Cast a giant shadow

A reckless look-ahead at 2024

A seasonal BBC tradition is the Correspondents' Look Ahead into the new year. Once upon a time, the assembled journalists would make predictions but, in recent Decembers, a collective terror of being wrong has set in. This week they surpassed themselves; the BBC's chief international correspondent, political correspondent, business editor, and Russia editor couldn't call the result of the US presidential race, the endgame in Ukraine, or even - with the Labour Party 18 points ahead - who would form the next British government.

Since irresponsibility is what New Year’s Eve is all about, I’m going to show them how it’s done. Here are my hero-or-zero predictions for 2024¹.

Looming over them all, of course, is a 1.9-metre, 98-kilo shadow. Ten months out, Donald Trump’s possible return to the White House is already determining strategy in Moscow, Kyiv, Beijing, Taipei, Budapest, Belgrade, and (albeit less than it should) Brussels, Berlin, and Paris.

Although President Joe Biden’s team won’t admit the possibility of defeat, obviously well-sourced reports in the New York Times and Politico² reveal that Ukraine policy is undergoing a redesign for the deep uncertainties of 2024.

In common with the betting market (55/42%), I fear Trump will win on 5 November, but have to accept the balance of the evidence. Next year promises an unusual cocktail of continued growth, subsiding inflation and falling interest rates that should favour any incumbent. Add to that Trump’s legal jeopardy, the negative correlation between his media ubiquity and his support, Democrat-favourable demographic changes in key states, the results of elections in 2018, 2020, 2022, and 2023, and comparative fund-raising. So, call one: a narrow win for Biden while his Democratic Party retakes the House of Representatives.

Freeze frame

This will be helped along by my second reckless call: a pre-election armistice in Ukraine close to the current line of contact but with both sides maintaining their territorial claims. This looks especially fanciful after Russia’s latest widespread civilian bombardment and Ukraine’s response in Belgorod but - leaving principle aside - the political argument is strong. In a perfect political world, this would be negotiated in time for the NATO summit in Washington (9-11 July) and the week before the Republican convention (15-18 July) that seals Trump’s renomination.

But, I hear you ask, why would Vladimir Putin settle early when he could wait for Trump in January 2025? First, that’s a long time and Trump might lose, along with his House loyalists who have been holding up aid to Ukraine. Why go through more than a year of costly attritional warfare and sanctions for that? And, for what? Even if he wins, Trump won’t be in a position to offer Putin more than temporary control of the territory his forces occupy. Finally, a pre-election freeze – along with sanctions relief – allows the Russians time to dodge another unpopular mobilisation and fortify their new borders in the Donbas and Belarus³. Besides, the Kremlin would have no intention of keeping things frozen indefinitely and the Ukrainians know it.

In that case, you ask, why would the Ukrainians settle with 20% of their territory in Russian hands? Because their allies need them to. This isn’t just a tactical question of dependence on NATO weaponry and financial assistance but a strategic promise of integration into Europe’s economic and security architecture. To sell a frozen conflict at home, the government needs to maintain its claims on the Donbas and Crimea and a credible process of accession to the EU and NATO. Most immediately, it requires speedy integration into Europe’s weapons-manufacturing supply chains, routine joint training and exercises, security guarantees, massive reconstruction aid, and early association with the European Economic Area. Without Biden, Kyiv gets none of this. As Serge Schmemann wrote this week: “[R]egaining territory is the wrong way to imagine the best outcome. True victory for Ukraine is to rise from the hell of the war as a strong, independent, prosperous, and secure state, firmly planted in the West”.

New landscape after June

In an American election year, self-interested media and politicians will try to turn the European Parliament elections (6-9 June) and the presidential transitions at the European Commission and the European Council (1 December) into a euro-West Wing. They’re not.

In an election with 50% turnout, the parliament’s two coalitions of nationalist/nativist parties (ID and ECR) should add around 40 seats to their 126-seat tally from 2019 at the expense of the liberal Renew group and the Greens. After a few days of “Europe swings far right” headlines, the centre-right (EPP), centre-left (S&D), Renew, and Greens will re-establish their “grand coalition” and it will be a return to business as usual.

Ursula von der Leyen will be reappointed to a second term as commission president while a prime minister (serving or former) – Mette Frederiksen (Denmark), António Costa (Portugal), or Sanna Marin (Finland) as a best guess – will replace Charles Michel in the Europa building. For fans of the Brussels Game, things could become interesting if ID or ECR beat Renew to third place and claim the right to nominate the new High Representative for foreign affairs and security (HR/VP) – someone confirmable by the parliament. If Renew holds onto third place, Estonian premier Kaja Kallas is well-positioned to become HR/VP, so clearing the path for outgoing Mark Rutte to succeed Jens Stoltenberg as NATO secretary-general.

By this time, Geert Wilders will have replaced Rutte as Dutch prime minister at the head of a self-proclaimed “centre-right” coalition following another epic formation exceeding 250 days. While his elevation to the premiership will feel shocking at first, his ambition to join Italian premier Giorgia Meloni’s third way plus the coalition agreement’s handcuffs will keep him mostly “milder”.

The European Parliament elections will deliver a predictable battering for the incumbent parties in Germany and France and provide a convenient landmark in preparation for national elections. In October, it will be a year until Germany’s federal election and the midpoint of Emmanuel Macron’s second and final term.

There’s not a lot Berlin’s “traffic-light” coalition of the centre-left SPD, the market-liberal FDP, and the Greens can do except wait for an economic and political upswing and for the right to screw up. According to a Mannheim Group poll conducted on 12-14 December, support for the government has dropped from more than 50% in the spring to 27% but only 35% believe a conservative CDU/CSU-led cabinet would do any better. With support for the nativist AfD at an all-time high of 22% and a third of CDU/CSU voters favouring some form of cooperation between the parties, the post-June pressure will be felt as much by the opposition as the government. Strong AfD performance in state elections in Brandenburg, Saxony, and Thuringia in September will only add to this.

The struggle for the 2027 Macron succession will begin in earnest after the June elections with the competition narrowing down to three ministers – Bruno Le Maire (finance) from the Gaullist centre-right, Gérald Darmanin (interior) from the Sarkozyste⁴ right, and Gabriel Attal (education) from the Vallsiste⁵ centre-left – and long-time frontrunner Édouard Philippe, Macron’s first prime minister and from the same centre-right tradition as Le Maire. Before Macron, this would have been typical pre-election positioning between centre-left and centre-right candidates but, this time, it’s happening inside a single political movement. Outside the big centre, an inevitable victory for Marine Le Pen’s RN in the June election will lift the profile of party president Jordan Bardella and kindle speculation that the movement would fare better in 2027 without the Le Pen name. On the left, a modest revival for the socialist PS at the expense of the far-left LFI may finally be enough to end Jean-Luc Mélenchon’s overlong career.

In Italy, the elections will be Meloni’s high point, with her Fratelli d’Italia set to beat their 27% 2022 national result. Her long honeymoon – kept romantic by €85 billion in pandemic-recovery funding and the tolerance of euro area institutions and rating agencies for three years of reform inertia – is already fraying. As her approval rate drops to -10%, like Matteo Renzi before her, Meloni is wasting time and political capital on reforming the system of government. She’s been blessed by a divided opposition until now but the June elections are the perfect moment for Matteo Salvini, the mean-spirited and resentful Lega leader, to accentuate his differences and bid for Meloni’s abandoned far-right flank. Meloni will stick to colonising the broad centre-right – gradually absorbing Forza Italia and the Lega’s governing wing including its finance minister – but the coalition will start to splinter.

On the EU’s western/northern border, plans for a 2 May British general election look less secure than they did after the government pre-announced tax cuts in November. The hoped-for poll bump failed to materialise, but the May signal was so strong that a five-month postponement to benefit from falling interest rates will look like weakness⁶. Whether it’s May or October (and I still opt for May), the Labour Party – helped by tactical voting and the collapse of SNP support in Scotland – will win an overall majority. This will be followed by exploratory re-convergence negotiations with the EU and more urgent talks between London, Brussels and interested member states on a tighter European security alliance within NATO.

This time next year, just remember the things I got right. If I get the first one wrong, nothing else will matter.

Point, counterpoint

When Wolfgang Schäuble (81) and Jacques Delors (98) died within 24 hours of each other last week, I couldn’t help but think of John Adams and Thomas Jefferson. These two American founding fathers, who went on to become their second and third presidents, died at 90 and 83 on the same day in 1826 – and creepily, that day was 4 July. Close as young revolutionaries and again in old age, the two men fought in-between over the design of their union. Adams was convinced that the States would only survive as a nation with strong federal institutions while Jefferson resisted the ceding of states’ powers to the centre.

Delors and Schäuble too embodied similarly divergent routes to an “ever closer union”. Delors and the team he built around him as commission president (1985-94) followed Kevin Costner’s dictum: “If you build it, he will come”. Build the single market and member states will want a single currency with a joint central bank. When they have that, they will need a joint budgetary policy overseen by a federal executive accountable to a continental parliament. Needs must.

Back then, Schäuble, who is remembered internationally as Angela Merkel’s hardline finance minister (2009-17), was chief of staff (1984-89) to Chancellor Helmut Kohl and then CDU/CSU parliamentary leader (1991-2000). His alternative path to a federal Europe – set out in 1994 in a famous joint paper with Karl Lamers – was more legally circumscribed and deliberative. As a euro-ordoliberal, his vision of monetary and fiscal union was based on adherence to rules and confidence-building national consent. His road to fiscal union (rightly, in my view) was through a debt-redemption pact in which all parties have skin in the game and not through unconditional debt mutualisation.

Erratum

Speaking of which, in my 23 December Notebook, I wrote:

“[T]he pre-pandemic 2018 proposal from the European Fiscal Board … stripped the rules down to one operational target governments can see and control – nationally financed public spending minus discretionary revenue measures and the costs of debt interest and cyclical unemployment – and a longer-term debt/GDP target. To get there, the commission would carry out tailored debt sustainability analyses for each euro state. But, because the German government hasn’t trusted the commission to play the role of referee for 20 years, it insisted on year-by-year debt and primary deficit targets”.

A reader directly involved in German/commission discussions during those 20 years wrote to protest against this comment, which also pops up in the German press with annoying frequency. He rightly pointed out that I had elided two entirely different things: the commission’s 2003 finding that Germany and France had violated the euro area’s fiscal rules - which infuriated the SPD-led Berlin administration - and the post-2010 suspicion in Berlin that the commission was being too soft with highly indebted governments.

Pick of the pods

Sticking with the New Year’s Eve theme, I’ve listened to a lot of 2024 outlooks besides the Correspondents’ Look Ahead. For US politics, you can never beat The Next Level and their Let’s Brace for 2024 Together! On Ukraine/Russia, look-ahead episodes from The Eastern Front, The Russia Contingency ($), and In Moscow’s Shadows are essential. For those with an interest in Ireland, try out this two-part AUA from the Irish Times’ Inside Politics and BBC Ulster’s Red Lines’ The Long and the Short of 2023. For the French view (0.75x works for me), these France Culture podcasts (here and here from 21:50) were good. Off-topic but a fascinating insight into the world of film-making, have a listen to Tonebenders and the team (including my brother) who brought a big sound to The Iron Claw.

1. These are my predictions and not those of Medley Advisors.

2. After reading The Biden Administration Is Quietly Shifting Its Strategy in Ukraine by Michael Hirsch (Politico), read this Twitter thread by Tymofiy Mylovanov.

3. After hosting the assault on Kyiv, seeing his intermediary role in the Wagner mutiny ignored, and now announcing the completion of the deployment of Russian tactical nuclear weapons in his country, President Alexander Lukashenka has confirmed Belarus’s de facto annexation.

4. A 20-year-old conservative tradition built by former president Nicolas Sarkozy focused on internal security and policing.

5. A 15-year-old PS tradition built by former prime minister Manuel Valls focused on internal security, policing, and militant secularism. Valls is now so hated by his former party that Attal would shun the label but that pool is where he’s fishing.

6. In today's Sunday Times, well-informed Tim Shipman writes: 'When Sunak decides to call the election is becoming an issue of personality and nerve. Labour expects him to call a May election, despite the huge poll deficit. The prime minister has told Richard Holden, the new party chairman, to make sure the Tory machine is ready for then. Holding the budget earlier than usual could be a sign of a government preparing for a general election on May 2, the same day as the local elections. But several senior aides believe Sunak needs longer to deliver money into people’s pockets. While Labour is planning to finalise its manifesto in January, the Tories don’t expect to get to that point until March. [Isaac] Levido has pencilled in polling day for November 14, nine days after the US presidential election. “They say autumn but act like it’s May,” said a source close to Starmer. “They’re cutting taxes in January instead of April. That is a £2.5 billion tax cut. It would be the most expensive bottle job in history.” ... A November vote will allow Sunak to serve two years in No 10 (the anniversary is October 25) and give Hunt the chance to hold a second budget in the summer. Labour will attack him for clinging on. “I think he needs to kill the idea of a spring election or he’s going to look like Gordon Brown in 2007, dithering over the date,” a former adviser said.'