Munich insecurity conference: a re-ordering begins

0:02The Economist

0:10Hello and welcome to The Intelligence from The Economist. I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world.

0:23Donald Shoup rode a bicycle, but his obsession was traffic. Specifically, how to make cities more efficient by having the right parking spaces and ways to charge for them. Our obituaries editor remembers a man who got cities moving.

0:43Before that, though, we're trying to parse a pile of news from a bewildering conference over the weekend.

1:22For presidents and prime ministers, defense secretaries and spy chiefs, the Munich Security Conference is a huge annual fixture. Since the 1960s, this is where a lot of Western diplomacy gets done. Business deals get struck. During the coming days, we have to once again deal with Putin's war against Ukraine. I warmly welcome the Ukrainian delegation. But the meeting doesn't often make for big global headlines. This year, though, this year was a news gusher. On defense cooperation, on Ukraine negotiations, on flying the flag for Europe's hard right, the Trump administration threw into question what Munich types had for decades taken for granted.

2:07And as ever, the question is how seriously or literally to take it all. Our editor-in-chief, Zannie Minton-Bedos, and our defense editor, Shishank Joshi, are just back from the conference. Zannie, Shishank, hi. Thanks very much for making the time today. Hello, Jason. Morning, Jason. Now, you've both been at this year's Munich Security Conference and indeed at others before it. What was the feeling on the ground this time around? I've been to many Munich Security Conferences. This is the big event in the European diplomatic calendar. And this was the most contentious such summit I have ever attended.

2:43I think it's probably the most contentious since these events began in the 1960s. Well, I haven't been to nearly as many as Shashank. I'm much more of a Munich rookie compared to him. But it does often actually feel dramatic. I remember three years ago, Volodymyr Zelensky dashed from Kiev to Munich to give an impassioned speech just days before Russian tanks rolled into his country. But this time, Shashank is right, felt very contentious, very dramatically contentious. And the striking thing was that this time the threat was not from Moscow, but from Washington, because it was a cacophony of policy announcements and comments from the Trump administration, which really got the Europeans concerned that there are tectonic shifts in Europe's security happening as we speak.

3:32Well, we're going to try to parse some of those. What was the general message? Well, I think the most striking message came from Vice President J.D. Vance. The conference attendees, I was sitting in the room listening to him, were expecting a speech about Ukraine, about Russia, about how to handle it. In fact, he did absolutely none of that. He launched into a broadside against Europeans and European democracy. The threat that I worry the most about vis-a-vis Europe is not Russia, it's not China, it's not any other external actor. And what I worry about is the threat from within. He touched a number of subjects, free speech, migration, the treatment of minorities.

4:15But he was particularly criticizing Germany for its policy of having a firewall against the extreme right AFD party. Democracy rests on the sacred principle that the voice of the people matters. There's no room for firewalls. You either uphold the principle or you don't. Someone said to me it was like the Germans having done to them what they do best, which is lecturing other people. Perhaps one of the most striking moments of this speech was when he called out the Romanians in particular for cancelling the election where a candidate suddenly appeared from nowhere, a candidate very friendly to Russia, and there was great concern that this was a Russian disinformation campaign.

4:58If your democracy can be destroyed with a few hundred thousand dollars of digital advertising from a foreign country, then it wasn't very strong to begin with. The audience listened in stunned and stony silence to Vice President Vance. And there was one moment where I think he was trying to make a joke. He said, if American democracy can survive 10 years of Greta Thunberg's scolding, you guys can survive a few months of Elon Musk. People were just kind of gobsmacked. What was the vice president saying? It sounds as if leaders in the room were pretty well gobsmacked by the entirety of the conference.

5:36There was one very prominent German politician who we thought summed up the mood of many people. It seems they're out to get us. The day after the Vance speech, I was hosting a conversation on stage with Olaf Scholz, the German chancellor. In his remarks, he pushed back very clearly and very forcefully against the vice president. And I started off my questions to him by asking what he thought the consequences would be for US-German relations of this kind of an attack. I think it's important that we understand that Germany is a very strong democracy. And as a strong democracy, we are absolutely clear that the extreme right should be out of political control and out of political decision making processes and that there will be no cooperation with them.

6:22And then I asked him whether he thought there was anything worth reflecting on.

6:30ah you mean all this very relevant as discussions about ukraine and security in europe

6:40so you can hear from his answer which was yes all the things that the vice president said about ukraine i.e nothing that he thought there was absolutely nothing in the speech worth reflecting on and on the matter of security which came up again and again certainly president trump has talked about America's role in NATO and how it may need to change. Did anything Mr. Vance said put any meat on those bones, how European-American defense cooperation should look? Vance, like Pete Hegseth, the American defense secretary before him, who had just been in NATO in Brussels a couple of days earlier, made it pretty clear, as other administrations have done, we ought to say, that America was going to be less involved in European security as it looked more to China.

7:21You hear this term, burden sharing, but we think it's an important part of being in a shared alliance together that the Europeans step up while America focuses on areas of the world that are in great danger. Now, Pete Hegseth, I was told, in meetings with his counterparts, in meetings with NATO, said there were no immediate plans to pull troops out of Europe. People were reassured about that. You know, they started the week thinking, my God, what's going to come our way? Hegseth was reassuring on that front. He said, I'm not yanking everything out of Europe. However, when you look at the totality of American diplomacy over the last several days, the Vance attack on Europe, the Trump outreach to Putin over the heads of Ukraine in Europe, there is absolutely concern you could see Donald Trump either pull people out of Europe or you could see him throw European security on the negotiating table to get a deal in Ukraine.

8:20I spoke to Julie Smith, who's America's former ambassador to NATO. She wasn't until last month. And she was particularly concerned that Trump might withdraw some of the 20 ,000 American troops that Joe Biden sent to Europe after Russia's invasion of Ukraine in 2022. And she said if they are pulled out, she worried that there was a risk that other allies, the UK, France, Germany, might decide it's too risky to maintain these eight battle groups that are currently sitting on the eastern flank of NATO. So all in all, I think Europeans, they don't know what's coming, but they are beginning to fear some of the worst case outcomes.

9:01But the big long-term answer seems to hang a lot on what actually happens in Ukraine. Do we have any more clarity on that point at least? Not really. I think that the mixed messages and lack of clarity on the future of European security were mirrored in the more immediate question of what happens in Ukraine. But certainly two of the key planks that have really held for the past three years between America and Europe, which is firstly to work jointly and together, and secondly, that nothing can be done to Ukraine without Ukraine, those two planks seem to be questioned. And clearly the unilateral decision to start talking to the Russians by Donald Trump was a body blow to that.

9:46But secondly, it was not clear and there were mixed signals from the Americans about how closely the Europeans would even be involved in the negotiations. I hosted a lunch where Keith Kellogg, President Trump's special envoy for Ukraine, was on the stage along with a number of European leaders. Can you assure this audience that Ukrainians will be at the table? And I asked him specifically, would Ukraine be involved in the negotiations and would Europe be involved in the negotiations? The answer to that last question, just as you framed it, the answer is no. And his answer was pretty categorical.

10:19The answer to the earlier part of that question is yes, of course the Ukrainians are going to be at the table. But to add to the confusing signals, the Secretary of State, Marco Rubio, a couple of days later, suggested that Europe would indeed be involved in the negotiations, but it was much too early. We're not there yet. And the Europeans will have to be involved because they have sanctions on Putin and Russia as well. And they've contributed to this effort. We're just not there yet. We really aren't. And much of the discussion around how America is going to deal with the Ukraine war, how it's going to deal with Ukraine itself, we haven't heard so far from Mr.

10:54Zelensky. He was at the conference. What did he say? What was his position? President Zelensky gave a speech on the second day of the conference, and it was very, very powerful and very categorical. It was very clear that he did not really know what was going on with the Trump administration, but he asserted clearly that his country needed to be involved. Ukraine will never accept deals made behind our backs without our involvement. I think part of Zelensky's aim, as he was being cast aside by the Americans somewhat, was also to galvanize European action to back him up. So, for instance, one of the things he proposed was the idea of a European army to protect against Russia.

11:39Many leaders have talked about Europe that needs its own military, an army, an army of Europe. Now, that idea doesn't really have much consensus among European leaders. But I think what's interesting is the reason people are proposing such radical ideas is because there is such a sense of radicalism in the Trump administration's approach. You have Keith Kellogg saying one thing, You have Marco Rubio, the Secretary of State, saying another thing, J.D. Vance, another still. And another way that you see this radicalism, I think, is the way that the Trump team approached the Ukrainians, first in Kiev and then again in Munich, to press them to sign away the rights to about$500 billion worth of critical minerals, not as a promise for further assistance in the future, but as a payment for all of the American aid in the past.

12:34This really shocked a lot of Europeans, this kind of predatory, extractive approach by the Americans. Now, the hope is this can be used as a kind of leverage to get the Americans to commit to something concrete on Ukrainian security guarantees. But the way it was done, I think that that shook a lot of American allies. You know, I think that's something that the Europeans are going to have to get used to. I mean, this was very different to a traditional diplomatic approach. But this struck me as being emblematic of an administration schooled in the art of the deal and full of private sector people.

13:10I mean, Scott Besant, the Treasury Secretary, a successful hedge fund manager, he just probably saw this as going with a term sheet and, you know, getting the deal done. So what presented with that reality then does Europe do about it? What happens now in the face of all of this uncertainty and all of this worry? Europeans are taking stock. What was interesting was Emmanuel Macron, Francis president, after all of these diplomatic blows, called an emergency meeting of selected European leaders in Paris. And that's going to be held today. He also invited Mark Rutter, the secretary general of NATO, as well as Ursula von der Leyen, the president of the EU commission, and Antonio Costa, the president of the council.

13:54The meeting is expected to tackle a couple of things. how Europe can get a place at the negotiating table, what leverage it can bring, for instance, what Europe might provide for peacekeeping or a deterrent force in Ukraine in the future. And it's very interesting, Keir Starmer, the British prime minister, publicly backed such a British participation in such a force last night. And how to finance European rearmament, which is the big question in all of this. because even before all of this diplomatic turmoil, NATO allies knew that defense spending was going to have to rise, probably above 3 % of GDP, if NATO war plans were to be credible.

14:36Trump's diplomacy in Ukraine has basically only added to that urgency because if there is a deal, a European troop deployment to Ukraine is going to be expensive. If there isn't a deal, the need to continue backing Ukraine is going to be expensive. and if America walks out, then making up the gap is going to be very, very expensive. I guess the question is how much to take all of this at face value at this stage. We have seen chaotic early stage Trump administrations before, many mixed messages. There's a lot of people on the ground saying conflicting things. Should we take this seriously now or should we just wait and see how this plays out?

15:14Well, Jason, it's now almost a cliche, but with President Trump, do you take him literally and seriously or one or the other? And I think in this case, things have clearly really changed in terms of the US approach, both to Ukraine and to Europe. I wouldn't take every single pronouncement literally, but I do think, as I kept hearing from many people in Munich, there's a new sheriff in town and things have been shaken up. And it's probably Shashank is right, the biggest shakeup to the transatlantic alliance in decades. But from such shakeups come risks, and we've discussed them. There also come opportunities.

15:49And for me, the question is whether this will be a moment where Europe rises to the challenge and actually stops clutching pearls and does something. And it was, in fact, a former American diplomat who put it to me in Munich most pithily. He said, my message to Europe is don't wait, worry and complain, but come up with bold answers. And I think from what we're seeing just today, the meeting in Paris, the, I think, very bold announcement by Prime Minister Keir Starmer suggests that Europeans get it and they recognise that they need to do something. I agree with that. And I think it cuts in both directions.

16:28If Trump wants a deal that will stick rather than a kind of sticking plaster that will fall apart, make him look weak, result in a kind of car ball in Kiev at some point in his presidency, he also needs Europe. He needs European money. He needs European aid, potentially European troops. And if Europe is going to have the confidence to provide those, he will need to commit America to European security, to have its back rather than sign up to a carve-up that will contribute to these panicked responses among Europeans who will then turn inwards and away from him. I've never seen such a frenetic Munich conference, such a panicky, concerned Munich conference.

17:14But we're at the beginning of a long process. All of this haggling, this bullying, this nail-biting that's going to determine the future of Ukraine, that is only just beginning. There's a long way to run. And as one very senior European put it to me, he said, take a deep breath. Zani, Shashank, thank you both very much for your time. Thank you. Thanks, Jason.

17:54Donald Shoup always felt he lay at the lowest levels of the dismal science of economics. Academics have sniffed when he said he was most interested in traffic. Anne Rowe is The Economist's obituaries editor. He was rare, too, as far as academics went at the University of California in Los Angeles. His fans made quite a cult of him. They called him Shoop Dog after the rapper Snoop Dog. And so he gathered a big fan club around him. His followers were called Shoopistas. And he liked to dress rather controversially in tweeds and a tweed cap. And he'd ride on a sit-up-and-beg bike. He had a bushy beard.

18:43And he wasn't just joking, because as soon as you had talked to him for a little while, you would see the blue eyes get quite steely. He was extremely angry inside. Parking in America took up so much land. That was the most valuable asset cities had. And that the need to park cars and drive cars had caused America's cities to sprawl outwards ever since the 1920s. America, in the mid-20th century, in the 1950s, had decided that the best way to handle the growing number of cars was to have parking minimums so that everything that was built had to have a certain number of parking spaces. for every 300 square feet of store space you had to have one parking space for every apartment you had to have one parking space whether or not the owner had a car hospitals had to have a parking space for every two beds churches had to have one for every five seats in a pew in San Jose in California, the bowling alley had to have seven parking spaces for every lane because what the Institute of Transportation Engineers hadn't realized was that sometimes people shared their cars.

20:06So there was a grotesque over-provision of parking spaces, so much so that Professor Schuppert calculated that 14 % of the land surface of Los Angeles County was covered by parking spaces, just oceans of unproductive asphalt.

20:28He was frustrated just as much, though, by the brains of motorists because they expected these parking spaces to be free. And he insisted that they were not free.

20:43They may seem so to the motorist, but they certainly weren't so in all the other aspects of citizens' lives, if they were shoppers, commuters. They were all paying because the developers of the land had had to pay an awful lot extra to put parking spaces in. So that money went on to everybody's bills and the cost of things in the shops. everything you could think of was a bit pricier just because motorists had their fundamental right as they saw it of a free parking space the only way to sort out this unholy mess was to abolish parking minimums he also was very exercised by the fact that an awful lot of the traffic clogging the roads was composed of drivers who were actually looking for a place to park.

21:37He reckoned about 33 % of traffic in the centre of cities was simply looking for somewhere on the curb that they could also get a free parking space rather than going to the garage, which was probably supplied by the city, but they didn't want to go because they would have to pay to go to that. So he devised a plan whereby you would have smart meters that varied according to the time of day, and that these meters would be so constituted that they'd make sure that there was always a 15 % vacancy rate at the curb. And he knew they were not popular, but he thought that if the revenue from them didn't simply disappear into the general fund, but was actually used in a district that had meters for the good of the district, then they would become very popular.

22:37So he floated the idea of parking benefit districts, which meant that if you were in a section of the city that had meters, the revenue from those meters went specifically to public services within your district so that the graffiti would be removed, the streets would be repaired. It could all be done on the revenue from parking meters.

23:03He wanted cars to be kept in their place. And there are still plenty of them on America's highways and in America's cities. But the ideas that Professor Shoup had have taken root as well. And though it may take a while, he'll be remembered as the man on the bicycle who actually changed the way Americans thought about parking and about cars and about their basic rights too.

23:37Anne Rowe on Donald Shoup, who's died aged 86.

23:53That's all for this episode of The Intelligence. We'll see you back here tomorrow.

24:03Thank you.

24:33.