Khalid Hussain –
The Germans and the French are joining hands with fresh vigour. German Chancellor Angela Merkel and French President Emmanuel Macron signed the treaty of Aachen in Germany on Tuesday. This treaty is a contract to renew the friendship and cooperation between their two countries.
The Treaty of Aachen ties in with the 1963 Elysee Treaty to seek even closer cooperation in economic, defense and European policy. We must depart from the shallow notions of electoral politics deciding strategy for nation states else we cannot understand what is happening in our world today. Elections do not decide strategy but merely tweak short term policy. This is especially true in stable democracies where smooth governmental transitions are a hallmark. This is because the Establishment in these societies makes sure the process of democracy stays unfettered. This so-called “Establishment” is comprised of stable segments in society that enjoy real power yet do not themselves compete in elections. Rather they are the ones who pull social strings behind the scenes by supporting those who do.
It is not in the shell of democracy that these societies have found stability. It is the guarantee of the process by the real powerful segments in these societies that make sure democracy survives. Hence it is the Establishment that sustains its cultural ethos and protects their economic interests.
This is really why the mere form of democracy and electoral politics fail to usher in stability in poorer countries of the so-called third world. Pakistan is an ideal example of this. We are so confused in Pakistan that one competing interest group in local electoral politics has been dubbed as “the Establishment”. It refers to our armed forces that are said to be in conflict with the civilian politicians who are vessels for international interests. However, the men in uniform are never the Establishment for the simple reason that the real Establishment is not limited by tenure whereas no position in the armed forces is free from it. Hence, we argue affairs in Pakistan are confused because society has no Establishment to safeguard its interests. This absence of local clout in our state plays into the hands of all foreign interests that enjoy political clout in our system. The countries that exercise real power in Pakistan include the United States of America, the United Kingdom, China and Saudi Arabia albeit the last one has lately been losing its grip on Pakistan’s internal politics.
Going back to Europe where Merkel and Macron are trying to join hands for their future, there are no two opinions the Treaty of Aachen has born out of Brexit. As the United Kingdom divorces the European Union, France and Germany are renewing their vows, according to the British and American media sources. Brexit is known to have a similar political mobilization across the Atlantic that made Donald Trump was elected the 45th President in America. The UK and USA have their own distinct and well-known Establishments. It is no secret either that the UK and USA have been close allies since World War II. Both are also allied to Canada, Australia and New Zealand and form the most stable international Establishment club that oversees many joint ventures including what is known as the “Five Eyes” in the clandestine world of modern day espionage.
The arbitrary nature of Brexit in the UK politics and the bizarre victory of Trump in the United States actually show the fault lines that separate Establishment groups from the EU, the UK, USA and indeed the Five Eyes. It is pertinent to recall Japan has renewed its alliance with the Five Eyes after Trump took over America. This is the world wherein the United Kingdom is unstoppably trudging along towards Brexit despite Prime Minister Angela May’s resounding defeat in the lower house of the British parliament. It appears that the English Establishment is hell bent in divorcing the European Union at all costs.
The illogical desire for a clean break from the EU although it is manifestly not good for their economy. This Establishment can thus be seen as potent enough to have its own way despite having lost the parliamentary votes. France and Germany are trying to safeguard against more countries leaving the EU. Their hurried pace, however, raises eye brows. Although there is nothing out of the ordinary in the desire of the Aachen Treaty to realize better, stronger and closer ties between the France and Germany, yet the very it’s very solemnity gives one pause to think about other reasons not in public debate and discussion.
The Establishment groups in Europe are at odds with the UK Establishment. Or that the UK and USA are in this together versus the EU. It is also not a secret that the EU is the only economic rival the US has. China is yet a long way away in displacing the US from its leadership position in commerce, industry and trade. This is besides the fact that America dominates the rest of the world including china when it comes to military might.
The UK and USA have been banding together against the EU. This has been evident since the Brexit referendum in the UK. Strangely, this animosity is not visible on the surface layers of diplomacy, politics or economics that obtain between these erstwhile Western allies. It is only through the anxious hugging together with instruments like the Aachen Treaty that we may discern a deep rooted anxiety motivating Merkel and Macron to sign.
To appreciate the real positions and motivations moving western Establishment groups versus each other, we need to begin by understanding that the aftermath of the Nixon shock is not sustainable for any of the Western players involved. America asserted its hegemony by removing the peg to gold for the US Dollar. Thus the Nixon shock was proof the multilateral system was dead. Yet, the Western Establishment groups never made their discord public. American paper money was accepted supreme because of tied trade in fossil fuels. The Western Establishment groups on all sides of the Atlantic continued working together in the American Empire using paper money.
The Europeans did react, however, and formed the European Union. Later in the 1990s, they also launched the Euro currency and the European Reserve Bank. From the paper money era of the US Empire that began in 1971 and through the era of digital money that dawned after the 1977-81 global debt crises, the world arrived in the age of fictional money with 9/11 in 2001. Finance became alchemy that generated debt bigger than anyone could ever service. Thus derivatives really got going in the market place to counter risk in the first decades of the 21st century. The European, British and Transatlantic western Establishment groups remained allied throughout the era of arbitrary warfare since 9/11 to realize grown for their own economies in fighting terrorism. However, distrust led to conflicts amongst these Establishment groups that resulted in the 2008 global banking crisis. The financial meltdown was the first time the rest of the world came to know the Western Establishment was no longer on the same page.
What has ensued since 2008 is stranger than fiction? We have seen war expand and sustain Western economies through NATO and the mighty US military-industrial alliance. In the background, Establishment groups started working towards a new global understanding. Calls for a New Bretton Woods were raised by many including British PM Tony Blair but they slowly died down as financial contagion was controlled. It was done with lots of help from the G20 which was akin to the rich inviting the less rich to join their club to keep the party going and they did.
As the financial crisis was controlled, Europeans started making noises on taxation and the need to do away with tax heavens.This, however, is not palatable for the United Kingdom that has been surviving on profits from the City of London running global tax heavens. Meanwhile, the free magic show of Quantitative Easing in the United States did allow European Bankers follow suite in conjuring money out of thin air. The media kept hidden conflicts within the Western Establishment. This was done by focusing on the rise of China. The impression given to the world being that America was eroding Chinese saving.
However, the resulting debt bubble are too big to sustain. They threaten to annihilate institutions involved when they burst. With America running a 21.8 trillion dollar debt and the EU fast going under with almost catastrophic bad debts in the Eurozone, it is natural that all are seeking a way out. Yet, none of the Establishment groups is willing to rock their hegemonic boats wherein the poor world continues to supply them everything they need in exchange for money that has no more value than fiction.
This is the crux of global politics that is kept hidden by the media. It keeps the fact of all of us living as colonies in the Global American Empire. The Europeans, British and Americans are, therefore, hardly able to talk about any of the real issues. This will make the poor countries bolt out of the global trading and commercial networks that continue to transfer resources from the poor to the rich in the west calling it trade and export. The poor countries have no political articulation in the global power arena.
The reality is simple. The Five Eyes form one group. Germany and France has proven themselves another. Both are desperately trying to keep other nations in the EU in their respective groups. The US and UK wish the EU to break down and nationalism to reign across Europe. Germany and France wish to keep the EU intact so that they can compete with the mighty Five Eyes.
Both have debt burdens that cannot be sustained. The elites that form the Establishment in rich countries have overplayed their hand. They have been taking all the gains for themselves and just covering their ears when the rest of the world tried to talk. Now they are desperately trying to find future survival as UK and USA leave them in the lurch. Neither of these Western Establishment groups wishes to forgo the debt that keeps the rest of the world in their shackles. And both these Establishment groups are positioning themselves strategically against each other. And neither wishes to have China around to out compete them or Russia to threaten their security.
It is in this context that the geography of Pakistan, Afghanistan, Central Asia and the central Asian regions in China become central to the future of global economy. China is paying a heavy price for its growth and it is anyone’s guess whether or not it can sustain its pre-eminance in production and trade in future. The next global financial crisis is awaited by all for it is no longer about what but when. This will have serious consequences for political continuity in its aftermath.
The future growth is all in the geo-strategic regions being called “Eurasia” which sees Turkey, Syria, Iran, China, Pakistan, Afghanistan and the Central Asia as the last contiguous region with massive oil, gas and mineral resources that will sustain the global economy into the next century. These are all regions where the United Kingdom and the Five eyes have influence. EU has very little clout in comparison. Hence there is natural competition between the Western Establishment Groups wherein Germany and France have been sidelined by the United Kingdom and the United States.
The Law Today Pakistan, commonly known as TLTP, is the largest news wire service, headquartered in Islamabad. The service is providing fast, comprehensive and verified news on superior courts adjudications, regulatory framework of fiscal, monitory and external sectors, economic regulatory bodies amid apex institutions regulating the financial system. TLTP is empowering readers of more than 12 national English dailies in the country.