Europe Geopolitics – January 14, 2022

| January 14th, 2022

Boris Johnson is in the hot seat. On the one hand, he’s dealing with high inflation and party scandals. On the other hand, however, he still has opportunities to rebound as Labour isn’t doing too well either and because he has no suitable successor yet. We also look at the EU vs. Poland fight, how the US is dealing with Russia and its EU peers, and how science and politics are getting entangled in times of COVID. 

1.  EUROPEAN UNION

1.1 Lithuania’s foreign minister calls on EU to stand up to China – Financial Times

Europe needs to stand up to China’s “illegal” pressure on Lithuania and foreign companies operating there or risk damage to the international trade system, according to the Baltic country’s foreign minister.

Gabrielius Landsbergis told the Financial Times that China had escalated its conflict over Lithuania’s ties with Taiwan to include harassment of European companies which use Lithuanian-made components. He will tell EU foreign ministers about the harassment at a meeting on Thursday and Friday, he said.

“Now there has to be a very clear answer from Europe. Europe has to say it’s not the way to treat the single market. It’s a test for the rules-based international trade order. Europe has to stand up,” Landsbergis added.

Lithuania is at the centre of a geopolitical row after Vilnius allowed Taiwan to open a representative office in its own name, rather than the usual evasion of calling it after its capital city, Taipei.

China reacted furiously, recalling its ambassador and downgrading the status of Lithuania’s embassy in Beijing, stopping Lithuanian goods at its borders, and warning European companies such as German car part maker Continental not to use components from the Baltic country.

China demands that governments deny Taiwan any treatment suggesting sovereignty. Beijing opposes any use of the country’s official moniker, Republic of China, or its geographic name Taiwan, which it sees as an attempt by Taipei to pursue de jure independence.

[…] Lithuania’s own position was muddied last week when president Gitanas Nauseda said it had been a “mistake” to name the office after Taiwan rather than Taipei. Landsbergis said that the government was “in the process of aligning” positions with the president as both saw “the whole situation in a similar manner”, although he did not give any details.

Landsbergis said China’s “unprecedented” harassment of other countries’ companies showed the “urgent need to develop anti-coercion instruments” in Europe and elsewhere.

“It’s a test for the EU but it’s also a test for the west. We felt responsible as a western society after the second world war to introduce a rules-based order for trade. It worked. Now we’re seeing it’s being tested,” he added.

Comment: In December, the European Commission proposed a new so-called anti-coercion instrument. The purpose is to respond to economic threats when i.e., a third state uses economic sanctions to influence European policies. This tool hasn’t been accepted by the 27 member states and MEPs yet. 

In favour of this trade war “weapon” is France, which mentions strategic autonomy. The problem is that the EU is not united. Especially Germany might have problems due to its trade dependency on China. Yet, new chancellor Olaf Scholz seems to be more ready than Merkel. Under Merkel, Lithuania stood implicitly accused of acting along without consulting EU partners.

In March, member states are expected to adopt a strategic compass, a sort of European White Paper, which will list all of these new challenges and examines the means of responding to them. So, for now, we shouldn’t expect any major shift in the China-Lithuania trade situation.

2.  UNITED KINGDOM

2.1 Is the party over for Boris Johnson? – POLITICO

It was easy to watch Boris Johnson’s baleful performance in the House of Commons Wednesday and conclude his days are numbered.  For weeks the British prime minister has faced sustained pressure following a tsunami of allegations that Downing Street staff — and Johnson, his wife and his top officials — held lockdown-busting parties during the height of the pandemic.

Anger directed at Johnson boiled over Monday after a leaked email showed one of his senior aides had invited more than 100 staff to a gathering and encouraged them to “bring your own booze” — as well as widespread reports Johnson himself had attended. One MP was reduced to tears the following day as he recounted how his mother-in-law died alone during the pandemic. Even normally supportive newspapers turned on the prime minister.

Just before facing questions from the opposition Labour leader at their weekly Prime Minister’s Questions session Wednesday, Johnson gave a short statement to the packed chamber in which he apologized for attending a drinks party in his Downing Street garden in May 2020, when everyone in the country was banned from meeting more than one other person outdoors. Johnson said he “believed implicitly it was a work event,” which Labour leader Keir Starmer instantly decried as “ridiculous.”

Johnson may have said he was sorry, but the move was — to put it mildly — unlikely to satisfy his critics on the opposition benches or in his own party. If Johnson had been in any doubt about how bad a day he was having, the reaction that followed underlined the point.

You didn’t have to go far to find Conservatives who agreed with Starmer. In a remarkable intervention, Douglas Ross, the Scottish Conservative Party leader, called publicly for Johnson to resign. Later, Tory MP William Wragg told BBC Radio 4 that the prime minister’s position was “untenable.”

One Tory MP from the 2019 intake called the apology “half-arsed” and another, asked if the statement had helped, replied simply: “No.” One of these MPs said he had already submitted a letter to the 1922 committee — part of the process for triggering a leadership contest which could topple Johnson — and the other said he was minded to do so.

But for all the frothing anger, Johnson could yet limp on. British prime ministers are notoriously difficult to dispose of mid-way through an electoral cycle and Johnson’s best hope — a strategy he has spent his career perfecting — is that he can hang on long enough for the anger to burn itself out.

Comment (The Telegraph): So which is it to be, Prime Minister: are you a criminal or an idiot? Faced with the choice, Boris Johnson made the only choice he could: he pled the fool.

What other conclusion can we draw from his explanation of what happened on May 20 2020? He was apparently unaware that his entire department was throwing what appears to be an illegal lockdown party, or what to most of us law-abiding citizens looks very like an illegal lockdown party, and when he did spot the kerfuffle in his garden, popped out to say hello and then bumbled back inside none the wiser.

If this account is true – unlikely – it only raises questions about his competence to govern. Yet there is a cynical rationale behind playing dumb: Mr Johnson’s statement to Parliament was not just a PR move. It was the testimony of a suspect trying to make it hard for the police to nail him.

As Mr Johnson must realise, admitting that he knew Martin Reynolds, his chief civil servant, was hosting a party could make him an accomplice to a crime and getting fined for breaking his own lockdown rules would surely (surely?) be a political extinction event.

So, he chose to claim ignorance, in the hope that he can ride this out. It is to be his last line of defence, as all the others crumble before him. Determinedly, the truth has marched past the Schrodinger’s party defence, in which an event may or may not have happened, depending upon Sue Gray’s observation of it.

Forthrightly, it has breached the second line, in which Mr Johnson did not know about any event that may or may not have happened. Heroically, it has ploughed through the third line, in which the Prime Minister was assured that any event that might have happened must have been within the rules.

And at last, it has reached the castle keep – Mr Johnson’s own private thoughts – where it is revealed that he did indeed observe an unknowable event, but did not know what it was he saw. And though this may hold the police at bay, it cannot obscure the bleeding obvious from everyone else.

[…] Perhaps some great new success or national emergency will arrive to relieve the pressure. Or perhaps he’ll be hit again soon by the revelation of yet another quantum gravity-defying drinks party that both did and didn’t happen.

The damage, however, is done. His claim to ignorance might get the Prime Minister out of legal trouble. But to the public, it only invites mockery on top of rage.

2.2 Boris Johnson’s staff accused of more rule-breaking parties inside No 10 – BBC

The Telegraph reported the gatherings were made up of about 30 people drinking alcohol and dancing to music until the early hours of 17 April. Restrictions at the time banned indoor mixing between different households.

No 10 said a leaving speech had been given but would not comment when asked if there had been drinking and dancing. Prime Minister Boris Johnson was not at either gathering as he was spending the weekend at his country estate, Chequers.

A spokeswoman confirmed Boris Johnson’s former director of communications, James Slack, “gave a farewell speech” to thank colleagues ahead of taking up a new role as deputy editor of newspaper The Sun. Mr Slack has apologised for the “anger and hurt” caused by the leaving event and acknowledged it “should not have happened at the time that it did”.

But he said he could not comment further as it had been referred to senior civil servant Sue Gray as part of her investigation into reported parties at Downing Street and Whitehall. The latest revelation comes as the prime minister faces anger from his own party over attending a drinks gathering in the Downing Street garden during the first lockdown.

Labour’s deputy leader, Angela Rayner, said “the buck stops with the PM” over the “culture and behaviours” inside No 10.

Comment: The last two months have been tough on Boris Johnson – mainly because of parties she shouldn’t have had. So far, this has hurt the Tories in the polls. They now trail Labour by roughly 6 points according to the POLITICO polling average.

Yet, these parties are not the biggest risk facing Johnson. They are a reason to get rid of him, but unlikely to be the root cause. While he can loosen COVID restrictions to boost his ratings as we discussed yesterday and last week, he is facing an energy crisis. In spring, energy prices are set to rise by 45-50%.

On February 7, Ofgem, the British energy regulator, will announce a new price cap on energy prices. That’s likely when the government will have to respond. It is expected that the price hike will have a price tag of GBP 20 billion a year. To put that into perspective, the vaunted tax rise to provide surplus funding to the NHS and social care will aim to generate GBP 12 billion a year.

While the United Kingdom is not able to fight the cause of high energy prices itself, it has to deal with the impact on consumers. And, eventually, higher taxes are needed to fund (expected) stimulus for consumers. In this case, Brexit didn’t help. When leaving the EU, the UK also left its internal energy market. Now, they no longer benefit from the EU’s market coupling mechanism, which allows buyers to simultaneously book day-ahead country-to-country interconnector capacity and prices. British buyers have to do both separately, reducing efficiency.

Again, Boris Johnson’s reign isn’t over. Labour has its own issues and is ill-prepared to display leadership. Yet, Johnson needs to pick his next moves carefully. He has the opportunity to make people forget his parties by helping them deal with i.e., the energy crisis. Yet, any missteps will be costly – for both him and his party.

And, related to this, the next article looks at another benefit for Boris, there isn’t a suitable successor yet.

2.3 The regicidal Tories won’t oust Boris until a successor steps up – The Telegraph

The Conservatives have long been the natural party of regicide which is, right now, what is keeping Boris Johnson in place. A more impulsive party might have thrown him out, simply as an act of rage. Regicide experts know that success means lining up a successor, making sure the transition would work. It means asking hard questions such as: is Liz Truss really the answer? Could Rishi Sunak win the north? Are either ready? And if not, are we really so sure that the Boris project is unsalvageable?

It’s striking how many Tory MPs, even his erstwhile supporters, now consider the damage irreparable. It was, in the end, his decision that the elderly should be unvisited in care homes and families could not meet for funerals during lockdowns. For him to then host a “bring your own booze” party in his garden, when he was asking police to prosecute anyone who did the same, was indefensible. It may yet prove to have been, under his own rules, a criminal act.

His general dalliance with illiberal Conservatism (the vaccine passports, the highest taxes in 71 years) has at least given his party a clear view of what they want next: someone who practises what Johnson used to preach. A low-tax, socially liberal leader whose instinct is to trust the public more, tax them less and not abandon such principles when under pressure. The most likely options now are Truss, the self-styled “freedom fighter” and Sunak, who said it was time to “live without fear” after the first lockdown.

But this week hasn’t resolved the doubts about them. To use Johnson’s analogy, the ball has come loose from the scrum and is lying on the pitch, while others gawp. Sunak’s silence after the Prime Minister’s apology on Wednesday was, to his critics, telling. “He never wants to get his hands dirty,” says one minister. “Look how quiet he was, disappearing when things got tough.” This fits with a general criticism of him: too dainty to be a real leader. Lacking the steel, the killer instinct, the raw blonde ambition which Johnson and Truss so vividly embody.

The Foreign Secretary has also found more enemies this week. After months of coming first in opinion polls of party activists, she’d be well-placed to win any leadership race decided by them. This is focusing minds in Westminster. “She’s a method actor,” says one MP. “She plays the role of a high-achiever without any actual achievements.” Others are crueller still, disparaging her as an Instagram poseur who has never had to deliver the free-market vision that she dangles.

[…] In truth, none of these candidates could plausibly promise to replicate the Johnson project. For all of his faults as a Prime Minister he is an incomparable campaigner, who brought together a coalition of northern ex-Labour voters and Tory southerners under a Brexity umbrella. Those worried about Chichester might think the suave Sunak would best reassure their voters — but how well would he go down in Dudley, Hull or Stockton? Ms Truss has been making friends with the new northern Tories, but could she promise to keep spending up while putting taxes down?

[…] I take a slightly different view on Sunak: he is silent because he isn’t in “running mode” and doesn’t think there will be a leadership race any time soon. As a teetotal, he will have found partygate difficult to defend — hence his silence. He is also under close observation, with his every move and speech scrutinised by a wisely-fearful No 10 which, increasingly, briefs against him. But if he wanted to move for the leadership now, we’d have seen more of a sign.

My hunch about Liz Truss is that she loves the speculation about her becoming Prime Minister, but finds it more amusing than prophetic. Neither are ready to move into No 10 in the spring, a timeline which doesn’t suit those who want Johnson gone before the May local elections.

And that’s the problem: it’s not a simply a question about whether the Prime Minister should quit. It’s a trade-off: who would do better? Might that person win the leadership? And with the Tories a far-from-hopeless six points behind Labour, is it really worth the gamble?

[…] Johnson may yet recover: if omicron keeps falling, he could abolish all Covid rules this month (including the plan to sack 70,000 unjabbed NHS staff) and go all-out on a “rebuild” theme and place his hope in local elections. His penance for his garden party could be a pardon (and repaying the fines) of those prosecuted under his lockdown rules.

He will not be forgiven by his party: things are too far gone for that. But he may yet persuade them that he is still, for now at least, the least bad option.

Comment: Besides that this op-ed also mentions COVID as a chance to recover in the polls, it highlights a very important point: while both Sunak and Truss might be suitable candidates – in the future – they are either not ready or willing to step up yet. Especially Sunak could suffer from high energy inflation according to The Telegraph’s Ben Wright. Sunak is in the hot seat as he is expected to use his power to ease the pain from higher energy prices on consumers.

Additionally, Boris Johnson is getting another (unexpected) tailwind as Keir Starmer apparently had his own party during the lockdown according to The Telegraph.

“With Boris Johnson under mounting pressure over a series of gatherings in Downing Street, the Labour leader on Wednesday claimed that the public could see he was “lying through his teeth”.  Hitting back on Thursday, a senior Tory pointed out that Sir Keir had himself been photographed drinking with a number of party staff in a constituency office in Durham last May. “  

This news could not come at a better time as a new poll shows that 35% of voters would prefer to Starmer to become prime minister. Boris came in at 23%, an all-time low for him. It’s obviously still early and people are emotional due to ongoing events and the media’s response. Yet, Johnson needs to treat carefully.

3.  POLAND

3.1 Poland does not pay its fines to the EU – Now the next escalation is looming – Handelsblatt

In the dispute between the EU Commission and Poland, another escalation stage could soon follow. Poland has been ordered by the European Court of Justice (ECJ) to pay fines, but it is not paying them.

The EU Commission has sent three demands for payment to Poland. The last demand was sent on 3 January with a 15-day deadline. The deadline is Tuesday of next week.

If Poland does not pay by then, the EU Commission wants to withhold money that it would otherwise have paid out to Poland, i.e. offset the penalty.

The fines are the result of an infringement procedure against Poland because the government continues to operate the controversial Turow open-cast mine on the border with the Czech Republic, although the Czech government claims that the groundwater level on the Czech side is also dropping as a result.

The ECJ had imposed a fine of 500,000 euros a day if Poland stays in business. More than 100 days have passed since then. Poland’s debt thus amounts to more than 50 million euros.

Prime Minister Mateusz Morawiecki had announced that he expected a final ruling in May at the latest and would not pay any fines until then. His cabinet would decide at a later date “whether we will pay some of the illegal sanctions imposed on us and whether we will find a suitable formula”. Poland wants to continue opencast mining because, according to the government, it generates seven per cent of Poland’s electricity.

The ECJ had imposed another penalty because of the Polish Disciplinary Chamber, which allows the Polish government to interfere with the judicial system. At the end of October, the ECJ imposed a fine of one million euros a day. Since then, debts of almost 80 million euros are likely to have accumulated.

“We will not be blackmailed by the EU,” said Deputy Justice Minister Sebastian Kaleta. The penalty payments because of the disciplinary chamber “violate Poland’s competences” and are “illegal”. A spokesperson for the EU Commission said that EU states had always paid their fines in the past.

Comment: The dispute between Poland and the EU isn’t improving. It’s getting worse. As Poland is not paying its fines – if was clear about that weeks ago – the EU is ready to withhold budget payments. January 10 marked the deadline for Poland to inform the European Commission of when and how it plans to get rid of the disciplinary chamber. Total claims have now added up to close to EUR 70 million.

For now, the EU is withholding EUR 36 billion from the EU recovery fund. The EU could withhold other EU budget payments as well if Poland continues to refuse to pay its fines. 

4.  RUSSIA

4.1 Senate Rejects Nord Stream 2 Sanctions Bill – Wall Street Journal

The Senate voted Thursday to defeat a bill sponsored by Sen. Ted Cruz (R., Texas) that would have imposed sanctions on Nord Stream 2 AG, the company behind a pipeline built to deliver Russian natural gas to Germany.

Fifty five senators voted in favor, with 44 against. Sixty votes were needed to pass the bill, under an agreement reached with Senate Majority Leader Chuck Schumer (D., N.Y.). In exchange for a vote this week, Mr. Cruz had agreed with Mr. Schumer to lift his hold on dozens of ambassador nominees before the Christmas recess.

Six Democrats broke with their party and the White House to vote with Republicans in favor of the bill. Sen. Brian Schatz (D., Hawaii) didn’t vote because he was quarantined after testing positive for Covid-19 this week. The vote started midafternoon and remained open through the evening, when Mr. Schumer voted.

[…] The Biden administration opposed the bill and lobbied Democratic senators against it, arguing that it would remove U.S. leverage to deter Russia and damage ties with Germany and other European allies. Russia has gathered tens of thousands of troops around Ukraine, and talks in Geneva between the U.S. and Russia produced no breakthroughs this week.

“The Administration does not believe this bill is a genuine effort to counter Russian aggression or protect Ukraine,” the White House said Thursday. “In fact, if passed, the legislation would only serve to undermine unity amongst our European allies at a crucial moment when we need to present a unified front in response to Russian threats against Ukraine.”

The administration has endorsed an alternative bill offered by Senate Foreign Relations Committee Chairman Bob Menendez (D., N.J.). That legislation would direct the administration to review its waiver of sanctions against Nord Stream 2, and impose mandatory sanctions against Russian leaders, banks and businesses, but only if Moscow escalates hostilities against Ukraine. It isn’t known when that bill might get a Senate vote.

“Sanctioning Nord Stream now at this pivotal moment would have the opposite effect of deterring [Russian President Vladimir] Putin,” Mr. Menendez said Thursday. “It might even be the excuse Putin is looking for.”

If the U.S. doesn’t sanction Nord Stream now, that does not mean the pipeline goes online, Mr. Menendez said. “It does not mean that Putin gets his way,” he said. “What it does mean is that there’s leverage.”

Comment: The alternative bill offered by Menendez would create a situation where Russia gets sanctioned in case of an invasion. This brings up one issue: what’s the definition of an invasion?

By the wording of the Menendez bill, this would be cause to sanction Nord Stream 2. Sec. 302 (a) (2) specifies that any escalation of hostilities against Ukraine, compared to the state of play on 1 December 2021, which interferes with the country’s sovereignty or territorial integrity would be cause for sanctions. Given the Donbas’s de jure status as part of Ukraine, a Russian troop-build up, or any other activity in the area, would trigger the sanctions.

Yet, the White House needs to submit a report detailing their reasoning. So, it’s still Biden’s decision. If anything, this bill is a way to give the Democrats some cover. The White House and State Department are worried about upsetting its relationship with Germany. Especially in light of exploding natural gas prices in Europe.

Yet, the real issue hasn’t been solved. First, some Democrats crossed the aisle to vote with Republicans, and – above all – we still can only guess what the response of the US would be in case of an invasion. Or the response from NATO, or the EU. 

5.  COVID

5.1 Parts of science have made themselves part of politics – WELT

Ideally, the funding of science should ensure the independence of researchers. But of course there have always been scientists in the service of their breadwinners, often enough the rulers, and radically independent ones. There have also been radically independent ones who were in the service of the state, like Hegel, who envisioned intellectual stability for the young tiger state of Prussia. Academics are usually mature citizens and an elite part of a society that is given a lot of responsibility and gladly accepts it.

The separation of powers is a precious commodity. It is roughly outlined between the executive, the legislative and the judiciary, but the differentiation of society knows more subsystems that drive and shape a society. Science is one of them. Until now, its independence was considered ideal, but this idea can no longer be taken for granted.

In several waves, parts of science have made themselves common with politics, and what still looked like wild, even rebellious activism in the case of some climate researchers has become, in the Corona pandemic, a far too often opaque intermingling of politics and science. The dissolution of boundaries came from both sides.

The advisors to those in power too often also behave like those who want to be absorbed in this function, and the result is remarkable. Just as there is less and less real opposition to the freedom-sceptical to freedom-hostile Corona policy apart from the radical fringes on the left and right – Rainer Hank called it an “all-party cartel” in the “FAZ” – the scientific debate has now also become a contest of denunciation and exclusion. Researchers like Christian Drosten can publicly denounce colleagues like Hendrik Streeck and are virtually invited to do so by journalists in interviews.

The crisis centralises and manages power and authority more hierarchically than ever. Federalism is in danger of being captured, and with crisis and advisory councils, a uniformisation of power and knowledge is being pushed forward. Activist academics such as Melanie Brinkmann, who has repeatedly called for more and stricter lockdowns, are courted by the media, some of whose editorial writers make themselves part of the crisis staff on an honorary basis.

[…] Science does not blindly recognise authority. Science has always achieved its greatest successes (Galileo, Darwin, Einstein, Bohr) when authorities and certainties have been questioned – there are simply no scientific heritages, not even the idea that someone has inherited wisdom. Accordingly, science must not appear to the public as if it were infallible.

Comment: “Trusting the science”, or “I’m with science” have become synonyms for “I won’t disobey”. The op-ed above was written by WELT editor in chief Ulf Poschardt and hits the nail on the head. “Science” isn’t consensus, but the art of challenging ideas. Especially in times of COVID, this has become very important. One example we recently highlighted is the 2G+ rule in Germany. This basically means that only vaccinated or healed persons who tested negative are allowed to enter certain venues. Yet, unvaccinated people who test negative aren’t allowed in. Why? According to some politicians, it’s to motivate people to get vaccinated. That’s a political decision, not “science”.

With this in mind, one of the most trusted government advisors on COVID, Drosten, recently made the case that we’re in an “endemic”, which does not require stricter rules.

“Drosten is prepared to allow more infections with the milder Omicron variant: “We’re not tearing the door completely open, but we have to open the door for the virus in some places.” Politicians would have to decide at which ones. He also formulates his goal: Corona “will become endemic” and “must become endemic”. Drosten does not endorse lockdown demands.”

Especially in this phase of the pandemic where much looser rules are warranted; some politicians are not always keen to listed to scientists who want to change the course towards looser regulations.