Crisis of Confidence: Rattling Democracies
In this week’s edition, I discuss the political turmoil in Germany, France, and South Korea, the visit of the aircraft carrier Charles de Gaulle, the G7’s outreach to the Indo-Pacific, and Indian-Italian ties.
G7 Ministerial Meeting on Foreign Affairs
German chancellor Olaf Scholz lost a confidence vote in the Bundestag yesterday, receiving support from only 207 lawmakers, well below the required 367. This development has set the stage for early federal elections, tentatively scheduled for February 2025.
The vote followed months of internal discord within the "traffic light" coalition of the Social Democrats (SPD), Greens, and Free Democrats (FDP). The coalition struggled to find consensus on key issues, with the FDP rejecting tax increases or changes to Germany's strict debt limits, leading to policy gridlock.
In the interim, President Frank-Walter Steinmeier must decide whether to dissolve the parliament, a decision expected after Christmas. While Germany’s Christmas markets might still be well-lit and bustling with festive cheer, the gloomy political atmosphere casts a shadow over the holiday season.
France’s New Prime Minister
While French President Emmanuel Macron was basking in the glory of the rejuvenated Notre Dame, his government was up in flames. On December 4, 2024, the National Assembly passed a motion of no confidence, leading to Michel Barnier's resignation—the first successful no-confidence vote in France since 1962. In response to the collapse of the government, President Macron appointed François Bayrou, a veteran centrist politician and leader of the Democratic Movement party, as the new Prime Minister.
Bayrou is a longstanding ally of Macron and has previously held ministerial positions, including Minister of Justice and Minister of National Education. The outgoing PM had proposed austerity measures to address France's budget deficit, which exceeds the European Union's permissible levels. These measures faced substantial opposition across the political spectrum, notably from Marine Le Pen's far-right National Rally and left-wing factions.
Bayrou must secure parliamentary approval for a budget to address the fiscal deficit, which stood at 5.5% in 2023 and is projected to reach 6.3% in 2025. To make matters worse, Moody's has downgraded France's credit rating from Aa2 to Aa3, citing political instability and concerns over public finances. This downgrade may increase borrowing costs and pressure the government to implement effective fiscal policies.
South Korean Woes
In a sudden blow to democracy, President Yoon Suk Yeol declared martial law earlier this month, citing threats from "anti-state forces." The move, unseen in South Korea's recent democratic era, led to immediate domestic and international backlash. Within hours, the National Assembly convened, voting to annul the martial law declaration, and President Yoon rescinded the order.
Following the incident, opposition parties initiated impeachment proceedings against President Yoon, accusing him of overstepping constitutional boundaries. However, the impeachment motion initially failed due to a boycott by ruling party lawmakers, preventing the necessary quorum.
However, in a dramatic turn of events, the National Assembly impeached the President this week, citing insurrectionary acts undermining the constitutional order. Prime Minister Han Duck-soo has assumed the role of acting president. The Constitutional Court is now deliberating on whether to uphold the impeachment, a process that could take up to 180 days. If the court affirms the impeachment, it would lead to President Yoon's formal removal and necessitate a national election within 60 days.
The acting leadership under Prime Minister Han faces the daunting task of maintaining governmental functions, ensuring national security, and restoring public confidence amid this constitutional challenge.
What’s common?
Interestingly, in all three cases, contentious budgetary policies created a crisis of governance. This is telling of the global headwinds facing the world economy today- trade uncertainties, inflationary pressures, and fluctuating commodity prices are straining national economies, leaving governments with limited room to manoeuvre. As fiscal pressures mount, the risk of political instability inevitably rises.
Deployment of French Aircraft Carrier Charles de Gaulle
France has been enhancing its strategic presence in the Indo-Pacific to support regional stability and strengthen alliances. The French Navy's aircraft carrier, Charles de Gaulle, embarked on the "Clemenceau 25" mission, departing from Toulon on November 28, 2024. The carrier strike group, including French frigates and allied vessels from Italy, the United States, Morocco, and Greece, will conduct operations in the Mediterranean, Red Sea, Indian Ocean, and South China Sea. The mission aims to enhance interoperability with regional partners through exercises such as the bilateral "Varuna" with the Indian Navy.
International Solar Alliance (ISA) Initiatives with Indo-Pacific Countries
On November 26, 2024, India's Ministry of External Affairs signed a Project Implementation Agreement with the ISA to execute solar projects worth USD 2 million in Fiji, Comoros, Madagascar, and Seychelles. This initiative, part of the Quad Climate Working Group, seeks to power health centres and agriculture in remote areas, addressing climate change challenges in these nations. The ISA, co-founded by India and France in 2015, aims to promote solar energy adoption globally, with a focus on solar-rich countries.
Italy-India Collaboration on Maritime and Blue Economy
India and Italy have been strengthening bilateral relations, emphasising areas such as trade, defence, and sustainable development. Last month, Italian policymakers, including Industry Minister Adolfo Urso, engaged with Indian counterparts in New Delhi and Mumbai to advance maritime partnerships. Discussions centred on port infrastructure, shipbuilding, yacht manufacturing, and the broader blue economy, aligning with initiatives like the India-Middle East-Europe Economic Corridor (IMEEC). On his recent visit to Italy, EAM Jaishankar also inaugurated the new premises of the Indian Embassy in Rome. On IMECC, he noted,
India and Italy are founding members of the India Middle East Europe Connectivity Corridor or IMECC, along with like-minded friends. And as I contemplate the future, certainly one day we will look back on this period and say that this connectivity corridor which was agreed to in - principle during India’s presidency of the G20 will be a game changer between Europe and Asia.
G7’s Indo-Pacific Outreach
The Group of Seven (G7) convened a Foreign Ministers' Meeting Outreach Session in Fiuggi, Italy, focusing on the Indo-Pacific. India's External Affairs Minister, Dr S. Jaishankar, participated in this session and identified six critical areas necessitating cooperation: maritime security, semiconductors, supply chains, infrastructure, climate action, and digital connectivity.
The outreach session included foreign ministers from India, the Philippines, the Republic of Korea, and Indonesia, reflecting the G7's recognition of the Indo-Pacific's strategic importance and the necessity for inclusive dialogue, welcoming initiatives from partners such as the Association of Southeast Asian Nations (ASEAN), and the Indian Ocean Rim Association (IORA).
What We’re Reading and Listening to
[Blog] Read Anupam Manur’s amusing blog on how we must boycott the boycott button itself
[Podcast] While the COP29 ended in a final agreement on paper, did it really deliver? In this episode, Anika Patel from Carbon Brief and Rakshith Shetty discuss the climate conference.
[Opinion] Read Pranay Kothasthane’s latest piece on why India’s Semiconductor Future Needs Empowerment, Not Red Tape
[Book] Talking about struggling democracies, read Nicolas Berggruen and Nathan Gardel’s book Renovating Democracy: Governing in the Age of Globalisation, where they argue for empowering participation without populism