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1. The EU in the South Caucasus: Navigating a geopolitical labyrinth in turmoil

Author:
Bob Deen and Wouter Zweers
Publication Date:
03-2023
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
The tectonic plates of geopolitics are shifting in such a profound way that has not been seen since the end of the Cold War. The Russian invasion of Ukraine on 24 February 2022 has not only increased tensions between the world’s major powers, but also severely impacted the regions in which they traditionally strive to project their power. This applies especially to areas in the wider Eurasian region that the Russian Federation unjustifiably considers as part of its sphere of influence, such as the South Caucasus. Russia’s failure to achieve a quick and decisive victory in its full-scale invasion of Ukraine has not only forced the Kremlin to limit its objectives on the battlefield, at least for the time being, to Ukraine’s east. It has also reduced the credibility of the Russian military that much of its power projection has depended upon – and has reduced its attractiveness as a security partner for countries that have traditionally regarded Russia as such. Russia has had to withdraw some of its troops and military equipment from the South Caucasus, its leadership is preoccupied with Ukraine, and it has not lived up to its security commitments to Armenia. This has contributed to a geopolitical vacuum and uncertainty in the South Caucasus that other actors are eager to exploit.
Topic:
Foreign Policy, European Union, and Geopolitics
Political Geography:
Europe and South Caucasus

2. Walking the tightrope towards the EU: Moldova’s vulnerabilities amid war in Ukraine

Author:
Bob Deen and Wouter Zweers
Publication Date:
09-2022
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
When the Council of the European Union decided on 23 June 2022 to grant Moldova the status of EU candidate country, it boosted the morale of a beleaguered government in Chișinău trying to circumnavigate a daunting series of crises. Since Maia Sandu ousted Socialist President Igor Dodon in the presidential election in 2020 and her reform-oriented Party of Action and Solidarity (PAS) obtained a parliamentary majority in 2021, Moldova has barely had a chance to catch its breath. In the year that followed, the country experienced an energy crisis that almost deprived it of gas in the winter of 2021-2022, a budding economic crisis with rampant inflation, and a security and refugee crisis as a result of Russia’s war against Ukraine. The war in its immediate neighbourhood, with Russian troops advancing in the spring along Ukraine’s southern coast to barely over 100 kilometres of Moldova’s borders, has further complicated the already difficult geopolitical balancing act of successive Moldovan governments. It has also aggravated existing security risks. For years, Moldova has balanced its aspirations to join the EU with its constitutional neutrality and its many dependencies on the Russian Federation. While President Putin was quick to congratulate Maia Sandu on her election and has so far refrained from open hostility towards her government, there are still many vulnerabilities that Moscow already leverages and could further exploit if it chose to destabilise Moldova. Not only is Moldova’s economy highly fragile and dependent on Russian energy, there are also political forces and regions that see their interests threatened by the reforms of the PAS government in Chișinău – and over which Moscow has different degrees of influence. Two of such regions are the separatist region of Transnistria in the east and the autonomous region of Gagauzia in the south of the country. A better understanding of these key vulnerabilities could help the EU and the Netherlands to assist Moldova in reducing them and to increase the stability and resilience of the EU’s newest candidate country. The central question of this research report therefore is to what extent Russia’s influence over Moldovan domestic politics as well as the regions of Transnistria and Gagauzia poses risks to the internal and external stability of Moldova.
Topic:
Security, European Union, Geopolitics, Political stability, and Russia-Ukraine War
Political Geography:
Europe, Eurasia, Ukraine, and Moldova

3. Navigating an uncertain future: An exploration of China’s influence on the Netherlands’ future maritime logistics hub function

Author:
Frans-Paul van der Putten and Xiaoxue Martin
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
The maritime logistics hub function is of strategic importance to the Netherlands as a trading country. The Netherlands positions itself as the ‘Gateway to Europe’ thanks to its advanced logistics network and plays an important role in the global economy. This position nevertheless faces an uncertain future: there is no guarantee that the Netherlands will remain a leader in the years ahead. Geopolitics, and particularly the influence of China, will have a major impact on the Dutch maritime logistics hub function. On behalf of the Ministry of Infrastructure and Water Management and the Ministry of Foreign Affairs, this report examines China’s influence on the Netherlands’ maritime logistics hub function. The main question posed in the study is: How is China’s influence on the central position of the Netherlands’ maritime logistics hub function likely to evolve in the decades ahead and what possible actions could the Dutch government take in response to it? The purpose of this study is to assess scenarios as a basis for possible actions by the Dutch government and the Dutch maritime logistics sector, particularly with regard to the Netherlands’ central position and strategic autonomy as a maritime logistics hub.
Topic:
Foreign Policy, Geopolitics, Maritime, and Logistics
Political Geography:
China, Europe, Asia, and Netherlands

4. The geopolitics of digital financial technologies: A chance for Europe?

Author:
Brigitte Dekker, Arief Hühn, Pim Korsten, and Maaike Okano-Heijmans
Publication Date:
01-2022
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Geopolitical tensions are permeating the digital domain. During the 1990s, the emergence of the internet still involved optimism and high hopes for digital technology as a force for openness, connectedness and freedom for all. Yet contrary to these promises, a trend of centralization, is prevalent in the digital economy. This trend of centralization, with the subsequent problems of gatekeeping, ecosystem lock-in, disproportional rent-seeking and monopolists that set market rules, is now also evident in the financial industry. Whereas smaller financial technology (fintech) companies, including many European firms, revolutionized the financial sector in the 2000s – disrupting traditional banks and their vested interests – we now witness a concentration of power and data in this sector, either in incumbent firms or within Big Tech companies. In response, governments in China, the European Union (EU) and the United States (US) are devising regulations, while at the same time technology innovators are building a radically new infrastructure to underpin our financial sector: Decentralized Finance (DeFi). The geopolitical implications of this disruptive transformation of the financial sector – through both fintech and DeFi – require forward-looking government responses that protect and promote European interests in the long term. This Clingendael Report first reflects on these trends of centralization in digital finance and decentralization in ‘traditional finance’. The paper examines the relationship between geopolitics and finance and looks at the position of the EU and its member states. The analysis considers the medium to longer-term implications in the following three domains: economic competitiveness and innovation; financial–economic and social stability; and inclusivity and equality. Data governance, data protection and data portability between financial services are key concepts in each of these areas. Building on these insights, the report argues for a push towards greater awareness among European policymakers on the potentials of DeFi to counter Big Tech’s rising influence in the European financial system with a decentralized, human-centred and value-based system. At the same time, the regulatory and security risks of DeFi – and the trend of decentralization in general – must be addressed. The report also highlights the need to help people to develop digital skills and become responsible and resilient digital citizens, and calls for enhanced dialogues with officials and technology company executives in like-minded countries on current developments. New approaches, such as multi-stakeholder consultations and increased rapprochement with the open-source and crypto-communities, are needed to facilitate knowledge exchange and best practices that will improve (regulatory) responses.
Topic:
Science and Technology, European Union, Geopolitics, Internet, and Digital Finance
Political Geography:
China, Europe, and United States of America

5. Investors beware: Europe’s top firms are highly exposed to China

Author:
Ties Dams and Xiaoxue Martin
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Europe’s top firms are highly exposed to China, and therefore to China-related geopolitical risk. This risk is only set to increase in the coming years, as geopolitical tensions between China, the US and the EU are not expected to decrease. Moreover, case studies of LVMH, HSBC, ASML and BMW show that some of Europe’s biggest listed firms could and should offer investors more transparency on their risk-management strategies. Intelligence on China and geopolitical risk exposure is key for investors, and investors that get ahead of the curve may have the edge in the long term. This report is aimed at investors in Europe’s biggest listed firms. It argues that investors have a growing need for transparency amongst European biggest companies with regard to their strategies in dealing with China-related geopolitical risk. Even investors without direct interests in China are or will be affected by China-related geopolitical risk due to the various forms of exposure of companies in the European home market. This means that investors may be increasingly exposed to the risks linked to great power competition, without having the knowledge necessary to anticipate geopolitical changes. As geopolitical tensions between China, the US and the EU are not expected to decrease, investors would be wise to seek greater transparency about European companies’ exposure to the Chinese market – and indeed get ahead of the curve and gain a competitive advantage by investing in those firms that have forward-looking geopolitical strategies in place. This report aims to put this point on investors’ strategic agenda by making the following three points: Europe’s top firms are highly exposed to China. China-related geopolitical risk is spreading. Case studies suggest that Europe’s top firms may not be sufficiently transparent about geopolitical risk management.
Topic:
Geopolitics, Business, Investment, and Risk
Political Geography:
China and Europe

6. In search of a European Russia strategy

Author:
Tony van der Togt
Publication Date:
03-2020
Content Type:
Commentary and Analysis
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
A global multilateral rules-based order, supported by a pro-active and interventionist United States, is gradually being replaced by a more fragmented world, in which geopolitics and geo-economics are becoming the dominant factors and universal rules, norms, and values are increasingly questioned. For the EU such developments are particularly challenging, as it has long perceived itself as a post-Westphalian soft power, mainly projecting its norms and values in its relations with both its direct neighbors and the world at large. A more isolationist US, a more assertive Russia, and the growing global influence of China have raised questions about the EU’s place and role in the world, which become even more pertinent after Brexit. Therefore, Commission President Von der Leyen intends to lead a “geopolitical Commission” and we are hearing calls for European strategic autonomy or even strategic sovereignty.
Topic:
International Relations, European Union, Geopolitics, and Multilateralism
Political Geography:
Russia and Europe

7. Navigating the Regional Chessboard: Europe’s Options to Address Conflicts in the Mena Region

Author:
Erwin van Veen
Publication Date:
12-2020
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
As 2020 draws to a close, the conflicts in Syria, Libya and Yemen have been ongoing for nearly a decade. Conflict and political crisis in Iraq have alternated non-stop since 2003. The Middle East also witnesses growing tensions between the Gulf States, Iran and the US, as well as more engagement of Turkish and Russian forces. In contrast, the European Union has often been passive and divided. This has resulted in missed windows of opportunity for conflict prevention, a loss of credibility and growing externalities that reach Europe unfiltered. This wide-ranging volume by the Friedrich Ebert Stiftung offers detailed analysis of conflicts in Yemen, Syria, Iraq and Libya in search of options for Europe to help bring them to a close. Powerfully, it brings a rich set of regional, and some international, perspectives together to contribute to smart thinking on what Europe can do. What is in Yemen for Iran: Research associate Maysam Behravesh gives a realistic assessment of Tehran's strategic calculus in the Arabian peninsula. A time for principled pragmatism: In the volume’s analysis of the Syrian conflict, Clingendael’s senior research fellow Erwin van Veen explores possibilities for EU-Russian collaboration, together with Alexey Khlebnikov, on humanitarian aid diplomacy and fighting extremism. Although the EU and Russia are mostly at loggerheads in Syria, the authors seek to deconstruct the current political stalemate in a bid to identify the least controversial issues on which joint initiatives might be possible. In turn, this might lay a foundation for further dialogue. The alternative is ongoing confrontation.
Topic:
Foreign Policy, Geopolitics, and Conflict
Political Geography:
Europe, Iran, Middle East, Yemen, North Africa, and Syria

8. Dealing with China on high-tech issues Views from the US, EU and like-minded countries in a changing geopolitical landscape

Author:
Brigitte Dekker and Maaike Okano-Heijmans
Publication Date:
12-2020
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
As President-Elect Joe Biden enters the White House, what are the opportunities for EU–US cooperation in the trade, high-tech and digital domains? Together with like-minded partners, the transatlantic partners aim for deepened and renewed engagement in the bilateral and multilateral context. They need to deliver on broadening multilateralism to new areas and, in certain cases, new approaches. This Clingendael Report aims to contribute to a reorientation of the EU in the broad field of economic security, in the transatlantic context and with Japan, India and Australia. The policies of European governments and businesses in the trade, high-tech and digital domains are undergoing profound change. Stakeholders are starting to act on the awareness that some geopolitical challenges, in particular concerning China, cannot be solved within the liberal–democratic mindset alone. Still, however, they do want to uphold – and update – the basic principles of the rules-based system. This report adopts an ‘outside-in approach’ to discuss the many economic security challenges. It presents views and forward-looking suggestions by key experts from six countries: the United States, Germany, France, Japan, India and Australia.
Topic:
European Union, Geopolitics, Multilateralism, and Economic Security
Political Geography:
Europe, North America, and United States of America

9. Energy as a tool of foreign policy of authoritarian states, in particular Russia

Author:
Rem Korteweg
Publication Date:
04-2018
Content Type:
Case Study
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
This study is originally published by the Directorate General for External Policies of the Union of the Policy Department for External Relations of the European Parliament and was requested by the European Parliament's Committee on Foreign Affairs (AFET committee). Russia and other energy-rich authoritarian states use their energy exports for economic gains but also as a tool of foreign policy leverage. This study by Rem Korteweg looks at the ways and methods these states have used to exert political pressure through their energy supplies, and what it means for the European Union. Most energy-rich authoritarian states use their energy wealth to ensure regime survival. But, more than others, Russia uses its energy wealth as well to protect and promote its interests in its ‘near abroad’ and to make its geopolitical influence felt further afield, including in Europe. It uses gas supplies to punish and to reward, affecting both transit states and end-consumers. This publication explores how supply disruptions, price discounts or hikes, and alternative transit routes such as Nord Stream 2 and Turkish Stream, are used by Russia to further its foreign policy ambitions, feeding suspicions about its geopolitical motives. The lack of transparency about Russia’s energy policy decisions contributes to this. In response, the EU is building an Energy Union based around the Third Energy Package, a more integrated European market and diversified supplies. By investing in new supplies, such as LNG, and completing a liberalised energy market, the EU will be better able to withstand such energy coercion and develop a more effective EU foreign policy.
Topic:
Foreign Policy, Energy Policy, Authoritarianism, European Union, and Geopolitics
Political Geography:
Russia, Europe, and Eurasia

10. Rising Tensions Between Policy Brief the West and Russia: What Role For Arms Control?

Author:
Peter van Ham
Publication Date:
12-2018
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Today, political relations between the West and Russia have entered a new mini-Ice Age, existing arms control arrangements are either dysfunctional or simply not used, and both sides are improving their military readiness. The obvious question that needs to be raised is whether, and if so how, these escalating tensions can be contained, or even reduced? This Policy Brief offers insight into the most pressing concerns, focusing on areas and issues where matters could escalate fastest. It asks what role can still be foreseen for arms control and concludes with a call for transatlantic unity and a stronger role for NATO to counter Russia’s military and geopolitical gambit. It suggests that the classic two-pronged “Harmel approach” (based on deterrence and détente) should be restored. This includes a mix of US-Russian high summitry and the revitalisation of the NATO-Russia Council as part of a broad and far-reaching (military) risk reduction process.
Topic:
Arms Control and Proliferation, European Union, and Geopolitics
Political Geography:
Russia, Europe, and Eurasia