Posts Tagged ‘Estonia’

China eyes expanded business ties with Eastern Europe amid EU concerns

July 7, 2018

Chinese Premier Li Keqiang will offer the leaders of central and eastern Europe on Saturday expanded business ties at a summit in Sofia while seeking to reassure the EU that Beijing is not trying to divide the continent.

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Li, whose attendance at the seventh such “16+1” summit coincides with an escalating trade war between China and the United States, will also try to dispel growing doubts among some participants about the value of the annual meetings.

China has promised billions for development projects in the region as part of its Belt and Road strategy to carve out new export markets, but these deals are coming under greater scrutiny.

Li, whose country needs the European Union’s support in its trade battles with U.S. President Donald Trump, has been careful to stress China’s support for European integration and rules in trade and procurement.

“The 16+1 cooperation is by no means a geo-political platform. Some may say such cooperation may separate the EU, but this is not true,” Li told a joint news conference on Friday with the summit host, Bulgarian Prime Minister Boyko Borissov.

“We hope that through our cooperation we will improve the development of all countries involved and help them better integrate into the European integration’s process,” said Li, who will travel on to Germany from Bulgaria after the summit.

Analysts said Li would try to avoid issues that might annoy western European capitals, including the European Commission in Brussels that upholds the common rules that underpin the EU’s single market.

“I think that Premier Li Keqiang will adopt a low profile on issues that might infringe on community affairs of the EU this time around,” said Francois Godement, director of Asia and China program at the European Council on Foreign Relations.

More than 250 Chinese companies and 700 business people from central and eastern Europe are expected to attend an economic forum alongside the summit, seeking deals in trade, technology, infrastructure, agriculture and tourism.


Bulgaria hopes the summit will help secure much-needed funds to build new roads, highways and other infrastructure in eastern Europe, a region that still lags richer states in the western wing of the EU in terms of development and income.

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Belene Nuclear Plant Project

“We do not aim to divide the European Union. On the contrary, we aim to help eastern Europe and the Balkans which are lagging behind to catch up,” Borissov said.

Sofia hopes to lure Chinese funds for highway and railway projects to link ports in northern Greece on the Aegean Sea and in Bulgaria on the Black Sea with Romania and Serbia.

China has expressed interest in the plan and also confirmed it was willing to back Bulgaria’s Belene nuclear power project.

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Last month, Hungary finalised the construction timetable with China for a Budapest-Belgrade rail link, one of the biggest Chinese-backed infrastructure projects in the region.

Countries taking part include EU members Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia, and also non-EU states Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia.

The EU will have observer status at the summit. Greece will also attend.


Additional reporting by Angel Krassimirov; Editing by Gareth Jones


Europeans leaders worry Trump wants to fulfill promise to bring American troops home

July 6, 2018

After 18 months of Donald Trump’s “America First” presidency, European leaders meeting with him next week fear the United States may change its traditional course and begin to bring American troops home from the continent.

It comes as nations, especially in Eastern Europe, are lobbying the United States to increase the number of troops on the continent as they worry about combating an increasingly aggressive Russia.

Trump has talked about bringing U.S. troops home from around the globe since he was on the campaign trail espousing a strategy he dubbed “America First” but he has yet to act.

“They are scared to death,” former Defense Secretary Leon Panetta told McClatchy. “They are worried about a very unpredictable president of the United States. They are increasingly worried he is going to do things not based on what’s in the best interest..but based solely on his vision of ‘America First.’ “

The Pentagon is already reviewing the impact of withdrawing some of the 35,000 active-duty American troops in Germany, the Washington Post reported last month.

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German Chancellor Angela Merkel speaks with President Donald Trump during the Group of 7 summit meeting in La Malbaie, Quebec, Canada, June 9, 2018. The photo quickly went viral after it was shared on Merkel’s Instagram account. Jesco Denzel German Federal Government via The New York Times

The fate of American troops in Europe are not expected to be on the agenda of the Brussels meeting of NATO — the alliance formed after World War II to counter a Soviet, now Russian, threat — but will loom large, as it comes just before Trump’s meeting with Russian President Vladimir Putin in Helsinki, Finland.

Some worry an unpredictable Trump, at the U.S.-Russia summit, could agree to take the first steps to embolden Russia, such as halting military exercises or agreeing that Crimea, a region of Ukraine annexed by Russia in 2014, belongs to Russia.

Magnus Nordenman, who worked as a defense analyst and a strategic planning consultant for major European defense industry companies, said European allies are “absolutely worried” after hearing Trump disparage allies of the G-7, as well as NATO members’ contributions and seeing him eager to meet Putin as well as North Korean dictator Kim Jong-un.

“There is element of uncertainty in all this,” said Nordenman, now the director of the Transatlantic Security Initiative at the Scowcroft Center for Strategy and Security at the Atlantic Council. “But we all need to take a bit of a breath here…and hope the president is in a good mood when he goes to Brussels.”

A senior administration official with knowledge of the situation but not authorized to speak publicly did not initially answer the question about possible troop withdrawals on a conference call with reporters. But when asked a second time, the official said Trump is not expected to threaten troop withdrawals in Germany or elsewhere.

Congress is likely to oppose troop withdrawals and could pass legislation to prevent Trump from using money to move the military.

Trump has criticized international alliances and organizations, even the United Nations, and European allies fear he is less committed to their security and NATO as previous U.S. presidents. Last month, he abruptly refused to sign a joint statement with the G-7, the world’s largest economies following a meeting in Canada.

“At a time when the transatlantic relationship between Europe and the U.S. is under a lot of pressure over disagreements on Iran and trade, NATO is really at the core of this relationship and will Trump — by basically criticizing the Europeans and conditioning American support — bring more disunity within the alliance,” said Erik Brattberg, director of the Carnegie Endowment’s Europe program who is in touch with a few diplomats who are concerned about Trump’s possible reduction of troops. “It would weaken the alliance and provide new opportunities for countries like Russia to take advantage of that.”

A third of active-duty U.S. military troops overseas — more than 60,000 — are stationed in Europe, including 35,000 in Germany, 12,000 in Italy, 8,500 in the United Kingdom and 3,300 in Spain, according to a Pew Research Center analysis of information from the Defense Manpower Data Center, a statistical arm of the Defense Department. Thousands more rotate into other European countries temporarily.

Many U.S. troops are there to do more than protect those countries. They are strategically located to help in other regions of the world, such as counter Iran or strike the Islamic State.

The Trump administration has been supportive of NATO and European countries at a tactical level — actions generally credited to Defense Secretary Jim Mattis. It has sent more military equipment, participated in regional exercises, signed new defense agreements with Sweden and Finland and increased the number of Marines in Norway on a rotational basis by 350 and in Poland by a battalion.

Poland, Romania and the Baltic nations of Estonia, Latvia, and Lithuania have been asking the U.S. for additional troops for several years. Poland is willing to spend up to $2 billion to lobby the U.S. to build a permanent military base there, according to a Defense Ministry proposal.

Still, Trump has repeatedly threatened to punish countries if they don’t spend enough on defense, even suggesting the U.S. may not protect them if they don’t pay their fair share. That’s in direct contradiction of NATO’s pledge that an attack against one member is considered an attack against all of them.

“That’s the question: Is the U.S. security conditional?” asked Heather Conley, who served as a deputy assistant secretary of state in the Bureau for European and Eurasian Affairs for Bush and is now a senior vice president at the Center for Strategic & International Studies.

In June, he sent letters to several allies complaining they are not abiding by a 2014 commitment to spend 2 percent of their gross domestic product on national defense. Kay Bailey Hutchison, U.S. ambassador to NATO, said this week that all 29 NATO members are increasing defense spending with 16 of them on track to meet the 2 percent goal.

Daniel DePetris, a military expert as at Defense Priorities, a D.C.-based foreign policy organization focused on a strong military and restrained foreign policy that is in periodic conversations with the Trump administration, said the countries either don’t believe Russia is a real threat to them or that the U.S. will protect them.

“Either they have to step up and do what’s rational based on their economic power or it is appropriate for us to reduce our contingent over there,” he said.

The White House declined to say if and how Trump might punish the countries. “I’m not going to get ahead of any announcement or any action he could potentially take, but as you guys know, he’s shown some frustration there on the financial burden that the United States unfairly is forced to bear, and he wants changes,” White House spokesman Hogan Gidley told reporters this week.

In recent weeks, Trump suggested withdrawing more than 25,000 U.S. troops stationed in South Korea after trying to persuade Kim to rid his country of nuclear weapons.

Pentagon leaders canceled military exercises there at Trump’s direction but they quickly reaffirmed the United State’s ‘ironclad commitment’ to defend South Korea.


Danske Bank shares fall on money laundering allegations

July 4, 2018

Reported figure of $8.3bn is more than double previous estimates

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By Richard Milne, Nordic and Baltic Correspondent 2 HOURS AGO Print this page

Shares in Danske Bank fell 3 per cent after reports that up to $8.3bn may have been laundered through its Estonian operations, more than double previous estimates.

Danish newspaper Berlingske reported that as much as DKr53bn of suspicious money had flowed through the Estonian branch of Denmark’s biggest lender.

Denmark’s new business minister has called the alleged money laundering “a disgrace and a scandal” and has said that the bank’s internal investigation — due to report in the autumn — may not be sufficient. Opposition lawmakers in Copenhagen have called on Denmark’s fraud squad to investigate.

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Anders Jorgensen, head of group compliance at Danske, said: “As we have said earlier, it is too soon to draw any conclusions about the extent of potential money laundering in Estonia. That is the reason why we have not ourselves published figures or commented on speculations about potential amounts.

“On several occasions, however, we have said that the extent seems to be somewhat larger than previously estimated. Until the investigations launched have been completed in September, though, it would be wrong to speculate any further. But there is no doubt that even one krone laundered is one too many, and that we take this matter very seriously.”

Danske was reprimanded and severely criticised by Danish regulators in May for weak anti-money laundering controls that led to suspected “criminal activities involving vast amounts of money”. The Danish Financial Supervisory Authority ordered Danske to set aside DKr5bn in capital to cover compliance matters.

“The headlines are clearly negative for investor sentiment for Danske, with the [anti-money laundering] issue dragging on stock performance over the past year,” said Adam Barrass, analyst at Berenberg, who noted that Danske had underperformed the European banking index by 10 per cent in the past year.

He added that the key risk was a potential US fine due to Danske’s use of dollar funding and transactions. But he added that such a fine was unlikely given Danske has no US banking licence, dollar clearing facility or access to the Federal Reserve liquidity window.

Danske’s shares were down 3.2 per cent at DKr195 on Wednesday morning.


Trump widens rift with NATO allies ahead of summit

July 4, 2018

Ahead of the Brussels summit, the U.S. President Donald Trump lambasted the leaders of NATO allies in harsh letters, warning that the U.S. is losing patience with their failure to meet security obligations within the alliance, widening the rift between its European allies.

Trump has repeatedly criticized NATO allies for failing to meet a 2014 commitment to spend two percent of GDP on defense by 2024, accusing them of leaving the U.S. to shoulder an unfair burden for defending Europe. Currently, the U.S. accounts for nearly 72 percent of all defense spending in NATO and only three European countries hit the two percent GDP target, Britain, Greece and Estonia. He was reported saying during the G7 summit in Canada earlier this month that NATO is “as bad as NAFTA.”

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U.S. President Donald Trump meets with German Chancellor Angela Merkel, Washington,

However, Germany, which has had tense ties with the U.S. in recent months, has already indicated it will be unable to meet that goal. German defense spending is currently at 1.22 percent, according to the figures released by NATO.

In response, the Trump administration has started evaluating the costs of transferring or withdrawing troops from Germany, where the United States has its biggest contingent outside the country, The Washington Post reported earlier. Among the options under consideration are rep

atriating a large contingent of the approximately 35,000 active duty troops, or a full or partial move of the military personnel from Germany to Poland, according to the Post. Citing anonymous sources, the newspaper stressed that the study was only an internal examination of options at this stage.

“Continued German underspending on defense undermines the security of the alliance and provides validation for other allies that also do not plan to meet their military spending commitments, because others see you as a role model,” Trump said in an individual letter to German Chancellor Angela Merkel, The New York Times reported.

Trump’s move came after he rattled his G7 allies with blistering rhetoric about their trading relationships with the United States and a series of scathing remarks about Canadian Prime Minister Justin Trudeau. Trump has imposed tariffs on steel and aluminum in response to what he calls unfair trade practices from Europe, Canada, and other allies around the world, who have responded with retaliatory sanctions in kind.

Trump has been complaining about the unfair treatment of international organizations and multilateral agreements. First he withdrew the U.S. from the Trans-Pacific Partnership (TPP) trade deal three days after his inauguration last January and then wanted NAFTA to be renegotiated. Now, U.S. membership to the World Trade Organization (WTO) is under question as it could greatly hurt global trade, widening the rift between its European allies.

His decision to withdraw from the 2015 Iran nuclear deal was another important factor for the deteriorating ties between the U.S. and its European allies. Trump piled pressure on close allies with a threat to sanction European companies that do business with Iran.


Prague, Budapest reject Merkel’s plan to return migrants

July 1, 2018

Details of German Chancellor Angela Merkel’s plan to solve her government’s migration crisis – and avoid a possible break-up of her coalition – were revealed on Saturday in a letter to the leaders of her two coalition partners.

The letter said that Merkel had secured agreements with 14 countries for the rapid return of asylum seekers trying to enter Germany who first registered in those countries.

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The countries listed in the letter are Poland, the Czech Republic, Hungary, Belgium, France, Denmark, Estonia, Finland, Lithuania, Latvia, Luxembourg, the Netherlands, Portugal and Sweden.

The prime ministers of Czech Republic and Hungary – two of the fiercest critics of Merkel’s decision to admit migrants – vehemently denied they that agreed to any such measures.

Czech Prime Minister Andrej Babis said that “Germany did not approach us, and in this moment I would not ratify such an agreement … We are not planning negotiations. There is no reason to negotiate. We decisively reject this.”

A German government spokesman later said Merkel “regretfully” accepted Prague’s decision, insisting however that “the Cezch side had expressed willingness to make a deal for better cooperation in the return [of migrants]” at an EU summit in Brussels.

Hungarian leader Viktor Orban referred to the deal as “fake news.” Speaking to state news agency MTI, he said “there was no such agreement.”

The number of migrants arriving in Germany who are returned to where they first registered currently stands at 15 per cent. With the agreements revealed in the letter – even without the participation of Prague and Budapest – this number should rise significantly.

Germany already announced a similar agreement with Greece and Spain earlier this week.

According to the plan, larger collection centres in Germany – so-called “anchor centres” – would be used to house migrants while their asylum requests are considered and unsuccessful applicants would be deported from there.

Also laid out in the letter is a plan to send German police by the end of August to help strengthen the EU’s external border in Bulgaria in order to reduce the number of migrants entering the passport-free Schengen zone.

In 2017, the letter said, tens of thousands of asylum seekers had a corresponding entry in the EU’s visa information system.

With stricter allocation procedures, “we could substantially reduce visa abuse and with it the number of asylum seekers in Germany,” it said.

In addition, the European border protection agency Frontex should be strengthened in Greece along the borders with Macedonia and Albania.

“We must also be prepared to help support Slovenia and Croatia with border control if necessary,” the chancellor said.

The rapid-return agreements in particular are meant to satisfy German Interior Minister Horst Seehofer, the leader of the Christian Social Union (CSU), the more conservative sister party of Merkel’s Christian Democrats (CDU).

The Bavaria-based CSU, and Seehofer in particular, have been holding Merkel’s feet to the fire on asylum policy, including a threat to close Germany’s southern border to large groups of migrants without Merkel’s consent.

Merkel was scheduled to host Seehofer in the chancellery late Saturday for an emergency meeting to try to convince him that her efforts to stop the influx in coordination with other EU countries makes border closure redundant.

The results of the meeting were not expected to be made public before a series of meetings of the parties’ respective leadership teams on Sunday.

A split between her conservative CDU and the CSU, a political alliance that has existed since 1949, would rob Merkel’s three-way coalition with the centre-left SPD of its parliamentary majority.

A broader EU asylum deal, reached after marathon negotiations between EU leaders in Brussels, foresees the creation of “controlled” processing centres, firstly in Europe, and then later in North Africa.

On Saturday, Merkel denied some interpretations of the deal by CSU members that it gave them carte blanche to go ahead with unilateral border closures.

The summit had called on EU members to come up with “internal” legal and administrative measures against secondary migration with the EU, a Berlin spokesman said.

Those measures include better surveillance of outbound mobility and residency requirements for asylum seekers in external border nations.

“Unilateral measures at the expense of other countries are not what is meant,” said the spokesman, adding that they are neither “internal,” nor do they fulfill the summit’s desire for cooperation.

European countries to formalise EU defence force plan

June 25, 2018

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French militay units

Nine EU nations will on Monday formalise a plan to create a European military intervention force, a French minister said, with Britain backing the measure as a way to maintain strong defence ties with the bloc after Brexit.

The force, known as the European Intervention Initiative and championed by French President Emmanuel Macron, is intended to be able to deploy rapidly to deal with crises.

A letter of intent is due to be signed in Luxembourg on Monday by France, Germany, Belgium, Britain, Denmark, the Netherlands, Estonia, Spain and Portugal, French defence minister Florence Parly told the newspaper Le Figaro.

The initiative involves “joint planning work on crisis scenarios that could potentially threaten European security”, according to a source close to the minister, including natural disasters, intervention in a crisis or evacuation of nationals.

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It would be separate from other EU defence cooperation, meaning there would be no obstacle to Britain taking part after it leaves the bloc.

“This is clearly an initiative that allows the association of some non-EU states,” the French minister said.

“The UK has been very keen because it wants to maintain cooperation with Europe beyond bilateral ties.”

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Estonian soldiers in Mali

Twenty-five EU countries signed a major defence pact in December, agreeing to cooperate on various military projects, but it is not clear whether Britain would be allowed to take part in any of them after it leaves the bloc.

The EU has had four multinational military “battlegroups” since 2007, but political disagreements have meant the troops have never been deployed.

Paris hopes that by focusing on a smaller group of countries, its new initiative will be able to act more decisively, freed from the burdens that sometimes hamper action by the 28-member EU and 29-member NATO.

Italy had originally shown interest in the proposal. The new government in Rome “is considering the possibility of joining” but has not made a final decision, Parly said.

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Brussels heads for showdown with Poland over rule of law

June 18, 2018

Battle over EU power to sanction member states comes to a head

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The commission’s Frans Timmermans meets Polish premier Mateusz Morawiecki in April © Leszek Szymanski/EFE/EPA

Michael Peel in Brussels and James Shotter in Warsaw

Poland and Brussels are poised for a showdown in their battle over the EU’s power to sanction member states accused of sliding into authoritarianism or corruption.

Frans Timmermans, the European Commission’s vice-president, will hold last-ditch talks in Warsaw on Monday ahead of a crucial EU hearing on Poland’s observance of the rule of law — potentially opening the way to the first member state censure.

Such a rebuke would set up a further possible clash between EU countries over whether to impose sanctions on Poland, including the suspension of its voting rights. Hungary, after its own disputes with Brussels over the rule of law, has said it will block any countermeasures against Warsaw, which would require unanimity.

The next few weeks could reshape Poland’s relationship with the EU, at a time when the bloc is strained by pressure over migration and its disputes over trade and foreign policy with President Donald Trump’s administration.

One EU diplomat said he feared the Poland case had exposed a sharp divergence of views around the bloc on “what rule of law means”.

“If our starting points are fundamentally different, we may never find an understanding,” the diplomat said. “This is the fifth-largest member state. It is not something you can easily contain.”

The Poland dispute has become urgent because of Warsaw’s planned overhaul of the country’s supreme court which will take effect on July 3. The move would force more than one-third of the court’s judges to retire. This and other changes to the Polish judicial system have led Brussels to charge that Warsaw is endangering the rule of law — a fundamental EU tenet. Poland has said it is overhauling an inefficient system that has not adequately been reformed since communist times.

If our starting points are fundamentally different, we may never find an understanding

Mr Timmermans will on Monday call on Mateusz Morawiecki, Poland’s prime minister, to pull back from the judicial changes. Last week the commission vice-president warned Poland’s government in a speech in the European Parliament not to abuse its powers. “You cannot say ‘Because I have got a majority, I can do with the rule of law whatever I like’,” he said.

The commission opened the so-called Article 7 process of possible sanction against Poland last year, arguing that Warsaw was at risk of breaching EU laws and values.

A failure to force Poland to back down would be a huge blow to the EU’s ability to govern itself at a time of rising autocracy and of corruption claims in countries such as Malta, Slovakia and Romania.

EU ambassadors voted informally by 14 to four last week to escalate the dispute with Poland to a hearing of member states on June 26, which could be followed by a vote on whether to press ahead towards possible sanctions. Older EU members, including Germany, France and the Benelux countries, backed holding a hearing, while Hungary, the Czech Republic, Slovakia and Croatia opposed it.

Critics of Brussels’ stance accuse it of double standards and a willingness to ignore breaches of EU rules by bigger and more influential members.

EU officials privately recognise the bloc’s lack of tools to tackle alleged rule of law breaches. The commission has proposed tying observance of the rule of law to funding from the bloc’s next proposed multiyear budget — a plan that Poland branded a “massive power grab”.

If the commission and Warsaw remain at loggerheads, the fate of the dispute will rest on whether either side can count on support from sufficient member states to force the other to back down.

A four-fifths majority of EU countries is needed to press ahead with the case against Warsaw, which equates to 22 of the bloc’s 27 members, excluding Poland.

The position of states that ducked the informal ambassadors’ ballot will be crucial if a vote is forced on whether to pursue possible sanctions against Poland. Austria, Romania, Italy, Lithuania, Malta, Estonia, Slovenia, the UK and Bulgaria — which holds the rotating EU presidency — all abstained.

Some diplomats from countries that want to push the Polish case forward fear they may be short of the votes needed. “It would be a big defeat,” said one.

After a period during which relations between Warsaw and the commission appeared to be thawing — when the Polish parliament amended some of the reforms criticised by Brussels — fronts have hardened in recent weeks.

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Jaroslaw Kaczynski

Diplomats in Warsaw see little sign of further compromise — although Mr Timmermans is visiting at the invitation of the Polish government. “I don’t think Poland is going to change its mind,” said one.

An added complication in recent weeks has been the prolonged hospitalisation of Jaroslaw Kaczynski, Poland’s de facto leader, which officials in Brussels said coincided with an end to Polish offers of concessions in the rule of law talks.

Doctors have said that Mr Kaczynski’s stay, which ended on June 8, was due to osteoarthritis but rumours have swirled about more serious afflictions. The country’s health minister said on Friday that his condition was such that not admitting him “would have threatened his life”. However, Beata Mazurek, the Law and Justice party’s spokeswoman, said Mr Kaczynski was now “in good form”.

Orbanism is sweeping across the European continent

June 16, 2018

Illiberal democracies are spreading across Europe. But what we are witnessing on the continent today actually originated in China and Russia, says journalist Norbert Mappes-Niediek.

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Slovenia, with just 2 million inhabitants, is a small and little known country. So when Europe’s leading media outlets announced that right-wing populist Janez Jansa had emerged as “the clear winner” in the country’s parliamentary elections, hardly anyone was surprised. But even with this election success, Jansa’s Slovenian Democratic Party (SDS) still did not garner the levels of support it had back in 2011, when he won a second stint as prime minister.

Read more: Angela Merkel-style conservatism: Does it have a future?

So, what happened? Despite Europe’s overall shift to the right, the SDS is not as powerful as it once was. Did Slovenia buck the trend? Did voters in the country reject the allure of “illiberal democracy” — despite economic problems and the burdens of the refugee crisis? Not necessarily. But lacking an explanation for what had happened, many journalists fell back on stereotypes, painting a simplistic picture of East versus West.

A problem of Eastern Europe?

Since the 1980s, a booming China has demonstrated that democracy and capitalism must not necessarily be two sides of the same coin — as many always assumed. And when, at the turn of the millennium, Vladimir Putin took power in Russia, this new model of “capitalism without liberal democracy” took root in the world’s largest country by area, as well. In 2010, when Viktor Orban won Hungary’s elections, it had also reached the European Union.

Orban and Kaczynski carnival float in Dusseldorf (Reuters/T. Schmuelgen)Orban’s right-wing nationalist allies in Europe are increasingly numerous

And yet, we are not talking about a phenomenon that is found exclusively in the east. Today, Hungary’s Prime Minister Orban can count on powerful allies in Italy and Austria. In France, the Netherlands, Belgium, Denmark and Norway various right-wing parties can count on the support of between 15 and 30 percent of the electorate. Germany’s far-right Alternative for Germany (AfD) is not far off, either. And a new, right-wing mood is also gripping many staid conservative parties. The far-right has not consolidated its power, but there are signs that these forces could gain strength where they wrecked havoc in times past: in Italy for example, in Austria, and in Germany. But not in France, and not in Slovenia.

Withdrawing to the nationalist cave

A nationalist and authoritarian mood is spreading across Europe. But right-wingers in the West differ from those in the East. The former like complaining about the “shithole countries” immigrants hail from, while the latter feel they have always been disadvantaged and never fully accepted. The far-right in the West scorns political institutions and instead prefers a kind of “Facebook democracy,” happily clicking like buttons and railing against politicians. In the East, they want a return to law and order, clearly demarcated nation states, and want everyone to always carry an identity card — a return to the good old days, but with different national symbols. Evidently then, both sides’ ideals cannot be reconciled. But there is no need for that, anyway, as both are quite happy to withdraw to their own, nationalist caves, so to speak.

Read more: Young Europeans believe in the EU, fear Donald Trump

The new right thrives on antagonism, on dividing the world into east, west, north and south, rich and poor, one nation against the next. While the Visegrad states of Hungary, Poland, Slovakia and the Czech Republic currently pose the greatest threat to European peace, a right-wing alliance lead by Italy could take over from them, or even a group of stingy countries eager to cut their contributions to the EU budget, transforming the bloc into a group of competing teams. Then, the EU would break apart like all right-wing alliances, where ultimately, each party fights for itself. And where bilateral “deals” are struck, with the powerful leveraging their might.

Orban election victory party (Reuters/L. Foeger)Orban famously declared an end to the era of ‘liberal democracy’ after starting his fourth term as prime minister in May

Smaller EU states would suffer most

EU skeptics will then only lose influence if there is not a single member state that imagines it could be stronger outside the bloc than in. Appeals to eastern EU members to be reasonable, given that they benefit most from EU funding, fall on deaf ears. Because all arguments can be flipped on their heads, the bottom line is that more money flows from east to west than vice versa; and despite an impressive gross national product, many Czechs earn meager wages.

Read more: Populism and media mistrust go hand in hand, PEW study says

Or look at how EU states variously demand others show solidarity in the refugee crisis. Berlin only insisted others take in asylum-seekers after Greece and Italy had been left to their own devices for decades and could no longer cope. Small EU members like Luxembourg — which has produced so many renowned European politicians — Estonia, Latvia, Lithuania, Malta and Slovenia will not play this game, as they have much to lose if the EU falls apart. Unfortunately, Europe’s big players have not yet come to their senses.

Journalist Norbert Mappes-Niediek lives in Graz, Austria and reports on southeastern European affairs for numerous German-language newspapers.

Europe turns away from the US — and bites the hand that feeds

June 6, 2018

President Trump’s tariff war with Europe is wrongheaded, but hardly the only issue separating “our closest allies” from America, the country too many on the continent love to hate.

Well before his threatened steel and aluminum restrictions on European countries (as well as on Canada and Mexico), Trump slaughtered some of Europe’s most sacred cows.


He withdrew from the Paris accord on greenhouse-gas emissions and broke away from the Iran deal. Europeans strongly believe the former will save the planet. (It won’t.) They also hope the latter will tame the Islamic Republic. (Again, nope.) As important, they want their continent’s economies to have access to Iranian markets.

Then Trump offended the Euros’ collective sense of decorum by moving the US embassy in Israel to Jerusalem.

But on that, as on other issues, Europeans are far from united.

Romanian Prime Minister Viorica Dăancilă visited Israel’s capital recently and her government tentatively approved moving its embassy there. For that, Romanian President Klaus Iohannis called on Dăancilă to resign, accusing her of making “secret deals” with the Jews.

And Germany, once a top Israel booster, privately sided with Iohannis and against recognizing Israel’s capital. After Romania moves its embassy, Berlin fears, the Czechs, Bulgarians and others may also break ranks with the European Union.

A Washington source tells me the US ambassador in Berlin, Richard Grenell, has advised the Germans against interfering in their neighbors’ deliberations over embassy location. Other US envoys should also advocate the move to Jerusalem.

Beyond the embassy, challenging the fictional EU “consensus” will demonstrate that some Europeans have more in common with America than with their fellow domineering continental partners.

Meanwhile, despite playing hardball in public, France and Britain (among others) are quietly attempting to bridge the gaps with America over the Iran deal.

Also, Europe’s energy giants Total and BP recently canceled signed deals with Iran — along with top shipping firm Maersk and various European insurers. They’d rather do business with America when forced to choose.

So slighted European leaders go running to the United Nations.

Last week none of the five European nations on the Security Council supported a text, proposed by America’s UN Ambassador Nikki Haley, that would solely blame Hamas for recent deadly Gaza clashes. France and Sweden sided with Hamas in another council vote, proposed by Kuwait, to protect Gaza’s Palestinians from the evil Israelis.

Meanwhile German Chancellor Angela Merkel, long presiding over Europe’s largest economy, recently said the continent can no longer rely on America and should instead defend itself.

Well, good luck with that.

Germany is currently one of NATO’s worst deadbeat members, investing a mere 1.22 percent of its GDP in the military. That’s well below the alliance’s agreed-on 2 percent. America spends more than 3.5 percent of GDP on the military. The US is by far the most muscular NATO member, as it has been since the alliance’s inception.

Germans have grown fat under America’s military umbrella. They and other Europeans developed a see-no-evil, hear-no-evil attitude, which is increasingly untenable in a growingly hostile world.

Demanding more European funding for defense was one of Trump’s early mantras. Yet this year Germany is, at best, expected to up its military budget to 1.5 percent of its GDP. The only Europeans that contribute their required share are Greece, Estonia, Britain and Poland. The rest slouch toward Germany.

How will Europe, then, “defend itself” — let alone contribute to global security?

Will its carriers sail the Pacific, where Europeans hope to surpass America in exports to Asia, but where China threatens to dominate and limit freedom of navigation? And what if, God forbid, a future nuclear-armed Iran turns its ire on one of the continent’s capitals?

So yes, Trump’s proposed tariffs are bad news for global free trade. They’ll hit Americans first — in our pocketbooks. Also, despite it all, Europe remains an important partner and ally. Trade wars will only harm the alliance.

Yet, as many of its politicians drift further and further away from America, few in Europe can genuinely plead “friendship” as they demand exclusion from US tariffs.

Made by those who’ve grown less amicable, that argument is just poor salesmanship.

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1 in 10 German military pilots lost helicopter licenses for lack of flight time

Trade disputes reveal the EU’s strategic weakness and highlight permanent state of dependence

April 9, 2018

A bloc of nations with small-country mindsets wallowing in a permanent state of dependence


Image result for German Tornado jets at a base in Incirlik, Turkey. Reuters photo
German Tornado jets at a base in Incirlik, Turkey, in 2016. The warplanes are no longer considered fit for Nato missions © Reuters

The EU is the world’s largest economy. It is home to many of the world’s most successful companies. It has its fair share of political tension and economic crises, but its democracies are robust and its societies stable. And it has an overwhelming interest in maintaining a rules-based system of global governance. Why then is its influence in the world so small?

The reason is not so much the proverbial lack of a single telephone number. The deeper problem is a permanent state of dependence: on Russia for energy supplies; on the US for defence; and on the rest of the world to absorb the EU’s current account surpluses.

The majority of EU countries that are also Nato member states promised in 2006 to increase their defence budget to 2 per cent of GDP. Only four can claim to have met or nearly met the target — the UK, Poland, Greece and Estonia. France is not far off, but Germany’s defence expenditure was only 1.24 per cent last year. German media are full of reports about the decrepit state of the Bundeswehr. German Tornado warplanes are no longer considered fit for Nato missions. The country has scope to increase defence spending if it wanted to. But the combination of a self-imposed rule to run permanent fiscal surpluses and the non-defence spending priorities of the recently constituted grand coalition prevent this.

Despite sanctions against Russia, the EU’s dependence on Russian energy is also now greater than ever. In 2017, Gazprom, the Russian gas company, registered a bumper year of gas deliveries to the EU with record sales to Germany and Austria.

The macroeconomic dependency is more subtle, but it shows up in trade policy. The eurozone had a current account surplus of 3.5 per cent of GDP in 2017 — almost €400bn — a sum that needs to be absorbed by offsetting deficits in the rest of the world. The trade surplus explains why the EU is not keen to impose counter-sanctions to the US steel and aluminium tariffs once the temporary exemption ends on May 1.

When you need the world more than it needs you, you are weak. The eurozone is in that position

The root cause of the EU’s overdependence on other powers is, as it has always been, a collective action problem: a collection of small countries, each of which has their own small-country mindset. There is no such thing as an overall economic, let alone geopolitical, strategy.

The current account surplus, for example, is not a deliberately chosen objective but an effect of national accounting — a number at the bottom of a long spreadsheet. EU households and companies are running external savings surpluses. The collective decision by most eurozone member states to shift the government sector into a permanent surplus then implies a structural current account surplus for the entire eurozone economy.

I recall a conversation a decade ago with the late Italian economist Tommaso Padoa-Schioppa, who saw the euro as a potential instrument of geopolitical power, similar to the role the dollar has played for the US. The idea was to acquire what US economists like to refer to as “the exorbitant privilege” — a status bequeathed by the role of the dollar as a global reserve currency. The exorbitant privilege allows the US to print dollars to finance its own imports. In such a lucky position, you cannot conceivably face a balance of payments crisis.

The eurozone could at least have tried to share its spoils with the US. Such a strategy could indeed have raised its global power and influence. But instead, the EU preferred to subject itself to small-country fiscal rules, giving rise to the triple whammy of a structural current account surplus, an underfunded defence system, and an over-dependence on energy imports.

When you need the world more than it needs you, you are weak. The eurozone is in that position. The US is strong because it has made itself indispensable to the global economy. Of course, President Donald Trump’s trade sanctions will be bad for the US economy. But the point is that he can get away with it.

Russia is more self-sufficient than the EU. China is moving in that direction. What bothers me about the eurozone is not its failure to attain a geopolitical role, but that it never wanted it in the first place.