Peter L. Berger's Blog, page 183

Is Pakistan Pulling China into Afghanistan?

Senior U.S. intelligence officials are warning that the India-Pakistan rivalry could pull China into Afghanistan. First Post has the highlights:

“Pakistan is concerned about international isolation and sees its position through the prism of India’s rising status, including New Delhi’s expanded foreign outreach and deepening ties to the US,” said National Intelligence Director Dan Coats…

“Pakistan will likely turn to China to offset its isolation, empowering a relationship that will help Beijing to project influence in the Indian Ocean,” the Dawn quoted Coats as saying. […]

“Pakistan desires for Afghanistan some of the same things we want: a safe, secure, stable Afghanistan. One addition there is no … heavy Indian influence in Afghanistan,” said Defence Intelligence Director Lt General Vincent Stewart.

“They view all of the challenges through the lens of an Indian threat to Pakistan. So they hold in reserve terrorist organisations… so that if Afghanistan leans towards India, they will no longer be supportive of an idea of a stable and secure Afghanistan that could undermine Pakistan’s interests,” the General said.

The basic geopolitical dynamics here are hardly new: Pakistan has long worried about India’s influence in Kabul, and not without reason. William Dalrymple’s 2013 essay on the three countries’ “deadly triangle” lays out a fuller picture. China is the fresh ingredient, however, and its role is going to be closely watched by an Indian leadership already wary of its growing involvement in South Asia.

As the United States ponders sending an additional 5,000 troops to the country—a number that increasingly seems perfectly calibrated to do very little to tip the balance decisively—the situation on the ground could be getting messier still.

The Placebo Politics of Paris

In his broadside against the Trump administration’s withdrawal from the Paris climate accord, Jonathan Chait makes an observation that is difficult to dispute, even among Paris skeptics (and regular readers of Via Meadia know that we have not been cheerleaders for the agreement): Right-wing opposition to the accord is grounded as much in a desire to explode perceived progressive smugness as it is in specific policy considerations.

There is far more at work in conservative opposition to decarbonization than the hidden hand of oil and coal; indeed, many fossil-fuel companies prefer the predictability of the Paris agreement to policy that jerks back and forth every time the presidency changes hands between the parties.

The dominant spirit of conservative thought — or, more precisely, verbal gestures that seek to resemble thought — is not even skepticism but a trolling impulse. The aim is not so much to reason toward a policy conservatives would favor as to pierce the liberal claim to the moral high ground.

Chait describes this newly nihilistic impulse on the right as irresponsible and destructive. And indeed, it usually is. The Republican Party and the United States would be in a better place if conservative politics offered more substantive policy solutions and less tribal signaling. (Ditto for the progressive left). But the truth is that if there is a deserving target for the conservative “trolling impulse,” it is the Paris accord. The process that produced the agreements was so long on preening and self-congratulation, and the agreements themselves so hollow and lacking in actual policy content, that a simple “no” for the sake of making a pompous and failed establishment uncomfortable is not the worst thing in the world.

Like many Trump-era debates, the President’s actions on Paris are best understood through the lens of what we (following Tyler Cowen) have called “placebo politics”—elevating or reducing the status of this or that group through symbolic actions that won’t have much if any material impact on policy. President Trump’s repudiation of the agreement falls into this category: It delights his nationalistic base and sends his internationalist-minded critics into paroxysms of rage and despair—all without actually doing anything, because the Paris agreement consists simply of voluntary, unenforceable emissions pledges that are already being flouted.

Of course, the fact that the agreement is symbolic could be an argument for staying in, rather than getting out. As the MSNBC anchor Chris Hayes tweeted in lambasting Trump, “The agreement quite literally imposes nothing!!!” Honest champions of the accord admit that it may be more or less ineffectual when it comes to solving climate change, but argue that leaving would impose costs on American credibility. This is not an unreasonable argument; it may even be vindicated in the wake of Trump’s decision. But it shows that the debate essentially comes down to which kind of symbolism you prefer—the symbolic affirmation of international cooperation and environmental leadership or the symbolic affirmation of the U.S. working class at the expense of the global elite whose “polite fictions, agreed-upon conventions and hypocritical pretenses” seem in many arenas to be unraveling.

The drama of the Paris climate accords, then, amounts to a portrait in miniature of our political moment. A smug establishment indulged in vacuous, photo-op politics that doesn’t get us any closer to solving our major problems but pleases donors and nonprofits and makes the great and good feel even better about themselves. An angry coalition of people who felt that their status was declining reacted against this half-hearted phoniness by indulging in a placebo politics of their own—raising their own status by nihilistically tearing down the other side. Trump’s decision today doesn’t make the U.S. better off, but it probably doesn’t make us much worse off, either.

The Sound and Fury of Trump’s Paris Pull Out

Donald Trump just announced that he’ll be pulling the United States out of the Paris climate agreement, but said he’ll be looking to renegotiate a re-entry, or even an entirely separate deal. This retraction has two motivations, according to the President: first, a refusal to adhere to America’s Intended Nationally Determined Contribution (INDC), our plan to reduce greenhouse gas emissions; and second, a repudiation of the Green Climate Fund (GCF), the central financing mechanism designed to help the developing world mitigate and adapt to climate change with money sourced from the developed world.

Let’s take these two withdrawals in turn. The decision to ignore America’s INDC doesn’t itself require the U.S. to back out of the Paris agreement. The deal (which, let’s recall, wasn’t a treaty) lacks even the barest whiff of an enforcement mechanism, so it would have been easy to stay “in” while ignoring our targets. Alternatively, the Trump Administration could have attempted to lower our emissions reduction targets to something they deemed more reasonable (because, as per the Paris agreement, countries set their own targets). Why, then, did the White House just pull the rip cord?

The answer to that lies in the details of Trump’s second problem with the Paris treaty, the GCF. Trump framed his entire withdrawal speech in the general terms that have defined his foreign policy approach thus far: an emphasis on putting “America first.” It was the “unfair” GCF, not the INDC emissions targets, which apparently forced the President’s hand on withdrawal.

The GCF was also the biggest sticking point between delegates during negotiations in Paris a year and a half ago, in large part because it’s an imperfect solution to a two-headed problem that has dogged attempts to address climate change over the years. The first question any top-down approach to climate change has to reckon with is how to equitably distribute responsibility for the current state of the planet. Most developing countries point to the fact that it’s the developed world that has done the lion’s share of the polluting up until today. The second is who will have to do most of the cutting. The Green Climate Fund was the tool the Paris deal used to paper over those cracks: the developed world would pay to help the developing world make the painful cuts, and adapt to the already unavoidable impacts of climate change already in the mail.

Trump taking issue with the GCF isn’t an uncommon objection. He is expressing a fear that is shared—spoken or not—by policymakers in every developed nation. No country wants to be on the hook for a blank check issued to the developing world to help install anything with affixed with an “eco-” or “clean” prefix. Furthermore, the fund has thus far failed at its only two tasks: raising money and spending it. Even the most optimistic estimates show the GCF to be $40 billion short of its $100 billion annual goal this year, and what cash it has managed to raise from the West, it has struggled to spend in the developing world. There are real causes for concern that the GCF cash that has been doled out hasn’t been spent in a smart manner. Anyone familiar with the foreign aid world could have told tell you that this was all but inevitable.

So what changes now that the U.S. has jumped ship? In real terms, almost certainly not as much as wailing greens would have you believe. Again, since Paris was an entirely voluntary deal, Trump’s climate policies weren’t constrained in any meaningful way by our participation in it. Conversely, his climate policies won’t be substantively different now that we’re pulling out of Paris.

Here’s something that we know for certain will change as a result of what happened today: Elon Musk will no longer act as an advisor to Trump. Big Business won’t be happy with the decision, either, as most corporations had pushed Trump to keep America’s negotiating seat at a truly global forum, comprising 194 countries (Syria and Nicaragua were the only members of the 197-member United Nations Framework Convention on Climate Change not to sign the Paris agreement).

But how can you measure the importance of a seat at such a large, and doubtlessly unruly table? No, this wasn’t about measurable change, it was about optics, pure and simple.

Domestically, Trump just fulfilled a campaign promise and mollified many in his base who might have been concerned about his steadfast commitment to scuttling ‘globalist’ international treaties. He stuck it to the Left, and simultaneously dismantled the last important piece of Obama’s green legacy. (At this point, President Obama has precious few lasting environmental policy successes to point to from his time in office. That’s an inherent problem with governing by the executive action, as Obama chose to do. Of course, there’s a bright side to that fact for greens: Trump is also unlikely to make a large impact on environmental policy through Congress, so his legacy on that front should have a similarly short shelf life.)

Internationally, Trump has flipped the bird to world. Developing countries will be gnashing their teeth at the thought of America backing out its financial commitments. Don’t be surprised to see a kind of domino effect, with leaders in the developing world jumping ship now that the cash flow promised them through the GCF could be drying up. As for the richer countries, they will see it as something akin to green treason.

China may try to exploit the opening, and talk a big game about joining the EU in taking on a climate leadership role. If this comes to pass, understand that it will be nothing more than posturing. China is far and away the global leader in greenhouse gas emissions, and for all of the EU’s stern tone and finger wagging on climate change, the bloc’s latest data show that its emissions actually increased 0.5 percent in 2015. Contrast that with the United States, which saw emissions drop a whopping 3 percent last year as a result of the continuing (shale-enabled) transition from coal to natural gas.

And that gets us to the heart of the issue. One’s opinion of the new climate course Trump just charted for America will ultimately depend on how much faith one puts in climate diplomacy as the holy grail for addressing climate change. The truth is, climate diplomacy has always been more about preening, posturing, and moralizing—about optics—above all else. What happened today was also all about optics (intentionally so) and that’s why greens committed to finding “diplomatic” solutions are pulling their hair out today.

But let’s not forget that Paris was a next-to-worthless agreement, and U.S. climate policy is going to look very much the same without it as it would have if Trump had announced a decision to stick to the deal. America’s real climate impacts will be determined by how quickly we can transition to a more energy efficient information economy and, more importantly, by our ability to develop and adopt new technologies (the pairing of hydraulic fracturing and horizontal well drilling being the most important example of the past decade). Paris had nothing to do with any of that.

President Trump sent an unambiguous message to America and the rest of the world today: his Administration doesn’t see climate change as a top priority. But even if the details of how it will play out are not fully understood, and despite all of the difficulties associated with actually coming up with climate change solutions, this is one of the defining challenges of our time. Aspirational global agreements aren’t the solution so many wish they would be, but this is a problem that demands our full attention. It isn’t getting it.

Are the Western Balkans Being Re-Balkanized?

Not long ago, the conventional wisdom held that the NATO-led intervention to end the Bosnian war was one of the crowning successes of the post-Cold War era. Slobodan Milosevic was defeated and tried for war crimes; Kosovars gained their independence; and today, three Western Balkan states are members of NATO. Yet almost two decades since the Ohrid Agreement bookended hostilities in the former Yugoslavia, the region is still a mess, torn apart by interethnic tensions and democratic backsliding.

What went wrong?

In the 1990s and early 2000s, the Western-led intervention in the Balkans and subsequent foreign aid surge gave way to a pattern of benign neglect by both the United States and the European Union. Believing that the Western Balkans’ democratic future lay in EU membership, the United States essentially ceded responsibility for the region’s political, institutional and economic development to the European Union.

Unfortunately, Europe has not fully picked up the slack.  After accepting the accession of Croatia and Slovenia, the EU lost its appetite for expansion and has kept the rest of the region (Bosnia, Serbia, Montenegro, Kosovo, Albania, and Macedonia) waiting at its doorstep. Brexit, the migrant crisis, and the rise of anti-EU sentiment in recent years have shaken the very foundations of the EU and further delayed the accession process for new member states. At the same time, the region’s internecine tensions and lack of development only festered, leaving a swathe of poor and unstable states on Europe’s periphery, and a vacuum which decidedly less constructive actors have stepped in to fill.

Revanchist Russia has reasserted its traditional role as the protector of Orthodox Christian populations, using the Balkans as a buffer to forestall further European expansion and reassert their sphere of influence. Russia has influenced public opinion among Serbs, Montenegrins and Macedonians to dampen enthusiasm for EU and NATO membership, and has further bolstered its power through military aid and disinformation that exacerbates interethnic divisions. According to a recent poll by the International Republican Institute (IRI), Macedonian support for NATO membership is at its lowest level since 2008. In Bosnia, IRI polling shows that only 18 percent of ethnic Serbs strongly favor joining the EU.

Turkey and the Gulf states have responded by stepping up their support for Muslims in the Balkans—and the help they provide isn’t always benign. Saudi Arabia has built mosques and brought imams from the Balkans to the Gulf for religious instruction. Some have returned espousing the strictly conservative Wahhabi code, in sharp contrast to the moderate Islam that has been practiced in the Balkans for centuries. This has led to a rise in Islamist fundamentalism among local Muslim populations.

Given this environment, it’s no surprise that identity politics centered on ethno-religious nationalism is enjoying a resurgence. The leader of the Serb-dominated half of Bosnia, Milorad Dodik, has called for an independence referendum to split from the multiethnic Federation of Bosnia and Herzegovina. Dodik has travelled frequently to Moscow to pay his respects to Putin. In Bosnia, the leader of the main Muslim political party, Bekir Izetbegovic, travels regularly to Istanbul for photo ops with the increasingly authoritarian Turkish President Erdogan.

In another sign of escalating tensions, despite the continued presence of 5,000 NATO troops and strong opposition from the Western alliance, as well as neighbors like Serbia and Macedonia, Kosovo’s nationalist President Hashim Thaci has called for the establishment of a national army. Meanwhile, Serbian nationalists recently attempted to direct a train emblazoned with the slogan “Kosovo is Serbia” over the border in a deliberate act of provocation. Albanian president Edi Rama often speaks of a need for increased cooperation between his country and Albanians in Kosovo and Macedonia, prompting critics to accuse him of seeking to establish a “Greater Albania.”

With the Middle East imploding and North Korea threatening nuclear war, why should the Balkans matter to the West? To begin with, the proximity of the region to Europe means that destabilization in the Balkans can quickly become a problem for Europe. In 2015, the region was a main route for more than a million migrants fleeing to Germany and Sweden, and the crisis could have been far worse if local leaders had not managed to put aside their differences and work together. If regional tensions continue to escalate, this kind of cooperation may not be forthcoming for the next crisis. This poses both a humanitarian and security risk, as ISIS fighters continue to take advantage of chaotic or lax political situations to enter to Europe.

Russia has long stoked divisions in this region in order to shore up its strategic advantage over Europe, and increased indifference or antipathy toward Western institutions is making light work for the Kremlin. Without anchors to Western institutions, illiberal democracies and rising religious fundamentalism are likely to become the norm in the region.

Some observers argue that the redrawing of national boundaries is the only way to address these perennial ethnic divisions—apparently forgetting the havoc wreaked by this approach in the 1990s. The fact is, there is no way to redraw boundaries without one ethnic group or another losing out. Despite the ethnic cleansing and displacements that took place during the Bosnia war, there are still many areas (Sarajevo being the most obvious example) where Serbs, Croats and Muslims live side by side.

Moreover, simple exchanges of land based on ethnic majority is a recipe for chaos in the tossed salad that is the Balkans. In Kosovo, a Serb enclave in Mitrovica is resisting rule by the Albanian majority and wants to join Serbia. As there are Albanian communities in the Presevo Valley in south of Serbia, on paper one might assume that the two territories should just swap populations. Yet a Presevo-Mitrovica exchange would spark a nasty fight over territory, as not all enclaves are geographically contiguous. For the same reason, it is highly unlikely that Serbia would agree to hand over the majority Muslim Sandzak region to Bosnia.

A better way forward would be to establish and strengthen regional institutions to facilitate economic and political coordination and conflict resolution. A Western Balkans customs union—a single economic area of the region’s countries recently discussed by the leaders of Serbia, Bosnia and Herzegovina (BiH), Montenegro, Macedonia, Kosovo, and Albania—could be a step in the right direction. However, such an initiative must not be viewed as a substitute for the substantial guarantees that would be provided by closer integration with NATO and the EU.

Sadly, the EU has all but abandoned its enlargement strategy for the region—constrained by persistent opposition by member governments who fear cheap labor flooding their markets and inspiring a popular backlash. But a serious road map for EU accession would provide countries in the region with concrete incentives for political and economic reform. This could lead to increased regional cooperation, thereby diminishing interethnic tensions and creating an overall stabilizing effect for the region and continent as a whole.

NATO integration is equally important and perhaps more easily achievable for the Western Balkans. Montenegro’s impending NATO accession opens the door for Serbia, Macedonia, Bosnia, and even Kosovo. Joining this vital alliance would send an important signal that the Balkans see themselves as part of the West and would help countries resist Russian infiltration.

The guarantees that come with NATO membership could also help in the fight against terrorism. IRI’s most recent poll of Bosnian citizens indicates that, while Bosnians remain divided along ethnic lines over a number of issues, including NATO membership, they are united in their opposition to the Islamic State. Overcoming the aversion of the mostly pro-Russian ethnic Serbs to NATO membership would be easier if it were pitched as part of a greater effort to defeat transnational terrorism and foster regional stability.

The West faces a stark choice: treat the Balkans as a key strategic asset, or risk losing the region to Russian influence and infiltration by Islamist extremism. Last September, Bosnia submitted its formal application to join the European Union.  Brussels should give serious consideration to this request, and NATO should follow up Montenegro’s entry into the alliance by giving strong consideration to Serbia and Bosnia as future members. With the EU in turmoil, integration with countries seeking a European path to growth and stability is, somewhat paradoxically, more important today than ever before.

Moon Admits THAAD Isn’t Going Anywhere

Just days after he angrily ordered a probe into the THAAD missile defense system, South Korea’s president is sending a very different message to the United States: THAAD is here to stay, despite my huffing and puffing at home. Reuters:

South Korean President Moon Jae-in’s top security aide left for Washington on Thursday as the new leader tries to reassure his country’s main ally he will not scrap a deal to host a missile defense system that has angered China. […]

“My order for a probe on THAAD is purely a domestic measure and I want to be clear that it is not about trying to change the existing decision or sending a message to the United States,” Moon told visiting U.S. Senator Dick Durbin late on Wednesday.

The remarks were Moon’s first clear indication that he does not intend to stop the deployment, which has drawn angry protests from China, South Korea’s biggest trading partner.

Moon’s remarks here should offer reassurance to many observers (us included) who worried that his recent outrage over THAAD could open up a rift between Seoul and Washington. Now, his decision to open a probe looks more clearly to be domestic political grandstanding, not a declaration of his intent to scrap the system. And indeed, between the fait accompli of the THAAD deployment and the reality of Pyongyang’s increasingly aggressive missile testing, Moon may find he has little room to implement a dovish engagement policy with the North.

That said, the system’s opponents are unlikely to give up so easily. Even as Moon reassured Washington that THAAD would stay, China repeated its demands that South Korea remove the system, while Russia’s Vladimir Putin denounced it as an American plot to upend the world’s strategic balance, and threatened to deploy military hardware to the Kuril Islands in response. Expect THAAD’s opponents to exploit all available pressure points—including signs of friction with the Trump administration—to try to change Moon’s mind.

Gazprom Loses Court Battle With Ukraine

Ukraine got a much-needed victory in international arbitration court this week, after the Arbitration Institute of the Stockholm Chamber of Commerce ruled that Ukraine’s state-owned gas company Naftogaz had the right to re-export Gazprom supplies. The court also shot down Gazprom’s “take-or-pay” contracts, which require customers to pay for certain amounts of natural gas, regardless of whether or not that gas is actually delivered. The FT reports:

The dispute centres on gas contracts Ukraine signed under pressure in 2009 after Gazprom cut off flow, denting supplies to Russia’s southern neighbour as well as the rest of Europe amid a price row. […]

“We did it,” Andriy Kobolyev, chief executive of Ukraine’s state gas company Naftogaz, wrote in a Facebook posting that linked to the song by Queen “We are the Champions.” […]

Should future arbitration rulings go against Gazprom, it would — in addition to potentially hefty monetary losses — be left with a precedent that would hurt its negotiating power in key markets.

This is only the first in a series of rulings, however, and the stakes going forward are high. Next up, the court will look at disputes over transit contracts between the two state-owned gas companies, and a ruling in Gazprom’s favor could bankrupt Naftogaz.

To the extent that this can set a lasting precedent for Gazprom’s future contracts in Europe, this decision represents a big step forward for European energy security. But don’t be fooled—Gazprom isn’t exactly on the ropes. The Russian company is moving ahead with a plan to double the capacity of its Nord Stream pipeline, a move that would allow its European exports to bypass Ukraine and deprive Kyiv of valuable transit fees. Meanwhile, its exports to Europe rose 15 percent in Q1 over last year’s volumes, and Gazprom’s revenues jumped 4.4 percent over that same time period.

Gazprom’s contracts with its customers may not be as lopsided as they have been going forward, but its position in Europe is still strong, and Ukraine’s outlook remains bleak.

Congress Should Hire More People

Many important American institutions, from higher education to state regulatory authorities to the healthcare system, are beset by bureaucratic bloat—or an excess of costly personnel that don’t actually help them function more effectively. The United States Congress, however, has the opposite problem: bureaucratic attrition. For decades, the First Branch of government has been losing crucial staff who help members weigh competing interests and devise functioning legislation. As Brookings’ Curtlyn Kramer notes:

Less discussed in a conversation about U.S. government personnel is the legislative branch, where Congress also relies on a large staff to support its operations. These staffs include those of members of Congress and congressional committees, as well as of multiple support agencies that provide Congress with non-partisan, expert information, such as the Congressional Budget Office. Chapter 5 of the most recent update of Vital Statistics on Congress examines how the staff rolls of those offices and agencies have fared over time. Across a number of tables, the picture painted of the workforce tasked with conducting the business of Congress is a bleak one. Notably, the staffs of three support agencies – the Congressional Research Service, the Government Accountability Office, and the Congressional Budget Office, have lost 45 percent of their combined staffs from 1975 to 2015.

Congress today is falling far short of the role the Founders expected it to play. Instead of serving as the center of political life in the United States, Capitol Hill is today an inert forum for gridlock and grandstanding. And instead of acting as the first mover in policymaking, it seems content to respond to initiatives by the increasingly hyperactive executive and judicial branches. The major “achievements” to come from Capitol Hill this century, from the Patriot Act to No Child Left Behind to Obamacare to sequestration, have mostly been duds.

Regenerating Congress is a daunting and difficult task, and there are limits to what can be achieved in the current political climate. But one important piece of any plan to put Congress back in the drivers’ seat is to make sure that it is staffed adequately. Congressmen and Senators need high-quality and well-organized staff and analysts so that they can make decisions deliberately rather than outsourcing them to lobbyists or party elders. In short: Congress should hire more people. This is one area where dysfunction most certainly will not be solved by starving the beast further.

Brussels Broaches Debt Bundling, Berlin Balks

With Emmanuel Macron’s election reviving hopes for serious Eurozone reform, Brussels is proposing a new mechanism for bundling the Eurozone’s debt, tightening integration, and easing the burden of its most indebted members. Financial Times:

Brussels has called for sovereign debt from across the eurozone to be bundled into a new financial instrument and sold to investors as part of a plan aimed at strengthening the single currency area.

A European Commission paper on the future of the euro, unveiled on Wednesday, advocates the creation of a market for so-called sovereign bond-backed securities, which would package together the national debt of different countries into a new asset.

The plan is aimed at boosting demand for debt issued by governments with relatively weaker economies, and encouraging banks to manage their risks better by diversifying their portfolios. It would also sidestep the controversial issue over whether the currency bloc should issue common eurobonds.

The main stumbling block to such an idea is Germany, which has long resisted any debt-pooling proposals that would leave it on the hook for other states’ profligacy. With that in mind, proponents of the idea have been insisting that these sovereign bond-backed securities are not equivalent to the dreaded Eurobonds that Berlin has repeatedly rejected. A December document from the European Systemic Risk Board, for instance, argues that the proposal “could be achieved without any fiscal transfers or risk-sharing” and would help reduce systemic risk across the Eurozone.

The Germans, alas, do not seem to be buying that argument. FT again:

A finance ministry spokesperson said the priority for the euro area should be ensuring respect for existing rules, as “only that can provide the credibility for further integration”.

“Member states must live up their responsibility to create stability and growth in the eurozone, through structural reforms and debt reduction,” she said. “We need to reduce risk in financial markets before we can talk about further risk-sharing.”

The diplomatic language here masks a blunt and familiar message: Germany won’t share other states’ debt burdens if those states won’t reform. This message has long been central to Berlin’s objections to Eurobonds; to judge by their initial reaction here, the new proposal is similarly a non-starter.

In other words, the situation provides yet more evidence that Merkel will not relax her hardline fiscal positions any time soonx, especially during a contentious German election season. Full-fledged Eurobonds have always been a pipe dream, a reality that Macron seems to have accepted given Germany’s outright opposition. But even watered-down versions of that idea, or similar risk-sharing proposals, are likely to encounter strong resistance from Berlin—and that will make Macron’s mandate for serious Eurozone reform ever more difficult to fulfill.

The Germans Are More Nationalistic Than They Think

Over at the Wall Street Journal, Greg Ip carefully explains why President Trump’s beef with Germany over trade, met with howls of indignation by the trans-Atlantic establishment, actually isn’t so far off the mark: Germany really has made policy choices that magnify its trade surplus at the expense of the United States and smaller European economies.

Since adopting the euro in 1999, [Germany] hasn’t controlled its own currency. However, it did win competitive advantage over its neighbors in the currency union. Labor-market reforms restrained domestic wages. In 2007, a payroll tax cut, which made German labor more competitive, was financed with an increase in the value-added tax, which exempted exports.

In previous eras, those reforms would have pushed the deutsche mark higher, squeezing Germany’s trade surplus. Inside the euro, though, the burden has fallen on Germany’s neighbors, including France, to compete by grinding down domestic wages and prices through high unemployment and fiscal austerity. That has kept the entire region’s economy weak, forcing the European Central Bank to hold down interest rates and thus the euro.

The core issue, as Walter Russell Mead has noted before, is that the Germans actually are looking out for their own national self-interest. Even as it makes paeans to a post-nationalist, cosmopolitan Europe, Berlin is pursuing a neo-mercantilist economic policy that, in the context of the Eurozone, deflates the euro and makes the Germans import less and export more. That has a measurable economic impact on its trading partners.

It’s entirely understandable that the Germans would design an economic policy that favors Germans over other countries. That’s what nations do; when the Berlin Wall came down, the Germans spent a trillion dollars rebuilding the Eastern half of the country, but not other countries behind the Iron Curtain. But it also means that they are legitimately subject to pressure and criticism from other nations when their interests do not align.

Whether Trump can effectively nudge the Germans to adopt an economic policy that is more conducive to political stability in Europe and the United States remains to be seen (the signs from his first Brussels trip are bleak). But he is correct to try to advocate for U.S. interests against a peer power that is jealously looking out for its own.

It’s the Eleventh Hour for the Paris Climate Agreement

Donald Trump will announce this week whether or not he’ll keep the United States in the Paris climate agreement, and Axios is reporting that the President has already made up his mind to abandon the deal. But according to the man himself, the jury is, for the moment, still out:

I will be announcing my decision on the Paris Accord over the next few days. MAKE AMERICA GREAT AGAIN!

— Donald J. Trump (@realDonaldTrump) May 31, 2017

There are many ways to look at the political calculus. On the international stage, if Trump’s goal is to strengthen the Paris accord, he should quit in a huff; if he quits, the accord will become a holy cause around the world. But if he stays in, he could water down America’s (voluntary) targets even further, and expose the treaty’s inherent weaknesses, perhaps even giving other grumbling participant countries a precedent to follow. Plus, if he handles it right, he could use the ‘in’ decision to get some badly needed diplomatic capital in Europe.

Domestically, the temptations to repeal are greater. Trump campaigned on tearing up all manners of international agreements—the Iran deal, NAFTA, and even NATO—that weren’t putting “America First”. For all manner of reasons—some structural, some pragmatic—the President has not made good on any of these promises yet. Repealing the Paris agreement, in contrast to his other targets, represents a much easier, symbolic win that he can show his base.

Still, it’s not a slam dunk, even with American fossil fuel companies. As we noted the other week, many are arguing that the costs of staying in are negligible to their bottom line (given the ultimately toothless nature of the agreement), and are far outweighed by the benefits of retaining one’s seat at the table. And Trump’s own inner circle is deeply conflicted on this issue, so we wouldn’t take Axios’ scoop as gospel just yet.