In a spirit of multilateralism, a rapprochement is coming among U.S., Russia, China and Europe. By DAVID MARSH EUROPEAN MARKETS COLUMNIST LONDON (MarketWatch).
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The perpetrators of Friday’s murderous attacks in Paris may have wished to drive a wedge through the international state community. In fact, one of the principal consequences of the massacre, as the weekend response of the Group of 20 leading economies showed, will be rapprochement among the U.S., Russia, China and Europe.
In the financial sphere, Friday’s approval by the International Monetary Fund approval by the International Monetary Fund of the Chinese renminbi’s USDCNY, +0.0502% inclusion in to the special drawing right marks a broadening and deepening of the multilateralism under which the Fund was established seven decades ago. Friday’s decision, expected to be backed by the IMF’s board on Nov. 30, represents the first time that a currency of a developing country becomes a de jure reserve asset — official recognition of a momentous shift in the world power balance.
International coordination may turn out to be synonymous with strengthening individual states and shoring up “strong leaders” who may value security more than human rights.
Weekend talks on Syria between U.S. President Barack Obama and Russian President Vladimir Putin at the G-20 in Antalya, Turkey, underline how two countries divided by Moscow’s invasion of Crimea are sinking their differences in a joint fight against the ISIS terrorist movement.
In similar vein, expected U.S. approval of the SDR change may herald American efforts to draw closer to Beijing in security and military issues, lowering emphasis on discord over cyberspace attacks or tension over Asian territorial claims.
The IMF’s ruling that the renminbi is “freely usable” and thus can be included in the SDR from next October — despite the persistence of some Chinese capital controls — has geopolitical parallels. Lending weight to the IMF statement, capital flowed back into China last month for the first time since Beijing allowed the currency to fall in August as part of IMF-ordained efforts to integrate China more closely into the global economy.
Paris Attacks Addressed at Group of 20 Summit(1:51)
World leaders gathered in Antalya, Turkey, for the Group of 20 Summit, where they addressed how they planned to move forward after Friday’s attacks in Paris, France. Photo: AP
Adjustment to global political realities may require departure from fully fledged ideals of Western liberalism. International reaction to what French President François Hollande correctly called an act of war portends deep-seated changes for Europe. International coordination may turn out to be synonymous with strengthening individual states and shoring up “strong leaders” who may value security more than human rights.
The response east and west of the war zone of Syria and Iraq will significantly weaken the always-overstated concept of a border-free Europe that has plainly contributed to establishment of militarily organized terrorist cells within the EU. The aftermath of Paris will require a radical shake-up of European immigration procedures, reinforcing nationalist hardliners whether in Berlin, Paris, Budapest or Ankara.
In Germany, where Chancellor Angela Merkel has come under fire for well-meaning but naïve statements extending an over-welcoming hand to immigrants, the center-left coalition is likely to succumb to pressure for border controls. Finance Minister Wolfgang Schäuble has moved closer to an outright bid to dislodge Merkel, launching a thinly veiled attack on her last week by saying: “You can trigger avalanches when a rather careless skier goes on to the slope … and moves a bit of snow.”
Turkey’s President Recep Tayyip Erdogan, Hungarian Prime Minister Viktor Orbán and Polish party chief Jaroslaw Kaczynski are all leaders likely to benefit from a hardening of nationalist sentiment in Europe.
Hollande has no choice but to move to the right to ward off a growing offensive from former President Nicolas Sarkozy and National Front chief Marine Le Pen. Hollande’s Socialist party faces a further setback in French regional elections next month and the presidential poll in April-May 2017 where, on present showing, Le Pen will win the first round and lose the run-off vote to a right-wing mainstream candidate.