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Trump’s election and its impact on Europe

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Authors: Daniele Scalea, Alessandro Cipri (*)

[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] I [/yt_dropcap] t is particularly difficult to foretell what the foreign policy of a US president-elect will be. We have plenty of examples of US presidents who – after coming into office – did not follow through on their electoral campaign pledges.

Even though Obama did actually conclude the agreement with Iran – as promised during his first presidential campaign – he was able to do that only in his second term, after having embittered the sanctions for years. While George W. Bush presented himself as an “isolationist” – in opposition to Bill Clinton and his humanitarian interventionism – he ended up launching two major wars in Afghanistan and Iraq, restraining from others just because of the poor-performances in these two. Richard Nixon, who won two terms on anti-communism, ended the war against the Vietnamese Communists and stroke a deal with Maoist China. Both Wilson in 1916 and Roosevelt in 1940 campaigned on an isolationist platform, just to lead their country into the first and second world war as soon as they were re-elected.

Forecasting the foreign policy stances of the upcoming administration is now even harder than with those of the past, considering that the President-Elect is not a long-time politician, and we do not even know who his Secretary of State will be. Even though a Republican-controlled Congress is certainly good for President Trump, the GOP is now bitterly divided among opposing factions, with Trump’s “populist” wing fighting an internecine war against the mainstream conservatives within the party, many of whom did not even endorse him in the general election. In fact, regardless of the success of the insurgent candidate, Congress is still filled up with Tea Partiers and establishment Republicans, potentially harboring resentment towards the rising pro-Trump hardliners. This internal conflict may well produce an hostile Congress for President Trump, especially when it comes to the most controversial points of his agenda, such as a review of foreign trade strategies towards fair trade.

So, before trying to figure out the potential consequences for Europe, let’s try to define at least some general elements of Trump’s hypothetical foreign policy.

•             First of all, Trump has outlined a non-interventionist policy: no more wars for state-building or regime change. He want to spend less in military intervention and more in military supremacy, which means more R&D and less operational costs. This would imply sharing responsibilities with US allies, as well as leaving them more strategic freedom in and the pursuit of their particular interests.

•             He also wants to normalize relations with Russia, that have reached the bottom on Ukraine and Syria. He thinks that NATO is too expensive for Washington, whereas European allies are acting as free riders . NATO is the 28-nations – almost 70-years old – military alliance that unites US, Canada and Europe. Conceived as defensive alliance against USSR, experienced a consistend expansion of its membership in the years following the end of the Cold War, welcoming many former communist Eastern European countries; at the same time, it switched its focus from European defense out-of-area operations. Those are offensive military operations such as in Yugoslavia and Serbia, during the ‘90, or in Afghanistan, Iraq, Libya and the Gulf of Aden in last fifteen years. However – since the Ukrainian crisis – NATO is redirecting its resources to the defense of its Eastern border, along an arc of tension with Russia ranging from the Arctic to Syria.

•             The July 2015 nuclear deal with Iran (the JCPOA), strongly wanted by President Obama, has been harshly criticized by Trump. Under this deal, Iran agreed to eliminate its stockpile of medium-enriched uranium, cut its stockpile of low-enriched uranium by 98%, and reduce by about two-thirds the number of its gas centrifuges for 13 years. For the next 15 years, Iran will only enrich uranium up to 3.67%. The main criticism on this deal is that the Iranian nuclear programme is suspended, rather than aborted, and in the meantime the Islamic Republic could be strengthened by the lifting of sanctions while keeping a regional stance opposed to the US. It is unlikely that Trump will reject the agreement as a whole, since that would require to negotiate a new one (and many years were needed for the current) or to come back to direct confrontation with Iran, which would mean major efforts in the Middle East for Washington – something Trump wants to avoid. So, the most probable outcome could be that the US introduces new extra verification measures of Tehran’s compliance of the Agreement, and promptly withdraws from it if any violation is observed.

•             Trump is a vocal opponent of international free trade agreements, such as the North America Free Trade Agreement (NAFTA), the Transatlantic Trade and Investement Partnership (TTIP), and the Trans-Pacific Partnership (TTP), seen as factors of de-industrialization and industrial outsourcing, especially in China and Mexico.

Assuming that these vectors remain sound and Trump Administration manages to implement them at least in part, we could try to forecast some effects on Europe.

First, we have to consider that major European NATO members have been reducing their defence spending since the end of the Cold War. Not considering the US, it is only since 2015 that NATO defence expenditures are growing, as a consequence of Russian assertiveness in Eastern Europe. NATO guideline is to spend 2% of the GDP for Defence but, in recent years, only 3 out of 28 members follow this rule: United States (currently spending 3.61% of the GDP), United Kingdom (2.21%), and – surprisingly – Greece (2.38%). Greek good will, which is not diminishing but even increasing under Prime Minister Alexis Tsipras, is due to Athen’s dependance on foreign loans, sometimes informally swapped with arms purchasing. Since 2015, two more countries abide by the 2% rule: Estonia and Poland. No wonder, since they are the most anti-Russian countries in NATO and the most vocal supporters of a military buildup on its Eastern border.

Anyway, all that said, the remaining 23 members out of 28 spend for defence less than the recommended 2%: for example France 1.78%, Turkey 1.56%, Germany 1.19%, Italy 1.11%, Spain 0.91%. Since 2012, the US alone spends yearly more than all European allies altogether. Moreover, the limited improvement this year is due to the build-up on the Russian border – a military build-up that Trump will probably do not go along with.

It is highly improbable that Trump wants to dismantle NATO and – even if this was the case – it would be almost impossible for President Trump to realize it without facing insuperable obstacles. Most probably, Trump will just follow on Obama’s path in trying to lead from behind – just avoiding to mess up with Russia again. The theory of “leading from behind” arose in business circles, with Linda Hill of the Harvard Business School acknowledged as its mother. In foreign policy, it means to encourage others to take the initiative, while quietly establishing the strategy and leading the game. This, however, is a delicate art, because is a very short step from leading from behind to be led from the front.

About Obama’s doctrine, Charles Krauthammer wrote on The Washington Post: “It’s been a foreign policy of hesitation, delay and indecision, marked by plaintive appeals to the (fictional) international community to do what only America can”.

The experience of Libya in 2011 isn’t indeed comforting, with the UK and France pressing for a military intervention against the Gaddafi regime, only to leave afterwards a country broken into pieces and exposed to Islamist infiltration, even by ISIS.

But that’s not solely Europe’s fault, nor it is completely US’ fault: the responsibility is on the West as a whole, as London and Paris messed up Libya, like the US had messed up Iraq before, while our Arab allies are messing up Syria. Consequences are evident: with the treat of al-Qaida doubled up by ISIS, a lot of states in the region are either failed or on the verge of failing, Europe is under pressure from terrorist attacks and from an unprecedented flow of immigrants, with those two factors giving a huge contribution to Brexit and other displays of popular distrust towards the European establishment and institutions.

That’s why I think that the new line dictated by Trump – although challenging – will be positive for Europe We are facing problems that cannot be resolved without Russia’s help, not to say with Russia’s enmity. Think about the Syrian conundrum: a major Arab state has collapsed, and very hardly could be recomposed after five years of savage civil, ethnic and religious war, in which interests of many regional and world powers conflicted one another. Tensions in Eastern Europe compel both Russia and NATO to increase military expenditures, while mutual sanctions are harming both economies.

Even though the European establishment is complaining about Trump’s stance on Russia and the mutual exchange of compliments between him and President Putin, we have to keep in mind that it was the United States to push for a confrontation with Russia, while many EU countries – such as Italy – were in favor of improving relations with it.

In fact, Italo-Russian relations have been free from critical issues since the Soviet-Yugoslav “separation” in 1948 and, even though Italy was part of the Western bloc, it often kept pushing for an improvement in its relations with the USSR.

A few years after the end of the Second World War, Manlio Brosio – then Italian ambassador in Moscow (and future NATO Secretary General – looked for Soviet support for his project of a neutral Italy, but failed in his attempt. Ten years later, politicians such as Amintore Fanfani, or public managers such as Enrico Mattei, launched the “New Atlantism” doctrine, according to which

– while remaining loyal to the west – Italy would act independently, seeking friendly relations with Communist and Mediterranean countries. After the end of the Cold War, Italy has always been one of the warmest supporters of cooperation with Russia, especially during the government of Silvio Berlusconi, whose friendship with Putin was well-known. In 2002, during a meeting presided by Berlusconi in Pratica di Mare, Russia and NATO signed an historical cooperation agreement.

This agreement could well be the starting point for a new approach to collective security in Europe: one that seeks to engage, rather than confront Russia.

However, not everyone in Europe will agree, especially among the Eastern countries such as Poland, Estonia, Latvia, Lithuania, Romania or Hungary that – still recalling the period of Soviet domination – mistrust the Russians. It is true, anyway, that recent elections in Moldova and Bulgaria, both former Communist states, have witnessed the victory of Russia-friendly candidates. Those Eastern countries are also very conservative and suspicious of pro-immigration and liberal policies of Western Europe. In the mid- long-term, this factor could orient them towards Russia again.

Great Britain – a traditional rival of Russia – has in recent years led the front of anti-Russian countries opposed to a lifting of sanctions. But now that London seems next to leave the EU, and considering that the British usually follow a line dictated in Washington, it could be well possible that their stance towards Russia will soften a lot.

A major obstacle remains in Germany, where the German social-democratic party – relatively pro-Russian, for west-European standards ¬– is going through a difficult time. Power is still strongly in the hands of the Christian-democrats and especially of Angela Merkel, who is toying with the idea of assert herself as the new leader of a liberal Western front, opposed to both Trump and Putin. Apart from her mania of grandeur, she is also following the objective national interests of Germany: the great winner of the process of European integration. Free trade, combined with a common currency (and so the inability for competitors, such as Italy, to conduct a competitive devaluation) have given Germany the economic dominance in the European Union. If Russia wants to move forward her influence in Eastern Europe, it has to confront face German opposition.

However, regardless of Russia’s intentions, confrontation with Berlin may be inevitable, with the Germans pushing to expand their own influence in Belarus, Ukraine, and the Caucasus.

Another major obstacle to a Russia-West rapprochement is still the US: while Iit is true that Trump wants friendship, he could do that also through some minor concessions, such as a limited area of influence in the so-called Near Abroad, as Russians call the former Soviet countries with whom they still have critical security links. Trump is as famous to be a tough negotiator, as Putin is to be astute politician and, despite their good intentions, it is not guaranteed that they will find an agreement – because a very big deal it is required between Russia and the US.

Another side of Trump’s program concerns energy, where he promises to encourage the production of shale oil and gas, which is now limited by environmentalist legislation. Over the past decade, the combination of horizontal drilling and hydraulic fracturing has provided access to large volumes of oil and natural gas that were previously uneconomic to produce. The United States has approximately 610 trillion cubic feet of technically recoverable shale natural gas resources and 59 billion barrels of technically recoverable tight oil resources. As a result, the United States is ranked second globally after Russia in shale oil resources and is ranked fourth globally after China, Argentina and Algeria in shale natural gas resources. But the tight oil and shale gas industries in the US have been suffering, mainly because of the increasing production from the Gulf states that, lowering prices, is pumping it out of business.

While in late in 2014 there were almost two thousands oil and gas rigs active in the US, in last July only 500 were still operating. Even though Trump cannot fully control some market fundamentals, as a large oversupply and sluggish demand, after his election U.S. shale producers are redeploying cash, rigs and workers, cautiously confident the energy sector has turned a corner. According to Ambrose Evans-Pritchard, the OPEC cartel is poised to slash crude output, with an agreement struck in September by the Saudis and Russians to cooperate in the world oil markets. If all signs are true, prices could well go up in the upcoming months, giving oxygen to the US industry.

Trump’s victory also brings back on the agenda the Keystone XL oil pipeline from Canada to the US Gulf Coast (where many refineries are located): a project blocked by Obama on the ground of its impact on the environment. The main target of the Keystone pipeline is to replace imports of heavy oil-sand crude from Venezuela with more reliable Canadian heavy oil, even though a good portion of the oil that will gush down the KXL will probably end up being sold on the international market.

Now, under the Trump Administration both US and Canadian oil & gas could arrive in greater amount to Europe: a net importer of energy, especially from Russia, which counts for 29% of total solid fuels imports, 30% of oil and 37% of gas. For years now Washington and Bruxelles have been trying to reduce European dependency from Russian energy, worried that this can translate in political dependency. In late February, the U.S. started exporting oil and gas to Europe, 40 years after the oil embargo imposed by the U.S. Congress.

Let’s move now to the Middle East and North Africa. As said before, the situation there is tragic and the West carries some responsibilities for contributing to open the Pandora’s box of regional contradictions, intervening in countries such as Iraq, Libya, and Syria to replace a brutal political order with no order at all.

If the US disengages from the region, however, the risk is to barter the restraint from reckless “adventures” overseas with an overall loss of initiative on the international scenario, with Europe unable to afford more military and security burdens, because of a contentious public opinion and of a very difficult time for economy. Without the US, therefore, it is very likely that also Europe will disengage from North Africa and the Middle East.

Anyway, at least for now, America is not going away from the region anytime soon, especially considering the emphasis that Trump put on ISIS’ global threat during the campaign trail. According to the upcoming National Security Adviser, General Michael Flynn, Islamic radicalism is the enemy number one for the US. This will translate in a solid partnership with secular Arab leaders such as Egypt’s al-Sisi, whereas is still unclear how the Trump Administration will deal with Erdogan or the Saudis, whose links with Islamic radicalism are very suspicious.

Gen. Flynn believes the US is losing a global war against Islamist extremism that may last for generations, but he stresses that this war has to be fought also domestically, against any ideological infiltration. Trump and Flynn want to go after Islamism as Americans used to do with Communism. That brings us back to Europe again. Whereas only 1% of the US population is Muslim, Islam is thriving in Europe, due to ongoing immigration and to the higher fertility rate of Muslim communities, which is of 2.2 children per woman, while that of non-Muslim is 1.5. According to the Pew Center, Europe’s Muslim population is projected to increase by 63%, growing from 43 million in 2010 to 71 million in 2050, becoming more than 10% of the total population. Anyway, in countries such as France, they already are almost 10% of the population and, In some key cities – Paris and London, for example – Muslims exceed 15%. As it is well known, Europe is facing big problems in integrating even second or third generations of immigrants, especially Muslims. Muslim vote is beginning to matter in many European countries and important Muslim politicians are emerging, such as Sadiq Khan, the Mayor of London, or Rachida Dati, former French Minister of Justice, or Sajid Javid, the British Secretary for Local Government. Only the former is by a leftist party and they are not suspicious of Islamism. Anyway, according to the 2014 Jenkins Commission Report, in the UK the Muslim Brotherhood “[has] at times had significant influence on the largest UK Muslim student organisation, national organisations which have claimed to represent Muslim communities (and on that basis have sought and had a dialogue with Government), charities and some mosques”.

If the Trump Administration is going to consider Political Islam as an ideological enemy – such Communism during the Cold War – it will likely work on barring its way in Europe. The US has a long history of interfering in European domestic politics and Trump has already given a taste by meeting Nigel Farage a few days after his victory in the election. It could well be that the Trump Administration will try to advise the Western European leadership against persisting in their open doors policy toward Muslim immigrants, or to favour those political forces more akin with its ideas: usually the Right, maybe also the anti-globalist one, as the National Front in France, UKIP in UK, the Northern League in Italy, AfD in Germany. The leaders of all these forces, plus the Hungarian President Viktor Orban, in fact rejoiced at Trump’s victory. Breitbart, the news website which spearheaded Trump campaign and from whom the new White House Chief Strategist Steve Bannon comes from, already has a London bureau, but is now planning to open new branches in France and Germany.

A few days ago, Francois Fillon has surprisingly won the the Right primaries in France. The hardliner among main candidates, Fillon is pro-Russian, very conservative, quite Thatcherist, and unfavourable to mass immigration. Very probably he will compete for the presidency with the far-rightist Marine Le Pen.

Even if society in the US remains very different from that of Europe, the rampant globalization of recent decades has made it quite close compared to half a century ago. Both the US and Europe have experienced massive deindustrialization with a geographical concentration of the remaining high-tech industries in a few islands of happiness – whose wealth is striking, when compared to the many rust belts of the Western world. Both the US and Europe have seen a deep financialization of their economies and have been overwhelmed by the so-called politically correct way of thinking. It’s true: in the U.S. you can find also the Bible Belt, but if we consider the European Union as a whole, we could see a Catholic Belt in its Eastern countries, opposed to Sweden (a European California) or London and Paris (European New Yorks), or in general the more liberal Western countries. Exactly as in the US, also in Europe, post-modernism is currently hegemonic in colleges and mainstream media, which are trying to inculcate it also in the common man. Finally, the massive immigration flows of last decades into Europe are making its society more and more resembling to the composite ethnic mix of North American society – even in the trend towards communitarian vote. According to reliable statistics, the last time white voters in the US favoured in majority a democratic presidential candidate was in 1964: Lyndon Johnson. Since then, Carter, Clinton and Obama won the elections thanks to the decisive vote of minorities. If you look to the Brexit vote, for example, you will find out that the social group more favourable to remain in the European Union were not Scottish nor Irish, but the new minorities: Asians, Blacks and Muslims. In such similar environments, it is predictable to find similar political trends and demands: Trump’s victory in the US may be soon followed by populist successes in Europe.

In conclusion, we can say that, regardless of his real actions once in office, Donald Trump is already influencing European politics by encouraging the already rampant rightist and populist parties. This will translate in more regulation of the immigration flows, abatement of the EU supranational power on European countries, and better relations with Russia. That is true even if those populist forces do not win any election: in fact, more traditional parties and politicians are compelled to adopt at least some of their requests not to lose approval and power. But, if President Trump will maintain his electoral promises, even greater changes are looming in Western politics and society . A lasting conservative and populist turn could affect the Western system, leading to a possible inclusion of Russia into it.


(*) ALESSANDRO CIPRI
Born in Chile and raised in Rome, Alessandro Cipri has just finished his postgraduate studies at the department of War Studies of King’s College London, graduating with distinction from the Master’s Degree in “Intelligence and International Security”. Having served in the Italian Army’s “Alpini” mountain troops, he has a keen interest in national security, military strategy, insurgency theory, and terrorism studies. His Master’s dissertation was on the impact of drug trafficking on the evolution of the Colombian FARC.

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The French Dispatch: The Year 2022 and European Security

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2021 has been rich in negative events for European security: the world has witnessed the collapse of the Open Skies Treaty, American-French discord concerning AUKUS, the termination of the official dialogue between Russia and NATO, and the migration crisis on the Polish-Belarusian border.

Over the past year, the Western countries seem to have been searching for new strategies. Since the end of 2019, NATO has been developing a new concept, and in June 2021 at the summit in Brussels, to the displeasure of sceptics, it was possible to agree on its basis—the transatlantic agenda NATO 2030 (# NATO2030) . While the broad formulations and a direct hierarchy of threats still require clarification, new projects in the field of weapons development, combating climate change, and increasing interoperability have already been declared.

In parallel, since the end of 2020, work has continued on the EU European Parliamentary Research Service project—the Strategic Compass. The dialectic between Atlanticism and Europeanism softened after Joe Biden came to power in the United States, but the European interests and red lines retain their significance for transatlantic relations. In 2022, together with the rotating post of the President of the EU Council, the role of a potential newsmaker in this area has been transferred to Emmanuel Macron, who feels very comfortable in it.

On December 9, the provisions of the Paris programme were published under the motto “Recovery, power, belonging” France, as expected, is reiterating its call for strengthening European sovereignty. The rhetoric of the document and its author is genuine textbook-realism. But now for the entire European Union.

Objectives of the French Presidency, are not articulated directly but are quite visible—making the EU more manageable and accountable to its members, with new general rules to strengthen mobilisation potential, and improve the EU’s competitiveness and security in a world of growing challenges.

Paris proposes reforming the Schengen area and tightening immigration legislation—a painful point for the EU since 2015, which has become aggravated again in recent months. This ambitious task has become slightly more realistic since Angela Merkel’s retirement in Germany. At least a new crisis response mechanism on this issue can be successful, even if it is not fully implemented.

In addition, the Élysée Palace calls on colleagues to revise the budget deficit ceilings of the Maastricht era to overcome the consequences of the pandemic and finally introduce a carbon tax at the EU borders. The latter allows for a new source of income and provides additional accountability for the implementation of the “green” goals by member countries.

The planned acceleration of the adoption of the Digital Markets Act (DMA) and Digital Services Act (DSA), developed by the European Commission at the end of 2020, is also aimed at unifying the general legislation and consolidating the European position in the world. In other words, the French Foreign Ministry quite soberly assesses the priority areas and vulnerabilities of the European Union and focuses on them, but with one exception.

A special priority of the French presidency is to strengthen the defence capabilities of the EU. On the sidelines, the French diplomats note that the adoption of the Strategic Compass in the spring of 2022, as originally planned, is a fundamental task, since otherwise the process may be completely buried. With a high degree of probability, this is so: the first phase of the development of the Compass—the general list of threats—lasted a year, and consisted of dozens of sessions, meetings, round tables with the involvement of leading experts, but the document was never published. If Macron won’t do it, then who will?

As the main ideologist and staunchest supporter of the EU’s “strategic autonomy”, the French president has been trying for five years to mobilise others for self-sufficiency in the security sphere. With his direct participation, not only the Mechanism of Permanent Structured Cooperation (PESCO) in the defence area was launched, where France is the leader in a number of projects, but also the so-far failed European Intervention Initiative. Even without focusing on French foreign policy traditions and ambitions, the country remains a major European arms exporter and a nuclear power, where the military-industrial complex is closely affiliated with the state.

Implementing the 2022 agenda is also a matter of immediate political gain as France enters a new electoral cycle. The EU Summit will take place on March 10-11, 2022, in Paris, a month before the elections, and in any case it will become part of the election campaign and a test for the reputation of the current leader. Macron has not yet officially announced his participation in the presidential race, but he is actively engaged in self-promotion, because right-wing politicians espousing different degrees of radicalism are ready to take advantage of his defeats to purchase extra points.

The search for allies seems to be of key importance for victory at the European level, and the French Foreign Ministry has already begun working on this matter. In 2016–2017 the launch of new initiatives was predetermined by the support of Germany and the Central and East European countries. The change of cabinet in Germany will undoubtedly have an impact on the nation’s policy. On the one hand, following the results of the first visit of the new Chancellor Olaf Scholz to Paris on December 10, the parties announced the closeness of their positions and a common desire to strengthen Europe. On the other hand, the coalition of Social Democrats (SDP) was made up with the Greens and Free Democrats (FDP) who are not at all supporters of excessive involvement in security issues. What “strategic autonomy” means for France, constitutes a more restrained “strategic sovereignty” for Germany Therefore, an intensification of dialogue with Italy and Spain, which are both respected and potentially sympathetic, is likely. The military cooperation agreement concluded in the autumn of 2021 with Greece, an active member of PESCO, can also help Paris.

Gaining support from smaller countries is more challenging. Although the European project is not an alternative to the transatlantic one, the formation of a common list of threats is a primary task and problem for NATO as well. As mentioned above, it is around it that controversy evolves, because the hierarchy determines the distribution of material resources. The countries of Eastern Europe, which assume that it is necessary to confront Russia but lack the resources to do so, will act as natural opponents of the French initiatives in the EU, while Paris, Rome and Madrid will oppose them and the United States in the transatlantic dialogue. The complexity of combining two conversations about the same thing with a slightly different composition of participants raises the bar for Emmanuel Macron. His stakes are high. The mobilisation of the Élysée Palace’s foreign policy is one of the most interesting subjects to watch in the year 2022.

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Unilateral vs Bilateral Euroisation: Political, technical and practical issues in the curious case of north Cyprus

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The island of Cyprus has been split between a Greek Cypriot south and a Turkish Cypriot north since 1974. The Turkish Cypriot state declared in the north is recognised only by Turkey, while the Republic of Cyprus in the south is recognised internationally and is a European Union (EU) member since 2004. In 2004, 65 percent of Turkish Cypriots voted in favor of the United Nations’ Annan Plan for reunification only for Greek Cypriots to reject it. As a result, Cyprus joined the EU as a de facto divided island. Despite joining the EU as a divided island, the whole of Cyprus is considered an EU territory. However, the EU law is suspended in the north until reunification is achieved.

This resulted in the euro being the legal tender only in the southern part of the island. With the recent and continuous depreciation of the Turkish lira, the long-standing question of whether and how the north could switch to the euro has once again intensified. While a bilateral adoption of the euro is not on the cards until a reunification on the island, north Cyprus could technically unilaterally adopt the euro. However this could cause complications in the future as the EU is adamant that unilateral euroisation cannot be used as a mechanism by Member States to circumvent the stages foreseen by the Maastricht Treaty.

Under normal circumstances, “Member States with a derogation”, i.e. the Member States that have not yet fulfilled the necessary conditions for the adoption of the euro are first required to enter the Exchange Rate Mechanism (ERM II) to achieve eurozone membership. This is a “waiting room” where any country aspiring to adopt the euro is required to stay for at least for two years. It is now a well-known fact that the ECB shares the opinion of the Economic and Financial Affairs Council (ECOFIN), i.e. the meeting of the finance ministers of EU Member States adopted in 2000, that this requirement should not be waived. Assuming the northern part of Cyprus is considered a Member State, the same principle will apply and therefore it would not be welcome to adopt the euro unilaterally, bypassing the convergence process foreseen by the Treaty for the adoption of the euro.

Currently, ERM II comprises the currencies of Bulgaria, Croatia and Denmark. Just like these countries, north Cyprus would be expected to peg its national currency to the euro and, given the consent of the European System of Central Banks, fixe a “central exchange rate” and a “deviation margin” under Exchange Rate Mechanism (ERM II) for a duration of no less than two years. If successful based on its ERM II performance, a final exchange rate would be determined and the redenomination would be done over a transition period. 

In the case of north Cyprus, it is understood that the EU might have already agreed to apply a fast track approach where there would be a one-year transition period. However, this has not been confirmed officially by the EU so the EU’s stance in practice is not known. After all, even Denmark, a Member State which has negotiated an opt-out arrangement before the adoption of the Maastricht Treaty has been participating in ERM II although it chose not to adopt the euro. So the EU’s approach in the case of northern Cyprus would not expected to be too lenient. There is no way to find out unless north Cyprus continues the dialogue with the EU.

In the meantime, a more relevant question is whether a unilateral euroisation could be possible. The short answer is yes. For instance the euro was introduced in Kosovo and Montenegro that did not have a status of a sovereign state at the time. In both cases, the decision was made in 1999. Kosovo, defined the Deutsche Mark as the designated currency, which was replaced by the euro in 2002. Similarly, Montenegro introduced a parallel currency system in 1999, in which the Deutsche Mark was allowed to circulate alongside the then legal tender. In 2001, the Deutsche Mark became the only legal tender and was replaced by the euro in June 2002.

In the case of Montenegro, now an official EU candidate, the adoption of the euro without an agreement with the European Central Bank (ECB) was acknowledged by the European Commission as a measure which had to be taken due to “extraordinary circumstances” present in the country at the time. This could be precedent for north Cyprus. However, it is important to note that the ECB still supports the view that unilateral euroisation is not compatible with the Maastricht Treaty and cannot be a way to bypass the convergence process.

The implications of the Treaty framework for in the case of Montenegro currently remain unknown and are expected to be detailed “by the time of possible future negotiations for accession to the EU”. In particular it remains uncertain whether the country would be required to introduce its own currency before it can join ERM II. Should this be the case as Montenegro makes further progress towards EU membership, this would entail substantial operational and changeover costs. Authorities in north Cyprus, should therefore monitor the developments very closely.

Normally, non-euro area Member States are denied the option of unilateral euroization due the principle of equality, i.e. the EU considers bypassing the convergence process incompatible with the EU Treaty and actively discourages it.In particular, the Treaty sets out that there has to be a Community assessment of the fulfilment of these criteria and mutual agreement on the appropriate exchange rates. This means that the ECB does not welcome unilateral euroisation, as such an adoption of the euro outside the Treaty process would run counter to the underlying economic reasoning of European Monetary Union.

However, as north Cyprus is already an EU territory the adoption of the euro could be considered a “common interest of the EU” and therefore an exception could be possible. In fact, the policy of the EU with regard to the Turkish Cypriot community which was set out by the General Affairs Council in 2004 states that “the Council is determined to…facilitate the reunification of Cyprus by encouraging the economic development of the Turkish Cypriot community”. So in the case of north Cyprus, a switch to the euro could be allowed by way of exception although this would obviously imply circumventing the process of multilateral assessment by the EU Member States.

While the EU could give the green light to adoption of the euro by north Cyprus without a successful exchange-rate procedure under ERM II, it would not allow this to undermine the process of convergence prior to the adoption of the euro. In other words, the Convergence criteria outlined in the Maastricht Treaty would still remain relevant and important as the Treaty requires Member States to achieve a high degree of sustainable economic convergence before they can join the euro area.

In other words the economies of Member States with a derogation must be able to keep pace with those already using the euro. Exchange rate stability, for instance, is evaluated by assessing whether the exchange rate of the country’s currency has remained within the fluctuation bands provided for by ERM II for at least two years without devaluating against the euro.

Besides exchange rate stability, the convergence criteria also include price stability, sound public finances, and convergence in long-term interest rates. This means, for instance, that a country’s long-term interest rate, measured on the basis of long-term government bonds or comparable securities, should not exceed that of the three best-performing Member States in terms of price stability by more than 2 percentage points during the one-year observation period prior to the assessment.   

On the other hand, a country is considered to meet the price stability criterion if its average inflation rate does not exceed the inflation rate of the three best-performing EU Member States by more than 1.5 percentage points during a one-year observation period. These criteria are intended to ensure the sustainability of public finances and that the government is able to manage its debts.

Article 140 (1) of the Treaty on the Functioning of the European Union (TFEU) requires the European Commission (EC) and the European Central Bank (ECB) to report to the Council, at least once every two years, or at the request of a Member State with a derogation on the progress of the country in fulfilling their obligations regarding the achievement of economic and monetary union. In addition to preparing these “Convergence Reports”, both the ECB and the Commission regularly monitor progress throughout the year.

A Convergence Report is normally published at least once every two years or at the request of an EU Member State which would like to join the euro area. Both the ECB and the European Commission issue these reports describing the progress made by non-euro area Member States towards achieving the criteria necessary for a country to adopt the euro. According to the latest report, among countries legally committed to adopting the euro, Croatia and Sweden fulfil the price stability criterion, Bulgaria, Czechia, Croatia, Hungary, Poland and Sweden fulfil the criterion on public finances, Bulgaria, Czechia, Croatia, Hungary, Poland and Sweden fulfil the long-term interest rate criterion. However none of them meet all the requirements for adoption of the euro. So convergence process is very strict and challenging.

In particular, it should be noted that convergence must be sustainable, meaning that satisfying the economic convergence criteria at one point in time is not enough and they are expected to be met on a lasting basis. A Member State’s general financial position is considered sustainable based on two criteria, namely, the government’s annual fiscal deficit should not exceed 3% of gross domestic product, and overall government should not exceed 60% of gross domestic product. This is very important for northern Cyprus as it will need to ensure that its economy is resilient.

It is known that the Maastricht Treaty provides some flexibility and the final assessment depends on the ECOFIN Council. Whether and how this would apply in the case of northern Cyprus remains a mystery. While details remain unknown to the public, the one-year transition period envisaged in the case of northern Cyprus could be related this. However, it should be noted that the decision on whether north Cyprus can adopt the euro would ultimately be a political one and would lie with the Council of the European Union. This means that representatives from all EU countries would be required to take a decision based on a proposal by the EC and after consulting the European Parliament.

Given that participation in the ERM II is a precondition for as well as fulfilment of the nominal convergence criteria to join the euro, it is binding and is unlikely to be waived for any country regardless of any special circumstances. This is because ERM II provides the framework to manage the exchange rates between EU currencies, which is necessary for exchange rate stability. As such north Cyprus would be expected to participate in the mechanism without devaluing its central rate against the euro before it can qualify to adopt the euro.

While no provision of the EU Treaty states explicitly that Member States with a derogation must have their own currency, the Treaty is by and large based on this assumption. In addition, the entry into ERM II is decided by mutual agreement of all ERM II parties, which consist of the ministers of the euro area Member States, the President of the ECB and the minister and the central bank governor of Denmark, as the only non-euro area Member State currently participating in the mechanism.

So in the case of north Cyprus adoption of the euro could mean that the country should first introduce its own currency. This could be a more viable alternative and north Cyprus could then peg its currency to the euro as a preparation for an eventual switch to the euro. Indeed, some countries joined ERM II with their preexisting currency pegs. To give a recent example, the currencies of Bulgaria and Croatia were already closely tied to the euro at the time of applying to the ERM II. Bulgaria had a currency board, first with the Deutsche Mark, and subsequently with the euro after 1999. Croatia had a peg first with the Deutsche Mark, and from 1999 to the euro, with a narrow band.

During this process, legal requirements should not also been underestimated. Article 140(1) of TFEU requires the convergence reports to assess the compatibility of national legislation, including the statutes of the national central bank and the Statute of the European System of Central Banks and of the ECB. There could also be additional unprecedented requirements and countries may be required to commit to implementing specific policy measures on a variety of topics. For instance, in the case of Bulgaria and Croatia, such requirements range from the anti-money laundering framework, state-owned enterprises and the insolvency framework, to the non-banking financial sector, corruption and even organised crime. It is highly unlikely that the national legislation in north Cyprus is currently compatible with that of the EU as the latest convergence report suggests that the respective national legislations in none of the seven new EU Member States would be deemed “fully compatible” with the exception of Croatia.

In fact, the former north Cyprus President Mustafa Akıncı himself had confessed that “serious work” would needed to ensure the harmonization of the national institutions with the EU acquis. As can be seen in the case of Croatia and Bulgaria, this has now become a prerequisite not only for joining the EU but also in terms of adopting the euro as a new Member State. For instance, this was the main reason behind the delay in Bulgaria’s acceptance to ERM II. Bulgaria was able to get the green light to join ERM II two years after it formally announced its intention to join the mechanism.

The delay was due to the requirement imposed by the Eurozone governments requiring Bulgaria to join ERM II and the Banking Union simultaneously. This prerequisite is known as “the Cooperation Decision” and requires Member States which adopt the euro to also participate in the Banking Union, i.e. the Single Supervisory Mechanism (SSM), the Single Resolution Mechanism (SRM) and the Single Resolution Fund (SRF). . Therefore, participating in ERM II with a view to later adopting the euro will also involve preparing for joining the Banking Union.

This requirement will now apply to all future candidates including north Cyprus. However, it should also be noted that the procedure for entering the Banking Union is separate from the assessment of the convergence criteria. Joining the Banking Union is irreversible and involves direct powers of the SSM and the SRM over its banking system. This has important implications for the banking sector as banks that will come under the direct supervision of the ECB will also be subject to the direct supervision of the Single Resolution Board (SRB).

To be more specific, this means that, the ECB will become responsible for the direct supervision of the significant credit institutions following the “significance assessment process”. This applies to banks considered to meet the “materiality criteria” as set out in the SSM Regulation (Regulation 1024/2013) and the SSM Framework Regulation (Regulation 468/2014). The criteria include “economic importance for the country” so could technically apply to banks in north Cyprus despite their insignificant sizes in comparison to the EU economy. Therefore, for new joiners like north Cyprus the accession process would involve not only the harmonization with the aquis but also the strengthening of their institutions and administrative capacity that will enable them to implement and monitor the enforcement of the harmonized legislation.

Therefore, adoption of the euro by north Cyprus, bilaterally or unilaterally, would not be as easy as it may look. More than anything else, this would require political will, courage and determination. The former President Mustafa Akıncı, a devoted supporter of a federal solution and the EU, had set an ambitious target of the euro going into circulation “from the first day” in the case of a reunification. However with the failure of the last reunification talks in 2017 in Crans Montana, Switzerland, political conditions have changed dramatically. The current President Ersin Tatar who is a very passionate proponent of the two-state solution is wholeheartedly against the EU and the euro. Therefore, the general stance towards the adoption of the euro in the northern part of the island remains fragmented. Given these circumstances, adoption of the euro in north Cyprus seems a distant prospect.

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Europe

How Red Are the EU’s ‘Greens’?

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Blood-red. But that’s a banned fact. (It will be documented in what follows.)

Here are the announced values (the “Guiding Principles”) of the European Green Party:

“Environmental Responsibility”

“Freedom through Self-Determination”

“Extending Justice”

“Diversity, an Indispensable Condition”

“Non-Violence”

“To sum it up, Sustainable Development”

This “Charter of the European Greens” fills-in those blanks by stringing together clichés, which 90% of the pubic will like, because they’re written so as to avoid (as much as possible) saying anything that’s broadly controversial. For example, “Our answer is sustainable development, which integrates environmental, social and economic objectives for the benefit of all.” (Oh? And how is that pap to be realized in actual policies? What are the measures, and the precise priority-rankings, when any of those values conflict with one-another, which is often?) The Green Party is simply conning liberals, but what is their reality? What are they actually doing, when in power? Inside their own country, and in the EU? Let’s take a very concrete (but broadly representative) case:

Germany, as I recently pointed out, is so corrupt that it has virtually no bans on who or what may donate to politicians. Foreign interests can donate, corporations can donate, even corporations that have government contracts (sell to the government) can donate, donations needn’t go through the banking system, donations may be accepted in any amount, anonymous donations are acceptable, etc. It’s super-libertarian. It is open-sesame to billionaires and centi-millionaires (the few people who have the most money) to control the Government by means of their ‘news’-media persuading the voters, and by means of political campaign donations to present the billionaires’ favored candidates’ viewpoints in the most favorable way — and their least-favored candidates in the least favorable way. It’s control by dollars, instead of control by voters. That’s libertarianism.

A March 2015 academic study showed that, of all 28 EU member-nations, the only five that were more corrupt than Germany were Malta, Austria, Denmark, Ireland, and Netherlands. Then, on 10 June 2015, a Pew survey in Germany, Poland, Spain, France, Italy, UK, U.S., and Canada, showed that, among those 8 countries, ONLY Germany (and by a big margin: 57% to 36%) opposed Ukraine joining NATO. However, when German and foreign billionaires s‘elected’ the new German Government that became installed on 8 December 2021, it appointed as the Germany’s new Foreign Minister the Green Party’s losing candidate for Chancellor, Annalena Baerbock, whose entire career as a candidate and as an official was the most notable for her strident advocacy for hostility toward Russia, and for Ukraine to be admitted into NATO (the anti-Russian U.S. military alliance). She thus became — though she lost her campaign for the Chancellorship — the most powerful Green Party politician in Europe or anywhere.

Immediately, she reversed Angela Merkel’s policies which had allowed the Russian-Swiss-German natural gas pipeline from Russia to Germany, Nord Stream 2, to be constructed to bring into the EU the least expensive of all gas to Germany, which is Russia’s pipelined gas. Gas-prices in Germany are now already soaring, and Germans will increasingly freeze, as a result of this ‘German democracy’ and its obedience to its billionaire masters in America.

However, many European billionaires are also being served by this ‘Green’ Party. Much like America’s Democratic Party (or liberal) billionaires, Europe’s liberal billionaires have been investing heavily in ‘green’ technologies, and are betting against their opposition, conservative billionaires, who are still committed to fossil fuels. So: the ‘Green’ Party represents liberal billionaires, against conservative billionaires. 

On 8 September 2021, “Capital Radar” newsletter bannered “‘Most important choice for the next 100 years’: 1.25 million euros from the Netherlands for the Greens” (“„Wichtigste Wahl der nächsten 100 Jahre”: 1,25 Millionen Euro aus den Niederlanden für die Grünen”) and reported that:

               • A Dutch tech billionaire donates 1.25 million euros to the German Greens.

               • It is the largest donation in the party’s history.

               • In an interview with RND, the major donor explains why Annalena Baerbock should steer the ship of state and why the federal election is so important.

Amsterdam. The Dutch entrepreneur and philanthropist Steven Schuurman [archive.md/ZjwWW] donated 1.25 million euros to the German Greens. It is the largest donation in the party’s history. Billionaire Schuurman, born in 1975, is co-founder and ex-head of the data search and analysis company Elastic and co-founder of Atlantis Entertainment. He has already donated millions in the Dutch election campaign.

The Greens have already received large sums of money this year: the pharmaceutical heir Antonis Schwarz [archive.md/COcng] bequeathed them 500,000 euros; the Greifswald Moritz Schmidt, who got rich through Bitcoin deals, one million euros; and Sebastian Schel’s net heir, 250,000 euros. The election program for the federal election states: “Party donations should be capped at an annual maximum amount of 100,000 euros per donor.” [But Germany has separate laws for candidates, and no limits are placed on donations to them.]

Schuurman was quoted as saying that, of the three candidates for Chancellor, only Baerbock took global warming seriously. He ignored the more pressing and sooner danger of avoiding a nuclear war, on which Baerbock’s policy-commitments are rabidly anti-Russian. No U.S.-and-allied billionaires — either liberal or conservative — are opposed to that. But those policies are blood-red, and now.

At the level of the EU itself, the most powerful person over the entire European Union has been a lifelong hater of Russia, the American billionaire George Soros, who controls the Open Society Foundation and other ’non-profits’ that have poured billions of dollars over decades (starting in 1993, just two years after his self-declared war against communism in Russia had become no longer an excuse when Russia abandoned communism in 1991) into color-revolutions targeted against Russia. On 5 November 2017, Alex Gorka at Strategic Culture, headlined “The Myth of European Democracy: A Shocking Revelation”, and opened:

It’s an open secret that the “Soros network” has an extensive sphere of influence in the European Parliament and in other European Union institutions. The list of Soros has been made public recently. The document lists 226 MEPs from all sides of political spectrum, including former President of the European Parliament Martin Schulz, former Belgian PM Guy Verhofstadt, seven vice-presidents, and a number of committee heads, coordinators, and quaestors. These people promote the ideas of Soros, such as bringing in more migrants, same-sex marriages, integration of Ukraine into the EU, and countering Russia. There are 751 members of the European Parliament. It means that the Soros friends have more than one third of seats.

George Soros, a Hungarian-American investor and the founder and owner of Open Society Foundations NGO, was able to meet with President of the European Commission Jean-Claude Juncker with “no transparent agenda for their closed-door meeting.” 

Many but not all of his agents at the European Parliament are Greens. U.S.-and-allied billionaires donate to all politicians that are ready, willing, and able, to advance the U.S. empire to encompass the entire world, and don’t donate to just to one Party. 

Soros was a major funder of the coup-operation that started in the Obama Administration (led by Victoria Nuland under Hillary Clinton) by no later than June 2011 to overthrow Ukraine’s democratically elected President, Yanukovych, and replace him by a racist-fascist (or nazi) anti-Russian regime and to seize Russia’s largest naval base, which was and is in Crimea, to turn it into a U.S. naval base. (Putin was able to block the latter attempt.) Hillary and Obama had first met with Yanukovych in 2010 and failed to persuade him to push for Ukraine’s NATO membership in NATO, but he said no — NATO then was very unpopular among Ukrainians. During 2003-2009, only around 20% of Ukranians wanted NATO membership, while around 55% opposed it. In 2010, Gallup found that whereas 17% of Ukrainians considered NATO to mean “protection of your country,” 40% said it’s “a threat to your country.” Ukrainians predominantly saw NATO as an enemy, not a friend. But after Obama’s February 2014 Ukrainian coup, “Ukraine’s NATO membership would get 53.4% of the votes, one third of Ukrainians (33.6%) would oppose it.” Obama turned Ukraine around — from being a neutral country on Russia’s border, to being a nazi anti-Russian country. And Annalena Baerbock is a strong backer of today’s nazi Ukraine.

However, the ‘Green’ Party is green in one way: it follows the dollars, not the voters. Other than that way of being green, it’s really only blood-red. Even the ‘Green’ Party’s proposed policies against global warming are futile to prevent global burnout, and they ignore the only policy that, even conceivably, might halt global warming: to outlaw the purchase of stocks and bonds of fossil-fuel-extraction companies. So: they are total fakes. The response of billionaires is to bet either for crackpot business-ventures to halt global warming, or else for extending yet further into the future the use of mainly fossil fuels and ignore even the pretense of caring about the welfare of the generations yet to come. In other words, all billionaires, both liberal and conservative, are really only blood-red, for expanding yet further their empire, in the final analysis.

This doesn’t come from what the voters want; it reflects ONLY what the billionaires want. Here are some data showing that despite all the billionaires’ propaganda for expanding yet further the U.S.-and-allied empire, a majority in some countries — including Germanydon’t want it:

Only Germans “oppose Ukraine joining NATO”: 57% to 36%

“Ukraine Joining EU” opposed by Germans 54% to 41%, opposed by French 53% to 46%

“Oppose Supplyiing Ukraine with Arms Against Russia: Germans 77% to 19%, French 59% to 40%, Italians 65% to 22%.

In 2013, the median favorability of Russia in the EU was 37%; by the time of 2015 it had become 26% — 26/37 or 30% less than only two years earlier, which is to say prior to 

Obama’s having grabbed Ukraine in a very bloody U.S. coup. (Obama was the most successful heir to Hitler since WW II, and was especially successful in jeopardizing the national security of the Russians by grabbing Ukraine on Russia’s border and intensifying the anti-Russian military alliance, NATO, whereas Hitler’s attempt to conquer Russia had turned out to be an colossal failure.)

So, Baerbock — the most powerful ‘Green’ politician in Europe, and even anywhere, though she had failed at the ballot-box — gets here hate (against Russia), her warmongering, not from the voters, but from the sheer cravings of U.S.-and-allied billionaires, to expand their U.S.-and-allied empire, to encompass the entire world. That’s what she (and many Green Party politicians) push for the most.

The ‘Greens” are actually blood-red, for war.

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