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Voternomics: Why Europe Needs to Unite Around Its Defense with Wolfgang Ischinger

Published May 17, 2024, 4:00 AM

Former Munich Security Conference Chair Wolfgang Ischinger joinsVoternomics to explain the new European project he says is needed. Plus, Bloomberg reporter Michael Nienaber discusses why German Chancellor Olaf Scholz’s popularity remains at historic lows while the far-right AfD party may see gains in the European parliament next month. 

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We need to build a second category of the European Union, which is, in the words of Macon, the defense Europe and that requires different methods, different capabilities, etc. Etc. And we have not even seriously started to build this.

Welcome to voter Nomics, where politics and markets collide. This year, voters around the world have the ability to affect markets, countries and economics like never before.

So here at.

Bloomberg we've created this series to help you make sense of it all.

I'm alegro Stratton, I'm Adroom Wooldridge, and I'm Stephanie Flanders.

So at the top of the show you heard from our guests this week, Wolfgang Ishinga. He's a former German ambassador to the US and also the former chairman of the Munich Security Conference. It's an annual conference that brings together NATO member countries and various security experts to discuss current issues in security and defense politics, and it frequently makes the news, does it not. Anyway, it was a very interesting conversation, but it didn't include Stephanie and I. Asia. You were driving this far.

It was the men retaking control.

And you began by asking him whether democratic Europe can defend itself from threats from people who want to destroy it.

Yeah, and I think he conceded, I think that Germany has been rather irresponsible for a long time. And he even conceded that there might be some virtue in Trump, in the sense that Trump really woke up Germany and woke up native to the fact that they weren't or aren't spending enough on defense. And then he was optimistic and said that finally everybody is beginning to get the message that booting is a massive danger, and they are spending a bit more.

I think that what that opening clip points to, as he was talking about the need for a different kind of thinking about the European Union, a different way, that it was created to solve one problem and is going to have a different maybe even a different collection of countries to solve the problem it faces now.

Massive I thought that was massively interesting, both that the point is making, I think is true and is a fascinating point, but also that Germany has been a byword for not quite complacency or not quite stagnation, but basically for thinking that things are just about right. And this was a key member of the German establishment, saying, actually, we've got to be much more innovative. The world is changing very rapidly and we need to change with it.

Okay, I'm going to stop you there because we're going to talk and listen to Wolfgang later and then dissect it in great detail in a second. Also on the show, we'll go over to Berlin to get a temperature check. I'll support for the Right in Germany ahead of the European elections in early June, really quite soon. But first back to you agents. He had to tell you that.

Well, actually, and this just my idea because I did think often Adrian's columns a very good read. But I thought that your column last week about Richie Sunac was particularly good Adrian.

For the people who didn't see it or haven't read it, it was where is Richie Sunac leader of broken Tories? The problem is not that the PM is bad at his job, it's that he has to lead a party at war with itself.

Yeah, you have a lot of people saying that Richie Sunc is a really bad Prime minister, and that suits a lot of people's narratives. You have people on the right saying that he's behaved he's betrayed fundamental Tory principles. You have people on the left saying he's been a bit of a disappointment, and of course the Labor Party is in the business of trashing Sunac. I don't think he's a first rate politician, but I think he's a pretty good politician. He's a good enough politician to have risen to the top of the Tory Party at a very young age, the youngest Prime Minister since Lord Liverpool. And when it comes to political judgment, he's made a number of judgment calls, backing Brexit, backing Boris, to all the things that he needed to do to be in line with the soul of the Tory Party. So I think he's a pretty good politician.

Briti Asian.

By the way, he did believe I think that's right. Yeah, I think that's right. So his judgment is in alignment with the Tory Party. The real problem is not Richie Sunac and his personality in his political judgment, and he's not a good fall guy. The real problem is with the nature of the Conservative Party, which is a broken, divided and quite frankly pretty crazy party at the moment.

Yeah, I just say this is probably the time where we have to remind listeners. But one of our three who isn't me or Adrian, has actually worked as an advisor to Richie Sunac. Yeah, indeed, so we get our disclaimers in, but means she has a particularly insightful view on this.

I know, well, I did enjoy it, but I was saying he did believe all those things that Adrian says, Yeah, I think that's right. I know that's right, something like the Rwanda program, which Richie does believe. He believes in that program. Brexit, he believed in that program. So if I think back to covering labor, so they were in ninety seven, they go out in twenty nine and twenty ten, and I remember covering all the coups that there were then in quite some depth. And I wonder if there's a sort of extent to which after ten years, thirteen, fourteen years, any political party is knackered. And it's a question a statement whether it's just you need some time to reflect away from the I.

Think exactly true that they're tired. But there's something more going on with the Tory Party than that, and that's that the party was fundamentally broken by Brexit, partly because Brexit drove away a lot of very good people, so they're even more knackered because some of the people who would have refreshed them have gone, but also that Brexit failed in the sense and because it failed, they're casting around either for villains if they're on the right or if they're on the left of the party and think, my god, we're central to this party which has made a terrible judgment.

Well, I guess we can separate two things. We could definitely have a conversation about whether or not Richie Sunek is doing the best you could do in a very difficult circumstance. But I do think you made an interesting point in your column. What has been true politics within the Conservative Party and got him to where he is has been bad economics for the country. And the other thing which I think is problematic for him is Brexit and some of these other things that he's been associated with and has served him so well in terms of making it ahead in the Conservative Party. Is a sort of tension between that and his sort of personal brand. He can't get away from the fact that he's a kind of fully paid up member of the global kind of cosmopolitan elite. He was a successful city person and if you've got the city and much else in UK business getting harmed often sidelined by Brexit, it just has implanted attention in his brand and in his reputation, which I think is an added problem for him.

Absolutely. The Tory Party has managed to put together a winning coalition under Boris Johnson, which was a coalition between successful, fairly rich southern people on the one hand and the just about managing on the other hand, and Boris somehow appealed to both groups, and that coalition has fallen apart.

Now.

It's fallen apart for very solid economic reasons because Rexit didn't deliver the economic boost was supposed to deliver. But it's also fallen apart because it's the sort of coalition that's held together by a charismatic strong man. And Rishi, whatever he is, is not a charismatic strong man. He's a technocrat.

All fascinating stuff. But I think it's possibly also more prosaic than everything you've just said, which is, if you look at the decline in the Conservative polling, it starts with Party eight since December twenty twenty one, and then another precipitous fall is the trust forty nine days. Whilst everything you've said is cogent and eloquent as always, Adrian is actually I think that the sort of what he's dealing with as well are the kind of the scandals and.

The poor chi he doesn't drink. He was opposed to his trust, she was his opponent, and he's getting the fallout for both of those things.

There was an early stage where sort of things post Liz trusts, something's just working better in White or post Liz trust post Boris Johnson. There was a sort of glow around getting things done. But it's hard to be a technocrat when you're actually dealing with the consequences of many years of underfunding and sort of chaos in some parts of the NAHS. I do think that we should take a moment to, at least in my case, just to slightly ridicule just the number of resets, even if we think that he's on a very tough wicket and blah blah blah. But he was the force of radicalism and change in the Tory Party conference. Then a few weeks later, the old former Prime minister comes in as a Foreign secretary. This week I don't know what you think about this, Adrian, but to try and stake out blue water between him and Kirs Sarma on defense spending on the basis of a three week old, unfunded pledge to raise defense spending by half a percent of GDP, when that would only take it back to where it was when Labor left office.

There are very strange things going on from Downing Street. On the one handers this and Grant chapped the Defense min Ister saying we're now in a war footing well, where did that come from? On war footing half percent of gaut And then you had the chance of the checker saying we're going to create a new Microsoft in Britain, a British Microsoft, without any sort of sense of how and when and why. You can see why what the mechanics of this. These are big announcements. There's no preparation for them, there's no follow up. They're just thrown out there as if perhaps they'll stick on the wall.

At some point we're all both looking at a strategic comms for the Treasury. I feel somewhat on the hook for these points, but look, I think it is a political fact that the Labor Party are at least twenty points ahead, and I think in that context, I genuinely don't see them as resets. I think downing stream don't see them as resets. They see them as we are going to make an argument that we want you to listen to now. And I think that completely take your point that the conference speech saying everything that happened in the last thirty years was crash and then bringing back the Prime Minister from that period of thirty years, David Cameron, that was incoherent. Other than that, I think you're allowed to say, how do I want to connect with people? Have I connected so far with this view of the world I have? I think some of them are resets and some of them are not. Sometimes I think it's fair for them to want to have that permission to be listened to and get a message into people's heads that it is a more dangerous timing. And I think all of us around this this in this studio would accept that we started the year thinking the election would be about economics. It probably still will be largely about economics, but there will be this defense and security tinge to it, and don't even though many of the defense and security threats were around in January. We were all convinced it was going to be about interest rates and inflation and so on, and it will now have that different flavor, which is about threats and perils ahead. I'm going to ask, are we allowed to move on?

I think we got a natural segue.

We're going to go to Berlin. I'm going to enjoy going to Berlin and away from West We're going to another believed leader to speak to our German government. Reporter Michael Ninaba, Hi, Michel, how are you Hi?

I'm fine, Thanks for having me on the show.

You've just been back from a trip away with Schultz, is that right?

Yeah, we returned yesterday from a two day trip to Sweden. Were shots on the first day, and Monday met his Nordic counterpart and they had the Nordic Summit and he was a special guest, and then they were obviously also bilateral talks with the Swedish counterpart on Tuesday, and yeah, it was in a good mood. Also in the evening he joined the journalists at the hotel bar and stayed up late and we discussing things that always off the record, how late.

Is late, how late is late?

There wasn't what beyond midnight, and that's some point he changed to the red wine to coffee and.

Tell us, tell us what has he got to be jolly about on his polls, the worst polls for any chancellor in German polling history.

Yeah, it's not looking that they're great right now. I mean the posts were actually even worth the last year when the three parties and short coalitions were actually figuring about nearly everything. But nonetheless the coalition still sticking together now and it's the third year, and next year we have elections coming up, federal elections but now obviously to the European elections in June and then three really important regional election in three eastern states in September. And it's not looking too good for Short Social Democrats. They are basically are far behind the opposition Conservative, the party of former tenthla Angela Merkel, and the Short Social Democrats are far behind around fifteen percentage points. And the past six months, the right wing populist the alternative for Deutsche Lander af the party actually surpassed the Social Democrats in the poll, and this also showed how difficult the situation for shortice.

And I think that's the alternative for noise on the AfD, which tends to be a focus for people outside for historical reasons, but also I think people just personify fears of populism gaining sway, and especially in Europe's largest economy. But I mean, do we focus too much on them? Obviously it looks like their pollings come off a bit and they've had some scandals in the last few weeks.

In Germany also, they are pretty much in the headland and in the fold everyone's obsessed with them, not only a foreign media on Anglo Saxon and media. Obviously this is also unkettling a lot of German But there has been like a shift in a port and in the port it started at the beginning of the year with this revelation that there was a meeting of nationalist then AUSO senior up the members where they discussed basically a deportation scheme getting not only a Thilum speaker and foreigners out of the countries, but basic all of the German citizens with a citizenship but with foreign roots to kick them out of the country, which pretty much echoed the policies and in deportation schemes of other Hitler and Nazis.

And then we saw the mass demons demonstrations.

Yeah, it was pretty huge. There were like hundreds of thousands, like over several weekends. The count was basically millions of Germans took it to the streets to the protest against the far right and typically against the AfD. And after that support in the polls it started to edge down. It's still falling because there were also other scandals or revelations I would say, showed that some lawmakers or eight two lawmakers of the AfD had linked to either Chinese secret intelligence or even the Russian States.

Now there seems to be a big divide on the right in Europe about Russia, with some being very pro put in some being quite hostile to puting. Where does the a FD fall on that spectrum.

So the RD is clearly for immediate stop of weapons support for Ukraine. So this is pretty much ro Russia's high on Russia, the witch list, I would say. They are also pretty much in favor of winding back European integration, taking a power back from Brussels to Berlin. And basically if this plan does not work, they want to keep the door open for Germany to leave the European Union, So they are basically seeing Brexit Britain's exfit from the European Union as a blueprint if they don't get their way, So they are nationalists. They don't believe in closer European integration, which is also basically a goal of poutine rights to the weeken European integration. So you can divide and rule and have your weight.

And what is the relationship between the AFT and the Conservatives? Do they take votes from each other, do they support each other? How do they work together all apart?

Yeah, in Germany, this is one of the most tricky things for the opposite leader of a big maths right now, he's on the one hand talking about a Chinese wall a brand Mauer against the f DAY which means no corporation at all on any estate level, between the city Conservatives and the far right r Day. But practically he is in the part year. He did some interviews in which he basically was mimicking anti foreign rhetoric, pretty much like resembling what the Aftery is saying. For one example, Germany has given asylum to more than one million Ukrainians leading from the fighting, so he said they are stealing appointments at the dent and so the normal Germans can't get an appointment at the doctor anymore. This shows you a bit how also, who supposedly is a center right politician is changing his rhetoric in an attempt to secure support and vote. So it shows how the r D is also influencing the Conservatives party there agenda, their rhetoric and basically with it the whole political debate.

The perspective that we might remind ourselves of is unlike in France, for example, where you have marin Na Penn, the leader of the resseantan Nationale formerly National Front, has a realistic shot looking at the poles of being the next Front president. There is no chance of having the AfD leader becoming chancellor anytime soon. But of course the question is how much do the mainstream parties feel they have to absorb those views, And you think that's very much. The Conservative Party is a different animal now than it was a few years ago before, after you had had this new rise in support.

Yeah, it has definitely shifted to the right of not so much moderate and center as it was under Anguila Mercle. But having said that, the RD of the people of future will never get that strong that it would be even getting close to winning the Chancery. And even there's actually no coalition constellation in which the r D would currently get close to power. But the thing is now at the beginning I mentioned the three regent elections in the East, September is in fact sepdemic exactly that AFDI is still pulling pretty strong and it's projected to come in as the strongest parties in Thuringia, Saxony and Brandenburg. And this will make the whole process of coalition building really difficult for the other parties and to stick to this mantra and to this pledge that they would never work together with the af D.

I think we're beginning to understand why I left shows Field and need to drink a lot of coffee.

No, Michael, promise us you'll come back. You'll save all your stories of red wine till midnight and coffee with the German chancellor for vhotonomics.

We'll do happy to come back and join you again.

It was a lot of fun, all right, Thank you very much, Mihail Nina Bauer, who is our German correspondent in Berlin. Next Adrian I can't think of a more Adrian style guest than Wolfgang Ishinger, former German ambassador to America forty five years in the German Foreign service.

It's a real shame you can't see Adrian's face.

I don't know what to say about that. I mean, I've never been accused, even my best friends, of being a potential ambassador. I don't think I'm particularly diplomatic in the way I present things. I thought he gave a very interesting assessment of what's going on in Germany. But I started off by asking him whether Germany can spend enough on defense given that voters don't want to do so, And this is the answer he gave us.

First of all, let me be very clear about my own fundamental belief. I certainly believe that democracies are going to be able to defend themselves, their borders, their people, their territories against whatever dictatorship's authoritarian regimes. But obviously we have a problem. Democracy is the best form of government that has so far been invented, but it has a number of drawbacks, and among them rawbacks is an inherent lack of efficiency. Democracy always requires debate. There's no put in in a democracy. Who can simply say this is the way we're going to do things from now on, which makes things difficult. Sometimes we seem to take two steps forward and then one step backward. If you look at the development over the last three, four, five, six decades of the project of European integration, it's been difficult, but at the end successful process.

You say successful. But perhaps we are not spending enough money on defense. We have been a sort of free rider on America's spending on defense. Can we do anything about this suboptimal spending? Are we addressing this problem?

Well, of course you're right. The diagnosis at this moment is that we have been negligent, not only my own country, not only Germany, but Europe in general has been negligent in terms of defense expenditure. But the only reason over the last twenty five or so years to continue to have an army was to think about emergencies elsewhere, whether it was Afghanistan or outside of the European Union cause of all in Southeastern Europe, or African emergencies. The idea that we would need to go back to defend our own territories is a realization that has come upon us rather recently. We need to do a lot more to defend ourselves. We need to upgrade our defense expenditures. That's been a process that was started exactly ten years ago, in twenty fourteen, and it's been hard. It's been difficult. It continues to be difficult, especially in my own.

This process of remembering and adjusting to the fact that there is a different world. Now, how far has it got? Are you moving away from rhetoric towards real decision making in terms of spending In.

Upcoming elections in Germany, in Poland, in Hungary, in France, there will be major forces arguing that this war which Russia is currently conducting against Ukraine should be ended immediately, certainly by not delivering any more Western weapons to Ukraine, because there needs to be some kind of a cease fire and the peace of arrangement. There continue to be substantial elements of our political spectrum which are not in favor of continuing to spend more. It has been will continue to be an uphill battle.

This is why leadership matters, and democracy. Leadership matters enormously. Leaders have to address changing problems. They have to see over the parapets, and they have to mobilize the people have we got the leadership in Europe, both in Germany and in the EU more broadly, to address this mounting problem of aggression from the anti democratic world.

Let me dividing my answer into two parts. First, on Europe, look, with respect to the project of European integration, we're now confronted with a very fundamental question. The project of European integration was not about defending Europe against outside aggression. It was about integrating between Germany and France, making war among the members of the European Community or now the European Union impossible, and integrating that includes the so called internal market, which has still not been completely achieved. But it is essentially a project that has absolutely nothing to do with the military, with defense, et cetera. It was Emmanuel macam who came up a couple of years ago with this notion, we need to create a Europe which can defend itself. Now, that is an entirely different Europe than the Europe which integrates. And the problem is that we can talk about it, and we can even define what would need to be done in order to create a Europe that can defend itself. But I have to tell you it's a long road. It is a totally different project. It requires different methods, different approaches, and we certainly cannot defend ourselves as a European Union if we continue to base our decisions in Brussels on consensus or on unanimity rather than on majority rule.

You're suggesting something absolutely fundamental here, that Youurope is a solution to yesterday's problems and a deliberate evasion of today's problems.

Absolutely, that's what I'm trying to suggest to you. I think that it is. I think Emanuel Macon has a point, and I think we should give serious thought to what would it require to build a Europe that can actually defend itself. Currently we can't.

But that almost suggests we have to redesign Europe again for a different set of problems, which is a huge challenge. What could be done to start off this great reconceptualization of the European project.

Well, at the moment, the Project of European Integration we have twenty seven members. We are waiting for the countries of the Western Balkans, for Ukraine and a few other candidates to join over the next few or not so a few years, and that project needs to be continued. That's the integration project. But we need to build a second category of the European Union, which is, in the words of Macon, the defense Europe. And that requires different methods, different capabilities, et cetera, etc. And we have not even seriously started to build this. In my view, it is practically impossible to believe if one it's realistic, that we could convince all twenty seven members of the existing European Union to join into such a defense oriented European Union, a second project in addition to the integration Europe. And if my impression is correct, then of course the next question is should we try to start to build such a defense focused Europe with a smaller group of core countries. This is an idea which was developed almost thirty years ago by Wolfgang Shoybel, one of the leading German political leaders for the last number of decades, the theory of an inner circle of EU member countries. Just imagine what it might look like if Poland, Germany, France, maybe Italy, the Benelux countries, maybe Spain maybe plus the Baltic countries would get their act together and would say we are now creating a kind of additional layer in the European Union with different methods of decision making, and we will focus on our defense capabilities. We will do a lot of pooling and sharing. We will buy our military equipment together, not separately. We can save a lot of money by doing that. We will train our military people together, not separately.

What role would the UK plan this grand scheme of reinventing Europe.

I think that would be the one opportunity that I can see, if I interpret my English friends correctly, where actually our British friends might see advantage in joining, either directly or indirectly as an associate partner such a European defense project. We are already, of course linked together with the UK through NATO, But the idea of developing a European structure that would allow us to do what Donald Trump and others have been asking for now for many years, namely that we should carry a larger part of the common defense burden. I think that would be a credible answer, and Britain could be a key player in that, as being a nuclear power, being a permanent member of the UN Security Council along with France, etc. That would be an entirely different than the current one that we have in the integration Europe.

I find all these ideas extremely exciting and sympathetic, but I wanted to bring in the question of the voters. Whenever i'm we eat security people or military people or policy people, they're all very concerned about the new Cold War, about Putin, about China and the rest of it. Voters don't seem to be on board with this. They don't seem to be nervous about what's going on. They seem to think of it as a distant problem. They're more concerned about bread and butter questions rather than war and peace questions. What can the leaders of Europe or the people who are involved in security issues due to persuade people that this is a real threat or set of threats that we're facing that we haven't faced for a long time.

Let me try to give an answer to this question by focusing on particularly on my own country of Germany, which of course I know better than most of the neighboring countries. If you take a good look at German foreign security and defense policy and the evolution of that, you will find that there is no country in the West that has concluded as dramatic a change of fundamental principles of their foreign policy, security policy, and defense policy. I'll give you an example. Have been an active member of the German diplomatic service for forty five years or more, and we used to treat it as a sacred dogma that Germany would never ever deliver weapons, lethal weapons into an area of conflict or war. That was considered to be in the aftermath of World War Two, a moral principle appropriate for the country that had started not only World War Two, but the Holocaust, etc. Now, when you look at what's going on right now, this country that until two years ago had promised never to deliver a weapon into an air of conflict is now the number one provider of little weapons to Ukraine, far ahead of France, even ahead of the United Kingdom, only second only to the United States. We've completed a one hundred and eighty degree turn, at least with respect to this principle of arms deliveries.

Arms expert, How does that align with public opinion?

Though I think it is. You will find in polling data, you will find that German enthusiasm for spending more money on military support for Ukraine, for financial support for Ukraine is still significant. It has gone down a bit, which is normal. The democratic support, voter support will tend to go down if no discernible victory is at hand. And there's more. In Ukraine has now been going on for two years, and obviously people have now been focusing more on Gaza, and on Israel, and on on other catastrophic events around the world. But in principle, I think Germany is still on course, and I would expect our Ukrainian friends to know and to be certain that Germany will continue to deliver what we have promised, including in additional arms deliveries and other support. But it now comes to big butt. The voter support is affected by really extremely effective Russian propaganda. I have actually never ever, in the fifty years that I've been in this business, I've never experienced anything quite like it. And I do a lot of public speaking these days, several times a week. I'm here in Hamburg, I'm in Munich and elsewhere, and wherever I speak, surely somebody will get up in the question answer period and we'll say, but the Russians have a point, don't they. We have encircled them, NATO has encircled them, and they're only defending their own right and America would never allow the Soviet Union to be based in Mexico. Right. These types of Russian arguments have been extremely effective in my country, but also in some of the neighboring countries. In other words, this effort to maintain voter support needs to be continued with. And you mentioned the word this requires leadership. It really requires leadership. Sometimes I think that our own chancellor has not shown enough ability to explain to the voters at large why we're doing this. The real important point which should be made to every single voter in you U is the Ukrainians deserve our support, not because they defend their own country vigorously, but because the defend the freedom of all of Europe absolutely.

I wanted to ask you more generally about the relationship between the United States and Europe, particularly about the possibility of Trump winning the next election. What does that mean for Europe's defense, Because there's one thing that Trump hates above all others. That's the notion of being taken for a ride, being made a fool of, and he believes that's the case with Europe and the United States over many decades. Now, what do we do to keep the alliance strong and vigorous. If Trump wins the election.

Again, I would offer a cad of a differentiated answer to this question. First, not everything that Donald Trump decided to do or decided not to do during his tenure as president was terribly wrong. As I recall the first US president who decided to deliver weapons to Ukraine. That wasn't Obama. It happened on Donald Trump's watch. He criticized Germany and the European allies correctly for not fulfilling their own promise of coming up with two percent of GDP on defense. He had a point, a very important point. I think we're now doing better this summer. There will be before the US elections, will be a NATO summit in July, I guess, or end of June in Washington, DC, and I think that NATO will be able to announce that a significant majority of NATO countries are now meeting the two percent goal, which will take away one but quite obviously we need to do much more than that the two percent which we decided to use as a measure in twenty fourteen. I think today, given the fact that there is now a full scale more started by Russia, two years ago. We need to consider the two percent goal as the minimum. We should actually aim for three percent, if you want my opinion. Presenting that to a public which believes that is very important that we do more about broken infrastructure, rebuilding schools, better hospitals, higher social welfare expenditures, etc. Is tough, but it is necessary. Europe could have a year ago decided to give priority in the business environment of all of Europe to the production of ammunition, arms productions, etc. Etc. That would have required a rather fundamental priority setting decision by the entire European Union. Didn't happen. Unfortunately, we lost a year. We're now doing a little bit of that here and there. But may I remind you the EU promised Grandiosli many months ago that we would deliver one million pieces of artillery ammunition to Ukraine by the spring of this year. It's not happening. We're delivering less than half of that. In other words, the European Union has unfortunately presented itself as a paper tiger in this battle, where when you look at the hard facts, of course, the GDP of Russia, of the entire Russian Federation, is about the size of the GDP of Spain, and if you take the entire European Union plus the United States plus the UK plus Canada, you can come up with a number that said, as our economic power, our production capacity is twenty five times that of Russia. So why are we not using that more? And that requires leadership decisions, of course, which are not necessarily only military decisions. These are decisions that require fundamental economic, financial and strategy decisions, which unfortunately we have not been capable of taking so far. So I continue to believe this is an uphill battle. Our publics in Europe have, at least some of them, have not yet fully understood that we have a more in Europe, that this is not the continuation of the last thirty years of peace throughout the continent, that we're in a different era that requires different answers, and this is why this continues to be a really hard, uphill battle.

I just wanted to ask you about one other aspect of public disillusionments with the elites of Europe, and that is migration, particularly illegal migration. How much of a threat to democratic security is this, both in terms of a perception that we don't have secure control of our borders, but also a sense of disillusionments amongst lots of voters that the system is working for them, that they're not in control of their lives.

I worry about that. A lot the decision makers throughout the European Union have tended to underestimate the frustration within the voter base with illegal migration. I share the view of many who believe that we should keep our doors open to people who flee the horrors of Sudan or Afghanistan or Iraq, et cetera, et cetera. But then again, we can't possibly take them all. We do need better control of our borders. Sure that the current British effort at the Ruanda effort is the best answer, but at least the British government is making an effort to find a solution. I think we need to look for these types of solutions. Hopefully ways can be found to avoid too much hardship for people who've already made to Europe and whom we wish to go back to their home country, whether it's Africa or the Middle East.

Worldspheare because the great fear is that if mainstream democratic politicians can't address this problem, then countries will turn to authoritarian populaces to solve this problem.

The IFDA has benefited over the last number of years from a number of different issues. There was a concern about the euro initially a decade ago during the financial crisis. Today, the main driver for the success of the right of the far right in Germany is migration, quite obviously, and we have not yet found the border control mechanisms that would allow us to bring these voters back to mainstream parties. I'm afraid that in local elections this year we will see a very unwelcome result of significant increases of right wing parties, especially the IFD, primarily because of the migration issue.

Terrible to end on that very pessimistic note, but thank you very much for your interview.

Thank you very much.

It is quite moving to hear somebody who, as he says, spent forty five years in German foreign service, talking about going from representing a country that was pacifist and wouldn't ever contemplate in an article of faith that they would not send arms abroad, and now, in his words, it's one hundred and eighty degrees different, and now Germany is the second largest supplier of arms to the Ukraine after America. To hear him talk about how extraordinary that changes was powerful.

Yes, I thought it was very powerful, and it's an interesting story of in Germany resistance and doubts, but then really coming to terms with the fact that the world has changed in very profound ways, not just in terms of a willingness to spend money on defense, which for obvious historical reasons they've been very reluctant to do, but also a willingness to reconceptualize what the EU is about. Germany's has invested such extraordinary emotional and intellectual capital in building the European Union. This peace project was so central to their sense of identity. But now this is a man who's been at the heart of this process saying we have to rethink it. I think that's extraordinary.

Do you actually think that is where other leaders in Europe are? I was struck by the fact that he thought, basically there was no way you could move ahead in that sort of defense direction with all the current members that alone, all the other ones that are coming down the track quite soon. Obviously we hear from President Macron, but are there going to be enough like minded countries who are able to move fast enough.

To do that I think obviously Macrons and certain people in France are really thinking very hard. I think you did have a big problem that you have a professional bureaucratic class in the European Union, which is very conservative. For these are people who trained to keep running the machinery as it's always been running. But I do get the sense that in the capitals that matter, I Germany, in France, there is some serious rethinking that. There is a lot of rethinking in Sweden and the Nordic States. And you have to remember that these Nordic states now they was join NATO. It's thinking very much about defense and the great tragedy here, one of the many great tragedists to do with Brexit is Britain would have been absolutely vital central to such a reconceptualization of what Europe was about, and with our traditions of defense and our traditions of having a global view.

But in this new European defense arrangement there would be a role for.

The UK, absolutely, but we'd be coming in from outside. It's very different from being a sort of inside player helping to design the system. Not only did we make a mistake, we left it exactly the wrong moment.

You and I have discussed this, but it made me think a bit about really what I thought rather excellent piece that the historian Timothy Gartinash has written in the New or Review Books recently, and I recommend lots of people to read it. He describes He says, well, the end of history, the sort of Fukiyama idea was an American idea, but it was the Germans who lived the neo Hegalian dream more than anybody else. Germany, Europe and the West altogether. It was based on the idea that they all had a model which everyone else would converge on, and globalization would go with democratization and all these things we've talked about in the past. It was the basis for having China come into the World Trade Organization. That sort of democracy and capitalism would support each other and you would have this global economy where lots of countries were moving in the right direction. Germany had more vested in that model than even the US did.

Oh Actually, globalization dream was soonified by Germany because Germany had this idea that they could trade with China, they could provide all the machine tools for China that they could expand Eastwoods, that they could set up factories in Russia where whenever you went to conferences in Russia in the early part of this century, the Germans were massive presence. Not only did they reach the end of history, but there are free riders on the end of history because America paid for their defense, so they could live in this wonderful sort of pacifist country, trading with the whole world. And yes it was the Hegelian.

Navana, but is that's why you get this sense that there's a sort of deep angst that comes from and a sort of deer in the headlights that across society. We heard earlier from Mikhail talking about the coalition sort of quite unusual to have so many of these three big parties in the coalition, and that there's a sort of stalemate that comes from that. But it's actually a sort of national stalemate because so much was vested in that, and it just the idea of really fundamentally moving away from that post war model. It's absolutely very challenged.

That they had this position of not just the end of history, but a sort of holiday from history. They had twenty or thirty years of everything being really good for them. They could just be rich and peaceful. And now you see them asking a series of very profound questions. Now, when Germans asked profound questions, some very good things happen, as such as they rethink things from the very pot they come up, some very bad things happen, and.

They come up with delicious new compound words, and.

Perhaps they even produce a new Hegel. But Hagel said, the owl of Minerva flies only at dusk, this terrible idea that perhaps the Germans rethinking.

And the way to read that, the way that we're supposed to read that the alum nervous wisdom. So you only find out what everything's about right at the air right.

But on the other hand, the dark side of this is that you do have the a FD rising. You have certain things that have been banned for a very long time, unthinkable for a very long time, and now thinkable again. And that is, you know, that is worrying.

I did think it was interesting that he said, I'm just going to quote him. I'm not saying the current British effort Rwanda is that answer, but at least it is making an effort. And his point was that Germany, when you did the interview but I thought it was interesting he was saying, as indeed is the opposition leader in Germany, that some kind of Rwanda star scheme may be needed.

Absolutely, I'm not sure about a Rwanda Stace scheme, but you do have a sense right around the sort of respectable circles in Europe that people are saying, we don't like this scheme in Britain looks perhaps a bit foolish, but we can't just go on criticizing public discontent with the level of immigration. Public worries about the number of refugees or legal immigrants coming across the seas or coming into their countries in different ways is something that needs to be dealt with, because if we don't deal with it, then the AfD really will take off even more than it has well.

And I was in Zurich this week. While I was in Switzerland, which has obviously been still doing pretty well, and it's got very low inflation. It's even dodged that bullet over the last few years, very rich, prosperous economy by any definition they want. They've now reached a critical number of signatures for a petition to have a plebasit for capping the population at ten million, it's now at nine. I don't know that, and in fact that employers they have enormous labor shortages. They really struggled to be the opposite. But there is a lot of momentum behind this proposal to have a cap population, which actually, if you think about it, is slightly odd because if you don't want lots of foreigners and you've got a shrinking population, that would mean that you're allowing for all of the growth to be through immigration. But it was very struck because I didn't I hadn't actually hadn't crossed my radar. And that's even in Switzerland, which is doing well by any measure, they want to limit numbers. I think that suggests we need to do just Swiss photonomics could be a stretch. I think that people who've managed to get to the end of the German vhotonomics may.

Think, Okay, thanks for listening to this week's photonomics from Bloomberg. This episode was hosted by me alegra Stratton, Adrian Waldridge, and Stephanie Flanders. It was produced by Somersadi, with hell from Chris Martlou and Julia Mann's editorial direction from Victoria Wakeley. Sound designed by Moses and Dam with assistants from Blake Maples. Brendan Francis Newnham is our executive producer. Stage Bauman is Head of Podcasts. Special thanks to Wolfgang Ischinger and Michael Nina Bauer. Please subscribe, rate, and review wherever you listen to your podcasts

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