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Chinese Garland of Pearls in Mediterranean: A Strategic Loop of Power and Influence

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Chinese strings of pearls in the Mediterranean are gradually forming a huge strategic Chinese garland of Pearls. It is surely going to be an increasingly tightening grip over the NATO bastion and EU security structure. The absence of collective EU economic vision so far and the NATO division are conveniently facilitating the Chinese preponderance in their waters and security hub. The Brexit has already weakened the stature of the Union which is a favourable condition to Chinese unabated expansion and influence. The evolving ‘garland of pearls’ in the Mediterranean can become the scene of Chinese ‘Anaconda Policy’- surround and squeeze.

Chinese hold on such strategic ports as Piraeus in Greece, Trieste and Genoa in Italy and string of six ports in eastern Mediterranean- Haifa and Ashdod in Israel, Tripoli in Lebanon and Latakia and Tartous in Syria and Kumport in Turkey has changed the strategic balance in the region. Besides, there are many more ports in the region trying to attract the Chinese investment. These include Port Said, Marsaxlokk, Tangier and Casablanca in southern side of Mediterranean and Valencia, Marseille, Genoa, Trieste and Piraeus in the northern side. An overview makes it a garland of Chinese pearls in the Mediterranean put together the Chinese strings of pearls all around this Western strategic water. This evolving strategic loop is sure to mitigate the western security dominance over this water and therefore expand Chinese influence in the countries around specially Europe.

This trend of increasing Chinese investment has raised numerous questions and unsettled the European Union and its policy. Any effective response can be made only with correct understanding of implications it involves. How much it is unavoidable or acceptable given the strategic nature of the ports must be perused properly. On 10th April, 2019, the new EU FDI Screening Regulation has come into force to ensure security and public order in Europe in the face of the foreign direct investment in the Eurozone. The first EU level coordination mechanism will be fully operational in all member states on 11th, October, 2020.

In the wake pandemic the European Commission on 25th March, 2020 issued guideline to ensure effective foreign investment screening against the economic vulnerability during the crisis. It aims at preserving critical assets and strategic companies like infrastructure which is fundamental for public order and security without undermining the general open foreign investment policy. Ursula von der Leyen, the European Commission President emphasised that “As in any crisis, when our industrial and corporate assets can be under stress, we need to protect our security and economic sovereignty. The EU is and will remain an open market for foreign direct investment. But this openness is not unconditional.”

Both EU and NATO are aware of the growing need of an enhanced cooperation as the key response to multiple security challenge from new Russia, turmoil in West Asia, cyberwar to terrorism. The list has formally added China also as a systemic rival and competitor. The recognition of cooperation between these two organizations gained attention towards end of the 1990s. It was around 2000 only that initial European reservation mainly that of UK and France were overcome and joint security vision and action of EU and NATO began. From then onwards, the cooperation was continuously buttressed and shaped through 2002 Berlin Plus arrangements, 2010Lisbon Summit and the Role of NATO in the security architecture of the EU, 2016 Warsaw  and 2018 EU-NATO, Brussels Joint Declaration have boosted the cooperation for security of the transatlantic community based on their shared threat perception and response requirements. The Strategic Concept of ‘Active Engagement, Modern Defence’ of 2010 underlined and espoused the values and strategic objective for the next decade in transforming security environment with necessary political and military response. The core areas of cooperation are capacity-building of the alliance and partners, defence-industrial issues, military mobilization, promotion of peace and security agenda. Despite the national rivalry in Europe and the transatlantic divisions which came to fore in the London Summit, December, 2019, the NATO 2030 launched on 8th June, 2020 has again started re-building the cooperation needed for the shared security of the transatlantic community.

But the EU response has not been effective so far in the face of the growing transatlantic schism on various issues. The recent blow has come with the concern over possible withdrawal of US troops from Germany to be deployed in Poland. It was announced by US president Donald Trump on 15th June, 2020, accusing Germany as “delinquent” in NATO contribution and unfair trade with United States. The German Foreign Minister, Heiko Mass, has said “We think that the US presence in Germany is important for the security not just of Germany but also for the security of the United States and especially for the security of Europe” during his visit to Poland. However, the critical response came from the German Defense Minister, Annegret Kramp-Karrenbauer when he said that, “NATO is not a trade organization and security is not a commodity. NATO is formed on solidarity, on trust. And it is based on common values and common interests,” on 16th June, 2020 in Berlin.

Such growing cleavage in the transatlantic alliance is a serious rift in the face of the Chinese strategic rise in the Mediterranean ports through investment and management control. These Chinese moves under its BRI vision are primarily geo-economic in its declared pursuit but its long term strategic and security dimension are natural corollary. Such move is bound to erode the necessary faith NATO has been built on and therefore its deterrence capacity watered down against traditional challenge from Russia or new formidable challenge of China.

The matter has assumed serious dimension with strategic closeness of Russia and China. The first ever joint naval exercise code-named “Joint Sea-2015(17th -21st May) of the two in the Mediterranean was important as it was conducted far away from their naval bases in a show of their readiness in sea areas of the world and in the strategic water of the West in particular. In July, 2017, a People’s Liberation Army Navy (PLAN) flotilla en route to their Joint Exercise with Russian Navy in Baltic Sea, conducted a brief live-fire drill in the Mediterranean Sea to hone their combat skills. Besides, Six-say joint defence operations, the “Joint Sea-2019”featuring joint air defence drills, joint anti-submarine drills and joint submarine rescue drills is important development in this regard. In December (27th -30th) 2019, China-Russia joint naval exercise was conducted along with Iran in the Gulf of Oman with the declared aim of world peace and maritime security in the region.

Given the increasing numbers, frequency and different locations of joint naval exercises of China and Russia it has assumed the character of a de facto military alliance which has surely exacerbated the security concerns of the European and Mediterranean NATO community and their security structure. The BRI deals are basically aimed at promotion of trade and related infrastructure development. But this economic clout naturally spurs the strategic influence and military advantage. In July, 2017, a Chinese naval fleet came to the port Piraeus on friendly visit as a promotion of their growing friendship and cooperation. Such developments will keep on increasing and become normal practices in the Chinese held ports of the Mediterranean Sea.

Amidst these naval developments, there is growing conflicting policies of the NATO members and hostile encounters of their navies in the Mediterranean are making the matter worse. When the French sailors were chasing a suspicious cargo carrying arms for Libya, the Turkish frigate warned them with missile strike- a matter of grave weakness for NATO and security projection of its members. This is the result of their rival policies in the Libyan conflict.

EU is concerned about the growing US-China competition emerging like a new cold war and looking for options to avoid falling into this binary. The launch of outline of NATO 2030 on 8th June, 2020 made it apparent that the rise of China has fundamentally changed the balance of power and a new competition for economic and technological hegemony. The EU-China summit, 2019 joint statement has committed for EU-China strategic partnership and expressed support for multilateralism and rule-based trade to build their economic relationship. Thus the EU and China video meet or conference on 22nd June, 2020 assumed significance amidst rising US-China tension as the European Union is pursuing a non-confrontational policy towards China to remain a relevant factor in the emerging world order.

Moreover, the strategic loop of China made up of its strategic ports pose an unprecedented serious challenge to the weakening EU and loosening NATO. Therefore, there is an urgent need to fix the fissures in the NATO and division in EU to face China and its expansion with strength and matching strategy before the Chinese loop strangulate it and impose its irresistible force of influence. 

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Cyprus conflict: How could be Resolved and Reunified?

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UN Photo/Eskinder Debebe

Cyprus conflict has been regarded as one of the conflicts that are so far difficult to find a resolution for it. The conflict has been considered intractable, due to its complexity multiple endeavors failed to bring on a solution. The conflict that erupted between Turkish and Greek Cypriots on the island had a different language, culture, and religion. These two components are the triggers of the Cyprus conflict which have dragged external actors into the conflict.  After independence, these two ethnic groups were granted self-governance as one state on the Island. They have been given an authority based on a constitution that has been enacted by the presence of external actors. They shared the governance of the island until the Coup of 1974 that led to separate these two ethnic groups into two constituencies which resulted in two separate regions. Turkish intervention in the 1980s divided the island into two republics. The self-declaring of an independent state for ethnic Turkish in Northern Cyprus has made the conflict intractable. The tension grew strain between them until 2014 when the reunification discussions opened between the two sides. (1)

There is a primary and secondary actor in the conflict, both actors have their interests in the conflict. Turkish Cypriots and Greek Cypriots are the main actors and the external actor such as Turkey, Greece and Britain are the main secondary actors.

Historical background of the conflict

Cyprus has been a victim of its geographical significance, due to its geopolitical importance has been conquered by multiple empires in the region. The ownership of Cyprus has changed hands among the empires such as Greeks, Egyptian, Roman, Ottoman. And British as the last empire took over from the Ottoman empire from 1878 until independence in 1960.Cyprus conflict has national, regional, and international dimensions, so the solution should take the account of multiple actors. In addition to the ethnic nationalism in terms of conflict between Greek -Turkish Cypriots, there are other actors such as Turkey and Greece. Moreover, there are international actors such as the EU,NATO, and the United Nations.(2)As Cyprus connects three continents, its geopolitical importance has lent it both vulnerability and strengths. That is why history has been of external powers’ interest.

The root cause of the conflict attributes to the lack of national identity within Cypriot society, lack of commonality has paved the way to disagreement over multiple cases. When Britain took over the administration of the island did not allow these two ethnicities to intermingle, during the independence made them too strange to each other to get along together under one state. The actual independence struggle itself was to reunification with motherland Greek which was unacceptable for Turkish Cypriots. The guerrilla war itself that was initiated by Greek Cypriot was to reunify with Greece, not for its independent state. The reunification was not in the interest of both Turkey and Great Britain. So, the conflict started, and later the North Cypriots self-declared their ethnic state. External powers fuelled the conflict for their interest. In so case, the conflict in Cyprus took in the international aspect which later UN involved to stop fighting.(3)

One of the main causes of the conflict between these two groups was security, the Turkish Cypriots did not experience security towards their Cypriots counterpart. There was inequality both socially and economically. The Greek Cypriots within the republic had more power in all sectors of life, therefore the Turkish experienced alienation which gave them a feeling of a stranger inside their own country. To fill the security vacuum they resorted to external support and Turkey was ready to present them this security. In this way, external powers such as Greece, UK, and Turkey shifted their role from guarantor to a supporter of one side over the other that made the conflict more intractable. In the referendum, the majority of Turkish Cypriots voted yes to Annan Plan but on the other side most of the Cypriot Greek vote no to this plan. Annan’s plan was an initiative to start the process of the reunification of the Island in one whole state instead of two divided states.(4)

Divide and rule

Divide and rule strategy has been a tactic of all European colonizers from the time of the Roman empire until the end of the colonization. The Dutch and the Spanish have made benefit from this strategy. All of these empires including Britain and France have employed different ways but most Western colonialist have used four basic tactics as 1)“The creation of the differences within the conquered population 2) the augmentation of existing differences 3) the channeling or exploitation of these differences for the benefit of the colonial power; and 4) the politicization of these differences so that they carry over into the post-colonial”. Britain even used an educational system to promote segregated education between ethnic Greece and Turkish Cypriots. In such a way Greek schools were staffed by teachers from Greece and Turkish schools by teachers from Turkey. They used the same tactics in Nigeria between the South and the North in a way opened more schools in the South than in the North which created different education levels.(5)

The policy of divide and rule was one of the most important strategies that have been employed by the British empire during its colony and after decolonization. The British empire has divided the people of the colonized states into multiple parts. The division policy has been followed to facilitate the governing process such as the Partition policy in India. Adoption of this strategy was the paramount goal for British empire expansion. Otherwise, it had been difficult for Britain to keep control over all these places in the world. There are various examples regarding partition policy such as in Palestine in the Middle East or Zimbabwe in Africa. Britain in contrast to France has employed segregation by dividing people to rule better. Internal Cyprus conflict is the result of the independence movement and decolonization process which led to dividing the state between Greek and Turkish Cypriots.(6)The treaties of guarantors and alliances or unworkable constitutions were the start of the intercommunal conflict between Greeks and Turkish on the island.

Multiple differences within Cypriots society laid the foundation of conflict that was exploited by external powers. They have different languages, religions, and cultures which mistakenly have been a catalyst of the conflict.

Primordial attachment

Cyprus geographically is important for major powers in the region therefore all three so-called guarantor countries such as Greece, Turkey, and Britain sought to keep influence on the Island. Through developing nationalism, the external powers gained a foothold there, from the 1960s onwards they urged national identity based on primordial principles. Both Greek and Turkey alongside Britain in a variety of ways intervened in the internal situation of the people of Cyprus. The population in Greece attached to different countries to protect themselves from another side. In such a way the idea of union with Greek the mainland for Greek Cypriot was the goal. And for the Turkish Cypriots, the partition of the Island was a case of maintaining the Turkish identity. The importance of the Island came to the surface even more in the period between 1960 -1974 when the two ethnic groups divided, and the external powers entered the conflict with support confined to nationalism toward both sides(7)

National identity is what binds the people together, in Cyprus, there are religion and language have been the main elements of their national identity. But for the new generation in Cyprus, there are other elements alongside religion and language to become an individual identity. Most of the new generation are speaking fluently English which gives them a new allegiance and a new identity. In the modern era, principles of gender, human rights, freedom, and democracy are the main goals for human beings to stand for it. So multiple factors replaced the traditional elements of identity building.(8)

The conflict in Cyprus starts directly after the independence before the independence both Turkish and Greek Cypriots were fighting Britain and seeking independence. But after Britain’s withdrawal, primordial values in terms of ethnic affiliations were promoted, and intercommunal fighting erupted between them.

Geopolitical interests

Geopolitical interests in Cyprus have played a big role in regional politics in the Middle East. This significance made the Island a victim of regional and international politics. It is an important gateway for three continents namely Asia, Europe, and Africa. Due to its location which is connecting three continents, has attracted major powers. It locates in a place that can control the connections of the most important chokepoints in the Mediterranean such as Bab-el-Mandeb, the Suez channel, and the Hormuz Strait. Where through these chokepoints import and export from oil and gas producers are transported to industrialized countries. Due to its significance has become of external powers’ interest throughout history. From Cyprus, it is easier to surveil all these chokepoints and from modern time, the USA has established an intelligence base to observe the Eastern Mediterranean and further.(9)

Even though Cyprus far away from most of the international powers, due to its importance geopolitically most of the major power through one or another way established a kind of link with it.USA under the excuse of NATO alliances with Turkey and Greece has a presence there. Britain has physical military bases and works as a guarantor based on the London-Zurich agreement. Turkey as a guarantor and links to ethnic Turkish Cypriots, Greece as a guarantor and links to Greek Cypriot, European Union through the republic memberships. So, the conflicts in Cyprus have both national and international aspects. (10)

Late discoveries of natural gas in the Eastern Mediterranean surfaced the importance of the Island again. Egypt, Israel, and the Republic of Cyprus started to explore gas in the area which provokes Turkey. Against this background, Turkey intensifies its presence in the Mediterranean by starting to explore natural gas alongside other actors there. This development triggers the start of shifting a balance of power and new alliances which leads to a new equilibrium in the region. Even Turkey has threatened to blacklist those firms that are developing offshore gas exploration.(11) findings of gas in the Eastern Mediterranean have enhanced amicable relationship among Israel, Greece, and the Republic of Cyprus, on the other side Turkey got a foothold in the waters of Southern Cyprus through the Northern republic which is recognized by only Turkey. These alliances made all countries in the region insecure which reflected negatively on the other conflicted areas such as Syria and Libya.(12)

Solution

The conflict in Cyprus is considered intractable which means resolving is more difficult than the other. Establishing peace on the Island can be achieved by adopting a conflict transformation approach. In this method, all walks of society participate in the peacebuilding process. , through individual participation, reconciliation will be materialized in a way that all citizens on the island are direct contributors and participators in the process. In doing so conflict transformation make benefits from civil society promoting which binds individual from both ethnic groups. In so case the allegiance shifting away from ethnicities to citizenship based on individual rights and interests. Conflict transformation is suited to the case of Cyprus which refrains the two ethnic groups form an in-group attachment.

So far peacemakers on the Island have sought to find a solution for the conflict based on the conflict resolution approach. This kind of solution has promoted ethnic nationalism and in-group allegiance, therefore international mediation whether coercive or non coercive has failed to find a common interest between these two ethnic groups. Coercive peacebuilding is a Modell that is practiced by Russia which has never given sustainable peace such as Russia’s mediation in Ukraine, Chechenia, Libya, and Syria. (13)

There is non-coercive intervention conflict resolution such as the ideas of William Zartman which allows the conflict parties to reach a mutually hurting stalemate. This method at the end of the day creates a time ripeness for negotiation in which both sides reach a level of damage in terms of the utility of war.Ripeness moment has been used as a strategy to convince and force the conflicting sides to apply to the negotiation and come into a sustainable agreement which results in peacebuilding.(14)

Resolving the conflict through international and external mediation results in a temporary solution that potentially re-emerges after the international system and shifting of their interests. Thus, the conflict can be sustainable only in the case of internal solutions based on individual rights and finding common interests among the population regardless of religion, language, and cultures.

Promoting common interest within the conflicting sides can result in sustainable peacebuilding. to achieve this goal enhancing the principles of democracy such as human rights, freedom, and supporting civil society which finally binds the individuals together based on citizenship than ethnicities allegiance. Through the principles of democracy, primordial nationalism is replaced by civic nationalism. This strategy has been used in Canada which resulted in positive consequences in terms of coexistence between Quebec and the rest of the populations. The people of Quebec find their interests with the English people than with the French people in the other land.(15)

 “There are four main factors which tend to create internal conflict: discriminatory political institutions; exclusionary national ideologies; intergroup politics; and elite politics”. (Michael E. Brown 1997).These factors apply to the conflict on the island, due to the longevity of the conflict common national identity has been weakening year after year. And there are four main schools to settle ethnic disputes that can be used to mitigate the hostility between Turkish Cypriots and Greek Cypriots. The first school concentrate on coercive intervention to create a balance of power(Fen Osler Hampson1997),the second school concentrate on non-coercive intervention through confidence building or ripe moment and power-sharing(Fen Osler Hampson1997),and the third schools argue that just political order is important and supporting civil society(Fen Osler Hampston1997),and the fourth school includes the use of the conflict resolution workshops which seek to reduce stereotyping in the citizen level(Jhon Burton1972)(16)

Creating a national identity in Cyprus is of paramount importance to mitigate the hostilities between the two ethnic groups, in away the people of Cyprus should promote their Cypriots attachment instead of external attachment towards Greece by Cypriot Greek and attachment to Turkey by Turkish Cypriots. Finding commonality between these two ethnicities inside Cyprus in away way both ethnicities feel secure toward each other is a path for a solution. Geopolitically a powerful Cyprus is not in the interest of external stakeholders such as Turkey and Greece therefore they always are seeking to hold the republic of Cyprus divided and weak. In such a way they would be able to intervene and make benefit from its geopolitical importance in the region which has its importance by locating among three continents. Creating a sense of Cypriot’s identity facilitates establishing a civic nationalism which paves the way to coexistence and cooperation toward a common goal. Democratic principles that give citizenship, equal economic and social rights, and free political participation are elements that can be achieved under civic nationalism, in such a way materializing a Cyprus nationalism based on duty and rights, not ethnic belongings.(17)

Through civil society promoting and confidence-building measures, the relationship between communities is possible to yield positive results.  As Christopher Michell says, “Local peacebuilding and national peace” In a way Channels of communication can be promoted through grassroots communication. Building multiple organizations would lead to building more trust among the ordinary people in such a way mutual interest facilitates the foundation of peace. Through civil society promoting the relationship between local and national level which ultimately peacebuilding is achieved.(18)

 Enhancing the role of civil society based on track two diplomacy, the two communities can open multiple channels of communication which at the end of the day the fear of insecurity is dissipated for those who voted no in the referendum in 2004. As these two ethnicities have different backgrounds in terms of language and religion and both of them have a connection to the different motherlands, they are seeking security from their respective motherlands. But in the case of building internal security through low politics strategy and micro-level communication, this fear is covered as Oliver Richmond says “NGOs fulfill vital roles that states and their agencies cannot take on”. (19)

Another alternative to promote peace and finding a resolution for the Cyprus conflict is economic factors through gas exploration in the eastern Mediterranean which gives benefits for economic prosper for the people of Cyprus. In 2014 enormous gas discovery in the region has given the prospect of the reunification of Cyprus and ending the long conflict. As multiple actors have been involved in the Cyprus conflict, its resolution should be internationally in a way all actors experience security towards each other.(20)

After Cyprus accession to the European Union, there was more possibility of finding a mutual solution thatyields joint interest for both communities in Cyprus. The people of Cyprus have lived peacefully through history the conflict flared up in 1950 during the independence war against the United Kingdom, therefore, the application of the methods of Roger and Fisher (2011) can result in positive consequences. There are some of the methods that underpin the process of negotiation of the resolution of the conflicts. These methods are” 1)Don’t bargain over position 2) separate the people of the problem 3) focus on interests, not positions 4) invent options for mutual gains 5) insist of objective criteria”.(9) In the case of Cyprus, joint gains can be achieved through gas exploration and redistribute the resources’ revenue equally over the Cyprus population.(21)

Based on the oven mentioned points Greek and Turkish Cyprus can find commonality and mutual interests which leads to coexistence and cooperation instead of fighting each other and experiencing insecurity.

Conclusion

Cyprus has been a pivotal case for most empires in the old and new history. All empires had sought to keep control over the island, which they were using as a corridor between East and West. As it connects Asia, Africa, and Europe, the major powers were interested to keep control over it. The Island was occupied by the Greek, Roman, and Ottoman empires until 1870 was deliver to the British empire. These external powers made the way for inter-communal groups to fight each other. Its significance urged these external powers to sow the soul of dissension between the two main ethnic groups as a divide and rule strategy. There are primary and secondary actors in the Cyprus conflict, the primary are the two ethnic groups such as Turkish and Greeks who are living on the Island. Finding the solution for this conflict can start from the primary actors such as Greek and Turkish Cypriots. Through the transformation approach, the relationship between these two ethnic groups is promoting and based on low-level interaction peacebuilding starts to flourish. Moreover, there are secondary actors are playing an expansive role within the Cyprus conflict. The fatherlands of Greece and Turkey are involved by supporting their ethnic groups on the Island. Through establishing the bases of security for both ethnic groups is the foundation of the conflict resolution for the intractable conflict of Cyprus.

Getting to Yes which is concentrating on interests than position is helpful to resolve disputes between conflicting sides. In the case of Cyprus looking forward than looking back is facilitating the process of negotiation. Some points can be used in the process of negotiation in the Cyprus conflict. Most important points er 1) bargaining over interests than position 2)separating the people from the problem 3)mutual gain  4) insisting on objective criteria.(22)

Based on the conflict transformation strategies and win-win negotiations, citizens can be drawn into the negotiations. These measures within conflict resolution by engaging civil society the fear of insecurity can be dissipated. In that case, the conflicting parties within Cyprus society could be reunified and the main causes of their internal conflicts are transformed and resolved.

References:

  • 12) Efrain Inbar &Shmuel  Sandler,”The Importance of Cyprus” Middle  East Quarterly,spring2001,pp.51-58.Accessed Januar132021, https://www.meforum.org/29/the-importance-of-cyprus
  • 13)David Lewis,”Russia as Peacebuilder?Russia’s coercive mediation strategy,”George CMarshall European Center for Security Studies,June 2020,Nr.061.Accessed Januar142021,
  • 16) Oliver P. Richmond , “Ethno‐nationalism, sovereignty and negotiating positions in the Cyprus conflict: obstacles to a settlement”, (1999),Middle Eastern Studies, 35:3, 42-63, DOI: 10.1080/00263209908701278
  • 17) Christopher Mitchel, “ Beyond Resolution: what does Conflict Transformation Actually transform?”, Peace and Conflict Studies, 5,1,2001,Vol.9,Nr 1.Accessed 13Januar 2021.https://nsuworks.nova.edu/cgi/viewcontent.cgi?referer=https://scholar.google.com/&httpsredir=1&article=1020&context=pcs/
  • 18)  Landon E. Hancock & Christopher Mitchell, “Local Peacebuilding and Legitimacy: Interactions between National and Local Levels”, Routledge,2018.
  • 19) Henry Carey &Oliver Richmond, “Mitigating Conflict: The Role of NGOs” 2003 Frank Cass & Co. Ltd.
  • 20) Ayla Gürel& Laura Le Cornu, “Can Gas Catalyse Peace in the Eastern Mediterranean?”, The International Spectator, (2014) 49:2, 11-33, DOI: 10.1080/03932729.2014.906799
  • 21) Roger Fisher & William Ury,“ getting to yes: Negotiation an Agreement without Giving in”,2011, penguin books, New York.
  • 22) Roger Fisher & William Ury,“ getting to yes: Negotiation an Agreement without Giving in”,2011, penguin books, New York.

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Disconnecting From SWIFT? No, We Did Not Hear About It

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Photo: Markus Spiske/Unsplash

The European Parliament has adopted another resolution on Russia. It reflects the key political claims against Moscow which have recently been on the Union’s official agenda. These include the aggravation of the situation in Ukraine, the “Navalny case”, the diplomatic scandal between Russia and the Czech Republic concerning the explosion of a military warehouse in 2014. The resolution contained radical proposals. Disconnect Russia from SWIFT and stop imports of energy resources in the event of an aggravation of the conflict in Donbass, reconsider relations between Russia and the EU, develop new sanctions regimes, etc. These proposals generated headlines in the media. However, the stock markets ignored them. The resolution did not cause any fluctuations of the ruble or Russian blue chips. Why did this happen and should the resolution be taken seriously?

At first glance, the resolution confirms that high consensus of one of the key (along with the EU Council) legislative bodies of the EU. It was adopted by 569 votes in favour, 67 against, and with 46 abstentions. Kiev and Prague welcome the resolution. Their political positions are uncompromisingly reflected in the document, although, for example, in the case of the explosion at a Czech military depot, there is no consensus, even in the Czech Republic itself. Not to mention the situation around Donbass, where the military build-up was carried out on both sides. According to an already established tradition, Russia is declared guilty of all obvious and perceived problems. Naturally, the document also reflects the “Navalny case”. Earlier, the European Parliament had already issued two resolutions. One in connection with the alleged poisoning, and the other after the arrest of the Russian opposition YouTuber Navalny. Tough measures against Moscow were proposed in previous resolutions as well. In some ways, their intention is consistent with American bills on “draconian sanctions”, such as DASKA: to designate a “lowest denominator” and possible measures that the European Union could potentially take. The threat of disconnection from SWIFT was the “icing on the cake”, which, as expected, was popular in the media success.

However, the markets ignored the resolution of the European Parliament. There are several reasons for this.

First, the period of aggravation of the situation in Donbass is clearly over. Yes, the problem itself has not been resolved. The conflict will smoulder for a long time, and new rounds of escalation will be still felt. There are no prospects for the implementation of the Minsk agreements. However, the prospect of an open military clash, which loomed on the horizon a month ago, has receded into the background. Ukrainian diplomacy was unable to achieve progress towards the revision of the Minsk agreements, although it temporarily returned the topic of Donbass to the political and media mainstream. Russia has shown that it is ready to balance the military build-up in Donbass without hesitation and to respond to a possible attempted military solution. The next round of exacerbation has so far fizzled out without leading to qualitative changes in the sanctions regime against Russia, or in the political positions of the parties.

Second, the radical proposals of the European Parliament are unlikely to find a response in the European Commission and the EU Council. The head of EU diplomacy, Josep Borrell, has already noted that decisions on restrictions on SWIFT and Nord Stream 2 are not within the competence of the European Union. It is obvious that disconnecting Russia from SWIFT will lead to colossal losses for both Russian business and EU companies doing business with Russia. The refusal to purchase Russian energy resources will also lead to significant costs. The Nord Stream 2 project remains in the interests of the European Union and Germany. Moreover, the disconnection from SWIFT, taking into account its consequences for the Russian economy, can simply be perceived by Moscow as an act of aggression with all the ensuing political consequences. The EU is losing the opportunity to strengthen and promote the role of the euro as a more desirable instrument for international payments. In particular, the share of the euro is likely to grow in trade between Russia and the PRC, ousting the US dollar. Manipulation with SWIFT will hurt Brussels’ plans to promote the euro globally.

Finally, thirdly, the real magnitude of the political contradictions between Moscow and Brussels is clearly not up to such radical steps. Yes, relations between Russia and the EU are in a deplorable state. The political dialogue periodically breaks down amid mutual accusations. There are no ways to resolve the most serious contradictions so far. However, the “level of support” of the existing, albeit bad, relations is still strong and its “breakdown to the bottom” has not yet taken place, even despite a number of recent local shocks. The “warehouse case” in the Czech Republic has not generated a pan-European chain reaction and has mostly damaged bilateral relations between Moscow and Prague. Most of the EU members are not eager to get involved in this scandal. The Navalny case will remain a toxic asset for a long time to come. But it, too, has not yet led to fundamental shifts. As for Ukraine, Moscow is clearly not eager to get involved in a military conflict, although it has demonstrated its force. To a certain extent, such demonstrations even reduce the likelihood of a violent scenario in the resolution of the conflict. At the same time, they do not bring political solutions closer. In general, the existing problems are large-scale. Their cumulative effect will increase. But its weight for the measures proposed in the European Parliament resolution is clearly not enough.

The only innovation that currently has a political perspective is the proposal for a new sanctions mechanism on corruption. A similar mechanism has recently been established in the UK. It involves freezing the assets of persons suspected having ties to corruption. The European Commission may well develop proposals for such a mechanism and submit it to the EU Council for consideration. The chances of its approval are very high. However, even if it is used against Russian individuals, its impact on economic ties between the EU and Russia will be extremely low. This may be the reason for the possible success of such an idea. The European Commission and the EU Council will show that they are loyal to at least some of the requirements of the European Parliament. At the same time, the use of the mechanism will remain in their hands, and the risks for the business will be minimal.

Moscow will also draw its conclusions from the rhetorical exercises of the European Parliament. Despite the fact that the risks of it implementing the recommendations of parliamentarians are negligible, this is another incentive for the Russian authorities to continue working on an alternative financial infrastructure in partnership with their foreign partners, who are also the target of unilateral restrictive measures.

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When diplomacy cannot get the best of geopolitics: Cyprus’s lack of a way forward

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The United Nations Peacekeeping Force in Cyprus (UNFICYP) controls the buffer zone between the opposing sides. UN Photo/Eskinder Debebe

On April 24, people from both sides gather in proximity of the demarcation line splitting the capital, Nicosia, in two. Near this highly-contest frontier, Turk and Greek Cypriots alike demanded their leaders achieved the hoary aim of a united Cyprus. The most common motto protestors had written on their placards was a call for peace and unity across ethnic divides: We are Cypriots. This hopeful, determined appeal was addressed to the then-upcoming UN-sponsored meeting between the leaders of the two communities in Geneve. Three international guarantors partook also in the meeting: the UK as the former coloniser and, obviously enough, Greece and Turkey.

Introduction

Four years have passed since the UN hosted in Geneve peace talks on the future of Cyprus — and their collapse. Failed mediations are also due, in part, to the great power imbalance between the two sides. The so-called Turkish Republic of Northern Cyprus’s only ally and supporter is Turkey, on which it is “almost completely dependent”. On the other hand, the Greek-Cypriot government is internationally recognised and a member of the European Union since 2003. Yet, Secretary General Antonio Guterres is putting renewed energies in the long-standing issue that thorns the region. But, according to many commentators there were little to no hopes that anything concrete would be achieved. Actually, the positions at the negotiating table seem more divergent they have ever been and peaceful unification farthest than ever.

The Cypriot question is highly internationalised, which makes its resolution easier and harder at the same time. History can reveal why this is the case. and, hopefully, shed a light on the way forward.

A long-standing issue

Commentators and diplomats began talking compulsively about the island of Cyprus as a hotspot in the Eastern Mediterranean in 1974. Yet, any solution must account for the fact that Cyprus’s problematic history goes back well before that year.

The way to independence (1960)

In the modern and early-contemporary period (16th–19th century), the Ottoman Empire’s wider frame of ethnic coexistence guaranteed Cyprus’s stability. Turks and Greek were actually just Rum Christians and Muslims, and the Sultan vied for their diversified rights and obligations. The Porte experienced a deep crisis in the runup to the Great War, accepting to cede many peripheral territories. Thus, the British Empire administered the island of Cyprus from 1878 to the island’s formal annexation during in the 1910s. Nevertheless, the two communities still cohabited peacefully for several decades. If anything, Greek Cypriots started fighting against the Brits using terroristic methods.

Cohabitation started to be a problem when Cyprus became independent in 1960. In order to ensure that the region would not descend into utter chaos, there was the need for an agreement. Hence, Britain sat down with Greece and Turkey to establish the framework within which to establish the Republic of Cyprus. Athens had to backtrack on many of its requests on behalf the Greek Cypriot majority. Eventually, principles of bi-national independence, political equality and administrative partnership the two communities prevailed and became part of the constitution.

More importantly, the three signed a controversial Treaty of Guarantee reminiscent of colonial mandates. According to this agreement, each of the signatories could intervene militarily to defend Cyprus’s status from any sort of threats.

Ethnic conflicts (1963–1974)

Tensions escalated immediately after, with Greek Cypriot leaders making pressing attempts to erode their neighbour’s representation and rights. Finally, in 1963’s Bloody Christmas, Greek elites staged the expulsion of Turkish Cypriot representatives from all levels of government. As a result, about 25% of all Turkish Cypriots had to leave their villages for safer Turkish “enclaves”. That year inaugurated a season of inter-ethnic strife and conflict on the Mediterranean island. The situation was so dire that the UN stationed its blue helmets on a peace-keeping mission in December 1963.

The turning point of Cyprus’s recent history is 1974, when the Greek government organised and carried out an artless golpe. Back then, the colonels who animated the military junta sitting in Athens felt that power was slipping away from them. Clearly, the economy was in ruinous conditions and people started to grow unresponsive to the colonels’ efforts to repress discontent. Thus, they thought Greek nationalist fractions’ victorious insurrection in Cyprus and the island’s annexation would have raised morale.

But the situation evolved for the worse as Athens’s actions violated of 1960 agreement with Ankara and London. In a swift counter-manoeuvre, the Turkish army occupied the island invoking its right of interference under the Treaty of Guarantee. For determined it could be, the Greek junta could not afford the risk of a full-scale confrontation with Turkey. Not least, because they are both formally member of NATO, a cornerstone of the Cold War’s bipolar system of alliances. Therefore, the Turkish-majority northern half of the island was able to seceded from the Greek-dominated south thanks to Ankara’s support.

State of the art

The brief war of 1974 marked the pike in Greek-Turkish tensions and determined the current status quo on the island. Fortunately, both sides have been taking steps towards the normalisation of South-North relations. For instance, since 2003 it is possible to cross the frontier roughly established almost half a century ago. Moreover, the situation has stabilised and the number of inter-ethnic clashes diminished in the last 50 years. Thus, the international contingent in the ‘buffer zone’ dividing the capital Nicosia in two is now thinner than ever before.

Nevertheless, Cyprus is still divided into two parts which find it difficult to talk to one another. Thus, there are not a lot of reasons to be optimistic for those who aspire to the Cyprus’s reunification. In 2004, on the eve of Greek Cyprus’s accession to the EU, two contemporaneous referendums took place on the island. The question voters had to answer regarded the so-called Annan Plan, named after then UN Secretary General Kofi Annan. The Plan foresaw joining the two current entities in a State federal in name, but de facto confederal.  Cypriots went to the polls en masse: 87.83% of registered voters went to the polls across the island. Of them, about 65% of Turkish Cypriots voted in favour of the Plan, which they approved. Yet, over 75% of Greek Cypriots who voted were against the proposal, which both communities had to approve.

In the last few years, the North has also retrenched in its positions, possibly in response to the Greeks’ ‘No’. Last in order of time, Northern Cypriot elected as head of State Ersin Tatar, a protégé of Erdogan, Turkey’s President.

Conclusion — Peace talks won’t solve the issue

Against this background, Greek and Turkish Cypriot authorities’ approach to these renewed peace talks is unexpected. The Greek Cypriot foreign minister, Nicos Christoduidis, declared that the negotiations’ aimed at “Cyprus’ reunification as a bizonal bicommunal federation.” At the same time, Greek Cypriot President, Nicos Anastasiades, has started to acknowledge the need for a “decentralised federation”. That is, the sort of surreptitious confederal project laid out in the Annan Plan.

On the other hand, Northern Cyprus’s foreign minister Tachsin Ertugruloglu, argued that the “solution is: one island, two states.” President Tatar echoed these remarks arguing that there are two “separate regions and peoples in Cyprus.”Symbolically, Tatar stopped in Ankara to meet President Erdogan before reaching Geneve for the UN’s three-day talks.

Figure 5 Turkey’s planned pipelines in the Eastern Mediterranean cross Greek and Cypriot waters. © Steven Bernard via Financial Times

After several days of fruitless negotiations, Guterres declared that despite “all our efforts, we have not yet found enough points of contact to allow the resumption of formal negotiations.” But he has also proposed a new meeting in the same format “probably in two or three months.”  Yet, these endeavours will fail again unless the situation on the ground changes drastically in or around Cyrus. As a matter of fact, the real power broker in this game in now Turkey’s Erdogan. When he first became Prime Minister, Erdogan looked for a peaceful resolution to the Cypriot issue and accession to the EU. However, since 2011 he has undergone a change of heart turning more illiberal at home and reckless abroad. Most recently, Erdogan’s Turkey has irresponsibly reignited the tensions in the Eastern Mediterranean, by claiming gas fields located in Cyprus’s and Greece’s economic areas.

Thus, Cyprus may have ceased to be a piece of the larger puzzle called ‘Cold War’. But the island’s division has found a new raison d’être in this complex, quasi-multipolar 21st century. A new geo-political and geo-economic confrontation has started and Turkish Cypriot authorities are playing their part.

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