Fortnightly Review & Analysis: USA, Russia & EU (Vol 2 Issue XIV)

USA

Reversal over Obamacare

President Donald Trump marked six months in office on July 20. It has been a tumultuous presidency so far, mired in accusations of collusion with Russia, revelations about a “secret” meeting with Vladimir Putin, and having failed to achieve his cornerstone campaign promise of healthcare reform.

Trump suffered a major setback when his goal to repeal and replace the ‘Obamacare’ failed to get through the Senate. Trump blamed Democrats and a few Senators from his own party for the collapse of the latest Republican drive to repeal Obamacare - one of his key campaign pledges. 'We were let down by all of the Democrats and a few Republicans. Most Republicans were loyal, terrific & worked really hard. We will return!' Trump tweeted. He called for ending the filibuster provision of the Senate, under which for passage of a certain bill, they need 60 votes instead of the simple majority 51 votes in the 100-member Senate. 'The Senate must go to a 51 vote majority instead of current 60 votes. Even parts of full Repeal need 60. 8 Dems control Senate. Crazy!' he said.

While the opposition Democrats insisted that they would vote against any move to repeal Obamacare, Vice President Mike Pence said that the Trump Administration would keep on trying until it achieves its goal. "Obamacare has failed and Obamacare must go," he told a Washington audience. Pence also said he and Trump fully support the Senate Majority Leader’s decision to move forward with a bill that first repeals Obamacare and gives Congress time to work on a new healthcare plan that will start with a clean slate.

Russian Meddling in Trump’s Election

CIA Director Mike Pompeo, Homeland Security Secretary John Kelly and White House Homeland and Counterterrorism adviser Thomas Bossert all said they backed the conclusion that Russia carried out a campaign of cyberattacks and fake news to influence the election in favor of Trump.
According to Bossert, "There is a pretty clear and easy answer to that and that is yes.'' He further added that there was no reason to doubt the findings. Pompeo went even further, saying Russia has been meddling in U.S. elections for years, not just in 2016. The affirmations came during often animated discussions about the country's cyber vulnerabilities at the annual Aspen Security Forum. Kelly also acknowledged the intelligence community's findings that Putin orchestrated the campaign to hack Democratic political organizations and leak stolen material to websites such as WikiLeaks.

In the meanwhile, according to various news reports that first were mentioned in the Washington Post, on 26 July, FBI agents raided the home of former Trump campaign manager Paul Manafort, seeking evidence of overseas financial transactions to find complicity between the Trump campaign and Russia. The pre-dawn raid reportedly resulted in officers "seizing documents and other materials related to the special counsel investigation of Russian meddling in the 2016 election.” According to the Washington Post, documents and other materials are believed to include tax documents and foreign banking records. The Post says the raid marks an "aggressive new approach" by special counsel Robert Mueller, who is tasked with investigating possible links between Trump's campaign and Moscow.

The New York Times says that the raid came the morning after Manafort was interviewed by the Senate Intelligence Committee, during which "Manafort answered questions and provided investigators with notes from a 2016 meeting between Trump campaign officials and Russians claiming to have damaging information on Hillary Clinton."

Lawyers for President Trump have been accused of looking for ways to trip up an investigation by special counsel Robert Mueller into Russia's influence on the presidential election, the Washington Post reported. According to the Post, the president's authority to grant pardons is among strategies the lawyers are discussing. The president has asked his advisers about pardoning aides, family members and himself, the news organization reported. The Post based its report on people familiar with the developments. The report comes as the president's approval ratings continue to drop and as the scandal into the role Russia played in the race for the White House widens.

U.S. Sen. Mark Warner, a Virginia Democrat and vice chair of the Senate Select Committee on Intelligence, issued a statement saying it was "disturbing" that Trump is exploring the possibility of pardons. "Russia's interference in the 2016 elections was an attack on our democracy," Warner said. "The possibility that the president is considering pardons at this early stage in these ongoing investigations is extremely disturbing. Pardoning any individuals who may have been involved would be crossing a fundamental line."

Jared Kushner says he did not collude with Russia

Donald Trump's son-in-law Jared Kushner has denied any collusion with Russia in the 2016 presidential campaign, telling reporters after a closed-door Senate hearing: "All of my actions were proper." He added: "I did not collude with Russians, nor do I know of anyone in the campaign who did."

Kushner also released an 11 page statement laying out four meetings with Russian officials to coincide with his appearance before the Senate intelligence committee. He took no questions from reporters. This was a revelation as members of the Trump administration had previously denied any Russian contacts during the campaign and transition, only for reporters to unearth damaging evidence to the contrary.

Among the "damaging" details that Kushner confirmed, the Los Angeles Times says, was a proposal to set up private communications with the Russian embassy outside usual channels. He also said his initial failure to report the four meetings was the fault of an aide, who had mistakenly submitted the necessary paperwork before it was complete!

Europe

The outcome of Germany’s September general election seems to matter for the rest of Europe. Germany’s major political parties are all various shades of pro-European. But they have different views about how to reform the Eurozone, and on what kind of foreign policy Germany should pursue. Six parties are set to enter the Bundestag in September: the conservative Christian Democrats (CDU/CSU), the Social Democrat Party (SPD), the liberal Free Democrats (FDP), the Green Party, the far-left party Die Linke and the far-right Alternative for Germany (AfD). None will be able to govern on their own.

Chancellor Angela Merkel has ruled out CDU/CSU coalition government with Die Linke and the AfD, but has otherwise kept her options open. Voters prefer a ‘grand coalition’ with the SPD, closely followed by a CDU/CSU-FDP government. But the Green party, standing at a similar level in the polls as the FDP, is also keen to enter power. Based on current surveys, SPD candidate Martin Schulz could become chancellor only if his party went into coalition with the Greens and Die Linke.

What would these differing coalition options mean for the prospect of Eurozone reform? French President Emmanuel Macron wants a common Eurozone budget, a European finance minister and a Eurozone parliament, and thinks Germany and the EU should boost investment. The CDU/CSU, however, is highly skeptical of France’s plans. It places a premium on adherence to the Eurozone’s fiscal rules and opposes proposals that could usher in debt mutualisation. But Merkel knows that Germany and France need to work together closely to provide the leadership Europe needs. Her next coalition partner will determine whether she has enough leeway to compromise with the French. If the SPD can swallow its reservations about being the junior partner for another four years, a renewed grand coalition could open the way for some flexibility by the Germans in Merkel’s final term as both Schulz and current foreign minister, Sigmar Gabriel, support much of Macron’s approach.

What will the election mean for Germany’s foreign and security policy? Under Merkel, Germany has for the first time committed to spending 2 per cent of GDP on defence. She has stood up for sanctions against Russia, overseen the deployment of German soldiers in Lithuania and Mali, and backed initiatives to strengthen EU defence policy. These steps signal a departure from the German abstentions of the past. But many voters remain skeptical of a greater military role for Germany, and question NATO’s involvement in the conflict with Russia.

In a grand coalition, the SPD would probably keep control of the foreign ministry. The Social Democrats are opposed to increasing Germany’s defence budget, which they see as an attempt by Berlin to cosy up to the United States; Schulz and Gabriel instead want more money for development aid. Leading SPD figures have also criticised NATO’s deterrence activities in Central and Eastern Europe; they are in favour of de-escalation and dialogue with Russia. The SPD is using defence as a campaign issue and might well soften its stance after the election, but it will continue to oppose a more muscular German foreign and defence policy.

Indications are that the Greens would be an easier partner for the CDU when it comes to defence and security matters. While the Greens reject calls for more defence spending, they have condemned the SPD for its criticism of NATO, support sanctions against Russia, and are open to military interventions “as a last resort”.

While Angela Merkel looks set to be re-elected in September, Europe needs to look beyond who becomes the next German chancellor – due to so many parallel developments taking place, and especially the Brexit negotiations.