I Bi-regional Relations EU-LAC Foundation EU-LAC EU-LAC EU-LAC Multilateralism and Regionalism in Challenging Times: Relations between Europe and Latin America and the Caribbean Coordinators: Ernesto Jeger, Diego Durán Cruz, Bruno Theodoro Luciano M u lt il at er al is m a n d R eg io n al is m in C h al le n g in g T im es : R el at io n s b et w ee n E u ro p e an d L at in A m er ic a an d t h e C ar ib b ea n EU-LAC Foundation Multilateralism and Regionalism in Challenging Times: Relations between Europe and Latin America and the Caribbean Coordinators: Ernesto Jeger, Diego Durán Cruz, Bruno Theodoro Luciano 2022 EU-LAC FOUNDATION, 2022 Große Bleichen 35 20354 Hamburg, Germany https://eulacfoundation.org/en PUBLISHED BY: EU-LAC Foundation GRAPHIC DESIGN: Virginia Scardino | https://www.behance.net/virginiascardino ISBN: 978-3-949142-14-7 DOI: 10.12858/0422en This edition was produced by the EU-LAC Foundation. The Foundation is financed by its Members and, in particular for this initiative, by the European Union and the Federal Republic of Germany. The concepts expressed in the articles compiled in this edition are solely the responsibility of the authors and cannot be considered as the point of view of the EU-LAC Foundation, its Member States or the European Union. This publication is copyrighted, although it may be freely reproduced by any means for educational purposes or to carry out promotion, advocacy or research activities as long as the source is cited appropriately. The holders of the copyright request to be informed of the mentioned uses in order to evaluate their impact. To contact the Foundation via email: info@eulacfoundation.org http://info@eulacfoundation.org INDEX PRESENTATION IV INTRODUCTION VI 1. TRANSOCEANIC RELATIONS BETWEEN LATIN AMERICA AND EUROPE IN THE LAST 30 YEARS: IDENTIFYING OPPORTUNITIES AND CHALLENGES IN THE TWENTY-FIRST CENTURY Karina Lilia Pasquariello Mariano, Cairo Gabriel Borges Junqueira, Bárbara Carvalho Neves 1 2. GEOPOLITICAL HORIZONS FOR THE INTERNATIONAL PROTECTION OF DEMOCRACY IN LATIN AMERICA AND THE CARIBBEAN Gerardo Caetano Hargain, Diego Hernández Nilson 14 3. CHALLENGES TO DEMOCRACY IN THE EUROPEAN UNION Isabel Camisão, Bruno Theodoro Luciano 26 4. THE CLIMATE CRISIS, AN OPPORTUNITY FOR REAL COLLABORATION BETWEEN LATIN AMERICA AND THE EUROPEAN UNION Sandra Guzmán 41 5. THE GREEN DEAL AND THE NEW GEOPOLITICAL EUROPE José Antonio Sanahuja 51 6. TRADE, SUSTAINABILITY AND THE COURSE OF THE MERCOSUR-EUROPEAN UNION NEGOTIATION Mariana Vazquez 64 7. SUSTAINABLE DEVELOPMENT AND TRADE: THE EUROPEAN UNION AND MERCOSUR AGREEMENT Marcus Maurer de Salles, Regiane Nitsch Bressan 75 8. THE EUROPEAN UNION’S PROMOTION OF HUMAN RIGHTS ABROAD: THE CASE OF LATIN AMERICA AND THE CARIBBEAN Jan Wouters, Gustavo Müller 89 9. DISCUSSING THE MAIN CHALLENGES FOR HUMAN RIGHTS IN LATIN AMERICA AND THE CARIBBEAN AND THE EUROPEAN UNION Dina Sebastião, Samara Dantas Palmeira Guimarães 100 5150 5. THE GREEN DEAL AND THE NEW GEOPOLITICAL EUROPE José Antonio Sanahuja23 Carolina Foundation The response to COVID-19, the ecological transition and strategic autonomy are the three axes on which a broad transformation programme of the European Union gravitates. This transformation affects its own social and economic development, as well as its relationship with the rest of the world and its foreign and security policy, at an international situation characterised by the crisis of globalisation and the challenge of the liberal international order. Both events were visible before 24 February 2022, the date of the Russian attack on Ukraine, and that war has made even more visible the EU's shift towards a "geopolitical Europe". Although this turn had already begun, the emergence of a war of aggression in Eastern Europe is, in the words of the President of the European Commission, Ursula von der Leyen, a real watershed for Europe; in the words of the High Representative of the Union for foreign and security policy, Josep Borrell, a "moment of life or death" (Borrell, 2022a); and according to the Chancellor of Germany, Olaf Scholz (2022), a real turning point (Zeitenwende) for the main Member State of the Union in terms of its economic and political weight and, from now on, also in its security and defence policy. In one way or another, the European Union's relations with Latin America will be oriented on this basis. COVID-19 has been one of the initial catalysts for change. In many respects, the pandemic has exposed many of the EU's weaknesses, and has induced a strong social and geopolitical response that combines a broad social, green and digital transformation for itself, with the affirmation of the European project in the face of a more adverse international scenario. In the words of Max Bergmann (2020), it has been a true "geopolitical awakening" of the EU. A sample of these changes are the July 2020 agreements of the European Council, with a package of 1.8 trillion euros, including just over one trillion of the new multiannual finan- cial framework 2021-2027, and the EU-Next Generation recovery programme, with 750,000 million. Just because of its important economic effects, it is also a vindication of multilater- alism and regional integration, challenged in Europe and elsewhere by extreme nationalism and a rising ultra-right movement. This agreement is a federal breakthrough, which only six months earlier was unimaginable (Vidal-Folch, 2020). It involves linking budget, taxes and Eurobonds, starting the way to a common treasure. This fund, it is important to emphasise, is both a countercyclical instrument to face the pandemic, and an investment mechanism with a transformative vocation. It will have to contribute to resilience and social and territorial cohesion and, above all, to a change in the economic model, greener and more digital. 24. Professor of International Relations at the Complutense University of Madrid. Director of the Carolina Founda- tion and Special Advisor for Latin America to the High Representative of the European Union for Foreign and Security Policy. sanahuja@cps.ucm.es. This text reflects exclusively the author's point of view. 52 In this broad social and geopolitical response there are two interrelated axes. First, the European Green Deal, the governance programme of the European Commission chaired by Ursula von der Leyen. Second, the autonomy or strategic sovereignty of the EU. This concept appears in the European Union Global Strategy (EUGS) of 2016, linked to the strengthening of security and defence policy, but with the "Geopolitical Commission" that begins its mandate in 2019, it extends to other areas: industrial policy, in order to reduce the vulnerability of the EU to the dislocation of supply chains or external dependence on essential goods, such as microprocessors; or energy security, as revealed by the high de- pendence on Russian gas in several Central European countries (Sanahuja, 2021a). In this area, strategic autonomy and the Green Deal converge: days after the Russian attack on Ukraine, German Finance Minister Christian Lindner declared that "renewable energy is the energy of freedom" (Reuters, 2022). This text presents an overview of the European Green Deal taking into account its back- ground, content and scope from the point of view of international political economy, as a response strategy to the crisis of globalisation and the COVID-19 pandemic, and as a framework for the EU's external relations and its will for "strategic autonomy". It is im- portant to start from a basic observation: the European Green Deal is not a mere reissue of sectoral policies for the mitigation and adaptation to climate change, or for the care of biodiversity. It is a comprehensive and long-term strategy with a vocation to transform the European economy and societies to ensure climate neutrality by 2050, involves a complete redefinition of the social contract, with present and future generations, and aims to reposi- tion Europe in the world and in the multilateral system. 1. THE GREEN DEAL AND EU’S ENVIRONMENTAL POLICY In both the United States and Europe, the expression "Green New Deal" has as a historical reference the New Deal of President Franklin D. Roosevelt, with which the United States faced between 1933 and 1939 the Great Depression and mass unemployment. The fact it reappears as a reference in the face of the climate emergency is because it represents an effective symbol or narrative to face a crisis that, as in the thirties, has a systemic character. It can be useful for social mobilisation and for articulating the political coalitions that will drive the broad economic and social transformation that is required today. It would be a question of responding to an organic crisis of globalisation in its environmental, economic, social and political dimensions; to deploy new narratives of human progress, and an in- dividual and collective ethic based on the common good in the face of the exhaustion of neoliberalism and the climate crisis. In fact, since the financial crisis of 2008 the concept of "green new deal" has appeared, both in Europe and in the United States, as a progressive project to recover the ideas of social democracy and international cooperation in the face of the rising of extreme right movement, which as mentioned, challenges multilateralism and the international order (Sanahuja, 2021b). 5352 The idea of the Green Deal reappeared, for example, in different proposals of the Greens in the European Parliament, in the British Labour Party (Pettifor, 2019), in the left wing of the Democratic Party of Bernie Sanders in the primaries in the United States, and, more articulately, in the proposal of Congresswoman Alexandria Ocasio-Cortez (2019) to the House of Representatives; and in the demands of new social movements led by young people, such as Extinction Rebellion, Fridays for Future (Greta Thunberg) and the Sun- rise Movement, in the US. To this will be added the European Union itself: in November 2019, through an important resolution, the European Parliament declared the situation of "climate emergency", and in December 2019 the European Green Deal was approved as a government programme of the European Union through the von der Leyen Commission. It is the expression of a great agreement between liberals, socialists and Christian Demo- crats, although it is strongly influenced by the trajectory and previous learnings of design and implementation of public policies in the EU. In fact, it is part of an important accumulated acquis. In April 2021, the Financial Times acknowledged the pioneering role of the European Union in environmental policies and the response to climate change, recalling that it had been the first to support the take- off of renewable energies with subsidies; to establish a pioneering market for carbon and emission rights; to issue "green bonds", through the European Investment Bank (EIB); in adopting the most demanding emission reduction targets; and, since 2018, in regulating what is "green" and can be considered sustainable finance, through a taxonomy based on environmental, social and governance (ESG) criteria also pioneering around the world. In part, this environmental and climate leadership is partly explained by the strong weight of green parties and movements for climate justice in the EU, and the very logic of Euro- pean integration, which endows environmental policy, in the key of "Europeanisation of policies", with its own dynamic in the name of regulatory harmonisation and coordination. 2. SUSTAINABLE DEVELOPMENT AND TRANSFORMATIVE VOCATION OF THE EUROPEAN GREEN DEAL The European Green Deal goes beyond the usual gradualist and technocratic logic of sectoral policy common in the European institutions in the field of energy, climate, or biodiversity. It is a comprehensive strategy, of great political depth and societal scope. It makes the fight against climate change the main goal of the EU, so that this allows to meet the goals of the Paris Agreement and, at the same time, build "... an equitable and prosperous society, with a modern, resource-efficient and competitive economy." Thus, it seeks to coherently integrate economic, social and environmental policy, and foreign policy, and become a new strategy that promotes both economic growth and sustainability. To this end, it addresses the three main environmental challenges – climate, biodiversity and pollution – with a policy matrix that covers energy, industry, construction, mobility, and agriculture and food. It resorts to market mechanisms, but also recognises the leading role of public policy, leaving behind ordoliberal orthodoxy. It proclaims the priority of the human dimension, in a "just and in- clusive" manner. As a socio-political pact, it aims to recover the bond of trust between "... national, regional and local authorities, civil society and economic sectors" (European Com- 54 mission, 2019: 2). The fight against climate change and decarbonisation is chaired by a Climate Law that sets out a binding mandate to achieve net zero emissions and climate neutrality by 2050. Achiev- ing these goals means maintaining an adequate supply of clean, affordable and safe energy, with a radical change in the energy mix and greater use of renewable sources, the decar- bonisation of gas; the development of storage technologies and smart grids, batteries and "green" hydrogen; electric mobility and much tougher emission standards; better integration of national electricity systems with the "Union of the Energy"—. This leads to more burden- some energy taxation, and mobilises public and private investment. A key component is the improvement of insulation in buildings, which in addition to saving energy will allow to reactivate employment in construction. It will also be necessary to address the problem of energy poverty, and to mitigate the costs of this transformation for the regions, countries and social groups concerned, particularly in sectors such as coal. As Martin Sandbu (2021) point- ed out, it would be about avoiding the risk of climate policy intersecting with class conflicts and far-right "culture wars", jeopardising the political viability of the European Green Deal. All of the above entails a return of industrial policy and a new cycle of innovation, now with decarbonisation objectives. A cycle of about 25 years is foreseen to transform the in- dustry, so that it is much more efficient and, through the circular economy, it is possible to decouple economic growth from the use of fossil energy and natural resources, and develop climate-neutral product markets. The President of the Commission has called for a "new Bauhaus" to reactivate industrial design and architecture in a way that serves the new social rationality implied by climate objectives. 3. EXTERNAL IMPLICATIONS OF THE GREEN DEAL: CARBON TARIFF AND SUSTAINABLE FINANCE Achieving climate neutrality and net zero emissions will require a sharp increase in the price of carbon, internalising its environmental costs. This will have to be achieved, in particular, through the strengthening of the Emissions Trading System (ETS) that the Com- mission has proposed in the Fit for 55 Legislative Package of April 2021. This scheme ap- plies to the sectors with the highest emissions (energy, steel, cement plants, paper mills, petrochemicals, other large industrial installations, and internal flights in the EU), which account for 40% of total Union emissions. Strengthening the ETS, however, poses a high risk of "carbon leakage". The increase in the price of carbon via emission allowances, and the demand for greater investment in clean technologies can damage the competitiveness of the European economy, and make the ETS ineffective for decarbonisation purposes if carbon-intensive European production is replaced by imports from countries where similar systems do not exist, or industrial off- shoring is encouraged to escape these costs. This could encourage environmental dumping and destructive downward competition from other countries, contrary to the collective effort required by the Paris Agreement. In addition, if this damages employment and social cohesion, it can feed discourses of grievance from the far right and other political actors 5554 against the Green Deal and the EU itself, as the "yellow vests" in France or the reactions of the governments of Hungary or Poland have already shown. That is the foundation of one of the most important singular elements of the European Green Deal: the "carbon tariff" at the EU's external borders, or " carbon border adjustment mechanism" (CBAM). That levy, to be set in 2023, internalises environmental costs, level- ling the playing field for European businesses – indeed, supported by the business sectors concerned – and may encourage ETS-like schemes in other countries and/or on a global scale. Additionally, the CBAM is considered as one of the new taxes or "own resources" of the EU, to finance Next Generation EU. It will help companies to remain in Europe and not relocate production, and may even induce on-shoring movements. This rate is part of a broader dynamic of deglobalisation and is also part of the industrial or reindustrialisation policy that the Green Deal incorporates. To determine the appropriate option and its compatibility with the rules of the World Trade Organisation (WTO), avoiding demands from other countries, the non-discriminatory na- ture of the CBAM must be ensured. The extension of the ETS is the one that seems most feasible to respond to this requirement (Alloisio, 2020; Schwarcz, 2021). However, the fact that it is conceived as a source of tax revenue, as well as a climate instrument, makes it likely that it will be challenged before that organisation and that the EU will be accused of protectionism (Beattie, 2019). For this reason, the European Commission has raised the need to multilateralise these mechanisms with a global carbon rate agreed in the WTO, or with mechanisms analogous to the ETS in key countries, with a "carbon club" or a "climate club", and only in those cases could the CBAM be avoided. The CBAM will most affect countries that export steel, cement and aluminium, petro- chemicals or fertilisers to the EU, in particular Russia, China, Turkey, the United Kingdom, South Korea, India and the United States. Its negative effects in Latin America will be around 1% of its exports to the EU, but will be significant in the case of Brazil or Colombia, while countries with different export basket and better environmental standards, such as Chile, Uruguay or Peru, may register positive effects (UNCTAD, 2021). The CBAM can also be seen as an incentive for greener growth (Iribarren and de la Cruz, 2021). A second element with external implications is the so-called "Environmental, Social and Corporate Governance Taxonomy" (ESG). As mentioned, the EU is also a pioneer in the regulation of sustainable finance, through the first ESG taxonomy. The EIB was also the issuer of the world's first "green" bonds, and in social matters, of social bonds to finance the SURE instrument adopted in 2020 to support unemployment insurance and support for companies in the COVID-19 crisis. The latter, which were in great demand among in- vestors, are one of the first and largest issues of social bonds so far. Because of its pioneering nature, its wide coverage, and its application in the EU's vast internal market, ESG taxonomy can become a de facto global standard for green invest- ing, risk assessment and ratings, and the design of standards adopted in other countries. It can also help expand the use of the euro as the world's reserve currency through green bond issuances. 56 That potential to define a global standard also exists in the CBAM, which like the ESG tax- onomy, shows the characteristic "regulatory power" of the EU. This expression refers to its ability to set global standards based on the size of its internal market. Anu Bradford (2020, 2021) calls it the "Brussels effect", which, in essence, assumes that companies and authorities from other countries assume EU rules and standards in exchange for access to the European market. Something similar happens, for example, with the rules on data protection and pri- vacy in the digital field. This expresses the geopolitical role of the European Union as a global regulatory and regulatory actor, and its ability to influence through socio-economic interde- pendencies and technical standards, rather than as a traditional military or political power. In April and December 2021, following consultations with stakeholders and the scientif- ic community, the European Commission adopted, via delegated acts, the section of the taxonomy on energy and climate. The Commission's decision did not satisfy everyone by considering natural gas and atomic energy "sustainable", even temporarily. It was backed by Germany and other central European countries as a necessary transitional, low-emis- sion energy to leave coal and oil behind. Nuclear energy was defended by France as "clean" energy for not assuming carbon emissions. But for many Member States and environmen- tal movements, both energy sources, even if temporarily needed, could not be considered "green", and this, in addition, could undermine the international and European credibility of the ESG taxonomy since its inception. The rejection of some governments, and the an- nouncement of stricter national measures may also pose an added risk to the consistency and viability of that standard (Khan, 2022). 4. GREEN DEAL, CLIMATE DIPLOMACY, TRADE AND DEVELOPMENT AID The global nature of the climate emergency and the consideration of the environment and climate as global public goods places the goals of the European Green Deal with- in the framework of the EU's international cooperation and external relations. Promoting the ecological transition and greater ambition in the decarbonisation targets of the Paris Agreement must also be central goals of the Union's foreign and security policy. It means recognising the climate emergency as a source of global instability, a cause of local and regional conflicts, food insecurity, population displacement, and an "existential threat" to humanity as a whole (European Commission, 2019: 24). The Russian attack on Ukraine in February 2022 has dramatically highlighted the risks posed by the high dependence on gas from Russia by many member states, especially Germany (Poitiers et al., 2022), at a time of globalisation crisis and return of geopolitics to the international economy (Sanahuja, 2017; Pisani-Ferry 2021), and increasing use of interdependencies as weaponisation by authori- tarian leaders. The Green Deal envisages an important external dimension to guide the European Union's foreign and security policy, trade and development cooperation policy to promote sus- tainable development, contributing with its leadership to mobilising collective action and, in particular, supporting developing countries, given the initial asymmetries that exist in terms of greater European responsibility for global emissions, and also its greater resources 5756 and capabilities. Climate leadership was already part of the EU's international narrative and identity, but it is recognised that "leading by example" will require greater effort in the application of the principle of policy coherence for sustainable development, both in all its external policies and in the relationship between its external action and its internal policies (European Commission, 2019: 23). For example, in development cooperation, climate ob- jectives should account for 30% of external assistance in the 2021-2027 budget period, and together with EIB loans, fossil fuel projects should be abandoned and focus on renewable sources and efficiency improvements, and new investments in fossil energy projects in third countries will be discouraged. The Foreign Policy of the Green Deal entails, first of all, a more assertive climate diploma- cy in multilateral forums, and in interregional and bilateral relations, to establish "green alliances" that encourage greater ambition in the objectives of decarbonisation and climate neutrality. (Reiners and Grimm, 2020; Ribera, 2021). The EU must be a "constructive but also energetic partner", pursuing climate neutrality by involving other actors, but without renouncing to maintain the competitiveness of the European economy25. This action will also contribute to the EU's strategic autonomy to achieve its own objectives in a world of greater geopolitical competition (Sanahuja, 2021a). The Green Deal's decarbonisation and climate neutrality objectives entail profound chang- es in the EU's trade relations with many countries, particularly in its vicinity, with import- ant geopolitical implications. Important suppliers of oil and gas to the EU, such as Algeria, Azerbaijan, Kazakhstan or Egypt are in turn economies very dependent on these exports, both in their external balance and in their tax revenues, so the EU must support their pro- ductive and energy diversification, something to which technologies such as green hydro- gen or solar photovoltaic can contribute. With Russia, the attack on Ukraine may mean a rapid disconnection, the search for alternative suppliers of liquefied gas, and the acceler- ation of the energy transition to renewables, as already announced (Reuters, 2022). If the Union fails to associate other powers such as the United States or China in the decarbonisa- tion effort, it can encourage a rapprochement of the countries concerned with China, or of these with each other, as would happen with China and Russia, which would have import- ant consequences from the geopolitical point of view (Leonard et al., 2021). The proposal to multilateralise the Green Deal is also relevant in this context. So far, the steps taken by China and the United States point more to climate convergence and greater cooperation, but this is a major challenge to which the Union's foreign policy must pay attention. The Green Deal calls for combining trade openness, on which the Union's prosperity de- pends to a large extent, with stricter environmental standards. It implies, in other words, an approach to trade and investment with environmental and geopolitical principles that is different from the traditional liberal approach that the EU and, in particular, the European Commission has championed. It has already been pointed out that without CBAM and ESG standards, and without a tightening of labour and environmental standards, public opinion and parliaments may be reluctant to open trade. But in the face of developing countries, there 25. See the Council conclusions on climate diplomacy of 20 January 2020 (5033/20), and on climate and energy diplo- macy of 25 January 2021 (5263/21). 58 are asymmetries of power that cannot be ignored, and these rules can also be challenged as non-tariff barriers and a new "green" protectionism, which would seek to impose European principles and standards on the rest of the world. The EU will be able to make use of its regulatory power and the influence of the internal market, but it cannot act unilaterally and alienate support. Therefore, leading will mean greater political dialogue, strengthening de- velopment cooperation and, as noted, much more attention to policy coherence. These dilemmas are clearly raised in the WTO, and even more clearly in the association agreements of the EU and other countries. This is the case of the debates on the EU-Mercos- ur Agreement and deforestation in the Amazon. It is not acceptable to appeal to legitimate environmental arguments with unconfessed protectionist purposes when challenging that agreement, as France does. But the fact that there is covert protectionism does not mean that these environmental objections do not have to be addressed. Part of the European citi- zenry refuses to associate the EU with governments like that of Jair Bolsonaro, who rejected the Paris Agreement and despises environmental issues. For the agreement to be politically acceptable in the EU, its environmental safeguards will need to be strengthened. Like other state-of-the-art agreements, this one includes a very advanced chapter on trade and sustain- able development, but it is sufficient. When approved, the European Green Deal itself raised the need to add to any global trade agreement a binding commitment to the ratification and effective implementation of the Paris Agreement, as an environmental clause analogous to the democratic clause that since the nineties, in a mandatory manner, is included in all EU agreements with third countries (Giles 2021; Sanahuja and Rodríguez, 2021). Beyond these binding commitments, and the possibility of adopting trade sanctions in the event of non-compliance, it is necessary to contemplate these agreements with a broader view. They should not be seen as mere free trade agreements. They have a marked geopo- litical character: they are tools for the strategic autonomy of the EU and its partners in the face of the crisis of globalisation and a supposed bipolarity between the United States and China, and, in terms of sustainable development, they should also be seen as a common space for policy dialogue and regulatory convergence for the change of production and consumption models in favour of sustainability. 5. FINAL COMMENTS: GLOBALISATION CRISIS AND GREEN DEAL, A CROSSROADS FOR EUROPE Since the global financial crisis of 2008, the EU has faced a series of crises that are part of the broader crisis of globalisation and the liberal international order (Sanahuja, 2017). The euro crisis revealed the origin flaws of the monetary union and its ordoliberal design. The self-destructive "expansive austerity" policy of that stage induced a vicious circle of recession and questioning of the EU and its policies, led to a visible setback in its social and territorial cohesion, aggravated disaffection, nationalism and Euroscepticism, distrust of the elites and the rise of the far right. All this, as a reaction to the uncertainty and fear of European societies in the face of the effects of globalisation, immigration and technological change on employment, social protection, and opportunities for the next generation. 5958 Various reflection exercises, and the Juncker Commission's call for "a Europe that protects", had not led to an articulated EU response to these challenges and to social demands that, taken together, pointed to the need to rebuild the social contract. The no less important ad- vance of the green parties and the assumption of the environmental agenda by the majority parties also showed that this new social contract required a more decisive policy in the face of the climate emergency. As for the international order, the challenge to multilateralism and the growing economic nationalism of the Trump administration and other nationalist and far-right actors, its evident contempt for the EU, and the greater geopolitical compe- tition were pushing the EU to leave behind its traditional cosmopolitan approach to glo- balisation, in favour of a more circumspect and defensive vision of the international order. Since 2019, as underlined, the EU has sought to react through two interrelated axes: the Eu- ropean Green Deal and the search for greater "strategic autonomy". On the latter, the initial approach was limited to foreign and security and defence policy, but the new international scenario and the COVID-19 pandemic have promoted a broader definition that covers, among other issues, energy, digitalisation or industrial policy, with the financial support of the Next Generation EU reconstruction plan. This paper has highlighted the systemic nature and transformative vocation of the Euro- pean Green Deal once the EU recognised the climate emergency as such. It leaves behind the technocratic and sectoral approach to environmental and climate policy to become the economic and social matrix of the EU as a whole. It is based on a great political pact be- tween social democrats, centre-right, liberals and greens based on the assumption of the environmental agenda and its call to defend the common, until a few years ago located on the margins of the dominant political and economic debate, and a renewed commitment to the fight against inequality and the protection of society, that would otherwise be left in the hands of the far right. It will also be a linchpin of the Union's foreign and security policy, promoting energy security, and will shape its international identity, and its relations with the world. Explicitly, the European Green Deal means the return of industrial policy and a greater role for the public sector in leading innovation and change. It defines strategies for re- newable energies and their storage, digital technologies or the automobile, encouraging electromobility. With this, the EU assumes that the global political economy had entered a new phase of deglobalisation and retreat from production chains, motivated by both technological change and geopolitical reasons. It opts for productive reconversion and a strategy of growth and job creation that, without renouncing exports, will be more focused on the market itself. In this area, the Green Deal also converges the EU's aspira- tions for strategic autonomy. In terms of sustainable finance, the previous European Green Deal integrates elements present in the progressive proposals of the Green New Deal on defunding and boosting productive investment, employment and the "just transition", giving a key role to public finances. However, there is a risk that this strategy will involve the funding of sustainable development and the energy transition, with the State in a subsidiary role as guarantor and risk reducer of private investment. 60 As the axis for the reconstruction of the social contract, the Green Deal poses difficult di- lemmas. It will entail asymmetric costs between countries, regions and social groups; it affects key aspects of citizens' daily lives, such as employment, consumption patterns, mo- bility and living habits, which need to change to ensure that the 1.5°C target is achieved. It reconfigures the contours of the public, the private, and the common good. The distri- bution of these costs, the way to deal with them, and the societal changes that the Green Deal entails will be the subject of dispute and social and political confrontation. From these disputes a new green or social consensus may emerge, of broad spectrum, or they will be politicised and contested by nationalist and far-right forces, subjecting the European proj- ect to strong tensions (Leonard, 2019; Buras, 2020) The interaction of the globalisation crisis, the climate emergency and the coronavirus pan- demic represent what in historical sociology is called a critical juncture. That is, a moment of crossroads, in which the historical evolution opens up in multiple possibilities and social forces struggle to define the possible futures. The Green Deal is not an ecosocialist project, but neither can it be dismissed as a strategy of "transformism" for a "green" facelift of neoliberalism. Ninety years ago, the New Deal rebuilt capitalism and democratic societies with social pacts between capital and labour previously unprecedented. The Green Deal can extend those pacts to the planet and thereby extend to future generations. Finally, as dramatically manifested by the Russian attack on Ukraine and the EU's high de- pendence on Russian gas, decarbonisation and strategic autonomy are inextricably linked issues. In part, Germany's strategic turn and the geopolitical awakening of the Union, be- yond the COVID-19 pandemic, responds to the realisation that what were considered risks have become realities following the Russian aggression against Ukraine on 24 February 2022. The extraordinary deployment of sanctions and other measures against Russia in the days following the invasion is also a sign of its relevance and material and symbolic capac- ity, insofar as it gives rise to a renewed narrative regarding the construction of Europe, its importance for citizens, and the place of the EU in the world. 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