So Far, Vladimir Putin Has Only Succeeded in Strengthening the European Union.
The EU will emerge stronger from this war, with the presence of Ukraine in it sooner or later.
“The Division Of Europe Is One Of Russia's War Aims.”
This sentence is not mine, but Emmanuel Macron's, the president of France, in front of the conference of French ambassadors. With this sentence, Emmanuel Macron wanted to put the spotlight on the real threat to fight it better.
Until now, the unity of the 27 countries has been based on the line of sanctions against Moscow. Faced with the Kremlin dictator, who promises "catastrophic" consequences on the energy market, the EU is closing ranks.
The Franco-German couple is back in action
Behind the consensual facade, there were some cracks here and there. In Italy, public opinion is sensitive to anti-European populism. Capitals like Warsaw intend to block any evolution of the Brussels institutions towards more majority decisions.
The European context is not stabilized.
In France, the presidency wants to give the image of a European mobilization that began the day after February 24, 2022, the date of the beginning of Putin's invasion of Ukraine, with unprecedented embargoes against Russian interests, massive military support to Kyiv, the reception of refugees, massive economic aid.
In reality, France and Germany, and the other major European countries know that the next few months will give the keys to a certain idea of the European future. On the EU side for the quantities and the price of the energy supplied to the populations. On the Ukraine side for the outcome of the fighting.
As a matter of urgency, the Franco-German couple has resumed its service to consolidate the process of networking of intra-European solidarities.
On September 5, 2022, the French President and the German Chancellor Olaf Scholz developed a joint response to give the Energy Ministers of the EU-27. These ministers held a conclave on September 8, 2022, under the leadership of the Czech Republic. The signal is above all political here. It is there to demonstrate the driving capacity of the historical engine of the EU.
The stabilizer of joint gas purchasing
To date, the RePowerEU strategy presented by the European Commission is not very helpful. If this strategy is up to the task, it is only on paper for the moment... Proposing to increase the share of renewable energies in the energy mix of the States is commendable but of little immediate effect. Just like the stated ambition of a 15% reduction in gas consumption for all member states.
So each state is playing the game to fill its tanks with the precious product while seeing its pilotable energies in difficulty. The dependence of the 27 countries on Russian gas has indeed fallen from 50% to 9%. On the other hand, in a global market tense with Putin's threats, prices are soaring.
This is why Paris and Berlin felt it was time to announce their agreement for a joint gas purchasing procedure, to be extended if possible to the community level. Just like vaccines against COVID-19!
This principle of cooperation is imperative. The energy system is indeed interconnected, and the great risk for the winter of 2022, when tensions will arise, is that each country will go it alone and cut off the pipes with neighboring countries. The Europeans cannot leave the industry of one country or another at a standstill because it has run out of gas.
At this point, the fact that Viktor Orban, the turbulent Hungarian, is seeking to secure his reserves with Gazprom contracts is not a precursor of a global debacle.
Hence the strategic move by France and Germany. France will deliver gas to Germany, and Germany will provide its partner with electricity in exchange. It is up to the 27 Member States to show their ability to follow this stabilizing path for energy consumption.
The threatened rent of the common electricity market
At the same time, the two capitals have agreed on a coordinated gesture in favor of an exceptional contribution to be imposed on energy companies with undue profits. Those whose production costs are significantly lower than the selling prices on the market.
There is full agreement with the European Commission to apply the contribution at the Community level and to transfer it to the Member States. It would be up to each country to select the companies concerned. In case of a deadlock in Brussels, Emmanuel Macron promised to think about it for France alone. You can see here a sort of instantaneous translation of the “superprofit tax” mechanism that has made so much noise in France in recent weeks.
The most surprising thing is that this rent is fed by the operation, organized by Brussels, of the common electricity market. It is the marginal cost of the last source of electricity used to meet demand, often gas-fired power plants, that sets the price applied to all operators. This is sheer madness when gas prices reach stratospheric levels, which in turn creates the famous "undue profits".
Last year, Germany considered this system still effective in pushing the energy transition. In Berlin, the wind has finally shifted in favor of a structural reform that France has been clamoring for. Unfortunately, the President of the European Commission, Ursula von der Leyen, is dragging her feet to come up with a text decoupling the labels.
If, in the end, the European Commission complies with the political injunction of the States, Vladimir Putin will have indirectly succeeded in rationalizing the excesses of competitive extremism. Such operations are decisive for building the cohesion of the EU-27.
The East now emancipates itself from the “proximity” of Moscow
However, these are only surface collateral effects of the war in Ukraine. It is the whole status of the country of the "front" in the heart of the European space that is changing. Some are on the direct border of Ukraine, like Poland. Some are on the border with Russia, like Finland, Latvia, and Estonia. There are all the former Eastern countries like Lithuania, the Czech Republic, Slovakia, Hungary, Romania, and Bulgaria.
All of them feel the “proximity” of Moscow with an acuteness unknown in the West.
Yes, the Russian aggression transforms them. A form of emancipation from the Brussels directoire, embodied by the European Commission and the Franco-German couple, is beginning to emerge. They must assert themselves. The most advanced on this ground is probably the Polish Prime Minister, Mateusz Morawiecki:
“We cannot afford to lose this war. The threat of the implosion of Europe exists.”
And he denounced the narrative seeking to persuade public opinion that returning to “business as usual” is an option. The opening of Ukraine's application to the EU was not an option for Warsaw either.
The future European political community
Despite the still distant prospect of membership, a glacis is emerging where the Warsaw-Kyiv axis would change the very nature of the EU. Already the post-Russian-Ukrainian war deadline gives a foretaste of this.
Once it is understood that Putin's imperialism wants to destroy our democracies, our universalism, what can be the diplomatic software of France or Germany? On the French side, Emmanuel Macron defines France as a "power of balance, in the plural". It knows how to build geopolitical independence - without equidistance - from the Sino-American duopoly. Which also knows how to preserve "the conditions that will allow, at a moment chosen by Ukraine, either a military victory or a negotiated peace".
The objective of leaving a way out of a conflict open is the basis of diplomatic action. This was superbly recalled by Henry Kissinger, the former American Secretary of State. This is the Macron option, which must be welcomed, even if Kyiv does not like it. This is not what Kyiv wants to hear at the moment, and that is normal, but it is already necessary to think about an exit from the conflict, which will happen sooner or later.
All things considered, the launch of a European political community, in October 2022, in Pratique, bringing together the EU-27, but also the British (unless Liz Truss comes to change this), Norwegians, Swiss, Western Balkan states, Ukrainians ... is part of this state of mind.
Very opportunely, the German chancellor Olaf Scholz has rallied this French initiative. This will never be more than the very beginning of major maneuvers to stabilize the security architecture of the Old Continent. Energy security is only the first brick in this future construction, which Vladimir Putin, quite involuntarily, will only have reinforced by his expansionist madness.
Some reading
Wall Street’s Magical — SPACs About to Become the Best Investment of the Period. $75B will be returned in the next 6 months to investors in SPACs.
Europeans Are Choosing Recession at the Risk of Putting Democracy to a Critical Test. A choice that is both courageous and perilous.
The Sanctions Against Putin’s Russia Are Pushing the Economy Towards Total Paralysis. It is a marathon that requires patience, but from which, Ukraine and the West will emerge victorious.
An American Student Trader Pockets $110M in One Month and Becomes the New Prince of Wall Street. Lucky guy or genius?
Cold War Between America and China — The New Space Race. The war in Ukraine started by Putin also upsets the balance in space.
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