How does the war in Iran affect Europeans? How does Greenland affect the attitude of the Danes to NATO and the transatlantic alliance? Should Nordic countries supply atomic weapons? What is Europe's way to competitiveness? Leszek Jazdzewski talks to Jacob Funk Kirkegaard, a elder academic at the think tank Bruegel based in Brussels and at the Peterson Institute for global Economics, Washington. It focuses on European economies, abroad direct investment, geopolitical trends, demography, migration and another long-term factors affecting productivity and growth.
Leszek Jażdżewski (LJ): To what degree does the war in Iran affect Europeans, and what can be learned from this conflict at this stage?
Jacob Funk Kirkegaard (JFK): The war has a clear and direct impact on the European economy through oil and gas prices. Europe, as the main importer of oil and gas, remains vulnerable, but from the point of view of national safety and policy it has no function or real impact. president Donald Trump did not consult Europe before this war began. He then asked the European countries to aid reopen the Strait of Ormuz, but fundamentally Europe bears the consequences of this war without having any influence on it.
It is simply a political problem, but it is besides an economical challenge in both the short and long term. The short-term challenge has late been addressed by the European Central Bank. If the war does not end before its next gathering at the end of April, the main script is to rise the ECB interest rates again, which could possibly have a negative impact on European growth.
Following the Russian invasion of Ukraine, Europe experienced a dramatic price shock in the energy sector, making the cost of surviving an crucial political issue. During the fresh European Council meeting, 1 of the main topics of the debate between leaders was to reduce energy costs in the short term. The consequences are immediate.
In the long term, the answer to this challenge is clear. Europe must abandon its dependence on fossil fuels. This requires completion of the ecological transformation and electrification to guarantee that electricity supplies are not derived from fossil fuels and are based on water, atomic and renewable energy. This is the 2050 target, and the current crisis underlines why it is so important.
LJ: Do you think the war in Iran will have a direct impact on the war in Ukraine?
JFK: The war in Iran has already had a possibly crucial impact, bringing both affirmative and negative consequences. As regards the negative effects, the Trump administration abolished economical sanctions against Russian oil transported by sea. This allows Vladimir Putin to sale oil to countries like India at importantly higher prices, resulting in a crucial profit for Russia. As a result, Russia will have a better position to finance its military operations than previously expected.
In addition, arabian Gulf states have utilized large amounts of anti-aircraft missiles specified as Patriot. This is the kind of weapon Ukraine desperately needs. Although Europe has tried to acquisition these missiles from the United States, production capacity is limited. These stocks are likely to be allocated primarily to the United States or sold at advanced prices to Gulf countries, meaning that Ukraine will have access to less advanced anti-aircraft missiles.
On the another hand, this conflict highlighted that the military challenge facing Ukraine – and specifically the regular saturation of airspace with hundreds of drones – is not a problem typical of Ukraine alone. This is simply a challenge facing countries around the world.
Therefore, there is simply a large request for experience, method cognition and defence equipment developed by Ukraine (including inexpensive interception drones, light sound detection devices and radars). president Zelenski reported that 3 100 personnel are already in the Gulf region to aid improve air defence. Europe, the Gulf countries and most likely the United States will want to get this technology. This represents an crucial business chance in the average word for Ukraine and underlines, in a political sense, that the challenges facing Ukraine are universal.
LJ: Can the Danish model of financing military production in Ukraine be transferred to the remainder of Europe to build our own production capacity while supporting Ukraine's defence needs?
JFK: In this respect, the glass is half full. The most crucial thing is to finalise the financing, specifically the European Union's loans to Ukraine of EUR 90 billion. Around EUR 60 billion of this debt is intended to finance the expansion of Ukrainian military production, both in Ukraine and another parts of Europe.
In addition to the Danish model, there is simply a joint initiative of Ukraine and respective countries of North Europe called ‘Build with Ukraine’. Its aim is to usage the proven Ukrainian technology – specified as interception drones and yet missiles – and to produce it in Western European countries. This is already the case in Denmark, Germany and large Britain, and most likely besides in Poland. Initially, these elements are produced for the purposes of fighting in Ukraine, but in time they will service all the defence needs of Europe.
Re-arming Europe requires the ability to halt Russia without the aid of the United States. Ukraine is simply a future associate of the European Union that is already effectively fighting Russia. We know which projects work in the face of the Russian military threat. We must usage these projects, complement them with our own technologies and increase the scale of production. There are reasons for optimism on this issue.
LJ: What is the impact of fresh tensions with the United States regarding Greenland on the Danish perception of NATO and the transatlantic alliance?
JFK: Previously, Denmark's position reflected seventy years of strong pro-American defense. Denmark was a partner in the Second Gulf War and fought in Afghanistan. In defence matters between Denmark and the United States, there was virtually no discrepancy. But this has changed completely.
This change started before the Greenland crisis. About 2 years ago, the referendum in Denmark abolished the clause ‘opt-out’ on the defence policy of the European Union. Denmark has since been full active in all defence initiatives of the European Union and is simply a very strong ally of Ukraine.
The summit of the Greenland crisis in mid-January was groundbreaking. Danish combat troops were sent to Greenland with orders to argue a possible invasion. Support for another European countries – in peculiar France, Germany and another Nordic countries – was crucial. As a result, Denmark's function has moved completely towards a European defence position and the request to build autonomous European defence capabilities.
LJ: Was the armed conflict between the United States and Denmark over Greenland realistically possible? Were the Danish armed forces actually ready to fight?
JFK: This is precisely the script expected. Armed forces were sent there to respond immediately, with orders to respond to fire and destruct runways at airports close Nuuk. The aim of this action was to prevent Donald Trump from implementing an invasion plan without bearing any costs.
Although 200 or 300 Danish soldiers would not be able to defeat the US military forces, that was not the point. The goal was to force Donald Trump to issue an order to shoot allied soldiers and possibly endure losses among American soldiers. specified a conflict would then trigger a political and constitutional consequence in the United States, forcing the administration to stop. The Danes took this seriously – if there were an invasion, it would consequence in a short but strong armed conflict.
LJ: Are we inactive under transatlantic illusion? Or do you think that current tensions are just temporary departures?
JFK: To any extent, we are delusional. However, no substance what happens, the fundamental role, function and structure of NATO will change. To date, NATO has primarily been a warrant of the safety of the United States for another associate States before the russian Union and then Russia. This era is over.
Europe will be able to defend Russia without the aid of the United States through the “coals of the willing” and partnership with Ukraine. In this sense NATO will change. The key question is whether NATO will hold its interoperability component; even if the United States is no longer a treaty ally guaranteeing our safety in the conventional sense, they will most likely begin to see the strategical advantage of maintaining interoperability with European defence forces.
NATO does not become completely irrelevant simply due to the fact that it ceases to act in accordance with the logic of Article 5, but takes another, little crucial role. Europe needs to be able and will deal with the key task of stopping Russia on its own due to the fact that we cannot trust on the United States. Whether Donald Trump is in office or individual else, we cannot trust on the United States further in this crucial role.
LJ: Why do you think that unchangeable democratic Nordic countries may request their own atomic weapons, and how could this be realistic in the next decade?
JFK: This may be essential due to the fact that the full Baltic region and Europe are under a direct military threat from Russia, which has atomic weapons. The conventional atomic umbrella provided by the United States is not reliable. Moreover, there are reasonable doubts as to the effectiveness of French and British atomic deterrence measures due to the political situation in these countries.
While French president Emmanuel Macron proposed to extend the political scope of the French atomic umbrella, Marine Le Pen stated that French deterrents are to be utilized exclusively by France. In the UK, atomic deterrence measures depend on American rocket technology, and political leaders presently in favour of the polls had links to Russian interests in the past. Border states with Russia and Belarus may find themselves in a situation where they cannot trust on these allies.
In technological and financial terms, the Nordic countries are able to make these weapons within 5 to 10 years. With respect to concerns about undermining the doctrine of non-proliferation, unchangeable democratic states in the Scandinavian region can argue in a more credible way that these weapons are purely defensive. This distinguishes them from another countries that have previously violated non-proliferation standards, enjoying little credibility.
LJ: Do the Nordic countries have independent means to accomplish this nonsubjective without cooperation with the United States or France?
JFK: If there is simply a will, nothing stands in the way of wealthy Nordic countries achieving this goal. They do not request cooperation with the United States or France to make their own atomic programme.
Commercial sanctions against economies as strong as the Nordic countries may prove ineffective. Although specified a decision would undoubtedly undermine the global standard against the proliferation of atomic weapons – and I would not support it from a global policy position – the decision yet belongs to the Nordic countries. They may conclude that as neighbours of Russia with atomic weapons they have no choice but to search security. Leading Polish politicians expressed akin opinions due to the fact that Poland faces the same dilemma as a country bordering Belarus.
LJ: In this dangerous atmosphere of re-armament, do you consider increased defence spending as a essential economical cost, or as a possible leverage for Europe's global and industrial improvement importance?
JFK: Re-armament is, of course, the cost of government spending on weapons, barracks, and training. This besides involves restoring military membership in respective countries, which represents a crucial change in the usage of the workforce. These costs are real and are the consequence of a political decision to invest in safeguarding against threats from the planet around us.
However, Europe is besides facing immense economical opportunities. We are undergoing the arms process in the midst of the military revolution, initiated by Ukraine, and the drone revolution. We are beginning to observe the emergence of European defence companies with the position of "unicorns". Historically, the relation between the United States Department of defence and Silicon Valley was very close. 1 could argue that the only real industrial policy that the United States had was the defence manufacture financed by Pentagon start-ups subsidies.
Ukraine is simply a pioneer in the creation of platforms specified as Brave1, utilizing defence needs to support the improvement of the production and innovation sector. I see no reason why the remainder of Europe cannot imitate this. This sector could play an crucial function in stimulating an entrepreneurship-based economy – an area where Europe traditionally lags behind the United States. With a crucial increase in defence spending and a clear threat from Russia, defence can become a sector in which companies will grow rapidly. Therefore, we should not treat arms solely as cost - these measures offer possibly crucial economical benefits to Europe as a whole.
This podcast was produced by the European Liberal Forum in collaboration with the Movieno Liberal Social and the Liberté Foundation!, with the financial support of the European Parliament. Neither the European Parliament nor the European Liberal Forum are liable for the content nor for any usage of this podcast.
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Dr. Olga Łabendowicz translated from English
Read English at 4liberty.eu
