Archive for category economic crisis
It is clear that the Euro-crisis has and will have huge implications for EU foreign policy. A lot depends on what happens in the next months – the solution to the Greek or Italian problems, the contours of a multi-speed Europe and how messy a solution or non-solution to the euro-crisis will be. Things can get worse, or they can get better. But it is already possible to take a snapshot of the foreign policy implications of the Eurozone crisis. The picture contains a push to the background of all foreign policy issues, followed by fewer foreign policy resources and a coma for EU soft power, made worse by the fact that the EU understanding of power is so unhedged. Read the rest of this entry »
The EU has recently approved the Eastern Partnership initiative, just at the moment when the global economic crisis is changing the rules of the game in the Eastern neighbourhood, and elsewhere. Both Russia and the EU will have fewer resources – money and political attention – to be too preoccupied with the neighbours. I previously wrote about the Russian neighbourhood policy in times of crisis. The Eastern Partnership is not in crisis, but will have to be implemented in times of crisis. But what is the likely impact of the crisis on the Eastern Partnership?
The Eastern Partnership is an attempt to resuscitate the European neighbourhood policy and focus EU’s political attention on the East. But now the economic crisis is stealing the show. Concentrated on itself, with the growing danger of protectionism inside the EU, and growing negative attitudes to “foreign” workers, many aspects of the European integration process, let alone the EU neighbourhood policy will come under strain. Read the rest of this entry »
The global economic crisis led to a sudden, forceful, even brutal return of the term “Eastern Europe” applied indiscriminately to all of non-Western Europe. It has always been difficult to brand the bunch of very diverse former socialist countries. Terms such as Central and East Europe (CEE) or South East Europe (SEE) have been used for a while. But they were never too clearly defined (and analytically useful), nor very satisfactory for the countries included in these categories. The “Central Europoean “ Hungary did not really want to be part of “Eastern Europe” together with Ukraine. Romania or Slovenia also did not really like to be South East European together with Albania or Serbia. The more countries diverged in their reform trajectories – the less meaningful the terms CEE and SEE became. More to the east – the term “post-soviet” was not particularly precise either, since technically it would include Estonia or Lithuania which were light years ahead in reforms and democratization from central Asia or Belarus, which are really post-Soviet. Such terminology has never been very meaningful. They were crude Western simplifications of a complex set of “non-western” small states. Read the rest of this entry »
Ukraine’s economic crisis could have profound (geo)political consequences for European security. A default in Ukraine could lead to higher unemployment, a drastic fall in governance standards, a rise in emigration, organised crime, and an even deeper political crisis. Or these might happen even without a formal default, but with a seriously ill economy for the next few years. A failed economy in Ukraine will hit hard Belarus and Moldova (and Transnistria) putting under strain all of EU’s immediate Eastern neighbours. It will also affect some EU member states, including Austria whose banks have lend heavily in Ukraine. Any of these developments will affect the EU and could lead to a significant throw back to its anyway-unimpressive European neighbourhood policy.
Ukraine might be about to collapse economically. It is unable to meet the conditions of the International Monetary Fund to qualify for a USD 16 billion bail-out. Because it will face presidential elections in a year from now – a divided government in Ukraine is not able to meet the IMF’s condition on cutting (to zero) the budget deficit. Ukraine’s political mess was sustainable in times of economic growth, but not during the global economic crisis.
A failed economy is not yet a failed state. But the big question is what will Russia do. Read the rest of this entry »
For the last two months, at every single conference I have been to, I saw experts or officials who start to be dismissive about Russia again. Many start assuming that after a few years of powerful and assertive foreign policy, Russia will again turn into a weaker and more compliant partner for the EU. A bit like in the 90s. With a fall of some 80%, Russia’s stock market was one of the worst hit in the world (worse than US, EU, China, Brazil, India and you name it); its total external debt is now bigger than its financial reserves; its pipeline ambitions and shopping spree of European assets undermined by lack of access to credits from Western banks. All this will undoubtedly affect Russian foreign policy, and it will change the rules of the game in the shared neighbourhood that comprises Ukraine, Moldova, Belarus and the South Caucasus states. Read the rest of this entry »