Featured Analysis

Policy Insight | The Nagorny Karabakh Conflict in its Fourth Decade | CEPS

As the Nagorny Karabakh dispute between Armenia and Azerbaijan enters its fourth decade, the 2020 war was a reminder that it remains the most dangerous conflict in the post-Soviet space. Azerbaijan completely reversed the losses it suffered in the conflict of the early 1990s, leaving the Armenian side defeated and humiliated. Russia inserted itself into the heart of the conflict zone for the first time, through the introduction of a peacekeeping force in Karabakh itself. But a final Armenian-Azerbaijani peace agreement that resolves the status of Nagorny Karabakh – the trigger for the conflict in 1988 – and a normalisation of relations between Baku and Yerevan looks as elusive as ever.

The content of this working document comprises the thoroughly revised Chapter 7 of the soon-to-be-published second edition of the book ‘Beyond Frozen Conflict: Scenarios for the Separatist Disputes of Eastern Europe’ by Thomas de Waal and Nikolaus von Twickel and edited by Michael Emerson.

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Policy Insight | An unpredictable German election… but a (mostly) predictable outcome for EU politics | CEPS

Image credit: Marco Verch under Creative Commons 2.0

German national elections are always of special interest in European politics.  Germany’s next chancellor, whoever that may be, will represent the EU’s undisputed economic behemoth. But, like last time, this election is unlikely to usher in much change, even though it has arguably been the most unpredictable election cycle in nearly 20 years.

The background to this election is a paradox: Many outside Germany believe that the country has weathered the Covid-19 crisis better than almost all its European peers. But German voters think differently. They perceive that the country has only ‘muddled through’ the crisis, with Germany’s federal system creating a continuous battle over competences between the federal and Länder (state) levels, resulting in a bewildering patchwork of local Covid rules and restrictions.

Moreover, the slow reaction to the recent floods has uncovered an unusual degree of inefficiency in local administrations. The current crisis has also brought to the surface the backwardness of Germany’s public administration in terms of digitisation.  Consequently, there is widespread dissatisfaction amongst the German electorate with how the country functions. The new government will thus be less inclined to view their own country as an example for others to follow.

Consensus and the chancellor

Much speculation has concentrated on who will become the next Chancellor.  This is misguided.  In the German political system, the personal opinions of the chancellor are of only  secondary importance.  Important decisions are taken by groups representing the coalition parties, which in turn are influenced by their party members and various pressure groups. In a scenario where Germany will have a three-party coalition for the first time in decades, the role and influence of the chancellor will be even more diluted.

The only real circumstance when the personal opinions (and choices) of the Chancellor become crucial is when the European Council has to take emergency decisions in a crisis.  During the eurocrisis, Chancellor Merkel agreed to take certain policy actions which the Bundestag was essentially forced to ratify because ‘there was simply no alternative’.

There is a consensus among the elite and all likely governing parties that Germany has to remain ‘pro-European’.  In contrast to other large member states, there is no strong ‘Eurosceptic’ party or undercurrent in Germany.  Whilst menacing to many, the Alternative für Deutschland (AfD) simply does not have the same strength or influence, as say, Italy’s La Lega, and will not break out of the cordon sanitaire that the other parties have erected around it. On the other side of the political spectrum, Die Linke (‘The Left’) is also somewhat Eurosceptic but is not expected to be a governing party… however, bringing them into the fold is something that the SPD has not 100% categorically ruled out.

Alas, with few major ideological differences between the mainstream parties most likely to come together in coalition, some minor changes in political position or tone may occur but really, no radical change is on the menu, especially regarding Germany’s pro-European stance. The centre-ground, in short, will hold.

A focus on three key policy areas

There are three key areas though where the new government could drive some concrete, if not truly revolutionary, changes.

The first, arguably the most pressing, is obviously the Green transition. Germany under Merkel has always rhetorically supported EU climate policies but the country has also fought a rearguard action to defend its energy intensive industries and the automobile sector.  Merkel despite, her title of ‘Klimakanzlerin’ (‘climate chancellor’), has presided over a government that has always been quite ambiguous when it came to concrete policy choices. This is now likely to change, especially if the Greens form part of the new government as a junior partner to the SPD. The German position on the concrete measures needed to achieve the EU’s ambitious climate agenda should become more cohesive.

Financial and economic matters are where we can expect the most change (but still less than many assume is likely to materialise). SPD leader, current Finance Minister and possibly the next chancellor Olaf Scholz, once remarked that even though he may be more sympathetic to European integration than his “tight-fisted” predecessor, he’s “still the Finance Minister of Germany”. What he means is that no German leader can hand over taxpayer’s cash for European projects, unless it’s definitely in Germany’s interests to do so.

A frugal Germany will remain an obstacle to a more active fiscal policy – in no large part because such frugality remains very popular with German voters. Perhaps there will be a little loosening of the purse strings for ‘green’ investments… but again, don’t bet the farm on a radical shift in German economic policy.

Finally, the policy area that is still high on the agenda following Afghanistan and Aukus – foreign and defence policy. Germany is likely to remain – on paper – supportive of a more wide-reaching European Foreign Policy but without full German assent, building ‘hard power’ instruments for the EU will simply not happen.

Given that the SPD membership opposes drones for the Bundeswehr and the Greens are not keen at all on any increase in military expenditure to reach the 2% NATO spending ceiling, a new government led by these parties may well result in no real progress towards ‘hard’ EU military capabilities, regardless of how much the current geopolitical environment deems them desirable. But then again, with all likely governing parties in favour of Qualified Majority Voting (QMV) in the Council for foreign affairs and security matters, perhaps at least some movement in the right direction could be achieved.

So yes, there’s no harm in getting excited about a genuinely unpredictable German election – they are a rare occurrence after all. But when the dust settles and the coalition agreement is finalised, don’t expect the excitement to last. Germany is not a country prone to sudden radical transformation. How the new government pivots towards Europe and confronts the above policy areas will present a telling sign on how committed Germany remains to its role as the unofficial leader of the EU. Watch this space.

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Policy Insight | Comparing and assessing recovery and resilience plans. Italy, Germany, Spain, France, Portugal and Slovakia | CEPS

Assessing and comparing national recovery and resilience plans is a particularly difficult exercise. Despite the Commission guidelines on how to draft the plans, these remain largely heterogeneous, hardly comparable and not easily accessible. This study proposes a methodological approach to compare and assess reforms and investments, based on their relevance, effectiveness and coherence, and applies it to six EU member states. The country profiles produced do not replicate the European Commission’s own evaluation exercise of each plan and they do not (only) describe the plans’ content. Rather they focus on the rationale behind interventions, thus enabling the reader to assess (at least in part) each plan with the information provided. This paper is a continuation of the CEPS series of assessments of national plans’ structural reforms and forms part of the CEPS Recovery and Resilience Reflection Project.

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Assessing the EU’s new Indo-Pacific strategy | LSE – Europp Blog

The EU has unveiled a new Indo-Pacific strategy which aims to strengthen cooperation with countries in the region. Garima Mohan assesses what the new strategy might mean for Indo-Pacific states and how it could impact on relations between the EU and China.

Joining a growing list of countries and actors around the world, the EU formally released its Indo-Pacific strategy on 16 September. Over the last two years, European policy has transitioned rapidly, from barely even using the term Indo-Pacific to reaching an EU-wide consensus that “the economic and political weight of the region makes it a key player in shaping the international order” and that Europe needs to quickly reassess its engagement strategy.

For those who wonder why Europe should engage with a distant region on the other side of the world, the strategy’s opening paragraphs make clear that the “futures of the EU and the Indo-Pacific are inextricably linked given the interdependence of the economies and the common global challenges”. Aimed mostly at a European domestic audience which might question why resources are being allocated to the Indo-Pacific when Europe faces many challenges in its own neighbourhood, the strategy makes clear that trade between the two regions is higher than anywhere in the world. The EU is the top investor and one of the largest trade partners for Indo-Pacific economies, and the region is the second largest destination for EU exports. As a result, the strategy argues, Europe has a stake in the region and needs to do more to “strengthen its strategic reach and its supply chains.”

A key challenge in the Indo-Pacific however is the role an increasingly assertive China will play in the region. The strategy implicitly recognises China’s attempts to alter the regional status quo, mentioning “tensions around contested territories and maritime zones”, and a “significant military build-up including by China”. It argues that crises in regional hotspots like the South and East China Seas and the Taiwan Strait may have “a direct impact on European security and prosperity”.

How exactly then does the EU plan to engage with the Indo-Pacific? There are three key instruments mentioned in the strategy: diversifying and strengthening partnerships with “like-minded partners”; making sure the EU’s existing engagements in the region serve Europe’s interests and align with the goals of its key regional partners; and finally, contributing not just to security and stability but also regional needs around infrastructure investments, resilient supply chains, and emerging technology where a lot of competition in the Indo-Pacific is unfolding.

The EU’s Indo-Pacific strategy marks a departure in its approach to the region, as it stresses diversifying partnerships beyond China. While Japan and the ASEAN have traditionally been Europe’s partners of choice in Asia, the strategy also shows how far the Europe-India partnership has come, and it makes several references to Taiwan, Australia, the US, Canada and South Korea as other “like-minded” partners.

Although the EU takes an “inclusive” and “cooperation based” approach to the Indo-Pacific, stressing the need to work with China on common challenges, it adds one important qualifier. The EU will pursue “multifaceted” engagement with China, encouraging it to play a peaceful role in the region. At the same time, the EU will “continue to protect its essential interests and promote its values” and will push back “where fundamental disagreements exist, such as on human rights”. This is remarkable because almost no other European Indo-Pacific strategy has explicitly highlighted these tensions in Europe-China relations.

An important dimension of the Indo-Pacific is the emergence of flexible coalitions among like-minded partners, particularly the Quadrilateral between the US, India, Japan and Australia. While outlining its approach to China, the EU strategy also opens the possibility and willingness to work with other partners and coalitions. It explicitly mentions working with Quad working groups on vaccines, climate change and emerging technologies.

Finally, the EU mentions areas where it would like to work with these like-minded partners, and where Europe seeks to contribute to Indo-Pacific stability. This includes security and defence where the European focus seems to be on ensuring a “meaningful” European naval presence and making sure there is more intra-European coordination particularly through mechanisms like Coordinated Maritime Presences. It also mentions increasing joint naval activities including joint exercises, port calls, reinforcing EU naval diplomacy and participating in multilateral exercises.

Security in the Indo-Pacific is about more than just deploying frigates, where European navies face obvious limitations and resource constraints. The EU also wants to make sure its existing capacity building programmes function more strategically. The strategy mentions many projects around maritime domain awareness and information sharing, such as the decision to expand the CRIMARIO project to Southeast Asia and the South Pacific, and working with regional information fusion centres.

The EU also wants to step up its defence diplomacy, deploy military advisors to EU delegations, and set up security and defence dialogues with more partners, including on challenges like counterterrorism, cyber security, maritime security and non-proliferation. It has already started pilot programmes to explore closer security cooperation with India, Indonesia, Japan, Korea, Singapore and Vietnam. The EU also explicitly mentions doing more in the Indian Ocean, which is in its near neighbourhood and constitutes a “gateway to the Indo-Pacific”.

However, the EU can have the most impact on questions of economic security in the Indo-Pacific. Here the strategy takes a broader approach, going beyond concluding more free-trade agreements and aiming to work towards resilient and diversified supply chains, stronger rules against unfair practices such as economic coercion and forced technology transfers, and addressing strategic dependencies in supply chains (e.g. in relation to semiconductors) by working with partners like Japan, Korea and Taiwan.

There are other areas where the region is looking for alternatives to Chinese investments and technology, and where Europe has something to contribute. The strategy for example mentions creating digital partnerships, including the recently concluded one with India which focuses on AI, 5G and quantum technologies. On infrastructure connectivity, the EU has just announced its “Global Gateway” to provide alternatives to China’s Belt and Road Initiative. Indo-Pacific partners like Japan and India have been the first to conclude a connectivity partnership with the EU, and it also wants to plug into and seek complementarity with existing initiatives by Australia, Korea, the US and Canada.

Similar to the Quad working groups, which seek to provide public goods in the region and deal with global issues, the EU strategy also focuses on climate change, ocean governance, health, and the response to Covid-19, including better access to and distribution of vaccines.

While it remains to be seen whether the new strategy will have a major impact, for Europe’s partners, the strategy does provide some clear answers on where Europe stands on key Indo-Pacific debates. It also gives some insight into the EU’s approach to dealing with China and the potential for the EU to work with like-minded partners and in flexible coalitions.


Note: This article gives the views of the author, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured image credit: European Council

The Green transition, finance and biodiversity: Aim high, shoot higher, by A. Thomadakis and R. Karsenti | European Capital Markets Institute (ECMI)

On 14 September, the European Capital Markets Institute (ECMI) published a commentary by Apostolos Thomadakis and René Karsenti, named The Green transition, finance and biodiversity: Aim high, shoot higher, which acknowledged that the urgency to succeed in financing the energy transition and reorienting private capital to sustainable investments requires a comprehensive shift in how the financial system works.

The role of major market participants, investors, and policymakers in facilitating this shift is essential. To develop more green and sustainable economic growth, there is a need to:

i) broaden access to the market through innovation and diversification;

ii) further develop global standards and taxonomies;

iii) enhance disclosure and reporting;

iv) fully incorporate fintech and digitisation;

v) fully address biodiversity and nature-related risks

Beyond its quasi-moral obligation, mobilising finance for the energy transition is a historic opportunity, especially for the EU to act and lead as a true pioneer, that should not be missed.

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About the authors

* René Karsenti is Senior Adviser and former President of the International Capital Market Association (ICMA), former Board Chair of the International Finance Facility for Immunisation (IFFIm), Honorary Director General of the European Investment Bank (EIB) and former Chairman of the European Capital Markets Institute (ECMI) Board.

Apostolos Thomadakis, PhD, is a Researcher at ECMI and CEPS.

Who gets what? Understanding the new politics of insecurity | Europp – LSE Blog

The decline of traditional industries, the rise of globalisation, and rapid technological change have created a profound sense of insecurity for many people across Europe and the United States. Drawing on a new book, Frances McCall Rosenbluth and Margaret Weir explain how this insecurity has opened up a new kind of politics.

In both the United States and Europe, the shift away from manufacturing toward a service economy, the new rigours introduced by the open global economy, and the freer movement of people across national boundaries have stripped away the certainties of an earlier era.

Although rates of inequality in the United States have soared far above those in Europe, a troubling sense of insecurity pervades European democracies as well. As confidence erodes in the capacity of representative government and political parties to alleviate this new insecurity, the field has opened to a new kind of politics. Politicians who openly embrace racism, nationalism, and unilateral executive action now present themselves as the alternative to the failures of liberal representative democracy and global connection.

In a new edited volume, Who Gets What? The New Politics of Insecurity, we have brought together scholars from across the disciplines of history and the social sciences to probe how the economic and social transformations of the past forty years have introduced new risks and insecurities, fracturing the solidarities of the post-war era.

The book shows how the stable identities and political alliances of the past have given way to a jumble of social cleavages and political rifts that now set the menu for politics. We can unravel these complexities with research that rests on three distinct perspectives: peopleplaces, and politics. These categories capture the ideologies and attitudes linked to individual social positions, the spatial divisions that have become a hallmark of the new economy, and the political institutions that segment the experience of insecurity and the political responses to it.

People

When it comes to people, a key finding is that possibilities for broader solidarities have failed to emerge in response to growing insecurity. Instead, new divisions are surfacing. For instance, the book presents an analysis of data from multiple European surveys that confirms political dissatisfaction among those without a university education. Yet this trend also extends to graduates who hold jobs that are poorly matched with their qualifications. These mismatched workers are more likely to express dissatisfaction with the political and economic status quo than university graduates whose jobs better match their skills.

Places

Places have always mattered less in Europe than in the United States, where racial segregation has long etched deep lines of political and social division. These divisions have intensified in an era of growing inequality. But the knowledge economy has also introduced new spatial divisions in Europe and the United States. Agglomeration economies have transformed the landscape of prosperity in Europe much as they have within the United States, creating red hot growth centres in some places and leaving others as hollowed out shells.

These patterns have political implications and different party systems have ‘bundled’ the issues differently. One analysis in our book shows that, despite tendency toward fragmentation, proportional representation “helps inoculate against partisan and social polarization by preventing the two-party urban-rural bundling of issue platforms and social identities that have gradually fueled the rise of partisan hostility in majoritarian democracies.” By contrast, America’s two-party system not only fuses parties and social identities, it also feeds dissatisfaction within the parties. The resulting hostility and pervasive discontent make the United States especially vulnerable to anti-system appeals that reinforce divisions.

Politics

The new insecurities have reverberated in both American and European politics. The dislocations that accompanied global trade and technical change had little influence on politics even as they transformed economies. Instead, the disaffected largely dropped out of politics. After the 2008 recession, however, a new brand of political entrepreneur mobilised widespread discontent. In place of broad social policies supplied by the welfare state, populist politicians promised to enhance security with protection from globalisation and strong national borders to block immigration. As Carles Boix, one of our contributors, argues, unless policies including education and a universal basic income can win support, a future of oligarchical capitalism may become a real possibility.

The shrinking of Europe’s industrial workforce has also had an impact on European politics. A weakened left has undermined one of the central pillars of post-war democratic stability, as insecure workers have turned toward more radical parties, even in traditionally social democratic countries. In post-war Europe, proportional representation produced coalitions that backed free trade and economic growth as well as generous welfare. As unions and left political parties have weakened, the prospects for enduring democratic stability have diminished.

Yet there is also room for optimism. Workers everywhere face a loss or work or downgrading of their jobs. But as one of the analyses in our book shows, countries with strong traditions of social democracy offer a variety of social insurance schemes to cushion the blow of economic change. Even in European countries with less robust social insurance, established social protections continue to shield citizens from the worst of market volatility. Only in the United States do workers face risks with so little support that a challenge in one domain – say a lost job – regularly cascades into other domains – lost health insurance or housing.

Capitalism and democracy

At the heart of these issues is the shifting relationship between capitalism and democracy. In the post-war decades, it was easy to think that capitalism and democracy were a natural pair. But the contributions to our book underscore how difficult it is to govern when interests have become so disparate and discontent so widespread.

Both the American-style majoritarian system and European proportional representation systems provide openings for politicians who thrive on division. Although the political dangers are greater in the United States, representative democracies everywhere need to rebuild broad solidarities that once undergirded prosperity and stable politics. To do so, they must provide evidence that they can respond to the insecurities that have upended the lives of so many of their citizens.

For more information, see the authors’ new edited volume, Who Gets What? The New Politics of Insecurity (Cambridge University Press, 2021)


Note: This article gives the views of the authors, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured image credit: Peter Ivey-Hansen on Unsplash

Policy Insight | PESCO: A Force for Positive Integration in EU Defence | CEPS

Differentiation, or what some have called the ‘negative starting point’ of integration, has always been the norm in EU defence policy. Driven by both endogenous and exogenous (f)actors, political leaders in the European Council are nevertheless mindful of the need for Member States to cooperate in more structured ways to better protect their citizens against security threats. For this reason, a package of harmonizing measures has been developed with remarkable speed since 2016. Permanent Structured Cooperation (PESCO) is the most prominent innovation in this field. Given the high levels of politicization in defence it is perhaps surprising that PESCO has produced the most inclusive expression of enhanced cooperation, even if it is the most flexible of the differentiated integration mechanisms provided by the Treaties. This is largely the result of a German push for inclusivity, which prevailed over a French desire for a higher level of ambition. Monitored by the European External Action Service (EEAS) and the European Defence Agency (EDA) and increasingly driven by the Commission’s Directorate General for Defence Industry and Space (DG DEFIS), which manages the European Defence Fund (EDF), PESCO is a force that generates ‘positive integration’ by de-fragmenting the defence market in the European Union. This article builds on empirical research that maps the varied clusters of Member States lining up behind different types of defence capability development projects. It observes a process of coagulation across the microcosm of PESCO, coupled with formal expressions of differentiated integration, both vertically and horizontally, and offers explanations for these trends.

An additional explanatory table about the levels of differentiated integration in PESCO can be found here.

Reprinted from “European Foreign Affairs Review”, Volume 26, Special Issue (2021): 87-110, with permission of Kluwer Law International. Permission to use this content must be obtained from the copyright owner.

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Policy Insight | European added value of EU legal migration policy and law | CEPS

This research paper, undertaken through a contract with the European Parliament’s Parliamentary Research Service (EPRS), supports the European Added Value Assessment (EAVA) on a legislative initiative of the European Parliament on the topic of ‘Legal migration policy and law’. Legal and economic analysis was carried out to review the state of play and the existing gaps and barriers in EU action. Based on the findings, the research paper defines 14 policy options that are distributed across three policy clusters:

•   Harmonise rules for the recognition of qualifications

•   Introduce new legal channels for labour migration to the EU

•   Improve TCN workers’ rights and employment conditions, including policies on the demand side of the labour market

The legal and economic aspects of each policy option are assessed in qualitative and quantitative terms drawing on a range of sources. The study assesses the impacts on fundamental rights protection, internal and external coherence, and on labour market outcomes.

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Policy Insight | The Macroeconomics of Debt. Europe’s blind spot | CEPS

Debt continues to grow around the globe, regularly creating cause for concern. Are today’s economies really nothing but a house of cards? The Covid pandemic has not helped matters: the debt of most Western governments has soared as a result. Will our governments go bankrupt, and who will foot the bill? While debt can be a catalyst for crisis, it is also crucial to economic growth, because one person’s debt liability is another’s debt claim. If nobody borrows, then nobody can set money aside. In a market economy, Aesop’s fable does not hold true: the ants need the grasshoppers.

As long as households want to save more than private agents are willing to borrow, governments not only can, but should, continue to take on debt. They are not just ‘borrowers of last resort’, they are also ‘insurers of last resort’. Faced with a future fraught with risks, borrowing gives governments a means of investing today to avert at least some of these risks and avoid taking on even more debt tomorrow. If they use their resources wisely, they will not go bankrupt.

This book tackles these issues in an original and thought-provoking way. By looking at the rise in debt from a macroeconomic and empirical viewpoint, the authors highlight the underlying forces while also pointing out the limits to public and private indebtedness.

Anton Brender, Florence Pisani and Emile Gagna are economists with CANDRIAM, a New York Life Investments Company, and also teach at Paris-Dauphine University. In collaboration with CEPS, they are publishing this book simultaneously in English and French (under the title Économie de la dette).

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Policy Insight | After Afghanistan. The State of the European Defence Union and EU rapid response capabilities | CEPS

Photo by the European Defence Agency

Shocking images of the historically unprecedented Afghanistan airlift caught the attention of people around the world. It also caught the attention of European Commission President Von der Leyen in her State of the Union address, the EU’s High Representative for Foreign Affairs and European Commission Vice-President (HRVP) Josep Borrell, and European Council President Charles Michel, who have all seized the moment to give renewed impetus to the idea of establishing an ‘Initial Entry Force’ (IEF). First floated in May 2021 within the scope of Strategic Compass preparations being made by 14 member states including France, Germany and Italy, the idea would be to upgrade the EU Battlegroup (EUBG) concept so that the EU could become more responsive to crises. Yet, the experience of 15 years of EUBG non-deployment should dissuade HRVP Borrell and defence optimists from believing that an IEF is a quick and easy fix to square the EU’s rapid response force circle.

While an IEF might push forward the goalposts of reaching the EU’s Common Security and Defence Policy (CSDP) level of ambition in an ideal world, reality sadly points in another direction. In short, solving the current challenges underlying EUBG deployment is a necessary precondition before the IEF can become a real success story. The HRVP, as well as the Council and Commission’s leadership, should seek tangible synergies within the larger European Defence Union framework to ensure that future rapid response forces are interoperable, capable and, most importantly, an attractive choice for EU member states.

A mistaken order of operations

The hurried withdrawal of coalition forces from Afghanistan was due to both a lack of foresight/preparedness (with the sole exception of France) and the EU’s inability to activate rapid response forces to protect its own citizens sans US support. But the IEF is not the rapid response silver bullet proponents have purported it to be. In fact, a 5,000-strong IEF on permanent standby would not solve the two key problems linked with the EUBGs: chiefly, who foots the bill and treaty-based unanimous decision-making requirements, resulting in insufficient political willpower.[i]

In comments following an informal meeting of EU Defence Ministers on 2 September 2021 and despite these challenges, the HRVP optimistically stated that a hypothetical IEF would: 1) support the EU’s  capacity to respond in times of crisis (i.e., by providing a security perimeter such as in Operation Artemis), 2) strengthen the EU’s military command and control (C2) capabilities and 3) address capabilities shortfalls through initiatives such as the Permanent Structured Cooperation (PESCO) project and the European Defence Fund.

While the fuzzily defined IEF and the current 1,500-strong EUBGs might have been useful in securing the area around Kabul Airport, the lack of foresight, weak military C2, and capabilities shortfalls – all factors driving a weak CSDP – remain outside the remit of such a proposal. Despite the 2017 establishment of an EU military operational HQ (the Military Planning and Conduct Capability), the need to overcome member state resistance linked to divergent strategic cultures and lack of interoperability would persist even with the creation of the IEF. This would lead to futile trial-and-error and, potentially, a repeat of political fatigue. Indeed, political opposition to the IEF concept has already emerged, with some member states (i.e., Sweden and Germany) preferring NATO or EU ‘coalitions of the willing’ to the proposed IEF. This chimes with a trend in longer CSDP missions as well, typically understaffed, under-resourced and often dependent on the support of NATO and/or national operations.

Finally, to believe that creating the IEF would itself miraculously address capabilities shortfalls through the undefined involvement of PESCO and the EDF is an exercise in putting the cart before the horse. Rather than creating a new rapid response force to accelerate strategic culture convergence, remedy barriers to interoperability and fill capabilities gaps, the High Representative, Commission and Council should consider inverting the order of operations. In other words, an effective EU IEF depends first on solving the root problems that have plagued the EUBGs – within current Treaty constraints – rather than precipitously creating new force structures to replace them.

Objective IEF: Gradual upgrading and upscaling

Taking gradual but deliberate steps towards the IEF is key. It would first make sense to expand the membership of each EUBG and prolong their standby duration to foster greater interoperability among member states that differ in capabilities, strategic culture and readiness. Yet, while President Von der Leyen proposed some ways of strengthening the budding European Defence Union in her State of the Union address, she did not address how to ensure that the EU actually deploys its rapid reaction forces.

One way of doing so is through the tried-and-true incentive-based ‘spillover’ approach. Recent developments in European defence cooperation can provide food for thought on how to break the coming impasse and chart a path to ensuring the viability of EUBGs and, eventually, the IEF. The announcement that France and Germany have officially launched a joint tactical air transport squadron and training centre is an experience that can be replicated amongst like-minded member states. These bilateral forms of defence cooperation are rightly considered within the larger patchwork of differentiated integration in CSDP.

If there is genuine interest in strengthening the EU’s crisis response capacity, however, EU member states should first integrate these separate endeavours into the European Defence Union via PESCO. One way to incentivise such convergence might be by providing an additional European Defence Fund (EDF) co-financing bonus to those capabilities-oriented PESCO projects that are subsequently operationalised on a collective basis.

With the right incentives, France and Germany might consider bringing a third PESCO member state into the joint squadron and training centre, thereby promoting strategic culture convergence, facilitating future interoperability and building EU capabilities. Going even further back in the development cycle, an added EDF joint operation bonus might even convince France, Germany and Spain to incorporate the Future Combat Air System – currently in preliminary development – within PESCO and, subsequently, jointly man and operate the system.

Through such a method, the EUBGs would ideally operate some collectively developed capabilities together – encouraging the EU to deploy them for rapid response missions when the time and necessity comes.

Conclusions

The proposed IEF currently under member state consideration would not have been deployed (in time) to support the West’s retreat from Afghanistan. Nor would the IEF solve the root problems underlying the effective deployment of EU military forces and subsequently help make the EU a more capable global actor in the future. Instead, jointly developing capabilities for collective use in the framework of PESCO’s more binding commitments is the key to filling capabilities gaps and overcoming barriers to interoperability.

The envisioned end result is potentially transformative for CSDP. By incentivising continual cooperation, EU member states would simultaneously strengthen the European pillar of NATO and could overcome political reticence. They could also find solutions to long-standing strategic and operational differences to deploy the EUBGs or the future IEF – all without needing to revise Treaty provisions on unanimity and funding. Only then might member states be able – and willing – to pool both military personnel and materiel to assertively deploy EU troops for urgent rapid response operations.

[i] The verdict is still out on the European Peace Facility, a €5 billion-endowed merger of the Athena Mechanism and African Peace Facility funding all CSDP activities, including providing lethal military equipment to third actors, on a (now) predictable basis.

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