A United Europe Weathers Crises, but Deeper Challenges Remain

https://www.nytimes.com/2023/01/14/world/europe/europe-crises-davos.html

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This article is part of our special report on the World Economic Forum’s annual meeting in Davos, Switzerland.

BRUSSELS — Jean Monnet, one of the founders of the European Union, wrote in his memoirs that “Europe will be forged in crises and will be the sum of the solutions adopted for those crises.”

The war in Ukraine is only the latest crisis to confound Europe and rip away its illusions. A return to full-scale territorial warfare rarely seen in Europe since World War II has altered the European Union and NATO, both their present and their future, with consequences still unclear.

Along with China, Europe’s crises will be the undercurrent jolting discussions at the World Economic Forum next week. Its theme of “Cooperation in a Fragmented World” summarizes the aspiration driving some of the policies rapidly adopted on the continent since Russia’s invasion of Ukraine last February.

Both the European Union and NATO have responded well and remain united, at least on the surface, to challenges including war, economic stress, energy disruption and humanitarian crises — all topics on the Davos agenda.

The European Union and Britain have reacted with declarations of solidarity, nine rounds of economic sanctions against Russia, a generous reception of Ukrainian women and children as refugees, and significant deliveries of financial and military aid. Europe has moved to reduce its enormous dependency on Russia for energy, especially natural gas, and it has managed so far to cope with the political pressures stemming from an inevitable explosion in energy and food prices and the consequent inflation.

“The European Union has reacted faster and more united than others would have thought,” said Fabian Zuleeg, chief executive of the European Policy Center, a Brussels research institution. It was aided by discreet American leadership, he said. “But Europe’s great success has been the ability to bring together a very diverse set of countries with very different politics and still decide to cooperate, to understand that this war of aggression is not only about Ukraine, but about the future of liberal democracy and global security.”

But “now comes the big challenge, the underlying structural changes we have to make,” Mr. Zuleeg said. He cited the continuing differences among member states, enlargement, how to work with allies and NATO, and future relations with Washington and Beijing — in addition to the future of Ukraine itself, which has been promised membership in both the European Union and NATO at some indefinite moment.

In fact, Europe is divided about how the war should end. The countries of Central and Eastern Europe, with their memories of Soviet occupation, want Russia defeated and driven back from all of Ukraine’s sovereign territory, including Crimea, which Russia annexed in 2014. They argue that the war has underscored the necessity of NATO and the trans-Atlantic alliance and the primacy of the United States as the ultimate guarantor of Europe’s freedom and security.

The countries of what Donald H. Rumsfeld as defense secretary called Old Europe — including France, Germany, Italy, Belgium and Spain — support Ukraine but are anxious about the continuing costs. They don’t expect Ukraine to take back Crimea, and they see the inevitability of a negotiated solution and the durability of Russia as a neighbor whose own insecurities must somehow be assuaged for a lasting peace. While New Europe sees security as “against Russia,” Old Europe, best articulated by Emmanuel Macron, the French president, still sees security as with Russia.

The dilemma remains hypothetical, however, since President Vladimir V. Putin has shown no interest in compromise or serious peace talks, at least to this point.

“It’s astonishing that the Europeans have kept together so far,” said Charles Grant, director of the Center for European Reform. “But the worry is that given stagflation, high energy prices, migration and deficits, populists might exploit divisions and push Ukraine to make an early peace. As the war goes on, divisions in these two camps will get worse.”

Nathalie Tocci, director of the Institute for International Affairs in Rome, thinks Europe’s glass is half full. On the positive side, she said, Europe has made significant strides in energy conservation and begun to wean itself from Russian energy, especially from natural gas. Brussels has tried to coordinate energy storage, put a cap on gas prices (though too high to matter) and begun discussion on decoupling the electricity and gas markets.

Still, Russian gas flows were largely intact until June and continued afterward in lesser amounts, including Russian supplies of pipeline and liquefied natural gas, and the value of imports from Russia soared, funding the Kremlin for now.

Estimates are that Europe cut its gas consumption by nearly a quarter in 2022, but most of that has come from businesses that have shut down production. Germany, which got more than half its gas from Russia in 2021, is now getting none. In Europe as a whole, which got 46 percent of its gas from Russia in 2021, including LNG, the figure dropped to 24 percent in 2022 and by the end of the year was even lower, said Giovanni Sgaravatti of Bruegel, a Brussels economic think tank.

But governments have also stepped in to soften the impact of high energy prices with direct subsidies to companies and homeowners — Germany with 200 billion euros over two years, twice the amount declared with such fanfare for its own military spending over four years, prompting complaints from poorer and less prudent states. How much longer can governments afford such subsidies, especially with already high debt levels from managing the Covid-19 pandemic? And how will any of this further climate goals that are increasingly the focus of international talks, such as those at Davos?

Europe will now have to rely on non-Russian sources of energy, especially liquefied natural gas from countries like Qatar and the United States, but that will create new dependencies, especially on Washington, said Robin Niblett, former director of Chatham House, a London-based think tank. Add that to Europe’s need “to turn wholeheartedly to the U.S. to help guarantee its security” in the face of Russia’s willingness to double down militarily on trying to rewrite Europe’s security order, Mr. Niblett said, and “as a result the E.U. has ditched the idea of European strategic autonomy as a project running parallel to and independent of NATO.”

European institutions are functioning well, especially the European Commission, the bloc’s executive bureaucracy, and it has been clever to turn existing agencies, like the European Peace Facility, into a mechanism to finance military aid to Ukraine. It has also used joint resources, some €300 billion from its Covid recovery fund, to accelerate the transition to renewable energy and radically reduce the need for Russian energy.

But European leaders were less united when it came to building up Europe’s defense capabilities, buying from South Korea, Israel and the United States, not from within the continent. “It leads to Europe being less capable in defense and more dependent on the U.S.,” Ms. Tocci said.

As for NATO, the war in Ukraine has “rescued it, transformed its status and ensured its relevance” after four years of confusion under President Donald J. Trump and the chaotic exit from Afghanistan, said Leslie Vinjamuri, director of the U.S. and Americas program at Chatham House.

NATO, with strong American leadership, has gone from being a post-Cold War institution in search of a purpose (at one point, as Mr. Macron said, “nearing brain death”), to a military alliance “desperately needed to protect its European members from an imminent threat to their sovereignty and security,” Mr. Niblett said. The planned enlargement to include Finland and Sweden will enhance NATO and make it easier to align with a European Union that has been forcefully reminded of its military reliance on Washington.

But there are major challenges ahead, with serious questions suppressed in the name of trans-Atlantic unity and solidarity with Ukraine.

Ukraine has been promised membership in both the European Union and NATO, but there are no realistic offers for now, and the complicated question of future security guarantees for Ukraine has been left hanging while the fighting continues. How the war will end, how Ukraine will be protected and how it will be rebuilt — and by whom and with whose money — will have major consequences for both institutions.

Then there is the looming rise of China and what that means for trans-Atlantic security, cohesion and prosperity.

Politico Europe asked the E.U. ambassadors from Sweden and the Czech Republic what they consider to be the pressing issues for 2023. Their answers are apt and revealing.

Sweden’s Lars Danielsson responded: “If and how the aggression against Ukraine will end. If energy prices will start to come down. If the rule of law will be fully respected in all E.U. member states.”

The Czech, Edita Hrda, said: “In the short term, it will be the results of the Russian war in Ukraine, and whether the current will for unity in the E.U. will last, as well as whether, in the long term, it will be proved that the E.U. is capable of assuming the role of a global player.”

“There is very little long-term strategic thinking going on in Brussels,” said Mr. Zuleeg of the European Policy Center. “We cannot be definite about outcomes, but we need to start building possible scenarios.”

Steven Erlanger is the chief diplomatic correspondent in Europe, based in Brussels. He has reported for The Times from more than 100 countries and been based in Bangkok, London, Paris, Berlin, Moscow, Belgrade, Jerusalem and Washington.