Strategising has gone missing from transatlantic relations and must be revisited by a new constituency of business and political leaders, writes Pawe? ?wieboda.
Pawe? ?wieboda is President of demosEUROPA – Centre for European Strategy (Warsaw)
Strategising has gone missing from transatlantic relations. Once its essential part, it is now a profession for old-school craftsmen. The domestic and international reality has become an enemy of considerate planning, sanctifing the skill to adapt rather than long-term objectives. The new modus operandi is well summarised in Shadi Hamid’s quote from a US official speaking about the country’s Egypt policy: „By not announcing the decision, it gives the administration the flexibility to reverse it“.
Added to this is the fallout from the spying scandal and fears of the European and US disfunctionalities becoming mutually infectious. In Europe, there is a mixture of angst and fear of the uknown with respect to the United States. Distrust is deeper than that orchestrated by massive phone-tapping by the NSA. A lot of bankers and policy-makers are still fuming about having been caught buying bundles of illiquid mortgages repackaged into new securities from the other side of the pond in the run-up to the crisis. The perceived ruthlessness of America‘s „my currency, your problem“ policy has only magnified that impression. European policy-makers are still traumatised by the experience of being subject of „special care“ in the eyes of Washington and the world community during the crisis. On top of that, there is unscrupulous use of transfer pricing by US companies happy to go to Bermuda to siphon off tax proceeds from the European sovereign. It gives Europe ground to undertake what it enjoyes most – a moral crusade.
The choice is now either to accept being carried by the tide of events or return to a more systematic dialogue. Three sets of issues are particularly relevant. On the domestic front, it is a question of recasting oneself politically and economically. There is a lot that the EU and the US can tell each other along the way. The EU political system, although criticised by many, is in some ways more democratic than that of the United States. The bottom 25 states in the US representing just over 16 percent of the population, hold 50 out of 100 seats in the Senate. The European Union, by contrast, is next year introducing a new double-majority system of voting which links decision-making power directly to population. It has seen a number of treaty changes which have been tirelessly ratified in national parliaments while the last change to the US Constitution, the 27th amendment, was approved in… 1992.
On the other hand, when the eurozone begins to make its banking union operational next year, it should study closely the US experience with its federal-level responsibility for stabilising the banking system. Just as in the US, that role is compatible with the balanced-budget rules at the state level, some federal-level pool of resources for rescuing and recapitalising banks will be necessary in the eurozone as the latter embarks on cleaning its banks‘ balance sheets, a process which will dominate much of 2014.
In foreign policy, the decline of strategising has led to disjointed short-termism and lack of clarity, especially in dealings with the Islamic world and rising powers. Decisions emerge on the spur of the moment and the factor of unpredictability grows. Europe is paralysed by the illusionary warmth of its free-rider position within NATO. Even Britain is cutting its armed forces to the level not seen since Napoleonic wars. By contrast, where there is strategic coordination, the EU and the US achieve results. Although the jury is out on negotiations with Iran, their progress is in no small part be due to the consistent messaging from the EU and the US and coordinated policy over the last few years. The possible signing by the EU of an association agreement with Ukraine in November is also an area where a helping hand from the US has been more than useful in bringing the prospects of an agreement about.
In strategic terms, we are light-years away since the era of George W. Bush whose perceived arrogance produced a greenhouse effect on the European dream as a form of anti-Americanism. Briefly, people were saying this would be a European century in which the EU would provide a role model for other nations with its idea of shared sovereignty and allegience to a system of values. As the greenhouse was removed, the plant began to fade. Europe is today a more realist power, learning how to look after its interests rather than project its model. Although it might have despised US unilateralism, it has now come to fear America‘s withdrawal.
All that is meant to be patched up with the flagship transatlantic project of the day, the Trade and Investment Partnership. Both sides walked into the negotiations desperate to identify and nurture new sources of growth. At some point, the wider objectives will need to be clarified. The US might be thinking of TTIP in terms of what it is going to do to China. For Europe, the agreement is more about getting its money back after the squeeze of the financial crisis. Both the EU and the US will need to start thinking about TTIP’s consequences for the wider multilateral system and how to make it open to others, be it Turkey, Brazil or China, in the future. Transatlantic regulatory convergence will in itself not be a sufficient counterweight to the global shift of power we are witnessing today. As McKinsey Global Institute points out, 45 percent of the Fortune Global 500 companies are likely to be rooted in the emerging countries, compared to 5 percent in 2000. The EU and the US will not stop this trend. Their task should be to lay down the framework for it, so that it is based on a level-playing field which has always been at the heart of transatlantic capitalism. The only way to go about it is by opening up TTIP to other countries, willing and able to share the benefits and undertake the responsibilities alike.
What happens next with TTIP will set the tone of the future of transatlantic relations which can either be inward-looking, aimed at consolidating the fading power of the West or form part of the larger effort to refashion the world economic order. Europe is already seen as a US poodle in much of Asia, courtesy of TTIP. Therefore Europe’s political elites will be watching carefully whether the US draws them into something which they might not find attractive.
If strategising is to return between the EU and the US, it would need to be brought about by a new constituency of business and political leaders. The picture on who yields influence on the agenda has become more fragmented. There is also less discussion today on turning NATO into a forum for strategic level-discussion. There are few „old-style“ transatlanticists among the European policy elite. New transatlanticists are on the way. They are entrepreneurs who will be tempted to explore the opportunities of TTIP once it is concluded. They are also the „globalists“ – Europeans and Americans interacting in different places around the world, rather than strictly through the bilateral setting. It is these new transatlanticists who will increasingly come to influence the future agenda.
demosEuropa: Remedy for transatlantic trust