EU considers impact of sanctions crackdown on China relations

Good morning. Today, I try to untangle the foreign policy knots the EU is facing on its China strategy — and the latest package of sanctions against Russia. And our Athens correspondent previews the (long) upcoming elections in Greece.

Have a great weekend.

Beijing mon amour

China will be top of the menu at two separate EU meetings today, as the bloc tries to redefine the relationship with its best frenemy whilst addressing Beijing’s influence in the Ukraine war.

Context: The EU is debating an 11th package of sanctions that would explicitly hit Chinese companies accused of selling banned goods to Russia. At the same time, the EU has been working on a new joint strategy to deal with Beijing.

The latter will be discussed today in Stockholm by EU foreign ministers who are paving the way for higher-level talks of EU leaders in June.

Ahead of the meeting, EU foreign policy chief Josep Borrell set the tone in a letter sent to the ministers. “China’s ambition is clearly to build a new world order with China in its centre,” he warned.

He called for a “coherent strategy to deal with China”, but also said that the EU should not seek to “block the rising power of emerging countries”.

While the ministers are tasked with “recalibrating” how they view Beijing (spoiler: less of a partner and a competitor, more of a rival), another set of EU representatives will meet in Brussels to “recalibrate” the sanctions proposals.

After a first debate on Wednesday, not everyone seems comfortable sanctioning companies in China and other third countries, especially at a time in which the relations with Beijing are being redefined, according to EU diplomats and officials.

“A number of member states recognise the very significant foreign policy consequences of a choice to move to the listing of the companies”, one EU official said.

Countries including Germany are also raising questions about more general measures in the 11th package targeting third countries. This would concern cases where there is evidence of goods leaking to Russia that could be used for military purposes. Critics have pointed out that targeting third countries risks alienating or pushing them closer to Moscow.

In a proposal sent to other countries and seen by the Financial Times, Germany suggested taking a closer look at the EU’s own companies, which might — wittingly or unwittingly — be facilitating exports of banned good to Russia.

Berlin suggested imposing contractual requirements on the companies, committing third country importers not to export specific targeted goods to Russia. The idea is to put more weight on the corporate world to close sanctions loopholes.

This speaks to the delicate balancing act the EU is facing, as it tries to pressure other parts of the world to help enforce its penalties on Russia, without wrecking diplomatic relations in the process.

Chart du jour: Reaching out

The EU is planning a new internet cable through international waters to connect with Georgia and decrease its dependence on Russia. But the Black Sea has become a theatre of war as Moscow continues to fire missiles from its warships, adding to concerns about sabotage.

Friend or foe

It’s nine days before Greek national elections, and all opinion polls show a clear lead for the ruling centre-right party, New Democracy, over the radical left party Syriza.

But that doesn’t mean that Greece will have a new government anytime soon, writes Eleni Varvitsioti.

Context: Greece’s ballot on May 21 will be held under a proportional representational system. This means that the first party — or leading coalition — needs at least 45 per cent of the votes. Otherwise, a second turn of voting is called.

Greek premier Kyriakos Mitsotakis’s New Democracy, though ahead, is polling far from that percentage. This means it might need to form a coalition with another party.

The obvious partner is the centre-left opposition party Pasok. Unfortunately, it is also at the receiving end of the Greek wiretapping scandal. The Greek intelligence services EYP, which were under Mitsotakis’s control, attempted to wiretap the phone of Pasok’s leader, Nikos Androulakis.

At a televised debate this week, the divide between ND and Pasok only seemed to widen. On air, Mitsotakis, in an effort to bring the two parties closer, admitted for the first time that there was no national security reason for Androulakis to be monitored.

Androulakis shot back, saying that whoever was behind the surveillance operations should be jailed, in effect pushing the prospect of a coalition government further away.

What does that mean? Expect a second round of elections at the beginning of July.

As the electoral law will change in the second round, granting a bonus to the biggest party, ND is more likely to win that vote.

What to watch today

1. EU foreign ministers meet in Stockholm.

2. Weimar triangle meeting of officials from France, Germany, Poland and Ukraine in Poznań, Poland.

Now read these

Financial Times