Global defense spending is constantly growing. In 2019, it grew by four percent compared to 2018 - that is, showed the largest growth in almost a decade. But what is the reason for this? And what does this mean for the future?
For 56 years, over 500 of the most influential representatives of politics and economics have been meeting in Munich for three days to discuss current challenges in a semi-formal setting. But things are not so good in 2020. The widespread anxiety prevailing in the conference room, and the feeling that new centers of destructive influence are being formed, the presence of which the West - and especially Europe - is adjusting too slowly, could not be overlooked.
“Westlessness” - the key word of the conference in 2020 - is a widespread feeling of discomfort and anxiety due to growing insecurity in the long-term prospects of the West.
Many security policy dilemmas seem to be inextricably linked to what some call the fall of the Western project.
In addition, Western societies and governments seem to have lost a common understanding of what it generally means to be part of the West. Although perhaps this is a crucial strategic issue for transatlantic partners, it is not known whether the West will be able to devise a common strategy for a new era of great power competition.
Scenario No. 1: China
In Munich, one could well feel the fear that the existence of the West is at risk, as it is split and at the same time faces a challenge from China. Europe, including Britain, has long been in a kind of conflict with the United States and China.
Huawei has been featured in many debates in the context of national security, and not in a positive context. U.S. Secretary of Defense Mark Esper called Huawei the hallmark of the Chinese robbery economy and, along with Secretary of State Mike Pompeo, warned that Huawei’s access to 5G networks in Europe should not be seen as an elegant commercial solution, but as a fundamental threat to the Western world.
Is Huawei and 5G an example of China's strategy to destabilize other countries and dominate? This remains unclear, however, dependence on China can make digital systems in Europe and the United States vulnerable, as well as complicate communication with Western partners. Even NATO, the most successful alliance in history, can be undermined with this technology.
Scenario No. 2: Middle East
German Foreign Minister Heiko Maas said that the future of the Middle East is now determined not in Geneva and New York or the UN offices, but in Astana and Sochi, cities where Russia, Turkey and Iran meet. The reason is the White House’s decision not to play the role of a world policeman anymore. The US withdrawal left, as Maas said, a “geostrategic gap” filled by countries which values Europe does not share.
All this required Germany’s response to Emmanuel Macron’s call for strategic dialogue, especially in the defense field.
Because, despite the vast US presence at the Munich Conference - over 40 members of the Congress of both political camps arrived across the Atlantic to Bavaria - the message of the Americans was that governments in Europe should agree their positions on Iran, NATO defense spending and trade.
Cautionary words from Germany
At the opening of the 56th Munich Security Conference, German Federal President Frank-Walter Steinmeier said the current US government "denies the idea of the international community."
Steinmeier also criticized how Russia and China conduct their foreign policy. “Russia, not taking into account international law, not only annexed Crimea, again turned military force and the shifting of borders on the European continent into a tool of politics. The result is instability, unpredictability, confrontation and loss of confidence,” the president said.
Scenario No. 3: Russia
Relations between the EU countries and Moscow over the past years have been tense.
In 2014, Russia annexed Crimea, and the outbreak of hostilities between Kyiv and Russian-backed separatists in eastern Ukraine caused the deaths of more than 14 000 people. This smoldering conflict does not fade away. As a result, the US and the EU imposed sanctions against Russia because of its actions against Ukraine.
Nevertheless, at this Munich conference, French President Emmanuel Macron said: "Europe should make efforts in the long term to improve relations with Russia." And he added that, of course, he did not propose lifting the sanctions, but they did not change anything in the behavior of Russia.
According to Macron, a "convincing" approach in relations with Russia would be to follow a clear course: "We must firmly uphold our principles on frozen conflicts, while entering into a strategic dialogue - which will certainly take time."
During a visit to Poland in February, Macron said that "it is a big mistake to distance ourselves from the part of Europe in which we do not feel good."
Polish Foreign Minister Jacek Chaputovic during a conference in Munich sought to hold bilateral negotiations with Russian Foreign Minister Sergei Lavrov, but this initiative did not find a response from Moscow. Meanwhile, when Russia is preparing to celebrate one of the most important dates - the 75th anniversary of the victory in the Great Patriotic War - a dialogue with neighbors such as Poland would be of great importance.
May 9, 2020 a large-scale victory parade will be held in Moscow on the occasion of the 75th anniversary of the surrender of Nazi Germany in World War II in 1945,.
NATO as a stabilizing force
NATO Secretary General Jens Stoltenberg also spoke at a Munich conference cautioning that Russia's current policy poses a great threat.
This is especially true for the deployment of Iskander missile systems by the Russian side, which, in his opinion, led to the cancellation of the INF Treaty. Despite the conciliatory gestures of some European states towards Moscow, NATO member countries formally take a unified position on the issue of violation of the treaty. In addition, Jens Stoltenberg recalled that the Iskanders are only a small part of the Russian military system, both traditional and nuclear. According to Stoltenberg, "their deployment seriously increases the risk of escalation in the region."
The NATO Secretary General further stated that violence and instability in the Middle East could trigger an even wider migration crisis and increase the terrorist threat.
Speaking about the meeting of NATO member countriesэ defense ministers on the eve of the conference, on February 12 and 13 in Brussels, the Secretary General presented the idea of a NATO training mission in Iraq. Its goal will be to increase the capabilities of the Iraqi army so that it can operate independently.
Stoltenberg pointed out that all NATO measures are “negotiated with the Iraqi government” to ensure unrestricted compliance with Iraqi sovereignty and territorial integrity.
At the same time, NATO reaffirmed its full support for US stabilization efforts in Afghanistan. The United States has been negotiating with the Taliban for many years, which, however, did not lead to the desired result, namely, a peace agreement between the government and the Taliban. Stoltenberg noted that the Taliban must confirm their willingness and will to reduce violence, and NATO will continue to support the Afghan security forces to effectively combat terrorism.
In this regard, NATO, like the EU High Representative for Foreign and Defense Policy, is ready to take on more responsibility in order to increase the effectiveness of NATO operations and deepen bilateral cooperation.
Stoltenberg also spoke on the topic of Ukraine, noting that Ukraine, in order to join the NATO expanded capabilities program, must fulfill all the criteria for closer cooperation with the alliance. However, this does not mean "green light" for Kyiv on the way to membership.
The Munich Security Conference also addressed the issue of increasing defense spending. Jens Stoltenberg said that members of the alliance until the end of 2024 should allocate an additional $ 400 billion for these purposes. Nevertheless, not all NATO members intend to increase their military spending. For example, the Czech Republic, contrary to its allied commitments, recently announced that it will try to limit its defense budget to 1.4% of GDP.
Scenario No. 4: Ukraine
Without Ukrainian president Zelensky the future of Kyiv, at first glance, could have been clear. However, Zelensky, elected in 2019, called on the heads of states to restore the system of regional security in Europe, for which it is necessary to put an end to the “war of Russia” in eastern Ukraine and return Crimea from Russian occupation. "It’s not quite right to talk about the war in Ukraine. This is a war in Europe. And along with the annexation of Crimea, it lasts as long as World War II. Imagine," Zelensky said in his speech during a panel discussion at the conference.
At the fourth “Ukrainian lunch” on the sidelines of the Munich conference, at which its chairman Wolfgang Ischinger also made an opening speech, Zelensky said that Ukraine and Russia “had practically agreed on the next exchange of prisoners,” during which 200 Ukrainians should be released.
During a Ukrainian dinner sponsored by the Victor Pinchuk Foundation in Munich, Zelensky said Ukraine had a bad reputation in the international arena regarding corruption, which is not true. "We are fighting corruption. Please stop saying that Ukraine is a corrupt country. From now on it is not true," said President Zelensky.
At the same time, the Ukrainian president noted that the OSCE observation mission did not make possible a general ceasefire and safe access to the occupied territories.
The idea of disengagement of forces presented by the president involves dividing the demarcation lines into sectors. "There is a gradual withdrawal of forces, a transition from one sector to another is possible only if the OSCE monitoring mission checks that there are no illegal armed groups in this territory," the Ukrainian president said. He also noted that after some time Kyiv will inform other participants of the "Normandy format", that is, the leaders of Russia, Germany and France, about this initiative. He also assured that Ukraine will do everything to ensure that the next summit in this format takes place at the scheduled time, that is, in April 2020. In March, a further withdrawal of troops should be held in three sections of the front line, Zelensky added.
As for the local elections scheduled for autumn in Ukraine, he said he would welcome it if they were held all over the country at the same time, according to Ukrainian laws, as well as international standards. "The people of Donbas need elections that will be considered legal. And it cannot be that they run contrary to Ukrainian law, to the sound of gunfire and without control of the Ukrainian border," he said.
“I would like the elections to be held also in Crimea. But for us this is impossible without ensuring complete security and political conditions, in violation of the Ukrainian Constitution and international standards for democratic elections,” Zelensky added.
Zelensky also noted that the new security architecture should be based solely on the norms and principles of international law; current international treaties do not protect any nation from the rule of a stronger one.
In his opinion, a guarantee of the country's sovereignty and territorial integrity is a strong army, nuclear weapons and NATO. “I don’t believe in any documents. I also want to say this to other countries - you cannot believe in any documents. Nobody guarantees anything. The 21st century is the right of the strong,” Zelensky said in conclusion.
Digitalization and Facebook
On the occasion of the 56th Munich Conference, Austrian Chancellor Sebastian Kurz met with the founder and president of the world's largest social network user Mark Zuckerberg.
During the conversation, the politician expressed the opinion that large American digital companies should pay taxes in Europe. Kurtz noted that Austria had already introduced a national digital tax, and confirmed that his government would support a similar decision at the EU or OECD level.
Mark Zuckerberg, in turn, said in Munich that Facebook is prepared to pay higher taxes in Europe if the OECD develops new rules.
Zuckerberg also supported the OECD tax decision. According to him, his company will also support financial and research centers that are working on a solution acceptable to everyone. According to OECD, a proposal on a global tax system for digital giants will be ready in July.
"I understand that the planned reforms may mean that we in different countries will have to pay more taxes. But I also understand that there is disappointment in the way high-tech companies calculate taxes in Europe," said the founder and president of Facebook.
The European Commission has been working on an EU-wide digital tax project for the last election period, but this work has never progressed far. Prolonged discussions were held in Paris, and France in July last year introduced its own digital GAFA tax (based on the first letters of the names of the American companies Google, Amazon, Facebook, Apple).
A French tax is applied to every technology company in the French market, which annual global revenues exceed 750 million euros, of which at least 25 million euros per year come from France. Such a company must pay a new tax of three percent of revenue in the French market. Paris indicated that by registering European companies in countries with a more favorable tax system (Ireland, the Netherlands or Luxembourg), profits made in France are taxed elsewhere.
The new rules led to great discontent in Washington (although European and Chinese companies in France were also affected), the United States threatened France with retaliatory duties. Paris quickly decided to introduce a digital tax credit system, but other EU member states were clearly shocked by US reactions. The US was of the opinion that French taxes discriminated against American companies.
2020 Diplomatic Success Stories
This year's conference was very optimistic about the future, not only because of its perfect organizational talent and logistical skills, but also due to diplomatic qualities.
Thanks to the effective assistance of the conference, for the first time we managed to convince the neighboring countries of the South Caucasus to gather at one table at the Bayerisches Hof in Munich and discuss the problems of the region.
The war in Nagorno-Karabakh claimed 30 000 lives, the armed ethnic and territorial conflict between Azerbaijan and Armenia erupted for the first time in 1988. Only in 1994 an armistice agreement was signed.
Although an attempt at rapprochement between the two countries has already been outlined in the past, but only at the 56th Munich Conference did the countries agree to preliminary negotiations on updating neighborly relations and "healing wounds" that arose due to armed conflicts 32 and 26 years ago.
In Munich, the heads of state and government of Azerbaijan and Armenia gathered for the first time in public space and discussed further actions regarding Nagorno-Karabakh. “We achieved significant results at the Munich Security Conference, and this deserves applause, as it took a lot of courage,” said Wolfgang Ischinger.
The Munich Conference also became the venue for an important agreement between Serbia and Kosovo. Presidents Alexander Vuchich and Hashim Thachi signed a statement on February 14 of their intention to restore the railway connection and open roads between the two countries.
Each of the thematic discussions - from climate change and the regulation of the digital world to the situation in regions such as the Middle East, North Africa, the Balkans and Eastern Europe - took place with the participation of central players who expressed their geopolitical position. In each area, it was possible to see how the connections of different players - from trade and migration to energy and the Internet - get tools in the new competition between the powers.
The 56th Munich Conference ended with a new forecast for a united, strong and geopolitically significant Europe - a continent on which nearly 740 million people peacefully coexist. On this occasion, Ischinger said that Europe had enshrined its humane legal rule many centuries ago and that it was a model for many governments around the world. "Europe represents solid political ideas and views," he stressed.