Author: Guntram Wolff / Publishing Institution: German Council on Foreign Relations (DGAP)

Author:: András Rácz, Ole Spillner, and Guntram Wolff
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: Sanctions are a strong signal of Western resolve to oppose Russia’s war against Ukraine and have significantly weakened its ability to wage war. But Russia is adapting, turning its economy into a war economy, ramping up military production, and adjusting to sanctions. This Policy Brief looks at Russia’s economic adjustment with a focus on the shifting of resources to war purposes and the effect of sanctions on military production.
Topic:: Sanctions, Economy, Military, and Russia-Ukraine War
Political Geography:: Russia, Europe, and Ukraine

Author:: Guntram Wolff, Benjamin Hilgenstock, and Elina Ribakova
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: Financial sanctions are key in enforcing restrictions on Russian energy exports – in particular the G7/EU oil price cap regime –, due to financial institutions’ critical role in cross-border transactions. While the energy sanctions regime is having an impact on export earnings and budget revenues, evidence for potentially widespread violations is also emerging. Moreover, favorable external dynamics have allowed Russia to accumulate substantial assets abroad – “shadow reserves” –, which need to be kept out of reach of the regime.
Topic:: Governance, Sanctions, European Union, International Order, Energy, Geoeconomics, and Russia-Ukraine War
Political Geography:: Russia and Eurasia

Author:: Ole Spillner and Guntram Wolff
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: Major Western leaders have been calling for “de-risking” from China, rather than “decoupling.” But what exactly de-risking means and how it differs from decoupling, remains unclear. It is ultimately firms, not governments, driving trade and investment relations. But firms cannot account for unidentified risks by themselves. National security risks are for governments to define. Complex supply chain externalities might entail risks to production that are also difficult for firms to account for. Furthermore, firms may bet that governments will rescue them if a worst-case scenario happens, effectively socializing risks. In the EU, Germany is particularly exposed to China risk in terms of security, macroeconomic, and political exposure.
Topic:: Security, European Union, Macroeconomics, Supply Chains, and Geoeconomics
Political Geography:: China, Europe, and Asia

Author:: Guntram Wolff, Alexandra Gritz, Stefan Meister, and Milan Nič
Publication Date:: 01-2023
Content Type:: Special Report
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: The stagnating EU accession process needs political will and procedural changes allowing eastern candidates to advance. In the meantime, they should be more supported to use the full potential of existing opportunities for gradual economic and sectoral integration with the EU. An upgraded Eastern Partnership needs a comprehensive security dimension linking resilience, connectivity, and defense policy, as well as cooperation in the area of the Common Security and Defence Policy. The protracted regional conflicts (in Moldova and the South Caucasus) require a more active EU engagement as existing OSCE formats continue to be blocked, and Russia’s role and military presence weaken. New openings for conflict resolution mean higher demand for the EU’s diplomatic, monitoring, and peacekeeping capacities. A new eastern Neighborhood Policy should be designed for the wider region, connecting the Black Sea and the South Caucasus with Central Asia and thus creating viable alternatives to the competing geoeconomic and governance “offers” of China, Russia, and Turkey.
Topic:: Foreign Policy, Governance, European Union, International Order, and Russia-Ukraine War
Political Geography:: Russia, Europe, Central Asia, Ukraine, and Eastern Europe

Author:: Claudia Schmucker and Guntram Wolff
Publication Date:: 11-2022
Content Type:: Policy Brief
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: As the German Chancellor heads to Beijing – the first visit by a G7 leader since the pandemic began, Germany and the EU must reevaluate their approach to China, especially after the recent Communist Party Congress further cemented a system of uncontested authoritarian power. European unity is critical in dealing with China. Russia’s war in Ukraine has exposed Germany’s energy dependency and many Western companies have had to leave Russia. To be prepared for a possible escalation of geopolitical tensions with China, Germany needs to draw lessons and review critical dependencies and corporate risks. Better corporate risk management, a diversified trade policy, and a targeted industrial policy are necessary to manage economic risks.
Topic:: Bilateral Relations, European Union, Trade, and Geoeconomics
Political Geography:: China, Europe, and Asia

Author:: Guntram Wolff and Alexandra Gritz
Publication Date:: 12-2022
Content Type:: Policy Brief
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: Russia’s weaponization of gas supplies caused a shock to the energy security of Central and Eastern Europe. Countries responded by increasing alternative gas supplies and LNG import capacity. Gas flows shifted from the east-west axis to west-east and north-south axes. In the short term, the usage of coal is rising; in the longer term, renewable and nuclear energy. Mitigating the effects of this shock requires the EU to prioritize policies that foster the integrity and security of its energy market.
Topic:: Security, Natural Resources, European Union, Gas, Energy, and Russia-Ukraine War
Political Geography:: Europe, Eastern Europe, Germany, and Central Europe

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