Notebook: May contain nuts

Orbán as Spinks, the neocon shuffle, and Lagarde baiting

In June 1988, Mike Tyson and Michael Spinks met in Atlantic City for a fight between undefeated heavyweights. Hyped into the then-richest boxing match in history, this “Once and For All” battle to be fought over 12 thrilling rounds ended after just 90 seconds when Spinks was knocked out.

Yes, it dates me but this is what popped into my mind when watching the two-month, 26-to-one standoff over EU aid to Ukraine that ended last week in Brussels. In the lead-up to last week’s special European Council meeting, diplomats had briefed that – unlike every single other occasion he’d blocked a decision – Hungarian Prime Minister Viktor Orbán wasn’t messing about this time. “Hungary will not change its mind,” warned János Bóka, Orbán’s European affairs minister after the last showdown summit in December. The €50-billion financing package for Ukraine could not come from the EU’s budget. “I do not see any factor that would change our decision, which is rooted in principle”.

From December onwards, officials from the European Commission and from those member states that cared about getting cash to Kyiv put together a €20-billion workaround to bypass the “rooted in principle” Budapest veto. At the same time, a majority in the European Parliament and a handful of governments dropped heavy hints that they had the votes (they didn’t) to go Article 7 on Orbán’s generous backside. As he always does, the EU’s “illiberal democrat” blinked. A European Council deal on the full €50 billion was announced before the first coffees were served on Thursday morning.

Tick-tocks from the New York Times and David Carretta's La Matinale Européenne (the better of the two) – complete with details of the Hotel Amigo’s furnishings – tell the story of the diplomatic effort to bring Orbán to heel. Of course, the commission – with its French and German enforcers – was central to the campaign but it was Giorgia Meloni who got him over the line. She told Orbán a story about a nameless new Italian prime minister from a far-right tradition with distrusted allies who had built enough political capital in the EU over 15 months to secure transfers worth €85 billion despite minimal reform. After Meloni also threw in a promise to let his Fidesz into the European Conservatives and Reformists (ECR) group her party dominates (with the attached posts and money), Orbán was all but bought.

Only a couple of concessions were needed. He failed to obtain an annual veto on renewing the Ukraine package but won a commitment to review it in late 2025 – nicely slotting the war or its aftermath into his next election campaign. He also got the French, German, and Italian leaders to remind the commission president in his presence that Hungary should get the €20 billion it is due if it meets rule-of-law conditions. Implicitly, there should not be mission creep into disapproval of Fidesz’s social conservatism. It was a victory of sorts but so was Michael Spinks’ survival to spend his $13-million purse.

The emperor’s new clothes

Two editorials published this week – one by John Bolton, the National Security Advisor to former US president Donald Trump for 17 months in 2018-19, and Niall Ferguson, a historian at the Hoover Institution and Harvard – have allowed me to recycle a Substack Note I wrote in anger on 15 January.

In Trump Is a Danger to US Security in the Wall Street Journal, Bolton – a Republican neocon’s neocon – was quick to attack Joe Biden for weakness in the face of aggression from Russia, China, North Korea, and Iran. However, he went on to add that “a second-term Trump policy on Ukraine would favor Moscow”, admitted that Trump-era sanctions against Russia only came “after he protested vigorously” and that “Trump almost gave away the store to Pyongyang, and he could try again”, and that he is “no friend of the military”. Ferguson’s polemic for the Daily Mail hardly touched on Trump but condemned Biden for “a series of disastrous failures of deterrence” – abandoning Afghanistan and failing to stop Russia’s full-scale invasion of Ukraine or Iran’s use of proxy militia.

I suspect Bolton is preparing the ground for a previously unthinkable Biden vote in November. On the other hand, I fear Ferguson – possibly my favourite writer of history – is using an illogical argument about “empire or republic” to roll the pitch in readiness for a Trump vote. I hope I’m wrong. Read the note here.

Queen Christine

By breaking the story that a European Central Bank staff survey had found President Christine Lagarde’s stewardship to be “poor” or “very poor”, Politico has solidified its new and cherished reputation – begun with a 3,000-worder in September – as the media’s leading Lagarde-baiter. And, as you will see here (from 39:30), she has let herself be baited.

Okay, in the ECB’s Sonnemannstrasse headquarters, Lagarde is considered a bit regal and the PR operation over-focused on her at the expense of the institution. But this is office politics of no interest to those of us who don’t work there. What does matter is how she manages the ECB’s policy-making governing council.

Lagarde’s predecessors Jean-Claude Trichet and Mario Draghi knew how to impose their opinions and favour officials with similar world views. With no experience in monetary policy or training in economics, Lagarde lacked the chutzpah to do this. Instead, she played to her experience and strengths as a chairperson. National governors whose opinions were not shared by Draghi and his closest allies came to feel sidelined and ignored. Lagarde brought them back in and created a more consensual decision-making body. This had real-world effects when it came to big mind-changing moments for the ECB in 2021, 2022 and again today.

I always thought it was a mistake to appoint someone without essential technical knowledge to the presidency. Markets quickly learned that Lagarde was speaking from a script and couldn’t diverge from it and it meant that others stepped in to fill the inevitable gaps in communication. In 2028, it shouldn’t happen again. That said, she has chaired well and I couldn’t give a Politico what the ECB’s staff think of her.

Pick of the pods

Listen to Jonathan Karl on Beg To Differ (Do People Care That Trump’s a Sociopath) talking about his behind-the-scenes book on Trump’s second term. I refuse to be surprised by Orange Man but I still am. If you pay or are prepared to pay for the wisdom of Michael Kofman’s The Russia Contingency, his two-parter (A New Strategic Vision for Ukraine) is especially good. I enjoyed Tortoise Media’s new series (Betrayal: Alex and Nicola) on the rise and fall of the Scottish National Party in government told through the relationship between Alex Salmond and Nicola Sturgeon.