1 Regional Situations in Europe

(1) European Union (EU)

The EU is a political and economic entity consisting of 28 member states with a total population of about 510 million. Sharing fundamental values and principles, the EU is an important partner for Japan in addressing global issues.

(Recent Developments of the EU)

For the EU, 2017 was a year of addressing problems through efforts that included engaging in Brexit negotiations and taking steps to deal with immigrant and refugee influx, as well as terrorist attacks. It was also a year that saw the EU try to further discuss the future of Europe in light of a better EU economy and continuing pro-EU administrations after the elections in the major EU member states.

Regarding Brexit, the UK submitted the notification of its intention to withdraw from the EU on March 29. Subsequently, a total of six negotiations focused primarily on the three main issues (citizens' rights, financial obligations, and the border issues with Ireland) were conducted as a part of the first phase of Brexit negotiations. Although these negotiations did not lead to agreements, top-level negotiations were accelerated shortly before the European Council meeting in December. Eventually, “sufficient progress” of the first phase negotiation was acknowledged by the Council, and thus they entered the second phase during which topics such as the transition period and the future UK-EU relations would be discussed.

Regarding the immigrant and refugee influx into Europe, as a result of efforts to address immigrant and refugee flows from Africa to Italy via Mediterranean Sea routes while maintaining the EU-Turkey statement made in March 2016, the number of arrivals in Italy decreased dramatically starting in the summer of 2017. This contributed to an overall drop in the number of arrivals into Europe. However, little headway was made in formulating a new immigration policy aimed at distributing the burden placed on EU member states such as asylum seeker relocation. 2017 was also a year of frequent terrorist attacks in multiple major cities in Europe, making counter-terrorism measures a continuing priority. At the same time, the rise of populism and similar movements continued in certain EU member states. For example, in Germany among major member states, the populist party achieved a considerable vote share increase in the national election held in 2017.

During his State of the Union address in September, and in light of pro-EU administrations holding power in major countries' elections and general upswings in European economies, European Commission President Juncker expressed his intention to further strengthen solidarity within Europe. In this way he showed an attitude toward seeking further European integration by addressing the crisis on European integration, thus advancing discussions concerning the future of Europe.

Economic and social cooperation takes the lead in promoting European integration, but a new plan for bolstering security-related cooperation deserves more attention. One such measure is the establishment in June of the European Defence Fund, which seeks to streamline defense equipment spending. December saw the launch of the Permanent Structured Cooperation (PESCO), a defense cooperation framework provided for in the Treaty on European Union. PESCO aims to improve joint defense capabilities and make investments in joint projects as well as enhancing the EU's operational readiness and each member state's contribution to defense. Efforts also continue to be made to strengthen cooperation with NATO.

With respect to Asia, the EU expressed its intent to continue strengthening involvement in the region in line with the Global Strategy formulated in 2016. In response to the repeated nuclear tests and ballistic missile launches by North Korea, the EU decided to introduce autonomous measures against North Korea at the Foreign Affairs Council on October 16.

On the economic front, amid uncertainty over Brexit and other issues, a moderate economic recovery was seen in 2017 in the EU and Eurozone on the back of a moderate recovery in the global economy, a rise in consumer spending, better unemployment rates, and other factors.

(Japan-EU Relations)

Through the finalization of the negotiations of the Japan-EU Economic Partnership Agreement (EPA) and other such achievements, significant progress was made in 2017 towards comprehensively strengthening Japan-EU relations. The first such achievement was a March Japan-EU Summit in Brussels, Belgium, where Prime Minister Abe made a visit to hold talks with European Council President Tusk and European Commission President Juncker. This was followed by a Summit in May that coincided with a G7 Summit held in Taormina, Italy. At the 24th Japan-EU Summit held in Brussels, Belgium in July, both leaders reached an agreement in principle on the Japan-EU EPA and Japan-EU Strategic Partnership Agreement (SPA), and they also agreed to work together on the issues concerning North Korea. At each of these talks, Prime Minister Abe consistently requested that transparency and predictability in the Brexit process be ensured in consideration of the possible impact on Japanese business activities. Close talks were also held between the ministerial levels in 2017: Foreign Minister Kishida attended the Japan-EU Foreign Ministers' Meeting that coincided with the G7 Foreign Ministers Meeting held in Lucca, Italy in April, while Foreign Minister Kono held his first talk with High Representative of the European Union for Foreign Affairs and Security Policy Mogherini in September on the occasion of the UN General Assembly.

On the economic front, closing discussions were held following an agreement in principle of the Japan-EU EPA in July. Foreign Minister Kono held a telephone talk with European Commissioner for Trade Malmstrom on December 8. On the same day, Prime Minister Abe and European Commission President Juncker held a summit telephone talk and confirmed the finalization of negotiations on the EPA.

24th Japan-EU Summit (July 6, Brussels;　Photo: Cabinet Public Relations Office)

(2) United Kingdom

Following the result of a referendum conducted in June 2016, Prime Minister May issued a notification of the UK's intention to withdraw from the EU on March 29, 2017. Following Prime Minister May's dissolution of the parliament and the subsequent general election held in June, the Conservative Party, while holding onto its status as UK's largest party, lost seats and failed to win a majority of seats on its own. After the election, she made the decision to stay on as Prime Minister, and her Conservative Party made a confidence and supply agreement with the Democratic Unionist Party, a regional political party of Northern Ireland, to engage in extra-cabinet cooperation. Meanwhile, the election saw a gain in seats for the Labor Party, a result that led to Mr. Corbyn, the leader of the party and radical left-wing MP, gaining stronger support within his party at a party conference in September. Additionally, a spate of scandals prompted cabinet resignations of Secretary of State for Defense Fallon and Secretary of State for International Development Patel in November and of First Secretary of State Green in December, leading to a cabinet reshuffle in January 2018.

Both Japan and the UK have strengthened the bilateral relations through policy cooperation and mutual exchange at various levels, including Summit and Ministerial Meetings. Prime Minister Abe visited the UK in April for the Japan-UK Summit Meeting with Prime Minister May at Chequers, the official country residence of the British Prime Minister. The two leaders also had a bilateral summit meeting at the G20 Summit in Hamburg, Germany in July. In August, Prime Minister May paid an Official Visit to Japan for another round of a Japan-UK Summit Meeting. In the meeting, the two leaders issued the “Japan-UK Joint Vision Statement,” “Japan-UK Joint Declaration on Security Cooperation,” “Japan-UK Joint Declaration on Prosperity Cooperation” and “Joint Statement on North Korea,” and shared understanding for further elevating the level of Japan-UK cooperation with focuses on security, economic partnership and global prosperity and growth.

Foreign Minister Kishida and Secretary of State for Foreign and Commonwealth Affairs Johnson had a Foreign Ministers' Meeting during the G20 Foreign Ministers' Meeting in Bonn, Germany in February. This was followed by another meeting in April on the occasion of the UN Security Council Ministerial Briefing on Non-proliferation and the Democratic People's Republic of Korea in New York. In July, Secretary Johnson visited Japan and the two ministers had the Sixth Japan-UK Foreign Ministers' Strategic Dialogue. New Foreign Minister Kono, who assumed office in August, had a Foreign Ministers' Meeting with Secretary Johnson on the occasion of the UN General Assembly in September. In December, they also had another meeting in the UK.

Recent years, security and defense cooperation between Japan and the UK have significantly developed. The Japan-UK Joint Vision Statement, which was issued during Prime Minister May's Official Visit to Japan in August, states that Japan and the UK are “each other's closest security partners in Asia and Europe respectively” and that the two leaders are “committed to elevating our global security partnership to the next level.” Following this, at the Third Foreign and Defense Ministerial Meeting (“2+2”) held in London in December, the four Ministers confirmed the approach for taking Japan-UK security and defense cooperation to the next level and issued a joint statement. Discussions were also held on advancing comprehensive cooperation in such security fields as realizing the free and open Indo-Pacific region sharing views and strengthening coordination on regional affairs, joint exercises, defense equipment and technology cooperation as well as counter-terrorism. Regarding defense equipment and technology cooperation, the Joint Preliminary Study on Potential Collaborative Opportunities for Future Combat Air System/Future Fighter was launched in March. In May, the first joint exercise by Japan, the UK, France, and the U.S. was conducted in the sea around Japan and Tinian Island, Guam. Furthermore, in August, the Japan-UK Acquisition and Cross-Servicing Agreement (ACSA) entered into force.

(3) France

The presidential elections were held from April to May in France and presidential candidate Macron who advocated the rallying of right and left wings which would go beyond the traditional framework of two-party politics, defeated far-right party leader Le Pen, and was elected as the eighth president of the French Fifth Republic. In the subsequent parliamentary elections in June, La République en Marche (LREM), a centrist party led by President Macron, had won a majority of seats and Prime Minister Philippe's cabinet was formed. Additionally, in September, the senate elections (election of the half members) were held.

In respect of domestic affairs, President Macron undertook labor market reforms to address the long-standing unemployment issue. Additionally, an administrative order (ordonnance) concerning the revision of the labor law was agreed by the Council of Ministers in September. Regarding counter-terrorism, France lifted on 1st November the state of emergency that had been effective since the consecutive terrorist attacks in Paris in November 2015. In place, they have been dealing with the threat of terrorism by enacting a new bill that grants the government authority some part of the extensive powers approved exceptionally during the state of emergency. Regarding the financial aspect, France has been taking measures toward fiscal reforms to keep its budget deficit below 3% of GDP as required for EU member states. Concerning external affairs, they prioritize the stabilization of the Middle East and Africa as well as climate change issues. In that respect, France hosted the One Planet Summit in Paris in December, which Foreign Minister Kono attended. Furthermore, France has placed high priority on the framework of multilateral cooperation in this multi-polarizing world, and they have been taking leadership in European integration for example by announcing a vision of introducing the common budget for the euro zone.

With respect to the Japan-France relations, the Third Foreign and Defense Ministerial Meeting (“2+2”) was held in Paris in January, and the four ministers confirmed to commence negotiations of the Acquisition and Cross-Servicing Agreement (ACSA). They also confirmed that they would concretize the cooperation regarding unmanned underwater vehicle (UUV) for mine detection as the first collaboration project under the Agreement concerning the Transfer of Defence Equipment and Technology between Japan and France that entered into force in December 2016. Joint exercises by Japan, France, the UK and the U.S. were conducted in the sea space around Japan and Guam between April and May on the occasion of the visit to Japan of a French training task group “Jeanne d'Arc.” In March, Prime Minister Abe visited France and had a Summit Meeting with President Hollande. In May, Prime Minister Abe had the first Summit Meeting with the new President Macron at the G7 Summit in Taormina, Italy. In the meeting they confirmed cooperation toward “Japonism 2018,” which will be held mostly in Paris in 2018. Subsequently, they had another Summit Meeting in September at the UN General Assembly. Regarding Foreign Minister Kono, he had a Foreign Ministers' Meeting with the new Foreign Minister Le Drian. In January 2018, moreover, Foreign Minister Kono attended the Fourth Japan-France Foreign and Defense Ministers' Meeting (“2+2”) as well as Seventh Japan-France Foreign Ministers' Strategic Dialogue. In the above occasions he welcomed the agreement in principle of the Japan-France ACSA and confirmed with the French side that a Japan-France joint exercise would be conducted when French naval frigate “Vendemiaire” visits Japan.

(4) Germany

As the international community faces various issues such as Brexit, the Ukrainian crisis, and the refugee crisis, Germany hosted the G20 Hamburg Summit in July 2017 as the chair country. Along with leading the release of the Hamburg G20 Leaders' Statement on Countering Terrorism in the capacity of the chair country, Germany ensured commitments from each country towards international cooperation to strengthen global economic growth and safeguard against downside risks.

Germany's economy maintained gradual recovery. The Federal Government of Germany predicted a real GDP growth rate of 2.0% in 2017 and announced that its unemployment rate in November was 5.3%, the lowest level since 1991.

In domestic affairs, former Foreign Minister Steinmeier was elected as the 12th Federal President of Germany, succeeding President Gauck, whose term ended in March 2017. A German Federal election, which takes place every four years, was held in September. While political leaders of other countries, including the major EU member states, had been replaced, there was high expectation that Chancellor Merkel, who had stably managed the government, would stay in the office. Although the ruling Christian Democratic Union (CDU/CSU) preserved its position as the largest party, its share of the vote fell to its second lowest level ever since the World War II, and the percentage of votes going to the Social Democratic Party of Germany, a partner in the grand coalition, sank to its lowest level in history. Meanwhile, “Alternative for Germany (AfD),” which has promoted an anti-refugee policy, made a leap forward to become the country's third largest party in the double-digit share of the vote and won seats in the Federal Parliament for the first time by attracting voters tired of and unsatisfied with current politics. The Free Democratic Party (FDP) resumed its seats in the Parliament for the first time in four years.

After the election, as SPD refused to continue to be a partner of the grand coalition with CDU/CSU, CDU/CSU began preliminary discussions aiming at establishing a coalition with the FDP and the Green Party, which came to an impasse when the FDP announced that it would be withdrawing from the discussions. Subsequently, in January 2018, after the mediation efforts by President Steinmeier, CDU/CSU and SPD began coalition negotiations that led to an agreement in February.

Subsequent to 2016, high-level visits were made between Japan and Germany in 2017. Foreign Minister Kishida visited Bonn, Germany in February to attend the G20 Foreign Ministers' Meeting. In March, Prime Minister Abe visited Hanover, Germany to attend the CeBIT trade show, for which Japan became the partner country. At the event, Prime Minister Abe and Chancellor Merkel visited the booths of Japanese and German telecommunications companies. They also held a Summit Meeting that led to agreement between the two leaders on the importance of making the G7 more united than ever and demonstrating unwavering cooperation and commitment on the security and economic fronts. In February 2018, President Steinmeier held a Summit Meeting with Prime Minister Abe in Japan.

(5) Italy

Italy held the G7 presidency in 2017, taking over the role from the former year's president: Japan. Numerous Japanese high-level officials visited Italy to attend the G7 Summit in Taormina and 13 Ministerial Meetings. In March, Prime Minister Abe visited Rome and had a Summit Meeting with Prime Minister Gentiloni. In the Meeting they confirmed close cooperation as the current and former chairs of the G7 Summit. In May, Prime Minister Abe visited Sicily to attend the G7 Summit. Foreign Minister Kishida visited Lucca (located in Toscana, Central Italy) to attend the G7 Foreign Ministers' Meeting in April. On that occasion, he had a Foreign Ministers' Meeting with Italian Foreign Minister Alfano.

The two countries are steadily developing bilateral cooperation in the fields of security and defense. In the Japan-Italy Summit Meeting in March, the two leaders confirmed that both countries would start negotiations on an Agreement on the Transfer of Defense Equipment and Technology. The Agreement was later signed by Foreign Minister Kishida and Defence Minister Pinotti in Tokyo in May.

In respect of domestic affairs, Prime Minister Gentiloni has steadily managed the administration since his inauguration at the end of 2016. Regarding the electoral law which had been an long-standing issue for Italy, both the Chamber of Deputies and Senate passed a reform bill which was later put in force in November.

(6) Spain

In 2017, active high-level visits between Japan and Spain were realized. In April, Their Majesties King Felipe VI and Queen Letizia of Spain paid a State Visit to Japan. On this occasion, Foreign Minister Kishida had a Ministers' Meeting with Foreign Minister Dastis, who was accompanying Their Majesties, and signed the Japan-Spain Working Holiday Scheme Agreement. In July, Parliamentary Vice-Minister for Foreign Affairs Takisawa visited Barcelona and Madrid and exchanged views with individuals affiliated with local Japanese businesses. Additionally, he had a meeting with State Secretary for Foreign Affairs Castro. In October, the 19th Japan-Spain Symposium was held under the title of “The Fourth Industrial Revolution and Globalization: Dialogue between Japan and Spain” in Malaga, Spain.

In respect of domestic affairs, the Spanish Constitutional Court ruled illegal the Catalan independence “referendum” in October. The Spanish Government implemented measures, including the dissolution of the Regional Parliament of Catalonia, based on its Constitution.

(7) Ukraine

In eastern Ukraine, although the cease-fire agreements at the end of August and the end of December made temporary improvements in the situation, conditions remain unstable due to factors that include the death of an OSCE Special Monitoring Mission member in April. Since January, the distribution between regions controlled by the Ukrainian Government and temporarily occupied regions has stopped, and the economic blockade of the temporarily occupied territories continues until now. Meanwhile, no significant progress has been achieved in talks over implementation of the Minsk Agreements among the nations concerned.

In foreign affairs, the Association Agreement with the EU that includes the Deep and Comprehensive Free Trade Area (DCFTA) came into force in September. Ukraine has engaged in active diplomatic efforts through discussions and mutual visits between Ukraine and the U.S., Europe, and neighboring countries, including two Summit telephone talks under the Normandy Format², as well as through multilateral talks in the UN and other organizations.

In domestic affairs, some positive results were achieved with respect to judicial, healthcare, pension, election law, and other reforms under the leadership of Groysman's cabinet, which was formed in April 2016. However, due to differences of positions among the domestic political powers regarding the anti-corruption measures, there remain the issues that have yet to be addressed.

In terms of relations with Japan, in recognition of 2017 as being the Year of Japan in Ukraine, many events related to Japan were held throughout the country to commemorate the 25th anniversary of the establishment of diplomatic relations between Japan and Ukraine, including planting more than 1,500 cherry blossom trees in locations around Ukraine. Active high-level exchanges continued in 2017 such as the visit of Chairman of the Ukrainian parliament Parubiy to Japan at the end of February, the visit of Chairperson of the Ukraine-Japan Parliamentary Friendship Group Yemets and his party to Japan in June, the visit of Deputy Head of the Presidential Administration Yelisieiev to Japan in October, and the visit of State Minister for Foreign Affairs Nakane to Ukraine in November for the event related to the Year of Japan in Ukraine.

The bilateral relations between Japan and Ukraine also made steady progress among working-level officials through efforts that included the fifth meeting of the Japan-Ukraine Joint Committee for the Cooperation to Advance Aftermath Response to Accidents at Nuclear Power Stations in Kiev in November and the implementation of relaxation of visa requirements for Ukrainian nationals in January 2018.

Regarding Japan's assistance to Ukraine, Japan pledged additional support of around 460 million yen (3.89 million US dollars).

• 2 Framework for dialogue among four nations (France, Germany, Russia, and Ukraine) aiming at resolving the situation around Ukraine.