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Sons of Orthodoxy: EU Austerity and a Russian-Greek Orthodox Alliance

Brian Hughes

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The bitter fight that has been raging between the European Union and Greece has now extended for five long months. With the referendum on July 6th it may all be mercifully put to an end.

With strong indications that the public will resoundingly reject another bailout and the crippling austerity that comes with it, Greece will finally be free of the hated ‘institutions’ that, as they repeatedly claimed, paralyzed their economy. However, the path that leads to a once again stable and prosperous economy is likely not to be found quickly. When the vote finally arrives, Greece will most likely revert to the drachma and default, wherein the economy will enter yet another depression. As of now, the EU appears to be washing its hands of Greece. Fascinatingly, Russia may be the only country that has the immense means and political savvy to navigate this break-up to the benefit of Greece and to its own global positioning interests and national security priorities beyond the Caspian.

This was never a two-sided fight. Greece and the EU stared down at each other while forgetting that Russia was patiently waiting on the periphery. The EU adamantly stated that austerity would eventually work, while Greece equally weighed in against the ‘indecency’ that such economic measures were forcing on the Greek people. So much focus has been on rhetoric and horribly complex political posturing inside of the 28-country EU, it quietly missed the fact that Russia could emerge the only real winner, leaving the EU to struggle with the consequences of basically being rejected by a fallen EU member that chose an alternative path.

Russia and Western European powers are in the midst of a tumultuous relationship at the moment diplomatically and it’s difficult to argue that Russia isn’t coming away with the upper hand. Vladimir Putin has shrugged off sanctions, recession, and drastic inflation, all while increasing personal popularity and national territory. He likewise out-flanked the more-hawkish Western voices in Syria by utilizing Russian soft power, coordinating a chemical weapons disarmament. With a meager 18% debt-to-GDP ratio, Russia has the financial depth and flexibility to do as they please. Lending a helping hand to Greece would be a simple first step to begin prying Greece away from the EU and into a welcoming Russian sphere of influence.

Greece has recently been torn between Russia, an ‘Orthodox brother nation,’ and it’s EU counterparts. The economy was exploding with prosperity before the global recession of 2007-2008 and this newfound wealth was largely facilitated by its close relationship to the EU and inclusion in the Euro currency. Conversely, Greece has historical, cultural, and religious connection with Russia. In addition, tourism and diaspora between the two countries is quite high. Thus, with six years of economic downturn and multiple recessions following the initial depression, Greek positive sentiment toward the EU has plummeted to roughly 25%. Meanwhile, two-thirds of Greeks have a favorable view of Russia, a unique antithesis with much of the EU.

Russia’s relationship with the current Greek political hierarchy began on strong footing, as Prime Minister Alexis Tsipras attempted to block sanctions against Russia just days into office. After sanctions were imposed with the United States’ urging, Greece reportedly told Russia that they were able to reduce their intensity. This may be the strongest leverage that Greece can offer Russia: while still being a member of the EU, even without its currency, Greece can use its vote to sway sanctions. While a difficult task for Greece to diametrically oppose the wishes of stronger Western powers, one dissenting vote to new sanctions significantly weakens impending ones. Previously, the EU warned of isolationism if Greece bowed to Russia with respect to sanctions and warned not to challenge the EU position. In the wake of default this threat will prove hollow, while isolation from the EU may drive Greece further to the side of Russia. The Greek government would be walking a dangerous tightrope between Russia and the EU, but with little options for an immediately stable economic future they may gamble.

In addition to challenging sanctions, Greece has also fought against the position held by the EU in regard to Russian natural gas. EU members are attempting to move away from reliance on Russian gas and the Gazprom empire. In April, Greece signed on for inclusion in the Turkish Stream gas line project (although that project has yet to begin). Many anticipated that this was a ploy to bluff Europe into accepting easier loan terms, but deciphering what was political brinksmanship and genuine agreements may prove difficult: Russia is going to accept the contract either way.

The EU is stuck between offering Greece the demanded debt write down and further bailouts or gambling with the standard line of austerity and possible ‘moral hazard.’ This was certainly a fight the creditors never wanted to face, with the political implications singularly negative and no positive outcomes readily imaginable. The EU outcome that would have subdued Russian influence would have been to keep the status quo. When it became clear that the Syriza party had no interest in doing so, the EU could only keep pressing Greece until it broke. Unfortunately, the break may certainly occur, but may consequently create a new alliance the EU never anticipated: an Orthodox alliance that renders EU influence in the Adriatic severely compromised.

Greece has until July 20th to decide whether to accept bailout funds or simply fall out of the Euro. The latter move will show the rest of the EU that membership is not a strictly one-way road and any prospective members may be hesitant in accepting membership. Highlighting the weakness of European partnerships and rigidity of monetary control would represent a large prize to Russia, always interested in embarrassing Western powers when it has opportunity to do so, given what it considers to be like behavior from the US and EU.

Make no mistake: the EU is giving every opportunity to Russia to advance in the economic vacuum that will be left behind as default sweeps through the markets of Greece. For six months it has let the confidence in the Euro, and the EU itself, be shaken through vicious back-and-forth political rhetoric. While the concessions that Greece demanded were far more than the EU felt allowable, Greeks understandably balked at even more austerity. With Russia actively participating in Greece’s alternative plans, the EU needs to be legitimately concerned about watching Russia slowly embrace Greece away from Western Europe and more towards its Orthodox brother and the more East-leaning shift it is trying to create in the Caspian and beyond to China. If Greece rebounds as a result of Russian influence, it will give pause to other newer and potential EU members facing similarly severe austerity measures. The EU can still salvage this situation, but it will take drastic compromise since Greek voters appear resolved to accept a Euro exit. With severe austerity the question simply becomes, “how can a state effectively govern when it has little decisions over its budget?” Greece seems to be saying it cannot and therefore is seeking alternative answers to this European economic stick. It proclaims to want economic dignity back. And Russia just might be the country holding the dignity carrot.

Brian Hughes is currently a student in the International Security and Intelligence Studies program at Bellevue University in Omaha, NE, USA.

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Dayton Peace Accord 23 Years On: Ensured Peace and Stability in Former Yugoslavia

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For the past twenty-three years life has been comparatively peaceful in the breakaway republics of the former Yugoslavia. The complicated civil war that began in Yugoslavia in 1991 had numerous causes and began to break up along the ethnic lines. The touching stories and the aftermath effects of the breakaway republics of Bosnia- Herzegovina, Croatia and in Kosovo are still unfolding. Though the numbers of deaths in the Bosnia- Herzegovina conflict in former Yugoslavia are not known precisely, most sources agree that the estimates of deaths vary between 150,000 to 200,000 and displaced more than two million people. During the conflict a Srebrenica a North-eastern enclave of Bosnia once declared as a United  Nations  (UN ) safe area” saw one of the worst atrocity since second world war.

It has been estimated that more than 8,000 Muslim Bosniaks were massacred in Srebrenica and it was one of the most brutal ethnic cleansing operations of its kind in modern warfare. The US brokered peace talks revived the a peace process between the three warring factions in Bosnia- Herzegovina. For Peace in Bosnia and Herzegovina a United States (US ) -brokered peace deal reached in Dayton on 21st November 1995. In a historic reconciliation bid on 14 December 1995 , the Dayton Peace Accord was signed in Paris, France, between Franjo Tudjman president of the Republic of Croatia and Slobodan Milosevic president of the Federal Yugoslavia (Serbia and Montenegro), Alija Izetbegovic, president of the Republic of Bosnia-Herzegovina.

When conflict in Bosnia- Herzegovina, Croatia ended, the reconciliation began between ethnically divided region. The US played a crucial role in defining the direction of the Peace process. In 1996, North Atlantic Treaty Organization (NATO) -led 60,000 multinational peace enforcement force known as the Implementation Force (IFOR)) was deployed to help preserve the cease-fire and enforce the treaty provisions. Thereafter, the Court was established by Resolution 808 and later, Resolution 827 of the United Nations Security Council, which endorsed to proceed with setting up of the International Criminal Tribunal for the former Yugoslavia (ICTY) to try crimes against humanity . International Criminal Tribunal for the Former Yugoslavia (ICTY) was the first United Nations (UN) war crimes tribunal of its kind since the post-second world war Nuremberg tribunal.

In the late 1990’s, as the political crisis deepened a spiral of violence fuelled the Kosovo crisis between the Kosovo Liberation Army (KLA) and the Yugoslav forces. Unlike the Bosnia- Herzegovina, Kosovo was a province of Serbia, of former Yugoslavia that dates back to 1946, when Kosovo gained autonomy as a province within Serbia. It is estimated that more than 800,000. Kosovos were forced out of Kosovo in search of refuge and as many as 500,000 more were displaced within Kosovo.

Subsequent t hostilities in Kosovo the eleven week air campaign led by NATO (North Atlantic Treaty Organisation) against Yugoslavia in 1999 the Yugoslavian forces pulled troops out of Kosovo NATO. After the war was over, the United Nations Security Council, under the resolution 1244 (1999) approved to establish an international civil presence in Kosovo, known as the United Nations Interim Administration Mission in Kosovo (UNMIK). Nevertheless UNMIK regulation No 1999/24 provided that the Law in Force in Kosovo prior to March 22, 1989 would serve as the applicable law for the duration of the United Nations Interim Administration Mission in Kosovo (UNMIK).

In this  context reconciliation is a key to national healing of wounds after ending a violent conflict. Healing the wounds of the past and redressing past wrongs is a process through which a society moves from a divided past to a shared future. Over the years in Serbia, Bosnia- Herzegovina, Croatia and in Kosovo the successful peace building processes had happened. The success of the peace building process was possible because of participation of those concerned, and since appropriate strategies to effectively approach was applied with all relevant actors. The strengthening of institutions for the benefit of all citizens has many important benefits for the peace and stability of former Yugoslavia. Hence, the future looks bright for the Balkan states of Serbia, Bosnia- Herzegovina, Croatia and Kosovo.

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Hungarian Interest, Ukraine and European Values

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Diplomatic conflicts that have recently arisen between Hungary and its neighboring countries and the European Union as a whole most clearly show the new trend in European politics. This trend is committing to national and  state values of a specific  European country, doubting  the priority of supranational  interests within the European Union. Political analyst Timofey Bordachev believes that “the era of stale politics and the same stale politicians, who make backstage decisions based on the“ lowest common denominator,” are finally coming to an end. Politicians with a new vision of the world order come to power, such as Hungarian Prime Minister Viktor Orban, Austrian Federal Chancellor Sebastian Kurtz, or the new head of the Italian Interior Ministry, leader of the right-wing League of the North Party, Matteo Salvini ”.

It is not the first year that Hungary is trying to protect the interests of its citizens and the state from external influence, to protect the Hungarians in the territory of neighbouring states  by establishing for this  a special position (Commissioner  for the development of the Transcarpathian region of Ukraine), to determine relations with other countries on the basis of their attitude to the rights of Hungarians. This is how conflicts with the European Union arose, after Hungary refused to let migrants into the country, in the same manner, a conflict  arose with Ukraine, which is trying to build a state ideology, based on nationalism, which a priori does not provide for the proper level of realization and protection of the rights of non-titular nations.

In relation to Hungary, Ukraine follows the same policy as in relation to Russia – to initiate various accusations, to call for punishment, to talk about the inconsistency with European values of the Hungarian policy under the leadership of  Orban. Doing so Kiev has its multifaceted interest: cooperation with NATO and the EU, support  for any decisions of Brussels, the anti-Russian course, domestic policy based on the nationalist  ideology. And in all these areas  Hungary poses  a problem for Ukraine. In the description of relations with Hungary  Kiev even  uses the word “annexation“.

Hungary is hardly planning to seize any Ukrainian territory, but on what  grounds Ukraine falsely accuses Hungary of its annexation intentions in relation to Transcarpathia?  The Ukrainian side highlights several positions:

Issuing Hungarian passports  to Ukrainian citizens (ethnic Hungerians)

This  is an old story, it has come to light again recently due to the growth of Ukrainian nationalism. Moreover,  there are concerns about the implementation by Hungary of the “Crimean scenario” in relation to Transcarpathia.

The Hungarian government has created the position of  “Commissioner  for the development of Ukraine’s Transcarpathian region and the program for the development of kindergartens in the Carpathian region”.

Ukraine demanded an explanation. A note of protest was delivered to the Hungarian Charge d’Affaires in Ukraine, and the Foreign ministers of Ukraine and Hungary had a telephone conversation on the problem. Hungary continues to ignore the requirements of Kiev.

Ukraine fears further disintegration processes

At the same time, in Kiev there is no understanding  of the fact that combining the ideology of nationalism with the country’s national diversity and European integration is hardly possible.

Ukrainian experts note the growth of separatism in the Transcarpathian region, as well as the “strange behavior” of the governor, who plays on the side of Hungary. They also complain that “pro-Ukrainian ideology”(?) is not being сonsolidated in Transcarpathia, and this region is not controlled and monitored by  the Ministry of information. In a word, the state is losing control over the territory, which it neither develops nor controls. Such behavior of the governor and the region’s residents may indicate that the state is not sufficiently present in the lives of residents of Transcarpathia, and this a financial and humanitarian drawback they compensate with the help of Hungary, – experts believe.

Apparently, Ukraine is unable to reach an agreement with Hungary as relations are tense. In response to the Ukrainian law on education, adopted in the fall of 2017, which infringes the rights of national minorities, Budapest blocked another, the third, Ukraine-NATO meeting. Ukraine witnessed this embarrassing  situation  in April 2018.  At the same time elections were held in Hungary, in  which Viktor Orban’s party won a majority in the parliament. Such a tough stance of Budapest in relation to the Ukrainian educational policy Kiev considered to be just a sign of electoral populism. However, this was a mistake.

Viktor Orban’s victory in spring 2018 was convincing, and a convincing victory means obvious support of his migration policies as well as his support  for compatriots abroad. The party of Orban – Fides – not only won a majority but a constitutional majority – 133 of the 199 seats  in the National Assembly of Hungary.

There is no doubt  that Hungary has become Ukraine’s another serious opponent in the process of its European integration. And it is unlikely that either  country  will take a step back: there will be presidential elections in Ukraine soon, and in Hungary, the victory won by Orban, apparently, confirms the  approval of his independent  foreign  policy  by  the citizens.  So the conflict is likely to develop.

First published in our partner International Affairs

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Belt and Road Alternatives: The European Strategy

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The European Union (EU) has put forward a plan for enhancing connectivity within Asia, which has been dubbed as the Asia Connectivity Strategy.

The EU does not want to give an impression, that the Asia Connectivity Strategy (ACS) is a counter to the Belt and Road Initiative (BRI). Yet, senior officials of the EU, while commenting on the broad aims and objectives of the project, have categorically stated, that the primary goal of the Asia Connectivity Strategy, is enhancing connectivity (physical and digital) while also ensuring, that local communities benefit from such a project, and environmental and social norms are not flouted (this is a clear allusion to the shortcomings of the BRI). There are no clear details with regard to the budget, and other modalities of the project (EU member countries are likely to give a go ahead for this project, before the Asia-Europe Meeting in October 2018). EU has categorically stated, that it would like to ensure that the ACS is economically sustainable.

Other alternatives to BRI 

It is not just the EU, but even the US, along with Japan and Australia. which are trying to create an alternative vision to the BRI.

The US alternative to the BRI, is being funded by the recently created United States International Development Finance Corporation (USDFC) (an organization which will merge Overseas Private Investment Corporation and other Development Finance Programs) which came into being after the passing of the BUILD  (Better Utilization of Investments leading to Development) Act recently.

It would be pertinent to point out, that the US which has been accused of lacking a cohesive vision to counter China’s BRI has in recent months spoken, on more than one occasion, about greater the dire need for robust connectivity in the Indo-Pacific. In July 2018 US Secretary of State while speaking at the Indo-Pacific Business Forum committed an amount of $113 million for U.S. initiatives to support projects related to digital economy, energy, and infrastructure. The Secretary of State, while speaking about close links between US and Indo-Pacific, also spoke about the need for greater private sector involvement in projects in the Indo-Pacific. Pompeo off late, has also been reaching out pro-actively to a number of countries in South East Asia, and visited Malaysia, Indonesia in August 2018.

It would be pertinent to point out that OPIC  (now part of USFDC) has already signed with the overseas finance development arms of Japan and Australia, and is in talks with India to work jointly. Some of the areas being explored for joint investments are energy, infrastructure.

It is not just the US, even Japan has come with it’s own alternative, Partnership for Quality Infrastructure (PQI), to the BRI.

Potential Appeal of the Asia Connectivity Strategy

So the question then arises, why would countries seeking an alternative to China, not come on board the US’ connectivity initiative. The ‘Asia Connectivity Strategy’ may be especially acceptable to leaders, who do not want to be seen as blindly following US diktats, but who are also uncomfortable with Beijing’s economic policies, and want to avoid falling into what has been dubbed as Beijing’s ‘debt trap’ diplomacy. A perfect example being Malaysian Prime Minister, Mahathir Mohammad who scrapped projects worth 40 Billion USD, and also referred to the rise of a ‘new colonialism’ being promoted by China. The Malaysian PM has not shared a particularly cordial relationship with the US in the past. While addressing the United Nations General Assembly (unga), Mahathir made some interesting points, saying that Malaysians want a Malaysia, which seeks relations based on ‘mutual respect’ and a Malaysia, that is ‘neutral’ and ‘non aligned’

EU itself trying to strike a balance

EU Chief, Jean Claude Juncker, has been pitching for a more pro-active response to Trump’s insular policies, as well as China’s BRI. Given the fact, that EU has taken a divergent stand from US on the Iran issue, and has proposed a Special Purpose Vehicle (SPV) which will ensure that trade with Iran continues, even before the impending US sanctions to be imposed on Iran in November 2018. The SPV was announced, jointly with Russia and China, on the sidelines of the UNGA.

At the UNGA, French President, Emmanuel Macron disagreed with Trump’s views with regard to Iran, and supported the 2015 Vienna Accord. Said Macron: We know that Iran was on a nuclear military path but what stopped it? The 2015 Vienna accord.”

While it remains to be seen, if the SPV set up by EU works or not, but a number of countries which do not want to be part of the Chinese or American orbit would be attracted towards the EU, in spite of all the problems it is facing, due to it’s capacity to take an independent stand.

Asia Connectivity Strategy is not only about competition

It remains to be seen whether the Asia Connectivity Strategy can gain traction. In terms of connectivity, there may even be strong overlaps with the ‘Indo-Pacific vision’. France, which has strengthened strategic ties with Australia and India, is already seeking to play a pro-active role in the Indo-Pacific.

French President Emmanuel Macron had referred to the need for a strong Paris-Canberra-New Delhi axis, during his Australia visit, as a counter to China’s increasing assertiveness.

Interestingly, while there is a realization, that Asian Connectivity Strategy has a competitive element, and there are some clear differences between EU’s strategy and BRI, there are also some who believe, that there is space for collaboration between the Asia Connectivity Strategy and BRI. This point has been put forward by some policy makers and strategic commentators in EU, as well as sections of the Chinese media. Wang Wen Wen in an article for the Global Times, argues:

‘Asia needs Europe as much as it needs China. Since the EU and China are the two largest economic entities in Eurasia, it is vital that they steward the continent’s economic development agenda. Some programs in the BRI have carried out cooperation with the European side on technology and equipment procurement.’

In conclusion, the Asia Connectivity Strategy is an interesting idea. A lot will depend upon available resources and the response of potential stakeholders. But EU going ahead with such an initiative in spite of numerous problems within is truly laudable.

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