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Why German car giant Volkswagen should drop Turkey

Iveta Cherneva

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War and aggression are not only questions of ethics and humanitarian disaster. They are bad news for business.

The German car giant Volkwagen whose business model is built on consumer appeal had to stop and pause when Turkey attacked the Kurds in Syria. A USD 1.4bln Volkswagen investment in a new plant in Turkey is being put on hold by the management, and rightly so.

Unlike business areas more or less immune from consumer pressure – like some financial sectors, for example – car buying is a people thing. It is done by regular people who follow the news and don’t want to stimulate and associate themselves with crimes against humanity and war crimes through their purchases. Investing in a militarily aggressive country simply is bad for an international brand.

As soon as the news hit that Turkey would be starting their military invasion against the Kurds, questions about plans for genocide appeared in the public discourse space. Investing over a billion in such a political climate does not make sense.

By investing into a new plant next to Turkish city Izmir, Volkswagen is not risking security so much. Izmir itself is far removed from Turkey’s southern border — although terrorist attacks in the current environment are generally not out of the question.

The risk question rather lies elsewhere. Business likes stability and predictability. Aggressive economic sanctions which are likely to be imposed on Turkey by the EU and the US would affect many economic and business aspects which the company has to factor in. Two weeks ago the US House of Representatives already voted to impose sanctions on Turkey, which now leaves the Senate to vote on an identical resolution.

Economic sanctions affect negatively the purchasing power of the population. And Volkswagen’s new business would rely greatly on the Turkish client in a market of over 80mln people.

Sanctions also have a psychological “buckle-up” effect on customers in economies “under siege”, whereby clients are less likely to want to splurge on a new car in strenuous times.

Volkswagen is a German but also a European company. Its decision will signal clearly if it lives by the EU values of support for human rights, or it decides to look the other way and put business first.

But is not only about reputational damage, which Volkswagen seems to be concerned with. There are real business counter-arguments which coincide with anti-war concerns.

Dogus Otomotiv, the Turkish distributor of VW vehicles, fell as much as 6.5% in Istanbul trading after the news for the Turkish offensive.

Apart from their effects on the Turkish consumer, economic sanctions will also likely keep Turkey away from international capital markets.

There is also the question of an EU company investing outside the EU, which has raised eyebrows. It is up to the European Commission now to decide whether the Volkswagen deal in Turkey can go forward after a complaint was filed. Turkey offered the German conglomerate a generous 400mln euro subsidy which is a problem when it comes to the EU rules and regulations on competition.

The Chairman of the EPP Group in the European Parliament, Manfred Weber filed a complaint with the EU competition Commissioner about the deal, on the basis of non-compliance with EU competition rules. Turkey’s plans to subsidize Volkswagen clearly run counter EU rules and the EU Commission can stop the 1bln deal, if it so decides.

In a context where Turkey takes care of 4mln refugees — subject to an agreement with the EU — and often threatens the EU that it would “open the gates”, it is not clear if the Commission would muster the guts to say no, however. In that sense, the German company’s own decision to pull from the deal would be welcome because the Commission itself wouldn’t have to pronounce on the issue and risk angering Turkey.

While some commentators do not believe that Volkswagen would scrap altogether the investment and is only delaying the decision, it is worth remembering that the Syria conflict is a complex, multi-player conflict which has gone on for more than 8 years. Turkey’s entry in Syria is unlikely to end in a month. Erdogan has communicated his intention to stay in Syria until the Kurds back down.

In October it was reported that the Turkish forces are already using chemical weapons on the Kurdish population which potentially makes Turkish President Erdogan a war criminal. For a corporate giant like Volkswagen, giving an economic boost for such a state would mean indirectly supporting war crimes.

As Kurdish forces struck a deal for protection with the Syrian Assad forces, this seems to be anything but a slow-down. Turkey has just thrown a whole lot of wood into the fire.

Volkswagen will find itself “monitoring” the situation for a long time. There is a case for making the sustainable business decision to drop the risky deal altogether, soon.

Iveta Cherneva is an author in the fields of security and human rights who previously served for five UN agencies and in US Congress. Her recent commentaries have appeared in Euronews, The New York Times, The Guardian, London School of Economics, The Fletcher Forum, Euractiv, EU Reporter and others

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Politics of Interests and Emotions: Serbia Between NATO and Russia

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The military training “Slavjanskoe Bratstvo – 2019” that is carried out annually by Russian, Belorussian and Serbian troops and that started earlier in June, has now finished its second phase which took place in the proximities of Belgrade. Russian and Serbian media have given particular emphasis to the event by highlighting its political importance for the relations of the two countries and their positioning in the wider continental context. An article published by the Russian online newspaper RIA Novosti on October 22, asserts that conjoint activities in the military sector are bringing Serbia and Russia closer to each other. Their cooperation started in 2014 when Putin attended a military parade in Belgrade. Since then Russia started to provide weapons to the Serbian arsenal. In the beginning of 2019 Serbia signed a contract for the acquisition of three attack helicopters Mi-35M and four transport helicopters Mi-17B5. Serbia also received several armoured BRDM-2MS vehicles from Russia as well as thirty T-72 tanks. Before that, in 2016 Serbia acquired six Mig-29 fighters. Russian Vice Prime Minister Juri Borisov declared that Serbia was interested in buying anti-aircraft missiles from the “Pancir” family. Serbs are already familiar with the Russian anti-aircraft defence systems as they already possess the 3PK “Kub” and the 3PC C-125 “Pečora”.  RIA Novosti remarks that it was the “125” to bring down the American F-117 in 1999 (during the Kosovo War), showing the world that there are no invulnerable aircrafts. So far there have not been any official statements about the acquisition of the S-400 but the article asserts that Serbia can already afford them as the government has increased the military budget by 30%, now reaching 910 million dollars.

According to an article published in the Serbian online newspaper Novosti on October 25, advanced Russian anti-aircraft missiles systems “Pancir -S” and “S-400 Triumph” arrived in Serbia in the night between 23 and 24 October. At the end of the drill the “Pancir-S” will remain in Serbia whereas the S-400 will return to Russia. The “Pancir-S” are short-middle range missiles which are meant to become the backbone of the Serbian air defence system. According to the same source, the Pancir and the former acquisition of the Mig-29 are the most important military equipment that Serbia has purchased in the last decades. Novosti highlights the capacity of the S-400 by stating that they constitute an “umbrella” that covers the greatest part of the Balkan air space. Both RIA Novosti and Novosti reflect the enthusiasm with which some political and intellectual cadres of Russia and Serbia have commented the event. Serbian president Aleksandar Vučić declared that he would personally go to see the weapons. RIA Novosti reported the words of the military expert Kostantin Sokolov who asserted that the close cooperation with Serbia is strategically important for Russia. The scholar reminded that Serbia is an Orthodox state that has always been a friend of Russia. He remarked that the presence of Russian technology in the military parade for the 75th anniversary of the liberation of Belgrade – which took place earlier in October and was attended by Russian Prime Minister Dmitry Medvedev – was a strong symbolical act. The article ends with a short note stating that Serbia is a non-aligned country and that president Alekandar Vučić has declared that as long as he is in charge Belgrade will never join the NATO.

Serbia is a NATO partner state and its participation in the “Slavic Brotherhood” training has generated criticism in the past. On October 27, Radio Free Europe/Radio Liberty published NATO’s declaration, which stated that the Western Alliance respected “Serbia’s right to make sovereign decisions about exercises on its territory”. In June 2019, when “Slavic Brotherhood 2019” was about to start, Balkan Insight reported the words of Serbian military expert Nikola Lunić who said that such operations were meant to exchange knowledge for the fight against terrorism. He pointed out that since Serbia established a partnership with NATO in 2006, Belgrade was far more collaborative with the Western Alliance than with Russia.  News about Serbia’s participation in a joint drill with USA and Bulgarian forces in Bulgaria in June 2019 are still available on the internet. This years’ “Slavic Brotherhood” training near Belgrade coincided with Serbia’s entry in the Euroasian Economic Union. The agreement was signed in Moscow on October 25, by Russian Prime Minister Dmitry Medvedev and his Serbian homologue Ana Brnabić. Novosti claims that the deal will advantage especially the exportation of Serbian cigarettes, alcoholic beverages and dairy products. According to the website of Radio Free Europe/Radio Liberty, few days before the official signature of the agreement, the European Commission spokeswoman Maja Kocijancic had declared that the EU was monitoring the negotiations. She also remarked that the EU was Serbia’s main trading partner with a total of 63% trade, whereas commerce with Russia amounts to 10% of the overall trade in the country.

The news about the arrival in Serbia of Russian weapons has been widely reported by online newspapers of the Balkan countries and has also generated worries among Serbs. Some Balkan websites (Danas.rs and Vesti.mk) published an article that was originally published by Deutsche Welle. The Russian-Serbian military cooperation is presented as a dangerous tabloid fairy tale that endangers the security of the Balkan region. The article cites a recent survey conducted by the Institute for European Affairs (in Belgrade), which shows that the USA are the biggest foreign financial supporters of the Serbian army. In 2018 Serbia received 2,375 million Euros from Washington out of slightly more than 2,5 million. Russia is among the five least important donors. According to the same survey, between 2012 and 2018 the Serbian army took part in 11 military trainings with theNATO and in 98 military trainings with NATO member states.

The aforementioned Serbian military expert Nikola Lunić declared to DW that Russia donated 10 war vehicles that cost 150.000 dollars in total to Serbia, whereas the USA donated 40 Humvee vehicles that cost 7.5 million dollars. Lunić pointed out that common people in Serbia do not know about the American donations whereas everyone is informed about the Russian ones. Retired Serbian air force general Sreto Malinović said that Serbian politics are producing a “schizophrenic situation”. On the one hand the government pursues pro-Western policies in order to gain access to the EU and on the other it feeds Russophile sentiments to the public opinion. Both Malinović and Lunić believe that their country is not equipped to use the S-400 and the arrival of these weapons in Serbia was meant to serve propagandistic aims in view of the next elections (of April 2020). Serbian military analyst Vlade Radulović declared that this type of propaganda creates the perception that Serbia cooperates more with Russia than with the USA. One of the stories that made a great impression on the public opinion was Russia’s alleged “gift” of MiG-29 aircrafts which will actually cost Serbia 185 million dollars. Lunić criticizes the attitude of the Serbian Defence Minister Aleksandar Vulin who had declared that Serbia has interests in cooperating with the NATO, whereas the agreement with Russia is determined by emotional thrusts. This contradictory policy prevents the normalization of relations in the region and hinders the dialogue with Kosovo. Lunić hopes that president Vučić will understand that if Serbia joins theNATO, the country will solve 90% of its security problems. He also said that Belgrade should collaborate with all its neighbours and consider Kosovo as a partner.

The contradictory opinions about the governments’ military collaboration with Russia reflect the general ideas about the Serbia’s attitude toward Balkan and Western political contexts. Part of the mainstream media such as Novosti echoes the rhetoric of the government about the historical and strategic importance of the alliance with Russia. The emphasis that has been placed on the acquisition of anti-aircraft weaponry such as the “Pancir-S” and on the possible acquisition of the “S-400” have a strong appeal on public feelings. The memory of the NATO bombings in 1999 during the Kosovo War is still strong. The day of the beginning of the NATO bombings (March the 24th) is celebrated in Serbia in order to remember the “crimes” that the Western Alliance committed against her. Advantages might come to Serbia if the future government manages to preserve its independency in the conduct of the military and foreign economic policies. However, as the detractors of the Belgrade government seem to fear, the preservation of the non-alignment position in a context of clearly aligned states, might isolate the country and turn Serbia from an independent agent to a servant of two masters because of the small negotiating power that Belgrade has in comparison to the NATO/UE and Russian blocks.

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Europe suffers from excessive care on the part of the U.S.

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Historically, the U.S. perceives the EU as a developing organization which needsguidance and advice. Though just a few years ago Europe seemed more united and found consensus more easily, the United States managed to influence the European politics easier. Everything has changed.

Europe “has grown out of children’s clothing” and has become a serious organization capable of making informed decisions by itself. As soon as France, Germany or any other European country starts to oppose the U.S. and express alternative opinion, Washington doesn’t tolerate this. It uses all available means to keep control over Europe, thus making tensions in Europe even harder.

One of such tools to manipulate the European states is “give something to get what you need later.” Washington gives support (financial, political or military) some European countries consider very precious, usually in exchange of their loyalty to all U.S. decisions. This gained loyalty allows the U.S. to defend its interests not only in Europe, but in other world regions either.
Let’s make some examples.

U.S. lawmakers announced an agreement on Monday on a $738-billion bill setting policy for the Department of Defense, including new measures for competing with Russia. In particular, it included sanctions on companies helping Russia’s gas giant Gazprom to complete the Nord Stream 2 pipeline project in the National Defense Authorization Act for the U.S. defense in 2020.
Russia is building the pipelines to bolster supply to Europe while bypassing Ukraine, and members of Congress have been pushing the Trump administration to do more to stop the projects.

Serious political tension is rising among the European countries relating this issue.
Some European Union member states, including Germany do not sacrifice national economic interests from realization the Nord Stream 2 pipeline project to please the U.S. and strictly oppose the U.S. sanctions.

The route will traverse the territorial waters through the Exclusive Economic Zone (EEZ) of five countries including Russia, Finland, Sweden, Denmark, and Germany.

Chairman of the Bundestag Committee on Economics and Energy Klaus Ernst even called the US sanctions against the Nord Stream 2 AG project “contrary to international law.” Ernst emphasized that the United States should not be bothered by the way in which Germany “shapes its energy policy.”
At the same time, Ukraine, Poland, Slovakia, Estonia, Latvia, Lithuania and Romania oppose the construction. Latvia and Lithuania call it political. In reality, they just support the U.S. in exchange of its military help. The matter is these countries highly depend on Washington in defense issues and consider the U.S. and NATO (where the U.S. is the leader) the only guarantee of their security in case of war with Russia. Europe is forced to be obliged to the U.S. And Washington strengthens its military presence in Europe to consolidate the status of defender.

A massive military exercise in Europe DEFENDER-Europe 20 involving 20,000 U.S.-based troops will take place soon in Europe. Even the name of the exercise speaks for itself. It is the largest deployment of U.S.-based forces to Europe for an exercise in the last 25 years.

The U.S. military unit, which employs more than 500 land force troops with heavy equipment – about 30 Abrams tanks, more than 20 infantry combat vehicles and other equipment have already arrived to Lithuania.

The more so, it is well known that the U.S. demonstrates in every way its commitment to the Baltic States’ defence and provides these countries with military equipment and arms. Thus the Baltics have no other choice but to support any US decisions. Such behavior, in its turn, makes tension among the EU member states stronger and does not strengthen relations, but leads to a further split in the EU.
Europe suffers from excessive care on the part of the U.S., butthe “log-rolling” model is in action. Europe became a bargaining chip in the confrontation between Russia and the U.S.

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From Normandy to Where? After the Paris Summit

Wang Li

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After NATO’s 70-year anniversary gathering last week, the world media once again focused on Europe last Monday (December 9). This time is about the prospect of relations between Russia and Ukraine, two sovereign states with a long history of the union. Though much uncertain ahead, there is still a good chance now, as Russian President Putin hailed the four-parties summit involving Russia, Ukraine, Germany and France in Paris on seeking to end the war in the east of Ukraine as an “important step” toward a de-escalation of the conflict. In terms of the multi-issues involved, the key question seems to be if the Paris summit would be able to usher in a peaceful phase for Russia and Ukraine and beyond.

As we all know, the disputes and the conflicts between the two sides occurred in the wake of the collapse of the former Soviet Union in 1992. Since then, NATO and EU have tried to enlarge their memberships in the name of peace and democracy but with no considering Russia’s core interests, as George Kennan warned then. As Russia and Ukraine are two sovereign states with the disputed territories and legitimate rights, their relations have been uncertain. It is true that Russia has inherited substantial power from the former Soviet Union. Yet, in light of the territory with so diverse natural resources and highly skilled labor forces, not mention of the comprehensive industrial system inherited from the Soviet Union, Ukraine is also of all the criteria to be a great power in Europe. But after 20 years since then, it is still struggling for national survival and international identity. Who should be blamed?

Due to the complicated historical, geopolitical and external involvement into Ukraine, its relation with Russia eventually collapsed following Crimea’s incorporation into Russia in 2014, which prompted Western sanctions against Moscow. It is estimated that over the past five-year conflict, more than 13,000 people have been killed in east Ukraine between pro-Russian forces and Ukrainian government troops. Yet in 2014, Russia, Ukraine and the Organization for Security and Cooperation in Europe (OSCE) launched the Trilateral Contact Group on Ukraine and the “Normandy Format” seen as peaceful mechanisms to mitigate the conflict in Ukraine. With the conclusion of the “Minsk Protocol” as a comprehensive agreement in 2015, Moscow and Kiev agreed to suspend their military confrontation in Donbass. However, during the two weeks after signing the Minsk truce, the two parties had repeatedly violated it, and thereby, the conflict escalated again, while no progress was made in negotiations.

No doubt since 2015, Russia, Ukraine, the OSCE and other related parties have carried out multiple rounds of negotiations to resolve the conflict in eastern Ukraine, and supervised the implementation of the agreement. But none of these proved efficient due to the complicated reasons, either ideological or geopolitical. As the rivalry between the U.S. and Russia escalates, the abolition of the Intermediate-Range Nuclear Forces Treaty patently affects the strategic stability in Europe, and the turbulent situation in eastern Ukraine poses a threat to its security as well.

Even though all the uncertainties, the Europeans have not given up the hope for peace and their legacy in diplomacy. Two key member states of NATO—France and Germany—have proposed to talk to Russia rather than contain it like the United States did. It seems to be a new chance for peace when new President of Ukraine Zelenskiy won a landslide election victory in April promising to end the conflict. France, Germany, Russia and Ukraine agreed to hold a summit in Paris on December 9 with a view to advancing a peaceful resolution to the conflict in east Ukraine. To that end, Russian President Putin stated his firm support to the four-way summit in Paris.

On the one hand, it is the first talk among the four parties since the Berlin summit in 2016, and also marks the first talks between Putin and Zelensky since he took office. It is true that President Zelensky has prioritized the ending the conflicts with the pro-Russian groups in the east, and promised to a ceasefire between government forces and Russia-backed armed men. This position was supported by France and Germany. On the other hand, since the Ukraine crisis, the U.S. and the European Union have imposed multiple rounds of economic sanctions on Russia, which not only caused damage to the Russian economy but also severely damaged the economic interests of France and Germany. They have been facing an increase of economic risks caused by sluggish trade and manufacturing, slowing economic growth in Europe. In addition, a chaotic Brexit has coupled with trade tensions and weakened Eurozone activity as well.

It is undeniable that the U.S. hostile policy to Russia has impaired the strategic stability between EU and Russia, and exacerbate the deterrent confrontation between NATO and Russia as well. Due to this, if Russia and Ukraine can resolve the conflict peacefully, there will be a breakthrough for easing the tensions among the major powers, and contribute to the economics and security in Europe. Due to this, French and German leaders are actively engaged in diplomacy; and the Paris summit is expected as new progress in accordance with the Normandy format.

Yet internationally, it is self-evident that the vital obstacle comes from the United States with the cold war mentality. Even though it is excluded from the Normandy format, the U.S. remains a major role in multilateral diplomacy with Ukraine. In effect, what’s behind the Russia-Ukraine conflict is the gambling between Russia and the U.S. Although Trump is being caught in a political scandal with Ukraine, America’s domestic consensus on supporting Ukraine has not been questioned, such as providing military and economic aid to Kiev and making efforts to resist Russia is the U.S.’ fundamental stance toward Ukraine. Considering the backdrop of the political game among great powers, the prospect for resolving the major issues between Russia and Ukraine should not be overestimated.

Domestically, there are also some grave concerns. First, the President of Ukraine Zelensky, an actor-turned politician on the world stage, has to deal with a seasoned statesman of Russia like Putin and is also under the hidden pressure and coaxing from the United States. Although Putin and Zelensky are ready for peace talks, they are sure to have each own agenda. Moreover, although he has the support of more than half of Ukrainians who want to see an end to conflicts in the east, there are still huge groups financed by the external shadows furiously demanding any concessions by Ukrainians as a capitulation to Russia. Finally, this new president of Ukraine is a sincere person but never be a strongman like his European mentors Metternich, Bismarck or his Russian counterpart. In light of this, while France and Germany have been eager to see the deal through, many of the Ukrainians have expressed fears that the move might be legitimizing Russian presence in the Donbas. Actually, Putin too would be wary of being perceived as too rigid in his stance by the international community and the liberal groups in his homeland. As a result, Russia hailed the Paris summit as a diplomatic victory. France and Germany welcomed this new step.

As it turns out, in all likelihood, the Paris summit can only lead to some sort of understanding between the stakeholders to carry the fledgling peace process forward. Yet, since France and Germany are attempting a rapprochement with Putin, the Paris summit indicated that there is goodwill to resolve difficult questions. And this goodwill is always needed if Europe wants to solve political problems. The core of the classic diplomacy is that peace comes through talks rather than fight.

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