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Global geopolitics has undergone major changes and even fragmentation over a very short period of time in the beginning on the 21st century. These changes and present challenges affect fundamentally the European in general and the member states, in particular, political economy. In the latter, the aspects of sovereignty (e.g. in resources’ sufficiency and technology), energy, twin transition, defense and solidarity occupy ever important place.
Among global geopolitical transformations some have become most vital for the European continent: e.g. increasing China’s economic influence, tensions in the EU-US transatlantic partnership, a critical stage of the European energy markets (triggered by the Russian invasion in Ukraine), as well as growing pressures on national governance and democratic values around the world. Practically, the EU needs a secure and sustainable global supply value chains in trade and services in order for the European socio-economic integration model to thrive.
National governance systems constantly feel fast-changing geopolitical transformations induced by the climate mitigation, circular economy, sustainability and digitalisation, etc. Numerous aspects of modern critical conditions in various spheres of contemporary national development consequently affect national sovereignty in such spheres as technology, general collective security and its more specific sectoral aspects: e.g. in energy, food, health, military and cyber security.
But most important for European continent is security of supply in needed resources, goods, products and components for the socio-economic integration; as the global industrial leader, a major trading partner and a destination of foreign investment it is capable of securing stable daily citizens’ lives and wellbeing.
“Changing effects” for the European integration
In recent press release, Commissioner Th. Bretton underlined the EU’s view on European place in geopolitics. Some aspects of the “changing effects” for the European growth are described below…
First, sovereignty; the concept has acquired recently a multi-faceted dimension among the European politicians: e.g. French President E. Macron described in 2017 sovereignty as an “ability to exist in today’s world to defend values and interests”. However, the German Chancellor O. Scholz said recently that European sovereignty means in essence that states are “more autonomous in all fields, that we assume greater responsibility for our own security and we stand yet more united in defence of our values and interests around the world”.
Reference to: https://ec.europa.eu/commission/presscorner/detail/da/speech_22_5350
As is seen from the EU leaders’ opinion, sovereignty is both complicated and sometimes quite an divisive issues: i.e. the term could be subject to various interpretations both in the European context and globally. Besides, quite often some leaders even prefer using such terms as “resilience”, while others suggest those of “open, strategic, or simple autonomy”.
But nevertheless, any governance should find and seek some convergence among existing theoretical notions dealing with peoples’ wellbeing.
Second, energy issues: here the EU leaders are generally resolute to “decouple” from Russia; hopefully without self-isolating. In this regard, the EU member states are forced to diversify suppliers, speed up so-called double transition (to remedy climate change and to digitalisation), as well as to proceed to developing green energy sources and preparing structural reform in the electricity market. Energy consumption and production account for about two-thirds of global greenhouse gas emissions: during last decades, about 80 percent of the global energy mix has been based on fossil fuels. A transition to a more inclusive, sustainable, affordable and secure global energy system is imperative; it has to done through balancing among existing “energy triangle” facets: security, sustainability and economic development.
Third, the defence issues: the EU and the member states are striving to “recover” from the years of under-investment in the sector; thus, during last twenty years, the EU’s combined spending on defence increased only by 20%, compared to 66% in the US, and nearly 300% in Russia and 600% in China…
However, it is the issues of increased and more efficient collective defense investment, as well as a more efficient one; e.g. defence spending in the 19-eurozone states has accumulated a deficit of €1.3 trillion in defence compared to the objective of 2% of GDP. The Commission assessed that “if country had met its defence investment targets, their debt levels would have increased by at least a dozen GDP percentage points”.
All citations in the article are from: Commissioner Th. Breton speech “Sovereignty, self-assurance and solidarity: Europe in today’s geopolitics”/5 September 2022; in: https://ec.europa.eu/commission/presscorner/detail/da/speech_22_5350
Fourth, European “technological sovereignty”: the EU leaders recognized that in the global competition the EU-27 expected capacity “to lead in the world”, it is essential to “master tomorrow’s technologies”, Commissioner Thierry Breton underlined. Thus, actively using digital, online and green technologies the member states can accelerate national recovery and resilience. Hence, such novices as data processing, chips, quantum, hydrogen, batteries, etc. are becoming key transformative technologies into which the states would invest to succeed in modern industrial revolution. Besides, existing EU dependencies in some vital economic areas – energy and raw materials – weaken the states’ growth economically and politically.
The EU’s techno-security faces some controversies: e.g. the EU has adopted the “green deal” but still depends on lithium import from Chile (then, processes it in China) before shipping back to Europe. It should have been easier and better rather investing in mining and processing somewhere nearer EU’s borders or even in other European states. Anyway, the EU authorities could arrange the “global shipping” from countries where emissions are at the level of European’s 4% and “carbon transit” (resulting from supply chains) represents up to 10% of global emissions, noted Commissioner Th. Breton.
Fifth, is the European “self-assurance”, i.e. the EU states have to find proper means to harness globalisation in a way different from what it has been done before: the approach has to be more assertive and less naïve in defending the EU-wide economic interests and basic values. Presently, new “self-assurance” means defending the EU’s “strengths and attractiveness” as a democratic system the world’s largest multi-nation’s single market. The EU-27 has acquired solid assets in all spheres of political economy: highly qualified engineers, excellence in research, quality infrastructure, solid manufacturing base and strong services sector, underlined Commissioner.
At the same time, to increasing self-assurance means the EU’s ability to set its “own rules of the game”, i.e. leadership in the global technological race presumes setting EU-type rules and standards and force others to accept them. Remaining in the leading position does not mean more regulations, quite on the contrary: as little as possible but as much as needed. Hence, having a strong voice in global markets –as a region of 27 states exploring a unique integration model based on “social market economy principles” – needs promoting specific “European terms” in trade, with the EU in a driving seat. Partly, e.g. the EU institutions have to rethink the set of EU’s supply chains from an environmental and social point of view.
More self-assurance also means EU’s ambitious intention to establish a new “balance of power” in the world. During the pandemic, the EU set up an export control tool and negotiated in the world from a position of strength to unblock the supply chains, component by component, product by product.
Hence, presently, the EU is to be ready for a new sort of “geopolitical supply chains”; although global trade and cooperation represent a source of knowledge, innovation and progress, but it also presents risks, which have to be anticipated and addressed when needed. For example, while preparing the Chips Act, the Single Market Emergency Instrument and the Raw Materials Act, the Commission looked closely at rules of EU’s like-minded partners. This included, of course, the US Defence Production and Inflation Reduction Acts; the EU did not emulate the US approaches preserving the EU-wide requirements for openness and commitment to international trade. The EU as a credible global partner has to look after its own interests and cooperate with other powers of the world as equals, but bringing something specific to deals; that is going to be the EU’s approach to trade with global powers like the US and China, as well as with regional actors in Africa and Asia. And this assertiveness will also remain a vital component in redesigning the EU’s relationship with other countries surrounding the EU that seek to retain global influence, e.g. the UK and Turkey.
Finally, solidarity: the financial meltdown, refugee crisis, pandemics and lockdowns, war in Ukraine, disruptions to global supply chains, energy and commodity dependencies, as well as rising social anger against a backdrop of record inflation, etc. all these challenges could be better dealt with in close cooperation and in the spirit of solidarity. However, for such type of solidarity to work, each EU state must be responsible in implementing all the necessary measures to reduce the challenges’ threats, like Russian gas supply and other states (e.g. Belgium and Germany) taking difficult decisions regarding the use of nuclear energy.
Some states still wish to go on with the Russian gas contracts, e.g. Hungary, Czech and Slovak Republics, etc.; but that requires a new mode of mobilizing and coordinating public and private actors when facing technical challenges, like in France around the maintenance of nuclear plants. Sometimes it may in a short run take one step back concerning the EU’s climate and/or environmental ambition. Some member states start experiencing with the ramping up coal generation or individual efforts in gas exploitation; in any case, given the unprecedented “gas shock” in Europe the Commission recommends the states to explore all existing alternative options.
Solidarity concept also applies to the so-called “carbon debt”, often as a result of some states’ individual choices for their energy mix between gas, coal, renewable and nuclear energy. For example, since the beginning of a new century, the EU emitted 90 billion tones of CO2, which corresponds to a carbon bill of €7,200 billion at current price per ton of carbon; thus, with emissions unevenly spread across the EU, Germany alone emitted 23% of the total (which is equivalent to a debt of 49 percentage points.
Looking at the real picture of debt in the EU (financial, defence, carbon, etc.), the starting point for each state in the EU-wide budgetary discussions changed dramatically: massive EU support for the states recovery-resilience plans is altering traditional efforts made by states in a broad spectrum of political economy.
The Commission suggested for the states –so far unofficially- to jointly “master the challenges”, including the issue of common investments needed for the EU-wide sovereignty; the Commission tends to adopt a new common public finance management method, rather than dividing national approaches into “good vs. bad states, or the frugals against the profligates”.
Present realities in the states have become more complex and tempting in view of following solidarity, self-assurance and sovereignty that the EU urgently needs “to shape the course of things for the better”.