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May of Investments, Entrepreneurship and Floods in SE Europe

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It’s barely two decades since the end of a devastating War on Ex-Yugoslavia teritory, devastating and lasting for 3,5 years in Bosnia and Herzegovina. We have seen the most brutal scenes of crime, masacred civilians (children and women), hundreds of thousands refugees, have been filling  top headlines of famous world’s media, day after day.

May 2014, is no exception these days. Catastrofic Floods, destruction and people escaping from their homes, has reminded us of the 92-95 War in Bosnia, (i.e. Agression by Ex-YU Army (JNA), supported by Serbian and Croatian political and military establishments) at that time, but also it’s a reminder of how nature can be upredictable. It is officially said that over 2 million people have been attacked these days by devastating Floods in the Balkans region.

Sadly, more than 45 people lost their lives in enormous Floods, combined in two Balkan countries: Serbia and Bosnia and Herzegovina which have been the mostly efected. Experts predict that those numbers will rise as flood waters recede. It is truly epic flooding, keeping records in the last 120 years, meteorologists say.

Apart from some obvious devastating results, like vanishing homes/humanitarian catastrophie, destruction, desease and epidemic danger for the people in flooding area, those floods bring another very dangerous situation: replacing mines. As stated by Bosnian President Bakir Izetbegovic, speaking yesterday for CNN’s Christiane Amanpour: “We cannot say exactly what happened with the mine fields“. He warned that the mines were likely displaced in the flooding along with signs warning of mines in the area. “The system of the mine fields (was) under control, and had warnings marks are now actually removed,” Izetbegovic said.

 

5th Sarajevo Business Forum, 14-15 May

Just couple of days earlier Regional Investment Conference – 5th Sarajevo Business Forum was preparing to take place in Sarajevo, capital of Bosnia and Herzegovina. It was supposed to include presentations of business and investment opportunities in Energy, Infrastructure, Agriculture and Tourism from seven countries of Southeast Europe: Bosnia and Herzegovina, Albania, Croatia, Macedonia, Montenegro, Serbia and Slovenia.Yet, couple of days earlier, another tragic event occured. This time in Turkey, one of the friendly countries of the SBF Forum. It was a horrible mining explosion in the city of Soma, Manisa (western Turkey), where more than 300 workers lost their lives. Minister of Foreign Affairs of Turkey, Mr. Ahmet Davutoglu participated in the opening ceremony of the 5th SBF Forum on May 14, 2014., and before the opening speeches of the Forum, participants paid homeage to workers who lost their lives in the mining accident in Soma. In his opening speech, Foreign Minister Davutoglu thanked for supporting messages conveyed in Sarajevo over the mining accident in Soma.

 

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Participant list of this year’s SBF, included some eminent names from political and business life, like: President of Montenegro Filip Vujanovic, crown prince of the Malaysian state of Perak Raja Dr. Nazrin Shah, former President of Slovenia Danilo Turk, Turkish Foreign Minister Ahmet Davutoglu, Minister of Foreign Affairs of Qatar al Khalid Bin Mohammed Al Attiyah, and Ahman Al Sayed, Minister of State and General Director of „Qatar Investment Authority“ (QAI), one of the largest investment funds in the world. SBF for the 5th year in a row, by BBI Bank in collaboration with the Islamic Development Bank (IDB), this year aimed to strengthen economic cooperation and attract international investments in South Easterm Europe.

Despite of its high reputation, what can the event like Sarajevo Business Forum, bring as a benefit to the SE Europe Region and community? Undoubtly, it already became widely recognizable, regional Investment Conference, attracting to site some of the wealthiest people from the world. One if them is Sheikh Saleh Kamel, who is highly ranked on the Forbes list of the richest people in the world and chairman of the financial and business groups „Al Baraka“. He is also the President of the Islamic Chamber of Commerce and Industry. In addition to inviting in investment projects in Bosnia and Herzegovina, Sheikh Kamel is at the board of initiative for BBI Fund with an annual amount of 600 thousand dollars in the last three years, with scholarships for 1,500 young people from Bosnia and Herzegovina.

 

Potential for investing counted to 15 billion EUR

The second day of SBF started with a panel of regional potentials in energy sector. Speaking at this panel discussion Erdal Trhulj, Minister of Energy, Mining and Industry of Federation of Bosnia and Herzegovina,  said that so far in Federation had been discussed mainly about electricity potential, and now we are in position to talk about oil and gas explotation. Regional Director of NIS Gaspromneft, Branko Radujko noted that the region in next 7 to 10 years could attract about 15 billion euros in energy projects.

”We should facilitate procedures and work together, because as a small countries we have to work jointly in order to attract investment”, said Radujko.

During the panel disscusion about infrastructure, it was pointed out that a good and quality roads infrastructure is among the basic precondititon/requirementsfor the successful development of any economy. As a well known fact, Bosnia and Herzegovina is at he the end of the list by modern roads facilities, with only 68 kilometers of the highway, while the European average is 860 kilometers.
Similar situation is in Montenegro, Albania, Kosovo and Macedonia.

Turkey as an example

As it comes to the agriculture sector, Bosnia and the whole region have strategic predisposition for development of this sector, such as good climate (it was until this May and Floods), water, furtile soil, cheap and skilled labour force and low tax rates.”We are aware of the agricultural potentials of the Balkans region, and there is no need for their presentation, but for branding and markting”, said Saif al-Sowaidi, Vice president of the Qatar company „Al Meera Consumer Good“. He pointed out Turkey as an example which Bosnia and Herzegovina should follow, as it has first being organized fairs, forums, and investing in branding and marketing and in that way conquer the global market.

By closing the two-day conference Minister Trhulj said that Bosnia becomes, as some used to say, El Dorado for investors and added that Government makes every effort to ease investment procedures in Bosnia and Herzegovina. Potential investors were presented a large number of projects. But how many of them will be likely to find investors, remains to be seen in the future.

 

Sarajevo Pitch Day 17-18 May (IT Startup Conference)

As an entrepreneur who have failed with more than 30 projects up to now (please don’t blame me, life is sometimes tough, isn’t it?), and sent over 15,000 emails about several projects and ideas in the last 12 years – I know  exactly how important is to get a chance to present yourself in front of some some big ‘faces’ – investors and innovation experts, people with experience (and good intentions). If you intend to succeed in any field, in this case we talk about IT, it is extremely important to network with not only technology guys, but also journalists, political guys, marketers, innovation experts, etc.  They all know overall market better than you, and indeed will point you to some trick & tips that you have minimal chances to learn, any other way in your career. So, listen to what they have to say, carefully, at least I use to.

Startbootcamp and HUB387

Sarajevo’s first technological park HUB387 hosted the members of  a “regional Pitch day” on 17-18 May. In this way, Sarajevo was the first city in the region, as a host to the biggest European startup accelerator Startupbootcamp from Berlin.
On this occasion some of the well known Europe’s IT experts and innovation specialists arrived to Sarajevo, like Andy Shannon, Head of Global operations at Startup Bootcamp Berlin, which is making accelerator programs, and in addition to Berlin, his team has also developed its business in Amsterdam, Copenhagen, Eindhoven, London and Tel Aviv. Among others, we also hosted Mike Butcher, editor and founder at TechCrunch.com, Tobias Stone, enterprise and innovation fellow from University of Huddersfield who is running work in London and Berlin. At the host side, Edin Saracevic, founder of HUB387 did amazing work, to provide that eminent guests feel pleasant and comfortable in our city.

 

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The call for applications was open for the whole region of the former Yugoslavia, and HUB387 invited all individuals and teams which had, or wanted to develop a startup idea, not to miss this unique opportunity. Sarajevo “Pitch Day” was entitled as „the entrance“ in the world of global business for the most successful regional startup entrepreneurs from Slovenia, Croatia, Serbia, Montenegro, Macedonia, Kosovo and Bosnia and Herzegovina.

It was told that Startupbootcamp will offer the three month program in their Berlin accelerator to the selected startups. In this way, teams would get the opportunity to develop their ideas in cooperation with respected mentors and all with the secured resources for the accelerated development. After 100 days of intensive work, the startups should have be able to present their products to the wider public, and to the chosen group of investors. According to the statistics done so far, more than 70% of startups which go through the Startupbootcamp program were successful in getting the investment for further development, and the way to become more successful companies in future.
I personally attended Sarajevo Pitch Day last Saturday. It was really amazing to see the crowd and listen to the guests (mentors mentioned earlier in article) – they all came with huge expertize and experience to share, from large and successfull teams/companies they’ve been operating with across Europe.

 

Be brave, don’t lose your focus

The one thing I noticed at the online registration form, a day earlier, was that plan scheduled for at least 10 Startups to Pitch their ideas to the jury, that day. Unfortunately, only 8 teams presented themselves on the stage. It was a pity, and a sign that we need to rise awareness among young teams and talented people to get courage and get to stage. Undoubtly, there is a strong concentration of IT talent in the Balkans countries, all we need now is a bit mentorship and education (and of course, investment, which comes naturally in later phase). It is not easy to present idea on stage, in front of Investors, so I would advice the teams to choose from their team a guy who can do this sensitive ‘work’ in the best possible way. You have 3-5 minutes to present your several years’ hard work, or a unique idea, so you definitely don’t want to miss that opportunity. As stated by Andy Shannon, „we don’t invest in presentations or apllications – we invest in people“, or Mike Butcher, he said: „Start your presentation with a real problem.“ When it comes to pitching your ideas to investors, the crutial thing is to explain them, what is the problem you are trying to solve, or disrupt on the market – and  then get straight to the point of how you intend to do this. It is not easy, I know. You must make long and good preparations, exercise in front of your team and finally choose the best ‘presentator’ in your team, to show the best of you and your idea.

 

I really hope events like this will happen more frequently in Sarajevo. We must ‘fight’, we must use every opportunity to become better people and more successful in future, i.e. financially stronger, because we never know what catastrophy or natural disaster may next happen. It is better to prevent than cure. It is better to be in position to provide help to those who need (as a strong), than to ask for help (if you are poor, or homeless).

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The geopolitical substance of the fall of the Berlin Wall

Giancarlo Elia Valori

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Currently the material break, rather than the real fall, of the Berlin Wall is at the core of many strategic and historical misrepresentations.

 The naive rhetoric of “global democracy” that broke into Potsdam for the will of the conscious people – just to use an old definition of Communist propaganda – or the inevitable victory of the famous Western values over everything else.

Nonsense. The negotiation, which also led President Mitterrand and Prime Minister Thatcher to use the single EU currency, namely the Euro, as strategic blackmail against the unified German Mark, was geopolitical and military strategy.

 Meanwhile, the shrewdest leaders in Western Europe struggled to say they did not want unification – but it was just so.

 Giulio Andreotti’s witty remark is now well-known, “I love Germany so much that I want two of them”, but also Prime Minister Thatcher and President Mitterrand had many doubts, which were never dispelled.

 The French Socialist President was clearly against German unification. Probably his aides were not fully against it. They imagined a united Germany, although without military protection, but President Mitterrand was certainly against it.

 All what I heard from the agents of the French intelligence Services and the many friends I had in France agree on this point.

 For a moment, President Mitterrand’s France even thought of its own geopolitical and military shield for the German Democratic Republic(GDR), and anyway invited Erich Honecker, the GDR leader for a State visit to France, in which he was treated as a Head of State.

 At the time no one treated the GDR leaders like that.

 The French idea was to stop reunification indefinitely and then negotiate . from a position of strength – the ways and timeline of a democratic “federation” between the two Germanies.

 The role of the two Germanies in the EU remained unknown, but it was clear that the future French presence in the German Democratic Republic was France’s decision-making axis, also from an economic viewpoint.

 The German Democratic Republic was by no means a collapsing State. Until July 1, 1990, the day of its dissolution, it had paid all its international debts.

Probably Krenz and Hohnecker’s heirs-politicians of the old world -thought that the USSR would continue to support them and the day before July 1, 1990, it was West Germany that decided a one-to-one exchange rate.

 Beforehand, the exchange rate between the two Germanies was 1 to 4.44, and – as we can easily imagine – it was a real disaster for the German Democratic Republic.

It obviously lost all the Soviet COMECON markets and then – as an Italy ante litteram – it also lost Western markets.

 Production in East Germany collapsed by 30% in a short lapse of time. After the elections in West Germany, East Germany was on its last legs and agreed to reform some laws: unemployment ceased to be unconstitutional, in a country that had the Compass and the Hammer, two Masonic symbols, in its national coat of arms. Later Potsdam’s Germany entered the West as a whole of regions, not as an autonomous State.

 The West Treuhandanstalt privatized companies in a superficial way, but those that had been destroyed by the one-to-one exchange rate – decided overnight – were sold at budget-friendly prices.

With specific reference to private homes, 2.17 million lawsuits were initiated, but it was President Gorbachev himself, with a destroyed State budget, who accepted the economic and political destruction of the old East Germany to get credits from West Germany.

He also accepted reunification within NATO, again to plug the Soviet budget holes, but even gave Chancellor Kohl free rein on the treatment of the old GDR leaders.

 This is how the story went.

However, the French President, who wanted above all a moderate approach to German reunification, was not – in principle – against reunification, but wanted it without destabilizing President Gorbachev, in particular, while Prime Minister Thatcher’s Great Britain was always explicitly opposed to reunification.

  The Iron Lady, in fact, fully supported President Gorbachev’s project in the USSR. She did not want destabilisation in Eastern Europe and finally she did not want the US costly acquisition of the old Soviet Union, with possible unpredictable effects.

The “grocer’s daughter” – as Queen Elizabeth II snobbishly called her -thought that, in a different context, there would also be a fully British part in the sharing of the spoils of the collapsing USSR.

 Acquisition estimated by Jeffrey Sachs at 10,000 billion US dollars in business terms, which then generated all the vouchers distributed to USSR citizens that later Yeltsin’s government probably produced in greater quantities than needed.

 As foreseeable, during the economic and food crisis of 1992-1993 many vouchers got into the wrong hands- those of the future “oligarchs”.

By their very nature, however, the German events happened when someone (possibly the USA or the Soviet Union) strongly stepped up the pace of riots in the GDR streets so as to reach an immediate and irrational reunification.

 What, in fact, could be the rationale of an USSR that, at the end of its Communist history, gave up the pearl of the Soviet Empire, namely East Germany?

I remember that when we talked about it, the former Italian President, Francesco Cossiga, was convinced that the Soviet Union had offered to the West that big poisoned chalice, namely reunited Germany, to block it and make it uncontrollable.

The German bite was too big to be swallowed and digested calmly and quietly.

Prime Minister Thatcher knew all too well that united Germany would decide the future of the Eurasian peninsula.

However, Chancellor Kohl, who was very clever, made President Gorbachev understand that Germany would easily bear the costs for the return back home of the Soviet troops stationed in East Germany, while Kohl himself easily won the 1990 German election he would probably lose  without the prospect of reunification.

Despicable – and I say so without pretence – was instead Angela Merkel (who owes his political career to Chancellor Kohl that discovered and sponsored her) who, at the funeral of the great German leader, while Helmut Kohl’s wife tried to hug her, retracted by saying “keep your distance”.

 Without Helmut Kohl, Angela Merkel would have been just an ordinary immigrant from the GDR, with a Protestant theologian father inevitably compromised with the Communist regime, and she herself the youth leader of the Eastern Party, SED. No one has ever fully investigated Merkel’s role in the GDR intelligence services.

As a strategist born, Francesco Cossiga knew what the real stake with reunification was and endeavoured with Kohl to slow it down, but not to avoid it, by promoting a phase of integration between the two Germanies that would be decided – in an ad hoc Conference – by the other European nations, as well as by the USA.

 Margaret Thatcher was firmly opposed to it.

 The real turning point was the end by self-destruction of Gorbachev’s regime in the USSR, which allowed the fast and irrational reunification, seen above all – as Kohl wanted – as an “enlargement” of the Federal Republic of Germany (FRG).

 The USA had no idea on which to work.

There were those who, in the State Department, thought of a more solid Europe, with the old GDR unified with the FRG, against everything was rising in the old USSR. There was also CIA, which rightly saw how useful was, for the United States, a new weak Europe to allow the non-competitive penetration of the US capital into Russia and Central Asia.

One of the most attentive U.S. analysts was John Mearsheimer, according to whom the end of the Cold War had put an end to the great powers that had dominated the Eurasian peninsula until that time, starting from the end of World War II.

 This meant that, from then on, world instability would probably return to the heart of Europe – a strategic dream of which the USA had never ceased to dream.

 The US decision-makers still recalled a classic piece by Walt Whitman, the author of Leaves of Grass, who wrote:

“I see the European headsman;

He stands masked, clothed in red, with huge legs, and strong naked arms, And leans on a ponderous axe.

Whom have you slaughtered lately, European headsman?

Whose is that blood upon you, so wet and sticky?”

Hence to interpret the current US global strategy for Europe, even Walt Whitman would be enough.

Let us analyze the geoeconomic and strategic determinants of German reunification.

Before committing suicide with his family, after having heard of the Morgenthau Plan, which provided for the forced ruralisation of Germany, Goebbels said: “They want to turn my country into a potato field”.

 It was a plan that, inter alia, envisaged peaceful collaboration, not the future Cold War with the USSR.

 The US directive JCS 1067, however, signed on May 10, 1945, provided exactly for the full entry into force of the Morgenthau Plan.

  350 factories, still in perfect working order, which had to be moved to France or the Soviet Union, were dismantled ab ovo and many German patents were also transferred, including that of aspirin.

 The fact underlying the nationalization of the German occupied allied areas was that the cost of maintaining a population impoverished of any factory, technology and productive income was too heavy to bear, precisely by the occupiers themselves.

 The reconstruction business, the esoteric solve et coagula of the U.S. speculative post-conflict strategy, was in crisis, because the surviving Germans could not pay for the goods that the Americans wanted to sell them.

 The speech delivered by General George C. Marshall at Harvard in 1947, before 15,000 students of the prestigious U.S. University, was in fact designed primarily for the USSR. It had been written by Chip Bohlen, an expert on Soviet affairs, and spoke of “millions of European citizens starving and even dying”.

 The city-country relationship, designed by Marshall in his famous speech, was the design of a correlation with the Europe of cities, namely the European and Western one, which finally reached the eternal Eurasian granaries, since the Journey of the Argonauts on a quest for the “golden fleece”, i.e. the huge expanses of wheat fields of the East.

 Another assessment made by the United States was that widespread anger among Germans, after World War II, would lead to the same political results of the First World War after the unfair Agreements of Versailles, opposed by Keynes in vain.

 Moreover, the planned process of West Germany’s impoverishment would have brought wind also in the USSR sails and, considering its productive dimension, it would also have stopped the relaunch of the rest of Western Europe freed by the Allies.

 It was precisely the fear of the “Communist contagion” that made it possible for the United States to fund the United Nations Relief and Rehabilitation Administration (UNRRA) which,as from 1943 – four years before Marshall’s speech at Harvard – tied the German territories to itself in order to avoid them falling into the coils of the Communist regime, according to the certainly correct US plans.

To some extents, however, this triggered Stalin’s foreseeable reaction. It was exactly the United States that asked Great British and France to unify – under its own protection – all the Western Allies’ control zones in Germany. It should be recalled that the French occupation zone was a source of primary information for the Communist penetration into the rest of the West.

 The deutschemark was in circulation at the time – a currency revalued as against the old mark and printed directly in the United States.

Hence the USSR-controlled zone was flooded by huge requests for goods to be bought with the deutschemark, considering that they were at capped and supervised prices.

At that juncture, Stalin ordered to stop the inflow of food into Germany and into the USSR-controlled area, but it was impossible and hence he tried to make the deutschemark not valid in the USSR-controlled areas.

 The rest is recent history, including the German reunification.

Reverting to Mearsheimer, we can better understand – as the US analyst said – that since then the United States has been “the peacemaker of the European region”.

Going back to our previous considerations, the greatest coldness for German reunification was expressed precisely by Prime Minister Thatcher, who stopped in Moscow after her State visit to Tokyo in September 1989, where she spoke to Gorbachev in private, in the Hall of Saint Catherine at the Kremlin.

 The Iron Lady clearly told Gorbachev that she did not want German unification at all, because she thought that “the post-war equilibria would be undermined by the new territorial changes”.

 She was perfectly right.

Just because of its inevitably pluralistic and equal partnership logic, Europe could not contain a Great and New Germany that, alone, represented all the “European plain” that was the plain where – as Raymond Aron maintained – the final war of the Worlds between East and West would be waged – a war also planned as early as 1995, at least by the heirs of the former USSR.

Regimes disappear, but the objective laws of geopolitics do not.

Hence Prime Minister Thatcher told Gorbachev that “NATO would not endeavour for the end of the Warsaw Pact”.

We must also recall Operation Unthinkable, which envisaged the penetration – from the Balkans – of the Allies and, above all, of Great Britain, to block the direct passage of the Red Army to Germany and to directly control the whole European continent, after the end of the hostilities, with or without the US involvement.

 The plan advocated by Churchill was not implemented.

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Eastern Partnership Countries: Buffer Zone or Platform for Dialogue?

Ekaterina Chimiris

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2019 marks the 10 th anniversary of the Eastern Partnership, a political initiative the EU launched in 2009 for developing relations with six eastern countries of the former socialist bloc. The collaboration program with Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine was primarily intended as a means for introducing these countries to the European experience and approaches to developing their economies, political institutions and civil society. Given current events, however, Russia has a highly negative perception of the EU’s policies concerning the Eastern Partnership, viewing them with an utmost mistrust, while this program’s results have so far fallen short of expectations.

The program’s 10 th anniversary allows Europe to draw some interim conclusions and attempt to modify the agenda. The experience has thus far proved that the development of each member state of the Partnership is unique, which makes collaboration based on identical standards and measures challenging.

On the other hand, as soon as Russia began to oppose the European discourse on the domination of European values in these countries, almost immediately, the EU started shaping the image of an “aggressive Russia” striving to expand its area of influence.

The Eastern Partnership countries face a difficult choice between the European and Russian development tracks. Such opposing policies have resulted in some countries joining the confrontation between the two poles, thus becoming a buffer zone between them, while some states prefer to be outside observers and strive to create a venue for potential collaboration between the opposing parties.

The power of values and discourse

Considering the situation in terms of the theory of discourse (M. Foucault), we see that broadcasting one’s values is far from a harmless practice. At some point, the gift of democratic and liberal values will transform into a carefully thought-through strategy for expanding power onto new territories. In the information dominated world of today, those who set the discourse framework determine the rules of the game and run the situation. So the objective of each centre is to spread their value models and practices as broadly as possible.

We should also take into account the overall tendency of European civilization to proselytize and promulgate its value models.

That has been its invariable behavioural strategy in the international arena since the time of the great European empires. Eurocentrism, otherwise known as the rejection of other cultures and perception of foreign practices as barbaric and uncivilized, still exists in Europe today in various forms.

Our European partners broadcast their values within the framework of the Eastern Partnership as part of aiding more institutionally backward countries. Essentially, in a crisis, more powerful actors introduce their rules of the game to draw new resources and territories into their area of influence. Simultaneously, an unattractive image of the opponent is created. Russian and European media have been doing this for the last five years.

The Eastern Partnership is a war of values and institutional systems

Robust European economic development throughout the 20th century is the basis of the appeal of European democratic institutions. Favourable living conditions, a free creative environment, and understandable, yet strict rules of life attract the best minds from developing countries. Cooperation with Europe opens the way to institutional innovation and knowledge but does not guarantee security and protection of national interests for, in particular, Armenia (Nagorno-Karabakh) and several Balkan states.

At the same time, Russia perceives the Eastern Partnership as Europe’s geopolitical project aimed at expanding its influence. Yet several experts believe that Europe today is not in conflict with Russia, with the central conflict being between Russia and the US. Nonetheless, this underlines a legitimate question as to whether the EU is capable of developing its own geopolitical strategy.

When the project was planned in 2009, an entirely different picture of the world and outlook were constructed. Back then, the planning did not account for China’s growing role or the influence of the Islamic factor. These ascendant international forces do not see any distinct differences between Russia and Europe. China’s growing global power and the spread of Islam (particularly of its radical forms) can become common challenges that Europe and Russia will have to think about combating together.

In 2009, Russia’s view of the situation was not taken into account or only one-sidedly; today, Russia’s proactive position has come as a great surprise for many in Europe. Moscow demands that its opinion and interests be taken into account, and they do not fit well into the old model of the Eastern Partnership.

The experience of implementing the program has demonstrated that joining the Eastern Partnership in no way means that the journey will be wholly positive. Europeans blame integration failures on the intense pressure exerted by Moscow on some countries’ leaders. Despite that, the Partnership countries are now themselves, too, in the process of choosing a collaboration formula. Generalizing current experience, we can identify the Partnership states’ two basic strategies concerning the two opposing poles, Russia and the West: the buffer zone strategy or the dialogue platform strategy.

The buffer zone is a situation of confrontation between the poles of influence when they are engaged in conflict on their periphery, without involving their resources. We see this in the open conflict in the Donbass, when passionate radicals find no outlet for their energy at home and are willing to take part in military gambles in a neighbouring state. Take, for instance, Moldova, where the outcome of the people’s political choice depends on who supports the candidate, Russia or Europe. In Georgia, success in domestic politics also largely depends on the elite’s foreign political preferences. Buffer countries have chosen a zero-sum game strategy, betting on one player only and thus putting themselves in a more vulnerable position. If their chosen side loses, they also lose.

The bridge metaphor has not taken root, and experts lean somewhat toward the platform for dialogue metaphor. Belarus is active here, providing a venue for the peace talks on the Donbass; Armenia acts as a prototype testing range for EU–EAEU economic cooperation; Azerbaijan, which was, until recently, a closed state geared toward its prosperity, is another example. The position of a platform for dialogue is stronger and more stable in the long term, though it is costlier to implement this strategy. The transaction costs involved are rather high.

Non-zero sum game

Currently, EU–Russia relations concerning the Eastern Partnership countries are stuck in the zero-sum game mode: the “West or Russia” choice cuts off many additional opportunities for these countries. With the US actively intervening in European processes, no-one is insured against the negative-sum game scenario unfolding.

Armenia has taken realistic stock of the situation and is seeking options for cooperating with the two regional associations on mutually beneficial terms. Belarus is pursuing a similar policy. Such actions prompt frequent media attacks on the states concerning “cooperation with the West” or “cooperation with Russia.”

Europe’s expert community is gradually developing a concept of the importance of studying and understanding Russia’s position and Russian discourse. Since sanctions bring economic difficulties but do not influence Russia’s political and social climate, while confrontation results in nothing but mutual losses, the need to seek alternative ways to collaborate is becoming imminent.

Moving toward a non-zero sum game appears to be the most favourable outcome. Yet there can be no way out of confrontation without implementing a specific dedicated policy. I will outline several possible steps that are already being mentioned in expert discussions. First, one should focus on fact-based rather than stereotype-based knowledge of each other. In this respect, developing EU studies in Russia and Russian studies in Europe is the desired format for restoration and development. Second, expert knowledge should not be obstructed if it draws conclusions that do not fit perfectly into the general propaganda framework. Third, when making a specialist assessment, findings must be called into question, and non-standard solutions must be sought. It is useful to compare discourses used by Russians and Europeans to denote the same facts. Imposing one’s expert opinion will not bring positive results, even if this is initially successful.

Additionally, a separate important task is to seek common goals for Europe and Russia. The experience of cooperating in the Arctic demonstrates that Russia and Europe can interact effectively in the face of a common threat. Finally, in the future, it will benefit all parties to create venues for dialogue in the Eastern Partnership countries. In this situation, Eastern European countries will undoubtedly compete to be the best and most convenient such venue. Growing competition will result in improved quality and reduced transaction costs. Such venues may also become specialized. Negotiation hubs on various issues, with a developed infrastructure and expert support, constitute a somewhat favourable alternative to buffer zones in an armed and political confrontation. For the Eastern Partnership countries, it will mean developing education and further training programs in negotiating practices. As a result, instead of buffers, states can become regional and global confidence-growth points.

From our partner RIAC

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Will European Parliament make a genuine political force within the EU?

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The approval of the make-up of the European Commission is stalling – quite unexpectedly for most politicians and experts in Europe. In October, members of the European Parliament (EP) rejected three candidates for the Commission who had been put forward by its new Chairperson, Ursula von der Leyen. Approval was denied to representatives of France, Romania and Hungary. The official reason in all cases is “conflict of interests”. What happened will “only” delay the coming into power of the new European Commission, most likely, until December 1. A number of EU states have been expressing concern over an ever increasing politicization” of the EP. According to observers, this marks the beginning of a new wave of struggle for the redistribution of power within the EU’s governing bodies, which will have long-term consequences.

The elections to the EP held in May this year put an end to the dominance of two large factions – Christian Democrats and Social Democrats, who maintained leading positions in this structure for several decades. The trend towards fragmentation of the EP’s deputy pool persisted. After representatives of the left-wing and center-right parties lost the majority, smaller factions and groups came to the fore. Given the situation, skeptics predict a greater risk of the European parties returning to the “confrontational model”, which is fraught with a further decrease in the efficiency of legislative effort, a decline in the ability of the All-European legislative organ to take quick decisions and a set of difficulties in floating long-term, strategic initiatives without losing their essence.

Despite the fact that parties that support a further political integration within the EU retain the majority in the European Parliament, there have been important changes in the balance of power among the leading factions – their political “weight” was leveled. Such an alignment of forces is set to intensify frictions while tackling priority issues on the European agenda. For years, coalition agendas within the European Parliament have been formed not on the basis of long-term political programs, but solely with a view to obtain a situational majority. Nevertheless, supporters of the pro-European parties expect their self-organization and cooperation to be enhanced by a further promotion of the practice of appointing candidates from major European parliamentary factions to key positions in the EU’s governing bodies – the so-called practice of “leading candidates” (Spitzenkandidaten). For 20 years, the European Parliament “has been promoting the idea of ordinary people participating in the selection of the head of the EC – the executive branch of the EU,” – Natalia Kondratyeva of the Institute of Europe, Russian Academy of Sciences, says. The procedure was first put into practice in 2014. Until the announcement of the outcome of the May elections, statements were made about a “firm intention” to continue this practice in the new political cycle. After the May elections, representatives of leading parties that won seats in the EP remained optimistic about the viability of the “leading candidates” procedure. However, political strategists were quick to suggest forming a sustainable coalition in the EP under the new conditions. Taking advantage of the situation, some heads of the executive power in the EU member states tried to minimize the participation of European deputies in the process of forming the governing bodies of the Community. As a result, none of the “leading candidates” received any posts in the EU executive bodies.

Paradoxically, this behind-the-scenes bargaining over the candidacy of the new head of the European Commission, which resulted in the de facto removal of the EU legislative body from the decision-making process, has led to an increase in the political influence of the EP. For a start, the badly hurt European MPs supported the candidacy of the new President of the European Commission, Ursula von der Leyen, approved without their participation, with a minimum majority of just over 51 percent of the vote (383 votes out of 747 attending the meeting). As of this autumn, the European Parliament has been demonstrating an unequivocal desire to boost its role, to strengthen the system of checks and offsets, which the EU citizens explicitly voted for in May. By mid-October, it had become clear that the European Parliament was taking upper hand while the battle for posts in the European Commission dragged on. The President of the European Commission was about to announce the strategic priorities of the EU executive body at a meeting of the EU leadership. However, after the vote-down of three candidates, the President of the European Parliament David-Maria Sassoli said that he could not provide an accurate forecast on the time of the next vote to approve the new composition of the European Commission. Even though France, Romania and Hungary submitted their candidates fairly quickly. Even now, in November, the exact date of voting on the composition of the EC, which, according to the regulations, must be approved without delay, on the day of the session, is not known. Meanwhile, if the newly elected members of the EC plan to get down to work on December 1, its approval by the European Parliament should take place during the November plenary meeting.

Experts recall that von der Leyen won by a narrow margin this and that the “unsignificant majority” she received is of a “very fragmented” nature. Therefore, we cannot completely exclude such a development of events in which the European Parliament may dismiss the proposed composition of the EC altogether. In late October, a senior European diplomat, speaking on condition of anonymity, remarked that a refusal of parliamentarians to give credit to the future composition of the European Commission “would be a crisis of enormous proportions.” Meanwhile,  President of the European Parliament Sassoli believes that the current situation indicates the responsible attitude of deputies towards the composition of the executive bodies of the European Community and speaks of their position in principal on procedural matters.

A few days later, the European Parliament added fuel to the flames of disagreement between the legislative and executive branches of the European Union, by expressing almost unanimous condemnation of the decision of the EU Council to postpone the beginning of negotiations on granting membership in the Community to Albania and Northern Macedonia. Manfred Weber, head of the European People’s Party faction and former top candidate for the post of head of the European Commission, described the decision of the EU Council as a “slap in the face” of applicants “which ruins the credibility” of the Community. A representative of the second largest faction, the Social Democrats, Brando Benifey, expressed “profound disappointment.” Co-chairman of the green faction, Philip Lamberts, has referred to the decision as “a signal of great concern.” Speaker Sassoli voiced the almost unanimous opinion of the European deputies, urging the leadership of the EU states who opposed new negotiations on the expansion of the Union, first of all, France, to reconsider their position.

Meanwhile, Europe is in for more heated debates over the parameters of the EU’s common budget.

In such conditions, the most likely outcome is compromise and half-measures in decision-making, which is fraught with a further political disorganization of the EU and its fragmentation on the national and regional principles. In addition, as The Economist writes, a further fragmentation of the EP’s deputy corps means that none of the leading EU countries boasts “levers” of political influence on the decision-making process. Even President of France, Emmanuel Macron, and von der Leyen herself, a representative of another leading EU country, Germany, do not have them. At present, Macron acts as a leading EU politician and enjoys tremendous influence among leaders of member countries. However, as the recent events demonstrate, his months-long efforts which were aimed, at first, at expanding the liberal fraction in the EP, and then at boosting its influence among the deputies, have not yielded much fruit. As for von der Leyen, her formal reliance on the European People’s Party (EPP), which still maintains its positions as the largest faction in the EP, was substantially undermined by the political humiliation it experienced as a result of its de factor exclusion from the process of approving the candidacy of the former defense minister of Germany to the post of head of the EC. As a result, von der Leyen is not deemed “our kind” among EPP deputies.

All this affects, first of all, the German “tandem” with France, which is already brimming with numerous differences and compromises. In the meantime, the growing frictions within the EU do not simply reflect the “growth of nationalist sentiment”. The EU is still balancing on the verge of transition to a ‘two-speed Europe’ model. This spring, Macron came up with several dozen initiatives and measures to push the EU towards “European sovereignty”, and promote democracy and trust. Germany, in turn, spoke in favor of creating within the EU, after the exit of Britain, “five” leading countries, which would embrace Germany, France, Italy, Spain and Poland and could take “part in the management of the European Union directly.”

As it happens, the reverse side of the much cherished changes is the strengthening of the political system within the EU. EU citizens are increasingly dissatisfied, on the one hand, with the chronic “deficit of democratic control”, the striving of politicians to gain more power, including at the supranational level, while avoiding their greater accountability to voters. On the other hand, a policy that is gaining strength among the traditional establishment is to “compromise for short-term alliances”, even at the cost of a permanent struggle for power between institutions. The current composition of the European Parliament fully reflects the mood of Europeans. Centralization of Europe will bring back the political struggle, which seemed to have become a relic of the past for many parties in the traditional establishment, will trigger a clash of ideas, a greater independence of European deputies, so unwelcome for many national leaders. All these vividly reflect the trends in the current European policy which is becoming more and more factional and “diverse”. As a result, the situation is becoming less and less manageable due to the growing number of EU member states, and, consequently, the diversity of political interests represented in the community. Consensus, so indispensable for a common policy, is becoming increasingly illusory. The time of “sustained” and even “flexible” alliances within the EU is over. Coalitions have become not just situational – they are increasingly spontaneous, which threatens to paralyze the political institutions within the Community. 

From our partner International Affairs

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