings and the 2015 Paris terror attacks were purchased on the vast, hidden part of the internet known as the dark web, the Rand Corporation received a commission for the first empirical study of the illegal online weapons trade. Led by Giacomo Persi Paoli, who had previously studied small arms trafficking for the United Nations, the Rand team spent a week in September 2016 observing the activity of 52 unique arms vendors operating on 15 online markets.

The results are troubling. Although weapons sales were marginal compared with drugs, they were significant and offered “both a wider range and better quality firearms than what is normally accessible on the streets.” The researchers estimate that some $80,000 worth of guns, gun parts, ammunition, explosives and digital products such as files for the 3D-printing of guns is sold every month in just the part of the market that they managed to observe. Most of the revenue comes from pistols. At an average price of $1,189 for a Glock, that’s hundreds of illegal guns a year.

Perhaps most interesting is the direction of trade. Sellers were located primarily in the US, with its vast legal arms market and well-developed cryptomarkets. And while delivery destinations were hard to pin down, the researchers concluded that “Europe appears to be a key recipient.” This is plausible in part because of the profits to be made by targeting customers across the Atlantic: In the US, a new Glock retails for $459, so the markup can exceed 100 percent. That makes shipping worth the trouble (though it’s worth noting that the Munich and Paris shootings were traced to European sellers).

The dark web has a lot of advantages for European buyers. The risk of being scammed or caught in a sting operation is high, but it’s no lower on the street. Cryptomarkets are easier to find than offline illegal arms dealers. Most transactions result in a customer review of the vendor, so it’s also easier to locate relatively — though never perfectly — trustworthy sellers. In Europe, with its strict gun laws, a street deal can be more dangerous than picking up a parcel with parts hidden in a power tool or a computer case, or several packages with bits of a disassembled gun.

Europeans broadly support tough rules against gun ownership. Although it’s not clear that fewer guns means less violent crime, plenty of studies show a positive correlation. European countries that forbid their citizens to carry weapons boast lower crime rates than the US.

The Rand report demonstrates how Europe’s rules can be circumvented if guns are legal in any country with a good internet and postal infrastructure. Anyone with a computer and a little determination can take part in the intercontinental arms trade. This means that tighter gun controls in the US, and specifically laws limiting how many a person can buy in a certain period, could cut the spillover to countries where the black market is hungry for weapons and sellers can command large premiums.

Unfortunately, even those US states that limit sales — California, New Jersey, Maryland — allow one per month. That’s far more than anyone needs for self-protection, and enough to earn a handsome additional income by shipping guns to Europe.

(Bloomberg)

An EU Rubber-Boat Ban Won’t Stop Migrants

migrant

If it looks as though Europe is clutching at straws to stop hundreds, sometimes thousands, of migrants from crossing the Mediterranean into Italy every day, that’s exactly what’s happening. On Monday, the European Union’s foreign ministers approved restrictions on the supply of inflatable boats and outboard motors to Libya.

The boats that bring the migrants, mostly Africans these days, have long been a target of European efforts to dismantle the human-trafficking networks that control the Libya-Italy route. According to a U.K. parliamentary report, Operation Sophia, the joint European naval operation that began in 2015, had destroyed 452 boats by mid-June. These were larger, mainly wooden boats that could carry up to 500 people and offered the smugglers the greatest profit margins. Removing them from the Mediterranean has made the migrant crossings riskier. As a European Commission communication pointed out in January, the smugglers’ “business model” has changed:

They increasingly place irregular migrants and refugees on cheap and completely unseaworthy inflatable dinghies that have no prospect of ever reaching the Italian shores, assuming they will be picked up near or within Libyan territorial waters. The fact that such dinghies now account for 70 percent of all boats leaving the Libyan coast contributes to making journeys increasingly dangerous and to the rise in the number of deaths at sea.

What the focus on destroying boats hasn’t changed are the migrant arrival numbers. On July 14, 5,122 people came, close to the record of 5,504 set on Aug. 31, 2016. But the EU stubbornly keeps after the boats, this time rubber ones.

A Sophia report from December 2015, published by WikiLeaks three months later, noted:

Reports of rubber boast (sic) being imported from China and transhipped in Malta and Turkey are supported by a recent interception by Maltese customs of 20 packaged rubber boats in a container destined for Misratah, Libya. As there are no legal grounds for holding such shipments, it was released for delivery to the destination.

That cargo would now be seized. But Europe has little control over the Chinese boat trade.

China has a lively inflatable boat industry with some 180 builders. Some two-thirds of rubber boats imported to Europe come from China. The manufacturers and sellers there know how their products are often used. On Alibaba, the biggest Chinese online market, the dinghies are marketed as “refugee boats.”

It’s easy to predict the consequences of the export restrictions. Dinghy shipments to Libya will no longer go through Malta, but rather through Turkey and North Africa. The EU sanctions have a loophole for fishermen, which will be exploited. If a shortage is created, smugglers will have to pay more for the vessels, so they’ll cram even more migrants into them or to reuse the boats instead of dumping them at sea. This may result in more deaths; so far this year, 2,174 people drowned or went missing trying to make the crossing, compared with 2,951 by this point of the year in 2016.

In May, the EU asked China to help stop the shipments. But the producing country can’t reasonably be expected to stop a large homegrown industry from shipping rubber boats to Turkey or Morocco.

The ugly reality of the current migrant crisis is that Europe can do little to stop the smuggling. The boat restrictions and EU participation in the training of the Libyan coast guard are the hopeless flailings of a bloc trapped by the consequences of the 2011 North Atlantic Treaty Organization military operation, which accelerated regime change in Libya but left it lawless and the coast practically unpoliced. In the same document that imposed the rubber boat restrictions, the EU reiterated “its firm support” for the internationally recognized government of Prime Minister Fayez Al-Sarraj, which controls little in Libya beyond the capital city of Tripoli.

This is a losing game. There’s no point in repeating the bromide that the Libyan conflict cannot be resolved by force. Force is exactly what’s likely to resolve it, when the strongest rebel group manages to consolidate the country or when it splits up the way Somalia did. Apart from pinpointing the strongest rebels and backing them militarily — an unpalatable option to democracy-supporting Europeans — the only solution to human trafficking out of Libya would be to land an expeditionary force to pursue the smugglers. Since the EU’s joint military capability is modest, this should be an operation for NATO, which helped create the original mess and should help clean it up.

If that ever happens, Chinese rubber boat sales will drop a little — but then the boat-building companies weren’t started with African migrants in mind. They’ll just have to go back to courting clients who want dinghies because they like to go fishing.

Bloomberg

Putin Preferred Clinton? Let’s Test Trump’s Theory

In two recent interviews, President Donald Trump made the argument that Russian President Vladimir Putin would have preferred Hillary Clinton in the White House.

Trump’s argument is that he “campaigned on strong military, strong borders, and low oil prices” and these goals don’t benefit Putin:

Look what I’ve done – oil prices have been driven down. We’re sending LNG to Poland, massive shipments to Poland. That’s not what Putin wants. And for the military, we’ve got $56 billion more of equipment than anybody ever thought of, in the last budget. Putin doesn’t want that – so why would Putin want me?”

Under Clinton, Trump said, the US military would be “decimated” and oil prices would be higher:

We’re going to be exporting energy – he doesn’t want that. He would like Hillary where she wants to have windmills. He would much rather have that because energy prices would go up and Russia as you know relies very much on energy.

Putin doesn’t care whether the US standing army exceeds half a million or not, or whether the US Navy has more ships. Even during the Cold War, when the Soviet Union was a much bigger country than today’s Russia, it couldn’t outspend the US on defense. Today, the US military vastly outnumbers the Russian one, and once other North Atlantic Treaty Organization countries are added in, Russia is dwarfed, frankly. That, however, doesn’t matter because both countries’ vast nuclear arsenals deter them from ever having an all-out war, and for possible local and proxy clashes, numerical strength isn’t important. 

Russia and the US back different sides in the Syrian war. There, Trump is doing roughly what Clinton intended to do to defeat ISIS. He intensified the US air campaign and stepped up support for rebels opposing Syrian President Bashar Al-Assad. He has also launched isolated attacks on Assad’s forces, ostensibly to restrain them from using chemical weapons or striking US allies, but perhaps also to make sure the US-backed forces don’t have to compete for areas they’re clearing of ISIS militants. President Barack Obama refrained from such aggressive actions, but Clinton, who established herself as a Syria hawk, likely would have acted along the same lines. Many feared she would have been more insistent on removing Assad — she has called it a “number one priority” — but if she did, that would hardly have made her Putin’s preferred candidate, since he continues to stand by Assad as an ally.
On energy, too, President Clinton would have been an equal or greater nuisance to Putin.

Democratic members of Congress currently support a bill broadening Russia sanctions to include energy pipeline projects, another indication that Clinton probably would have pushed through similar measures to retaliate for what she, in the summer of 2016, came to see as a major Russian effort to defeat her.

Whether or not Putin would have preferred Clinton as president hinges on more esoteric considerations than whether or not she would have followed traditional US military and energy policies, which have always clashed with Russian interests and to which the Kremlin has long adapted.

Clearly, given the role the Russian propaganda machine took on during the 2016 campaign, Putin was interested in short-term destabilization and in mocking US democracy. But he has given no indication that he wants instability in the US over the long term. It’s not clear how it can benefit the Kremlin except by diverting attention from its quieter exploits, such as the long-term, slow movement of the Russian border into Georgian territory occupied by Russia’s puppet state of South Ossetia. 

If Putin is learning anything from the chain of events following Trump’s election, it’s probably a deepening conviction that he can’t get any traction with the US because its institutions are inherently hostile toward someone like him.

Bloomberg View