Europe Update: December 2018

December 11, 2018

(via: Rob Cartwright Photography - WordPress.com)

Global climate negotiations in Poland

 

The Christmas season has started, and so has COP24 in Katowice, Poland; the next round of global climate action negotiations will last until December 15th. As argued before (https://tinyurl.com/y6vjjt3g), climate change is the most urgent of all issues, but lacks fundamental collective action due to structural and psychological inertia and fragmentation of political will. Currently, not only the demand for renewable energy, but also for coal-fired electricity is on the rise. Against the backdrop of two landmark reports published this year (IPCC and US National Climate Assessment), experts will urge more profound actions and a framework for implementing the Paris Agreement. The European Union and China are the main actors, but for China, negotiations will be difficult due to the fragmentation of the EU. The EU wants to drop 40% of emissions by 2030 and has just announced its goal to become CO2 net neutral by 2050. However, no measures have been planned to meet the reduction target of 40%. Many EU countries, such as Germany, will already miss their 2025 carbon reduction targets. In the meantime, large German cities have started banning diesel cars to reduce levels of nitrogen oxides (NOx) and dust emissions. Until 2030, other major European cities such as Rome, Paris, and London will follow, banning both diesel and petrol cars, which emit much more CO2. China has become a leader in climate action but hesitates to take leadership, which was felt in Katowice.

 

Riots in France

 

The riots in Paris and other French cities over the past weeks are expressions of an angry, and economically squeezed middle class whose income is too low to feel stable and too high to be eligible for welfare benefits. The increase in fuel tax was one of the various reasons for the eruption of public anger (although the lion’s share of the cost increase is due to higher prices for crude oil than fuel taxes). For now, Macron has stopped the environmental taxation on diesel and petrol. Such public anger, which started before Macron’s presidency, is connected to the broader discontent amongst a growing number of Europeans, which is politically exploited by far-right and far-left wing populists. Across Europe, nationalist and far-right parties in particular have made significant electoral gains. Some have become leading opposition parties (such as in Germany, Sweden, Finland, Netherlands, France, and Denmark), and others have taken office (such as in Italy, Austria, Hungary, Slovenia, and Poland). The main reasons for increasing public anger are income inequality and stagnation, unemployment and insecure employment, heightened risk of poverty, social exclusion, and the erosion of the dominant cultural identity, attributed to mass migration. Large parts of the public feel that traditional center left/right parties insufficiently cope with the forces of globalization, which has caused a structural decline in political support for globalization in Europe.

 

No-deal Brexit or new referendum

 

After months of negotiation, on November 25th, a 585-page withdrawal agreement was signed by all 27 EU member states to be put in front of the UK parliament for ratification ahead of Britain’s withdrawal on March 20th, 2019, after 45 years of membership. The withdrawal agreement deals with three main issues: citizens’ rights, the £39bn exit payment, and the problem of avoiding a border between Northern Ireland and Ireland after Brexit. It’s unlikely that the House of Commons will approve the deal, which is scheduled for December 11th. Brexit supporters argue that the deal is not what the people voted for; it would keep the UK tied to the EU without any say over its rules. EU remainers argue that the deal is worse than staying in the EU. Although both parties have ruled out a new referendum, an increasing number of MPs across both parties support the option of a second referendum to avoid a hard Brexit. The Labor Party is determined to vote no in hopes of forcing new general elections. Rather chaotic and uncertain times lie in front of the UK and Europe.

 

Europe advocated multilateralism, but G20 lacks policy coherence

 

The EU and the individual EU G20 member counties have always advocated multilateralism and international rules-based trade at the G20 summits. The Western-based international system has guaranteed economic growth and prosperity in Europe. At the G20 in Argentina, Chancellor Merkel welcomed President Xi’s emphasis on strengthening multilateralism and opened global trade. Amongst the G20 members, it was agreed that coordinated efforts are needed to reform the World Trade Organization (WTO) and other multilateral organizations. However, since the G20 was founded to mitigate the disruptions of the global financial crisis 10 years ago, the G20 has become less effective at coordinating economic and financial policies. On the contrary, the G20 lacks policy coherence but experiences the rise of unilateralism and nationalism, which threatens the global order. Usually, the developing and emerging G20 countries have pushed back against the fiscal and economic policies required by the rich economies and demanded fairer globalization and gradual change. Paradoxically, today, the United States—who put the international system in place—has become its biggest opponent due to President Trump’s unilateralist agenda. This development casts doubt about the effectiveness of the G20 summit, which should come as no surprise. Looking at the history of the G7, they already gave up on reaching policy coherence across a much smaller group of rich economies before the establishment of the G20 during times of less complexity.

 

In the meantime, bilateralism remains crucial to avoid further misunderstanding and balance mutual interests. For this reason, Germany’s president, Frank-Walter Steinmeier, is on a six-day visit to China from December 5th. This year, trade between both countries is about to reach an all-time high. Due to the trade dispute with America, China seeks to increase trade and technological exchange with Europe. However, for Germany, as for other EU countries, it poses a challenging situation: they must be careful to avoid alienating either China or America, who is also threatening Europe (Germany in particular) with punitive tariffs on car imports.

 

Europe’s fading security pillar

 

In 1987, Ronald Reagan and Mikhail Gorbachev signed a treaty that banned intermediate-range nuclear and non-nuclear missiles (INF Treaty). This is the only Cold War arms control agreement that has remained enforced until today. For Europe, the INF Treaty is a key yet fading pillar of its security architecture. In October 2018, President Trump warned Russia to terminate the accord because of Russia’s violation, and on December 4th, the US set an ultimatum of 60 days to comply. America’s strategic move is as much directed towards Russia as towards China; neither the US nor the other NATO members believe that Russia will destroy its missiles and launchers. Besides, Russia and America have never fully trusted one another to abide by the treaty. In spite of the strategic importance for Europe, however, at the G20 summit, Chancellor Merkel sought to convince President Trump to further delay America’s pressure on Russia; but the 60-day ultimatum is only delaying an inevitable outcome and manifests America’s unilateralism.

 

For the Trump administration, the treaty also puts the US at a strategic disadvantage against China, which is not bound by the treaty. America is worried about China’s recent proactivity and increase in military spending. China is about to become the largest economy in a few years, but its military spending is only 25% of that of the United States. In comparison, at the height of the Cold War, the Soviet Union was economically much smaller than the US but spent an equal amount of money on its military. Today, America’s military strategy towards China might be unjustified, as China wants to modernize but not catch up with America’s military capability. However, America’s goal is to preempt any future vulnerabilities, as China has shown no interest in joining the INF Treaty.

 

Ukrainian crisis

 

What has further triggered America’s military unilateralism, further deteriorated US-Russian relations, and revealed Europe’s political fragmentation and military dependency on the US is Russia’s ongoing intervention in Ukraine and its sizing of three Ukrainian vessels near the Crimean Peninsula on November 25, blocking an important maritime trade route and further weakening Ukraine’s political and economic stability. This most recent standoff between Russia and Ukraine centers on the continued dispute over Crimea, which started in 2014 when Russian forces invaded Eastern Ukraine and seized the peninsula.

 

Europe cannot afford a military conflict right at its borders, but Europe, and especially Germany, strongly depends on the energy supplied by Russia, which demands another diplomatic balancing act for Germany. Germany’s energy dependency is most likely to increase in the future through the development of the new gas pipeline through the Baltic Sea, which will supply a more stable flow of gas, but which has been condemned by the Trump administration and within Europe. So far, Ukraine has been a key route for carrying and benefiting from Russian gas to Europe, but the new pipeline, Nord Stream 2, will significantly reduce the gas carried through Ukraine, which will further weaken the country.

 

There is no easy solution to the Ukrainian conflict, addressing questions of an independent peace operation, the demarcation of a new border in Eastern Ukraine, and economic and geopolitical interests. This conflict reveals a complex moment in history, which is the emergence of a post-West multipolar world.

 

 

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