The US plans to tighten sanctions against Russia, scheduled for November, is causing growing concern from the international business community, in the first place, from Europeans and those economic areas in which key players demonstrate maximum interdependence, including in the energy sector.
Among those who lashed out at the US intention to impose restrictions on Russian companies Rosneft, Gazprom and LUKOIL similarly to sanctions slapped on US Rusal in April this year, is the head of British Petroleum Bob Dudley. BP owns 19.75% of Rosneft shares and is Rosneft’s major private shareholder.
According to Bob Dudley, in the event of such a tightening of US sanctions, the European energy system will crumble. “I do not think this will happen. If you impose sanctions like Rusal on Rosneft, Gazprom or LUKOIL, you will cut off European energy systems, which is a little bit too much”, he said as he spoke at an Oil & Money 2018 Conference in London.
Bob Dudley is fully aware of the contemporary realities and the potential of Russian companies, particularly since BP and Rosneft have been developing a variety of joint projects. In 2015 BP acquired 20% in the Srednebotuobinsky field in Eastern Siberia and has been prospecting for oil within the framework of a joint venture with Rosneft – “Ermak Neftegaz”.
Reports say the share in the Russian company accounts for a third of the total production of British Petroleum. “In general, we consider Rosneft a fairly good partner,” Bob Dudley said in an interview with The Bloomberg, an American business news agency.
At present, the US Congress is considering two packages of anti-Russian sanctions. In the case of “spotting Russia’s attempts to influence the course of elections in the United States”, the White House is to block the resources of major Russian banks, including Sberbank, VTB and Vnesheconombank, and energy companies. Among the latter are “Gazprom”, “Rosneft” and “LUKOIL”.
The forecast by the BP chief that the European energy sector will face severe crisis should the US Congress launch new sanctions echoes the moods that are gaining strength in Europe. A statement to this effect came from the Eastern Committee of the German Economy (Ost-Ausschuss der Deutschen Wirtschaft e. V.) which represents the interests of about 350 German companies and associations operating in Russia and other former Soviet republics, as well as countries of South Eastern Europe. The Committee’s Managing Director Michael Harms said that business in the European Union should not suffer because of cooperation with Russia. According to reports released in Germany, Western sanctions and Russian counter-sanctions have “negatively affected” more than 70% of German companies since March 2018. A study conducted by the above organization reveals that 94% of these companies would prefer the existing sanction regime against Russia eased. The East Committee of the German economy has expressed “tremendous concern” over the possibility of the US imposing new sanctions against Russia and against European companies running joint projects with Moscow, including those involved in the construction of the Nord Stream 2 gas pipeline.
“We believe that any attempts to see implementation of sanctions in an extraterritorial format are unacceptable and at odds with international law,” Michael Harms said. He deems as inadmissible the imposition of sanctions on European business for cooperating with Russia.
This position is shared by top management of the French energy giant Total, which has been pursuing a number of joint projects with Russia which are vital for ensuring Europe’s energy security, including in the production of liquefied natural gas (LNG). In an interview with the French edition of Capital, Total CEO Patrick Pouyanne questioned the very effectiveness of anti-Russian sanctions – in other words, he doubted the key factor that caused their coming into effect: “I believe that the sanctions are ineffective. What they lead to is the fact that leaders consolidate forces around themselves without changing their policies.”
“Business communities in most European countries – the Czech Republic, France, Germany, Spain – believe that sanctions should be lifted at an early date. Some experts think that this should happen gradually but business thinks differently,” – says Ernest Ferlenghi, president of Confindustria Russia, an association of Italian business in Russia, who is a staunch opponent to sanctions. “Every lost day provides an opportunity for our competitors, especially in Asia. They have vast opportunities, particularly the Chinese, for investing money in various projects. They become more competitive due to a strong financial resource,” – emphasizes the Italian businessman.
Significantly, the most critical position on the further tightening of sanction against Russia has come from countries and companies which guarantee stability on the European energy market, in particular, those representing Germany and Austria. The Vienna-based newspaper Der Standard cites in this connection the successful activities of the Austrian energy concern OMV: “OMV relies on Russia, its CEO Seele maintains good relations with Russia. The head of the state-subsidized concern has managed to secure what he had already succeeded in achieving as head of BASF subsidiary Wintershall – participation in the development of a large gas field in Siberia, Urengoisky.” “As for the second major project – the construction of the Nord Stream 2 pipeline from Germany to Russia through the Baltic Sea – Seele enjoys political support”, – the newspaper says.
By introducing sanctions against top Russian energy companies that closely cooperate with European business the Donald Trump administration is in fact trying to make use of national legislation to secure the US financial and economic interests in Europe. According to reports, one of the reasons for tightening sanctions is the currently observed positive trends in the implementation of Russian projects in areas where the US is particularly vulnerable – the export of pipeline gas and the production of LNG.
As for Russian gas supplies to Europe – which Washington sees as a direct competition considering its own liquefied natural gas supplies – this year PJSC Gazprom has the potential, for the first time after 2011, to reach a production level of over 500 billion cubic meters of gas annually. At the same time, annual exports to foreign countries can hit a record high of over 200 billion cubic meters.
Meanwhile, Russia’s PJSC NOVATEK, which mainly deals with LNG production, has announced the discovery of a gas condensate field with reserves of at least 320 billion cubic meters in the Arctic, on the North Obsk license area in the waters of the Gulf of Ob. This field can become a resource base for NOVATEK’s third LNG producing facility, the Arctic LNG-3. “The discovery of a new field is an important starting point for one of our future Arctic LNG projects. The North-Ob field is unique in terms of its reserves, boasts an advantageous geographical location, and has a huge resource base. On top of that, the experience we have gained suggests that we have every potential for the successful implementation of the new LNG project,” – said Leonid Mikhelson, Chairman of the Board of PJSC NOVATEK.
By 2030 the company expects to bring LNG production to 57 million tons per year, and provided extra resources have been tapped – up to 70 million tons. This will enable Russia to successfully compete with the top LNG producer, Qatar, thereby leaving the United States far behind.
Success of Russian energy projects and expansion of Russia’s ties with European partners in energy and other major sectors of the economy present, in the eyes of the administration of US President Donald Trump and the Congressmen, a key threat to American business interests. This is what underlies Washington’s “sanctions” policy and European leaders have increasingly been making a point of it lately.
First published in our partner International Affairs
Origins of Future discussed – Vienna Process launched
The first July day of 2020 in Vienna sow marking the anniversary of Nuremberg Trials with the conference “From the Victory Day to Corona Disarray: 75 years of Europe’s Collective Security and Human Rights System – Legacy of Antifascism for the Common Pan-European Future”. This was probably the first conference in Europe of large magnitude after the lockdown. It gathered numerous speakers and audience physically in the venue while many others attended online.
The conference was organised by four partners; the International Institute for Middle East and Balkan Studies (IFIMES), Modern Diplomacy, European Perspectives, and Culture for Peace, with the support of the Diplomatic Academy of Vienna that hosted the event in a prestigious historical setting.
The day was filled by three panels focusing on the legacy of WWII, Nuremberg Trials, the European Human Rights Charter and their relevance in the 21st century; on the importance of culture for peace and culture of peace – culture, science, arts, sports – as a way to reinforce a collective identity in Europe; on the importance of accelerating on universalism and pan-European Multilateralism while integrating further the Euro-MED within Europe, or as the Prodi EU Commissioned coined it back in 2000s – “from Morocco to Russia – everything but the institutions”. The event was sealed with traditional central European music and famous Viennese delicatessens.
Among 20-some speakers were: Austrian President (a.D) and current co-chair of the Ban Ki-moon center; the European Commission Vice-President; former Secretary-General of the OECD and Canadian Economy minister (under PM Trudeau); former EU Commissioner and Alpbach Forum President; former OSCE Secretary General and current OSCE High Commissioner on National Minorites; Austria’s most know Human Rights expert; Editor-at-Large of the Washington-based the Hill; Secretary General of the Union for the Mediterranean; Honourable Justice Constitutional Court President, and many more thinkers and practitioners from the UK, Germany, Italy and Australia as well as the leading international organisations from Vienna and beyond.
Media partners were diplomatic magazines of several countries, and the academic partners included over 25 universities from all 5 continents, numerous institutes and 2 international organisations. A day-long event was also Live-streamed, that enabled audiences from Chile to Far East and from Canada to Australia to be engaged with panellists in the plenary and via zoom.(the entire conference proceedings are available: https://www.facebook.com/DiplomaticAcademyVienna )
The event sought to leverage on the anniversary of Nuremberg to highlight that the future of Europe lies in its pan-continental union based on shared values but adapted to the context of 21st century. Indeed, if Nuremberg and the early Union were a moment to reaffirm political and human rights after the carnage of WWII, the disarray caused by C-19 is a wake-up call for a new EU to become more aware of and effective on the crisis of socio-economic rights and its closest southern and eastern neighbourhood.
From a political viewpoint, while the diversity of speakers and panels led to a multifaceted picture, panellists agreed on the need for more EU integration, a better balance between state and markets that could put the state again in charge of socio-economic affairs in order to compensate market failures; greater involvement of the Union for the Mediterranean in the implementation of EU policies, and the overcoming of Washington Consensus, among other things.
From a strategic perspective, two important points emerged. On the one hand, the EU in order to develop a more productive foreign policy agenda needs to resolve tensions that still create mistrust between the West and Russia, with particular attention to frozen conflicts. On the other hand, it is essential that European countries go back to a more long-term, forward-thinking policy agenda that can prepare its members for the strategic challenges of the future.
Above all, at the moment the EU lacks the necessary leadership that dragged it outside of WWII almost eighty years ago and that nowadays needs to overcome the differences that prevent the continent to achieve a fully integrated, comprehensive socio-economic agenda.
In order to make the gathering more meaningful, the four implementing partners along with many participants have decided to turn this event into a lasting process. It is tentatively named – Vienna Process: Common Future – One Europe. This initiative was largely welcomed as the right foundational step towards a longer-term projection that seeks to establish a permanent forum of periodic gatherings as a space for reflection on the common future by guarding the fundamentals of our European past.
As stated in the closing statement: “past the Brexit the EU Europe becomes smaller and more fragile, while the non-EU Europe grows more detached and disenfranchised”. The prone wish of the organisers and participants is to reverse that trend.
To this end, the partners have already announced the follow up event in Geneva for early October to honour the 75th anniversary of the San Francisco Conference. Similar call for a conference comes from Barcelona, Spain which was a birth place of the EU’s Barcelona Process on the strategic Euro-MED dialogue.
Turkey in the Balkans: A march westward
The Balkan Region is becoming attractive for a wide spectrum of foreign players – from Beijing to Washington, and from Brussels to Riyadh. Also, it presents considerable interest for Ankara.
For Turkey, the Balkan Region is important historically, culturally, politically and economically, playing the role of a “bridge” into Europe. In addition, the Turkic-Islamic foreign policy paradigm stimulates Ankara into action: nearly 17 million or more than one third of the population of Turkey are Muslims, while Recep Tayyip Erdogan is positioning himself as the main “advocate” of Islamic world. Significantly, his authority as a patron of the Balkan umma is on the rise.
Muslims make up the majority of the population in Albania, Kosovo, Bosnia and Herzegovina, Sanjak (in Serbia), in Macedonia and Montenegro the proportion of Muslims is 33% and 17% accordingly. Moreover, the peninsula is home to some 1.5 million Balkan Turks, even despite the fact that many of them emigrated to Turkey and that Turkey and Greece carried out an exchange of population after the Second World War.
Ankara began to demonstrate an ever increasing interest in the Balkan Region after the disintegration of Yugoslavia, but what gave the Balkan direction a new impetus was the arrival in 2009 of Ahmet Davutoglu, who announced that Turkey would assume the role of mediator between the EU and countries of the region, thereby contributing to rapprochement and integration of the latter into Euro-Atlantic structures.
Since then the Turkish-Balkan foreign economic ties and military and political cooperation have demonstrated progressive growth. Countries of the region have become involved in NATO programs and have reformed their armed forces in accordance with NATO standards. Since 1995 Ankara has been taking part in all NATO operations in the Balkans and has dispatched its servicemen to serve with international security forces in Kosovo, Bosnia and Herzegovina. And it has no intention to stop – Turkish military schools provide classes in Serbian, Croatian and Albanian.
In recent years many experts have noticed Turkey’s “soft force”, and the Balkan Region is no exception. The Balkans have become a venue for dozens of educational, healthcare and cultural projects, with Turkey financing humanitarian campaigns and investing hefty sums in educational and medical projects, and in infrastructural and energy facilities. Under development is a plan to publish history textbooks in tandem with Albania, North Macedonia, Bosnia and Herzegovina. According to the Internet edition Balkan Insight, the popularity of Turkish soap operas in the Balkans boosts Turkey’s authority, simultaneously making it possible for Turkey to “re-write history”.
Unlike in the 1990s, when Ankara’s policy in the Balkans was oriented, first of all, at ethnically and religiously close countries and groups, now, Turkey is set on “covering” all countries of the peninsula. For Turkey, the main partners are Albania, Bosnia and Herzegovina, North Macedonia, Rumania, and “second level” counteragents are Croatia, Montenegro, Kosovo and Serbia. Incidentally, the significance of the latter has been growing steadily in the eyes of Turkish diplomats.
Erdogan, who visited Belgrade in October last year, has described Serbia as “a key country for peace and stability in the Balkans”. Cooperation with Serbia, he said, has reached an “ideal” level.
The opponents include Bulgaria (to a less extent) and Greece – countries where anti-Turkish moods are strong. Particularly, Greece. According to the Turkish newspaper Hürriyet, Ankara and Athens “have conflicting views on a number of points”, including the land border, the Aegean Sea, Cyprus and the entire East Mediterranean, where the natural gas – rich continental shelf and marine borders are still issues under discussion. The dispute over developed and prospected gas reserves narrowly escaped spilling into an open confrontation: Greek Defense Minister Nikos Panagiotopoulos threatened to “take up arms” in an interview broadcast by the Greek TV channel Star. His Turkish counterpart replied accordingly: «… we are persistent and resolute when it comes to protection of our interests and our rights, and we have the power needed for it». However, both sides softened their rhetoric soon afterwards.
In the Balkan Region Turkey has to compete, first of all, with the European Union, which looks at the region, not without grounds, as a “natural” zone of its interests. This competition becomes more intense as relations between Ankara and Brussels get cooler.
The Euro-Atlantic direction currently dominates foreign policies of nearly all Balkan countries, despite the fact that the happy expectations of expanding cooperation with the West rarely come true. «European solidarity does not exist», – the Serbian president announced sadly as he declared a state of emergency in connection with the coronavirus pandemic. Nevertheless, Bulgaria, Rumania, Albania, Croatia, Montenegro and North Macedonia joined NATO; Bulgaria, Greece, Romania, and Croatia are members of the EU, Serbia and Montenegro are holding talks on their joining united Europe, and Albania and North Macedonia have received a green light to do so from Brussels.
However, EU officials acknowledge that they have so many internal problems that they cannot take in new members.
But the EU persists with its activity as, in the opinion of a whole number of western analysts, hopes of countries of the region for membership in the EU is all but the only factor that contains a new “Balkan explosion”. In addition, Europe is concerned about the growing activity of Turkey, Saudi Arabia and the United Arab Emirates in the region. In 2017 Austria’s Defense Minister Hans-Peter Doskozil expressed concern over the “slow Islamization of the Balkans”. Also, the EU is doing its utmost to reduce the influence of Russia and China.
Washington demonstrates complete agreement with Brussels. In May 2018 US Secretary of State Mike Pompeo, addressing the International Affairs Committee of the House of Representatives, said that Russia (and also Turkey) were as he put it involved in “destabilizing the situation” in the Balkans. Hence the build-up of American military presence (US military bases are located on the territories of three countries of the region) and the involvement of Balkan states in NATO programs. Though, according to an official statement of the State Department, the US policy in the Balkans pursues the one and only purpose of “assisting the states of the region in their efforts to strengthen peace, establish stability and create conditions for progressive development”. But the Balkans remember the Yugoslav crisis and the role of NATO in the aggressive destruction of this state.
Given the situation, friction with Ankara pushes Washington into building its own military infrastructure with the support of Rumania, where elements of the US missile defense shield are deployed, and Bulgaria, where four American military bases are located. Two years ago the United States announced the creation of several more bases on the peninsula, primarily in Greece.
At present, the Balkan Region presents an important chapter of the Russian foreign policy. A number of countries, first of all, Serbia, continue to request Russian presence. According to the author of the report “Where do Balkans go? New cooperation paradigm for Russia” (2018) at the Valdai Club, Russia ought to exert efforts to expand the range of partners in this region, simultaneously fostering cooperation with external players. One instance of such cooperation could be an extension of the Turkish Stream into Europe.
As for Turkey, this region is of importance within the framework of “neo-Ottomanism”, which envisages the spread of economic, cultural and political influence to former territories of the Ottoman Empire. Even though this doctrine has not been declared at the official level, it de facto constitutes the ideological basis of the country’s foreign policy.
In the 1990s, on the peak of euphoria at the appearance of a whole number of Turkic states, Turkey proclaimed the creation of a “Turkic world” a major point of its foreign policy agenda. In the opinion of the country’s political elites, leadership in this “world” would boost Turkey’s value on the international scene and would thus facilitate its joining the European Union. Now, the agenda has become more ambitious: as part of this ideology, Turkey positions itself as an equal partner to entire Europe and deems presence in the Balkans vital.
The “Turkic world” did not come into being for many reasons – it received no support from the West, and Turkey lacked the resources and influence to translate it into life unassisted. Likewise, the West does not need Pax Ottomana in any form, while efforts to create it may in the long run prove too heavy a burden for the Turkish economy.
From our partner International Affairs
Of Multilateralism And Future To Europe Recalibration
As the key-note panelist at the Modern Diplomacy and IFIMES conference today in Vienna, the former Secretary General of the Paris-based Organisation for Economic Cooperation and Development in Europe, and former senior minister in several Canadian governments, just delivered highly anticipated speech.
This panel in addressing the future of Europe is invited to answer this question:
“Is there any alternative to universal and pan-European multilateralism? For the purpose of my remarks I am interpreting “ universal and pan – European multilateralism’ as moving forward with achieving more EU integration supported by institutions appropriate to a kind of federal structure in line with the thinking of the Spinelli Group. But it also raises the question of global free trade which I promoted as Secretary General of the OECD and continue to believe must be the word’s future in addressing poverty and opportunity, especially for the worlds developing countries. But it has to be managed in a way sensitive to the challenges of both.
In these brief comments I intend to offer my view on the answer to this fundamental question about the future of Europe.
To begin, I would amend the question by adding the word “good” before “alternative”.
There certainly are alternatives some of which could set Europe on a path back to a collection of independent sovereign states and undo the remarkable progress in building a secure European Union in the post WWII period.
Many years ago when looking at the extraordinary work and vision of statesmen like Jean Monet trying to build a lasting and prosperous European Union, I came across a comment of British Historian H.A.L. Fisher in the preface to his 1936 book, A History of Europe. In part it read as follows:
“[No] question [would be] more pertinent to the future welfare of the world than how the nations of Europe … may best be combined into some stable organization for the pursuit of their common interests and the avoidance of strife.“
Although we appreciate the Marshall Plan’s amazing contribution to the Europe of today, it contributed more to restoring Europe physically while providing humanitarian assistance. Of course, the OEEC which evolved into the OECD in 1961 did provide an important framework and mechanism for economic and social development which continues to this day.
Fisher’s vision of a strong, unified Europe remains very much work in progress and that work really began with Jean Monnet’s initiative to create the European Coal and Steel Commission. I will comment on that in a moment But I remain convinced that Fisher was right, and the great rebuilding of Europe and the EU after the Second World War must and will endure notwithstanding the barrage of criticisms from euroskeptics, now emboldened by the United Kingdom’s Brexit vote of June 2016. Admittedly my conviction is based on the EU having strong, visionary leadership, which has not yet fully materialized.
Think of this. Although Greece represents less than 3 per cent of the Euro zone economy, euroskeptics used its financial crisis as ammunition to predict its withdrawal from the eurozone and the possible unravelling of the entire EU. The Greeks rejected that option: there was no Grexit. Austrians also rejected right-wing populist nationalism in the 2016 Presidential election of Van der Bellen, a strong supporter of the EU.
The support for Brexit in the UK referendum was an unexpected shock for some, but it pleased others who wish to see the EU unravel and claim that the UK attitude reflects views held in other major European countries. I keep hearing and reading that the United Kingdom has rejected the EU, as if it were an overwhelming victory. Bolstered by misrepresentations and downright lies it was a very slim referendum victory but Brexiters will argue that it was validated by Boris Johnson’s subsequent margin of electoral victory.
There are also others, especially President Trump who appear to be hostile to the emerging global role that the European Union is likely to play as it completes its evolution to a unified international force. This has become even more important as the United States under Trump becomes increasingly isolationist and opposed to international multilateralism constructed by visionaries over the past 75 years.
In a stunning commentary in Foreign Affairs (summer 2016), Professor Jakub Grygielof the Catholic University of America, implies that the upside to the EU crisis will be a return to independent sovereign nation-states across Europe. Indeed, that would be an upside for American isolationists. It would remove from US competition the largest unified single market in history and reinstate the possibility of future wars on the continent that this great European experiment was designed to prevent – as it has.
Some of Grygiel’s comments appear designed to create a false impression of the views of Europeans. Here is a cheerful observation to support his thesis: “a Europe of newly assertive nation-states would be preferable to the disjointed, ineffectual, and unpopular EU of today. There’s good reason to believe that European countries would do a better job of checking Russia, managing the migrant crisis, and combating terrorism on their own than they have done under the auspices of the EU.”
Really? What is that “good reason” that escaped the attention of the statesmen and nation builders like Jean Monnet in post-war Europe? Grygiel also says that the EU is ineffectual, which is true in some cases, as it is with many, if not most supranational bodies, including much of the United Nations (UN) activities. And what of the United States itself?
Sadly the world is watching that formerly great republic floundering in the face of numerous serious challenges both social, economic, even racial, not even capable of effectively addressing the Covid-19 crisis through what is becoming a dysfunctional government under a Commander in Chief who proudly presents himself as a narcissistic ignorant bully.
And non Europeans, especially Americans, systematically ignore the EU’s successes. One good example being the collective research of 28 networked European countries that produce one-third of the world research’s output – 34 per cent more than the United States and more than China. This was documented at the time of the Brexit debate in New Scientist. (June 2016). These are the kind of synergies that could be sacrificed should the EU dissolve, and it may already be compromised by the withdrawal of the UK which has much world first class research.
Hopefully the; United Kingdom will stay united and prosper in the post Brexit period. However, there is good reason for concern as the Financial Times Martin Wolfe wrote at the time (June 24,2016). He said:
“David Cameron took a huge gamble and lost. The fear mongering and outright lies of Boris Johnson, Michael Gove, Nigel Farage, The Sunand the Daily Mail have won. The UK, Europe, the West and the world are damaged. The UK is diminished and seems likely soon to be divided. Europe has lost its second-biggest and most outward-looking power. The hinge between the EU and the English-speaking powers has been snapped. This is probably the most disastrous single event in British history since the Second World War.
Yet the UK might not be the last country to suffer such an earthquake. Similar movements of the enraged exist elsewhere – most notably in the US and France. Britain has led the way over the cliff. Others might follow.”
Will others follow the United Kingdom over the cliff? Alina Polyakova and Neil Fligstein, writing in the International New York Times at the time of the Brexit vote( July 2016), relied on polls that suggest that will not happen. They say, “Britain is not, and never has been, a typical member of the European Union, and in no country but Britain do populists and other euroskeptic forces have the 51 percent of votes needed to pull their countries from the union.”
Obviously, those in the UKwho wanted Brexit must have believed it is good for them and presumably for the United Kingdom, even if it means losing Scotland and perhaps Northern Ireland. The City of London will also suffer, but no one can estimate what the damage will be until all the terms of exiting are known.
Jacques Delors, who has dedicated much of his life to the European dream both in public office and after retirement through his Paris-based foundation, made the following observation in an inter- view in 2012 with the Handelsblattnewspaper: “If the British cannot support the trend towards more integration in Europe, we can nevertheless remain friends, but on a different basis. I could imagine a form such as a European economic area or a free-trade agreement.”
That might be the happiest outcome in the wake of Brexit. The real beneficiaries of Brexit are the remaining EU members inspired by people of the experience and quality of Jacques Delors and members of the Spinelli Group. The latter founded in 2010 as a network of thousands of politicians, individuals, writers, and think tanks looking to revive the momentum toward a federalist structure for the EU.”
In fact, the Brexit vote and Johnson’s arrival as Prime Minister may have strengthened the resolve of many EU countries and prominent Europeans to accelerate the integration process in line with federalist thinking.
Obviously those having the foresight to realize the importance of greater integration and an emerging federalist model, such as the Spinelli Group, would be blocked by a United Kingdom, were it a member, to have reforms move in the opposite direction, consistent with Prime Minister Margaret Thatcher’s famous Bruges speech in 1988 where she said,
“We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level with a European super-state exercising a new dominance from Brussels. Certainly, we want to see Europe more united and with a greater sense of common purpose. But it must be in a way which preserves the different traditions, parliamentary powers and sense of national pride in one’s own country; for these have been the source of Europe’s vitality through the centuries.”
This could hardly be seen as an endorsement of a federalist system of any kind, because decentralization, especially with the preservation of parliamentary powers, meaning full sovereignty, is incompatible with federalism. She could have added that the elements she wished to see preserved have also been the source of bloody European conflicts throughout the last millennium, including three wars between France and Germany in the 70 years between 1870 and 1939!
Consideration should be given to some steps that must be taken to realize the collective potential of the EU as a major global player, which it could never be if its members revert to sovereign nation- state status. Indeed, as other major countries grow in economic clout, it has been pointed out that not even Germany would be in a new G8. Only a united EU could have influence on the global stage.
Skeptics like Professor Grygiel, many of them American, seem blinded by the headlines and glare of current events, failing to place them in a broader historical context. Reviewing the remarkable evolution of Europe since the Second World War, I hope that the long-term success of Europe is inevitable. But as the great American judge Oliver Wendell Holmes once noted, “the mode by which the inevitable comes to pass is effort.” European leadership must now make that effort. It is critical not only for Europe, but for the world today.
A strong, unified Europe is also important for the emergence of global multilateralism and the further evolution of globalization. Since the end of the Cold War we have been living in a world dominated by just one superpower: the United States. Fortunately, that superpower has been a very open market and largely, but not entirely, militarily non-aggressive. Sometimes referred to as the “importer of last resort,” it continued to run current account deficits opposite many trading partners, especially China.
The American economy had enough strength and resilience to emerge slowly but with growing confidence from the global financial crisis of 2007–08. To become a companion economic locomotive, Europe must continue to open its markets, eliminate distorting trade subsidies, and undergo substantial structural reforms in labour, services, and manufacturing markets to stimulate European economic growth. I hope that the results of the Europe 2020 exercise and its follow up will help in that regard.
If that does not happen, the United States might use its economic muscle to focus increasingly on bilateral agreements that are becoming a serious impediment to global free trade.
If Europe had successfully moved to a more centralized and coherent federal model of government it could have reached the objectives adopted by the EU in 2000 (often referred to as the Lisbon Agenda), which was stated in the Lisbon Declaration (24 March 2000) as follows: “The Union has today set itself a new strategic goal for the next decade: to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion.”
Well, that failed. A review of progress chaired by the former Dutch Prime Minister Wim Kok reported in 2004 that the strategy had fallen well short of its objectives. The diagnosis of the problems of broad structural reform was good, but implementation of reforms was seriously lacking. Kok’s review carried much credibility as he had overseen the continuation and completion of the major Dutch structural reforms originally introduced by his more conservative predecessor, Ruud Lubbers. Kok was also a regular participant in many international conferences, and during our discussions it was apparent to me that he was a talented consensus builder.
There is much to be said for such consensus builders, who enable intellectual and political opponents to better understand competing views. Strengthening such relations between European political leaders will be important in bringing cohesion and stronger integration to the EU in line with the objectives of the Spinelli Group.
The Lisbon Declaration, now replaced by the Europe 2020 strategy, has five ambitious objectives related to employment, innovation, education, social inclusion, and climate/energy. The world would benefit greatly from Europe attaining those objectives.
Today only the EU and Japan might to come close to matching the United States in per capita GDP in the coming years.
Demographic projections show Japan’s population in serious decline, but an expanded EU which should evolve with Turkey as a major player, would have a much greater population and a much larger market than the United States.
The objectives listed above can only be realized when the peoples of Europe achieve a consensus on what kind of legal community they truly wish to be, and so far, progress to that end has been in fits and starts. The failure of the Lisbon Agenda, the rejection of the proposed constitution in both French and Dutch referenda, and now the exit of the United Kingdom underscore the difficulty of moving toward a flexible federal structure.
The use of the word federal seems to be an anathema for many Europeans. It is worth remembering that with the creation of the European Coal and Steel Community inspired by Jean Monnet in 1951, the French government declared that it would “provide for the setting up of common foundations for economic development as a first step in the Federation of Europe.”
Today there does not appear to be any coordinated and broad- based visionary leadership like that of Jean Monnet that led Europe out of the destruction and chaos of the Second World War.
Perhaps the Greek crisis, the withdrawal of the United Kingdom from the EU, and continuing economic performance under potential will awaken Europeans to the need for a truly federal-type European Union, with strong central government institutions where appropriate, accompanied by the protection of individual nations’ precious linguistic and cultural identities. The genius of federalism is that it can accommodate great diversity in many areas.
What is the way forward? Where is the higher vision to achieve what is imaginable but not yet within reach? I suggest that the answer is to reconcile the various goals of Europeans, what I call the three Ms: minimizing frictions, maximizing synergies, and maintaining sovereignty.
Some believe they can achieve the first two without a dilution of sovereignty. That is not possible. From my Canadian experience with Quebec, however, I know that it is possible to minimize frictions and maximize synergies while maintaining cultures and national identities. In the case of Quebec, the French language, civil law, religion, and culture have been protected since the Quebec Act of 1774, which is one reason why separatist movements have never succeeded.
I see this kind of flexible federal structure, with necessary variations, in Europe’s future. Loss of Europe’s various languages and cultures would alter the character of the continent, moving it in the direction of the United States. The historical evolution and the nature of the “self-willed” peoples of Europe, as Fisher described them, make that path neither feasible nor desirable.
I finish these comments with a quote from a recent letter distributed by Thierry de Montbrial, the founder and head of the prestigious French public policy think tank IFRI.
“But it stands to reason that we in Europe in particular should capitalise on building the Union in order to prove the viability of a third way between the United States, that great democracy which still claims to be a liberal one, and the People’s Republic of China, which still claims to be communist. Most of us want to remain close to American democracy, but we refuse to become its vassals, notably as part of an Atlantic Alliance retrofitted to that end. There is an urgent need to clarify NATO’s truly shared objectives. As for the European Union, despite all the whining in recent weeks, it continues to sail ahead in stormy seas, as it always has…..
If there is one part of the world where multilateralism is making headway despite countless hurdles, it is the European Union. There is still a very long way to go in Europe and, even more so, on a planetary scale. But history is moving in that direction, for the alternative is collective suicide. There is no doubt that global warming, pandemics and more or less intense wars are foreseeable in the world’s near-term future. At least we can hope to limit the damage, which, after all, was the case during the Cold War. Let us be convinced of the European Union’s responsibility in that regard.”
I agree…who cannot?
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