The EU clearly does not want to let this crisis go to waste

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French President Emmanuel Macron (Copyright: CC-BY-4.0: © European Union 2022 – Source: EP)

By Swedish MEP Charlie Weimers (SD-ECR) and Swedish MP Martin Kinnunen (SD), a Member of the Swedish Parliament’s Committee on European Union Affairs

The EU is keen not to let this crisis go to waste, as the French EU Presidency is pushing for yet another new EU fund, supposedly amounting to 200 billion euros, financed with jointly issued EU debt, burdening future generations of Europeans. This would represent a  major step towards a fully-fledged EU transfer union and is a breach of the letter and spirit of the treaties.

The Russian invasion of Ukraine is an unnecessary tragedy that will kill and injure untold numbers of valiant and innocent Ukrainians and also, one can add, many conscripted young Russians. The war and sanctions that must necessarily follow such an aggression will cause economic hardship for millions of Europeans inside and outside the countries involved.

Russia’s actions have exposed decades of naïve and irresponsible geopolitical policy choices by the Western European elites. These supposedly elite policy makers, intoxicated by their own virtuousness, have recklessly chosen to cut military spending and instead invest hundreds of billions in supposedly green energy solutions that make the economies of their countries dependent on Russian oil and gas.

The naivete of the anointed ones

The self-declared foreign- and security policy elites of Western Europe have ignored the warnings of the Eastern European nations for years, disdaining those advising caution as paranoid Russophobes. These countries have ignored requests by successive American presidents to spend the NATO minimum of 2 percent of GDP on defense and to stop the North Stream 2 pipeline because it would be a geopolitical disaster.

The Western European foreign policy establishment was so certain of its policy of integrating Russia with Europe via trade and diplomacy that they ignored the many repeated military adventures of Russia after the fall of communism. In Abkhazia from 1991 to 1993. In Transnistria in 1992. In Tajikistan from 1992 to 1997. In Chechnya from 1994 to 1996. In Dagestan in 1999. And, again, in Chechnya from 1999 to 2009. In Georgia in 2008. In Ukraine from 2014 on. In Syria from 2015 on. In the Central African Republic from 2018 on.

These policy elites also ignored the Kremlin’s assassination of the former Russian intelligence official Alexander Litvinenko with the deadly radioactive compound polonium-210 in London in 2006. They ignored the poisoning of the former Russian military officer and double agent for British intelligence Sergei Skripal and his daughter with the nerve agent Novichok in 2018 in Salisbury. They also ignored many other assassinations in countries like Austria, Dubai, Turkey and Ukraine.

These paragons of foreign policy wisdom ignored cyberattacks and online disinformation campaigns directed at Estonia, France, Georgia, Germany, Kyrgyzstan, Poland, South Korea, Ukraine, the United Kingdom, the United States and Venezuela including, but not limited to, presidential elections and referendums.

Because of their monomaniac focus on the unending negotiations by the European Union whereby the harsher forms of Realpolitik can be ruled out, the anointed ones in Berlin, Paris and Brussels rejected realism in international relations outright. They refused to even consider that Russia might seek to create a sphere of influence with military means. War in Europe was unthinkable. By definition. It was a thing of the past. And because a Russian invasion of Ukraine did not fit their weltanschauungen it could not happen. Until it did happen.

Always “more Europe”

EU heads of state and government meeting in Versailles are sweeping up the shattered shards of their failed policy prescripts while piecing together a new vision for the future. Those whose worldview until two weeks ago were impervious to the real-world considerations of power politics will now discuss how EU member states and the EU as a whole can strengthen defence capabilities, reduce energy dependence and promote a more robust economy.

These are laudable objectives, but one cannot help but wonder why the same people that have espoused the liberal hypothesis for years that peace would be attained merely through interconnected economies, trade, diplomacy and international agreements – a policy just disproved by reality – should be entrusted with the responsibility of fashioning the new vision for the future.

Then the EU wouldn’t be the EU if it didn’t try to use the crisis to increase its power. Its answer is – as always – more Europe. The French government, which is currently holding the EU Council presidency and which may be the most realist of all EU member states, is taking a page out of the pandemic book to further their preferred policy of more European integration.

France wants to create a new EU fund, financed by jointly issued EU debt, and spend the cash on grants and loans to EU Member States. This new EU fund which French President Macron is now pushing for, reportedly totaling 200 billion euros, would be used to beef up defence capabilities and reduce energy dependence on Russia. It is a federalist power-grab in the same mold as the so-called “Next Generation EU” fund, which is burdening future generations with new debt amounting to 800 billion euro.

Several overly indebted EU member states are already hoping to finance their defence spending and compensate for rising energy prices by sending the bill to future generations of Europeans. Apart from being morally indefensible, approving yet another debt-financed EU scheme would be a major step towards a fully-fledged EU transfer union and a breach of the letter and spirit of the treaties.

It would establish a practice whereby the EU takes on loans and indebts our children and grandchildren to finance EU member states during times of crisis though a system of de facto redistribution from the frugal to the profligate.

This would create perverse incentives, rewarding dysfunctional economies and punishing countries that have bothered to introduce competitiveness reforms. It would also break the link between taxation and representation and further undermine the bond between the elected representatives and their voters.

The cost of doing business

The German public was always ambivalent to nuclear power. The Fukushima disaster shook the country’s confidence in safe nuclear power and the political fallout triggered the decision to shut down all of its nuclear power plants. Three days after the disaster, the German government announced a phase-out of all nuclear plants by the end of 2022 and three months later the Bundestag confirmed the decision.

Together with the policy to reduce CO2 emissions by phasing out coal by 2038, this made it necessary to increase the dependance on natural gas, since renewables couldn’t be scaled up fast enough. Other European countries took similar decisions.

To a large extent, Germay relies on combined heat and power plants for electricity generation and heating. The country is dependent on natural gas for roughly half of all its residential heating (and cooking) and a non-insignificant part of the electricity generation.

While the Energiewende necessitated the use of natural gas, it did not mean that the dependence on Russian imports was unavoidable. Germany could have imported liquified natural gas (LNG) from other sources even if that would have been more expensive. It may therefore be argued that Germany’s current predicament is a problem of their own making.

German policy makers have caused the current situation, whereby the country does not have sufficient LNG infrastructure to switch to imports via tankers. This is why Germany is opposed to sanctioning Russia by cutting all importation of oil and gas. To rectify the situation in Germany, and the other European countries that have adopted similar policies, will take time and require enormous investments.

For an outsider, it is hard to see why the costs of correcting decades of a naïve and geopolitically negligent energy policy should be externalized to taxpayers of other countries. For a long time, Germany benefitted from relatively cheap natural gas, thereby pursuing its preferred policy of trade and engagement with Russia. Now that this policy choice has come back to haunt Germany, one might say that this is the cost of business with criminals. Except that it isn’t. Though the European common energy market, the German demand for energy is driving up the costs of electricity in neighboring countries (even if this is a topic for another article).

The end of freeriding

Germany, and many other European nations, have been freeriding on the United States. Very few countries have invested the NATO minimum of 2 percent of GDP on defense. They have preferred to espouse the liberal nostrum that trade, diplomacy and interdependence would be sufficient to guarantee permanent peace in Europe. It turned out not to be sufficient. The peace wouldn’t have lasted as long as it has without the US navy, air force and marines so many European politicians love to hate. Again, as with energy, it will take time to correct decades of underinvestment in defense, at a high cost.

A Swedish perspective

Our own country, Sweden, has its share of issues both when it comes to energy generation and defense. Not long ago, we combined nuclear power generation for the baseload with hydro power for the variations in demand. Successive Swedish governments of all stripes – but with a distinct tint of green – have succeeded in destroying what probably amounted to the best energy mix in the world. We have spent billions building wind farms and subsidizing solar plants, something which destabilizes our system of energy transmission.

The same holds true for our defense forces. Once, we had a very capable defense, owning the fourth largest air force in the world. This has been reduced to a rump of its former self as a result of political decisions to abolish conscription and spend the ‘peace dividend’ on projects that gave voters more immediate gratification. We however, do not believe these problems should be solved or funded by other countries and we hope that the next election will be a turning point.

Even if it is a good idea to strengthening Sweden’s defense and rebuild our energy generation, it is not in Sweden’s national interest to give the green light to further borrowing at the EU level with our taxes as collateral. We do not approve of socialising the costs of the transition to fossil-free energy or to share the costs of rearming other EU Member States. French plans for a new EU fund must therefore be opposed.

The EU’s Covid Recovery Fund – upon which the French plan is modeled – was decided in the early hours of the morning at a Brussels Summit. Initially, the Covid Fund proposal had been met with almost universal rejection in the Swedish parliament. However, once the negotiated result was on the table, all parties in parliament, except for the Sweden Democrats and the Left Party, accepted it, under condition that it would be a one-off. Already during the debate that preceded this decision, our party warned the Covid Fund would not be the last, and this prediction seems to materialize faster than we ever imagined.

During the discussion of Macron’s proposal in the Committee on European Union Affairs in the Swedish Parliament on Wednesday, Swedish Prime Minister Magdalena Andersson announced that it was “crystal clear” that the Swedish government didn’t accept “any new joint borrowing or any new fund”.

We fully support this policy and will be very vocal in our demands that the PM tells the same thing to the federalists in Paris. We know from experience that the Swedish Social Democrats have a hard time saying “no” to expensive and unnecessary plans of all kinds emanating from Brussels non-stop.

Now that a new large EU fund is being discussed, we must not repeat the same mistake as with the EU Covid fund. Sweden must now say “no”. We must be ‘crystal clear’ that we will not even discuss a new fund. This is especially true when large sums of money are already available through the EU budget, the Covid Fund and many other EU financial schemes.

If certain member states want to combat energy poverty, they should cut taxes on fuel and electric. If certain governments have squandered their country’s riches and borrowed beyond their ability, that is of course sad, but it is not a problem to be solved by other countries. The citizens of these countries will have to tighten their belts and vote for better leadership in the next election.

Instead of creating a new fund, the existing Covid Recovery Fund should be adjusted to reflect the new security situation in Europe, redirecting it from investments into the green and digital transformation to rearmament and reducing energy dependence.

We would also like to call attention to the fact that the European institutions and EU member states have yet to make a decision on how the jointly issued loans of the EU’s Covid Fund will be repaid. Maybe this is an issue that should be agreed before considering yet another new big EU fund.

If Germany and France want to signal a real turnaround in their policy vis-à-vis Russia, they can always assist other countries bilaterally or through an intergovernmental fund. Swedish taxpayers should however not pay for lowering German electrical bills or for investing into Portugal’s military before we have solved our own issues.

 

A version of this article was originally published in Swedish, by Europaportalen.

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