Turkey witnessed some major developments over the last year. In August 2018, the dramatic Lira devaluation caused the Turkish economy to go into recession. In the 2019 local elections, which took place during the economic downturn, the Republican Peoples’ Party (CHP) mayoral candidates took control of Ankara and Istanbul after 25 years of dominance by the ruling Justice and Development Party (AKP).

The election results might lead to a rethink of the AKP leadership and consequences on Turkish politics will depend on Erdoğan’s interpretation of this reversal of his political fortune.

Will this affect the long-standing alliance between AKP and MHP that has characterised Turkish foreign policy for the past few years? What impact will this have on both the domestic and international level? Finally, will Turkey’s recent incursion into Syria have lasting effect on the country’s alliances with other powers and its standing?

In this context, the speaker will analyse the significance of these changes and the future trajectory of Turkish politics, economics and foreign policy.

On 12 December, Britain will hold the most consequential election in its postwar history. The outcome of the election will influence not only the fate of Brexit but also the likelihood of a second referendum on EU membership, a second independence referendum in Scotland, the most economically radical Labour Party for a generation, Britain’s foreign and security policy and, ultimately, its position in the wider international order.

If you look only at the latest polls, then the outcome looks fairly certain. Ever since a majority of MPs voted to hold the election, the incumbent Conservative Party has averaged 38%, the opposition Labour Party 27%, the Liberal Democrats 16%, Brexit Party 10%, Greens 4% and Scottish National Party 3%. Prime Minister Boris Johnson and his party continue to average an 11-point lead which, if this holds until the election, would likely deliver a comfortable majority.

Johnson can also point to other favourable metrics. When voters are asked who would make the ‘best prime minister’, a clear plurality (43%) say Johnson while only a small minority (20%) choose the Labour Party leader, Jeremy Corbyn. Polls also suggest that, on the whole, Johnson is more trusted by voters than Corbyn to deal with Brexit, the economy and crime, while Jeremy Corbyn only tends to enjoy leads on health. All of this lends credence to the claim that Britain could be set for a Conservative majority and, in turn, the passing of a withdrawal agreement bill in early 2020.

But these polls also hide a lot of other shifts that are taking place and which, combined, make the 2019 general election unpredictable. One concerns leadership. While Boris Johnson enjoys stronger leadership ratings than Jeremy Corbyn, it should be remembered that what unites Britain’s current generation of party leaders is that they are all unpopular. Data compiled by Ipsos-MORI reveals that while Johnson has the lowest ratings of any new prime minister, Labour’s Jeremy Corbyn has the lowest ratings of any opposition leader since records began.

Another deeper shift is fragmentation. One irony of Britain’s Brexit moment is that ever since the country voted to leave the European Union its politics have looked more ‘European’. Over the past year, one of the world’s most stable two-party systems has imploded into a four-party race, with the anti-Brexit Liberal Democrats and Nigel Farage’s strongly Eurosceptic Brexit Party both presenting a serious challenge to the two mainstream parties.

In the latest polls, for example, Labour and the Conservatives are attracting only 61 per cent of the overall vote, well down on the 80 per cent they polled in 2017. Labour is weakened by the fact that it is only currently attracting 53 per cent of people who voted Labour at the last election, in 2017. A large number of these 2017 Labour voters, nearly one in four, have left for the Liberal Democrats, who are promising to revoke Article 50 and ‘cancel Brexit’. This divide in the Remain vote will produce unpredictable outcomes at the constituency level.

At the other end of the spectrum, the Conservatives are grappling with a similar but less severe threat. Nigel Farage and the Brexit Party are attracting around one in ten people who voted Conservative in 2017, which will make Boris Johnson’s task of capturing the crucial ‘Labour Leave’ seats harder. There is clear evidence that Johnson has been curbing Farage’s appeal, but it remains unclear how this rivalry on the right will play out from one seat to the next.

One clue as to what happens next can be found in those leadership ratings. While 80 per cent of Brexit Party voters back Johnson over Corbyn, only 25 per cent of Liberal Democrat voters back Corbyn over Johnson. Johnson may find it easier to consolidate the Leave vote than Corbyn will find the task of consolidating the Remain vote.

All of this reflects another reason why the election is unpredictable: volatility. This election is already Britain’s fifth nationwide election in only four years. After the 2015 general election, 2016 EU referendum, 2017 general election and 2019 European parliament elections, Britain’s political system and electorate have been in a state of almost continual flux. Along the way, a large number of voters have reassessed their loyalties.

As the British Election Study makes clear, the current rate of ‘vote-switching’ in British politics, where people switch their vote from one election to the next, is largely unprecedented in the post-war era. Across the three elections held in 2010, 2015 and 2017, a striking 49 per cent of people switched their vote.

This is not all about Brexit. Attachment to the main parties has been weakening since the 1960s. But Brexit is now accelerating this process as tribal identities as ‘Remainers’ or ‘Leavers’ cut across traditional party loyalties. All this volatility not only gives good reason to expect further shifts in support during the campaign but to also meet any confident predictions about the election result with a healthy dose of scepticism.

On 12 December 2019, the United Kingdom will hold one of its most crucial elections in the 21st century. The result will have a direct impact on the Brexit process and will most likely determine the country’s future direction for years to come.  

Yet the final outcome is far from predictable. It seems quite certain that the 2019 election is unlikely to produce a clear two-party share of the vote as happened back in 2017. Public trust in politicians is low and party loyalty is looser than ever. Polls show that Brexit it overwhelmingly considered as the main issue among the electorate alongside a deep concern about the future of public services. This raises multiple questions: can the 2019 election represent a chance to unite the country and move on? Will cross-party identities of ‘Leavers’ and ‘Remainers’ translate to how people vote in the election? And what will the outcome mean for Brexit and the future of party politics in Britain? 

Attendance at this event is by invitation only. 

Genuine ideological differences have returned to British politics. That is as true in foreign policy as in questions of domestic politics. The post-Cold War foreign policy consensus in UK politics around liberal multilateralism is fraying.

This tradition had some key characteristics. It saw Britain as one of the cornerstones of an international order built on a liberal (or neo-liberal if you prefer) approach to economic globalization. EU membership was considered central to Britain’s influence and prosperity (even if further political integration never had deep support). Security policy was grounded in a stable package of NATO membership, close ties to the US, nuclear deterrence and a willingness to conduct military intervention.

Both main parties accepted that foreign policy had a commercial dimension. Both were willing to sell arms abroad to regimes with dubious domestic records.

Despite differences of emphasis, and some moments of genuine disagreement, foreign policy did not undergo big shifts as different parties traded periods in office. That may be set to change. 

Party divides

On the one hand, Labour wants to reset and re-orientate Britain’s international role based on human rights and international law. It promises a new internationalism and to end what it glibly calls the ‘bomb first, talk later’ approach, alongside a human rights-driven trade policy. More concretely, it promises to legislate to ensure Parliament takes decisions on military action, boost resources for the underfunded Foreign Office and suspend arms sales to Saudi Arabia for use in Yemen.  

In Jeremy Corbyn, they have a leader with roots in a distinct left-wing ideological tradition of internationalism that blends a commitment to international solidarity alongside anti-imperial and anti-war sentiment. He has spent his career as a sharp critic of Israeli and US policy, while championing various international political causes, some more radical or fringe than others. His historic positions on issues like NATO and nuclear deterrence, while not represented in the party manifesto, demonstrate a personal radicalism that no recent Labour PM has embodied.

His willingness to challenge the failures of the hitherto centre ground of foreign policy – particularly on military interventions from Iraq to Libya – is an under-appreciated aspect of his appeal among many supporters, even while it is one of the sharpest lines of attack from his critics. Boris Johnson’s chauvinistic rhetoric could not stand in sharper contrast to Labour’s commitment to conduct an audit of the effect of Britain’s colonial legacy on violence and insecurity.  

The Conservative manifesto asserts their pride in Britain’s historical role in the world, followed by a broad set of largely rhetorical commitments to bolster alliances and expand influence. An ambitious free trade agenda points to a more economic and commercially driven foreign policy, the inevitable trade-offs and constraints of which are only beginning to be addressed and debated.

There is an underlying sense that Britain will be liberated from the constraints of EU membership, although beyond trade there is little that would not have been possible, or in most cases easier, from within the EU. As my colleague Richard Whitman has observed, the empty bromide ‘Global Britain’ has been dropped altogether, though beyond the idea of a new UK space command and a stronger sanctions regime, there is little that is new or specific.  

Not all the consensus centre-ground position has been abandoned. Both major parties remain committed to spending 2 per cent of GDP on defence and 0.7 per cent of gross national income on development in their 2019 manifestos.

But beyond their manifesto commitments, prime ministers can exercise extensive powers in foreign affairs through the royal prerogative. Their government can choose to recognize other states, as Labour intends to do with Palestine. They can sign international treaties. And at present, in the absence of the sort of war powers act proposed by Labour, they can conduct military action without recourse to Parliament, which has no legally established role in this area.

Even a weak minority government would have considerable scope to transform the tone of Britain’s diplomacy.

Foreign policy as a partisan political issue

If UK foreign policy becomes more partisan, this will have longer term implications. Voters will theoretically have greater scope to shape and influence foreign policy more directly. Foreign policy may become divisive if it becomes more partisan. It may also become less consistent, which will affect the capacity of the UK to show leadership over the longer term on issues on which there is no domestic consensus. Britain’s allies may need to manage a less reliable partner. The diplomatic and security apparatus of Whitehall will need to be more adaptable.  

British elections generally don’t turn on foreign policy questions; 2019 will not buck that trend. At the same time, this election will be very influential in shaping Britain’s position on the world stage and its approach to international issues. Boris Johnson and Jeremy Corbyn represent very different ideas about Britain’s role: its foreign policy, its alliances, and indeed its idea of itself. The Brexit context makes these political undercurrents on foreign policy matter all the more.

Foreign policy may not matter that much to most voters, but these elections matter for foreign policy. 

What does the UK election result mean for Brexit and forthcoming trade negotiations with the EU?

The most important thing is that it means Brexit will definitely happen. Since the referendum, we’ve had three-and-a-half years of continued uncertainty where all outcomes were still possible. We now know that Brexit will become irreversible from 31 January.

That’s the biggest thing, because I think that will have a big psychological impact on politics, both in the UK and also on the EU side. The EU has been working with a partner that has been unsure about its direction, and perhaps some had still hoped that the process might still be reversed, but that direction is now completely clear.

Obviously the first order of business is to pass the withdrawal agreement, which should be pretty straightforward given the majority that the Conservatives have. That’s a formality now.

Then, the question becomes about the level of ambition for the next year. It is an exceptionally ambitious timetable to negotiate, ratify and implement a new relationship before the end of the transition period in December 2020.

What is achievable by the end of next year?

I think there are three possible outcomes here. One: that timetable doesn’t work and Boris Johnson follows through on his pledge to leave the transition period anyway, leading to a ‘no trade deal’ outcome.

Two: the negotiations are able to deliver something by the end of 2020, either because the depth and ambition of any agreement is relatively low level (what Michel Barnier has called a ‘vital minimum’)  and/or because they come up with some type of compromise on the process which is not called an extension, but something else: a type of temporary agreement or a new implementation period.

This is a situation where you might have a bare-bones agreement for the end of the transition period, but with an extended period of negotiation for different unresolved issues. The EU will probably insist upon level playing field guarantees and fishing access rights as a component of any such agreement.

Three: Boris Johnson breaks his manifesto pledge not to extend the transition. Now, he has stared down the barrel of leaving with no deal before and he made a political judgment that it was better to make significant compromises on his negotiating position than to follow through with ‘no deal’. I suspect he might make that same judgment again.

No option is ideal. The first is the most economically disruptive, the second means the EU will be in an even stronger position to dictate terms and the third means breaking a manifesto pledge.

How important is that end of transition deadline now? It was an important issue for the Brexit Party and hardliners in the European Research Group of Conservative MPs. But given the size of a majority, he may need to worry less about them. Is the transition deadline that important to people who voted Conservative, especially if he can show that he has taken the UK out of the EU by the end of January?

I think there may indeed be some political space for Johnson here, given the size of his majority and given that the first phase of Brexit will have been done, along with the debate about withdrawal.

There will be a lot of difficult, technical negotiations in all sorts of areas, some of which I think will become quite rancorous, but won’t necessarily become front page news in the way some of the first phase of negotiations has, not least because you won’t have the theatre of a hung parliament.

Hopefully, there will be more focus on the substance of the agreement, and the debate will be about the consequences of divergence versus staying more aligned with the EU, which is basically the central question now about the future relationship.

I still think for UK prime ministers to pick arbitrary dates, and then to make domestic political promises based around them, actually undermines the UK’s negotiating position. It would be in Britain’s interest to have more flexibility rather than a ticking clock.

Moving to the other big story from the night, the SNP won 48 of 59 seats in Scotland. How does the debate over Scotland’s future in the United Kingdom play out from here?

The SNP has really strengthened its position, more than many expected. This is now set up for a huge constitutional struggle over the future of the United Kingdom.

I think there is a key dilemma for Scottish independence supporters, which is that on the one hand Brexit greatly strengthens the political case for independence. The difference between the political preferences in Scotland and the rest of the UK, particularly in England, is a perfect demonstration of that.

At the same time, once the UK has left the EU, independence becomes much more difficult technically and economically. There will be many of the same difficulties that there have been in discussing Northern Ireland’s relationship with the Republic of Ireland. There will be a difficult debate over the currency. There are all sorts of challenges to creating a trade or regulatory border between England and Scotland. This is particularly true if there is a harder Brexit outcome, where Britain leaves the EU without a large amount of regulatory alignment.

On demands for a second independence referendum, I think in the first instance Boris Johnson will simply refuse to hold one. It’s probably not in his short-term interest to do anything else. Theresa May played it this way in 2017, repeatedly saying ‘now is not the time’.

In a similar way I think Johnson will just try to ride the pressure out, to the point where the SNP will need to face the challenges of advocating independence with the UK outside the EU. The next flashpoint will be the elections to the Scottish Parliament in 2021.

Ultimately, though, it will become a democratically unsustainable position if Scotland continues to vote for the SNP, and refusing to sanction a second independence referendum might only reinforce that sentiment.

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In recent decades, political party systems across Europe have fragmented and electoral volatility has increased. The number of parties represented in parliaments across the continent has grown and the formerly dominant mainstream parties have seen their support base collapse, forcing parties into often uncomfortable and unstable coalitions.

From the United Kingdom to Germany, politicians and commentators talk of such scenarios in often apocalyptic terms and associate it with political instability and policy paralysis.

They shouldn’t. Instead they should focus their energy on making these increasingly competitive political markets work.

The Netherlands is frequently held up as a prime example of this process, which is therefore sometimes referred to as ‘Dutchification’. Its highly proportional political system has created the opportunity for new parties and specific interest groups to win parliamentary representation, ranging from an animal rights party and a party catering specifically to the interests of the elderly.

This has been accompanied by increased electoral volatility. In the 1970s, less than 15% of seats in the Dutch parliament would change party at any election, but in the last election in 2017, this was just over a quarter. The system also created space for the relatively early rise of populist far-right parties, though it was not the cause of their rise.

Nevertheless, despite the regularly difficult coalition politics, it remains one of the most well-governed countries in the world.

A short history of fragmentation

Looking at the effective number of parties represented in parliaments, the number of parties, corrected for their size, provides a good measure of the extent of fragmentation. In the Netherlands this steadily increased from around four in the 1980s to over eight following the election in 2017. Even the populist far-right vote has fragmented, with two parties partly competing for the same electorate. In other countries it has been a more recent phenomenon. Spain remained a de facto two-party system until the financial crisis. Dissatisfaction with both mainstream parties has seen challenger parties on both the left and the right attract significant support, making it harder to form stable coalitions. Political fragmentation decreased slightly in Italy in recent years, but that was from a high base as it shot up in the early 1990s when the post-war political settlement crumbled.

German politics, long a hallmark of stability, is struggling with the decrease in support for the parties that dominated its political scene in the post-war period. The Christian Democrats and Social Democrats only barely managed to win a majority together in the election in 2017, at 53.4% of the vote compared with the 81.3% achieved 30 years earlier. The latest polls suggest they would only get to 40% together if an election were held today.

A similar trend is visible within the European Parliament. Whereas the two largest groups in the European Parliament, the Christian Democrats and the Social Democrats, together won 66% of the vote in the election in 1999, they did not even manage to win a majority together in 2019, taking just 39.5% of the vote.

No crisis of democracy

If electoral volatility and political fragmentation does indeed constitute some sort of crisis of democracy, we should expect to see voters become unhappy about how their national democracy functions. Largely, the opposite seems to be the case.

In the Netherlands, satisfaction with its democracy went up at the same time as Dutchification did its work. Similar trends are visible in other highly fragmented European political systems, often those with very proportional systems. Despite regular minority governments, satisfaction with democracy is above 90% in Denmark and at 80% in Sweden, according to the latest Eurobarometer data.

In comparison, it stood at 52% in the United Kingdom and 53% in France, where the electoral system has, at least on the surface, prevented the kind of fragmentation supposedly plaguing proportional systems.

Satisfaction with democracy seems to be affected by a number of factors. This includes the state of the economy, particularly in countries that were hit the hardest by the global financial and euro zone crises. Nevertheless, the data suggests that, even if we can’t say that Dutchification by definition leads to more satisfaction with democracy, it is clearly not associated with falling faith in the system.

A competitive political market

Dutchification should be seen as accompanying a more competitive political marketplace. A more emancipated, demanding and politically engaged electorate than in the post-war decades is willing to shop around instead of merely vote according to socioeconomic class or other dividing lines, such as religious ones. The fragmented parliaments that emerge as a result provide better representation of different groups within European societies.

This makes life harder for Europe’s political parties and politicians, as they juggle large coalitions, or changing coalitions under minority governments, but provides voters with more choice and democratic renewal. If handled correctly this would also allow more responsiveness to shifts in public opinion.

Such democratic creative destruction in competitive political markets is to be celebrated in a well-functioning democracy. Just as companies prefer to operate in an oligopoly, political parties prefer the stability of limited political competition. But wishing for this kind of stability comes perilously close to preferring stability over proper representation.

Worrying about Dutchification risks confusing a crisis of the traditional mainstream parties with a crisis of democracy. For some countries, particularly those like the Netherlands and Denmark which have longer histories of consensus-based politics and coalition building, this is an easier adjustment. But this should not be an excuse to not attempt to make politics work better as they were forced to go through, arguably still ongoing, adjustment processes too.

Instead of investing in futile attempts to get back to how things were in the old days, or hoping this will somehow magically happen, political leaders and parties across Europe need to reassess how they deal with the new reality of Dutchification.

Whether feared or longed for, Brexit day has arrived. It is positive for all sides that the process is thus far managed and ordered, with debts paid, rights guaranteed and borders still invisible on the island of Ireland. But in a difficult new phase of negotiations, as the UK and EU try to hammer out the terms of their relationship after 2020, Britain is at risk of repeating many of its mistakes from the withdrawal talks.

First, the government, through the negotiation timeline, has reduced its own room for manoeuvre. The failure of the initial withdrawal agreement and subsequent turbulent politics have reduced a planned 21-month transition to an 11-month one. Even though half the original negotiation time has been lost, 31 December 2020 remains in place and indeed has been written into UK law as the date the transition arrangement ends. Boris Johnson has followed Theresa May in investing symbolism and significance in an arbitrary date.

By promising not to extend negotiations, the UK is boxing itself in, creating domestic political barriers where it may well need flexibility. The familiar face of Michel Barnier, who proved adept in leading the withdrawal negotiations for the EU side, will be back in phase two to tell Britain the clock is ticking. This new timeline is intended to focus minds but more likely it will limit ambitions. 

Second, this government has continued the pattern of its predecessor in making no effort to manage public expectations about the consequences of Brexit. It is naïve to have followed the last years of British politics and expect an outbreak of sobriety and levelheadedness. The entrenched positions of each side have offered little political space or electoral incentive for realism.

During the 2020 transition period, the UK will lose the political rights of EU membership but it will retain the benefits and obligations. Most citizens and business will not be able to tell the difference. But a reckoning is inevitable. There will come a moment when the effects of this slow-motion political revolution – particularly in the hard form envisioned by Boris Johnson – become real, when the trade-offs and compromises, especially for business and the economy, will bite. The public deserve some realism about the price of sovereignty.

Third, there is a risk that government remains underprepared. While its headline goals are clear – at least in terms of what it does not want – the UK government will need thorough, realistic and coherent proposals on what it wants in every area of negotiations, and crucially develop a process by which to make political trade-offs between the demands of different sectors and issues. The government must also then prepare for their implementation in every area. This would be a huge challenge even if the final destination was already known, which it is not. 

Fourth, the continued uncertainty in the process means businesses and civil servants will again be left with little time to adapt to what will face them in January 2021 and must prepare for multiple outcomes.

‘Transition’ has always been a misleading term, since it implies clarity about the destination to which the UK–EU relationship will be transitioning. The government’s red lines for that future relationship provide a sketch: outside of the single market and the jurisdiction of the European Court of Justice, with an independent trade policy and free movement ended.

But businesses and civil servants are not likely to know until very late in the process if the basis for future trade with the EU will be in the form of a free trade agreement, to be negotiated and implemented by the end of the year, or no trade deal at all. This last outcome is a realistic prospect.

During withdrawal negotiations, the extensions were both unlimited in number and required decisions only at the last moment. In this phase, the talks may only be extended once, and that decision must be taken six months from the final deadline. It is difficult to see circumstances in which Boris Johnson agrees to break a political promise and manifesto pledge when he still has six more months to achieve his desired outcome.

The UK, it is often noted, is already fully compliant with EU law and this shared starting point is often cited as a reason this negotiation will be simple, since the parties begin in alignment. But this novel negotiation will create new trade barriers in goods and services rather than remove them. Trade deals are often politically difficult since they create winners and losers. The Brexit negotiations, in terms of UK–EU trade at least, will generally create only different levels of losers, on both sides of the Channel.

That means difficult politics, challenging negotiations and hard compromises, another reason to expect some ugly politics along the way and accept that failure is a plausible outcome.

We do not yet know how Brexit will change Britain in the long term, whether a settled majority will ever come to view it as political folly or liberation, choice or inevitability. If its politically fragile union can withstand the pressures of the next few years, the UK may yet find a new stable position on the EU’s periphery and, after a period of economic adjustment, begin to address the many pressing domestic challenges which have suffered from neglect amid the all-consuming Brexit saga.

But whatever happens in this next chapter, the EU can no longer be an excuse for national problems. As the UK takes back control it also returns accountability. In the future, there will be no one else to credit or to blame.

There are two well-established ideas in trade. Individually, they are correct. Combined, they can lead to a conclusion that is unfortunately wrong.

The first idea is that, across a range of economic sectors, the EU and the US have been engaged in a battle to have their model of regulation accepted as the global one, and that the EU is generally winning.

The second is that governments can use their regulatory power to extend strategic and foreign policy influence.

The conclusion would seem to be that the EU, which has for decades tried to develop a foreign policy, should be able to use its superpower status in regulation and trade to project its interests and its values abroad.

That’s the theory. It’s a proposition much welcomed by EU policymakers, who know they are highly unlikely any time soon to acquire any of the tools usually required to run an effective foreign policy.

The EU doesn’t have an army it can send into a shooting war, enough military or political aid to prop up or dispense of governments abroad, or a centralized intelligence service. Commission President Ursula von der Leyen has declared her outfit to be a ‘geopolitical commission’, and is casting about for any means of making that real.

Through the ‘Brussels effect’ whereby European rules and standards are exported via both companies and governments, the EU has indeed won many regulatory battles with the US.

Its cars, chemicals and product safety regulations are more widely adopted round the world than their American counterparts. In the absence of any coherent US offering, bar some varied state-level systems, the General Data Protection Regulation (GDPR) is the closest thing the world has to a single model for data privacy, and variants of it are being adopted by dozens of countries.

The problem is this. Those parts of global economic governance where the US is dominant – particularly the dollar payments system – are highly conducive to projecting US power abroad. The extraterritorial reach of secondary sanctions, plus the widespread reliance of banks and companies worldwide on dollar funding – and hence the American financial system – means that the US can precisely target its influence.

The EU can enforce trade sanctions, but not in such a powerful and discriminatory way, and it will always be outgunned by the US. Donald Trump could in effect force European companies to join in his sanctions on Iran when he pulled out of the nuclear deal, despite EU legislation designed to prevent their businesses being bullied. He can go after the chief financial officer of Huawei for allegedly breaching those sanctions.

By contrast, the widespread adoption of GDPR or data protection regimes inspired by it may give the EU a warm glow of satisfaction, but it cannot be turned into a geopolitical tool in the same way.

Nor, necessarily, does it particularly benefit the EU economy. Europe’s undersized tech sector seems unlikely to unduly benefit from the fact that data protection rules were written in the EU. Indeed, one common criticism of the regulations is that they entrench the power of incumbent tech giants like Google.

There is a similar pattern at work in the adoption of new technologies such as artificial intelligence and the Internet of Things. In that field, the EU and its member states are also facing determined competition from China, which has been pushing its technologies and standards through forums such as the International Telecommunication Union.

The EU has been attempting to write international rules for the use of AI which it hopes to be widely adopted. But again, these are a constraint on the use of new technologies largely developed by others, not the control of innovation.

By contrast, China has created a vast domestic market in technologies like facial recognition and unleashed its own companies on it. The resulting surveillance kit can then be marketed to emerging market governments as part of China’s enduring foreign policy campaign to build up supporters in the developing world.

If it genuinely wants to turn its economic power into geopolitical influence – and it’s not entirely clear what it would do with it if it did – the EU needs to recognize that not all forms of regulatory and trading dominance are the same.

Providing public goods to the world economy is all very well. But unless they are so particular in nature that they project uniquely European values and interests, that makes the EU a supplier of useful plumbing but not a global architect of power.

On the other hand, it could content itself with its position for the moment. It could recognize that not until enough hard power – guns, intelligence, money – is transferred from the member states to the centre, or until the member states start acting collectively, will the EU genuinely become a geopolitical force. Speaking loudly and carrying a stick of foam rubber is rarely a way to gain credibility in international relations.

This article is part of a series of publications and roundtable discussions in the Chatham House Global Trade Policy Forum.

This roundtable brings together German experts to discuss the country’s role in Europe and the world. Over the course of two sessions, Germany’s EU and wider foreign policy will be examined, with speakers sharing their views on where the country finds itself at the beginning of 2020 and what drives its current priorities across a number of areas. Participants will also compare perspectives on what a post-Merkel Germany might look like, now that the future leadership of CDU, Germany’s largest political party, is under question.

The event will comprise two separate sessions. Participants are welcome to attend either one or both.

08.30 – 09.30
Germany in the EU and the Eurozone

Speaker: Mark Schieritz, Economics Correspondent, Die Zeit
Chair: Quentin Peel, Associate Fellow, Europe Programme, Chatham House

Germany’s voice remains possibly the most important in any debate within the EU, including in those around the future of the Eurozone. The country has long been seen as the stalwart of the European economy and its government has always played a key role in driving Eurozone policy. However, most recent EU-wide attempts at reform have fallen short of what many claim needs to be done to complete the monetary union. The recently announced Eurozone budgetary instrument, for instance, remains very small and only focused on investment instead of stabilisation. The German government has been reluctant to go along with French President Emmanuel Macron and his structural reform proposals, though some other member states remain sceptical of his ideas for further integration too.

How can German attitudes towards the future of the Eurozone be explained? Is the government’s resistance to ambitious EU-wide economic reforms shared across the political spectrum in Germany? What stands in the way of further Eurozone reform when it comes to other EU member states? And will Germany’s reluctance to engage with reforms in this area, make it more difficult for the country to build coalitions when it comes to other EU policy areas?

09.45 – 11.00
German Foreign Policy in Perspective

Speakers: Joshua Webb, Programme Manager, Berlin Foreign Policy Forum and the Berlin Pulse, Koerber Stiftung
Dr Nicolai von Ondarza, Deputy Head, EU/Europe Research Division, German Institute for International and Security Affairs (SWP)
Chair: Dr Uta Staiger, Executive Director, UCL European Institute

Historically, Germany has been reluctant to play too active a role on the global stage, relying on its place at the heart of Europe and the transatlantic alliance. However, the current uncertain global context appears to have led to some rethinking on how the country can ensure its voice is being heard internationally, especially where its values are being challenged and its interests are at stake.

What drives German foreign policy in 2020? What are domestic priorities when it comes to trade, security and Germany’s place in the world? What shifts in public opinion may have been engendered by Brexit and Donald Trump’s presidency? What does the rise of China – and China’s growing interest in Europe – mean for Germany’s wider Asia policy?  Finally, what role will Germany play in a post-Brexit Europe? And what are the country’s priorities in its future relationship with the UK?

The speakers will discuss these and other questions, sharing the findings of a recent German public opinion survey and compare these with international expert perspectives. 

Since the 2018 economic crisis, when the value of the lira plummeted and borrowing costs soared, Turkey’s economy has achieved a miraculous ‘V-shaped’ economic recovery from a recession lasting three quarters to a return back to quarterly growth above 1 per cent in the first three months of 2019.

But this quick turnaround has been built on vast amounts of cheap credit used to re-stimulate a consumption and construction boom. This so-called ‘triple C’ economy generated a rapid growth spurt akin to a modestly able professional sprinter injected with steroids.

This has made the currency vulnerable. The lira has steadily depreciated by 11 per cent against the US dollar since the beginning of 2019 and crossed the rate of 6 lira versus the US dollar on 7 February. And there are further warning signs on the horizon.

Credit bonanza

Statistics reveal that Turkish domestic credit grew by around 13 per cent on average throughout 2019.  The credit bonanza is still ongoing. Mortgage-backed home sales jumped by a record high of 600 per cent last December alone and the 2019 budget deficit catapulted by 70 per cent due to higher government spending.

Turkey’s central bank fuelled this credit expansion by cutting interest rates aggressively to below inflation and, since the start of this year, purchasing lira-denominated bonds equivalent to around one-third of total acquisitions last year to push yields lower.

Equally, it has linked bank lending to reserve requirements – the money that banks have to keep at the central bank – to boost borrowings via state and private banks. Banks with a ‘real’ loan growth (including inflation) of between 5 and 15 per cent enjoy a 2 per cent reserve ratio on most lira deposits, which authorities adjusted from an earlier band of 10-20 per cent that did not consider double-digit inflation.

Cumulatively, bond purchases (effectively quantitative easing) and reserve management policies have also contributed to eased credit conditions.

Commercial banks have also reduced deposit rates on lira accounts to less than inflation to encourage consumption over saving. Together with low lending rates, the boost to the economy has flowed via mortgages, credit card loans, vehicle leasing transactions and general business borrowings.

Accordingly, stimulus is at the forefront of the government’s economic approach, as it was in 2017 and 2018. It does not seem to be implementing structural change to re-orient growth away from consumption towards productivity. 

In addition, governance is, again, a central issue. President Recep Tayyip Erdogan’s near total monopolization of policymaking means he guides all domestic and external policies. He forced out the previous central bank governor, Murat Cetinkaya, in July 2019 because he did not share the president’s desire for an accelerated pace of interest rate reductions.

New challenges

Despite the similarities, the expected future financial turbulence will be materially different from its 2018 predecessor in four crucial respects. 

Firstly, foreign investors will only be marginally involved. Turkey has shut out foreign investors since 2018 from lira-denominated assets by restricting lira swap arrangements. Unsurprisingly, the non-resident holdings of lira bonds has plummeted from 20 per cent in 2018 to less than 10 per cent today.

Secondly, the Turkish government has recently introduced indirect domestic capital controls by constraining most commercial transactions to the lira rather than to the US dollar or euro to reduce foreign currency demand in light of short-term external debt obligations of $191 billion.

Thirdly, the Turkish state banks are intervening quite regularly to soften Lira volatility, thereby transitioning from a ‘free float’ to a ‘managed float’. So far, they have spent over $37 billion over the last two years in a futile effort to buttress the lira. This level of involvement in currency markets cannot be maintained.

Fourthly, the Turkish state is being far more interventionist in the Turkish stock exchange and bond markets to keep asset prices elevated. Government-controlled local funds have participated in the Borsa Istanbul and state banks in sovereign debt to sustain rallies or reverse a bear market.  

All these measures have one running idea: exclude foreign investors and no crisis will recur. Yet, when the credit boom heads to a downturn sooner or later, Turks will probably escalate lira conversions to US dollars; 51 per cent of all Turkish bank deposits are already dollar-denominated and the figure is still rising.

If Turkey’s limited foreign reserves cannot satisfy the domestic dollar demand, the government may have to impose comprehensive capital controls and allow for a double digit depreciation in the value of the lira to from its current level, with significant repercussions on Turkey’s political stability and economic climate.

To avoid this scenario, it needs to restore fiscal and monetary prudence, deal the with the foreign debt overhang in the private sector and focus on productivity-improving economic and institutional reforms to gain the confidence of global financial markets and Turks alike.

Perhaps it will be second time lucky. At the end of April, Germany’s Christian Democratic Union (CDU) will elect a new party leader to follow in the footsteps of Angela Merkel. An emergency party congress has been summoned to do that after the surprise resignation of Annegret Kramp-Karrenbauer, Merkel’s chosen successor.

The plan is to leave the decision on who will be the CDU candidate for chancellor at the next election until after Germany’s EU presidency concludes in December. So Merkel will keep her job until 2021, and the new leader will have to learn to live with her.

The three leading candidates are Armin Laschet, Friedrich Merz and Norbert Röttgen, all from the state of North Rhine-Westphalia. Two of the three – Merz and Röttgen – were sacked by Merkel from their former jobs. They have not forgotten. Only Armin Laschet, currently CDU leader in North Rhine-Westphalia and state premier, can be described as a Merkel loyalist, true to her centrist mantra.

He is the man to beat, having teamed up with Jens Spahn, the 39-year-old health minister, who is popular with party conservatives. Spahn will run as his deputy, so the team straddles the left-right divide in the party. But the contest still seems set to be a bitter battle between pro- and anti-Merkel factions that could leave the party badly split.

After nearly 15 years as chancellor, and 18 years as CDU leader, Merkel remains the most popular politician in Germany. In spite of criticism that she lacks vision, her caution and predictability appear to be just what most German voters like.

But her term in office has also seen the steady shrinking of the centre ground in German politics, with the rise of the environmentalist Green party and the far-right Alternative for Germany (AfD) at the expense of the centre-right CDU and the centre-left Social Democratic Party (SPD).

The battle for the soul of the CDU is between those who think Merkel has been too left-wing, and want a more conservative leader to win back AfD voters, and those who believe that the CDU must stay in the centre, and prepare for a future coalition with the Greens. Merz is seen as the former, Laschet and Röttgen the latter.

Unless Laschet emerges as the clear winner in April, the leadership contest is likely to leave Germany sorely distracted by domestic politics just as it takes over the EU presidency in the second half of the year. Instead of Merkel having a triumphant international swansong on the EU stage, she could be battling to protect her inheritance at home.

The one area on which all three leadership candidates seem to agree is foreign policy: they all want Germany to take more leadership and responsibility, and for the European Union to play a bigger role in security, defence and international affairs. They are all Atlanticists, but critical of Donald Trump’s ‘America First’ stance. All are on the record criticizing the chancellor – at least tacitly – for not having a more vigorous foreign policy.

There the similarity ends.

On the right, the 64-year-old Merz is both the most conservative and the most popular with the party grassroots. He fell out with the chancellor when she took over his job as CDU leader in parliament in 2002. He quit politics to become a corporate lawyer (and a millionaire), but never lost his political ambition. He is an economic liberal but socially conservative, a strong critic of Merkel’s migration policy and her lack of clear leadership. Critics say he is a man of the past, and not a team player.

On the EU, he believes Germany is ‘leaving too much to the French’. If France and Germany cannot agree on financial matters, he said at the London School of Economics in February, they should instead forge a stronger EU industrial policy focused on creating more ‘European champions’.

Laschet, the Merkel loyalist, is four years younger, and from the left of the party. Like Merz, he is a former member of the European parliament. In 2015, he defended Merkel’s open border policy to accept refugees stranded in the Balkans. On Russia, however, he is more critical, calling for a new effort to re-engage with Vladimir Putin. Most recently, at the Munich Security Conference, he called for stronger Franco-German relations, and more support for the eurozone reforms proposed by Emmanuel Macron.

As CDU leader in North Rhine-Westphalia, Laschet has the strongest power base. He earned his political spurs there by winning the last state election in 2017, in contrast to Röttgen, who lost to the SPD and Greens five years earlier.

Röttgen, chairman of the Bundestag foreign affairs committee, is the surprise candidate. Once a Merkel favourite, they fell out when she sacked him as environment minister after he lost the North Rhine-Westphalia election. By throwing his hat in the ring, he has forced it to become an open contest. He is independent-minded and outspoken, but not as bitterly hostile to the chancellor as Merz, so he could be a compromise candidate.

Laschet is clearly the man Merkel would find it easiest to live with. The decision will be taken by a party congress, not a grassroots ballot, which gives him a better chance. But Merz is the most eloquent orator and seen as the best campaigner. The challenge for party members is whether they believe it is better to swing right and squeeze the AfD, or stick to the centre to hold onto voters tempted by the Greens, who have replaced the SPD as the second-most popular party in Germany.

The race is wide open. So is the future of the CDU. The only prediction one can make with much certainty is that as long as Merkel remains chancellor, any successor will struggle to get out of her shadow.

This week the UK will start negotiating its future relationship with the European Union. The government is trying to convince the EU that it is serious about its red lines and is prepared to walk away from negotiations if the UK’s ‘regulatory freedom’ is not accepted – a no-deal scenario that would result in tariffs between the EU and the UK. Yet at the same time the story it is telling the world is that Britain is ‘re-emerging after decades of hibernation as a campaigner for global free trade’, as Boris Johnson put it in his speech in Greenwich a few weeks ago.

The EU is understandably confused. It’s a bit odd to claim to be campaigning for free trade at the exact moment you are creating new barriers to trade. If Britain were so committed to frictionless trade, it wouldn’t have left the EU in the first place – and having decided to leave, it would have sought to maintain a close economic relationship with the EU, like that of Norway, rather than seek a basic trade deal like Canada’s. 

As well as creating confusion, the narrative also absurdly idealizes free trade. Johnson invoked Richard Cobden and the idea that free trade is ‘God’s diplomacy – the only certain way of uniting people in the bonds of peace since the more freely goods cross borders the less likely it is that troops will ever cross borders’. But the idea that free trade prevents war was shattered by the outbreak of the First World War, which brought to an end the first era of globalization.

We also know that the domestic effects of free trade are more complex and problematic than Johnson suggested. Economic liberalization increases efficiency by removing friction but also creates disruption and has huge distributional consequences – that is, it creates winners and losers. In a democracy, these consequences need to be mitigated.

In any case, the world today is not the same as the one in which Cobden lived. Tariffs are at a historically low level – and many non-tariff barriers have also been removed. In other words, most of the possible gains from trade liberalization have already been realized. Johnson talked about the dangers of a new wave of protectionism. But as the economist Dani Rodrik has argued, the big problem in the global economy is no longer a lack of openness, it is a lack of democratic legitimacy.

The UK should therefore abandon this confusing and misleading narrative and own the way it is actually creating new barriers to trade – and do a better job of explaining the legitimate reasons for doing so. Instead of simplistically talking up free trade, we should be talking about the need to balance openness and economic efficiency with democracy and a sense of control, which is ultimately what Brexit was all about. Instead of claiming to be a ‘catalyst for free trade’, as Johnson put it, the UK should be talking about how it is trying to recalibrate globalization and, in doing so, make it sustainable.

In the three decades after the end of the Cold War, globalization got out of control as barriers to the movement of capital and goods were progressively removed – what Rodrik called ‘hyper-globalization’ to distinguish it from the earlier, more moderate phase of globalization. This kind of deep integration necessitated the development of a system of rules, which have constrained the ability of states to pursue the kind of economic policy, particularly industrial policy, they want, and therefore undermined democracy.

Hyper-globalization created a sense that ‘the nation state has fundamentally lost control of its destiny, surrendering to anonymous global forces’, as the economist Barry Eichengreen put it. Throughout the West, countries are all struggling with the same dilemma – how to reconcile openness and deep integration on the one hand, and democracy, sovereignty and a sense of control on the other.

Within the EU, however, economic integration and the abolition of barriers to the movement of capital and goods went further than in the rest of the world – and the evolution of the principle of freedom of movement after the Maastricht Treaty meant that barriers to the internal movement of people were also eliminated as the EU was enlarged. What happened within the EU might be thought of as ‘hyper-regionalization’ – an extreme example, in a regional context, of a global trend.

EU member states have lost control to an even greater extent than other nation states – albeit to anonymous regional rather than global forces – and this loss of control was felt intensely within the EU. It is therefore logical that this led to an increase in Euroscepticism. Whereas the left wants to restore some barriers to the movement of capital and goods, the right wants to restore barriers to the movement of people.

However, having left the EU, the UK is uniquely well placed to find a new equilibrium. The UK has an ideological commitment to free trade that goes back to the movement to abolish the Corn Laws in the 1840s – which Johnson’s speech expressed. It is difficult to imagine the UK becoming protectionist in any meaningful sense. But at the same time, it has a well-developed sense of national and popular sovereignty, and the sense that the two go together – which is why it was so sensitive to the erosion of them through the EU. This means that Britain is unlikely to go to one extreme or the other.

In other words, the UK may be the ideal country to find a new balance between openness and integration on the one hand, and a sense of control on the other. If it can find this balance – if it can make Brexit work – the UK could be a model for a wider recalibration of sustainable globalization. That, rather than fetishizing free trade, is the real contribution the UK can make.

A version of this article was originally published in the Observer.

What role does the EU want to play in a world characterised increasingly by power politics? The new European Commission has explicitly stated its ambition for the EU to become a stronger geopolitical actor. Is it capable of becoming a third pole in an enduring US-China stand-off?

From climate change to trade policy and security, the next 5 years may prove decisive in proving the EU can be a strong player both in its neighbourhood and globally. Given what is at stake, what are the Commission’s strategic and policymaking priorities for the next five years? With the discussions on the future EU budget ongoing, what areas will be prioritized when member states come to make decisions between competing objectives? Does the way the EU is perceived externally depend on its member states’ ability to put on a united front when it comes to the most pressing global challenges?

Finally, is this ambitious geopolitical vision deliverable within the EU’s existing structures? If not, are member states ready to give up more control for a stronger Europe at the EU level?

PLEASE NOTE THIS EVENT IS POSTPONED UNTIL FURTHER NOTICE.

The measures taken to limit the spread of the coronavirus - in particular social distancing -  come with significant economic costs, as the drop both in demand for goods and services and in supply due to workers being at home sick will create a short-term economic shock not seen in modern times.

Sectors that are usually less affected by regular economic swings such as transport and tourism are being confronted with an almost total collapse in demand. In the airline sector, companies are warning they might only be able to hold out for a few months more.

Building on the calls to provide income support to all citizens and shore up businesses, European leaders should now be giving explicit permission to the European Central Bank (ECB) to provide whatever financial support is needed.

Although political leaders have responded to the economic threat, the measures announced across the continent have mainly been to support businesses. The crisis is broader and deeper than the current response.

Support for weaker governments

The ECB already reacted to COVID-19 by announcing measures to support the banking system, which is important to guarantee the continuity of the European financial system and to ensure financially weaker European governments do not have to confront a failing banking system as well.

Although government-subsidised reduced working hours and sick pay are a solution for many businesses and workers, crucially they are not for those working on temporary contracts or the self-employed. They need direct income support.

This might come down to instituting something that looks like a universal basic income (UBI), and ensuring money keeps flowing through the economy as much as possible to help avoid a cascade of defaults and significant long-term damage.

But while this is likely to be the most effective remedy to limit the medium-term impact on the economy, it is particularly costly. Just as an indication, total compensation of employees was on average around €470bn per month in the eurozone last year.

Attempting to target payments using existing welfare payment channels would reduce costs, but is difficult to implement and runs the risk of many households and businesses in need missing out.

The increase in spending and lost revenue associated with these support measures dwarf the fiscal response to the 2008-09 financial crisis. The eurozone economy could contract by close to 10% this year and budget deficits are likely be in double digits throughout the bloc.

The European Commission has already stated member states are free to spend whatever is necessary to combat the crisis, which is not surprising given the Stability and Growth Pact - which includes the fiscal rules - allows for such eventualities.

Several eurozone countries do probably have the fiscal space to deal with this. Countries such as Germany and the Netherlands have run several years of balanced budgets recently and significantly decreased their debt levels. For countries such as Italy, and even France, it is a different story and the combination of much higher spending and a collapse in tax revenue is more likely to lead to questions in the market over the sustainability of their debt levels. In order to avoid this, the Covid-19 response must be financed collectively.

The Eurogroup could decide to use the European Stability Mechanism (ESM) to provide states with the funds, while suitably ditching the political conditionality that came with previous bailout. But the ESM currently has €410bn in remaining lending capacity, which is unlikely to be enough and difficult to rapidly increase.

So this leaves the ECB to pick up the tab of national governments’ increase in spending, as the only institution with effectively unlimited monetary firepower. But a collective EU response is complicated by the common currency, and particularly by the role of the ECB.

The ECB can’t just do whatever it likes and is limited more than other major central banks in its room for manoeuvre. It does have a programme to buy government bonds but this relies on countries agreeing to a rescue programme within the context of the ESM, with all the resulting political difficulties.

There are two main ways that the ECB could finance the response to the crisis. First, it could buy up more or all bonds issued by the member states. A first step in this direction would be to scrap the limits on the bonds it can buy. Through self-imposed rules, the ECB can only buy up to a third of every country’s outstanding public debt. There are good reasons for this in normal times, but these are not normal times. With the political blessing of the European Council, the Eurosystem of central banks could then start buying bonds issued by governments to finance whatever expenditure they deem necessary to combat the crisis.

Secondly, essentially give governments an overdraft with the ECB or the national central banks. Although a central bank lending directly to governments is outlawed by the European treaties, the COVID-19 crisis means these rules should be temporarily suspended by the European Council.

Back in 2012, the then president of the ECB, Mario Draghi, proclaimed the ECB would do whatever it takes, within its mandate, to save the euro, which was widely seen as a crucial step towards solving the eurozone crisis. The time is now right for eurozone political leaders to explicitly tell the ECB that together they can do whatever it takes to save the eurozone economy through direct support for businesses and households.

Please note this an online-only event.

According to a previously agreed timetable for phase two of Brexit talks, negotiations on the future EU-UK trade relations were scheduled to begin in March. Then a global pandemic hit. Despite the ongoing COVID-19 outbreak, the UK government insists that the Brexit negotiations are on track and there are currently no plans to extend the transition period beyond 2020.

However, the original timetable for trade talks was already widely seen as extremely constrained. Can negotiations still be done in time? With the decision on any possible extension to be made by July at the latest, can the two sides make sufficient progress by that point? Or would the ongoing public health crisis make requesting an extension to the transition period more politically viable for the UK government? Finally, if there is no extension, could Britain still leave the EU with no deal?

In this webinar, the speaker will discuss how the need to manage other challenges, such as the current COVID-19 outbreak, might affect the government’s approach to the negotiations with the EU. He will also share his insights on what to expect from the second phase of negotiations and on the most important lessons from phase one. 

Please note this an online-only event.

Norway is one of the few European countries that remains outside of the European Union. After the country’s population rejected the prospect of joining the EU twice, Norway’s relationship with the Union has been based on its membership of the European Economic Area (EEA), alongside Iceland and Liechtenstein.

The ‘Norway Model’ was often mentioned in the run up to the Brexit vote as a possible basis for Britain’s future relationship with the bloc, not least because it offers the least disruption to the current arrangement. Equally, Norway is not subject to the EU fisheries policy - an anticipated major issue in the next phase of Brexit talks. Nor is it part of the EU Customs Union.

Even though Prime Minister Johnson has now ruled out the type of deep economic and regulatory integration with the EU that Norway enjoys through its EEA membership, the country’s experience can still offer valuable lessons for the UK as it prepares to exit the transition period at the end of 2020.

In this session, the speaker will share Norway’s experience as a long-standing EEA member and discuss the challenges of engaging with the EU from the outside. What lessons can Norway offer the UK ahead of the negotiations on the future of UK-EU relations? What are the limits of its current arrangement with the EU? And is there any appetite among the Norwegian population to revisit it?

The new European Commission had a bold new agenda when it began its work in December 2019, with climate change, digital transformation and strengthening European democracy among its priorities. Less than six months later, the European continent is in the midst of the worst crisis since the second World War and business as usual has been taken over by crisis management.

Has COVID-19 monopolized the agenda in Brussels? What priorities are still on the table and what debates have fallen victim to the coronavirus? Is the current crisis reigniting and exacerbating existing faultlines in the EU or creating new ones?

Reflecting on his first four months as the Economist’s Charlemagne columnist, the speaker will share what decision-making in Brussels looks like during a pandemic and what debates are dominating conversations in the EU capital today.

In response to the changing geopolitical landscape in Asia, both China and the United States attempt to alter the regional order in their own favour, both in the economic and security realms. This article shows how diverging views on future arrangements are leading to strategic shifts and increasing tension between these two Great Powers. As part of its quest for Great-Power status, China has been actively pushing its regional initiatives such as the Belt and Road Initiative (BRI) and the Asian Infrastructure Investment Bank (AIIB), as well as adopting assertive security policies towards its neighbours. In contrast, in order to counter China's growing influence America's regional strategy is undergoing a subtle shift from ‘rebalancing to Asia’ to focusing on the ‘Indo-Pacific’ region. However, amid an intensifying trade war and other challenges facing the region, China has chosen to moderate its proactive foreign policy-orientation in the past few years. In particular, China has made attempts to downplay its domestic rhetoric, rebuild strategic relationship with India and Japan, and to reassure ASEAN states in the South China Sea. In response to the Indo-Pacific strategy, it would be more effective for China to articulate a more inclusive regional vision and promote an institutional framework that also accommodates a US presence in the region.

The ‘free and open Indo-Pacific’ (FOIP) strategy, actively promoted by the United States with support from its allies and partners, is a significant geopolitical response to China's growing power and expanding influence in Asia and beyond. Beijing has adopted various new strategies to cope with the challenges related to FOIP. One of these strategies is to secure a robust relationship with south-east Asia in order to make these regional states either neutral to or less supportive of the Indo-Pacific vision. In addition to economic statecraft and soft power, Beijing believes that it can also tap into the domain of non-traditional security (NTS) to strengthen relations with this region to position itself better in the intensifying regional geopolitical competition. The article addresses the following question: what is the impact of China's NTS cooperation with south-east Asia on Beijing's geopolitical rivalry with other major powers in the Indo-Pacific region? The article argues that China's NTS cooperation with south-east Asian countries may help China maintain its geopolitical standing in the region, but it is unlikely to lead to any dramatic increase of China's strategic influence in the region. This essentially means that Beijing may be able to prevent ASEAN or most ASEAN member states from lending substantive and strong support to the Indo-Pacific construct, but it will not be able to stop ASEAN states from supporting some elements of the FOIP.

India has adopted the Indo-Pacific concept with uncharacteristic speed. This article examines India's Indo-Pacific strategy, which evolved out of its earlier ‘Look East’ and ‘Act East’ policies but is much more focused on strategic concerns than on trade or connectivity. As such, the strategy is subset of its China policy, and includes contradictory elements of balancing China by building partnerships with the United States as well as with regional powers, while simultaneously pursuing a reassurance strategy to convince Beijing that India is not really balancing China. The combination of these contradictory elements is characterized as evasive balancing, which is a more useful concept than either pure balancing or hedging for understanding the policies of India and of many other countries in the region that are trying to manage China's rise. However, reassurance strategies rarely work and the combination of balancing and reassurance is even less likely to be viable.

Although the term ‘Indo-Pacific’ has become popular in the foreign policy discourse of some countries, we have yet to see any significant institution-building in the Indo-Pacific region. Borrowing insights from functional institutionalism and political leadership studies of international regimes, we introduce a ‘leadership–institution’ model to explore the problems and prospects of institutionalizing the Indo-Pacific. Through a comparative case study of the institutionalization of the Asia–Pacific vs the Indo-Pacific, we argue that two crucial factors contributed to the slow institutionalization of the Indo-Pacific as a regional system in world politics: the lack of ideational leadership from an epistemic community and the weak executive leadership from a powerful state. While ideational leaders can help states identify and expand common interests in cooperation, executive leadership will facilitate states to overcome operational obstacles in cooperation, such as the ‘collective action’ problem and the ‘relative gains’ concern. The future of institution-building in the Indo-Pacific will depend on whether and how these two leadership roles are played by scholars and states in the region. In the conclusion, we discuss the challenges of institutionalizing the Indo-Pacific and highlight China as a wild card in the future of Indo-Pacific regionalism.

The Belt and Road Initiative (BRI) has been regarded by international society as a major policy tool in China's geo-economic strategy. Under this policy platform, Beijing has pledged to invest billions of dollars in the infrastructure and industrial sectors across Eurasia and in the Indo-Pacific nations. It is widely believed that such huge amount of investment will inevitably generate significant geostrategic repercussions in these regions. In response to the BRI, the United States and other powers have come up with a ‘free and open Indo-Pacific’ strategy. This article attempts to address the following question: what impact is the BRI likely to have on the security ties between China and the other major players in the Indo-Pacific? The author finds that the BRI may significantly transform China's international security policy and the expansion of Beijing's security influence may further intensify the security competition between China and other major powers in the Indo-Pacific region. The article also proposes a new analytical angle for the study of geo-economics that unpacks the role of economic activities and processes in generating geopolitical intentions and catalysing geopolitical competition.

As a geographical concept, ‘Indo-Pacific’ has existed for decades. As a political and strategic concept, it has since 2010 gradually become established in the foreign policy lexicon of some countries, especially Australia, India, Japan and the United States. However, China seems to be reluctant to identify itself as part of the Indo-Pacific; Chinese leaders believe that the US-led Indo-Pacific strategy aims to contain China's rise. While the battle between the two geographical concepts ‘Indo-Pacific’ and ‘Asia–Pacific’ may be fairly easily settled in the future, US–China strategic competition has just begun. Will the Indo-Pacific become a battlefield for US–China rivalry? How will China cope with the US ‘free and open Indo-Pacific’ (FOIP) strategy? How will other regional actors respond to the US–China strategic competition in the Indo-Pacific? What are the strategic implications of the ‘Indo-Pacific’ concept for regional order transformation? How will the Indo-Pacific be institutionalized, economically, politically and strategically? This article introduces the January 2020 special issue of International Affairs, which aims to address those questions, using both country-specific and regional perspectives. Seven articles focus on the policy responses of major players (Australia, China, India, Indonesia, Japan and ASEAN) to the US FOIP strategy and related US–China rivalry in the region. A further three articles examine the profound implications of Indo-Pacific dynamics for regional institution-building and for geopolitical and geo-economic architecture.

The new UK government will conduct a review of foreign, security and defence policy in 2020. If the UK decides to use values as a framework for foreign policy this needs to be reflected in its armed forces. One area where this is essential is continuing to deepen inclusivity for LGBTIQ+ personnel, building on the progress made since the ban on their service was lifted in 2000.

I witnessed the ban first-hand as a young officer in the British Army in 1998. As the duty officer I visited soldiers being held in the regimental detention cells to check all was well. One day a corporal, who I knew, was there awaiting discharge from the army having been convicted of being gay. On the one hand, here was service law in action, which was officially protecting the army’s operational effectiveness and an authority not to be questioned at my level. On the other, here was an excellent soldier in a state of turmoil and public humiliation. How extreme this seems now.

On 12 January 2000 Tony Blair’s Labour government announced an immediate lifting of the ban for lesbian, gay and bisexual personnel (LGB) and introduced a new code of conduct for personal relationships. (LGB is the term used by the armed forces to describe those personnel who had been banned prior to 2000.) This followed a landmark ruling in a case taken to the European Court of Human Rights in 1999 by four LGB ex-service personnel – supported by Stonewall – who had been dismissed from service for their sexuality.

Up to that point the Ministry of Defence's long-held position had been that LGB personnel had a negative impact on the morale and cohesion of a unit and damaged operational effectiveness. Service personnel were automatically dismissed if it was discovered they were LGB, even though homosexuality had been decriminalized in the UK by 1967.

Proof that the armed forces had been lagging behind the rest of society was confirmed by the positive response to the change among service personnel, despite a handful of vocal political and military leaders who foresaw negative impacts. The noteworthy service of LGBTIQ+ people in Iraq and Afghanistan only served to debunk any residual myths.

Twenty years on, considerable progress has been made and my memories from 1998 now seem alien. This is a story to celebrate – however in the quest for greater inclusivity there is always room for improvement.

Defence Minister Johnny Mercer last week apologized following recent calls from campaign group Liberty for a fuller apology. In December 2019, the Ministry of Defence announced it was putting in place a scheme to return medals stripped from veterans upon their discharge.

The armed forces today have a range of inclusivity measures to improve workplace culture including assessments of workplace climate and diversity networks supported by champions drawn from senior leadership.

But assessing the actual lived experience for LGBTIQ+ people is challenging due to its subjectivity. This has not been helped by low participation in the 2015 initiative to encourage people to declare confidentially their sexual orientation, designed to facilitate more focused and relevant policies. As of 1 October 2019, only 20.3 per cent of regular service people had declared a sexual orientation.

A measure of positive progress is the annual Stonewall Workplace Equality Index, the definitive benchmarking tool for employers to measure their progress on LGBTIQ+ inclusion in the workplace; 2015 marked the first year in which all three services were placed in the top 100 employers in the UK and in 2019 the Royal Navy, British Army and Royal Air Force were placed 15th=, 51st= and 68th respectively.

Nevertheless, LGBTIQ+ service people and those in other protected groups still face challenges. The 2019 Ministry of Defence review of inappropriate behaviour in the armed forces, the Wigston Report, concluded there is an unacceptable level of sexual harassment, bullying and discrimination. It found that 26-36% of LGBTIQ+ service people have experienced negative comments or conduct at work because of their sexual orientation.

The Secretary of State for Defence accepted the report’s 36 recommendations on culture, incident reporting, training and a more effective complaints system. Pivotal to successful implementation will be a coherent strategy driven by fully engaged leaders.

Society is also expecting ever higher standards, particularly in public bodies. The armed forces emphasise their values and standards, including ‘respect for others’, as defining organisational characteristics; individuals are expected to live by them. Only in a genuinely inclusive environment can an individual thrive and operate confidently within a team.

The armed forces also recognize as a priority the need to connect to and reflect society more closely in order to attract and retain talent from across all of society. The armed forces’ active participation in UK Pride is helping to break down barriers in this area.

In a post-Brexit world, the UK’s values, support for human rights and reputation for fairness are distinctive strengths that can have an impact on the world stage and offer a framework for future policy. The armed forces must continue to push and promote greater inclusivity in support. When operating overseas with less liberal regimes, this will be sensitive and require careful handling; however it will be an overt manifestation of a broader policy and a way to communicate strong and consistent values over time.

The armed forces were damagingly behind the times 20 years ago. But good progress has been made since. Inclusion initiatives must continue to be pushed to bring benefits to the individual and the organization as well as demonstrate a values-based foreign policy.

In April 2018, the Commonwealth Heads of Government Meeting (CHOGM), held in London, saw the creation and the adoption of the Commonwealth Cyber Declaration. The declaration outlines the framework for a concerted effort to advance cybersecurity practices to promote a safe and prosperous cyberspace for Commonwealth citizens, businesses and societies. 

The conference will aim to provide an overview on the progress made on cybersecurity in the Commonwealth since the declaration was announced in 2018. In addition, it will examine future challenges and potential solutions going forward.

This conference is part of the International Security Programme's project on Implementing the Commonwealth Cybersecurity Agenda and will convene a range of senior Commonwealth representatives as well as a selection of civil society and industry stakeholders. This project aims to develop a pan-Commonwealth platform to take the Commonwealth Cyber Declaration forward by means of a holistic, inclusive and representative approach.

Please see below meeting summaries from previous events on Cybersecurity in the Commonwealth:  

• A cyberspace that supports economic and social rights online (London)
• Build the foundations of an effective national cybersecurity response (Barbados)
• Promote stability in cyberspace through international cooperation (Addis Ababa)

Attendance at this event is by invitation only. 

Drawing on his experience as commander of US forces in Iraq and Afghanistan and director of the CIA, General David Petraeus (Ret) will reflect on the current state of global security focusing in particular on the role of the US within the international security infrastructure and the world order.

This event is only open to Major Corporate Member and Partner organizations of Chatham House. If you'd like to attend, please RSVP to Linda Bedford.

To enable as open a debate as possible, this event will be held under the Chatham House Rule.

Smart Peace brings together global expertise in conflict analysis and research, peacebuilding and mediation programming, and behavioural science and evaluation. Together, Smart Peace partners are developing integrated and adaptive peace initiatives, working with local partners to prevent and resolve complex and intractable conflicts in Central African Republic, Myanmar and northern Nigeria.
 
This roundtable is an opportunity for Smart Peace partners to share the Smart Peace concept, approach and objectives, and experiences of the first phases of programme implementation. Roundtable discussions among participants from policy, practice and research communities will inform future priorities and planning for Smart Peace learning, advocacy and communication.
 
Smart Peace partners include Conciliation Resources, Behavioural Insights Team, The Centre for Humanitarian Dialogue, Chatham House, ETH Zurich, International Crisis Group and The Asia Foundation.

The GCC states have invested significantly in cybersecurity and have made large strides in protecting governments, businesses and individuals from cyber threats, with the aim of delivering on their ambitious national strategies and future visions. However, several challenges to cybersecurity and cyber resilience in the region persist, putting those ambitious plans at risk.

These challenges include the uneven nature of cybersecurity protections, the incomplete implementation of cybersecurity strategies and regulations, and the issues around international cooperation. Such challenges mean that GCC states need to focus on the more difficult task of cyber resilience, in addition to the simpler initial stages of cybersecurity capacity-building, to ensure they harness the true potential of digital technologies and mitigate associated threats.

Set against this background, this workshop will explore opportunities and challenges to cyber resilience in the GCC focusing on four main pillars:

1. Cyber resilience: in concept and in practice
2. Building an effective cybersecurity capacity
3. The potential of regional and international cooperation to cyber resilience
4. Deterrence and disruption: different approaches

This event will be held in collaboration with the Arab Regional Cybersecurity Centre (ARCC) and OMAN CERT.

PLEASE NOTE THIS EVENT IS POSTPONED UNTIL FURTHER NOTICE.