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21. “NATO@70”: still adapting after all these years

Author:
Julian Lindley-French
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
NATO Defense College
Abstract:
In April 1949, at the signing of the foundation doc- ument of the North Atlantic Treaty Organisation, the Treaty of Washington, the Western Allies had twelve active divisions. They believed, erroneously as it turned out, that Stalin’s Red Army had 175 di- visions on the other side of the River Elbe which marked the then inner-German border. At the time the West consoled itself with the monopoly that the United States had on atomic weaponry. Such com- placency ended on 29 August 1949 with a nuclear shock when the Soviet Union tested its first atomic device. The new NATO was also tied inextricably to Europe’s then recent past. Soon after the Treaty of Washington was signed the French newspaper Le Monde suggested that the creation of NATO repre- sent a big step down the road to German rearma- ment: “The rearmament of Germany is present in the Atlantic Pact as the seed in the egg”.1 April 1949 thus encapsulated both the ambition and the tensions that were to mark the three strands of post-World War Two European security and defence: transatlantic relations, the German Question and the road to European Union and how to both engage Russia and defend against it.
Topic:
NATO, Diplomacy, Regional Cooperation, and European Union
Political Geography:
Russia, Europe, North Atlantic, Germany, and North America

22. DONBAS PEACE TALKS 2.0: Russia’s Objectives and Ukraine’s Limits

Author:
Cristina Gherasimov and András Rácz
Publication Date:
10-2019
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
On October 1, 2019, President Volodymyr Zelenskiy agreed to meet Russia’s conditions for holding peace talks already this autumn. Moscow’s readiness to play, however, should not be mistaken for willingness to solve the conflict. So far, the Kremlin has not made any concessions in Eastern Ukraine that would be irreversible; consequently, it seems to only be testing Zelenskiy’s limits. Both Zelenskiy and the EU need to be cautious not to reward easy-to-reverse steps with major, strategic benefits.
Topic:
Diplomacy, European Union, Conflict, Negotiation, and Peace
Political Geography:
Russia, Europe, Eurasia, and Ukraine

23. Both Russian and American Publics Sense a Transatlantic Rift

Author:
Dina Smeltz and Lily Wojtowicz
Publication Date:
03-2019
Content Type:
Special Report
Institution:
Chicago Council on Global Affairs
Abstract:
Building over the last few years, disputes between the United States and Europe over trade, climate change, and nuclear weapons were on full display at the annual Munich Security Conference last month. Russian leaders have tried to exploit these strains between the United States and its allies. In Munich, Foreign Minister Sergey Lavrov of Russia suggested that the European Union and Russia build a “shared European home.”[1] Sidelining the United States through deepened ties with Europe has long been a strategy of the Kremlin to weaken the West’s united front against Russia’s regional and international aggression.[2] Findings from a new US-Russia binational survey, conducted by the Chicago Council on Global Affairs and the Levada Analytical Center, reveal that publics in both countries have noticed cracks in the US-EU relationship.[3] While Americans have long expressed support for NATO, a majority say that unity among NATO allies is weakening. At the same time, Russians’ impressions that transatlantic security links are weakening contribute to their sense that the United States is now in a weaker global position.
Topic:
International Relations, NATO, Public Opinion, and European Union
Political Geography:
Russia, Europe, Eurasia, North America, and United States of America

24. Meeting the challenge of secondary sanctions

Author:
Ellie Geranmayeh and Manuel Lafont Rapnouil
Publication Date:
06-2019
Content Type:
Policy Brief
Institution:
European Council On Foreign Relations
Abstract:
Secondary sanctions have become a critical challenge for Europe, due to the Trump administration’s maximalist policy on Iran and its aggressive economic statecraft. Europe’s vulnerabilities mostly result from asymmetric interdependence with the US economy, due to the size of US markets and the global role of the US dollar. In future, states will likely weaponise economic interdependence with the EU to target countries that are more important to the European economy than Iran, such as China and Russia. European countries should demonstrate that, despite their economic interdependence with the US, they control EU foreign policy. The EU and its member states should strengthen their sanctions policy, begin to build up their deterrence and resilience against secondary sanctions, and prepare to adopt asymmetric countermeasures against any country that harms European interests through secondary sanctions. They should also attempt to bolster the global role of the euro and lead a robust international dialogue on the role of sanctions.
Topic:
Foreign Policy, Sanctions, European Union, Economy, and Donald Trump
Political Geography:
Russia, China, Europe, Iran, North America, and United States of America

25. From plaything to player: How Europe can stand up for itself in the next five years

Author:
Carl Bildt and Eric K. Leonard
Publication Date:
07-2019
Content Type:
Policy Brief
Institution:
European Council On Foreign Relations
Abstract:
The EU’s foreign policy is inadequate to the task of keeping Europe safe in today’s world of great power politics and uncertainty. Over the last five years, trust between Brussels and member states dwindled, and policy came to reflect the lowest common denominator of popular opinion. The coming five years herald acute pressure on Europe, particularly as Russia, China, and the US undermine multilateral institutions and treat trade, finance data, and security guarantees as instruments of power rather than global public goods. The new high representative should move quickly to rewire European foreign policymaking to exercise strategic sovereignty. The high representative needs more support on this strategy – from deputies, special representatives, and foreign ministers tasked with specific roles. The new leadership team in Brussels needs to reoperationalise European defence, build Europe’s self-sufficiency through a strong European pillar in NATO, and consider innovations such as a European Security Council. Europe will only build greater unity by tackling controversial issues head on in the European Council and the Foreign Affairs Council. The high representative needs to play a much more active role in these debates.
Topic:
Foreign Policy, European Union, and Multilateralism
Political Geography:
Russia, China, Europe, and United States of America

26. Stepping on the Gas: Future-Proofing Estonia’s Energy Market and Security

Author:
Andrei V. Belyi
Publication Date:
05-2019
Content Type:
Special Report
Institution:
International Centre for Defence and Security - ICDS
Abstract:
The Baltic region is making a significant progress in developing functioning regional natural gas market, expanding and integrating the related infrastructure, and ensuring the security of supply. However, there are multiple factors—at the national, regional, European and even global levels—that prevent this from becoming an ideal market capable of delivering greater security at a reasonable cost. Liquidity of the market is low due to falling consumption; state aid and state participation in the energy enterprises discourage private investments and distort market conditions, while geopolitical tensions between the West and Russia add further complications. The report considers the trends in the overall natural gas sector—such as greater portion of trade being conducted in gas trading hubs; more reliance on spot pricing rather than long-term contracts; LNG glut in the global markets, introduction of “virtual pipelines” and flexible infrastructure, pressure to reduce CO2 emissions as well as the US entry into the global LNG market as a major player—and analyses their implications to Estonia. It puts forward a number of recommendations on how to create and sustain the conditions necessary for efficient natural gas market in the region as well as for improved energy security of Estonia.
Topic:
Security, Energy Policy, European Union, Economy, and Resilience
Political Geography:
Russia and United States of America

27. The parliamentary election in Moldova: The end of European illusions

Author:
Ryhor Nizhnikau
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
The Moldovan parliamentary election is not about geopolitical or societal choices; it is about a power grab by oligarch Vladimir Plahotniuc, and the erosion of pluralism, freedoms and European aspirations under the EU’s watch.
Topic:
Elections, European Union, Geopolitics, Election watch, and Foreign Interference
Political Geography:
Russia, Europe, and Moldavia

28. The End of the INF-Treaty: Context and Consequences

Author:
Didier Audenaert
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
On 2 August both the US and the Russian Federation will no longer be restrained by the Intermediate-Range Nuclear Forces (INF) Treaty (1987). Early this century it gradually became clear that Russia wanted to step out of the Treaty, by which it felt itself to be solely restrained. European nations should now take up a greater share of the burden of missile defence, which should get a broader mission than it has today. The debate on EU strategic autonomy can be an instrument in this endeavour. Because of the worsening security environment NATO’s non- strategic nuclear capability becomes even more important. European NATO allies and EU member states may very soon be confronted with difficult and fundamental choices for a future without the INF Treaty, which need to be communicated and explained to their national population.
Topic:
Arms Control and Proliferation, Diplomacy, Military Strategy, European Union, and INF Treaty
Political Geography:
Russia and Europe

29. Nord Stream 2: A Boon or a Threat to European Energy Security?

Author:
David Koranyi
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
There has been much controversy around Nord Stream 2, a planned extension of the undersea gas pipeline stretching from Russia to Germany. By lying down two extra pipes in addition to the two already in operation since 2011-2012, the second phase would see the doubling of the capacity of the route, from 55 to 110 billion cubic meters (bcm) and commence operations in 2019 at a cost of 9.5 billion euros. This would mean that over 70% of Russian gas exports could be channeled through a single pipeline through Germany. Nord Stream 2, coupled with constructing the �irst two lines of Turkish Stream (with a capacity of 31.5 bcm) would also allow for the complete circumvention of the Ukrainian transit route.
Topic:
European Union, Gas, and Trade
Political Geography:
Russia, Europe, Turkey, and Germany

30. The Impact of US LNG on Russian Natural Gas Export Policy

Author:
Tatianna Mitrova and Tim Boersma
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
The United States and Russia have long been the world’s largest natural gas producers, but they traditionally have not faced off in direct competition in that market. The United States was expected to become a net importer of natural gas, while Russia’s state-owned Gazprom took a prominent position in the European market. The boom in US shale-gas production changed that. While the United States had been trading gas regionally by pipeline for decades, the shale boom allowed for the export of US liquefied natural gas, putting the two gas giants in competition. Even before the first molecule of US LNG shipped, rising US production had diverted LNG destined for the United States into the European Union. Facing increased competition pushed Russia toward a more market-oriented strategy, with Gazprom adjusting its long-term oil-linked contracts that had previously been the backbone of Russian sales to European customers to use more hybrid formulae. This was just the beginning. After a slow start, the competition brought on by US gas is to a large extent shaping the Russian natural gas strategy in Europe and beyond. For Europe, rising gas competition from new suppliers has both economic and energy security implications. Globally, it is also raising questions about how Gazprom will compete in Asia, where demand is growing and gas suppliers are looking to place future production, as well as in other markets. Understanding how Gazprom will react to US gas is thus a critical economic and geopolitical question for LNG importers and exporters worldwide. In this paper the authors examine how Gazprom will maneuver in global markets under specific circumstances. It opens with a discussion of how the US and Russian gas sectors developed and interacted in the period before shale gas. The paper then examines how Gazprom’s gas trade has been impacted by new US production and what changes may be coming as US exports continue to increase. It finds that the advent of US LNG has already reduced Russian gas revenue, undermined its oil-linked pricing model, forced contract renegotiations and accelerated domestic gas market liberalization and LNG development. The authors argue that Russia is in a good position to defend its market share in Europe and looks at some of the strategies that could be pursued under various market scenarios, including the following: High Asian demand and low oil prices: If oil-linked gas prices were pushed below spot prices, Gazprom would not need to further adjust its pricing policy (as was the case in 2015–2017). In certain situations Gazprom might even limit supplies to drive prices up and increase its rent, becoming the price maker. Such a strategy would be utilized cautiously to avoid demand destruction and prompting new FIDs for new (US) liquefaction capacity. High Asian demand and high oil prices: In this scenario Gazprom’s position would be well served in the short to medium term by strong revenues. In the longer term, however, high prices will attract more competitors to the markets (and prompt new FIDs), so it is important for Gazprom to keep its own prices competitive and to keep the margin of the aggregators, which are supplying the European market, below their margin in Asia. There are already almost no “pure” oil-linked contracts left, and Gazprom in Europe mainly has hybrid pricing, but this scenario will require a more fundamental shift in the pricing, with the share of spot-indexed prices becoming dominant. Low Asian demand and low oil prices: Gazprom may be forced to keep prices for its long-term contracts below short-run marginal costs of US LNG. Gazprom might voluntarily move to completely spot-indexed prices, simultaneously trying not only to find new markets for its gas (both in Asia and in Europe) but also to stimulate new demand. The company would need more flexible and creative marketing, and it would seek to improve the efficiency of its operations, both internationally and domestically. Should Gazprom start to see its market share decline, Moscow could decide to liberalize the pipeline export monopoly, a decision that would make Novatek and Rosneft more powerful players. Low Asian demand and high oil prices: Russia would feel competitive pressure not only from the United States but also from all existing low-cost LNG suppliers like Qatar, which may have to switch to Europe and keep gas prices at a low level. Gazprom would have to engage in this price competition as well, flooding the market using spare capacities and driving the prices down to the level of its short-run marginal costs, which will disincentive US LNG aggregators to offtake their LNG. Gazprom has considerable underutilized upstream capacities and huge spare transportation capacities, allowing it to drive down European prices below the level acceptable for US LNG suppliers. This scenario hurts everyone on the supply side, and it is warranted to ask how long it could be upheld. The study finds that even in scenarios where Gazprom sees gas revenues driven down to 2009 or 2016 levels, this should not prove catastrophic for Russia. For Moscow, facing more competition in Europe is a new situation that Gazprom and decisions makers in the Kremlin will have to deal with. Under normal circumstances, competition between various sources of supply can result in net benefits for the end consumer. In addition, this paper demonstrates that the changes in the global gas market have forced Gazprom to adjust its business practices. However, the increased politization of natural gas in the United States carries a risk of inflamed tensions between Moscow and Washington.
Topic:
Globalization, Natural Resources, European Union, and Gas
Political Geography:
Russia, United States, and Europe