Game of Thrones

We’re probably part of a very small minority who doesn’t follow Game of Thrones. As such, we have no horse on the race for this week’s climax of this hugely successful prime time soap opera. We’re told by the initiated that the unexpected twists of plot are one of the main attractions. All we can say is that the plot as presented to the viewing public inevitably leads to one or more of the (surviving) leading characters to become the one, or more, who rules them all. Even if the last episode were to end with a truly surprising fade to black as was the case with The Sopranos, this could hardly now be characterized as a surprise ending, could it? In fact very few truly original plots have emerged in the 3,000 years since the Iliad was first recited. That is except for life itself.

When we’re presented with examples of creativity perceived to can only possibly be the work of genius such as this TV show, we cannot but recall an anecdote that features prominently in Luis Buñuel’s autobiography “My last sigh”. When he moved to Hollywood in 1930 on an MGM invitation to see how American films were made, Buñuel was a frequent dinner guest at Charles Chaplin’s house. Often times Chaplin would project a movie. On one such occasion, he projected “Dishonored” directed by Stenberg and starring Marlene Dietrich playing the famous spy Mata-Hari. Everybody in the audience thought the movie to be ground breaking because the star dies in the final scene, except for Buñuel who believed the end was quite predictable five minutes into the film. This provocation led to a heated argument with Chaplin and the film’s producer. Buñuel eventually convinced them the argument could be easily settled by going back to his place. Thanks to plenty of free time, as his sole contractual obligation was to see how films were made, he had developed a Synoptic Table with his friend and housemate the Spanish writer Eduardo Ugarte. When they got back to his place in the wee hours, they woke up an irritated Ugarte. Buñuel set up the story as follows: it’s a movie, set in Vienna, the Great War, the movie starts with a scene where a prostitute solicits an army officer…Ugarte got up from his chair yawned and said: “Stop right there. She is shot by a firing squad in the final scene”.

The bigger Game of Thrones that is international diplomacy, is taking a turn that many of us would say is for the worse. Some will blame President Trump’s obsession with tariffs, some will blame China’s closed capital account and the government’s protection of its national champions and its forays abroad check book in hand securing the supply of indispensable commodities, others will blame Putin’s ever ascending assertiveness. In any case, tensions are rising. And not just between the US and China, the US is also taking a very different approach to the EU and NATO. The Trump Administration has broken with seven decades of US foreign policy tradition by raising doubts about America’s willingness to defend its traditional NATO Allies.

The EU finds itself assailed from all quarters and from within. Brexit remains unresolved and Theresa May is about to see her leadership questioned by Boris Johnson. And yet except for Macron’s bold further EU integration plans, there is no sense of urgency or purpose elsewhere. SWMBO is definitely in lame duck mode. The core countries’ domestic politics make a fiscal union unlikely, if not impossible. The Dutch have emerged as the new defenders of orthodoxy.

While Wall Street and other financial markets, especially Chinese equities, semiconductor manufacturers, and German automakers, trade up and down on trade dispute news the overall market soldiers on. The real pain is in agricultural commodities US soybeans are trading just above a five year low and US corn futures are below a long term average of $420 per futures contract. These modest declines in the prices of agricultural commodities, and a stronger dollar will not be a sufficient counterbalance to the new tariff’s inflationary impact. As financials markets tumbled late last year, the Fed was cowered into a more dovish stance. Going forward we should expect the prices of many goods to go up, as well as wages in firms that benefit from import substitution effects, this will drive up all wages. The bet then is that real wage increases will be the dominant political factor for Trump’s chances at re-election, if he turns out to be the head the Republican ticket. Add to this a 5% of GDP Federal Government deficit, and a Fed with a $4 trillion balance sheet, and there may be growing concern about inflation once again becoming an issue, but the calculus is that not for a while.

In any case, Matteo Salvini, the apparent leader of the right wing anti-EU EU populists, likes what he sees Trump do, and wants to import the deficit growth model to Italy and the euro zone. His alliance may see big gains in the upcoming elections to the EU Parliament on May 26, but is still far from dominating EU politics. The concern we have is that the real influence of the fringe parties is that their policies are adopted by the mainstream parties sooner or later. We were wrong a few weeks ago to presume that in the event that the UK had to hold EU Parliament elections the British would return a slightly modified version of Westminster to Strasbourg. They will be sending a new and improved Michael Farage and his fellow Brexit Party colleagues. We’re afraid there’s only one way to stop Farage on his tracks: free drinks at the EU Parliament’s bar.

Our EU leaders and Parliament will have to make a number of difficult choices in this upcoming legislature. Chief among them is what to do about the increasingly illiberal regimes of the Visograd countries, should these continue to receive EU structural funds while their governments defile the democratic values that underpin the European Project? Will the EU continue to confront Russia on the Ukraine? Will the EU continue to support a two state solution for the Israeli-Palestinian Peace Process when it’s becoming pretty obvious that a One State solution has been negotiated and agreed by the US and Israel and Jordan, Saudi Arabia, and Egypt? Will the EU continue to support the Iranian Nuclear deal?

What’s the upside? And why don’t European politicians need to defend such decisions? Undoubtedly, most of the tension with the Trump administration surely derives from the differences held on these two key policies. Therefore it would be interesting to know what does the EU gain in these bargains. There are of course ethical issues to consider, but let’s not forget that when SWMBO was at her zenith in popularity and global influence, she made the most honourable decision of her political career, and as a result, she is looking at early retirement. Of course Germany had a moral obligation to abide by her commitment to the 1951 UN Refugee Convention. Yet if granting temporary asylum to 600,000 Syrian refugees results in the collapse of the CDU-CSU-SPD coalition and the radicalization of politics in the country as populist from the left and the right seize the day, well perhaps this altruism if too high a price to pay, not just for Germany but for the whole EU. It’s not a good idea to be on the right side of history if this leads ultimately to the defeat of open societies.

Closer to home, if there is no workable fiscal union what will be the mechanism for a two speed euro zone? Will Germany and the core leave the euro for a super euro, which is the least painful solution, or shall there be more (largely self-inflicted) pain and suffering in the counter-reformation countries? When Valérie Giscard d’Estaing was chosen to lead the draft of an EU constitution there was a tremendous controversy over whether there should be mention to the common “Christian Roots”. This identity issue is still unresolved even though the Charlemagne Prize is the highest recognition for work done in the service of European unification, not for naught the Carolingian King of the Franks and the Lombards was anointed Holy Roman Emperor in 800 AD. It would be ironic that this corner of Asia which has been a house divided for centuries by differences in the interpretation of the message of Jesus Christ and the structure of his Church should not recognize the Christian roots of its culture.

But those are questions well above the pay grade and intellectual capabilities of most contemporary politicians. The more mundane questions of who are going to be the new Presidents of the European Commission, the European Council, and the European Central Bank will soon be resolved. This is an all too real Game of Thrones, and as it is so often the case the people seem to be far less concerned with these real and close to home issues than with the struggles of fictional characters in a dungeons and dragons fantasy. Sic Transit Gloria Mundi.