n February 71 years ago, Turkey joined NATO. The choice was the result of the first stirrings of the Cold War: the Soviet Union had asked Turkey, which refused, military bases and new conditions for access to the Turkish straits. The United Kingdom, which at that stage had abdicated its role as a great world power, had left its burden to the United States, ready to reserve the Truman doctrine for the Aegean context. Thus, the role of bridge between West and East that Byzantium had always played, was now harnessed in the Atlantic Pact and, indissolubly, in the destinies of Western countries: a function of buffer and guardian of those two straits, sacred in every age.

Ankara’s (old) ambitions

Yet the relationship between Ankara and NATO has not always been idyllic, experiencing ups and downs between pragmatism, “clashes of civilizations” and mutual accusations. However, for Turkish citizens as well as for Recep Erdogan, as someone said, evidently it feels safer “to stay here”. Only in the last handful of years, Erdogan has given Europe a series of reasons to continue to wonder what was the point of Turkey in NATO: the exchange of villainies with Emmanuel Macron, the blackmail on Syrian refugees, the issue of the Armenian genocide, the “sin” of the S-400 from Russia to the strange and complex situation of the last year and a half, which has made Erdogan a sort of free player, moreover cheered by his re-election. Enough to put NATO in check again, yielding to Stockholm’s ambitions, but putting on the table the most difficult of demands: entry into the European Union. A textbook Realpolitik maneuver, a seasoned tightrope walker of geopolitics. Or blackmail, if you prefer, not yet clear on whose skin.

Turkey-EU: a difficult union

The dream that Turkey caresses since the late eighties therefore seems to return to shine after years of turbulence and relative stasis that have been repeated for at least twenty years, within which we have witnessed everything and the opposite of everything: from the absolute no of Giscard d’Estaing for demographic issues to the feverish enthusiasm of Jens Stoltenberg, passing through a sofa gate and a label (for Erdogan) of “dictator we need”.

Now that the agreement has served, and given the speed with which Ankara promises to ratify Sweden’s entry into the Alliance, it is to be expected that the European Union will now take this responsibility, in the face of which double games or procrastination will not be allowed, since the stability of the Atlantic Pact and its internal peace is at stake. It is now entirely in the hands of the Union, finally at its test of maturity, and is intertwined with Turkey’s accession process. The difficulties that this union will have to face are many and reciprocal: it will force Europe and Turkey to deal with their mutual ghosts. Will the EU be willing to treat it as an equal? Will the EU have to turn a blind eye to human rights? Another age-old issue: Islam. Is Europe culturally and politically ready to welcome 80 million Muslims as European citizens?

If Turkey stops being a bridge and buffer

But if we want to go beyond this point, it is the strategic changes that will become epochal. As General Giorgio Battisti, first commander of the Italian contingent of the Isaf mission in Afghanistan and member of the Atlantic Committee, pointed out to Adnkronos, the Baltic Sea would now become a western lake under the control of the Atlantic Alliance, disturbing Moscow and its fleet that “could be subject to restrictions or limitations by NATO and in case, we hope never, of a NATO-Russia conflict, the Russian Baltic fleet would still be trapped because all the coasts of the Baltic Sea, both northern and southern are coasts of NATO member countries”.

But above all, Turkey would cease to be a bridge and buffer, abdicating a historical function. Same thing for the former Iron Curtain countries, also former bearings transformed into friction zones. In the aftermath of Vilnius, therefore, the Anatolian peninsula would be transformed into the last outpost, increasingly armed, of NATO and the European Union: it must be remembered that Ankara has, in fact, asked for a greater role in the Alliance, asking the US for a new supply of 40 F-16s and a few thousand missiles. The bridge that has become a bastion will now extend, in an assertive position, both eastwards towards Russia and the entire former Soviet Caucasus, but also towards Africa and the Middle East, becoming a (closed) border rather than a passage.

On the Turkish side, this attitude can find different explanations, including a partial weakness of Erdogan, aware of the dangerous relationship with Moscow and of the possible advantages that European membership would give him. But perhaps it is the Union that is not clear that stretching its offshoots beyond the Bosphorus, for NATO and Western (and therefore also European) countries will mean losing that clearing house – halfway between East and West – exposing itself to new risks. Even greater than those resulting from Ukraine’s rapid entry into the Pact. Europe, like the United States, must recognize that the wheat deal, as well as the mediation of prisoners or the project of a phantom gas hub, worked because of Erdogan’s two-faced Janus. Will Turkey, with a dual affiliation, still be a credible mediator in elsewhere other than Europe? Conversely, what would happen if once in the Union, Ankara continued to act as a free player?

L'articolo Why admitting Turkey could be a risk for the European Union proviene da InsideOver.

How business is seeking rich rewards from surging military spending triggered by the Ukraine war

Russia’s invasion of Ukraine has piqued the self-interest of private investors and military firms which calculate that the increased military spending spurred by the conflict will boost growth for defence-focused companies.  

And there’s little wonder why, with world military spending growing for the eighth consecutive year in 2022 to an all-time high of €2,042 billion, according to new data published by the Stockholm International Peace Research Institute (SIPRI).

By far the sharpest rise in spending (+13 per cent) was seen in Europe, largely accounted for by Russian and Ukrainian military expenditure. However, military aid to Ukraine and concerns about a heightened threat from Russia strongly influenced many other states’ spending decisions, as did tensions in East Asia.

Serge Weinberg, chairman of €43 billion French pharmaceuticals and healthcare multinational Sanofi,  is one of the most prominent of the private investors tapping into this heightened state of defence awareness in the wake of the Ukraine war. 

He is championing the consolidation of France’s fragmented aerospace and defence supply chain via Weinberg Capital Partners, his investment firm which has raised over €100mn for a new fund backing French defence companies. It expects further fund-raising to double that figure.

Weinberg’s campaign coincides with president Emmanuel Macron calling last year for French defence contractors to emulate a “war economy”. Macron’s administration backs the creation of investment funds to support some 4,000 small and mid-sized companies supplying the likes of defence and aerospace titans Airbus, Dassault Aviation and Thales. 

“The bigger defence companies are concerned about having a solid supply chain. This is becoming even more important given the perspectives of additional military spending that is set to come through with the next multiyear military budget,” Weinberg told the Financial Times in March. 

“There is a need for additional production capacity, ability to build up stocks, and therefore there is a need to strengthen the financial structures [of these groups],” the former chairman of PPR and CEO of Rexel added.  

High-impact expenditure

SIPRI data shows that military expenditure by states in Central and Western Europe totalled $345 billion in 2022. In real terms, spending by these states for the first time surpassed that in 1989, as the cold war was ending, and was 30 per cent higher than in 2013. Several states significantly increased their military spending following Russia’s invasion of Ukraine in February 2022, while others announced plans to raise spending levels over periods of up to a decade.

‘The invasion of Ukraine had an immediate impact on military spending decisions in Central and Western Europe. This included multi-year plans to boost spending from several governments,’ said Dr Diego Lopes da Silva, Senior Researcher with SIPRI’s Military Expenditure and Arms Production Programme. ‘As a result, we can reasonably expect military expenditure in Central and Western Europe to keep rising in the years ahead.’

Some of the sharpest increases were seen in Finland (+36 per cent), Lithuania (+27 per cent), Sweden (+12 per cent) and Poland (+11 per cent).

‘While the full-scale invasion of Ukraine in February 2022 certainly affected military spending decisions in 2022, concerns about Russian aggression have been building for much longer,’ said Lorenzo Scarazzato, Researcher with SIPRI’s Military Expenditure and Arms Production Programme. ‘Many former Eastern bloc states have more than doubled their military spending since 2014, the year when Russia annexed Crimea.’

The war in Ukraine has sparked plans for a significant increase in military spending in many other European countries, including France, Germany, Poland and the UK. With governments investing more in drones, sensors, cyber and artificial intelligence, private investors’ antennae are twitching. 

That said, environmental, social and governance (ESG) consideration weigh heavily on some fund managers’ minds. Many are wary of being seen to support weapons manufacturers, opting instead to invest in developing dual-use technologies for both civil and military applications. 

The two top private equity defence deals by value were consummated by Advent International, which bought UK-listed groups Cobham for £4bn in 2019 and Ultra Electronics for £2.8bn in 2022.   

Tanks a lot

The war has also seen the number of military vehicles sold by private dealers in the UK to Ukraine soar since Vladimir Putin’s full-scale invasion last year.

As Ukraine’s forces have scrambled to arm themselves in the face of Russia’s onslaught started by the full-scale invasion in February 2022, with towns like Bakhmut and Avdiivka now under daily attack in the war, the demand for weapons has never been higher.

British businessman Nick Mead spent decades buying military vehicles from the UK Ministry of Defence for his entertainment company Tanks A Lot, but since February 2022, Ukrainians desperate for tanks and armour have been buying them off him. But Mead’s vehicles are not the only ones on the road to the war.

More than €34 million-worth of military vehicles were shipped from the UK to Ukraine between April and September 2022 alone, according to government data, while in the whole of 2021 only £37,000 worth of vehicles were sold, in 2020 it was £550,000 and nothing in 2019.

The soaring demand for British armoured vehicles has driven prices up, leading some to accuse sellers of profiteering. Mead says: “There’d be some people who’d think we’re profiteering out of war, and I guess we are and that hurts. What I’m trying to do is help Ukraine, and I wish a lot more people would help Ukraine.”

As for whether the surge in demand for matériel will intensify rivalry between suppliers belonging to the ‘Atlantic’ and European blocs, SIPRI’s Scarazzato reveals there are many discussions at the European level to coordinate procurement in favour of companies in the European Defence and Technology Industrial Base (EDTIB).

‘But the issue is notoriously thorny, as countries tend to favour their national industry. Moreover, the urgency and the pressure created by the war in Ukraine are pushing some countries towards off-the-shelves acquisitions often from the US companies or (in the case of Poland) South Korea.

Scarazzato adds a caveat, however. ‘European companies have been wary about ramping up production, wanting to see contracts signed before committing to investments. The reason is they want to make sure their return on investment is guaranteed, and not at the mercy of political wills.’

L'articolo Cashing in conflict: the Ukraine War and its business implications in Uk and Europe proviene da InsideOver.

On April 26, 2023, more than a year after the outbreak of the Russia-Ukraine conflict in February 2022, Chinese president Xi Jinping held his first interaction with Ukrainian president Zelensky by way of an hour long telephonic conversation.

Both sides are reported to have discussed the crisis in Ukraine, with president Zelensky saying that he had a long and meaningful call with Xi. However, for a country of China’s standing that is seeking to play a major role in upholding the institution of global governance, the Xi-Zelensky phone call could be a classic case of too little, too late. Besides, being lost no time in clarifying that the conversation was requested by the Ukrainian side. In contrast, since the outbreak of the Ukraine crisis, President Xi has had several virtual and in-person meetings with President Putin, most recently in March 2023 when he visited Russia.
Lately, China has been trying to project an image of itself as a global mediator. On February 24, China proposed a 12-point peace plan for resolving the crisis in Ukraine. Ironically, till that time, President Xi had not had a single interaction with its Ukrainian counterpart – a fact that was increasingly creating murmurs even among countries of the global south. However, it is not just China’s inordinate delay in communication with the Ukrainian leadership that is the issue here, but rather Beijing’s questionable neutral position on the Russia-Ukraine conflict.

One may recall that just a few weeks before Russian troops entered Ukraine, President Putin met President Xi in Beijing on February 4, 2022. It was a time when Russia had already amassed a huge build-up on Ukraine’s borders. Instead of dissuading Russia from impinging on Ukraine’s sovereignty, President Xi went ahead and pledged a no-limits cooperation with Moscow. If China wanted to don the mantle of peace broker, that was the time to effectively do so. Instead, Beijing proceeded to provide a blanket reassurance to Russia, thereby further emboldening it to act against Ukraine.

Since the onset of the Russia-Ukraine conflict, Beijing has maintained that it is a responsible power and a neutral party. Yet, over the course of the last year, China has stepped up its political, diplomatic,
economic and strategic support to Russia – all but stopping short of providing direct military assistance to the latter. China has been blocking UN resolutions criticizing Russia for its actions in Ukraine and has also extended Moscow an economic lifeline amidst wide-ranging economic sanctions. During President Xi’s recent visit to Moscow (March 20-22, 2023), both sides further renewed their pledges of strategic and economic cooperation.

China and Russia also have robust defence relations and have conducted several joint military exercises, even after the outbreak of the Russia-Ukraine conflict. In February 2023, reports were rife about China’s plans to provide lethal miliary support to Russia in Ukraine. While this has been vehemently dismissed by Beijing and has, so far, not been confirmed, it is suspected that China is looking for ways to increase assistance to Moscow without tarnishing its own image. Some of the ways adopted by Beijing to avoid sanctions and reputational cost include supplying dual use equipment to Russia, operating through the cover of private companies, or even routing supplies through a third country. Over the last year, Chinese companies have provided assault rifles and body armour to Russia apart from navigating equipment, satellite imagery, vehicle and jet fighter parts, electronic jamming technology, and electronic parts for anti-aircraft missile radars. Such actions, for someone, could do not qualify Beijing as a credible mediator.

Again, for all of Beijing’s diplomatic language about sovereignty and territorial integrity, the startling remarks made by Lu Shaye, China’s Ambassador to France, questioning the sovereignty of former soviet states, gives a peek into Beijing’s actual worldview. Responding to a question on whether Crimea belong to Ukraine, Ambassador Lu had stated that ex-Soviet countries don’t have an effective status in international law because there was no international agreement to materialize their status as sovereign countries. This essentially disputes Ukraine’s sovereignty over Crimea and other Russian occupied areas. This is also not a very comforting statement from the emissary of a country professing to establish an alternative ‘global security’ order based on respect for sovereignty.

Though the Chinese Ministry of Foreign Affairs was prompt to distance itself from Lu’s comments, it is hard to believe that the statements of a hand-picked ‘wolf warrior’ like Lu Shaye, do not somewhere reflect the inner thinking of the Chinese Communist Party. More concerning is the fact that Lu is echoing what Moscow itself has been saying on Ukraine. As pointed out by Lithuanian Foreign minister Gabrielius Landsbergis, this is the Russian propaganda on Ukraine, and now its being sent out by another country, which is in our eyes an ally of Moscow. Once again, this does not position Beijing very well as an impartial mediator in the Russia-Ukraine conflict. Some like Czech president Petr Pavel have even assessed that it may actually be in China’s interest to prolong the status quo in Ukraine since it would allow Beijing to continue ‘pushing Russia to a number of concessions’ while also keeping the West occupied.
Apart from Beijing’s interest in resolving the Ukraine crisis, the other question that arises is its actual ability to do so. On April 27, the Russian Foreign Ministry commenting on the Xi-Zelensky call said that it had ‘noted’ Beijing’s willingness to put in place a negotiation process and welcomed any attempt to end the Ukrainian conflict ‘on its own terms.’ However, less than a day later on April 28, Russia resumed missile attacks on civilian targets in Ukraine, resulting in more than twenty casualties, including three minors. This is a clear message from Kremlin that it is not in a mood to be reined in by Beijing or anybody.

The only situation in which Russia may allow China to broker a peace on its behalf would be if it finds itself in an irrecoverable position of weakness, and needs to either buy time to fortify itself or to find a way out of Ukraine without losing face. China’s interest in mediating the Ukraine crisis throws up two scenarios: one is where China merely wants to gain some moral ground by posturing as a ‘mediator’ without changing anything on ground between Russia and Ukraine. The second and more concerning one is if China is posturing as a ‘neutral’ party trying to broke a ‘peace deal,’ but is actually acting as a proxy on behalf of Russia. This would change the nature of the conflict by providing Moscow tactical and strategic military advantages over Ukraine.

Following his call with President Xi, President Zelensky had remarked that it would act as a ‘powerful impetus’ to their bilateral relationship. Notably, he did not make any comment on how ‘meaningful’ or otherwise the talks might have been for resolving the Russia-Ukraine conflict, per se. It is clear that Kiev has no illusions about the optics involved in China projecting itself as a mediator in the Ukraine crisis.

L'articolo The Xi-Zelensky Phone Call: a Case of ‘Too Little, Too Late’? proviene da InsideOver.

Nick Bostrom is a Swedish philosopher and professor who heads the Future of Humanity Institute at the British University of Oxford. Bostrom’s field of study is that of transhumanism and embraces areas such as cloning, Artificial Intelligence (AI), superintelligence, the possibility of transferring consciousness to technological supports, nanotechnologies and theses on simulated reality. As far as AI and its future developments are concerned, the professor and researcher is animated by a long-term “pessimistic” position: substantially, Bostrom believes that when AI will reach the level of superintelligence, i.e. when it will exceed human intelligence, it could easily pose a danger to all of humanity. Something that could happen over a very long period of time, even generational, but according to him could easily happen. To deepen this position and understand what the risks really are, but above all how AI works in view of the possible advent of superintelligence, we interviewed him.

Professor, you are strongly critical of the development of AI, with a very pessimistic long-term perspective on the dangers it could have for all of humanity. So I ask you: is it possible to teach a machine ethics, empathy and compassion, exclusively human values? How?

I’d say rather that I’m ambivalent about AI. I’m very optimistic about the potential upside, if we get things right, though I do also think there are serious risks involved with developing machine superintelligence. Exactly what we need to steer advanced AI systems to get a good outcome is not known yet, and that is an active research field. Many of the smartest people I know are now working in that field.

If human values could be taught to AI, knowing that man is not only characterized by positive values but can also be petty, sneaky and violent, could there be a risk that the machine, autonomously, knowing us, would assume these behaviors and become aggressive towards us?

Yes, though it could also become aggressive to us without such values.

Can Asimov’s laws of robotics be applied to AI? Yes/no why?

Asimov’s approach was too simplistic.

You believe that controlling the capabilities of AI can only be a temporary measure. Wouldn’t it be enough to insert a different type of algorithm that automatically inhibits any aggressive behavior? Is it possible to define such an algorithm?

Is it aggressive behavior when we pave over an ant colony to build a parking lot?

Knowing that AI works based on the dataset that we give it, wouldn’t it be enough to choose the dataset wisely to avoid nasty surprises?

Smart AIs can generalize beyond their training data, and they can build models of the world and use those models to understand novel situations and to make plans.

AI machines are faster than humans in learning concepts and reasoning, but they are still not capable of performing automatic human actions, those that are based on instinct. Will this gap ever be filled?

I think currently AIs are slower than humans in learning concepts. For example, ChatGPT-4 was trained on approximately all of the internet, but individual humans achieve similar concept understanding based on vastly less data.

L'articolo “AI is a risk for all humanity”, the interview to Nick Bostrom proviene da InsideOver.

Italy’s government has activated the Italian Anti-Mafia Commission to investigate and clean up the Chinese Communist infiltration in Italian society and collusion with officials and gangsters to manipulate illegal activities organized by Chinese gangsters. The Commission also investigates China’s overseas police stations, Chinese truck cases, and underground banks.

The Mysterious Bank

According to a report by the Italian news magazine Le Formiche on March 16, the Florence court has arrested two Chinese people involved in illegal money launching. In addition, 13 people were listed as suspects. The case involved a secretive Chinese bank with branches in Rome, Florence, Prato and other places that transferred billions of euros to China. Italian investigators dubbed the bank a “Chinese underground bank.”

The “bank” provides a hidden remittance service and charges 2.5 per cent of the transfer amount as a commission. There are mainly two ways to transfer money – small amounts transfers from one or more credit cards to an account through apps such as WeChat or Alipay.

Larger amounts are prepaid to the “underground bank” designated by the customer through the account and bank card opened in China, and then the cash is withdrawn at the branches of the underground bank in Florence and Prato and then transferred to other Chinese to be shipped back to China in other ways.

Prato, near Florence, has a concentration of textile and accessories factories and is also a city inhabited by Chinese in Italy. The Italian police discovered that this city has become a stronghold for illegal infiltration by the Chinese underworld.

The “Chinese Mafia” in Italy

The crime of money laundering run by the “Chinese Mafia” in Italy has a long history. In December 2014, the AFP news agency quoted the Roman police as saying that some Chinese business owners and businessmen sent income from smuggling and selling counterfeit products and tax evasion to China through a British financial company named Sigue.

Sigue has seven branches in Rome, mainly engaged in the remittance business of local Chinese people. Most of the remittances use false names, some are fabricated, and there are names of the deceased, and there are even customers who do not know.

The official banks of the Chinese Communist Party are involved in these illegal operations. In June 2015, the Italian Prosecutor submitted an indictment against 297 people and the Bank of China to the court. Bank of China’s Italian branch was accused of assisting Italian Chinese in money laundering. The 297 people included 4 Bank of China’s Milan branch senior managers. The Florence police found that in less than four years, as of 2010, more than 4.5 billion euros from fraud, prostitution, labour exploitation and tax evasion were transferred to China through remittance services. Among them, 2.2 billion euros were remitted through the Milan branch of the Bank of China.

The Italian prosecutors’ indictment is based on an investigation started in 2008 called “Money River” that the money was sent to China through a remittance intermediary called Money2Money, from which the Bank of China received a middle fee of 758,000 euros. Prosecutors have sought help from the Chinese authorities but to no avail. The Italian authorities restarted the Anti-Mafia Committee this time, with an obvious goal of targeting the infiltration of the Chinese Communist Party (CCP).

China Set up Highest Number of Overseas Police Stations

According to a survey published by the Spanish human rights group Safeguard Defenders in December 2022, China had established 54 police stations worldwide by September 2021 and added 48 “overseas police and overseas Chinese service stations”.

“In name, it is to assist the Chinese overseas Chinese in administrative affairs. It uses the bilateral security agreement signed with the host country to set up a “police station” to monitor Chinese overseas Chinese and wait for opportunities to repatriate dissidents. Giuseppe Morabito, Director of the NATO Defence Academy Foundation (NDCF), told to L’Espresso, an Italian weekly news magazine, on 19 December 2022 that Italy has the most overseas police bases set up by the CCP, with 11.

At present, Rome, Milan, Venice, Florence, Sicily, and Prato, the city with the largest Chinese community in Italy, all have so-called “service stations” by the CCP’s overseas police. According to a report by RFI in December 2022, Italian Interior Minister Matteo Piantedosi stated that sanctions against the CCP’s illegal actions in Italy would not be ruled out. Italy has not authorized the CCP regime to care about police affairs.

L'articolo Italy Activates Anti-Mafia Agency to Investigate Chinese Infiltration proviene da InsideOver.

Today if we talk about soft and hard power, it’s because Professor Joseph Nye theorized them in the late 1980s.

Nye is a Political Science researcher at Harvard University and throughout his long and prestigious career he has been a fundamental point of reference in US politics, which he helped to shape through his original studies. From 1977 to 1979, Professor Nye was Deputy to the Undersecretary of State for Security Assistance, Science and Technology and chaired the National Security Council Group on Nonproliferation of Nuclear Weapons. In 1993 and 1994, he served as chairman of the National Intelligence Council, which coordinates intelligence reporting for the President. During the Clinton administration from 1994 to 1995, Nye served as Assistant Secretary of Defense for International Security Affairs, while in October 2014, Secretary of State John Kerry appointed him to the Foreign Affairs Policy Board, a body that discusses strategic issues and provides the Secretary and other senior Department officials with insights and ideas that can translate into courses of action.

Thanks to his ten-year experience in international politics and his revolutionary ideas, Professor Nye is certainly the most suitable person to provide a different perspective, compared to the realist one, of the current global situation.

We’ve recently managed to have a brief interview with the professor, who explained to us some key concepts of soft and hard power and how the major global powers are interacting today, with a small look at the future and the European situation.

Given that, especially in Italy, the public has difficulty understanding what soft power and hard power are, could you give us a brief definition?

Power is the ability to affect others to get what you want and it can be done in three ways: coercion, payment, attraction. Soft power is the ability to get what you want through attraction rather than coercion or payment.

What are the substantial differences between US, Chinese and Russian soft power?

Russia attracts primarily in parts of its cultural area in its former empire. China has wider aspirations and attracts by culture, it economic performance, and its economic assistance. The US attraction through its culture and civil society, primarily where liberal values are involved .No country has universal attraction to all audiences, but polls show that the US has more soft power than China or Russia at this stage in history.

The war in Ukraine has revolutionized the global order: Russia has further tied itself to China, and is now to all intents and purposes the junior partner in this bilateral relationship. When the war ends how can Russia be reintegrated into the international system? Will it be possible to untie it from China?

The Russia/China alignment will not be easily undone, but there are some tensions between them. It will be important to reintegrate a post Putin Russia into Europe to the extent that is possible.

In 2018, you wrote that the real danger is that China proves to be too weak rather than too strong, and thus fail to contribute to the multilateral order it did not help to create. Do you still believe so? Why?

No. Though I think China faces serious demographic and productivity problems, it is strong enough to seek to reshape rather than to contribute to the liberal international order.

For years, US security policy has identified China as the “pacing challenge” as it has been demonstrated (and demonstrable) that Beijing is working to try to counter US global economic/military power. In the light of the speed of Chinese rearmament, do you think that the “Thucydides trap”, which you believe is unlikely but still possible, is closer?

I still do not think that the analogy with Thucydides’s Greece fits well. I prefer Kevin Rudd’s metaphor of a “managed competition” between two strategic rivals who are not an existential threat to each other and who can gain from areas of cooperation such as climate change.

Around mid-2022, you believed that we were not in a “new Cold War”. However, the United States is trying to free itself from some ties with China (I am thinking, for example, of the microchip supply chain and therefore that of the Rare Earth Elements). So, I ask you: is decoupling actually possible? Given this attempt to cut these ties, is it still not entirely correct to speak of a “new Cold War”?

A full scale decoupling of the US (and Western) economies with China would be enormously costly to both sides. It is unlikely that will happen unless we blunder into a war. But selective decoupling of supply chains with military and strategic significance is likely. Nonetheless this is not like the Cold War where there was almost no economc, social or ecological interdependence with the Soviet Union.

In your opinion, how could the West reinvigorate soft power with non-aligned countries (especially African and Latin American ones)?

We should take their agenda seriously, particularly on development

In a recent interview with a South African international relations researcher, it emerged that non-aligned countries do not want to be the stage of confrontation between global powers. So, partnership proposals must have the sole purpose of mutual benefit, and not oppose the presence of rival powers. Do you think the United States and European countries are still capable of it?

Yes, there are joint gains to be made in development and climate.

Speaking of Europe, do you think that the European Union is a limit or a multiplier of the soft power capabilities of the individual member countries?

Definitely a multiplier!

Featured image from Chatham House

L'articolo “China-Russia axis hard to shake. The EU should not give up on Moscow.” Soft power according to Joseph Nye proviene da InsideOver.

For all its bluster, Chinese foreign policy may be at a geopolitical crossroads on the first anniversary of the Russian invasion of Ukraine. Since last February, China has tried everything to keep itself engaged, albeit unilaterally and uninvited by any member of the international community, with negotiations to end the war. But it has nothing much to show at the end other than the realization that the global isolation is hurting it. Borrowing China’s consistent argument – it is one that Russia believes – that the United States-led West provoked Vladimir Putin until he crossed the Ukrainian border, the problem for China is the narrative remained with the West, not Beijing.

It is the West that did nothing to prevent the war. It promptly imposed sanctions against Russia which the West subsequently turned a blind eye to – the example of how Russian oil takes a global detour to reach the United States is a glaring example. It continued to arm Ukraine, though with defensive and not offensive weapons – meaning thereby the intention was to prolong the war rather than end it. It used Ukraine as a photo-op for the heads of state of European nations. Even the wife of the US president went there. President Joe Biden just couldn’t stop watching the parade of guests and went there himself. Even today, the West and Ukraine are on a daily routine of chats to decide how they will strategise for the ongoing war.

The trading partners of the US and Europe are supporting them, vocally or silently. There has been not much of dissent seeking the US to rein in its ranking policy of allowing the war to go on indefinitely. China is the lone exception. It is not invited at any Western table. It finds itself having to pursue an entirely independent policy on the war. That is the root of the angst in Beijing. They want to belong to a group to show they have ideas to end the war – or at least pretend to have ideas. But nobody is interested. So they tag along, alone. And how? By treating Ukraine as a proxy war against the United States in particular, select portions of the West in general. Far away from Ukraine and with only rhetorical support to Russia, nothing explains China’s policy other than that it wants the war to set the stage for another Cold War.

Despite its anti-American propaganda, China has not really done much to help Russia. It publicly supported Russia over the invasion, calling for a negotiated end to the conflict. President Xi Jinping met with Putin but not Volodymyr Zelenskyy, but that has not stopped China from sending humanitarian aid to Ukraine in the initial months. Aware of the western sanctions against Russia, China ensured that it did not cross the line despite committing itself to its ‘no-limits friendship’ with Russia.

Look at the scenario. The China-US ties are worse than before, thanks to the ill-advised shooting down of a Chinese balloon(s) by the Americans. The Americans raised a bogey that China proposes to supply arms to the Russians, well knowing that Russia has the world’s second largest army in the world, followed by China. China bristled when US Secretary of State Antony Blinken made an issue out of the China-arms-to-Russia theory and issued a warning of serious consequences if ‘lethal’ weapons are supplied to Russia. The brouhaha ended up in a chilled round of diplomacy and exchange of words, but nothing else.

Beijing ramped up its anti-American propaganda thereafter, while the Chinese foreign ministry issued a memorandum to western journalists about American hegemonic intentions. China rounded up its campaign by announcing a deeper relationship with Russia, calling the alliance “as stable as Mount Tai”—to use a Chinese idiom.

So far, it has calibrated its foreign policy vis-à-vis Ukraine to how the world perceives it. A media report analysed thus: “China has walked a fine line: It suspended business when threats to Chinese interests necessitated it, parroting Russian talking points when they aligned with China’s criticism of the U.S., and continuing trade when the environment was conducive. In doing so, China has used the opportunity to further its foreign policy interests at an incredibly uncertain time in the international environment.”

This policy has given it the freedom to do what it really wants: Give no opportunity to the West to criticize Chinese actions, continue to support Russian actions without violating western economic sanctions, and all the while keep chastising the US. Such a policy has only one objective: Treat itself as a strategic rival of the United States and project the image as a policy at every opportunity the Ukraine war creates.

There is no public knowledge so far of China having provided any ‘lethal’ military support to Russia. But there is a logic to the proposition: China would not want to let go of an opportunity to test its current military arsenal even if by proxy by allowing Russia to use it against Ukraine. It may want to observe from close quarters how Russia strategises the war effort, to even theoretically equip Chinese military commanders with data to study how a war is fought—having fought its last war in 1979, nearly all of the Chinese military has never experienced conflict in the last 40-odd years.

L'articolo More Lessons Learnt than Taught for China on War Anniversary proviene da InsideOver.

The Russian invasion of Ukraine, on February 24, 2022, will be remembered among the 21st century’s pivotal events, a turning point in world history.

There is no aspect of today’s international relations and global economy that has not been touched by the conflict and the reactions it has provoked. Barely three decades after the Berlin Wall collapse, a Cold War 2.0 is looming with a global geopolitical realignment affecting world trade, supply chains, and financial networks.

The renowned French anthropologist and historian, Emmanuel Todd, has even claimed that World War III began; he also added that the leaderships involved show a worrisome “nihilistic vertigo”.

The conflict is perceived in Moscow as existential for Russia. However, there are indications that it could be existential for Western democracies as well. NATO’s Secretary General has even claimed that the real risk is not an escalation but a victory of Russia.

Whoever will prevail will get a bigger voice in dictating the future world order rules; particularly, if will continue to be under the exclusive US leadership or will move towards an authentic multipolar setting.

After this conflict, nothing could be the same again; but for transatlantic relations, the Russian invasion of Ukraine has been a real panacea.

In 2019, then US President, Donald Trump, threatened to withdraw the United States from NATO if its other members had not increased their military spending. He was followed by the French President, Emmanuel Macron, who argued that “What we are witnessing is NATO brain death” and that “America’s ally is turning its back on strategic issues.”

In the summer of 2021, then, US, and NATO, ruinously withdrew from Afghanistan. The humiliating exit from Kabul raised serious doubts about the Alliance and it stirred strong transatlantic tensions.

Today the situation has reversed, and NATO members should thank Vladimir Putin’s reckless decision for that. If one were to think of a celebratory moment of the revived transatlantic relation, nothing would do better than a bust of the Russian leader provocatively placed inside the North-Atlantic Council great hall in Brussels with the inscription “The man who saved the Atlantic Alliance” underneath.

Today NATO and the EU are cohesively confronting Russia in Ukraine by providing massive economic and military aid, and the strongest sanctions ever imposed to Moscow. The latter include the end of all Russian oil and gas supplies to Europe, the freezing of as much as $350 billions of Russian funds deposited in Western banks, as well as a significant increase of European countries’ military spending. Germany alone announced a huge and unprecedented €100 billion increase. If NATO further eastward enlargement towards Ukraine has been momentarily stopped, the one towards Northers Europe appears successful with the forthcoming entry of Finland and, if Turkey will consent, Sweden.

President Biden’s brave visit to Kiev on February 20th has been the iconic moment of such sequence of successes.

It should not go unnoticed, however, that the war has triggered reactions which go far beyond the European continent and the transatlantic partnership.

Last May, the Atlantic Alliance launched its new Strategic Concept by claiming that: “The Russian Federation is the most significant and direct threat to Allies’ security and to peace and stability in the Euro-Atlantic area… [and to] the rules-based international order. “

China has now been included in the Concept for the first time by emphasizing that: “[its] stated ambitions and coercive policies challenge our interests, security, and values… It strives to subvert the rules-based international order… The deepening strategic partnership between the People’s Republic of China and the Russian Federation…attempts to undercut the rules-based international order…”   

It was a radical political evolution. If Russia was Europe’s main energy supplier, China is still the EU’s top trading partner, not to mention that it is the United States’ too.

Both NATO and the EU have then embraced not only America’s stance towards Russia, but also its growing concern about China. It is all built upon Biden Administration’s narrative that has framed nowadays geopolitical moment as the inflection point of an epic confrontation between democracies and autocracies.

To confront Russian and Chinese autocracies, the renewed transatlantic partnership is even ready to stomach an increased, dangerous, coordination between Moscow and Beijing, unprecedented since the heights of the Cold War in the1950s and 1960s. NATO and the EU, apparently, are also giving up to the globalization as we have known it for the last three decades. Traditional energy and supply chains are changing or are re-considered, trade routes are re-oriented and words like near-shoring, re-shoring and de-coupling are now frequently used in the economic and trade jargon. 

While the whole outcome and cost of this geopolitical shift are still uncertain, there is no doubt that Europe has already borne the higher price.

The diversification of energy supplies from Russia is presenting hefty bill for European consumers and for their economies’ competitiveness. Sanctions against Russia, and those looming against China, risk putting all supply chains under significant stress and to disrupt a quite fruitful trade relationship. Among this policy shift unintended consequences, there are also higher inflation and raising interest rates. Both could radically change the last four decades economic patterns.

The Chip Act adopted by Biden Administration last October, to stop the selling of semiconductors to China, might trigger a major technological war which could somehow hobble the ongoing Fourth Industrial Revolution, not to mention the rising tensions about Taiwan.

The so-called IRA (Inflation Reduction Act) recently adopted by Washington to boost the green energy transition is creating strong commercial tensions with the Brussels.

Unfortunately, despite all Western predictions, sanctions have not yet brought Russia to its knees. According to the IMF, in 2024 the Russian economy is even predicted to grow by 2,1%, more than Germany and United Kingdom. 

Furthermore, the sanctions against Moscow have been adopted only by the Western democracies and few other Asian like-minded countries.

The strengthened transatlantic bond, then, has not been matched by a similar increased world leadership of the so-called Global West. Western democracies’ long-held belief that the world revolves around them is challenged. A different world is taking shape. Although confusely, the so-called Global Rest appears on the rise and developing its own geopolitical consciousness. An increasing number of emerging economies are perceiving themselves as alien from many western narratives, visions, and policies, as well as from the tightly Western-led global financial system. De-globalization is looming, and de-dollarization too.

A global poll published on February 22^nd has confirmed previous assessments. To a large extent, Global Rest seems believing that “US and European support for Ukraine is driven by the desire to protect Western dominance”. In other words, it would have nothing to do with defending democracy and Ukraine’s territorial integrity.

A long list of countries – mostly Global West’s traditional partners – are showing disaffection towards the US-led rules-based world order that since 1945 has been shaping global politics. Algeria, Argentina, Egypt, Indonesia, Nigeria, Saudi Arabia, Turkey, United Arab Emirates, just to name a few, perceive such order as biased, sometimes hypocrite, and often imbued with double standards; its rules seem formally valid for all but a few selected Western countries. These emerging economies are queuing to join what appears to be the vanguard of the Global Rest, the BRICS (Brazil, Russia, India, China, and South Africa), the G7’s real global alter ego.

No doubt that Russia has been effectively isolated from the Global West; no doubt either that the transatlantic partnership has been strongly reinforced. However, there are also discomforting indications that the Global West appears more and more isolated from the Global Rest. Prevailing against autocracies requires winning hearts and minds globally, as much as among Western constituencies.

The well-deserved condemnation and punishment of Russia notwithstanding, the conflict could have been better used by the EU as a unique chance to give content to its widely claimed strategic autonomy, particularly by pushing harder for negotiated solutions while maintaining the support to Ukraine.

The EU has instead opted for being the US’ junior partner, and a Polish-Baltic traction institution. It is dismaying that even the recently exited UK seems having a greater political influence in Brussels than before.

A quite successful re-strengthening of the transatlantic relationship has been accomplished. It is a crucial outcome considered the uncertain times ahead.

Maybe it could have been achieved better.

If the price that Europe, especially, has paid was worth will become clearer only in the coming years.

L'articolo The war in Ukraine and the Transatlantic Partnership proviene da InsideOver.

There is an old Irish joke about someone who asks for directions, and is told: I would not start from here. Advising the EU on economic strategy feels very much the same: they committed so many unforced errors, like fiscal austerity, that I really would not want to start from here. But I must. 

Before we start, we have to be clear of the limits of our endeavour. We can no longer turn the EU, with the euro area at its heart, into the world’s leading economy. This was a reasonable ambition in the early phase of monetary union. I recall a private conversation with Tommaso Padoa-Schioppa, the late Italian finance minister, around that time. He was an economist by training, previously a member of the European Central Bank’s executive board, yet he described the euro not in economic terms but as a geopolitical tool. He saw it as an instrument to challenge the US dollar, and with it US economic supremacy. 

A sovereign debt crisis, a pandemic, a war and the return of high inflation have since intruded. The serial shocks of the last ten years left Europe’s economy exposed and weak. Italy has had almost no productivity growth since 2000. Others, even Germany, are now experiencing the same. Europe missed the digital revolution, the basis of modern-era wealth creation. And committed serial policy errors.

Those of us who fought for the idea of geopolitical euro have lost the debate. We have lowered our ambitions. But even in this situation, the world of second-best options is not to be scoffed at. I would prioritise three: improve the macroeconomic policy regime; complete the capital markets union; and invest into the digital transformation. I mean, really invest. 

Improving the macroeconomic regime is a big deal. The current system has created structural north-south imbalances that will be hard to correct. I see no chance that this can happen without a fiscal union. Defence procurement would be an ideal area where the EU could benefit from economies of scale through centralisation. Green investments and energy policy should also be run from the centre, difficult though this may appear politically. It would be massively more efficient. The small fiscal union would acquire tax raising and debt issuing powers. The ECB should be allowed to buy eurobonds issued by the fiscal union, at the expense of bonds issued by member states. I would also amend the treaties to allow for more policy co-ordination between the ECB and a future European finance minister. Fiscal-monetary co-ordination constitutes an essential prerequisite for a successful macroeconomic policy during time of crisis. This is something we can learn from the US. We don’t have to give up on central bank independence either.

My second priority is the capital markets union. It has been on the EU’s to-do-list forever, but it has not got anywhere because the EU always thinks it has something more important to do. Especially in combination with a small fiscal union, a capital markets union could be game changer for corporate finance and investment. Without it, our venture capital industries will never compete with their American counterparts. Nor will our bond markets. The euro will remain a distant second global currency. A monetary union, a fiscal union and a capital markets union belong together. Such a  project would also encompass the completion of the banking union. What we have now is a banking union in name only. The big banks are supervised by the ECB, but the EU lacks an efficient bank resolution regime and has no common deposit insurance. Banking today is more national than it was in 1999 when the euro was created.

And finally, if I had to prioritise one spending category, it would be digital modernisation. It is not the lack of hardware like optical fibre networks that is the main problem in Europe, but the lack of digital sophistication. Digitalisation is not about computers, it is about how we interact with the world. Europe’s business models are stuck in the analogue age. In Germany, industrial companies still interact with each other and their clients through trade fares, a distinctly 20th century structure. They sell through wholesalers and retailers, rather than online. They do not create communities of clients and potential clients. Modern era digitalisation is about interacting networks. 

My expectation is that the EU will do none of these things. The EU missed the moment to choose a first-best strategy in the early 2000s, when it focused all its policy efforts on structural reforms. It missed it in second decade of sovereign debt crisis firefighting. The last three years were dominated by the pandemic and the war. The EU lives in the here and now, always distracted by the latest fads. 

What the EU is doing now in response to the US Inflation reduction act is to protect existing industries; return to the stability pact with only some minor modifications; and reduce its global ambition to that of the world’s regulator. But how can you regulate digital industries if you don’t have any skin in the game? 

The rest is economic policy virtue signalling. The Green deal? Or the €300bn Juncker investment programme in 2014? Most of it has been hot air. I admit the recovery fund was made up of real money, but it was a one-off scheme. It will help Italy a little, but at €310bn over five to seven years the total programme is too small to make a lasting impact on economy the size of the euro area. I doubt it will have a big impact on Italian productivity growth either. The EU has patchwork programmes, but we lack a comprehensive strategy. Yet, we Europeans are surrounded by countries whose leaders think strategically.

The bitter irony of the situation is that at one point it really becomes rational to say: I would not start from here. Then, we will be talking about third-best options.

L'articolo Europe at a crossroad: the main challenges after one year of war in Ukraine proviene da InsideOver.

It has been said, repeatedly, that Italy represents ‘a laboratory’ which has the ability to produce new political forms in an astonishing way. Aside of the infamous workshop of the twenty-year fascist period, it should be noted that from Tangentopoli, to the imaginary digital party of the Movimento Cinque Stelle, from Berlusconi’s trajectory to Giorgia Meloni’s ‘techno-sovreignism’, over the last decades the Italian political system has produced formulas anticipating some of the major global trends.

For some years now, however, one exception has found our country strangely lagging behind: while green parties are experiencing a phase of electoral growth throughout Europe positioning themselves at the centre of institutional plots, in Italy there is a noticeable absence of a large-scale structured ecological movement. There are a variety of underlying causes to the phenomenon, however one effect is clear: the debate regarding the energy transition and climate risks is not always approached carefully – with the attention that the actuality requires when attempting to think about structured political affairs.

By dismissing ecology as a matter of custom, a utopian movement or a second-rate phenomenon to be ironised about, we risk losing sight of the very profound debate that articulates the climate transition in conjunction with economic policies and the explosion of geopolitical rivalries in this new phase of globalisation: the Inflation Reduction Act (IRA) promoted by the Biden administration in the summer of 2022 and the 14th Five-Year Plan delineated by Xi Jinping in October 2021 are just two pillars of this founding process. Both teach us that, ultimately, one of the defining elements in the 2020s is not so much that ecology reconfigures the political space, but that all the elements in the political space are politically structured by ecology.

The war in Ukraine is a very concrete example providing a clear view of this shift. Putin’s war is provoking an earthquake in the planet’s ongoing geopolitical reconfiguration. To understand the transformations it is producing in Italy and Europe, it is worth starting not only from an energetic  point of view, but also from an interpretation which is fundamentally ecological.

The concept of “war ecology” was developed by the brilliant French philosopher Pierre Charbonnier in the pages of the Le Grand Continent a few weeks after the invasion of Ukraine, and was then the subject of a scholarly publication (War Ecology: A New Paradigm). His reasoning can be summarised as follows: “On the one hand, political ecology is redefined by geopolitics to the extent that the shift towards sustainability be based on the need to fight a strategic rival — in this case Russia, an aggressive petro-state” ; geopolitics is reciprocally influenced by the climate imperative, which is reshaping the landscape of assets and obstacles in the transition.”

This viewpoint has an infrastructural dimension and has triggered important effects, defining the Commission’s and European states’ reaction to the war in Ukraine. As of 24 February 2022, fossil energy – causing more than two-thirds of global greenhouse gas emissions according to the International Energy Agency’s estimates – is at the heart of Putin’s war. In 2021, Russia supplied 40 per cent of Europe’s total natural gas imports. Today, the urgency to make the Union independent of Russian hydrocarbon imports is linked both to the desire to weaken Moscow’s war capacity and to the need to accelerate the fight against climate change in order to support the Paris Agreement’s goal.

Several indicators allow us to grasp the transformations taking place: firstly, the Member States’ massive support to protect consumers from rising energy prices is the most visible sign of state intervention in the energy sector, which is set to continue and produce a change in market logic. In total, European countries have spent over 700 billion Euros since autumn 2021.

Then, there is the diversification of supply sources: although Europeans are continuing to import Russian hydrocarbons, including LNG, these now account for only 8% of total natural gas imports: of the four pipelines connecting the continent to Russia, two have been shutdown (Nord Stream 1 and Yamal), one has seen its flow increase (Turksteam) and yet another one, crossing through Ukraine, continues to transport gas, but in a much smaller quantities. With the Chinese economy being crippled by the zero Covid policy, the  decline was offset by LNG and gas imports from Norway. Bilateral agreements – in the case of Italy, which is very active in this field, with Angola, Congo, Egypt and Algeria – are expected to offset Russian imports in the coming years.

Thirdly, the reduction of energy consumption has become a geopolitical factor: the 27 have agreed on a 15% reduction of gas demand between August 2022 and March 2023 and a 10% reduction of gross electricity consumption – the data available already shows a significant consumption reduction in Germany, France and the Netherlands, which however is based on individual responsibility and sobriety. As Commission Vice-President Frans Timmermans explained “Putin has already lost the ecology war”.

With the energy crisis, the rapid development of renewable energy has become synonymous with supply security for European leaders: Germany aims for 100 per cent renewables in its energy mix by 2035 (80 per cent by 2030). The Commission has suggested to increase the target of 40% renewables by 2030 to 45% and the energy efficiency target from 9% to 13%. In all this we can see how the grammar of war ecology also acts on a symbolic level, providing a new narrative framework for political action. A few weeks after the invasion, a campaign by the European Greens expressed, with a détournement of war propaganda aesthetics, the necessary acts of sobriety in support of the war efforts: “Isolate Putin. Insulate homes”, said a poster with the colours of the Ukrainian flag in the background.

The war in Ukraine has in this sense continued the process of consolidating the role of the Green Deal – which aims to achieve carbon neutrality by 2050 and a 55 per cent reduction in greenhouse gas emissions by 2023 – by helping to give it a status as a European policy configuration. As the PNRR – which already called for Member States to spend at least 37% on measures to combat climate change – had already shown, it is not just a policy, but a dynamic framework for most fundamental and long-term policy actions.

Is the war ecology the key to a new realism?

L'articolo Europe in the era of “War Ecology” proviene da InsideOver.