Photo : The JamesTown Foundation
05 January 2023, Thursday | NIAS Europe Daily Brief #402
By Padmashree Anandhan
China in the Baltic region: Four takeaways
On December 2022, the Jamestown Foundation released a report on "Between Brussels and Beijing: The Transatlantic Response to the Chinese Presence in the Baltic Sea Region." It focuses on the increasing sphere of influence of China in the Baltic, possible security challenges ahead due to China’s presence for the Baltic States, provides the transatlantic view’s the role of China and recommends what posture the US, the EU and the Baltic must hold. Following are the four takeaways of the report.
First, China’s increased Baltic presence in the infrastructure, supply chain, technology, media, and language. China’s has played its economy statecraft in terms of investing in critical infrastructure, acquiring specific technologies through Lithuania’s natural resources, and supply chains such as owning shares in Estonia’s air, rail and seaports. The BRI initiative is another dual-hit factor which brings China closer to the Baltic as it offers shortest route of trade to the Baltic and is made possible connecting maritime route, Eurasian bridge and a direct access to Belarus and Russia through Lithuania. Apart from economy and trade, China also uses its human resources in form of language centres and keeps check on the student’s family in China to ensure information collection. The media house Xinhua has increased its branches to 170 outside China which is influential in impacting societal groups, public campaigns, and national languages.
Second, a Baltic wary of security risk but blinded by economic cooperation. Compared to Estonia, and Latvia, Lithuania is seen to be sound for Taiwan which has slight disturbance in its relations with China. In terms of sharing economic intelligence, cooperation in infrastructure, transportation and commercial opportunities in trade and technology has helped boom the Baltic-China relations. Competing with China in the economic landscape is a no-go area for a small region like Baltic. Whereas, in perceiving China as a security challenge, Baltic’s posture has NATO, EU and the US along to support, but the Russian war in Crimean and Ukraine has by default made Baltic to see Russia as a prime threat over China. Economic dependency over China, and Russia-China politico military relations has been under debate in Baltic, but China as a primary threat to security seems to be in the second.
Third, possible security challenge due to digital, cyber, media, data exchange and maritime link. Estonia, Latvia Lithuania’s highest fear on closeness with China is over its 5G, digital communication, the lack in infrastructure to track China’s cyber hacking, exchange of “sensitive economic data” and its involvement in the maritime link in Latvia and Lithuania. The deployment of China’s Navy in the Baltic Sea is not seen as probable security threat but the Baltic states focus lie in the non-traditional, politics, and economic security.
Fourth, missed focus of Transatlantic. The US’s strategy in the Baltic has not been towards looking at China as the threat but, Russia. China has viewed only as a political and a economic challenge, but its lacks in estimating the extent of Chinese involvement in Baltic’s infrastructure. The engagement has grown to a magnitude to affect the key arial and maritime infrastructure which might in-turn pose a security challenge for the transatlantic. The Jamestown foundation in its report recommends the US to involve in closer analysis of China’s “ownership” in the infrastructure and upcoming investments in the Baltic to secure it from China and prioritise the EU unity to ensure a stable security in the wider transatlantic.
“Between Brussels and Beijing: The Transatlantic Response to the Chinese Presence in the Baltic Sea Region,” jamestown.org, 2022
By Allen Joe Mathew
Real Estate Market faces downturn at the start of 2023
On 03 January, a French real estate agency Century 21, released its report for 2022 on France’s real estate market. The report found that there has been a slowdown in the housing market. The President of Century 21, Charles Marinakis said: “We are seeing a market reversal as a result of a significant slowdown in the housing market which had gained popularity in the wake of the Covid-related lockdowns.” The housing market peaked in the summer of 2022 and from then on prices have fallen drastically. In Paris, the prices fell by 2.4 per cent in 2022 when compared with 2021, the report stated. Another report on the distribution of housing loans, by the Banque of France, released on 28 December 2022 also pointed to the same trend. It stated: “There has been a relative slowdown in the second half of the year, which somewhat standardized the supply of home loans, following the exceptional growth in recent years caused by very low interest rates.” (Veronique Choron, “The changing landscape of France's real estate market,” Le Monde, 03 January 2023)
Ruling Party leader says coalition partners should unite under a single party
On 04 January, Forza Italia’s leader, Silvio Berlusconi announced his desire to see the unification of the three main ruling parties of Italy. The three allies are the President's, Giorgia Meloni's Fratelli d'Italia, Matteo Salvini's League and Berlusconi'e Forza Italia. These three parties combined are in a coalition that forms the Italian government. Berlusconi's suggestion comes at a time when the European elections are scheduled to be held in 2024. Meloni’s party being the strongest in Italy, she is not keen on uniting the three parties into one, but looking ahead at the elections in Brussels this can be an opportunity for a wider right-wing consolidation. Brussel's politics is vastly different from that of Rome. Either way, Meloni has declared her intention of retaining power as the head of the right-wing parties, it remains to be seen what decision she would take. (Olivier Tosseri, “Giorgia Meloni tentée par la fusion des droites italiennes pour peser plus à Bruxelles,” Les Echos, 04 January 2023)
Rishi Sunak lists 2023 priority plan
On 04 January, British Prime Minister Rishi Sunak gave a speech listing his top priorities for 2023. The major points were on Economy, Healthcare and Immigration. On the Economy, Sunak said that the government plans to halve the rate of inflation. Secondly, the government will aim at creating better-paid jobs across the country. Third, improvement in public services, by focusing on reducing the national debt burden. Fourth, on healthcare, he spoke of reducing NHS waiting lists by March 2023. Fifth and final, on immigration, he said tougher laws will be enacted that detain and remove illegal migrants crossing over in small boats. (“Prime Minister outlines his five key priorities for 2023,” gov.uk, 04 January 2023)
BBC report on analysis of post-Brexit UK
On 02 January, BBC gave an analysis of how the UK’s economy has fared post-Brexit. The report says that the UK is behind on every measurable metric. Some of these could be attributed to the pandemic-induced challenges, but when compared with Europe, the UK remains an outsider with markedly low-quality governance. The many promises of Brexit have been busted by the reality check that is now happening. The only companies that have profited from this situation are those that operate in the areas where previous companies have moved out of the UK. Since the UK's import duty and protectionist policies came into force, many companies are not willing to export their products to the UK, and this artificially created situation is not sustainable for a long time. There is a shortage of labour in every industry, and inflation has hit the country hard with prices of consumer goods shooting up. All this has negatively affected the production capacity of companies. Four per cent is the reduction in UK’s economic output according to the Office for Budget Responsibility. The other major issue is that of relations with Northern Ireland. Brexit promised to resolve the trade problems that existed, but the condition remains the same and more uncertain. The UK has been in the process of trying to create new laws, moving away from legacy EU laws. Due to Brexit being driven by political interests, it is near impossible to have sensible policies come to the forefront. The writer says this will take some years. (Douglas Fraser, “Brexit: The scorecard two years on,” BBC, 02 January 2023)
SCIENCE & TECHNOLOGY
META to pay EUR 390 million for breaching EU’s data protection laws
On 04 January, Irish Data Protection Commission slapped a fine of EUR 390 million on META, the parent entity owning Facebook, WhatsApp, and Instagram along with a host of other internet companies. The Commission, in its report, stated that the method used by META in taking consent for collecting data from people for posing targeted ads on Facebook and Instagram violated EU laws. The case includes Facebook and Instagram. META has been ordered to change the process of acquiring data and been given three months to do so. The Commission stated in its judgment that companies do not have the right to force their users to consent. META released a statement saying it feels disappointed by the judgement, and this will affect its personalized targeted advertising. The case was brought to the Commission in 2018 by a prominent privacy rights activist, Max Schrems. ( Chris Vallance, “Meta fined €390m over use of data for targeted ads,” BBC, 04 January 2023)
Relief as France sees inflation ease during December
On 04 January, the French National Statistics body, INSEE released its preliminary data on inflation during December 2023. The inflation rate fell to 6.7 per cent from 7.1 per cent in November 2023. The French Minister of the Economy, Finance and Recovery Bruno Le Maire issued a statement saying, 2023 will bring a fall in inflation and prices are set to stabilize. The major reason for the slowdown in inflation can be attributed to the fall in energy prices, which peaked at 18.4 per cent in November 2023 and have come down to 15.1 per cent in December 2023. The Food price inflation meanwhile has remained stable at 12.1 per cent. (William Horobin, “French Inflation Unexpectedly Slows, Easing Pressure on ECB, ” Bloomberg, 04 January 2023)
Czech Republic gets first Commissioner for Roma Affairs Commission
On 04 January, the Czech government appointed Romni Lucie Fukova to the post of government Commissioner for Roma community affairs. The post had been created in December 2022, for addressing issues faced by the Roma community. They comprise 2.5 percent of the population in the Czech Republic. The Commissioner’s aim is to uplift the historically underrepresented and disadvantaged minority present in the country. Fukuoka after her appointment said her major goals were to create educational and professional training opportunities targeting the most vulnerable among Roma. The majority of the Roma consider this a step in the right direction. The Czech Republic now becomes the second country after Slovakia to have a commission for the Roma community. (Lubos Palata, “Czech Republic appoints its first Roma commissioner,” Deutsche Welle, 04 January 2023)
European Single Market celebrates 30 years since founding
On 01 January, the EU celebrated 30 years since the establishment of the European Single Market. The Single Market came into being on 01 January 1993 with the plan for greater integration of the European countries, and ease of business. It also succeeded in the free movement of people, services, goods and capital across the member countries. In 30 years it has been able to drive growth and cultivate healthy competitiveness among the members. The Single Market rules have helped member countries to work together efficiently towards multiple common goals. The press release from the EU Commission lists the coordinated response against COVID-19, the handling of the Ukraine war, the rules for environment, labour, personal data and human rights protection, and the policies for transitioning to a Green Economy as the major achievements. (“European Single Market is turning 30,” ec.europa.eu, 02 January 2023)
NATO debates enforcement of defence spending by member countries
On 03 January, NATO Secretary General Jens Stoltenberg in an interview with the German Press Agency, Deutsche Presse-Agentur spoke out on the fissures among NATO member countries. There is an ongoing debate on tightening the norms to make two per cent of GDP the minimum for defence expenditure by member countries. There are disagreements on how to reach this goal, whether to enforce it or let countries gradually increase their spending reaching the two per cent of GDP target by 2024. The war in Ukraine has pushed this issue to the forefront. Stoltenberg is to lead the negotiations among NATO members as Chairman of the North Atlantic Council. He says, “NATO is there to ensure that a conflict like the one in Ukraine does not escalate beyond Ukraine. For that we need credible deterrence and defense and that is why we need to invest more in our security. As the world becomes more dangerous, we need to invest more to prevent war.” The next summit is scheduled to happen in Vilnius, Lithuania from 11 July to 12 July 2023. The countries supporting stricter regulations are UK, Poland, Lithuania and other Eastern Alliance countries. Germany, Canada and Belgium are viewed as the main opponents to the proposition. (“NATO threatens new dispute over defense spending,” faz.net, 03 January 2023 )
War in Ukraine: Day 315
By Madhura S Mahesh
War on the Ground
On 04 January, Ukrainian Minister of Agrarian Policy and Food Mykola Solskyi announced that the World Bank is providing USD 50 million in aid to boost the energy efficiency of grain elevators. Mykola Solskyi said: “$50 million - this amount will be spent on a program under which all grain elevators can obtain new power generators for a total sum of up to UAH 5 million, or switch to LPG [ boilers].” He added that the cost of a boiler or a power generator will be partly reimbursed.
On 04 January, ABC News published an interview with Ukraine’s military intelligence head Kyrylo Budanov where he claimed that more strikes deeper into Russian territory are likely to take place. In the interview, Budanov did not outline if Ukraine will conduct these strikes and also said that any such confirmation will be done after the war ended. He also spoke about the situation on the ground, dwindling stocks of Russian weaponry, Russia’s nuclear arsenal, and US military aid to Ukraine.
The Moscow View
Claims by Russia
On 04 January, Russian Minister of Foreign Affairs Maria Zakharova dismissed Italy’s role as a mediator between Russia and Ukraine. Zakharova said that Itlay cannot act as a mediator as has taken an anti-Russian stance since the “special operation” began. She added: “It is known that Italy, along with an extensive range of weapons and military equipment, supplies anti-personnel mines to Kiev.” Zakharova claimed that countries are willing to participate in the negotiation talks only for mercenary reasons.
On 04 January, Russian Armed Forces Main Military-Political Department First Deputy Head Lieutenant General Sergei Sevryukov claimed that the attack on Makeyevka happened due to the increased usage of mobile phones on the base. Sevryukov said that the increased usage allowed Ukrainians to pinpoint the location of the soldiers and launched the strike. He also said that the total number of casualties due to the attack has risen to 89.
The Global Fallouts
Implications of the Ukraine war
On 04 January, AP News reported that the increasing usage of advanced drone technology in the Ukraine conflict will usher in a new age of warfare. The article outlines how the prolongation of the war will lead to both sides using advanced drone technologies equipped with AI. Also called “killer drones”, these types of combat drones are being developed by countries to deal with targets effectively and reduce human error. In the Ukraine conflict, while both sides have not used such drones, Ukraine’s Digital Transformation minister Mykhailo Fedorov said that their development is “a logical and inevitable next step.” Countries such as Israel, the US, Turkey, Poland, China, and Russia currently have semi-autonomous drones which require some human interference but all are looking into the development of fully autonomous drones for combat purposes.
On 03 January, UN Secratary-General Deputy Spokesperson Farhan Haq said that the UN has not received any communication from Ukraine regarding Ukrainian President Volodymyr Zelenskyy’s peace summit proposal. Haq said that the UN is not organizing any such summit and said that any further developments will be announced. Haq also said that the recent attacks on Russian soldiers in Makeyevka highlight the importance of bringing the conflict to an end.
"World Bank to provide $50M for power generators for Ukrainian grain elevators,” Ukrinform, 04 January 2023
Britt Clennett, Dragana Jovanovic, and Tatiana Rymarenko “Expect more strikes 'deeper and deeper' into Russia, Ukraine’s spy chief tells ABC News,” ABC News, 04 January 2023
“The Ministry of Foreign Affairs rejected the idea of Italy's mediation in the settlement on Ukraine,” Lenta.ru, 04 December 2023
“Statement by First Deputy Chief of Main Military-Political Directorate of Russian Armed Forces Lieutenant General Sergei Sevryukov,” eng.mil.ru, 04 January 2023
“Poland signs deal to buy 2nd batch of U.S. Abrams tanks,” AP News, 04 January 2023
“Media watchdog: Russian output dominates Latvia's information space,” end.lsm.lv, 04 January 2023
“Speech by Federal Foreign Minister Annalena Baerbock at Portuguese Ambassador Conference,” auswaertiges-amt.d, 04 January 2023
“Macron announces the delivery of French combat tanks to Ukraine,” Les Echos, 04 January 2023
“RUSSIAN OFFENSIVE CAMPAIGN ASSESSMENT, JANUARY 4, 2023,” understandingwar.org, 04 January 2023
Frank Bajak and Hanna Arhirova “Drone advances in Ukraine could bring dawn of killer robots,” AP News, 04 January 2022
“Daily Press Briefing by the Office of the Spokesperson for the Secretary-General,” press.un.org, 03 January 2023