During the past three weeks, it occurred to me that people were completely disengaged from the mainstream media. It may be my impression, and the reasons might be various. However, I personally believe that the electorate is exhausted. People are dissatisfied with negative reporting covering wars, as well as the dire global economic situation. Surely, people are not seeing any light at the end of the tunnel, especially on inflation.
However, while we were enjoying our peace and security, others around the globe were either struggling to find shelter or other basic necessities. Sadly, when I encounter such violent images and negative reporting, I pause for a few minutes and wonder what is really happening. Understandably, people might inquire about the EU's involvement in such negative outcomes. Nonetheless, the EU is directly involved in the war in Ukraine and its common and foreign security policy extends to different regions. We are just 5 months away from the European elections, and eventually a new EU Commission.
Presently, President von der Leyen is working her way around to secure the seat, and I am told that the Christmas recess was used to lobby for her seat. Clearly, the Europe Union must rethink itself beyond military and security. The EU must return to its foundations. I partly agree that the EU must be responsible of its own security. In part, the EU may be correct to carry out assessments to examine its military vulnerabilities. However, the European Union must avoid being a vassal of other superpowers. Notwithstanding that the EU needs to work with likeminded partners our block differs from that of the United States.
The EU has its own economic, political and security priorities. At times I feel that some important players within the EU are used as pawns. If you study their actions vis-à-vis the handling of diplomatic relations and foreign policy, they are completely irrational. We can argue that the majority of EU member states are also NATO members, which may be indistinguishable under the indivisibility concept of the transatlantic relations. Nonetheless, we must distinguish between security, as well as economic and political priorities. This goes beyond the war between Russia and Ukraine. The EU is supporting Ukraine only because the United States is heavily supporting the victim of an arms aggression. Economic resources, including the military assistance, were diverted towards supporting Ukraine. This exposed the economic vulnerabilities of many member states, and I am not sure how long this could be sustained. We do not have infinite economic and financial resources.
For instance, if we take what happened in Nagorno-Karabakh, where the aggressor reached its ultimate aim of cleansing Armenians from the region in a matter of a few weeks, the EU expressed just a few statements. They did not say anything other than setting up and reinforce the monitoring process in the region. Monitoring what exactly? The Armenians who grew up in the region disappeared. The same applies to the war in the Middle East and what is happening in Gaza. The EU's problem is that economically, it weakened itself by participating in a war with the pretext that the war will only last a few months. The financial and military assistance to Ukraine is exposing the economic instability of the EU. The gargantuan sums supplied to Ukraine, might prove unsustainable.
Other countries that are rich in natural resources, particularly rare earths, which are required by the EU to produce alternative energy needed to reach its strategic autonomy, are observing closely. Additionally, the French are urging the EU to enhance its strategic autonomy, not just the technological sector, but also the military and the energy sectors. We can conclude that the Climate Paris Agreement affirmed the concept of aiming to pursue targets that can only be achieved if we transit to cleaner energy. Cleaner energy means, weaning the EU’s economy off Russian gas, and other imported hydrocarbon commodities. The idea of decarbonising the EU's economy is also linked to the strategic autonomy of the block. It is not just mitigating climate change, but also reaching ulterior political motives. However, the majority of the supply of rare earths is found in China. Indeed, nature was quite generous with them. China is part of the BRICS and the way the EU is handling the relations with several countries goes contrary to its foundations.
In 2024, we have to deal with multiple challenges. Currently, the global rate of inflation is still high, relative to normal acceptable levels, and the ECB’s expectations of 2% inflation target. Besides, the EU is pushing to expediate the transition to cleaner energy, including the extension of ETS to the maritime sector. I think the EU must reconsider and adjust where necessary the path towards achieving its green strategies. Also, the acceleration to introduce climate change mitigation measures for residential and commercial buildings, might prove a little hard for citizens, in times of high interest rates. To counter inflation the ECB is not expected to lower interest rates this year, which makes government and private debt dearer to service. The problem with inflation is cost-push and not demand-pull. Inflation is not expected to moderate before 2025, and hence the introduction of new taxes is ill-timed. Besides, 2024 will see the introduction of a new Global Corporate Tax rate of 15%.
Nevertheless, one of the biggest political challenges in 2024 connects to the war in Ukraine. Indeed, the EU’s biggest political challenge is expected in November and not in June. It is in the EU’s interest to have Democrats elected in November. If the Republicans are elected, the EU might be left on its own to deal with the war in Ukraine. Undoubtedly, it is financially and militarily impossible to deal with the war in Ukraine if the US pulls out. It would certainly expose the block’s economic and security weaknesses. Surely, Sergey Lavrov is watching. And so are others. We just have to wait and see!
Clint Azzopardi Flores is an economist and a PL candidate for EP election