Brussels, Belgium. 30 June. Last week was a big week; Jean-Claude Juncker was imposed by Germany as European Commission President and a landmark free trade deal was signed between the EU and Georgia, Moldova and Ukraine. It also marked the true birth of Berlin-Brussels as a power. This morning Berlin is desperately trying to pour balm on troubled British waters but it is too late. Taken together the three events crystallise the new power reality of Europe in which there is a consolidating core centred upon Germany and the EUrozone and a periphery comprised of Europe’s strategic losers - Britain, Russia and Turkey.
At the core of the core is Berlin-Brussels or B-Squared (B2). I could call it an ‘Axis’ but modern Germany is not old Germany and I will not fall into the history trap. As of Friday Europe’s periphery now includes Russia, Turkey and Britain all three of which were once core powers but are now very much on Europe’s/Germany’s periphery.
Let me take Britain first. No-one should under-estimate the structural fracture that took place Friday between the EUrozone (the real EU) and Britain. This morning Berlin is desperately trying to pour balm on troubled British waters but it is too late. In fact, the British now find themselves in the most invidious of positions with the relationship between costs and benefits absurdly perverse. The British people pay over €6bn per annum for membership of a club over which it has no influence and which does it more harm than good in terms of imposed regulation and lost national sovereignty.
Then there is Russia. Moscow reacted with predictable fury at the signing of the partnership agreements in Brussels last week with much talk of dark “consequences” and even “Nazis”. For the Russians this accord is but the latest sign that the EU is challenging what Moscow believes to be the Russian sphere of influence. Moscow also sees the EU as less institution devoted to preventing extreme state behaviour and ever more a ‘state’ with its own interests and thus a threat to Russia. To the Russian strategic mind all and any states must seek a sphere of influence and in Europe given history it must be at Russia’s expense. Indeed, to Moscow many Central and Eastern Europeans have simply swapped the Red Star for the Yellow Star.
Turkey is another matter entirely. For almost fifty years the EU and its many precursors have been implying eventual Turkish membership and Ankara has pretended to believe them. This promise has led Turkey to orient its foreign and security policy towards Europe and to slowly align its constitution and governance with the ‘democratic values’ EU membership demands. The game is now up. Turkey will never be offered EU membership and now knows it. Germany and France do not want it and in any case the cost of enlargement to Turkey is too much and Prime Minister Erdogan knows that too. That is why Ankara is pursuing an increasingly robust domestic policy and an ever more autonomous and assertive foreign policy that looks south and east not just west.
But here’s the rub. Whereas Moscow, Ankara and to a very much lesser extent London still think in terms of a classical balance of power B2 sees power in much more in terms of the balance of money. When Georgia, Moldova and Ukraine sign accords with the EU they do so partly to escape Moscow’s influence. Equally, they do so also in the belief that eventual EU membership is implied and along with with it the bucket-loads of European taxpayer’s cash needed to save their basket-case economies.
However, it is precisely the issue of money where the B2 strategic calculus falls apart. The sums simply do not add up. There are only ten countries that actually pay for the EU, three of which are so deeply in debt (France and Italy) they they are or soon will be net recipients and another Britain could well soon leave. Merkel advisor Michael Fuchs said this morning that a Brexit would be a disaster. What he means specifically is the loss of British taxpayer’s money.
Therefore, either an intolerable European ‘tax’ will need to be imposed on the German, Danish, Dutch, Swedish et al taxpayers or B2 will fail . In other words, it will be impossible for Berlin-Brussels to continue to pay “mountains of gold” to ‘transfer junkies’ such as Poland, save the Euro and EUrozone banks AND pay for membership aspirants such as Georgia, Moldova and Ukraine. Europe’s defence has already been sacrificed so maintain the illusion of a Europe that can afford both to widen and deepen.
Sooner or later the promise of EU membership and the oodles of European cash that goes with it will dry up and disappointment will set in. At that point Russia’s influence will increase sharply and with it Moscow’s ‘interference’.
Europe’s peripheral fission has profound implications for the transatlantic relationship. Indeed, such fission will undermine not only the EU but also NATO and in time render the Baltic States in particular indefensible in the face of a Russia that is likely to become more aggressive not less so. That is what a political settlement between B2 and Britain is so important.
There is a further danger; the eclipsing of German leadership. If push comes to shove German leadership is vastly preferable to some form of falsely-democratic federal Europe and yet that is precisely the battle to come at the heart of B2. At some point Juncker will likely defy Berlin. He will claim that his nomination and confirmation as European Commission President by the European Parliament establishes the ‘political legitimacy’ for the transformation of the European Commission into a European Government. Indeed, he will claim a solemn duty to represent the ‘will’ of Europe’s peoples vested in him even if they did not actually vote for him. At some point B2 will collapse and a Europe the sum of which is already less than the sum of its parts on the world stage will fall apart. Germany will at some point have to make some hard choices.
Britain, Russia and Turkey may not appear to have much in common on the face of it. However, all three are profoundly unhappy with their respective relationships with B2. For its own sake Berlin must move to end Europe’s peripheral fission.