Morning Briefing

Gauck Leaves the Stage

British Prime Minister Theresa May yesterday unveiled plans for a “hard’’ Brexit, saying: “We will leave the E.U. but we are not leaving Europe.’’ It might sound like statesmanship but it’s actually a form of reinsurance. The United Kingdom is heavily dependent on E.U. imports, which outstrip its exports to the 28-nation bloc by almost 100  percent. If Britain really left Europe, its supermarket shelves would be empty, there would only be cyclists on its roads and Liverpool’s soccer team (whose trainer is a German, Jürgen Klopp) would need a new coach.

 

Dialectic is the fine art of turning the tables and that’s what Chinese President Xi Jinping did yesterday at Davos, calling for a global division of labor and presenting himself as a protector of free trade. Donald Trump already has taken the role of chief protectionist. Talk about your topsy turvy world.

 

How did the West react? By booing the United States and bowing in deep respect to China. It’s a shame Deng Xiaoping, the late Chinese reformer, didn’t live to see this day. He called for ever more flexibility from China’s leaders, teaching his successors that fixed principles are like wearing ideological blinders that prevent people from seeing the whole picture. The malleable Mr. Xi just performed a perfect somersault.

 

Angela Merkel is still trying to regain her poise after Donald Trump’s remarks, the least respectful ever made by a U.S. president about a German leader. Trump called her refugee policy a “catastrophic mistake.” His comments about the “trauma that Germany is now going through” hit her hard. She knows only too well that her opponents will turn lines like these into political dynamite come election time. Trump has lit the fuse.

 

Deutsche Bank has finally reached a settlement with the U.S. Justice Department. Germany’s biggest bank will pay a $3.1 billion fine and $4.1 billion in damages to property owners in the United States. It’s payback for selling toxic mortgage securities and underwriting loans to “anyone with half a pulse“ between 2005 and 2007. Deutsche Bank’s current CEO, John Cryan, is now paying for the sins of his pre-predecessor, Josef Ackermann. In the history books, they will write that one CEO got the glory; the other, the goat.

 

President Joachim Gauck bids Germany farewell today with a speech on the state of the nation. The only comfort we can find is that it doesn’t necessarily mean goodbye. The only real power Germany’s president has in our parliamentary system is the bully pulpit, and while Gauck might be leaving Berlin’s Bellevue Palace, he’ll use his eloquence to serve the truth, rather than the state. In some ways, that’s a promotion, and at best, we get to keep Gauck, just without all the pomp and circumstance.

 

 

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