Spies for Europe.

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We’ve suspected for some time that the French and German governments’ refusal to take part in the Iraq war had something to do with their access to independent overhead imagery satellites. Briefly, France and Germany did (with the HELIOS and SAR Lupe programs respectively), and didn’t take part at all. Spain and Italy had some access to French imagery and had advanced plans to get their own. They made a limited commitment. The UK, Australia, Denmark, and the ROK relied on the United States and were, in a phrase that should be better known outside Australia, all the way with LBJ. Turkey didn’t have its own, although it has since acquired a satellite from Italy and it did have liaison staff at the little-known EU Satellite Centre, but it probably had ample intelligence from human sources.

The original statement is in this Ken Silverstein piece (see this blog post of mine from 2006):

“They say everyone else was wrong,” said this former official, “but we conditioned them to be wrong. We spend [tens of billions of dollars per year] on signals intelligence and when we reach a conclusion, the people who spend less than that tend to believe us. They weren’t wrong, they chose to believe us. The British, Germans, and Italians don’t have all those overhead assets, so they rely on us. Historically they have been well-served, so they believe us when we tell them the earth is round. The French have their own assets—and guess what? They didn’t go with us.”

Guilhem Penent, of France’s IFRI and IRSEM thinktanks, writes in the Space Review as follows:

Regarding outer space, France’s main objective is to perpetuate its autonomy and national sovereignty. As sovereignty is the state of determining itself based on its own will without depending on other nations, satellites are, first and foremost, the guarantee of France’s autonomy in assessment and thereby in decision-making.

The decision not to follow the US in 2003 was thus taken by then President Jacques Chirac in accordance with intelligence based for the most part on Earth-imaging satellite HELIOS 1, whose findings were in contradiction which was being said at the UN Security Council. When the war in South Ossetia broke out in 2008 between Russia and Georgia, then President Nicolas Sarkozy, as chair of the Presidency of the Council of the European Union (EU), used images provided by HELIOS 1 and HELIOS 2 to deny Russia’s allegations about the withdrawal of its troops when those troops were actually progressing southward.

This is the first public confirmation, I believe, that the French did in fact stand out of the Iraq war because HELIOS imagery showed that the WMD claims were nonsense. IFRI, and even more so IRSEM, are organisations with the status of something like CSBA in the States or RUSI in the UK, so this should be taken seriously.

Chris Williams, who pointed me to the TSR piece, contrasts the British concern about sovereignty with regard to things like bananas, beef, and birth certificates, with the French equation of it with independent verification technology. He has a point. (So does Dan Hardie in comments there, who points out that perhaps the French could have benefited by worrying more about their influence over monetary policy, something no British Eurosceptic has ever omitted to worry about.) I’ve repeatedly argued this elsewhere.

There are a couple of points here. I feel a degree of contradiction between my suspicion of mass telecoms surveillance and my enthusiasm for overhead imagery. Perhaps that’s just the conviction that however much fuss I kick up, it’s unlikely anyone will burn limited delta-vee to get pictures of me, but you can’t say that about X-KEYSCORE. With more consideration, I think it’s the terms-of-trade in the relationships I described in this post that worry me most of all.

From a British point of view, the deal was fairly simple. The UK would concentrate on signals intelligence and would share everything with the US, and would stay out of the satellite business. In exchange, the US would share back their satellite product. We know that on at least one occasion, during the Falklands War, this didn’t happen. Later, the UK started a major project, known as ZIRCON, to build a signals intelligence satellite. This went overbudget badly, but got a surprising degree of support from Margaret Thatcher for reasons of sovereignty vis-a-vis the US, before being abandoned when the Americans instead offered a share of the targeting slots for their equivalent system in exchange for cash.

But the ZIRCON strand of the story doesn’t cover imagery. It seems that the national interest was very poorly served by this part of the deal – the implicit sigint-for-imagery trade – to say the least, both in Iraq and possibly later in Afghanistan.

Since the 1980s, the cost of satellites has fallen sharply, notably due to the work at Surrey Satellite Technology Ltd. in Guildford. The UK had a very quiet test project between 2005 and 2009, and going ahead with an operational system on a similar basis to the Germans’ was being discussed openly by the Department for Business, Innovation, and Skills as late as early 2011. Since then, it’s all gone quiet over here…so what did happen to that project? And do we need more Europe here?

I think the answer to that is much more clearly Yes than it ever was with regard to the Euro. The main objection from the UK side (and from Atlanticist Europe more broadly) is that the Americans might not share as much stuff with us. But this makes less sense on close examination. In so far as it is a market-like, bargaining relationship, we would be in a stronger position. In so far as it is a relationship of integration among allies, the alliance would be better off as a whole and might be more allied. In so far as it is a feudal, tributary relationship, it would be less so. (You’ll notice that Penent alludes to this in the TSR article.)

And this doesn’t take any account of the quality of the information received. It seems that the information the US shared with its partners in the intelligence special relationship before Iraq was worse than useless – in fact, functionally defined, it was disinformation. Its recipients were less informed after receiving it than they were before. Even a small increase in independent capability might have the useful effect of keeping both parties more honest.

The United States economy recovered.

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So I was arguing with Jamie Kenny about Obama’s economic record.

It was Friday night, so I had no inclination whatsoever to do economics. Anyway, I got around to it.

fredgraph

The top, blue line is the civilian unemployment rate in %, on the left scale. The next, red line is average weekly wages, on the right scale. The next, orange line is the average hourly wages for nonsupervisory, production employees, seasonally adjusted, multiplied by 40 to be comparable to the economy-wide, weekly series. Of course, this may be misleading if there is a big difference in average hours between them, but I wanted a measure that wouldn’t be skewed by Wall Street or Silicon Valley executive salaries. And the green line, on the left scale, is real-terms GDP growth per quarter.

Growth could certainly be higher and unemployment could be going down faster, but both are going clearly in the right direction, and at least in cash-terms, wages are up. This is, in a word, recovery. It’s far from obvious from these data that it constitutes “economic royalism”, even if the economy-wide wages measure is growing faster than nonsupervisory production.

Bang!

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Oh well, here it is: yes, Virginia, the BND shared enormous amounts of surveillance material with the NSA, both from their military SIGINT group deployed with the German army in Afghanistan and from, well, Germany. Officially, this didn’t contain any information on German citizens. Also, the Germans offered the Americans the use of two software applications they developed, presumably as part of the deal for X-KEYSCORE.

Meanwhile, the Germans have given notice on an agreement from 1968 that permitted the western allies to request surveillance in cases that affected the security of their forces in West Germany. This document had apparently not been used since 1990 (they say). Oddly, the US and UK agreed immediately to terminate it by exchange of notes, but the Germans were still negotiating with France yesterday.

Edward Snowden and the Political West

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Germany is the theatre in which the consequences of Edward Snowden’s disclosures are being played out. Why is this?

Obviously, privacy and data protection are especially sensitive in Germany. After the Stasi, the centrality of big databases to the West German state’s response to the left-wing terrorists of the 1970s, and the extensive Nazi use of telephone intercepts during the seizure of power, it couldn’t really be otherwise. Privacy and digital activism is older and better established in Germany than anywhere else – in the US, for example, I consider the founding text of the movement to be the FBI vs. Steve Jackson Games case from 1990 or thereabouts, while the key text in Germany is the court judgment on the national census from ten years earlier. But the UK has a (strong) data protection act and no-one seems anywhere near as exercised, although they probably should be.

So here’s an important German word, which we could well import into English: Deutungshoheit. This translates literally as “interpretative superiority” and is analogous to “air superiority”. Deutungshoheit is what politicians and their spin doctors attempt to win by putting forward their interpretations and framings of the semirandom events that constitute the “news”. In this case, the key event was Snowden’s disclosure of the BOUNDLESS INFORMANT slides, which show that the NSA’s Internet surveillance operations collect large amounts of information from sources in Germany.

The slides don’t say anything about how, whether this was information on German customers handed over by US cloud companies under PRISM orders, tapped from cables elsewhere, somehow collected inside Germany, or perhaps shared with the NSA by German intelligence. This last option is by far the most controversial and the most illegal in Germany. The battle for Deutungshoheit, therefore, consisted in denying any German involvement and projecting the German government, like the people in question, as passive victims of US intrusion.

On the other hand, Snowden’s support-network in the Berlin digital activist world, centred around Jacob “ioerror” Applebaum, strove to imply that in fact German agencies had been active participants, and Snowden’s own choice of further disclosures seems to have been guided by an intent to influence German politicians. Der Spiegel, rather than the Guardian, has been getting documents first and their content is mostly about Germany.

In this second phase, the German political elite has shifted its feet; rather than trying to deny any involvement whatsoever, they have instead tried to interpret the possibility of something really outrageous as being necessary for your security, and part of fundamental alliance commitments which cannot be questioned within the limits of respectable discourse. The ur-text here is Die Zeit‘s interview with Angela Merkel, in which Merkel argues that she knew nothing, further that there was a balance to strike between freedom and security, that although some kinds of spying were unacceptable, the alliance came first. The effectiveness of this, at least in the context of the interview, can be measured by astonishingly uncritical questions like the one in which she was asked “what additional efforts were necessary from the Germans to maintain their competitiveness”.

So what’s going on? British intelligence historian Richard Aldrich’s history of the UK signals intelligence agency, GCHQ, is illuminating. He argues that since the 1980s, the (West-) German government has had a long-term policy of building up the BND intelligence agency’s SIGINT capability. This was explicitly encouraged by the NSA, specifically its then director William Odom, who wished to get less European intelligence from the British. Obviously, this implies German intelligence sharing with the NSA.

At the same time, the (West-) Germans wanted to get more of their own information on subjects that interested them, notably operational-level (corps and above) military intelligence on the Soviet forces. The British were also concerned about this, for different reasons. The intelligence alliance between the UK and US, and the so-called Tier 2 partners (Canada, New Zealand, and Australia), predates NATO and was often sceptical about the security of NATO and West German institutions. As a result, signals intelligence reaching NATO commanders in Germany was often marked CAN/US/UK EYES ONLY and therefore too secret to show the Bundeswehr, who were providing 500,000 soldiers in 12 armoured and mechanised divisions with 24 hours’ notice. The absurdity of this can be seen from the fact that NATO multinational HQs often had a German general as one of the three posts of commander, deputy commander, or chief of staff. The British were, for their part, concerned that the US system was not going to get usable reports forward into the field in time to be any use. Both the UK, with the Nimrod R1 program, and the Germans spent serious money to solve this.

Another factor in the 80s was that France was encouraging other European countries to contribute to its own intelligence collaboration. Joining this would only add a further degree of dependence, on France, if Germany didn’t bring something to the table. Building up the BND and sharing information therefore served several different motives.

There was a patron-client motive, in which the Germans sought greater independence from the US (and its allies). There was an alliance-integration motive, in which the Germans (and the UK, and the US) sought to strengthen the alliance’s (or alliances?) technical capability and to deepen the partners’ commitment to it (them?). And there was also a bargaining or marketlike motive, in which the Germans were seeking to have more intelligence on hand that could be traded for advantages, whether with the French, the US, or whoever. I think this is also true of the other participants in the intelligence alliances – the UK, for example, didn’t build its own satellite capability, partly because there was a feeling that the Americans would do it better, but also because participating more deeply in the US satellite program, by having part of the take from the satellites downlinked at Menwith Hill and analysed at GCHQ, created a stronger bargaining position with the Americans (and others) in terms of the final intelligence product.

We now know, thanks to the latest Snowden event, that the BND and the federal version of the Verfassungschutz were offered the use of the X-KEYSCORE system, which seems to be an analytics tool for working with a wide variety of Internet surveillance data sets. Interestingly, the Verfassungsschutzer were offered training by BND officers, implying that they already had the system.

The US motive can also be analysed in the same terms as above. As an ally, they may have wished to strengthen German antiterrorist efforts (this happened shortly after the discovery of a terrorist plot in Germany). As a patron, they may have wished to reward their client, and also discourage them from developing their own technology or cooperating with some other party (like China!, following Britain’s lead). This was fairly common in the cold war era, according to Aldrich, when there was both a will to improve NATO communications security and a will to maintain some advantage over the other NATO partners. And as a bargaining actor, they may have acted because they were offered a good deal in return. So, what was the deal?

(If you want a clue, you might wonder what the large company operating in both the US and Germany mentioned in some of the PRISM documents is.)

In general, I think the BND is likely to have shifted from being closer to the “patron/client” model, towards “bargaining/market”, while still being very much “alliance/integration”. After all, the last sections of the NSA facility in Germany were handed back in May last year. It is very telling, though, that one of the first reactions to the Snowden disclosures from German politicians was outrage that Germany wasn’t considered even a “Tier-2” partner – probably fake outrage from those in the know. (As we have seen, this term has a definition.) This isn’t the reaction of people who are horrified at the thought of spying, though, rather that of people shocked that their investment in spying is not paying off as well as they hoped.

So, to round off, the point of the battle for Deutungshoheit is to maintain the primacy of Atlanticism in German public debate on foreign policy. This is, in many ways, the mirror image of the primacy of ECB-ism in debate on economic policy. Those who accept the consensus are respectable, those who aren’t, aren’t. If you doubt, the same issue of Die Zeit would tell you that the EU-US trade agreement must be signed for the sake of the “political West”. Everything going on here is touching on German privacy fear, but also on profound questions of geopolitics, and just politics. It is therefore very interesting that Der Spiegel, usually very, very NATO-minded, is being so difficult and un-biddable.

It is also probable that Edward Snowden’s best chance to get out of Russia is to disrupt the politics of SIGINT in Europe as much as possible.

People Like Us

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From German finance minister Wolfgang Schäuble weekend surge of editorials on the Eurozone crisis (via Süddeutsche Zeitung) —

Alle internationalen Studien bestätigen dies, genauso wie die EZB, die EU-Kommission, die OECD und auch der IWF – in der Reihenfolge geleitet übrigens von einem Italiener, einem Portugiesen, einem Mexikaner und einer Französin.

Roughly: All international studies confirm this [importance of sound fiscal policy] — from the ECB, European Commission, OECD and IMF, led in each case by an Italian, a Portuguese, a Mexican and a French woman.

The nationalities are presumably meant to indicate the non-Northern European nature of this consensus. But is it really going to appeal to the unemployed Italian, Portuguese, Mexican, or French that one of their nationals happens to be head of an international organization — staffed heavily from by-the-books economists — which produces studies justifying the policies from which they experience adverse effects?

UPDATE: An English version of the piece appears in The Guardian.

On refrigerants and Cypriot euros

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Capital controls continue in Cyprus. They’re getting more refined, but that could make them easier to retain. No one is having much success raising concerns about what this means for European integration.

On the other hand, if you buy a new Mercedes SL and try to register it in France, as of earlier this month, you can’t. But with that impediment to European integration, all hell breaks loose!

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The Czech Economy That Didn’t Bounce?

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The Czech republic has been making the news recently. On the one hand the country has been on the receiving end of massive, devastating floods, while on the other the country’s government was brought to the brink of collapse (and beyond)  by the resignation  of Prime Minister Petr Necas following the arrest of one of his most trusted aides on corruption charges. After the deluge I suppose.

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Why is this bank not like other banks?

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From the Bank for International Settlements Annual Report, the topic is the difficulty that central banks might face in exiting from the current stance of ultra-low interest rates and massive balance sheet expansion —

Central banks also face various political economy challenges as they consider
exiting. History has shown that monetary policy decisions are best when insulated
from short-term political expediency considerations; hence the importance of
operational autonomy. This applies with particular force in extreme conditions such
as those prevailing today. On balance, political economy pressures could make exit
harder and work towards delaying it […] Second, central banks’ finances could easily come under strain, raising questions about their use of public money, reducing government revenues and possibly even undermining the institutions’ financial independence. The public’s tolerance for central bank losses may be quite low. (p73)

Thus, the so-called “central bank for central banks” believes that central banks are essentially just regular banks that have been given a specific mandate by the government. That may reflect a loose extrapolation from the history of central banking in the USA and UK, but it’s not correct. Karl Whelan explains here. It’s no wonder that central banking attracts so much conspiracy-theorizing when central banks themselves are so obtuse about what they do.

Massive Volumenreduzierung

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The Guardian‘s scoop on GCHQ’s submarine cable tapping:

The processing centres apply a series of sophisticated computer programmes in order to filter the material through what is known as MVR – massive volume reduction. The first filter immediately rejects high-volume, low-value traffic, such as peer-to-peer downloads, which reduces the volume by about 30%. Others pull out packets of information relating to “selectors” – search terms including subjects, phone numbers and email addresses of interest. Some 40,000 of these were chosen by GCHQ and 31,000 by the NSA. Most of the information extracted is “content”, such as recordings of phone calls or the substance of email messages. The rest is metadata.

German politicians are horrified:

Sabine Leutheusser-Schnarrenberger, the German justice minister, said the report in the Guardian read like the plot of a film.

“If these accusations are correct, this would be a catastrophe,” Leutheusser-Schnarrenberger said in a statement to Reuters. “The accusations against Great Britain sound like a Hollywood nightmare. The European institutions should seek straight away to clarify the situation.”

The FAZ reports in some detail and talks to the German intelligence services:

Man arbeite ganz anders als die transatlantischen Partnerdienste, heißt es. Wenn Amerikaner oder Briten das große Schleppnetz auswerfen, dann sieht sich der deutsche Dienst als der Schwimmer, der mit einer technisch ausgefeilten Harpune darauf erpicht ist, den großen Fisch zu erlegen. Tatsächlich kann der BND mit seinen insgesamt rund 6500 Mitarbeitern den Abhördiensten der Amerikaner und Briten rein personell nicht das Wasser reichen. Anstatt große Datenmengen abzuspeichern, rastert und verdichtet der deutsche Dienst sie.

Dabei nimmt man in Anspruch, immer effektiver zu arbeiten. Hatte man 2010 noch 37 Millionen Kommunikationen, im wesentlichen E-Mails, gefiltert, so waren es im folgenden Jahr weniger als drei Millionen. Im Jahr 2012 liegt man bei weniger als einer Million Daten, weil die „Selektionsfähigkeit“ aufgrund bestimmter Suchbegriffe und Algorithmen verbessert wurde. Die Zahl der sicherheitsrelevanten Ergebnisse – es sind wenige hundert – ist gleich geblieben

I translate:

We work quite differently to our transatlantic partners, a source said. If the Americans or the British throw out a big trawl net, by contrast, the German service sees itself as the swimmer who sets out to catch the big fish with a harpoon honed on the cutting edge of technology. The BND, with around 6,500 staff, can’t keep up with the British or American SIGINT agencies in terms of personnel. Rather than storing huge volumes of data, the German service condenses and filters it.

This requires a constant effort to work more efficiently. 37 million communications, essentially e-mail messages, were caught in the filter in 2010, but less than 3 million the following year. For 2012, the figure is less than a million, because the system selectivity has improved with better algorithms and better search queries. The number of results that were relevant for national security, a few hundred, stayed the same.

Note the careful spin here. We don’t take all that traffic. No, only carefully selected nuggets out of it. The numbers are falling every year!

But it’s obviously impossible to filter the traffic, however selectively, without first pulling it in. And if the numbers are falling, it’s because the filtering process, and presumably the analytical capacity and computing infrastructure involved, has become more effective. You could even call it “massive Volumenreduzierung” or something. What a masterly piece of non-denial denial.

I note that Steffen Bockhahn of the Linkspartei has made this point at the foot of the piece.