Category Archives: Europe

Stratfor: Italy After the Referendum. What comes next?

Summary:  Brexit and Trump’s election were followed by hysterical predictions of doom by experts, helping journalists manufacture exciting news for their apathetic audiences. Italy’s citizens defied their centrist technocratic leaders, producing yet another round of ominous forecasts. For those who like their news straight and sober, here is an analysis of Italy’s situation by Stratfor.

Stratfor

Italy After the Referendum
Stratfor, 6 December 2016.

Introduction

Italy’s voters have spoken loud and clear. During Sunday’s referendum on constitutional reforms, more than 65% of the country’s electorate turned out. Nearly 60% of voters rejected the measures, prompting Prime Minister Matteo Renzi to resign immediately after the results were announced, as promised. Renzi’s quick resignation, coupled with the international market’s staid response to the vote’s outcome, suggests that the immediate repercussions will not be as dramatic as some in Italy and abroad had expected. Nevertheless, Italy’s political and financial troubles will endure, as will its threat to the eurozone.

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Stratfor: China’s Economy is Living on Borrowed Time

Summary: Ripples of Trump’s win rock the boats of

Stratfor

China’s Economy: Living on Borrowed Time
Stratfor, 21 November 2016.

Forecast

  • Barring a decision to loosen government controls on credit, investment and home purchases, China’s housing and construction sectors will slow in 2017.
  • Industries that hold the bulk of China’s outstanding corporate debt, including commodities, building materials and other sectors related to construction, will bear the brunt of a sustained housing slump.
  • Sluggish construction growth and skyrocketing debt, coupled with sharp reductions in debt maturity periods, could cause corporate defaults and bankruptcies to spike next year, testing Beijing’s legal and institutional abilities to cope with them.
  • Meanwhile, increasing U.S. protectionism and other international developments could put even more pressure on the Chinese economy, forcing Beijing to trade its economic reforms for greater spending to keep the economy afloat.

Analysis

Next year is shaping up to be a decisive one for China’s economy. In the eight years since the global financial crisis struck, the vitality and importance of low-cost exports — the kind the Chinese economy used to rely on — have steadily declined. Scrambling to prop up the country’s growth and protect its near-universal employment, China’s leaders have embraced monetary and fiscal stimulus measures, causing the country’s outstanding debt to balloon to almost 250% of gross domestic product. Corporate debt, by far the largest share of China’s total debt, has likewise surged by more than 60% to top 165% of GDP. Now, a nationwide debt crisis looms at Beijing’s doorstep amid business defaults and bankruptcies, low industrial profits, winnowing returns on investment and the very real prospect of yet another slowdown in the real estate sector. How well Beijing manages these problems in the months ahead will, to a great extent, determine China’s economic, social and political stability for years to come.

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Stratfor Explains How Trump’s Victory Galvanizes Kindred Spirits in Europe

Summary: Ripples of Trump’s win rock the boats of politicians around the world. Europe’s politics were already unsettled, with the far-right profiting from the mainstream parties’ obsession – flooding Europe with immigrants, despite their people’s objections.

Stratfor

How Trump’s Victory Will Galvanize Kindred Spirits in Europe
Stratfor, 13 November 2016.

Donald Trump’s victory in the U.S. presidential election was cause for celebration among Europe’s largest anti-establishment political forces. Party leaders from France’s National Front, Italy’s Five Star Movement and the Netherlands’ Party of Freedom offered congratulations to the president-elect, thrilled by his demonstration that the political and media establishment can be thwarted. Like Trump, they hope to ride the wave of anti-establishment fervor building on both sides of the Atlantic to power in 2017, when some of the European Union’s biggest economies will hold national elections.

To a great extent, Trump’s victory and the success of the United Kingdom’s referendum to leave the European Union are the result of the same trend. Emerging political forces in the United States and Europe blame globalization for the loss of jobs and present immigration as a threat to national identity and security. Their message resonates with people who do not see a benefit in free trade or flexible migration and who feel as if traditional parties do not understand their plight. Mainstream media outlets and opinion polls largely underestimated that segment of the electorate in the runup to both the U.S. election and the Brexit referendum. That they failed to foresee Trump’s victory or that of the “leave” camp demonstrates the extent to which these emerging social and political trends have been minimized, disregarded or misunderstood.

The same political upheaval could manifest again over the course of Europe’s busy 2017 electoral season. In March, the Netherlands — a prominent economic and political power in Northern Europe — will hold general elections. (Italy could join them if constitutional reforms fail in a December referendum, triggering early elections.) France, which boasts the Continent’s second-largest economy, will hold presidential votes in April and May, followed by legislative elections in June. Toward the end of the year, the European Union’s greatest political and economic force, Germany, will hold general elections in October.

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Stratfor: the EU faces painful budget battles after Brexit

Summary: Europe’s elites warned that Britain would suffer for daring to leave the EU. Suffer severely and soon. Four months have passed since the June 23 vote and Britain has felt no ill effects. Britain might have the last laugh, since the EU has to redo its budget following the loss of its second largest contributor. The EU is already under stress. Cutting the budget and raising taxes will make it worse. Perhaps sparking more exits.

Stratfor

A Bitter Budget Battle Looms in the EU
Stratfor, 13 October 2016.

Forecast

  • Because of the Brexit, the European Union will lose a net contributor to its budget, forcing the remaining members to rethink the bloc’s spending limits and priorities.
  • EU members will have three options for dealing with the loss of the United Kingdom’s income: increase national contributions, trim the budget or look for new revenue sources. Each choice carries political risks.
  • Budget-related issues will create new sources of friction in the European Union as national interests shape the negotiations.

Analysis

When Britain leaves the European Union, it will take with it the sizable financial contributions it makes to the bloc’s budget. That will leave remaining member states with some difficult choices to make about how big future budgets should be, what they should pay for and how much members should pony up for them. In all likelihood, key policies — from agricultural subsidies to development funds — will have to be redesigned. And as members decide how to proceed, new sources of conflict will arise that will do little to help reverse the bloc’s political fragmentation.

The EU budget is organized around the Multiannual Financial Framework, which establishes spending priorities and limits for a seven-year period. (The current one lasts through 2020.) Every year, the European Commission, the European Parliament and EU member states negotiate annual budgets based on the spending limits and priorities established by this framework.

About 75% of the EU budget comes from payments made by member states, calculated based on their gross national incomes. This means that, in absolute numbers, the largest economies make the largest contributions. But not all member states contribute the same proportion of that income, which leads to imbalances in contributions per capita. Moreover, since the budget is used to finance most EU programs, many countries give more money to the bloc than they get from it. In 2015, for example, 10 of the bloc’s 28 members were net contributors to the budget. The others received more in program spending than they paid in.

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“PARIS 2016: Scenes from the Apocalypse”

Summary: The effects of mass immigration are undernews, ignored by the mainstream media. This looks at the streets of the Paris that tourists seldom visit, home to generations of immigrants. Here they live, many in poverty, some without hope, most alienated from French society (famous for its inability to assimilate foreigners, as the Jews learned).

 

“PARIS 2016: Scenes from the Apocalypse –
Mass Immigration ruins streets of France.”
Source: unknown.

“The Paris you know or remember from adverts or brochures no longer exists. While no part of Paris looks like the romantic Cliches in Hollywood movies, some districts now resemble post-apocalyptic scenes of a dystopian thriller. This footage, taken with a hidden camera by an anonymous Frenchman in the Avenue de Flandres, 19th Arrondissement, near the Stalingrad Metro Station in Paris as well as areas in close proximity, shows the devastating effects of uncontrolled illegal mass immigration of young African males into Europe.

“If it weren’t for the somewhat working infrastructure, the scene might as well have been the setting of movie shooting – or a slum in Mogadishu. The streets are littered in garbage, the sidewalks are blocked with trash, junk and mattresses, thousands of African men claim the streets as their own – they sleep and live in tents like homeless people.

“If no portable toilets are in reach, open urination and defecation are commonplace. Tens of thousands of homeless Illegal immigrants, undocumented or waiting for a decision of their asylum application, waste away trying to pass the time in the city. Although their prospects of being granted asylum as Africans are bleak, they’re hoping for a decision that would grant them an apartment, welfare and make France their new home.

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Stratfor: European unification – they’ll live unhappily ever after

Summary: Here’s an essay about the European Union from one of Stratfor’s more perceptive analysts. It provides a unusual and insightful perspective on Europe’s long quest for unification, and the bumps along the way.

Stratfor

Europe, Unhappily Ever After
By Reva Goujon.
Stratfor, 20 September 2016.

The scene at Bratislava Castle last week was a familiar one: European leaders gathered for another summit in a typically idyllic setting, where the natural beauty of their surroundings belied the deep imperfections of the union they were struggling to salvage. But now, in the wake of Britain’s vote to leave the Continental bloc, delusion steeped in the ideals of an “ever-closer” union is wearing thin, and the realists in the room seem to be gradually gaining ground.

The shift in the summit’s tone was to be expected; closet Euroskeptics can no longer hide behind the United Kingdom as they assert national rights and tamp down Brussels’ principles. They realize that the longer Europe’s leaders avoid the hard questions, opting instead to continue extolling the “spirit” of the European Union as a way to survive, the more the bloc’s guardians will have to react to — rather than shape — the enormous changes bubbling up from their disillusioned electorates.

As Italian Prime Minister Matteo Renzi (who has tied his own political fate to a referendum in October) testily noted, the Bratislava gathering amounted to little more than a “boat trip on the Danube” and an “afternoon writing documents without any soul or any horizon” on the real problems afflicting Europe.

Tempering Ideals With Realities

The same frustration was palpable in several conversations I had during a recent trip to Slovenia, a country that tends to stay below the radar in Europe but is nevertheless highly perceptive of ground tremors. Slovenia lies, often precariously, at the edge of empires. Under the weight of the Alps, the former Yugoslav republic has one foot lodged in the tumultuous cauldron of the Balkans while its other foot toes the merchant riches of the Adriatic Sea. All the while, its arms are outstretched across the Pannonian Plain toward Vienna, the seat of the Austro-Hungarian Empire.

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Stratfor: Is the West Being Overrun by Migrants?

Summary: People often compare today’s waves of immigration with those that played a large role in the destruction of the Roman Empire. Here Stanford Professor Ian Morris describes, the similarities, the differences, and the lessons this history holds for us. Morris focuses on the danger of migrants as organized military forces; he gives little attention to their disruptive domestic effects. For another perspective see America isn’t falling like the Roman Empire. It’s falling like Rome’s Republic.

Stratfor

Is the West Being Overrun by Migrants?
By Ian Morris at Stratfor on 7 September 2016.

Are the barbarians at the gates? Marine Le Pen, the leader of France’s far-right National Front party, has no doubt that they are. “Without any action,” she told a rally at Amiens last year, “the migratory influx will be like the barbarian invasion of the fourth century, and the consequences will be the same.” That would be bad. According to St. Orientus of Auch, who lived through the original event, “Throughout villages and farms, throughout the countryside and crossroads, and through all districts, on all highways leading from this place or that, there was death, sorrow, ruin, fires, mourning.”

The Parisian political establishment turned up its collective nose at Le Pen’s analogy (being France, the newspapers concentrated on correcting her chronology: The invasions came mostly in the fifth century, not the fourth). And despite all his talk of building a wall to keep invaders out, Donald Trump has so far resisted likening himself to Emperor Hadrian. Not since Pat Buchanan, in fact, has an American presidential hopeful called Mexicans barbarians.

The internet, however, is full of comparisons between the end of ancient Rome and current events in the United States and European Union, and I find that when I give public lectures I regularly get asked how much the two periods have in common and how much we should worry about it. (Being both an immigrant and an ancient historian, I probably get this more than most people.)

The answer to both questions seems to be “not much.” But that said, they remain worth asking, because the details behind the answer are rather revealing. Just what was it about the Germanic migrations into the Roman Empire that made them so different from the contemporary Arab migration into Europe and Mexican migration into the United States?

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