by Klaus Dräger (*)
May 8, 2023 

 

On taking office as President of the EU Commission in 2019, Ursula von der Leyen said she wanted to create a ‘geopolitical Commission’: “We have enormous tasks ahead of us: Brexit, climate change, 5G expansion, the rise of protectionism and the reform of the European asylum system – to name just a few. To manage these upheavals, Europe must stand united and assert itself more globally. ” Her goal, she said, is to achieve ‘strategic sovereignty’ for the EU on a par with the U.S., China and Russia.  Since the Ukraine war in February 2022, the EU grandees have outdone themselves with  buzzwords on the topic of geopolitics. Recently also EU ‘geopolitical subsidies’ were announced. Is the EU capable of becoming a world power? Or is this merely wishful thinking on the part of its leaders? I try to give a compact and very rough sketch on these issues.

 

EU Global Gateway – Alternative to China’s New Silk Road?

The EU Global Gateway Initiative launched in 2021 is intended to compete with China’s New Silk Road. The EU (supported also by the G7 countries) is concerned with limiting China’s (and also Russia’s) growing influence among emerging economies and other countries of the Global South. Between 2021 and 2027, around €300 billion shall be allocated to digital, energy and transport, health, education and research systems.  EU plans include investment in new rail lines and roads, a new undersea cable link to transport data between the EU and Latin America, and the use of ‚green hydrogen‘.

However: the announced €300 billion has essentially been reallocated from existing EU funds for development aid, neighborhood policy, etc. – and thus bundled together to be sold as a groundbreaking new EU initiative. As is so often the case with EU propaganda – there is hardly fresh money. China’s long pursued New Silk Road, on the other hand, now amounts to some $2,500 billion in projects around the world. The EU initiative (and even the supporting G7 partners of the global West) cannot match that. The Stuttgarter Nachrichten (StN of 26.01.2023) commented sarcastically on the EU Global Gateway project: “Even in the EU Commission itself, those responsible seem to be rather dissatisfied with the progress. A few months ago, therefore, a meeting with several hundred participants was organized in Brussels. (…) The visible result was a glossy brochure in which several initiatives were presented in November (2022). For example, production plants for green hydrogen in Namibia and Kazakhstan or a floating solar power plant in Albania. The problem: all the projects so far exist only on paper.”

 

EU – China: Further economic cooperation or rupture?

As recently as 2020, the EU wanted to conclude a trade and investment agreement with China (Comprehensive Agreement on Investment, CAI) under pressure from Angela Merkel – which could not be completed because of the Corona pandemic. It is well known that German capital in particular invests heavily in China and that Germany is the largest exporter of goods (especially capital goods such as machinery) to China. Conversely, the EU is the largest trading partner and export market for China.

The U.S. administrations (Obama, Trump), on the other hand, took measures early on to de-couple the U.S. economy from China. They were always concerned with preventing China’s economic rise with economic and military strategies. Biden and the U.S. Senate are calling for ‘preventive economic sanctions’ by the West against China. To circumvent tighter U.S. sanctions, German companies are considering converting their branches in China into local (Chinese) companies. As a precaution, Brussels and Berlin want to reduce economic ties with China in order to be prepared for a possible escalation.

EU Commission President von der Leyen is intensifying her anti-China rhetoric, seeking to close ranks with Biden. While the EU should not completely decouple itself from China economically, it should drastically reduce its unilateral dependence on the Middle Kingdom in terms of strategic goods and services (de-risking).

France’s President Macron, on the other hand, advocates an independent China policy for the EU that seeks to achieve a balance – independent of the United States. During his state visit to China (together with von der Leyen) before Easter 2023, around 50 economic projects of French companies were concluded with China. In addition, Macron pleaded for an independent position on the Taiwan issue. Afterwards, there was a hail of sharp criticism from members of the German Bundestag (from the CDU/CSU and the SPD), and from some EU governments as well. The so often invoked Franco-German tandem has been damaged. The contradictions within the EU regarding China policy are now openly exposed.

The EU’s global aspirations for securing resources and new markets

For some time now, German Chancellor Olaf Scholz has been urging the governments of Latin American countries to finally conclude the EU-Mercosur agreement, which has been under negotiation for about 20 years. This would give European corporations access to a market of 265 million people within 10 years, in which 90 percent of tariff barriers would be gradually dismantled. It would be the largest free trade zone in the world. From the point of view of German companies, this could help to more than compensate for the declining business opportunities they lost as a result of the joint Western sanctions policy against Russia.

The German and European Greens face a problem here. Previously, they had always rejected the Mercosur agreement – because it does not provide safeguards against the deforestation of the Amazon, the cultivation of genetically modified soy, the export of cheap beef, the excessive growth of the extraction economy (gold and other raw materials), and so on.

The German Greens are therefore counting on negotiations on a climate-protecting supplementary agreement with Brazil’s President Lula da Silva. To sound this out, Germany’s Agriculture Minister Cem Özdemir and Economics Minister Robert Habeck were sent on a mission to Latin America. The German government promised aids for the preservation of the rainforest and also for phasing out coal in Colombia. In the Brazilian Amazon, Habeck greeted a gathering of indigenous communities, saying, “I’m Robert, this is Cem, and we’re ministers in the German government – this is like your chiefs, but we come from a different country.” Habeck’s address to the indigenous community does not fit in with the wokeness  and political  correctness standards which are so much cultivated by the German Greens at home. It resounds more of a paternalistic, if not a ‚green‘ neo-colonialist approach.

With the escalation of the Ukraine war, the Western sanctions policy and its global consequences, the German traffic light coalition (SPD, Greens, Liberals) in particular is trying to diversify trade and economic relations with other countries around the world. Unilateral dependencies are to be avoided. It is always concerned with access to raw materials (e.g. rare earths, lithium for electric car batteries, etc.), the supply of ‘green hydrogen’ and much more. To this end, intensive negotiations are being held with countries such as Brazil, Colombia, Chile, Argentina in Latin America, and also with Morocco, for example. However, it remains to be seen whether concrete and tangible projects will follow from this. For example, the German government strived for a wind park project in Chile, to produce e-fuels and hydrogen. The Chilean government stopped this, and also nationalized its lithium fields.

The German government would also like to do more business with India, Indonesia,  African and Southeast Asian countries –  in order to get a foot in the door there as a counterweight to China. This essentially involves bilateral negotiations. Projects led by German consortia are bid for and pushed – in competition with those from other EU countries (e.g. France, Spain, Italy). This pattern is familiar from the German buying spree since the Ukraine war to replace Russian gas with that from other sources (USA, Qatar, Norway). It is always about Germany securing the lion’s share of resources, energy and business opportunities. The well-known neoliberal competition between nation-state governments in the interest of the respective domestic capital – it continues to characterize the EU.

 

EU geopolitical subsidies against Biden’s IRA?

The EU is very concerned about the U.S. Inflation Reduction Act (IRA). This is a $374 billion investment program that is supposed to go toward promoting electric mobility, climate change mitigation, and industries of the future. The subsidies and credits granted in the law are tied to local content clauses – products and services made in USA. The EU fears that European companies will relocate their business to the USA because of this. Pundits warn of an exodus of ‘green’ technology industries, even a de-industrialization of Europe. The plans for an EU Green Deal could be severely damaged, so they say.

There were several rounds of negotiations (Macron, Scholz, von der Leyen) on this with Biden, and a certain convergence of positions between the EU and the U.S.. However, the biggest point of contention was left out – the EU’s equality with other trading partners. Thus, U.S. subsidies should continue to go only to those companies that locate in the United States. On February 1, 2023, the EU Commission presented its “Green Deal Industrial Plan” as a European response. Among other things, it proposes geopolitical subsidies. These are intended to encourage companies to continue investing within the EU.

However, there will initially be no fresh money for these geopolitical subsidies. Instead, the EU’s state aid regulations are to be weakened. In the future, member states should be allowed to spend large amounts when companies would otherwise invest outside the EU. Under certain conditions, they might provide the same amount of state aid that the company would receive outside the EU. France and Germany could afford these subsidies – but smaller EU countries could not.

In the summer of 2023, the Commission plans to propose setting up a new and possibly loan-financed “sovereignty fund” to mobilize funding for the Green Deal industrial plan. The Commission’s proposals are highly controversial in the EU.

The umbrella organization of the German trade unions (DGB) supports both Biden’s IRA and the EU Commission’s plans. It warns against a subsidy race between the major economic blocs and a mutual poaching of internationally mobile corporations and investors. In the necessary transformation to climate neutrality, international agreements between large economic areas (USA, EU, China, etc.) would be necessary to prevent such a scenario. Such a cooperative approach would be desirable – but is it realistic in the current international context of increased geopolitical rivalry?

The tremor surrounding the U.S. IRA – and the European reaction (e.g. the Critical Raw Materials Act proposed by the EU Commission) – illustrates that the global competition for a share in so-called ‚future technologies‘ has rapidly gained momentum.  Other countries (Canada, China, Japan) are also positioning themselves for the global race for raw materials in that respect. As has always been the case with capitalism and imperialism: we are living in a world of‚dog-eat-dog‘ – not one of international co-operation toward an ecological and social just transition.

 

EU – an independent military world power?

During the Trump era, the EU set itself the goal of becoming an independent economic and military world power on a par with the United States, China and Russia. Macron and von der Leyen announced their intention to create a European Army. The EU has long been an armaments union. Member states pledged to regularly increase their military budgets, invest in defense research and procure more and more modern equipment. The Permanent Structured Cooperation (PESCO) was intended to pool the military capabilities of the participating EU states to a greater extent, and the European Defense Fund (EVF) was intended to stimulate additional investment in the armaments sector. The implementation of these plans has been rather slow.

With Putin’s war against Ukraine, the EU’s situation has changed dramatically.  The EU is blindly following Nato and US President Joe Biden’s strategy – Nato’s nothern enlargement (Finland, Sweden) included. France’s President Macron is also lining up seamlessly when it comes to the Ukraine war – earlier he had criticized Nato as “brain-dead.” The economic war against Russia is being expanded with ever more sanctions packages from the EU and the U.S. Now the EU is drawing up plans to hit third countries with economic penalties if they fail to comply with Western sanctions against Russia or can’t explain a sudden rise in trade in banned goods. Such a mechanism would be a first step toward so-called secondary or extraterritorial sanctions — a practice that is already used by the United States, but so far not by the EU.

However, the implementation of the EU’s sanctions regime against Russia seems to be inefficient. A Swiss study claims that only 9 percent of Western companies had really divested from Russia. On the other hand, the repercussions of that sanctions regime hit the populations of Europe and those of the Global South much more than Russia.

 

Toward a European War Economy?

With the recent Ukrainain drone and missile attacks on Sewastopol, now Crimea has become a war target. There are also undercover sabotage operations by Ukrainian forces blowing up trains and hitting infrastructure deeper into Russian territory. Also, the Russian military hits deep into Ukraine with missile and drone attacks. The war is escalating.

On the part of the EU, massive deliveries of weapons and ammunition to Ukraine are now taking place to enable it to win victory on the battlefield and recapture the territories occupied by Russia. In addition, hundreds of millions are to be spent on accelerating European munitions production. Which means that Brussels is now fully involved in building a war economy, and the EU Commission plans further steps in that direction. Commissioners Thierry Breton (Internal Market) and Josep Borell (the EU High Representative for Foreign Affairs & Security Policy) since some time steadily promoted such a shift. Building a  wartime economy model in the EU – this is not only about Ukraine, but also about Africa.

Apart from such hyperbolic statements from the EU Commission – it is obvious that the EU’s independent ability to control and act is diminishing. It is increasingly acting as a submissive follower of the US empire. Seymour Hersh’s research on the attacks on the Nordstream 1 & 2 gas pipelines – the U.S. and Norway were behind it – is dismissed as a conspiracy theory by an aging investigative journalist.  Alternative hypotheses – the attacks would have been carried out by a sailboat with a crew of six – are now also doubted by Western governments and their mainstream media.

The governments of Sweden, Denmark and Germany are keeping their respective investigative findings under wraps as state secrets. German MP Andrej Hunko (DIE LINKE) commented on this: „Our call for a UN international investigation team is not supported by the ruling parties here. They say we will do our own investigation with our own Attorney General. (…) In general, I would say Germany is a rule-of-law state. But if there are high-level interests, as in some delicate historical situations in Germany as well, we should not always trust these state institutions 100 percent.“

If Hersh’s hypothesis is right: What would a U.S. government have done, if Germany or the EU had sabotaged U.S. energy infrastructure? Concerning the EU and Germany, transatlantic solidarity, the unity of NATO – that is more important now. So keep your mouth shut. Devoutly, they buy US fracked gas, which is four times more expensive and ecologically more damaging than the natural gas purchased from Russia.

 

Further EU Eastern Enlargement will strenghten U.S. dominance over Europe

Ukraine was hastily granted EU candidate status. Chancellor Olaf Scholz and Commission President von der Leyen advocate swiftly admitting the states of the Western Balkans as well as Ukraine, Moldova and Georgia to the EU. Their ‘GreaterEUrope’ project coincides with NATO’s well-known strategy for eastward enlargement. But the U.S. magazine Foreign Policy is already speculating about a federation of Poland with Ukraine: “The Polish-Ukrainian union would become the second largest country in the EU and probably its largest military power, providing a more than sufficient counterweight to the Franco-German tandem.“

In any case, it is clear that the Polish government, together with some Eastern European partners, strictly follows the U.S. in foreign policy and successfully pressured the U.S. with its demands for the delivery of fighter jets to Ukraine. Meanwhile, MiG-29 fighter jets of Soviet design from former GDR stocks are to be delivered to Ukraine by Poland. German Defense Minister Pistorius gave his OK to this. The military escalation spiral in the proxy war between Russia and NATO in Ukraine goes on. Also, Putin’s Army stepped up missile and drone attacks hitting deep into Ukrainian territory.

However, Biden is using this to drive the rest of the EU before him and further weaken the already fragile Franco-German tandem, and to block any attempts toward detente or diplomatic solutions (freezing the miltary conflict, ceasefire – even not such modest goals to avoid more deaths and destruction). Biden’s strategy  is to pit ‘New Europe’ (EU-Eastern Europe) against ‘Old Europe’ (France, Germany, Benelux) – as George W. Bush did before at the occasion of the second Iraq War in 2003. With Ukraine, Moldova and Georgia joining the EU, such forces within an enlarged EU would be strengthened, keen on cementing US dominance over Europe. Scholz’s apparent calculation that Germany could secure its dominance in the EU as a mediator between a weakened France and a rising Poland/Eastern Europe – in my view, this is built on sand.

The U.S. and NATO recently have given the green light for the Ukraine’s Western-sponsored spring offensive against the Russian occupiers. If it is successful, there could also be negotiations, they say. The U.S. has serious doubts about the success of the Ukrainian spring offensive, as also the Pentagon Leaks show.  Kiev itself has even been dampening expectations. By the way, the Pentagon Leaks also show that the U.S. government continues to spy on its western partners – same as with the WikiLeaks/Edward Snowden’s disclosures on the global surveillance operations of NSA, CIA etc. earlier on.

Eric Bonse (the Brussels correspondent of the German daily newspaper ‚taz‘, and author of the blog ‚Lost In EU‘ rightly asks:

Why should Russia go along with this? „Once Ukraine gains the upper hand, it will want to march ahead and seek victory. And if Russia has to fear for Crimea, the war will escalate. Because this region, with the port of Sevastopol, has a similar strategic importance for Russia as Pearl Harbor had for the U.S. in World War II. (…) The fact that the U.S. and NATO held large naval maneuvers here in 2021 and rehearsed the invasion of Crimea was probably an important reason for the Kremlin to go to war. Mind you, the Western maneuvers came before the Russian invasion!“

 

What next: Germans to the front?

In an earlier article of mine, I cited U.S. economist Thomas Palley on his critical evaluation of the EU’s ‚rudderlessness‘ and ‚incoherent geo-politics‘. This is true, but perhaps too mildly put as an analysis, regarding the present conjuncture.

As Eric Bonse recently commented:

„In fact, entirely different scenarios are conceivable. In the event of serious problems in Ukraine, Poland could intervene directly in the war. If Kremlin leader Putin were to threaten nuclear weapons, even a devastating blow by NATO would be conceivable. (…)

The fairy tale of a strong Ukraine forcing Russia to the negotiating table by force of arms is apparently believed only in Germany. It is needed to justify the ever-increasing German involvement in the war…“

In a long article on NLR Sidecar, Wolfgang Streeck (an internationally renowned author) speculated about possible scenarios on how the Ukraine War could end:

„There seems to be a concerted attempt by the United States and NATO to drag Germany into the war, in an increasingly prominent and active capacity. Over the past year, other European countries have learned how to nudge Germany onward so they themselves can remain on the sidelines (the Netherlands) or pursue their interests with a greater prospect of success (Poland and the Baltic states).“

And further on:

„A possible role into which Germany may be growing could be that of a privileged political and military subcontractor of the United States, having been sufficiently humiliated publicly in the Nord Stream and Leopard 2 episodes to understand that to avoid being pushed around by the US, Germany must be ready to lead Europe on its behalf, receiving orders from Washington through Brussels, Brussels being not the EU but NATO, the emerging line of command visualized by the seating order at the Ramstein conferences, with the United States, Ukraine and Germany at the head of the table. In this evolving capacity, Germany would be charged with both scraping together and paying for whatever arms the Ukrainian forces may feel they need for their final victory – at the risk, should that victory fail to materialize, of being found guilty, in lieu of the United States, of incompetence, cowardice, stinginess and, of course, sympathy with the enemy.“

Finally:

„During the Boxer Rebellion in 1900, the European Expeditionary Corps led by Sir Edward Hobart Seymour, Admiral of the Royal Navy, was on its way from Tientsin to Beijing. Close to its destination it met with fierce Chinese resistance. At the moment of greatest need, Admiral Seymour issued to the commander of the German contingent, Kapitän zur See von Usedom, the order, ‘The Germans to the front!’ German military tradition views the episode with pride, as a moment of supreme international recognition for its prowess.“

 

So – Germans to Front? Currently perhaps not such a realistic perspective – but who knows? If one looks at Germany’s support for Ukraine in the war (initially delivering helmets, guns, ‚defensive‘ tanks, Leopard 2 tanks, ok for fighter jets etc.) – an ever escalating spiral … See also Streecks more recent piece on these developments.

Finally – the EU as such is no match in that great global gamble. Its internal conflict lines on geopolitics are very obvious to any rationialist observers. Merkel’s dream of forging a European Union dominated by Germany – it worked perhaps during the Greek crisis, the financial crisis of 2007 -2009 – but now?

 

(*) About the author: Klaus Dräger was a long-time political adviser on employment and social affairs for the left-wing group in the European Parliament (GUE/NGL). Now retired, he lives in Cologne, Germany.

This article is an updated and extended version of a shorter piece for the German quarterly magazine ‚Z‘ (Zeitschrift Marxistische Erneuerung; ZME; Z – Journal for Marxist Renewal). The shorter German text will be published in print by Z 134 (June 2023).

 

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