Euro-Atlantic! think.act.lead. 1/2016 by GLOBSEC Academy Centre

in this issue 4

headlines

interview with Christian Egenhofer

in depth

Energy Instruments of “Hybrid Warfare”

Geopolitics and Energy Security: From Prosperity to Survival by David S. Oualaalou Energy Instruments of “Hybrid Warfare” by Nataliia Slobodian

on the map EU Eyes Caspian Resources to Boost Energy Security by Kostis Geropoulos

EU Eyes Caspian Resources to Boost Energy Security

EU insight Energy Infrastructure of the EU – Strengths & Weaknesses by Lívia Vašáková

history chapter Initiatives to Strengthen the European Energy Security by Szilárd Berta

Visegrad news

op-eds

propaganda monitor

calendar

quiz

Energy Infrastructure of the EU – Strengths & Weaknesses

Initiatives to Strengthen the European Energy Security

editorial

Katarína Schwertnerová Editor-in-Chief For centuries, security of a particular state was considered simply a matter of military power and strategy. It could be more or less precisely measured and compared by counting in the number of troops fit for a fight, and the scale as well as the technological advancement of involved weaponry. However, as the centuries went by and the world got more and more complex, so did the perception of security. Some thirty years ago, Copenhagen school of international relations came up with the sectoral approach to security studies. Theorists identifying with this academic trend recognised that security is a much more multilayered phenomenon consisting of aspects which have nothing to do with military might. Eventually, from among many other identified security sectors, the sector of energy security rose up to the forefront of attention. Personally, I would argue that energy security might even be the cornerstone of all the other nonmilitary aspects of security. On the other hand, we cannot overlook the role military issues play in

here, especially when considering situations where critical energy infrastructures come under military attack. To some, energy questions might seem like a predominantly businessoriented issue: all about getting the most reliable service for the best price. While reducing vulnerability of a state by diversifying resources, suppliers and routes is certainly crucial, energy security means so much more than just figuring out the technicalities of achieving these goals. It is inseparably intertwined with politics, especially foreign policy and geopolitics as such. The political connotations of energy security are far too clearly visible in the current events in Ukraine, as they already set bells ringing in the rest of Europe, mainly in its central region. Over the years and to this day, Russia has continually used its energy resources provided to and through Ukraine as a leverage for achieving its foreign policy objectives. Additionally, Russian initiatives to bypass the “problematic” Ukrainian territory with new projects such as Nord Stream 2 (or previously South Stream and Turkish Stream) are mainly driven by political interests as well. However, the truth is that regardless of Russia, every state which possesses natural resources of any kind behaves similarly; the bottom line being that natural resources are wealth that everyone needs but only few have. The connection between ensuring energy security and political stability of a state was probably never clearer than it is right now. No state can function without energy supplies it needs for its economic activity. Without reliable supplies of energy, the economy is in peril, which usually has negative effects on the living standard of the country’s citizens. It is only understandable when their first reaction is to express dissatisfaction with the political leadership. This is probably the most self-evident link between the various security sectors. Furthermore, we will probably witness the consequences of

relationship between energy policy and geopolitics very soon. The current low oil prices are not caused solely by economics – they display certain geopolitical interests, and are sure to have geopolitical repercussions as well. Speaking of non-military security, there is another significant link resting in the issues of environmental security. Quite recently, the debate on how to harmonise the ever growing global energy consumption with concerns over the environmental sustainability has finally captured the attention of the global leaders. The proof could be seen during the UN climate talks in Paris in November of the last year. It is probably safe to say that we are hardly willing to sacrifice longterm global economic growth and cut down on our energy consumption (which largely depends on fossil fuels). Therefore, clean energy fuelled by renewable resources should seem like an obvious way to go. However, in many cases the technology needs to catch up, and shifting the whole economy towards renewable energy is also going to take a while. Moreover, this process will cost us money too, threatening with a temporary slump in the economic growth. Even though it might seem like there is no winwin situation, in reality, renewable resources are a clear win in the long run. Clean energy will not harm the environment, keeping us safe in this sense, while renewables also offer us a way to diversify our energy resources and in some cases even to become self-sufficient energy producers. That is why going green might be a way to kill two birds with one stone. Dear readers, we are honoured that you have found your way back to the pages of our magazine. We always aim to bring you interesting, and perhaps even challenging ideas and points of view on the most current issues in the international relations. We hope to maintain your favour and invite you to stay in touch with us via Facebook and Twitter @ EuroAtlanticMag. I wish you pleasant reading!

headlines North Korea Performs Obama Delivers Economic Community another Nuclear Test Final State of the Union

ASEAN Launches

Katarína Schwertnerová

From the 1 January, ten Southeast Asian countries officially launched a common market under the project of ASEAN Economic Community (AEC). The key objective of the AEC is to allow free movement of labour, services and capital, although excluding free movement of persons; the AEC is rather to resemble the European Economic Community of 1957, thus lacking elements of a true single market. The project has been in the making for more than a decade. The bloc should boost trade and help economically integrate the Southeast Asian countries, creating a market of more than 620 million people, and hence the seventh largest economy in the world. However, AEC is strongly marked by significant differences in the level of economic development between its members. By creating common market, the ASEAN members hope to attract more investors and make the region more competitive within the scope of global economy. Another aspiration is to counterweight dominant economic powerhouses in the region such as China, Japan and India. One of the first initiatives of the community is to connect the gas pipelines in the region from the Pacific to the Indian Ocean. The countries also want to improve customs in order to speed up the trade, although the non-trade tariffs will remain in place. In terms of labour movement, the borders will be opened to some professionals such as doctors and engineers. Against all the odds, the AEC should be fully functional common market by 2025.

On 6 January, North Korean leadership announced that the country performed its first successful hydrogen bomb test. In a typically propagandistic manner, North Korean government painted the test as a proof of rising nuclear power of their country. At first, the possibility seemed likely due to the seismic activity detected by South Korea in the presumed test site. However, soon enough scepticism appeared about North Korea actually acquiring a hydrogen device; since no radiation was detected by Japanese monitors, the experts assume that North Korea only detonated a regular nuclear device. Furthermore, the recorded blast did not correspond with what would be expected of a hydrogen bomb. If confirmed, it would the fourth time Pyongyang has performed a nuclear test. South Korea, Japan, and the United States strongly condemned such provocations, arguing that North Korea repeatedly violated various UN resolutions. The UN Security Council also held an emergency meeting to start working on a response to such violations, threatening North Korea with more sanctions. China claimed that it had no preceding knowledge about the test and expressed its opposition as well. Chinese foreign ministry reinstated its commitment to work with the international community on the denuclearisation of the Korean peninsula. A month later, North Korea launched a rocket, allegedly in order to set a satellite into space. South Korea reacted to both events by suspending operations at a jointly-run (although predominantly South Korea financed) industrial park Kaesong.

On 12 January, US president Barack Obama addressed the joint session of both chambers of Congress with his eighth and final State of the Union in the office. In his speech, Obama attempted to shape his own legacy and offered broader look at the future of the USA emphasising unity and cooperation. In an unusual way, the President used this opportunity to poke at Republican presidential candidates, criticising them mainly for their anti-Muslim rhetoric, which plays into the hands of Islamic fundamentalists. He reminded American people that ISIS does not represent the essence of Islam as such. Although he refused calling the fight against ISIS “World War III”, he urged Congress to authorise the use of US military force on the ground. He denied lack of determination to destroy this terrorist organisation, while also pointing out that USA cannot try to rebuild every country in crisis. The president further dispelled the claims that America is in economic decline, pointing out initiatives to cut the red tape in business, and new jobs that are being created. Obama commented most extensively on the issue of climate change, appreciating the Paris climate deal and the achievements of his administration in introducing clean energy. The speech did not include many specific policy proposals. The expected issue of gun control was mentioned only briefly. On the other hand, Obama emphasized the need to offer free twoyear community college degrees. He also urged bipartisan work on issues such as criminal justice reform.

Denmark Hardens Annual World Zika Virus Declared Its Stance on Refugees Economic Forum Global Emergency Daniel Fekete

Daniel Fekete

Denmark’s newly elected coalition government has a considerably stricter attitude towards refugees, which has already resulted in numerous protests. Various refugee organizations have already accused the Danish government of racism. Young people are taking to the streets to voice their concerns as well. The UN demands that Denmark honours the international commitments related to asylum seekers, but in reality, the situation is completely different. At the moment, the most discussed topic is the newly proposed law on stricter border controls of immigrants allowing for confiscation of jewellery and other valuables, which the critics compare to the laws against Jews in the past. The law is supported by the leading Venster party and by the anti-immigrant Danish People’s Party. The chances for passing of this law are thus considerably high. The issue was heavily debated in the European Parliament as well. The Danish government advocated its steps, but the criticism is rolling from all sides. Denmark wants to confiscate the valuables from migrants in order to finance their stay in the country. Additionally, the government plans on halving social benefits for immigrants, who would thus lose a substantial amount of financial support. The leaders also argue that the unemployment rate among immigrants is the leading cause for immigrants to refuse to fully integrate into society.

The annual World Economic Forum took place in the Swiss town of Davos between 20 and 23 January. At the forum, political and cultural leaders from all around the world were joined by influential stakeholders in economics, trade, science and technology. The main topic of this year’s meeting was Mastering the Fourth Industrial Revolution. During the course of various panel discussions, experts unanimously agreed that the fourth industrial revolution has already begun. They reinstated that the current industrial revolution is based on the usage of the internet, artificial intelligence and focus on robotics, which are slowly finding their way into everyday life. A p a r t f r o m m o d e r n technologies, the participants at the forum discussed political issues as well. Major attention was paid to settling the disputes between Iran and Saudi Arabia. However, Iran’s Minister of Foreign Affairs Mohammad Zarif and Saudi Prince Turki failed to come to an agreement. In an interview for Reuters, one of the meeting’s participants said that the dialogues between the two sides resembled a “dialogue of deaf people”. Therefore, in comparison to previous World Economic Forums, this year’s event did not go quite as planned, as similar conflicts were resolved at the forum in the past; the successful negotiations between Turkey and Greece, which prevented a war between the two states being an example. The leaders also closely debated the possibility of Great Britain leaving the EU, Russia’s aggressive foreign policy, and the Islamic State threat.

At the beginning of February, World Health Organisation declared the Zika outbreak a Public Health Emergency of International Concern. The Zika virus is currently most widespread in countries like Brazil, Colombia, Ecuador, El Salvador, Jamaica and Puerto Rico. Experts claim that the recent outbreak in Latin America shows that globalization and climate change could lead to other viral outbreaks. Initially, only animals were infected by this originally mosquito-borne virus, but even after the first reported cases of infected humans, it was deemed harmless mostly due to the fact that it was not accompanied by any serious symptoms. Now the virus is regarded highly dangerous, since according to the experts, it can be also transmitted through sexual intercourse. The WHO and other authorities have warned women to avoid pregnancy as the virus can damage the fetus, causing babies to be born with microcephaly – a condition where the brain does not develop properly. The Zika virus outbreak could have catastrophic consequences for Brazil, which has had more than 1.5 million confirmed cases of infection. The outbreak has hit the country at the worst possible time, and if not contained, this years´ summer Olympics, about to be held in Rio de Janeiro, could end with Brazil losing all the expected profits. Kenya is reportedly even considering not sending their elite athletes to Brazil.

interview Christian Egenhofer: Energy Security Discussion

Is Rather Fuelled by General Security Concerns than by Threats to Security of Supply Interviewed by Katarína Schwertnerová In what ways does energy insecurity make a state vulnerable? Every country or a bloc such as the EU strives for security of energy supplies. Vulnerability depends on resilience - how long a country can survive in case of a supply cut. The European Commission stress tests for natural gas – the area where Europe may be most vulnerable – have found that Europe is resilient to supply disruptions with the exception of the South Eastern Europe. South Eastern Europe’s vulnerability is essentially due to infrastructure bottlenecks, hardware incompatibility or system inoperability which prevent alternative supplies flowing to the region from Hungary, Turkey or Greece. Some of this vulnerability is of the countries’ own making. Vulnerability can also be reduced by interdependence. While the EU depends on Russian gas, so does Russia on revenues from EU imports. However, this is mainly true for oil, which represents the biggest portion of Russian energy earnings from the EU. In 2012, earnings from gas exports to the EU were a mere

10% of those from oil. Even if the falling oil price has changed that balance, oil is still the major source of revenues. How do you assess the level of diversification of natural gas resources for Europe?

Overall, Europe is in a comfortable position when it comes to energy security. Oil supply is abundant and there is little expectation that oil markets might become tight any time soon. Europe’s gas supply is well diversified with Russia,

Norway and Algeria being major suppliers. The Southern Corridor is opening up with the first nonRussian gas being brought into the EU. The increased availability of spot LNG allows Europe and its member states to further diversify. This comes at a time when the EU gas demand is falling. While in 2003, the European Commission forecasted gas demand of more than 650 billion cubic meters (bcm) in 2030, the 2011 forecast is significantly below 400 bcm. Additionally, Europe today is far better prepared to cope with a supply crisis comparable to 2009. Investment into new gas and electricity infrastructure worth 1 billion euros under the European Plan for Economic Recovery has made a difference. South Stream, arguably an attempt by Gazprom to cement its position as dominant supplier in South Eastern Europe, has been stopped by the European Commission applying competition law. Plenty of suppliers including Turkmenistan, Iran, Iraq (Kurdistan), Egypt or Israel are ready to sell gas to Europe. Energy efficiency policy and an increasing share of renewable energy further reduce demand for gas and this trend

will be continuing and possibly accelerating with the Paris Agreement. Yet Europe faces a paradox. While threats to energy supply security are limited both in the short and long term, energy security is very high on the agenda. The paradox can be explained by the general security situation. Following the gas crises in 2006, 2008 and 2009, security experts and policy makers have started to realise that interdependence with Russia reduces optionality of foreign policy. From this perspective, less dependence on Russian gas leaves more room for manoeuvring in foreign policy. As a result, the current energy security discussion is rather fuelled by general security concerns than by threats to security of supply. What are your expectations from the internal energy market? The central pillar of the EU energy policy, including external energy policy, has been the internal market. While the creation of an internal market is a legal obligation under the EU Treaty, there has always been a security of supply argument in favour of the internal energy market. The European Commission has frequently argued that a unified electricity and gas market would

be intrinsically more secure than the individual member countries’ markets. A larger market, served by a wider and well-interconnected networks, which receives electricity or gas supplies from a larger number of actors may be expected to be more stable than a combination of national markets. A resilient market is also a tool to provide solidarity among member states which has become a guiding principle with the Lisbon Treaty. Indeed with the progressive integration of national gas markets, they are increasingly interconnected via a multiplicity of pipelines. By now almost all EU member states can receive gas from different suppliers. Within Western Europe, which is responsible for 80% of total EU gas consumption, member states can choose between suppliers from the East, North, South and West as well as LNG. Gas in the Western Europe is essentially traded at ‘gas hubs” which increases supply options and reduces dependence on specific suppliers. These trading points are able to reflect the short-term equilibrium between gas supply and demand of all imported gas. This implies that the share of natural gas that is traded under long-term oil-indexed contracts is decreasing while the volume of gas, which is priced at the hubs

hristian Egenhofer is Director of Energy Climate House, a newly established think-tank within the Centre for European Policy Studies (CEPS). From 2000 to 2015 he has been Associate Senior Research Fellow and Head of the Energy and Climate unit at CEPS. He is Visiting Professor at the College of Europe in Bruges and Natolin/Warsaw, Paris School of International Affairs (PSIA) at SciencesPo and Guido Carli LUISS University in Rome. Previously, Mr Egenhofer was teaching in the MBA Programme at the Solvay Business School at the Université Libre de Bruxelles (2003-2008) and MGIMO in Moscow

(based on supply and demand = spot price) increases. The more the member states and “hubs” are interconnected by infrastructure, the more efficient and liquid markets will be. Infrastructure includes extending the pipelines but also enabling reverse flows and possibly building additional storage sites. The Paris Agreement reinvigorated the shift towards decarbonisation. Will renewable energy threaten economic growth? Any climate change policy will have costs. The only other option is to not address climate change. When we look at the European Commission Energy Roadmap of 2011, it is clear that any decarbonisation strategy by 2015 will have a very high level of renewables. Another pillar of a low-carbon energy strategy is a high level of energy efficiency. This is also reflected in the so-called Intended Nationally Determined Contributions (INDCs), the national plans to reduce GHG emissions submitted to the Paris negotiations. A high share of renewables and very high energy efficiency improvements are part of any of these plans.

(2013-14). He has published 8 books on climate change, energy and issues of European integration in addition to more than 100 reports, articles and book chapters. He is lead author of “Ever Changing Union – An introduction to the history, institutions and decision-making processes of the European Union”, arguably the “shortest textbook on the EU”, which has been published in its second edition. Christian Egenhofer holds a Master's degree in Administration from the University of Konstanz as well as a Public Law degree.

BIO 7

in depth Geopolitics and Energy Security:

From Prosperity to Survival

David S. Oualaalou: International Security Lecturer, McLennan Community College, Texas, USA

Iraqi workers at the Rumaila oil rafinery. Plunging oil prices have pitched Iraq into a severe financial crisis. (AP Photo/ Nabil al-Jurani)

s 2016 unfolds, consumers around the world continue to marvel as they benefit from unexpected low oil prices at gas stations. But many ask: What’s behind the ongoing drastic drop in the oil prices? Do market forces have anything to do with it? Or is this a political strategy targeting certain countries as some of us remember from the oil embargoes of the 1970s? The answer might surprise you. As it stands, the price of Brent crude oil—the standard benchmark for oil prices—has

dropped drastically from $115 a barrel (in 2014) to under $30. This sudden drop baffles energy analysts. While cheap oil provides consumers with some financial relief, be they in China, Russia, Germany, or the United States, it is spurring economic distress in oil-rich countries such as Saudi Arabia, Kuwait, Iran, Russia, or Venezuela. These countries’ economies depend heavily on oil revenues. From an international security perspective, this economic distress could, as I will try to show, translate into civil

unrest which could become a security threat to the established governments. The flood of cheap oil into the world market hinders the capacity of the countries in question to financially support various programmes concerning education, social welfare, transportation, military apparatus, and unemployment eradication. Economic trends generally tend to explain what drives such drastic drops in prices. In this case, let us consider three factors: First, the slowdown of Chinese

economy. China’s slowdown is a a further decrease in oil prices. vision and strategic thinking in complete reversal of the situation This price drop forces Saudi reaching a deal over its nuclear a decade ago when its appetite Arabia to dip into its reserves. programme? The answer is for energy it yes; the lifting of needed to run its sanctions finally “While cheap oil provides consumers with giant economic allows Iran to sell some financial relief, it is spurring economic m a c h i n e its oil on the open distress in oil-rich countries.” pushed prices market—ironically beyond $100 enough, further a barrel. Secondly, a decade Furthermore, the decrease in contributing to even lower prices ago, the market was unable to stock prices of oil companies is a for itself and everyone else. This supply enough oil due to the strong indicator of a large wealth possibility has already created Organization of the Petroleum shift taking place in the world. I panic in the oil market, mainly Exporting Countries’ (OPEC) argue unequivocally that Saudi in the chief Muslim competitor, decision to limit the production. Arabia misjudged the market Saudi Arabia. Thirdly, the geopolitical reaction and underestimated the Where do geopolitics fit in this landscape back then significantly possibility of Iran reaching a deal equation? What do geopolitics differed from what it is today: with the West over its nuclear and energy security have in there is a rift between Iran and programme. common? The answer lies in Iran, Saudi Arabia, an ongoing civil From the opposite end, Russia, and China. Russia and war in Syria, a failed state in Libya, geopolitics offer further support China, Iran’s main supporters, turmoil in Yemen, Iraq’s ongoing to the notion that the drop in realize that it is in their strategic sectarian violence, and political oil prices is indeed linked to the interest to provide Iran with as well as security instability in current geopolitical landscape. diplomatic cover on international Egypt. There are two main points of forums, mainly the United In my previous writings, I have interest in this discussion: Russia’s Nations Security Council (UNSC) outlined the mistakes OPEC— and annexation of Crimea and Iran’s during the nuclear negotiations mainly Saudi Arabia, the world’s nuclear programme. Both of marathon. Russia and China both leading oil-exporting country— the involved countries depend have vehemently opposed any have made when they decided, heavily on oil revenues. Could added sanctions on Iran prior to the latter reaching a deal with the West. Now that the sanctions are lifted and Iran is ready to join the world economy, China and Russia would be generously rewarded for their support. This could not be more evident than it was in Xi Jinping´s recent visit to Iran, where he signed 17 agreements worth $600 billion¹. This comes at a time when European nations are also re-establishing economic ties with Iran. Note former German chancellor Gerhard Schroder’s visit to Tehran to secure Germany’s Nigerian National Petroleum Corporation´s January report shows the biggest losses recorded. business interests. Consider also (AP Photo/ Sunday Alamba) three visits by high-level French delegations to Iran since the for political and economic this explain why Saudi Arabia latter reached its nuclear deal reasons, to keep oil production refused to cut production? Could with the West. The tentative deal at its current level. The result was this also explain Iranian leaders’ Iran reached with the European ¹Alvin Cheng and Hin Lim, “Middle East And China’s ‘Belt And Road’: Xi Jinping’s 2016 State Visits To Saudi Arabia, Egypt And Iran, Eurasia Review, January 30, 2016, http://www.eurasiareview.com/30012016-middle-east-and-chinas-belt-and-road-xijinpings-2016-state-visits-to-saudi-arabia-egypt-and-iran-analysis/

consortium Airbus to purchase than Apple, ExxonMobil, also by energy security issues, 118 passenger planes further Berkshire Hathaway, and Google forcing major powers to compete evidences its strengthening combined³. After all, Aramco’s for dominance over and access economic ties with Europe. net worth exceeds $7 trillion⁴. to energy sources. It certainly will Whether it is because of Iran’s The other issue is a legal change political calculations not nuclear agreement with the West, one. Should the kingdom move only for Iran, but also for Saudi or because of the shift in Middle forward with this offering, it Arabia, considering the longEastern geopolitics, the Saudis is legally obliged to disclose simmering rivalry between the find themselves in wilderness. relevant audits of the Saudi oil two OPEC countries. A nuclear Yet, this new policy shift betrays fields. Such a disclosure will Iran would definitely play into not only the subtle diplomatic rift highlight how much liquidity (in hands of Russia and China, who between Riyadh and Washington, trillions of dollars) the kingdom would expand their economic but also the decline of the United has in U.S. banks and economy. ties with Iran, mainly in the States’ leadership in the region. Such disclosure would have energy sector. Saudi Arabia’s engagement serious repercussions in the The lesson in all of this is that with Russia—and China, for streets of Riyadh, Jeddah, and the drop in oil prices is driven as that matter—suggests its the already marginalized, oil- much by geopolitics as it is by strategic thinking in cementing rich south-eastern part of the economics. While consumers in foundations, Europe, Japan, “The decrease in stock prices of oil companies is and a shift and the United towards Asia, States enjoy low a strong indicator of a large wealth shift taking where the gas prices at place in the world. ” economic the gas station, pre-eminence the situation of China continues to feed kingdom. And let us not forget is bleak for countries such as growth and create unlimited the country’s double-digit Russia, Iraq, Iran, and Venezuela. opportunities for corporate unemployment rate. Even Saudi Arabia, who thought interests, mainly in the energy The flip side of all this: such a it might shield itself from the sector². decision could force loyalists of economic impact of the drastic We cannot address the Crown Prince Mohammad bin drop in oil prices, finds itself in geopolitical shift and evolving Nayef—the main rival of Prince search of other means to diversify dynamics in the Middle East, Mohammed bin Salman—to its revenue sources. mainly in the energy sector, orchestrate a palace coup. This Is it the beginning of the end without discussing Saudi Arabia’s would come as no surprise to me. for the oil industry? I do not internal political and economic The bottom line is that the believe so. However, current turmoil. Prince Muhammad bin geopolitics of the Middle East, trends and a sustained oil-price Salman’s latest announcement along with the growing footprints decreasing will undoubtedly regarding a partial sale of the of China and Russia in the region, force not only OPEC members, state-owned oil leviathan Aramco the ongoing upheavals, and but also great powers back to raises two serious concerns. the recent sanctions lift from the drawing board to reconfigure First, although the Saudi Iran pave the way for a new how to prevent a massive transfer crown prince is enthusiastic world order. As I argue in my of wealth from the energy sector about the partial sale of Aramco, forthcoming book, A Nuclear to some unknown technology such a move could stifle the Iran: the New Geopolitical not on the market yet. The global energy industry, leading Landscape in the Middle East, answer to all this turmoil lies in to the creation of a company (as this new landscape will not only the outcome of the geopolitical suggested in The Economist) with be shaped by Iran’s aspirations in shift in the Middle East. far greater market capitalization view of a nuclear deterrent, but ² David Oualaalou, The Ambiguous Foreign Policy of the United States toward the Muslim World: More than a Handshake (Lanham, Maryland, Lexington Books, 2016). ³ Perry Cammack and David Livingston, “The Prince and Politics Behind a Saudi Aramco IPO,” The National Interest, January 15, 2016, http://www.nationalinterest.org/feature/the-prince-politics-behind-saudi-aramco-ipo-14909 ⁴ Sheridan Titman, “What’s the Value of Saudi Aramco?” Texas Enterprise, February 10, 2010, http://www.texasenterprise.utexas.edu article/whats-value-saudi-aramco

in depth

Energy Instruments of “Hybrid Warfare” Nataliia Slobodian: Energy Expert, National Center for Strategic Studies, Warsaw, Poland The Russian Federation (RF) has entered the 21st century with an ambitious goal to achieve the status of superpower once more, restoring Russia to its former glory. The current geopolitical strategy of the Kremlin aims to revive its influence in the international arena and its recognition as an energy superpower.

rom the Ukrainian experience we learn that energy is one of the key factors in waging a “hybrid war”. Russia is traditionally an energy and raw materials oriented state, where hydrocarbons are not just a commodity, but also a tool for achieving geopolitical objectives. To reach its political goals, Moscow has used the energy factor against Ukraine in three

A view on a Ukrainin gas station Volovets in western Ukraine. (AP Photo/Pavlo Palamarchuk) ways - politically, economically and informationally. Ukrainian energy infrastructure has become a matter of special attention in the Kremlin, since its occupation or destruction would not only cause significant economic losses to Ukraine, but also threaten the energy security of other European countries. In 2014, since the annexation of Crimea and the fighting in the

Fig.1 Ukraine‘s dependence on deliveries of Russian energy resources (in white), 2014

Eastern Ukraine, the Kremlin had been conducting energy attacks against Ukraine. It is important to note that in this period, Ukraine was totally dependent on Russia’s energy supplies in all energy sectors (Fig. 1). The overall energy balance of Ukraine was dependent on supplies from RF by 65%.

The political dimension Russia is using energy policy as a tool to achieve its foreign policy goals. In 2015, Russian government declared that transmission of Russian gas to Europe through Ukraine’s territory will be shut down in 2019, following the termination of the Russian-Ukrainian transit contract. At the same time, RF announced several possible

projects for delivering its gas to Europe while bypassing Ukraine - Nord Stream, South Stream, and Turkish Stream. Thus, on one side, the Kremlin would like to reduce the importance of Ukrainian gas transport system, while deepening the debate about the reliability of Ukraine as a transit country in the European format.

The economic dimension In April 2014, the highest possible gas price - $485 per thousand cubic meters - was unilaterally settled for Ukraine, while the European countries purchased gas at an average of $360 per thousand cubic meters. Starting from June of the same

shortage of coal became a longterm challenge for the energy security of Ukraine. After the annexation of Crimea, Moscow gained control over the Ukrainian energy facilities located outside the administrative border of Crimea. As a result of this aggression, Ukraine has not only lost the energy facilities in the territory of Crimea; with much of energy infrastructure captured, 2 billion cubic meters of natural gas were annually stolen from its oil fields. According to statements of the Ministry of Energy and Coal Industry of Ukraine, the costs of energy facilities in Crimea after the annexation were estimated at roughly $300 billion. One of the most costly losses of assets was the transition of Ukrainian state companies Chernomorneftegaz and Ukrtransgaz under the

Ukrainian-Russian confrontation, Moscow repeatedly accused Kyiv of unauthorized extraction of transit gas intended for European consumers without any evidence. The purpose of these false accusations was to paint Ukraine as an unreliable supplier in the eyes of its European partners, and respectively to cultivate distrust in the Ukrainian authorities. The establishment of a stable reverse gas supply to Ukraine from European partners and the refusal to purchase gas from Russia in 2015 has become the issue of the expert discussion “Will Ukraine pass the heating season 2015/2016?”. A number of experts in favour of the Kremlin predicted an “energy Armageddon” for Ukraine, should it further refuse to buy Russian gas. Last summer this topic was actively discussed in

“European experts generally view energy war as a phenomenon of the post-Soviet space. It is not correct to believe that such tools cannot be used on the EU and NATO.” year, Russia halted gas deliveries to Ukraine completely. In the same period about 80% of coal mines were put out of order, and railroad tracks and bridges were destroyed. It was impossible to move coal out from the occupied regions to the rest of the country, which led to a shortage of coal on the eve of the heating season 2014/2015. As a result, the Ukrainian government was very quickly looking for suppliers of Anthracite coal around the world. This situation has become a challenge for the United Energy System of Ukraine. In order to avoid energy shortages and emergency situations, rolling blackouts in power supply for the general population were implemented, and some energyconsuming enterprises went to work on a night mode. The

Russian control. To this we may add 17 deposits at the Black Sea shelf, of which 11 were gas, 4 gas condensate, and 2 oil deposits. Moreover, Ukraine has lost two unique rigs, for which the government paid $800 million from yet unrepaid loan funds. Thanks to new platforms, Chernomorneftegaz increased its gas production by 40% in 2013, and by 21% in 2014.

Informational dimension The energy component has become a tool of Russian propaganda for informationpsychological pressure on Ukrainian society and global community. At the beginning of the active phase of the

the Ukrainian media, increasing tension and anxiety in the society. Recent reports about the intention of the Italian company Eni to drill shale gas exploration wells in Ukraine were accompanied by an explosion of critical publications on environmental issues, comparing shale gas production with the Chernobyl disaster. The announcement of fuel supplies for Ukrainian nuclear power plants by American Westinghouse Electric Company has also sparked critical comments in the expert environment, where some voices anticipated a “second Chernobyl”. Transformations in the energy market and reforming national energy policies have often been used by the proRussian organizations as an occasion for critical evaluation of government actions and

acceleration of social psychosis. Any anti-crisis decision in the energy sector adopted by the Ukrainian government has been actively used for fuelling negative attitudes towards the country’s public authorities and leadership. European experts generally view energy war as a phenomenon of the post-Soviet space, arguing that Russia uses energy as a weapon in order to keep the ex-USSR countries in its zone of control. It is not correct to believe that such tools cannot be used on the EU and NATO member countries just as well. Holding such belief would be downright illogical considering Russia's proclaimed intention to use energy resources and infrastructure so as to “address national and global problems". In recent years, Russia has been using “the energy weapon” against other European countries as well: hence the reduction of oil supply to the Czech Republic in 2008, after Prague had signed an agreement to deploy American missile defence radar on its territory; or the suspension of oil and coal supply to Estonia for a month in 2007, coinciding with relocation of a Soviet war memorial (The supply cut was explained as a result of technical and logistic difficulties); or the 20% reduction in oil transit through Lithuanian ports without any given explanation in 2015. It should be also noted that large-scale projects of nontransit gas export infrastructure to Europe initiated by Russia are able to create a surplus of pipeline capacity. In absence of an integrated gas infrastructure in the EU, the Kremlin can manipulate the volume, flow direction, and prices of gas. Should relations between Russia and NATO worsen, Moscow can restrict or limit gas supplies to European countries, combining

Photo shows the headquarters of Russia's state-run natural gas giant Gazprom in Moscow. (AP Photo/Alexander Zemlianichenko) this strategy with launching an information and psychological campaign, perhaps even cyberattacks. Kremlin’s new pipeline projects will allow for selective gas supply cut-offs to Germany, Poland, Hungary, Romania, and others, reducing energy security of these countries. Ukrainian GTS and underground gas storage facilities with total active capacity of 31 billion cubic meters are of particular importance for Europe. Ukrainian gas infrastructure helps provide the gas supplies during the winter months of peak consumption in the EU. Branching of the Ukrainian GTS is immensely important here. Branching networks are not

sufficiently present in the other Gazprom routes, not even in the alternative ones. An accident at any of these directions would automatically lead to a cessation of gas supplies; but the flexibility of Ukrainian transport network allows Europe to avoid such a situation. To take an example, it took 2 weeks to eliminate the consequences of sabotage attacks on Urengoy-Uzhgorod gas pipeline in 2015. However, the gas supply to the EU did not stop for a minute: rather than an emergency pipeline, the parallel branches of two other pipelines - Progress and Soyuz - were involved instead.

on the map

EU Eyes Caspian Resources

to Boost Energy Security Kostis Geropoulos: Energy & Russian Affairs Editor, New Europe, Athens

The European Union has always strived to diversify its energy resources, turning to the Caspian Sea for alternative supplies.

The Baku oil refinery is seen with skyscrapers in the background in Baku, Azerbaijan. (AP/Dmitry Lovetsky)

zerbaijan and the EU have a 20-year energy partnership that led to constructing many projects, including the BakuTbilisi-Ceyhan (BTC) oil pipeline and the Baku-Tbilisi-Erzurum (BTE) gas pipeline. Moreover, the Southern Gas Corridor (SGC), the Trans Anatolian Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP) projects will soon bring gas from Azerbaijan’s

giant Shah Deniz 2 field to Europe. “In terms of energy security, we opened the doors of the Caspian Sea to Europe and we started to realise energy projects,” Ali Hasanov, Assistant of the President of Azerbaijan on Public Political Issues, has told me in Baku. The EU relies on Azerbaijan to lessen its gas dependence on Russia. But Hasanov said that Baku and Moscow are not competing

over the European market. “We don’t think as competitors, we think as colleagues in this field. We provide Europe with alternative gas. Russia has its own market and we have our own. Europe needs Russian gas, but also Azerbaijani gas. We also focus on Turkey with gas and some new markets,” Hasanov said. “Russia has its own traditional buyers of gas.” Energy is a strategic priority

for Azerbaijan. Gulmira Rzayeva, also investing in midstream and IGB a strategic project that enjoys a senior research fellow at downstream projects, given the the political support of Sofia and Azerbaijan’s Centre for Strategic current low oil and gas prices. Athens, which will contribute to Studies (SAM), told me “thus far “The final investment decisions for EU’s energy security. IGB, TAP the Azeri natural gas price has been projects that could bring new gas and the new liquefied natural gas the cheapest among the Turkey’s volumes from alternative sources (LNG) terminal in Alexandroupolis gas suppliers. Consequently it is to the European market may either will help Greece become a gas hub competitive”. The 6 billion cubic be delayed or postponed” Rzayeva in the Balkans. The construction of metres of Shah IGB is expected to Deniz 2 gas have start in the second “Baku and Moscow are not competing over the been already half of 2016 and European market.” contracted will take two years with Turkey’s to complete. At Botas. What will be the price at told me. the end of 2018 the pipeline will the moment when gas flows to The Shah Deniz gas is in an be operational according to the the Turkish market in 2018 is not advantageous position as they Greek energy minister. known at this point. “However, as have secured all the necessary IGB is estimated to cost about the gas price formula is linked to binding agreements. It seems €220 million, and will be partially the oil price, and given the current that Shah Deniz 2 gas is the only financed by a EU grant of €45 low price environment, which is firm alternative for the EU at the million. Bulgaria’s state owned most likely to be maintained in the moment. “I think this is the main energy holding company BEH has next two-three years, I assume that significance of the Azeri gas” a 50% in the joint venture, while the Shah Deniz 2 price for Botas Rzayeva said. Greek public natural gas supply will be lower than Shah Deniz 1 Meanwhile, Greece and Bulgaria corporation DEPA and Edison hold gas price, and quite competitive,” are moving along with plans to 25% each. Rzayeva said. The US hailed Athens’ efforts build a 180-kilometre long natural The $10-billion TANAP project gas pipeline to help Sofia reduce to implement strategic energy envisages transportation of Azeri its heavy dependence on Russian projects that will cut Europe’s gas from the Georgian-Turkish energy supplies. A Bulgarian-Greek dependence on Russian gas, border to the western border joint venture that also includes including the IGB pipeline. A of Turkey. The initial capacity of Italian energy group Edison plans gas connection with Romania is TANAP is expected to reach 16 to build Interconnector Greece- now expected to be ready by the billion cubic metres per year. Bulgaria (IGB) with an initial annual middle of 2016 and a gas pipeline Around 6 billion cubic metres will capacity of 3 billion cubic metres with Serbia should be also ready in be delivered to Turkey and the rest per year. 2018. will be supplied to Europe. Turkey The Bulgarian and Greek will get gas in 2018 and after TAP energy ministers have called the is completed, it will be delivered to Europe in early 2020. The TAP project is going according to schedule and no delay is expected. “According to TAP press releases, tender for construction works and pipe supplies has been announced, so I think we should see the pipeline in place within the set schedule,” Rzayeva said. In April, Shah Deniz-operator BP became one of the TANAP shareholders with a 12% share. The other shareholders of TANAP are Azeri state oil company SOCAR (58%) and Botas (30%). Central Baku is seen in the background, as an oil pump works a nearby hill. It is a challenging time for energy (AP/Dmitry Lovetsky) majors to develop upstream, while

EU insight Energy Infrastructure of the EU –

Strengths & Weaknesses Lívia Vašáková: Economic Counsellor, Representation of the European Commission in Slovakia

Infrastructure is the hardware of the internal market and of the EU Energy Union. Completing the internal market will enable consumers to enjoy more competitive services and prices, provide greater security of supply, and facilitate the effective achievement of our energy and climate targets.

Where do we stand? The interconnection of the electricity markets is a political priority. Although overall energy consumption within the EU is declining, the consumption of electricity, and therefore the contribution of electricity to the overall energy mix, is projected to rise. Additionally, the electricity sector can make a significant contribution to the achievement of our energy and climate targets - renewable energy is on the rise, and more and more investments are being made into energy efficiency. To facilitate this, and in order to cope with the challenges of an integrated and low carbon energy market, the electricity grid will need to be transformed. Such a transformation will require a redesign of the European electricity market as well as major investments into infrastructure. The European Council asked to take measures in order to achieve a minimum target of 10% of existing

The European Council aims to achieve a minimum target of 10% of existing electricity interconnections by 2020. (Rodion Kutsaev)

electricity interconnections by 2020, with the objective of arriving at a 15% by 2030. The completion of an EU-wide energy infrastructure system continues with the launch of electricity cable between Italy and Malta in April 2015, which ended the energy isolation of Malta; the completion of Eastlink between Finland and Estonia, Nordbalt between Lithuania and Sweden (both enabling the Baltic States to benefit from the NordPool electricity market), and the completion of interconnections between Lithuania and Poland as well as France and Spain. Natural gas represents about a quarter of the EU's energy consumption and will continue to play an important role at least in the short to medium term. Diversity of energy supply sources is vitally important to ensuring that EU Member states have adequate security of supply, reasonable prices, transparent price-setting mechanisms, and negotiating power vis-a-vis their supplier(s). However, given the decreasing energy consumption in the EU, doubts over the future amounts of gas needed, and the fact that the cost of new infrastructure will reflect in tariffs for the final consumers, a rational approach to infrastructure building should be taken. While the traditional EastWest gas link has a long history, progress has been made recently in the North-South

connection, including: the new explain the rest. Improving gas Fund for Strategic Investments unlock additional Liquefied Natural Gas terminal in market functioning and creating should Klaipeda, which brought supply a more transparent price-setting investment of at least 315 bn EUR diversification into the Baltic market mechanism could decrease over the next three years with for the first time; completion of wholesale prices in Central and energy investments expected to the gas interconnector between Eastern European countries. Long constitute a considerable portion Poland and of the final Lithuania, which ,,Solidarity these days is not only discussed portfolio. The will put an end EU Guarantee when speaking about refugees but it has a strong to the isolation provided to the energy angle as well.” of the Baltic EIB will allow States from the facilitating the European gas market; and the permitting procedures and the lack approval of projects with a higher capability to reverse flows, which of public acceptance are in many risk profile. now guarantees bi-directional cases responsible for delaying Last but not least, solidarity trade for several EU Member strategic investments into energy these days is not only discussed States as well as providing a vital infrastructure. Policy makers have when speaking about refugees alternative source of gas supply to been aware of these impediments but it has a strong energy angle as the Ukraine. for some time but solutions are well. A lively debate on the need not always coming easily. for further energy projects was Regarding financing, energy started with the announcement remains one of the most capital- of Nordstream II. A rift between intensive sectors in the EU. The V4 countries on the one side – level of investment has significantly asking for solidarity and stringent Many EU Member States are decreased since the crisis, and application of EU rules – and still not sufficiently connected to consequently, many needed Germany and Austria on the other their neighbours and some parts investments have not materialized. was clearly visible. Whether this of Europe suffer from insufficient The majority of infrastructure particular pipeline and other new internal transmission grids which projects are commercially viable infrastructure projects will be means that electricity cannot flow and should be financed via measured and tested against the freely to where it is most needed tariffs. There are, however also three objectives of the EU energy and valued. LNG terminals are opportunities to seek financing policy – sustainability, security often used only to a limited extent. through the EU budget. The of supply and competitiveness Higher prices of LNG provide only Connecting Europe Facility has might determine the success of part of the answer; insufficient already provided financing to a the EU Energy Union project. links to the main gas system might number of projects. The European

What still needs to be done?

The pumping station of the oil pipeline Friendship I at Tupá, Slovakia near Hungarian border. The pipeline connects Szazhalombatta near Budapest and Sahy in Southern Slovakia. (AP Photo/MTI, Peter Komka) 17

history chapter

Initiatives to Strengthen

the European Energy Security Szilรกrd Berta: Member of Hungarian Youth Atlantic Council, Hungary

he European Union is one of the biggest energy consumers in the world, but the lack of energy resources makes it vulnerable. The EU is the biggest gas importer in the world: in 2013, 397.1 billion cubic meters (Bcm) of gas were imported via pipelines, out of which 162.4 Bcm came from the Russian Federation. Hence, the biggest energy partner of the EU is Russia: it has the most resources, as well as the most developed infrastructure towards Europe. During the Soviet era, Europe was able to rely on the Russian Federation and Ukraine. Since Ukraine became independent, the relationships have been deteriorating, negatively influencing the carbohydrate transport as well.

NABUCCO The first initiative in this decade was the NABUCCO gas pipeline project, first announced in 2002. The project was first initiated by the Austrian company OMV and its Turkish partner BOTAS in order to diminish the position of the Russian Federation. According to the plans, the 3.300 km long pipeline would have been able to transport 20 Bcm of natural gas annually. The main partner were to be Azerbaijan, but since Baku would not be able to cover the whole export, Turkmenistan, Iran

Nabucco Gas Pipeline signing ceremony of intergovernmental agreement in Ankara, Turkey on 13 July, 2009. (AP Photo/ Aden Altan) and the Kurdish territories in the Northern Iraq were to provide resources too. The role of the Nabucco project increased during the first Russo-Ukrainian gas crisis in 2006, when Russia cut off the supply to Ukraine, which did not compensate for its consumption. On 13 July 2009, a multilateral agreement was adopted and signed by the shareholders and the Turkmen president Berdimuhamedow, confirming the treaty. In spite of this, due to the changing geopolitical realities and altered regional plans, the development of the Nabucco pipeline was finally rejected by OMV in June 2013, citing that the countries preferred the TransAdriatic Pipeline instead. We can also assume that the European

Union did not support the project too much because of the relatively high development costs (21.5 billion USD) and the relatively low transport capacity.

South Stream After the 2006 gas crisis, the main priority for the Russian Federation as well as for Europe was to bypass the transit countries - Ukraine and Belarus. In 2007, a new effort was framed between Italian gas company ENI and Gazprom. This initiative was the South Stream, developed in order to increase the energy security of Europe. The project was an individual initiative with the length of 2.506 km, out of which 930 km would run under the Black Sea, connecting Russia

directly with the European Union through the new member state, Bulgaria. Most of the Eastern European countries supported the costly project (approximately 21.5 billion USD) in order to ensure their energy supply in case of difficulties. Despite these efforts, the project was not realized, owing to the 2013 Ukrainian crisis, as well as to the conduct of Russia which negatively affected the negotiations between the parties. Moreover, a new initiative was immediately announced by Vladimir Putin in place of the South Stream: the Turkish Stream.

Turkish Stream The Turkish Stream was announced in December 2014 - after negotiations between Gazprom and BOTAS - to replace the South Stream. This effort would have allowed 63 Bcm of gas from Russia to be delivered towards the European Union via Turkey. From that amount, 15.75 Bcm of natural gas would have been used by Turkey. Turkey could have become an energy hub through this project, since its geopolitical location would enable it to transport natural gas from Russia as well as from the Middle-East towards the EU. In the beginning, the negotiations between the parties went ahead easily, but they were not able to agree on the price of the natural gas. Vladimir Putin offered 6% discounts, but Erdogan did not concede and insisted on 15%. There are some negative side effects, which can cause difficulties, making experts sceptical towards the feasibility of the project: • Lack of infrastructure – there is no adequate pipeline which could deliver hydrocarbons from Turkey towards the European Union.

Turkish Stream would have allowed Turkey to become energy hub for the gas from Russia as well as Middle East. (AP Photo/Nati Harnik) • The Russian Federation is struggling with economic problems due to the economic sanctions and the falling oil prices (30 USD/barrel). In such situation, Russia will not be able to finance such a project, which could cost as much as the South Stream. • Finally, Turkey has no sufficient gas storage system capable of stockpiling such an enormous quantity of gas. The negotiation processes between the countries got stuck owing to the current crisis revolving around the downing of the Russian SU-24 fighter jet near Turko-Syrian border on 24 November 2015. Vladimir Putin imposed economic sanctions against Turkey from January 2016. The deteriorating relations unfavourably influenced the energy relations, suspending the project from the Russian side. Besides the disputes between the two countries, in the current economic situation, Russia would not be able to cover the entire construction cost. The incident now provides a convenient opportunity to cancel this project without any further explanations.

Nord Stream 2 The Nord Stream pipeline system commenced construction

in April 2010, and was finished in November 2012. This pipeline system transports natural gas from the Russian Federation directly to Germany. The pipeline is able to deliver 55 Bcm of natural gas without passing through transit countries. In 2015, European energy companies Shell, E.On and OMV signed a new blueprint with Gazprom in order to expand the Nord Stream with two new pipelines. These two lines would be capable of transporting 55 Bcm of natural gas as well. The construction would cost 11 billion euros, further decreasing the role of the transit countries. But the implementation of the project is precarious, since the countries of central and Eastern Europe (Poland, Czech Republic, Slovakia, Hungary, Romania and Bulgaria) are reluctant towards this project. The lack of energy resources and the unpredictable environment affects the European Union, demanding more internal cohesion and integration in order to solve these sometimes unexpected issues. From the perspective of the European Union, bypassing the transit countries and depleting the Russian influence is a factor complemented by development and utilization of green energy, and the goal to create a more diversified European energy market.

visegrad news Czech republic V4 Coordinates before EU Summit

hungary Anti-terror Laws in the Making

Six countries met in Prague to discuss plans for a new “line of defense” for Europe involving double fence on the northern border of Greece. (AP Photo/Boris Grdanoski)

Hungarian Prime Minister Victor Orbán joins efforts to adopt antiterrorist legislation. (Szilárd Koszticsak/MTI via AP)

n 15 February 2016, Prague was hosting summit of V4 countries with representatives from Bulgaria and Macedonia. Prime ministers from six countries had major task to discuss current migration crisis. Their objective was to establish common position before the European Union summit held on the same topic. Among the solutions proposed by V4 countries is closing the Schengen area and the Balkans route for illegal migrants. This plan is contradictory to the proposed solution of German chancellor Angela Merkel which largely relies on the help of Turkey. Bulgarian and Macedonian Prime Ministers joined their V4 counterparts in order to work on the possibility to establish buffering zone for Schengen on Macedonian-Greek and Bulgarian-Greek boarder. However, Bulgarian Prime Minister Bojko Borisov supports solidarity with Greece and do not advocate for V4 plan. Czech Prime Minister Bohuslav Sobotka still considered summit to be an important meeting to try reach a common position.

uling Fidesz party is proposing new laws addressing the threat of terrorism. Hungary is following steps taken by Slovakia as well as other European countries in order to adopt antiterror laws. The legislation is currently drafted by the interior ministry. The details about proposed laws have not been released but the text is to be applicable for next decade and should tackle all terrorist threats. The ruling party seems not to have support from the opposition wing to amend the Constitution in this way. Opposition argues that the law gives far more wide-ranging powers to counter terroristic acts than necessary. Proposed changes ensure preventive actions against terrorist acts such as those in Paris and Cologne. The question stands how much the government can change the fundamental law before it poses threat not only terrorism but also basic rule of law in the country.

poland EU Investigates the Rule of Law Violations

slovakia Strike of Teachers and Nurses Shortly before the Elections

Supporters of the Committee for the Defense of Democracy movement stage a protest against the government in Warsaw. (Gregor Fischer/ DPA via AP)

A flag of the Initiative of Slovak teachers is being put up on the building of University of Comenius in Bratislava, Slovakia. (SITA/Marko Erd)

he European Commission has launched a formal inquiry into the possible violations of the rule of law in Poland. Preliminary assessment procedure follows controversial decisions taken by the new conservative government under Law and Justice Party. There are concerns that the new set of laws may be contradictory to democratic norms of the European Union. Recent legal changes gave the government more power over appointment of judges to the constitutional court. In addition, the party has gained firmer grip on Polish public media. Independence of judicial branch is also endangered by current inability of the constitutional court to reproach legislation. The procedure was established in 2014 after the EU failed to respond to the political changes in Hungary. The assessment will start in March in order to evaluate the situation. If the violations are proven, the EU will make recommendations to be applied by the government. Should Poland fail to fulfil them, the EU may sanction the country by denying it access to EU funding or by suspension of voting rights within the EU.

ast few weeks in Slovakia have been marked by dissatisfaction of its citizens which ensued in massive strikes of nurses and teachers. Both groups fight against constantly deteriorating conditions in Slovak health and educational system. In January, more than 200 schools joined the protest and many even stayed closed during the general strike. Similar situation occurred in the hospitals where more than 1200 nurses resigned from their positions. Although, nurses reached agreement with the government, all conditions still have not been met and teachersÂ´ demands still were not properly addressed. Current central-left government has presented several social packages targeted to specific groups but failed to tackle systemic problems of general concern. Higher wages for judges or gas refund do not solve social unrest across the country. As the general elections are scheduled for 5 March 2016, all major decision are being left for the next government.

op-eds

Venezuelan Oil Diplomacy Michal Hertlík: Student of International Relations, Matej Bel University, Slovakia

Street art celebrating late Venezuelan President Hugo Chávez who died of cancer in March 2013. (Michal Hertlík)

enezuela is a world widely known primarily through the person of Hugo Chávez, his Bolivarian revolution and the project of „Socialism of the 21st century“, as well as confrontational approach to the USA and imperialism. Apart from that, high oil production and export advocated by „oil diplomacy“ are also inseparably intertwined with Venezuela. Venezuela is one of the few countries in the world that can boast the fact that its policies are thoroughly founded on oil and gas. And rightly so, considering

that from the beginning of the 20th century, the „black gold“ has made Venezuela into a global oil superpower practicing oil diplomacy. As a result of this diplomacy, Venezuela has acquired great wealth, and was even dubbed „Saudi Venezuela“ for its inexhaustible oil reserves comparable to Saudi Arabia and other Middle Eastern countries in the 1970s. Every year Venezuelan oil business represents approximately 87% of country’s total export. On the other hand, compared to other Latin American countries, one

of the significant disadvantages has been its low potential for non-oil production. If it were not for Venezuela’s vast oil potential, it would be difficult for the country to compete with other emerging South American economies (such as Peru), since Venezuela does not have appropriate resources and a convenient political party to achieve similar ascent and economic power. However, the oil wealth should not be abused as a means to achieving a hegemony. During the presidency of Carlos Andrés

Pérez, Venezuela suddenly jumped to a dominant position in the region precisely because of its oil export and oil diplomacy. Venezuela recorded the best performance of all the Andean Community members, which happened to be the reason why other Latin American countries wanted to join the community as well. Chávez's efforts during the first months of his government tended to be in a close relationship with the Arabic world, making the oil a real tool for implementing his foreign policy. It might have seemed like the country had let its oil wealth slip through its fingers due to daily export on low prices, but according to the ruling socialist party PSUV (Partido Socialista Unido de Venezuela then led by Hugo Chávez, currently by president Nicolás Maduro), this was a premeditated policy. The increase in international oil prices and its consequent economic impact handed Chávez a solid platform to promote the Bolivarian

Venezuela's President Nicolas Maduro delivers his annual state of the nation report on 15 January 2016. Maduro said he would declare an economic emergency giving him 60 days to unilaterally enact sweeping reforms. (AP Photo/Fernando Llano)

trade program. Additionally, Venezuelan oil company PDVSA (Petróleos de Venezuela, S.A.) gradually started to cooperate with the refineries and pipelines in Cuba (Cienfuegos), Brazil (Pernambuco), Argentina and Colombia. The other oil initiatives besides PetroCaribe were PetroSur and PetroAndina. Venezuela provides its oil for symbolic preferential prices or exchanges it for livestock, agricultural machinery and IT programs, but all of that

“Earning the so-called „oil dollars“ allowed Chávez to fulfil his geopolitical ambitions.” revolution through foreign policy. Earning the so-called „oil dollars“ („petrodólares“) allowed Chávez to fulfil his geopolitical ambitions, subsidize leftoriented governments in South America and literally buy their support for the enforcement of his requirements. Over the years, Venezuela has also tried to base import and mainly export of its goods and services on the essential pillar of „oil diplomacy“. In terms of oil export, Venezuela signed an agreement with its neighbours Cuba, Jamaica, and the Dominican Republic in 2005, and together they created the company PetroCaribe, an ambitious international oil

applies only to the countries which Venezuela considers to be their ideological allies – promoting clientelism and selective cooperation. Any other country has no chance to obtain the mentioned advantages from Venezuela. For instance, immense oil supplies are directed to Cuba, one of the countries favoured by Venezuela. Cuba then pays for a part of Venezuelan supplies with money, while another part is payed for by sending medical, education and sports staff to Venezuela. With regards to countries outside the American continent, we could surely underline China's growing role in the export of

goods and services to Venezuela. China imports Venezuelan oil and conversely introduces direct foreign investments to Venezuela and places Chinese products on Venezuelan market. Moreover, between 2006 and 2010 Venezuela has formed with China several companies dedicated to oil production in the area of Orinoco River: Petrolera Sino-Venezolana (2006), Petrozumano (2007), Sinovensa (2008), Petrourica (2010). Naturally, Venezuela gains significant benefits from the relationship with China, which helps the country increase its oil production and capacity of refineries. Compared to the South American economic dragons, Venezuela is a major oil producer and exporter with the largest natural gas supplies on the continent. Venezuela knows how immense its oil reserves are. However, if the current socialist government (or even the opposition, if it ever happens to come to power by any chance) does not take the situation into its own hands, if it neglects to take the appropriate steps and adopt the necessary reforms, the country will soon lose its oil reserves to weak policy management and face cruel consequences we currently cannot even imagine.

op-eds

Armenia 2.0: Key Reasons

for the Constitutional Reform

Ashot Ginosyan: Masters of Law Student, Tallinn University, Estonia

nternational integration, effective application of the rule of law, establishing power-centred constitutional-legal model, proper separation and balancing of powers, revision of legal status of the National Assembly, and fixing the justice administration system - these are the key objectives for constitutional reforms in the Republic of Armenia. The constitutional developments in Europe and North America are a fine illustration of the direct application of fundamental rights and freedoms in adjusting the relationship between state authorities and individuals. Creating a platform for self-expression and self-realization so that human rights are put to the forefront, such direct application proved to be an in-

dispensable step towards progress. In most of the former USSR countries, which include Armenia, the states enshrined the fundamental rights and freedoms in their constitutions

“The power of the President of the Republic must be reduced to that of an arbitrator or a mediator.” without making any legal distinction between them and the clear legal vision as to the limitations therein. Moreover, there is no well-defined differentiation between classic and social fundamental rights, as well as no clarification on the judicial protection of those rights. In this respect, new conceptual approaches are needed to

Armenian President Serzh Sargsyan is sworn in during his inauguration ceremony in Yerevan, Armenia in April 2013. (AP/Davit Hakobyan) 24

clarify the rights, freedoms and duties in terms of their content, judicial protection and the extent of limitations granted. Directly applicable, subjective fundamental rights must be differentiated from fundamental

rights. A distinction is also to be made between social basic rights and classic basic rights. Furthermore, the concept of “Democratic State” is characterized by the principle of separation and balancing of powers, where counterbalancing and restraining powers are ensured. However, in the current system, the President of the Republic has sufficient power to monopolize both the executive and legislative spheres without any efficient counterbalances. In addition, there are no clear constitutional and legal mechanisms and methods for settling disputes that arise between President of the National Assembly and President of the Government. While such disputes may be resolved in good faith with enough political will and consensus, they should be really settled within a solid legal framework. In this regard, the new constitutional reforms attempt to delineate precise functions and

powers for each branch of the state power, establishing an effective system of checks and balances. More specifically, the legislative and supervisory role of the National Assembly needs to be strengthened, conferring to it the power to form state authorities and administrative bodies. Crucially, the power of the President of the Republic must be reduced to that of an

solely to the strict observance of law so as to guarantee a sound administration of the justice system. Sadly, high rate of corruption in both private and public sectors constitutes a major obstacle to the promotion of democracy and rule of law. Within the framework of various action plans with Council of Europe, OECD, and the European Union,

law and antitrust enforcement system in the country, the number of statutory and private monopolies (as well as hard-core cartels) with significant market shares has increased, preventing small and medium sized undertakings from entering the market, totally eliminating the economic freedom on the marketplace. Indeed, this is the main reason why Armeniaâ&#x20AC;&#x2122;s accession

Russian President Vladimir Putin meets with his Armenian counterpart Serzh Sargsyan at the Novo-Ogaryovo residence, outside Moscow in September 2015. (Vasily Maximov/Pool photo via AP) arbitrator or a mediator, and his relations with other branches of power must be defined at the constitutional level. In respect to the judicial power of the State, it does not possess effective and well-functioning tools to counterbalance the two other branches of state power due to its lack of independence and impartiality, which makes it vulnerable to political influence. Decisive measures must be implemented to ensure this independence and impartiality of the national judges, shielding them from political influence from both outside and inside, allowing them to commit

Armenia has taken several steps to improve its anti-corruption policies, yet a sufficient result has not been achieved so far, which causes distrust on the part of general public towards the court system. Even though constitutional reforms may currently seem like the key priority in Armenia, there are other aspects requiring urgent response and reforms vital for the stateâ&#x20AC;&#x2122;s well-being. Over long time, no effective economic reforms have been carried out, leading to widespread monopolization and allocation of national market. In fact, due to the absence of competition

to the Eurasian Economic Union or possible integration with the European Union cannot bring any economic prosperity and integration. To sum up, in the Republic of Armenia, the general public requires state actions in the economic sphere to establish market democracy with an open, free and fair competition, with no dominant undertaking able to drive small businesses out of the market. Only such policy would serve as a solid foundation for constitutional reform and democratic transition.

Propaganda monitor

Information War in Central

Europe: December 2015 Fuad Shahbazov: Member of the Board, Center of Security and Strategic Studies, Italy

CEPI’s monthly overview of conventional and social media discourse in the Czech Republic, Hungary and Slovakia monitors propaganda and disinformation attempts, as well as democratic responses in the on-going information war, in order to increase awareness about this recently emerged challenge and promote factbased discussion in Central Europe.¹

owards the end of 2015, the content of proKremlin propaganda has been adapted to the new eventualities of the international landscape and to the changing geopolitical aims set by Moscow itself. Migration and its relation to terrorism, military intervention against “terrorism” in Syria, and deteriorated relations with Turkey became the new leading issues of proRussian propaganda. Moscow is more effective in using these topics to divide, demoralize, and demonize the West than it was with the Crimean crisis, as the consequences for the Europeans are perceived to be more imminent. The crisis in Ukraine has

“There are almost as many whites as there are natives, we are surely going to perish! – We should change the immigration laws. – Shut up you RACISTS, multiculturalism will enrich our culture!”

clearly taken a backseat in the context of Russia’s growing economic pains that are exacerbated by the economic sanctions imposed by the EU and the USA and the falling prices of crude oil currently at the $30 per barrel level. By offering military cooperation in the fight against the Islamic State, Moscow tried to ease tensions with its European

partners (and weaken their sanctions) on the tailwind of the horrible Paris terror attacks.

Migration, terrorism, and Chancellor Merkel While the propaganda argues for the lifting of the sanctions, it uses the migration crisis to “divide and rule” the EU

¹Shortened by editorial board of Euro-Atlantic! magazine. Full version with references available here: http://www.cepolicy.org/ publications/information-war-monitor-central-europe-december-2015

and its member countries. This goal is achieved by connecting the influx of migrants with the alleged imminent threat of European terrorism, blaming the European mainstream for failing to deliver an adequate answer to the crisis, and by enhancing dissident voices who demand draconian measures against migration. German Chancellor Angela Merkel is under constant attack for her “soft” approach to migration which, according to hidfo.ru, “harbors a new dawn of terrorism”. Czechbased parlamentnilisty.cz blames Ms Merkel for having a debate on the refugee crisis solely with the Western countries and ignoring the rest. It is also highlighted that the Chancellor’s approval rating is falling and that the Germans do not want her to run in the next elections. The Aeronet website informed its readers that Germany had warned the EU member countries of a legal action they might face for not implementing the quota system and that “the German army would invade the Czech [Republic]” to enforce the policy.

Hungarian Orientalista.hu claims that “800 thousand refugees have gone back to Syria due to the efforts of the Russians.”

intervention in Syria and undermine Western position in the region. The Russian intervention is depicted as fundamentally different from the previous Western military adventures as it restores stability, a prerequisite for halting migration, effectively combats terrorism, and ultimately restores the legitimate power of Syrian President Bashar alAssad. The Kiállunk Oroszország mellett (We stand by Russia) Facebook page cites Russian Foreign Minister Lavrov declaring: “The issue about Syria is being used by the the fate and legitimation of Kremlin as a new Crimea. It President Assad is not closed”,

The Middle East and Syria

Syrian president stating: “If only the [Czech] nation had a politician the kind of Bashar Assad who would stand behind his nation even when facing the predominance of the Western world, their money, weapons and terrorists”. Western intervention is demonized on multiple fronts. The West is aiding the terrorists by attacking Syrian government forces from the air and even secretly evacuating leaders of the Islamic State. Furthermore, aeronet.cz informed that the US Department of Defense started to ask the allied nations for help in the fight against the Islamic State, which would imply that

“While the propaganda argues for the lifting of the sanctions, it uses the migration crisis to “divide and rule” the EU and its member countries.” enables President Putin to cast himself as the defender of his people, even Europe, from an outside force. The information warfare makes continuous efforts to legitimize the Russian

since the Vienna talks have acknowledged the Syrian people’s sole right to decide their own future for themselves. Aeronet.cz published its own analysis which praised the

“the Czech professional soldiers would soon be called up and might start to prepare for their deployment in Syria and Iraq”.

“A massive information war campaign has been directed against Turkey and President Recep Erdoğan after a Russian warplane was shot down.”

The picture depicts Barack Obama proclaiming that the USA are effectively fighting with the terrorists. Vladimir Putin replies, “Yes, I do trust what you’re saying. However it is necessary to fight against them, not with them.”

Turkey and President Erdogan A massive information war campaign has been directed against Turkey and President Recep Erdoğan after a Russian warplane was shot down by Turkish air-defence forces. Turkey is accused of having

contracted the Islamic State for oil and Erdogan and his family of making $ 2 billion annually on this oil business. Turkey is also accused of arming terrorists with chemical weapons. According to the Czech version of Sputnik, President Putin announced that Russian government knows who in Turkey is making money on oil business with terrorists and

the deputy minister of defence Anatoliy Antonov revealed it was the Turkish leadership including President Erdogan. The Czech server ac24. cz informed that Russian MP Vladimir Zhirinovsky proposed to solve the situation by a nuclear attack against Turkey. This is contrary to official position of the Russian president who claimed that there would not be any hysteric military retaliation. A Czech portal Parlamentní listy published a commentary suggesting that Turkey had driven the world to the verge of a new world war. According to Branislav Fábry, a member of the Slovak-Russian Society, a Russo-Turkish war would mean that Slovak soldiers would have to fight on the Turkish-Islamist side. The Turkey-bashing also included promotion of voices claiming that Turkey should not be part of the European Union (Andrej Danko, Slovak National Party) and should be expelled from the NATO (US Congressman Dana Rohrabacher).

Edited by Milan Šuplata, senior fellow at Central European Policy Institute; Péter Krekó, Director at Political Capital Institute; Jakub Janda, Deputy Director at the European Values Think-Tank; Lóránt Győri, Analyst at Political Capital Institute. This document was published in the framework of projects run by the Slovak Atlantic Commission and supported by the National Endowment for Democracy and the NATO Public Diplomacy Division.

CALENDAR february

12-14 The Munich Security Conference The Munich Security Conference is a major annual global forum for discussion on international security. It has been taking place since 1963, bringing together each February more than 450 senior decision-makers from around the world.

European Day for Victims of Crime In 1990, Victim Support Europe - the leading European umbrella organisation advocating on behalf of all victims of crime - declared 22nd of February to be the European Day for Victims of Crime. Since then, victim support groups across Europe have come together on this day to raise awareness of how crime can affect victims and their wider families.

Irish general election The voters in Ireland will once again elect members of the Dáil – the lower but main chamber of the Irish legislature. The early election was called after the chamber was dissolved by President Michael D. Higgins on the advice of Prime Minister (‘Taoiseach’ in Gaelic) Enda Kenny on 3 February 2016.

march

3-24

Second Round of the Referendum on the New Zealand new flag During the last few decades, there have been numerous calls for a new flag for New Zealand. People argue that the current flag is too similar to the Australian one, or that it is no longer appropriate for the Union Jack, the national flag of the United Kingdom, to dominate that of New Zealand. By law, the flag can be changed via simple majority vote of the Parliament. However, the government has decided that the flag uniting New Zealanders should be selected by the people. In the second round of referendum, the voters will choose between the current flag design and the alternative chosen in the first round at the end of the last year.

Slovak Parliamentary Election In Slovakia, Parliamentary election will take place on 5 March 2016. The 150 members of the National Council will be elected by proportional representation in a single nationwide constituency with an electoral threshold of 5%.

International Day for the Elimination of Racial Discrimination Each year on 21 March, the United Nations’ International Day for the Elimination of Racial Discrimination is observed. The Day was proclaimed in 1966 in memory of the Sharpville massacre in 1960. Sixty-nine people were killed and eighty were wounded when a peaceful demonstration against the apartheid "Pass laws" in South Africa turned into a bloodbath. The tragedy marked an important step in the fight against racism, and brought international attention to the necessity to continue fighting racial discrimination.

April

NATO established On this day in 1949, the North Atlantic Treaty Organization was established by 12 Western nations: the United States, Great Britain, France, Belgium, the Netherlands, Denmark, Italy, Luxembourg, Norway, Iceland, Canada, and Portugal. At the time, NATO provided a collective self-defence against the Soviet Union, and significantly increased American military influence in Europe. To this day, NATO remains the main security guarantor for its member countries against various kinds of contemporary military and non-military threats.

International Day of Reflection on the Genocide in Rwanda The United Nations General Assembly adopted on 23 December 2003 a resolution designating the 7th of April – the first day of the 1994 genocide in Rwanda - as the International Day of Reflection on the Genocide in Rwanda. Every year the United Nations organise commemorative events at its Headquarters in New York and at other UN offices around the world.

quiz 1. Hundreds of policemen were deployed to suppress a demonstration taking place in Cologne in January 2016. Riot police had to use a water cannon to disperse antiimmigrant protesters, who were throwing firecrackers and bottles. Right-wing groups, headed by _______ movement, gathered after reports emerged of a wave of sexual assaults on women on New Year's Eve. a) Pegida b) The National Democratic Party of Germany c) Free German Workers' Party d) The German Alternative 2. Catalonia’s president, _______, announced that he will not be standing as a Junts pel Si (Together for Yes) candidate for the re-election into the post of president of the regional government. He made his decision after disagreements between secessionist parties, which have blocked establishment of a Catalan government. a) Artur Mas b) Jordi Sànchez i Picanyol c) Joana Ortega d) José Montilla Aguilera 3. Recently, the EU signed a short-stay visa waiver agreement with _______ at a ceremony which took place in Brussels. This new visa regime enables visa-free travel for their citizens for a period of stay of 90 days in any 180-day period. It applies to all categories of persons and for any kind of travel purposes, except for persons travelling in order to do paid activity. a) Uruguay b) Paraguay c) Chile d) Colombia 4. Moldova's prime minister, _______, has dismissed calls from anti-corruption protesters for his government to step down. The protest attended by more than 20,000 people brought together pro-European and pro-Russian citizens as they jointly stood up against inequality and corruption in the country. a) Gheorghe Brega b) Nicolae Timofti c) Pavel Filip d) Valeriu Streleț

5. The people of _______ have recently elected their first female President. Tsai Ing-wen is the leader of the Democratic Progressive Party. She obtained 56% of the vote to end eight-year rule of the Nationalist Party. a) Bangladesh b) The Philippines c) Myanmar d) Taiwan 6. In the beginning of January, Pentagon announced that the number of detainees at the Guantanamo Bay centre is expected to drop below _______, with 10 prisoners to be transferred to the custody of Oman. Even though the number has decreased considerably in recent years, there still remain many prisoners that are difficult to hold elsewhere. a) 100 b) 150 c) 200 d) 250 7. On 8th January, the drug lord Joaquin "El Chapo" Guzman was recaptured by Mexico's authorities. It was the _______ time the drug lord of Mexico's most powerful Sinaloa Cartel has been caught. a) 1st b) 2nd c) 3rd d) 4th

8. In the very beginning of January, Saudi Arabia announced cutting its diplomatic relations with Iran and it is about to withdraw its diplomatic staff from Tehran. The political tension sparked by the execution of the Saudi Shia cleric Sheikh Nimr alNimr culminated after _______. a) Iran´s termination of mutual economic agreement b) both sides engaged in an arms race c) protesters attacked the Saudi embassy in Tehran d) verbal attacks between government officials 9. The President of Nigeria, Muhammadu Buhari, recently addressed a message to Nigeria’s main development partner, _______, claiming that “democracy has come to Nigeria to stay”, soon to make it a country to be “counted amongst the most stable, strong, and virile democracies in Africa.” a) The US b) The EU c) The UN d) The UK 10. The World Health Organization designated the Zika virus a public health emergency of international concern. Even though the virus seems to have come from nowhere, it was discovered nearly _______ ago in a rhesus monkey in the Zika forest near the Lake Victoria in Uganda. a) 40 years b) 50 years c) 60 years d) 70 years correct answers: 1A, 2A, 3D, 4C, 5D, 6A, 7C, 8C, 9B, 10D

INTERNATIONAL AFFAIRS I SECURITY AND DEFENCE

editor-in-chief Project Coordinator language corrections graphic design photography

Katarína Schwertnerová Ivana Slobodníková Tomáš Grenzner Adam Cisár SITA, TASR

Slovak Atlantic Commission Kuzmányho 3, 974 01 Banská Bystrica Mobile: 00421 / 948 120 537 Tel./Fax.: 00421 / 2 544 106 09 E-mail: sac@ata-sac.org

editorial headlines

Katarína Schwertnerová Katarína Schwertnerová Daniel Fekete Katarína Schwertnerová Ján Čverha Soňa Trojanová Katarína Schwertnerová Alžbeta Djurbová Katarína Schwertnerová Ivana Slobodníková Tiago Ferreira Lopes Milan Šuplata Lea Sekanová Nikola Kmecová

Issue 1/2016 Publication date: 25 February 2016

intreview in depth on the map EU insight history chapter visegrad news op-eds propaganda monitor calendar quiz

The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and their publication does not constitute an endorsement by the Euro-Atlantic! think.act.lead. The editorial board of the Euro-Atlantic! think.act.lead. reserves the right to shorten and revise articles when necessary.

Published with financial support of NATO PDD and National Endowment for Democracy

Headquarters: Klariskรก 14 811 03 Bratislava Slovak Republic Tel/fax: 00421 / 2 544 106 09 e-mail: sac@ata-sac.org www.ata-sac.org