Q&A The EU in the World: Foreign Policy After Economic Crisis

Baroness Falkner of Margravine House of Lords

Professor Dominique Moïsi Co-founder and Senior Adviser, Institut Français des Relations Internationales

Dr Richard Youngs Senior Associate, Democracy and Rule of Law Program, Carnegie Europe; Author, The Uncertainty Legacy of Crisis: European Foreign Policy Faces the Future

Chair: John Peet Europe Editor,

5 March 2014

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Q&A: The EU in the World: Foreign Policy After Economic Crisis

Question 1:

The question I have is related to trade, because you raised the commercial aspects in terms of the EU and you mentioned the TTIP (Transatlantic Trade and Investment Partnership) as far as one of the areas. What happens if the TTIP does not succeed?

Baroness Falkner: I think it will be an enormous setback for all of us, on both sides. Of course, it’s more important almost to the EU than it is to the US, and at a time when you have a multipolar world this is an opportunity that was a long time to get there, and the idea that we might blow it partly because of institutional structures, Congress versus the European Parliament, but partly because we can’t reach consensus on issues naturally, NSA and data and all of that, plus France’s other objections, cultural and so on, it would be an enormous setback at a time when we ought to be doing more of these agreements and bigger agreements to lose it, and I fervently hope that we won’t. I’m actually partially optimistic that we won’t.

Question 2:

I’d like to ask Richard, I was surprised when you said that the EU was being more active and more present outside the commercial and economic field in Asia. I’d be grateful if you could illustrate that. My other point is about Ukraine. It seems to me that we had a Ukrainian policy and you can say it’s been effective or ineffective or not well judged, but we had a policy, it was the agreement with Ukraine and supporting democracy and all the rest of it. The trouble is suddenly it didn’t work any more and what we haven’t had and have never had, and what we now see, is we haven’t had a policy towards Russia. It’s the Russian response to the Ukrainian crisis that we haven’t a clue how to manage, which is actually to me a very severe criticism, because I think if we think about it for more than about 20 seconds we should have seen this coming. Why the hell? All the experts, all of them, all the ones I heard and read said [Vladimir] Putin wouldn’t do this, and yet if you think back a bit, it’s not a bit surprising that he’s done it.

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Richard Youngs:

Asia? So I think the commercial dimension of the EU policy in Asia is still by far and away the predominant dimension, but I think there has been an effort from about mid-2012 on to inject at least a little bit more of a political dimension to Asia policy. The EU has devised a new set of guidelines that do talk about the EU’s strategic interest in the region and try and look at the connections between the economic and the more political objectives. The EU now has a series of strategic partnerships across the region that, again do build into the dialogue and cooperation on more political issues. These have not taken off in a really substantive or tangible way so far, but at least they do begin to recognize the need for a more political presence. And then with partners like Korea for example the EU has begun partnerships on things like human rights, the support of democracy, dialogue on changes to the multilateral order. I agree it’s at a very early stage so far, but a part of the realization of the effect of the crisis is that we need a policy in Asia that is not purely commercial in nature.

I think you’re right on Ukraine and Russia, what we’re seeing basically is the challenge of Ukraine and the challenge of Russia policy now conjoining. You’re right, people were predicting from two, three months ago that the issue of Crimea would be problematic and that essentially it comes down to Ukraine having to design a political system that’s fully inclusive, that is seen as fully legitimate by all parts of its population. People were predicting that this would be a problem; even from six weeks ago people were arguing that the problem might not be so much [Viktor] Yanukovych per se, as what would happen is if he made a very quick exit from the scene that we would be left with a power vacuum that could trigger this kind of instability we’ve seen.

Baroness Falkner: To Brian, on we didn’t see this coming, I’m reminded today of course is the day of Churchill’s Iron Curtain speech 68 years ago at Fulton Missouri.

Dominique Moïsi: On Russia, well in 1995, if I remember well, there was a British diplomat who formulated the motto for western policy vis-à-vis Russia; let’s integrate Russia if we can, let’s contain Russia if we must and at the time that was Yeltsin Russia, and somewhere we’ve stayed with that formula without realizing that things have changed and that the priority was to set up limits for Russia and www.chathamhouse.org 3 Q&A: The EU in the World: Foreign Policy After Economic Crisis we did exactly the reverse, which means we sent signals to Russia emphasizing our weakness. That’s what we did clearly in Syria. That’s what in fact we’ve been doing in most cases on most issues, Georgia too. And so today we have to be united in setting up limits for Putin, but that presupposes a clear understanding of what he wants and, if I were to say something, I would say that Putin is at the same time a great tactician, a deep ideologue, and a poor strategist, and this combination of three factors should guide us in our policy, but we should have a clear vision.

He is an ideologue. He really thinks this is the time to redress the greatest catastrophe of the 20th century, the disappearance of the Soviet Union. He really believes that autocracy are the future, that democracies are corrupt, inefficient, etc. and he really believes there is a Russian civilization role in between the east and the west of the world. And he is a tactician, that’s clear. He prepared the invasion of Crimea for quite a long time. You don’t do that like that. He was waiting for the right moment and the right moment was right after Sochi when suddenly history accelerated, but he was ready for that. But I think he’s a poor strategist because somewhere he is completely anachronistic in his vision of Russia, in his vision of Russia’s means and possibilities in the world, and probably though the Russian people are quite nationalistic I’m not sure they would follow him if that meant for Russian elite that they would have to choose between power and wealth. Usually you get power in order to be wealthier, but suddenly if you accumulate power and you become poorer, that’s not exactly what people will look for; Putin maybe, but not the oligarchs around him.

John Peet: And when you talk about Putin as being a tactician, one of the other things he seems to have done very effectively is to divide Europe. Germany has often had a very different policy towards Russia from the policy of France and Britain and Italy also. Do you think that’s part of the problem?

Dominique Moïsi: Well, I think the Franco-German relationship on Russia is very complex. On the one hand there’s a specific relationship of Germany with Russia based on history, and history means a lot of things; the crimes committed by the German army but also the long historical links, the geography, the culture. For Germany, Germany’s relation with Russia is unique and specific. I’ve had long conversations with various leaders of Germany, from Helmut Schmidt in www.chathamhouse.org 4 Q&A: The EU in the World: Foreign Policy After Economic Crisis the 1970s to Angela Merkel in the last few months, and they both emphasize the specificity of their country’s relationship with Russia. France in a way today thinks that she can continue to have a role in the world by doing the dirty job which no-one else wants to do, in Africa, and so, somewhere our way of looking at the world could not be more diverse; we’re looking south, Germany is looking east.

Question 3:

I have a specific question to Margravine, the Baroness. Given that new countries are being included within the sphere of , what is the ’s strategy on the foreign policy to help maintain good or longstanding relationship with those countries?

Baroness Falkner: Well I think the United Kingdom has always been one of those powers that is keen on enlargement, a wider rather than deeper Europe, possibly for reasons of wanting to integrate less deeply and hoping that expanding the club would slow down the pace of integration. Having said that, I suspect that the situation is, from the 1990s when this was a very long held and well- articulated policy after the events of 1990, 1989 to 1990, I suspect that post- 2010 and the financial crisis here, the rise of the immigration debate and the rise of anti-Europeanism, generally anti-EUism I should say, but I think that policy is somewhat less clearly articulated, by the way it was a policy held across the political spectrum. But I think now first of all it’s far more fragmented, and different political parties have slightly different more nuanced views on it. And I certainly think if you were wanting to go to, for example, Turkish integration which would be the biggest big beast to swallow for the EU, that I would be surprised if you found wholehearted desire for Turkish integration at the moment or to advance on the chapters, not least because itself is in turmoil, but also because I think people are starting to wake up to some of the problems that come with trying to integrate very large countries in.

Question 4:

I think it’s right that we focus on Ukraine in this discussion because it seems to be, and Dominique is absolutely right to say that we’ve got to move from

www.chathamhouse.org 5 Q&A: The EU in the World: Foreign Policy After Economic Crisis being model to being actor, and if anywhere is somewhere where our strength ought to play, the debate with Ukraine, economic partnership, neighbourhood geography, all that is right. I was going to add two more words of gloom to the discussion but Kishwer has just mentioned Turkey so I won’t go on, but also despite what you said about Asia I think Europe has also missed a trick in South Asia, plenty of potential in India, Pakistan, and so on, for us to develop a relationship which we have not yet begun to do. Against the gloom I think one positive thing nobody has mentioned has been over the last few years our external role on climate change where I think the Europeans can be quite proud of having had a global impact, but my question to the panel is that a year from now we’re going to have a complete different set of people in running the institutions and from the names that we see so far they’re pretty much yesterday’s men, and I mean men, could you as a panel just comment on what we’re likely to get and what you would like us to get in the context of this discussion?

John Peet: Richard, why don’t you start off on who you want to be President of the Commission and IREP?

Richard Youngs:

Turkey, I think the problem now is that Turkey again is in turmoil. Before Turkey was given a prompt along the path of democratization because it perceived that it had the membership perspective. If now it perceives that it doesn’t, that it’s not likely, then one wonders if this political crisis will be resolved in a democratic direction quite as easily. I think that’s one problem. With India I think the problem there is that everything has been made dependent upon the signing of the free trade area but the more and more it’s held up just really atrophies relations on the political side, but the EU has begun to talk to India a little bit more about these broader strategic issues.

And I agree on climate change, and in particular one very good thing the EU has done that has gone a little bit unnoticed because of the crisis is try to link together climate change and foreign policy, foreign and security policy and there the EU has definitely been a leader in the field, again still needs to follow through in a lot more substantive ways, but I think all of those are areas of modest success in the development of EU foreign policy. On the names, I think for me the important thing is that the focus has been on setting up the

www.chathamhouse.org 6 Q&A: The EU in the World: Foreign Policy After Economic Crisis internal institutional mechanics of the External Action Service rather than on long term strategic thinking. Having gone through that necessary process I think probably now it’s time to have in office someone who’s capable of putting together a slightly longer term vision.

John Peet: Such as? Dominique, let’s go to you, any names?

Dominique Moïsi: Oh names I wouldn’t dare, but principles of course. We are not under Chatham House Rules may I remind you. The following criteria are, a friend of mine who exercises high responsibilities in office in Brussels said to me, Jacques Delors was chosen because no-one knew him, Barroso was chosen because everybody knew him, and I think the time has come, especially given the international environment, for Berlin, , Paris and other capitals to accept to have rivals in Brussels. If they don’t they kill the European idea. The lack of incarnation of Europe has been a catastrophe in the last few years, and I’m generous by saying the last few years, but are they willing to change their vision, are they going to accept to have rivals? And the answer is probably in the tone of my question; no.

Baroness Falkner: I’m going to go out on a limb. I’m a politician, what have I got to lose! I think that if we don’t have people of the talent of Christine Lagarde back in Europe then we are really missing a trick, and I would be thrilled to see her or someone of that calibre, preferably also someone of my gender because we really have a deficit in that regard, running in a senior role in the institutions. But I also want to say something about the British nominee because we’re told that the British are not going to go for any of those big roles that bog us down, that we’re going to be very narrow in our perspective, defending our self-interests. So I’m told that our nominee is going to go for the economics portfolio, and I don’t particularly have a view on that, I think it’s a natural progression of the sorry state in which we are regarded on that side of the Channel that we can’t go for a big role.

But I think the joker in the pack is not going to be the institutional structure up there in the Commission, but the Parliament, and looking around the extremist, to be polite perhaps one might say populist parties in Europe, I am www.chathamhouse.org 7 Q&A: The EU in the World: Foreign Policy After Economic Crisis very intrigued and somewhat concerned at the idea that we will have such a significant section of Parliament, if the polls are correct, of right wing extremist parties, and given the powers of the Parliament now I think we will have a real and tangible impact across the board on policy in the next Commission. They will have a much harder job than this current Commission, irrespective of where they come from, which is why we need a few people who stand head and shoulders above the usual suspects from any country, and I really hope that the leaders will look at the arithmetic on the morning of 23 May and make some decisions based on the arithmetic of Parliament rather than in terms of who they think from their party would best have a sinecure in Brussels.

John Peet: John Kerry this morning was suggesting Nick Clegg should be our Commissioner, but Nick Clegg didn’t seem very interested in the idea.

Baroness Falkner: I think we need Nick Clegg more than Europe needs him!

John Peet: Dominique, do you want to add something?

Dominique Moïsi: Just a final word if I may. On 25 May, if the calendar is respected, Ukrainians are going to vote for Europe and Europeans are going to vote against Europe. And that summarizes it all!

Question 5:

I think I would agree with everything that Dominique Moïsi has said this morning except for one thing when he said that Putin is not a strategist. I think Putin is a strategist and he does have a strategy, and the strategy essentially is to get back to the power and as so far as possible the territorial frontiers of the Soviet Union and the Tsarist Empire, and for Putin and for most Russian nationalists and perhaps the majority of the Russian population, I think 1990 sadly was not a great moment of emancipation, it was a moment of weakness and humiliation, and Putin sees his ambition as getting back from that, rather www.chathamhouse.org 8 Q&A: The EU in the World: Foreign Policy After Economic Crisis like Stalin and Molotov saw Brest-Litovsk as a moment of great weakness and humiliation, and the important thing for them was to get back from that which of course they did. I think that’s the problem we face.

My reaction to the present crisis so far as the EU is concerned is to say, at least thank God we’ve got an EU even in its own inadequate and incomplete form, because if we were confronting a resurgent Russia as just separate fragmented national states I think we’d be in a very real nightmare. So far as going forward is concerned, it does seem to me that this is an example of how important it is to integrate our policies, economic, foreign policies, and other policies. One of the essential areas, I can’t talk for very long I know, but one of the essential areas where we are extremely weak and vulnerable is energy policy. We should not be so dependent upon Russian natural gas. Putin I think thinks he has us by the tail there and he can always produce divisions within the members of the EU because some of them are more and some of them are less dependent on this Russian natural gas, and of course the Germans are the most dependent or they are particularly dependent. So he thinks he has a tremendous weapon, we must erode that weapon and we can’t take it out of his hands tomorrow morning sadly, but it should be a strategic urgent imperative and something I hope that the heads of state and government focus on tomorrow to make sure in the interests of all us in the EU and in the interest of peace in our part of the world that we do do something about that energy dependence.

Question 6:

I’ve always admired Richard’s optimism and I’ve always envied it because I’ve never quite managed to share it, but I’d just like to press him on two things from the book. The first is geo-economics and Asia. In the book you give the impression that you approve of this move towards greater geo- economics, but it does strike me that geo-economics in Europe is completely separate from geopolitics and rather naively so. And your argument that we’re becoming more politically engaged with Asia just doesn’t convince me I have to say. If you look at the recent round of begging trips our leaders have undertaken to Beijing, Cameron in particular, at the time when the air exclusion debate was just starting off, we’re meant to be a member of the Security Council and yet not a word was said about something that will have profound implications for that part of the world. And it seems to me that we in Europe tend to think we can insulate the economics from everything else and it strikes me that’s very, very naïve, particularly in Asia.

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The second thing is Ukraine and I think it’s very important not to forget the role the European Union played in causing this crisis, because it does strike me that we approach Ukraine prior to Vilnius with an appalling mixture of hubris and naivety. Hubris because we seemed to assume that Yanukovych would obviously sign because we’re the EU and who wouldn’t, and the perplexity that greeted his decision not to was quite revealing in itself. Naivety, because we didn’t realize what we were doing to that country, most Ukraine and Russian specialists seemed to realize but we didn’t listen, and I think when we look back we need to get our act together when dealing with our neighbours and not be quite so blind to realities on the ground when we make approaches to them, because we have a lot to answer for in this I think.

John Peet: Richard, why don’t you take that and then if anybody wants to comment on energy and then we’ll have another round.

Richard Youngs:

I wouldn’t say I’m optimistic about the turn to geo-economics, I was simply recognizing that I think it’s an inevitable part of the response to the crisis and it would perhaps be unduly idealistic to think that it wouldn’t be, and I do actually develop the argument that the EU has been a little bit narrow in the way that it defines geo-economics. It may be a perfectly appropriate and necessary response to the crisis, but I think what the EU is doing is to try and harness all its political instruments behind very narrowly defined short term material commercial interests rather than look at the panoply of economic instruments it has at its disposal, to help further the longer term geopolitical interests. This gets a bit academic but there are different definitions of geo- economics there and I think the EU has veered a little bit towards a too narrow concept. So I think I do share your concern about the fact that the EU has always argued that its strong point in foreign relations compared to the US is that it does recognize this inter-linkage of political and economic issues, and in a way that’s been integral to its concept of soft power, but I still think actually although it recognizes that in an abstract way, it’s the EU’s Achilles’ heel that it doesn’t really dovetail those together in any tangible sense.

So in that sense, again to come back, I really wouldn’t push too far this positive argument that the EU has developed a sufficient strategic presence in Asia. I just wanted to make the case that there’s a lot of people out there, I

www.chathamhouse.org 10 Q&A: The EU in the World: Foreign Policy After Economic Crisis think probably most Asia experts who would argue that the EU has got no business having any kind of strategic presence in Asia, it’s a completely futile ambition to have. And what I try to do is develop a kind of middle line argument to say that of course the EU is not going to be a major strategic presence, it has a lot of work to do even to have any kind of modest strategic presence and vision still in the region, but it’s not a forlorn ambition to at least try and underpin the commercial and economic presence we have with a role, particularly in soft security cooperation, which is where I think there is a demand from Asian powers for more of an EU role.

And then very, very briefly on Ukraine, I think you’re spot on. I think to its credit the EU said from early on that it doesn’t see either Ukraine or other Eastern Partnership countries in terms of a zero-sum battle with Russia, that it has wanted these countries to have deeper and more positive relations with the EU but also more positive relations with Russia. I think that’s an admirable vision. I think the trouble is, the pity is, that it hasn’t really got through to people on the ground, and there is a perception that still for Ukraine and other countries that veering more to the EU is a zero-sum choice, and that is deeply unsettling for large parts of these populations. However, justifying our criticism of President Putin’s actions at the moment, one issue is to dissuade Putin, but it’s also not in the EU’s longer term strategic interest to push so hard that we end up fracturing and fragmenting these Eastern Partnership countries that do still have very split identities amongst their population. So I think the positive-sum vision is good in theory, but in practice the EU still needs to show that that is in fact what it’s about and capable of delivering that in practice.

Dominique Moïsi: Now, very quickly on Putin, yes, he has a strategy but what I’m saying is that there is a contradiction between the goals he is seeking and the means he has and so it can’t be the right strategy. When it comes to clean energy I think we should enlarge the concept and introduce political consideration; a clean energy is an energy that does not increase the political dependence of your country from authoritarian despotic regime and that should be set in a very clear way. Clean as a political content.

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Question 7:

If I understood correctly and if that’s the case then I do have a problem with the whole narrative and the discourse. We need hard power rather relying more on soft power as EU. In fact we do have both. We do have hard power, we do have soft power. We have complementarity with NATO, we have done a number of things, and soft power; there is nothing soft about soft power. Those that articulate soft power they are not softies and that’s what brings people in the European Union now, and I would say that we have had relatively among treatied countries successful foreign policy, whether this is in Kosovo, whether this was in Iran, in Syria as well, and that’s the way Ukraine is moving because there is a tendency to put down European Union and I have a problem with that. On Turkey, true, a lot depends on the applicant country but it’s highly unfair because I keep hearing it all the time that the goalposts keep changing on Turkey or any other applicant country for that matter. It’s fair, you start negotiations you finish them. It took more than ten years for the United Kingdom to become a member with two French vetoes but it did become a member. It’s unfair. You cannot start negotiations and not finish them, but of course a lot depends on the country itself, so thank you.

Question 8:

I was struck by Dominique’s description of Mr Putin and it reminded me very much that it would fit a European leader of my childhood and I would like to be reassured that we are not seeing a replay of the Sudetenland of Czechoslovakia.

Question 9:

I just wanted to, since we’re on the record on this, I just wanted to put in for the record just a comment on Baroness Falkner’s comment. I think that the US feels that it has a lot more to gain from TTIP than the EU side does and the reason for that is primarily agriculture. The US of course has a major trade deficit with the EU but a major trade surplus in agriculture and the US is the world’s largest agricultural exporter. And I think that on the other side the US has very few investment restrictions, a few sectoral restrictions, some of which are relatively important; telecoms, airlines, coastwise shipping, but the major problem of course from the US side is not TTIP but the other trade agreements in waiting including APEC (Asia-Pacific Economic Cooperation). And the reason why Harry Reid is holding up fast track is of course because www.chathamhouse.org 12 Q&A: The EU in the World: Foreign Policy After Economic Crisis the unions are deathly afraid of it, and fast track when it’s implemented by Congress is usually for a period of time and no-one knows how long that period of time will be and what president would then be empowered to act without congressional amendment. But I think that the US interest, I sort of disagree with Lady Falkner, I just think that the US interest in TTIP is probably - oh, and by the way the US has much lower tariff rates across the board than the EU.

Question 10:

I have several questions relating to the Middle East peace process and the EU. The European Union is the main supporter for the Palestinian authority, but actually the EU is absent or there is not any role in the peace process. Is there any role for that? Dr Richard mentioned maybe indirect way the structure of the EU, the mechanism. The second question is the future of the EU and Israel relationship and there is a voice now to boycott the Israeli settlement and what do you think about that circumstance?

Baroness Falkner: I think I agree with you, the goalposts are moving but when you have an accession process that starts in 1987 and we’re today in 2014 I think it would be unrealistic to expect the goalposts not to move, because as political reality changes so does the democratic electorate’s perceptions of what it wants and needs, and it’s quite right I would say for democratically elected politicians to respond to what their electorates are saying. So yes, it may be unfair but that’s reality and that’s often the way that foreign affairs works. On the person from your youth that you were reminded about, I couldn’t agree with you more. I was listening to the Today programme this morning and there was a German academic who has written on Putin, whose description of Putin was eerily like someone I remember from the history books, so I think we need to be very careful indeed. On the TTIP I couldn’t agree with you more. I think your perspective is from inside the Beltway and what I was trying to articulate, again with the electoral impact on Congress and the pressures from outside the Beltway, was that Congress had particular difficulties. Congress does tend to use what’s happening beyond the Beltway very much to influence its decisions.

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John Peet: Dominique, do you want to say anything about the Sudetenland?

Dominique Moïsi: On two things. I wrote myself this week about what happened in Crimea that what took place was a mini Anschluss, so I made the reference. At the same time one should not go too far. I don’t think Putin has any idea of destroying a part of European population, so one should clearly refrain from going too far on the road to analogies. On the Middle East and Europe, two things. There was a moment in the 1990s where European felt that they had a complimentary role to play with the United States and that replaced a moment in the 1980s and late 1970s when Europe had a substitution role in the minds of some. Now we do something different, that was France, and then we’ve done the same thing, but it’s true that there is a little, I would say, fatigue vis- à-vis the peace process, a lack of belief that it may really lead to something.

On boycott I have mixed feelings. In a way if you speak of boycott you should start immediately boycotting Russia, which has annexed by force and against international law, territories that are not belonging to Russia, and what annoys me a little bit is that boycotting the Israeli policy in the West Bank is one thing which I would accept, but somewhere sometimes I see that the real aim of the boycott is not the legitimacy of Israel actions in the West Bank, but the legitimacy of Israel to exist and that is very problematic in this. This is why in many ways I don’t think European government will join into that. It must be clarified. People who advocate for boycott should say that of course the right for Israel to exist is not part of that game.

John Peet: And Richard, the last word.

Richard Youngs:

Russia, we should remember that Russia isn’t just Putin. I think one problem is the EU has given up a little bit in supporting Russian civil society over the last two or three years. Russian civil society feels a little bit abandoned and I think if there was internal reform, that would allay some of the foreign policy issues and challenges as well, and over the longer term we all know that,

www.chathamhouse.org 14 Q&A: The EU in the World: Foreign Policy After Economic Crisis although it may seem rather bizarre to say it today, that Russia faces a lot of problems related to its own internal weaknesses rather than its strengths.

TTIP, I think if it fails economically it would be significant, but probably even more significant for the political message it would send to the rest of the world and I think these pragmatic areas of economic cooperation are needed across the Atlantic, but I think we also need a more strategic partnership where the EU and US need to talk about these big global order impacts of the crisis in a way they’re not doing at the moment.

And on the peace process I still think the EU’s main influence is the enormous amount of funding it gives to Palestinians on the ground rather than at the diplomatic level. Again a little bit unnoticed in the crisis, the amount the EU gives for institution building in the occupied territories has increased a lot over the last two or three years, but of course all that good work on the ground is being blocked because of the lack of progress at the diplomatic level and there has been some movement on the exports from the settlements, those have been in the pipeline for many, many years, and even if member states were fully to agree on them I think their impact on Israel would be relatively limited. So, yeah, I’ll leave it there.

John Peet: Great and we’ve used up more or less exactly one hour, so on behalf of everybody I’d like to thank the panel.

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