Foreign policy

Peter Spiegel

A slide from a January 2014 investor presentation by the Ukrainian finance ministry

First of all, just how much financial trouble is Ukraine in?

Almost all major economic powers were out on Monday saying that any aid package would have to wait for a full International Monetary Fund programme. But such “stand-by arrangements” can take months to negotiate – and IMF officials have made clear they want a new government firmly in place before those negotiations can begin, so that may mean we’re waiting until after May’s presidential elections.

So will Ukraine make it until then? Analysts are dubious, and the Ukrainian finance ministry’s declaration on Monday that they are seeking bilateral loans from the US and Poland in the next week or two certainly implies that they’re not sure they can make it that long either.

One key metric to watch is Ukraine’s foreign currency reserves, which for those not seeped in international finance is about as close to a national bank account for emerging market economies as you can get. If Ukraine runs out of reserves of dollars, it can’t pay any of its bills to foreign creditors – such as bondholders or gas providers – and essentially goes broke. Read more

Peter Spiegel

EU foreign policy chief Catherine Ashton, left, with Ukrainian opposition leaders in Kiev last week

One of the lingering questions left after Ukraine’s failure to sign its long-negotiated integration treaty with the EU at a November summit in Vilnius – setting off months of protests in Kiev – is whether more needs to be offered to former Soviet republics than the current “Eastern Partnership”, which promises “association” but not future membership with the EU.

A Swedish-led effort to restart that conversation will be discussed at Monday’s meeting of EU foreign ministers, according to a “restricted distribution” document handed out to all 28 capitals ahead of the gathering. According to the “non-paper” – which Brussels Blog has posted here – 12 countries have signed onto the Swedish initiative, most of them former Soviet-bloc EU members, but also the UK and Germany.

Among other things, the paper, titled “20 points on the Eastern Partnership post-Vilnius”, argues quick signatures of treaties with Georgia and Moldova, the only two remaining after Ukraine and Armenia reneged at the last minute. Read more

James Fontanella-Khan

EU's Füle, right, with Ukrainian president Viktor Yanikovich in Kiev earlier this year

Is Twitter the right place to announce major foreign policy changes?

That’s the question on the lips of several EU foreign ministers today after Stefan Füle, the EU Commissioner in charge of neighbourhood policy, put a landmark integration deal with Ukraine on hold via these two tweets Sunday morning.

On his way into to a meeting of EU foreign ministers on Monday Morning, Frans Timmermans, the Dutch foreign minister, attacked not only the medium, but the message as well.

“I think that making policy on the basis of a Twitter notice by Mr Füle is perhaps not the best way of approaching this is issue,” said Mr Timmermans. “I believe the best signal we can give Ukraine is simply that the door is still open.” Read more

James Fontanella-Khan

Demonstrators in Berlin protest against alleged US spying activities in July.

In today’s dead-tree edition of the FT, we report on a draft of a stinging report the European Commission will issue Wednesday which could send shock waves through the US tech industry: unless the Obama administration changes the way it handles online data of European citizens, American companies like Google and Facebook will have to find another way to do business in the EU.

Given the importance of the Commission’s review of the 13-year-old “safe harbour” agreement with the US – which allows American firms to operate in Europe under US privacy rules because of an assumption that Washington treats the data similarly to European governments – and the fact we got our hands on it before its official release, we thought Brussels Blog readers might be interested in a bit more detail about the Commission’s findings. Read more

What has become an increasingly touchy EU-Russia trade relationship took another tit-for-tat turn on Thursday when Brussels escalated a WTO case against Moscow over vehicle recycling fees.

The EU believes a recycling fee Russia charges on imported cars is less about good environmental policy and more a way to squelch foreign competition. The fee does not apply to cars built in Russia or its closest trading partners,Kazakhstan and Belarus.

Brussels complained to the WTO about the levy in July, marking the first case against Russia since it joined the global trade body with much fanfare in 2012 – 19 years after its initial application. On Thursday, the EU asked for a panel to rule on the matter after – to little surprise – settlement talks with Moscow proved fruitless. A result could take months.

“We’ve used all the possible avenues to find with Russia a mutually acceptable solution,” said Karel De Gucht, the EU trade commissioner. “As the fee continues to severely hamper exports of a sector that is key for Europe’s economy, we are left with no choice but to ask for a WTO ruling.” Read more

Peter Spiegel

Cyprus' Mavroyiannis, right, with EU's Lewandowsky during last year's budget talks

When Andreas Mavroyiannis was appointed the Greek Cypriots’ lead negotiator with the Turkish side of the island this month, many in Brussels took note. Mavroyiannis is not only Cyprus’ former ambassador to the EU, but he served as the island’s EU minister during its eventful EU presidency last year.

Although the Cypriot presidency received mixed reviews, thanks in part to ongoing upheaval back in Nicosia surrounding the country’s then-unfinished bailout, Mavroyiannis was widely viewed as a pro, winning praise in Brussels for his handling of highly-tendentious negotiations over the EU’s €1tn seven-year budget.

So if Mavroyiannis could handle 27 warring EU heads of state, surely his appointment was a sign of new Cypriot president Nicos Anastasiades’ seriousness in tacking the 40-year division of the island, some reasoned. Anastasiades was one of the few Greek Cypriot politicians, after all, who backed the 2004 Annan Plan to reunify the island, and many EU officials have hoped the economic crisis brought on by the €10bn bailout might bring new momentum to finding a solution to the frozen conflict.

Well, not everyone agrees with that assessment – least of all Osman Ertug, the Turkish Cypriot official who will be Mavroyiannis’ chief interlocutor if and when negotiations reconvene. Read more

Brussels and Beijing appear to be nearing a settlement in a trade fight over solar panels that is the EU’s biggest ever anti-dumping case – based on the more than €20bn in Chinese-made solar products shipped to the bloc in 2011. Sometime on Friday afternoon, EU officials are expecting to learn whether or not their counterparts in Beijing have taken their latest offer.

In theory, the two sides have until August 6th to haggle over a deal. After that date, provisional duties imposed by the EU will jump from about 11 per cent to an average of 47 per cent. The reality is that they have probably already missed that deadline, according to diplomats, given the amount of legwork that Brussels must do to translate an agreement and circulate it among national governments. Hence, the next few days are crucial. Read more

Peter Spiegel

France's Laurent Fabius, left, and Britain's William Hague co-authored the letter to Cathy Ashton.

[UPDATE] During Monday’s appearance with Kerry, which includes a town hall meeting with European Commission staff, Barroso is expected to announce a new “comprehensive package” of EU humanitarian aid for Syrian refugees, according to officials briefed on the initiative.

This weekend’s announcement by John Kerry, the US secretary of state, that Washington is prepared to double the amount of non-lethal aid it is sending to the mainstream opposition in Syria kicks off what is expected to be a busy week in Brussels on the issue.

Kerry is due in the Belgian capital for this week’s Nato foreign ministers’ meeting, where Syria will be debated, and officials familiar with Kerry’s schedule said there was even a discussion of his attending the EU foreign ministers’ meeting in Luxembourg on Monday. That has since been ruled out – though Kerry will meet with José Manuel Barroso, the European Commission president, on Monday ahead of the Nato ministerial.

Still, the Monday EU foreign ministers’ meeting will be the latest venue in the ongoing Franco-British effort to lift the EU’s arms embargo on the Syrian opposition. EU diplomats said they do not believe a definitive decision will be made at the meeting, but it comes just weeks before the entire sanctions regime is set to expire at the end of next month, so the deliberations are likely to become even more spirited.

For those looking to read up on the topic ahead of the Monday meeting, Brussels Blog has got its hands on the joint letter Laurent Fabius, the French foreign minister, and his British counterpart William Hague sent to Catherine Ashton, the EU foreign policy chief, last month arguing for a change in policy – we’ve posted it here, in both French and English. Read more

Brussels bloggers Peter Spiegel and Joshua Chaffin discuss the unexpected Anglo-French push to lift the arms embargo for Syrian rebels fighting the Assad regime.

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Peter Spiegel

It is now become standard operating procedure: a big story breaks, and the Taiwanese news organisation NMA — which came to fame with its CGI take on Tiger Woods’s complicated love life — does its own unique interpretation of the event. Past favourites have included former British prime minster Gordon Brown’s temper tantrums and ex-US vice president Al Gore’s alleged harassment of a masseuse. Now, they’ve done Friday’s highly-anticipated speech by David Cameron on Britain’s future in the EU, complete with Bulgarians and Romanians storming Buckingham Palace and Nick Clegg in a Baby Bjorn: Read more

Peter Spiegel

Geithner, left, has been in frequent touch with ECB's Draghi and his predecessor, Trichet.

A joint election party co-hosted by Democrats and Republicans Abroad at the Renaissance Hotel in Brussels this evening is scheduled to go until 3am in anticipation of a long night ahead for any eurocrats waiting to get first word on who has won the US presidential contest.

Looking for something to do in the interim? For his part, French economist Jean Pisani-Ferry, director of the influential Brussels think tank Bruegel, scoured the recently-released calendars of US treasury secretary Timothy Geithner to find out which of the American’s EU counterparts he talked to most frequently since the eurozone crisis broke nearly three years ago.

Perhaps not surprisingly, by far his most frequent phone calls have gone to the Washington-based International Monetary Fund. Pisani-Ferry counts 114 contacts with either IMF chief Christine Lagarde or her predecessor, Dominique Strauss-Kahn, or their deputies.

What is a surprise is that Geithner’s most frequent interlocutor on this side of the Atlantic has not been in Brussels, Paris or Berlin. Instead, it was Frankfurt, where he contacted European Central Bank president Mario Draghi and his predecessor, Jean-Claude Trichet, 58 times in the 30 months examined. Read more

Peter Spiegel

Romney, left, with Polish foreign minister Radek Sikorski during his July trip to Warsaw.

The US presidential debates begin on Wednesday, and if the previous year of campaigning is any indication, Europe is unlikely to be much of a topic. Despite the ongoing eurozone turmoil, the crisis barely registered on the election’s radar screen, even during the contentious and debate-heavy Republican primary process.

Republican Mitt Romney’s views on Europe were largely overshadowed by the gaffes committed on a trip to Britain and Poland earlier this year. But little noticed outside Washington policy circles, the former Massachusetts governor last year appointed two co-chairs to a “Europe working group” within his foreign policy advisory team.

One is well-known to Brussels: Kristen Silverberg, who was the Bush administration’s last ambassador to the EU before leaving office in 2009. But potentially more interesting is the other co-chair: Nile Gardiner, a Briton who served as an aide to Margaret Thatcher before moving to the US, where he now works for the conservative Heritage Foundation.

If a recent article in the Washington Times is any indication, Gardiner holds some strong anti-EU sentiments that could have an impact on a future Romney administration. Read more

Peter Spiegel

Photo AFP

Mohamed Morsi, the new Egyptian president, arrived in Brussels today for day-long meetings with top EU officials. But most of the world’s attention was back in Cairo, where the US embassy, like other embassies in the region, had been the target of attacks by demonstrators angry about an anti-Muslim movie clip uploaded onto YouTube in the US.

Morsi’s morning press conference with European Commission president José Manuel Barroso was his first chance to publicly address the incidents and followed concerns in Washington that he had not condemned the attacks strongly enough. Indeed, US president Barack Obama himself warned that the US did not consider Egypt an ally, nor an enemy, and was watching closely how Morsi would respond.

In order for our readers to make their own judgment, the complete transcript of Morsi’s comments on the incident at the Brussels presser, as conveyed through a translator, are below. He falls short of specifically condemning the attacks, but does say “the Egyptian people reject any such unlawful act” against “individuals, the properties and the embassies.” Read more

James Fontanella-Khan

Jailed opposition leader Yulia Tymoshenko showing what she called a bruise on her forearm

Anyone hoping that the ongoing standoff between the EU and Ukraine over the detention of one-time Orange Revolution leader Yulia Tymoshenko will end soon is likely to be disappointed. With national elections just three months away, there seems to be no interest in Kiev in releasing her during campaign season.

Kostyantyn Gryshchenko, Ukraine’s foreign minister, acknowledged to Brussels Blog that the former prime minister had become more of a problem for his government in jail than free, noting her imprisonment has made an “association agreement” with EU almost impossible to finalise. “We [see] this issue as a certain irritant which obviously is not helping to move ahead with a positive agenda with the European Union,” Gryshchenko said.

But Gryshchenko swiftly repeated the line that other senior Ukrainian officials have made about the Tymoshenko case: there was little he could do to overturn last year’s court ruling that sentenced the former prime minister to seven years in prison for abuse of office. Read more

Peter Spiegel

The EU's Ashton and Israeli prime minister Netanyahu meet in Jerusalem last September.

Catherine Ashton, the European Union’s foreign policy chief, has spent most of the day under attack from Israeli leaders for allegedly comparing the killing a four people at a Jewish school in Toulouse yesterday to the death of children in Gaza at the hands of the Israeli military.

Ashton’s spokesmen have vehemently denied she was drawing a comparison between the two and was simply listing places where children have been violently killed, including the recent death of Belgian students in a bus crash, the shooting of Norwegian students last year by a right-wing extremist, and the Assad regime’s assault on Homs.

One problem: almost 24 hours after the speech was given, someone in the EU bureaucracy noticed the transcript posted by the European Commission’s communication team was incorrect. In the list of places cited by Ashton was also Sderot, the Israeli town near the Gaza Strip that has been targeted by Palestinian militias with rocket attacks.

The new version of the transcript still leaves out some of Ashton’s rhetorical flourishes, so Brussels Blog put together its own transcript of the section in question, which can be viewed in this video around minute 12. Read more

Next week marks the one-year anniversary of the tidal wave that unleashed a disaster at Japan’s Fukushima nuclear facility and forced a profound shift in Europe’s nuclear debate.

Within weeks of the disaster, Angela Merkel, the German chancellor, decided to switch course and phase out the country’s nuclear plants – a move that was subsequently copied by Switzerland and Belgium.

Talk of a nuclear revival that once filled the air in Italy and other member states – encouraged by the industry and supportive governments – has been dashed. Even in France, Europe’s nuclear champion, public opinion has turned increasingly negative.

But in spite of Fukushima, one European Union member state has lost none of its nuclear ardour: LithuaniaRead more

Peter Spiegel

Obama shakes hands with Treasury chief Geithner after his State of the Union address.

The news overnight focused on President Barack Obama’s annual State of the Union address. For the Brussels crowd, the most interesting thing in the speech may have been what was not in the speech: Europe.

Despite the ongoing eurozone crisis, and the increasingly deep involvement of senior US officials like Treasury secretary Timothy Geithner in crisis management, Obama did not mention Europe’s economic problems once. In fact, his only reference to the continent at all was a line that military alliances in Europe (and Asia) were “as strong as ever”, and putting “Berlin” in a list of global capitals where governments are “eager to work with us”.

Obama’s Republican adversaries have not done much more than that in their frequent televised debates, despite growing concern in Washington that a crisis-induced collapse of Europe’s economy could have a severe impact on the US economy in the midst of this year’s presidential campaign. Read more

Peter Spiegel

Ukraine's Viktor Yanukovich, left, and Commission president José Manuel Barroso in March 2010

The European Commission announced today that Ukrainian president Viktor Yanukovich was no longer welcome in Brussels on Thursday after opposition leader Yulia Tymoshenko was sentenced to seven years in prison last week.

Both Yanukovich (who made Brussels his first foreign stop when he became president last year) and Tymoshenko (who attended the pre-summit gathering of centre-right presidents and prime ministers ahead of the March EU summit) have been regular visitors to Europe’s capital as Ukraine tries to finalise an “association agreement” with the EU before the end of the year.

Coincidentally, Ukrainian foreign minister Kostyantyn Gryshchenko was in town on the day of the Tymoshenko verdict and held a round-table with a small group of Brussels-based journalists. Given the day’s events, Brussels Blog though it would be a good time to provide more excerpts from last week’s interview. Read more

Triploi's Old City. September 2011

Tripoli's Old City. September 4.

The European Union’s diplomatic corps, the External Action Service, has landed in Tripoli – the first step in a move to establish a delegation office there. But now that the EU is on the ground in the Libyan capital, don’t expect a torrent of aid to begin flowing just yet.

A post-Gaddafi Libya, and the Arab Spring, in general, present a big opportunity for the new EAS to demonstrate that it can play a useful role helping to promote development and nurture fledgling democracies in the region. The EAS was envisioned as one of the main levers of the EU’s “soft power” when it was enshrined in the 2009 Lisbon treaty. Yet it has got off to a decidedly rocky start.

The extent of the EAS’s role in Libya remains in question. EU officials say they have been told by Libya’s National Transitional Council that it does not intend to hand over the country’s post-conflict reconstruction to foreign interests, and that it will insist on leading the process itself. Read more

Peter Spiegel

British defence secretary Liam Fox, left, at June's meeting of Nato defence ministers in Brussels

Just how much support is Nato providing to rebels in Tripoli hunting for Col Muammer Gaddifi? There seems to be a significant amount of disagreement among alliance officials and leaders of some of its largest members.

This morning, Liam Fox, the British defence secretary, said in an interview with Sky News that Nato reconnaissance assets – presumably spy planes and drones flying over the Libyan capital – were directly aiding the opposition National Transitional Council’s operations.

“I can confirm that Nato is providing intelligence and reconnaissance assets to the NTC to help them track down Col Gaddafi and other remnants of the regime,” Fox said. But that would directly contradict Nato’s claims Tuesday, where a military spokesman vehemently denied any coordination with the opposition. Read more