What further sanctions is the EU considering against Russia?

Given the recent escalation in Eastern Ukraine and the increasingly obvious Russian influence in the rebel forces, the EU looks set to impose further economic and financial sanctions on Russia.

EU ambassadors met yesterday to begin discussing the options and will meet again tomorrow in an attempt to finalise a package to send to EU leaders. They are expected to reach a decision by Friday.

Before we look at the options on the table, we should note that such agreement is not a forgone conclusion. As we have been pointed out repeatedly, there are significant divisions within the EU around sanctions. Slovakian Prime Minister Robert Fico  recently even threatened to veto another round of sanctions if they hurt the Slovakian economy. In short, many EU leaders seem to be becoming increasingly anxious about the economic impact of sanctions and the inevitable Russian retaliation – just see the concern around the Russian ban on EU fruit and veg.

All that being said, with the UK, Germany and France seemingly in favour of further sanctions – and pressure on Italy’s Foreign Minister Federica Mogherini to take a hard line ahead of taking up the role of EU High Representative for Foreign Affairs – the big states seem largely to be backing further action and willing to take on a larger share of the economic burden.

With all that in mind, here are the options that are being touted:

• Expanding targeted sanctions: This looks a done deal with further entities and persons involved in Crimea and Eastern Ukraine being subject to asset freezes and travel bans. The focus has tended to be on smaller firms and regime members directly involved. The measures would have a larger impact if Europe decided to sanction a higher profile firm (such as a state-owned bank), or a big name oligarch with ties to the regime.

• Expanding stage three sanctions: This seems the most likely option, with extensions made to the existing sanctions on finance, defence and energy sectors. This could take many forms but the main ones under discussion are – expanding the restrictions on financing for state-owned banks to any maturity above 30 days (currently 90 days), and expanding the list of banned energy tech exports and dual use goods to Russia.
  
  Other proposals under consideration include, banning a larger number of firms in these sectors from issuing debt in Europe and/or listing on European exchanges – initially this would be focused on state owned firms (of which there are many in Russia). The range in these sanctions remains large, so the impact is hard to judge. For the most part they will be focused on limiting medium to long term financing for state-owned firms. This will have a grinding impact on the economy, but as we have noted before, the Russian state does have resources at its disposal to aid firms hit by these measures.

• Banning syndicated loans to certain Russian entities: This remains a vague option, but could have a substantial impact since many Russian firms are reliant on external loans. For example, the private sector (excluding financial firms) have $142.5bn in outstanding external loans, a key source of financing for them. Given some European banks large exposure to Russia, any movement into this area of sanctions would likely be tentative and limited to very select entities (state-owned banks perhaps), under very specific terms.

• Ban on new purchases of Russian sovereign debt: this would see European entities banned from purchasing any newly-issued Russian sovereign debt. It would be quite a bold measure, and fears remain that Russia, a big investor in European sovereign debt, would retaliate in kind, something struggling eurozone countries would not want to see. In terms of impact, as the graphs above and below show, while Russia does have a sizeable amount of government debt to roll over in the coming year, the amount which is held externally is fairly limited. That said, this could well increase borrowing costs and reduce liquidity in Russia’s sovereign-debt market at a time when its economy is struggling and the state is being forced to take on an even larger role.  

One option which doesn’t yet seem to be on the table is one which the UK has reportedly called for – banning Russia from the SWIFT network. This is not surprising, since it would be a big step and could almost amount to freezing out Russia’s financial sector from Europe – a move which the EU is clearly not ready or willing to make. We will analyse this in a future blog post.

One consideration that seems to be glaringly absent from these discussions is the consideration of how effective the sanctions have been so far. To be fair, Dutch Prime Minister Mark Rutte did call for such consideration ahead of last week’s EU summit. There are already reports of them having some economic impact (both on Russia and Europe), but clearly they have not caused a change in course or approach from Russia or in Eastern Ukraine. Europe would do well to consider why this is the case in order to fully judge and best optimise any future sanctions.

Furthermore, as we have noted countless times before, the end goal and medium to long term strategy of such sanctions and the wider approach to Russia and Ukraine remains unclear. Given that this crisis has already been going for 6 months, and shows little sign of abatin,g some longer term thinking would be welcome.

Ukraine update – Russian sanctions come to the fore again

We’ve been overdue an update on the situation in Ukraine. Over the past few weeks, as anyone following the news will have seen, the situation on the ground has remained very volatile. The attempted ceasefire was widely disregarded, leading to the Ukrainian government to launch a significant counterattack once it expired.

On the international level though, there seemed to have been some de-escalation: Russia drew back troops from the Ukrainian border, the Russian Parliament removed the government’s right to military intervention in Ukraine (at Russian President Vladimir Putin’s request), Putin welcomed the new Ukrainian President and government and generally softened his tone.

However, in recent days, events seem to be taking a different turn, with several reports suggesting a potential widening of economic sanctions on Russia. Much of this seems down to the fact that many believe Russia has allowed its border with Ukraine to be deliberately permeable and may have directly helped to resupply the pro-Russian separatists both with arms and personnel.

Importantly, Germany has hardened its position on sanctions, earlier this week German Chancellor Angela Merkel said:

“Regarding sanctions against Russia, we have so far reached level two and we cannot rule out having to go further.”

Deputy Chairman of the CDU/CSU Michael Fuchs added:

“If the Russians were to go further on the road which they have recently taken [towards escalation] then we must thoroughly consider whether there should be other sanctions . . . The best sanction is to take less [Russian] gas . . . You don’t even have to call it sanctions, but just don’t buy so much.”

In the meantime, the EU has also completed much of the technical work behind imposing wider economic sanctions, particularly sector specific ones. While, Russia has previously brushed off such threats the WSJ reports today that, according to a leaked document from the Russian Finance Ministry, it is quite concerned. The document argues:

[While Russia] has adequate reserves to compensate (for) the majority of the economic losses caused by sanctions…[they could still have a] substantial impact.”

“The imposition of sanctions on individual sectors of the Russian economy could lead to a worsening of their financial condition, borrowing terms, a rise in the risk premium and an increase in the capital outflow.”

As we noted in our very first report on all of this, sector specific sanctions would certainly hurt Russia, especially in the longer run which is looking increasingly worrisome from an economic perspective.

But while Russia is right to be concerned, as we noted in our Dove/Hawk scale, the EU is incredibly divided over deeper sanctions. While some countries have hardened their stance – notably Germany and the UK – others remain quite opposed, in particular Italy (which fears a restart of economic uncertainty) and France (which remains keen to conclude its military dealings with Russia before any further talk of sanctions). As such, it seems that any clear EU decision on this remains someway off.

On top of this, the standoff over gas supplies to Ukraine continues. Russia continues to insist that all gas from now on must be pre-paid and is demanding an immediate payment of $1.95bn out of a claimed $4.5bn in unpaid bills. Ukraine is refusing to give in, not least because its worsening economic situation means such upfront costs will be very difficult to stomach and may well have to be funded by European bailouts. So far this has avoided blowing up into a Europe-wide issue since transit of gas to Europe has continued but as Ukraine’s reserves dwindle and it seeks to import gas back from the rest of Europe (something Russia said it would prohibit) it could easily quickly spiral into a very serious continent wide problem.

In other areas there have also been renewed tensions. Ukraine finally signed the long awaited Association Agreement with the EU – the factor which essentially started all of this off. Russia remains concerned by such action and has already retaliated against Moldova, with bans on certain imports, which signed a similar deal. Meanwhile, new Ukrainian Defence Minister Valeriy Heletey stressed that the army would retake Crimea, promising, “There will be a victory parade... in Ukraine's Sevastopol.” Whether or not this has publicly manifested itself yet, you can be sure such comments and actions are antagonising Putin and Russia.

The situation in Ukraine remains very fragile but more worryingly little real progress seems to have been made. Russia, Ukraine and the EU remain at loggerheads over the association agreement and gas supply. Ukraine and Russia continue to disagree over the future for eastern Ukraine and Crimea. Despite these longstanding disputes which intermittently flare up and recede, Europe as a whole seems no closer to finding a clear stance or unified position on how to deal with what is happening. 

EU states struggle to find common ground for sanctions on Russia

As we laid out in our Divided We Stand briefing, agreement among the EU 28 on how to respond to Russia's role in the Ukraine crisis is not easy to come by. And if the doorstep remarks of EU Foreign Ministers arriving in Brussels this morning is anything to go by -- that trend won't be changing any time soon.

UK Foreign Secretary William Hague, urged the EU to begin preparation of broader ('Stage Three') economic sanctions saying:

"I hope...we will continue and intensify our preparations for a third tier of sanctions, and other additional sanctions if the circumstances require it."

He was echoed by Lithuania's Foreign Minister, Linas Antanas Linkevičius, who said that Stage Three sanctions were necessary to send a 'clear signal' to Moscow, adding that unrest in Eastern Ukraine was due to "Russian-sponsored insurgency."

Meanwhile, Austrian Foreign Minister, Sebastian Kurz, took completely the opposite line arguing that the red line for Stage Three of sanctions had not been reached.

"We should definitely not, at this point, move to Stage Three [of sanctions]...We are definitely not on Stage Three of economic sanctions, and in my opinion, this is good."

On where the red line would be to step up the EU's response, Kurz argued:

"[The EU agreed that] the third step of sanctions would be unleashed if Russian troops moved into Ukraine...economic sanctions would not just hurt Russia, but they would definitely hurt us too...If we went a stage further on sanctions with every provocation, then we would already be at war."

Luxembourg Foreign Minister Jean Asselborn found himself somewhere between the two, although he remained very cautious on sanctions:

"The referendum has no legal basis so we can’t burn too much energy on this… President Putin clearly spoke out last week that the referenda should be delayed…So we will see. I think Russia is starting to think about what the big problems will be… I think Russia will return from the brink. We will not have the sanctions as the main point today."

Once again then, as Russia essentially endorses the result in the self-rule referendum in Eastern Ukraine, the EU struggles to find a clear line on how, if at all, to respond to recent events.

Will EU leaders agree on sanctions for Russia?

EU leaders have arrived in Brussels to discuss the situation in Ukraine, the details of the €11bn aid package announced by Barroso yesterday and how to respond to the Russian occupation of Crimea. At PMQs yesterday, Cameron said that the EU should "display a unity of purpose" and "speak with a clear voice". So what are the prospects for that? We look at the positions adopted by the key players below:

UK: Although it appeared that the UK was ruling out taking supporting strong economic sanctions on the basis of a leaked memo on Monday, since then both Nick Clegg and David Cameron have all said that no economic and diplomatic measures would be off the table. Foreign Minister William Hague indicated yesterday today that "we can’t make progress on that, then of course there will be costs and consequences [for Russia]". Interestingly, he added:

"I think the UK and France are very closely aligned. The Prime Minister has held discussions with President Hollande and with Chancellor Merkel over the last couple of days by telephone."

Germany: As ever the one to watch. The government has hinted that sanctions could be on the table but Foreign Minister Frank-Walter Steinmeier has stated his preference for a political solution and warned against "adding even more fuel to the fire." There is a lot of resistance to sanctions in Germany, and not just in the SPD which has traditionally been seen as favourably disposed towards Moscow. Senior CSU MP Peter Gauweiler, said that:

“If Germany and Russia had a good relationship, then that would be good for Europe. We are looking for a partnership with Kiev, but just as much with Moscow too." 

The German Chambers of Commerce and Industry (DIHK) has warned against sanctions on Russia, saying they “could significantly harm Germany”. Germany's relatively strong dependence on Russian energy sources (30% of its gas and 35% of its oil) as well as its strong exports to Russia (€76.5bn of trade between the two countries annually) give it a strong incentive to avoid wide-reaching economic sanctions.

France: President Hollande has said that, “Russia has taken the risk of a dangerous escalation” – and spoke of the possibility of sanctions, but did not specify what kind, although Foreign Minister Laurent Fabius said they could be "significant".

Italy: Italian Foreign Minister Federica Mogherini has said “the option of a military solution doesn't exist”, but the government's official position is that violations of Ukraine’s sovereignty and territorial integrity “would be totally unacceptable for Italy”. In principle, Italy would back targeted sanctions on Russia. Similar to Germany, though, the approach is more doveish due to higher dependency on Russian gas.

Spain: Spanish Foreign Minister José Manuel García-Margallo said today that Spain would support targeted sanctions, given that it endorsed the conclusions of the meeting of EU foreign ministers on Monday. Then he added, “I said and I say that we wish that the situation calms down and the de-escalation happens” – so the EU is not obliged to resort to sanctions.

Poland: Along with Sweden, Poland has taken the toughest stance on the Ukraine issue. Speaking in parliament yesterday afternoon, Prime Minister Tusk did not pull his punches; he demanded that the EU uses all the tools it has at its disposal, in effect calling for wide-ranging sanctions on Russia, adding that Poland was prepared for this eventuality having stockpiled significant gas reserves. He also made a pointed reference to Europe's "catastrophic" experiences with appeasement in the past.

Tusk: EU needs to be determined and use all its available tools not in order to escalate the situation but in order to de-escalate it
— Pawel Swidlicki (@pswidlicki) March 5, 2014

It now appears likely that some measures will be taken against Russia, the question is how wide ranging these will be. We assess the likelihood of a number of options in the table below:

What is clear so far is that there remains several different views among EU governments on how large a stick they should wield. The upshot is that the US will probably be forced to take the lead role in confronting Russia.

Ukraine: To the victor the spoils? What will Russia and the EU do next?

Ukraine’s future is in the balance. It could move closer towards the EU, Russia or both at the same time. It could remain a unified state, split in two or conceivably be invaded by Russia. Here are some of the scenarios which we've ranked according to their probability.

Closer ties with the EU - Ukraine was due to sign an association agreement with the EU, the cancellation of which caused the crisis in the first place. With a new government and Ukraine on the brink of financial default Ukraine will be looking for EU help and finance. Full EU membership, and certainly NATO membership, will remain off the table but the original trade agreement looks likely to be signed.
 

Partial reconciliation with Russia - It is highly unlikely that the new government will wish to move closer to Russia, and will not wish to join Russia’s Eurasian Customs Union (itself incompatible with the EU deal). That said Ukraine cannot ignore Russia - it is dependent on it for its energy, it has substantial debts with Moscow and it is its largest trading. There is also the question of the large Russian minority and Russian speaking minority that would strongly oppose Ukraine distancing itself from its Eastern neighbour. Much depends on the pragmatism of the new Ukrainian government, the Russians (President Putin in particular) and the EU - ultimately it is in the interests of all sides to ensure stable political and economic relations. 

Remain a unified state - Although the ethnic/linguistic divides are stark (see below) the split is not as straightforward as it looks. There are ethnic Russians (in the Crimea), ethnic Ukrainians who speak Russian as well as other minorities. The revolution was undoubtedly triggered by Yanukovich's decision to opt for closer ties with Russia and not the EU but widespread discontent fuelled by corruption and bad governance were crucial in bringing things to a head. As long as the new government is inclusive, remains on good terms with Russia and avoids antagonising the Russian minority too much the state should hold together.


Divided - but how?

Disintegration - If the new Ukrainian Government - backed with financial support from the EU - decides to ignore the concerns of Russian speakers in the East it risks provoking an insurrection in these regions. The ex-President is still at large and could be a focus for areas wary of coming under the control of the protest movement that they did not support. The most dangerous flash point is in the Crimea, which only joined Ukraine in a transfer organised by the Ukrainian Soviet supremo Khrushchev. Crimean Secession seems unlikely for now but it’s worth remembering the Russian Black Sea fleet is based here.

Invasion by Russia - There is a danger that if Russia feels frozen out of the Ukraine all together it could act as it did in Georgia in 2008 and seek to intervene in support of a proxy interest. In this case, if the new government were to threaten Russian interests or ethnic Russians in the Crimea, it could prove a pretext for Russian intervention. Russia could back secessionists or act in its own interest and annex the Crimea. Russia would pay a heavy price (Ukrainian military action and western retaliation on its fragile economy) so for as long as its interests are secure this remains an extreme scenario.

The stakes are high for the European Union. Ukraine has many links to EU states – parts of its territory have been part of Austria, Hungary, Czechoslovakia, Poland, Romania and further back Lithuania – but the EU should be careful. Russia has an equal claim to close relations with Ukraine and any mutually exclusive deal with the EU will raise tensions. The new government and the EU should of course establish good relations, but Russia needs to be a part of the process and so too does the large Russian speaking population in Ukraine – the EU risks confrontation if they are not included in the process.

How does the EU solve a problem like the Ukraine?

Update 13:45 - According to Antonio Delgado, Spanish Public Radio's EU correspondent, "diplomatic sources" have indicated that the UK, the Netherlands, Italy, Spain and Bulgaria are all "not keen" on sanctions, although the Italian Foreign Ministry issued a statement claiming that “In the event of the continuation of violence, we don’t rule out resorting to exceptional restrictive measures”.

Commission President Jose Manuel Barroso on the other hand is optimistic:

Following developments in #Ukraine w/ shock & utter dismay. We expect targeted measures agreed by our #EU MS urgently http://t.co/nsy4JsSKhA
— José Manuel Barroso (@BarrosoEU) February 19, 2014

*****Original Post*****

The escalation in violence in Kiev yesterday and overnight poses a huge challenge to the EU. What, exactly, can it do here to prevent continuing civil disorder on its doorstep?

As ever when it comes to EU foreign policy, the first hurdle is to actually secure an agreement among 28 member states which is difficult in itself. As we've said on a number of occasions, Catherine Ashton's European External Action Service cannot magically replace 28 foreign policy positions - this has been proved time and again over Israel/Palestine, Libya, Syria etc. When it comes to the Ukraine, these differences have been apparent in how to deal with Russia in the first place, how hard it was to push for the EU-Ukraine trade agreement, then over how to deal with the anti-government protests, and now it looks likely they will appear in whether to impose sanctions. Here is a round-up of where the key EU countries stand on potential sanctions:

UK - Europe Minister David Lidington has condemned the violence and urged "all parties to return to the path of compromise and genuine negotiation" - no explicit reference to sanctions.

Poland - As the biggest supporter of Ukraine's eventual integration into the EU, Poland has consistently taken a hard stance on the issue. Speaking in the Polish parliament this morning, Prime Minister Donald Tusk called for targeted sanctions against those individuals "responsible for the Ukraine's misfortune". However, he conceded these tended to have limited effectiveness, but argued they sent a "moral" signal. He also slammed Russian pressure and warned that a civil war was possible. In a rare outbreak of political unity, the sanctions were also backed by the opposition Law and Justice party.

Germany - The German government (and the SPD in particular) has traditionally been very cautious when dealing with Russia so as not to alienate Moscow unnecessarily. For this reason they had opposed sanctions - supported by many in the European Parliament - but Foreign Minister Frank-Walter Steinmeier yesterday noted that personal sanctions will now "surely be considered". Chancellor Merkel will discuss the situation with President Hollande later today.

France - French President Francois Hollande said that he “agreed with [Polish PM] Tusk on the need for swift European sanctions, targeted at the main responsible for these acts.”

Italy – It is unclear whether Rome's position will change following the recent developments and/or the appointment of Renzi's new cabinet but the existing position was to oppose sanctions, with Foreign Minister Emma Bonino arguing a couple of weeks ago that "it has always been easy to announce [sanctions], but it has never been easy to apply them in a coordinated fashion. To me, this doesn't seem the way to go.”

Sweden - Another strong supporter of Ukraine's EU ambitions and of the anti-government protectors, Swedish Foreign Minister Carl Bild is as expected shouting the loudest, accusing Ukraine's President Yanukovych of "having blood on his hands".

Of course agreeing on a course of action is one thing - implementing it is another and the EU simply struggles to back up its rhetoric with 'hard power' due to the nature of the EU itself. The key will be how Putin responds if the situation continues to get out of hand - how will the EU respond if Moscow intervenes more directly? As the 2008 Georgian crisis showed - when the EU initially tried to present a common front - the Russians are very adept at exploiting any divisions and they still wield substantial leverage due to the reliance of many EU members on their energy resources.

Notwithstanding the need for a political solution to Ukraine's internal problems, there is surely a wider need for the EU and Russia to come to a sensible compromise over Ukraine's future - as the map below shows, geopolitically, the Ukraine is trapped between two large political and economic blocs (the map shows the respective customs union and potential members), and any closer political and economic integration of the Ukraine into the EU triggers Russia's age-old fears about 'encirclement'.

Will Anglo-French defence co-operation be a casualty of the UK's decision on Syria?

Syria will not see a rerun of the Anglo-French Cooperation we saw in Libya

Commenting on Conservative Home's special jury on the events in Syria Open Europe's Christopher Howarth argues that Anglo-French co-operation on defence and foreign policy has taken a knock from the UK's decision to pull out of military action in Syria:

David Cameron’s Syrian fiasco will reverberate through many aspects of politics. But how will it affect the UK’s international standing?

The US may now look at the UK in a different light but, ironically, within the EU the UK’s reputation may improve. Europe tends to dislike what it perceives as rushed and unilateral military action (a UK/US-led operation is seen as unilateral). Parliamentary opposition to military action is something most EU states can easily understand and the UK’s break with the US may seem refreshing.

However, there is an important exception - the French Government. France and the UK are the only two EU states with the capability and (until now) the will to act. Recognising this, the FCO have been at pains to improve Anglo-French defence and foreign relations - UK help for France in Mali being a recent example. The FCO realise that if France and the UK cooperate they can be a powerful force within the EU and indeed the world. The most serious ramification of Syria is that these plans for Anglo-French defence cooperation may have taken a knock.

We have been here before. The last time UK foreign policy went spectacularly awry was in Suez. Then as now the UK bailed on France. We remember Suez as a lesson in the need to work with the US, for the French it was a lesson in the folly of trusting Anglo-Saxons. Things are nowhere near as bad this time but the relationship needs to be repaired.

Of course Syria is not Suez and the lessons will be different. Eden was tripped up by opposition from the US and Tory liberal internationalists, appalled by the naked pursuit of British interests. Cameron’s Tory opposition came from the descendants of the traditional wing who backed Eden, but who fail this time to see a British interest. After Suez, liberal policy makers agreed that the UK’s role in the world had shrunk and that it was a mistake to act without the US.

This time it is important to ensure that we do not accept any further shrinkage and that future US action is not spurned by the UK and an already sceptical EU. Like Anthony Eden, David Cameron has come unstuck on an area of policy that seemed to be his primary interest. Unlike Eden, Cameron has the opportunity to move on and repair the damage.


Syria: The Ins, the Outs - and the Maybes

As we noted in our previous blog post, Syria has again shown that the EU holds almost as many foreign policy positions as there are states - though we should also remember that this is an extremely complex and senstitive situation.

However, as we also note below, EU countries seem to be coalesing around at least three positions at present. One group - the UK, France and Denmark - is commited to military action with or without the UN. The second group are the definite 'outs' and the largest group is made up of those still waiting to make up their minds. Added to that there is perhaps a fourth group made up of a number of smaller states who have not expressed a clear opinion.

The table below divided the 28 EU member states into these four groups, based on our reading of the current stated positions. This is of course a very fluid table - heavily dependent on evidence, events and developments - and as ever, we welcome reader comments in case we've missed something or if a country's position changes.

Click to enlarge

Syria: Who’s in and who’s out?

Plenty to ponder over Syria

Following the alleged use of chemical weapons by the Assad’s regime in Syria, the stakes have been raised. But as the calls for international military intervention grows louder, how have Europe’s various players been lining up? Well, the EU is certainly not “speaking with one voice.” Somehow neither the Lisbon Treaty, nor the EEAS nor the arrival of Cathy Ashton has managed to magically replace 28 individual foreign policies with a single EU one. (We remain shocked!)

So when it comes to Syria, there are now three key questions for the member states: whether to take part in military action; whether to back military action without necessarily taking part and, crucially, whether to do either of these two without a UN mandate. The last is obviously key as Russia is liley to veto any UN resolution with teeth, and has already made it clear it would consider any intervention without a UN mandate a "crude violation of international law".  

So far, we count three EU countries that have signalled willingness to participate militarily even if a UN mandate isn't forthcoming – the UK, France and Denmark. France and the UK - that between them account for most of the EU's military spending - are as usual the key players in the EU when matters are moved into the domain of hard power. David Cameron will today present a draft resolution proposing action against Assad's regime in the UN Security Council "authorising necessary measures to protect civilians" in Syria. Writing in the Telegraph today, British Foreign Minister William Hague argues that:

“this is the moment for democratic nations to live up to their values…We cannot allow the use of chemical weapons in the 21st century to go unchallenged. That would send a signal to the Syrian regime that they will never face any consequences for their actions, no matter how barbarous."

Meanwhile, French President Francois Hollande said yesterday that “France is ready to punish those who took the heinous decision to gas innocents," while French foreign minister, Laurent Fabius told Europe 1 radio on Monday: "The only option that I am ruling out is to do nothing." 

Both, it would appear, very much keep the option open to press ahead without the UN. 

Germany is more hesitant. There is virtually zero chance of Berlin playing a major part in any military operation of any sort. The question is - and this is what the German debate is centred around - will it back military action without a UN resolution. Remember, Germany ended up on the same side as Russia and China - against the UK and France - in abstaining on a UN Security Council vote on Libya back in 2011. However, this move was also triggered a domestic and international political backlash, which the Germans haven't forgotten. The country's Foreign Ministry has welcomed the UK's motion at the UN.

#Syria #Westerwelle welcomes British initiative to address poison gas attack within UNSecurityCouncil. United stance needed! @foreignoffice
— GermanForeignOffice (@GermanyDiplo) August 28, 2013

And there's no lack of scepticism. Phillipp Missfelder, the foreign affairs spokesman for German Chancellor Angela Merkel's CDU party, said that,"The [German] army has, through its current international operations, already reached the breaking point," and that military action without a UN mandate is "hard to imagine." However, interestingly, fellow CDU MP Ruprecht Polenz, Chairman of the Foreign Affairs Committee of the Bundestag, said that military action against Syria without a UN mandate could be "legitimate", citing Kosovo as a precedence, adding that the use of chemical weapons was a "serious, brutal taboo, which may not remain without consequences”. However, he stopped short of explicitly calling for German involvement. 

The SPD's chairman Sigmar Gabriel has suggested that German involvement should be limited to the diplomatic front, specifically that Chancellor Merkel ought to fly to Moscow to convince Russian President Putin to change his policy.

According to Number 10, Chancellor Merkel and David Cameron discussed the situation and “agreed that such an attack demanded a firm response from the international community.” (Not that this fairly generic statement tells us much.) Germany clearly remains nervous about foreign policy meddling. 

So far Italy is leaning back too. "Italy will not take part in any military solutions without a UN Security Council mandate," according to its Foreign Minister Emma Bonino. "Even the option of a limited intervention risks becoming unlimited," said Bonino, adding that Italy was "already stretched and even over-stretched" militarily in other parts of the world.

Despite Poland's support for the EU developing a stronger and more coherent military presence, Polish Prime Minister Donald Tusk confirmed today that “Poland does not envisage taking part in a military intervention in Syria. In any form.”

Like many others, Spain hasn't yet made up its mind but it is sticking to the hope of a UN resolution. Deputy Secretary General of the Partido Popular, Carlos Floriano, said Wednesday, that the Government will decide its stance “[once it is] aware perfectly of every detail." Meanwhile the Spanish Foreign Ministry said it hoped the UN Security Council “can make decisions that comply with international law.” 

Of the smaller countries, "non-aligned" Sweden is as usual calling  for “the broadest international support possible” but leaving it open how to approach a US/UK/France led operation absent a UN solution. Fellow "non alinged" country Austria is also staying quiet. Portugal says it won’t comment on potential action, with the Ministry of Foreign affairs simply issuing the generic statement that “it is in close coordination with its partners and allies.”

NATO-member Denmark, on the other hand, yesterday signalled that it’s willing to take part in military action even absent a UN-solution, with a series of pretty robust statements from senior Danish politicians. According to an opinion poll published today, 64% of Danes are opposed to such a move, however. 

Greece is likely to come under pressure to open up its strategically important bases to the US but ANSA quotes Greek officials as saying they have themselves “ruled out the possibility of active military involvement”. 

So what about the EU institutions themselves?  We wouldn't want to forget those. They are sticking to the ‘UN Security Council’ line. As Baroness Ashton said on Monday, "Of course the Security Council is extremely important in this. It is the role of the Security Council to look and see how the international community can and should respond."

With Hermann van Rompuy, President of the European Council, also urging similar action on Syria via the UN Security Council, this begs the question, what happens if that isn't forthcoming and the UK/France and US continue to push for military action? This then has the potential to become one of the biggest foreign policy clashes between the UK/France and Brussels since the new EU foreign policy architecture was put into place.

Is Sikorski in with a chance of being the next EU foreign minister?

Europe's next foreign minister?

With the current Commission term due to expire next year speculation is already turning to who will replace the current crop – especially the ‘top jobs’ of Commission President (or will Barroso go for a Roosevelt-esque third term?) and the high representative for foreign affairs, a post currently occupied by Britain’s own Baroness Cathy Ashton.

There has been much speculation that following her widely acknowledged ‘low-key’ performance in the role (in fairness this was not entirely her fault), her successor would be a well-established ‘foreign policy star’, with Poland’s Foreign Minister Radoslaw Sikorski widely tipped. However, while Sikorski would indeed have a degree of ‘star appeal’ and foreign policy credibility (certainly when compared with Ashton), here are the reasons why we think this is unlikely.

Firstly, Sikorski is hugely ambitious and it is difficult to see him agreeing to take-up a position where his ability to seriously influence events will be limited by the well documented limitations of EU foreign policy. In particular Sikorski has ambitions for greater EU military co-operation and will unlikely be satisfied by firing off carefully worded press releases about human rights abuses in developing countries. Yet while many EU countries want to see the EEAS delivering more, many are also reluctant to hand over too much competence in the field of foreign policy decision making to the EU given very real differences of opinion on key issues – most recently Syria. Likewise, EU defence co-operation remains more realistic on paper than on the ground, not least with current spending restrictions, while the recent Cypriot crisis demonstrated Europe’s weakness in that it was willing to gamble Russia gaining greater political and economic influence on the island.

Furthermore, assuming that Sikorski genuinely wants the job, he is somewhat of a marmite character which could cost him support in national capitals. His strong neo-conservative and Atlanticist tendencies are likely to cost him support, not least in Paris, while the Germans may fear that his candidacy would antagonise Russia. Conversely, he has also become a vocal champion for greater EU integration, famously calling on Germany to play an active leading role in Europe, which could also cost him support, especially in the current climate. While his Atlanticism and his strong British links (he was a contemporary of David Cameron and Boris Johnson at Oxford) ought to secure UK support, his rather clumsly recent intervention into UK domestic politics, when he announced that Poland would not help the UK to “wreck or paralyse the EU” and listing a number of tired and clichéd 'EU myths' is not likely to gone down well in Whitehall and Westminster.

Finally, there is also much speculation that current Polish PM Donald Tusk could be being lined up to replace Barroso, in which case Sikorski's candidacy for high representative would be a non-starter.

All in all we would expect the next high representative, while likely to be more heavyweight than Baroness Ashton, will nonetheless not be someone with a personality and profile to challenge national leaders’ primacy in the area of foreign policy.

Westerwelle's Future of Europe report - worth getting excited over?

The so-called ‘Future of Europe’ reflexion group of eleven European foreign ministers, set up by Germany's Guido Westerwelle, to discuss and propose ideas on organisational and structural change in the EU held its closing meeting on Monday. Yesterday it released its final report and conclusions, the broad thrust of which is that, to emerge from the crisis, Europe needs more economic and political integration.

In terms of the economic and fiscal side, the majority of the proposals in the document have already been agreed or proposed, such as the “reinforced economic governance framework” – i.e. the fiscal treaty and a single supervisory mechanism for eurozone banks. Even the possibility of making the ESM into a fully-fledged European Monetary Fund has already been voiced. Furthermore, these proposals will only apply to eurozone members and any non-euro members who participate voluntarily.

It is therefore the political/institutional side that is the most interesting and here are the key points that we’ve picked out:

• More powers for Baroness Ashton and the EU’s External Action Service;
• More majority decisions in the Common Security and Defence Policy sphere including joint representation in international organizations where possible, and in the longer-term a European defence policy which for some members could eventually involve a European army;
• Strengthening the Commission should be strengthened so it can fully and effectively fulfil its role as the engine of the Community method;
• Moving to a super-qualified majority for future EU Treaty revisions (with the exception of enlargement) which would be binding for those Member States that have ratified them;
• A more “streamlined and efficient system” of EU governance which could include a directly elected Commission President, a European Parliament with the powers to initiate legislation and a second chamber for the member states.

Most of these proposals have been around the block once before but some journalists have gotten very excited about this, with the Guardian splashing the story on its front page. Running with a "Britain is isolated" theme it also noted that:

"The likelihood is that the 11-country consensus will swell into a majority among the EU's 27. Britain also stands apart from this. The 11 include Germany and France, the big ones, plus Italy, Spain and Poland – after Britain the biggest EU countries.”

Well, not quite.

Sure, some of these proposals are conspicuous, and certainly they pose a challenge for Britain. However, many of them have almost no chance of going ahead, certainly not in the immediate future. Firstly, the report represents less of a consensus amongst the relevent states and more of a brainstorming session with lots of dissenting views. As the note itself states:

“The report reflects our personal thoughts. We wish to underline that not all participating Ministers agree with all proposals that have been put forward in the course of our discussions, and that the Member States’ individual treaty obligations and rights within the various policy areas have to be taken into account.”

As stated above, there is significant momentum for more integration in economic, fiscal and banking affairs, but its hugely unlikely to spill over into foreign policy which exists in a parallel political sphere. This is simply a way to re-state the long-standing German desire for a Europeanised foreign policy (the practical difficulties of which have been made clear many times, most recently over Libya).

Super-QMV for treaty change won't happen either - not least since Berlin itself would block it if push comes to shove, as would Paris - unless they would be willing to risk - for example - QMV on the European Parliament's second seat in Strasbourg. 

Banking union, and calls for EU treaty negotiations to be opened by 2014 - as called for by Barroso in his 'state of the union' speech last week - is where the story is at.

The context for this whole initiative is effectively German domestic politics. While no one can question Guido Westerwelle’s European credentials, he is arguably one of the most side-lined Foreign Ministers in the whole EU, and the Future of Europe group is a way for him to show he's still a player.  For Merkel this serves as a useful exercise at a time when the German government is über-sensitive to accusations that it is not sufficiently ‘pro-European’ - but without actually having to do anything. 

Finally, it is worth contrasting the lofty idealism of such - and similar - proposals with the cold, harsh realities of public opinion. As we reported on Monday, support for the EU and the euro has hit an all-time low in Germany, in France a majority of those surveyed said that given the opportunity now, they would vote against ratifying the Maastricht treaty, while the EU debate in the Netherlands is also become more complex.

Ashton In Hot Water

Update 15:02 - Two additional twists to this story. The Telegraph's Bruno Waterfield has just noted on Twitter that an 'amended' version of Ashton's speech has now been published (see here). The controversial paragraph now reads, "When we see what is happening in Gaza and Sderot [an Israeli town less than one mile from Gaza] and in different parts of the world" - i.e. it explicitly mentions victims on the Israeli side of the Gaza strip. Amending a transcript would seem like a weird exercise had it not been for the fact that Ashton actually does make the reference to the two sides in the speech she delivered yesterday (available here, the reference is 12:30 in).

In other words, a full-scale diplomatic row has been triggered by what looks like a most unfortunate typo in a transcript...

EU foreign policy chief Baroness Catherine Ashton - or 'High Representative for Foreign Affairs and Security Policy and Vice President of the European Commission', as her official title reads - has a difficult job. In fact, its up there with managing the English national football team in terms of 'can't win' positions.

After having been on the receiving end of a barrage of criticism from left, right and centre, not least a letter signed by twelve member states in December - including Germany, France, Italy and Poland – in which they expressed concerns over the functioning of the EU's diplomatic service, the EEAS, Baroness Ashton has landed herself in some fresh controversy.

In a speech to a group of Palestinian youth in Brussels yesterday, she said,

"And the days when we remember young people who have been killed in all sorts of terrible circumstances - the Belgian children having lost their lives in a terrible tragedy and when we think of what happened in Toulouse today, when we remember what happened in Norway a year ago, when we know what is happening in Syria, when we see what is happening in Gaza and in different parts of the world - we remember young people and children who lose their lives."

This didn't go down well with the Israeli government, with a number of ministers coming out to criticise Ashton for what they see as an inappropriate comparison and reference. Defence Minister Ehud Barak said, "I hope that the EU's foreign minister will quickly realise the mistake she made and withdraw her comments." Opposition leader Tzipi Livni added,"There is no similarity between an act of hatred or a leader killing members of his nation and a country fighting terror, even if civilians are harmed."

Interior Minister Eli Yishai went even further and called for Ashton's resignation:

"The statement by Lady Ashton further harms the ability of the European Union to be an honest broker [between Israel and the Palestinians...[Ashton] can no longer serve in her position."

In a statement today, Ashton's spokesperson sought to clarify the remarks:

We want to make this clear, because her words yesterday...were grossly distorted by one of the news agencies. In her remarks, [Ashton] referred to tragedies taking the lives of children around the world and drew no parallel whatsoever between the circumstances of the Toulouse attack and the situation in Gaza.

Judge for yourselves - Asthon's full speech is available here, with the last paragraph being the key one for the discussion.

As we said, Ashton really does have a difficult job.

A crude agreement

On Monday Brussels announced an EU-wide ban on oil contracts between Iran and member states. The hope is that these sanctions will choke the Islamic republic’s finances, and prevent its nuclear programme from progressing further. However, as with countless other EU foreign policy objectives, the goals look to have been undermined by the lack of consensus between EU member states.

Diplomats admitted that negotiating the embargo had been difficult. Quite an understatement given that the enforcement of the embargo has been delayed six months just to ensure that an agreement could be met. The key dispute comes from the fact that Greece, Italy and Spain are far more dependent on Iranian exports than their Northern neighbours. Greece imports up to a third of its oil from the Islamic state, with which it has negotiated a favourable rate. Italy and Spain buy 10% of their oil from Iran.

Forcing these countries to source such a large percentage of their oil from another producer in such a short time frame will undoubtedly put additional costs on their economies (not to mention the potential for higher prices which we discuss below). This seems slightly counterproductive to say the least when they are already struggling to stay afloat in the storm of the eurozone crisis. Not that you can abandon all policy goals on the basis of economics, but it highlights the breadth of impact which the eurozone crisis will continue to have until a lasting solution is found.

That said, fears of an impending energy crisis are alarmist. For one, Saudi Arabia has assured European governments that it will increase its production capacity to replace Iranian imports, which represent a fairly small share of overall EU oil consumption. Gaps in supply can also be met by Libya, which is set to boost exports after a year in remission.

A massive price hike is also unlikely, with refineries taking the hit more than consumers. Providing it does not switch to other Middle Easter suppliers, China will become the biggest consumer of Iranian oil, creating a monopsony through which it can drive down prices. Iran has shown itself willing to sell oil under the market price during previous embargoes. An interesting side effect then is that China could end up benefitting most from this ban by sucking up the excess Iranian supply at low prices. Not the EU’s fault, but it seems to undermine any prospect of the embargo having a huge financial impact on Iran.

Will Europe’s energy future be unaffected then?

Possibly, if two conditions hold:

- First, Iran must not blockade the Strait of Hormuz, through which Europe accesses Saudi oil. This seems unlikely since doing so would likely cause a full scale military conflict as the US has vowed to defend EU cargoes.
- Second, Iran must not throw a spanner in the works by cutting off oil supply immediately (something which Europe could not cope with as the delayed start of the embargo shows).

Will any of this bring Iran ‘back to the table’?

As EU High Representative on Foreign Affairs Catherine Ashton outlined, the aim is to “bring Iran back to the table”. It’s not clear this will be the case - Iran has survived previous embargoes, some of which have even hardened support for the regime. Without China and India joining the embargo (highly unlikely) Iran may not feel much of a squeeze. Even if they did, oil prices would skyrocket creating even more problems for the eurozone.

All in all then, this embargo has been a bit of a mess. Whether or not the aims are valid, it has once again highlighted the disparities in foreign policy goals within the EU, and therefore the limits of a combined foreign policy. It also brings home that, despite its size, the EU’s power is to some extent dwarfed by that of China and the US. Ultimately, their decisions will make or break this embargo, not the EU’s.

The New Battle For Libya

The curtain has been drawn over the Paris conference on Libya. Now that the time for photo-ops and ritual calls for "reconciliation and forgiveness" has passed, another 'battle for Libya' is under way, with all the main countries participating in the military operations elbowing their way towards the front of the queue for profitable energy deals with the new Libyan government.

In this regard, France is undoubtedly the early front runner. Most people in Paris have seen the fall of the Gaddafi regime as 'Sarkozy's victory'. The same people now think that France has the right to claim preferential treatment from Libya's National Transition Council (NTC). French left daily Libération - definitely not Sarko's favourite reading - yesterday suggested that France had started to pursue its chacun pour soi (every man for himself) strategy well before the end of the military operations. The paper published a letter sent by the NTC to the cabinet of the Emir of Qatar in April, explaining that the NTC had committed to granting Paris priority access to 35% of Libya's crude oil in return for France's "full and permanent support."

As usually happens in these kind of situations, the NTC immediately denied the existence of the letter. French Foreign Minister, the seasoned Alain Juppé (see picture), also said that he didn't know about the letter, but then unequivocally added,

"The NTC has said very publicly that, in the reconstruction effort, it would give preferential treatment to those who supported them...That seems quite logical and fair."

In other words, the French have been quick off the mark this time, given that a delegation of French companies will go on an official trade mission to Libya later this month. However, Foreign Secretary William Hague has guaranteed that the UK - which bore most of the military burden together with France - "will not be left behind."

Also, quite significantly, David Cameron told the BBC's Today programme this morning,

"I think there is a big danger today of people in the West taking too much credit for themselves. Frankly, this is a Libyan triumph. This is the Libyan people who have rid themselves of a dictator."

A veiled criticism of Sarkozy?

Let us not forget about Italy, which was - in all fairness - a bit reluctant on waging war on Libya, with Prime Minister Silvio Berlusconi memorably saying, back in February, that he didn't want to "disturb" his friend Gaddafi. Berlusconi might have his head elsewhere these days, but Italian companies seem very focused on how best to safeguard their privileged position in Libya. Indeed, some might argue that Italian companies' priority access to Libyan oil depended heavily on the personal friendship between Il Cavaliere and the Colonel. However, as Paolo Scaroni, CEO of Italian oil giant ENI, recently made clear to the FT:

"It is not a problem of who is the prime minister, it is about the special relation between the countries, which has lasted for decades. It is in everyone’s interest to maintain it this way...[ENI will] find itself in the usual position of strength, just like in the last 20 years.”

And what about Germany? Well, the Libyan campaign will almost certainly not become one of the most memorable pages in the history of German foreign policy. However, Germany may not have pulled out of the race yet. In fact (hat-tip to Italian journalist Marco Zatterin and his Straneuropa blog), it looks like German EU Energy Commissioner Günther Oettinger is considering proposing that in future all oil and gas agreements reached by EU member states with third countries be rubber-stamped in Brussels (a roundabout way of getting a veto on any preferential deals between Libya and EU member states). One could easily imagine a good deal of lobbying from Berlin behind these plans, although the article notes that Oettinger might eventually backtrack and leave the proposal in a drawer of his desk next Wednesday, not least to avoid exposing the Commission to a barrage of criticisms from other member states.

This is where we are at. The starting gun has just been fired and the situation already looks extremely interesting. Needless to say, this new - more subtle - battle for Libya is set to deal another blow to the 'single voice' of EU foreign policy, just as the military campaign did. However, there's something people in Brussels could actually rejoice over. European Council President Herman Van Rompuy, Commission President José Manuel Barroso and EU Foreign Minister Baroness Catherine Ashton were all invited to attend the Paris conference - which in itself is an achievement...

EU've just been Ashtonised!

An interesting op-ed in Le Monde from Bastien Nivet of the Paris-based IRIS think-tank notes,

"A new notion is beginning to dominate the debate on the international action of the European Union: the Ashtonisation of the EU. Inspired by the surname of [EU Foreign Minister] Catherine Ashton, this notion describes a skillful mix of lack of anticipation, reactivity and diplomatic coherence, of absence of strategic ambitions and leadership by the EU, and of the abandonment of a timid europeanisation of stakes in foreign, security and defence policy to the benefit of the re-appropriation of this process by some member states."

This is certainly an unfortunate neologism, but, as Nivet points out, this "Ashtonisation" is also a result of member states realising that the EU architecture is too unwieldy:

“Paris is about to succeed in the incredible challenge of reducing the ambitions and the interests of the European Security and Defence Policy at a pace and with an effectiveness that not even the most eurosceptic Britons would have dreamed of…Paris now seems to have come to a decision: what is ambitious will be done with the Britons outside of the EU framework, what is not will be done with them as well, within the EU framework.”

Monsieur Nivet concludes his piece with a warning: a number of factors are combining to make the EU an “Ashtonised actor, which doesn’t keep up with the global strategic changes under way.”

Ashtonishing!

EU military HQ always going to be a non-starter for the UK

As if the EU hasn’t got enough on its plate, yesterday saw EU Foreign Minister Baroness Ashton present a proposal, at a meeting between EU foreign ministers, calling for the creation of an EU military headquarters (a so-called ‘Operations Headquarters’ OHQ). This comes despite the fact that the new External Action Service itself is barely even up and running. And despite the increasing number of voices that doubt that a single EU foreign policy is even possible.

According to the Sunday Times, Ashton wants the OHQ to “command and control” future European civilian and military campaigns. The idea has been knocking around since 2003, when it was rebuffed by the UK and the US, among others, but has been revived with the backing of France, Germany and Poland. French support for the measure goes back some time but it has always met with staunch opposition from the UK, which sees it as an unnecessary duplication of existing NATO arrangements.

Given that this is a decision that would require unanimity and that the UK is one of only two major EU military powers (France being the other), yesterday’s proposal seemed an unwise, direct challenge to the UK. The response from William Hague was expectedly unequivocal,

"There is no way we will agree to this, now or in the future...We won't be agreeing to a permanent operational headquarters and therefore we are not able to welcome today's report by Cathy Ashton, the High Representative, on this matter".

"We are opposed to this idea because we think it duplicates NATO structures and permanently disassociates EU planning from NATO planning”

"Secondly, it's likely to be a much more costly solution than existing structures; and thirdly, a lot can be done by improving the structures that already exist"

This isn't simply a case of the UK 'not seeing the need' for a permanent EU military HQ, it is that it sees it as a potential threat to the UK's national interests. Britain will veto anything that looks like it might threaten NATO because, when it comes to defence, the transatlantic alliance remains paramount (and probably always will).

It is often said that the UK doesn't 'understand Europe' but this example illustrates that this also works the other way.

The Libyan conflict has shown that European countries can and need to work together when there is the political will to do so. However, like over Iraq, it has also shown that there are often fundamental disagreements on the use of military force among EU member states, this time with France and Britain on the one side and Germany on the other. If they are serious about defence, European governments need to boost their individual capabilities and improve interoperability on an ad hoc basis. EU mission creep is simply an unnecessary and potentially damaging distraction.

Hague and Lidington raising the stakes?

The last few days have seen some tough talk from the UK's Foreign Office on the size and role of Catherine Ashton's External Action Service. Following a meeting of EU foreign ministers yesterday, Europe Minister David Lidington used uncharacteristically undiplomatic - albeit justified - language, describing Ashton's demands for a 5.8% increase to the EEAS' budget next year as "somewhat ludicrous", adding “They’ve got to get real as far as the budget is concerned.” (indeed)

He also made a point of underlining how the FCO is now keeping a watchful eye on the EU's 136 embassies around the world, saying that “William [Hague] has sent out instructions to all our posts around the world to be vigilant about any risk of competence creep,” referring to the ever-present risk of the EEAS taking on an increasing number of responsibilities that should belong to member states.

And, in case anyone in Ashton's bureaucratic machine hadn't quite got the message, the man himself (Hague, that is) used an interview on the Today Programme this morning to fire a couple of warning shots of his own. On the proposed budget increase for the EEAS, he said,

"I don't think it is necessary to have such an increase at a time where diplomatic services across the world, certainly across Europe, are tightening their belts, becoming more efficient. We are expanding our diplomatic network in the world but we are doing that by saving GBP100 million of administrative costs."

On the risk of the EEAS' incrementally increasing its power, he noted,

"We will always guard against mission creep. We are very clear about what's a UK responsibility and what is an External Action Service responsibility. I am certainly giving a pre-emptive warning. Where we have seen one or two instances of it, we have dealt with that but we will always be vigilant about that."

Then he went on to make, possibly, the most important point of all - which we highlighted in our recent paper looking at the need to overhaul the EU's North Africa and Middle East policy (which to be fair, is a view that the Commission/the EEAS is coming around to as well):

“Where more money is needed…is the much bigger project, and it’s one much in line with what the United States is seeking, of a bold and ambitious approach to change in the Middle East and North Africa - Europe providing a magnet for positive change; the resources that will help small and medium sized enterprises to grow in these countries and bring economic stability. And that is the big issue rather than the administrative budget of the External Action Service."

This is a pretty robust - but more importantly a sensible - line from the Foreign Office. More please.

What's the point then?

This is a pretty interesting comment from the Chief Operating Officer of the EU's diplomatic service (the EEAS), David O'Sullivan. In an interview with EUobserver, he said:

"At the end of the day, it's the member states that decide whether they want to speak with one voice, and there are moments when there are divergences. The High Representative [Baroness Catherine Ashton] has difficulty expressing a common European view if one doesn't exist...It is our hope that [the EEAS] will facilitate this process...We cannot at the end of the day change fundamental disagreements between member states."

Well put. As we've consistently argued, institutions cannot replace real policies - particularly in foreign affairs where it's clear that the EU remains a bloc of 27 national policies, which occassionally find common ground.

But his begs the question: what's the added value of the EEAS in the first place? If Ashton and the EEAS don't have the power to act in the absence of a common position shared by all 27 member states - a rare occurence indeed - is it then really worth spending hundreds of millions of taxpayers' money every year (€464 million only in 2011) to run a giant "facilitator"?

Given the criticism Ashton is facing (Only two weeks ago, Belgian Foreign Minister Steven Vanackere openly criticised her inability to get EU governments to agree on any of the most sensitive issues - not least the upheavals in North Africa and the Middle East - during her first year in the job), we wonder if the good Baroness isn't starting to ask herself that question as well, despite some good talk.

EU Foreign Policy: Kum-bay-ah or Machiavelli?

The EU’s fledgling External Action Service has regularly been mocked for its naivety and ‘Kum-bay-ah’ approach; all too often it seems to base its polices on projecting a positive image of the EU, occasionally backed by some suitably bland statements, supposedly helping autocrats and dictators around the world to see the error of their ways and embrace reform.

It seems however, that the recent unrest in North Africa and the Middle East has brought a hitherto hidden Machiavellian tendency in the EU’s foreign policy to the fore. Firstly, we had the Maltese EU Commissioner for health going off-message on Libya a couple of weeks ago by saying he “didn't think [he] had the right, or anyone else, to make a statement on whether he [Gaddafi] should step down”.

Now Robert Cooper, senior advisor to EU foreign affairs chief Catherine Ashton, has claimed Bahrain is normally "a rather pleasant, peaceful place", and defended its security forces after they opened fire on protesters with live ammunition last week:

"I'm not sure if the police have had to deal with these public order questions before. It's not easy dealing with large demonstrations in which there may be violence. It's a difficult task for policemen. It's not something that we always get right in the best Western countries and accidents happen”.

His statement ought to be seen in the context of an earlier work in which he claimed:

“The challenge of the postmodern world is to get used to the idea of double standards…When dealing with more old fashioned kinds of states outside the postmodern continent of Europe, we need to revert to the rougher methods of an earlier era – force, pre-emptive attack deception, whatever is necessary… Among ourselves we keep the law but when operating in the jungle, we must also use the laws of the jungle”

This also follows the reports that another Ashton aide was briefing against a no-fly over Libya, which briefly put her at odds with both Cameron and Sarkozy, until it was explained away as a 'rogue briefing'.

These kinds of ill-advised comments emanating from the EU apparatus, and the fact that we'll never know who authorised them, demonstrate inconsistency, and further undermine the EEAS's objective of getting Europe to "speak with one voice". They also underline the potential danger of a power struggle over the EU's foreign policy at a time when Europe is facing an uncertain future.