Putin’s War Raises Europe’s Costs in its Southern Neighbourhood 

In recent years, Russia has expanded its position of power in the broader, southern neighbourhood of the EU in the crisis curve from Libya to Iran – against European interests and with further destabilising effects for the region. The negative consequences of Russia’s war against Ukraine are now exacerbating instability on the other side of the Mediterranean. This increases the political and financial costs the EU has to shoulder in its dealings with the region. The rich Arab Gulf States, Israel, and Turkey could help Europe cope with the challenges.

An overview of the additional challenges and options for Brussels: 

Since the annexation of Crimea in 2014, Russia has expanded its position of power in North Africa and the Middle East  – mostly at the expense of the European Union. In 2008, with pomp in Paris, the EU founded a “Union for the Mediterranean” with all the heads of state and governments of its southern neighbourhood from Morocco to Syria.

There the tone was set – politically and economically. Today, however, Europe can no longer engage in the central conflicts in Libya, Mali, Syria, and Iran. For Moscow can block things, not only through its veto power in the UN Security Council but, in particular, through its military presence in Mali, Libya and Syria, as well as through its military agreements with Algeria and Egypt.

A new nuclear agreement with Iran in sight – yet the Kremlin makes demands

For weeks, under the leadership of the EU Foreign Affairs Representative, negotiations on a new version of a nuclear agreement with Iran have been going on in Vienna. Lately, diplomats in London, Paris, Berlin, Beijing, and Tehran have been expecting a compromise. After the change of government in Washington, the Europeans have succeeded in bringing the US back into this multilateral agreement.

In the past, Moscow played a constructive role in containing the danger of military use of Iran’s nuclear programme as Russia wanted to prevent a nuclear Iran at its borders. Yet now, the Kremlin made easing the sanctions imposed in the wake of the war against Ukraine a precondition, thus impeding further progress.

With regard to Tehran, Moscow’s primary goal is now to further exclude Iran’s oil and gas from the world market so that the west cannot get alternative supplies as quickly. As a result, the nuclear negotiations are currently on hold, to the disillusionment of the west. For without Moscow, the UN Security Council will not pass a new treaty with Iran. The US State Department seems to be looking for a compromise with their Russian counterparts.

The Iranian leadership, in turn, needs this treaty to be able to legally sell oil and gas on the world market again. If Tehran were stalled, Iran could exert pressure elsewhere by further fuelling smouldering conflicts in the Middle East. It happened on 13 March 2022 with a missile attack on an alleged Israeli military base in the autonomous Kurdish region in northern Iraq.

Moscow’s veto power over the humanitarian situation in Syria

Russia’s military intervention in the Syrian war from 2015 has played a significant role in the destruction of the country and the flight of its citizens. Half of Syrians no longer live where they did when the war broke out in 2011. Six million have fled abroad, and six million are displaced in Syria itself.

The UN and the EU can best reach these people who need help through border crossings from Turkey and Iraq. Until June 2021, the UN Security Council still legitimised four humanitarian crossings into Syria. In June 2021, Russia used its UN veto power to limit the number to just one free crossing.

Reason: Moscow wants to pressure the west to finance reconstruction in Syria and diplomatically acknowledge the regime of ruler Assad. The US and the EU reject this as an instrumentalization of humanitarian aid to Syria. In July 2022, the UN mandate for the last remaining free humanitarian crossing into northern Syria will be renegotiated.

Russia will likely veto the prolongation of this mandate. This, in turn, could put the EU, if it wants to continue helping Syrian refugees and IDPs in the country, in the predicament of having to cooperate with the Syrian regime in distributing humanitarian aid – something Brussels wants to avoid.

Mali and Libya, Moscow’s military power on the escape routes to Europe

Some of the most important escape and migration routes from West and Central Africa run through Mali and Libya to the Mediterranean. Neither country has a legitimate central government that could put warlords, smugglers, and terrorist groups in their place. European stabilisation measures and political roadmaps for de-escalation, such as the Berlin Declaration on the Libyan conflict, are already failing.

External actors, such as Russia, signed this declaration to withdraw their mercenaries from Libya, then, let aligned soldiers from the private Wagner Group and loyal fighters from Syria stay in eastern Libya and supplied military equipment to General Haftar’s counter-government via Egypt. The government in the capital, Tripoli, also receives military support from Turkey. As a result, Libya remains divided, and the EU, though it is an immediate neighbour, has little influence.

Simultaneously, France is withdrawing its troops from the Sahel state Mali. Moscow, by contrast, sent Wagner Group mercenaries there as well. Moreover, through military agreements, the Kremlin has significant political influence in North Africa. In Algeria, from which Europe now wants to import more gas, and in Egypt, for which the EU is providing more development aid for social stabilisation. With military withdrawal, concerns about more migration, and development aid without anything in return, the EU further limits its capacity to act in North Africa, while Russia is playing a significant role.

Shortage of tourists and wheat, rising energy prices– additional costs for Brussels

In addition to the new political costs that Putin’s war against Ukraine imposes on the EU in its southern neighbourhood, there are further significant financial costs. Europe’s neighbours to the south, particularly Morocco, Tunisia, Egypt, Jordan, and Lebanon, will need additional funding to compensate for lost revenues from the absence of tourists from Russia and Ukraine and the increased world market prices for importing wheat, petrol, and diesel.

Since the outbreak of the Covid-19 pandemic, these Arab middle-income countries have already suffered from the additional debt they had to take on to pay for the rising costs of caring for the diseased and unemployed, as well as the economic collapse. In Tunis, for example, inflation is galloping at 6.6%, and the government debt-to-GDP ratio is over 90%. The potential for social unrest and migration is rising. Brussels should support these neighbouring countries through international financial institutions, such as the IMF, The World Bank, and EBRD, as well as use its own relief funds.

The rich Gulf States can financially relieve Europe

Given the substantial further costs facing Europe, too, due to the war, these considerable additional financial burdens can hardly be paid from EU sources alone. Brussels will have to look for financial partners. In recent years, the oil- and gas-rich Arab states of the Gulf region have not only become political heavy-weights in the European neighbourhood but have also considerably increased their own investment funds.

The EU should invite Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain, and Oman jointly to launch an emergency fund to guarantee that emerging economies in their common neighbourhood can bear the higher import costs for food and energy. Moreover, these Gulf Cooperation Council (GCC) member countries should be encouraged to provide more financial and technical support to UN aid organisations for refugees, children care, and food, such as the UNHCR, UNICEF, and WFP. In return, they can demand more political respect from the EU for their positions in the Yemen war and the Iran conflict.

Israel and Turkey can provide political support

While the situation in Europe’s southern neighbourhood is further aggravated by the war in Ukraine and Russia’s behaviour, it also presents an opportunity. Israel and Turkey can play a facilitator role in the diplomatic efforts to reach a cease-fire since they both maintain viable relations with Kiev and Moscow.

Israel has taken in many Ukrainian and Russian citizens with Jewish roots in recent decades (Ukrainian President Selensky explicitly requested Israeli Prime Minister Bennett mediate), and Israel needs the cooperation of the Russian generals for its own military attacks on threats from Iran-backed militias in Syria.

It has, therefore, a direct line to Putin. NATO member state Turkey also depends on tourists as well as food and energy from Ukraine and Russia. Ankara has militarily supported Ukraine with drones and controls the entry and exit of Russian warships through the Bosporus via the Montreux Convention.

Putting the EU neighbourhood policy to the test

The EU can no longer decide on its own how the economic and political development in its southern neighbourhood can support transformation in a value-oriented sense. In this region, the Kremlin has become a powerful opponent since 2014. As a result of its war against Ukraine, dealing with Moscow in the Mediterranean is becoming politically more difficult and economically more expensive for Brussels. To be able to act more sovereignly, Brussels must self-critically reflect and realign its financial and political commitment within the framework of its neighbourhood policy.

About the author

Christian Hanelt is a Senior Expert for the EU Neighbourhood and the Middle East, working in the Program “Europe’s Future.”

His areas of expertise include the Euro-Mediterranean Partnership, the Israeli-Arab conflict, the EU’s relations with the Gulf region, economic developments in the Arab world, and the causes of flight and migration.

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