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June 11, 2020

Europe needs to re-engage in Libya

General Khalifa Haftar's failure to capture Tripoli and western Libya has huge political ramifications. It raises uncomfortable questions for the EU, a bystander with little influence. Wolfram Lacher offers an excellent analysis of what is at stake in Libya and what role Europe can still play. He calls on Europe to seek a solution that unifies Libya and curbs Russia's influence. European countries need to re-engage.

Russia was behind Haftar's success over the last years. Backed by military and financial support from Russia, as well as Egypt and the UAE, Haftar conquered several oil-rich regions and then threatened to take over Tripoli. Now Haftar's takeover has stalled. Financial and military support is being withheld or withdrawn. His opponent, the Tripoli-based government of national accord (GNA), has only Turkey for military and financial support. The more regions GNA wins back, the more Turkey emerges as the influential power in Libya.

The crucial battle at the moment is in the central Libyan region of Sirte, where GNA and Turkey aim to get the oil-rich parts back from Haftar. Russia may have pulled back its mercenaries in western Libya, but Russian mercenaries and fighter aircraft still bolster Haftar's power in Sirte. Turkish warships, drones and other assets support the government's forces. Turkey and Russia would not go for open confrontation. Instead they may agree to freeze the conflict, but this does not mean that fighting between the two warring factions will stop. Nor will the two countries have an interest in a political solution for the country as a whole.

Europe has been messing about. Italy had leverage in Libya, a former colony, but missed the opportunity to lead. France backed Haftar politically, but only recently teamed up with Greece, Cyprus and Egypt to support him. The German attempt earlier this year to facilitate peace talks backfired. A German ambassador just got hammered on Twitter for trying to mediate a diplomatic solution. This is not the time for soft talk, as the conflict of loyalties and broken promises breaks into the open. 

Still, Europe should not underestimate the importance of what is happening in Libya, and it should seek to re-enter a game that will reshape the future of Libya and the geopolitical balance. Larcher writes that Russia's military presence is a far bigger menace to Europe than Turkey's intervention. For Europe to address this with a unified voice, France would have to give up on Haftar. The same goes for Greece and Cyprus, which will have to be persuaded that, by curbing Russian influence, Turkey's presence will be cut too. 

Europe has no military role for this conflict. The EU' mission Irini did little to stop Turkey's arm shipments towards Libya, though it could still be used as a way to stop illegal oil trade that would help Haftar to survive. Western countries may use sanctions and their diplomatic powers to push for a unified solution in Libya. 

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June 11, 2020

Who should succeed Centeno?

We don't usually give job endorsements, and we will not do so in the case of the succession of Mário Centeno, who is quitting as Portugal's finance minister now and as eurogroup head next month. As we reported yesterday, there is no shortage of finance ministers who might take over. Olaf Scholz said mysteriously that he already had a candidate in mind, without telling us whom.

The eurogroup is in a bind. It has been struggling to set up a largely-symbolic eurozone budget without making headway. The EU-wide recovery fund was a Franco-German bilateral concoction, with added mojo from the European Commission. The final decision will rest with EU leaders themselves. Scholz matters more in terms of his influence on Angela Merkel than as a member of the eurogroup.

The advocate-general of the CJEU wrote recently that the eurogroup may be formally recognised in the Lisbon Treaty, but it is a political construction and not a European institution. As advocates of further economic integration at eurozone level, we would like it to be a political institution, but realpolitik has intruded. The appointment of its next president could either reinforce the group's existing decline, or bring about change. This is not just about who gets the job, or who is the most qualified candidate. It is about how the eurogroup should be anchored into the broader decision-making mechanisms of the monetary union. 

Andrew Duff has made an intriguing proposal to that effect: let a Commissioner do the job. In this case, Paolo Gentiloni, the economic affairs commissioner. This is not so much a personal endorsement as a proposal for deep institutional reform. There is no rule that says the eurogroup president has to be a finance minister. Duff notes that protocol no. 14 of the Lisbon Treaty does not prohibit the election of a Commissioner as eurogroup chair. They can appoint whomever they like. 

We note parallels between this suggestion and the role of the High Representative for foreign and security policy, who also straddles the Commission and the Council. At a time when the Commission will be in charge of administering a recovery fund, such a shared role could give the eurogroup a new sense of purpose.

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