Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: We need to build a second category of the European Union,
Speaker 2: which is, in the words of Macon, the defense Europe
Speaker 2: and that requires different methods, different capabilities, etc. Etc. And
Speaker 2: we have not even seriously started to build this.
Speaker 1: Welcome to voter Nomics, where politics and markets collide. This year,
Speaker 1: voters around the world have the ability to affect markets,
Speaker 1: countries and economics like never before.
Speaker 2: So here at.
Speaker 1: Bloomberg we've created this series to help you make sense
Speaker 1: of it all.
Speaker 3: I'm alegro Stratton, I'm Adroom Wooldridge, and I'm Stephanie Flanders.
Speaker 1: So at the top of the show you heard from
Speaker 1: our guests this week, Wolfgang Ishinga. He's a former German
Speaker 1: ambassador to the US and also the former chairman of
Speaker 1: the Munich Security Conference. It's an annual conference that brings
Speaker 1: together NATO member countries and various security experts to discuss
Speaker 1: current issues in security and defense politics, and it frequently
Speaker 1: makes the news, does it not. Anyway, it was a
Speaker 1: very interesting conversation, but it didn't include Stephanie and I. Asia.
Speaker 1: You were driving this far.
Speaker 4: It was the men retaking control.
Speaker 1: And you began by asking him whether democratic Europe can
Speaker 1: defend itself from threats from people who want to destroy it.
Speaker 4: Yeah, and I think he conceded, I think that Germany
Speaker 4: has been rather irresponsible for a long time. And he
Speaker 4: even conceded that there might be some virtue in Trump,
Speaker 4: in the sense that Trump really woke up Germany and
Speaker 4: woke up native to the fact that they weren't or
Speaker 4: aren't spending enough on defense. And then he was optimistic
Speaker 4: and said that finally everybody is beginning to get the
Speaker 4: message that booting is a massive danger, and they are
Speaker 4: spending a bit more.
Speaker 3: I think that what that opening clip points to, as
Speaker 3: he was talking about the need for a different kind
Speaker 3: of thinking about the European Union, a different way, that
Speaker 3: it was created to solve one problem and is going
Speaker 3: to have a different maybe even a different collection of
Speaker 3: countries to solve the problem it faces now.
Speaker 4: Massive I thought that was massively interesting, both that the
Speaker 4: point is making, I think is true and is a
Speaker 4: fascinating point, but also that Germany has been a byword
Speaker 4: for not quite complacency or not quite stagnation, but basically
Speaker 4: for thinking that things are just about right. And this
Speaker 4: was a key member of the German establishment, saying, actually,
Speaker 4: we've got to be much more innovative. The world is
Speaker 4: changing very rapidly and we need to change with it.
Speaker 1: Okay, I'm going to stop you there because we're going
Speaker 1: to talk and listen to Wolfgang later and then dissect
Speaker 1: it in great detail in a second. Also on the show,
Speaker 1: we'll go over to Berlin to get a temperature check.
Speaker 1: I'll support for the Right in Germany ahead of the
Speaker 1: European elections in early June, really quite soon. But first
Speaker 1: back to you agents. He had to tell you that.
Speaker 3: Well, actually, and this just my idea because I did
Speaker 3: think often Adrian's columns a very good read. But I
Speaker 3: thought that your column last week about Richie Sunac was
Speaker 3: particularly good Adrian.
Speaker 1: For the people who didn't see it or haven't read it,
Speaker 1: it was where is Richie Sunac leader of broken Tories?
Speaker 1: The problem is not that the PM is bad at
Speaker 1: his job, it's that he has to lead a party
Speaker 1: at war with itself.
Speaker 4: Yeah, you have a lot of people saying that Richie
Speaker 4: Sunc is a really bad Prime minister, and that suits
Speaker 4: a lot of people's narratives. You have people on the
Speaker 4: right saying that he's behaved he's betrayed fundamental Tory principles.
Speaker 4: You have people on the left saying he's been a
Speaker 4: bit of a disappointment, and of course the Labor Party
Speaker 4: is in the business of trashing Sunac. I don't think
Speaker 4: he's a first rate politician, but I think he's a
Speaker 4: pretty good politician. He's a good enough politician to have
Speaker 4: risen to the top of the Tory Party at a
Speaker 4: very young age, the youngest Prime Minister since Lord Liverpool.
Speaker 4: And when it comes to political judgment, he's made a
Speaker 4: number of judgment calls, backing Brexit, backing Boris, to all
Speaker 4: the things that he needed to do to be in
Speaker 4: line with the soul of the Tory Party. So I
Speaker 4: think he's a pretty good politician.
Speaker 2: Briti Asian.
Speaker 4: By the way, he did believe I think that's right. Yeah,
Speaker 4: I think that's right. So his judgment is in alignment
Speaker 4: with the Tory Party. The real problem is not Richie
Speaker 4: Sunac and his personality in his political judgment, and he's
Speaker 4: not a good fall guy. The real problem is with
Speaker 4: the nature of the Conservative Party, which is a broken,
Speaker 4: divided and quite frankly pretty crazy party at the moment.
Speaker 3: Yeah, I just say this is probably the time where
Speaker 3: we have to remind listeners. But one of our three
Speaker 3: who isn't me or Adrian, has actually worked as an
Speaker 3: advisor to Richie Sunac. Yeah, indeed, so we get our
Speaker 3: disclaimers in, but means she has a particularly insightful view
Speaker 3: on this.
Speaker 1: I know, well, I did enjoy it, but I was
Speaker 1: saying he did believe all those things that Adrian says, Yeah,
Speaker 1: I think that's right. I know that's right, something like
Speaker 1: the Rwanda program, which Richie does believe. He believes in
Speaker 1: that program. Brexit, he believed in that program. So if
Speaker 1: I think back to covering labor, so they were in
Speaker 1: ninety seven, they go out in twenty nine and twenty ten,
Speaker 1: and I remember covering all the coups that there were
Speaker 1: then in quite some depth. And I wonder if there's
Speaker 1: a sort of extent to which after ten years, thirteen,
Speaker 1: fourteen years, any political party is knackered. And it's a
Speaker 1: question a statement whether it's just you need some time
Speaker 1: to reflect away from the I.
Speaker 4: Think exactly true that they're tired. But there's something more
Speaker 4: going on with the Tory Party than that, and that's
Speaker 4: that the party was fundamentally broken by Brexit, partly because
Speaker 4: Brexit drove away a lot of very good people, so
Speaker 4: they're even more knackered because some of the people who
Speaker 4: would have refreshed them have gone, but also that Brexit
Speaker 4: failed in the sense and because it failed, they're casting
Speaker 4: around either for villains if they're on the right or
Speaker 4: if they're on the left of the party and think,
Speaker 4: my god, we're central to this party which has made
Speaker 4: a terrible judgment.
Speaker 3: Well, I guess we can separate two things. We could
Speaker 3: definitely have a conversation about whether or not Richie Sunek
Speaker 3: is doing the best you could do in a very
Speaker 3: difficult circumstance. But I do think you made an interesting
Speaker 3: point in your column. What has been true politics within
Speaker 3: the Conservative Party and got him to where he is
Speaker 3: has been bad economics for the country. And the other
Speaker 3: thing which I think is problematic for him is Brexit
Speaker 3: and some of these other things that he's been associated
Speaker 3: with and has served him so well in terms of
Speaker 3: making it ahead in the Conservative Party. Is a sort
Speaker 3: of tension between that and his sort of personal brand.
Speaker 3: He can't get away from the fact that he's a
Speaker 3: kind of fully paid up member of the global kind
Speaker 3: of cosmopolitan elite. He was a successful city person and
Speaker 3: if you've got the city and much else in UK
Speaker 3: business getting harmed often sidelined by Brexit, it just has
Speaker 3: implanted attention in his brand and in his reputation, which
Speaker 3: I think is an added problem for him.
Speaker 4: Absolutely. The Tory Party has managed to put together a
Speaker 4: winning coalition under Boris Johnson, which was a coalition between successful,
Speaker 4: fairly rich southern people on the one hand and the
Speaker 4: just about managing on the other hand, and Boris somehow
Speaker 4: appealed to both groups, and that coalition has fallen apart.
Speaker 2: Now.
Speaker 4: It's fallen apart for very solid economic reasons because Rexit
Speaker 4: didn't deliver the economic boost was supposed to deliver. But
Speaker 4: it's also fallen apart because it's the sort of coalition
Speaker 4: that's held together by a charismatic strong man. And Rishi,
Speaker 4: whatever he is, is not a charismatic strong man. He's
Speaker 4: a technocrat.
Speaker 1: All fascinating stuff. But I think it's possibly also more
Speaker 1: prosaic than everything you've just said, which is, if you
Speaker 1: look at the decline in the Conservative polling, it starts
Speaker 1: with Party eight since December twenty twenty one, and then
Speaker 1: another precipitous fall is the trust forty nine days. Whilst
Speaker 1: everything you've said is cogent and eloquent as always, Adrian
Speaker 1: is actually I think that the sort of what he's
Speaker 1: dealing with as well are the kind of the scandals and.
Speaker 4: The poor chi he doesn't drink. He was opposed to
Speaker 4: his trust, she was his opponent, and he's getting the
Speaker 4: fallout for both of those things.
Speaker 3: There was an early stage where sort of things post
Speaker 3: Liz trusts, something's just working better in White or post
Speaker 3: Liz trust post Boris Johnson. There was a sort of
Speaker 3: glow around getting things done. But it's hard to be
Speaker 3: a technocrat when you're actually dealing with the consequences of
Speaker 3: many years of underfunding and sort of chaos in some
Speaker 3: parts of the NAHS. I do think that we should
Speaker 3: take a moment to, at least in my case, just
Speaker 3: to slightly ridicule just the number of resets, even if
Speaker 3: we think that he's on a very tough wicket and
Speaker 3: blah blah blah. But he was the force of radicalism
Speaker 3: and change in the Tory Party conference. Then a few
Speaker 3: weeks later, the old former Prime minister comes in as
Speaker 3: a Foreign secretary. This week I don't know what you
Speaker 3: think about this, Adrian, but to try and stake out
Speaker 3: blue water between him and Kirs Sarma on defense spending
Speaker 3: on the basis of a three week old, unfunded pledge
Speaker 3: to raise defense spending by half a percent of GDP,
Speaker 3: when that would only take it back to where it
Speaker 3: was when Labor left office.
Speaker 4: There are very strange things going on from Downing Street.
Speaker 4: On the one handers this and Grant chapped the Defense
Speaker 4: min Ister saying we're now in a war footing well,
Speaker 4: where did that come from? On war footing half percent
Speaker 4: of gaut And then you had the chance of the
Speaker 4: checker saying we're going to create a new Microsoft in Britain,
Speaker 4: a British Microsoft, without any sort of sense of how
Speaker 4: and when and why. You can see why what the
Speaker 4: mechanics of this. These are big announcements. There's no preparation
Speaker 4: for them, there's no follow up. They're just thrown out
Speaker 4: there as if perhaps they'll stick on the wall.
Speaker 1: At some point we're all both looking at a strategic
Speaker 1: comms for the Treasury. I feel somewhat on the hook
Speaker 1: for these points, but look, I think it is a
Speaker 1: political fact that the Labor Party are at least twenty
Speaker 1: points ahead, and I think in that context, I genuinely
Speaker 1: don't see them as resets. I think downing stream don't
Speaker 1: see them as resets. They see them as we are
Speaker 1: going to make an argument that we want you to
Speaker 1: listen to now. And I think that completely take your
Speaker 1: point that the conference speech saying everything that happened in
Speaker 1: the last thirty years was crash and then bringing back
Speaker 1: the Prime Minister from that period of thirty years, David Cameron,
Speaker 1: that was incoherent. Other than that, I think you're allowed
Speaker 1: to say, how do I want to connect with people?
Speaker 1: Have I connected so far with this view of the
Speaker 1: world I have? I think some of them are resets
Speaker 1: and some of them are not. Sometimes I think it's
Speaker 1: fair for them to want to have that permission to
Speaker 1: be listened to and get a message into people's heads
Speaker 1: that it is a more dangerous timing. And I think
Speaker 1: all of us around this this in this studio would
Speaker 1: accept that we started the year thinking the election would
Speaker 1: be about economics. It probably still will be largely about economics,
Speaker 1: but there will be this defense and security tinge to it,
Speaker 1: and don't even though many of the defense and security
Speaker 1: threats were around in January. We were all convinced it
Speaker 1: was going to be about interest rates and inflation and
Speaker 1: so on, and it will now have that different flavor,
Speaker 1: which is about threats and perils ahead. I'm going to ask,
Speaker 1: are we allowed to move on?
Speaker 3: I think we got a natural segue.
Speaker 1: We're going to go to Berlin. I'm going to enjoy
Speaker 1: going to Berlin and away from West We're going to
Speaker 1: another believed leader to speak to our German government. Reporter
Speaker 1: Michael Ninaba, Hi, Michel, how are you Hi?
Speaker 5: I'm fine, Thanks for having me on the show.
Speaker 1: You've just been back from a trip away with Schultz,
Speaker 1: is that right?
Speaker 5: Yeah, we returned yesterday from a two day trip to Sweden.
Speaker 5: Were shots on the first day, and Monday met his
Speaker 5: Nordic counterpart and they had the Nordic Summit and he
Speaker 5: was a special guest, and then they were obviously also
Speaker 5: bilateral talks with the Swedish counterpart on Tuesday, and yeah,
Speaker 5: it was in a good mood. Also in the evening
Speaker 5: he joined the journalists at the hotel bar and stayed
Speaker 5: up late and we discussing things that always off the record,
Speaker 5: how late.
Speaker 1: Is late, how late is late?
Speaker 5: There wasn't what beyond midnight, and that's some point he
Speaker 5: changed to the red wine to coffee and.
Speaker 1: Tell us, tell us what has he got to be
Speaker 1: jolly about on his polls, the worst polls for any
Speaker 1: chancellor in German polling history.
Speaker 5: Yeah, it's not looking that they're great right now. I
Speaker 5: mean the posts were actually even worth the last year
Speaker 5: when the three parties and short coalitions were actually figuring
Speaker 5: about nearly everything. But nonetheless the coalition still sticking together
Speaker 5: now and it's the third year, and next year we
Speaker 5: have elections coming up, federal elections but now obviously to
Speaker 5: the European elections in June and then three really important
Speaker 5: regional election in three eastern states in September. And it's
Speaker 5: not looking too good for Short Social Democrats. They are
Speaker 5: basically are far behind the opposition Conservative, the party of
Speaker 5: former tenthla Angela Merkel, and the Short Social Democrats are
Speaker 5: far behind around fifteen percentage points. And the past six months,
Speaker 5: the right wing populist the alternative for Deutsche Lander af
Speaker 5: the party actually surpassed the Social Democrats in the poll,
Speaker 5: and this also showed how difficult the situation for shortice.
Speaker 3: And I think that's the alternative for noise on the AfD,
Speaker 3: which tends to be a focus for people outside for
Speaker 3: historical reasons, but also I think people just personify fears
Speaker 3: of populism gaining sway, and especially in Europe's largest economy.
Speaker 3: But I mean, do we focus too much on them?
Speaker 3: Obviously it looks like their pollings come off a bit
Speaker 3: and they've had some scandals in the last few weeks.
Speaker 5: In Germany also, they are pretty much in the headland
Speaker 5: and in the fold everyone's obsessed with them, not only
Speaker 5: a foreign media on Anglo Saxon and media. Obviously this
Speaker 5: is also unkettling a lot of German But there has
Speaker 5: been like a shift in a port and in the
Speaker 5: port it started at the beginning of the year with
Speaker 5: this revelation that there was a meeting of nationalist then
Speaker 5: AUSO senior up the members where they discussed basically a
Speaker 5: deportation scheme getting not only a Thilum speaker and foreigners
Speaker 5: out of the countries, but basic all of the German
Speaker 5: citizens with a citizenship but with foreign roots to kick
Speaker 5: them out of the country, which pretty much echoed the
Speaker 5: policies and in deportation schemes of other Hitler and Nazis.
Speaker 3: And then we saw the mass demons demonstrations.
Speaker 5: Yeah, it was pretty huge. There were like hundreds of thousands,
Speaker 5: like over several weekends. The count was basically millions of
Speaker 5: Germans took it to the streets to the protest against
Speaker 5: the far right and typically against the AfD. And after
Speaker 5: that support in the polls it started to edge down.
Speaker 5: It's still falling because there were also other scandals or
Speaker 5: revelations I would say, showed that some lawmakers or eight
Speaker 5: two lawmakers of the AfD had linked to either Chinese
Speaker 5: secret intelligence or even the Russian States.
Speaker 4: Now there seems to be a big divide on the
Speaker 4: right in Europe about Russia, with some being very pro
Speaker 4: put in some being quite hostile to puting. Where does
Speaker 4: the a FD fall on that spectrum.
Speaker 5: So the RD is clearly for immediate stop of weapons
Speaker 5: support for Ukraine. So this is pretty much ro Russia's
Speaker 5: high on Russia, the witch list, I would say. They
Speaker 5: are also pretty much in favor of winding back European integration,
Speaker 5: taking a power back from Brussels to Berlin. And basically
Speaker 5: if this plan does not work, they want to keep
Speaker 5: the door open for Germany to leave the European Union,
Speaker 5: So they are basically seeing Brexit Britain's exfit from the
Speaker 5: European Union as a blueprint if they don't get their way,
Speaker 5: So they are nationalists. They don't believe in closer European integration,
Speaker 5: which is also basically a goal of poutine rights to
Speaker 5: the weeken European integration. So you can divide and rule
Speaker 5: and have your weight.
Speaker 4: And what is the relationship between the AFT and the Conservatives?
Speaker 4: Do they take votes from each other, do they support
Speaker 4: each other? How do they work together all apart?
Speaker 5: Yeah, in Germany, this is one of the most tricky
Speaker 5: things for the opposite leader of a big maths right now,
Speaker 5: he's on the one hand talking about a Chinese wall
Speaker 5: a brand Mauer against the f DAY which means no
Speaker 5: corporation at all on any estate level, between the city
Speaker 5: Conservatives and the far right r Day. But practically he
Speaker 5: is in the part year. He did some interviews in
Speaker 5: which he basically was mimicking anti foreign rhetoric, pretty much
Speaker 5: like resembling what the Aftery is saying. For one example,
Speaker 5: Germany has given asylum to more than one million Ukrainians
Speaker 5: leading from the fighting, so he said they are stealing
Speaker 5: appointments at the dent and so the normal Germans can't
Speaker 5: get an appointment at the doctor anymore. This shows you
Speaker 5: a bit how also, who supposedly is a center right
Speaker 5: politician is changing his rhetoric in an attempt to secure
Speaker 5: support and vote. So it shows how the r D
Speaker 5: is also influencing the Conservatives party there agenda, their rhetoric
Speaker 5: and basically with it the whole political debate.
Speaker 3: The perspective that we might remind ourselves of is unlike
Speaker 3: in France, for example, where you have marin Na Penn,
Speaker 3: the leader of the resseantan Nationale formerly National Front, has
Speaker 3: a realistic shot looking at the poles of being the
Speaker 3: next Front president. There is no chance of having the
Speaker 3: AfD leader becoming chancellor anytime soon. But of course the
Speaker 3: question is how much do the mainstream parties feel they
Speaker 3: have to absorb those views, And you think that's very much.
Speaker 3: The Conservative Party is a different animal now than it
Speaker 3: was a few years ago before, after you had had
Speaker 3: this new rise in support.
Speaker 5: Yeah, it has definitely shifted to the right of not
Speaker 5: so much moderate and center as it was under Anguila Mercle.
Speaker 5: But having said that, the RD of the people of
Speaker 5: future will never get that strong that it would be
Speaker 5: even getting close to winning the Chancery. And even there's
Speaker 5: actually no coalition constellation in which the r D would
Speaker 5: currently get close to power. But the thing is now
Speaker 5: at the beginning I mentioned the three regent elections in
Speaker 5: the East, September is in fact sepdemic exactly that AFDI
Speaker 5: is still pulling pretty strong and it's projected to come
Speaker 5: in as the strongest parties in Thuringia, Saxony and Brandenburg.
Speaker 5: And this will make the whole process of coalition building
Speaker 5: really difficult for the other parties and to stick to
Speaker 5: this mantra and to this pledge that they would never
Speaker 5: work together with the af D.
Speaker 3: I think we're beginning to understand why I left shows
Speaker 3: Field and need to drink a lot of coffee.
Speaker 1: No, Michael, promise us you'll come back. You'll save all
Speaker 1: your stories of red wine till midnight and coffee with
Speaker 1: the German chancellor for vhotonomics.
Speaker 5: We'll do happy to come back and join you again.
Speaker 1: It was a lot of fun, all right, Thank you
Speaker 1: very much, Mihail Nina Bauer, who is our German correspondent
Speaker 1: in Berlin. Next Adrian I can't think of a more
Speaker 1: Adrian style guest than Wolfgang Ishinger, former German ambassador to
Speaker 1: America forty five years in the German Foreign service.
Speaker 3: It's a real shame you can't see Adrian's face.
Speaker 4: I don't know what to say about that. I mean,
Speaker 4: I've never been accused, even my best friends, of being
Speaker 4: a potential ambassador. I don't think I'm particularly diplomatic in
Speaker 4: the way I present things. I thought he gave a
Speaker 4: very interesting assessment of what's going on in Germany. But
Speaker 4: I started off by asking him whether Germany can spend
Speaker 4: enough on defense given that voters don't want to do so,
Speaker 4: And this is the answer he gave us.
Speaker 2: First of all, let me be very clear about my
Speaker 2: own fundamental belief. I certainly believe that democracies are going
Speaker 2: to be able to defend themselves, their borders, their people,
Speaker 2: their territories against whatever dictatorship's authoritarian regimes. But obviously we
Speaker 2: have a problem. Democracy is the best form of government
Speaker 2: that has so far been invented, but it has a
Speaker 2: number of drawbacks, and among them rawbacks is an inherent
Speaker 2: lack of efficiency. Democracy always requires debate. There's no put
Speaker 2: in in a democracy. Who can simply say this is
Speaker 2: the way we're going to do things from now on,
Speaker 2: which makes things difficult. Sometimes we seem to take two
Speaker 2: steps forward and then one step backward. If you look
Speaker 2: at the development over the last three, four, five, six
Speaker 2: decades of the project of European integration, it's been difficult,
Speaker 2: but at the end successful process.
Speaker 4: You say successful. But perhaps we are not spending enough
Speaker 4: money on defense. We have been a sort of free
Speaker 4: rider on America's spending on defense. Can we do anything
Speaker 4: about this suboptimal spending? Are we addressing this problem?
Speaker 2: Well, of course you're right. The diagnosis at this moment
Speaker 2: is that we have been negligent, not only my own country,
Speaker 2: not only Germany, but Europe in general has been negligent
Speaker 2: in terms of defense expenditure. But the only reason over
Speaker 2: the last twenty five or so years to continue to
Speaker 2: have an army was to think about emergencies elsewhere, whether
Speaker 2: it was Afghanistan or outside of the European Union cause
Speaker 2: of all in Southeastern Europe, or African emergencies. The idea
Speaker 2: that we would need to go back to defend our
Speaker 2: own territories is a realization that has come upon us
Speaker 2: rather recently. We need to do a lot more to
Speaker 2: defend ourselves. We need to upgrade our defense expenditures. That's
Speaker 2: been a process that was started exactly ten years ago,
Speaker 2: in twenty fourteen, and it's been hard. It's been difficult.
Speaker 2: It continues to be difficult, especially in my own.
Speaker 4: This process of remembering and adjusting to the fact that
Speaker 4: there is a different world. Now, how far has it got?
Speaker 4: Are you moving away from rhetoric towards real decision making
Speaker 4: in terms of spending In.
Speaker 2: Upcoming elections in Germany, in Poland, in Hungary, in France,
Speaker 2: there will be major forces arguing that this war which
Speaker 2: Russia is currently conducting against Ukraine should be ended immediately,
Speaker 2: certainly by not delivering any more Western weapons to Ukraine,
Speaker 2: because there needs to be some kind of a cease
Speaker 2: fire and the peace of arrangement. There continue to be
Speaker 2: substantial elements of our political spectrum which are not in
Speaker 2: favor of continuing to spend more. It has been will
Speaker 2: continue to be an uphill battle.
Speaker 4: This is why leadership matters, and democracy. Leadership matters enormously.
Speaker 4: Leaders have to address changing problems. They have to see
Speaker 4: over the parapets, and they have to mobilize the people
Speaker 4: have we got the leadership in Europe, both in Germany
Speaker 4: and in the EU more broadly, to address this mounting
Speaker 4: problem of aggression from the anti democratic world.
Speaker 2: Let me dividing my answer into two parts. First, on Europe, look,
Speaker 2: with respect to the project of European integration, we're now
Speaker 2: confronted with a very fundamental question. The project of European
Speaker 2: integration was not about defending Europe against outside aggression. It
Speaker 2: was about integrating between Germany and France, making war among
Speaker 2: the members of the European Community or now the European
Speaker 2: Union impossible, and integrating that includes the so called internal market,
Speaker 2: which has still not been completely achieved. But it is
Speaker 2: essentially a project that has absolutely nothing to do with
Speaker 2: the military, with defense, et cetera. It was Emmanuel macam
Speaker 2: who came up a couple of years ago with this notion,
Speaker 2: we need to create a Europe which can defend itself. Now,
Speaker 2: that is an entirely different Europe than the Europe which integrates.
Speaker 2: And the problem is that we can talk about it,
Speaker 2: and we can even define what would need to be
Speaker 2: done in order to create a Europe that can defend itself.
Speaker 2: But I have to tell you it's a long road.
Speaker 2: It is a totally different project. It requires different methods,
Speaker 2: different approaches, and we certainly cannot defend ourselves as a
Speaker 2: European Union if we continue to base our decisions in
Speaker 2: Brussels on consensus or on unanimity rather than on majority rule.
Speaker 4: You're suggesting something absolutely fundamental here, that Youurope is a
Speaker 4: solution to yesterday's problems and a deliberate evasion of today's problems.
Speaker 2: Absolutely, that's what I'm trying to suggest to you. I
Speaker 2: think that it is. I think Emanuel Macon has a point,
Speaker 2: and I think we should give serious thought to what
Speaker 2: would it require to build a Europe that can actually
Speaker 2: defend itself. Currently we can't.
Speaker 4: But that almost suggests we have to redesign Europe again
Speaker 4: for a different set of problems, which is a huge challenge.
Speaker 4: What could be done to start off this great reconceptualization
Speaker 4: of the European project.
Speaker 2: Well, at the moment, the Project of European Integration we
Speaker 2: have twenty seven members. We are waiting for the countries
Speaker 2: of the Western Balkans, for Ukraine and a few other
Speaker 2: candidates to join over the next few or not so
Speaker 2: a few years, and that project needs to be continued.
Speaker 2: That's the integration project. But we need to build a
Speaker 2: second category of the European Union, which is, in the
Speaker 2: words of Macon, the defense Europe. And that requires different methods,
Speaker 2: different capabilities, et cetera, etc. And we have not even
Speaker 2: seriously started to build this. In my view, it is
Speaker 2: practically impossible to believe if one it's realistic, that we
Speaker 2: could convince all twenty seven members of the existing European
Speaker 2: Union to join into such a defense oriented European Union,
Speaker 2: a second project in addition to the integration Europe. And
Speaker 2: if my impression is correct, then of course the next
Speaker 2: question is should we try to start to build such
Speaker 2: a defense focused Europe with a smaller group of core countries.
Speaker 2: This is an idea which was developed almost thirty years
Speaker 2: ago by Wolfgang Shoybel, one of the leading German political
Speaker 2: leaders for the last number of decades, the theory of
Speaker 2: an inner circle of EU member countries. Just imagine what
Speaker 2: it might look like if Poland, Germany, France, maybe Italy,
Speaker 2: the Benelux countries, maybe Spain maybe plus the Baltic countries
Speaker 2: would get their act together and would say we are
Speaker 2: now creating a kind of additional layer in the European
Speaker 2: Union with different methods of decision making, and we will
Speaker 2: focus on our defense capabilities. We will do a lot
Speaker 2: of pooling and sharing. We will buy our military equipment together,
Speaker 2: not separately. We can save a lot of money by
Speaker 2: doing that. We will train our military people together, not separately.
Speaker 4: What role would the UK plan this grand scheme of
Speaker 4: reinventing Europe.
Speaker 2: I think that would be the one opportunity that I
Speaker 2: can see, if I interpret my English friends correctly, where
Speaker 2: actually our British friends might see advantage in joining, either
Speaker 2: directly or indirectly as an associate partner such a European
Speaker 2: defense project. We are already, of course linked together with
Speaker 2: the UK through NATO, But the idea of developing a
Speaker 2: European structure that would allow us to do what Donald
Speaker 2: Trump and others have been asking for now for many years,
Speaker 2: namely that we should carry a larger part of the
Speaker 2: common defense burden. I think that would be a credible answer,
Speaker 2: and Britain could be a key player in that, as
Speaker 2: being a nuclear power, being a permanent member of the
Speaker 2: UN Security Council along with France, etc. That would be
Speaker 2: an entirely different than the current one that we have
Speaker 2: in the integration Europe.
Speaker 4: I find all these ideas extremely exciting and sympathetic, but
Speaker 4: I wanted to bring in the question of the voters.
Speaker 4: Whenever i'm we eat security people or military people or
Speaker 4: policy people, they're all very concerned about the new Cold War,
Speaker 4: about Putin, about China and the rest of it. Voters
Speaker 4: don't seem to be on board with this. They don't
Speaker 4: seem to be nervous about what's going on. They seem
Speaker 4: to think of it as a distant problem. They're more
Speaker 4: concerned about bread and butter questions rather than war and
Speaker 4: peace questions. What can the leaders of Europe or the
Speaker 4: people who are involved in security issues due to persuade
Speaker 4: people that this is a real threat or set of
Speaker 4: threats that we're facing that we haven't faced for a
Speaker 4: long time.
Speaker 2: Let me try to give an answer to this question
Speaker 2: by focusing on particularly on my own country of Germany,
Speaker 2: which of course I know better than most of the
Speaker 2: neighboring countries. If you take a good look at German
Speaker 2: foreign security and defense policy and the evolution of that,
Speaker 2: you will find that there is no country in the
Speaker 2: West that has concluded as dramatic a change of fundamental
Speaker 2: principles of their foreign policy, security policy, and defense policy.
Speaker 2: I'll give you an example. Have been an active member
Speaker 2: of the German diplomatic service for forty five years or more,
Speaker 2: and we used to treat it as a sacred dogma
Speaker 2: that Germany would never ever deliver weapons, lethal weapons into
Speaker 2: an area of conflict or war. That was considered to
Speaker 2: be in the aftermath of World War Two, a moral
Speaker 2: principle appropriate for the country that had started not only
Speaker 2: World War Two, but the Holocaust, etc. Now, when you
Speaker 2: look at what's going on right now, this country that
Speaker 2: until two years ago had promised never to deliver a
Speaker 2: weapon into an air of conflict is now the number
Speaker 2: one provider of little weapons to Ukraine, far ahead of France,
Speaker 2: even ahead of the United Kingdom, only second only to
Speaker 2: the United States. We've completed a one hundred and eighty
Speaker 2: degree turn, at least with respect to this principle of
Speaker 2: arms deliveries.
Speaker 4: Arms expert, How does that align with public opinion?
Speaker 2: Though I think it is. You will find in polling data,
Speaker 2: you will find that German enthusiasm for spending more money
Speaker 2: on military support for Ukraine, for financial support for Ukraine
Speaker 2: is still significant. It has gone down a bit, which
Speaker 2: is normal. The democratic support, voter support will tend to
Speaker 2: go down if no discernible victory is at hand. And
Speaker 2: there's more. In Ukraine has now been going on for
Speaker 2: two years, and obviously people have now been focusing more
Speaker 2: on Gaza, and on Israel, and on on other catastrophic
Speaker 2: events around the world. But in principle, I think Germany
Speaker 2: is still on course, and I would expect our Ukrainian
Speaker 2: friends to know and to be certain that Germany will
Speaker 2: continue to deliver what we have promised, including in additional
Speaker 2: arms deliveries and other support. But it now comes to
Speaker 2: big butt. The voter support is affected by really extremely
Speaker 2: effective Russian propaganda. I have actually never ever, in the
Speaker 2: fifty years that I've been in this business, I've never
Speaker 2: experienced anything quite like it. And I do a lot
Speaker 2: of public speaking these days, several times a week. I'm
Speaker 2: here in Hamburg, I'm in Munich and elsewhere, and wherever
Speaker 2: I speak, surely somebody will get up in the question
Speaker 2: answer period and we'll say, but the Russians have a point,
Speaker 2: don't they. We have encircled them, NATO has encircled them,
Speaker 2: and they're only defending their own right and America would
Speaker 2: never allow the Soviet Union to be based in Mexico. Right.
Speaker 2: These types of Russian arguments have been extremely effective in
Speaker 2: my country, but also in some of the neighboring countries.
Speaker 2: In other words, this effort to maintain voter support needs
Speaker 2: to be continued with. And you mentioned the word this
Speaker 2: requires leadership. It really requires leadership. Sometimes I think that
Speaker 2: our own chancellor has not shown enough ability to explain
Speaker 2: to the voters at large why we're doing this. The
Speaker 2: real important point which should be made to every single
Speaker 2: voter in you U is the Ukrainians deserve our support,
Speaker 2: not because they defend their own country vigorously, but because
Speaker 2: the defend the freedom of all of Europe absolutely.
Speaker 4: I wanted to ask you more generally about the relationship
Speaker 4: between the United States and Europe, particularly about the possibility
Speaker 4: of Trump winning the next election. What does that mean
Speaker 4: for Europe's defense, Because there's one thing that Trump hates
Speaker 4: above all others. That's the notion of being taken for
Speaker 4: a ride, being made a fool of, and he believes
Speaker 4: that's the case with Europe and the United States over
Speaker 4: many decades. Now, what do we do to keep the
Speaker 4: alliance strong and vigorous. If Trump wins the election.
Speaker 2: Again, I would offer a cad of a differentiated answer
Speaker 2: to this question. First, not everything that Donald Trump decided
Speaker 2: to do or decided not to do during his tenure
Speaker 2: as president was terribly wrong. As I recall the first
Speaker 2: US president who decided to deliver weapons to Ukraine. That
Speaker 2: wasn't Obama. It happened on Donald Trump's watch. He criticized
Speaker 2: Germany and the European allies correctly for not fulfilling their
Speaker 2: own promise of coming up with two percent of GDP
Speaker 2: on defense. He had a point, a very important point.
Speaker 2: I think we're now doing better this summer. There will
Speaker 2: be before the US elections, will be a NATO summit
Speaker 2: in July, I guess, or end of June in Washington, DC,
Speaker 2: and I think that NATO will be able to announce
Speaker 2: that a significant majority of NATO countries are now meeting
Speaker 2: the two percent goal, which will take away one but
Speaker 2: quite obviously we need to do much more than that
Speaker 2: the two percent which we decided to use as a
Speaker 2: measure in twenty fourteen. I think today, given the fact
Speaker 2: that there is now a full scale more started by Russia,
Speaker 2: two years ago. We need to consider the two percent
Speaker 2: goal as the minimum. We should actually aim for three percent,
Speaker 2: if you want my opinion. Presenting that to a public
Speaker 2: which believes that is very important that we do more
Speaker 2: about broken infrastructure, rebuilding schools, better hospitals, higher social welfare expenditures, etc.
Speaker 2: Is tough, but it is necessary. Europe could have a
Speaker 2: year ago decided to give priority in the business environment
Speaker 2: of all of Europe to the production of ammunition, arms productions, etc. Etc.
Speaker 2: That would have required a rather fundamental priority setting decision
Speaker 2: by the entire European Union. Didn't happen. Unfortunately, we lost
Speaker 2: a year. We're now doing a little bit of that
Speaker 2: here and there. But may I remind you the EU
Speaker 2: promised Grandiosli many months ago that we would deliver one
Speaker 2: million pieces of artillery ammunition to Ukraine by the spring
Speaker 2: of this year. It's not happening. We're delivering less than
Speaker 2: half of that. In other words, the European Union has
Speaker 2: unfortunately presented itself as a paper tiger in this battle,
Speaker 2: where when you look at the hard facts, of course,
Speaker 2: the GDP of Russia, of the entire Russian Federation, is
Speaker 2: about the size of the GDP of Spain, and if
Speaker 2: you take the entire European Union plus the United States
Speaker 2: plus the UK plus Canada, you can come up with
Speaker 2: a number that said, as our economic power, our production
Speaker 2: capacity is twenty five times that of Russia. So why
Speaker 2: are we not using that more? And that requires leadership decisions,
Speaker 2: of course, which are not necessarily only military decisions. These
Speaker 2: are decisions that require fundamental economic, financial and strategy decisions,
Speaker 2: which unfortunately we have not been capable of taking so far.
Speaker 2: So I continue to believe this is an uphill battle.
Speaker 2: Our publics in Europe have, at least some of them,
Speaker 2: have not yet fully understood that we have a more
Speaker 2: in Europe, that this is not the continuation of the
Speaker 2: last thirty years of peace throughout the continent, that we're
Speaker 2: in a different era that requires different answers, and this
Speaker 2: is why this continues to be a really hard, uphill battle.
Speaker 4: I just wanted to ask you about one other aspect
Speaker 4: of public disillusionments with the elites of Europe, and that
Speaker 4: is migration, particularly illegal migration. How much of a threat
Speaker 4: to democratic security is this, both in terms of a
Speaker 4: perception that we don't have secure control of our borders,
Speaker 4: but also a sense of disillusionments amongst lots of voters
Speaker 4: that the system is working for them, that they're not
Speaker 4: in control of their lives.
Speaker 2: I worry about that. A lot the decision makers throughout
Speaker 2: the European Union have tended to underestimate the frustration within
Speaker 2: the voter base with illegal migration. I share the view
Speaker 2: of many who believe that we should keep our doors
Speaker 2: open to people who flee the horrors of Sudan or
Speaker 2: Afghanistan or Iraq, et cetera, et cetera. But then again,
Speaker 2: we can't possibly take them all. We do need better
Speaker 2: control of our borders. Sure that the current British effort
Speaker 2: at the Ruanda effort is the best answer, but at
Speaker 2: least the British government is making an effort to find
Speaker 2: a solution. I think we need to look for these
Speaker 2: types of solutions. Hopefully ways can be found to avoid
Speaker 2: too much hardship for people who've already made to Europe
Speaker 2: and whom we wish to go back to their home country,
Speaker 2: whether it's Africa or the Middle East.
Speaker 4: Worldspheare because the great fear is that if mainstream democratic
Speaker 4: politicians can't address this problem, then countries will turn to
Speaker 4: authoritarian populaces to solve this problem.
Speaker 2: The IFDA has benefited over the last number of years
Speaker 2: from a number of different issues. There was a concern
Speaker 2: about the euro initially a decade ago during the financial crisis. Today,
Speaker 2: the main driver for the success of the right of
Speaker 2: the far right in Germany is migration, quite obviously, and
Speaker 2: we have not yet found the border control mechanisms that
Speaker 2: would allow us to bring these voters back to mainstream parties.
Speaker 2: I'm afraid that in local elections this year we will
Speaker 2: see a very unwelcome result of significant increases of right
Speaker 2: wing parties, especially the IFD, primarily because of the migration issue.
Speaker 4: Terrible to end on that very pessimistic note, but thank
Speaker 4: you very much for your interview.
Speaker 2: Thank you very much.
Speaker 1: It is quite moving to hear somebody who, as he says,
Speaker 1: spent forty five years in German foreign service, talking about
Speaker 1: going from representing a country that was pacifist and wouldn't
Speaker 1: ever contemplate in an article of faith that they would
Speaker 1: not send arms abroad, and now, in his words, it's
Speaker 1: one hundred and eighty degrees different, and now Germany is
Speaker 1: the second largest supplier of arms to the Ukraine after America.
Speaker 1: To hear him talk about how extraordinary that changes was powerful.
Speaker 4: Yes, I thought it was very powerful, and it's an
Speaker 4: interesting story of in Germany resistance and doubts, but then
Speaker 4: really coming to terms with the fact that the world
Speaker 4: has changed in very profound ways, not just in terms
Speaker 4: of a willingness to spend money on defense, which for
Speaker 4: obvious historical reasons they've been very reluctant to do, but
Speaker 4: also a willingness to reconceptualize what the EU is about.
Speaker 4: Germany's has invested such extraordinary emotional and intellectual capital in
Speaker 4: building the European Union. This peace project was so central
Speaker 4: to their sense of identity. But now this is a
Speaker 4: man who's been at the heart of this process saying
Speaker 4: we have to rethink it. I think that's extraordinary.
Speaker 3: Do you actually think that is where other leaders in
Speaker 3: Europe are? I was struck by the fact that he thought,
Speaker 3: basically there was no way you could move ahead in
Speaker 3: that sort of defense direction with all the current members
Speaker 3: that alone, all the other ones that are coming down
Speaker 3: the track quite soon. Obviously we hear from President Macron,
Speaker 3: but are there going to be enough like minded countries
Speaker 3: who are able to move fast enough.
Speaker 4: To do that I think obviously Macrons and certain people
Speaker 4: in France are really thinking very hard. I think you
Speaker 4: did have a big problem that you have a professional
Speaker 4: bureaucratic class in the European Union, which is very conservative.
Speaker 4: For these are people who trained to keep running the
Speaker 4: machinery as it's always been running. But I do get
Speaker 4: the sense that in the capitals that matter, I Germany,
Speaker 4: in France, there is some serious rethinking that. There is
Speaker 4: a lot of rethinking in Sweden and the Nordic States.
Speaker 4: And you have to remember that these Nordic states now
Speaker 4: they was join NATO. It's thinking very much about defense
Speaker 4: and the great tragedy here, one of the many great
Speaker 4: tragedists to do with Brexit is Britain would have been
Speaker 4: absolutely vital central to such a reconceptualization of what Europe
Speaker 4: was about, and with our traditions of defense and our
Speaker 4: traditions of having a global view.
Speaker 1: But in this new European defense arrangement there would be
Speaker 1: a role for.
Speaker 4: The UK, absolutely, but we'd be coming in from outside.
Speaker 4: It's very different from being a sort of inside player
Speaker 4: helping to design the system. Not only did we make
Speaker 4: a mistake, we left it exactly the wrong moment.
Speaker 3: You and I have discussed this, but it made me
Speaker 3: think a bit about really what I thought rather excellent
Speaker 3: piece that the historian Timothy Gartinash has written in the
Speaker 3: New or Review Books recently, and I recommend lots of
Speaker 3: people to read it. He describes He says, well, the
Speaker 3: end of history, the sort of Fukiyama idea was an
Speaker 3: American idea, but it was the Germans who lived the
Speaker 3: neo Hegalian dream more than anybody else. Germany, Europe and
Speaker 3: the West altogether. It was based on the idea that
Speaker 3: they all had a model which everyone else would converge on,
Speaker 3: and globalization would go with democratization and all these things
Speaker 3: we've talked about in the past. It was the basis
Speaker 3: for having China come into the World Trade Organization. That
Speaker 3: sort of democracy and capitalism would support each other and
Speaker 3: you would have this global economy where lots of countries
Speaker 3: were moving in the right direction. Germany had more vested
Speaker 3: in that model than even the US did.
Speaker 4: Oh Actually, globalization dream was soonified by Germany because Germany
Speaker 4: had this idea that they could trade with China, they
Speaker 4: could provide all the machine tools for China that they
Speaker 4: could expand Eastwoods, that they could set up factories in
Speaker 4: Russia where whenever you went to conferences in Russia in
Speaker 4: the early part of this century, the Germans were massive presence.
Speaker 4: Not only did they reach the end of history, but
Speaker 4: there are free riders on the end of history because
Speaker 4: America paid for their defense, so they could live in
Speaker 4: this wonderful sort of pacifist country, trading with the whole world.
Speaker 4: And yes it was the Hegelian.
Speaker 3: Navana, but is that's why you get this sense that
Speaker 3: there's a sort of deep angst that comes from and
Speaker 3: a sort of deer in the headlights that across society.
Speaker 3: We heard earlier from Mikhail talking about the coalition sort
Speaker 3: of quite unusual to have so many of these three
Speaker 3: big parties in the coalition, and that there's a sort
Speaker 3: of stalemate that comes from that. But it's actually a
Speaker 3: sort of national stalemate because so much was vested in that,
Speaker 3: and it just the idea of really fundamentally moving away
Speaker 3: from that post war model. It's absolutely very challenged.
Speaker 4: That they had this position of not just the end
Speaker 4: of history, but a sort of holiday from history. They
Speaker 4: had twenty or thirty years of everything being really good
Speaker 4: for them. They could just be rich and peaceful. And
Speaker 4: now you see them asking a series of very profound questions. Now,
Speaker 4: when Germans asked profound questions, some very good things happen,
Speaker 4: as such as they rethink things from the very pot
Speaker 4: they come up, some very bad things happen, and.
Speaker 1: They come up with delicious new compound words, and.
Speaker 4: Perhaps they even produce a new Hegel. But Hagel said,
Speaker 4: the owl of Minerva flies only at dusk, this terrible
Speaker 4: idea that perhaps the Germans rethinking.
Speaker 3: And the way to read that, the way that we're
Speaker 3: supposed to read that the alum nervous wisdom. So you
Speaker 3: only find out what everything's about right at the air right.
Speaker 4: But on the other hand, the dark side of this
Speaker 4: is that you do have the a FD rising. You
Speaker 4: have certain things that have been banned for a very
Speaker 4: long time, unthinkable for a very long time, and now
Speaker 4: thinkable again. And that is, you know, that is worrying.
Speaker 1: I did think it was interesting that he said, I'm
Speaker 1: just going to quote him. I'm not saying the current
Speaker 1: British effort Rwanda is that answer, but at least it
Speaker 1: is making an effort. And his point was that Germany,
Speaker 1: when you did the interview but I thought it was
Speaker 1: interesting he was saying, as indeed is the opposition leader
Speaker 1: in Germany, that some kind of Rwanda star scheme may
Speaker 1: be needed.
Speaker 4: Absolutely, I'm not sure about a Rwanda Stace scheme, but
Speaker 4: you do have a sense right around the sort of
Speaker 4: respectable circles in Europe that people are saying, we don't
Speaker 4: like this scheme in Britain looks perhaps a bit foolish,
Speaker 4: but we can't just go on criticizing public discontent with
Speaker 4: the level of immigration. Public worries about the number of
Speaker 4: refugees or legal immigrants coming across the seas or coming
Speaker 4: into their countries in different ways is something that needs
Speaker 4: to be dealt with, because if we don't deal with it,
Speaker 4: then the AfD really will take off even more than
Speaker 4: it has well.
Speaker 3: And I was in Zurich this week. While I was
Speaker 3: in Switzerland, which has obviously been still doing pretty well,
Speaker 3: and it's got very low inflation. It's even dodged that
Speaker 3: bullet over the last few years, very rich, prosperous economy
Speaker 3: by any definition they want. They've now reached a critical
Speaker 3: number of signatures for a petition to have a plebasit
Speaker 3: for capping the population at ten million, it's now at nine.
Speaker 3: I don't know that, and in fact that employers they
Speaker 3: have enormous labor shortages. They really struggled to be the opposite.
Speaker 3: But there is a lot of momentum behind this proposal
Speaker 3: to have a cap population, which actually, if you think
Speaker 3: about it, is slightly odd because if you don't want
Speaker 3: lots of foreigners and you've got a shrinking population, that
Speaker 3: would mean that you're allowing for all of the growth
Speaker 3: to be through immigration. But it was very struck because
Speaker 3: I didn't I hadn't actually hadn't crossed my radar. And
Speaker 3: that's even in Switzerland, which is doing well by any measure,
Speaker 3: they want to limit numbers. I think that suggests we
Speaker 3: need to do just Swiss photonomics could be a stretch.
Speaker 3: I think that people who've managed to get to the
Speaker 3: end of the German vhotonomics may.
Speaker 1: Think, Okay, thanks for listening to this week's photonomics from Bloomberg.
Speaker 1: This episode was hosted by me alegra Stratton, Adrian Waldridge,
Speaker 1: and Stephanie Flanders. It was produced by Somersadi, with hell
Speaker 1: from Chris Martlou and Julia Mann's editorial direction from Victoria Wakeley.
Speaker 1: Sound designed by Moses and Dam with assistants from Blake Maples.
Speaker 1: Brendan Francis Newnham is our executive producer. Stage Bauman is
Speaker 1: Head of Podcasts. Special thanks to Wolfgang Ischinger and Michael
Speaker 1: Nina Bauer. Please subscribe, rate, and review wherever you listen
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