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More than a “before and after”, these elections represent a new chapter in the progressive integration of the far right into European politics. On the night of June 9th, the polls for the much-feared 2024 European elections closed. These were the elections of a change of cycle, the breakthrough of the far right, or the end of the grand coalition. In the end, it wasn’t as dramatic as expected, and the worst predictions of a possible right-wing majority did not come true. It is true that the earthquake some predicted did not occur, but for some time now, the tectonic plates of the EU have been moving in the same direction. The far right improved its results for the fifth consecutive time, which should not leave anyone indifferent. The grand coalition will not break, and the European institutions will not collapse due to the far-right tremor. However, for some time now, the European foundations have been shaking due to a far-right tectonic movement that could eventually bring the house down. The far right is growing, but it’s not taking over If we look at the results at the European level, beyond the respective victories in France and Italy, it seems that the far right is not growing as much as expected. The European Conservatives and Reformists (ECR) of Giorgia Meloni gain four seats but do not surpass the Renew Liberals, who lose 22 seats but remain the third-largest group with 80 MEPs. Identity and Democracy (ID), the group of Le Pen and Salvini, gains slightly more, nine seats, but with 58 seats, it remains the fifth-largest group in the chamber and sees its growth hampered by the departure of Alternative for Germany (AfD), which would have brought it a whopping 15 MEPs. These numbers may vary slightly, and if some deputies currently among the non-affiliated, like Viktor Orbán's Fidesz, are incorporated, the ECR could become the third-largest group ahead of the liberals. However, this would not significantly alter the majorities in the European Parliament, where the grand coalition between the conservatives, social democrats, and liberals will continue to govern the main EU policies. Nevertheless, the European People's Party (EPP) will have a bargaining tool with its partners: the possibility of blocking certain laws by making agreements with the far right. The combined seats of the conservatives and radical right-wing parties are not enough to form an alternative majority that, as Giorgia Meloni intends, would exclude the social democrats. However, the 184 MEPs from the EPP, together with the two far-right groups, could be sufficient to block legislation on key issues such as the green transition. Additionally, around thirty non-affiliated deputies also hold far-right positions (15 from AfD, 11 from Fidesz, and three from Alvise), further complicating the EU's green and social agenda. The radical right will not bring down the European structure for now, but its influence will increase in this new period. They do not yet have the strength to cause everything to collapse, but election after election, their ideas continue to permeate the European agenda. In the previous legislature, they already made their mark on key legislation such as the European Migration Pact, where despite voting against many motions, Jorge Buxadé managed to become the rapporteur for one of them related to the creation of a biometric database of irregular immigrants. This five-year term will likely start with a prominent commissioner chosen by the far-right, and with Giorgia Meloni seated on the European Council, they will have much more to say than in 2019. We shall see where it ends. More than a "before and after," these elections represent another chapter in the progressive normalization and integration of the far-right into European politics. Their ideas are here to stay, and although they do not yet have the capacity to lead majorities or elect presidents of the Parliament or the European Commission, they are managing to alter the frameworks of numerous debates, such as immigration and the green transition. This is the real danger, and this election reinforces that we continue to discuss these issues in the terms desired by Meloni, Orban, or Le Pen. Bipartisanship resists Another point that I believe needs to be highlighted about this election is that bipartisanship is holding up better than many expected. While it's true that the heyday of the two major political families adding up to over 400 members will never return, for the first time since 2004, the People's Party and the Socialists have not lost seats together, breaking a trend that seemed irreversible. The EPP gained nine seats, winning the elections in three of the five most populous states: Germany, Spain, and Poland. The Social Democrats obtained 137 seats, slightly below the 139 they had in the previous legislature, avoiding the drop predicted by almost all polls. The Liberals and Greens, on the other hand, have collapsed, each losing about twenty seats. As I was saying, the heyday of social democratic hegemony passed long ago, but beyond the endurance of the Iberian social democracy — the only ones alongside the Cypriots to independently exceed 30% — there are some good signs that suggest this family may be moderately satisfied. In France and Greece, two paradigmatic examples of the crisis in this space, Pasok and PSF, which seemed long defunct, are now vying for leadership in opposition again. In Italy, the Democratic Party (DP), despite insufficient results, has outplayed the 5 Star Movement in the opposition, solidifying its position as the main opposition force to Giorgia Meloni's government. And in the Netherlands, a coalition with the Greens has managed to surpass the ultra-right Geert Wilders. It's evident that the current situation for social democrats is not ideal, but if we look back ten years, many parties that seemed on the brink of disappearance have recovered and could even become a government alternative in a few years. This directly links to the crisis of an alternative left that in many European countries has shifted from being a viable alternative to a minority space. In France and Spain, these spaces that once made socialists tremble now find themselves divided and subordinate. In Greece, Syriza remains the second force, but in 2019 it led the center-left by 15 points and one million votes, a difference that has now been reduced to just 2%. In northern Europe, things seem to be going a bit better as the green left, formerly the Socialist People's Party, has won the elections in Denmark, while in Finland, the Left Alliance — a member of The Left — is the second force with 17% of the votes. Interestingly, this is where the far-right has fallen the most, being the sixth force in Finland, fourth in Sweden, and ninth in Denmark. These results provide a glimmer of hope and show to the left in other regions a path to defeat the far-right. This is the landscape we find ourselves in. In the face of a far-right that is gradually gaining power and influence in Europe, the only ones seeming to withstand the far-right surge are the two traditional families, the EPP and the Social Democrats. The former, increasingly unabashed in their alliances with the radical right, remain committed to drawing a distinction between the "good" ultras, such as the Atlanticists like Meloni and Poland's Law and Justice Party, and the "bad" ultras, who are anti-European and aligned with Putin, like the AfD or Salvini. This distinction allows them to present agreements with parties that have repeatedly shown scant respect for human rights as respectable. And the latter, either through action or omission of others, have managed to weather the storm following the 2008 crisis and remain in many countries as the alternative to far-right governance. Who would have thought this ten years ago when many were signing the death warrant for social democratic parties. This is the Europe that remains. The rise of far-right influence and the consolidation of bipartisanship are the two main headlines of a night that will go down in history more for Macron's advancement than for immediate repercussions on Union governance, where everything will continue more or less the same. No earthquakes, but with tectonic shifts that may one day bring everything crashing down. The article was translated and licensed under CC BY-SA 3.0 ES (Atribución-CompartirIgual 3.0 España).

“This article was originally published here by the International Crisis Group”Tensions between China and the Philippines are increasing the risk of armed conflict in the South China Sea. In this excerpt from the Watch List 2024 – Spring Update, Crisis Group looks at how the EU can support regional diplomacy to mitigate maritime disputes. Rising maritime tensions between China and the Philippines have highlighted the risk of armed conflict in the South China Sea and the dangers it would pose to global trade. Several countries are implicated in the set of complex sovereignty disputes in the sea, which stem from rival claims to various features and the maritime entitlements they generate, but recent incidents involving Beijing and Manila have triggered the greatest concern. The Philippines controls nine outposts in the Spratlys, a contested group of land and maritime features at the heart of the South China Sea. A submerged reef known as Second Thomas Shoal has become a dangerous flashpoint, with Chinese boats continually trying to block Manila’s efforts to resupply the BRP Sierra Madre, a rusting ship housing a handful of soldiers that a former Philippine government purposely grounded in 1999 in a bid to assert sovereignty over the atoll. China, which also claims the shoal, first started interfering with these missions in 2014, but relations between the two countries in the maritime domain have never been as volatile as during the last seven months. Chinese boats have regularly rammed the Philippine supply vessels or doused them with water cannons, occasionally wounding the sailors on board. Manila has a Mutual Defence Treaty with Washington, making this burgeoning maritime dispute part of the geopolitical competition between the U.S and China. In effect, the South China Sea has become a zone where conflict risks are rife – and where Washington and Beijing could be drawn into direct confrontation. Considering these developments, the EU and its member states should: • Seek greater diplomatic engagement with both Beijing and Manila to keep tensions in check. They should also expand their diplomatic presence across South East Asia and, where relevant, establish reliable channels through which they could communicate with high-level authorities in China and other claimant states should disputes at sea escalate; • Work to promote respect for international law, particularly the law of the sea, as a source of neutral rules for dispute resolution and conflict prevention, for example by organising public events, roundtables and dialogues in Manila and elsewhere. While this measure may not bridge the divides between Manila and Beijing, it could at least help establish a level of mutual support and understanding among the other South China Sea claimant states; and • Strengthen coast guard cooperation with the Philippines, focusing on building capacity in areas such as environmental protection, safety and search-and-rescue procedures. Troubled Waters The sovereignty disputes that underpin the tensions between China and the Philippines in the South China Sea go back decades. But it was Beijing’s manoeuvres to take control of Mischief Reef (in the east of the Spratlys) from Manila in 1995 that altered the perceived balance of power between the two states and in the region, setting off the territorial dispute that has now taken a turn for the worse. China’s assertiveness in the sea has grown in the past few years, along with its military capabilities. The brewing territorial dispute made headlines in 2012 when Beijing in effect took control of Scarborough Shoal, an atoll 220km west of the Philippine mainland but within Manila’s exclusive economic zone (EEZ), after a maritime altercation. The incident prompted then-President Benigno Aquino to file a case challenging China’s territorial claims under the UN Convention on the Law of the Sea (UNCLOS). On 12 July 2016, the presiding arbitral tribunal ruled in favour of Manila, dismissing China’s claim to all the waters within its “nine-dash line”, which constitute almost the entire South China Sea. But it was a Pyrrhic victory. Beijing not only rejected the adjudication and the subsequent ruling, but it had also already undercut efforts to settle the dispute through legal channels by building and fortifying seven artificial islands in the Spratlys while the case was winding its way through the system. This move fundamentally changed the status quo, enabling Beijing to post permanent garrisons in the area for the first time. By many accounts, China has thus ensured itself control of the sea in any situation below the threshold of armed conflict. A short lull in the maritime dispute appeared to follow. After coming to power in 2016, Aquino’s successor, Rodrigo Duterte, pursued a pragmatic policy toward Beijing. Duterte downplayed the tribunal’s decision and cast sovereignty issues aside, hoping to benefit from Beijing’s economic largesse in exchange. Yet his ambitious gambit did not pay off. Tensions at sea continued in the form of regular standoffs between the country’s coast guard and Chinese vessels. Filipino fisherfolk struggled to reach their traditional fishing grounds, and Manila could not exploit the precious oil and gas reserves within its EEZ to which it is entitled under international law. In March 2021, Chinese ships massed around Whitsun Reef, an unoccupied feature in the sea, ringing alarm bells in Manila, where senior officials voiced public criticism of China’s behaviour for the first time in years. By the end of the Duterte administration, the Philippines had revived its ties with the U.S. and become more assertive still, filing several diplomatic protests with the Chinese government. Elected in 2022, President Ferdinand Marcos, Jr., Duterte’s successor, was initially disposed toward friendly relations with Beijing, but the relationship soured only a few months into his presidency. Although China remains the Philippines’ top trading partner, Marcos, Jr.’s meetings with President Xi Jinping did not achieve the desired results: Beijing neither agreed to make major new investments nor curtailed its “grey zone” tactics in the South China Sea, understood as coercive actions that remain below the threshold of armed conflict. These rebuffs have helped push Marcos, Jr. toward strengthening ties with Washington, and the Biden administration has, on several occasions, publicly committed that the countries’ Mutual Defence Treaty would be deemed triggered in the event of an armed attack on Philippine warships, aircraft or public vessels. In perhaps the most significant recent development, after a series of high-level visits by U.S. officials to Manila, the two countries agreed to scale up implementation of their Enhanced Defense Cooperation Agreement, which gives U.S. troops rotational expanded access to Philippine military bases, and which China perceives as a provocation, especially given these bases’ proximity not just to the South China Sea but also to Taiwan. Manila has also received defence and diplomatic support from a host of other countries, particularly Japan and Australia. Despite the dispute it has with Vietnam over parts of the South China Sea, it has engaged, more quietly, with Hanoi, and acquired maritime defence equipment from India, thus expanding its circle of partners. Joint naval exercises with various countries have included large-scale ones with the U.S. in April, which involved the deployment of missiles that can reach targets almost 1,600km away – something that was sure to draw Beijing’s attention – and took place just after Manila wound up its first-ever trilateral presidential summit with Washington and Tokyo. In the meantime, the Marcos, Jr. administration has pursued what it calls a “transparency initiative”, publicising information about maritime incidents by inviting journalists to join its coast guard ships or posting video recordings of events almost as they are happening. Dramatic footage of Chinese vessels blocking, ramming or attacking its resupply missions to Second Thomas Shoal with water cannons has generated widespread condemnation in the Philippines and abroad. Many consider these tactics to be bullying. For its part, and despite the 2016 ruling, Beijing asserts that Manila is intruding into its waters and maintains that it is demonstrating maximum restraint. China has also recently referred to a so-called gentleman’s agreement under former President Duterte that it says foresaw preserving a status quo in the South China Sea, with Manila ostensibly agreeing to supply only humanitarian goods and no construction materials to the BRP Sierra Madre; Manila denies that there was any such arrangement. Given the Philippines’ determination to continue resupplying its troops on the BRP Sierra Madre, Second Thomas Shoal will likely remain a flashpoint. Due to the constraints imposed at sea by the Chinese maritime militia and coast guard, Manila is starting to look into other means of provisioning its outpost, some of which are likely to irk Beijing even more, such as airdrops or closer U.S. naval escorts. In September 2023, a U.S. plane was in the shoal’s vicinity during a resupply mission, while a U.S. warship passed through waters nearby in December. But the shoal is not the only possible source of tension. Chinese vessels, both official and non-official, sail through many areas where Philippine fisherfolk traditionally work, while other features, such as Scarborough Shoal, are also points of friction. A large-scale encounter or accident at sea could be especially dangerous. Should a Filipino or Chinese national die during such a confrontation, it could stir nationalist sentiments in Manila and Beijing and heighten threat perceptions on both sides. In case of loss of life on the Philippine side, Manila would expect its U.S. ally to assist under the Mutual Defence Treaty, especially given the recent exchanges with Washington on that topic, although the U.S. has not said precisely how it would come to the Philippines’ aid. How such a dangerous situation would evolve depends in large part on Manila’s political decision to invoke the treaty and the choices Washington makes about how to fulfill its commitments. In principle, Beijing and Manila remain open to negotiations. But the bilateral consultative mechanism, a confidence-building measure designed in 2017 to manage maritime issues between the two countries, among other things, has generated no results of note. Meanwhile, efforts to create a Code of Conduct, which aims to reduce tensions at sea by setting up norms and rules between claimants and has been under discussion between China and the Association of Southeast Asian Nations (ASEAN) for over two decades, have stagnated. Why the Sea Matters The South China Sea is a vital waterway through which around one third of global shipping passes. Peace and stability in the sea are a prerequisite for safe trade and are demonstrably in the interest of the EU and its member states. At over 40 per cent, the share of the EU’s trade with the rest of the world transiting the sea is even higher than the global average. Instability in the area would deal a major blow to the European economy; even a slight disturbance of shipping routes could result in higher transport costs, shipping delays and acute product shortages. Should there be an escalation that pits China against the U.S. in a direct conflict, the consequences could be catastrophic and global. European positions toward South China Sea disputes have traditionally highlighted the importance of all parties respecting international law and the need for peaceful resolution, while being careful not to take sides. But over the last few years, China’s assertiveness and expanding military capabilities have driven a greater sense of urgency and something of a shift in European thinking. First, the EU and several of its member states have developed “Indo-Pacific” strategies, designed to guide and promote cooperation with countries throughout the region. Secondly, Brussels has increased its diplomatic support for the Philippine position following maritime altercations, offering supportive statements in December 2023 and March 2024. Brussels and several European capitals now back Manila in regularly underlining the importance of UNCLOS and maritime law in the South China Sea context. Meanwhile, Europe’s presence in the region is growing, if slowly and in part symbolically. In 2021, the EU appointed a special envoy for the Indo-Pacific for the first time, while European Commission President Ursula Von der Leyen visited Manila in July 2023, the first trip to the Philippines by someone holding that office and an opportunity to express, at the highest level, the EU’s readiness to strengthen cooperation with the government in maritime security, among other areas. A German frigate entered the South China Sea in 2021, and French and Italian ships made port calls in Manila in 2023. In March 2024, the EU and the Philippines agreed to resume negotiations over a free trade agreement, while a month later France announced talks regarding a Visiting Forces Agreement with the Philippines. While EU interest in the region is rising, European stances on the South China Sea are complex, with member states harbouring different views on maritime disputes in the region and, more broadly, on big-power competition. Some, such as France – which is the only EU member state to have overseas territories in the region (and which has significant EEZ interests there) – see themselves as having stakes higher than others and are keen to participate in the region’s discussions on security. Others, such as Greece and Hungary, are less concerned with maritime flare-ups so far away and tend to ascribe greater importance to maintaining good relations with Beijing. What the EU and Its Member States Can Do As the EU and its most powerful member states are drawn deeper into the South China Sea, they should raise their diplomatic game in the region – both to ensure awareness of mounting tensions and to look for ways to manage corresponding risks. As a practical matter, Brussels could leverage its status as an ASEAN Strategic Partner to seek more participation in that bloc’s security mechanisms and regional forums; the EU and member states could seek higher levels of engagement with regional powers such as Japan, Australia, and South Korea on matters concerning the South China Sea; and Europe could post more diplomats to the region, including permanent defence attachés who speak the language of naval diplomacy. Of particular importance will be maintaining strong lines of communication with Beijing, where Europe is seen as still having some distance from the U.S.-China strategic rivalry, which works to its diplomatic advantage. While to some extent this communication will be traditional bilateral statecraft, it may also mean looking for new opportunities and new channels for dialogue. For example, some member states could also seek to follow the precedent set by France and China in establishing a coordination and deconfliction mechanism between their militaries. Brussels should also continue raising the South China Sea in its engagement with Beijing as it did during the EU-China summit in 2023. Maintaining these channels will become both more difficult and more important if and when the EU and member states expand their operational presence in the region – for example, if they decide to establish a calibrated maritime presence in the South China Sea, as proposed by the EU envoy to the Indo-Pacific. Such a move is still deemed unlikely for now. As for public diplomacy, Brussels and EU member states should consider practical ways to promote principles of the law of the sea in the region, making the case that broader regional support for and adherence to these principles would provide neutral ground for peacefully avoiding and resolving disputes. While it is hard to see this approach appealing to Beijing, which has rebuffed the UNCLOS tribunal’s decision, there could still be benefits in forging closer cooperation among other claimant states. Convenings in Manila and other regional capitals could cover topics related to the continuing disputes but also to cross-cutting themes of regional interest such as fisheries. With negotiations over a regional Code of Conduct stuck, like-minded countries in the region could use these occasions to at least develop common positions on discrete issues that might be addressed by the Code or that could foster regional confidence-building in the South China Sea. Finally, in the realm of capacity building, European governments should continue to strengthen coast guard cooperation with South China Sea claimant states, helping them develop tools and protocols that might be used where appropriate to avoid confrontation and conflict. Since Aquino’s administration, Manila has tried to boost its coast guard capabilities. Given that many of the other claimant states’ vessels in the South China Sea are coast guard ships, and find themselves embroiled in maritime confrontations, a common approach on rules of engagement could help avoid misunderstandings at sea. Building on the EU’s integrated coast guard system, the EU could host or sponsor joint workshops to develop operating principles for the region’s law enforcement vessels and exchange best practices with Philippine authorities. Brussels could also fund agencies such as the UN Office on Drugs and Crime to strengthen coast guard expertise on issues such as environmental protection, safety and search-and-rescue procedures. European member states could also participate in joint activities with the Philippine and other ASEAN coast guards to strengthen fisheries control and maritime border protection and deter piracy or smuggling.

Hotfoot from signing a security pact with North Korea on Wednesday, Vladimir Putin has popped up in Vietnam, another of the few remaining countries where the Russian president is still welcome (or doesn’t face arrest under the war crimes warrant issued by the International Criminal Court last year). Here he was congratulated by the president, To Lam, for his election victory earlier this year and for maintaining stability and continuity in Russia. Putin, meanwhile, made much of the Soviet Union’s historical support for the Vietnamese people’s struggle for independence and unity from the 1950s to the 1970s, referring, without a hint of irony, to Vietnam’s “heroic struggle against foreign invaders”. The visit has been billed as part of Putin’s strategy to promote a new “multipolar” world order, free from US control. But it should be noted that the pragmatic Vietnamese have already hosted Joe Biden and Xi Jinping over the past nine months. Hanoi’s “bamboo diplomacy” depends on the country being “actively neutral” – with one eye on China, Vietnam has also upgraded relations with the US, Australia and South Korea in recent times. So, while there will be plenty of expressions of goodwill from Vietnam’s leadership, they are less likely to commit to anything more concrete as things stand. North Korea knows little of such diplomatic niceties, though, and has fewer choices when it comes to its friends. Very little detail has emerged of the new pact with Russia, except that it would require each country to come to the aid of the other if attacked. But it’s likely that close to the top of the agenda would have been Russia’s military requirements. North Korea’s supplies of artillery and ammunition are thought to have been vital in helping Russia overcome the harsh sanctions imposed by the US as well as Beijing’s unwillingness to directly provide arms for the war in Ukraine. Kim, in turn, wants Russian know-how when it comes to sophisticated military tech as well as economic support when it comes to feeding his country’s starving population. But warm relations between the two countries is nothing new. Official pronouncements emphasised the “traditionally friendly and good” relations between Russia and North Korea “based on the glorious traditions of common history”. For Kim, writes Robert Barnes, a senior lecturer in history at York St John University, this is something of a family affair which harks back to the 1930s when the North Korean leader’s grandfather Kim Il-sung was a relatively unknown Korean communist leading a small guerrilla band fighting the Japanese in Manchuria. Kim spent much of the second world war in the Soviet Union, where he joined the Red Army and rose to the rank of major. After the conflict, he was handpicked by Stalin to lead the Korean Workers’ party and then North Korea when it was established in 1948. The Korean war which followed almost led to a nuclear confrontation between the Soviet Union and the west. Hopefully, concludes Barnes, nothing as dramatic will result from this latest iteration of the relationship between the two countries. But pariah states such as North Korea aren’t the only countries where Putin can command a degree of support, if the recent European parliamentary elections are any guide. As Natasha Lindstaedt notes here, the rise of the far right in EU member states such as Germany, France, Slovakia, Hungary, Romania and Bulgaria is throwing up an increasingly powerful group that stands in opposition to EU support for Ukraine. It may seem counterintuitive that such an avowed anti-fascist as Putin is courting extreme right organisations such as Germany’s Alternative for Deutschland party (AfD) or Hungary’s Fidesz party. But Lindstaedt believes that leaders such as Hungary’s Viktor Orbán have shown little concern for the institutions of democracy – as shown by Hungary’s adoption of a similar foreign agents’ law which acts to curtail press freedom and the work of NGOs. She concudes: “Putin is seen by the far right as a strong and conservative leader that can defend himself against the liberal west, which is trying to undermine these values.” The west, meanwhile, remains divided over the manner and extent of its support for Ukraine. The good news for Kyiv is that the recent G7 meeting in Puglia, southern Italy, ended in an in-principle agreement to use the US$3 billion (£2.36 billion) interest from US$350 billion of Russian assets frozen in the western banking system to underwrite a US$50 billion loan to Ukraine. But Gregory Stiles and Hugo Dobson, experts in international relations at the University of Sheffield, sound a cautionary note suggesting that the details of how this will work are likely to take months to agree. Meanwhile, they write, five of the seven leaders – US president Joe Biden, France’s Emmanuel Macron, Canada’s Justin Trudeau, the UK’s Rishi Sunak and Japan’s Fumio Kishida – all face elections this year which none of them are guaranteed to survive. And, to take just one example, if Biden loses in November to Donald Trump, the likelihood of this deal proceeding becomes significantly reduced. Summit on peace Many of these leaders went on to Switzerland at the weekend for the Summit on Peace in Ukraine. Stefan Wolff, an expert in international security at the University of Birmingham, was following proceedings and concludes that it’s hard to judge the meeting an unqualified success. Out of 160 countries and international organisations invited, only 92 attended. Biden was a no-show and Canada’s premier, Justin Trudeau, was the only G7 leader to stay for both days of the conference. The main problem, writes Wolff, was that the only peace plan on the table was that proposed some time ago by Ukraine’s president, Volodymyr Zelensky. This calls for the complete withdrawal of Russian troops from Ukraine, including Crimea, and the payment of reparations for rebuilding his country. Seven other peace plans, proposed by the likes of China (which also failed to send anyone), Brazil, Indonesia, Saudi Arabia, a group of African states led by South Africa and the Vatican were not discussed. Most of these call for a ceasefire, which is anathema to Kyiv and its backers in the US and UK, as it would accept, for the time being at least, Russia’s territorial gains on the ground, including the illegal annexation of Crimea in 2014. Putin, meanwhile, was trolling hard from the sidelines, releasing his terms for a ceasefire deal, which are for Ukraine to accept Russian annexation of Crimea and not just the land his troops currently occupy, but all of the four regions he annexed in September 2022. Putin’s column As previously noted here, a season of relative success on the battlefield, has left Putin in a bullish mood. It emerged recently that (despite being seriously disadvantaged by the war in Ukraine and the harsh western sanctions which have ensued) the boss of Russian energy giant plans to build an 80-metre column in St Petersburg to commemorate Peter the Great’s triumph in the great northern war, after which Russia declared itself to be an empire for the first time. As George Gilbert, an expert in Russian history at University of Southampton notes, anything honouring Peter the Great is a sure-fire way of buttering up the Russian president, who sees himself as a latter-day incarnation of the man who built his home town of St Petersburg, glossing over the fact that Peter saw his capital as a way of making Russia more of a west-facing country. Gilbert gives us some historical context about the conflict, in which Russia lined up alongside much of what would become Poland and Germany as well as Britain, by virtue of its king, George I, also being the ruler of Hanover. The key battle, he writes, was at Poltava, which is in the middle of what is now Ukraine, which involved defeating a crack regiment of Cossack cavalry, which you’d have to imagine is very much grist to Putin’s mill. One suspects, though, that it’s Peter the Great’s imperial achievements that Putin wants to emulate most of all.

We can talk about selective tariffs - but not about protective tariffs - Concerns about the effects of economic dependencies are increasingly overshadowing the benefits of open global trade. - In the current geopolitically charged situation, there may be situations in which trade policy dependencies - for example in the case of rare earths - can be mitigated by state intervention. - In such cases, selective tariffs are the best choice. Subsidies to build up own production capacities are significantly less efficient, more expensive and undermine the market principle. - Protective tariffs for industries whose products are sufficiently available on the global market, such as the automotive and steel industries, should be rejected. - The fundamental goal should be the preservation of rule-based world trade in accordance with WTO rules. Any kind of state intervention must be justified on the basis of solid data. Background During Chinese party leader Xi Jinping's visit to Europe in May, there was once again a lot of talk about economic dependencies. They are seen as a threat to the "economic security" of Germany and Europe. What often seems to fade into the background is that the arguments for a global division of labor remain valid: it enables general prosperity precisely because certain countries and regions concentrate on the production of individual goods and consequently do not produce others themselves. On the other hand, it is also true that the economic damage more than compensates for these advantages if a state such as China uses economic dependencies as political leverage and, in the worst case, stops supplying goods for which it has a monopoly. In principle, China has achieved such a monopoly for refined rare earths and some other smelted metals.1 However, this clearly does not apply to electric cars, steel or solar cells. The reason for such quasi-monopolies is simple: Chinese companies export the products in question so cheaply that production elsewhere in the world is not worthwhile. If this were solely due to the fact that Chinese companies produce better, the only correct response would be to roll up our sleeves and become better ourselves. In the case of rare earths from China, however, the advantage of Chinese manufacturers is largely due to direct and indirect subsidies. In such an environment, in which Chinese producers have massive cost advantages due to politically granted benefits, it is not worthwhile for private companies outside China to build up their own capacities for the production of rare earths, for example. Even if prices were to rise and economic production were possible, this would not be rational; state-supported Chinese companies can easily survive periods of low prices. The usual market mechanism, whereby companies with the most competitive solutions survive, does not apply here. Even technologically superior production methods do not prevail due to Chinese subsidies. Possible reactions The best economic solution is undoubtedly for the state not to react at all and to see the availability of very cheap products that are available for domestic consumption or for further processing as an advantage. The fact that the products in question have been made cheaper by Chinese taxpayers' money can be gratefully accepted. It would be a genuine and courageous system competition not to respond with the same instruments, but to maintain a market economy system and thus exploit the weaknesses of the counter-design. Shaping the economic framework conditions politically in such a way that innovations that provide alternatives to the use of the raw materials in question can be developed more easily would be a reaction that is still justifiable within the framework of the social market economy. This would be, for example, favorable recycling processes. In most cases, such innovations are possible. However, their introduction and application is significantly more expensive than importing standard products from China. If dependence on China is really not justifiable in individual cases,2 there are two possibilities for state intervention in the form of subsidies or tariffs, which may be justifiable in rare individual cases, but are not provided for within the framework of the World Trade Organization (WTO). Important indicators for the assessment of dependencies are, for example, the lack of substitutability of the imported good, the degree of concentration of supply in a country and the relevance of the good in question for the domestic economy. However, state intervention to protect domestic production sites, such as is being discussed for electric cars or steel, appears to be explicitly unjustifiable. There is a sufficiently diversified supply of such products on the global market and there is no dependency on just one country. Economic effects of tariffs and subsidies Tariffs and subsidies both aim to compensate for the price difference to cheaper foreign competitors. Tariffs make imports more expensive, while subsidies make domestic production cheaper through state subsidies. Both have a negative welfare effect, but the correlation is more harmful in the case of subsidies. Figure 1 uses a schematic example, which is not based on empirical data, to illustrate the effect if the costs of producing rare earths in Germany were reduced to the level of the import price from China (country 1) through subsidies.   With the subsidies, it is now economically viable for the subsidized companies to produce the rare earths from ore in Germany. The actually cheaper ways of importing rare earths from alternative countries or using other technical solutions remain more expensive and would hardly be used. The goal of reducing dependencies would therefore be achieved in a very expensive way. Large sums of taxpayers' money would be spent on this. In this example, the most expensive possible route is discussed in order to clearly demonstrate the negative consequences. In reality, however, it is very unlikely that the cheapest route in economic terms will be subsidized. This is because there are always many different providers and technical solutions, which means that all the options are often not even known or can only develop in the long term. It is therefore very unlikely that the optimal subsidy recipients will be selected. A benefit is created for a specific, relatively arbitrarily selected application, but not for others. The effectiveness of the market is thus distorted and the competitiveness of the location decreases as a result. As the subsidies compensate for a competitive disadvantage, it is unlikely that high additional tax revenues will be generated. The funds spent are no longer available for other state investments. The result is a loss of welfare on this scale. Only the subsidized companies benefit from this. The price at which rare earths can be purchased in Germany does not change. It is also possible to subsidize production abroad in order to reduce dependence on one country. Such models are being attempted via "raw material partnerships", for example. Such an approach can be significantly cheaper than subsidizing domestic production. In the example (Figure 1), only the significantly lower import price from country 2 would have to be subsidized. However, the other disadvantages of subsidies listed above also apply in this case. In particular, it is even more difficult to obtain all the necessary information for projects abroad and therefore even less likely to choose the most cost-effective option. The targeted tariffs discussed here are intended to respond to dependencies on supplies from a specific country. They are therefore only imposed on imports from this country. Other imports are not affected. To stay with the example, the importer pays a surcharge on the imported rare earths. This makes his product, for which he processes rare earths, more expensive domestically. Manufacturers abroad who are not affected by the duty become more competitive in comparison.    If the tariff rate were set in the same way as above so that the competitive disadvantage for the most expensive option - metal processing in Germany - is compensated for in terms of price, the tariff rate on imports from China would be very high. However, consumers of rare earths in Germany would still have access to the significantly cheaper other options. Metal processing in Germany would therefore remain unprofitable, while imports - now no longer from China, but from country 2 - would continue to be significantly cheaper. However, the price difference to the cheapest processing variant in Germany, in the example (Figure 2) recycling, would no longer be so great, so that this variant would be easier to make economically viable by scaling up or using innovative technical solutions. In reality, the introduction of customs duties would not divert all procurement to a single country; there is no capacity for this anywhere. The result would be a mix of different suppliers, which would make it more worthwhile to drive innovation in Germany. Changes in the price structure between the different providers and processes over time can be tracked by customers in this model - the best process (or the second best, if the best is used in China) then prevails on the market. The welfare loss here arises from the fact that consumption or further processing of the imported products becomes more expensive by at least the difference to the second cheapest source of supply. However, the volume of the welfare loss is significantly lower than in the case of subsidies. It can be argued that tariffs make the prices of downstream products in the supply chain more expensive, whereas subsidies do not. While this is true, it overlooks the fact that the much larger group of companies and consumers who are not directly affected do not suffer any direct additional costs in the case of tariffs, but bear the costs of subsidies through their taxes. Political effects of tariffs and subsidies In terms of their political and structural consequences, subsidies are more harmful than targeted tariffs. This is simply due to the procedure at the end of which individual companies receive a subsidy decision. An "objective" allocation is hardly possible here. On the contrary: the procedure is susceptible to personal relationships, political influence and direct corruption. Furthermore, subsidies that are only granted in one country of the European Union jeopardize the integrity of the European Single Market. Similar problems can arise with customs duties. This happens when they are used to protect certain domestic industries. In the case of targeted, selective tariffs, which are based on clearly defined, objective categories, such as the degree of dependence on a product from a country, there is little scope for political influence once the criteria have been established. Tariffs cannot harm the European single market either, as they can only be imposed at European level anyway. WTO conformity The reduction of tariffs and subsidies within the framework of the World Trade Organization (WTO) and the predecessor agreement GATT are a central reason for the reduction of global poverty in recent decades and one of the cornerstones of Germany's prosperity. It is therefore self-evident that tariffs and subsidies not only contradict the idea of the WTO. They also contradict its two basic principles: Subsidies for domestic production contradict the non-discrimination principle3, tariffs against individual countries violate the Most Favorite Nation Clause4. There are exceptions for both in the WTO rules. For example, WTO members must notify subsidies so that they can be examined and other countries can object to them if necessary. In principle, subsidies are only intended - and within a narrow framework - for developing countries, which still includes China. However, the notification of subsidies to the WTO hardly works any more. For example, 64 countries (around a third of members) have not even notified their subsidies for 20175. Nevertheless, some of China's subsidies may indeed be legal according to the letter of the WTO rules. But they are certainly not legitimate, as the aim of the WTO is to liberalize world trade and not to cement the opposite. And even if subsidies are known, the WTO cannot take legally binding action against them due to the dispute settlement mechanism blocked by the USA. Consequently, the USA has not reacted to the unresolved problem of China's subsidies within the WTO framework. Although tariffs have been imposed on some Chinese imports, the Inflation Reduction Act (IRA) is a huge subsidy program. If the dispute settlement mechanism were to work, the IRA would almost certainly have to be declared WTO-incompatible. However, as this path is blocked, many countries and regions of the world - including Germany and the EU at the forefront - are reacting with their own openly WTO-incompatible subsidy programs. The current subsidy race is constantly creating new reasons to impose subsidies in response to the subsidies of others. This will further damage the multilateral trading system, which has been very successful for Germany in particular. Targeted tariffs, on the other hand, which can be used to eliminate competitive disadvantages caused by subsidies and which are therefore only levied on goods from the subsidizing country, are in principle in line with the basic idea of the WTO. This is because it balances out a distortion of the world market created by subsidies. Therefore, tariffs are generally permitted as a reaction to dumping and subsidies6. A reaction to subsidies via tariffs within the strict WTO framework is currently hardly possible for the reasons mentioned above. In this situation, it should be actively communicated that in an unsatisfactory legal situation, the path of the least evil will be taken with tariffs. At the same time, serious efforts should be made to reform the WTO. Conclusion The argument: "We want to have the production of certain things in Germany because we believe that we would no longer be supplied with them in crisis situations" is not an economic argument. Production for strategic reasons is always a financially subsidized business. Because if there was money to be made, the private sector would do it. Politically, this line of argument is perfectly legitimate - as is the attempt to steer the economy directly in a politically acceptable direction through subsidies. However, this has nothing to do with a social market economy, but rather the opposite. However, if Germany and Europe are to remain committed to the social market economy and open multilateral trade, the only economically sensible response to problematic dependencies from abroad (if one has to respond at all) is to impose targeted, selective tariffs - but certainly not protective tariffs for domestic production sites. The German government should work within the EU to set a clear framework for this and at the same time work on a reform at WTO level to finally reduce the rampant subsidies. Because these - and not tariffs - are currently the biggest threat to the open global trading system that is so important to us. References 1 Vgl. etwa die Darstellung der Abhängigkeiten von für die Energiewende nötigen Metallen in Cernicky (2022): https://www.kas.de/documents/252038/16166715/Energiewende+und+Protektionismus+-+Wie+gehen+wir+pragmatisch+mit+China+um.pdf/442ba770-d504-43cc-25f1-eaf7d970dfc1, genaue Zahlen vgl. etwa die Auflistung des BDI: https://bdi.eu/publikation/news/analyse-bestehender-abhaengigkeiten-und-handlungsempfehlungen/ 2 Zum Versuch einer entsprechenden Bewertung vgl. etwa die von der KAS und dem Ifo-Institut durchgeführte Studie zu Abhängigkeiten in Lieferketten, Flach et al (2021): https://www.kas.de/de/analysen-und-argumente/detail/-/content/globale-wertschoepfungsketten 3 Art. III GATT 4 Art. I GATT/ WTO 5 WTO | 2023 News items - Members reiterate concerns on lack of transparency with subsidy notifications: https://www.wto.org/english/news_e/news23_e/scm_02may23_e.htm 6 GATT Art VI, Dumping und Ausgleichzölle Publisher: Konrad-Adenauer-Stiftung e. V., 2024, Berlin Design: yellow too, Pasiek Horntrich GbR Produced with the financial support of the Federal Republic of Germany. This publication of the Konrad-Adenauer-Stiftung e. V. is for information purposes only. It may not be used by political parties or election campaigners or helpers for the purpose of election advertising. This applies to federal, state and local elections as well as elections to the European Parliament. The text of this work is licensed under the terms of "Creative Commons Attribution-ShareAlike 4.0 international", CC BY-SA 4.0 (available at: https://creativecommons.org/licenses/by-sa/4.0/legalcode.de).

Poland ranks seventh in Europe and 12th worldwide among the least business-friendly countries. It also performed the worst in this regard compared to neighboring countries, including war-torn Ukraine. Greece is the most challenging country to conduct business in. These conclusions come from the eleventh edition of the annual Global Business Complexity Index report by TMF Group, a leading provider of compliance and administrative services. The authors of the TMF Global Complexity Index 2023 examined 79 jurisdictions, accounting for 93% of the world’s GDP and 88% of net foreign direct investment. They compared 292 annually monitored indicators regarding key aspects of business operations, administrative regulations, and legal compliance for entrepreneurs planning to conduct business in a selected market. For the first time, Saudi Arabia appeared in the ranking, taking the 37th position. Poland, considering European countries, ranked seventh in the index, three places better than the previous two years. “We observe progress in digitizing processes in Poland. This is a significant convenience for investors and businesses along the Vistula River. An example is the ability to perform all financial reporting activities in an IT service. Another example is the growing interest in the simplified joint-stock company (PSA), introduced just over two years ago, which requires only 1 PLN of capital and has straightforward management and liquidation rules. The turmoil related to the introduction of the Polish Deal has also passed, which is welcomed by businesses and improves sentiment.” – explains Joanna Romańczuk, Director of TMF Group for Central and Eastern Europe, highlighting positive changes in conducting business in Poland. At the same time, Poland performs the worst regarding ease of doing business compared to neighboring countries (excluding Belarus, not included in the ranking), including Ukraine. “The position of a country in the ranking is determined by the complexity of internal business rules and how other countries in the ranking handle such issues. While we see positive signals in Poland, our neighbors are better at facilitating business establishment and operation, even war-torn Ukraine. Ukraine has the status of a candidate country for the European Union. Therefore, the government is introducing many business facilitations, and the pace of reforms is very rapid. For example, no penalties are imposed for self-corrected tax returns. Additionally, attractive solutions for businesses, such as favorable tax conditions and automatic intellectual property protection, are being implemented in the IT sector.” – adds Joanna Romańczuk. TMF Group experts point out that entrepreneurs in Poland are burdened by the necessity of repeatedly reporting the same information to various institutions and the long-standing variability of regulations, such as the announcement of the National e-Invoice System (KSeF), followed by the postponement of its implementation, which caused significant costs for many large organizations to adapt to its introduction. Among the countries where it is most difficult to conduct business, European countries dominate – Greece, which swapped places with France for the top spot this year. They are followed by Colombia, Mexico, and Bolivia. In Europe, it is also more difficult to conduct business in Italy, Belgium, Spain, and Croatia than in Poland. The Cayman Islands (a British Overseas Territory), Curaçao (a Dutch Overseas Territory), Denmark, Hong Kong (a Special Administrative Region of China), and New Zealand are the best in the world at eliminating business obstacles. In Europe, besides Denmark, which has consistently held top positions in this category for years, the Netherlands, the United Kingdom, the Czech Republic, Malta, and Ireland are the most business-friendly countries. “Last year, I gave examples of Denmark, which has long been a global leader in business-friendliness, and the Netherlands, the United Kingdom, and Malta. This year, the Czech Republic also shows that Europe can be very business-friendly, competing even with the United States. No one doubts that it would be beneficial for Poland to join the ranks of leaders in this field in the coming years,” concludes Joanna Romańczuk. In addition to analyzing business conditions in 79 jurisdictions, the authors of the TMF Global Complexity Index 2024 (GBCI) also identify key topics shaping the global business landscape and regulatory environment: Impact of Global Regulatory Compliance on Foreign Investments The authors of this year’s GBCI emphasize that representatives of most jurisdictions expressed confidence in the stability of regulations over the next five years, continuing a trend of increased stability compared to previous years. For example, in 2020, representatives of only 35% of jurisdictions predicted no significant regulatory changes. This sense of stability has grown yearly, reaching 58% of jurisdictions in 2024. Experts suggest that the number or complexity of regulations is not the biggest challenge, but the speed of regulatory changes is the real difficulty. Geopolitical Factors and Bridge Economies Geopolitical instability has an obvious impact on the flow of trade and investment worldwide. While energy prices remain high, supply chain disruptions and trade barriers also pose significant challenges for global players. As a result, many companies are reevaluating their potential growth plans and long-term expansion goals. However, while geopolitical issues may disrupt supply chains or create trade barriers for some jurisdictions, others benefit from global shifts. Due to their neutrality on global issues, countries known as “bridge economies” can capitalize on their unique positions. For these countries, their newly established roles in the global supply chain have become a crucial way for international companies to manage their risks during periods of international instability. Uncertain Times and Success Strategies – Technology and Retaining Employees Although jurisdiction representatives cited various factors influencing growth, IT and technology topped the list as the most influential. Technology offers growth opportunities in multiple ways, providing development possibilities where countries have technological expertise in production and can increase market share through production. The use of technology to increase productivity has also been identified in terms of streamlining work. In many jurisdictions, including New Zealand and Hong Kong, companies automate office, basic, and part-time work using artificial intelligence to keep the workforce size low and focus on higher-value tasks. At the same time, the vast majority of jurisdictions face challenges in attracting and retaining talent (78%), with this figure even higher in the EMEA (90%) and APAC (79%) regions. The ability to respond effectively to demand in this area largely depends on two factors: local labor laws and the potential of regional talent. Jurisdictions with restrictive labor laws and a strong presence of trade unions – or those with a shortage of available talent – are naturally much less able to flexibly adjust employment levels.

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском In March and April, Vietnamese Foreign Minister Bui Thanh Son’s nearly back-to-back visits to the U.S. and China highlighted Vietnam’s increasing penchant for delicate diplomacy with major powers amid the U.S.-China strategic competition in the Indo-Pacific and Vietnam’s territorial tussles with China especially in the South China Sea (SCS), which Vietnam calls the East Sea. Much of the (perceived) disorder in the Indo-Pacific hails from the SCS, and one of Vietnam’s principal challenges is fostering order on its maritime borders. Therefore, Vietnam—historically distrustful of major powers—has been diversifying its relations by seeking security and defense ties with Indo-Pacific partners like the European Union (EU), India, and Japan, as well as with Russia, a country that poses an “existential threat” to the transatlantic allies. At the same time, Southeast Asia is battling disunity within the region for resolving disputes in the SCS, for instance. The regional multilateralism embodied by the Association of Southeast Asian Nations (ASEAN) seems to lack teeth even as China ‘controls’ some of its members using its financial and economic heft. So clearly, efforts beyond Vietnam’s “bamboo diplomacy” that deepen international solidarity are required. In a similar vein, Europe’s reluctant rapprochement with China in recent times amid the EU calling China a strategic challenge but continuing to look for economic engagement is reminiscent of Vietnam and much of Asia’s predicament vis-à-vis China. Moreover, like in Southeast Asia, not every member-country of the EU is embracing the Indo-Pacific construct, led by the U.S. Or even if a member does, like France or Germany, it does not spell the end of a productive relationship with China. Nonetheless, it is clear that the EU has started to take a greater interest in the growing geopolitical situation in the Indo-Pacific, even as the disunity over the extent of the Indo-Pacific priorities, including China, is as apparent. In such a scenario, is it possible for the EU and Vietnam, and by extension ASEAN, to have greater convergence, if not congruence, in their policies? Revisiting Vietnam’s Lack of an Indo-Pacific Tilt The Indo-Pacific, the maritime space and littoral between the western Indian and Pacific Oceans, has become the world’s most geopolitically critical region. In this region, much of the focus and debate among the EU’s more proactive members, such as France, the Netherlands, and Germany, is in response to Chinese unilateralism, trade dependency, and unchecked Sino-U.S. contestation. Several of these EU members have come to understand each other’s positions on the Indo-Pacific. Gradually, there is a realization that it is not just about what the EU and its members seek to accomplish in the region but just as much the perspectives and priorities of key Indo-Pacific resident actors—and their views on European strategies and contributions. Vietnam is one such country that is worthy of greater European strategic attention. Vietnam is known for its “bamboo diplomacy”—a reference to the bamboo plant’s strong roots, sturdy stems, and flexible branches—balancing ties with the two big powers, the U.S. and China. In the words of Foreign Minister Bui Thanh Son, Vietnam’s foreign policy caters to “independence, self-reliance, peace, friendship and cooperation, and multilateralization and diversification of external relations and proactive international integration.” However, Hanoi has never officially and fully embraced the term “Indo-Pacific” nor the U.S.-led Indo-Pacific construct although it does recognize that some aspects of the Free and Open Indo-Pacific tenet advocated by the U.S. and its allies are compatible with its national interests. For instance, the order in the Asia-Pacific, a term that Hanoi prefers to use, should be rule-based. This speaks to one of Vietnam’s most important foreign policy priorities: finding peace and stability in the SCS disputes with China and other claimants. However, the order that Vietnam seeks is in more than just the security domain. The goal of development has been the highest priority since Doi Moi (renovation) in 1986. Economic growth is considered the backbone of national security and regime legitimacy. Hanoi’s development of foreign relations can be said to be grounded in its national development experience, with the stress on economic priority leading to national stability and international standing. Vietnam chooses to engage in the Indo-Pacific construct on its terms. Vietnam and EU Convergence On both economic and security fronts, Vietnam and the EU can find converged interests that align closer to each other. Even as Hanoi has not officially adopted the term “Indo-Pacific,” the EU’s Indo-Pacific strategy, if implemented well, could address both Vietnam’s economic and security needs. Despite its security and military power limitations in the Indo-Pacific, the EU can still play a crucial role in effectively addressing these needs, which are vital for the EU’s strategic interests as well. The two already have a Framework Participation Agreement. Vietnam is also part of the EU’s Enhancing Security In and With Asia (ESIWA) project, which covers crisis management and cyber security. This also aligns with the EU’s Indo-Pacific Strategy, where Vietnam is considered a “solid” partner. Notably, both the EU and Vietnam face (potential) economic coercion from China. As China is now Vietnam’s largest trading partner, sudden trade restrictions hindering Vietnamese exports to China would dramatically hurt the Vietnamese economy. In this vein, Hanoi welcomed the EU-Vietnam Free Trade Agreement (EVFTA), hoping it would give opportunities to diversify its trading partners and thus mitigate the risks of economic coercion from China. On the other hand, the EU and its member-states are also trying to increase economic resilience by diversifying trading partners as they wrestle with economic overdependence on China. So, strategically, Brussels presents an excellent opportunity for Hanoi and vice versa. However, challenges remain. For example, all the EU member-states are still to ratify the Investment Protection Agreement signed along with the EVFTA. Even though this is usually a time-consuming procedure, the imperative to reap benefits as soon as possible has taken a setback amid a challenging geopolitical landscape. Nonetheless, the two sides are concerned about more than just traditional economic development; they are concerned about sustainable development and green transition. For instance, under the EU’s Global Gateway framework, the EU and Vietnam have signed the Just Energy Transition Partnership (JETP), which looks to provide a multi-projects credit facility worth €500 million. This is supposed to be the EU’s primary focus in Vietnam now. Yet, Hanoi’s cautious approach for fear of falling into any potential debt trap could stymie smooth cooperation. Projects involving vast sums of money, such as the JETP, are also practically challenging to push at the moment as officials are afraid to be the targets of the Communist Party of Vietnam’s anti-corruption campaigns. Vietnam would also be keen for ASEAN and the EU as blocs to reinvigorate multilateralism and shore up security cooperation, particularly in the SCS disputes. ASEAN states, in general, are looking to the EU as a non-threatening balancing power to reduce the impact of the China-U.S. strategic competition. Among the potential areas of cooperation between the EU and Vietnam within the ASEAN are regional climate action measures, food security, digitalization, and tech innovation. The two sides must also use their partnership to realize an ASEAN-EU FTA. EU as a Security Balancer? The EU and Vietnam also share their commitment to upholding the rules-based order—an essential component of security cooperation because of the region’s strategic importance. However, improving communication and understanding of maritime incidents more effectively is challenging. The SCS territorial conflict is simmering, particularly between China and the Philippines. In 2016, an arbitration tribunal constituted under the United Nations Convention on the Law of the Sea (UNCLOS) overwhelmingly ruled in favor of the Philippines, which China rejected. However, the ruling bolstered Vietnam’s claims, which were not openly welcomed by other ASEAN states besides the Philippines. In the absence of an agreement for a code of conduct (CoC) between China and ASEAN, which has been dragging on for years, China’s violations of international law in the SCS, including the latest against Vietnam in the Gulf of Tonkin, have increased. Against this scenario, Vietnam and the Philippines have signed maritime security deals. At the same time, Vietnam would be reluctant to do anything more drastic, such as support the Philippines in its attempt to draft a “separate” CoC for fear of Chinese retaliation. While Vietnam is less discussed in major global media than the Philippines on the issue, Hanoi is actively using diplomatic means to internationalize the problem, bringing in more players to address complex territorial disputes to safeguard its sovereignty and promote regional peace. In this context, winning the support of the EU and its member-states would be strategically important for Vietnam. The Vietnamese side can facilitate this by providing foreign entities, including the EU, with more transparent and timely information when incidents occur. Naturally, using a media strategy like the Philippines might sensationalize the issue, which might be different from what Hanoi prefers as it walks a tightrope to balance its complex relations with China. However, Hanoi can at least offer foreign diplomats transparent and detailed information in a timely fashion to help them verify and assess the situation on the ground. This will speed up the EU’s and other potential like-minded states’ response to sea incidents and foster ways forward for more multilaterally agreeable forms of modus vivendi in the South China Sea. Ultimately, such a modus should serve China too. EU No Longer a Bystander The EU’s recent stance on the SCS issue has been its respect for a rule-based order and freedom of navigation, strong opposition to unilateral actions, and supporting the ASEAN-led “effective, substantive and legally binding” CoC while mentioning China but not singling it out. This is a change from the EU’s pre-Indo-Pacific embrace when it was a more divided, neutral house. The EU’s heavy dependence on maritime trade through the SCS mandates that the EU can no longer stand as a bystander. However, ASEAN claimant states, particularly Vietnam, would perhaps expect a sharper or clearer position, which the EU has indeed been moving toward. For example, in March 2024, the EU released a statement expressing concerns about the incidents involving “repeated dangerous maneuvers” by the Chinese Coast Guard and Maritime Militia in the SCS. This tilts to the U.S. line, even as the U.S. has been more vocal in directly criticizing China on the SCS, by calling China’s claims “completely unlawful” even before the current events. One could argue that despite the U.S. and its allies having been vocal, this has yet to lead to a concrete resolution of the conflict. However, if the EU cannot send clear signals on the issue, the division among like-minded countries will be seen as weak and exploitable in China’s eyes. Importantly, this is true not just for the SCS disputes but also for China’s coercive activities in general. Therefore, given the convergent non-confrontational, inclusivity-, and economic interests-oriented attitudes of both Vietnam and the EU toward the Asia-Pacific/Indo-Pacific region, both sides are primed to embrace the other’s strategic outlook and up their game in the face of a challenging China and efforts to foster order.

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском The protests by the Kanak population are taking place against an electoral reform that will further benefit the settlers recently established on the island. In the background are the profits from nickel mining, which the metropolis wants to monopolize. The riots in New Caledonia have led the Government of the French Republic to intensify repression on the Pacific Island. This week, High Commissioner Louis Le Franc has announced that the police presence would be increased, nearly doubling from 1,700 to 2,700 officers. Officially, five people, including two police officers, have died in the clashes, which have arisen due to a legal change in the system of electing representatives that discriminates against the indigenous Kanak population, who make up 40% of the total population. The clashes are also a result of the deep inequality between the Kanak people and the settlers, who are organized into militias, and are said to have carried out executions of civilians. Kanak organizations claim that the death toll among civilians could be higher. Since Wednesday, May 15th, an emergency state has been declared in the archipelago, and the army has been deployed around ports and airports. More than two hundred people have been detained. The situation has worsened due to problems accessing food — due to distribution issues, according to the island government — and healthcare services, which have arisen since the unrest began in early May. The government has stated that in several neighborhoods, "control is no longer assured," and they hope to dismantle the barricades with explosives placed by the masses of protesters. It is estimated that there are around 9,000 protesters, of whom 5,000 are in Nouméa, the capital, especially in the neighborhoods of Kaméré, Montravel, and Vallée-du-Tir. Additionally, the metropolis has banned access to TikTok — a network used for information among the protesters — and the Ministry of Justice has announced "harsher penalties against rioters and looters." The Ground Action Coordination Cell (CCAT) is the main organization of the Kanak population and has linked the protests to the "methodical sabotage of the decolonization process by the French state" from the very beginning. The fact is that since 1986, New Caledonia has been part of the territories to be decolonized according to the United Nations. "Since Emmanuel Macron came to power, France has radically sabotaged the decolonization process," stated the anticolonial organization Survie in a statement. The government's response has been to discredit the CCAT as a "mafia-like" organization and to denounce foreign interference from Azerbaijan, a country which, according to the Élysée Palace, would be seeking revenge for France's support of its Armenian rivals in the Nagorno-Karabakh conflict. Why do protests arise in New Caledonia? The protests arose in response to a reform by the French government aimed at expanding the electorate for provincial elections in New Caledonia, a territory with an estimated population of 300,000 people. The plan involves extending the right to vote to the recently settled colonial population, around 25,000 people, which would further exclude 40% of the island's indigenous population from the representative system, who are the most affected by poverty and exclusion. The settlers are already able to vote in French presidential and municipal elections, but the plan would change the balance in provincial elections. Thus, supporters of independence and the Kanak population interpret that the "Nouméa Accord" of 1988, which grants more guarantees to the Kanak population, would be reversed in order to further privilege the settlers who have gradually been settling in the territory, attracted by tax benefits and the relationship between their high salaries with European standards and the low prices in the archipelago. This is yet another nail in a hardline shift directed by Macron's government, which in 2021 imposed a referendum to shore up French colonial power over the archipelago despite demands for postponement from the Kanaks and significant voices in French society, who called for respect for the Kanak mourning for those who died from COVID-19. As expected, abstention determined the results. The current constitutional bill to "unfreeze" the electorate, which has been voted on in the Senate and must be endorsed by the French Assembly, has sparked multiple protests, including strikes at the port and airport of Nouméa, closure of numerous administrations, the beginning of a riot at the Nouméa prison, and clashes between police and youth from working-class neighborhoods of Nouméa. As noted in an article from the environmentalist newspaper Reporterre, the control of New Caledonia is strategic for France. The island hosts between 20 and 30% of the world's nickel resources, a resource used in the manufacturing of batteries for electric cars. One out of every four people works in the nickel sector, despite which the industry is in crisis, leading the metropolis, under the guidance of Bruno Le Maire, Minister of Economy, to present a "nickel pact" that would introduce millions in aid to the sector but, at the same time, reverse a 1998 agreement by which the island secured management of the nickel. The proposed pact, explained by an expert cited by Reporterre, "completely departs from the model of mining revenues that benefit New Caledonia for its own development" and follows point by point with a neocolonial logic. Additionally, the metropolis aims for the archipelago to export more raw material, which would lead New Caledonia to lose the added benefit of in-situ nickel processing.

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском It is not surprising that China’s Xi Jinping should visit France, Europe’s second largest economy and one of the dominant nations within the European Union. But why should he visit comparatively small and economically less important nations such as Hungary or Serbia? The answer lies not merely in the economic opportunities such a visit may bring to all parties, but in the increasingly anti-American themed politics of the three nations, and their governments’ belief that the future of international politics is a multi-polar order dominated by “civilization states.” These two factors make China, which promises to free the world from American political, economic, and cultural dominance and establish a new multipolar order, an attractive partner for France, Serbia, and Hungary. Equally, it makes them attractive to China, which seeks to divide Europe and the United States, and build greater economic and political ties with European nations desirous of a “new” Europe free of American dominance. Xi portrays China as not merely a nation-state, but a continuation of Ancient Chinese culture merged with Marxism. Xi is adamant that China must draw on its civilizational heritage, and reject the values of Western civilization, which are not – he argues – universal, but indeed particular to the West and thus unsuitable for China. Xi’s remark that China “will work with France to deepen China-Europe mutually beneficial cooperation,” and that the two are “major forces in building a multipolar world, two big markets that promote globalization, and two great civilizations that advocate cultural diversity,” underlines this civilizational perspective on global politics. Civilizationism, as a construct, is thus a tool of liberation through which Xi will free China of non-indigenous values and ideas, and through which it will overcome the United States and make the Chinese nation Asia’s dominant power. The leaders of both China and France, despite their differences, are drawn together due to shared antipathy towards the United States, and their shared civilizational perspective on global affairs, a perspective intrinsically connected with their anti-American politics. Naturally, China and France do not share the same opinion of the United States. China views America as a rival; France views America, perhaps, as a perfidious ally forcing “Anglo-Saxon” culture upon an unwilling French people. Experts have noted the importance Emmanuel Macron places on rejuvenating what he calls European Civilization. Indeed, where right-wing populist Marine Le Pen calls for the protection of France’s Judeo-Christian yet secular civilization, Macron is moving beyond the nation-state paradigm and speaking of centralising power within the European Union in order to protect otherwise moribund European civilization. Macron is very concerned about the future of European civilization, and believes that it represents the best of humanity and must therefore protect its “humanist” values. For Macron, European civilization has many enemies. But perhaps the key enemy is the United States, which is an enemy precisely because it is an anti-civilizational power that defends the nation-state paradigm, insists that its values are universal, and desires a relatively weak Europe. Macron argued that Europeans should take inspiration from the “civilisational projects of Russia and Hungary” and what Macron called their “inspiring cultural, civilisational vitality.” He says European civilization is “humanist,” and that to survive it must reject the “Anglo-American model” which permits the private sector to gain enormous power over human life. This position, of course, also rejects the Chinese model, in which the government is given total control over human life. Hungary and Serbia Victor Orbán is drawn to Xi in much the same way as Macron: both believe the rise of civilization states, such as China, as ineluctable, and both believe that China’s rise provides an opportunity for their respective states – if not civilizations – to free themselves from Anglo-American norms. Although Orbán possesses a civilizational rejuvenation project, it is of an entirely different nature to Macron’s “humanist” plan for Europe. Orbán calls for the re-Christianization of Europe, and for the strengthening of the nation-state and its borders, and he speaks not so much of European civilization but of Judeo-Christian civilization. Orban says, “the US ought to permit illiberal states – such as Hungary – to determine their own futures rather than impose ‘universal values’ upon them in an effort to prevent war.” China’s rise comes at the expense of Orbán’s liberal democratic foes (i.e. Washington and Brussels), decreasing their ability to pressure Hungary to return to liberal democratic norms. Equally, because China is ruled by an authoritarian populist who has a civilizational perspective on international relations, the rise of China legitimises Orbán’s own authoritarianism and his civilizational rejuvenation project. It should come as no surprise that the date Xi chose to visit Serbia coincided with the 25th anniversary of the American-led NATO bombings of Belgrade’s Chinese embassy. The two nations have become increasingly close since the 2012 election victory of the governing populist Serbian Progressive Party (SNS), which sees China as both a source of economic growth and technological development, and also as a partner that is less likely to criticise Serbia’s refusal to sanction Russia, and its often socially conservative politics. Thus, President Aleksandar Vučić received Xi in Belgrade in a ceremony during which he promised the Chinese leader that he would receive in Serbia a degree of “reverence and love” not “found anywhere else.” He further promised that his government would only increase cooperation with Beijing, saying “the sky is the limit.” Xi authored an article in Serbia’s Politika news outlet noting that China and Serbia have similar positions on many important international and regional issues. In the piece, Xi is indirectly calling for Serbia to assist China in challenging US and Western dominance in the international sphere. Experts noted that “Serbia’s hosting of Xi is connected to broader efforts — notably by Moscow and Beijing — to challenge U.S. influence and potentially reshape the international order.” Conclusion Xi’s tour of France, Hungary, and Serbia demonstrates the growing influence of China in Europe. But it also tells us much about how some Europeans are responding to China’s rise as a self-styled civilizational power. This rise has inspired some European leaders to challenge US dominance in international politics and embrace the core values of “European civilization.” Many of Europe’s states thus may seek to emulate China, or help it rise and attempt to politically and economically benefit from it. Moreover, China’s rise seems to demonstrate how by rejecting normative Anglo-American (or more broadly Western) values, and embracing the traditional values and culture of one’s own civilization, these states can overcome American imperialism and cultural hegemony. Whether rejecting Western Anglo-American norms and embracing their own civilizational values can give these entire nations a shared purpose, and inspire reindustrialization, remains an unanswered question. Ihsan Yilmaz is a research professor of political science and international relations at Deakin University’s ADI (Alfred Deakin Institute for Citizenship and Globalisation). Previously, he worked at the Universities of Oxford and London.  Nicholas Morieson holds a Ph.D. in politics from the Australian Catholic University, Melbourne, and a Masters in International Relations from Monash University. He is the author of Religion and the Populist Radical Right: Christian Secularism and Populism in Western Europe, and a Research Fellow at the Alfred Deakin Institute for Citizenship and Globalisation.

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском Summary • Since Russia’s full-scale invasion of Ukraine, the EU has made strengthening energy sovereignty – its own and that of its eastern neighbours – a strategic priority. • Along with Ukraine and Moldova, the EU has created an elaborate legal and institutional framework that provides a platform for energy cooperation. • Through this framework and other measures, the EU and member states have helped significantly strengthen the energy sovereignty of Moldova and Ukraine, in particular helping them to diversify away from Russian fossil fuels and synchronising their electricity grids with that of the EU. • But when it comes to the cleanness and efficiency of their energy, Moldova and Ukraine are still underperforming, despite their potential for green energy generation. Improving the cleanness of their energy would also help strengthen the EU’s energy sovereignty, increasing the mutual benefits of closer energy cooperation. • Ukraine’s vast gas reserves and extensive gas infrastructure, along with its potential for green hydrogen production and the significant development of renewable energy sources in both countries offer opportunities for cooperation with the EU, which could enhance both its energy security and decarbonisation efforts. Introduction Since the beginning of Russia’s war on Ukraine, strengthening energy sovereignty has become one of the most strategic foreign policy goals of the European Union, its member states, and many other countries. Before the war, Russia was the EU’s largest source of imports of crude oil and petroleum products and in 2021 the state-owned energy corporation Gazprom accounted for 41 per cent of the EU’s gas imports. In the aftermath of the invasion, the EU and member states scrambled to reduce their dependency on Moscow for energy supplies, diversifying their suppliers of oil and gas. In 2023, Gazprom’s share of the EU’s gas imports fell to just 8 per cent. But the EU also has a clear interest in strengthening the energy sovereignty of its neighbouring countries, especially of Ukraine and Moldova on its eastern border. The stable functioning of the energy systems of neighbouring countries is one of the cornerstones of their security, and therefore the stability and security of the EU’s immediate neighbourhood. The European Commission has thus identified supporting Ukraine and other countries that are directly or indirectly affected by Russian aggression through long-term international partnerships as among the most important objectives of the EU’s external energy policy. Energy cooperation is also a powerful tool for integration. Energy sovereignty should not be equated with state energy autonomy or autarky; international cooperation within alliances or integration relationships such as the EU is an important component. Political allies can be reliable and secure suppliers of energy resources to import-dependent countries – the United States and Norway, for example, play such a role for many EU countries. The development of energy infrastructure links for gas or electricity between partner states, such as the EU and its eastern neighbours, would enable them to provide mutual support in times of crisis. The EU’s desire to strengthen energy sovereignty throughout its neighbourhood is first and foremost related to the need to reduce dependency on Russia and aid the integration of its neighbours. But strengthening energy sovereignty will also require a reduction in fossil fuel consumption, and is therefore closely linked to achieving one of the EU’s other major strategic goals of climate neutrality by 2050. The diversification of fossil fuel supply sources, while important, is not a long-term solution to the problem of energy sovereignty. Amid the current geopolitical uncertainties and the growing threat of climate change, decision-makers in the EU and in neighbouring countries need to now consider green energy and efficient energy use for a comprehensive approach to energy sovereignty. By strengthening its and its eastern neighbours’ renewable energy potential and optimising energy consumption, the EU can reduce the overall dependence on external suppliers of fossil fuels. The commission’s external energy policy combines these two goals, stating that the EU’s actions should be oriented towards meeting both short-term needs and long-term goals regarding the implementation of the European Green Deal. For this reason, I propose a broader approach to assessing energy sovereignty, which goes beyond the typical prism of security of supply to encompass four elements: • The level of dependence on energy imports, both fossil fuels and electricity; • The cleanness of the energy sector, determined by the importance of renewable energy in a country’s energy mix and the level of decarbonisation of the energy sector; • The level of energy efficiency; • The energy sovereignty narrative used by the state authorities in policy documents, which reflects the strategic direction of the state’s energy sector. This policy brief uses these criteria to analyse the progress that the EU and its eastern neighbours have made towards strengthening each other’s energy sovereignty so far, and sets out the next steps that they should take. It finds that, to date, the EU and its member states have played an important role in strengthening the energy sovereignty of its eastern neighbours by increasing their energy independence, but that Ukraine and Moldova still underperform when it comes to cleanness and efficiency, despite the direction implied by the states’ energy narratives – in part due to setbacks related to the war. Strategic cooperation formats between the EU and its eastern neighbours Over the last decade, the EU has developed a legal framework for cooperation with Moldova and Ukraine, which enables closer cooperation in various spheres, including energy. This approach fits into the EU’s so-called Team Europe external action policy for the two countries, which means that both EU and member state structures and European financial institutions, including the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), are involved in the process. In total, the EBRD has committed to investing $3 billion in 2022 and 2023 to address the Ukrainian economy’s challenges following Russia’s invasion. Both countries are also associated states of the EU, and their bilateral relations with the bloc, including on energy, are governed by the association agreements, which came into force in July 2016 for Moldova and in September 2017 for Ukraine. The European Council’s decision in 2023 to grant both countries EU candidate status and start accession negotiations has further strengthened the relationship. The EU also invited Moldova and Ukraine to join the Energy Community in 2010 and 2011 respectively. The Energy Community’s main objective is to extend the principles and rules of the EU’s internal energy market to the countries of eastern Europe, the Black Sea region, and the Western Balkans, effectively integrating these countries into the EU’s energy market. Members of the Energy Community are obliged to implement EU energy regulations into their own national legal systems and to strengthen energy cooperation with EU countries. Both Moldova and Ukraine have already adopted several important pieces of legislation on the functioning of the gas and electricity markets. Ukraine has successfully implemented regulations liberalising its energy markets, including certifying independent system operators in the gas and electricity markets, and an independent gas storage operator. Furthermore, at the beginning of 2024, the country’s certified electricity operator Ukrenergo joined the European Network of Transmission System Operators for Electricity (ENTSO-E). Meanwhile Moldova completed the certification of its electricity transmission system operator Moldelectrica as an independent system operator in July 2023 and has taken steps to certify the independent system operator of its gas market. Both Ukraine and Moldova have also adopted the EU’s Regulation on Wholesale Energy Market Integrity and Transparency, which prohibits insider trading and the abuse of market power. In December 2023, Moldova also amended the Law on Natural Gas to help strengthen security of gas supply and storage, further aligning it with the EU’s energy acquis. Towards energy independence The deepening of Ukraine’s and Moldova’s integration with the EU has helped to strengthen their energy sovereignty, helping them in particular to reduce their dependency on Russia. Ukraine and, to an even greater extent, Moldova are dependent on energy imports. In April 2020, Ukraine was able to meet about 65 per cent of its energy needs on its own, while Moldova could only meet about 20 per cent. Although Moldova’s situation has not changed significantly in recent years, Ukraine’s dependence on energy imports fell to 23 per cent in 2022 as a consequence of the decline in the country’s energy consumption due to the war.  Gas Both Moldova and Ukraine have significantly strengthened their energy independence in the gas sector, including through cooperation with the EU and member states. This is particularly the case for Ukraine, whose own gas production now accounts for more than 90 per cent of domestic demand. (As recently as 2010, Kyiv’s dependence on gas imports was over 70 per cent, amounting to 34 billion cubic metres (bcm), which it imported almost entirely from Russia.) According to the 2023 annual data, Ukraine’s gas consumption has fallen by 30 per cent since the start of the war and it now imports gas mainly through Slovakia, but also Hungary, Poland, and Romania (transiting through Moldova). Ukraine’s journey towards independence from Russian gas supplies was, on the one hand, a consequence of political decisions taken by the new authorities in Kyiv, which came to power in 2014 after former president Viktor Yanukovych was overthrown and, in autumn 2015, stopped buying Russian gas. On the other hand, it was made possible by the support provided by EU member states and European financial institutions, which became particularly important following Russia’s full-scale invasion. In the summer of 2022, for example, the EBRD opened a $300m credit line to Ukraine’s national oil and gas company Naftogaz for emergency gas purchases. It also began to cooperate with the Energy Community to provide regular support to Ukraine, including an agreement in June 2023 to guarantee €600m in support for Ukrainian companies operating in the gas, electricity, and hydropower sectors. Unlike Ukraine, Moldova does not produce gas, has no gas storage facilities, and has only trace reserves of its own gas (about 1 bcm as of 31 December 2022), making it completely dependent on gas imports. Chisinau’s success in strengthening its energy sovereignty has nonetheless been impressive: it has significantly diversified its supply sources and achieved complete independence from gas purchases from Russia in December 2022. The EU, European financial institutions, and select member states have played an important role in this regard. The EIB has been financially supporting projects in Moldova since 2008, including those to strengthen energy sovereignty, such as the construction of the Ungheni-Chisinau gas interconnector. But in view of the energy crisis occurring in Europe from 2021 onwards, the EU initiated anti-crisis formats with Moldova as well. For example, the EU-Moldova High Level Energy Dialogue was set up to provide support to Moldova to guarantee the supply of energy resources (especially natural gas) and electricity during the energy crisis, but also to implement long-term energy projects. So far, five rounds of consultations have taken place between the EU and Moldova under this format, through which the partners have discussed crisis support, energy sector reforms, and long-term projects. In October 2021, Poland began supplying gas to Moldova, marking Moldova’s first imports of non-Russian gas in history. In addition to imports from Poland, Moldova managed to launch reverse gas supplies from Slovakia, as well as via the Trans-Balkan pipeline from Romania, and gained access to Ukrainian gas storage facilities, where it could store about 200m cubic metres (m3) of gas. Chisinau’s diversification efforts are continuing, as illustrated by its gas supply agreements with the Greek company DEPA in 2023. Financial support from European institutions, including the EBRD, and member states has also helped to facilitate these diversification efforts by enabling Moldova to finance purchases of gas or electricity from alternative suppliers. In 2022, the EBRD offered a loan of €300m to Moldova, and in October 2023 an agreement was reached for it to provide a further €165m in gas support to the country in the form of loans, with Norway promising an additional €34m gas grant. In addition, in November 2022, the Energy Community Secretariat launched the Energy Community Rescue Scheme initiative to ensure that donors’ financial assistance for Moldova was channelled towards helping the country face the harsh winter ahead. Meanwhile, the Energy Vulnerability Fund, which was established in 2022 by the Moldovan government with support from the EU, Slovakia, and the United Nations Development Programme, played an important role in neutralising the effects of rising gas, electricity, and heating bills in Moldova. Support for Moldova under this mechanism was provided by several European countries including the Czech Republic, Sweden, Italy, and Switzerland. Finally, in 2022 the EU created the energy platform for member states and countries such as Moldova and Ukraine, which is supposed to combine demand, coordinate the use of infrastructure, and facilitate negotiations with international partners for joint purchases of gas and hydrogen. Through this initiative, Ukraine and Moldova have taken part in tenders organised by the European Commission and received 100 per cent and 80 per cent respectively of the volumes requested after the first round of purchases. Oil When it comes to oil, both Moldova and Ukraine are highly dependent on imports, but EU countries have gradually replaced Belarus and Russia as their main suppliers since February 2022, thereby helping to strengthen their energy sovereignty. Moldova is 100 per cent dependent on imports of oil and petroleum products from third countries, with Romania now mainly supplying it with oil products. As a result of the war and Russia’s continued attacks on critical Ukrainian energy infrastructure, including storage facilities for petroleum products and oil, Ukraine has not been able to produce petroleum products on its own – its last operating refinery was closed in April 2022. These products are particularly sensitive for Ukraine, not just for civilian use, but for military needs. Despite its consumption of petrol, diesel, and liquefied petroleum gas falling by 25 per cent, 30 per cent, and 40 per cent respectively from 2021 to 2022, Ukraine has become more dependent on imports – 93 per cent dependent in 2022 compared with 77 per cent in 2021.[1] In 2021, Belarus accounted for about 43 per cent of Ukraine’s gasoline imports, and Belarus and Russia together accounted for about 62 per cent of its diesel imports.[2] In 2022, Ukraine significantly reduced imports from Belarus and Russia, and increased those from Poland, Romania, Bulgaria (these three countries covered 51 per cent of Ukraine’s diesel import needs in 2022), Turkey, Lithuania, Moldova, Greece, Hungary, and several other countries.[3] In 2023, Ukraine did not import petroleum products from either Belarus or Russia.[4]   Electricity Although Moldova and Ukraine are in completely different positions in their efforts to ensure a secure electricity supply, the synchronisation of the two countries’ power grids with the EU system in March 2022 significantly increased their energy sovereignty in this area. This was particularly important for Moldova, where 80 per cent of electricity needs are met by the Russian-owned Inter RAO gas-fired power plant located in the separatist region of Transnistria. In October 2022, following Russia’s attack on Ukraine’s energy infrastructure, Kyiv halted electricity exports to Moldova, leading to some blackouts. Electricity supplies from Transnistria were then completely terminated at the beginning of November. Moldova’s synchronisation with the EU grid allowed it to import electricity from Romania, which in November 2022, met 90 per cent of Moldova’s electricity demand. In June 2023, ENTSO-E increased the capacity of interconnectors connecting the EU with Moldova and Ukraine from 1050 to 1200 megawatts (MW). During the 2022-2023 heating season, around 900,000 households also received subsidies for their electricity bills through the Energy Vulnerability Fund. Although Moldova currently once more imports 70-80 per cent of its electricity from Transnistria, it does so mainly because it is cheaper than electricity from Romania or Ukraine. But the synchronisation of its grid ensures access to alternative sources of supply, minimising the risk of energy blackmail from Russia. In the long term, support from European financial institutions will be important in strengthening Moldova’s security of electricity supply. From 2023 to 2028, the priority of the EBRD’s financial support to Moldova will be fostering energy resilience, including funds for the modernisation of electricity grids. Although Ukraine is essentially self-sufficient in electricity supply, synchronisation with the EU grid has proven important for Kyiv too, enabling it to import electricity from EU countries in crisis situations related to Russian attacks. This has been especially helpful given that in March 2022 Russia captured the important Zaporizhia nuclear power plant, which was responsible for 44 per cent of Ukraine’s total generating capacity from nuclear power plants. In 2023, Ukraine also completed the modernisation of a power interconnector with Poland. The EU Civil Protection Mechanism, established back in 2001, proved to be an important crisis mechanism in the context of meeting Ukraine’s short-term energy needs, especially for electricity. As of 31 January 2024, more than 5,900 power generators have been sent to Ukraine via the mechanism, including 2,347 from the EU’s own rescEU reserve stockpiles. In addition to generators, the EU has been delivering other vital energy supplies to Ukraine including transformers, autotransformers, high-voltage equipment, and LED light bulbs. The EIB – which has supported various energy projects in Ukraine since 2007 – has played an important role since the outbreak of the war, funding energy grid projects and repairing the damage inflicted by Russia to energy infrastructure. In December 2023, for example, it provided €133m to enhance the reliability of hydroelectric power plants. Within the Energy Community, the Ukraine Energy Support Fund and the Ukraine Support Task Force have proven to be extremely important in ensuring Ukraine’s energy security during the war, with the Ukraine Energy Support Fund alone providing over €400m in support by December 2023. Under the Ukraine Support Task Force, as of October 2023, 22 EU countries had made nearly 100 deliveries to Ukraine, including power transformers, cables, generators, transportation vehicles, and other equipment crucial for supporting the electricity sector. The Energy Community has also launched the Ukraine Energy Market Observatory, which will closely follow and review all developments related to the broader energy market and corporate governance in Ukraine. Finally, in March 2023, the Energy Community Secretariat signed two memorandums of understanding with the Ukrainian authorities: one on increased cooperation in rebuilding Ukraine’s energy sector and another on the coordination of activities in the area of humanitarian aid for the district heating, water supply, and buildings sector of Ukraine. Green credentials With the help of the EU, member states, and financial institutions, Ukraine and Moldova have been able to dramatically strengthen their energy sovereignty in terms of energy independence. However, their progress towards energy cleanness and efficiency – two other important components of energy sovereignty – has been less impressive. Cleanness Both countries, but especially Moldova, perform poorly when it comes to the share of renewables in their electricity generation. In 2022, renewables accounted for only 15.8 per cent of Ukraine’s electricity generation and 7.1 per cent of Moldova’s electricity – far below the EU and world average of 38.4 per cent and around 30 per cent respectively in 2022. The share of renewables in Moldova and Ukraine also includes the production of electricity from large hydroelectric power plants, whose operation is not fully carbon neutral. However, the development of the renewable energy sources (RES) sector in Ukraine was beginning to gain momentum before the outbreak of the war. At the beginning of 2022, the total installed RES capacity (connected to the grid) reached 9.5 gigawatts (GW) – excluding 0.6GW of RES capacity located in the territories temporarily occupied by Russia before 24 February 2022. About $12 billion was invested in the Ukrainian RES sector between 2009 and 2021 from a variety of sources, including the EBRD, the Black Sea Bank for Trade and Development, and the American International Development Finance Corporation. But, during the first six months of the war, Russia destroyed between 80 and 90 per cent of the generating capacity of wind power plants and around 30 per cent of the capacity of solar power plants in the country, as well as around half of the transmission lines and facilities for the production of electricity in Ukraine. Ongoing military activities, including Russia’s continued attacks on energy infrastructure, are significantly hampering Ukraine’s ability to rebuild these capacities. In an attempt to address this, the G7+ Coordination Group – established in November 2022 and including the Energy Community as well as the EU and its member states – has established a Clean Energy Partnership with the Ukrainian government to support the sustainable recovery and reconstruction of Ukraine, which was officially inaugurated at COP28 in December 2023. Its aim is to support the creation of a modern, secure, decentralised, and cleaner energy system in line with Net Zero in Ukraine and to better integrate the country into the EU. The parties are to support Ukraine in attracting private investors to develop projects to reduce Ukraine’s dependence on fossil fuels, in line with the EU’s energy and climate policy goals. In Moldova, the low share of RES in the energy mix results from a historic lack of interest in projects in this sphere on the part of the authorities. Under the pro-European government led by the Party of Action and Solidarity, which came to power in 2021, this situation has begun to change. The government has expressed interest in accelerating Moldova’s energy transition through the development of renewable projects and is gearing up to initiate the inaugural renewables auctions in the country (between April and June 2024), through which it aims to acquire 105MW of wind power and 60MW of solar projects.  When it comes to the levels of carbon in its electricity, Ukraine boasts much better results. In 2022 the carbon intensity of electricity generated in Ukraine was 271.4 grams of carbon dioxide-equivalents per kilowatt-hour of electricity (gCO2e per kWh), below the EU and global averages of 291.9 gCO2e per kWh and 490.1 gCO2e per kWh respectively. After two years of war, the carbon intensity in Ukraine has dropped further to 194.4 gCO2e per kWh. The large share of nuclear energy in Ukraine’s energy mix (60.5 per cent in 2023) – one of the largest shares globally – primarily accounts for the low carbon footprint of its energy sector. Moldova’s electricity has a much higher carbon intensity, 871.7 gCO2e per kWh in 2022, well above the EU and global averages. Moreover, the energy intensity (the amount of energy required to produce one unit of GDP) in Moldova is 3.4 times higher than the average in EU countries. Buildings account for 58 per cent of the total final energy consumption in Moldova, of which non-residential buildings account for 17 per cent. This makes improving energy efficiency in this sector of crucial importance.  Energy efficiency Both countries also face challenges to improve their energy efficiency, although Ukraine is doing much better than Moldova in this field. According to Energy Community reports, Ukraine’s primary energy consumption and final energy consumption in 2020 were below the targets set for 2030. In the case of Moldova, on the other hand, the 2021 statistics show that both primary and final energy consumption were just over 10 per cent above the 2030 targets. Ukraine’s good performance is largely a consequence of the war and the subsequent drop in electricity consumption of around one-third. Nonetheless, Ukraine is still struggling with high energy intensity in some sectors, notably related to residential buildings, 85 per cent of which date from the Soviet era. Before the invasion, the average level of energy consumption in households was two to three times higher than that in the EU. On top of this, gas plays a significant role in the heating sector, with around 80 per cent of households in Ukraine relying on heat supplies from gas-fired power stations. While the war makes it difficult for Ukraine to implement systemic measures to improve energy efficiency, Ukrainian authorities had integrated this aim into their energy strategy even before Russia’s invasion. In 2018, they established the Energy Efficiency Fund, in close cooperation with the EU and Germany. Since 2014, the EU has also allocated grants under the European Neighbourhood Instrument to support reforms in Ukraine, including those aimed at improving energy efficiency. Ukraine has made significant progress in fulfilling its obligations under the association agreement with the EU regarding the adoption of European energy efficiency legislation. For example, it has developed and enacted a legislative framework to support energy efficiency, including to establish energy-efficient practices across various sectors and reduce energy consumption in buildings. Ukraine is also aligning with European standards by promoting “nearly zero-energy buildings” through the adoption of the Concept and National Plan, which outlines the gradual implementation of regulations over the next five years, followed by new construction requirements after 2025. Moldova adopted an amendment to the energy efficiency law in May 2023, establishing a legal framework for comprehensive planning via the National Energy and Climate Plan. However, it is yet to implement energy efficiency measures, especially according to standards prepared by international institutions. For example, the UN Economic Commission for Europe (UNECE) has prepared a special guide for the implementation of energy efficiency measures and the valorisation of renewable energy sources for public sector buildings. The Energy Community Secretariat has played an important role in the creation of further instruments for energy cooperation between EU member states and the EU’s neighbours which encompass energy efficiency. For instance, EU4Energy – an initiative created jointly with the Council of European Energy Regulators and the International Energy Agency and launched in 2016 – is focusing on Moldova and Ukraine, alongside Armenia, Azerbaijan, Belarus, and Georgia, in the current second phase of the programme (2021-2025). The initiative is designed to support the aspirations of focus countries to implement sustainable energy policies and foster cooperative regional development of the energy sector. The European Commission’s Covenant of Mayors for Climate and Energy, which aims to bring together European local and regional authorities to voluntarily contribute to increasing energy efficiency and the use of RES, includes many cities and municipalities from Ukraine and Moldova. The EU and member states have also provided support within the framework of the Eastern Europe Energy Efficiency and Environment Partnership fund, a programme set up on Sweden’s initiative in 2009. Of the total budget (€1,355m), €982m was allocated to 25 projects in Ukraine and €114m to seven projects in Moldova. Funds disbursed under the initiative are used, among other purposes, to improve the energy efficiency of healthcare buildings and other public facilities. Energy narratives The current authorities in both countries have shaped a dominant narrative around strengthening energy sovereignty. In March-April 2023, the European Council on Foreign Relations’ network of associate researchers conducted a survey in all EU member states and Ukraine and Moldova on decision-makers’ approach to energy sovereignty following the outbreak of Russia’s invasion of Ukraine. Questions included the conceptualisation of energy sovereignty, the main challenges and threats in this area, and the measures taken and planned to strengthen it. Our researchers found that the issue of energy sovereignty gained prominence in political circles and public discourse in both countries after the outbreak of the war. The authorities of both countries are taking a comprehensive and innovative approach to energy sovereignty, viewing it not only through the prism of security of supply of raw materials, but also energy efficiency and climate goals. According to statements made by the Ukrainian government, Ukraine plans to become a leading green energy hub in Europe, integrating energy production with green technology development. Ukraine’s minister of energy has underscored the role of renewable energy in enhancing energy security, citing Ukraine’s experience during the war and its contribution to European stability through the synchronisation of power systems. Although the Moldovan authorities have placed special emphasis on the need to find alternative sources of supply due to their longstanding heavy dependence on energy resources from Russia, in the long term they also see energy transition issues as an important component of strengthening energy sovereignty. The government plans to significantly increase the pace of RES projects, aiming to increase their share to 30 per cent of electricity consumption in Moldova by 2030. The elites of both countries also seem to see cooperation with third countries, including the EU and member states, as an important means of strengthening energy sovereignty, not just responding to crisis situations. This is evident in their long-term plans to cooperate with the EU and member states on further projects to strengthen their energy sovereignty. (This applies in particular to the expansion of infrastructure connections.) Moldova is currently focusing primarily on the construction of a high-voltage line from Vulcanesti to Chisinau. This connection is expected to allow the import of electricity from Romania to Moldova on the right bank of the river Dniester within the next few years. (The completion of the line is scheduled for 2025.) Moldova is also interested in the development of joint power generation projects with Romania and in increasing the capacity of the Ungheni-Chisinau gas interconnector. Ukraine is focused on establishing a hydrogen corridor connecting it with Slovakia, the Czech Republic, Austria, and Germany. The corridor would enhance Ukraine’s energy security and integrate it into the European energy network, as well as stimulate the growth of Ukraine’s hydrogen industry and enable Ukrainian-produced hydrogen to seamlessly enter the European energy market. Furthermore, in 2024 both countries (along with Slovakia) joined the Vertical Corridor European gas transportation scheme, which brings together the gas transmission system operators of Greece, Bulgaria, Hungary, and Romania, and aims to enhance energy security and diversification by upgrading their networks to facilitate gas transport from south to north and vice versa. The mutual benefits of cooperation So far, the eastern neighbourhood countries have mainly benefited from the EU’s and member states’ actions in the context of strengthening their own energy sovereignty. However, they both – and especially Ukraine – have the potential to help strengthen the energy sovereignty of the EU and its member states, thanks to their raw materials, RES development, and infrastructure. Ukraine has great potential in the gas sector. Firstly, Ukraine is home to some of the largest proven natural gas reserves in Europe (after Norway), estimated at up to 1.1 trillion m3 in December 2020 (within the internationally recognised borders of Ukraine, that is, including Crimea and other areas occupied by Russia). Ukraine’s gas production is also the second-largest in Europe after Norway and, despite the war, remains at a relatively high level (18.5 bcm in 2022 and 18.7 bcm in 2023). Secondly, Ukraine hosts gas infrastructure that could be useful for the EU as it diversifies its sources of supply. Ukraine’s extensive gas network, which has already enabled the transit of Russian gas for European consumers, could transport gas from the Black Sea or Caspian region via the Trans-Balkan pipeline. This would especially be the case after the construction of a liquefied natural gas (LNG) terminal on Ukraine’s Black Sea coast – which has been under consideration for over a decade. Ukraine could also help Europe to store gas – the country has the largest gas storage system (30 bcm) in Europe and the third-largest by capacity in the world – behind only the US and Russia. This capacity not only ensures Ukraine’s energy security but could also potentially be used by European customers. Some EU companies are already doing this – at the beginning of 2024, around 2 bcm of gas in Ukrainian storage belonged to EU companies, but the potential for exploitation is much greater. Cooperation with Ukraine on hydrogen could further strengthen the EU’s energy sovereignty. According to Ukrainian researchers, with the appropriate development of wind power, Ukraine could produce up to 19.5m tonnes of green hydrogen per year, which would be twice as much as the EU’s annual production plans by 2030. The EU already considers Ukraine one of the three main potential green hydrogen import corridors (along with the North Sea region and the Mediterranean Sea), and in February 2023 signed a memorandum of understanding with Ukraine on a strategic partnership on biomethane, hydrogen, and other synthetic gases. Hydrogen projects that meet the EU’s safety standards can obtain the status of projects of mutual interest under the EU’s Trans-European Networks for Energy Regulation framework. The European Commission’s first list of projects of mutual interest published in November 2023 includes a generic corridor project aiming to transmit hydrogen from Ukraine to Slovakia, the Czech Republic, Austria, and Germany. Both countries, and especially Ukraine, also have high potential for RES development, which could allow the production of clean energy not only for domestic consumption, but in the case of Ukraine also for export to the EU. Theoretically, Ukraine has the greatest RES potential among south-east European countries, although estimates vary. The Ukrainian government assesses the potential for wind energy development in Ukraine off the Black Sea and the Sea of Azov coasts to be 140GW. Ukrainian scholars, meanwhile, calculate that renewable energy sources in Ukraine could provide up to 874GW in total, including solar (83GW), onshore wind (438GW), and offshore wind (250GW). At a conference on the reconstruction of Ukraine organised in June 2023 in London, the Ukrainian ministry for energy presented plans for investments in the energy sector, showing that by 2050 Ukraine wants to have 230GW of solar and wind generation capacity, 38GW of energy storage capacity, and 69GW of electrolyser capacity to produce green hydrogen. Regardless of which of the above estimates is more realistic, it is clear that Ukraine has the ability to produce large amounts of clean energy. According to the UNECE, bioenergy, hydro, solar, and wind generation could account for almost 80 per cent of Ukraine’s total energy generation by 2050. Moldova also has some potential for the development of RES projects, although significantly less than Ukraine. According to a 2017 report from the International Renewable Energy Agency, Moldova could expand its wind power to 21GW and total RES generation capacity to 27GW. From the perspective of the EU, while Moldova will not become a source of clean energy imports like Ukraine, the development of RES projects in Moldova would nonetheless be beneficial, reducing Moldova’s consumption of fossil fuels and thus also relieving the burden on the EU and member states of providing support to maintain Moldova’s gas supply during crises. Ukraine could also develop biomethane projects. According to the Ukrainian National Committee for Energy Regulation, the country could produce 22 bcm of biomethane per year, some of which could be exported to the EU. Indeed, Ukraine already has the necessary resources and infrastructure, including adequate transmission networks that would not require additional upgrades to transmit biomethane. Ukraine also has large feedstock resources and large areas of arable land to develop the potential for agricultural biomethane production. The EU plans to produce 35 bcm of biomethane per year by 2030 and it is estimated that Ukraine could meet up to 20 per cent of this demand. The EU could also benefit from access to Ukraine’s critical raw materials (CRMs), which are important for the EU’s own energy transition. Ukraine holds resources of most of the raw materials on the EU’s latest list of CRMs, including some that the EU recognises as CRMs of strategic importance. For example, Ukraine has the largest reserves of lithium in Europe, used, amongst other things in the production of batteries for electric cars. In 2021, Ukraine also accounted for around 7 per cent of global titanium production and was the world’s seventh-largest exporter of titanium ore. Titanium dioxide is a valuable chemical that can help to improve the efficiency of batteries by extending both their energy-storing capacity and their lifetime, and – alongside lithium – is one of the CRMs that the EU considers to be strategic. Moreover, Ukraine has some of Europe’s largest reserves of graphite, which is used in energy storage technologies like lithium-ion batteries, as well as deposits of nickel and cobalt, which are important in battery production. Its significant potential for green energy production and its status as the country with the largest nuclear generating capacity in Europe mean that Ukraine could also be a source of low-carbon electricity imports for EU member states. Over the last three decades, Ukraine has exported electricity, and continued to export small amounts to Moldova, Poland, Slovakia, Romania, and Hungary even in the first year of the war. Due to Russian attacks on Ukraine’s energy infrastructure, Kyiv was forced to suspend electricity exports in October 2022, but resumed exports of small amounts of electricity to Moldova and EU countries in April 2023. In the long term, especially when the war ends, the EU expects to be able to import clean electricity from Ukraine as part of its REPowerEU initiative. Finally, Ukraine can provide important insights into protecting energy infrastructure across Europe based on its experiences of Russian attacks, which could further strengthen the EU’s energy sovereignty. The security of the EU’s energy infrastructure has become an area of concern, particularly after the damage to the Nord Stream 1 and 2 pipelines, the Baltic interconnector, and the cyber-attacks on Danish energy infrastructure. Hurdles ahead Several factors clearly favour closer energy cooperation between the EU and member states and their eastern neighbours, which would strengthen the energy sovereignty of all parties involved. Both the societies and the current authorities in Moldova and Ukraine are unequivocally in favour of the closest possible integration into Western structures, including the EU. In Ukraine, this has been the case since the victory of the “Revolution of Dignity” against the government’s growing ties to Russia and the ensuing fall of the Yanukovych administration in 2014, while Moldova began to take an unequivocally pro-European course in 2021. Russia’s ongoing war in Ukraine and aggressive policy towards Moldova have further embedded this trend and mean it will likely continue in the long term. The EU has also re-evaluated its strategic thinking, prompting a new focus on its own energy sovereignty and that of its eastern neighbourhood. After Russia’s invasion of Ukraine, the EU worked rapidly to reduce its dependency on Russian energy supplies and to help its eastern neighbours do the same. However, the ongoing war in Ukraine is hampering the intensification of long-term energy cooperation. In the case of Ukraine, the key issue is the scale of the war damage and the estimated amount of money needed to rebuild Ukraine. The World Bank estimates the total cost of reconstruction at almost $486 billion, which is more than two times the size of Ukraine’s pre-war economy. According to the UN, rebuilding Ukraine’s energy sector alone, which has been seriously damaged by constant shelling, will require an outlay of approximately $47 billion. The EU has announced an additional €50 billion in support between 2024 and 2027 through a new financing instrument, the Ukraine Facility. However, these funds relate to investments in all spheres of state functioning, and it is unclear how much, if any, of this sum will be allocated to energy. Considering Kyiv’s plans regarding investments in green energy (RES and hydrogen) and the development of other sectors, including nuclear and gas, the Ukrainian authorities estimate that the country’s investment needs will reach $400 billion by 2050. Yet Moldova and Ukraine have relatively weak investment climates. Before the war, regulatory instability in Ukraine, including changes in taxation rules for the gas extraction sector, among other factors, made it difficult to attract investors. Moldova also finds it difficult to attract investment, particularly from private actors. And, although positive developments are taking place in Ukraine even during the war (for example, a law adopted in Ukraine introducing favourable conditions for investment in the biogas and biomethane sector, including exemption from income tax for five years, land tax, and VAT and customs duties when importing new equipment and components), it remains unclear how easy it will be to introduce and apply legal regulations after the war. Progress in the implementation of energy and climate policy will also be one of the fundamental challenges in the context of Ukraine’s integration with the EU. In addition to this, specific sectors face further challenges. Despite having great potential for hydrogen production, for example, Ukraine so far has neither a hydrogen strategy, nor a legal framework for the development of hydrogen projects, nor adequate infrastructure. The next steps To achieve the greatest possible synergy in the efforts of the EU and its eastern neighbours to mutually reinforce energy sovereignty, both sides will need to continue taking strategic steps in the coming years. For eastern neighbours Adopt a progressive approach to energy sovereignty Ukraine and Moldova need to translate their narratives about energy sovereignty into a determination to implement them in reality. The eastern neighbourhood countries should permanently change their approach to energy sovereignty and think of it not only in terms of security of supply – energy independence from Russia and diversification of supply sources – but also in terms of clean energy and energy efficiency. This applies especially to Moldova, which should aim to finally and permanently sever its energy relations with Russia not only in the electricity sector, but also in the gas sector, in particular by removing Gazprom from the ownership structure of its largest gas company Moldovagaz (in which Gazprom still holds 51 per cent of the shares). The EU and its eastern neighbours should make the improvement of energy efficiency one of their common strategic goals. Moldova and Ukraine should use the funds made available through the EIB and EBRD to implement steps to improve energy efficiency. In particular, they should exploit and expand the opportunities for projects under the Eastern Europe Energy Efficiency and Environment Partnership. They should also strengthen bilateral cooperation with selected EU member states that have declared their willingness to share their experience in this field. On a bilateral level, France, Germany, Poland, and Sweden are implementing or planning cooperation with their eastern neighbours to improve energy efficiency. Meet Energy Community regulations Ukraine and Moldova should continue to implement reforms in the energy sector, including those stemming from their membership in the Energy Community or related to the process of deepening their integration with the EU. Following the end of the war in Ukraine, it will be important that the two countries take measures against the monopolisation of markets by fully liberalising the electricity and gas markets, ensuring OECD-appropriate governance standards for state-owned energy companies, and making further progress in tariff reforms and subsidy provision by phasing out public service obligations and replacing them with social support for vulnerable energy consumers. These measures will serve to deepen the integration of Moldova and Ukraine with the EU and, consequently, help to increase the resilience of their energy systems. Make infrastructure flexible Both Moldova and Ukraine should prepare for new uses of their transmission infrastructure under the new geopolitical conditions. This is particularly important for Ukraine, which for a decade has acted as a transit country for EU countries’ gas and oil imports from Russia. In December 2024, the transit agreements between Russia and Ukraine will expire, and Ukraine will need to find a new use for its significant gas pipeline network in order to maintain it. The Ukrainian gas pipeline network could be used to export Ukraine’s surplus gas production or to transit gas from other sources. For example, Azerbaijani gas exported via the Trans-Balkan pipeline could travel via Moldova and Ukraine to Slovakia or other EU countries. The Ukrainian government was already considering using it to transport imported gas via a potential LNG terminal on the Ukrainian Black Sea coast before the war. Ukraine and Moldova also need to modernise and expand their electricity grids. In the case of Ukraine, this is necessary due to the continuing destruction associated with Russia’s aggression. However, Moldova also needs grid investments, especially if it is to expand its RES potential in the future. Indeed, the expansion of RES potential requires a sufficiently developed grid capable of absorbing electricity produced by wind or photovoltaic installations into the system. Make use of international cooperation formats Given the multiplicity of cooperation formats in which the eastern neighbourhood countries are involved, it is important to build synergies between them. In addition to the formats already in use in relations with the EU, Kyiv and Chisinau should make use of other, supra-regional cooperation formats that have emerged in central and eastern Europe in the last decade, within which some countries have placed a very strong emphasis on strengthening sovereignty. An example of this is the Three Seas Initiative, a project initiated in 2015 by the presidents of Poland and Croatia that brings together 13 central European countries with the strategic aim of preserving and strengthening the unity of the EU and the Euro-Atlantic space through three pillars: transport, energy, and digital. Poland and Romania have already declared their interest and political will to cooperate with countries such as Moldova and Ukraine under the initiative. For this purpose, Ukraine and Moldova could also make use of the European Political Community, to which 47 European countries belong, including non-EU countries such as the United Kingdom and Turkey. For the EU Ensure comprehensive support to Moldova and Ukraine prior to accession In the dynamic geopolitical situation related to Russia’s aggression against Ukraine, the EU should be determined not only to pursue the EU integration process of Moldova and Ukraine consistently, but also to strengthen its own capacities to respond to Russia’s attempts to destabilise these eastern neighbours. Only the accession of Ukraine and Moldova to the EU can create a sustainable foundation for strengthening cooperation and using the full potential of all parties to strengthen energy sovereignty. The EU therefore needs to demonstrate its determination to meet this political commitment to Moldova and Ukraine. It should use all existing multilateral formats available to it to tighten political and economic (including energy) cooperation with its eastern neighbours. Individual member states should also look to strengthen their bilateral cooperation with their eastern neighbours. Poland can play a special role in this respect, above all because it is Ukraine’s largest neighbour and is interested in participating in the reconstruction of Ukraine and particularly committed to supporting Moldova’s reform. The new pro-European government formed in December 2023 could also build a coalition for energy cooperation with its eastern neighbours together with Germany or perhaps more broadly with Germany and France as part of the recently reactivated Weimer Triangle. Initiate joint energy projects The EU should plan further joint energy projects with its eastern neighbours. It is a major weakness that, apart from the hydrogen corridor with Ukraine, the list of projects of common and mutual interest published by the EU in November 2023 does not include others concerning the enhancement of infrastructure links between the EU and Ukraine and Moldova. These are notably lacking in the electricity sector. The implementation of these projects will be important for electricity trade between the EU and neighbouring countries, which could strengthen the energy sovereignty of both the EU and its eastern neighbours. At the same time, it is in the interest of the EU and member states that progressive integration, for example in the sphere of electricity markets, is carried out under fair competition conditions between EU players and companies from Ukraine and Moldova. Contribute to security of energy supply Although the EU’s own raw material potential is limited, some countries have resources that could be used to meet part of the needs of the eastern neighbourhood countries. Romania, which has among the most energy resources in Europe, could play a particularly important role in this context. Its gas resources on the Black Sea shelf are estimated at 80-200 billion m3, which would allow it to secure its own needs for about 20 years or, in the medium term, act as an alternative to Russian supplies to other countries in the region, such as Moldova. When it comes to electricity production, Romania boasts a diversified energy mix and a well-developed network of interconnections with neighbouring countries that can operate in two directions (for import and export purposes). Due to its location, Romania could also play the role of a transit country for the transmission of energy resources (for example, gas via the Trans-Balkan gas pipeline) or electricity from third countries. EU member states should support Ukraine in continuing to diversify its nuclear fuel supply sources. Those that have nuclear power in their own energy mixes, including Bulgaria, France, Romania, Slovakia, and Sweden, can provide logistical support for the transport of nuclear fuel from alternative sources, and be partners for enhancing cooperation in the nuclear sphere after the end of the war. The so-called nuclear alliance that has emerged in the EU under the informal leadership of France could be useful in this regard, supporting partnerships with Ukraine to implement joint nuclear projects. Improve eastern neighbours’ energy efficiency In its external energy policy strategy, the EU calls for energy saving and energy efficiency to become priorities on a global scale. It should therefore support neighbouring countries to improve energy efficiency. As postulated, among others, by participants in the Green Deal Ukraine project, the EU and its member states should help their eastern neighbours to develop robust standards for energy efficiency and building materials for both new and renovated buildings, spanning residential and non-residential sectors and the entire construction process. These standards should include monitoring energy efficiency for components and the building process to align with evolving EU efficiency regulations, promoting sustainable practices and long-term decarbonisation goals. Increase investments in the region Energy should become one of the key areas of cooperation to strengthen Moldova’s and Ukraine’s sovereignty and thus their resistance to aggressive, destabilising actions by Russia. Although the EU has so far provided significant financial assistance to Ukraine and Moldova, both directly and in cooperation with European financial institutions, the scale of the needs (especially in Ukraine) requires further efforts in this area. Investment either directly by the EU or by companies from EU countries in Ukraine’s RES sector, the hydrogen corridor, or Ukraine’s gas infrastructure could strengthen EU energy sovereignty by ensuring a secure supply of clean electricity or gas supplies, which will still be needed by EU countries over at least the next decade. To this end, the EU should make use of and provide organisational and expert support for recently created instruments such as AidEnergy – an electronic platform established in March 2023, whereby the EBRD in partnership with other donors and international financial institutions and the Ukrainian Ministry of Energy create a centralised list of energy sector needs. The platform is intended not only to identify the current needs of the Ukrainian energy sector, but also more long-term needs. Considering the long-term investment needs of Ukraine’s energy sector, the EU could also provide support through financial guarantees for the most strategic projects. EU member states and institutions should also continue efforts to confiscate frozen Russian assets, which could be used for the reconstruction of Ukraine, including investments in the energy sector. The law adopted by the EU in February 2024 to set aside windfall profits made on frozen Russian central bank assets is a move in a right direction in this regard. Acknowledgments The author would like to thank experts and people working in the energy sector in institutions and companies in Poland, but also in Ukraine, Slovakia, and Germany, for discussions on the topic covered in this policy brief. Special thanks are also due to those who provided comments on the first version of the text, in particular Susi Dennison. The author would particularly like to thank Flora Bell for her pleasant and fruitful collaboration in editing the final version of the text, especially for her very valuable suggestions, questions, and comments. Thanks are also due to Nastassia Zenovich for the beautiful graphics included in the text. References [1] https://ecfr.eu/publication/energising-eastern-europe-how-the-eu-can-enhance-energy-sovereignty-through-cooperation-with-ukraine-and-moldova/#_ftnref1 Argus Eurasia Energy (https://www.argusmedia.com/en), weekly report, by subscription, 23 February 2023. [2] https://ecfr.eu/publication/energising-eastern-europe-how-the-eu-can-enhance-energy-sovereignty-through-cooperation-with-ukraine-and-moldova/#_ftnref2 Ibid. [3] https://ecfr.eu/publication/energising-eastern-europe-how-the-eu-can-enhance-energy-sovereignty-through-cooperation-with-ukraine-and-moldova/#_ftnref3 Ibid. [4] https://ecfr.eu/publication/energising-eastern-europe-how-the-eu-can-enhance-energy-sovereignty-through-cooperation-with-ukraine-and-moldova/#_ftnref4 Argus Eurasia Energy (https://www.argusmedia.com/en), weekly report, by subscription, 22 January 2024. This policy brief was first published on 11 March by the European Council on Foreign Relations (ECFR)

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском Although the gesture from Spain, Ireland, and Norway has been welcomed by Palestinian authorities, the past week has highlighted the Zionist determination to obliterate any possibility of a genuine Palestinian state. Pedro Sánchez announced early this morning what has been awaited since it was announced almost a week ago: the recognition of the Palestinian State, which, in the words of the Prime Minister, "must be a viable state, with the West Bank and Gaza connected by a corridor, with East Jerusalem as its capital, unified under the Government of the Palestinian National Authority," he stated. The president also sought to appease Zionist opposition and dispel accusations of supporting Hamas: "This is a decision that is not against anyone, least of all against Israel, a friendly people whom we respect and appreciate, and with whom we want to have the best possible relationship. This decision reflects our outright rejection of Hamas." The announcement of the recognition of the State of Palestine will be made, as the president communicated in the press conference, after it is approved today by the Council of Ministers. Meanwhile, the coalition government partner, ‘Sumar’, has welcomed this step, reminding that other actions are still necessary. "Arms embargo, suspension of diplomatic relations, supporting ICJ measures, and supporting the South African denunciation," have been enumerated in its X account. Today, May 28, 2024, was the date that Spain, Norway, and Ireland had marked on the agenda to take this diplomatic step in support of the Palestinian people. Ireland, for its part, will proceed with the recognition of the State of Palestine following a parliamentary debate to be held during the day. The decision taken by these three European countries, made public last Wednesday, May 22nd, joins them with the 144 countries that already recognized the State of Palestine within its 1967 borders, following the commitment to the coexistence of two sovereign states that can peacefully coexist, a principle underlying the Oslo Peace Accords of 1993, and which, however, three decades later, seem unrealistic given Israeli policies of colonization of the West Bank, isolation of Gaza, and appropriation of East Jerusalem, the territories that should compose an already disjointed Palestinian state. The Spanish recognition of Palestine as a state — a recurring commitment made by the PSOE that has taken time to materialize — coordinated with Ireland and Norway, implies that European countries, traditional allies of Israel, are joining what the Global South and colonized peoples had largely done decades ago. In Europe, Sweden took that step in 2014, many years after several countries in Eastern Europe recognized the Palestinian state in 1988, before the fall of the Berlin Wall. The former Czechoslovakia is a striking case; while the Czech Republic considers this recognition no longer valid, Slovakia reaffirms the decision made in the 1980s. Currently, Belgium, Malta, and Slovenia are other European states that have expressed their intention to recognize the Palestinian state, without specifying a specific date. For Israel, it is important that this trend does not spread. Zionist Foreign Minister, Israel Khan, wasted no time in attacking the Spanish government (again) on social media for its decision, accusing the prime minister of being complicit in "inciting the murder of the Jewish people and war crimes." The decision of the heads of government of Ireland, Norway, and Spain came after the United Nations General Assembly passed a resolution for the recognition of the Palestinian State, calling on the Security Council to accept Palestine as a full member after the US veto. The gesture of these three European countries has been welcomed by the Palestinian authorities, it responds to a historical demand, and contributes to put pressure on those countries that claim to advocate for the two-state solution but have not yet recognized Palestine as such. But beyond its symbolic value, for now, it doesn't seem likely to change the reality of the Palestinian people in Gaza, the West Bank, or East Jerusalem. In fact, Israel has punished Palestinians precisely after the decision of the three European countries: for example, by prohibiting the Spanish consulate in Jerusalem from assisting Palestinian individuals. On the other hand, the fact that most states recognize a Palestinian state has not translated into anything resembling its materialization: many of these states are also important allies of Israel, as emphasized by Sánchez himself this morning, recalling their closeness to the Zionist state. However, Israel, with its foreign minister at the forefront, has not ceased its attacks on Spain, Ireland, and Norway in the last week: in addition to recalling their ambassadors for consultations in the European states, there has been a constant response on social media, with videos accusing the three states of collaborating with Hamas. Meanwhile, violence against Gaza and the West Bank has intensified. Last Sunday, Israel attacked refugee camps in Rafah, leaving around fifty Palestinians dead and causing global outrage at the images of people burned alive, including children. It seems that in response to the symbolic gesture of recognizing Palestine, Israel continues with its plan to make a real Palestinian state impossible. In yesterday’s report (May 27th), the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) pointed out that one million people have been forced to flee again, following Israel's ground invasion of Rafah on May 6th. Meanwhile, the Ministry of Health in Gaza has already reported over 36,000 deaths and more than 80,000 injuries, which, along with the missing persons, would account for 5% of the Strip's population. The United Nations has warned that it will take at least 80 years to rebuild Gaza. The fact that Israel is ravaging Palestine doesn't seem to concern the opposition as much as the worsening of bilateral relations with the Zionist state. While the leader of the opposition, Alberto Núñez Feijóo, stated yesterday that the government's decision "empowers" Hamas, Isabel Díaz Ayuso echoed a similar sentiment, saying, "They are calling for the extermination of Israel and are justifying what Hamas terrorism intends against that state. The offenses from the Government are continuous (...) The State [of Israel] will not respond with flowers," said the president of the Community of Madrid yesterday after the publication of a video released by Israel in which, with flamenco music in the background, it was reiterated that Hamas appreciates Spain's decision. But the recognition of the Palestinian state is not the only open front against the Zionist state: following the ICJ's order to halt the offensive against Gaza, the EU convened a meeting with Israel for the first time yesterday, and mentioned a tool that the EU has had from the beginning, the review of the preferential agreement between Brussels and the Zionist state. Meanwhile, civil society expands its mobilizations; yesterday, demonstrations condemning the bombings in Rafah took place worldwide, overflowing in cities like Paris. Meanwhile, the momentum continues from the encampments, which, as seen in yesterday's action at the Polytechnic University of Madrid, are bringing to light all the ties with Israel, achieving concrete victories, and exposing the extent of the economic interests and networks of influence that Israel has deployed in the university sphere. The article was translated and licensed under CC BY-SA 3.0 ES (Atribución-CompartirIgual 3.0 España).