Eastern Europe is heating up

Berlin’s current frustration with Warsaw is a symptom of Eastern Europe’s growing geopolitical importance. The region is attracting attention from two key global players: the United States and China. Germany is mainly concerned with Poland’s rapprochement with the United States and hostility towards Berlin.

Warsaw’s ambitions – a detriment to Berlin

With Brexit on the table, Poland has views to replace Britain as Washington’s main EU ally.

The Polish political elite relies on American military support against Russia, in particular through NATO, and seeks to use a closer partnership with the United States to diversify its energy sources; the first shipment of Liquefied Natural Gas from the United States arrived in June 2017. Poland had been a leader in the campaign against the Nord Stream 2 project, which is set to supply Germany with natural gas directly from Russia. Nord Stream 2 would undermine American efforts to tease Gazprom out of its European market. Furthermore, Poland’s elite is currently probing American support for its project to engineer greater energy and defence cooperation in Eastern and Central Europe, for example though the Three Seas Summit initiative.

The Polish political elite has assiduously been courting the Trump administration: his visit to Warsaw before the G20 Summit in Hamburg earlier this summer was widely seen as a sign of support for the Polish administration. Polish Defence minister Antoni Macierewicz hailed the American President’s visit as a demonstration that Poland’s geopolitical position has greatly improved. Certain American and German news outlets subsequently interpreted President Trump’s visit to Warsaw as a move against Germany and the EU.

Polish demonstrations of hostility towards Berlin play at least two roles. First, they are a backlash against what is perceived to be unwarranted EU interference in Poland’s domestic affairs: following Polish attempts to increase political power over the judiciary, Brussels launched an unprecedented enquiry in 2016, and recently threatened to trigger Article 7 of the Lisbon Treaty. These moves, supported by Germany, were met with hostility by Poland’s ruling party. Second, hostility towards Berlin is an additional way to demonstrate Poland’s alignment with the Trump administration. Possible demands of German war reparations, for example, may be interpreted in at least these two ways. First, they may be seen as a backlash against Germany’s criticism of Polish legal reform attempts. Second, if the demands were to be implemented, these reparations would contribute to Germany’s economic weakening – in lines with Trump’s foreign policy.

The Polish anti-German vector is moreover bothersome for Berlin because on Germany’s other flank, President Emmanuel Macron is reaching out towards Washington to develop a cordial relationship. Earlier this summer, Macron invited President Trump on a personal visit to France for Bastille Day. Germany, which is experiencing tensions with the United States, finds itself caught between two neighbours looking increasingly towards Washington and in one case more obviously than in the other, away from Berlin.

Warsaw’s legal reforms provide a window of opportunity for Berlin to lash at its neighbour, without overtly addressing its geopolitical concerns.

Berlin vs Warsaw: a two-speed Europe on the move?

A number of European elites are critical of 2004 expansion to Eastern Europe. Indeed, Eastern European member states constitute a considerable investment from net contributors to the EU budget: between 2014 and 2020, Poland alone will receive around 100 billion euros from Brussels. Earlier this year, Germany proposed a bill to link EU funding to the respect of democratic principles and human rights. The proposal, which could potentially affect funding for Poland and Hungary, was blocked by the president of the European Commission Jean-Claude Juncker. Though it has been placed on hold for now, the legal project may well be taken up anew when Juncker retires from his position in 2019.

The existence of such a legal project is directly related to structural economic difficulties in the EU, which are unlikely to be solved. With economic resources running low, stripping Poland of its voting rights by triggering the Article 7 process may be another path to achieve a similar end: a two-speed Europe with reduced, conditional economic support for its periphery. If successful, such methods could be expanded to other member states, for example Hungary.

Eastern Europe on the margin: drawing in the Chinese

Numerous infrastructural and other economic projects in Eastern Europe depend on EU funding. Were the latter to decrease, the region would likely suffer an economic downturn with considerable risks of social unrest and political instability. Such a development is in the interest neither of Germany nor of Russia.

Eastern Europe’s pivot towards Washington is hardly palatable not only from the perspective of Berlin, but also from that of Moscow. Growing US involvement in the region would most likely translate into increased NATO deployments along Russia’s border. Additionally, American liquefied gas providers are looking into Eastern Europe as a new market which would welcome diversification from Russian gas. European funding cuts would stimulate Eastern Europe’s pivot toward the US, a move at odds with Russian interests.

Despite these concerns, Russia is unlikely to compensate for a share of Eastern Europe’s losses, were cuts to be implemented. Moscow is cautious to limit the amount of resources it dedicates to the region, as shown by the stalemate in the Ukraine. Burdened by sanctions, Russia has neither the economic capacity nor the political will to finance Eastern European economies. To avoid a severe degradation in the stability of Eastern Europe, which would be against the interests of both Berlin and Moscow, Germany and Russia, along with net EU contributors such as France, would most certainly like to pass the burden of funding Eastern Europe elsewhere.

The Chinese have been eyeing Eastern Europe in the context of their One Belt One Road project. In order to be a reliable transit route for Chinese goods to comparatively rich Western European markets, the region must remain politically stable. Otherwise, the Chinese would face considerable difficulties in implementing their continental Silk Road. A failure of this initiative would not only be a blow on the international level, but also on the domestic level for Xi Jingping. The Chinese may therefore be interested in compensating for EU funding cuts if these cuts were severe enough to create a high risk of political degradation in Eastern Europe.

Where does this leave us?

Eastern Europe’s geopolitical importance is on the rise. The Germans are wary of Poland’s geopolitical aspirations and rapprochement with the United States. For net contributors to the EU, plans for a two-speed Europe are on the table. The Chinese are eyeing deeper involvement in the region to guarantee a stable transit zone for their goods. Current lashes against Poland over legal reforms are but the first gusts of a coming storm.

Originally published with the Russian International Affairs Council: http://russiancouncil.ru/en/analytics-and-comments/analytics/eastern-europe-is-heating-up/

Advertisements

Eastern Europe is attempting a ride. Will America press the pedal?

Eastern and Central Europe is self-sufficient neither energetically, nor economically. Attempts are being made towards greater independence from Russian energy resources and increased regional cooperation. The Three Seas Summit, attended by President Trump last week was as a stepping stone in this direction.

The 2017 Three Seas Summit was the second round of an initiative launched in 2016 to increase energy cooperation among Eastern and Central European states. Countries in the region are wholly dependent for their survival on energy imports. In particular, imports from Russia account for more than half of gas consumption in the area. In 2016, Poland’s consumption of Russian gas was the largest, reaching 11.07 billion cubic meters. Because most Central and Eastern European governments view Russia as a threat, energy dependence on that same country appears to be a strategic vulnerability.

The Three Seas Summit focuses on developing the necessary regional partnerships and infrastructure to diversify energy sources. Progress has been made as Poland began to operate its own liquefied natural gas terminal in 2016, with a first shipment from the United States in June 2017. A sister project is under construction on the Croatian island of Krk. Efforts to decrease energy dependence on Russia are actively supported by European institutions. The European Commission, for example, will work with the Baltic states to link their electricity grids to the EU through Poland by 2025.

One of the main challenges that participants of the Three Seas Summit face is economic. Additionally, a lack of infrastructural capacity could severely impede on the ambitions to transform the two Liquified Natural Gas Terminals into regional energy hubs. A key reason why Donald Trump was invited to attend the 2017 Summit in Warsaw is because the United States could be a major partner to diversify the region’s energy sources. The US may find a vested interest in this project as a card played against Russia, for whom Eastern Europe represents a major energy market.

In addition, the US is the main security partner of Eastern and Central Europe, through NATO. During President Trump’s visit to Poland, he jointly signed a memorandum with Poland’s Defence Minister confirming the sales of a Patriot missile defence system to the host country. Poland’s leadership was anxious for the US to reaffirm its commitment to European security, in particular within the NATO framework. The Baltic states also rely on American military support, as does the current Ukrainian government.

Deeper foreign policy coordination in Central and Eastern Europe is on the agenda of certain Polish circles, inspired by Piłsudski’s idea of an ‘Intermarium’ region that, according to the Polish leader, would stabilise the European balance of power. Piłsudski argued that the ‘Intermarium’ would be a counter-weight to both German dominance and Russian expansionism. Leading Ukrainian nationalist organisations such as Freedom, the Convention of Ukrainian Nationalists and the Right Sector adopted an agenda in March which includes the creation of a Baltic-Black Sea Union. In geographic terms, these projects overlap. In political terms, they are unlikely to be feasible: in each case, the project’s architect aspires to dominate the integrated region. Both Poland and Ukraine, the largest states in the region, could not simultaneously take the lead. One issue is who drives, another is who gets in the car. Smaller neighbours are particularly reluctant to embrace any political project that bears an open relationship with Piłsudski’s ‘Intermarium’ because of the spectre of Polish imperialism. In addition, paucity in energy and economic resources provide a wobbly base for integration.

It is clear that from the Eastern and Central European point of view, the US is broadly considered as an a valuable ally. Switching perspectives, let us consider what concrete interests, if any, the Trump administration may have to support the region.

Central and Eastern Europe, in relative terms, is far from being prosperous. In terms of individual consumer products therefore, it is not a viable time investment for the US to develop links with the region. On national level consumption however, the picture changes. Aspirations to turn away from Russia consolidate this region as a market for American weapons and energy resources. Weapons sales to NATO countries are likely to increase as members strive to meet their defence spending commitment of 2 percent of GDP. Revenue from weapon sales will be one means to finance President Trump’s promise of a national Wirtschaftswunder.

From a geopolitical standpoint, the development of a closer bound Eastern European ‘cordon sanitaire’ also appears to be in America’s interests, at least for two reasons.

First, on the European continent, it may serve to entrench the current rift between Germany and Russia. Although much of the current German political elite is reluctant to move closer to Russia at the moment, a foreseeable deepening of the EU crisis may push German investors closer to Russian markets, thirsting for technological input in exchange for raw materials. A German-Russia economic block would be an additional challenge to America, faced on its other flank by South East Asia. The crystallisation of an anti-Russian buffer in Eastern Europe would impede plans to deepen German-Russian economic cooperation.

Poland and the Baltic states are already vocal today in warning against the threat of a Russian attack. Further security cooperation between these states would tighten a hostile belt along the Russian border, which would in turn increase the perception of threat from the Russian perspective and likely produce further signs of hostility on Russia’s behalf. Germany, a NATO member and the willing centre of a shaky EU will side with its weaker Eastern neighbours against Russia in such a scenario, as it does with sanctions today.

Second, a ‘cordon sanitaire’ hostile to Russia would not only impede a productive relation with Germany, but would also be a stumbling block to the ‘Greater Eurasia’ and ‘One Belt One Road’ projects. One of the principal ambitions of ‘One Belt One Road’ is to develop continental transit routes to comparatively wealthy Western European markets. The continental route, although dependent on Eurasian political stability, will diminish Chinese dependence on maritime trade routes, over which the Americans have military dominance. Increased political tensions between Eastern Europe and Russia will come at the detriment of collaboration on freight transit and infrastructural development essential for the new continental Silk Road.

There is a geostrategic rationale for America to support increased cooperation in Eastern and Central Europe on energy, security and possibly other realms of policy. The region may lack self-sufficient and be politically weak, but with the support of an external hegemon, it may well play a crucial role in the coming decade.

Published with the Russian International Affairs Council: http://russiancouncil.ru/en/blogs/nora-topor-kalinskij/eastern-europe-is-attempting-a-ride-will-america-press-the-pedal/