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№150: Brazil’s Perception of the Visegrad Group: Not a Strategic but a Prospective Partnership

Author(s): Marek Jan Wasiński,Carolina Salgado / Language(s): English

The Visegrad Group is still a new label among policy makers as well as public and private investors, scholars and media in Brazil. However, since their accession to the EU in 2004, and the financial crisis that started in 2008, the four Central European countries in this group have started to look beyond Europe in order to formulate their economic and political agenda, aiming to boost partnerships, for example among the biggest South American countries such as Brazil. V4 and Brazil should build momentum to deepen cooperation in the most promising prospective areas such as trade, military, tourism and education.

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№148: Many Belts and Many Roads: The Proliferation of Infrastructure Initiatives in Asia

Author(s): Justyna Szczudlik / Language(s): English

Asia could be described as the world’s great construction site, and is already the focus of a scramble for infrastructure projects. Among countries competing for investments are not only China with its Silk Road initiative, but also Korea, Japan, India and ASEAN, which have prepared their own infrastructural strategies. The plethora of initiatives may have a positive impact on Asia, offering diverse solutions to the infrastructural bottleneck and reforms of existing institutions and modes of assistance. But there is also the risk that fierce competition may result in unprofitable projects, while economic slowdown could cause a decline in funding. For Europe these initiatives create opportunities to take part in new projects, but the EU should be aware that the projects will be implemented mainly in Asia and by Asian countries.

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№146: How ASEAN’s Transformation Can Play Out Well for Europe

Author(s): Damian Wnukowski / Language(s): English

The transformation of ASEAN into an economic community is a significant step in the organisation’s integration process. The project, formally launched at the beginning of 2016, aims at creation of a single market of more than 620 million people, loosens the flow of goods, services and investment, which should underpin regional economic growth and catch the attention of foreign businesses. However, obstacles to economic cooperation remain, such as limitations on the movement of labour or capital, which shows that the integration process is not yet complete. The EU, which can benefit from a well-functioning market in this region, should share its own experience to support the ASEAN integration process.

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№127: The Limits and Achievements of Regional Governance in Security: NORDEFCO and the V4

Author(s): Pernille Rieker,Marcin Terlikowski / Language(s): English

Both Norway and Poland have engaged in regional security and defence cooperation projects:NORDEFCO and the Visegrad Group (V4), respectively. Such initiatives are seen as a promisingmethod for reinforcing military capabilities in a time of deep cuts in defence budgets among the EUMember States. The record of NORDEFCO and the V4 remains, though, rather modest, particularlywhen compared to the ambitious declarations made at their beginnings. Both cooperation formatshave proved effective with regards to less-complicated projects, such as those involving militaryeducation, training or logistics. However, common procurement and real integration in some capabilityareas has turned out to be too difficult. Yet, these failures have helped to identify factors that maymake success more likely, and this result is shared by both NORDEFCO and the V4, despite thestructural differences between these two mechanisms of security governance.

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№124: A Post-Crisis Eurozone: Still an Attractive Offer for Central Europe

Author(s): Patryk Toporowski / Language(s): English

The economic crisis led the eurozone to become a more deeply integrated area. The redesign of its institutional architecture significantly changes the perception of the costs and benefits of the membership of the zone. In this regard, the Central and Eastern European countries (CEE) are reassessing the effects of eurozone accession, by reviewing the set of arguments for and against further integration. The overall result of this review is still in favour of further integration, but successful accession requires comprehensive preparations from the candidates.

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№107: Can Ukraine Mimic Poland’s Transition? The Limits of Its Latest Economic Changes

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

Once again, Ukraine has a chance to transform its economic system and build a democratic capitalist one. It is tempting to say that Central European countries such as Poland in particular constitute a good pattern for Kyiv’s reforms. However, this time will be different in many respects, and simply re-running an older plan will not work.

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№096: Choosing our Geography: 12 Points to Restore Meaning to the Eastern Partnership

Author(s): Elżbieta Kaca,Roderick Parkes,Anita Sobják / Language(s): English

The EU is inevitably a geopolitical player, but it seeks to avoid fulfilling this role by all means. This has resulted in increased instability in the Eastern Partnership (EaP) region. In order to bring healthy political choices to its troubled eastern neighbourhood, the EU should follow a 12-point plan focusing on a more nuanced policy towards Russia, stronger regional ties between Eastern partners, tailored EU conditionalities and an integration approach better suited to EaP countries, as well as improving EU political capacities in the region.

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№082: China’s New Silk Road Diplomacy

Author(s): Justyna Szczudlik-Tatar / Language(s): English

The destinations of China’s new leaders’ foreign trips show that the PRC’s foreign policy domain remains its neighbourhood. China is trying in particular to enhance cooperation with its Central and Southeast Asia border states in what is called “new silk road” diplomacy. Behind this approach are mostly domestic rationales: a need to preserve stability on its borders and in the western part of China, secure export markets and energy supplies, develop inland transport routes as an alternative to unstable sea lines, and to narrow the development gap between the eastern and western parts of China. The PRC’s “opening to the West” and reinvigoration of its Western Development Policy is a window of opportunity for Poland. The establishment in Gansu province of the Lanzhou New Area—the first state-level development zone in northwest China—could become a bridgehead for a Polish economic presence in this part of China, or even a springboard for Poland’s “Go West China” strategy.

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№076: “A Beautiful Future for Central Europe:” Hungary’s Regional Policy in the Period 2010–2013

Author(s): Dariusz Kałan / Language(s): English

Prime Minister Viktor Orbán has, from the beginning of his tenure, made public declarations of his deep engagement with cooperation in the region, and outlined very ambitious visions about its future. The idea to make 2013, the year of Hungary’s presidencies of the Visegrad Group and the Central European Initiative, a Central European year, is a part of the policy of special attachment to regional matters too. However, there is a visible gap between politicians’ rhetoric and their activity. This is especially true regarding Hungary’s dialogue with Romania and Slovakia, which, due to many historical, social and psychological obstacles, has always been most challenging for leaders in Budapest. Orbán’s government, though, by taking steps to culturally and politically unify Hungarians from the Carpathian Basin, promoting historically ambiguous persons and inviting revisionists such as Erika Steinbach to parliament, not only fails to engender a good atmosphere in the region, but also proves how lively among the country’s governing elite are both resentments from the past and temptations to use them to achieve temporary political goals.

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№072: Belarus in the CES: Advantages and Disadvantages of Economic Integration

Author(s): Anna Maria Dyner,Natalia Ryabova / Language(s): English

Belarusian accession to the Common Economic Space (CES) was forced by two factors—the 2011 crisis and the necessity to gain cheap energy resources. Although Russia fulfilled its promises, decreasing gas and oil prices, Belarus is now feeling the negative results of the integration. According to CES rules, Belarusian authorities will have to tighten monetary policy, and reduce social spending and public financing of state-owned enterprises. The situation may be improved by foreign investments, but among the three CES countries, Belarus is the least attractive, especially since Russia joined the WTO and the because of the possible accession of Kazakhstan in the near future. Because of the need to carry out the major reforms in Belarus, the European Union has a greater chance to influence the situation in that country, for example by supporting modernisation projects.

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№068: Is Moldova Tired of Being the Success Story of the Eastern Partnership?

Author(s): Anita Sobják / Language(s): English

Despite months of internal political wrangling, Moldova seems to be making steady progress in its Association Agreement with the EU. But the domestic political crisis has revealed many truths about both Moldova’s European policy and the EU’s transformative power. As such, the road to the EU remains murky as long as several variables remain in place: the ongoing tensions in the governing alliance, lower public support for European integration in Moldova, and Russia’s re-emerging leverage via Transnistria. That is why Poland, together with its partners, should look for new ways to keep Moldova as the pacesetter of the Eastern Partnership.

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№067: Ripping into TTIP? Debates Surrounding the Upcoming EU–U.S. Negotiations

Author(s): Maya Rostowska / Language(s): English

The outcome of negotiations for a transatlantic trade deal depends largely on the stance of politicians and stakeholders in the EU and the U.S. An overview of the debate on either side of the Atlantic reveals both sides’ respective interests and suggests which areas will prove particularly difficult to negotiate. These include public procurement provisions, data privacy, agricultural issues, and the financial services sector.

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№046: Poland and Brazil: Narrowing the Distance, Exploring Mutual Potential

Author(s): Kinga Brudzińska,Bartłomiej Znojek / Language(s): English

The next issue of PISM Policy Papers, by Kinga Brudzińska and Bartłomiej Znojek, prepared in cooperation with the Centre for International Relations, School of Social Sciences and History (CPDOC) in Fundação Getúlio Vargas (FGV). With a long tradition of diplomatic relations, Poland and Brazil remain distant partners. A divergence of interests and the lack of traditionally close ties were among the main causes for the relatively low intensity of bilateral cooperation. Brazil’s and Poland’s economic and political transformations, their consequential growing roles in their respective regions and good economic performance of both countries are the basis upon which to build bilateral cooperation. The visit of Polish Minister of Foreign Affairs Radosław Sikorski to Brazil at the end of November 2012 will provide an opportunity to explore the potential for increased cooperation between the two countries.The paper has been prepared in cooperation with the Centre for International Relations, School of Social Sciences and History (CPDOC) in Fundação Getúlio Vargas (FGV).

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Russia’s Greater Eurasia and China’s New Silk Road: adaptation instead of competition

Author(s): Marcin Kaczmarski,Witold Rodkiewicz / Language(s): English

The argument that a crisis in Russian-Chinese relations is unavoidable has been repeatedly referred to by analysts since the 1990s. The reason for this crisis would be geopolitical competition between the two powers in Central Asia. In 2013, China’s President Xi Jinping announced the concept of the New Silk Road (referred to by the Chinese side as ‘One Belt, One Road’). At the same time, Moscow announced its efforts to build its own integration project in the form of the Eurasian Economic Union. These two developments seemed to confirm that the initial argument was correct and that the two projects were apparently fated to compete. Meanwhile, in May 2015, during President Xi Jinping’s visit to Moscow, a joint declaration was issued calling for combining the two projects and creating a formal mechanism for their coordination in the form of a joint task force. The vision of “a great Eurasian partnership” announced by President Vladimir Putin during the International Economic Forum in St. Petersburg on 16–17 June 2016 – which he also referred to as the Greater Eurasia project – is a signal that Moscow has ultimately opted for the strategy of joining a stronger partner (bandwagoning) instead of choosing the strategy of counterbalancing the rising power of China. At the same time, Moscow is trying to conceal the growing asymmetry in Russian-Chinese relations.

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The 'Oil Friendship’: the state of and prospects for Russian-Chinese energy cooperation

Author(s): Marcin Kaczmarski,Szymon Kardaś / Language(s): English

The oil sector has been the major element of Russian-Chinese energy cooperation. The years 2013–2015 saw a significant increase in the volume of crude oil exported by Russia. In 2015, China became the main importer of Russian oil; Russia became the second largest supplier of oil to the Chinese market, after Saudi Arabia. From Beijing’s perspective, supplies of Russian oil are of strategic importance because the main supply routes are overland routes. Russia, for its part, is interested in boosting its export because of its deteriorating position on the European market, which hitherto has been considered a strategic market.Cooperation in the field of natural gas has been less advanced; so far Russia has exported only insignificant amounts of liquefied natural gas (LNG) to China. China is less dependent on the import of gas (its own production covers around 70% of the demand). Beijing has been dynamically developing its LNG infrastructure, and has at its disposal gas pipelines which connect China with producer countries in Central Asia. Additionally, all the projects carried out within the framework of Russian-Chinese gas cooperation are being hampered by the financial problems Moscow is experiencing.

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Czarne chmury nad reformą ukraińskiego rynku gazu

Author(s): Wojciech Konończuk,Sławomir Matuszak / Language(s): Polish

In September, three out of five members of the supervisory board of Naftogaz, Ukraine’s largest gas company, announced their resignation and accused the government of stepping up political interference in the company’s activity and blocking measures aimed at reforming the company. This represents yet another instance of the fight for control over Naftogaz and its profit-making subsidiaries, Ukrgazvydobuvannya (which extracts over 70% of Ukraine’s gas) and Ukrtransgaz (the transit pipeline and gas storage facilities operator), which has been gaining momentum in recent months. On one side of the dispute lies what is broadly understood as the ruling camp (the surrounding of the president and the prime minister), while the other side is the pro-reform management of Naftogaz, headed by Andriy Kobolev and backed by Western institutions. It seems that the government’s goal is to regain control over Naftogaz, including over financial flows between its subsidiaries. The mounting conflict has resulted in a cessation of the gas sector reform, which has been ongoing for over a year. Reforming the gas market had hitherto been viewed as one of the biggest successes of the state modernisation programme that was launched after the Maidan Revolution. Moreover, this halting of the reform process poses the risk that it may subsequently be abandoned entirely.

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Nietrafiona oferta Pekinu: „16+1” a chińska polityka wobec Unii Europejskiej

Author(s): Jakub Jakóbowski,Marcin Kaczmarski / Language(s): Polish

Despite China’s growing political and economic involvement in Central and Eastern Europe (CEE), Beijing has not succeeded in making an attractive offer to the region’s EU member states – who make up the majority of the participants in the ‘16+1’ format. The financing model proposed by China, based on loans and favouritism towards Chinese companies, has proved to be unsuitable to local conditions. Therefore, the much-discussed infrastructure cooperation has not even started. Consequently, Beijing has failed to obtain the political tools which could have weakened policy coherence at the European level, or even divided the EU. In this context, the allegations appearing in the public debate that the countries of the ‘16+1’ have been fostering divisions within the EU seem to be substantially incorrect. As long as Central and Eastern Europe remains capable of pursuing its economic and developmental interests within the architecture of the European Union, the political risks coming from China’s capital inflow will remain limited. At the same time, the EU has room to facilitate constructive economic relationships between China and the Central European region. For example, it could reduce Beijing’s political pressure on CEE to use the specific, Chinese model for financing and building infrastructure. Cooperation at the EU level could also help to adapt the Chinese offer to the European business and regulatory environment.

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From vassalisation to emancipation. Ukrainian-Russian gas co-operation has been revised

Author(s): Szymon Kardaś,Tadeusz Iwański / Language(s): English

The awards by the Arbitration Institute of the Stockholm Chamber of Commerce (further: the Arbitral Tribunal) concerning the contract on gas supplies to Naftohaz and the volume of Russian gas transit via Ukraine have radically changed the model of gas relations between the two countries as they have existed until now. Kyiv’s victory is its crowning achievement in the process of emancipation from Russian dominance in the energy sector which began after the Revolution of Dignity. This has also significantly strengthened Ukraine’s position with regard to Russia and the EU because Gazprom was found to have been in breach of the transit contract. The decisions of the Arbitral Tribunal mark a caesura in the gas co-operation between Ukraine and Russia, which has continued for almost three decades and become infected with corruption, lack of transparency and politically motivated decisions. Since the collapse of the USSR, Ukraine has been dependent on Russian gas supplies, and has been one of Gazprom’s key clients. As long as natural gas remained relatively cheap, this situation was satisfactory to contractors in Ukraine as well, as it offered great opportunities for a section of the Ukrainian political class to build up their fortunes illegally. However, during Vladimir Putin’s presidency (since 2000), Moscow has capitalised many times on Ukraine’s gas dependence to achieve its political goals. The Revolution of Dignity and the war with Russia were breakthrough moments in energy relations with Russia. The new government in Kyiv, unlike all its predecessors, took the risk of entering into a legal dispute with Gazprom.

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A test of strength. The escalation of the crisis in Russian-American relations

Author(s): Marek Menkiszak,Witold Rodkiewicz / Language(s): English

On 6 April, the Trump administration introduced additional, more severe sanctions against Russia, covering 24 people and 14 companies: Russian oligarchs, the businesses they run, senior government officials and heads of state corporations, and (again) the Russian state arms company Rosoboroneksport. The immediate consequence of the new sanctions has been a downturn on the Russian stock market and the weakening of the rouble, as well as financial problems for the companies sanctioned, especially those belonging to the oligarch Oleg Deripaska. In the longer term the Russian oligarchs and their companies which conduct extensive activity abroad will find that the sanctions hamper their operations, and as a result, their dependence on the Kremlin will increase. On the other hand, the Kremlin will have increasing difficulty in recouping the affected oligarchs’ losses, which will lead to an increase in tensions within the elite, as well as a rise in social discontent, which will make the functioning of Putin’s regime more costly. || The US sanctions represent the next stage of the crisis in Russian-American relations. They were imposed just after the expulsion from Russia of 60 American diplomats in retaliation for a similar decision by the US regarding Russian diplomats. The crisis may deepen further as a result of the military response which the US has announced in response to a chemical attack in Duma, Syria on 7 April, most likely by the Assad regime’s forces. An escalation of the crisis does not suit the Kremlin, which still seems to nurture hope that the recently announced further Putin-Trump meeting could initiate the process of normalisation of Russian-American relations. On the other hand, for reasons concerning its image, the Kremlin will probably undertake some kind of limited retaliation against the US, in order to demonstrate to Washington its potential to cause harm. All this means a long-lasting crisis in Russian-American relations.

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Nowa strategia energetyczna Rosji – optymistyczne plany w niepewnych czasach

Author(s): Szymon Kardaś / Language(s): Polish

On April 2, the Russian government adopted the Russian Federation's Energy Strategy until 2035. Is this is the third edition of the document adopted in the last two decades and at the same time the most synthetic. On the one hand, subsequent versions were intended to present the condition of the Russian the energy sector and its main challenges and, on the other hand, were a political signal for foreign partners, encouraging them to develop energy cooperation with Russia. The latest energy strategy was approved with a delay of six years, for which were influenced by both economic factors - dynamic changes in the energy markets - as well as political - Russia's conflict with the West in connection with the aggression against Ukraine or the growing instability in the Middle East. The new strategy articulates the challenges more clearly than the previous ones internal and external facing the national energy sector. It is also new a closer alignment of energy policy objectives with the priorities set by Vladimir Putin under the so-called May decrees, adopted after the 2018 presidential election The document is also an illustration of the current balance of power in the Russian energy sector, he points out on the growing importance of Novatek and the LNG projects developed by the concern, while at the same time maintaining Gazprom's privileges (maintaining a monopoly on gas exports via the pipeline system). At the same time, the document indicates the limited possibilities of strengthening the position of others, less influential market participants. Although the assumptions of the new strategy are more realistic than the indicators projected in its previous version, however, they still have very ambitious shape (especially in relation to exports of coal, oil and gas). So there are serious ones doubts as to whether, in the face of the dynamically changing situation on the energy markets, no they will become obsolete in the next few months.

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