Which country has already suffered the greatest losses through the new U.S. strategy announced a year-and-a-half ago by President Donald Trump?
Clearly not Russia, whose relations with Washington were far from perfect even under the previous U.S. administration. Nor is it Mexico or Canada: even Trump is unable to turn the tables on the United States’ relations with its closest neighbours so rapidly and radically. With the exception of Iran, Syria, Cuba and the other habitual targets of U.S. attacks, Germany and China have the most reason to be unhappy with the current U.S. policy.
Trump has been applying particularly strong pressure on Berlin and Beijing; the two countries’ current and, more importantly, potential losses from America’s protectionist stance far exceed the losses of all the other US trading partners combined. In addition, Washington has a serious political axe to grind with Germany and China. Berlin is being chided for its “insufficient contribution” to the NATO budget and its unswerving commitment to the Nord Stream II gas pipeline, whereas Beijing is suspected of “hegemonic aspirations” in the Asia-Pacific and of its attempted “expansion” into the Indian Ocean.
If talking common sense, Chancellor Merkel and President Xi would be better off keeping closer to each other: they stand a better chance of weathering the pressure from the United States as a united front than on their own. Given the two countries’ impressive combined potential, the transcontinental Berlin–Beijing axis could become a worthy strategic response to the unprecedentedly strong and brutal U.S. pressure, even more so if this alliance secures the support of several other major countries between the Brandenburg Gate and Tiananmen Square. Including Moscow, which has its own agenda.
How likely is such a new alliance to emerge in the foreseeable future? What are the potential opportunities and limitations of a rapprochement between Germany and China? What consequences would increased cooperation between the two countries have for Russia? The answers to these questions are critical not only to the future of the Eurasian space, but also to the fate of the new world order as a whole.
The Chinese Groom and the German Bride
The Berlin–Beijing axis first manifested itself as a possibility immediately after the new president took office in the United States. Trump’s electoral victory raised serious concerns in China, and came as a true shock to the German political establishment. Symptomatically, on the eve of the G20 summit in Hamburg in July 2017, Trump paid a demonstrative visit to Warsaw at the precise moment that Germany–Poland relations were experiencing yet another dip. Coincidentally or not, Merkel was rolling out the red carpet for Xi Jinping in Berlin. Six months prior to that, China had been announced as Germany’s largest trading partner for 2016 for the first time in history.
Beijing’s interest in Berlin is not confined to China’s desire to further expand bilateral trade, boost investment and secure access to the latest German technology. With the new U.S. administration in power, the Chinese government is looking for ways to demonstrate its increased concern for the global problems Germany worries about, from climate change and WTO reforms to assistance to African countries. The Chinese leadership’s traditional statements as to the importance of free trade, the dangers of protectionism, the advantages of multilateral approaches and the need to adhere to the common rules of the game (Xi Jinping’s keynote address in Davos, Switzerland in January 2017 is one example) are primarily intended for Berlin’s ears.
It is hardly surprising that in the emerging romance between China and Germany, Beijing plays the role of the decisive and persistent young man, whereas Berlin is the wary and calculating girl eager to gain the most from the potential relationship. To begin with, China is much stronger than Germany in terms of its economic and demographic potential, geopolitical position and military might. China is a permanent member of the UN Security Council, and also possesses nuclear arms. In other words, China is a full-blown major power, whereas Germany right now is not. Therefore, any relationship between the two countries will inevitably be asymmetric, with the balance tipped in China’s favour, and this asymmetry will need to be compensated for in one way or another.
Second, China has greater room for manoeuvre in the international political arena than Germany. Currently, the country is not a party to any rigid politico-military or economic blocs; BRICS and the Shanghai Cooperation Organisation, these amorphous and barely binding associations, are beside the point here. Germany, for its part, has numerous fairly tangible obligations within NATO and the European Union. Berlin may be the driver of the European Union, but within NATO it often finds itself playing supporting roles. To continue with the romantic parallels, China the young man is single and free, whereas the girl is bound by close ties with numerous and often quite demanding European relatives, and is unwilling to sacrifice these ties under any circumstances. Whether the existence of “relatives” gives Germany extra bargaining chips in its contacts with China or actually weakens its position is a moot question, but the significance of this factor should not be underestimated.
Third, potential rapprochement is being hindered by the fundamental differences in values. It is difficult to build a strong relationship of trust if one of the partners has a conservative religious background and the other is an inveterate atheist. Germany today is perhaps the leading vector of traditional liberal values, not just in Europe but in the whole world. China’s political model of authoritarian modernization, for its part, is the exact opposite of Western liberalism. Predictions to the effect that the emergence of a middle class in China would inevitably result in the country drifting towards Western-style pluralistic democracy have so far been proven wrong. If anything, China appears to be drifting in the opposite direction.
Fourth, the Berlin Fräulein already has a young man, one that has for decades remained her key partner, protector and, to a great extent, an indisputable authority and guru. That young man lives in Washington. Germany and the United States have had their share of misunderstandings and even quarrels over the years; suffice it to recall Berlin’s resolute opposition to the U.S. intervention in Iraq back in 2003. Yet, until very recently, very few in Germany could picture their country’s future outside the close military, political and economic alliance with the United States. Remove that support, and the entire structure of Germany’s foreign policy would collapse in no time.
This last argument needs to be addressed in greater detail. It would be fair to say that in all of its long and sometimes dramatic post-World War II history, Berlin has never been exposed to attacks, threats, blatant pressure and even blackmail on the part of Washington on a scale similar to what has been going on in the past 18 months. Never before have the views of the leaders of the two countries been so far apart and the level of mutual trust so low.
One could, of course, argue that Trump will eventually go and the American people will remain. However, it was these same American people that elected Trump as their president in the first place in November 2016, albeit not unanimously. In fact, Trump’s popularity in America appears to be growing rather than declining. Whatever the case, it is obvious that Berlin will continue to suffer from the political and psychological consequences of the current transatlantic relations crisis long after the current president leaves the White House. The bilateral relations are not going to return to what they were during the times of the Obama administration any time soon, despite the hopes of German politicians and intellectuals with their orthodox Atlantic world view.
Five Lessons in Seduction
As we can see, China is to play the leading role in the emerging rapprochement. How can Beijing possibly dispel Berlin’s doubts as to the purity of its intentions? What price would the Chinese leadership have to pay for this? Let us take a closer look at Berlin’s main fears.
First, Berlin is extremely uncomfortable with Chinese investors methodically buying German businesses that specialize in the most promising sectors of technological development. Germany suspects that China is driven by more than just commercial interests; that it is, in fact, pursuing a national strategy aimed at gaining a technological advantage over the West in general and Germany in particular by the end of next decade. China invested nearly $14 billion in Germany in 2017, or almost two-thirds of its total investments in Europe.
Germany became aware of the potential threat. In 2018, Berlin partially nationalized one of the country’s largest power grid operators in order to prevent Chinese investors from buying into it. Preventive measures were also taken with regard to a major German hi-tech machine-tool specialist company that resulted in a potential Chinese buyer being forced to abandon its plans. These steps evidently contradict the general principles of Germany’ foreign trade policy, and would have been impossible just a few years ago (Russia’s Sberbank did fail to buy Opel at some point in the past, but then the deal fell through due to the position of General Motors, the U.S. owner of the German car maker).
What could China do in this respect? The most logical solution would be to provide for maximum possible reciprocity by granting German investors unhindered access to the hi-tech sector of the Chinese economy. This remains a problematic topic: China’s hi-tech sector is still largely impenetrable to foreigners. Greater transparency of business practices and a consistent fight against corruption would also raise Germany’s trust in Chinese investors. Beijing is sure to find these steps to be quite difficult and even risky, but a serious relationship with Berlin is bound to come at a price.
Second, Germany is concerned about the possibility of the balance of its trade with China changing dramatically in the coming years. Unlike the United States, Germany currently enjoys a significant surplus in trade with Beijing: exports stood at $96 billion in 2017, and imports amounted to $71 billion. Some fear, however, that the recently unleashed trade war between the United States and China may prompt Beijing to switch a significant portion of its exports to Europe, including Germany, which has the most capacious market in Europe. As a result, Germany could not just lose its current surplus, but would eventually find itself in a situation similar to that in which the United States currently finds itself.
These fears are justified: sooner or later, Beijing will ask Berlin to balance out bilateral trade. It would of course be a grave mistake to do so in the style of Trump, i.e., by twisting Germany’s arm. Quite on the contrary, the Chinese leadership has a great opportunity to demonstrate how different its balancing-out methods are from those used by the United States.
Furthermore, if the full-scale U.S.–China trade war eventually breaks out, Beijing could invite Germany to replace the United States as an exporter to the Chinese market. Germany already exports about twice as many cars to China as the United States, but U.S. exports are still significant at about 10 per cent of the market. China could discuss this opportunity with its German partners.
Third, Germany is rightly irritated by Beijing’s activity in Berlin’s “backyard” – that is, in Central and Eastern Europe and the Balkans. One particular irritant for Berlin is the 16+1 cooperation mechanism created by China for these countries, which involves regular meetings at the highest level. This format is perceived in Germany as China attempting to undermine European unity and gain backdoor access to the European Union. First, because the format involves 11 EU member states alongside five non-aligned countries of the Western Balkans. Second, because the 16+1 mechanism gets to discuss, among other things, issues pertaining to the EU remit (infrastructure development, e-commerce, etc.). An additional vexing point for Berlin was the fact that the latest 16+1 summit took place just several days before the July 2018 EU–China summit.
One could, of course, dismiss Germany’s suspicions and fears as being unreasonable and even hypocritical. After all, Germany consistently opposes any “privileged interests” in Europe and promotes all countries’ sovereign right to choose their partners and cooperation formats. Should Beijing resort to such rhetoric, it would doubtlessly earn a standing applause from Moscow. It is, however, hardly in China’s best strategic interest to ignore Germany’s fears, no matter how unfounded: Berlin is more important to Beijing as a potential strategic partner than all of Central Europe and the Balkans. So, if the road to Berlin lies through Brussels, then Beijing will take it.
Beijing has already made token concessions to the European Union: in future, 16+1 summits will be held once every two years and not annually as before. The Chinese leadership has been consistent in stating unequivocally that Beijing is interested in a unified European Union. Beijing has been careful not to support Eurosceptics, populists, right-wing radicals and other marginal forces within the European Union. Yet China could do even better, such as offering Berlin a joint China–Europe development programme for the Western Balkans in order to refute any suspicions about a possible hidden agenda on the part of China that is aimed at “infiltrating” this very important European region.
Fourth, in assessing the advantages and disadvantages of closer cooperation with Beijing, Berlin naturally wonders how this rapprochement would affect its relations with other Asian partners: Japan, India, the ASEAN countries, Australia, New Zealand, etc. It would certainly be extremely short-sighted of Germany to sacrifice these relations or even give its historic Asian friends a reason to doubt its strategic political priorities.
It is, therefore, in Beijing’s best interests to promote the potential Sino-German axis not as a stand-alone bilateral geo-economic project, let alone a geopolitical one, but rather as an important component of a broader multilateral plan aimed at creating a single Eurasian economic space. The implementation of this plan should prompt individual Asian countries to gradually forget about their bilateral disagreements in the face of the common long-term development targets. It would be too foolhardy of Beijing to seek Berlin’s direct support for its stance on the territorial disputes in the South China Sea, or to prompt Germany to side with China in its conflict with India.
Fifth, the most difficult obstacle to closer cooperation between China and Germany is the current gulf between Germany’s liberal political system and China’s authoritarian one. No sane politician in Berlin can possibly overlook the human rights violations in China, neglect the fate of Chinese dissidents, turn a blind eye to the discrimination against ethnic and religious minorities, ignore the existing restrictions on the dissemination of information and many other manifestations of Chinese authoritarianism. These values have always been and will continue to be a bone of contention in bilateral relations.
However, just because a fundamental solution of the values problem cannot be reached does not mean no progress is possible in this respect. China’s symbolic concessions with regard to individual dissidents are absolutely important (in the latest such development, Liu Xia, the widow of Nobel laureate Liu Xiaobo, was permitted to travel to Germany). It appears to be of even greater import, however, for the two countries to develop contacts along the lines of civil society, education, culture, youth and women’s organizations. For this to happen, China needs to turn Germany into a “fashion,” so as to change the Chinese public’s perception of the West as being primarily associated with the United States.
Why is Trump Not Afraid?
Even the remote and purely hypothetical possibility of a China–Germany alliance should be the cause of great concern for any serious politician in Washington. There is hardly any other geo-economic combination on the planet capable of posing such a threat to the United States, this key economic, financial, scientific and technological centre of the modern world. History teaches us that a war against two strong adversaries at once can rarely be won. A China–Germany alliance, even a short-lived one, should appear particularly threatening to the current U.S. administration, which is in the habit of assessing international challenges primarily from the standpoint of America’s short-term economic interests.
Is Trump afraid of a trade and economic war on two fronts? He appears not to be. If he were afraid, he would be behaving somewhat differently. At the very least, he would be more tactful and understanding with regard to one of his oldest and most reliable European allies. So far, however, quite the opposite is true. It seems at times that the President of the United States is actually pushing the German bride into the embraces of the Chinese groom. Such shocking behaviour needs some rational explaining.
Some of Trump’s political opponents tend to explain the President’s behaviour as manifestations of his personality quirks. In their opinion, he is simply unable to keep a comprehensive picture of the world in his mind, nor does he want to think strategically. Therefore, the reasoning goes, Trump views the United States’ relations with Germany and China as separate and unrelated prongs of America’s foreign policy. He does not give a though to the possible consequences for the Germany–China relations of America’s growing pressure on Beijing and Berlin.
Another explanation of the Trump administration’s policy can be described as “the presumption to power of the United States”: the White House is closely monitoring the progress of the attempted Germany–China rapprochement, but does not believe that it will succeed. The United States’ relations with both Germany and China remain asymmetric: the latter two are more dependent on the United States than the other way around. The White House may be under the impression that even if Berlin and Beijing unite efforts, they will still be unable to create a global financial, economic and technological centre that would be independent from Washington. Furthermore, neither China nor Germany has dared so far to resort to symmetric measures in response to the latest bouts of U.S. economic pressure. Therefore, the White House has no cause for concern, at least not in the foreseeable future.
The third and, in our opinion, most convincing explanation is that the Trump administration is simply incapable of imagining that German politicians are prepared to revise their views on the world, and of Germany’s desirable place in that world. U.S. political circles have long grown used to the periodic outbursts of anti-American sentiment in Germany; these outbursts are not perceived as posing any serious threat to the U.S.–Germany alliance for as long as they do not affect the German political establishment. This was the case during the German anti-war movement in the late 1970s and the early 1980s and during George W. Bush’s presidency. History may yet repeat itself under Trump, too.
One thing is obvious, however: Trump is applying much greater pressure on Germany than his Republican predecessors. The United States is making a show of demeaning not just the current German leadership, but the German political class as a whole, precisely when marginal German nationalism is beginning to awaken from its protracted slumber (as evidenced by the success of the Alternative for Germany party in the latest election). The combination of the imminent systemic crisis in Germany’s domestic politics and the loss of reliable international support in the form of the transatlantic partnership could create the prerequisites for an “ideal storm” in German politics with most unpredictable consequences.
The cockiness with which the current American leadership is treating Germany may eventually result in something similar to what Moscow got in exchange for its arrogance towards Berlin. Such a comparison might be farfetched, but we believe that it merits attention.
Russia had long believed that its “special relationship” with Germany would remain no matter what. Moscow was banking on the Germans’ “historical guilt” over the country’s role in World War II, and expected Berlin to never forget the role Russia had played in Germany’s unification. There were hopes for the rapid development of bilateral trade and economic cooperation, including with Germany’s leading major businesses.
Busy with all these calculations and hopes, Moscow overlooked the moment when it lost its erstwhile status as Berlin’s “privileged partner”; Germany stopped being an unconditional lobbyist for Russia’s interests in the Euro-Atlantic community. Moscow equally overlooked the moment of the generational change in German politics, with a new generation of leaders emerging in the political arena for whom the World War II and even the unification of Germany were nothing more than mere episodes in the country’s centuries of dramatic history.
It would of course be oversimplifying things to draw direct parallels between Germany’s Ostpolitik, which has long disappeared, and its modern, still fairly viable Atlanticism. Fidelity to Atlantic unity has always run much deeper in German society than its adherence to “Eastern politics” and Berlin’s willingness to maintain the “special relationship” with Moscow. Still, the Trump administration could benefit from looking at Russia’s experience, which is something that it is obviously not doing. Therefore, even without China factored in, it is obvious that the risks for the transatlantic partnership continue to grow.
An Axis or a Triangle?
Unfortunately, Russia does not appear to be in a position to play a leading part in the new game that is beginning to unravel in Eurasia. Its economic potential is too limited, and its positions in the emerging Eurasian interdependence system are too weak. On the other hand, Russia cannot afford to stay on the outside, since its future will largely depend on the outcome of the emerging confrontation of the Unites States with Germany and China.
The successful development of cooperation between Germany and China would be beneficial to Moscow, if only because it would deprive Washington of its current monopoly to determining the fundamental rules of the game in the global economy. There is very little hope that relations between Washington and Moscow will improve any time soon; for as long as the United States gets to dictate the rules, Russia will be consistently ousted to the periphery of the world economy. There is also the constant threat of extraterritorial U.S. sanctions, as illustrated by Iran.
In the meantime, China and Germany are Moscow’s main trade partners and are likely to retain this status for a long time. In fact, economic ties with Beijing and Berlin remain complementary for Russia: the countries are Moscow’s main points of entry into the global economy. It would, therefore, be entirely logical for Russia to feel enthusiastic about the possibility of taking part in the creation of the Berlin–Beijing axis and attempting to turn it into an equilateral triangle.
It should be noted that Russia has no interest whatsoever in the destruction of the present liberal world economic order, whose protection is to serve as the foundation of the China–Germany rapprochement. This, despite the fact that the term “liberalism” has recently acquired strong negative connotations within Russia. Just like any other participant in the international economic system, Moscow may have its problems with some aspects of this world order. However, excessive protectionism, the abandonment of multilateralism, the decline of universal international economic organizations and the world splitting into opposing trade blocs would do nothing to help Russia integrate into the global economy; nor will they facilitate the country’s economic modernization.
The opportunity to integrate into the China–Germany cooperation processes would provide Moscow with additional room for manoeuvre, enabling it to offset the “turn to the East” by a re-activation of contacts with the West. In the long run, the China–Germany axis could turn into one of the pillars of the “Greater Eurasia” concept, which has been actively discussed in Moscow of late.
However, a rapprochement between Germany and China per se would not automatically generate new opportunities for Russia. Beijing may well stick to its long-standing practice of pursuing parallel political courses in its relations with Moscow and Berlin. Germany in the current situation would certainly prefer to develop cooperation with China without involving Russia, which has only been creating problems for Berlin – at the very least until the Ukrainian crisis has been truly resolved. It is, therefore, extremely important for Moscow to not become the odd man out in the China–Germany alliance, and to contribute its unique advantages to the axis.
These advantages should certainly go beyond Russia’s geographical situation: there are plenty of transit options between China and Germany, not all of them passing through Russian territory. Moscow should, therefore, look for different kinds of opportunities, such as tripartite development projects for the Balkans, Central Asia and Afghanistan. Other opportunities could include initiatives that would marry security to development, such as migration management, the prevention of political radicalism and addressing the challenges associated with new technologies. In any eventuality, Russia’s value for both Germany and China will be largely defined by its ability to shift from the current inertial economic model to an innovative one.
In addition, as was already mentioned, no separate Russian or Chinese policy with regard to Germany can exist out of the broader EU context. Neither the United States, nor China, nor Russia will replace the European Union at the centre of Germany’s universe. Therefore, Moscow cannot expect to be on good terms with Germany while simultaneously being on bad terms with the European Union. Just like with China, the road to Berlin for Russia inevitably runs through Brussels. So, this road needs to be taken, no matter how long, winding and difficult it may turn out to be.
There may be different opinions about the chances the potential China–Germany alliance has to succeed. It is possible that an alternative geo-economic structure will emerge instead, such as a Berlin–Tokyo axis or a close partnership between the European Union and India. It appears indisputable, however, that the major actors in the global political arena are now required to make major, non-orthodox and perhaps even paradoxical decisions.
So far, most of these actors have been biding their time, hedging emerging political risks, carefully calculating the balances of group interests, maintaining the status quo and hoping that the situation would somehow rectify itself, solely on the strength of their having chosen “the right side of the barricades.” This is perhaps how Roman aristocrats behaved towards the end of the Empire.
Trump is not one of them. He is often rightly accused of being unprofessional, impulsive, lacking in strategic vision and of many other sins. That said, he is actually trying to solve the United States’ global problems rather than postponing them until the next term in office or not passing them on to the next generations. In other words, Trump is a man of action, a trait rarely to be found in the contemporary world. For this reason, until other leaders in Europe and Asia begin to demonstrate a similar capacity, Trump will always have, at the very least, an important tactical advantage over his opponents.
First published in our partner RIAC
EU to mount decisive summit on Kosovo
The European Union is planning to hold an important summit on Kosovo in October this year with a view to get Belgrade and Pristina to normalize bilateral relations. French President Emmanuel Macron and German Chancellor Angela Merkel will pose as guarantors of the deal. Reports say a senior US official may take part in the Paris summit as well. The participation of the American side was strongly advocated by the authorities in Kosovo, headed by President Hashim Thachi.
If this scenario goes ahead, Serbia may face pressure from both the USA and the EU. The West plans to require Belgrade to not only de facto recognize Kosovo but to confirm the course for European integration – which, according to Brussels, means departure from a comprehensive partnership with Russia and from the signing of a free trade agreement with the Eurasian Economic Union (EAEU) scheduled for the end of October.
Given the situation, Serbian leaders are set on consolidating Belgrade’s position in the forthcoming talks by reducing international support for Pristina. To this end, Belgrade is trying to persuade countries that previously recognized Kosovo’s self-proclaimed independence to reconsider their positions and withdraw their statements. Serbian Foreign Minister Ivica Dacic has already announced in wake of consultations on the sidelines of the UN General Assembly that the number of countries that recognize Kosovo’s independence will dwindle by the end of this year. According to Dacic, such countries will make up less than half of the world community.
According to the Serbian Foreign Minister, the Serbian delegation led by President Aleksandar Vucic succeeded in holding talks in New York with representatives of about a hundred states on withdrawing recognition of Kosovo’s independence. “The President spoke with representatives of some states about strategic issues, about a dialogue with Pristina, but there were also many meetings dedicated specifically to the status of Kosovo and Metohija. As the president announced, our citizens can be sure that in the near future the number of countries that will withdraw or “freeze” their recognition of Kosovo will increase,”- Ivica Dacic said.
In recent years, the number of countries that recognize Kosovo’s independence has decreased, though so far mainly due to small American and African states. Among them are the Comoros, Dominica, Suriname, Liberia, Sao Tome and Principe, Guinea-Bissau, Burundi, Papua New Guinea, Lesotho, Grenada.
The persistency with which the US and the EU is trying to “press” for the normalization of relations between Belgrade and Pristina and force Serbia to cut down on its active cooperation with Russia has yet again pushed the Serbs into streamlining their national foreign policy priorities. According to available data, Brussels is ready to slap more conditions on Belgrade, including the most painful of the Balkan issues, not only on Kosovo, but also on Bosnia and Herzegovina. For one, as Serbian Minister of Technological Development and Innovation Nenad Popovic said, one of the conditions for Serbia becoming a member of the EU could be recognition of the “genocide” in Srebrenica.
This is confirmed by Zoran Milosevic, an expert at the Institute for Political Studies in Belgrade, who sees the new condition as nothing unexpected, since some EU member states, and also Switzerland, have passed a law that envisages criminal liability for the denial of the so-called “genocide in Srebrenica.” Some European countries are already following suit having drafted the relevant bills to be submitted to parliament. “Something of this kind was proposed by the High Representative of the international community in Bosnia and Herzegovina, Valentin Inzko. What is the point of adopting laws in defense of this counterfeit on the genocide in Srebrenica if they do not make a condition for Serbia’s membership in the EU?” – Zoran Milosevic points out. The mere word “condition”, he says, signifies that Serbia “is treated as a minor who needs to grow to perfection and fight tooth and claw to enter the EU”. Serbia “accepted this burden of its own free will” the day its parliament passed a resolution according to which the country’s strategic goal is European integration, ” – said the Serbian expert.
He also made it clear that it was by no means accidental that Brussels never announced the full list of conditions for Serbia’s membership in the European Union: “If they did, it would tie the hands of pro-Western Serbian politicians. So they release more and more conditions gradually, one after another. First, it was about recognizing Kosovo – whether this is a condition for EU membership or not. It turned out that it is. Now it is about the recognition of “genocide” in Srebrenica. It is said that Serbia’s entry into NATO will also be a condition for joining the European Union. And, as in the previous cases, we are wondering if such a condition exists or not. As a result, it will turn out that there is. ”
Where Brussels’ pressure on Belgrade is particularly noticeable at present is Serbia’s intention to sign a free trade agreement with the EAEU at the end of October. According to the Minister of Trade of Eurasian Economic Commission (EEC) Veronika Nikishina, negotiations between the EAEU and Serbia on the creation of a free trade zone are over with the parties involved preparing to sign the agreement on October 25. Nikishina says the document will be signed in Moscow by the prime ministers of the five member states of the EAEU, the Prime Minister of Serbia Ana Brnabic and the Chairman of the EEC Board Tigran Sargsyan. Even though Serbia has agreements on a free trade zone with three of the five EAEU members – Russia, Belarus and Kazakhstan, the transition to a common free trade regime has several advantages, emphasizes Veronika Nikishina: “Three bilateral deals that were signed earlier and were not fully identical are being harmonized, giving Armenia and Kyrgyzstan the opportunity of preferences in preferential trade. ”
Also, a trade agreement provides access of the EAEU members to the Serbian market: “For example, it concerns certain kinds of cheeses, some strong alcoholic drinks, and cigarettes from Armenia, Belarus, Kazakhstan and Kyrgyzstan, which could not enter the Serbian market under the free trade regime. And it also spreads on various types of engineering products that have also been removed from bilateral agreements.” “In other words, we give a fully-fledged free trade status to Kyrgyzstan and Armenia and improve the existing bilateral free trade arrangements for Belarus, Kazakhstan and Russia,” – the Minister for Trade of the EEC emphasizes.
According to Serbian Deputy Prime Minister and Minister of Trade, Tourism and Telecommunications Rasim Lyayic, an agreement with the EAEU may allow the country to increase its export volumes by nearly 1.5 times. According to the minister, in 2018 Serbia’s trade turnover with the EAEU countries amounted to about 3.4 billion dollars, of which 1.1 billion accounted for exports, mainly to Russia. Exports into the EAEU will increase to $ 1.5 billion within a few years after the agreement comes into force, the Serbian Deputy Prime Minister predicts.
According to the Bruegel International Analytical Center, in 2016, 62% of all Serbian imports came from EU countries, 8.3% from China, 7.9% from Russia. 64% of the republic’s exports go to the EU, 17.8% to other Balkan countries, 5.3% to Russia.
Naturally, the EU is more than concerned about Serbia’s trade and economic policy following a different direction. Brussels has already warned the Serbian government that a free trade agreement with the EAEU could harm integration with the EU. “You can’t follow several directions at once,” – said Slovakian Foreign Minister Miroslav Lajcak, thereby warning Belgrade and expressing the position of his counterparts in the European Union: “If you are serious about Europe, you must make decisions that bring you closer to it, but this move is totally out of line. ”
Meanwhile, Serbia maintains composure and has no intention of giving up on the plans. Explaining his country’s decision to conclude an agreement with the EAEU, Rasim Lyayic said that it follows economic agenda alone: “It is not about politics, but about trade.”
According to the minister, a refusal to sign an agreement with the EAEU would call into question a free trade agreement with Russia.
The EAEU is calm about warnings addressed to Serbia, – Veronika Nikishina says: “Until Serbia becomes a full-fledged member of the European Union, it has full autonomy in its trade policy. “In our agreement there are no obligations on the formation of a trade regime between Serbia and the European Union, which is absolutely impossible to imagine.” Nikishina made it clear that until Serbia joins the EU, “we are trading with it in a regime we consider appropriate, and we will upgrade this regime.” As for Serbia entering the EU (which is a matter of remote future), in this case “all agreements of this kind, including our agreement, naturally, will have to be terminated,” – Veronika Nikishina says.
Nevertheless, there is no doubt that pressure on Belgrade, both in terms of recognizing Kosovo and in connection with relations with Russia and the EAEU, will boost considerably in the coming weeks. In these conditions, the Serbian authorities will obviously have to assume a more determined position with regard to the country’s list of national priorities.
From our partner International Affairs
EU politicians turn to “ball of snakes” to make own careers
Some of EU politicians are very successful in making their careers using the weak points of the European Union member states.
Current tensions between Russia, China, Iran, North Korea and NATO (including EU countries) lead to the development of many expensive programs and projects that European taxpayers have to pay for.
Current security situation provides a huge space for ambitious politicians. Those, in turn, involve the population of European countries in an arms race, trying to achieve personal goals at the expense of frightened citizens.
Thus, such statements as: “we’re at war”, “Russia and China threaten Europe and the Word”, “we need to increase defence spending” are populist in nature and distract attention of people from more pressing social issues. The more so, loud statements let such experts be in the centre of attention in European politics.
Thus, new European Commission President Ursula von der Leyen has flagged her ambition for political weight to take more responsibility for defence programs and projects.
“That’s likely to trigger turf wars with EU national governments, NATO and the United States over who should be in charge of European military cooperation and the West’s lucrative defence industry,” writes Paul Taylor, a contributing editor at POLITICO and a senior fellow at the think-tank Friends of Europe.
Franco-German efforts to press EU countries to buy European military equipment rather than U.S. vehicles and weapons have not been successful yet. But taking into account the pertinacity of French and German politicians in the EU governing bodies it could become a reality. Though the Baltic countries, the Netherlands, and Poland, are suspicious of such plans.
“They simply want the best value for money and quality for their limited defence budgets. The Poles and Balts believe they get an unspoken extra level of bilateral defence insurance if they buy U.S. equipment beyond NATO’s mutual defence clause.” explains Paul Taylor.
This is one of the few cases when small Baltic States oppose European influencers – France and Germany. On October, 2 in his interview to Europäische Sicherheit & Technik, Raimundas Karoblis, the Minister of Defence of the Republic of Lithuania said that he hates even the subject of European military autonomy. He totally relies on NATO.
So, in this fight for decision making in the European Union only one side will loose – people of the countries who will pay for NATO or European defence projects.
People are only the tools of satisfaction of political ambitions. In case of peace in Europe they will pay for excessive amount of military equipment and foreign personnel deployment. In case of war they will be the targets of missiles.
Sovereignty versus nature: Central and Eastern Europe not ready to fight for environment at all costs
While attending the UN Climate Summit in New York, French President Emmanuel Macron urged European environmental activists to look in the direction of some countries of Eastern Europe, in the first place, those that this summer came up against the “EU initiative to achieve carbon neutrality by 2050”.
The 2050 deadline was first voiced in a report prepared last year by the UN Intergovernmental Commission on Climate Change. According to the authors of the Report, humanity will be able to avoid the worst effects of climate change if it reduces greenhouse gas emissions to zero by the middle of the century. The proposal in support of the United Nations initiative by EU countries put forward by the European Commission in November last year envisages a set of measures to reduce greenhouse gas emissions next to zero; and to compensate for the residual emissions by taking agricultural and technological measures aimed at extracting carbon from the atmosphere. In March this year, as members of the European Council discussed the details of the initiative, the initial reaction, according to media reports, was “cautious”. Only 8 EU member states supported it unconditionally.
However, “the situation had changed a lot” by May: the G8 addressed the other EU members with a proposal to fundamentally step up efforts to avert climate change. The participants in the discussion suggested channelling for these purposes a quarter of the total EU budget for the period 2021-2027. In addition, they proposed to introduce a ban on EU subsidies for projects that could worsen greenhouse gas emissions into the environment. And they also called for supporting the Community’s commitment to the “zero emission” target by 2050 “as a deadline.” . According to observers, what led to a rapid change in the attitude of many EU countries to the issue was a wave of environmental protests that swept through a number of major European cities, including London, Brussels, Stockholm, Paris and Berlin. Also, the change in attitudes could be attributed to the success of the “green parties” in the elections to the European Parliament held in May.
In Eastern Europe, the new “super-ambitious” climate initiatives were met with outright mistrust. During a summit in Brussels at the end of June, Poland, the Czech Republic, Hungary, and, with certain reservations, Estonia, blocked a clause on the implementation of the “2050 Initiative” in the EU strategy for 2019–2024 . Instead of clearly defined obligations of the European Union, with a fixed deadline of 2050, vague wordings were added to the final document. Under the new agreement, only an “overwhelming majority of member states” intend to achieve a zero impact of their economies on the climate, the so-called “climate neutrality”, by 2050 . The refusal of EU members to unanimously support the new climate strategy has also cast doubt on the commitments undertaken by the EU under the Paris Climate Agreement. At the moment, all EU countries are obliged to reduce greenhouse gas emissions by 20 percent of the 1990 level by 2020. And by 40 percent by 2030. However, many member states cannot meet these requirements, some “significantly”. The decisions taken in Paris in 2015 require signatories to prevent a rise in global temperature by more than two degrees Celsius. And “ideally”, the temperatures should not increase by more than 1.5 degrees.
Countries of Eastern Europe came up against the new commitments even despite the “softening” of the original wording. Technically, the EU may soon get back to discussing the initiative: after the EU presidency goes to Finland, the issue can be added to the agenda again. Finland is one of the most ardent supporters of stepping up measures to address climate change. However, the recent failure means that, in practical terms, the EU will be able to return to the problem only after 2024. As they explain their position, the Polish authorities focus on preserving the country’s energy security, – up to 80 percent of the country’s electric power is still generated using coal. Warsaw also advocates a substantial increase in subsidies from the EU budget for upgrading the energy sector. The Prime Minister of the Czech Republic has pointed out that it is impossible to predict what course the events will take in 30 years. Finally, a country’s formal endorsement of the “2050 Initiative” does not necessarily presuppose unconditional support for the EU climate policy in practice. According to the NGO Climate Action Network Europe, in addition to Poland, the Czech Republic, Hungary and Estonia, a cautious position has been demonstrated by Bulgaria, Lithuania, Slovakia, Romania and Croatia. Austria, Greece, Cyprus and Latvia have a number of reservations.
What are countries of Central and Eastern Europe afraid of? First of all, they fear for the economy. Decades after they switched to market economy, their per capita income is 2 to 2.5 times less than in Germany or France. Less diversification of economies, technologically and infrastructurally outdated generating capacities – all this puts Eastern Europeans on the losing side against the background of the more developed members of the European Union. Meanwhile, many leaders of Central and Eastern Europe owe their popularity with voters to the high rates of economic growth. It is no accident then that the success of the “greens” in Eastern Europe was much more modest than in the west and in the center. Eastern European voters are literally frightened by the high cost of today’s “green” technologies, which promise far from clear prospects and only after decades. Politicians cannot but take into account public sentiments at home. In addiiton, the EU economy is slowing down. Even Germany, whose production chains attract many suppliers from the “east”, teeters on the brink of recession. Not surprisingly, environmental issues in such a situation are fading into the background.
In addition, the ambitious slogans about the forthcoming triumph of “green” technologies do not always have a leg to stand on. In February The Economist reported that the income level of traditional energy companies is still higher than the performance of renewable energy projects. The global demand for oil continues to grow by 1-2 percent yearly – just like in the previous fifty years. Most environmental activists are still driving cars and using airplanes. It would be premature to rely on breakthrough technologies, which are not available for mass production yet. The volume of investments in renewable energy sources around the world is about 300 billion dollars a year – a drop in the ocean compared to investments in the development of fossil fuels. And even though they talk much about the early arrival of electric cars, in 2030, up to 85 percent of cars will still be running on internal combustion engines.
Meanwhile, the “2050 Initiative” in its current form is too vague to sound convincing, does not contain any, at least preliminary, estimates of potential costs or possible damage to economic growth. Given the situation, it is very difficult to convince the majority of voters that measures aimed at reducing harmful emissions will not inflict a catastrophic blow to their personal well-being. What makes it all worse is not only by the “bad example” of the USA, which many CEE countries are looking to. After America withdrew from the Paris Climate Agreement in 2017, the Trump administration has been taking steps to revive the national coal industry. Even such environmentally advanced countries as France and Germany have yet to devise a policy that could convince wide sections of society of the benefits of higher prices for eco-friendly products and services. One of the motives behind mass protests of the “yellow vests” in France was fears that that the government would boost taxes under the pretext of the need to “spend more on “green “technologies.” As for tax cuts to stimulate the economy, the proposal is not popular with top-level officials in most EU countries. Meanwhile, fiscal incentives, which encourage public support for technological and cultural changes that come handy for combating climate change, are seen by specialists as one of the most reasonable measures that can alleviate the fears of skeptics.
Since most countries of the world are characterized by a “mixed” picture of the “pluses” and “minuses” of global warming, many people in the east of the EU are questioning the point of introducing a fundamental change to the economic structure of several decades in an attempt to reverse the negative climatic phenomena in the environment. Should we focus instead on political, economic and social measures that would help individual countries and associations to adapt to the objective trends in nature? Or, could it be an attempt, under the guise of solving environmental problems, to restrict development opportunities for competitor countries, either present or potential.
In the conditions of ever-increasing rivalry between states, the environmental issue becomes a convenient and attractive tool to discredit the opponents. East Europeans point out that rich countries, including Great Britain and Germany, are still using coal in order to maintain their economic growth. In many cases, it means tax exemptions and even budget subsidies. A dramatic reduction in the use of coal for production purposes and heating needs may require extensive political efforts, including an increase in subsidies from EU funds, for which Western members of the alliance will not be ready for years to come. For some environmental groups, the struggle for the protection of the environment outweighs any objective needs for the development of both individual territories and entire states. At times, it is next to impossible to separate the recklessly sincere idealism from the “lobbying of new-type corporate interests”. As a result, criticism of the fuel-based development model turns out to be an instrument of competition that promotes the interests of the green economy — which is, as it has become clear in recent years, far from ecologically perfect.
The conflict over how to harmonize the environmental policy runs the risk of becoming yet another confirmation of an alarming trend for the EU of late. It turned out that “subsidies from the European Union are no longer part of its policy, which was designed to compensate for the internal imbalance in the EU, but rather a kind of gift for loyalty. We mean the well-known ‘divide-and-rule’ policy ”, a deliberate separation of countries and regions in the Community that are not ready to unconditionally follow the decisions which are passed by the leading countries and Brussels.
Is the EU able to “overcome the de facto economic, social and cultural inequalities” which are still visible among its members? Or will these inequalities be joined by ecological and climatic ones over time?
Finally, radicalism among the ecologists frightens even Western Europeans. Emmanuel Macron demonstrated skepticism over the statements made in the UN by Greta Thunberg, a young Swedish activist who became known throughout the world in 2018 thanks to the idea of a global environmental “strike of school students”. According to the French leader, Thunberg’s “radical” position is destructive because it could trigger antagonism in society. The day earlier, German Chancellor Angela Merkel praised the activist’s speech in the UN, adding, however, that Thunberg had overlooked a number of key trends. The German leader spoke about new technologies and innovations that “play a significant role in energy and climate protection”.
The crises of the past decade have “revealed the ever-growing differences within the European Union”, and have significantly undermined the previously unquestionable authority of “old” Europe in the eyes of many residents of the East. Against the background of a continuing asymmetry in the socio-economic situation, many CEE countries have managed to overcome the effects of the global crisis better than their Western partners. A number of observers have even outlined the prospects of turning Central and Eastern Europe into a “new driver” of economic growth within the entire EU. Under these conditions, it is not surprising that East Europeans are set on preserving the freedom of socio-economic maneuver in climate change issues in order to avoid their unjustified politicization. Russia shares these kinds of aspirations. By ratifying the Paris Climate Agreement, Moscow declares its readiness by joint efforts to work out such a paradigm of relations with nature that would meet the interests of long-term development. Russia is striving to strike a balance between a clean and safe environment, on the one hand, and the preservation of national competitiveness, on the other.
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