On October 11, the US Congress presented a bill aimed at reducing Russian gas supplies to EU (!). According to TASS, the document envisages the allocation of $1 billion to finance projects on the use of new sources of energy in the EU, as well as the provision of diplomatic and technical assistance to the European Union between 2019 and 2023. The bill envisages measures for a number of US government agencies to support private US investment in strategically important energy projects in Central and Eastern Europe.
It also proposes to allocate an annual $5 million for project evaluation and technical seminars for early stage project support. The State Department is advised to ramp up political and diplomatic assistance to certain countries in the development of their energy markets. The draft of the European Energy Security and Diversification Act was submitted by the chairman of the Senate subcommittee on European and regional security cooperation, Ron Johnson, and a fellow subcommittee member, Senator Chris Murphy.
On October 17, Russia’s Deputy Energy Minister Anatoly Yanovsky said that Russia is the only country capable of offering Europe such great volumes of natural gas so cheap, therefore there is no real alternative to pipeline gas coming to Europe from Russia. How realistic are US plans to phase Russia out of the European gas market?
Prerequisites for redrawing the European gas market arose in 2009 with the adoption of the EU’s Third Energy Package. Capitalizing on the fact that the policy of developing alternative sources of energy has led to stagnation or a bigger drop in hydrocarbon imports than expected, the European Union has switched to a strategy of diversifying supplies and, in general, imposing new rules of doing business with supplier countries. Comprehensive measures were later taken to develop a new gas import infrastructure. The past years have seen the integration of individual states’ pipelines via the construction of numerous interconnectors as part of the EU’s effort to make sure that the consumer, not the supplier, dictates the rules in the energy market. As a result, a conflict of interest between the consumer and the supplier has moved from the sphere of purely commercial disputes to the area of political confrontation between countries.
It is no secret that the United States had both geopolitical and economic reasons to encourage the Europeans’ policy, with experts still undecided which of these two reasons was actually prevalent. A more traditional standpoint explains this by the current tendency for the US to return to the world energy market as a potentially significant exporter. The energy boom that started in the US in the mid-2000s, caused by the wide-scale use of hydraulic fracturing (fracking), made the country much less dependent on foreign exports. This simultaneously revived Washington’s claim to be the main regulator (arbiter) of global hydrocarbon markets.
The United States accuses Moscow for its alleged attempts to exert political pressure against the EU and Ukraine as a pretext for its desire to limit Russia’s presence on the European energy market. When meeting with EU leaders in March 2014, US President Barack Obama demanded (!) measures from Brussels that would reduce its energy dependence on Russia. The very same desire is at the core of Washington’s rejection of the Nord Stream 2 project . Last year, the US adopted the Countering America’s Adversaries Through Sanctions Act (CAATSA) that allows Washington to impose sanctions on companies participating in the construction of any new gas pipeline. As an alternative to Russian gas, Washington is offering Europeans to buy liquid natural gas (LNG) from the United States. In summer 2017, President Donald Trump unveiled an ambitious plan to make the US the world’s number one gas supplier.
The White House hopes to make America a net exporter to the LNG market by 2020.
Well, these hopes are not entirely ungrounded though. In line with the strategy of increased gas production initiated by President George W. Bush, the US Department of Energy reported in the spring of 2018 that United States had (for the first time in 60 years) reached the net gas export. The growth of shale production allowed the United States to produce 733 billion cubic meters by the end of 2017. Now, according to lenta.ru, America accounts for 21 percent of global gas production, and Russia, for 16 percent.
That being said, there are quite a few hurdles on the way of expanded US gas supplies to Europe. There is a notable energy shortage in the US domestic market. Therefore, it is hard to imagine an effective strategy for seizing foreign energy markets based on increased export of resources that are not in sufficient supply at home. What is the point of selling what you do not have enough yourself, the business weekly Expert wonders. Storms and severe frosts that hit the US in the early 2018 led to increased consumption of natural gas in the country, effectively dashing hopes for exports abroad.
As a result, 2017 gas deliveries to Europe did not exceed 3 billion cubic meters, while Europeans’ gas consumption in 2017 had reached 500 billion cubic meters. Moreover, within the next two or three years the currently high prices in the European gas market may drop due to growing LNG supplies, Reuters reported early this month, citing Norway’s draft budget for 2019.
Any further diversification of sources of gas supply, much talked about in the EU in recent years, will only reinforce this trend. How, in this case, US authorities will manage to convince their energy producers to continue supplies to Europe, where they will have to compete with possibly cheaper Russian or Iranian oil is a big question.
Despite a notable increase in political and sanctions pressure since 2014, in late 2017, Russia accounted for 35 percent of the European gas market. Still, it has had to pay a price for this by making concessions in terms of price and terms of supply. Anticipating a further sanctions squeeze, in late December 2017, Vladimir Putin ordered corrections to the country’s energy security doctrine, the transport strategy for the period until 2030, and also the energy strategy until 2035. He also ordered new projects in the field of LNG where Russia currently occupies a rather modest niche. Russian forecast an over 40 percent increase in global demand for gas by the year 2040. The largest uptick – up to 70 percent – is projected exactly in the LNG trade where competition will obviously heat up.
At the same time, Moscow will need to work out measures to prevent competition between Russian LNG and pipeline gas, Expert believes. This would call for urgent development of technologies and infrastructure in big- and medium-scale gas liquefaction and transportation.
The turn of 2019-2020 could become a turning point for the European gas market. By the end of 2019, the ten-year Russian-Ukrainian gas transit agreement expires. To bolster its position, in 2018-2019, Gazprom plans to complete two gas transportation megaprojects – Nord Stream 2 and Turkish Stream. President Trump’s announcement of entering the market exactly in 2020 may have also factored in the assessment of Gazprom’s future plans and the EU’s next steps to “liberalize” the gas market.
Meanwhile, pragmatically-minded politicians in Europe, primarily in Germany, have consistently been supporting the idea of the entirely economic nature of the second leg of Nord Stream – Nord Stream 2.
On October 12, the Prime Minister of the German Federal State of Mecklenburg-Vorpommern, Manuela Schwezig, posted an article on the website of the weekly Wirtschaftswoche about a steady increase in energy demand in Germany, adding that natural gas is the most efficient way of meeting this demand. She refutes the notion that a new gas pipeline will allegedly make Germany more dependent on Russia. Berlin and Moscow are equally interested in ensuring reliable energy supplies, Schwezig noted. Despite some lingering disagreements between the two, they have shared interests too, including the possibility of an early return to a “close partnership.” She believes that a gradual lifting of sanctions from Russia could also speed up the normalization of relations.
There is one more geostrategic view on what is going on. Many Russian analysts believe that a long-term US strategy is not about a struggle for the gas market (European or even global) as such, but for its transformation by analogy with the current oil market. Washington’s goal is to block as many existing gas pipelines and those still under construction so that the lion’s share of gas is transported by sea in the form of LNG.
This will help ‘‘unpeg’’ gas prices from oil and transform the international gas market into a single whole – global and spot  – where transactions are short-term and made in US dollars to minimize costs and risks. Such reformatting of the market will eventually make it possible to dictate terms to sellers and buyers through exchange rules and Fed policy. This means that the main purpose of the hype that has been going on about the “shale revolution” and “snapping up the world gas market” is to keep the world’s traditional energy market pegged to the US dollar.
Both the aforementioned scenarios are fraught with serious problems for Europe. If Russia halts gas transit via Ukraine from 2020, and all attempts to avoid the blocking of Nord Stream 2 fail, Europe will have to urgently look for alternative suppliers, and US LNG will be the first thing it will have to go for. However, in this case Germany’s economic leadership will be thrown in doubt, and, consequently, the prospects of strengthening the unity of the EU.
If the European Union is to fight for real energy independence, then it will have, among other things, to look for ways to bring down the share of international commodity trade made in US in dollars. In September 2018, the European Commission President, Jean-Claude Juncker, described as “absurd” a situation where 80 percent of the EU’s its energy imports (300 billion Euros a year) are paid for in dollars. Meanwhile, a mere 2 percent Europe’s energy imports come from the United States. Juncker said that the euro should become “an instrument of a new, more sovereign Europe” and promised to “present initiatives to strengthen the international role of the euro.”
German Foreign Minister Heiko Maas later came up with a proposal for the EU to have its own system of international payments. To make this happen, European financial authorities will need a greater deal of financial centralization of the EU and a political partner for the European Central Bank in the form of a pan-European Finance Ministry.
In this largely unpredictable and controversial situation, it is necessary to prepare for different scenarios. However, this task per se could further stoke up conflicts between EU members.
Faced with this largely unpredictable and controversial situation, countries need to get ready for different scenarios.
According to one such scenario, by increasing its LNG production and export capacity, the United States can toughen its sanctions on Russia. If and when Washington is ready to replace Russian gas with its LNG, the EU could once again consider restrictions on Russian gas supplies to Europe. According to expert estimates, shale gas liquefaction plants currently under construction in the US, will not be able to produce necessary volumes before 2020 and even 2022. In spite of all sticking points currently existing between the EU and the US, after meeting with President Trump in Washington in July 2018, Jean-Claude Juncker announced the EU’s intention to build “more terminals for importing LNG from the US.”
Another option could be a possible US attempt to impose a price war on Russia. If Washington shows readiness to sell its LNG to Europe at dumping prices, Gazprom would have to engage in an even tougher political and price struggle to keep the European gas market.
First published in our partner International Affairs
-  Nord Stream 2 project envisages the construction of two legs of a gas pipeline to annually deliver 55 billion cubic meters of Russian natural gas to Germany under the Baltic Sea. The construction’s estimated cost is 9.6 billion Euros. Nord Stream 2 AG acts as the project operator, while Gazprom is the only shareholder. Due to be wrapped up before the end of 2019, Nord Stream 2 is a joint project of Russia’s Gazprom with France’s Engie, Austria’s OMV AG, UK-Dutch Royal Dutch Shell, and Germany’s Uniper and Wintershall, which will finance 50 percent of the construction costs (Deutsche Welle)
-  Spot (business deal) a contract of buying or selling a commodity, security or currency for immediate settlement (payment and delivery) on the spot date, which is normally two business days after the trade date.
Why Tony Blair is so angry?
The former British Prime Minister doesn’t have a good time! On the one hand, Tony Blair is witnessing the continuation of the Brexit process, and on the other hand, He’s in no way happy with what has happened inside the Labor Party! Tony Blair is one of the main opponents of the British withdrawal from the European Union.
He has repeatedly stated that another referendum could be held, and, if the British citizens vote against the Brexit, the earlier results of the 2016 referendum can be ignored. He’s gone a step further, and mentioned that the Brexit can never happen, even despite the public’s vote for leaving the EU.
Recently, British Prime Minister, Theresa May, expressed her satisfaction with the positive vote of the House of Commons to her plan for leaving the block. These remarks led to Tony Blair and his entourage taking positions against her. The UK former Prime Minister intended to use the Brexit to return to power in London and the Labor Party. In recent years, he has become the main messenger of the falsification of the Brexit.
However, the London-Brussels agreement on British exit from the EU can once again defeat Blair to in the country’s political circles. The truth is that London’s soft or hard exit from the EU is of no importance to Blair, but he’s after the renewal of 2018’s referendum. For the British prime minister, it does not matter that his country will leave Europe in the form of a “joint agreement” or “disagreement”.
UK’s former foreign secretary, Boris Johnson and some other senior members of the conservative party, however, believe that the House of Commons shouldn’t agree with London’s soft withdrawals from the European Union. They believe that the agreement reached between Theresa May and the EU authorities over the Brexit will be heavily imbalanced and will lead to the economic domination of the United Europe on England over the next decade.
On the contrary, EU leaders, including Chancellor Angela Merkel, have said they’re not willing to offer British officials more advantages in their negotiations. They have emphasized that there would be no more talks on Brexit.
Furthermore, the equation is much more complicated inside the Labor Party! Jeremy Corbyn, Leader of the Labor Party and Leader of the Opposition, has emphasized that by holding early elections and changing the government in London, it is possible to re-start the negotiations on Brexit with Brussels.
Beyond the debates that have raised among the conservatives and the Labor Party, Tony Blair is thinking about his own personal and political goals in the Labor Party and the Britain and international equations. Blair believes that if he can provide the ground for another referendum (and to prevent the realization of the Brexit), then his position will be restored among European politicians. It’s obvious that Tony Blair is very dissatisfied with the current agreements reached between the British and EU authorities.
Jeremy Corbyn is trying to make an investigation into Tony Blair for alleged war crimes during the Iraq War, and this issue is seriously threatening Blair’s political future. When Corbin was elected as the leader of the Labor Party, Blair could not hide his deep discontent in this regard. He has said Labor Party has undergone a “profound change” since Jeremy Corbyn became leader and he is not sure it will be possible for “moderates” to regain control of the party. “It is a different type of Labour party. Can it be taken back? I don’t know,” Blair said before.
It should be noted that Jeremy Corbyn had previously called for the trial of George W. Bush and Tony Blair for committing war crimes during the invasion to Iraq. The main question is, what would be Tony Blair’s next step in confronting his failures in the UK’s political scene? Is he willing to use the Brexit as a means to revitalize his already-lost position? This question will be soon answered, but probably the stream of events won’t be to Blair’s benefit in the future.
First published in our partner MNA
The Rise of Far Right Populism in Europe Ahead of EU Elections
Authors: Punsara Amarasinghe and Eshan Jayawardane*
Populism in Europe as a civilizational legacy has a deeply rooted history which dates back to Greco Roman antiquity and as it has been recorded by classical historians like Livy, the overarching political structure of Roman republic nailed by populism that arose as a result of the loopholes of the system. The role of Publius Cloudius against Roman nobility during the late republic was a reflection of how populist discourse functioned in classical world. Nevertheless the principles emerged after the post second world war Europe such as social welfare system, social democracy and cultural integration reduced the gravity of populist discourse as a powerful political tool. Moreover the mass migration of political refugees from Eastern Europe to Western Europe during cold war was a phenomenal factor that encouraged west and its citizens to accept refugees or asylum seekers more dearly and it was rather a display of European values. But as all good things come to an end this wave of immigrations from Non-European countries to Western Europe gradually conceived the seeds of socio economic and political turmoil in the continent that finally paved the path for a greater revival of populist politics in Europe. Especially the political trajectory created with the Syrian refugee crisis since 2015 in Europe has compelled the people to look for Right wing politics as an alternative. Recent discussion held in Warsaw, Poland between Italian deputy prime minister Matteo Salvini and Jaroslaw Kaczynsi shows the spark of far right populist coalition in European Union against its center right more socio democratic leadership of Germany and France. The significance of this meeting lies in the fact that how EU politics has been changed in the recent years before its troubled policies over the illegal immigration and refugee crisis and this Polish Italian axis seems to create a decisive impacts upon the upcoming elections to EU parliament.
As a matter of fact in the past, it never really mattered much if the Euro election was carried by the left or the right: the result was the same anyway. The parliament has always been keeper of the federalist flame, but the unorthodox political upheavals Europe envisaged for past two years have such as BREXIT in 2016 and Trump’s victory in US presidential elections have upset the center right liberal orthodoxy in EU. Moreover it is a fact not be ignored that how national politics in European countries have taken a populist bend as a consoling since most of the common people in Europe are gutted by the refugee crisis and economic deprivation. Especially being the undisputed forerunner in EU Germany has faced severe social issues since 2015 as Angela Merkel decided to not to close Germany’s borders resulting in the arrival of more than one million of people. Last August in Italy the Migrants mainly coming from former Italian colony Eretria had been stranded at a port in Sicily before Italian deputy premier Salvini finally allowed them to disembarked after Ireland and Catholic Church in Italy agreed to take most of them in. Apart from Italy most of European states have been exposed to the wave of populism mixed up with far right ideological elements. For an example elections held in Sweden in 2018 September dragged the country into a political limbo as the results of the elections did not leave either main parliamentary block with a majority and its far right anti-immigrant party Sweden democrats won 17.6% of the votes. Being a country that has resisted populist politics and far right wing ideology since the end of its notorious dictator Farco’s era, Spain too has witnessed the new wave of populism in its national level politics. The dazzling impact created by Santiago Abascal’s Vox party at the election held in Andalusia by gaining 10.97 % of the votes and 12 out of 109 cannot be ignored despite the fact that his party is still in its infancy stage.
Populist discourse spreading across Europe has not been emerged out of the blue as it is imbued with how common people in Europe perceive the socio economic and political circumstances currently. It was a misconception that many analysts believed that rise populism sprang from the financial collapse and unemployment, because it is evident that the rise of populism has not been solely attributed to the economic crisis. If economic growth had been decisive in Poland, which enjoyed the faster growth rate in Europe between 1989 and 2015, the populist Law and Justice Party would never have become the country’s dominant political force. The bitter truth portraying from the rise populism is non-other than Europe antipathy over mass immigration and their concern for preserving common European values. This aptly shows from how Hungarians have rallied around Mr. Victor Orban as he triumphantly calls himself the defender of Christian Europe. On the other hand such xenophobic notions like cultural preservation, growth of Islam have been clearly captured by populist parties as drawbacks created by the apathy of European Union and its center right liberal democracy. Perhaps the influence coming from Putin’s Russia can be taken as one pivotal factor that has intensified the populist discourse, because president Putin’s knack on ethno nationalism and religious traditionalism seem to have allured the populist movements in Europe.
It is a fact beyond dispute that the rises of populist political parties under its far right ideologies in the backdrop of European Union parliamentary elections have destabilized the continuation of European integration under liberal center right outlook. The populist plan to expand their numbers in EU parliament in 2019 May elections have begun to upset the ostensible stability of EU and its French German leadership or perhaps this year Europe will face the arch encounter between newly emerged far right populism and the social democracy that has been the ruling slogan in Europe since 1968 in an open space.
*Eshan Jayawardne holds BA in Sociology from Delhi University and MA in International Relations from Jawaharlal Nehru University in New Delhi. He is currently serving as a guest lecturer at Sri Lanka Open University. He can be reached at eshan.jayawardane[at]gmail.com
Europe-US: Results of 2018 and prospects for 2019
Speaking at a December 4 news conference in Brussels following a two-day meeting of NATO foreign ministers, US Secretary of State Michael Pompeo said that the rule-based multilateral world order that for many decades has served the collective interests of the Western nations is no longer working. He backed up this claim by citing the weakness and incapacity of the United Nations, the Organization of American States, the African Union and some other international organizations.
Much to the Europeans’ surprise, while holding up the NATO alliance as an “indispensable” institution, Pompeo also put the European Union on the list of outdated and unviable ones. These “shocking” comments wrapped up the past 12-month period, probably the most tense in trans-Atlantic relations since 1945.
By the start of 2018, relations between the US and the EU were characterized by a great deal of uncertainty. On the one hand, in the US National Security Doctrine published in mid-December 2017, Trump finally reiterated Washington’s commitment to Article 5 of the North Atlantic (Washington) Treaty, which is something Europeans had been waiting for. He also promised to support America’s European allies against the imaginary “threat” from Russia and China, which he described as “revisionist countries” out to change the existing world order.
On the other hand,the US National Security Council’s view of the countries’ competition in the world conforms to Hobbes’ “all against all” principle. In other words, it rejects the idea of multilateralism, which is a fundamental principle the countries of “old” Europe stick to. Moreover, the entire world order that the US helped establish after 1945, is described as the source of a flurry of serious challenges to America. The Strategy section, devoted to the “world of universal competition,” makes no mention whatsoever of America’s “allies,” while the repeated mention of the obligatory “mutual benefit” of allied relations looks like an undisguised desire to “monetize” friendship.
Washington’s practical steps made in 2017 left Europeans wondering about the price (in the financial sense of the word) Trump would expect them to pay for honoring America’s trans-Atlantic obligations. As a result, Europe was torn between the desire by a sizeable part of its establishment to retain the US leadership , even at the cost of far-going concessions, and a growing disillusionment with the policy of its overseas partner.
The past year confirmed the Europeans’ worst fears: the world, according to Donald Trump, is a world without global rules, a world where the strongest always comes out on top. The White House acted as if it viewed the European Union not so much an ally, as a competitor to fight with. In the spring, Trump suggested to the French President Emmanuel Macron that he pull France out of the European Union in return for a lucrative bilateral trade deal with the US.
Trump supported the UK’s exit from the EU, and even threatened the British Prime Minister Theresa May with economic “measures” in the event of a “softer” Brexit. On June 1, Trump imposed duties on steel and aluminum imports from Europe and threatened to slap new ones – this time on imported European autos.
During the G7 summit in Canada in June, President Trump tried to drive a wedge between the Europeans. Finally, during the NATO summit in July, Trump made it clear that if Europeans refused to “cooperate,” Washington could roll back its military support and even withdraw the US military contingent from Germany. Washington has also made it clear that he considers any further EU foot-dragging on defense spending hikes as a deliberate policy by Europeans, who view the United States as an unfailing guarantor of their security.
During the first half of 2018, the Europeans openly pushed back against Trump’s insistence that his G7 or NATO partners accept the dramatic change in Washington’s approach to these pillars of the Western world, their goals and objectives.
The emergence of Donald Trump has exposed the “royal nudity” of the European Union, which has not yet outlined a common foreign policy on major tracks, or come up with anything in terms of strengthening its power in order to be able to stand up to Washington’s demands.
On the other hand, the heavy-handed and self-serving US policy is too inconsistent as it tries to win over only the partners it can rely on in its fight against Chinese and Russian “revisionism.”
And still, watching the growing signs of US hostility, Europeans start asking themselves a virtually existential question, and that is where the current US Administration is going? Is this the beginning of a long-term trend, a fundamental change in US strategy, or a tactical zigzag meant to achieve some short-term goals? If it is the latter, just like it happened before, then will it be enough to just “wait it out”? If it is the former, will the EU opt for strategic autonomy as part of an increasingly amorphous, but civilizationally homogeneous West, or will it have to solve the colossal task of creating a full-fledged European “power center” that would interact with the US, mainly, if not exclusively, on the principles of “Realpolitik”?
At the same time, a “wait-and-see” tactic could backfire against Europeans. On the other hand, the “all-strops-out” trade war between the US and China, which broke out last year, is forcing the EU to perform a balancing act, maneuvering its way between the world’s two largest economies. This necessitates an independent geo-economic policy in the face of a looming global economic recession. The long-term challenge to Europe is to build a new, previously unknown, system of international architecture: “economic bipolarity between the United States and China and strategic bipolarity between the United States and Russia.”
Experts believe that if Europeans want to push back against Washington’s plans and avoid the EU’s fragmentation, they should start thinking about making Europe stronger, and do it now.
By mid-2018, more and more European politicians had realized that, in the wake of the Cold War, Washington’s policy in Europe was aimed at undermining Europe’s global competitiveness. The question is, however, to what extent the American establishment as a whole shares Trump’s stated goal of maintaining or increasing America’s dominance, even at the cost of economically destroying the “allies,” who are now being perceived by Washington as competitors.
Trump’s initiatives are clearly aimed against the very idea of European unity, which fuels European suspicions about his desire to implement the classic “divide and rule policy” in Europe.
Having all these factors in mind, the EU’s overarching task was to work out measures to resist Trump’s four-pronged “geopolitical attack” in trade, defense, on Iran and migration policy. On June 6, the European Commission approved €2.8 billion worth of import duties on US-made goods. Following the July visit to Washington by the European Commission President Jean-Claude Juncker, the Europeans achieved at least a semblance of a “truce” in their trade relations with the US. Surprisingly to many, the reconciliation had a demonstrative, even flashy character. After meeting Juncker, Trump said that the US was putting on hold the planned introduction of new tariffs on imported European goods, and would work to settle existing trade disputes in order to avoid a full-scale trade war.
According to experts, Europeans have no wish at all to share with the US the burden of a new economic slump, which Trump’s “reckless” protectionism may entail. Therefore, the EU could best respond to Trump’s policy by assuming the role of the leader of countries committed to preserving the rules of liberalism in international trade. The EU’s economic potential matches that of the United States and its economy is almost the only area of international relations where the bloc can act on a par with, or even independently, from Washington.
However, even though unable to compete economically with the US on a one-to-one basis, EU members remain divided on many issues. Fully aware of this, Donald Trump uses every opportunity available to try to pit them against one another.
So, capitalizing on Europeans’ discord over migration, Trump has banked on unraveling the traditional European political parties by mixing all the trends. Newly-appointed US ambassadors openly support far-right populist parties in Italy, Germany, Britain, and in Central Europe.
Meanwhile, the traditional European parties are preparing to challenge Eurosceptics in the upcoming elections to the European Parliament, set for May 2019. Internationally, the EU responds by ramping up diplomacy aimed at cobbling together coalitions without the US in a bid to preserve the existing world order. In July 2018, the EU and Japan agreed to set up a free trade zone; Brussels has likewise been intensifying efforts to establish a free trade area also with MERCOSUR, Australia and New Zealand, and is actively engaged in informal efforts aimed at promoting liberal values and institutions.
The EU’s stance concerning the US sanctions on Iran, has been equally firm, prohibiting companies and individuals located on the territory of the EU from following American sanctions against Iran. According to the new EU rules, European firms hurt by US sanctions will be able to demand compensation. Brussels also reiterated its commitment to the 2015 nuclear deal with Iran, and is actively looking for ways to circumvent US financial hegemony and sanctions. The EU is mulling an independent system of financial settlements, the European Monetary Fund – an analogue of the IMF – as well as financial instruments that would be “completely independent” from Washington. However, ensuring even a simple majority of “yes” votes by individual EU members on these issues will not be easy.
The biggest hurdle here is security, because without the United States, NATO as a military organization becomes virtually ineffective making Europe hostage to America when it comes to security. This effectively weakens the EU’s hand even on the continent, let alone the world. The European NATO members face the hard choice of either playing the role of US-led partners, which may imply their agreement to weaken European unity to benefit Washington’s new foreign policy interests, or stay the course of greater independence, including in matters of collective defense (European army), which, however, is fraught with a great deal of uncertainty.
With the onset of autumn, the issue of “European sovereignty” sprang to the top of the EU leaders’ agenda. At the end of August 2018, the French President Macron and the German Foreign Minister Maas went on record emphasizing the need for Europe to play a new role and “strengthen” its position in the global alignment of forcesemerging in the world. In early November, Macron and the German Chancellor Merkel reiterated their call for a “European army,” “real pan-European armed forces.” Moreover, the US was named among the threats Europe needs to defend against.
During the past year, Europe was making mainly tactical steps aimed at making up for the damage caused by US sanctions. Simultaneously, it was actively looking for a future strategy of trans-Atlantic relations, as well as ways for institutionalizing its independent identity, both in foreign policy and defense.
There is little doubt that all of Europe will not turn its back on America, even though most of the countries of “old” Western Europe have been seeking greater “strategic autonomy” for the EU and a system that could function without relying on the hegemonic might of the United States. By contrast, many Central and East European states are making every effort to strengthen ties, above all military, with Washington, so Europe is still wondering how it can possibly to preserve the “old order.”
The outcome of the November 2018 mid-term elections in the US showed that American voters were losing faith in Donald Trump’s way of handling the country’s foreign policy and foreign trade. With Democrats regaining control of the lower chamber of Congress – the House of Representatives – Trump may need a positive foreign policy agenda, and what better way to achieve this than to restore constructive relations with traditional allies and negotiate with the Europeans? Including on joint measures to “contain” Russia.
Simultaneously, the notion, whereby the EU project is on the brink of collapse and so the US needs to present NATO as a new unifier of Europe is getting increasingly popular in the United States. This is the idea that was pitched late last year by none other than US Secretary of State Mike Pompeo.
This could pull the rug from under the feet of not only those who seek Europe’s strategic autonomy, but even the advocates of a more centralized EU. Therefore, the question of whether the leading European countries will go beyond pacifying voters with talk about the creation of an “independent center of power” remains open. And further moves by the EU in relations with the United States, at least until the May elections to the European Parliament and the change of leadership of the European Commission, will largely depend on Washington’s policy towards its European allies.
First published in our partner International Affairs
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