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Geopolitical Monitoring Report | July 28, 2022

by | Jul 28, 2022 | Blog

Europe & Eurasia | European Union/Russia

 

EU deal to reduce consumption highlights divisions within the bloc: DW

 

Background:

The deal agreed upon by the energy ministers of European Union member states will result in members voluntarily reducing their natural gas consumption by 15 percent amid Russia’s continuing shipment cuts to the continent. These shipment cuts are part of Moscow’s growing campaign to use its energy and agricultural resources to pressure countries into either ending support to Ukraine amid the ongoing Russian invasion. However, individual EU member states will be using “measures of their own choice” to reduce their gas usage unless either five countries declare a gas emergency or the European Council – which is made up of the governments of member states – directs the European Commission to mediate such cuts.

The European Commission’s original plan would have allowed the European Commission to mandate gas rationing throughout the bloc unilaterally, which would enable a more rapid and unified response to further Russian gas flow cuts. Germany – the EuroZone’s largest economy – is heavily reliant on shipments of Russian gas for its export-oriented manufacturing economy and the country will likely slip into a recession as gas flows continue to decline. For example, the world’s largest chemical manufacturer BASF announced that it would be cutting production due to the gas shortages on 27 July. German Economy Minister Robert Habeck has stated that Russian efforts to weaponize natural gas flows as way to prevent continued support to Ukraine will not divide the European Union, but rising costs and declines in economic output prompted by possible gas shortages are threatening to create political backlash on the national level that could work to undermine the newly minted agreement.

Impact:

The economic fallout from the Russian invasion of Ukraine has already contributed in-part to French President Emmanuel Macron losing his parliamentary majority and has led to the resignation of Italian Prime Minister Mario Draghi after his fragile ruling coalition collapsed. The news of Draghi’s resignation, in particular, was almost certainly welcomed in Moscow, due to the now-former prime minister’s consistent support of Ukraine. Current opinion polling suggests that the new Italian elections – which will be held in either August or September – are likely to result in a hung parliament with a plurality of parties likely supporting cuts to Ukraine aid. The Italian elections – as well as elections in other European countries whose government’s collapse due to possible economic fallout from Russia’s widening commodities war – will be appealing targets for nation-state backed advanced persistent threat actors looking to influence the results. While Russia will most likely take the greatest interest in the Italian and other potential European elections, other countries may also attempt to influence the outcome.

Gas cut offs leading to political and social instability is also apparently a concern in Germany as well, judging from comments made by Foreign Minister Annalise Baerbock when she was discussing Canada’s reluctance to return a gas turbine to Russia. Baerbock stated that if the part was not returned to Russia, then Germany “won’t get any more gas, and then we won’t be able to provide any support for Ukraine at all, because we’ll be busy with popular uprisings.” Baerbock quickly walked back these comments when pressed – claiming that she was simply exaggerating – and the German Ambassador to Canada contacted media in the country to say that Berlin had never threatened to cut off aid to Ukraine. However, despite Canada relenting and returning the turbine, Russia has continued with cuts to gas shipments and has likely been emboldened to continue this policy based on Baerbock’s comments that continued gas shipment cuts will result in Berlin cutting critical arms shipments to Ukraine.

If the gas cuts do eventually plunge Europe into a deep recession, the resulting economic turmoil may result in backlash against hedge funds, financial institutions, major oil companies, and other large companies that may be perceived as either causing or benefitting from the downturn. These threats could either manifest themselves as direct threats to company leadership or through demonstrations/civil unrest near their offices and facilities. There is also the persistent threat of Russian-backed threat actors launching cyber attacks against pipelines, grain mills, and other commodities-linked infrastructure with the aim of causing further disruptions in these sectors.

Mitigation:

Social media and other online media platforms should monitor for coordinated inauthentic behavior aimed at influencing the outcomes of elections in Italy and other European countries that may have snap elections in the event of an economic downturn that stems from Russia’s widening commodities war.

While Russian-linked advanced persistent threat actors will be the most likely to engage in such activities, but any nation-state backed group that has previously engaged in election interference campaigns in the past are almost certain to do so in the future.

Companies – especially those in industries that may face widespread public backlash in the event of an economic downturn – should monitor the political situation in the countries they operate or have staff located in for potential protests and unrest in the event of severe economic recession prompted by additional Russian gas cuts. These organizations – especially those that may be required to lay off or furlough staff – should take care to ensure that the personal information of their executives is not publicly available on the regular or dark web due to the potential of threat actors using such information to target them. Finally, companies should mitigate potential cyberthreats by considering an investment in external attack surface monitoring and analysis.

About Nisos®

Nisos is The Managed Intelligence Company™. Our services enable security, intelligence, and trust and safety teams to leverage a world-class intelligence capability tailored to their needs. We fuse robust data collection with a deep understanding of the adversarial mindset delivering smarter defense and more effective response against advanced cyber attacks, disinformation, and abuse of digital platforms.

Table of Contents

Europe & Eurasia

Background

Impact

Mitigation

 

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