Greetings. The biggest news around the world is sadly more about life and death — in Ukraine, the Middle East and more — than about livelihoods. But there is important economic news too: we now have a more spelt-out economic policy programme from Kamala Harris and a policy platform from Michel Barnier’s new French government, which has only weeks to draw up a budget.
There have also been some fascinating new straws in the wind of global economic fragmentation. The week before last I asked what countries in between the global economic blocs would do if they were forced to choose between those blocs, and what sort of policies the blocs themselves could pursue to shape their choices. But as one reader has reminded me, I should justify the premise of those questions. Why would countries have to choose between blocs at all? How would they be forced to? Today I attempt some answers to that.
I am writing this from Berlin, where there is a palpable desire to “keep doors open” — with China above all, but more generally with just about everyone. As one businessperson told me, their company could not afford to cut off the Chinese market — then modified their argument to “well we could, and take the loss, but what good would it do?” It illustrates well that there is still much corporate resistance, in Europe at least, to downgrading economic ties even with geopolitical adversaries, and that it is very tempting to think that what is good for your bottom line is also virtuous politics.