Adam Tooze, author of Crashed and one of our most popular previous guests, discusses the wider political and economic context of Britain's Brexit crisis, including Italy, France, Germany, China, and the US. Topics include the Italian economy, Macron's position, the relationship between the Federal Reserve and the US government under President Trump, the current situation in China and its potential global effects, China's nationalist aspirations and their impact on Chinese-American relations, British politicians' choices in the Brexit era, and potential solutions for Brexit.
The balance in the Italian coalition and the league's increasing influence could have negative implications for the European project and cooperation on issues like the refugee crisis.
Macron's domestic political weakness and his influence on French-German relations may compromise the future of Europe and EU integration.
Deep dives
The Italian Situation and European Project
The Italian situation has changed since the last podcast episode. The immediate crisis has been postponed, but the warning signs of the Italian economy have been flashing red. The balance within the coalition is also concerning, as the league seems to be gaining more influence over the compromise and policy decisions. This could have negative implications for the European project and cooperation on issues like the refugee crisis.
Macron's Domestic Political Weakness and Germany's Attitudes
The position of Macron is critical to the future of Europe, as he is seen by EU federalists as the best hope for integration and progress. However, his domestic political weakness, as seen in low approval ratings and the yellow vest protests, may affect Germany's attitudes towards him and the EU. There are different calculations and suspicions about Macron's ability to lead, and his influence on French-German relations and the future of Europe may be compromised.
The Vulnerability of the German Economic Model
The German economic model, reliant on high-valued exports of capital goods to emerging markets, is particularly sensitive to a slowdown in the Chinese economy. There are concerns about a potential German economic slowdown or recession, as well as the potential appreciation of the Euro against the dollar, which would negatively impact German exports. The European Central Bank's plan to end the bond purchase program and discuss rising interest rates may not be ideal for the German economy.
The Dysfunctional Nature of British Politics and Brexit
British politics is viewed as dysfunctional and stuck, with no room for maneuver or concessions from the European Union. The EU sees little point in making concessions to a malfunctioning political system in Britain. The European Union has little flexibility on key issues, such as the Irish border, and there is little scope for negotiation. The power dynamic favors the EU, as the worst-case scenario for them is not as dire as it is for the UK, and they have little incentive to move from their position.
A special extra episode for this week with Adam Tooze, author of Crashed and one of our most popular previous guests. He takes us through the wider political and economic context for Britain's Brexit crisis, from Italy to France to Germany, and beyond to China and the US. Plus he explains why Brexit is one of the great calamities of his lifetime.
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