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The Fall of the Social State and Rise of Neo-liberalism

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European integration has been transformed into neo-liberal project when the economic crisis and global competition were strengthened starting from 1970s. There were other important occurrences which caused a shift in economic model, like 1973 oil price hike, 1975 U.S. defeat in Vietnam, halt in Bretton Woods System in 1971. After Keynesianism, rising social responsibilities of states and caring the class which consumes without producing also accelerated unavoidable economic shift.

Particularly, after economic crisis in 1973, it was identified that traditional approaches to economy is insufficient. Structural weakness of the economy was also revealed in the comparison with the U.S. and Japan’s economic development. In this situation, three main debates appeared over restructuring socio-economic order of Europe. The fundamental axis of ideological struggles within the European capitalist class in the beginning of 1980s constituted the contrast between neo-mercantilism and neo-liberalism. Neo-mercantilists had the view of “Europeanism”. They were the main industries which were producing for only Europe. Therefore, they wanted to create a strong European market which is resilient to outside competition. Thus, how and to what extent the European capitalist class has shaped the transformation of the European order largely depended on the outcome of the struggle between Europeanists and globalists.

The third adversary capitalist model – social democratic model appeared in the second half of 1980s. The main concern of this model was that social dimension should be added to the completion of internal market. Social democracy model was suggested by Jacques Delors in 1985 (president of European Commission) with promising high level of social protection against the possible disruptive forces of neoliberalism and globalization.Thus, European Social Model appeared in Delors’ vision that European capitalism should combine both the needs for welfare and sustainable growth, social solidarity and competitive market. To reach these goals, it was aimed to create strong European institutions and support state-building programs together with market-building. To make European market stronger against the global competition converged social model defenders to neo-mercantilists.

Indeed, all three models supported the accomplishment of internal market. However, the significant friction occurred on the question how the single market should be completed. The answer of neoliberalism was that trade liberalization should be increased and large external openness should be added there. On the other hand, social model supported regulation of market by a single supra-national power, namely Commission.The third project – neo-mercantilism supported interventionist industrial policy by increasing external tariffs in order to protect the internal market form outside competition.

The debate on the completion of market was resulted with the victory of neo-liberalist model of capitalism. The steady support and lobbying of corporate sector, while the weakness of labor unions were the main reasons for the victory of neo-liberalism. In Europethe shift towards state ownership or privatization, labor markets’ flexibilisation and pressure on wage demands started to be strengthened form 1980s which significantly decreased the power of labor unions. While support for further liberalization has been increased with the 200 TNCs and 500 corporate lobby groups based in Brussels, it wasn’t thought that the ignorance of labors’ social demands will cause resurgence of social model. Neo-Gramscian theorist van Apeldoorn particularly mentions the promotion activities of European Round Table Industrialists for global liberalism.

The turn of neo-liberalism has certainly been started in European integration after the creation of Single Market in 1987. Neo-liberalist approach was promoted with the claim of treating the deficiencies of the social welfare state, like increase in welfare, formation of rational and responsible individuality and productivity. In the beginning, it was accepted to provide a middle path (social democratic) and state intervention along with the free market. However, the further development of the approach was far from meeting the expectations of social policy and social welfare. In particular, the increasing welfare gap among social classes, income inequalities, increase in poverty and interest rates, erosion of job security and rise in the levels of unregistered employment increased the discontent substantially in the social sectors.

After completion of Single Market, further steps in integration, like European Monetary Union, Lisbon Strategy have been totally based on economic liberalization and preference for competition. Considering anti-globalization movements, EU became active in social policy improvement, whereas these movements were constrained by the claims for competitiveness, economic efficiency and stabilization. For example, Phipip Whyman, Mark Baimbridge and Andrew Mullen exemplify 1989 Social Charter and 1999 Luxembourg and Cologne process for the creation of European Employment Pact. They argue that the former process aimed to respect for national differences in social systems and the latter planned to deliver job-creating growth and decrease the burden on workers by reforming taxation and social security systems. However, the authors criticize that Employment policy guidelines have been left for the decision and control of member states. According to Cologne process, member states had to develop and implement their national action plans for employment improvement on their own and then they could publish the consequences in the joint employment report after Commission’s approval. They further claim that in this situation, there can’t be formed a unified EU level welfare state.

Social Policy Agenda (2000) under Lisbon strategy aimed to modernize social protection and to create more and better jobs. However, there was a critic about EU’s social initiatives that all social policies were limited to voluntary coordination and social dialogue which shows the absence of willing for formulating a common and regulated mechanism.

Starting from 1990s, there appeared important deficiencies in neoliberalism which gave a way for resurgence of ESM discourse. One of the main flaws was related to the rising power of Trans National Corporations. Corporations’ unwillingness for organized labor market, stabilizing welfare benefits by ensuring work pays and increase in payment for social expenditure resulted with rise in poverty and social inequalities. They have played a crucial role in transforming of World Order by penetrating not only to economy, but also to policy-making process through lobbying endeavors and media by using propaganda. Phipip Whyman, Mark Baimbridge and Andrew Mullen argue in their book that TNCs started to govern the economics and became more wealthy and powerful after neo-liberal revolution and spreading the dominance of globalization. For example, worldwide sales of TNCs were smaller than world exports in 1960, however they got 247 per cent of world exports in 2000. Following this, Chomsky also declared neo-liberal world order as “new imperial age” by claiming that World Bank, GATT, IMF were programmed to serve the interests of TNCs and investment firms.

Global trade in services and goods started to be dependent on TNCs and this process of corporate concentration has been speed up by trade deals, like Single Market (in 1987) or NAFTA (in 1994). Moreover, as the two-third of TNCs were based in North (Japan, Europe, North America), FDIs in the form of acquisitions and cross-border mergers were substantially centered in core countries. This concentration of FDIs deepen core-periphery divergence and make periphery stay outside by increasing interpenetration of core countries.

Neo-liberal policies and its social consequences

Source:Peters, John. «Labour market deregulation and the decline of labour power in North America and Western Europe.» Policy and Society, 2008: 83-98.

Neoliberalism has been unsuccessful to reach its aims in terms of social well-being and economic efficiency. If we compare the period 1980-2000 with the previous twenty years (1960-1980), then we can easily identify that the latter period has been more successful in terms of well-being indicators and quality of life, than the former. Furthermore, annual rate of economic growth per capita has been lower in the EU when neo-liberalism peaked in 2000. The author also elaborates that class inequalities have increased substantially in Europe’s capitalist countries. To prove the hypothesis of increasing income inequality, Branco Milanovic came a conclusion that world population’s top 1 per cent obtained 57 per cent of the world income between 1995 and 2000.

Income and other social inequalities have appeared due to the class-determined policies. In other words, as neo-Gramscian theorists argue, hegemon classes in the form of lobby groups (European Round Table of Industrialists, World Economic Forum, Trilateral Commission and so on) directly influence to the decisions of governments. These decision and policies constitute the core of neo-liberalism which undermined the implementation of social policies.

One of the main public policy in neoliberalism was the deregulation of labor markets. John Peters argues in his article that the most significant consequence of labor markets’ deregulation was the decline in salaries and job security, while rise in temporary employment. This policy also eliminated the power of trade unions to change the nature of jobs through collective negotiations. The initiative of deregulation and allowing businesses to define wages have been started by Ronald Reagan and Margaret Thatcher with claim of supporting businesses. Table 1 shows the percentage of trade union membership in the EU after the launch of neoliberalism until its peak – 2003. Between this period of time we can observe a slight decline in the membership for Trade Unions in developed countries.

Table 1: Trade Union density

Then deregulation of financial markets and commerce in goods and services were followed. Deregulation for consumers was beneficial in terms of having more choices and superior customer service, however it was more detrimental for consumers who have worse socio-economic conditions. These types of customers can’t pay more for products and have been left for the mercy of businesses who mainly care their profits than social responsibility.

Another crucial neo-liberal policy was the reduction of social public expenditures which was harmful for working class. Government spending on social programmes has been cut through austerity measures which aimed to reduce budget deficits. Member countries started to reduce public debts and budget deficits within austerity measures after Maastricht Convergence Criteria which sharpened the already high unemployment rates. The trouble due to rising unemployment rates persuaded European Council to formulate European Stability Pact in 1997 which has played a crucial role in the process of cutting social expenditures. The main objective of Stability and Growth Pact was to ensure the commitment of member states to the Maastricht Convergence Criteria. However, the commitment about keeping deficit below 3 per cent of GNP has been strengthened which resulted with large reductions of social public expenditures.

The situation deteriorated for working class who use public services, with the next policy of privatization of services. U.K.’s large privatization experience has been a model for other countries, in particular after Maastricht Convergence Criteria. Privatization aimed to reduce public debt level and budget deficit. Privatization of assets and public sector services was continued after euro crisis in 2008 under Troika.

From the beginnings of 1990s the discourse of promotion of ant-interventionism has been reinforced under neo-liberal model. Despite the acceptance of state interventionism in neo-liberalism, the new discourse of ant-interventionism appeared to support the interests of TNCs and dominant classes.

Matthew Eagleton-Pierce explains the promotion of individualism and consumerism in neo-liberalism and relates the term of individualism with the term of choice. He further claims that the relationship between neo-liberalism and consumer choice is in contrast with the culture of collectivism. Starting from the 1970s, collective forms of socio-economic organization has been challenged by business lobbies and conservative governments. To show the correlation, he exemplifies that the decline in trade union participation in Western Europe started to weaken socialist-inspired goals and to erode bargaining positions.

Sabina Jahanli is PhD student at Corvinus University of Budapest in the department of Political Science. She is a graduate from Central European University and Budapest Business School’s International Relations MA Program. She has participated in Student Scientific Conference which is a national research competition in Hungary and was awarded with the first place twice in 2016 -17. She has also been a visiting student to Centre for EU- Russia Studies at University of Tartu in 2019.

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Digital COVID-19 vaccine passports have arrived- why they are a bad idea

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With the arrival of the first batches ofCOVID-19 vaccines at various countries, there have been a number of statements by public officials and corporate executives who are calling for a global “vaccine passport” which will offer those who get vaccinated freedom to travel and the ability to enter venues, restaurants, sport events and even schools.

The framework for the implementation of a global vaccine passport has already been established by the Commons Project, a non-profit organization backed by the World Economic Forum and the Rockefeller Foundation. Some of its key people are former Bill Clinton aide Paul Meyer, former Engineering VP of Google Alan Warren and Hong-Kong based investor Jennifer Zhu Scott.

The Commons Project has created the Common Pass, a mobile application in which people will register when they get the vaccine from certain vaccination sites. In order to board a flight or enter a restaurant a person will have to scan a QR code provided by the Common Pass that will contain their vaccination status. If they are not vaccinated they will be denied entry.

The Common Pass is already active; it was recently tried on flights of United Airlines & Cathay Pacific, where it was used as a platform to register traveler’s Covid-19 test results. Four more companies (JetBlue, Lufthansa, Swiss International Airlines and Virgin Atlantic) have decided to use it.

In the future, the Commons Project aspires to extend the use of the Common Pass to venues, stadiums, public transport and even schools, while there is also a strong possibility that it may be applied to other industries such as hospitality and entertainment. UK’s vaccination minister Nadhim Zahawi, recently said that restaurants, cinemas and bars might effectively ban those who are not vaccinated.

If the Common Pass is established as a global vaccine passport, millions of people from different countries will be forced to give their personal health and travel information to a private entity in order to have the ability to travel, go to school, attend a concert or go to a club. Through the use of the Common Pass people will basically be coerced into getting vaccinated, while there are also serious privacy concerns.

But even though there has been a campaign by the media to portray those who are skeptical of COVID-19 vaccines as a minority of “crazy anti-vaxxers” that reject any kind of vaccination, this is simply not true.

In fact a large part of the global population hesitates to get vaccines that have been developed within 10 months when it normally takes 10 years. Especially younger people without health issues who face minimal risk of getting seriously sick from COVID-19 feel that a potentially unsafe vaccine poses a bigger risk to them than the virus itself.

After all, no one can deny that, because of the pandemic, compromises on safety were made during the development of the vaccines. The clinical trials for most of the vaccines were completed after the mass production had already started and they lasted few months instead of the standard 5-9 years, while pharmaceutical companies have been given immunity by western governments from liabilities regarding potential unknown serious side effects of their vaccines.

In this uncertain environment, corporations and governments trying to vaccinate the whole population by imposing coercive measures such as digital vaccine passports will only add to the skepticism against the COVID-19 vaccines. Moreover new issues of privacy and the handling of personal health data from private entities will arise and will complicate even more the discussion around the pandemic, while also undermining further the confidence of the people in existing institutions.

Besides, what exactly is the point of such draconian measures when, as the England’s deputy chief medical officer Prof Jonathan Van-Tam has said, the vaccination of just the high risk groups is enough to eradicate the 99% of hospitalizations and deaths from COVID-19?

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Greece and UAE’s Strategic Cooperation: A New Regional Equilibrium in the Making

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UAE Minister receives Minister of Foreign Affairs of Greece (Photo: WAM)

The agreement on Joint Cooperation in Foreign Policy and Defence between Greece and the United Arab Emirates (UAE) is a milestone for bilateral relations and for the wider region. It was signed during the official visit of the Greek prime minister to the UAE on 18th November 2020. The agreement seals the determination of both countries to enhance their strategic partnership in the domain of defence with the aim to foster cooperation and jointly address common challenges and threats.

It is in this context that the agreement contains a mutual defence clause or else a mutual military assistance clause that equals to a common defence doctrine as it foresees that in case either country is threatened or attacked, both are committed to contributing to the defence of the other to ensure their sovereignty and territorial independence.

The clause contained in the agreement on Joint Cooperation in Foreign Policy and Defence has a purely defensive character and is the maximum that can be achieved between two countries that do not share common borders. For the implementation of the agreement, a regular consultation mechanism has been instituted at the level of Foreign Ministers, while a Supreme Joint Committee between Greece and the UAE is to be established.

The agreement also foresees the stationing of military forces of one country in the territory of the other, and the exchange of classified intelligence information. This provision comes to institutionalize the stationing of military forces of Greece, a member state of NATO and the EU, and of the UAE, a member country of the Gulf Cooperation Council to each other’s territory. It is noteworthy that at the height of the Greek-Turkish crisis in August 2020 when seismic vessel Oruc Reis conducted surveys in maritime areas that partly fall within the Greek continental shelf, the United Arab Emirates relocated four F-16s to the Greek island of Crete, where they were stationed for two weeks and participated in joint air exercises with the Hellenic Air Force.

The value of joint military exercises between Greece and the UAE is significant especially when taking into consideration that the Emirati armed forces are one of the most modern in the region that are technologically equipped with state-of-the-art weapons systems. The UAE’s Air Force has 68 Mirage 2000 French fighter jets and 78F-16 American fighter jets; its Navy has 11 corvettes, and the government of Abu Dhabi is the first in the world that has acquired the Terminal High Altitude Area Defence (THAAD) anti-aircraft system of Lockheed Martin. The system is designed to shoot down short-, medium-, and intermediate-range ballistic missiles in their terminal phase by intercepting with a hit-to-kill approach. In total, 100,000 people serve in the UAE Army, Navy and Air Force.

An additional agreement for the training of technicians from the UAE in the Greek Aviation Industry is to be finalized soon. The Armor Training Centerin Avlona is scheduled to host Emirati technicians, due to its proximity to the technical base of the Greek Aviation Industry in an area of ​​about 90 acres within which all necessary infrastructure and facilities will be constructed.

The Greece-UAE agreement on Joint Cooperation in Foreign Policy and Defence has been concluded in view of broader regional security arrangements and intends to counter Turkey’s assertive behaviour and expansionism that extends from the Arab (Persian) Gulf and Syria to Libya and the East Mediterranean Sea. Already, the UAE participates in the 3+1 formula consisted of Egypt, Cyprus, and Greece along with France and regularly discusses regional crises that threaten peace and stability including developments in the East Mediterranean.

The Joint Declaration adopted by the Ministers of Foreign Affairs of Cyprus, Egypt, France, Greece, and the United Arab Emirates in May 2020clearly criticized Turkey for its pirate behaviour and gunboat diplomacy that aim to advance Neo-Ottomanism. As known, Neo-Ottomanism  is the vision of contemporary Turkish foreign policy whose scope is to restore Ankara’s influence in the areas of the former Ottoman Empire and thus turn Turkey into a leading power in the East Mediterranean, the Middle East, and the Balkans.

Acknowledging Turkey’s expansionist strategy in the broader region, the UAE, Greece, Egypt, France and Cyprus denounced Turkish illegal activities in the Cypriot Exclusive Economic Zone and territorial waters, that plainly violate the United Nations Convention on the Law of the Sea (UNCLOS). They also condemned Turkey’s continuing violations of Greece’s territorial waters and airspace as well as Ankara’s military interference in Libya urging Turkey to fully respect the UN arms embargo, and to stop the influx of foreign fighters from Syria to Libya.

These developments that constitute a threat to the stability of the broader region and of Europe accelerated the cementing of regional defence and diplomatic arrangements.  The normalization of relations between the UAE and Israel constitutes a cornerstone of peace-making and regional partnerships. So does the UAE-Greece agreement on Joint Cooperation in Foreign Policy and Defence. The joint agreement and the mutual defence clause ensures the ability of both countries to exercise self-defence in accordance with article 51 of the UN Charter that explicitly recognizes that a UN member state has the right to legitimate defence not only in the event of an armed attack against it, but also in the event of a “threat of use of force”.

Especially when it comes to Greece, Athens is entitled to defend itself especially when taking into consideration Turkey’s timeless provocations and military escalations that are evidenced by: (a) the establishment of the Aegean Army in the ‘70s with an offensive posture, (b) the invasion and occupation of part of Cyprus, (c) Turkey’s repeated violations of Greece’s territorial waters and airspace that are estimated at around 7,000 only for 2019, and (d) the casus belli proclaimed by the Turkish Parliament in case Greece extends her territorial waters up to 12 nautical miles.

The multiple crises triggered by Turkey across the broader region haven given the opportunity to Greece and the UAE to display their large regional alliance network. Greece and the UAE along with like-minded and western-oriented regional countries coordinate policies; The ultimate goal lies in stopping Turkey from acting like a neo-ottoman pirate state in the East Mediterranean.

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Great Powers Competition in Moldova

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Image source: Wikipedia

Moldova is the forgotten epicenter of tensions between the West and Russia, located between Romania and Ukraine, with no direct access to the sea since the territorial changes of the Soviet era. This country of 3.3 million inhabitants for 33,846 square km is plagued by ethnic divisions with Gagauzia and Transnistria, two territories diplomatically close to Moscow. Both the Kremlin and Brussels are reluctant to integrate Moldova into their respective zones of influence due to several elements detailed in this article, which has led to a political situation that has alternated pro-European and pro-Russian governments since the end of the Cold War.

Confirming this unstable political context, Maia Sandu, a pro-European Moldovan stateswoman, was elected president of the country on November 15, 2020, succeeding pro-Russian Igor Dodon. However, this election should not lead to a rapprochement between the West and Moldova, as the major powers are accustomed to considering the country as a political no man’s land, in contrast to the other members of the Eastern Partnership.

The Kremlin’s Reluctance to Take a Proactive Approach in Moldova

For Moscow, the lack of access to the Black Sea makes Moldova less strategically important than other countries in the region. As such, the Kremlin was more active in Crimea and Georgia with the diplomatic recognition of Abkhazia and South Ossetia, in contrast to Moldova, where no noticeable change has taken place in Transnistria since 1992.

This situation is paradoxical because a rapprochement between Moscow and Chisinau could confer many strategic advantages on the Kremlin. In this respect, better Russian-Moldovan relations would thus hinder any possible advance of the European Union and NATO in Molodva, and could also force Ukraine to reconsider its diplomatic approach vis-à-vis the Eurasian Economic Union (EEU). Moreover, the strengthening of military cooperation between Moscow and Chisinau would increase pressure on Romania, which is favourable to Moldova’s integration into Euro-Atlantic institutions.

Moscow’s cautious approach is all the more paradoxical given that Russia has sympathisers in Moldova with the two territories of Transdniestria and Gagauzia, Tiraspol and Comrat, wishing for rapprochement and even integration within Russia.

For Transnistria, which has been de facto independent of Moldova since the end of the Cold War and whose desire for integration into the Russian Federation was demonstrated by the 2006 referendum with 97.5% of the votes in favour, a diplomatic rapprochement between Moldova and Russia could improve relations between Tiraspol and Chisinau.

On an economic level, if Moldova joins the EEU, Transdniestria could be taken into account, with Chisinau considering it as part of its territory and Tiraspol having an economic interest in aligning its standards with those of Russia.

On the military level, an increased influence of the Kremlin in Moldova would make it possible to negotiate the integration of Chisinau into the Collective Security Treaty Organisation (CSTO). If this were to happen, the Kremlin could reduce the presence of Russian peacekeeping troops in Transdniestria. In effect, if Moldova joins the CSTO, Moscow would become the protector of Moldova and de jure of Transdniestria, as this territory is a part of Moldova in accordance with Russian, Moldovan and international law.

The withdrawal of Russian soldiers from Transnistria, who are monitoring the contents of Soviet military equipment warehouses, is a source of tension between the West and Russia. In November 2008, the NATO Parliamentary Assembly adopted a resolution calling on Russia to withdraw its forces in accordance with the commitments made at the 1999 OSCE summit in Istanbul. The UN General Assembly adopted a similar resolution (document A/72/L.58) calling on the Russian Federation to pull out of Moldovan territory in June 2018.

With Moldova close to Russia, Russian peacekeeping troops would be given the opportunity to withdraw or reduce their numbers, thus easing tensions between the international community and Russia. For the Kremlin, this would also allow it to optimise operating costs and allocate this budget to other peacekeeping operations, including the Nagorno-Karabakh troops, which have been operating since November 10, 2020.

The second pro-Russian territory of Moldova is Gagauzia, which extends over 1,830 square kilometres divided into four non-contiguous zones, grouping around fifteen communes into three districts. Unlike Transnistria, which is de facto independent of Chisinau, Gagauzia is incorporated into Moldova. The inhabitants are initially Turkish-speaking, largely Russified during the 19th and 20th centuries, and now culturally distinct from the Turks.

The Russian-speaking Gagauzs wish to move closer to Russia because they have little advantage in learning Moldavian (Romanian language). Historically, Russia appears to be a country that protects Gagauz interests, a fact that still permeates relations between Moscow and Comrat (the capital of Gagauzia) and bears witness to Moscow’s soft power in this territory.

Comrat is in favour of strengthening the influence of the Kremlin in Moldova in order to promote the Russian language against Romanian, but also to restrict the influence of Bucharest, the fear of the Gagauz being integrated into a “Greater Romania” which would not defend their interests.

Given these elements, and despite the strategic advantages that a rapprochement between Moscow and Chisinau could bring, Moldova remains a political no man’s land for Russia. Moscow’s reluctance to become more involved stems from several factors, the main one being the economic health of the country, the poorest on the European continent with a nominal GDP of $4,498, which means that integration into the EEU would not strengthen the latter’s economic power, making Moldova dependent on other members.

Enlargement of the CSTO into Moldova would lead to a deterioration in Moscow’s relations with the western world, particularly with Romania, and would have repercussions for all the countries of the Black Sea, which could encourage certain states such as Georgia to speed up their rapprochement with NATO and the EU.

An Expensive Investment That Diminishes Interest in the Western World

Moldova is of little economic interest to the EU, with the only competitive sector being agricultural products due to the abundance of rare earth. In addition, the corruption of elites and the departure of young graduates hampers the emergence of new services and active civil society.

Chisinau invests a mere 0.4% of its GDP in its armed forces, with fewer than 6,000 soldiers relying on Soviet equipment, and therefore of little interest to NATO. Apart from the lack of military means, Moldova is a neutral state that does not wish to join an alliance (NATO or CSTO). A poll carried out in 2018 shows that 22% of Moldovans are in favour of a project to join NATO and 43% against it.

While Moldova’s integration into the EU would be a strong symbol and testify to the resilience of Brussels’ soft power in a post-BREXIT context, it would be expensive and the EU would have to invest considerable sums within the framework of the Eastern Partnership to enable Chisinau to meet the accession criteria.

Integration into the Schengen area would trigger a demographic crisis, with young Moldovan citizens having few opportunities at home. Consequently, the European Union prefers to adopt an attitude similar to that of Russia and consider Moldova as a political no man’s land.

In this regard, the result of the elections of November 15, 2020, with Maia Sandu attests to the influence of western influence in the country, but also highlights the lack of confidence in Dodon’s leadership, who has not managed to achieve a rapprochement with Russia during his term as President.

The EU-Moldova cooperation sought by Maia Sandu will struggle to emerge due to the lack of human resources in the country and the absence of infrastructure to export and import goods. Moldova has not had the financial means to modernise its road and rail networks since the fall of communism.

Romanian Ambitions in Moldova

Because of its cultural and linguistic proximity to Moldova, Bucharest would like Chisinau to move closer to the Euro-Atlantic structures of which Romania is a member, even considering going as far as full integration with the rebirth of a “Greater Romania,” which brought the two states together from 1918 to 1940. This prospect is not acceptable to the Gagauz and Transnistrians, but also to many citizens and Moldovan elites, as the country would become an impoverished region of Romania with no control over its future.

Romania’s proactive approach is a source of apprehension for Russian speakers and an argument in favour of Transnistrian and Gagauz separatism. Bucharest is especially influential because the administration has adopted a policy of “passportisation” in Moldova. Romanian citizenship is granted to Moldovans who apply for it and can prove that they have a Romanian ancestor, thus granting European citizenship with its benefits. In total, more than 726,100 Moldovan citizens have thus become Romanians since the end of the Soviet Union.

A facetious remark circulating in Moldova mentions that the country is going to join the European Union, with or without the agreement of Brussels, since there will soon be no Moldovans and only Romanian citizens.

Beijing’s Soft Power in the Black Sea

As in the rest of the Black Sea, the Chinese influence in Moldova has increased in recent years. Beijing is interested in this territory because of the lack of infrastructure and the prevailing corruption, which allows Chinese companies to offer all types of partnerships in exchange for various counterparts.

In 2015, the Chinese company SOE China Shipping Container Lines launched container transport services in the Moldovan port of Giurgiulesti — the country’s only harbour accessible to Black Sea vessels — via the Danube, after signing a terminal services agreement with the national operator. This investment enabled Chisinau to export its products abroad, especially as its economy was suffering from the Russian embargo on Moldovan wine imports. According to local companies, the international free port of Giurgiulesti should continue its development and become a logistics platform with a business park enabling Chinese companies to access the European and Eurasian markets.

Moldova has started negotiations on a free trade agreement (FTA) with Beijing in 2017, removing barriers to the import of certain products and strengthening business exchanges. According to forecasts published by the Moldovan authorities, Moldova’s exports to China could increase by 39.85% and its GDP by 0.42% as a result of the FTA.

The most significant development took place in 2019, when Moldova concluded an infrastructure agreement with two Chinese contractors for the construction of nearly 300 kilometres of roads, at an estimated cost of $400 million. One road will surround the capital Chisinau and the other will link Ukraine to the north. Two Chinese companies — the China Highway Group and the China Railway Group Limited — will participate in this project, marking the first Chinese-led infrastructure project in Moldova. According to Chisinau, the projects will significantly improve traffic and contribute to overall economic growth. A total of 12 major Chinese companies also participated in the Chisinau Business Forum in April 2019, underlining their commitment to increase investment in the country. In the context of the Covid-19 crisis, the Chinese authorities announced that the debt of 77 countries, including Moldova, had been temporarily suspended.

Beijing’s choice to focus its attention on Moldova is explained by the country’s non-alignment, but also by the reluctance of Moscow and the European Union to become more involved. China is, therefore, meeting no resistance from the Russians or westerners.

For the Kremlin, Chinese investments in the region could harm the ambitions of Brussels and Washington in Moldova, China being an ally of Russia. While for westerners, China was providing considerable aid to the EU by modernising infrastructure, which could bring Chisinau closer to Romania and the EU because of the weakness of Chinese soft power, cooperation between Beijing and Chisinau is confined to the economic sector.

No Man’s Land or Chinese Gateway to the Black Sea?

In conclusion, Moldova is one of the epicentres of the tensions between the West and Russia, but the latter are reluctant to increase their involvement because of the unfavourable economic context, as well as the lack of direct access to the Black Sea.

For the EU and NATO, the results of the recent elections should, in theory, lead to a rapprochement, but in practice Transnistria and Gagauzia will hinder the most ambitious projects. Romania is called upon to play a leading role in this rapprochement, but the divisions between Bucharest and Chisinau are a reality to be taken into account and the rebirth of a Greater Romania seems unlikely.

Russia has a strategic interest in increasing its influence in Moldova by integrating Chisinau into the EEU and the CSTO, but this would encourage other Black Sea countries such as Georgia to draw even closer to the western world. Moreover, the presence of Russian troops in Transdniestria and the pro-Russian position of Comrat allow the Kremlin to remain present in the region, independently of Chisinau’s diplomacy, which does not encourage Moscow to develop a pro-active policy.

Beijing’s economic diplomacy seems to be producing results and bringing the two states closer together. In this respect, China has succeeded in modernising the Moldovan infrastructure despite obstacles rooted in corruption. This makes Moldova a potential laboratory for Chinese soft power and indirectly benefits both westerners and Russians.

In view of the results of the November 2020 elections, it seems appropriate to pay attention to the rapprochement between Russia and Transnistria, a process that could be accentuated if Maia Sandu confirms her pro-western policy. Gaguzia could gain in importance, as a move towards the EU and NATO could lead to the resurgence of separatism in this region.

Resources

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LAMBERT Michael, Stratégies de mise en place des Soft Power européen et russe en Moldavie après la guerre froide, Études de l’IRSEM n° 40, 2015, 94 pages (www.defense.gouv.fr/content/download/393969/5890290/file/Etude_IRSEM_n40.pdf)

LAMBERT Michael, Comprendre la présence militaire russe en Transnistrie, Revue Défense Nationale 2019/3 (N° 818), pages 107 à 112.

KLEIN Margarete, Russlands Militärpolitik im postsowjetischen Raum. SWP-Studie, 2018

BABAN Inessa, «The Transnistrian Conflict in the Context of the Ukrainian Crisis», Collège de défense de l’Otan 2015, Research Paper n° 122, 12 pages (www.ndc.nato.int/download/downloads.php?icode=468).

KLIMENKO Ekaterina, «Protected Armed Conflicts in the Post-Soviet Space and their Impact on Black Sea Security», SIPRI Insights on Peace and Security n° 2018/8, décembre 2018, 28 pages (www.sipri.org/sites/default/files/2018-12/sipriinsight1808_0.pdf)

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