Realpolitik and the European Union. Final Chapter: Part I. The true challenge facing the Merkel-Macron tandem.

Realpolitik- politics based on practical and material factors rather than on theoretical or ethical objectives-is flourishing in Europe. In fact, it never disappeared, but became absorbed within Europe’s society of states, dispersed and played out  across and within the many international organisations, including specifically the EU, that can be said to compose its complex bi-multi-and supra-national political and diplomatic system.  If anything, Realpolitik has gained in intensity as a result of the multiple impacts from world developments on Europe’s mosaic of peoples and states, by the supra-national ambitions driving the EU project, combined with a gulf between ambition and legitimacy. Its most salient feature is the primacy of Germany, and the roots of Realpolitik as presently practised is the primacy of  domestic politics, with very different priorities among the highly interdependent member states of the EU.

Realpolitik never absent.

It took a new lease of life after Germany’s unification, the end of the cold war, and the recreation of a global market place as China, Russia and India opened their markets to the rest of the world. The Maastricht Treaty was hard fought over, with Germany insisting that the creation of a single currency would have to be on terms laid down by the Bundesbank, and that the future ECB would have to be based on Frankfurt. The theory was all about the efficiencies to be gained by member states sharing a single currency, and the contribution that a single currency would make towards creating a sense of common citizenship. But the struggle for Maastricht was also a very hard fight: President Mitterrand decided to sacrifice the Franco-Serbian alliance, dating to the early years of the century, in favour of reaching an accommodation with Chancellor Kohl, and likewise ditched the UK as a viable ally to create a European Union which would have an answer to France’s definition of “the German question”. Mitterrand and successive French Presidents repeated the point, in various formulas, that the single currency would have to be accompanied by common Finance Ministry, and a common budget as a vital accompanying instrument to ensure redistribution of resources to parts of the union in temporary recession. Twenty-five years on, this central conflict between France and Germany is far from resolved.

As preceding chapters have argued, Realpolitik never disappeared after 1945. The US retained a massive presence in Europe in order to ensure that western Europe remained within its sphere of influence, open to US goods, investments, ideas and services. France, rather than the UK, became the US prime ally in binding a nascent Federal Republic westwards into a Euro-Atlantic system, one of whose component organisations became the EEC. On arrival to power in 1958, after being invited by French generals in Algeria who thought he was one of them, de Gaulle proceeded to disentangle France from North Africa, accentuated the drive for a French independent nuclear force (in effect helped and sustained with US technical support), and embarked on his attempt to carve out a sphere of French influence in western Europe, hinging on a special alliance with Germany, while stoking aspirations to national independence in the territories under Soviet domination in what was then termed “eastern” Europe. In part, he succeeded. He twice excluded the UK from joining the EEC on the pretext that were it to join, his Europe would end up being diluted into a Euro-Atlantic free trade area, under the domination of the “Anglo-Saxons”. Once the Common Agricultural Policy, tailor-made for large French farmers, was up and running, and the EEC’s tax base consolidated, his successor President Pompidou opened the doors to the UK, whose government was so keen to enter, that it paid through the nose to join, and surrendered the waters around the UK to the EEC as if the UK was paying a dowry for a marriage. British taxpayers, in the following 43 years paid net about Euro 380 billion in 2016 values, making it the second largest Europayer, some way behind Germany. “Who gets what” politics is at the heart of EU budgetary allocations.

Member states operate much in the manner of maximising agents when considerations of money come onto the agenda, by comparison with the rhetoric of European idealism in which its appearance is generally accompanied. When the UK joined the EEC in 1973, over 90% of outlays went to agriculture. In the next two years, the three Mediterranean dictatorships fell, leading to turbulent but successful transitions, especially in Portugal and Spain, to constitutional democracies. In 1979, Spain lodged its bid for entry to the EEC. One third of its workforce at the time was in agriculture, much of it in small plots and under capitalised. By then, the UK was on the hook for a huge increase in its contributions to the EEC budget, along the lines accepted by the British government in order to secure entry. One of the reasons for Paris looking benignly on British entry was that here was a new source of funding for the EEC farm budget, which encouraged overproduction through the annual negotiation of farm prices, calculated as a mark-up on the costs of marginal producers. The formula yielded vast profits for large, efficient farmers in the Paris basin, Lombardy or East Anglia. Who would pay now for Spain’s farmers, where marginal costs where way above those in the EEC of the Nine? Successive French governments looked on Spanish farm produce as unwelcome sources of competition on EEC markets and were definitely not keen on forking out to finance competitors. The UK was the obvious alternative source of funding. Prime Minister Thatcher was absolutely correct to insist on a reduction of the UK budgetary contribution, an accord eventually agreed at Fontainebleau in 1984. France conceded not least because the new Spanish government of Felipe Gonzalez had made an alliance with Chancellor Kohl. And there could be no progress on Mitterrand’s new ambitious EEC agenda without agreement from Germany.

These events coincided with heightened competition between the communist-party states of eastern Europe, and the constitutional states of western Europe. Denmark in particular inserted human rights clauses into the Helsinki Accords, signed in 1975 with what was considered at the time as a very threatening Soviet superpower. There ensued competitive policies of mutual subversion, with the western powers promoting human rights groups in eastern Europe, and Moscow promoting Eurocommunist parties and affiliates in western Europe, particularly in France, Italy, Iberia, and Greece, and in UK trade unions. In the competition to keep western communist parties at bay, centre left and right parties in government across western Europe loosened the fiscal reins, as currencies floated against each other and the dollar. When the US raised interest rates in October 1979, a period of more conservative policies was inaugurated. The launch of the internal market programme in 1985 was part of the push to return Europe to higher rates of economic growth, and that was followed by liberalisation of capital movements and the launch of the single currency.

Maastricht was the moment when the EU became less French, and more German. The Bundesbank raised interest rates on the DM in order to stymy inflationary pressures deriving from the costs of unification, while attracting in funds to help finance absorption of the eastern Länder.  High interest rates translated through the exchange rate mechanism of adjustable exchange rates, helped to slow growth rates in the Latin countries, with high population growth rates than those in northern Germany. Fearful of being called on to transfer funds in a future Euroland, but worried about the DM’s overvaluation against the dollar, the German government opted to elaborate conservative stability criteria for government deficits, debts and inflation rates as a condition for Germany entering the Euro. But when in 2003, Germany, with France, broke the criteria which it had insisted on, it was said that the conditions would not apply to the two big continental states, but would to peripheral Portugal and Ireland. Then when the Greek crisis blew up in 2010, both Germany and France came to an agreement to force severe adjustments on a Greece whose national income fell over the coming 7 years by 25%, while continuing to be the second and third supplier of armaments to the Greek armed forces.

Global developments, ambition and  culture wars.

Why has Realpolitik become so noticeable over the past twenty five years? One answer must be that member states highly interdependent one with another are variably sensitive and vulnerable to global developments. One transmission belt came through the rise of China as the fulcrum of a resurgent Asia. China’s entry to the WTO provided the signal for a surge in exports out of China, driven largely by multinationals investing there as a manufacturing platform for local and global markets. Given continued policy control over capital markets in China, surplus funds accumulated by China’s trade surplus, reaching to over 10% gdp by 2010, were recycled into the US T-bonds markets and also into London markets. This helped to keep interest rates lower even than they were held by the Fed, the ECB and the Bank of England, fuelling a credit boom in the two main heartlands of the global economy, the US and the EU. On the other hand, low priced imports helped to keep inflationary pressures down, while reducing the quantity of high paid jobs available in the United  States. Financial engineers sliced and diced investor packages which were sold on to the financial markets of Europe and America, contributing to the financial crash of 2008, when Lehmann Bros went bankrupt, and then spilling over into the EU as funds  financing the external deficits of southern Euroland member countries dried up. This was indeed a global financial crisis, but one intimately tied into the changing structure of world power.

China’s rise in particular has had very different impacts on different parts of Europe. As soon as China joined the WTO, the global textile regime which had helped to protect producers in southern Europe, felt the full impact of competition on European markets. Other lower value added sectors from southern Europe, such as shoes, were in the same boat. Deprived of the exchange rate tool, southern European producers in lower value added sectors had to cut wages, sell off or take their business to China to benefit by the lower wage rates still available there. The year after the 2008 financial crisis, German global exports tanked, but then picked up on the back of Beijing’s vigorous counter-recessionary policy in the following year. With the EU in prolonged depression, German foreign direct investment soared with a view to serving emerging markets in the rest of the world. Germany, like Israel in the Near East with its booming high tech base, was lifted metaphorically out of its geographic location as extra European markets beckoned for the long term. Recognition of Germany’s primacy in Europe came in 2011, when the Chinese and German Council of Ministers held a joint session in Berlin. In 2016, Greek  Finance Minister Varoufakis had suggested to the Chinese Ambassador in Athens that he would be delighted if China could buy Greek bonds, but then received the news that “someone had apparently called Beijing from Berlin with a blunt message : stay out of any deals with the Greeks until we are finished with them”.[1]

China’s rise to world power status eclipsed Russia, making it all the more problematic for the Kremlin to chose between Russia bedding into a greater European environment, or siding with China in its hostility to what its ex-Soviet bureaucracy considered as western human rights imperialism.  China was where future demand for Siberian gas and oil was growing fastest, but the prospect of becoming hooked on massive Chinese demand for its exports kept Russian reservations alert. Russia is in effect a minerals and raw materials exporter, highly dependent on the world commodity cycle, driven by demand from emerging markets and speculative investments by the massive global financial markets.

As pointed out in previous chapters, 80% of Russian export earnings come from trade with Europe, making Russia a de facto member of the broader European family of nations. The linchpin of this Russian European relationship is Germany, which has consistently sought to encourage development of East-West pipelines, against the concerns of Poland or of the Baltic states. At the same time, Germany, along with other member states, encouraged the EU in 2014 to propose a n association agreement with Ukraine, ignoring the advice of senior statesman such as Henry Kissinger or Helmut Schmidt that doing so would provoke a Russia, already enervated by the extension of NATO into its own previous sphere of influence in eastern Europe. Germany also led the EU in imposing sanctions on Russia, following the Kremlin’s grab for the Ukraine; But the fact of the matter remains that Europe’s eastern frontier with Russia remains unsettled, while Russia’s frontier with China has been.

All European states have low birth rates and ageing populations, with major implications for the financing of their welfare programmes. On the world stage, Europe is a rapidly shrinking proportion of an expanding global population. Birth rates are particularly high in the countries to Europe’s immediate south, in Africa, the Middle East, and through to the sub continent. Attracted by open frontiers, work opportunities or benefits, and driven often by desperation in escaping very high local unemployment, dysfunctional states or simply war and brutality, the continent has become a major target for immigration from countries with very different and resilient cultures. This is particularly the case of people from countries of majority Islamic background.

The roots of European culture and institutions, by contrast, are Christian, for well over a century open to the blows of an aggressive secularism, which has offered surrogate religions of all sorts, from nationalism, to racialism via the 20th century despotisms of fascism, national socialism and Marxist Leninism. In the last twenty five years, secularism has proposed multi-culturalism, in repudiation of past formulas—an ideology that suggests that all cultures and religions are equally valid. Into this vacuum of a world without meaning has marched a militant Islam, financed by oil money. The result is a multiplication of mosques, and a growing number of European Muslim ghettos, where Sharia prevails. Honour killings, genital mutilation, terrorist attacks in the name of Islam and the “grooming” of underage girls have become a regular diet of news. Two examples suffice to illustrate how significant this growing presence of Islam in Europe is. Five years after Chancellor Merkel had admitted that multiculturalism had “failed, utterly failed”, in August 2015 the German Chancellor  declared Germany open to immigration. In that year alone, 1.5 million newcomers, many young Muslim men, poured into Germany. Within months, member states-Hungary, Poland, Austria, then Germany itself, imposed border controls, despite all the talk about the free movement of people as an irreversible triumph of the European project. On June 23, 2016, an unprecedented number of British voters-17.4 million-voted to Leave the EU in order to “get back control”. One of the major motivations was concern that as a member of the EU, the UK no longer controlled who came in. As I have mentioned in the chapter on that vote, concern about a growing Islamic presence played a significant role in the vote.

Religious practice is in steep decline across Europe, compared to the rest of the world. “Social liberalism” is the accepted dogma of EU institutions, meaning support for the European “social model” of generous welfare payments, gay rights, restrictions on “hate” speech, legalisation of abortion, or open but regulated markets. In the European Parliamentary debate in August 2014, to commemorate the outbreak of the First World War, Danny Cohen Bendit, the hero of the Paris May 1968 movement,  gave ardent expression to the view that nationalism was the beast to slay if the European ideal of peace and prosperity was to be assured. In the wake of the two terrible world wars, the conclusion of the founders of the EU, and of their successors, is that German nationalism and Nazism had been created by nationalism, that nations caused nationalism and that the problem of Europe was the European nation. The remedy was transnational institutions, particularly the EU project, which would usher in an age of borderless harmony and erase prejudice itself from the heart of Europe. The fact that wars had predated nationalism by thousands of years, or that it was Europe’s own wars of religion that begat the secularism, that in turn begat predatory ideologies, was not mentioned. The two sins of the EU project are thereby identified as nationalism and racism.

A further reason for the return of Realpolitik in Europe is that the ambitions driving the European project have greatly raised the stakes for the member states, and their populations. Take for instance, the two flagship policies of money and free movement.

Mitterrand’s determination to deprive the Federal Republic of its prime symbol and asset,the DM as recorded in Chapter 3 in his meeting with some of his staff in the Elysée on January 26, 1991, came after the Bundesbank had proposed the preceding October the conditions on which Federal Republic would contemplate moving to a single currency. Essentially, the Bundesbank’s position was take all of our terms, or forget it. Given the precedent of the 1970 Werner Plan, when the Bundesbank had also placed the bar very high, a reasonable expectation was that France would not accept. Mitterrand understood that the Bundesbank was presenting its national interest in pure European clothing, so decided to take the Bundesbank at its word. Mitterrand signed along the dotted line, and Kohl agreed to insert a clause in the Maastricht Treaty to the effect that the single currency was “irreversible”. There followed a battle royal led by the Bundesbank to shake itself free of the lira, sterling and the franc. But Kohl wanted the single currency for geopolitical reasons. The Bundesbank’s so called independence was duly trampled over, as it had been by Kohl during the course of German unification.

During the refugee crisis, the EU made numerous requests for member states to relieve Italy and Greece of their larger numbers of refugees. In September 2015, the EU narrowly voted to house 160,000 refugees from Greece and Italy, with Germany and France taking in the largest number. Together, nine central and eastern European countries were asked to shelter a total of 15,000 refugees. Four nations voted against the agreement-the Czeck Republic, Slovakia, Hungary and Romania-but being voted into a minority, were expected to adhere to the refugee quota. If they did not, EU subsidies would be withheld, socially liberal Sweden and Germany made known..

Slovakia buckled. But  Hungary and Poland refused to shelter any asylum seekers on the grounds that accepting them would make their countries vulnerable to extremism. The EU duly launched an “infringement procedure” against the three. As Dimitris Avramopoulos, the EU’s miogration commissioner, Europe is not just about requesting funds or ensuring security: “It was also about sharing difficult moments and challenges”.[2] Czeck President Milos Zeman took a different view: “The duty of any president is to defend our national interests. Our national interest is precisely that we, as a sovereign state, are able to decide who to place and not to place in our territory”. The“so-called” refugees, he went on, “will primarily be a group of people that is culturally incompatible with Czeck and European cultural roots”. His predecessor, Vaclav Klaus, went further: “The time has come to prepare our country to withdraw from the EU…as the only way we can fulfil our obligation of maintaining, saving and passing on to future generations our country that we inherited from our ancestors”.”We reject the EU’s plan to use foreigners to displace Czecks, and we refuse to allow ouir country to be transformed into a multicultural society with maladjusted communities, which is what we see today in France and the UK”.[3]

 The EU lacks legitimacy.

USE supporters are aware that the project has a problem of legitimacy. Its intrusiveness is almost limitless, and as it expands it raises the fundamental question of political authority: by what right do you rule? This is the view of none other than Martin Schulz, former President of the European Parliament, and an enthusiastic supporter of a fully fledged European federation.

The EU’s current institutional set-up, he argues,  resembles a ‘Frankenstein’ monster because there is no democratic separation of powers in the EU. “National sovereignty in Europe is based on a model of separation of powers: we have a government that can be voted down by a parliament and an independent judiciary overseeing that rules are respected,” says Schulz. He adds: “What we are doing now is that we are taking bits and pieces of this framework and transferring them to the EU level, but without also transferring the separation of powers. The result is what I call ‘Frankenstein Europe’.” [4]People cannot trust the EU when the division of labour and the legal basis is not clear, he says.

Schulz wants a European federation with a clear division of powers embedded in the EU institutions. There is much to be said for this view: but it would require a major change in public attitudes; a readiness of large corporations with in-house expertise to see their presence in the EU institutions open to challenge; and above all a readiness of the member states to relinquish their sovereignty, recognize EU supremacy, abandon their representation in international bodies, trust EU institutions to make policy on war and peace, growth and stability, and a host of hotly contested moral issues, such as for instance, abortion, euthanasia, GM foods, or chemicals.

It is a very big ask, not least of German voters. Such a Big Leap would require, as the Constitutional Court has made very plain, the calling of a new Constituent Assembly to re-write the Basic Law. The Court can be counted on to protect the democratic rights of German citizens to shape policy affecting them through the ballot box—rights which Heath’s 1972 ECA callously curtailed by having Parliament’s supremacy deployed to mute parliament’s powers. The result over time was to have parliament replaced by the Council of Ministers, both legislature and executive for the EU. Not surprisingly, a furious debate has been unleashed in recent years as to how much of legislation on the UK statute book is made in Brussels. Remainers in the referendum put the figure low, at around 9%; Leavers put the figure at 70%. Both agreed that Parliament’s powers had been curtailed. The German Constitutional Court did no such thing. Seventy one years after the end of the world war, Germany was more sovereign than the UK. Such an outcome could not be invented in fiction.

It was fiction in the minds of millions of British voters on June 23, 2016. The living constitution of the United Kingdom was present in the mind of its people, even though greatly weakened by decades of submission to Whitehall’s preferences. The result was to propel Prime Minister Cameron in to political outer space, and to re-establish incontrovertibly where power in the UK lay. It lies undivided in the Crown in Parliament.

There are thus many layers to Europe’s culture wars. One layer states that the two beasts to slay if Europe is to prosper in peace is nationalism and racism, as often as not conflated in the minds of its adherents, just as racism is with religion. Both are seen as fall backs to less enlightened times when Europe bestrode the world as slave driver and exploiter. A second layer looks on nation states as the vehicle for constitutionalism, the rule of law, freedom of expression and of citizens rights to sanction their own lawmakers at the ballot box. This is the fundamental reason for the June 23, 2016 vote in the UK, and of statements by Czeck leaders that it is the sovereign right of Czecks to decide who can and cannot take up residence among them. A third layer emerges from religion particularly Christianity,  an even older source of European identity. It is most evident in the resentment at the spread of Islam, the import of its culture and its political connotations of acknowledging only Sharia, rather than the law of the constitutional states in which it prospers. A fourth is the cultural war which cuts across all of these layers, and is inherited from Europe’s own religious wars: social liberalism, including one of its manifestations, multi-culturalism, is embodied in the nominally protestant countries of northern Europe, and Catholicism, weakened in western Europe, remains militant in Poland, where the conservative Catholics in Poland battle against the devil’s work of legislating for abortion, and their domestic opponents, with allies in Germany and the EU, support an independent judiciary. At the interstices of all these cultural wars is Germany, determined this time that Europe be made along German lines.

Haupsächlich, mir geht’s gut.

The expression comes from my Bavarian niece, who has an acid sense of humour. But the expression neatly encapsulates German policy. It is rooted in an excellent precept that it is best to put your own house in order rather than to pontificate to others what they should do to get theirs’ in better shape. Put another way, foreign policy takes its marching orders from the exigencies of domestic politics. This has been a consistent thread in post-1949 German affairs. Since the western alliance, Germany has consistently enhanced its sovereignty, in other words, control over its own affairs. The crowning moment for Chancellor Adenauer’s western orientation, as implemented by his successor, Chancellor Kohl, was German reunification in 1990. Equally, a constant concern of German public policy and of German business has been to ensure in the changing circumstances of the world economy, that Standort Deutschland is fostered, in other words that Germany’s home base is preserved and promoted as a manufacturing platform for domestic, European and global markets. This has gone along with the Bundesbank’s eagle watching over a stable currency; the Constitutional Court’s defense of citizen rights in the Basic Law; the web of companies and trade associations across Germany’s federal landscape; and the defense, weakening over time as corporate shares become dispersed across global markets, of German ownership of Germany’s large corporations.

The counterpart to this priority to domestic affairs has been to insist that Germany’s international agreements are compatible with domestic cohesion. This was most noticeable in the negotiations on monetary union, where Mitterrand was told that the single currency could only be on German terms, or not at all. That absolute priority has again been on display from 2010 onwards, to ensure that German taxpayers are not moved on to a French and Italian hook to underwrite their debts.  German economic policy has been equally consistent in seeking to ensure competitive exchange rates, beneficial to German exporters. This priority has clashed in the past with domestic concerns to preserve price stability at home. But in 1973, again in 1980 and in 1990 at the time of unification, whenever there has been a clash, priority has gone to price stability, entailing a corollary of accepting the consequences of a revalued currency, to wit that companies boost productivity and move up the value chain. That was the rationale behind the 2003 Hartz IV proigramme to boost productivity, increase labour market flexibility, and to keep wages and consumption down. Hartz IV coincided with Germany’s bid for leadership of Europe over the Iraq war, and set a precedent where under his successor, Chancellor Merkel repeatedly said Nein, on terms compatible with German interests only. For other countries, that would be called giving priority to national interests; in Germany, national interests become garbed in European clothing.

The reason why France and Italy have failed to adapt to the exigencies of monetary union by liberalizing domestic markets-in effect by doing a Thatcher on France and Italy- is rooted in domestic politics. The central government in Rome managed to consolidate public finances and to stabilize the debt to gdp level, at around 120-130% gdp, but has been unable to restore competitiveness. Prior to joining the Euro, the policy since the 1960s was for Italy to effect regular devaluations of the lira. This option disappeared, leaving Italian lower value added manufacturers highly vulnerable to competition from China. Reforms of the labour markets have proved nigh on impossible. The result is that the higher growth required to lower aggregate debt levels has been elusive. Similar comments hold for France, where the labour market remains notoriously rigid; government take is around 57% gdp compared to Germany 42%; and despite high productivity, abundant assets in the former of a first rate infrastructure, a prime global destination for tourists, and a galaxy of global corporations, have not been enough to promote growth and to lower unemploymlent, which has hovered at around 10% for decades.

Indeed, sourcing the return of Realpolitik in Europe in the clash of domestic priorities is further underlined by the variety of political cultures and national memories around Europe. President Macron ‘s challenge in order to reinvigorate the Franco-German relationship is to implement reforms that are compatible with German domestic priorities. That means major liberalization of domestic markets. Given French political culture, and its ingrained hostility to “globalization” as an Anglo-Saxon device,  the only way that the new President will be able to galvanise support is to present liberalization as in the overriding national interest—a national interest that will be sweetened by dressing it up, reasonably enough, as in the European interest. He will have to move the French economy a long way towards being compatible with German preferences before the German population, with their Dutch and Finnish allies, think of making any concessions. The trouble is that French policy since Mitterrand has always promoted the idea of a large EU budget administered by a single Finance Ministry, recycling tax payers’ money to countries in need, ie France. This is a hiding to nowhere. The German, Dutch and Finish electorates are most unlikely to budge on their definition of fiscal union. Their definition is lower tax; budget discipline, and  reasonably flexible markets, especially labour markets.

There is an additional point. The publics of Germany and The Netherlands can both say, with my niece, “hauptsächlich mir geht’s gut”. Both have gigantic trade surpluses. Both have high living standards. Both are creditors, while France’s potential Mediterranean allies are debtors. Their corporations can argue with justification that they cannot bail out partner member states, and keep competitive on global markets. Their taxpayers can say with reason that they already face high tax levels to fund their welfare states, and cannot reasonably be called on to underwrite government spends in other member states. This is Realpolitik, but it can scarcely be called idealistic and European. Indeed, the likelihood of the EU moving towards a federal entity, where Germany and the Netherlands would be on hook to the many poorer countries to the east, and south is all the less likely that the EU’s second largest Europayer, the UK, is heading for the exits. The only way out of this stand-off between incompatible domestic priorities is to make a Big Leap to a new state, a USE. That is the direction in which President Macron will likely lead France, and it maybe that Germany’s Chancellor Merkel, if re-elected in September, will be willing to go. Announcing the intent is the easy part: the reality of how such an EU takes shape cannot be reasonably expected to be other than a battle royal. At the end will be the birth of a possible super state, a USE. And that will immediately have to give priority to its novel domestic interest, and practice Realpolitik on a world stage.

[1] Yanis Varoufakis, Adults in the Room : My Battle with Europe’s Deep Establishment, London, Bodley Head, 2017.p. 321.

[2] « EU takes legal action against Czech Republic, Hungary and Poland : The nations’ refusal to harbor asylum-seekers could ultimately result on financial penalties ». The Atlantic, June 14,2017.

[3] Former Czech President : A Czech exit from the EU is better than forced multiculturalism », Breitbart, June 15, 23017.

[4] “Parliament chief criticizes “Frankenstein Europe”, EU Observer, March 5, 2013.

About Jonathan Story, Professor Emeritus, INSEAD

Jonathan Story is Emeritus Professor of International Political Economy at INSEAD. Prior to joining INSEAD in 1974, he worked in Brussels and Washington, where he obtained his PhD from Johns Hopkins School of Advanced International Studies. He has held the Marusi Chair of Global Business at Rensselaer Polytechnic Institute, and is currently Distinguished Visiting Professor at the Graduate Schoold of Business, Fordham University, New York. He is preparing a monograph on China’s impact on the world political economy, and another on a proposal for a contextual approach to business studies. He has a chapter forthcoming on the Euro crisis. His latest book is China UnCovered: What you need to know to do business in China, (FT/ Pearson’s, 2010) ( His previous books include “China: The Race to Market” (FT/Pearsons, 2003), The Frontiers of Fortune, (Pitman’s, 1999); and The Political Economy of Financial Integration in Europe : The Battle of the Systems,(MIT Press, 1998) on monetary union and financial markets in the EU, and co-authored with Ingo Walter of NYU. His books have been translated into French, Italian, German, Spanish, Chinese, Korean and Arabic. He is also a co-author in the Oxford Handbook on Business and Government(2010), and has contributed numerous chapters in books and articles in professional journals. He is a regular contributor to newspapers, and has been four times winner of the European Case Clearing House “Best Case of the Year” award. His latest cases detail hotel investments in Egypt and Argentina, as well as a women’s garment manufacturer in Sri Lanka and a Chinese auto parts producer. He teaches courses on international business and the global political economy. At the INSEAD campus, in Fontainebleau and Singapore, he has taught European and world politics, markets, and business in the MBA, and PhD programs. He has taught on INSEAD’s flagship Advanced Management Programme for the last three decades, as well as on other Executive Development and Company Specific courses. Jonathan Story works with governments, international organisations and multinational corporations. He is married with four children, and, now, thirteen grandchildren. Besides English, he is fluent in French, German, Spanish, Italian, reads Portuguese and is learning Russian. He has a bass voice, and gives concerts, including Afro-American spirituals, Russian folk, classical opera and oratorio.
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