European Council on Foreign Relations https://ecfr.eu ECFR conducts research and promotes informed debate across Europe on the development of a coherent and effective European foreign policy. Thu, 03 Dec 2020 09:10:31 +0000 en-GB hourly 1 https://wordpress.org/?v=5.5.3 https://ecfr.eu/wp-content/uploads/cropped-star_only_sq_black-32x32.png European Council on Foreign Relations https://ecfr.eu 32 32 How Europe should fight violent Islamist extremism https://ecfr.eu/article/how-europe-should-fight-violent-islamist-extremism/ Wed, 02 Dec 2020 18:36:26 +0000 https://ecfr.eu/article/how-europe-should-fight-violent-islamist-extremism/ For the last two months, a public furore about Islamist extremism has swept across Europe. First, French President Emmanuel Macron presented his five-point plan to fight “Islamic separatism”. Then, terrorist attacks hit Paris, Dresden, Conflans-Sainte-Honorine, Nice, and Vienna – among them a particularly brutal and horrifying one on Samuel Paty. This prompted a joint statement from EU interior ministers and officials on fighting terrorism. The public debate on terrorism is now full of risky and potentially counterproductive ideas, but shuns safe and productive ones.

Why controlling religion radicalises both people and the state

Among the proposed initiatives is the establishment of a European institute for training imams, an idea promoted by European Council President Charles Michel. The project is implicitly disrespectful of existing Islamic institutions in Europe, as Hisham Hellyer has laid out. Just as importantly, the idea is impractical because state-controlled religion breeds extremism – as can be seen in several Muslim-majority countries. For instance, the Egyptian state has cracked down on religion since the 1950s: it has rigorously trained and licensed imams, and dictated Friday sermons. The result has been an almost constant struggle between the state and extremists – which leads to greater authoritarianism and, in turn, produces a more intense extremist response as part of a vicious cycle.

Only credible local religious leaders and institutions can be the influencers the European Union seeks.

This has happened because state-controlled religion lacks credibility and authenticity – it pushes believers into what seem more genuine avenues of religious inspiration, such as those provided by celebrity televangelists. Rather than look for religious answers in official state-controlled fatwa (religious decisions) houses, many Muslims look for answers on the internet, now the world’s biggest fatwa house. That house is hardly controllable. Therefore, only credible local religious leaders and institutions can be the influencers the European Union seeks. And these institutions cannot be socially engineered through counter-terrorism funds (even if they can rely more on European state educational funding than on charity).

The impact of religion on European politics

European leaders still seem to understand little about religion, Islam in particular. Paul Tillich, a German-American philosopher and theologian, famously described religiosity as an issue of “ultimate concern”. What he meant is that religious attitudes are extremely difficult to negotiate or control, but they strongly influence decisions and politics. Shortly before leaving office as high representative for foreign and security policy, Federica Mogherini made a last-ditch attempt help the EU understand religious attitudes, including those of Islam, by creating a platform called the Global Exchange on Religion in Society – but it has not taken off. Politically, it is of consequence that Islam is “the most protestant of the great monotheisms, it is ever Reformation-prone (Islam could indeed be described as Permanent Reformation)”, as Ernest Gellner put it. It constantly morphs and escapes dogma – it is, in essence, mouldable. Its plasticity can have positive social and political implications: a European Islam has already developed, one suitable to democratic systems that have total freedom of religion and belief.

The need to avoid stigmatisation and generalisations

Nothing is as conducive to radicalisation as a sense of a hostile political environment. Yet the narrative promoted by Macron, Michel, and EU interior ministers creates just that. Picking on Islam leads to what Zygmunt Bauman called the “adiaphorization” of Muslims: treatment of them as the odd ones out, who do not understand “our values” or secularism, cannot integrate into society, and are prone to radicalisation and violence. It is enough to read Vincent Geisser’s research to see how different the reality is. For example, in France, the majority of Muslims are well integrated culturally and socially, while 70 per cent feel that they can freely practice Islam.

How to embrace local and decentralised solutions

Macron is correct in much of his diagnosis of the causes of violent radicalisation: external financial influence, ghettoisation, and weak state support in poor areas. But the primary solution lies in the kinds of initiatives that are already in motion in Europe. In Denmark, the Aarhus anti-radicalisation and deradicalisation model seems to perform well (for example, the number of outgoing foreign fighters has significantly decreased each year since the programme began). Building on local structures, it involves an extensive network of parents, social workers, teachers, youth club workers, outreach workers, and police officers – who are trained to respond upon encountering a person who may have been radicalised. The project is co-organised by the Department of Psychology and Behavioural Sciences at Aarhus University. Its goal is to redirect potentially harmful activism away from radicalisation and towards other avenues by embracing inclusion: meaningful participation in common cultural, social, and societal life. The Aarhus team is in regular contact with various Muslim communities, organisations, and mosques. The model’s deradicalisation initiatives include a special exit programme for returning foreign fighters.

Most interestingly, perhaps, the Arhus model rests on a scholarly presumption that all human beings – regardless of gender, religion, cultural background, life history, or social situation – confront the exact same fundamental tasks in life. Feelings of inclusion and equality allow them to carry out these tasks when their lives are disrupted. The least European leaders can do is not add to many Muslims’ feelings of exclusion, lest this endanger social cohesion. The most they can do is apply smart solutions such as the Aarhus one locally. Such solutions require time, effort, and research – but they are well worth it.

Patrycja Sasnal is head of research and senior fellow (Middle East) at the Polish Institute of International Affairs (PISM), and an ECFR Council Member.

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How to advance a European solution to Bulgaria’s and North Macedonia’s dispute https://ecfr.eu/article/how-to-advance-a-european-solution-to-bulgarias-and-north-macedonias-dispute/ Wed, 02 Dec 2020 08:30:00 +0000 https://ecfr.eu/article/how-to-advance-a-european-solution-to-bulgarias-and-north-macedonias-dispute/ On 16 November, North Macedonia’s prime minister, Zoran Zaev, received the Human Rights Award of the Friedrich Ebert Stiftung from Heiko Maas, the foreign minister of Germany. Zaev was brought to tears after leaders ranging from Alexis Tsipras to Ursula von der Leyen congratulated him on his success. But the celebration was short-lived: later that evening, much to everyone’s disbelief, the Bulgarian government announced that it would veto North Macedonia’s opening talks on accession to the EU. 

Sofia has demanded several changes to the negotiating framework for North Macedonia. It wants Skopje to acknowledge the Bulgarian roots of the Macedonian language; to declare that the use of the term ‘North Macedonia’ refers to the territory of the Republic of North Macedonia; to give up any claims on the Macedonian minority in Bulgaria; and to end its anti-Bulgarian rhetoric.

The veto was an especially abrupt about-turn for Bulgaria given that, as president of the Council of the European Union in 2018, the country had worked to reboot EU enlargement.

Bulgaria’s demands were an unpleasant surprise both because they broke the taboo on involving historical disputes in enlargement negotiations and because they came after a two-year Bulgarian campaign to speed up the EU integration process in the Western Balkans. Moreover, Bulgaria’s linguistic and historical claims are illegitimate under international law, as they constitute interference in North Macedonia’s internal affairs and call into question its right to self-determination. As for the inviolability of borders, the North Macedonian government changed the constitution on 2 December 2018 to state that “the Republic respects the sovereignty, territorial integrity and political independence of neighbouring countries.”

The veto was an especially abrupt about-turn for Bulgaria given that, as president of the Council of the European Union in 2018, the country had worked to reboot EU enlargement. To some extent, Bulgarian politicians felt comfortable in the environment of growing scepticism among EU governments and voters on the expansion of the union. Some of the persistent difficulties in the negotiation process – including the French veto in October 2019 and the Netherlands’ current objections to Albania’s potential accession – are due to that negative sentiment in Western societies. 

As the current president of the Council of the EU, Germany needs to set a date for the first intergovernmental conference between the EU, Albania, and North Macedonia before the end of December, lest the enlargement process languishes for several years. The subsequent Portuguese and Slovenian presidencies will lack the political energy and influence to invest in enlargement – and it is unclear (even to Paris) what the French one will do in 2022, an election year in France. 

The core success of the European Union has been in limiting the traditional interdependence between domestic politics and foreign policy. Of course, there have been many bilateral disputes within the enlargement process. Slovenia conditioned Croatia’s entry to the club on the resolution of a fisheries and territorial dispute. Cyprus is still a divided country. And Spain and the United Kingdom continued to dispute the status of Gibraltar while they were both EU members. But these issues never blocked the enlargement process.

As history has proven, letting small crises fester in the Balkans has never made for good foreign policy in the EU’s neighbourhood.

Yet it seems that, in 2020, the winning streak is over and every European country, small or big, will freely use foreign policy tools for short-term political benefits at home. On a larger scale loom Poland and Hungary, which are currently blocking the EU’s budget and its covid-19 recovery fund. Bulgaria has taken up the legacy of Greece, which vetoed what was then Macedonia’s accession negotiations for 28 years over the issue of the country’s name. 

Both Bulgaria and North Macedonia bear some responsibility for their spat – they never implemented the friendship agreement they signed in 2017 beyond establishing a historical commission, which has become a scapegoat in the breakdown in their relationship. All the other steps in the agreement exist only on paper: the road that runs between Sofia and Skopje still looks like a relic of the nineteenth century, and these are the only two capitals in Europe without a railway connection between them.

Bulgaria’s veto reflects the asymmetry of power between EU member states and candidate countries. The irony is that, in this case, the imbalance has helped amplify the kind of hatred between nations that European integration was designed to end. It is not hard to imagine how Hungary could use this approach to push its claims on the Serbian region of Vojvodina, or Croatia could do so in relation to its views on Bosnian and Serbian history. There are many good examples from Europe’s past and present of why historical disputes are bilateral issues and not part of the EU accession criteria.

Clearly, one should not underestimate domestic political challenges. The Bulgarian and North Macedonian governments are in similarly weak positions. The Bulgarian government may want to engage in symbolic politics as a cover for its missteps in handling an accelerating coronavirus crisis. Nevertheless, it is hard to explain the recent political crescendo in Bulgaria on the accession issue. According to a recent public opinion poll, more than 80 per cent of Bulgarians would not support EU membership for North Macedonia if the country did not meet the conditions on the historical dispute that Sofia has set out. In 2019 only 15 per cent of Bulgarians had a negative attitude towards recognising the modern history of North Macedonia. Given this volatility of public attitudes, Borisov could work to pass the 2021 budget, before leading Bulgaria into an election in spring and ending the veto. Whatever the outcome of the next election, he still has time to show the spirit of European unity that his counterparts in the European People’s Party would appreciate. 

Zaev, for his part, has tried to defuse the growing anti-Bulgarian sentiment in his country, despite the high political cost of doing so. The EU should support him in this, as his failure would damage the prospects of pro-European politicians in North Macedonia and the entire region. And it would send a powerful signal to the leaders of other accession candidate countries that constructive behaviour and compromise are not the path to EU membership. 

As history has proven, letting small crises fester in the Balkans has never made for good foreign policy in the EU’s neighbourhood. 

North Macedonia and Bulgaria can still rejuvenate their existing bilateral agreement, which would allow the former’s accession negotiations to start before the end of the year. But the sides will need to agree on clear goals and mandates and will require some support and encouragement from the German presidency and European diplomats. Even if North Macedonia and Bulgaria succeed in breaking the deadlock, they will still have much hard work to do in constructing a bilateral relationship that is resilient against unpredictable shifts in domestic politics.  

Goran Buldioski is director of the Open Society Foundations’ Berlin office and the Open Society Initiative for Europe. He is also an ECFR Council Member.

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How the EU should turn the tables on Hungary and Poland https://ecfr.eu/article/how-the-eu-should-turn-the-tables-on-hungary-and-poland/ Tue, 01 Dec 2020 11:33:24 +0000 https://ecfr.eu/article/how-the-eu-should-turn-the-tables-on-hungary-and-poland/ The EU should counter blackmail attempts by the governments in Warsaw and Budapest with calm determination. As long as Poland and Hungary maintain their vetoes, there should not be any agreements on new EU spending programmes, from which these two countries benefit the most.

Hungary and Poland are currently blocking the adoption of the EU financial package for the next seven years because they object to the new rule-of-law mechanism. If they stick to their veto, they will cause considerable political and economic damage – for the entire European Union as well as for themselves. How should the EU deal with that?

The EU should keep its calm. It must not allow itself to be blackmailed any further. Indeed, it has enough instruments at its disposal to counter the threats by Orban and Kaczynski.

In recent months, the negotiations were marked by a determination that Europe will stick together in this pandemic. All sides made significant concessions to facilitate the historic summit agreement in July, which cleared the way for the Recovery Instrument to help the most affected countries. The European Parliament and the other member states went a long way to get Hungary and Poland on board: The original proposal on the rule of law mechanism was substantially watered down and both countries received generous allocations from the Recovery Instrument despite their relatively mild economic slump in the first half of the year.

Poland and Hungary are about to turn everyone in the EU against them.

At the time, Hungary and Poland agreed to the overall package and thus also expressly agreed to a “conditionality regime to protect the budget”. It was clear that the details would have to be negotiated further. But not only Poland and Hungary had strong opinions on this matter. The European Parliament and a number of member states had a very clear, opposing position. The result of these negotiations was a classic EU compromise that made no one truly happy. Yet one thing is certain now: there is a broad political consensus in the EU that EU funds should only be made available to countries in which an independent judiciary and functioning anti-corruption authorities guarantee that they are used properly. It was not only western European countries that insisted on this – others like Slovakia and Romania did as well.

If Hungary and Poland – now supported by the Slovenian prime minister who a few weeks ago congratulated Trump on election night – wish to put the whole package into question, in spite of the compromise that 24 other countries and the Parliament are willing to make, they are playing with fire. The governments in Warsaw and Budapest want to make their citizens believe that a long-term blockade of the package would cost them nothing, or even could bring financial benefits. They argue that they can easily live with the old multiannual financial framework (MFF). But this is a dangerous fallacy in the middle of the second wave of the pandemic.

Practically all regular EU spending programmes will end in December. Poland and Hungary have received net pay-outs from these pots of €63.1bn and €27.3bn respectively over the last six years – more than any other EU country. The programmes for the next seven years are currently being renegotiated. It is true that as long as the vetoes are maintained, the old MFF ceilings would formally continue to apply. However, without new spending programmes not a single new cent could be budgeted.

Here the German Council presidency and the European Parliament should be very clear: The EU budget deal is an overall package. As long as two countries hold the entire package hostage, there can be no agreements or final votes on individual spending programmes. Poland and Hungary are abusing the package logic for their blackmail attempt – and it is precisely this logic that should now be turned against them.

The decision to freeze negotiations on spending programmes would not be a retaliatory measure against Poland and Hungary, but rather the result of a fundamental negotiation rule: Nothing is agreed until everything is agreed. It would be also show that the EU is handling the impasse in a measured way. Although it may be tempting, now is not the moment for cobbled-together solutions or half-baked alternative measures. This is the time for calm determination in order to get a solid agreement across the finish line – exactly as it stands now. At the same time, such a step would send an important signal to the electorates in both countries that the actions of their governments will have palpable economic costs.

Budapest and Warsaw should not be under the illusion that only the large recipient countries of corona aid are particularly affected by their veto. The opulent rebates for Germany, the Netherlands or Sweden are also victims of their intransigence. Poland and Hungary are about to turn everyone in the EU against them. A short look in EU history books should be enough to understand how unpromising such strategies have been in the past.

Orban and the Polish Law and Justice government have climbed a very high tree. In order to come down and to save face, they may need a little assistance. However, in substance there can be no further concessions from the other member states and the European Parliament. The rule-of-law mechanism will be adopted, and both governments know that.

However, if both want to remain sitting on the tree for good, there is no choice but to cut the tree down. The rest of Europe cannot wait forever. The economic situation is simply too dire for that. It would take great efforts to make the Recovery Instrument a reality, even against the will of Hungary and Poland. But past events show us that where there is political will, there is usually a way. In this case, the regular EU spending programmes could also be approved by a majority of the member states and changed in such a way that Poland and Hungary would be left behind. Hungary and Poland surely know that the majority for this would be certain if they continued to antagonise the rest of the EU.

Despite this, the political and economic damage of failing to reach an agreement would be immense. Europe has benefited enormously from its unity over the summer, not least in the form of very low financing costs for many member states, reflecting increased confidence in the resilience of the European project. This unity would be gone. The rest of the EU would recover from this in the medium term. But the experience that in a moment of deep crisis, Poland and Hungary were more interested in domestic political chestbeating than in European cohesion would leave a permanent mark in the collective memory. And in the EU, we always see each other twice.

This commentary was originally published in German by Zeit Online and in Polish by Gazeta Wyborcza.

Lucas Guttenberg is deputy director of Jacques Delors Centre at the Hertie School.

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Sovereign Europe, dangerous world: Five agendas to protect Europe’s capacity to act https://ecfr.eu/publication/sovereign-europe-dangerous-world-five-agendas-to-protect-europes-capacity-to-act/ Tue, 01 Dec 2020 08:01:08 +0000 https://ecfr.eu/publication/sovereign-europe-dangerous-world-five-agendas-to-protect-europes-capacity-to-act/ Summary
  • In the last year, Europe has begun to recognise the need to defend its sovereignty in a threatening world.
  • Covid-19 has revealed and exacerbated many of Europe’s existing vulnerabilities; the European Union and its member states remain unable to act autonomously in key areas of national life.
  • Based on ECFR research, we propose five sovereignty agendas in health, economic, digital, climate change, and traditional security, all designed to promote a more sovereign Europe on that issues that matter most to Europeans.
  • Europe must not relinquish its rules-based approach or lapse into protectionism. But, to protect the open, multilateral order they so cherish, Europeans need to promote new rules permitting them to take action against countries that undermine the international system.
  • The EU’s €750 billion pandemic recovery fund offers the chance to underwrite this ambition – but, ultimately, Europeans need to master the art of acting as a geopolitical force in the world.

Introduction

At the end of April, the Netherlands Trade and Investment Office in Taipei changed its name to “Netherlands Office Taipei,” echoing moves made by Australia, Japan, Britain, and Poland over the last few years. But the Chinese response was different this time. As well as making diplomatic representations, Chinese government newspapers carried pieces attacking the Dutch government, called for boycotts of Dutch products, and halted the shipment of medical supplies to the Netherlands. This came at a time when the Netherlands had almost 40,000 confirmed cases of covid-19 and a higher death toll than the official numbers in China.

EU member states are increasingly facing challenges that cut across borders – pandemics, financial crises, cyber attacks, climate change, refugee crises – and that can only be solved with collective action. But, today, rather than coming together around common solutions, many great powers instrumentalise their connections to compete with one another. China’s increasing strength and assertiveness, combined with its authoritarian ethos, represents the biggest challenge. But China’s “wolf warrior” diplomacy is part of a wider pattern of states – from Russia and Turkey to Saudi Arabia and Iran, to the United Arab Emirates and even the EU’s closest ally, the United States – instrumentalising interdependence to achieve geopolitical goals. As a result, the foundation on which the European Union was built – a rules-based multilateral system and an ever more globalised economic system – has grown increasingly wobbly.

To manage in this new world, the EU and its members need to embark on a broad-based effort to ensure their strategic sovereignty. Such an EU strategic sovereignty effort would seek to recalibrate the EU’s role in a geopolitical world in order to strengthen its bargaining power and capacity to act in line with its interests and values. The goal is not to walk away from a rules-based order but to deter other players from undermining it. It aims to equip Europeans with the tools they need to bargain effectively within an interdependent system, to take countermeasures against spoilers of the international system, and to make their own decisions in a more competitive geopolitical environment. Ensuring strategic sovereignty does not imply transferring power or national sovereignty to Brussels but rather reclaiming it from outside players – be it states such as Turkey and Russia or companies such as Huawei and Amazon. Polling conducted by the European Council on Foreign Relations consistently shows that large numbers of EU citizens want an EU that has this power and that can control its external borders, promote more resilient supply chains, and act decisively on climate change.

Frustratingly for many Europeans, the new geopolitical competition resembles more a chess game between cynical statesmen in the mould of Metternich and Talleyrand than the world the EU founders had hoped to make. The EU was explicitly designed to consign this type of behaviour to an earlier era. The EU’s very nature means that openness and cooperation are how it operates in the world. Under any circumstances, Europeans must continue upholding and promoting a rules-based multilateral order by aiming to find global solutions to global problems, from preserving free trade to fighting climate change, from preserving international peace and security to promoting sustainable development. Simply put, any retreat into protectionism would be self-defeating.

But it has become very hard to insulate the concerns of European citizens about their health, their prosperity, and their security from geopolitics. China, Russia, and even at times the US are happy to violate the spirit and sometimes the letter of international norms, and to instrumentalise their economic relationships to achieve political or security goals – and vice versa. This has already undermined the international order to a degree that threatens the ability of member states to function as autonomous entities and to express their collective will through the EU.

To protect the international liberal order, and its own spirit of openness and cooperation, the EU needs to develop the tools to deter this type of destructive behaviour. To establish this deterrence, the EU should seek to act multilaterally when it can but be prepared to act in coalitions of the willing or even autonomously if it must.

To understand the challenges, ECFR undertook a study in 2019 that looked at six thematic areas in which Europeans need to increase their strategic sovereignty – defence, multilateral affairs, artificial intelligence (AI), secondary sanctions, hybrid threats, and international economic policy. That study produced 56 recommendations for improving the European capacity to act in those areas and recommended institutional changes at both EU and member state level to implement them. The central conclusion of that effort was that the global and interlinked nature of today’s sovereignty challenges requires greater integration of EU policymaking. This integration is needed both among member states and across policy siloes in Brussels and other capitals, to embed the geopolitical dimension in the design of European policies.

In the last year, member states and the EU have made good progress on those and other efforts, but the task has become more urgent as the covid-19 crisis has accelerated the trend toward increased geopolitical competition and weaponised interdependence. To build on last year’s work and reflect on those developments, ECFR commissioned three groups of researchers to map the EU’s vulnerabilities in the three regions that are the most important for Europe’s security and prosperity: the eastern neighbourhood, the southern neighbourhood, and east Asia. Each region contains its own challenges but China, the US, and particularly the struggle between them crosses all these regions. Those two geopolitical rivals are already fighting a new sort of war, weaponising the infrastructure of globalisation to compete with each other. One of the unintended consequences of their competition has been to create space for mid-sized powers – from Russia and Turkey to Iran and Saudi Arabia – to become assertive and weaponise interdependence in their own ways, thereby further undermining the global order, as well as the ability of EU member states to pursue their interests in different regions.

The US presents the most subtle challenge. A long history of deep EU-US cooperation and shared democratic values underpin what is arguably the most important partnership in the world. Quite simply, the EU cannot build the world it wants to see, nor thrive in this imperfect one, without a strong and effective relationship with America. Most EU member states deeply value their bilateral relationship with the US and rightly object to putting that key relationship at risk. But they have become dependent on the US to a degree that is politically unsustainable in American politics. Worse, the US sometimes abuses its central place in the international order and profits from Europe’s asymmetric dependence on its military and financial systems to gain geopolitical and geo-economic advantages. These actions can threaten not just the US relationship with Europe but also the multilateral order that America was so instrumental in building.

This paradox means that the strategic sovereignty agenda cannot seek to reduce cooperation with the US even as it aims to achieve greater European capacity to act. To the contrary, a key goal of the strategic sovereignty agenda is to make the EU a more effective partner for the US, one that can relieve it of some international burdens, work with it to reform multilateral institutions and solve global problems, and help it see value in a rules-based international order. But the EU cannot accomplish these goals if it remains incapable of bargaining with the US on a more equal footing.

The debate about Europe’s autonomy is a security problem that transcends the military sphere and no longer follows the geographical lines of a traditional map. Today’s geopolitical struggles reach into every area of modern life – through Europe’s data streams, its borders, its supply chains, its climate, and even its respiratory tracts. Accordingly, Europe requires a multifaceted response that looks beyond defence policy and focuses on the effect these issues create in Europe, not on their geographic origins. Europe needs to increase its autonomy to act on the issues that will matter to European citizens and drive its regional strategies through that effort.

Such autonomy should not be confused with a retreat into isolationism or protectionism. Europe’s openness and the resulting interdependence are the very essence of the European integration project. The well-regulated movements of goods, money, people, and ideas sit at the heart of the European construction. The point of strategic sovereignty, as the European Commission’s idea of “Open Strategic Autonomy” also expresses, is to sustain that openness by increasing Europeans’ ability to act independently and shape the world around them.

Five areas stand out, in both the public debate and European policymaking, as the principal cross-national threats to European strategic sovereignty. Various powers are instrumentalising asymmetric interdependencies in healthcare, economic relations, digital technology, security, and climate issues in a way that reduces Europe’s capacity to act autonomously and to protect the interests and values of its citizens. As such, this paper explores the varieties of sovereignty challenges – the health, economic, digital, and climate challenges, as well as the traditional security threats that Europe faces in the parts of the world that are most vital to European interests.

Obviously, not every challenge is a sovereignty challenge. But, in each of the five areas, other powers are seeking to restrict Europe’s ability to promote and protect its own values, even within Europe. In a globalised world, the EU and its member states cannot, for example, protect the health of their own citizens if they cannot secure supply chains of key material against disruptions and ensure that their citizens have access to vaccines. This paper proposes five agendas for how Europe can recover its capacity to act in each of these five areas.

After a long period of denial, most European policymakers in both Brussels and member states now broadly recognise that preserving what they have built in Europe requires a forceful response to the new geopolitical age. As a result, a proliferation of terminology and efforts like this one has emerged from think-tanks and government bodies. All reflect a broad sense that Europeans need to participate in this global competition or they will lose. Terms such as “European sovereignty”, “strategic autonomy”, and “open strategic autonomy” all seek to address this broad problem even as they emphasise different dangers or aspects of it. This intellectual flowering and the resulting terminological debate is important. But it often distracts from the core issues and hides the substantive debates about how to operationalise an increased European capacity to act in a competitive world.

More to the point, these terminological debates reflect the fact that the internal struggle – between member states and between different institutions within Brussels – remains the principal impediment to implementing these agendas (whatever you call them). This is no small difficulty, but the five sovereignty agendas come at a moment when Europe has the opportunity to use the €750 billion recovery package to fund high-profile projects that make Europe visibly more secure and economically viable – from vaccines and stockpiles of medicine to massive solar investments and digital innovations – in the tsunami of uncertainty that covid-19 has unleashed. The strategic sovereignty agenda is designed less to introduce a new term into the debate than to help policymakers read the new map of power and to build Europe back better.

I. Health sovereignty

The coronavirus pandemic has demonstrated that the ability to nurture and protect an effective health system is a question of security, and that the EU and its member states are not yet able to maintain European autonomy in this realm. The results are already clear: the pandemic will likely reduce Europe’s disposable income by 5.9 per cent in 2020 (roughly €600 billion), with much more severe hits in specific regions. The country that develops and deploys a covid-19 vaccine first will reap enormous geopolitical and economic advantages. Seeking to capture these benefits, China and Russia have deployed their cyber hackers against targets in the US and Europe, while the Trump administration has sought simply to acquire European vaccine assets. 

The EU depends on effective international cooperation to tackle its health problems, but it also competes for scarce resources and key technologies with key rivals. Multilateral institutions such as the World Health Organization and the World Trade Organization (WTO) are not able to ensure effective international cooperation in their current setup. Early on in the pandemic, EU member states came to realise that, despite their economic power, they were not able to provide sufficient medical protection equipment in times of crisis. Furthermore, healthcare systems across Europe vary dramatically, which makes cooperation and convergence difficult – and Europeans even more vulnerable.

In response, the EU and its member states have made enormous strides in a relatively short time to increase their capacity to protect their health sovereignty. The EU has already begun to use its regulatory power to improve its readiness to deal with health crises and diversify supply chains for critical medical products and protective gear. One working group of the European Medicines Agency’s covid-19 taskforce focuses on the coordination of efforts to manage the risk of supply shortages of centrally authorised medicines. It also liaises with industry trade associations to improve the resilience of supply chains. The EU is exploring the idea of shifting manufacturing to additional countries and stockpiling strategic reserves of some medicines or protective gear.

This all makes for a good start amid a crisis. But a broader, more institutionalised, form of health sovereignty needs six essential pillars:

  • Protecting the single market: The single market is arguably the EU’s greatest achievement, but the pandemic dramatically affected its capacity to function. Member states closed their borders, cut off tourism and travel within the single market, and commerce slowed down. To avoid this in the future, the EU needs a complete picture of healthcare infrastructure and dependencies across the union, common strategic stocks of health materiel, a strengthened and expanded civil protection mechanism that can coordinate aid to member states, and increased efforts in scenario planning and forecasting for the next such crisis.
  • Promoting healthcare standards: Healthcare inequality across the EU meant that EU states experienced very different crises. Naturally, this affected solidarity. The solution within the current EU competences is to promote health standards across the union, systematise patient and personnel mobility, and promote European health standards globally.
  • Strengthen investment protection: The EU and its member states need to extend the implementation of national and EU investment screening programmes to the health sector and increase their effectiveness. The EU took a big step in this direction in activating a new EU investment screening mechanism in October 2020. But it remains a little unclear how broadly it will be used and how it will link up to member state mechanisms. The core effort should be to demonstrate the consequences of geopolitically motivated takeovers to potential global investors.
  • Protect healthcare supply chains: The EU needs to review its healthcare supply chains to determine what protection strategies it should consider adopting, including reshoring, near-shoring, diversification, and addressing chokepoint vulnerabilities. This is part of a general strategy to reduce asymmetric dependency in supply chains (see below) but will have special characteristics in the health sector. For example, the EU could aim to increase health sector resilience through private action by using regulation and incentivisation.
  • Promoting and funding medical research and development: The EU and its member states need to devote more money to medical research and development. But, perhaps more importantly, they need to consider a mechanism that could quickly mobilise investment funds for health research and development in emergencies, ones similar to existing Chinese and American mechanisms.
  • Coordinate a global health agenda across multilateral institutions: The covid-19 pandemic drove home the fact that global health is only as strong as the weakest links in our systems. As a leader in global development, the EU has an opportunity to use its resources to promote an ambitious multilateral agenda aimed at helping the most vulnerable countries. In that sense, healthcare might provide an interesting model for re-energising the multilateral system at a time when it is under great pressure. The EU and its member states need to leverage their presence in various multilateral institutions to both reform their capacity to respond to emergencies and bring them closer to European standards. Europeans can help accomplish this by forming European health caucuses within international organisations, convening global initiatives on European platforms, and seeking to unblock multilateral institutions.

European Commission president Ursula von der Leyen took up some of these proposals in her September 2020 state of the union address. She specifically proposed to strengthen the European Medicines Agency, to begin EU-level strategic stockpiling of medicines and other health equipment, and to create a European version of BARDA, the US research agency, to drive European health research and development. As the president acknowledged, much is left to be done and it is time to discuss whether the EU needs more competencies in healthcare to achieve some of the goals above.

II. Economic sovereignty

The complex economic interdependence that has emerged in the era of globalisation created multiple asymmetric dependencies that have limited European freedom of action. There are many such dependencies. Firstly, the EU remains highly dependent on functioning supply chains around the world, particularly in key sectors in China such as the automotive and electronics industries. But, as the covid-19 crisis illustrated, those supply chains are vulnerable to disruption caused both by acts of God and acts of people. The EU relies on scarce natural resources for energy and for lithium, cobalt, and rare-earth metals to make high-tech industrial goods. This dependency will only increase if the EU is to meet its climate goals. Russia, China, the US, and others have all tried to use their control over these resources to exact geopolitical concessions, though with limited success.

Secondly, the EU depends on the maintenance of a level playing field for its companies to remain competitive on the international market. But key EU trading partners, particularly China, heavily subsidise their own national champions, favour their access to credit, and otherwise distort that competition.

And, thirdly, the EU uses the international financial system to invest its savings, channel its investments, and fund its government deficits. But key EU partners, particularly the US and perhaps soon China, use their asymmetric control and their capacity to apply sanctions to promote their geopolitical interests.

The previous European strategy for managing these types of asymmetric dependencies was to try to replicate as much as possible the European economic governance system on the global level. Organisations such as the International Monetary Fund (IMF), the World Bank, and the WTO are supposed to regulate the exploitation of asymmetric advantage. But, currently, that system is in disarray. The US-China dispute has put the WTO at risk of disintegration – its dispute resolution framework is already effectively inoperable. Meanwhile, the Chinese and the Russians are busily constructing alternative financial safety nets and institutions, such as the New Development Bank, the Asian Infrastructure Investment Bank, and those tied to the Belt and Road Initiative. These mechanisms play similar roles but without all of the troublesome conditionality and regulations that characterises the existing system. That feature makes financial deals with China and Russia much more attractive to many regimes around the world.

A more complete unravelling of the post-second world war financial order remains possible: growing tensions between China and the US could lead the US to assert dominance over the Bretton Woods system (where it holds a blocking minority) and cause China, Russia, and perhaps others to fully secede from it and build a separate system of bilateral, regional, and multilateral financing arrangements.

The EU and its member states are making various efforts to reinforce the global governance system. They are, for example, seeking to reform the WTO, promote a global initiative to combat climate change through the United Nations Framework Convention on Climate Change (UNFCCC), and support IMF programmes designed to help countries that are struggling financially. They are particularly seeking a loose alliance with like-minded countries such as Japan, Australia, South Korea, and even India that might form a democratic caucus. These efforts may have some effect. But with China, Russia, Turkey and even at times the US increasingly defecting from that system, it seems foolish to rely on global governance to continue to protect European economic sovereignty.

This implies that the fundamental effort in an economic sovereignty agenda must be to reduce asymmetric dependencies on external powers without resorting to protectionism or even greatly reducing international trade and investment activity. The European Commission has already recognised this need to balance greater autonomy with openness in its effort to promote “open strategic autonomy”. But there are many such dependencies, and this is a never-ending task. The following key steps could reduce prominent European vulnerabilities at a very manageable cost.

Diversify and, if necessary, relocate supply chains

The European Commission has long sought to reduce Europe’s dependence on other countries for critical materials and technologies, as recently exemplified by the New Industrial Strategy for Europe it launched in March. Businesses retain the primary responsibility and capacity for ensuring the stability of supply chains, but as recent events during the pandemic demonstrated, government has a role, particularly in moments of crisis or for preventing long-term geopolitical vulnerabilities. And there have been notable successes: the EU’s progress in the energy market shows how to reduce asymmetric dependencies without reducing trade volumes. The key is both diversification and more effectively embedding trade in key goods in a multilateral regulatory framework that reduces the ability of foreign powers to manipulate supply.

In the most difficult case of China, this means creating incentives to encourage alternative suppliers where possible and to build up European strategic reserves of essential products. But, more creatively, it means taking advantage of the growing discomfort around the world with China’s outsized influence to coordinate industrial policies and technology regulation with other technology powerhouses, such as Japan, South Korea, Taiwan, and the US. Europe could supplement this with deeper trade and investment agreements across Asia, especially those with India and members of the Association of Southeast Asian Nations (ASEAN). The EU-Japan free-trade agreement would be a good model to follow.

The EU and its member states have a real opportunity in this regard to make connectivity a geopolitical tool by investing in digital infrastructure, norms, and standards that might link together like-minded states across the region. The 2019 EU-Asia connectivity strategy was an initial step in the right direction, but it requires better-coordinated funding to address the global dimension of the China challenge. The EU should take the EU-Asia connectivity strategy global and engage in the financial reshuffling needed to bring together the different strands of economic cooperation, trade, and development. It should turn this relatively limited and highly defensive economic agenda into one that can create a counterweight to China’s new global role.

Of course, this remains a highly technical area that depends on a thorough analysis of vulnerabilities of the supply chains. But cross-regional comparison implies that there are opportunities to reduce asymmetric dependencies by relocating some economic activities to the European neighbourhood. While some degree of ‘on-shoring’ might be needed in certain strategically important sectors, this will in most cases be prohibitively expensive and unnecessary. Both diversity and security of supply can often be achieved through ‘near-shoring’ – that is, providing incentives to locate key economic activities in the European neighbourhood, including in the Balkans and Africa. As the EU’s high representative for foreign and security policy, Josep Borrell, recently proposed, it might be “sensible to have more activities in North Africa or elsewhere in Africa rather than Asia from now on”. Accomplishing this will require intra-regional connectivity through initiatives in eastern Europe and Africa, to create incentives for companies to move complex supply chains outside of China’s immediate sphere of influence.

Enforce a level playing field in both domestic and international competition

The misuse of state aid and other instruments means that the EU needs to internationalise its competition policy. The EU should vigilantly monitor distortions of international trade and investment resulting from the support provided to industry by foreign governments. Direct and indirect subsidies should, if possible, be tackled in the context of the WTO. If this is not possible, the EU should review its competition policy instruments and seek ways to apply them to state aid granted by foreign governments.

Deter and respond to secondary sanctions

Sanctions are an important tool for ensuring European strategic sovereignty. If used effectively, they help preserve the EU’s capacity to act. The EU has implemented 42 sanctions regimes targeting 34 countries, making the bloc the second most prolific user of economic sanctions in the world.

At the same time, many European officials have now recognised that secondary sanctions, mostly those emanating from the US, have seriously limited the EU’s capacity to act on issues such as the Iranian nuclear file. But they have not as yet found a method to avoid them – the widely touted Instrument in Support of Trade Exchanges (INSTEX) payment channel has, in practice, amounted to little. The EU not only needs a beefed-up and more widely supported INSTEX, but also a broader and more institutionalised payment channel that is insulated from the US financial system and thus beyond the reach of US secondary sanctions. The EU should also consider trade defence instruments that will allow it to stand ready to respond to unilateral sanctions it disagrees with through appropriate and proportionate economic retaliation measures. In this way, it could hope to deter such sanctions in the first place.

A further step in this regard would be to enhance the international role of the euro. This is a broad-ranging effort that would have other positive and negative consequences beyond simply insulating Europe from US secondary sanctions. But, overall, it would greatly enhance the ability of the EU to act independently in the economic realm. The decision in the context of the European recovery plan to allow the EU to borrow on the capital markets is a potentially important step in the creation of euro-denominated safe assets, which are a necessary precondition for an expanded international role for the euro. The EU should build on this to create the deep and integrated capital banking markets that would both enhance the role of the euro and the autonomy of European policy.

Protect assets critical to national security from foreign interference

Despite the recent progress it has made, the EU needs a comprehensive European Investment Screening System. Because foreign investment provides access to the entire internal market, the EU cannot regard investment control as a purely national affair. Currently, only 14 EU countries have investment screening mechanisms, and these differ greatly in their scope and application.

These investments threaten to create undue political pressure and European disunity. For example, in March 2018, EU members of the UN Human Rights Council abstained on a Chinese resolution that redefined the defence of human rights in terms of state-to-state cooperation according to “mutual interests”. China had put pressure on vulnerable EU states, and abstaining was the only way of preventing internal EU division.

The European Parliament agreed in 2019 that the EU should develop a common approach to, and common procedures for, the screening of foreign investments, including empowering the European Commission with the right to recommend the prohibition of a foreign investment on security grounds. The EU activated its investment screening mechanism in October 2020. The trick now will be to ensure that it operates effectively and coordinates well with the member states. This mechanism is an important step in the right direction, but more needs to be done to ensure member state cooperation and address the common dimension of decisions relating to foreign investment. The Council of Ministers, for example, should be given the right to decide by a qualified majority vote on whether to block a foreign investment based on a European Commission recommendation. The EU should also develop instruments, such as a dedicated investment fund, to offer member states alternatives when foreign investments are blocked.

Hedge against the blockage of multilateral financial institutions

The EU should preserve and leverage its influence over multilateral financial institutions. But this effort is not about preserving the outdated quotas and voting shares that give European countries strict technical control over their operations. Unless these shares are rebalanced to more accurately reflect current power realities, countries such as China and India will simply find alternative mechanisms, leaving European countries enjoying outsized power in diminished institutions. Rebalancing should also be accompanied by a consolidation of European chairs – although, in some cases, that might not increase European influence directly.

The EU should hedge against the possibility that such efforts will not always be successful. Specifically, the EU should prepare for a politically or geopolitically motivated stalemate over the provision of IMF assistance to a neighbouring country. It should consider how an external role could be given to the European Stability Mechanism or how to strengthen EU budget-funded balance-of-payments instruments available to third countries.

III. Security sovereignty

The most sacred aspect of sovereignty is the ability to defend the nation against external threats. Since the end of the cold war, most EU member states have not felt substantially threatened in this regard. They were collectively among the most powerful military states in the world, and they sheltered behind the protection of the US. But an assertive China, a resurgent Russia, an America more focused on the Indo-Pacific than Europe, and a host of asymmetric threats from other powers and non-state actors means that most EU member states now face new security vulnerabilities that they lack the capacity to defend against on their own.

Under any circumstances, security will remain a member state competence and the member states will continue to possess the vast majority of security capabilities. Similarly, Europeans will continue to want the cooperation and assistance of the US in this area as long as it is on offer. But it has become clear that there is an increasing role for European-level cooperation and coordination to enhance member states’ capabilities and to reduce dependence on the US.

There is an ever-greater need for such capabilities. Beyond the traditional vulnerabilities, Russia has pioneered innovative ways to turn asymmetric interdependence into security vulnerabilities. So-called ‘hybrid’ efforts range from cyber attacks on critical information systems to the disruption of critical services such as energy supplies or financial services, to the erosion of public trust in government institutions and the deepening of social divisions. These are obviously not new techniques, but the EU’s digitalised economy and increasingly open and interconnected society have provided many more attack points than in previous times. Hybrid threats often target wider areas than a single member state and can undermine the unity of the EU, as well as destabilise Europe’s neighbourhoods with disinformation, election interference, and the use of proxies to divide societies.

Despite these problems, security is the most conceptually developed aspect of the sovereignty agenda. The long debate on European defence and strategic autonomy has now led up to the Strategic Compass process, which aims to specify how the overarching priorities defined in the EU Global Strategy can be implemented and which capabilities the EU should provide. The exercise begins with a common threat analysis – the first such attempt at the European level. The Strategic Compass process could indeed help develop a much-needed common European security culture and help close the gap between the reality of the security challenges and the development of European capabilities.

In this process, the EU should have the ambition of achieving strategic sovereignty in security and defence. The EU is highly vulnerable to threats from China, Russia, Turkey, and other state and non-state actors – and it is dangerously dependent on the US for its security. The efforts thus far – such as PESCO (Permanent Structured Cooperation), the European Defence Fund, and the European Peace Facility – are moves in the right direction. But, even though they are impressive from an EU institutional perspective, they are inadequate relative to Europe’s security vulnerabilities. That situation will not fundamentally change under Joe Biden. Worse, they are underfunded relative even to their original, fairly modest, ambitions.

But funding is not the main point. Many member states’ insecurity about security is making it much harder for Europeans to develop common approaches to geopolitical issues – and opening the way for others to divide and rule European countries. The European Recovery Fund offers some opportunity to increase or, at least, restore funding to defence initiatives, even if this remains difficult politically. That is important but, in the end, the issue is less the amount of money than that money already available is spent in a way that furthers European solidarity and provides capabilities to counter emerging security threats to Europe. According to the European Parliament, over 80 per cent of defence procurement remains national.

For that purpose, the EU and its member states need more far-reaching efforts, including:

  • Enhancing a European pillar in NATO. Improving the capabilities of European nations within NATO, under that organisation’s auspices, to conduct at least one major joint operation and three smaller joint operations for crisis management with very limited US support.
  • Establishing European forward-basing to reassure eastern Europeans and reinforce solidarity. Establishing a Fort Charlemagne in Poland rather than the previously mooted Fort Trump or another vehicle for a US-led presence in eastern Europe.
  • Developing a pan-European capacity to investigate the sources of cyber attacks. Transforming the patchwork of European cyber security organisations into a cyber security institution with centralised functions that can set standards, share information, and coordinate responses across similar national organisations in member states.
  • Establishing a European Security Council to enable more rapid and effective decision-making in foreign policy. Creating a body based on an inclusive subset of EU members and, possibly, the United Kingdom on a rotational basis that could, in close coordination with the high representative, respond to European foreign policy crises.
  • Stepping up solidarity operations. Expanding existing operations that bring broad European capabilities to bear on problems that are critical for specific member states, such as Estonian troop deployments in the Central African Republic, French air policing in the Baltic states, and various member states’ contributions to migration patrols in the eastern Mediterranean and the Aegean.

Beyond these steps at home, Europeans need to develop regional security strategies for key regions. One overarching consideration is the effect of the US-China rivalry that will reduce the European capacity to act in these key strategic regions. As the new cold war between the US and China heats up, they are increasingly asking (or coercing) third powers (including Europeans) to subordinate other concerns to the dictates of their emerging competition. This dynamic is familiar from the cold war and is clearly not conducive to maintaining strategic sovereignty.

The core of the issue is not, for example, whether Europeans should allow Huawei to provide 5G telecommunications equipment for their domestic networks. The issue is whether the US, through economic or strategic coercion, should make that decision for Europeans or whether Europeans should weigh up the risks according to their own interests. Regionally, this means that Europeans need to understand their own interests in any given situation rather than simply following the US lead or responding to a new Chinese presence.

But, of course, each region has its own particular and important security dynamics:

Middle East and North Africa: Balance Europe’s current focus on migration and counterterrorism with steps towards lasting regional stability

In the Middle East, it is becoming increasingly clear that the EU and its member states need to start to decouple their security policy from that of the US, which has become toxic and unreliable in the region. This means staking out positions on issues such as Syria, the Kurds, and Iran and then pushing for them, using whatever allies are available on the given issue. This approach will lead to occasional disagreements with the US, but it will also increase European freedom of action and leverage with the country. In the end, European Middle East policy based on a clear understanding of European interests will likely hew closely to the US approach, with which Europeans continue to share many interests on issues such as nuclear non-proliferation and reducing instability.

The traditional reliance on the US has, so far, led the EU and its member states to tackle their primary interests in the Middle East mostly in defensive terms – that is, trying to prevent disorder spilling over into Europe instead of playing a greater role in building long-term stability in the region. So, for example, when it came to migration, in recent years the EU invested heavily in border control – at its external border but also in cooperation with third parties in Africa. The €4.7 billion EU Emergency Trust Fund for Africa is supposed to help address the root causes of irregular migration, but it is insufficient to the task. In a similar way, the EU has stepped up its measures to decrease the threat posed by terrorism and limit its own vulnerability. It reinforced checks at external borders, enhanced firearms controls, adopted rules to prevent terrorist financing, created a dedicated body to curb terrorist propaganda online, and tried to improve information exchange with, for instance, the launch of a European Counter Terrorism Centre.

These efforts are worthwhile, but they are fingers in a dike behind which a sea of instability churns ever more violently. The EU has been rather unsuccessful in crisis management and resolution, which is business it needs to get into more in the Middle East and North Africa as the gradual US withdrawal opens up space for other actors. To this end, the EU and some key member states should:

  • Use the EU’s perceived neutrality in the region to advance mediation processes in places where the US or other actors have traditionally dominated such efforts.
  • Use European military power as a source of leverage in ongoing conflicts.
  • Continue to support existing reform efforts to build efficient and representative governance systems but link them to conflict resolution processes.
  • Deploy economic influence and even arms sales as levers to reduce instability and improve governance.

Russia and the eastern neighbourhood: Engage in capacity-building to counter hybrid threats, corruption, and cross-border crimes

Russia’s increasingly malign hybrid activities in the eastern neighbourhood require a European response. There has been one, to a degree. In 2015, reacting to Russia’s hybrid activities in Ukraine, the EU agreed to step up its efforts in countering hybrid threats. The creation of an EU Hybrid Fusion Cell was supposed to improve the exchange of intelligence and information among member states. The European Centre of Excellence for Countering Hybrid Threats in Helsinki supports EU member states and NATO allies with research, training, and exercises. In a similar way, four EU pilot projects are currently setting up a European Cybersecurity Competence Network – which, together with a Competence Centre, aims to strengthen and sustain Europe’s cyber security competence. Nevertheless, cooperation continues to prove difficult, and cyber and intelligence assets remain exclusively in the hands of individual EU member states. Corruption at home continues to enable Russia and other actors to obtain influence and undermine reform in eastern neighbourhood countries.

Corruption has been a focus of EU policy but, currently, the EU’s neighbourhood policy lacks a cyber security policy and any meaningful capacity-building element for cyber security or intelligence. At the same time, the EU has no intelligence assets on the ground to assess situations and, especially, personnel beyond open-source information.

This implies that the EU needs to:

  • Launch an Eastern Partnership Security Compact – an initiative designed to combat hybrid tactics and increase cooperation between the EU, its member states, and select neighbours in matters of security, intelligence, and defence. This should include capacity-building programmes for information security.
  • Support weak and underfunded or politicised state television channels, with conditionality from Brussels that requires changes in the regulatory framework, including rules on financial self-sufficiency and transparency on advertising and funding.
  • Prioritise ensuring that security sector and judicial reform take place in eastern neighbourhood countries, perhaps by replicating the EU Advisory Mission to Ukraine in other contexts.
  • Establish a coordinated approach to financial security issues in the eastern neighbourhood, in areas such as anti-money laundering policy, combating financial crime, and countering illicit party- and media-financing policies.
  • Support Eastern Partnership states’ efforts to safeguard their external borders with third countries, manage their asylum and migration issues, and effectively fight cross-border smuggling.

East Asia: Deploy European maritime operations and invest in targeted security capacity-building

The economic agenda dominates Europe’s relationship with east Asia, reflecting both the geographical distance between the regions and the realities of European power. Neither the EU nor any of its member states are going to become major security providers in the region, but they have the capacity to contribute in this area. More to the point, given the importance of east Asia to Europe’s future prosperity, European leaders can only protect European strategic sovereignty if they participate in the provision of security and stability in the region.

The most obvious way to participate is through demonstrating their continued commitment to freedom of navigation in the region, as France did in its naval transit through the Taiwan Strait in April 2019. By failing to provide a continued presence within the 12-mile zone around territories claimed by China in the South China Sea that are not in accordance with international legal provisions, the EU and the UK could create the impression that they are only marginally interested in the gradual increase of Chinese control there. European navies, especially those of France and the UK, can and should invest in maritime operations that emphasise respect for international law and the safety of sea lines of communication. But these operations will only have a meaningful effect if they are substantial, continuous, and further Europeanised in their setup, carrying sailors from various EU member states on French or potentially even German vessels. These operations would have limited deterrence potential in relation to Chinese claims in disputed waters, but the EU and its member states jointly with the UK could use freedom of navigation operations to signal their resolve to regional partners – especially those within the Indo-Pacific framework. Beyond that effort, EU member states and the EU itself should use development funds for targeted capacity-building in areas such as coastguards and non-traditional security partnerships – especially those for cooperation on cyber security, which is of great concern to most Asian states.

Finally, the EU and its member states need to find a way to gain leverage from European arms exports. The Asia-Pacific region is now the world’s largest market for arms. For EU member states and the UK, sales to Asia are essential from a commercial perspective. But, as observers have argued for years, EU member states in particular make little to no strategic use of these partnerships. Member states need to rework their arms export strategies and tie them closely to their diplomatic and security goals. They can build a denser web of European relationships through defence-industrial partnerships but also by defining a common arms export control policy, especially for dual-use equipment.

IV. Digital sovereignty

In an increasingly digital world, the questions of who owns the technologies of the future, who produces them, and who sets the standards and regulates their use have become central to geopolitical competition. Nations around the world are trying to shape the developments in new technology and capture the benefits – both economic and geopolitical – that emerge from this era of rapid technological change. If Europeans want to reap these benefits, ensure their politics remain free of divisive disinformation, and decide who can know their most personal information, they will have to participate in this struggle.

Europeans face several challenges in doing so. Many EU member states possess world-class technology companies, well-educated workforces, and strong research and development capacity. But they have struggled to turn those assets into geopolitical influence. Europe, as the sociologist Anthony Giddens has put it, “finds itself caught in the middle, sandwiched between the US and China, with a digitally malicious Russia standing on the side-lines.”

There is a great deal of activity in Brussels on digital issues, ranging from efforts to update the Digital Services Act to establishing a European data economy. Clearly, much of the answer lies in improving the environment within the European single market for innovation and entrepreneurship, by, for example, promoting capital markets that might better support start-ups. And beyond these already difficult internal issues, Europeans need a strategy to compete with the rest of the world. But it is not clear that there is a European position on digital sovereignty issues or even that most EU member states want one. The differing approach and positions on regulatory issues, such as content regulation, not to mention intra-European competition for high-tech jobs, means that the EU starts at a disadvantage in the geopolitical competition with more coherent political actors such as China and the US.

Given the behaviour of other countries, it is clear that Europeans now need to consider how to adapt the single market to new digital realities and to exercise its regulatory power to shape the international environment. The GDPR (the General Data Protection Regulation) provides a template for this: it forced companies around the world to comply with European practices on privacy, and encouraged similar regulations in other jurisdictions, not least various parts of the US.

There are many such opportunities, including:

  • Creating anonymised European databases for AI research and a European regulatory framework for ethical AI that could both inspire others to emulate it and encourage compliance with European ideas of how to control this industry of the future.
  • Establishing effective European procedures for the regulation of digital content that could set a template for how to balance openness with the need to protect democracy from outside influence and extremism.
  • Encouraging the formation of European digital champions in emerging technologies such as edge computing or supercomputing by leveraging the EU’s competence in competition policy, its capacity to provide research funding, and its emerging investment protection regime to gain an advantage in some key technologies. The European Commission is already planning to invest €8 billion in supercomputing. Its European cloud initiative, Gaia-X, represents an emerging effort of this type, albeit one that is somewhat behind the curve of existing US technology.
  • Coordinating more effectively policies on industry and tech regulation with the Asian technology powerhouses – especially Japan, South Korea, and Taiwan, which are also looking for greater diversification in the provision of digital goods.
  • Seeking opportunities to mediate in US-China tech disputes. The stark differences between the anarchic US approach to digital regulation and the heavy-handed state control model advocated by China open up a vast middle ground for European actors.
  • Developing a European digital tax that will apply to digital services based on where they are generated rather than by the physical presence of the company. Establishing this principle, regardless of the tax level, will allow the EU to better leverage access to its market. The EU is rightly trying to negotiate this globally first – but, as von der Leyen concluded in her 2020 state of the union address, “if by the end of 2020 there is still no global solution for a fair digital tax, the EU should act alone.”

V. Climate sovereignty

The EU is extremely vulnerable to the impact of the climate crisis. Europeans will not only suffer direct consequences in the form of extreme weather events, water shortages, and loss in biodiversity, but also the indirect consequences of increased conflict and migration in their neighbourhoods. In 2017, extreme weather events cost nearly €14 billion. This could rise to €120 billion in annual losses with another 1oC rise in temperature. The EU-funded COACCH project estimates that the economic costs of sea-level rises alone in Europe will be €135 billion-€145 billion in the 2050s (due to the combined effects of climate and socioeconomic change). This will rise to €450 billion-€650 billion by the 2080s if there is no investment in adaptation.

But, despite these massive local costs, climate change is a global problem, and the EU depends on others to support its green agenda. As Europe produces less than 10 per cent of global greenhouse-gas emissions, the EU needs to reach beyond its borders with the European Green Deal that the European Commission proposed in December 2019. Currently, actors such as China and the US can take advantage of Europe’s commitment to decarbonisation – by producing goods that are cheaper and more carbon-intensive than their European competitors – and still enter the European market.

In 2020, the huge decrease in economic activity caused by the coronavirus crisis has put many countries well ahead of their carbon emissions targets without any effort at all. But this is obviously a temporary effect and, indeed, the pressure placed by the pandemic on government budgets around the world means that many countries will not prioritise ‘building back greener’ as the EU intends to do. The Trump administration believed that climate change is not caused by humans and was uninterested in agreeing to any international target. The Chinese approach has been more subtle. Xi Jinping announced in September 2020 that China would aim to reach a CO2 emissions peak in 2030 and seek to become carbon-neutral by 2060. But China is already the world’s largest emitter – responsible for almost 30 per cent of emissions – and continues to build coal-power plants at a staggering pace while opposing the setting of binding emissions targets. Worse, the lack of commitment from the US, China, and other powers to the climate change agenda has necessarily discouraged many in the broader international community from doing their part.

In short, in the absence of European pressure, it is not obvious that most other powers will follow the European lead and reduce emissions. Thus, the only way for Europe to achieve its decarbonisation goals is to move beyond its borders.

Recognising this necessity, the European Commission has proposed spending some 37 per cent of the European Recovery Fund, roughly €277 billion, on the European Green Deal. This movement towards clean energy brings both new risks and opportunities. The reliance on renewable energy creates new dependencies on, for example, China – which is already a leading manufacturer of solar panels and electric cars, and is poised to dominate the global production of battery cells. But it is also an opportunity to leverage European technology and the European single market to establish a regulatory regime in clean technology that will enhance European influence, and to effectively enlist the world in accomplishing Europe’s climate goals. The EU will, of course, continue to push for an ambitious global climate agenda within the UNFCC framework. But the EU is unlikely to be able to inspire large emitters such as the US, China, and India to sign on to the necessary emissions reduction commitments with that global negotiation unless it is prepared to exercise leverage and deploy other instruments of European power.

The need for a more leveraged approach has led the European Commission to float the idea of a carbon border adjustment mechanism, to encourage the import of less carbon-intensive goods and to sustain EU competitiveness during the implementation of the European Green Deal. This mechanism poses a fairly fundamental challenge to European trading partners (particularly China), which will often see it as protectionist. Especially at the lower end of the value chain, where profit margins are not particularly high, Chinese manufactured products could lose their comparative price advantage (and thus their appeal), making it more attractive for European industry to source from ‘greener’ partners. At the same time, European companies would have to be prepared to decouple their value chains’ production processes and start producing only for the Chinese market in China, further deglobalising the economy.

But the challenge that the European Green Deal presents to European trading partners also represents an opportunity for the EU. Countries whose economies are heavily dependent on hydrocarbon exports, such as Algeria and Libya, will need substantial investment and assistance to restructure their economies. The EU can pair the European Green Deal with a sustainable development policy offer to developing countries within the deal’s framework, with a focus on renewable energy sources. To this end, the EU and its member states have pledged to work with their international partners to mobilise $100 billion every year from 2020-2025 to combat climate change and mitigate its effects. But finding this money and spending it wisely remain daunting tasks.

The EU will have to compete in this effort with other sources and markets, particularly with China’s expansive Belt and Road Initiative. Whether developing countries are receptive to the European offer will largely depend on the conditions attached to loans and investments. ‘Green conditionality’ could, in some cases, make European financing much less attractive, even as these countries recognise the challenge of climate change. But Belt and Road recipient countries are increasingly souring on the Chinese approach, which has often failed to deliver promised funds, failed to increase domestic technological capacity, and sometimes mired them in corruption and debt. The EU has an opportunity to step in with a better offer that addresses climate change, respects its partners’ development trajectories, and provides them with responsible access to the massive EU market.

They are several aspects to this effort, including:

  • Leveraging European technology and the massive European single market to establish a regulatory regime in clean technology.
  • Working within various multilateral frameworks to advance the green agenda.
  • Implementing the European Green Deal to reduce carbon emissions at home and abroad.             
  • Pairing the European Green Deal with a sustainable development policy offer to developing countries, with a focus on renewable energy sources and green technology.
  • Using the Franco-German push on the Indo-Pacific to establish an EU Indo-Pacific strategy that emphasises cooperation on emissions reductions and biodiversity as a complement to the EU’s global climate strategy.

Building back sovereign

Each of these five sovereignty agendas represents an enormous challenge for the EU and its member states. Together, they imply a need to recover strategic sovereignty and rethink the entire model of globalisation that has underpinned European foreign policy in recent decades. That model took as given that open markets, increasing trade and investment, and technological diffusion would generally increase prosperity, stability, and even spread liberal democracy around the world.

Globalisation has helped lift hundreds of millions of people out of poverty. Increased economic growth has often underpinned stability and democratisation in, for example, east Asia. And European economies and citizens have benefited from open markets. But it has also led to asymmetric dependencies on, for example, China for key materiel, on the US for access to dollar financial markets, and on Russia for energy. At times, these countries have exploited these dependencies for geopolitical gain. This is not a counsel of protectionism or decoupling – it would be the height of folly to believe that a quest for strategic sovereignty justifies a retreat into isolationism. At the same time, mere resilience in the face of such geopolitical competition is not enough – Europeans need a proactive sovereignty agenda that can project European power and evaluate, reduce, and hedge against asymmetric dependencies.

Europeans clearly need to strengthen the power of international institutions to maintain open markets, while also hedging by preserving the capacity to defend themselves from economic coercion. Europe has many advantages in these efforts. Europeans remain well represented and influential in a wide variety of multilateral institutions. Their deep commitment to multilateral formats and rules gives them enormous credibility with other actors to reform and reorientate international institutions. The size of the EU’s market and the effectiveness of its governing bodies mean that it has a substantial ability to use its regulatory power to shape trade and investment flows. On issues such as privacy and food standards, it has already proved this capacity. But it has yet to turn this power towards a conscious effort to shape a new model of globalisation and to reduce European asymmetric dependencies.

Despite these advantages, Europeans have collectively underperformed in geopolitics because they have too often failed to use their strengths, leverage their assets across policies areas, and, most clearly, present a united front. These shortcomings are daily influencing their ability to gain leverage in the world outside Europe. In east Asia, they have missed the opportunity to form alternative multilateral structures with key Asian partners at its heart. In the Middle East and North Africa, they have failed to use their collective weight to coordinate a more broadly based package of financial and technical assistance to weak states. And, in Europe’s eastern neighbourhood, they have allowed Russia to hamstring various international and regional organisations that might monitor elections and human rights, and might reduce conflict tensions.

The essence of the problem is not funding or decision-making processes – though, clearly, the EU could improve in both areas. More money or removing the need for unanimous voting on foreign policy issues will make little difference if Europeans cannot leverage their strengths and if the EU cannot help its member states address their sovereignty problems. Overall, the EU needs to start seeing its regulatory capacity as a geopolitical tool that can help it hedge against the vulnerabilities created by globalisation and asymmetric dependencies.

Now is an auspicious time to do so. Covid-19 has helped create a European moment and made the idea of sovereignty concrete and urgent for the public, as well as for decision-makers. It has demonstrated with perfect clarity how, in an interdependent world, European strategic sovereignty is vulnerable to events in far-flung parts of the globe. Europeans now collectively understand that their ability to be free from pandemics is only as strong as the weakest link in the chain of global health. It is impossible to cut oneself off from diseases on other continents without paying a price in prosperity. And what is true of global health is true for all other sovereignty agendas.

In the coming years, there will be no shortage of institutional process that could be used to advance a strategic agenda that tries to transcend the functional areas in which Europe is exposed. Member states have committed in the European Council to advance “strategic autonomy”, while the European Commission is pushing forward with “open strategic autonomy”, the European External Action Service will launch a “Strategic Compass” process, and the Conference on the Future of Europe will seek to understand how the European construction needs to adapt to a new era.

It will be important to find ways of bringing all these disparate processes in Brussels and member states together, and integrating them into European foreign policy. For this purpose, the European Council should set up a taskforce on strategic sovereignty or open strategic autonomy and invite member states to appoint an ambassador-at-large. One point of this forum would be to inspire greater interaction and discussion between member states. The high representative could announce an effort akin to the Global Strategy to study other states’ increasing use of non-traditional foreign policy tools – such as sanctions, economic statecraft, digital measures, and supply chains – and propose a European foreign policy response. This effort would explicitly seek to draw in key elements of the European Commission, especially the part that deals with international trade, while of course keeping in mind the different institutional basis for trade policy under the treaties. Its basis would be that any European effort in this regard will seek to strengthen transatlantic relations rather than weaken them, and preserve openness rather than devolve into protectionism. The report could be submitted to the Council as an agenda for action that seeks to better integrate the EU’s various capacities for influencing international affairs.

The EU took a huge step forward this year by agreeing on the recovery plan. The package provides an enormous opportunity to enhance European sovereignty. There are, of course, already many demands on this money, but part of building back is building a more sovereign Europe. The process of creating the recovery plan should allow the EU to invest in a more sovereign Europe that can matter on issues that citizens care about. Yet the process is not automatic. This paper has identified five areas in which European sovereignty is vulnerable and how it links up with Europe’s neighbourhood and its important economic partners.

Rather than allowing so much of the money allocated by the plan to be spent invisibly through structural and cohesion funds, the EU should explicitly set itself the goal of investing in the infrastructure of a sovereign Europe. Such infrastructure could include common stockpiles of medical equipment to tackle future pandemics, well-regulated databases to train AI, investments in infrastructure to promote energy independence and carbon transition, and, of course, joint defence projects and investments. The EU’s legitimacy will partly depend on being able to show at the end of the European Commission’s mandate that the recovery plan actually helped build European strategic sovereignty. The EU and its member states have the resources, the knowledge, and the capacity to survive and even thrive in a more geopolitical world. The only question is: will they?

About the authors

Mark Leonard is co-founder and director of the European Council on Foreign Relations. He is the author of Why Europe Will Run the 21st Century and What Does China Think?, and the editor of Connectivity Wars. He presents ECFR’s weekly World in 30 Minutes podcast.

Jeremy Shapiro is the research director of the European Council on Foreign Relations. Previously, he was a fellow at the Brookings Institution in Washington. Prior to this, he was a member of the US State Department’s policy planning staff and the senior adviser to the assistant secretary of state for European and Eurasian affairs.

Acknowledgments

Given its wide range, this effort rests even more than usual on the collective genius and underlying work of our ECFR colleagues. In particular, we have taken enormous advantage of the creative sparks and intellectual generosity of Julien Barnes-Dacey, Susi Dennison, Anthony Dworkin, Gustav Gressel, Jonathan Hackenbroich, Carla Hobbs, Janka Oertel, Nicu Popescu, Andrew Small, and Nacho Torreblanca. Any mistakes, of course, remain ours but, if asked, we fully intend to blame them – so their sacrifice is not yet over. We owe a particular thanks to Lucie Haupenthal for her expert research assistance and her (nearly) endless patience with our intellectual flights of fancy, and to Adam Harrison for making our words convey actual meaning. We also benefited from the practical wisdom of various interlocutors within the EU and member state governments. They often did not share our views, but always managed to give advice in a way that showed their enormous intellectual curiosity and respect for thought coming from beyond the walls of government.

Key recommendations for the five sovereignty agendas

EU

East Asia

Eastern neighbourhood

Middle East and North Africa

Health

Protect the single market

Strengthen investment protection

Promote and fund medical research and development

Work together on diversification opportunities

Work together on near-shoring opportunities

Work together on near-shoring opportunities

Support distribution of vaccines

Support humanitarian finance channels to work around US secondary sanctions

Protect healthcare supply chains (reshoring, near-shoring, diversification, and chokepoint vulnerabilities)

Promote healthcare standards across the EU and globally

Coordinate across multilateral institutions

Economic

Deter and respond to secondary sanctions

Protect assets critical to national security from foreign interference

Make connectivity a geopolitical tool (coupled with the ‘diversification’ agenda)

Deeper trade and investment agreements – especially with India and ASEAN (EU-CPTPP agreement); seek initial WTO-compliant sectoral agreements instead of focusing on comprehensive agreements

Use economic leverage in the region more strategically

Use economic leverage in the region more strategically, with a focus on advancing European stabilisation interests and preventing or mitigating against state collapse

Relocate and diversify supply chains

Enforce a level playing field in both domestic and international competition and in global rulemaking

Hedge against the blockage of multilateral institutions

Security

Create a European pillar in NATO

Establish European forward-basing to reassure eastern Europeans

Develop a pan-European capacity to investigate sources of cyber attacks

Build a denser web of European relationships through defence-industrial partnerships, as well as by defining a common arms export control policy

Use FONOPS to signal resolve to regional partners

Use development funds for targeted capacity-building in areas such as coastguards and non-traditional security partnerships

Make China’s role in Asian cyberspace a key element of a strategic dialogue with Indo-Pacific partners

Prioritise the demand for security sector and judicial reform

Create a Security Compact for Eastern Partnership states, with a focus on information security

Establish a coordinated approach to financial security issues, such as anti-money laundering policy, combating financial crime, and countering illicit party- and media-financing policies

Provide support for safeguarding external borders with third countries, manage asylum and migration issues, and effectively fight cross-border smuggling

Chart a path that is independent of the US where interests diverge, with more independent deployment of Europe’s assets, such as diplomatic gravity, economic weight, and military power

Demonstrate strength towards Russia, but also engage in a pragmatic dialogue designed to protect shared interests

Better define European interests and relationships with Turkey and Arab Gulf states

Balance short-term goals – such as reducing migration and terrorism – with the long-term interest of promoting lasting stability and societal resilience

Mobilise core groups of interested EU member states on specific issues

Digital

Create anonymised European databases for AI research and a European regulatory framework for ethical AI

Establish effective European procedures for the regulation of digital content

Encourage the formation of European digital champions in emerging technologies

Coordinate more effective policies on industrial policy and tech regulation with the Asian tech powerhouses, especially Japan, South Korea, and Taiwan

Encourage cooperation on digital issues and promote Europeans standards on, for example, privacy

Encourage cooperation on digital issues and promote Europeans standards on, for example, privacy

Impose a digital tax (if not globally, then on the European level)

Climate

Leverage European technology and the massive European single market to establish a regulatory regime in clean technology

Work in all multilateral frameworks on advancing the green agenda

Implement the European Green Deal to reduce carbon emissions

Pair the European Green Deal with a sustainable development policy offer to developing countries within the deal’s framework, with a focus on renewable energy sources

Utilise the Franco-German push on the Indo-Pacific for an EU Indo-Pacific strategy that emphasises cooperation on emissions reductions and biodiversity

Work with climate-vulnerable countries in the region (especially small island states) to provide them with sustainable finance and infrastructure offers, and to counter unsustainable Chinese Belt and Road investments

Promote the green agenda as a mechanism to increase European diversity in energy supply

Find other partners in the region to work on the green agenda

Promote and invest in solar technology in the region

Examples of the costs of non-sovereignty

Health

  • Not being able to provide basic medical equipment in the middle of a pandemic (China produced half the world’s masks before covid-19, and it has expanded production nearly twelve-fold since then)
  • Covid-19 will likely reduce Europe’s disposable income by 5.9 per cent in 2020 (roughly €600 billion), with much more severe hits in specific regions
  • The impact of China deciding to weaponise its pharmaceuticals industry: It is estimated that China provides between 80 per cent and 90 per cent of the global supply of active ingredients for antibiotics
  • Dangers posed by weak oversight in China´s pharmaceuticals industry to global pharmaceuticals supply chains

Economic

  • Companies can expect to lose more than 40 per cent of a year’s profits every decade because of supply chain disruptions
  • High dependency on the supply of critical raw materials, including lithium, cobalt, and rare-earth metals used in high-tech industrial goods. If Europe wants to meet its climate goals, this dependency will become even more salient
  • Chinese influence over individual EU member states gained through strategic investments is already an obstacle to effective EU foreign policymaking
  • What would happen if the US restricted EU trade and investment in Russia or China in the same way that it has done with Iran? This would disrupt trade worth around €190 billion per year for Russia and around €1 billion per day for China
  • Key EU trading partners, particularly China, heavily subsidise their national champions, providing these firms with favoured access to credit and otherwise distorting competition

Security

  • What could the EU do if Russia decided to treat Poland or Latvia in the way it has treated Ukraine, using a combination of cyber attacks, disinformation, and direct action to destabilise an EU state and perhaps overthrow its government?
  • Powers such as the US, Russia, and China could block the EU from using its resources to stabilise an African country through the United Nations, sending an OSCE monitoring mission to eastern Europe, or bailing out a third country through the IMF
  • The feeling of insecurity of many member states opens the way for others to divide and rule European countries
  • The gradual US withdrawal from the Middle East and North Africa is opening up space for other actors, such as Russia and Turkey. So far, the EU has been largely unable to protect its key interests in the region
  • In Asia, China´s growing military engagement and weakening US influence threatens the relatively stable security architecture, which is detrimental to European economic interests

Digital

  • The cost of European cyber vulnerability was estimated at €400 billion in 2018. This will only grow with the coming of 5G and the ‘Internet of Things’.
  • AI is estimated to contribute more than €13 trillion to the global economy by 2030. How much of this market can Europe capture?
  • The global market for 5G technology is projected to reach $668 billion by 2026. The US and China are fighting over geopolitical control of 5G standards. Economic control will surely follow
  • AI is quickly emerging as the next frontier in the digital sovereignty wars, with China and the US setting the rules for its future use

Climate

  • Annual expected damage costs in Europe from the rise in sea levels are estimated at €135 billion-€145 billion in the 2050s, increasing to €450 billion-€650 billion by the 2080s if there is no investment in adaptation
  • In 2017, extreme weather events cost nearly €14 billion. This could rise to €120 billion in annual losses with another 1oC rise in temperature.
  • Indirect consequences of increased conflict and migration in Europe’s neighbourhood
  • Other actors can take advantage of Europe´s commitment to decarbonisation – by producing goods that are cheaper and more carbon-intensive than their European competitors – and still enter the European market
  • Reliance on renewable energy creates new dependencies – such as those on China, which is already a leader in manufacturing solar panels and electric cars, and is poised to dominate the global production of battery cells
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Promoting European strategic sovereignty in the eastern neighbourhood https://ecfr.eu/publication/promoting-european-strategic-sovereignty-in-the-eastern-neighbourhood/ Tue, 01 Dec 2020 08:00:32 +0000 https://ecfr.eu/publication/promoting-european-strategic-sovereignty-in-the-eastern-neighbourhood/ Summary
  • Since 2002, the European Union’s goal in its eastern neighbourhood has been to ensure that it is surrounded by democracies that uphold the rule of law while maintaining market economies and open societies.
  • This goal remains relevant and important: as recent events in Belarus show, authoritarian stability in the neighbourhood has always proved to be an illusion.
  • Russia has used political, economic, and military means to contest the EU’s support for the transition to democracy and market economies in eastern Europe.
  • The EU’s tendency to shy away from security issues has helped make covert operations and military threats Russia’s tools of choice in the region.
  • To counter these efforts, the EU’s neighbourhood policy should focus on the rule of law and judicial reforms, media regulation and information warfare, security sector reform and capacity building, and cyber and energy security.
  • The EU should also add a military and security dimension to its assistance in reforming Eastern Partnership countries’ defence sectors and armed forces.

Introduction

In recent years, several trends have forced the European Union to take a harder look at its foreign policy. One such trend is the EU’s growing realisation that it needs a greater capacity to act independently on some external matters, and to do so in a strategically sovereign manner. Another trend is the EU’s increasing awareness that the world has become more “geopolitical” – that, because other powers are behaving with greater assertiveness, it will lose its voice in a disordered world unless it becomes the influential actor it wants to be. Accordingly, the effort to build a more geopolitical Europe has become an explicit objective of President Ursula von der Leyen’s European Commission. And it is a goal shared by most member states, whose influence will wane unless the EU acts with more ambition, force, and cohesion.

The covid-19 crisis may dominate the EU’s current priorities, but it has not caused other powers to relent in their assertive pursuit of geopolitical goals. The pandemic has highlighted many of the structural, administrative, and security weaknesses that have long haunted countries in eastern Europe. In the meantime, alleged vote-rigging in Georgia’s recent parliamentary election has caused a national crisis. And Ukraine has experienced a rollback of democratic reforms and a constitutional crisis stemming from a controversial court ruling. A rigged presidential election in Belarus has led to widespread protests and the contestation of President Aliaksandr Lukashenka’s rule by various camps in civil society. A brutal crackdown by the regime and a clandestine Russian intervention have kept Lukashenka in power – at least for now. Due to these events, Russia slightly altered its Kavkaz 2020 exercises – originally intended to be a signal to Ukraine – as it needed mobile forces to act as a deterrent against both Belarusian protesters and the West. In a crisis with a more overt military dimension, the dispute between Armenia and Azerbaijan over Nagorno-Karabakh escalated into a full-scale war.

The EU has limited influence on such developments, despite the fact that it is the most important trading partner of all countries in the Eastern Partnership; invests billions in economic, societal, and infrastructure programmes there; and remains a kind of role model (and desired study, work, and tourist destination) for citizens of these states. The EU’s problems in the region go beyond the difficulty of converting soft power into hard power. All Eastern Partnership states face urgent security challenges that complicate policymaking. As the EU provides only marginal help in this regard, they often see European interests as being of secondary importance. For this reason, Donald Tusk, head of the European People’s Party, argues that “we need to increase cooperation between the EU, its Member States and select members in matters of security, intelligence, and defence. A new initiative – a security compact of the Eastern Partnership – is a good starting point for such a discussion.” And, while the Eastern Partnership has achieved much, the EU has few opportunities to gain political influence in the region – or to build these countries’ resilience against foreign interference.

This paper discusses how the EU can strengthen its strategic sovereignty in its eastern neighbourhood. And it discusses why the EU has not yet come to terms with what it would take to defend its interests in the region. (The paper does not primarily focus on how Europe should deal with Russia, which separate assessments cover in relation to deterrence and defence, and protection against hybrid threats.)

The EU’s interests and goals in Eastern Partnership countries

The EU’s basic interest in its eastern neighbourhood is to be surrounded by a “ring of friends”, as then European Commission president Romano Prodi put it in 2002. The following year, when launching its neighbourhood policy, the EU announced that conflict resolution was one of its key priorities. Since then, there has been a significant increase in conflict in the bloc’s neighbourhood – but no parallel rise in member states’ level of ambition to address this sensitive area. For the EU, post-Soviet countries’ transition from communism to competitive democracy, administrations bound by the rule of law, and functioning market economies would not only enhance peace and stability but also promote economic growth, sustainable development, cross-societal and cultural ties, and sustainably strong relations in its neighbourhood. Despite globalisation and the growing power of long-range communications, countries’ immediate neighbours are still more important than distant powers in trade, investment, migration, and security.

While the EU’s support for this transformation has produced mixed results, the bloc needs to acknowledge that a total failure of the process in its eastern neighbourhood is possible and would have dire consequences. Belarus may serve as a cautionary tale of what can happen when a political and economic transformation fails. Now that Lukashenka is nearing old age and experiencing a rapid decline in his legitimacy due to his suppression of opposition protests, there are questions surrounding issues of succession, Belarusian sovereignty in the Union State, and the durability of the country’s economic model. At best, Belarus will remain a weak and poor country on the EU’s border. At worst, it will become a co-belligerent client state that Russia uses to directly threaten and challenge EU sovereignty and territorial integrity. Ukraine, Moldova, and Georgia could become a Moscow-dominated zone of instability – from which the Kremlin could stage clandestine subversion and conventional military operations. With no territorial insulation comparable to that provided by the Mediterranean, this would be a more powerful threat to the EU’s eastern member states than even the unrest the bloc faces to the south.

Such turmoil belies arguments in favour of “authoritarian stability”. Even in breakaway regions tightly controlled by the Russian intelligence services, the local authorities are often challenged and sometimes displaced by public revolts. In South Ossetia, protests against a disputed election in 2012 ended with the death of the opposition candidate (who may have won that vote). In Abkhazia, the nominal “president” has been deposed twice – in 2014 and 2020 respectively – by popular revolts sparked by an allegedly rigged election. Even if the EU were to end its support for political and economic transformation in its eastern neighbourhood, popular desire for an accountable government would not go away – and nor would the instability created by failed political processes.

The EU’s main goal in the Eastern Partnership is to forge the “common area of shared democracy, prosperity and stability” recently referred to by the European Council. And the bloc has other declared areas of interest there. For some European leaders, political transformation is still a prerequisite of efforts to achieve other goals. Efforts to fight corruption, organised crime, and money laundering within both the EU and the eastern neighbourhood have gained some media attention in the wake of the Mueller Report and the scandal surrounding President Donald Trump’s decision in 2019 to fire the US ambassador to Ukraine. Ultimately, the integrity and professionalism of local investigative and judiciary authorities will be a key factor in whether the EU can achieve its objectives in its eastern neighbourhood.

Joint EU-Eastern Partnership declarations also cover issues such as workforce mobility and migration; infrastructure; young people; education; ethnic minority groups; digitalisation; steps towards economic alignment; the European Green Deal; healthcare, particularly in relation to covid-19; and gender equality. However, these are fairly apolitical, bureaucratic portfolios that say little about Europe’s ability to implement its foreign policy. And they are not areas that third parties have weaponised against EU or Eastern Partnership states. This is partly due to the fact that Belarus and Azerbaijan generally follow different political norms to the EU but are formally part of its eastern neighbourhood. Consequently, there is some diplomatic pressure for the EU to engage with them – or to talk through practical issues that arise as general concerns within the Eastern Partnership.

In terms of the EU’s efforts to gain political leverage over decisions in the Eastern Partnership, energy links with Russia are the only other strategically important issue covered by agreements between the sides. Nonetheless, energy transit is an area that Moscow uses to apply pressure on Eastern Partnership states (and that the EU uses to ease such pressure). Hence, energy issues may make for spectacular headlines in themselves but they are inseparable from the broader struggle over the rules that apply to, and the rights of, Eastern Partnership states. Put another way, disputes over energy concern the issue of whether the EU can and should support Eastern Partnership states in their transition to liberal democracy, an open society, the rule of law, and free markets – or whether they should maintain close ties to Moscow.

The EU’s support for political and economic transitions in the Eastern Partnership has never been uncontested. Russia views the instability, vulnerability, weakness, and dependency of these countries as a key mechanism through which to exercise influence in its immediate neighbourhood. Russia has used economic dependencies – particularly those on oil and natural gas – to gain leverage over Georgia, Ukraine, and Belarus. Moscow has also used targeted corruption, information warfare, election fraud, and intelligence operations to discredit, extort, or intimidate political actors, with the aim of securing power for individuals it believes will protect Russian interests. As if that were not enough in itself, Moscow has also made use of military force – overt or otherwise. Needless to say, the reforms related to the rule of law, free markets, and the political system that the EU envisions for its neighbourhood would decrease Eastern Partnership countries’ vulnerability to Russian pressure.

Russia’s tactics, combined with its lack of constructive initiatives in the region, have earned it a reputation as a “strategic spoiler”. This label is particularly apt in relation to covert operations, which build clandestine networks within a country to weaken its institutional, political, economic, and security structures. The ultimate aim of such operations is to make the country succumb to foreign pressure or, if it does not do so, ignite a ‘domestic’ conflict that provides a pretext for intervention. For Moscow, covert operations are nothing new – as shown in the graphic below (an updated version of one depicting 1970s Soviet covert operations against the West and its allies in the developing world).

Pyramid of Russian covert operations

Ukraine provides many examples of how Russia applies these tactics (as described elsewhere). Events under then-president Viktor Yanukovych showed that the Kremlin has ample opportunity to make use of local strongmen, oligarchs, and public figures willing to help it achieve its aims. Power centralisation, state capture, systemic corruption, and attacks on the independence of the press and the judiciary are attractive to local elites and strongmen who seek to monopolise power. While there is a blurred boundary between domestic weakness and foreign-induced vulnerability, much of the success of covert operations rests on the exploitation of pre-existing divisions within a country. In practical terms, this boundary does not matter to the EU’s policymaking: the bloc needs to mitigate Eastern Partnership states’ institutional weaknesses regardless of their origin.

The EU has sometimes tried to negotiate transitional arrangements that would turn competition with Russia into a mutually beneficial situation. It has done so by engaging with Russia directly, offering economic and societal concessions, and reform and modernisation assistance – as envisioned in the CFSP Common Strategy. The bloc has also attempted to negotiate peace agreements for protracted territorial conflicts by offering Russia a co-management position in common security institutions, as stipulated in the 2010 Meseberg Memorandum. However, when they have tried to implement such initiatives, Russia and the EU have been unable to create a shared vision for the region. This is due to their deep ideological differences on the European security order. Instead of fostering cooperation, these failed efforts have heightened mutual suspicion.

Risks and vulnerabilities of EU policy

In the two decades that followed the disintegration of the Soviet Union, Russia’s détente with the West did not prevent it from conducting efforts to gain influence in its neighbourhood – including through military means. These destabilising initiatives targeted post-Soviet states that had weak institutions; no tradition of leadership and political responsibility (as the Soviet leadership was concentrated in Moscow); dysfunctional administration; inefficient, compromised, and uncontrolled security services; a polarised political culture dominated by cynicism and the manipulation of information; populations that were detached or even alienated from politics; and media outlets that were dependent on external sources of finance. As such, post-Soviet states’ resilience against covert operations was low to start with. On every level of the pyramid depicted above, the Kremlin had put assets in place to exploit these weaknesses.

Moscow’s covert operations only catch the attention of the West when they reach the top of the pyramid and separatist violence begins to threaten the survival of individual nations. But, by this point, it is often too late to mount a strong defence. The most effective way of fighting covert operations is to focus on their roots (depicted at the bottom of the pyramid) – to prevent the enemy from subverting key structures, penetrating the target’s information space, building up proxy organisations, compromising local IT networks, or recruiting local officials and operatives.

However, states can only build such defences if they have functioning law enforcement and security organisations that carry out their duties in a professional and accountable manner. Of course, sustainable reform in post-Soviet countries is not only about countering Russian subversion; it is also about state- and institution-building in its own right. However, Western support efforts for these countries will fail if they ignore geopolitics. This is because fragile institutions – the judiciary, the police, the prosecutor’s service, intelligence agencies, the military apparatus, financial regulators, national banks, and public media organisations – face a persistent, coordinated, and covert assault on their integrity and functionality.

The strategic problem for the EU is that its broad outreach to civil society groups and long-term economic integration policies in post-Soviet countries are vulnerable to initiatives that hijack the local political process. Such initiatives are not part of normal democratic competition, but are usually driven by vested interests and Russian operators – who primarily aim to reverse reforms related to the rule of law and effective governance, and to re-establish and expand clandestine subversive structures. Election contenders often promise one thing during their campaigns – such as social benefits or new reforms – but deliver quite another once in power, reversing previous reforms and subverting institutions. Hence, they immediately create a gap between their electoral mandate and their policies, leaving the EU unsure whether to respect the local political process or hold governments to their commitments.

In this environment, the EU has implemented what might be considered fair-weather policies: it proposes economic incentives and the prospect of closer integration, but the capacity to fulfil these offers – and implement reforms – depends on the political will of local leaders. The model works when the EU deals with stable, wealthy, and secure states such as Switzerland or Norway. But it does not work with Eastern Partnership countries.

Some of these shortcomings stem from the core design of the Eastern Partnership, the European Neighbourhood Policy, and Deep and Comprehensive Free Trade Agreements (DCFTAs), which primarily concern trade, regulatory compliance, and economic integration. The EU has generally considered issues related to the rule of law and administrative reform to be only supplementary to these arrangements.

But, in fact, it should be the other way around. Only successful rule of law and administrative reforms can allow citizens, entrepreneurs, and investors to fully benefit from regulatory alignment and economic integration. Furthermore, the EU applies too few criteria to Eastern Partnership countries in relation to good governance and the rule of law. Hence, it is difficult for the bloc to create clear conditionalities on these issues. The EU has paid insufficient attention to the implementation of reforms – instead relying on box-ticking exercises. For example, Ukraine’s judicial reform has produced workable constitutional amendments and laws, but vested interests in the judiciary have hijacked the decision-making process on the readmittance of judges. Eventually, the country ended up with old cadre judges, whose use of their positions to sabotage reforms has led to the constitutional crisis in the country.

In Eastern Partnership countries, vested interests frequently circumvent, dilute, or counteract reforms through additional legislation or administrative decrees. The problem is exacerbated by the EU’s lack of a coherent and meaningful policy for supporting civil society organisations and independent media outlets – both of which are essential to democratic accountability and the fight against disinformation. And, finally, the EU has no structured capacity building programme focused on the judiciary, despite the fact that Eastern Partnership countries’ judicial systems are notoriously weak and they have repeatedly failed to reform them on their own. The same is true of administrative reform and capacity building. The EU has no capability to directly provide judicial or administrative services to an Eastern Partnership country – in, for example, presiding over a politically charged or sensitive trial.

There are other shortcomings in EU policy created by the marginalisation of security issues (in both the union’s internal politics and its foreign policy). They include:

  • A lack of cyber security, cyber resilience, and cyber capacity building initiatives under the European Neighbourhood Policy.
  • A lack of a coordinated approach to financial security issues in Eastern Partnership countries, particularly in relation to money laundering, other financial crimes, and foreign political and media funding.
  • A lack of EU intelligence assets on the ground that can assess situations and, especially, personnel without relying on only open-source information or local intermediaries. In an operational environment characterised by weak institutions, poor administrative integrity, and weak judicial oversight, much depends on personnel rather than formal offices, laws, procedures, and processes. The EU’s inability to vet people designated for key positions ensures that it is always playing catch-up when reforms begin to break down.
  • A lack of capacity building and cooperation initiatives designed to help local intelligence and police services detect and foil Russia’s subversive efforts. (Ukraine is the only country in the neighbourhood with significant intelligence capabilities of its own – and, unfortunately, the effectiveness of even these services is often undermined by domestic politics.)
  • A lack of substantive police reform programmes. Corruption within the police remains a major issue in Eastern Partnership countries, undermining the legitimacy and public acceptance of investigative work.
  • A lack of a policy that would help Eastern Partnership states safeguard their external borders with third countries, manage asylum and migration issues, and effectively fight cross-border smuggling. (Currently, EU policy in these areas only concerns travel between Eastern Partnership countries and the Schengen area.)
  • A lack of support for defence reform in everything from military training and foreign aid to the willingness to deploy armed forces to end a conflict. This shortcoming has helped make military force Russia’s weapon of choice in its efforts to counter EU policy. Russia’s armed forces are relatively powerful (much more so than its economy) and it knows that the EU rarely dares to respond with military operations of its own. European military capacity building could de-incentivise Russia’s use of force by increasing its costs.

A broader shortcoming in the EU’s approach to dealing with adversaries such as Russia relates to institutional compartmentalisation. The EU and the External Action Service have a mandate to deal with countries that have DCFTAs, and with the implementation of these agreements. Many of the incentives for this process – such as macrofinancial assistance – are the responsibility of individual governments or the International Monetary Fund. European cyber security and intelligence assets are exclusively in the hands of EU member states, while military support measures are the preserve of NATO and individual countries within the alliance. It takes time to coordinate all these actors – meaning that the EU reacts more slowly to unexpected events than other powers do.

The EU’s reform support and security assistance initiatives in Eastern Partnership countries do not inform its decisions on accession to the union. Although some EU countries with otherwise ambitious leaders want to permanently replace the membership perspective with “internationally guaranteed neutrality” – without qualifying what that means for affected states – this would still require the EU to protect their security institutions. A lack of such direct support would fatally undermine attempts to establish independent, sovereign, and non-aligned states in the vicinity of Russia.

This problem is nothing new. During the cold war, the West frequently had to support neutral or non-aligned states in their struggle for independence. After the Tito-Stalin split in 1948, for example, the United States immediately increased foreign military aid to Belgrade, equipping 19 Yugoslav divisions from US stocks and providing material and technical assistance to set up a working air force. Military cooperation between Sweden and the United Kingdom, the US, and other Nordic states was key to stabilising NATO’s northern flank during the cold war. When a newly independent Austria faced Soviet troops on its border in the wake of Moscow’s 1956 intervention in Hungary, Washington unilaterally guaranteed the sovereignty and territorial integrity of the new republic. Without military assistance, intelligence cooperation, and sometimes direct security guarantees, it would not have been possible for these states to remain independent and non-aligned during this period. The same rules apply today.

The EU’s capacity as a security enabler on its eastern flank will also determine whether its member states and their top representatives are seen as relevant in Moscow. This will be particularly important for countries that, in the long run, want to foster a strategic relationship with Russia. Contrary to conventional wisdom, such a relationship will not come about due to empathy for the Muscovite elite and their interests, nor acquiescence to them. Russia will only take the EU’s interests into account if the bloc stands its ground.

How to expand the EU’s toolkit

To address Russia’s clandestine operations in Eastern Partnership countries, the EU needs a counter-subversion policy that can protect their economic, financial, societal, and political reforms. This calls for not only a more active and coherent stance on existing policy, but also an expansion of the EU’s toolkit in five key areas:

  • Media and information warfare.
  • Cyber security.
  • Intelligence and security services.
  • Defence.
  • Energy.

In the first area, past European efforts have centred on support for investigative journalists and fact-finding NGOs. This support came on a bilateral basis or through a coalition of like-minded countries, as seen with initiatives such as the Visegrad Fund. Yet, as important as these measures have been, they have fallen short of their envisioned effects. This is because the content they produce (most of which is available online) only reaches a small audience. As conventional television is still one of the most important sources of information for citizens of Eastern Partnership countries, it is important for the EU to address this medium directly. To establish public TV stations that are editorially and financially independent from the government through broadcasting fees is only the first step in this process. There is also a need for broader support in the form of advice, expertise, programme content, and quality control mechanisms.

The expansion of TV content needs to account for societal diversity. One pattern that has been particularly apparent in Georgia and Moldova is that Russian disinformation on TV targets ethnic and linguistic minorities. With no capacity to provide fact-checking services in viewers’ native languages, the state has de facto abandoned these information bubbles. In Western countries, public broadcasting institutions are responsible for providing accurate, accessible information to ethnolinguistic minority groups. For strategic reasons, they should do so in Eastern Partnership countries as well.

While impartial public services of this kind would provide more accurate content than oligarch-owned TV stations or foreign propaganda channels do, they would not make these sources of disinformation go away. However, changes in the regulatory framework could make it much more difficult to spread disinformation using these outlets’ current business models. Firstly, rules on the transparency of media ownership, the acquisition of media outlets, and advertising and finance would make it more difficult for foreign powers or oligarchs to secretly purchase these assets. Secondly, rules on the financial self-sufficiency of media enterprises would prohibit oligarchs from financing news agencies to manipulate the public debate. They would force media enterprises to live on their own revenues, either through subscriptions or third-party advertisements. It is unlikely that Eastern Partnership states will adopt such legislation on their own, as TV propaganda is an important source of ruling parties’ power and legitimacy. Only EU pressure and conditionalities will change this.

Western European policymakers often assume that the fight against propaganda requires counter-propaganda or censorship. But that is far from the truth. The effort to counter disinformation primarily requires precise intelligence on adversaries’ messaging, content, narratives, emotions, amplifiers, channels of communication, techniques, and tools to increase outreach – allowing for the formulation of a communications strategy that responds to challenges in an appropriate way.

In Ukraine, several EU member states support a variety of local NGOs that have developed considerable expertise in identifying and tracking Russian and local disinformation. However, the EU lacks the structures to absorb information generated by its local partners, adapt its communications strategy accordingly, and, even more importantly, help local actors improve their strategic communications to protect the political process from interference. Although there are capable local actors in Ukraine that the EU can work with on information security, there are few such actors in other countries in the bloc’s eastern neighbourhood (as is particularly apparent in Georgia and Moldova). The EU needs to launch capacity building programmes in this sector.

In parallel, cyber operations are an essential part of covert warfare in the twenty-first century. This can be seen in destabilising efforts involving everything from the use of big data in assessing citizens’ mood and prejudices (and thereby exploiting them through information operations) to espionage, to sabotage missions that paralyse branches of the government or strategic infrastructure. Improvements to cyber security and cyber resilience in the EU and its eastern neighbourhood are necessary to counter subversive actions.

The EU has slowly made progress in this area by making its 2015 Directive on Security of Network and Information Systems and its 2019 Cybersecurity Act part of the legal framework that signatories to a DCFTA must adopt. However, the EU does not provide any technical assistance or capacity building to help countries implement these directives. The main challenges for Eastern Partnership countries in the cyber sector are in: safe storage, processing, and access to data; the security and integrity of electronic communication networks and services; the capacity to prevent attacks, as well as to create effective cyber emergency response teams (CERTs); cyber defence capabilities; cyber hygiene on the user level (both public and private); and networking between domestic cyber structures and those of international actors.

To improve their national cyber capacity, Eastern Partnership states need to forge partnerships with local IT firms. But, in this, there are few such companies that Eastern Partnership governments can turn to – except in Ukraine, which has a significant and rapidly growing IT sector. (Moldova adopted legislation to facilitate growth in the sector in 2019, but it remains to be seen whether this is sustainable under the country’s new government.) Hence, Eastern Partnership countries are dependent on IT companies and services from the US, Europe, Russia, and China. And the use of Russian and Chinese firms raises particularly acute concerns about security.

Many of the steps the EU needs to take first concern domestic cyber security and cyber sovereignty. The bloc should create the legal framework and administrative structures to certify software and hardware; institutions to rapidly coordinate national CERT teams through an EU-wide “super CERT” (currently under development as a Permanent Structured Cooperation (PESCO) project); and cyber forensic and investigative bodies across Europe. These structures could audit Eastern Partnership countries’ cyber security authorities and legislation; develop clear benchmarks and goals for organisational reforms; engage in capacity building programmes; provide critical information on emerging and imminent cyber threats; and liaise with certified local authorities. They could also help adapt EU standards to the rollout of 5G infrastructure in these countries. It is beyond the capacity of Eastern Partnership states to carry out a full technical evaluation of complex supply chains – networks for not only 5G but also, inter alia, government, military, and intelligence communications. Accordingly, they need help from external stakeholders such as common EU cyber security research institutions (which are the subject of another PESCO project).

Functional cyber security structures also have an important role to play in fighting money laundering. Links between national banks and cyber intelligence units have proven important to uncovering financial crimes. Foreign influence operations often depend on the same opaque and illegal financial channels to provide money for operational costs: paying sources; corrupting individuals; funding front organisations (such as NGOs and media outlets); and purchasing storage facilities, weapons, and other assets to prepare armed insurgencies. The kinds of covert operations depicted in the pyramid above are costly affairs. Disrupting their financial support networks would be an effective way to combat them.

This is not only a foreign policy issue, as the EU is working to redefine its rules and regulations to prevent member states from being safe havens for money laundering and other illegal financial operations. Once there is a coherent European legal and institutional framework in this area (that includes reporting standards and financial oversight mechanisms; compulsory data exchange between banks and investigative services; and special authorities to coordinate investigations), the EU can export this to its eastern neighbourhood.

Ultimately, cyber security authorities and financial oversight bodies will only foil foreign covert operations where local law enforcement agencies arrest the right culprits, confiscate their assets, and close illicit cover organisations. In this, it is troubling that Eastern Partnership states are at the lower end of the World Bank’s Government Effectiveness Estimate: Ukraine (-0.46) and Moldova (-0.53) fall well below the global average; only Georgia (+0.58) has seen significant improvements since 2005, putting it roughly on the level of Greece (+0.31). But there is a large gap between these countries and, for example, Germany (+1.72).

All Eastern Partnership states suffer from overlap and conflict between the competences of their investigative and law enforcement agencies; low salaries in the public sector (which increase institutions’ vulnerability to corruption); opaque procedural laws; complicated, bureaucratic investigative procedures; criminal codes replete with loopholes and contradictions; little to no institutional cooperation between law enforcement bodies; hierarchical, centralised structures in which a few high-ranking decision-makers can block or foil investigations in entire service branches; and significant political control over investigative bodies. There have been few deep reforms of the Eastern Partnership’s investigative and law enforcement agencies. And, where such reforms have occurred (as they did under interior minister Vano Merabishvili in Georgia or prosecutor general Ruslan Ryaboshapka in Ukraine), they have been subject to intense campaigns of obstruction and defamation by local business elites and established political forces. Without intense pressure from abroad, even minor reforms would not have taken place.

Given the Trump administration’s lack of interest in rule of law issues, the EU needs to prioritise its demand for security sector and judicial reform in Eastern Partnership countries. The EU also needs to create tools for providing direct support to these states, including:

  • Initiatives such as the EU Advisory Mission in Ukraine (EUAM), which provides experts to evaluate reforms in detail, comment on and revise draft legislation, supervise implementation, and liaise with the authorities and civil society groups on the ground. Security sector reform is a highly technical matter that requires in-depth knowledge, as well as professional experience of implementation. One cannot reasonably expect diplomats to provide such technical assistance.
  • Task forces comprising investigators, prosecutors, and judges – which the EU could send to Eastern Partnership countries not only in an oversight, advice, and assistance capacity, but also to provide impartial investigative and judicial capabilities in politically sensitive cases. Such cases have had a particularly corrosive effect on the political culture and professional integrity of Eastern Partnership countries’ judicial systems, not least where they concerned former top officials or powerful oligarchs.

In a contested environment such as the EU’s eastern neighbourhood, the intelligence and security sectors are key. Without trusted and effective intelligence, Eastern Partnership states have no chance of withstanding Russia’s destabilising operations. By constantly monitoring the threat situation, intelligence agencies play a central role in both informing decision-makers about hostile operations and tipping off law enforcement and financial security services to investigate and prosecute culpable individuals and networks. The problem is that Eastern Partnership countries’ domestic intelligence services are either unreliable because they are effectively part of the political system (making them vulnerable to corruption and abuse for political and economic gain) or have only weak capabilities.

Therefore, the EU needs to urgently support reform in, and devise capacity building programmes for, Eastern Partnership countries in these areas. The EU should provide capacity building programmes, structural coordination on threats, technical support (particularly on cross-border signals intelligence), and military intelligence – in return for in-depth reform of the intelligence and security services. Such reform would involve increased democratic accountability, a reduction in the overlap between law enforcement agencies’ competences and procedures, and provisions designed to curtail corruption. In Ukraine, EUAM proved invaluable in liaising with local services on their needs, as well as in judging the progress (and, unfortunately, regression) of intelligence reform. Building on EUAM’s experience, the EU could appoint intelligence liaison offices in Tbilisi and Chisinau. It should create an Eastern Neighbourhood Intelligence Support and Coordination Cell in Brussels, to both coordinate assistance (as the support group does) and facilitate practical exchanges of intelligence. The EU could expand the Joint EU Intelligence School, an infant PESCO project, beyond narrow cooperation between eastern Mediterranean states – so that it covers eastern European countries in which the bloc has strategic interests. The school would then be suitable for training intelligence personnel from Eastern Partnership and Western Balkans countries.

On top of this, the EU needs to dramatically increase its own intelligence capacities in its eastern neighbourhood. Where necessary, EU member states’ intelligence agencies should compensate for shortcomings in Eastern Partnership countries’ domestic intelligence and particularly counter-intelligence services – perhaps vetting candidates for important offices, identifying hostile operations and their cover organisations early on, and anticipating power grabs by influential figures.

This is especially important in situations of revolutionary change in which new administrative and other power structures emerge – something that is still a distinct possibility in all Eastern Partnership countries. These situations provide Russia with an opportunity to use its networks of front organisations to place allies in new structures and foil reform efforts from within. The EU has been too reactive in these scenarios, leaving it unable to effectively monitor the development of the situation and the people driving change. Of course, there is always a significant chance of miscalculation in a turbulent environment. But the EU’s lack of proper intelligence precludes success. In the past, the bloc has often made up for this by relying on American intelligence.

Moscow sees covert operations as the main way to destabilise governments and expand its influence. Yet it also disrupts them in more overt ways. As depicted in the pyramid above, Moscow uses open threats to a country’s territorial integrity and sovereignty to intimidate governments. Even without invading other countries, Russia sometimes uses a military show of force on the border of neighbouring countries to underscore its escalation dominance and thereby influence their decisions. For example, in March and April 2014, Russia massed three operative manoeuvre groups on its border with Ukraine. Fearing an outright invasion, Ukraine deployed the very few combat-ready military forces it had at its disposal to defensive positions close to Kyiv and the west bank of the Dnieper, and refrained from a military response to Russian special operation services’ takeover of government buildings and establishment of separatist structures in eastern Donbas.

Some European diplomats believe that turning Eastern Partnership countries into non-aligned or neutral states would help stabilise the region. However, this would not happen automatically – and Moscow would be unlikely to respect such non-alignment. Indeed, non-alignment would only be a viable option for Eastern Partnership countries if they strengthened their capacity to defend themselves from external subversion.

There is an urgent need to decrease Eastern Partnership countries’ vulnerability to the threat from proxy forces such as those in Moldova and from the Russian military in Georgia and Ukraine. Of course, it is difficult to imagine a situation in which Eastern Partnership states would be immune to military attacks from a large, nuclear-armed regional power such as Russia. But their objective does not have to be total immunity. Like many non-aligned states during the cold war, they should make military preparations designed to convince potential aggressors that military aggression would come at too high a cost. Ukraine showed the value of this approach in 2015 and 2016. Russia theoretically maintained escalation dominance in Ukraine (an issue often fetishised by opponents of stronger military aid for the country), but any further escalation would have necessitated a much greater Russian effort – one that the Kremlin would have struggled to justify to its domestic audience. Nonetheless, the Ukrainian case also showed that the issue of increasing the effectiveness of a country’s armed forces is about not just equipment but also comprehensive, long-term engagement in military and defence-industrial support.

In the 1990s and 2000s, the armed forces of Georgia, Moldova, and Ukraine were neglected, ill-equipped, and undertrained, while their leadership ethos, techniques, and combat procedures were still based on Soviet doctrines and principles. As a result, the Russian military could largely anticipate what its opponents would do in every contingency. Moreover, Eastern Partnership countries’ command and control equipment had not changed much since the demise of the Soviet Army. This meant that Russia could – in the initial stages of the war in Ukraine and with second-line forces in Georgia – intercept their communications. Accordingly, to the Russian military they were an open book. This vulnerability persists in much specialised equipment – including air-defence systems, coastal surveillance systems, airspace surveillance radars, and artillery spotting sensors.

Georgia tried to re-educate its military personnel in the Western way of war by contributing to as many Western military missions as possible (including those in Iraq, Afghanistan, and Kosovo) and by trying to acquire US military support that would enable such participation. But international missions and counter-insurgency warfare are very different from the defensive combined-arms operations that Georgia’s army was supposed to undertake to defend the country against its Russian counterpart. As such, this experience was of little help when the war in Georgia erupted in 2008.

The problem is also apparent in European-led exercises and training missions that include Eastern Partnership countries, which usually focus on “soft” security issues such as counter-terrorism, maritime security, or disaster relief and humanitarian operations. These are not the areas that Eastern Partnership states are most interested in.

In 2015 the US, the UK, and Canada started a bilateral initiative in Lviv to train Ukrainian battalion and company commanders in Western combat and leadership techniques (Poland and the Baltic countries later joined the effort). This mission may come to be regarded as much a success in helping NATO officers understand Russian war-fighting tactics as in bolstering Ukraine’s campaign in Donbas.

The initiative could serve as a template for a broader EU training and leadership support effort to professionalise Eastern Partnership countries’ armed forces. The EU could admit a certain number of Eastern Partnership states’ junior officers to the Military Erasmus Programme. It could also fund further training for young officers in one of Europe’s many military academies. The EU should send experts to Eastern Partnership countries to refine their military training curriculums and to modernise and Westernise those for officers of all kinds. It should complement the effort with command post exercises and war games, as well as common manoeuvres for all armed forces, to prepare for various contingencies in the region (US forces in Europe frequently conduct such manoeuvres with Ukraine).

Assistance in comprehensive defence planning is especially necessary for Georgia and Moldova. As Moldova does not directly border Russia and separatist forces in Transnistria present a different threat to conventional Russian military units, the Moldovan army needs to develop into a high-readiness, mobile force that coordinates well with the police to quickly counter hybrid threats. Georgia, in contrast, is particularly vulnerable due to its geographical position, with sizable Russian military forces deployed on its territory and across the border. Georgia’s defence policy has undergone a chaotic series of shifts and restructurings – with its holistic concept for territorial defence (comparable to that in Sweden, Finland, and the Baltic countries) still in the early stages of implementation. Because the Soviet Army was never organised for territorial defence, Eastern Partnership countries inherited no tradition of thinking in this area.

Similarly, international operations such as the NATO mission in Afghanistan do not resemble, or help forces prepare for, territorial defence per se. The little training and advice that Eastern Partnership countries do receive from the EU (as envisioned under Association Agreements) are designed to facilitate their participation in EU-led missions or battlegroups. This may help the EU recruit staff for its missions, but it hardly makes it easier for Eastern Partnership countries to develop the armed forces they need. While, for example, the Visegrad battlegroup regularly includes Ukrainian and Georgian soldiers, it is unclear whether EU battlegroups have a practical use.

In their approach to defence reform in Eastern Partnership countries, the EU and NATO should primarily focus on territorial defence rather than preparation for international missions. The Lithuanian-Polish-Ukrainian brigade may serve as a template for joint EU- Eastern Partnership training designed to address full-spectrum warfare. Although this partnership is facilitated by geography, more distant EU member states could still strengthen their ties with Eastern Partnership countries through officer exchanges, common exercises, or efforts to share training facilities.

Finally, there is the issue of the technical and technological modernisation of Eastern Partnership countries’ armed forces. This is a long-term endeavour that requires considerable investment in military procurement, as well as in the defence industry. Due to the high costs of Western defence technology, some post-communist NATO armies in central Europe retain much of the equipment they used during the cold war. And financial considerations are even more of a barrier for Eastern Partnership countries. Hence, Europe should create a foreign military aid programme similar to that established by the US – under which Eastern Partnership countries could apply for cheap loans to purchase European defence goods, in cooperation with European defence planners. The EU could supplement this effort with a neighbourhood defence support fund.

Many European countries have reservations about supplying advanced weapons systems to Eastern Partnership countries, due to concerns about corruption and possible compromise by Russian intelligence agencies. This is especially true of systems for air defence; electronic warfare; command, control, communications, computers, intelligence, surveillance, and reconnaissance; and weapons guidance. And, while Eastern Partnership countries would like to join defence-industrial cooperation programmes in Europe, many EU member states do not want to allow them to do so. This is because Ukrainian firms would directly compete with domestic ones such as EADS and MBDA. For these member states, European defence-industrial cooperation is a form of protectionist hedging.

The EU could tackle these problems by launching a special Eastern Neighbourhood Defence-Industrial Cooperation Programme. The aim of the initiative would be to produce systems that combined Ukrainian know-how and defence products with European components. These components would be sufficiently Western to resist Russian countermeasures but not so Western as to pose a threat to system integrity if they were captured or compromised by Russia’s intelligence agencies. Incorporating Eastern Partnership countries into the supply chain would decrease the price of these products – which would also be suited to foreign military aid programmes in the Middle East and Africa.

Last but not least, the EU faces challenges related to Eastern Partnership countries’ energy security. In an ideal world, energy transit would enable constructive cooperation between Russia, the West, and Eastern Partnership states: Russia depends on cheap and secure facilities for exports to Europe; Europe needs reliable sources of energy (both oil and gas); and Eastern Partnership states want to earn transit fees by connecting the two. But – due to the crises over gas transit through Ukraine that erupted in 2006 and 2009, as well as fears that some member states’ high dependence on Russian gas, oil, and electricity makes them vulnerable to blackmail – the EU has started to implement a common energy policy. In general, the policy is designed to create a transparent, interconnected, and competitive domestic market for energy that breaks up certain energy companies’ monopolies and diversifies supply. The legal framework of this energy policy has developed into foreign policy, as neighbouring states can join the EU energy community by adapting the bloc’s rules and governance structure to their energy markets. Inclusion in the larger EU market should decrease the cost of energy for Eastern Partnership countries (some of which currently have to pay among the highest prices for natural gas in Europe) and should significantly strengthen their hand in negotiations over energy purchases.

There has been some progress in this area: Georgia is now much better connected with neighbouring countries and has diversified its supply; Ukraine has implemented painful reforms to its domestic energy market and pricing regulations, while breaking up monopolies and eliminating corruption schemes that proved to be a major political liability. Yet Moldova’s attempts to connect with the Romanian gas market were cut short when a pro-Russian government came to power in November 2019.

However, in the coming years, the bigger issue on energy transport will concern whether Eastern Partnership countries will play any role in energy transfer, or whether Russia will be able to circumvent the region as a whole by completing the TurkStream and Nord Stream 2 pipeline networks. Eastern Partnership countries fear that, if it no longer needed other post-Soviet states (especially Belarus and Ukraine) for energy transit, Russia would be freed of a major constraint on its attempts to bully and intimidate them – including through the use of military force. Last year, Russia and Ukraine averted a showdown on the latter’s role in gas transit only at the last minute, reaching an agreement that runs until 2024 and sets a minimum level of annual gas transit to maintain energy infrastructure in Ukraine.

While the EU mediated the negotiations as a broker, the US was the true facilitator of the agreement. Pending US sanctions on new Russian gas pipelines (which primarily target Nord Stream 2 but may also complicate the maintenance of TurkStream) made it risky for Russia to circumvent eastern Europe entirely. Given that there was a growing consensus in Washington about the need for these sanctions, and that Germany had little support within the EU for Nord Stream 2, Russian President Vladimir Putin needed to hedge against possible future developments. Maintaining a minimal gas-transit role for Ukraine was part of that hedging process. Hence, Russia has postponed its ultimate decision on the transit issue – and the dispute is likely to continue for some time.

How to improve EU decision-making and unity on the Eastern Partnership

The EU is unlikely to become a unified geopolitical actor in the coming years. But, even without doing so, the bloc can achieve much through the development of new regulatory frameworks in areas such as money laundering, cyber security, the media, and defence exports. And, by adhering to the “more for more” principle, the EU can condition its assistance to Eastern Partnership countries – and their access to its programmes – on the adoption of such regulations.

Of course, the recent setback in funding for PESCO and European Defence Fund projects under the EU’s new financial framework casts doubt on its ambitions in these areas. The EU seems to have grown more introverted, divided, and modest in its ambitions, almost abandoning foreign policy in the wake of the 2015 refugee crisis and the coronavirus pandemic. However, this trend is not irreversible – yet.

One of the trickiest issues in the area is that of common structures. Member states retain control of almost all the EU’s collective intelligence, police, and judicial capabilities. This is particularly apparent in intelligence, a realm in which coordination between them is sporadic and lacks a coherent institutional underpinning. Given the big capability and competence gaps between member states’ intelligence services, and the fact that some of them have likely been penetrated by their Russian counterparts, structured cooperation between these services would require very careful, detailed planning. Either the European Council would have to establish a new, centralised intelligence agency that worked under the External Action Service, or a few capable and reliable member states would have to create a broader Eastern Partnership intelligence cell, as part of a PESCO coalition of the willing.

This would coordinate not only intelligence efforts but also member states’ bilateral military and police assistance programmes. A “European Security Compact” – either as a PESCO initiative or, like the Support Group for Ukraine, one working under the European Commission – would coordinate support for defence and intelligence reform projects, provide access to EU funds for such projects, liaise with Eastern Partnership states on the assistance they require, and evaluate the progress they made. The initiative could also cover joint planning, command post exercises, and war-gaming – involving comprehensive crisis response mechanisms – to test, evaluate, and refine its concepts and structures. It would also be advisable for the EU to replicate EUAM (which has already proven to be a useful tool) in Tbilisi and Chisinau. All these steps would be feasible within the EU’s current budgetary and legal frameworks. However, they require the political will to act.

The EU appears to have reached a consensus that, if it wants China to take it seriously, it will need to establish a position of strength in their economic relationship. The EU has not yet applied this lesson to its efforts to deal with Russia at home and in its eastern neighbourhood, but the basic rationale for doing so is the same. While many European diplomats and other officials may simply dismiss the prospect of the EU becoming a security enabler, the rest of the world will hardly be forgiving of flaws in the bloc’s organisational culture and policies. The EU has never had a military dimension to its identity or organisational culture, but establishing one is a prerequisite of strategic sovereignty. A strategically sovereign actor must deal with all dimensions of state power – even those that make it uncomfortable.

Thus, EU cohesion still has a lot of room for improvement. The geopolitical debate within the bloc is overshadowed by north-south and east-west struggles over priorities and resources. So far, it has been easier for EU member states to block or weaken proposals that would be beneficial to others than to gain support for their own projects. This system of mutual deadlock does not serve European interests in Eastern Partnership countries (nor in the Mediterranean). Larger member states continue to complain about a lack of support for their projects from smaller states, which eye these sometimes unilateral initiatives with ever-growing suspicion.

The dynamic can be seen in two recent developments: French President Emmanuel Macron’s push for a new European security order and Germany’s proposal to complete Nord Stream 2. In each case, the domestic political establishment has insisted that the initiative is in the interests of Europe as a whole. But very few EU capitals see it this way. As Macron has yet to lay out the concrete terms, conditions, red lines, and desired end state of his proposed security order, the effort has elicited a cautious, suspicious response from eastern and Scandinavian member states. For now, the initiative has not resulted in any tangible steps that they need to respond to – but this may well change. If it does, they will likely seek support from Washington in pushing for a more conservative stance on Europe’s security order.

Meanwhile, even supposedly pro-Russian countries such as Italy and Bulgaria oppose Nord Stream 2. Although Germany could muster a small blocking minority to thwart attempts to halt the project, security concerns have led some member states to count on pressure from US sanctions to prevent the completion of the pipeline.

With both Germany and France now strong advocates of European strategic sovereignty, the two countries need to reconcile their ambitions with the security interests of other member states. Efforts to protect Franco-Iranian deals or German-backed pipelines from US sanctions are not the basis for the kind of strategic sovereignty that would benefit Europe. (Nor is the desire to shift the production of medical goods from China to Europe.) To become real and relevant, European strategic sovereignty needs to be multidirectional – which means that it must cover Eastern Partnership countries.

It is no easy task to exchange mutual deadlock for mutual support on strategic issues. However, member states can start to achieve this by acknowledging that:

  • Some of them have special experience and expertise in dealing with various EU partners. Eastern European and Scandinavian member states should generally trust France, Italy, and Spain on issues involving the Mediterranean, Iran, or the Middle East peace process. And France, Italy, and Spain should pay heed to eastern European and Scandinavian countries in anticipating Russian moves and interests, as well as in dealing with Eastern Partnership countries.
  • EU member states should consult one another in Brussels in advance about their planned moves and policies that relate to strategic sovereignty, to spare them unpleasant surprises.
  • Member states need to expand the EU’s portfolio in key areas – as they have done throughout the bloc’s history. France and other Mediterranean countries should agree to increase EU resources and operations in Eastern Partnership countries; in return, Scandinavian and eastern European member states should make a greater contribution to French missions in Africa, maritime security operations in the Mediterranean, and other initiatives. France should support Scandinavian countries in resisting Russian revanchism; Scandinavian countries should support France in resisting Turkish revanchism. They should frame all this as a defence of the legal status quo of the European security order.
  • The European Commission’s role should be strengthened to avoid protracted bilateral disputes between EU member states. For example, had Germany allowed the European Commission to take responsibility for negotiating and launching new pipeline projects, other member states might now be more willing to help such initiatives resist external pressure.

In theory, the merits of these recommendations should be self-evident to European leaders who seek to create a cohesive EU foreign policy. Member states may have long lived in a permissive environment for unilateral action within the EU, but the world is changing fast. The EU finds itself in an increasingly hostile geopolitical environment – one in which the non-confrontational security policies the bloc favours are less effective than they once were. Other powers are relatively unconcerned about European security, diplomatic, or political interests. Indeed, the last decade has seen Russia, China, Iran, and Turkey all become more assertive vis-à-vis the EU.

Therefore, if the EU wants to be strategically sovereign, and to make its voice heard on the global stage, it will need to behave more assertively. This will require the bloc to strengthen its alliances and security partnerships with neighbouring countries – and to be less reluctant to change the behaviour of other powers.

About the author

Gustav Gressel is a senior policy fellow with the Wider Europe Programme at the European Council on Foreign Relations, based in the Berlin office. Before joining ECFR he worked as a desk officer for international security policy and strategy in the Bureau for Security Policy in the Austrian Ministry of Defence and as a research fellow for the Commissioner for Strategic Studies in the Austrian Ministry of Defence. He also worked as a research fellow at the International Institute for Liberal Politics in Vienna. Before beginning his academic career, he served in the Austrian Armed Forces for five years.

Gressel earned a PhD in strategic studies at the Faculty of Military Sciences at the National University of Public Service, Budapest, and a master’s degree in political science from Salzburg University. He is the author of numerous publications on security policy and strategic affairs and is a frequent commentator on international affairs in German and international media.

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Promoting European strategic sovereignty in the southern neighbourhood https://ecfr.eu/publication/promoting-european-strategic-sovereignty-in-the-southern-neighbourhood/ Tue, 01 Dec 2020 08:00:32 +0000 https://ecfr.eu/publication/promoting-european-strategic-sovereignty-in-the-southern-neighbourhood/ Summary
  • Events in the Middle East and North Africa strongly affect Europe, but other global and regional powers are determining the course of events in the region.
  • Europe’s interests include migration, counter-terrorism, and open trade routes, but its larger goal should be to promote greater stability in the region.
  • To achieve greater sovereignty, Europe needs to push back against rival powers, build leverage in armed conflicts, and be more effective in supporting reform.
  • The EU should work towards greater European unity in the region, including through the use of flexible and open coalitions of member states.

Introduction

Turmoil in the Middle East and North Africa (MENA) directly affects Europeans. Yet their influence there has never been weaker. Instability in the region has serious implications for Europe on issues such as migration, security, energy, trade, and the threat of cross-border conflict and lawlessness. Covid-19 is having profound ramifications across the MENA region, posing significant health and economic challenges. Despite its economic and political partnerships with regional players, the European Union has been unable to influence the major shifts that have taken place there. The EU’s inability to shape developments in a region that has a major impact on Europe is a failure of strategic sovereignty.

There is widespread disorder in the MENA region. Internationalised civil wars rage in Syria, Yemen, and Libya, while the central authorities of several other countries look increasingly shaky. Popular discontent has provoked large-scale public protests in Algeria, Iraq, Lebanon, and Sudan – even if the coronavirus has led to their suspension – and simmers elsewhere in the region. Even before the arrival of covid-19, the MENA region appeared destined for further discord and upheaval in the coming years, as the political, economic, and social drivers of the 2011 Arab uprisings remained as strong as ever.

The coronavirus looks set to worsen the region’s problems and lead to increased instability. The number of infections continues to rise across the region, threatening to cause a humanitarian disaster in war-torn societies and crowded refugee camps, and to exacerbate several countries’ economic problems. Wider upheaval has created openings for increased external interference and fed the forces of extremism and destabilisation. European states should not succumb to the illusion that regional instability has bottomed out: there is a real prospect that the situation will significantly deteriorate.

The MENA region’s interlinked crises have powerful effects on European interests. Chief among these has been the displacement of millions of people caught up in violent conflict, many of whom have sought refuge in Europe. This has been accompanied by terrorist operations across European cities carried out by the Islamic State group (ISIS), an organisation that grew out of conflict and state collapse in Syria and Iraq. Together, these factors have contributed to the rise of populist nationalist parties that have shaken the foundations of Europe’s political systems.

In the absence of a significant European role, other powers are determining the course of events in the region. Russia, Turkey, Gulf monarchies, and Iran have asserted their influence through direct military engagement in regional conflicts. Some will hope that Joe Biden’s recent victory in the US presidential election will create opportunities for renewed US-EU alignment on regional issues. But the transatlantic split that opened up under President Donald Trump will remain to some extent, with the US continuing to disengage from the MENA region. Regional powers, meanwhile, pay little attention to European positions, convinced that the EU is incapable of decisive and effective action. This perception has been reinforced by events in Libya, where a regional and global proxy conflict has flared up as Europeans fail to come up with a coherent and united response. While European countries retain influence in other North African states, they have not found a way to address the increasing economic and social problems in the region. Yet the EU’s lack of strategic sovereignty in the MENA region need not be permanent. The EU can gain greater agency in the region if it clarifies its political objectives, makes better use of its assets, and overcomes its internal divisions by building intra-European coalitions.

European interests in the Middle East and North Africa

In recent years, Europe has primarily framed its interests in the MENA region in defensive terms: broadly speaking, to prevent disorder there from affecting Europe in the form of refugees, migrants, or terrorism. The EU has had some success in this effort. But, so long as it lacks a greater role in shaping long-term stability in the region, the EU will largely remain at the mercy of events and other actors. To fully protect its interests, Europe needs to balance short- and longer-term considerations.

Migration and refugees

In 2014 and 2015, refugees and migrants crossing the Mediterranean to Europe created a political crisis within the EU. More than a million people arrived in 2015 alone. Most of them were refugees fleeing the conflict in Syria, as well as other wars in the wider region. The EU stemmed the flow largely by making arrangements with gatekeeper countries: a deal with Turkey in 2016, and a series of cooperation agreements with Libya to prevent departures and stop boats at sea. These arrangements, along with continuing cooperation with other North African countries, have reduced the number of migrants and refugees arriving in Europe. But they remain in a precarious position, subject to fluctuating political relationships and conditions on the ground. Following a military setback in northern Syria in February 2020, Turkey temporarily halted cooperation with the EU on refugees, leading to a surge in the number of people seeking to enter Greece. And there is growing concern in Europe that instability in Libya could displace more people, as could economic and political problems in other North African countries. Europe’s limited ability to influence the course of conflicts and economic decline, and its vulnerability to blackmail by gatekeeper countries, weaken its strategic sovereignty in a region it views as crucial.

Counter-terrorism and security

The growth of transnational jihadism since 2001 has given rise to a series of attacks in Europe, as well as killings of Europeans based in the MENA region. The spectacular ascent of ISIS in Syria and Iraq led to high-casualty attacks in several European cities. Thousands of European citizens travelled to the region to join ISIS or were encouraged by the group to strike at home. European countries were actively involved in the anti-ISIS coalition that recaptured territory from the group, and supported the operation that dismantled one of its major outposts in Libya. But ISIS and other jihadist groups remain active in the region. The clear lesson of recent history is that conflict, state breakdown, and failures of governance allow jihadist groups to establish themselves. There are already signs that ISIS is regaining strength in Iraq and Syria, even if it is far weaker than it was a few years ago. Deepening economic crises in Lebanon, Syria, and Iraq could lead to broader state breakdown, creating a vacuum that could be filled by extremists. And, so long as regional actors continue to engage in proxy conflicts across the Middle East (sometimes by exploiting sectarian identities), the threat of militant mobilisation will remain very real. Europeans’ security will be at risk until there is a resolution of the problems in the Middle East that facilitate the rise of terrorism.

Energy, trade, and investment

Europe relies on the MENA region in energy and trade. While the region does not supply most of Europe’s oil and gas imports, countries there are important suppliers to some EU member states, providing an alternative to Russia and helping set global oil prices in a fashion that affects European economies. Moreover, attacks on tankers in the Gulf of Hormuz have a direct impact on the global economy. Accordingly, the free flow of oil and trade through sea lanes in the Middle East is important to European prosperity. And European companies are heavily involved in oil and gas exploration and production in the region – activity that is imperilled by both conflict and sanctions. More broadly, the value of trade between the EU and the MENA region averaged $636 billion per year between 2014 and 2017. France, Germany, Italy, Spain, and the United Kingdom collectively sold weapons worth $12 billion to Middle Eastern countries between 2014 and 2017.

Humanitarian concerns and international law

Conflict in the region affects not only Europe’s economic and security interests but also its commitment to limiting human suffering and upholding international law. The EU and its member states contributed an average of $52 billion in development assistance per year to the region between 2014 and 2017. The bloc is heavily invested in providing support to refugees and displaced people. As part of their backing for a rules-based international system, the EU and its member states work to limit violations of international humanitarian law, which have been widespread in the conflicts in Syria, Libya, and Yemen. The EU’s engagement with the Middle East Peace Process (MEPP) is also shaped by its commitment to support international law, which prohibits annexation and the transfer of people into occupied territory. Europe’s limited capacity to shape the course of conflicts and peace settlements weakens its ability to create the kind of regional order that it favours.

Stabilisation and development

Underlying all these concerns, the EU’s fundamental interest in the MENA region is in the promotion of lasting stability. The de-escalation of conflicts and the construction of more resilient and legitimate state structures would provide the best foundation for the EU’s objectives: it would address the drivers of migration and terrorism, and facilitate free trade. Development in the region would create an economic hinterland for the EU, increasing its scope for offshored production and for investment in areas that could meet future European needs, such as those in renewable energy.

Given the current state of the region, the idea of bringing about stability may seem utopian; nevertheless, the EU’s underlying interest lies in the search for more stability and, at least, ending current cycles of violence, economic collapse, and state breakdown. The main challenge for the EU is to find a realistic way of advancing these goals in current conditions without sacrificing its short-term interests – which often depend on cooperative relations with state actors that stand in the way of the bloc’s longer-term objectives. Short-term fixes – including refugee deals, counter-terrorism operations, and other activities driven by realpolitik – have undoubtedly protected Europe’s short-term interests and, at times, been the best of a bad set of options. But, unless the region reverses its decline, these fixes will start to unravel. At worst, this approach threatens the EU’s longer-term strategic interests. So long as it fails to promote better and more legitimate governance, and to reduce the level of conflict and social unrest in the MENA region, Europe will be forced into a defensive posture, trying to limit the spillover effects on its territory. Europe should work towards meaningful and lasting regional stabilisation. This would provide Europe with greater means to protect its core interests related to refugee flows and cross-border terrorism.

The dynamics of European marginalisation

Looking across the MENA region’s diverse crises and hotspots, one can see how the EU’s ability to promote its interests is hampered by other actors and by its failure to use its assets effectively.

Syria and Iraq

Europe’s focus on Syria and Iraq is driven by the twin challenges of refugee flows and terrorism, given the emergence of ISIS amid the flames of conflict in the two countries. Both issues prompted a concerted European response in the form of the refugee deal with Turkey and participation in the US-led anti-ISIS military coalition. But it is Iran, Russia, and Turkey that are now determining the course of the conflict in Syria – the outcome of which will be critical to Europe’s interest in lasting stability in the country. Developments in Iraq are heavily influenced by Iran and the US, leaving Europe with a very limited role. Both Syria and Iraq require profound reform to address the vulnerabilities of their states; the challenge for Europe is to find a way of pushing this process forward when it does not participate in the military conflict that drives developments on the ground – and when key actors involved in the conflict are often pushing in the opposite direction. The economic tools European countries have used in Syria and Iraq – be they support for the Iraqi government or coercive pressure on the Assad regime – have had, at best, a marginal impact on securing their desired outcomes.

Europe’s principled end goal in Syria, which to all intents and purposes remains a short-term political transition, is increasingly disconnected from the reality on the ground. The Syrian government is now under intense economic strain, largely due to the Assad regime’s governance failings but also as a result of Trump’s “maximum pressure” campaign – which has been as much, if not more, focused on weakening Russian and Iranian regional influence than on securing political reform in Damascus. There seems little chance that this campaign – which the Biden team is unlikely to quickly recalibrate – will secure President Bashar al-Assad’s departure, given the Syrian regime’s commitment to its own survival and the backing it continues to receive from Iran and Russia. But, set alongside economic collapse in neighbouring Lebanon and Iraq, there is a real risk of wider state implosion across the Levant – which would severely imperil European interests, clearing the way for larger migration flows and an extremist resurgence. This trajectory originates in, first and foremost, Assad’s brutal and corrupt mismanagement (as well as similar dynamics among the Iraqi and Lebanese elites), but the imposition of broad US sanctions on Syria only exacerbates these problems. Although Europeans have only a limited ability to affect either issue, US extraterritorial sanctions directly impinge upon Europe’s sovereign economic policy on these states.

Libya

Ever since renegade general Khalifa Haftar attacked Tripoli in April 2019, events in Libya have been dictated by, above all, the United Arab Emirates, Turkey, and Russia. The UN mediation process has faltered in the face of intensified manoeuvring by these key external players, but has lacked meaningful EU support, given that some of the bloc’s member states have implicitly aligned themselves with the warring parties (despite strong German backing for the United Nations, centred on the January 2020 Berlin summit). Movement towards further political negotiations in late 2020 provides some new hope, but Europeans will need to adopt a more coherent approach to the conflict if they are to shape developments in Libya.

Europe’s disjointed policymaking and recent indecision are the result of disagreements between states such as France and Italy over how to address Libya’s political divides, Haftar’s role, and access to energy resources, as well as their competing positions on broader regional issues. Europe’s influence has been further limited by a lack of pan-European backing for Germany’s Libya mediation efforts (which sought to align international actors in support of a political process), deeper splits caused by Turkey, Russia’s dramatic intervention in Libya, and disputes over the eastern Mediterranean. The launch in March 2020 of Operation Irini – designed to enforce the UN arms embargo on Libya – has been undermined by European disagreements over its operationalisation, as well as the widespread perception that it is more focused on countering Turkish support for the UN-recognised government in Tripoli than on preventing Haftar’s regional backers from supplying him with weapons. This can be seen in the growing tension between France and Turkey. Europe’s marginalisation in Libya leaves rival powers in a position to shape the country’s future, despite the fact that important European interests are at stake there (particularly those in migration, security, and energy).

The eastern Mediterranean

Recent disputes over maritime boundaries and energy resources in the eastern Mediterranean intersect with the conflict in Libya, pitting Turkey against several EU member states, including Cyprus, Greece, and France. Turkey has stepped up its maritime exploration activity in disputed waters, increasing the risk of a military clash with Greece and France. While EU member states are united in condemning Turkish actions as provocations, they are divided over how forcefully to respond and have not sufficiently connected the dots between the overlapping conflicts. The confrontation highlights the EU’s need for a wider framework for relations with Turkey that balances the protection of European interests in energy, territorial sovereignty, and the rule of law with the need to maintain dialogue and cooperative relations with an important regional actor.

Israel-Palestine

On paper, the EU and its member states are just about holding together their collective positions on the MEPP. This is a success in itself, given the deep divisions between member states on the issue and a concerted push by the US administration to undermine long-standing pillars of the EU’s support for the two-state solution. All EU countries, with the exception of Hungary, have indicated their opposition to Israeli de jure annexation of parts of the occupied West Bank.

Yet, while the EU has maintained a formal consensus in defence of its long-held positions, internal divisions have prevented it from advancing measures to achieve its goals in Israel-Palestine, such as recognising Palestinian statehood or banning settlement products. The EU was also unable to agree on a policy response to proposed Israeli moves towards annexation (even if this process appears to be on hold now following a recent deal between Israel and the UAE).

The EU and its member states have been reluctant to directly oppose the United States, let alone carve out a more independent political role for themselves. Nor have they advanced concrete measures to defend what is left of the two-state solution or develop their policy positions. Instead, the EU seems to have fallen back on a short-term response: attempting to minimise the damage done by American and Israeli policies while running down the clock on the Trump administration – in the hope that a Biden administration will rescue the MEPP.

Gulf monarchies

Europeans have not found a way to respond to the rise of Gulf monarchies as geopolitical actors – as potential partners or spoilers with game-changing capabilities in the many conflicts playing out across the MENA region. While the UK and France retain some limited influence on these monarchies, all European countries have prioritised the development of economic ties with the Gulf, neglecting much-needed strategic positioning – including increased pressure on these states – in zones of instability. Crippled by competition between member states, the EU has struggled to gain political agency in its relations with Gulf monarchies. European capitals have struggled to deal with the perception in the Gulf that they support Tehran, given their sustained efforts to salvage the Joint Comprehensive Plan of Action (JCPOA). While Gulf monarchies sometimes exploit intra-European divisions, Europeans have hesitated to navigate intra-Gulf politics and manoeuvre within the available space.

Iran

Europe’s one regional success story, the nuclear agreement with Iran, has morphed into a failure of strategic sovereignty. While the EU has responded to the United States’ withdrawal from the agreement and maximum pressure campaign against Iran, Europe has failed to muster either the political capital or the economic resources to sustain Iranian compliance with the JCPOA. The bloc’s attempt to demonstrate economic sovereignty in the face of US secondary sanctions has also been hampered by long delays in the operationalisation of the Instrument in Support of Trade Exchanges (INSTEX). However, in light of the impact of the coronavirus pandemic on Iran, the EU has pledged to provide the country with €20m in aid and facilitate Iranian humanitarian trade disrupted by US financial sanctions. Meanwhile, the escalating rivalry between Iran and a regional coalition led by Trump has had a direct impact on European interests – as demonstrated by the potential threat to energy flows and shipping routes posed by attacks on tankers in the Gulf of Hormuz. Europeans have struggled to push Iran and the US-led alliance onto a political track that would avoid dangerous escalation, and have shown themselves to be divided on the issue: following the attacks in the Gulf of Hormuz, some EU states joined the US-led maritime mission there while others launched a separate European enterprise. A Biden presidency raises the prospect of a positive turn in this – including a revival of the JCPOA and regional de-escalation – but it will not be easy to overcome the deep divisions between the sides, which have become entrenched in the past four years.

North Africa

The EU retains greater influence than other regional powers in North Africa (excluding Libya), particularly the countries of the Maghreb. Nevertheless, even there, Europe’s policy often seems to fall short of achieving the kind of influence it might aspire to. In recent years, cooperation between the EU and North African countries has focused heavily on migration and counter-terrorism. While these relationships have largely worked well (again, excluding Libya), they have only addressed short-term problems, creating the perception among countries in the region that Europeans see them as merely an external line of defence. At the same time, as is evident in Egypt, the EU weakens itself by acting as a demandeur: its need for cooperation on these politically explosive issues makes it reluctant to criticise the more problematic aspects of its partners’ policies.

The EU’s long-term goal of supporting economic and political reform often comes second to short-term migration and security concerns, even though the lack of economic opportunities and social justice in North African countries increases emigration and radicalisation. These dynamics will only become more apparent with the economic impact of the coronavirus, which is having particularly severe effects on North Africa’s tourism- and trade-dependent economies.

Moreover, the EU’s support for reform often emphasises the promotion of free trade agreements. This provokes suspicion among its partners such as Tunisia. There is a broad consensus among European policymakers that the lack of inclusive and job-generating growth across North Africa stems from structural problems with the region’s political economy, including corruption, a lack of access to capital, and an unequal playing field. The challenge for the EU is in finding a way to address these problems when local elites often have only a weak commitment to doing so. Europe must do this at a time when North African countries increasingly resist the EU’s attempts to dictate the terms of their agreements – and when powers such as China and Russia are expanding their involvement in the region, providing local governments with a chance to diversify their relationships.

The Sahel

The EU and its member states have spent billions of euros on aid and development programmes in the Sahel; direct budgetary assistance, training, and capacity-building under the EU Training Mission in Mali and EU Capacity and Assistance Programmes in Mali and Niger; and the Sahel Alliance, for which the EU is a major convener. Nevertheless, the region’s security and governance problems remain unresolved, and the influence of jihadist groups is, if anything, expanding.

Events in the Sahel illustrate the difficulty of combining short-term and long-term goals. Despite long advocating an integrated approach to the Sahel, the EU has sometimes been hamstrung by its member states’ lack of shared commitment to the region, and their reluctance to push for more significant interventions (beyond investment) to increase pressure on regional governments to improve their human rights records and governance strategies. The EU has too frequently paid lip service to concerns about governance – particularly with regards to the Sahel Alliance – while continuing to increase investment and funding for development programmes that do not fully respond to the depth of the crisis in the region.

Strengthening European sovereignty in the Middle East and North Africa

As this paper’s assessment of regional trouble spots and challenges shows, Europe needs to make a greater effort to protect its interests in several ways. It needs to push back against rival powers more effectively; find a better way to exert influence over conflicts when it does not believe that armed intervention will be constructive; develop clear and realistic strategies that balance its short- and longer-term interests; and build greater European unity in policy on its southern neighbourhood.

Pushing back against rival powers

One of the EU’s biggest handicaps in trying to protect its interests in the Middle East and North Africa is its tendency to look to US leadership in a manner that precludes an independent policy. During Trump’s presidency, most European countries have experienced a growing divergence with the US. Across a range of regional issues, there has been a sense that the EU is vulnerable to the US suddenly changing its position without consulting the bloc or accounting for its interests. However, on everything from the Iran deal to the MEPP and Syria, European capitals shy away from charting an independent path, let alone confronting Washington.

On the few occasions that it has sought to articulate an independent foreign policy in recent years, the EU has proved ill-prepared to deal with US pressure. Washington has used secondary sanctions to threaten European countries’ interests over their support for the Iran nuclear deal, highlighting their unwillingness to deploy the necessary political capital to defy the US administration effectively.

This dynamic could change under Biden, as the new US administration will re-engage with multilateral initiatives in support of shared US-European interests. But the transatlantic split will remain to some extent, and the US will continue to disengage from the MENA region. This means that Europeans will need to take greater responsibility for protecting their own interests. While Europe should make an effort to renew its partnership with the US under the Biden administration – with a particular emphasis on re-establishing a shared approach to Iran and the MEPP – it is clear that European governments can no longer rely on Washington in the way that they did prior to the Trump administration. The EU must establish its own positions and stand up for them rather than instinctively falling in line with the US.

Europe should look for new opportunities to cooperate with the US, but it also needs to be prepared to challenge the US position and chart an independent path where their interests diverge. Given that the Trump administration could still step up its efforts to pressure Iran before leaving office, Europeans should be guided by their own calculations rather than those of Washington in the coming months. Even if they are broadly in alignment with US policy across the Levant, European states need to recognise that US extraterritorial sanctions challenge their ability to protect their sovereign interests. Here, Europeans will likely need to deploy an independent financial vehicle, modelled on INSTEX, that can channel sufficient humanitarian and stabilisation support to recipients across the Levant, despite the obstacles created by US sanctions. They should also resist US pressure to cut contact with actors such as Hizbullah in Lebanon, which would only lead to further destabilisation.

As part of a regional approach that looks beyond the US, Europeans should be willing to assume greater responsibility for dealing with other key external actors. Russia is clearly an important player in both Syria and Libya – opportunistically building up its presence there, often to the detriment of European interests. Europe needs to use a range of tools, deployed in a coherent fashion, to demonstrate strength and coercive leverage over Russia. But it also needs to be prepared to engage with the country in a pragmatic dialogue designed to protect their shared interests.

In Libya, for instance, Russia has bought influence relatively cheaply by deploying a small number of private military contractors (PMCs) and acting as an interlocutor between Turkey and Haftar’s backers. Here, Europe should try to replace Russia’s brokering role with more active diplomacy with regional actors, while working with the US to pressure Gulf actors to stop financing Russian PMCs.

In Syria, Europeans should test a more pragmatic track with Russia that has greater viability than previous approaches. This would recognise that they have some degree of shared interest in stabilising Syria but that, so long as European incentives are tied to unrealistic demands for a political transition, there is little prospect that Russia will play ball. The EU should outline low-level steps that Russia would need to take to trigger reciprocal measures from Europe. These initiatives could relate to important and still-principled issues such as stabilisation, humanitarian assistance, and detainees, which would all be in Europe’s interests given that they would facilitate some stabilisation efforts and serve as confidence-building measures in a wider process. The measures should not include reconstruction and normalisation, which should remain tied to the UN political process.

The EU’s perception of Turkey is characterised by frustration and ambivalence. Years of inertia in Turkey’s EU accession process were followed by severe democratic backsliding in the country, leaving the EU with little option but to freeze negotiations on the issue. Yet the move has not changed anything in Turkish-EU relations or Turkey’s vision of its role in the world. A newly resurgent Turkey is less interested in EU membership than it once was and is increasingly willing to flex its muscles, deploying its military in Europe’s backyard and territorial waters. Turkey is now a more significant player than Europe in Syria and Libya, and has pursued an aggressive and ambitious agenda in the eastern Mediterranean.

All of this means that, at some point, Europe will have to define its relationship with Turkey in the intensifying great power competition of the twenty-first century. Currently, it is a “frenemy” with which Europe has struck a migration deal – an agreement that exemplifies the transactional nature of their relationship. To achieve strategic sovereignty in the eastern Mediterranean and the MENA region, the EU needs to define the parameters of its relationship with Turkey. This does not have to be an either/or scenario, where Europe has to categorise its neighbour as an ally or a competitor. But Europe should define its goals in the eastern Mediterranean, Syria, and Libya – and should establish a policy on Turkey based on those goals. In the eastern Mediterranean, the EU is right to defend its sovereign interests, but needs to press for an urgent renewal of Greek-Turkish talks. And the bloc should develop a plan to demarcate and divide energy resources in the area, in a fashion that is clearly not focused on the exclusion of Turkey.

In Libya, meanwhile, Europeans may now have a window of opportunity with the emergence of a renewed political process. They need to adopt an approach that not only presses Turkey to engage at the negotiating table but also asks the same of Haftar’s external backers – particularly the UAE, which in many ways bears greater responsibility than Turkey for the last round of escalation. This should reflect a greater European willingness to challenge Gulf states on regional issues where their interests do not align, be it in Libya, Yemen, or elsewhere.

On Iran, the E3 (France, Germany, and the UK) need to continue their diplomatic efforts to create a pathway to a full restoration of the JCPOA under a Biden administration. Here, they need to increase their efforts to provide Iran with economic and humanitarian assistance – and to resist intensified pressure from the Trump administration designed to prevent the US from rejoining the JCPOA. The E3 can press for an interim agreement to freeze Iran’s nuclear activities and should support diplomatic tracks between Iran and the US once Biden takes office, aiming to restore the JCPOA to full mutual compliance and to open up a wider security dialogue on regional issues. The focus on the nuclear issue should not force Europe to ignore Iran’s missile programme or its destabilising activities across the MENA region. But it is important for European actors to understand that political optics in Tehran severely restrict the Iranian authorities’ room for manoeuvre on either front. So long as there is no serious economic quid pro quo involved in the nuclear negotiations, modernisers in Iran have little ammunition or willingness to press the supreme leader to accept significant concessions on other security matters. European diplomats will have a much better chance of addressing these issues if Iran and the West at least partially ease tensions over the nuclear programme and sanctions.

Establishing European leverage in armed conflicts

Regional dynamics in the MENA region revolve around, above all, armed conflict. Accordingly, states that are directly or indirectly engaged in the wars in Syria, Libya, and Yemen are those ablest to shape developments there. Beyond the wars themselves, the region is riven by geopolitical rivalries that create proxy conflicts and heighten tension in multiple theatres. The EU needs to take a new approach to these problems, but not one that involves military intervention – which would only intensify the cycle of escalation. The central element of Europe’s approach should be to deploy its assets in a more focused way that promotes de-escalation and reinforces the role of international law, in line with the interests detailed above.

Europe has tools that would give it more influence in these conflicts if it deployed them better. The first is diplomatic gravity. France’s permanent membership of the UN Security Council (and, potentially, the UK’s), as well as the collective weight of the EU, could give Europe significant influence if it were to develop a combined and independent European political position. This influence is tied to Europe’s capacity to confer a degree of legitimacy on MENA states, some of which value European governments’ endorsements as a source of international credibility. The leverage that Europe gains through this dynamic may be limited, but one should not discount it entirely. One (negative) example of this is France’s and the UK’s de facto endorsement of the Saudi-led military intervention in Yemen. Conversely, the EU’s lukewarm response to the US plan for the MEPP has been a factor in preventing it from gaining international traction.

Another of the EU’s key assets is its perceived neutrality at a time of regional polarisation, one in which the US appears to be increasingly partisan and erratic in its policymaking. Generally, MENA countries are less sensitive about European engagement with the region than that of other actors. This could give the EU the credibility to advance mediation processes and promote security mechanisms in line with its core interests, given the manner in which conflict has exacerbated migration and terrorism challenges. Even among Iranian policymakers – who have taken an increasingly dim view of European power in recent years – there was some hope during the 2019 UN General Assembly that French President Emmanuel Macron would de-escalate the confrontation between Washington and Tehran. If senior European leaders are willing to throw their diplomatic weight behind similar future political initiatives, this could be welcomed by key regional players.

Across the region, the EU should position itself as a mediator that will invest in de-escalation efforts, particularly in the conflict between Iran and an alliance that includes the US, Israel, Saudi Arabia, and the UAE, as well as the emerging Turkey-UAE confrontation. With MENA countries increasingly wary of the US – due to both the uncertainty of Trump’s approach and the sense that the Biden administration will not reinvest in support of their interests – there may be an opportunity for European actors to carve out a more independent and influential role for themselves. The EU should look for opportune targets in this. For example, while Saudi Arabia and the UAE are not ready for a regional dialogue on a new security architecture in the Gulf, they are hotly pursuing an exit from the Yemen conflict. Europeans should step up their involvement in the region by helping Riyadh find a lasting diplomatic solution to the war – one that involves Oman and Kuwait, to build on these countries’ past diplomatic efforts. Europeans could explore how they can use their ties with Tehran to reach a sustainable solution. 

Here, individual European states should play to their strengths. The UK could use its partnership with Saudi Arabia to press for greater Saudi outreach to Iran, as well as further movement towards a sustainable ceasefire and an inclusive political process in Yemen. France could take a similar approach to the UAE, given Macron’s close relationship with Emirati leaders. This should be accompanied by a push – again, one likely led by France, but supported by other member states – to persuade Iran to commit to meaningful de-escalatory measures. In some cases, other member states could support these efforts. For example, Sweden has shown a valuable ability to play a coordinating role in the UN-led Yemen process – as has Germany in North Africa, with its attempts to facilitate a new political process in Libya. For its part, the EU could try to coordinate the regional security proposals now in circulation – including those from Iran and Russia – with the aim of drawing them into a shared diplomatic and security effort that avoids duplication and competition.

Europe also has economic weight to support its engagement with the MENA region. Its humanitarian aid budget for the region is second only to that of the US. The European Investment Bank made loans of more than $2 billion per year to the region between 2014 and 2017. None of the regional powers behind military escalation in the Middle East can offer anything comparable, potentially giving the EU leverage in plans for post-conflict reconstruction.

Nevertheless, the effective use of these assets will require a realistic strategy. The question now confronting Europeans concerns whether they are willing to deploy the tools available to them with a degree of principled pragmatism that helps them achieve their goals.

This can also be seen in Syria. Europeans might be able to play their economic cards to secure a better outcome in this conflict – but only if they do so in a coherent fashion tied to a realistic goal.

Europeans should remain committed to core goals – the need to address underlying drivers of instability emanating from the Assad regime – but should shift away from a narrow focus on a short-term political transition. This means embracing a broader agenda focused on strengthening Syrian societal resilience, even as they use higher-level leverage – such as reconstruction support – to push for a more substantive political process. This will require enhanced humanitarian support on the ground, improved aid packages, and a presence on the ground that can help Syrian society sustain itself. It should be an all-of-Syria stabilisation approach, with the EU looking for openings in the north-east of the country – perhaps including conditional engagement with Turkey – and in the north-west, through attempts to work around Hayat Tahrir al-Sham or even engage with the more moderate elements of the group.

Finally, European military power, although often dismissed, can also play a role in increasing the EU’s strategic sovereignty – if the bloc uses it coherently and wisely. Recent cooperation between eight EU governments to form the European-led mission in the Strait of Hormuz demonstrates how, as part of a coalition of the willing, they can act with greater coherence on security matters and enhance their influence among regional players. They could use the mission as a platform for dialogue on soft security issues of concern on both sides of the Gulf, including trafficking and environmental security. European efforts to increase training cooperation or the interoperability of maritime security hardware would be more controversial, but most MENA countries would welcome them.

Members of the EU may have little desire to increase their military capabilities in the region, but they can do more in the area by working through a series of existing European military missions. Those such as the British and French military deployments in the Gulf, as well as several advisory operations under the EU’s Common Security and Defence Policy, could serve as umbrellas for joint operations to protect common interests, including freedom of navigation in key waterways.

Balancing short-term priorities with long-term support for reform

If it is to strengthen its sovereignty across the MENA region, the EU must also pursue a smarter set of policies designed to balance its short-term goals – such as reducing migration and terrorism – with the long-term interest of promoting lasting stability and societal resilience. There is often a conflict between the EU’s need to work with authoritarian regimes to protect its interests and its ambition to encourage much-needed reform, but there are ways to balance these concerns. Again, the EU’s strengths as a comparatively non-partisan actor and a significant economic donor give it influence as a partner in economic and political reform – if it chooses objectives that are realistic yet calculated to achieve tangible gains.

Governments and civil society groups in the MENA region continue to see the EU as a key potential supporter of domestic governance and economic reform programmes. Europeans have long recognised that the region needs more efficient and representative governance systems if it is to address public discontent and provide stability. Europe has a strong interest in stepping up its engagement with such reform efforts. The EU is, for example, well positioned to be the leading partner of North African countries in pursuing reforms that have a broad impact on state effectiveness and the rule of law, in areas such as education, the climate, and the economy.

Elsewhere, the EU may have untapped potential in linking increased stabilisation and reconstruction assistance in Iraq to necessary reform efforts, steps that would also help fend off an ISIS resurgence and prevent the country from being further caught up in the crossfire from the US-Iran rivalry. Such measures are essential to restoring stability in Iraq, where European support has been underwhelming to date. But this will require Europe to scale up its provision of aid, enhance its internal coordination, and make the country more of a common political priority. In Syria, meanwhile, Europeans should look to channel support into the country that serves their short-term interest in preventing total state collapse, while also protecting the societal groups that are best placed to wage a longer-term battle for reforms against the Assad regime.

Across the region, the EU should focus on developing programmes of engagement that are better tailored to its capabilities and its long-term interests. While it is unfeasible to drive substantive reform from the outside without the support of domestic political and economic elites, the EU can do more to support local efforts. Whether it be in Tunisia, Morocco, Iraq, or Lebanon, the EU should identify and increase its support for the domestic initiatives and actors that seem most likely to achieve meaningful reform. In Tunisia, President Kais Saied and the government of Hichem Mechichi will need to urgently provide greater economic opportunities to the country’s people, which will require a new push to combat corruption and reduce the power of entrenched elites. In Morocco, the high-profile commission charged with devising a new development model may make recommendations on economic inclusion that Europe could endorse and help the government implement.

The covid-19 crisis may also provide a unique opportunity for Europe to increase its economic leverage across the region. The dramatic fallout from the pandemic, which has significantly exacerbated long-standing structural deficiencies, could push many Levantine economies into the abyss. Europe should use economic tools to both shore up these states and press for much-needed governance reforms, such as those Macron is now pushing for in Lebanon.

Europe could make a similar effort in other parts of the MENA region. These include North Africa, where the desire for a European role will be heightened by a decline in support from traditional patrons in the Gulf. Europeans need to carefully calibrate their response so that conditionality does not get in the way of preventing humanitarian and political implosion, seizing the opportunity to take on a more constructive role across the region.

Build greater unity, including through the use of European coalitions

To achieve all this, Europeans will firstly need to establish greater unity in their engagement with the MENA region. On nearly all regional issues, a lack of European consensus has prevented the EU from acquiring the influence it could otherwise have had. This reflects both a tendency towards unilateralism among key actors such as France and the intransigence on key issues of blocs such as the Visegrád group. While France is the most proactive EU member state on MENA issues and often the only one to highlight what Europeans could achieve in the region, the country has often trodden a lonely path, to the detriment of a wider EU approach. The European External Action Service (EEAS), meanwhile, is often marginalised by member states on, or has struggled to become involved in, key regional issues.

The EEAS could do more to forge a consensus between member states rather than merely seeking to reflect one. To fulfil this role, the high representative for foreign and security policy needs to feel more confident in implementing political mandates from the European Council. The EEAS should push for enhanced consultations between member states, aiming to overcome the internal divisions that prevent the EU from playing a more influential role.

The EU could also explore the use of smaller and more agile coalitions of member states that have a particular interest in specific issues, as spearheaded by the efforts of the EEAS and the E3 on the Iran nuclear deal. To facilitate a faster and more nimble policy response, core groups of member states could develop and operationalise EU policy, while being careful to act in line with agreed EU principles and allowing other member states to join the process at a later stage.

Given that nearly all member states see France as the pivotal European actor on MENA issues, Paris will need to show a greater willingness to work with its European partners and moderate its tendency towards unilateralism in Middle Eastern affairs – if the EU is to establish more coherent policy positions. French officials tend to argue that they act unilaterally because EU processes have failed to produce a coherent policy in line with European interests, but France must be careful not to opt for unilateralism simply because the EU does not endorse its preferred position. There is also increased space for Germany to assume a greater leadership role, particularly in view of Brexit. Elsewhere, smaller states should look to build active coalitions on relevant issues, in partnership with the EEAS.

This approach would build on the past successes of small European coalitions. Such coalitions need not undermine European unity. Rather, they can ensure that the EU becomes forward-leaning on its core interests, providing a basis for individual states to take the lead on particular issues and develop common positions.


Europeans face a daunting series of threats to their strategic sovereignty across the MENA region. And things are only likely to worsen, given the likelihood that covid-19 will hit the region’s economies particularly hard. Against the backdrop of a rapidly shifting global environment – one in which the US-led liberal order is weakening due to rising geopolitical competition – it is imperative that Europeans learn to act for themselves.

Despite Europe’s long-running marginalisation in the MENA region, this is an achievable goal. If Europeans are willing to change course and start using their levers of influence – perhaps not military ones, but certainly their political and economic assets – in a coherent fashion and in support of core interests rather than short-term goals, regional players may well begin to take them seriously. As argued by the EU’s foreign policy chief, Josep Borrell, the bloc has “the instruments to play power politics. Our challenge is to put them together at the service of one strategy.” This will require key actors such as the EEAS and France to work together within coalitions that strengthen Europe’s strategic sovereignty in its southern neighbourhood.

About the authors

Julien Barnes-Dacey is the director of the Middle East and North Africa programme at ECFR, where he focuses on European policy on the Middle East. He was previously based in Syria and Egypt, and has worked across the region.

Anthony Dworkin is a senior policy fellow at ECFR. He works on North Africa and also on a range of subjects connected to human rights, democracy, and the international order. He is a visiting lecturer at the Paris School of International Affairs at Sciences Po and was formerly executive director of the Crimes of War Project.

Acknowledgements

This paper is part of a wider ECFR project on strategic sovereignty and benefited greatly from the comments on an earlier draft from the project’s reference group. It draws heavily on contributions of all members of ECFR’s Middle East and North Africa programme, especially Cinzia Bianco, Ellie Geranmayeh, Hugh Lovatt, and Tarek Megerisi. The authors would also like to thank Susi Dennison, Gustav Gressel, Mark Leonard, Janka Oertel, Nicu Popescu, and Jeremy Shapiro for their helpful suggestions on the shaping and content of the paper in a series of internal workshops, and to Chris Raggett for many improvements in editing it.

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Promoting European strategic sovereignty in Asia https://ecfr.eu/publication/promoting-european-strategic-sovereignty-in-asia/ Tue, 01 Dec 2020 08:00:08 +0000 https://ecfr.eu/publication/promoting-european-strategic-sovereignty-in-asia/ Summary
  • The continuing rise of China and the onset of the pandemic have made asserting European strategic sovereignty in Asia ever more complex and difficult. Both developments mean that economics, security, and technology issues in Asia are becoming ever more intertwined.
  • On the one hand this leaves Europe exposed – its dependencies on China have grown, and the security framework that has enabled Europe’s burgeoning economic ties with the wider region is under strain.
  • Yet as other Asian powers, and the United States under the new Biden administration, increasingly assess the emerging strategic competition through a geo-economic prism, Europe’s leverage and its opportunities for partnership have also grown.
  • Europe should upgrade its security activities, and seize the moment to push multilateral institutions up the agenda. But it will be Europe’s connectivity agenda that provides the golden thread running through its foreign policy and its environmental, industrial, trade, development, values, and security objectives in the region.

Introduction

Enhancing Europe’s capacity to act in Asia is critical to the future of the European economy. It is also critical to the long-term survival of a rules-based international order underpinned by the norms and values that Europe stands for.

The coronavirus crisis has reinforced a number of pre-existing trends, risks, dependencies, and opportunities in the region. Alongside north America, Asia is the region with which the European Union and its member states are most deeply economically intertwined – through not just basic trade but also supply chains, investment, financial flows, and mutual reliance on market demand. This will accelerate: Asian economies are among the first to recover from the crisis and, even before it struck, were projected to capture an increasing share of global GDP. Likely to reinforce this trend is the Regional Comprehensive Economic Partnership (RCEP), a recently signed, and relatively thin, free trade agreement fostering economic relations between south-east Asia, Australia, Japan, South Korea, and China

China is at the forefront of Asia’s economic development. At the same time, recent years have shown that domestic policies pursued there – ranging from industrial subsidies to data localisation, health policy to press freedom – have a vital impact on Europe’s own economic and political future. Equally, the Belt and Road Initiative has extended the reach of many of China’s internal practices to a global scale. All this has now pushed the European Union to consider its relationship with Beijing from a more ‘systemic’ perspective – regionally and globally. European strategy needs to treat values, security, diplomacy, and economics in Asia in a far more integrated fashion. Logistical capacity constraints in south-east Asia; the risk of military conflict in the South China Sea and the East China Sea; digital infrastructure choices in India; economic dependence on China among states across the region – all these issues will have an increasing impact on European resilience, technological sovereignty, and economic growth, and on what the EU’s and its member states’ wider vision is of the preferred regional or global order. The advent of the Biden administration now bolsters the opportunities for partnership in the region on issues from multilateral architecture and green growth to connectivity and supply chains.

Like the United States and Japan, Europe is debating further diversifying its economic relationships beyond China as a result of the pandemic and a more hostile trading atmosphere created by the US-China trade war. While some re-shoring and near-shoring to Europe and its periphery is possible, many of the principal alternatives for the production of high- and low-value goods are in other parts of Asia, including Vietnam, Indonesia, Malaysia, India, Taiwan, and South Korea. Several Association of Southeast Asian Nations (ASEAN) countries and India will be among the fastest-growing major economies in the world in the next decade.

Asian states and major outside actors, such as the US, are now also looking carefully at the intertwined nature of economic, security, and technological trends. This has direct implications for Europe: no longer are EU free-trade agreements ‘just’ about trade, development assistance ‘just’ about aid, European companies’ telecommunications gear ‘just’ about business, or the acceptance of European technical standards ‘just’ about regulation. Instead, all these examples provide opportunities for the EU and its member states to enhance their strategic interests and values.

The EU’s and its member states’ greatest strength in Asia is its economic sway. As the geopolitical environment changes, Asian countries are reassessing their economic options through a more strategic prism. This could move the discussion of European leverage in the region away from the narrower scope of presence operations by European navies or targeted arms sales. And, similarly, if Europe’s economic priorities in the region are growing more contingent on an increasingly complex overall political and security picture, it can strengthen its capacity to influence that picture through economic tools, and ensure these capacities are better appreciated by major powers and small regional states alike. This paper will explore how Europe can more effectively deploy them.

The changing relationship with China

The changing relationship with China is at the heart of Europe’s approach towards Asia. The interests of the EU and its member states in the region are deeply affected by the dynamics of this bilateral relationship – including how to deal with China in the economic bloc itself, as well as the wider issues of China’s role in Europe’s neighbourhood and its growing global presence in multilateral organisations. Last year saw a significant revision of the EU’s approach to China, pithily distilled in the March 2019 “strategic outlook” paper released by the European Commission and high representative. Much of the period since then has been devoted to intense debates about putting in place a more robust approach including a set of defensive economic instruments – from the International Procurement Instrument to the EU investment screening mechanism and the White Paper on Foreign Subsidies – while pushing for greater reciprocity in the economic relationship, including through ongoing negotiations on the Comprehensive Agreement on Investment .

Following the onset of the coronavirus pandemic, there is good reason to take another look at whether the balance of opportunities and challenges has shifted further. The crisis has exposed the risk of excessive dependence on China as a ‘single point of failure’, a chokepoint in the global trade system, not only for critical medical equipment and pharmaceuticals but for many other supply chains that could also be disrupted in a range of highly predictable scenarios. But there are also changing assessments in a number of other areas: the nature of Chinese information operations across the EU; the stakes over China’s role in and impact on multilateral institutions; Chinese investments in strategic infrastructure across the EU; and the implications of debt burdens in the developing world on China’s economic competition with Europe.

Firstly, in the political space, Europeans have tended to draw a sharp distinction with Russia when it comes to China’s attitude to the European project, its handling of global crises , its use of disinformation, and the nature of its efforts to advance authoritarianism. China’s behaviour during the coronavirus crisis calls those distinctions into question. From anti-EU social media activities to its willingness to use economic threats and apply political conditionality to its provision of medical supplies, China no longer looks like the cautious, status-quo actor that sees its interests bound up in maintaining the stability of the global economic system that was seen during the financial crisis and subsequent sovereign debt crises.

Insofar as the EU’s policy framework since 2019 already incorporated the concept of China as partner, competitor, and “systemic rival promoting alternative models of governance”, it is likely that the last category will take on more weight in a post-pandemic reality and after the US election. This could have particular implications for the EU and its member states’ handling of various political sensitive issues – so far, its approach to matters ranging from Hong Kong and Xinjiang to Taiwan’s international space have seen only limited policy shifts. But this seems to be changing incrementally: the EU’s pointed move to thank Taiwan for the latter’s donation of face masks, and its condemnation of the new National Security Law in Hong Kong and national-level suspensions of extradition treaties indicate the direction Europe can take if it chooses to. This would be a clear embodiment of a more geopolitical turn on the part of the European Commission. If Beijing is going to take a more unrestrained approach to its ideological agenda, there is significantly less reason for the European side to pull its punches – either rhetorically or through the use of practical instruments such as sanctions for large-scale human rights violations. A less dependent Europe can be more confident in defending its values.

Secondly, thereis the question of Europe’s economic goals in its relationship with China. Many negotiations between the two currently work on the premise that the main objective remains the deeper entanglement of their economies – more open markets in China, deeper mutual access to procurement contracts, and a strengthened albeit fairer and more reciprocal trade and investment relationship. While European negotiators are under no illusions about the likely outcome and have, in parallel, devoted significant energy to building up new enforcement instruments, this attitude may still have a distorting effect on European strategy, given that it is currently the single area where the EU channels almost all of its political leverage. EU member states still want to conduct more business with China, not less.

At the same time, China’s market is not likely to become more open; its focus is on building up indigenous champions and enhancing resilience, which is embodied in what Xi Jinping has termed the “dual circulation” strategy to strengthen China’s self-reliance. Investing in economic partnerships in Asia beyond China could help new markets to emerge, thus increasing the demand for European business in the broader Indo-Pacific region. The EU and its member states do not need to antagonise China or frame the approach as ‘decoupling’. Rather, the EU as a whole should clearly define its own policies and intensify cooperation with third countries in the Indo-Pacific on both a bilateral and a plurilateral basis and sound out cooperation potential with the new US administration. A coordinated version of the effort would help clear the path to reduce supply-side dependency in critical sectors. At the heart of this needs to be a comprehensive and holistic approach to the EU’s connectivity strategy in the region, building networks and setting standards from infrastructure financing to green technology. Provided with the necessary financial heft and political momentum, it provides a solid basis for collaborating with partners in the region while achieving multiple policy goals.

Europe’s dependencies and vulnerabilities

Before outlining the trends that are unfolding in Asia across the political, economic, and security realms, it is important to map out the conditions that are beyond the EU’s direct control and constrain its ability to act in Asia.

The region’s high degree of economic integration and productivity is to a large degree dependent on a relatively stable security situation. The system of US alliance networks and intra-regional security cooperation has served the EU for the last seven decades – a sentiment not necessarily shared by all countries in the region. The EU and its member states have benefited from this low-risk and low-cost arrangement. European states have had little incentive to invest in independent military capabilities, strong security relationships with countries in the region, or other meaningful security contributions towards the freedom of sea lines of communication, which are essential to member states’ trade with the region.

With China’s military build-up and growing assertiveness being a new dominant feature for regional security, EU member states need to assess their vulnerabilities in case of a deterioration of the existing security situation. A significant tilt towards greater instability and confrontation is detrimental to European interests.

The pandemic has further enhanced this trend. Over the course of the coronavirus crisis, there was a significant uptick in assertive behaviour by China in its maritime surroundings, and along the Sino-Indian border, a situation which in June 2020 escalated into a lethal confrontation between the militaries of both sides.

This is especially the case given that Europe has been dependent on the ability of Asian countries to settle existing disputes through non-military means. The underlying military balance of power has helped create the “East Asian Peace”, but it is not the sole reason for the absence of major wars in the region. Peace is also based on successful conflict-management mechanisms among other states in the region, including those for border and territorial disputes among one another and with China. Regional states have often displayed a high degree of pragmatism and demonstrated restraint in times of potential escalation. But China’s increasingly assertive stance represents a growing challenge to these established mechanisms. The way in which China is creating facts on the ground, especially through increased territorial claims in the South China Sea, will be increasingly difficult to stop, much less reverse. This creates challenges, but shifting priorities of the countries in the region, especially India, Australia, and Indonesia, will likely also increase their appetite for coalitions with other middle powers, including EU member states and the United Kingdom.        

Capitalising on its relative economic advantage in the post-pandemic world, China will seize the opportunity to move towards achieving dominance in the region and beyond. Although there are already areas in which this process is well under way, such as in telecommunications and cloud technology, this process could expand further into trade and standards-setting. At home, Beijing’s first massive stimulus measure to jumpstart the domestic economy is a massive investment in a domestic 5G rollout of 600,000 base stations by the end of the year and the spending of $1.4 trillion over the next five years for the digitalisation agenda. This will not only strengthen Chinese vendors of telecommunications kit, it will also enhance China’s overall capacity to capitalise on a first-mover advantage in large-scale commercial 5G availability, which could give it a headstart on broad access to 5G-enabled technologies. Additionally, tech exports to developing countries around the world, which are dealing with the fallout of the health crisis, have become a feature of China’s coronavirus diplomacy, increasing China’s market penetration.

EU member states are also dependent on access to the Asian data market to remain competitive in all artificial intelligence-enabled and emerging technologies. The enormous markets in China, India, and south-east Asia and their value for the new data economy make cooperation an imperative. Asia writ large, and several markets specifically, are already decisive for the overall capacity of European firms to compete globally – and could do so even more if India and ASEAN nations become increasingly central to global economic growth. This will be especially true for the growing data market. Asia has the largest population centres in the world and a rapidly growing middle-class consumer market. Chinese e-commerce is experiencing a coronavirus-induced boom, further solidifying the growing global market share of Chinese online giants such as Alibaba. While this undoubtedly holds true for both China and India, one should not ignore the potential of ASEAN states, which collectively have an economy roughly the size of India’s and similarly significant internal growth drivers. The ability to remain part of the new digital economy will make European businesses even more dependent on demand from Asia and on cooperation with the region on innovation.     

In the European business community, it has long been a commonplace to say that “there is no second China” as a reason for swallowing many of the unfavourable conditions facing European firms in their dealings with the country, including forced technology transfers, forced joint ventures, and market access restrictions. In terms of immediate economic opportunity and the size of China’s domestic market, this is true. But there is significant untapped economic potential for European business in south Asia especially. For this to fully materialise, the EU and its member states are dependent on India to step up its game.

India plays a key role as a security provider in and beyond in south Asia – in the maritime space, and in its political handling of its smaller neighbours. India had already started to step up its regional aid before the pandemic hit: its crisis-response capabilities have been on show during the pandemic, as seen in its provision of medical supplies and military assistance to south Asian countries, as well as the assistance it has given their nationals. But India’s relative absence until recently in regional trade or infrastructure development is one of the reasons why south Asia is so poorly integrated both internally and with the wider Asian region. For the EU to tap into a more integrated Indo-Pacific region, Indian leadership and vision is needed. Since the recent border clashes between China and India, the mood in India is quickly changing, providing an opportunity for the EU to re-energise and advance protracted conversations about enhancing economic cooperation. At the same time, India’s GDP is now facing huge losses due to the impact of covid-19 and it may be inclined to push for greater economic cooperation with the EU as a key economic player in supporting its recovery.

Finally, the EU’s key policy goal of combatting climate change is highly dependent on all Asian economies to deliver on emissions reductions. China has long been regarded as a partner for the EU to address the issue of climate change on a multilateral level. But as China’s economy is under significant pressure, the Chinese government is focusing heavily on raising domestic consumption and creating jobs. One core feature of this approach is its increased reliance on fossil energy, which conflicts with the country’s long-term climate change policies. The contradictory approach became highly visible in recent months: in May, the term “climate change” was missing entirely from premier Li Keqiang’s work report delivered at the 13th National People’s Congress; in September, Xi made headlines at the UN General Assembly by pledging to achieve carbon neutrality for China’s economy by 2060. The EU and its member states will thus have to adjust to the reality of a more complex Chinese approach on emissions reductions. They will also have to contend with a much fiercer competition with Chinese companies for leadership in green technologies, as the Chinese state is massively investing in these areas by creating incentives and advantages for its domestic industry

Major trends

The most important underlying trend in Asia remains the ongoing regional power struggle between the US and China, which has immense global repercussions and has been further accelerated by the covid-19 pandemic. The strengthening of the Chinese economic and military position continues, enhanced by a decline in the US trade and economic role. At the same time, it is also catalysing significant increases in military budgets across the region and is exerting constant pressure on other major regional actors, such as Japan and India, to take on greater strategic responsibilities.

Power shift

If one accepts the emerging power shift as a reality – one that makes China the dominant player in Asia – what would this mean for Europe? Does this change anything about the EU’s capacity to act and make choices according to its interests? In other words, would a Pax Sinica have the same stabilising benefits for the EU and its member states as the Pax Americana did? Stability on Chinese terms would create new dependencies, as China would set norms and standards. A unipolar moment in a Sino-centric Asia would constrain other countries’ capacities to make political, economic, and security decisions. A taste of this has been the Belt and Road Initiative – which, according to a recent study by the European Chamber of Commerce in Beijing, has largely worked to the disadvantage of European companies in crucial third markets in Asia and beyond.

China could increasingly weaponise market access in the region, and access to specific technologies or raw materials, as well as sanctions and export controls. This would force European companies and governments to cater to Beijing’s preferred outcomes and demands. The Hong Kong National Security Law (especially Articles 29 and 38) and Beijing’s new Export Control Law are very clear in their decisiveness in using extraterritorial measures to exert pressure on companies and individuals to meet Beijing’s preferences and interests.

Trade in the region involves varying degrees of dependency on the multilateral framework – largely the World Trade Organization (WTO). The EU and its member states have limited agreements in place with certain countries (notably, China and India) and free trade agreements with others (South Korea, Japan, and Vietnam) that are more robust when it comes to tariffs, standards, and mechanisms that can address disputes effectively beyond the WTO dispute settlement framework

Today, the US has overwhelming military supremacy in Asia in terms of equipment and numbers. However, China is heavily investing in asymmetric capabilities, especially in the space and cyber domains, as well as hypersonic missiles. The erosion of US military supremacy would redraw the power map of Asia. Parallel to this indisputable relative decline in US power, one can also observe an increasing lack of trust across the globe in the US commitment to its allies over the course of the Trump administration. This is certainly more pronounced in Europe and the Middle East, as in Asia there has been no significant drawdown in troop numbers or joint exercises to ensure military readiness. But the Trump administration’s transactional approach to partnerships has placed significant pressure on Asian countries, especially Japan and South Korea.

Even if a US military drawdown in the region is unlikely, failure to address the perceived lack of US leadership and failure to decisively signal resolve has the potential to weaken alliances and erode deterrence capabilities among states in the region which are essentially built on trust. This could have a knock-on effect on proliferation and lead Japan and South Korea to acquire independent nuclear capabilities. Subregional conflicts could flare up, and China could take unilateral action in Taiwan or proceed to even greater demonstrations of power in the South China Sea. Newly elected President Biden has vowed to change course in terms of the importance he places on alliance commitments and has already demonstrated this with calls to the key democratic leaders of the region and a reinforcement of US alliance commitments, especially vis-à-vis Japan .

Transformation of Japan’s and India’s roles

Japan has been a provider of economic public goods for decades, especially in south-east and central Asia – and, increasingly, in south Asia too. Japan has stepped up its investment in the last few years, especially in response to the absence of US leadership. Japan has moved forward with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after the Trump administration walked away from the original version of this agreement, the Trans-Pacific Partnership Agreement, which had been intended to shape the multilateral trading order in the region. Japan has also massively contributed to sustainable infrastructure financing in Asia, by teaming up with the World Bank for the Quality Infrastructure Initiative (QII), and the sustainable development agenda through Official Development Assistance via its International Cooperation Agency. It has also contributed through responsible lending via the Asian Development Bank, in which it remains the top shareholder together with the US (both of which had a 15.6 per cent share in the institution in 2018).

Japan and India are undergoing a massive transformation in their position in Asia. Japan is taking on a greater role in shaping the region’s trade and technology architecture, while simultaneously undergoing a steady shift away from its pacifist constitutional limitations. India, in addition to the long-term expansion of its own geopolitical position, is also increasing its economic and military commitments in its immediate neighbourhood. Both powers are seeking enhanced partnerships with other actors beyond the region to augment their positions. The two states also bookend a broader reconceptualisation of the economic and security geography of the region. Japan, India, Australia, ASEAN states, and the US have all adopted the “Indo-Pacific” terminology as a reflection of the move beyond thinking about east and south Asia as discrete regions. Other regional players, especially those in south-east Asia, and Indonesia in particular, will also become important powers in the longer term. Their economies are growing at a steady rate and they are populous states with huge potential, meaning that south-east Asian countries could eventually play a significant role in tilting the regional balance.

India is engaged in a significant reckoning in its relationship with China, starting with the question of Chinese investments, market penetration, fair competition, and reciprocity. The recent border clashes massively reinforced this trend. India’s decision this summer to ban more than 220 Chinese apps, including TikTok and WeChat, is highly significant in this regard. India was the only significant non-Chinese market in which Chinese market penetration in the app sector was already very successful. With this move India has not just halted this trend, but reversed it, significantly constraining Chinese access to India’s huge market for digital services. And, in Japan, the coronavirus crisis is alerting policymakers to the need to rebalance the relationship with China. With Shinzo Abe, Japan’s longest-serving prime minister, stepping down from his position, Tokyo’s future course will, however, potentially be less straightforward. His successor, Yoshihide Suga, has significantly less experience. He will likely strive for continuity, but he will not have the same political weight for some time to come, and will probably be open to forming new and close partnerships. These trends create space for enhanced dialogue with the EU beyond the already close partnership with Japan – especially in the case of India, which has a heightened interest from a strategic and regulatory perspective in how other actors respond to the challenges posed by Beijing’s state-capitalist economy and market-distorting behaviour.

Domestic vulnerabilities make policy options less predictable

Especially in China, but also in India, massive domestic vulnerabilities – from debt to governance to succession questions to ethnic conflicts – can create significant volatility. This affects the overall risk assessment for the region.

China’s economy is now so powerful that even major domestic turmoil is unlikely to derail the overall trend towards greater growth. Halting the economy for months during the pandemic led to a massive contraction of the economy, but the projections for the rest of this year and 2021 look more promising. Local debt will remain a topic of great concern, as it has the potential to harm the Chinese economy in a substantial way by increasing the debt burden of local governments at the expense of longer-term financial sustainability.

Although countries across Asia, including China, have proven highly capable of managing the coronavirus crisis and controlling the spread of the virus, many of the significant domestic economic and structural challenges have yet to be addressed.  Mapping out the potential domestic scenarios can help European policymakers prepare for plausible developments that could affect their decisions. Such developments could mean taking new decisions around progressing further supply-chain diversification; they could also impact on European businesses’ investment decisions and lead Europeans to be more aware of potential disruptions rather than any linear progression of developments across Asia. The coronavirus crisis has demonstrated just how quickly things can change and the immense impact that domestic governance issues can have not only on global health but on the global economy. European policymakers do not currently take the inherent fragility of domestic governance in Asia into account sufficiently, which can lead to distorted assessments that ignore major, predictable risks.

Predictable contingencies: The Taiwan escalation

Far from being a ‘black swan’ event, the recent pandemic had been predicted and – in many cases – planned for in many places. Given this, the European Commission should lead a review of the European playbook for a number of other highly predictable crises, such as an invasion of Taiwan, a conflict in the South China Sea, a political transition in China itself, or a major natural disaster that might affect EU members states’ interests in Asia.

The most plausible high-risk, low-probability scenario would be an escalation over Taiwan. Especially in light of the People’s Liberation Army’s enhanced activities around the island – even at the height of the health emergency in China – one should not underestimate Beijing’s determination to fulfil its ultimate aim of bringing Taiwan back under its effective control. The fact that Taiwan’s coronavirus response has been publicly lauded around the world and that it has also engaged in active support by providing medical kit to EU member states has only reinforced the ongoing tensions between Beijing and Taipei. Taiwan is a tech hub in the region; its local champion, TSMC, is a key producer of advanced semiconductors and is a global market-leader. European companies are also dependent on continued supply from Taiwan. And, beyond the economic impact, the Taiwan case would present the EU and its member states with uncomfortable choices regarding the defence of democracy, alliances, multilateral structures, and the rule of law. Regional states could rightly assume that – if the defence of a vibrant, economically and politically successful democracy in the region is not worth the EU’s utmost attention – Europe’s commitment to a rules-based order and the defence of its values must be of lower importance than its rhetoric suggests. The consequences of an escalation in the Taiwan Strait for EU member states and the UK would be real and they would be well advised to have agreed on potential responses beforehand.

Recommendations: Enhancing Europe’s capacity to act in and with Asia

Given the dependencies listed above and the trends that are unfolding largely beyond Europe’s direct influence, it is essential to examine which policies would best enhance the EU’s capacity to act in Asia and, therefore, contribute to an increase in European strategic sovereignty.

The international architecture dimension

The pandemic was a pivotal moment for global concerns about China’s hollowing-out and politicisation of multilateral organisations. The question of whether the World Health Organization (WHO) made mistakes in the early stages of the pandemic is less important than many countries’ and populations’  loss of confidence in multilateral institutions – a loss created by the perception that adherence to Chinese political interests has changed their priorities. From food security to international crime, Chinese candidates have assumed leadership positions in critical institutions, and taken advantage of the lack of US engagement to push their agenda on issues ranging from human rights to technical standards. The WHO crisis is both an opportunity and a cause for a stock-taking exercise. Even before the crisis began, European diplomats were on the front line of the battle with China in many of these institutions. With the US under Biden now likely to be back on the multilateral track, this will contribute to the credibility of transatlantic leadership in these areas. The current situation gives the EU and its member states an opportunity to push multilateral institutions up the agendas of both other major powers and small states that may be inclined to see supporting Chinese candidates as an affordable ‘gift’ to Beijing.

The multilateral system is one of continuous evolution. It has never been stagnant, but always able to accommodate new issue areas and new dynamics especially after significant crises – the G20/G7 being a prominent example of this process. China has created the embryo of an alternative global architecture – involving everything from the Shanghai Cooperation Organisation to various Belt and Road Initiative bodies – while pushing its agenda harder through existing ones. The construction or enhancement of a new and strong architecture in various areas is a way to both hedge against the continued decline in the capacity of global institutions and send clear signals that the politicisation of these institutions will ultimately cost them their voice, as key countries will redirect their resources and expertise away from the bodies.

The coronavirus pandemic is a crisis of epic proportions; it would be unrealistic to imagine that there will be no alterations to multilateral dynamics as a response. In parallel with the renewed push for better functioning of existing multilateral institutions, there is thus also the question of whether new structures need to be built or strengthened alongside them. Just as the failures of the Doha round led the EU reluctantly to embrace the plurilateral trade agenda – while still championing the WTO itself – there is a case for the EU to review the entire multilateral landscape, to see where it can reinvigorate existing, and create new, trusted, institutions among like-minded partners. This may involve stronger institutionalisation around coalitions such as the “Alliance for Multilateralism” and the creation of new bodies around the concept of the Indo-Pacific. In this context, Germany’s new Indo-Pacific guidelines set the stage for stronger Franco-German cooperation and a wider embrace not only of the term as a regional definition, but also the agenda behind it. The new strategy document, launched during the German EU Council presidency, marks the start of a pan-European debate about the EU’s role in the Indo-Pacific, across a comprehensive set of challenges from security and free trade, to digitalisation and climate change.

The security dimension

Intuitively, security policy is the area in which the EU is least likely to have a meaningful impact on the power shift in Asia. But member states could, at least, improve their leverage in this realm and tilt the power balance to a degree. Almost one-quarter of global arms sales issue from Europe’s top five arms-exporting countries. For example, during 2014-2018 Germany exported more defence equipment to Asia than to any other region in the world, including Europe.

The Asia-Pacific region is now the world’s largest market for arms. For EU member states and the UK, sales to Asia are essential from a commercial perspective. But, as observers have argued for years, EU member states in particular make little to no strategic use of these partnerships. EU member states need to rework their arms export strategies and tie them closely to diplomatic and security goals. A more unified arms-export policy could greatly enhance Europe’s limited potential to influence security dynamics in the region. EU member states can build a denser web of European relationships through defence-industrial partnerships but by also defining a common arms export control policy – especially for dual-use equipment, which has become inherently entangled in the broader debates about technological sovereignty and the US-China strategic and economic confrontation. The revised dual-use regulation is an important step in this direction. It was agreed under the German Council presidency and, among other things, addresses the challenges of surveillance technology and its role in human rights violations.

Freedom of Navigation Operations (FONOPS) are an often-cited tool of how European countries could demonstrate their willingness to defend the rule of international law in the region. The potential of FONOPS is limited, especially if not conducted on a regular basis and on a relatively large scale. The failure to provide continued presence within the 12-mile zone around territories claimed by China in the South China Sea that are not in accordance with international legal provisions could create the impression that the EU and the UK are only marginally interested in the gradual increase of Chinese control there. European navies, especially from France and the UK, can and should invest in maritime operations that emphasise respect for international law and safety of sea lines of communication – but they will only have a meaningful effect if they are substantial, continuous, and if they are further Europeanised in their set-up, carrying sailors from various EU member states on French or potentially even German vessels. These operations would have limited deterrence potential in relation to Chinese claims in disputed waters, but the EU and its member states jointly with the UK could use FONOPS to signal resolve to regional partners – especially those within the Indo-Pacific framework. Initial new commitments by Germany to a security role in the region signals an important shift.

EU member states and the EU itself could also invest development assistance in targeted capacity building in areas such as coastguards and non-traditional security partnerships – especially those for cooperation on cyber security, which is of great concern to most Asian states. Closer coordination and cooperation with Japan in this area would not only support the EU’s regional efforts but also improve security relations with one of its foremost economic partners in the region.

China’s role in Asian cyber space should be a key element of a strategic dialogue with Indo-Pacific partners – especially Japan, South Korea, India, and Australia, but also ASEAN countries. Cyber security dialogues should pivot towards conversations with the democracies of the region, as both sides could benefit from a concerted cyber security exchange, potentially at ministerial level, including intensified conversations and knowledge-sharing about countering the growing cyber threat emanating from both China and North Korea in the region. Europeans should invest heavily in cyber defence capabilities to demonstrate to Washington their ability to contribute to global security. This will be an important signal to the incoming Biden administration.

The technology dimension

Europe is often quickly discounted as being far behind in the race for global technological leadership. But that is a premature conclusion. One persistent myth is that EU member states do not have what it takes to prevail in the tech world of the twenty-first century and, therefore, must only choose which masters they will serve – those in Silicon Valley or those in Shenzhen.

No EU member state currently fields a competitor to the big tech companies in the US such as Amazon, Facebook, and Google, or their Chinese equivalents such as Alibaba, Tencent, and Baidu. But that does not mean that EU member states lack what it takes to be a force to reckon with in the tech space. Europe is home to 6.1 million software developers (compared to 4.3 million in the US) and multiple tech hubs – from the classic top three of London, Berlin, and Paris to the less high-profile but vibrant centres in Stockholm, Amsterdam, Barcelona, Dublin, Helsinki, and Madrid. EU countries have a huge advantage in the freedom of movement of people and capital, common regulation, and an increasingly engaging climate for venture capital investors. The European Commission has set ambitious targets for making Europe not only a great market but also a leading innovator in emerging technologies, not least 5G.

But the EU and its member states will need to work closely with their partners in Asia to continue to play a role in the tech world. An important first step in this was the agreement on free data flows the EU concluded with Japan in 2019. Under the deal, Japan and the EU created the world’s largest area of safe data flows. Cyber partnerships and cyber diplomacy with Asian democracies are key to building a high-trust, high-standards, more open framework among like-minded partners. India is especially relevant in the technology space, given the EU’s and its member states’ interest in facilitating access to information on topics such as internet governance, ICT research and innovation, and network and information security. The EU in a ‘whole of organisation approach’ should pay particular attention to strengthening cooperation on ICT standardisation.

There is significant potential for coordinated industrial policy and tech regulation between the EU and Asian tech powerhouses, especially Japan, South Korea, and Taiwan. The EU and these countries could find new institutionalised forms of exchange between those under pressure from China’s state capitalism. In democratic countries in Asia, key allies share Europe’s preference for an open and inclusive technology space. Europe’s interests will not always coincide with those of its Asian partners such as Japan, but they will often be complementary. As they have no interest in the weaponisation of access to technologies of the future, the EU and its member states should more aggressively seek partnerships with Asian countries that share this goal. Cost-benefit analyses across the region will vary; choices will differ. A case in point is Japan’s embrace of US cloud technology while EU member states debate indigenous options on a national level. But, ultimately, coordination could hedge against some of the power games in play. European countries should engage with Taiwan as one of the key tech players in the region, through high-level diplomatic exchanges on digital governance and lessons learned in, for example, effective mitigation measures against disinformation through social media.

The trade dimension

The EU-Japan Economic Partnership Agreement (EPA), which entered into force in early 2019, is the EU’s most recent diplomatic success story in Asia. The agreement’s economic usefulness is yet to be thoroughly tested – particularly against the background of the global economic downturn induced by the pandemic – but bilateral trade between the parties grew by more than 6 per cent in its first year. The EPA aspires to be the antidote to unilateral US action and to enshrine both sides’ commitment to their common values, enhanced labour rights, social responsibilities, and the goals of the Paris climate accord.

Facing global trade uncertainty, the EU and Japan have enhanced their leverage through cooperation. The EPA underlines Brussels’ ability to act and serves as an example for ambitious trade agreements that could help maintain and enhance a rules-based multilateral trading order. Modelled on the EU-Japan EPA, deeper trade and investment agreements across Asia – especially with India and ASEAN states – could reduce dependency on China, enhance the EU’s capacity to set standards, and complement more ambitious agreements as the WTO framework weakens. There is potential for an EU-CPTPP agreement, which would cover nations that account for 35 per cent of world GDP. This is not a far-fetched idea, as the EU has negotiated – or is in the process of negotiating – free trade agreements with every CPTPP member nation except Brunei. Europe’s agreements go far beyond the highly limited regulatory framework that RCEP sets and can add benefit for regional players, especially in the realm of data and technology governance

But, even in the absence of formal trade agreements – which, especially in the case of India, likely remain a more long-term project – an EU-led process could make a deeper integration offer to Asian democracies and enhance cooperation with them in the EU technology, research, data, and even industrial policy framework.

The EU needs to reconsider its current approach of focusing on comprehensive agreements. Initial sectoral agreements, which cover those areas currently unregulated by WTO rules, could help hedge against economic dependency and be of mutual benefit, while not precluding more comprehensive agreements in the future – especially in regard to India. Deals on the free flow of data could be a useful start in this, especially given the tech rethink that is under way due to the changing US-China dynamics. The geopolitical changes brought about by the coronavirus crisis will alter Europe’s cost-benefit analysis on various forms of engagement with Asian countries other than China. These countries generally welcome European investment, which will likely improve conditions on the ground. For example, India has announced that it will designate land for business development, which is one of the factors that hampered investment in the past.

The EU is already moving to deal with the potential implications of the economic collapse brought about by the pandemic – in terms of corporate valuations and vulnerability to Chinese acquisitions of strategic infrastructure and sensitive technologies. But the crisis will also magnify the existing competitive challenges that the Belt and Road Initiative poses in Asia and across much of the rest of the world. While China has agreed to a degree of freeze on debt payments for developing countries, an even more ambitious package would be desirable. Beijing will almost certainly seek to use renegotiations over debt financing to foster its economic, political, and security goals.

The EU’s connectivity strategy had been partially abandoned by the new European Commission, as the issue receives less strategic focus than priorities such as the European Green Deal, the new industrial strategy, and the digital agenda. Success in each of these areas will be considerably harder to achieve if countries adhere to Belt and Road Initiative energy practices, buy Chinese digital infrastructure, and make decisions that favour Chinese companies. In light of the pandemic, there is a strong case for Europe to refocus on the connectivity agenda as the golden thread between its own foreign policy and environmental, industrial, trade, development, values, and security objectives in several regions – all the more so when this is coupled with the “diversification” agenda.

About the author

Janka Oertel is the director of the Asia programme at the European Council on Foreign Relations. She previously worked as a senior fellow in the Asia programme at the German Marshall Fund of the United States’ Berlin office, where she focused on transatlantic China policy, including on emerging technologies, Chinese foreign policy, and security in east Asia. She holds a PhD from the University of Jena. Her dissertation focused on Chinese policies within the United Nations. She was a visiting fellow at the German Institute for International and Security Affairs (SWP Berlin) and worked at United Nations Headquarters, New York, as a Carlo Schmid Fellow. She has published widely on topics related to EU-China relations, US-China relations, security in the Asia-Pacific region, Chinese foreign policy, and 5G.

Andrew Small is a senior transatlantic fellow with the Asia Program at the German Marshall Fund of the United States (GMF). Additionally, he is an associate senior policy fellow at the European Council on Foreign Relations. He was based in GMF’s Brussels office for five years, where he established the Asia programme and the Stockholm China Forum, GMF’s biannual China policy conference. He previously worked as the director of the Foreign Policy Centre’s Beijing office; as a visiting fellow at the Chinese Academy of Social Sciences; and as an ESU scholar in the office of Senator Edward M. Kennedy. He is the author of The China-Pakistan Axis: Asia’s New Geopolitics.

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A fundamental fight: The frugal four and the rule of law https://ecfr.eu/article/a-fundamental-fight-the-frugal-four-and-the-rule-of-law/ Mon, 30 Nov 2020 14:38:07 +0000 https://ecfr.eu/article/a-fundamental-fight-the-frugal-four-and-the-rule-of-law/ On the day Hungary and Poland vetoed the European Union’s multiannual budget and coronavirus recovery fund, Dutch Prime Minister Mark Rutte had a session in parliament in The Hague. Rutte refused to water down the new rule of law conditions that prompted the veto. The compromise deal was already the “lower limit”, he said.

When a far-right Dutch MP said Rutte didn’t have half the guts of Hungarian Prime Minister Viktor Orbán, Rutte replied: “Should I limit gay rights, limit freedom of the press in the Netherlands, and limit the rights of smaller parties to participate in elections? I am glad I am not like him. Terrible.”

Rutte is not the only northern European leader losing patience with Poland and Hungary. Sources report that Danish Prime Minister Mette Frederiksen clashed with Orbán during the October European Council meeting, at which he opposed the words “gender equality” in a text because of its ‘ideological’ implications. Austria’s Europe minister, too, has taken issue with the two countries’ veto.

The Europe of rules, principles, and procedures is clashing head-on with the political Europe of strongmen who use raw power and codes of honour.

It is good that the EU member states widely known as the ‘frugal four’ are committed to defending the rule of law in Europe. It shouldn’t be forgotten, however, that they also bear some responsibility for the fact that the EU has done little to halt the continuous deterioration of the rule of law in Hungary and Poland in recent years.

For many reasons, member states have long turned a blind eye to the situation. They are always reluctant to sanction one another on any given issue – the Stability and Growth Pact comes to mind. Moreover, the erosion of independent institutions in Poland and Hungary was a slow process. At every stage, party-political sensitivity and tactical disagreements about the timing and the ‘right’ way to address the problem in Warsaw and Budapest played a role. Finally, member states have had to stamp out some big fires in recent years – the euro crisis, the refugee crisis, and Brexit. Many thought this was not the time to start internal battles over European values.

But now the chickens have come home to roost. Ten years of accumulated irritation are erupting. The Europe of rules, principles, and procedures is clashing head-on with the political Europe of strongmen who use raw power and codes of honour. It is a dirty but fundamental fight.

In the Polish parliament last week, Prime Minister Mateusz Morawiecki compared the EU to the old communist regime. The “European oligarchy”, he said, violated the rule of law itself by attacking his country. He said that Poland, a major recipient of EU funding, would be “better off” without the bloc’s multiannual budget. This was the most anti-European speech by a Polish Prime Minister ever.

On the other side of the debate, there are European leaders who have become outspoken about the rule of law – such as Rutte. Until recently, the Netherlands, Denmark, Sweden, Austria, and Finland mainly took issue with southern countries, and mostly about money. Now, they have a new common theme: the rule of law.

Polls published by ECFR on Wednesday show that the main problem citizens in those five countries have with the new EU budget and the coronavirus fund is not that the bloc is spending too much money. No, their greatest concerns are waste and corruption. Twenty per cent of Austrians worry about the amount of money spent on the fund, and 48 percent about waste and corruption. In the Netherlands, these figures are 24 per cent and 38 per cent respectively. It is interesting to note that respondents in Germany, France, and even Poland itself have the same priorities. No one should be surprised if, in the coming months, European debates increasingly focus on the rule of law. With a Dutch parliamentary election scheduled for March 2021, Rutte plays this well.

Yet it wasn’t the frugals who linked the disbursement of European funds to rule of law requirements. Credit for that goes to the European Parliament. In July, the frugal countries managed to limit European spending, but failed to condition it on the rule of law. In autumn, member states reworked the July deal into a European draft bill. When this draft arrived in the European Parliament, it contained the usual corruption and fraud clauses – but nothing about the rule of law. MEPs then inserted provisions on an independent judiciary, for example. Intense negotiations followed. Member states eventually watered down this version. Finally, they reached a compromise with the European Parliament. Poland and Hungary objected to the rule of law mechanism, but were outvoted. They then decided to veto the entire budget and the coronavirus recovery fund, which require unanimity.

There is a second reason why the strong stance on the rule of law in some northern European capitals sounds a bit hollow. Member states could have brought cases against Poland and Hungary before the European Court of Justice. They could also have provided stronger backing for the cases eventually filed by the European Parliament and the European Commission. They did not. As a result, there is now a risk that those cases will peter out. Furthermore, member states could have used EU funds to give the new European Public Prosecutor more teeth in the fight against corruption. Instead, they gave her a small budget and very little power: she is totally dependent on the goodwill of national courts. Sweden and Denmark are not even engaging with the EU prosecutor. Finally, plans to strengthen Europol’s powers in the fight against corruption have also met with opposition from many member states.

Some have observed that the embrace of the ‘frugal’ banner is becoming a trap for countries such as Denmark, Sweden, and the Netherlands. They think it is good if these countries also become positively engaged in Europe by taking a strong stand on rule of law issues.

But there are risks, too. It could even reignite disputes between north and south. Southern European countries are becoming nervous about the standoff over the rule of law: so long as it lasts, there will be no coronavirus recovery fund – of which they will be the largest recipients. They have not forgotten that, initially, the frugal countries were against this fund. And they felt hurt by some frank remarks from the Dutch minister of finance. In this context, some in Italy and Spain now suspect that, by refusing a compromise with Hungary and Poland on the rule of law, northern European countries are killing off the fund, too.

No one knows who will blink first. The issue is now completely politicised, and the linkage to other problems makes this nut all the harder to crack.

In a long letter to European Council President Charles Michel, Orbán wrote that he would only revoke his veto if every link between European subsidies and the rule of law disappeared. He signed off quoting Luther: “Hier stehe ich. Ich kann nicht anders.”

Caroline de Gruyter is a Council Member of ECFR, and a European Affairs columnist and correspondent of the Dutch newspaper NRC Handelsblad. This article was adapted from a recent column in NRC.

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A call for Europe to bolster transatlantic diplomacy on Iran https://ecfr.eu/article/a-call-for-europe-to-bolster-transatlantic-diplomacy-on-iran/ Mon, 30 Nov 2020 08:55:05 +0000 https://ecfr.eu/article/a-call-for-europe-to-bolster-transatlantic-diplomacy-on-iran/ The election of Joe Biden presents an opening to strengthen transatlantic relations on critical security issues, including on Iran. Having worked so hard to preserve the Iran nuclear deal over the last four years, European governments and the EU must now unequivocally call on the incoming Biden administration and Iran to swiftly come back into full compliance with the deal. European actors should pro-actively, and in a coordinated fashion lay out a viable roadmap to support this effort. 

The Trump administration’s maximum pressure campaign against Iran has failed, with the unprecedented sanctions negatively impacting ordinary Iranians. In response to reimposed US sanction since 2018, Iran has increased its nuclear activities and continues to step away from its commitments under the Joint Comprehensive Plan of Action (JCPOA). Tehran has also flexed its military muscle across the Middle East. The Trump administration’s remaining term in office is likely to be turbulent with new measures being invoked specifically to complicate Biden’s return to the JCPOA.  Recent reports also suggest there is a risk of further military tensions between the United Stated and Iran. An incoming Biden administration could come into office facing renewed escalation.

It is critical for the stability of the Middle East that the United States and Iran urgently cool tensions and restore diplomatic engagement on a range of issues. This should start with rehabilitating the nuclear deal, which is a critical global non-proliferation agreement, and move towards the wider set of issues fuelling regional instability that is so detrimental to European interests.

With European support, a Biden administration can take advantage of the positive signalling from the Rouhani government – in its final eight months left in office – welcoming Biden’s stated aim of returning to the JCPOA and readiness to ‘walk the path of diplomacy’ with Iran.

Towards this end, European governments and the EU should now prioritise the following steps:

  1. In the coming weeks, France, Germany and the United Kingdom, (E3) should coordinate a joint public statement calling on the incoming Biden administration, once inaugurated, to formally announce its intent to re-join the JCPOA, urging the United States and Iran to agree on steps for mutual re-compliance and then to build on the agreement. European governments and the EU should simultaneously intensify Congressional outreach in Washington  in support for Biden’s return to the agreement. 
  2. The E3 countries should press for a Joint Commission meeting of the JCPOA parties to be held prior to 20 January. The European Union’s High Representative Josep Borrell, should, as chair of the Joint Commission, encourage the current members of the agreement to call for the return of the United States to the JCPOA and for the US to reaffirm support for UN Security Council resolution 2231. The Joint Commission should also call on the United States to reissue waivers for civil nuclear cooperation (revoked under Trump) as soon as possible to facilitate Iran’s roll-back of nuclear activities and the modernisation of Iran’s Arak heavy water reactor.
  3. Between now and 20 January, the E3 and the EU should convene a political director level meeting with Iran, to scope out a clear pathway for Iran to reverse its nuclear activities. Europeans should stress to Iran that such steps will be a necessary component for the United States to fully return to the JCPOA under a Biden administration. This process should involve an extensive discussion with Iran on technical steps to roll back its nuclear programme, the realistic contours of sanctions relief under a Biden administration, and European measures to support Iran’s economy. The E3 and the EU should also use existing diplomatic channels with Iran to caution against escalation with the United States, particularly in Iraq where there is a high risk of tensions. Any escalation in advance of Biden’s inauguration would greatly complicate diplomatic efforts.
  4. In parallel to the nuclear track, European countries and the EU should articulate a diplomatic roadmap for transatlantic cooperation on regional de-escalation to the incoming Biden administration and wider American policy community. Ahead of Biden’s inauguration, European governments should also intensify communication with other regional actors, notably Israel, Saudi Arabia and the United Arab Emirates, aimed at both preventing dangerous escalation and laying the groundwork for a wider subsequent process in line with the efforts of the United Nation Secretary-General to advance regional security. This will be needed to reassure and offset opposition to renewed engagement with Iran from some of Europe’s regional partners. As part of this approach, Europeans should now start to intensify efforts in support of inclusive stabilisation efforts in Iraq and Yemen.

European countries must move fast to contain Iran’s expanding nuclear programme, and to urge the incoming Biden administration to take advantage of the political momentum following his inauguration to actively engage Iran and reverse the current dangerous escalatory trajectory.

Signatories

  • Carl Bildt, former Swedish prime minister and foreign minister, and chair of the ECFR board
  • Alistair Burt, former UK minister of state for the Middle East at the Foreign and Commonwealth Office and former MP
  • Wolfgang Ischinger, chairman of the Munich Security Conference, former German ambassador to the US, and former deputy foreign minister
  • Jean-David Levitte, former ambassador of France to the United States, the United Nations, and diplomatic adviser to presidents Jacques Chirac and Nicolas Sarkozy
  • Andrzej Olechowski, former Polish minister of foreign affairs
  • Javier Solana, former EU high representative for the common foreign and security policy, former secretary-general of NATO, member of the ECFR board, and a distinguished fellow at the Brookings Institution
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Responding to the China challenge: The state of play on investment screening in Europe https://ecfr.eu/article/responding-to-the-china-challenge-the-state-of-play-on-investment-screening-in-europe/ Fri, 27 Nov 2020 10:42:32 +0000 https://ecfr.eu/article/responding-to-the-china-challenge-the-state-of-play-on-investment-screening-in-europe/ The European Union is one of the most attractive destinations for foreign direct investment (FDI). As a driver of economic growth and job creation, investment from outside the EU brings great benefit to the European economy. But, under certain conditions, foreign investment can also become a threat to European sovereignty and economic prosperity.

Following growing concerns about the acquisition of strategically important companies across Europe especially by Chinese companies and investors, the EU and member states have been looking hard at how to protect critical infrastructure, industrial innovation, and defence and dual-use technology. While individual member states have been deploying investment screening mechanisms through national legislation for many years, a coordinated pan-European approach to the issue was long lacking. To fill this gap, the EU introduced legislation in March 2019 to establish a framework for screening foreign direct investment at the EU level. The new regulation came into force last month. At the same time, member states are also implementing national legislation in accordance with the framework.

To protect EU strategic interests related to foreign investment, Brussels aims to enhance cooperation and coordination between member states and the European Commission as well as among member states. Member states will now have to notify the commission of cases going through their national screening procedures. They will also have to provide information about the investment upon request. The new framework allows the European Commission and other member states to then issue opinions on proposed investments or takeovers, and raise their concerns, which must then be considered by the member state in which the investment is taking place. While these opinions are not legally binding, the European Commission openly raising concerns in this way could have a strong signalling effect. For a member state to then deliberately go against the EU’s recommendation could have negative consequences for future investment from within the EU.

The new EU regulation is a boost for greater European sovereignty

Although the new regulation is not a centralised EU investment screening tool, it is, nevertheless, a milestone in forging a more comprehensive EU approach towards detecting targeted investments in sensitive sectors and responding to them in a coherent manner. Member states that did not have national investment screening mechanisms in place before are now required by the new legislation to set up a point of contact for FDI in their country. They will have to submit annual reports summarising inward FDI activity. Politically fortified by the effects of the covid-19 crisis, the new EU regulation is, therefore, a boost for greater European sovereignty and one of the few concrete and credible deliverables on the China agenda that the EU has come up with so far.

In order to provide an overview of where individual member states stand, the following chart maps the different national approaches to FDI screening. Currently, 15 member states have national screening mechanisms in place, while five are currently in the process of adopting new mechanisms. Almost all member states are in the process of reviewing or updating their FDI screening mechanisms. ECFR will continue to monitor the developments in each member state and incorporate any changes accordingly.  

Rafael Loss contributed to the research by creating the toolbox and its visualisation.

The data was updated last on 12 November 2020.

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