Commission President Ursula von der Leyen’s State of the Union address in mid-September made it clear how far the political course of the European elites has meanwhile distanced itself from the concerns and needs of the societies in the member states. For many critical observers in the European Union, the question is no longer whether – but when – a split of the EU is to be expected.
There is much to criticise about the speech of the Commission President. One can take offence at numerous, unreflective statements, at the propagandistic tone, at the inflammatory statements against Russia and much more.
However, that is not the subject of this analysis. For this purpose, it is sufficient to take a closer look at a core sentence of Ursula von der Leyen’s speech, which reads: “And I want to make it very clear, the sanctions are here to stay”.
This sentence is causing great concern to a rapidly growing number of citizens in the member states, but above all to the European economy and administration. On the one hand, because the sanctions themselves are more than controversial; on the other hand, because the European leadership’s unwillingness to compromise on the sanctions is increasingly being interpreted as an act of aggression against the member states.
Approval of sanctions declines
Inflation in the member states continues its upward course. According to Eurostat, the European statistics office, the inflation rate in the euro area rose to 9.1 % in August. Since the introduction of the euro, the cost of living has never risen as much as it did last month. The highest inflation rates are to be found in the Baltic States (between 21 and 25 %); the lowest inflation rate is in France with 6.6 %. Germany is in the middle of the euro area with 8.8 %. The strongest driver of inflation is energy, which has increased in price by almost 40 % (!) in the last 12 months alone. The upcoming winter months and ongoing warnings of blackouts and bottlenecks in energy supply are fuelling discontent in Europe’s societies: demonstrations are taking place in numerous states, such as in Prague at the beginning of September. Even though the mainstream media is only marginally addressing this issue, protests are expected to increase in the coming weeks.
With growing concerns about exploding living costs, opposition to the sanctions is also growing. A survey by the German opinion research institute Forsa in September revealed that already 55% of the Germans questioned are no longer prepared to accept further financial burdens so that the sanctions against Russia can be maintained. The picture is similar in Austria: a recent survey by the Institute for Public Opinion Research and Data Analysis shows that 78% of respondents think that they themselves suffer from the sanctions, and only just under half are in favour of keeping the sanctions in place. Experts expect this sentiment to intensify in the coming weeks. Both in Germany and Austria, several leading politicians are already in favour of an end to the sanctions.
It is currently uncertain whether and to what extent the elections in Italy at the end of September and in Bulgaria at the beginning of October will have an impact on the European Union’s sanctions policy. Hungary had recently refrained at the last minute from blocking the extension of EU sanctions, after the country had previously blocked or forced changes to several sanctions against Russia.
Debt policy and migration crisis
Observers are very concerned about the economic development in the euro area. The already very high trade deficit of the Eurozone widened again in July compared to the previous month by 8.1 billion euros to 40.3 billion euros. This is by far the highest foreign trade deficit since the currency area was established in 1999. Besides the high prices for energy imports, the currency development of the euro plays an important role. Due to the weak euro  , energy imports invoiced in US dollars are tearing an ever larger hole in the balance of trade. At the end of the fourth quarter of 2021, public debt as a percentage of GDP was 95.6% in the euro area and 88.1% in the EU. Against the background of further, enormous spending by EU member states on economic and social aid, this situation will deteriorate further.
In addition, there are the burdens on the member states due to the support for Ukraine. Commission President Ursula von der Leyen put the financial contributions made so far – without military aid – at 19 billion euros. It can be assumed that due to state liabilities and guarantees, the burdens on the member states are actually much higher.
These figures do not include the expenses for all those Ukrainians who enjoy temporary protection in an EU country: that is about 1.4 million in Poland, 660,000 in Germany, about 431,000 in the Czech Republic, 154,000 in Italy, 142,000 in Spain, 134,000 in Bulgaria. For the sake of completeness and good order, it should also be mentioned here that, according to official UNHCR figures, the Russian Federation has taken in almost 2.6 million Ukrainians.
In addition, a renewed rush of migrants is burdening the EU member states: from January to August 2022, 115,402 initial applications for asylum were received in Germany, an increase of 35.4 % compared to the previous year. In Austria, according to the Federal Ministry of the Interior, there were already 56,000 in the same period. An analysis published by the European Union Asylum Agency (EUAA) shows that in the first half of 2022, around 406,000 asylum applications were made in the EU countries (including Switzerland and Norway), which corresponds to an increase of 68 % compared to the same period in 2021. The fact that the societies of the member states are increasingly less willing to follow the migration policy of the European elites against the background of inflation and growing national debts is shown by the examples of Sweden and Denmark. It can be assumed that other states will follow suit here as well.
 Within just one year, the value of the euro fell from 1.2 US dollars to 0.99 US dollars.
Reopen channels of dialogue
The European Union is in the midst of a disruptive development, which is accelerated by the current sanctions policy of the European Union. For many critical observers, the question is no longer whether – but when – a split of the EU is to be expected. This division will have a political impact, for example through further withdrawals of member states or through growing opposition of member states to the EU’s course. This division will have an economic impact, especially when the EU is enlarged to include more member states  and has to finance the economic (re)construction of several (new) member states in addition to the huge damage caused by debt policy. This division will also have a social impact, through fractures in societies as a result of impoverishment and growing migratory pressures.
The future of Europe is currently being put at risk by numerous actors. A key player is the EU itself, which is blindly pushing through its agenda against the wishes and needs of its own society and economy.
It is therefore imperative to do everything possible to reactivate the channels of communication with Russia – on the one hand, through diplomatic channels and international organisations. On the other hand, however, and this seems to be at least as important, on the path of civil society. Constructive debate at various levels, such as education, culture, sport, as well as ongoing political discourse, are indispensable in order to jointly set the course for the future on this common continent, which the EU member states share with Russia.
 Currently, the following states have been granted the official status of “candidate countries” by the EU: Albania, Moldova, Montenegro, Northern Macedonia, Serbia, Turkey, Ukraine.
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With no end in sight to the fighting in Ukraine, the European Union has become financially exhausted with the drawn-out conflict on its doorstep. This is while the United States, sitting across the pond, watching on and observing, is making huge profits. As the war drags on, the costs for Europe are mounting.
One thing is for sure. It is certainly not the first time Washington has tricked the international community into a war. Who can forget a certain Colin Powell sent by Washington, packed with a briefcase of fake intelligence, to the UN Security Council to make the case for the Iraq war.
At the time, France and Germany formed a coalition, making strong arguments and objections to prevent the Iraq war.
This time, critics argue, they caved in to quickly, along with the EU, and are acting as U.S. proxies without even being aware of it.
Before the conflict broke out on Europe’s doorstep in February, Russia regularly accused the U.S. of deliberately creating a scenario that was designed to lure Moscow into war while ignoring Russia’s security concerns over Ukraine.
The Pentagon led the mobilization of NATO troops and weapons on Russian borders and Europe quietly followed suit. The security concerns expressed by the Kremlin were ignored by Washington despite many experts describing them as legitimate.
Moscow wanted the West to respect an agreement signed in 1999 that no country can threaten its security at the expense of others. The Kremlin said this was at the heart of the crisis before the conflict broke out.
The question that must be posed after eight months is this: why not sending peace delegations to Russia and Ukraine instead of arms packages? The answer is the American economy crashed in the aftermath of the covid-19 pandemic and now it is growing again as a result of the war. America has a long history of making money out of waging or triggering wars across the planet.
Those paying the price on this occasion are European states with the continent slipping into a recession and ordinary households failing to make ends meet.
According to the Politico, the EU has set aside fund to reimburse member states with the money they spend on sending weapons to Ukraine. However, the EU has been flooded with requests that the bloc simply cannot cover. Brussels has reportedly not even sent out the first payment.
The news outlet cites diplomats as saying the EU had estimated it could cover some 85% of the costs but so many requests were sent to the bloc’s headquarters that it revised that number down to 46%.
That is said to have angered Poland, which is one of the EU’s largest arms exporters to Ukraine and a leading seeker for reimbursements. The diminishing payback scheme and struggling attempts to reimburse risks damaging the EU’s reputation.
The argument coming out of Brussels is that at times like these, unlike the Iraq war, the Western allies must stick together with the United States.
What allies is Brussels exactly referring to? Europeans are struggling to heat their homes this winter because of the Ukraine war. France and Germany’s request for U.S. gas supplies to alleviate the crisis in “ally” states were met with “astronomical” prices by Washington.
There is no doubt the U.S. is making astronomical gas sale profits from the Ukraine war. The U.S. oil giant Chevron, also a large global natural gas producer, is expected to make record exports to Europe.
“We have seen a big uptick in demand from European customers so we are adjusting to that,” said Colin Parfitt, who oversees the company’s shipping, pipeline, supply and trading operations. Europe will not “go back to the same flows from Russia as it did before,” he said
So the U.S. achieved its long term desire to replace Russian gas flows to Europe with its own stocks of liquefied natural gas (LNG). For years Washington has been demanding Europe to wean itself off Russian gas and the Ukraine war has met that demand, even slapping sanctions on Russia’s Nord Stream 2 gas pipeline to Germany. At the time, Berlin strongly censured the move.
American energy companies are now reaping in the profits. “What’s growing in the United States is demand for exports,” Parfitt said.
According to the Energy Information Administration, the U.S. became the top LNG exporter in the first half of 2022, because of increased supplies to Europe amid the Ukraine crisis. Exports rose to average 11.2 billion cubic feet per day compared with the second half of 2021.
The fact is Europe has no choice but to purchase American energy as Washington has imposed sanctions on certain other major gas-producing countries. But why is the U.S. selling at “astronomical” prices to its “allies”. The answer is American politicians, energy giants and arms manufacturers don’t really care about Europe.
Senior officials in France and Germany have even accused the U.S. of overcharging for its LNG and using the war in Ukraine and the energy crisis to make profit and make Europe dependent on U.S. gas.
French Finance Minister Bruno Le Mair recently noted the U.S. should not be allowed to dominate the global energy market as its “allies” in Europe are suffering from the consequences of the Ukraine conflict. He also said it is unacceptable for the U.S. to sell LNG at prices “four times” higher than those paid by companies in America. The French minister also called for the establishment of a more balanced relationship between the U.S. and Europe.
The German Economy Minister Robert Habeck decried American LNG companies of charging too much for gas at a time when Europe’s biggest economy is struggling to balance its energy mix without Russian supplies.
He also recalled how the U.S. has turned to the EU before when crude oil costs were skyrocketing, and that Europe’s national reserves were used at the time to push the prices back down.
At a time that the EU is in crisis, with friends like the U.S. who needs enemies?
Of course, American arms manufacturers are also making gigantic profits. They are shipping weapons to the warzone in eastern Europe.
In the lead up to the war, President Putin said Russia needs to defend itself from an aggressive and hostile America. Washington is not primarily concerned with Ukraine’s security, but with containing Russia, Putin said.
“In this sense, Ukraine itself is just an instrument to achieve this goal, this can be done in different ways, by drawing us into some kind of armed conflict and, with the help of their allies in Europe, forcing the introduction against us of those harsh sanctions they are talking about now in the U.S.” he said at the time.
The consequences of the conflict have been felt by Europeans who have been staging mass protests, strikes and voting governments out of power across the continent. While the war has triggered soaring costs that the European public simply cannot afford, it has also frustrated hopes of any normalization in Europe following the covid-19 pandemic as well as European unity.
Studies show there is growing polarization in Europe as to whether supporting the U.S. into triggering the Ukraine crisis was worth it after all?
It is a great privilege to be amongst distinguished thinkers and architects of the future we all co-create. Admitting worries for common good since contemporary world tensions and energetic crisis are colliding with humanitarian questions, we reflect assurance, decision. Hope.
That atmosphere is profoundly radiant in the great 15-century priory of green entourage and reflections of river Rhone one must admire. Scholars, thinkers, and diplomats gather in this prestigious surrounding. The Swiss University of Geneve is today designated as a profound establishment of dialogue, research, and political culture, inviting diversity and inclusion. University upholds privilege of exceptional keynote speakers of different backgrounds. Among them are former presidents, prime ministers, thinkers, Nobel prize laureates and other personalities with distinguished careers and experience.
Adding to his series, in early October 2022, prof. Anis H. Bajrektarevic conducted and moderated two distinguished days of fresh insights, noble ideas, and stamina by believing in the power of dialogue. Excellency Heinz Fisher, former Austrian State President, was the first guest. H.E. Fisher presented the narrative of WWII, primarily portraying his younger days at school:
“In my childhood, in primary school, we had to greet our teacher with “Heil Hitler” every morning. Can you imagine the climate of that era in most delicate youth?”, he stated.
President Heinz Fischer was born on 9 October 1938 in Graz, Styria, Austria. This young boy was brough up in detrimental Nazi dictatorship, while his parents, father as a civil servant, Esperanto teacher, opposer of contemporary political predominance, discussed the perils and horrendous consequences of sadistic Nazi regime only in Esperanto, what gave us just a blink of precepting the devastating times of that era. Why Esperanto?
“The totalitarian regimes are all blind for what is alive and spontaneous. A child is open. His testimony though innocence and truthfulness could send someone to working camps. It was dangerous to say anything against and Esperanto was revealing. And safe”.
On March 12, 1938, German troops marched into Austria to annex the German-speaking nation for the Third Reich. In early 1938, Austrian Nazis conspired for the second time in four years, to seize the Austrian government by force and unite their nation with Nazi Germany.
“This era was a time of darkness, spiritual suffering, and loss of common sense in the nation’s aspirations and hope. Inner light was dimmed. This great suffering was dormant in the previous phases after the collapse of Austro-Hungarian Empire and afterwards”.
H.E. Fisher argued the importance of historical and longitudinal line of data. Deepen knowledge of world events rebuilds and reshapes basic and grounding facts and angles the foundations from where one can estimate occurring consequences. E.g., creating stable national identity, retrenching all negative aspects of nationalisms, seems to be impossible without nascent phases of democratic development:
“Each phase of the process takes its own time. Without historic perspective and broader context, one cannot ever understand the present tendencies”.
Excellency Fisher spoke about major historic events, like 1st republic of Austria, which is essential to understand succeeding historical acts. After the dissolution of the Austro-Hungarian Monarchy on 30th October 1918, the provisional national assembly of German Austria elected a State Council (Staatsrat) executive, which itself appointed a state government with the Social Democratic politician Karl Renner as head of the State Chancellery with three main political parties—Social Democrats, the Christian Social Party (CS) and German Nationalists (Greater Germans). As acting executive body, it remained in office until the Constitutional Assembly of the Austrian Fist Republic on 15th March 1919.
From 5th March 1933 onwards, the Christian Social chancellor Engelbert Dollfuß continued to rule by suppressing the National Council parliament.
“In the course of the Austrian Civil War on 1st May 1934, the authoritarian Federal State of Austria was implemented. All political parties were banned, except for the Fatherland’s Front supporting Dollfuß’ Austrofascist government”.
The Federal Government ceased at the Anschluss (the incorporation of Austria into Nazi Germany) on 13th March 1938.
As well Second Republic added the missing jigsaw and corelated some major events and historic figures, naming just few. Second Republic, where on 27th April 1945, a provisional Austrian national unity government was formed, with important datum 20th December 1945, when Austrian Constitution was officially re-enacted with ÖVP founder Leopold Figl, forming the first post-war Federal Government. Interesting is “The Victim Theory” (German: Opferthese), encapsulated in the slogan “Austria – the Nazis’ first victim”, which was the ideological basis for Austria under allied occupation (1945–1955) and in the Second Austrian Republic until the 1980s. According to the founders of the Second Austrian Republic, the 1938 Anschluss was an act of military aggression by the Third Reich. The “victim theory” formed in 1949 insisted that all the Austrians, including those who strongly supported Hitler, had been unwilling victims of the Nazi regime and were therefore not responsible for its crimes.
Austria, the “land that nobody wanted”, along the many years, aside pitfalls and victories in discourse and coordinated action, gained its neutral status in tangled historic context.
Austria is bound to neutrality by the 1955 Austrian State Treaty and its constitution, which prohibits entry into military alliances and the establishment of foreign military bases on Austrian territory. Austrian neutrality is an enforced neutrality.
“The territory of Austria was occupied by allied forces until 1955. In 1955 the Soviet Union, in the Moscow memorandum, demanded Austria’s neutrality on the model of Switzerland”.
All the countries with which Austria had diplomatic relations, ratified the Austrian State Treaty.
Today, in reinforcing the culture of dialogue, Austria is a special country with strong culture, music, literature, and profound history. Latest interest is also a great devotion of our guest.
President Fisher, lawyer and professor always admired history and his narrative is profound. Lectures gathered us in conscious awareness how to tackle subtle and deeply sensitive diplomatic questions, while reality is often yielding no traces of support, neither hint of solutions. What matters is integrity and character. And personal, private acolytes we meet on the paths, like colleagues, siblings, parents, and spouses, are indispensable. H.E. wife, First Lady Ms. Margit Fisher was gracing audience with her presence and kindness as well.
H.E. Fisher served his country for many years. He took office as 11th State President of the Republic of Austria on 8th July 2004 and was re-elected for a second and last term on 25th April 2010, leaving office on 8th July 2016.
Excellency Heinz Fischer studied law at the University of Vienna, earning a doctorate in 1961. Apart from being a politician, Fischer also pursued an academic career and became a professor of Political Science at the University of Innsbruck. After two terms as Federal President of the Republic of Austria and more than 40 years in public office, Heinz Fischer retired in July 2016 as Head of State and was succeeded by Prof. Alexander Van der Bellen.
Today H.E. Fisher is active in many boards and collaborates with vanguard crucial figures. As he already did in his early career days: “I am proud being a co-founder of Amnesty International Austria, and Editor of many magazines for Political Sciences”.
In January 2017 Heinz Fischer was named president to the Board of the Institute for Human Science and in August 2017 was appointed as co-chairman of the Ban Ki-moon Centre for Global Citizens.
Excellency Fischer wrote several books in the field of political science and contemporary history. He was among the first speakers under the auspices of so-called ‘Executive Master in Intl. Relations and Global Politics’. Lecture series will host current and former heads of states or government Nobel prize laureates, and other influencers in the world of politics, economy, security and energy.
European-Chinese relations have been on pause since the end of 2020. The politicisation of interaction, caused both by objective disproportions in the development of trade and investment partnerships, and by the desire of Brussels to control the relations of member states with China, became the main trend in the development of dialogue in the second half of the 2010s, which led to the transformation of Beijing from a “strategic partner” (this status was received in 2003) to a “strategic partner and systemic rival” of the EU (for the first time, such an assessment was made by Ursula von der Leyen and subsequently found its way in the China Strategy 2019, prepared by the European Commission jointly with the European External Action Service, reflecting the growing perception of China not only through economic, but already through geopolitical lenses.)
The confrontational tendencies reached their apogee in 2021. First, against the backdrop of accusations that China violated human rights in Xinjiang and the subsequent exchange of sanctions, as well as the failed ratification of the Comprehensive Investment Agreement, the text of which was incomplete as of the end of 2020. Then Lithuania defiantly left the 17+1 format, provoking significant trade restrictions on the Chinese side and a collective lawsuit by the EU against China in the WTO. Naturally, for the first time since 2008, the EU-PRC summit was not held at the highest level and a number of new anti-Chinese bills appeared. Incidentally, the summits were also not held in 2011 and 2014, but for technical, not political reasons. In 2008, the event was cancelled due to the Dalai Lama’s visit to Paris, which was then supposed to host the summit. Trade Compliance Regulation amendments came into force in 2021, increasing the EU’s ability to retaliate pending the completion of WTO dispute settlement procedures. In 2022-2023, amendments to the Trade Compliance Regulation in the field of intellectual property protection, the development of an Instrument against economic coercion by third countries and a stricter International Public Procurement Regulation Mechanism, are planned. In 2022, the summit took place in the context of developments around Ukraine, but did not lead to satisfactory results for the EU.
Given that the pan-European line is acquiring a distinct protective character, it could be amended by the member states that are the stakeholders of the dialogue, primarily Germany. The government of Olaf Scholz was destined to make unplanned strategic decisions regarding all the main partners outside the EU — the USA, Russia and China. This could have fundamental consequences for European-Chinese relations.
The role of Germany in the EU policy towards China
Germany has historically had a fundamental impact on the creation of a model for interaction between the EU and China. In the 1990s it was the interests of German exports that led to the prioritisation of economic gains, and to some extent the de-prioritisation of political concerns and human rights issues — the EU’s policy of “meaningful engagement”. Such a policy was proclaimed in 1995, but the document of the European Commission was based on the 1993 German Concept for Asia. Subsequently, the government of Gerhardt Schroeder, who earned a reputation as a promoter of Chinese interests in Europe, made great efforts to develop the dialogue, and, after the Eurozone crisis in 2010, the dialogue was supported by the government of Angela Merkel. During this period, the interests of business — primarily the automotive industry and engineering concerns — were a priority for Germany. Merkel also defended to the last the independence of the German and pan-European line in relation to China as an alternative to American influence and a way to avoid bipolarity. The 2020 summit, under the German presidency, was to be held in Leipzig in the presence of all heads of EU member states and would end with the signing of many agreements, first and foremost, the Comprehensive Investment Agreement.
However, the arrival of the new government led to a strategic pause in German-Chinese relations as well. In the coalition agreement between the SPD, the FDP and the Greens, the partners speak out strongly against human rights violations in the PRC and see cooperation as possible only if the situation changes. They also state the need to overcome “dependence” on China in critical sectors and the impossibility of ratifying the cooperation agreement amid the current conditions. In August, it became known that the German China strategy would be updated by early 2023.
Reasons for change
Changes in the position of Germany are largely due to external factors. The growth of the PRC’s role in international affairs in itself stimulates the involvement of geopolitical arguments in the statements on China and its departure from a pragmatic discourse. This manifested itself in the 2020 Indo-Pacific Guidelines, where Berlin comments on the need for activation in the Indo-Pacific, including the desire for stability and “rules-based” order in the region, regarding the strategic rivalry between the US and China. The document does not focus on the military, but indicates the need to establish and protect interests. Indirectly, the feeling of instability regarding China is exacerbated for Germany by the escalation of tension in Europe, which has already indicated a departure from establishing an individualised approach in relation to Beijing in favour of a pan-European one.
However, external factors alone are not enough for a transition to soft balancing, since Beijing does not pose an immediate security threat to Germany. Structural foundations for changes were accumulating within the country in parallel with the pan-European ones. Germany and China are indeed, in a certain sense, in a relationship of interdependence: since 2016, China has been Germany’s biggest trading partner, in 2021 it accounted for 8% of exports from and 11.4% of imports to Germany, and the share of Germany in pan-European trade turnover with China is more than 35%. This naturally made it an interested player in further opening up the Chinese market and improving conditions for investors through the IPO. With no prospect of resolving these issues, incentives to cooperate have diminished and fears have escalated.
The most sensitive area for Germany is interaction with China in the high-tech sector. If in the mid-2010s it developed by leaps and bounds, even documents were signed on pairing Industrie 4.0 and Made in China-2025. Then several acquisitions and attempts by Chinese capital to acquire the flagships of German robotics and electronics in 2016-2017 led to an increase in alarmism and a change in domestic investment legislation. The Union of German Industrialists in 2019 even released a report on rivalry with China. In some industries, however, dependence on the Chinese market in absolute terms can indeed be called critical. The German automotive industry supplies more than half of its production to the Chinese market. A similar situation, but in the opposite direction, is observed in the microelectronics market, which stimulates attempts to somehow equalise the disproportions.
The implications of change for Europe-China relations and beyond
Despite the fact that Germany’s defensive course towards China cannot yet be called either final or established, the strengthening of its geopolitical position makes Berlin’s position closer to Paris. There were no fundamental disagreements between the two largest EU states on the Chinese issue, but until recently they proceeded from different motivations. For Paris, the interest in cooperation has historically been driven by strategic and geopolitical considerations, and the economic interdependence of the two countries is not so high, and therefore the interest of Paris in maintaining cooperation trends has been lower in recent years. In addition, Macron’s course of strengthening the EU’s common position towards China was somewhat at odds with Berlin’s desire for pragmatism and individualisation in its approach. Today, when Germany also speaks in favour of a stronger common European position in relation to China, and economic motivation is drifting towards a decrease in interdependence, a platform is being created for uniting the efforts of the tandem, which means further degradation of the European-Chinese dialogue.
The potential activation of the Franco-German tandem regarding China and the subsequent aggravation of confrontational tendencies in the EU foreign policy towards the PRC, in turn, are important for Russia in the same sense that they are important for the world order as a whole. The European-Chinese diagonal in the geometry of world politics is no less important than U.S.-China, Russian-American or Russian-Chinese relations. Its very presence and possession of independent dynamics in the 2000s was evidence of the polycentrisation of world development, the complication of the structure of international relations. Its absence, accordingly, will once again testify to a return to a binary perception of reality.
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