By Gideon Rachman
At the beginning of this year, Angela Merkel had a good claim to be the most successful politician in the world. The German chancellor had won three successive election victories. She was the dominant political figure in Europe and hugely popular at home.

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  © Getty

By Henry Foy in Warsaw

Pride and relief mixed on the streets of Warsaw the morning after Polish prime minister Donald Tusk’s election to the top of Europe’s political hierarchy, after seven years leading a country that is unsure of whether he would have remained in charge.

Mr Tusk’s selection as the new President of the European Council late on Saturday gives Poland the most important global political position in its history and confirms its rise to the continent’s top table.

But with his domestic ratings in the doldrums approaching a general election that his party will likely struggle to win, most are happy to wish him well on his way.

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Attempts on Monday by Russia to shift the blame for the shooting down of Flight MH17 over eastern Ukraine away from the separatist rebels have had a few western analysts scratching their heads.

The Russian military gave journalists a high-level and highly detailed briefing of its take on the situation in the area where the Malaysian airliner was shot down. The presentation came just as the first apparent hard evidence was emerging from the crash site that the jet was hit by a large surface-to-air missile, similar to an SA-11 launched by the Buk-M1 system. Read more

The focus in last week’s European elections was on the seismic waves of the distinct currents of Euro-populism and reaction that “earthquaked” to the top of the polls in France, Britain (or at least England), Denmark and Greece. But arguably the most intriguing insurgency was Podemos (We Can) in Spain, a phenomenon worth examining outside the swish and swirl of populism.

Much of what I have seen written about Podemos has them “coming out of nowhere” – a cliché employed by politicians and analysts that means “we didn’t see them coming”. Yet a three-month-old party with a budget of barely €100,000 shot into fourth place with one and a quarter million votes and five seats in the European Parliament – similar to Syriza, the Greek left-wing party they plan to hitch up with.

The eruption of Podemos and its compellingly outspoken leader, Pablo Iglesias, has already triggered the fall of Alfredo Perez Rubalcalba, the Socialist secretary general who has presided over the party’s worst electoral performance since democracy was restored in 1977-78. But while obviously a rising current of a new left, Podemos could be a broader catalyst for political change in Spain and beyond. Read more

By Amie Tsang and Gavin Jackson

After a decade of negotiations, Russia managed to wrangle out a gas deal with China – and just in the nick of time.

Europe has been looking to extricate itself from its dependence on Russian energy, while Putin wants to show Europe that it has friends – and customers – in the east.

When China’s largest oil company signed up to a 30-year deal to buy from Gazprom up to 38bn cubic metres of gas per year from 2018, it helped the Russian gas company to make its first shift away from the west.

Europe’s demand for energy is critical to the Russian economy: gas and oil exports make up some 52 per cent of Russia’s government budget, which has slipped back into deficit in the last two years. So Russia needs to find another market for its energy exports. Read more

The differing responses to the Ukraine crisis
This week, German Chancellor Angela Merkel is in Washington for talks with President Barack Obama, and Ukraine will top the agenda. Washington has led the way on sanctions, imposing asset freezes and travel bans on dozens of senior Russians and scores of companies, in an attempt to show Russia’s President Vladimir Putin that his interference in Ukraine will bring rising economic costs. The EU on the other hand, seems deeply resistant to tougher economic sanctions, given the much more important ties between Europe and Russia. In this week’s podcast, Ben Hall, world news editor, is joined by Geoff Dyer, Washington correspondent, and Stefan Wagstyl, Berlin bureau chief, to discuss how the two leaders should handle the escalating situation

About twelve months ago, as I was travelling across the Northeast of Italy during the electoral campaign, I went hunting for evidence of mounting euroscepticism across voters. Overall, my search was rather unsuccessful. Italy’s long love-story with the euro and the EU more generally was certainly under strain, but its end did not look in sight. By and large, the people I spoke to continued to consider Brussels a source of economic stability and peace.

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In his address to the World Economic Forum, the prime minister was his
fluent self. But there was also an obvious tension between his embrace of
a globalised and open UK and his determination to curb immigration.

This led to a very pointed question from a Swedish MEP on precisely this
contradiction. Mr Cameron defended himself by pointing to the case for
curbing access of immigrants from the EU to welfare benefits and the need
to recognise the challenges created by the huge income gaps between some of
the new members and the old members. Read more

When President Francois Hollande steps up to the podium in the splendid Elysee Palace at 16.30 Paris time, 15.30 GMT on Tuesday for the third formal press conference of his 20-month old presidency, the first question on everyone’s lips is likely to be about the revelations of his apparent affair with a film actress.

How he deals with this embarrassing issue –Valerie Trierweiler, his partner and France’s first lady, remains in hospital recovering from the shock – will inevitably overshadow an event originally intended to concentrate on the economy.

But the financial markets, business leaders and France’s European partners will nonetheless be watching most closely what Mr Hollande has to say about his New Year resolution to inject some much-needed vitality into the French recovery, which is lagging behind those of the country’s biggest neighbours. Read more

By Gideon Rachman

What defines the west? American and European politicians like to talk about values and institutions. But for billions of people around the world, the crucial point is simpler and easier to grasp. The west is the part of the world where even ordinary people live comfortably. That is the dream that makes illegal immigrants risk their lives, trying to get into Europe or the US.

By Luisa Frey
♦ Spaniards may have less faith in European institutions than before, but no eurosceptic parties have risen in the country, writes the FT’s Tobias Buck.
The higher the fire burns in Middle East, the more the US seems intent on turning away, says FT columnist Philip Stephens.
♦ As part of a soviet-inspired urban plan, superblocks are being built in China. The gated compounds in suburbia have residential towers and houses inside them, but force the new urban middle-class to drive back to the city for services.
Rising anti-semitism is bringing fear to Europe. A third of European Jews are considering emigration because they do not feel safe in their home country, according to The New York Times.
♦ Local newspapers called Wednesday’s breakthrough in peace talks aimed at ending Colombias’s half-century-old guerrilla war “historic”. But many Colombians are sceptical, reports the Global Post
Tens of thousands of middle-class Syrians are trying to get to Europe’s wealthy northern states: “Whether they wind up in Nordic comfort or desperate straits on the fringes of Southern Europe is often a matter of luck”. Read more

♦ Gideon Rachman writes about how “the big danger to the European single currency is that the political consensus that underpins the euro could come unstuck” and next year’s European parliament elections could be a breakthrough moment for the “European Tea Party”.
♦ Saudi Arabia’s intelligence chief has said that he plans to scale back cooperation with the US to arm and train Syrian rebels in protest against Washington’s policy in the region, raising tensions after Riyadh’s decision to renounce a seat on the UN Security Council.
♦ Norman John Gillies, the last surviving St Kildan, died at the end of September: the Economist looks back at the man’s life and his memories of life on an island 110 miles off the Scottish coast.
♦ Vigilante groups are fighting back against Boko Haram in Nigeria.
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By Gideon Rachman

America’s debt-ceiling crisis achieved something quite remarkable. It made the EU look well governed by comparison. Both the EU and the US systems are weighed down with checks and balances that make it hard to get things done. But Europe currently has one thing going for it that America lacks. All the most important decision makers in Brussels are committed to making the system work. There are no Tea Party types who regard compromise as a betrayal.


The first official German election results are in and Angela Merkel’s Christian Democrats enjoyed a huge swing in the polls, but remain five seats short of achieving the first absolute majority since 1957.

That fires the starting gun for coalition talks, raising some interesting questions, especially after the chancellor’s existing coalition partner, the liberal Free Democratic Party, has crashed from its best-ever election result in 2009 to parliamentary annihilation, failing to reach the five per cent threshold. Read more

By Catherine Contiguglia
♦ “If Germany’s economic model is the future of Europe, we should all be quite troubled,” writes Adam Posen, as growth built on exports and low wages is stifling productivity and depriving Germany’s workers of what they have earned.
♦ People must get over their initial annoyance with how the US administration has handled intervention in Syria and look to history to see the consequences of inaction in other stricken cities, says Philip Zelikow.
♦ The Assads are keeping up appearances as their country becomes further embroiled in civil conflict, looking jovial in public and unfazed by the increasing threat of an attack from the West.
♦ Rather than boxing Barack Obama in, the Syria crisis has offered multiple opportunities for increasing presidential power, as a negative congressional vote will do little to restrain use of military force, while an approval could bestow new powers on future presidents.
♦ There are a lot of parallels between Obama’s current drive for military action in Syria and Eisenhower’s experience in the lead up to Vietnam, laid out by Jeffrey Frank in a comparison of the rhetoric and policy stances of both presidents. Read more

There was something poignant about Alexei Navalny‘s speculation that he might get a suspended sentence on trumped-up charges of theft and embezzlement. The Kremlin does not do subtlety and it does not do mercy. Mr Navalny, who coined the phrase “party of crooks and thieves” to describe Vladimir Putin’s United Russia party, knows that better than most. And, in the event, the sentence announced today was five years in prison. More than enough to take Mr Navalny out of politics, and to send a clear message to anybody who dares to try to challenge Vladimir Putin. Read more

Sampling wine at a Shanghai wine fair (AFP)

As the China-EU solar dispute deepens, oddly enough, wine has been brought into the fray.

Here are seven interesting factoids you may (not) know about China and wine.

1. Chinese investors have bought up 30 French chateaux vineyards over the past four years and they aren’t stopping at that. There’s another 20 deals in the pipeline. Will they be affected by any probe?

2. Chinese wine importers were prominent bidders in the recent Elysee wine sale.

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♦ The FT argues today that Apple’s decision to borrow money in order to fund a dividend, despite being one of America’s most liquid companies, indicates a need for reform to the US tax system.
♦ Despite impressive economic growth, improvements in living standards in Malaysia have lagged behind those of its neighbours, building pressure for change ahead of Sunday’s election.
♦ North African governments are trying to stem the flow of young Islamic militants, heading to Syria to fight the regime.
♦ President François Hollande is struggling to please everyone and, in fact, anyone – leading to concerns that France might become the next European problem child. After a draft paper by the president’s party described Angela Merkel as “selfish”, Mr Hollande has had to reassure her that he still believes in a Franco-German relationship.
♦ William Finnegan discusses his article on Mark Lyttle, a US citizen from North Carolina who was deported to Mexico despite ample evidence that he was an American, and the soaring number of deportations.
♦ Dzhokhar Tsarnaev has told the FBI that he and his brother considered suicide attacks on July 4, but instead decided to strike on Patriots’ day.
♦ Politics and vetting processes mean that Barack Obama has yet to fill some long-empty posts in his cabinet.
♦ Evangelical Christians in California have struck up a debate over whether yoga is a religion or not – where is the line between the body and the soul?
♦ SAYA, a Jerusalem-based design studio, is trying to provide a architectural resolutions to territorial disputes: “you can’t stop terror with just a fence. We need to imagine structures that can build hope instead of fear and resentment.”
♦ When Alex Christodoulou tried to quit his job for life in the Greek public sector, he found the process harder (and more labyrinthine) than he ever thought it could be, especially when the government had committed to taking thousands of workers off the public payroll. “They wanted to rehire him so that they could fire him and include him in the number of public servants being laid off to appease Greece’s international creditors”.
♦ In a review of The Impossible State: North Korea, Past and Future, Richard Lloyd Parry argues against the idea that North Korea is a “zombie nation”, but wonders if the idea that the country is in a state of “political undeath” doesn’t perhaps suit some other states.
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