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21 August 2024, Wednesday | NIAS Europe Daily Brief #916
By Advik S Mohan and Samruddi Pathak
US Nuclear strategy perceives China as threat due to close ties with Russia
On 20 August, The New York Times reported on Joe Biden’s revision to the US Nuclear Employment Guidance Policy. Vipin Narang, an MIT nuclear strategist who served in the Pentagon, said that Joe Biden issued updated nuclear-weapons employment guidance to account for multiple nuclear-armed adversaries. Pranay Vaddi, National Security Council’s senior director for arms control and non-proliferation, said that the updated nuclear strategy aims to “respond to nuclear crises that break out simultaneously or sequentially, with a combination of nuclear and non-nuclear weapons.” Russia and China are conducting military exercises regularly. Similarly, North Korea and Iran are supplying arms to Russia, which it uses against Ukraine. Richard N Haass, former senior State Department and National Security Council official for several Republican presidents, said: “We are dealing with a Russia that is radicalised.” According to the report in Deutsche Welle, Chine is expected to increase its nuclear warheads from 500 to 1000 by 2030 with help from Russia. (“Biden Approved Secret Nuclear Strategy Refocusing on Chinese Threat,” New York Times, 20 August 2024; “Report: Biden approved China-focused nuclear strategic plan,” Deutsche Welle, 21 August 2024)
THE EU
European Commission approves building silicon chip factory in Dresden
On 20 August, the European Commission approved the building of a new silicon chip factory in Dresden, Germany. The German Federal Government will provide a fund of EUR five billion to the European Semiconductor Manufacturing Company (ESMC) under the approval. It is going to be the first chip factory set up by a Taiwanese Semiconductor Manufacturing Company in Europe. The manufacturing facility will develop high-performance chips. The approval aims to reduce Europe's dependence on other countries for technological advancements. ESMC is a joint venture between three European firms, Bosch, Infineon and NXF, and Taiwanese semiconductor giant, TSMC. The European firms will be holding 30 per cent stakes in the factory collectively while TSMC will be holding 70 per cent. The Commission said that it is necessary to “ensure the resilience of Europe's semiconductor supply chain.” The factory is expected to start production in 2027 and will focus on chips for the automobile industry. It is expected to create 2,000 jobs. Dresden University of Technology and TSMC also signed a student exchange program wherein 30 German students will go to TSMC for a two-month internship. Politico has written that Germany has walked the tightrope of making the entire cooperation an economic one, rather than a political one. DW highlights that the semiconductor industry is also risky as an investment since Joe Biden, the US President, lost billions of USD in ventures to build chip manufacturing units in the States. (“EU greenlights new chip factory in Dresden,” Deutsche Welle, 20 August 2024)
EU plans to impose import duties on Chinese electric cars
On 20 August, the European Commission stated that it planned to impose five-year import duties of up to 36 per cent on Chinese electric car imports. The decision comes after the Commission imposed provisional tariffs on Chinese electric vehicles (EVs) last month, for unfairly undermining their European counterparts. China’s policy of using state funds for developing EV firms has given it an edge over European manufacturers, who lack the luxury of governmental support. The EU was the largest recipient of Chinese EVs in 2023, at nearly 40 per cent. The Commission plans to impose tariffs of 21.3 per cent for Chinese manufacturers cooperating with them, while a maximum 36.3 per cent will be imposed on uncooperative EV firms. On the other hand, Tesla cars manufactured in China will be subjected to a rate of nine per cent; after the Commission found it benefitted little from Chinese subsidies in contrast to local manufacturers. China has filed an appeal with the World Trade Organization (WTO) over the tariffs, while the EU believes that they are compatible with WTO rules. (“EU plans 36% tariff on Chinese EVs, with lower duty for Tesla,” Le Monde, 20 August 2024)
FRANCE
Macron must accept changed political scenario says an editorial in Le Monde
On 19 August, an editorial in Le Monde stated that Emmanuel Macron, President of France must adapt to the new political situation in France. The editorial notes how France remains without a government six weeks after the parliamentary elections; an unprecedented situation which violates democratic principles, in the view of the editorial. According to the editorial, the political deadlock stems due to the rigid views of two opposing political camps. The first is that of political groups on the left who want a Prime Minister who is an autonomous head of government. The second is President Macron, who wishes to remain at the centre of French politics, exercising influence. The editorial calls on the double denial of both political groupings to end, in order to ensure a stable government. It states that Macron needs to accept the results of the elections which saw a decrease in his power, and accept the changed scenario. Simultaneously, the left groups must learn to cooperate, rather than believing they can govern the country alone. The editorial concludes with the hope that attempts are made towards creating a proper government, instead of the prevailing political polarization. (“Macron must stop playing for time,” Le Monde, 19 August 2024)
ITALY
Earthquake-ridden towns in dilemma due to the latest budget
On 20 August, Politico reported about the pressure on Italy from the EU to reduce its fiscal deficit. The Italian city of Amatrice was hit by a 6.2 magnitude earthquake in 2016 which left 90 per cent of the population homeless. The Italian government approved a budget for rebuilding the town, Giuseppe Conte, former Prime Minister, introduced a ‘Super bonus’ scheme to increase the resources allocated. The scheme has further complicated the bureaucratic processes. Under the scheme, homeowners can claim up to 110 per cent of the costs of sustainable home renovations through tax credits spread over four to five years. However, the super bonus proved to be hurtful to the town as the surge in demand led to the inflated cost of construction materials. This led to disastrous miscalculations as the total expected cost ballooned to EUR 219 billion, over six times the predicted cost of EUR 35 billion. Thus, construction firms did not start a full-scale reconstruction, rather they developed places with modest energy improvements. (Ben Munster, “Italy’s budget mess leaves earthquake-stricken towns in limbo,” Politico, 20 August 2024)
LITHUANIA
Construction of German army base near Russian border begins
On 19 August, Reuters reported on Lithuania’s construction of a military base for the Bundeswehr or German military. The base in Rudninkai only 20 kilometres from Belarus will accommodate up to 4000 combat-ready German troops; along with storage and maintenance for equipment like tanks as well as shooting ranges. This will be the first permanent foreign deployment of the Bundeswehr since World War II. Lithuania has increased its defence spending to three per cent of Gross Domestic Product (GDP), and increased taxes to support the same. Raimundas Vaiksnoras, Chief of Defence of the Republic of Lithuania estimated it would cost over EUR one billion until 2027 to build the base. According to Vaiksnoras, the base would reassure the Lithuanian population of its security, as well as deter the Russians. However, there are fears that the base will not be constructed in time since only about a fifth of the buildings in Rudninkai have been contracted for construction. At the same time, disputes within the German government over budget spending are putting its military commitments into question. (Andrius Sytas, “Lithuania begins construction of base for German troops near Russian border,” Reuters, 19 August 2024)
SERBIA
Hundreds rally against controversial mine
On 19 August, hundreds of citizens attended a rally in Serbia against the lithium mining project by mining corporation Rio Tinto. Residents fear that the proposed mine could significantly damage the environment in Serbia, although the government argues that it will boost the economy Protestors gathered in the central square of the industrial town of Valjevo, and chanted slogans like “You will not dig” and “Rio Tinto, leave Serbia!” Aleksandar Jovanovic Cuta, one of the organizers of the protest said: “Serbia will not go quiet over this issue. This is non-negotiable.” Another demand raised at the Valjevo rally was an end to the perceived government clampdown on environmental activists. Aleksandra Bulatovic, an environmental activist stated that over 40 activists had been questioned and had their apartments searched since a rally in the capital of Belgrade on 10 August. They were accused by authorities of conspiring against the constitution, although Bulatovic called it unconstitutional. (“Scores in central Serbia rally against Rio Tinto’s lithium project,” Reuters, 19 August 2024)
THE UK
Prime Minister proposes to control far-right threat through economic progress
On 20 August, an article in Politico stated that Keir Starmer, Prime Minister of the United Kingdom planned to tackle the threat from the far-right by improving economic conditions. After the far-right riots in the UK, it is believed that Starmer’s aides regard solving the socio-economic problems in the country as the solution to prevent such violence. An anonymous Member of Parliament (MP) from Labour close to Starmer stated that a pragmatic approach was required by the government to resolve the sense of alienation from the political class, felt by large sections of the population. Luke Tryl, the director of polling firm “More In Common” said: “It is not sustainable to have a functioning democracy with such high levels of disillusionment.” Anonymous government officials and Labour MPs confirmed that the party was focusing on a bottom-up approach; aimed at resolving the anger felt by the population through improving their economic situation. According to Tryl, just one act like mending every pothole in the country could push back against the far-right narrative that politics is irrelevant. (Esther Webber, “Keir Starmer’s plan to tackle the far right? Fill some potholes,” Politico, 20 August 2024)
INTERNATIONAL
Iran closes German Language Institute in Tehran
On 20 August, Mizan reported that the Iranian government closed two branches of the German Language Institute (DSIT) on the allegations of breaching Iranian law and extensive financial violations, calling them “illegal centres affiliated with the German government.” Iran’s ambassador to Germany has been summoned to Berlin as a response. The Institute was founded in 1995 by the German Embassy. Germany’s Foreign Office has demanded immediate reopening of the Institute. However, Nournews reported that the closure of DSIT was a reciprocation to the closure of the Hamburg Islamic Centre in Germany (IZH) in July. German Interior Minister Nancy Faeser called the IZH an "important Iranian propaganda centre in Europe." In July, the Iranian Government also summoned the German ambassador as a response. German-Iranian diplomatic relations have severed after some individuals holding dual citizenship of Iran and Germany were arrested in Iran on the charges of espionage. (“Iran orders closure of German language institute in Tehran,” Deutsche Welle, 20 August 2024)