Good morning on this rather gloomy Valentine’s Day.
There is very little love lost between Russian president Vladimir Putin and his western counterparts, as the FT writes today. Given the apparent intransigence of the Russian leader, there is a sinking feeling in the west that all diplomatic efforts to resolve the Ukraine crisis may prove to be for naught — including an effort by the German chancellor who travels to Ukraine today before meeting Putin at the Kremlin tomorrow.
EU leaders and Nato defence ministers are in Brussels later this week, and I’ll run you the choreography of meetings and what to expect in the event that the US intelligence turns out to be accurate and Russia does attack Ukraine in the coming days.
In the EU, the European Court of Justice is set to rule on Wednesday on the legality of new rules allowing Brussels to withhold funds when there are rule of law breaches. A few hours later the European parliament is expected to pile pressure on the European Commission to start using this mechanism against Poland and Hungary. (The FT wrote here about Poland’s latest olive branch.)
As for the EU’s defence ambitions, beyond the immediate crisis with Russia, we’ll explore a new idea set to be put forward by the commission, which involves creating a satellite system that could serve both for civilian and military use (courtesy of the French commissioner, Thierry Breton).
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Bracing for impact
EU preparations for the economic and social impact of a Russian attack on Ukraine are running at full speed. As part of that work, the bloc is examining the potential countermeasures Moscow could take if western sanctions are imposed. (On sanctions, the US and the EU are “nearly there” in readying a joint package, as the FT wrote on Friday.)
If an attack on Ukraine occurs, both the contingency measures and the actual sanctions package would likely require a green light from EU leaders, who just happen to be meeting in Brussels on Thursday and Friday for a long-planned summit with the African Union.
As of late last night, no emergency summit had been scheduled yet, several diplomats told Europe Express, but such a meeting could be called at short notice if needed. European Council chief Charles Michel spoke to several central and eastern European and Nordic leaders about the Ukrainian situation yesterday, with the Lithuanian president tweeting that he is ready to discuss the issue at the summit later this week.
Moving towards a coordinate response to aggressive Russian actions and military build-up in #Belarus. On call with @eucopresident and leaders of 🇱🇻,🇪🇪,🇵🇱,🇧🇬,🇨🇿, and 🇸🇪. Stressed the need to support #Ukraine and deter #Russia. Ready to discuss this issue at #EUCO next week!
— Gitanas Nausėda (@GitanasNauseda) February 13, 2022
On the other side of town, at Nato, defence ministers are gathering on Wednesday and Thursday — so Nato secretary-general Jens Stoltenberg could also easily join EU leaders for an emergency meeting, if need be.
Planning for potential waves of refugees is already under way in EU countries bordering Ukraine (including Poland and Romania) and most western European nations have advised their nationals to leave Ukraine immediately.
As for economic contingencies, the biggest concern is the potential disruption of gas supplies from Russia (about 40 per cent of Europe’s gas imports come from Russia). Talks to secure alternative gas supplies are continuing.
But some worries also exist for the airline industry. One question is whether Russia would be tempted to ban European companies from flying through its airspace if it is hit by a massive wave of US and EU sanctions.
Finnair told Europe Express that the shortcut between Asia and Europe (over Russia) “is important for many reasons” and expressed confidence that the company would be able to retain overflight rights. “Geopolitical tensions have caused speculation also before, but we have continued to operate our traffic,” the Finnish airline said.
Chart du jour: Raw dependence
Russia is one of Europe’s main suppliers of critical raw materials, such as palladium, which is needed in the catalytic converters used in vehicles to limit harmful emissions, and titanium, which is crucial for the aerospace industry. (More here)
Space, the final EU frontier
The EU is struggling to forge a joint defence force on earth. That has not stopped the European Commission attempting to build one in space, writes Andy Bounds in Brussels.
The Defence and Space package should be endorsed by the college of commissioners tomorrow as part of planning for the “strategic compass” which will map out how the EU can bring its 27 members’ armed forces closer together.
It suggests increasing the role of the European Defence Fund, worth €8bn over seven years, and levering in money for the military from Horizon Europe, the €95.5bn, multiyear science research programme.
The space ideas are the boldest yet, as Breton sees a chance to put rocket boosters on the European space industry — fuelled with taxpayers’ cash.
The EU already has Galileo, a global positioning system, and Copernicus, which is used for earth observation. Breton wants to build a third satellite system in lower orbit for secured communications and access to the internet.
The signal would be encrypted and offered to Europe and Africa to give that continent an alternative to Chinese-built cable infrastructure. “If satellites are closer to earth and with improved technology this can be competitive to terrestrial broadband,” said an official working on the programme.
It would also provide a back-up if excessive demand or a cyber attack disrupted the internet. Breton believes the EU has played too nice with powers such as Russia, China and the US and needs independent space defence capabilities. “Space at European level is only civilian,” the official added. “This time we will dare to say it also has a defence dimension.”
The paper will not state how much this new satellite constellation might cost, though it will be a public-private partnership and some seed money is likely to come from the EU budget.
What to watch today
Scholz is in Kyiv today ahead of meeting Putin in Moscow tomorrow
European Central Bank chief Christine Lagarde presents the bank’s annual report to the European parliament in Strasbourg
EU trade ministers meet for an informal council in Marseille
. . . and later this week
The European Commission adopts defence and space proposals tomorrow
The European Court of Justice issues its ruling on the legality of the rule of law mechanism on Wednesday
Nato defence ministers meet in Brussels Wednesday and Thursday
EU leaders meet their African counterparts on Thursday and Friday in Brussels
Munich Security Conference starts on Friday in Bavaria
No honeymoon: French presidential contender Valérie Pécresse told the FT that people will have to work harder and the government spend less if she wins the April election and deprives Emmanuel Macron of a second term.
Friends of Qatar: Regulators in Brussels have dropped an antitrust probe against QatarEnergy, one of the largest liquefied natural gas producers in the world. The decision comes amid concerns that gas supplies from Russia to Europe could be disrupted if the Kremlin decides to invade Ukraine.
Moderna Britain: US Covid-19 vaccine maker Moderna is in late stage talks with the UK government about investing in domestic mRNA research and manufacturing facilities. Since the pandemic, Moderna has scaled up production, partly by working with European contractors such as Switzerland’s Lonza.