EU Faces Dilemma: To Stand Tall Or Kneel

Authored by Alex Gorka via The Strategic Culture Foundation,

The White House indicated that President Donald Trump is preparing to sign a sweeping Russia sanctions measure, which the House took up last night, that requires him to get Congress" permission before lifting or easing the economic penalties against Russia...

"While the President supports tough sanctions on North Korea, Iran and Russia, the White House is reviewing the House legislation and awaits a final legislative package for the President’s desk," White House spokeswoman Sarah Huckabee Sanders said in a statement on Tuesday after the House vote.

The punitive measures against Russia come as part of the Countering Iran’s Destabilizing Activities Act, targeting not only Tehran, but also North Korea. The measure seeks to impose new sanctions on major sectors of the Russian economy.

With all promises and pledges forgotten, the US has taken a unilateral decision with no regard to the opinion of its European partners.

In its turn, the EU is preparing to retaliate against the US if the new sanctions on Russia that hit European businesses come into force. The European Commission, the EU"s executive, has called for an urgent review of retaliatory measures. It believes that Brussels «should stand ready to act within days» if the US measures were «adopted without EU concerns being taken into account». The response may include limiting US jurisdiction over EU companies.

According to the Financial Times, the options set out in the EU Commission’s note include using European law to prevent the US measures from being «recognized or enforceable» in Europe, and preparing «WTO-compliant retaliatory measures». As cited by Politico, the memo suggests that Brussels is seeking «a public declaration» from the Trump administration that it will not apply the new sanctions in a way that targets European interests. The European measures may include:

1) Seeking a public declaration from the US administration that discretionary powers would not be used against European companies.

2) Making use of the EU «Blocking Statute», an EU regulation (Council Regulation 2771/96) that says no decision based on extraterritorial  US laws is enforceable in the EU.

3) Possible World Trade Organization retaliatory measures.

Germany has already warned of possible retaliation if the US moves to sanction German firms involved with building a new Baltic pipeline for Russian gas.

It is widely believed in Europe that the US punitive measures could stretch far beyond the Nord Stream 2 gas project to include the pipelines crossing the territory of Ukraine, as well as pipeline projects in the Caspian region and the development of the Zohr gas field off the coast of Egypt. Besides, the legislation «could impact a potentially large number of European companies doing legitimate business under EU measures with Russian entities in the railways, financial, shipping or mining sectors, among others».

In June, Germany and Austria sharply criticized the US Senate for tightening sanctions on Russia, accusing the US of threatening Europe"s energy supplies.

With Russia responding to the Western sanctions imposed in 2014, European economies have been hit hardest. Last year, the Austrian Institute of Economic Research estimated that the trade war will cost the EU over €100 billion in business and up to 2.5 million in jobs. By contrast, the US has scarcely felt a pinch from the trade impasse. Business communities in Germany, Italy, Greece and other countries in the European Union have publicly protested against the continuing sanctions.

Germany, Europe’s biggest economy with the largest trade links to Russia, has suffered most from the sanctions rift. Up to 30,000 German businesses have invested in Russia, amounting to as many as half a million jobs in danger and €30 billion in lost revenues, according to the Austrian Institute of Economic Research. One of Germany’s largest opposition parties, Alternative for Germany, even demanded an end to sanctions, which it said had rode roughshod over the German federal state of Baden-Wurttemberg. The region’s highly developed economy is home to more than 900 companies which have offices in Russia.

The bill openly promotes the US interests with American Liquefied Natural Gas (LNG) suppliers to compete with Russian Gazprom. Washington can silently exert pressure on EU decisions as the Union"s dominant silent partner. US envoys regularly attend meetings of the EU’s Council of Permanent Representatives (ambassadors). Besides, Washington can still rely on the UK and on some other EU countries like Poland, Romania and the Baltic States.

The US is not looking back at European allies because it knows that the EU is going through hard times facing a deep rift among its members. Internal divisions put its future in question. There is a host of problems it needs to find solutions to. It allows Washington to do its own thing. The Russian RD-180, RD 181 rocket engines are excluded from the bill to meet the interests of NASA, but European pipe construction projects will be affected if the bill becomes a law.

Here is another example. The National Defense Authorization Act for fiscal year 2018 includes the development of Intermediate-Range Ground-Launched Missile System in defiance of Article VI of the INF Treaty. The only place the missile could be deployed to is Europe. The bill envisages the development of the weapon to protect Europeans without their consent! Russia will have to respond by deploying intermediate range missiles of its own. As a result, American allies in Europe will become targets supposedly enhancing US security by providing the military with the opportunity to deliver first strikes against Russian strategic forces with the US strategic arsenal remaining intact. Actually, the United States will boost the first strike capability while undermining European security.

Until now Europe has failed to resist American pressure. This is another opportunity to take a stand and defy Washington. The European Commission will discuss next steps today. It does not mean it’ll take final decisions on what to do if US approves the measure as it is expected to do but it’ll be a start of serious debates on urgent measures to be agreed on without much delay. All 28 EU members have to agree. The outcome will be a litmus test for Europe"s unity to show whether the bloc is really a powerful alliance of the countries ready to protect their interests or it is nothing more than a puppet on a string dancing to the US tune.

Poland, Hungary Join Together To Challenge EU Bureaucracy

Submitted by Alex Gorka via The Strategic Culture Foundation,

The rifts within the EU continue to widen as Poland and Hungary join together in opposition to the EU bureaucracy.

Soon after Poland’s ultra-conservative Law and Justice (PiS) party came to power in October 2015, the Polish parliament passed a law allowing the government to appoint the judges of its choosing to the highest court and not recognize those chosen by its predecessor, the liberal Civic Platform party.

The crisis began in 2015 when Civic Platform, the party then in power, improperly nominated two judges to the constitutional court. When the PiS won October’s elections, it refused to recognize them and also blocked three other judges who had been properly selected by parliament. PiS also wants the court to hear cases in chronological order, rather than setting its own priorities for tackling its caseload. The Polish government believes it is unfair that a constitutional court with a majority of judges appointed under the previous parliament should be able to scupper flagship policies for which PiS secured a mandate in democratic elections in 2015.

Legal experts advising the Council of Europe, the continent’s top human rights watchdog, have concluded that the changes breach the rule of law, democracy and human rights. The Council and the European Parliament have expressed their concerns and urged the government to backtrack on its reform.The constitutional crisis has already given rise to a string of large demonstrations by a new Polish popular movement, the Committee for the Defence of Democracy.

Last December, President Andrzej Duda appointed a candidate backed by PiS as the new head of the constitutional court, which had been locked in a struggle with the government. In response, the European Commission said it considered the procedure which led to the appointment of Judge Julia Przy??bska to the post as “fundamentally flawed as regards the rule of law.” The Commission has set the Polish government a late February deadline to implement measures to protect the powers of the constitutional court.

On February 20, Poland dismissed demands that it implement judiciary reforms deemed essential by the European Commission to uphold the rule of law. Warsaw risks being stripped of its voting rights in the 28-member bloc, but such a move requires unanimity, while Hungary said it would not support sanctions. Hungary has also been harshly criticized by European structures for alleged violations of EU rules and standards.

In 2015, Poland and Hungary joined together to stop an EU ministerial agreement that would have forced all EU countries to honor same-sex “marriages” wherever they were contracted in the European Union. The botched agreement proposed by Luxemburg to the EU justice ministers addressed property rights, pensions and insurance. Poland and Hungary opposedit on the grounds that this would violate their sovereign prerogative to legislate on marriage and family matters.

The fact that two countries in the heart of Europe would oppose even an indirect recognition of same-sex “marriage,” and undoubtedly in the face of strong pressures from other EU states, speaks volumes about the direction Poland and Hungary have chosen. It is not the trajectory in which EU diplomacy, reliant on EU consensus, has taken so far.

The Hungary’s stance on Poland makes EU divisions come in the open to put an end to all the talkingabout the much-praised European unity. And it’s not Brexit only.

Actually, the EU is already divided. The «Alliance of Europe’s South» is being formed to include Greece, France, Italy, Spain, Portugal, Cyprus and Malta. Several EU members mull the possibility of a mini- Schengen bloc to comprise the Netherlands, Belgium, Luxembourg, Germany and Austria – the nations sharing deep cultural and historic links and opposing the idea of wealthy countries in the north subsidizing poorer EU members in the south.

The Visegrad group (Poland, Hungary, the Czech Republic and Slovakia) openly opposes the EU migration policy and offers its own vision of what the EU should become in the future. An extraordinary conference of the groups prime ministers in February, 2016, led to a statement reasserting the members’ insistence on “more effective protection” of the EU’s external borders to “stem the migratory flow.” It also repeated the countries’ opposition to a quota system for resettling refugees through the EU.

The group possesses enough significant growth and influence to move beyond the Continent. In particular, the combined GDP of the group makes it the world’s 15th largest economy, and the number of its representatives in the European Parliament is twice as large as the number of representatives of France, Italy and the United Kingdom.

Europe is facing a prolonged period of political upheaval, with elections also slated for 2017 in Germany, France, the Netherlands and Italy – all countries where economic anxiety, opposition to the EU and a surge in migration have fed growing support for populist parties.

The EU is also deeply divided over the sanctions imposed against Russia. Many countries oppose the «trade war» and the discontent is growing. Imposed three years ago, the restrictive measures have failed to achieve any results. The policy has little impact on Moscow. President Vladimir Putin has said manty times that Russia’s economy can rebound stronger from Western sanctions. It has been estimated that the cost to European farmers of the sanctions against Moscow is equal to 5.5 billion euros a year.

According to the Austrian Institute of Economic Research (WIFO), the macroeconomic effects of the trade loss, amounting to €34 billion in value added in the short run and €92 billion in the longer. Keeping farmers in business, on a drip of multi-million euro rescue packages is not a sustainable solution.

Poland and Hungary are getting closer as their criticism of European institutions grows stronger. Both nations defend measures to freeze the process of European integration and take back national prerogatives transferred to Brussels. They will work together to resist the EU’s attempts to enforce a scheme to relocate refugees across the bloc.

One thing leads to another. Poland is working to extend its influence beyond the Visegrad Group by giving a boost to the relations with Romania and Slovakia – EU member states also opposing the bloc’s asylum seekers’ relocation plans imposed by Germany.

The disenchantment with European integration is already pervasive in the region. Eurosceptics not only challenge Brussels, they demonstrate their willingness to unite. A new alliance appears to be emerging inside the EU to undermine it, or even destroy it, from within. Other nations inspired by this example are likely to join, spurring the process that can hardly be stopped.