Challenges for European Foreign Policy 2013

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global governance

Humanitarian aid

United StatesEastern

neighborhood

development

MIDDLE EAST

ChinaEastAsia

CLIMATE ANDENERGY

LatinAmerica

Africa

CENTRAL

ASIA

Dem

ocracy

tradeIntegration

PeaceJUSTIC

E

human rights

Defence

eucooperation

security

EURO

Challenges for EuropeanForeign Policy in 2013Renewing the EUs role in the world


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Challenges for European

Foreign Policy in 2013

Renewing the EUs role in the world


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First published in Spain in 2013 by FRIDE

FRIDE 2013

C/ Felipe IV, 9, 1 dcha.,28014-Madrid, EspaaPhone: +34 91 2 444 [email protected]

All rights reserved. Without limiting the rights under copyright reserved above,no part o this publication may be reproduced, stored or introduced into aretrieval system, or transmitted, in any orm or by any means (electronic,mechanical, photocopying, recording or otherwise), without the prior writtenpermission o both the copyright owner and the publisher o this book. The viewso the authors do not necessarily reect the opinion o FRIDE.

Editors: Giovanni Grevi and Daniel Keohane

Design: Daniela Rombol / Pilar Seidenschnur

ISBN: 978-84-616-2417-1 (Print)ISBN: 978-84-616-2418-8 (Online)

Legal Deposit: M-42198-2012

Printed and bound in Spain by Artes Grfcas Villena


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Challenges for EuropeanForeign Policy in 2013Renewing the EUs role in the world

Giovanni Grevi and Daniel Keohane (eds.)


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Contents

PREFACE 11

INTRODUCTION

RENEWING EU FOREIGN POLICY

Giovanni Grevi 15

POLICIES

1. HUMAN RIGHTS AND DEMOCRACY:

WEAVING THE SILVER THREAD

Richard Youngs 23

2. LEADING ON CLIMATE AND RESOURCES

Bernice Lee and Diarmuid Torney 31

3. WHY THE EU NEEDS THE MILITARY OPTION

Daniel Keohane 39

THE NEIGHBOURHOOD

4. THE EASTERN NEIGHBOURHOOD: DEMOCRACY,

VISAS AND ENERGY

Natalia Shapovalova 47

5. SUPPORTING TRANSITIONS IN THE ARAB WORLD

Kristina Kausch 55

6. THE MIDDLE EAST CONUNDRUM

Ana Echage and Barah Mikail 63


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THE GLOBAL STAGE

7. FROM THE SAHEL TO SOMALIA: RESPONDING TO CRISES

Damien Helly 71

8. CENTRAL ASIA: VALUES, SECURITY AND DEVELOPMENT

Jos Boonstra 79

9. EAST ASIA: WORK IN PROGRESS

Gauri Khandekar 87

10. HOW TO RENEW THE EUROPE BRAND IN LATIN AMERICA

Susanne Gratius 95

11. THE EU-US PARTNERSHIP:

A CRISIS, A CHALLENGE AND AN OPPORTUNITY

Thomas Wright 103


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7CHALLENGES FOR EUROPEAN FOREIGN POLICY IN 2013

Jos Boonstra is a senior researcher and head of the EUCAM programme

at FRIDE

Ana Echage is a senior researcher at FRIDE

Susanne Gratius is a senior researcher at FRIDE

Giovanni Grevi is acting director of FRIDE

Damien Helly is visiting professor at the College of Europe

Kristina Kausch is a senior researcher and research coordinator at FRIDE

Daniel Keohane is head of strategic affairs at FRIDE

Gauri Khandekar is a researcher and head of the EU-Asia Agora

programme at FRIDE

Barah Mikail is a senior researcher at FRIDE

Bernice Lee is research director for energy, environment and resource

governance, Chatham House

Natalia Shapovalova is an associate researcher at FRIDE

Pedro Solbes is president of FRIDE

Diarmuid Torney is a visiting fellow on energy, environment and resources,

Chatham House

Thomas Wright is a fellow at the Brookings Institution

Richard Youngs is director of FRIDE (on leave) and professor at the

University of Warwick

About the Authors


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Abbreviations

APEC Asia-Pacifc Economic Cooperation

ASD Aerospace and Deence Industries Association o Europe

ASEAN Association o Southeast Asian Nations

AU Arican Union

AUHIP Arican Union High-Level Implementation Panel

BOMCA Border Management Programme in Central Asia

BRICS Brazil, Russia, India, China and South Arica

CARICOM Caribbean Community

CELAC Latin American and Caribbean Community o Nations

CLIMA Directorate General or Climate Action

CSDP Common Security and Deence Policy

DAC Development Assistance Committee

DCFTA Deep and Comprehensive Free Trade Agreement

DCI Development Cooperation Instrument

DEVCO Directorate General EuropeAid Development and Cooperation

EaP Eastern Partnership

EBRD European Bank or Reconstruction and Development

ECHO Directorate General Humanitarian Aid

ECOWAS Economic Community o West Arican StatesEDF European Development Fund

EEAS European External Action Service

EEC European Energy Community

EED European Endowment or Democracy

EIB European Investment Bank

EIDHR European Instrument or Democracy and Human Rights

ENP European Neighbourhood Policy

EU European Union

EUSR European Union Special Representative


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FTA Free Trade Agreement

FTAA Free Trade Area o the AmericasFTAAP Free Trade Area o the Asia-Pacifc

GCC Gul Cooperation Council

GDP Gross Domestic Product

GMO Genetically Modifed Organism

GNC General National Congress

GDN Green Diplomacy Network

IfS Instrument or Stability

IMF International Monetary Fund

ISTAR Intelligence, Surveillance, Target Acquisition, and Reconnaissance

LNG Liquefed Natural Gas

MENA Middle East and North Arica

MERCOSUR Southern Common Market

NATO North Atlantic Treaty Organisation

ODA Ofcial Development Assistance

OECD Organisation or Economic Cooperation and Development

OSCE Organisation or Security and Cooperation in Europe

RCEP Regional Comprehensive Economic Partnership

SICA Central American Integration System

SIPRI Stockholm International Peace Research Institute

SMEs Small and Medium Enterprises

TFG Transitional Federal Government

TPP Trans-Pacifc PartnershipUK United Kingdom

UN United Nations

UNASUR South American Community o Nations

UNESCO United Nations Educational, Scientifc and Cultural Organisation

US United States

WMD Weapon o Mass Destruction


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The year 2013 will be a time for realism and ambition in Europe. The

consequences of the economic crisis that is straining the political andsocial fabric of the European Union (EU) will continue to be felt. Butthis is no excuse for failing to make a strong case for Europe as part ofthe solution to current woes, not as part of the problem.

There is no shortcut out of the crisis. Europeans need to facefundamental questions on what they share and what they want toachieve together. Addressing these issues requires a much deeper pan-

European political debate within and across member states. This is thecondition for nurturing a genuine sense of ownership of the Europeanproject among citizens, which is the bedrock of democratic legitimacy.

Focusing on the role of the EU in the world is no substitutefor tackling the domestic economic crisis head on and ensuring theconsolidation of the Economic and Monetary Union. That is and

will remain the priority in 2013. But taking the crisis as an alibi forneglecting EU foreign policy and the trends that are shaping the worldaround Europe would be a serious strategic blunder for three reasons.

Preface to

FRIDE Annual Publication 2013


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12 FRIDE

For one, there is no stable and prosperous Europe within a regional

and global context raught with tensions and marked by growinguncertainty. For another, part o the rationale or European integrationrests on ounding international relations on the rule o law and notthe rule o power, and on uniting peoples, not just states. Abdicatingthese goals would question the basic values o the EU. Besides,dening the priorities or EUs oreign policy and external action canmake a tangible contribution to the welare o Europes citizens by,or example, improving security in the neighbourhood, regulating

international nance and mitigating climate change.

FRIDEs annual publication 2013 provides a timely and valuablecontribution to this debate, as it looks at renewing the EUs rolein the world. This book does not dismiss the political and materialconstraints o EU oreign policy. However, it argues that, in times ocrisis and shrinking budgets, there is a need to ocus on the question o

the Unions added value on the international scene. The Union can andshould make a contribution that its individual member states and otherglobal actors cannot deliver.

The central nding is that Europeans should be both more sel-condent and more consistent. Sel-condent because the principlesand prole o the Union as a rule-based actor, and its unique experienceo regional integration, still resonate well beyond its borders. The

ounding values o Europe, including democracy and human rights,have not run their course.

But Europeans should also be more consistent and true to theirvalues, not only in their external action but also at home. The misplaceddebate between debtor and creditor countries has eroded not onlyintra-European solidarity but also a sound understanding o sharedcommon interest. Nationalism and populism have ollowed on theheels o the economic crisis, reaching alarming levels in some memberstates. The impact o the downturn on jobs is aecting social cohesion.


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Europes attractiveness and clout in the world will crucially depend

on restarting economic growth, improving the unctioning o theUnion and winning more popular support or European integration.But in 2013 it will be equally important to invest the political andeconomic capital o the Union abroad in a more targeted way wherethe EU can make a dierence, whether in improving governance inthe neighbourhood, promoting regional cooperation, opening newmarkets, providing humanitarian aid, engaging major rising powers orbecoming a stronger partner or the US.

The conerral o the Nobel peace prize to the EU in 2012 broughtrecognition or its success in bringing peace and prosperity toEurope; but the Union also has a responsibility to consolidate theseachievements and extend them to other regions, in 2013 and beyond.

Pedro SolbesPresident of FRIDE


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Beyond the crisis: back to basics

Four years into the most serious political and economic crisis aictingthe European Union (EU) since its creation, is the EU a spent orceon the global stage? The FRIDE team eels that, as we enter 2013,avoiding this question is not an option. The core message o thispublication is that the EU can make a positive dierence in regionaland global aairs. However, ater much soul-searching, 2013 will bea crucial year to build on piecemeal progress in 2012 and renew EUoreign policy. In 2013, the EU will need to show the world that it

means business, or the world may be excused or thinking that it isdriting out o business.

The standard line o deence to counter the diagnosis o waning EUinuence consists o boasting the still remarkable Union share oworld Gross Domestic Product (GDP), trade and investment,development aid and deence spending. While technically correct, this is

a statistical answer to a political question. Besides, it ails to take intoaccount that, on these and other indicators, time is probably not onEuropes side. Like a supernova, absent renewed ambition, the Union

IntroductionRenewing EU foreign policyGiovanni Grevi


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may continue to shine beyond its expiration date, but its economic

engines and political drive might become exhausted.

FRIDEs assessment o EU oreign policy priorities in the yearahead fnds that, while EU resources may be shrinking relative toothers, it is how and to what ends they are mobilised that mattersmost. The added-value o EU oreign policy depends on what theUnion stands or in global politics, and whether it is prepared to

take action in a more pragmatic and eective ashion, adapting to achanging world.

The international system is uid, ever more diverse and turbulentbut overall not yet adversarial. It is an arena where politicalauthority depends on ideas and innovation as much as on generatingrecord growth rates. On this account, the EU has much to be proudo. As one o the chapters collected here puts it, Europes brand

based on democracy, peace, cooperation, sustainable growth andsolidarity is an attractive one or many worldwide. This is not a vainclaim o righteousness but a sober reminder that Europes values andexperience are still relevant well beyond its borders, and should be aplatorm or international engagement.

The profle o the Union is not tainted because others arethreatening it or advancing alternative, more viable political or

economic models. What chiey dents the credibility o the EU is thatEuropeans have not been practicing what they preach as consistentlyand eectively as they committed to do, at home and abroad. Forexample, they have let their monetary union incomplete or ten years,letting economic imbalances grow within the eurozone; they havenot invested in a common deence policy; they have not preventedturmoil in the EUs Southern neighbourhood by supporting political

change in authoritarian countries; and they have not empoweredEU bodies to work with major rising powers across the vast policyspectrum rom economics to security.


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The added-value of EU foreign policy

This FRIDE annual publication aims to help shit the debate on EUoreign policy rom introspection to a realistic projection o Europesvalues and interests on the regional and global scales, ocusing on theUnions comparative advantages and distinct added-value. Four keydimensions o the EUs added-value on the international stage are stressedhere, drawing on the contributions o the FRIDE team and o prominentexternal experts.

Values as infuence

The cornerstone o EU infuence and oreign policy are its oundingvalues and principles, which the Lisbon treaty says should inorm itsexternal action. The economic crisis has not drastically sapped the EUscommitment to democracy and human rights. In act, ollowing the Arab

uprisings, the EU has upgraded its commitment to deep democracy, hastaken a tougher line on illiberal drits in Ukraine and Russia, has steppedup democracy-related sanctions, and has appointed a high representativeor human rights equipped with a new human rights strategy. From theEUs neighbourhood to Latin America, Europes championing o thesepolitical values is still regarded as central to its (blurring) attractiveness.But new approaches and instruments will need to be implemented andprioritised in 2013 to deliver on this commitment.

Overall, the EU will need to ocus less on governments and more oncitizens, whether in the Eastern neighbourhood, the Mediterranean orCentral Asia. The Neighbourhood Civil Society Facility helps in thisdirection but broader eorts should be made to engage civil society,which would also strengthen the accountability and eectiveness odemocracy-related assistance programmes. Next year will see the launcho the European Endowment or Democracy (EED) an opportunityto increase resources or democracy promotion, initially ocusing thenew tool on supporting reorm in selected countries. Opening up


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societies also depends on intensied people-to-people contacts and

human mobility at large. This is a pressing priority in relations withEastern neighbours, but also a dening (i so ar atrophied) eature oa renewed relationship with Southern partners. On top o this, the EUwill have to avoid complacency on the double-standards that crippledits reputation in North Arica, trading alse stability or stagnatingreorm in the Gul, Central Asia and elsewhere.

Multi-level engagementThe Union is well placed to pursue multiple levels o engagement atonce, which requires a strategic approach upstream to connect dierentinitiatives downstream. From Asia to Latin America, the EU has beenshiting emphasis rom inter-regional relations to bilateral partnershipswith major actors such as the BRICS (Brazil, Russia, India, China andSouth Arica). The pursuit o bilateral ree trade agreements (FTAs)

with a range o Asian and Latin American countries has paralleled orreplaced stalled negotiations with the Association o Southeast AsianNations (ASEAN) and the Southern Common Market (Mercosur).With the Doha round stagnant, the EU and the United States (US) areedging closer to a major trade deal. The contributors to this publicationargue that diversiying ormats o dialogue and cooperation tspolitical trends in other regions. However, the EU should not mimicthe balance-o-power approach o other large powers. It should

continue to invest in regional cooperation and integration where thereis demand or it, playing to its strengths as a rules-based regional actor.

Following the EU-Latin American summit in January 2013, theEU should articulate a more sophisticated approach to this large andragmented region, reconciling partnerships with Brazil and Mexicoand engaging sub-regional bodies, depending on the issues at hand.Enhanced support to the Arican Union (AU) and other organisationssuch as the Economic Community o West Arican States (ECOWAS)will be crucial in 2013 to manage creeping instability or open confict


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in the crisis belt stretching rom the Sahel to the Horn o Arica. In

Asia, the EU should help deuse geopolitical tensions by investing ina closer partnership with ASEAN, to strengthen dispute settlementmechanisms and build regional resilience, including against recurrentnatural disasters. The EU should also develop a more strategic approachto East Asia and enhance consultations with the US to promote regionalstability. Next year the EU should ocus bilateral partnerships withmajor and middle powers on cross-cutting policy priorities, notablyclimate change and resource issues, dealing with traditional and non-

traditional security challenges including via its Common Securityand Deence Policy (CSDP) and democracy promotion.

A whole-o-the-Union approach

The EU is a unique catalyst o resources, networks and experience,drawing on its dierent institutions and member states. But this

variety o tools can turn rom an asset into a liability i not ramedby an overarching approach based on a shared analysis. Institutionalsegmentation and dierent national agendas have oten hampered thecoherence o EU external action, and the credibility o the Union.More than three years since the entry into orce o the Lisbon Treaty,it is imperative or EU institutions and member states to upgrade theirpolicy-making sotware and move to a whole-o-the-Union approach.This approach rests on three pillars, namely the collective denition

o the EUs interests, the raming o a policy mix that draws on themany instruments o the Union, and the leveraging o the clout o EUmember states or common goals. A truly joined-up approach shouldalso be fexible, as various policy tools should be mobilised based onneeds, and dierent member states can take the lead on dierent issuesdepending on their priorities and expertise.

The EU has adopted two comprehensive strategies or the Saheland the Horn o Arica, and their implementation has included newCSDP operations, development assistance, diplomatic engagement


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and humanitarian action. However, their application has suered

rom dierent lines o command and reporting and, in the case o theSahel Strategy, events on the ground have rapidly overtaken originalplans. The current debate on ostering a comprehensive approach tocrisis management ollows similar eorts at EU level over the pastdecade, albeit in a new bureaucratic context. Its output is expectedin early 2013. However, a comprehensive approach is not aboutprocedures but politics.

No aligning o instruments on paper can replace a commongeostrategic assessment o the challenges the EU aces. In 2013, it willbe urgent to produce and apply this assessment to the dangerous seto connected crises aecting the Middle East that are threatening thevital interests o the Union. In particular, tensions surrounding the Irannuclear dossier may come to a boiling point and threaten to break intowar. The EU cannot x these crises on its own but needs to explore

new options to avert urther destabilisation, and anticipate eventsrather than react to them. Sanctions, while useul and justied, cannotsuce to deliver a political solution to internecine confict in Syriaand the Iranian nuclear issue. The drit o the Arab-Israeli confict isprecluding the two-state scenario advocated by the Union, while thelatter ails to use its leverage on either party. On both Iran and theMiddle East peace process, close dialogue and cooperation with the USwill be critical to make progress and avoid confict.

Foreign policy starts at home

Size may not suce but it does matter, notably in a world oheavyweights like the US, China, Russia and, in perspective, Brazil andIndia. The EU gives scale to internal policies with important externalimplications, thereby strengthening the collective clout o its memberstates and helping shape the terms or international cooperation. Ocourse, the connection between internal policies and the externalprojection o the EU is nowhere as crucial as when addressing


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the economic crisis, as Pedro Solbes argues in his preace to this

publication. The legitimacy and prosperity o the Union are at stake.But other internal policies can have a signicant impact abroad. Forexample, completing the internal energy market is a core dimension oEU energy security, alongside a shared approach to the diversicationo supply and transit options. The recent antitrust investigation intopossible market abuses by Gazprom in Central and Eastern Europe isan example o the relevance o internal competition law or EU externalrelations. However, member states avour dierent routes to channel

gas rom the Caspian to Europe, with the imminent launch o SouthStream, running rom Russia to the Balkans, potentially undercuttingthe Nabucco-West pipeline project.

The EU should develop a more coherent position on energyand resource issues in 2013, taking into account the medium-termimplications o the hydrocarbon revolution in the Atlantic basin (shale

gas in the US, deepwater oil and gas in the South Atlantic). Besides,the EU should show the way on developing and deploying low carbontechnologies. This entails agreeing new internal standards on resourceeciency and more ambitious targets or binding emissions reductionspost-2020. The EU also needs a joint approach to secure the supply oraw materials, as opposed to separate national initiatives.

Conclusion

The EU is a power unlike any other but whether this is an advantageor a disadvantage is up to Europeans themselves. Member states havea choice: to seriously invest in EU oreign policy as a springboard orglobal infuence, or use it as an occasional platorm or joint initiativeswhen national or other options are precluded or less protable.Renewing EU oreign policy in 2013 requires ocusing on the manyareas where the Union can make a real dierence in ways that itsmember states or other major international actors could not. That


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means pursuing a oreign policy that is consistent with its values,

but also suited to match challenges and opportunities with pragmaticinitiatives, leveraging the scale o the EU where relevant. It alsorequires EU institutions to overcome untenable bureaucratic divides,and make a sharper contribution to the shared strategic assessment andimplementation o common priorities.


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1. Human rights anddemocracy: weaving the silverthreadRichard Youngs

To its credit, the European Union (EU) has not allowed the destructivetides o economic crisis wash away its commitments to human rightsand democracy. Indeed, since the eurozone crisis erupted, the EU has

introduced several new policy instruments and upgraded some o itsexisting democracy support mechanisms. Unsurprisingly, these newinitiatives currently rest precariously on the shiting sands o a highlyuncertain global and European context. Many represent interesting andpromising new conceptual departures that still need to be given tangibleorm. They co-exist with embryonic realpolitik in other policy areas suchas trade and security. Decisions taken by EU leaders in 2013 will show ithe aint stirring o new momentum behind human rights and democracy

policies proves itsel meaningul or ephemerally insubstantial.

Signs of momentum

Perhaps surprisingly, the eurozone crisis has not gutted EU human rightsand democracy policy. It may not quite be the silver thread binding allother areas o oreign policy, as EU oreign policy chie Catherine Ashtonhas claimed. But the human rights strategy has weathered the crisis betterthan many might have expected, and has even registered some advances.


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The EU has retained a relatively well-balanced geographical coverage

in its human rights eorts. Naturally, much ocus has been on the MiddleEast and North Arica (MENA). But the Arab spring does not appear tohave crowded out renewed eorts elsewhere. I anything, it has acted asa catalyst or matching initiatives in Eastern Europe and the Caucasus. Arenewed ocus on rights questions is also evident in Russia, Central Asia,West Arica and some parts o South Asia.

The EUs use o democracy-related sanctions has increased.

Whether such punitive measures are eective or not, they do denotecommitment. Libya, Syria and to a lesser extent Iran have representedthe most prominent cases in this trend. Aid sanctions made a dierencein nally pushing Laurent Gbagbo rom oce in Cte dIvoire. Themain European donors including the European Commission, theNetherlands and the United Kingdom (UK) have either rozen orheld back aid to Rwanda on human rights grounds, and new agreements

and initiatives have been withheld rom Belarus and Ukraine. EvenGerman leaders, who have oten been criticised or avouring energydeals over human rights in their relations with Russia, are beginning tospeak out against the excesses o second-term Putinism. The EuropeanCommission has also proposed legal obligations to make EU companiesdisclose all payments to oreign governments.

European unding levels or human rights and democracy have not

dipped dramatically. The 16 EU members o the Development AssistanceCommittee (DAC) o the Organisation or Economic Cooperation andDevelopment (OECD) gave $5.5 billion to the government and civilsociety category in 2010, higher than in 2009 and only slightly lowerthan the highest ever allocation o $5.8 billion recorded in 2008. Europesbiggest under o democracy and human rights initiatives, Germany, hassteadily increased its allocation to the OECDs government and civilsociety category to over 1 billion in 2010, up rom 800 million in2008. In the UKs aid prole, government and civil society has risen tobecome the second highest category, behind allocations to health.


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Funds rom the EU budget allocated to democracy and human

rights rose 5.5 per cent in 2012. The budget o the European Instrumentor Democracy and Human Rights (EIDHR) has increased each year.The EUs 2008 Agenda or Action on democracy support was inert,but is now nally moving orward with operational strategies in ninepilot countries. Plus, a new EU human rights special representative wasappointed as part o a beeed-up EU human rights strategy introducedin July 2012. This strategy includes a 36-point action plan, a promiseo concrete deliverables, ocal points in delegations, and an increased

number o human rights dialogues.

The EU has also added a plethora o new democracy and humanrights instruments to its European Neighbourhood Policy (ENP).Under the rubric o the Neighbourhood Civil Society Facility, a und,civic groups are more requently included in human rights dialogues.While the EU has remained cautious in its support or political reorm

in the Middle East, it has spoken out more clearly in democracysavour; held back some promised unds rom non-reormers likeJordan; and oered support to a wider range o local political actors.In addition, an EU-Russia Civil Society Forum has been establishedin Prague and another new initiative specically targets support toBelarusian activists. In Burma, EU governments and the EuropeanCommission have moved quickly to oer unds to support a humanrights commission, along with administrative, judicial and police

reorms, on top o basic development assistance.

The European Endowment for Democracy

Perhaps the most concrete maniestation o the seemingly reinvigoratedEU commitment to democracy and human rights is the EuropeanEndowment or Democracy (EED). Ater two years on the drawingboard, 2013 will be the year the EED starts unctioning. The rationaleor the EED is to operate at arms-length rom EU institutions and


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in a non-bureaucratic manner. It will be nanced through voluntary

contributions rom member states and will be able to apply or EUunding. It is likely that the EED will ocus on transition countries,with an emphasis on the European neighbourhood. The next 12months should show whether the EED will mark a signicant upgradein European democracy support or will be merely another low-keyaddition to a plethora o existing unding mechanisms.

The EEDs challenge will be to nd a distinctive niche in the eld o

democracy support, operating in a more political manner than existingEuropean oundations, institutions and unding agencies. For example,the EED should support projects that cannot gain EU help due tobureaucratic restrictions or political reasons, such as helping emergingpolitical parties, non-registered bodies and Islamist organisations.This will require the EED to be more pre-emptive and opportunisticthan the other more cautious and staid European sources o unding.

However, it remains uncertain how empowered the EED will be tosupport political parties. This crucial aspect o its mandate must beclaried during 2013.

Rather than duplicating the scatter-gun approach o otheroundations, during 2013 the EED should identiy a small number ocases where events have begun to move in a signicant ashion and whereoutside support can make a discernible dierence. Examples might

include Burma, a possible post-Assad Syria and a now-fuid Georgia. Inthese cases, it might provide seed unding that other budget lines such asthe EIDHRs then take over so as to sustain projects over a longer term.

The EED can also distinguish itsel by attempting to oer protectivehelp to democrats in the kind o high risk environments that Europeangovernments tend to shy away rom. It should prepare the groundor tomorrows democratic transitions, even as it works in countrieswhere breakthroughs have just occurred. Potential candidates mightinclude Belarus, Azerbaijan or Bahrain. It will need to nd a modus


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operandi to help build coalitions or change prior to the tipping-point

o revolution. The more pre-transition coalitions can be widened toinclude a variety o political interest groups, the more likely states canavoid the kind o violent rupture witnessed during the Arab spring.

The EED should also oer more fexible unding than otherEuropean sponsors. For instance, applicant civil society groups shouldnot be required to undergo cumbersome tendering procedures, norshould co-nancing by beneciaries be a prerequisite or unding. The

EED will also need to work out how to make support more demand-driven and aligned with locally dened priorities, and it should providerecipient organisations with grants or core institutional unding unds rom other sources usually only cover project costs.

As it begins unctioning in 2013, it will be crucial or the EED todemonstrate that it is capable o making ully independent decisions,

especially since dierent institutions may seek some tutelage overthe new body. The EED will have myriad institutional jealousies toovercome, rom member state unders and the various arms o theEuropean Commission. But i it is to be o any value, the EED mustestablish unequivocal operational independence, and avoid beingutilised by any one organisation or sector o opinion.

Its level o unding will also need to be determined more

satisactorily as 2013 progresses. The EED needs a serious level ounding, several times in excess o the 14 million committed so ar.In the absence o this, it will simply invite the perception that the EUis not serious about democracy. A poorly unded new body will becounter-productive. Moreover, money committed rom member statesand the Commission should be additional to amounts already allocatedunder other initiatives. The EED should represent an overall increasein the level o European unding dedicated to democracy; it should notentail a mere reshufing o existing unds rom other initiatives. Eveni some unds are moved rom less eective budgets (such as those


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sustaining technical twinning programmes in the neighbourhood) to

the EED, some support should be additional. All this constitutes achallenging agenda or the EEDs rst year.

Challenges ahead

In addition to ne-tuning the unctioning o the European Endowmentor Democracy, European human rights and democracy policy will

need to tackle other challenges in 2013. The act that unding levels ordemocracy and human rights have not decreased is laudable, but owesmuch to multi-annual commitments cast in stone prior to the crisis.As aid cuts are starting to bite, member states will increasingly beobliged to reveal their development spending priorities. The EuropeanCommission has bid or a 50 per cent increase in the EIDHR budgetor 2014-2020, which would result in an allocation o just under 500

million during this period. It remains to be seen how this proposalares in budget negotiations during 2013.

European human rights and democracy policies have retainedsome momentum, but policy-makers acknowledge that the changingglobal order requires qualitative changes to the ways in which Europesupports democracy. To date, most European policies have oered onlyincremental gains at best, alling short o a more ambitious and eective

democracy-support strategy. For example, the EU should link itsdemocracy policies with its strategies or more eective multilateralism.To be successul, uture democracy support should be carried out by abroader range o partners beyond traditional US and European unders.

Despite a rhetorical commitment to multilateralise democracysupport, little has been done in practice to build partnerships withnon-Western emerging democracies such as India, Brazil, Turkeyand Indonesia. The EU should try to inject some substance into thiscommitment during 2013, in part to help avoid mistrust rom emerging


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democracies. Plus, some rising democratic powers like Brazil and India

are ormal strategic partners o the EU, a mechanism which includesannual summits to discuss areas o common interest. The Union shouldurther develop these ocial partnerships, moving rom a largelytransactional to a more values-based concept o new alliances.

Furthermore, support or democracy externally is not easilyseparable rom challenges to democracy internally. The EU aces its ownproblems: democratic backsliding in a number o member states, rising

illiberal populism and a deepening democratic decit. To be credibleglobally, the EU will need to do more to saeguard democracy inside theUnion. In the last two years, or example, the EU has struggled to reverseilliberal trends in Hungary and Romania. Plus, the strains o economiccrisis may worsen these trends within Europe during 2013. Democracysupport cannot only be about projecting liberalism outwards; the EUneeds to strengthen its internal democratic identity too.

Conclusion

The international pushback against democracy is not over andshould be tackled with greater verve in 2013. The excitement othe Arab spring and Burmas opening-up have somewhat divertedattention, but a generic problem still lurks: rom Russia to Egypt to

Venezuela, governments are cutting o international support to civicorganisations. The Arab spring presents a particular dilemma: the EUmust decide i it is happy to continue supporting only a select numbero Arab reormers, in largely reactive ways. More generally, the EUwill need political will and tactical creativity to neutralise squeezesby authoritarian regimes on international links between democracyactivists. This will require the EU to raise democracy support to ahigher level o political diplomacy in 2013.


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2. Leading on climateand resourcesBernice Lee and Diarmuid orney*

Introduction

The European Union (EU) has been a longstanding champion inglobal climate politics. For much o the past 20 years, Europeanssaw the EUs leadership on climate change as a key plank o itsexternal relations and, to some extent, a source o its normative orsot power. Backed by domestic environmental and competitivenessagendas within many member states, the EUs advocacy has beencritical in pushing climate change up the global public policy agenda.At the EU level, the adoption o the Energy and Climate Package

in 2008 marked the alignment o the energy security and the globaldecarbonisation agendas.

In terms o external diplomacy, climate change and clean energyhave acted as a ocus or cooperative activities with many countries.Many bilateral projects were developed, including on cleandevelopment mechanisms, clean coal with China and India, as wellas deorestation with Indonesia. Strategic partnerships were also

* The authors wish to thank Antony Froggatt or his contribution to this text.


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established with key states and regions. Examples include the EU-

China Partnership on Climate Change (since 2005), the EU-IndiaInitiative on Clean Development and Climate Change, or the JointArica-EU 2011-13 Action Plan.

In recent years, the continuation or up scaling o these collaborativeactivities has become more challenging. This is due to a combinationo actors: the European debt and nancial crisis, high and volatileresource prices, and the stalemate in global climate and trade arenas

(and the perceived ailure o EU climate diplomacy in Copenhagen).These ault-lines are undermining the coherence o EU strategy onenergy and climate change.

Today, the external dimensions o the EUs energy and resourcepolicy are more aligned with the trade and investment agenda, ocusingon market access, market expansion and investment. This is partly

driven by growing worries over resource security. The Europeaneconomy is heavily dependent on imported raw materials, amountingto 1,600 million tonnes in 2011. A large and rising share o the EUsenergy is imported 80 per cent or oil and over 60 per cent or gas.These dynamics, which in turn are underpinned by dierent prioritiesamong member states, have made it more dicult or the EU to leadin the international arena.

Challenges

In the energy sector, coordination between dierent EU institutions,and among member states, continues to be challenging. Underthe Lisbon Treaty, energy policy became an area o joint EU andmember state competence, though national governments reserve largeautonomy in this domain. The Lisbon Treaty also called or urthercooperation in the EUs external relations on the global environmentand the sustainable management o global resources. The emphasis


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on collective coordinated action and coherent energy diplomacy with

external partners was also underscored in a 2011 communication onneighbourhood countries the major energy suppliers and consumers,as well as the transit nations.

Not surprisingly, national preerences oten undermine commonnegotiating positions, or example on the routing o Russian gaspipelines to the EU. The same also applies to the climate changeagenda. Despite the 2011 Joint Refection Paper by the European

Commission and the European External Action Service (EEAS) (andan endorsement rom EU oreign ministers on the three areas oopportunities or action), criticism has been levelled at the EEAS orits ailure to adequately take up the climate change agenda and at theDirectorate General or Climate Action (CLIMA) or not devotingsucient resources to outreach activities with third countries.

In any case, the energy mix and investment strategies in dierentEuropean countries also aect the EUs ability to implement aconcerted external energy and climate policy. Some member statessuch as Belgium, Germany and Italy have moved away rom nuclearpower ollowing the Fukushima disaster in Japan, while otherslike the United Kingdom (UK) have not. There are also signicantdierences in positions on other energy sources like renewableenergy. These divergences within the EU are maniesting themselves

at a time when regional approaches to energy and climate change areincreasingly important, with a view to structuring price and supplydynamics and gaining benets o scale. These dierences, thereore,are giving rise to ractured external policies on climate change, energyand resource security.

These divergences are equally acute when it comes to a common EUposition on resource security. The 2011 Communication on Resource-ecient Europe is one o seven fagships o the Europe 2020 strategy.It called or greater international cooperation to reduce resource


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supply risks (or commodities, raw materials, biodiversity and waste),

to mitigate the rise in global demand and to enhance the exchangeo skills, technologies and best practices. However, in the absence obinding EU legislation on resource eciency or specic targets orindividual sectors and products, it is unclear whether the EU will beable to improve resource eciency.

Similar challenges apply to the Raw Materials Initiative o theEuropean Commission, which aims to improve supply security or

various raw materials and speciality metals such as rare earths. Manylarger member states are pursuing national strategies to mitigateresource risks that are not necessarily closely aligned with EU-wideinitiatives. Germany, or example, is pursuing both an ambitiousnational resource eciency programme (ProgRess, launched inFebruary 2012) and bilateral resource partnerships with emergingproducer states such as Mongolia or Kazakhstan, with ew links to

ongoing EU initiatives. Frances close cooperation with resource-richstates in Arica is another example.

Objectives for 2013

Looking orward, three areas are critical to enhance the eectivenesso EU external engagement on energy, climate change and resource

security.

Leadership in global regimes and norm-setting

The EU has played a critical role in the establishment o the globalclimate regime, notwithstanding the challenges and the currentstalemate. Today, ragmentation among EU member states ismaking it harder or the EU to drive new thinking and initiativesat the multilateral level whether on climate change or resourcegovernance.


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On global climate change, or example, the EU must continue to co-

lead with strategic partners to steer global thinking towards a new dealin 2015 (as envisaged at the 2011 Durban summit). This should includedeepening engagement and outreach with progressive, like-mindedpartners, including through innovative ora such as the CartagenaDialogue. At the EU level, raising the ambition o the 2020 climateand energy targets would help to signicantly boost the credibility othe EUs climate diplomacy. In the medium term, clear and bindingdomestic climate and energy targets or the post-2020 period will help

create a common position that will enhance eectiveness o multilateralengagement. Outside o the EU, expanded support through externalaid or other nancing support and strengthened partnerships withprogressive countries are also critical. This could include scaling uppartnerships with Arican states to change investment patterns in theregion towards lower carbon pathways.

More strategic engagement and partnerships are also needed withemerging economies and larger developing economies, especially withkey stakeholders within these countries like businesses in addition toormal governmental relations. In India, or example, the EU and itsmember states already have ongoing operations amounting to around3.1 billion, including clean energy investment rom bio-gas in NewDelhi to a solar photovoltaic plant in Sakri. The EU together with thebusiness sector could acilitate more o these types o activities across

the developing world.

New and practical partnerships

Greater cooperation between member states and EU institutions isimportant, but too much ocus on coordination can lead to inactionand lost opportunities. EU players need to be more strategic andpragmatic in their external relations vis--vis energy, climate changeand resources, not least to determine whether to pursue multilateral orbilateral initiatives with third parties. The EU can play a vital role in


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helping to increase coordination and reduce replication across activities

pursued by member states. However, while on-the-ground coordinationmechanisms have been developed progressively by Commission ofcialsand member state diplomats based in third countries, these have ocusedon sectoral policy areas, resulting in the creation o silos between deeplyinter-connected policy felds such as climate change, energy, and naturalresources. In short, progress towards one orm o coordination hasgenerated another orm o division.

Where appropriate, the EU can use its collective market powerto spearhead change in low carbon global markets, particularly toenhance the relationship with the emerging economies. The re-electiono President Barack Obama oers an important opportunity or theEU to renew its eorts or international cooperation on low carbongrowth. Higher priority should be placed on Russia in light o theexisting trade relationship in raw materials, especially energy, and the

common challenges o environmental protection. The EU and therelevant member states should ensure that Russia, which holds thePresidency o the G20 in 2013, will tackle international energy andresource governance in the agenda o the orum, not least to enhancesupply and demand security.

Demonstrating the viability o green growth and resource efciency

It remains critical or the EU as the worlds largest ree trade area to demonstrate the economic viability o moving towards a lowcarbon economy within a long-term ramework. Such measures buildconfdence, which not only acilitates investment but also shows intent.Building political support or post-2020 EU targets could be one o theshort-term objectives. Smart policy must be developed to address bothclimate change and resource security simultaneously.

One o the greatest potential areas o contribution rom the EUlies in the development and deployment o new technologies and their


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integration into existing systems. As these new technologies move

rom niche to mainstream, their production and integration at scale arecreating new challenges. The rapid deployment o renewable energytechnologies in some member states testies to the need or smartgrids and technologies, in particular or electricity storage. The next(eighth) EU research Framework Programme, which starts in 2014,should ocus more o its resources in these areas. These include newsupply issues or new materials as well as challenges in supply chainscoordination. The EU should become more pro-active in driving

improvement in resource eciency worldwide, through setting globalbenchmarks, mapping resource availability and recycling standards.

Conclusion

Common action requires enhanced capacities and coordination

between EU member states and institutions. Existing structures, suchas the EEAS, need either to place greater emphasis on this area orencourage others to play a more active role.

Climate and resource policies need to be integrated into otheroreign policy tools and objectives to enable greater engagement andscope o action, such as on health, trade and development issues. Oneway to do this would be to re-launch the EUs Green Diplomacy

Network (GDN), which was launched in 2002. Chaired by the EEASsince January 2012 the objective o the GDN is to work towards abetter integration o the EUs environment policies into its externalrelations. However, the GDN has delivered limited added-value todate, partly owing to divisions between the Commission and memberstates, but also because o ragmented institutional and policy agendason climate, energy, trade, and other areas o EU external relations.

A re-launched and reinvigorated GDN could act as a ocal point orEEAS, Commission and member state diplomats working across a range


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o issues rom climate change and energy to trade, environment, and

natural resources. This could help to break down some o the sectoralpolicy silos that currently exist in the EUs outreach activities in thirdcountries, and in particular, could increase the scope o the networkto work on energy and resource eciency and governance issues. Indoing so, the EU could ensure that these environmental concerns andresource governance be integrated into existing diplomatic eorts.Given the importance o these issues, it could also add value to theactions o member states and the EU in third countries.


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3. Why the EU needsthe military optionDaniel Keohane

Ater a ew years o relative neglect, the European Unions (EU)Common Security and Deence Policy (CSDP) started to show signs

o revitalisation during 2012. Between 2003 and 2009, EU governmentsinitiated some 23 operations through CSDP, but only one new missionwas organised between 2009 and 2011. This changed during 2012, withthree new operations, and at least two more are in the pipeline ordeployment during 2013. More importantly, as outlined in the December2012 conclusions o the European Council, EU heads-o-governmentwill ormally discuss deence policy at a summit in December 2013 orthe rst time since 2008. The prospect o this summit discussion oers

a ocal point or EU governments to develop their thinking on CSDPduring 2013, and to reconsider why the EU needs the military option.

The strategic case for EU defence policy

Deence orms only one part o a much broader EU oreign andsecurity policy, which uses a wide range o tools rom diplomats anddevelopment workers to judges and police, and when necessary soldiers. Although the EU has initiated almost 30 CSDP missions, most


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o which have been civilian operations, the Union has not yet carried

out a military operation on anything like the scale or intensity othe United Nations (UN) missions in Congo or Lebanon, let alonethe operation o the North Atlantic Treaty Organisation (NATO) inAghanistan.

It may be that the EU does not need to carry out military operationso a similar size and nature to those o the UN or NATO. Perhapsit will continue concentrating mainly on smaller humanitarian and

state-building operations or many years to come, or which thereis already considerable demand. But looking to the uture, thisassumption seems risky or at least two reasons. First, the worldaround Europe may well become a more dangerous place. Second,the EU will increasingly have to assume roles previously played inand around Europe by the United States (US).

Europes neighbourhood is currently very turbulent: a civil warrages in Syria; Irans nuclear programme is raising serious tensions;Libya is not yet stabilised; and there are ongoing disputes in theCaucasus, amongst many other challenges. Based on recent evidence,the EU cannot be certain that key neighbours such as Algeria,Lebanon or Belarus will pursue stable paths. Besides, instability inthe neighbours o the neighbours in the Sahel, the Gul or CentralAsia might also aect European security. Added together, the myriad

o current and potential security challenges in Europes broadneighbourhood makes a heady mix.

In addition, the global strategic environment is changing. The USis re-balancing its military resources, away rom Europe towards theAsia-Pacic. This move makes sense rom a Washington perspective,but it does imply that Europeans should take much more responsibilityor most o their immediate neighbourhood. Considering theAmerican non-responses to the 2006 Lebanese-Israeli and the 2008Georgia-Russia wars, and the USs initial reluctance to intervene in


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Libya in 2011, Washington would probably be happy to leave most

uture Eastern and Southern neighbourhood crises to the Europeans(East o Suez is a dierent matter). The key point or EU deencepolicy is that Europeans may increasingly have to act alone in theuture.

There is also a shit in military power rom the European parto the West to the East. According to the International Instituteor Strategic Studies, Asian deence spending exceeded European

expenditure or the rst time in 2012. In stark contrast to Europeandeence cuts, China increased its deence budget by a whopping6.8 per cent in 2011. According to some estimates, Chinas deencebudget might even exceed EU-27 deence spending by 2020. Anotherthink tank, the Stockholm International Peace Research Institute(SIPRI), says that Brazil, India, Saudi Arabia and Japan (along withChina) are climbing up the deence spenders league, while Britain

(ourth), France (th) and Germany (ninth) are alling down thelist o top ten indeed Italy, tenth in 2010, ell o the list o topten military spenders in 2011. Furthermore, SIPRI adds that Russiandeence spending exceeded both France and Britains in 2011, pushingMoscow into third place.

Comprehensiveness, capabilities and partners:

an agenda for EU defence in 2013

The combination o the Arab spring, the US re-balance toward Asia,the shit in global military power and their own deep deence budgetcuts should encourage EU governments to cooperate more closely ondeence matters; but this will require renewed political investment in therun up to the December 2013 European Council summit. During 2013,Europeans should ocus on improving three things: combining militaryand non-military resources, developing military capabilities, and usingdeence policy as a orm o diplomacy.


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From a comprehensive approach to comprehensive action

The EU deployed three new CSDP missions during 2012: to buildmaritime capacity around the Horn o Arica (EUCAP Nestor), toprotect Juba airport in South Sudan (EUAVSEC South Sudan), andto train Niger security orces (EUCAP Sahel). Plus, another twooperations in Libya and Mali are planned or deployment during 2013.It is true that all o these operations are small, and on their own will havea modest strategic impact. However, with the exception o Libya, what

is signicant is how these new operations are not stand-alone missions,but part o a broader EU strategy towards a region. For example,EUCAP Sahel and the planned Mali mission orm part o a broaderEU strategy towards the Sahel region. Likewise, EUCAP Nestor is thethird CSDP mission deployed alongside various development projectsmanaged by the European Commission in and around the Horn oArica, again as part o a broader EU strategy or that region.

For many years, politicians and ocials have described the EUsmain added-value in international security as its ability to bringtogether a wide range o instruments, rom diplomats to developmentand humanitarian projects to military activities (known as thecomprehensive approach in EU jargon). However, this has rarelyworked well in practice, albeit at least the EU is now increasinglytrying to t CSDP missions into broader regional strategies. One

challenge or the EU during 2013, thereore, will be to urther improveits ability to coordinate all its existing instruments both in Brusselsand in the eld.

The review o the European External Action Service (EEAS)in 2013 should include a component revising how EEAS-managedinstruments, such as CSDP operations, can work more eectively onthe ground with European Commission-run development projects andhumanitarian actions towards shared and clearly dened strategic aims.The highest hurdle in this debate is the issue o chains o command.


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Currently, dierent EU activities report to dierent institutions in

Brussels, such as the EEAS or disparate Directorate Generals in theEuropean Commission. To ensure unity o action, ideally the EUwould have a single chain o command rom Brussels to the theatre oaction. The EU could learn rom the United Nations, which grants itsspecial representatives the power to direct dierent UN activities onthe ground. The Union already has special representatives (EUSRs),or example in Bosnia-Herzegovina and the Horn o Arica, andshould consider granting some o them stronger political authorityover EU activities.

Capabilities, anyone?

A second key area is developing military capabilities. Europeanshortages o adequate numbers o useul military capabilities havebeen long and widely documented. Despite deep budget cuts in some

member states, the 27 EU governments still spend around190 billionon deence each year, which is some 40 billion more than the entireannual EU budget. But the European members o NATO struggledto sustain an air war or more than six months in 2011 against Libyanarmed orces with a then yearly budget o around $2 billion.

There is a plethora o plans to improve European military capabilities through the EU, NATO, regional groupings, trilaterally and

bilaterally but only 20 per cent o national deence equipmentacquisitions in Europe are in collaboration with others. I cuts in nationalbudgets and capabilities continue on their current trends, most Europeanarmies will probably become little more than hollowed-out orces withew capabilities to oer in the uture. The two biggest gaps in Europeanmilitary capabilities identifed during NATOs 2011 intervention inLibya were air-to-air reuelling planes and technologies or intelligence,

reconnaissance, target acquisition and surveillance (ISTAR in militaryjargon). To its credit, the European Deence Agency has pushed itsmember states to develop an air tanker project, and in November


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2012, ten EU governments signed a letter o intent to work together

to acquire new tankers by 2020. During 2013, EU deence ministriesshould ocus their capability eorts on acquiring ISTAR technologiestogether.

The EUs comparative advantage in this area is that it can linkmilitary equipment goals and projects to European deence industrialpolicies. The Aerospace and Deence Industries Association o Europe(ASD) has calculated that in 2011 roughly 2,000 aeronautics, space,

security and deence companies across the EU employed 730,000people with a turnover o171.5 billion. The European Commissionalready has a role policing the European deence market, which hashelped open-up national procurement to Europe-wide competition.It has also made it easier to orm cross-border deence companiesby removing some barriers to intra-European transers o militarytechnology. During 2013, a European Commission task orce (led by

Commissioners Michel Barnier and Antonio Tajani) will report onways the Commission can help strengthen the competitiveness o theEuropean deence industry in a time o severe national budget cuts.For example, although it is legally barred rom spending on militaryprojects, the Commission currently spends around 200 million ayear on security research and technology, and some o these civilianprojects could have useul military applications.

Deence diplomacy

A third area or EU governments to consider is developing deencedialogues and cooperation with strategic partners. For example, inJuly 2012 the EU agreed with China to set up a regular dialogue ondeence and security, including training exchanges and sharing ideas oncrisis management and tackling piracy. The two sides will hold a jointhigh-level conerence during 2013 on security and deence issues. Intime, these EU-China military exchanges, alongside Chinese bilateralexchanges with EU member states, might encourage Beijing to become


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more transparent about its military build-up. The EU also started a

similar deence policy dialogue with Brazil during 2012, and thesetypes o military exchanges could be extended to other partners, suchas India, Russia, Japan and South Korea. The EU already discussescounter-terrorism, or instance, with India and Russia, and Moscowsupplied helicopters to the EU peacekeeping mission in Chad in 2008.

Furthermore, rising military powers are increasingly active inEuropes neighbourhood. For example, China has a growing interest

in Arican, Arctic and Middle Eastern security, in part because it needsaccess to secure energy supplies to sustain its impressive economicgrowth. The EU already works closely with China and Russia (aspermanent members o the United Nations Security Council, UNSC)on Irans nuclear programme, and has operated with Chinese, Indianand Russian ships (along with American, Japanese and South Koreanvessels, amongst others) in the western Indian Ocean to counter pirates

disrupting Eurasian maritime trade. Brussels should try to build onthose experiences to encourage urther cooperation with rising powerson issues o joint concern in Europes broad neighbourhood.

Conclusion

I the EU is to have an eective oreign policy in the uture, it will need a

clear sense o its strategic priorities, and what it is prepared to do throughCSDP. Many analysts have called on EU governments to re-state thepurpose o CSDP by conducting a European deence review, whichwould outline the EUs geo-strategic priorities, threats to Europeansecurity, and the types o operational scenarios EU governments shouldprepare or. CSDP will not become a vehicle or great power militarycompetition, but nor should the EU expect to be called upon to deployonly small peacekeeping operations. There is a number o potentiallyimportant tasks in-between, ranging rom responding to majorhumanitarian crises to protecting maritime trade routes.


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EU governments should consider how they intend to maintain and

develop the military capabilities that would give them the agility andautonomy to respond to uture crises and challenges. The political taskor EU governments during 2013, thereore, is to dene more clearly howthey intend to use their military resources together, and in combinationwith their considerable diplomatic, development and humanitarianassets. At the European Council summit in December 2013, EU heads-o-government should explain why Europe needs the military option.


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4. Te Easternneighbourhood: democracy,visas and energyNatalia Shapovalova

Four years ago, the European Union (EU) created an EasternPartnership (EaP) a sub-strategy o the EUs broader EuropeanNeighbourhood Policy (ENP) covering six Eastern neighbours:Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.Negotiations on so-called Association Agreements, the core parto bilateral packages aiming to oster political association and

economic integration by establishing ree trade areas, are advancingquickly with our o the six partners. Belarus is not involved inthe EaPs bilateral track and negotiations with Azerbaijan do notinclude ree trade. The EU also conducts visa liberalisation talkswith three partners: Georgia, Moldova and Ukraine. In addition,the EU has launched new initiatives, such as the NeighbourhoodCivil Society Facility and the European Endowment or Democracy(EED), to support grass-roots democracy groups. Plus, the Unionhas promised to urther increase its aid spending in the region orthe next EU budget period o 2014-2020.


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However, the EUs transormative inuence in the Eastern

neighbourhood has been limited so ar. Apart rom Moldova,political and economic reorms in other countries are either stagnantor, worse, reversing. The wave o parliamentary elections in 2012 inthe Eastern neighbourhood showed that even holding democraticelections is challenging in the region. The EUs strategic goal ocreating a ring o well-governed democratic countries in the Easternneighbourhood appears a very difcult task. The EU needs a long-term approach to the region and ocus on those areas where it canmake a dierence.

Eastern challenges and opportunities in 2013

The lack o democracy is the biggest challenge in the Easternneighbourhood. According to Freedom House, not one Eastern

neighbour is ree. All rank below the Western Balkans on democraticgovernance indicators, with Azerbaijan and Belarus doing worse thanmost Central Asian states. Georgia did have a peaceul transition oparliamentary power to the opposition in 2012, but it remains uncertainwhether the new government will actually urther democratise thecountry. Due to claims o electoral raud, Ukraines parliamentaryelections were widely seen as a step backwards. Belarus showed nosign o improvement, with President Alexander Lukashenko looking

or support eastwards.

There will be three presidential elections in the South Caucasusduring 2013. Armenia and Azerbaijan show little hope or change:Armenias president is the most popular candidate according to opinionpolls, and the electorate in Azerbaijan looks set to re-elect PresidentIlham Aliyev (who can be re-elected indefnitely ollowing a 2009

change to the constitution). Georgia will have a new president, thoughhis role will be diminished in a new parliamentary system set to comeinto orce during 2013.


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In autumn 2013, the third EaP summit will be held in Vilnius during

Lithuanias EU presidency. This will be an opportunity to assess theimplementation o the EaP Road Map adopted in 2012. By the time othat summit, the EU expects negotiations on Association Agreementswith EaP partners to be well advanced, perhaps even fnalised in somecases. The EU-Ukraine Association Agreement may prove trickiest;the EU postponed the signature o the agreement in response toPresident Viktor Yanukovychs backtracking on democracy. NewerEU member states are keen to have an agreement with Ukraine toprevent that countrys isolation, but older members are more hesitantto lit political sanctions.

Lithuania will not only prioritise the EaP during its presidency;Vilnius will also emphasise two other subjects relevant or EU relationswith the Eastern region: external energy policy and border management.The uture o large gas projects potentially aecting both EU and Eastern

neighbours energy security is likely to be decided during 2013. Forinstance, which pipeline will become the backbone o the Southern GasCorridor (designed to lower EU energy dependence on Russia)? Theenergy companies developing the Shakh Deniz feld in Azerbaijan willchoose between the Nabucco-West and the Trans-Adriatic pipelines totransport Caspian gas to Europe (the investment decision is expected byJune 2013). Simultaneously, however, Russia and some EU governmentshope to start building the South Stream pipeline that would bring

Russian gas via the Black Sea, through the Balkans into the north o Italy.Bulgaria and Hungarys investments in the South Stream project seem toundermine their previous support or the Nabucco-West pipeline.

Democratising and integrating Europe

The EUs distinctive role in the region can be strengthened i the Unionocuses its eorts on three key dimensions: supporting democracy;removing cross-border barriers; and energy security.


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Supporting democracy

Opinion polls show that the rule o law, democracy and humanrights are the values most oten associated with the EU in Easternpartner countries. The EU has promoted democracy by means oconditionality, such as visa bans on authoritarian elites in Belarus ormarket access in exchange or regulatory reorms. It has also oeredtechnical assistance, training and exchange programmes with both elitesand civil society, and extending its standards o governance in various

sectors beyond its borders. The EU has become increasingly aware othe need to work with civil society groups on democratisation, and hasconsiderably improved its assistance to non-state actors in the Easternneighbourhood. These eorts should be continued by generating moreexchange programmes and reaching out to the grass-roots level.

Since the EaP does not oer the prospect o EU membership to

the Eastern partners, the eectiveness o political conditionalityis signicantly weakened. Sector-specic conditionality works inthe region only in those countries that are determined to join theUnion and which ace relatively low costs in implementing EU rules.Conditionality proves ineective when applied to political regimesthat perceive the proposed reorms as a threat to their power. TheEUs practice o conditionality will be tested in 2013 when AssociationAgreement negotiations with EaP countries are likely to conclude.

Initially, the European Commission envisaged that progress onassociation negotiations would depend on Eastern partners ulllingpolitical criteria, such as raising their standards on the rule o law,democracy and human rights. In practice, the EU has really only appliedeective conditionality to two East European countries Ukraine andMoldova when it demanded the conduct o ree and air parliamentaryelections beore the start o negotiations. In Ukraines case the EU alsosuspended the signature o the agreement due to political repression there;but it did not apply the same criteria to the South Caucasus countries.


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I political conditions were consistently applied, the EU might be

able to conclude an agreement only with Moldova (and maybe Georgia)in 2013. But this would create a new dilemma or the European Union.I viewed as pre-accession tools, only those partners meeting basicpolitical and economic accession criteria (electoral democracy and marketeconomy) would receive Association Agreements. This in turn woulddivide the Eastern partners into special neighbours and those let behind.But i the EU relaxes conditionality, then Association Agreements wouldbe downgraded to neighbourhood agreements, losing their value as pre-

accession accords in the eyes o the most committed partners.

This is both a challenge and an opportunity or the Union toclariy its strategic objectives in the Eastern neighbourhood. I theEU remains committed to the principles enshrined in its oundingtreaties, a solution could be to sign Association Agreements withall ve countries involved in the EaPs bilateral track, and recognise

the prospect o membership or Moldova, the only partner that hasso ar met the EUs political criteria. This would have the benet obonding the neighbours to the EU and help oster piecemeal reorms provisioning market access or aid on compliance with EU sector-specic rules while setting an example to the region by oering theprospect o membership to the Moldovan rontrunner.

Building Europe without barriers

The EUs most tangible way to oer direct benets to Eastern partnerpopulations is through ree trade and people-to-people contacts.Association Agreements include Deep and Comprehensive Free TradeAgreements (DCFTAs) with the EU (requiring not only the removalo barriers but also the adoption o EU rules), which will increasecompetition in Eastern markets and improve their investment climate,contributing to their long-term economic development. This explainswhy it is crucial or the EU to conclude ree trade accords with all thequalied partners without delay.


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South Stream project would marginalise East European partners.

The Eastern neighbours, especially Ukraine as a major transit route,ear that South Stream would increase Russias infuence over theirenergy policy. Not only would Russia be able to redirect gas transit,it could also disrupt deliveries to Eastern partners without cuttingo supplies to more lucrative EU countries.

Ukraine and Moldova have ocused their energy policies ondiversication and greater eciency to lessen their dependence on

Russia. Both countries joined the European Energy Community(EEC) an initiative established by the EU and the WesternBalkan countries to oster market convergence hoping to benetrom EU investments, aid and political support. Whereas EECmembership has helped Chisinau and Kiev attract investment (orexample, Ukraines cooperation with international companies inhydrocarbons exploration and developing a liqueed natural gas

terminal), it has urther complicated their relations with Russia.Moscow, which dislikes the EEC, has used its energy-monopolyposition to stop the adoption o EU rules in Ukraine and Moldova.The EU has no leverage over bilateral gas talks between Russia andthe Eastern neighbours. But it should continue to support energyeciency and diversication eorts in the neighbourhood, andinvest in inrastructure projects that boost common energy security.

Conclusion

The EUs distinctive contribution in the Eastern neighbourhoodlies in supporting democracy and removing cross-border barriersto trade and travel. The EU should urther rene its practice oconditionality and increase support or grass-roots democraticreorm initiatives. While preserving its values-driven approach, theEU should also be realistic about how much infuence it can yieldin Eastern countries. The conclusion o the Association Agreements


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process in 2013 will be an opportunity or the EU to sha pe a more

strategic approach to the Eastern neighbourhood.

During 2013, the EU will also need to deliver on its promisesto the Eastern neighbours: they chiefy expect ree trade andvisa ree travel. This would show that the EU remains committedto integrating its Eastern neighbours (and perhaps oeringmembership one day to some o them), and to contributing to theurther democratisation o the region in the long term. The EU

cannot do much to enhance the neighbours energy security aslong as it lacks a common energy policy. With major decisions onpipeline investments in the neighbourhood pending, 2013 will be alitmus test or the EUs external energy strategy. In parallel, the EUshould increase its support or the eorts o Eastern neighbours toimprove their energy eciency and diversiy their energy sources.


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stressed the need to support deep democracy rather than prioritising

stability; streamlining conditionality on the principle o more or more;and pledging to respond to long-standing Southern demands, the threeMs: money, markets and mobility.

The newly appointed EU special representative or the Mediter-ranean, Bernadino Len, has set up task orces that assemble dierentEU and international nancial institutions to bundle and tailorEuropes support towards specic countries. Little progress has been

made on mobility, but in 2011 the EU mustered over 80 million innew unds to support the transitions. In 2012, the EU re-orientedassistance programmes and made an additional 1 billion availableor the Southern neighbourhood or the period up to 2013. It alsoincreased the lending ceiling o the European Investment Bank (EIB)by 1.15 billion and extended the mandate o the European Bankor Reconstruction and Development (EBRD) to the EUs Southern

neighbours. EU and national France, Germany, Italy and the UnitedKingdom (UK) commitments to jointly support the Arab transitionsunder the umbrella o the G8s Deauville Partnership have also beennotable, although many o these commitments have yet to be ollowedup. And, putting an end to years o complicit political exclusion,the EU and its member states have i grudgingly embraced thedemocratically elected Islamist leaders in the South.

All these eorts have genuine merit. However, the credibility othe EUs commitment to deep democracy is put in doubt by thecontinuity in its relations with countries such as Morocco, Jordan andAlgeria. Non-democratic regimes in these countries have containedmass protests by pro-actively proposing constitutional and legalreorms. However, none o these qualiy as steps towards the deepkind o democracy espoused by the EU. With little appetite to incitemore turmoil in the MENA region, the danger is that some EU policiescontinue to ollow the fawed stability logic rom which it pledged todistance itsel in 2011.


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Upcoming challenges and opportunities

The most urgent challenge is to reduce the potential negative impacto regional insecurity on Southern Mediterranean democracies. Thisincludes making headway on the Syrian crisis, on the Iranian nucleardossier, on the Sinai and in the Sahel region. The Gordian knot or 2013is how to end atrocities against the Syrian people while avoiding regionalsecurity spill-over eects. As argued elsewhere in this volume, however,the EUs infuence on the Syrian dossier is limited. But other challenges

are within the EUs reach.

Societal polarisation accompanying ragile transitions in Egypt,Tunisia and Libya threatens to undermine the legitimacy o urgentlyneeded reorms. In Egypt, conrontations over the constitution and thepowers o the government have put the Egyptian democratic transition atrisk. President Mohamed Morsis growing importance as a regional power

broker must not overshadow illegitimate power grabs that may entrenchthe power o a single political orce (in this case the Muslim Brotherhood,an Islamist party). With new constitutions due to be adopted in Egyptand Libya, parliamentary elections in Egypt (tentatively scheduled orFebruary/March) and parliamentary and presidential votes in Tunisia(June), transitioning countries will have to walk tightropes to advanceand stabilise their democratic gains during 2013.

The EU should take a double track. First, help Southern counterpartsquickly deliver results on their most pressing economic and securitychallenges. Second, adapt its policy rationale to saeguard its utureinfuence and eectiveness in the region. The broader strategic rationaleo the Unions Mediterranean policy remains in an uncertain limbo. Anew ENP policy package expected in March 2013 will probably urtheremphasise the EUs desire or a relationship o equals with Southernpartners. But it is likely to all short o questioning some o the EUs basicassumptions, including the easibility o the EUs proclaimed goals in theregion and the eectiveness o its current instruments and institutions.


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The greatest challenge or EU MENA policies in 2013 lies at home.

With economic and political uncertainty prevailing on both shores othe Mediterranean, there is little political momentum to launch grandnew strategies. Newly accountable to their electorates, North Aricangovernments want a more balanced relationship with their Europeanpartners. But in the current climate, meaningul progress on visa liberalisationand ast-track trade liberalisation seems unlikely. Against this background,and considering that the EUs leverage is slowly being eroded by growingcompetition rom non-Western actors rom the Gul, Russia and China,

eective conditionality-based policies appear increasingly unviable.

Keeping transitions on track

The EUs distinctive added-value in supporting MENA democratictransitions is threeold: the technical support it can provide to

transitioning governments; the win-win potential o Mediterranean eco-nomic cooperation; and its normative appeal as a symbol o democracy,prosperity and sovereignty sharing.

Assisting long-term institution building has been one o the EUsnotable strengths in the past, and transitioning MENA governmentscould benet rom its expertise in areas such as electoral processes, legaladvice on constitution writing, judicial reorm, transitional justice and

security sector reorm. Based on their own national experiences, manyEU member states are also well placed to provide technical support andexpertise to processes o democratisation. Both the EU and its memberstates have signicantly stepped up their oers to Libya, Tunisia andEgypt ollowing their revolutions.

However, the sensitive nature o some areas o political reorm hasled to a rejection o a number o well-meant EU oers. For example,in the area o security, the EU plans to send two missions to Libya (onhumanitarian assistance and training o border security orces), but


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broader EU involvement in security sector reorm is met with reservations

across the region. To varying degrees, oreign meddling has been a highlysensitive issue in all Arab transitions. Fears o reducing the legitimacy o aninitiative or institution, by linking it to assistance even remotely suspectedto carry oreign agendas, oten weigh heavier than the need or technicalsupport, expertise or money.

The EU can provide technical assistance in institution building onmany other issues. Across the region, the EU has pledged technical support

in education and vocational training, the rule o law, the development osmall and medium enterprises (SMEs) and job creation, health, civil society,and migration. Young parliaments in the region receive EU technicalsupport on parliamentary development and state building. The Councilo Europes Venice Commission provides advice on constitution writingto the General National Congress (GNC) o Libya and the ConstituentAssembly o Tunisia. Electoral assistance and/or observation have been

provided in Tunisia, Morocco, Algeria and Libya. Capacity building orpolitical parties and parliaments remains an underdeveloped yet crucialarea considering political sensitivities, such eorts should be ullyinclusive, balanced and transparent.

Technical cooperation has its limits, however: it can help implementpolitical decisions, but not replace them. The EUs pledge or a partnershipwith the people through people-to-people exchanges is well meant, but

its impact depends greatly on the willingness o EU member states to getserious about mobility. The positive impact o a new nancial instrumentsuch as the Civil Society Facility can easily be undermined by a lack opolitical support, such as the EUs ailure to ensure the inclusion o ullyindependent Egyptian civil society groups in a November 2012 meeting othe EU-Egypt task orce.

The stability o Arab democratic transitions depends on economicdelivery, so helping Southern economies get on their eet is a top priority.With an ambitious investment in balanced economic integration, the


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EU has a chance to saeguard its long-term infuence in its immediate

neighbourhood, and help both shores out o their current diculties. Thisdoes not only involve aid, investment and market access, but also enablingSouthern economies to take advantage o potential trade liberalisation.Despite lots o lip service, however, EU member states are reluctant toadvance on mobility and to better adapt trade liberalisation projects toSouthern priorities. The EU

Challenges for European Foreign Policy 2013

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