© REUTERS/Ayman Al-Sahili

In early April, military commander Khalifa Haftar advanced on Tripoli, ordering a “victorious march” into the city. Three months later, with hundreds dead and almost one hundred thousand people displaced, UN Special Representative Ghassan Salame warned that this is ‘‘just the start of a long and bloody war.”

Indeed, the risk of even greater instability and suffering in Libya is very real, and the EU should be greatly concerned. From Libya, instability could spread, strengthening extremist groups across the Sahel, and leading to a new migration crisis. In short, Europe’s security is at stake, but the Europeans once again are uncoordinated, indecisive, and ambiguous.

The roots of the conflict lie in the fragmentation of Libya’s government and institutions in the years following the fall of Muammar Gaddafi in 2011. In December 2015, the UN brokered an agreement to set up a unity government, the Government of National Accord (GNA) in Tripoli, led by Faiez al-Serraj. However, the GNA never managed to assert its authority. It struggled to provide even basic services, existing side by side with numerous militias and a rival government in the east of the country, which was controlled by Haftar, who had returned from US exile.

On the Phone with Trump

International diplomacy continued to focus on crafting a unity government that would have included both Haftar and Serraj. A “national conference” was planned that was to forge a broad consensus. Negotiators were ready to give Haftar a dominant position as head of Libya’s armed forces on the condition that he place himself under civilian authority. Haftar engaged with these efforts while consolidating his power in the east by co-opting local actors and promising stability. He was backed by the UAE and Egypt, who supported him largely because of his strong opposition to the Muslim Brotherhood, and to a degree also by France and Russia.

On April 4, Haftar finally made it clear that he wasn’t interested in a compromise. He launched his offensive on Tripoli only two weeks before the national conference was supposed to convene—and while UN Secretary General António Guterres was in the city.

The fighting in Libya is unlikely to wind down quickly; there has been little movement on the front lines in recent weeks. External powers are increasing their support for both sides, giving them the means to continue fighting and strengthening their resolve. The UAE, Saudi Arabia, Egypt, and Jordan are supporting Haftar’s offensive with a mixture of cash and weapons. Meanwhile, there is evidence that Turkey and Qatar have been providing weapons to the GNA, both opportunistically and because many of its supporters are aligned with the Muslim Brotherhood.

The United States has taken an ambiguous stance. In mid-April President Donald Trump spoke to Haftar on the phone and expressed support for his efforts to tackle terrorism. The move appeared to reverse the US’s previous backing for the GNA and was interpreted as a green light for Haftar to go ahead.

Passive Europeans

Meanwhile, Europe has essentially limited itself to issuing statements. Its naval operation Sophia, mandated to counter trafficking and implement the UN arms embargo on Libya, no longer has any ships at its disposal after a spat between Italy and other member states. The EU has condemned the assault by Haftar’s forces, identifying it as the origin of the current bout of fighting, and called on “all parties to immediately implement a ceasefire.”

But it has has refrained from supporting the GNA or even identifying it as Libya’s legitimate government. France’s stance has been particularly ambiguous: in April, it stalled a UK-drafted UN resolution condemning Haftar’s offensive. Paris also blocked an EU statement which would have singled out Haftar’s offensive for criticism.

Europe can ill afford to take a backseat role in Libya. Halfhearted calls for a ceasefire won’t stop the fighting. There are few incentives for either side to lay down their weapons: the GNA fears that a ceasefire could strengthen Haftar by allowing him to maintain recent territorial gains. Meanwhile, the commander himself has gone for broke, destroying the peace process and alienating many who were previously open to accommodating him. Haftar appears to believe that accepting a ceasefire would be a sign of weakness that would harm his reputation.

Repercussions

Meanwhile, the conflict in Libya risks triggering a new migration crisis. Over the past years, the EU has managed to essentially halt migration flows from Libya by providing funding to Libya’s coastguard and assorted militias―despite their involvement in abusing migrants. It is not difficult to imagine migration flows to Europe increasing again if the fighting continues, both because militias will be less able to stop migrants from leaving and because more Libyans will try to flee the violence in their country. The conflict will also increase the very high risk of abuse for migrants currently mired in Libya.

The longer fighting goes on, the more destructive it is likely to be, and the harder it will be to achieve any kind of reconciliation between different factions. If Haftar prevails, many Libyans are likely to continue to oppose him, and he is unlikely to gain full control over the country. Moreover, Haftar is 75, so the problem of succession would soon present itself. Yet any fragmentation of Haftar’s forces would also lead to a power vacuum.
Either scenario spells further instability. The risk that extremists will take advantage will increase: despite its defeat in 2016, the so-called Islamic State is still active in Libya and has carried out attacks on government institutions. The situation in Libya will also further destabilize the Sahel region which would have major repercussions for Europe.

Europe Needs to Act

For years, behind a thin veneer of unity, Europeans have failed to agree a coordinated approach to Libya. France and Italy pursued competing and ultimately unsuccessful approaches to stabilizing the country. Tensions between French President Emmanuel Macron and Italy’s euroskeptic government have made it difficult for Paris and Rome to defuse their differences.

But now, with stakes so high, Europeans have a responsibility to halt the escalation of the conflict and prevent further suffering. At a minimum, they should provide Operation Sophia with sufficient assets to enforce the UN arms embargo on Libya. Ideally, they should persuade the US that its interest in a stable Libya is best served by getting Haftar to agree a ceasefire. Together, the EU and the US could enforce the arms embargo, perhaps through a NATO operation. This would prevent further escalation and push Haftar and the GNA towards an armistice. A stable and unified Libya would still be a distant prospect, but with a ceasefire in place, diplomacy could restart, giving Libyans a chance to finally build a consensus about the country’s future governance.

The post Missing in Libya appeared first on Berlin Policy Journal - Blog.

© REUTERS/ Remo Casilli

The dust has settled, and a coalition of the League and the 5 Star Movement is governing Italy. Many European commentators have greeted the new government with shock: They worry that Italy will put the eurozone at risk and act as a spoiler within the EU, blocking other countries’ attempts to reform the union and undermining European unity on Russia.

These fears are probably overblown. The friction between Rome and Brussels is likely to be manageable for the time being, in part because domestic politics and international financial markets will constrain Italy’s freedom of action.

But this is not a reason for the EU to be complacent. If the EU does not do more to convince Italians that they benefit from the EU, the chances of Rome becoming more confrontational, and of an Italian exit from the euro or the EU will increase in coming years. This would be a disastrous development for Brussels.

Why do other member-states have concerns about Italy’s new government? The first issue is the new government’s economic program. The coalition has promised a series of tax cuts and increases in social spending, which if implemented would increase the deficit to around seven percent of GDP, breaking a host of EU rules and forcing a showdown with the Commission. But it is very unlikely that the government will even try, let alone be able, to implement such a radical program. A fiscal expansion of such magnitude would panic financial markets, raising the yields on Italy’s debt and hitting Italian banks hard. If financial crisis loomed, Italy’s government would likely step back from the brink. It relies on a small majority in the upper house and could be replaced if MPs defect.

The Five Star and the League know this and have already staged a climb-down. It now appears that the planned tax cuts will unfold over time, while the promise of a universal basic income has turned into a promise of an enhanced unemployment benefit limited to two years. In reality, both may never happen. Instead of embarking on a collision course with the markets and the EU, Rome is much likelier to simply run a slightly higher deficit, in the order of 2.5 to 3 percent of GDP. This would violate the EU’s Fiscal Compact, which mandates small ‘structural’ deficits (deficits adjusted to economic cycles) and speedy debt reduction—allowing coalition leaders Matteo Salvini and Luigi di Maio to celebrate Italian liberation from the ‘diktats’ of Brussels. But it would not panic international bond markets.

In fact, the key problem presented by the new government in Rome is not its economic policy as such, but that it will make reform of the eurozone more difficult. For the 5 Star Movement and the League, stricter European oversight of national governments’ financial and fiscal policies is a non-starter. Yet such oversight is precisely what Germany and northern member-state demand in exchange for deeper risk-sharing in the EU. They will not trust this Italian government to carry out significant risk reduction in its banking system. As a result, any move towards banking union will be slowed down.

Aside from economic policy, analysts are concerned about the new government’s foreign policy, particularly its position towards Russia. The Five Star and especially the League are friendly towards Moscow. In his inaugural speech PM Giuseppe Conte called for a ‘revision’ of sanctions. Italy’s stance, combined with the relative rapprochement between the EU and Russia prompted by Donald Trump’s trade tariffs and withdrawal from the Iran deal, has raised the possibility that the EU could ease sanctions over the next year. However, Italy is unlikely to push for a removal of sanctions by itself. Doing so would drain political capital that Rome would rather use in the economic sphere, where it could be tempted to use the threat of vetoing sanctions as leverage. Instead of attempting to ease sanctions, it is far likelier that Italy will attempt a balancing act, seeking to maintain EU unity while also boosting political and trade ties with Moscow. Many Italian politicians, of all stripes, do not see this as a contradiction—and point to Nord Stream 2, the controversial pipeline that will bring Russian gas to Germany, as evidence that other member-states have long been practicing this.

This Italian government will also be friendlier towards the Trump administration than many in the EU. Rome will probably seek to use its foreign policy influence to prevent or limit escalation in the transatlantic trade war. At the G7 meeting last week, the Italian PM expressed his skepticism about escalating the ongoing dispute with Trump. Italy is not the only member-state to doubt the wisdom of escalating the spat with the US: Germany has also taken on a softer stance than France. And other states, such as Poland and the Baltics, have sought to maintain good relations with Trump because of their reliance on the US for deterring Russia. They, too, are likely to shy away from further escalation, giving Italy some allies.

In essence, Italy is unlikely to act as a spoiler. While Rome will argue with Brussels and work to soften Europe’s stance towards Russia and the Trump tariffs, it almost certainly will not pursue radical economic policies incompatible with euro membership or seek to remove all sanctions on Russia.

The EU’s job: Compromise with the Italians

But in the medium-term, things could get worse. Brussels should not be complacent about Italy. Italians feel the EU has abandoned them in the eurozone crisis and the migration crisis. They have become much more critical of the EU than they were prior to 2008: The latest Eurobarometer survey shows only 44 percent think EU membership has benefited Italy.

The EU should try to work with the government in Rome. It should allow Rome to slightly raise spending—especially if this comes in the form of investment—and thereby secure a symbolic victory over Brussels. As things stand, it appears that the EU will open ‘an excessive deficit procedure’ in response to increased Italian deficits. The procedure would monitor the Italian budget and suggest corrections to Italian finances. The political impact of this familiar move could be contained: Spain is still in the procedure, while France was in the procedure from 2009-2018 and escaped Commission fines. But if the EU ends up issuing Italy a fine, it will merely reinforce the idea that the EU dictates Italian policy, and encourage the Five Star and the League to lash out and espouse more uncompromising positions. A small fiscal expansion may even have the effect of boosting growth and lowering the overall debt/GDP ratio.

The EU should also step up its efforts to help Italy manage migration flows. So far, the EU has focused its efforts on reforming the Dublin regulation, which stipulates that the first member-state an asylum-seeker enters is generally responsible for determining that person’s asylum status. But reform has stalled. It is difficult to imagine that member-states will be able to agree on a relocation scheme of a sufficient magnitude to take the pressure off frontline countries. Additionally, the Dublin-centric approach does little to address factors that push people to migrate, and the difficulties that member-states have in returning rejected asylum-seekers to their countries of origin. A better way for the EU to show solidarity with Italy would be to put money on the table to persuade African countries to sign agreements to take back their citizens. It should make available funds of the same order of magnitude as the €6 billion already pledged to Turkey.

If the EU does not do more to convince Italians that the EU benefits them, Italians are likely to become even more euroskeptic – to the extent that leaving the euro would no longer appear unthinkable. If Italy defaulted and left the euro, the ensuing financial crisis could lead to the unravelling of the euro, and fracture the EU.

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