Partners and Policies for the Netherlands and EU in Turbulent Times

The yearly report by the Clingendael Institute and The Hague Centre for Strategic Studies (HCSS) analyses the most important trends and developments in the international regimes that form the international order, taking stock of the world of today and tomorrow. 

The focus of this report is identifying policies and partners for the Netherlands and EU that will further the goal of fostering strategic autonomy. The context for this process is an international system characterized by accelerating great power competition and eroding multilateral institutions.

Last year’s Strategic Monitor developed a broad blueprint for moving beyond the Netherlands and EU’s longstanding political and security dependence on the United States, in a constructive and open manner, and argued that this would be the best way to safeguard Dutch and EU interests in a geopolitical era. The need to implement strategic autonomy in this spirit – as a way to strengthen the transatlantic relationship and to protect European interests and values in an era of geopolitical competition – is the starting point for this year’s Strategic Monitor. It consists of several parts, including:

• This synthesis report

Five sub-reports:

• “Climate Security in Global Hotspots: Policy Options for The Netherlands”, by Dorith Kool and Laura Birkman
• “Taming Techno-Nationalism: A Policy Agenda”, by Hugo van Manen, Tobias Gehrke, Jack Thompson, and Tim Sweijs
• “Shifting Sands of Strategic Stability: Geopolitical Competition, Emerging Technologies, and the New Arms Control Agenda”, by Paul van Hooft, Lotje Boswinkel, Tim Sweijs, Benedetta Girardi, and John Michaelis
• “Sharing the Burden, Sharing the Secrets: The future of European intelligence cooperation", by Danny Pronk and Claire Korteweg
• "Identity, Industry and Interoperability: The Drivers of European Armaments Collaboration", by Danny Pronk, Dick Zandee and Adája Stoetman

Last year saw the 10th anniversary of the EU-facilitated Belgrade-Pristina dialogue. While leading to results on technical matters, political normalisation of the relationship between Serbia and Kosovo has not been achieved. As part of a broader study on EU foreign policy effectiveness, this policy brief discusses the ways in which EU internal factors have hampered the EU’s effectiveness in the Belgrade-Pristina dialogue. Specifically, the paper assesses the positions and influence of EU member states vis-à-vis one another and the European institutions, asking how contradictions could be overcome in the future. This assessment is placed in the wider context in which the dialogue takes place, taking into account the state of EU enlargement and foreign power influence.

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Authors

Wouter Zweers, Research Fellow at the Clingendael Institute
Myrthe de Boon, intern at the Clingendael Institute

EU Member states can be divided on China, even on issues such as human rights. Often singled out as an agent of division is the Hungarian government of prime minister Viktor Orbán. Hungarian dissent begs the question: how can the EU move forward on China given Hungary’s strategy of obstructive dissent? European cooperation ought not wait for unanimity, nor should it rely on value-politics: member states should play the power game to circumvent or break lingering impasses. Member States should support setting up a 27+1 Forum as the main platform for European China-policy, form a leading group tackling strategic corruption and corrosive capital, and initiative a track 1.5 dialogue on China with Germany and the Visegrád Countries.

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Authors 

Ties Dams, Research Fellow at the Clingendael Institute

A scenario exercise focused on the 2023 elections

Over the years, foreign policy has become a source of tension in the European Union’s relationship with Turkey. Although the EU has repeatedly disapproved of Ankara’s (military) interventions in Syria, Libya and Iraq as well as in the Eastern Mediterranean region and the South Caucasus, it has so far not been able to counterbalance Ankara’s actions. In that light, Turkey’s 2023 elections serve as a crucial moment. Seen through the lens of two theoretical scenarios – Recep Tayyip Erdoğan and the People’s Alliance win the elections, versus Kemal Kılıçdaroğlu and the Nation Alliance win the elections – this policy brief provides an insight into the instruments the EU has at its disposal to influence and/or respond to Ankara’s potential future foreign policy. It shows that while neither scenario will be hassle-free, the EU has most room to manoeuvre and can make best use of its instruments, ranging from diplomatic engagement to military cooperation, in a situation where Kılıçdaroğlu and the Nation Alliance win the elections in 2023.

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Authors 

Nienke van Heukelingen, Research Fellow at the Clingendael Institute

A chance for Europe?

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.

Authors

Maaike Okano Heijmans, Senior Research Fellow at the Clingendael Institute
Brigitte Dekker, Junior Researcher at the Clingendael Institute

Through its enlargement policy, the EU seeks to foster democratisation in Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia, also called Western Balkans six (WB6). Despite years of efforts, the EU’s policies have not brought about the expected change. The enlargement process has lost both efficacy and political momentum. Instead of experiencing decisive democratic reform, the WB6 have slowly developed into ‘stabilitocracies’: countries with obvious democratic shortcomings that at the same time claim to work towards democratic reform and offer stability.

The report identifies eight flaws in the EU’s strategies, policies and their implementation that are believed to contribute to stabilitocracy formation:

1. The EU’s overly technical approach to enlargement fails to foster deep political and societal transformation.
2. A lack of clarity in rule of law definitions hinders the adequate transposal of EU values.
3. Inadequate reporting on reform progress dilutes actual political realities in the WB6.
4. The EU often fails to speak out against and act upon standstill or backlash, implicitly offering tacit support to autocratic tendencies instead.
5. The EU regularly proves unable to reward progress because it is unable to find common understanding among its member states, thereby harming its credibility.
6. An overly leader-oriented approach towards the WB6 reinforces and legitimises the position of Western Balkan political elites who use the EU’s public endorsement to reinforce their grip on society.
7. Party political relations between political families in the EU and their WB6 counterparts lead to undue support for WB6 parties even when they display non-democratic behaviour.
8. A lack of interim timelines leaves the EU unable to monitor reform progress and hold governments of the region accountable for not carrying out necessary democratic reforms.

In each of the WB6 countries, concrete cases exemplify how EU influence has unintentionally contributed to stabilitocracy formation and what factors have determined whether the EU approach has been constructive or not. The technical approach is the most prevalent flaw in the case studies. Examples range from the EU’s inability to harmonise the interests of different ethnic groups in Bosnia and Herzegovina, structural weaknesses in the European Union Rule of Law Mission in Kosovo (EULEX), the failure of technical safeguards to counter blurred boundaries between branches of power in Montenegro, an overly technical focus in progress reports on democracy and rule of law reforms in North-Macedonia, and an overly technical fixation in the application of the revised methodology in Serbia.

To avoid the traps of further stabilitocracy entrenchment, we put forward recommendations and critical reflections on how to improve the EU’s role in the region. Recommendations include focusing more on genuine feedback to WB6 governments, better reporting on the state of progress, enhancing communication with citizens, and specifying benchmarks while accompanying them with more tangible timelines.

However, fixing the technical process is a necessary but not sufficient condition for the EU accession process and its democratisation agenda for the Western Balkans. Therefore, the EU and its member states need to seriously consider proposals for a further overhaul of the enlargement process in order to allow for a staged accession trajectory for the WB6. At the same time, the EU could speed up engagement with the WB6 beyond the enlargement framework in order to not lose grip in a region subject to increasing great-power competition. Lastly, it is recommended that the Netherlands takes further action to substantiate its ambitions as a critical but engaged member state.

Authors

Wouter Zweers, Research Fellow at the Clingendael Institute
Giulia Cretti, Junior Researcher at the Clingendael Institute

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The EU’s mutual assistance clause of Article 42(7)

As the EU steps up its ambition to defend the interests and the security of its member states, it should also come to terms with a treaty article that is unknown to many and uncomfortable to others: Article 42(7) Treaty on European Union (TEU), also known as the ‘mutual assistance clause’. Since the Lisbon Treaty adopted an amended version of the article from the now defunct Western European Union, EU member states formally have ‘an obligation of aid and assistance by all the means in their power’ in case another EU member state becomes the ‘victim of armed aggression on its territory’. Article 42(7) remained dormant until France invoked it in 2015 in response to the Bataclan attacks. This sparked debates across the EU about how the article works in practice, how ‘armed aggression’ and ‘territory’ should be interpreted and to what extent the article applies to terrorism or to hybrid forms of aggression. In 2020 the Greek foreign minister openly hinted that it could be invoked in response to a confrontation with Turkey, prompting yet more handwringing in Brussels about the possible consequences of one NATO ally invoking the EU mutual assistance clause against another. As the EU prepares to adopt its Strategic Compass in early 2022, some member states have now asked for the article to be ‘operationalised’.

This is no small task. Opinions on Article 42(7) diverge sharply across the EU, ranging from member states who prefer to discuss it as little as possible in order not to undermine NATO’s primacy of collective defence, all the way to those such as France who see it as part of the EU’s ambition to become a geopolitical and security actor of its own. In between are the juridical purists, who stick to strict legal interpretations to try and defuse the tensions inherent in the article; the neutral abstentionists, who are reluctant when it comes to binding commitments on collective defence; and the pragmatists who argue for maximum flexibility or who see added value in the article due to their specific geographic or political context.

In the course of this debate, it is important that Article 42(7) should not be misinterpreted as ‘the EU’s own Article 5’. It has deliberately been drafted differently from NATO’s collective defence clause, in order to take the specific circumstances and concerns of NATO allies and traditionally neutral EU member states into account. It is also more restrictive in terms of its territorial scope, which raises questions about the article’s potential application to the maritime domain, cyberspace or space itself.

The EU is neither designed nor currently equipped to operate as a military alliance. For 21 of its member states also member of NATO, the Alliance remains the cornerstone of collective defence in Europe. As a result, the article should be regarded from the point of view of complementarity between both organisations, not competition between them. The EU also has many other instruments in its toolbox that it can use to respond to threats and crises, such as those linked to the solidarity clause of Article 222 Treaty on the Functioning of the European Union (TFEU). But merely pretending that Article 42(7) does not exist – or attempting to neuter its deeply political character by hiding behind purely legal arguments – are neither realistic nor desirable policy options. Article 42(7) is ‘here to stay’ and needs to be given a place within the wider European security and defence policy.

This report concludes that there are at least three situations in which the EU’s mutual assistance clause could plausibly be invoked: in response to a terrorist attack, against hybrid forms of aggression such as serious cyberattacks, and as a result of a kinetic military attack. There are also EU member states that are not members of NATO and that might want to rely on Article 42(7) as a means of last resort. Some calamitous situations may even be conceivable in which one NATO ally could invoke it against another. As uncomfortable and hypothetical as these scenarios may be, the EU should nonetheless be prepared to respond in case they do materialise. Regular exercises and the drafting of a non-binding document outlining the EU’s response options would be a step in the right direction.

Authors

Bob Deen, coordinator of the Clingendael Russia and Eastern Europe Centre (CREEC) and Senior Research Fellow at the Clingendael Institute
Dick Zandee, Senior Research Fellow and Head of the Security Unit of the Clingendael Institute
Adája Stoetman, Junior Researcher at the Clingendael Institute

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The drivers of European armaments collaboration

Strengthening European defence cooperation entails many aspects from deploying forces together to collaborative armaments acquisition programmes. Supplying the  armed forces of European countries with modern weaponry that is interoperable and standardised, is a key prerequisite for Europe to become a true geopolitical player. In this context, this report has identified nine drivers behind European armaments collaboration in three categories: political, industrial and military.

Regarding political drivers, it is the combination of a changing international security environment, the aim to reduce strategic dependency and fear of US retrenchment that contribute to European armaments collaboration. The most important industrial driver in Europe is the declining economic viability of an exclusively national approach to the generation of advanced military capabilities. Here, economies of scale, cross-border defence industrial consolidation, and the institutional deepening of European armaments collaboration via the creation of instruments such as the European Defence Fund (EDF), contribute equally. Finally, European armaments collaboration is a product of military policy initiatives that demand equipment commonality and interoperability. Also, symmetry in the requirements and the timing of acquisition of military equipment have an impact on the scope for collaboration.

Using these nine drivers as an analytical framework, three case studies of major future European collaborative armaments efforts were undertaken: the Future Combat Air System (FCAS), the Main Ground Combat System (MGCS) and the Next Generation Rotorcraft Capability (NGRC). Each case was examined separately in order to assess the implications for future defence policy and armaments planning purposes.

Having analysed the FCAS, MGCS and NGRC programmes from the political, industrial and military points of view, this report concludes that all three of these major European collaborative armaments programmes should be on the future Dutch defence planning and armaments procurement agenda. The three programmes clearly support the objective of the Dutch government to strengthen European defence cooperation and to improve European military capabilities.

Authors

Danny Pronk, Senior Research Fellow at the Clingendael Institute
Dick Zandee, Senior Research Fellow and Head of the Security Unit of the Clingendael Institute
Adája Stoetman, Research Fellow at the Clingendael Institute

Motives, means and impact of the interventions in Syria, Libya and the South Caucasus

Since the Arab uprisings in 2011, but especially after the failed coup d’état in 2016, Turkey’s foreign policy has shifted from ‘zero problems’ to the pursuit of strategic depth and autonomy in its neighbourhood. In 2020, Syria, Libya and the South Caucasus became three theatres for Ankara’s new hard-power tactics, a policy that may well be here to stay (at least until the elections in 2023).

This policy brief explores the strategic motives, the means of intervention and the impact of Turkish operations in these three conflict areas. While Turkey’s strategic considerations, modalities and consequences vary greatly from case to case, certain parallels can be drawn. They reveal an overall pattern of a much more assertive Turkey that is increasingly willing to deploy a combination of political and military means to secure its strategic objectives in its immediate neighbourhood.

Authors

Nienke van Heukelingen, Research Fellow at the Clingendael Institute
Bob Deen, Senior Research Fellow at the Clingendael Institute

EU digital connectivity in Africa

Global Gateway constitutes the EU’s third attempt to reconfigure its strategy and tactics in a world of clashing capitalisms and geopolitical power shifts. Complementing the new industrial policy that protects the EU’s interests at home, Global Gateway is Europe’s international agenda to promote individual freedom, political liberty and economic openness globally, together with partners that share its interests. The proof of concept is in the EU–Africa context and in the digital domain, where key EU interests and niches lie in terms of development, norms and standards, and stability.

Global Gateway action here can draw on lessons from earlier experiences in the Indo-Pacific. A Team Europe approach that creates ownership by EU institutions, member states and the private sector is needed to kick-start flagship projects that respond to real needs. Much is at stake. A positive narrative that highlights alternative opportunities – to growing Chinese influence, in particular – is the most effective way of positioning the EU in a region where growth, security and stability are key interests of both the EU and its member states.

Authors

Maaike Okano Heijmans, Senior Research Fellow at the Clingendael Institute
Brigitte Dekker, Junior Researcher at the Clingendael Institute