Crises and Concessions: France, Germany, Italy

Crises and Concessions: France, Germany, Italy

Ms. May's humiliation was particularly dramatic, but political leaders elsewhere in Europe have had to backtrack on strongly-held ideas in recent days.

Here's a cornucopia of climb downs from the continent:



In France, after another weekend of violent protests, President Emmanuel Macron went on TV yesterday to defuse a crisis that has engulfed his presidency. The "Yellow Vest" movement, which began in opposition to a proposed hike in fuel taxes, has quickly grown to embody the broader anger and anxieties of the country's middle class, particularly in rural areas. After initially remaining aloof from the crisis, his administration first suspended and then outright cancelled the tax hike. Mr. Macron has now declared a state of "social and economic emergency" and pledged to restore order while also offering a (somewhat meager) 100 euro a month increase to the national minimum wage.

The challenge for Mr. Macron is this: he was elected in part on his promises to make the unpopular economic reforms that France needs in order to bring down unemployment, boost growth, and spur innovation. Thus far he has stumbled in part because of the perception that he's front-loaded the pain for poor and middle-class people. His speech yesterday aimed to demonstrate both resolve and compassion in a way that puts him back on track to address further politically fraught issues next year, such as pension reform. The risk is that in making concessions to the street once, he will be unable to hold the line in the future.

Meanwhile in Germany, outgoing Chancellor Angela Merkel has quietly dropped her long-standing insistence that all EU countries must accept refugees according to an agreed-upon quota. The new line, included in a joint German-French discussion paper ahead of EU meetings later this week, says that while solidarity within the common bloc is desirable, countries can, in effect, say no to taking in migrants. It's a small nuance with big implications – migration policy has been the single most inflammatory issue in European politics in recent years.

Backlashes both against refugees themselves, as well as against Brussels' insistence on country-level quotas, have fueled the rise of anti-establishment parties that have roiled Europe's politics since 2015. Merkel's climbdown on this issue may facilitate a broader EU agreement on migration policy this week, but at the cost of Brussels' long-term legitimacy.

And to Italy, where the government coalition of the anti-establishment Five Star Movement and the right-wing Lega party has pulled its own climbdown. For months Rome has locked horns with Brussels over next year's Italian budget. The government wants massive tax cuts favored by the business-friendly Lega, along with huge social spending increases promised by Five Star on the campaign trail.

But the combination would violate EU fiscal rules by expanding Italy's sky-high government debt. The EU has threatened sanctions, while financial markets punished Italy. Faced with the prospect of deeper financial market turmoil, Rome has relaxed its earlier anti-Brussels bravado and now says it's willing to trim spending to find a compromise. But room for maneuver is scant: both Five Star and Lega have electoral promises to keep, and both are burnishing their Eurosceptic bonafides ahead of European parliamentary elections this spring.

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Ian Bremmer shares his insights on global politics this week with a look at the deteriorating human rights situation in Belarus, Delta variant woes, and Lebanon one year after the Beirut blast.

An Olympian refuses to return home to Belarus and an anti-Lukashenko activist has been found dead in Ukraine. What's going on?

Yeah. That anti-Lukashenko activist was found hanged in a park in Kiev. Once again, not exactly likely a suicide. These anti-Lukashenko activists have a way of turning up injured or dead. It's a horrible regime. Their friends are limited largely to the Russians. That's about it. The economic pressure is growing from Europe, from the United States, very coordinated. But the problem is a very hard to do much to Lukashenko when he has not only support of his military, but also the support of most of the workers in the country who aren't prepared to strike because they want to ensure they still have jobs. I expect this is going to continue, but human rights abuses are stacking up. It is nice to see that the Americans and the Europeans are coordinating policy as well as they have been.

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It's been 365 days since twin blasts at a Beirut port decimated Lebanon's capital. More than 200 people were killed and some 7,000 were injured, yet accountability has been scarce. There is ample evidence that multiple Lebanese officials knew that ammonium nitrate was being improperly stored at the port. Four high-ranking politicians, including former PM Hassan Diab, have been charged by a Lebanese judge, but they all refuse to cooperate with the ongoing investigation.

Since then, Lebanon's already-dire economic and financial crises have only intensified. The Lebanese pound, the national currency, has plummeted, losing 90 percent of its value since 2019, when the country's economic crisis erupted. And more than 50 percent of the population is now living below the poverty line.

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The Biden administration is finally devoting more attention to Southeast Asia. Last week US Secretary of Defense Lloyd Austin traveled to Singapore, Vietnam, and the Philippines, marking the first regional visit by a Biden cabinet official. A trip by Vice President Kamala Harris is already in the works as well, and this week Secretary of State Tony Blinken will meet (virtually) with ASEAN counterparts.

The flurry of activity comes after earlier concerns that President Joe Biden was neglecting Southeast Asia, the region where US-China rivalry is the most intense. To understand better what Austin's visit meant, and what comes next, Eurasia Group's lead Southeast Asia analyst Peter Mumford spoke to us from Singapore.

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Raisi won't have it easy: The newly "elected" president of Iran, Ibrahim Raisi, was officially endorsed by Supreme Leader Ali Khamenei on Tuesday. In his inaugural address, the 60-year-old hardliner pledged to get US sanctions removed and to respond to rising socioeconomic grievances within Iran, but he warned that he wouldn't lash Iran's prosperity or survival to "the will of foreigners." In Iran, the president's role focuses mainly on domestic policy, but with the economy reeling one of Raisi's big early challenges will be to continue complicated talks with the Biden administration to renegotiate the 2015 nuclear deal, which would lead to the US lifting some of the harshest sanctions. Both sides say they want a new deal, and have gone through half a dozen rounds of negotiations already, but they remain at odds over who should make what concessions first. Raisi also pledged to restore Iranians' flagging trust in their government and to improve the economic situation, but in ways that are in line with "revolutionary principles." He'll have his hands full with that. And don't forget that the likely imminent (re)takeover of neighboring Afghanistan by the Taliban — whom Tehran don't like at all — will also occur on Raisi's watch. Good luck, Mr. President, you'll need it.

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158: To boost vaccination rates, New York City will soon require proof of COVID vaccination or a negative test to enter gyms and restaurants, as daily new infections in the Big Apple have jumped 158 percent over the past two weeks due to the more contagious delta variant. New York is the first major US city to take this step, following similar schemes already in place in France and Italy.

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