Skip to main content

Balance of Power

The international system is facing a period of increasing upheaval. The duopoly of power: the Soviet Union facing the West, has given way to a radically different order. Initially the emergence of a single "hyperpower" -the United States- was suggested to be "the end of history", or rather the end of ideological struggle. However, it is now clear that the United States is not as preeminent as it had seemed.

The shock of September 11th revealed that critical challenges now came from outside the state system- from small and ruthless groups with a seemingly limitless appetite for death on an industrial scale. Meanwhile, the economic strength of the US has been challenged- first by China and now, increasingly, by India. As other powers emerge: Brazil and a resurgent Russia, it is clear that the old certainties are giving way to new uncertainties.

In this world of more even wealth and greater competition, the position of Europe has grown ever more uncertain. Initially Europe seemed to be the big winner of the end of the cold war. From being the cockpit of the cold war conflict, Europe has reunited, with the institutions of the European Union and NATO gaining almost all of the former Soviet occupied states as new members. Yet, this superficial success masks a great crisis.

The United States is challenged by the new balance of power, the European Union is not merely challenged, it is threatened. The economic structures that were created in the post war world are now threatened by competition and by demographics. Instead of funding savings, the socialist systems created in the 1950's and 1960's chose to fund welfare through government expenditure- a mistake that has had profound implications for wealth of all subsequent generations. Indeed the creation of comprehensive social protection now threatens European competitiveness to such an extent that it is difficult to see how it can be maintained in its current form at all.

For the Conservatives, the answer is clear- to cut ties with the European Union and to forge a new niche as a dynamic, privateer economy off shore of the lumbering socialist behemoths of the European Union. The problem, although British demographics are OK, and helped considerably by the relatively open door that the UK has allowed to the workers from the new EU member states, is that the UK is not particularly competitive compared even to many EU economies. The disruption that leaving the EU would cause- irrespective of whether the EU takes punitive action against the UK, which would certainly be a possibility under some circumstances- would create so much uncertainty as to undermine the British investment cycle, and reduce the efficiency of the British economy still further.

Thus, the UK will still need to negotiate its position with the European Union, and ultimately the UK can not separate its own destiny from the success or failure of the European economy, with which it conducts 70%-80% of its trade. This fundamental reality may be unwelcome in certain quarters, but Britain is not isolated within the EU. The Nordic countries and most of the new members are firmly on the side of a less intrusive, more Liberal European Union. It is now up to British diplomacy to make the best of a potential reforming group- one that may yet include Germany, the swing state of the EU- in order to put forward a new agenda for the European Union. This agenda must recognise the scale of the crisis that faces the continent and begin the process of radical reform that can maintain Europeans in the face of the increasing challenges from the rising global powers of Asia and America.


Popular posts from this blog

Concert and Blues

Tallinn is full tonight... Big concerts on at the Song field The Weeknd and Bonnie Tyler (!). The place is buzzing and some sixty thousand concert goers have booked every bed for thirty miles around Tallinn. It should be a busy high summer, but it isn´t. Tourism is down sharply overall. Only 70 cruise ships calling this season, versus over 300 before Ukraine. Since no one goes to St Pete, demand has fallen, and of course people think that Estonia is not safe. We are tired. The economy is still under big pressure, and the fall of tourism is a significant part of that. The credit rating for Estonia has been downgraded as the government struggles with spending. The summer has been a little gloomy, and soon the long and slow autumn will drift into the dark of the year. Yesterday I met with more refugees: the usual horrible stories, the usual tears. I try to make myself immune, but I can´t. These people are wounded in spirit, carrying their grief in a terrible cradling. I try to project hop

Media misdirection

In the small print of the UK budget we find that the Chancellor of the Exchequer (the British Finance Minister) has allocated a further 15 billion Pounds to the funding for the UK track and trace system. This means that the cost of the UK´s track and trace system is now 37 billion Pounds.  That is approximately €43 billion or US$51 billion, which is to say that it is amount of money greater than the national GDP of over 110 countries, or if you prefer, it is roughly the same number as the combined GDP of the 34 smallest economies of the planet.  As at December 2020, 70% of the contracts for the track and trace system were awarded by the Conservative government without a competitive tender being made . The program is overseen by Dido Harding , who is not only a Conservative Life Peer, but the wife of a Conservative MP, John Penrose, and a contemporary of David Cameron and Boris Johnson at Oxford. Many of these untendered contracts have been given to companies that seem to have no notewo

Bournemouth absence

Although I had hoped to get down to the Liberal Democrat conference in Bournemouth this year, simple pressure of work has now made that impossible. I must admit to great disappointment. The last conference before the General Election was always likely to show a few fireworks, and indeed the conference has attracted more headlines than any other over the past three years. Some of these headlines show a significant change of course in terms of economic policy. Scepticism about the size of government expenditure has given way to concern and now it is clear that reducing government expenditure will need to be the most urgent priority of the next government. So far it has been the Liberal Democrats that have made the running, and although the Conservatives are now belatedly recognising that cuts will be required they continue to fail to provide even the slightest detail as to what they think should guide their decisions in this area. This political cowardice means that we are expected to ch