Is nuclear too expensive for climate change abatement?

The European Commission rigorously reviews investment agreements of EU member states. For nuclear power, the United Kingdom and Hungary are suspected of disproportionately subsidizing agreements. Are EU member states reviving an uneconomic energy technology? How does this affect climate change abatement policy?

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Recent nuclear investment agreements between EU countries on the one side and deep-pocketed non-European partners on the other side have become subject of scrutiny by the European Commission (EC). The latest such assessment concerns an investment agreement between Hungary and the Russian Federation for nuclear power in Paks. It resembles another recently closed case before the EC regarding the construction of a European Pressurized Reactor (EPR) at the UK’s Hinkley Point Site. As with the UK, Hungary is subjected to critical scrutiny by the EC over disproportionate state aid and violation of market pricing. Both the UK and Hungary argue nuclear energy is cost-competitive; but how so exactly?

Continue reading Is nuclear too expensive for climate change abatement?

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EU vs. Gazprom: Let’s get ready to rumble or legitimate energy security concerns?

Short answer: Leave the general EU – Russia tensions aside, the EU has legitimate energy security concerns.


Just one week after a similar case with Google, the European Commission (EC) has charged Gazprom with abusing its dominant market position in Central and Eastern European gas markets – and hence, was breaking EU anti-trust rules. It added Gazprom may have limited its customers’ ability to resell gas, potentially allowing it to charge unfair prices in some EU member states.

Gazprom rejected the Commission’s objections, calling them “unfounded”. “Gazprom strictly adheres to all the norms of international law and national legislation in the countries where the Gazprom Group conducts business,” the company said in a statement.

The map indeed indicate the tendency of higher Gazprom in EU countries that are highly depended on Gazprom.

Gazprom prices in europe 

Continue reading EU vs. Gazprom: Let’s get ready to rumble or legitimate energy security concerns?

Germany’s new foreign policy role: How is it doing?

A German senior Diplomat recently said that if former foreign minister Guido Westerwelle had not embraced the “culture of restraint” so proudly, it would be impossible for the current players to throw it overboard so comprehensively.

A year ago, at the Munich Security Conference, German President Joachim Gauck explained “While there are genuine pacifists in Germany, there are also people who use Germany’s guilt for its past as a shield for laziness or a desire to disengage from the world.” More so, the President’s declaration was only part of a broader campaign that was joined by foreign minister Frank-Walter Steinmeier, and, much more obvious, by the example of chancellor Merkel’s recent schedule deriving from high-profile and international crisis areas. She shuttled between Berlin, Kiev, Munich, Washington, Ottawa, Minsk and Brussels on consecutive days – quite impressive, considering this is “only” the foreign policy agenda.

This re-emergence of German’s foreign policy has already received a lot of attention. The economist –in its current issue– addresses just that phenomenon. The article revisits the town-hall meetings with German voters and online debates with foreign experts which were asked: what is wrong with German foreign policy and how should it change? “The reactions, some vague and some utopian, were released in a big data dump this week.”

That said, how should the renaissance of German foreign policy should be valued?

The characteristics are clear: little (or no) willingness of involving military components (true, Germany is part of NATO, but even within NATO it plays mainly supportive role, outside its collaborative role in NATO, Germany still sticks closely to its post-war pacifism), strong sense of willingness to act with partners and within institutions, and  its self-perception of a “middle-power” which somehow derives form memories of the first world war: especially the metaphor of sleepwalking into the war (and the Book with the same title) is often used as a reference. Jan Techau of Carnegie Europe has another way of saying it (paraphrased): desire is moral clarity, which reflects the country’s trauma over its past.

Frank-Walter Steinmeier has just recently explained his understanding of “the DNA of German Foreign Policy”, he cites the usual appreciated commitments to promote “peaceful conflict resolution, the rule of law, and a sustainable economic model,” but he also admits that “Expectations are high – perhaps too high at times.” And that maybe because of the unfortunate fact that embracing pacific does not always lead to peaceful solutions.  To be credible, strategy needs a full tool-box, for “diplomacy without arms is like music without instruments” as Frederick the Great said. But with voters still insisting on ethical clarity, Germany lacks the consensus to be a confident leader

Generally, the German approach sounds like an adequate method for now, but the public debate (in Germany) may not catch-up with the new role and the new responsibilities of Germany’s leaders – but it needs to. Joschka Fischer, himself former foreign minister, recently stated that Merkel’s “ten years in power were largely characterized by a new German Biedermeier era. The sun was shining on Germany and its economy, and Merkel regarded it as her highest duty to maintain citizens’ sense of wellbeing by not disturbing them with politics. But Germany’s new significance in Europe has put a brutal end to Merkel’s neo-Biedermeier era. She no longer defines her policies in terms of “small steps”; now she takes strategic threats seriously and confronts them head-on.”

But Fischer is further appealing to a consolidated approach, with the rational that if Europe fails to trail back to solid growth (which – he hints – can be facilitated by the Merkel government) in an inclusive manner, the EU will be too weak to accept the new challenges in the east.

Back to Germany’s actual foreign policy. The perception and the expectations of Germany’s role in the Politics towards Russia may be not accurate. As Hans Kundnani (an expert on German Foreign Policy) has stated in his blog: Because Ostpolitik […] resonates so positively and powerfully, there is a tendency to invoke it to win support for new policies – even where those policies have little to do with the one being invoked. Ostpolitik was conceived during the Cold War in order to reunify Germany through a series of small steps; it is of little help in dealing with authoritarian powers in a post-Cold War world.”

What to know about the Minsk Agreement?

Participants:

  • Russia: President Putin
  • Germany: Chancellor Merkel
  • France: President Holland
  • Ukraine: President Poroshenko
  • Facilitator (Belarus: Lukashenko)

Outcome:

Hard Facts:

The document calls for:

  • a cease-fire to begin Feb. 15,
  • the withdrawal of weapons and
  • the enactment of constitutional reforms in Ukraine.

Additional Facts:

In addition, the document on the whole does fulfil several of the Kremlin’s long-standing demands with regards to the status of Donbas, regardless of the fact that Ukrainian President Petro Poroshenko has denied that the agreement includes provisions for the creation of the federalization of Ukraine (or even of autonomous regions).

The provision on the cease-fire and the withdrawal from heavy weaponry stems from the original agreement of September 5th.

Let’s talk politics

Another crucial fact is that the agreement requires withdrawing foreign forces and mercenaries from Ukraine. Separatists have depended heavily on the combat power of the Russian military and Russian volunteer forces. Without these, the separatists would have been incapable of repelling the Ukrainian offensive, and in the future, they will be rendered much weaker than their Ukrainian counterparts. Hence, this is the most crucial point to watch!

Perhaps, the matching negotiation point for Russia to relent on this point was that the agreement prescribes to constitutional reforms in Ukraine that would transition the country to a more decentralized system of governance — although it offers only few details to what that extend this would happen. The accord also outlines a requirement for the Ukrainian government to enshrine into law a special status for Donetsk and Luhansk provinces that would allow them to form local militias and work with the central government to appoint local prosecutors and formulate economic and social policies for the regions.

Merkel (Germany) and Hollande (France) highlighted the fact that the agreement does not completely resolve the conflict and said there is much work left to do – while Merkel did note that the negotiations offered hope for a solution, Hollande referred to the agreement as “relief for Europe,” perhaps also hinting on the difficulties the EU is facing with keeping sanctions in place. If the cease-fire holds, the European Union will probably suspend the next round of Russia sanctions, which were scheduled to be applied Feb. 16.

Also worth noting:

Notably, the United States was not formally represented during the night-long negotiations in Minsk, but its reaction and willingness to support the agreement will be crucial. The signing of the new Minsk agreement, as well as Russian President Vladimir Putin’s direct participation in the negotiations, points to the Kremlin’s willingness to at least partially de-escalate the conflict at this time.

Reactions:

Reactions from other states were quite positive, but cautious.

US: State Department spokesperson Jen Psaki acknowledged to reporters, “the proof is in the pudding.” She continued, “A piece of paper is just a piece of paper until it’s implemented,” and warned that there was evidence that Russia was continuing to take “aggressive actions.” This amid reports from officials in Kyiv claiming that 50 Russian tanks had crossed the border into Ukraine even as the talks were ongoing.

European Council President, Tusk: “Today’s Minsk agreement gives hope. Hope is important, essential, but it is not enough. The real test is whether the ceasefire will be respected.

Polish President Komorowski: “It is good news. We are hoping the implementation of this agreement will end the crisis. … The key to solving the problem lays still in Moscow. Poland has been supporting and will continue to support Ukraine in its pro-European direction.”

High Representative Federica Mogherini: “This is not solving everything… but having good news is better than bad news” (in interview).

Syriza – Using Russia as bargaining tool?


When Syriza came to power, it was no surprise for leaders in Brussels and Berlin that the new Greek government is trying to accumulate as many bargaining chips as possible.

While on the domestic front, Alexis Tsipras and his team, emphasized that they will stick to campaign promises – which is (call it whatever you want) a lower debt burden and consequently acquire more space for manoeuvring social programmes, such as raising the minimum wage, freezing privatizations, rehiring workers in the public sector and reducing costs for patients in public hospitals.

So far so fair

The suggested programmes may even find support at some groups of the EU parliament (though the EU parliament has little to say on the Euro crisis and the Troika in Greece). Indeed, the European Greens have been critical on the austerity measures, and so have been some other groups. But what is different are the means to oppose them. The main cleavages between the example of European Green and Syriza (and other left-wing parties) are the position on Russia.  Perhaps this is one reason why Syriza is portrayed in such an extremist light, while the anti-austerity position is not uncommon among Europe legislators.

It’s politics, stupid.. (yes, I know this phrase is use way too often)

The real issue for Brussels may be the bargaining card Syriza is using – and that is what politics is about, like it or not.  Presuming it was on purpose, Syriza made something that was rather annoying for Germany, puzzling for the European Union and attractive for Russia. On Jan. 26, his first day as prime minister, Tsipras did two notable things: He placed a rim at a war memorial honouring the Greek victims of Nazi occupation (and, of course, there is nothing wrong with that, but the symbolism is key, not the moral argument), and he received the Russian ambassador before meeting any other foreign official. Tsipras also appointed the leader of the Independent Greeks — a nationalist party that wants to develop closer ties with Russia — to the position of minister of defence. Though symbolic, these actions were part of a wider strategy. It is not symbolic though, when Syriza was about to block (or complained about) the new round of sanctions towards Russia, but latter agreed.

So, it’s a bargaining card, but can it reduce tensions between EU and Russia?

Greece has a strategic interest in keeping good ties with Russia (as many other states), one is to maintain a bargaining edge, but the other is that Greece is dependent on Russian natural gas and pricing is always a sensitive issue. Moreover, though an agreement between Athens and its EU lenders is the most likely scenario, failure to reach a deal could force Greece out of the Eurozone and if that is true, Greece would indeed be dependent on Russia.

Syriza’s game plan may see no alternative than to keep the relationship to Russia in good deeds, and whereas this is an issue for the Common Foreign Policy of the EU, but can not say for sure that it might not be even fruitful in the long-run, a discourse may even help the process. Let’s say it is still too early to call.

Meanwhile, Tsipras emphasizes that the negotiations with the EU are priority, but there are little doubts that the door is open. And the bargaining chip is here to stay, that’s for sure.

EU Policy towards Russia: Getting the frequency right – it’s the signal not the noise

The European Council on 18 December 2014 confirmed the EU’s resolve “to stay the course” and that it is “ready to take further steps if necessary”.

Well, if the EU wants to seriously pursue its goals, it needs to take more precise action in aiming for understanding the issue. At the Foreign Affairs Council (FAC- Meeting of all 28 EU foreign ministers under the Chairmanship of HR Mogherini) an issue paper was used as a starting point for discussions. There is nothing wrong with that. And there is even nothing wrong with no deep analysis on what has actually happened – ministers have little time and usually this is done in advance, mostly by less senior people (in that case, presumably, the Political and Security Committee – PSC).

EU has the wrong frequency

The main issue with the paper is that lacks even an abstract of what would come out of  a reflective assessment of Russia’s interest towards the EU, and hence, the means to achieve the EU’s goal. Which, by the way, is not to isolate or destroy Russia, but to find a way to make Russia modify its behaviour to correspond to international law and to an OSCE-based international order, and thereby, in the end, to arrive at a new level of co-existence and cooperation that would also include elements that appeal to Russia.

To be fair, the paper does talk about Russia’s interest. Here’s what is says:

“Russia’s interests with regard to cooperation with the EU, in addition to the lifting of sanctions, mostly lie in: resumption of formal EU-Russia dialogues; limiting a perceived negative effect of EU-UA association on Russia; recognition of the Eurasian Economic Union; enhanced technology transfer and investments; exemption of Gazprom from provisions of the third energy package; achieving visa freedom for short term travel; increased transport cooperation while maintaining Siberian overflight fees and imposing PNR requirements.”

While this all may be true, it is not on the same type or nature of the mentioned EU’s interest – which among others also include an end to Moscow’s destabilising activities on the EU’s borders and to Russian pressure in the common neighbourhood, and improvements in fundamental freedoms and human rights in Russia.

Let’s face it; there will be no expert that would seriously claim that these interests can be seriously exchanged in order to find a compromise, not mentioning succeeding to find a long term agreement. E.g.: Exempting Gazprom from provisions of the third energy package will not make Russia stop putting pressure on its neighbours. Or even more foolish, who would think Russia stops putting pressure on neighbourhood or improve fundamental freedoms because it wants Gazprom to be exempted from the third energy package.

Russia’s behaviour is also an internal matter

More convincingly is the idea of Russia willing to promote itself as a great power. To which Putin’s rhetoric fits – one just needs to read the speeches given to the diplomatic corps. That itself would not be such a big problem for the EU, but the overlapping spheres of interests, to put it discreetly, and the willingness to have this sphere starting from outside its own boarders, creates a cleavage of interest.  That said, it is not just for the purpose of power game rhetoric, it is, perhaps, more because it resonates well within the Russian population. Putin has gained popularity since the conflicts in the Ukraine started.

This is where the subject gets critical. The Kremlin may regard the current policies as successful in the sense that it gives its decision-makers, especially Putin, some leverage.

Furthermore, an ever more integrated EU is not in the interest of Russia either. A fragmentation of Europe (and EU) would play in Russia’s hand, while it is pursuing a path towards reallocation of the means of a great power.

Differences are even greater than the FAC thinks

Henceforth, the differences between the EU (or West, if you want) and Russia are even more profound than admitted. And this would not change if the EU focuses on relatively insignificant issues. To underline point, just think of what would happen if in a decade or less, a similar situation would occur with another east European state. Quite possibly, the arguments would be the same of today.

In addition, the different perceptions with European states on these profound differences are striking. Whereas in Germany, people seem to be remembering the time of Ostpolitik and therefore prefer a balancing act; Poland, and its people, seem to remember its history with Russia, and hence, have a very different reaction and understanding. But EU citizens need to understand that the current developments will, one day, be a common EU memory.

As stated by Kadri Liik in a piece on a similar topic: “We want to share the continent with a Russia that accepts international rules, respects its neighbours’ freedoms, and seeks influence by means of its own attractiveness rather than by coercion.”

Poland: more significant than ever

History and Geo-Poland

Poland’s geography makes it a critical place in Eurasia, and hence (particularly since Mackinder’s heartland theory), a critical place for international power politics. That would be the basic argument of realist and geopolitical thinking.

Because of Poland’s geographic exposure to Russia and its traditional strategic interests in neighboring countries like Ukraine, Warsaw has had the most aggressive stance toward Moscow of all the EU countries. When Poland had the EU presidency in 2011, a key focus of Prime Minister Donald Tusk (Now European Council President) and former Foreign Minister Radoslaw Sikorski, have aimed at bringing Ukraine closer to the European Union through the signing of association and free trade agreements. But the interest of Poland is also partly due to the fact that parts of western Ukraine used to be part of Poland just before the WWII.

In addition, going through Poland’s history, it has rarely been the master of its fate nor the captain of its soul – as the poem of invictus goes. The history of Poland finding its place in Europe is as fascinating as it is dramatic – and, what’s more, Poland, have often been betrayed (from almost every big power within Europe over the last centuries). But as many new EU  and NATO members, they have embraced the new strategic opportunities that come with it.

Poland’s place in EU and NATO

Interestingly, and perhaps deriving from its geographically position, it seem Poland is identifying itself more with NATO then, say, Germany.  In 2014, Poland (and the Baltic states) demanded that NATO makes greater commitment to its collective defense due to the perceived or potential military aggression by Russian. Yet, NATO was not willing to establish a permanent military base on their territories, though, the United States and NATO countries have indeed increased focus and intensity of military exercises in the region.

In a recent op-ed by Poland’s former minister of defense and now Senator Bogan Klich, entitled “Standing Up to Putin”, he writes that “Of course, there still has been no direct Russian attack on a NATO member state. But the state of turmoil just beyond the Alliance’s eastern border has created a reasonable fear in NATO’s Baltic member countries, as well as in Romania and Poland, about whether or not the Alliance would actually stand with them should they be threatened.” And thereby, once more, emphasizing Poland’s strategic interest of having a strong stand together.

Digging deeper, due to Poland’s profound skepticism towards Russia, it managed to undermine other potential assets of Russia’s geopolitical toolbox. Most notably, to ease dependence of Russian gas by constructing a liquefied natural gas import terminal and exploring its own large shale gas reserves for supplies in the long-term.

This is also confirmed by Klich, who writes “In the long-term, the best course of action will be to reduce European dependence on Russian energy. New liquefied natural gas terminals in Europe and legislative changes in the United States to enable the export of America’s burgeoning energy supplies will demonstrate to Russia that its window of energy-based leverage is closing.” That said, Poland also needs to watch out. The same reasons that make Poland attractive to occupy, and this notion of invasion may seem obsolete until recently, makes it attractive to be used as a proxy power, by the US, for example, which could undermine the EU’s cohesion as well. Hence, I regard Mogherini’s choice (or by her advisors) to do her first trip in office to Poland to meet the new Foreign Minister Grzegorz Schetyna, as an excellent one. The making of Tusk as European Council president may also be along the same line.

No doubt, Russia cannot be appreciative for these developments. Hereafter, the example of Poland to be repeated by Ukraine (though, arguably, that wasn’t really ever an option in mid-term) was, for sure, taken in consideration by Russia strategists.

Germany remains more significant

But make no false interpretation. Germany remains the key player within the EU, and not only the Euro zone. It is the one setting the agenda and this will also influence the area of foreign relations. It has, lately, played a very active role in Ukraine crisis – a role that fits surprisingly well, and was necessary, because of the risk of escalation. But that is another topic. The currently adopted stronger sanctions towards the rebels in the East of Ukraine and the lack of the same towards Russia was surely promoted by Germany.

Implications

More significance means more power. But more power means more responsibility. Poland has a better hand to be the master of its fate or the captain of its soul, but it should be aware that its position isn’t necessary easier because of this fact. Every move, every statement is now closely watched. Moving towards EU and NATO, and away from the former Warsaw (yes, I am aware of how paradox this is) Pact may enable Poland to become a significant player, but maneuvering the old Ship called EU, can be challenging.

Especially, because Russia is really exploiting and take advantage of the yet to be integrated Europe, presumably to facilitate also the disintegration of Europe from the US, and hence, NATO. Yet, the EU does not have one shared strategic vision. Certainly, Poland (as some others) is trying to shape this vision actively.