Tag Archive for: Europe

Europe’s digital emergency

European Commission President Ursula von der Leyen offered an upbeat assessment in her first annual policy report to the European Parliament this month. Clearly, the agreement this summer on an unprecedented €750 billion recovery fund and renewal package has given the European Union a new sense of strength.

But now is not the time for complacency. While Europe can take pride in leading the world towards carbon neutrality and a ‘green recovery’, Covid-19 cases on the continent are spiking again, and the region remains at serious risk of falling behind in the global technology race.

In terms of the broader economy, there is now talk of a ‘K-shaped’ recovery in which some sectors decline sharply while others boom, often by seizing on opportunities created by the crisis itself. The EU has every reason to worry that its economy comprises more sectors in the first category than in the second, which invariably centres on information and communication technology.

The pandemic has accelerated the digital transition. China, for its part, has stepped up its efforts to achieve technological dominance in artificial intelligence and other key sectors of the future. And companies like Zoom have gone from being non-entities to household names in the space of just months. ExxonMobil, once the most valuable company in the United States, now doesn’t even make it into the top 30, having been surpassed by companies like Netflix. Despite a recent correction, US tech giants’ combined market capitalisation now exceeds that of all companies listed in Europe.

But even though hundreds of millions of people’s daily lives during the pandemic have been mediated by US tech companies’ products and services, the US can’t afford complacency either. Chinese giants like Huawei and TikTok are enlarging their global market shares by the day. According to Eric Schmidt, a former executive chairman of Google and Alphabet and chair of the US Department of Defense’s Defense Innovation Board, ‘China is on its way to surpass us in many, many ways … We need to take them seriously.’ Otherwise, he warns, China will ‘end up with a bigger economy, more R&D investments, better quality research, wider applications of technology, and a stronger computing infrastructure.’

There was a time when Europe could proudly claim to have helped launch the era of mobile communications. But now that the world is on the verge of upgrading from 4G to 5G, Europe’s technological contributions are notably absent. A new report from the European Round Table for Industry finds that the EU trails the US by three years, and China by nearly as much, just when it comes to implementing 4G, which is already yesterday’s technology. Needless to say, it is lagging even further behind in its rollout of 5G base stations, even though it is home to major ICT companies like Ericsson and Nokia.

Europe’s slow adoption of 5G will have far-reaching implications for its future competitiveness. Many of the industries that 5G could revolutionise are those in which Europe has traditionally demonstrated strength: manufacturing, design and health care. Now, there is a high risk that China, through digitalisation, will achieve dominance in these industries.

And 5G is just one technology. Even more important is AI, where the situation for Europe is particularly grim. According to a 2019 study by the Center for Data Innovation, the US leads the global AI race ‘in four of the six categories of metrics’ examined (talent, research, development and hardware) and China comes out on top in the remaining two (adoption and data). The EU commands primacy in none, though it is close behind the US in terms of talent.

This last observation is crucial. Europe’s problem is not a scarcity of talent but rather a lack of appropriate institutional arrangements and leadership in this critical domain. Fractured, old-fashioned governance frameworks are hampering the rollout of 5G infrastructure. Insufficient funding for basic research is hampering innovation. And the absence of deep capital markets is making it difficult for start-ups to get the financing they need to grow and scale up, leaving them to be snatched up by deep-pocketed US companies.

The results of these failures are clear to see in the rankings of the world’s unicorns (start-ups valued at US$1 billion or more). According to one recent index, six of the 10 largest are from the US, three are from China and one is from Singapore. Other indices give China the biggest share of major unicorns, but none show European start-ups anywhere near the top.

Though many start-ups eventually will fail, at least some of today’s highly valued companies will go on to become the giants of tomorrow’s digital economy, dominating our lives as much as today’s big tech firms do. It’s no use complaining about Chinese state support or less regulated US markets. The companies that succeed will be built on innovative business models that deliver what customers want.

Late last year, the European Parliament declared a ‘climate emergency’ to lend new momentum to the transition to a carbon-neutral economy. That is a perfectly understandable objective to prioritise. But Europe also needs to declare a domestic ‘digital emergency’, lest it continue to fall behind in the industries that will be necessary for achieving all other development goals—including a green economy.

The Belarusian kids are alright

Belarusian university students marked the start of the academic year on 1 September by announcing a strike. They planned to gather in Victory Square and then march to the Ministry of Education, where they would present a petition criticising the authorities’ actions in the weeks since last month’s fraudulent presidential election. But almost immediately upon reaching the square, they encountered the riot police known as OMON.

Unlike in other recent protests, the authorities showed little restraint in arresting demonstrators. But news of the harsh response spread quickly, prompting more students to take to the streets. As the ranks of university and even some high-school students swelled, what was supposed to be an hour-long demonstration continued for the rest of the day. At one point, a procession of some 200 students with flags passed by Mickiewicz Square. It was followed by another procession, this one comprising several dozen OMON.

Soon, the authorities decided that it was time to intervene, and undercover policemen suddenly started rounding up students. These plainclothes officers are the most despised of the security forces because they are widely seen as cowards. At least the OMON and other uniformed officers are willing to come face to face with the protesters, unlike those who hide in their cars, waiting for an opportune moment to snatch people off the streets.

To be sure, neither the regular police nor the OMON ever reveal their full faces, and when one loses his balaclava, he tends to be overcome by fear. Those who are photographed are quickly identified and logged on the ‘Black book of Belarus’ channel on the Telegram app. These acts of unmasking are effective precisely because the opposition enjoys such widespread public support. Members of the security forces have every reason to fear social ostracism, as do the judges, prosecutors and others complicit in the repression. Unfortunately, the judiciary remains completely subordinate to the regime.

At 6 pm the same day, students started gathering in Independence Square, where men in black quickly surrounded them. In what has now become a typical scene, police vans with loudspeakers barked warnings and blared Soviet-era songs in an effort to drown out the demonstrators’ chants.

By 8 pm, about a thousand students had gathered. This time, the authorities maintained their composure and limited their response to checking people’s bags and purses (the women protesters, in particular, displayed a clear disregard for the police). Soon enough, another mass march was in motion, proceeding down Independence Avenue towards Victory Square. Everyone anticipated that the police would again respond with mass arrests and a forceful crackdown. But it didn’t happen.

This inconsistency on the part of the authorities is telling. It suggests that Belarusian President Alexander Lukashenko has misplayed his hand. Rather than defanging the growing protest movement, his regime’s behaviour has stoked even more public anger. There are now countless images circulating online of OMON officers attacking high-school students, wrenching their arms and perp-walking them into police vans. There are images of mothers and teachers trying to snatch their children back from the authorities, only to be pushed away by black-clad OMON.

Though we don’t know who ordered this response, it certainly suggests that the regime is flailing. Far from demobilising public opposition, the government is unwittingly fuelling it. While the authorities sometimes beat protesters indiscriminately, they also sometimes target only the most active demonstrators, while giving everyone else a pass. And on some occasions, they even sit down and play pick-up sticks and other street games with civilians, as I witnessed on Monday. In the face of growing peaceful protests, their choice is lose-lose: they can respond violently, or they can feign friendship.

When the student march reached Victory Square, one could see Belarusian solidarity in a nutshell. Drivers honked their horns and handed out food. Nina Baginskaya, a 73-year-old retiree and the conscience of the Belarusian opposition, showed up to march with the students. For decades, Baginskaya has been threatened with detention for her activism, but she has been present at every rally, showing more courage than all the security forces combined. She will continue waving her flag in front of OMON’s phalanxes until she overthrows the system.

This was the last demonstration that I could witness in Minsk. The next day marked the end of my 30-day visa-free stay. As I departed, I saw firsthand why I would not be able to return to Belarus anytime soon: another foreign journalist—a Spanish photographer—was being deported. He had flown to Minsk the previous day, whereupon he was immediately searched, googled, checked against a prepared list of journalists, and detained. After spending one night in lockup, he was escorted onto a Warsaw-bound flight, only then receiving his passport back.

Not surprisingly, hardly any foreign journalists are left in Belarus. While marching with the student demonstrators to Victory Square on Tuesday, I didn’t see anyone else I recognised. Fortunately, Belarusians themselves are fantastic journalists. Citizen journalism has developed rapidly, such that nearly all of the regime’s barbarous abuses of power are recorded and made available online.

For those of us watching from the outside, the task now is to help these citizen journalists however we can. Among professional foreign media, there is a tendency to lose interest in a story that isn’t based on one’s own materials or on-the-ground reporting. But regardless of how many obstacles there are for the press, ultimately it is the Lukashenko regime that is powerless. As I witnessed firsthand, such a widespread, creative and politically astute protest movement cannot be stopped.

Post-Brexit, Scotland is forging its own foreign policy

Brexit is simultaneously reshaping the United Kingdom’s constitutional order and transforming its place in Europe and the world. It is a monumental project which, despite Britain’s formal departure from the European Union at the end of January, has in many respects barely begun.

During the post-Brexit transition that will last for the rest of this year, the UK largely operates as if it were still functionally part of the EU, without any political representation or say in EU decision-making. Negotiations on a new EU–UK relationship have not gone well. Even if they succeed, London has opted for a free trade agreement plus other cooperation—a remarkably distant relationship, considering the EU’s importance to the UK’s prosperity.

In the Brexit era, the UK intends to build a new foreign policy. But, aside from disconnecting from the EU, it remains ill-defined, beyond a preference for free trade and an interest in power projection. The UK government’s premise of ‘global Britain’ remains a catchphrase, not a doctrine.

Moreover, this direction of travel is highly contested across the different parts of the UK. In Scotland, opposition to Brexit has been strong and consistent. The Scottish electorate never endorsed Brexit and opinion polls indicate that a clear majority wishes to rejoin the EU (whether as part of the UK or through independence).

Scottish politics operates from a well-rooted consensus in favour of European integration. Scotland’s political institutions have been influenced in their development by European counterparts. The Scottish parliament continues to fly the European flag (following a plenary vote to reaffirm the policy).

The Scottish National Party (SNP), the sole governing party since 2007, advocates an independent Scotland as a member of the EU. However, support for Europe crosses both sides of the independence divide. More to the point, Scotland’s mainstream Europeanism isn’t going away.

Throughout the Brexit process, the Scottish government has worked to demonstrate its pro-EU approach in its European and international relations, differentiating itself from the UK government and its pro-Brexit mission. Edinburgh has made clear its commitment to the EU’s founding principles and called for a close relationship with the EU—positions which have been noted in Brussels and European capitals.

Beyond rejecting the destination of Brexit, indications are that the Scottish government will also distance itself from the UK’s reinvented foreign policy. For instance, it has opposed the merger of the Foreign and Commonwealth Office with the Department for International Development.

The Scottish government also recently made an intervention related to the West Bank, which was somewhat uncharacteristic, as the SNP has traditionally been cautious on undertaking direct foreign policy action. Future statements on other international matters could represent the Scottish government’s intention to articulate its own views directly, including where they might differ from those of the UK government.

The recent publication of the parliamentary intelligence and security committee’s long-awaited report on Russia’s state interference in the UK—whose release was obstructed by Boris Johnson—generated significant media headlines on the claim of Russian interference in Scotland’s 2014 independence referendum. Yet the report only mentions Scotland in one paragraph. The committee states that it found expert commentary asserting such interference in the referendum to be credible.

The published version of the report doesn’t reference any intelligence or further evidence to support the premise. In any case, the 2014 referendum was a robust democratic exercise, with a very high voter turnout (85%) and a clear, accepted result. Since the vote, debate has continued on the extent to which London-based media—and, in particular, the BBC—were biased against independence. Those media attitudes undoubtedly had a much greater influence on the referendum than Russia or any other external actor.

In recent years, the Scottish government has expanded its external representative offices, particularly within Europe. Besides its longstanding presence in Brussels, it now has representations in Paris, Berlin, Dublin and indeed London. This nascent paradiplomatic network will continue to mature over time, providing avenues for direct engagement in European capitals.

Scotland will face challenges in maintaining its European connections, now that it is part of a third country to the EU. But it will still have space to cultivate opportunities not available to the wider UK, due to its pro-European outlook. The European Friends of Scotland Group, established shortly before the UK left the EU and composed of members of the European Parliament with an interest in the country, is one promising forum.

Other opportunities will depend upon how Scotland’s European debate evolves. For all its pro-EU sentiment, Scottish politics is in fact largely disconnected from the EU’s major discussions. Expressing a desire to contribute to the forthcoming Conference on the Future of Europe would be one way to indicate continued interest in the EU’s direction.

Over the coming years, Scotland will undoubtedly seek to project an increasingly distinct voice in Europe and the world. Its emergent foreign policy would benefit from greater structure, whether through an overarching strategy or guiding principles.

Developing cogent European and international strategies, based on Scotland’s values and interests, would allow the Scottish government to demonstrate nous in international relations and to showcase how Scotland might conduct itself as an independent state. At the same time, Scotland can make contributions to European and global affairs from its current constitutional position.

The Scottish independence debate is evolving and a new referendum feels inevitable. With recent majority support for statehood in opinion polls, an independent Scotland within the next few years is a serious prospect. How Scotland relates to the rest of Europe and the wider world will be a central aspect of the conversation to come.

The Armenian model for Belarus

With Belarusians taking to the streets in unprecedented numbers and refusing to be cowed by state violence, it is obvious that Belarusian President Alexander Lukashenko has failed in his bid to steal another election and prolong his time in power. By all standards, his days in power are now numbered.

Many commentators are comparing the situation in Belarus to Ukraine’s Orange and Maidan revolutions in 2004–05 and 2014, respectively. But Belarus is not Ukraine, and nor is it particularly helpful to apply the Maidan model to the scene playing out in Minsk and other Belarusian cities and towns.

Although domestic issues of corruption and mismanagement have undoubtedly played a role in Ukraine’s post–Cold War political developments, the main determining factor has been the wish to bring the country into the European fold. The Maidan movement was a direct response to the Ukrainian government’s attempt to abandon the cause of European integration and reform. The revolutionaries openly mobilised under the banner of the European Union.

The uprising in Belarus is different. Domestic concerns are clearly playing the more salient role, and questions about the country’s orientation vis-à-vis Europe or Russia are almost totally absent. Belarusians are simply fed up with the 26-year reign of a man who is increasingly out of touch with society. The banner of the revolution is the forbidden white, red and white Belarusian national flag, which is likely soon to become the country’s official flag (as it was in 1918 and 1991–95). Indeed, no other banners have even made an appearance.

Still, while every political revolution must forge its own path, there are models available to help outside observers understand what may lie ahead. In Belarus’s case, I would offer an analogy not to Ukraine, but rather to Armenia in the spring of 2018, when mass demonstrations led to the resignation of longtime President Serzh Sargsyan and inaugurated a new democratic era for the country.

Armenia, too, has always had a close relationship with Russia, for both historical and strategic reasons. In 2013, the country abstained from joining Georgia, Moldova and Ukraine in entering into a ‘deep and comprehensive’ free-trade agreement with the EU, opting instead to join the Russian-led Eurasian Economic Union.

During the events of 2018, there were justifiable fears that Russia would intervene in some way in order to forestall another ‘colour revolution’ in a former Soviet republic. But, because Armenia’s geopolitical orientation wasn’t poised to change, the Kremlin seems to have restrained itself.

Under the best of circumstances, the Armenian revolution could provide a template for Belarus. The immediate goal is for a transitional administration to pave the way for a new presidential election under international monitoring. To ensure a smooth process, Belarus’s external orientation should be kept off the table. The election and broader struggle must be solely about democracy within the country and nothing else.

To create the conditions for the ‘Armenia model,’ the EU must craft its coming sanctions carefully, targeting only the individuals who are responsible for and involved in the obvious falsification of the election and the ensuing violent crackdown on protesters. Any action that imposes costs on Belarusian society and the economy more broadly would be counterproductive.

Europe and other Western powers will also need to accept that a newly democratic Belarus will still be dependent economically on Russia, at least for now. Long-needed reforms to modernise the Belarusian economy will, one hopes, gradually make that relationship more balanced within the framework of the Eurasian Economic Union.

Similarly, because a Ukraine-style association agreement with the EU won’t be an option, the priority should be to bring Belarus into the World Trade Organization, and to support it through the International Monetary Fund. Both of these processes would introduce conditions for domestic economic reforms, and the hope is that a democratic regime would quickly adopt them.

After its democratic revolution, Armenia continued to host a Russian military base outside of its capital, Yerevan. While Russia doesn’t have a comparable military presence in Belarus, it does have obvious security interests, with a small air force unit and two strategic facilities. On this and similar defence issues that do not represent a threat to anyone else, there is no reason why existing arrangements shouldn’t remain in place.

Whether Russian President Vladimir Putin would accept an Armenian-style political transition in Belarus is, of course, an open question. There are bound to be some in his inner circle issuing paranoid warnings about a slippery slope leading to NATO taking over the country. To head off those calling for a brutal crackdown to prevent any kind of democratic breakthrough, the West will have to be proactive in its diplomacy, making clear that it will support a democratic Belarus that still chooses to have close links to Russia.

The situation in Belarus is not a geopolitical struggle. It is a domestic matter, concerning the Belarusian people and a regime that has lost legitimacy and outlived its usefulness. Western diplomacy can help the Belarusian people arrive at a democratic outcome, but only if it is conducted wisely.

The cracks in Belarus’s regime are multiplying

Last Friday marked a symbolic breakthrough in Belarus. Thousands of people gathered at Independence Square in Minsk in front of the National Assembly, including many women and workers—the coalition that saved the opposition in its most difficult moment, when it looked like police violence might succeed in repressing the protest movement. For the first time since the protests started, the authorities did not intervene, even though the square is an area where protests in the wake of the rigged presidential election on 9 August had been strictly prohibited.

The 50 soldiers who were present symbolically set down their shields. Women adorned them with flowers and embraced the soldiers, further discrediting President Alexander Lukashenko’s regime and providing a moving example for other members of the security services to witness.

The next breakthrough came the following day. The staff of Belarusian state television (primarily technical staff, but also some presenters), an entity that had previously been utterly subservient to the government, began to show solidarity with the protesters.

The television staff gathered in front of their headquarters. When protesters joined them in the evening, Natalya Kochanova, chair of the parliament’s upper chamber, showed up, but was unable to mollify the crowd. On Sunday, state television reported on the protests for the first time. Soon after, Belarusian diplomats began to break with Lukashenko, beginning with the ambassador to Slovakia, followed by the chargé d’affairs in Switzerland.

Lukashenko tried to break the opposition’s momentum by holding a rally at Independence Square, with  5,000–7,000 bussed-in supporters. Exactly one week after he had stolen the election, Lukashenko sought a show of strength and to restore the red and green flag as his country’s national symbol. One day earlier, the white, red and white flag favoured by the opposition had flown above Grodno’s city hall.

The crowd comprised soldiers and officials, but also workers, musicians, children, and guests from Ukraine and Georgia—so-called ordinary people, about 10 of whom spoke. Their messages were inconsistent, which seemed to reflect the authorities’ own uncertainty about what to do. Those not personally dependent on Lukashenko and not directly involved in the crimes of his dictatorship talked about peace, often with tears in their eyes. An artist from Ukraine, recalling the Orange and Maidan revolutions, said: ‘We broke as a nation; we split in two.’

The speakers were met with varying receptions from the crowd. One overly conciliatory soldier was booed. But there were frequent acknowledgements that not everything was as it should be in Belarus and that not everyone was satisfied with the current situation. Throughout the rally, there were two clearly competing messages—a dichotomy that was evident when Lukashenko spoke.

The most frequently repeated words were mir and mirnyi (peace and peaceful), but the most important slogan was, ‘Belarus’ eto my!’ (‘We are Belarus!’). On the one hand, the authorities clearly feared civil war and responsibility for starting it; on the other hand, the sympathies of ordinary people at the rally were with the opposition: they want a normal life and are afraid of violence. The closer any of the speakers was to power, the more belligerent their tone.

A muscular lieutenant colonel from the OMON riot police spoke before Lukashenko, declaring in a threatening tone that he loved his country and would never surrender it. Lukashenko then announced that he was stationing troops at the border with Poland, near Brest, and stated that even after his death, he would not give up Belarus. His lack of self-confidence was clear; this was no composed leader in control of the situation.

The people listening to him were mostly from outside of Minsk. At first, they hovered around the rows of buses that had brought them, clearly feeling lost in the city. Finally, they were taken to the square, which had been blocked off in the morning and surrounded by groups of undercover policemen.

The pro-regime demonstrators were easily distinguishable from the opposition protesters, and there was a sense of tension on the square, reflecting the demonstrators’ fear for the future and their need to hear their leader, who they hoped would restore their confidence. When I started speaking Polish while reporting on the events for TVN24, I noticed hostile glances, and some people started shouting at me.

The opposition’s response to Lukashenko’s rally, like so much else in this civic uprising, had been prepared in advance. Demonstrators convened at Victory Square, in front of the Minsk Hero City Obelisk, where demonstrations began a week earlier.

Somewhere between 200,000 and 500,000 people turned out—the largest gathering in the history of the country, with columns of demonstrators stretching for kilometres. It was a great show of strength. Lukashenko had intended to shore up his position, but his crowd was numerically overwhelmed.

A week ago, the security services were able to drive the opposition out of the square with beatings, killing one protester. For this massive rally, the riot police, unable to do anything, didn’t even bother to show up.

The opposition was not afraid of a potential confrontation. Even though several thousand Lukashenko supporters appeared, many of them undercover policemen, anyone leaving the pro-regime rally melted into a sea of white, red and white flags, which took over the entire expanse of Independence Avenue. In front of the headquarters of the KGB, which holds many detainees, protesters shouted, ‘Let them out!’ At the end of the day, the once-menacing dictator and his thugs were completely drowned out.

Carl Bildt: Beware of flashpoints in a multipolar world

One of the world’s most experienced political leaders, diplomats and peace negotiators has warned that in the face of growing global discord, the democracies must support each other and build systems to communicate clearly with potential adversaries.

Former Swedish prime minister and foreign minister Carl Bildt told ASPI’s online ‘Strategic Vision 2020’ conference he hoped some form of order would emerge in international affairs. ‘At the moment, we are heading towards more disorder, a multipolar world with increasing tensions between the different poles, and the risk, of course, that a small issue suddenly becomes a big conflict,’ he said.

Interviewed by journalist Stan Grant, Bildt said that as the 1914 assassination of Austrian Archduke Franz Ferdinand in Sarajevo set in train events that culminated in World War I, the Scarborough Shoal or the Spratly Islands in the South China Sea might become a future flashpoint.

That must be avoided by building structures or alliances among the like-minded, and among democracies, but also by pursuing dialogues and understandings with adversaries.

‘And then we must handle the big economic shifts underway in the world.’

Before the Covid-19 pandemic, it had become clear that in a couple of decades China’s economy would be twice the size of the US economy, India’s economy would be the size of Europe’s and Indonesia would have the world’s fourth biggest economy, Bildt said. ‘That’s a very different world. And add to that, the transition to digital technologies. How do we make certain that the benefits of that particular digital world bring both security and prosperity to as many as possible?’

Bildt noted a lack of global leadership from the United States under Donald Trump and said a view of a ‘post-American world’ had emerged during the Covid-19 crisis.

He’d been struck by what happened when a May meeting of the World Health Assembly of the World Health Organization discussed the pandemic. ‘This was the number one global issue at the time. We had America absent, we had China very active, assertive, and we had a Europe that was able to go in and be sort of the mediating force that could bridge the gap and forge a global consensus.’ That, said Bildt, was a taste of the future if current US policies continued.

He contrasted the US approach now with memories of American leadership during the Ebola outbreak when, in 2014, President Barack Obama mobilised resources and sent military specialists to help in West Africa.

That leadership was completely absent now, Bildt said. ‘First, the US doesn’t have any ambition of global leadership of that sort any longer. Second, they denied the problem for far too long. And there’s no question that these factors add into all of the other factors in making this particular pandemic far worse than anything that we’ve seen in modern times.’

Relations between Europe and China, in the context of growing tension between China and the US, were set to be one of the big issues in the next year, Bildt said.

There were plans for a big summit between all of the EU leaders and the Chinese leadership in Leipzig, Germany, in September but that had been cancelled. ‘But still China looms big. And there’s an element of American, let’s call it pressure or whatever, to align with a more hardline approach that they’ve taken. That won’t happen.’

Europe, said Bildt, would develop its own approach.

Effective climate policy, for example, could not be developed without involving China and India.

But if Trump were to be re-elected, it would be extremely hard to persuade China and India to take major measures if the Americans were doing nothing.

Bildt said he had previously referred to Australia as the ‘canary in the coalmine’ for two reasons—because no other Western democracy was so dependent on China in economic terms, and because last summer’s bushfires showed the impact climate change was having here. ‘That means that we have something to learn from the experience of Australia.’

And while Europe and the US were confronted with potential Russian meddling in their domestic affairs, Australia was discussing Chinese meddling in its domestic affairs. ‘So, we have things to learn from each other.’

In the meantime, the rise of Russian President Vladimir Putin and his attacks on Ukraine had driven the resurrection of NATO, Bildt said.

With the collapse of the Soviet Union, the view in Europe view was that, without the threat of invasion, NATO was out of business. ‘Now, with Putin, the territorial defence issues in Europe are back. We now have NATO forward-deployed battle groups in Estonia, Latvia, Lithuania and Poland, a multinational surge that was absolutely unthinkable prior to 2014. But now it’s seen as absolutely essential. So, NATO is, in that sense, back in the core business of territorial defence of Europe due to what Putin did in Ukraine in 2014.’

Bildt said the Russians never fully accepted Ukraine as an independent state. ‘That is what ultimately led to the intervention decision that they took in the beginning of 2014, which I think historians will see as the biggest strategic mistake of Russia for a long time. I mean, losing the German Democratic Republic, yeah, that was bound to happen at some point in time, but losing the friendship of Ukraine is quite something from the Russian perspective.’

He did not think Russia would invade the Baltic states. Estonia, Latvia and Lithuania were firmly anchored in all of the transatlantic and European institutions. ‘As long as they have their internal cohesion under control or harmonious democratic control, I fail to see what Russia would gain.’ Such a Russian offensive would trigger a Europe-wide, and perhaps a worldwide, conflict.

Russia had made itself central to the conflicts in Syria and Libya, among others, and it was operating in the Middle East with an element of sophistication. ‘The fact is that Russia is now the country that is talking to everyone in the Middle East. The US is not talking to everyone in the Middle East.’ The Americans talked to some friends and refused to talk to other nations there.

Asked if Russia and China could maintain an effective strategic partnership, Bildt said that when Russia attacked Ukraine and faced Western sanctions, there was a tendency in Moscow to say, ‘We don’t really care about you. We’ve got China.’

That tendency had disappeared, he said.

‘There is now an awareness in Moscow that they are very much a junior partner. I mean, the economy of Guangdong province is much bigger than the economy of Russia. And they are also now beginning to see China, in terms of technology, is far more advanced than they are. So, there’s an apprehension.’

At the same time, both China and Russia felt that they needed each other to be a strategic counterweight on the global stage to the Americans.

Policy, Guns and Money: Offshore patrol vessels, India–China standoff and Europe’s Covid-19 response

In this episode, ASPI’s Malcolm Davis and Marcus Hellyer bring you an update on maritime and space issues, including discussion of Marcus’s report on the possibilities for Australia’s new offshore patrol vessels, SpaceX launches and Defence Science and Technology’s ‘Strategy 2030’.

Next, ASPI researcher Aakriti Bachhawat and our cyber centre’s Nathan Ruser talk about the ongoing India–China border standoff and Nathan’s analysis of satellite imagery of the disputed area.

Finally, interns Alexandra Pascoe and Daria Impiombato talk about the impact of Covid-19 on the European Union and how it can overcome the pandemic. They discuss the EU’s plan for economic recovery and how the proposed recovery fund could strengthen the union.

The end of Europe’s Chinese dream

A paradigm shift is taking place in relations between the European Union and China. The Covid-19 crisis has triggered a new debate within Europe about the need for greater supply-chain ‘diversification’, and thus for a managed disengagement from China. That will not be easy, and it won’t happen quickly. But, clearly, Europe has abandoned its previous ambition for a more closely integrated bilateral economic relationship with China.

In the past, when Europeans sought trade, economic and foreign policy reforms vis-à-vis China, their hope was always to increase contact with the country while making the relationship fairer and more reciprocal. The basic goal was to expand bilateral trade and pry open the Chinese market for European investments. Even when the EU toughened its approach towards China, its objective was still to deepen economic ties. The creation of new EU instruments to screen investments and enforce antitrust measures were presented as regrettable but necessary measures to create the political conditions for closer cooperation.

In a report published earlier this month, Andrew Small of the European Council on Foreign Relations argues that the EU’s engagement with China will henceforth have a new purpose: to structure the Sino-European relationship in a way that reduces Europe’s dependence on Chinese trade and investment. The new consensus is that Europeans should be more insulated from the whims of unreliable or overbearing foreign governments, whether in Beijing or Washington.

This new thinking is evident in statements from the EU’s top officials. For example, Josep Borrell, the EU high representative for foreign affairs and security policy, recently called on Europeans to shorten and diversify their supply chains and to consider shifting their trade ties from Asia to Eastern Europe, the Balkans and Africa. Sounding a similar note, the EU’s competition czar, Margrethe Vestager, wants to change state aid rules to protect European companies from Chinese takeovers.

For their part, most European governments didn’t want a change in strategy. Until now, they have been heavily invested in developing a cooperative relationship with China; on a practical level, they are desperate for Chinese-made medical supplies to get them through the pandemic.

Nonetheless, three factors have altered Europe’s strategic calculus. The first is a long-term change within China. The EU’s previous China policy was based on the so-called convergence wager, which held that China would gradually become a more responsible global citizen if it was welcomed into international global markets and institutions.

Instead, the opposite has happened. Under President Xi Jinping, China has become more authoritarian. As the Chinese state has increased its role in the economy and Chinese markets have become less hospitable to European companies, Xi’s signature policies—Made in China 2025, China Standards 2035 and the Belt and Road Initiative—have not only forced European companies out of the Chinese market, but also exported China’s model abroad. China is no longer merely competing for a share of low-value-added production. It is quickly climbing up the global value chain and penetrating the very sectors that Europeans regard as central to their own economic future.

Second, the United States has increasingly adopted a more hawkish view of China, particularly since Donald Trump entered the White House. Well before the pandemic, a broader ‘decoupling’ of the US and Chinese economies seemed to be underway. This change came rather abruptly, and was a shock to Europeans, who suddenly had to worry about becoming roadkill in a Sino-American game of chicken.

Consider the way many European states are struggling to placate both the US and China over the Chinese tech giant Huawei’s role in building European 5G networks. In theory, Europe’s new scepticism towards China should have paved the way for closer transatlantic cooperation on this issue. But by assailing Europe with tariffs, secondary sanctions and other unprovoked attacks, the Trump administration has muddied what should have been a clear choice.

But the third (and most surprising) development has been China’s behaviour during the pandemic. After the 2008 global financial crisis, China seemed to rise to the occasion as a responsible global power, participating in coordinated stimulus efforts and even buying up euros and investing in cash-strapped economies. Not this time.

Consider one telling episode from the pandemic. Early this year, as the coronavirus was raging through Wuhan, EU member states shipped nearly 60 tonnes of medical equipment to China. Much of it came from national strategic stockpiles, and it was sent discreetly, at China’s behest. By contrast, when the pandemic arrived in Europe, the Chinese government made a big show of offering ‘aid’ to Europe—much of which actually came with a price tag.

Worse, China has been using the cover of the Covid-19 crisis to pursue politically controversial economic deals, such as a Chinese-financed Belgrade–Budapest railway plan that was smuggled through Hungary’s legislature as a part of its Covid-19 emergency package. Similarly, Huawei has been loudly making the case for why the crisis justifies an even faster 5G rollout. And in the UK, a Chinese state-owned venture capital fund recently tried to take control of one of the country’s top chipmakers, Imagination Technologies.

Most disturbing of all, however, has been China’s exploitation of health needs to advance its own petty political interests. For example, Chinese officials have warned the Netherlands that shipments of essential medical supplies may be withheld in retaliation for the Dutch government’s decision to change the name of its diplomatic office in Taiwan.

Since the crisis erupted, the EU has shown more of a willingness to push back against Chinese disinformation campaigns, and has adopted measures to protect distressed European companies from being bought out by Chinese investors. But the most serious moves are yet to come. Europeans will soon start turning the talk of diversification into action.

One way or another, the structural changes working through the global order may have eventually produced a new debate about China anyway. But now that Covid-19 has laid bare both Europe’s dependencies and China’s true intentions, a strategic shift is well underway.

New crisis, same old problems for the EU

The European Union has no shortage of experience in responding to crises. But, as the number of coronavirus cases in Europe and the UK surpasses 1.3 million and deaths exceed 155,000, we’re seeing the bloc encounter the same problems it has faced in the past: severely delayed action due to the divergent views of member states.

While Europe’s problems may seem to have little relevance for Australia, a cohesive EU that can exert a credible presence and influence on the world stage is definitely in our interest. The Covid-19 pandemic is testing the union, so it’s important to understand where the EU is going wrong.

Although we’ve since seen more cooperative and collective action in providing unified advice on community measures, increasing production of personal protective equipment and repatriating EU citizens, it’s clear the EU got off on the wrong foot at the beginning of the pandemic when members’ unilateral responses trumped EU solidarity.

Nowhere was that more evident than in mid-March when not one EU member state had sent Italy much-needed medical supplies despite its huge and rising numbers of infections and deaths. Germany faced a backlash when it banned the export of protective medical equipment, and France continues to ignore calls from the EU to lift its export bans on drugs that could help treat coronavirus patients.

The tardy and limited assistance from the EU’s leading member states to others hardest hit by the virus has exposed two key issues: first, the negative consequences of a limited EU presence in health policy, and second, an all-too-familiar EU problem of individual members’ interests hindering a unified response.

Why doesn’t the EU have greater health capabilities? The answer is that member states have delegated exclusive competences to EU institutions only in certain policy areas. Public health is a shared competence between the member states and the EU—meaning that consensus must be built between member states and institutions on EU-level action. Understandably, that takes time. Yet, in the face of crises, member states have repeatedly shown a reluctance to look beyond their own interests, delaying collective EU action.

Such delays have long limited the perceived effectiveness of the EU and created resentment and Euroscepticism among members. During the 2015 refugee crisis, member states that weren’t immediately affected were reluctant to leap to the assistance of others. We saw a similar reluctance in the initially self-interested responses of member states to Covid-19, and we’re seeing it again now in the EU’s attempt to find a response to the economic situation wrought by the pandemic.

Some measures to assist ailing European economies have already been agreed upon; however, more will need to be done to support the EU’s longer term economic recovery. EU finance ministers met on 23 April, but were unable to agree on where the money for economic recovery will come from, highlighting Europe’s enduring north–south divide.

Italy, France, Spain and seven other eurozone countries had called for the mutualisation of debt or ‘shared European debt’ through the issuing of so-called coronabonds. But in the face of firm opposition from Germany, the Netherlands, Austria and Finland, ‘southern’ states are now pushing for grants funded by ‘perpetual’ (non-maturing) bonds to finance economic recovery.

‘Northern’ states favour loans, not grants, from the EU budget and use of the European Stability Mechanism to support spending and economic rescue packages. They’re unwilling to have their taxpayers foot the bill for economic transfers to countries that have previously been unable to manage their budgets.

That line is similar to the one taken by northern states in response to the eurozone crisis beginning in 2009. Such an approach stands to exacerbate existing inequalities within the EU, leaving the bloc weaker. Southern states were in a worse economic position before the crisis and have been harder hit by the pandemic than northern ones. Southern states are therefore questioning why they should be saddled with potentially unsustainable levels of debt in order to respond to the health and economic consequences of a pandemic that is not their fault.

Germany often makes reference to its commitment to European solidarity. However, risking the economic vitality of the bloc by not being willing to share the burden of economic recovery poses a serious threat to the future of the union.

This crisis, like many before it, invites a joint response. Naturally, that response cannot be achieved as quickly collectively as when single states act alone. But the impression that cooperation can be achieved only during ‘peacetime’ or on issues that are uncontentious and easy, and not during crises when member states need it most, continues to limit the effectiveness of the EU, which in turn fans anti-EU sentiment and diminishes support for the broader European project.

Recurring problems of collective action in the face of dominant members’ interests haven’t broken the union yet, but the Covid-19 pandemic is proving to be a real test of the EU’s fitness and value. If the bloc is to endure, more political buy-in will be needed to drive outcomes that showcase the strengths and benefits of the EU, rather than just its weaknesses and deficiencies.

The déjà-vu virus?

The Covid-19 pandemic is accelerating three fundamental geopolitical trends: the rise of Asia, the decline of the United States, and the strengthening of Germany within Europe. Combined, these shifts may well prefigure the world of 2030. But, before then, political leaders must overcome the current crisis—and not repeat the catastrophic errors of a century ago.

Today, the future and the past seem to be colliding. Now that Covid-19 has brutally thrust much of the world into the digital economy, many people won’t wish to return to the pre-pandemic world as if what we’re now experiencing had been a mere blip.

The virus doesn’t signify the end of globalisation, but it’s probably a bad omen for a certain variety of it. For example, will leaders still want to attend the World Economic Forum’s annual meeting in Davos and mingle in a dense crowd of peers, rather than networking in ways that respect social-distancing norms in the face of a deadly virus?

But above all, the pandemic is confirming the ascent of Asia—not just China—and the decline of the West, and the US in particular.

By far the world’s strongest military power, America was singularly disarmed when confronted with the novel coronavirus. The country’s healthcare system couldn’t cope with the scale of the pandemic (although the US was hardly alone in that regard), while the long lines of people patiently waiting to receive food handouts evoked images of the Great Depression prior to the New Deal. And America’s political leaders, caricatures of brutality and opportunism, have simply made things worse, further tarnishing the country’s international image in the process.

True, America may recover part of its dignity and humanity by tossing President Donald Trump aside in November’s presidential election. But that will require Democrats to unite behind their presumptive nominee, Joe Biden, as former president Barack Obama emphasised when recently endorsing him.

Biden has a real chance of winning. US voters may well punish Republicans for their blundering response to the pandemic and the consequent economic devastation, just as South Korean voters recently rewarded President Moon Jae-in’s ruling party with an absolute parliamentary majority, following his administration’s so-far successful efforts to contain the coronavirus. But even if Trump is defeated, America won’t recover the central global position it occupied for three-quarters of a century.

America’s decline, however, doesn’t mean that China will carry the global torch. Covid-19 has just as ruthlessly exposed China’s flaws, including its government’s lack of transparency. The outbreak there fuelled a dramatic economic collapse in the first quarter of 2020, and the country remains vulnerable to a second wave of the pandemic. All of this suggests that the world may be becoming non-polar, rather than bipolar.

Neither Russia nor the European Union can pretend to fill the gap at the top. Like Iran and Turkey, Russia may well emerge weaker from the crisis. In fact, President Vladimir Putin may have far more to fear from Covid-19 than he does from Russia’s enfeebled opposition parties.

After a very uncertain initial response to the pandemic—to put it mildly—the EU seems to be regaining some clout thanks to a trio of women leaders: German Chancellor Angela Merkel, European Commission President Ursula von der Leyen and European Central Bank President Christine Lagarde. But this crisis has mainly demonstrated Germany’s strength rather than Europe’s resilience.

Despite being Europe’s most populous country, Germany has registered at least three times fewer deaths than its main EU peers, while Merkel, who until recently was widely seen as a lame-duck leader, enjoys higher trust ratings than any other European leader. She has proven that a politician can follow their ethical instincts—as she did in opening Germany’s borders to migrants in 2015—and still be seen five years later as the best protection against fear and uncertainty.

If history is indeed accelerating as a result of Covid-19, we still have to look to the past to draw the right lessons. And the pivotal year in this case is 1920.

A century ago, in the immediate aftermath of World War I and the devastating Spanish flu pandemic, political leaders proved incapable of finding the right answers to the huge challenges they faced. As a result, the world fell first into the Great Depression and then into World War II.

Today’s leaders are confronted by different but equally daunting challenges. In particular, they have to strike a delicate balance not only between protecting their citizens’ lives and restarting the economy, but also between liberty and security.

If governments go too far in prioritising the economy over public health, they run the risk of a second Covid-19 wave that would have devastating consequences for both. Likewise, if they champion liberty above all else, and ignore the contribution of tracking technologies to taming the pandemic in Asia, for example, they risk that one day, less prudent and moderate political forces may apply libertarian principles brutally and with total disregard for public welfare.

In the 1920s and 1930s, pacifism born out of a terrible war contributed to the victory of fascism and an even more horrific global conflict. Today, we must not allow economic greed or libertarianism to take us down an equally disastrous path.