Europe and Russia: What’s next?

Manal Lotfy , Saturday 14 May 2022

The European Union is struggling to preserve its unity in the face of the war in Ukraine, writes Manal Lotfy

Europe and Russia:  What s next
European Council President Charles Michel (L) speaking with Ukraine s Prime Minister Denys Shmyhal (2ndR) during their meeting in the southern Ukrainian port city of Odessa, on the 75th day of the Russian invasion of Ukraine. (photo: AFP)

 

Freshly re-elected French President Emmanuel Macron did not hesitate to call for big thinking on the future of Europe this week, arguing that the Russia-Ukraine crisis had showed the need for a “historic process of reflection.”

In a speech to the EU Parliament in Strasbourg two days after being sworn in for a second term as French president, Macron did not shy away from playing his favourite role of offering a different look at the status quo in Europe and its institutions and security arrangements.

His intervention came as the EU is suffering from a major rift within its ranks due to differences over the sixth package of sanctions against Russia, the extent of military support to Ukraine, and the time frame for examining Kyiv’s application to join the EU.

These differences have pushed EU officials to call for serious discussions about whether it would be better to change the voting mechanism within the EU to make voting by majority only and not unanimous.

The proposal, sure to raise disputes within the European bloc, aims to enhance the effectiveness of the EU and break the deadlock on issues giving rise to polarisation.

In his speech, Macron surprised everyone when he called for a new political organisation to unite the democracies on the European continent, arguing for big thinking on the future of Europe.

He told the EU Parliament that “a European political community… a new European organisation would enable democratic European nations who adhere to our values to find a new space for political cooperation,” listing security, energy, transport, infrastructure investment, and movement across borders, especially for young people, as issues that the body would tackle.

The new organisation would allow non-EU members to join Europe’s security architecture in other ways, Macron said. Warning that Ukraine would probably not join the EU for decades, he suggested that Ukraine could join the “parallel European community” instead.

Ukraine began the process of applying to join the EU in February this year, four days after the Russian invasion. “We all know perfectly well that the process to allow [Ukraine] to join would take several years, indeed, probably several decades,” Macron said.

“That is the truth unless we decide to lower the standards for accession and rethink the unity of our Europe,” he added. “The European Union, given its level of integration and ambition, cannot be the only way to structure the European continent in the short term,” he said.

Macron also warned against “humiliating” Russia over the war in Ukraine, arguing against a punitive settlement against Moscow when the war is over. “When peace returns to European soil, we will have to build new security balances and together we must never give into the temptation… or the desire for revenge because we know how much that has ravished the road to peace in the past,” he said.

Macron’s proposals are sure to provoke fierce debates within the EU, which is stumbling in devising a unified strategy to deal with the set of security, economic, and political challenges imposed by the Russian invasion of Ukraine.

In the past, Central and Eastern European countries have opposed Macron’s ideas to promote more European integration, but with the security threats facing Europe today, his ideas of promoting EU sovereignty in new technologies, defence, energy, and food production may gain traction.

France currently holds the EU’s rotating presidency, which gives it additional weight in setting the agenda of the European bloc this year.

The question of whether the EU rule that foreign-policy decisions, including sanctions packages must be unanimous, was raised by several failed attempts to reach a consensus on a new sanctions package against Moscow.

In the end, the EU was forced to water down its plans for a ban on Russian oil imports for the second time, highlighting further divisions over its response to the war.

The bloc will now drop a proposed ban on EU ships carrying Russian oil to third countries, a move that would have undermined Russia’s income from global energy exports.

Greece, which is among the world’s largest shipowners, was one of the member states to oppose the new measure along with Malta and Cyprus.

The move came after the EU said it would give Hungary, Slovakia, and the Czech Republic more time to comply with the ban on Russian oil following opposition from these countries.

Although the European Commission has talked about an imminent agreement, the text of a new sanctions package against Russia, which has been changed three times to meet the objections of countries led by Greece and Hungary, has not yet received unanimous support.

The gridlock has meant Brussels has been forced to agree to numerous carve-outs and exemptions to win over the 27 member states.

Hungary, among other countries, is still withholding its backing from a proposed EU ban on imports of Russian oil, even after talks on Monday evening between Commission President Ursula von der Leyen and Hungary’s Prime Minister Viktor Orbán.

Von der Leyen said on Twitter that her discussion with Orbán had been “helpful to clarify issues related to sanctions and energy security.” But while they had made progress, she added that “further work is needed.”

Hungary is among the countries hoping for a longer phase-in period than the bulk of EU member states for the oil ban. It is also seeking EU financial support to help engineer its transition away from Russian fossil fuels, helping it to invest in alternative infrastructure.

Other EU member states, including Slovakia and the Czech Republic, are also expected to receive special terms in the energy sanctions, given their reliance on Russian crude oil.

In another sign of the difficulties facing the bloc, a proposal by a top EU official met with a muted response. EU Foreign Policy chief Josep Borrell proposed that the bloc should seize $300 billion of frozen Russian foreign-exchange reserves to help fund the reconstruction of Ukraine.

The West has already taken control of around half of Russia’s $600 billion of gold and forex reserves abroad, and officials are now considering how these could be used to support Ukraine’s recovery.

The seizure of foreign-exchange reserves would be an extraordinary move, but Borrell, in an interview with the London Financial Times, pointed to the US decision to set aside $3.5 billion of the Afghan Central Bank’s assets to pay for humanitarian aid and compensation for victims of the 9/11 attacks on New York and Washington.

“I would be very much in favour because it is full of logic. We have the money in our pockets, and someone has to explain to me why it is good for the Afghan money and not good for the Russian money,” Borrell said.

Even across the Atlantic, imposing sanctions on Moscow has proven to be like walking a tightrope. On Sunday, the US administration unveiled sanctions against executives from Gazprombank, Russia’s third-largest lender and a subsidiary of state-owned energy company Gazprom.

The measures imposed against Gazprombank executives were the first involving the biggest energy company in Russia, as the West has thus far avoided taking steps that might lead to disruptions of gas supplies to Europe, Russia’s main customer.

A senior Biden administration official said that the US sanctions targeted 27 executives of Gazprombank, but the measures did not freeze the company’s assets or prohibit transactions with it since it is the main way Russia sells gas to Europe.

What the best options will be if the war in Ukraine continues for more months or years is an unanswered question. The answer will test the unity of the West to the full.

 

*A version of this article appears in print in the 12 May, 2022 edition of Al-Ahram Weekly.

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