The Kremlin said on Monday that a U.N.-brokered deal to allow the safe passage of Ukrainian grain exports through the Black Sea is terminated, claiming that Russia’s conditions had not been met.
“The Black Sea agreements ceased to be valid today,” Dmitry Peskov, President Vladimir Putin’s press secretary, was quoted by state news agency TASS as saying.
“As the president of the Russian Federation said earlier, the deadline is July 17. Unfortunately, the part relating to Russia in this Black Sea agreement has not been implemented so far. Therefore, its effect is terminated,” Peskov said.
“As soon as the Russian conditions are met, the Russian Federation will return to the implementation of the deal,” he said.
Russia notified the other parties of its withdrawal from the initiative in a letter sent to the Istanbul-based Joint Coordination Center, set up to monitor the deal’s implementation, a U.N. official confirmed to POLITICO.
The Black Sea grain initiative, which was first brokered by the United Nations and Turkey a year ago in the wake of Russia’s invasion of Ukraine, was last renewed on May 17 for two months. Some 33 million metric tons of grain and oilseeds have so far been exported under the deal, which has been extended three times, offering a lifeline to Ukraine’s farmers and to food-insecure countries in the Global South.
Dutch Foreign Minister Wopke Hoekstra blasted Moscow’s move, saying it threatens food prices and market stability. “It is utterly immoral that Russia continues to weaponise food,” Hoekstra said in a tweet.
‘Enough is enough’
Moscow has repeatedly said it would not agree to a further extension, claiming that it is not seeing the benefit of the pact. “Hidden” Western sanctions, the Kremlin says, are hindering Russia’s own food and fertilizer exports and thus contravening a second deal agreed last July under which the U.N. committed to facilitate these exports for a three-year period.
Last Tuesday, U.N. Secretary-General António Guterres sent a letter to Putin putting forward a compromise proposal to meet a Kremlin demand that Russia’s state agricultural bank be readmitted to the SWIFT payments system.
Two days later, however, Putin reiterated that conditions required for Russia to extend the pact had not been met. “We voluntarily extended this so-called deal many times. Many times. But listen, in the end, enough is enough,” the Russian president said in a TV interview on Thursday night.
“Russia is exporting record amounts of grain,” Ambassador Jim O’Brien, head of the State Department’s Office of Sanctions Coordination, told POLITICO ahead in an interview ahead of Monday’s announcement in Moscow.
“There’s no evidence that Russia is impeded in its exports,” he said, adding that the EU, the U.S., the U.K and U.N. have worked very closely with specific companies said to be facing difficulties to address their concerns.
Last ship
The last ship to travel under the pact left Ukraine’s Odesa port on Sunday morning, according to Reuters. In the run-up to the July 17 deadline, the number of shipments had fallen — dropping to 1.3 million metric tons in May from 4.2 million last October — while no new vessels have been registered under the initiative since the end of June.
Kyiv, which accuses Moscow of sabotaging the deal, is readying alternative routes to export its grain and oilseed crops.
Aid agencies, meanwhile, are bracing for the impact of the deal’s end on global food prices, which they say will hit the world’s most vulnerable in food-insecure countries the hardest.
Wheat prices rose 3 percent on Monday, bringing cumulative gains since the middle of last week to 12 percent, said Carlos Mera, head of agricultural commodities markets at Rabobank. Without the deal, Ukraine will have to export most of its grain and oilseeds via the Danube river, driving up transport and logistics cost and pushing down prices for farmers, who may subsequently plant less, he said.
“This situation means poor countries in Africa and the Middle East will be more dependent on Russian wheat,” said Mera.
Russia’s withdrawal from the initiative “would make it solely responsible for a devastating blow to global grain security,” said O’Brien. “President Putin is well aware that if he chooses to impede or end this arrangement, that he’ll be causing a great deal of trouble for the Global South.”
The Russian Navy is increasing the number of trained dolphins it uses to protect its main military base in the Black Sea, according to intelligence reports.
The animals are guarding the entry to the port of Sevastopol, in Russian-occupied Crimea, and are likely intended to “counter enemy divers,” British military intelligence said Friday.
In recent weeks, “imagery shows a near doubling of floating mammal pens in the harbor which highly likely contain bottle-nosed dolphins,” the report says.
Trained animals have been used for decades by the military or intelligence agencies to carry out specific missions. A Beluga whale which has made several appearances off the Scandinavian coast in recent years is for instance believed to be a spy trained by the Russian army.
Russia’s Black Sea fleet has been targeted by several drone attacks since the start of the Kremlin’s full-scale invasion of Ukraine in February 2022.
In April, Russian ships stationed in Sevastopol were hit by an attack carried out with “three unmanned high-speed boats,” and a fuel depot in the same city was hit by a drone strike a few days later — prompting Moscow to announce a tightening of security measures at the Sevastopol naval base last month.
Ukraine has been accused by Russia of being responsible for these attacks, but has avoided taking responsibility for them.
Russia illegally annexed the Crimean peninsula in 2014.
Pakistan has enough problems — including escalating attacks by Taliban insurgents and a spiraling economic crisis — without the added headache of a new Cold War between China and the U.S.
In an interview with POLITICO, Pakistan’s Secretary of State for Foreign Affairs Hina Rabbani Khar insisted Islamabad had no appetite to pick a side in the growing global rivalry between Washington and Beijing.
As a nuclear-armed heavyweight of 250 million people, Pakistan is one of the most closely watched front-line states in the contest for strategic influence in Asia. While Pakistan’s old Cold War partner Washington is increasingly turning its focus to cooperation with Islamabad’s arch-foe India, China has swooped in to extend its sway in Pakistan — particularly through giant infrastructure projects.
Khar insisted, however, that Islamabad was worried about the repercussions of an all-out rupture between the U.S. and China, which would present Pakistan with an unpalatably binary strategic choice. “We are highly threatened by this notion of splitting the world into two blocs,” Khar said on a visit to Brussels. “We are very concerned about this decoupling … Anything that splits the world further.”
She added: “We have a history of being in a close, collaborative mode with the U.S. We have no intention of leaving that. Pakistan also has the reality of being in a close, collaborative mode with China, and until China suddenly came to everyone’s threat perception, that was always the case.”
It’s clear why Pakistan still sees advantages to walking the strategic tightrope between the U.S. and China. Although U.S. officials have expressed frustration over Pakistan’s historic ties to the Taliban in Afghanistan — and have rowed back on military aid — Washington is still a significant military partner. Last year, the U.S. State Department approved the potential sale of $450 million worth of equipment to maintain Pakistan’s F-16 fighter jets.
Simultaneously, Beijing is pledging to deepen military cooperation with Pakistan — partly to outflank the common enemy in India — and is delivering frigates to the Pakistani navy. China is also building roads, railways, hospitals and energy networks in its western neighbor. While these Chinese investments have boosted the country’s economic development, there are also downsides to going all in with China, with Beijing’s critics arguing that Pakistan has become overly indebted and financially dependent on China.
Khar grabbed headlines in April when a leaked memo appeared in the Wall Street Journal in which she was cited as warning that Pakistan’s instinct to preserve its partnership with the U.S. would harm what she deemed the country’s “real strategic” partnership with China.
She declined to comment on that leak, but took a more bullish line on continued American power in her interview in Brussels, saying the U.S. was unnecessarily fearful and defensive about being toppled from its plinth of global leadership, which she argued remained vital in areas such as healthcare, technology, trade and combating climate change.
“I don’t think the leadership role is being contested, until they start making other people question it by being reactive,” she said. “I believe that the West underestimates the value of its ideals, soft power,” she added, stressing Washington’s role as the world’s standard setter. China biggest selling point for Pakistan, she explained, was an economic model for lifting a huge population out of poverty.
Leverage — and the lack of it — in Kabul
Khar’s sharpest criticism of U.S. policy centered on Afghanistan, where she said restrictions intended to hobble the Taliban were backfiring, causing a humanitarian and security crisis, pushing many Afghans to “criminal activities, narcotics strategy and smuggling.”
The Taliban in Kabul are widely seen as supporting an expanding terror campaign waged by the Pakistani Taliban | Wakil Kohsar/AFP via Getty Images
A weakened Afghanistan is causing increased security problems for Pakistan, and the Taliban in Kabul are widely seen as supporting an expanding terror campaign waged by the Pakistani Taliban. Ironically, given the long history of Pakistan’s engagement with the Afghan Taliban, Islamabad is finding it difficult to exercise its influence and secure Kabul’s help in reining in the latest insurgency wave.
When the Afghan Taliban seized power in Kabul in 2021, Pakistan’s then Prime Minister Imran Khan celebrated their victory against “[American] slavery” and spy chief Faiz Hameed made a visit to Kabul and cheerily predicted “everything will be O.K.” Khar, who took office last year, said Khan had reacted “rather immaturely” and argued her government always knew “the leverage was over-projected.”
While the violence has put Pakistan’s soldiers and police on the front line of the fight against the Taliban at home, Khar said Islamabad was taking a highly diplomatic approach in seeking to win round the Taliban in Afghanistan, pursuing political engagement and focusing on economic development — rather than strong-arm tactics.
“Threatening anyone normally gets you worse results than the ones you started with. Even when it is exceptionally difficult to engage at a point when you think your red lines have not been taken seriously, we will still try the route of engagement.”
She firmly rejected the idea that any other country — either the U.S. or China — could play a role in helping Pakistan defeat the Taliban with military deployments. “When it comes to boots on the ground, we would welcome no one,” she said.
Pakistan is seeking bailout cash from the International Monetary Fund as the economy is hammered by blazing inflation and collapsing reserves. When asked whether she reckoned Washington was holding back on supporting Pakistan, partly to test whether China would step up and play a bigger role in ensuring the country’s stability, Khar replied: “I would be very unhappy if that were the case.”
No to navies
When it came to Europe’s role in the Indo-Pacific region, she was wary of the naval dimensions of EU plans, an element favored by France. She was particularly hostile to any vision of an Indo-Pacific strategy that was dedicated to trying to contain Chinese power in tandem with working with India.
One of the leading fears of the U.S. has long been that China could use its investments in the port of Gwadar to build a naval foothold there, a move that would inflame tensions with India, and allow Beijing to project greater power in the Indian Ocean.
Khar said Europe should tread carefully in calibrating its plan for the region.
“I would be very concerned if it is exclusively or predominantly a military-based strategy, which will then confirm it is a containment strategy, it must not be a containment strategy,” she said of the EU’s Indo-Pacific agenda.
“[If it’s] a containment strategy of a certain country, which then courts a certain country that is a very belligerent neighbor to Pakistan, then instead of stabilizing the region, it is endangering the region.”
The U.K conducted its last evacuation flight from Sudan on Saturday, as the U.S. and France also brought groups of foreign nationals out of the conflict-torn African country.
The moves come amid a deteriorating security situation in Sudan, as fighting continues between the Sudanese Armed Forces and its rival paramilitary Rapid Support Forces.
The British government decided to end evacuation flights “because of a decline in demand by British nationals, and because the situation on ground continues to remain volatile,” the U.K. Foreign Office said in a statement.
“Focus will now turn to providing consular support to British nationals in Port Sudan and in neighboring countries in the region,” it said, noting that more than 1,888 people were evacuated on 21 flights during the operation.
A French plane arrived in Chad on Friday carrying staff from the United Nations and international humanitarian non-profit organizations. France has evacuated over a thousand people from Sudan since the outbreak of hostilities.
The U.S. State Department said on Saturday that a convoy of U.S. citizens, locally-employed staff and citizens of partner countries arrived in Port Sudan and that it is assisting those eligible to travel onward to Saudi Arabia.
“Intensive negotiations by the United States with the support of our regional and international partners enabled the security conditions that have allowed the departure of thousands of foreign and U.S. citizens,” the State Department said.
“We continue,” it added, “to call on the Sudanese Armed Forces and the Rapid Support Forces to end the fighting that is endangering civilians.”
BERLIN — German Foreign Minister Annalena Baerbock is heading to China to represent Berlin, but she’ll likely have more explaining to do about Paris in the wake of French President Emmanuel Macron’s explosive comments on Taiwan.
As Baerbock embarked on her two-day visit Wednesday evening, officials in Berlin were eager to stress that Germany and the EU care about Taiwan and stability in the region, arguing it’s mainly China that must contribute to de-escalation by refraining from aggressive military maneuvers close to the island nation.
Baerbock’s trip comes amid international backlash against Macron’s comments in an interview with POLITICO, arguing Europe should avoid becoming America’s follower, including on the matter of Taiwan’s security. Although German government spokespeople refused to comment directly on the French president’s remarks, a spokesperson for the foreign ministry specifically called out Beijing when expressing “great concern” over the situation in the Taiwan Strait.
“We expect all parties in the region to contribute to peace. That applies equally to the People’s Republic of China,” the spokesperson said, adding: “And it seems to us that actions such as military threatening gestures are counter to that goal and, in fact, increase the risk of unintended military clashes.”
Nils Schmid, the foreign policy spokesperson for German Chancellor Olaf Scholz’s Social Democratic Party (SPD), said he expects Baerbock to “set the record straight” during her trip to China, which will involve meetings with Beijing’s Foreign Minister Qin Gang, Vice President Han Zheng and top diplomat Wang Yi.
“We clearly defined in the [government] coalition agreement that we need a changed China policy because China has changed. The chancellor made that clear during his visit. Above all, Scholz also issued clear warnings about Taiwan during his visit [last year],” Schmid wrote in a tweet. “I assume that Foreign Minister Baerbock will repeat exactly that and thus set the record straight and make a clarification after Macron’s botched visit.”
Berlin traditionally has been much more in sync with the U.S. on foreign and security policy than France has, which is why many politicians and officials in the German capital reacted with horror to Macron’s comments. The French president said Europe should not take its “cue from the U.S. agenda and a Chinese overreaction,” suggesting the EU stood between the two sides, rather than being aligned with its longtime democratic partners in Washington.
Macron gave the impression to some in the U.S. that Europeans see Beijing and Washington as “equidistant” from Brussels in terms of values and as allies, said SPD foreign policy lawmaker Metin Hakverdi, who is currently on a parliamentary visit to the U.S.
“That was foolish,” Hakverdi told POLITICO, adding that “Macron potentially damaged the peaceful status quo around Taiwan” by giving “the public impression that Europe has no particular interest in the conflict over Taiwan.
“The issue of Taiwan is not an internal matter for the People’s Republic of China. Anything else would virtually invite Beijing to attack Taiwan,” Hakverdi added. “I am confident that our foreign minister will make that clear during her trip to Asia — both to Beijing and to our Asian partners.”
Katja Leikert from the main German opposition party, the center-right CDU, criticized Macron’s comments as “extremely short-sighted,” and added: “Should China decide to strike Taiwan militarily, either by invading it or by starting a maritime blockade, this would have significant political and economic repercussions for us. We cannot just wish that away.
“What we actually need to do right now is strengthen our defense against aggressive measures from Beijing,” Leikert said.
For Berlin, Macron’s comments also come at a particularly bad moment for transatlantic ties. The German government is keen to mend cracks in its relationship with Washington that have emerged over the controversial benefits for U.S. businesses under Joe Biden’s Inflation Reduction Act. Europe hopes to reach an agreement so that its own companies may also be eligible for these subsidies.
Macron’s comments “will not help in renegotiations on the Inflation Reduction Act, nor will they help Joe Biden in the election campaign against populist Republican candidates,” said the SPD’s Hakverdi.
The German foreign ministry spokesperson was quick to stress that both France and Germany were involved in shaping a joint EU-China policy | Ludovic Marin/AFP via Getty Images
The German foreign ministry spokesperson was quick to stress that both France and Germany were involved in shaping a joint EU-China policy, which was also done in cooperation “with our transatlantic partner.”
During her trip to China, Baerbock plans to raise the situation in the Taiwan Strait; Russia’s war of aggression against Ukraine; the human rights situation in China; as well as the fight against climate crisis, the spokesperson said.
Baerbock’s foreign ministry is also currently drafting Germany’s first China strategy. A draft of this seen by POLITICO last year vowed to take a much harder line toward Beijing. Baerbock and her Green party are at the forefront of pushing such a tougher position, while Scholz has long preferred a softer approach.
Incidentally, however, the German government said Wednesday it is reassessing whether to potentially take a firmer stance and ban Chinese state company Cosco from going through with a highly controversial move to buy parts of a Hamburg port terminal.
Scholz had strongly pushed for the port deal ahead of his own trip to Beijing last year, but the future of the transaction is now in doubt after German security authorities classified the terminal as “critical infrastructure.”
BRUSSELS — China and other powerful countries need to step up to help steer the world away from a potentially “catastrophic” hunger crisis this year, the new head of the United Nations’ World Food Programme said.
Cindy McCain, an American diplomat and the widow of the late U.S. Senator John McCain, also told POLITICO that the EU and U.S. should see world hunger as a national security issue due to its impact on migration. She furthermore accused Russia of using hunger as a “weapon of war” by hindering exports of Ukrainian grain.
McCain, formerly the U.S. ambassador to the U.N. food agencies, took the helm of the WFP on April 5 and begins her five-year term at a time of increasing world hunger. The number of people facing food insecurity around the world rose to a record 345 million at the end of last year, up from 282 million in 2021, according to the WFP’s figures, as Russia’s war in Ukraine deepened a food crisis driven by climate change, COVID-19 and other conflicts.
This year could be worse still, McCain warned, with the Horn of Africa experiencing its worst drought in 40 years and Haiti facing a sharp rise in food insecurity, among other factors. “2023 is going to be catastrophic if we don’t get to work and raise the money that we need,” she said. “We need a hell of a lot more than we used to.”
Non-Western countries, which have traditionally contributed much less to the WFP, need to step up to meet the shortfall, McCain said, pointing specifically to China and oil-rich Gulf Arab countries. China contributed just $11 million to WFP funds last year, compared to $7.2 billion donated by the U.S.
“There are some countries that have just basically not participated or participated in a very low fashion. I’d like to encourage our Middle Eastern friends to step up to the plate a little more; I’d like to encourage China to step up to the plate a little more,” said McCain. “Every region, every country needs to step up funding.”
Her entreaty may fall on deaf ears, however, given rising geopolitical tensions between the U.S. and China. The WFP’s last six executive directors have been American, dating back to 1992, and Beijing may prefer to distribute aid through its own channels. Last summer, for example, China shipped food aid directly to the Horn of Africa following a drought there.
National security
Countries hesitant to throw more money into food aid should think about the alternative, McCain said, particularly those in Europe that are likely to bear the brunt of any new wave of migration from Africa and the Middle East.
“Food security is a national security issue,” she said. “No refugee wants to leave their home country, but they’re forced to because they don’t have enough food, and they can’t feed their families. So it comes down to if you want a stable world, food is a major player in this.”
The WFP is already having to make brutal decisions despite raking in a record $14.2 billion last year — more than double what it raised in 2017. In February, for instance, it said a funding shortfall was forcing it to cut food rations for Rohingya refugees living in camps in Bangladesh.
The problem is compounded by surging costs following Russia’s invasion of Ukraine last year, which sent already-high food prices soaring further, as grain and oilseed exports through Ukraine’s Black Sea ports plunged from more than 5 million metric tons a month to zero.
A U.N.-brokered deal allowing Ukrainian grain exports to pass through Russia’s blockades in the Black Sea has brought some reprieve, but Moscow’s repeated threats to withdraw from the agreement have kept prices volatile.
Moscow claims that “hidden” Western sanctions are hindering its fertilizer and foods exports and causing hunger in the Global South | Yasuyoshi Chiba/AFP via Getty Images
The deal, initially brokered in July last year, was extended for 120 days last month; Russia, however, agreed to extend its side of the Black Sea grain initiative only for 60 days. Last week, Russian Foreign Minister Sergey Lavrov threatened, once again, to halt Moscow’s participation in the initiative unless obstacles to its own fertilizer and food exports are addressed.
Moscow claims that “hidden” Western sanctions — those targeting Russia’s fertilizer oligarchs and its main agricultural bank, as well as others excluding Russian banks from the international SWIFT payments system — are hindering its fertilizer and foods exports and causing hunger in the Global South.
Ukraine and its Western allies have countered that Russia is deliberately holding up inspections for ships heading to and from its Black Sea ports, creating a backlog of Ukraine-bound vessels off the Turkish coast and inflating prices.
These delayed food cargoes are hindering the WFP’s ability to respond to humanitarian crises, said McCain, who did not hold back on the issue.
“Let’s be very clear, there are no sanctions on [Russian] fertilizer,” she said. “It is not sanctioned and never has been sanctioned.”
Russia is “using hunger as a weapon of war,” said McCain. “it’s unconscionable that a country would do that — any country, not just Russia.”
BELFAST — President Joe Biden arrives in Northern Ireland on Tuesday to salute the 25th anniversary of its U.S.-brokered peace accord. But it will be a hollow celebration.
Power-sharing between British unionists and Irish nationalists, the central vision of the Good Friday Agreement of 1998, is failing.
Northern Ireland has for nearly a year had no elected government at Stormont, the grand parliament building overlooking Belfast. It has no annual budget either — only red ink, rising in a sea of dysfunction. And thanks to Brexit, the U.K.’s most socially divided region this month lost tens of millions in annual European Union funds that had sustained the poorest communities.
Northern Ireland’s fiscal council, created two years ago to advise Stormont following a previous government shutdown, estimates an extra £808 million is needed this year just to keep existing services running at a time of rising energy bills and wage demands.
Instead, the British government in London wants immediate spending cuts topping £500 million. Its failure to deliver a 2023 budget in time for the new fiscal year, or to fulfil pledges to match now-departed EU funds, have left local hospitals, schools and community groups scrambling for services to curtail and staff to cut.
Who slashes spending when there’s no bona-fide government? Emergency legislation laid in Westminster places this burden on 10 unelected permanent secretaries — senior civil servants who were employed to advise ministers neutrally, not take direct political decisions.
With finances running low, the education department has already ended holiday meal subsidies for schoolchildren from poor households — nearly a third of all students. Other departments are braced for cuts averaging 6 to 10 percent. Those drawing up the cuts are incensed.
“I shouldn’t be forced to play the role of minister. It’s an affront to democracy and it’s politically indefensible,” one of the permanent secretaries told POLITICO.
“Locally elected ministers must be taking these deeply consequential decisions if the power-sharing element of the Good Friday Agreement is to mean anything any more,” said the civil servant, who spoke on condition they were not identified because they traditionally do not talk on the record to journalists.
“As long as power-sharing is not working, London needs to take its own responsibilities seriously. Its refusal to act in a timely fashion is making matters needlessly worse. We’re doing damage to so many lives. It’s truly shameful.”
The U.K. government insists it’s right to expect sharp cuts now, arguing the financial problems were created by years of divided, indecisive Stormont governments that failed to take other tough financial decisions.
“We’ve inherited an enormous black hole,” said Steve Baker, a minister in the U.K.’s Northern Ireland Office. “It hasn’t arisen overnight. It is the product of many years of financial mismanagement, and often the expectation of bailout.”
Notorious DUP
Baker places primary blame on the Democratic Unionists, the main pro-British party in Northern Ireland, who refused to form a new unity government with the Irish republicans of Sinn Féin following last year’s Stormont assembly election.
The Democratic Unionists say they will indefinitely obstruct Stormont in protest at the U.K.’s Brexit treaty with the EU. It keeps Northern Ireland, unlike the rest of the U.K., still subject to EU goods rules. Since 2021, that policy has kept cross-border trade with the Republic of Ireland flowing freely — but at the price of complicated new controls on goods arriving from Britain.
Unionists fear, and nationalists hope, that these shifting trade winds will eventually help push Northern Ireland out of the U.K. and into the arms of the republic.
After two years of diplomatic wrangling, the U.K. government and European Commission six weeks ago published a wide-ranging agreement, the Windsor Framework, that vastly reduced EU-required checks on British goods arriving at Northern Irish ports. London and Brussels voiced hopes this would be enough to revive Stormont.
But the famously stubborn DUP — which grew to become the largest unionist party specifically because it rejected the Good Friday deal and opposed compromise with Sinn Féin — is holding out for more, and still won’t re-enter Stormont alongside its adversaries.
Once committed to Northern Ireland’s violent overthrow and abolition, Sinn Féin topped last year’s election ahead of the DUP for the first time, meaning its regional leader — party vice president Michelle O’Neill — should be entitled to the top Stormont post of first minister. The DUP’s loss of top-dog status has increased unionist unease that Northern Ireland’s bonds with Britain could be irreversibly fraying.
The center cannot hold
Moderate politicians blame both extremes for making Northern Ireland ungovernable. They suggest that power-sharing rules drafted a generation ago no longer work in today’s hardened political landscape.
They argue the central requirement for “mandatory coalition” between unionist and nationalist forces should be eased. The policy effectively gives the largest party from each sectarian bloc — for the past two decades the DUP and Sinn Féin — the power to block the formation of any government. As a result, the hard liners have taken turns periodically shutting down Stormont over the past decade.
These rules have a particularly perverse impact on Northern Ireland’s most compromise-minded party, Alliance, which refuses to define itself as either British unionist or Irish nationalist — and is treated as a power-sharing irrelevance as a result.
Alliance was a fringe player back in 1998 but made the biggest gains in last May’s election, finishing third with 17 assembly seats to Sinn Féin’s 27 and the DUP’s 25. Yet instead of Alliance becoming a coalition kingmaker, the current power-sharing rules mean its nonsectarian votes don’t count at all.
Some suggest Alliance leader Naomi Long could sue the British government to force reform.
Alliance Party leader Naomi Long says the Good Friday Agreement’s power-sharing rules explicitly permit periodic reviews of the system | Paul Faith/AFP via Getty Images
“I don’t believe that our votes counting for less than other people is legal,” Long said, citing legal advice that found the prevailing rules violate European human rights law. “We are willing to challenge what is a fundamental inequality at the heart of our government.”
Long says she hopes such a confrontation won’t be necessary, emphasizing that the Good Friday Agreement’s power-sharing rules explicitly permit periodic reviews of the system.
Time for a new deal?
Bertie Ahern, the former Irish prime minister who worked alongside Britain’s Tony Blair in 1998 to achieve the Good Friday breakthrough, also believes the time for dumping “mandatory coalition” is fast approaching. In its place, as advocated by recent think tank papers exploring ways to save Stormont, would be a voluntary coalition — which Ahern pointedly describes as “what happens in a democracy.”
Such a change would mean Sinn Féin and the DUP retain rights, as the largest parties on either side of the divide, to lead a Stormont coalition together. But should either one balk, they could no longer block the formation of a different government combination. This would open the door for more moderate politicians to represent their communities once again.
But while Sinn Féin has said it would be open to talks on making the rules more flexible, the DUP has been quick to rule out the surrender of its veto.
For the journalist who famously broke the news of the Good Friday Agreement a quarter-century ago, Stormont’s ongoing inability to build a stable culture of partnership has made this week’s anniversary bittersweet.
Stephen Grimason, at that time BBC Northern Ireland’s political editor, became Stormont’s chief spin doctor for 15 years. He worked alongside a string of DUP and Sinn Féin ministers who, in his eyes, too often ducked the difficult decisions that would have delivered strong, reforming government.
“Looking back, I have this emptiness in the pit of my stomach about all the opportunities we had,” he told the Belfast Telegraph last week. “We missed every single one of them.”
Anyone looking at France right now could be forgiven for thinking the country was on the edge of a revolution.
Major cities from Paris to Lyon erupted in riots overnight on Thursday, with black-clad protesters lighting bonfires and hurling projectiles at riot police after President Emmanuel Macron rammed an unpopular reform of the pension system through parliament. More than 400 police were injured.
The violence capped weeks of mass protests as millions marched through French cities to oppose the reform, which will raise the legal age of retirement to 64 from 62 currently. More protests are already planned for next week, piling pressure on Macron’s already embattled government and prompting Britain’s King Charles to cancel a highly-awaited visit.
Yet for all the sound and fury of the protests, which could yet worsen if students join in, there’s nearly zero risk that Macron himself will have to leave office. Having narrowly survived a vote of no confidence, he may seek to reshuffle his cabinet and sack his prime minister, Élisabeth Borne — but the presidential system is so designed that the leader is nearly guaranteed to remain president until the last day of his term, in 2027.
The bigger question, then, is about what happens after Macron, whose hyper-personal style of leadership has often been described as king-like, even by the standards of France’s monarchical Republic, leaves the stage for good.
Barred from seeking a third term by the constitution, Macron will leave behind a leaderless and rudderless ruling party that may well cease to exist without him, creating a power vacuum that far-left and far-right leaders, including three-time presidential contender Marine Le Pen, are itching to fill.
And while Macron has a solid hold on power now, the parliamentary rebellion his government faced down this week — and the chaos engulfing the country — raise ominous questions about the future for anyone who hopes to see France stay firmly anchored to the pro-EU, pro-NATO liberal camp.
In other words, after Macron, le déluge.
Macron’s shaky platform
The first danger sign flashing over French democracy is the state of Macron’s own party, the centrist Renaissance group. In many systems, ruling parties have deep roots and an ideological foundation that, at least in theory, give them a raison d’être beyond exercising power.
But this isn’t the case for Macron’s party, which was born for the sole purpose of hoisting its founder into the Elysée presidential palace and then supporting his government. As such, it’s docile by nature and, with a few exceptions, hasn’t produced bold personalities who would in other circumstances be natural successors to the president.
And while the party is already short of a majority in parliament, the rebellion against the pension reform this week revealed Renaissance to be much weaker even than was previously thought — more of a hollow platform for Macron to stand on than a launchpad for future leaders. Indeed, Prime Minister Borne believed that she could rely on support from the center-right Les Républicains party to provide the necessary votes to pass the reform, as part of an informal coalition arrangement.
Yet this hope vanished suddenly and unexpectedly when a group of 19 Les Républicains, led by southern lawmaker Aurélien Pradié, defied orders from their own party leadership and announced they would support a motion of no confidence in Macron’s government. As rebellions go, it revealed not just the weakness of Renaissance, but the continued disarray of the mainstream center-right in France — which has produced most of the country’s leaders since World War II and is now a shadow of its former self.
“The political landscape isn’t just fractured; it doesn’t offer any hope for the president, the government or their supporters,” said Jean-Daniel Lévy, a political analyst with pollster Harris Interactive. “There is no such thing as a Macron doctrine or an ideological successor to Macron.”
The rebellion against the pension reform this week revealed President Emmanuel Macron’s party to be much weaker even than was previously thought | John Macdougall/AFP via Getty Images
The second alarm bell ringing is how much the pension crisis has emboldened the far-right and far-left factions in parliament. Take Jean-Luc Mélenchon, a far-left firebrand who’s made two failed bids for the presidency, and is now the most recognizable face in the NUPES, a recently-formed left-wing coalition gathering what’s left of the Socialist party, Mélenchon’s hard-left France Unbowed group and the Greens.
Having faded from view, Mélenchon has roared back into the limelight during the pension reform battle, appearing constantly in the media. Anti-NATO, Euroskeptic and calling for an end to France’s 5th republic (his 6th Republic would end the presidential monarchy), the ex-socialist whose sympathies lean more toward Venezuela than Brussels is ideally suited to produce revolutionary soundbites.
With his pension reform, Macron has “lit a fire and blocked all the exits,” Mélenchon quipped this week.
Le Pen eyes the crown
Yet Mélenchon’s prospects of taking power in 2027 look slim. According to an IFOP poll published in early March, just 21 percent of the French believe he’s best-positioned to lead the opposition — suggesting he’s not very well-loved by other adherents of the NUPES coalition.
Much better positioned is Marine Le Pen, the far-right chief whom Macron defeated twice in the final rounds of two presidential elections. Indeed, since her last defeat, Le Pen has made further strides toward making herself look presidential while continuing to try to detoxify her party’s image.
Not only has Le Pen ditched the “National Front” party name that was associated with her Holocaust-minimizing father, Jean-Marie Le Pen; she has abandoned an electorally-disastrous plan to exit the euro currency zone and she’s established herself as the leader of her party’s 88-strong delegation in the French parliament, placing her at the center of the action against the pension reform.
She hasn’t confirmed that she’ll make a fourth bid for the presidency. But there’s no reason to believe she wouldn’t. And this time, Macron won’t be around to stop her.
“After Macron, it will be us,” she told BFMTV this week, referring to her National Rally party.
Aside from Le Pen, the obvious choice to succeed Macron would be Édouard Philippe — his remarkably beloved one-time prime minister. Since leaving office in 2017, Philippe has been quietly biding his time as mayor of Le Havre, a mid-sized port city on France’s northern coast, and nurturing his own center-right political platform, Horizons.
The fact that Philippe, in an interview earlier this month, came out to address the fact that he’s suffering both from alopecia and vitiligo only seemed to bolster his popularity with the French, who rate him as their preferred political personality, according to this ranking.
But Philippe’s stance on retirement, backing an increase in the legal age to 67 — above and beyond what Macron proposed — has not done him any favors. According to a poll by Odoxa, 61 percent of the French weren’t happy with his attempt to defend the pension reform.
He still hasn’t said for sure whether he will run in 2027, and the past week’s action suggests his association with Macron could turn out to be a drag on his prospects once campaigning gets started, should he decide to enter the race.
Turkish leader Recep Tayyip Erdoğan on Saturday called for the “immediate cessation” of the war in Ukraine during a phone call with Russian President Vladimir Putin.
Erdoğan also “thanked President Putin for his positive stance regarding the extension of the Black Sea Grain Initiative” and added that the two countries “could take further steps” when it comes to economic cooperation, the Turkish presidency’s communications directorate said in a statement on Saturday.
The Black Sea grain deal, which allowed the export of foodstuffs from Ukraine to resume after Moscow’s unlawful invasion of the country blocked several ports, was extended last weekend. The grain agreement was originally signed last summer by Kyiv and Moscow under the auspices of the United Nations.
The Kremlin said in a statement following the Putin-Erdoğan phone call that the two leaders also discussed the situation in Syria.
They emphasized “the need to continue the process of normalizing relations between Turkey and Syria” and “Russia’s constructive role as a mediator,” according to the statement.
European Commission President Ursula von der Leyen has declared Europe’s dependence on Russian oil and gas “history.”
But others, from senior Ukrainian officials to MEPs and industry insiders, say that chapter of history is still being written.
Significant quantities of Russian hydrocarbons, particularly oil, are still flowing around sanctions and into the European market, they say, earning payments that fund Vladimir Putin’s war machine.
“I had a friend in New York in the 1990s who complained cockroaches would get into his apartment through any available hole — that’s what Russia is doing with its energy,” Oleg Ustenko, economic adviser to Ukrainian President Volodymyr Zelenskyy, told POLITICO. “We have to fix these holes to stop Russia receiving this blood money they are using to finance the military machine that is destroying our country and killing our people.”
Crude oil is notoriously difficult to track on global markets. It can easily be mixed or blended with other shipments in transit countries, effectively creating a larger batch of oil whose origins can’t be determined. The refining process, necessary for any practical application, also removes all traces of the feedstock’s origin.
A complex network of shipping companies, carrying the flags of inscrutable offshore jurisdictions, adds a further layer of mystery; some have been accused of helping Russia to hide the origin of its crude exports using a variety of different means.
“Unlike pipeline gas, the oil market is global. Swap and netting systems, and mixing varieties are common practice,” said Mikhail Khodorkovsky, a prominent exiled critic of Putin and the former CEO of oil and gas giant Yukos.
“The result of the embargo is a significant increase in Russian transportation costs, a significant redistribution of income in favor of intermediaries, and some additional discount due to the narrowing of the buyers’ market.”
Crude workarounds?
The EU has largely banned Russian fossil fuels since the invasion of Ukraine in February 2022, with exceptions for limited quantities of pipeline crude oil, pipeline gas, liquefied natural gas (LNG), and oil products.
But large volumes of Russian crude oil — a bigger source of revenue than gas — are still being shipped onto global markets, leading some experts to suspect they are finding their way to Europe’s market through the back door.
“Since the introduction of sanctions, the volumes of crude oil Russia is exporting have remained more or less steady,” said Saad Rahim, chief economist at global commodities trading firm Trafigura. “It’s possible that Russian oil is still being sold on to the EU and Western nations via middlemen.”
Crude oil is notoriously difficult to track on global markets | Image via iStock
One potential route into Europe is through Azerbaijan, which borders Russia and is the starting point of the Baku-Tbilisi-Ceyhan (BTC) pipeline, operated by BP. The port of Ceyhan, in Turkey, is a major supply hub from which crude oil is shipped to Europe; it also receives large quantities from Iraq through the Kirkuk-Ceyhan pipeline.
François Bellamy, a French MEP and member of the European Parliament’s Committee on Industry, Research and Energy, aired suspicions about this route in a recent question to the Commission. Data show that Azerbaijan exported 242,000 barrels a day more than it produced between April and July last year, he said — a large margin over domestic production, which stood at 648,000 barrels a day last month and is in long-term decline, according to ministry figures.
“How can a country diminish its production and increase its exports at the same time? There is something completely inconsistent in the figures and this inconsistency creates suspicions that sanctions are being circumvented,” Bellamy said.
A spokesperson for the Commission said it is working to crack down on loopholes in sanctions regimes and has appointed the EU’s former ambassador to the U.S., David O’Sullivan, as a special envoy tasked with tackling circumvention. The official also pointed out that data cited by Bellamy on Azerbaijani oil transactions, the most recent publicly available, “happened before the sanctions entered into force so there is no question of evasion of sanctions there.”
“Azerbaijan does not export Russian oil to the EU via the BTC pipeline,” said Aykhan Hajizada, spokesperson for the country’s foreign ministry, adding that while “Azerbaijan continues to use all non-sanctioned oil regardless of source,” it “remains committed to conducting its supply and trading operations with the utmost care and diligence, in line with relevant laws and regulations.”
BP has previously been forced to deny that the BTC pipeline carries Russian oil, and data seen by POLITICO for crude shipments from Ceyhan shows a recent dip in the volume of exports to the EU, from around 3 million tons per month (about 700,000 barrels per day) in early 2022 to around 2 million tons a month this year.
Slick operations
At the same time, though, Turkey doubled its direct imports of Russian oil last year and has refused to impose sanctions on Russian crude despite simultaneously offering military and humanitarian support to Ukraine.
Finland’s Centre for Research on Energy and Clean Air (CREA) warned late last year that “a new route for Russian oil to the EU is emerging through Turkey, a growing destination for Russian crude oil,” where it is refined into oil products that are not subject to sanctions and sold on.
“We have enough evidence that some international companies are buying refinery products made from Russian oil and selling them on to Europe,” said Ustenko, the Zelenskyy adviser. “It’s completely legal, but completely immoral. Just because it’s allowed doesn’t mean we don’t need to do anything about it.”
On Monday, British NGO Global Witness released a report that found Russian oil has consistently been sold at prices far exceeding the $60 cap imposed by G7 countries in December last year.
“The fact Russian oil continues to flow round the world is a feature, not a bug, of Western sanctions,” said Mai Rosner, a campaigner who worked on the report. “Governments offered the fossil fuel industry a wide-open back door, and commodity traders and big oil companies are exploiting these loopholes to continue business as usual.”
A provocative Vladimir Putin made a surprise weekend visit to Russian-occupied Mariupol, one of the symbols of Ukrainian resistance.
Mariupol, a port city on the Sea of Azov, is located in Ukraine’s Donetsk Oblast and this is the Russian president’s first trip in the region since the start of his war against Ukraine in February 2022.
Mariupol fell to Russia last May, after the Kremlin failed to seize Kyiv. The battle for Mariupol was one of the war’s longest and bloodiest, as Moscow’s troops carried out some of their most notorious strikes. The Russian assaults included an attack on a maternity ward, which the Organization for Security and Cooperation in Europe (OSCE) said was a war crime, and the bombing of a theater that was clearly marked as housing children.
It is the closest to the front lines Putin has been since the yearlong war began. The move is likely to be seen as particularly provoking to Ukrainians. The trip to Mariupol came after Putin travelled to Crimea on Saturday in an unannounced visit to mark the ninth anniversary of Russia’s annexation of the peninsula from Ukraine, the Kremlin said in a statement.
Putin’s visits come just after the International Criminal Court (ICC) issued an arrest warrant for the Russian leader and top Russian official Maria Alekseyevna Lvova-Belova over the forced transfer of Ukrainian children to Russia.
German Justice Minister Marco Buschmann said on Sunday that if Putin enters the territory of Germany, he would be detained under the ICC warrant. “Germany will be obliged to arrest President Putin if he enters German territory and hand him over to the ICC,” Buschmann told the Bilt am Sonntag newspaper.
So far during Moscow’s invasion of Ukraine, Putin has largely remained inside the Kremlin, while Ukrainian President Volodymyr Zelenskyy has made a number of trips to the battlefield to boost the morale of Kyiv’s troops.
Putin flew by helicopter to Mariupol, Russian new agencies reported, citing the Kremlin. Then he travelled around several parts of the city, driving a car and making stops to talk to residents.
The Kremlin said Putin also examined the coastline of Mariupol, visiting a yacht club and theater building. In the Nevsky district of Mariupol, Putin visited a family in their home. The new residential neighborhood has been built by Russian military with the first people moving in last September, according to media reports.
Residents have been “actively” returning, Russian Deputy Prime Minister Marat Khusnullin, who accompanied Putin, was cited as saying by Russian agencies. “The downtown has been badly damaged,” Khusnullin was reported as saying. “We want to finish [reconstruction] of the center by the end of the year, at least the facade part. The center is very beautiful.”
Mykhailo Podolyak, an adviser to the Ukrainian president’s office, criticized Putin’s visit to Mariupol on Sunday.
“The criminal always returns to the crime scene,” Podolyak said in a tweet. “The murderer of thousands of Mariupol families came to admire the ruins of the city & graves. Cynicism & lack of remorse,” he said.
The Kremlin has not commented yet on the ICC arrest warrant. Former Russian President Dmitry Medvedev said: “The International Criminal Court has issued an arrest warrant against Vladimir Putin. No need to explain WHERE this paper should be used … ” concluding with a toilet paper emoji.
Moscow has previously said it did not recognize the court’s authority.
At least 43 migrants drowned on Sunday after the fishing boat on which they were traveling sank off the coast of the Italian region of Calabria.
According to local authorities, some 250 migrants were crammed aboard the ship, which broke in two about 20 kilometers from the city of Crotone. Over 100 passengers have been rescued, but at least 70 of the people who were aboard the ship remain missing.
Over the course of the morning, bodies, including those of children and at least one newborn baby, have washed ashore in the resort town of Steccato di Cutro, according to local reports.
Although the ship’s port of origin was in Turkey, authorities say the majority of the migrants that have been rescued are from Iran, Afghanistan and Pakistan.
Italian Interior Minister Matteo Piantedosi said the disaster was “a huge tragedy that demonstrates how necessary it is to oppose the chains of irregular migration,” adding that more needed to be done to clamp down on “unscrupulous smugglers” who, “in order to get rich, organize improvised trips with inadequate boats and in prohibitive conditions.”
Italian Prime Minister Giorgia Meloni expressed her “deep sorrow” for the shipwreck and pledged to stop irregular sea migration in order to prevent more tragedies. “The government is committed to preventing [migrant] departures, and with them the unfolding of these tragedies,” she said in a statement.
“It is inhumane to trade the lives of men, women and children for the price of the ‘ticket’ they have paid with the false prospect of a safe journey,” Meloni said.
Calabrian President Roberto Occhiuto slammed EU authorities for their inaction in addressing the migration crisis and asked “what has the European Union been doing all these years?”
“Where is Europe when it comes to guaranteeing security and legality?” he asked, adding that regions like his were left on their own to “manage emergencies and mourn the dead.”
Opposition parties said the tragedy indicated the flaws in Italy’s migration policy. “Condemning only the smugglers, as the center-right is doing now, is hypocrisy,″ said Laura Ferrara, a European Parliament lawmaker from the 5-Star Movement. “The truth is that the EU today does not offer effective alternatives for those who are forced abandon their country of origin; there are no real alternatives to smugglers and traffickers,″ Ferrara said in a statement.
According to the International Organization for Migration’s Missing Migrants Project, at least 2,366 migrants lost their lives attempting to cross the Mediterranean last year; at least 124 have been reporting missing in its waters since the beginning of this year.
LONDON — After four months of intense talks (and plenty of squabbling before that), the EU and U.K. have a deal to resolve their long-running post-Brexit trade row over Northern Ireland.
But as U.K. Prime Minister Rishi Sunak works to sell the so-called “Windsor framework” on the Northern Ireland protocol to Brexiteers and unionists, lawmakers on both sides of the English Channel and of the Irish Sea are getting to grips with the details.
From paperwork to plants, let POLITICO walk you through the new agreement, asking: Who has given ground, and how exactly will the deal thrashed out by EU and U.K. negotiators aim to keep the bloc’s prized single market secure?
Customs paperwork and checks
For businesses taking part in an expanded “trusted trader scheme,” the Windsor framework aims to considerably cut customs paperwork and checks on goods moving from Great Britain but destined to stay in Northern Ireland.
These goods will pass through a “green lane” requiring minimal paperwork and be labeled “Not for EU,” while those heading for the EU single market in the Republic of Ireland will undergo full EU customs checks in Northern Ireland’s ports under a “red lane.”
Traders in the green lane will only need to complete a single, digitized certificate per truck movement, rather than multiple forms per load.
Sunak has already claimed that this means “any sense of a border in the Irish Sea” — deeply controversial among Northern Ireland’s unionist politicians — has now been “removed.”
However, it’s by no means a total end to Irish Sea red tape. An EU official said that although the deal delivers a “dramatic reduction” in the number of physical food safety checks, for example, there will still be some — those seen as “essential” to avoid the risk of goods entering the single market.
These checks will be based on risk assessments and intelligence, and aimed at preventing smuggling and criminality.
U.K. public health and safety standards will meanwhile apply to all retail food and drink within the U.K. internal market. British rules on public health, marketing, organics, labeling, genetic modification, and drinks such as wines, spirits and mineral waters will apply in Northern Ireland. This will remove more than 60 EU food and drink rules in the original protocol, which were detailed in more than 1,000 pages of legislation.
Supermarkets, wholesalers, hospitality and food producers are likely to welcome the new arrangements. Many had stopped supplying to Northern Ireland because the cost of filling out hundreds of certificates for each consignment was deemed too high for a market as small as Northern Ireland.
Export declarations have been removed for the vast majority of goods moving from Northern Ireland to Great Britain.
The EU’s safeguards: While offering to drastically reduce the volume of checks carried out, the EU has toughened its criteria to become a trusted trader under the expanded scheme. The EU will now have access to databases tracking shipments of goods between Great Britain and Northern Ireland in real time. The system was tested through the winter, helping build trust in Brussels, and is being fed with data from traders and U.K. authorities. The European Commission will be able to suspend part or all of these trade easements if the U.K. fails to comply with the new rules.
The timeline: The U.K. government said it will consult with businesses in the “coming months” before implementing the new rules. The green lane will come into force this fall. Labels for meat, meat products and minimally-processed dairy products such as fresh milk will come into force from October 1, 2024. All relevant products will be marked by July 1, 2025. “Shelf-stable” products like bread and pasta will not be labeled.
Governance
A key plank of the deal is the bid to address complaints by Northern Ireland’s Democratic Unionist Party (DUP) — currently boycotting the power-sharing assembly in the region in opposition to the protocol — that lawmakers there did not have a say in the imposition of new EU rules in the region.
Under the terms of the new agreement, the Commission will have to give the U.K. government notice of future EU regulations intended to apply in Northern Ireland. According to Sunak, Stormont will be given a new power to “pull an emergency brake on changes to EU goods rules” based on “cross-community consent.”
Under this mechanism, the U.K. government will be able to suspend the application in Northern Ireland of an incoming piece of EU law at the request of at least 30 members of the assembly — a third of them. But if unionist parties in Northern Ireland want to trigger the new “Stormont brake,” they must first return to the power-sharing institutions which they abandoned last May. The EU and the U.K. could subsequently agree to apply such a rule in a meeting of the Joint Committee, which oversees the protocol.
Commission President Ursula von der Leyen said this new tool remains an emergency mechanism that hopefully will not need to be used. A second EU official said it would be triggered “under the most exceptional circumstances and as a matter of last resort in a well-defined process” set out in a unilateral declaration by the U.K. These include that the rules have a “significant and lasting impact on the everyday lives” of people in the region.
If the EU disagrees with the U.K.’s trigger of the Stormont brake, the two would resolve the issue through independent arbitration, instead of involving the Court of Justice of the EU.
Meanwhile, Northern Ireland’s courts will consider disputes over the application of EU rules in the region, and judges could decide whether to consult the CJEU on how to interpret them. In a key concession, the Commission has agreed not to unilaterally refer a case to the CJEU, although it retains the power to do so.
The EU’s safeguards: The CJEU will remain the “sole and ultimate arbiter of EU law” and will have the “final say” on EU single market disputes, von der Leyen stressed. Whether Brexiteers and the DUP are willing to accept that remains the million-dollar question.
Tax, state aid and EU rules
The U.K. government will now be able to set rules in areas such as VAT and state aid that will also apply in Northern Ireland — two major wins for Sunak that were rejected by the Commission in previous rounds of negotiations with other U.K. prime ministers.
It will, Sunak was at pains to point out Monday, allow Westminster to pass on a cut in alcohol duty that previously passed Northern Ireland by.
But London has had to give up on its idea of establishing a dual-regulatory mechanism that would have allowed Northern Ireland businesses to choose whether they would follow EU or British rules when manufacturing goods, depending on whether they intended to sell them in the EU single market or in the U.K. The whole idea was deemed by Brussels as impossible to police.
The EU’s safeguards: Northern Irish businesses producing goods for the U.K. internal market will only have to follow “less than 3 percent” of EU single market rules, a U.K. official said. But the nature of these regulations remains unclear, and there will be increased market surveillance and enforcement by U.K. authorities to try and reassure the EU.
The timeline: The U.K. government will be able to exercise these powers as soon as the Windsor framework comes into force.
Parcels
The EU and the U.K. have agreed to scrap customs processes for parcels being sent between consumers in Great Britain to Northern Ireland.
The EU’s safeguards: Parcels sent between businesses will now move through the new green lane, as is the case for other goods destined to stay in Northern Ireland. That should allow them to be monitored, but remove the need to undergo international customs procedures. Parcel operators will share commercial data with the U.K.’s tax authority, HMRC, in a bid to reduce risks to the EU single market.
Timeline: These new arrangements will take effect September 2024.
Pets
Residents in Great Britain will be able to take their dogs, cats and ferrets to Northern Ireland without having to fulfill a requirement for a rabies vaccine, tapeworm treatment and other checks.
Pets traveling from Northern Ireland to Great Britain and back will not be required to have any documentation, declarations, checks or health treatments.
The EU’s safeguards: Microchipped pets will be able to travel with a life-long pet travel document issued for free by the U.K.’s Department for Environment, Food and Rural Affairs. Pet owners will tick a box in their travel booking acknowledging they accept the scheme rules and will not move their pet into the EU.
The timeline: The new rules will take effect fall 2023.
Medicines
Drugs approved for use by the U.K.’s medicines regulator, the MHRA, will be automatically available in every pharmacy and hospital in Northern Ireland, “at the same time and under the same conditions” as in the U.K., von der Leyen said.
Businesses will need to secure approval for a U.K.-wide license from the MHRA to supply medicines to Northern Ireland, rather than having to go through the European Medicines Agency. The agreement removes any EU Falsified Medicines Directive packaging, labeling and barcode requirements for medicines. This means manufacturers will be able to produce a single medicines pack design for the whole of the U.K., including Northern Ireland.
Drugs being shipped into Northern Ireland from Great Britain will be freed of customs paperwork, checks and duties, with traders only being required to provide ordinary commercial information.
The EU’s safeguards: Medicines traveling from Great Britain to Northern Ireland will do so via the new green lane, which will have monitoring to protect the single market built in.
The timeline: The U.K. government said it will engage with the medicines industry soon on these changes.
Plants
The deal lifts the protocol’s ban on seed potatoes entering Northern Ireland from Great Britain, and its prohibition on trees and shrubs deemed of “high risk” for the EU single market. This will enable garden centers and other businesses in Northern Ireland to sell 11 native species to Great Britain and some from other regions.
The Windsor framework also removes sanitary and phytosanitary (SPS) checks on all these plants, and ditches red tape on their shipment into Northern Ireland.
The EU’s safeguards: Supplying businesses will have to obtain a Northern Ireland plant health label, which will be the same as the plant passport already required within Great Britain, but with the addition of the words “for use in the U.K. only” and a QR code linking to the rules.
The timeline: The new scheme and the lifting of the bans will all come into force in the fall.
LONDON — Public sector workers on strike, the cost-of-living climbing, and a government on the ropes.
“It’s hard to miss the parallels” between the infamous ‘Winter of Discontent’ of 1978-79 and Britain in 2023, says Robert Saunders, historian of modern Britain at Queen Mary, University of London.
Admittedly, the comparison only goes so far. In the 1970s it was a Labour government facing down staunchly socialist trade unions in a wave of strikes affecting everything from food deliveries to grave-digging, while Margaret Thatcher’s Conservatives sat in opposition and awaited their chance.
But a mass walkout fixed for Wednesday could yet mark a staging post in the downward trajectory of Rishi Sunak’s Conservatives, just as it did for Callaghan’s Labour.
Britain is braced for widespread strike action Wednesday, as an estimated 100,000 civil servants from government departments, ports, airports and driving test centers walk out alongside hundreds of thousands of teachers across England and Wales, train drivers from 14 national operators and staff at 150 U.K. universities.
It follows rolling action by train and postal workers, ambulance drivers, paramedics, and nurses in recent months. In a further headache for Sunak, firefighters on Monday night voted to walk out for the first time in two decades.
While each sector has its own reasons for taking action, many of those on strike are united by the common cause of stagnant pay, with inflation still stubbornly high. And that makes it harder for Sunak to pin the blame on the usual suspects within the trade union movement.
Mr Reasonable
Industrial action has in the past been wielded as a political weapon by the Conservative Party, which could count on a significant number of ordinary voters being infuriated by the withdrawal of public services.
Tories have consequently often used strikes as a stick with which to beat their Labour opponents, branding the left-wing party as beholden to its trade union donors.
Sunak has so far attempted to cast himself as Mr Reasonable, stressing that his “door is always open” to workers but warning that the right to strike must be “balanced” with the provision of services. To this end, he is pressing ahead with long-promised legislation to enforce minimum service standards in sectors hit by industrial action.
Sunak has made tackling inflation the raison d’etre of his government, and his backbenchers are reasonably content to rally behind that banner | POOL photo by Oli Scarff/Getty Images
Unions are enraged by the anti-strike legislation, yet Sunak’s soft-ish rhetoric is still in sharp relief to the famously bellicose Thatcher, who pledged during the 1979 strikes that “if someone is confronting our essential liberties … then, by God, I will confront them.”
Sunak’s careful approach is chosen at least in part because the political ground has shifted beneath him since the coronavirus pandemic struck in 2020.
Public sympathy for frontline medical staff, consistently high in the U.K., has been further embedded by the extreme demands placed upon nurses and other hospital staff during the pandemic. And inflation is hitting workers across the economy — not just in the public sector — helping to create a broader reservoir of sympathy for strikers than has often been found in the past.
James Frayne, a former government adviser who co-founded polling consultancy Public First, observes: “Because of the cost-of-living crisis, what you [as prime minister] can’t do, as you might be able to do in the past, is just portray this as being an ideologically-driven strike.”
Starmer’s sleight of hand
At the same time, strikes are not the political headache for the opposition Labour Party they once were.
Thatcher was able to portray Callaghan as weak when he resisted the use of emergency powers against the unions. David Cameron was never happier than when inviting then-Labour leader Ed Miliband to disown his “union paymasters,” particularly during the last mass public sector strike in 2011.
Crucially, trade union votes had played a key role in Miliband’s election as party leader — something the Tories would never let him forget. But when Sunak attempts to reprise Cameron’s refrains against Miliband, few seem convinced.
QMUL’s Saunders argues that the Conservatives are trying to rerun “a 1980s-style campaign” depicting Labour MPs as being in the pocket of the unions. But “I just don’t think this resonates with the public,” he added.
Labour’s current leader, Keir Starmer, has actively sought to weaken the left’s influence in the party, attracting criticism from senior trade unionists. Most eye-catchingly, Starmer sacked one of his own shadow ministers, Sam Tarry, after he defied an order last summer that the Labour front bench should not appear on picket lines.
Starmer has been “given cover,” as one shadow minister put it, by Sunak’s decision to push ahead with the minimum-service legislation. It means Labour MPs can please trade unionists by fighting the new restrictions in parliament — without having to actually stand on the picket line.
So far it seems to be working. Paul Nowak, general secretary of the Trades Union Congress, an umbrella group representing millions of U.K. trade unionists, told POLITICO: “Frankly, I’m less concerned about Labour frontbenchers standing up on picket lines for selfies than I am about the stuff that really matters to our union” — namely the government’s intention to “further restrict the right to strike.”
The TUC is planning a day of action against the new legislation on Wednesday, coinciding with the latest wave of strikes.
Sticking to their guns
For now, Sunak’s approach appears to be hitting the right notes with his famously restless pack of Conservative MPs.
Sunak has made tackling inflation the raison d’etre of his government, and his backbenchers are reasonably content to rally behind that banner.
As one Tory MP for an economically-deprived marginal seat put it: “We have to hold our nerve. There’s a strong sense of the corner (just about) being turned on inflation rising, so we need to be as tough as possible … We can’t now enable wage increases that feed inflation.”
Another agreed: “Rishi should hold his ground. My guess is that eventually people will get fed up with the strikers — especially rail workers.”
Furthermore, Public First’s Frayne says his polling has picked up the first signs of an erosion of support for strikes since they kicked off last summer, particularly among working-class voters.
“We’re at the point now where people are feeling like ‘well, I haven’t had a pay rise, and I’m not going to get a pay rise, and can we all just accept that it’s tough for everybody and we’ve got to get on with it,’” he said.
More than half (59 percent) of people back strike action by nurses, according to new research by Public First, while for teachers the figure is 43 percent, postal workers 41 percent and rail workers 36 percent.
‘Everything is broken’
But the broader concern for Sunak’s Conservatives is that, regardless of whatever individual pay deals are eventually hammered out, the wave of strikes could tap into a deeper sense of malaise in the U.K.
Inflation remains high, and the government’s independent forecaster predicted in December that the U.K. will fall into a recession lasting more than a year.
More than half (59 percent) of people back strike action by nurses, according to new research by Public First, while for teachers the figure is 43 percent, postal workers 41 percent and rail workers 36 percent | Joseph Prezioso/AFP via Getty Images
Strikes by ambulance workers only drew more attention to an ongoing crisis in the National Health Service, with patients suffering heart attacks and strokes already facing waits of more than 90 minutes at the end of 2022.
Moving around the country has been made difficult not only by strikes, but by multiple failures by rail providers on key routes.
One long-serving Conservative MP said they feared a sense of fatalism was setting in among the public — “the idea that everything is broken and there’s no point asking this government to fix it.”
A former Cabinet minister said the most pressing issue in their constituency is the state of public services, and strike action signaled political danger for the government. They cautioned that the public are not blaming striking workers, but ministers, for the disruption.
Those at the top of government are aware of the risk of such a narrative taking hold, with the chancellor, Jeremy Hunt, taking aim at “declinism about Britain” in a keynote speech Friday.
Whether the government can do much to change the story, however, is less clear.
Saunders harks back to Callaghan’s example, noting that public sector workers were initially willing to give the Labour government the benefit of the doubt, but that by 1979 the mood had fatally hardened.
This is because strikes are not only about falling living standards, he argues. “It’s also driven by a loss of faith in government that things are going to get better.”
With an election looming next year, Rishi Sunak is running out of time to turn the public mood around.
Annabelle Dickson and Graham Lanktree contributed reporting.
BELFAST — A top-level British diplomatic mission designed to soothe tensions over the Northern Ireland trade protocol instead opened new divisions Wednesday when the leader of Sinn Féin was unexpectedly barred.
U.K. government officials offered conflicting explanations for blocking Mary Lou McDonald from the Northern Ireland Office meeting with Foreign Secretary James Cleverly. He had traveled to Belfast to brief local party leaders on Monday’s breakthrough with the European Commission on making post-Brexit trade arrangements work better in what remains the most bitterly divided corner of the U.K.
McDonald’s exclusion triggered a boycott of the meeting by Sinn Féin, the largest party in the mothballed Northern Ireland Assembly, as well as its moderate competitor for Irish nationalist votes, the Social Democratic and Labour Party (SDLP). It propelled the Belfast talks to the top of an Irish news agenda bored stiff by the long-running Brexit protocol dispute — and played straight into the hands of Sinn Féin, which lost no time in denouncing perfidious Albion.
“Apart from this being utterly bizarre, I mean beyond bizarre, it’s extremely unhelpful,” McDonald said nearby the Northern Ireland Office headquarters in central Belfast, where Cleverly hosted the talks attended by only three of the five parties from Northern Ireland’s collapsed power-sharing government.
“It’s a bad message and a bad signal if the British Tories are now behaving in this petulant fashion and saying that they would seek to exclude people from the very necessary work that needs now to be done,” McDonald said.
British government officials initially defended McDonald’s exclusion on the grounds that she is not an elected member of the Stormont assembly — a condition not cited or enforced on many similar political gatherings dating back to McDonald’s February 2018 elevation to the Sinn Féin leadership.
McDonald represents central Dublin in the Republic of Ireland parliament, reflecting Sinn Féin’s status as the only major political party contesting elections in both parts of Ireland. Since 2020 she has led the parliamentary opposition to the coalition government of Prime Minister Leo Varadkar and Foreign Minister Micheál Martin.
An explanation circulated by the Northern Ireland Office to journalists said its meeting invite had specified attendance by Michelle O’Neill, McDonald’s party deputy and the senior Sinn Féin politician north of the border.
O’Neill and McDonald had planned to attend together, as has been common. Both similarly plan to meet Varadkar and Labour Party leader Keir Starmer when they make separate visits Thursday to Belfast.
“The leader of Sinn Féin in the [Northern Ireland] Assembly was invited and remains invited. Her attendance is a matter for Sinn Féin. But she was not excluded,” the U.K. government said, referring to O’Neill.
Others quickly pointed out an evident contradiction. Leaders of two other parties — the Democratic Unionists’ Jeffrey Donaldson and the SDLP’s Colum Eastwood — had been invited, even though they, just like McDonald, have no role at Stormont.
Cleverly’s office circulated a second explanation citing a different protocol — diplomatic protocol — as the real reason not to permit McDonald through the door.
Those officials cited Ireland’s December 17 Cabinet reshuffle in which Martin replaced Simon Coveney as foreign minister. This meant, they said, Cleverly needed to hold a face-to-face meeting with Martin before he could do the same with opposition leader McDonald.
Irish nationalist and center-ground politicians dismissed both explanations. They noted that U.K. government leaders already have met dozens of times with Martin, who served as prime minister for the first half of Ireland’s planned five-year government.
In Dublin, senior officials also questioned the U.K.’s stated rationale.
“I’d like to think we wouldn’t be quite so stupid as to offer this insult up on a plate to Sinn Féin. It seems such an obvious point to make, but the parties in Northern Ireland should be free to choose who represents them at any table. This is normally never an issue. This shouldn’t be made an issue,” one official told POLITICO. “Citing the rules of diplomacy for this move boggles the mind.”
Cleverly and Chris Heaton-Harris, the secretary of state for Northern Ireland who also took part in Wednesday’s meeting, declined comment.
Donaldson — whose party is blocking the operation of the Stormont assembly and formation of a new cross-community government in protest against the trade protocol — said he wouldn’t comment on whether it had been right or wrong to exclude McDonald.
But he said Cleverly and Heaton-Harris had reassured him in the behind-closed-doors meeting that any agreement on reforming the trade protocol must meet his party’s core demands. These include an end to any EU controls on British goods arriving at local ports that are destined to remain within Northern Ireland.
“They recognize that a deal with the EU that doesn’t work for unionists just isn’t going to fly,” Donaldson said.
Nine months after invading Ukraine, Vladimir Putin is beginning to fracture the West.
Top European officials are furious with Joe Biden’s administration and now accuse the Americans of making a fortune from the war, while EU countries suffer.
“The fact is, if you look at it soberly, the country that is most profiting from this war is the U.S. because they are selling more gas and at higher prices, and because they are selling more weapons,” one senior official told POLITICO.
The explosive comments — backed in public and private by officials, diplomats and ministers elsewhere — follow mounting anger in Europe over American subsidies that threaten to wreck European industry. The Kremlin is likely to welcome the poisoning of the atmosphere among Western allies.
“We are really at a historic juncture,” the senior EU official said, arguing that the double hit of trade disruption from U.S. subsidies and high energy prices risks turning public opinion against both the war effort and the transatlantic alliance. “America needs to realize that public opinion is shifting in many EU countries.”
The EU’s chief diplomat Josep Borrell called on Washington to respond to European concerns. “Americans — our friends — take decisions which have an economic impact on us,” he said in an interview with POLITICO.
The biggest point of tension in recent weeks has been Biden’s green subsidies and taxes that Brussels says unfairly tilt trade away from the EU and threaten to destroy European industries. Despite formal objections from Europe, Washington has so far shown no sign of backing down.
At the same time, the disruption caused by Putin’s invasion of Ukraine is tipping European economies into recession, with inflation rocketing and a devastating squeeze on energy supplies threatening blackouts and rationing this winter.
As they attempt to reduce their reliance on Russian energy, EU countries are turning to gas from the U.S. instead — but the price Europeans pay is almost four times as high as the same fuel costs in America. Then there’s the likely surge in orders for American-made military kit as European armies run short after sending weapons to Ukraine.
It’s all got too much for top officials in Brussels and other EU capitals. French President Emmanuel Macron said high U.S. gas prices were not “friendly” and Germany’s economy minister has called on Washington to show more “solidarity” and help reduce energy costs.
Ministers and diplomats based elsewhere in the bloc voiced frustration at the way Biden’s government simply ignores the impact of its domestic economic policies on European allies.
When EU leaders tackled Biden over high U.S. gas prices at the G20 meeting in Bali last week, the American president simply seemed unaware of the issue, according to the senior official quoted above. Other EU officials and diplomats agreed that American ignorance about the consequences for Europe was a major problem.
“The Europeans are discernibly frustrated about the lack of prior information and consultation,” said David Kleimann of the Bruegel think tank.
Officials on both sides of the Atlantic recognize the risks that the increasingly toxic atmosphere will have for the Western alliance. The bickering is exactly what Putin would wish for, EU and U.S. diplomats agreed.
The growing dispute over Biden’s Inflation Reduction Act (IRA) — a huge tax, climate and health care package — has put fears over a transatlantic trade war high on the political agenda again. EU trade ministers are due to discuss their response on Friday as officials in Brussels draw up plans for an emergency war chest of subsidies to save European industries from collapse.
“The Inflation Reduction Act is very worrying,” said Dutch Trade Minister Liesje Schreinemacher. “The potential impact on the European economy is very big.”
“The U.S. is following a domestic agenda, which is regrettably protectionist and discriminates against U.S. allies,” said Tonino Picula, the European Parliament’s lead person on the transatlantic relationship.
An American official stressed the price setting for European buyers of gas reflects private market decisions and is not the result of any U.S. government policy or action. “U.S. companies have been transparent and reliable suppliers of natural gas to Europe,” the official said. Exporting capacity has also been limited by an accident in June that forced a key facility to shut down.
In most cases, the official added, the difference between the export and import prices doesn’t go to U.S. LNG exporters, but to companies reselling the gas within the EU. The largest European holder of long-term U.S. gas contracts is France’s TotalEnergies for example.
It’s not a new argument from the American side but it doesn’t seem to be convincing the Europeans. “The United States sells us its gas with a multiplier effect of four when it crosses the Atlantic,” European Commissioner for the Internal Market Thierry Breton said on French TV on Wednesday. “Of course the Americans are our allies … but when something goes wrong it is necessary also between allies to say it.”
Cheaper energy has quickly become a huge competitive advantage for American companies, too. Businesses are planning new investments in the U.S. or even relocating their existing businesses away from Europe to American factories. Just this week, chemical multinational Solvay announced it is choosing the U.S. over Europe for new investments, in the latest of a series of similar announcements from key EU industrial giants.
Allies or not?
Despite the energy disagreements, it wasn’t until Washington announced a $369 billion industrial subsidy scheme to support green industries under the Inflation Reduction Act that Brussels went into full-blown panic mode.
“The Inflation Reduction Act has changed everything,” one EU diplomat said. “Is Washington still our ally or not?”
For Biden, the legislation is a historic climate achievement. “This is not a zero-sum game,” the U.S. official said. “The IRA will grow the pie for clean energy investments, not split it.”
But the EU sees that differently. An official from France’s foreign affairs ministry said the diagnosis is clear: These are “discriminatory subsidies that will distort competition.” French Economy Minister Bruno Le Maire this week even accused the U.S. of going down China’s path of economic isolationism, urging Brussels to replicate such an approach. “Europe must not be the last of the Mohicans,” he said.
The EU is preparing its responses, such as a big subsidy push to prevent European industry from being wiped out by American rivals. “We are experiencing a creeping crisis of trust on trade issues in this relationship,” said German MEP Reinhard Bütikofer.
“At some point, you have to assert yourself,” said French MEP Marie-Pierre Vedrenne. “We are in a world of power struggles. When you arm-wrestle, if you are not muscular, if you are not prepared both physically and mentally, you lose.”
Behind the scenes, there is also growing irritation about the money flowing into the American defense sector.
The U.S. has by far been the largest provider of military aid to Ukraine, supplying more than $15.2 billion in weapons and equipment since the start of the war. The EU has so far provided about €8 billion of military equipment to Ukraine, according to Borrell.
According to one senior official from a European capital, restocking of some sophisticated weapons may take “years” because of problems in the supply chain and the production of chips. This has fueled fears that the U.S. defense industry can profit even more from the war.
The Pentagon is already developing a roadmap to speed up arms sales, as the pressure from allies to respond to greater demands for weapons and equipment grows.
Another EU diplomat argued that “the money they are making on weapons” could help Americans understand that making “all this cash on gas” might be “a bit too much.”
The diplomat argued that a discount on gas prices could help us to “keep united our public opinions” and to negotiate with third countries on gas supplies. “It’s not good, in terms of optics, to give the impression that your best ally is actually making huge profits out of your troubles,” the diplomat said.
Giorgio Leali, Stuart Lau, Camille Gijs, Sarah Anne Aarup and Gloria Gonzalez contributed reporting.
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Barbara Moens, Jakob Hanke Vela and Jacopo Barigazzi
Western officials welcomed Russia’s retreat from the Ukrainian city of Kherson, labeled a “big moment” by the White House and “another strategic failure” for Moscow by the U.K.
Ukrainian troops on Friday entered Kherson, the only provincial capital to be taken by Russia in its invasion. The Russian Defense Ministry confirmed in a video that Moscow’s troops had been withdrawn from the Ukrainian city and other territories on the western bank of the Dnipro River, in a huge blow to President Vladimir Putin’s war effort.
“It has broader strategic implications as well,” U.S. National Security Adviser Jake Sullivan said, “because being able to push the Russians across the river means that the longer-term threat to places like Odesa and the Black Sea coastline are reduced from where they were before.”
“And so this is a big moment. And it’s certainly not the end of the line, but it’s a big moment,” the top White House official told reporters while flying to a Southeast Asian summit in Cambodia, according to a readout published online.
French President Emmanuel Macron called it a “critical step towards the restoration of [Ukraine’s] sovereign rights.”
U.K. Defense Secretary Ben Wallace said Russia’s retreat “marks another strategic failure for them. In February, Russia failed to take any of its major objectives except Kherson,” according to a statement.
The Ukrainian military said it was overseeing “stabilization measures” around Kherson to make sure it was safe, the Associated Press reported on Saturday. Kyiv was making speedy but cautious efforts to make the city liveable after months of occupation, as one official described it as “a humanitarian catastrophe,” the news outlet said.
“We will restore all conditions of normal life – as much as possible,” Ukrainian President Volodymyr Zelenskyy said in his nightly address. “Our defenders are immediately followed by policemen, sappers, rescuers, energy workers,” he said. “Medicine, communications, social services are returning.’
Roman Holovnya, an adviser to Kherson’s mayor, said humanitarian aid and supplies had begun to arrive, but that many residents still lacked water, medicine, food and electricity, the AP reported.
“The occupiers and collaborators did everything possible so that those people who remained in the city suffered as much as possible over those days, weeks, months of waiting” for Ukraine’s forces to arrive, Holovnya said. “Water supplies are practically nonexistent,” he said.
“I am moved to tears to witness freedom returning to Kherson,” Estonian Prime Minister Kaja Kallas tweeted on Saturday. “Ukrainians hugging their soldiers, and blue and yellow flags raised.”
Ukrainian Foreign Minister Dmytro Kuleba on Saturday said that the “war goes on” after the Ukrainian army’s success. Ahead of a meeting with U.S. Secretary of State Antony Blinken in Cambodia, Kuleba also thanked Washington for helping Kyiv against Moscow’s invasion.
“It’s only together that we will be able to prevail and to kick Russia out of Ukraine. We are on the way. This is coming, and our victory will be our joint victory — victory of all peace-loving nations across the world,” Kuleba said.
LIVERPOOL, England — On the long picket line outside the gates of Liverpool’s Peel Port, rain-soaked dock workers warm themselves with cups of tea as they listen to 1980s pop.
Dozens of buses, cars and trucks honk in solidarity as they pass.
Dockers’ strikes are not new to Liverpool, nor is depravation. But this latest walk-out at Britain’s fourth-largest port is part of something much bigger, a great wave of public and private sector strikes taking place across the U.K. Railways, postal services, law courts and garbage collections are among the many public services grinding to a halt.
The immediate cause of the discontent, as elsewhere, is the rising cost of living. Inflation in the United Kingdom breached the 10 percent mark this year, with wages failing to keep pace.
But the U.K.’s economic woes long predate the current crisis. For more than a decade, Britain has been beset by weak economic growth, anaemic productivity, and stagnant private and public sector investment. Since 2016, its political leadership has been in a state of Brexit-induced flux.
Half a century after U.S. Secretary of State Henry Kissinger looked at the U.K.’s 1970s economic malaise and declared that “Britain is a tragedy,” the United Kingdom is heading to be the sick man of Europe once again.
The immediate cause of Liverpool dockers’ discontent that brought them to strike is the rising cost of living. | Christopher Furlong/Getty Images
Here in Liverpool, the “scars run very deep,” said Paul Turking, a dock worker in his late 30s. British voters, he added, have “been misled” by politicians’ promises to “level up” the country by investing heavily in regional economies. Conservatives “will promise you the world and then pull the carpet out from under your feet,” he complained.
“There’s no middle class no more,” said John Delij, a Peel Port veteran of 15 years. He sees the cost-of-living crisis and economic stagnation whittling away the middle rung of the economic ladder.
“How many billionaires do we have?” Delij asked, wondering how Britain could be the sixth-largest economy in the world with a record number of billionaires when food bank use is 35 percent above its pre-pandemic level. “The workers put money back into the economy,” he said.
What would they do if they were in charge? “Invest in affordable housing,” said Turking. “Housing and jobs.”
Falling behind
The British economy has been struck by particular turbulence over recent weeks. The cost of government borrowing soared in the wake of former PM Liz Truss’ disastrous mini-budget on September 23, with the U.K.’s central bank forced to step in and steady the bond markets.
But while the swift installation of Rishi Sunak, the former chancellor, as prime minister seems to have restored a modicum of calm, the economic backdrop remains bleak. Spending and welfare cuts are coming. Taxes are certain to rise. And the underlying problems cut deep.
U.K. productivity growth since the financial crisis has trailed that of comparator nations such as the U.S., France and Germany. As such, people’s median incomes also lag behind neighboring countries over the same period. Only Russia is forecast to have worse economic growth among the G20 nations in 2023.
In 1976, the U.K. — facing stagflation, a global energy crisis, a current account deficit and labor unrest — had to be bailed out by the International Monetary Fund. It feels far-fetched, but today some are warning it could happen again.
The U.K. is spluttering its way through an illness brought about in part through a series of self-inflicted wounds that have undermined the basic pillars of any economy: confidence and stability.
The political and economic malaise is such that it has prompted unwanted comparisons with countries whose misfortunes Britain once watched amusedly from afar.
“The existential risk to the U.K. … is not that we’re suddenly going to go off an economic cliff, or that the country’s going to descend into civil war or whatever,” said Jonathan Portes, professor of economics at King’s College London. “It’s that we will become like Italy.”
Portes, of course, does not mean a country blessed with good weather and fine food — but an economy hobbled by persistently low growth, caught in a dysfunctional political loop that lurches between “corrupt and incompetent right-wing populists” and “well-intentioned technocrats who can’t actually seem to turn the ship around.”
“That’s not the future that we want in the U.K,” he said.
Reviving the U.K.’s flatlining economy will not happen overnight. As Italy’s experience demonstrates, it’s one thing to diagnose an illness — another to cure it.
Experts speak of an unbalanced model heavily reliant upon Britain’s services sector and beset with low productivity, a result of years of underinvestment and a flexible labor market which delivers low unemployment but often insecure and low-paid work.
“We’re not investing in skills; businesses aren’t investing,” said Xiaowei Xu, senior research economist at the Institute for Fiscal Studies. “It’s not that surprising that we’re not getting productivity growth.”
But any attempt to address the country’s ailments will require its economic stewards to understand their underlying causes — and those stretch back at least to the first truly global crisis of the 21st century.
Crash and burn
The 2008 financial crisis hammered economies around the world, and the U.K. was no exception. Its economy shrunk by more than 6 percent between the first quarter of 2008 and the second quarter of 2009. Five years passed before it returned to its pre-recession size.
For Britain, the crisis in fact began in September 2007, a year before the collapse of Lehman Brothers, when wobbles in the U.S. subprime mortgage market sparked a run on the British bank Northern Rock.
The U.K. discovered it was particularly vulnerable to such a shock. Over the second half of the 20th century, its manufacturing base had largely eroded as its services sector expanded, with financial and professional services and real estate among the key drivers. As the Bank of England put it: “The interconnectedness of global finance meant that the U.K. financial system had become dangerously exposed to the fall-out from the U.S. sub-prime mortgage market.”
The crisis was a “big shock to the U.K.’s broad economic model,” said John Springford, from the Centre for European Reform. Productivity took an immediate hit as exports of financial services plunged. It never fully recovered.
“Productivity before the crash was basically, ‘Can we create lots and lots of debt and generate lots and lots of income on the back of this? Can we invent collateralized debt obligations and trade them in vast volumes?’” said James Meadway, director of the Progressive Economy Forum and a former adviser to Labour’s left-wing former shadow chancellor, John McDonnell.
A post-crash clampdown on City practises had an obvious impact.
“This is a major part of the British economy, so if it’s suddenly not performing the way it used to — for good reasons — things overall are going to look a bit shaky,” Meadway added.
The shock did not contain itself to the economy. In a pattern that would be repeated, and accentuated, in the coming years, it sent shuddering waves through the country’s political system, too.
The 2010 election was fought on how to best repair Britain’s broken economy. In 2009, the U.K. had the second-highest budget deficit in the G7, trailing only the U.S., according to the U.K. government’s own fiscal watchdog, the Office for Budget Responsibility (OBR).
The Conservative manifesto declared “our economy is overwhelmed by debt,” and promised to close the U.K.’s mounting budget deficit in five years with sharp public sector cuts. The incumbent Labour government responded by pledging to halve the deficit by 2014 with “deeper and tougher” cuts in public spending than the significant reductions overseen by former Conservative Prime Minister Margaret Thatcher in the 1980s.
The election returned a hung parliament, with the Conservatives entering into a coalition with the Liberal Democrats. The age of austerity was ushered in.
Austerity nation
Defenders of then-Chancellor George Osborne’s austerity program insist it saved Britain from the sort of market-led calamity witnessed this fall, and put the U.K. economy in a condition to weather subsequent global crises such as the COVID-19 pandemic and the fallout from the war in Ukraine.
“That hard work made policies like furlough and the energy price cap possible,” said Rupert Harrison, one of Osborne’s closest Treasury advisers.
Pointing to the brutal market response to Truss’ freewheeling economic plans, Harrison praised the “wisdom” of the coalition in prioritizing tackling the U.K.’s debt-GDP ratio. “You never know when you will be vulnerable to a loss of credibility,” he noted.
But Osborne’s detractors argue austerity — which saw deep cuts to community services such as libraries and adult social care; courts and prisons services; road maintenance; the police and so much more — also stripped away much of the U.K.’s social fabric, causing lasting and profound economic damage. A recent study claimed austerity was responsible for hundreds of thousands of excess deaths.
Under Osborne’s plan, three-quarters of the fiscal consolidation was to be delivered by spending cuts. With the exception of the National Health Service, schools and aid spending, all government budgets were slashed; public sector pay was frozen; taxes (mainly VAT) rose.
But while the government came close to delivering its fiscal tightening target for 2014-15, “the persistent underperformance of productivity and real GDP over that period meant the deficit remained higher than initially expected,” the OBR said. By his own measure, Osborne had failed, and was forced to push back his deficit-elimination target further. Austerity would have to continue into the second half of the 2010s.
Many economists contend that the fiscal belt-tightening sucked demand out of the economy and worsened Britain’s productivity crisis by stifling investment. “That certainly did hit U.K. growth and did some permanent damage,” said King’s College London’s Portes.
“If that investment isn’t there, other people start to find it less attractive to open businesses,” former Labour aide Meadway added. “If your railways aren’t actually very good … it does add up to a problem for businesses.”
A 2015 study found U.K. productivity, as measured by GDP per hour worked, was now lower than in the rest of the G7 by a whopping 18 percentage points.
“Frankly, nobody knows the whole answer,” Osborne said of Britain’s productivity conundrum in May 2015. “But what I do know is that I’d much rather have the productivity challenge than the challenge of mass unemployment.”
‘Jobs miracle’
Rising employment was indeed a signature achievement of the coalition years. Unemployment dropped below 6 percent across the U.K. by the end of the parliament in 2015, with just Germany and Austria achieving a lower rate of joblessness among the then-28 EU states. Real-term wages, however, took nearly a decade to recover to pre-crisis levels.
Economists like Meadway contend that the rise in employment came with a price, courtesy of Britain’s famously flexible labor market. He points to a Sports Direct warehouse in the East Midlands, where a 2015 Guardian investigation revealed the predominantly immigrant workforce was paid illegally low wages, while the working conditions were such that the facility was nicknamed “the gulag.”
The warehouse, it emerged, was built on a former coal mine, and for Meadway the symbolism neatly charts the U.K.’s move away from traditional heavy industry toward more precarious service sector employment. “It’s not a secure job anymore,” he said. “Once you have a very flexible labor market, the pressure on employers to pay more and the capacity for workers to bargain for more is very much reduced.”
Throughout the period, the Bank of England — the U.K.’s central bank — kept interest rates low and pursued a policy of quantitative easing. “That tends to distort what happens in the economy,” argued Meadway. QE, he said, is a “good [way of] getting money into the hands of people who already have quite a lot” and “doesn’t do much for people who depend on wage income.”
Meanwhile — whether necessary or not — the U.K.’s austerity policies undoubtedly worsened a decades-long trend of underinvestment in skills and research and development (Britain lags only Italy in the G7 on R&D spending). At British schools, there was a 9 percent real terms fall in per-pupil spending between 2009 and 2019, according to the Institute for Fiscal Studies’ Xu. “As countries get richer, usually you start spending more on education,” Xu noted.
Two senior ministers in the coalition government — David Gauke, who served in the Treasury throughout Osborne’s tenure, and ex-Lib Dem Business Secretary Vince Cable — have both accepted that the government might have focused more on higher taxation and less on cuts to public spending. But both also insisted the U.K had ultimately been correct to prioritize putting its public finances on a sounder footing.
It was February 2018 before Britain finally achieved Osborne’s goal of eliminating the deficit on its day-to-day budget.
Austerity was coming to an end, at last. But Osborne had already left the Treasury, 18 months earlier — swept away along with Cameron in the wake of a seismic national uprising.
***
David Cameron had won the 2015 election outright, despite — or perhaps because of — the stringent spending cuts his coalition government had overseen, more of which had been pledged in his 2015 manifesto. Also promised, of course, was a public vote on Britain’s EU membership.
The reasons for the leave vote that followed were many and complex — but few doubt that years of underinvestment in poorer parts of the U.K. were among them.
Regardless, the 2016 EU referendum triggered a period of political acrimony and turbulence not seen in Westminster for generations. With no pre-agreed model of what Brexit should actually entail, the U.K.’s future relationship with the EU became the subject of heated and protracted debate. After years of wrangling, Britain finally left the bloc at the end of January 2020, severing ties in a more profound way than many had envisaged.
While the twin crises of COVID and Ukraine have muddled the picture, most economists agree Brexit has already had a significant impact on the U.K. economy. The size of Britain’s trade flows relative to GDP has fallen further than other G7 countries, business investment growth trails the likes of Japan, South Korea and Italy, and the OBR has stuck by its March 2020 prediction that Brexit would reduce productivity and U.K. GDP by 4 percent.
Perhaps more significantly, Brexit has ushered in a period of political instability. As prime ministers come and go (the U.K. is now on its fifth since 2016), economic programs get neglected, or overturned. Overseas investors look on with trepidation.
“The evidence that the referendum outcome, and the kind of uncertainty and change in policy that it created, have led to low investment and low growth in the U.K. is fairly compelling,” said professor Stephen Millard, deputy director at the National Institute of Economic and Social Research.
Beyond the instability, the broader impact of the vote to leave remains contentious.
Portes argued — as many Remain supporters also do — that much harm was done by the decision to leave the EU’s single market. “It’s the facts, not the uncertainty that in my view is responsible for most of the damage,” he said.
Brexit supporters dismiss such claims.
“It’s difficult statistically to find much significant effect of Brexit on anything,” said professor Patrick Minford, founder member of Economists for Brexit. “There’s so much else going on, so much volatility.”
Minford, an economist favored by ex-PM Truss, acknowledged that “Brexit is disruptive in the short run, so it’s perfectly possible that you would get some short-run disruption.” But he added: “It was a long-term policy decision.”
Where next?
Plenty of economists can rattle off possible solutions, although actually delivering them has thus far evaded Britain’s political class. “It’s increasing investment, having more of a focus on the long-term, it’s having economic strategies that you set out and actually commit to over time,” says the IFS’ Xu. “As far as possible, it’s creating more certainty over economic policy.”
But in seeking to bring stability after the brief but chaotic Truss era, new U.K. Chancellor Jeremy Hunt has signaled a fresh period of austerity is on the way to plug the latest hole in the nation’s finances. Leveling Up Secretary Michael Gove told Times Radio that while, ideally, you wouldn’t want to reduce long-term capital investments, he was sure some spending on big projects “will be cut.”
This could be bad news for many of the U.K.’s long-awaited infrastructure schemes such as the HS2 high-speed rail line, which has been in the works for almost 15 years and already faces a familiar mix of local resistance, vested interests, and a sclerotic planning system.
“We have a real problem in the sense that the only way to really durably raise productivity growth for this country is for investments to pick up,” said Springford, from the Centre for European Reform. “And the headwinds to that are quite significant.”
For dock workers at Liverpool’s Peel Port, the prospect of a fresh round of austerity amid a cost-of-living crisis is too much to bear. “Workers all over this country need to stand up for themselves and join a union,” insisted Delij.
For him, it’s all about priorities — and the arguments still echo back to the great crash of 15 years ago. “They bailed the bankers out in 2007,” he said, “and can’t bail hungry people out now.”
LONDON — She’s already been forced to resign as U.K. home secretary once this fall.
And now scandal-hit Suella Braverman — controversially restored to her role by new PM Rishi Sunak just last week — is clinging to her job for a second time over claims she broke the law by holding thousands of undocumented migrants in bleakly unsuitable conditions at a former military base in southeast England.
In a statement to the House of Commons Monday, the Tory hard-liner denied widespread reports that she personally prevented officials from mass-booking hotel rooms for hundreds of asylum seekers who could no longer be hosted at the overcrowded Manston processing facility in Kent. Experts said if proven this could amount to a breach of the ministerial code — a resigning matter.
“Like the majority of the British people I am very concerned about hotels, but I never blocked their usage,” Braverman insisted, as opposition MPs called for her to resign. “As a former attorney general, I know the importance of taking legal advice into account.”
The Manston site is currently holding about 4,000 people, more than three times its maximum capacity of 1,600. Many are being forced to stay far longer than the legally permitted 24 hours. Reports suggest hundreds are sleeping on bare floors, and that disease is rife.
David Neal, the U.K. government’s independent chief inspector of borders and immigration, told MPs last week he was left speechless by the “wretched conditions.” He revealed some migrants from Afghanistan had been held in a marquee for 32 days, though the facility is designed only to host people for a maximum 24 hours while they undergo checks before being transferred to detention centers or hotels.
The crisis has been triggered by a huge increase in the number of undocumented migrants attempting to cross the English Channel — numbering nearly 40,000 so far this year, according to Ministry of Defense figures. On Sunday alone some 468 people made the dangerous journey in eight boats, the MoD said.
Since leaving the EU, the U.K. has been asking for a bilateral deal with France and the wider EU bloc to return those crossing the Channel to the first country deemed safe they enter into. So far, none has been forthcoming.
“The system is broken,” Braverman admitted. “Illegal migration is out of control and too many people are more interested in playing political parlor games, covering up the truth, rather than solving the problem.”
She said the Home Office is currently negotiating extra accommodation for undocumented migrants with private providers and considering “all available options” to tackle overcrowding at processing centers in the U.K.
She also told MPs she was “appalled” to learn, on her first appointment as home secretary in September, that there were “over 35,000 migrants” staying in hotels around the U.K. at an “exorbitant cost” to the British taxpayer. She instigated an urgent review into alternative options, she said, but that the department has continued procuring hotel rooms in the meantime.
But earlier Monday, local Conservative MP Roger Gale described the overcrowding at the Manston facility as “wholly unacceptable” and suggested the situation may have been allowed to happen “deliberately.”
“I was told that the Home Office was finding it very difficult to secure hotel accommodation,” he said. “I now understand this was a policy issue, and that a decision was taken not to book additional hotel space.”
The accusations add to the pressure on the home secretary, whose return to the Cabinet last week was widely questioned given she had been forced to quit only six days earlier after being caught using her personal email account to share sensitive government documents.
A Home Office review published Monday found Braverman sent six Home Office documents to her personal email address between September 15 and October 16. One was then forwarded on to a backbench ally for his perusal — a clear breach of security rules.
Striking a defiant tone, Braverman admitted to having made mistakes but insisted the broader claims about her conduct were a conspiracy to keep her out of high office. She told MPs that some people would like to “get rid” of her, adding: “Let them try.”
A Braverman ally conceded the home secretary is “in great difficulty” but warned she had “deliberately put in an impossible position by those who would rather her not to hang around.”
“The pressure is not easing in any way, and I think it may be too much for her.”
The U.S. accused Moscow of “weaponizing food” in suspending its participation in agreement allowing grain shipments to leave Ukraine’s ports.
The U.N. and Turkey, which brokered the deal in the summer, said on Sunday that they were in talks to try to bring Russia back into the accord. Ankara said in a tweet that Turkish Defense Minister Hulusi Akar “has been meeting with his counterparts” over the situation.
U.N. Secretary-General António Guterres is engaged in “intense contacts” aimed at bringing Russia back to the deal, the organization said on Sunday, after the Kremlin on Saturday said it was halting the agreement for an “indefinite period,” citing an attack on a base in occupied Crimea that Russia blamed on Ukraine.
The grain export deal, designed to make sure Ukrainian agricultural products can reach international markets, is considered critical to global food security given Ukraine’s role as a major producer of foodstuffs.
“Any act by Russia to disrupt these critical grain exports is essentially a statement that people and families around the world should pay more for food or go hungry,” U.S. Secretary of State Antony Blinken said in a statement late Saturday. “In suspending this arrangement, Russia is again weaponizing food in the war it started.”
U.S. President Joe Biden called Russia’s move “purely outrageous.”
“It’s going to increase starvation,” Biden told reporters in Delaware on Saturday.
Russia’s ambassador to the U.S. blasted Washington on Sunday for its reaction to Moscow’s decision and reiterated unsubstantiated claims that U.K. operatives were involved in a drone attack on the Russian fleet at the Black Sea port of Sevastopol in Crimea on Saturday.
“Washington’s reaction to the terrorist attack on the port of Sevastopol is truly outrageous,” Ambassador Anatoly Antonov said on Telegram.
The U.S. and the EU called on Russian President Vladimir Putin to reverse the decision on the Black Sea grain deal.
“Russia’s decision to suspend participation in the Black Sea deal puts at risks the main export route of much needed grain and fertilizers to address the global food crisis caused by its war against Ukraine,” Josep Borrell, the EU’s top diplomat, said in a tweet.
The Joint Coordination Center — the body established by the U.N., Turkey, Russia and Ukraine to coordinate foodstuff exports from Ukrainian ports — said it is “discussing next steps” following Moscow’s decision to halt the Black Sea agreement. At least 10 vessels, both outbound and inbound, are waiting to enter the humanitarian corridor established by the JCC, the center said late Saturday.
Ukrainian President Volodymyr Zelenskyy said Moscow has been “deliberately aggravating” the food crisis since September. “This is an absolutely transparent intention of Russia to return the threat of large-scale famine to Africa and Asia,”he said.
“From September to today, 176 vessels have already accumulated in the grain corridor,” Zelenskyy said in his nightly address Saturday. Some ships have been waiting for more than three weeks, he said.
Zelenskyy called for a “strong international response” to the Kremlin’s move, specifying the U.N. and “in particular” the G20. “How can Russia be among the G20 if it is deliberately working for starvation on several continents? This is nonsense,” Zelenskyy said.
Poland called the Kremlin’s move “yet another proof that Moscow is not willing to uphold any international agreements.”
“Poland, together with its EU partners, stands ready to work further to help Ukraine and those in need to transport essential goods,” the Polish foreign ministry said in a tweet on Sunday.
Nahal Toosi contributed reporting from Washington.
