EsadeGeo Daily Digest, 30/10/2019

The Guardian – Rowena Mason / Brexit: Parliament breaks deadlock with vote for 12 December election

  • MPs voted on Tuesday to resolve the deadlock of Brexit by calling a general election, setting the stage for a 12 December contest that could be the most unpredictable in a whole generation. Boris Johnson won his fourth bid to go to the polls by 438 to 20 after Jeremy Corbyn declared that Labour would support an election as a “once-in-a-generation chance to transform our country”. The pre-Christmas vote will be the first December poll since 1923. The Parliament will dissolve next Wednesday.
  • Corbyn set the stage for his campaign by calling on voters to expel Johnson’s Conservatives who think they are “born to rule”, while Jo Swinson, the Lib Dem leader, said it was “our best chance to elect a government to stop Brexit”. Johnson, in a move to unite his party, decided to readmit 10 of the 21 MPs he expelled last month for defying his Brexit plan.
  • The Conservatives will campaign to get Brexit done by pushing through Johnson’s deal, while Labour is promising a second referendum to let the people resolve the EU question. The Brexit party will try to outgun the Tories by arguing for a no-deal Brexit, while the Lib Dems will seek to attract remain voters from Labour by pledging to revoke article 50.
  • POLITICO – Annabelle Dickinson, Emilio Casalicchio & Eleni Courea / UK rolls the dice on Brexit election

The Economist / Saad Hariri, the prime minister of Lebanon, steps down

  • On October 29th the Lebanese prime minister, Saad Hariri, said he had reached a “dead end” trying to deal with their demands over corruption and the stagnant economy. A package of meagre reforms, announced on October 21st, satisfied no one. Consequently, Mr Hariri said he was stepping down, along with his government. Mr Hariri’s government had struggled to perform the most basic tasks, such as provide 24-hour electricity or drinkable water. Moreover, Internet connections in Lebanon are among the world’s slowest and rubbish pile up in the streets.
  • Despite the resignation, Mr Hariri’s departure is unlikely to persuade the demonstrators to end their campaign, since a rotten political system is at the heart of Lebanon’s problems. The agreement that ended the country’s civil war in 1990 created a sectarian power-sharing arrangement that remains in place today. Government posts and public-sector jobs are divvied up among Sunnis, Shias and Christians, regardless of their merit. However, protests have remained remarkably peaceful and non-sectarian so far.
  • Al-Monitor – Nicholas Frakes / What takes Lebanese women to front line in protests?

Financial Times – Martin Wolf / How the euro helped Germany avoid becoming Japan

  • A tragedy of the eurozone, especially of Germany’s role within it, is that the transition to thinking about how income and expenditure add up at eurozone and global levels has so far failed to occur. This is a partial explanation of German hostility towards the policies of the ECB, although these policies will not fundamentally change and they even may have to become more aggressive. If so, the disaffection revealed in resignations by three German officials from the ECB board, and in attacks by German policymakers, will worsen.
  • What are the euro’s benefits to Germany? An answer comes from a comparison with Japan, an economy that it most closely resembles. Both were reborn from the ashes of the second world war as allies of the US and dynamic exporters of manufactures. They are the world’s third and fourth largest economies. They also have the world’s second and third highest median ages. Not surprisingly, both countries also have huge surpluses of private savings over investments. Between 2010 and 2017, the surplus of private savings over investment averaged some 7 per cent of gross domestic product in Germany and 8 per cent in Japan. The composition was different, however: the savings surplus of households was 72 per cent of Germany’s overall private surplus, while the corporate sector’s surplus was 76 per cent of Japan’s.
  • As a country, Germany could help to shift the balance of desired savings and investment worldwide. As the world economy slows and even Germany’s economy shows signs of weakness, as foreign demand lags, the case for this grows. Policymakers in Germany and elsewhere should promote public and private spending — investment, above all. Huge opportunities do seem to exist. Moreover, the chance to borrow at today’s ultra-low long-term interest rates is a blessing, not a curse.

The Washington Post – Ishaan Tharoor / The anti-neoliberal wave rocking Latin America

  • The political map in Latin America looks vastly different now in the shadow of Mauricio Macri’s defeat. A bribery scandal forced the 2018 resignation of Pedro Pablo Kuczynski of Peru. Jair Bolsonaro of Brazil has had a tumultuous first year in office and finds himself increasingly politically isolated. Earlier this month, mass protests in Ecuador against an unpopular package of austerity measures saw Lenín Moreno temporarily relocate his government away from the capital. In Chile, the largest protests in a generation saw more than a million people take to the streets of Santiago on Friday. 
  • Whatever ails the continent’s sluggish economies and polarized societies, mild-mannered center-right politicians like Macri can’t muster a response. We may see, as political scientist Oliver Stuenkel suggests, “more economically liberal candidates joining illiberal nationalist forces, as happened in Brazil.”
  • However, even Bolsonaro’s political experiment is a fragile one and could face a similarly angry backlash if he fails to deliver on his economic promises. “We will see to what extent this will last for Bolsonaro, who seems to be the true heir of Pinochet,” said Federico Finchelstein, a historian at the New School for Social Research in New York. “Eventually Brazilians may reject him, too.”
  • The Guardian – Kirsten Sehnbruch / How Pinochet’s economic model led to the current crisis engulfing Chile

The selected pieces do not necessarily reflect the views of Javier Solana and EsadeGeo. The summaries above may include word-for-word excerpts from their respective pieces.

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