EUROPE, EMERGING POWERS AND A NEW GLOBAL ORDER?

Three views of international relations: World as International System: interaction based on relations of power > non-hegemonic unipolarity? World as International Society: multilateral legal order & shared norms > denser but uneven Governance and the changing role of the state: fragmentation and integration > non-state based economic governance Material capabilities International order Ideas Institutions

Emerging powers: BRICs? From economic to political globalisation? New ‘global grand bargain’ (Howorth)? Centres of gravity are changing e.g. Chinese economic growth; BRICs buying European debt; etc. BRICs: the spectacular journey of a concept (4 emerging economies will match GNP of 6 leading industrial states in 4 decades) From Goldman Sachs (4 emerging economies would match GNP of 6 leading industrial states in 4 decades) Over Academia To Politics: BRICs consultation Aheap of BRICs is not a house: only united in neo-revisionism G20 IMF BRICs consultation? Shanghai Cooperation Organisation?

Oil prices 1993: 17 USD 1998: 13 USD 2000: 28 USD 2005: 54 USD 2008: 97 USD 2009: 61 USD

& Russia in perspective (2011) (SIPRI) Military expenditure by the EU member states & Russia in perspective (2011) (SIPRI) Country Military expenditure in bln USD World share (%) USA 698 43 EU-27 combined 285 18 UK 69.6 3.7 China 119 7.3 France 59.3 3.6 Germany 45.2 2.8 Russia 58.7 Italy 37 2.3

World nuclear forces 2012 (SIPRI) Country Deployed warheads Other Total Inventory USA 2 150 5 850 ~8 000 Russia 1 800 8 200 10 000 UK 160 65 225 France 290 10 ~300 China . . 200 ~240 India 80–100 Pakistan 90–110 Israel ~80 North Korea ? ~4 400 ~14 600 ~19 000

GDP, share of world total Evolution of GDP, 1992 -2012 (in Purchasing Power Parity) (IMF) GDP per capita, 1992 GDP per capita 2012 GDP, share of world total EU 16,000 USD 32,000 USD 26% 19% USA 24,700 USD 49,800 USD 23% China 1,000 USD 9,000 USD 4% 15% Russia 7,900 USD 17,700 USD 3% India 959 USD 3,851 USD 6% Brazil 5,500 USD 12,000 USD 2.85%

The EU’s share in world trade and FDI, compared to the USA and China (%) (figures of 2010 for trade, 2009 for FDI) (European Commission) Share of global EU USA China Export of goods 15.1 10.8 13.3 Import of goods 16.4 16.2 11.5 Export of services 24.9 18.6 6.1 Import of services 22.1 13.4 7.2 FDI inward stocks 27.5 22.0 3.3 FDI outward stocks 34.6 28.2 1.5

The rise of PR China Since 1978 (open doors): economy x4   Since 1978 (open doors): economy x4 15% of world GDP 2nd military spender Growing self-confidence : China evolved from developing country ‘par excellence’ to development model => Growing will to protect interests through foreign policy, but: Strong emphasis on economic and monetary stability International stability Multilateralism over power politics?

Sustainability of China model? Gap between production and domestic consumption > highly dependent on trade Real estate bubble Corruption Legitimacy of party depends on economic growth Social stability? Gap city-countryside Geopolitical issues? ‘Beijing consensus’ Incremental Reform Innovation and Experimentation Export Led Growth State Capitalism Authoritarianism

EU-China 2nd largest economic cooperation: trade from 4 bln EUR in 1978 to 395 bln EUR in 2010 EU is 1st trading partner for China / China is 2nd trading partner for EU Images have evolved: China: from developing country, communist, isolated to global economic power, fierce competitor, unfair player (intellectual property rights), reluctant power < old division of tasks has ended: EU and China increasingly compete in similar markets EU and China have diverging policies for certain regions (Africa)

EU-Russia: energy dependence? Introduction: some ‘classic’ data… Russia has biggest gas reserves in the world Russia is biggest oil producer in the world Russia supplies: 36 % of EU gas imports (2009) 31 % of EU oil imports (2009) 30 % of EU coal imports (2009) * according to most recent figures of DG Energy Russian state revenues: 1 bln USD / 1 USD price rise per barrel

Dependence in the market of natural gas How to measure dependence? 1990 2000 2008 Russian share in EU gas imports 55 % 40 % 31 % Russian share in EU gas consumption 25 % Russian share in EU primary energy consumption 6 % 6.3 % 6.8 %

Typology of dependency Sensitivity Vulnerability Demand Demand sensitivity Demand vulnerability Supply Supply sensitivity Supply vulnerability

The EU’s supply dependence EU imports 31% of gas from Russia (average per member state: from 24% to 47 %) Dependence on Russian gas is distributed highly unevenly over EU states: Complete import dependence: Bulgaria, Slovakia, Baltic states, Finland No import dependence: Denmark, Ireland, Portugal, Spain, Sweden, UK In between: Poland (89%), Greece (53%), Germany (37%) uneven distribution over EU member states core of EU dependence: EU fails to speak with one voice

Russia’s demand dependence 70% of Russian gas export goes to EU Russian economy strongly dependent on energy export: Up to 2/5 of economic growth due to rising energy prices For 1 USD price increase per barrel of oil, Russia’s state income increases by 1 bln USD Russia’s energy strategy: Diversifying energy export markets (debt for equity deals) Securing stable demand

http://www.iea.org/gtf/index.asp

Conclusion Four conditions for Russia to use gas as political weapon: Supply vulnerability of EU Absence of Russian demand dependency Dominance of energy over other means of power Clear link between energy and political objective Future? Increasing diversification Russia’s investment problem Energy markets changing rapidly: Renewable energy Shale gas Unconventional oil Biomass