Tag Archives: European Union

Time to break free from America

The Chinese smartphone company ZTE employs 75,000 people and last year sold $17 bn of products. Yet, despite being a booming and profitable concern, this week ZTE shut down its operations. Why? Because the United States has ‘banned American companies from exporting technology’ to it. ZTE phones contain a number of US-made components, as well as US-designed software. Thanks to the ban, the phones can no longer be made. ZTE is out of business, and 75,000 people will lose their jobs – just like that.

The ZTE ban follows American complaints that the company had been circumventing US sanctions against Iran and North Korea. ZTE admitted this and paid a $890 million fine to the US government, but American regulators maintained that it was still not being honest about its dealings – thus the sanctions imposed against it.

Meanwhile, following the US withdrawal from the nuclear deal previously agreed between the USA, Iran, and several other countries, American officials have been warning European companies that they must stop doing business with Iran. The European company Airbus had signed an agreement to sell Iran billions of euros worth of passenger aircraft. More than 10% of those aircraft, however, consists of American parts. Conseqently, the US has now prohibited Airbus from selling them to Iran because of sanctions re-imposed on Iran following the US withdrawal from the nuclear deal. Airbus could, of course, sell the planes anyway, but it would then find itself being fined huge sums of money in the USA and, like ZTE, have its American supplies cut off.

Any other non-American companies who rely on US components or software, and who are considering doing trade with Iran are now going to have to seriously reconsider their position. European governments and the European Union are none too happy with this. French Foreign Minister Jean-Yves Le Drian complained that, ‘We feel that the extraterritoriality of their [American] sanction measures are unacceptable. The Europeans should not have to pay for the withdrawal from an agreement by the United States, to which they had themselves contributed.’ Meanwhile, French Finance Minister Bruno de Maire asked yesterday, ‘Do we want to be vassals who obey decisions taken by the United States while clinging to the hem of their trousers? Or do we want to say we have our economic interests?’

European politicians are now considering what measures they can take to protect themselves from American efforts to force them to comply with American sanctions policies. According to de Maire, the EU is considering various avenues. One of these, he says, involves ‘looking at Europe’s financial independence – what can we do to give Europe more financial tools allowing it to be independent from the United States?’ Connected with this is a ‘proposal is to set up a purely European finance house to oversee euro-denominated transactions with Iran’

For some time now, a number of Russians who disagree with their government’s economic policy have been complaining that by seeking to integrate Russia more and more into the world economy, the government has undermined national sovereignty and made it vulnerable to financial pressures from potential enemies, notably the United States of America. Economists such as Sergei Glazyev have for a while been urging the Kremlin to increase Russia’s financial independence by, for instance, ‘the creation of a system of exchanging information between banks, analogous to SWIFT but independent of the USA and the EU,’ the establishment of ‘our own rating agencies,’ pricing exported goods in rubles rather than dollars, and so on. For very good reasons, the Russian government has resisted going down this route. Economic autarky tends not to turn out well. Integration into the global economy has its benefits. Having said all that, it seems to me that examples like those above are going to add to the pressure not only on Russia but also on other countries around the world to go in the direction the likes of Glazyev are suggesting, albeit gradually and with caution. Looking at the fate of ZTE and Airbus, any senior manager of an international company worth his or her salt is going to have start thinking about how to reduce the company’s dependence on US suppliers. Politicians are also going to have to put more thought into how to strengthen their economic sovereignty. This is not something which is going to happen overnight, but the impulse to move in that direction must be stronger this week than last.

Some steps have already been taken. We see new financial structures outside US control beginning to emerge, such as the Asian Infrastructure Investment Bank and the petro-yuan. Already financial journalists are speculating that the US decision to renege on the Iranian nuclear deal will strengthen the latter. I tend to the view that such developments are an inevitable part of the global shift in economic power. As the US declines in relative economic terms, its grip on international institutions is bound to weaken. But decisions such as that concerning Iran can only accelerate this process. Very gradually, but nonetheless more and more perceptibly, other countries are going to want to distance themselves from the United States.

The Americans are like a man sinking in quicksand.: the more he struggles in an effort to get out, the faster he sinks. As their relative power declines, the Americans are fighting with all their might to retain their hegemony, striking out in sometimes rather peculiar directions. But the very act of struggling just sucks them down further. In the aftermath of Trump’s decision on Iran, the sound of the sand sucking America under can be heard louder and clearer than ever before.

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Keeping on digging

Is Russia Europe’s greatest threat? This is the question that Carnegie Europe asked a group of ‘experts’. Their answers are revealing.

There was remarkable consensus among the experts. With a few exceptions, the respondents agreed that Russia is a threat to European security but not the ‘greatest’ one. What really threatens Europe, the majority feel, is ‘complacency’. The problem is that Europe lacks resolve and isn’t willing to defend itself. This invites attack from a Russia which is continually probing for weakness and looking to exploit it. The greatest threat to Europe is therefore its own internal feebleness. As one expert, Ian Bond of the Centre for European Reform, puts it:

The biggest threats facing Europe are internal. Reluctance to invest in defense, unwillingness to tackle violent extremists of all sorts, failure to invest in civic education, failure to tackle inequalities in society—all of these are bigger long-term threats than a sparsely-populated country with terrible infrastructure and an economy smaller than South Korea’s. Russia is a threat to Europe only because Europe allows it to be.

Others take a very similar line. For instance, Ian Cameron, director of the EU-Asia Centre, says that:

The Kremlin is constantly probing for weak links and is … also extremely adroit at exploiting opportunities (such as the Brexit referendum and other elections) … Only slowly has the EU woken up to this threat, and its response to date has been totally inadequate.

Along the same lines, Anna Maria Kellner of the Friedrich Ebert Foundation notes that, ‘Europe’s biggest threat is Europe’ and cites ‘the shortfalls and credibility gaps of NATO and the EU.’ Stefan Meister from the German Council on Foreign Relations similarly remarks that Vladimir Putin is able ‘to challenge the Western liberal order – not because he is so strong, but because we are weak.’ Andrew A. Michta of the George C. Marshall European Center considers that ‘the greatest threat confronting Europe today is internal … Europe needs to find enough political will to spend resources on real defense capabilities within NATO.’ Elizabeth Pond and Gianni Riotta both identify ‘complacency’ as Europe’s biggest threat. What is needed, Riotta argues, is for Europe to ‘keep building a twenty-first-century ready military defense, support the Baltic states, apply stern sanctions, and not give in to Putin’s macho bluff.’

What we can see here is quite a consistent view of the world – one in which Russia is inherently aggressive, but not very strong and therefore only able to succeed if Europe lets down its guard, at which point Putin will mercilessly exploit any sign of complacency. Russia per se isn’t a danger: rather, European decadence is. The solution is to be strong, talk tough, and back it all up with a big stick.

All of which goes to show how detached from reality the broad consensus of security experts is. Europe could hardly be said to be weak. As I never tire of pointing out, it spends four times as much on defence as Russia, and outguns it in just about every military department. Furthermore, one could hardly accuse European states of passivity vis-à-vis Russia. NATO expansion, for instance, wasn’t exactly a sign of weakness. Meanwhile, the EU is planning to continue its own expansion into the Balkans.

Furthermore, there is good reason to consider the EU’s Eastern Partnership program (which seeks to strengthen the EU’s ties with former Soviet states) as targeted specifically against Russia. An American document leaked by Wikileaks notes that one of the Eastern Partnership’s creators, former Polish Foreign Minister Radek Sikorski, described it to US officials as designed, among other things, to ‘stem growing Russian influence’. The primary purpose of the program, according to the document, was to ‘Counter Russia’s influence in Eastern Europe.’ It was, of course, the refusal of former Ukrainian president Viktor Yanukovich to sign up to the Partnership which led to the protests in Kiev, his eventual overthrow, the annexation of Crimea, and war in Donbass. In other words, it wasn’t EU ‘weakness’ and ‘complacency’ which led to the conflict in Ukraine, but rather an effort by the EU to expand its own sphere of influence and ‘counter Russia’s influence’ – in effect, the exact opposite of what the respondents above claim.

Behind the consensus displayed in the answer to Carnegie Europe’s question lies an assumption about Russian motives and behaviour which is faulty – namely that Russia is bent on undermining Europe and will exploit any opportunity to do so. The possibility that Russia might instead be reacting to what it perceives (rightly or wrongly) as European efforts to undermine Russia is never considered. Consequently, the solutions proposed involve doing more of exactly the kind of things which led to the problem in the first place. It’s often said, ‘If you find yourself in a hole, stop digging.’ It’s advice European security ‘experts’ seem incapable of heeding.

Euronews

There has been much discussion in the Russian media this week of a resolution by the European Parliament calling on the European Union to develop a ‘strategic communications’ plan to counter propaganda from the Russian Federation and the Islamic State of Iraq and Syria (ISIS). This follows a report issued last month by the policy department of the EU’s Directorate General for External Policy, entitled EU Strategic Communications with a View to Countering Propaganda.

The report, and the ensuing parliamentary resolution, repeat much of what has been said in other documents denouncing ‘Russian propaganda’ which I have covered in this blog: Russia is waging information war against the West, and trying to divide the European Union; RT is bad, bad, bad; something must be done. Where the EU breaks new ground is in directly comparing the Russian Federation with ISIS, and treating the two as if they are one and the same in terms of the threat which they pose to Europe. Perhaps more than anything else, it is this aspect of the EU’s action which has caused outrage in Moscow.

At the heart of the complaint about ‘Russian propaganda’ is a fear that the Russian media is countering the prevailing narrative in the West about international affairs. As the report notes, ‘Russia fosters an anti-interventionist narrative’ and seeks to ‘ convince European audiences that the EU is focused on imagined threats from Russia and neglecting the real ones from the south.’

Putting aside whether this is a good or bad thing, what intrigues me is the Eurocrats’ belief that they can deal with the existence of a Russian counter-narrative by pumping money into counter-propaganda. After all, the narrative which the Russians are trying to undermine is the one which prevails throughout the bulk of the Western media. It is hardly lacking in support already.

In another document issued last month, British neoconservative think tank The Henry Jackson Society denounced ‘Putin’s useful idiots’ in the West and called on academics and journalists to do more to spread the bad news about Russia.  ‘Academics, commentators, and others should raise awareness in the West of the nature of the Russian regime’, says the Henry Jackson Society, ‘Outside of the expert community, there is a general lack of awareness of the Russian regime’s use of selective terror and its criminality – the regime’s dubious origins in the 1999 apartment bombings; its involvement in the murder of people like Anna Politkovskaya, Sergei Magnitsky, and Boris Nemtsov; its military tactics in Syria.’

This is a very odd claim given that ‘outside the expert community’, in the mass media which ‘ordinary people’ consume, denunciations of the Russian government’s criminality are two a penny. ‘Russian propaganda’ hardly registers against the torrent of Russophobia coming in the opposite direction. If people do turn to the Russian media, it is quite probably because they want to hear something different. Churning out even more anti-Russian material is unlikely to make a difference.

This is especially true if the operation is government-run. The EU resolution reflects a strange belief that officially-sponsored efforts to fight the Russians will be more successful than those of the massed ranks of the Western press. Page 9 of the report contains this remarkable, and quite amusing, nugget of information:

The multi-language broadcaster Euronews was launched on 1 January 1993 to promote European unity by presenting information from a distinctly European perspective. …  Since its launch, Euronews has received EUR 240 million worth of funding from the European Commission, EUR 25.5 million of which came in 2014. … On several occasions, Euronews has been accused of biased reporting, particularly through its Russian language service. Coverage of the 2008 war in Georgia, the 20th anniversary of Ukrainian independence in 2011, the 2014 referendum in the Donbas and the conflict in eastern Ukraine, as well as events in Transnistria has been accused of being unbalanced and pro-Russian.

Even the EU’s own propaganda outlets are ‘pro-Russian’, it seems. I don’t know whether to laugh or cry.

Vote for ‘Remain’

Being a British as well as a Canadian citizen, and having been resident in the United Kingdom within the last 15 years, I have a vote in the imminent referendum on whether the UK should leave the European Union (EU). Today I received my postal ballot. I intend to put a cross in the box marked ‘Remain a member of the European Union’.

Arguments for and against the EU range from the rationalistically technocratic to the purely emotional. Left-wing opponents of the EU think that it is a bastion of neoliberalism. Right-wing opponents think that it is a source of socialist regulation. They can’t both be right. Perhaps leaving the EU will damage the British economy; perhaps it will strengthen it. We don’t actually know.

What we do know for sure is that by the standards of the rest of the world, Britain is a pretty prosperous and successful country. Whether this has anything to do with the EU, one cannot tell. But certainly the EU has not wrought untold damage upon the UK. Certainly, the EU is imperfect, perhaps even badly flawed. But so are all human institutions. The fact that something is imperfect is not per se a reason for abandoning it in favour of the unknown. Given Britain’s prosperity, the burden of proof lies upon those who would exit the EU to show that leaving would definitely be beneficial. That proof has not been provided.

What I can be sure of is that leaving the EU would deprive my family of benefits which it enjoys at the moment. Being a citizen of the EU allows one to live, study, and work anywhere in the Union without hindrance. This is a tremendous privilege. Members of my family may wish to go to university in Europe and make lives for themselves there. Brexit wouldn’t make this impossible for them, but it would certainly make it more difficult. From a purely person perspective, I would rather that my children had access to a union of 500 million people and an area of four million square kilometres than be limited to one small island near the far western edge of the Eurasian continent.

My stance is also a matter of identity and aesthetics. I am a citizen of two countries. I have lived and worked in various European countries – the UK, Switzerland, Belarus (more precisely the Belorussian Soviet Socialist Republic), Russia, Germany, Italy, and Belgium. I speak English, French and Russian, as well as some Italian and German. Simply put, I feel cosmopolitan rather than nationalist. Perhaps that’s just because as an anglophone born in Quebec and brought up in Wales, I have an innate dislike of separatists and nationalists, and have a sense of the value of belonging to a larger whole. But I think that there is more to it than that. Although the EU often fails to deliver on its promises, the basic ideals it stands for – free trade, open borders, and the like – are things I support and identify with. They are certainly better than the alternative of Little England.

Vote ‘Remain’!

EU: In or Out?

My mother, Dr Ann Robinson, who among other things was at one time a member of the Economic and Social Committee of the European Union (EU), has written a book entitled ‘In or Out? An Impartial Guide to the EU’. The idea is to inform British voters of what the the EU is and what it does, so that they can make an informed choice in the forthcoming referendum on EU membership, but it may also be interest to non-Brits wanting to know about the subject. It is available as an e-book for a mere £2.99 here; and also for Kindle at Amazon.co.uk here.

She has also started a blog about the EU, whose title is modelled after that of this blog: EUrationality. You can read it here. I have added it also to my blogroll.

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Taking Ukraine’s carrot

Ukraine, we are often told, has made a choice – to become a ‘European’ country, and in this way to decisively cut its historical ties to ‘non-European’ Russia. But what if Europe (in the form of the European Union (EU)) turns Ukraine away?

This has always been more likely than supporters of Ukraine’s post-Maidan government have been willing to admit. Ukraine’s situation is somewhat analogous to that of Turkey – even if the country were to fulfill all the demands that the EU makes of it, there is a very good chance that the Union would deny it membership anyway. The same applies to membership of the North Atlantic Treaty Organization (NATO). ‘Europe’ is like a carrot dangling always out of the reach of a Ukrainian donkey.

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Ukraine & Europe

Continue reading Taking Ukraine’s carrot

Streaming nonsense

One of the declared purposes of this blog is to analyze irrational decision making processes in foreign policy. Rationality can be defined in many ways, but one is in terms of coherence of aims and means. Setting yourself an objective and then pursuing a policy which undermines that objective is not what most people would consider rational. Take, for instance, the goal of energy security. As I wrote in my Dictionary of International Security, this ‘implies guaranteed access to a reliable source of energy at a reasonable price.’ Opposing measures to improve such access, and preferring instead to preserve an unreliable source of energy supply, would not be a rational means of reaching that goal.

Yet this appears to be the European Union’s (EU) preferred method. For years a significant proportion of the natural gas Europe consumes has been bought from Russia and delivered via a pipeline running through Ukraine. This has proven not to be a ‘reliable source of energy.’ Continuous disputes between Russia and Ukraine over price and non-payment of debts, alleged siphoning off of gas, and so on, coupled with political tensions between the two countries, have resulted in Russia cutting off supplies to Ukraine on several occasions, threatening the supply of gas to the EU. A rational EU energy security policy would, therefore, not merely seek a cheap alternative source outside Russia (if that is possible), but also endeavour to bypass Ukraine so that any gas which is bought from Russia is not at risk of similar disruptions.

Given this, the North Stream pipeline which links Russia directly with Germany is entirely in keeping with the objective of European energy security. So too was the idea of South Stream, which would have delivered gas to Europe via the Black Sea and Bulgaria. But far from supporting these initiatives, the EU resolutely opposed them, and in the case of South Stream it eventually succeeded in forcing Russia to abandon the project. Now it is preparing to oppose a second North Stream pipeline.

Last week, as the Russian newspaper Kommersant reports:

Russia’s gas giant Gazprom signed a binding shareholders’ agreement with European energy companies for the construction of the Nord Stream-2 pipeline from Russia to Germany. … Gazprom will own a controlling stake, while Germany’s E.ON and BASF/Wintershall, Austria’s OMV and Royal Dutch Shell will receive 10 percent each, while France’s Engie will receive 9 percent. … The largest power companies in the UK, France, Germany and Austria signed the project, whose implementation will minimize the transit of gas through Ukraine … However, the agreement is contrary to the position of Brussels; according to Vice-President of the European Commission Maroš Šefčovič , there is no need for any gas pipelines bypassing Ukraine.

‘I hope those companies [who signed the deal with Gazprom] understand their responsibility for the overall security of supply for the whole of Europe, not only for parts of it’, Mr Šefčovič said. Polish president Andrzej Duda also opposed the deal, which he says ‘completely neglects Polish interests.’ ‘The insecurity in this context stems from the egoism of some nations and their complete disregard for the interest of other nations,’ Duda said. ‘That makes it hard to believe in Europe’s unity.’

I find Duda’s statement a little hard to understand. At present, while some gas comes from Russia via Poland, the Ukrainian route goes through Slovakia. Diverting gas from Ukraine to North Stream-2 doesn’t mean less money for Poland, or even a less secure supply. Likewise, the EU’s position as a whole doesn’t make much sense. The EU says that it would prefer to continue using Ukraine, but upgrading the pipeline there would require huge investments and given the turmoil in that country nobody is prepared to spend the money required.

The only explanation I can come up with for the EU’s position is that this is actually a matter of geopolitics. Russia is the current ‘bête-noire’, which must be isolated. Projects which strengthen Russia are therefore a bad thing per se. Ukraine, by contrast, must be supported. According to one account, ‘Brussels is worried that cash-strapped Ukraine would be hard hit if it lost crucial income from transit fees in the events of Russia shifting its gas to other routes.’ Propping up Ukraine, it seems, is considered more important than having a cheap and reliable source of energy. Thus, if Šefčovič and Duda have their way, under the guise of ‘energy security’, Europeans will end up paying more for their gas. Whatever else it may be, this isn’t a rational energy policy.