The European Union's new challenges

МОСКВА, 03 августа 2021, Институт РУССТРАТ.

In the almost thirty years of its existence (the Maastricht Treaty on the creation of the EU was concluded on February 7, 1992), the European Union has not solved any of its problems, but it has generated new ones in addition to the old ones. This is a complex of institutional, structural, financial, economic, and socio-political problems.

The standard of living in all European countries has become lower than it was before the introduction of the euro, the solidarity of society has decreased due to the appearance of Eurosceptics and their political parties, the burden on the budgets of the leading countries has become greater, the conflict between the Euro elite and the population, realizing that there is more bureaucracy and coercion, but less of the former freedoms and prosperity, has become stronger.

The main claim of the creators of the EU was the desire to play a decisive role in creating the architecture of European security, or rather, in creating a regional European order, where Europe would become a subject on a par with the United States in the East-West confrontation. This ideology of the EU was established in the era of the existence of the USSR, and therefore ideological and military aspects prevailed over trade and economic ones.

The collapse of the USSR removed ideological motives, increasing the emphasis on economic motivations, but the power vacuum to the east of the Oder and Vistula automatically pushed the EU to expand in this direction, bearing NATO on its shoulders. The Eastern European countries of the former Eastern bloc and the Baltic states were hastily drawn into the EU structure (until Russia recovered and took revenge), the process of initiating the inclusion in NATO and association with the EU of some former Soviet republics of key geopolitical importance for Russia was launched.

However, the limitrophes turned out to be focused on the real center of power – the United States, and began to play the role of a trojan horse and a fifth column in the EU, with the help of which the United States and Britain restrained the countries of the old “middle Europe” (Mitteleuropa, Middle Europe) – primarily euroleaders Germany and France.

The EU has received an insoluble conflict of interests, which has created its permanent crisis, primarily a crisis of institutions, where there is an acute struggle between old and new Europeans for the number of seats in the European Parliament. Germany until 2009 had the maximum number of votes in the European Parliament  – 99, reducing it to 96 since 2014, and France increased from 74 to 79. The departure of the UK (73 deputies) from 2020 increased the share of the first EU 3 (Germany, France, Italy) while reducing the number of deputies from 751 to 705.

The institutional crisis has haunted the EU throughout its history and manifests itself in emergency situations, such as the migration crisis, the COVID-19 pandemic, the difference in the income level of the population of the EU countries, the nationalism of national minorities (Basques, Scots, Irish, etc.), and problems of equality in countries (Estonia, Latvia, Lithuania, Cyprus, Slovakia, Hungary). Market mechanisms in the EU do not work fully, and they have to be replaced by dirigisme, which causes lobbying and acute conflicts in the preparation of the budget.

Everyone remembers the sharp dispute between the Federal Constitutional Court of Germany and the European Central Bank, which decided in May 2020 to buy government bonds of EU countries. The German court ignored the ECB’s decision as a higher instance, for which Berlin risked running into significant fines from the European Commission. It was pointed out that EU laws take precedence over national ones. This was the first such incident in the entire existence of the EU.

The euro as a currency against the dollar showed instability – in 2010, its exchange rate fell by 15%, and Greece found itself on the verge of default, which it could avoid only with the help of EU subsidies. Europe has become the center of generation of the second wave of the global crisis due to the mismatch of the structure of the euro zone countries’ economy.

Southern and Eastern Europe is a zone of uncompetitive and backward economics, low quality of education and competencies of the population, backwardness of the research development sphere and the presence of entire enclaves with an archaic economic structure that has a self-reproducible character and is excluded from European cooperation due to falling out of the “knowledge economy”.

The financial environment of the euro zone  distinguishes itself by the fact that the same monetary policy measures give different effects in countries that differ from each other by type of their economy. In fact, countries with different types of economy are integrated into the EU, and if the devaluation of the euro increases competitiveness in the West, in the South and East it destroys it.

In backward regions, it is impossible to reduce the cost of production at the expense of reducing wages, which, due to subsidies, is growing faster than labour productivity. The EU budget is unable to maintain the same standards in the social sphere, and the EU administrative apparatus is prone to low efficiency due to a combination of bureaucracy, lobbying and populism.

In addition to structural and institutional reasons, the crisis in the euro zone is generated by fiscal policy, the principles of which immediately began to be violated in the field of budget discipline. The budget deficit has always been higher than planned, and after the UK left the EU, all budget indicators remained a subject of controversy for a long time.

At the same time, at the initiative of Germany and France, who are striving to preserve the political unity of the EU and their leading role in it, a reform was carried out in 2005, lifting sanctions for violations of the rules agreed in the Maastricht Treaty.

The problem is also reinforced by the fact that not all EU members are members of the euro zone – these are Bulgaria, Hungary, Poland, Romania, Denmark, Croatia, the Czech Republic, and Sweden. The problem of covering deficits through borrowing is turning into a permanent political problem in the EU.

The Nord Stream 1 and 2 projects revealed an acute competition between the interests of Poland and Germany, caused by the discrepancy between their own national projects. Poland is ready to actively promote the interests of the United States in Europe, believing that they will ensure the alignment of its position with Germany’s.

At the same time, Poland remains a sphere of overlapping and competing interests of the United States and Great Britain. Trying to take advantage of this, but maintaining an anti-German vector, the Polish project of the Polish-Lithuanian Commonwealth 2.0, created with the support of the United States and Great Britain, does not coincide with the plans of France and Germany to develop their imperial projects.  

France is increasing its influence in Africa, hoping to use the accumulated resources in Europe, and Germany has difficult and contradictory relations with Russia, which, on the one hand, it is interested to restrain but with which, on the other hand, it wants to have special economic ties, based on which it plans to strengthen its position in Europe. Britain left the EU in order to get rid of the burden of common European rules and to influence European politics with a free hand.  

Problem statement

The EU is going through a stage of progressive internal split into opposing blocs (Germany and France against Poland and the Baltic States).

This manifested itself the most strongly in the recent collapse of the initiative of Germany and France to urgently hold a meeting between the heads of the EU states and Russia, put forward at the EU summit on June 24-25 and blocked by Poland and the Baltic states, who are creating in the EU a situation of confrontation with Russia and an internal controlled conflict, ideal for the United States and Great Britain.

The contradictions between the so-called Young Europeans and the EU leaders manifested themselves already in 2003, when the Eastern European satellites of the United States, which were still joining the EU, supported Washington’s plans to invade Iraq, which Germany and France strongly opposed. Since then, the conflict of interests of the old and new Europe has grown stronger and has reached the ability to block the EU’s communications with Russia and China at the initiative of the United States, thereby firmly attaching Europe to the foreign policy of Washington and London.

The United States, using the bogey of the Russian threat, was able to block the economic development of Europe, using the thesis of bloc solidarity and the predominance of political interests over economic ones. Thus, Europe found itself revolving around the US economy and having lost alternative opportunities for economic ties with other economic centers. The EU has lost the ability to conduct its own policy and has become a geopolitical player that has lost its subjectivity.

The degradation of the EU’s subjectivity turns it into an imitator of NATO, forcing it to use scenarios involving force in relations with Russia. However, the EU’s policy from a position of strength against Russia does not work, which forces the EU to turn into an appendage of the United States and obey the requirements of discipline determined not in Brussels, but in Washington.

The problem is that the interests of NATO are not identical to the interests of the EU. NATO is an institution of projecting US power on Europe, but the EU is an attempt to protect itself from this American power and gain its own subjectivity. The EU, which has become a conductor of US economic interests in Europe, is doomed to stagnation and degradation both in the economy and in politics, which leads to the accumulation of conflict potential both in the countries of Western Europe and in relations between the West and East of Europe, and ultimately the growth of centrifugal trends.

There is a situation when a conglomerate of weak, but dependent on the United States, new EU members, twists the hands of the old EU members, cutting off their economic ties, but demanding subsidies and submission to the will of the United States. Such a policy will meet the patient attitude of Berlin and Paris for some time, but their conflict with Warsaw will grow with an increase inq Poland’s ambitions, supported by the United States and Great Britain.

The conflict between Germany and Poland over the Nord Stream 2 project has created a new reality in the EU, drawing new lines of internal confrontation and striving for a different fate within the same union. Poland is betting on an Eastern European expansion based on American LNG and Norwegian pipeline gas. According to the US plans, Poland should put a limit to Germany’s ambitions in Europe.

Germany, squeezed by the demands of bloc solidarity based on the Russian threat, must finance Poland through the EU mechanisms until it reaches the ability to become another European geopolitical center. A limit is being put on expansion of Germany through the ambitions of France and Poland, fueled by the ambitions of Great Britain.

Germany and France are historical rivals in the European political arena, and this rivalry has not gone away. However, both countries understand that at this historical period of time they are dependent on each other and alone will not cope with the consolidation of the European security architecture, built not in the interests of the United States and Great Britain, but in their own interests.

At the same time, they need dialogue with Russia, which implies a willingness to make concessions and compromises to a certain extent, taking into account Russian interests.

It is precisely this willingness of Germany and France to make concessions to Russia that is unacceptable for Eastern Europe, since these concessions and compromises will relate to their fate and status. The zone of compromise between Russia and Western Europe will be Eastern Europe. This displaces the United States and Great Britain from Europe, and therefore they use the existing economic and military-political levers of influence on Germany and France in order to prevent their evolution towards a compromise with Russia. Any of such compromises will be carried out at the expense of the interests of the United States, Britain and Poland.

However, a completed Nord Stream 2 gas pipeline project drives a wedge into the relations between allies. Germany and France, continuing their diplomatic maneuvers, are retreating under the pressure of the United States and its Eastern European puppets. But as the opportunities for strengthening the economy based on cheap Russian pipeline gas are explored, Germany and France will gain the ability to pursue a more independent policy. And here they will have a difficult choice of the degree of balance between independence and dependence on institutional and bloc restrictions.

Such a situation in Germany and France will become a field of acute rivalry between the United States, Britain and Russia. This complicates the situation of the Franco-German alliance, but also gives it certain opportunities. It is obvious that Russia will strive for bilateral contacts with the EU countries, creating temptations for the old European elites in terms of strengthening their capabilities. The US’ tactics will be based on preventing the euro-satellites from going beyond the bloc framework and standards and on destroying the Russian game built on bilateral contact.

At the same time, Russia and Germany take into account that the interests of the United States and Great Britain in Europe are the relations of rivals. They are both not interested in strengthening Germany, France and Russia, but they are not interested in strengthening each other either. It is profitable for Britain to increase the conflict between Germany and Poland and the United States, when this conflict weakens Germany and the United States to a greater extent and Poland to a lesser extent.

It is into this gap that the UK can squeeze itself with its political game, expanding the space of European maneouver for itself. Without the help of Britain, Poland will not be able to achieve the desired degree of support from the United States. But if by maintaining the degree of anti-Russian consolidation Britain will reduce the capabilities of Germany and France and direct their internal political processes towards the fight against Eurosceptics, Poland and the United States will need Britain’s help more than they will be interested in isolating it. The problem of Britain’s confrontation on the European track is becoming for Russia one of the key factors of its policy towards the EU.

Conclusions

1. A new center of power is being formed in the EU space, where the countries of Eastern Europe and the Baltic states are opposed by the countries of Western Europe.

2. Both New and Old Europe are locked in on the United States and consider Russia’s influence and ability to expand to be the main threat.

3. The Russian threat factor is artificially hypertrophied and is used by the United States and Britain to subordinate Old Europe to their interests.

4. This hypertrophy is recognised by Western European politicians, but the principle of the European consensus allows the US satellites to completely block any political decisions that are beneficial to Old Europe.

5. Such a situation entails the preservation of Western Europe’s economic dependence on the United States and a further deterioration of its economic situation with the prospect of political instability and the loss of the positions of the old European elites in favour of the new ones, constructed by the United States and aimed at completely depriving Old Europe of the remnants of subjectivity left to it since the post-war period.

6. The presentation of claims to influence from New Europe will be met with irritation in Old Europe, and the space of conflict between them will expand, despite the declared unity in the confrontation with Russia. There are three areas of confrontation in the EU: ideology (Hungary passes laws against LGBT people, Old Europeans are for sanctions against Hungary, Young Europeans are against them), relations with Russia (Old Europeans are for reconciliation, Young Europeans are for sanctions) and the distribution of budget money (750 billion euros will be allocated to overcome the consequences of the pandemic only to those countries where “green energy” is progressing, i.e. Old Europe).

7. The general state of the EU is characterised by a decrease in its subjectivity, accompanied by an aggravation of the internal political struggle in Germany, France and Italy.

8. The confrontational paradigm of the EU closes the prospect of joining NATO for Ukraine, since the status of a space of local conflict with Russia with full external control of Ukraine completely suits the West.

9. The new challenges of the EU do not have mechanisms for solving old and new conflicts, driving them deeper. The structure of the EU (a combination of economically strong and weak members) and the management system generated by it (support for the weak one at the expense of the strong one) generates systemic weakness and generates separatism, as well as the desire to solve problems by self isolating from neighbours. This aspiration will certainly be used by all applicants for global influence, for whom the European factor remains a decisive resource of geopolitical influence that determines their future historical fate.

Институт международных политических и экономических стратегий Русстрат

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