Is it ‘the economy, stupid’ in the EU’s southern neighbourhood?

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Federica Mogherini, the High Representative of the European Union for Foreign Affairs and Security Policy welcomes Morocco Minister of Foreign Affairs and International Cooperation Nasser Bourita during a European foreign affairs minister council in Brussels. [Olivier Hoslet/EPA]

While trade wars threaten across the Atlantic, enhanced economic cooperation could be the key to stability in the EU’s southern neighbourhood.

James Morgan is Associate Senior Research Fellow at the Centre for European Policy Studies.

Back in the mid-nineties, the EU put its money on the multilateral approach with the Barcelona Declaration and the Euro-Mediterranean Partnership.

But regional integration never really took off and the environment in the Middle East and North Africa has worsened. Great power interventions in Iraq, Syria, Israel/Palestine and elsewhere have fuelled chaos and seemingly intractable conflict.

The hopes of many of the Arab uprisings have been dashed while the EU frets constantly about illegal migration and terror. Once viewed as an area of opportunity, the ‘Southern Neighbourhood’ is today more often seen as a place dominated by dangerous threats.

Given that some of the countries in the region, notably Morocco, but also Tunisia and Jordan, have continued to make generally peaceful progress, this may be an unfair appreciation, but one thing is certain. The mantra of the EU’s 2016 Global Strategy, that external security, especially in the MENA area, is a sine qua non for Europe’s internal security has resonated with EU governments and peoples alike.

No surprise then that the revised European Neighbourhood Policy, while continuing support for regional programmes and organisations like the Union for the Mediterranean, focusses on security and stability as the key drivers for relations with the South.

No surprise too that with the current preoccupations, notably migration flows, radicalisation and terrorism, the Commission is proposing a major increase in the EU’s external aid budget in general, and the southern neighbourhood in particular, for the 2020-27 budget period.

But while aid is an essential part of the solution, saves lives and, when combined with sound economic policy, gives a boost to development, alone it cannot bring peace and stability. Indeed, when provided without sufficient safeguards to countries suffering from poor governance, it can encourage the contrary.

The support given to authoritarian regimes prior to the ‘Arab spring’ is a case in point when turning a blind eye to the need for accountability and greater equity produced anything but stability.

More efficient trade and investment is perhaps a better bet in the longer term, and with the EU the most important commercial partner for the neighbourhood, there is much potential here.

However, the record is not good. Many countries, especially those with a strong military element in their governments, tend towards protectionism and have not engaged on the EU’s offer of Deep and Comprehensive Free Trade Agreements (DCFTA). But there are exceptions.

One of the most interesting is Morocco where a renewed fisheries agreement has just been signed and there is progress towards a DCFTA. This would be an important step forward building on the already fruitful sectoral partnerships that the country has with the EU. That said, if they are to be effective, these new initiatives will require a pragmatic solution to the unresolved status of Western Sahara.    

The benefits that will flow from a DCFTA, in terms of more foreign direct investment from Europe and the contribution that will make to meeting Rabat’s economic and, not least, employment challenges could well provide inspiration for other countries in the region to follow suit.  

With the youth bulge in the MENA countries (over half of the population is under 18), providing job opportunities is an absolutely vital element in taming the beasts of illegal migration and terror.

There is no panacea for solving the fundamental problems in the southern neighbourhood and economic development in itself may not do the job. But without it, things are likely to get even worse before they get better. Success stories are badly needed.

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