© REUTERS/Alexey Malgavko

As the coronavirus was ravaging northern parts of Italy in March, Russia was one of the first countries to come to Rome’s aid, with the delivery of military medical aid. The final details were agreed during a phone conversation between Russian President Vladimir Putin and Italian Prime Minister Giuseppe Conte on March 21. The next day Russia’s Ministry of Defense began sending fifteen military transport airplanes to Italy, with 122 personnel and dozens of military vehicles on board. The Russian team consisted of military doctors, virologists, radiologists as well as disinfection experts, while the equipment included mobile disinfection and chemical defense units, and a mobile laboratory. 600 respirators were also delivered.

In Russia the military plays an important rolein handling all types of crises, including health-related ones, so it is not surprising that it was Russia’s Ministry of Defense that delivered the aid to Italy. As this was a military operation, Russian cargo airplanes landed in the Pratica di Maremilitary airport close to Rome, and from there they moved to the Bergamo region that was severely hit by the virus.

Russian aid was composed mostly of elements that could operate without constant cooperation with Italian medical personnel, such as disinfection units. Since they did not have to be integrated into the Italian health care system logistics were considerably easier than if Russia had sent surgeons or nurses, who would have had to work within Italian hospitals.

“From Russia With Love”

The Kremlin made sure to take the opportunity to make a witty gesture by labelling both the aid packages, as well as the military trucks sent to Italy, with “From Russia With Love” signs.

However, within days of the arrival of the first shipments the backlash started. Quoting Italian governmental sources, the influential newspaper La Stampa wrotethat 80 percent of the Russian equipment was useless, and the whole operation was aimed much more at gaining political influence than providing humanitarian aid. An expert at the Rome-based Gino Germani Institute said that some parts of the Russian deliveries could indeed be usefulbut voiced concerns about the possible presence of Russian intelligence operatives among members of the Russian team, who might have wanted to use the operation for intelligence purposes.

On April 1, a Russian medical aid shipment landed on New York’s John F. Kennedy airport. The giant Antonov An-124 cargo aircraft delivered large amounts of medical equipment, including masks, gloves, protective suits, and again respirators. Similar to the aid to Italy, this delivery also took place shortly after the countries’ leaders, Putin and US President Donald Trump, spoke. The Russian aid delivery created a sizeable scandal in the US, partially in the context of the upcoming presidential elections, and also due to the allegations about the role Moscow played in the election of Trump in 2016.

A Similar Pattern

Several problems have since arisen with the Russian aid delivery to the US. In May, the Russian government charged Washington $660,000 for the aid shipment. Furthermore, the Russian transport included equipment that was not of much use in a pandemic, such as military-type gas masks and household cleaning gloves. The 45 ventilators that were delivered also turned out to be essentially useless due to the electricity network voltage difference between Russia and the US.

To make things worse, it later surfaced that some of the ventilators Russia delivered were the Aventa-M brand, which earlier had caused a deadly fire at a St. Petersburg hospital, killing several COVID-19 patients.

From April 3 on Russia started to deliver military medical aid to Serbia, too, with similar equipment to that sent to Italy. Details were again coordinated between the countries’ two presidents. Eleven Russian military cargo planes delivered 87 military doctors and specialists, including infectologists and experts on chemical warfare and disinfection. (As there is an existing multi-layered security and military cooperation between Serbia and Russia, Moscow delivering military medical aid to Serbia is a lot less surprising than it sending such shipments to NATO countries.)

In all three cases, the deliveries followed a similar pattern: Putin made the offer directly to the leader of the given country in a phone conversation, thus partially circumventing traditional diplomatic channels. Once the agreement was reached, details were coordinated by lower level officials; though not always perfectly, as the problems with the shipment to the US revealed.

Hoping for Reciprocity

Concerning the United States in particular, Russia from the very beginning hoped for reciprocity. The Russian president’s spokesperson, Dmitry Peskov, openly declared that the Kremlin hoped for the US would provide Russia with its own medical equipment should Russia need it.

Indeed, there is considerable evidence indicating that in all three cases the dominant motives were political. The primary objective was to get the sanctions against Russia suspended. The deliveries to Italy coincided with a Russian initiativevoiced first at the March 26, 2020 G20 summit. Russia suggested that due to the humanitarian crisis caused by the COVID-19 outbreak, all international economic sanctions should be suspended until the end of the pandemic.

While Russian diplomats referred only to the cases of Iran and Venezuela without mentioning their own country, it was still clear that Russian diplomacy’s intention was to get the sanctions against Russia suspended. On the same day Moscow submitted a similar initiative in the United Nations. Hence, it looks as if Russia tried to use the aid deliveries to get the sanctions lifted by using a humanitarian argument, and Moscow’s own humanitarian shipments were to demonstrate the Kremlin’s good will.  In fact, the way Russia has been employing a universalist, humanitarian-oriented narrative is a good example of how the Kremlin is using Western value-based arguments against Western sanctions. However, Russia’s initiatives at both the UN and G20 were rejected.

Not giving up easily, on April 27, 2020 Leonid Slutsky, Chairman of the Duma’s International Affairs Committee and President of the Russian Foundation for Peace NGO wrote a letter to his Italian counterpart, Vito Petrocelli, President of the Italian Senate’s Foreign Affairs Committee, and a member of the Five Star Movement. In his letterSlutsky asked for Petrocelli’s help in getting all international economic sanctions lifted by putting pressure on Western countries. Slutsky referred to the Russian aid delivered to Italy, and also mentioned the humanitarian situation in Iran and Venezuela.

Propaganda Campaign

Also, Russia apparently intended to demonstrate that it was able to act much faster and more decisively than the EU could. A recent report by the EU vs. Disinfo project pointed out that during and after the delivery of Russian military medical aid shipments to Italy, Russian propaganda accusing the EU of being incapable and helpless was a lot stronger than usual. Meanwhile, the same disinformation outlets portrayed Russia as a responsible power able to provide an efficient reaction to the COVID-19 crisis. Regarding Italy specifically, Russian disinformation outlets particularly emphasized the narrative that “The EU is not helping, but Russia does.” Similar, anti-EU messages were targeted also at the Serbian population, where there is already a certain receptivity for such messages.

While no great success, it is highly unlikely that Moscow will abandon this project and particularly the strategy of employing a humanitarian narrative. The next voting on the extension of the most important EU sanctions is due to take place in September 2020, during the German EU presidency. Until then Moscow is likely to continue its information campaign and other efforts to break up or weaken the European coherence behind the sanctions. The military medical aid shipments constituted a brief albeit spectacular element of this larger campaign.

The post The Political Motives Behind Russia’s Coronavirus Aid appeared first on Berlin Policy Journal - Blog.

© REUTERS/Aly Song

The coronavirus pandemic is a perfect metaphor for the perils of hyper-connection. But it merely draws attention to the already existing retreat from full-on free trade that has been gaining in support and legitimacy in recent years.

Democratic politics and national social contracts are asserting themselves against the laws of comparative advantage—which in any case turn out not to be quite as benign as many economics professors claim. This was brought home to me a few weeks ago, in the very early stages of the crisis, when I heard a very senior member of the British Conservative Party say that he was until recently an orthodox free trader/free marketeer but now regarded himself as an economic nationalist.

As Dani Rodrik, the Harvard international political economy professor and hyper-globalization critic, wrote recently in Project Syndicate: “Rather than putting the world on a significantly different trajectory, the crisis is likely to intensify and entrench already-existing trends… Hyper-globalization will remain on the defensive as nation-states reclaim policy space.”

World trade fell last year by 0.4 per cent. There has been no multilateral trade agreement since 1993. US President Donald Trump wants to bring back some of the US supply chain from China. And this is not a Trumpian eccentricity, most of the US political class is behind him here. It acknowledges that allowing China entry to the global market economy in the belief that it would transform politically (and become less mercantilist economically) is a gamble that failed. There has been technological decoupling too, the world will not end up on single global platforms.

Stock-Up and Re-Shore

Anxieties about climate change have moved up domestic and international agendas. This has created a bias towards localism, reduced travel, and a degree of self-sufficiency especially in food production, making life uncomfortable for unfettered free trade. China’s air quality has improved dramatically in the past few weeks as a result of measures to contain the coronavirus. And more generically Greta is asking whether you really need to eat strawberries in January?

The debate in much of the Western world is not so much about whether the crisis will hasten the partial retreat from liberal globalization that is already taken for granted, but rather what form the retreat will take in different places. Even such an advocate for liberal globalization as France’s President Emmanuel Macron, in a well-received speech to the French public on April 13, talked about “rebuilding France’s agricultural, industrial and technological independence” in the light of the various supply crises the country has experienced.

The response is likely to take two forms. First a focus on the lack of supply in critical areas during the crisis—medical supplies of various kinds (PPE clothing, virus testing materials, pharmaceuticals) and some food and energy essentials—which requires better stock-piling and some reserve capacity in just-in-time supply chains. Second, there is a more radical conversation taking place about strategic industries and re-shoring and the permanent renationalization of some supply chains, especially those dependent on a single country like China.

Diversifying Suppliers

The first is relatively uncontroversial and just a matter of good logistics. Almost all rich countries have been caught with a shortage of supplies of vital protective clothing and equipment for front-line staff. In many cases, they have turned to their manufacturers to adapt production lines. The same is true for some of the materials required for virus testing.

Many countries had acquired a sense of invulnerability over the recent globalizing decades and had lost the folk memory left by two world wars of the need to have security of supply. In the UK, the No Deal Brexit preparations had exposed the British state’s cavalier neglect of prudential housekeeping. Senior civil servants were warning the government that trading on WTO terms was expected to cause a shortage of NHS clinical supplies due to a customs check disruption of a minor administrative kind. This is something that should never have been allowed to happen in the first place, and the coronavirus crisis will presumably ensure that it never happens again.

Governments in the future may require companies to maintain slack in their supply chains and to diversify suppliers. Companies are likely to want to do these things anyway, but governments might choose to provide guidelines for companies as is the case in Switzerland. In the UK there have been longstanding concerns about the lack of oil and natural gas storage. These might also be extended to include vital rare earth minerals.

Limiting Dependence on Trade

The second set of ideas on strategic industries is more controversial and would require abandoning or adapting some of the state aid and anti-protectionism rules of the EU and even the WTO. Of course, nobody in the mainstream is arguing against maintaining high levels of international trade or in favor of radical self-sufficiency. (And some degree of self-sufficiency has always been permitted in farming and the defense sector.)

But when whole industries grind to a halt because of the lack of parts from China or Vietnam, and when many rich countries suddenly discover that they no longer have the capacity for mass vaccine manufacture, more profound questions about acceptable levels of protection for domestic supply in key sectors need to be asked.

In a country like the UK that might include questions about whether we need to maintain at least one volume steel producer? The UK imports a bit less than half its food—is that too much? Modern agriculture now depends on an array of chemicals and fertilizers—should Britain’s last potash mine in North Yorkshire be supported by the Government? What about our dependence on Huawei post-coronavirus crisis?

What Price for Home-Grown?

These are all legitimate questions and they feed into a wider skepticism about free trade that has been growing in strength in recent years. The critics argue that for all of the benefits of international trade, the neat theories of free trade and comparative advantage have been oversold. And they have a point. Free trade, as the economist John Maynard Keynes pointed out, only works if the people displaced from good jobs by imports get equally good jobs elsewhere in the economy. The election of Donald Trump is one kind of proof that this has not been happening.

Hold on, say the free traders. Of course there will be downward pressure on wages and job losses in the short run, but in the long run, the additional purchasing power we acquire from cheaper imports means we can buy other goods and services that will create equally good jobs elsewhere in the economy. Moreover, they say, when given the choice between protecting the Mid-West manufacturing plant and enjoying good quality, cheaper stuff in Walmart, people have voted with their wallets for the cheaper stuff.

But they have not been given a proper choice. Of course, people will always prefer cheaper goods but not at any price. If the choice was between slightly more expensive goods and services and the preservation, or more gradual decline, of a certain agricultural or industrial way of life they might well support such a deal. Indeed, they do so in the EU through the Common Agricultural Policy.

Economics’ Blind Spot

People are well aware that they are both producers and consumers. The end of production is not just consumption, as Adam Smith asserted, it is also about what sort of life you might have as a producer. This is one of those places where economics reveals its blind spot for culture and human beings in the round.

Research also suggests that much trade doesn’t follow any discernible pattern of comparative advantage. The UK economist Graham Gudgin has shown that for countries in North America and Western Europe, joining free trade agreements has caused slower, not faster growth in recent decades. Unlike comparative advantage in natural resources, which is better described as absolute advantage, comparative advantage in manufacturing systems is usually quite marginal.

Much of the comparative advantage of recent decades has been simply taking advantage of lower labor costs in poorer countries. Apple makes iPhones in China which does benefit US consumers and to some extent Chinese workers, but the main beneficiaries are probably Apple executives and shareholders. Bringing some of that production back to the US, even at the cost of slightly higher prices, would not, I suspect, be unpopular.

More National Resilience

In the 19th century, Britain did completely embrace free trade. As the workshop of the world, it was enormously to the country’s advantage to do so, and the British imported most of their food by the end of the 19th century. The result was that they nearly starved in two world wars.

To repeat, nobody sensible is arguing for self-sufficiency or anything like it, but almost everyone is now talking about more national resilience in supply chains and less dependence on China, particularly in technology. And isn’t the logic of comparative advantage to produce specialist monocultures in a world that values diversity in all things?

Most of the economics profession is very uncomfortable with this drift in the argument, but there are some economists and political economists like Dani Rodrik, Ha-Joon Chang, Barry Eichengreen and Robert Skidelsky who have long argued for more democratic caveats to free trade. Rodrik argues that where there is a national consensus about preserving some aspect of an economy or culture, for example French restrictions on Hollywood film imports, these should be allowed and not attract sanctions from international trade regulators.

And a new UK government that is serious about regional and industrial policy, and about shifting more high value economic activity northwards, is implicitly protectionist. It is not going to promote high-tech export industries in Hartlepool and then allow them to be wiped out by imports. It will either protect with subsidies or tariffs. Free trade theory does allow some such protection under the title infant industry protection, which is far preferable to senile industry protection, but EU state aid policy is not friendly to either.

The unlikely bedfellows of populism, environmentalism and technology are all pointing in the same direction—reshoring of some forms of production, a bit more self-sufficiency, more teleconferencing with people in other countries rather than immigration, all in all a retreat from the hyper-globalization of recent decades.

Mitigating the Costs of Free Trade

Free traders will not unreasonably point to some costs. It could mean a bit less growth. Global supply chains are a force for peace, and breaking them up could bring back inflationary pressures. It could also mean that the dramatic fall in poverty in poorer countries will slow or stop. Why not just try to mitigate the costs of free trade better? Subsidize the losers more intelligently? Or, the free trade skeptic might reply, why not prevent there being so many losers in the first place?

As Barry Eichengreen says, the problem with the global economy is not a lack of openness but a sense that “the nation state has fundamentally lost control of its destiny, surrendering to anonymous global forces.” And as Hans Kundnani put it in a recent issue of The Observer newspaper, it is time the UK government adjusted its rhetoric and stopped its paens of praise to free trade. Part of the point of Brexit is to put politics before economics, democratic legitimacy before economic growth.

Of course, we still want lots of trade and sustainable growth but at less cost to other things that people hold dear. A new rhetoric is needed that combines an appropriate level of openness with a sense of national control. An economic nationalism that liberals can feel comfortable with.

N.B. A shorter version of this article was first published by UnHerd.com.

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© REUTERS/Hannah McKay

Brexit was always an emotional rather than instrumental venture. It was based on a yearning for national sovereignty and a nostalgic view of the United Kingdom’s role in the world. Its biggest weakness, however, lies elsewhere.

Its architects could not make up their mind about which of two visions they were projecting. Was Britain going to become Singapore-on-the-Thames, a low-tax, low-regulation island of futuristic start-ups that was open to all-comers, as long as they had the skills and the thirst? Or, unshackled from the European Union, was it going to do more to protect its own, to give the state more of a say in determining and equalizing outcomes? The likes of Boris Johnson and Michael Gove—the leaders of the 2016 Leave campaign and presently prime minister and minister for the cabinet office respectively—never resolved this dilemma, because they knew they couldn’t, and because they wanted to have their cake and eat it.

June Is the Real Deadline

Now, with COVID-19 tearing apart lives and communities, exposing the lack of planning, strategy, and investment in the National Health Service and decimating the economy, logic might dictate that the government let up in its determination to meet the December 31 deadline for the transition period out of the EU. Not a bit of it, say ministers, displaying the same hubris that led them initially to dismiss the coronavirus as a serious threat to the UK.

According to one adviser, those around the prime minister believe they can still make the deadline—even though that deadline is not actually the end of the year, but the end of June. As the Withdrawal Treaty states, any request for a one- or two-year extension must be submitted by then.

With the two men at the heart of the negotiations, the EU’s Michel Barnier and the UK’s David Frost, having previously been struck down by the virus, and with discussions only now resuming by video link after a sizeable pause, the chances of any meaningful agreement in weeks are negligible at best.

The aim is a free-trade agreement, with a zero-quota, zero-tariff deal similar to the one the EU agreed with Canada (after years of talks). They also have to tackle aviation, nuclear energy, international security, and the small but politically vexed question of fisheries. Thus, the timetable was always going to be ambitious. When the first round of negotiations began, the two sides admitted that they faced “very serious divergences.”

Johnson’s Corona Setback

Bizarrely, given how much of a mess his government has made of its response to the pandemic, Johnson is politically unassailable. His 80-seat majority in the House of Commons gives him legislative carte blanche. His opinion poll ratings are sky high, boosted by a sympathy vote after he was admitted to hospital with the coronavirus. The Labour Party’s new leader, Keir Starmer, will provide a much more forensic opposition than Jeremy Corbyn ever did, but he will take some time to make a mark in this “wartime” setting.

Longer term, Johnson knows that COVID-19 has delivered a setback to his plans to remake Britain in his image. He knows that he cannot opt for a low-tax regime, such will be the UK’s indebtedness. He also knows that he will not be able to lavish money on his pet projects. Thus, there will be no Singapore-on-the-Thames nor will there be a great social transformation.

Yet, as one former aide to Theresa May points out, Johnson has nowhere else to go. “He has to make this new political geography work. He has to make this realignment permanent. They will be desperate for the budget not to be swept away.” The advisor was referring to the so-called Red Wall, the constituencies in the North of England and the Midlands that had been traditionally Labour, but were won over to the Conservatives in last December’s general election because of their twin pledge to “get Brexit done” and to invest more in their regions.

On his victory, Johnson thanked those voters for “lending” their support, knowing that they could easily transfer it back if they felt the promises had been broken. Hence his visceral reluctance to “do a May” on Brexit, to follow his predecessor in delaying the departure process, irrespective of the circumstances. In addition, if he is unable to make as much of a difference in domestic policy as he had hoped, then Brexit becomes even more talismanic for him.

Oven-Ready or Not

When Johnson declared during the election campaign that a deal “was oven-ready,” it seems he meant it. Or rather he meant that he believed the country was ready for either leaving without a deal or with the most minimalist of deals, both of which translated into the hardest of Brexit and future trading on World Trade Organization terms—plus a special protocol for Northern Ireland. He didn’t even see the point of an accord on security matters or on aviation.

The plan was, literally, to get it all done as soon as possible, both the January 31, 2020, departure and the December 31, 2020, end of transition. The idea was to absorb the economic shock early in the cycle of the parliament.

The British economy might have been just about robust enough in normal times, but now? The counterargument is that, given that a post-COVID-19 recession (or depression) will last years and not months, a short-term delay will not make much difference. That is a cavalier approach—but Johnson is a cavalier politician.

Downing Street has other rhetorical weaponry to deploy. First of all, it can argue that the UK will be saving money by not paying any more into Brussels’ coffers. That is correct, in a narrow sense. It can also point to the fact that the EU has hardly covered itself in glory during the pandemic, closing borders, slapping bans on the export of vital equipment even within Europe, fighting over coronabonds, and the richer North refusing to help out the poorer South, as happened during the eurozone debt crisis a decade ago.

At the same time, the UK cannot point to a single area where being outside of the EU’s institutional framework has helped it plan logistics and purchase equipment to tackle the virus.

U-Turn in the Offing?

Johnson, like Margaret Thatcher, manages the twin feat of sounding unyielding while being perfectly willing to compromise or make a U-turn. The easiest way for him to agree to a delay is if both sides agree to it jointly. This would require Barnier’s agreement as the current requirement is a request coming from London. Any joint agreement could be dressed up as technical and purely in light of the COVID-19 crisis.

Already ultra-Brexiteers are crying foul. They started to sense something was afoot when a former Tory MP, Nick de Bois, who had served as chief of staff to Dominic Raab, now the Foreign Secretary, penned an opinion piece in the Sunday Times newspaper in early April explicitly calling for a delay. “First, it would be incomprehensible to many members of the public if this government devoted time and energy on these talks until the pandemic was under control. The controversy over testing policy and logistics illustrates how intense government efforts must both be and seen to be,” he wrote. “Second, it will strike business, already on life support, as utterly illogical and inconsistent with the government’s efforts to support business, to impose the prospect of greater disruption by not extending the transition period.”

Nigel Farage, who since the December 2019 election has fallen off the political radar, sensed an opportunity when the question of a delay was first mooted. “We need to be free completely of the EU so that, as we emerge from the crisis, we are free to make all of our commercial and trade decisions,” he told his dwindling band of supporters. Tory MPs and former ministers are making similar noises.

The more “Remainers” or “soft Brexiteers” advocate a delay, the harder it will be for Johnson politically. In any case, the final decision will be guided by public opinion. Polls currently show a small majority supporting a delay, although that number drops sharply among ardent “Leavers”. Most floating voters were relieved to have forgotten about Brexit and have little desire or cause to think about it during the pandemic.

Stretching the Truth

Downing Street has already been stung by well-sourced media accounts of how Johnson paid little attention to the coronavirus outbreak during the crucial five weeks from the end of January (while the Germans and others were frantically trying to prepare themselves). He was too busy celebrating “Brexit day” and planning his assault on institutions from the BBC to the civil service. He knows the public will not tolerate another “distraction”.

In the end, if there is no trade deal, and if the UK leaves at the end of the year in the midst of post-corona economic carnage, Johnson will have made his decision on a precise calculation. One of his considerations will be this: voters, no matter how much they suffer, would not be able to disaggregate his move. He could say that Brexit had nothing to do with it. He could lay the blame entirely on the pandemic. It wouldn’t be the first time in his career he had—to put it ever so politely—stretched the truth.

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© REUTERS/Edgard Garrido

With much of the world being told to shelter in their homes, air pollution has fallen so dramatically that satellites can pick it up from space. Cleaning up the air in China has likely saved tens of thousands of lives. The people of New Delhi—some of whom wore masks before the pandemic to keep out the smog—haven’t seen such a clear blue sky in decades. The lockdown has cut energy use and thus carbon emissions, too: Germany produced more than half of its electricity from renewables for a three-month period for the first time ever.

This is good news at a bad time. Unfortunately, though, bringing the world to a halt is not a great model for averting climate change. Human activity is responsible for greenhouse gas emissions and air pollution; if you indiscriminately restrict human activity, you reduce both. Put another way, if everyone who owned a red car were thrown in prison, carbon emissions would fall, and there would be fewer deaths from car accidents. It would still be, it is fair to say, a very stupid idea.

The main takeaway from this (temporary) reprieve for the climate is that individual action and self-restraint is a sideshow to the main event of decarbonization.

Not Even If We All Stay Home

It’s hard to say by how much the coronavirus will reduce global CO2 emissions in 2020—these days, economic forecasts from just a few weeks ago already look ridiculous. But the best early estimates are of a huge drop.

Forecasters had expected global carbon dioxide emissions to rise by about one percent this year in the absence of a pandemic. Zeke Hausfather and Seaver Wang of the Breakthrough Institute estimated in late March that emissions might fall by one or two percent “assuming the global economy recovers in the third and fourth quarter.” Rob Jackson of the Global Carbon Project told Reuters he wouldn’t be shocked to see emissions fall by five percent. Simon Evans of Carbon Brief thinks emissions might fall by 5.5 percent this year. In the most pessimistic economic forecasts, GDP collapses to such an extent that emissions could fall by as much as ten percent.

Let’s say emissions decline by six percent. That would be unprecedented in modern times. The last time emissions fell year-on-year was during the global financial crisis, when they declined by 1.2 percent from 2008 to 2009. Energy crises and recessions have reduced emissions several times in the past fifty years, notably 1980–81 and 1991–92, but never by six percent. You have to go back to the first half of the 20th century to see changes this dramatic: 1918–19, for instance, emissions fell by about 13 percent as the Spanish flu pandemic struck a world still reeling from World War I, according to Glen Peters of the research center CICERO.

A decline of six percent would also be insufficient to limit global warming to 1.5 degrees Celsius, even if this were the sort of sustainable change that people could repeat again and again, locking themselves down each spring. In order to reach that probably unattainable Paris Agreement target, the UN says, global emissions need to fall by over 7 percent each year for the next decade.

The arithmetic is dispiriting. The fact that an extraordinary, near-global temporary lockdown probably won’t do enough this year to flatten the emissions curve, if you will, should put into perspective the individual choices people make about taking a taxi instead of the subway. During the first full month of the lockdown, despite being trapped in their homes, the Chinese emitted three-quarters as much CO2 as usual. As long as most laptops and heaters still run on fossil fuels, emissions will be too high.

However long the lockdowns last, the atmospheric concentration of carbon dioxide will continue to rise. Climate scientists liken the atmosphere to a bathtub with a tiny leak: even turning the tap from full blast to a steady flow won’t stop the water level from rising. And this pandemic is absorbing money that countries might have used to fund decarbonization.

Beware of the Rebound

What’s more, after each previous downturn, emissions came back with a vengeance. 2010 saw the highest total annual growth in emissions ever recorded as governments injected money into their wounded economies, wiping out the climate gains (or rather emission reductions) of the previous year.

China in particular has financed huge expansions of carbon-intensive projects in response to economic crises. While these sometimes make it easier to cut emissions later on—China’s 2011–15 Five Year Plan expanded high-speed rail, for example—policymakers are primarily concerned to get the existing economy going after a recession rather than avert relatively distant threats. The 2011 Chinese stimulus also included massive spending on airports and coal-fired power plants.

There are signs that this pattern will repeat itself this time around. The Chinese government granted more permits for coal-fired power plants in February and March 2020 than in the same period last year and is reportedly considering relaxing emissions standards for automobiles. Already opposed to carbon regulations, the Trump administration recently relaxed US auto standards as well.

In Europe, neither side of the climate debate is wasting a good crisis. After all, this is an excellent chance to call once again for long-desired policies. The president of the German car lobby VDA, Hildegard Müller, wants Germany to relax its emissions standards, too. “This not the time to think about further tightening of the CO2 regulation,” she said. The industry lobby Business Europe has called on the EU to postpone “non-essential” climate initiatives, and Czech Prime Minister Andrej Babis believes “Europe should forget about the Green Deal now and focus on the coronavirus instead.” On the other hand, environment ministers from thirteen member states have written an open letter urging the EU to adopt a green recovery plan. For now, all of it has to take a back seat to the the urgent public health crisis and the bitter debate about debt mutualization.

Behavioral Change

A lockdown is very different from a typical recession, so some environmentally friendly behavioral changes will endure after the pandemic. More companies will allow and enable their employees to work from home. Some people will find that they are quite happy going to fewer conferences abroad. When the cars are back on the roads, the people tweeting incredulously about the clear skies above Los Angeles will have a new understanding of how dirty the status quo really is.

Perhaps, when it’s over, modern societies will have a new appreciation for their capacity to take collective action for the greater good and especially for the sake of certain vulnerable generations—or will at least support politicians who want to do the climate equivalent of expanding national stockpiles of protective medical gear.

But there’s also a risk that disaster fatigue sets in, that more people prefer to focus on fun, friends, and family for a while. Who could be blamed for skipping the next in-person Fridays for Future protest to fly off for a holiday?

Only one thing is guaranteed: on the day that a vaccine for the coronavirus is widely available, the only way to avoid climate catastrophe will be to make a collective effort to decarbonize the energy system. Just like it was before.

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© REUTERS/Maxim Shemetov

Ironically, even the liberal opposition has been calling on the Kremlin to introduce the state of emergency, but with no effect: Russia’s government continues its muted response to the virus that spreads across the country. Indecisiveness and confusion in the Kremlin has not only confirmed the inability of Russian President Vladimir Putin’s personalized system to effectively react to the unpredictable circumstances. We also see the true nature of Putin’s governance style: his attempts to avoid responsibility and his distancing from unpleasant problems. Instead of using the crisis to shift toward a more restrictive rule, Putin has chosen “wait and see” tactics. He even postponed the national vote that has to legitimize his indefinite rule which were supposed to take place on April 22.

The most likely explanation: an introduction of emergency rule in Russia would mean a reconfiguration of power within the Kremlin and new political regime that Putin apparently is not yet ready to accept. Putin’s hesitation and foot-dragging could be explained above all by the belief that Russia will escape the dramatic spread of virus. (On April 7, Russia officially had a total of 7,497 cases, with 58 fatalities, according to data collected by Johns Hopkins University.) The seriousness of the pandemic, often described as “just a form of influenza,” has been grossly underestimated. And the authorities hoped that Russia’s economy would not be affected dramatically because it is more isolated than those of Western countries. Also, the Kremlin has built a financial “nest egg” for rainy days, with foreign-exchange and gold reserves presently around $570 billion. The political establishment until recently persuaded itself that moderate measures against virus spill-over were enough.

In addition, there’s a Russian habit of concealing bad news from the top and of attempting to create a glossy image of reality. Putin’s plan to celebrate the 75th anniversary of victory in World War II—the preparation for the May 9 parade continues at full speed—also played their role in the Kremlin’s attempt to minimize the hazards of covid-19.

In his long-delayed address to nation on the coronavirus crisis on March 25, Putin decided to refrain from introducing stringent measures against the pandemic. He did not adopt adequate measures to support the population segments that are losing their jobs, small and medium businesses, and big companies that will suffer from the pandemic. The measures announced so far have been piecemeal and are lagging behind those introduced by other states. Russian observer Sergei Shelin, expressing the dominant mood in Moscow, wrote on March 27: “The president’s ‘anti-coronavirus package’ has been prepared in haste with reasonable, opportunistic, and even absurd measures mixed together… There’s been an atmosphere of irresponsibility and chaos.” One could add a total disrespect for the human health and life as well as a fear of undermining the optimistic picture of Russia produced by Kremlin propaganda. In comparison, the Russian measures look meager:  the United States has announced to spend a sum equivalent of 9 percent of its GDP to fight the pandemic, the United Kingdom 14 percent, and Germany more than 20 percent. In contrast, Russia will only use means equivalent to about 1.3 percent of its GDP.

Moscow’s Mayor: Crisis Fighter

A week ago, however, Moscow finally woke up to the grim reality: the pandemic has started its deadly marathon across Russia. On March 30, Russia sealed its borders. Moscow Mayor Sergey Sobyanin ordered an indefinite city-wide quarantine (the self-isolation order applies to all residents regardless of age). Prime Minister Mikhail Mishustin imposed the same restrictions in Russia’s regions.  On March 31 Russian lawmakers swiftly passed legislation threatening severe punishment—including up to five years in prison—for people convicted of spreading false information about the coronavirus. The ever-bustling Russian capital has been suddenly transformed into a post-apocalyptic sight. Precious time had been lost, however.

Moreover, the Kremlin continued to take a back seat. As Putin’s press secretary Dmitry Peskov announced on March 30, “The state of emergency is not called because all necessary measures are being undertaken.” It seems now that the Kremlin’s strategy is based on several components: achieving “herd immunity”; attempting to force business and the middle class to carry the financial burden; relying on the population’s self-isolation, controlled by the authorities. However, even pro-Kremlin analysts think this approach is not any more satisfactory.

On April 2, Putin again addresses the nation. But he offered only the extension of Russia’s nationwide “non-working week” until April 30. Moreover, the Kremlin delegated the decision-making power on anti-coronavirus measures to the regional authorities. It looked as if the Kremlin was more afraid of introducing tough quarantine measures than of the coronavirus itself.  As one of the regional officials commented, “They even try to avoid the word ‘quarantine’.”

The Absent Leader

Meanwhile, Putin continues to shy away from publicity. Moscow Mayor Sobyanin (and not Prime Minister Mishustin!) was designated the lead figure organizing the coronavirus defense (Putin gave him the job of heading a special working group in the State Council for combatting the pandemic). But the state apparatus and society at large continue to wait for the Kremlin to define the mechanisms of fighting the virus. Having no definite agenda the police in the Moscow region introduced the curfew and then stopped it.

The speculation is that Mishustin and Sobyanin are hoping to use this crisis as a springboard if not to the status of Putin’s “successor” than at a minimum to that of his “number two.” However, the Russian system of personalized power has no place for the role of “successor” who could undermine the omnipotence of the only national leader. Meanwhile, the Russian system oriented toward solving bureaucratic tasks demonstrates its inefficiency in an emergency situation. It can  crack down on the protests, but is unable to tackle national disasters. It is quite a paradox: an authoritarian regime unable to successfully implement authoritarian measures!

Already, Putin’s popularity has fallen victim to the pandemic. Only 48 percent of respondents supported the idea of “Putin forever” in a Levada poll at the end of March, while 47 percent disagreed with this. Every second respondent preferred “a rotation of the authorities and the emergence of the new leaders”; only 37 percent of respondents opted for “stability and the same politicians.” Given that already a quarter of the population has to struggle to feed itself, there is much potential for disaffection growing for which there are no legal channels of articulation. The fight of millions left without jobs and financial help may well create “Titanic atmosphere” in Russia, pregnant with mass social turmoil.

Formidable Challenges

Russia will follow likely follow the Chinese pattern of restricting the freedom of information. However, the Russian system is lacking a uniting idea, basically relying on predatory clans. With Putin’s authority fading, there will be serious difficulties securing societal obedience even under threat of repression.

Systemic conundrums have become apparent, too. Putin will have to think about how to revive Russia’s ravaged economy. He will also have to balance Russia’s domestic insulation with its participation in the global politics, which he is eager to continue. Putin will try to return to the international scene as the responsible leader accepted by the West, and not only by China. Of course, in case of domestic disorder he may try to switch to the real “fortress Russia” mode. But this move will hardly be supported by the part of the Russian elite that has become globalized and personally integrated into the West.

The challenges Russia is facing are formidable. Depleted health care systems, corrupted authorities, an atomized and demoralized society, the state’s inability to help the most vulnerable segments of society—all that mean that Russia is moving toward an existential crisis. How Russia will respond to it will form its future destiny.

This article is based on a DGAP Study Group: Russia presentation delivered on April 7, 2020.

The post Russia’s Coronavirus Drama appeared first on Berlin Policy Journal - Blog.

“We are at war,” Emmanuel Macron declared on March 16, announcing a nation-wide curfew. As in war, France’s president wants to mobilize the whole nation to achieve one goal: defeating the virus.

Macron even invoked the spirit of the Union Sacrée—the truce of all French political parties after Germany declared war on France in 1914—and suspended the adoption of the pension reform that recently caused the greatest social fracture in decades.

In times of crisis, the French are looking for a strong leader. More than 35 million tuned into Macron’s speech, over half the population of France. The 2018 world cup final of Les Bleusagainst Croatia attracted 26 million viewers. And when Chancellor Angela Merkel addressed the German nation on March 18, 25 million watched.

And the dramatic speech worked for Macron. Polls show that 76 percent found him convincing. Parisians are staying at home in their often tiny apartments. My flat lies in Europe’s second most densely populated neighborhood (52,218 persons per square kilometer). For the first time since moving here I can hear the birds chirping.

War Economy

Macron’s war analogy is shocking at first glance. But it is the right frame of thinking, especially for the economy.

Traditional war economies share three characteristics: First, government spending explodes as the state funds its war effort. Second, the goal of monetary policy becomes the financing of the state. Third, economic policy shifts to the left as governments must project hope of a better future to keep morale high.

In his speech, Macron ticked all three boxes: money should be no object in Europe’s fight against coronavirus. After the European Central Bank presented its first batch of meagre crisis measures on March 12, the Élysée immediately criticized the ostensibly independent central bank saying monetary policy had to go way further.

To the French Macron promises a strengthened welfare state, a more sovereign Europe, and a rethink of globalization at the end of the crisis. “The day after, when we will have prevailed, won’t be like the day before. We will be stronger morally, we will have learned, and I will draw the lessons, all the lessons,” the president said with determination.

Europe-Building

Finally, wars have often served as the catalyst for either nation-building or political disintegration. To stave off collapse, in times of extraordinary stress, heterogenous communities need to learn to trust each other, cooperate outside familiar structures and design new institutions—or fail.

In this context, the president of the Grande Nation made Europe a key theme in his first televised coronavirus address, stressing that this is a common struggle to be faced as “Europeans”—“the virus has no passport,” Macron said. Badly affected regions should be isolated, and it should be Europe’s borders rather than national borders that should be closed. “It is at this level that we have built our freedoms and liberties,” the French president emphasized.

And to get Europe’s war economy going, Macron’s eurozone vision now stands a chance of being realized. In a crisis, the tables turn in favor of integrationists. Saying “no” to any form of fiscal integration doesn’t work anymore for the “frugal” countries if they don’t want to put the currency union in peril. As in the 2010-2014 eurozone banking and sovereign debt crisis, when Berlin had to accept the setup of the EU’s bailout funds. Alongside Rome, Paris now proposes issuing “corona bonds” to coordinate the funding of Europe’s fight against the virus.

Still, so far the coronavirus crisis is yet another example of Macron trying to take European leadership and making bold proposals that lead nowhere because Berlin resists them. Furthermore, Macron is getting caught up in nationalist reflexes.

In her address to the nation last week, Merkel didn’t mention Europe once. When asked during a press conference about fiscal solidarity in the EU, the chancellor was evasive, saying cryptically, “We have to take care that we are now not institutionalizing something that has always been demanded by some.”

And while Macron celebrated the German federal states of Baden-Württemberg and Saarland taking on corona patients from French Alsace, the epicenter of the French Coronavirus crisis, Merkel’s not so subtle social distancing from her neighbors perplexed many in Paris once again. In fact, there is frustration at the level of disinterest in Europe-building.

France First?

That Europe is currently practicing a danse macabre is not all Berlin’s fault. It was Paris that fired the first shot at undermining the EU’s core, the single market. On March 3, Macron announced the requisition of all medical protection equipment in France. This prompted Berlin to ban all exports of medical equipment the next day.

Germany’s health minister, Jens Spahn, said on March 6 that the export ban could be lifted if an EU-wide ban was agreed. His French counterpart defended the requisition the following day, arguing it prevented masks being given to the highest bidder and that Brussels should coordinate the distribution of stocks. However, it took another ten days before Paris and Berlin agreed to drop their export restrictions to fellow EU member states on March 16.

It’s not only future historians who will quibble over who is responsible for this blunder. Austrian Chancellor Sebastian Kurz said pointedly, “We see in Europe that solidarity doesn’t function when push comes to shove. There will be a lot to discuss when this over.”

It’s the Narrative

In today’s Italy, Lega leader Matteo Salvini is successfully pushing his narrative of Europe’s abandonment of Italy. The mask export ban will leave a deep scar in Italy’s collective memory. Italian social media is rife with posts arguing that a statement by the European Central Bank president, Christine Lagarde, to a Handelsblatt journalist that the ECB should not put a tab on Italian government bonds yields is part of a deliberate plan to bring Italy to its knees to benefit Merkel. Italian mainstream papers decry Lagarde’s “anti-Italian attitude” and eagerness to please Berlin.

The health crisis has already morphed into an economic crisis. To prevent it from becoming a European political crisis, Merkel and Macron must suppress their nationalist instincts and express their joint commitment to the currency union, the single market and those EU members like Italy with less fiscal leeway to fight the virus. Italians needs to hear this, so that Europe stands a chance of regaining their trust.

The post Pariscope: Imagine Macron Declares War and No One Shows Up appeared first on Berlin Policy Journal - Blog.