The Duran Podcast - Can Europe Return to Reason & Reverse Its Decline Jeffrey Sachs, Alexander Mercouris & Glenn Diesen

Episode Date: November 27, 2024

Can Europe Return to Reason & Reverse Its Decline Jeffrey Sachs, Alexander Mercouris & Glenn Diesen

Hi, everyone and welcome. I'm here today with Alexander Mercuris, and we are very excited to have Jeffrey Sachs back to discuss the political changes within the West. So I guess mainly focusing on two major issues happening now. One is Europe's, of course, deindustrialization, I would say reckless militarism, diplomatic decline, and one could add growing irrelevance in the world to this list and as if Europe doesn't really need that much help to undermine its own interest or position in the world, but nonetheless, there's now growing concerns that the Trump presidency as well might cause a further decoupling and the relevance of Europe. So I thought, yeah, we could jump into this topic because, again, Professor Sachs, you are an economist, you advise

the United Nations and governments around the world. I think Brazil, Peru, Bolivia, Poland, Slovenia, Soviet Union, Estonia, Russian Federation. So I've seen a large part of the world. Yeah, and a few... I've been very lucky in that. A dozen African countries. So I think... And Asia, I've watched China develop over the last 40 years

and India develop over the last 40 years pretty close in. It's been a very interesting, interesting view. Yes, you're able to see when things are going right and also when they're going wrong and how to fix this decline, of course. So, you know, based on your expertise, what do you see happening to Europe now? This, you know, most theories in international relations such as political realism is premised on the idea of the rational state. But I don't see necessarily that much rationality anymore in terms of self-interest defined

either economically or in terms of maximizing securities. So how are you diagnosing the illness, I guess, on this continent? Well, first of all, Europe as a union is an unusual political experiment. The world has been organized in nation-states or European empires and colonies for centuries. Europe is trying to organize itself collegially, and there have been certain successes in this without question. If you look just at one perspective, the quality of life, and by that I mean life expectancy, distribution of income and poverty, ability to have leisure time and so forth, Europe actually has the highest quality of life in the world. Of course, you have to continue to earn it. You have to continue to be able to produce to justify it. But Europe is a great success in terms of quality of life.

But in order to manage in our world today, Europe actually does have to be at a scale of Europe on the one side and with its diversity. On the other hand, this is a very tricky maneuver to pull off. In other words, the European Union is a real thing and it's a good thing, in my opinion. On the other hand, Europe is a very diverse continent with a 2,000 years history of internal warfare, by the way. So it's a quite complicated place. My favorite place in the world, I have to say. So I'm very much pro-European. But making this work is not easy.

And Europe has made some absolutely fundamental mistakes in the last 20 years, in particular. basically, in my view, the most fundamental mistake, ironically, is that it put the capital of Europe and the capital of NATO in the same city, and it completely lost its sense of European perspective. It became really a vassal of the United States. And my country is a very peculiar country. It has delusional aspirations of global hegemony. It's completely ignorant geographically. It is not operating in Europe's interest. And Europe is no longer operating in Europe's interest.

And that's the fundamental problem. Europe does not have its act together right now. For me, one of the telling signs was the head of the European Commission Mrs. Vanderlayen, her aspiration was to move from that position to become head of NATO. She failed. She didn't have the vote of confidence of the U.S., but how mind-boggling that you'd rather be head of NATO than head of Europe than head of the European Commission. To me, that said everything. It said how confused Europe is, how it's lost its strategic vision, how it lacks

strategic autonomy, so called. And now it's, unfortunately, a group of profoundly unpopular leaders on their way out. Macron, Schultz, and many,

many deeply unpopular leaders, because they're acting not in Europe's interest, but in the interest of not only the United States, but of a failed United States. States. They're latching Europe onto a failure rather than building on Europe's strengths.

So I'm not ruling Europe out by any means. This is a civilization of at least 3,000 years, and a lot of wisdom, a lot of beauty, a lot of talent, a lot of great universities, a lot of great science and technology, but it's not organized properly right now. And the U.S. does not have Europe's best interest at heart, and we will be able to thank Donald Trump very soon for being extraordinarily clear about that. Just as I was saying before, we started this program, I've just been to Hungary. I've been to Budapest. I met various people there, people who serve in government, people who are drawn from

all of the various ministries in government. And they not only endorsed what you said. In fact, they said some extraordinary things about the extent of American influence in European decision making, which I have to say, astonished me. And even the way in which

NATO military exercises are conducted, I mean, I wasn't aware, for example, that alongside the normal exercise, there is always a parallel American military exercise, which nobody else is informed properly about.

But they all said, to me, one thing, to the group that I was with, one thing, which is that everything is connected. And always, it came back to one overriding topic that economic problems in Europe, social problems in Europe, are always linked to the question of war and peace. We have a situation in Europe today of war. Europe is being led towards war, is focused on war, it is neglecting the issues of peace. And the result is what one of these very senior officials referred to as an economic suicide, rather dramatic language, but they do engage in rather dramatic language sometimes to get their points across.

So what they don't understand is why they're doing that. why we're doing that to ourselves, why we are being led into basically a war, a war type situation and a war psychosis, when there is a diplomatic way out, one which will then enable us in Europe to address our pressing economic problems. So that's what I wanted to say. What your views are about this? You know, not only a diplomatic way out, but an obvious one and a way that was understood. by European leaders back in 2008 when the die was cast on this disastrous war. It was at the Bucharest NATO summit, of course, in 2008 that the U.S. pushed, insisted that the NATO countries declare that Ukraine and Georgia would become NATO members.

And Merkel understood very well this was absolutely dangerous, provocative, wrongheaded against Europe's interests. Sarkozy understood this at the time. This was the last time that European leaders stood up to the United States. They said no, but they only said no halfway because they allowed the declaration of ultimate membership to be in the 2008 NATO declaration, but they blocked a specific action plan for membership. That was supposedly the success. Of course, it was no success. at all, the United States continued to steamroll Europe and it overthrew Yanukovych in February 2014, starting the war in Ukraine. By the way, overthrowing Yanukovych a day after the EU had negotiated

a political arrangement that would have kept Yanukovych in power. In other words, the U.S. steamrolled Europe again and again and again. And in 2019, the U.S. Of course, unilaterally abandoned the intermediate nuclear force treaty, and this has given rise to the Eurashtnik missile system that Russia has unveiled to Western shock this week. The U.S. has terribly misused Europe for decades because of a profound, explicit miscalculation. that was made by U.S. strategists. And you can find this miscalculation in Zbignu Brzynski's 1997 book, The Grand Chess Board.

He analyzes in one chapter, what will happen if the U.S. pushes NATO eastward? And his answer after analysis is, Russia will have to succumb. It has no choice. It will never, said Britsynski, side with China. It will never make an alliance with Iran. It's all there in clear print.

This is the U.S. strategy that has played out. It's important for people to understand. Foreign policy doesn't get made day by day, week by week, month by month. It gets made a decade-long scales. You go in the wrong direction. Ultimately, you fail. The United States has been in the wrong direction since 1991. It could not accept peace for an answer at the end of the Cold War.

it demanded global hegemony. This was delusional, hubristic. It's leading to disaster. But the point is that Europe went along with this, especially after 2008. You know, at the Bucharest summit, I wasn't there, but I heard an earful from European leaders. What is your president doing?

It's crazy. Stop this. And then they don't say it publicly at all. And I must say, in my experience in recent years, speaking with leaders across Europe, Viktor Orban, the prime minister of Hungary, has absolutely the clearest, deepest understanding of these events of any European leader. The idea that he is somehow shunned in Brussels isn't surprising because he's speaking the truth. and he's shunned by the United States. This is what this is about. But in terms of clarity and understanding of the geopolitics, and understanding of the game, he is unrivaled, actually. And so what you heard in Budapest is absolutely accurate.

Let me also say that there are a significant number of institutional means by which the United States effectively effectively occupies Europe. I mean, literally, in its military bases all over Europe, we know the CIA operations in Europe ever since World War II, which finally came to light with Operation Gladio at the end of the 1990s, showed actually secret armies of the CIA in what was supposed to be diverse, democratic Europe. But secret armies making false flag operations, terrorist attacks that it blamed on the Italian left and so forth, that were CIA operations. This is our reality right now. It's terrible. It's very dangerous. It's pulled us closer to nuclear war than we have ever been, I would say, at least as close, if not closer than the Cuban Missile Crisis. because at least in the Cuban missile crisis, the world was terrified.

President Kennedy was rightly terrified. Nikita Khrushchev was rightly terrified. They were doing everything to pull back from the brink. Now we have such stupidity day by day. And I'm saying stupidity in an absolutely rigorous manner. What European leaders are saying, Don't worry about nuclear war. Don't be bluff.

Don't be this. Don't be that. We've never heard such obtuseness in the entire nuclear age. Starmor, Macron. Pathetic. Absolutely dangerous and pathetic. Their publics know it, by the way. These leaders are despised.

But this is our institutional setup at this moment. Absolutely amazing and terrifying. I'm somewhat glad to hear about your optimism in general about Europe's possibility of having somewhat a resembling of a good future. But let me say, you know, as an economist, you start out with a kind of list of assets. You look at human capital, you look at physical infrastructure, and so forth, you look at cultural assets. Europe, to my mind, is at the top of the list. So, in other words, it's not that any solution is beyond Europe in terms of physical quantities, resource access, economic know-how.

Not at all. But of course, you can squander resources for decades or generations. This is known throughout economic history. And so it's no guarantee. It's just saying that the potential is still all there. But I think a key challenge, as you mentioned, was the assumption all after the Cold War that America was the only game in town. This was the approach they had to Russia as well.

Biden even has this speech he makes where it effectively points out that the worst possible deal we give to the Russians is the only deal they have, so along the lines of Brezinski, so we can continue to push into Eurasia, make Russia less and less relevant. So effectively managing its decline. But this is also something you see. I read a book written by the Hungarian head of the central bank and he was kind of pointing out the same that in the 90s effectively our policy was due as America says

because America was the only game in town but now that it's the distribution of power has shifted America becomes more of a desperate declining empire than you know you diversify you you know in order to extent it serves Hungarian's national interest but in Europe I'm not sure. What's the root of the problem? Because I know Europe kind of rested after the Cold War

on these two pillars of stability, that is NATO and EU, ideally would have a third leg to stand on, which would be some pan-European security architecture with the Russians. But we never got to this, obviously. But we got close, Glenn, of course, with OSCE, with the Organization of Security and Cooperation in Europe.

It was exactly in the direction of a pan-European, excuse me, security arrangement. And it was on its way. Of course, the United States hated it and broke it, because it was not NATO. It was European. It was in the vision of Gorbachev and Yeltsin, both of whom I knew personally and advised who wanted a common European home.

As an economist, I would say my first rule, my lemma, my basic theorem for any country is is be nice to your neighbors, trade with your neighbors. That means that Europe and Russia should be an integrated economic space. This is obvious. This is also one of the points that the United States, deep state, always resisted. Don't let Germany and Russia get too close to each other. It makes us irrelevant. It makes them quite powerful.

So it's actually a resistance. It's a divide and conquer. rather than an economic development perspective. My perspective is economic development. I want people to be prosperous all over the world. It is the least my mindset is the least divide and conquer. I can't stand that idea because everything about real economics is win-win, not win-lose. It's the larger the trading area, the larger the space, the larger the market, the scope of the market, the more innovation, the more economic advance, and so forth.

So Europe should trade with Russia. Europe should trade with China. These are the two opposites of what the United States is pushing Europe. The United States is pushing Europe, obviously, to break completely with Russia, indeed to go to war with Russia. And second, to break with China. This is mind-boggling. It's so obvious that Europe's vocation is to trade with China and build the, you know, the Eurasian system and build the Eurasian infrastructure.

Europe has what they call the Global Gateway Program, which is supposed European investments, a European investment bank and others, to finance infrastructure in Europe's neighborhood, if you will. China has the Belt and Road Initiative, a wonderful initiative to finance 21st century infrastructure, fast rail, renewable energy, 5G, across Eurasia. My proposition is very basic. Europe should invest from west to east. China should invest from east to west. The two should meet in Samarkand, have a Eurasian landmass that is unified with modern 21st century infrastructure. It's 70% of the world population. It's the key

to prosperity not only for Europe and China and the rest of Eurasia, but for the rest of Eurasia, but for the whole world. And this is absolutely within reach. But the U.S. is so stupid, except I can only say that Trump is probably going to cause somebody in Europe to rethink this, I hope. Because Trump, with his tariffs and his trade wars, and he's going to break apart our North American market he announced today, with all of this, Europe could say, hmm, this is not really what we bargained for, we better think more clearly again. And if so, you patch up with Russia. It's not impossible.

This is one of the lessons that I learned from President John F. Kennedy's writings and speeches over listening to them and thinking about them and writing about them over decades when he says, we must remember there are no such thing as permanent enemies. Hostility today is a fact, but it is not a ruling law. Europe needs to rethink. By the way, one of the problems in Europe, absolutely. I had a little hand in it indirectly. I advised many of the Eastern European countries on their economic reforms, Poland, Slovenia, Estonia.

I have an high award, a civilian honor from Estonia, for helping them to basically designing their introduction of their national currency. in 1991, 1992. But these countries need to understand. Rather than baiting Russia as little countries in the Baltic region, rather than hate talk, rather than tweeting, Russia, Delenda asked, Russia must be destroyed and so forth, as Baltic leaders are doing, come on, are you kidding. don't poke your neighbor, make peace. And I would say this to the polls. I did a lot for Poland. Again, I have a very high civilian honor from Poland because I got their debts canceled.

I helped to accelerate their membership in the European Union. I helped to design their economic reform, which produced 30 years of rapid economic growth. But come on, anti-Russia is not your vocation. You're a neighbor. Trade with Russia. Are you kidding? And this is something that they do not understand because they reverted back to the history of the 1920s and 1930s, hate speech, bad-mouting, vulgarities, and you don't survive in a world that way. You survive in a world with the trade, diplomacy, and normal relations with your neighbors.

If you have an irascible next-door neighbor, don't taunt him. Light fires in his garage. steal things from the garage, aim missiles into them, make noise at night. No, you try to be calm, peaceful. If you have luck and the irascible neighbors down the block, you don't try to move in next to them. And so Ukraine as neutral was Europe's best friend. Are you kidding? The idea that you have to put NATO right up against the Russian border? This is crazy, completely crazy.

But I know my American colleagues, some of them are even my students or former students. It's unbelievable how they think. They must listen to you very closely in Hungary because I heard an awful lot of the same things that you've been saying there. One of the points that they made was that they are Europeans. They are committed Europeans. There's no talk about leaving the European Union in Hungary, by the way. They think that Brexit was a terrible mistake that the British did themselves. But they also believe that Europe's destiny, Europe's vocation should be to be open to the world.

And Hungary, for example, has gone out of its way to develop good economic trading links with China. They have attracted a lot of investment from China. They're interested in Chinese electric cars. They don't seem to have this fear of China. and Russia and all of the other places that we seem to find amongst so many people in Europe today. And they regard this as rational decision-making and the words rational and realistic, we're words I heard all the time. They see this, these relationships, exactly as you said, trade relationships,

as ultimately win-win solutions. for Europe, not in any conceivable sense, anti-American. They are, they like the United States. They reminded me many times that they fought the Russians six times. So they have plenty of history where the Russians do. They're not predisposed to be Russian allies or anything of that kind. So they don't understand. That was the major takeaway I got.

They don't understand why Europeans cannot say, see this. It is so obvious to them. They look at the map. They understand the map. They understand their history. They have a realistic vision of their history of a thousand years of Magyar civilization on the Danube. And they're calculating properly. They want to trade with their neighbors. They have a vision that Hungary is going to prosper with connectivity, is how they put it. connectivity of east and west, connectivity with the Middle East, connectivity with Turkey, with which they had quite a long and difficult relationship and connectivity with China. It all makes good economic sense.

The irony of all of this is that we are in a period of, of course, the most remarkable technological advance. in history were solutions that seemed impossible just years ago are staring us in the face, whether it's quality of education or health care or clean energy or fast to transport because of the AI revolution. So many things can be done. And what are the European leaders talking about? Preparing for war. It's completely crazy.

Again, you know, Trump is going to usher in a period of confusion, I'm sorry to say, because if you look at the people that he's picked, some are good friends of mine and very wise and understand we need peace in Ukraine, and I'm counting on that. I think that is likely, and that's excellent, and I think that's likely to come. But there's a lot of confusion as well. Utter protectionists, very bad economics, some real mixed-up ideas as well. So there's going to be a period of confusion no matter what. This is the need and time for Europe to rethink and to rethink quietly without beating these war drums, to rethink sensibly.

to understand China for what it is, which is an enormously successful, great civilization, that after a harrowing history from 1839, the first year of the first opium war, until 1949 was abused and invaded repeatedly by the West and by Japan, and has found its footing, especially after 1980, and become one of the great powers of the world, but not a threat to anybody, just a country that knows its historic place in the world and aims to have that role peacefully, cooperatively, and globally in the 21st century. This is a great opportunity for us, not a threat. It's all misunderstood. I've gone to China probably hundreds of times in the last 43 years.

It is absolutely being treated with the same utter naivete and simplicity by U.S. analysts of all of the stupidities that took place vis-à-vis Russia, and it's extremely dangerous. So I say, again, Europe needs to use this moment to think. think hard. And by the way, Europe can have some wonderful diplomacy. The world loves to come to visit Europe. It is touristic destination number one in the world, I think for good reason. And it is cultural capital. It is prized throughout the world. Just as a tiny example, Biden, when he was still compass mentis, I think, summoned Prime Minister Maloney to Washington to dress Italy down for being part of the Belt and Road Initiative.

And rather pathetically, she returned to Rome straight from Washington and announced that Italy would pull out of the Belt and Road Initiative. First, it could not be cruder. Who's the boss? Who's on the carpet? And who's calling the shots? It was pathetic. I couldn't even imagine a sovereign country doing that,

even a tiny sovereign country, much less Italy with its history 10 times longer than the United States. Okay, put that aside. China loves Italian goods. China loves Italian fashions. China loves Italian cuisine. China loves tourism in Italy. Italy is going to break all of that because Joe Biden says to get out of the Belt and Road initiative. Are you kidding?

So this is why I'm not completely pessimistic because what Europe has been doing is so stupid, so naive, so wrongheaded, so self-destructive. That sometimes you can rethink. And it hasn't brought applause to the public. These leaders are the least popular leaders in the whole world. The public knows. Look at the elections that just took place in Romania. Once again, the candidate that calls for peace with Russia comes out in first place. The people are much smarter because they're not called to the carpet in Washington. They're just looking out for their own interests. And that's what Europe ought to do. So, Professor Sachs here currently in Lisbon, and you have a day full of meetings, so we're not going to take that much more of your time. So I just want to thank you. Yeah, thank you so much again for your time. It's always great to speak with you guys. Good.

We'll do it again soon, I hope. We certainly will, and also with Alex at the Gerant. Wonderful. It's probably been Gerant too. Take care, everybody. Great. Bye-bye.