In textbooks, globalization may have its good sides and less-good sides, but there are no redeeming features to the dark side of globalization - organized crime with global reach.

To get a ripe taste of this dark underbelly of globalization and its spread in Europe, dip into the latest book by Misha Glenny, a journalist who gained international attention with his reporting on the horrors of wars and bloodshed in the collapse of the former Yugoslavia. In McMafia: A Journey Through the Global Criminal Underworld, Glenny makes the case, all too convincingly, that Eastern Europe, with its new and fragile democratic systems, has become the gateway for criminal syndicates that match the best multinationals in their professional skills in exploiting the new potential for illicit goods and services to pass borders with the freedom enjoyed by normal trade.

According to Glenny, the “global shadow economy” now accounts for 15-20% of the world’s economic transactions and its epicenter resides in new EU states where governments are still trying to organize their defenses against the criminal spillover from the collapse of the Soviet empire.

Glenny’s book of reportage and analysis is reviewed by Michael Mosettig, a foreign affairs producer at the NewsHour with Jim Lehrer, in the forthcoming issue of European Affairs. He starts by admiring Glenny’s title - “McMafia” - as a way of evoking “[their] global reach as criminal ‘corporations’ aspire to penetrate markets the world over - mirroring the global goals of legal entities such as McDonald’s.”

In this global overview, Glenny implicates Europe in McMafia’s success because it provides the market for illegal labor, drugs and illicit goods. This traffic uses the Balkan states as a highway, but other Eastern and Central European states play their roles, too, as gateways for criminal activity to enter the EU. Glenny makes it clear that, so far, EU crime-fighting strategies have failed to curb McMafia’s activities. Just last week, Enlargement Commissioner Olli Rehn confirmed that the EU may freeze millions of euros in aid to Bulgaria because of its government’s inadequate efforts to fight the organized crime and corruption which has flooded the country.

Preview Mosettig’s review of McMafia on the European Institute’s website.

The twenty-first century has proved to be a rude awakening for European higher education. Despite the EU’s pledge to make Europe “the most competitive and dynamic knowledge-driven economy by 2010,” only two European universities (Cambridge and Oxford) managed to crack the top 20 in a list of the world’s top universities that the University of Shanghai published in 2007 (the U.S. landed seventeen).

In light of the rankings, European officials, at both the national and EU levels, are being forced to reevaluate the structure, financing and objectives of post-secondary education. As recently reported in Le Monde, President Sarkozy has charged his Minister of Education, Valérie Pecresse, with the goal of placing two French universities into the top 20 of the Shanghai list and twenty into the top 1,000. France also hopes to use its EU presidency to establish a “European Shanghai” system of rankings that would be more relevant to European universities.

In the latest edition of European Affairs, news editor Pascal Riché sat down with Richard Descoings, head of Sciences Po in Paris and an active proponent of educational reform, to discuss the rankings and the problems facing higher education in Europe (and France in particular). In the piece, Descoings states that the poor European showing in the world rankings stems from three failures:

“First, the lack of decent funding in continental Europe makes it very difficult to attract very good researchers and to produce sound scientific or technological research; second, the lack of autonomy [for individual universities], which means freedom to set your own strategy; third, late awareness of the intensity of the international competition.”

Evidence for Descoings’ statement about underfunding lies in a recent spotlight by the EU Observer on education. Philippa Runner points out that Europe invests far less money per capita in higher education than America does - in the EU, an average of €8,700 is spent per student, compared to €36,500 per student in the U.S. The difference between America and Europe is even more prominent in France where every high school graduate is guaranteed a spot at a university and the state pays the vast majority (if not all) of the tuition. As Descoings explains, it is due to this public stake in education that the French government has had the power to set the salaries of professors, (mis)allocate research funds and dictate the schools’ directions.

Another critique of European higher education has been that its structure and qualifications vary too greatly between countries, making it difficult for students and teachers to move between them; Critics complain that this should not happen within a supposedly “integrated” EU. And beyond their bureaucratic flaws, some European universities have been faulted for preaching an anti-market bias in their classrooms (in France and Germany in particular) and for not making the employability of their students a sufficiently high priority. EU Education Commissioner Jan Figel recently complained that Europe’s problem is that it has a “200-year-long tradition of Humboldt system where the academic world is quite isolated from the outside world.”

The good news for Europe is that efforts to reform higher education are now underway. In 1999, nearly all of the Member States voluntarily agreed to the Bologna Process, an initiative with three goals:

• Develop a common system of academic credit,
• Design a common degree structure,
• Gradually converge toward a European Area of Higher Education.

Signatory states - which now include many outside of the EU - have already made substantial progress on the first two goals, creating the European Credit Transfer and Accumulation System (ECTS) and agreeing to adopt the 3-cycle (BA, MA, PhD) Anglo-American system of degrees by 2012.

And in order to diversify and internationalize its universities, the EU increased its efforts to encourage students to study under the ERASMUS program (European Region Action Scheme for the Mobility of University Students) and established an international counterpart - Erasmus Mundus - that creates the opportunity for joint post-graduate degrees at linked universities.

But problems and criticism remain. Some complain that efforts to internationalize schools will merely result in “scholarship tourism” - that is, students attending a foreign university, using its educational resources and then returning to his/her home, thus not “giving back” to the host country. And students at the Helsinki University of Technology claim that the Bologna Process turns universities into nothing more than “diploma factories” that encourage students to value credits over academic discussion and experience.

Commissioner Figel points out that educational reform will remain difficult because education lies firmly under national - not EU - sovereignty. He plans to work to persuade both governments and students to make university studies more “relevant” and to establish better links between campuses and science and business. With these initiatives, he hopes that European universities will be better able to prepare EU citizens for an increasingly global and competitive society.

The Irish “no” to the European Union’s modernization blueprint has fueled a new round of skeptical American commentary about Europeans’ real ambitions. “In Europe, a Slide Toward Irrelevance” was the title of an opinion piece in the Washington Post by Robert Kagan, a foreign-policy adviser to Republican presidential candidate John McCain. “The danger of this latest blow to European confidence is that our allies, including Britain, could gradually sink into global irrelevance,” Kagan wrote.

This view dwells on an alleged pattern in which European voters seem to shun opportunities to gain unity for EU action. Further, it appears as if Europe’s governments have been unable to put together the political clout necessary to match the EU’s economic weight. This new negative view among some analysts about the EU’s lack of ambition is the opposite of the prevailing concern in recent years in Washington about the risks of seeing the EU seek to become a counter-balancing power to the United States in international affairs.

Nowadays, according to Kagan, Europeans seem hesitant to gird themselves to face a growing array of challenges. The outcome of the Irish ballot has left the EU less equipped to deal with Western economic slowdown, the increasingly competitive Asian sector, mounting European dependence on imports of monopolized Russian energy, and immigration and assimilation issues. The Treaty of Lisbon – now in limbo – was intended to address a number of these problems, notably by restructuring the EU’s leadership institutions to provide a stronger voice on the international level.

Now the proposed treaty is threatened with unraveling. Ireland was the only country where it was put to a popular vote, and European leaders say privately that it would have been rejected in some other EU nations that chose to avoid putting it to vote by sticking to the formula of parliamentary ratification.

Such questions about Europeans’ deepest – and perhaps unconscious – attitudes are not confined to Washington. Gideon Rachman, a leading commentator of the Financial Times in London, seems to concur in Kagan’s skepticism about Europeans’ political will, writing recently that Europeans may actually prefer a kind of “nirvana” based on weakness rather than having to shoulder the burdensome responsibilities of a global political and economic power. Europeans, Rachman said, may ultimately want nothing more than to become a kind of super-safe Switzerland, with no real voice in world power politics.

Hubert Vedrine, the former French foreign minister, expressed similar questions about Europeans’ collective political will in an interview with European Affairs to be published next week.

“Of all the foreseeable poles in the multi-polar world, it is the European pole whose future is the most uncertain; I question whether Europe truly has the will and motivation to become a full player. Maybe Europeans will prefer becoming a huge Switzerland – a well-protected zone with a very high standard of living and great liberty, but without the responsibility of power. European public opinion seems to suggest a desire for this condition of being detached from responsibility.”

Kagan famously created the figurative comparison that “Americans are from Mars and Europeans are from Venus” in his book Of Paradise and Power, which argued that Americans are more inclined than Europeans nowadays to see force as a solution to international crises. His subsequent book, Dangerous Nation, described America’s historical readiness since independence in the 18the century to undertake international intervention. (It was reviewed in European Affairs by James Steinberg, who has been named to Obama’s panel of foreign-policy advisers. Kagan has spent the last four years in Europe, and his return to Washington was marked by the publication of his new treatise, The Return of History and the End of Dreams. This book warns about possible new threats to global stability from autocratic powers, notably Russia and China: it will be noted in the forthcoming issue of European Affairs.

The European Parliament approved new EU-wide regulations with tougher measures against illegal immigrants – a population thought to number eight million (compared to an estimated 12 million in the US). The EU law, a “return directive,’ is intended to harmonize laws and policies on the politically explosive issue in all 27 member states by providing a common framework for each country’s national laws. A central point in the directive is a provision in which illegals that refuse to go home can be detained for up to 18 months and then deported – with a ban on them from reentering the EU for five years.

Parliamentary assent marked the final step in instituting the new set of regulations.

The rules in the return directive exempt asylum-seekers. But they apply to foreigners who have overstayed their visas.

Critics of the new measure brand it as an abuse of migrants’ human rights, arguing that the length of detention is disproportionate and unwarranted. But proponents retort that the directive will actually improve immigrants’ protection in EU countries where the laws currently allow indefinite detention of illegal immigrants. In a statement issued, the European Parliament said that “member states will be banned from applying harsher rules to illegal immigrants, but allowed to keep or adopt more generous rules.” It adopted the legislation as a step forward in EU integration that will help governments cope with the threat of a rising tide of illegal immigrants, notably from Africa. Human-rights activists warned that the new law will be exploited by some EU countries alarmed by inter-ethnic tensions as Europe’s demographic make-up shifts as Muslims arrive from the Middle East and Africa, and Eastern Europeans move west.

Flak has also come from Latin America about the new directive. Venezuela’s president, Hugo Chavez, threatened to disrupt oil exports to Europe over the issue. Some Latin American countries apparently are afraid they might lose remittances from their emigrants to Europe. The EU Observer notes, “last year immigrants in Europe, the US and Japan sent money back to their families in Latin America and the Caribbean amounting to just under €43 billion, more than the region receives from foreign direct investment or development assistance combined.”

The US is wrestling with similar problems of immigration without yet finding a national consensus. Many American business sectors depend heavily on immigrants, some of them illegal.

Analysts predict that immigrant labor will be increasingly important to Europe given the pejorative economic effect of its aging indigenous populations. Additionally, it has become increasingly evident that the EU lacks the skilled migrant labor it needs in order to stay competitive in the global economy. Europe needs help filling the void left by the highly educated workforce that has emigrated – primarily to the US. Using Census data on education and income, French economist Gilles Saint-Paul of Toulouse University explained to The Wall Street Journal that “a disproportionate number of European immigrants in the US were among the brightest prospects in their fields…the people who are most important for innovation and entrepreneurship.”

The debate over biofuels has heated up on both sides of the Atlantic in recent weeks, with the current prime biofuel - ethanol made from corn - now being blamed as a contributing factor to the dramatic rise in the price of food around the world.

Until recently, it was seen by many as a silver bullet for cutting dependence on oil, thus helping energy security and reducing greenhouse gas emissions. Not everyone agreed with the idea. In the winter 2006 issue of European Affairs, John Ritch, head of the World Nuclear Association, pointed out that it remains to be seen whether “biofuels” actually constitute a long-term contribution to a sustainable strategy for clean energy. In the climate crisis, a not insignificant factor is the shrinkage of “carbon sinks” as the world’s forests get converted to farm land. So the limited amount of farmland is a constraint. And “clearing woods to plant these crops actually heightens our vulnerability to amassing more greenhouse gases in the atmosphere,” he wrote two years ago.

Now, the impact in terms of displacing food crops to raise ethanol has emerged as another, more immediate drawback for biofuels. In the U.S., for example, Congress increased incentives for ethanol production designed to raise output from seven billion gallons a year to 36 billion by 2022, with 15 billion of that coming from corn. The remainder will be derived from “next generation” sources such as prairie grasses and wood chips, but it could be years before this advanced ethanol will be available on a commercial scale. This mandated, subsidized biofuel uses corn as its main foodstock and last year absorbed a quarter of the U.S. corn harvest. When combined with surging demand for corn abroad fueled in part by the cheap dollar, the effect has been to displace other crops, reducing their supply and raising prices for other foods from bread to beef that depend on wheat. By next year, as much as one-third of U.S. corn production is expected to go into ethanol.

Another source of consternation (and transatlantic frictions) are biodiesel-production subsidies in the European Union and in the United States. The U.S. government provides a $1 subsidy for every gallon of biodiesel that is blended in the U.S. for export. Europeans complain that this has given American producers an unfair advantage in EU markets, where “artificially cheap” American products are putting EU producers out of business. Many European nations and the EU also provide somewhat less generous subsidies to biofuel producers, but there has been pressure for them to eliminate such support. Some have said that a high demand for biofuels in Europe has made subsidies unnecessary.

This subsidy was intended to help the American biodiesel industry, but it seems that foreign companies have discovered a way to take advantage as well. Biofuel producers from Europe and elsewhere ship their biodiesel to the U.S., where they add a “splash” of regular diesel, qualifying their product for American subsidies. The fuel is then shipped back to Europe for sale, where it is also eligible for EU subsidies. This loophole, which has been a cause of public complaints since late last year, ironically results in even higher carbon emissions from the back-and-forth transatlantic shipments.

Another objection to biofuels among environmentalists is the high demand for water at big ethanol-production facilities. This has added to strains on the water table in Florida and other localities in the U.S. There are growing concerns, too, that ethanol was oversold as a product that would reduce greenhouse gases. Some new U.S. ethanol plants are powered by coal, and truck corn from hundreds of miles away, gobbling up fossil fuels. Acreage displaced for energy crops here may be replaced by plowing virgin lands in Africa and South America, causing major releases of carbon. And although corn ethanol plants that are built after next January 1 will have to show they are reducing carbon, most plants needed to meet the 15 billion gallon mandate will already have been built by then.

The new attention to ethanol’s downside has prompted statements in Congress about rolling back federal support for biofuel production in the face of rising food prices. House Majority Leader Steny Hoyer suggested on May 1 that he favored moves in this direction. At the urging of the livestock, poultry and hog industry, the governor of Texas and 28 Senators have asked the administrator of the Environmental Protection Agency to set aside ethanol requirements at least temporarily to help ease corn prices. The New York Times published an editorial on Sunday calling on Congress to roll back subsidies and rethink its support of ethanol. But the ethanol boom has brought windfall profits to farm states, so there are doubts about whether this policy can be changed fast, especially in an election year.

In the EU, fingers are being pointed at the U.S. on this issue. EU trade commissioner Peter Mandelson did so in an op-ed published in the Guardian (UK). “We can already see that large-scale biofuel production, especially in the U.S., may be one of the factors pushing up food prices,” he wrote. “The race to grow maize for ethanol subsidies in the U.S. reduces the supply of food crops on world markets and drives up the cost of this important staple.” (”Maize” is the grain that Americans call “corn.”) Despite the EU’s mandate that biofuels account for ten percent of transport fuel by 2020, Mandelson argued that European biofuel production is having “only a minimal effect” on food prices.

Amid these recriminations, there is talk in the EU of scrapping biofuel subsidy programs, Already, these is increased pressure on EU officials to lower or abandon the ten percent target, especially in Germany where at least one-tenth of the nation’s cars do not have engines adapted to run with a significant admixture of ethanol. In the UK, all petrol and diesel sold at pumps is now required to contain at least 2.5% biofuels. But Prime Minister Gordon Brown signaled a retreat from biofuels last month, acknowledging the global food crisis and saying that Britain must be “more selective” in its support for biofuels.

See Also:
Editorial: Rethinking Ethanol, New York Times, 11 May 2008
Nuclear Rising on Both Sides of the Atlantic, European Affairs, Winter 2006
U.S. Biodiesel Subsidies Anger Europeans, National Public Radio, 10 April 2008
Biofuels: EU plans to scrap ‘needless’ farmer aid, Business Report, 15 April 2008
Demands for crackdown on biofuels scam, The Guardian (UK), 1 April 2008
Biofuel Boondoggle: US Subsidy Aids Europe’s Drivers, Christian Science Monitor, 8 June 2007
Congress’ ethanol affair is cooling, Washington Times, 1 May 2008
Op-Ed: Keeping the Crop in Hand, The Guardian (UK), 29 April 2008
Pressure Grows on EU to Abandon Biofuels, Der Spiegel, 16 April 2008
Petrol must now include biofuels, BBC News, 15 April 2008
Brown’s biofuels caution welcomed, BBC News, 22 April 2008

Correction: This post was edited on May 13 to better reflect the different subsidies allocated for biodiesel and ethanol.

Parliament’s Marek Siwiec does Q&A with European Affairs

Marek Siwiec, 53, is a Polish politician who is a vice-president of the European Parliament, where he belongs to the European Socialists faction. Between 1997 and 2004, he was the chief of the Polish National Security Office under President Aleksander Kwasniewski, a key international policy post in the presidency. Siwiec visited Washington in May with a delegation of the European Parliament and spoke with European Affairs during a brief Q&A session.

Q: How well does Washington understand trends in the European Union?

A: Like any superpower, the United States has a tendency of over-simplify foreign problems. It tends to ignore trends that emerge quietly, without dramatic developments that compel attention among U.S. policy-making elites. This applies to the EU, which is still not well understood in Washington.

Q: What do U.S. policy-makers grasp?

A: Americans understand the Schengen accord and our customs union because they are familiar with free travel and free trade. But they often don’t understand our approach to juridical issues or internal-security problems. The EU cannot really be understood by comparisons with any other system.

Q: Is this damaging?

A: U.S. policy-makers still tend to operate with the cold war era’s reflex of preferring to build bilateral policies with each individual European country. Take the visa-waiver question: the regime should be the same for all EU member states in the EU but it isn’t. Of course, it doesn’t help that we in the EU have not managed to develop a cohesive foreign policy of our own yet.

Q: Do you see any positive trend?

A: Transatlantic trade and direct investment are spectacularly large, so the EU and U.S. have a responsibility to work together on a broad range of global policies. I counted eight or nine European Commissioners who have given speeches in Washington in the last few months talking about cooperation on a whole list of subjects: justice, anti-trust, accounting standards, economy, environment, open skies and so on. Very slowly, the EU is gaining credibility in Washington.

Q: How is the Parliament evolving?

A: It is not yet the legislative body it is supposed to be, but it is changing. It started as little more than “democratic window-dressing.” Many parliamentarians were people who had not been very successful politically in their own countries. That’s changed: now there is two-way traffic between being an MEP and a foreign minister or vice-premier in a national government.

Q: Is this change affecting your role?

A: The parliament has a dramatically more energetic role, and it is actively looking for policy areas where it can make an effective difference. Right now, we’re involved in roughly 40 areas of EU policy, but once the Lisbon treaty takes effect, that number will more than double, to about 90.

Q: What about your impact?

A: We are getting more powers. Recently, we forced multinational phone companies to reduce roaming charges for their mobile-phone subscribers in Europe – a change that affected several hundred million people in their daily lives. There was no other institutional set-up ready to tackle this problem, so we did. Looking ahead, I expect to see the parliament doing more and more of this sort to thing, in being responsible to the voters who now put us into office by direct elections.

Q: What sort of issues do you have in mind?

A: Look for us to be increasingly active on questions that interest the European electorate: human rights, environment, consumer issues – a whole range of these questions. Take the example of the U.S. program to operate secret “rendition” flights through airfields in Europe. No government involved in this practice has acknowledged publicly what happened. We took it on with parliamentary methods. In trying to push into such an area protected with high-level laws and secrecy, we had only limited success. But something important happened. I am convinced that as a result of our efforts such things will not happen again in the future.

Q: What did the matter tell us about the parliament?

A: It showed we had enough courage to tackle such a sensitive issue, and it was an important sign of our special role. The European Commission gets its mandate from the EU’s Council of Ministers, which represents the governments of the member states. That set-up implies some limits on what those bodies are going to do. In contrast, the parliament can operate outside that mandate of governments because we are the voice of the people. It was a milestone when the parliament succeeded in putting enough pressure on the Commission to block the appointment of an Italian nominated to be a Commissioner and get him replaced. (Incidentally, the successor, Franco Frattini, has just gone back to Italy as a cabinet minister in the new government.)

Q: What is the biggest change you think the parliament should push?

A: The Parliament has enough status to help bring about constructive discussion about big changes in the Common Agricultural Policy. The time has come. Those subsidies usefully maintained our agriculture when crop prices were low. Now food prices have risen enough for farmers to stay in business, comfortably, on a free-market basis. We need to start making the point that the money spent on price supports should go on other forms of help to farmers. Right now. There is a big “civilization gap” between rural and urban areas in many of our countries – for example, in Poland. We have large populations living far away from access to culture, health care and many other benefits. So I would say, “dear farmer, let’s talk about spending the money not on your potatoes but on other things that can benefit you in other ways.”

Q: Looking outside the EU’s borders, what foreign issues are on the front burner in the parliament?

A: Like other EU institutions, we’re trying to assess some broad international geopolitical issues such as the Middle East problem. One of the reasons for my visit here to Washington is to address the American Jewish Congress on the 60th anniversary of Israel’s foundation. Right now, Washington is trying to establish a balance sheet for its eight years in office, and it’s a complicated question in the Middle East. But taken from the angle of Israel’s security, I think the outcome has been negative. Many new phenomena have emerged: Hama’s control in the Gaza Strip, Hezbollah gains in Lebanon. This cannot be blamed entirely on Washington, I think, but things are moving in a bad direction and the lame-duck administration cannot do much. So the question is: Where was the mistake? What policy changes are needed? Can the EU change its future role? It is not the right time – and should not be the time – for Washington to try any spectacular action, so the EU should try to be present in a way that encourages positive trends in the region (precisely the trends that are not dominant right now). I think we can see that our approach to exporting democracy can backfire by bringing to power factions – like Hamas – that gain a mandate for their dangerous regime. Above all, the EU has to have ambitions to become not just a payer but a player.

Q: How can the EU ever have political leverage in an area where one side of the conflict, Israel, mistrusts you?

A: We have to get beyond a situation where our policy is being set by CNN and other television networks that constantly focus on showing violence and often violence shown as attacks on Palestinian civilians. We have to think more carefully about defining our long-term vision for this part of the world. We need to convince our societies to focus on the need for long-term stable peace in the region. I think a particularly helpful contribution is coming from the so-called “new Europe,” where countries, particularly Poland, are friendly toward Israel. It’s time for Europe to stop thinking of Israel just as a troublemaker and start to recognize Israel as a democracy that can be an attractive partner for us in many ways. For this, we need to move beyond a pattern that consists only of commemorating the holocaust and the rest of the past and move toward a vision of Israel and Europe in the 21st century. When Poland got back its freedom 20 years ago, we discovered some ugly truths about our past and Polish people’s relations with Jews. We faced these difficult facts and had tough discussions among ourselves coming to terms with them. We had the freedom to do it, and the truth we now come to hold has reinforced our authentic freedom. This new situation could give us a new attitude in the Middle East.

 ______________________

* Answers have been edited for clarity.

Michael Chertoff, the U.S. homeland security head, warned recently that the potential harm of a cyber-warfare attack was “on a par” with what the United States sustained in the 9/11 terrorist attacks in 2001. He issued the warning this month at a public meeting of information-technology specialists in California.

This threat is treated in depth in the current issue of European Affairs, due out this week in the article entitled “Cyber War I” about the massive attack last year on Estonia’s civilian infrastructure of communications, finance and public service. Western defenses are still in their infancy, and Chertoff’s comments were partly aimed at getting the tech community to overcome their inhibitions about helping national security in this realm. As described in this reconstruction of the episode in Estonia, the tide was turned in Cyber War I partly thanks to a helping hand from some top global geeks. Written by Kertu Ruus, U.S. bureau chief of the leading Estonian business daily Aripaev, the article talks about the status of Western readiness against computer warfare, including the creation in Estonia of a NATO center to work on this specialized form of war.

At last week’s IT conference in Silicon Valley, Chertoff’s overtures to technology’s private sector were clear: “Please send some of your brightest and best to do service in the government,” he asked the audience. He acknowledged that the Federal government is unable to compete with private industry in terms of money, but hoped that some of the U.S.’s top IT professionals would be drawn to DHS out of a desire to serve their country.

Read Kertu Ruus’s account of Cyber War I in the upcoming issue of European Affairs.

See Also: Cyber risk ‘equals 9/11 impact’, BBC News, 8 April 2008

As noted here before, Georgia and its allies (including the United States and most EU member states) have feared that Russia might be “paving the way” for official recognition of Abkhazia and Ossetia, the Georgian provinces with separatist ambitions. Following the West’s recognition of Kosovo, which Russia opposed, Moscow warned that the move could cause further provincial splits in the porous Caucasus region, and some Europeans feared that the warning might become a self-fulfilling prophecy– especially with help from Moscow. With each passing week, there are fresh signs that the concern may have been well-founded as, according to reports today, Russia now says it intends to upgrade ties with the two separatist territories in neighboring Georgia.

The Georgian government in Tbilisi attacked the plan as “creeping annexation” aimed at creating problems liable to complicate Georgia’s acceptance into NATO. From today’s Wall Street Journal:

Abkhazia and South Ossetia broke away from Georgian control in fighting during the early 1990s. They are protected by Russian peacekeepers, use Russian rubles, and Russian passports have been issued in recent years to a majority of the population.

Wednesday’s statement said Russia’s goal was to improve the economies of the two territories, and not to provoke confrontation with Tbilisi. It also stopped short of formally recognizing the territories’ bids for independence, though leaders in the territories and Russia’s parliament welcomed the move as a step toward recognition.

“The State Duma passed an appeal proposing the president consider the possible recognition of Abkhazia and North Ossetia. The president has taken the first step in this direction,” Oleg Morozov, first deputy speaker of Russia’s parliament said Wednesday, Russian news agency Interfax reported.

Despite strong support from the U.S. and several European nations, Georgia’s bid for NATO membership was thwarted earlier this month when Germany, France and some other European members balked at U.S. pressure and refused to agree that conditions were ripe to offer Georgia (and Ukraine, which also borders Russia) a Membership Action Plan, which is the preliminary step to a candidacy for membership in the alliance. Any NATO steps toward admitting Georgia or other eastward expansion by NATO were stiffly opposed by outgoing Russian President Vladimir Putin and his successor, Dmitry Medvedev.

RadioFree Europe also has an extensive account of the latest developments:

Determined to thwart Tbilisi’s goals of reintegration, [Russia] remains a steadfast supporter of the breakaway regime and maintains considerable leverage as the dominant player in international mediation efforts.

In recent weeks, Moscow has actively stepped up its presence in the breakaway regions, lifting economic sanctions and moving to establish semi-official “embassies.” Russian President Vladimir Putin on April 16 ordered his government to recognize legal entities registered in Abkhazia and South Ossetia.

Moscow, mindful of its own separatist conflicts, is likely to stop short of recognizing Tskhinvali and Sukhumi’s self-declared independence. But such moves are still deeply aggravating to Tbilisi, and ensure that Russia will continue to play a decisive role in the region.

Related Posts:
NATO Approves U.S. Missile Agenda as Allies Postpone Georgia and Ukraine, 3 April 2008
European Officials Fear Russian Meddling in Georgian Separatist Region of Abkhazia, 11 March 2008
Medvedev Steps Up Rhetoric, Warns Against NATO Expansion Eastward, 25 March 2008

See Also:
Georgia: Could More Dialogue, Fewer Demands, Be Ticket On Abkhazia? [RadioFree Europe, 16 April 2008]
Russia to Bolster Ties to Separatist Areas in Georgia [Wall Street Journal, 17 April 2008]

More news about Germany’s “new emigration”

The German government has started subsidizing moves by unemployed Germans to help them get to jobs they find abroad. Known as “mobility incentives,” these payments cover moving costs for workers and their families anywhere in the world. The amounts range from 100 euro to around 1000 euro, depending on circumstances, and cover several separate items from actual travel to the cost of moving furniture or buying new furniture and other basic necessities.

Officials at the European Commission in Brussels told Reuters that they were unaware any of other EU country offering such help for moves abroad.

As reported by National Public Radio (April 16, 2008) and Forbes (April 15, 2008), this assistance has drawn mixed reactions in Germany. Some economists say it is a bad policy for a nation with a shrinking population and a comparatively low birth rate. Some critics describe it as a recipe for disaster because Germany already has a shortage of skilled labor that is now acute in some industries such as engineering and car-making and also looms in sectors such as retail sales, health care and finance. More generally, “depopulation” has become an issue in some areas, especially the formerly Communist east Länder. The funds are also available for relocations inside Germany.

So far, the number of beneficiaries has been limited, apparently in the hundreds. Officials in Germany were quoted saying that statistics were not yet available because the program is administered through local authorities, not the central government.

The German authorities apparently feel the program may prove a useful step in fighting unemployment which is in excess of 3.5 million people - about eight percent of the labor force (one percentage point higher than the eurozone average).

Related Post: The mobility initiative fits into a larger picture of a degree of greater readiness among Germans to emigrate, which we noted here last week.

President Bush’s plan to build a missile-defense shield in Europe won approval from NATO at yesterday’s Bucharest summit meetings, marking an important victory for the U.S. agenda and for American hopes of getting Moscow to ease its opposition. But the summit balked at U.S. pressure to start an admission process for Ukraine and Georgia as premature and liable to raise tensions with Russia.

The planned ballistic missile-defense system involves 10 interceptor missiles based in Poland and a tracking radar site in the Czech Republic. Poland and the Czech Republic are pleased to announce the completion of negotiations on a missile defense agreement,” says a joint statement by the two countries, issued on the fringes of the NATO summit in Bucharest (3 April).

In endorsing the project, a statement by the 26 nations alliance said that the system “will be linked to other US missile defense facilities in Europe and the US.” In addition according to NATO’s Secretary-General Jaap de Hoop Scheffer, the alliance will “develop options for a comprehensive missile defense architecture to extend coverage to all ally territory and population not otherwise covered by the US system.” These areas – including Turkey, Greece, Bulgaria and Romania – would not be protected by the missile shield as currently planned. In addition, plans are under discussion about how a NATO-focused network of defenses against short-and-medium-range missiles could be “bolted onto” the planned U.S. shield supposed to operate against long-range attacks.

The U.S. was less successful in its bid to gain NATO admission for the former Soviet republics of Georgia and Ukraine. The alliance moved to admit Croatia and Albania, but Germany and France led opposition to Bush’s push to expand the alliance into Georgia and Ukraine with a “membership action plan (MAP),” arguing that such a move would unduly provoke Russia, which has vehemently opposed the idea. Most NATO governments also take the view that both these countries have internal troubles – separatism in Georgia, a deep split about Russia in Ukraine – that could become problematical if they were put officially on track to NATO membership. (more…)