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
The 17+1 Framework between China and Europe
In March 2019, Chinese Prime Minister Li Keqiang made a long trip to Eastern Europe.
The reference for that trip, full of bilateral meetings, was the one found in the Joint Declaration of the EU-China Summit of April 9, 2019.
A document in which, as usual, some key points are stated: firstly, the Comprehensive Strategic Partnership, which reaffirms global strategic multilateralism, as well as “sustainable development” – whatever we may mean with this term – but in which, however, the EU reaffirms its One-China policy.
It also reaffirms support to the EU-China Cyber Task Force; the strengthening of the Addis Ababa Action Force; the funding to the joint migration agency; the will to achieve a global and inclusive economy; support to the Joint WTO Reform Group and further support to the G20; the joint action for the “Global Forum on Excess Steel Excess capacity”, as well as the reform of the international financial system and the review for the new IMF quotas; the “Paris Climate Agreement” and its Montreal Protocol; the Blue Partnership for the Oceans.
With regard to foreign policy – as if everything else were not- reference is explicitly made to the support of both players, namely EU and China, for the 2015 nuclear JCPOA with Iran. Also the peace process in Afghanistan is mentioned, as well as Venezuela.
In this list of bilateral issues there is also the request for a peaceful and democratic solution for Kabul.
Not to mention – of course – the Law of the Sea and finally the situation in Myanmar.
An encyclopedia of very important international topics, which are only proclaimed and mentioned as headings. But, as far as I know, not even in confidential talks they have gone beyond the good intentions with which, as we all know, the road to hell is paved.
In that Summit, tension could be easily perceived.
China wanted to have the EU on its side, at a time of maximum trade tension with the United States, while the EU had increasing doubts about the extension – the so-called 17+1 Framework – of the Belt and Road Initiative to the Balkans and former Yugoslavia.
It should be recalled that Italy, Hungary, Greece and Portugal broke EU unity towards China at that time.
Was it just a signal to the EU? Or a well-considered choice based on the fact that the EU was a technocrat structure operating side by side with Member States – as Germany said – but did not replace them? We do not know yet.
What is certain, however, is that the Chinese seduction towards the Mediterranean and Eastern EU is based on two facts: the U.S. slow disengagement from the NATO EU pillar, regardless of its future president, and China’s awareness that it has to deal with an EU which is now a “paper tiger”.
Nevertheless, China carried out an even more practical operation, at least following the Confucian logic: the support for a Belt and Road network, namely the “16+1 Framework of cooperation with countries in Central and Eastern Europe” -which is celebrating its eight anniversary -to which Greece joined.
The meeting about which we are talking took place in Dubrovnik in April 2019.
The logic of the Chinese Framework is to be closely related with the “Three Seas Initiative” of 2016, an EU initiative in which China simply participated.
As stated above, at the time Greece joined the group.
The Framework, however, had been created in Budapest in 2012 to foster cooperation between the (then) 16 European countries plus China, based on the new Chinese Silk Road and investment in infrastructure, with a view to creating the China-Europe land and sea express line.
Besides Greece, the European countries participating in the Framework are the Czech Republic, Poland, Hungary, Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Estonia, Lithuania, Romania, Serbia, Macedonia, Montenegro, Slovakia and Slovenia.
Among the current participants, 16 are EU Member States, five are members of the Euro area, four are candidates for participating in the single currency and one is even a potential EU Member State.
From the geopolitical viewpoint, China has built an ad hoc format basically within the EU, a mechanism that minimizes the risks of crisis in the Eurozone, creates an autonomous area of interest for China and can even create a Chinese mainmise within the EU, which could also undermine its future development – if any.
The Chinese consortium managing the operation is the China-Road and Bridge Corporation, a subsidiary of the China Communication Construction Company– a company included in the Fortune 500 list.
The Eastern European countries’ underlying idea was to use Chinese support to stimulate their development but, in a document of the Czech government, it is pointed out that the bilateral commitments are now scarcely honoured.
This is due to the coronavirus and the ongoing financial crisis in European countries, as well as to an often high debt burden on the Chinese side.
The EU, however, has changed its political and economic approach towards China – rather quickly considering its normal standards.
In January 2019, in fact, a paper was published by the Federation of German Industries (BDI), which defined China as a “systemic investor” and asked the EU to make its rules and regulations stricter in view of competing with China and protect its companies.
This was followed in March 2019 by a document from the European External Action Service, the Brussels-based structure that believes it is a secret service – often with comical results.
The document told us it was necessary a) to strengthen relations with China, albeit carefully, in view of promoting common interests at global level; b) to control Chinese investment in the EU, on an equal footing (fat chance) and c) to push China towards a “sustainable” economy.
A psycholinguist should still help us to investigate into the effects of the word “global” in the minds of current political leaders.
The document also informed us that the EU should seek a more robust and, above all, mutual relationship at economic level.
Finally, it was maintained- coincidentally – that the countries of the 17+1 Framework should operate in a homogeneous relationship with EU laws. We can rest assured they will do so.
Then there was the same old story about “human rights” and the obvious “sustainable” development, not to mention climate change, China’s claims on the South China Sea which, we imagined, would be pursued with or without the EU “fine souls”, as well as the request for a connection between China and the EU in Eastern Europe – apart from the 17+1 Framework – which would be anyway pursued until China saw its interest, and finally the substantial repetition of the above stated China-EU agreement of 2019.
Just to avoid remaining in an imaginary world, we should recall here a very useful Machiavellian concept: “There is no avoiding war, it can only be postponed to the advantage of others”.
Not to mention that “States are not ruled and maintained with words”.
What is the solution to the dilemma? In all likelihood, the EU has had a very strong warning from the United States, and is trying to bridle, slow down and restrict its relations with China.
With reference to the 5G, a key issue for the United States, the European Commission has signalled a series of “necessary measures”.
The EU document tells us that the 5G network is very important – just what we needed – and that the Union also supports competition and the global market. It then lists the European agencies that deal with it.
Finally, the solution for the EU is to foster cybersecurity “through the diversity of suppliers when building the network”.
It should be recalled that Japan signed an agreement with the EU on the same issues in September 2019.
Everything will be known, however, once the EU’s foreign investment screening mechanism has provided its results, considering that it was launched on April 10, 2019 and will be implemented by October 11, 2020.
It is connected to the Commission’s Communication “A New Industrial Strategy for Europe” which maintains that “we need a new way of doing business in Europe” and that this must “reflect our values and social market traditions”.
It also states that “our industrial strategy is entrepreneurial in spirit and action” but also that “scalability is fundamental in the digitalised economy” – and this is another key point for us.
An essential topic, but left on the sidelines.
Let us leave aside the other banalities and trivialities typical of the 1968 protesters newly converted to the market economy.
Obviously the new Agency will have the following aims: to create a “cooperation mechanism between the European Commission and the Member States to exchange information” – as if it were not already in place – to enable the Commission to make an evaluation (obviously a non-mandatory one) to stop the operations concerning any foreign investment- albeit is not clear whether for SMEs or otherwise – to be authorized by the Member States to “comment” on foreign investment in the EU; to list a sequence – albeit not exhaustive – of foreign investment sectors that could trigger an analysis by this very powerful organization: critical infrastructure and technology, critical inputs, access to personal data and finally guarantee of media pluralism – that has little to do with it, but “anything goes” and every little bit helps.
That is all, so far.
In December 2015, China set up the People’s Liberation Army Strategic Support Force(PLASSF), the structure of the Chinese Armed Forces dealing with cyberwarfare, space warfare and electronic operations. Has the EU something similar?
Obviously not. Furthermore, NATO has a cyber-defence policy, defined at the Wales Summit of September 2014 and at the Warsaw Summit of 2016. But it has no joint agency for cyber policy, which is not only defence, but also attack.
Gas Without a Fight: Is Turkey Ready to Go to War for Resources in the Mediterranean?
Active exploration of gas deposits in the Eastern Mediterranean has boosted the region’s importance for the local powers. Most European states depend on imports of energy resources, which means that taking hold of new gas sources is an important element for strengthening their energy security and diversifying their sources of hydrocarbon supplies.
Currently, Greece, Cyprus, France, and Italy are among the main players that have divided up the known and future gas deposits in the Mediterranean among themselves. All these states are EU members. We should add that other EU states also indirectly benefit from new resources, even if they do not have immediate access to gas deposits. They will, however, gain an opportunity to diversify their gas imports and distribute their hydrocarbon dependency among a greater number of suppliers.
The discovery of a new treasure trove of hydrocarbons often produces not only profits, but also additional problems since natural resources frequently turn into a source of conflict. The case of the Eastern Mediterranean is no exception, as another power has staked its claim to a share of the region’s resources, a power that had officially received no piece of the gas “pie” that the European states had divided up among themselves. This power is Turkey, which has decided to actively explore the gas deposits in the Eastern Mediterranean and has also visibly increased its military presence in the region. Over the last few months, Turkish and Greek warships have been involved in several dangerous incidents, with both parties declaring their readiness to open fire at a pinch. Ankara has also warned that it would “not back down” in a potential confrontation. Like Greece, Turkey has already held military manoeuvres in the region.
Why does Turkey need the gas deposits of the Mediterranean? Today, Ankara is forced to import most of the gas it needs. According to 2016 data, imported gas accounts for 99 per cent of Turkey’s total gas consumption. Most of this gas (over 50 per cent) is purchased from Russia, with Iran, Azerbaijan, Algeria, and Nigeria being among Turkey’s other important suppliers. Multibillion natural resource purchases are a heavy burden on Turkey’s struggling economy. Its GDP has been stagnating since 2017, with a growth of just 0.877 per cent in 2019, compared to over 7 per cent two years ago . These negative trends have been exacerbated by the coronavirus pandemic. It has been a particularly painful time for Turkey, as the country has had to deal with the consequences of the lockdown, the partial suspension of economic activities and a sharp drop in tourist flows, which have always been an important source of revenues for Ankara. The timing of the shortened 2020 holiday season could not have been worse for Turkey. According to official data from the Turkish government, by June 2020, Turkey’s GDP had dropped by 9.9 per cent compared with the previous quarter.
It is extremely important under such circumstances that Turkey finds new energy sources: the gas deposits in the Mediterranean will lift the overwhelming burden on the country’s budget and give its weakened economy room to breathe. In such a situation, decreasing dependence on gas imports could be posited as the short-term goal. In the long term, Turkey intends to become a net gas exporter, which will require huge gas deposits, including those outside the Mediterranean.
Fighting for resources fits well into Recep Erdogan’s “neo-Ottoman” foreign policy concept that envisions a Turkey that is more willing to engage in confrontation with Western powers. Additionally, the “neo-Ottoman doctrine” entails bolstering Turkey’s regional influence—and gaining new resources in the Mediterranean fits well within this task.
International Legal Conflicts within the Dispute
Ankara’s problem is that the formal provisions of the law of the sea do not allow Turkey to explore and develop potential and known gas deposits in the Eastern Mediterranean. The situation, however, is complicated by the fact that the law of the sea, like any other international legal norms, has understandable problems in terms of compliance. Additionally, the provisions of the law of the sea are very complex, and different states frequently interpret them differently, which is true for both Turkey and Greece. For instance, Turkey is actively exploring gas deposits in the Aegean Sea, although legally it does not have the right to do this: under the law of the sea, virtually all of the Aegean Sea belongs to Greece’s exclusive economic zone due to a chain of Greek islands that are closer to Turkey’s coasts than to continental Greece itself. Ankara, however, insists that the islands should not be taken into account when determining exclusive economic zones, which has created the first international legal conflict in the dispute.
The second conflict pertains to another stretch of the Mediterranean between Italy and Libya. Turkey has staked its claim to this stretch, citing its agreement with Libya’s Government of National Accord. The problem is that the GNA does not control all of Libya’s territory, which could put a question mark over the government’s legitimacy. On the other hand, the GNA enjoys international recognition, a fact that Turkey repeatedly stresses.
Another case is connected with gas deposits closer to the coasts of Cyprus. Turkey does not recognize Cyprus; it only recognizes the Turkish Republic of Northern Cyprus (it is the only country to do so). Consequently, Ankara views exploring and developing gas deposits in the Exclusive Economic Zone of Cyprus as a violation of Turkey’s rights. In the meantime, the colossal Calypso gas deposit that was discovered off the coast of Cyprus in 2018 is one of the main bones of contention in the present energy dispute.
The Role of the European Union and Individual European Stakeholders
From the very outset, Brussels supported Greece and condemned Ankara’s aggressive actions. However, the European Union is not entirely homogeneous in its attitude to the dispute. Firstly, some of its members are locked in a confrontation with Turkey, such as Greece and Cyprus, and their stance in unequivocal. There are stakeholder states, such as France and Italy, two European Mediterranean powers that also have an interest in the region’s gas deposits. Their oil and gas companies, France’s Total, and Italy’s Eni, have already bought shares in the discovered Mediterranean gas reserves and made relevant arrangements with Athens and Nicosia. In the standoff between Greece and Turkey, Paris and Rome are solidly behind Greece. Moreover, France has not limited itself to rhetoric, and has sent warships to the Eastern Mediterranean, thus demonstrating its willingness to support the Hellenic Navy in a critical situation. This is a particularly important step, since it entails a radical shift in the military balance of power within the dispute.
Out of all the EU member states, particular mention should be made of Germany, which has a special connection with Turkey and currently holds the presidency of the Council of the European Union. Tellingly, Berlin also sided with Greece, although, unlike France, it has been far more restrained in its conduct. Germany did not send its Navy to the region. Berlin’s principal message is the need for dialogue between the opposing parties and a détente in the conflict. This is Germany’s typical foreign policy stance since it prefers to avoid exerting pressure by force. Additionally, Germany has no additional incentives within the dispute since it stakes no claim to the resources of the Mediterranean.
As for the European Union in general, the overall support for Greece is easy to explain. Brussels proceeds from the official provisions of the law of the sea and, unlike Turkey, it recognizes Cyprus and, consequently, the right of Athens and Nicosia to the gas deposits. In the long term, this new source of gas could help stabilize the European Union and serve as a safety net in the event of a crisis. It was not that long ago that the global financial crisis and the subsequent Eurozone troubles, which hit Greece especially hard, almost resulted in Athens defaulting and withdrawing from the European Union—a fact that could have set a very dangerous precedent and entailed a chain reaction in other Eurozone states with major financial woes (such as Italy). With this is mind, European politicians may very well count on the fact that the revenues from developing the gas fields will help keep the Greek economy on an even keel and insure both Athens and Brussels against possible new economic shocks. We should keep in mind here that the European Union had to establish a financial aid programme and spend significant funds to save Greece from bankruptcy.
Additionally, as we have already mentioned, the new source of gas will allow many EU countries to diversify their energy suppliers and thus to boost their energy security.
How Likely is the Dispute to Turn into a “Hot” Conflict?
Despite several critical incidents, an open conflict over the gas deposits in the Eastern Mediterranean is not particularly likely, mostly due to the forces being unequal. Turkey has found itself almost completely isolated, and the only agreement Ankara can rely on has been achieved with Libya’s unstable Government of National Accord. On the other side, there is an entire coalition of states, with Greece and France having already held joint military exercises.
France’s military intervention radically changes the balance of power. Turkey’s Navy is larger and stronger than Greece’s (149 warships vs. 116, according to the Global Firepower Index), but significantly smaller than that of France (180 warships). However, it is not only a matter of how many warships each side has. What is important here is their quality: for instance, France has four aircraft carriers, while Turkey has none.
The European Union’s general support for Greece is also important. The idea of imposing sanctions against Turkey was evoked at the most recent EU Foreign Ministers Meeting. Financial penalties could have a major effect on Turkey, given that the European Union is Ankara’s principal trade partner, accounting for 42.4 per cent of its exports and 32.3 per cent of its imports. In such a situation, trade sanctions may prove very painful for Turkey, especially given its stagnating economy and the significant losses it has suffered as a result of the coronavirus pandemic.
Additionally, the scope of the European Union’s non-military leverage against Turkey is not confined to economic sanctions. In the event of an open conflict between Athens and Ankara, Brussels can strip Turkey of its current benefits in trading with European states. In particular, the question of excluding Turkey from the EU Customs Union may appear on Brussels’ agenda. Additionally, the European Union could take Turkey’s potential EU membership off the table forever and strike Ankara from the list of candidates.
Still, we should not discount the serious obstacles in the way of Brussels imposing sanctions against Turkey and using other measures to apply pressure on Ankara. One such obstacle is Ankara’s geopolitical significance for Washington. Despite all the recent complications in their relations, Turkey remains one of the key U.S. allies in the region and a NATO stronghold in the Middle East.
As for Turkey itself, a “hot” conflict could prove detrimental to the country in several ways at once. First, given the unequal military power, it is extremely unlikely that Turkey would emerge victorious from such a conflict. Second, a war will undermine Turkey’s global standing and its membership in international organizations. Third, Turkey cannot afford in its current economic state to either actively build up its military power (even though its authorities claim the opposite and have announced significant increases in the naval budget, with the construction on aircraft carriers being top of the spending list) or bear the burden of possible sanctions which, given the country’s many connections with the European Union, could prove very painful.
The rhetoric of the Turkish leadership is highly belligerent rhetoric, yet Ankara is very well aware of the real consequences of breaking up with Europe and starting an open conflict with a country that is a member of both the European Union and NATO. It is possible that, instead of instigating a “hot” conflict, Turkey could attempt to use its own instruments of applying non-military pressure, such as the huge number of refugees present on Turkish territory. Since 2016, Brussels and Ankara have had a refugee agreement in place. However, Recep Erdogan has already demonstrated in the past that he is capable of suspending this agreement and “cracking open” the door to Europe for migrants, which would set new crises in motion at the borders to the European Union.
Does the Gas Dispute in the Mediterranean Affect Russia?
Special attention should be paid here to the possible prospects for Russia in the ongoing dispute. Naturally, Russia has a very tangential relation to the confrontation in the Mediterranean, although the outcome of this confrontation may be important for Moscow.
On the one hand, Russia can hardly profit from Turkey gaining its own major sources of gas. Currently, Moscow is the main supplier of gas to the Turkish market. Undoubtedly, Russia is interested in preserving this status quo. The recent launch of the Turkish Stream confirms that Moscow intends to maintain its dominant standing in the Turkish energy resources market.
On the other hand, a new source of gas for European countries could shake Russia’s position in the even more important European market. It is no secret that the EU countries are attempting to diversify their resource suppliers for greater energy security. However, abandoning Russian gas is very difficult since a gas pipeline infrastructure has already been created in Europe, making Russian gas relatively inexpensive. Much will depend on whether Greece, Cyprus, and Israel will succeed in jointly building the EastMed gas pipeline meant to deliver gas from the Eastern Mediterranean to Greece. Theoretically, EastMed could be extended to other European states. It currently has a design capacity of 10 billion cubic metres, which may be increased by tapping the currently unexplored resources of the Eastern Mediterranean. This is a very ambitious and expensive project, but if it does materialize, it could change the situation in the European gas market, since pricewise, it could compete with cheap Russian gas. If there is no pipeline running from the Mediterranean, Mediterranean gas will have a hard time pushing Russia aside in the European market: without the gas pipeline, gas will be shipped as liquefied natural gas (LNG), which will significantly increase its price and make it far less attractive to European countries.
From our partner RIAC
Political will is needed to foster multilateralism in Europe
On July 1st 2020, a large number of international affairs specialists gathered in Vienna, Austria, for the conference “From Victory Day to Corona Disarray: 75 Years of Europe’s Collective Security and Human Rights System”. The conference, jointly organized by four different entities (the International Institute for Middle East and Balkan Studies IFIMES, Media Platform Modern Diplomacy, Scientific Journal European Perspectives, and Action Platform Culture for Peace) with the support of the Diplomatic Academy of Vienna, was aimed at discussing the future of Europe in the wake of its old and new challenges.
The conference gathered over twenty high ranking speakers from Canada to Australia, and audience physically in the venue while many others attended online – from Chile to Far East. The day was filled by three panels focusing on the legacy of WWII, Nuremberg Trials, the European Human Rights Charter and their relevance in the 21st century; on the importance of culture for peace and culture of peace – culture, science, arts, sports – as a way to reinforce a collective identity in Europe; on the importance of accelerating on universalism and pan-European Multilateralism while integrating further the Euro-MED within Europe, or as the Romano Prodi’s EU Commission coined it back in 2000s – “from Morocco to Russia – everything but the institutions”.
The event itself was probably the largest physical gathering past the early spring lock down to this very day in this part of Europe. No wonder that it marked a launch of the political rethink and recalibration named – Vienna Process.
Among the speakers for the conference’s third panel – which focused on universal and pan-European multilateralism – there was Dr. Franz Fischler, a well-known figure due to his previous postings as Austria’s Federal Minister for Agriculture and Forestry (1989-1994) and as European Commissioner for Agriculture, Rural Development and Fisheries (1995-2004), besides being currently President of the famous European ForumAlpbach.
Dr. Fischler started his keynote speech by highlighting how the COVID-19 pandemic has the potential to fundamentally change Europe – and even the whole world. In doing so, he referred to the paradoxes outlined by Bulgarian intellectual Ivan Krastev in the wake of the pandemic. Contrasting pushes towards re-nationalization and globalization, the partial interruption of democracy but the decreasing appetite for authoritarian government, the mixed response of the European Union to the crisis – in short, a series of conflicting trends are making the future of Europe, as well as that of the whole world, very much uncertain.
It was against this backdrop that Dr. Fischler addressed the central question of the panel: What is fundamentally going to happen in Europe in the times ahead? The former EU Commissioner clarified from the very beginning that those who wish a further deepening of the current multilateral system should not be blinded by excessive optimism. An alternative to the current system does exist – clearly symbolized by the combination of nationalism and populism that we can see in many countries, but also by the problems faced by multilateralism in many fields, most notably trade.
This trend is evident in the case of the European Union too – Dr. Fischler warned. He highlighted that policy tools aimed at stimulating convergence across European countries, such as for instance the EU’s cohesion policies, are becoming increasingly weak, and inequality within the EU is currently on the rise. As a result, traditional goals such as the “ever closer Europe” and the “United States of Europe” do not even seem to be on the agenda anymore.
What can then be done to deepen the EU’s integration process and strengthen Europe’s multilateral system? Towards the end of his speech, Dr. Fischler outlined a few entry points for reform and further cooperation. His suggestions revolved around increasing cooperation on a number of specific issues, ranging from high-tech research to the development of a common European passport. He also proposed that European countries should strengthen their common diplomatic initiatives, including by speaking with a single voice in international institutions, as well as increasing the EU’s soft power. On top of that, deeper institutional and political modifications might be needed for the EU, Dr. Fischler hinted – citing as examples the relaxation of the unanimity voting procedure on some foreign policy issues, as well as an intensification of the EU’s enlargement process.
Closing his highly absorbing speech, Dr. Fischler – champion of multilateralism, and guru of the current EU CAP (Common Agricultural Policy) made clear which ingredient is, in his opinion, the cornerstone for reviving multilateralism in Europe: “All I would like to say is that there are possibilities out there. The question is, as always in these times: is there enough political will?”
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