Monthly Archives: November 2008

Buried in last Wednesday’s €200bn European Commission economic recovery plan for Europe was a proposal that sent waves of relief through Lithuanian policymaking circles. This was the idea of allocating €5bn for trans-European energy connections.

A large chunk of this money is destined for Lithuania, the aim being to reduce the dangers that face the country after the planned closure of its Ignalina nuclear power plant on December 31, 2009. Ignalina supplies 70 per cent of Lithuania’s electricity, and when the plant is shut down Lithuania will be almost entirely dependent on Russia for its energy.

For sure, Russia has no obvious interest in starving Lithuania of electricity. The lines that send Russian electricity to Lithuania also send it through Lithuania to Kaliningrad, the Russian territory to the west. Still, given it’s only 17 years since Lithuania gained independence from the Soviet Union, and given the icy relations between Russia and its tiny neighbour, any form of dependence is understandably an unnerving prospect from a Lithuanian point of view.

As officials in Vilnius point out, Lithuania relies for gas on a single Russian pipeline that passes through Belarus. As for oil, the Russians closed down the ironically named Druzhba (“Friendship”) pipeline in 2006 for repair work that mysteriously never seems to get finished.

Once Ignalina is closed, “the probability of disaster is not very high, but it is probable that there will be serious problems”, says Aleksandras Abisala, the government’s special representative on energy security.

The Lithuanians have been hammering away at their European Union colleagues on this subject for so long that, according to those in the know, French President Nicolas Sarkozy finally decided to raise the matter with Russian President Dmitry Medvedev at the recent EU-Russia summit in Nice. The response was very revealing of the present peppery mood in the Kremlin.

On the question of reopening the Druzhba pipeline, Medvedev committed himself to absolutely nothing. On the question of promising to maintain electricity deliveries to Lithuania from January 2010 onwards, Medvedev in effect said: “Nicolas, why are you talking to me about this? If the Lithuanians think they have a problem and want to talk about it, tell them to come and see me.”

In other words, Sarkozy’s efforts to speak up for Lithuania and give Medvedev a demonstration of what EU solidarity means in practice hit a big brick wall.

Lithuania had better receive some of that €5bn in EU funds quickly, or it will be a bitingly cold winter in 2010.

I am in snowy Vilnius, the capital of Lithuania and a city that reminds me of a communist-era joke that I first heard in Poland in 1980.

A Frenchman visits Warsaw, so the story went, and is so shocked by the bleak buildings and empty shops that he thinks he must have arrived in Moscow by mistake. Meanwhile, a Russian visits Warsaw and is so pleasantly surprised by the colour and the range of goods on sale that he thinks he must have arrived in Paris.

Political and economic conditions in Vilnius in 2008 are light years from those in Warsaw in 1980 – Lithuania wasn’t even an independent country back then, but rather a Soviet republic that was almost totally closed to western visitors.

In some ways, however, the old Polish joke still applies. Switch on your television in Vilnius, and you get easy access to Russian and Belarusan networks.  But poke your head out of the window and you hear the chimes of Catholic church bells; as in Poland or Ireland, Catholicism is in Lithuania’s DNA. Truly, this is a country precariously poised between east and west.

It is a point well illustrated by the story of the main thoroughfare in Vilnius, Gediminas Avenue, where the government buildings are located. Between 1922 and 1989, when Vilnius was under the successive rule of Poland, Nazi Germany and the Soviet Union, this street was named first after Adam Mickiewicz, the great 19th century Polish-Lithuanian poet, then after Adolf Hitler, and then after Vladimir Lenin and Josef Stalin.

“Who knows what will happen in the future? Life is so hectic,” a Vilnius tour guide said to me, looking over the park where a statue of Lenin used to stand.

It wasn’t exactly a thundering expression of faith in Lithuania’s long-term independence. but if you think about what’s happened to the country over the past 100 years, you can see her point.

The style supremos at the Financial Times frown upon the word “unprecedented”, but let’s be reckless and use it anyway. 

Just when the European Union is at pains to emphasise its unity in the face of the financial crisis and the economic recession, it is ironic that some member-states are taking the unprecedented step of invoking an EU rule that allows them to pursue a policy together even if other countries disagree.

Even more ironically, the policy in question concerns European divorce laws.

The 27-nation bloc has been struggling for more than three years to make it easier for couples of different EU nationalities to get divorced. Sweden has resisted a European Commission plan that would in certain instances result in the application of divorce laws from the country where a couple most recently lived.

That plan, say the Swedes, could mean the enforcement of Islamic law in Sweden, with its newly arrived Iranian, Iraqi and Pakistani communities. Proud of its tolerant social outlook and sturdy defence of women’s rights, Sweden wants no part of it.

In July, eight countries – Austria,  Greece, Hungary, Italy, Luxembourg, Romania, Slovenia and Spain – gave notice that they would bypass Sweden’s objections and proceed with the common divorce rules. They had tacit support from France, Germany and others.

The method they chose was that of “enhanced co-operation” – a mechanism first established in the EU’s 1997 Amsterdam treaty, but so far never used,  for fear of setting in motion processes that could eventually break up the Union.

It seems not entirely coincidental that the action in July came only a month after Ireland’s rejection of the Lisbon treaty in a referendum that set all sorts of alarm bells ringing about the EU’s supposed paralysis. Better “enhanced co-operation” than an inability to do anything at all, went the implicit argument.

Only time will tell whether this will prove a dangerous step into the unknown or a perfectly harmless initiative. But (will the stylists allow this formulation?) it is an important precedent, no doubt about it.

It is unfortunate that Dominique de Villepin, the former French prime minister, must stand trial for alleged involvement in a plot to smear his compatriot, President Nicolas Sarkozy. Unfortunate for de Villepin, and unfortunate also for Sergey Stanishev, Bulgaria’s socialist prime minister.

Only a week before the sad news about de Villepin came out, Stanishev announced with great solemnity that he had appointed the French ex-premier to chair a panel of eminent foreigners who will advise the Bulgarian government. Their specific task will be to help Bulgaria overcome its massive problems with corruption, organised crime and a rotten judicial system.

Many of Bulgaria’s fellow European Union member-states are fed up to the back teeth with Bulgaria’s failure to tackle these problems. The European Commission must decide soon whether to drive the point home by permanently denying Bulgaria hundreds of millions of euros in aid that it suspended in July.

Stanishev’s creation of a board of foreign advisers is not such a bad idea. And it would be churlish to suggest, as some have, that Stanishev’s appointees are perhaps not quite from the topmost drawer of European public life. They include Josep Piqué, a former Spanish foreign minister; António Vitorino of Portugal, a former EU commissioner for justice and home affairs; Finland’s Aunus Salmi, a former member of the European Court of Auditors; Paul Demaret, the rector of the College of Europe, the post-graduate school in the Belgian city of Bruges; and, of course, de Villepin.

Each in his own way will make a significant contribution to the panel and to its understanding of corruption, organised crime and judicial hanky-panky.

As for de Villepin, one cannot repeat too often that all individuals, including former French prime ministers accused of using the intelligence services to wreck the political career of a future head of state, are innocent until proven guilty.

What seems beyond question is de Villepin’s fascination, as a prolific poet and historian as well as politician, with the concept of the great leader who falls heroically into the abyss. Just look at his 634-page work on Napoleon Bonaparte, entitled “The Hundred Days, or the Spirit of Sacrifice”, which chronicles the French emperor’s escape from Elba and return to power in France until his final defeat at Waterloo in June 1815.

Vive l’empereur!

The global economic downturn is hitting Serbia hard, so you’d think quite a few Serbs would be interested in the €1m reward that the government is offering to pay for information leading to the arrest of Ratko Mladic. Curiously, however, the trail of the fugitive Bosnian Serb war crimes suspect never seems to get any warmer.

Roughly two months ago, a western government passed a tip to the Serbian government as to Mladic’s whereabouts. A raid was carried out, but the tip turned out to be a dud. Wisely, perhaps, the Serbian authorities chose not to publicise this incident.

In contrast, a police search of a factory in the central Serbian town of Valjevo on November 10 received extensive media coverage, though it led to no better results. This operation took place just a week before Serge Brammertz, the chief United Nations war crimes prosecutor, arrived in Belgrade to prepare his report on how actively Serbia is co-operating with the UN war crimes tribunal in The Hague.

If Brammertz’s report is positive, it will strengthen Serbia’s case that the European Union should accept it as an official candidate for membership. In this sense, the Valjevo raid was conveniently timely.

So where is Mladic, and who knows where he is? The former Serbian government, led by Vojislav Kostunica, knew perfectly well where Mladic was until at least January 2005. But Kostunica refused to have him arrested. The former Bosnian Serb military commander then faded from sight. However, he is known to have a heart condition, and in recent years some interesting evidence about the use of certain heart prescription drugs has been picked up in various parts of Serbia.

According to Ivica Dacic, Serbia’s interior minister, “nobody in the world has the impression that the Serbian government is protecting and hiding Mladic”. Western governments would agree, in the sense that they don’t think President Boris Tadic, Prime Minister Mirko Cvetkovic and other ministers are shielding Mladic. However, they suspect that other elements in the Serbian power apparatus do know the whereabouts of Mladic, who is assumed to be guarded by a corps of diehard loyalists.

The ease with which Serbia’s authorities arrested Radovan Karadzic, the Bosnian Serb political leader, in July suggests it ought not to be impossible to catch Mladic one day, too – even if he is in a bizarre Karadzic-like disguise. On the other hand, Osama bin Laden is still on the run more than seven years after 9/11 – and the reward for information leading to his capture is up to $25m.

According to French President Nicolas Sarkozy, last weekend’s G20 summit was a big success. “Never before have Anglo-Saxons agreed to subject credit ratings agencies to oversight and regulation,” he declared.

You know what, he’s right. Check out the ‘Historia Ecclesiastica gentis Anglorum’, the 8th century AD masterpiece by the Venerable Bede. This greatest of all Anglo-Saxon chroniclers had nothing to say about credit ratings agencies, and not just because he wrote in Latin.

Almost every day, all over the European media, one comes across the term ”Anglo-Saxons”. It is usually intended to mean Brits and Americans, with perhaps a glance in the direction of Australians, Canadians and New Zealanders.

To my mind, the term carries a deeply unpleasant undertone of invoking alleged racial origin to define nationality and establish a stereotype of national character. Weren’t Europeans supposed to have stopped doing things like that after the destruction of Nazism? Moreover, the term is, of course, utterly inaccurate.

After all, whom did American voters just elect as their next president? A direct descendant of the Venerable Bede? (A Belgian newspaper reported two days after Barack Obama’s victory that genealogical researchers had discovered he was 1 per cent Belgian. But that’s another story.)

The millions of African-Americans, Hispanics, Asians and many others who live in New York, Chicago and Los Angeles would be flabbergasted, and possibly rather amused, to hear that in Europe they are categorised as Anglo-Saxon. So would all sorts of people in Montreal, Toronto and Sydney.

It goes for the UK, too. Huge numbers of Londoners are no more Anglo-Saxon than my cats. Look at the family tree of any Englishman – which is what is generally meant when “Anglo-Saxon” is applied in a British context - and you will soon discover an Irish father-in-law here, a Scottish aunt there, a Polish or Indian grandmother somewhere else.

So, speaking as someone with three half-Japanese nephews, two of whom recently played in the famous Eton v Harrow annual cricket match, I say – it’s time to stop calling us, or them, Anglo-Saxons!

Vladimir Chizhov, Russia’s ambassador to the European Union, was having some fun this week at the expense of western countries as he mused about the impact of the financial crisis on world capitalism. “I’ve noticed an upsurge of interest in theoretical works by certain authors of the past, such as Karl Marx,” he said. “A German publishing house has just reprinted 2m copies of ‘Das Kapital’.”

Whether or not ’Das Kapital’ has anything useful to say about today’s turmoil, there is no doubt that the crisis is producing a shift in the European intellectual climate against classical free market liberalism and in favour of state interventionism and economic nationalism. The political and cultural soil for this shift was already rather fertile in France, Germany and Italy, though less so in young democracies such as the Czech Republic and Poland.

But if this is so, then why are political parties of the left in such poor shape across much of Europe? It’s the worst financial crisis since the early 1930s, the worst economic recession since the early 1990s, if not the 1970s – and where is the left?

In France, it is mired in internal disputes between Ségolène Royal and her enemies – disputes that seem incredibly petty, given the scale of the crisis in the world outside. President Nicolas Sarkozy’s popularity ratings, which crashed after his over-publicised romance with Carla Bruni, are going up.

In Germany, the Social Democrats are only just emerging from a miserable phase in which they were led by Kurt Beck, one of the least effective leaders in their post-1945 history. They do not look in great shape to displace Chancellor Angela Merkel’s Christian Democrats as Germany’s biggest party in next year’s federal elections. A poll this week gave the Social Democrats only 23 per cent, against 37 per cent for the Christian Democrats and their Bavarian allies.

In Italy, the centre-left opposition led by Walter Veltroni almost disappeared from public sight after losing this year’s election to Silvio Berlusconi. He is riding high on a programme of sorting out problems at Alitalia, Italy’s dysfunctional national airline, and cracking down on criminals and immigrants from outside western Europe.

It would be a rash person who predicted that the Labour party will hold on to power after the next UK election, even though Gordon Brown is recovering in the polls thanks to his recent performance during the financial crisis.

In short, the European left appears bereft of ideas and incapable of inspiring voters at a time when economic conditions ought to be working strongly in its favour.

After Barack Obama’s presidential election victory in the US last week, many commentators noted how difficult it was to imagine a black politician achieving a similar triumph in Europe. But I would ask another question. Where in Europe is the politician who will match Obama by raising the banner of modern centre-left values and winning an election?

It’s been a long time coming, but the European Union is finally launching its first naval operation - a mission to fight piracy and armed robbery off the coast of Somalia, one of the world’s most dangerous sealanes. Financially speaking, it’s a modest operation – the common costs are estimated at 8.3m euros for one year – but in terms of the EU’s self-image it may make quite a difference.

As French defence minister Hervé Morin put it this week, “This operation is proof that a Europe of defence is starting to take shape.”

One must keep a sense of proportion here. No more than six ships, as well as a few maritime surveillance aircraft, are likely to be involved in the EU mission at any given time. Still, Brussels wasn’t born in a day.

In any case, other operations aren’t achieving much, either. There is a Western-led fleet known as Combined Taskforce 150, which has about 12 to 15 ships in the Indian Ocean. It sometimes intervenes against the pirates, but it is concerned primarily with anti-terrorism operations linked to the war in Afghanistan.  

The EU mission’s purpose is partly to protect vessels of the UN World Food Programme that deliver food aid to displaced people in Somalia. It also aims to protect other vulnerable ships and boats cruising off the Somali coast, and to deter piracy and armed robbery in general.

No one disputes the urgent need for the mission. According to the International Maritime Bureau, there were more than 60 acts of piracy or attempted piracy in the Gulf of Aden and off the Somali coast in the first nine months of this year – almost one-third of all such incidents worldwide.

The threat to international trade is clear. Insurance premiums for ships that need to pass through these waters have soared. Shipping industry insiders say that if the dangers increase, companies may avoid the Gulf of Aden altogether and take the far longer route to Europe and North America via the Cape of Good Hope.

One problem is the de facto collapse of the Somali state, which encourages widespread lawlessness. Another is the huge ransoms paid to the pirates: whereas a few years ago they were in the tens or hundreds of thousands of dollars, this year they have risen to 2m dollars and higher. The payment of ransoms feeds the demand.

The difficulties of tackling piracy off Somalia are undeniable. A much larger EU naval mission would be nice in theory but, some say, too expensive in practice. That, however, is what it may come to if the problem gets any worse.

It seems likely that the European Union will decide this week to resume talks with Russia on a long-term partnership agreement. This step will get a lot of attention inside the EU, fascinated as ever by the navel-gazing question of how united or divided it is in its Russia policy. One suspects the Russians themselves will be rather less obsessed.

Suspension of the talks was announced by the EU’s 27 leaders at a September 1 summit in Brussels, a few days after Russia effectively dismembered Georgia by recognising Abkhazia and South Ossetia as independent states. At the time, the leaders said they would not resume the talks until Russian forces had withdrawn to positions occupied before August 7.

That condition has now been quietly dropped, in spite of complaints from Poland and Lithuania, which are saying aloud what everyone else knows: the Russian forces haven’t fully pulled back. So the real question is what Russia makes of a negotiating partner – the EU – which gravely announces a diplomatic sanction (however modest), sets terms for lifting it, and then lifts it anyway when the terms haven’t been met.

The Russian view is, in fact, straightforward and well explained in two recent articles by Nadia Alexandrova-Arbatova and George Bovt in the latest publication of the EU-Russia Centre think-tank. Bovt, a Moscow-based political commentator, points out that EU-Russian relations are under almost permanent strain because of the legacy of Soviet repression in eastern Europe and the accession of countries from this region into the EU.

“Moscow usually unequivocally defends the Soviet ‘glorious past’, even its Stalinist period. Until Moscow, on one side, and Warsaw, Vilnius, Riga and Tallinn, on the other, find a new adequate tone of dialogue, there is absolutely no hope of any progress in EU-Russian relations, neither on the new partnership agreement, nor on Russia’s entry into the WTO [World Trade Organisation],” Bovt says.

For her part, Alexandrovna-Arbatova, who is head of the European studies department at Imemo, one of Moscow’s most prestigious academic institutions, says the Georgia crisis showed Russia that the EU was its “only responsible international partner”, because it was the Europeans who took on the job of mediating an end to the fighting.

More pertinently, she warns that all Russia’s main political groups – “the ruling moderate conservatives, nationalists, communists and Russian liberals” - share the same bottom lines in foreign policy:

1. They will no longer make unilateral concessions to the West, which is what they think Boris Yeltsin did in the 1990s.

2. They regard Nato enlargement into former Soviet republics such as Georgia and Ukraine as a “red line” – completely unacceptable.

3. They regard Kosovo’s independence as a direct violation of international law.

4. They see the US anti-missile defence plans in eastern Europe as a threat to strategic stability.

Put this way, Russian foreign policy does not seem aggressive or destabilising, but hard-headed, focused and pragmatic – and attractive enough to some western European countries to make sure the EU’s unity is constantly being tested.

In Europe, US presidential elections are memorable events - partly because European politicians say such memorable things about them. Here are the best three quotes on Barack Obama’s victory from politicians in the European Parliament:

1. Francis Wurtz (French communist): “Barely forty years after the hard-fought struggles for civil rights, I perceive the popular movement which has brought an ‘African-American’ – as Barack Obama likes to present himself – to the presidency of the United States as a great and beautiful moment of history.”

2. Daniel Cohn-Bendit (former 1968 student rebel leader): “We should recognise that the American people have achieved something truly great in electing Obama. Today marks the end of an era of American cowboys – the second death of John Wayne.”

3. Graham Watson (UK liberal): “This breakthrough also throws the spotlight on Europe’s leaders. As we look around the table at the Council of Ministers and the European Commission, we see 27 white heads of government and 27 white commissioners. Which will be the first European country to break our glass ceiling and put its faith in a leader of colour?

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Peter Spiegel is the FT's Brussels bureau chief. He returned to the FT in August 2010 after spending five years covering foreign policy and national security issues from Washington for the Wall Street Journal and the Los Angeles Times, focusing on the wars in Iraq and Afghanistan. He first joined the FT in 1999 covering business regulation and corporate crime in its Washington bureau, before spending four years covering military affairs and the defence industry in London and Washington.

Joshua Chaffin is one of the FT's EU correspondents, covering areas including policies on trade, the environment and energy. He has worked in the FT's Brussels bureau since late 2008 and before that was an FT correspondent in New York and Washington DC.

Alex Barker is EU correspondent, covering the single market, financial regulation and competition. He was formerly an FT political correspondent in the UK and joined the FT in 2005.

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