March 4, 2010
The College of Europe has been addressed by many leading political figures and heard many important speeches. The speech of Herman Van Rompuy, President of the European Council (EurC), on 25 February 2010 is well worth reading. His theme was “The challenges for Europe in a changing world”. The gist of the speech follows.
Our main challenge is how to deal, as Europe, with the rest of the world. How to defend our interests and to promote our values. First, we must look at the way the world is changing. Certain signs of long-term changes have come to the surface. At the UN Climate Summit in Copenhagen last December, Europe was perceived as waiting in the corridor, while the US and China struck a deal. A second sign was the recent IMF forecasts for economic growth in 2010: China 10.0%, India 7.7%, US 2.7, EU: 1.0%. A third sign was President Obama’s decision to stop the NASA moon programme, as it is too expensive. The Chinese and Indians confirmed that their Moon programmes are going full speed ahead.
These signs are adding up to a bleak mood in some European circles. Some talk of a “decline of the West”. These conclusions very exaggerated. Since the fall of communism, Europe has been the most stable region in the world. The EU’s population of half a billion are amongst the most educated and trained. Even with only 7% of world population we still generate almost 22% of it’s wealth, compared to about 21% for the US, 11.5% for China and 4.7% for India. We are the first commercial power. Our countries are envied for their political stability and security, for their social system and environmental standards, for the quality of European life.
The EU-US relationship remains by far the strongest relationship in world affairs, both economically and politically. This does not mean, however, that nothing is happening. The ‘declinist’ mood reflects the (somewhat belated) public perception that a new game is taking place. The first phase of globalization – economic – came into full swing from 1989. This led to more prosperity for more people in many parts of the world.
The new phase of globalization – political – is the new economic strength of the emerging countries crystallising into political power. It is most visible in the unprecedented financial leverage which China has gained over the US.
To sum up: as long as globalization was mainly an economic process, it appeared as if we could all win. In the new, political phase of globalization, this changes. Whereas prosperity is spreading, power is shifting. People in Europe are starting to feel it. They are anxious, not of losing ‘power’, but of losing their jobs, of declining welfare, as a consequence of a global competition. This requires a political answer. The EU Member States (MS) need to be strong and united. Therefore, the two most important domains of the EurC are economic policy and foreign policy. Simply put: economic policy to be strong, foreign policy to be united.
I have put economic growth at the top of the EU’s agenda. In the Solvay meeting, all agreed that we need better coordination in structural economic reform. Both for macroeconomics (certainly in the euro area) and for microeconomics. All EuroC members were willing to take more responsibility for these, and such personal involvement is indispensable.
The financial and economic crisis obliges us to take steps on this road to the “economic governance” or “gouvernement économique” of the Union. Jobs and growth are of utmost importance for the daily lives of all our citizens.The result of our economic efforts also determines our place in the world. An economically weak Europe is prone to lose its political importance. Economic growth can make us strong but we also need a second element, we must also be united.
This brings me to foreign policy proper. When the Cold War was over, the EuroC recognized that Europe needed a stronger presence on the international stage. A lot has been achieved, especially since Javier Solana. became the first High Representative for Common Foreign and Security Policy in 1999. Today, the Union has missions on the ground with thousands of people involved – soldiers, policemen, marines and judges – from Afghanistan to Chad, from Kosovo to Somalia. But for the European foreign policy instruments to work optimally, one needs to link them to a common strategic vision.
Where do we go? Who are our partners? Where do we want to be in 10 or 20 years time? Why are we only able to react to US instead of developing a strategy together?
My job is to find consensus; essentially to establish a shared sense of direction. Building a market is different from being a power. In foreign policy you need quick decision and action, whereas our original working method was devised, and works well, as a rule making procedure. Progress in European foreign policy has relied largely on the impulse and the authority of the heads of state or government. Creating an internal market essentially means lifting barriers to trade and involves all the stakeholders. By contrast, in foreign affairs, and especially in security policy, the states themselves are the actors and they take responsibility. That makes a difference in terms of who is willing and able to do what. Therefore we should not be surprised that the more the Union deals with foreign affairs, the more certain differences in attitude between MS will arise. History and geography play an important role in foreign policy. This is not just about large MS versus small MS. It is also about having historic ties with certain regions in the world, or about being an island versus sharing a border with Russia. Even if our unity is our strength, our diversity remains our wealth. Recent developments, however, show that no single European country can on its own set the world political agenda or play a decisive role.
To help find a consensus,new institutions and offices were created, but it does not suffice to create a new institution to solve a problem. This requires consultation between MS. How do I now propose to advance? We have the main elements in place. A global power shift. Economic strength as a necessary condition for political power. Our Union, united in diversity. A need to be patient, even in times of urgency. It is also clear what we have to do. We must channel the tide of globalization.
In foreign policy, the EU has two tasks ahead. Two tracks. The first: we should further develop global economic governance. The foundation of the G20 by the EU was a great step. It is massively important to get key players around the same table. For MS, this requires a stronger coordination of foreign economic policy. It is the external side of the “gouvernement économique” which we are now developing internally.
This would be a good starting point for two reasons. The first is that internal economic policy coordination without a common external position will not work. In our globalizing world, the inside and the outside are more and more intertwined. Banking regulation cannot be just an internal affair, it is an international affair. Energy policy touches demands of households, but also relations with energy producers worldwide. The euro area needs to reflect on how to step up its external representation in institutions like the IMF.
The other reason I would start here is that the economic side of foreign affairs would lead more fluidly than other subjects to a common stance, to a common policy. We have seen this in the past with trade. The field of foreign economic relations is the most promising vector for Europe to speak with one voice in the world.
With the G20 we now have an appropriate forum to develop this.
The second track: we need to review and strengthen our relationship with key partners, above all the US, Canada, Russia, China, Japan, India and Brazil. You need more than the conviction that your proposal is the best, to win others over. To get in the deal-making game, the Union needs to assert itself politically. The first step is to carefully choose our allies, to reflect about what we can do together with them.
The most appropriate partner in many fields remains the US. The attachment of our American friends to good transatlantic relations will remain. In spite of current impressions, it will only get stronger in the coming years. With other partners we need to have a fair and transparent dialogue. Neither naivety nor superfluous
confrontation. We should send out consistent signals; it is the only way to be reliable and efficient. All world actors should acknowledge, however, that participating in ‘global governance’ entails not only rights but also obligations. We should avoid that the UN Climate Conference, the DOHA trade round or the reforms within the international monetary and financial system grind to a halt.
This requires continuous reflection at the EurC level on the common strategic direction which the EU takes. We are often caught between “the one” and “the many”, between “the whole” and “the parts”. This tension is part of our identity. The génie européen is to invent ever new ways to deal with this tension. The 27 EU governments are all connected, economically and monetarily. One of my tasks is to to find a consensus about where to go. To reestablish a sense of strategic direction. I consider it the most daunting political task of the office of permanent President to help the Union find its compass. I am convinced that we Europeans are able to break the waves, to weather the storms, and to steer our beloved convoy through the tides ahead. We have that choice. It is up to us to take it.