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Defense & Security
President of Russian Federation, Vladimir Putin

The United States, Europe, and Post-Putin Russia

by Mark N. Katz

Putin’s rule over Russia will come to an end at some point, but when it will end as well as what the policy preferences of his successors might be are uncertain. It would be in the interests of the United States and Europe to signal on what terms they would be willing to cooperate with a post-Russian leadership. Vladimir Putin has been the ruler of Russia since the turn of the century. He may remain in power through 2036, as the 2020 revision of the Russian constitution allows him to, or perhaps even longer. Then again, he may be ousted suddenly and surprisingly any day now, as the recent Wagner mutiny and the apparent lack of effective opposition to it within the Russian security services and public suggest is possible. Maybe he will decide not to run for re-election in 2024, though this does not seem likely. Sooner or later, though, Putin’s rule over Russia will come to an end. What is not at all certain, of course, is who will replace him and what sort of foreign policy the new leader will pursue. It would appear, though, that there are only a few possibilities. One is that Putin will be succeeded by someone just like him who will continue Moscow’s hostile policies toward Ukraine and the West in general. Another is that Putin will be replaced by someone within his circle that decides Moscow needs to cut its losses in Ukraine and rebuild good relations with the West both to revive Russia’s economy and to hedge against an increasingly powerful China. While this might seem unlikely, Russian and Soviet history are replete with examples of new autocratic leaders dramatically reversing key aspects of their predecessor’s policies. Yet another post-Putin possibility is an authoritarian leader who wants to cut Moscow’s losses in Ukraine but who sees the survival of both autocratic rule and even Russia’s territorial integrity as best served through increasing reliance on Chinese support and guidance. It is also possible that Putin’s rule will end as a result of the rise of democratic forces which want Russia to become part of the West and cooperate or join the EU or even NATO. For this scenario to occur, there would have to be a dramatic change of heart within the Russian security services about what is in Russia’s and their own interests. While this seems highly unlikely, there have been examples in other where military-backed autocratic rule gave way to democracy. Finally, whether Putin’s successor is autocratic or democratic, he or (much less likely) she may simply be weak as a result of having to deal with a compounding internal crisis resulting from Putin’s policies, including popular discontent over Russian casualties in Ukraine, economic decline, and secessionism in non-Russian or even Russian regions of the Russian Federation. What Can Europe and the United States Do? Russia’s post-Putin leadership and its policy preferences, whatever they may be, will have an enormous impact on Europe and the United States as well as other countries and regions of the world. But while obviously they hope to see Putin succeeded by a new leader who will end the war, withdraw from Ukraine, and improve Moscow’s ties with the West, Europe and the United States will have very little ability, if any, to affect the post-Putin transition — especially if the person who succeeds  him comes from within his inner circle. Putin has sought to rally Russian public support for his war in Ukraine through claiming that the West wants to bring about the breakup of Russia. Whether Putin himself actually believes this, there appears to be no possibility of changing his mind about the West being his implacable enemy. The United States and Europe, though, would do well to signal to whoever might succeed Putin that this is not the case. Specifically, Washington and Brussels should make clear how they would like to relate to post-Putin Russia. Such messaging should include the following points: Just as the United States and Europe support the territorial integrity of Ukraine, they also support the territorial integrity of Russia. The West has no interest in seeing the breakup of Russia. The United States and Europe will lift their economic sanctions on Russia (including those on Moscow’s exports of oil and gas) in response to Russian withdrawals from Ukrainian territory. The more occupied territory that Russia returns to Ukraine, the more Western economic sanctions against Russia will be lifted. While Europe and the United States would like to see Russia become a Western-style democracy, they acknowledge that whether it does so or not is an internal matter which Russians alone will determine. The United States and Europe are prepared to have normal relations with any type of Russian government — democratic or autocratic — which is willing to behave non-threateningly toward the West, Ukraine, and other former Soviet republics. While they respect the Russian government’s desire to continue cooperating closely with China, Western governments want Moscow to know that the United States, NATO, and the members of the Quadrilateral Security Dialogue (US, Japan, India, Australia) are willing to discuss common security concerns about China (which many Russians besides Putin have had) if and when the new Russian leadership wishes to discuss them. The articulation of these messages by the United States, Europe, and, regarding the last point, Quad governments, will not magically lead the Russian people, much less Putin’s inner circle, to oust Putin and embrace the West. Indeed, it is possible that a Putin loyalist successor will spurn them. But if the United States and Europe do not signal under what terms they would be willing to cooperate with a post-Putin leadership, then Washington and Brussels may reduce the chances that a post-Putin leadership will be willing to cooperate with the West.

Diplomacy
Lithuania President Gitanas Nauseda, Prime Minister Alexander De Croo and NATO Secretary General Jens Stoltenberg pictured during a head of states summit of the NATO

Erdoğan Seeks Better Relations with the West after His Reelection

by Salim Çevik

Turkish President Recep Tayyip Erdoğan seems to have changed course on his country’s foreign relations. At the last NATO summit in Vilnius, Lithuania, he finally lifted his veto on Sweden’s proposed membership in the alliance; but his agreement is still incomplete as it requires the approval of the Turkish Parliament. And Erdoğan has apparently made parliamentary approval contingent on the US Congress approving his country’s purchase of F-16 fighter jets, which many assume may now be a done deal. Moreover, during the talks on Sweden’s accession, Erdoğan reiterated Turkey’s desire to join the European Union (EU) and hoped for a revival of the long-dead EU membership process. Prior to the Vilnius summit, Erdoğan further showcased his foreign policy outreach by hosting Ukrainian President Volodymyr Zelenskyy in Ankara, signaling support for Ukraine in its ongoing war with Russia.  On the domestic front, Erdoğan has formed a new cabinet that signals better relations with the West, as the most ardent anti-western member of the previous cabinet, former Interior Minister Süleyman Soylu, has been left out. Additionally, the president aims to instill confidence in western markets by appointing respected figures like Mehmet Simsek as economy minister and Hafize Gaye Erkan as Central Bank governor. These appointments are seen as positive signals of an effort to strengthen economic ties with the West. This series of moves has triggered the hope, especially in western circles, that Turkey could return to the western fold and that Turkish-Russian relations will cool in parallel. However, pessimists, who see Turkey’s departure from the West as a done deal, disagree and are right to believe that Turkey’s relations with both the United States and European countries have fundamentally changed. It is no longer possible to go back to the early 2000s when Erdoğan was steering the country toward EU membership. The EU has no intention of admitting Turkey; but even if it did, the process would not be in Erdoğan’s favor. Nor is it possible to go back to the Cold War era, when Turkey was firmly embedded in the western geopolitical system. Turkey no longer sees Russia as a threat or an adversary in the sense that most western countries do. The fact that Turkey has resisted approving Sweden’s NATO membership for more than a year and that it will only do so in exchange for the delivery of F-16s shows how badly damaged Turkish-European and Turkish-American relations truly are. Therefore, pessimists point out that rather than signaling Turkey’s return to the West, the whole debacle proves how problematic and transactional Turkish-western relations have become. But these analysts overlook the fact that Erdoğan is pushing for a reorientation in foreign policy, and in his relations with the West in particular. This reorientation started long before the most recent presidential elections in May; but the president’s victory gave him a stronger hand to reboot his foreign policy, which is not aimed at bringing Turkey back into the West’s orbit, but rather at building better functioning relations with it. Turkey’s Departure from the West Turkey’s divergence from the West has taken place at the level of both political values and geopolitics. Over the last decade, Turkish democracy has been in serious decline. Especially after the transition to a hyper-presidential system in 2018, which eliminated all checks and balances in the political system, Turkey’s has become an increasingly autocratic regime. Turkish foreign policy has also become increasingly militarized, much to the chagrin of western capitals. Not only has Turkey used its military power in Syria, Iraq, and Libya but it has also deployed its navy to the Eastern Mediterranean, aggressively threatening the sovereignty of two EU countries: Greece and Cyprus. These aggressive policies were backed by an expansionist naval doctrine called Mavi Vatan (Blue Homeland), whose ideology has disturbed western policymakers. The naval officers who created and developed the Blue Homeland concept never concealed their pro-Russian leanings and deliberately propagated an anti-American and anti-western narrative. These officers, and the political circles associated with them—dubbed Eurasianists in Turkey—have become an integral part of Turkey’s ruling coalition. Turkey’s purchase of S-400 missiles from Russia took place in such a context and represents the culmination of Turkish-American tensions. Turkey’s autocratic turn at home and its militarized foreign policy, which often work against the interests of its western allies, were simultaneous and mutually-reinforcing processes. But said foreign policy reached its limits toward the end of 2020. Turkey became regionally isolated with an overextended military, and its aggressive foreign policy, the rise of authoritarianism, and the subsequent decline of the rule of law plunged it into a protracted economic crisis. This economic downturn began to undermine Erdoğan’s meticulously-built power, as evidenced by his party’s defeat in the 2019 local elections. Unable to sustain autocratic rule, anti-westernism, and an aggressive foreign policy all at the same time, Erdoğan began to seek a new direction. The essence of the new approach is to maintain his authoritarian rule at home while becoming a less confrontational actor in foreign relations. Reorientation in Foreign Policy This reorientation began first in the Middle East, where Turkish authoritarianism was never going to be a cause for concern. Turkey began to mend fences with Israel, Egypt, Saudi Arabia, and the United Arab Emirates, while at the same time aligning itself with the emerging Abraham Accords framework in the region. While accommodating western geopolitical interests, Turkey’s relations with Iran began to enter a more confrontational phase. One of the main motivations for this regional restructuring was economic: Turkey continues to receive significant form of foreign investment from Gulf states. Another motivation was geo-strategic: Turkey hoped that normalization with Israel, and to a lesser extent with supposedly pro-western Arab regimes, would help ease tensions with the United States. While reconciling with its Middle Eastern rivals, the Erdoğan administration was also looking for opportunities to curry favor with Washington and increase its own importance in the eyes of the Biden administration. One of the early opportunities came in the summer of 2021 after the US withdrawal from Afghanistan when Turkey immediately stepped in and offered to take over the protection of Kabul International Airport. This initiative earned Erdoğan his first personal meeting with Biden. However, the unprecedented rapid collapse of the Kabul government prevented Ankara from using the Afghanistan front as a base to build its relations with the United States. A second opportunity arose in February 2022 when the Russian invasion of Ukraine began. New Opportunities for Erdoğan The war in Ukraine has had contradictory effects on Turkey’s foreign policy and on Turkish-western relations. On the one hand, it increased Turkey’s strategic value and facilitated its reengagement with the West. On the other hand, it created additional difficulties as western countries demanded that Turkey sever its ties with Russia, a demand that Turkey rejected. Erdoğan ultimately managed to spread the idea that perhaps it would be better for everyone if Turkey remained relatively neutral. Erdoğan’s personal ties with Putin and the complex and highly interdependent Turkish-Russian relations placed Turkey in a special position among NATO countries. Turkey therefore tried to maintain a pro-Ukrainian line without being anti-Russian. So far, Erdoğan has managed to maintain this seemingly paradoxical position. Turkey has given full military support to Ukraine, and especially in the early days of the war Turkish drones were vital for Ukraine’s defense. To be sure, this support was better than that of many European countries. Politically, however, and while condemning Russia’s occupation of Ukrainian territory since 2014, it has not joined in imposing sanctions on Russia, and the two countries have maintained good diplomatic relations. Erdoğan clearly enjoyed his balancing role. His policies during the Ukraine war have earned the Turkish public’s respect and helped, at least indirectly, in his reelection as they contributed to his image as a world-renowned statesman. Turkey also enjoyed the economic benefits of its being Russia’s main economic outlet. Not only did Turkish-Russian trade increase, but Putin lent a helping hand in the run-up to the elections by agreeing to delay Turkey’s natural gas payments and depositing much-needed foreign currency in the Turkish Central Bank. Erdoğan justified this unique position by emphasizing his mediating role between Ukraine and Russia and between the latter and the West. In this context, securing the grain deal was a particularly important achievement that helped Erdoğan justify his balancing act. Now the deal appears to be in tatters, raising questions about his ability to maintain his role as mediator. The Turkish president has also raised eyebrows in Moscow by recently hosting President Zelenskyy and increasing his support for Ukraine’s NATO membership. He even tested the Kremlin’s nerve by allowing Azov fighters to return to Ukraine with Zelenskyy, an apparent violation of a prisoner swap deal brokered by Turkey. Despite all this, Erdoğan wants to stick to his original position and continue to play the role of mediator. He is counting on the fact that Putin currently cannot afford a falling-out. Erdoğan has already indicated that he expects to host Putin in Turkey in August for a one-on-one meeting, although so far the Russian side has not confirmed the visit. Russia’s reaction to Turkey’s recent moves, such as ratifying Sweden’s NATO membership and supporting Ukraine’s NATO membership, has also been rather mute. Therefore, Turkey’s pivot to the West does not mean that it will cool its relations with Russia. Erdoğan realizes that the longer he maintains his balancing role, the stronger his hand will be with both the West and Russia. A Revitalization of Turkey-EU Relations? If there is no going back to the Cold War era, there is also no returning to the early 2000s, when Turkey was pushing for EU membership. Despite surprising everyone by rekindling the dormant EU membership process ahead of the Vilnius summit, Erdoğan’s move is unlikely to breathe life into Turkey’s EU accession aspirations. This is primarily due to the fact that EU membership would not align with the president’s personal interests, as it would necessitate a higher standard of the rule of law that might curtail his currently unchecked and absolute authority in the country. The accession process revolves around aligning a nation’s internal standards with EU norms, known as the community acquis. Consequently, becoming an EU member would demand a transformation of Turkey’s domestic political system, which currently concentrates power in Erdoğan’s hands. Given this, how should Erdoğan’s statements on revitalizing the EU process be interpreted? Part of the explanation has to do with his transactional style of policymaking. A master of brinkmanship and bargaining, Erdoğan often raises demands and stakes just to get a better deal. This is why Turkey’s foreign policy disputes are often resolved at the 11th hour, as is still the case with Sweden’s NATO membership. But these tactical moves also reflect Erdoğan’s genuine desire to improve relations with the EU. It is important to note, however, that Erdoğan does not necessarily want Turkey to be inside the EU; he simply wants to do business with it. The EU remains Turkey’s primary economic partner, and Ankara has long been demanding a modernization of the Customs Union agreement with the bloc to boost its trade. Moreover, better relations with European countries are expected to be instrumental in attracting much-needed foreign investment. Gulf money has only carried Turkey so far, and to solve its deep economic problems it is necessary to attract the financial power of the West. Thus, Erdoğan wants more engagement with Europe on the economy, defense, security, and refugee issues, but not in the context of EU membership. In fact, the refugee deal signed between Turkey and the EU in 2016 was designed precisely around the idea that Turkey is not and will not be part of the EU. Accordingly, Turkey continues to block the movement of refugees toward Europe in exchange for financial assistance from the EU. The bloc has recently concluded similar agreements with North African countries, aiming to externalize its refugee problem. For this cooperation with Turkey to work, Turkey needs to be outside the EU, not inside it. Thus, Turkey’s desire to create better working conditions with the EU is emblematic of the nature of its reorientation toward the West. Furthermore, western capitals seem increasingly willing to respond positively to overtures made by the Turkish President. Western Reaction to Erdoğan’s Moves It is not only Erdoğan who has changed his position; the West has also changed its approach to him. Biden and other western leaders were distancing themselves from Erdoğan in anticipation of his loss in the presidential elections. Biden did not invite him to Washington and did not visit Ankara, despite Turkey’s growing importance in the context of the Russia-Ukraine war. Knowing how much Erdoğan values personal meetings, Biden used them as leverage to resolve stalemates like the one over Sweden’s NATO membership. Moreover, having learned Erdoğan’s style of politics over the years, western leaders successfully avoided becoming his punching bag ahead of the elections, as former German Chancellor Angela Merkel did during Turkey’s 2017 constitutional referendum. To achieve this, they followed a policy of ignoring rather than supporting Erdoğan. But when the elections were over and he was set to rule Turkey almost single-handedly for another five years, western leaders rushed to congratulate him. It is also becoming much easier for the West to work with Turkey on a geostrategic and security level. For the United States, Turkish-American security cooperation is shifting from the Middle East to the Black Sea. Turkish-American relations in the Middle East have inevitably taken on a more political and ideological character, with the two countries’ different threat perceptions and respective approaches to the Kurdish issue and to Kurdish actors in northern Syria remaining the biggest challenge in bilateral relations. In contrast, Turkey and the United States are more in agreement on the Black Sea. Moreover, within the Pentagon, EUROCOM’s approach to Turkey is much more friendly than CENTCOM’s, and has a better track record of cooperation. For Europe, Erdoğan’s commitment to the migration deal makes him a valuable partner, especially given the growing anti-immigration stance of the Turkish and European publics. Moreover, Erdoğan’s preference for working with the EU but for simultaneously not genuinely pushing for membership in it fits well with European policies. The EU and Erdoğan are more in agreement on their common desire to keep Turkey out but to simultaneously build better working relations. Overall, it seems clear that Erdoğan is eying a new reorientation in his foreign policy. At the moment he is at the height of his power at home and does not need to use the West as a punching bag for domestic political gains. Furthermore, economic conditions and regional developments are compelling him to lean more toward western powers. As a result, Turkish foreign policy is poised to take a new direction. Nevertheless, any improvement in relations will likely be limited to the geostrategic and economic realms and will not encompass a realignment of political values. Without common political values, the result will be significantly improved but will remain transactional between Turkey and its western partners. This paper was originally published by Arab Center Washington DC. Republished with permission. © Arab Center Washington DC, October 2023.

Diplomacy
Croatian Parliament building, with flags of European Union and Croatia

Croatia in the European Union Ten Years On: A Success Story

by Dr Ivana Damjanovic

From a difficult accession process to full integration into the Schengen area and the Eurozone, ten years into its EU membership Croatia has been a “good EU pupil” and an example for EU candidates to follow. However, challenges remain in reaching European standards, particularly regarding administrative reforms and standards of living. When Croatia joined the EU on 1 July 2013 as the 28th Member State, it was the only European nation, except for Greece in 1981, to do so on its own. The newest EU Member’s accession was far from obvious due to complex political circumstances. Involved in the longest war in recent European history (1991-1995), Croatia was left with significant human and economic losses – 20 000 people killed and the cost of reconstruction amounting to 160 percent of GDP. The country’s difficulty to come to terms with war crime prosecutions, all of which were eventually acquitted, significantly impacted its relations with the EU. Consequently, Croatia missed the 2004 (Central and Eastern European States) and 2007 (Bulgaria and Romania) rounds of accession and, somewhat ironically, was placed in the membership package with the Western Balkan countries and later in the accession negotiations with the eternal EU candidate Turkiye. Troubled border issues with Slovenia, then already an EU Member, further compounded the accession – unnecessarily as the Court of Justice of the EU confirmed in 2020. Per aspera ad astra: a good pupil of the EU The enlargement fatigue, which came as a result of the slow integration process for new members, enticed the Member States and the European Commission to be more demanding on Croatia. In addition to the Copenhagen political criteria introduced for all new enlargements, Croatia’s membership negotiations involved an unprecedented 35 chapters with specific opening and closing benchmarks, 160,000 pages of the EU’s Acquis Communautaire, and an additional monitoring process between closing negotiations and full membership, which all led to a long accession process, just short of a decade. With hindsight, this level of scrutiny most likely helped Croatia join the Schengen area and the Eurozone on 1 January this year – ahead of several Eastern European States. With its public debt-to-GDP ratio on the downward trajectory (68.4 percent at the end of 2022), Croatia is also performing better than other Mediterranean Eurozone States. The war, for which the country never received any reparations, and then the “lost decade” between 2004 and 2013 with the Global Financial Crisis in 2008, critically slowed Croatia’s economic growth, meaning it began its membership in the EU as its poorest growth prospects. Ten years on, macroeconomic data paints a more positive picture. Croatia’s GDP growth in the second decade of its EU membership has almost tripled compared to the decade before – reaching a staggering 13.1 percent in 2021. Croatia’s EU funds absorption has also significantly improved with the country receiving €12.1 billion in total from different funds. EU membership has facilitated a number of infrastructure projects, from the Peljesac bridge, one of the EU’s largest infrastructure investments, to reconstruction following earthquakes that hit Croatia in 2020. The accession to the Eurozone has lowered borrowing costs and given impetus to exports. It is expected that it will also boost tourism. Joining the Schengen area and removing borders with neighbouring EU Member States has enabled visitors to travel faster, with record numbers of tourists expected this year. Remaining hurdles Despite stellar numbers, systemic challenges remain affecting Croatia’s microeconomic performance. Overrepresentation of employment in the public sector, high and complex taxation, and inflexible labour laws have contributed to a stifling effect on business activity. Croatia’s average net salary is about €1100, well below the EU’s average, and its GDP per capita is among the lowest in the EU, half the EU average. Croatia’s population has consequently declined by nearly 10 percent to 3.8 million since joining the EU, a significant loss for a small country of mostly its younger population. It therefore does not come as a surprise that the country’s unemployment rate has been steadily decreasing over the years – it is currently at 5.6 percent. Labour shortages are being filled by workers from Balkan countries, but also by Asian workers, a cultural opportunity and a challenge for the rather homogenous Croatian society. Among experts and the business community, Croatia is still perceived as a relatively corrupt country,  fairing only marginally better than Romania, Bulgaria, and Hungary. Several notable high-profile corruption cases in recent years demonstrates the scope of corruption. The EU-wide Public Prosecutor’s Office (EPPO), established in 2021 to investigate corruption specifically related to EU funds, recorded 23 investigations in Croatia last year, most of which concerned regional development and agricultural funds. While the different reforms are underway, the question is whether they will be sufficient to diversify the country’s economy, still largely dependent on tourism (20 percent of Croatia’s GDP) and stop the demographic hemorrhage. New horizons Since Croatia’s accession, the EU has also faced a number of challenges. From the 2015 migration crisis to Brexit, and humanitarian, energy, and economic challenges brought on by Russia’s invasion of Ukraine, the EU has been forced to rethink its enlargement strategy. It has recently accepted Ukraine and Moldova as new candidates for EU membership, with Georgia in the pipeline. This is in addition to the already lined up Western Balkan states. Given the persisting political tensions and socio-economic gaps, the integration of such a disparate group of countries presents a difficulty. For now, the current geopolitical situation and the ongoing war requires a cautioning of the EU’s openness. Croatia, as “good EU pupil,” can be a constructive factor in this process. It has been a strong supporter of further enlargement and with its recent experience can provide know-how and assistance. Croatia’s war, and the peacebuilding that followed, could be valuable for the post-conflict reconstruction of Ukraine. Unlike some of the EU’s “enfants terribles” among new Member States, Croatia has not challenged the rule of law or broader EU values. So far, it has proved reliable in protecting the EU external border, which is positioned on the challenging Western Balkan migration route. Much of its good reputation in Brussels can also be thanked to the country’s prime minister, Andrej Plenkovic, who belongs to a progressive line of European conservative leaders gathered in the European People’s Party (EPP) that still rules the EU, as the biggest party in the European Parliament. Given its size, geographical position, and strong European identity, Croatia’s accession to the EU has been an exception in many aspects. However, its performance over the first ten years demonstrates that exceptions can be politically wise. Much as its famous soccer team, Croatia has been in many ways punching above its weight. Its “success story” could thus give an impetus to European integration and serve as a model for future EU enlargements.

Energy & Economics
French finance minister Christine Lagarde

Strengthening resilience in a changing geopolitical landscape

by Christine Lagarde

Welcome address by Christine Lagarde, President of the ECB, at the 9th ECB conference on central, eastern and south-eastern European countriesFrankfurt am Main, 17 July 2023 It is a great pleasure to open the ninth ECB conference on central, eastern and south-eastern European countries. The CESEE region – which comprises 21 different economies – can overall be considered a European success story in recent decades, having enjoyed rapid convergence towards higher-income countries. Between 2000 and 2021, the economic size of the region almost doubled to 40% of the euro area aggregate. And this strong growth has led to rising living standards, with average GDP per capita jumping from 36% to 54% of the euro area aggregate in the same period. But the world has changed dramatically since we last held this conference in 2019. A series of shocks have upended our old reality and replaced it with new uncertainties. Devastatingly, one of those shocks has been the outbreak of war in Europe – an event that we once thought consigned to the history books. Russia’s unjustified war against Ukraine and its people is a human tragedy. And it has had deep economic consequences for the CESEE region in particular. In parallel, the world is changing in ways which make the growth models of many CESEE countries more vulnerable, as these models generally involve high levels of trade openness and integration into global value chains. But as Graham Greene once wrote, a “feat of daring can alter the whole conception of what is possible.” And the challenge now facing the CESEE region is how to continue its convergence story and ensure that growth remains resilient in this new landscape. Fortunately, CESEE economies can already look back on a strong history of resilience – be it mastering the transition from central planning to market economies in the 1990s or recovering from the global financial crisis with impressive speed. I therefore have every confidence that they will be able to adapt to these new uncertainties. A changing geopolitical landscape There are two broad shifts reshaping the global economy that may have profound implications for the CESEE region: rising geopolitical tensions and weakening global trade. After a long period in which the United States was the sole superpower, the world is becoming more multipolar, with greater competition between major powers, less respect for international rules and norms and a waning influence for multilateral institutions. In this environment, even deep commercial ties may be insufficient to prevent trading relationships from becoming adversarial. This makes the global environment increasingly prone to shocks and the task of macroeconomic stabilisation for all countries much harder. Unfortunately, the CESEE economies know this all too well. Russia’s war against Ukraine triggered a massive shock to the global economy – especially to energy and food markets – and CESEE economies have been particularly exposed, given their geographic proximity to the conflict. While inflation has now started to come down, over two-thirds of economies in the CESEE region saw annual inflation hit 13% or above last year, with several countries seeing markedly higher price increases. By comparison, annual inflation in the euro area was 8.4%. Geopolitical tensions risk accelerating the second shift in the global landscape: weakening global trade. Since the global financial crisis, trade growth as a share of world GDP has plateaued. And we are also seeing rising levels of protectionism as countries reconfigure their supply chains to align with new strategic goals. Over the last decade, the number of trade restrictions in place has increased tenfold. The CESEE region, and Europe more generally, may be vulnerable to such a shift. Last year, trade as a share of GDP was higher than the euro area average for two-thirds of CESEE economies. And while other major economies, such as the United States, have seen trade as a share of GDP fall since the pandemic, in the euro area it reached a record high in 2022. A new foundation for strengthening resilience A changing geopolitical landscape means that, in the euro area and the CESEE region, we need to build a new foundation for strengthening resilience. This foundation rests on further deepening the European Union and its ties to the surrounding region. I see three key elements. The first is reinforcing openness within our region. Trade fragmentation could see the flow of goods and services increasingly being pulled towards different trade blocs, at the expense of countries outside those blocs. By leveraging our regional strength, Europe and the CESEE region can recreate some of the benefits of globalisation on a smaller scale. The euro area is already the main trading partner for most CESEE economies. And we can capitalise on this existing momentum. Between the year 2000 and last year, the share of euro area imports from the CESEE region increased from 5% to 10%. And the share of euro area exports to CESEE economies reached 11% last year, almost double that at the start of the millennium. Moreover, CESEE economies in particular can benefit from changing global trade patterns as companies seek suppliers closer to home. Survey evidence shows that firms in the CESEE region, and especially those based in the EU, are seen as highly reliable trading partners. The ECB also has a key role to play here as the guardian of the euro. Our monetary policy plays an important anchoring role for the CESEE region, as the euro is widely used in trade invoicing and financing. Euro cash also serves as an important store of value – demand for it surged in CESEE economies following Russia’s invasion of Ukraine. The second key element is increasing our collective security. Europe and the CESEE economies have already taken substantial steps to increase their energy security, given the dangerous historical reliance on Russian fossil fuels in their energy mix. In February 2022, the EU was importing around 36% of its natural gas from Russia. Within the space of nine months, that fell sharply to 13% as the EU reduced its gas consumption and diversified towards imports of liquified natural gas. Most, though not all, CESEE economies have also made significant progress in substituting energy imports away from Russia and in building up gas storage levels. But we cannot stop there. We need to accelerate our efforts to decarbonise and increase our energy independence. That is why initiatives that help to build renewable energy sources are so important – such as Next Generation EU and the EU’s recent energy support package for countries in the Western Balkans. The third key element is defending and spreading our common values. The attack on Ukraine was also an assault on European values – such as the respect for international law and human rights. That is why Europe has imposed unprecedented sanctions on Russia and provided substantial support to Ukraine following the invasion. To date, the EU has made available €38.3 billion in economic assistance and over €21 billion in military support. The strength of the EU’s response demonstrates not only its capacity for action, but also its appeal as a political project that others see the benefit of joining – what the West German Chancellor Konrad Adenauer once described as the “Magnet Europa” effect. The push for EU enlargement has recently gathered momentum as a consequence of Russia’s war. Last year, the EU granted Ukraine, Moldova and Bosnia and Herzegovina candidate status. And it launched the process to open accession negotiations with Albania and North Macedonia, while also becoming open to granting Georgia the status of candidate country, conditional on reforms. Conclusion Let me conclude. A series of shocks have dramatically changed the global landscape in recent years. And today, rising geopolitical tensions and weakening global trade mean that economies in the CESEE region need to build a new foundation of resilience. But the record of past crises has already demonstrated just how resilient CESEE countries can be. Despite an exceptionally difficult 2022, the prospects for the CESEE region are encouraging. There are clear structural strengths that stand to benefit CESEE economies in the medium to long run, such as well-educated workforces and strong ties with Europe. So the task at hand is how to channel that spirit of resilience to counteract these new uncertainties. And by leveraging our regional strength and further deepening our economic and political ties, I have no doubt that Europe and the economies in the CESEE region can flourish together. Thank you – and I hope you enjoy today’s proceedings.

Defense & Security
Karl Nehammer Chancellor of Austria

Nehammer sticks to his No to Schengen expansion

by Karl Nehammer

Work meeting with the German Chancellor Olaf Scholz in Salzburg "I am very pleased that for the first time in over 10 years a Chancellor of the Republic of Germany is back in Austria in an official capacity. We are not only neighbours, but also closely interwoven culturally or in matters of economic relations. If we look at our border regions, they are in fact no longer border regions, because people have long since overcome these borders in the realities of their lives - whether as business people or when starting a family. And so, we have grown together a bit," said Chancellor Karl Nehammer at a joint press conference with Olaf Scholz at the Mozarteum University in Salzburg. The German Chancellor made his first bilateral visit to Austria and was received with military honours. In addition to bilateral issues such as energy supply, the working meeting focused on the fight against irregular migration and border controls within the Schengen area. "The partnership with the Federal Republic of Germany is particularly important because we are very often allies in the question of how we want to shape European policy and further develop the EU, always bearing in mind that there may also be different interests. In addition to excellent economic relations, Germany is one of our most important partners in tourism. We therefore have many points of contact here," the chancellor noted. Strengthening security means gaining people's trust in the European project Politically and in terms of content, there are major challenges to be tackled together: on the one hand, the Russian Federation's war of aggression against Ukraine with all its consequences, and on the other hand, irregular migration. The two heads of government agreed that, in order to have efficient external border protection, we must be able to quickly return those who are not allowed to stay to their countries of origin. However, this also meant that stable and sustainable relations with the countries of origin had to be established and expanded and that prospects had to be created in these countries, the Chancellor said: "Germany and Austria are on the same side here. Because only if we have credible external border protection and fast and swift asylum procedures, and if we can ensure order and security within the European Union in an orderly manner, will we win people's trust in the European project." The topic of Schengen was also discussed. He said the chancellor presented the Austrian perspective and described how 112,000 asylum applications had been filed in Austria in 2022, 75 percent of which had been registered for the first time, even though the applicants had crossed an EU country. "In Austria, the numbers are decreasing, but at the same time they are increasing in Germany. We are a community of solidarity within the EU, so we care about the numbers. And as long as the current Schengen system does not work, as you can clearly see from the border controls from Germany to Austria, we need joint efforts in Europe to strengthen the external border protection. We will therefore stand by Germany when it comes to pushing forward the Commission's measures," Nehammer said. He said there were steps in the right direction, such as pilot projects at the Romanian and Bulgarian borders and an agreement with Tunisia, which the chancellor believes will be forward-looking. Securing energy supply for the future with green hydrogen from Africa But Germany is also an important partner in the question of energy security. This year, Austria had already managed to fill its own gas storage facilities to 90 percent in August, to secure its gas supply and thus to strengthen its independence from Russia, the Chancellor said happily. This had also been achieved with the help of Germany, which had helped to set up gas alternatives. Work is underway on connectivity between Austria and Germany in order to benefit from the liquefied natural gas terminals that have been built, which will subsequently play an important role in Austria's security of supply. Germany will continue to be an important partner for Austria in the future when it comes to bringing green hydrogen to Austria via a pipeline infrastructure. For example, he said, a southern corridor is specifically planned with Italy to bring green hydrogen from Africa via Italy to Austria and Germany. "These are the issues that move us for the future - with the aim of becoming more independent of fossil energy, establishing security of supply for the people and continuing to work to ensure that the good partnership and friendship between our two nations within the European Union is developed further," the chancellor concluded.

Defense & Security
Ursula von der Leyen President of the European Commission

Keynote speech by President von der Leyen at the Philippines Business Forum

by Ursula Von der Leyen

Ladies and Gentlemen, It is very special for me to be in Manila and once again to experience first-hand the famous Filipino hospitality. Each time I visit, I am struck by the warmth, intelligence, and honesty of the people I meet. You make everyone feel at home, even 10,000 kilometres from home. While visiting your beautiful country, I have also learnt a proverb of yours. It says: ‘Be like a rice stalk: the more grain it bears, the lower it bows'. I believe a country's proverbs can tell a lot about its people.  And this proverb certainly describes the people of the Philippines: always humble, especially in success. Right now, the Philippines is booming. Thanks to your resilience, dynamism, and work ethic, your economy grew by close to 8% last year. You are among the fastest growing emerging markets. Your Development Plan, as outlined by President Marcos, is prioritising good governance, cutting red tape, and speeding up permitting for strategic investments, for example in renewables and semiconductors. Not only does this make the Philippines an even more attractive trade and investment destination for European firms, but Filipino companies are also beginning to thrive in the European market. IMI, for example, has expanded its micro-electronics business to become the 14th largest manufacturing solutions provider in Europe. Or consider the Philippine port-handling giant, ICTSI. It operates a container terminal in the Adriatic Sea, and recently signed another 30-year lease to operate a port in the Baltic. It is worth mentioning, as well, that there are around 50,000 Filipino sailors manning ships with European flags. You make trade happen. And you never boast about any of this. So allow me to begin by thanking all the Filipinos who are contributing every day to the friendship and economic partnership between Europe and the Philippines. These examples show that the ties between our countries are already strong. But the time has come to lift our partnership to the next level. Because we have much more in common than our geographic distance would suggest. I see three main fields where we share interests and values, and we are just made to work together. First of all, international security. Both the Philippines and Europe believe in a global order that is based on the principles of the UN Charter, such as the respect for every nation's sovereignty and territorial integrity. And this order is now threatened, in both our regions. Second, economic transformation. We are both modernising our economies, with a focus on the green and digital transitions. And in parallel, we are de-risking our trade and investment. Europe and the Philippines are natural economic partners more than ever before. And third, on democratic values. Because economic progress can only be coupled with social progress, for all people in our societies. Let me begin with security. The Philippines have helped build the rules-based global order, as a founding member of the United Nations, ASEAN, and the World Trade Organisation. And last year, you stood up to uphold the global order, when Russia sent its tanks into Ukraine. Both the European Union and the Philippines – along with over 140 countries – have clearly condemned Russia's war of aggression against a sovereign, independent member of the United Nations. And we Europeans will continue to support Ukraine and to uphold the UN Charter for as long as it takes. But another permanent member of the UN Security Council – China – has yet to assume fully its responsibility under the UN Charter to uphold the sovereignty and territorial integrity of Ukraine. This is happening against the backdrop of China's more assertive stance in your region. Europe has constantly called on China to respect the sovereign rights of states within their exclusive economic zones. China's show of military force in the South and East China Seas and in the Taiwan Strait directly affects the Philippines and our other partners in the region. But it could also have global repercussions. And any weakening of regional stability in Asia, the fastest-growing region in the world, affects global security, the free flow of trade, and our own interests in the region. So whether we talk about Ukraine or about the South China Sea, our security is connected. That is why the EU has been enhancing its engagement in the Indo-Pacific. We aim to promote a free and open Indo-Pacific, to reinforce respect of international law and address global challenges. With the Philippines, we are deepening our security partnership, particularly on maritime security and on cyber cooperation. And we want to do more.  Ladies and Gentlemen, We cannot choose our neighbours, but we can choose who we do business with, and on what terms. This leads me to my second point. We, Europeans, are clear-eyed when it comes to diversifying and de-risking our trade and investment. We made the mistake with Russia, thinking that we could manage our geopolitical differences through business. Before the full-scale invasion of Ukraine, Europe relied heavily on energy imports from Russia. When the Kremlin started the war, Russia tried to blackmail us with cutting its gas supplies. 80% in eight months. This triggered a severe energy crisis, but we withstood. We saved energy, we diversified to like-minded partners, and we invested massively in home-grown renewable energy. Today, we are stronger than before and more independent. And we have learnt our lesson. We will not make the same mistake again. When it comes to the key inputs needed for our competitiveness, such as critical raw materials, we should never rely on one single supplier. This is the core of our de-risking strategy. And I know that this is not only Europe's strategy. The Philippines, for instance, exports 90% of its nickel ore to China, instead of processing it inside the country to create more jobs and added value. But this can change. That is also why I am here in Manila today. The Philippines and the EU have a major opportunity to step up our partnership on both trade and investments. Let me focus on investments, first. Europe has just launched a plan for boosting infrastructure investments in strategic sectors in partner countries. It is called Global Gateway, and for ASEAN, we have put forward an investment package worth EUR 10 billion in public funds until 2027. But it is not only about the money. It is also about the method. European investments come with the highest environmental and labour standards, as well as with a strong focus on creating local value chains. Take the raw materials examples. Unlike other foreign investors, we do not want to invest only in the extraction of raw materials. We can also support you in building local capacity for processing, powered by new clean energy infrastructure. Global Gateway seeks to create good jobs right here because this also strengthens our supply lines. Global Gateway seeks to promote investments that move Filipino sectors up the value-chain. And we look forward to working with the Asia Development Bank, based right here in Manila.  You are experts in the region, and we share similar priorities.  So it is only natural that we work hand-in-hand. Moreover, the Philippines are a natural leader in digital innovation. The Philippine Venture Capital Report of 2023 observed an explosion of new activity in the country's start-up ecosystem. Your e-commerce market value increased by 33% in the last three years alone. The people of the Philippines are five years younger than the global average. So it is no surprise that your economy is so dynamic. The Philippines can become a new digital hub in the region. But as entrepreneurs everywhere, Filipino entrepreneurs need infrastructure investment. This is where Global Gateway can truly make a difference. And we are already working on the ground, or rather, in space. Together with the Philippines Space Agency, we are building the first earth observation system in Southeast Asia. In parallel, Nokia is investing in 5G infrastructure. Why does this matter to Filipino innovators? Because the European Copernicus satellites will be made available for space-based services here in the Philippines, like disaster risk management against typhoons, or satellite navigation, which is fundamental for aviation, drones, and autonomous driving. This is part of a larger digital economy package that we are finalising with the government. We are even exploring a possible extension of the new fibre submarine cable that will connect Europe to Japan via the Arctic. We would create a direct data connection between our regions to de-risk and open up new opportunities for both our economies. New investments could also lead the way for more trade between Europe and the Philippines. The EU is your fourth largest trading partner, accounting for nearly 8% of your trade. This is thanks to our current trade preferences scheme. But there is much untapped potential in our trade relationship. Let me give you an example: A few months ago, I was in South Korea. There I saw the impressive positive impact of the trade deal we have concluded. In a little over a decade, EU trade with Korea has more than doubled. This is what happens when you give people and business the opportunity to work across borders. New doors open for innovation. And the most important: People benefit. So let us make progress. Our trade agreements with Singapore and Vietnam are already delivering. And Europe wants to conclude free trade agreements with other ASEAN countries. I believe, like President Marcos, that the timing and conditions are right for us to solidify our bilateral trade relations. That is why we have taken the decision to relaunch our negotiations for a free trade agreement between the Philippines and the EU. Our teams will begin right away a scoping process to identify what we need to do to overcome any remaining gaps before we can get back to negotiating. This should take no more than a few months. Let us seize this window of opportunity, and make it work. Trade agreements today are about much more than eliminating tariffs and quotas. They are about shared commitments, values, and principles, including on human and labour rights. And this leads me to my last point. Our democracies – all of them – are work in progress. None of them is perfect. But they are all perfectible. Your new government has taken some important steps for human rights here in the Philippines. Each one of our democracies is different. But we all share the same universal values, and the same direction of travel. The path towards better democracies is one that we can and should walk together. Ladies and Gentlemen, The Philippines and the European Union may stand at the opposite sides of the world, but our destinies are linked more than ever before. We see it with geopolitics and climate change. We see it in the connection of our value chains. We have a similar outlook on the Indo-Pacific. And we have strong economic ties. Europe wants to be a trusted partner to the Philippines as it grows into its economic potential. We want to be partners who stand eye to eye. Partners who put people and their values first. Having met so many wonderful people here in the Philippines, who are proud of their country, hardworking, and humble, I am excited for what we can achieve together. I know you are proud of your Bayanihan spirit. And I really hope that we can build the same spirit of community between us, in Europe and the Philippines. Salamat, thank you very much and have a wonderful evening.

Defense & Security
Flags of NATO SWeden and Türkiye, pointing that Sweden is waiting for Türkiye's approval

Sweden is joining Nato: what that means for the alliance and the war in Ukraine

by Simon Smith , Jordan Becker

In a surprise move, Turkey has ended its veto on Sweden joining Nato, thereby removing all the barriers to its membership of the military alliance. Hungary quickly followed suit and, as a result of the two countries’ support, a consensus was able to be reached at the 2023 Nato summit in Vilnius, Lithuania. Turkish president Recep Tayyip Erdoğan agreeing to support Sweden’s bid to join will be touted as one of the key achievements of the summit. Sweden submitted its formal application for membership in May 2022 alongside Finland, which was admitted into the alliance in April 2023. Sweden, though not a formal member, has had a very close relationship with Nato for almost 30 years, since joining the alliance’s Partnership for Peace programme in 1994. It has contributed to Nato missions. And as a member of the European Union and contributor to the bloc’s common security and defence policy, it has also worked closely with the vast majority of European Nato allies. In pursuing Nato membership, both Sweden and Finland have dramatically shifted their traditional policy of military non-alignment. A critical driver of this move was, clearly, Russia’s invasion of Ukraine in February 2022. It is also more evidence that Russian president Vladimir Putin has failed to achieve two of his own strategic objectives: weakening solidarity in the alliance and preventing further Nato enlargement towards Russia’s borders. Finland and Sweden’s accession is of significant operational importance to how Nato defends allied territory against Russian aggression. Integrating these two nations on its north flank (the Atlantic and European Arctic) will help to solidify plans for defending its Ukraine-adjacent centre (from the Baltic Sea to the Alps). This will ensure that Russia has to contend with powerful and interoperable military forces across its entire western border. Why Turkey lifted its vetoFor a few years now, Turkey’s relationship with Nato has been nuanced and strained. Turkey’s objections to Sweden’s accession were ostensibly connected to its concerns over Sweden’s policy towards the Kurdistan Workers’ Party, or PKK. Turkey has accused Sweden of hosting Kurdish militants. Nato has acknowledged this as a legitimate security concern and Sweden has made concessions as part of its journey towards Nato. The main material driver of the agreement, however, may always have been a carrot being dangled by the US. American president Joe Biden now appears to be moving forward with plans to transfer F-16 fighter jets to Turkey – a deal that appears to have been unlocked by Erdoğan’s changed stance on Sweden. But it is often the case that a host of surrounding deals and suggestions of deals can help facilitate movement at Nato. Everyone, including Turkey, now seems able to sell the developments as a win to their constituents back home. The ‘Nordic round’Sweden’s accession means all Nordic nations are now part of Nato. As well as being significant in operational and military terms, this enlargement has major political, strategic and defence planning implications. Although Finland and Sweden have been “virtual allies” for years, their formal accession means some changes in practice. Strategically, the two are now free to work seamlessly with the rest of the Nato allies to plan for collective defence. Integrating strategic plans is extremely valuable, particularly considering Finland’s massive border with Russia and Sweden’s possession of critical terrain like the Baltic Sea island of Gotland. This will increase strategic interoperability and coordination. Nato allies also open their defence planning books to one another in unprecedented ways. Finland and Sweden will now undergo bilateral (with Nato’s international secretariat) and multilateral (with all allies) examinations as part of the Nato defence planning process. They will also contribute to the strategic decisions that undergird that process. Their defence investments will also be scrutinised (and they will scrutinise the spending of other allies). Initial analysis suggests that while Finland and Sweden have lagged behind their Nordic neighbours’ increases in defence investment since 2014. Finland’s investment in defence leapt significantly leading up to and following its accession to Nato. While we may not know for months if the same is true of Sweden, we may expect similar increases on its part. Alliance norms and peer pressure are powerful. The expansion of Nato to include Sweden is a major step for all these reasons. But while anyone watching the Vilnius summit will naturally now be asking whether the shift changes the situation for Ukraine’s membership aspirations, an answer is unlikely to be on the near horizon. Any final decision on Ukraine being offered a membership action plan for the time being is a bridge too far, especially in the current context of an ongoing war with an outcome that, as yet, is unpredictable.

Defense & Security
High detailed political map of Europe

Inside out: Europe’s accidental empire builders

by Dr. Roderick Parkes

In the late 19th century, geopolitical thought developed in two steps. First, individual European empires, anxious about their hold over the Eurasian and African land mass, began to codify competitive geostrategies based on their past struggles with one another. Second, the United States (US) took up the most relevant strand of this thinking, from the United Kingdom (UK), and reimagined itself as a global sea power, capable of spreading liberal maritime values such as free exchange worldwide.  These two generations of geopolitics have come home again, brought back to Europe by a well-meaning Joe Biden, the US President. When Biden chose Germany as his key geopolitical partner on the other side of the Atlantic, Europe inexorably began reconfiguring itself according to these two theories. Biden’s choice of Berlin as partner turned Central Europe into a captive fringe for Germany, which in turn spurred a liberal European seaboard to take shape, from the Baltics to Italy.  Biden’s fateful choiceAt the start of his presidency, Biden identified Germany as his key partner in a coming geoeconomic grudge-match with the People’s Republic of China (PRC). With his decision to lift Nord Stream II sanctions Biden was rewarding Europe’s biggest economy and most stable democracy. He was also signalling that Germany must finally take geopolitical responsibility after 30 years of free-riding.  Biden’s choice, logical and well-meaning, has triggered a chain reaction in Europe. Geopolitik is taboo in Germany. So how to respond when the guardian of the open international order pressures you to become geopolitical? The answer is by constitutional means – bind Germany into a federal European state by lifting the right of European Union (EU) governments to veto joint foreign policies. For officials in Berlin, this is the obvious way to harness German power in Europe – so obvious that it does not cross minds that others see things differently. Poles see things differently. They believe federalisation, far from harnessing German power, would cement German dominance of Europe. They do not fear a geopolitical Germany, just so long as it is their kind of geopolitical: they want a Germany that stands up to Russia. But until there is proof that Germany is ready to do so, why commit to federalisation?  The German Government responds by claiming its agenda to federalise EU decision-making is all about standing up to Russia – Olaf Scholz, the German Chancellor, wants assertively to enlarge the EU eastwards, and to do so he must first streamline policy making so that the EU still functions when the Moldovans or Montenegrins are sitting around the table. But the Poles say enlarge the EU first, before reforming it.  Poland wants a ‘geopolitical eastern enlargement’ not a process-driven one: the Polish Government wants to expand the EU quickly into the old ‘crunch zone’ between Russia and Western Europe to protect and reward the Ukrainians’ defence of European values. And it wants to do this before federalisation, to hedge against Berlin gaining power over common European decisions and putting EU enlargement on ice in deference to Moscow.  France, meanwhile, hears these conversations and fears that Germany is losing its recent Westbindung – that it is tilting back towards its historical centre of gravity in the East. This would mark the end of the EU as a Mediterranean project. Panicked by this prospect, the French propose a Europe of ‘concentric circles’. This is the notion of Emmanuel Macron, President of France, that an EU of 36 will have to be led by a sub-group of states. The original six western EU states would be at the political and economic core by dint of the fact that easterners like Poland are still not part of influential clubs like the eurozone.  Europeans unthinkingly establish a German empireThese countries are re-enacting historical fears. Geopolitical thinking is hard-wired into European strategic culture, and Germany, Poland and France fall easily into the tropes of late imperial anxiety. Poland fears again being in a crunch zone between Russian and German condominiums. France fears the loss of its old African sphere of influence. And Germany is afraid of others seeing Europe as its empire.  The tragedy of European geopolitics, moreover, is that it is built on historical fears that become self-fulfilling. Combined, these three ideas – ‘European federalisation’, ‘concentric circles’ and ‘geopolitical enlargement’ – formalise unfair political hierarchies in Europe and cement what all fear most – German dominance.  By federalising the EU, Berlin is unwittingly cementing its own position at the top of the European pecking order. It is constitutionalising Europe along very German lines.  The French are aware that Germany is cementing these power hierarchies, but they cling to the belief that they can benefit – that Paris and the original EU states will join Berlin in the inner circle of European affairs. But the French-German relationship has shattered, and Germany now sits alone in the inner circle. So when the French promote the notion of ‘concentric circles’ they legitimise only their own downgrade.  Tellingly, other founding EU members – Belgium, Luxembourg and Italy – are embracing life in the second tier. During the pandemic, when hit by German border closures, Italy teamed up with neighbouring Bavaria, Luxembourg with Rhineland Palatinate, Belgium with North Rhine Westphalia. These EU members now routinely behave as if they were themselves German Laender and the German federal order were Europe’s. As for Warsaw’s notion of ‘geopolitical enlargement’, it in effect relegates Poland and its closest partners to a third or fourth tier. Poland argues that reform of voting procedures should be delayed until after Ukraine and the nine other potential members have joined the EU – implying that new members will renounce their voting rights whilst the EU reforms. In so doing Poland is legitimising precisely what it has complained of for years – the way new states are treated as mute ‘policy-takers’ by Germany long after they join.  Poland’s idea of ‘geopolitical enlargement’ also risks relegating non-EU members like Britain and Norway to the political fringes even as they try to partner with the EU in Ukraine and Eastern Europe: Poland is trying to motivate Germany to enlarge the EU eastwards with the narrative about the need to compete with ‘third powers’ and contain their influence. But, unwittingly, this lumps Britain and Norway in with the PRC and Russia, making them interlopers in their own backyard.  Germany as change-brakerA Berlin-centric European order need not be oppressive for countries in its outer tiers, so long as Germany is responsive and shows moderation. But Scholz does not easily budge. His Germany is mired in angst about its manufacturing prowess, and has little room for others’ concerns. Berlin, faced with demands across Europe for German action and cash, is experiencing a kind of imperial fatigue. Officials not only speak of EU enlargement as a kind of overstretch. They describe the big dossiers in pessimistic, Malthusian terms – digital connectivity in terms of ‘shrinking space’, migration in terms of ‘global overpopulation’, climate transition as a ‘scramble for rare resources’.  This pessimistic Germany too often uses its centrality to protect and enforce the unsustainable European status quo. Instead of radically overhauling Europe’s energy infrastructure during the recent gas crisis, for instance, Berlin announced that it expected southern EU states to give Germany their gas stocks. The bottom line: give us your gas or we will give you our economic recession.  Germany, remember, did not undergo the usual pattern of de-industrialisation over the last 30 years. Instead, it kept its manufacturing sector afloat by squeezing value from Europe’s political and economic infrastructure. This is still the easiest option even if that infrastructure today has little to give. Its neighbours, however, are not yet ready to accept their fate as Germany’s captive fringe. Their fear that Scholz’s Berlin may be adopting a Germany First approach is triggering a remarkable reshuffling of alliances in Europe, as reformist states try to coalesce against Berlin. The Netherlands and France, historically at odds over economic policy, are teaming up. Even more surprisingly France and Poland, so angered by the German stance on nuclear power, are aligning on a cautious selection of strategic matters.  This possible shift of power away from Germany has somehow been missed. True, there has been a lot of talk about a shift of power eastwards in the EU, towards Central Europe, but most commentators agree that this will amount to little given Poland’s divisive domestic politics. Far more interesting and vital is the shift of power westwards, as Germany tries to rewire its critical infrastructure so that energy, investment capital and ideas flow into its ailing economy from the west, not east.  Simple geography makes seaboard states like the Netherlands or Italy access points for resources heading to Germany from the Americas and Africa.  Europe’s liberal seaboardEurope’s seaboard states are alive to the opportunities this shift creates. Italy has revived plans from the 1950s to become an energy hub between Africa and Europe. The British with their long coastline can act as a supplier of wind energy and a dock for liquid natural gas to Europe. The Dutch, having established their ports as a main disembarkation point for US troops and arms, can influence infrastructure decisions across the continent. Coastal states that until recently were split north-south are teaming up under a shared appreciation of their dynamic outward-looking approach. Italy has reportedly invited the Netherlands to ‘push’ it into deregulating its economy on a mutual job creation drive. The Netherlands has encouraged Italy’s highly-educated population to move northwards. Spain has hinted that Dutch farmers might relocate southwards. France and the UK are making available their finance hubs. The Baltics their technology.  These coastal states are, moreover, trying to offer a pontoon to Central and Eastern Europe, connecting it to the Atlantic seaboard. Britain, for instance, has already reached out to Nordic and Baltic states through the UK-led Joint Expeditionary Force, and there are discussions about bringing it to Poland and Ukraine. Germany, previously the superconnector at the heart of Europe, is allowing itself to be bypassed.A new sandbox for the sea powersImportantly, countries like Denmark or the Netherlands never viewed the EU in terms of state-building, as in Berlin, where each European crisis is an opportunity for deepening integration and ratcheting the EU forward towards federalisation. They treat it as a kind of sandbox or plug-in: the EU is a means of reinventing order in Europe, responding to big geopolitical shifts with a handy toolbox of markets and inventive governance.   Today the big geopolitical task is to protect states threatened by the rise of the PRC, and ensure mutual access to critical resources and investment capital. Many of those threatened are seaboard states in the Indo-Pacific. The EU has its role to play, and if it were true to this sandbox spirit, it would today be sacrificing sacred cows from the 1990s and raiding old EU projects like the Eurozone to combine cheap and reliable energy, foundational technology, pockets of investment capital and access to the best minds.  But if a German-led EU is not prepared to revive this inventive spirit and pick and mix across old projects – mixing the Capital Markets Union with Green industry and so on – these seaboard countries will use their own shared attributes to turn Europe inside-out.

Diplomacy
Federal President Frank-Walter Steinmeier

Federal President Frank-Walter Steinmeier during an informational and contact-building visit with the Diplomatic Corps on 27. June 2023 in Essen

by Frank-Walter Steinmeier

I am delighted to be back in the Land in which I was born and grew up, North Rhine-Westphalia. And I am even happier that so many of you have accompanied me here from Berlin and Bonn. I don’t exactly know whether this is a new record, but 170 participants in our joint trip to explore one of the federal states together is really quite a lot. Minister President, thank you very much indeed for the hospitality extended to us here in this, to my mind, wonderful place, the Zollverein Coal Mine Industrial Complex. North Rhine-Westphalia, as you have just heard, is indeed the most populous Land in Germany. And over the past few years and decades, or I could say over the last century and a half, it has become a real melting pot for people from a wide range of nations. Many people from a very large number of regions of the world have come together here –  thanks in the main to that part of North Rhine-Westphalia which is the focus of our trip today. For a long time, the Ruhr District was the beating heart of heavy industry, a region forged by coal and steel. Four and a half years ago, in December 2018, I was there when the last coal mine here in the Ruhr District was closed. That was one of the hardest speeches I have ever had to make in any of the positions I’ve held – to stand in front of crying miners and say to them: this piece of coal in my hands is the last piece of coal mined in Germany. It was – and everyone knew it was – the end of an era in Germany and especially here in the Ruhr District. It was not just the end of a chapter of industrial history. The hard work, and especially the work below ground, profoundly shaped the people in this region for years and decades. For these people, the crucial thing is being able to rely on each other, and that a word, once given, is kept. If you have another chance sometime to look around here, you will notice that the people who live here are vigorous, sober and pragmatic. They don’t ask where you come from or mind how smartly you can talk; what they care about is that you roll up your sleeves, do your work, and especially that you try to behave decently to others.  So you can imagine that the decline of the coal and steel industry meant a massive upheaval for the Ruhr District and its people, for the economy, but also for social structures here. But precisely in this region, a region which has seen many endings and ruptures, many new things are emerging, many new ideas are being implemented. The major transformation of an old industrial landscape that from here is almost invisible amongst all the greenery, the major transformation of an industrial landscape to a centre of science and research, a hub – if I may put it like that – for technologies of the future is well under way. This morning, at Siemens Energy in Mülheim, we were able to see for ourselves what kind of cutting-edge energy transition technologies, some of them AI-driven, are now being developed and used here in the region.   The venue for our luncheon, the former Zollverein coal mine and coking plant, is a particularly good illustration of the pride the people here in the Ruhr District take in their past, and of the devotion with which they are preserving the relics of this history and at the same time again and again turning them into something new. Once one of the most modern plants of its kind in Europe, Zollverein is today a museum, memorial and centre for culture, design, events and new technologies. A World Cultural Heritage site that not only preserves the past but also looks firmly to the future and builds that future.  As economically successful as the coal and steel era was, today we know that it was just as harmful and in many cases entirely destructive for nature and the environment. For instance, the Emscher, originally a small, gentle river, was for many decades used as an open sewer. It was a cesspool, ecologically dead, into which waste, including toxic waste, was discharged. Now, following a tremendous effort, it has been renaturalised. Later today we will be able to see and admire the result. In one of Europe’s biggest infrastructure projects, an entire river has been cleaned up, so that it is now free of wastewater, and once again home to plants and animals. But perhaps the real miracle is that this – it’s safe to say – gigantic project was completed in thirty years, and on schedule no less.  One more thing: the Ruhr District would not be what it is without football. There is little the people here care about at weekends more than this: did my team win or lose? And passions run especially high when the match is against one of the other teams from the region. Even if a club from the south of Germany has won the national championship for years now, the heart of German football beats – at least so people here say – in the Ruhr District, with its many traditional clubs and their fans, unshakeably loyal through all the ups and downs. That is why the German Football Museum was not established any old where in Germany, but here in the “Revier”, as we call the Ruhr mining area. And that is why this trip would not be complete without a joint visit to the museum in Dortmund later on.  Another very serious matter has profoundly affected the people of this region, and not only the older generation. I am talking about war. On the one hand, the Ruhr District was of course also a major centre of arms production in both World Wars unleashed by Germany. On the other, it, more than almost any other region in Germany, experienced fear, massive destruction and thousands of deaths during the intensive bombardments of the Second World War. The people here, including later generations, know exactly what war is.  And because they know, because “Never again” is deeply engraved in their hearts and minds, the Ruhr District is also a nucleus of European integration. The European Coal and Steel Community, which was intended to transform the former heavy industries of the war machine into civilian, peace-keeping industries, gradually evolved into ever greater political, economic and social cooperation, and finally into the major work of peace and freedom that is today’s European Union.   The history of this region in particular, therefore, preserves the precious knowledge that cooperation between peoples and nations is a thousand times better than war and confrontation. That growth and prosperity evolve not from enmity, but from cooperation based on common rules and principles.   That is why we Germans are pleased and proud to be celebrating 50 years of United Nations membership this year. The principles of international law that the then two German states recognised on their accession apply to all who belong to the United Nations. Only compliance with international law, recognition of the Charter of the United Nations and real and actual action in keeping with the principles of this Charter guarantee peace, freedom and prosperity for the nations. On the basis of these principles, we extend the hand of cooperation to all states represented here.  There is of course a reason why I am saying this: The Russian attack on Ukraine is a break with everything for which the United Nations stands, for which Europe and Germany stand. The inviolability of borders, of a country´s sovereignty and self-determination, of human dignity and peace – all this, as we are seeing day in, day out, means nothing to Putin. Today I would like to thank all those who are condemning and have condemned Russia’s aggression at international level. We must not tolerate the attack against a sovereign neighbouring state, the violation of borders, land grabs, the displacement of millions of people. The international community must not accept all this. And we urgently need this international community, and the common rules this international community sets itself – not only now, but for all the new challenges of this century that are yet to come.  We have all seen that no country on its own can secure a humane future. We are all dependent on partnership and cooperation, particularly in our joint efforts in the fight against climate change. That is why we are endeavouring, that is why German and European policy is endeavouring, to intensify existing partnerships and establish new, just partnerships and alliances that will benefit all sides. Let me say this quite clearly: what we need is not deglobalisation. What we need, in my view, is even closer connectivity aimed at making the world a better place. Because we will only be able to overcome the global challenges if we work together.  I wish you and all of us a pleasant rest of the day with lots of enjoyable experiences, interesting insights and, hopefully, valuable encounters. This evening, right at the end of our trip, we will be experiencing another truly glorious part of North-Rhine Westphalia that will surprise you. What we will be seeing is referred to here as the Versailles of Westphalia. I can only say: look forward to it!

Defense & Security
An old globe with USSR map

EUROPEAN SECURITY, EURASIAN CROSSROADS?

by Zachary Paikin , Christos Katsioulis

Keeping rules-based cooperation afloat on a war-torn continent  SUMMARYThe NATO summit in Vilnius taking place from 11 to 12 July 2023 marks another step towards deepening the relationship between Ukraine and the collective West. When paired with the EU’s reinvigorated enlargement process, there is a growing tendency to assume that Washington and Brussels can – or even must – set the terms of the European security order without input from Moscow. However, in a world of ‘mega-regions’ and competing visions of international order, cooperative security remains relevant if the EU wishes to salvage some degree of rules-based order in the space that connects Europe with Eurasia. As first steps in this direction, the EU should work to keep the OSCE operational, launch a limited dialogue with Belarus on arms control, and envision a future for the European Political Community that someday includes Russia. Two highly controversial issues are at the core of our assessment – the amendments to Article 66a concerning future electricity price crises and the resort to inframarginal revenue caps1. The significance of the imagery was unmistakable. In late March earlier this year, Chinese President Xi Jinping visited his counterpart Vladimir Putin in Moscow, at the same time as Japanese Prime Minister Fumio Kishida visited President Volodymyr Zelensky in Kyiv. Although lying at near-opposite ends of the Eurasian supercontinent, the leaders of Asia’s two largest economies visiting the belligerents of a European conflict served to illustrate just how integrated the security dynamics of the two theatres had become. Yet it was the Chinese leader, whose country had been the victim of Japanese imperialism in the twentieth century, who was showing off his strategic partnership with a country that had just a year earlier committed an act of unprovoked aggression against its neighbour, while Japan’s head of government demonstrated solidarity with the victim. That Beijing has doubled down on its entente with Moscow, despite the latter’s egregious violation of international law and norms, all in the name of anti-hegemonism, reveals the complex and shifting patterns of international order in today’s world. The increasing integration of the pan-Eurasian security space, when combined with a nuanced understanding of the contemporary (and mixed) foundations of the international order, reveals the extent to which Europe’s own security order will depend not only on the EU’s ability to demonstrate its own resilience, but also its ability to develop new tools and approaches that allow it to reach beyond its own normative orbit and into a more normatively diverse ‘Eurasian’ space. Contrary to the notion that Russia is ‘leaving’ Europe, only by conceiving of the European-Eurasian space from Lisbon to Vladivostok as a single, pan-European security system will the EU be able to manage the normative contestation and political diversity that characterise continental affairs. TWO MAJOR TRENDS The return of great power competition has come with tangible consequences on several policy fronts such as trade rules, supply chains, technological restrictions, access to critical minerals, and the future shape of globalisation more broadly. Its impact has also been felt domestically, with states both democratic and authoritarian attempting to shape the information space and contending with rising nationalist sentiment. But when one looks at the macro-level, two broad trends emerge – one geopolitical and one normative. GEOPOLITICS: THE RISE OF MEGA-REGIONSThe geopolitical trend – traditionally defined as lying at the intersection of power politics and geography – is the formation of ‘mega-regions’ in the Eastern Hemisphere – continental Eurasia and the maritime Indo-Pacific. While these spaces are too vast and diverse to constitute identifiable ‘regions’ in the usual sense of the term, their discursive appeal allows them to shape strategic debates irrespective of how integrated they are in economic or societal terms. Unlike the consolidation of the Western Hemisphere under a single hegemon, these mega-regions are polycentric, suggesting a complicated landscape to navigate. The IndoPacific theatre is characterised by a worsening Sino-American standoff, but also the persistence of varying degrees of non-alignment from important actors, such as India and ASEAN. The mega-region’s strategic importance to the EU flows not only from the sizeable proportion of trade that passes through the Indo-Pacific, but also the fact that EU Member States are facing the pressures of their growing security dependence on the United States, even as Washington’s focus has been clearly pivoting towards Asia for the last several years. The Eurasian theatre links Europe to Asia through growing trade links and connectivity, but also through strategic interactions, such as the Sino-Russian entente and Turkey’s links with Central Asia. Although China is already very much present in Europe in terms of technology, trade links and port ownership, questions surrounding a ceasefire and the reconstruction of Ukraine may also foretell a growing profile for Beijing in shaping Europe’s future security order. Although much will depend on the degree of US and EU acquiescence, China’s role may be limited to delineated financial contributions to the rebuilding of post-war Ukraine, or it may go so far as to include a direct role in keeping the guns silent. The latter, for example, could include a Chinese promise to exercise its influence over the Kremlin to forestall a reinvasion of Ukraine, in exchange for a Western commitment to dissuade Kyiv from retaking its lost territories militarily. Given Russia’s growing dependence on China, European security now appears indelibly imbued with Eurasian – and not just transatlantic or Euro-Atlantic – characteristics. On top of shared challenges and geographic phenomena, such as climate change and the opening up of Arctic maritime routes, political developments over the past several years have helped to weave the European and Asian strategic theatres increasingly into an interconnected security complex. Worsening relations between Russia and the West following the 2013-14 Euromaidan revolution accelerated Moscow’s already-declared ‘pivot to the East’, while its 2022 invasion of Ukraine has ensured that this pivot takes the form of growing dependence on China after Japan and South Korea imposed economic sanctions. China has therefore become an influential player in European security through its (theoretical) ability to influence strategic thinking in the Kremlin about the war’s endgame and contribute to Ukraine’s reconstruction once new security guarantees have been agreed. China’s growing maritime muscle also impacts EU interests not just on matters of trade but also in the realm of international law by calling into question the future shape of the global commons.An additional factor unifying the two theatres has been the European (and American) prioritisation of the Indo-Pacific, with the EU releasing its Indo-Pacific strategy five months prior to Russia’s invasion of Ukraine. This provided the political foundations for the EU to continue to place importance on enhancing its profile in the Indo-Pacific, even as war raged closer to home. And although many in Europe reject the binary ‘democracy vs. autocracy’ frame emphasised by the Biden administration, the proliferation of this rhetoric in Western decision-making circles since the war’s start has provided momentum for transatlantic allies to double down on their two-theatre focus.  NORMS: W(H)ITHER INTERNATIONAL ORDER?The normative trend concerns the increasing ability to distinguish between the different layers of international order that the EU inhabits. Debates on international order have often focused on the evolving distribution of power, with various analysts asserting that the world remains largely unipolar, is collapsing into bipolarity, or persists on its path towards multipolarity. But there remains the question of how to characterise terms such as the ‘liberal international order’ (LIO) or ‘rules-based international order’ (RBIO) within which this polarity operates.  Russia’s incursions into Ukraine in 2014 and Syria in 2015, followed by the rise of populism with the Brexit referendum and the election of Donald Trump in 2016, called the future of the LIO into question. This raised more fundamental questions over its actual breadth and reach – whether it was largely consigned to the West or truly global in scope, whether its focus was primarily on upholding multilateralism or whether it also had values-based components, and so on.  Given the nature of these events, it became evident that Western ‘leadership’ in setting the terms of the international order was a core component of the LIO as a concept. Russian actions in 2014-15 frontally challenged the notion that Washington and Brussels could unilaterally shape the norms of European security and ended the West’s post-Cold War monopoly on military interventions in the wider Middle East. Similarly, populism’s rise not only threatened the ideological hegemony of liberalism in Western societies, but also raised questions about whether the Anglo-American powers which have been preeminent for three centuries would remain invested in upholding an order they played a major role in creating. A definition of the LIO that incorporates all elements – proliferating institutions, liberal values, open trade, Western leadership, and transformative ambitions on a global scale – would reveal that the attempt to create a global LIO began in the early 1990s and had effectively failed by the time of the financial crisis and subsequent Great Recession of 2007-09. Given the American origins of that recession, the accepted legitimacy of the economic component of Western leadership became contested, eventually paving the way for the erosion of post-Cold War ‘hyper-globalism’. Western political leadership became more strongly contested after the 2011 NATO intervention in Libya, which some saw as exceeding its UN Security Council-issued mandate strictly to protect civilians, presaging Putin’s subsequent return to the Russian presidency in 2012.  Having failed to become synonymous with global order writ large, the LIO today appears largely constrained to the non-geographic West, today emphasising the defence of democracy rather than its spread. The present-day ‘democracy vs. autocracy’ binary expects that the former model will demonstrate its longevity and eventually win uncontested appeal among the rest of the world, which differs from active attempts to export it.  Despite its neutral-sounding description as the universally accepted global order based on the UN system, multilateral institutions and international law, the RBIO can also be difficult to pin down as a concept. In some conceptions, it has existed since 1945 and has relied upon Western leadership to sustain itself, whereas in others it remains something that still needs to be created in newly conceived and discursively contested strategic spaces such the ‘Indo-Pacific’.  For this reason, the RBIO has also been criticised in some corners for being deliberately opaque and labelled as a mere smokescreen for Western hegemony. At a minimum, one can acknowledge the existence of an RBIO based on a global commitment to the peaceful conduct of relations and resolution of disputes, respect for universally agreed canons of international law – including the basic tenets of the UN Charter – or mutually agreedupon processes. Ultimately, what the distinction between the LIO and RBIO reveals is that, in today’s world, order is plural: one should not speak of the international order as much as the existence of differentiated international orders. If one were to draw distinctions between orders across different policy areas, for example, one would see that both the United States and China support certain aspects of the contemporary global order while rejecting others. Neither is entirely a status quo power, but nor does either power hold a purely revisionist agenda.  The EU, for its part, has benefited enormously from a status quo in which a largely unipolar world, combined with a solid American security guarantee, negated the need to wrestle with the idea of fundamental change in the substance of international order. Although it must now debate the extent to which it can (or even should) embrace the ‘language of power’, this helps to explain why the EU – contrary to other leading actors – continues to defend both the LIO and RBIO. This European posture flows not only from the nature of the EU’s internal system and the commitments underpinning EU treaties, but also from the evolving shape of great power competition.  THE INTERSECTION OF NORMS AND GEOPOLITICS – AND ITS IMPLICATIONS FOR EUROPE In the normative realm, we are witnessing a fragmentation of order or, put differently, a ‘de-universalisation’ of norms. Rather than a single overarching global order to which all states pay fealty, an integrated global economy and global institutions provide merely a framework in which states litigate the shape of the international order and contest one another’s (possibly conflicting) normative visions.  By contrast, in the geopolitical realm, we observe the opposite phenomenon. While regional theatres have undoubtedly grown in importance, offering smaller actors a chance to shape international order alongside the great powers, these theatres are increasingly integrating themselves into a common system where actors from different regions figure into one another’s security perceptions. This dual process of simultaneous integration and disintegration raises the question of how to conceptualise the linkages between these megaregions and various orders.  Given the likely involvement of China (and perhaps India) in brokering a ceasefire and contributing to the reconstruction of Ukraine, alongside Japan’s cooperation on Ukraine with its Western partners through the G7, strategic calculations among the powers of the Indo-Pacific mega-region are having an impact on events in Europe. But in terms of hard security dynamics, the most direct linkage (or lack thereof) affecting the future of the European order lies in the nature of the relationship between the European and Eurasian spaces. Since Putin’s return to the Kremlin and his casting of Russia as a decidedly non-Western and non-liberal country, it has become common to assert that Russia was ‘leaving’ Europe. Given that the political and economic order on the European continent since the Treaty of Maastricht has been based on the centrality of the EU system, with other states pursuing greater or lesser degrees of alignment with EU norms and standards, to challenge those norms openly and blatantly was seemingly to deny one’s Europeanness. Russia’s subsequent ‘Greater Eurasia’ discourse further highlighted the notion that Moscow no longer sought to re-join Europe, as was its initial ambition after the end of the Cold War, but rather to create a new geopolitical space. This Eurasian space was either to be Russian-led, centred on the post-Soviet region and embodied by organisations such as the Eurasian Economic Union (EAEU) and the Collective Security Treaty Organisation (CSTO), or would take the form of a broader yet unspecified polycentric pan-Eurasian system from Lisbon to Shanghai with Russia serving as the EastWest bridge at its core. Efforts to bridge the Russian and Brussels-centric visions for continental order through some kind of interstitial linkages between the EU and EAEU floundered, both due to the customs union component of the EAEU and the EU’s effective insistence that Ukraine faced a binary choice between East and West.  But whether one defines Europe in the expansive sense from Lisbon to Vladivostok or not, the collapse of Russia-West relations does not presage the end of the need to conceive of the European and Eurasian regions as a single space. For one, there remain post-Soviet states that desire to build relations with the EU and do not wish to be entirely consigned to the Eurasian Heartland.  Moreover, the ‘pan-Turkic’ element of Turkey’s foreign policy has grown increasingly salient over recent years, offering the prospect of deeper strategic relations between NATO-member Turkey and CSTO-member Kazakhstan. Even when it comes to two adversarial military alliances, bridges are not entirely absent. Turkey and Serbia, in addition to the states of the South Caucasus, stand out as wanting to maintain relations with both Russia and the West.  Yet while the European and Eurasian security spaces are geographically adjacent, forging a conception of a single space between them is rendered more difficult when one considers the LIO-RBIO reference frame. Viewed through this lens, the EU and Russia come across as polar opposites, even in relative terms.  The United States remains, at least for now, committed to a revised version of an LIO centred on the promotion of liberal norms, the preservation of US primacy in the global order, and the maintenance of US leadership within the Western alliance structure. However, when it comes to the RBIO, Washington’s numerous post-Cold War transgressions of international rules and its selective application of normative discourses suggests that an attitude of ‘rules for thee but not for me’ continues to operate to some degree even under Democratic administrations.  China, for its part, is to a degree the mirror image of the US: Beijing rejects the hegemonism and liberal values that underpin the LIO but remains invested in multilateralism and open markets, even if its adherence to the rules has also been selective, such as in its efforts to create ‘facts on the ground’ in the South China Sea.  When it comes to the EU and Russia, the division is even more stark. The EU remains the world’s leading power committed to both the LIO and the RBIO; Russia decidedly rejects the LIO and, since its 2022 invasion of Ukraine, has run roughshod over internationally agreed rules and norms as well.  THE EU AT THE CROSSROADS OF EUROPE AND EURASIA The EU is being tested by rising geopolitical tensions in its neighbourhood, which bring ever more assertive challenges against the RBIO. By design, Brussels comes with inbuilt disadvantages in this contest.  In foreign and security policy, the EU is a peculiar beast. Common action still depends on unanimity among Member States, which cautiously limits the EU’s room for manoeuvre. Support for the Ukrainian army is a textbook example of this phenomenon. We have observed common steps to supply Kyiv with weapons through the European Peace Facility. But we have also seen Member States from across the continent emphasise their own priorities – sometimes coordinated, sometimes rather uncoordinated – such as debates over the provenance of military procurement schemes.  As a result, the sum of the EU’s parts occasionally seems to be smaller than all of them combined. The EU decision-making patchwork can at times be accelerated by crises, but under normal circumstances it is a rather time-consuming procedure. And if the war in Ukraine becomes the new normal and the hottest phase of hostilities comes to resemble mere embers, the crisis-like atmosphere often needed for bold decision-making may eventually fade away.  Moreover, although the EU’s dual commitment to the LIO and RBIO forms a core element of both its internal functioning and its international engagement, in recent years there have been some cracks in this picture, most notably when it comes to the domestic political record of Member States such as Poland or Hungary. The apparent hypocrisy or double standard contributes to the erosion of the LIO’s global appeal, while challenging the EU’s ability to advance its particular interpretation of the RBIO.  The EU and its Member States find themselves today confronted with a geopolitical and normative challenge in their neighbourhood. Russia’s invasion of Ukraine has led to a rapid disintegration of the Organisation for Security and Cooperation in Europe (OSCE) space into different grades of contestation. This brash disregard for previously agreed rules and principles, when coupled with the erosion of several arms control agreements meant to enhance confidence and predictability in the wider Euro-Atlantic security space, has challenged the very notion that a European security architecture still exists.  The repercussions of the war have led to a strengthening of NATO and a diminished Russian ability to order parts of its ‘near abroad’, prompting other actors to step in, such as Turkey in the Caucasus or China in Central Asia. Trade in the Eurasian space – between the EU and China – has also become more cumbersome by taking the huge landmass of Russia out of the equation and forcing a recalibration of trade routes. Thus, for the EU, the dynamic of integrating geopolitical theatres in Eurasia and the IndoPacific has posed three questions.  First, does the EU have a toolbox for its immediate neighbourhood suitable for managing the geopolitical and normative conflicts inherent to today’s multipolar world? Enlargement and integration offers still rely on the logic of countries adhering to European rules, as they are supposedly driven by their own interest to gain access to this attractive bloc. Therefore, the logic goes, they are likely willing to undergo a tedious scrutiny process and give up substantial parts of the exercise of their sovereignty.  The EU’s enlargement agenda undoubtedly presents the most developed form of normative power projection and has recently garnered new momentum in Ukraine, Moldova and the Western Balkans. These latest developments, coupled with Ukraine’s de facto integration into the Western political and security community, demonstrate the extent to which Russia’s normative proposition has largely failed, even in its historical sphere of geopolitical and cultural influence.  Nonetheless, China’s likely growing influence in European affairs, Russia’s continued determination (and, for now, ability) to wage war, and the normative pluralism inherent to Eurasia’s penetration of the European space all raise questions over whether the EU’s enlargement agenda alone can fill the chasm left by the collapse of the European security order. It also remains too early to gauge the impact of the EU’s more ‘geopolitical’ (less strictly defined) recent moves, such as collective military assistance to Ukraine and its efforts to reduce its dependence on Russian energy, on its ability to shape the panEuropean security system in line with its preferences. Simply put, the strengthened role of the EU within Europe should not encourage Brussels and Member State capitals to sit on their laurels.  Second, what can the EU offer on a global scale to compete in a normatively pluralistic world and encourage other actors to align with EU goals? To the surprise of many in Europe, major non-Western powers, including many leading democracies, have chosen to stay on the sidelines of the war and are trying to hedge their bets. Those that have chosen to advance peace plans, such as the African ten-point plan and the Indonesian proposal, have tended to emphasise the need for de-escalation over justice. Given the increasing salience of these plans from various corners of the ‘Global South’ for the war in Ukraine, this question is important not only for the EU’s global standing but also for the future of the European security order. Universal norms – such as those of the UN Charter, later developed and enshrined in OSCE documents – are being increasingly challenged in the European-Eurasian security space. And while recent events may have given the EU’s norm-setting ability in Europe a boost, the extent to which it can fully see its vision through in the absence of global support remains uncertain. While much of the continent may become more tightly integrated, these developments threaten to render the core principles of the wider regional security order aspirational at best, not unlike the Universal Declaration of Human Rights. Third, how autonomously from the US can the EU act? The war has highlighted once again European security dependence on the US. That brings with it implicit, and sometimes explicit, expectations on the US side for a more assertive European stance towards China along the lines of US policy. The EU’s ability to deal with Eurasia and the Indo-Pacific differently, and thus handle the challenges of Russia and China separately as some Member States would prefer, now runs into a US-backed integration dynamic of the European, Eurasian and Indo-Pacific spaces. Thus, the Eurasian theatre seems to have become a key laboratory for the new order of competing concepts, overlapping integration spaces and unclear mechanisms of how to deal with the inevitable tensions between antagonistic claims.  THREE RECOMMENDATIONS  On the normative front, the task of constructing a stable order in a culturally and politically diverse world is unlikely to be achieved through a renewed commitment to the LIO, given its hegemonic and ideological foundations. And on a continental scale, while the LIO model may provide the political conditionally necessary to expand the EU’s sphere of influence, the lesson of the post-Cold War era is that this sphere will not be able to encompass Russia fully.  The EU’s approach today has rather become premised on confronting Russia’s normative model, in place of integrating Russia into some kind of common pan-European space. In fact, although there is no current strategy for how to deal with a post-Putin Russia, it is difficult to imagine the country finding a place in either NATO or the EU, even if it eventually pivots back towards the West and becomes relatively more open and democratic.  Geographically, in the Indo-Pacific, the structural constraint of the US-China relationship will significantly shape the EU’s room for manoeuvre for the foreseeable future. Yet the situation in the European-Eurasian theatre is potentially more volatile. Although the transatlantic alliance’s structure of US leadership has once again become apparent over the course of the war, much can change if a new US president comes to office. Moreover, a European continent featuring a reinforced NATO and an increasingly nationalist and revanchist Russia risks becoming a recipe for another conflict not long after the dust settles on the current phase of hostilities in Ukraine. Simply put, waiting – potentially for decades – for Russia to transform itself before embarking on the task of salvaging what remains of the RBIO connecting Europe and Eurasia is not an option. While relations will not be repaired overnight and the conditions do not presently exist to reaffirm (or reconstitute) the core principles underpinning the continental order, the EU can take three relatively immediate steps to prevent worst-case scenarios from materialising.  First, the OSCE, which brings together 57 participating countries, is in danger of entering 2024 without a chair or a budget. The EU would be poorly positioned to advocate credibly for a strengthened global RBIO if Europe itself becomes a rare continent without an inclusive and pan-regional functioning RBIO of its own.  The collapse of the OSCE would not only eliminate the last major regional institution bringing Russia and the rest of Europe together, but would also put Central Asian countries in a more difficult position, removing from them a forum in which they can navigate between the European and Eurasian spaces.  If Estonia’s chairmanship is unable to proceed, EU Member States should be prepared to rally behind a compromise candidate which boasts links to both Europe and Eurasia. Kazakhstan presents a natural choice, offering the EU a chance to build on its recently activated strategic partnership with Astana. In consultation with Ottawa and Washington, they should also agree to commit emergency funding to keep the body afloat if necessary and consider institutionalising money for the OSCE budget in the next Multi-Annual Financial Framework. Although Member States already contribute more than two-thirds of the organisation’s main budget, such a move would demonstrate the EU’s collective commitment to upholding a continental RBIO that spans beyond its own borders – a necessity given the now-unavoidable intersection between the European space and the pluralistic Eurasian mega-region. Russia’s initial post-Cold War dream of a pan-European security order centred on the OSCE has been dashed. Instead, the body’s activities have increasingly centred on its humanitarian ‘basket’, focusing in large part on post-Soviet states. As NATO and the EU expanded to include Central Europe, Moscow became increasingly convinced that the OSCE had become a second-tier institution for supposedly second-rate countries, giving it an incentive to impede its functioning rather than strengthen its capacities.  Still, it is precisely because of the pluralistic nature of the Eurasian mega-region and the EU’s own need to navigate it through the framework of rules that Brussels should remain invested in the OSCE’s survival, however imperfect the institution may become. Recent European Council conclusions have laudably articulated the EU’s continued commitment to the OSCE, but there has yet to be an explicit recognition that to survive as a body where states can manage crises and discuss security challenges on the continent, the organisation’s de facto focus may need to narrow, even if its more wide-ranging activities do not completely hollow themselves out.  In short, an OSCE that resembles the leaner Conference on Security and Cooperation in Europe (CSCE) of preceding decades is better than no OSCE at all. The OSCE’s more ambitious policy agenda is partly a product of the era of a Westernising Russia – an era which has decidedly passed. To remain resilient, international institutions must adjust to changing circumstances. And in any event, there remain ample other formats through which EU Member States can pursue their normative agenda.  Second, the pan-European arms control architecture is now in tatters following the American and Russian withdrawals from the Open Skies Treaty, the demise of the Intermediate-Range Nuclear Forces (INF) Treaty, Russia’s suspension of its participation in New START, and its formal withdrawal from the Conventional Armed Forces in Europe (CFE) Treaty. These regimes will not be resurrected overnight. However, in an attempt to demonstrate a remaining semblance of independence from the Kremlin, Belarus has remained active in the surviving regimes and will likely retain its membership in the CFE Treaty. The EU’s position on the political legitimacy of Alexander Lukashenko aside, Minsk’s continued participation in arms control, combined with the delivery of Russian tactical nuclear weapons to Belarus, creates a plausible case for certain European officials, beginning at the Member State level, to enter into a dialogue with Minsk as a matter of continental security – even if only quietly at first. This dialogue could serve as a basis for incubating ideas on the extent to which a future continental arms control architecture should be based on existing or new mechanisms. With time, Member States could designate individuals at the European External Action Service to take this process forward if it begins to show signs of progress, ensuring that the perspectives exchanged reflect the security interests of the EU27 as a whole.  Given the degree of closeness between Minsk and Moscow, the ideas discussed could eventually filter into the Russian elite as well, thereby preserving a backchannel through which momentum for renewed arms control can be built, as well as attenuating the lack of information and confirmation bias which currently exacerbate the Russia-West security dilemma. It is worth remembering that while Russia has withdrawn from several arms control regimes as its relations with the West have deteriorated, Moscow has not rejected the usefulness of arms control in principle. Belarus would relish the opportunity undertake such a dialogue and minimally restore the East-West bridge status that it held until the 2020 protests. Russia, for its part, would have little to fear, given the current extent of Belarusian dependence on the Kremlin and the fact that EU political recognition of Lukashenko would not necessarily be forthcoming.  Finally, while the purpose of the newly formed European Political Community (EPC) is ostensibly to build a platform for pan-European cooperation without Russia, at this point it remains unclear the extent to which such a rationale for its existence will continue to be manifest once the hottest phase of the war has passed. Once the structure and focus of the body have been further consolidated, however, EPC leaders should hold discussions on a possible timeline and conditions under which Russia could be admitted as a participant. This could occur at an EPC summit in a non-EU and non-NATO country such as Serbia or Switzerland in 2025 – timed to coincide with the fiftieth anniversary of the Helsinki Final Act. While consensus among all participating states may not be reached, the mere act of deliberating this topic could spawn certain ideas which may eventually prove worthwhile and/or achievable. CONCLUSIONS The moves outlined above will not succeed where all parties over the past three decades have failed – namely in creating a pan-European security order which Moscow has a stake in upholding rather than undermining. However, they offer to preserve or create platforms and avenues for policy cooperation or dialogue which can bolster the idea of a continental RBIO. They also offer the EU an opportunity to act autonomously in the pursuit of collective goals, to develop a wider-ranging toolbox for addressing security challenges in its neighbourhood, and to strengthen its image around the world as an actor committed to inclusive, rules-based security-building.  With all of Europe west of Russia (except for Belarus) now in some kind of integration process with the EU, it is certainly tempting to reinforce the Brussels-centric character of the continent’s normative order – as seen in discussions over how to strengthen the credibility of the enlargement agenda for Ukraine, Moldova and the Western Balkans, and how the nascent EPC might complement this process.  This, however, is but one side of the policy coin that EU leaders must consider. The West and Russia may not operate a shared security system in Europe, but this does not obviate the need to consider the integrated nature of security dynamics in the pan-European space. In a world of mega-regions, Europe will remain intertwined with Eurasia irrespective of the degree to which agreed-upon norms can be operationalised. The question is whether the connections between these two spaces will preserve a modicum of orderliness. At the global level, the LIO’s expansion has been halted and the RBIO is in transition, even as it demonstrates elements of flexibility and resilience. But at the juncture of Europe and Eurasia, both the LIO and RBIO’s futures are profoundly uncertain. In both the short and the long term, the EU cannot afford to ignore this challenge.