Director and CEO, German Council on Foreign Relations
Deputy Head of College / Professor of International Economic History, University of Glasgow,
Head, Inclusive Green Finance, Alliance for Financial Inclusion (AFI)
Open Society to Offene Gesellschaft,
Chairman of the Centre for Liberal Strategies ,Sofia and Permanent fellow at the Institute for Human Sciences, Vienna.,
See below for the Video Recording
How fragile is the EU to the profound changes taking place in international affairs? Can it prove resilient and maintain its integrity in spite of them? The first session discussed the return of power politics in international relations and the implications for Europe.
The liberal world order is under pressure from powers seeking to revise it, including US and Russia. Motives may differ, but what these revisionist powers have in common is a belief that crude power relationships ought to replace rules-based multilateralism.
This puts the EU, a project of integration between nation states based on rules, in an awkward position: the recognition of the balance of power as the ultimate arbiter of international relations with other partners will inevitably spill over to relations between Member States. A power game within the EU can potentially break it.
What the appropriate response should be was also debated. Can Europe survive by delivering well-being to its citizens? Does the success of a model based on liberal values and multilateralism suffice to ensure the EU’s integrity by restoring optimism for and confidence in the European project? Economics certainly matter, but recent events suggest other factors are equally important. For instance, pessimism related to demographic change may partly explain the rise of nationalism.
The answer may be grounded on realist thinking: resilience can be the result of uniting against common security threats, a precondition for a common strategic vision that Europe badly needs. In this line of thinking, ability to survive is a powerful source of legitimacy, perhaps more so than economic welfare.
One obstacle, however, stands in the way: consensus on what constitutes a security threat is hard to come by in Europe.
The discussion in the second session also centred on the outlook for the EU through the lens of identity politics. Echoing many of the points raised in the previous discussion, the problems facing Europe were likened to a “mid-life crisis”, a crisis of identity.
European integration appeared to be moving in a linear fashion up until and including the 2004 enlargement: “always bigger, always better” was the spirit. The outcomes of the French and Dutch referenda on the EU Constitution marked a turning point in that process and the beginning of self-doubt for the European project. The financial/economic and later Eurozone crises only added to the crisis of confidence.
If Europe is to overcome this crisis, it needs to rebuild its confidence. To do so, a new identity, a common language that appeals to emotion needs to complement the economic rationale of integration.
The re-definition of European identity is consistent with the original purpose of European integration. What is now the EU began primarily as a political project to roll back nationalism and prevent war, using economic integration as its means.
Nevertheless, instilling a European identity is not an easy task. The existence of strong national identities in Europe may not a priori prevent the development of a European identity altogether, but the two still seem to be in conflict for many Europeans.
With nationalism resurfacing and the possibility of war returning, 2017 can mark another turning point for the EU. This time round it can usher the gradual restoration of confidence in European integration. Fear of war and/or nationalism or economic arguments, however, will not suffice: to restore confidence, an optimistic narrative about the identity of Europe is required.
The third session focused literally on future of Europe by touching on the attitudes of the young generations towards the EU. If European integration began as a project of peace, is it necessarily true that it still holds the same meaning for today’s young generation?
Rather than preventing war and its consequences, young people associate with the EU a sense of mobility and reaching across borders, in large part thanks to the Erasmus programme.
On the issue of identity, the young generation appears to be less inclined to see national and European identities as mutually exclusive; rather, they are viewed as overlapping but not contradicting facets of the one identity.
But the young generation has also been let down by Europe and expects more of it. On the one hand, the young generation is not immune to insecurity and fear: indeed, in most cases it is bound to bear the brunt of change, be it technological, economic or demographic.
On the other, the young demand solidarity in response to heightened uncertainty and increasingly look up to EU to provide it. Lack of employment opportunities and job precariousness experienced by young people around Europe put the EU in the spotlight; for some, the EU is held directly responsible, for others it is just falling short of its promises.
Therefore, how the young end positioning themselves towards the EU varies to a large extent. The EU can both alienate and attract young people, as shown by different voting behaviour across recent electoral contests.
In the last session of our Conversations on Europe event, Emmanuel Mourlon-Druol and Catherine Schenk reflected on the possible parallels that can be drawn between the past and today.
The role of International Institutions has changed…
The short-term impact on trade was deeper in the global financial crisis of 2007/8 than in the 1930s. However, in sharp contrast to the Great Depression, this time there was a quick recovery of trade fostered by political will and the appropriate institutional underpinnings.
Today, what we see is an erosion of the international commitment to free trade. This situation is perhaps comparable to the “new protectionism” of the 1970s, whereby economic slowdown caused a retreat towards economic nationalism. Currently, the role of international trade institutions has been fading, while regional trade agreements have been gaining in importance.
…and so has the position of the United States
Historically, the U.S. has kept a fair trade narrative in opposition to free trade. The country’s own concept of fair trade has been changing throughout time. While in the past it meant having access to other markets, today it may imply a shift away from multilateralism.
In fact, the United States played an important role fostering transatlantic relations at the end of the Second World War. The Marshall Aid and its conditions pressed for organizational changes in Europe and fostered the emergence of bilateral agreements. European national interests later separated the European Integration process from the Marshall Aid, and focused on the establishment of national organizations and priorities.
While there are more players in the game – since the introduction of the G7, Canada has played a role, which is now reinforced with the CETA negotiations - Trump can be seen as an opportunity for the EU to show its maturity and develop a meaningful message. In order to do so, Europe needs to learn how to swiftly find consensus over its great heterogeneity.