Greece

NATO – 19 nations may hit 2% promise 18 years after committing to do so

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It is a farce. In 2006, NATO Defence Ministers agreed to commit a minimum of 2% of their Gross Domestic Product (GDP) to defence spending. This guideline, according to NATO,  “principally serves as an indicator of a country’s political will to contribute to the Alliance’s common defence efforts.” In 2017, only 5 of the 28 members outside the US have met the 2% threshold – Greece, Estonia, UK, Romania & Poland in that order. Despite Greece’s economic problems elsewhere, it manages to honour the deal. NATO Secretary General Jens Stoltenberg said “the majority [not all] of allies now have plans to do so by 2024.” 3 more are expected to hit the target in 2018. So for all the good will in the world, is POTUS wrong to call the other 19 members slackers that ride off the US taxpayer when so many of them are only likely to hit the target 18 years after ‘committing’ to it?

NATO commitment in 2017 can be seen as follows.

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Although all credit to the Europeans and Canadians for getting away with it for so long. Previous US presidents have obviously not concerned themselves with getting a fair deal on mutually agreed commitments. Although in what world would American taxpayers be upset to see the rest of the team pick up the slack?

Naturally the media are getting mileage out of the insensitive bully attacking his supposed allies. In fact Stoltenberg said last month on record that, “burden sharing will be a key theme of our summit next month, and I expect all allies to continue their efforts.” He reiterated that to Trump yesterday.

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To be brutally honest, how effective can a NATO force truly be if words aren’t put into action? What good is a promise if it is to be honored 18 years later. Imagine if that is the mindset should NATO be forced to act militarily. Would those meeting their obligations feel within their rights to have a bigger say in how NATO should work?

The problem with such a lack of commitment is that over the 12 years where 23 nations have not come close to meeting their obligations, the sum total of the actual defence capabilities suffers for the duration. The US is 67% of total NATO spend and the UK, France  & Germany make up half of the remainder. Yet building a sustainable capability in defence does not come through half measures or poorly thought out procurement. What is missed on many is that over 70% of defence budgets are allocated to soldier pay, housing, healthcare, training and so forth. Procurement and RDT&E get funded out of the balance. Have a skirmish somewhere and yet more money is chewed out of buying new equipment for the sake of logistics (feeding 10,000 troops and servicing hardware in a foreign land). Then there is the subject of terribly managed procurement programs.

Take the French disaster that is the aircraft carrier Charles De Gaulle. Despite delays because of problems with a retrofit for radiation shields, the naval brass had to add 14 feet of deck because it realized that the E2-C Hawkeye surveillance planes it purchased couldn’t take off and land in its original build spec. Even now the flight deck is not long enough to conduct simultaneous launch and recovery operations. Even worse the blueprints for the CdG‘s propellers had been lost in a fire, which meant that the ship had to be refitted with hand-me down screws from carriers Foch and Clemenceau which meant her speed was cut from 27 knots to about 24 knots—which was unfortunate since her predecessors steamed at 32 knots. Speed to war zones is kind of important to gain a decisive edge. All of the spend to fix poorly thought out designs cuts from being able to procure other equipment and materiel. Scary to think Australia is buying 12 subs from the French! The problems are already revealing themselves despite not one boat having hit the dry dock.

History tells us many things of how NATO type organisations have failed in the past.The Peloponnesian Wars (431BC – 404BC) highlighted how things can change when allies do not keep up commitments and capabilities aren’t maintained.

Athens required her Delian League member states (consisting of city states mainly along the Ionian Sea) to pay tributes (phoros) to the treasury which was used to build and maintain the naval fleet led by Athens. Yet over time the member states relied too much on the wealth of Athens and over the course of the draining war and the costly campaign to Sicily, failed to honour the ever increasing demands to fund the league with the appropriate level of tributes which drove Athens into massive debt. Defence spending by the Athenians had been cut to around 30-60% of the average over the previous decade. The Delian League’s capabilities dwindled as a result and the Spartans, funded by Persia, took advantage of this and crushed it for good, in the very art of war that Athens was renowned for – the navy.

It is not hard to think of Trump feeling like a modern day Pericles. NATO is the Delian League and its projected enemies chip away all the while members dither over commitments, forcing the US to sustain the limited capability. Like the Athenians, the US has the most powerful navy in the world with a fleet bigger than the next 11 countries combined but even it has pared back the number of ships to less than 10% of what it had in WW2. Enhanced capability is one factor in cutting the surface fleet but even the US DoD realised that the conventionally powered US Kitty Hawk consumed 2% of the entire US military fuel bill annually so it was taken out of service to save money.

One can argue the $750 billion annual defence budget is plentiful but the US realises that power projection is an expensive business. Even Japan understands it can’t stay nestled in the bosom of US stationed forces forever without taking a proactive stance to defend itself. That is the same message to the 19 members NATO failing to pull their weight.

Austria proves again why the EU needs to listen more and talk less

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God gave us two ears and one mouth so that we’d listen more and talk less,’ so the old saying goes This is what the EU gets for trying to bully its member states. It wasn’t long ago that EU President Jean-Claude Juncker was telling Austrians that if they democratically elected Norbert Hofer of the right wing FPO then the EU would remove Austria’s voting rights and cut off any transfers. Well the Austrians have voted for a conservative anti-immigrant party (which wants a programme to get immigrants to assimilate with the local culture) with a 31yo leader, Sebastian Kurz. His People’s Party garnered 31.4% (+7%) of the vote with the far-right wing FPO coming in second at 27.4% and incumbent Social Democrat Party coming in third with 26.7%. The Greens will probably not make the cut off of 4% to make a party, So once again the EU has had yet another major repudiation of its totalitarian ideals.

CM has been making the point for ages that forcing one’s beliefs onto others must be done in a way that listens to the other side. Otherwise it delivers results like Trump. It seems the EU hasn’t learned a thing.

So what have we had?

-Le Pen garnered 1/3rd of the French vote (double the best ever achieved by Front National),

-the far right Freedom Party’s (FPO) Norbert Hofer still managed 46% in Austria farcical re-run presidential election),

-Geert Wilders’ 25% increase in seats for the anti-immigrant PVV in The Netherlands,

-the surge in the Sweden Democrats to the top of the recent polls, Elections in 2018.

-Italy’s referendum which turned into a backdoor vote to oust PM Renzi. Elections in 2018 likely.

Brexit (although PM May is handling negotiations in true British efficiency – Fawlty Towers ring a bell?),

the Swiss handing back a 30yr standing free ticket to join the EU,

-the AfD in Germany getting 13% of the vote (Merkel may have won but it was her party’s worse showing in 7 decades)

…these don’t look like promising trends for an EU which is already badly listing. Despite ample warnings the EU refused (and still refuses) to change its course or exercise due care. It just issues more threats.

While the left openly voices its rage at these ‘right-wing’ parties growing in support, they never bother to seek reasons why. The right are generally just dismissed as racists, bigots or worse.  Major party loyalty has never been worse. The fabric of the loyal party voter base is wearing thinner. Take Australia’s One Nation Party led by Senator Pauline Hanson. The popularity of the mainstream LNP and Labor Parties is at record lows. One Nation is now 10% of the vote from 2% several decades ago. While some parties may claim their loyal base has abandoned them the stronger case to be made is the clear shift of the parties away from their once faithful constituents. Why?

Incumbent governments seem to cower at receiving negative news from the 24-7 polling cycle that is social media. Being careful to avoid inviting attack, they pander to all of the socially acceptable agendas – climate change, gender fluid bathrooms, laws clamping down on free speech, open borders and afffirmative action.

However political correctness is clearly not the answer as these results across Europe and elsewhere show. People are sick of the brow beating by socialist activists. Tired of the constant protests and social justice bleating. The NFL might find that most of its fans are against police brutality but they aren’t wanting a weekly lecture in grievance politics with the price of entry or their cable TV channel. Growing weary of the idea that it is ‘free speech’ and anything against those ideals are deemed ‘hate speech’. It is not to deny some positions are not necessarily palatable but in the marketplace of free speech, ridiculous positions can easily be disproven. Better to give extremist voices a chance to talk and invite public opinion on them at their own peril. Shutting it down forces it underground., making it inherently more dangerous.

Too many mainstream political parties are moving off the policy reserve that defined them so their once loyal followers are actively seek ones that will. While Hanson’s One Nation or Senator Cory Bernardi’s Australian Conservatives may not tick every box to existing LNP voters, they cover enough of the positions that matter to them that they’ll tolerate some of the more out there ideas. It is not uncommon to hear the left complain at One Nation’s is growing popularity at the expense of the Greens but it is a devil of their own making.

So will the EU listen to the Austrian call? Will it pay attention to the Hungarians who voted over 98% against accepting forced migrant quotas? Think through the logic. If you were an asylum seeker, would you think your chances of unincumbered settlement would be best placed where 98.4% of the population doesn’t want you? It is irrelevant whether we think the Hungarians are insensitive brutes not to extend a welcome to those that are legitimately in need. It is their country and their democracy has spoken. If Brussels assumes to dictate to Hungary how it wishes to protect its culture and whatever it holds precious, why shouldn’t the EU have the same rights to enforce income tax, housing benefits and anything else it sees fit? Of course it is a preposterous notion.

It will not be long before the EU will be front and center on Greece. Let us not forget that the EU colluded with Goldman Sachs to ‘fiddle’ the accounts to make Hellas much prettier optically than it was. Was this pig without lipstick it wouldn’t have gained acceptance to the club. So the EU is not in a position to claim innocence over a deliberate ploy to ram-road the Greeks into its federal state yet have no qualms treating it with disdain. Talk about double standards.

In all seriousness the treatment of the Greeks by the EU is despicable beyond words. So for all of the left’s blind love for the EU and its socialist agenda, 36% of Greeks live below the poverty line and 58% of the youth are unemployed. So for all of the EU’s shared sense of purpose and equality, that means many can’t access affordable healthcare because it is generally provided by corporates and when you lose a job you lose the healthcare. This means many are forced to use A&E of major hospitals which are now overcrowded and understaffed as more doctors are leaving to seek better fortune for their services elsewhere.

If that wasn’t enough, mothers who had given birth were being restricted from taking their new-borns home if they couldn’t pay the hospital fees. While the government has banned this practice they have introduced new laws to allow the seizure of assets (e.g. homes) if debts are not settled.

Shortly, the Greeks are coming up for discussion over its debt position and austerity. With just months left before Greece’s latest lifeline expires, officials directly involved in the country’s bailout say they don’t have the stomach for contingent aid program when the current one expires in August 2018. While the EU and Athens are battle worn after 7 years of this knife edge rescue,  Greece will need to show it can go it alone but it’s eurozone creditors will be reluctant without further strings attached.

Here is betting that the EU doesn’t heed the lessons that have been ringing loud and clear for years. Sincerely hoping Greece leaves the EU and lets market forces revive its economy. Better to die on its feet than live on its knees.

NATO Facts and why Macron’s arrogance is no better than Trump’s

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While social media splashes around a US contribution to total NATO spend of 73% it in reality is a third of that. Only the USA and UK spend over and above NATO commitments as outlined in the chart above. Even the Greeks meet half the requirement! Germany is below not only NATO guidelines but the media would never tell you that. Trump has a point. In fact the reason much of the military spending numbers below the requirement stems more from inefficiency than anything else.

What many fail to understand is that salaries and benefits (housing, education and healthcare) for military staff tend to consume 3/4s of the budget. Procurement is a dog’s breakfast and influenced by age of fleets, battalions, interoperability and so forth. While NATO isn’t exactly group buy the us wins by default of having access to the best cost/performance equipment allowing better bang for the buck. Little Estonia can’t get the same economies of scale.

The “contribution” (click here) question is clouded by two things. Under Obama, the US has cut its NATO contribution from 5.29% of GDP when he took office to 3.6%. NATO Europe had met the minimum expected contribution of 2% but this has slumped from the tech bubble collapse of 2000 to 1.47% today which has meant the only thing keeping NATO’s overall budget above target has been Uncle Sam!

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So once again social media muddles a message. It takes 10 seconds to go on NATO’s website and fact check.

Instead the media is more focused on pointless clickbait on whether Trump can hold Melania’s hand without being swatted away or who won the vigorous handshake contest – he or Macron. In fact Macron’s deliberate snub Of Trump when he met all the leaders spoke volumes. He made no conscious effort to shake his hand first. He made a point of sucking up to his EU cronies first and spent needless time making worthless chitchat before even acknowledging the leader of the strongest nation on earth. We shouldn’t be surprised. Best have Trump inside the tent p1ssing out than outside p1ssing in.

Even if they want to delegitimize Trump they play a silly game. Much like business leaders being bullied on social media to leave Trump’s business council (Uber chickened out), the EU plays a dangerous game of isolating Trump. If they want to prevent him from being the “unhinged” orange buffoon they think he is they’d do much better to be welcoming, accommodating and flattering his eminence. That way they can bring balance and find common ground. They show no signs of even beginning to try. By snubbing him they shouldn’t be surprised if he acts independently. Yet Macron acts no better than Trump and the media lavishes praise on the exact same antics they crucify The Donald over. Typical double standards.

Be careful what you wish for! The world needs a healthy US and stunts like this only fray the lines of trust and partnership further. Sure, the America First policy stance is affronting but if the EU want to expedite the process then keep up the Trump bashing. It doesn’t mean Trump bumping (hey Trudeau did it in Canada to a female member of parliament) other dignitaries shows good character but he knows he’s being ridiculed and the media sees it as their only form of attack. The problem is they forget 75% of Republicans STILL approve of his job performance.  He may only be doing a C+ on performance in office but he isn’t anywhere near the F- portrayed by the media.

Over 10.6 million Frogs want to jump out of the EU’s boiling pot

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While the media and the EU will no doubt be jumping for joy they’ll overlook the fact that over 1/3rd of the French who voted, or over 10.6 million, want to jump out of the EU’s boiling pot. Think about that number – over TEN POINT SIX MILLION.  Le Pen’s father only managed slightly better than 5mn or 17.8%. Macron won convincingly (Twitter follower growth ratio accurate again) although one can hardly call 1/3rd of a population backing a far-right nationalist something to celebrate.  It is a damning figure. Period.

The extent of the Le Pen gains should be viewed by the EU as a terrible omen. However many of the Brussels brigadiers have ignored it already as their tweets make painfully clear.

After losing 15 out of 15 referendums against it  the EU desperately needs reform. The Dutch election was still a strong win for Wilders and Rutte only saved seats by adopting a more anti-EU stance. The pro-EU Dutch leftists were slayed. The Swiss recently handed back their long standing invite to join the EU. The Austrians almost voted in the far right FPO and after Greens President van der Bellen recently said all women may be obliged to wear the hijab to show cultural sensitivity they may well think to do that next time. The right wing Sweden Democrats are well ahead in the polls looking to win the 2018 election. The Italians are on the way to vote in the eurosceptic M5S party as their referendum last year on parliamentary reform became a free kick to boot out the establishment. Hungary’s Orban has had enough of the EU’s directives on migrants. Greece is being forced to sell its assets in order to secure another bailout and submit to being a Brussels’ (Berlin?) protectorate despite the EU bending over backwards with the help of Goldman’s creative accountants to get the Greeks into the club. This will not end well as Greece has 37% poverty, 58% youth unemployment and a soaring suicide rate. Now almost 10.5mn French now think the EU is not working. Brexit anyone?

The problem with elections is that even though Macron will serve 5 years, over 1/3rd of his citizens are not happy with the state of terrorism, unemployment and the EU. If Macron doesn’t solve for these problems, Le Pen’s 2022 chances grow and she’s already calling for a radical overhaul of Front National.

The press was making Macron to be a tough negotiator on Brexit. Let’s not forget that the ranting Jean-Claude Juncker has had to be brought into line by Angela Merkel and Donald Tusk over his Brexit negotiations skills (or lack there of). EU lawyers have said the other day that the  €100bn Brexit bill has no legitimacy. The U.K. Local council elections should speak volumes of May’s mandate to pursue full strength hard Brexit.

Macron’s win buys the EU time. Nothing else. In fact the truest test of how petrified the EU truly is can be summed up like this. If they were supremely confident in their own legitimacy there would be no need for the constant self-reaffirmation and shouting from the roof tops about what a great place it is. If indeed it was so, democracy would endorse them every time. As it stands the self-praise would even make Barack Obama blush.