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2. Toughening Financial Sanctions on Russia: Enforcing Energy Sanctions and Reducing Shadow Reserves Effectively
- Author:
- Guntram Wolff, Benjamin Hilgenstock, and Elina Ribakova
- Publication Date:
- 05-2023
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Financial sanctions are key in enforcing restrictions on Russian energy exports – in particular the G7/EU oil price cap regime –, due to financial institutions’ critical role in cross-border transactions. While the energy sanctions regime is having an impact on export earnings and budget revenues, evidence for potentially widespread violations is also emerging. Moreover, favorable external dynamics have allowed Russia to accumulate substantial assets abroad – “shadow reserves” –, which need to be kept out of reach of the regime.
- Topic:
- Governance, Sanctions, European Union, International Order, Energy, Geoeconomics, and Russia-Ukraine War
- Political Geography:
- Russia and Eurasia
3. Coping with Technology Sanctions in the Russian Financial Sector
- Author:
- Alexandra Prokopenko
- Publication Date:
- 05-2023
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- The Russian financial sector has taken a double hit from sanctions – both in infrastructure (affecting financial transactions) and in technology (affecting the hardware and software). Infrastructural sanctions imposed by Western countries in reponse to the war on Ukraine (de-SWIFTing, overcompliance, and breaking of correspondent relationships) affected their operational activity. Moreover, the Russian government banned the use of foreign software and equipment imports, which has been a drag on business development. The financial sector was able to withstand the first shock. However, the most recent restrictions on access to advanced technologies, especially from the US and the EU, will lead to import substitution based on technologies of yesterday.
- Topic:
- Science and Technology, Governance, Sanctions, European Union, International Order, and Russia-Ukraine War
- Political Geography:
- Russia and Eurasia
4. Tech Sanctions Against Russia: Turning the West’s Assumptions Into Lessons
- Author:
- Alena Epifanova
- Publication Date:
- 06-2023
- Content Type:
- Commentary and Analysis
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- The West assumed that its unprecedented tech sanctions would be the response to Russia’s full-scale invasion of Ukraine that would hurt the country most. While their impact took different routes than expected, Russia has been forced to scale back its goals for technological advancement and become more dependent on third countries than ever. As Russia is preparing to wage a protracted war, the EU must make unity and coordination on tech among its member states and partners its ongoing priority. Implementing the restrictive measures and closing loopholes is essential.
- Topic:
- Science and Technology, Sanctions, European Union, and Russia-Ukraine War
- Political Geography:
- Russia
5. China “De-risking”: A Long Way from Political Statements to Corporate Action
- Author:
- Ole Spillner and Guntram Wolff
- Publication Date:
- 06-2023
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Major Western leaders have been calling for “de-risking” from China, rather than “decoupling.” But what exactly de-risking means and how it differs from decoupling, remains unclear. It is ultimately firms, not governments, driving trade and investment relations. But firms cannot account for unidentified risks by themselves. National security risks are for governments to define. Complex supply chain externalities might entail risks to production that are also difficult for firms to account for. Furthermore, firms may bet that governments will rescue them if a worst-case scenario happens, effectively socializing risks. In the EU, Germany is particularly exposed to China risk in terms of security, macroeconomic, and political exposure.
- Topic:
- Security, European Union, Macroeconomics, Supply Chains, and Geoeconomics
- Political Geography:
- China, Europe, and Asia
6. Conditionality in Migration Cooperation: Five Ideas for Future Use Beyond Carrots, Sticks, and Delusions
- Author:
- Victoria Rietig and Marie Walter-Franke
- Publication Date:
- 07-2023
- Content Type:
- Special Report
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Effective migration partnerships with third countries are a declared goal of the European Union. But views diverge on what good migration cooperation looks like. Using carrots and sticks, also known as conditionality, is a controversial strategy to reach the EU’s migration goals. Politicians and experts either frame it as necessary and legitimate, or as post-colonial and counterproductive. Whether one supports conditionality or not, positive and negative incentives have shaped the different types of migration agreements the EU and its Member States have struck in the last decade. Some are formal agreements binding under international law, but most are soft law or handshake deals. They may cover just one specific issue within migration policy, or tie migration to other policy areas. Some are public, others confidential. All these agreements reflect the interests and the leverage which the EU, Member States, and partner countries bring to the table. The three most discussed levers the EU uses to nudge partner countries toward joint migration management are visas, development aid, and trade – the holy trinity of migration conditionality. But the exclusive focus on these three levers is artificial. Europe also uses other levers, such as police or military cooperation and training, diplomatic attention and high level visits, legal migration opportunities, and others. When these levers are used, they generate three kinds of effects: the conclusion of an agreement, common document, or statement (paper), procedural or technical changes (process), and migratory movements (people). But they also bring unintended side effects, such as backlash from the citizens of third countries, or the phenomenon of reverse conditionality, when a third country reacts to threats by reducing border patrols or by supporting irregular onward migration. Lever use of one EU country can also worsen the migration relationship of its EU neighbors with that third country. Despite these high stakes, Europe uses conditionality remarkably inconsistently. Its strategy to create coordination mechanisms to make Member States’ approaches more coherent is hobbled by entrenched realities: The cost of coordination is often disproportionate to its benefits, and turf demarcation hinders cooperation. Thus, the chase for coherent conditionality usage in the EU is at best an uphill battle and at worst a delusion. This report puts forward five recommendations to improve Europe’s migration conditionality use and debate in the future. It draws on case studies that trace the EU’s use of incentives and threats toward Bangladesh, The Gambia, Afghanistan, Iraq, and Nigeria, and distills lessons from them.
- Topic:
- Migration, European Union, Cooperation, and Conditionality
- Political Geography:
- Europe
7. Protecting the EU’s Submarine Cable Infrastructure: Germany’s Opportunity to Transform Vulnerability into Mutual Resilience
- Author:
- Jannik Hartmann
- Publication Date:
- 07-2023
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Submarine cables handle over 95 percent of the world’s internet traffic, making them essential for everything from finance to foreign affairs. The September 2022 attack on the Nord Stream pipelines and increased Russian naval activity brought greater awareness of how European – and German – interconnectedness also brings vulnerability. The urgency of tackling this threat offers Germany an opportunity to take a structural and joined-up approach that shows it can act as a “team power.”
- Topic:
- Security, Infrastructure, European Union, and Resilience
- Political Geography:
- Europe and Germany
8. Evaluating Public Support for Chinese Vendors in Europe’s 5G Infrastructure
- Author:
- Tim Rühlig and Richard Q. Turcsányi
- Publication Date:
- 08-2023
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Germany is considering banning equipment made by Chinese companies like tech giant Huawei – in its 5G mobile infrastructure. A revised 2021 IT Security Act failed to reduce China’s 59 percent market share. A representative opinion poll, shows only 30.8 percent of Germans want 5G cooperation with China. Across 11 European countries, skepticism is equal, with only 31.8 percent approval – though this varies greatly from country to country.
- Topic:
- Science and Technology, Infrastructure, European Union, and 5G
- Political Geography:
- Europe and Asia
9. Russia’s War in Ukraine: Rethinking the EU’s Eastern Enlargement and Neighborhood Policy
- Author:
- Guntram Wolff, Alexandra Gritz, Stefan Meister, and Milan Nič
- Publication Date:
- 01-2023
- Content Type:
- Special Report
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- The stagnating EU accession process needs political will and procedural changes allowing eastern candidates to advance. In the meantime, they should be more supported to use the full potential of existing opportunities for gradual economic and sectoral integration with the EU. An upgraded Eastern Partnership needs a comprehensive security dimension linking resilience, connectivity, and defense policy, as well as cooperation in the area of the Common Security and Defence Policy. The protracted regional conflicts (in Moldova and the South Caucasus) require a more active EU engagement as existing OSCE formats continue to be blocked, and Russia’s role and military presence weaken. New openings for conflict resolution mean higher demand for the EU’s diplomatic, monitoring, and peacekeeping capacities. A new eastern Neighborhood Policy should be designed for the wider region, connecting the Black Sea and the South Caucasus with Central Asia and thus creating viable alternatives to the competing geoeconomic and governance “offers” of China, Russia, and Turkey.
- Topic:
- Foreign Policy, Governance, European Union, International Order, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, Central Asia, Ukraine, and Eastern Europe
10. Strict and Uniform: Improving EU Sanctions Enforcement
- Author:
- Kim B. Olsen and Simon Fasterkjær Kjeldsen
- Publication Date:
- 09-2022
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- For as long as the EU has been using sanctions as a foreign policy instrument, countering violations has been a challenge. With the EU rapidly expanding the breadth and depth of its sanctions, its institutions and member states must find ways to ensure stricter and more uniform enforcement to deter violations, enhance efficiency, and ensure a more level playing field for economic actors. The stakes are high: the success of the EU’s response to Russia’s military aggression hinges largely on effective sanctions, and the long-term legitimacy of the tool itself depends on its enforcement.
- Topic:
- Foreign Policy, Governance, Sanctions, European Union, International Order, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, and Eastern Europe
11. Managing Risks in the EU-China Economic Relationship
- Author:
- Claudia Schmucker and Guntram Wolff
- Publication Date:
- 11-2022
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- As the German Chancellor heads to Beijing – the first visit by a G7 leader since the pandemic began, Germany and the EU must reevaluate their approach to China, especially after the recent Communist Party Congress further cemented a system of uncontested authoritarian power. European unity is critical in dealing with China. Russia’s war in Ukraine has exposed Germany’s energy dependency and many Western companies have had to leave Russia. To be prepared for a possible escalation of geopolitical tensions with China, Germany needs to draw lessons and review critical dependencies and corporate risks. Better corporate risk management, a diversified trade policy, and a targeted industrial policy are necessary to manage economic risks.
- Topic:
- Bilateral Relations, European Union, Trade, and Geoeconomics
- Political Geography:
- China, Europe, and Asia
12. Germany’s Role in Europe’s Digital Regulatory Power: Shaping the Global Technology Rule Book in the Service of Europe
- Author:
- David Hagebölling and Tyson Barker
- Publication Date:
- 11-2022
- Content Type:
- Special Report
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Four elements help to map the strengths and, at times, the limits of German power in digital rule-making. First, Germany anticipates EU digital regulation and attempts to establish facts on the ground. Second, Germany has outsized influence in the formal stages of EU digital regulatory policymaking. Third, the EU, in turn, provides Germany with a launch pad for influencing worldwide regulatory norms. Fourth, a belated reawakening of the capacity of the German private sector and affiliated technical standard bodies to influence global technical standards is occurring. Germany, as an EU member state, is engaging in three significant areas of data governance and cybersecurity: digital identities and open data, lawful access to electronic messaging systems, and rules for sovereign cloud usage. Germany’s largely successful role as a key incubator for the EU’s regulatory approach to digital technology and, therefore, as a proponent of the “Brussels Effect” of influencing global markets is not widely appreciated or understood at home. The lag among regulations, tech-nology, and international context is evident in areas such as data protection, content moderation, and market power of online platforms. Even meaningful regulatory debates on quantum, the metaverse (AR/VR), and 6G have yet to arise in Germany. Germany must change its approach to digital regulation to more accurately reflect the dynamic, general-purpose nature of emerging digital technologies against an increasingly fraught international landscape in which technological rules are a dimension of geopolitical power. This includes more fully addressing political trade-offs associated with digital regulation choices, expanding reviews and sunset clauses in digi-tal regulation to encourage flexibility, and making greater use of multi-stakeholder regulatory approaches that incorporate civil society, companies, and other non-state actors. Germany must also increase the engagement of its foreign policy and national security communi-ties in EU technology diplomacy and in global regulation enforcement.
- Topic:
- Science and Technology, European Union, Regulation, and Digital Policy
- Political Geography:
- Europe and Germany
13. The Geopolitics of Digital Technology Innovation: Assessing Strengths and Challenges of Germany’s Innovation Ecosystem
- Author:
- Tyson Barker and David Hagebölling
- Publication Date:
- 11-2022
- Content Type:
- Special Report
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- The COVID-era public and private investment influx into Germany’s digital technology R&D is reversing amid inflation, fiscal consolidation, and geopolitical pressures coming from the Zeitenwende. Germany’s future in an EU that is among the top-tier technology powers requires a profound and rapid transition of the country’s R&D strengths into data-intensive, systems-centric areas of IoT and deep technology that are linked to the domestic manufacturing base. New policy approaches in three areas – money, markets, and minds – are needed. New technologies such as robotics, artificial intelligence (AI), advanced material science, biotech, and quantum computing tend to have broad general-purpose applications. But uncoordinated funding vehicles, universities’ civil clauses, and restrictive visa and onboarding guidelines for skilled foreign workers slow innovation in these sectors and hamper German techno-geopolitical competitiveness. In the mid-term, Germany could look at a scheme to bundle the Future Fund together with new institutional investment in a sort of embryonic German Sovereign Wealth Fund, with a proportion of funding specifically geared toward strategically important VC endeavors.
- Topic:
- Science and Technology, European Union, Geopolitics, Innovation, and Digital Policy
- Political Geography:
- Europe and Germany
14. Gas and Energy Security in Germany and Central and Eastern Europe
- Author:
- Guntram Wolff and Alexandra Gritz
- Publication Date:
- 12-2022
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Russia’s weaponization of gas supplies caused a shock to the energy security of Central and Eastern Europe. Countries responded by increasing alternative gas supplies and LNG import capacity. Gas flows shifted from the east-west axis to west-east and north-south axes. In the short term, the usage of coal is rising; in the longer term, renewable and nuclear energy. Mitigating the effects of this shock requires the EU to prioritize policies that foster the integrity and security of its energy market.
- Topic:
- Security, Natural Resources, European Union, Gas, Energy, and Russia-Ukraine War
- Political Geography:
- Europe, Eastern Europe, Germany, and Central Europe
15. What If the EU Did Not Share Data to Protect Its Critical Infrastructure?
- Author:
- Päivi Mattila-Wiro and Isto Mattila
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- This scenario shows what could happen if the EU fails to establish an information exchange environment among its critical infrastructure (CI) entities. In 2030, only a few services related to the EU’s CI remain local and confined to a single domain. Most are heavily interconnected – and thus increasingly subject to hybrid attacks. Because the EU still provides no common guidelines to record and share information about such attacks, CI operators cannot analyze threats, recognize EU-wide patterns, or identify adversaries. Two EU directives from the early 2020s recognized this gap but did not provide the tools to address it.
- Topic:
- Science and Technology, Infrastructure, European Union, and Data
- Political Geography:
- Europe
16. How To Talk About Migration in Africa: Classic Hurdles and Six Recommendations for European Policymakers
- Author:
- Victoria Rietig and Alia Fakhry
- Publication Date:
- 01-2022
- Content Type:
- Special Report
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Europeans are entering a decisive period for their relationship with African countries, on migration and beyond. Efforts to strengthen cooperation abound, but many migration initiatives are plagued by frustrations on both sides. So how to break through this vicious cycle and improve the unhealthy relationship? This paper analyzes trends in African migration policies and puts forward six recommendations for European policymakers and experts about how to prepare for their next encounter with their African counterparts – be it a friendly and informal chat or a negotiation.
- Topic:
- International Relations, Migration, European Union, and Asylum
- Political Geography:
- Africa, Middle East, and North Africa
17. Britain, Germany, and the Rise of Competitive Virtue Signaling
- Author:
- Roderick Parkes
- Publication Date:
- 01-2022
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- In 2016, British and German officials were clear: they wanted quickly to put Brexit behind them and cooperate on big ticket items like the international rule of law. Now, in 2022, the pair in fact seem to be competing more than they cooperate. Germany wants to shine in comparison with Britain, and the UK sees advantages for its own standing if Germany falls short. This “competitive virtue signaling” defines Germany and the UK’s post-Brexit rivalry, and – oddly – might lead to tighter relations.
- Topic:
- European Union, Brexit, Rivalry, Cooperation, and Competition
- Political Geography:
- Britain, Europe, and Germany
18. Promoting the Euro – Countering Secondary Sanctions: Germany Should Push to Complete Monetary Union
- Author:
- Markus Jaeger
- Publication Date:
- 02-2022
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- US-Chinese rivalry will increasingly play out in the geo-economic realm. The use of secondary sanctions – especially secondary dollar sanctions – negatively affects German economic interests. The new German government should therefore intensify efforts to promote the euro as an international currency coequal to the dollar in addition to lending its qualified support to EU anti-coercion policies.
- Topic:
- Economics, Sanctions, European Union, Rivalry, and Geoeconomics
- Political Geography:
- China, Asia, and United States of America
19. If Russia Uses Migration as a Weapon, Europeans Should Respond In Kind
- Author:
- Alia Fakhry, Roderick Parkes, and András Rácz
- Publication Date:
- 03-2022
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Around 442,000 people have so far fled Ukraine – not just to the EU, but also to neighbors like Moldova. This is a humanitarian issue, and should not be conflated with “migrant instrumentalization” (MI), whereby a state pushes people across a border to coerce the EU to change position. Yet Russia is likely to employ MI in this way, especially if it moves deep into Western Ukraine. Drawing on an in-depth study, we show how the EU can meet this specific threat.
- Topic:
- Security, Migration, European Union, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, Central Asia, and Ukraine
20. Risky Thinking: How Scenarios Can Help the EU Bounce Back from Strategic Shock
- Author:
- Roderick Parkes and Mark McQuay
- Publication Date:
- 03-2022
- Content Type:
- Special Report
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- Since coming to power in December, the Scholz government has blundered into a series of foreseeable crises: medical shortages; reliance on Russia for gas; Ukraine’s need for robust support. France’s President Macron anticipated all three crises, giving weight to his calls for Europeans to pursue autonomy and reduce dependence on the outside world. Policy makers are now demanding scenario exercises that illustrate the obvious dangers of interdependency to back up their policy shift.
- Topic:
- European Union, Crisis Management, Risk, and European Commission
- Political Geography:
- Europe
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