Tag Archive for: EU

The EU’s year of fundamental choices

This year was always going to be important for the European Union, given the start of a new EU Commission mandate, a relatively new European Parliament and a change at the helm of the European Council. But recent developments—including the collapse of the German government, the beginning of coalition negotiations led by the far right in Austria, the end of Russian gas flows to the EU via Ukraine and Donald Trump’s victory in the US presidential election—have raised the stakes significantly.

Moreover, Europe confronts a volatile geopolitical environment. Beyond the grinding war in Ukraine, a violent reconfiguration is underway in the Middle East, exemplified by the collapse of dictator Bashar al-Assad’s regime in Syria and Israel’s military campaigns in Gaza, Lebanon and beyond. The Sahel, too, is gripped by upheaval, with countries such as Mali and Niger enduring military rule and intra-communal brutality. Nearby Sudan is in freefall, with widespread violence having led to economic collapse, mass displacement and an escalating humanitarian crisis.

All these developments demand responses from the EU. Among other things, it must recalibrate its approach to Africa, coordinating with allies to deliver support that addresses development, security and humanitarian imperatives. And it must provide increasing support to Ukraine, both to sustain the country’s resistance against Russia and to advance the Herculean reconstruction effort that is already underway.

Such efforts will be all the more important—and more complicated—with Trump in the White House. While it is impossible to say precisely what he will do once in office—his latest panic-inducing fixation seems to be taking control of Greenland—no one should count on the United States’ commitment to support its allies. On the contrary, Trump’s promise to end the war in Ukraine immediately upon taking office augurs capitulation to Russia, underscoring the need for increased EU aid for Ukraine and rapid strengthening of Europe’s defence capacity.

The EU knows well that it must take greater responsibility for its own security: the theme of Poland’s six-month EU Council presidency, which began on January 1, is ‘Security, Europe!’ But if this is to be more than a slogan, the EU will have to boost investment in research and development, pursue strategies to foster innovation and enhance collaboration among member states.

Such initiatives can also bolster EU efforts to tackle declining economic competitiveness at a time when aging populations are straining public budgets and impeding productivity growth in many countries. Stimulating investment in advanced sectors such as artificial intelligence, defence and green energy is essential, particularly given the additional economic strain on the EU implied by the import tariffs that Trump is threatening to introduce.

What the EU must not do is resort to indiscriminate protectionism—including against China. In fact, the EU needs a China strategy that prevents it from being swept into an all-encompassing confrontation and strikes a balance between maintaining mutually beneficial relations, preserving foundational alliances and defending the international order from attempts to destabilise it.

But external developments are just part of the challenge. Internally, Europe is grappling with widespread democratic erosion. While Hungary stands at the vanguard of this trend, it is hardly alone: even France and Germany—the traditional engines of EU integration—appear to be at risk of democratic backsliding. Trump crony Elon Musk is not helping matters, as he backs far-right parties like Alternative fur Deutschland.

There is also considerable disagreement among member states on a range of issues, from the trade deal with Mercosur, which was agreed in principle last month, to threat assessments regarding the Ukraine war. Whereas Poland remains adamant that the war must end with a return to the recognised borders, France is now urging Ukraine to engage in ‘realistic discussions on territorial issues.’ Meanwhile, Slovakia’s Kremlin-friendly prime minister is threatening to cut financial support for Ukrainian refugees in his country.

EU enlargement is another source of tension. Since Russia’s full-scale invasion of Ukraine in 2022, the EU has opened accession talks with Bosnia and Herzegovina, Moldova and Ukraine, and granted Georgia candidate-country status. But the hasty addition of new members would only undermine cohesion and compound decision-making inefficiencies. A clear, realistic methodology for accession based on objective criteria is badly needed, as is a sober assessment of whether each candidate can be integrated effectively into the EU’s structural framework.

In the meantime, practical measures and de facto agreements can deepen the EU’s ties with prospective member states and bolster their progress toward accession. Ukraine’s integration into the EU’s mobile-roaming network and trade agreements, and the synchronisation of its electricity grid with the Continental European Network, offer a useful model.

A final imperative for the EU in 2025 is to reform its institutional structures and decision-making processes. This must include a review of the ideologically-driven regulations contained in current legislation—the European Green Deal at the centre of Ursula von der Leyen’s first mandate is a prime example—and efforts to improve transparency, accountability and efficiency within European institutions, thereby enhancing their responsiveness and reliability. Fostering greater engagement with citizens through clear, open communication from Brussels, along with citizen-driven initiatives, would also help to strengthen the EU’s legitimacy and resilience. Progress on any of these fronts will require considerable political resolve from lawmakers in Brussels.

How the EU navigates this complex array of internal and external challenges over the next year will determine its future as a global actor. One hopes that pragmatism, unity and long-term thinking prevail in 2025.

EU, NATO forge closer ties with East Asia as Russia, China threaten

The Russian invasion of Ukraine on 24 February 2022 brought the European Union and Poland closer to like-minded states in Asia, including Japan. We realised that despite different histories and cultures we share the same values regarding international politics, namely the adherence to the international law-based order established in 1945.

We do not accept the concept of spheres of influence where the stronger dictate policies to smaller countries, we do not accept that might is right, that internationally agreed borders can be changed by force, or that members of the United Nations can be made to disappear. The Ramstein group created to help Ukraine militarily in April 2022 consists of over 50 states. It includes all NATO members, as well as Australia, Japan, New Zealand, South Korea and some African and Latin American countries.

Over almost three years of the war in Ukraine, a linkage was made between Eastern Europe and East Asia. From a political perspective, a Russian victory would be interpreted as proof that aggression pays and can succeed because the liberal democracies of the world are weak, divided, lack strategic understanding and prefer to concentrate on commerce and profit, rather than sticking to the law-based order that made the world so successful after World War II. As a consequence, the South China Sea and the Taiwan Strait may soon face similar pressures. Abandoning Ukraine today will set an ominous precedent for some countries in East Asia.

In the European Union, and in Poland in particular, we realise that in the current situation security is the most important part of state policy. Germany’s Ostpolitik engagement and Wandel durch Handel (change through trade) policies failed in the past. Policies that encouraged Russia ended with its invasion of Georgia in 2008, Crimea in 2014 and the full-scale invasion of Ukraine in 2022. This is why the Polish EU rotating presidency in the first half of 2025 will concentrate on security: military, energy, food, pharma and cyber. This is why Poland will spend a record 4.7 percent of GDP on defence (in real terms, the fifth-largest spender in NATO) and already has the third-biggest army among member states.

In this context, the EU notes the political and economic support provided to Russia by China. In 2019, the organisation accepted the paradigm that China is a partner, economic competitor and systemic rival. Due to the war and the results of the American presidential election, this assessment has changed. China supports in principle Russia’s position on the United States, NATO and Western Europe. Specific Russian goals were described just before the invasion of Ukraine in the two treaty proposals from Russia to the EU and the US and published on the Russian Ministry of Foreign Affairs website on 17 December 2021.

The message was that NATO activities in former Soviet territories should be constrained and NATO should not be permitted to expand. The proposal was unacceptable to NATO members. The Russian invasion of Ukraine rendered them obsolete. NATO has a military presence on its eastern flank and previously neutral Finland and Sweden became full members.

The increasingly assertive security policies of China in the Indo-Pacific, which includes the supply of sensitive dual-use items to Russia (though denied by the authorities) may put in doubt China’s partner status in relation to the EU. As the EU’s new top diplomat Kaja Kallas stated in a hearing in Brussels, ‘My priority in contacts with China will be protection of the geopolitical and economic security of the EU.’ The new approach to China may concentrate more on the rival part and on pursuing de-risking strategies, especially in areas critical for EU member security. These areas include energy transformation, the pharmaceuticals sector, agriculture and new technologies. The new sanction regime may include Chinese companies suspected of selling components of potential military use to Russia.

We can expect that the US will demand that the EU follow the restrictions of trade and accept US regulations and technological standards in relation to China. Incoming president Donald Trump’s policy may concentrate on decoupling and there may be an expectation that the EU should follow suit, given that the bloc remains a large and basically open market for Chinese products and is dependent on China in some key industrial areas.

Should the US introduce high tariffs on Chinese products, the European countries may face increased imports. This in turn may result in a more assertive EU approach, as exemplified in the antidumping duties for Chinese electric cars. China, which regards the EU as a weak body dependent on the US, may in turn try to increase bilateral contacts with some EU member states that rely primarily on their supply chains and China-based production. As a result, EU member states may have different views on the de-risking strategy.

China regards Russia as its ally and partner in its rivalry with the US. The post-1945 international order is challenged, although in different forms, by both these countries. Both accept the idea of the spheres of influence and the logic that a few big and powerful states should exercise control over the other smaller and weaker entities. China regards positively the proposals for European strategic autonomy, as that may weaken transatlantic relations. It also aspires to be a partner or a guarantor of the new European security architecture proposed by Russian President Vladimir Putin—a suggestion that is obviously unacceptable to the EU and NATO members.

The geopolitical changes after February 2022 produced some unexpected results. For the first time since the collapse of the Soviet Union, most European countries started to take defence and security seriously. In 2024, the goal of spending 2 percent of GDP annually on defence by NATO members was reached by 20 out of 32 states (three years earlier there were six). Europe decided to produce arms and munitions to recreate the once thriving industry dismantled in the 1990s.

Most importantly, the Europeans and the like-minded East Asians came to cooperate closely with each other on security. We have now strong links with the IP4 (Australia, New Zealand, Japan and South Korea), but also with India and the Philippines.

Together, we can become resilient while facing international challenges.

Will Germany help shift EU–Taiwan ties into gear?

The European Union is in the process of rethinking its relations with China, with an increasing awareness that China presents mounting challenges to core European values and interests. In Brussels, the issue of systemic rivalry has taken centre stage in the China debate, while calls for cooperation and engagement remain.

Germany is one of the leading member states that has shown support for change in the EU’s relationship with China, while simultaneously proving to be slow in adjusting its own China policy.

German Chancellor Olaf Scholz’s trip to Beijing in November, accompanied by a large business delegation soon after Chinese leader Xi Jinping further tightened his control over the country, raised questions across Europe about Berlin’s readiness to embrace change, and further complicates ties with fellow EU member states.

In Germany, the China debate has seen an important shift over the past year as Berlin sought to strategically position itself within Europe’s emerging Indo-Pacific strategy. While there’s consensus in Berlin on the need to rethink political and economic ties with China, there’s no agreement on the exact path to follow. It is in this context that awareness of Taiwan’s strategic relevance to Germany’s security and prosperity has grown.

Berlin is in the process of drafting its first national security strategy and is working on a China strategy. Given the marked internal divisions among Germany’s economic and political elite on how to handle China, both strategies remain subject to difficult negotiations.

In light of Russia’s aggression against Ukraine and Beijing’s diplomatic support to Moscow, which included Xi’s refusal to condemn Russian President Vladimir Putin’s brutal invasion, the EU has become deeply aware of its own vulnerabilities. There is fear in Europe, and across democracies globally, that Taiwan’s future—and the future of democracy in general—is under growing threat from an increasingly authoritarian Chinese leader.

Critically, Europe lacks a contingency plan for how to respond. Continuing visits to Taiwan by European parliamentarians, including those by German, Lithuanian and Spanish lawmakers this week, ensure that Europeans are far more likely to understand Taiwan’s situation, thereby contributing to the preparedness of EU member states should a crisis occur.

The visit by German lawmakers must be considered in this broader context, and as an example of the well-established practice of parliamentary diplomacy that remains a normal feature of democracies across the globe. In addition to Germany, Lithuania and Spain, this can and should prove a common way for Taiwan to engage with other partners across the EU. European lawmakers have in fact been visiting Taiwan for decades, with exchanges now returning to pre-Covid-19 levels.

When it comes to German-Sino relations, the reality is that uncertainty will remain, much to Xi’s chagrin, and will likely intensify as China grows more aggressive. Germany therefore must follow through with a strong strategy on security, one that will help deliver a common European message to China and that remains clear on Europe’s right to cooperate with Taiwan.

From Beijing’s perspective, keeping Germany close is important, so the Chinese leadership is unlikely to risk relations with a vital European partner, even in the face of the Bundestag’s growing willingness to engage with Taiwan.

For decades, the Chinese economy has benefited from German investment, in particular German technology. China is currently engaged in building up its own export base for higher-value products, becoming a stronger competitor in sectors that are key to Germany, such as automobiles.

This alone is reason enough for Germany to reconsider how it exploits its own leverage in ties with China. It also has the potential to support European convergence towards a rebalancing of bilateral ties in order to address the asymmetry that has dominated trade at the expense of European interests and to the benefit of China.

Given Germany’s strong desire to shape European foreign policy, it is Berlin’s responsibility to ensure that values are given the right consideration along with not just German, but European interests. Parliamentary diplomacy can contribute to sending a message to Beijing that Berlin not only has the right to cooperate, but is also ready to embrace Taiwan in line with the EU’s one-China policy, and will not hesitate to contribute to ensuring peace and stability in the Indo-Pacific. Coming from Germany, a crucial partner for China, such a message carries real weight and is necessary for a credible European shift on China.

What is most important is that Berlin’s responsibility lies in helping to deliver a common European message—that by engaging Taiwan, Europeans are looking after their own interests while also seeking to promote peace and stability for all in the region.

The Indo-Pacific is a region of strategic importance to Europe, a fact that Berlin has notably embraced with its own Indo-Pacific policy guidelines. So far, however, Germany has failed to Europeanise its China policy and push forward a common European agenda. In this regard, parliamentary diplomacy can help move the dial.

Brexit and the Brussels effect

In its negotiations with the European Union over post-Brexit trade relations, the British government has become entrenched in its demands for full sovereignty. In the future, it wants to determine all of the rules about safety, the environment, health, workers’ rights and subsidies to British companies without any interference from the European Commission.

That’s fine—insisting on the right to diverge from the EU’s internal market rules is fully in keeping with the meaning of sovereignty. The problem is that the British government is also trying to maintain the United Kingdom’s access to that internal market under its own rules. For example, it wants the right both to apply its own sanitation rules to the production of chicken (allowing for the use of chlorine) and then to sell those chickens in the EU, where different rules apply. Never mind that the EU also is a sovereign entity with the right to decide and enforce its own standards, and to impose tariffs on imports that violate its rules.

How can a trade deal be made to work when both parties claim full sovereignty? This claim has two overarching implications for negotiations like the one between the UK and the EU. First, it means that each party decides independently which laws will apply in its jurisdiction. Thus, all firms (including EU-based firms) selling in the UK must comply with UK laws, and all firms (including UK-based firms) selling in the EU must comply with EU law.

The second implication is that each party decides independently how it will control compliance within its own borders. Firms that don’t comply are sanctioned, and each party is free to decide on the nature of those sanctions (barring sales, imposing tariffs, and so forth). Thus, UK firms selling goods in the EU that don’t comply with EU law will face whatever sanctions the EU has decided, and the same holds for EU firms selling in the UK.

A trade deal based on full sovereignty could be reached quickly and implemented easily. There would be no need for joint committees tasked with negotiating the specifics of how rules and regulations in both jurisdictions will be allowed to diverge, or for complicated procedures to settle disputes when new divergences are observed. Decision-making by such committees tends to take a long time, and there will always be hot-button issues that trigger a chronic or quasi-permanent conflict between the trading partners.

By contrast, a full-sovereignty model would be relatively easy to govern, because each side would retain its power to identify rule divergences and sanction them as it sees fit. Of course, once such a deal was concluded, it would be difficult if not impossible to avoid asymmetric developments in the future, since the EU internal market is the biggest in the world.

This asymmetry would almost invariably lead to what is known as the ‘Brussels effect’. UK firms would eagerly comply with EU rules of their own accord, in order to benefit from access to the European market. Not doing so would result in large losses, either from sanctions for noncompliance or from forfeiting that share of the market to competitors. By contrast, the UK market is relatively small. From the perspective of EU firms, abandoning it might lead to some losses; but these would pale in comparison to those suffered by UK firms losing access to the EU market.

There would also be significant pressure on future UK governments to align their laws with those of the EU—not just in the near term but indefinitely. Though the current UK government is determined to resist this pressure, its position will increasingly put UK firms at a competitive disadvantage. Required to produce for the UK market under UK rules, and for the (much larger) EU market under EU rules, their production costs would rise. Sooner or later, the UK government would be forced to acknowledge reality.

Although the EU–UK negotiations have often been ill-tempered and are now poised to run past the deadline, it would still be easy to come to a trade agreement based on a strict interpretation of sovereignty. Over time, the Brussels effect will bring UK laws into line with EU laws anyway. There’s no need to try to force the matter today. The whip of the market will do that.

The costs of the EU’s surrender to Hungarian and Polish extortion

The European Union is facing an existential threat, and yet its leadership is responding with a compromise that appears to reflect a belief that the threat can simply be wished away. Prime Minister Viktor Orban’s kleptocratic regime in Hungary and, to a lesser extent, the illiberal Law and Justice (PiS) government in Poland, are brazenly challenging the values on which the European Union has been built. Treating their challenge as a legitimate political stance deserving of recognition and a compromise solution will only add—massively—to the risks that the EU now faces.

I recognise and understand the enormous pressure under which German Chancellor Angela Merkel has been laboring. She has been Germany’s chancellor for 15 years and is now approaching retirement, in September 2021. With French President Emmanuel Macron temporarily distracted by the laïcité issue and other serious security concerns in France, Merkel has become something of the sole main decision-maker for the EU.

I also understand why the German chancellor doesn’t want another country, Hungary, to announce its intention to leave the EU on her watch. That is reportedly what Orban was preparing to do in recent days, because he can’t afford to have the sheer scale of his regime’s corruption exposed, which the EU’s ‘rule of law’ conditionality for the disbursement of EU funds would invariably have done.

Orban has stolen and misappropriated vast sums during his decade in power, including EU funds that should have gone to benefit the Hungarian people. He can’t afford to have a practical limit imposed on his personal and political corruption, because these illicit proceeds are the grease that keeps the wheels of his regime turning smoothly and his cronies in line.

Threatening to torpedo the EU’s finances by vetoing its budget was a desperate gamble on Orban’s part. But it was a bluff that should have been called. Unfortunately, Merkel has, it appears, caved in to Hungarian and Polish extortion.

As I write, it seems clear that Merkel has brokered a compromise with Orban and Poland’s de facto leader, Deputy Prime Minister Jaroslaw Kaczynski. The deal that Germany made with the EU’s two rogue member states, however, constitutes the worst of all possible worlds. The widely leaked text of the proposed compromise, to be embedded in the concluding statement of this week’s European Council meeting, has three fundamental flaws.

First, the declaration alters in substance and intent the text of the regulation that was agreed by EU institutions on 5 November, weakening the rule-of-law conditionality considerably. Neither the European Commission nor the European Parliament, let alone the national governments that made the integrity of the regulation their main concern in the European Council, should allow themselves to be elbowed aside in this way.

Second, some provisions in the deal serve to delay the implementation of rule-of-law conditionality by up to two years. That would be a true coup for Orban, as it would delay any possible action until after the next scheduled Hungarian parliamentary elections in 2022.

The reprieve would give Orban’s Fidesz party ample time to change Hungarian laws and constitutional provisions, and allow Orban to continue redefining what constitutes ‘public funds’ in Hungary in ways that enable him to channel ill-gotten loot from public bodies into private ‘foundations’ controlled by his cronies. The primary victims of the deal that Merkel has reportedly struck with Orban will be the people of Hungary.

Last, the proposed summit declaration is a case of the European Council acting beyond its authority in constraining the European Commission’s ability to interpret and act on agreed EU legislation. That is a dangerous precedent, because it reduces the commission’s legal independence and may very well contravene the Treaty on European Union, at least in spirit.

The deal, as it is understood to exist, is ugly and flouts the express wishes of the European Parliament. But because of the urgent need to use the €750 billion (US$909 billion) Covid-19 recovery fund, the European Parliament may very well approve it.

All I can do is to express the moral outrage that people who believed in the EU as the protector of European and universal values must feel. I also want to warn that this compromise may severely dent the hard-won confidence that the EU’s institutions have gained through the creation of the recovery fund.

Bosnia’s imperfect peace, 25 years on

At a US Air Force base in Ohio 25 years ago, the European continent’s most devastating war since 1945 came to an end with the Dayton Agreement. After three and a half years, the war in Bosnia had taken more than 100,000 lives, wrought immense destruction and displaced millions from their homes. ‘It may not be a just peace, but it is more just than a continuation of war’, the Bosnian Muslim leader Alija Izetbegović observed. ‘In the situation as it is, and in the world as it is, a better peace could not have been achieved.’

Too true. Together with the American and Russian negotiators, Richard Holbrooke and Igor Ivanov, I experienced the ups and downs of those 21 days in Dayton firsthand as the European Union’s co-chair of the peace talks. I then spent the next few years in Sarajevo, trying to guide the implementation of the agreement’s first steps. I learned that it is far easier to start a war than to build a peace. The Bosnian conflict had been a perfect illustration of this fundamental historic truth. When Yugoslavia started to fall apart in 1991, few people suspected that we were heading for a decade of bloody conflicts from Slovenia (briefly) in the North to Macedonia in the South.

As for the Dayton Agreement, it was really a compilation of multiple peace plans that different constellations of international actors had tried to implement in prior years. The reason we succeeded in November 1995 was that all the key international actors—the EU, the United States and Russia—were finally on the same page. Previously, there had always been a temptation for one player or another to prolong the conflict in the hope of forcing a better deal.

After a war, one makes peace with one’s enemies. But any peace not built on total capitulation by one of the parties necessarily rests on compromise, and a lasting compromise is possible only if it meets the minimum demands of all parties without bending to the maximum demands of any party in particular. That’s why the enthusiasm following such agreements tends to be muted.

When the guns fell silent in Bosnia, the monumental task of rebuilding a war-torn country began. Within the territory were three armies, three currencies and three semi-states—two of which had already entered into a shotgun marriage. Over the course of the ensuing decades, Bosnia has been (physically) rebuilt with EU funding; in bustling Sarajevo, one now must search to find the scars of war.

That’s the part of the story with a happy ending. But the story of political reconstruction and reconciliation is more complicated. This process has been painfully slow, because for too long, too many Bosnian leaders saw peace as the continuation of war by other means. Despite massive and intrusive international efforts, the forces of disintegration have continued to make themselves felt throughout the region.

The new Bosnian constitution that came out of the Dayton talks reflected what was possible at the time, which is to say it was more ‘old Yugoslavia’ than ‘new Europe’. It set a floor upon which to build cooperation—with provisions to deepen integration and to amend the constitution itself—but it didn’t set a ceiling for what could be achieved. The task of building the future was left to Bosnians themselves.

The fact that Bosnian leaders haven’t made better use of the possibilities that were on offer is a lasting tragedy of that era. Since 2003, the EU has made clear that its doors are open to all of the Balkan countries, provided they can take the steps necessary to qualify for membership. But with the exception of Kosovo, Bosnia today is last in line among its Balkan neighbors for EU accession.

To be sure, one can question whether the EU has been proactive enough in its approach to the region. Though European leaders recognise that the pull of EU integration is the only force capable of countering the forces of regional disintegration, the fact is that the Balkans have slipped down Europe’s list of priorities.

Nonetheless, the EU has kept a small military force in Bosnia these past 25 years. With a robust mandate from the United Nations Security Council, this presence sends a strong signal that war will never again be tolerated in the region. And there’s an equally strong international commitment to respecting the sovereignty and integrity of Bosnia and all other Balkan countries. The era of redrawing maps is over, and the task of reforming Bosnia will continue to rest with Bosnians themselves.

There are encouraging signs that a new generation is ready to consign the war to history and start seeing peace for what it really is: an opportunity to forge a new future together. In his address to the UN General Assembly this year, Sefik Dzaferovic, the current head of state for Bosnia and Herzegovina, made clear that:

There is a general consensus in Bosnia and Herzegovina about the irreplaceable significance of preserving peace, and thus, the peace accord on which it is based. This gives hope that in the future, the society of Bosnia and Herzegovina will be increasingly more preoccupied with issues of development, as it enters a new phase of its historic road.

I and many others share that hope. There are many lessons to draw from Bosnia’s long saga. We must continue to reflect on the failure to prevent the war, the transatlantic divisions that prolonged it, the importance of inclusive institutions and the need to counter disintegration with integration.

But the two most important lessons are these: it is far easier to start a war than it is to stop one, and silencing the guns is merely the first step towards lasting peace.

Biden victory leaves Eastern Europe’s mini-Trumps alone in the wilderness

Joe Biden’s election as president of the United States has seriously weakened authoritarian and populist governments around the world. For independent global powers like Russia, Brazil and Turkey, Donald Trump’s departure need not amount to a complete tragedy. But for the governments of Poland, Hungary and Serbia—and perhaps Boris Johnson’s United Kingdom, too—it is a veritable disaster.

Not surprisingly, each of these smaller players has greeted Biden’s election with fear and loathing. Putting it most bluntly, Serbian President Aleksandar Vucic has already complained that, ‘I did not get along with Biden when he came to Serbia [as Barack Obama’s vice president]. I can’t get along with him now. I congratulated him and that’s it.’ Clearly, Russia, not America, will remain Vucic’s pole star.

For his part, Hungarian Prime Minister Viktor Orban has long made it clear that his ‘Plan A’ was for a Trump victory, reflecting how close the two have become. Like Vucic, the Hungarian government harbors resentments for things Biden said back in the Obama era, when, according to Hungarian Foreign Minister Peter Szijjarto, Hungary was the subject of ‘continuous lecturing, accusations and attacks’.

To be sure, before Trump came to power, Orban was practically persona non grata in Washington. The last US president to visit Hungary was George W. Bush in 2006, when Orban was out of power. After Orban took office in 2010, the Obama administration repeatedly criticised him for its authoritarian tendencies, clampdown on public and private media, and kleptocracy. In return, Hungary introduced sanctions against several high-level US officials, and—following Trump’s arrival in the White House—kicked the US-accredited Central European University out of the country.

But Orban has long tried to juggle several geopolitical balls. While maintaining close relations with Russia and even China, he has enjoyed the protection of German—particularly Bavarian—politicians who do not hide their sympathy for him. Orban thus has gotten away with repeated attacks on basic European principles such as the rule of law, and has even indulged in open anti-Semitism. Yet to this day, his party, Fidesz, remains in the European People’s Party, the umbrella group for conservatives in the European Parliament.

It is Poland’s government that has the most to worry about. When the ruling Law and Justice (PiS) party came to power in 2015, it initially chose the UK as its main ally in the EU. But since the 2016 US election (which followed on the heels of the UK’s Brexit referendum), PiS has bet everything on its cosy relationship with Trump, an American leader who could not care less about democratic principles or the rule of law.

Now that Trump is on his way out, and Johnson (inelegantly dubbed ‘Britain Trump’ by the US president) is rushing to get in Biden’s good graces, the Polish government is left with no powerful friends on the international stage. Because Poland is staunchly opposed to Russia, too, it now stands completely alone. This development represents another breach in Poland’s post-communist diplomatic strategy, two principles of which are to avoid dependence on any one country and to avoid isolation at all costs.

Of course, PiS cannot say that it didn’t know the risks of losing its last ally. Just last month, Biden made his low opinion of the PiS government clear when he included Poland alongside Hungary and Belarus as an example of the ‘rise of totalitarian regimes in the world’. Whereas Polish President Andrzej Duda was effusive in congratulating Trump on his 2016 victory, this time he congratulated Biden merely ‘for a successful presidential campaign’.

For Trump, Poland was proof that foreign policy could be transactional. The PiS government signed multiple arms contracts with the US in exchange for symbolic gestures, such as Trump’s invitation to Duda to visit the White House during his own presidential campaign in June. On 9 November, Duda signed a Poland–US defence cooperation agreement that is brimming with Trumpian overtones. A similar agreement concluded by a previous Polish government had held the US responsible for construction costs and granted Poland legal jurisdiction over US personnel and bases on its soil. Under the new accord, Poland will receive US financing, and the US will maintain jurisdiction.

Excellent relations with Trump were supposed to enable Poland to dismiss the European Union’s criticism and maintain cool ties with Germany as the PiS government subdued Poland’s judiciary. Now Trump’s electoral loss is compounded by a second piece of catastrophic news.

Earlier this year, the European Council and the European Parliament agreed to make EU funding conditional on compliance with the rule of law, which PiS has been undermining ever since it came to power. The European Council is now set to adopt this ‘conditionality’ clause with a qualified-majority vote, meaning that Poland has no veto. Yes, Poland could try to block another element of the EU’s budgetary process—the so-called own-resource decision (determining how much a given country pays to the EU)—but only if it is willing to lose the last remaining support it has in Germany. At this point, not even Orban is likely to go out on a limb for Poland.

Moreover, the EU has its own nuclear option, that is, accepting the new €750 billion Recovery Fund as a 25+2 intergovernmental agreement, which would suit many net payers, as Poland is one of the biggest beneficiaries. Here, too, Orban has no incentive to stick his neck out for PiS. Just like when he supported the bid of former Polish prime minister Donald Tusk, a PiS bogeyman, for a second term as European Council president, Orban will not hesitate to leave the Polish government out in the cold.

Building back a better transatlantic alliance

Joe Biden’s victory in the US presidential election has been met with a wave of relief across Europe, where many feared that a second term for Donald Trump would have threatened the very survival of the European Union. Biden offers at least the prospect of restoring a more traditional transatlantic relationship. Many assume that the United States will return to leading the liberal international order, with Europeans playing a supporting role through diplomacy and soft power. Batman and Robin are back.

But this vision is a mirage. Long before Trump and his ‘America first’ doctrine, a series of crises—the Iraq War debacle, the global recession—had sapped the US’s willingness to continue serving as the world’s policeman. And over the past four years, other powers—China, Russia, Turkey, Iran, Saudi Arabia, Israel, the United Arab Emirates and many others—have been filling the vacuum created by America’s inward turn. Much of the global governance architecture has been hijacked by China and other powers and is now buckling under the weight of great-power competition.

Despite these geopolitical developments, some European Atlanticists have been hesitant to pursue greater self-reliance for fear of offending the US, whereas others secretly wished for a Trump victory on the grounds that it would finally shake Europe (especially Germany) from its complacency. Those in this second camp believe that Europe has made more progress towards securing its own sovereignty over the past four years than it did under the presidencies of Barack Obama, George W. Bush and Bill Clinton combined.

In this sense, Trump—an exponent of everything Europeans oppose—may have served as the accidental father of European sovereignty. The politicians most supportive of a strong transatlantic alliance find themselves paradoxically tolerating outcomes that could well destroy it.

Concerned with maintaining its global strategic primacy, the US was once ambivalent about European defence and strategic autonomy. But as power has shifted eastward, subsequent US governments have been keen to devote as much attention, money and military muscle as possible to the Indo-Pacific. The last thing the US wants is to get sucked into more ‘forever wars’ in the Middle East or political conflagrations in Eastern Europe and the Balkans.

Accordingly, US strategic planners today do not object to a stronger, self-reliant Europe, but a weak one that diverts scarce US resources from the rivalry with China. The US is looking for a partner, not a collection of needy children who take no responsibility for their own welfare. The Biden administration will want to work with a Europe that offers solutions, not more problems.

Atlanticists who take the long view realise that the critical task now is not to restore the transatlantic relationship but to transform it. An EU that achieves strategic autonomy might not always agree with the US on issues such as data privacy, energy policy or even global trade. But it would manage these differences pragmatically, while always standing shoulder to shoulder with America on the values-based issues that count. Instead of waiting for cues from the next American president, Europeans should already know what the US expects and be prepared to meet it halfway.

On China and the issues surrounding 5G, for example, Europeans don’t need to wait for instructions from the US: they should already be preparing the ground for something like a comprehensive transpacific–transatlantic partnership. New arrangements are needed to circumvent Chinese resistance to substantive reforms to the international trading architecture, and to pressure China to curb its market-distorting practices.

Likewise, on Russia, Europeans should already be devising a new Eastern partnership to bring both European and US security assistance to the frontlines of the struggle. On climate change, Europe needs to move quickly to develop an EU–US carbon border adjustment mechanism, and to invest more in a green-tech alliance to boost economic competitiveness. And on Iran, Europeans can anticipate renewed negotiations on a revamped nuclear deal aimed at de-escalating tensions across the region.

From the US perspective, the biggest threat to Atlanticism is not European sovereignty, but rather European dependence. Trump has spent the past four years pulling at the strings of Europe’s internal divisions. If Biden wants to reinvent American leadership for the 21st century, he will need to push Europe to become self-reliant.

Biden has promised Americans that he will pursue unity and bring an end to a ‘grim era of demonization’. He could do the same for Europe, and without any costs to American taxpayers, by bringing new pressure to bear on the countries that are undermining European unity from within—namely Poland and Hungary. From day one, Biden should make clear to these countries’ governments that the road to the White House runs through Brussels. That would already make him a better advocate for European sovereignty than Trump was, and it would represent a big step towards implementing a new American grand strategy.

There is a strong parallel between this approach and the debates about Covid-19. The top post-pandemic priority is not to ‘reconstruct’ the status quo ante, but rather to use the crisis as an opportunity to fix the things we already knew were broken.

Covid-19, Europe and the battle between isolation and cooperation

Google ‘Europe’ and ‘crisis’ and you’ll turn up more than 800 million results. So often do the two terms appear together that they might as well be a compound noun. With each new eurocrisis, commentators wring their hands over the question of whether the European project will survive.

On the surface, many eurocrises seem similar. European governments go through different phases of grief—from denial and anger to reconstruction and acceptance—and eventually blame the usual suspects. For northern Europeans, the problem always lies in southern Europe; for southerners, the Germans are the bad guys, and China is a potential saviour.

But, of course, there are fundamental differences between the generation of leaders who steered Europe through the 2008 financial crisis and those now grappling with Covid-19. That became apparent last week when former British prime minister Gordon Brown embarked on a media tour to share the lessons from his own time in office.

Owing to his proactive response to the 2008 crisis, which included organising the April 2009 G20 summit at which world leaders agreed on a coordinated economic policy response, some commentators have suggested that Brown single-handedly saved the global financial system. Now, Brown is asking why today’s leaders haven’t organised an equivalent summit to get ahead of the pandemic’s economic fallout.

Today’s leaders have a fundamentally different outlook. Brown, US President Barack Obama and French President Nicolas Sarkozy have given way to Boris Johnson, Donald Trump and Emmanuel Macron (to which one might add Danish Prime Minister Mette Frederiksen, Italian Prime Minister Giuseppe Conte and Austrian Prime Minister Sebastian Kurz).

These leaders’ political instincts were shaped by the widespread backlash against the post-2008 establishment and globalisation more generally. Today’s leaders are decidedly less Atlanticist than their predecessors were. As young adults, they witnessed America’s disastrous war in Iraq, and watched as a financial crisis born in the United States went on to wreak havoc across the entire world. Unlike their predecessors, they see America—or at least Trump’s America—more as of a source of problems than of solutions.

Europe’s current leaders are also much less neoliberal in their economic policy orientation. In the post-2008 period, even social democrats who had demanded large-scale stimulus measures turned out to be relatively conservative, more or less embracing austerity. Having lived through those years of belt-tightening, the new generation is much more interventionist, and not just in economic terms. In the 2008 crisis, the biggest fear—to quote Roosevelt—was fear itself, so governments needed to project normality. Today’s governments need to promote and harness fear in order to contain the deadly virus.

Nor does the current crop of leaders share the previous generation’s confidence in global governance. On the contrary, their first instinct in the face of Covid-19 was not to organise a global summit but to seal their borders and renationalise supply chains. This reaction may reflect the experience of the 2015 refugee crisis, when multilateral governance seemed to have failed spectacularly.

That brings us to the one leader who links the two eras: German Chancellor Angela Merkel. While political generations have come and gone, Merkel has remained. Having held her current office since 2005, she has seamlessly managed to change her perspective to reflect the prevailing instincts of each crisis.

She played an active role in the cooperative response to the 2008 crisis and became the face of the European Union’s Willkommenskultur (welcoming culture) in 2015, when the bloc took in some one million refugees. But now she has closed Germany’s borders. After 2008, she joined the neoliberal push for austerity; but she has now agreed to abandon Germany’s ‘black zero’ (anti-deficit) budget policy, announcing that her government will do whatever it takes to save the German economy. Her legacy will most likely centre on the fact that she held the EU together through multiple crises. But many people criticised her for not mentioning Europe at all in a recent national address—her first since taking office.

Given these tendencies, some people have argued that while the financial crisis leaders managed to bring the EU back from the brink, the coronavirus generation is more likely to destroy it. Are they right?

The initial reaction to the pandemic doesn’t bode well. European governments have been at odds with one another, and their citizens have increasingly questioned the very idea of interdependence, particularly vis-à-vis strangers beyond their immediate community. Then again, all eurocrises have cast a shadow on cosmopolitan interdependence. Each time a crisis has struck, Euroskeptics have criticised the European project for taking away national control, whether over borders, safety or money. The Covid-19 moment is hardly the first time that Europeans have come to fear the consequences of deeper integration. There will be a battle of narratives in the months ahead about whether salvation will come from cooperation or isolation.

The task for the current leadership, then, is to make interdependence feel safe again. And in a strange way—given their lack of European religion—these leaders might have the credibility to make a new case for cooperation, by showing that it is the best way for European countries to protect their citizens.

On the economic front, the European Central Bank seems to be finding its way after some initial messaging flubs. It has committed to doing ‘everything necessary’ to stabilise the eurozone and its constituent economies. European institutions now need to devise ways to supplement member states’ responses by funding research, procuring protective equipment and ventilators, sharing information, participating in global discussions, upholding the single market and even developing ‘corona bonds’.

If EU leaders can demonstrate that the bloc is a partner rather than a threat to national sovereignty, the coronavirus generation may yet lay a stronger foundation for Europe’s future than the 2008 generation did.

Britain’s post-Brexit choices

Huge amounts of time, effort and frustration have gone into negotiating the terms of the United Kingdom’s exit from the European Union. And with the UK set to hold a crucial parliamentary election on 12 December, it’s still not clear whether, when and how Brexit will happen.

But assuming the UK does leave the EU, its next government will need to begin the long, difficult process of negotiating new relationships with the rest of the world. That will involve tough choices, one of the thorniest of which is whether the UK should align its regulations in key economic sectors with those of the EU or the United States. Where, then, is Britain headed?

Prime Minister Boris Johnson wants the UK to reach a trade and investment agreement with the US after Brexit. After all, America is the UK’s largest single-country trade partner and its biggest source of (and destination for) foreign direct investment.

In seeking such a deal, however, the UK would have to decide how far it is willing to realign its regulatory regimes with those of the US (as American firms and investors want). Closer alignment with the US would create new barriers to trade with the EU, which is a much larger market for UK exports. Moreover, the prospect of adopting US standards—on drug pricing, the environment, animal welfare and food, for example—is already creating a public backlash in Britain.

As the UK prepares for life after Brexit, regulatory tensions with the US and EU could potentially flare up in two other important sectors.

The first is banking and finance. In 2018, the UK’s financial services sector contributed £132 billion to the economy, or 6.9% of total output; provided 1.1 million jobs (3.1% of the total); and paid some £29 billion in tax (in the 2017–18 UK tax year). The sector also generated £60 billion worth of exports in 2017 (against £15 billion in imports).

But the financial services sector poses huge risks if it’s not adequately regulated. The 2007–08 financial crisis reduced the UK’s national output by 7%, wiped out a million jobs, caused wages to fall by 5% below 2007 levels, and brought bank lending to a halt. All parts of the UK (and much of the rest of the world) felt the catastrophic impact.

After the crisis, an independent commission made a clear case for regulatory reform to protect the British public (and the public purse) from reckless bank lending. Policymakers in the EU and the US also accepted the need for robust regulation.

Today, however, America and Europe are pursuing sharply divergent approaches. EU regulators continue to strengthen prudential rules and capital requirements (especially for very large banks), and are widening the ambit of regulation to cover every asset and profession in the financial services industry.

The US, by contrast, has reversed course under President Donald Trump, whose administration has set about undoing core elements of the regulations implemented after the financial crisis. The US government’s agenda now includes lowering capital requirements, weakening stress-testing and ‘living wills’ for banks, and allowing more proprietary trading and unregulated derivatives dealing. It is also intent on rolling back consumer and investor protections, reducing prudential regulation of systemically significant banks, undermining the regulation of non-banks and the shadow banking system, reducing funding for research on and monitoring of the financial industry, and taking a hands-off approach to enforcing securities laws.

Some investors would benefit hugely from US-style financial deregulation in the UK, and will continue to push for it. But their quest for profits over systemic safety would jeopardise the hard-won regulatory measures that currently protect the UK public from a repeat of the 2007–08 crisis. It would also damage the City of London’s place at the heart of European finance.

To date, the UK has taken a robust approach to financial regulation and implemented measures that go beyond those introduced by EU regulators. These include a new regime aimed at holding senior bankers accountable for their decisions, and ring-fencing large banks’ retail operations to protect customers’ deposits from shocks to the wider financial system. And because the UK public broadly supports these measures, the post-Brexit government will presumably be hesitant to weaken them.

The second challenge for the UK after Brexit will be handling the big US technology companies. Earlier this year, a UK parliamentary report found that Facebook ‘intentionally and knowingly violated both data privacy and anti-competition laws’. Yet the size and global reach of the big tech firms make it hard for any non-US government to regulate or influence them.

Instead, the EU has led the way in enshrining citizens’ rights to data privacy, through its General Data Protection Regulation (GDPR). And the European Commission has adopted a stance strongly in favour of protecting competition and limiting the digital giants’ market dominance. In March, the commission fined Google €1.5 billion for blocking rivals in the online advertising market—the third time it has penalised the company for antitrust violations.

The US government, however, strongly supports the free movement of data (which the big American tech companies want), and Trump has been quick to criticise the commission for fining Google.

The UK relies heavily on the big global tech firms, all of which are American or Chinese, and must therefore try to regulate them. Once it leaves the EU, it will face a choice between giving in to US pressure or finding a way to mirror EU regulation (including the GDPR and the EU–US Privacy Shield Framework).

Brexiteers claim that the UK can create its own ‘global strategy’ and do things ‘Britain’s way’ after it leaves the EU. In 2016, for example, Prime Minister Theresa May said that after Brexit, the UK would rely upon its ‘steadfast allies’ to establish an alternative to the EU’s Galileo satellite navigation system.

Three years later, however, with Trump in the White House and the UK in a much weaker negotiating position with the EU, it’s not clear who these steadfast allies are. And even harder challenges await the government that emerges after 12 December.