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Explaining the European Union’s partnership with India

MD Staff

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What are the main objectives of the Joint Communication?

The Joint Communication will strengthen the EU-India Strategic Partnership by focusing on sustainable modernisation and on common responses to global and regional issues. It is meant to serve for the next decade as a coherent platform to advance key EU interests, improving the way the EU approaches India. The Joint Communication seeks to maximise the opportunities in terms of trade, investment, people-to-people exchanges, foreign policy and security, and global governance, particularly through synergies and coherence in actions by the EU and its Member States.

  • Seize the full potential of the EU-India strategic partnership.
  • Build a strong partnership for sustainable modernisation, to benefit both sides.
  • Join forces with India to consolidate the rules-based global order, based on multilateralism with the UN and the WTO at its core.
  • Develop a shared approach at the multilateral level to address global challenges and increase coordination.
  • Seek common responses to security threats and regional issues.

Why is this Joint Communication coming now?

The long-standing EU-India relationship is based on a 1994 Cooperation Agreement. The last Commission Communication on India dates from 2004, when the Strategic Partnership was established. The partnership has evolved and has seen enhanced commitment from both sides over the last two years. An ambitious Agenda for Action 2020 was adopted jointly at the 2016 EU-India Summit, while at the October 2017 EU-India Summit, the two sides recognised agreed a common vision of global governance, shared values and principles. There is, therefore, a positive momentum for the EU to restate its engagement towards India.

What is the EU’s ambition in developing foreign policy cooperation with India?

Among the EU’s many partners, India already plays an important role, particularly in consolidating EU’s engagement in and with Asia. India’s international reach and relevance will continue to grow, and therefore its importance to the EU, in line with the development of its economy and its diplomatic and defence capabilities. Although EU-India political consultations have broadened and deepened considerably in the last few years, more could be done together to ensure regional stability and global crisis management.

On many global, international and regional issues, there is clear convergence between the EU’s and India’s views and objectives. For example, both the EU and India remain committed to the continued full and effective implementation of the Iran nuclear deal and we collaborate closely to help bring peace and development to Afghanistan, as we have also done in addressing the recent crisis in the Maldives. The EU wants to expand this positive engagement and to strengthen cooperation on other issues in Africa and the Middle East, based on shared interests, principles and values. The EU will seek to develop more structured and regular consultations in multilateral fora and exchanges on emerging regional structures in Asia.

How will the EU enhance security cooperation with India?

EU-India cooperation in the field of security is directed at enhancing the security and wellbeing of our citizens. Terrorist attacks on EU and Indian soil should not shake our commitment to tolerance and diversity. On the contrary, in order to address this growing threat, the EU and India are currently looking at establishing effective counter radicalisation programmes, removing terrorist and extremist content available online, deepen cooperation on terrorist designations and to increase the effectiveness of sanctions, and putting an end to terrorism financing.

With the expansion of IT to all spheres of life, cybersecurity is quickly becoming one of the most important threats to national and global security, and in the short-to-medium term this threat is only expected to grow. The EU and India have a lot to learn from each other regarding protecting critical infrastructure and defining international rules that can apply to the cyberspace. In addition, our law enforcement agencies have to start collaborating more closely to confront the activities of cybercriminals that operate in the EU and India at the same time.

Both India and the EU are firm believers that non-proliferation and disarmament are necessary to maintain world security and are promoting international regimes to control missile technology and the spread of weapons of mass destruction.

Another area of mutual interest is maritime security. The scope for cooperation, especially in the Indian Ocean, is very large. The EU and India have cooperated in anti-piracy efforts in the Indian Ocean and the EU would like to see India joining on efforts to escort World Food Programme shipments off the coast of Somalia. The EU and India should join forces to promote the UN Convention on the Law of the Sea, as the basis of ocean governance and work more closely in the field of maritime surveillance.

Given the important steps the EU has taken recently to improve its action capability as a security actor, the EU aims to enhance overall cooperation with Asian partners, and with India in particular. To this end, the EU will seek to establish military-to-military contacts with Indian counterparts in order to explore concrete opportunities for cooperation.

How developed is the trade and investment relationship between the EU-India?

India is an important trade partner for the EU and an emerging global economic power. India is the fastest growing large economy, with growth rates of about 7%. In 2017, the EU was India’s first trading partner, while India was the EU’s ninth largest trading partner, amounting to a total of €86 billion trade in goods and €29 billion trade in services.

The EU is one of the largest investors in India, with an overall stock of more than €72 billion in investments. India too is emerging as a proactive investor in the EU, with €4.9 billion in 2016.

Close to 6,000 EU companies are present in India collectively providing direct employment to 1.2 million workers and indirect employment to 5 million.

However, the potential of the EU-India trade and investment relationship is far from being reached. From this perspective, the EU aims to achieve comprehensive and balanced agreements on trade and investment with India, as well as to support trade liberalisation and to ensure fair market access and predictable investment conditions.

Why does the EU want to increase investment in India’s sustainable modernisation?

The EU offers important opportunities in terms of technology-sharing and know-how, providing high-level synergies in sectors where EU companies are world leaders: this includes infrastructure, transport, telecoms and basic industry. This wealth of experience and knowledge means that the EU has much to offer India in its quest to grow and modernise, and it helps, in turn, create new business opportunities.

Furthermore, cooperation on climate change, the environment, green energy, and urbanisation helps the EU and India to meet internal objectives as well as international commitments. The EU also wants to work more with India to build inclusiveness and equality, for example via digitalisation.

The EU promotes a growing role of the European Investment Bank (EIB) in financing India’s sustainable modernisation initiatives. The EIB has so far invested €2.5 billion in India in infrastructure, renewable energy and climate projects.

Why is the Joint Communication calling for a partnership on connectivity with India?

The EU has launched in October 2018 its Strategy on Connecting Europea and Asia. The Strategy calls for more engagement with partners – in Europe’s neighbourhood, in Asia and beyond – on enhancing connectivity and finding complementary and common solutions. The EU approach to connectivity is clearly set: connectivity must be fiscally, environmentally, socially and economically sustainable; comprehensive across sectors and financial frameworks; and rules-based.

The EU and India have agreed at the 2017 Summit on a common view towards connectivity, acknowledging “that connectivity initiatives must be based on universally recognised international norms, good governance, rule of law, openness, transparency and equality and must follow principles of financial responsibility, accountable debt financing practices, balanced ecological and environmental protection, preservation standards and social sustainability.”

Given the commonality of views, India is a priority country for the establishment of a connectivity partnership.

Why is India an important partner on research and innovation?

Both the EU and India have similar views on the role of research and innovation: supporting economic development, creating jobs and strengthening the capacity to address global societal challenges, notably ICT, health, climate change and energy, food security or smart cities.

India has important centres of excellence and a considerable talent pool, with a high potential to jointly contribute with the EU to address global challenges. The EU cooperates with India through the Horizon 2020 Framework Programme for Research & Innovation. Indian researchers receive grants from the European Research Council or Marie Skłodowska-Curie fellowship. A co-funding mechanism was established to fund successful Indian participants in Horizon 2020 projects.

Joint initiatives aim to foster the development of concrete solutions to common societal challenges. An example of joint cooperation is a successful flagship initiative in the area of water of €30 million.

India also has impressive start-up ecosystems. The EU promotes networking between innovators, start-ups, incubators, including via joint on line and off line platforms.

How is the EU working with India on clean energy and climate change?

Both the EU and India ratified the Paris Agreement and are committed to its implementation. Against the backdrop of a changing international landscape, India and EU have the ability to lead and uphold their Paris pledges.

The EU and India have established in 2016 a Clean Energy and Climate Partnership to work on a clean energy future for India and to implement the Paris Climate Change agreement. The Partnership delivers concrete activities on the ground among others in renewable energy, energy efficiency and smart grids. For example: technical assistance is provided to the Indian Government to develop the first off-shore wind plant in India and to implement the Solar Parks Programme. The EU also finances technical assistance to implement the Energy Conservation Building Codes.

The EU promotes green investments through blended financing. Projects funded under the Asia Investment Facility support sustainable urban housing and mobility. The Electrification Financing Initiative boosts private sector investments in sustainable energy through de-risking and reimbursable schemes.

How will the EU work with India at the multilateral level?

The EU and India are both strong supporters of the rules-based global order, based on multilateralism, with the UN and the WTO at its core. In the current international environment, the EU will build on this important common ground it shares with India to develop coordination at multilateral level, particularly at the UN, G20 and WTO. The main aim is to build multilateral solutions and address challenges to international security, global economic stability and growth.

What does the EU want to achieve regarding data protection cooperation?

Increased convergence between our systems could bring very significant benefits to our economies. This would, in particular, facilitate trade flows which increasingly rely on personal data transfers, while ensuring a high level of protection of the data exchanged between India and the EU.

The EU supports the progress of data protection reform in India, which will also cover foreign operators. With a new law in place, India would be joining the growing trend of global convergence in this area. As a leading world economy and the world’s largest democracy, India’s endorsement of a high level of data protection would constitute a critical example at a moment where there is an increasing demand for international standards on privacy.

Importantly, if adopted, the law would certainly contribute to facilitating data flows between the EU and India, and could open the way for a possible adequacy dialogue.

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Any signs of a chill between France and Germany?

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The past few months have seen many signs of growing friction and divisions between the two European superpowers, Germany and France. Before the February vote on changes to the EU Third Energy Package, meant to expand the European Commission’s power to regulate Europe’s electricity and natural gas market, France opposed, until the very last moment, Germany’s position on the issue. In April, Paris and Berlin failed to agree on how much more time Britain should be given to decide on its withdrawal from the EU. During the recent presidential elections in Ukraine, France and Germany supported various candidates. Moreover, they are equally divided on who will be the new head of the European Commission. What is happening in relations between members of the “European tandem”?

During the latter half of 2018, it looked as if relations between the EU’s two powerhouses were reaching a new strategic level. In a joint statement made in Meseberg in June, Berlin and Paris outlined their shared vision of the European Union’s future development. In late August, French President Emmanuel Macron and German Foreign Minister Heiko Maas simultaneously spoke out about a new role for Europe to make it “sovereign and strong.” During their informal meeting in Marseille in September, Emmanuel Macron and Angela Merkel agreed on a coordinated response to the main challenges facing Europe and on concerted work on shaping the “agenda for Europe.”

In November, the two leaders spoke in favor of creating a “European army,” “real Pan-European armed forces” capable of defending Europe. And in January of this year, they inked a broader cooperation accord in Aachen, which commentators described as a “new big step” in bringing the two countries closer together. The Treaty of Aachen covers new areas of political cooperation, including common projects and commitments in the fields of defense and international relations.

Just a month later, however, the Franco-German rapprochement hit a snag over two strategic projects worth billions of euros, namely the Nord Stream 2 gas pipeline and trade relations with the United States. Here the interests of Paris and Berlin differ the most. Underscoring the seriousness of the rift, Emmanuel Macron canceled a planned trip to a security conference in Munich in what many commentators described as a “demonstrative” move. As for the issue of completing the construction of the Nord Stream 2 gas pipeline, the compromise reached by France and Germany and approved by the European Parliament, imposed on Berlin “a formula that the German government wanted to avoid.”

Regarding the issue of trade relations with the United States, it wasn’t until mid-April that Brussels collectively managed to prevail over France, which had been blocking the start of pertinent negotiations with Washington.  Any delay may cost the German automakers multi-billion dollar fines from the United States. If the French succeed in delaying the start of negotiations, Germany, which is already experiencing a sharp slowdown in economic growth, may end up the loser again.

France’s sudden move left the German media guessing whether Macron’s actions were dictated by his displeasure about Berlin’s “slow response” to his initiatives, or by Donald Trump’s threat to sanction companies involved in the construction of the Nord Stream 2 pipeline, including the French concern Engie. Or maybe Macron had resorted to this “show of force” in a bid to strengthen his hand amid the conflict with the “yellow jackets” and growing tensions with Italy?

Indeed, the statement made in Meseberg and the treaty signed in Aachen could have proved too much of a compromise for Macron, if not a serious blow to his ambitions. According to critics, “the Treaty of Aachen dodges the most sensitive topics characteristic of modern Europe.” Including migration and political unification of Europe – something Macron is so eager to accomplish. The treaty makes no mention of a common EU tax and financial policy, while the issue of creating a single economic space is spelled out declaratively at best. Angela Merkel essentially emasculated virtually all of Macron’s initiatives pertaining to the financial and economic reform of the EU and the Eurozone. Emmanuel Macron has been out to become one of the EU’s leaders, or even its sole leader, ever since he became president in 2017. All the more so following Britain’s exit from the bloc and amid the ebbing political authority and the planned resignation by 2021 of German Chancellor Angela Merkel, once the informal leader of a united Europe.

The current political situation in France is also calling for more decisive actions by President Macron. To ensure at least a relative success in the upcoming European elections, he needs to enlist the support not only of the traditional left-and right-centrists, but possibly of some representatives of the new European right too. Whether or not Angela Merkel stands down in 2021, or after the elections to the European Parliament (as has been rumored since April), Emmanuel Macron essentially remains the only top-level proponent of greater European integration. (Unless Merkel ultimately moves to the head of the European Commission, of course). With Macron eyeing a second presidential term in 2022, the advancement of the modernization model for France depends directly on the success of the European project. And here any significant changes in the European Union “mainly depend on the position of France’s privileged partner – Germany.”

All this means that Macron needs a breakthrough now that Berlin is going through a “complicated power transit” with Merkel having resigned as the head of the CDU and preparing to hand her post as Federal Chancellor over to a successor. Therefore, she is now taking her time and, according to her successor as CDU leader, Annegret Kramp-Karrenbauer, is holding out for a new vector in the development of the European project as “the common denominator of the distribution of political forces after the elections.” Does this mean that Berlin’s is staking on the success of its candidate in the ongoing struggle for the next president of the European Commission? For the first time ever, the CDU and the CSU have managed to nominate a common candidate who has “good chances” of heading the EU’s executive body.

Meanwhile, Berlin is facing an intractable dilemma. Since 1949, “avoiding by all means situations necessitating a hard choice between France and the United States has been a key principle of German foreign policy.” This approach “survived all governments and coalitions, and was maintained after the reunification of Germany.” Under the present circumstances, however, remaining firmly committed to the transatlantic relationship threatens to further destabilize the European integration project, which is now seen as being key to Germany’s future. Simultaneously, a course aimed at minimizing damage from the policy of external powers that threatens the fundamental German interests might necessitate radical and ambitious geopolitical maneuvers that would almost inevitably revive the Europeans’ and Americans’ historical fears of “German instincts.”

US and British analysts already worry that “the

[geopolitical]

shackles that are voluntarily accepted [by Germany] can be thrown off.” They also wonder how long it will take before new generations of Germans want to restore their country’ full state sovereignty.

In Germany itself, promotion of such slogans have already given the Alternative for Germany party (AfD) the third largest fraction in the Bundestag. A major paradox of the current European and German policy is that Berlin’s activity or passivity is equally detrimental to the Pan-European project and could eventually lead to the EU’s fragmentation and even disintegration.

However, the Franco-German “tandem” is already being dogged with contradictions and compromises, which are highly unpopular among many in the German establishment. The cautious response by many EU members to the latest joint geopolitical initiatives of Berlin and Paris, gave Germany more reasons to fear that Macron’s global ambitions could exacerbate the differences that already exist in the EU. Many in Germany have long suspected Macron of wishing to make the EU instrumental in his foreign policy aspirations.

Some experts still believe that at the end of the day the current chill between Germany and France may turn out to be just a sign of the traditional “propensity for taking independent political decisions.” The sides are sizing each other up to see “who will be setting the rules of the roadmap in the future.”  Also, Paris’s tougher stance towards Berlin may be a tactical ploy, a pre-election maneuver to “hijack” part of the agenda from the “national populists” of Central, Eastern and Southern Europe where many people are not happy about the German “diktat.”

Emmanuel Macron has proved once and again his ability to ride the wave of public discontent with certain issues. His Plan for Europe, published in early March, carefully avoids any mention of France’ and Germany’s leading role in advancing EU reforms.

On the other hand, the foreign policy of the leading European powers has a long history, and long-term geopolitical considerations continue to play a significant role. Germany, for one, has traditionally been looking for a counterweight to the Anglo-Saxons, while France – to German dominance in Europe. As a result, the search by Paris and Berlin for common points of political contact is now turning into intense efforts to find the “lowest common denominator.” The overall impression is that we will only be able to see a greater deal of certainty in relations between the two countries after the results of elections to the European Parliament have been summed up.  The distribution of roles both within the “European tandem” and in the EU as a whole depends on which political forces – pro-Macron or pro-Merkel, the Europeans will vote for.

 First published in our partner International Affairs

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Sino-Italian Partnership and European Concern

Mohamad Zreik

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A crucial moment in modern European history is that the European doors opened to Chinese President Xi Jinping in Italy during a reception that is like receiving kings and leaders. Once again China is moving west despite all the American warnings from the Chinese dragon coming from the East, and this time it was Italy’s accession to the One Belt One Road initiative.

The Chinese president said that his country’s relationship with Italy is excellent and that the Sino-Italian common interests are the basis for a fruitful future. The Italian prime minister said that Italy is a key partner in the Belt and Road initiative and that trade between Italy and China should increase. But all this positive atmosphere is met with dissatisfaction and fear by the United States and some Italians, which is totally opposed to dealing with China because it considers it a threat to its national security and therefore to the national security of Italy.

In order to prevent espionage or transfer of experience by the Chinese, it was agreed to establish an oversight authority. In an expression of US rejection of the agreement, White House official Garrett Marquis wrote last week on Twitter that Rome “does not need” to join the “New Silk Road”. In an effort to ease US concerns, Luigi Di Maio said before taking part in an Italian-Chinese economic forum in Rome that the relationship will not go beyond trade, as we remain allies of the United States, and remain in NATO and the European Union.

The Italian economy, which is in a recession, is pushing the Italian government to form an alliance with China. Many European policy experts consider Italy to be a Trojan horse for China in the European region, which will have political implications for the future of the EU and the future of the Italian-American relationship; especially as the Chinese giant Huawei is expected to participate in the launch of the technology “G5” mobile phones in Italy.

China’s opening up is not limited to Italy, but to Europe as a whole. In the last visit by the Chinese president to Europe, he moved from Italy to Monaco and Paris and met President Emmanuel Macron, who is trying to open up to Beijing. German Chancellor Angela Merkel has opposed the Sino-Italian rapprochement with signing the agreement to join the Belt and Road Initiative, so that Italy will be the first G7 country to join the initiative.

Beijing is interested in investing in Italian ports, including the port of Trieste on the Adriatic, to boost its exports to Europe. Italy seeks to balance trade with China. According to official data, trade between the two countries grew by 9.2% compared to 2016, reaching 42 billion euros. Italy managed to cut its trade deficit with China by 1.37 billion euros, increasing exports to Beijing by 22.2%, while imports rose to 28.4 billion euros, an increase of 4% compared to 2016.

But the most important issue remains the weak Italian economy, which will survive under Chinese debt, and the Sri Lankan experience proves that China is dealing with countries with economic interests. So, will the European gateway withstand the Chinese economic giant, or will it be a Chinese economic and political region in the future?

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Summit in Berlin: Pressure on Serbs

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On April 29 Summit of the Western Balkans leaders was organized under the initiative of German Chancellor Angela Merkel and French President Emmanuel Macron. In advance, it was known that the whole meeting was organized only and exclusively because of the Kosovo issue. Summit was opened by German Chancellor Merkel and French President Macron who pointed out that Western Balkans remains EU priority, adding that this is only an informal discussion, and no final solutions for Kosovo should be expected. The official meeting was followed by a working dinner, that finished late in the evening.

A letter summarizing the pledges of the meeting with a special focus on Serbia – Kosovo dialogue and economic integration of the region, was signed as the event concluded. After the meeting was concluded, President of Serbia Aleksandar Vucic stated that the talks had been difficult, but nevertheless thanked Angela Merkel and Emmanuel Macron for their contribution. According to him, it shows their commitment for the Western Balkans, which is important for maintaining peace in Europe. He added that everybody urged Kosovo`s leaders to revoke the tariffs  introduced for Serbian goods .

President of self-proclaimed Kosovo Hashim Thaci also found last night talks difficult, adding that the Summit finished without any tangible results. Frozen conflict between Belgrade and Pristina has to be overcome, Summit‘s participants jointly concluded, said Thaci to the journalists in Berlin. Thaci stated that, even though there will be no border exchange, he will advocate that Preshevo Valley becomes part of Kosovo. Kosovo’s President expressed dissatisfaction because for Kosovo has not been abolished visas, and reminded that Kosovo fulfilled all the requirements for visa liberalization.

Prime Minister of self-proclaimed Kosovo Ramush Haradinaj pointed out that the recognition by Serbia is the first step towards the progress, but not the final one. Haradinaj stressed that it is unacceptable to change the borders, because if the borders change, it would lead to new ethnic divisions and maybe violence.

It is particularly interesting to point out that on the summit in Berlin, Bosnia and Herzegovina was represented by the Chairman of the Council of Ministers of Bosnia and Herzegovina Denis Zvizdic, and if Denis Zvizdic has no legitimacy. Namely, Denis Zvizdic is currently in a technical mandate until the new Government of Bosnia and Herzegovina is elected, while Milorad Dodik, chairman of Bosnia’s tripartite Presidency, is the only legal representative of Bosnia and Herzegovina. However, since Milorad Dodik is a Serb and publicly declares that Kosovo is a southern Serbian province, Denis Zvizdic was called. And Zvizdic, on summit, pointed out that every country in the Balkans has internationally recognized borders and that the basic EU principal is not to change the existing ones. This statement primarily refers to Republika Srpska, which accounts for 49% of Bosnia and Herzegovina and wants to be independent. But Denis Zvizdic, like all other Bosniak politicians, supports an independent Kosovo.

Prime Minister of Croatia Andrej Plenkovic said that the key messages were directed at the attempt to unblock Belgrade – Pristina Dialogue. Together with his Slovenian colleague Marijan Sarec, Plenkovic was the only other leader of an EU country present at the meeting, apart from Merkel and Macron.

Prespa Agreement was once again pointed out as a model for successful resolution of bilateral disputes. Prime Minister of North Macedonia Zoran Zaev emphasized the importance of normalizing the relations between Kosovo and Serbia, and urged the EU to recognize the progress achieved by his country by opening accession negotiations in June.

Concluding Thoughts

The main objective of the summit in Berlin was to send a clear message that the demarcation between Serbia and Kosovo will not be allowed, and to exert additional pressure on the Serbs. At this summit, Germany and France also clearly stated that it was completely unacceptable for them to change the boundaries along ethnic lines. Also, the European Union makes it clear that they want to resolve the Kosovo issue.

However, the fact that there are no representatives of the United States in the negotiations does not reflect the real situation. Kosovo Prime Minister Ramush Haradinaj has recently publicly stated that Kosovo has no foreign policy, but that the foreign policy of Kosovo is lead by the United States. The only reason why the United States is not officially present in the negotiations is that it could be a reason for Russia to engage in negotiations.

And the change in the format of negotiations and the entry of Russia into the new format of negotiations would be the strategic interest of Serbia. Unfortunately, the current Serbian government does not open that question. Exactly opposite, President of Serbia Aleksandar Vucic led secret negotiations with Hashim Thaci and Federica Mogherini, illegally arranging demarcation between Serbia and self-proclaimed Kosovo. Aleksandar Vucic, together with Serbian Foreign Minister Ivica Dacic, has already done a great deal of damage to Serbian interests in Kosovo. Signing the Brussels Agreement,  Vucic and Dacic agreed to the abolition of Serbian institutions in Kosovo. So now there are border crossings between Serbia and Kosovo, in northern Kosovo which is  predominantly inhabited by Serbs now is established Kosovo Police. And Serbian judges  now take an oath to President of self-proclaimed Kosovo Hashim Thaci, who is considered a terrorist in Serbia.

Serbian authorities strongly lobby in Russia that official Moskow accept the plan of demarcation between Serbia and Kosovo. Recently, Serbian Foreign Minister Ivica Dacic was in Moscow, while the Serbian President recently met in Beijing with the President of Russia. However, Russian President Vladimir Putin and Foreign Minister Sergey Lavrov have repeatedly made clear that Russia supports any agreement between Serbia and Kosovo, which is within the framework of the UN Resolution 1244. That is a very smart position of Russia, supported by an absolute majority of Serbian citizens.

Because if the plan of current Serbian authorities was accepted, that would result in an independent Kosovo, against which is the absolute majority of Serbian citizens. An independent Kosovo would soon be united with Albania, which is a member of the NATO alliance, and Kosovo would automatically become a NATO territory. All this would result in Serbia’s accelerated path to NATO and EU, as well as the introduction of sanctions against Russia.

First published in our partner International Affairs

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