Money talks

The EU should respond to the Russian threat to Ukraine by playing its strongest card – economic influence, writes Piotr Buras

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Confronted with the stand-off between Ukraine and Russia, the European Union is failing. The Russian military build-up on Ukraine’s border and the Kremlin’s political blackmail of NATO constitute the most dangerous security crisis in Europe this century. The European security architecture is in tatters. Institutional arrangements that have been vital to the continent in the post-cold war era – such as the Intermediate-Range Nuclear Forces Treaty, other arms-control agreements, and the NATO-Russia Founding Act – now exist only on paper. And the threat of an all-out Russian assault on a country associated with the EU has never been more real.

This is, therefore, a defining moment for Europe – even if European countries are not the key actors in attempts to reduce tensions between Ukraine and Russia. Due to their own failures, weaknesses, and divisions, the EU and its member states are not seen by Russia as equal (and, accordingly, desired) partners in discussions of issues that are crucial to their interests. On arms control, military arrangements, and other security issues, the EU has almost nothing to bring to the table. So, Russia can simply ignore it.

What, then, can the EU then do to defend its interests as best it can? Close cooperation with the United States is part of the answer, as is an effort to unify member states against the threat. But that would not be enough in itself. Most importantly, the EU should make use of its main strength – economic influence – and prepare to do so strategically. There is no other way for the union to persuade the great powers struggling over Europe’s future that it is a force to be reckoned with.

It is unforgivable that the EU has failed to prepare a robust package of sanctions to impose on Russia if the country invades Ukraine again. The US administration pushed the EU to accelerate its work on such sanctions in December and January – to little or no avail. With the flurry of international talks last week having produced no breakthrough, Russia is seemingly preparing for further aggression against Ukraine. But the EU is still calibrating its potential response. While the bloc will discuss the issue at a meeting of the Foreign Affairs Council on 24 January, this is unlikely to result in a final decision on how to address the threat.

Meanwhile, as reported by Handelsblatt, the US and the EU have ruled out the possibility of cutting Russia off from the SWIFT financial messaging system. Moreover, there are open divisions within Germany’s ruling coalition over whether and how to leverage the Nord Stream 2 pipeline to deter the Kremlin – demonstrating that there is little prospect that this will ever happen. Admittedly, German Chancellor Olaf Scholz emphasised during a press conference with NATO Secretary-General Jens Stoltenberg on 18 January that “all this [Nord Stream 2 and SWIFT] will have to be discussed if there is a military intervention against Ukraine”. But Scholz’s striking absence from the debate in preceding weeks and the fierce disagreements over Russia within his Social Democratic Party raise doubts about the firmness and consistency of Berlin’s approach.
On arms control, military arrangements, and other security issues, the EU has almost nothing to bring to the table. So, Russia can simply ignore it.

Many European diplomats and decision-makers believe that it is either impossible or unreasonable to plan sanctions based on contingencies. They argue that, to adequately target sanctions, one should only begin to design the measures once it is clear how and to what extent the adversary has breached its international commitments. If the EU was to use the threat of sanctions as a deterrent, another argument goes, such measures would lose the element of surprise. These are no more than bad excuses for inaction. For now, the EU is only communicating what it would not do in response to Russian aggression. Therefore, its repeated warnings that another invasion of Ukraine would come with massive costs for Russia are not a credible deterrent.

The EU has not only failed to confront Moscow with substantive measures it would apply in response to a Russian attack. It has also neglected to engage in the internal preparations that would allow it to find a consensus on the matter. In June 2021, the European Council tasked the European External Action Service (EEAS) with creating a package of potential restrictive measures on Russia. Six months later, there is no EEAS paper on the subject – and little discussion of such measures among EU member states. According to diplomatic sources, only Germany and Poland came up with concrete proposals in a recent meeting with the EEAS, while no other large EU country put forward any ideas.

This is a devastating indictment of European diplomacy at a time when it faces its most serious test. The EU’s inability to ready the single most important tool of deterrence and pressure at its disposal stands in a stark contrast to its complaints that the US and Russia are going over Europeans’ heads in their discussions of Europe’s security architecture. There is talk of opening a direct communication channel between EU High Representative Josep Borrell and Russian Foreign Minister Sergei Lavrov. But what would they discuss? The proposal sounds more like it is designed to soothe the EU’s anguished soul than to resolve the crisis. And the union’s show of discontent about being side-lined in the US-Russia discussions only provided the Kremlin with another opportunity to publicly mock it. As Lavrov sarcastically noted, this “is a question for Mr Borrell and EU members, and as for the possibility of a separate dialogue with the EU that would not involve the US and NATO, the US needs to be asked if it is willing to let [the EU] take any independent action”.

The geopolitical crisis in Europe’s east is the worst possible moment for the EU to pretend to exercise strategic autonomy without backing this up with meaningful action and strong leadership. The new German coalition is divided on Russia, French President Emmanuel Macron is hesitant to engage in the debate, Poland is politically discredited within the EU, and Borrell is sleepwalking. There is a real risk that the EU will not address the striking deficits in its response before it is too late – and Russia alone will set the deadline for doing so. What should have been another opportunity for the EU to become more mature and sovereign could become the opposite: a final blow to the idea the union can develop into an independent global actor. And, for all Europeans, this is the worst possible moment to be forced to come to this conclusion.

Republished by kind permission of the European Council on Foreign Relations. Read the original article here: https://ecfr.eu/article/the-eus-unforgivable-failure/

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