Why the EU and Germany are losing the geopolitical battle for control of southeast Europe

The EU's debacle over vaccines also corresponds to a serious geopolitical defeat of Brussels and Berlin in South-Eastern Europe, a defeat that leaves more and more space to China, now the main economic power in the area. In the palaces of European power there is much concern, the always well-informed German Foreign Policy tells us the latest developments

17+1

Since the format was launched in 2012, cooperation with China under the '17+1' has brought significant economic benefits to the twelve EU Member States and five non-EU countries in Eastern and South-Eastern Europe that participate in it. For example, the volume of trade between these countries and the People's Republic has increased by an average of 8% per year since then. Last year, bilateral trade increased by 8.4 % to a total volume of $103.45 billion, despite the Coronavirus crisis, which in other areas caused the economy to collapse. There are varying figures on Chinese direct investments in the region; according to the Berlin-based think tank Merics (Mercator Institute for China Studies), between 2010 and 2019 they would amount to EUR 8.6 billion in the twelve EU states participating in the "17+1" [1] alone. There are also funded projects and disbursed loans worth several billion euros. Significant Chinese investments have also been made in Greece and Hungary, among others. In Greece, since it was taken over by the China Ocean Shipping Company (COSCO), the port of Piraeus has risen from 17th to 4th place among European container ports; it is now the largest European container port on the Mediterranean. [2] In Hungary, Chinese companies are working in particular on the section of the high-speed railway line between Budapest and Belgrade.

"The third most important country"

The five non-EU states of South-Eastern Europe (Bosnia and Herzegovina, Serbia, Montenegro, North Macedonia, Albania) are cooperating particularly closely with China within the framework of the "17+1". Serbia, for example, has become the recipient of significant Chinese investment; in 2016, Hesteel Group, one of the largest steel producers worldwide, bought the long-standing Smederevo steel mill, one of the largest companies in Serbia. The steel mill, previously owned by U.S. Steel, had fallen into crisis by accumulating heavy losses, and was therefore sold by the American group. Already at the beginning of 2019, news reports said that Hesteel was not only bringing the plant out of crisis, but turning it into the most profitable steel mill in Europe. [3] There has undoubtedly been much controversy surrounding Hesteel's presence in Smederevo: for some time now, local residents have been protesting against the environmental damage caused by the steel plant. The protests are currently being used by Green MP Reinhard Bütikofer and his Inter-Parliamentary Alliance on China (IPAC) to stir up anti-Beijing sentiment. 4] The People's Republic is however expanding its influence in Serbia and neighbouring non-EU states; a recent study by the European Council on Foreign Relations (ECFR) concluded that Beijing has "become the most important third country" in that region. 5] The European Council on Foreign Relations (ECFR) is currently working on this issue together with the European Commission.

Pressure from Brussels and Washington

At the same time, the EU states within the '17+1' are facing massive pressure from Brussels, but also from Washington, to scale down their cooperation with Beijing and abandon the format of independent cooperation. Berlin and Brussels, however, reiterate that the EU should not be divided - an argument that is rejected by the "17+1" group, who instead point out that the most powerful Western European states, especially Germany, for their part already cooperate independently with China; for example, former Polish Foreign Minister Radosław Sikorski recently said: "The Western Europeans already have long-standing trade relations with China, and they do not allow us Central European countries to participate in these relations". If the '17+1' format were to be abandoned, then 'the rest of the EU' would also have to stop going it alone. But this would affect Germany in particular. The pressure from Brussels and Washington is also directed against individual Chinese projects in Eastern and South-Eastern Europe. Croatia, for example, recently had to cancel the tender for the country's only deep-water port because Chinese companies had a good chance of winning the contract. In Romania, on the other hand, the government decided to exclude companies from the People's Republic from building roads and railway links. 7] Chinese participation in the construction of a tunnel from Helsinki to the Estonian capital Tallinn was also strongly opposed. [8]

The Three Seas Initiative

In the struggle for influence over Eastern and South-Eastern Europe, the major Western powers remain divided. Berlin regards the region as its exclusive sphere of influence, and has tried to align the entire EU - but with little success so far - within a cohesive bloc in terms of foreign policy as well, thus seeking to maintain its primary influence over the five non-EU states of South-Eastern Europe. Washington, on the other hand, has in recent years sought to strengthen its influence in the east and southeast of the EU through the 'Three Seas Initiative' - at Germany's expense. The initiative dates back to a Washington offensive that originated during the Obama administration; launched in 2015 by Polish President Andrzej Duda and the then Croatian President Kolinda Grabar-Kitarović, the initiative was formally founded during a summit on 25-26 August 2016 in Dubrovnik, Croatia [9]. Among other things, the aim was also to improve connections between the participating countries through the construction of infrastructure. Like China's '17+1' cooperation efforts, the so-called 'Three Seas Initiative' is based on the fact that over the past 30 years, the east and south-east of Europe have been largely neglected by the richer countries of Western Europe, especially Germany, as these countries were focused on pursuing their own economic interests. This offered outside powers the possibility of securing influence in the region through economic cooperation.

China as a supplier of vaccines

Even in the fight against the Covid-19 pandemic, the situation has not changed much. Already in spring 2020, the EU had practically cut off support to the five non-EU countries in South-Eastern Europe, banning the export of protective medical equipment. China then intervened, at least partially, by providing Serbia with the necessary aid. Berlin and Brussels then reacted to this move by accusing Beijing of engaging in "disguised diplomacy". 10] The development was similar with regard to vaccines against Covid-19. Although the EU pompously announced its intention to supply the world with its vaccines, in reality it was not even able to supply the necessary doses of vaccine to its member states. For the second time, China came to Serbia's aid and provided the country with one million doses of vaccine, which meant that Serbia was able to carry out eight vaccinations per hundred inhabitants and is now in third place in Europe after Great Britain (18.86 vaccinations per hundred inhabitants) and Malta (8.89) (Germany: 3.91 vaccinations per hundred inhabitants). Recently, Hungary became the first EU country to order vaccines from China as well, and the first part of five million doses, enough to immunise about a quarter of its population, is expected to arrive this month. At yesterday's "17+1" summit, Chinese President Xi Jinping promised further shipments. [12]

[1] Grzegorz Stec: Central and Eastern Europe and Joint European China Policy: Threat or Opportunity? merics.org 01.10.2020.
[2] Beth Maundrill: Piraeus becomes top Mediterranean port. porttechnology.org 21.05.2020.
[3] Vedran Obućina: Incredible rise of Serbian steel industry. obserwatorfinansowy.pl 19.03.2019.
[4] MEPs concerned over increasing Chinese influence in Serbia. emerging-europe.com 20.01.2021. Zur IPAC s. auch Der grüne Kalte Krieg.
[5] Vladimir Shopov: Decade of Patience: How China Became a Power in the Western Balkans. ECFR Policy Brief. February 2021.
[6] Grzegorz Stec: Central and Eastern Europe and Joint European China Policy: Threat or Opportunity? merics.org 01.10.2020.
[7] Andreas Mihm: Chinas Charme-Offensive im Osten. Frankfurter Allgemeine Zeitung 08.02.2021.
[8] Mette Larsen: Chinese-backed Finnish venture of world's longest undersea rail tunnel back on agenda. scandasia.com 27.01.2021.
[9] S. dazu Osteuropas geostrategische Drift.
[10] S. dazu Die "Politik der Großzügigkeit".
[11] S. dazu Das Impfdesaster der EU.
[12] China bietet Osteuropa Impfstoff an. n-tv.de 09.02.2021.