H I G H L I G H T S
• EU and its neighborhood
EU and its neighborhood
As the year 2021 dawned, there was collective good feeling in the EU with the election in the US of Joe Biden, a Democrat who believed in the trans-Atlantic alliance, and coming to the end of the constant EU baiting by Donald Trump. The US and EU basically being on the same page as far as global issues and thinking was concerned was evident at the G7 Summit and at the UN’s climate conference held in Glasgow in November 2021.
But as 2022 dawned, the trans-Atlantic alliance faced a challenge, the proportions of which had almost been forgotten in Europe with nearly 75 years of peace and the old Soviet bloc having broken down. This was armed conflict on the EU’s doorstep, between Russia and the west supported Ukraine. Now on for more than three months, several parts of Ukraine have already witnessed unbelievable destruction and devastation and more than 15% of the countries’ population has been forced to flee as refugees. The conflict in Ukraine may be between the Russians against the Ukrainians but really pits Russia against the Western alliance of the US and Europe. And apart from Ukraine, its heaviest costs are on the EU, which, of course, cannot be absolved as being unblameworthy in the games played between the West and Russia in Ukraine for nearly two decades.
The recent months also saw a major election in the EU. This was in France where President Macron was re-elected, once again besting Marine Le Pen. As a strong EU supporter and someone who may now think (given that Angela Merkel is no longer around) that the major mantle of EU leadership is on him, Macron’s win has once again shown that while the nationalist right wingers have a strong presence in France, the majority is centrist and pro-European. This having been noted, elections to the French National Assembly will be held soon with every possibility that the outcome forces Macron to be in a ‘cohabitation’ government with those with differing political ideologies. This can impact on how France reacts to EU’s internal policies.
The seminal national election, though, was held late last year in Germany. After a decade and a half helming Germany, and, indeed, Europe, Angela Merkel retired from politics and her party, the CDU, hasn’t returned to power. The new Chancellor, Olaf Scholz, is from the SPD and had been a partner in Merkel’s last government and could have been expected to continue with her foreign policy. With Russia this would have meant continuing to build links, in particular deepening hydrocarbon ties and opening a new pipeline, Nordstream2. But, of course, this was not to be and Olaf Scholz had, perhaps, no option but to stop the pipeline and join in the curtailing of economic ties with Russia.
Russia-Ukraine tensions from the very start of 2022 saw the US (supported by the UK, which was now no longer a part of the EU, and NATO as an organization) and the EU countries on seemingly different pages. While for the US and UK, Russian posturing, including amassing troops on Ukraine’s border, was an unforgiveable (by the West) challenge to Ukrainian freedom to decide on its future (including on joining NATO), the EU in general and Germany and France, in particular President Macron, sought to find diplomatic ways forward. Agreements reached in 2014 in Minsk, in the wake of the Russian annexation of Crimea, were sought to be energised as was a dialogue known as the Normandy process. This sought to bring together Russia and Ukraine with France and Germany. The US and UK not being a part of these processes, showed little interest in them. Domestic politics in the two countries also favoured a hawkish approach against Russia.
Initially, there was understandable hesitancy in the EU for curtailing economic ties with Russia – indeed, it is worth recalling that while President Biden was categorical that Nordstream2 would be cancelled, Olaf Scholz, on his maiden visit to Washington as Chancellor, was notably silent. Even after the start of hostilities in Ukraine and the initiation of levying sanctions on Russia, the Germans were reluctant to cut off the Russians from SWIFT. And as pressure builds for further tightening the sanctions on Russia, the Europeans are reluctantly finding themselves further corralled and may be forced to agree to stop or drastically curtail oil supplies from Russia even though they are critical for them and would seriously hurt their economies and people.
There has also been a significant movement, especially in Germany, on issues of defence with the country now indicating its willingness to seriously step up its defence expenditure and NATO contribution. It has reversed its long-standing policy of not sending lethal equipment to conflict zones and joined in supplying the Ukrainians with weaponry.
While there are people in EU who believe that the close economic ties that were fostered in the past by European nations, in particular Germany, with Russia need to be relooked at and Russia hemmed in and brought to brook no matter the costs, the fact is that these costs are fairly significant and would have to be borne almost entirely by the EU countries with Germany taking the biggest hit. This, however, not withstanding and no matter whether they fell in line willingly or were corralled into a common western line, the fact is that the line on Russia in Europe today is one that is largely determined in Washington. This, of course, has implications for multipolarity at the global level (as would a diminishing of Russia) including by providing what could be seen as a pass for China.
China, on its part, had over the years developed into the EU’s largest trading partner coupled with significant EU investment in that country. While to expect a large scaling back of these ties doesn’t appear possible, the deadly impact of COVID-19 has certainly seen China moving from economic opportunity to a country requiring a degree of questioning in the popular perception in Europe. This is, perhaps, best witnessed in the fact that the EU-China Investment Agreement reached in December 2020 is still frozen in the European Parliament. The lowering of China in a positivity rating in Europe is also pushed further down by the Chinese support for Russia in its action in Ukraine.
The EU and China held their 23rd Summit via Video Conference on 1st April 2022. The EU called on China to support efforts to bring about an immediate end to the bloodshed in Ukraine. It was also clear with China that all attempts to circumvent sanctions or to aid Russia by other means must be stopped. The Chinese have also been belligerent with certain Members of the European Parliament for their criticizing China and have sanctioned them. The EU’s disappointment with China on these “unjustified” actions was also underscored by the EU.
Recent weeks have seen a flurry of in-person activity on the India-EU front, even as the conflict in Ukraine rages, prompting a legitimate ask as to whether the relations are at an inflexion point. The first visit was that of the President of the European Commission, Ursula von der Leyen as Chief Guest at the Raisina Dialogue. The Raisina Dialogue also saw several Ministers and former HOS/G from EU countries participate. Soon thereafter, 2-5 May 2022, Prime Minister Modi undertook a whirlwind tour of three European capitals, visiting both Berlin and Paris, and participating in an India-Nordic Summit in Copenhagen where he interacted with six European leaders from the Nordic countries giving sway to both substance and development of personal chemistry with his counterparts.
One facet of the ask is the possibility of significantly improving economic ties including through an FTA and an Investment Agreement and collaborative action on climate change and sustainable development related activities. The other side is political with the Europeans being sceptical of the position taken by India on the Ukraine issue with an unwillingness to be condemnatory of Russia. For India it is furthermore critical that the upheaval in Europe does not result in the global gaze losing sight of the challenges in the Indo-Pacific and Chinese hegemonistic actions.
As things presently stand, there are indications that political heft is being brought to bear by both India and the EU on moving on the FTA and the Investment Agreement. Without doubt the signing of these agreements will be the true inflexion point in ties given the EU’s competencies and huge capabilities in the economic sphere, including trade, technology, innovation and financing. This will also give the required impetus for fostering green and clean in India and meeting India’s climate goals through collaboration with the EU.
Focus on convergences, particularly economic, while accepting that there are divergences, including on Ukraine/Russia, continues to be the best enabler for a win-win for both India and the EU.
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(The views expressed are personal)