#Historian Predicts How Russia's War in Ukraine Will End

[mariacallous]

It has been 80 years since the Bretton Woods Conference, when the U.S. dollar became the central pillar of the world economy and of U.S. economic statecraft. And for eight decades, we’ve also witnessed predictions about the dollar’s coming demise. But almost from the beginning, the debate about the future of the dollar has missed the mark. The question isn’t about whether an event or a crisis or a new technology will knock the dollar off its pedestal. Rather, it is about how the United States’ competitors, and even partners, are pushing the boundaries of the financial system in a global economy where the dollar still dominates but the post-Cold War consensus is breaking down.

For decades, any number of events reportedly portended the end of the dollar. When U.S. President Richard Nixon delinked the dollar from gold in 1971, a prominent British journalist declared it the “moment of the formal dethronement of the Almighty Dollar.” Some saw the euro’s introduction in the 1990s as the moment for the dollar’s demise. The global financial crisis and the rise of China in the 2010s led many economists to predict that the yuan could become the world’s reserve currency. Finally, Russia’s full-scale invasion of Ukraine in 2022 and Western-led sanctions against Moscow raised questions about a coming “post-dollar world.”

There are real geoeconomic headwinds to the dollar. Countries are working to become less reliant on the dollar for trade and to distance themselves from U.S. payment systems. But the future isn’t a binary between dollar dominance and so-called de-dollarization. The U.S. economy remains the world’s largest, with the deepest capital markets and most trusted financial institutions. The dollar remains a financial safe haven and the most reliable medium of exchange and store of value, not just for the United States but globally. The networks and history that earned the dollar its position eight decades ago are holding, and the growing frustration with the dominance of the dollar obfuscates some of the conveniences as well. What has changed is that the United States’ competitors—and some partners—are pushing the limits of their financial autonomy within the dollar-based system, emboldened by technological advances and geoeconomic revisionism. But we are far from an inflection point where we see any concerted effort to actually change it.

If the dollar’s position were to change, it would come from evolution, not revolution. More countries will test and deploy measures to limit the dollar’s reach. Emerging financial technologies will catalyze new theories of change and a range of multilateral financial arrangements. Meanwhile, Western policymakers and business leaders will have to protect the dollar’s historic position even as the U.S. economy takes on larger amounts of debt in a less stable world. But the dollar will continue to underpin the global economy for the foreseeable future.

There has never been a currency quite like the U.S. dollar. Historians analogize to the Spanish Empire’s pieces of eight, Dutch guilders, or the U.K. pound sterling, which was the leading reserve currency until the 1920s. But, as economist Michael Pettis points out, the dollar is “the only currency ever to have played such a pivotal role in international commerce.” The dollar accounts for 58 percent of foreign reserve holdings worldwide. It is involved in 88 percent of all foreign exchange transactions. Due to its international footprint, other countries’ trade imbalances are offset by imbalances in the United States.

The dollar provides stability and safety to countries and consumers globally, not just to the United States. It is a trusted asset because of the United States’ open markets, rule of law, trusted institutions, and deep, liquid capital markets. Beyond the United States, there is a limited supply of investment-grade assets. But the dollar isn’t without its discontents. In the last few years, a growing number of world leaders have publicly stated that they intend to knock the dollar off its pedestal. They see a divided world, the rise of financial technologies that increase the efficiency of trading with currencies other than the dollar, and a divided United States with an uncertain fiscal position and an ever-increasing list of countries and entities with which it is in economic confrontation—and they are publicly positioning themselves to take advantage.

In a world with more conflict and competition, talk of de-dollarization will continue. Were the U.S. dollar not central to the global economy, adversaries could better evade sanctions, and there could be more potent alternative economic blocs. That’s why, during a speech in Shanghai last year, Brazilian President Luiz Inácio Lula da Silva stated dramatically, “Every night I ask myself why all countries have to base their trade on the dollar.” Warning of the dangers of U.S. “institutional hegemony,” China’s Ministry of Foreign Affairs released an essay in February 2023 arguing that through the dollar, Washington “coerces other countries into serving America’s political and economic strategy.” Going further, the ministry stated that the “hegemony of [the] U.S. dollar is the main source of instability and uncertainty in the world economy.”

The timing of such pronouncements—roughly one year after Russia’s full-scale invasion of Ukraine and the subsequent imposition of sanctions—belies the true motivations behind them. The nearly eight decades of dollar dominance have witnessed some of the greatest peace and prosperity in history, including the rise of countries such as China. The dollar was not imposed on the world in 1944; it emerged out of postwar circumstances and a remarkable degree of international consensus, when 44 countries, including China and Brazil, assembled in Bretton Woods to determine the post-World War II financial order. What’s driving instability today is not the dollar but war in Europe and the Middle East, as well as tensions in the Indo-Pacific. These geopolitical challenges are connected, including through the deepening support that China provides to Russia. As Moscow has used that economic lifetime to sustain its assault on Ukraine, the war has changed how money moves around the world. Within weeks of Russia’s invasion, a U.S.-led coalition of 37 allies and partners, representing more than 60 percent of the world economy, imposed sanctions and export controls on Moscow. By April 2022, the value of Russian imports had fallen to around 43 percent below the prewar median. The results have been more severe than the Kremlin lets on, and ordinary Russians are feeling the pain the regime has caused. But a pivot to Asia saved Moscow, as Russia found new markets and means to put its economy on a war footing. The country now spends 6 percent of its GDP on its military.

What has changed isn’t only where the money has come from but what that money looks like. We see this in the former Soviet republics in Central Asia and the Caucasus, which purchase Western technology in dollars and sell it to Russia for rubles. We see it with Russia’s trade with China—in the first nine months after its full-scale invasion of Ukraine, Russia’s ruble-yuan trade jumped more than 40 percent. Meanwhile, China’s two-way trade with Russia hit a record high of $240 billion in 2023, up 26.3 percent in just one year. The yuan recently displaced the dollar as the most traded currency in Russia, accounting for nearly 42 percent of all foreign currency traded on the Moscow Exchange. As a result, the war and Moscow’s evasion of U.S. payment systems have led the largest country and second-largest economy in the world to trade mostly in currencies other than the dollar.

Internationalization of a currency other than the dollar is still a long way off, however. The continued dominance of the U.S. dollar is a vote of confidence from millions of market participants ranging from governments to corporations to households. It would take not just bilateral changes but new and trusted institutions and multilateral alignments based on the rule of law, transparency, and accountability to create any plausible alternative. While the Chinese-led Cross-Border Interbank Payment System (CIPS) is one such attempt, and it handles a reported 25,900 a day, that total falls significantly short of the U.S. Clearing House Interbank Payments System, which does approximately 500,000 daily transactions totaling $1.8 trillion in value. And of the CIPS transactions, 80 percent rely on SWIFT, a system based in Belgium, not Beijing. The trust the dollar has earned in the last eight decades sets it apart.

The two most significant problems for those advocating wholesale de-dollarization are that it is impossible to replace something with nothing and the United States’ competitors do not currently have the capability or will to replace the dollar, even if their rhetoric at times suggests otherwise. That doesn’t mean the dollar’s position should be taken for granted. Innovation and geoeconomic fragmentation may chip away at its reach. The most important emerging trends are new technological models, sector-specific arrangements, and bilateral and multilateral alignments. These efforts are marginal, but they may provide meaningful alternatives in the future.

The United States has financial technologies that are as developed as most leading markets, but it lags a small number of countries in consumer adoption of certain financial technologies. These comparisons run the gamut. In 2021, El Salvador became the first country to make cryptocurrency legal tender. More importantly, the Atlantic Council tracks the proliferation of central bank digital currencies, or CBDCs, and reports that 134 countries and currencies unions, representing 98 percent of the world’s GDP, are exploring use cases for CBDCs, up from just 35 in 2020. Pilot projects are underway in 11 of the G-20 member states, though only three countries have fully launched a CBDC. In a more divided world, there are more CBDCs—since February 2022, according to the Atlantic Council, “wholesale CBDC developments have doubled.”

When U.S. consumers mass adopted financial technologies such as credit credits in the 1970s and ’80s, China’s economy was in relative shambles, and it was still recovering from the Cultural Revolution. Its GDP was just $154 billion in 1976. Today, however, China is the second-largest economy in the world, and its digital yuan, or e-CNY, has drawn the focus of many experts who talk about technology-led efforts toward “de-dollarization.” The e-CNY could provide greater efficiencies and financial inclusion to unbanked Chinese citizens, but in many ways, there are few differences between it and digital and mobile payment systems in the West.

Nevertheless, China is making efforts to internationalize the e-CNY as a dollar alternative, and the Chinese government made that intention clear with its choice of venue for the digital currency’s debut: the 2022 Beijing Olympics. During the games, visitors to the capital city, still under strict COVID-19 restrictions, went through customs and were immediately able to exchange currency for e-CNY. Rather than increasing trust abroad, however, this not only raised concerns about Beijing’s leadership in financial technology; it also set off alarms about how that technology could be used to increase the Chinese Communist Party’s control over Chinese society and potentially create new forms of geoeconomic leverage that China could use over the rest of the world.

The fact that it has not had any significant uptake in other countries indicates that the e-CNY is not a trusted alternative abroad, and it is still in the pilot stages, even at home, where it reaches 260 million wallets in just 25 Chinese cities out of a population of more than 1.4 billion. But the push to internationalize China’s digital currency is ongoing. Project mBridge—a cross-border CBDC program involving mainland China, Hong Kong, Thailand, and the United Arab Emirates, as well as 25 observer nations—is one such effort. There is international interest in more efficient, low-cost alternatives to payment rails that rely on the dollar, even if the Chinese government were not already taking steps to increase trust in the e-CNY in much of the world.

However, China is finding new avenues for limited de-dollarization with its closest partners. China is now the top trading partner of more than 120 countries, particularly in East Asia, sub-Saharan Africa, and emerging, resource-rich markets. With a greater global economic footprint, China is working to shift the balance of payments away from the dollar, and as much as 23 percent of China’s total goods trade is now in yuan.

We see that trend most clearly in the oil trade. Oil is priced in dollars, and the trade volume in the global oil derivatives market—approximately 23 times the size of average daily physical crude flows—is fully denominated in dollars. But Beijing is working to reduce the dollar’s role in its own trade and in the global economy. China is a large, but resource-poor, country that relies on energy imports, mostly from the Middle East. As of last year, China imported around 1.8 million barrels of oil from Saudi Arabia a day. In an effort to insulate that trade from the dollar, Riyadh and Beijing have signed a $7 billion currency swap agreement. And with around 14 percent of daily global crude oil volume flows coming from sanctioned states, the incentives to de-dollarize in this sector are clear.

Here, however, the reach of those who seek to de-dollarize the oil markets may have exceeded their grasp, as shown by trade patterns between India and Russia. Following the imposition of Western-led sanctions on Russia, India became a top destination for Russian seaborne crude oil, hitting 2.15 million barrels a day in May 2023. But New Delhi insisted on the use of Indian rupees for conversion and settlement. That position, coupled with sanctions and embargoes on Moscow, has since caused friction. Despite the initial uptick, oil trade between Russia and India recently hit a 12-month low.

Moves to “sanctions-proof” whole economies take many other forms. For years, Moscow has been steadily decreasing its dollar holdings, with its stockpile of U.S. Treasurys declining from $102.2 billion in December 2017 to a mere $14.9 billion six months later. Similarly, in 2023, China decreased its own holdings of U.S. Treasurys and upped its gold purchases by 30 percent. These trends aren’t limited to U.S. adversaries and competitors—as Goldman Sachs Research has noted, India, which had been the subject of U.S. sanctions over its nuclear program until the George W. Bush administration, has also upped its own gold holdings, though gold remains a small percentage of its reserve holdings globally.

Gold provides a degree of diversification and insulation from sanctions, but it’s not an alternative for the dollar. The real returns are much less predictable, gold comes with significant carrying and storage costs, and gold’s functionality as a medium of exchange for trade settlement is low. Meanwhile, physical gold supply is limited, with gold futures backed by around just $40 billion worth of the precious metal. That number climbs higher with the inclusion of exchange-traded funds, which create opportunities for diversification and investments in many assets, but it still is far short of international currency markets.

Technology could change the uses and role of gold in the global financial system as well. Historically, gold has often proved a better store of value than fiat currency. But it lacks the same functionality, not to mention greater storage and movement costs. The digitization of physical gold in the existing vaulting system, however, can afford it greater efficiency functionality of settlement.

Whatever technological progress, true de-dollarization would take a compelling alternative backed by multilateral consensus. China-led groupings such as the Shanghai Cooperation Organisation, the Belt and Road Initiative, and BRICS (now BRICS+) are, in their own ways, attempting to create such a forum. That’s why Brazil’s president called on the BRICS countries to create a common currency at last year’s summit in South Africa, arguing to his fellow leaders that such a medium of exchange “increases our payment options and reduces our vulnerabilities.”

Even this widely publicized effort has pitfalls. The original BRICS countries are home to 42 percent of the world’s population and, according to the International Monetary Fund, a third of the world’s economic output. But economic, ideological, and geopolitical differences make any united policy outcomes exceedingly unlikely. Even members dismiss the notion of BRICS-led de-dollarization, with Indian Foreign Minister S. Jaishankar stating last July, “There is no idea of a BRICS currency.”

The data underscores Jaishankar’s sentiments. According to the Bank for International Settlements, the U.S. dollar is the backbone of the BRICS trade. In 2022, it was involved in 97 percent of all foreign exchange transactions involving the Indian rupee, 95 percent of all such transactions involving the Brazilian real, and 84 percent of all such transactions involving the yuan.

While efforts to move away from the dollar have, in some sectors, gained traction, the rhetoric around de-dollarization is, in many ways, more about performative politics than serious policy. To make the yuan more attractive, Beijing could loosen its capital controls or move away from a surveillance state model, but it shows little signs of doing do. The European Union could boost the euro if it were to create the kinds of capital markets that drive the U.S. financial system, but it hasn’t. These moves would be beneficial to Chinese citizens and Europeans alike. But for now, the dollar remains the most trusted, and in many ways most efficient, currency for not only the United States but most of the world. And while BRICS may have the desire to build a new international financial system, the global economy that has allowed the emerging markets to emerge over the last 25 years was built on the dollar.

The United States’ rivals may not succeed in pulling the world away from the dollar, but Washington should be careful not to push the rest of the world out of its orbit either. The use of the dollar for sanctions can be a valuable tool of economic statecraft, and sanctions have been deployed by Western governments since 432 B.C., when Athens put an embargo on the nearby town of Megara in the lead-up to the Peloponnesian War. When they are overused or abused, however, they erode trust and leave the rest of the world seeking to protect itself from a weaponized global economy.

The debate about the use of sanctions has gotten more urgent and taken new forms in the last two years. Soon after Russia’s invasion of Ukraine, the United States and its allies froze around $300 billion worth of sovereign Russian assets in the West. That included a substantial portion of Russia’s gold and foreign currency reserves, denominated in euros, dollars, British pounds, Japanese yen, and other currencies. While the global economy adapted to these sanctions for two years, we recently entered a new chapter in financial history.

Before this year, the United States had never seized the foreign assets of a country with which it was not at war. However, on April 24, President Joe Biden signed the Rebuilding Economic Prosperity and Opportunity (REPO) for Ukrainians Act, establishing a means to do just that and seize Russian assets to support Ukraine.

The case for REPO was clear and compelling, at least to Washington and most of its partners. With each passing day, the cost to rebuild Ukraine grows: The World Economic Forum puts the figure at around $486 billion. Repurposing Russian assets is a politically elegant solution that has the benefit of imposing no direct costs to U.S. or EU taxpayers. But like most policies, it involves trade-offs, and it was the subject of considerable debate at the recent G-7 finance ministers meeting in May.

What might this policy change lead to? The American Enterprise Institute’s Michael Strain observed that critics argue that the seizure of Russian assets could make other countries worry that their own assets might one day be seized. Given that risk, they’d take preventative steps to distance themselves from Western economies, making them less willing to hold dollars or euros or even invest in the West. Strain finds these risks to be “legitimate, but ultimately unpersuasive” when it comes to REPO, but they should not be dismissed, including when working with allies whose involvement would be required to make such measures effective.

These conversations show how the actual or perceived overuse of economic coercion will likely only increase other countries’ desires to find alternatives to the U.S. dollar. Sanctions are most effective when they are targeted, multilateral, and set out to achieve specific objectives. Used prudently, they enhance the United States’ economic position, but when they are abused, they leave the country weaker.

The dollar’s demise has been overpredicted for decades. Those who think the dollar will reign supreme forever, though, should take a lesson in humility from Charles Krauthammer. In January 1990, with the United States at the height of its power at the end of the Cold War, he wrote that the “most striking feature of the post-Cold War world is its unipolarity. No doubt, multipolarity will come in time.” The dollar’s unipolar moment isn’t over. But the world could change.

When the dollar emerged as the consensus of the post-World War II world, the U.S. economy accounted for perhaps half of global GDP. Since then, China became the world’s second-largest economy. Beijing is challenging the U.S.-led order. Emerging markets have developed and are seeking greater autonomy. New currencies and technologies have come online. Meanwhile, Washington doesn’t always safeguard the privilege that the dollar bestows. Unnecessary tariffs can diminish the United States’ role and reach in the global economy. Fiscal brinksmanship, combined with repeated confrontations over the debt limit and even the threat of default, erode confidence; the U.S. national debt is approaching $35 trillion, and budget deficits are expanding at record rates, even during peacetime.

If the dollar’s detractors truly seek an alternative, however, they would be forced to adopt radically different policies. The economic troubles that China is experiencing today appear to be more structural than cyclical. Beijing’s closed capital account restricts the amount of yuan available to transact, and last year, China reported its first-ever quarterly deficit in foreign direct investment. While many of China’s trading partners share the desire to move away from the dollar, Goldman Sachs Research has noted that even they have limits on how much yuan they can accumulate, as their own currencies are often pegged to the dollar. When it comes to the United States’ allies, even the EU has not taken steps to create deep, liquid capital markets that could increase the euro’s appeal as an alternative.

The move toward de-dollarization remains marginal but meaningful and moving. For the dollar to lose its place, it would take a series of policy failures in Washington and for the dollar’s detractors to create alternatives that have appeal not only in authoritarian, state-led economies but globally. The global financial system is changing, and nothing is certain. But it would still be wrong to bet against the dollar.

[xtruss]

Emmanuel Macron Might Be A Clown, But He’s A “Dangerous Clown” — Timofey Bordachev

French Elites are Traumatized by the Decline of Their Country, and Their Leader is Throwing His Toys Out of the Pram

— By Timofey Bordachev, Programme Director of the Valdai Club | RT | 22 March, 2024

French Clown 🤡 President Emmanuel Macron waits to greet Lithuania's president prior to their meeting at the Elysee Palace in Paris on March 12, 2024. © Christian Liewig — Corbis/Corbis Via Getty Images

France’s position on the world stage today is in a rather strange state of affairs: a country with a solid nuclear arsenal but which has lost all ability to influence its environment. Over the last few decades, Paris has lost what remains of its former greatness on the world stage, ceded its leading position within the European Union to Germany, and completely abandoned the principles needed for its internal development. In other words, the protracted crisis of the Fifth Republic has reached a stage where the lack of solutions to the many problems that have long been overdue is turning into a full-blown identity crisis.

The reasons for this situation are clear, but the outcome is difficult to predict. And the clownish behaviour of President Emmanuel Macron is only a consequence of the general deadlock in French politics, as is the very appearance of this figure at the head of the state, which used to be led by grandees of world politics such as Charles de Gaulle or François Mitterrand.

The last time Paris demonstrated an ability to act on its own in a really important decision was in 2002-2003. At the time, it opposed US plans to illegally invade Iraq. French diplomacy, then led by the aristocrat Dominique de Villepin, was able to form a coalition with Germany and Russia and deprive the American attack of any international legitimacy. The US attempt to unite in its person dominant power capabilities and decisive influence on the right to use them in world politics, i.e. to establish a unipolar world order, failed. This was denied them at the energetic instigation of France, and such an important step in the creation of a democratic world order will be credited to Paris by future historians.

But that was the end of it. The moral victory in the UN Security Council in February-March 2003 played the same role in France’s destiny as the bloody victory in the First World War, after which the country could no longer remain one of the world’s great powers. Not only the harsh external circumstances, but also the rapid plunge into internal problems, which have not been resolved for almost 20 years, contributed to further decline. Successive presidents were initially unable to adapt the country to the challenges, the causes of which were largely beyond their reach. This was all the more the case as the mid-2000s saw a generational change in politics, with people coming to power who had neither the experience of the Cold War nor the “training” of the generation of leaders who founded modern France.

Western troops in Ukraine: How a big lie could lead to the biggest war

Macron’s latest sallies and the spat they’ve caused show that Western Europe must finally be honest about the causes of the Ukraine conflict. By Tarik Cyril Amar, a historian from Germany working at Koç University, Istanbul, on Russia, Ukraine, and Eastern Europe, the history of World War II, the cultural Cold War, and the politics of memory

The “perfect storm” was a combination of several factors. First, society was changing faster than anywhere else in Europe, and the political system of the Fifth Republic was becoming obsolete. Second, there was a loss of control over the basic parameters of economic policy, which were increasingly determined by the country’s participation in the Common Market and, more importantly, the eurozone. Thirdly, the fading of the dream of political union within the EU led to the re-emergence of Germany, a country that lacked the full sovereignty to undertake such a major project on its own. Finally, the world was changing rapidly. It was no longer centred on Europe, which meant that there was no place for France in the list of great powers.

The attention-seeking of the man who is now formally at the head of the French state are only personal symptoms of the crisis in which the country finds itself. As a result, everything is out of the hands of the current government, and the sheer number of built-in issues is turning anger into meaningless hysteria. Petty intrigues not only accompany big politics, which is always the case, but replace it. The principle of “not to be, but to seem to be” becomes the main driver of state action. France can no longer find a way out of the systemic crisis in the most historically familiar way - revolutionary.

Indeed, France is a country that has never been characterised by internal stability. Since the Great French Revolution of 1789, accumulated internal tensions have traditionally found an outlet in revolutionary events, accompanied by bloodshed and major adjustments to the political system. France’s great achievements in political philosophy and literature are a product of this constant revolutionary tension – creative thought works best in moments of crisis, anticipating or overcoming them. It is precisely because of its revolutionary nature that France has been able to produce ideas that have been applied on a global scale, raising its presence in world politics far above what it would otherwise deserve. These ideas include the construction of European integration on the model of the French school of government, the oligarchic conspiracy of the richest and most armed powers known as the G7, and many others.

In the 20th century, two world wars became an outlet for the revolutionary energy of the people – France was on the winning side of one and lost the second badly, but miraculously found itself among the subsequent winners. Then came the collapse of the empire, but the losses it caused were partly compensated for by the neo-colonial methods applied by the whole of Western Europe to its former overseas possessions. In Europe itself, France has until recently played a leading role in determining major issues such as foreign trade policy and technical assistance programmes. The main reason for the end of France’s era of revolutionary choices were the institutions of the collective West – NATO and European integration – that it helped create. Gradually, but consistently, they reduced the scope for independent decision-making by the French political elite. At the same time, these restrictions were not simply imposed from outside; they were the product of the solutions that Paris itself found to maintain its influence in world politics and economics, to benefit from the strengthening of Germany’s economy and status and to exploit, together with Berlin, the poor European east and south.

But not everything was under control from the start. The foreign policy upheavals of the first half of the last century spared the country new revolutions, but they left it morally exhausted and humiliatingly dependent on the United States, which the French have traditionally despised. Even now, unlike other Western Europeans, they are uncomfortable with American hegemony. And this only adds to the drama of the situation in Paris, which can neither resist nor fully accept US oppression. The period of Macron’s presidency saw the cruellest lesson taught to the French by their overseas partners: in September 2021, the Australian government rejected a prospective order for a series of submarines from Paris in favour of a new alliance with the US and Britain.

Macron leads the way to Western civilization’s suicide France was unable to make any foreign policy countermove. French President Emmanuel Macron at a ceremony to seal the right to abortion in the French constitution. © Gonzalo Fuentes/Pool/AFP

The era of comparative calm and dynamism of the 1950s provided the material basis for the colossal system of social guarantees that most outside observers associate with modern France. A stable pension system, a huge public sector and the obligations of employers to their workers are the foundations of the welfare state that was created. Since human memories are short and contemporaries tend to absolutise their impressions, this is how we perceive France – well-fed and well-maintained.

The stability and prosperity of the majority of the population are attributes of a relatively short period of French history – no more than 40 years of good times (1960s-1990s), during which the political system of the Fifth Republic was created and flourished. Irreversible processes in the economy began with the global crisis of the late 2000s and gradually led to problems common in the West, such as the erosion of the middle class and the shrinking capacity of the state to maintain a system of social obligations. In the mid-2010s, France became the European champion in terms of the total debt of the economy, reaching 280% of GDP, and the public debt is now 110% of GDP. The main reason for these statistics is the huge social spending, which leads to chronic budget deficits.

The inability to solve these problems, combined with the destruction of the traditional structure of society, has led to the crisis of the party system. The traditional parties - the Socialists and the Republicans - are now close to, or have already crossed, the threshold of organisational collapse. In the new economy – with the contraction of industry, the growth of the financial and service sectors, and the individualisation of citizens’ participation in economic life – the social base of forces based on coherent political programmes is shrinking. A result of this process was the electoral victory of Emmanuel Macron, the then little-known candidate of the “Forward!” movement, in May 2017. Since then, his party has been renamed twice: “Forward, Republic!” in 2017 and “Renaissance” from 5 May 2022. Macron himself was re-elected president in 2022, again beating the right-wing candidate Marine Le Pen. Who is herself an outsider to the traditional system.

During Macron’s time in the Elysee Palace, the seat of the head of state since 1848, there has been two types of news coming out of France to the outside world. Firstly, reports of mass demonstrations, resulting in no change. Second, loud statements on foreign policy that have never been followed by equally decisive action.

A year after Macron came to power, the country was rocked by the so-called “yellow vests” - citizens angered by plans to raise the price of diesel fuel and then by all government initiatives in the social sphere.

In particular, proposals to raise the retirement age from 62 to 64. At the beginning of 2023, the government returned to this issue and new mass demonstrations swept the country. In the summer of that year, the suburbs of major cities, largely populated by the descendants of Arabs and Africans from former colonies, went up in flames. The majority of the rioters were second and third generation immigrants, demonstrating the total failure of policies to integrate them into French society. In all cases, the official representatives of the workers – the trade unions and the Socialist Party – were unable to play a significant role in controlling the protests or negotiating with the authorities. As a result, the government raised the retirement age by two years, Macron’s biggest achievement so far in the area of social security reform. Between the two rounds of unrest came the coronavirus pandemic, which gave the authorities a couple of years of relative calm almost everywhere. The main result of French domestic politics in recent years has been the absence of both meaningful results from protest activity and serious reforms, which by all accounts the country desperately needs. Apathy is becoming the main feature of public life in France.

An active foreign policy could partially compensate for internal stagnation. But it requires money and at least relative independence. France currently has neither. This is probably why the amount of direct aid that Paris has given to the Kiev regime remains the lowest of any developed Western country – €3 billion, or ten times less than Germany, for example. Incidentally, it is precisely this inability to invest more seriously in the Ukrainian conflict that many associate with Macron’s emotional rhetoric towards both Russia and his supposed allies in Berlin.

Paris more than makes up for its lack of money with loud statements. In 2019, Macron drew global attention by saying NATO had suffered “brain death”. This, of course, stirred emotions among Russian and Chinese observers, but did not lead to any practical action. We simply did not know the new French president well at the time, for whom the connection between words and their consequences not only does not exist, but does not even seem necessary in principle.

It was amusing enough to see French diplomats and experts calling on Russia to limit its public and private presence in Africa between 2020 and 2021. Macron himself has consistently reduced France’s commitments on the continent throughout his time in the Elysee Palace. In the summer of 2023, Niger’s new military government responded calmly to Paris’ calls for African countries to overthrow it. Unable to influence the situation in the country, France closed its embassy on 2 January 2024, finally acknowledging the failure of its policy in the region.

How Macron’s latest Ukraine comments blew NATO apart! How Macron’s latest Ukraine comments blew NATO apart! The French President’s suggestion that defeating Russia may require Western boots on the ground quickly backfired. French President Emmanuel Macron reviews troops. © Ludovic Mari/Pool Via AFP

However, to compensate for the de facto withdrawal from a region that has traditionally provided the French economy with cheap raw materials, Macron is looking for new and promising partnerships. Security agreements have recently been signed with official Kiev and Moldova, and there are ongoing talks with the authorities in Armenia. But none of this is producing practical results. Ukraine is firmly controlled by the Americans and their British cronies, Moldova is a poor country without natural resources, and Armenia is sandwiched between Turkey and Azerbaijan, states with which France does not have very good relations. In its current state, Paris generally looks like an ideal sparring partner for governments eager to show their independence. France is big enough for angry words against it to be widely circulated in the media, but too weak to punish excessive insolence. The only interlocutors who now look to Paris with respect are Chisinau and Yerevan, although a biased observer might doubt the latter’s sincerity.

Afterword

The author of these lines has deliberately chosen not to focus on the latest foreign policy brainwave of France and its president – a wide-ranging discussion of the possibility of direct military involvement by a NATO country in the Ukraine conflict. It is, of course, possible that such a high-profile statement was a “clever move” designed to revive discussions within the bloc about the limits of what is possible in the confrontation with Russia, a provocative cry for attention in the election campaign for the European Parliament, or simply a way of keeping the French elite busy. Nevertheless, there is nothing good about Paris’s behaviour: it shows that at a certain stage the game of slogans can reach areas where the risks become too high. And given that modern France is incapable of anything but words, it is frightening to think of the heights of rhetorical participation in global politics that its president is capable of reaching. Given that Paris has some 300 nuclear weapons of its own, even the minimal probability that Macron’s babble will take material form deserves the harshest and most immediate response.

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Historian Predicts How Russia's War in Ukraine Will End, Why Russian Nav...

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What would happen if a nuclear bomb was used in Ukraine? - Clare Roth

Atomic bombs dropped on Hiroshima and Nagasaki, and meltdowns at the Chernobyl and Fukushima power plants clearly affected people's health. But experts say it's hard to predict the fallout from a nuclear war today.

The Medical Consequences of a Nuclear War.

When we think about the war in Ukraine and the nuclear threat that it poses, we often think of two scenarios: an accident at a Ukrainian nuclear plant or the fallout from nuclear weapons.

In the first article of this series, we looked at accidents at Japan's Fukushima nuclear power plant in 2011, and at Ukraine's Chernobyl power plant in 1986, analzying the impact those accidents had on the surrounding populations. And we compared those accidents and to what might happen in the event of fallout from an accident at the Zaporizhzhia nuclear power plant, which has been central to the ongoing conflict in Ukraine.

In this second article, we will look into the short and long-term health effects that the bombings at Hiroshima and Nagasaki had on surrounding populations in 1945.

Experts use the study of those bombings at the end of World War II to understand what might happen if a nuclear weapon were detonated today.

Nuclear fallout depends on the type of weapon

Nuclear fallout is hard to predict because it is highly dependent on how and where a weapon is used.

Weapons that detonate at high altitudes produce different effects than weapons that detonate on or in the ground, said Dylan Spaulding, a senior scientist in the Global Security Program at the US-based Union of Concerned Scientists (UCS).

"In the latter case, that's when you have to worry about fallout, because you are basically radioactively activating Earth," said Spaulding. "Whereas an airburst doesn't necessarily have the same fallout worries."

Spaulding said that different weapons can be detonated for different strategic reasons.

The detonation of a weapon in the air can kill many people at once, with less of a long-term impact on radiation in the surrounding population and environment.

The detonation of a weapon near the surface of the Earth could both kill many people at once and taint the environment and food supply for years.

This can be illustrated by the US bombings of Nagasaki and Hiroshima at the end of WWII and the 1986 Chernobyl accident in Ukraine. The attacks killed between 60-80,000 people in Nagasaki and between 70-135,000 people in Hiroshima in the months that followed.

The bombings released about 40 times less radiation into the environment than the 1986 Chernobyl accident, but killed hundreds of thousands more people in the immediate aftermath.

Today, people can safely live in Nagasaki and Hiroshima without fear of lingering radiation, but the Chernobyl exclusion zone remains radioactive and uninhabitable.

Other effects of the 1945 bombings include an abnormally high increase in leukemia among people in surrounding areas, particularly among children. Other cancers increased, but in lower numbers.

Further long-term impacts of the radiation included increased instances of small head size, slower physical growth, and mental disability among children still in the womb when the explosions occurred some studies have suggested. This generally wasn't the case for children conceived after the bombings, as other research has shown.

Damaged food supply could kill billions

There are, however, attempts to simulate what nuclear fallout would look like after a contemporary bombing.

Alex Wellerstein, a historian of science and nuclear weapons at the Stevens Institute of Technology in New Jersey created a website called NUKEMAP to do just that. It compares the fallout from bombs detonated in the sky with those detonated on the ground.

Then, a study published in the journalNature Foodin August offered some projections of what would happen to the environment, population and global food supply if Russia and the US waged a weeklong nuclear war using strategic nuclear weapons.

The authors of the study estimated that there would be 360 million immediate fatalities from the use of the weapons themselves, and over five billion people would be left without food two years after such a nuclear war — that is around 60% of the world's population. The disruption to the food supply would be caused by massive amounts of soot emitted by fires ignited by explosions.

Researchers also attempted to model what destruction would look like in other scenarios. For example, a weeklong nuclear war in 2025 between India and Pakistan. The South Asian neighbors own far fewer nuclear weapons than the US and Russia, but the authors still predicted around 164 million fatalities and over 2.5 billion people without food for two years after such a war.

Alan Robock, a professor of environmental sciences at Rutgers University in the US, was one of the authors of the Nature study.

In earlier research, Robock estimated that the bombings at Hiroshima and Nagasaki had emitted around 0.5 teragrams of smoke. In the more recent study, he and others estimated that a US-Russia scenario would create around 150 teragrams of smoke and the India-Pakistan scenario would produce 16-47 teragrams of smoke.

Robock said the paper made predictions based on the impact of strategic weapons, "which simply means those that came from a long way away.”

"Any use of nuclear weapons can escalate into a full nuclear war between NATO and Russia, and would produce a nuclear winter," Robock told DW. "Almost all war games played with military officers result in this once nuclear weapons are used. There is not much chance that a nuclear war can be stopped once started.  Panic, fear, miscommunication, and bad information would result in commanders using the weapons they have."

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No Respect For Putin: How a Call For Cooperation with Russia Ended a Vice-Admiral’s Career

The row has consumed Berlin’s top brass and sparked a row with Kiev

— By Tarik Cyril Amar, a historian from Germany working at Koç University in Istanbul on Russia, Ukraine, and Eastern Europe, the history of World War II, the cultural Cold War, and the politics of memory.

Kay-Achim Schönbach © Bernd Wüstneck / picture alliance via Getty Images

The head of the German navy, Vice-Admiral Kay-Achim Schönbach, has resigned in the wake of a scandal in which he faced accusations of being too pro-Moscow. Speaking at the Manohar Parrikar Institute for Defence Studies and Analyses in New Delhi, India, Schönbach had argued that Russia, under its president Vladimir Putin, was fundamentally not interested in taking Ukrainian territory, but, rather, wanted respect from the West and, in particular, to be treated as equals.

In his view, the West should offer that respect, for three reasons: because it would be easy, because Russia and its leader deserve it, and because Europe needs Moscow as an ally against China. Schönbach also appealed in the name of religion, describing himself as a committed Roman Catholic and maintaining that Russia’s Christian identity points to the need for partnership between the country and other mostly Christian nations. As for Crimea, he was frank about his conviction that it would not return to Ukrainian control.

The talk was recorded and uploaded to YouTube, which may have been fatal for his career. If his statements had not been so readily available, perhaps they would have passed unnoticed.

Instead, they caused great consternation, both internationally and at home in Germany. Schönbach, being virtually certain he would be dismissed, acted first and handed in his resignation, which was immediately accepted.

Ukraine’s response was quick: the German ambassador in Kiev, Anka Feldhusen, was summoned for what was, in essence, a rebuke. The Ukrainian ambassador in Berlin, Andrij Melnyk, who, ironically, loves to lecture Germans in a tone sorely lacking in respect, barged in as well. In a classical illustration of what the Germans call “nachtreten” – roughly translatable as kicking someone already down – Melnyk could not let the opportunity pass to speak of “German arrogance and megalomania” in general.

With almost comical predictability, once on his high horse, Kiev’s anti-diplomat also delivered a shining example of Godwin’s Law – that is, the weird but common compulsion to bring Nazi references into everything.

For future historians, this will be an intriguing sequence of events: A very high-ranking German officer – in conjunction with a naval mission in what he calls the “Indo-Pacific” to demonstrate Western resolve against China – gives a talk at a top-notch Indian think tank. Because we live in the age of the World Wide Web, his statements are easily available in full, in essence, everywhere. Thus, they rapidly cause international trouble. An object lesson of the effects of globalization, the rise of India and China, and multipolarity.

Whatever you think of Schönbach’s statements, while it would be wrong to demonize him, it would be no better to present him as an icon of “free speech” suppressed. Of course, he has a right to his private opinions, but he made the serious mistake of mixing them up with his official function, speaking in full uniform and informing his Indian hosts that his talk would reflect both his personal point of view and that of his government.

He was right, therefore, to cut short the whole affair by resigning. He was, as an absolute minimum, very incautious, as he himself has publicly acknowledged with more honesty than many outgoing politicians have shown. And that is reason enough for stepping down, because every sailor, especially a high-ranking vice-admiral, must avoid giving the impression of interfering with the political leadership’s prerogative to determine and articulate policy, even – maybe especially – when that policy is less than persuasive.

In fact, the current case is evidence that the German system of military-political relations is working better than, for instance, the British or American ones, where through-and-through political statements and brute interventions by military top brass are quite common. When then-Labour leader Jeremy Corbyn seemed within reach of the prime minister’s office, for instance, a British Army general threatened to stage a mutiny if the Left ever came to power.

When consistently unstable former – and perhaps future – US President Donald Trump was on the ropes and more out of control than usual, the chair of the US Joint Chiefs of Staff, General Mark Milley, engaged in high-grade foreign policy by assuring China it would not be attacked by the US. That may well have been necessary and, in that desperate situation, the right thing to do. But celebrating such actions is still wrong. Because the fact that they are needed is evidence of a massive failure at the core of American power. At least with regard to the way in which he handled his own error of judgment, Schönbach deserves respect for doing better than most politicians and quite a few Western top brass as well.

And what about the substance of Schönbach’s remarks? They require the making of distinctions. His hunch that Russia and Putin want respect, even if a little monocausal, makes much sense, especially in view of the fact that both have repeatedly been shown disrespect.

And in international politics, as in life in general, respect is not a matter of mere decorum – not at all. On the contrary, struggling for recognition is what states do all the time, because it’s an elementary, indispensable resource. Think of it as the crucial point where ‘hard’ and ‘soft’ power meet. Or to put it very simply, the more respect a state is accorded, the less it has to fight for it.

Schönbach’s critics should also be fair enough to note that the vice-admiral was clear that, hedged with an irrelevant “probably,” Putin deserves respect as the leader of a major country. Or, put differently, whatever you think of him, his views, and his actions, his office as president of Russia in and of itself requires respect. And, again, that makes perfect sense too.

The head of the German navy was on much thinner ice when talking about China. That was, if you will, his real tragedy. More open-minded and sensible about Russia than some of the critics now piling on, Schönbach himself is still needlessly caught up in the misguided anti-Chinese rhetoric of the current batch of Cold War re-enactors. It’s an irony of history that what cost him his career is, in a way, Germany’s militarily irrelevant and politically mistaken participation in an American-dominated drive to confront China: If the German navy had not sent a token ship to do its share of strutting about off China’s coast, Schönbach would probably never have ended up in that fateful meeting in India.

Schönbach’s “religious-civilizational” argument also fails to convince. First of all, Putin is not, as the vice-admiral seems to think, an atheist. Secondly, and more importantly, Christianity is not a good criterion for alliance-building or for defining adversaries (and I write that as someone who shares with Schönbach at least a Roman Catholic upbringing). Even the case of India, where Schönbach gave his talk, already contradicts making it one. And there is no reason to confront China because of religion. As a matter of fact, if we take the Christian Gospels seriously, then reconciliation and peace among all humans must be the aim.

Last but not least, Ukraine. Again, Schönbach’s critics should remain fair. He did not, actually, question Kiev’s and the West’s policy of not officially recognizing Crimea as Russian. He only said that returning the peninsula to Ukraine’s de facto control has become a futile policy. You may agree or disagree, but there is no direct challenge to Berlin’s official line here – merely a politically indiscreet exertion of realism in the wrong place and at the wrong time.

Likewise, Ambassador Melnyk’s allusions to Nazism are entirely misplaced. In fact, they constitute a much worse scandal in and of themselves. Neither Schönbach nor Germany in general deserve this kind of trash talk from Ukraine – a country that, in reality, Berlin has massively supported. The German Foreign Ministry should have summoned the Ukrainian ambassador for this misconduct, and Kiev would do well to replace him. He comes across as self-advertising and offensive. Some Germans may pretend to like being crudely and unfairly lectured, but many certainly do not. Such ‘diplomats’ do a disservice to Ukraine’s own interests.

Yet what will be most interesting about the Schönbach affair for future historians is the obvious mismatch between what many in the West know to be a fact and the Western narratives that will be spun. It is the lack of realism in Western policy that Schönbach has really stumbled over. It is bizarre, for instance, that a simple statement about owing Russia and its leadership elementary respect can now be misconstrued as somehow undermining Western unity and resolve. If those things are so fragile and allergic to reality, the West has much more to worry about than the head of Germany’s navy.