How the Ukraine crisis may transform the EU

"THERE are decades where nothing happens; and there are weeks when decades happen". The famous quote of Vladimir Lenin, made when he was living in exile before the 1917 Russian Communist revolution, has new relevance in March 2022.

With the geopolitical kaleidoscope in flux following Moscow's invasion of Ukraine, one of the biggest consequences could be for the EU-27 which has shown a political unity that few anticipated in response to Russia's revanchism. And as European prime ministers and presidents prepare to meet on Thursday (Mar 10) and Friday for summitry, big moves are afoot for the Brussels-based club.

Take the example of defence where Russia's invasion is prompting the European Union (EU) to drop its longstanding taboos about military might. Brussels is already pushing forward with a European Defence Action Plan that is seeing greater military cooperation between the EU member states, and this is now being turbocharged as strategic military autonomy tops the EU's political agenda.

It is not just Ukraine driving this, but also that Brexit has eliminated a longstanding obstacle to greater European cooperation in this sphere given that successive UK governments have long been opposed to deeper defence integration at the EU level. Add to this too the uncertainty in transatlantic ties caused by the US presidency of Donald Trump which some across the continent fear could be repeated given the significant possibility that he will run again in 2024.

This military agenda is not only favoured by key national leaders such as French President Emmanuel Macron, but also European Commission President Ursula von der Leyen. In her previous post as German defence minister, she backed plans for a European army so the continent can react more credibly to the threat to peace in a member state or in a neighbouring state.

For the first time ever, the bloc is also financing the purchase of lethal weapons for countries that are under attack, a decision that von der Leyen has described as a "watershed moment". Moreover, Ukraine will be provided with a 500 million euros (S$750.6 million) fund under an off-budget instrument known as the European Peace Facility.

It is not just Brussels, but also individual nations transforming their military thinking. Take the example of Germany which has drastically reversed its post-war policy that prevented the country from sending lethal weapons to conflict zones and is equipping Kyiv with 1,000 anti-tank weapons and 500 anti-aircraft Stinger missiles.

Finland and Sweden, 2 traditionally non-aligned countries, are also delivering arms to help the Ukrainian army resist the Russian invasion. Moreover, Denmark has announced it will hold a June referendum to reconsider the 30-year-old opt-out clause that has so far kept it away from the EU common defence policy.

Another example of the rapidly shifting sands is energy policy provoked by the fact that Russia's war chest is refilled on a daily basis with oil and gas revenues. Today, the EU depends on Russia for 40 per cent of its natural gas and a quarter of its oil imports, with the 27 member states paying about 1 billion euros a day to Moscow for those supplies.

On Monday, Lithuania's foreign minister said "we cannot pay for oil and gas with Ukrainian blood". Yet, while few - if any - in Europe disagree with that sentiment, the practicalities of this are complex.

Big powers like Germany, France and Italy are concerned by the prospect of skyrocketing energy prices that would follow any sanctions on Russian oil and/or gas imports with energy prices already high across the continent.

Until Russia's attacks on Ukraine, the majority of Germans supported Nord Stream 2, the new gas pipeline direct from Russia which has now been frozen as part of EU sanctions against Russia, and there is concern that European populaces are not yet ready for a big shift in energy policy. In France, for instance, Macron still remembers well the pre-pandemic petrol price hikes which sparked months of massive street protests.

Still, change is coming and von der Leyen said this week that the bloc will speed up efforts to wean itself off Russian energy as part of a massive energy security shift. This includes measures like finding alternative suppliers; improving energy efficiency, including renovating buildings and using artificial intelligence to effectively manage the energy grid; and massive investment in renewables such as solar, wind and hydrogen, as planned under the European Green Deal.

One signal of this new direction of travel came on Tuesday when the European Commission published plans to try to cut EU dependency on Russian gas by two-thirds this year, and end its reliance on Russian supplies of the fuel "well before 2030". The plan is to switch to alternative supplies and expand clean energy faster under the plans.

This underlines how much Ukraine has triggered an overhaul of the EU's energy priorities as Brussels seeks to wrest countries free from Russia. The Commission said gas and liquefied natural gas from countries like the US and Qatar could this year replace more than a third, or 60 billion cubic metres (cu m), of the 155 billion cu m Europe gets annually from Russia.

New wind and solar projects could replace 20 billion cu m of gas demand this year, while tripling capacity by 2030, adding 480 GW of wind and 420 GW of solar energy, could save 170 billion cu m a year. Turning down thermostats by 1 deg C could save an extra 10 billion cu m this year, while by 2030, replacing gas boilers with 30 million heat pumps could save 35 billion cu m.

The EU will also propose rules by April requiring EU countries to fill gas storage to 90 per cent by October each year. EU storage is currently 27 per cent full: there is enough storage and alternative gas supplies for this winter, but a prolonged halt to Russian imports would hit Europe's economy hard.

Taken together, defence and energy policy underline why the Ukraine crisis has the potential to reshape the EU. Decisions taken in coming weeks could be momentous and will help define the longer-term economic and political character of the bloc for many years, if not decades, to come.

Andrew Hammond is an associate at LSE Ideas at the London School of Economics.