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Macron’s war on ‘Islamic separatism’ only divides France further

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Emmanuel Macron will need France’s 6m Muslims with him if he is to root out the violent extremism that has led to two deadly terrorist attacks on French soil in the past few weeks. The president is at serious risk of failing. In the aftermath, his government has chosen instead to stoke moral panic about the “Muslim question”.

Last month, before schoolteacher Samuel Paty was decapitated by a Muslim attacker, Mr Macron laid out his approach in a speech dedicated to fighting “Islamic separatism”. The charge, which echoes the language of colonial-era French rule, evokes tropes of Muslims having split loyalties to foreign masters, or conspiracies about the imposition of sharia religious law. Mr Macron mentioned “denominational food menus” and the headscarf as possible signs of separatism in French society.

In a debate that is so emotionally charged, these words matter. Since Paty’s brutal murder, and a stabbing attack in Nice, phrases like “enemies of the republic”, “Islamo-leftists” and “collaborators” have become part of the French political vernacular.

Television networks serve up “anti-separatist” plans from government ministers such as banning polygamy (it is already illegal) or stopping supermarkets from selling halal food. One commentator even suggested Muslim women should remove their veils to express solidarity with Paty. France’s interior minister has said the upcoming anti-separatism bill will include a prison sentence of up to five years for people who refuse a doctor of the opposite sex.

As a British Muslim, now based in Brussels, I have seen similar debates that risk conflating conservative practice with violent jihadism play out in the aftermath of terror attacks in the UK. Suspicions of “political Islam” (a loosely-defined concept) are seen everywhere: in Muslim organisations, dress choices and even spoken Arabic. France’s finance minister sees female-only hours at public swimming pools as evidence of the state succumbing to its “insidious” influence. 

But infringements on Muslim lives under the banner of secularism risks taking aim at the majority of law-abiding citizens rather than violent criminals. No woman in a headscarf has carried out a terrorist attack in France. That cultural signifiers are seen as seditious shows the debate has moved from upholding civil liberties into policing individual expression. 

Mr Macron also laid out the need to create a “French Islam” of the “enlightenment” to help reform the religion’s global “crisis”. This hubristic aim should be met with suspicion by any secularist. If a “French Islam” means government-approved imams and strict curbs on private religious schools it betrays an instinct to use the state to prescribe a “correct” religion — something that has more in common with authoritarian Muslim leaders than enlightenment values of separating church and state.

European Muslims do not need the government writ to make Islam French or British or German. It already is, by virtue of the lives of millions who freely practice their faith and are active citizens in the countries of their birth. All over Europe, Muslims are being asked to prove their loyalty to the state and its values. But in France they are asked to do so while hiding visible signs of their religion for fear of offending the state. They are admonished for not condemning terrorism loudly enough and expected to bear collective responsibility for nihilistic crimes, which, in the case of recent attacks, were carried out by foreigners. 

It does not have to be this way. The UK has battled the same violent extremism without the wholesale other-ing of its citizens. Muslims are a part of France’s history, its present and its future — something extremists on both sides hate to admit.

French Muslims should be Mr Macron’s biggest allies against violent terrorism. Yet rather than embracing them, he has chosen a strategy that serves the far-right and its electoral ambitions. It is a view that thinks a weak republic is on the cusp of being overrun by an enemy within.

Come 2022’s presidential election, Mr Macron will likely tell Muslims they should vote for him to save the republic from the far-right party of Marine Le Pen. That threat is in danger of sounding hollow for Muslims if they subject to a hostile environment from a liberal president.

mehreen.khan@ft.com 





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Suez ready to talk to Veolia in takeover battle after alternative proposal lands

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Suez has agreed to open discussions with its rival Veolia, the French waste and water group, after receiving an alternative proposal in one of the most vicious takeover battles that France has seen for years. 

Late on Sunday evening the board of Suez said it had received a letter of intent from two funds, France’s Ardian and Global Infrastructure Partners, that could lead to an offer at €18 a share. This “would facilitate the emergence, and in a short timeframe, of an amicable solution”.

With the proposal on the table, Suez added that it was now “willing to open a dialogue with Veolia with the aim of building a solution in the interest of all concerned parties, which would reinforce both of the two French leaders in environmental services”.

Bertrand Camus, Suez chief executive, said the eventual offer could be for up to 100 per cent of Suez but that there was no fixed goal in mind ahead of negotiations with Veolia. 

“We have a solution on the table and we are extending our hand so that we can engage in a discussion,” Mr Camus told the Financial Times.

The Suez alternative comes more than three months after Veolia bought 29.9 per cent of its rival, kicking off a fight which has dragged both sides through the courts and divided investors in Paris into opposing camps

Veolia bought its stake from French energy group Engie. Earlier this month it outlined the plan for the takeover it intends to submit for the rest of Suez’s capital — also at €18 a share, valuing the bid at more than €11bn.

The two companies have been at each other’s throats since Veolia made its intent to take over Suez public at the end of August. Mr Camus has so far refused to engage with Antoine Frérot, Veolia’s chief executive.

To win leverage, Suez created a poison pill in September, putting its French water assets into a Dutch foundation mandated to protect them for four years unless the Suez board decides otherwise. Veolia had intended to sell those assets to meet competition concerns.

While Veolia has been gearing up to put its propositions to Suez shareholders this summer — and while the war of words continues in public, alongside legal challenges and antitrust reviews — advisers on both sides have said that the door remains open to finding a friendly solution. 

The last time there was anything close to a deal acceptable to Suez was in early October, when Veolia put an expanded carve-out of Suez’s French water business on the table. It was worth about €5bn in annual revenues and could be run by the current management. 

One option, in light of Sunday’s alternative proposal, said people close to Suez, would be for Veolia to accept some assets in exchange for walking away.

While refusing to be drawn on what a deal could look like, Mr Camus said there were limits on how far he could go: “Suez in the future has to have a coherent industrial project. It has to be a company that can grow, that can compete in the market. It cannot be just a sum of things that cannot be kept by Veolia.”

However, Veolia responded quickly on Sunday to say that the shares in Suez it owns “are not and will not be for sale”.

The stake constitutes, said Veolia, “the first step in the inevitable construction, and under French control, of the world champion of ecological transformation; they are not an element of financial strategy”.

Mathias Burghardt, head of Ardian Infrastructure, underlined that its letter of intent was not a counter-offer but a way “to allow a negotiation to take place” and is predicated on a friendly solution.

“We are trying to say that, with GIP, that if you, Suez, find an agreement with Veolia, then we will back that agreement,” he added.



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Germany’s CDU chooses Merkelism without Merkel

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The post-Merkel era has begun. Again. A first attempt to place Germany’s Christian Democratic Union in the hands of a trusted lieutenant failed when Annegret Kramp Karrenbauer resigned after just over a year in the job. Now Angela Merkel has another preferred successor in place. On Saturday, the CDU elected as its new leader Armin Laschet, a close ally committed to the outgoing chancellor’s centrist brand of politics.

The party gambled on continuity rather than a shift to the right under closest rival Friedrich Merz. Mr Laschet, the regional premier of North Rhine-Westphalia, represents the kind of open centrism that enabled Ms Merkel to notch up four consecutive election victories. The CDU is riding high in the polls ahead of federal elections on September 26. But it will soon have to do without Ms Merkel, its greatest asset.

Mr Laschet is now the frontrunner to succeed Ms Merkel as chancellor but that is far from guaranteed. The CDU and its Bavarian sister party, the Christian Social Union, are due to decide in March who will run as their joint candidate. Many doubt whether he has the skills and profile to lead a national campaign. Mr Laschet will need to assert himself quickly to cement his chances. He could still lose out to Bavarian premier Markus Söder who is far more popular.

Mr Laschet’s first priority will be uniting the party. It will not be easy. He beat Mr Merz by 53 to 47 per cent of the vote. There is large minority in the party who want it to take a clearer conservative direction. When he lost the 2018 leadership contest, Mr Merz retreated. This time, he seems determined to weigh on the party’s future. After his defeat on Saturday, he asked Mr Laschet to engineer his entry into government as economy minister. Ms Merkel declined.

The second challenge will be maintaining the CDU’s ratings as Ms Merkel prepares to bow out. It faces important regional elections in Baden-Württemberg and Rhineland-Pfalz in March. Simultaneously, Mr Laschet has to master the pandemic in his own region. After an unconvincing start last year, he swung behind Ms Merkel’s popular call for tougher lockdown measures. Now, the success of the vaccine rollout has the power to make or break politicians in short order.

Finally, Mr Laschet will have to refresh the party’s programme, addressing the shortcomings of the Merkel era, such as Germany’s creaking infrastructure, weakness in digital technology and low ambition on climate change. His support for coal and soft views on China and Russia could complicate a coalition with the greens, the most compelling election outcome for the CDU. But it is easier for them to find common ground with a moderate like Mr Laschet than with Mr Merz.

The CDU and Germany — and indeed Europe — are better off without Mr Merz as leader. His economic and social views are stuck in another era. Although broadly pro-European, a Merz-led campaign deploying hawkish fiscal and monetary views to win back voters from the Eurosceptic nationalist Alternative for Germany would have spelt trouble. The Francophile Mr Laschet would continue Ms Merkel’s cautious pro-Europeanism and potentially revive a strained Franco-German relationship.

Before that though, Mr Laschet will have to earn the trust of his party and the country. He delivered a home truth to delegates on Saturday: many Germans are attracted first to Angela Merkel and then to the CDU. Without her, its success and his success are far from certain.



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Lockdowns fuel fears of eurozone double-dip recession

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Eurozone nations’ escalating restrictions to tackle the coronavirus pandemic have significantly slowed economic activity, fuelling fears that the bloc faces a double-dip recession, according to widely watched and timely alternative data indicators.

Travel to retail and hospitality venues and workplaces, as well as consumer confidence and spending, have all taken a hit in the first weeks of 2021, according to high-frequency activity trackers. These indicators offer a more timely gauge of the economy than official statistics, although they are less comprehensive and reliable.

Bert Colijn, senior eurozone economist at ING, said early data suggested that, since the start of the year, “activity continues to trend lower”.

In contrast to the sudden, deep shock that the eurozone economy experienced last spring when the pandemic first hit, the new surge in infections was “dragging on for longer”, causing a slower but “steady decline in activity” that increased “the risk of a delayed wave of bankruptcies if generous [government and central bank] support measures do not stay in place”, Mr Colijn said.

Line chart of Government response tracker: stringency index showing How restrictions are tightening again

As a result, economists anticipate that the estimated fall in output in the eurozone in the final three months of 2020 — Oxford Economics and Nomura forecast a contraction of between 1.8 per cent and 2.3 per cent — will be followed by another drop in the first quarter of 2021 in many of the bloc’s major economies, including Germany and Italy.

That could leave the eurozone in its second recession, defined as two consecutive quarters of negative growth, in less than two years.

Line chart of Trips to shops and entertainment (% change compared with average from Jan 3 to Feb 6 2020, rolling seven-day average) showing Travel for retail and leisure has fallen

Katharina Utermohl, senior European economist at Allianz, said: “We expect the eurozone economy to kick off 2021 with a double-dip recession, with a second consecutive quarterly GDP contraction [in the first quarter] all but certain following the prolongation and further tightening of Covid-19 restrictions in recent weeks.”

Chiara Zangarelli, European economist at Nomura, said the rollout of vaccines was “encouraging” but as lockdowns lengthened, the outlook for first-quarter eurozone gross domestic product was becoming gloomier.

Line chart of % change compared with average from Jan 3 to Feb 6 2020, rolling seven-day average showing Travel to workplaces got off to a slow start after Christmas break

Daniela Ordonez, an economist at Oxford Economics, said the drop in activity “might be only the beginning of a new phase of deterioration in the bloc’s health situation”, citing the risk that more transmissible variants of the virus could take hold.

The fresh upsurge in cases and restrictions is hitting some nations’ economies that avoided the worst damage last year.

In Germany and the Netherlands restrictions are now harsher than in the first phase of the pandemic, resulting in sharper falls in the number of journeys to shops, bars and restaurants than in other European countries.

German consumer spending in the second week of January was 25 per cent lower than in the same period last year, according to Fable Data, which tracks bank transactions. Spending fell across most consumption categories except for groceries, the company said.

Line chart of Annual % change in transactions  showing German consumers hold back spending in most areas except groceries

The German central bank’s weekly economic activity index — an experimental measure that draws on high-frequency indicators such as pollution, Google searches and consumer confidence — fell that week for the first time since the summer.

The proportion of German consumers who said now was a bad time to make major purchases rose from 16 per cent in December to 20 per cent in mid-January, according to data from Morning Consult. Consumer confidence was largely subdued across major eurozone economies in the first two weeks of January, the data showed.

Line chart of Index* showing Eurozone consumers' confidence low

One bright spot is the bloc’s manufacturing sector. Eurozone industrial production was surprisingly strong in the autumn, supported by rising exports, so factory output is expected to have cushioned the economy to some degree in the final quarter of last year.

More up-to-date measures of industrial production suggest this resilience has continued into 2021. The mileage logged by German trucks, a proxy for industrial production, is running at above the levels of early January last year, after the usual Christmas dip.

Line chart of Index, 2015 = 100 (rolling seven-day average) showing Germany truck mileage is above the post-holiday period of last year

Economists warned, however, that the high level of uncertainty about the economic outlook could ultimately feed through into manufacturing production.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: “The recovery in the eurozone manufacturing sector will slow in [the first quarter].”



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