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The Brexit issue

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Currently Great Britain’s annual net budgetary transfers to the European Union amount to 13 billion pounds. In various forms, every year the European Union injects 7 billion pounds into the British economy.

Hence, while – as a result of Brexit – Great Britain shall renegotiate the trade agreements with the European Union, it shall simultaneously reshape its trade flows also with the United States, Japan and China.

Not to mention the 60 Commonwealth nations, which would become a new and huge replacement area for all the economic sectors in which the EU incurs more difficulties in promoting British companies.

It is certainly a great economic change, but also a strategic and geopolitical revolution which many experts are already analyzing in Great Britain.

It is also worth recalling that over 50% of the current British trade regards the EU, while the trade balance with the other nations refers to Treaties reached only through the frame, namely the European regulatory framework.

And not all European frames have favored the British economy.

It is a painful mystery how we can imagine a Union of countries competing one another, with largely overlapping economies, in a context of international trade expansion, which uses one currency only (but this is not the British case), but has no common tax policy nor pools the public debt.

An eternal situation of countries which always quarrel and compete, but have more convergent interests than it may seem.

Sooner or later, however – as always happens within alliances – a leader creating a hierarchy will emerge.

Hence Brexit is Great Britain’s way to say that it no longer wishes to accept a German-led European Union.

Therefore Great Britain is reacting to an EU crisis which is structural and has not only merely commercial roots, but also strong geopolitical and strategic ones.

In fact, the idea of some British economists is that reformulating the Treaties with the EU itself and, at the same time, with China, the Russian Federation and the United States – pending the TTIP – is more useful than indulging in a massive negotiation between the EU and these external commercial areas.

A negotiation that would inevitably favor the continental economies at the expense of the British one, which has another productive configuration compared to the German or the Spanish ones.

Hence, at analytical level, the pros and cons, namely the Brexit and the Bremain are equal, and no one can now evaluate the specific weight of each economic or political choice.

For Great Britain remaining in the EU means to avoid the tariff barriers and the commercial brokerage costs which the Union has abolished.

Therefore leaving the European system could be dangerous.

Nevertheless, given Great Britain’s economic size and importance, the Brexit supporters think it is always possible to negotiate new and more favorable terms and conditions with the EU.

Moreover, outside the European Union, Great Britain will be in a position to renegotiate a new global tariff system without being obliged to be subject to EU regulations.

The new trade rules could certainly stimulate further internationalization of the British economy, which would have open doors in China, Japan and Russia.

All this while EU exports are shrinking.

With Brexit, Great Britain could also decide to carry out dumping on growing markets and quickly replace the exports of many EU countries, especially those in crisis.

Furthermore Great Britain pays 340 pounds a year to the EU for each household, while earning approximately 3,000 for each household.

Moreover, should Great Britain leave the European Union, the average costs would not decrease, because there would always be costly mechanisms for access to the European market or to the other geoeconomic systems.

Conversely, should Great Britain stop making transfers to the EU, the 350 million pounds a week (half of the British school budget), which are the cost for remaining in the EU and comply with its rules, could be spent to create new companies and improve vocational and scientific training – an issue to which Great Britain is particularly sensitive, as is the case with all the economies in which the service sector is particularly large and developed.

Moreover, leaving the EU does not absolutely mean reducing migration flows to Great Britain, as claimed by the Brexit opponents. After all, Great Britain could carry out more stringent controls at its borders thus avoiding – as currently happens – differentiating between the immigrants coming from the EU and the ones coming from other continents.

Furthermore, many Brexit supporters point out that now Great Britain counts for very little within the EU and hence it is highly unlikely for this situation to improve if voters decide to stay in the EU.

The British Treasury Ministry, which is firmly opposed to the country leaving the EU, notes that Brexit could make the British GDP shrink by 6% as from 2030.

We do not know how Prime Minister Cameron’s government has made these calculations.

Let us imagine it assumes an increase in the prices of goods and services imported from the EU, but this is by no means certain.

We are in a phase of structural deflation and competition among the EU Member States is such that Great Britain could take advantage of this situation by focusing on one country or the other.

As usual, the future renegotiation of Trade Agreements will lead to favor some sectors and penalize others.

Today no one can predict what the British top exports to the EU will be in the coming years, and not even the structure of European exports to Great Britain.

Hence, the British government reiterates that, in case of Brexit, the British GDP would decline by 5-6%.

And shall we not also consider the inevitable expansion of British trade in the Commonwealth region?

Again, rational forecasts cannot be made – everything will depend on the political mechanism of the upcoming negotiations and on a strategic and geoeconomic context full of variable factors rather than constant ones.

A global context which is changing very rapidly and it is unpredictable both in relation to Great Britain and the EU.

It is not at all certain that the pound sterling – which is currently 5.6% undervalued compared to its commercial value – shall remain “low”, thus attracting capital from abroad.

Indeed, it is likely that – after the signing of the TTIP between Great Britain and the United States – there will be an increase in the pound sterling at purchasing power parity and a parallel increase in the euro.

The advocates of Great Britain’ stay in the Union, provide the following assessment on the Leave costs.

The transport costs would increase (by 4-7.5%) since most of the vehicles used are produced in the EU region.

However, setting the great British automotive industry again into motion could become reasonable, with a large market outside the EU which requires being motorized.

A replacement economy would be created in the British transport sector which would increase employment.

Furthermore, obviously the means of transport have a short payback time which implies a decreasing trend of unit costs.

With Brexit, the prices of alcoholic beverages would increase (again in a 4-7% range), which is certainly bad news for all pub-goers.

But which is the British share of alcohol imports from the EU?

The British producers and dealers of this industry report that the imports are decreasing steadily, from about 151 million bottles in 2010 to 142 million ones in 2014.

The British government also charges high excise duties on alcohol, in addition to the EU common taxation.

As we can see, also the structure of alcohol prices in Great Britain is more complex than it may seem and the industry will be probably able to resort to effective replacement practices, to the delight of all British barfliers.

Again according to the Bremain supporters, food prices would increase by 3-5%.

However, how can such a statistical evaluation be made on one of the most diversified markets?

We do not know, nor do we know what the average British nutrition style is, although everyone knows that the British cuisine does not certainly stand out for quality.

Have you ever found an English restaurant abroad?

The already high prices of the selected, high quality and “high end” food products – almost all imported and consumed by the British upper classes –

are likely to further increase.

But probably the prices of lowbrow food for the working class, traditionally scarcely influenced by imports, will not rise much.

Clothing prices are expected to increase between 2% and 4%, but we think that the price of high fashion and luxury products imported from France and Italy may increase.

While, today, the networks selling low-cost clothes already largely defy EU regulations and manufacturing processes.

Again according to the Bremain advocates, as a result of Brexit, on the best possible assumption, the average revenue per household would fall by approximately 1.9% per year.

On the worst possible assumption, the purchasing power per household would decrease by over 4% per year.

But how? It is totally inconceivable that a country like Great Britain shall forcedly renegotiate, with the EU or the WTO, less favorable terms and conditions than those currently existing with the EU.

In fact, after the possible Brexit, Great Britain could follow the Norway’s and Switzerland’s examples and join the European Economic Area (EEA) and EFTA.

Or it could renegotiate trade agreements with the WTO only.

Hence are we sure that both negotiations would make Great Britain obtain much more draconian terms and conditions than the EU ones? And why?

On the contrary, it is likely for Great Britain to create good synergies with the Swiss Confederation, which walked out of EFTA in 1993, as well as with the other EEA countries, thus taking advantage of the weight of its economy and its world standing on the financial and stock markets.

Are we sure that a second trade agreement with the EU would be harder than the current one for Great Britain, after the EU possibly discovering the clout of the British economy no longer subject to its regulations?

Or its ability to “do harm” to the EU countries on global markets?

In that case I think that many countries would do everything to bring Great Britain back into the EU, after the possible Brexit.

Again at commercial level – and here the Bremain supporters show to have credible arguments – if Great Britain adhered to the EEA there would be more transaction costs for British exporters to those countries, with the inevitable reintroduction of quotas and administered prices for agricultural and fishery products.

Being outside the EU, Great Britain should renegotiate – and not always from a position of strength – trade agreements both with the European Union and other 50 countries, in addition to having to renew temporary trade agreements with other 67 nations.

A situation of “economic uncertainty” which would block British companies’ decisions and investment, besides driving back a lot of capital which could be used in the British production system, as well as in its innovative finance.

However, as the Brexit supporters maintain, the time schedule may be reduced by a standardization of negotiations.

A dangerous, albeit not impossible, choice.

Moreover, if Britain were to use only the WTO for tariffs and trade, it should decide its import tariffs on its own.

Nevertheless, if Great Britain decided to maintain zero tariffs with the EU countries – which is in its own interest – it should unilaterally reduce its tariffs for imports from all the WTO members, should there be no specific preferential agreements with particular countries.

However the EU economic and political leverage vis-à-vis Great Britain is still very significant: only 8% of EU exports go to Great Britain, while over 50% of UK exports go to the EU region.

Only 3.1% of European GDP depends on exports to Great Britain, while 12.6% of the British GDP depends on trade with Europe.

But man does not live by bread alone.

Brexit is the materialization of Great Britain’s dream of a new global role, the memory of an imperial past, as well as confirmation of the fact that the British people are not, and will never be, fully Europeans and the other way round.

In these cases, we should well revise the EU Treaties and rethink the structure of the European single currency – which luckily Great Britain has not adopted – as well as create a new myth for the whole continent, including Great Britain.

This is exactly what will never happen and the EU business as usual will also destroy many of the good results the EU has achieved over the years.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Ммm is a new trend in the interaction between the EU and Turkey:”Silence is golden” or Musical chair?

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On April 6, a protocol collapse occurred during a meeting between President of Turkey R. Erdogan, President of the European Council S. Michel and head of the European Commission, Ur. von der Leyen. Let us remind you that during their meeting in the conference room she did not have enough chair, and she was forced to sit on the sofa opposite the Turkish Foreign Minister M. Çavuşoğlu, who, according to the diplomatic protocol, occupies a lower rank. This incident (a video showing the confusion of Ur. von der Leyen and her mmm sound, which was cleverly picked up by the media) quickly spread across the media and social networks. This incident provoked not only a number of high-profile comments, but also political and economic consequences for a number of countries.

This story is a double bottom box. On the one hand, there is a protocol error in the organization of the meeting between the EU and Turkey. On the other hand, there is a sharp statement by the Italian head of state about the Turkish president.

We propose to consider this case from two points of view: violation of the protocol and bilateral interaction between Italy and Turkey.

Let’s start with the protocol. Based on the general rules of the protocol, let’s honestly answer the following questions.

1) is it right for the head of state to give up a seat opposite the national flag (respect for the symbols of the state);

2) what is more important – position, diplomatic rank or gender;

3) Who should take the “EU chair” based on the political hierarchy of the Union – the head of the European Council or the European Commission?

Note that both sides – the EU and Turkey – blame each other’s protocol service. EU protocol chief Dominique Marro responded in a statement on Thursday that diplomats were not given access to the conference room in advance because, as they were told, “it was too close to Erdogan’s office.” Turkish officials have agreed to a separate request to add seating for von der Leyen during the reception, he said.

Turkey was accused of “protocol machism.” However, the officials of the protocol services of Turkey and the EU “met before the official visit of the heads, and their wishes were taken into account,” says Foreign Minister Mevlut Çavuşoğlu.

But the shifting of responsibility continues. Brussels insisted that staff were denied a final check of the press conference room. It was soon revealed that another sensational accident was threatened during the official dinner: the table was laid for 5 people on each side, and in front there were two honorary chairs, one for Michel and the other for Erdogan, while a smaller one was reserved for von der Leyen, to the right of Michel. Two diplomatic advisers accompanied Michel to the table, and von der Leyen was left alone.

Michel  was also criticized for not standing up for her. He first wrote an explanation on his Facebook page, in which he did not apologize, but presented his vision of the situation. But as things continued to escalate on Thursday, he went on to say on Belgian TV LN24: “I deeply regret the image created and the impression of a kind of disdain for the President of the European Commission and women in general.” “At that moment I was convinced that any reaction could seem paternalistic. Perhaps it was my mistake, ”he said. “In addition, there was substantial work to be done at the meeting, and I was convinced that the response would lead to a much more serious incident that would affect relations with Turkey.” An interesting commentary by J.K. Juncker, who wrote that he also often found himself on the couch (thereby making it clear that the situation was not critical). This situation could be resolved through diplomatic channels. But, unfortunately, it has received an unusual development.

Now let’s move on to a political analysis.

According to the head of the group of socialists in the European Parliament Garcia Perez Irace, the incident is related to discrimination against women in Turkey. A few weeks ago, on March 20, the president passed a decree authorizing Turkey’s withdrawal from the 2011 Istanbul Convention against Violence against Women, which obliges the governments that have joined it to pass legislation aimed at combating domestic violence. That is, the protocol error received a political color and took on a new light from the perspective of gender politics. However, one should not forget about the cultural and religious differences between the parties to the conflict. It is curious that if Michel gave up the chair to Ursula, he could be criticized from the point of view of gender equality and even, if hypertrophied, accused of sexism. It is also worth paying attention to the absence of harsh statements from the EU, which is interested in Turkey, which restrains the flow of migrants. . Yet the crisis in terms of maritime borders with Greece and Cyprus and the agreement between Israel, Greece, Egypt and Cyprus for the construction of the EastMed gas pipeline have become such important concerns for Turkish interests that in February 2020 Ankara has re-proposed the usual blackmail and once again opening the borders with Greece for Syrian migrants, provoking an immediate European reaction. Since last December, the European Commission has tried relentlessly to mend the tear, unlocking the last tranche of aid to Ankara, equal to 780 million euros of the 6 billion promised, and opening the dialogue for future billion-dollar agreements with Erdoğan in migration theme.

The behavior of M. Draghi seems even more inexplicable. The statement by the head of the Italian government M. Draghi, where he allowed himself to call Erdogan a dictator, cost the country 70 million euros of suspended contracts (the purchase of 10 helicopters from an Italian company Leonardo). In turn, Erdogan is waiting for an official apology from M. Draghi. Whatever the situation, from the point of view of etiquette and protocol, such statements by officials are perceived as inappropriate. There are now 48 large Italian private equity companies in Turkey, such as Unicredit, Generali, Mps, Fiat, Ansaldo Energia and others.On the other hand, according to representatives of Mediobanca Securities, it is unlikely that this diplomatic incident will lead to the cancellation of the contract with Turkey. Moreover, the investment bank added: “This is a relatively small contract for Leonardo: it represents 0.5% of the group’s planned ordering for 2021”, which amounts to approximately 14 billion euros.

This is not the first crisis in Italian-Turkish relations. In ’98 the Ocalan crisis, during the D’Alema government produced violent reactions and a boycott of Italian products in Turkey, however quickly overcome by the subsequent Amato government and even more so by the Berlusconi government starting from 2001. Those were the years of the great contracts for Salini Impregilo’s new bridges over the Bosphorus, for supplies by the Finmeccanica group and the purchase of local banks by Unicredit. But, between ups and downs, the history of economic relations between Rome and Ankara came from afar, from the 1960s when large Italian groups such as Fiat, Pirelli, Cementir had focused heavily on Turkey as the ideal platform to conquer new markets in the eastern Mediterranean.

In fact, the dispute between Turkey and Italy stems from tensions in Libya and the eastern Mediterranean over gas fields. And the European Union could play a key role in supporting Rome, but at the moment none of the EU representatives supported M. Draghi’s words, only Italian populist parties supported the head of state (which had also previously expressed the idea of leaving the EU).

Against the background of all the facts sounded, the behavior of the head of Italy remains the most interesting case. Non-fatal, in its essence, the protocol incident provoked a verbal dive by Draghi and Erdogan, which could cost Rome tens of millions of euros in direct economic losses. But it is not this separate fact that is interesting, but the fact that Italian politicians have recently taken a number of drastic steps and statements that have no reliable explanation. It is appropriate here to recall the spy scandal with Russian diplomats, which could be interpreted as a decrease in the level of interaction between Italy and its longtime trusted partner. Then many assumed that this was a manifestation of the “Atlanticist course” and the rapprochement with the United States of the new cabinet of ministers. But in the situation with the chair, we are talking about a conflict with one of the active members of NATO and a key ally of Washington in the region. And here Draghi’s position evokes the very remark of W. von der Leyen – “ummm” – bewilderment that runs like a red thread through the entire incident and its consequences. What is it? An attempt to show Draghi’s political subjectivity and consistency? A demonstrative rupture of the achievements and economic ties of predecessors in order to prove their independence? Agreements with Washington pending new contracts and cooperation programs and acting in line with these hopes? Or maybe just a misunderstanding of what the Italian people expect from the next prime minister and this is an attempt to find something that will cause an increase in the level of confidence on the part of the Italian political forces? In any case, there is concern that if Draghi continues in this vein, his reign may prove even more inglorious than that of many of his predecessors.

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The Man Who Warned Us First About Climate Change

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A billboard at Piccadilly Circus pays tribute to the late Prince Philip. Garry Knight/Flickr

Among the first to warn us of global warming, he used the term greenhouse gas to describe the increasing levels of CO2 in the atmosphere.  That was in the 1960s and it was dismissed as a cranky notion.  Where he lived, he had a large study lined with books which he actually read; perhaps one reason for the mushrooming of ideas.  

The story begins in Corfu, Greece where he was born.  His very prominent family was turfed out of the country and settled in France.  After early schooling, he was sent to a private boarding school in the UK.  

Founded by German-Jewish educator Kurt Hahn in 1934, Gordonstoun School was new  with new ideas when he attended.  An equal emphasis on mind and body, it challenged students mentally and physically, the latter far more than at other such private schools.  A strapping boy who was also extremely intelligent, he loved the place — later his son was to hate it.  Hahn wrote of him that he would do very well any task assigned to him.

He went on to the naval academy and finished at the top of his class, doing the same at later naval exams and becoming the youngest Lieutenant in the navy.  Given command of a ship, he ran it like clockwork but a certain lack of sensitivity to others also came through:  the crew were driven ragged and hated serving under him.  He loved the navy and always loved the sea; indeed it was a sacrifice to give up his naval career when he married but it was incompatible in his new role for his wife was a very important personage.          

Studying in England, I could not fail to notice his frequent presence on newspaper front pages, even though my own interests then did not focus on the news of the day.  He seemed to set up awards for all kinds of excellence. He wanted British industry to shine, young people to deliver their best and so on.  And of course, he was invariably presenting awards to the winners.

A sportsman, he was also out there playing polo with his team, or at equestrian meets or playing cricket at charity events, or sailing which he clearly loved.  His uncle saw India through a hurried independence and a bloody partition.  Uncle Dickie, as he was called by the royal children, was a valued presence until killed by the IRA (Irish Republican Army) in a senseless bomb attack that lost them public sympathy.  

The country’s leaders kept him busy and he was sent to numerous countries representing the queen, most often to former colonies in an era with a rash of newly independent countries.  Yes, his name was Philip, titled Prince of Greece and Denmark, and his wife was Queen Elizabeth II.  

Prince Philip’s royal bloodline (like the Queen’s) was German — Battenberg the family last name having been changed to Mountbatten during the First World War.  His sisters married Germans and remained in Germany during the Second World War.  They were not invited to his wedding to a very much in love Princess Elizabeth.  He had been the longest serving consort of any British monarch when he died a few days ago.   

Prince Philip’s travels were also notorious for gaffes and his eye for attractive females — middle class morality be damned.  A definite lacuna in sensitivity was more than evident.  Meeting a group of Nigerians resplendent in their long colorful national dress, he remarked, “Ready for bed, are we?”  to their embarrassment.

Yet, all in all, a very full life.

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Sino-Serbian relations under the “microscope”: China’s footprint In Serbia

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Over the years, the Sino-Serbian foreign relations have straightened to a very high level, with China establishing itself as a valuable ally to Serbia. Since the recognition of the People’s Republic of China in 1949 by Yugoslavia and the formal establishment of diplomatic relations between the two states in 1955, both countries have been on warm relations that soon transformed into a strategic alliance. However, this relationship has given an uneasy feeling to the political elite in the West that sees this relationship as China’s efforts to expand its influence into the Balkan region and undermine the efforts of the EU for stabilization. On the other hand, some may argue that this uneasy feeling that the West is experiencing is due to its own failures of constant neglect and poor leadership towards Serbia, which has taken action in its own hands. Can we really say that the situation in Serbia is about Chinese imperialism, or is it a case that the West failed Serbia over and over again and now sees its diplomatic failures backfiring back to them?

Sino-Serbian relations in retrospective

The relationship between both countries has always been on a warm status, but the potential for an even stronger relationship came during the 1990s in the so-called Yugoslavian Wars. The People’s Republic of China was critical against the U.S and NATO forces bombing campaign in Serbia while it supported the decisions of President Milošević, describing them as vital decisions for preserving the territorial integrity of the Federal Socialist Republic of Yugoslavia, against the Albanian separatists and the UCK (Kosovo Liberation Army) terrorists. The opposition against NATO intensified after NATO warplanes bombed the Chinese embassy in Belgrade, killing three Chinese journalists. Although the West saw it as a mistake, this gave a clear signal to Serbia and China that the Western aggression against them could provide them with the potential of rebuilding their relations in the 21st century, in something more than just strong diplomatic ties.

Under the presidency of Aleksandar Vučić, Serbia has seen closer cooperation with China, especially at an economic level. For years now, both countries have cooperated in various industries. Since 2012, Serbia has received at least $10bn of Chinese investment in the country, changing rapidly its economic profile. Serbia is also part of China’s Belt and Road Initiative, which allowed Serbia to provide an investment-friendly environment towards China without any EU regulations, making the country the largest economy in the Western Balkans. Also, China has changed the tourism industry in Serbia. Since 2017, Chinese citizens can visit Serbia visa-free. This initiative allowed the country to improve its industry with a rise of at least 36% from Chinese visitors. Also, Serbia as a hub of investments does not only concentrate on tourism. China has invested a tremendous amount of money in its infrastructure and energy sectors and projects such as the Budapest-Belgrade Railway while Chinese firms have acquired various steel plants and coal mines, such as the Smederevo steel plant and a copper mine is in Bor, east of Serbia. These actions by China have kept afloat the Serbian economy while saving more than 10.000 job positions, highlighting the reconstruction of the country and making China the most important trading partner for Serbia in the 21st century.

Politics, the pandemic, and the success of Serbia in the game of geopolitical chess

Apart from close economic ties, both countries share a common interest in the political arena. Since the 1990’s China has been a close political ally of Serbia, supporting its territorial integrity while not recognizing the pseudostate of Kosovo. On the other hand, Serbia has been supportive of China’s decisions to safeguard its interests in Hong Kong, Taiwan, and Xinjiang, agreeing with the One-China policy that the People’s Republic of China has been advocating for years. The relationship between the two countries has been seen negatively by the West, with the EU being skeptical about China’s intentions in the region. A resolution from the EU parliament on the 2019-2020 Commission report on Serbia expressed the concern over the increased economic ties between the two states, and China’s questionable investments that are lacking transparency, while also pointing out that the investors in Serbia have failed to carry out important environmental assessments. “With this behavior, Serbia, a candidate country for EU accession is jeopardizing its progress”, were the statements from the EU side, that sees the growing influence of China in the region, as a threat to its own interests. However, Serbia is not bowing to the threats of the EU, as it sees the European bloc constantly neglecting Serbia’s needs and undermining its national interests.

With the inclusion of China as a major player in the Balkans, some analysts present an interesting argument that China has overthrown the Russian Federation from the position of the most important ally of Serbia. Historically, Russia and Serbia have seen very close ties, and it’s unlikely that the inclusion of China as an ally to Serbia will jeopardize that. However, news organizations and analysts from the West found an opportunity to provide an environment of division within Serbia. Understandably, Serbia seeks to improve its position in the world, and having more than one powerful allies, especially one that has the fastest growing economy in the world, will benefit the rhetoric of Aleksandar Vučić, who has demonstrated to the Serbian public that the country has drastically changed and it has overcome the previous humiliations and mistreatment from the West. It seems that the West is terrified of the potential growth of Serbia, a country that once was brutally bombarded by U.S and NATO forces, and now has the chance to dominate the geopolitical scene in the Balkans without even being part of the EU. The country represents an open door for China in Europe, allowing the country to fully take advantage of the various infrastructure and energy projects that are presented. Serbia is building a new lasting alliance, and as much as the West wants to undermine this relationship by creating political divisions about who is the biggest ally of Serbia, they miss the big point. The country now has more allies and more influence in the Balkans and feels it’s time not to take the West seriously. For years the EU, in particular, has underestimated Serbia while showing full support for the illegitimate state of Kosovo, and portraying the country as this evil entity and abuser of human rights.

Another important parameter in the evaluation of the current situation in the world. When COVID-19 spread all over the world, we witnessed a phenomenal collapse of our daily lives, with many businesses closing and the governments around the world putting an effort to recover from the virus. Serbia, unlike other countries in Europe, had a successful vaccination campaign and managed to win the geopolitical game of chess, simply by not playing the game. For Serbia, vaccination was never a political game and that’s why they managed to deal with it better. As prime minister Ana Brnabic stated: “Whether vaccines come from China, Russia, the EU or the U.S, we don’t care, as long as they’re safe and we get them as soon as possible. For us, vaccination is a healthcare issue, not a geopolitical matter”. Just by this statement, Serbia managed to understand the dangers of politicizing the vaccines and decided to focus on the health of its citizens, effectively overcoming the growing danger of the virus.

The fight is not over yet, but unlike the EU, Serbia set its priorities straight, and in a way, revealed the failed bureaucratic system of the EU, that chooses politics over the health of its citizens. Although Serbia received both the Russian vaccine Sputnik V and the Chinese Sinopharm, analysts have focused on the importance of Chinese help. For the simple reason that the help from Russia was expected, because of the historic, cultural, and religious ties between both states. The help from China was something that shifted the balance in Serbia, and the country managed to be in a better position compared to other countries in the Balkans and the EU. Both China and Serbia made it clear from the beginning that they will support each other in these harsh times. A few months ago, the Serbian Minister of Foreign Affairs, Ivica Dačić, was in Beijing, declaring his support in any way possible to China. In his statement, he said: “You didn’t fear NATO bombs, my visit shows we’re not afraid of the virus”; again pointing out the importance of this alliance that dates years back. The EU might be skeptical about China’s intentions, but one thing is for sure; they did not provide help when needed, proving once again that European solidarity is a fairy tale.

The Chinese impact on Serbia: Voices from within the country

Although the government of Aleksandar Vučić has made it very clear to the Serbian public that foreign investments from China are a positive step towards the socio-economic transformation of the country, some people within Serbia have shared their thoughts about whether this can bring a positive or a negative impact for Serbia. Dragan Djilas, the former mayor of Belgrade and president of the Freedom & Justice Party in Serbia, expresses his criticism of the political decisions of Aleksandar Vučić. In his view, democracy in Serbia does not exist anymore, and there is only one man to blame, Aleksandar Vučić. Djilas also points out that the growing relationship with China has been transformed into a dependent, one-way relationship, where China acts as a colonizer. “China operates in Serbia, the same way it does in the continent of Africa. It seems that now we have a new Big Brother”, referring to the new status quo, where Russia is not seen as the only powerful ally that Serbia can rely on. For Mr. Djilas, this dependency on China will only jeopardize any potential ascension in the European Union. His point is shared by many within Serbia that see this dichotomy in society that wants to move more on the West yet again it makes agreements and treaties with a non-democratic and autocratic government, and it seems that Aleksandar Vučić follows the same path. “Our struggle is focused on Europe, which should finally realize that we want to establish a free and democratic society and end the denigrating process in Serbia established by Aleksandar Vučić”, were the words of Dragan Djilas, who sees China slowly overtaking his country.

On the other hand, Djordje Terek, an analyst at the Center for International Public Policy in Belgrade, does not see the involvement of China in the Western Balkans, especially in Serbia, as a new phenomenon. “China, similarly to Russia, Germany or the U.S., has its own interest in the Western Balkans region and it has been present there for a while”. If we view this statement from a realistic point of view, we can make sense of China’s intentions in Serbia being no different than the intentions of any other country that revolves around the philosophy of realpolitik. Also, there is an interesting mention of Serbia’s new role in the region, especially after the Belgrade Summit. As Terek points out: “Serbia, as a potential EU member state, was given a prominent role within China’s BRI initiative as it was demonstrated at the summit in Belgrade. It is the strategy based on the penetration into the EU market that China centralized around Belgrade. With that being said, Serbia is one of the compelling China’s attributes in the Western Balkans and Europe as well. In 2009, Serbia and China signed a strategic partnership agreement and in 2013, Serbia hosted a 16+1 summit in Belgrade where $900 billion infrastructure projects were promised to the region”.

However, although the government of Aleksandar Vučić is keen to demonstrate how China’s investments have been crucial for Serbia, the European Union is still by far the most crucial contributor in foreign direct investments, comprising at least 70% of FDI in the country. With this remark, some may argue that indeed China is an important ally to Serbia, but the EU is still around, reminding the country that it is still a pending member for EU accession. It seems that the presence of China in Serbia will only be positive if Aleksandar Vučić manages to balance both of his commitments to the EU and China. After all, Serbia still wants to be part of the European Union and not merge with the People’s Republic of China. In some final remarks, Djordje Terek thinks that if the government of Serbia wants any success to come out of this situation it needs to evaluate the situation delicately. “While Serbia has been actively pursuing EU membership, the current state of affairs tells us that Vučić uses the geopolitical window to further deviate from EU integrations, while continuously sitting on two chairs, and only time will show if that will be beneficial for Serbia”.

One other aspect of China’s involvement in Serbia, that has troubled the citizens of the country, are the environmental issues that have emerged since China’s increased investment in the steel factories and the mines in the east of the country. In the area of Bor, where a Chinese company has recently acquired the ownership of a mining facility, there have been reports of increased pollution in the area, with environmental agencies being concerned about the high levels of sulfur dioxide and arsenic in the air. Besides the air pollution issue, concerns have been raised about the water pollution of the area. Near the mining facility, in the village of Metovnica, locals have seen the impact of the mine activities, in shortage of water and water pollution. For analyst Djordje Terek, this increased pollution in the area rapidly plummeted in the last seven years, potentially making Serbia the global leader in air pollution. “The Chinese investments in the steel factory in Smederevo and the copper mine in Bor, have made the people in the area wear face masks even before the beginning of the pandemic. It seems that the ties of the Serbian government with China is on higher priority rather than the environmental damage”. The mayor of Bor, Aleksandar Milikic, quickly dismissed the allegations of environmental damage and characterized any kind of protest in the area regarding this subject as the work of political actors wishing to benefit from it. As for the people in Bor, they can see the damage to the environment, but many of them point out the positive aspect of the Chinese investments, where people can find a good-paying job at the mines. Given the absence of work in the area in recent years, these investments have more positives than negatives for them.

Whether we would look at the Chinese involvement in Serbia as a positive or a negative thing, one thing is for sure. The geopolitical profile of the country is changing, and Serbia can benefit from the increased investments in its country. However, Aleksandar Vučić must be careful how he handles the situation inside Serbia. The increased protests and the uneasy feeling of its citizens regarding the environment, should not be aspects that are overlooked by the government, Nevertheless, with the global pandemic devastating many countries in Europe and around the world, Serbia has demonstrated its will to improve the healthcare situation in the country by not focusing on the vaccine politics and as a result winning, one might say the political chess game that the West found itself playing. Only time will show if Aleksandar Vučić manages to hold on, on both the West and the East, in a rare situation where Serbia seems to have the upper hand as to how the country must advance now, trying to reshape the international image about Serbia.

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