21 October 2014

The Role of Nuclear Energy in Pakistan's Energy Crisis and its Strategic Implications - Part 1 of 2

Ramya P. S., Junior Research Fellow, International Strategic and Security Studies Programme, National Institute of Advanced Studies (NIAS), Bangalore.

The burning issue under which Nawaz Sharif ran his election campaign last year was Pakistan’s economic debt and its acute energy shortage. The energy crisis gripping the nation has not only resulted in long hours of power shortages and load shedding but has adversely impacted the economy with commercial sectors and industries facing the brunt of the energy crunch. The fertilizer industry for instance has faced setbacks due to the irregularity in the supply of gas, leading to imports of fertilizer when in reality Pakistan has the capacity to produce the same.[i]

The crisis has caused a major setback to the economy with concerns being raised due to the increase of the circular debt. Significantly, debt is being incurred as a result of theft and power losses. The circular debt has reached over Rs.300 billion and several transformers such as in Lahore have defaulted adding to the Government’s woes.[ii]

However, this internal crisis of Pakistan is taking a significant strategic turn. In August, it was reported that China may help Pakistan to operationalise a 1 GW nuclear power reactor at Karachi.[iii] This raises concerns in India because the nuclear cooperation between China and Pakistan has been strengthening with the addition of reactors to both the Chashma and Karachi nuclear plants. Therefore, the questions to be asked are: how far is Pakistan going to promote its civilian nuclear industry in the light of an energy crisis and more significantly, how far would such a policy impact the regional security dynamics?

Energy Shortage and Nawaz Sharif’s Policy

Owing to the circular debt and intensive load shedding Pakistan is now placed in a precarious situation on the energy front. Pakistan is highly dependent on thermal power which contributes to around 67 per cent of electricity generation. It gets electricity from hydel (30 per cent) and around 3 per cent from nuclear power.[iv] High dependence on thermal power has led to an increase in prices and made it dependent on international oil prices, which are prone to volatile price fluctuations.

Presently, the energy shortage has touched nearly 6,000 MW in April 2014 leading to load shedding for over 12 to 18 hours.[v] Fuel shortages, delays in subsidy payment by the Government and the lack of private players and investments have led to such a severe shortage. Although, Pakistan has hydropower potential (both tapped and untapped), which is cheaper than thermal power, it remains poor in power generation because of the capital intensive nature of constructing dams. Furthermore, poor policies have increased the shortage.

The policies implemented by successive governments in Pakistan have proved ineffective as they do not address the core concerns of enhancing efficiency of existing power generation units, a lack of institutional arrangements and implementation of policies without proper assessment has contributed to the existing shortage. For instance, the policy to shift from oil to natural gas without properly assessing the reserves of natural gas has led to increased reliance on oil for thermal power generation, increasing the prices per unit.

However, the new energy policy outlined by the Sharif Government has goals set across a three-year period and focuses on the principles of efficiency, competition and sustainability. It aims at reducing supply-demand gap to 0 from 4500-5000 MW per day by 2017, slashing the generation cost of each unit to 10c/ unit from 12c/unit by 2017, lowering distribution and transmission costs by 16 per cent etc.[vi] This policy like the energy policy of 1994 seeks to meet the goals by encouraging local and foreign investments. The need for investments in this sector is high and the Government has sought to reduce subsidies to increase foreign investment and decrease the likelihood of circular debt occurring again.

Nuclear Energy and Sino-Pakistan Nexus

In this scenario of energy shortages and heightened need to invigorate the economy of Pakistan, the Government has been looking to expand its options to generate power from different sectors. One option has been, to emphasise the civilian nuclear sector of Pakistan. This came to light with the Sharif Government signing an agreement with China to finance a nuclear power project in Karachi worth 9.59 billion dollars and is said to produce about 2,200 MW.[vii] More recently, the alleged operationalization of a 1 GW nuclear reactor is increasing India’s concerns. This deal is unique in many ways as such a reactor comes under the ambit of new technology and the growing cooperation between the two nations in this sector. Moreover, such a deal would have immense strategic ramifications because it has been reported that diversion of nuclear waste from such a large reactor for re-processing would be easier since the protocols followed for standard reactors are not applicable to the 1 GW reactor.[iii]

Cooperation between China and Pakistan in the nuclear sector has been deep, with the former being responsible for constructing the Chashma Nuclear Plant which consists of CHASNUPP 1 and 2. Moreover, the construction of a third plant CHASNUPP-3 began in 2011 and that of CHASNUPP-4 is set to begin soon. Significantly, for the first time China has agreed to export the new pressurised water reactor (PWR), ACP 1000. This has raised international concerns due to proliferation threats. Although, some analysts believe that Pakistan would refrain from diverting plutonium towards for it nuclear weapons programme as it would jeopardise its ongoing cooperation with China. Furthermore, Pakistan maintains separate military nuclear reactors at Khushab complex in Punjab which requires plutonium rather than the PWR being provided by China.[viii]  However, proliferation concerns persist because the spent fuel from Kushab is reprocessed at separation plants in Chashma and Nilore which remain outside the purview of IAEA safeguards.

These deals with China by the Pakistani Government are seen in the light of the Indo-US civil nuclear deal of 2005, following which Pakistan has sought a similar deal for itself without success. When news of these deals came to light concerns were raised regarding proliferation by the international community, owing to Pakistan’s previous track record on the matter. The US has debated the nature of this deal at the Nuclear Suppliers Group (NSG). Although, the Chashma plant comes under the IAEA safeguards Pakistan is not signatory to the Non-Proliferation Treaty (NPT) and the full-scope safeguards by the IAEA are not applicable to it. Therefore, according to the NSG guidelines members of the international community have maintained that China cannot transfer the technology to Pakistan. However, China sees the deal as a ‘grandfathered’ extension of the previous deals it signed with Pakistan prior to becoming a member of the NSG.

The financing by China of the nuclear power projects within Pakistan depicts how China is trying to develop and mature its nuclear sector with Pakistan being its loyal client. China is also involved heavily in supplying nuclear components to the US, Britain and also has struck nuclear deals with Australia and Canada, depicting the scope of China’s nuclear industry.[ix] Concerns regarding proliferation have become pronounced following the expansion of the Karachi plant (two more nuclear power plants) under the current Government. This has also led to fear among the domestic public as it may threaten their livelihood. West of Paradise Point where the reactors are to be constructed lays the village Abdul Rehman Goth, wherein the fishermen are being restricted from entering the water close to the construction site.[x]

Disclaimer: The views expressed in this article are personal.

[i]Shabbir H. Kazmi, “Pakistan’s Energy Crisis”, The Diplomat, August 31, 2013, http://thediplomat.com/2013/08/pakistans-energy-crisis/1/, (accessed on June 2, 2014).
[ii] Zafar Bhutta, “Power Crisis: Khawaja Asif Looks Heavenward”, The Tribune, July 15, 2014, http://tribune.com.pk/story/735805/power-crisis-khawaja-asif-looks-heavenward/, (accessed on July 15, 2014).
[iii] MadhavNalapat, “China Gifts Pak Mega Nuclear Power Plants”, The Sunday Guardian, August 2, 2014, http://www.sunday-guardian.com/news/china-gifts-pak-mega-nuclear-power-plants, (accessed on August 3, 2014).
[iv] Mirza Hamid Hasan, “An Overview of Pakistan’s Energy Sector: Policy Perspective”, in Solutions for Energy Crisis in Pakistan, (IPIR: Islamabad, 2013), http://ipripak.org/books/secp.pdf, (accessed on June 7, 2014).
[v] Ahmad Fraz Khan, “Power Shortage Leads to 12-18 hours of Loadshedding”, Dawn, April 11, 2014, http://www.dawn.com/news/1099086, (June 14, 2014).
[vi] “National Power Policy: 2013”, Government of Pakistan, 2013, http://www.ppib.gov.pk/National%20Power%20Policy%202013.pdf, (accessed on June 25, 2014).
[vii] Salman Masood and Chris Buckley, “Pakistan Breaks Ground on Nuclear Plant Project with China”, The New York Times, November 26, 2013, http://www.nytimes.com/2013/11/27/world/asia/pakistan-breaks-ground-on-nuclear-power-plant-project-with-china.html?_r=0, (accessed on June 18, 2014).
[viii] Mark Hibbs, “Power Loop: China Provides Nuclear Reactors to Pakistan”, Jane’s Intelligence Review, (IHS: USA, 2014), http://carnegieendowment.org/email/DC_Comms/img/JIR1401%20F3%20ChinaPak.pdf, (accessed on August 28, 2014).
[ix] Hasan Ehtisham, “China has Safe Grasp on Pakistan’s Civilian Nuclear Market”, The Global Times, February 25, 2014, http://www.globaltimes.cn/content/844615.shtml, (accessed on June 18, 2014).
[x] Shadi Khan Saif, “Fears Raised over Pakistan’s Nuclear Dreams”, Deutsche Welle, July 2, 2014, http://www.dw.de/fears-raised-over-pakistans-nuclear-dreams/a-17507182, (accessed on July 9, 2014).

Safety and Security Concerns Regarding Pakistan’s Nuclear Energy Policy

Safety concerns with regard to the expansion of the Chashma plant came to light soon after the Fukushima incident in Japan, especially in the light of supposed faulty design of the plant modelled after Qinshan I. Moreover, China over the years has improved the design of Qinshan I and approached other countries to construct new nuclear reactors within China rather than building more of the same type.[i] This has further raised concerns as to how safe the design of Chashma nuclear plant is in reality. The expansion of the civilian nuclear sector in Pakistan has made India uneasy especially taking into account the lack of safety associated with the Chashma plant which is geographically close to India’s Punjab. A nuclear disaster in this case would not only impact Pakistan but the impact on India would be equally dangerous.

Concerns in terms of the overall safety of the nuclear plants and a possible leakage from the Chashma plant as reported in the case of the KANUPP plant therefore still linger. Such a scenario could lead to groundwater contamination in Punjab, which forms the agricultural hub of Pakistan and could cause major problems for India’s neighbouring states. Moreover, many studies have shown that several districts within Punjab have highly contaminated ground water consisting of arsenic and fluoride in over 18 districts.[ii] Although this contamination is not related to any nuclear related leakage, the possibility of such a disaster exists. Such concerns are fuelled by the lack of data released by the PAEC on the geological and geophysical surveys around the Chashma site. In fact, certain reports suggest that the US NCR (National Regulatory Commission) guidelines have not been met during the construction of the plant in the case of an earthquake.[iii] Moreover, when the plant was constructed, China’s lack of experience in the field intensifies safety concerns.

The issue of security has become crucial especially with KANUPP facility which came into operation in 1972, outliving its shelf-life. The ageing plant was given a ten year extension and raised alarms when an emergency was declared following a radiation leak. In the 1990s as well, radioactive cooling water reportedly leaked but the accident was downplayed by the Pakistani Government. The Pakistan Atomic Energy Commission (PAEC) Chairperson Ansar Pervaiz maintained that the Karachi plant was safe in the case of a nuclear disaster and ‘can remain unaffected in every season’.[iv] He further cited the Chashma plant as an example to depict the safety of Pakistan’s nuclear plants. Also, a US study conducted in 2014 on worldwide security of nuclear material ranked Pakistan 22 out of 25 countries and stated it as ‘most improved’ country out of nine nuclear armed states at safeguarding nuclear materials.[v]

Although, the strategic nature of Sino-Pakistan cooperation on civilian nuclear power is stark, Pakistan for its part maintains that nuclear power is crucial to resolving its existing energy crisis. PAEC Chairperson pointed out that renewable energy sources were only ‘appetisers’[vi] to solve the energy shortage and increase the need for nuclear power. From 2000 to 2012 Pakistan’s nuclear sector saw an annual growth of 15.7 per cent on the grid installed capacity.[vii] The PAEC claims it seeks to augment the nuclear energy output to 8,800 MW by 2030 while, the current nuclear power output is only 750 MW of the total energy output. Therefore, nuclear power is being seen as a viable option to solving Pakistan’s existing energy crisis, although roadblocks exist in terms of funding, the lack of indigenously developed industry and imposition of external sanctions and embargoes.


Nuclear power is not the only solution to the steep energy shortage facing Pakistan. Alternatives in the form of hydropower, solar and wind exist. Pakistan reportedly has a hydropower potential of 100,000 MW. Significantly, in Punjab alone the current Chief Minister Shahbaz Sharif has launched several energy and welfare projects with Chinese assistance. Coal-based power projects are under construction in Sahiwal and Nadipur each set to produce about 660 MW and 100 MW respectively.[viii] The Dongfang Electric Corporation of China is involved in the construction of the Nandipur project. Furthermore, Pakistan’s first solar power plant, namely Quaid-e-Azam solar power project at Bahawalpur was inaugurated this year having about 400,000 solar panels.[ix] Interestingly, it is a joint venture between the state government of Punjab and China and is forecasted to produce about 1000 MW of electricity. Pakistan has also been considering the pipeline option seriously. The long talked about Iran-Pakistan pipeline and TAPI pipeline are also being looked into. Under the previous Zardari Government, Pakistan pushed for the pipeline with Iran ignoring the US pressure against such a deal.

The close cooperation between China and Pakistan depicts how the Sharif Government is seeking to resolve its energy problem through the strategic prism. The role of nuclear power in resolving Pakistan’s energy crisis remains debatable, but Pakistan is viewing it as a feasible option. The larger strategic role of the growing nuclear sector in Pakistan casts shadow over the viability of such an option, especially with growing concerns of the safety of such facilities. Although, the need for alternative forms of energy is crucial for Pakistan, its increasing civilian nuclear cooperation with China proves worrisome for India. The Chashma plant, which comes under only partial safeguards of the IAEA, is seen more as a case of proliferation under the existing control regimes of the NSG.

The expansion of the civilian nuclear sector as a solution has been advocated both by the previous Zardari Government when the KANUUP deal was discussed with China and became a reality under the present Sharif Government. This depicts how the nuclear option to solving energy crisis is accepted in Pakistan across the political spectrum. Therefore, with both KANUUP and CHASNUUP being funded by China, India’s fears taking into account the strategic nature of such cooperation between its neighbours would rise. The lack of international safeguards, debates regarding the feasibility of the reactor designs coupled with proliferation worries with regard to Pakistan’s civilian nuclear programme are not expected to abate in the foreseeable future.

Disclaimer: The views expressed in this article are personal.

[i] S. Chandrasekharan, “Chashma Nuclear Power Plant: CHASNUPP will Continue to be Accident Prone”, South Asia Analysis Group, no. 295, August 16, 2001, http://www.southasiaanalysis.org/paper295, (accessed on July 29, 2014).
[ii] M. IrshadRamay, Tameez Ahmad, Oleg V. Shipin, David Jezeph and A. Kadushkin, “Arsenic Contamination of Groundwater and its Mitigation in the Province of Punjab (Pakistan)”, World Health Organisation,http://www.who.int/household_water/resources/Ramay.pdf, (accessed on July 20, 2014).
[iii] Zia Mian and A.H. Nayyar, “Pakistan’s Chashma Nuclear Power Plant: A Preliminary Study of Some Safety Issues and Estimates of the Consequences of a Severe Accident”,Princeton Environmental Institute, no. 321, December 1999, https://www.princeton.edu/pei/energy/publications/reports/No.321.pdf, (accessed on July 20, 2014).
[iv] “Nuclear Safety: Radiation Leak from K-2, K-3 nuclear plants a far cry, explain experts”, The Tribune, February 17, 2014, http://tribune.com.pk/story/672625/nuclear-safety-radiation-leak-from-k-2-k-3-nuclear-plants-a-far-cry-explain-experts/, (accessed on June 7, 2014).
[v] Talha Ahmed, “2014 Report: Pakistan ‘most improved’ in nuclear security, India not so”, The Tribune, January 11, 2014, http://tribune.com.pk/story/657377/2014-report-pakistan-most-improved-in-nuclear-security-beats-india/, (accessed June 2, 2014).
[vi] “Nuclear Safety: Radiation Leak from K-2, K-3 nuclear plants a far cry, explain experts”, The Tribune.
[vii] Syed Shaukat and AfiaNoureen, “Nuclear Power Generation: Challenges and Prospects”, in Solutions for Energy Crisis in Pakistan, (IPIR: Islamabad, 2013), http://ipripak.org/books/secp.pdf, (accessed on June 7, 2014).
[viii] Imaduddin, “Shahbaz Sharif for Early Completion of Energy and Welfare Projects”, Business Recorder, May 25, 2014, http://www.brecorder.com/pakistan/politics-a-policy/174304-shahbaz-sharif-for-early-completion-of-energy-welfare-projects.html, (accessed on June 8, 2014).
[ix] Meena Menon, “Pakistan’s First Solar Power Project Launched”, The Hindu, May 9, 2014, http://www.thehindu.com/news/international/south-asia/pakistans-first-solar-power-project-launched/article5993633.ece, (accessed on July 9, 2014).

Can Merkel Deal With Putin’s Myths?

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When German Chancellor Angela Merkel was scheduled to meet Vladimir Putin in Milan on October 16, the Russian president didn’t bother to turn up on time. Instead, he lingered on a state visit to Serbia, where he was given full military honors and lavished with praise by his hosts.
At one stage during the afternoon, Merkel postponed her talks with Putin. When he finally turned up late in the evening, Merkel reconsidered. She and Putin then spent two and a half hours locked in difficult discussions.
Merkel is the one Western leader who has been talking constantly to Putin ever since the Ukraine crisis began in February. She is also the one leader who knows what she is up against when dealing with the Russian head of state. Several months ago, after one of her discussions with Putin, she said he was living in another world.
Dempsey is a nonresident senior associate at Carnegie Europe and editor in chief of <em>Strategic Europe</em>.
Judy Dempsey
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In fact, it’s more than that: Putin has constructed a number of myths about Russia and Ukraine. Despite Merkel’s efforts, Russia remains shrouded in four particular illusions that make it increasingly difficult to see how relations with the West can be improved.
The first myth is Putin’s consistent claim that Russia has not been supporting in any way the pro-Russian rebels who have taken over parts of eastern Ukraine. That assertion is hard to square with Putin taking center stage during talks on September 5 in Minsk, where he and his Ukrainian counterpart, Petro Poroshenko, agreed to a ceasefire between the rebels and Ukrainian government forces. And it is even harder to square with evidence of Russian soldiers working with the rebels and of Russian combatants having been killed in Ukraine.
Putin has used the presence of thousands of Russian troops along the border with Ukraine to intimidate the government in Kiev. Russia’s state-run media reported that the soldiers were on exercises. Days before the Milan meeting on October 16, Moscow announced that the troops would return to their barracks—just as it had announced the same thing before the September 4–5 NATO summit and before Putin’s June 24 visit to Vienna.
#Russia is shrouded in illusions that make it hard to see how relations with the West can improve.
A second myth is the Kremlin’s repeated denials that it uses energy as one of its main foreign policy instruments. The EU’s Eastern European members have seen through that claim for some time.
During his visit to Belgrade on October 16, Putin warned that Europe faced “major transit risks” to gas supplies from Russia if Ukraine siphoned off gas from transit pipelines. That threat certainly puts paid to any idea that Russia is a reliable supplier of energy to Europe, which depends on Russia for almost a third of its gas.
Putin also said Russia was prepared to reduce Ukraine’s gas debt by $1 billion to $4.5 billion by retroactively offering a lower gas price. Kiev would have to pay up front and not by credit. Since the country is strapped for cash, the EU is expected to step in.
This price offer shows the arbitrary way in which Russia prices its energy and uses such prices as political pressure. The more dependent a European country is on Russian gas, the more Moscow can threaten it. That is why Europe needs to wean itself off Russian energy as quickly as possible.
A third Russian myth is that EU and U.S. sanctions are not adversely affecting the Russian economy. The reality is different.
As the Financial Times reported on October 15, six of Russia’s biggest state-connected banks, which account for more than half of Russian banking assets, have been cut off from Western financing. The newspaper argued that if sanctions remained in place over the long term, “the situation could grow more acute, creating a tightening noose on banks – and Russia’s economy.”
If Putin can so easily dismiss the impact of Western sanctions, he cannot ignore the impact of falling oil prices. According to the U.S. Energy Information Administration (EIA), a statistical agency, Russia needs an average price of crude oil of between $110 and $115 a barrel to maintain a balanced budget. In early October, the price slipped to below $90 a barrel and is expected to remain at that level for some time, according to the EIA.
The impact of falling oil prices on the Russian economy should not be underestimated. The trend shows how Russia needs Western markets more than ever for its energy exports.
If #Putin is so self-assured, why is he so afraid of the past and the present?
The fourth myth is Putin’s aura of self-confidence, boosted by opinion polls that jumped when he annexed the Crimean peninsula in March. If he really is so self-assured, why is he so afraid of the past and the present?
Putin’s fear of the past was visible earlier in October, when Russia’s justice ministry called for the closure of Memorial, one of the country’s most important human rights associations. Memorial was established in 1989 by the late dissident and Nobel Peace Prize laureate Andrei Sakharov. The organization’s aim was to uncover the repression of Russia’s Communist and Stalinist eras. Putin, however, has made no attempt to address the country’s ignominious past, the suffering of millions who were sent to the gulags, and the torture and executions meted out to so many.
As for the present, the Kremlin is now going after Lyudmila Bogatenkova. This leading human rights activist was working with the Soldiers’ Mothers of Saint Petersburg, a nongovernmental organization that defends the rights of soldiers. Bogatenkova was investigating the deaths and disappearances of Russian soldiers in Ukraine. By doing so, she was also proving that Russia was directly involved in Ukraine.
Vladimir Putin’s Russia has become a country wrapped in myths. Even Angela Merkel’s persistent attempts to keep talking to Moscow will not be enough to dispel those illusions.

Four Reasons Why European Foreign Policy Sleeps

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Colossal external problems are coming Europe’s way. And yet, there are few signs that the 28 nations that form the European Union will start acting on their shared threats and interests in a more unified, forceful, and muscular way anytime soon.
Some blame austerity for this inaction. Others say the EU was never made to do foreign policy. And yet others maintain that Europeans are just naive and immature surrender monkeys who cling to wishful thinking and simplistic ideas about how the world works.
None of that is true. The underlying reasons why European foreign policy sleeps go much deeper. Four fundamental factors are at play: identities, institutions, external neglect, and internal disinterest.


First, Europeans feel that the threat to their national identities is currently greater than the threat to their physical security. Take a good look at what people really discuss outside the op-ed pages of the larger newspapers, and the chances are you will get entangled in debates on illegal immigration, Islamization, crimes committed by foreigners, domestic culture changing beyond recognition, taxpayers’ money being wasted on people far away, and so on.
These topics dominate the political discourse in the EU’s three biggest countries—Germany, France, and Britain—and in a large number of other nations as well, including Austria, the Netherlands, and Hungary.
Identity-driven debates tend to affect citizens much more directly and emotionally than seemingly abstract issues such as Russia’s menace to the European political order, the so-called Islamic State’s threat to stability in the Middle East, China’s challenge to the global balance of power, or Iran’s quest for nuclear arms.
The security threats that analysts wring their hands over are mostly of secondary importance for ordinary folks. And if ordinary folks are not greatly concerned, politicians prefer not to open a can of worms. This is especially true if that can of worms means building a cohesive pan-European response to a challenge, or weighing up the prospect of increased military spending.


The second reason for Europe’s torpor is that there is not a single EU institution that could credibly formulate a shared European interest. Pro-integrationists tend to believe that either the European Commission or the European Parliament is capable of such a task. But neither of them is.
There is not a single #EU institution that could credibly formulate a shared European interest.
Parts of the commission come closest to the ideal of being the advocate of a genuinely common EU interest. But these are the branches of the EU’s executive that defend joint interests on questions of trade or the single market, neither of which really goes to the heart of classical foreign policy.
The arm of the commission that did once try to promote a common EU line on external issues has been transformed into the European External Action Service. But so far, this body has been too powerless, too heavily controlled by the member states, and too badly managed to become the vanguard of EU foreign policy leadership.
As for the European Parliament, it does not represent the unified political will of a European body politic—despite its desperate claims to do just that. The parliament’s positions often represent little more than the worldview of its members, a specific caste of Europoliticians awkwardly positioned between their narrow national mandates, European loftiness, and structural unaccountability.
In theory, the European Parliament’s strong focus on values and principles is a good thing. But as this emphasis is not coupled with the more realist world of executive decisionmaking, it frequently ends up as mere moral grandstanding.
Perhaps unsurprisingly, the institution most prone to hammering out something that resembles a shared EU interest is the Council of the European Union. Representing the member-state governments, the council has the strongest democratic mandate of all the Brussels-based institutions. But the body’s members also jealously guard national prerogatives on foreign policy and therefore often fail to come up with compromises that are substantial enough to survive first contact with the real world.
In the absence of an institution that could credibly and meaningfully formulate a pan-European foreign policy, the EU’s action abroad is bound to remain incohesive, divided, weak, and, with rare exceptions, generally unimpressive.


The third limitation on EU external action is the shifting role of the United States. Washington cares less about Europe than it used to and therefore presses Europe less to get its act together.
Behind EU unity on #Iran lies a secret: massive U.S. pressure on the Europeans.
Arguably the EU’s biggest foreign policy achievement of the past five years is its unprecedented and lasting unity on sanctions against Iran in light of the country’s nuclear program. But behind this unity lies a dirty little secret: massive U.S. pressure on the Europeans, including regulatory pressure by U.S. government agencies on European companies that do business with Tehran.
It is a generally unspoken truth that EU foreign policy activity often relies on U.S. leadership. This is true in the Balkans, in Afghanistan, on most matters of security and defense, and, more recently, in the fight against the Islamic State. America has been the pusher, the limiter, the conceptualizer, and the equipper of EU foreign policy. It has also been the provider of trust to Europeans, guaranteeing that no EU country would become too dominant in the continent’s external affairs, thereby defusing potential internal tensions from the outset.
But these days, that kind of U.S. leadership is rare and often halfhearted, further diminishing the EU’s already low level of foreign policy energy.


The fourth factor behind the EU’s lethargy is the fact that the union’s three leading nations all withhold proper investment in EU foreign policy.
#France pretends to show an interest in EU foreign policy but is hampered by national pride.
Britain is interested in parts of the EU’s external affairs but lacks the attachment to European integration that could make the country a leader. France pretends to show an interest but is hampered by unrealistic bouts of national pride and dramatically reduced credibility and resources. Germany, in theory, has the resources but suffers from a combination of traditional passivity, newly discovered unilateral appetites, and a military shyness that greatly reduces its influence.
The EU suffers from rampant identity issues, weak institutions, a largely absent external shepherd, and three uncommitted internal leaders. When these four shortcomings are combined, a formidable mix of root causes for Europe’s foreign policy sclerosis emerges. It is no surprise that external players who are only too keen to exploit Western weakness think that Europe is a spent force.

The EU and the Israeli-Palestinian Conflict: Action Without a Script

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The EU’s understandable priority in Gaza is to contain further violence. But the union also needs a deeper policy that addresses the roots of the Israeli-Palestinian conflict.
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    European Union policy toward the Israel-Palestinian conflict is in an interregnum. The current focus is on preserving the ceasefire negotiated after the Hamas-Israel conflagration in August 2014 and on providing reconstruction aid for the Gaza Strip in the wake of the war. A major international conference held in Cairo on October 12 centered on reconstruction.
    EU policy toward the Israel-Palestinian conflict is in an interregnum.
    But neither of these tasks addresses the roots of the conflict’s intensification. It is widely presumed that there is little chance of peace talks between the Israelis and the Palestinians resuming in the short term. Gaza’s isolation—in the form of restrictions on the movement of goods and people across the territory’s borders—has not been lifted to any meaningful extent. This reinforces the underlying drivers of violent resistance.
    This situation gives rise to a curious juxtaposition of urgency and resignation. European diplomats concur that the conflict may stand at a watershed moment that requires a fundamental rethink. Yet they also doubt that any qualitatively different strategy is feasible in the near term. This leaves the still-impressive breadth of European activity on the ground devoid of a clear, guiding script.
    While the focus on preserving the ceasefire is important and desirable, it risks diverting attention away from two issues that will determine the deeper efficacy of future EU strategy. The first is the fundamental shape of the EU’s conflict resolution efforts. The second is the question of how to improve on-the-ground European initiatives aimed at redressing structural governance deficiencies.


    For more than a decade, EU policy has been predicated on a well-established logic: while direct European influence over peace talks has been relatively modest, Europeans have been a primary factor in reshaping Palestinian institutions. The EU and its member states together have long been by far the largest donors to the Palestinian Authority (PA), the governing body based in the West Bank and controlled by Fatah. They have undertaken hundreds of projects worth billions of euros aimed at creating strong, capable, united, and democratic protostate institutions. The occupied Palestinian territories have been the highest per capita aid recipient for most European donors over the last decade.
    The occupied Palestinian territories have been the highest per capita aid recipient for most European donors.
    This agenda has partly succeeded. In 2011, the UN declared Palestinian institutions ready for statehood. The EU can be proud of the lead role it has played in improving the capacity of Palestinian governance structures.
    However, this institution-building focus made most sense when it was nested within peace talks that appeared to have at least some life left in them. State building was a means to an end: an effort to improve Palestinians’ preparedness for statehood. This process included help to address Israeli security concerns too—an often-controversial question among many Palestinians.
    But with peace talks now moribund and the whole future of negotiations in doubt, where does the EU approach stand?
    European donors continue to implement a familiar agenda of institution-building initiatives almost by default, while acknowledging that this core approach has run out of steam. There is only so much institutional capacity building that the EU can undertake. Building state-like institutions that Israel does not allow to function fully as state bodies has only so much value.
    The state-building project now stands at an impasse, neither smoothly advancing nor leading to the next stage of conflict resolution. European donors still feel that they can add the most value in the area of state building. They have sunk so much money into these efforts that abandoning the approach might see years of work undone. Yet the payback from billions of euros of support is disappointing. The Palestinian territories today are politically fractured, authoritarian, and dysfunctional.
    Diplomats in East Jerusalem and Ramallah recognize the new contingency in this central plank of European strategy: if peace talks are not reassembled, the EU will need fundamentally to rethink its approach. Yet for now, much institution building continues as if little had changed in the wider strategic and political context. Something has to give.


    Diplomats on the ground lament that while initiatives aimed at strengthening quasigovernmental capacity proceed, the supposed accompanying focus on legitimacy and accountability now struggles to retain traction. In the last three years, the PA’s governance standards have deteriorated.
    The reform momentum has diminished since the resignation of the erstwhile prime minister, Salam Fayyad, in April 2013. The EU relied heavily on him in its support programs and is now struggling to adjust. The Palestinian judiciary still lacks independence. The Palestinian Legislative Council has not been convened since 2007, meaning there has been no parliamentary oversight of the executive.
    The PA is not sustainable in this form. It has become simultaneously more autocratic and weaker. As its authority has crumbled, some Palestinian voices have called for it to be wound up. This would be a tragic indictment of years of European support efforts.
    European donor representatives in Jerusalem and Ramallah acknowledge the need to encourage more accountable and responsive governance. The EU’s policing mission in the Palestinian territories has recently extended into a whole new strand of rule-of-law work. European embassies and the EU delegation in East Jerusalem have become more critical of the PA’s abuse of due process in the rounding up of Hamas members.
    Meanwhile, donors’ judicial-reform programs have begun to focus more on access to justice. The UK, the Netherlands, and Sweden individually as well as the EU as a whole are pumping funds into a large new UNDP initiative on this issue. European embassies have made a push to limit the PA’s use of decrees to circumvent opposition to even fairly mundane legislation.
    Yet, the EU and European governments remain ambivalent over other aspects of political reform. Europeans recognize that long-delayed elections should eventually be held but fear the likelihood that Hamas, which the EU lists as a terrorist organization, would emerge victorious if a vote were called. The EU preference is to support the proposed unity government between Fatah and Hamas, which after many false starts may finally be moving forward thanks to a breakthrough in September 2014.
    The EU may criticize the PA’s bad governance, but the union has been light in its use of conditionality, fearful of the effect of turning off the funding tap for Palestine’s nominal moderates. Palestinian NGOs berate the EU for this and lament an increasing tendency since the attacks on Gaza to overlook PA abuses. Civil society organizations in Ramallah criticize the EU for having done little to support broad-based social movements, whose pro-democracy activism in 2011–2012 was dampened and swallowed up by Fatah-Hamas rivalry and the politics of occupation.


    Understandably, in the wake of the summer’s war, European governments have paid more attention to the situation in Gaza than to the West Bank. This shift is overdue because the EU’s overwhelming focus on the West Bank is imbalanced and has not furthered the cause of peace. But the new emphasis raises some difficult policy dilemmas, the European response to which has so far not been adequately clarified. Simply extending to Gaza an approach that is treading water in the West Bank is unlikely to lead to any dramatic breakthrough.
    If the EU helps secure the truce, Israel will in turn be more likely to acquiesce in lifting its blockade of Gaza.
    One of the main debates under way surrounds the kind of security role the EU might play to help shore up the ceasefire. The thinking is that if the EU helps secure the truce, Israel will in turn be more likely to acquiesce in lifting its blockade of Gaza.
    The EU is cautiously considering a revival of its long-dormant mission to monitor the Gaza-Egypt border crossing at Rafah. However, the precise form in which this operation should be redeployed remains a subject of sharp debate. Officials say that the mission is more likely to engage in general capacity building for border guards than in intrusive monitoring. EU representatives caution that a new operation will not be a panacea and is not an obviously beneficial focus for new EU efforts—to the extent that is now routinely suggested.
    Even before the summer, PA complaints were growing that the international community had pushed Palestinians to cooperate with Israel on security but that Israel had not reciprocated by loosening restrictions on movement across the West Bank. If anything, Israeli security incursions were increasing, causing more Palestinian unease. Europeans were contributing huge sums to building community police units that were then not allowed to function with any effectiveness.
    European officials in Jerusalem and Ramallah have spoken of a swing back to core security capacity building since the summer conflict. This is now seen as a more urgent imperative than qualitative reform in the delivery of Palestinian security to citizens.
    Likewise, according to insiders in Ramallah, the concern with reconstruction in Gaza is already leading donors to shift funds and personnel away from governance work in the West Bank. Governments are pressing for more of a focus on helping rebuild and develop Gaza. At the October 12 donor conference, EU member states pledged $568 million for Gazan reconstruction. But some officials on the ground are concerned that if too much funding is switched from the West Bank, the PA may collapse.
    It is positive that the EU has indicated a willingness to reengage in Gaza. Yet the international community needs to rethink its whole approach to the security sector. The EU in particular must strike a delicate balance. The danger is that security measures and efforts at disarming Hamas are seen in effect to be helping Israel carry out its policy goals, with little quid pro quo in terms of improving Gazans’ daily life or bringing statehood any nearer.


    This balancing act leads to an associated challenge related to support for the still very embryonic Palestinian unity government.
    Before the summer invasion of Gaza, the EU was committed to supporting Palestinian unity in the form of a national consensus government involving both Fatah and Hamas. In contrast to U.S. antipathy, the EU argued that inclusive Palestinian government would contribute to sustaining peace talks.
    Israel’s operation sought to scupper this unity deal. The summer bombings aborted what seemed to be a promising moment at which an ever more isolated Hamas was looking to come in from the cold.
    The EU’s central narrative is now one of helping the Palestinian Authority take control of Gaza.
    The EU still formally supports the principle of a reconciliation government, and its stated aim remains to reintegrate West Bank and Gazan ministerial and administrative structures. However, the union’s central narrative is now one of helping the PA take control of Gaza. Many in European ministries today talk of unity government almost as a means of marginalizing rather than including Hamas. If pursued in the wrong way, this approach could undermine rather than respect the principle of inclusive government—and it could sit uneasily with the democratically expressed will of the Palestinian population.
    On the ground, a number of donors have launched initiatives to assist the process of reintegration of Palestine’s two halves; the UNDP is now particularly active. The EU identifies these efforts as an area of new priority in its technical assistance. These reintegration initiatives are making some slow progress at a technical level in sectors such as health and education.
    Extending the projects to the political level will be far more problematic. Merging two different legal systems will be complicated. The unity deal was originally seen as a means of paving the way to elections and not primarily as a construct capable of overseeing effective day-to-day policymaking. The PA remains reluctant, arguing that it should be given complete control over Gaza if it is to avoid being blamed by Israel for any future return to violent resistance.
    The EU’s no-contact rule with Hamas is an even greater impediment now than it was before the Gaza conflict.
    In this context, the EU’s no-contact rule with Hamas is an even greater impediment now than it was before the Gaza conflict. The task of reintegrating West Bank and Gazan structures will be inordinately complicated, and it will be even more difficult for the EU usefully to help in this without even talking to Hamas officials. At a practical level, it is difficult to distinguish between those officials that are active Hamas members in a strict sense and those simply working in a Hamas administration.
    European policymakers have frequently argued that the summer’s conflict shows that Hamas cannot remain isolated and that the siege of Gaza is entirely counterproductive, whatever short-term victories Israel scores in degrading Hamas’s operational capabilities. Yet the EU appears unwilling to reconsider the no-contact rule—or to recognize that Hamas is far from being a monolithic body, with many connected officials engaged in practical issues of service delivery with little overt political agenda. The EU’s PEGASE funding mechanism that supports the PA will vet recipients of any new funding that flows into Gaza to ensure compatibility with European counterterrorism laws.
    Against the background of the PA’s hollowed legitimacy, the assumption that it can effectively regain control over Gaza looks like a questionable foundation upon which to base near-term policy. Hamas’s popularity has, if anything, increased after the conflict, and Palestinian President Mahmoud Abbas has been obliged to rally to the organization’s cause. Hamas is already ceding control politically and shifting its focus away from governing Gaza and back to resisting Israel. In light of all this, it seems perverse for the EU to move in the opposite direction of explicitly backing Fatah further to quash Hamas from the political scene.


    Many commentators criticized the EU for being too soft on Israel’s attacks on Gaza. Indeed, relations with the PA are now said to be prickly for this reason. Some EU member states have revoked licenses for arms sales to Israel, but no other measures have been contemplated.
    Prior to the summer conflict, relations between Israel and the EU had reached a low point. Israel’s ire was raised in 2013 by a series of EU guidelines that restricted Israeli entities’ access to European funds. These rules have begun to impede a range of sectoral cooperation and could assume wider legal significance in the future. The EU is now moving to ban the import of milk and poultry products from Israeli settlements. Israel berates the EU for funding a group of NGOs pressing for peace that hold to a partisan, anti-Israeli view of the conflict.
    Even though tensions run high, European positions toward Israel contain little tangible, critical substance. The EU put on hold measures on the labeling of settlement products (a long-discussed step to curtail the number of goods made in the settlements that benefit from trade preferences) in an effort to avoid cutting across U.S.-sponsored peace talks. Since the talks collapsed, the EU has declined to put this question back on the agenda. It remains unclear whether it will do so.
    The EU’s leverage over Israel appears to be close to zero.
    Yet despite the EU’s accommodating position, the union’s leverage over Israel appears to be close to zero. Israeli diplomats do not see the EU’s new offer of a special and privileged status agreement as particularly significant or as an attractive incentive to modify EU positions. Israel sees itself meriting a strategic partnership of the type the EU has negotiated with rising powers—instead of the same privileged status offered to the Palestinians.
    If the international community cannot convince Israel to reengage in meaningful negotiations, other options will increasingly come into view. In the now-defunct peace talks, the United States tried to negotiate a basic framework for tackling all topics by consent; this approach may now have reached the end of the road.
    Diplomats in Jerusalem recognize that it is now even more vital that the EU back up its financial support to the PA with high-level political influence. Several EU member states have adopted slightly less absolute opposition to the idea of recognizing a Palestinian state. This debate has been galvanized by the announcement that Sweden’s new center-left government is willing to recognize Palestine and by a nonbinding vote in the UK House of Commons on October 14 to endorse Palestinian statehood (even though this vote is unlikely to change the position of the current British government). The PA has announced it may seek to join the International Criminal Court as a means of bringing legal cases against Israeli soldiers.
    However, no detailed planning or creative thinking is evident on how the EU might lead the design of a new approach to peace, should the long-standing path to two states show no signs of further life. The position is one of wait and see—and hope, against the odds, that there is no unavoidable need to entirely revamp an approach that has failed for twenty years.
    The broader context has also changed in ways that raise questions marks over the existing international division of labor. It is clearer today that peace must be a wider effort than one led solely by the United States. Egypt’s role has become more influential in ways that may not augur well for peace. Egypt has now taken over as lead external monitor of the ceasefire—under a newly revived authoritarian regime committed to crushing Islamist parties through brutally repressive, nondemocratic means. This is hardly a balanced or sustainable recipe for peace in Palestine. Egypt has lost standing across the region due to its failure to support Hamas.
    The regional context is more fluid now than after previous Israeli attacks on Gaza, with a cacophony of calls for a fundamental redrawing of the region’s borders, well beyond Palestine. The rise of Islamist militancy has encouraged many governments around the world to share some, if unstated, sympathy for Israeli actions. Yet the same tide of opinion and instability in the wider region also makes Israel more vulnerable. The space for pacted, consensual routes forward may soon narrow.


    European governments and donors continue to be highly active on the ground in the occupied Palestinian territories. But they are akin to Pirandello’s proverbially directionless “characters in search of an author.”
    At a moment of such uncertainty, European funding helps safeguard at least a modicum of Palestinian institutional solidity. However, uncertainty now prevails over the core end to which EU initiatives are geared. Several elements of the European response to the summer’s conflict in Gaza are welcome. Others replicate in Gaza the shortcomings and imbalances that have beset EU efforts in the West Bank.
    While the immediate containment of violence is the understandable priority, the deeper imperative is more systematically and effectively to address the root drivers of conflict. If the EU is unable to make that switch in its policies, the situation is such that a fundamental rethink of how to approach the Israeli-Palestinian conflict will become harder to avoid.
    The EU should redouble its efforts to encourage a more united Palestinian political system.
    This means that the EU should move with caution in any new responsibilities it assumes in Gaza, especially those focused on security. The union should redouble its efforts to encourage a more united and less fecklessly nepotistic Palestinian political system. This must take precedence over simply backing one party to regain control over another party in Gaza. There is even stronger logic today in a more flexible position toward engaging with at least some Hamas-linked officials.
    While all this may help indirectly in laying more solid foundations for an eventual peace settlement, the EU must now invest more effort in high-level diplomatic backing for its aid initiatives. A wider and more systematic set of dialogues with regional powers could help explore new ways forward if there is no will to reconvene peace talks on the established parameters of the Oslo process.
    The Middle East may indeed be in an uncertain interregnum. But this does not mean that the EU cannot seek to anticipate possible ways forward.