Europe / European Union - Elcano Royal Institute empty_context Copyright (c), 2002-2018 Fundación Real Instituto Elcano Lotus Web Content Management <![CDATA[ A plea for the German Presidency: invest boldly and smartly in the future of Europe ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/commentary-pirozzi-tekin-toygur-a-plea-for-the-german-presidency 2020-06-30T02:53:03Z

Expectations for leadership are high, as are hopes that the German Presidency of the Council of the EU will give substance to the claim ‘Together for Europe’s recovery’.

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Spanish version: Un llamamiento a la presidencia alemana: invierta con valentía e inteligencia en el futuro de Europa.

Italian version at Euractive Italy and German version at Euractive Germany.

The German Presidency of the Council of the EU will officially kick off on 1 July 2020.1 Expectations for leadership are high, as are hopes that the Presidency will give substance to the claim ‘Together for Europe’s recovery’. Germany has the unenviable task not only of guiding the Union out of the crises generated by the COVID-19 pandemic, but also of encouraging it to design a credible strategy for longer-term reform. In fact, the health emergency has exposed the many gaps in the European project that affect its ability to respond to citizens’ needs, posing a question for the EU’s survival. In a sense, the pandemic has served as a wake-up call, reminding Europeans that there are no options other than to change or to disintegrate.

“Bold reforms are not easy to make and require a combination of different elements: the political will of leaders, courageous action by institutions and the support of citizens”.

The long list of strategic agenda points require careful expectation management as regards what the German Presidency will be able to achieve. Bold reforms are not easy to make and require a combination of different elements: the political will of leaders, courageous action by institutions and the support of citizens. The German government has already given a preview of its political drive through the Franco-German initiative for European recovery, which paved the way for an unprecedented proposal by the European Commission. However, the Franco-German engine is a necessary but not sufficient condition for a successful outcome. A core task for the German Presidency is to build bridges between Member States.

Thus, the German Presidency should start by convincing Member States, particularly the ‘frugal four’, to support the European Commission’s ‘Next Generation EU’ recovery plan and an ambitious Multiannual Financial Framework (MFF) for 2021-27, including also the Budgetary Instrument for Convergence and Competitiveness (BICC), a permanent instrument that remains an important feature for the euro’s durability. Possible longer-term reforms on the economic governance of the EU are also important, starting with the long-avoided conversation on the mandate and accountability of the European Central Bank. What are at stake are not only the symbolic emblems of EU integration, namely the common currency and the Eurozone, but –most importantly– the well-being of European citizens. Social cohesion should be at the plan’s centre.

“The German Presidency also needs to strengthen the EU’s role in a post-pandemic world”.

The COVID-19 recovery offers a window of opportunity to reinforce the sustainability of the EU’s development model. This means that climate action needs to be at the heart of recovery plans and the EU must not deviate from the Green Deal’s ambitions and needs to be aware of and transparent about potentially inherent trade-offs in terms of economic uptake. The German Presidency needs to activate all the EU’s climate diplomacy potential to rebuild global plans for scaling up national pledges under the Paris Agreement.

Rapid digital transition should get a fair share of the Presidency’s agenda –and of the recovery plan– as a vital investment for the future, too. It is also very much connected to the broad concept of strategic autonomy. Digital and technological sovereignty should be key items on the agenda.

If the EU wants to strengthen its ability to resist and adapt in times of crises it will have to strengthen its resilience. This essentially requires holding on to Europe’s core values: democracy, rule of law, human rights, freedom and equality. Particularly, seeking basic consensus on the rule of law shared by all Member States is desperately needed as a fundamental precondition for the future of Europe. Long before the COVID-19 pandemic, Article 7 procedures were initiated against Poland and Hungary. The pandemic has reinforced the challenges to the EU’s common values. The German Presidency needs to break the silence on this topic. Additionally, rule of law conditionality needs to become an inbuilt feature not only of the MFF but also of the recovery plan. If common values are at risk, the EU’s future will be at stake.

Violations of human rights have been reported at the external borders of the European Union both before and after the COVID-19 pandemic. Along with the comprehensive opening of the internal and external borders of the Schengen Area, the Common European Asylum System urgently needs a reform in the spirit of joint solidarity.

The German Presidency also needs to strengthen the EU’s role in a post-pandemic world. Both the US election in November and the developments in US-China rivalry should be followed closely. While looking far ahead, the EU should also design a more effective strategy for its neighbourhood: from the Western Balkans to Turkey, from the Mediterranean to Africa there are various agenda items. Brexit is another urgent item on the list that will not allow any suspension. Since the British government is not willing to extend the transition period, the German Presidency will have to deal with the issue.

The scattered and belated European-level response after the outbreak of the emergency, combined with the latter’s profound economic and social consequences, may impact negatively on the people’s trust in EU institutions, reinvigorating Euroscepticism. Regaining the hearts and minds of the people of Europe will need a strong symbolic initiative to make the EU more visible in their daily lives. A reviewed Conference on the Future of Europe, with a shorter timeframe, clear objectives and a credible mobilisation system could prepare the ground for a metaphorical vaccine for the EU.

The choices made during the second half of 2020 are destined to have a long-lasting impact on Europe and its citizens: the German Presidency will be well advised to choose its priorities wisely in order to invest boldly and smartly in the EU’s future.

Nicoletta Pirozzi
Istituto Affari Internazionali
| @NicolePirozzi

Funda Tekin
Institut für Europäische Politik
| @FundaTekin17

Ilke Toygür
Elcano Royal Institute
| @ilketoygur


1 A prior version of this text was published as a part of the Trans European Policy Studies Association’s (TEPSA) ‘Recommendations from the members of the TEPSA network to the incoming German Presidency’. The authors wish to thank Michele Chang, College of Europe; Gaby Umbach, European University Institute; Saila Heinikoski and Niklas Helwig, Finnish Institute for International Affairs for their contributions.

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<![CDATA[ Expectations, competences and power: understanding the dynamics of EU institutions in tackling the COVID-19 crisis and setting the tone for the Conference on the Future of Europe ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/commentary-toygur-expectations-competences-and-power-understanding-dynamics-eu-institutions-tackling-covid-19-crisis 2020-06-01T04:15:57Z

It is vital to understand all its power dynamics before judging the EU’s performance while dealing with these multidimensional crises (such as the COVID-19 crisis), or any others to come.

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Introduction

The coronavirus has been an unprecedented challenge for the world. The EU, an incomplete integration project with a very high degree of interconnectedness between nation states, was slow in responding at the very beginning of the crisis. Since both health and border management are mainly member-state competences, the primary reaction was to rally around the national flag. Once the scenario and the need for a coordinated response was clearer, the shaping of a ‘European’ response could begin.

Even if the Union has been criticised for a lack of solidarity –as in all other crises of the 21st century–, some of its institutions –mainly the European Commission and European Central Bank– rose to the challenge in March and took definite steps. Some of the political groups in the European Parliament called for united action since the early stages of the crisis, and ended up with a resolution asking for an ambitious plan that has been widely supported. The European Council, on the other hand, has already met (virtually) four times since the beginning of March to discuss the next steps forward. Now a decisive meeting is around the corner. Leaders will gather on 19 June to discuss the European Commission’s long-term budget proposal together with its economic recovery plan. The differences between member states will have an impact on the shape and size of the plan and set the final tone.

“(…) it is vital to understand all these dynamics before judging the EU’s performance while dealing with these multidimensional crises, or any others to come”.

The power battle in the European Council is very much connected to national politics. The heads of state and government have their own national politics to push forward. Party politics and coalition dynamics are important pillars of their decision-making mechanisms, in addition to public opinion in their home countries. For this reason, it is vital to understand all these dynamics before judging the EU’s performance while dealing with these multidimensional crises, or any others to come. Studying the competences and power dynamics could be a useful exercise right before the Conference on the Future of Europe begins.

Institutional and political dynamics: do we need a power re-shuffle?

The COVID-19 pandemic has had asymmetric consequences for various member states in the Union. The severity of the pandemic in a country also defines each country’s perspective and its expectations from the EU. This situation opens up the Pandora’s box about decision-making in the EU, the role of institutions and the power balance within them and between them. To adjust expectations, it is important to understand the logic of competences and the distribution of power between institutions. This requires a knowledge of the functioning of supranational institutions, which should also be completed with background information on national interests.

It is clear that the centre of gravity has shifted in favour of the European Council as a result of the multiple crises that the EU has faced in the 21st century. Having said that, the differences are at a historical high, with a significant degree of fragmentation, geographically and also ideologically. In addition, many governments are in coalition which makes it very difficult to come up with agreements that will please all the partners. The current practice is ad-hoc cooperation between countries, instead of the historical solid alliances of the past. Intergovernmental bargaining and the power dynamics between member states play an important role in defining what will become ‘the EU response’.

“The power dynamics should be revisited in the light of the Conference on the Future of Europe”.

The recently published Franco-German initiative for recovery is a very good example to understand the role national leaders play in the European decision-making mechanism. The German Chancellor, Angela Merkel, said that she had spoken to all the leaders in the European Council before agreeing on a compromise with the French President Emmanuel Macron. The initiative clearly set the scene in shaping the economic recovery plan of the European Commission.

When we are talking about national interests, there is the party-politics dimension and the interests of each government, depending on the electoral cycle. There is a gap between policies that enforce European integration (like moving forward with the fiscal union or coming up with a common health policy) and that will be politically beneficial for the politicians in office. If there is a poll on the horizon, the desire to please public opinion becomes very intense. In spite of this, politicians might have to invest in the future of European integration against the short-term interests of their own governments. That is not necessarily a virtue that is frequently found. We are see this situation in many countries, even if real leadership in times of crises requires the shaping of public opinion and not hiding behind it. There is a very thin line between the national interests of a country and the electoral interests of the political elite in office.

Positions in the European Council (and the Council of the EU) should be judged in light of all these dynamics. If you add to that that the members of the European Parliament are selected through national political parties and that the Commissioners are proposed by each country’s government, there is a further twist. National governments and political elites play a key role in the EU. They should rise to the occasion at times of crisis and open the way for communitarian policies for the greater good.

The future ahead

“The aftermath of the current crisis and its legacy will define the future of integration”.

The power dynamics should be revisited in the light of the Conference on the Future of Europe. In that debate, the expectations/competences gap should be addressed. In every crisis, the interconnectedness (economic, social and political) between member states becomes even more visible. It is clear that, completing the European integration project is not just needed for acting within the principle of solidarity at times of difficulty, but also because there is a need to have related instruments for the well-being of all countries. To be able to fulfil citizens’ expectations, the EU should have the necessary toolbox. However, this may well mean transferring further competences to the Union.

In every crisis the EU is expected to save the day. It also faces the question of ‘what is the future of European integration?’. Articles about the inevitable fall of the European project and the rise of nationalism rapidly make an appearance. Nevertheless, passionate observers of European politics know the answer: it has always been the crises that have pushed the European project forward. COVID-19 and its consequences are being identified as being the biggest challenge since the end of World War II. That is why the French President Emmanuel Macron recently called it a ‘moment of truth’. The aftermath of the current crisis and its legacy will define the future of integration. At the end of the day, democratically-elected national governments play a vital role in every step ahead.

This time it is not just the EU that is facing a huge challenge. The pandemic has only deepened the already existing problems and highlighted the flaws inherent to international organisations. It is clear that the world is undergoing a period of reconstruction and reform in global cooperation. The process is very much needed since the current system was built in the 20th century and it did not necessarily reflect all the needs of the present day. If the EU wishes to play a more influential role in the world –or must do so because of the White House’s lack of interest– its institutions must be firm. They should be reinforced not just with new competences that require Treaty changes but also with the political will of the politicians currently in office in each national capital. It is time to invest in the future, in the next generation.

Ilke Toygür
Analyst of European Affairs, Elcano Royal Institute | @ilketoygur

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<![CDATA[ EU-Japan cooperation on defence capabilities: possibilities? ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari76-2020-tsuruoka-fiott-eu-japan-cooperation-on-defence-capabilities-possibilities 2020-05-22T12:29:44Z

Europe and Japan have an interest in developing defence capabilities and research but there are challenges and cooperation is conditioned by a shifting geopolitical landscape.

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Theme

Europe and Japan have an interest in developing defence capabilities and research but there are challenges and cooperation is conditioned by a shifting geopolitical landscape.

Summary1

European countries and Japan both possess advanced defence technologies and they can bring to bear a range of civilian or dual-use technologies for defence procurement and defence research. At the same time, both players recognise that it is increasingly difficult for individual countries to manage defence equipment projects without cooperation. Therefore, it is clear that both Japan and Europe have a vested interest in cooperating with each other on capabilities and industrial defence issues.

Within this context, there is scope to assess the current level of cooperation between Europe and Japan on defence capability development and equipment procurement. In the particular context of the EU-Japanese economic (EPA) and strategic (SPA) partnerships , this paper asks what the current scope is for closer cooperation between the two partners and whether there are any avenues that could be explored to improve cooperation. It first looks at the strategic rationale for closer European-Japanese cooperation on defence capabilities, and later analyses the hurdles to improving and promoting a higher level of cooperation between Tokyo and Brussels.

Analysis

Introduction

European countries and Japan both possess advanced defence technologies and can bring to bear a range of civilian or dual-use technologies during defence procurement and defence research. These countries account for a large share of technological innovation in the global economy. At the same time, both actors recognise that it is increasingly difficult for individual countries to manage defence equipment projects without cooperation: therefore, there is a need for more European and Japanese cooperation on defence capabilities and defence research. The need for such cooperation is increasingly seen against a backdrop of transatlantic tensions and the rise of China.2 Both Europe and Japan buy a large amount of defence equipment such as jet fighters and advanced systems from the US, but there is increasing frustration with the way the US deals with allies in its joint R&D and arms transfer initiatives (Foreign Military Sales, FMS) despite the importance of the relationship with Washington. If Japan and Europe’s relationship with the US is to be put on a sustainable footing to meet growing strategic challenges, a sensitive but much needed conversation about defence capability development and the allied defence industries is needed sooner rather than later.

Indeed, in Europe countries such as France are increasingly determined to emphasise the importance of ‘strategic autonomy’ for Europe. This is principally a national discussion but one that is having a wider resonance in Europe, especially with reference to the need to ensure a minimum level of ‘technological sovereignty’ for European critical technology areas. Despite the fact that countries such as Belgium and Poland have recently procured the F35 fighter (and Finland is yet to take a decision on its next fighter acquisition), Europeans increasingly understand that simply buying from the US may have a detrimental effect on their national and European industrial bases. It is, therefore, natural that Europeans want to invest more in Europe’s own defence industry as a precondition for more strategic autonomy in the world, particularly given the fact that many European countries are increasing their defence expenditure.

In Japan, as the Abe government has substantially increased the volume of procurement of expensive US equipment (most notably F-35 fighters, V-22 Osprey transport aircraft and Aegis Ashore missile defence system –all through the FMS–), Tokyo’s desire to be more autonomous in its defence procurement looks less clear than it is in Europe. However, or more precisely, because of the increasing FMS imports from the US, the crowding out of Japan’s own defence suppliers means that the challenge of maintaining the country’s own defence industrial infrastructure and technology base becomes more acute. Joint R&D with European partners (and resultant joint manufacturing and arms exports to third countries) is seen as a new way to maintain Japan’s declining defence industry. What is more, Tokyo’s interest in pursuing defence equipment cooperation with Europe can be located in a broader drive to strengthen European-Japanese political and security cooperation , be it with the EU, NATO or individual European countries such as the UK, France and Germany.3

Therefore, it is clear that both Japan and Europe have a vested interest in cooperating with each other on capabilities and industrial defence issues. Brussels continues to value its international partnerships with key global players such as Japan. In fact, the Union has become adept at integrating security into its trade and economic partnerships and Japan is a core like-minded player in buttressing the multilateral order against the vagaries of states that no longer seem to value and openly question the rules-based order. Whether regional organisations like the EU and countries like Japan, Canada, Australia and others can be called the upholders of the ‘liberal order’ remains to be seen. What is clear, however, is that the EU sees the need to take on a security and defence perspective to its foreign policy and opportunities to partner up with countries like Japan on issues such as maritime security and crisis management is genuinely valued.

Within this context, there is scope to assess the current level of cooperation between Europe and Japan on defence capability development and equipment procurement. In the particular context of the EU-Japan Economic Partnership Agreement (EPA) and Strategic Partnership Agreement (SPA),4 it is worth asking what scope there is for closer cooperation between the two partners and whether there are any avenues that could be explored to advance cooperation. In this respect, it is necessary to acknowledge that Japan already maintains close bilateral ties with key European countries such as the UK and France on defence, but we should not neglect the growing importance of the EU as a defence actor too. This paper first looks at the strategic rationale for closer European-Japanese cooperation on defence capabilities, and then analyses the hurdles to improve and promote better cooperation between Tokyo and Brussels. The paper ends with some concrete policy recommendations.

Two peas in a pod? Analysing the basis for cooperation

In Europe, and specifically the EU, there is currently a profound strategic discussion about the future of European defence. Not only have tensions in the transatlantic relationship raised questions about the future of NATO and the US security guarantee, but Europe is increasingly aware of the need to safeguard critical technologies as a way to ensure its political autonomy vis-à-vis the US and China. As those two countries head towards greater conflict, Europe and Japan need to think about their alliances and what more they can do for their own security and defence. In this respect, Europe increasingly recognises that defence is a pillar –among other areas– designed to ensure the Union’s technological sovereignty.

For Japan and others states wishing to nurture their defence industrial bases, the case of the EU –not a state but an organisation– is interesting because it highlights to what extent powers traditionally dependent on Washington for defence can support their own firms and technology development. Europe still maintains globally competitive defence firms,5 but this is set to be tested not only by competition from the US but, increasingly, from China as it starts to export sophisticated defence equipment globally.6 It is for this reason that large markets in Europe –principally France and Germany, but also Spain– are launching ambitious capability programmes such as the sixth-generation Future Combat Aircraft System (FCAS) and the Main Ground Combat System (MGCS) tank.

European governments and EU institutions have long-held that maintaining individual national defence markets is unsustainable and financially costly. EU institutions have also argued that the duplication of defence systems not only imperils the long-term health of Europe’s defence market but it also raises strategic questions such as a lower level of interoperability and standardised components, equipment and technologies. Historically, institutions such as the European Commission have sought to manage the European defence market through a dual process of market liberalisation (lowering barriers between EU member states on procurement and equipment transfers) and pushing defence industrial regulation to the EU level. This process was managed by two EU laws adopted in 2009 on a Union-wide basis.

While Europe already possesses some world-class companies that produce leading defence technologies (in missiles, aircraft and space), European producers face competition on a global and intra-EU basis. Recent discussions in the EU have focused on improving the competitiveness of Europe’s defence industries and enhancing the Union’s strategic autonomy. US moves to continue to corner the European defence market have been met with rejection by some member states, even though a number of European governments still want to maintain a strong security relationship with Washington. Here, we should note a nuance between the security interests of European governments (maintaining the US security guarantee) and their industrial interests (nurturing their own defence industrial and technological bases).

In recent years, however, this historically regulatory approach has been enhanced by a foray in defence investment by the Commission.7 Indeed, a European Defence Fund announced in 2016 will now seek to stimulate defence research and capability development between EU member state governments. This new course of cooperation has not only raised the suspicions of the US but it has spiked the interest of close EU partners such as Japan. There is at present some question about the total amount of the Fund. Under the current negotiations for the EU’s next multi-annual financial framework (MFF), the Commission asked for €13 billion over the 2021-27 period for defence investments. However, under Finland’s Presidency of the Council of the EU in 2019, member states agreed on half the amount: €6 billion over the same seven-year period. We shall have to wait and see how the EDF and the broader MFF might be affected by the COVID-19 crisis .

The European Defence Fund should not be taken in isolation from other initiatives designed to improve the Union’s defence capabilities and strategic autonomy. In 2017, 25 EU member state governments (minus Denmark, Malta and the UK, at the time an EU member) agreed to embark on Permanent Structured Cooperation. This form of cooperation binds governments to 20 defence-related commitments and engages a number of them in 47 capability programmes. The budget lines and development of each of these projects is unknown at present but progress is subject to a yearly review by the HR/VP with the support of the European External Action Service and the European Defence Agency. All of this is to say that the focus on EU defence capability development has intensified since 2016 and recent steps are likely to generate further European cooperation in the future at a time when the transatlantic relationship (not only in defence, but even in areas like trade) is likely to become even more bumpy in the future.

In Japan the Abe government introduced the ‘Three Principles on Transfer of Defence Equipment and Technology’ in April 2014, paving the way for defence equipment cooperation with other countries such as joint R&D and joint manufacturing including arms exports. Until the introduction of the new three principles, there was a blanket ban (‘Three Principles on Arms Export etc.’), which effectively precluded all arms exports including joint R&D and production with other countries (with individual exemptions mainly vis-à-vis the US) for decades. Following the introduction of this new policy, Tokyo has so far concluded ‘Agreements on the Transfer of Defence Equipment and Technology’ with the UK (July 2013), France (March 2015), Germany (July 2017) and Italy (January 2019), and specific projects are being developed with the UK and France.

Defence equipment and technology cooperation has thus rapidly become a new pillar of Tokyo’s strategic partnerships with an increasing number of countries, particularly those in Europe like the UK and France, expanding the horizon of Japan’s political and security engagement. While Tokyo did not have a clear vision about what it wanted to achieve at the outset, the level of expectations on the part of Tokyo’s partners were always high on the European side. Thus, the process started as something driven by Europe, to which Japan cautiously responded: Japan –both the government and defence companies– had no expertise and experience in exporting arms or joint R&D with other countries, because of the ban that had been in place for decades.

That said, there is a growing realisation that the ways in which Japan has been developing and producing defence equipment in the domestic market is becoming ever more unsustainable not least because of the rising cost of developing new technologies and equipment. Furthermore, Tokyo’s domestic defence procurement budget has not increased over the past decade, which has forced Japanese defence companies to seek a new way to sustain their business.

A rock and a hard place? Assessing the hurdles to cooperation

Nonetheless, there remain a number of serious obstacles to Japan becoming an effective international arms producer and exporter. Recently, a lot of attention has been paid to Japan’s big arms export ideas including Australia’s submarine bid and the export of the US-2 amphibious aircraft to India, none of which has materialised so far, disappointing those who wrongly thought it would not be too difficult to export Japan’s state-of-the-art defence equipment on global markets. They should have known how competitive and already crowded the international defence market is. Japanese equipment is not competitive in terms of price and has not been tested in combat, which raises doubts about its performance. These export efforts have largely been led by the government. Within the defence industry, the level of eagerness for export varies a lot from one company to another –generally speaking, big companies are less eager to expand their defence business than smaller ones (because the latter are more vulnerable and recognise that they need to try new business to survive)–.

Furthermore, another remaining problem on the Japanese side has to do with the lack of the government’s clarity on its policy priorities, which makes it difficult for private companies to invest more in the defence sector, in anticipation of more international R&D and arms export. Japanese companies are still wondering how serious the government is regarding arms exports (including joint R&D with other countries). In particular, Japanese companies do not know what the government will be able to approve as every project needs the go-ahead from the National Security Council and most probably also needs to undergo parliamentary scrutiny. Experts argue that the establishment of ATLA (Acquisition, Technology and Logistics Agency) within the Japanese MOD in October 2015 does not help much in this regard. Without an assured prospect of being able to sell products to international markets and third countries, it would be difficult for European defence companies to cooperate with their Japanese counterparts beyond R&D. It might be possible to engage in R&D without knowing whether the resulting products will be sold to third countries, but the hurdle for joint production would be higher.8

In short, Japan still lacks a proper national defence industrial policy. The government emphasises the importance of maintaining and strengthening the domestic defence industrial base, but at the same time, the amount of FMS imported from the US has skyrocketed in recent years, making the volume of domestic procurement even smaller. For Japan, there is a trilemma between the need to (1) procure the most capable equipment (often resulting in FMS imports from the US); (2) ensure value for money (thus reducing the unit cost); and (3) maintain (and preferably strengthen) the domestic industrial defence base. The government does not seem to have a coherent idea about how to prioritise and reconcile between those different and conflicting aims.

A similar trilemma afflicts Europe, with many governments seeking to develop their national industrial bases while also keeping the US ‘sweet’ through FMS. In basic terms, European governments are worried that the US may increasingly pull-back from European security and so purchases of US equipment are desirable for the maintenance of the alliance (while being somewhat detrimental to the objective of supporting domestic industry). What is more, in the context of defence planning requirements in NATO (eg, the NATO Defence Planning Process) the idea that Europeans should fill capability shortfalls is valid, but there is some question whether filling these requirements simply supports US defence contractors. As the French Defence Minister Florence Parly recently observed, ‘NATO is about Article 5 and not about Article F35’ –meaning that the alliance should go beyond a sort of club to support the US defence industrial base–.9

It is for this reason that attention to defence capability development within the EU has increased over the past few years. Although the EU has come a long way in developing its defence industrial policy, the Union cannot really show much for its efforts in the way of capabilities. So far, EU initiatives have led to relatively more internal market openness and a handful of defence research projects related to advanced camouflage, maritime surveillance, etc. For the EU to become a serious player in defence, the European Defence Fund must be endowed with sufficient financial assets and lead to a tangible difference in the way European’s organise their defence (harmonised military requirements, identification of relevant capabilities, etc). There is still no overall accord on some sensitive issues such as export and third-party access. On exports, the Commission has stayed away from the question of whether the EU should have a say over EU-funded defence capabilities and instead it is up to governments to decide on a common approach to selling defence equipment abroad (France and Germany have historically maintained different arms export policies).

The European Defence Fund understandably comes with certain restrictions for non-EU states/companies seeking to participate in programmes. The Union wishes to safeguard the interests of the EU even though the proposed regulation does not rule out a ‘non-associated third country entity’ from participating should this participation be ‘necessary for achieving the objectives of the action’ (see Article 10.2). However, as the proposed regulation goes on to state (see Article 25.2), ‘the results of actions receiving support from the Fund shall not be subject to any control or restriction by non-associated third countries or by non-associated third country entities, directly or indirectly through one or more intermediate legal entities, including in terms of technology transfer’. Thus, non-EU entities have a scope to cooperate but under special circumstances.

Finally, much like Japan, the EU does not have a proper defence industrial policy per se, but, unlike Tokyo, the Union faces the difficulty of forging a coherent defence policy. Whereas Japan as a sovereign state is engaged in the development of its national defence policy, the EU finds it difficult to find a common defence policy and to properly define what it means by terms such as strategic autonomy. Under the leadership of the new HR/VP and European Commission, there will be a process underway in 2020 to better define what the Union’s defence policy should look like. Such a process (called for now the ‘strategic compass’) should guide the Union in deciding what it wants from its defence policy and what type of military actor it should become.

Turtle or hare? Moving forward together

Given the similarities in both the objectives of the EU and Japan, and the common hurdles they both have, it is not necessarily easy to come up with specific recommendations to improve cooperation in defence capabilities. For the foreseeable future, as a general observation, Europeans should take their bilateral cooperation with Japan seriously and see whether bilateral defence capability projects and R&D programmes can be enhanced with a more pan-European and/or EU focus. Both Europe and Japan need to give a better account of what type of defence actors they are (and want to be) given the rapidly shifting geopolitical tectonic plates. Joint capability development and R&D investments are not feasible with only an industrial rationale, important as it is. In this respect, high-level political guidance is needed to ensure that any capability initiatives respond to the broader defence objectives of the EU and Japan.

For Japan, Tokyo needs to clarify what it is going to prioritise regarding its defence industrial policy –particularly regarding what is possible for joint manufacturing and export to third countries purely on a commercial basis–. The Japanese MOD (ATLA) needs to improve its ability to find cutting-edge civilian technologies available in Japan that can be applied to military use. Based on this, the Japanese and European authorities could get a better sense of what is available and what can be done together. For the moment, at least, Japan needs to focus on parts/components rather than trying to pursue large-scale projects. The kinds of technologies that Japanese companies are good at include electronic and radar as well as emerging areas such as neuroscience, brain science and artificial intelligence (AI). Tokyo (through the Mission of Japan to the EU in Brussels) needs to establish regular contact with the new DG on defence industry and space (DG DEFIS) at the European Commission, including the latter’s new European Defence Fund.

The Union needs to give a better account of what type of defence player it actually is and wants to become given the rapidly evolving and deteriorating geopolitical dynamics. This discussion will have a great bearing on the military capabilities the Union develops and it will set the parameters of any international cooperation the Union may have with partners such as Japan. In particular, greater attention in EU defence planning could be given to geographical and thematic issues that are of mutual interest to the Union and partners such as Japan (what Union capabilities are required for maritime security?). Although the Union is still at an early stage of thinking about new technology areas such as AI and how they apply to defence, there is scope for more international discussion about how emerging technologies can be managed in the defence sector by actors such as the EU and Japan. Such discussions should not simply be limited to ethical and international regulatory measures, but how liberally-minded actors perceive and apply emerging technologies to their defence and to common global challenges.

The major vehicle through which to enhance EU-Japan relations in the area of defence capabilities is the EU-Japan Strategic Partnership Agreement (SPA). The SPA specifically calls for strategic and sectoral cooperation between the partners. An obvious place to start would be Article 4 on crisis management and the specific reference to cooperation ‘on crisis management operations and other relevant programmes and projects’. Article 4.4 refers to the need to maintain and enhance dialogue, and steps to enhance official dialogues between EU institutions (EDA, EEAS, EUMS, EUMC and DG DEFIS) should be encouraged with Japanese partners.

Another avenue for enhanced dialogue on defence capabilities is Article 9 of the SPA, which refers to cooperation on CBRN threats –particularly salient in light of COVID-19–. The EU and Japan can exchange lessons learnt on capability development in this area, especially given the prominence of CBRN as part of the PESCO projects. Another potential pathway for an initial dialogue on defence capabilities is through the issue of outer space, because both actors share a stake in the increasing militarisation of space and developing science and technology for space.

The EU and Japan need to find a suitable avenue to discuss the threats posed by emerging technologies and defence. The SPA calls for cooperation on Science, Technology and Innovation and it refers to the risks of proliferation too. As part of the regular EU-Japan Summits, leaders could support a joint EU-Japan expert group to discuss threat perceptions on technologies, as they pertain to defence and security matters. In particular, the EEAS’ ‘Global Tech Panel’ could be broadened to include dialogue with close partners like Japan. Although the Panel is currently piloting projects in North Africa and does not have a specific remit for defence-related matters, issues such as proliferation and international regulation of new technologies such as AI could be a sound basis to expand EU-Japanese dialogue on defence capabilities. On AI, Japanese representatives could be invited to dialogue with the Commission’s ‘High-Level Expert Group on Artificial Intelligence’.

Finally, given Japan’s low-level of industrial defence penetration in Europe and the importance of dual-use and civilian technologies to both markets, there is scope to enhance industrial dialogue between Japan and the EU (see Article 17 of the SPA too). Starting at a very basic level, Japanese representatives could be invited as observers to defence industry meeting days held in Europe –since such information and exchange meetings are held on a regular basis–. These concrete examples of cooperation are unlikely to fundamentally alter EU-Japan cooperation on defence capabilities without overarching political leadership from both sides.

Conclusions

As a matter of urgency, opportunities at EU-Japan summits to organise strategic discussions on defence and capabilities should be seized, and one way to stimulate this debate is by focusing on the threats and opportunities posed by new technologies such as AI and quantum computing –both will lay the basis for future technological supremacy and the EU and Japan stand a chance of leap-frogging in these areas–. Mastery of these technology areas and improving their respective strategic autonomy is good for their economies and defence. They are also a good basis from which the EU and Japan can leverage their interests in the relationship with Washington and stave off the threat of being left behind in defence technology terms by China.

Michito Tsuruoka
Keio University | @MichitoTsuruoka

Daniel Fiott
European Union Institute for Security Studies | @DanielFiott


1 The views expressed in this policy brief are the authors’ own and do not reflect the position of the EU or of the EU Institute for Security Studies. The authors would like to thank the European External Action Service and Japan’s Ministry of Foreign Affairs for their support of this project. Previous versions of this paper were presented at two expert workshops held at the EU delegation in Tokyo on 14 January 2020 and at the Institute for European Studies of the Vrije Universiteit Brussel on 9 March 2020. The authors are grateful to all the participants in those two workshops for their comments on a previous version of this paper, with special thanks to Alejandro Cainzos, Patricia Flor, Thomas Gnocchi, Hajime Hayashi, Kazuo Kodama, Hideshi Tokuchi, Shogo Yoshitake, Marianne Peron-Doise, Tomonori Yoshizaki, Maaike Verbruggen, Jun Nagashima, Céline Pajon, Alessio Patalano, Luis Simón, Tomohiko Satake and Zoe Stanley-Lockman.

2 M. Tsuruoka (2018), ‘The Donald J. Trump Administration as seen from Tokyo: will the US-Japan alliance remain unique?’, IAI Papers, nr 18/02, Istituto Affari Internazionali, January.

3 M. Tsuruoka (2016), ‘Tokyo wants a stronger European foreign policy’, The International Spectator, vol. 51, nr 3; and C. Pajon (2018), ‘A new Japan-France strategic partnership: a view from Paris’, Lettre du Centre Asie, nr 74, 16/XI/2018.

5 D. Fiott (2019), ‘What does it mean to be a European defence company today?’, Editoriaux de l’Ifri, Institut français des relations internationals, Paris.

6 D. Fiott (2019), ‘Strategic investment: making geopolitical sense of the EU’s defence industrial policy’, Chaillot Paper, nr 156, EU Institute for Security Studies.

7 D. Fiott (2019), Defence Industrial Cooperation in the EU: the State, the Firm and Europe, Routledge, Oxford/New York.

8 T. Taylor (2015), ‘The prospects for Japan-UK collaboration in defence equipment’, in J. Eyal, M. Tsuruoka & E. Schwarck (Eds.), Partners for Global Security: New Directions for the UK-Japan Defence and Security Relationships, RUSI Whitehall Papers, 11/VIII/2015.

9 D. Fiott (2019), ‘Defence industry, industrial cooperation and military mobility’, in G. Lindstrom & T. Tardy (Eds.), The EU and NATO: The Essential Partners, EU Institute for Security Studies, Paris, p. 44-51.

10 Daniel Fiott writes in a personal capacity and the views in this piece do not necessarily reflect those of the EU Institute for Security Studies or the EU.

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<![CDATA[ Life beyond multilateralism? COVID-19, European strategic autonomy and Spanish foreign policy ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari74-2020-arteaga-simon-life-beyond-multilateralism-covid-19-european-strategic-autonomy-and-spanish-foreign-policy 2020-05-20T10:30:28Z

EU and Spanish foreign policy were undergoing a transition from multilateralism to strategic autonomy to adapt to an increasingly competitive geopolitical environment. However, COVID-19 raises questions about whether international politics will be characterised by a renewal of multilateralism or an aggravation of great power competition.

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Original version in Spanish: ¿Más allá del multilateralismo? COVID-19, autonomía estratégica europea y política exterior española.

Theme

EU and Spanish foreign policy were undergoing a transition from multilateralism to strategic autonomy to adapt to an increasingly competitive geopolitical environment. However, COVID-19 raises questions about whether international politics will be characterised by a renewal of multilateralism or an aggravation of great power competition.

Summary

This paper discusses the potential impact of COVID-19 on EU foreign policy, and does so from a Spanish perspective. Specifically, it unpacks two flagship concepts in EU and Spanish foreign policy –multilateralism and strategic autonomy– and critically assesses their utility in a post-COVID-19 context.

Analysis

The geopolitical context before COVID-19

The impact of the COVID-19 pandemic on EU and Spanish foreign policy cannot be viewed in isolation from geostrategic dynamics that were already in train before the crisis. In recent years we have witnessed a confrontational turn in international politics, best illustrated by the intensifying great-power competition between the US and China and the mounting difficulties faced by the multilateral systems in responding to the challenges of globalisation.1 Critically, the US and China have extended their competition to the multilateral domain and tried to leverage different organisations and norms accordingly. Today, the effects of Sino-US competition span most policy areas (eg, trade, military, technology, diplomacy, information) and geographical regions –even though East Asia remains the epicentre, Sino-US competition is also permeating many other regions, including Europe, the Middle East, Latin America and the rest of Asia)–.

Partly in response to these broader geopolitical transformations, EU foreign policy has taken a ‘realist’ turn in recent years. Thus, the 2016 European Global Strategy affirmed the need for more pragmatism in the EU’s external action, and set out an approach based on ‘principled pragmatism’ and ‘European strategic autonomy’ to promote action in partnership with others when possible and otherwise alone.2 In a similar vein, Commission President Ursula von der Leyen has called for a ‘geopolitical approach’ to ensure greater coherence between the EU’s internal and external policies.3 More recently, the European Commission has used the term ‘technological sovereignty’ to address the issue of European strategic autonomy in technology, industry, digitalisation, data and artificial intelligence in the face of growing global competition in those domains.4 Finally, Josep Borrell, the High Representative of the Union for Foreign Affairs and Security Policy, has repeatedly alluded to the EU’s need to adapt to an increasingly competitive international environment by ‘rediscovering the language and logic of power’.5

Admittedly, the concept of ‘European strategic autonomy’ was introduced by the Global Strategy to respond to the EU’s need to play a growing role in the areas of security and defence. Yet, such a concept appears to have taken on a new dimension in the face of mounting Sino-US competition, having become associated with the crafting of an alternative space in international politics –potentially led by the EU itself–. To be sure, the very concept of European strategic autonomy need not imply geopolitical equidistance between the US and China, which would prove extremely challenging anyway given the depth of the shared interests and values that bring Europeans and Americans together. Simply put, European strategic autonomy means that EU policies towards the US and China cannot be reduced to some expectation to ‘take sides’ but must instead be based on European interests in relation to each of the parties. More broadly, as the US and China offer a grammar of great power competition and rivalry, the EU would aspire to recover the predictability that multilateral norms and institutions bring to international politics. In doing so, it aims to reconcile European strategic autonomy with the renewal of multilateralism, all the while explicitly rejecting the frame offered by ‘Sino-US competition’.

For its part, Spain also acknowledges the need for a “strategic adaptation to a more geopolitical world”, even though it prefers to speak of a “nodal approach” to foreign policy. The term “nodal” – coined by the Obama administration and used by former Secretary of State Hillary Clinton and in the National Military Strategy of 2011- seeks to capture the difficulties faced by international organisations to adapt to an increasingly competitive international context, and entails the formulation of policy responses based on ad hoc coalitions of interest, which may vary in function of a dynamic context.6 Thus, nodality implies flexibility, and has the advantage of allowing foreign policy to overcome the paralysis of any given node or institution by shifting attention to more receptive nodes. Yet, it entails risks for multilateral institutions, which may become increasingly marginalised to the detriment of flexibility. Against this backdrop, Spain’s approach is to continue to bet on the EU’s constitution as a go-to node in a renewed multilateral network.7

Enter COVID-19

The pandemic has challenged our understanding of concepts like strategic autonomy and multilateralism, which are now being repeatedly applied by both Spain and the EU as part of the response to the global health challenge. Both Spanish Foreign Minister Arancha González Laya and EU High Representative/Vice President Josep Borrell have repeatedly alluded to the “global and transnational nature of the crisis”, the need to pursue “global and multilateral solutions” and “avoid quarrels and blame games”. In their view, the pandemic underscores the fact that “we are all in the same boat”, and the importance of rowing together by strengthening international cooperation and betting on multilateral solutions.8 Relatedly, the pandemic has spurred calls for a greater EU effort in responding to its economic ripple effects. Critically, given that the EU had not yet completed its transition towards a more ‘geopolitical’ and interest-based approach to foreign policy, an important question comes up: is the EU pivoting back towards a more multilateral and normative approach to international politics or is its renewed emphasis on multilateralism restricted to health policy?

Against this backdrop we set out to critically probe the strategic value of two flagship concepts in EU and Spanish foreign policy –multilateralism and strategic autonomy– and evaluate their strengths and weaknesses in light of a dynamic geopolitical context.

Autonomy is a prerequisite for external action: without it, we depend on others. Multilateralism is often the refuge of the weak –yet, autonomous actors can make multilateralism more affective, and allow it to operate in line with their strategic interests–. In other words, the exercise of autonomy focuses on one’s own interests; it requires flexibility and ‘nodal’ policies, and even bypasses multilateralism whenever it proves ineffective. It is precisely their strategic autonomy that allows the US and China to exert influence in multilateral forums in pursuit of their national interests.

The COVID-19 crisis has shown that, without autonomy in health policy, neither the EU nor Spain are able to contribute to the multilateral response they are now promoting. Similarly, the multilateral response to the crisis will not improve unless the EU and Spain can become more autonomous in the provision of assistance. Autonomy is thus a fundamental objective of external action, both for cooperating with others as part of multilateral frameworks and for acting individually, as set out in the European Global Strategy.

Viewing autonomy as an end (as opposed to a means) will allow the EU and Spain to leverage their external action through multilateral venues when necessary (multilateralism as a means). To be sure, the EU has, as a normative power, benefitted from the support of multilateral organisations and frameworks in advancing its interests and vision of global governance. However, mounting geopolitical and great power competition has weakened the multilateral system, and left the EU lamenting its lack of autonomy in areas where it can no longer count on multilateral support. As such, it is natural for the EU and Spain to aspire to a renewal of multilateralism in challenging situations like the COVID-19 pandemic. Yet there are doubts as to whether the interest in multilateralism extends beyond its instrumental use in tackling the pandemic or whether this will provide the vital spark to correct the drift of multilateralism, allowing it to be reasserted as the framework of reference for EU and Spanish foreign policy.

At present, calls to ‘renew multilateralism’ appear to have dominated the EU’s response to the COVID-19 crisis, even displacing Borrell’s previous references to ‘rediscovering the language of power’ or Von der Leyen’s ‘geopolitical approach’. Thus, the pursuit of multilateralism seems to have reclaimed its status atop the EU’s strategic priorities. In such a scenario, strategic autonomy would become a means to the end of renewing multilateralism, thus inverting the ‘natural’ order between autonomy (end) and multilateralism (means). But this proposition is inherently problematic. After all, multilateralism requires the power (and autonomy) of actors to be able to respond to collective challenges. As such, European and Spanish autonomy should be the number one priority of external action, especially in a geopolitical context such as that prior to COVID-19.

Any attempt by the EU to bet on the resetting of multilateralism assumes that the pandemic –thanks to its global and transnational nature– can usher in a period of renewed optimism towards multilateral governance, and that a more ‘geopolitical approach’ based on ‘the language and logic of power’ can be put on ice. But this is a risky proposition, especially when the two most important global powers are locked in a multidimensional geopolitical competition driven by zero-sum dynamics. Going forward, the EU faces an important dilemma: can it leverage COVID-19 to swing back to yesterday’s ‘multilateralism first’ approach or should it use it to accelerate its transition towards a new, power-centric paradigm in foreign policy?

To be sure, COVID-19 also poses an obstacle to the objective of European strategic autonomy, particularly in the areas of foreign policy, security and defence. Critically, public spending priorities are likely to shift towards budgetary lines aimed at reducing or mitigating the direct effects of the pandemic on public health, as well as its socio-economic ripple effects. Although pandemics know no borders and any response to them must draw on both internal and external policy instruments, priorities ought to be established. In that context, we should expect a shift of EU and Spanish political attention and economic resources to domestic matters rather than foreign policy. Nor should we rule out cuts or delays in defence programmes and budgets, which are at the heart of European strategic autonomy –or, at the very least, a slowdown in the rise in defence spending experienced in recent years, both in Spain and EU-wide–.

Some may argue that the less resources available for defence, the more incentives and opportunities for spending and developing capabilities collectively, ie, within the EU framework. However, following the 2008 financial crisis and subsequent defence budgetary crisis, member states behaved in exactly the opposite way: each country cut unilaterally in line with its priorities, without taking into account the combined impact on European strategic autonomy. Furthermore, it is unlikely that those great powers currently immersed in a process of geostrategic competition (ie, the US, China and Russia) will engage in significant defence cuts in the coming years, let alone in the same way as Europeans. Indeed, crossed accusations, disinformation campaigns and efforts to monopolise research and medical aid outside multilateral organisations show how COVID-19 is being instrumentalised as yet another dimension of this rivalry. This raises questions about the future of European strategic autonomy, which could become further endangered if the pandemic leads to an erosion of intra-European political trust and cohesion.

Implications for Spain

Spain clearly benefits from multilateral cooperation, both at the European and global levels. However, the question arises as to whether the country should delegate its strategic thinking and autonomy to the EU or rather seek to increase its own national strategic autonomy by leveraging different multilateral and bilateral channels in a diversified manner. In this regard, it is important to bear in mind that EU member states continue to have significant differences about the development and direction of EU foreign policy, as well as the absence of a realistic roadmap for a genuine political union within the EU framework (a prerequisite for strategic autonomy). Given these circumstances, it would seem prudent for Spain to avoid putting all its eggs in the European strategic autonomy basket and instead look at the EU as a tool –perhaps even a central one– in pursuit of its own strategic interests.

From a Spanish perspective, then, it becomes critical to identify the contours of national and European strategic autonomy. For example, faced with the possibility of defence budget cuts, which capabilities should be prioritised at the national level and which at the European level? Likewise, Spain should ensure that any initiatives or capabilities aimed at furthering ‘European strategic autonomy’ should not result in the strengthening of the autonomy of some member states at the expense of others. Thus, for instance, Spain can leverage its relationships with key allies like the US to strengthen its negotiating position within EU foreign and defence policy –this seems to be the approach followed by countries like Italy, Poland, the Netherlands and Sweden, all of which tend to resort to the US or the UK to push back against the spectre of a Franco-German dominated European defence industrial base–. Indeed, Spain should identify a number of relevant nodes or partners both within and without the EU so as to be able to leap from one node to another as its own interests and national autonomy require.

Conclusions

Between multilateralism and strategic autonomy

To what extent has multilateralism become an end in itself in the context of Spanish and EU foreign policy? Should Spain and the EU continue to bet the house on multilateralism no matter what? Should efforts to reset multilateralism take priority over all other European and Spanish interests and values, such as the pursuit of strategic autonomy?

To be sure, multilateralism can be strategically attractive for those actors who lack the resources or power to defend their interests autonomously. This may well explain why Spain and many other EU member states reflect a multilateral reflex of sorts. Moreover, and in light of an increasingly competitive and uncertain international environment, the promise of multilateralism offers small and medium powers a reliable and commonly accepted framework, ie, one that provides opportunities for them to participate in the design of shared rules, norms and institutions. Yet, if great power competition leads to the paralysis of multilateral venues, small and medium states can get caught between their lack of autonomy and a dysfunctional multilateralism.

As we glimpse into the post COVID-19 world, there seem to be few signs that suggest a de-escalation of great power competition, with the possible and partial exception of the health sector. Nor is there any reason why a resetting of multilateralism post-COVID-19 should resemble the sort of multilateral framework that took root in a context defined by US and Western power. And there is a big difference between a multilateral framework dominated by liberal Western powers who share Spanish and EU interests and values –as was the case in the 1990s and even at the start of the 2000s– and one characterised by the growing influence and values of non-democratic and autocratic powers. Spain and the EU should therefore critically re-assess the strategic value of multilateralism –especially the notion of multilateralism as an end– not least given China’s systematic (rhetorical?) bet on multilateralism or, for that matter, the US’s own scepticism vis-à-vis that very concept. Neither China nor Russia will abandon multilateral forums or their rhetorical commitment to multilateralism because they practice –and always have done– a selective and nodal approach that seeks to leverage different forums and norms as instruments in pursuit of their own interests while rejecting or ignoring them when they stand in their way.

In the end, we must ask to what extent the multilateral reflex that continues to dominate European and Spanish foreign policy thinking provides for a realistic and appropriate framework. The EU and Spain run the risk of misreading the geopolitical implications of COVID-19 that, rather than offer a window of opportunity for a resetting of multilateralism, might aggravate existing dynamics of great power competition and global economic decoupling. Against that backdrop, and notwithstanding the potential that multilateral forums and institutions continue to offer to advance Spanish and European interests on many fronts, it appears unwise for the EU and Spain to embrace multilateralism as the ordering principle of their foreign policies.

Félix Arteaga
Senior Analyst, Elcano Royal Institute

Luis Simón
Senior Analyst and Director of the Elcano Royal Institute’s Brussels Office | @LuisSimn


1 See, for example, Graham Allison (2018), Destined for War: Can America and China Escape Thucydides’s Trap?, Mariner Books, Boston and New York.

3 Ursula von der Leyen (2019), ‘Speech in the European Parliament Plenary Session’, Strasbourg, 27/XI/2019.

4 See, for example, ‘Shaping Europe’s digital future’, 19/II/2020.

5 See, for example, Josep Borrell (2020), ‘Embracing Europe’s power’, Project Syndicate, 8/II/2020.

6 Felix Arteaga (2012), ‘From multipolarity to multinodality in international security’, Expert Comment, nr 19/2012, Elcano Royal Institute.

7Comparecencia de la ministra González Laya, ante la Comisión de Asuntos Exteriores’, 20/II/2020.

8 See, for example, ‘Coronavirus: Statement by the High Representative/Vice-President Josep Borrell following the EU leaders’ video conference’, Brussels, 27/III/2020; Arancha González Laya (2020), ‘As we fight the pandemic, it’s clear the world wasn’t ready. Here’s how to fix that’, The Washington Post, 25/III/2020.

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<![CDATA[ Rules-based connectivity, maritime security and EU-Japan cooperation in the Indian Ocean ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari70-2020-simon-satake-rules-based-connectivity-maritime-security-eu-japan-cooperation-indian-ocean 2020-05-14T03:23:02Z

This paper puts forward a number of specific proposals to further EU-Japan maritime security cooperation in the Indian Ocean region.

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Theme1

This paper puts forward a number of specific proposals to further EU-Japan maritime security cooperation in the Indian Ocean region.

Summary

Taking the 2019 EU-Japan Strategic Partnership Agreement (SPA) as its point of departure, this paper puts forward a number of specific proposals to further EU-Japan maritime security cooperation in the Indian Ocean region. It begins by discussing recent developments in EU and Japanese security policy, and briefly outlines the political and geo-strategic drivers of EU-Japan security cooperation, as well as its limitations. Next, it identifies maritime security and the Indian Ocean region as two areas that have a great potential for greater EU-Japan security cooperation. It then discusses a specific proposal to further EU-Japan security cooperation: the setting up of an Indian Ocean Maritime Capacity Building Initiative.

Analysis

Introduction

Why maritime security in the Indian Ocean? The maritime domain is the artery of global trade, the glue that holds together the rules-based international economic and political order. Its security is therefore of the utmost importance to Japan and the EU, whose economies are highly dependent on external trade and whose politics are deeply invested in the preservation of a rules-based international order. More specifically, the Indian Ocean region is where the EU’s ‘extended neighbourhood’ meets Japan’s concept of a Free and Open Indo-Pacific (FOIP).

Japan has the strategic mindset of a sea power. It is fully aware that the maritime domain is critical to its security and prosperity, and it has a characteristically global perspective of international politics. Moreover, the Indian Ocean is a key highway for Japanese trade, notably with Europe, but also East Africa and the Middle East. From a broader geostrategic perspective, the Indian Ocean region matters increasingly to Japan: it is becoming a central piece in China’s outreach and Belt and Road Initiative (BRI), and for many it has already become a sub-theatre of the broader Indo-Pacific maritime axis.2 This has been endorsed by Prime Minister Shinzo Abe’s FOIP vision, but also by the US decision to replace its Pacific Command with a new Indo-Pacific Command, and thus treat the Indo-Pacific as an integrated geostrategic space.

From a European security perspective, the maritime domain offers the best entry point to think beyond the immediate European neighbourhood (ie, North Africa and Eastern Europe). This becomes particularly relevant as we move towards a geopolitical paradigm that is increasingly defined by great power competition, whereby the centre of gravity of world politics is shifting towards the Indo-Pacific maritime axis. The result will be a shattering of a geostrategic mindset in which Europe is at the centre of world politics, and events in and around the European region very much shape what happens elsewhere. Today –and presumably even more so tomorrow– much of what happens in Europe and its neighbourhood is affected by geostrategic and geo-economic dynamics further afield, and more particularly on the Indo-Pacific maritime axis. From that viewpoint, the Indian Ocean is Europe’s highway into the 21st century. This is something that some European countries like France and the UK seem to well understand, and that the EU is becoming aware of.

The fact that the maritime domain and the Indian Ocean region constitute the ‘natural’ meeting place for EU-Japan cooperation is arguably upheld by Japan’s ongoing presence in Djibouti, its ongoing engagement with EUNAVFOR Atalanta and the decision to deploy a destroyer to the Arabian Sea, as also by the EU’s ongoing commitment to fight piracy off the coast of Somalia.

But what are Japan and the EU’s shared interests in the Indian Ocean? To the extent that it lies at the crossroads of China’s BRI, Japan’s FOIP, the EU’s connectivity vision, America’s Indo-Pacific and India’s ‘Look East’ policy, we see a number of visions –partly competing, partly complementary– about the world order that centre on the Indo-Pacific and meet in the Indian Ocean. In many ways, this is the one region where all important world powers meet more directly, and where the battle for the soul of the international system is being fought.3 From an EU and Japanese viewpoint it is therefore critical to ensure that the behaviour of Indian Ocean rimland states is bound by rules and openness, and not by spheres of influence or protectionism. And the best way to do that is to preserve a balance of power in the Indian Ocean region, to ensure that no single power is able to change the status-quo coercively and impose its views on the region –and that rimland states operate according to widely shared rules and not to the designs of any given individual power–. To do that, the EU and Japan ought to make sure that India Ocean rimland states are capable of standing on their own feet. That may sound like a rather tall order for the EU and Japan, given the many constraints and caveats that surround their security policies. So the question is: how can the EU and Japan help advance such geostrategic aims in a way that is politically realistic?

We argue that the EU and Japan should focus on initiatives that do not entail the direct, kinetic use of military force; that de-emphasise military-only solutions and further a more mixed ‘civ-mil-pol’ approach to security; that they use transnational threats (such as piracy, disaster relief, the fight against pandemics and environmental security at sea) as their entry point, as opposed to inter-state threats; and that they focus on empowering others through training, advising and capacity building. This is our framework of reference.

The strategic importance of the maritime domain and the Indian Ocean region for European security

In recent years the EU has sought to strengthen its role as a security provider. The development of European defence was a strategic priority for the High Representative for Foreign Affairs & Vice President (HRVP) Federica Mogherini, as well as for the Juncker Commission writ large. The 2016 European Global Strategy singled out the importance of security and defence, and proclaimed that ‘Europeans must be able to protect Europe, respond to external crises, and assist in developing our partners’ security and defence capacities’.4 Building on the ambition set out in the 2016 European Global Strategy, the EU has since launched a number of initiatives aimed at consolidating its role in security and defence.5

If anything, the new EU leadership is set to increase its efforts to consolidate the Union’s role in security and defence. In his confirmation hearing, HRVP Josep Borrell alluded to the existence of an increasingly competitive world and argued that the EU should learn to ‘use the language of power’.6 In the same vein, the Commission’s President, Ursula von der Leyen, identified the creation of a ‘stronger Europe in the world’ as one of its key priorities, and thus referred to the Commission as a ‘geopolitical’ one.7

Admittedly, when it comes to its security and defence policies, the EU identifies its immediate geographical neighbourhood as the main area of strategic priority.8 However, the 2016 report on the implementation of the EU Global Strategy in security and defence outlines a revised set of military tasks for which there is no geographical delimitation. Notably, the report calls for the EU to be able to undertake military tasks such as close air support and maritime security (including on the high seas).9

The EU’s emphasis on maritime security (including on the high seas) stems from the importance of the maritime domain to Europe’s prosperity. Over 90% of the trade between Europe and East Asia is sea-borne and it is largely conducted through the Indian Ocean.10 Indeed, from a European and EU perspective, the Indian Ocean constitutes the main entry point into Asia and the Pacific, which are rapidly consolidating as the world’s centre of economic and geostrategic gravity.11 Thus, the EU’s interest in maritime security also stems from a broader recognition that global geopolitical and security dynamics (including developments in the Indo-Pacific space) impinge upon the security of Europe’s immediate neighbourhood, and upon that of the European continent itself.

It should therefore come as no surprise that the EU has engaged in a number of maritime security operations beyond its immediate neighbourhood in recent years, paying particular attention to the Indian Ocean region. These include, notably, EUNAVFOR Atalanta (a naval mission aimed at fighting piracy off the coast of Somalia) and EUCAP Somalia12 (a mission aimed at building the maritime capacity of Somalia). In the same vein, the EU floated in 2019 the concept of a Coordinated Maritime Presence, ie, a mechanism that would allow member states to coordinate their maritime deployments in certain key areas. To instil greater coherence to these and other initiatives, the 2018 Revised EU Maritime Security Strategy Action Plan features, for the first time, a section devoted to regions and sea basins, including the Horn of Africa-Red Sea, which is a major choke point of international trade and the crossroads between the Mediterranean basin and the Wider Indian Ocean region.13

Operational and geographical limitations

To be sure, the EU is still significantly constrained in its security and defence policies. For one thing, security and defence are intergovernmental areas, and the existence of divergent views and interests amongst the EU’s key member states mean the parameters for the EU’s development as a security actor are rather tight. Moreover, most EU member states are also NATO members, and recognise the latter as the main point of reference when it comes to the core areas of deterrence and defence, but also an important one in the conduct of expeditionary military operations due to its possession of an advanced military command and control infrastructure, which the EU lacks. For these and other reasons, the EU’s role in security and defence has been primarily confined to ‘low-end’ external crisis management operations. In particular, the EU has identified the challenges that straddle the civilian and military divide as its main competitive advantage (vis-à-vis NATO as well as its member states). More recently, the backlash against out-of-area interventions has led the EU’s Common Security and Defence Policy to pivot away from so-called executive missions (in which the EU plays a direct, kinetic role) and towards capacity building, training and advisory missions.

The EU’s limitations in engaging in maritime security in the Indian Ocean are also of a geographical or geopolitical nature. In principle, the EU’s commitment to maritime security is global in scope, and knows no boundaries. However, resource scarcity means that the EU’s strategic bandwidth to engage beyond its geographical neighbourhood remains rather limited. Indeed, as already argued, discussions on EU security policy often revolve around the so-called eastern and southern neighbourhoods, which include, respectively, Eastern Europe and the Caucasus and the Levant and North Africa. In this regard, the need to deal with the socio-economic effects of the COVID19 crisis may also limit the EU’s foreign and security policy bandwidth overall.14

Admittedly, there has been a debate in EU circles about the need to engage in the ‘extended neighbourhood’ or with ‘the neighbours of the neighbours’, ie, in areas such as the Sahel, Gulf of Guinea, Central Asia or the Red Sea and Persian Gulf. It is perhaps in this context that we must understand the EU’s security engagement in the Indian Ocean region, which is arguably not anchored in an EU strategic vision of the Indian Ocean region as a whole –let alone the broader Indo-Pacific– but is rather confined to the north-western Indian Ocean and seen through an ‘extended neighbourhood’ prism. This would explain why the EU’s security initiatives in the Indian Ocean are primarily confined to that ocean’s north-western part, namely the stretch of water running from the Red Sea and Bal el Mandeb to the Persian Gulf. In particular, Somalia has become a referent for EU security initiatives in the area, most notably through EUNAVFOR Atalanta (designed to fight piracy off the coast of Somalia) and EUCAP Somalia (a mission aimed at building the maritime capacities of that country).

Arguably, a number of issues prevent the EU from developing a more holistic and strategic approach to maritime security in the Indian Ocean. One relates to resource and attention scarcity, and the fact that the EU’s resources are concentrated in its immediate vicinity, with much fewer to spare for the extended vicinity (which would include the north-western Indian Ocean), let alone beyond that. Another limitation is political, and relates to the fact that some EU member states and constituents are wary of anything that smacks of an EU security engagement further east –or even embracing the Indo-Pacific concept– for that might lead to tension with China. In other words, the north-western Indian Ocean is better from an EU viewpoint because: (a) it is part of the EU’s extended neighbourhood; ad (b) it emphasises the transnational dimension of security, rather than the inter-state one.

Japan’s initiative for a Free and Open Indo-Pacific

Japan has also undergone a period of change and greater outreach in terms of its security policies. In August 2016 Japan’s Prime Minister Shinzo Abe announced Japan’s vision for a ‘Free and Open Pacific’ (FOIP).15 While FOIP comprehensively covers security, economic and diplomatic activities, maritime security is at its core. In particular, protecting and maintaining freedom of navigation and the rule of law at sea is one of the underlying priorities of FOIP. As a country surrounded by the sea, and hugely dependent on sea-borne trade, Japan realises that maintaining the rule of law at sea is indispensable for securing its interests. Due to its lack of domestic production of natural resources, Japan is particularly dependent on maritime resources and trade.

In recent years, Japan has strengthened its strategic partnerships with other like-minded maritime democracies, such as India and Australia, and has also broadened the geographical scope of the US-Japan alliance to the broader Indo-Pacific. Japan’s strategic outreach to both Australia and India has now developed up to the level of what some describe as ‘quasi-alliances’. Japan has also reinvigorated ‘minilateral’ groupings to support the rules-based order, such as the Trilateral Strategic Dialogue (TSD) and the Quadrilateral Security Dialogue (QSD) with these countries. Meanwhile, the Maritime, Air and Ground SDF has frequently visited South-East Asian (and Indian Ocean) countries to conduct port calls, joint military training and capacity-building assistance. The number of joint bilateral or minilateral training/exercises with navies of European countries like the UK or France has also increased over the past few years.

Japan’s capacity-building assistance to Indo-Pacific countries has had a strong maritime security component. Since 2013 Japan’s Ministry of Defence (MOD) has conducted a number of seminars and training for such areas as oceanography, search and rescue, vessel maintenance and underwater medicine in Indonesia, Sri Lanka, the Philippines, Vietnam and Myanmar. For its part, Japan’s Ministry of Foreign Affairs (MOFA) has provided Japanese coast-guard vessels to countries like Indonesia, Malaysia, the Philippines and Sri Lanka mainly through the Official Development Assistance (ODA) scheme. Additionally, the Japan Coast Guard (JCG) has conducted joint training, human-resource exchanges and technical support to South-East and South Asian countries with a view to improving their maritime security capabilities.16

While these activities are important elements to realize the FOIP, they have also some limitations. Simply put, Japan needs more money and manpower to maintain an effective and sustainable maritime engagement in the Indo-Pacific. Although the Japanese government has increased its defence budget for eight years running, the pace of such an increase is far slower than that of other major regional countries such as China, South Korea, India and Australia. Indeed, the greatest share of the defence budget increase has been consumed by growing labour costs, with aging and the purchase of new equipment for homeland defence, while maintenance, logistics and training costs for SDF equipment and personnel are not sufficiently funded. Japan’s response to the COVID-19 crisis, including its emergency financial package worth over ¥117 trillion (approximately US$1.08 trillion), may worsen this already severe budgetary situation, although its impact remains unclear.17

Likewise, the Japanese government has recently boosted its budget for the JCG to strengthen its maritime patrolling capabilities.18 Nevertheless, the number of Chinese Coast Guard vessels has already surpassed that of the JCG, and the capability gap will continue to expand in the foreseeable future. Both the SDF and JCG have also suffered from a shortage of manpower due to Japan’s ageing society, while their missions continue to increase in both the Indo-Pacific and in the areas surrounding Japan.

The SDF’s overseas missions are also still heavily constrained by legal restrictions. Even after the introduction of a new security legislation issued in September 2015, the SDF cannot be directly involved in conflicts in the South China Sea or Indian Ocean unless there is a recognition of ‘survival-threatening situations’ that directly impinge on Japanese security. While the Japanese people have become more receptive to the SDF’s overseas activities, it is not clear how they would react to its involvement in a conflict in a region far from Japanese territory. These legal and normative impediments could become an obstacle for Japan to further deepen its existing strategic partnerships with like-minded allies.

Notwithstanding these difficulties, it is clear that Japan’s security and prosperity increasingly relies upon maritime security in the Indo-Pacific, including the Indian Ocean itself. Although Japan’s primary strategic focus still rests on its homeland defence and North-East Asia, developments in the broader Indo-Pacific can indirectly or even directly affect its security and prosperity. This explains, for instance, why the Japanese government has recently decided to dispatch an MSDF ship to the Arabian Sea for information-gathering purposes. Notably, the SDF has also increased its defence engagement with some coastal countries in North-East Africa, with Kenya and Uganda standing out, and has expanded the function of its operational facility in Djibouti, which is currently used for anti-piracy missions in the sea off the coast of Somalia and the Gulf of Aden. These activities suggest the existence of important synergies between Japan and the EU’s missions in the Red Sea-Indian Ocean corridor, and offer significant opportunities for the SDF to cooperate with the EU and other countries in the Indian Ocean.

These activities are often recognised as measures to counter China’s growing power and influence through the BRI. However, Japan’s FOIP vision is broader than that. As already discussed, Japan’s security and prosperity are heavily dependent on a rules-based order and free trade. Without such an order, Tokyo’s regional and global influence will easily diminish as Japan has less power to change the status-quo by force than other great powers like the US and China. Japan’s pursuit of a FOIP does not simply come from its idealism, but from the necessity of maintaining a favourable international order in which the exercise of physical power is constrained or regulated through multilateral institutions, rules and norms. Cooperation with like-minded partners, such as the EU, is indispensable for Japan to realise such objectives.

Towards greater EU-Japan cooperation in the Indian Ocean

The EU-Japan SPA comes at critical time in world politics. The seeming rise of protectionism and inward-looking tendencies across the world compel Japan and the EU to step up their global role, and strengthen their economic and strategic ties. Europeans and Japanese are interested in a rules-based international order, one that revolves around existing liberal economic and political principles. As such, they share an interest in advancing multilateralism and strengthening collective action problem-solving in the fields of trade and economics, security and the environment. In this regard, the intensifying US-Chinese rivalry has also increased the need for cooperation between Japan and the EU, whose interests rely on an inclusive rather than an exclusive order divided between two different blocs.

Both the EU and Japan have a shared interest in preserving a rules-based order in the maritime domain, ie, a medium in which no country can exclusively dominate or regulate under its jurisdiction. Ninety per cent of world trade is sea-borne and the maritime domain provides transactional access for maritime security forces to undertake humanitarian missions during various contingencies on and off foreign shores.19 With an increasing global demand for food and energy, the development of maritime resources has rapidly grown. Preserving a rules-based order and freedom of navigation at sea as a ‘public good’ is therefore particularly important for the adequate functioning of the global security and economic system, in which both the EU and Japan have invested deeply.

The Indian Ocean connects Europe and East Asia to East Africa’s mineral riches and to the Indian sub-continent, an important source of cheap labour and manufactured products. Given demographic projections, East Africa and the Indian sub-continent offer considerable potential as investment and export markets in the medium and long term for both Europe and Japan. Critically, the Indian Ocean is also the gateway to the Persian Gulf, which is the main source of oil for Europe and Japan, as well as an important source of gas. This is why Japan and the EU agreed on the partnership for sustainable connectivity and quality infrastructure development in the broader Indo-Pacific area. So far, no initiative on EU-Japanese security cooperation in the Indo-Pacific has been made. And yet the vision of fostering greater economic and social connectivity within the Indo-Pacific space will only be sustainable if security is part of the equation.

It is important to be realistic about the political and geo-strategic parameters of EU-Japanese security cooperation, both in general and in the Indo-Pacific more specifically. For one thing, dealing with their respective regional threats is going to absorb most of the strategic resources and bandwidth of the EU and Japan for the foreseeable future, thus limiting their ability to engage with each other. For another, there are also obstacles of a political and cultural nature, which have to do with the reticence of the Japanese and Europeans to use military power for other than defence. In their security policies, both the EU and Japan have eschewed high-intensity expeditionary combat operations and shown a preference for low-end peacekeeping and even non-kinetic tasks such as training, advice and capacity building; they have preferred to focus their external intervention on transnational challenges (rather than inter-state conflicts) and followed a political-civilian-military approach to dealing with security challenges.

Both the EU and Japan are focused on the security of their immediate neighbourhoods, which means that the limitations on Japan’s direct contribution to European security or the EU’s contribution to security in North-East Asia are very real. However, both the EU and Japan acknowledge that security in their immediate vicinities is affected by dynamics further afield, especially in geopolitically adjacent regions. And the Indian Ocean is part of the extended neighbourhoods of both the EU and Japan, therefore representing both the meeting place and the natural basis for EU-Japan security cooperation. The EU and Japan share two fundamental geostrategic objectives: the security of the Indian Ocean Sea Lanes of Communication and the existence of a balance of power on the Indian Ocean ‘rimland’, particularly in the Persian Gulf area. In this regard, the fight against piracy in the Gulf of Aden is an important foundation on which to further EU-Japanese cooperation in an Indian Ocean context.

After having recognised ‘maritime security in the Indian Ocean’ as a promising area for EU-Japan cooperation, it is important to further unravel the concept. For one thing, the Indian Ocean is a geographical concept that is far from being integrated in security terms, let alone homogeneous. It comprises numerous sub-components or sub-regions, such as the Arabian Sea and Persian Gulf in the north-west, the Gulf of Aden and the Red Sea area further down, the Bay of Bengal in the north-east, and the Burma Sea and Malacca straight further east (bordering the South China Sea and the Pacific), the maritime approaches to Indonesia and the Australian continent in the south-east, and those to Madagascar and the southern part of East Africa in the south-east. These sub-regions are defined by different (mixes) of actors and challenges, and have little or no connection to each other.

There is no such thing as an Indian Ocean region in the sense of being a coherent strategic whole. Thus, it is important for the EU and Japan to identify the areas of the Indian Ocean in which their joint efforts should concentrate, at least to begin with, even as they remain committed to extending such cooperation to other areas of the Indian Ocean or the broader Indo-Pacific. In this regard, the area delimited by the Red Sea, the Gulf of Aden and Madagascar in the south appears to be a good candidate. It is an area where the EU’s security efforts in the Indian Ocean have concentrated (mainly around Somalia), has been identified as an area of interest by Japan (which is present in Djibouti and active in Kenya and Uganda) and has already seen joint EU-Japanese initiatives.

Maritime security must be delimited too. We are not talking about high-end warfare or deterrence in the context of inter-state competition, which may be significant in areas like the Persian Gulf, the Bay of Bengal or the Strait of Malacca. Such challenges constitute important barriers to entry for both the EU and Japan, given their capability and political limitations. This is not to say they are not important, nor that the EU and Japan should ignore them. But other actors and frameworks may be more suited for dealing with such contingencies –that is not where EU-Japan cooperation can add the most value–. Rather, the EU and Japan should focus on tackling transnational security challenges at sea, such as terrorism, piracy, the trafficking of narcotics, people and illicit goods, arms proliferation, illegal fishing, the fight against pandemics, environmental concerns, and maritime accidents and disasters.

In particular, some environmental problems in the maritime domain, such as the pollution of maritime environment, the rise of seawater temperature and the depletion of marine resources have already affected some countries’ security and international security in general. More particularly, the EU and Japan should focus on building up the capacities of IO states for such challenges. As advanced democracies, the EU and Japan can jointly cope with these maritime environmental issues and lead international initiatives by making the best use of their knowledge and expertise. Thus, our analysis suggests that transnational challenges and the non-kinetic realm in the Gulf of Aden area constitute the most promising areas to further EU-Japanese security cooperation in the Indian Ocean.

Conclusions

On the basis of such considerations we can put forward a concrete proposal to advance EU-Japanese cooperation in the maritime domain.

The Indian Ocean Maritime Capacity Building Initiative (IOMCBI) should focus on the Indian Ocean –an area that is geo-strategically relevant to both the EU and Japan– and help advance the geopolitical interests of both parties (ie, by empowering the Indian Ocean’s littoral states). It should also underscore their strengths (maritime frame, capacity building), whilst respecting their operational and political caveats (ie, be non-kinetic, straddling the civil-military divide). More broadly, it should help underpin the concept of rules-based connectivity.

Building on the example of EUCAP Somalia, the EU-Japanese IOMCBI would consist of:

  1. A common fund to support the training and educational activities of navies and coast guard around the Indian Ocean rim (open to contributions from other like-minded partners, such as India, Australia, the Republic of Korea, the US, Canada, Turkey and NATO). One possibility in this regard would be to use NATO’s Centre of Excellence on maritime interdiction (based in Cyprus) to train naval and coast guard officers from Indian Ocean countries and ASEAN partners. This would be in line with the recent push for greater EU-NATO and Japanese-NATO cooperation.
  2. An Indian Ocean patrol boat programme, co-funded by the EU and Japan (and open to relevant partners), which would help provide patrol boats to coastal countries in the Indian Ocean region.
  3. A centre of excellence on Maritime Domain Awareness focusing on the Indian Ocean based in Djibouti, led by the EU and Japan and open to relevant partners. It should focus on information sharing and the joint monitoring of choke points: Hormuz, Suez, Bab-el-Mandeb, Malacca, Lombok, Sunda, etc. This should link with existing initiatives, such as the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) and the Information Fusion Centre in Singapore, as well as the Fusion Centre in India. That way, it would build on existing initiatives and seek to connect them with a view to developing a networked architecture on maritime domain awareness aimed at supporting rules-based connectivity in the Indian Ocean.

One interesting possibility in this regard would be a joint Table Top Exercise (TTX) between defence authorities of the EU and Japan focused on the maritime domain and non-traditional security issues such as humanitarian assistance and disaster relief (HA/DR), counter-piracy, the fight against pandemics and environmental security in the maritime domain. While such an exercise could be initiated bilaterally and separately, the idea would be to progressively expand the number of participants, and thus integrate the TTX in the IOMCBI.

The IOMCB initiative would be open to all rimland states in the Indian Ocean region. However, with a view to ensuring its political and technical feasibility, the EU and Japan should first identify one or two ‘pilot countries’ to begin with. As already argued, given that the EU and Japan are both engaged (together and separately) in the Western Indian Ocean, that might be the best way to start, even if the ambition would be to progressively expand and move the initiative eastwards. In this regard, some possible candidate pilot countries could be Kenya and Somalia, which have been identified as priority countries by Japan and the EU respectively.

Luis Simón
Vrije Universiteit Brussel and Elcano Royal Institute | @LuisSimn

Tomohiko Satake
National Institute for Defence Studies (NIDS)


1 The authors would like to thank the European External Action Service and Japan’s Ministry of Foreign Affairs for their support of this project. Previous versions of this paper were presented at two expert workshops held at the EU delegation in Tokyo on 14 January 2020 and at the Institute for European Studies of the Vrije Universiteit Brussel on 9 March 2020. The authors are grateful to all the participants in those two workshops for their comments on a previous version of this paper, with special thanks to Daniel Fiott, Patricia Flor, Thomas Gnocchi, Hajime Hayashi, Kazuo Kodama, Hideshi Tokuchi, Shogo Yoshitake, Marianne Peron-Doise, Tomonori Yoshizaki, Maaike Verbruggen, Jun Nagashima, Céline Pajon, Alessio Patalano, Zoe Stanley-Lockman, Michito Tsuruoka and Oren Wolff.

2 See, eg, Kai He & Mingjiag Li (2020), ‘Understanding the dynamics of the Indo-Pacific: US-China strategic competition, regional actors and beyond’, International Affairs, nr 96, p. 1-7.

3 Robert D. Kaplan (2010), Monsoon: The Indian Ocean and the Future of American Power, Random House, New York.

4 EU Global Strategy, p. 19.

5 These include, notably, the Coordinated Annual Defence Review (CARD), which surveys existing defence capabilities and identifies opportunities for cooperation; Permanent Structured Cooperation (PESCO), which provides a framework to develop key capabilities collaboratively; and the European Defence Fund (EDF), a vehicle that aims to provide financial incentives for EU Member States for cooperative defence research as well as the joint development of European military capabilities up to the prototype phase. For a more detailed overview of these and other recent initiatives see Daniel Fiott (2018), ‘EU defence capability developments’, EU Institute for Security Studies, June.

6 ‘Green light to EU’s new Foreign Policy Chief’, Forbes, 9/X/2019.

7 ‘A Commission to stand up for Europe’s interests, Financial Times, 10/IX/2019.

8 EU Global Strategy, p. 23-25.

9 Council of the EU (2016), ‘Council conclusions on implementing the EU Global Strategy in the area of Security and Defence’, nr 14149/16, Brussels, 14/XI/2016.

James Rogers (2009), ‘From Suez to Shanghai: the European Union and Eurasian maritime security’, Occasional Paper, nr 77, EU Institute for Security Studies, Paris.

11 Luis Simón (2015), ‘Europe, the rise of Asia and the future of the transatlantic relationship’, International Affairs, vol. 91, nr 5, p. 269-289.

12 Formerly named EUCAP Nestor.

13 European External Action Service (2018), ‘Horn of Africa-Red Sea: revised EU Maritime Security Strategy Action Plan’, Regional and Global Maritime Affairs, Brussels, 26/VI/2018.

14 See, eg, Daniel Fiott (2020), ‘Will European defence survive coronavirus?’, Expert Comment, nr 11/2020, Elcano Royal Institute.

15 Ministry of Foreign Affairs of Japan (2019), ‘Towards a free and open Indo-Pacific’, January (last accessed 2/I/2020).

16 Japan Coast Guard (2018), Japan Coast Guard Annual Report 2018 (in Japanese), Nikkei Publishers, Tokyo, p. 151-154.

17Japan’s emergency stimulus reaches ¥117 trillion as virus crisis deepens’, The Japan Times, 20/IV/2020 (last accessed 22/IV/2020).

18 Robert D. Eldridge (2017), ‘Japan’s changing demographics and the impact on its military’, Education About ASIA, vol. 22, nr 3, Winter, p. 27-30.

19 Gurpreet S Khurana (2016), ‘Common public good at sea: evolving architecture in the Indo-Pacific region’, International Fleet Review Series, National Maritime Foundation, January.

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<![CDATA[ The influence –and weakness– of Spain’s European policy in the face of the pandemic: from a diagnostic to proposals and recommendations ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari68-2020-molina-steinberg-influence-and-weakness-spains-european-policy-in-pandemic-diagnostic-proposals-and-recommendations 2020-05-12T05:12:15Z

This paper analyses the position of Spain in the EU’s management of the present health and economic crisis.

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Original version in Spanish: Influencia (y debilidad) de la política europea de España en tiempos de pandemia: del diagnóstico a las propuestas

Theme1

This paper analyses the position of Spain in the EU’s management of the present health and economic crisis.

Summary

The coronavirus represents a major challenge for the EU and its Member States, with Spain among the countries that will be hardest hit. The crisis has struck when the country is extremely fragile but also at a time when it aspires to play a proactive and leading role in Brussels. This paper provides an initial diagnostic of the political and economic position of Spain in the context of developments in the EU in March and April 2020. It also sets out ideas to minimise the many risks on the horizon and take advantage of the opportunities also created by the situation. It aims to help identify the supranational response most closely aligned with Spain’s national interest, taking into account a number of issues: how to address the management of the disease and the re-establishment of mobility at the European level; the crucial economic decisions for financing reconstruction (the European Stability Mechanism, coronabonds, perpetual debt and the European budget) and the specific allocation of funds (digital agenda, decarbonisation, inclusion and unemployment); the institutional and national alliances and narratives to support the measures; and the best way to connect this complex negotiation to domestic politics, given Spain’s young and polarised parliament and the risk of weakening pro-European sentiment.

Analysis

The coronavirus presents an enormous challenge for the European integration process. While all Member States are severely affected in health and economic terms, in some countries, including Spain, the effects of the disease and the consequences of confinement on employment or the outlook for the recovery and the sustainability of public finances are particularly severe. In light of the many risks, it is crucial to develop a negotiating strategy that takes these dangers into account, identifies pragmatic objectives and lives up to expectations of a constructive relationship between Spain and the EU, both internally and at the European level.

A symmetric shock with asymmetric consequences

National health systems in almost all Member States, particularly in countries like Italy, Spain, France and the Benelux states, were unprepared for a pandemic of this scale. Hospitals have been placed under strain, there have been problems with medical supplies (largely outsourced to China), the lack of own technology has been thrown into sharp relief and we have seen instances where alert and crisis-management systems have failed. In these challenging circumstances, the EU’s role, which, in the area of health, is limited to providing support, has been marred by its slowness to react and lack of coordination, above all at the start of the crisis. Furthermore, the individual management of confinement or restrictions on mobility by Member States (applied by practically all countries) has affected the Schengen area, one of the most iconic aspects of European integration.

The economic challenge, this time an area in which the EU institutions have competence (the eurozone, the single market and the policy agenda until at least 2024), is equally daunting. In terms of Spain, while the country has shown some weakness in the area of health (due to the extremely high numbers of cases and deaths in both absolute and relative terms), its position is especially delicate as regards the impending recession. There are a number of reasons for this, including the role of tourism in the country’s economy, the high level of unemployment and lack of permanent jobs in the run-up to the crisis (which suggests a severe social impact), and the country’s high level of debt, which creates an obstacle to providing stimulus and makes European financial support vital.

The political consequences of this set of circumstances are also significant. The EU’s role in managing the health and economic dimensions of the crisis has been politicised in Spain, an aspect that is both positive, since it can be seen as a sign of maturity, and negative, since it shows the ever-fragile legitimacy of the integration process. The risk of reputational harm is a two-way street, threatening the image of the EU in certain countries (such as Italy and Spain) and these countries in the EU, should the idea that the pandemic has been particularly poorly managed or that the unsustainable fiscal policy in recent years has left countries limited room for manoeuvre take root. Yet the prevailing rhetoric is now more balanced than in 2010 and the reputations of countries such as the Netherlands, which runs the risk of being perceived as being recalcitrant in its response, is also now at stake. All this means that Spain is not on solid ground, given the distrust between creditor and debtor Member States. There is a further element of tension, since the crisis has a significant and direct impact on Italy, a founding State of the EU, its third-largest economy and whose public is wearying of the pro-EU consensus that has lasted since the 1990s.

Spanish interests in the area of health and mobility

As noted above, largely as a result of its powers, the EU has not played a significant role in the management of the pandemic itself. The Commission’s response was initially limited to pushing back against harmful national decisions to restrict exports of medical supplies between Member States, minimising the effect of restrictions of the free movement of people on the free movement of goods as much as possible and promoting research initiatives for a vaccine and cure for the disease. Nonetheless, the added value of a common response in terms of supplies (joint procurement of medical material in what is now a highly competitive market in which buyers’ economies of scale are important), the storage of stock and even production (facilitating standards to allow the repurposing of industrial production lines in Europe) has become clear.

Going forward, Spain must ensure the EU learns from this episode and is willing to apply the lessons in time for a second wave of COVID-19 in the autumn or to other pandemics in the future. This includes strengthening information systems and support for national health responses, building up strategic reserves of medical equipment, promoting the repatriation of some industries in this area on European soil and ensuring a more coherent reaction in the areas of security and the movement of people and goods. In the short term, however, it will be important to coordinate the exit strategies of the 27 Member States, even if this does not occur simultaneously. The existence of a European system of standardised certifications (immunity or, where applicable, a vaccine), which will make it possible to re-establish movement between countries for work or tourism, is essential to the Spanish model of production. The secure storage of sensitive data (for both the public and the authorities) and the associated requirement to develop EU digital apps and ‘clouds’ is another key aspect.

All these pan-European measures will have profound social and economic consequences for Spain in areas such as its national health system, science, innovation, industry and also the security system (eg, risks related to bioterrorism and critical infrastructure). The country must pay close attention to their design and remember that many EU decisions on industrial, scientific and technology policy in the wake of the crisis will have winners and losers (or, perhaps more accurately, some Member States will win more than others).

Spanish interests in the economic response

The economic policies adopted by the EU will be important when it comes to reducing the economic impact of the pandemic and taking advantage of the crisis as an opportunity to build a more integrated EU, with a more robust monetary union, which has always been among Spain’s key priorities. After some initial delay, the EU has managed to provide a reasonably satisfactory response in terms of monetary policy and has begun to outline its fiscal response.

The ECB has committed to the Pandemic Emergency Purchase Programme (PEPP), which will see it buy as much public and corporate debt as necessary on the secondary market to prevent the recession evolving into a financial and debt crisis in countries with weaker fiscal positions due to higher risk premiums. It has even lifted the limits on the percentages of debt of each country it can hold on its balance sheet and the types of collateral it accepts in its financial liquidity programmes. In facing this crisis, the fact that States explicitly have a lender of last resort and that it has taken just a week to decide on measures that took two years during the Euro crisis of 2010-12, is highly positive. Had this not been the case, it would have been necessary to reconsider the mandate of the ECB. Indeed, this may still be required if other countries embark on large-scale monetary financing (direct purchase of public debt by central banks on the primary or secondary markets) and the eurozone does not. There is also the risk that, if the situation persists, institutions such as Germany’s Federal Constitutional Court, will challenge the legality of the programme. Similarly, the key to the success of PEPP (and any subsequent extensions) lies in investor expectations as other measures in the fiscal area are approved (otherwise, risk premiums could rise).

In terms of fiscal policy, it is necessary to distinguish between an initial urgent package and the design of a more ambitious recovery plan, currently being drawn up by the Commission under the mandate of the European Council of 23 April. The urgent decisions adopted by the eurogroup on 9 April can be divided into three types of measures: (1) a new precautionary credit line for the ESM of €240 billion (up to 2% of the GDP of each country), which can be used to cover health costs derived from the pandemic, subject to limited conditionality that is still being negotiated; (2) a line of credit of €100 billion under the Support to mitigate Unemployment Risks in an Emergency (SURE) programme to finance part of the salaries of workers who must remain in confinement; and (3) guarantees and other financing from the European Investment Bank (EIB), with €200 billion for European companies. This strong provisional agreement provides a package of coordinated measures, available from 1 June and may be of considerable economic and political use. Its adoption was enough to change the tone of the public in Member States of the south, who began to see the EU more as part of the solution and not the problem. However, it is important to note that this support is in the form of loans (not joint spending) and the majority of the fiscal burden will remain with the individual countries, meaning it is not fully satisfactory to highly indebted states.

Since the start of March, Spain, France and Italy, alongside Belgium, Slovenia, Greece, Ireland, Luxembourg and Portugal, have been arguing for a response based on eurobonds, which would avoid increasing existing national debt and would not mean having to accept politically unacceptable conditionality (particularly relevant in the case of Italy). However, the idea of issuing shared sovereign debt, even as time-limited eurobonds or coronabonds, is equally unpalatable to Germany and the Netherlands, Madrid has been working hard to find common ground. On 19 April the Spanish government presented ‘Spain’s non-paper on a European recovery strategy’, outlining provisions to create a recovery fund of up to €1.5 trillion. The fund would not be financed by eurobonds but by perpetual debt issued by the Commission as part of a revised Multiannual Financial Framework (MFF) and the establishment of new European taxes. The money would be spent from 1 January 2021 onwards to address the economic impact of the coronavirus in each Member State. The idea has drawn praise from the international financial press and nobody denied its coherence in terms of clearly defining its objectives and how to achieve them. All in all, it was a good example of a proactive attitude, able to exert influence at the right moment in time.

Although the Spanish proposal was not endorsed at the European Council on 23 April, the Council tasked the Commission with drawing up a plan with a similar price tag in the first three weeks of May, which will include extremely long-term loans (a format more closely aligned with German interests than the zero-coupon perpetual bonds proposed by Spain) and increases to North-South transfers through the EU budgets. The decision has certain federalising potential, since funds from the plan will not be channelled through an intergovernmental organisation like the ESM but through the Commission itself, and the value of the MFF will increase from 1.2% of EU GDP to 2% (although not from direct contributions but from guarantees). The balance between transfers to the most-affected states and loans to the private sector, as well as the associated investment objectives and targets, have yet to be determined. There are also proposals for the fund to directly acquire stakes in the companies of Member States that need to be fully or partly nationalised, responding to the debate on the extent to which different countries can support businesses facing difficulties, due to their fiscal circumstances, now that limits on state aid have been temporarily lifted. If this initiative serves as a federalising impulse for the creation of ‘European champions’, it could be of interest. However, Spain must pay close attention to the small print to ensure its businesses receive sufficient funds and their headquarters do not end up transferred to other Member States.

Regardless of whether the Commission’s proposal is satisfactory to Spain and even though it will help make debt more sustainable and represents a strong starting point in political terms, it is important not to overestimate the potential of its impact on the management of the crisis in the aftermath of the pandemic. While the battle over eurobonds (or coronabonds) has not been won, both due to deeply-rooted legal objections and because the idea did not fully coincide with the interests of Spain, France and Italy, the ECB’s unconditional support and the prospect of permanently increasing the European budget represent significant progress.

Nonetheless, Spain must continue to insist that the European recovery plan does not allow the crisis to exacerbate divergences between countries and regions along a North-South divide and that it truly embodies the ideas of a ‘Europe that protects’ and a ‘social Europe’, side-lined over the last decade and increasingly demanded by its citizens. The country should aspire for the recovery fund to support the transformation of its economy, based on the principles of digitalisation, sustainability, inclusion and the fight against inequality. These objectives must also be supported by a major political consensus at the national level and ensuring Spain has projects ready in these areas to receive financing when funds become available.

The crisis also provides an opportunity to adopt a firmer stance against European tax-havens like the Netherlands, Ireland and Luxembourg. If the ideal outcome of making fiscal decisions by qualified majority voting in the area of tax –which should be the aspiration of Spain and is expressly stated in its non-paper of 19 April– is not achieved, there should be the possibility of strengthened cooperation, excluding countries that fail to cooperate. On this issue, Germany sides with Spain, Italy and France, and Ireland is in debt due to the solidarity shown by the EU during Brexit.

Spain must also position itself in the debate on the effects of the crisis on action to address climate change. Alongside 12 other Member States, Spain explicitly supports the part of the economic stimulus for reconstruction being channelled through the European Green Deal. Member States opposed to quick progress on decarbonisation should not use the coronavirus as an excuse. Moreover, Mediterranean countries like Spain could benefit from and contribute to Europe’s climate neutrality in 2050. If there are Member States that do not believe in this strategy, they should renounce this stimulus. All Europeans would win through measures allowing Spain to capitalise on its potential for renewable energy in the medium term by strengthening its electricity links with France and the cooperation mechanisms for the exchange of renewable energy.

Another area where stimulus should be focused is the social sphere. The weakest members of society will be most affected by the economic fallout of the pandemic and recovery will require a rebuilding of the working class, which has been severely impacted by the Great Recession and the revolution heralded by new technology. This means forging a new European social contract with a fair generational component to ensure young people are not the worst affected, as was the case in 2008-13. Access to education (an area in which the EU does not have direct powers), both at the start of and throughout one’s working life, based on public–private cooperation is another area that should be studied. It is also time to temporarily trial a basic or minimum income (this need not necessarily be universal) at the European level, as well as temporary European unemployment insurance for job losses caused by the crisis. The SURE programme, mentioned above, is a step in the right direction, although it only covers people who are in employment. In general, regaining the idea of a ‘social Europe’ and linking it to the idea of European citizenship, which Spain helped develop, would be a positive outcome.

As a pro-European country, Spain must continue to encourage the debate on fiscal and political union, which will mean showing a willingness to trade sovereignty (in fiscal, labour and other public policy areas) for permanent joint European spending. It should be for other countries to pay the price if they do not wish to move forward with the required integration.

The political narrative

The result of the general election that took place in Spain in April 2019 initially appeared to favour the idea that the country could play a greater role in the new European political cycle. This objective would be achieved by taking advantage of a number of favourable circumstances: economic recovery, strong pro-European sentiment and the vacuum left by Brexit. However, a year further on, it is fair to say that this desire has not been fulfilled. While some progress has been made, with Spanish parties increasing their influence in the European Parliament, alongside the de-escalation of the Catalan conflict and the appointment of a Spaniard to one of Europe’s top jobs, the long period without a stable government, the fragile coalition that was eventually formed and internal political polarisation in the country have shown Spain to be weaker than originally thought, significantly shrinking the window of opportunity. The coronavirus has reduced this space further. If Spain squanders this momentum, it will be the fifth time in 20 years that both internal and external desires to play a more proactive and influential role in the EU have failed to bear fruit. This was the case during the final years of the Aznar presidency (in the context of the Iraq conflict and the estrangement of the Franco-German axis). It was also the case with the two terms of Rodríguez Zapatero (due to the failure of the European Constitution and then the economic crisis). Finally, it was the case with Rajoy (whose ambitions were frustrated by the pro-independence movement). If a country promises five times to strengthen its leadership in Europe but fails to do so as a result of causes both within and beyond its control, its reputation is clearly tarnished.

However, it is not just about ensuring Spain’s objectives in Europe are not frustrated. The converse also holds: in the domestic arena, it is important to avoid resentment taking root among the public as a result of believing the solution to the pandemic, in terms of both health and the economy, is the responsibility of an EU that is unable to step up to the mark. If we can no longer benefit from the relative economic improvement, which so far has been an objective benefit for the country, damaging the clear pro-European sentiment that persists among the Spanish public would clearly be an act of self-harm.

Despite the challenges presented by the crisis, it also creates opportunities for Spanish interests, not least in terms of the country’s ability to exert its weight as the EU’s fourth Member State, both in institutional and economic terms and intellectually. Spain has ranked among the five most important countries (which make up 70% of GDP of the EU 27) in the debates in the eurogroup and the European Council, as well as in the press, the business sector and among experts. More assertive and with greater cohesion than a decade ago, as well as being more aligned with the Commission and with the benefit of certain sympathy from Germany and even the Netherlands, the South, which in contrast to 2010, now includes France, has achieved a more balanced negotiating position. Moreover, Madrid has also been able to avoid unnecessary open conflict with Berlin and the Hague while persisting on the issue of eurobonds. Moreover, it has restored communication with Rome, showing that if Spain is to occupy fourth place, its interests are not served by a weak partner in third (note, however, that this relationship must be handled with caution to avoid importing foreign and dangerous Eurosceptic debates). Other coalitions have also emerged, grouped around issues such as the rule of law and climate change, which have softened the North-South divide and allowed Spain to show its clear pro-European sentiment (notwithstanding that these alliances portend future turbulence along the East-West axis, which will also need to be managed).

Regardless, when it comes to the strategy and priorities of Spain’s action in the context of the EU response to the coronavirus, we must recall that the its European policy is about much more than the coordinated formulation and effective defence of the country’s positions in supranational decision-making. While this aspect is undeniably important, the relationship between Spain and the EU is politically much richer and more delicate. It also plays a fundamental domestic role by providing coherence and authority for the country’s programme of internal reforms to build a more competitive, innovative, sustainable, secure and internationalised country. In doing so, it provides a valuable example of consensus on the content of national policies implemented to achieve these objectives. The growing scarcity of such consensuses makes it all the more valuable, given the confrontational and ultimately polarised nature of Spanish democracy.

Any strategy for European policy in times of crisis must take into account the need to address these two aspects simultaneously. This means maximising influence (or minimising weakness) on the European agenda, while promoting the idea that this agenda is not foreign or imposed but is based on the joint leadership of a project that belongs to the country and is shared by the vast majority of the Spanish public.

Just like the sovereign debt crisis, the COVID-19 crisis shows that not all roads to integration are positive for Spain. The national position must be more clearly defined to proactively guide behaviour in Brussels. The care taken by Spain to emphasise avoiding a more unequal EU and a weakening of the single market (‘all rules and financing by the MFF should ensure that the cohesion and convergence objectives, as well as a level playing field for companies and states within the Single Market, are reinforced’) instead of grounding its ambitions in solidarity in its proposal for the recovery was a smart move. However, having identified how to embody the national interest in specific policies, the challenge, as was the case with the design of the cohesion funds in the 1990s, lies in being able to accommodate them in the larger EU agenda. As the COVID-19 crisis has shown once again, this means avoiding introspection and ensuring anticipation replaces Spain’s preference for a more reactive approach. It also requires effective communication with the Commission and the Parliament, intellectual complicity in the Brussels universe of ideas and political empathy from and towards countries more inclined to support states they believe to be willing to trade solidarity for stability and/or a genuine willingness to share sovereignty. This is precisely where the national interest lies, although there is no reason why it should fully coincide –and indeed it does not– with France, Italy or Portugal.

However, as well as being able to translate the national interest into a European context, Spain must also be able to translate the European interest into its national politics, allowing it to feed back into its national interest. In the 1980s and 1990s the economic requirements of the accession criteria, single market reform and convergence criteria all supported a modernisation agenda and openness that would otherwise have been undermined by internal cracks. In the context of the post-coronavirus reconstruction, a more integrated Europe, which pays serious attention to competitiveness, environmental sustainability, innovation, social protection and fiscal stability, can once again strengthen the steering capacity of a state seeking to renew its model of production and governance. There is no need to reject EU support in doing so with a debate that is too narrowly focused on conditionality (and, once again, alien to our political reality). Spain benefited from the ESM in 2012 in the recovery of part of its banking sector and the experience was neither humiliating nor negative. The crucial point is that any conditions for accessing more financing (whether through the budget, the ESM, the ECB or joint debt at some point in the future) are not imposed and do not go against the country’s definition of its national interests. Spain is a country with significant weaknesses in the areas of education, technology, employment, inequality, renewable energy and even institutional design. Many of these weaknesses were consistently and jointly identified with the Commission in successive European Semesters. It would be pointless to ignore the EU’s potential –as clearly demonstrated by the virtuous relationship between 1986 and 2001– to provide the incentives for the reforms required to make progress in these areas.

Conclusions

The coronavirus represents a major challenge for the EU and its Member States, with Spain among the countries likely to be hardest hit. The first and biggest strategic danger posed by the crisis threatens not only Spain but the integration process itself, since the crisis is simultaneously affecting its three most iconic achievements: the single market, the European monetary union and the Schengen area. Spain’s membership of the EU is so important that it is often confused with the ambitions of the country itself, such that supporting the solidity of the process (whose resilience is not without limits) is itself a priority. However, we must remember that the EU has been forged in crises and there is also an opportunity to strengthen integration. The definition of Spain’s overall position in Brussels should weigh up both these aspects, with an ambitious pro-European attitude that accommodates the country’s national interests as part of the broader European context. This is true of both the health response (and the re-establishment of mobility) and the complex economic response. It should be translated into specific proposals formed alongside with the European political narrative taking shape in Brussels and other European capitals but also at home.

The task must be carried out simultaneously at both the supranational and internal levels. It is imperative for Spain’s EU position on the coronavirus to reflect a project with broad political and social support. This means strengthening communication between the government and the opposition at this critical juncture (taking advantage of the fact that the Spanish Socialist Workers’ Party, the People’s Party and Citizens are all part of the same coalition in the European Parliament). It is also the time to negotiate and present a major sociopolitical consensus on the same scale as the Moncloa Pacts of 1977, with the involvement of civil society (businesses and unions). However, the key issue is the public. The current widespread weakening of political legitimacy, the signs of a recession and the climate of internal polarisation (with radical parties) must not be allowed to tarnish the EU’s image in Spain. Recent weeks have shown that, despite the problems created by the crisis, the country can find space to make progress and find support for its interests. This room for manoeuvre is increased by playing a more proactive role in Europe and eschewing the politics of resentment.

Ignacio Molina
Senior Analyst at the Elcano Royal Institute | @_ignaciomolina

Federico Steinberg
Senior Analyst at the Elcano Royal Institute | @Steinbergf


1 An early version of this paper was presented as an input paper at the virtual seminar ‘COVID-19 and the influence of Spain in the EU’ on 20 April as part of the Spanish Influence Ecosystem project in Brussels. The authors would like to express their gratitude for the comments made by the event’s participants and the ideas debated with other Elcano Royal Institute analysts during the course of those weeks, particularly Félix Arteaga, Gonzalo Escribano, Enrique Feás, Lara Lázaro, Iliana Olivié, Andrés Ortega, Miguel Otero and Luis Simón.

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<![CDATA[ Regional or global player? The EU’s international profile ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/policy-paper-regional-or-regional-player-eus-international-profile 2020-05-05T11:27:44Z

By means of the Elcano Global Presence Index, this policy paper aims to depict the EU’s international profile while tracking to what extent its features and the objectives of the EU’s global strategy are aligned with the volume, nature and geographical allocation of the Union’s external projection.

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Contents

Introduction – 5

  1. Presence, not power – 9
  2. Not only soft presence – 13
  3. Towards technology and security – 17
  4. The EU’s diversity – 21
  5. A closer Atlantic – 25
  6. Our neighbours – 31
  7. Enlargement – 33
  8. Latin America: the wider Atlantic space – 35
  9. A connected Asia – 37
  10. Conclusions – 39

Annex: methodology – 41
References – 45

Abstract

The upcoming ‘Geopolitical Commission’ has the task of re-thinking several aspects of the EU’s foreign policy and global role. This reflection will necessarily build on the current global strategy, published in 2016, which insists on the need for the EU to upscale its military capacities and to focus on its nearest and extended neighbourhood.

By means of the Elcano Global Presence Index, this policy paper aims to depict the EU’s international profile while tracking to what extent its features and the objectives of the EU’s global strategy are aligned with the volume, nature and geographical allocation of the Union’s external projection.

As stated in the EU’s global strategy, there is a significant gap between the EU’s presence and its international influence. In that same line, and unlike other major international players, its soft profile still needs to be balanced with stronger military capacities. However, despite what the strategic document claims, the EU external projection is strongly concentrated   in few facets and member states. This is also linked to its geographical allocation, with a decreasing importance of the near and extended neighbourhood (including candidate countries) with respect non-EU West Europe, Asia, North America and, to a lesser extent, Latin America. Moreover, the exact consequences of Brexit on the EU’s global presence remain unknown.

Introduction1

The EU renewed its strategic document for foreign policy and security in 2016. The current strategy (Shared Vision, Common Action: A Stronger Europe. A Global Strategy for the European Union’s Foreign and Security Policy– henceforth EUGS) (EC, 2016) has been assessed by academic literature from different perspectives. These assessments can prove to be particularly useful, as the upcoming ‘Geopolitical Commission’ has the task of re- assessing the Union’s foreign policy and strategic role (Biscop, 2019).

Some authors focus on the relevance and implementation of its key principles such as, for instance, resilience (Tocci, 2019; Wagner & Anholt, 2016), politicisation (Barbé & Morillas, 2019) and differentiation, co-ownership and flexibility in the EU’s relation with its Eastern neighbours (Rodríguez Prieto, 2018). Although according to several assessments the strategy is a realistic guide for the EU’s foreign and security policy in the near future (Davis Cross, 2016; Grevi, 2016; Juncos, 2017; K. E. Smith, 2017), it is also seriously challenged by the Brexit process (Biscop, 2016; Sidiropoulos, 2016; K. E. Smith, 2017). Moreover, it has also been claimed that this strategic document might be failing to address the current transitional order (Howorth, 2016; Newman, 2018).

From a geographical perspective, the strategy focuses on the EU’s immediate borders and extended neighbourhood, adopting a regional rather than global approach (Dijkstra, 2016; Grevi, 2016; Juncos, 2017; Winn, 2019).2 In this vein, neighbouring countries such as those included in the European Neighbourhood Partnership (ENP) (Johansson-Nogués, 2018), the MENA region (Harders, Jünemann, & Khatib, 2017) and Russia (Korosteleva, 2019) are now depicted as a source of challenges and this is also reflected in the approach to specific external actions or policies, such as migration (Ceccorulli & Lucarelli, 2017) and security (Legrand, 2016).

This policy paper aims to contribute to the debate by exploring the EUGS –both its claims on the nature of the EU’s external projection and its objectives regarding foreign action– from the perspective of the Elcano Global Presence Index. First, it details the gap between the EU’s global presence and its level of international power; secondly, it looks at the nature of its presence (soft, hard, technological…); third, it focuses on the domestic construction of the Union’s projection; and, finally, it looks at its geographical composition by destination.

Regarding the domestic grounds of the EU’s global presence, the Union is here defined including the UK, in accordance with the EU as defined in the EUGS and taking into consideration that although Brexit has recently come to pass, a transition period will follow until the end of 2020. Moreover, as detailed below, the exact consequences of Brexit for the Union’s external projection remain unknown.

The Elcano Global Presence Index aims to reflect to what extent (and on what grounds) countries or groups of countries project themselves beyond their borders on the basis of three dimensions –economic, military and soft– that comprise 16 variables– from primary goods to military capacities and development cooperation–. The Index’s objective is twofold. On the one hand, it hopes to contribute to the debate on conceptualising and measuring the globalisation process. On the other, it assesses the foreign policy of the countries included in the calculation, for instance, by comparing efforts and means versus the actual level of international presence, by defining sectoral presence profiles and by establishing a relation between presence and influence. Consequently, its second object is to provide a tool for foreign policy making (see Figure 1).

Figure 1. The Elcano Global Presence Index
Figure 1. Structure of the Elcano Global Presence Index (variables, dimensions and weightings of the composite index)
Source: Elcano Royal Institute, Elcano Global Presence Index.

Since the first publication of the Index in 2011 (Olivié & Molina, 2011), and on a regular basis, it has calculated the projection of an increasing number of countries (up to 120 in the latest edition). To these, the EU (as a single entity) was added in the 2012 edition. Roughly, this is achieved by adding the EU member states’ global presence and detracting intra-European international exchanges.3 This also allows the EU to be calibrated as an international player, leads to an understanding of the different contributions of the 28 member states in different dimensions (eg, the economic, military and soft) and specific variables (from troop deployments to international aid) and helps determine the Union’s softer or harder projections (Olivié & Gracia, 2018c).

Although all these data and analyses have proved to be a useful tool for understanding key aspects of the EU’s global role, significant questions remain that are addressed in the EUGS. These refer to the geographical breakdown of the EU’s global presence, such as,  for instance, the magnitude of its transatlantic links and its bonds with its immediate and enlarged neighbourhood (which is, as mentioned above, one of the EUGS’s key geographical concepts). Answering these questions poses an important methodological challenge as it requires conceptualising the geographical distribution of certain indicators (such as military capacity and science) and combining the Index database and sources with additional official national and/or European data sources.4 The results, however, provide a good basis for analysing the geographical pattern of external relations outlined in the EUGS.

Iliana Olivié
Senior Analyst at the Elcano Royal Institute and Coordinator of the Elcano Global Presence Index Project
| @iolivie

Manuel Gracia
Analyst on the Elcano Global Presence Index project
| @mgraciasn


1 The authors are grateful to Davide Rognini for his invaluable research assistance.

2 To this, (M. E. Smith, 2016) argues that, much to the contrary, the geographical approach of the EUGS is still too broad and not sufficiently focused on the European neighbourhood.

3 For further details on this methodology, see (Olivié & Gracia, 2018b).

4 A similar disaggregation was also carried out for the pilot case on one member state, Spain. Details on the methodology and results can be found in (Olivié, Gracia, & Gomariz, 2017).

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<![CDATA[ Thirty years of EU-Mediterranean Policies (1989-2019): an assessment ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/wp8-2020-khader-amirah-thirty-years-eu-mediterranean-policies-1989-2019-an-assessment 2020-04-27T11:57:42Z

This working paper seeks to present a critical overview of the EU’s latest major Mediterranean policies, analysing the context, the text and the pretext of each of these policies.

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Original versión in Spanish: Treinta años de políticas mediterráneas de la UE (1989-2019): un balance.

Index

(1) Introduction – 3
(2) The Euro-Mediterranean Partnership: the Barcelona Process (1995) – 4
(2.1) The European and international context – 4
(2.2) Structure and objectives – 5
(2.3) Difficulties and deficiencies – 6
(2.4) Inconsistencies and lack of political will – 9
(3) The European Neighbourhood Policy (2004-19) – 11
(3.1) Origins of the new policy – 11
(3.2) From multilateralism to bilateralism – 13
(3.3) The dilemma between values and interests – 14
(4) The Union for the Mediterranean (2007-19) – 16
(4.1) Proliferation of initiatives towards the Mediterranean – 16
(4.2) Reactions to the French initiative – 17
(4.3) The complicated logic of the ‘union of projects’– 18
(5) The EU and the ‘Arab awakening’ of 2011 – 20
(5.1) A neighbourhood that calls for change – 20
(5.2) The accentuated dilemma and the EU’s lost opportunity – 21
(5.3) Pending lessons from the ‘Arab awakening’ – 22
(6) Conclusions – 23
Bibliography – 25

(1) Introduction1

From the EU’s perspective, 1989 was an annus mirabilis. The fall of the Berlin Wall and the end of the Cold War were events of great historical and geopolitical importance, not only for international relations, but more specifically for relations between the EU and the Mediterranean. This is not to say that the southern shore of the Mediterranean had been ignored, but the Cold War had overshadowed many of its problems and challenges. The southern Mediterranean had only served as a ‘security chessboard’ for the policies and strategies of the US and the Soviet Union. From a Western perspective, the southern Mediterranean was not seen as a region per se, but simply as a line of communication and a route for trade and oil flows that could be threatened by the presence of the Soviet Union. In short, the Mediterranean was perceived simply as a secondary theatre of antagonism between the superpowers.

In the early 1990s the EU or some of its member states were involved in multilateral policies (Renewed Mediterranean Policy) or smaller cooperation initiatives (Dialogue 5+5 and Foromed), or even NATO’s Mediterranean Dialogue. However, with the end of the bipolar system, the EU shifted its focus to the North-South divide. It considered that the Renewed Mediterranean Policy was not ambitious enough to prevent a possible destabilisation derived from socio-political and economic disparities. As a consequence, the EU felt the need to forge a more comprehensive policy towards the Mediterranean. The shift in emphasis came at a time when some controversial but influential political thinkers, such as Samuel Huntington, raised the question of the cultural dimension of security, arguing that the ‘clash of civilisations’2occurs along the lines of religiously-inspired militancy against Western values.

Such a thesis is particularly pernicious because it builds on old stereotypes and reinforces them under the guise of critical scholarship. Indeed, the idea of confusing Islamist fundamentalism with Islam as a religion is not new. As early as 1979, Edward Said, in his seminal book Orientalism, observed that trend. He stressed that ‘negative images of Islam are very much more prevalent than any others, and that such images correspond not with what Islam “is” [...] but to what prominent sectors of a particular society take it to be’.3 But the timing of the publication of Samuel Huntington’s article in Foreign Affairs in 1993, just after the collapse of the Soviet Union, was undoubtedly a factor that contributed to the worldwide spread of the ‘clash of civilisations’ thesis, where ‘Islam’ (and not just Islamist groups) is presented as a kind of scapegoat for everything the West does not like in the world’s political, social and economic spheres.

Concerned about the fallacy of such a thesis, the EU felt the urgency of demonstrating the dangers that can result from such a simplistic diagnosis that overemphasises the notion of a clash of civilizations. For the vast majority of Europeans, it was clear that many of the security-related concerns in the southern Mediterranean were not military in nature or culturally based, but were primarily ‘soft security issues’.4 These included economic disparities, the demographic divide, migratory flows and the persistence of authoritarian regimes. The idea of a ‘new partnership’ emerged in this context of conflicting views about security in the Mediterranean.

This working paper seeks to present a critical overview of the EU’s latest major Mediterranean policies, analysing the context, the text and the pretext of each of these policies.

Bichara Khader
Professor Emeritus at the Catholic University of Louvain and founder of the Centre for Studies and Research on the Contemporary Arab World (CERMAC)

Haizam Amirah Fernández
Senior Analyst for the Mediterranean and Arab World, Elcano Royal Institute. Professor of International Relations at the School of Global and Public Affairs, IE University | @HaizamAmirah


1 A Spanish version of this working paper was published as a chapter in J.M. Beneyto Pérez (Dir.), J. Maillo González-Orús & B. Becerril Atienza (Coord.) (2020), Tratado de Derecho y Políticas de la Unión Europea (Tomo X): Las Relaciones de la Unión Europea con Áreas Regionales y Terceros Estados, Editorial Aranzadi, January.
The authors would like to thank Adelaide Isaacs for her assistance with the editing and proofreading of this document.

2 S. Huntington (1993), ‘The Clash of Civilizations?’, Foreign Affairs, vol. 72, nr 3, summer, p. 22-49.

3 E. Said (1981), Covering Islam: How the Media and the Experts Determine How We See the Rest of the World, Pantheon Books, 1981, p. 144. See also E. Said (1979), Orientalism, Vintage Books.

4 S. Stavridis & N. Fernández Sola (Coords.) (2009), Factores políticos y de seguridad en el área euro-mediterránea, Prensas de la Universidad de Zaragoza.

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<![CDATA[ Will European defence survive Coronavirus? ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/commentary-fiott-will-european-defence-survive-coronavirus 2020-03-27T03:51:48Z

How the virus will hit European defence over the long-term remains to be seen, of course. What can be said with a degree of certainly, however, is that Europe’s defence budgets may take a sizeable hit while Europe’s economies recover from the virus.

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The tragedy that is the Coronavirus has already claimed too many lives, but it has also allowed Europe’s public services to shine. Citizens across Europe are rightly applauding the tireless work of medical professionals, police and transport workers. Europe’s armed forces have also been called on to roll back the virus. Whether this should be likened to a ‘war’ is open for debate, but Europe’s militaries have mobilised to supply extra hospital space and to support the public through emergency quarantine and hospital capacities and the airlifting of medical equipment. Europe’s air forces can also assist with the repatriation of thousands of European nationals that are still stuck in foreign lands. 1

“How the virus will hit European defence over the long-term remains to be seen, of course”.

In rising to the challenge posed by the virus, Europe’s militaries have been subjected to disinformation campaigns too. The most ridiculous conspiracy theory currently being peddled is that the virus is a bio-weapon that has been unleashed by Western militaries. Armies of trolls on social media falsely argue that militaries are enforcing the ‘lockdown’ in a coup-like manner. Other false narratives argue that Poland has stopped Russia from using its airspace to deliver aid to Italy. Swiftly discarding such disinformation, the image that we should all hold in our minds is that of air forces in places such as Italy helping infected individuals get to ventilators in time or Spain’s army helping with the transport of medical equipment.

How the virus will hit European defence over the long-term remains to be seen, of course. What can be said with a degree of certainly, however, is that Europe’s defence budgets may take a sizeable hit while Europe’s economies recover from the virus. Reaching NATO’s 2% pledge seems unlikely for the foreseeable future as the eurozone heads for a period of anaemic growth. Europe was just starting to recover from the 2008 financial crisis, which saw about €24 billion wiped off of Europe’s defence budgets in the space of six years. Given the extent of Coronavirus and its possible impact on the global economy, we should perhaps expect even more severe defence budget cuts in the future.

Defence budgets are usually the sacrificial lamb when economies face hardship and the political pressure to make quick savings can be strong. It can only be hoped that the time-limited ‘holiday’ from Europe’s Stability and Growth Pact’s rules will discourage harmful knee-jerk cuts by governments in the eurozone. Presently, defence may not be seen as the most important area for investment when compared to say public health or the support that will be clearly needed for small and medium-sized firms. As the European economy falters, however, so too could defence.

“We should also not forget that many of the military capabilities currently being used today to transport medical equipment and European nationals back home such as strategic airlift planes are the result of defence R&D efforts made decades ago”.

Cutting defence budgets now would be a disaster –however tempting– and it could hit future capability programmes. Although capability programmes that last for multiple decades can usually absorb the costs of short-term economic crises, any drastic cuts to defence budgets can hit R&T and R&T projects hard. At a time when Europe is investing in next-generation capabilities such as the French, German and Spanish Future Combat Aircraft System (FCAS), this is a risky time to dry up valuable investments in defence research. Of course, many will argue that defence research is hardly a priority during a public health crisis but decisions taken today will likely affect Europe’s military capability landscape for decades to come. We should also not forget that many of the military capabilities currently being used today to transport medical equipment and European nationals back home such as strategic airlift planes are the result of defence R&D efforts made decades ago.

Europe’s defence technological and industrial base is facing a much larger problem, however. Given that many aerospace firms in Europe maintain civil and defence wings, there is a risk that any hit to civil aerospace will negatively affect Europe’s defence industrial base. Today, Europe’s airlines are grounded and any lasting damage to this sector is likely to spill over into the defence sector, endangering close to 900,000 jobs and diminishing Europe’s scientific knowledge –expertise that is also valuable during a pandemic–. We should also keep in mind that any large-scale financial impetus in the US for its airline sector is likely to help buoy US arms producers during this difficult period, which would increase the level of competition already being experienced by Europe’s defence firms. There is also no clarity over how defence supply chains will be adversely affected, although the closure of national borders across the globe may serve as a pretext to cut-off valuable components and materials used for the construction and maintenance of European defence capabilities.

We should also acknowledge the more immediate effect that the Coronavirus could have is on the EU’s newly minted mechanisms for defence capability development. In the short-term, the as yet unresolved negotiations for the Multiannual Financial Framework may result in even smaller envelopes for EU defence as member states re-focus EU finances towards economic recovery. If this does happen then the European Defence Fund and other initiatives such as military mobility and the space programme could be severely affected. Even Permanent Structured Cooperation, which relies on EU member states’ financial contributions, could be greatly diminished at a time when many projects are just getting started.

Of course, one does not necessarily have to take such a negative view of the effect of the Coronavirus on EU defence. It could be argued that the pandemic only goes to further underline that more defence cooperation is needed, especially in an era of diminishing defence budgets. This argument could yet see EU governments decide to invest more in the European Defence Fund and other initiatives as national budgets start to dry up. Projects like military mobility may even get a second wind if it is argued that the military transport of medical supplies across Europe is essential. The track record for such positive hopes is not good, however, and it is unclear whether the pandemic will result in a re-nationalisation of defence or a new impetus for more EU defence integration.

“The question currently facing Europe in this regard is whether it has the resources to simultaneously deal with the virus in Europe and farther afield”.

The Coronavirus comes at an extraordinarily bad time for Europe. The neighbourhood is still in disarray with countries such as Libya and Syria being ripped apart and a migration crisis on the Greek-Turkish border that is straining relations with Ankara even further. The Sahel has seen recent gains by terrorist groups and countries like Burkina Faso are already on the brink of crisis. These already unstable areas could deteriorate rapidly as the virus spreads to Africa. Adding a public health crisis to longstanding conflicts may aggravate instability, which could in turn see an uptick in requests for EU and NATO support.

The question currently facing Europe in this regard is whether it has the resources to simultaneously deal with the virus in Europe and farther afield. Sure enough, Europe could deploy civilian crisis missions to countries in Africa, but will EU member states really want to devote police officers to foreign missions when these experts are needed at home. Likewise, with the virus there could be a reluctance to deploy the military beyond EU shores. Countries such as France and the UK have already suspended counter-terrorism activities in Iraq in order to free up key capabilities such as logistics vessels for the fight against the virus back home.

This is not to say that the EU cannot deploy in times of crisis because it did, after all, deploy Operation Atalanta to the Horn of Africa during the financial crisis in 2008. What is clear, however, is that European leaders could be reluctant to deploy the military to deal with both crisis management and the containment of a pandemic in unstable countries in the near and wider neighbourhood. In this respect, the newly created EU missions and operations to the Mediterranean and the Central African Republic will be a test for how EU member states view crisis management during the global pandemic.

The broader geopolitical contest underway will also impinge on European defence. China and the US are at loggerheads. That conflict may yet prove to be an even bigger concern than just an exchange of words over where the virus first emerged. In the minds of some, the Coronavirus appears to justify Beijing’s ostracising from the global economy and we should expect Washington to intensify its ‘strategic distancing’ from China. Closer to home, Russia continues to loom over the Eastern flank at a time when arms control in Europe is under threat. The potential for Moscow to test Europe’s defences and NATO’s resolve through military manoeuvres and cyber-attacks, at a time when governments are distracted by a public health crisis, should not be underestimated.

“The danger is that the combination of doctrinal shifts to satisfy public opinion and haphazard budget decisions could place Europe’s armed forces in an incurable state”.

All of this is to say that Europe needs its armed forces and defence industry today. Of course, the Coronavirus affords Europe’s militaries a chance to prove their rightful worth to citizens. Many militaries across Europe will use the crisis to justify their existence as governments look to make savings. The uncomfortable truth, however, is that while Europe’s armed forces have a chance to alter the public’s perception of the military’s role in society, they will be most at risk from harmful budgetary decisions. Finance Ministries should be discouraged from washing their hands of defence, despite the fact that the markets will be eagerly watching to see what public debt in Europe looks like after the crisis. The European economy will need an ‘exit strategy’ from the Coronavirus, but key public institutions such as defence should not be jettisoned in the process.

Of course, this is not just about money or the defence industry. Europe’s militaries have spent years developing valuable skills from serving in Afghanistan, the Sahel and Europe’s eastern flank. One lasting effect of the Coronavirus is that military planners may be encouraged to plan for and invest in public health contingencies instead of preparing for their core mission: war, conflict and deterrence. Saying that Europe’s militaries should be able to assist in a public health crisis is not the same thing as saying that public health should be the sole mission of Europe’s armed forces. Therefore, just as militaries across the EU will be rightly applauded for their efforts in combating the virus, so too will a longer-term societal and political debate on the role of the military need to take root. The danger is that the combination of doctrinal shifts to satisfy public opinion and haphazard budget decisions could place Europe’s armed forces in an incurable state.

Daniel Fiott
Defence analyst at the EU Institute for Security Studies (EUISS)  | @DanielFiott


1 The author writes here in a personal capacity and his views do not reflect those of the EUISS or the EU.

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<![CDATA[ The case for EU-Japan digital connectivity and digital ODA ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari30-2020-okano-heijmans-the-case-for-eu-japan-digital-connectivity-and-digital-oda 2020-03-25T03:45:46Z

The 2019 EU-Japan Connectivity Partnership paves the way for EU-Japan cooperation on all three practical elements of digital connectivity: telecommunications infrastructure, business and regulation. Cooperation should be implemented at both the practical and strategic levels, and beyond the bilateral agenda.

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The 2019 EU-Japan Connectivity Partnership paves the way for EU-Japan cooperation on all three practical elements of digital connectivity: telecommunications infrastructure, business and regulation. Cooperation should be implemented at both the practical and strategic levels, and beyond the bilateral agenda.

Summary

In implementing the EU-Japan Partnership on Sustainable Connectivity and Quality Infrastructure, the digital field offers practical opportunities for the two partners to further shared objectives. Set against the context of a hardening US-China trade-tech conflict, the EU and Japan should focus on the promotion of data security and trust in data flows at the global level, and on nurturing competitive digital businesses with a strong global presence. In addition, cooperation on the digital development agenda is crucial to ensure that third countries also benefit from the data revolution in their development and can contribute to a convergence of norms on data governance. A broader engagement between stakeholders with each other’s strategic thought on digital connectivity’s defensive strand is required for success in these fields. Taken together, this means pushing cooperation beyond the bilateral agenda, while also creating more lines of communication to compare notes on the notion of digital strategic autonomy.

Analysis

In recent years the EU and Japan have come a long way in broadening and deepening their bilateral relationship. The free trade deal, political cooperation agreement, sustainable connectivity partnership and mutual adequacy decision on the sharing of personal data of 2019 are evidence of the political momentum. Moving from paper to practice, the vast digital agenda offers practical opportunities to further shared objectives.

Taking cooperation beyond the bilateral agenda, the focus should be on the promotion of data security and trust in data flows at the global level, and on nurturing competitive digital businesses with a strong global presence. In addition, cooperation on the digital development agenda in third countries –in particular, emerging economies in Asia and Africa– seems promising. Aiming for digital governance to proceed in an open and transparent system that continues to benefit their own peoples and citizens in third countries, the EU and Japan stand to benefit from coordinated action in multilateral settings like the G20 and World Trade Organisation (WTO), as well as in third countries, in areas such as data for development, digital capacity building and digital financial inclusion.

True engagement on each other’s strategic thought –including on digital connectivity’s defensive strand and (digital) strategic autonomy– is necessary for success in these fields. This requires that new platforms are created that facilitate discussions between stakeholders, just as the EU-China Connectivity Platform facilitates dialogue on transport connectivity with China and the Asia-Europe Foundation (ASEF) furthers human connectivity between European and Asian countries.

Society-centred policies

Set against the context of a hardening US-China trade-tech conflict, the ongoing fourth industrial revolution is fundamentally changing the way in which people live, work and interact. Following mechanisation thanks to steam and water, mass production enabled by electricity, and automation owing to digital tools including the Internet, the fourth industrial revolution is now facilitating robotisation by way of integrating information and communications technology (ICT) in all of society. The new technology revolution is connecting not just billions of people through mobile devices but also –and more profoundly– introducing autonomous systems in society (ranging from vehicles to military systems) and facilitating new businesses and business models. As the Japanese say, we are entering Society 5.0.2

As most technological development today is carried out by companies, governments need to ensure that these technologies continue to benefit the people. This means devising policies that are not technology-oriented but socially-oriented, or what the Japanese government calls a ‘human-centred digital society’. This clearly resembles the ‘human-centric’ approach put forward in the EU’s digital strategy. But while Japan’s focus seems to be on the collective, the EU’s focus is on the (European) individual, a difference that might seem insignificant but is actually a sign of divergent approaches and preferred solutions. That said, both sides stress the values of openness, sustainability and inclusiveness. And, putting citizens’ interests first clearly differentiates the EU and Japan from the US, which prioritises companies, while in China technology is to serve the state.

While for China data are something to be controlled, and for the US something to be commercialised, the EU and Japan thus share the understanding that data are to be protected. This is important, as it distinguishes the two partners from countries with restrictive data transfer regulations that associate data governance with political and social control. The growing presence of these countries’ technology champions –such as Huawei, Alibaba, ZTE and Tencent, in the case of China– supported by the state will further their vision for state-led Internet governance and may facilitate its espionage and security services and even export them to third countries. Action is thus needed to prevent the leveraging of investments in network infrastructure abroad to evangelise restricted visions for Internet governance and harmful digital protectionism.

Digital connectivity

This is getting to the heart of the question: what are the objectives –and, flowing from these, the opportunities and challenges– for EU-Japan cooperation in digital connectivity? Answers to this question should be sought in each of the three practical elements of digital connectivity –namely telecommunications infrastructure, business and regulation–. These parallel connectivity’s three strands of physical, institutional and people-to-people links. Importantly, each element has a strategic dimension that should incentivise governments to act in these fields, both individually and jointly. As shown in Figure 1, these are cyber security, standards and rules, and innovation and AI.

Figure 1. Cyber security, norms and standards, and innovation and AI
Figure 1. Cyber security, norms and standards, and innovation and AI. Source: Okano-Heijmans, 2019

Regulation

The shared objectives of the EU and Japan are most obvious in the field of regulation, where cooperation is well on track. Here, key questions are how to ensure the free, open and secure flow of data in the digital domain; how to reconcile regulatory differences between countries; and how to shift to multi-layered, multi-stakeholder approaches that address the gap between incumbent regulations and rapid technological innovations.

For its part, the EU has been a leading force internationally to promote privacy regulations through the General Data Protection Regulation (GDPR). The Union leverages its regulatory power through the attraction of its single market combined with adequacy decisions. It aims to further free flows of data between Europe and countries with a comparable level of protection of personal data –its first success being the mutual adequacy decision with Japan in early 2019– and thereby to spread its norms on data privacy beyond its borders. Countries worldwide –ranging from India to Singapore and even the US– are taking the GDPR as a starting point and inspiration for regulation within their own borders.

For its part, Japan has been the staunchest promotor of the Data Free Flow with Trust (DFFT), starting with Prime Minister Shinzo Abe’s visionary speech in Davos in 2019. Since then, the Japanese government has been furthering conversations worldwide –cooperating with like-minded partners like the EU and US, but also engaging with the likes of China and Saudi Arabia in the G20 context.

Clearly, on data regulation there is a convergence of interests and approach between the EU and Japan. But, as Guntram Wolff eloquently points out, referees do not win. The EU and Japan thus need to step up their act to ensure that they remain players in the digital field also.

Problem-solving business

The big players in the digital field today are the US and China. The big tech-companies from these two countries dominate the digital platforms: Google, Apple, Facebook and Amazon (GAFA) from the US and Baidu, Alibaba and Tencent (BAT) from China. Looking towards the future, these companies benefit from their established position in terms of the (personal) data they own and allow them to continuously improve their products –a position that is increasingly difficult for any newcomer to catch up with–.

While the EU and Japan are said to have lost the battle for personal data (in the business-to-consumer field), they are preparing to do better in the battle for industrial data (or business-to-business) that is only now beginning. Acting on the awareness that AI x data equals innovation,3 both are investing in Artificial Intelligence (AI) –both as an enabler and addressing its negative aspects– and in promoting the transfer of research success to business applications. Aiming to nurture and retain (problem-solving) businesses, both are also devising policies to assist promising start-ups, also to avoid losing them to US or Chinese giants during the scale-up. After all, the EU and Japan have the talent to compete with the US and China on AI and rank high on research but lag behind in commercial AI adoption and funding.

Beyond AI and innovation, the question is how to harness the full potential of data and the digital economy, while maintaining a level playing field and avoiding inefficient protection of domestic players. This challenge is shared by policymakers across the globe. Specifically, it involves a reconsideration of competition policy (including ‘platform fairness’), privacy protection and taxation, and, ultimately, the question of (digital) strategic autonomy.

The EU and Japan stand to benefit from more engagement with each other’s strategic thought and best practices in these fields. More and regular meetings between government officials, experts and representatives of business (federations) and banks –in so-called Track 1.5 settings– combined with joint research will contribute to this purpose. Also, the two partners would do well to coordinate their action and expand their presence in third countries, where Chinese companies are increasingly present and/or investing heavily in local unicorns, thereby gaining access to (local) data and spreading their norms.

This is acting on the real need in emerging Asia –and arguably also in Africa– for the active participation of Japanese, US and European companies in these countries’ digital transformation processes. A multi-stakeholder platform including representatives from government, business (federations) and academia from the EU and Japan with local stakeholders can help identify government concerns/objectives and business opportunities. Obviously, this is not easy considering that Japanese and European companies are also competitors in third markets. Considering each other mostly as rivals in obtaining short-term gains, however, overlooks the longer-term benefits of cooperation and coordination, that is, building a free and open data distributions place that will enlarge the ‘digital economic pie’ for all companies.

Telecommunications infrastructure

Whereas telecommunications networks in the EU and Japan are primarily an internal affair, the security of these networks is a sensitive but vital topic, where both sides stand to gain from information sharing and best-practice learning. This is an argument for more engagement also in digital connectivity’s defensive strand, in recognition of the fact that governments need to act on the (security) challenges that come with connectivity, mainly due to divergences in modalities, standards and norms. After all, upholding norms and standards in a more (digitally) connected world must –in specific cases and for specific purposes– also include a willingness to put limits to certain connections.

A prime example in this regard is the debate (and policy decisions) on the security of next-generation telecommunications infrastructure, and the role of Chinese equipment provider Huawei within this. Even if the EU and Japan share the concern of Huawei as an operator that cannot be seen to be independent from the Chinese state, the process of getting to a decision on whether to allow Huawei as an operator in the 5G networks has been quite different –even if, in the long term, the endpoint may not be all that far apart–.

Subtly, the Japanese government shut out (although it did not formally ban) Huawei by allowing only ‘trusted operators’ for reasons of national security. This makes it difficult for Chinese companies to obtain licences, due to Japanese experience with Chinese espionage activities, problems with transparency, and the companies’ links to the Chinese Communist Party (CCP). At the same time, the Japanese government is seeking to produce (domestic) technology solutions –that is, nurturing Japanese providers into key players in 6G–. If Japanese operators like NEC and Fujitsu, which are already top players in Japan, can become global players in telecommunications equipment, this would help avert today’s problem of governments being forced into a choice between a limited number of operators.

For their part, EU member states –which have the competence to act in this field, not the EU– are less straightforward in their considerations and priorities. As governments attempted to avoid a hard decision, this contributed to a very public and politicised debate on the matter. Only in October 2019 did the EU publish a coordinated risk assessment for the cyber security of 5G networks, followed in January 2020 by an EU toolbox for risk mitigation recommendations. This has not prevented EU member states from acting in different ways, however.

European capitals have different starting points –that is, 4G operators– and their capabilities and approaches (to national and economic security) also vary. For example, while France considers telecommunication operators critical actors, other member states have treated telecoms as a commercial issue. Separately, the capacity to ensure network security differs between member states, which has led to calls for intra-European assistance. Several governments in Western Europe have now opted to keep Huawei out of the ‘core network’ while allowing it on the periphery. Even if this seems a more Huawei-friendly approach, some telecommunications experts consider it a ‘kiss of death’, arguing that it essentially degrades the company to a third-tier supplier that will play an increasingly small role, as further development grows from the core.

What this also shows is that the challenge of balancing costs and risks in digital infrastructure will not go away. In considering their future paths, relevant actors in the EU and its member states stand to benefit from information and best-practice exchange with their Japanese counterparts, who face similar challenges and know China better than most Europeans.

Digital ODA

Last but not least, the EU and Japan would do well to consider all three dimensions of digital connectivity not just in a bilateral context. After all, shared objectives in the digital field extend beyond the EU and Japanese borders, and also include third countries –in particular, emerging economies in Asia and Africa–. The Connectivity Partnership specifically mentions the Western Balkans, Eastern Europe, Central Asia, the Indo-Pacific and Africa. So, in implementing the connectivity partnership, why not aim for a shared agenda on digital development assistance that focuses on an Open and Connected Ring around Europe (OCRE)? This may be promoted as the other side of the coin of the Free and Open Indo-Pacific championed by Japan and the US and provides clear guidance on the type of projects to be pursued.

In essence, digital Official Development Assistance (ODA) entails technical assistance to developing countries, helping them to address the digital challenge that also faces developed countries. There are essentially two reasons to do so: (1) to ensure that these countries also benefit from the data revolution in their development; and (2) to further cooperation that also contributes to a convergence on norms.

The idea for this is not new: in fact, Japan’s digital agenda dates back to 2000, while the EU developed a Digital4Development agenda in recent years, as have individual member states like the Netherlands. That said, these digital ODA programmes need to be properly budgeted and staffed (which is not the case today at the EU-level) in order to be successful. In addition, both European and Japanese actors should update their policies in this area and stand to benefit from better the coordination of their efforts. The Memorandum of Understanding signed between the Japanese development organisation JICA and the European Investment Bank (EIB) –which aims for cooperation on microfinance and technical cooperation– can be instrumental towards this end. In addition, coordination is needed at the policy level between the European Commission’s development and telecommunications directorates-general (DG DEVCO and DG CONNECT) and Japan’s Ministry of Foreign Affairs, as well as between their (policy-oriented) research divisions.

In the regulatory field, the digital ODA-agenda should focus primarily on digital capacity building –that is, assisting third countries on how to establish data protection structures–. Adding to this a business dimension could help to ensure that these countries also benefit from data for their own development, rather than allowing foreign companies to gather local data and take it back to their own countries for their own benefit. Separately, digital financial inclusion is a promising agenda, where trilateral cooperation with Indian companies with a proved track record could facilitate improved access to countries with large Indian diasporas and/or Muslim populations. Finally, on the telecommunications infrastructure side, digital ODA can play a role in helping to design 5G infrastructure.

Conclusions

As the fourth industrial revolution unfolds and strategic rivalry intensifies, EU-Japan cooperation on digital connectivity is needed to further the two like-minded partners’ shared objectives. In implementing the 2019 Connectivity Partnership, cooperation should be taken beyond the bilateral level, towards multilateral settings and in third countries. Multilaterally, a joint push for human-centred, ethical AI can help promote data security and in data flows with trust –that is, the regulatory agenda, and with that, norms and standards that fend off digital protectionism. In third countries, multi-stakeholder coordination can further the presence of European and Japanese digital companies, while ODA in each of digital connectivity’s three strands could offer a promising way to further values-based cooperation. More engagement between European and Japanese stakeholders’ strategic thought on digital connectivity’s defensive strand is required for success in these fields. Taken together, this means pushing cooperation beyond the bilateral agenda, while also creating more lines of communication to compare notes, including ideas on the notion of digital strategic autonomy.

Maaike Okano-Heijmans
Senior Research Fellow at the Netherlands Institute for International Relations Clingendael at The Hague and Visiting Lecturer at the University of Leiden | @MaaikeOh


1 This Analysis of the Elcano Royal Institute is an adapted version of the author’s presentation at the conference ‘Innovation and Connectivity: Key Drivers in EU-Japan Cooperation’ hosted by the Elcano Royal Institute in Madrid on 20 February 2020. An event recap is available online. The author wishes to acknowledge the valuable feedback and discussions at that conference.

2 As put forward by the Japanese government, the road to the super-smart Society 5.0 has led from the hunter-gatherer society (1.0), to the agrarian (2.0), the industrial (3.0) and the information society (4.0) to one where the various social challenges can be resolved by incorporating the innovations of the fourth industrial revolution –eg, the Internet of Things, big data, artificial intelligence (AI), robotics and the sharing economy– into every industry and social life.

3 G20 Osaka and beyond: addressing opportunities and challenges in the digital age, unpublished presentation by Tetsuro Fukunaga, Director-General at the Japanese Ministry of Economy, Trade and Industry.

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