Publisher: OSW Ośrodek Studiów Wschodnich im. Marka Karpia

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Elections to the European Parliament: the beginning of an electoral marathon in Germany

Elections to the European Parliament: the beginning of an electoral marathon in Germany

Author(s): Kamil Frymark,Lidia Gibadło / Language(s): English

Keywords: Germany; European Parliament; SPD; CDU

For German politicians, the European Parliament (EP) election is the most important test of voting intentions ahead of the regional elections in eastern federal states planned for this autumn and the elections to the Bundestag in 2025. This is why domestic issues, in particular the proposal to curb migration and the commitment to ensure security, are important elements of the platforms which the parties prepared for the recent EP election campaign. The importance of this campaign and the outcome of the election is corroborated by the strong involvement of Chancellor Olaf Scholz and the majority of ministers in it. However, the opposition Christian Democrats (CDU/CSU) are topping the polls with their new conservative platform.

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Running on European tracks. Modernising the rail network in western Ukraine during wartime

Running on European tracks. Modernising the rail network in western Ukraine during wartime

Author(s): Sławomir Matuszak,Konrad Popławski / Language(s): English

Keywords: Ukraine; EU

The Ukrainian government has used the ongoing war as an opportunity to carry out a rapid transformation of the railway infrastructure in the western part of the country. This process is expected to both increase the capacity of the railway lines leading to the EU in the short term, and to result in the local logistical hubs taking over a significant share of the added value generated by rail transhipment operations. The construction of a large hub at Sknyliv near Lviv is the key element of the government’s plan. Due to the building of the standard-gauge railway to the border, plans have been made to connect the future hub to the rail networks of Poland and Romania as soon as possible, alongside the terminal at Mostyska which operates nearby.

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Year two of the war: Russia goes on the offensive, the West trapped in its strategic delusions

Year two of the war: Russia goes on the offensive, the West trapped in its strategic delusions

Author(s): Wojciech Konończuk / Language(s): English

Keywords: Russia; Ukraine

The second year of Russia’s invasion of Ukraine has not brought any breakthrough, let alone a resolution to the conflict, and all indications are that none of this could have been avoided. After 24 months of facing Russia’s full-scale assault, the Ukrainian forces are still able to mount a successful defence along a frontline that stretches for some 1000 km, and they have even managed to recapture a significant part of the territories they lost in the first phase of the conflict. Prior to 24 February 2022, anyone who had thought up such a scenario would likely have been dismissed as an unrealistic fantasist.

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Chronicle of a death foretold. Putin gets rid of Navalny

Chronicle of a death foretold. Putin gets rid of Navalny

Author(s): Maria Domańska,Marek Menkiszak,Katarzyna Chawryło (Jarzyńska) / Language(s): English

Keywords: Russia; Alexei Navalny

On 16 February, the Russian Federal Penitentiary Service announced that Alexei Navalny, the leading figure of the Russian democratic opposition, had died in a penal colony. The circumstances of his death remain unclear, and the official report contains inconsistencies that suggest attempts at manipulation. Without an independent investigation (which is unlikely), it is impossible to decide whether Navalny’s death was due to ‘natural’ causes resulting from prolonged physical ill-treatment, or a premeditated murder ordered by the Kremlin.Putin’s responsibility for the demise of Alexei Navalny, who had long been a long-term political challenge for Russia's president, is beyond doubt. This death has provoked displays of grief and mourning among those Russians who are critical of the Kremlin, but it will not destabilise the domestic political situation, and will in fact weaken the Russian opposition operating in exile. Despite the outrage and condemnation expressed by Western leaders, it will not significantly affect Western policies towards Moscow.

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Fiala’s government halfway through its term: security reinforcement overshadowed by economic problems

Fiala’s government halfway through its term: security reinforcement overshadowed by economic problems

Author(s): Krzysztof Dębiec / Language(s): English

Keywords: Petr Fiala; Czech Republic

Petr Fiala’s cabinet, which has been in power in the Czech Republic since December 2021, is facing a record decline in support at the halfway point. This is an effect of its waiting too long to address the issues caused by inflation and breaking its promise not to raise taxes. Although living standards in the country have deteriorated, the governing centre-right coalition is pushing through its unpopular budget consolidation package. The backdrop for the government’s poor ratings is the substandard economic performance – the Czech Republic is the only EU country whose GDP has still not reached pre-pandemic levels. This is also partly a result of the country’s very strong trade and investment ties with Germany, which is struggling with numerous economic problems.

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Key to the future of the Energiewende: support for building new power plants

Key to the future of the Energiewende: support for building new power plants

Author(s): Michał Kędzierski / Language(s): English

Keywords: SPD-Greens-FDP coalition

It took many weeks of negotiations for the leaders of the SPD-Greens-FDP coalition to reach a compromise on the strategy for building new power plants, which are intended to complement renewable energy sources (RESs) and enable the final phase-out of coal. The first step in this direction is to provide financial support for investments in gas power plants with a total capacity of 10 GW which can be transitioned to hydrogen, followed by the development of a capacity market concept, which is expected to come into effect no later than 2028. The agreement is quite general in nature, but nevertheless it marks a political breakthrough. However, many decisions on the key details will still have to be made in the future, which means that tough negotiations within the coalition must be undertaken, and the entire mechanism will still need to be approved by the European Commission (EC). The scale of support for the construction of new power plants, which is much smaller than originally envisaged, means that Germany can no longer be expected to phase out coal by 2030. Nevertheless, this is a top-priority initiative in Germany’s energy policy in this parliamentary term, and failure to implement it will prevent the process of the Energiewende from continuing.

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On the threshold of a third year of war. Ukraine’s mobilisation crisis

On the threshold of a third year of war. Ukraine’s mobilisation crisis

Author(s): Jakub Ber / Language(s): English

Keywords: Ukrainian army; Russia

At the end of 2023 the Ukrainian army was facing a serious crisis involving manpower shortage, aside from the even more serious problem posed by the shortfall of weapons and ammunition. This is particularly evident as regards the infantry, which has formed the backbone of the forces fighting against Russia and has suffered the most severe losses. The majority of volunteers enlisted in the first months of the war, while opportunities to recruit thousands of new ones have now been exhausted. Although a mobilisation process has been underway since spring 2022, due to the present legal and organisational constraints it is selective in nature, and has proved unable to meet the needs of the armed forces in terms of unit replenishment and rotation. These problems are further aggravated by the soldiers’ high average age (around 40); this translates into poor physical condition & health, and they lack the stamina to withstand the hardships of gruelling trench warfare. In some aspects, the causes of the crisis involve the army itself, and result from many years of neglect and irregularities affecting the military draft centres. However, the main factor hindering the improvement of the situation has been political.

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Will Russia pay for the war? Efforts to create a compensation mechanism for Ukraine

Will Russia pay for the war? Efforts to create a compensation mechanism for Ukraine

Author(s): Marcin Jędrysiak / Language(s): English

Keywords: Russia; G7

The almost two-year-long Russian assault has inflicted huge losses on Ukraine. According to the World Bank, the latter lost $135 billion in direct costs in the first twelve months of the war alone. The total economic, social and monetary damage has been estimated at $290 billion, while the funding needed for reconstruction has been estimated at $411 billion, equivalent to 2.6 times Ukraine’s GDP in 2022. In order to partially cover the latter, Ukraine has been working to persuade its partners to create a compensation mechanism through which the Russian assets that have been frozen in Western countries could be transferred to Ukraine. This is potentially a vast pool: the G7 countries and the EU have blocked reserves from the Central Bank of Russia’s (CBR) worth more than €300 billion, as well as around $60 billion in private funds. However, Ukraine’s plans face a number of obstacles. Western countries are yet to develop legal instruments that would allow them to confiscate these funds. There are also grave concerns that the status of the dollar and the euro as international reserve currencies could be undermined, and that other countries could come forward with compensation claims. Furthermore, a compensation commission has never started work in the midst of an ongoing war.

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A disaster of their own making. The demographic crisis in China

A disaster of their own making. The demographic crisis in China

Author(s): Michał Bogusz / Language(s): English

Keywords: China

China is currently facing demographic problems which closely resemble those seen in most developed countries. However, it has had less time to deal with the consequences of the population crisis. Furthermore, as the Chinese public is clearly less prosperous, the crisis has had a more negative impact on the country’s residents and economy. All this is an effect of the family policy mistakes that have been made since the early 1980s, as well as the system’s prolonged inability to make swift adjustments, despite the emergence of unfavourable demographic trends at the turn of the century.

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A lot of effort, not many results. Latvia’s belated de-Sovietisation

A lot of effort, not many results. Latvia’s belated de-Sovietisation

Author(s): Bartosz Chmielewski / Language(s): English

Keywords: Russia; Latvia

The Russian invasion of Ukraine marked the beginning of a new chapter in the Latvian state’s policy towards the Russian-speaking minority which accounts for around a third of the country’s population. The shock caused by the Russia’s attack and the crimes it perpetrated drove Riga to decide to reorganise Latvian society and to eliminate all things Russian alongside the remnants of the colonial Soviet past. The government’s long-term goal is to put an end to the disputes which Moscow constantly stokes and which have been dividing the public for decades. The main instrument of these activities involves rapid legislative amendments regarding issues such as education, culture, migration policy and citizenship legislation.

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Fear of retaliation: Germany’s concerns about punitive tariffs on electric cars from China

Fear of retaliation: Germany’s concerns about punitive tariffs on electric cars from China

Author(s): Sebastian Płóciennik / Language(s): English

Keywords: European Union; Germany; China

The European Union is nearing a decision on whether to impose restrictions on imports of electric cars from China. The German automotive industry is observing this scenario with apprehension as it expects both retaliation from the government in Beijing and a further erosion of its position on the Chinese market, which is crucial for its turnover and profits. Germany’s federal government has taken due consideration of the need to protect the EU’s competition rules and the development of e-mobility, but it also fears retaliation from China, and in particular, its spillover into other sectors of the economy.

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The EU Rapid Deployment Capacity: political priorities and real needs

The EU Rapid Deployment Capacity: political priorities and real needs

Author(s): Łukasz Maślanka / Language(s): English

Keywords: EU Council; European Union; Rapid Deployment Capacity

The Belgian Presidency of the EU Council, which commenced on 1 January this year, is prioritising the implementation of the objectives outlined in the Strategic Compass. This includes the initiation of EU rapid reaction forces, referred to as the EU Rapid Deployment Capacity (RDC), which will have a projected strength of up to 5000 soldiers by 2025. EU institutions believe that fulfilling this ambitious plan is a matter of great political importance. Josep Borrell, the EU High Representative for Foreign Affairs and Security Policy, has prompted member states to commit to providing the missing elements of strategic support known as strategic enablers, but some countries are hesitant to engage resources in an endeavour that prioritises the security needs of the EU’s south and stands in competition with NATO initiatives. The pursuit of political success inherent in the fulfilment of the Strategic Compass’s goals is likely to culminate in the creation in good time of the RDC. However, it may fall short of some of the envisioned resources and strategic enablers, which will raise doubts about how effectively it can be utilised in the future.

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Paradise lost? Falling foreign investments in China

Paradise lost? Falling foreign investments in China

Author(s): Maciej Kalwasiński / Language(s): English

Keywords: The People’s Bank of China; China

The People’s Bank of China has reported that the third quarter of 2023 saw an outflow of foreign direct investment (FDI); this is the first time this has happened in at least 25 years. However, these data do not fully reflect real economic processes. Foreign companies have long appreciated China due to the appealing business conditions on offer. However, the investment climate in this country has been deteriorating in recent years due to Beijing’s domestic policy and its escalating rivalry with Washington. The People's Republic of China led by Xi Jinping has given special priority to economic security, introducing a number of regulations that have adversely affected foreign investors. However, business circles, encouraged by the US and EU authorities to de-risk, have responded to the mounting challenges in different ways. Some companies are cutting investments to reduce the risks associated with their strong ties to the Chinese market, others are increasing expenditure to strengthen and isolate their Chinese operations. Getting the proportions right is a challenge, but a complex mosaic of data paints a picture of a structural decline in FDI in China. FDI indicators may improve in the coming years, but structural processes motivated by economic calculation and political pressure will probably lead to further restrictions on investments in China as part of a gradual, comprehensive reduction of the dependence of foreign business on the Chinese industrial base.

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Increasingly distant neighbours: Lithuania towards Belarusians

Increasingly distant neighbours: Lithuania towards Belarusians

Author(s): Joanna Hyndle-Hussein / Language(s): English

Keywords: Alyaksandr Lukashenka; Belarus

In the last three years Belarusians have become the fastest growing group of foreigners in Lithuania. At present, the Belarusian diaspora in this country numbers some 61,000 people, 80 percent of whom have settled there primarily for economic reasons: they have found jobs mainly in the construction and logistics sectors, and also set up their own businesses. It is increasingly rare for them to arrive in Lithuania on the so-called humanitarian visas, which can be obtained by those whom the regime of Alyaksandr Lukashenka has persecuted; 700 such visas have been issued so far. Although Belarusians are playing an important role by filling gaps in the Lithuanian labour market, their influx has sparked growing concerns among Lithuanian society. The country’s secret services have warned that the new arrivals may include people infiltrated by Russian and Belarusian intelligence services, which poses a potential threat to national security.

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New horizon. Implications for Poland’s security of NATO’s approach to the Indo-Pacific

New horizon. Implications for Poland’s security of NATO’s approach to the Indo-Pacific

Author(s): Robert Pszczel / Language(s): English

Keywords: Poland; NATO

The subject of this report is the evolution of NATO's approach to the Indo-Pacific and its implications for Poland's security policy. For a long time, the countries of this region based their relations with the Alliance on occasional support for its activities and selective participation in partnership programmes. A similarity in thinking about the most significant challenges, mainly those related to China, has resulted in intensive dialogue since 2020 and new forms of cooperation with Australia, Japan, South Korea, and New Zealand (the so-called AP4 countries).The Indo-Pacific has inevitably become an increasingly important region globally. Its prioritisation by the USA means that the European allies need to develop an appropriate policy. This policy must also consider new realities such as ever closer Russian-Chinese cooperation, which links the Indo-Pacific with the European theatre. Cooperation with the AP4 is not only a component of NATO's new approach but also a significant element of the European Union's geopolitical transformation. The potential benefits of developing partnerships with the AP4 countries should outweigh concerns about a shift in NATO's priorities.

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A glass half full. Searching for new sources of economic growth in Central Europe

A glass half full. Searching for new sources of economic growth in Central Europe

Author(s): Konrad Popławski,Sandra Baniak / Language(s): English

Keywords: economic growth; Central Europe

The twentieth anniversary of Central Europe’s accession to the EU should not only be an occasion to celebrate the region’s economic success, but also to reflect upon the developmental challenges awaiting it. The Central European countries’ membership in the EU has been a great economic success. The pace of economic growth has been relatively high, convergence has progressed, foreign trade has developed, direct investment inflows have continued, and unemployment has fallen to very low levels. Moreover, the countries of the region have managed to maintain their fiscal stability. However, this positive picture is marred by the fact that the convergence process has clearly slowed in many of the region’s countries over recent years, while the EU itself has lost momentum in its growth. In light of the serious threats on the horizon, such as supply chain disruptions, the demographic crisis, and Russia’s aggressive policy towards the West, Central Europe cannot rely solely on its position as a subcontractor to foreign corporations. It should learn from the mistakes made by the EU’s southern states, which at a certain point in their development fell into a trap of structural problems which led to prolonged economic stagnation.In this report the authors analyse the economic position of Central Europe in the EU and the main challenges to its development; they propose actions which could be taken as a region to upgrade the economic model. These recommendations concern the EU’s Multiannual Financial Framework, the Single Market, industrial policy and infrastructural development.

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The silicon shield. Taiwan amid the superpowers’ rivalry

The silicon shield. Taiwan amid the superpowers’ rivalry

Author(s): Michał Bogusz / Language(s): English

Keywords: Taiwan

Taiwan’s strategic and economic importance, as well as political tensions in the East and Southeast Asian region, have made the island and the Taiwan Strait one of the world’s major hotspots. At the same time, it is becoming increasingly difficult to maintain the status quo due to socio-political changes in Taiwan itself, the growing military power and political ambitions of the People’s Republic of China (PRC) and the resulting intensification of the rivalry between it and the United States of America as well as other countries such as Japan and Australia. As a result, the Taiwan issue has emerged as a gauge of China’s intentions and capabilities, but the island itself has also become the limit of its expansion, beyond which conflict between Beijing on the one hand and Washington and its allies on the other appears inevitable.Taiwan’s pivotal location, economic role and key importance in the sector of new technologies, especially semiconductors, mean that maintaining its independence from the PRC is of vital interest to the US and its allies, including those in Europe. Consequently, a possible conflict between Taiwan and the PRC will have an international dimension and involve the US and its allies. The outcome of this face-off could determine the winner of the Chinese-US rivalry.

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Punching below its weight. Romania’s foreign policy dilemmas

Punching below its weight. Romania’s foreign policy dilemmas

Author(s): Kamil Całus / Language(s): English

Keywords: Romania; foreign policy

Romania is the largest and most populous country in southeastern Europe and one of Europe’s fastest growing economies. Despite its potential, Romania’s foreign policy appears to be very passive and lacking in any far-reaching ambitions. It is focused on ensuring the country’s security in the narrow sense of the word: by cooperating as closely as possible with NATO, especially the US, and maintaining good relations with EU countries, particularly France and Germany, which form the EU’s core; the other priority is to continue the process of European integration. Generally, Romania has shown little interest in shaping the situation in its immediate neighbourhood, exhibited no ambition to take on the informal role of a regional leader, and has not initiated (or has been unable to do so effectively) any local formats of cooperation that would extend beyond the members of NATO and the EU that are closest to it. The only exception to this rule is Moldova, which Romania sees as an area of special interest and influence for historical, linguistic and cultural reasons.

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The second front. Ukraine’s economic condition and forecasts after a year and a half of war

The second front. Ukraine’s economic condition and forecasts after a year and a half of war

Author(s): Sławomir Matuszak,Tadeusz Iwański,Konrad Popławski,Andrzej Wilk / Language(s): English

Keywords: Ukraine

The Russian invasion has caused the largest economic collapse in Ukraine’s history. Its GDP fell by nearly 30% in 2022, although the government has managed to maintain the country’s macroeconomic and financial stability. Although forecasts for this year and next predict economic growth rates of several percent, no significant economic recovery should be expected as long as military operations on the current scale combined with the steady stream of missile attacks continue.

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NATOs polar quartet. The US, Canada, Denmark and Norway in the Arctic

NATOs polar quartet. The US, Canada, Denmark and Norway in the Arctic

Author(s): Piotr Szymański / Language(s): English

Keywords: US; Canada; Denmark; Norway; the Arctic; NATO

The Arctic is the part of the world that has been most severely affected by climate change. The Arctic Ocean is heating up, new opportunities for shipping and resource extraction are emerging, and international cooperation in the polar areas is gradually giving way to competition: icebreakers, military infrastructure and submarine patrols are returning to the north. The Arctic has been impacted by the Russian invasion of Ukraine, Sweden’s and Finland’s drift towards NATO, as well as China’s aspirations. It is therefore worth taking a closer look at the engagement of the US, Canada, Denmark/Greenland and Norway in the circumpolar area, as they are the only NATO members that are also Arctic Ocean coastal states. The report looks at their activity in this region from the political, economic and military perspectives. The US sees this space proactively, through the prism of its rivalry with Russia and China, while Canada takes an inward view, with a focus on protecting its own sovereignty. Denmark nurtures its union with Greenland, without which it would have no presence in the Arctic. For Norway, the High North is a source of natural resources and the first line of defence against a possible Russian attack.

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