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1. Between God and the Sugar Dates: Lessons for a "Geopolitical" EU from the US–Iran Crisis

Author:
Tommaso Emiliani
Publication Date:
04-2020
Content Type:
Commentary and Analysis
Institution:
Istituto Affari Internazionali
Abstract:
The killing of top Iranian General Qasem Soleimani by a US drone strike on 3 January 2020, followed by the Iranian retaliation on US military bases in Iraq, left many Europeans wondering how – if at all – the European Union can foster de-escalation in the Middle East. The EU is presently stuck between a deepening strategic rift with its US ally and its inability to advance its independent interests and policies vis-à-vis Iran. It is now clear that Europe cannot protect its relations with Washington while also salvaging the Joint Comprehensive Plan of Action (JCPOA), or Iranian nuclear deal. Borrowing from an old Persian proverb, Europe cannot have both God and the sugar dates.
Topic:
Sanctions, Military Affairs, Trade, Transatlantic Relations, and Coronavirus
Political Geography:
Europe, Iran, Middle East, United States of America, European Union, and Gulf Nations

2. The Impact of Sanctions Imposed by the European Union against Iran on their Bilateral Trade: General versus Targeted Sanctions

Author:
Mahdi Ghodsi and Hüseyin Karamelikli
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Economic sanctions are intensively used by international institutions to enforce political objectives. Since 2006 the EU has been implementing general sanctions against the whole economy of Iran, affecting their trade relations. Since 2007, and following the imposition of sanctions by the UN Security Council, the EU has also implemented smart sanctions targeting Iranian entities and natural persons associated with its military activities. In a non-linear autoregressive distributed lag (NARDL), this paper investigates the impact of general and targeted EU sanctions against Iran on quarterly bilateral trade values between the 19 members of the euro area (EA19) and Iran between the first quarter of 1999 and the fourth quarter of 2018. The results indicate that general sanctions have strongly hampered trade flows between the two trading partners. The impact of general sanctions on the total imports of the EA19 from Iran is more than four times stronger than on the total exports of the EA19 to Iran. Moreover, the EU’s general sanctions have hampered trade in almost all sectors, except for the primary sectors. Furthermore, our study finds that the impact of smart sanctions targeting Iranian entities and natural persons is much smaller than the impact of general sanctions on total trade values and the trade values of many sectors. Smart sanctions affect the exports of most sectors from the EA19 to Iran, while they are statistically insignificant for the imports of many sectors from Iran. Thus, this paper provides evidence on the motivations behind smart sanctions, which target specific individuals and entities rather than the whole economy, unlike general sanctions, which have a negative impact on ordinary people.
Topic:
United Nations, Sanctions, Trade, and Trade Policy
Political Geography:
Europe, Iran, United Nations, and European Union

3. FDI another day: Russian reliance on European investment

Author:
Marta Dominguez-Jimenez and Niclas Poitiers
Publication Date:
02-2020
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Most foreign direct investment into Russia originates in the European Union: European investors own between 55 percent and 75 percent of Russian FDI stock. This points to a Russian dependence on European investment, making the EU paramount for Russian medium-term growth. Even if we consider ‘phantom’ FDI that transits through Europe, the EU remains the primary investor in Russia. Most phantom FDI into Russia is believed to originate from Russia itself and thus is by construction not foreign.
Topic:
Economics, Energy Policy, Foreign Direct Investment, Governance, Sanctions, European Union, and Global Political Economy
Political Geography:
Russia and Europe

4. Society max: How Europe can help Syrians survive Assad and coronavirus

Author:
Julien Barnes-Dacey
Publication Date:
04-2020
Content Type:
Policy Brief
Institution:
European Council On Foreign Relations
Abstract:
After nine years of conflict, the US is mounting a ‘maximum pressure’ campaign against Syria, seeking the regime’s demise. But, with Assad having effectively won the war, he is unlikely to succumb to US economic pressure. Assad bears responsibility for the country’s freefall but this strategy will further accelerate societal collapse, especially as coronavirus looms, and will not deliver a transition. European governments should pivot to a longer-term strategy focused on protecting those societal forces that are still standing and that can help salvage a better future aligned with European interests. This should include increased – and cautious – support to them within government-controlled Syria. The unpredictability of the Trump administration means persuading the US down this track is not impossible – Europeans should seek to influence Washington to widen space for societal support.
Topic:
Sanctions, Conflict, Syrian War, Coronavirus, COVID-19, and Bashar al-Assad
Political Geography:
Europe, Middle East, and Syria

5. EU sanctions and Brexit: Losing the hard edge of European foreign policy?

Author:
Juha Jokela and Ilari Aula
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
The EU needs to assume more responsibility in defending its interests and security. Brexit will constitute an additional challenge for the EU in this respect, and has led to calls to strengthen the efficiency of the the Common Foreign and Security Policy, including EU sanctions, which currently form one of the toughest and most increasingly used tools in the EU’s foreign policy toolbox. The UK has been the most active and influential member state in formulating the EU’s sanctions policy. The EU could largely replace the technical expertise provided by the UK, yet the level of ambition of the EU’s sanctions policy is likely to decrease. Even though the UK has taken measures to maintain the sanctions regimes it agreed to as an EU member state, an independent UK sanctions policy could result in divergence. The envisaged coordination mechanisms between EU and UK sanctions policies can mitigate some of the negative implications of Brexit, but they cannot replace the UK’s EU membership.
Topic:
Regional Cooperation, Sanctions, European Union, and Brexit
Political Geography:
United Kingdom and Europe

6. Sharpening EU sanctions policy for a geopolitical era

Author:
Niklas Helwig
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
The European Union (EU) increasingly uses sanctions in order to respond to breaches of international norms and adverse security developments in its neighbourhood and beyond. This study provides a comprehensive analysis of the current state of EU sanctions and discusses options on how to maintain them as an effective tool. The study identifies the withdrawal of the UK as one of main architects of the instrument and an increasingly unilateral and unpredictable US sanctions policy as key challenges. In addition, the EU’s machinery for planning, deciding, implementing and enforcing sanctions exposes vulnerabilities in an increasingly geopolitical environment. The current shifts in international relations constitute an opportunity to clarify the strategic nature of EU sanctions and to fine-tune the sanctions machinery. EU unity and a joint diplomatic approach to international crises are vital for the success of the policy tool. Consequently, the efforts to improve the instrument need to ensure member states’ ownership of EU sanctions policy. Our economic analysis of Russia sanctions and countermeasures reveals rather minor macroeconomic repercussions for the EU and Finnish economy. The efforts to sharpen EU sanctions policy is important for Finland as one of the smaller and export oriented countries in the EU given the increasingly turbulent world marked by geopolitical competition. This publication is final report of a research project conducted by FIIA and ETLA entitled “Development of EU’s Sanctions Policy: Political and economic implications for Finland”. The project is part of the implementation of the Government Plan for Analysis, Assessment and Research for 2019
Topic:
Diplomacy, Regional Cooperation, Sanctions, and European Union
Political Geography:
Europe

7. Germany-Turkey Relations: It could be worse

Author:
Ekrem Eddy Güzeldere
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
Germany at the end of 2020 finds itself in an awkward position. It is hailed by President Erdogan as one of the “reasonable countries within the EU” and by Ibrahim Kalin as having “played a remarkably positive role.” Germany has “gained” this esteem because of its mediation efforts between Greece and Turkey concerning the tensions in the East Med and for avoiding harsher EU sanctions. However, concerning the clash between France and Turkey over Islam(ism) and freedom of expression, Germany cannot mediate. Similar confrontations will also occupy Germany for the years to come and the German-Turks, now almost 3 million, will be right in the centre of this confrontation.
Topic:
Foreign Policy, Bilateral Relations, Sanctions, and European Union
Political Geography:
Europe, Turkey, Germany, and Mediterranean

8. Transatlantic Sanctions Policy : From the 1982 Soviet Gas Pipeline Episode to Today

Author:
Richard Nephew
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
Though many commentators have suggested that the Trump administration’s approach with respect to sanctions threats against Europe is “unprecedented,” the relative comity in US-European sanctions policymaking in recent years may be the aberration. The United States and Europe have often disagreed about whether, when, and how to impose sanctions against even common adversaries and in order to resolve mutually recognized problems. One of the most serious examples of this occurred in 1982 when the United States and its European allies broke sharply over the US decision to impose sanctions on the Soviet Union over the crackdown on the Solidarity Movement in Poland. The crisis that emerged tested the NATO Alliance, European governments, and the Reagan administration. This paper reviews the 1982 example and then sets some lessons from it against the current US-European relationship. It offers an assessment not only of the changing political, economic, and social factors that have contributed to greater compliance with US sanctions dictates on the part of Europe over the last few years, but also the relatively brittle nature of this cooperation. It underscores that, though the United States may be in a relatively predominant economic position at present, this situation may not and likely will not persist indefinitely. From this perspective, it concludes with three recommendations for how to modify current US sanctions practice in order to help manage partner concerns and avoid future crises. Adopting a process more akin to the Federal Register notice procedure for new sanctions programs. There is a yawning need for more consultation in advance of US sanctions decisions that could have major market moving and alliance shaking potential. It is not necessary, nor would it be prudent, to have a process that required public scrutiny of individual or entity asset freeze scenarios, but for other, more broad sanctions initiatives, it would help to avoid unintended consequences and ensure a more comprehensive debate. Exceptions could also be made to this rule in the event of a legitimate emergency. Establishing an independent commission to evaluate US sanctions policies and challenges. Congress should set up an independent, bipartisan commission to examine the issue of US sanctions policy now and for the next twenty-five years. Its assignment would be to evaluate how sanctions have been used in the recent past, the international operating environment for sanctions now, and the dimensions of the sanctions policy challenge in the future. Improving congressional oversight of the sanctions process. Congress should also require evaluation reports for individual sanctions regimes as a standard part of the executive branch’s use of the International Emergency Economic Powers Act (IEEPA). Of course, similar requirements ought to be considered a standard part of congressionally mandated sanctions as well.
Topic:
Foreign Policy, Sanctions, and Global Political Economy
Political Geography:
United States and Europe

9. Hungarian-Russian Economic Relations

Author:
Veronika Jóźwiak
Publication Date:
07-2019
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
Hungarian-Russian economic relations are based on the energy industry. Hungary’s efforts to build closer political relations with Russia after 2010 did not result in a marked increase in bilateral trade, investment, or greater Russian influence outside the energy sector. EU economic sanctions imposed on Russia and the introduction of counter-sanctions in 2014 caused a significant drop in Hungarian exports to Russia. However, this has not resulted in substantial losses to the Hungarian economy.
Topic:
Energy Policy, Bilateral Relations, Sanctions, European Union, and Trade
Political Geography:
Russia, Europe, Eurasia, and Hungary

10. The Sanctions Policy of the European Union: Multilateral Ambitions Versus Power Politics

Author:
Éric-André Martin
Publication Date:
10-2019
Content Type:
Special Report
Institution:
Institut français des relations internationales (IFRI)
Abstract:
Restrictive measures are a major instrument of the European Union (EU)’s external action, which has emerged as one of the world’s leading sanctions emitters. The EU has thus leveraged the size of its market and its economic and financial clout (trade relations, aid policy and bilateral agreements). Through its significant activity in the field of sanctions, the EU has been able to reinforce its image as a normative power and a global player, contributing actively to international peace and stability. The EU’s restrictive measures were adopted in a favorable international context, marked by the legitimacy that was conferred, most of the time, by United Nations resolutions, and by close coordination with the United States (US). This privileged period culminated with the management of the Iranian crisis and the conclusion of the 2015 Vienna Agreement. More recently, however, sanctions have tended to lose their function as an instrument contributing to shape a shared vision of the world order, and to become what they are in essence, namely an instrument of statecraft dedicated to the protection of States’ national interests. This trend is illustrated on the one hand by the affirmation of a unilateral United States policy on sanctions, which tends to extend the scope of coercion to third parties, including European entities, and on the other hand, by the increasing use of sanctions by powers like China and Russia as a geo-economic tool.
Topic:
Sovereignty, Power Politics, Sanctions, and Multilateralism
Political Geography:
China, Europe, Asia, and European Union