Global warming--why our diet is getting hotter

Chilies

Dec 18th 2008
From The Economist print edition


Why the world has taken to chilies

TASTELESS, colourless, odourless and painful, pure capsaicin is a curious substance. It does no lasting damage, but the body’s natural response to even a modest dose (such as that found in a chili pepper) is self-defence: sweat pours, the pulse quickens, the tongue flinches, tears may roll. But then something else kicks in: pain relief. The bloodstream floods with endorphins—the closest thing to morphine that the body produces. The result is a high. And the more capsaicin you ingest, the bigger and better it gets.

Which is why the diet in the rich world is heating up. Hot chilies, once the preserve of aficionados with exotic tastes for cuisine from places such as India, Thailand or Mexico, are now a staple ingredient in everything from ready meals to cocktails.

One reason is that globalisation has raised the rich world’s tolerance to capsaicin. What may seem unbearably hot to those reared on the bland diets of Europe or the Anglosphere half a century ago is just a pleasantly spicy dish to their children and grandchildren, whose student years were spent scoffing cheap curries or nacho chips with salsa. Recipes in the past used to call for a cautious pinch of cayenne pepper. For today’s guzzlers, even standard-strength Tabasco sauce, the world’s best-selling chili-based condiment, may be too mild. The Louisiana-based firm now produces an extra-hot version, based on habanero peppers, the fieriest of the commonly-consumed chilies.

But for the real “heat geeks”, even that is too tame.

Tesco, Britain’s biggest supermarket chain, recently added a new pepper to its vegetable shelves: the Dorset naga. Inhaling its vapour makes your nose tingle. Touching it is painful; cooks are advised to wear gloves. It is the only food product that Tesco will not sell to children. By the standards of other chilies, it is astronomically hot. On the commonly used Scoville scale (based on dilution in sugar syrup to the point that the capsaicin becomes no longer noticeable to the taster) it rates 1.6m units, close to the 2m score of pepper spray used in riot control. The pepper that previously counted as the world’s hottest, the Bhut Jolokia grown by the Chile Pepper Institute at the New Mexico State University, scored just over 1m. That in turn displaced a chili grown by the Indian Defence Research Laboratory in Tezpur, which scored a mere 855,000. The hottest habanero chilies score a wimpy 577,000.

The naga, originally from Bangladesh, was developed commercially by Michael Michaud, who runs a specialist online chili supply firm in south-western Britain. Having spotted it in an ethnic-food shop in the coastal town of Bournemouth, he bred a dependable and much hotter strain and had it tested. “I sent the powder to a couple of labs. They didn’t believe the reading. They thought they had made a mistake,” he recalls. Jonathan Corbett, the buyer who handles (cautiously) specialist chilies for Tesco says that the naga makes a standard hot curry “taste like a bowl of breakfast cereal”.

The naga has been a runaway success. In 2007, a Tesco outlet in Newcastle in northern England was supplied with 400 packs for a pilot period that was intended to last a month. The entire stock sold out on the first morning. According to AC Nielsen, a market-research firm, demand for hot chilies across all British retailers rose by 18% in the last year. At Tesco, the growth has been 29%. Demand for the naga has been so high that it has been forced to sell unripe green ones, intended for sale early next year. Tesco’s supplier is Britain’s biggest chili farmer, Filippo Salvatore. Based near Biggleswade, he is also a leading light in the Bedford Sicilian Association. He is hurrying to grow more.

Tesco is one of the world’s largest retailers, with outlets in both continental Europe and North America. But Mr Corbett says that his colleagues have no plans to stock the naga elsewhere, for example in the firm’s Fresh & Easy chain in America. “Tastes in the UK are hotter,” he says. That may be true, though the chili-eating milieu is certainly bigger in America, where the calendar is dotted with events such as the rumbustious Fiery Foods and Barbeque Show (in Albuquerque) and the more academic 19th International Pepper Conference (which took place in September in Atlantic City, concluding with a barbecue).
AP
AP

From pain comes pleasure

For connoisseurs though, the macho hullabaloo about ever-hotter chilies is distasteful, even vulgar: rather like rating wine only according to its alcohol content. Steve Waters, who runs the South Devon Chili Farm, says even the idea that the spectrum runs on a simple one-dimensional axis between “hot” and “mild” is misleading. He prefers the more complex Mexican matrix, which categorises chilies both by heat, and whether they are fresh, dried, pickled, or smoked. Any of these can produce big changes in flavour: he highlights the Aji (pronounced ah-hee), a Peruvian chili, which “ripens to bright yellow, with a strong lemony taste when fresh, very zesty. When dried it picks up a banana flavour.”

From this point of view, the most interesting trend is not in ever-higher doses of capsaicin for the maniac market, but in the presence of chili in a range of foodstuffs that previous generations would have regarded as preposterous candidates for hotting up. Chili-flavoured chocolate, for example, has gone from being a novelty item to a popular mainstream product. Mr Waters sells “hot apple chili jelly” as a condiment for meat, and chili-infused olive oil.


Adrenalin plus natural opiates form an unbeatable combination

The reason may be that capsaicin excites the trigeminal nerve, increasing the body’s receptiveness to the flavour of other foods. That is not just good news for gourmets. It is a useful feature in poor countries where the diet might otherwise be unbearably bland and stodgy. In a study in 1992 by the CSIRO’s Sensory Research Centre, scientists looked at the effect of capsaicin on the response to solutions containing either sugar or salt. The sample was 35 people who all ate spicy food regularly but not exclusively. Even a small quantity of capsaicin increased the perceived intensity of the solutions ingested. Among other things, that may give a scientific explanation for the habit, not formally researched, of snorting the “pink fix” (a mixture of cocaine and chili powder).

A chili-eating habit may develop to a startling degree (your author guzzled a packet of nagas while writing this article, and puts Tabasco in his coffee). But indulging in capsaicin does not quite meet the formal medical definitions of addiction. It is at most a craving, not a physical necessity. It does not cause loss of control when taken to excess, or illness in those deprived of it: heavy users may develop remarkable degrees of tolerance, but they do not require regular doses simply in order to feel normal. The preference does not wear off: ex-smokers, by contrast, may gag at the taste of a cigarette. And the effect on the brain is different: with nicotine, the more you smoke, the more you want.

Indeed, capsaicin has useful medical effects. By disabling a part of the nervous system called “transient receptor potential vanilloid 1” it can stop the body registering the pain caused by rheumatoid arthritis, for example. It can also be used to help patients with multiple sclerosis, amputees, and people undergoing chemotherapy. With rather less scientific evidence, a capsaicin product is marketed as an alternative to Botox, a wrinkle-smoothing cosmetic treatment.

But does it do any harm? The use of pepper spray as a weapon, and chili powder as a means of torture, suggests that it must. Certainly capsaicin can be painful, causing stress: in itself a potential health risk. A big dose incapacitates. But as far as permanent physical damage is concerned, the evidence is negligible to non-existent.

That seems to contradict common sense, which suggests that hot food causes an upset stomach—or what medical specialists call “gastric mucosal injury”. A study in 1987 on the effects of ordinary pepper produced some signs of gastric exfoliation (stripping away the stomach lining) and some bleeding—though the effects were less than those produced by aspirin. An alarming-sounding experiment a year later involved volunteers being fed minced jalapeño peppers through a tube, directly into the stomach. The results, observed by an endoscope (a camera on a tube) revealed no damage to the mucous membrane. Against that is a study of heavy chili-eaters in Mexico City, who appeared to have higher stomach cancer rates than a control group. But the rate of illness had no correlation with the frequency of chilies eaten, leading to speculation that other factors may be at work.

Humans are the only mammals to eat chilies. Other species apparently reckon that nasty tastes are a powerful evolutionary signal that something may be poisonous. Paul Rosin, a psychology professor at the University of Pennsylvania, who is one of the world’s best-known authorities on the effects of capsaicin, has had no success in persuading rats to eat chilies, and very limited success with dogs and chimpanzees: the handful of cases where these animals did eat chilies seemed to be because of their strong relationships with human handlers.

That offers a clue to the way in which mankind comes to develop a chili habit. In the same way as young people may come to like alcohol, tobacco and coffee (all of which initially taste nasty, but deliver a pleasurable chemical kick), chili-eating normally starts off as a social habit, bolstered by what Mr Rozin calls “benign masochism”: doing something painful and seemingly dangerous, in the knowledge that it won’t do any permanent harm. The adrenalin kick plus the natural opiates form an unbeatable combination for thrill-seekers. Just don’t get it in your eyes.

Latvia on the brink

Latvia's troubled economy

Baltic brink

Dec 18th 2008
From The Economist print edition

Latvia has chosen economic torture over complete collapse

ONE of the more dramatic and controversial financial rescues in modern European history has been taking shape in Latvia over the past three weeks, led by officials from the International Monetary Fund and backed by neighbouring countries, the European Union and other institutions. Latvia’s central bank has burned through €1 billion ($1.4 billion), around a fifth of its reserves, since mid-October to defend the national currency, the lat. This is pegged to the euro in an arrangement similar to a currency board, but with an even bigger lump of foreign currency to back local money in circulation. As a stopgap measure, the Swedish and Danish central banks this week offered a combined €500m in short-term swap facilities, allowing the central bank to keep exchanging lats for euros. The IMF-led bail-out—so far agreed only in outline—is likely to amount to over €7 billion, with contributions from the Fund, Nordic countries and Latvia’s Baltic neighbour, Estonia.

The deal does not require Latvia to devalue its currency. This is highly controversial inside the IMF, where memories of the debacle over Argentina’s abandonment of its currency board in 2002 are still painful. But ending the currency peg would be tricky, not least because the central bank’s independence is constitutionally entrenched. It would bring little lasting benefit. And it would be deeply unpopular. Some 85% of loans to Latvian households and firms are denominated in euros and other foreign currencies.

The clinching argument was the damage that a devaluation could wreak elsewhere. Swedish and Finnish banks, which own the bulk of Latvia’s banking system, could find their own creditworthiness suffering. Although total exposure to Latvia is still small, the perception of risk is damaging. In late October, the Swedish government launched a loan guarantee plan of SKr1.5 trillion ($190 billion) to allay fears about its banks’ future.

A Latvian devaluation would also be likely to topple the currency boards of Estonia and Lithuania, and to endanger the precarious stability secured in recent weeks in other wobbly east European countries such as Hungary. The IMF said this week that it did not believe that either Estonia or Lithuania needed to abandon their currency boards. However, big current-account deficits there and in other east European countries remain a worry.

The bail-out plan makes unprecedented demands for fiscal adjustment to trim both the current-account deficit and inflation. After some years of double-digit growth (during which a complacent government signally failed to cool the economy), Latvia faces a 5% or greater contraction in GDP next year. The tax rises and spending cuts that have been agreed upon are worth a full 7% of GDP. Public-sector salaries will fall by 15%. Private employers are making deep wage cuts too.

Latvia’s flexible economy may fare better than the political system, which is notable for fragmented parties, squabbling mediocrities, dodgy business lobbies and abuse of power (the security police briefly arrested an economics lecturer who urged people to keep their savings in foreign currency in cash). The prime minister, Ivars Godmanis, is a heavyweight, but lacks a competent team. This matters as the plan calls for big structural changes, including thorough reform of the financial system. The crisis was precipitated by the near-failure of a locally owned bank, Parex, which enjoyed a lively offshore business taking deposits from Russians, some of which appear to have been lent, unwisely, to locals. Having pushed the central bank into printing 200m lats ($390m) to support Parex, the government is now nationalising it.

Assuming that the bilateral elements in the plan are finalised, it may yet be agreed upon at an IMF board meeting shortly before Christmas. Any delay risks creating new room for speculators to try to attack the currency, and for locals to panic and turn more lats into euros (after some unwise remarks by the finance minister about a possible devaluation, the central bank lost more than €100m in reserves in a single day). Negotiating the plan has involved hectic late-night sessions in which outside officials have given locals copious instructions on the details of reform measures and the lobbying needed to gain support for them. It seems to have worked. But only for now.

Europe view--change the Euro rules

Europe.view

Time to change the rules
Dec 18th 2008
From Economist.com


The EU is asking too much of the ex-communist states that want to join the euro

MOST people who give the matter any thought agree: one of the main rules for countries wanting to join the euro is perverse. Yet adopting the common currency has gone from seeming a matter of national pride to national necessity, as the financial turmoil has highlighted the costs and risks that small countries face by keeping their national currencies. For places like the Baltic states and Bulgaria (which already peg their currencies to the euro) maintaining the current regime carries extra burdens and no benefits.

But euro-adopters must meet a European Union (EU) rule that stipulates a “high degree of price stability”, meaning that inflation must be no more than 1.5 percentage points higher than the three best-performing countries. (The other rules are less controversial. The second is sound public finances, meaning a government deficit below 3% of GDP and government debt below 60%. The third is stable exchange rates and the fourth is low long-term interest rates.)

The inflation rule is arbitrary in the sense that the benchmark is not the performance of the three best-performing (ie, lowest-inflation) countries actually in the euro zone, but rather the best three in the entire EU. So to join the euro, you might have to lower your inflation to the level of three countries that don’t use the common currency (eg Britain, Sweden and Denmark).

It is also harsh: as poor countries (such as the ex-communist states of eastern Europe) get richer, they should enjoy an appreciating exchange rate if their currency floats. But if they have their currency pegged, then it can’t appreciate. So prices and wages measured in the local currency will rise instead (economists call that the Balassa-Samuelson effect). That is not inflation of the kind that the euro zone’s managers should mind about.



Thirdly, the risk now is that the three benchmark countries may be suffering deflation. That is a nasty state of affairs which most countries would do much to avoid (because it leads consumers to postpone consumption while they they expect prices to fall further, thus triggering a long slump). It would be truly bizarre if countries battling for survival were to force deflation on themselves willingly.

So what to do? Andrus Ansip, Estonia’s commendably blunt prime minister, recently questioned the value of the current approach. But the European Central Bank and the EU’s monetary minders are not in the mood for treaty-tweaking. A better idea would be for the non-euro countries in the EU (ie, all the ex-communist ones bar Slovenia and Slovakia—plus Britain, Sweden and Denmark) to get together and warn the ECB that they will support any member that adopts the euro unilaterally. Then Estonia, Latvia and Lithuania, for example, could euro-ise on their own. Countries with currency boards and similar arrangements can do that almost at will: the money in circulation is covered by the central bank’s reserves, so you just substitute one for another.

That would turn the tables on the gnomes of Frankfurt. But it requires leadership. Only with one or more big countries—preferably Poland and Sweden—giving the small countries political cover will they have the nerve to take a step like this. The ECB could complain loudly, while privately accommodating the change. Then it would say that it had to change the rules to reflect the fait accompli.

This would not solve the underlying problems of the euro zone. Nor would it cure the ex-communist countries’ economic hangovers, which are the result of reckless borrowing and slow reforms. But it would at least remove the risk that some of the most vulnerable countries in Europe’s east suffer needless harm—at a time when the rich half of the continent is ill-placed to help them.

Wprost column

Okiem Brytyjczyka - Listy z Czekistanu

Numer: 51/52/2008 (1356)
Nie nazywajmy tego państwa Rosją, bo to nie fair wobec Herzena, Sacharowa, Achmatowej i innych inspirujących, bohaterskich postaci z historii „prawdziwej Rosji”. Polish version available here


Don't call it Russia--that is unfair to Herzen, Sakharov, Akhmatova and the other heroic, inspiring figures from the history of "real Russia". I prefer "Putinland" or "Chekistan". That highlights the way in which the entity born on the rubble of the Soviet Union was hijacked by the ex-KGB "Chekists", with their toxic mixture of authoritarianism and chauvinism. During the past eight years they have squandered the better half of $1.3 trillion in extra oil and gas revenues. A lot was scammed and stolen. A lot was wasted. A lot went in a boom in consumption, and associated spending on private construction (retail malls, luxury apartments etc). Very little went into worthwhile projects in infrastructure and public services.

And now the economic crisis has caught the Chekists with their pants down.

Russia's huge reserves (nearly $600 billion at their peak this summer) are down by a quarter. The rouble is sliding down. Default is looming for the big Russian companies that so recklessly borrowed tens of billions of dollars from equally reckless foreign lenders.

In theory, the answer is clear: to liberalise Russia's economy, dismantle cartels, open up decisionmaking to public scrutiny, allow the courts to deal with high-level corruption, restore political competition so as to punish the incompetent and crooked. That is about as likely as Disneyland opening a new theme park on Red Square. The system that the Chekists have built up is the basis of their wealth and their political power. Reforming it means their own destruction. Can you imagine Vladimir Putin going on television to announce that in light of the failures of the past eight years, he is retiring to a villa in Montenegro and wishes the country's new rulers well? I can't.

Indeed, from Putin's public statements so far, it seems that he does not understand the nature and extent of the economic crisis facing Russia. His instincts are to use administrative means--directing credit and fixing prices. If (in fact, when) that fails, the next step will be to impose capital controls. Kremlin cronies will still be able to get their funds out of the country. For less-favoured businesses and individuals, that will be a lot harder (creating another lucrative source of income for whatever lucky bureaucrat is in control of the procedure).

So what can they do? Restoring a planned economy won't work: that's the one big lesson that the ex-KGB learned from the "catastrophe" (as Putin described the collapse of the Soviet Union). Another option is the blame game: Putin loses no chance to point out that the crisis is "made in America". That is not actually true. If you want to find an over-leveraged financial system, feeble regulation and rich people with too much political influence, Moscow is not a bad place to look. Maybe the Kremlin will next start blaming the bankers: greedy (and Jewish), they can easily be demonised. If the authorities don't do that, the mob may. Having hammered shut every safety valve in the political system, the Chekists will have only themselves to blame if public anger explodes into pogrom-style violence--perhaps directed against ethnic minorities, perhaps against the rich.

In the Soviet era, the Kremlin could deal with rare episodes of public unrest (such as revolts in the Gulag, or the workers' protest at Novocherkassk in 1962) by using brute force. Now I wonder if they can do that. Already. the authorities are losing control of the north Caucasus. What happens when big industrial towns start rioting? The danger is that--squeezed between public discontent and the lack of an economic policy alternative--the Kremlin tries to find a foreign adventure to distract the population. That could mean a new war in Georgia, a provocation in another ex-Soviet country or--most alarmingly--something to stir up a conflict in the Middle East. That would send the oil price soaring, divide Europe and America, and let the Kremlin play peacemonger. Fasten your seatbelts: the end of this ride will be rough.

Standpoint: Germany and Russia

Bearhugged by Uncle Vlad
EDWARD LUCAS
January 2009

Germany's relationship with Vladimir Putin's Russia is the most puzzling and troubling feature of modern European politics. Not only is Germany Russia's biggest trading partner, it is also her biggest ally. It is Germany that has derailed Nato expansion. Germany reversed the EU's initially tough line on Russia after the invasion of Georgia. Germany prevents the Council of Europe scrutinising Russia's flawed elections. Germany forces the European Bank for Reconstruction and Development to channel money to companies run by Kremlin cronies. Germany keeps Europe's energy market rigged in favour of Russian gas imports.

Germans find these accusations infuriating. In the past eight years, they say, Vladimir Putin, the judo-loving ex-KGB officer, has transformed Russia from a basket case to a great power: self-confident, wealthy, even belligerent. The cost has been political freedom, spiralling corruption and the erosion of the rule of law. But for many people inside and outside Russia, this is a price worth paying. Western policy towards Russia in the Boris Yeltsin era was triumphalist and clumsy, force-feeding Western-style democracy, and it didn't work. Now Russia is running its own affairs, with the broad assent of the vast majority of the population. Political developments are distressing, but they are surely only temporary. And there's not much we can do about it anyway - Russia is now too big and too rich to push around. So if we don't like it we can lump it.

Germans who argue along these lines feel that they are carrying out a vital role - helping Russia integrate economically with Europe. The worst way to deal with Putin's Russia, they say, would be the mixture of paranoia, posturing and provocation exemplified by Georgia's President Mikheil Saakashvili and his nutty East European and American neocon backers.

Setting up such straw men only to incinerate them is the usual, rather facile, German approach to criticism. Nobody is suggesting that we ignore Russia. Nor is anyone arguing for broad economic sanctions. And it is possible to support Georgia's desire for freedom and security without endorsing its reckless and ill-advised president. The truth about the Putin regime is that it has been startlingly incompetent, as well as aggressive abroad and repressive at home. The fall in the oil price is making that increasingly clear.

The really puzzling question is why Germany feels this way towards the Russian regime. Are the Germans deluded? Or just ill-informed? Have they been bought by the profits from ballooning exports? Is their unwillingness to confront Russia the result of historical trauma - the defeat, destruction, rape and looting of the Soviet march westwards? Is it guilt about the mass murder that accompanied Germany's attack on the Soviet Union? Or is it deeper - the echoes of a frustrated colonial relationship that goes back to the days when the German-born Tsarina Catherine the Great invited German farmers to settle on the Volga?

It is hard to think of a more promising guide to these questions than Michael Stuermer (as he spells his name in English; in German it would be Stürmer). He is the archetypal good German: urbane, Anglophile, Atlanticist and brainy, spanning the worlds of academe and journalism in a way that is quite common in the Anglo-Saxon world, but still rare in the German-speaking one. His rough equivalent in Britain would be Timothy Garton Ash.

He is a world away from the sinister Russophilia of someone like Gerhard Schröder, the former German Chancellor, who regards Putin as a "flawless democrat" and chairs a controversial Kremlin-backed pipeline consortium.

He is certainly not the sort of person to fall foul of lazy thinking or the conventional wisdom. By the standards of the German chattering classes, he is something of an iconoclast - a man who delivers blunt truths about the real world to the pampered and idealistic Heimat.

To be fair to Stuermer, in his new book Putin and the Rise of Russia (Weidenfeld and Nicolson, £20), he does not adopt the main themes of Kremlin propaganda. He does not claim that the West's behaviour is just as bad as or worse than anything of which Russia is accused. He does not overlook corruption, nor claim that the Soviet Union was much misunderstood and that Stalin was "one of its most successful leaders" (as a Kremlin-endorsed school textbook calls him). He does not think that the West is entirely to blame for deteriorating relations in recent years. He doesn't even demonise the Bush administration.

He also grasps, every now and again, the single most important fact about contemporary Russia: that it is run by the ex-KGB and its business cronies. "The FSB has become the State itself," he writes, referring to the Federalnaya Sluzhba Bezopasnosti, the service which Putin ran before becoming president and which is the main heir to the old Soviet secret police. He terms it the "spookocracy" and highlights the link between the state-owned energy behemoth and the Kremlin: "Russia is Gazprom; Gazprom is Russia." He rightly exposes the combination of brutality and brittleness in the regime and the weakness in the much-touted "Putin plan", which he terms "a road-map to the promised land but without any detail, landmarks or clearly-defined goals".

But instead of using these points as the foundation for a critical analysis of the criminalised, authoritarian and revanchist regime running Russia, he buries them in a noxious slush of error and wishful thinking. Among the notes scribbled in this reviewer's copy are: glib, grating, garbled, garrulous, coy, naive, starstruck, self-important, sloppy, chatty, repetitious, sententious, sweeping, ponderous, bitty, lazy, uncritical, ill-sourced and facile.

Part of the problem is that Stuermer's knowledge of Russia appears to rest chiefly on his regular meetings with Putin at the Valdai discussion group - a select group of mainly appreciative Western commentators who are given an annual lengthy audience with the Russian leader. The occasion displays Putin's best side: the former intelligence officer's ability to read a subject's mind, his remarkable grasp of detail and his self-confidence. How many Western politicians would submit to a four-hour grilling by several dozen foreign journalists, with no notes or aides needed? Putin is indeed steely, fluent and convincing in person. As Stuermer tells us breathlessly on at least four occasions, he speaks excellent German as well as (we are told) English and French. Stuermer is similarly impressed with Kremlin sidekicks such as Sergei Ivanov, another polyglot ex-spy, with whom he has, he informs the reader, an "exclusive" interview. He thinks that the current President, Dmitri Medvedev, previously the in-house lawyer to Putin and his pals, is charming and competent.

That hints at one of the fundamental problems with the book. Most of it is deeply flawed reportage, by a writer who speaks practically no Russian and hardly knows the country. By far the most interesting part is at the end, where Stuermer tries to outline how the West should deal with Russia. The attempt by the author to establish his credibility as an authority on Russia in the preceding 200 pages is a failure.

For a start, Stuermer's main source material, his enviable access to the Russian leadership, is not accompanied by a willingness to listen critically to what they tell him. He offers the reader some banal observations about the circumstances of the meetings, but scarcely a note of real analysis about what is said, or who is saying it. He takes at face value, for example, the question of Putin's academic credentials. Yet research by Clifford Gaddy, an American scholar, has identified a huge chunk of what purports to be original research in Putin's PhD thesis that had been copied from another book. Although he is willing to accept that corruption has rocketed under Putin, and that it gets worse the higher up you go, he seems unaware of any of the speculation surrounding the Russian leader's personal wealth. Indeed, he suggests - seemingly with a straight face - the comical notion that Putin might want to retire from politics and take up a provincial job in Gazprom in St Petersburg "to make real money". He also ignores Putin's notorious propensity to use gangster slang and his racism - for example, in banning non-Russians from trading in the country's markets. He seems to think that because Putin speaks Western languages and knows how to deal with foreign journalists, he is ipso facto no different from any other European politician. This is a severe misapprehension which weakens the rest of the book.

Stuermer's attempts to explain Russia are crippled by his shaky grasp of the country's recent history and a remarkable inability to get the details right. To take just one elementary example, he seems unaware that magazin in Russian means "shop" and writes of boutiques in the "old GUM Magazine buildings" near the Kremlin - a double mistake, because the "M" in "GUM" already stands for magazin. That is a bit like calling the Gestapo (Geheime-

StaatsPolizei or Secret State Police) the "Gestapo police". He misspells the name of the Tsarist-era secret police and mistranslates the FSB as the Federal Intelligence Service. He calls the pro-Putin youth movement Nasi, not Nashi (a word that means "Ours" in Russian). He thinks that Siloviki means the people in power; the word indeed derives from the Russian word sila, or power, but it means veterans of the Soviet security, intelligence and military organs . Though these people are again in power their label comes from their previous jobs. That is quite a revealing error.

Stuermer was ill-advised to write the book in English. Although his command of the language is exceptional, the difficulties of writing about a third country, especially one with complicated orthography, are formidable. Perhaps because they were rushing to get it out while Russia is in the news, the publishers appear not to have copy-edited the manuscript at all. In his native German, Stuermer is a fine stylist. One would not know it from this book, which exemplifies the cliché-strewn dangers of writing in a non-native language. With a bit more time, the author might have provided some footnotes; indeed the discipline of backing up his impressions about Russian energy policy and demography with some sources and facts would have saved him from many garbles, misapprehensions and lacunae.

But such shortcomings are trivial compared with the really serious charges against the book. Indeed, they would be forgivable if Stuermer were to conclude his book by warning his fellow-countrymen that they had got Russia wrong. It poses a profound challenge to the security and wellbeing of the continent and this threat is made graver still by the greed and complacency of his compatriots. He might even have argued, defensibly although in my view wrongly, that though Russian revanchism and corruption are not a huge problem for Germany itself, they do pose a threat to his country's allies in the EU and Nato, and that Germany is therefore honour-bound to defend them.

Not a bit of it. Despite having outlined the criminality and chauvinism of the ex-KGB regime in the Kremlin, and conceded that we are, if not back in a new Cold War, at least in a "new Great Game", Stuermer backs away from drawing the obvious conclusion - that we are involved in a contest with dangerous people who want to harm us. Sometimes, this will be through outright aggression (even Stuermer concedes that the Russian "assertiveness" seen in the war in Georgia was a "prelude" and that "more is to come"). More often, it will be by subverting our political and economic system to make it more pliant to their wishes.

Yet the tone is one of ineffable complacency. Russia "has not had a happy youth", he writes. Now it is behaving like a "lonely wolf". That can't last, so just give it time. We should expect snarls but not take them seriously. The big need is for some more intelligent management of clashes of interest, which are bound to occur from time to time. These are hugely outweighed by common interests in fighting the world's ills, from nuclear proliferation to piracy. The Americans need to calm down and stop pushing their interests in the Russians' back yard. The Europeans (by which he means Germany and the big countries of "old Europe") should concentrate on promoting trade and investment, thus building up the middle class which will one day run Russia in a friendly, predictable and manageable way.

That is wrong for lots of reasons. Stuermer ignores the way in which the Kremlin has created a powerful lobby in European countries, including his own. The scandalous behaviour of Gerhard Schröder rates only a solitary mention (and that is in the context of a remark by Putin defending the German-Russian gas pipeline that the former German chancellor first blessed and now runs). It appears not to trouble him in the least that the EU's efforts to diversify away from gas, to diversify its sources of gas, and to reform its gas market to make it less vulnerable to Russian manipulation, are all blocked or delayed thanks to a Kremlin veto. He ignores the scandalous (and largely invisible) use of Russian money to influence opinion in Brussels, in the decision-making bodies of the EU. He ignores the fact - surely troubling for such a distinguished Atlanticist - that his own compatriots think America is a greater danger to world peace than Russia.

His biggest misapprehension is the repeated assertion that Russia has no grand design. He appears not to have read much Russian foreign-policy thinking, instead quoting repeatedly from an article by a minor Kremlin adviser published in the International Herald Tribune. It would be interesting to set him some homework, such as reading Russkaya Doktrina ("The Russian Doctrine"), a revanchist manifesto published last year by a bunch of senior Kremlin henchmen. He might even look at the Russian foreign ministry website, where the official statement of Russian foreign policy endorses the use of energy as a political weapon (something that German politicians in general seem not to have taken in, as they avidly increase their country's dependence on gas imported through Russia's monopoly of east-west pipelines). He seems not to care that Russia's leaders explicitly want to break the Atlantic alliance - the cornerstone of Germany's security thinking since the days of Konrad Adenauer. Putin himself describes Atlanticism as "silly". Stuermer, instead, places a touching faith in the ability of Western institutions to spread civilisation eastwards. It is true that in the 1990s, the desire to be presentable in the eyes of Western law firms, accountants and capital markets was a big spur to improvement. Russian companies such as Yukos (now looted by Putin cronies) cleaned up their books, stopped diddling minority shareholders, dropped their livelier business practices and saw their share price rocket as a result.

But the story in recent years is different. Instead of Russian companies raising their standards, foreigners have been dropping theirs. Foreign capital markets gladly handle stolen goods if the price is right. Western accountants audit the indefensible and hastily revoke audits for clients who have fallen foul of the Kremlin. Western law firms, disgracefully, let themselves be used to intimidate those who criticise powerful Russians. (A large chunk of the advance for my book, The New Cold War, was spent on legal fees; some of the most pungent passages were excised or diluted, not because they were incorrect, but because the cost of litigation is so high.)

It would be possible to argue (though Stuermer doesn't do so explicitly) that this is just too bad. The West has dropped its standards in dealings with Saudi Arabia and with China, so why not do so with Russia? Our system has survived the influx of petro-dollars and it will survive a flood of petro-euros too. All that talk of human rights, freedom and justice is just for show. It may have helped us win the last Cold War, but nobody takes it seriously now. Nothing short of a major war with Russia will be allowed to disrupt trade and investment, and as that is not going to happen, there's nothing to worry about.

That is a well-informed if cynical argument, and it is truer than I would wish. But it is not a clincher. Saudi Arabia and China have their interests, sometimes rather unpleasant ones. We have seen what Saudi financing of jihadism can do. We should not make the same mistake again. Crucially, if we think that only money matters, then we are defenceless when people attack us using money.

The second big reason why Stuermer's approach is mistaken is that he creates the impression (I hope a wrong one) that he does not care two kopecks for the countries between Germany and Russia. Nato expansion to Poland is dismissed airily as a piece of domestic politicking by Bill Clinton. The expansion to the Baltic states is described mockingly as "a bad idea whose time has come". This is a huge and revealing gap in his argument. The former communist countries of the Soviet empire ("ex-captive nations", as I like, rather unfashionably, to describe them) are not passive onlookers in all this. The new member states of the EU amount to 105 million people, not much less than Russia's fast-shrinking 142 million. Add Ukraine and they easily outnumber Russia. The huge benefit of Nato expansion in the past 15 years has been to stabilise this region. Countries such as Poland do not need to base their military planning on the central scenario that they may be fighting alone against Russia. Instead, they act as part of Nato. Their weapons, training and planning are all designed to fit into the alliance. That contributes greatly to everyone's security - not least Russia's. Georgia's disastrous incursion into South Ossetia would have been all but impossible had that country been a Nato member, or even close to it. Spheres of influence may look neat from the outside; for the countries concerned, they guarantee friction and conflict (as the origins of both world wars in the last century prove).

These countries feel scared, largely with good reason, and it is shameful that Germany does not take those fears into account. An opinion poll in the Financial Times last September showed that a majority of Germans would oppose going to war to defend the Baltic states, even if they were attacked militarily by Russia. Is it any wonder that the East European countries bordering Russia feel rather twitchy, and are disinclined to place complete trust in Nato's willingness to defend them? When they are then told by Germans such as Stuermer that they should "not get hot under the collar" and that America has no business in trying to bolster their security, it is not surprising if tempers shorten.

Of all the explanations for Germany's Russlandliebe, my favourite is the cheekiest. Russia is the closest that Germany has had to a colony. It is not just the German farmers invited by Catherine the Great. German engineers flocked to Russia in the Tsarist era (a Siemens power station built in those years is said to be running in Siberia to this day). It was not quite the "place in the sun" of which the Wihelmine German empire dreamed; more a place in the snow. For much of the last century it was an abortive dream. Under Stalin, ethnic Germans were deported from the Volga region to Kazakhstan and Siberia. Under Gorbachev and Yeltsin, they were allowed to move to Germany, a few still speaking the antique German dialects with which their forbears had left three centuries earlier.

Now it is third time lucky - Germany is Russia's biggest trading partner. It needs German investment, German habits, German management, German values. Just as German visitors to scruffy homes in Britain sometimes feel an irresistible urge to tidy the messy closets and cupboards, so Germans in Russia feel an almost mystical duty to set things in order. Never mind the corruption, the bellicose rhetoric, the dreadful unpunctuality - just get going and set an example. In return, Russia offers what Germany lacks: wide open spaces (don't call it Lebensraum though); a sense of fun, of spontaneity, of a different and less dull outlook on life. On top of all that, the profits are colossal. Russia's modernisation needs just the sort of construction, heavy machinery and know-how in which Germany excels. The same combination of gritty determination and brainpower that rebuilt Germany after the collapse of the Third Reich is what is needed in Russia now. Faced with another economic miracle in the making, is it any wonder that many Germans prefer Moscow to Munich in which to do business?

That is mostly to be welcomed. Even if the economic prosperity of recent years proves to have been superficial, Russia can only return to its natural place in the European mainstream through human contact and the growth of institutions. The dependability of German business, and German experience of creating order and the rule of law in the aftermath of dictatorship, should rub off on Russia to everyone's benefit. Had he stuck to making the case for pragmatic engagement, Stuermer would be on safer ground.

The problem is that the semi-colonial relationship that Germany seems to want with Russia is in fact a two-way street. As other imperial countries know well, you may start off exporting your values and outlook, but you end up importing theirs. German business was already surprisingly corrupt even before the great push eastwards that followed the collapse of communism. Dealing with Russia has accentuated that. Germany's commitment to the Atlantic alliance was looking wobbly from the 1980s onwards; now it is frayed and rotten. Rather than exporting German virtues to Russia, the danger now is that Germans are importing Russian sleaze, corporatism and anti-Americanism.

That is bad for Russia, bad for Germany and terrifying for the countries in between. Of that risk, however, the saturnine but self-satisfied Professor Stuermer seems blissfully ignorant.

Russia Economy

Russia's economy

Boom to bust and worse
Dec 16th 2008
From Economist.com


The state of the economy in Russia looks worse with each passing day

ECONOMIC growth and political stability: those were the two proudest achievements of Vladimir Putin and his ex-KGB associates in the eight years since they gained control of Russia. Now the economy is looking wobbly—industrial output in November slumped by 8.7% compared with a year earlier, according to figures published on Tuesday December 16th—the big question is whether the regime’s political control will crack too.

The rouble—a rock-hard currency since the oil price started to rise—is losing value at an accelerating rate, down by 3% this week against a basket of currencies. It has lost around 15% of its value since the summer. Even so, Russia’s huge foreign-currency reserves are steadily shrinking as the authorities defend the rouble. They are down by more than a quarter, or around $160 billion, from their August peak of $600 billion.



Russia has been hit by a double blow. One is a collapse in the oil price. Urals crude is trading around $44 a barrel, whereas Russia’s budget had pencilled in an oil price of $70. The other is the credit crunch which means an end to cheap loans for an economy that had become used to a flood of petroroubles.

The stockmarket has fallen by some 70% since its peak in May. Lay-offs are mounting. Western credit ratings agencies are downgrading Russian banks; earlier this month Standard & Poor’s downgraded Russia’s sovereign debt for the first time in nearly a decade. Industrial production is plummeting: this week marked the steepest fall since the crisis of 1998. Oleg Vyugin, a former deputy finance minister, reckons that 2009 may see GDP shrinking by as much as 4%. (The Economist Intelligence Unit, more optimistically, has cut its growth forecast from 3.7% to 3%.)

Finding an economic-policy mix to deal with that is a daunting task. Russia’s main macroeconomic problem of the past two years—inflation—is far from vanquished: it was down only slightly to 13.8% in November. But a far bigger problem is maintaining growth in an economy that during the boom years borrowed recklessly and used the money for higher living standards rather than diversification.

The rouble's depreciation does cut Russia’s current-account deficit, by making imports pricier. It takes some of the strain off the budget. But it does not help much else. Russia’s underlying uncompetitiveness was disguised by the oil boom. Now it is exposed.

Nor do bail-outs seem to be working. A $200 billion programme is helping Kremlin-linked companies stay afloat (and also consolidating the authorities’ control of the economy). But much of the money that was meant to unblock the financial system is instead going offshore. Confidence is shrivelling.

A rise in the oil price might buy the Kremlin some time. President Dmitry Medvedev last week suggested that Russia might even join OPEC, the oil-producers’ cartel. It is unclear how that would square with the nominally private ownership of most of Russia’s oil industry, or Russia’s membership of the G8 club of rich industrialised countries. OPEC members themselves may be unconvinced by Russia’s new-found enthusiasm.

Public discontent is beginning to simmer. The problem is less the tiny self-proclaimed opposition, but spontaneous protests by citizens fed up with incompetent and arbitrary behaviour. A protest by drivers in the Russian far east brought a nervy response from official Kremlin media. The regime’s popularity rested on a combination of higher living standards and selective repression. The economic crisis has weakened the effect of the former. The latter is one of the few options left. The signs are ominous. Memorial, a group that champions the cause of truth about the Stalin era, has had its computers seized in a police raid. The Soldiers’ Mothers Committee, which campaigns against conscription, says law-enforcement officials have asked its staff to prove that their offices are not used for drug-dealing.

For now, the economic crisis is scarcely discussed in Russia’s mainstream media, which has come under steadily tighter control since Mr Putin came to power. That is not likely to persuade Russians that the authorities have everything under control.

What next for NATO

Europe.view

What about NATO?

Dec 11th 2008
From Economist.com


How the alliance should move forward

Get article background

BETWEEN the new American administration getting going and the NATO summit in Strasbourg in April lie a few short perilous months. The story since the war in Georgia has been that NATO proved reluctant to identify Russia as a military threat, but under the authority of the supreme allied commander, a brainy American called General John Craddock, is engaged in “prudent planning”, which allows for quite a lot without requiring the authority of the North Atlantic Council.

The worry for Poles, Estonians, Latvians and Lithuanians is that pushing too hard for formal contingency-planning might be vetoed by the Russia-friendly countries in NATO. That would be a disaster. So far the situation is not bad, but neither is it stable. Faced with a revisionist, and perhaps increasingly desperate regime in Russia, NATO’s credibility could do with a boost.


Now the new American administration must decide how much it wants to try to calm Russia (something that will please Germany and other key European allies), and how much it wants to publicly bolster the security of the twitchy, strongly Atlanticist countries in Europe’s east. These are valued allies in places such as Iraq and Afghanistan—small in numbers, but strong in symbolism.

The problem won’t be lubricated by money. Some countries may be able to boast that defence spending as a share of GDP is going up. But that will be because GDP is going down, not because more money is going for bullets and battleships.

On top of all that comes the question of a new NATO secretary-general.

The best way forward would have the following elements. First would be a series of new arms-control initiatives to show the Kremlin that America takes Russia seriously. That could include talks on START 3 (covering strategic nuclear weapons, where Russia’s arsenal is already embarrassingly weak); on anti-ballistic missile systems; on the Conventional Forces in Europe treaty (holed by a Russian suspension) and on weapons in space.

A second element would be to drop explicit talk of membership for Georgia and Ukraine (agreed in principle already) and concentrate on building up boring but important capabilities such as policing arms sales, storage of ammunition and training, planning, and managing reservists (the last being a glaring failure in Georgia’s case). As those reforms take root, the chance that other NATO countries find the prospective new members more credible will grow.

A third element would be to ensure that NATO’s original mission—territorial defence of its existing members—is in no doubt. That requires the capability to send forces on expeditions; whether these are to Darfur, Somalia, Estonia or northern Norway is a secondary question. If the question of formally categorising Russia as a threat is too politically ticklish, then it can be left. The main thing is to make sure that the right forces, properly trained and equipped, are available if needed.

So far, NATO has done all right on “force planning” (which is making lists of things that are in theory available) and less well on “force generation” (which is actually providing them in practice). It is striking that it took even America 72 hours just to find the planes to bring back 3,000 troops from Iraq to Georgia in August.

A final element would be to endorse, quietly, the burgeoning Swedish-Finnish-Norwegian defence partnership in the Baltic sea and “high North”. That needs outsiders to pitch in, such as Poland and Denmark. To be fully effective, NATO needs to be realistic about what it can’t do, as well as what it can.

Cyberwarfare

Cyberwar
The worm turns
Dec 4th 2008

From The Economist print edition

A cyber-attack alarms the Pentagon

BATTLEFIELD bandwidth is low at best, making networks sticky and e-mails tricky. American soldiers often rely on memory sticks to cart vital data between computers. Off-duty, they use the same devices to move around music and photos. The dangers of that have just become apparent with the news that the Pentagon has banned the use of all portable memory devices because of the spread of a bit of malicious software called agent.btz.

This is a “worm”, meaning that it replicates itself. If you have it on, say, the memory card of a digital camera it will infect any computer to which you upload photos. It will then infect any other portable memory plugged into that computer (the cyber-equivalent, one might say, of a sexually transmitted disease). On any computer hooked up to the internet, this variant tries to download more nasty stuff: in this case two programs that access the hard-drive. Was it a humdrum crime of trying to steal banking details? Or something more serious? The trail has gone cold.

In any case, the malicious software (malware in the jargon) penetrated at least one classified computer network. The problem was severe enough for Admiral Michael Mullen, the chairman of the joint chiefs of staff, to brief George Bush on it. Officials are saying little more than that.


Kimberly Zenz, an expert on cyberwarfare at VeriSign iDefense, a computer security company that is investigating the attack, notes that it is not clear that agent.btz was designed specifically to target military networks, or indeed that it comes from either Russia or China (two countries known to have state-sponsored cyberwarfare programmes that regularly target American government computer networks).

Indeed, she says, by the standards of cyberwarfare, agent.btz is pretty basic; it is a variant of a well-known bit of malware called the SillyFDC worm, which has been around for at least three years. By contrast, a government commission warned Congress last month that “since China’s current cyber operations capability is so advanced, it can engage in forms of cyberwarfare so sophisticated that the United States may be unable to counteract or even detect the efforts.”

The most remarkable feature of the episode may not be the breach of security, but the cost of dealing with it. In the civilian world, at least one bank has dealt with agent.btz by blocking all its computers’ USB ports with glue. Every bit of portable memory in the sprawling American military establishment now needs to be scrubbed clean before it can be used again. In the meantime, soldiers will find it hard or outright impossible to share, say, vital digital maps, let alone synch their iPods or exchange pictures with their families.

Poland

Europe
Poland
The tough go politicking

Dec 4th 2008

WARSAW

Poland’s lightweight government is facing its first serious challenge

IT IS more an election campaign than a government. Since he won power a year ago, Poland’s prime minister, Donald Tusk, has seemed less interested in ruling the country than in preparing for the presidential election in 2010. That is when he hopes to defeat Lech Kaczynski, whose twin brother Jaroslaw was prime minister before Mr Tusk. President Kaczynski delights in vetoing government laws and elbowing Mr Tusk aside at international meetings. So long as Poland was booming, Mr Tusk’s approach may have been sensible enough. With too small a majority in parliament to overturn the president’s veto, pushing potentially unpopular reforms has seemed pointless. So it may have appeared wiser to concentrate on highlighting the contrast between the presentable, football-loving Mr Tusk and the gaffe-prone, conspiracy-loving Kaczynskis.

The world’s economic crisis is now forcing a change of gear. Poland has not been badly affected so far. But it faces a sharp slowdown in growth, to a (probably optimistic) government forecast rate of 3.7% next year. Polish companies complain that banks, mainly foreign-owned, are raising charges punitively on short-term loans. As credit dries up, job losses are rocketing.



The government launched a new stimulus programme this week, supposedly worth 91 billion zlotys ($31 billion) and featuring loan guarantees and infrastructure spending. The packaging was good, but much of the content was a rehash of old promises. The government’s aim seems to be to keep fiscal policy tight so that the central bank can cut interest rates. That may help Poland get into the euro. Mr Tusk surprised many recently when he said this might happen as soon as 2012.


After years when soaring tax revenues disguised the inefficiency of much public spending, budget discipline is both unfamiliar and unwelcome. A plan to raise 12 billion zlotys next year from privatisation looks ambitious in the current climate. This highlights the chances missed by the previous government, which largely halted sales of sprawling state holdings that take in news-stands and furniture factories, as well as some big firms.

To keep spending down, Mr Tusk will rely heavily on his peppery finance minister, Jacek Rostowski, a British-born economics professor. He has steered through a tax reform (conceived by the previous government) that has flattened rates and simplified some of the most frustrating rules (such as the requirement that all records be kept on paper). The government has also tried to reform lax early-retirement rules. Michal Boni, Mr Tusk’s economic adviser, says the plan is to make social spending more efficient and cut paperwork that slows construction of roads and so on. But such changes risk both a presidential veto and opposition from vocal trade unions.


It all looks daunting. But Poland’s government is probably the least feeble in eastern Europe. It does not have to cope with either a collapsing property bubble or a highly leveraged financial system. Its biggest flaw is probably going easy on corruption, which the Kaczynskis tackled with wild (but often counterproductive) zeal. The uklad—Polish shorthand for the stew of ex-spooks, officials and tycoons who some believe still wield the real power in the land—may be relaxing. But all Poles are facing the economic downturn with increasing nervousness.

Europe View: Damian and the Duma

Power, money and principle

Dec 4th 2008
From Economist.com
Defending political freedom in Russia and Britain

IMAGINE the outrage if the Russian police raided the Duma and arrested a leading opposition politician on the grounds that he had obtained leaked information embarrassing to the Kremlin. It would prompt pompous lectures from Western politicians and lobby groups about the dangers of autocracy, the need to maintain the separation of powers, and so on. When the same thing happens in Britain, it is not just bad for the political system in a country that likes to think it is the mother of parliamentary democracy. It also weakens the argument that tussles between Russia and the West are based fundamentally on values rather than geopolitics.

“Whataboutism” was a favourite tactic of Soviet propagandists during the old Cold War. Any criticism of the Soviet Union’s internal repression or external aggression was met by asking “what about” some crime of the West, from slavery to the Monroe doctrine. In the era when political prisoners rotted in Siberia and you could be shot for trying to leave the socialist paradise, whataboutism was little more than a debating tactic. Most people inside the Soviet Union, particularly towards the end, knew that their system was based on lies and murder. For all its shortcomings, the West was not that bad.

The modern Russian version is getting harder to counter. Many pro-Kremlin Russians seem sincerely to believe that no moral difference now exists between their rulers and those of other countries. Vladimir Putin is a former KGB officer? Well, George Bush senior ran the CIA. Chechnya was bloody, but Iraq was worse. Bombing Serbia and recognising Kosovo disqualifies the West from making any criticism of Russian behaviour in Georgia. These are all flawed arguments, but they are believed nonetheless.

Privately, the cynicism could be deeper still. Some may think, “We have learned that when we need something from the West, we find powerful people in a big country and pay them and then we get what they want.” The rule of law, contested elections, free media and so on are just fictions: they look nice and may fool the voters into thinking that their system is different. But in the end it is all about power and money.

It is not just the strength of the pro-Kremlin business lobby, particularly in the energy industries, in countries such as Germany and Italy. It is remarkable that politicians from both main British parties see nothing wrong in hobnobbing with Oleg Deripaska, a Kremlin crony and tycoon who is unable to visit America because of FBI concerns about his business practices and partners.

Events such as the police raid on the home and parliamentary office of Damian Green, a leading British Conservative politician, make it worse. Senior police officers saw nothing wrong with locking Mr Green up for nine hours and taking his private documents, computer, mobile phone, fingerprints and a DNA sample.

Nobody has resigned or been punished. One could easily get the idea that the British authorities not only believe they are above the law but act that way, with impunity.

Actually, things are not yet quite that bad. Voters will decide what they make of it. Unlike in Russia, nobody knows who will win the next general election in Britain, just as nobody knew in advance who would win the American presidency. Contested elections are the ultimate backstop. But real political freedom needs more than that. It is not just what happens at elections but all the other things in between them that matter—including opposition politicians being able to go about their business without being humiliated or intimidated. That’s worth fighting for; in Russia and in Britain.

Wprost--Britain, Poland and History

I have a new sideline as a fortnightly columnist for the Polish weekly Wprost. My opening salvo is here (in Polish). For the non-Polonophones, the English version follows


Did the British kill General Wladyslaw Sikorski? Or connive in a Soviet plot to do so? I doubt it. But as the wartime leader’s fate comes again into focus, so too comes Britain’s irritatingly lopsided view of wartime history.

It’s personal for me: my great-uncle, Charles Portal, (known in the family as “Peter”) was chief of the air staff during the war (and knew Sikorski).

He argued strongly for Polish pilots to be allowed to fly alongside the RAF in the Battle of Britain (some British military bureaucrats thought they were too ill-disciplined). His beaky face can be seen, just behind Churchill, in the most famous picture of the Yalta conference (see above, ringed in red). After the defeat of the Nazis, he insisted, against Soviet objections, that Polish aircrew be allowed to march, in uniform, in the Victory parade in London. He won that fight-but the Poles said that unless all military units were included, the airmen would not take part.



Sadly he died when I was nine, so I could not quiz him about General Sikorski, Yalta, or anything else. But I like to think that he was horrified by the post-war settlement in Europe that handed half the continent over to the Soviet occupiers.

Most British people see it differently. For them, the story of the war is a Hollywood one, of heroic solitary struggle followed by glorious victory. Every time I hear talk of how Britain fought “alone” after the fall of France in 1940, I complain (on behalf of the Poles, and also the Greeks). And as Poland gets forgotten, Stalin’s Soviet Union gets a whitewash: sanitised as our “wartime ally”, with little mention of the cost borne by both Russians and others.

Every time I hear that victory in 1945 brought “freedom” to Europe, I quibble: to Western Europe, maybe, but what about our allies? And what’s this about a neat end in 1945? The Żołnierze wyklęci were fighting for years afterwards and Józef Franczak was not caught until 1963. The last Estonian partisan, August Sabbe, hid in the woods until 1978 (he drowned trying to escape from a KGB search party). It was not until the last Russian soldier left the Baltic states on August 31st 1994 that one could really say that the military venture launched by Hitler and Stalin was really over.

It would be nice to think that this is just an interesting argument for historians. But Vladimir Putin’s Russia makes it topical. When I am presenting my book, the New Cold War, I like to shock audiences by asking them to imagine that the Third Reich had survived for decades, with Hitler dying in 1953 like Stalin, and being followed by a long period of stagnation under a German version of Brezhnev. Then I ask them to imagine that a “reform Nazi” (called Michael Gorbach for the sake of argument) tries to reform the unreformable with a mixture of “Öffenheit” and “Umbau” (ie “Glasnost” and “Perestroika”).

Then Herr Gorbach is toppled by a failed hardline coup (just like Gorbachev); the Third Reich collapses (just like the Soviet Union); long-forgotten nations like Denmark, the Netherlands and Austria return to the map of the world from which they were obliterated in 1938-40 (just like the Baltic states).

Then we get a new country called the German Federation, supposedly democratic and friendly. But after a few years a former SS officer (called Waldemar Puschnik) becomes leader. He moves swiftly to limit media freedom and control the political system (just like retired KGB officer Vladimir Putin). But outsiders argue that the German people want stability and it is not our job to interfere.

But then imagine that our putative SS-Obersturmbannführer Puschnik says that the Anschluss and the Munich agreement were “legal” (Just as Mr Putin does about the Molotov-Ribbentrop Pact). That German officials tell the Dutch and the Danes that they should be grateful to the German people for their independence, that they should keep German as a second official language and that they should allow automatic citizenship to all settlers who moved there during the occupation era. (This is pretty much what the Kremlin says to the Baltic states now).

And then imagine that a German government newspaper argues that there were no gas chambers at Auschwitz (Rossiskaya gazeta, a state-run Russian newspaper said in September 2007, followed by four other mainstream Russian news outlets since then, that the Katyn massacre was the work of the Nazis and not of the NKVD).

My British audiences often find that bewildering and shocking. But at least it gets them thinking. Dealing with Russia now is not just about geopolitics and realpolitik. It is about values-and they are particularly visible in our treatment of historical facts. General Sikorski knew that and complained fiercely about wartime Soviet lies on Katyn. I wish my compatriots took history seriously too.

Havel to Habermas

Europe.view

From Havel to Habermas
Nov 27th 2008
From Economist.com


Central Europe's missing political philosophy

THEY gripped the world, but left political philosophers yawning. According to Jürgen Habermas, a German philosopher, the revolutions that overturned decades of totalitarian rule in central and eastern Europe in 1989 were marked by a “total lack of ideas that are either innovative or orientated towards the future”.

In a sense that was right. One of the most memorable images of the extraordinary “Velvet Revolution” in what was then Czechoslovakia in November 1989 was a map showing a ladder, reaching from the depths of central Europe up a cliff, to the heights of the western part of the continent. “Zpět do Evropy” it read: “Back to Europe”.

For millions of people behind the Iron Curtain, abstract political philosophy and grand schemes had brought nothing but trouble. Vaclav Havel, whom the revolution propelled into Prague Castle as president, said his dream was to live in a “small boring European country”.

But actually Mr Habermas is wrong: a revival of the spirit of 1989 is just what both old and new Europe need. A Czech-born scholar from Harvard, Paul Linden-Retek, has recently finished a fascinating philosophical comparison between Mr Habermas and Mr Havel.

At first sight, it’s a stretch: Mr Habermas epitomises the German academic stratosphere; put crudely, his main idea is to revive and correct the Enlightenment by reviving the “public sphere” (in other words, getting people talking about decisions that they can influence). Mr Havel’s thinking is more literary than academic. He had no formal higher education (although he is much influenced by Jan Patočka, a Czech philosopher who died under secret police interrogation).



Yet both men have written powerfully against totalitarianism. Both deal with the influence of impersonal systems on modern life. Both deal with language and its uses. Both have little time for the contortions of structuralists and the like.

Mr Linden-Retek’s study shows that Messrs Havel and Habermas essentially share a critique of post-1989 politics in central Europe. Totalitarianism is gone, but milder doses of repression, apathy, injustice, and alienation remain. But Mr Habermas misses the big lesson of 1989: that politics need not be just the boring business of elites and insiders. It is, at least potentially, an exciting affair in which outsiders, even against great odds, can make a difference. Those who took part in the Orange Revolution in Ukraine or in the wild enthusiasm of Barack Obama’s campaign for the American presidency felt something of the same (regardless of the disappointment that the first has delivered and the second may bring).

Mr Linden-Retek’s mother, Daniela Retkova, was an admired aide to Mr Havel in the early 1990s. Her son’s work is well aimed and well timed to prompt an overdue discussion about the legacy of 1989. Having swallowed (but not wholly digested) a Western menu after the collapse of communism, might east Europeans now be ready to take a critical look at the political model that resulted? It is tempting to hope so.

As Ivan Krastev, a Bulgarian pundit, has noted, the model of elections contested by parties with mass membership and historically defined positions didn’t work very well even when it was braced by the cold war need to compete against communism. Twenty years on, amid huge technological, social and economic changes, it looks threadbare in both east and west: money matters too much, ideas too little. What, for example, does e-democracy (for example, wiki-style public input to lawmaking) mean for Mr Habermas’s deliberative model? Those planning next year’s anniversary festivities in Prague could do worse than to invite Messrs Havel and Habermas to a public discussion.

Boris Fyodorov Obituary

Boris Fyodorov
Nov 27th 2008
From The Economist print edition


Boris Fyodorov, a Russian economic reformer, died on November 20th, aged 50

MOST of Russia’s super-rich spend their summer holidays on yachts in the sunny Mediterranean. Boris Fyodorov preferred visiting English country churches, the older, the better. The buildings, and especially the gravestones, fascinated him. He saw in them symbols of an historical continuity that Russia had lost under communism. Born in poverty as a factory caretaker’s son, he delighted in making discoveries among his aristocratic roots: trinkets unearthed at his family’s ruined estate, a (Polish) coat of arms. His dacha outside Moscow was notable not for pet wolves or other fashionable extravagances, but for his valiant attempts to create a weedless, stripy English lawn in a hostile climate. He flew a Russian flag there too, scandalising the neighbours, who insisted he needed a permit.

Visitors to his office sometimes wished the chairs had seat belts. Conversation would ricochet from Russia’s recent economic history to the tragedy of the aborted reforms brought in by his hero, Pyotr Stolypin, one of Tsar Nicholas II’s prime ministers. It would touch on the lamentable failure of the Kremlin under Vladimir Putin to promote proper corporate behaviour in the boardrooms of Russia’s big companies, bounce to the hypocrisy of Western bankers who failed to pay their taxes, and come to rest with a robust inquiry into the virtues of cylinder mowers compared with the rotary kind.

The chat would be in muscular, fluent English. Mr Fyodorov’s job in the declining years of the Soviet Union had included monitoring the world economy by reading the Financial Times. This had left him at ease with the jargon of the new age, and also well placed to be finance minister of Russia (still just a part of the Soviet Union) as the planned economy entered its death throes. He briefly represented Russia (after it had become an independent country) at the World Bank in Washington, and then spent a year as deputy prime minister and, for a short while, as finance minister too.

Practitioner, not politician

It was not a great success. Like several other reformers of the time, he had a firmer grasp of economics than of politics: he was too unworldly, too impatient and perhaps too cerebral for the murky world of Russian government. Even so, he helped to create, almost from scratch, a Western-style financial system with capital markets, payments systems and a semi-independent central bank. Despite the wholesale theft-by-privatisation that followed, these achievements look more impressive now than they did in the chaos of the time.



Once out of office, Mr Fyodorov published, among other books, a useful encyclopedia of financial terms. Some were recovered from pre-revolutionary Russian, others were neologisms. As a Russian patriot, however, he detested the practice of simply adapting an English word. Ofshorky (offshore accounts) was a pet hate, particularly because of its association with tax evasion. As head of the tax service, briefly, in 1998, he tried to decriminalise tax collecting, already well on its way to becoming an extortion racket, and also to broaden its reach to the rich and powerful—many of them all too familiar with ofshorky. Bravely, he set his inspectors on such prominent figures as Vladimir Zhirinovsky, a clownish extremist with connections to Russia’s rulers. He also tried to scare expatriate bankers into paying taxes on their salaries (amounting to $5 billion a year, he thought) and their local landlords into declaring the rents extracted from such foreigners ($1 billion).

Mr Fyodorov had by this time also gone into business, founding United Financial Group, an investment bank, with an American friend in 1994. Yet neither wealth, connections, nor the flashing blue light on his black limousine (a hallmark of status in Russia) made Mr Fyodorov quite typical of the elite that moved so smoothly from burying communism to embracing capitalism red in tooth and claw. On the contrary, he despised such people for their lack of scruple. Without a moral basis, he said, capitalism would just become the means by which the powerful would concentrate their wealth.

That was prescient. Mr Fyodorov’s last great cause before dropping out of public life was to try to make big Russian companies treat their shareholders properly, rather than serving the interests of bureaucrats and cronies. As a director of Gazprom, Russia’s vast gas monopoly, he attacked the practice of issuing two classes of shares, one for domestic investors and one for foreigners. That depressed the true value of the company. His own bank made tidy profits from intricate schemes through which foreigners could act as though they were Russian shareholders. Eventually, once its two-tier share system was abolished, Gazprom became one of the world’s most valuable energy companies.

But it remained one of the worst run, much to Mr Fyodorov’s disappointment. For another of his aims was to strip away the intermediary firms that loot cashflow and assets from large Russian companies with the connivance of the management. One of his targets at Gazprom was closed down as Mr Putin and his friends gained control, but others soon took its place. Mr Fyodorov used to lament the fact that even he could not find the right phrase in Russian for “corporate governance”.

CEE Economics/Romania-Bulgaria

Eastern Europe’s woes

Stopping the rot
Nov 27th 2008
From The Economist print edition


East European economies crack, with Romania and Bulgaria the worst off

JUST another week’s news in eastern Europe: Latvia, after vehement denials, starts talks with the IMF; Bulgaria loses €220m ($286m) in promised payments from the European Union because of its failure to tackle corruption; and the European Bank for Reconstruction and Development cuts its growth forecast for the region by half. But the good news is that worries of a huge meltdown, from the Baltic to the Black Sea, now look overblown.

The most likely outcome is several years of low or no growth, with bigger hiccups in countries that have the shakiest financial systems and biggest imbalances. The outside world (ie, the IMF, the EU and the European Central Bank) is ready to help when necessary and—more usefully—even before problems hit markets. The ECB has opened a €10 billion credit line to Poland, which saw its currency, the zloty, fall sharply earlier this month. Hungary’s central bank was even able to cut its interest rates by half a point from the 11.5% rate that it set last month, as part of a $25 billion international bail-out. And foreign banks have stood by their subsidiaries in the ex-communist countries. It was their risky lending that inflated the property bubbles, now popped, and also financed huge current-account deficits in such places as Latvia and Bulgaria.

The biggest worries are now focused on Bulgaria and Romania, the poorest and worst-governed new members of the EU.

The Bulgarians have their hands tied by a currency board that pegs the lev rigidly to the euro. That rules out devaluation to restore competitiveness, which is a concern as exports sag. It also removes a potential buffer, because the central bank cannot adjust interest rates. A current-account deficit worth a quarter of GDP looks alarming.

At least Bulgaria’s fiscal position is strong. The state has little foreign debt and runs a budget surplus. That should allow it to increase public spending as the economy slows. It can also borrow abroad (though the authorities say they have no plans to approach the IMF). The loss of some EU money is embarrassing, but Bulgaria is still in line to get €11 billion in the years up to 2013. Oriens, a Hungarian-based merchant bank that specialises in the Balkan region, reckons that growth next year will be 2.3%: low but not awful.

Romania has a current-account deficit of only 14% of GDP; a floating currency that gives it more flexibility; and is less dependent on exports to the slowing euro area than Bulgaria. But it may have a harder landing. Oriens forecasts GDP growth of just 0.9% next year. Its banking system is less profitable than Bulgaria’s. Although it is mostly foreign-owned, it looks wobblier; inter-bank rates have nearly doubled this year to 15%. Foreign reserves are scantier and the IMF reckons that the currency, the leu, may be overvalued by 19%.

Thanks to populist spending in the run-up to this week’s parliamentary election, the budget deficit may reach 3.9% of GDP by the year-end. That is not a lot by some standards, but it may still cloud outsiders’ willingness to provide more cash. Whatever coalition the election produces, serious reform is a long way off. Bulgaria’s politics are also troubling. Politicians’ ties to organised crime remain scandalous; the main populist party seems to blame the country’s Turkish minority as the economy slumps. Meltdown may have been averted, but the eastern Balkans still face bleak times ahead.

Missile defence

A damp squib
Nov 20th 2008
From The Economist print edition


American missile-defence plans falter in eastern Europe

IRAN’S new medium-range missile, the Sajil, which was test-fired on November 12th, marks something of a technological breakthrough. It is fast and has a claimed range of 2,000km (1,250 miles). It might reach Moscow or southern Italy, say. Yet both Russia and Italy are opposed to American plans to place ten interceptor rockets in Poland and an anti-missile radar in the Czech Republic. The Italian prime minister, Silvio Berlusconi, has criticised the plan because it “provoked” Russia. The Kremlin has threatened to put short-range Iskander missiles in its Kaliningrad exclave (or possibly in Belarus, a close ally) if the missile-defence deployment goes ahead.

Raising the temperature even higher, Nicolas Sarkozy, the French president who (until the end of December) also presides over the European Union, said on November 14th that the American plan “does nothing to bring security and complicates things”. That infuriated his Polish and Czech counterparts, who noted that France signed up to a decision at the NATO summit in April in support of missile defence. They also questioned what business a French president had pronouncing on other countries’ security ties with America. Mr Sarkozy issued a partial retraction, saying merely that nobody should put new missiles in Europe pending talks with Russia about new security arrangements for the entire continent.



The incoming administration of Barack Obama seems unenthusiastic about missile defence as well. The president-elect says that he will support the programme “if it works”. That marks a big shift from the Bush administration’s policy, which is to deploy and develop in a “spiral” (meaning that bits would be deployed as and when they are ready).

All this leaves the Poles and Czechs who pushed for missile defence (against unenthusiastic public opinion) somewhat exposed. The Polish president, Lech Kaczynski, a strong supporter of the plan, claimed that Mr Obama had told him that missile defences would go ahead. But the Obama team issued a denial, leaving Mr Kaczynski, not for the first time, looking out of his depth. Radek Sikorski, Poland’s foreign minister, who clinched the original deal with America, flew to Washington this week to sound out potential Obama administration appointees in more detail.

Poland is interested not only in the tacit American security guarantee that a missile-defence base implies (important if NATO’s value to Poland frays because of German ties with Russia). It also won promises of American help with Polish military modernisation and of a battery of advanced air-defence missiles to protect Warsaw. If the Obama administration freezes missile defence (quite easy, given congressional hostility to the programme), other parts of the deal will be in doubt.

That is more galling since public support in Poland for missile defences has risen from 27% at the start of August to 41% after the Georgian war, when Condoleezza Rice, America’s secretary of state, came to sign the deal and toast it in Georgian wine. Some Poles feel, crossly, that Mr Sarkozy is speaking for Russia, not for them.

Rakowski obituary

From The Economist print edition


Mieczyslaw Rakowski, a Polish communist journalist and politician, died on November 8th, aged 81

CLUNKY cogs in the propaganda machine, communist journalists in eastern Europe were a dreary and dutiful lot. Mieczyslaw Rakowski was different. Polityka, the magazine he edited for 24 years, was the most readable official publication in the Soviet block: cogent, insightful, sometimes irreverent.

To foreigners reporting on the long slow death of the Soviet empire, Mr Rakowski was still more interesting in person, giving candid and waspish assessments of the communist regime’s political, economic and personal shortcomings. He was amusing and friendly company, at a time when congeniality was as scarce in the east as toilet paper or matches. Unlike most senior communists, he was not pompous, bullying or hidebound: you could easily believe that he was just another human being, not a defender of a system based on lies and mass murder.

Mr Rakowski did a less impressive job, however, dealing with the people who would eventually run Poland. He habitually sneered at Lech Walesa, the leader of the Solidarity trade union, calling him “Dr Walesa” in a dig at the shipyard electrician’s lack of formal education: a big deal in intellectually snobbish Poland. The Gdansk accords of 1980 gave Poland a few precious months of free public life, but broke down because of Solidarity’s demand for freedom to decide on Poland’s future, and not just to discuss it. Mr Rakowski, by then deputy prime minister and ostensibly representing the interests of the proletariat, memorably lost his temper with the workers’ representatives: “You’d be herding cows if it wasn’t for this system”—pause—“and so would I.”


In that sense Mr Rakowski symbolised Poland’s post-war story. A peasant’s son and a teenage lathe operator, he was talent-spotted by a communist regime which, installed by Soviet military force, was hungry for brain power. He rose through the system in the 1950s, at a time when Poland’s rulers struggled for wiggle-room inside the Soviet block and showed something of a human face at home. For many, the modernisation and industrialisation the regime brought were welcome, regardless of the political label attached to them.

Fried snowballs

Mr Rakowski was usually seen as an arch-trimmer, a prime example of the collaboration forced on Poland by its history. His ability to blow with the wind was best described in a scalding article (published abroad) called “The hairstyles of Mieczyslaw Rakowski”, which noted how the tousled blond locks of the youthful idealist gave way to the grizzled grey of the apparatchik. To Norman Davies, a British historian, the “crumpled faces” of Mr Rakowski and his like revealed their story: “pliable Greeks in a world ruled by cruel Roman savages, whom they serve with infinite regret and infinite agility.”

But it was not all trimming. In the 1960s Mr Rakowski publicly opposed the death penalty, then a heretical and dangerous stance. His finest hour came in 1968, when a quarrel between two factions in the communist party bubbled over into a public anti-Semitic (ostensibly “anti-Zionist”) frenzy. Mr Rakowski stood firm and refused to sack any Jews. Asked to reprint a pre-war article critical of Jews, he refused, saying their ashes were “scattered in the fields around Auschwitz”. Many Poles thought their Nazi and Soviet tormentors were two sides of the same coin; it was remarkable for a senior communist to agree in public, even in part.

But unlike some, he did not leave the party, either then or after martial law was imposed in 1981. With scores killed and thousands jailed, Mr Rakowski became the right-hand man of the country’s new military leader, General Wojciech Jaruzelski. He was ambiguous about whether he still truly believed in a democratic form of communism; Leszek Kolakowski, the exiled philosopher, rightly described that as “fried snowballs”. Mr Rakowski preferred to argue that communism protected Poland from the Soviet Union, whereas full-scale opposition would be futile. The anti-communist fighters had died in the forests; the pre-war government, in exile in London, was a husk; the Catholic church was a reactionary force. If history had placed Poland in the communist camp, then hope lay only in being its happiest barracks.

Mr Rakowski’s great ambition was to lead the communist party. He eventually became first secretary (as the job was called), but he was last as well as first, acting as the party’s undertaker in 1989 after the round-table talks paved the way for freedom and true independence. Usually celebrated as an unalloyed triumph, that transfer of power had its drawbacks. Privatisation, launched by Mr Rakowski in the dying years of communism, had allowed influential insiders to start turning power into money to safeguard their positions. Dodgy foreign trade outfits, linked with military intelligence, flourished. Party funds that Mr Rakowski had shipped out of the country returned (via a KGB courier) to launch a new post-communist party.

Mr Rakowski’s career fizzled out, fittingly, in an abortive bid for the Polish senate in 2005. His successful opponent was Radek Sikorski, now foreign minister, who had fled Poland as a political refugee from the martial law that Mr Rakowski so steadfastly defended.

Europe View #106

Cleaning up the act

Nov 20th 2008


The EU’s watchdogs stand in need of better watching

The European Union’s thinking about corruption goes roughly like this. It is a problem for governments, chiefly in the new member states. The best way to fight it is by making entry into the EU conditional on progress. That will create the political will which must, sooner or later, bring results.

That approach is not working. Anti-corruption efforts have stalled or reversed. Countries such as the Slovenia, Romania, Latvia and the Czech Republic have closed down or weakened their anti-corruption offices. Efforts by the two newest members, Romania and Bulgaria, are ineffective. Croatia, though gripped by a ghastly outbreak of gangland violence, is moving swiftly towards the EU.


The real story is that the prospect of EU membership encourages elites to pay lip service to the anti-corruption cause, but no more than that. Once the conditionality is gone, the pressure stops.

Efforts to train officials and create the right sort of structures in ex-communist countries seem to have little or no effect. In a phrase familiar from western development efforts in non-European countries, “the solution is the problem”: in other words, the agencies and officials being entrusted with the means to fight corruption are just as bad (weak, corrupt or incompetent) as the people that they are supposed to be policing.

Those who do try to change things risk being fired, not promoted. Corruption-fighters such as Romania’s Daniel Morar or Slovenia’s Drago Kos are relying increasingly on support from outside to hang on to their jobs.

Awareness campaigns are not the answer: the public is already highly aware of the level of corruption, having first-hand experience of it. Such campaigns stoke a sense of futility: Eurobarometer opinion surveys show that easterners are increasingly disillusioned with the ethical standards of their elected representatives and public servants; west Europeans are morose about the same public officials as well as the impact of corruption on the EU as a whole.

These gloomy ideas—as they came to light in a “lessons learned” workshop at the recent International Anti-corruption Conference in Athens—should give EU decision-makers cause for serious thought. One of the organisers, Alina Mungiu-Pippidi, of Berlin’s Hertie School, argues that in some new and future member states corruption is not seen as “a mostly individual infringement of a norm of government fairness and impartiality” but as the opposite: the normal way of distributing public services; to friends, allies, clients and bosses. Using judicial punishments against something that is largely regarded as normal behaviour (at least among the perpetrators) is unlikely to work. Nor are outside watchdogs such as OLAF, the EU’s in-house fraud-busting outfit, likely to get to grips with the problem, given their assumptions of “perfect functioning of the rule of law and of impartial bureaucracy”.

One answer is to set up a much better means of measuring anti-corruption efforts. The existing benchmarks focus on the creation of formal institutions, not on their impact. They also create an unhelpful mixture of smugness in some countries (“What us, corrupt? No way—try next door!”) and paranoia in others (“Why pick on us? What about them? And you?”). It would be good if new yardsticks included all the EU members, not just the new and future ones.

Perhaps the EU needs a commissioner for anti-corruption, or a special envoy, to be directly responsible for following up on commitments made during the enlargement process.

But the best approach is to use the expertise that can be found outside government, particularly in the voluntary sector. The enemy of corruption is public-spiritedness; the stronger that gets, the greater the chances of both constraint and redress. It is as simple—and as complicated—as that.

The World in 2009

My contribution here...

North stars
Edward Lucas, VISBY
From The World in 2009 print edition


Introducing the Nordic Atlantic Treaty Organisation

Designed to keep the Germans down, the Russians out and the Americans in, NATO will celebrate its 60th birthday in 2009 in a sorry state. Its campaign in Afghanistan is not going well. Its members are at odds about how to deal with Russia. But look north and the European security picture will be brightening.

Sweden and Norway, once prickly friends, are striking up a new defence relationship.

This might look odd: Sweden is non-NATO and a member of the European Union; Norway is a keen member of NATO, but has stayed out of the EU. But now those differences are being set aside. Co-operation on airspace monitoring, combined military procurement, joint training and co-ordinated intelligence work will all be bearing fruit in 2009.

Panting to catch up is Finland, neutral in theory but in practice also spooked by an increasingly assertive Russia. That's clever psychology by the Norwegians and Swedes: Finland would resist if it felt pressured to join in. But it hates being left out of anything its Nordic neighbours get up to. For the core three, 2009 will bring calls for higher defence spending and new efforts to extend Nordic security co-operation to other countries.

The two pressing tasks for the new Nordic security partnership (don’t call it an alliance, or you will get a very chilly Scandinavian scowl) are to work out how to help the Baltic states, and to make plans for what they call the “high north”, the energy-rich area that lies between Europe and the North Pole. The Baltic states (Estonia, Latvia and Lithuania) have been full members of NATO since 2004. But the alliance has made no plans to defend them, not wanting to break the taboo on counting Russia as any kind of threat. That will change in 2009, as NATO’s bureaucracy in Brussels works out the practicalities.

But no NATO efforts to defend the Baltics in a crisis make sense without help from Finland and Sweden. As EU members, they will offer political support. And Sweden’s airspace would offer the best way to bring reinforcements if needed. The Baltics will be keen to join in the new Nordic nexus, starting with airspace monitoring.

America is watching the Nordic efforts with increasing interest, as is Canada, once a peace-monger but now deeply alarmed by Russian adventurism in the Arctic. Add Britain for good measure, beef it up a bit, and this could turn into a handy new outfit to deal with the hot­test spots of what some people are calling the new cold war. All it needs is a snappy name. What about the Nordic Atlantic Treaty Organisation?