Dirty fights for Europe’s Blue Banana. Geoeconomics in European affairs

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Economically, the European Union (EU) is a giant: it sits at the heart of a geographical space of 80 countries that depend on it for trade and investment, and even align themselves with its currency; moreover, the EU has the world’s largest single market; most multinational companies, therefore, depend on access to the region – which means complying with EU standards. With its regulatory powers, the EU should, therefore, profit widely from globalization. However, overlapping crisis such as the financial turmoil starting in 2008, the refugee crisis of 2015, and Britain’s recent decision to leave the Union, put Europe’s internal coherence into question. Apparently, the national grip on various policy areas remains a weighty obstacle for the pooling of the EU’s ample resources behind common policies.

Hence, the question remains whether the European Union is capable of reaching the internal cohesion necessary to organize Europe’s economic space effectively. To evaluate this question, the concept of geoeconomics in intra-European affairs is an interesting one, as it combines two strands of political theory: First, geoeconomics are based on the complex notion of strong reciprocal intersections between the economic and the political sphere; as a consequence, geoeconomics assumes that (some, not all) governments are guided by weighty companies, while (some) others guide large companies for their own geoeconomic purposes. Second, geoeconomics is rooted in realist IR theory, thus encompassing organized actions by governments to change their external environment in general, or the policies and actions of other states in particular so as to achieve the objectives that have been set by policy makers.

Essentially, geoeconomics, therefore, means states leveraging power via economic means to get other states to do what they would not do otherwise.

This idea of nation-states deploying economic weapons in international power struggles, e.g. productivity, trade balances and foreign investment – is not new. However, throughout the twentieth century the balance of power among nations was typically viewed through the lens of geopolitics, and only recently geoeconomics has (re-) emerged. In (Western-) Europe after 1945 on the other hand, geopolitical thought has been largely replaced by integration theories which see Europe as having developed beyond the anarchy of the international system.

Yet given that the European Union does not represent a fully unified political entity, it is unlikely that geoeconomics, this form of power politics through economic means, is completely contained by the (nevertheless dense) system of supranational institutions on the EU-level. Depending on the specific policy area or section of the Internal Market that are concerned, at least parts of the toolbox of geoeconomic statecraft can therefore be assumed of being available to national policy makers in Europe. And where such instruments are available, it appears rather likely that they are also in use. Geoeconomically motivated statecraft should hence (still) play a (more or less strong) role in the relations between European countries.

Moreover, Member States’ reluctance to transfer powers to supranational bodies is growing, and the EU is increasingly characterized by policy co-ordination between MS (as opposed to deeper Europeanization). In other words, politics on the European level have become somewhat deracinated from the supranationalist dynamics and the legislative framework that characterized supranational governance beyond the nation-state.

Of course entities such as the EU will not being replaced by nation states exerting influence through economic instruments, and neither can Europeanization of politics and business (e.g. lobbying) be ignored. But EU-level policy making can be assumed to happen increasingly under the absence of the Community method, that is based on decision-making logic/procedures characterized by voluntary and informal policy coordination between national governments and national representatives with an increasingly strong national rational.

Open power politics may still be unthinkable in this kind of European framework, but the importance of regional integration as a strategy to gain power by increasing market size and economic opportunities is losing its longstanding attractiveness, while government-company relations are intact on the national level. The decreasing inclination of national governments to govern Europe collectively through the various forms of European governance, should therefore be paralleled with a growing importance of geoeconomics for the behavior of individual EU Members vis-à-vis their neighbors.

Ukraine’s nuclear power plants: What should, what can be done?

Author: Thomas Sattich

Ukraine’s power system can stand representative for the country’s geopolitical situation: Consisting of several sub-systems, one part of the country’s power system in the West is integrated in the continental European, whereas the Eastern parts of the country remain part of the post-Soviet power system. On the other hand Ukraine is independent when it comes to electricity supply: Most of the generated power is also consumed in the country, with balanced import-export figures. Limited interaction with neighbouring countries is rather the rule than the exception in Europe, but the given these figures, Ukraine can be described as highly self-sufficient in electricity supply.

15 nuclear power reactors back Ukraine’s independence: Atomic energy accounts for more than half of generated electricity in Ukraine. Moreover, Ukraine is the second-largest producer of Uranium in Europe after Russia.

The significance of nuclear energy for the country’s economy can hence hardly be overstated. But Ukraine seems to be at the brink of anarchy: Despite several initiatives to bring the country’s unrest to a halt, Ukraine has fallen into a bloody civil war between army, right wing extremists and armed separatist groups. The situation also indicates increasing economic tension, political unrest, and continuing street violence. As if the situation was not worrying enough, several reports mention threats for the country’s nuclear programme. Europeans are therefore confronted with a very serious question: What to do with Ukraine’s nuclear infrastructure?

Since the Euromaidan events in early 2014, Ukraine is sliding into an abyss of civil war and chaos. International negotiations so far failed to stop this downward spiral, as apparently not all sides are equally interested in a peaceful development. The question, who is to blame for this situation, certainly is a very important one. In view of the threats for Ukraine’s nuclear power plants, the blame game has, however, little meaning: Ways have to be found to secure the plants against immediate threats. This should be one of the first priorities during the negotiations.

It is of course difficult to forecast the country’s future course. Yet despite this distinct insecurity, medium and long-term solutions have to be found to neutralise the threat originating from Ukraine’s nuclear infrastructure. At least in this regard the conflicting parties should be able to agree. Insofar Ukraine’s nuclear power plants might be a somewhat neutral item for constructive negotiations. In any case, a survey of Ukraine’s nuclear facilities, their current state and their potential future is necessary, before further analysis of what can be done.

Only in a second step reflections on potential ways to take action can be discussed. Ultimately this is an older debate, as the state of the country’s nuclear programme was cause for concerns long before February 2014. But the current crisis accelerated developments and put Ukraine on a trajectory that demands renewed thinking about this issue. The author of this blog will  therefore ask what means and programmes the EU (possibly) has to deal with Ukraine’s nuclear infrastructure and the Ukrainian power system. Given the highly political nature of the Ukrainian issue, a European contribution can, however, be only one part of a bigger puzzle.

Update 07 August 2014:

Electricity generation in Ukraine, 1992 - 2011
Electricity generation in Ukraine (in billion kilowatthours), 1992 – 2011