Total Pageviews

Friday, 23 October 2020

The East Med: A new hotspot for Europe?

On 14 October 2020, the first SEESOX webinar of the Michaelmas Term - “The Eastern Mediterranean: a new hotspot for Europe” - focused on the geopolitical state of play in the region following the summer of 2020 and the crisis between Greece and Turkey. The region is increasingly becoming an area of insecurity, with high stakes and numerous stakeholders. The webinar looked at the key challenges, the main drivers behind the competing interests, and high risks for the future.

The speakers were Constantinos Filis (Institute of International Relations, Athens), Fiona Mullen (Sapienta Economics, Nicosia) and Sinan Ülgen (Centre for Economics and Foreign Policy Studies, Istanbul); it was co-chaired by Othon Anastasakis and Mehmet Karlı, both of St Antony’s College, Oxford.

Filis saw growing interest by the international community in the Eastern Mediterranean, with a number of increasingly complex challenges and threats in the region.

European countries were unwilling to accept the increasing flow of migrants and refugees from the Middle East or Africa, complicating the status quo in the East Mediterranean. Many jihadist terrorist groups were active in the region, and their reach was expanding in many countries, including Libya, threatening gain of territorial control in certain areas and thence, through migration, increased presence in Europe.

The coronavirus crisis put at risk current and future investments in countries such as Egypt, Morocco, Tunisia, and Jordan, and with significant decreases in energy prices as a result, the economies of countries relying primarily on the energy sector, such as Algeria, would be adversely impacted. Since the crisis would hit weak economies and vulnerable population groups the hardest, it might act as a catalyst for political and social developments at grassroots, possibly leading to uprisings and new political movements, and further exacerbating existing political instability in the region. Additional causes for concern came from the proxy wars in Libya, Syria, and Yemen. The West appeared unable or unwilling to intervene effectively, leaving a vacuum from which other countries, such as China, Russia, and Turkey, sought to profit.

The energy sector could however play a crucial role in the resolution of Eastern Mediterranean disputes. The EU’s gas supply is mainly reliant on Russia, and an additional resource of natural gas from the Eastern Mediterranean, allowing diversification, would be very desirable. In the end, the coronavirus pandemic and time would define the course of events. With oil prices expected to remain low for the foreseeable future, energy companies would pull back on investments, shelving or even cancelling plans. Eastern Mediterranean natural gas would thus face competitive pricing problems and, with the global economic model increasingly directed at decarbonization, time did not favour regional producers.

A new regional landscape was emerging in the East Mediterranean, following the UAE’s recognition of Israel, with at least five other Arab countries apparently ready to follow suit, potentially affecting the Palestinian situation and risking Turkish isolation in the region. He saw two possible scenarios for action by the USA, neither mutually exclusive; they might try to secure their interests through a wider alliance and synergy between Israel, the Arab countries and Greece, or they might return to a more direct role in the region, in both cases in support of their wider goal of containment of Russia and China.

For Greece, relations with Turkey remained a top priority, but its agenda was mainly determined by its desire to be a bridge between the EU and the countries of the region. Greece was seeking to capitalize on its geographical position by becoming a commercial gateway and a hydrocarbon energy hub supplying the EU market. Libya remained a key concern, with the Agreement between Greece and Egypt overlapping with the Memorandum of Understanding between Turkey and the Government in Tripoli. Finally, Greece needed to persuade its EU partners to turn their attention to the region with the aim of providing security and stability.

In conclusion, he saw several issues critical to the stabilization of the region: the acceptance of common rules of good neighbourliness; respect for international law, including determining maritime borders under the International Law of the Sea; dialogue and cooperation between neighbouring states; the exploitation of mineral wealth; and synergies on projects for economic development and prosperity in the region.

Ülgen noted that, while the positions of stakeholders in the Eastern Mediterranean had stayed largely the same for a long while, we were at a turning point after almost 30-40 years. What had driven this new escalation and where might the situation be heading?

It was the discovery of offshore energy resources that had raised the stakes. Until now, the Eastern Mediterranean conflict had been mainly theoretical, focusing on national sovereignty issues such as the delimitation of maritime boundaries. However, it had acquired a new dimension with the discovery of offshore resources, requiring the parties to calculate the concrete economic consequences of a maritime delimitation.

Another important factor was the evolution of Turkish foreign policy, resulting from its diplomatic isolation in the region after the Arab Spring. The countries of the region, excluding Turkey, had established the Eastern Mediterranean Gas Forum (EMGF), creating a partnership to leverage their offshore resources. Naturally, Turkey had reacted to a development.

The more assertive stance of Turkish foreign policy, relying primarily on hard power, rather than on its soft power or its network of alliances, had two main goals: to prevent the full commercialisation of these offshore resources while excluding Turkey, and to force Greece to come to an agreement with Turkey in order to exploit them.

This strategy had paid off to some extent, because the exploratory talks between Turkey and Greece - suspended after the coup attempt in Turkey in 2016 - were about to restart. In this regard, he hailed the efforts of the German EU Presidency, which, unlike France which had sided blindly with Greece, took an active interest in this issue. The more neutral role played by Germany had led to the meetings of Turkish and Greek delegations in Berlin in July, including direct talks between the two governments.

He saw the dispute as made up of three different geographical layers. The first related to the Aegean Sea, where Turkey has a host of bilateral differences with Greece, covering not just the continental shelf, but also territorial waters, the demilitarization of the islands, air traffic zones and many others. Turkey therefore sought a bilateral process where it can discuss the entirety of these disputes. Greece considered however that many of these issues related to its national sovereignty and were thus not up for discussion. In fact, these issues have been the subject of the so-called “exploratory talks” between the two sides for almost 40 years, aimed at working out which disputes can be addressed between the parties.

After more than 60 rounds of these talks, covering not only the continental shelf but also other disputes, the two sides came very close to reaching an agreement through a direct political settlement for some issues and international adjudication for others. However, in the latter case, agreement was also needed on the legal norms that the international adjudicator, whether the International Court of Justice or the International Tribunal for the Law of the Sea, should take into consideration. While the United Nations Convention on the Law of the Sea (UNCLOS) is of course the primary reference, it is not the only one, as Turkey is not a party to UNCLOS, so that it might wish to have the international adjudicator take into consideration other international principles like equity. In the end, all these problems had to be addressed through bilateral negotiations.

The second layer concerned the islands in the Eastern Mediterranean, such as Kastellorizo, Crete and Rhodes, and whether they had their own continental shelves. Even assuming they did, the parties disagreed on their extent.

The third layer concerned Cyprus and was perhaps the core of the Eastern Mediterranean problem, given the political separation in the island and mutual and opposing claims with respect to the continental shelf and Cyprus’s exclusive economic zone. In this regard, Turkey had proposed a condominium formula, allowing progress pending a settlement in Cyprus, under which revenues from offshore projects would be shared equitably between the Turkish Cypriots and the Greek Cypriots. While the Greek Cypriots acknowledged the right of Turkish Cypriots to benefit from these resources, they continued to condition this on a political settlement. Their proposal was to put these revenues into an escrow account that would be freed only once a political settlement was reached. This reflected a fear that the Turkish formula could engender a tacit recognition of the Turkish entity.

He concluded that, in order to understand the Eastern Mediterranean conflict, one needed to unpeel these layers. If the international community wanted to find a lasting solution to Eastern Mediterranean disputes, multiple diplomatic strategies would be needed.

Mullen began by stressing that a solution to the Eastern Mediterranean problem required sevral steps. After first identifying the interests of the various players in the area, a proper analysis of what scenarios might meet all of those interests was needed. Only then could practical suggestions be put forward for the resolution of the conflict in the region.

Looking at the different players’ interests, Mullen saw the EU as seeking a stable relationship with Turkey including good bilateral cooperation on migration, and avoiding vetoes from the Republic of Cyprus or Greece in external action areas including NATO-EU cooperation. On the energy side, the EU wanted to cut emissions and diversify energy sources, so as to create a modern, digital, and green European economy, while demonstrating its geopolitical credentials as opportunities arose.

The USA sought to keep Turkey on its side as before, alongside stability in the Eastern Mediterranean. If Joe Biden won the upcoming elections, there could be more pressure from the USA for cooperation among all Eastern Mediterranean countries, include both the EMGF countries and Turkey. Russia sought to retain the foothold it already has in Syria, so any deal in the Eastern Mediterranean, needed to ensure, at the very least, that it did not threaten Russian interests. Otherwise, Russia might intervene to stymie it.

As for Turkey, it sought a role as a legitimate player in the Eastern Mediterranean, believing that it had been taken for granted on migration and in NATO. In addition, it felt threatened and surrounded by the EMGF. Greece sought in the short term to avoid a military clash with Turkey, but it was also seeking to become a key energy player, by developing both its gas reserves and renewables, to become an energy hub. In the long term, it sought a stable relationship with Turkey.

The Greek Cypriots sought, in the short term, to be able to exploit their gas reserves, but also to be respected as an EU player in the Eastern Mediterranean, and not be pushed around by Turkey, whether on land or sea. Finally, the primary aim of the Turkish Cypriots, was to have real agency in their own affairs, which at the moment they largely lacked. They also demanded an equal place at the gas table, in addition to revenue sharing and, in the context of a Cyprus settlement, an equal voice.

Mullen then focused on the scenarios that might meet all of these interests, with the aim of creating a win-win solution in the region, with something for everyone. This could be possible through a grand “gas plus” energy deal for the Eastern Mediterranean, achieved by looking beyond gas alone, which might already be a declining commercial resource, and stitching together gas, renewables, electricity interconnectors, green hydrogen, communications technology, and defence. Such a solution would be further facilitated by low cost finance from those looking for decent green investments, such as the Norwegian Sovereign Wealth Fund, private equity funds like Black Rock, the European Investment Bank and the European Bank for Reconstruction and Development.

The political parts of such a deal were equally important, as it would require Greece and Turkey to agree on maritime delimitation. Turkey also needed to be a member of, or a partner in, the EMGF and, in order to address the very deep mistrust between all sides at the moment, a mechanism would be needed to ensure mutual trust that others were going to behave. Finally, a settlement of the Cyprus problem was also required to fix the wider region.

The gains for everyone from a common deal in the Eastern Mediterranean were numerous. Firstly, peaceful Eastern Mediterranean cooperation was a positive. accompanied maybe by other spin-offs such as in Libya. Secondly, a solution would herald better relations between Turkey and, respectively, the EU, Greece, and Cyprus. Thirdly, the Cyprus problem would be solved at long last. Fourthly, such a solution would show the EU flexing its geopolitical muscles. Fifthly, everyone, might begin to exploit the gas before it is too late, and renewables take over. In addition, if renewables were also included in this deal, the parties would be able to prepare for the coming renewables revolution.

She acknowledged that there were obstacles to reaching this deal. One was the continuing silo approach, which sought to resolve complex, interdependent issues in isolation, exacerbated in the energy sector by a silo approach of talking only about gas. The parties needed to expand the pie so that there was something for everyone. Furthermore, there was obviously an ongoing turf war regarding the Cyprus problem between the EU, the United Nations, the Turkish Cypriots, and the Greek Cypriots, and there needed to be more flexibility on all sides.

With the aim of getting everyone talking, there was need to speak to everyone’s interests, and to broaden the imagination of the different actors. They should be helped to see the vision because once they do, it becomes much easier to get to the political deals. But in order to get there, all international enablers needed to work closely together. As a matter of practicality, talks should start not at the official level, since recognition disputes meant that trying to get Turkey, Greece, the Turkish and Greek Cypriots all at the same table at official level would take at least two years. In order to include everyone in the Eastern Mediterranean, talks should begin among people who are either not officials or at least do not act in their official capacity, and in this process, political leaders should be educated about what is possible in the region. Similarly, energy experts and companies should be used to explain to the politicians what might be commercially possible in the Eastern Mediterranean, helping political leaders to imagine a cooperative future.

She concluded that the parties needed to approach the Eastern Mediterranean dispute by thinking about everyone’s interests and how to create incentives for cooperation. All actors should work on an Eastern Mediterranean “gas plus” vision for the region. The EU and/or the USA could potentially facilitate the education process to create a common vision. No solution should leave anyone out by creating a “mini-OPEC”, while everybody should get a piece of the pie, with the aim of achieving peace.

The Q & A session covered a wide range of issues: 

  • EU’s shift from democratic politics to geopolitics for its discussions with Turkey: this was seen as a reflection of an era where countries became more competitive rather than collaborative, and of the EU not in reality considering Turkey as a true accession candidate. Considering President Erdoğan’s authoritarian regime in Turkey, it would not be realistic to expect much change, and thus the EU unfortunately gave priority to its perceived interests, rather than democracy and human rights.
  • The sustainability of the militarisation of Turkish foreign policy by the use of hard power: a full understanding of this angle of the Turkish position needed to look beyond foreign policy outcomes to domestic politics. From that perspective, the issue of the affordability of relying on hard power, even military power, for foreign policy was not about pure economic, or even foreign policy sustainability, but what this foreign policy did in terms of helping to consolidate power at home. If it produced adverse impacts in terms of domestic power consolidation, this would be the main barrier to the reliance on hard power for Turkish foreign policy.
  • Considering that the status quo is better for Greek Cypriots, why Cypriots from both sides would come to an agreement: deliberate actions taken by Turkey had led to the status quo becoming less and less comfortable both politically and financially for the Greek Cypriots, who were unable to exploit the gas. While pretending that this was about low gas prices, everyone understood that it would not be possible, unless the Cyprus problem was fixed. The partial opening of Varosha had been politically costly for the Greek Cypriot leaders. Moreover, Cyprus was also losing its political capital in the EU. The economic benefits of a Cyprus solution remained far greater than any benefit from the status quo.
  • Whether natural gas would be irrelevant for the Eastern Mediterranean in 5-10 years: the window for exploitation of natural gas was seen as the next three decades, after which renewables would become the main source of energy. The parties in the Eastern Mediterranean did not have much time to decide on exploitation, since energy companies would normally demand 25 to 30 years operations in the area. Thus, if they could not reach rapid agreement, the companies would not be willing to invest in deep offshore projects, so that time did not favour regional producers and Eastern Mediterranean countries. Furthermore, the potential of natural gas in the Eastern Mediterranean was limited, as total capacity for 30 years is less than Russian natural gas production for 1 year. Finally, without an increase in the market price of LNG from the current level of about $2.00 per MMBtu to $7.00, deep drilling activities for gas in the Eastern Mediterranean would not be profitable.
  • The real basis for the dispute and whether it was a manufactured excuse: from Turkey’s point of view, the current dispute had very little to do with the potential size and impact of hydrocarbon resources, but rather with the issue of national sovereignty, so that concerns about the natural gas market, however valid, had little effect on current Turkish thinking. It was however suggested that, since Turkey’s policy was primarily based the consolidation of its domestic position, decreasing interest in gas could, over time, also affect the Turkish government’s current interest in gaining domestic support.
  • Whether there was any way to contain Turkey's military power-based assertiveness without speaking to Turkey's democratic deficit or human rights problem: the EU had at one time been able to exercise leverage on Turkey, with positive outcomes for both sides, as Turkey had genuinely believed that it could become a member State despite the Cyprus problem. However, the relationship between the EU and Turkey had changed and Turkey no longer actively sought to become a member State, with consequent loss of EU leverage in the absence of the credibility and positive dynamic implied by the accession process. The EU’s inability to develop a complementary or alternative framework that could still provide for some momentum and leverage meant that the power relationship had become asymmetric - to Turkey’s advantage - with the refugee deal. This made it impossible for the EU to talk about Turkey’s democracy or human rights problems. The EU’s lack of diplomatic ingenuity, enthusiasm and creativity could also be seen by looking at the visa liberalization and customs union discussion with Turkey. At the same time, it was not clear whether Turkey had helped the EU to develop an alternative and positive agenda, given the various contestations about developments since August.
  • Whether there was any role for a post-Brexit United Kingdom in this dispute: while the UK was not currently very active in the region, it would no doubt be ready to take action, should things heat up over Cyprus. Even though Boris Johnson might not be as active as Emmanuel Macron, the UK would engage at the working level on the Cyprus problem, but its involvement in other countries in the region would remain low. It was also suggested that the UK’s involvement in the Cyprus problem might serve as a model, as the two sides might find common denominators for the EU’s future relations with the UK as well as with Turkey.
  • Whether there was any connection between the conflict in Nagorno-Karabakh and the Eastern Mediterranean: through its involvement in the Nagorno-Karabakh conflict, the Turkish government sought to strengthen its domestic position, by presenting itself as a more assertive and influential player, a country that matters and one that the international community needs to deal with on regional issues. This was the only connection between the two issues.
  • Germany’s position over the crisis and whether it would maintain its opposition to possible EU sanctions against Turkey: the issue of migration remained a priority for Germany, which was working with other member States not so much to block sanctions against Turkey, but rather to prevent other Member States bringing this issue on the table, particularly since the example of sanctions imposed on Russia after the illegal annexation of Crimea showed that they might not always be a solution. It was also suggested that the EU was in a relatively weak position today vis-à-vis Turkey because there was no agreement on the type of sanctions that would make an impact on Turkey’s behaviour. The only realistic set of sanctions would most probably be superficial, provoking Turkey without having the desired impact on its behaviour. An EU proposal to Turkey of a significant package such as visa liberalization might impact Turkish behaviour, but it had not been forthcoming so far.
Mehmet Karli (Academic Visitor with SEESOX)

No comments:

Post a Comment

Note: only a member of this blog may post a comment.