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 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

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

Global partnerships for regional resilience

This report has previously been published by Perth USAsia Centre and Konrad Adenauer Foundation. Senior Research Fellow Maaike Okano-Heijmans has contributed chapter 4 on the Dutch approach to the Indo-Pacific. 

The Indo-Pacific’s centrality to 21st century geopolitics has long been recognised by those in the region. However, as the Indo-Pacific evolves economically and strategically, its importance is increasingly recognised by those outside the region, whose desires for global prosperity and security demand closer engagement with Indo-Pacific dynamics. Foremost amongst these are European governments.

Understanding how European and Indo-Pacific actors will interact with the region is vital to all concerned. There is a need for increased knowledge of where European and Indo-Pacific interests are best-placed to cooperate with one another, on which issues, and through which channels.

This report seeks to locate Europe within the 21st Century Indo-Pacific, analysing how European governments can most effectively engage with Indo-Pacific partners. It highlights the Indo-Pacific approaches of five European powers: the EU, France, Germany, Netherlands and the UK, and how these approaches intersect with those of Japan, Australia, India, the Association of Southeast Asian Nations, and the United States.

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Authors

Maaike Okano-Heijmans, Senior Research Fellow at the Clingendael Institute

The case for digital development cooperation

This paper has previously been published by Elsevier.

A focus on digital development cooperation as a cornerstone in Europe’s digital connectivity agenda offers opportunities to act on long-term challenges and addresses several key priorities identified by the European Commission in third countries. This article develops an argument for strengthening Europe’s agenda on digital development cooperation, specifically in the Indo-Pacific region. After first conceptualizing digital development cooperation, we argue that the key reasons for the EU to step up its digital development efforts in the Indo-Pacific region are the societal impact of disruptive technologies; the power shift towards the Indo-Pacific; the expanding clout of the Chinese Digital Silk Road; and the implications of the US-China tech conflict. The EU’s 2030 Digital Compass provides an ideal framework to envision the digital development cooperation initiatives of European and Asian players. The EU can benefit from cooperation and coordination with like-minded partners in the Indo-Pacific.

Read full article here.

Authors 

Maaike Okano-Heijmans, Senior Research Fellow at the Clingendael Institute

An essay on European global narrative strategy

A more strategic European narrative is called for. That is, European leaders should more actively engage with the stories they tell and are being told about Europe’s place in the world. This essay problematises the EU global narrative in order to define ways it can be made more competitive in today’s geopolitical discursive arena. It juxtaposes aspects of the European narrative with the discursive moves of China, in order to synthesise elements of a new global narrative for Europe that provides a common sense of purpose with third countries, and that is both competitive and timely. It answers three distinct questions:

• How does the European global narrative currently function?
• Which aspects of the European global narrative are put under pressure by its discursive competition with China?
• And how can EU institutions and European member states contribute to a stronger global narrative strategy?

This essay argues that European leaders should embrace the language of particularism, letting go of universalist value narratives. The European Way of Life is a potentially powerful but underused narrative, through which European leaders can more forcefully explain the existential worth of human rights, democracy and rule of law to Europe. It must dare to speak the language of history, using the ancient civilisational roots of European society as a treasured resource for projecting powerful stories. This means casting as our hero ‘Europe’ the ancient civilisation, rather than the EU as a young political project. The costs of strategic autonomy ought to be explained as the collective sacrifices needed to protect European values. It would be wise to recognise that European society itself is a hero forged out of hegemonic struggle in order to overcome it. It has little need of enemies, but must emphasise time and again the costs of giving in to our own vices.

Read the full essay (longread). 

Authors

Ties Dams (Research Fellow, the Clingendael Institute)

Monika Sie Dhian Ho (General Director, the Clingendael Institute)

Views from the US, EU and like-minded countries in a changing geopolitical landscape. 

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.

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Authors

Maaike Okano-Heijmans (Senior Research Fellow, the Clingendael Institute)

Brigitte Dekker (Junior Researcher, the Clingendael Institute)

Navigating the global battle for digital supremacy 

On 16 September 2020, European Commission President Ursula von der Leyen set a clear goal for the European Union (EU) and its member states: We must make this ‘Europe’s Digital Decade’

Aiming to contribute to improved European policy-making, this report discusses (best) practices of Asian countries and the United States in the field of digital connectivity. It covers a wide range of topics related to digital regulation, the e-economy, and telecommunications infrastructure.

Findings show that the EU and its member states are slowly but steadily moving from being mainly a regulatory power to also claiming their space as a player in the digitalized economy. Cloud computing initiative GAIA-X is a key example, constituting a proactive alternative to American and Chinese Cloud providers. Such initiatives, including also the more recent Next Generation Internet (NGI), are a necessity to push European digital norms and standards, but also assist the global competitiveness of European companies and business models.

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Authors

Brigitte Dekker (Junior Researcher at the Clingendael Institute)

Maaike Okano-Heijmans (Senior Research Fellow at the Clingendael Institute)

This report complements the July 2020 report Unpacking the Digital Silk Road, which analysed Chinese efforts in the digital domain, and the May 2020 policy brief Digital connectivity going global: The case for digital Official Development Assistance (ODA).

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This study attempts to shed light on the demise of multilateralism and the consequences for the Netherlands. It explains the changing nature of multilateralism and its value for the Netherlands and considers its future. Preserving the multilateral system requires understanding the value of multilateralism. It also entails developing a new approach to international cooperation. Therefore, the study proposes a new narrative to justify efforts to maintain, strengthen, and adapt the multilateral system. In a series of Annexes, the study explores in detail the challenges facing multilateral organizations that are especially important to the Netherlands: the World Trade Organization (WTO), the UN Security Council (UNSC), and the UN’s human rights bodies.

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Click here for the Dutch summary.

Authors

Rob de Wijk, Jack Thompson, and Esther Chavannes (HCSS)

Contributors

Contributors: Tim Sweijs, Jelle van der Weerd, Irina Patrahau, and Conor MacNamara (HCSS)

Aiming to contribute to a better understanding of China’s Digital Silk Road (DSR) and its implications for Europe, this Clingendael Report analyses the concept, objectives and activities of the digital subset of China’s Belt and Road Initiative. China Standards 2035 (a blueprint to set global standards for the next generation of technologies), as well as Beijing’s cybersecurity law and push for digital sovereignty, call attention to the DSR’s normative dimensions. China’s moves in the digital domain warrant closer scrutiny.

The European Union and its member states need to act on the DSR’s economic and normative challenges to European industrial competitiveness and European ideas about digital sovereignty, individual privacy, a data-driven society and free flows of data.

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Authors

Brigitte Dekker (Junior Researcher at the Clingendael Institute)

Maaike Okano-Heijmans (Senior Research Fellow at the Clingendael Institute)