@bueti Describe the state of the #EU, please. #i140c

@berlinpolicy State of the #EU, described with just 1 word: Bad. Described with 2 words: Not bad. Confused, but more resilient than it seems

@bueti What are the continent’s biggest #problems right now?

@berlinpolicy 2 biggest: not realizing a) that the multiplicity of crises engulfing the EU is the “new normal”, b) how strong we still are

@bueti Your message to the Brits pondering #Brexit?

@berlinpolicy Leave 1 union & lose 2, plus special relationship with the US; cut loose from continent, and you’ll be more dependent on it

@bueti And how are Europe’s #Greens doing?

@berlinpolicy #Greens serve in 4 nat’l gov’ts, in 22 nat’l parliaments, in 15 regional gov’s; Green presidents in LAT & AUT. 6th group in EP

@bueti Do you regret #German #Greens not entering a coalition with Chancellor Angela #Merkel back in 2013? #missedopportunity

@berlinpolicy Not at all. Merkel wasn’t willing to offer a fair partnership, she wanted greenwashing. She has until next year to reconsider

@bueti You are a close #US watcher: What’s the real meaning of @RealDonaldTrump?

@berlinpolicy Status quo is broken, it’s reform or insurgency. Establishment doesn’t get it. Only Sanders could safely defeat TheDonald

@bueti Your first interest in #China coincided with #culturalrevolution. Any #regrets from wild communist student days?

@berlinpolicy My 1st interest in China was motivated by the Chinese language. Maoism followed. Regrets? Of course. And lessons learned

@bueti Did you own #Mao’s little red book? Any favorite quotes?

@berlinpolicy Sure. Both editions, with & without Lin Biao’s introduction. The most famous quote: “Rebellion is justified.” That was dope

@bueti What’s your take on today’s #China?

@berlinpolicy Mao’s dictum still applies: “A spark can light a prairie fire.” The CPC knows that – and still can’t run away from it

@bueti You’ve been an #MEP since 2009. Your best experience?

@berlinpolicy Beer, French fries and chocolates. And having at least 2 friends in other political groups 4 every enemy in my own.

@bueti And your worst experience as a Member of the European Parliament?

@berlinpolicy The beer, the French fries and the chocolates.

@bueti You’ve seen the likes of @MLP_officiel and @Nigel_Farage up close in the #EP. Impressions?

@berlinpolicy When they speak in plenary, they don’t speak 2 the house, but 2 domestic audiences. Use EP as a platform while denouncing it

@bueti What’s on your #desk that may surprise us?

@berlinpolicy A statue of St. Ivan Rilski, patron saint of Bulgarian miners. Podium Passes from the 2000/’04/’08 US Dem National Conventions

@bueti What’s easier – uniting Europe or German #Greens “fundi” and “realo” wing?

@berlinpolicy Europe is obviously bigger challenge, there are not only fundis and realos, but nationalos, banalos, brutalos and federalists

@bueti How do you relax?

@berlinpolicy I can’t relax, now that you make me think about it.

@bueti Your favorite #soccer (ie. football) metaphor in politics?

@berlinpolicy My favorite sports metaphors are from baseball. “Step up to the plate.” “Throw a curve ball.” “Hit it out of the ball park.”

@bueti Who wins @UEFAEURO, and why? #i140c

@berlinpolicy Hollande needs it the most. Renzi wants it the most. A German victory would be hated the most. Maybe neutral Switzerland?

The post In 140 Characters: Reinhard Bütikofer appeared first on Berlin Policy Journal - Blog.

Responses in Germany and the United States: The proposed Transatlantic Trade and Investment Partnership is …

Source: Bertelsmann Foundation

We have to keep increasing the trade and investment that supports jobs, as we are working to do between the United States and the EU.” So said US President Barack Obama at the April Hanover Fair, in a speech that is already being treated as the opening stanza to the swan song of his presidency. There was no mistaking what he was referring to: outside, 50,000 protestors had gathered to express their disapproval of the Transatlantic Trade and Investment Partnership, or TTIP, still in negotiations. Its success or failure will likely be one of the final achievements – or frustrations – of his time in office.

Yet the battle looks to be increasingly uphill, at least in Germany. While 55 percent said the agreement would be a “good thing” for Germany back in February 2014, that support has eroded sharply. In an October 2015 TNS Emnid survey, a 46 percent plurality said TTIP would be a “bad thing,” compared to only 34 percent who were still in favor. Meanwhile, in a Bertelsmann survey conducted in February of this year, 33 percent of Germans said it would be a “bad thing,” compared to 17 percent who said it would be a “good thing.”

What has caused this decline? The problem is not fundamental opposition to trade with the United States: the same Bertelsmann survey found that 61 percent of Germans think increased trade with the United States would be desirable. In fact, Germans were eager to increase trade with a variety of partners – two thirds would like increased trade with Japan, three fourths would like increased trade with France and the United Kingdom, and slim majorities would like increased trade with China and India.

Instead, the source of their concern seems to be an expectation that the deal will inevitably lead to lower environmental and safety standards for products sold in the European Union. Germans were split when they were asked about the effects TTIP would have on economic growth, employment and labor conditions, international competitiveness, and Germany’s global influence; but strong pluralities said the effects on consumer protection (48 percent), environmental standards (46 percent), workers’ rights/social standards (40 percent), and regulatory sovereignty (37 percent) would be negative.

“It has to do with the realization that TTIP is a new type of trade agreement,” says Christian Bluth, one of the authors of the Bertelsmann survey. “This is less about lowering already low tariffs; this is about regulatory harmonization.” Indeed, Germans seem to have little trust in the United States’ regulatory regime. When asked if they trusted EU or US standards more in a variety of areas, Germans expressed an almost universal preference for European standards – 69 percent had more faith in European food safety standards, 59 percent in European data privacy standards, 66 percent in European environmental safety standards, and 56 percent in European aviation safety standards. “Anti-Americanism might play a minor role” in opposition to TTIP, says Bluth. But more importantly, “Trust in American standards is not very high.”

Conversely, it is worth noting that Americans do not have this same faith in their own standards: only 37 percent expressed more confidence in American food safety standards, along with 27 percent who preferred American data privacy standards, 31 percent who preferred American environmental safety standards, and 33 percent who preferred American aviation safety standards. Americans are none too happy with this state of affairs: 76 percent would like American standards to move closer to those of the EU, compared to only 45 percent of Germans who would like EU standards to move closer to those of the US.

And while other Europeans may be willing to compromise for the sake of economic growth, Germans may simply feel that, living in one of the EU’s strongest economies, they do not have enough to gain. A 2015 Eurobarometer poll showed support for “free trade and investment agreement between the EU and the US” hovering at 56 percent continent-wide, with France (50 percent), Poland (66 percent), the United Kingdom (62 percent), Italy (55 percent), and Sweden (60 percent) in favor. Germany and Austria were among the few opposed (59 percent and 70 percent, respectively) – two economically well-to-do countries with powerful Green parties.

But there is a silver lining, in the sense that there are still many people on both sides of the Atlantic who have yet to make up their minds. A third of Germans told Bertelsmann that they have not yet heard enough about TTIP, and a further 13 percent said that they did not yet know if it would be good or bad. In other words, there is still room for an improved information campaign. “For the opponent, it’s very easy right now to voice fears,” says Bluth, “while if you’re the proponent it’s difficult to dispel those fears.”

If Obama wants to conclude the deal before his time in office runs out, there is still time – but those inside the trade shows and convention halls may be the wrong audience.

Read more in the Berlin Policy Journal App – May/June 2016 issue.

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© REUTERS/Kai Pfaffenbach

Last year Germany had to cope with the arrival of an estimated 1 million refugees and migrants. What is the state of play since the recent EU-Turkey agreement? The EU-Turkey agreement had three main objectives. First, we wanted to reduce the numbers – not least because the eastern Mediterranean had turned into one of the most dangerous refugee routes. Second, we wanted to replace the hazardous route by legal routes. Third, we wanted to improve the situation for refugees in Turkey.

What have we achieved so far? The numbers of refugees coming to Greece are low now. Since April 4, an average of 70 refugees per day have been arriving on the Greek islands, compared to four-digit numbers in the months before. Why have the numbers dropped? Because people have taken our messaging seriously now. They believe we mean what we say.

The very high numbers of last summer and fall were the result of people feeling it was their last chance to reach Europe. Ever since Hungary started building its fence, people thought: “This will not go on forever. They will close the borders.”  People were afraid of missing the boat, figuratively speaking, even though it wasn’t leaving.

You said people are taking your messaging seriously now. What are you telling them? Our message is: “Don’t take this route. You’ll be returned. And you forfeit your chance to come by a legal route.” They take that seriously. Fewer people are coming to Turkey. Word has spread that the Aegean route is not the way to go anymore. And we’re not seeing Syrians, Iraqis or Afghans going to Egypt or Libya to take the central Mediterranean route instead. It is basically only Africans that take the central route.

The second point is the opening up of more legal routes, which hasn’t really got going because the legal proceedings on the Greek islands haven’t yielded final decisions yet – they are starting to come only now, and slowly. The EU-Turkey resettlement mechanism can only start once the asylum proceedings have been concluded and people are returned to Turkey who have been denied asylum. This in turn will trigger the resettlement process with Turkey. (Under the terms of the EU-Turkey agreement, in exchange for every Syrian being sent back to Turkey, the EU will accept a Syrian refugee presently living in a camp in Turkey. Once irregular crossings are ending, a Voluntary Humanitarian Admission Scheme will be activated. Eds.) We have resettled people in the past. It’s an onerous process because the administrative procedures, which include Turkish authorities and the UNHCR, are not very swift and effective. But I’m convinced that it will work.

As far as the third objective – improving conditions for refugees and migrants in Turkey – is concerned: Turkey has promised to grant the right to seek asylum not only to Syrians but to all other refugees and migrants. This hasn’t existed before because Ankara isn’t party to the relevant protocol of the Geneva Conventions. I would call that an improvement – for migrants, Turkey, and Europe.

Hasn’t Turkey’s help been bought dearly? And did Ankara really help that much? Yes, it did help. And isn’t criticism of the agreement leveled against other dossiers and areas of policy rather than the treatment of refugees? If so, I would ask you, “In what way do these other areas of policy affect the improvements for refugees and for routes?”

Well, that is the big question. Critics ask if the EU hasn’t sold out to a country on the path to autocracy. What’s your response? That’s unjust criticism – we haven’t sold out, we reached an agreement. I would turn the question around and ask: “Are you against improving the situation of refugees? Are you against providing legal routes? Are you against ensuring there will be no more people dying on the eastern Aegean route?”

How are you monitoring the situation on the ground? Is there a EU presence? The UNHCR is in charge of organizing the resettlement process and providing material help. The UNHCR is very strong in Turkey. Also, there are numerous NGOs. And we have set up a European structure in Turkey that will oversee and monitor implementation of the agreement. It’s an operation that will grow, led by the EU support group in Turkey.

If we look at who’s been arriving, we’re also talking about people from Afghanistan, Pakistan, and sub-Saharan Africa. We are surrounded by countries in different states of fragility. In what way are we prepared for that? The biggest potential for migrants arriving is now via the central Mediterranean route. There’s huge migration potential from Africa. Most of the people who choose the central Mediterranean route come from sub-Saharan Africa. But I don’t foresee the soaring numbers we saw last year in the Aegean. They were so high because it was easy to take the Aegean route — and both Turkey and Greece did little to prevent this. The central Mediterranean route is much more hazardous and more expensive. In the first three months of 2016, we saw considerable increases compared with last year, when some 10,000 people came from January through March. This year it was 19,000 in the same period. And in April, the numbers nearly halved, to around 9,000. In April 2015 16,000 had arrived. In short: there is potential, but the opportunities are more limited. Also, most people coming via that route are not refugees, they are migrants.

Would a European immigration law also help? The continent needs migration, but perhaps in a more structured, organized way. Exactly. We need migration, but we want to steer and manage it ourselves. I am not talking about refugees here – they are entitled to protection, there is no room for discretionary power. With regard to migration, there is; and we should use it and decide for ourselves what migration we want. If you’re asking if it wouldn’t be right to offer more legal routes, my answer would be yes.

I think we have to do much better migration marketing. It’s quite easy to come to Germany if you have a university degree. You can either indicate that you already have a job or apply for a visa to look for one. That’s easy, but few people know about it.

How do you see the chances of saving the Schengen regime of passport-free travel while protecting Europe’s external borders? Schengen was based on the assumption that the EU’s external borders would be protected. And the system imploded when the external Schengen countries didn’t protect their border sufficiently anymore.

They didn’t receive much help from countries like Germany. I don’t agree, we did help them through European structures like Frontex. The “Dublin system” places responsibility for handling asylum cases with the first country of entry. This was intended as an incentive for securing the EU’s external borders. Few people remember this today. In hindsight it may seem unfair to place all of the responsibility on Italy or Greece. But we accepted open borders because these countries were supposed to protect their external borders. Now that the Schengen system is being challenged, other European countries need to take greater responsibility. But I can tell you that the countries with external borders get quite impassioned when it comes to accepting outside involvement in border issues.

The common asylum system was put in place under the assumption that we would have comparable procedures and benefits in the different EU member states – none of which emerged. On the contrary, we have seen a race to the bottom in a number of European countries that wanted to make sure that by offering insufficient conditions, they wouldn’t receive many of the arriving refugees.

As with Schengen, we renounced national autonomy of action based on the expectation that convergence would follow. Now if that’s not the case, what’s the conclusion? We’ll have to secure greater European responsibility.

Germany alone has housed an estimated 1 million newcomers. How did you manage? What kind of infrastructure was put in place? Until last summer, we had several thousand migrants per week, arriving mostly from the western Balkan countries. That was manageable because we knew it would be comparatively easy to return them. Then the composition of the influx changed entirely – and exploded by August 2015. At one point we had 12,000 people arriving every day. Because the German federal states were no longer able to organize their transportation and distribution, the federal government took over.

This worked out quite well. We had teleconferences twice a day with our colleagues on the state level. We organized beds, rooms, and institutions that would take in refugees. We organized buses and trains. It worked out because everyone worked hand in glove, with non-state actors also assuming a huge role. It produced a shared sense of solidarity – that we were in this together. I initially expected the states to be pitted against the federal government, but it didn’t happen.

Were the events of New Year’s Eve — the mass sexual assaults on women in Cologne — a game-changer? They didn’t alter the sense of solidarity, but they highlighted how big the task is. After all, we are welcoming very heterogeneous sets of people from very different countries with very different experiences and views on the role of state, of women, of values and other religions. Many of them are traumatized. We have the huge task of providing shelter, education, access to the labor market, and language skills. But making them want to be part of our society and embrace our democracy will be the most important task.

Could you outline your approach? Obviously, people who seek protection in Germany will have to learn German and start working as fast as possible; these are key to integration. We’ll have to make sure they can go to school and get equal opportunities.
But what I find most important is to make them part of our society and immunize them against “identity politics” used by those that use alienation as a political weapon. For instance, Salafists approach many of the refugees telling them that being different is their identity, that they shouldn’t accept democracy, tolerance, and respect for women or other religions.

Some politicians fuel it. Yes, some do. And I think that’s dangerous because certain segments of society may radicalize and turn out to be a high risk factor.

The so-called Islamic State has tried to turn Europe against refugees: Europeans are supposed to have terrorists in mind when they think of refugees. Precisely. This was clearly their intention when they sent two future Paris suicide bombers, who took part in the attacks of November 13, on the Aegean route. You see, IS didn’t need to send in terrorists. They have a reservoir of radical Islamist personnel in France, Belgium, and Germany, too. And what’s interesting: the two suicide bombers who came in with the refugees were accompanied by others. They were equipped with forged passports from the same source. And they arrived on one of the smallest Greek islands, where they got themselves registered. At the time, no one wanted to get registered, but they did so again in Serbia, then in Croatia. The message IS wanted to send was: We can do it. It was supposed to instill fear of, and mistrust against, those in search of shelter and protection.

How do you communicate to refugees that they are welcome here while rightwing populists, like the Alternative für Deutschland (AfD), say exactly the opposite? Not doing so risks antagonizing many, with dangerous polarization as a result. Up to 70 percent of the newcomers are Sunni Muslims. By now, about 40 percent are under 18. If you approach them by saying they don’t belong and never will, then I think there is a considerable danger they might turn to those who profess to guide them – against the political pillars and values of democratic society. I believe that integration is a two-way street. Both the newcomers and also the receiving society will have to change. At the same time, we have to stand for what we believe is important and what we cannot renounce.

We have witnessed Willkommenskultur in the sense of an immense number of people working in shelters for weeks on end, helping refugees, inviting them to their homes. Has it changed German society? It was incredible, something to be truly proud of. But it is only part of the picture. The other part of the picture are attacks on asylum shelters and asylum seekers. In 2015 we counted over 1,000 incidents; the year before it was about 200. We see the emergence of right wing terrorist action. At the same time the boundaries between the rightwing fringe and mainstream conservatism are getting blurred.

Have you left crisis mode? We are all on guard.

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Refugees arriving at Munich’s main train station in summer 2015 were greeted with applause. The whole nation seemed to embrace the newcomers. Then the mood changed. Sociologist HEINZ BUDE explains why.

© REUTERS/Fabrizio Bensch

The mood in Germany changed markedly around the turn of the year. How did we get from a cheery atmosphere of Willkommenskultur to hand-wringing and fear? The crucial event was New Year’s Eve. [Women celebrating on the streets of Cologne and a few other cities were attacked, robbed, and sexually assaulted by large gangs of men of mostly “North African appearance.”] Three points came to a head with this event.

First, a lot of people realized that we have to think a little bit more about the people coming to us, how we view them. Most of the refugees and migrants have escaped very dire situations and are now trying their luck in Germany. Now we have seen that some of them are doing so in ways that are rather unimpressive.

Second, there is a difference between people coming from Turkey and those from Arab countries. Germany is experienced as far as migration from Turkey is concerned – there is a sizable group of Germans of Turkish descent now. But do we have experiences with people coming from Arab countries? We realized this was a new challenge.

Third, we started asking why we were so isolated in Europe as far as our position on refugees was concerned.

Those thoughts were rarely articulated openly. People had doubts. And something very interesting happened. Those who had been silent before – those who were anti-Willkommenskultur, but convinced that there was a majority who thought differently about the newcomers – started saying: “Now you see what’s happening; the newcomers are exactly what we feared.” The German pollster Elisabeth Noelle-Neumann used to speak of the “Schweigespirale”, the spiral of silence. People are reluctant to voice their opinion if they think theirs is the minority position. But now those in the Schweigespirale form new communities online, and they are no longer silent; they are still not very loud, but they have turned up the volume.

You mean those of a welcoming disposition got quieter, and those who had always harbored doubts became louder? Exactly. And from that, the political questions arose: Did Chancellor Angela Merkel really do the right thing? More and more people have started to ask: Is it okay to be dependent on Turkey? Why do the French behave so differently? Why do the Swedes behave so different? Suddenly the Germans felt very alone. It was something we had experienced when we were dealing with Greece and the eurocrisis, but this time was very different.

It felt like a huge mood swing. Does it suggest that the Willkommenskultur wasn’t very well established, and was perhaps a fleeting phenomenon? It might stem from the fact that many in Germany think: “Maybe we are the reluctant hegemon of Europe; maybe we are the country that rules Europe.” We did show the Greeks how to solve their problems. And if we are the new leading country in Europe, then we have to be a little more open-minded, a little more generous. This was the original feeling.

But once doubts set in – well, we have a weakness for having doubts. And that changed “the mood”; I would actually prefer the German word “Stimmung,” because Stimmung is subjective and objective, both mood and atmosphere. It transformed into something more unstable, which means that today it really is impossible to say what the dominant Stimmung in Germany is. We are somewhere in the middle between Willkommenskultur and a culture of doubt.

What are the components of this culture of doubt? Is it also fear of change in general? Globalization is hitting us in different ways; modernity is constantly changing society. At the same time, we are experiencing a rise of contempt for elites, for those making decisions “over our heads.” No, it’s something different. The whole German narrative has radically changed. Our whole model of production changed, and the composition of the population changed – and not only in a quantitative sense, but also in a sense of who has a voice and who shapes the debate.

But while the story of the majority of Germany’s middle class is a success story, there are pockets of bitterness – especially within that middle class, among people who aren’t necessarily disadvantaged economically but who feel that their voices are no longer heard. They think the story told every day is no longer their story.

And that is where hate comes in. Hate has something very special; it’s an affect that gives you a sense of autonomy, having a voice. Those people don’t subscribe to the notion of a success story. They are thinking along the lines of: “I couldn’t say that everything is wrong with my life, but I don’t share the story that says that we are now the leading country, everything is going well in Germany, that’s not my story.” They haven’t dropped out in the sense that they’ve lost their jobs, but they have lost the recognition they were accustomed to. You’ll find them in Eastern Germany in particular, where you can identify them very precisely. Social scientists speak of “relative deprivation.” And our findings are that they stand for about ten percent of the German population.

What could turn the Stimmung in Germany again? Almost everything depends on what steps Angela Merkel takes, because she is the new figure of hate for many people.

Is she good at reacting to moods? Yes, in a way. One of her recent interviews was very interesting. It was a sort of reaction to the Stimmung. She said something like “I know we do have a polarization of Stimmung in Germany. And I know it’s a huge task. But look at me, I’m trying to do what is needed and I’m not feeling weak. I’m calm, I’m doing my job.”

But now she has to admit that it is a little bit more complicated. She has to communicate to the German public not necessarily that she has made mistakes, but to say something like: “I cannot do it alone. You have to help me.” That would be a very good intervention addressing the Stimmung. I don’t know whether she is able to do that, because many in her party will be ready to act on that and put her out of the game. But she needs to demonstrate stability and to be seen closely cooperating, especially with her Christian Democrats’ sister party, the Bavarian Christian Social Union (CSU) led by Horst Seehofer, her sharpest critic in the refugee question. It’s also about reassurance. If she fails to do this, I cannot see her winning the next election.

How about on the European level? Do we need, in order to change the Stimmung a bit, a European reassurance that we can make it on a European level, that Europe stays united and will do its best to find a solution? I fully agree. I think the Germans have to admit that they need their neighbors. I think – and people in Germany are feeling it, too – that the EU’s problems are severe. The United Kingdom may be leaving – it’s a real possibility. And there’s a feeling that something is going wrong in France; and Greece was a farce, to tell the truth.

Therefore, Germany has to try and establish a new European policy, saying that Germany is aware that it is dependent on its neighbors. It seems the other European countries are waiting for something like this; it would lead to a new atmosphere of cooperation in Europe, making it easier for Germany to take the lead.

Wouldn’t Germany also need to learn to distinguish between legitimate criticism that you should take into consideration, and criticism that is sometimes harsh but expresses something else – in short, a much more relaxed attitude toward criticism from other European nations? Yes. At the same time, it should be our duty to point out our existing problems. We have real economic problems in Europe. We have real problems with the organization of a collective will in Europe, and maybe it’s time that we returned some competences from the EU to the member states. Why not? But such initiatives have to come from Germany; that, I believe, is the prevalent feeling around Europe.

Read more in the Berlin Policy Journal App – May/June 2016 issue.

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Paris views the refugee crisis through a different lens than Berlin. It only reluctantly accepted it as a European – rather than a German – problem and feels it is doing enough on other fronts to address it.

© REUTERS/Philippe Wojazer

While the refugee crisis has been shaping German politics for a year now and making considerable demands on the country’s social and political forces, it seems to have had little effect on France, Germany’s closest European partner. It is important to note that the situation is not the same on both sides of the Rhine, though: only 70,600 applications for asylum were filed in France in 2015, compared to 441,800 in Germany, according to Eurostat; and while the number of asylum seekers did increase in France in 2015, it was only by 20 percent compared with the previous year.

This factual asymmetry is coupled with an asymmetry in the way the crisis is perceived, giving rise to considerable differences in interpretation. This is reflected in the vocabulary of public debate: rather than the “refugee crisis” discussed in Germany, the French tend to speak of a “migration crisis” or a “migrant crisis.” …

Read more in the Berlin Policy Journal App – May/June 2016 issue.

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With the Macedonian border closed and the EU relocation mechanism making slow progress, thousands of refugees are stuck in Greece. The government is doing what it can – with limited means.

© REUTERS/Alexandros Avramidis

It’s only April, and already the port of Piraeus is sweltering. The rest of Athens hovers around the comfortable mid-20s Celsius, midway through the first month of a typical Mediterranean spring; but here, with little shade save for the scattered warehouses and docked cruise ships, it feels twenty degrees warmer, a draining summer come early.

Since February, thousands of refugees – mostly from Syria, Afghanistan, and Iraq – have turned the port into a makeshift camp. The first who arrived intended to stay only a few days. They were coming from the islands, from camps in Lesbos, Kos, Samos, and Chios; the port was one stop along a route that typically stretched from Syria or Iran through Turkey, and would continue north through Macedonia and the Balkans, ending in one of the more hospitable European countries further west – Germany, ideally.

Now, many of them are stuck. The so-called “Balkan route” is closed, leaving 52,000 refugees stranded in Greece. Many are awaiting spots in other European countries under the Emergency Relocation Mechanism; others have decided to apply for asylum within Greece itself. As of April 21 the UNHCR counted over 3200 people living at Piraeus, a site with an official housing capacity of zero.

The camp is calm for the moment – Anne Wollter, a volunteer from Sweden, says that conditions have been relatively good in general, and that volunteer organizations from across Europe have been pitching in to maintain order, distributing food, clothes, and tea daily. And despite the duration of their stay, the refugees have maintained their hope that their situation will improve. “It warms my heart to see they really have their pride. They are dealing with this situation in a very, very good way, I think.”

Nevertheless, Piraeus is indicative of the problem now facing the entire country: arrangements meant to accommodate people for no more than a few nights – if that – have by necessity become semi-permanent settlements, tent cities where thousands are living for months at a time, and even with the combined efforts of the Greek government and a huge volunteer presence, capacities are being pushed to their breaking points.

For Greece, there is no end to the unfolding crisis in sight; what began as an emergency must now be treated as a way of life.

Snakes and Scorpions

“This is all bullshit.”

A Greek volunteer at Idomeni, who asked to remain anonymous, has just been handed a flyer distributed to the refugees by Greek authorities. In it, they are promised improved accommodations and better access to medical care in a new camp being run by the army.

Idomeni, an hour and a half north of Thessaloniki and a stone’s throw from the Macedonian border, has become an icon of the refugee crisis. Like Piraeus, it was once a brief stop on a longer route; the meager accommodations provided were meant to house migrants for a night before they continued their journeys, and not more than two thousand people at a time.

Now, however, with the Balkan route closed, over 10,000 people are camped along the railroad tracks of the defunct passenger train station. Many have been here for weeks, some months – and while international aid agencies, including the UNHCR, Médecins Sans Frontières (MSF), and the International Federation of Red Cross and Red Crescent Societies (IFRC) have contributed some semblance of infrastructure, most people sleep outdoors in small camping tents.

“I mean, there’s maybe like a handful – like, literally, you can count them on your hand – of camps that do actually have good conditions.” Generally, though, the Greek volunteer says that many of the camps are unhygienic, even unsafe. They often lack running water and electricity; refugees at Idomeni complain of problems with snakes and scorpions.

The camp is peaceful the day we visit, but there have been frequent clashes with the Macedonian police, who have fired tear gas canisters and rubber bullets at refugees and migrants attempting to cross the border. A significant part of the problem is the absence of reliable channels of information: Many of the confrontations have begun with rumors that the Macedonian border would be opening or that European asylum rules had changed. Since many of the refugees here have already had negative experiences with the police and the military – if not in Greece, then in Turkey – they are reluctant to trust what they are told. “They don’t trust the Greek military … they don’t trust the military in any country, they’re fleeing from the military,” the volunteer says.

Military Take-Over

Nevertheless, the military is now largely responsible for managing the situation. Deputy Defense Minister Dimitris Vitsas has been put in charge of a ministerial team managing the crisis in Greece. He predicted in March that it would take two years to work through the backlog of applications for the relocation mechanism, in part because other European countries have been reluctant to accept transfers; as of April 11, only 615 people out of a planned 66,000 have been moved. “Some countries have governments that seem to be driven by xenophobia … In my personal view, it’s a disgrace,” he told the Financial Times.

The military is now racing to build capacity to house what it now assumes will be a long-term presence, constructing new camps and working to move people out of the improvised settlements they currently occupy. The refugees living in Piraeus, for example, along with a group living at the out-of-use Ellinikon airport, are set to be moved to a military camp at Skaramagas; transfers had already begun when we were there. Meanwhile, in the north, authorities would like to clear out Idomeni, along with nearby camps, many of which are unsuitable for long-term habitation.

Caroline Haga, an emergency communications delegate for the IFRC, has been in Greece for six months now. “It’s been an evolving process: we came in, we tried to help wherever we could, and now we’re looking to have a bit more stabilized help, because we’re moving into a phase where it’s more stable.”

A few months ago the Red Cross was working primarily to provide emergency support – supplying first aid for boat landings, for example. Now they are working to improve conditions at the camps.

Precarious State

And of course none of this is happening in a vacuum: the influx of refugees comes on top of five years of economic crisis in Greece. Other European Union member states are providing financial aid – on April 19, the European Commission announced that it would be providing €83 million to NGOs in Greece, on top of the €181 million Athens has already received since 2015 from the Asylum, Migration, and Integration Fund and the Internal Security Fund – but Greece’s economy remains in a precarious state. Unemployment was already hovering around 25 percent (and nearly 50 percent among the youth), and the refugee crisis will cost the country an estimated 0.3 percent of Greece’s GDP in 2016, 20 percent of which is derived from the country’s tourism industry. The threat of Grexit has never quite gone away. In March Greek Prime Minister Alexis Tsipras expressed doubts about Greece’s ability to cope under the additional pressure.

Put simply, of all the countries in Europe, Greece was the one least prepared to handle tens of thousands of people when they were only passing through, and now it is forced to make plans to accommodate them for months, if not longer.

“We are there to help, like of course all the other major organizations, but the government has taken a lot on itself if you think that they’re managing the camps and the army is managing the camps,” says Haga. “I mean, they have their own problems, with how many homeless you see when you spend time here in Athens.”

In Athens, two models represent what the future of the refugee crisis may look like.

In an industrial neighborhood in the west of the city, surrounded by car repair shops and lumberyards, sits the Eleonas camp, a compound of containers and prefabricated houses with room for 1500. The camp has relatively modern sanitation facilities, even Wi-Fi and air-conditioning. The camp is an open facility – though there are police at the entrance, refugees are free to come and go.

A month ago, Lefteris Papagiannakis was appointed deputy mayor of Athens for migration and refugee issues. While the Ministry of the Interior is in charge of camp administration, Papagiannakis – who was born in France, and worked for the European Parliament – has been visiting to help with coordination.

“There has been a big change, because, you know, we were used to having people staying two or three days and then leaving – not only in this camp, in Greece in general. But now, with the borders closed, we have people who are basically stuck. So that changes a lot.”

Eleonas has been designed as a longer-term residence. There is a playground for children and facilities for psychosocial support. Perhaps more surprisingly, refugees of different nationalities are housed together – something rarely done in other camps. Papagiannakis sees this as one part of a larger mission. “You can see a house with Sudanese, Malians, Afghans, and whatever … you can see two families, one from Afghanistan, one from Yemen … We’re mixing things up. Because this is the way to go. It’s a small process of integration.”

Many of the people will be here for the long haul – they are waiting on the EU relocation mechanism or their Greek asylum application coming through. Papagiannakis is planning for the refugees at Eleonas to be there at least through the fall. “The biggest plan is school in September – school for refugees. I think that’s the most important thing that we should do … Kids, you know, they will learn Greek in a month.” Indeed, some children in the camp already have.

With the help of the Athens municipal government – and, as usual, a number of NGOs and volunteer organizations – the Eleonas camp is trying to achieve something rarely attempted elsewhere in Europe: it is planning for a Greek future in which today’s refugees play a role. “It’s a blessing, we have to use that. [The children] know Arabic, they know English. We will have a population that will talk, will speak four or five languages.”

A Five-Star Hotel

Meanwhile, in Exarcheia, a downtown neighborhood that has historically been a hot spot for hard left political activists – in 2015 then-Minister of Finance Yanis Varoufakis was attacked by anarchists at a restaurant here – a group of refugees, mostly Syrians and Afghans, have taken over an abandoned school and turned it into a new kind of camp. Here, about 400 refugees manage food, medical, and translation needs themselves, reaching decisions by vote – without NGOs.

Hussein, a refugee from Syria, arrived here two months ago. “Everybody does what he wants, so we depend on ourselves and organize ourselves. We have teams here: cooking teams, communications teams, technical teams, translation teams, and kids team.”

Many of the refugees living in Exarcheia today spent time in Idomeni – including Hussein, who staged a hunger strike while there. “It’s good here, like a five-star hotel if you compare it with Idomeni … or Piraeus.”

What comes next for Greece depends largely on forces outside of its control – on events in the European Union, in Turkey, and, of course, in Syria. A great deal hinges on the EU-Turkey deal finalized in March: If the numbers arriving over the Aegean can be reduced, Greece might be able to handle the refugees living within its borders now. If that becomes impossible, it is difficult to say how long the country can hold out.

Papagiannakis is not optimistic. “I don’t think we have a few months. I think things will go very fast. The deal will explode, because you cannot work with that deal. And I don’t know what will happen next. Because imagine – now we have 100 people, 150 people, coming in every day to the islands, and we can receive them, document them, apply for asylum, etc. Imagine in a day 2000. The system will explode. It’s not possible for the system to sustain that many people.”

“You have people who need to go elsewhere. People who flee war. Nothing can stop them. They put their children in boats that can sink any minute. We call them crazy. We do not understand why they are doing this. Other mothers say, ‘Oh, I would never do this to my kid.’ Are you sure?”

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The Italian government has put together a contingency plan to address a possible new wave of refugees coming from the South. Among the top priorities: Get the other EU member states on board.

© REUTERS/Italian Navy/Handout via Reuters

The Balkan route is closed, and Italy – until 2015 the EU’s main point of entrance for migrants and refugees taking the highly dangerous sea route across the Mediterranean – fears it will feel the effects.

Since the beginning of the year, 24,000 refugees fled the North African coasts toward Italy, 9600 in March alone. If Austria closes its border with Italy at Brenner and Tarvisio, Italy will face the same situation Greece has found itself in. General Paolo Serra, security adviser to Martin Kobler, the head of the United Nations support mission in Libya, told the Corriere della Sera that a million refugees are ready to make the journey from Libya to Italy. And the daily La Stampa prominently ran a quote by Prime Minister Matteo Renzi, warning, “Our country could become a pressure cooker without a release valve.” …

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He may be Russia’s second most prominent face in the world. But the Kremlin’s omnipresent envoy, a veteran of the Soviet school of diplomacy, serves largely as the figurehead for a foreign policy beyond his control.

© Artwork: Dominik Herrmann

When Sergey Lavrov was appointed Russia’s foreign minister in March 2004, the Kremlin had just suffered a debacle in Georgia, where a popular rebellion swept a pro-Western government into power in what later became known as the Rose Revolution, the first of the “colored revolutions” against kleptocratic regimes in the post-Soviet space.

In November 2003, as anti-government protests in Tbilisi reached their peak, President Vladimir Putin had dispatched Lavrov’s predecessor, Igor Ivanov, to negotiate a settlement amenable to the Kremlin. Ivanov persuaded Georgian President Eduard Shevardnadze to step down. But when a young, pro-Western reformer named Mikheil Saakashvili won the presidential election, relations with Russia soured almost immediately. …

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Karen Dawisha, author of Putin’s Kleptocracy, on what the Panama Papers have revealed about the Russian President’s rule and how the West should best deal with his regime.

© REUTERS/Sergei Karpukhin

Financial transactions among Vladimir Putin’s friends have proven so far to be the most exciting revelations from the Panama Papers. Did you learn anything new? First of all, we now have more evidence of what Putin’s friends are doing. But what was interesting to me was the following: Mossack Fonseca only created Sergei Roldugin’s, the cellist’s, offshore company and account; it was “filled” in the British Virgin Islands by a subsidiary of a major Russian state bank, the Russian Commercial Bank (Cyprus) Ltd. That indicated that somebody authorized the giving of Russian state money from the Russian budget. So it is not just that Putin’s friend got an offshore account – I mean, nobody, not even Putin, is able to keep track of all his friend’s accounts (laughs). But what he could and should be keeping track of is where two billion dollars of Russian budget money went – at a time when major banks have to be bailed out. That money is then missing to pay state employees on time. It doesn’t look good. I mean, really, that to me was the biggest confirmation of my research.

Is it conceivable that in a hierarchically-structured government or regime like Putin’s, the president would not have known? Well, I think the actual situation is likely to be as follows – and I haven’t seen the actual documents yet, but I’ve talked to some of the journalists who are working on the stories. Evidently they confirmed that Roldugin was either an unwilling or an unwitting holder of this account. There are emails and documents that suggest they were trying to find him, that they were trying to get his signature. In short, he was not that compliant. That signals that the great friendship between Putin and Roldugin is perhaps more complicated than it seems. Sure, Roldugin gets his musical academy, he gets state support, Putin turns up at his concerts. And in return Roldugin doesn’t look too closely at the details of the documents he’s signing.

Two billion dollars is a lot of money. What is it needed for? Clearly, Roldugin doesn’t need this money to buy instruments – as he’s now claiming. And I don’t think that we can say that Putin needs money, specific amounts of money isn’t the currency that Putin is most interested in. He is most interested in what authorizing the movement of money gives him, which is control over other people’s financial doings. He allows them to move money abroad, he allows them to have mansions in London, or the South of France, or Miami, or Los Angeles. But they have to be loyal to him and the moment they aren’t for whatever reason, he can expose these transactions as illegal, he can make it difficult for them to continue as we saw in the last few months with another former buddy, Vladimir Yakunin, the head of the Russian Railways, who resigned over the allegations that his money bought his son and his grandson residences in London. That certainly is not the reason that he was asked to step down. He was probably asked to step down for an act of political disloyalty and then Putin had the ability to compromise him.

In short: Russia’s President is buying loyalty. Yes – and don’t mistake what I am going to say, but thank God the reason they are loyal to him is their own venality and greed. An ideologically motived regime would be much more dangerous to the West. I think Yakunin was indeed ideologically motivated. He represented the far right, you know, not fascist, but a kind of uber-religious, conservative nationalism. Putin is much more practical, much more tactical; for him it is really about him.

Putin experienced a meteoric rise, from a subordinate in the St. Petersburg municipality to President of mighty Russia. In the West this has often been explained as a result of the reforms of the 1990s going wrong, while you’ve shown in your book how deliberately the country was turned into a mafia state … I wouldn’t say “mafia state” if this is supposed to mean that Putin is product or being controlled by or in cahoots with the mafia. He had dealings with them, but he did not rise from them, and his primary purpose is not to serve them. If we were to look at the corruption that has been the feature of his regime, I would say actually it is probably more the case that it was brought about by the KGB people around him, who were highly motivated by their shared distaste and disdain for the corrupt Communist Party people and for the hypocrisy of the Soviet ideology. They were more interested in opening up to the West, trying to weaken the West, using the West’s own vulnerabilities. The West’s own vulnerabilities are corruption, which they have studied and learned from and are in alignment with. But they always were in favor of privatization, they never saw the communist system as strong. What is interesting is that all these people who came to power early on, including Putin, went into business, and they quickly controlled the privatization process. Their major purpose was to prevent democrats, the pro-western liberal intelligentsia, from exercising control over privatization, and the pro-western intelligentsia had no idea what they were doing …

… while the KGB people already knew the system? Exactly. If you look at Yegor Gaidar, for example, who was a friend of mine, he learned about Western capitalism by reading Milton Friedman at night under the covers. The KGB learned about Western capitalism by running lots of offshore accounts in the 1980s. They were already doing it, they were already moving money around to support national liberation movements, communist parties abroad, and so forth. They had the infrastructure already. For instance, two of the major bankers who were in Vienna in the late 1980s are well known to Putin and are still active. They are on the board of Gazprom now. So they have been there from the very beginning.

Was it the idea from the start to build an authoritarian regime ruled by Putin in perpetuity? That was one of the big discoveries that I made when writing my book. I had believed that I would find that somewhere in the mid 2000s that they couldn’t bear the thought of Putin leaving, and so they came up with all kinds of schemes. But what I found was, first, that the original 2000 election of Putin was absolutely stolen. And he won barely, by only 52 percent. There were many ways in which votes were made up, including by increasing the numbers of people who were registered to vote by a million between the December 1999 Duma elections and the presidential election four months later. Even the official statisticians said this was something that could not be supported by demographic data. So, there clearly was a plan to steal the elections, but then what I also found was, secondly, a very detailed document that came from the Putin camp – and remember, he was acting President before that prime minister, so he was in government – which said that after he was elected every single department in the presidential administration would have a public or open function and a closed or secrete function. I mean, this is a plan!

… to create a state that protects this “lets-get-rich-together” club? Right, and they believed without a strong centralized state, Russia, a country of eleven time zones, would collapse. So they wanted to reinstate that centrality of a strong, centralized state. And that’s their ideology.

But doesn’t the kleptocratic character of the regime undermine just that? I agree completely. There are reports that the number of labor actions are up. And most of these actions are occurring because of non-payment of wages, so there are lots of cases including major factories like AvtoVAZ, for example, which are three months in arrears. So this can’t be sustained. The question is, What will the regime do? And here is the really bad news. The establishment announced in April of a new 400,000-strong national guard that will go down to small town/village level. It’s an indication that they will use force to repress labor, to repress anyone. They are already repressing the opposition, now they repress the people who are supposedly in the core of the Putin Project. The person they put in charge, Viktor Zolotov, goes back with Putin a long way, back to St. Petersburg in the 1990s, and has been Putin’s personal bodyguard. So this looks like a praetorian guard, established to protect Putin personally. Zolotov was named as the head despite the fact that the law establishing the national guard had yet to go through the Duma. Already there’s a video on the web that was taken secretly near Moscow, showing that the new units are already doing crowd control training exercises with water cannons, machine guns on top of armored vehicles – really bad stuff. Apparently they have permission to shoot without warning.

How should the international community deal with this kind of Russia? Many US sanctions are aimed at people around Putin – do they work? Well, personally I prefer sanctions to putting more troops in the Baltic states. I mean, we can’t just pretend that nothing is going on, so if we accept that something is going on and we should do something to respond, I think that it is important to decide how the Putin regime is primarily organized, motivated, and how it is threatening to us. Of course it is not to say that there isn’t a huge threat in Ukraine and dangerous actions taken in other places, but I do think that the biggest threat to the West is the corruption in our own system. And I’m not saying that this will stop it, but I daresay that we wouldn’t have had all these discussions about offshore accounts if those individuals forming the backbone of the regime hadn’t been sanctioned. They are also signaling: The US government knows a lot about Putin. A lot.

Do we need more stringent laws against corruption and money laundering? You have to keep in mind that US sanctions and EU sanctions are different. EU sanctions can be challenged in courts of law, so they have to be much more targeted and much more linked to a specific action, for instance as punishment for Russian action in Ukraine. American sanctions are not subject to review by any court of law or by Congress, which makes them much bolder and nontransparent. So for example, when a person under sanction wants to access his account at – pick a bank – he will go there and try to transfer funds and the funds will simply not be there. Because at some point the US Treasury saw that these funds were coming through the US, so they just grabbed them. And the person won’t receive any reassurance that he will ever see them again. And yes, the West as a group needs to do something to tighten up its own rules and regulations. Until then, American sanctions in particular can be quite biting.

How do you see the regime evolve? I think it could get much worse. The logic of the regime is such that it doesn’t have any deep legitimacy. As long as people get paid and as long as they believe that their standard of living will improve, it will be difficult to challenge. But if those things continue to be eroded then I don’t think there is any deep legitimacy. You know, even if they are boosting Putin’s approval rate by ten or twenty percent, they are still impressive when compared with support figures for Western leaders. But this doesn’t necessarily translate into support of state and government. So while eighty percent say they support Putin, eighty percent also say that corruption is a major problem.

Does that mean that Putin is excluded from the accusation of corruption? Well, it is very difficult to poll in an authoritarian regime, and when people see the political opposition being pilloried or killed for attacking Putin, they may not speak quite so openly to a pollster. There is an additional cultural notion: Gleb Pavlovsky, who was Putin’s head of PR from the late 1990s onward, said that his task in 1999 was to reawaken in the Russian people the habit of obedience – something that is supported by the Orthodox Church under Putin. The management of his image is aiming at constantly impressing upon the Russian people that he personally is the embodiment of power. To criticize him means to criticize something that is good, that is divine, somebody who loves you. So he can go on television and say about the Panama Papers: “I’m not in them.”

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The EU should maintain sanctions on Russia – and it would be well advised to strengthen them. Economic arguments for easing do not add up, and harsher sanctions would represent the right moral choice.

© REUTERS/Sergei Karpukhin

For two years, the EU-Russia agenda has been dominated by the issue of sanctions – those imposed by the European Union on Russia after Moscow’s annexation of Crimea and its backing of the separatist forces in eastern Ukraine, and those imposed by Russia in retaliation. European sanctions (as well as those introduced by the United States and other countries) had a clear aim: to protest Russian aggression while avoiding any direct military confrontation with the Russian Federation.

The question up for debate since 2014 is whether the san­ctions changed Russia’s policies vis-à-vis Ukraine – if not leading it to return Crimea, at least pushing it to withdraw from the Donbass – and whether they are worth continuing, or even strengthening.

I would argue that they have and they are, and for at least three reasons. First, as became clear later, Western sanctions were extremely timely: it was in early September 2014 that oil prices fell below $100 per barrel and began their impressive downward slide. The situation in the Russian economy, not good since at least 2012, has deteriorated sharply, and sanctions definitely have contributed: for many years Russia’s economic growth was fueled by easy access to foreign capital and loans, so Russia was already under pressure.

Secondly, taking into account that Russia possessed huge reserves, enough to cover prospected budget deficits for more than four years, no one should have expected a change in the Kremlin’s course to come quickly – rendering evaluations of the sanctions’ efficacy premature.

But the most striking thing for me is a third aspect – what sanctions have achieved despite being inexcusably soft. If one looks at the sanctions levied by the US, EU, and UN against, for example, Iran or North Korea (which, it is worth pointing out, never annexed the territory of their neighbors nor incited civil war), one sees asset freezes, bans on oil and commodities exports, full-scale tra­de bans, disconnections from SWIFT and international bank clearing centers, and even prohibitions on servicing airplanes used by Iranian or North Korean airlines. Is there any doubt Russia would struggle under such a broad set of sanctions? President Putin would not be able to counter them for a single year – and I would argue such a set of rules was warranted after Russia attempted to undermine the founda­tions of the post-World War II political order in Europe.

Economic Interests at Play

Why did the Western nations decide not to impose all-embracing sanctions on Russia? I think that at the time the Europeans conside­red EU-Russian economic connections much more important than European ties with either Iran or North Korea. In 2013 the EU exported goods and services worth €119.5 billion to Russia, and its imports amounted to €206.9 billion, making up 9.6 percent of extra-EU trade turnover. Europe depended on Russian oil and natural gas. Some big European companies were highly exposed to Russia, and several EU policymakers have solid connections with President Putin or people in his inner circle. No one actually respected Putin much at that time, but economic interests played a decisive role. Russia’s counter sanctions were also economically driven, but in another fashion: in introducing a ban on agri­cultural products, Moscow attempted to sway European farmers and strengthen its pressure on EU governments. But even if the sanctions have not reshaped Russian foreign policy, it is important to understand how they have affected the Russian and EU economies before a decision is made regarding their extension at the June 23 EU summit.

First, the Russian economy is now in very poor sha­pe. Russia’s GDP for the first quarter of 2016 in current dollar terms will be only $242 billion, roughly 55 percent less than in the first quarter of 2014. Russia repaid more than $216 billion in net external debt between July 1, 2014 and January 1, 2016, while domestic investment fell by 8.4 percent in real terms in 2015 alone. Russia’s monthly imports were down from $27.4 billion in June 2014 to roughly $9.0 billion in January 2016. Real disposable incomes are falling for the third consecutive year, while the ruble has lost up to fifty percent of its value.

“Putinomics” Are Exhausted

No one should expect the economy to crum­ble anytime soon, but the trend looks clear: “Putinomics”, based on plundering oil wealth while putting the economy firmly under state control, has been exhausted. The era of 6-9 percent annual growth is over. The country will not undergo complete collapse, but it is just beginning what will be a prolonged recession.

Of course, the sanctions only played a small role in all this. If one tried to estimate the effects of Russian agricultural counter-sanctions, they would arrive at a figure of not more than 0.7 percent of GDP, and $1-1.2 billion in lost wages and depreciation of existing investments. Moreover, growth in the Russian agricultural and food proces­sing industries might well offset these losses. Some other branches of the Russian economy were da­maged as well, including military production.

The financial sector experienced the greatest losses: in 2015 the overall profits of the Russian banking industry contracted by 67.5 percent year-over-year, to 192 billion rubles ($3.15 billion), but the go­vernment did all it could to support financial institutions affected by the sanction regime. The different estimates of the combined damage caused by sanctions on Russia vary from a conservative €25 billion to an overstated $1 trillion. In any case, direct losses did not exceed 3 percent of Russia’s GDP.

Today, however, Europeans are less interested in the Russian economy than in their own – and here we see two consequences of the sanctions. While overall EU agricultural exports increased in 2015, they declined significantly in Central European nations, whose economies were often oriented toward Russian markets; and several nations (including Italy, France, Austria, and Greece) argue that the sanctions have hurt their manufacturing industries.

A Major Challenge

This is the major challenge Europeans will face when making their decision this coming June. In her statement on sanctions, Chancellor Angela Merkel said on February 1 that “sanctions against Russia must stay in place until Russia fully implements the Minsk agreement” and Ukrainian sovereig­nty over the Donbass (Crimea was not men­tioned) is restored; the Russians, meanwhile, have made little movement in that direction, and are apparently waiting for the damage caused by the sanctions to change Europeans’ minds.

But why do EU leaders assume that lifting sanctions would return business with Russia to conditions that existed two years ago?

Take trade flows as an example. In 2015 Russian imports from the EU were down by 40.8 percent, while imports from Korea fell by 49.4 percent, imports from then-friendly Turkey fell 39.4 percent, imports from Kaza­khstan fell 35.5 percent, and imports from China fell 31.3 percent. Why should one expect trade to explode if sanctions are lifted? I would argue that the Europeans underestimate at least three factors: oil prices have plummeted since 2014, so the ban on exporting oil and gas exploration equipment is hardly a relevant factor; the ruble lost close to a half of its value while inflation was limited, meaning imported food would now be twice as expensive in Russian shops (and the same applies to many other industries); and Russian entrepreneurs have much less ability these days to attract foreign loans, especially with many other markets that look now much more promising. Moreover, even if EU leaders decide to terminate financial sanctions against Russia, US authorities will not follow suit, making the European move senseless: taking into account EU banks’ exposure to the US market, none of them will try to violate the American sanctions if they are still in place.

In other words, the main argument of European politicians in favor of abolishing the sanction regime looks totally misleading, and the promise of a strong recovery in EU-Russia trade is pure illusion. Of course, some companies and countries may profit from economic normalization (including the Baltic states, Finland, or Poland) – but their governments are the strongest supporters of sanc­tions, their willingness to punish the neighborhood aggressor still greater than the desire to profit from trading with it. To put it more bluntly, Europeans now face a choice that is much more moral than economic.

No Economic Benefit

But that doesn’t make this choice easier. On the one hand, the very fact that the Russian economy has already been derailed (although not ruined) by the current situation in the energy markets, as well as by the irres­ponsible policies of the country’s political elite, may lead one to conclude that sanctions are no longer needed. In other words, sanctions were quite useful and they came at the right time; they delivered a blow to the Russian economy that provoked the slowdown, and now we may simply feel that Russia has been punished more than enough.

On the other hand, the same arguments may be interpreted the opposite way. If the Russian economy is doing badly, termination of sanctions would not give Europeans access to a market as strong as it was in the early 2010s. They will be unable to sell roughly half a million vehicles, as EU-based companies did in 2008, or provide financial services to a giant market – and that ignores agricultural sales. Russia has already become a much more autarkic and much less market-oriented country than it was even several years ago, and business with it will not be the same as it was before. It is now clear that the main Russian export for some time now has been not oil and natural gas, but corruption. So if there are no visible benefits from resuming economic cooperation with Moscow, why not leave the sanctions in place for another year – or even longer?

A Value-Based Choice

This makes the choice both easier and more difficult. I suggest that Europeans abandon the rhetoric of benefits and convenience when it comes to the sanctions regime and instead make a value- and interest-based choice, taking into consideration only political arguments. If the sanctions are lifted, after all, there might be an increase of EU exports to Russia of 5-10 percent, predominantly due to increased shipping of food. It would add €4-7 billion (or 0.3-0.5 percent) to overall ext­ra-EU exports – which would hardly change the economic situation in Europe. In some countries it might increase exports by up to 3 percent, but this too would not be a critical change – and all this would happen not when the Europeans ter­minate their sanctions against Russia, but only when Russia lifts its own counter-sanctions, which might take some time.

At the same time, ending sanctions would become a sign of reconciliation between Europe and Russia at a time when anti-EU propaganda inside Russia is at its peak and a policy of undermining the European unity is a top priority. The decision to lift the sanctions would be regarded in Moscow as a clear sign of European weakness and a signal for continuing Russia’s aggression against Ukraine. The EU would lose its moral standing while gaining nearly nothing, since the Russian market will not show any additional demand for European goods and services and Russian tourists will not flock to European destinations as they once did.

But this new economic reality creates an opportunity for the opposite option. With Russia dropping from the third to the fourth position in the EU’s ranking of most im­portant trade partners and presumably drifting further down in coming years, Eu­ropeans may increase their pressure on Moscow without fear of ex­cessive economic damage to themselves. The reason this option is attractive should be clear: Russia has not stopped supporting Donbass separatists and is doing its best to undermine the government in Kiev and destabilize Ukraine. If this happens, Europe will encounter an even greater problem than it faces in Syria and will suffer a major defeat in its foreign policy.

A More Confrontational Course

Thus I would suggest opting for a more confrontational course vis-à-vis Russia, dramatically increasing pressure on its current leadership. Where vital geopolitical interests are at stake, there is no need to take dubious economic considerations into account.

The main problem with EU sanctions was that they affected only a small group of Russians and were difficult to distinguish from the effects of the general economic slowdown. At the same time, they allowed President Putin to rally the Russian public, which is very sensitive to external pressure. If we want sanctions to be effective, we should change our tactics.

First of all, it should be made clear that the sanctions will not be lifted before Ukraine regains complete sovereignty over rebel-controlled regi­ons. There is no need for European leaders to convene every six month and debate an issue that is not progressing at all. Second, the sanctions regime could be reinforced with a demand that all European banks sell off all portfolio investments in Russia, whether these belong to the banks or are held by their clients. Even today, around 60 percent of all transactions in the RTS market involve a Western financial company. This divestment would lead to an un­precedented sell-off in Russian equities, and would send the RTS dollar-denominat­ed index well below 500 points. Since there is no significant internal demand for Russian equ­ities, this move will be felt by a majority of investors. Dec­lining valuations will produce margin calls for many Russian companies and cause a new wave of debt repayment, leading to a further decrease in investment.

Next steps might include a European memorandum stating that EU nations will buy 10-20 percent less Russian gas every consecutive year. If this mo­ve were to be made now, it would be especially effective – Russia will be unable to diversify its gas deliveries until at least 2020, and significant problems experienced by Gaz­prom would resonate across the Russian economy.

Moreover, there are a lot of me­asures that could be taken against the Russian ruling elite – today the Russian autho­rities themselves ban military, security, and police officers from traveling abroad, but the EU could announce a ban on issuing visas to all Russian government and municipal employees. Another option would be to change the policy to­w­ard Russian-controlled assets in Europe, announcing that holdings would have to be sold by, say, January 1, 2018. Russian citizens could be banned from establishing companies in the EU, participating in those that already exist, or holding banking accounts with €10,000 or more – and the list of measures may be extended.

Appeasement Isn’t Working

Why do I propose such complex measures? First, because a strategy of appeasement rarely brings good results. The West tried to reach a deal with Russia after its conflict with Georgia, and got Crimea and Donbass. If Europe and the US forgive Russia for its formal and informal occupation of vast areas of Ukrai­nian territory, Moscow will treat this as a carte blanche for further geopolitical adventures. Therefore, I believe, the pressure being exerted on Russia now is in many ways much more important than any current economic consi­de­rations.

Furthermore, sanctions should be desig­ned in a way that will affect millions of Russian citizens, not just Putin’s friends. Only then can there be hope that the Russians themselves will increase pressure on their government. If huge swaths of the Russian middle-class link their tro­ubles in Europe with President Putin’s policies aimed at redrawing European borders, a great deal may change in Russia, creating the space and impetus for a protest move­m­ent. This is how sanctions used to work and is how they worked in Iran, where the population began to back greater openness in the country, even at the price of its nuclear program.

Make no mistake: What we have seen from Russia since 2008 is an attempt to dismantle the postwar political or­der in Europe. What’s going on today is not only about Ukraine – it’s about the entire continent. The task of European policymakers consists not only in defending Ukraine – it includes protecting Europe, both from explicit Russian aggression and from its policy of undermining European institutions. We need to explore whether the price of san­ctions is as high for Europeans as depicted by Kremlin propaganda; to distinguish the losses caused by sanctions from those caused by a slowdown in the Russian economy; and reconsider a new sanctions package – one that would be able to bring Moscow’s leadership in line with reality. Any attempt to ignore what is said and done in the Kremlin would be an inexcusable mistake.

NB. A longer version of this article will be published by the Atlantic Council.

Read more in the Berlin Policy Journal App – May/June 2016 issue.

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