by Tomas Valasek
There shall be no war, at least not now. On Sunday, President Viktor Yushchenko and Prime Minister Viktor Yanukovich agreed to hold early elections in September. In doing so, they halted the country’s slide toward violence, which began with Yushchenko’s dissolution of the Ukrainian parliament in April and culminated this weekend with a standoff between Interior Ministry troops (loyal to Yushchenko) and traffic police (controlled by Yanukovich). But even if the Sunday agreement holds – and law-makers from the prime minister’s side already dispute it – Ukraine has become an uglier place for it. In the end, it was political and military muscle that settled the differences. A conflict may have been averted but Ukraine’s tentative steps to build democracy based on rules and institutions were dealt a severe blow.
The political damage is all too clear. Like two elephants jostling in the jungle, Yanukovich and Yushchenko have trampled over Ukraine’s fragile democratic institutions. Yanukovich rewrote the presidential competences – a constitutional matter – without the necessary super-majority in the parliament. He then proceeded to build a constitutional majority by bribing parliamentarians (or so everyone in Ukraine believes). Faced with a political death by a thousand cuts, Yushchenko dismissed the parliament in April and called for new elections in summer. But his first decree on dissolution was so blatantly illegal that he himself tore it up and issued another one. When Ukraine’s constitutional court moved close to finding the second decree, too, unconstitutional, the president declared the court corrupt and ordered his prosecutor-general to investigate the judges. The list of trespasses could go on.
It is unclear whether, following the melee, the political elites and the public can ever recover trust in the democratic system. That would be a double tragedy. In the 16 years since independence, Ukraine has built an original but functioning political system, with big business directly controlling all major political parties as well as the executive and legislative branches. It could probably be best described as an oligodemocracy and while its inner workings are as convoluted as the term itself, it has served the country well, for the most part. When it did appear to be failing – as when former President Leonid Kuchma and his designated successor, Yanukovich, attempted to steal elections in 2004 – people power intervened. The Orange Revolution was the ordinary Ukrainian’s way of telling the oligarchs that they can keep running the country but they have to respect a modicum of democratic principles. The revolution also opened a chance for Ukraine to build a more stable system based on universally accepted rules and institutions, such as a constitution and courts. But now, the crisis damaged the credibility of the institutions, and it also cast doubt on the continued role of people power in Ukraine’s political life.
Ukraine’s politics is an open marketplace that trades not ideas but power. The parliament and all the main parties are controlled by powerful business people who, in turn, seek mostly to protect their gains and their access to yet more money. Ideology, for all the slogans behind the Orange Revolution, has little place in Kyiv’s day-to-day politics. Yet, the country has remained strongly democratic in one important way. Its oligarchs are in full-blown competition with each other. They also seem to have come to agreement that democracy, meaning an open political competition between parties that represent their interests, is a useful way of preventing any one of them from accruing too much power, and that power- (and profit-)sharing is a better arrangement than an all-out clash, which could destroy their economic base.
And yet, even though all main actors seem to understand the need to work with each other (Yanukovich and Yushchenko met daily during the current crisis), they seem almost pathologically incapable of doing so on any constructive and consistent basis. Yanukovich in particular deserves the blame. He had barely assumed the prime ministerial chair when he set about dismantling the limited authority of the one remaining power centre outside his control: President Yushchenko and his National Security and Defence Council. Instead of co-operation, Yanukovich showed an immediate urge to rid himself of any constraint on power.
This is consistent with Yanukovich’s role in 2004, when he helped rig the elections to prevent a handover of the presidency to Yushchenko. Yanukovich and the oligarchs he represents, such as Ukraine’s richest businessman, Rinat Akhmetov, show too little confidence in their ability to protect their gains and interests in an open political environment. That’s the flaw in the oligodemocratic model. Ukraine has few democratic traditions or institutions to speak of; the model functions only when and if all key business and political players believe it to be to their advantage and when they co-operate to maintain it. Every now and then – such as during the latest crisis – the leaders seem more interested in revenge than order. Yanukovich seems unable to make up his mind. Oligodemocracy brought him back to power: he won free and fair elections in 2006. Since returning to government Yanukovich said all the right things about the importance of free elections. Yet his acts showed little confidence in democracy’s other key principles, such as checks and balances and constructive opposition.
When that happened in the past, in 2004, the people intervened to put Yanukovich back on the right track. Spontaneous and by all accounts surprisingly vigorous demonstrations forced him to call – and ultimately loose – repeat elections. Popular will is the safety switch of oligodemocracy. So perhaps the most worrying aspect of the current crisis is the complete absence of popular outrage at Yushchenko’s and Yanukovich’s blatantly unconstitutional deeds. Life in Kyiv went on as normal, notwithstanding the few thousand-strong rent-a-crowds demonstrating in support of Yanukovich (bussed in from the countryside, all expenses paid, and more interested in the sights than politics). The Dynamo Kyiv – Shahtar Donetsk football game drew a far bigger crowd on Sunday, at the height of the crisis, than Maidan, the downtown square made legendary by the Orange Revolution.
Many Ukrainians believe that things are not serious, that Yanukovich and Yushchenko are posturing, and that they will eventually find a solution. The Sunday agreement would seem to bear them out. But even so, that is a deeply cynical and ultimately self-defeating stance. Yanukovich and Yushchenko may have reached an agreement, but it came at far too great a political cost. The credibility of key institutions – parliament, constitutional court and the police – is in tatters. Things should have never come this far.
More others are simply disillusioned. There are no more heroes and villains. Yushchenko has turned out to be every bit as ruthless in tearing up the constitution as Yanukovich himself – if not more. He also fell out with Yulia Tymoshenko, another fallen hero of the Orange Revolution, and it was their squabbles that essentially handed power back to Yanukovich. Unlike in 2004, there is little to demonstrate for, only against. The safety switch seems to have burnt out. Next time another power struggle breaks out, why should anyone care for what people have to say? Ukraine’s oligodemocracy may be in real trouble now.
Tomas Valasek is director of foreign policy at defence at the Centre for European Reform.
Thursday, May 31, 2007
Thursday, May 17, 2007
If Nixon could go to China, Brown can go to Brussels
by Hugo Brady
W.B. Yeats lamented a Europe where, in politics at least, “the best lack all conviction while the worst are full of passionate intensity”. As Tony Blair bows out as UK prime minister, British pro-Europeans will identify with his sentiments.
The British eurosceptic lobby and media have reorganised, regrouped and become more sophisticated in recent years. The predominantly eurosceptic Conservative party could be back in power by 2009. And Blair, the first convinced pro-European in a generation to occupy 10 Downing Street, leaves office with his ambition to change the terms of the tortured British debate on Europe utterly unfulfilled. His certain successor, Gordon Brown, a Euro-agnostic at best, thinks talk of EU integration is an old hat.
Blair’s European legacy is no unmitigated failure. True, he has not managed to make Britons sentimental about their membership of the EU. But he has done much to strengthen Britain’s standing in Europe, advancing British priorities constructively and cleverly. With France in 1998, Blair launched the European security and defence policy, giving the EU a military capability for the first time. While promoting closer European co-ordination on immigration and counter-terrorism, he simultaneously pushed British ideas and priorities in these areas. And in 2005 Blair used his time as head of the European Council to re-focus the EU from debate on treaty change to issues that matter for the people, such as jobs, energy and migration.
No, his failure has been a missed opportunity to challenge British domestic attitudes towards the EU. Britons have never been more familiarised and at ease with their European neighbours. Yet – fed on a regular diet of tabloid hostility – voters remain suspicious and resentful of the EU. Things might have been different, argued the Financial Times, if Blair “had given half the time he devoted to Iraq to Europe”. See http://www.ft.com/cms/s/69df13dc-efa4-11db-a64e-000b5df10621.html. Last week Michael Howard, leader of the Tory party during the Iraq crisis, admitted that he had been “terrified” Blair would do just this: use his unique powers of persuasion to change the British European debate forever.
That would be a tall order, even for Blair. Forces outside of his own control robbed him of the opportunity to wade into such a debate. Blair committed to referendums on British membership of the euro and, some say foolishly, the European constitution. Both would have involved a tough, but possibly cathartic, public debate on Britain’s European identity. But Chancellor Brown ruled out the prospect of euro membership. And events outside Britain killed off the constitution.
One could also argue that the man who famously told the French Senate “je suis un homme d’Europe” could not have sold the treaty to a sceptical British public and hysterical media. Blair’s messianic style, so relied upon to make the case for Iraq, would have been ill-suited to selling this complex treaty with constitutional pretensions.
In fact, the chancellor’s less indulgent stance on Europe, proud sense of Britishness and conviction politics are a great asset to British pro-Europeans. Brown’s instincts on Europe are more representative of the public than Blair’s. Only he can strike a new deal on changes to the EU’s treaties and convince the UK parliament and media that such an agreement is worthwhile and safeguards British interests. He will enjoy another opportunity to move forward the UK's European debate, albeit in a more incremental way that sits more comfortably with notions of British identity.
Historians like to say that only Richard Nixon – a conservative Republican with an uncompromising stance on communism – could “go to China” in the 1970s and re-establish US-Chinese relations. Is it too tongue-in-cheek to make the same parallel with Brown’s perceived euroscepticism? Pro-Europeans in Britain should not be so glum.
Hugo Brady is a research fellow at the Centre for European Reform.
W.B. Yeats lamented a Europe where, in politics at least, “the best lack all conviction while the worst are full of passionate intensity”. As Tony Blair bows out as UK prime minister, British pro-Europeans will identify with his sentiments.
The British eurosceptic lobby and media have reorganised, regrouped and become more sophisticated in recent years. The predominantly eurosceptic Conservative party could be back in power by 2009. And Blair, the first convinced pro-European in a generation to occupy 10 Downing Street, leaves office with his ambition to change the terms of the tortured British debate on Europe utterly unfulfilled. His certain successor, Gordon Brown, a Euro-agnostic at best, thinks talk of EU integration is an old hat.
Blair’s European legacy is no unmitigated failure. True, he has not managed to make Britons sentimental about their membership of the EU. But he has done much to strengthen Britain’s standing in Europe, advancing British priorities constructively and cleverly. With France in 1998, Blair launched the European security and defence policy, giving the EU a military capability for the first time. While promoting closer European co-ordination on immigration and counter-terrorism, he simultaneously pushed British ideas and priorities in these areas. And in 2005 Blair used his time as head of the European Council to re-focus the EU from debate on treaty change to issues that matter for the people, such as jobs, energy and migration.
No, his failure has been a missed opportunity to challenge British domestic attitudes towards the EU. Britons have never been more familiarised and at ease with their European neighbours. Yet – fed on a regular diet of tabloid hostility – voters remain suspicious and resentful of the EU. Things might have been different, argued the Financial Times, if Blair “had given half the time he devoted to Iraq to Europe”. See http://www.ft.com/cms/s/69df13dc-efa4-11db-a64e-000b5df10621.html. Last week Michael Howard, leader of the Tory party during the Iraq crisis, admitted that he had been “terrified” Blair would do just this: use his unique powers of persuasion to change the British European debate forever.
That would be a tall order, even for Blair. Forces outside of his own control robbed him of the opportunity to wade into such a debate. Blair committed to referendums on British membership of the euro and, some say foolishly, the European constitution. Both would have involved a tough, but possibly cathartic, public debate on Britain’s European identity. But Chancellor Brown ruled out the prospect of euro membership. And events outside Britain killed off the constitution.
One could also argue that the man who famously told the French Senate “je suis un homme d’Europe” could not have sold the treaty to a sceptical British public and hysterical media. Blair’s messianic style, so relied upon to make the case for Iraq, would have been ill-suited to selling this complex treaty with constitutional pretensions.
In fact, the chancellor’s less indulgent stance on Europe, proud sense of Britishness and conviction politics are a great asset to British pro-Europeans. Brown’s instincts on Europe are more representative of the public than Blair’s. Only he can strike a new deal on changes to the EU’s treaties and convince the UK parliament and media that such an agreement is worthwhile and safeguards British interests. He will enjoy another opportunity to move forward the UK's European debate, albeit in a more incremental way that sits more comfortably with notions of British identity.
Historians like to say that only Richard Nixon – a conservative Republican with an uncompromising stance on communism – could “go to China” in the 1970s and re-establish US-Chinese relations. Is it too tongue-in-cheek to make the same parallel with Brown’s perceived euroscepticism? Pro-Europeans in Britain should not be so glum.
Hugo Brady is a research fellow at the Centre for European Reform.
Tuesday, May 08, 2007
Nicolas Sarkozy: Turkophobe and protectionist?
By Charles Grant
Most EU governments wanted Nicolas Sarkozy to win the presidential election. They think his liberalising economic agenda stands a fair chance of boosting France’s lacklustre economic performance. And they believe that his support for a ‘mini-treaty’ will make it easier for Chancellor Angela Merkel to get the whole EU behind her plans for an ‘amending treaty’ that would save parts of constitutional treaty. Furthermore, several governments – including that in London – are particularly happy that Sarkozy says he will not hold a referendum on any new EU treaty, since that diminishes the pressure on them to hold referendums of their own.
However, on two subjects Sarkozy worries other European governments: Turkey and protectionism. He has made his opposition to Turkish membership of the EU very clear, suggesting that instead it could join a ‘Mediterranean Union’. Most European leaders – including Merkel, who is no fan of Turkish membership – believe it crucial to maintain the process of Turkish accession, whatever its long-term outcome. They would echo what Ségolène Royal had the courage to remark during her TV duel with Sarkozy, namely that to slam the door in Turkey’s face could destabilise the country’s fragile democracy. An end to the accession talks would certainly strengthen the authoritarian Turkish nationalists who oppose closer ties with the EU.
I have no doubt that leaders such as Merkel, Tony Blair, José Manuel Barroso and George Bush will all ask Sarkozy to moderate his line on Turkey. They will tell him: by all means say you will oppose Turkish membership, if and when the accession talks conclude; but for the time being let the talks continue, for they play an important role in promoting economic and political reform in Turkey.
Sarkozy could disregard that advice, and give greater priority to his domestic opinion poll ratings, in which case his election would be very bad news for Turkey. But he might well think it in his self-interest to avoid annoying a group of the world’s most influential leaders, with whom he will have to work on many other subjects. So I would not be surprised if he lets the accession talks continue. If he does, the Turks may even – one day – welcome his coming to power. That is because he offers a real prospect of reviving the French economy. And I don’t believe the French will ever vote in referendums in favour of new EU members, so long as they feel insecure about their future, threatened by unemployment, and hostile to globalisation. Sarkozy offers France at least a chance of breaking out of its vicious circle of slow growth, introspection and lack of confidence.
The other worry about Sarkozy is the apparent contradiction in his thinking. He supports Thatcherite policies at home – he promises to slim the state, cut taxes and liberalise labour markets – but attacks the Commission’s trade and competition policies, as well as the monetary policy of the European Central Bank. In his first speech as president-elect, he asked France’s partners “to hear the voice of the peoples who want to be protected”. In his recent book, I was struck by his vehement opposition to the foreign ownership of French companies (for my review of this book in Prospect, see http://www.cer.org.uk/articles/grant_prospect_march07.html). I suspect that his support for economic autarky reflects what he really thinks, and that he does not say it merely to win votes. But its impact on voters should not be ignored. As Jean Pisani-Ferry of the Bruegel think-tank notes, “In a country where 55% of voters rejected the EU constitution on economic grounds and more than 70% see globalisation as a threat, a sure recipe for losing support is to wear the clothes of the Brussels-Frankfurt orthodoxy.” (See http://www.eurointelligence.com/article.581+M5c348ce2a46.0.html.)
If Sarkozy does try to combine economic liberalism at home with protectionism at EU level, he will be heading for a big clash with his EU partners – most of whom support the EU’s broadly liberal trade and competition policies. However, as with the case of Turkey, his astute understanding of power-politics, and his strong desire to be an influential European leader, may moderate his hostility to the Brussels orthodoxy. If he wants other EU leaders to do him favours on issues that matter to France – and he will – he will have to learn to play the European game. And that means treating the Commission and its policies with some respect.
Furthermore, Sarkozy is unlikely to share Chirac’s visceral hostility to reform of EU farm policy – Chirac had been a farm minister and prided himself on his rural roots, which Sarkozy does not have. In any case, whatever Sarkozy’s own views on foreign investment and foreign trade, if he succeeds in reviving the French economy, the pressure from French voters for protectionism will dwindle.
Charles Grant is director of the Centre for European Reform.
By Charles Grant
Most EU governments wanted Nicolas Sarkozy to win the presidential election. They think his liberalising economic agenda stands a fair chance of boosting France’s lacklustre economic performance. And they believe that his support for a ‘mini-treaty’ will make it easier for Chancellor Angela Merkel to get the whole EU behind her plans for an ‘amending treaty’ that would save parts of constitutional treaty. Furthermore, several governments – including that in London – are particularly happy that Sarkozy says he will not hold a referendum on any new EU treaty, since that diminishes the pressure on them to hold referendums of their own.
However, on two subjects Sarkozy worries other European governments: Turkey and protectionism. He has made his opposition to Turkish membership of the EU very clear, suggesting that instead it could join a ‘Mediterranean Union’. Most European leaders – including Merkel, who is no fan of Turkish membership – believe it crucial to maintain the process of Turkish accession, whatever its long-term outcome. They would echo what Ségolène Royal had the courage to remark during her TV duel with Sarkozy, namely that to slam the door in Turkey’s face could destabilise the country’s fragile democracy. An end to the accession talks would certainly strengthen the authoritarian Turkish nationalists who oppose closer ties with the EU.
I have no doubt that leaders such as Merkel, Tony Blair, José Manuel Barroso and George Bush will all ask Sarkozy to moderate his line on Turkey. They will tell him: by all means say you will oppose Turkish membership, if and when the accession talks conclude; but for the time being let the talks continue, for they play an important role in promoting economic and political reform in Turkey.
Sarkozy could disregard that advice, and give greater priority to his domestic opinion poll ratings, in which case his election would be very bad news for Turkey. But he might well think it in his self-interest to avoid annoying a group of the world’s most influential leaders, with whom he will have to work on many other subjects. So I would not be surprised if he lets the accession talks continue. If he does, the Turks may even – one day – welcome his coming to power. That is because he offers a real prospect of reviving the French economy. And I don’t believe the French will ever vote in referendums in favour of new EU members, so long as they feel insecure about their future, threatened by unemployment, and hostile to globalisation. Sarkozy offers France at least a chance of breaking out of its vicious circle of slow growth, introspection and lack of confidence.
The other worry about Sarkozy is the apparent contradiction in his thinking. He supports Thatcherite policies at home – he promises to slim the state, cut taxes and liberalise labour markets – but attacks the Commission’s trade and competition policies, as well as the monetary policy of the European Central Bank. In his first speech as president-elect, he asked France’s partners “to hear the voice of the peoples who want to be protected”. In his recent book, I was struck by his vehement opposition to the foreign ownership of French companies (for my review of this book in Prospect, see http://www.cer.org.uk/articles/grant_prospect_march07.html). I suspect that his support for economic autarky reflects what he really thinks, and that he does not say it merely to win votes. But its impact on voters should not be ignored. As Jean Pisani-Ferry of the Bruegel think-tank notes, “In a country where 55% of voters rejected the EU constitution on economic grounds and more than 70% see globalisation as a threat, a sure recipe for losing support is to wear the clothes of the Brussels-Frankfurt orthodoxy.” (See http://www.eurointelligence.com/article.581+M5c348ce2a46.0.html.)
If Sarkozy does try to combine economic liberalism at home with protectionism at EU level, he will be heading for a big clash with his EU partners – most of whom support the EU’s broadly liberal trade and competition policies. However, as with the case of Turkey, his astute understanding of power-politics, and his strong desire to be an influential European leader, may moderate his hostility to the Brussels orthodoxy. If he wants other EU leaders to do him favours on issues that matter to France – and he will – he will have to learn to play the European game. And that means treating the Commission and its policies with some respect.
Furthermore, Sarkozy is unlikely to share Chirac’s visceral hostility to reform of EU farm policy – Chirac had been a farm minister and prided himself on his rural roots, which Sarkozy does not have. In any case, whatever Sarkozy’s own views on foreign investment and foreign trade, if he succeeds in reviving the French economy, the pressure from French voters for protectionism will dwindle.
Charles Grant is director of the Centre for European Reform.
Thursday, May 03, 2007
What Turkey’s crisis means for the EU
by Katinka Barysch
Turkey has aborted its presidential election and called for an early parliamentary one. The army, it appears, is still on stand-by. Prime Minister Erdogan accused the country’s highest court of having fired “a bullet at democracy” by declaring the first round of voting on his presidential candidate, Abdullah Gul, invalid.
As the drama unfolded, the EU remained largely silent – as it should. The current stand-off in Turkey is about secularism, about the mix of religion and politics, and about the role of an army that has traditionally seen itself as the defender of the Kemalist constitution. These are issues that the EU does not have much to say about. Individual EU countries would offer rather different answers. France would probably have a problem with a head-scarf wearing presidential spouse. The UK might well be more relaxed about it. All Europeans would abhor military intervention in politics. And few would share the army’s fear that a Gul presidency could tilt Turkey towards Islamism.
What matters for the continuation of the EU accession process is not who become the next Turkish president, but the way he is chosen. Democracy is about process, not personalities. Enlargement Commissioner Olli Rehn has rightly sent a thinly veiled warning to the Turkish generals to stay out of politics and respect the rules of democracy.
If the army interfered actively in the process, the EU would have to freeze the membership talks. The fulfilment of the political part of the Copenhagen accession criteria is a precondition for conducting negotiations. Turkey could not plausibly claim to have a ‘well-functioning democracy’ if unelected generals had the last say in politics.
But if the army keeps making angry noises but otherwise stays on the sidelines, the accession process can and should continue. Indeed, the current turmoil could be a sign that Turkish democracy is maturing. Turkey may be undergoing a necessary – though stressful – convulsion on the way to a more solid and stable democracy. It may be dawning on the generals that in a ‘well-functioning democracy’ they can no longer be the ultimate arbiter of who runs the country. If Turkey gets through the current crisis with its democratic institutions intact, it will have taken another important step towards becoming a mainstream European country.
Katinka Barysch is chief economist at the Centre for European Reform.
by Katinka Barysch
Turkey has aborted its presidential election and called for an early parliamentary one. The army, it appears, is still on stand-by. Prime Minister Erdogan accused the country’s highest court of having fired “a bullet at democracy” by declaring the first round of voting on his presidential candidate, Abdullah Gul, invalid.
As the drama unfolded, the EU remained largely silent – as it should. The current stand-off in Turkey is about secularism, about the mix of religion and politics, and about the role of an army that has traditionally seen itself as the defender of the Kemalist constitution. These are issues that the EU does not have much to say about. Individual EU countries would offer rather different answers. France would probably have a problem with a head-scarf wearing presidential spouse. The UK might well be more relaxed about it. All Europeans would abhor military intervention in politics. And few would share the army’s fear that a Gul presidency could tilt Turkey towards Islamism.
What matters for the continuation of the EU accession process is not who become the next Turkish president, but the way he is chosen. Democracy is about process, not personalities. Enlargement Commissioner Olli Rehn has rightly sent a thinly veiled warning to the Turkish generals to stay out of politics and respect the rules of democracy.
If the army interfered actively in the process, the EU would have to freeze the membership talks. The fulfilment of the political part of the Copenhagen accession criteria is a precondition for conducting negotiations. Turkey could not plausibly claim to have a ‘well-functioning democracy’ if unelected generals had the last say in politics.
But if the army keeps making angry noises but otherwise stays on the sidelines, the accession process can and should continue. Indeed, the current turmoil could be a sign that Turkish democracy is maturing. Turkey may be undergoing a necessary – though stressful – convulsion on the way to a more solid and stable democracy. It may be dawning on the generals that in a ‘well-functioning democracy’ they can no longer be the ultimate arbiter of who runs the country. If Turkey gets through the current crisis with its democratic institutions intact, it will have taken another important step towards becoming a mainstream European country.
Katinka Barysch is chief economist at the Centre for European Reform.
Friday, April 27, 2007
The EU and Arab reform
by Charles Grant and Tomas Valasek
The Arab Reform Initiative held its annual conference in Amman, Jordan, on 18th April. Founded in 2005, ARI is a consortium of a dozen research centres that advocate peaceful and gradual political, economic and social reform in the region. A few non-Arab think-tanks are also involved, including the Centre for European Reform, but it is very much led and managed by Arab research centres (the CER’s own website has a page on the ARI see http://www.cer.org.uk/ari_new/index_ari_new.html). The CER is part of ARI because it believes that ARI offers an excellent opportunity to encourage reform in a region that is deeply suspicious of outside influence.
The mood among the Arab think-tankers in Amman was relatively bleak. Prince Turki Al Faisal of Saudi Arabia set the tone. The prince is known for being both strongly pro-reform and somewhat sceptical of the United States, despite having served as ambassador in Washington until recently. However, as he said, US influence is increasingly corrosive of the very cause of reform in the Middle East. The invasion of Iraq – which the prince described as ‘illegitimate’ – had been particularly damaging. The message that Arab reformers took from the conflict and its aftermath was that solutions devised outside the region would not work, and that they must distance themselves from Washington if they are to have credibility with their own people.
The second blow for reformers was the West’s reaction to the 2006 elections in Palestine that brought Hamas to power. Khalil Shikaki, a respected Palestinian researcher, noted that the refusal by Washington to engage a legitimately elected Hamas government sent a terrible message, showing contempt for free and fair elections. In doing so Washington had sided with the entrenched authoritarian elite in Fatah, which had been discredited in the eyes of many Palestinians. And by throwing its support behind President Abbas and strengthening his office at the expense of the Prime Minister, even directly funding the presidential guard, Washington had undermined the Palestinian constitution. Not surprisingly, concluded Khalil Shaliki, support for democracy among the Palestinians had dropped after the events of the last year.
There is no doubt an argument to be made that without a heavy US intervention in the form of the Afganistan and Iraq wars reforms may never have become as prominent an issue as they are today. By jumpstarting the movement even at the expense of damage to its popularity, Washington may already have accomplished its most important goal in the region. This will be a question for historians to resolve. For the time being, US influence on Arab governments and societies seems at an all-time low. Reforms must indeed come principally from within, from the relevant governments and initiatives such as ARI. Nevertheless, one outside body, the European Union, can play a legitimate supporting role. In fact there is probably no greater challenge for Europe than getting its relationship with the Muslim world right. Because of the intertwined nature of European and Middle Eastern societies, Europeans have more direct interest than Americans in wanting to encourage reform in the Arab world.
The EU does have its ‘Barcelona process’, through which it tries to promote closer political and economic ties with the Mediterranean states. But though this process has soaked up billions of euros of EU money, nobody seems to think that it has achieved a great deal. One problem has been the reluctance of the governments in the region to accept the concept of conditionality – the idea that they should only get trade and aid if they behave in certain ways – and the reluctance of EU governments to apply that principle.
The EU also has its ‘neighbourhood policy’, which now applies to several Arab countries. The EU has agreed ‘action plans’ with Jordan, Morocco, the Palestinian Authority, Tunisia and Egypt. The EU promises closer relations with the countries concerned in return for their fulfilling promises to reform. The neighbourhood policy includes the concept of ‘positive conditionality’, rewarding good performers with extra funds, which may be easier to apply politically than old-fashioned negative conditionality. Jordan has been a star pupil and thus won extra EU funds in 2006.
The Barcelona process and the neighbourhood policy have undoubtedly done some good in some ways. But ultimately what affects Arab views of the EU is its performance on the Middle East peace process. And to judge from the mood in Amman, most Arab intellectuals have a poor view of the EU’s role. Last summer, when Israel invaded Lebanon, the EU’s initial inability to condemn the act as ‘disproportionate’ – because of the reluctance of the UK and some others to break from the US line – was noted with contempt. More recently, the EU’s divisions over whether to talk to Syria and Hamas have not impressed Arab think-tanks.
Indeed, Bassma Kodmani, the feisty lady who runs the ARI, remarked that the EU’s efforts to forge a common foreign policy were benefiting no one. The European insistence on unity meant that the EU could not engage with Hamas – though the Swiss and the Norwegians were doing so. She said it would be much better for those EU countries that were willing and able to engage with Hamas to do so on their own.
Such frustration with the slowness of EU decision-making is understandable. But in fact Arab think-tanks should not oppose the EU’s efforts to forge a common line. When it does pursue such a line, as it has done on Iran, it can make a difference and influence the behaviour of others. A united EU has more potential to shift the policy of Israel or the US than half a dozen EU states forming a sub-group of their own.
Many Arab think-tankers now seem to think that the EU is no better than the US. Indeed they cite the example of the EU’s diplomacy over Iran as an example of its ‘doing the US’s bidding’. Although many Arab governments are suspicious of Iran’s nuclear plans, Arab researchers criticise the EU’s diplomatic efforts to prevent Iran developing a nuclear bomb. Iranian President Ahmedi-Nejad has become a popular figure in many Arab countries, on account of his standing up to the West. At the ARI conference, when a CER panellist defended the EU’s Iranian diplomacy, pointing out that it was not only the ‘West’, but also Russia, India, China, Mohammed el-Baradei and the UNSC who were trying to persuade Iran not to build a bomb, Prince Turki nodded in approval. But nobody else did.
The EU faces few more difficult tasks than balancing its interest in continued close transatlantic relations with a stronger European role in the Middle East.
Charles Grant is director and Tomas Valasek is director of foreign policy & defence at the Centre for European Reform.
by Charles Grant and Tomas Valasek
The Arab Reform Initiative held its annual conference in Amman, Jordan, on 18th April. Founded in 2005, ARI is a consortium of a dozen research centres that advocate peaceful and gradual political, economic and social reform in the region. A few non-Arab think-tanks are also involved, including the Centre for European Reform, but it is very much led and managed by Arab research centres (the CER’s own website has a page on the ARI see http://www.cer.org.uk/ari_new/index_ari_new.html). The CER is part of ARI because it believes that ARI offers an excellent opportunity to encourage reform in a region that is deeply suspicious of outside influence.
The mood among the Arab think-tankers in Amman was relatively bleak. Prince Turki Al Faisal of Saudi Arabia set the tone. The prince is known for being both strongly pro-reform and somewhat sceptical of the United States, despite having served as ambassador in Washington until recently. However, as he said, US influence is increasingly corrosive of the very cause of reform in the Middle East. The invasion of Iraq – which the prince described as ‘illegitimate’ – had been particularly damaging. The message that Arab reformers took from the conflict and its aftermath was that solutions devised outside the region would not work, and that they must distance themselves from Washington if they are to have credibility with their own people.
The second blow for reformers was the West’s reaction to the 2006 elections in Palestine that brought Hamas to power. Khalil Shikaki, a respected Palestinian researcher, noted that the refusal by Washington to engage a legitimately elected Hamas government sent a terrible message, showing contempt for free and fair elections. In doing so Washington had sided with the entrenched authoritarian elite in Fatah, which had been discredited in the eyes of many Palestinians. And by throwing its support behind President Abbas and strengthening his office at the expense of the Prime Minister, even directly funding the presidential guard, Washington had undermined the Palestinian constitution. Not surprisingly, concluded Khalil Shaliki, support for democracy among the Palestinians had dropped after the events of the last year.
There is no doubt an argument to be made that without a heavy US intervention in the form of the Afganistan and Iraq wars reforms may never have become as prominent an issue as they are today. By jumpstarting the movement even at the expense of damage to its popularity, Washington may already have accomplished its most important goal in the region. This will be a question for historians to resolve. For the time being, US influence on Arab governments and societies seems at an all-time low. Reforms must indeed come principally from within, from the relevant governments and initiatives such as ARI. Nevertheless, one outside body, the European Union, can play a legitimate supporting role. In fact there is probably no greater challenge for Europe than getting its relationship with the Muslim world right. Because of the intertwined nature of European and Middle Eastern societies, Europeans have more direct interest than Americans in wanting to encourage reform in the Arab world.
The EU does have its ‘Barcelona process’, through which it tries to promote closer political and economic ties with the Mediterranean states. But though this process has soaked up billions of euros of EU money, nobody seems to think that it has achieved a great deal. One problem has been the reluctance of the governments in the region to accept the concept of conditionality – the idea that they should only get trade and aid if they behave in certain ways – and the reluctance of EU governments to apply that principle.
The EU also has its ‘neighbourhood policy’, which now applies to several Arab countries. The EU has agreed ‘action plans’ with Jordan, Morocco, the Palestinian Authority, Tunisia and Egypt. The EU promises closer relations with the countries concerned in return for their fulfilling promises to reform. The neighbourhood policy includes the concept of ‘positive conditionality’, rewarding good performers with extra funds, which may be easier to apply politically than old-fashioned negative conditionality. Jordan has been a star pupil and thus won extra EU funds in 2006.
The Barcelona process and the neighbourhood policy have undoubtedly done some good in some ways. But ultimately what affects Arab views of the EU is its performance on the Middle East peace process. And to judge from the mood in Amman, most Arab intellectuals have a poor view of the EU’s role. Last summer, when Israel invaded Lebanon, the EU’s initial inability to condemn the act as ‘disproportionate’ – because of the reluctance of the UK and some others to break from the US line – was noted with contempt. More recently, the EU’s divisions over whether to talk to Syria and Hamas have not impressed Arab think-tanks.
Indeed, Bassma Kodmani, the feisty lady who runs the ARI, remarked that the EU’s efforts to forge a common foreign policy were benefiting no one. The European insistence on unity meant that the EU could not engage with Hamas – though the Swiss and the Norwegians were doing so. She said it would be much better for those EU countries that were willing and able to engage with Hamas to do so on their own.
Such frustration with the slowness of EU decision-making is understandable. But in fact Arab think-tanks should not oppose the EU’s efforts to forge a common line. When it does pursue such a line, as it has done on Iran, it can make a difference and influence the behaviour of others. A united EU has more potential to shift the policy of Israel or the US than half a dozen EU states forming a sub-group of their own.
Many Arab think-tankers now seem to think that the EU is no better than the US. Indeed they cite the example of the EU’s diplomacy over Iran as an example of its ‘doing the US’s bidding’. Although many Arab governments are suspicious of Iran’s nuclear plans, Arab researchers criticise the EU’s diplomatic efforts to prevent Iran developing a nuclear bomb. Iranian President Ahmedi-Nejad has become a popular figure in many Arab countries, on account of his standing up to the West. At the ARI conference, when a CER panellist defended the EU’s Iranian diplomacy, pointing out that it was not only the ‘West’, but also Russia, India, China, Mohammed el-Baradei and the UNSC who were trying to persuade Iran not to build a bomb, Prince Turki nodded in approval. But nobody else did.
The EU faces few more difficult tasks than balancing its interest in continued close transatlantic relations with a stronger European role in the Middle East.
Charles Grant is director and Tomas Valasek is director of foreign policy & defence at the Centre for European Reform.
Friday, April 20, 2007
Globalisation: business versus politics?
by Katinka Barysch
The CER and Accenture brought together a group of business people, journalists and policy analysts today, to discuss what the world may look like in 2020. What struck me is that there is not one debate about globalisation but several. And they hardly touch.
Business people and bankers tend to take globalisation as a given and ask how governments, businesses and workers can make the most of it. Journalists, think-tankers and politicians are more likely to ask whether globalisation is good or bad. The assumption is that it can be managed.
Two recent publications encapsulate these different approaches. Both extrapolate current trends and naturally conclude that China, India, Brazil, Russia and other emerging markets will be big global players in 2020. Mark Leonard (in his CER essay ‘Divided world: The struggle for supremacy’) then argues that the world will divide along two axis: democracy versus autocracy; and multilateral institutions versus power. Instability could result if the world’s leading states struggle to entice others into their camp.
Accenture’s report on ‘The rise of the multi-polar world’ takes a bottom-up approach. Technology, trade liberalisation and the growing reach of multinational enterprises draw emerging countries into our rules-based global market. This is a world characterised by growing flows of money, people and technology. Multinationals lure Indian programmers to Munich and Palo Alto; new R&D clusters are emerging in China; foreign direct investment last year exceeded $1 trillion.
Both visions are plausible. But are they compatible? Political differences – such as those predicted by Mark Leonard’s – have a tendency to disrupt the kind of economic interdependence that Accenture analyses.
In the scenario of a ‘divided world’, trade and investment could be tools for defending political objectives, and perhaps for spreading ideas. But countries will be less likely to employ economic sanctions to enforce their standards and values abroad. In a globalised world, cutting trade and investment ties simply creates opportunities for others. In its quest for raw materials, China has invested huge sums in African dictatorships shunned by the West. Many African countries now get as much FDI from emerging economies as from the developed world.
In Accenture’s visions, business itself could help to spread practices and underlying values. As Western multinationals move abroad, they bring with them not only money and management but also Western ideas on property rights, social protection and so on. But the flow is no longer one way. Today, 62 of the Fortune 500 companies are from the developing world, and the number is growing fast. Cross-border acquisitions help these companies to enter markets, acquire well-known brands and learn modern management. But the reversal of investment flows makes many Westerners uncomfortable. The debates about Dubai Ports, Aeroflot’s bid for Allitalia or Tata’s acquisition of Corus spring to mind. Russia now insists that European companies can only invest in its oil and gas sector if Gazprom is allowed to buy European downstream assets. Will such demands for ‘reciprocity’ spread? And if so, would the ‘new’ multinationals conform with our local rules or import their own ideas about how to do business or treat workers?
Market forces shape the globalised world, but so do governments. Autocratic countries find it easier to act strategically than democratic ones. If China was a democracy, its voters may well be upset about the costs (as well as the legitimacy) of the government’s Africa policy. Moreover, in democracies the losers from globalisation are making their voices heard. Low-skilled workers who watch imports and immigration erode their wages will vote for politicians promising relief. Protectionism and global leadership do not go together.
These are fascinating questions. There certainly is a need for business and politics to discuss their respective views of globalisation more often.
Katinka Barysch is chief economist at the Centre for European Reform
by Katinka Barysch
The CER and Accenture brought together a group of business people, journalists and policy analysts today, to discuss what the world may look like in 2020. What struck me is that there is not one debate about globalisation but several. And they hardly touch.
Business people and bankers tend to take globalisation as a given and ask how governments, businesses and workers can make the most of it. Journalists, think-tankers and politicians are more likely to ask whether globalisation is good or bad. The assumption is that it can be managed.
Two recent publications encapsulate these different approaches. Both extrapolate current trends and naturally conclude that China, India, Brazil, Russia and other emerging markets will be big global players in 2020. Mark Leonard (in his CER essay ‘Divided world: The struggle for supremacy’) then argues that the world will divide along two axis: democracy versus autocracy; and multilateral institutions versus power. Instability could result if the world’s leading states struggle to entice others into their camp.
Accenture’s report on ‘The rise of the multi-polar world’ takes a bottom-up approach. Technology, trade liberalisation and the growing reach of multinational enterprises draw emerging countries into our rules-based global market. This is a world characterised by growing flows of money, people and technology. Multinationals lure Indian programmers to Munich and Palo Alto; new R&D clusters are emerging in China; foreign direct investment last year exceeded $1 trillion.
Both visions are plausible. But are they compatible? Political differences – such as those predicted by Mark Leonard’s – have a tendency to disrupt the kind of economic interdependence that Accenture analyses.
In the scenario of a ‘divided world’, trade and investment could be tools for defending political objectives, and perhaps for spreading ideas. But countries will be less likely to employ economic sanctions to enforce their standards and values abroad. In a globalised world, cutting trade and investment ties simply creates opportunities for others. In its quest for raw materials, China has invested huge sums in African dictatorships shunned by the West. Many African countries now get as much FDI from emerging economies as from the developed world.
In Accenture’s visions, business itself could help to spread practices and underlying values. As Western multinationals move abroad, they bring with them not only money and management but also Western ideas on property rights, social protection and so on. But the flow is no longer one way. Today, 62 of the Fortune 500 companies are from the developing world, and the number is growing fast. Cross-border acquisitions help these companies to enter markets, acquire well-known brands and learn modern management. But the reversal of investment flows makes many Westerners uncomfortable. The debates about Dubai Ports, Aeroflot’s bid for Allitalia or Tata’s acquisition of Corus spring to mind. Russia now insists that European companies can only invest in its oil and gas sector if Gazprom is allowed to buy European downstream assets. Will such demands for ‘reciprocity’ spread? And if so, would the ‘new’ multinationals conform with our local rules or import their own ideas about how to do business or treat workers?
Market forces shape the globalised world, but so do governments. Autocratic countries find it easier to act strategically than democratic ones. If China was a democracy, its voters may well be upset about the costs (as well as the legitimacy) of the government’s Africa policy. Moreover, in democracies the losers from globalisation are making their voices heard. Low-skilled workers who watch imports and immigration erode their wages will vote for politicians promising relief. Protectionism and global leadership do not go together.
These are fascinating questions. There certainly is a need for business and politics to discuss their respective views of globalisation more often.
Katinka Barysch is chief economist at the Centre for European Reform
Monday, April 16, 2007
The EU, the US and Taiwan
by Charles Grant
Taiwanese domestic politics is nasty and messy. The two main political forces – the KMT, which believes in ‘one China’, and the DPP, which leans towards an independent Taiwan – hate each other with venom that is unmatched in most other functioning democracies. But the country is pluralistic, with a free press and fair elections. Since Taiwan’s politics are so much more ‘western’ than those of the People’s Republic of China (PRC), it ought to have many friends in the western democratic world.
But it has few close friends. Both the Americans and the Europeans know that they must be on good terms with China. It is simply too important, economically and strategically, to have as an enemy. Therefore ministers in most western governments are careful not to meet their Taiwanese counterparts on an official basis, lest China get annoyed. And they tolerate the fact that China excludes Taiwan from many international bodies, such as the World Health Organisation. Of course, there are some policy-makers in the West who think that democracies should stand by other democracies. The much-maligned neo-cons, for example, give moral support to Taiwan, as do some idealists of a more liberal persuasion.
American policy on Taiwan is both realist and idealist. The US supports the status quo, meaning that it opposes Taiwanese independence. But the US also promises to defend Taiwan in the event of a Chinese attack. That promise is deliberately couched in ambiguous terms, to discourage the Taiwanese from provoking China, and to dissuade China from taking military action.
Having made no commitment to defend Taiwan, EU policy is much simpler. The EU does not see China as a strategic competitor, since – unlike the US – it is not an Asian power. So it has a clear policy of engagement with China, of supporting the status quo across the Taiwan Straits, and of being friendly towards Taiwan – but not so friendly that China would become annoyed.
The EU and the US agree on the goals of stability and the non-use of force across the Taiwan Straits. But Americans care much more about Taiwan, for the understandable reason that American blood and treasure could be shed in its defence Such emotions explain why the US over-reacted over the EU’s tentative moves towards lifting its arms embargo on China two years ago (there were good reasons why the EU should not have lifted the embargo at that time, but it was hard to have a rational discussion with some Americans over the matter, such was the strength of their feelings; they talked of the Chinese firing French missiles at American troops fighting on the beaches of Taiwan).
European views have shifted somewhat over the past two years, to be slightly more sympathetic to Taiwan. The fact that China passed the Taiwan secession law, which promises the use of force if Taiwan moves towards independence, was good PR for the Taiwanese. And the replacement of Gerhard Schröder by Angela Merkel has made a difference. She is a little more critical than her predecessor of large countries that abuse human rights, and opposes lifting the arms embargo. The departure of Jacques Chirac is also likely to affect EU’s China policy: he has been the leading proponent of lifting the embargo.
In some ways, the status quo is not so bad for Taiwan. The country is rich, successful and free, and many of its people enjoy a good quality of life. The problems for Taiwan are, firstly, its status – it is not allowed to do many of the things that normal countries do; and, secondly, its insecurity – almost a thousand Chinese missiles are pointing at it.
So the US and the EU are right to tell the Taiwanese not to rock the boat. This, along with a sensible US China policy balancing engagement with a promise of a military response to an attack on Taiwan helps safeguard the status quo, probably the best option available to Taiwan at the moment. In time, burgeoning economic ties between Taiwan and the mainland should make each side very wary of taking provocative actions that could threaten the prosperity of both – whatever the nature of the political relationship between the two. Ties between businessmen and politicians in Taiwan and the PRC are growing all the time. China is also democratising, slowly but surely, which increases the odds of peaceful reunification. Perhaps in the long run Taiwan can offer China an example of how prosperity, order and stability can co-exist with liberal democracy.
Charles Grant is director of the Centre for European Reform.
by Charles Grant
Taiwanese domestic politics is nasty and messy. The two main political forces – the KMT, which believes in ‘one China’, and the DPP, which leans towards an independent Taiwan – hate each other with venom that is unmatched in most other functioning democracies. But the country is pluralistic, with a free press and fair elections. Since Taiwan’s politics are so much more ‘western’ than those of the People’s Republic of China (PRC), it ought to have many friends in the western democratic world.
But it has few close friends. Both the Americans and the Europeans know that they must be on good terms with China. It is simply too important, economically and strategically, to have as an enemy. Therefore ministers in most western governments are careful not to meet their Taiwanese counterparts on an official basis, lest China get annoyed. And they tolerate the fact that China excludes Taiwan from many international bodies, such as the World Health Organisation. Of course, there are some policy-makers in the West who think that democracies should stand by other democracies. The much-maligned neo-cons, for example, give moral support to Taiwan, as do some idealists of a more liberal persuasion.
American policy on Taiwan is both realist and idealist. The US supports the status quo, meaning that it opposes Taiwanese independence. But the US also promises to defend Taiwan in the event of a Chinese attack. That promise is deliberately couched in ambiguous terms, to discourage the Taiwanese from provoking China, and to dissuade China from taking military action.
Having made no commitment to defend Taiwan, EU policy is much simpler. The EU does not see China as a strategic competitor, since – unlike the US – it is not an Asian power. So it has a clear policy of engagement with China, of supporting the status quo across the Taiwan Straits, and of being friendly towards Taiwan – but not so friendly that China would become annoyed.
The EU and the US agree on the goals of stability and the non-use of force across the Taiwan Straits. But Americans care much more about Taiwan, for the understandable reason that American blood and treasure could be shed in its defence Such emotions explain why the US over-reacted over the EU’s tentative moves towards lifting its arms embargo on China two years ago (there were good reasons why the EU should not have lifted the embargo at that time, but it was hard to have a rational discussion with some Americans over the matter, such was the strength of their feelings; they talked of the Chinese firing French missiles at American troops fighting on the beaches of Taiwan).
European views have shifted somewhat over the past two years, to be slightly more sympathetic to Taiwan. The fact that China passed the Taiwan secession law, which promises the use of force if Taiwan moves towards independence, was good PR for the Taiwanese. And the replacement of Gerhard Schröder by Angela Merkel has made a difference. She is a little more critical than her predecessor of large countries that abuse human rights, and opposes lifting the arms embargo. The departure of Jacques Chirac is also likely to affect EU’s China policy: he has been the leading proponent of lifting the embargo.
In some ways, the status quo is not so bad for Taiwan. The country is rich, successful and free, and many of its people enjoy a good quality of life. The problems for Taiwan are, firstly, its status – it is not allowed to do many of the things that normal countries do; and, secondly, its insecurity – almost a thousand Chinese missiles are pointing at it.
So the US and the EU are right to tell the Taiwanese not to rock the boat. This, along with a sensible US China policy balancing engagement with a promise of a military response to an attack on Taiwan helps safeguard the status quo, probably the best option available to Taiwan at the moment. In time, burgeoning economic ties between Taiwan and the mainland should make each side very wary of taking provocative actions that could threaten the prosperity of both – whatever the nature of the political relationship between the two. Ties between businessmen and politicians in Taiwan and the PRC are growing all the time. China is also democratising, slowly but surely, which increases the odds of peaceful reunification. Perhaps in the long run Taiwan can offer China an example of how prosperity, order and stability can co-exist with liberal democracy.
Charles Grant is director of the Centre for European Reform.
Wednesday, March 14, 2007
In defence of missile defences?
by Tomas Valasek
For those spoiling for another good transatlantic fight, the headlines from last week’s EU summit must have come as manna from heaven. “Chirac hits at US missile plans,” read the headline in the Financial Times after the soon-to-be-departing French leader addressed reporters in Brussels. “Cold War over missile defences,” wrote Le Monde, referring to US plans to place missile defence sites in Europe. Add to that the apparently critical words by Angela Merkel, the German chancellor, from earlier in the week and a new storm would appear to be brewing over the Atlantic.
Unfortunately for the hawks on either coast, closer reading of the actual statement shows a different, much calmer picture. Jacques Chirac did warn against needlessly ruffling Russia’s feathers, as did Angela Merkel. But little in the way of outright opposition to American plans is in evidence among European leaders.
There are two good reasons for that. As with the Iraq war, missile defences are likely to divide Europe itself. Warsaw, Prague and London have all expressed interest in hosting parts of the US system and would naturally oppose any attempt to build a common European position on the basis of opposition to missile defences. Most of the cost of a bruising argument would thus be borne internally, within Europe.
But just as importantly, many EU member-states are hedging their bets, not wanting to rule out the possibility of building a missile shield for Europe as well. The majority of EU member states – the 19 that are NATO members – already approved a 2006 study showing that such a programme is technologically feasible. That does not by itself mean that an allied missile shield will or even should be built: there are differences within NATO as to the gravity and urgency of the missile threat. But the fact that NATO countries commissioned the study at all shows their shared concern over Iranian and North Korean missile plans.
So while a tactical, politically-driven stance against US plans may seem tempting it would be difficult for any European capital to be simultaneously for and against missile defences, which is exactly the position in which those EU member-states that are also in NATO would find themselves. For that reason, chiefly, robust opposition to US missile defence plans is likely to be limited to a handful of European countries.
That is not to say that a debate on the system should not take place amongst European countries, quite the contrary. The discussions so far have already raised interesting questions about two key choices for the Europeans: How should they relate to Washington? And just how much solidarity can and will they show towards Moscow?
On the first point, German chancellor Merkel was absolutely right to say that Washington needs to use NATO more assertively in selling its plans for a missile shield. In saying so, Merkel is in effect echoing Gerhard Schröder, her predecessor, who - in one of his last speeches as chancellor in 2004 - urged allied leaders to involve NATO more in broader policy debates and to start using it to fashion common strategies and threat assumptions, not just military plans. This, Schröder and others argued, would be the most effective way to revitalize an alliance reeling from the aftershocks of Iraq. It could also give Europe a better foreknowledge of, and a bigger say in, US defence plans and strategy, thus reducing the chance of fratricidal arguments like those that shook NATO in 2003. The alliance is already moving toward broader policy debates. It plans to draft a new version of its key guiding document, the ‘Strategic Concept’, by 2009 and in fact, it has already debated US missile defence once, in February. Washington should continue to offer its future military plans up for a robust discussion at NATO, and it should do so early, to allow for a fruitful talks rather than a simple briefing. It may be rewarded with a greater sense of usefulness and solidarity among allies.
It is the European Union that comes out the worse for wear from this debate so far. When Moscow threatened Warsaw and Prague with military reprisals if they allow US missile defences on their territory, Paris and Berlin responded by, in effect, siding with Moscow against their fellow EU member states. While the French and German positions were nuanced – arguing for more consultations with Russia and not directly addressing Russian threats – the Czechs and Poles will no doubt feel that their EU brethren showed far too little solidarity given the gravity of Russian statements. This will do little to convince them to show more faith in the EU's security and defence policy, or to back Merkel's plans to revive talks on the EU's constitutional treaty and the creation of a European foreign minister.
Tomas Valasek in director of foreign policy and defence at the Centre for European reform.
by Tomas Valasek
For those spoiling for another good transatlantic fight, the headlines from last week’s EU summit must have come as manna from heaven. “Chirac hits at US missile plans,” read the headline in the Financial Times after the soon-to-be-departing French leader addressed reporters in Brussels. “Cold War over missile defences,” wrote Le Monde, referring to US plans to place missile defence sites in Europe. Add to that the apparently critical words by Angela Merkel, the German chancellor, from earlier in the week and a new storm would appear to be brewing over the Atlantic.
Unfortunately for the hawks on either coast, closer reading of the actual statement shows a different, much calmer picture. Jacques Chirac did warn against needlessly ruffling Russia’s feathers, as did Angela Merkel. But little in the way of outright opposition to American plans is in evidence among European leaders.
There are two good reasons for that. As with the Iraq war, missile defences are likely to divide Europe itself. Warsaw, Prague and London have all expressed interest in hosting parts of the US system and would naturally oppose any attempt to build a common European position on the basis of opposition to missile defences. Most of the cost of a bruising argument would thus be borne internally, within Europe.
But just as importantly, many EU member-states are hedging their bets, not wanting to rule out the possibility of building a missile shield for Europe as well. The majority of EU member states – the 19 that are NATO members – already approved a 2006 study showing that such a programme is technologically feasible. That does not by itself mean that an allied missile shield will or even should be built: there are differences within NATO as to the gravity and urgency of the missile threat. But the fact that NATO countries commissioned the study at all shows their shared concern over Iranian and North Korean missile plans.
So while a tactical, politically-driven stance against US plans may seem tempting it would be difficult for any European capital to be simultaneously for and against missile defences, which is exactly the position in which those EU member-states that are also in NATO would find themselves. For that reason, chiefly, robust opposition to US missile defence plans is likely to be limited to a handful of European countries.
That is not to say that a debate on the system should not take place amongst European countries, quite the contrary. The discussions so far have already raised interesting questions about two key choices for the Europeans: How should they relate to Washington? And just how much solidarity can and will they show towards Moscow?
On the first point, German chancellor Merkel was absolutely right to say that Washington needs to use NATO more assertively in selling its plans for a missile shield. In saying so, Merkel is in effect echoing Gerhard Schröder, her predecessor, who - in one of his last speeches as chancellor in 2004 - urged allied leaders to involve NATO more in broader policy debates and to start using it to fashion common strategies and threat assumptions, not just military plans. This, Schröder and others argued, would be the most effective way to revitalize an alliance reeling from the aftershocks of Iraq. It could also give Europe a better foreknowledge of, and a bigger say in, US defence plans and strategy, thus reducing the chance of fratricidal arguments like those that shook NATO in 2003. The alliance is already moving toward broader policy debates. It plans to draft a new version of its key guiding document, the ‘Strategic Concept’, by 2009 and in fact, it has already debated US missile defence once, in February. Washington should continue to offer its future military plans up for a robust discussion at NATO, and it should do so early, to allow for a fruitful talks rather than a simple briefing. It may be rewarded with a greater sense of usefulness and solidarity among allies.
It is the European Union that comes out the worse for wear from this debate so far. When Moscow threatened Warsaw and Prague with military reprisals if they allow US missile defences on their territory, Paris and Berlin responded by, in effect, siding with Moscow against their fellow EU member states. While the French and German positions were nuanced – arguing for more consultations with Russia and not directly addressing Russian threats – the Czechs and Poles will no doubt feel that their EU brethren showed far too little solidarity given the gravity of Russian statements. This will do little to convince them to show more faith in the EU's security and defence policy, or to back Merkel's plans to revive talks on the EU's constitutional treaty and the creation of a European foreign minister.
Tomas Valasek in director of foreign policy and defence at the Centre for European reform.
Friday, March 09, 2007
What is wrong with Lisbon?
by Aurore Wanlin
The Lisbon agenda embodies a paradox. Progress made by the member-states has been slow and patchy. The German presidency in the first half of 2007 is playing down Lisbon, fearing that the process has been discredited by the EU’s failure to meet its targets. Commentators often cite Lisbon as an example of the mismatch between the EU’s grand ambitions and lack of delivery.
However, all national governments in the EU agree on the need to turn the EU into a competitive knowledge-based economy. They agree that to boost innovation will require not only more spending on research and higher education, but also more competition, flexible labour laws, and efficient financial markets.
Meanwhile, the rejection of the EU constitutional treaty in the Dutch and French referenda has made it clear that citizens will hold the Union responsible for member-states’ failure to deliver growth and jobs. Therefore delivery on Lisbon is also crucial to the future of the European Union.
So why is the pace of reform so slow? In 2005, the EU revamped the Lisbon agenda to address some of its weaknesses: it streamlined procedures and targets, clarified the respective roles of the Commission and national governments, and asked all EU governments to draw up national reform plans to increase ‘ownership’. However, according to many commentators, this institutional fix is unlikely to make it easier to do economic reform in Europe, for at least three main reasons: the difficulties of co-ordinating national reforms at the EU level, political obstacles to economic reform and new forms of poverty that feed popular resistance to change.
There are two main rationales behind the Lisbon agenda. The first is that co-ordinating reform at the EU level allows member-states to learn from each other and spreads best practice. The second is that economic reform in one country has a beneficial impact on other member-states’ economies. However, EU governments have over-estimated these two effects. It is not that easy to transpose economic reforms from one member-state to the other. A policy’s success depends on economic, political, and institutional factors that vary from country to country. The spill-over effect of structural changes, even within the monetary union, is often not visible or strong enough to create a real incentive for governments to co-ordinate national reform plans.
Economic reform is always politically difficult. The impact of policy changes can be unexpected and delayed, which makes it hard to explain and sell reforms to voters. Structural changes also create winners and losers, but while the losers are often small, well-defined and vocal groups, the potential winners are too numerous and amorphous to organise. This is a particular problem in countries like France or Germany where already strained public budgets make it difficult to compensate losers. Most importantly, national governments often lack clear strategies for economic reform. Their plans look more like a shopping list than a consistent programme. National governments should better prepare their reform programmes, prioritising the reforms on which they want to spend most of their political capital, starting with those that facilitate future changes and defining a clear timetable.
A third factor that makes economic reform difficult is the emergence of new forms of poverty and the absence of appropriate policies to address them. A lack of political leadership is often blamed for the failure to reform in Europe. But a Big Bang approach is not necessarily the best way to sort out a country’s economic problems. People resist change as they increasingly believe that their situation and that of their children is getting worse and political action has become inefficient. This resistance is fuelled by the emergence of new forms of poverty resulting both from globalisation and technological change and their impact on low-skilled workers and middle classes. The problem is that the welfare state was designed for the industrial society of the 70s that no longer exists. Social policies often fail to help today’s new poor. Unless national governments manage to find a way to address this issue popular resistance is unlikely to wane in the short-term.
Aurore Wanlin is a research fellow at the Centre for European Reform.
by Aurore Wanlin
The Lisbon agenda embodies a paradox. Progress made by the member-states has been slow and patchy. The German presidency in the first half of 2007 is playing down Lisbon, fearing that the process has been discredited by the EU’s failure to meet its targets. Commentators often cite Lisbon as an example of the mismatch between the EU’s grand ambitions and lack of delivery.
However, all national governments in the EU agree on the need to turn the EU into a competitive knowledge-based economy. They agree that to boost innovation will require not only more spending on research and higher education, but also more competition, flexible labour laws, and efficient financial markets.
Meanwhile, the rejection of the EU constitutional treaty in the Dutch and French referenda has made it clear that citizens will hold the Union responsible for member-states’ failure to deliver growth and jobs. Therefore delivery on Lisbon is also crucial to the future of the European Union.
So why is the pace of reform so slow? In 2005, the EU revamped the Lisbon agenda to address some of its weaknesses: it streamlined procedures and targets, clarified the respective roles of the Commission and national governments, and asked all EU governments to draw up national reform plans to increase ‘ownership’. However, according to many commentators, this institutional fix is unlikely to make it easier to do economic reform in Europe, for at least three main reasons: the difficulties of co-ordinating national reforms at the EU level, political obstacles to economic reform and new forms of poverty that feed popular resistance to change.
There are two main rationales behind the Lisbon agenda. The first is that co-ordinating reform at the EU level allows member-states to learn from each other and spreads best practice. The second is that economic reform in one country has a beneficial impact on other member-states’ economies. However, EU governments have over-estimated these two effects. It is not that easy to transpose economic reforms from one member-state to the other. A policy’s success depends on economic, political, and institutional factors that vary from country to country. The spill-over effect of structural changes, even within the monetary union, is often not visible or strong enough to create a real incentive for governments to co-ordinate national reform plans.
Economic reform is always politically difficult. The impact of policy changes can be unexpected and delayed, which makes it hard to explain and sell reforms to voters. Structural changes also create winners and losers, but while the losers are often small, well-defined and vocal groups, the potential winners are too numerous and amorphous to organise. This is a particular problem in countries like France or Germany where already strained public budgets make it difficult to compensate losers. Most importantly, national governments often lack clear strategies for economic reform. Their plans look more like a shopping list than a consistent programme. National governments should better prepare their reform programmes, prioritising the reforms on which they want to spend most of their political capital, starting with those that facilitate future changes and defining a clear timetable.
A third factor that makes economic reform difficult is the emergence of new forms of poverty and the absence of appropriate policies to address them. A lack of political leadership is often blamed for the failure to reform in Europe. But a Big Bang approach is not necessarily the best way to sort out a country’s economic problems. People resist change as they increasingly believe that their situation and that of their children is getting worse and political action has become inefficient. This resistance is fuelled by the emergence of new forms of poverty resulting both from globalisation and technological change and their impact on low-skilled workers and middle classes. The problem is that the welfare state was designed for the industrial society of the 70s that no longer exists. Social policies often fail to help today’s new poor. Unless national governments manage to find a way to address this issue popular resistance is unlikely to wane in the short-term.
Aurore Wanlin is a research fellow at the Centre for European Reform.
Friday, March 02, 2007
The future of the single market
By Katinka Barysch
The EU puts out a lot of reports, studies, evaluations and announcements. So far this month, the Commission has released around 80 major documents. Many of them are too specialised, too long or simply too dull to attract wider interest.
One recent publication stands out. On February 21st, the economics team of the Commission’s ‘bureau of European policy advisors’ – now headed by Roger Liddle, previously an advisor to Tony Blair and Peter Mandelson – released a report on the future of the single market. Granted, advisors can speak more freely than bureaucrats. But the way this report is written shows how the EU should communicate.
* Accessible. The subject is complex, yet the document is easily understandable for non-economists. The authors steer clear of euro-speak and jargon. Moreover, while many EU documents are abstract, this one is full of examples. No waffle about “reaping the full benefits of the single market”. Instead, a list of examples: the single market allows you to go to hospital in other EU countries; it gives you the right to sue any company that sells faulty products; it has brought you low-cost air travel; it has reduced your mobile phone bill.
* Focus. This paper is about the single market. Period. It is not about social policy, the environment or the future of Europe. Absent is the EU’s unfortunate tendency to placate interest groups by lumping together too many issues. What the report does do is to look at how the context of European economic integration has changed, through globalisation, eastward enlargement and technological change.
* Realism. People tend to be cynical about official information and analysis. Achievements are overplayed, failures omitted. Liddle and his colleagues are honest. “The single market brought real benefits”, they say “but it has not led to a transformation of European economic performance.” Price convergence has stagnated, so has the share of intra-EU trade in total exports and imports. Only if problems are clearly identified can the search for solutions begin in earnest.
* Critical analysis. The intentions of the EU are usually good, but this does not guarantee optimal results. Yet the EU is notoriously bad at abolishing defunct laws and institutions. This report shows that single market legislation often embodies the interests of big companies. It risks becoming an impediment to innovation and competition from smaller rivals.
* Fresh thinking. Politicians and EU officials regularly call for the “completion of the single market”. Wrong, say Liddle and his colleagues. “The single market is an on-going process rather than an event.” It can never be “complete”. The initial rationale was to tear down trade and regulatory barriers to allow European manufacturing companies to reap economies of scale in a larger market. But future EU growth will not come from mass manufacturing. It will be driven by services, high-tech companies and start-ups. For them, removing remaining barriers or harmonising regulations won’t do. Instead, the single market needs to encourage innovation and research, facilitate venture capital and ensure competition.
* To-do list. Here, the bureau of European policy advisors does exactly what its name implies: it advises on policy. If the single market is to deliver benefits in the future, the EU and its governments need to: 1) prioritise and give up the notion that all barriers for doing business are equally important; 2) rely less on detailed directives and more on framework regulations that work in a fast-changing environment and take account of the administrative weaknesses of many new member-states; 3) adopt a sectoral approach that differentiates between the needs of say, the energy sector and healthcare; and 4) properly co-ordinate single market initiatives with policies on competition, trade, environment and so on.
The nature of this report should remind the entire Commission of one of its key roles: to provide independent, fresh and forward-looking analysis and policy ideas. But the European Commission’s own take on the future of the single market – published the same day as the bureau’s report – succumbs to some of the old failings of EU communication. Maybe it should be the advisors’ report rather than the Commission document that goes to EU leaders at their forthcoming spring summit and that forms the basis of the EU’s comprehensive single market review that comes out in the autumn of 2007.
The two reports in the future of the single market can be found on
http://ec.europa.eu/dgs/policy_advisers/publications/
docs/single_market_yesterday_and_tmorrow_en.pdf
http://ec.europa.eu/internal_market/strategy/
docs/com_2007_0060_en.pdf
Katinka Barysch is chief economist at the Centre for European Reform.
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