Monthly Archives: joulukuu 2016

2016 inte slutet för globalismen (Dagens Industri 22.12.2016)

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Förra veckan höll jag ett anförande på Sveriges ambassad i Helsingfors. Jag frågade den internationella skaran av sakkunniga om någon av dem hade förutspått Brexit och Donald Trump i julrapporterna förra året. Inte en hand steg. Diplomater är ärliga.

Visst blev 2016 ett speciellt år.

På våren träffades USA:s Barack Obama, Tysklands Angela Merkel, Storbritanniens David Cameron, Frankrikes François Hollande och Italiens Matteo Renzi i G7-mötet. Nästa maj är det bara den tyska förbundskanslern som sitter kvar.

Populisternas frammarsch fortsatte. Donald Trump valdes till USA:s president. Nigel Farage lyckades med Brexit. Frankrikes Marine Le Pen och Hollands Geert Wilders blev alltmer populärare. Samtidigt fortsatte Filipinernas Rodrigo Duterte med auktoritära tag.

Den traditionella vänstern försvagades ytterligare. Dess hjälte, Fidel Castro, dog. Hollande berättade att han inte ställer upp i presidentvalet. Bernie Sanders blev inte demokraternas presidentkandidat. Storbritanniens Jeremy Corbyn hade svårt att bli en trovärdig oppositionsledare.

De internationella institutionerna – FN, WTO, EU, Nato, IMF och Världsbanken – tappade mark. Nationalismens och protektionismens vindar blåste över alla kontinenterna. Trump slopade frihandelsavtalet TTP. Kina blev globalismens synligaste förespråkare.

Kriget i Syrien blev allt värre. Rysslands roll i konflikten allt centralare. President Recep Erdogans tag i Turkiet allt tuffare. Terrordåden fortsatte.

Mot denna rätt så misära bakgrund skulle det vara lätt att börja planera den liberala världens och globalismens begravning. Det skulle dock vara helt för tidigt. Globalismens pendel svajar alltid mellan internationalism och nationalism.

Vi lever i en bättre värld än någonsin tidigare.

Visst finns det fortfarande hunger, epidemier och krig, men inte nära heller i det mån vi sett under historiens lopp. Visst finns det fattigdom, men samtidigt lyfts miljontals människor årligen över fattigdomsgränsen. Visst finns det fortfarande auktoritära regimer, men samtidigt finns det fler demokratier än någonsin tidigare.

När jag föreläser på Sveriges ambassad nästa år tänker jag ställa en fråga till de sakkunniga diplomaterna om president Donald Trumps första år, de pågående brexit-förhandlingarna och Tysklands val under hösten 2017. Jag förväntar mig ärliga svar.

Samtidigt vill jag önska Di:s läsare en god jul och ett gott, dock en aningen lugnare, nytt år.

Which is the best Brexit option: soft, hard or cliff edge? (Financial Times 14.12.2016)

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I spent a couple of days in Brussels last week on my quest to understand the implications of Brexit. Having now visited London, Berlin, Frankfurt and Warsaw, I can only conclude that the more I learn, the more worried I am.

European negotiations have a tendency to advance in three phases: crisis, chaos and suboptimal solution. Brexit is no exception to this rule. The only problem is that the negotiations will most probably be nasty, brutish and long. And with a suboptimal solution, only law firms will emerge as winners.

In the coming years, the UK and the EU will be involved in three sets of negotiations: an exit agreement, a transition arrangement and a new relationship. We will probably not see the end of this process before 2025.

The timetable of the actual Brexit agreement is relatively straightforward. Theresa May, the UK prime minister, has said she will invoke Article 50 by the end of March 2017. This will kick off a 18 month period of negotiation followed by six months of legal technicalities and ratification. Unless someone stops the clock, Brexit will take place on 1 April 2019, a few weeks before the European Parliament elections.

Brussels continues to say there will be no negotiation without notification, but never underestimate the EU institutions’ level of preparation. The commission is in the final stages of screening the key issues and ready to start the talks whenever London sends an email with an Article 50 heading.

The negotiating hand of the British government is weak. In its crudest form there are only two things that need to be decided: the date and price tag of exit. Once the negotiations begin, Mrs May will have very little to say on either. The EU is not an accounting exercise in which you can calculate the cost of membership by extrapolating how much you pay into and get out of the EU budget. Yet the price tag of the UK’s prior commitments to the budget is estimated around €55 to 60bn. That is how much the UK will have to pay to get out of the EU.

There are three basic options for Brexit: soft, hard and cliff edge. I still insist that a soft exit would be the best way forward, but this seems highly unlikely. If the UK does not accept the free movement of labour, a financial contribution to the budget or the jurisdiction of the European Court of Justice on relevant issues, it will be very difficult to remain part of the internal market. You can’t have your Christmas pudding and eat it too.

In a nightmare scenario the UK would be pushed off the cliff edge, without a proper agreement on the terms and conditions of exit. This would lead to political, economic and legal uncertainty of an unprecedented nature. Populism, market turbulence and endless litigation would follow on both sides of the channel.

The best we can therefore wish for is a hard Brexit. In this scenario the EU and the UK settle on a date, price tag, rights, obligations and supervision of the exit agreement. This will mean severance from the internal market, including financial services. At the same time this will pave the way for proper transitional arrangements and a new treaty between the EU and the UK.

The transitional arrangements will be important, but by definition temporary. The length and scope will depend on the direction of the future relationship. They will not be a substitute for EU membership, but simply an arrangement which gives time to negotiate a new deal between the EU and a third country.

Various options for a new relationship — everything from joining the European Economic Area to an arrangement governed by World Trade Organisation rules — have been floated in public discourse. The most likely outcome is something that could be called Canada+, a free-trade agreement with a few special arrangements on security, defence and terrorism.

In financial services the UK will lose out on passporting and its strong position as the centre of the euroclearing system, but nothing will prevent a functional deal based on equivalence. The City of London will be weaker, but not dead.

The EU27 will make sure that the alternative cost of non-membership is substantially higher than being a member. This means that the UK will not be allowed to pick and chose the policies which it wants to plug into. If the UK wants more than a free-trade agreement, it will not be allowed a competitive advantage through lower levels of taxation, environmental standards or social security.

No one can blame Theresa May for wanting a “red, white and blue” Brexit, but the reality is dark grey, if not black. British negotiators have very little to lean on, legally or politically. The EU27 have been surprisingly united since the European Council at the end of June. And when it is in their national interests to remain so, the situation will not change.

As a pro-European anglophile and advocate of liberal democracy, I still pin my hopes on a second referendum on the new deal between the EU and the UK. In terms of overall impact, an exit in 2019 is much more substantial than entry in 1973. Forty years ago national sovereignty was perhaps a comfortable myth, today it is simply post-factual.

But even if I remain an eternal optimist, I think that Brexit is inevitable. When it does happen, it would be in everyone’s interest to manage the process in a civilised and orderly manner. With twenty years of experience in EU negotiations I hope for the best but prepare for the worst. When EU heads meet in Brussels on Thursday, they will be fully aware that Brexit could represent a new definition of suboptimal

Välkommen till vår nya värld (Dagens Industri 1.12.2016)

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Visst älskar vi nordbor demokrati, marknadsekonomi och globalisering. Nå, i alla fall vi som läser Di. Samtidigt skakas vår trygghet av snabba vändningar i internationell politik. Vi tycker ju om stabilitet i form av internationella institutioner och klara regelverk.

Vem hade trott att världen år 2016 skulle skaka någonstans mellan sju och åtta på Richterskalan? Först röstar britterna för att lämna EU, sedan röstar amerikanerna för Donald Trump och till slut vill Kina ta ledningen i världens frihandel.

Det skulle vara lockande att jämföra 2016 med 1918, 1945 och 1989, slutet på två världskrig och det kalla kriget, men det skulle vara en överdrift. Visst bevittnar vi tragiska krig i världen, men inget likt världskrigen. Vi lever i ett tidevarv av relativ fred.

Lika lockande skulle det vara att jämföra finanskrisen 2009 med dess kusiner 1929 och 1873. Den senaste krisen var tuff, men dess konsekvenser går inte att jämföra med de ekonomiska depressionerna i slutet på 1800­talet eller början på 1900­talet.

Det skulle också vara lätt att skylla allt på populism. Att väljarna vädrar sina frustrationer på traditionella institutioner och speciellt politiker. Visst är det en del av demokratin, men så lätt lär det inte vara.

Historikern Niall Ferguson skrev en ypperlig artikel i tidskriften Horizons. Han konstaterade att man inte kan dra likhetstecken mellan dagens populism och fascism. De populistiska rörelserna använder inte uniformer.

Han noterade att historiskt brukar populismen vara en blandning av fem ingredienser: överraskande migrationsflöden, växande inkomstskillnader, en känsla av korruption, en finanskris och en demagog. Ferguson har rätt. Populismen i västvärlden har alla dessa ingredienser.

Populismens framgång kommer att testas i ett antal europeiska val inom de kommande tio månaderna. Det börjar med en folkomröstning i Italien och presidentval i Österrike på söndag. Sedan blir det parlamentsval i Nederländerna i mars, presidentval i Frankrike i maj och riksdagsval i Tyskland i september.

I Europa har Angela Merkel blivit den naturliga ledaren. Hon försvarar europeiska värderingar, leder förhandlingar mellan stormakter och hittar lösningar i svåra situationer. Efter Barack Obama blir hennes position ännu starkare.

För några år sedan var vi oroliga över att våra jobb exporterades till Kina. I dagens läge är det mer frågan om att kinesiska investerare köper företag och know­how i Europa. Vi borde inte klaga – det kallas för global kapitalism.

Om USA börjar driva en protektionistisk linje så kan det väl hända att Europa måste söka efter nya frihandelsavtal i Asien. Den säkerhetspolitiska situationen är också ny. Donald Trumps retorik om USA:s framtida roll inom Nato har varit oroväckande.

Vi lever i ny värld där internationella institutioner, som till exempel FN, EU, WTO och Nato, tappar mark. Samtidigt ser vi maktskiften mellan kontinenter. Asien förstärks, Europa och USA blir relativt svagare.

Välkommen till vår nya värld som verkar vara stabilt osäker.

For China, Europe is the new Africa (Financial Times 1.12.2016)

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China is known for its patience. A century is but a page in the book of its history. We Europeans are much more edgy. First we lamented that our manufacturing jobs were stolen by China. Then we worried about the Chinese shopping spree for raw materials in Africa. And now we are trying to come to terms with the fact that China is buying European businesses in all shapes and forms.

Europe should not complain. This is all part of globalisation and capitalism, the two pillars of our economic success in the past 100 years. Nevertheless, now that China might be seen as the champion of free trade and state-driven capitalism, we should pay close attention to what happens next, or what is already happening. And react accordingly.

For decades, China has been folding Africa into its supply chain for raw materials – mainly oil and minerals. But it is currently mining Europe for its precious metals and gems: talent, intellectual property, market shares, technology, brands, established businesses and value chains.

The gear shift is palpable. China is no longer just the world’s low-cost sweatshop. The shopping list in Europe includes high-tech, higher value added industries and services. A great number of investment bankers, lawyers, and due diligence professionals in London, Frankfurt and Paris are suddenly involved in projects with Chinese principals.

China is focused on Europe because the essentially protectionist Committee on Foreign Investment of the United States puts all Sino-US transactions under scrutiny and in effect places a “wall” in the path of Chinese investment. The change of control in the White House will not make investment in the US any easier.

This makes our continent lucrative for acquisitive Chinese funds. This week we can see it at Slush in Helsinki, one of the biggest start-up events in Europe, which has drawn many Chinese investors over the years. Two years ago I spent a day there with China’s vice-premier. Yet Europe appears to be taken by surprise by all this interest. It lacks US-style controls and tools for deliberation.

Europe is waking up to the new reality and its implications, as demonstrated by high-profile cases such as the attempted Chinese takeover of German chipmaker Aixtron. The economy ministry withdrew support after alleged reports that the US intelligence service had warned the government that the technology could be used for military purposes.

Other takeovers pose fewer problems. For instance, Tencent, the Chinese investment holding company, this year bought a majority stake in Supercell. While the Finnish group’s flagship game, Clash of Clans, is a multiplayer test of strategic skill, the acquisition has little strategic importance in the real world.

The big question is how Europe should react.

The first thing to do is to be aware that the aqcuisitions are taking place and that they are systematic. This is not necessarily a bad thing; Europe needs an injection of foreign capital. At the same time it is important to understand that many, but by no means all, of the transactions are state led and targeted at intellectual property and IT. These could have a strategic impact and should thus be dealt with carefully.

Second, Europe should not burn bridges by taking knee-jerk protectionist measures. Few predicted that the Chinese would emerge as advocates of free trade while the US turned inward. The best option would be a new deal between Europe and the US based on security, foreign policy and trade – but if the administration of Donald Trump decides to scrap the Transatlantic Trade and Investment Partnership with Europe, we will have to look elsewhere. In terms of size and scale, China is the obvious direction in which to look.

Third, Europe should seek common solutions. The natural reaction is to go native, to come up with national as opposed to common rules. This would be the wrong approach. Europe would become a patchwork flea market instead of a co-ordinated internal market. The left hand would not know what the right hand was doing. And in any case history has shown that protectionism leads nowhere.

Perhaps it is finally time for Europeans to be patient; to understand that the balance of economic power is shifting. It is not about blue-collar work moving continents. It is about white-collar companies changing owners. That is imbedded in the basic nature of global capitalism.

The best way to react is to remain cool, calm and collected – to assess the situation, understand what is going on and try to come up with a joint approach. My hope is that this happens sooner rather than later. My fear is that we are already too late. This is yet further proof that markets are often a step ahead of the regulators.