Nathalie Tocci played a pivotal role in shaping EU foreign policy under Federica Mogherini. Getty Images
Nathalie Tocci played a pivotal role in shaping EU foreign policy under Federica Mogherini. Getty Images
Nathalie Tocci played a pivotal role in shaping EU foreign policy under Federica Mogherini. Getty Images
Nathalie Tocci played a pivotal role in shaping EU foreign policy under Federica Mogherini. Getty Images

Nathalie Tocci returns to steer EU’s global ambitions as foreign policy special adviser


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The European foreign policy stalwart Nathalie Tocci has returned to Brussels' corridors of power as a special adviser to the bloc’s chief diplomat, Josep Borrell.

Ms Tocci, who played a pivotal role shaping European foreign policy under Mr Borrell’s predecessor, Federica Mogherini, has taken the post as the EU faces its greatest external challenges since its inception.

Around the world, Brussels is grappling with entrenched problems that have been exacerbated by the onset of the coronavirus pandemic.

In the Middle East, the EU is still co-ordinating its response to conflicts in Libya and Syria and, as the US increasingly retreats from the region, many hope that Brussels will fill the void left by Washington over Iran and in the Palestinian-Israeli conflict.

When he took over from Ms Mogherini as high representative for foreign policy last year, hopes were high that in Mr Borrell, a tough-talking Spanish socialist, would give the EU one voice. In his first speech he spoke of Europe needing to learn the “language of power”.

The JCPOA was an agreement between Iran, the permanent UN Security Council members and Germany. AP Photo
The JCPOA was an agreement between Iran, the permanent UN Security Council members and Germany. AP Photo

Ms Tocci’s appointment shows the extent of continuity between the two commissioners for foreign policy.

While the director of Italian Istituto Affari Internazionali (IAI) formally accepted the special position with Mr Borrell framing global strategy at the end of last week, she is understood to have been giving him advice on a regular basis in the months since he was appointed to the European Commission.

Ms Tocci has a specialist knowledge of Europe's fringes, particularly of Turkey and Cyprus, and is also known to have a first-rate understanding of the specifics of EU foreign policy, authoring Framing the EU Global Strategy under Ms Mogherini in 2017.

More recently she has been deeply critical of the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA).

Under the 2015 nuclear deal with Iran, Tehran agreed to give up its nuclear weapons programme in exchange for sanctions relief. The US withdrew from the deal under US President Donald Trump in 2018.

European Union's former high representative for foreign policy, Federica Mogherini, at the EU headquarters in Brussels in November 2019. AFP
European Union's former high representative for foreign policy, Federica Mogherini, at the EU headquarters in Brussels in November 2019. AFP

In newspaper articles she has railed against the US move on the nuclear deal and renewed calls for the EU to reach out to Tehran following the assassination of Iranian commander Qassem Suleimani earlier this year.

Ms Tocci has also been criticised for calling media reports of popular protests against the Iranian regime in 2017 and 2018 were overhyped. These statements received renewed scrutiny earlier this year when it was revealed the think tank head had accepted a position on the board of the Italian energy company Eni.

Before key decisions by Germany and France, the two EU members of the UN Security Council, on whether to support a US-backed extension of the Iran weapons embargo, Mr Borrell has continued his support of the JCPOA.

The end of the arms embargo, a guarantee of the nuclear deal scheduled for October, is one of the few face-saving benefits of the agreement to which Iran has been able to cling since the US withdrawal. Europe’s inability to block an extension would be another body blow to the 2015 accord.

Palestinian women chant slogans and flash the victory sign as they demonstrate against Israeli plans for the annexation of parts of the West Bank, in Gaza City, Wednesday, July 1, 2020. AP Photo
Palestinian women chant slogans and flash the victory sign as they demonstrate against Israeli plans for the annexation of parts of the West Bank, in Gaza City, Wednesday, July 1, 2020. AP Photo

Speaking at an online conference hosted by the Italian Institute for Political Sciences, Mr Borrell credited the deal with stopping Iran from developing weapons.

“Without this deal, Iran could have gone nuclear right now. Right now, Iran would be a nuclear power, having another factor of instability in a region that doesn't need more instability. Frankly I am convinced that we need to preserve this deal,” he said.

The EU foreign policy chief said he hoped a potential new administration in Washington, following US elections in November, would consider repositioning itself on the JCPOA after other signatories to the deal had failed to make Iran whole on sanctions relief.

“We also have to fulfil our agreement. We cannot say Iran must go back to full compliance if the economic side is not being at all fulfilled,” he said. “I hope a new hypothetical administration will consider the alternatives.”

Another ticking clock for the EU is the prospect of the Israeli annexation of parts of the West Bank.

While Israel has shelved initial plans to extend sovereignty over settlements in the Palestinian territory, effectively killing a two-state solution to the conflict, experts believe Israel's government will press ahead with the plans in the coming weeks or months.

“We are trying to use all of our diplomatic engagement and capabilities in order to convince the Israeli government not to take this decision because it would be counterproductive,” Mr Borrell said.

“I don't want to anticipate anything. I don't want to start threatening anyone but I have to say clearly that it will affect the European Union's relations with Israel,” he added.

The foreign ministers of 11 EU nations have pressed Mr Borrell to present options for the legal consequences of sanctions.

Speaking at a talk hosted by Israeli think tank Mitvim at the end of June, Ms Tocci outlined what would guide the EU’s response to annexation.

“On the economic front, the most obvious consequences would be restrictive measures and these would depend on what sort of annexation would take place and its immediate repercussions,” she said.

Ms Tocci said that legal measures could include revisiting arrangements such as Horizon Europe, the EU’s scientific partnership with Israel, as well as implementing different marketing standards for produce originating from Israel and the Palestinian territories.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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