Amelia Hadfield and Tea Zyberaj / Jan 2023
As the old adage goes, prediction is always tricky, especially regarding the future. This blog outlines a few areas that are likely to provide ongoing challenges, new tasks, and novel opportunities for the European Union, in its foreign affairs, its regional and institutional challenges, and its never-ending list of member-specific demands.
In terms of geopolitics, 2022 has been a monumental year. Ukraine has acted as shield for the EU and buckler for the world against both the endlessly self-aggrandizing Putin, acquisitive Russian foreign policy, and mercurial energy policy. The first, most crucial response by President Zelenskyy not to take up the US offer of evacuation but to stand and fight, has had the most enormous consequences, both for his own people, but for Europe and indeed the world. The conflict has triggered quite possibly the greatest security crisis in Europe since the Cold War, impacting financial markets, energy security, food security, human security, and global supply chains. As the global ramifications of the war take hold, the United States and Europe remain committed to restoring Ukraine’s territorial integrity and sovereignty. With some of the world’s largest economies imposing sanctions in attempts to deter further Russian aggression, there appears to be little let up in terms of east-west relations. Indeed, the prospects for negotiation remain bleak: Russia’s ongoing aggression in Ukraine is likely to continue. The knock-on effects are likely to continue as well, including both global and regional trade tensions, ongoing efforts to restructure energy security and energy policy, as well as tackling rising inflation.
A House of One’s Own
The EU has done well to crack down – albeit tardily – on corruption and rule of law problems in member states, specifically Hungary, as well as its own Brussels institutions. The right-wing and Eurosceptic government of Viktor Orbán has been busy dismantling the structures of democracy within Hungary, along with specific opposition to the judiciary, and the free media, as well as establishing and embedding aspects of endemic corruption. The main method has been to corruptly use and redistribute primarily EU funds designed to support Hungary’s development, and post-pandemic recovery. Indeed, Orbán’s government has conspicuously and continuously failed to fulfil both EU based rules, leading Brussels to adopt a set of hard-line measures against Budapest.
The European Commission has threatened to withhold 22 billion euros of EU cohesion funds that Hungary desperately needs until the Hungarian government reinstates its commitments and meets the conditions related to judiciary independence, journalistic and academic freedoms, migration and asylum rights, as well as LGBTQI rights. This domestic embargo does two things. First, it will further isolate Hungary, as well as yielding grim economic dividends. Second, it demonstrates Brussels’ increasingly robust determination not to put up with further challenges to its foundational principles via undemocratic approaches, coupled with corruption and graft. Pushing back against the grave risk of internal decay, Brussels has at last ‘done something’.
Nevertheless, Laszlo Csaba, a conservative economist and former member of an informal grouping of Orban’s advisers, has warned that even though the country finds itself in an unprecedented state of crisis, otherwise termed as a “crisis of the Orban model”, the EU should wade off illusions about the Hungarian government’s willingness to make compromises over the rule of law dispute. Orban and his party retain a stable electoral base, as well as a highly centralized political system which may prove to be resilient in the face of this crisis. It is expected that Orban will attempt to manoeuvre his way through the crisis using a two-pronged strategy, resorting to “radical, realistic measures, while at the same time continuing to talk big”.
Sweden and Spain: The Two 2023 Presidencies
As Sweden takes over the rotating presidency of the European Council, concerns have been raised over the presence of far-right Sweden Democrats in the new coalition government and how this will impact Sweden’s legislative agenda and thematic priorities during the first half of 2023. Sweden’s new minority government will have to continue where the Czech presidency left off, contending primarily with the war on Ukraine and its knock-on effects on European security architecture, energy supply chains and military capabilities. As such, Swedish Foreign Minister Tobias Billström, stated that “Russia’s aggression against Ukraine will be on top of our presidency agenda,” with Prime Minister Ulf Kristersson affirming that “maintaining European unity in our support to Ukraine; continuing to gather countries and resources for Ukraine’s reconstruction; safeguarding international law; demanding accountability; and carefully monitoring Ukraine’s progress as a candidate country” will characterize his country’s leadership of the Council of the European Union.
Whilst these indicate welcoming statements against the backdrop of the war in Ukraine, other issues such as climate change, migration and accession negotiations with the West Balkan states appear to have taken a backseat on the EU’s legislative timetable. Kristersson is set to receive little to no support from the far-right Sweden Democrats, hard-line Eurosceptics and climate change deniers who have historically pursued an anti-migration policy. In this light, Sweden faces a tough task of ensuring Council unity and unanimity on measures concerning Russian sanctions and financial assistance in Ukraine, as well as issues of EU enlargement and accession proceedings.
The second half of 2023 will see Spain taking over the Council steering role. In line with the priorities of its Swedish predecessors, Spain’s Foreign Minister José Manuel Albares has put forth a proposal to hold a mini-Mediterranean summit with the task to “establish a great area of stability and shared prosperity”. This puts the Euro-Mediterranean at the centre of the Spanish presidency priorities, with a focus on protecting EU citizens from the socio-economic effects of the war in Ukraine. Head of the European External Action Service, Josep Borrell, has welcomed Spain’s initiative and the Government’s commitment to the European Project despite the volatility and complexity of the current international order.
European Energy Transformations
After a truly dramatic year of energy changes in which the EU shifted publicly from Russian fossil fuel reliance, placed energy at the heart of sanctions against Russia, and embarked on the complex goal of collective gas purchasing, the EU still has much to undertake. Blending both distinctly strategic energy security goals with long-standing climate objectives, the following three forms of energy legislation are likely to feature. First, the Energy Efficiency Directive: Set against the context of the present energy crisis, and the drive to save both energy and expenditure on energy, the new energy efficiency law, set for 2023, resting on the revision of the 2021 energy efficiency directive to boost overall energy savings targets, targeting demand-side, primary energy consumption by 2030. The directive includes a range of accompanying goals, including contentious ones like the annual energy savings obligation for all EU member states, directly engineering the reduced consumption of oil, gas and electricity. 2023 will need to bring agreement to disagreements between the European Parliament’s 2% target, the Commission’s desired 1.5%, and various Member States demanding “a staged approach with much lower ambition”.
Second, the Green Deal: Striving to be the first climate-neutral continent, in December 2019, the European Commission proposed a new set of ambitious climate, energy, transport and taxation policy initiatives, fit to transform the EU into a modern, resource efficient and competitive economic model. Announced as the European Green Deal for the EU and its citizens, it resets the Commission’s commitments to tackle climate challenges by providing an action plan to becoming the first climate neutral continent by 2050. Finally, the EU’s much-touted ‘Fit for 55’: In accordance with the priorities of the European Green Deal, the European Commission proposed a broad, climate law package, based on decarbonisation by driving down CO2 emissions by 55% by 2030 (against 1990 levels).
2023 has begun positively, with signals on redrafting the complicated Northern Ireland Protocol from returning Irish PM Leo Varadkar. While Varadkar suggested that aspects of the post-Brexit deal were overly exacting, resulting in the non-compliance or impartial enforcement. A central feature of the UK’s 2019 Withdrawal Agreement with the EU, the protocol currently sees “Northern Ireland subject to EU sanitary and regulatory standards on goods while the rest of the U.K. exited”, with the result that “goods still flow freely across the Irish land border in both directions but at the expense of tougher controls on goods imported from Britain”, which in turn has given rise to anger and even violence between key factions, including the Democratic Unionist Party (British unionists). In Varadkar’s view, with 85% percent of goods arriving from Britain in Northern Ireland remaining within its territory rather than moving into the Republic of Ireland, there is scope for change.
Although the Commission’s initial response to Varadkar’s comments was cool, improvements in recent discussions between Varadkar, European Commission President Ursula von der Leyen and the Commission’s lead negotiator, Maroš Šefčovič, suggest there is room for improvement. 2023 will therefore be the year of the deal, whether this means new negotiations bringing about a wholly new deal, a piecemeal approach producing a deficient but workable halfway house, or an agreement to eschew discussions entirely. Both governance in Northern Ireland itself (given its collapsed state) as well as broader trading arrangements between mainland Britain, Northern Ireland, the Republic of Ireland, and the EU mainland, hang in the balance.
2022 highlighted two key trends, both bound to continue in 2023, possibly with interesting effects. First, that the overall impact of Brexit is beginning to be identified and felt independently from Covid and post-pandemic damage; second, that there is a change in attitude amongst the wider public, and key decision-makers, regarding the benefits, and indeed wisdom of Brexit. 2023 will therefore see whether the latter somehow drives changes, and in the former by reconsidering key approaches to the EU. Shifts in attitudes from confidence, to pragmatism, to reflection are not trivial. Likewise, an appreciation “of how much damage leaving the EU has done to Britain’s economy” requires an honest acceptance of its poor post-pandemic performance, and the areas where changes can still be wrought. While optimists may suggest this heralds a new dawn with the EU, 2023 is more likely to see practical changes addressing not merely the disruption associated with new trade barriers, but the nature of the barriers themselves. As outlined by a recent report by the Centre for European Reform, using estimates “based on the ‘doppelgänger’ method, in which an algorithm selects countries whose economic performance closely matches the UK’s before Brexit”, with Brexit impacts producing likely sectoral depressions, where “investment is 11 per cent lower; goods trade, 7 per cent lower; and services trade is around the same”. Trade, inward investment, GDP, gross fixed capital formation, goods exports plus imports have all taken a hit, highlighting areas of possible attention in 2023.
For the EU, this presents a variety of opportunities, depending on its preferences and approach. Certainly, a renewed appreciation of Brexit itself opens a new negotiating approach, which should lead from renewed cooperation, rather than indulging in ex-post pride or reprisal. For the UK, sensible approaches require rethinking the temptation of a legislative bonfire by scrapping a host of EU regulations currently enshrined in British statue. Parliamentary involvement – in both houses – is crucial to ensuring that progressive legislation with positive impacts Britain can sensibly be retained, alongside while contemporary legislation. Failing to do makes a mockery of the entire, and frankly ill-advised ‘take back control’ restorative at the heart of Brexit.
Qatargate : Lessons Learned?
A number of raids conducted by the Belgian federal police on Friday, the 9th of December, led to the arrest of six members of the Brussels establishment, each held on preliminary charges of corruption, criminal organization and money laundering. Amongst them, the Qatari campaign of influence has ensnared the former European Parliament vice president Eva Kaili, following a home search that yielded 150,000 euros in notes. Confronted with the allegations of having accepted payments in exchange for doing the bidding in Parliament of Qatar, Kaili has been called the “Trojan horse of corruption and foreign interference” by German lawmaker Hannah Neumann.
Michiel Van Hulten, chief of Transparency International, has defined the proceedings as “the most egregious case” of corruption to hit the European Parliament, calling into question the integrity of the democratic principles underpinning the very foundations of the European project. Indeed, president of the European Parliament, Roberta Metsola, addressed the corruption scandal in a preliminary crisis session, stating that “European democracy is under attack”. The European Parliament has long been under the surveillance of transparency campaigners for its lax financial rules, weak enforcement mechanisms, and complete lack of ethics oversight, which have seen lobbyists exert their campaign of influence and make their voices heard in one of the EU’s most high-profile forums for public debate. Metsola has addressed these concerns, promising a renewed plan of action to reinforce ethical standards, protect whistle-blowers and restrict access to Parliament. Moreover, the Von der Leyen Commission has reaffirmed its commitment to speed up plans for an independent ethics body that would apply to whole of the EU. However, there have been questions over the legislative utility of the EU’s new watchdog, due to lack of inbuilt investigative and enforcement competencies.
European leaders’ response to the crisis is being hampered by the EU’s increasing dependence on Qatar for crucial supplies of gas. Germany’s Economy Minister has affirmed the need to maintain constructive engagement with Qatar, particularly in light of the energy crisis that has been unfolding across Europe following the Russian invasion of Ukraine. However, in view of the upcoming 2024 European Parliament elections, the worry assailing many within Brussels is that failure to address the scandal and crackdown on corruption will serve to fuel Eurosceptic narratives, driving voters into the hands of anti-EU parties.
European Political Community: What Now, Where Next?
The geopolitical instability that has assailed the European security architecture in recent years following the Russian invasion of Ukraine, triggered the October inaugural meeting of the European Political Community in Prague. Attended by leaders of forty-four countries, including Ukraine, the United Kingdom and Turkey, the Prague summit marked a positive attempt at collective political and security cooperation. Indeed, given the scale of the challenges facing Europe, the level and breadth of participation was an achievement in itself, marking the return of the United Kingdom within a continental forum and the consequential warming of EU-UK relations against a backdrop of Russian aggression. Amongst the summit’s notable results, was the de-escalation of a renewed conflict between Azerbaijan and Armenia, as well as initial cooperation with non-EU countries on common infrastructure concerns.
However, by design, the new intergovernmental grouping has many risk factors associated to its lack of preconditions or pressure to agree on common principles, bringing into questions its actual value and ability to achieve concrete results based on well-defined areas of cooperation. Whilst the summit’s pragmatic approach to diplomacy was widely welcomed among its participants, realpolitik appears to have taken precedence over European values and principles. France’s insistence on generating collective security, energy and climate projects based on the principles of democracy and the rule of law clashed with the presence of Azerbaijan, Armenia, Serbia, Turkey and Hungary. Moreover, discussions over collective security within the European continent remain limited in the absence of the United States and NATO. As such, the summit failed to derive concrete solutions in areas like security and energy, concluding instead with open questions.
China : Arrm’s Length or Reconsidered?
A strong sense of déjà vu has pervaded European countries and policy makers as they find themselves once again struggling to coordinate efforts to curb COVID infections and monitor the new variants coming from China. Despite EU efforts at a joint response to Beijing’s U-turn on zero-COVID, the Italian government unilaterally announced its own border control measures on arrivals from China. Nevertheless, EU officials are moving closer to reaching a consensus on pre-departure testing for travellers coming from the Asian country, with an overwhelming majority of member states in favour of stepping up domestic surveillance of the virus, as well as flight wastewater monitoring. The Chinese government has deemed the new measures as “unacceptable”, with foreign ministry spokesperson Mao Ning warning of “countermeasures based on the principles of reciprocity”.
The European Commission has come forth with a promise to “examine whether additional tools are necessary in respect of outbound strategic investments controls”. The events unfolding in Ukraine have been the backdrop to EU decision-making, from its foreign and security policy to its energy policy. This has served to highlight the economic and security implications of trading closely with countries such as Russia and China. Berlin and Brussels have pushed for European outbound investment screening, with particular emphasis on the monitoring of foreign investments by European companies in security-critical industries such as semiconductor or high-tech companies. In line with Europe’s trade defense policy toward China, the overarching aim is to decouple the EU economy from China’s and decrease the bloc’s strategic reliance on countries viewed as hostile.
EU-US Digital Cooperation
In terms of their transatlantic relationships, the US and the EU are facing similar challenges stemming from the rapid development of the digital society and economy. Policy developments and regulation pertaining to online disinformation, data protection and privacy, and artificial intelligence play a central role on both sides of the Atlantic. The European Union and the United States have entered the new year with a shining display of transatlantic digital cooperation. Washington and Brussels have recently outlined a joint position on trustworthy artificial intelligence, as well as emerging technologies such as quantum computing, with hopes to take charge of the development of these technologies as they become standardized.
Following last month’s EU-US Trade and Technology Council meeting in Washington, Tarun Chhabra, senior director for technology and national security at the White House’s National Security Council, reiterated the benefits of improved EU-US digital cooperation and compromise, stating that “discussions helped to move the ball forward and onto a constructive path”. On the other hand, whilst still weary of the recent US legislation on the Inflation Reduction Act, Alejandro Caiznos, member of cabinet to European Commission Executive Vice-President Margrethe Vestager, whom he advises on transatlantic digital issues, welcomed the EU-US piecemeal and cooperative approach to policymaking in the digital sector. Over the coming year, officials from both sides of the Atlantic are expecting to strengthen efforts to push back against Chinese digital financing, inviting other like-minded democracies, particularly the G7 countries, to join their efforts and digital programs on an ad hoc basis.
The EU’s Global Role for 2023
In recent years, there has been considerable talk within foreign policy circles over the EU’s international role in global affairs. In light of the growing instability of the international security architecture, some have called for a European ‘geopolitical awakening’. For those of us who are ‘EU-watchers’, there has indeed been a shift in the EU’s approach to foreign policy which itself reflects the evolving international security environment and the growing complexity of the challenges facing the bloc. In view of the intensification of great power rivalry increasingly the hallmark of the 21st century, the EU has been attempting to reshape its diplomatic approach, positioning itself as an independent actor. As such, the concept of ‘strategic autonomy’ has become a major point of reference in policy debates on the EU’s global actorness this past year. While 2023 is likely to see ongoing use of this term, the real question is whether – and to what extent – it actually takes off.
Possible shifts as to how the EU is beginning to think of itself was interestingly – if quietly - showcased in High Representative Josep Borrell’s recent statements on the EU’s relations with other major world powers, particularly Russia and China. Contextualised against the energy security crisis besetting Europe, the EU’s chief diplomat has repeatedly stressed how the Union must avoid creating new dependencies and offer its own alternative to partner countries so as to balance other players. In his own words: “We are certainly not interested in creating new dependencies,” adding, “We will always have dependencies - we cannot go one day to another from open to closed markets, but we need a balanced approach – we need to learn how to adapt.” Borrell may have been speaking in relation to energy, but ‘dependency reduction’ and aiming for a more balanced diplomatic distribution not only applies to foreign affairs in general, but could have profound effects for how the EU thinks of itself as a strategic actor, capable of variants of autonomy.
In truth, we’ve been here before. Whilst the concept of strategic autonomy was introduced back in 2016 with the release of the EU Global Strategy (EUGS), its operationalization remains unclear even now, yielding opportunities or ‘role ambiguity’ and policy change in terms of where self-sufficiency could be applied. Indeed, at the heart of the strategic autonomy discourse is the conflict between the EU’s vying roles as a market, normative and geopolitical power in world politics, as well as the operational limits of actually being strategic, quite apart from autonomous. The increasing dissonance between the EU’s different and competing self-images and objectives, allows for multiple interpretations of what priorities, strategies and instruments the EU should adopt to respond to crises arising within the multilateral and rules-based order.
Nevertheless, Borrell’s proposal that the EU should use its influence in world politics in “a more transactional way” suggests that the bloc is willing to use its leverage on economic, trade and energy matters more distinctly in the pursuit of strategic political goals. Introduced in the EUGS as ‘principled pragmatism’, this more realist interpretation of EU foreign policy has gained traction in recent years. Indeed, there has been a discursive shift amongst EU foreign policy practitioners, from promoting democracy and European values to promoting resilience and stability. This has been mirrored by Borrell’s recent statement: “We’re not an NGO, we have a certain political mindset, which cannot be imposed because then we risk a reaction to the rejection of the emerging world.”
Nevertheless, Borrell as EU foreign affairs chief, appears to have shifted previous discourses away from overtly realist conceptions of hard power Europe and towards more nuanced understandings of the EU’s role as an actor on the world stage. “We can do a lot using our persuasion capacity, and we have to. Power is not just military power,” Borrell commented. Indeed, the shift to a more pragmatic approach to foreign policy making does not indicate the rejection of liberal ideals - hence the term ‘principled’. In this light, European foreign policy is guided by what is concretely, materially possible as guided by founding principles, within a new consideration of what makes up its strategic environment.
The EU’s response to Russia’s invasion of Ukraine is a prime example of this strategic reorientation. Indeed, when confronted with a rapidly eroding security environment in its neighbourhood, the EU adopted a series of firm measures, amongst which the shipment of lethal weapons to Ukraine and the hard-line sanctions against Putin, highlighting its pragmatic, realist identity. However, the war has also underlined the influential power and attractiveness of the European project. The bloc’s normative projection stands in stark contrast to Putin’s resolutely authoritarian approach. The combination of ‘soft’ civilian approaches to crisis management with more hard edged measures, enables the EU to project a flexible international identity – a comprehensive power rather than a purely strategic or normative actor. That’s the theory, at any rate. Whether Borrell, and the EU can and will move in this direction in 2023, in any of the topics above, remains to be seen.