The G7 summit in Cornwall, UK, (11-13 June) ended with a final declaration that highlighted the group’s commitment to rebuild the global economy and fight climate change. The dominant topic was combating the COVID-19 pandemic. The leaders agreed to supply 1 billion vaccine doses to developing countries. Despite clear differences between group members in their approach toward China, U.S. President Joe Biden’s main goal was to strengthen cooperation with America’s democratic partners in the rivalry with China.
The economic rebound in China after the lifting of the pandemic restrictions at the end of 2022 was short-lived and the situation has now been deteriorating for several months, including because of a decline in consumption and exports. The current economic woes are rooted in an intensification of existing problems, including excessive debt, particularly in the real estate sector. The deflation recorded in July this year is indicative of deepening structural problems, including the current, ineffective growth model based on investment and exports. While a deep crisis in China’s economy is unlikely, the accumulation of the challenges will translate into lower growth rates in the coming years.
Slovak support for Ukraine in the war with Russia results from the attitude of the authorities, and not from cross-party or social consensus. The continuation of this policy after the parliamentary elections scheduled for 30 September is uncertain, given the position of the opposition party, Direction–Slovak Social Democracy (Smer-SSD), which is leading in almost all this year’s polls. Specifically, the party announced the suspension of military and political support for Ukraine. This is in line with the pro-Russian sympathies of a large part of society. The possible co-creation of a government by this party would be a challenge for Poland and would further weaken the Central European voice on security and eastern issues.
Russia Turns to "Crypto-mobilisation" to Bolster Forces
Author(s): Filip Bryjka / Language(s): English
Keywords: Russia; Ukraine; war; finances; crypto;
The hostilities in Ukraine are leading to such high losses among Russian troops that replenishing and rotating them is becoming a problem. In order to maintain the occupied territories, Russia is supplementing its combat potential by increasing the number of conscripts and contract soldiers, recruiting volunteers and prisoners, and forcibly mobilising the population in the occupied territories. The ongoing war makes Russia’s existing methods insufficient and the authorities may resume partial mobilisation.
Latin American Lithium Sector is Booming and Attracting the EU
Author(s): Bartłomiej Znojek / Language(s): English
Keywords: Latin America; Lithium; Economy; EU; Policy;
The advancement of the global energy transition is intensifying the competition for access to lithium. Consequently, the significance of Latin American producers of this raw material - especially Argentina, Bolivia and Chile, which have more than half of the world’s proven reserves - is rising, but they differ in their concepts and the pace of exploiting this potential. The EU considers lithium a strategic raw material and seeks stable supply chains for it. To this end, it is strengthening cooperation with Latin American countries, led by Chile, the largest exporter of lithium to the EU, and through other means.
The tightening of Franco-Spanish cooperation reflects France’s search for a permanent ally with similar interests in European politics and the need to ease tensions between the two countries that have arisen in recent years. Signed at the Barcelona Summit on 19 January, the bilateral treaty provides, among others, for closer coordination of the two countries’ energy, industrial and trade policies. Although the treaty was concluded at a time of marked weakening of the Franco-German tandem, strengthening cooperation with Spain will not replace the partnership with Germany, which is a critical factor for France’s European policy.
Identifying the Missing Links in the Energy Transition
Author(s): Zuzanna Nowak,Marianna Skoczek-Wojciechowska / Language(s): English
Keywords: Europe; Green; Energy; EGD; Policy;
Achieving the goals of the European Green Deal (EGD) requires increasing renewables deployment. Meanwhile, as the share of unstable renewable energy sources increases, so does the problem of ensuring the flexibility of power grids. The key challenge for the European energy system is therefore to expand electricity grids, both national and interstate, and invest in the development of energy storage to ensure a balance of demand and supply.
The Baltic States are intensifying relations with Germany, including in the security dimension, despite previous differences regarding, for example, the perception of threats from Russia. The need to deepen cooperation was clearly demonstrated by the Russian aggression against Ukraine and the unstable situation on NATO’s eastern border. Closer cooperation is fostered by a similar perception of EU matters in which the German, rather than the French model of European integration is closer to the Baltic States’. This Baltic-German cooperation will not weaken the current intensity of their ties with Poland.
Justin Trudeau’s government seeks to increase Canada’s influence on security in the Indo-Pacific with the goal of decreasing any possible risks of a crisis erupting and threatening Canada’s economic interests. The country’s engagement in the region will strengthen its position as a key ally of the U.S. However, this will occur at the cost of attention and activity in Europe, which stands in contradiction to its NATO declarations.
July was the authorities’ response to protests against low salaries and other systemic problems in education that have been ongoing for over a year and a half. The failure to resolve them will lead to further tensions, reducing the quality of Hungarian education, increasing social inequalities, causing shortages of skilled labour, and hindering improvements in the economy’s competitiveness. The education system’s problems also open up further disputes with the EU institutions and push back the prospect of Hungary’s access to the reconstruction fund.
The participation of the leaders of Australia, Japan, South Korea, and New Zealand (AP4) at the NATO summit in Vilnius in July this year confirmed that the Alliance recognises the interdependence of the security of the Euro-Atlantic and Indo-Pacific areas. The organisation intends to develop cooperation with the AP4 in cyber-security, new technologies, and combating hybrid threats, among others. Challenges to collaboration include the divergent positions among NATO countries and its Indo-Pacific partners in their approach to China. It is in Poland’s interest to support the Alliance’s cooperation with the AP4 without weakening NATO’s commitments in Europe.
Signing of the RCEP, the World’s Largest Free Trade Agreement
Author(s): Damian Wnukowski / Language(s): English
Keywords: Global Economy; Trade; Agreement; RCEP; Signing;
On 15 November, 15 countries from the Asia-Pacific region signed the Regional Comprehensive Economic Partnership (RCEP), which after ratification - possible in 2021 - will create the largest free trade area in the world. The RCEP is a response to increasing protectionism. It is also an expression of closer integration in the region, as well as a sign of the increasing strength of China and ASEAN in the region, and the weakening of U.S. influence. The agreement is a challenge for the EU, including to the possibility of less trade with RCEP countries as they seek to increase exchange between members of the agreement.
On 15 November, Maia Sandu, representing the pro-European opposition, won the second round of the presidential elections in Moldova. With turnout reaching 55%, she gained 57.7% of the votes, defeating the pro-Russian president, Igor Dodon. The president’s Party of Socialists (PSRM) remains the largest power in parliament and its minority government will avoid pro-European reforms.
On 19 November, the European Commission (EC) adopted its “Strategy for offshore renewable energy. The document confirms the priority of climate neutrality and its subordination to subsequent sectors. The development of the offshore energy industry is to contribute not only to the protection of the climate, environment, and biodiversity but also as an impulse for the pandemic-hit economy.
Fearing U.S. Sanctions, Norwegian Firm Limits Involvement in Nord Stream 2
Author(s): Bartosz Bieliszczuk / Language(s): English
Keywords: USA; Norway; sanctions; Nord Stream 2; gas;
On 26 November, Norwegian firm DNV GL, which provides technical certification and other services for energy infrastructure, informed that because of the threat of U.S. sanctions it will no longer provide some of its services for Nord Stream 2 (NS2). Its decision creates a serious obstacle to completion of the pipeline. Finding a partner guarantying such specialised services and at the same time willing to risk U.S. sanctions poses a challenge that will further delay the unfinished 160 km of NS2 - or in an extreme case, halt its launch.
On 27 November, in an attack on the road to Tehran, Dr. Mohsen Fakhrizadeh-Mahabadi was killed. He was identified by Western intelligence agencies as the head of a scientific team working on a nuclear warhead and weaponisation and engaged in some other secret projects of Iran’s Ministry of Defence and Islamic Revolutionary Guard Corps. The government of Iran accused Israel, specifically its Mossad intelligence agency, and threatened revenge. The killing of the nuclear scientist will complicate the U.S.-Iran negotiations on the renewal of the provisions of the 2015 nuclear agreement, which was likely the main goal of the attack presumably by Israel.
A group of experts appointed by the NATO Secretary General has published a report on strengthening the political cohesion of the Alliance. The main conclusions of the report “NATO 2030. United for a New Era” were presented at a meeting of the Alliance’s foreign ministers on 1 December.
Romania’s Prime Minister Resigns after Surprising Results of Parliamentary Elections
Author(s): Jakub Pieńkowski / Language(s): English
Keywords: Romania; prime minister; resignation; parliament; elections;
Contrary to most pre-election polls, the opposition Social Democratic Party (PSD) won the parliamentary elections in Romania on 6 December. Nevertheless, the National Liberal Party (PNL), which rules the minority government, will probably manage to build a majority coalition. For the first time since the 2004 term, a party of extreme nationalists entered the Romanian parliament.
The pro-government coalition’s win in the elections to the National Assembly (AN) held on 6 December means Nicolás Maduro will resume full control of state institutions. The EU, the U.S., and other countries that recognise Juan Guaidó as interim president are questioning the legitimacy of the elections and will intensify Venezuela’s international isolation. In response, the Maduro government will be enhancing cooperation with Russia and China, among others. Consequently, the option to resolve the political conflict in Venezuela through negotiations between the government and opposition, as promoted by the EU, will drift away.
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