Can the European Union Still be a Guardian of the Rules-based Global Order?

The role of the EU in ensuring survival

Can the European Union Still be a Guardian of the Rules-based Global Order?

The future of the rules-based global order & the role (if any) of the European Union in bringing it about

Three former European Union leaders were invited to share their views on the future of the rules-based global order and the role of the EU in ensuring its survival. All the speakers had the experience and authority to address the issue since they had served as prime ministers of their countries; in 2 cases, as presidents of the European Commission; and in one case as European Council President. It was my privilege to moderate the webinar organized by the Universal Peace Federation. The speakers were Romano Prodi of Italy, Jose Manuel Barroso of Portugal, and Herman Van Rompuy from Belgium, all with valuable insights into the inner workings of the European Union which was created in the aftermath of the Second World War with the goal of creating peace and security after the devastation of the war. The world is a different place now increasingly under threat from nationalism, populism, and trade wars.

In his opening remarks, Thomas Walsh, Chairman of the Universal Peace Federation, observed that the COVID-19 coronavirus crisis has either spawned or brought to light a wide range of other concerns such as governance, the global economy, and the future of liberal democracy itself was being questioned. In his view, political, social, and cultural polarization were already at a peak in the United States with levels of social unrest not seen perhaps since the early 1960s striking a new low with the recent killing of George Floyd, an African-American by a white police officer.

Spectators of momentous events

Against this background, Romano Prodi drew on his long experience as President of the European Commission and 2 terms as Prime Minister of Italy. During his presidency of the EU Commission, the euro was successfully introduced; the Union was enlarged with the entry of 10 new countries from Central, Eastern, and Southern Europe; and the treaty establishing a constitution for Europe was signed. Prodi acknowledged that the current picture of the global scene was not a good one with the spread of authoritarian rule across the world from China, Russia, Central Asia, the United States, and countries in Europe like Poland and Hungary as well as Turkey which has been seeking to join the EU. Prodi conceded that liberal democracy was under severe strain but said he still had faith that the old rules of liberal democracy were still prevailing in Europe.

Prodi recalled earlier periods of turbulence within the EU when its survival was in danger as it was during the 2008 financial crisis but said that step by step the Union was rebuilt. Europe was now facing another challenging time with the coronavirus which had exposed the weaknesses of the EU which was not working effectively in many areas such as defense policy. “The first question is, do we have the strength to support the rules that are the foundation of our democracy? This is difficult to answer at this moment.” He lamented that Europe had lost not only the economic or military leadership but had now become spectators of a game being played by old and newer powers. “So, my answer to the question, whether Europe has the political and military strength to support our rules, I say, not yet.”

Rise of the tech companies

Prodi drew attention to the Internet-based companies which were now emerging as major players on the global scene. He cited Google, Apple, Facebook, and Microsoft along with Chinese digital companies which were gaining enormous power at enormous speed. These tech companies, he said, were clearly in a position to challenge the so-called rules on which Europe was based. He said they were changing the balance of power at the expense of Europe which does not have an equivalent company to counter their influence. He underscored the need for Europe to have common rules in spheres such as defense and foreign policy in the face of this new dominating power in the world.

Prodi argued that in spite of all the limitations, Europe was still the only entity capable of calming the mounting tensions between the United States and China. However, Europe’s ability to prevent a possible clash and restore peace was being held back, because it was lacking the new instruments that were now required. He reiterated that even with the departure of the United Kingdom, Europe was still a great economic power, but the lack of political union had reduced its relevance in global affairs. He expressed particular frustration that Europe had failed to speak out about the new clash between Israel and the Palestinians or skirmishes between Turkey and Russia over Libya which is only 200 kilometers from the Italian border. “If we don’t fill this gap, we are not credible. So, the first step is to work for a common foreign policy.”

Benefits of compromise

José Manuel Durão Barroso, who like Prodi also served as President of the European Commission and had been Prime Minister of Portugal, highlighted instances when the European Union overcame what appeared to be insurmountable problems. He began by describing a crisis in 2012 over the membership of Greece which occurred when he was European Commission President. This was the time when the EU was in the grip of confusion and uncertainty over the euro as well as sovereign debt. He summoned the chief economists of the most important banks operating in Europe to a brainstorming session at the headquarters of the European Commission in Brussels. He asked them 2 questions, first, “How many of you believe that Greece will be able to remain in Europe?” Almost all except one said Greece would have to leave Europe. However, Greece is still in the Union. The second question Barroso put to the economists was, “Will the euro survive?” Half of them predicted that the euro was most likely to crumble, to disappear. Barroso commented with some satisfaction that not only did the euro survive, but it was now the second global currency in the world. He said this demonstrated the resilience of the European Union and the euro was stronger than most commentators acknowledged. Barroso drew a parallel with Mark Twain’s famous response to reports that he had been killed in the war when he wrote a letter to a newspaper saying that news of his death was slightly exaggerated. Barroso said the same response could be applied to the European Union. “We always listen to the idea that Europe is going to crumble, the European Union is going to disappear; I think the forces of integration are stronger than the forces of disintegration.”

Barroso pointed to the initial failure to approve the constitutional treaty, but he noted that a solution was eventually found, and the Lisbon treaty was concluded 10 years later. “The Lisbon treaty is not as ambitious as the constitutional treaty but the basic points are there so, this is the point I want to convey to those of you who are less familiar with the European Union, those who live outside of Europe. The European Union is by definition incremental, its progress is fragmented, sometimes extremely frustrating, time-consuming, but solutions are based on a sort of compromise.” Barroso was realistic about the limitations of this approach. “When you have compromise, by definition it is not your first best or second best or third best, but it is a decision that can be reached by people together.” Barroso remains convinced that in spite of all the problems, the European Union remains a great construction in terms of regional integration and has been a force for good. He says this was endorsed when, on behalf of the European Union, he and Herman Van Rompuy received the Nobel Peace prize in 2012 in Oslo. “The Nobel Peace prize was given to the European Union, because the EU itself stands basically for peace and for, I believe, the common good of mankind.”

EU a laboratory for globalization

Barroso agreed with Prodi that the rules-based order and multilateralism were being severely tested. He said most international institutions were in crisis, citing the World Trade Organization which was suffering because trade was falling. He also gave the example of the World Health Organization which is under serious pressure. Barroso attributed this partly to the United States, which he says saved globalization after the Second World War but under the current administration was less committed than it had been before. He regretted that the great construction of multilateral order after the Second World War had not received the same support from the biggest shareholder, the United States, which in his view, remains the most influential country in the world. The fact that the multi-lateral order was in crisis presented an opportunity for the EU to show its mettle.

Barroso believes that the European Union is in a good position to make a positive contribution because, by definition, it is based on multilateralism. “We are now 27 countries after the United Kingdom decided democratically to leave, and we are conducting negotiations every day. The European Union is a permanent negotiation. So, I think the European Union, by way of its treaties, is committed to multilateralism and should do more to sustain the multilateral order because, in a way, we are at regional level in Europe a laboratory for globalization. We are used to a culture of compromise of permanent negotiation.”

Quality of leadership

Barroso’s contention was that the future of the European Union depended on the quality of leadership. He had concerns about this in some countries around the world and their commitment to the global order and governance. “I have no illusions. There are of course different systems, and there will be confrontation; there is competition, but the question is ‘Can we have cooperation and competition?’ I believe we should have cooperation and competition. Let’s give an example. The United States and China and by the way Europe and China, we don’t have the same political regime. There are different regimes and very important differences. But that should not be a reason not to cooperate when it comes to addressing global issues of common concern such as climate change, the fight against international terrorism. and, for instance, in combatting pandemics. We are seeing now, unfortunately, that there has not been sufficient international cooperation in combatting the pandemic; it is a failure of the international system.”

Barroso reminded us that during the financial crisis, Europe was instrumental in creating the G20 at the state and government levels. “At that time it was the European Union; it was in fact the President in office of the Council, President of France regimes Nicolas Sarkozy and myself – we went to speak with George Bush at Camp David telling him the G8 is not sufficient, we need more, we need to have a coordinated response. And then the idea came of organizing the first G20 at heads of state and heads of government level where I had the honor also of being the representative of the European Union. It was China, India, Korea, Brazil besides of course the G8 members. It was not a complete success, but it made a contribution, at least, to prevent full-scale protectionism; these were some measures taken together.”

Now during this crisis, Barroso expressed disappointment that we had not seen the G20 cooperating at a time when there is a real crisis in the global order. “I think wise leaders all over the world, even with different political regimes, different political ideologies, should cooperate to support those common public values. I think it makes sense, because the level of interdependence is so high that we can no longer say ‘your side of the boat is sinking – we may be sinking altogether.’ And that I believe could be a message that the European Union, if it works more independently in the fields of foreign policy, external relations, and also in defense matters, it could have greater political influence.”

Barosso said Europeans were very disappointed with the current state of relations between Europe and the United States since most could be characterized as Atlanticists going back to the founding fathers of the European Community. “They were real Atlanticists, and the United States was supporting the creation of the European Community, and today we don’t see that commitment to trans-Atlantic cooperation, which is really strange because of course there are differences between the United States and Europe, but basically we share the same values of freedom, of democracy, of open societies, of open economies, so this is a problem.” He called for more cooperation between both sides since he continued to believe there were common interests shared by the United States and Europe in relation to economy, trade, and investment as well as in political and defense matters. “Most European countries are members of NATO, and the majority of NATO are members of the European Union, so I think it makes sense for us to work together if we want to make a positive contribution to a more humane globalization.”

Move against globalization

The former Prime Minister of Belgium, Herman Achille, Count Van Rompuy, chose as his starting point the nature of the global nature of the coronavirus pandemic which in his view illustrated the high level of interdependence and was also a sign of great fragility. Van Rompuy noted that although in recent years, world trade had been growing at a slower rate compared to global GDP, it was too early to speak about de-globalization. However, he did say that the rise in protectionism gave the impression that the high point of globalization of trade and investment is over.

Van Rompuy’s analysis was that protectionism in the US was the result of internal dissatisfaction with the consequences of globalization, which translates partially into deindustrialization in the country. He said this was also a phenomenon in other Western countries, particularly in the UK. His argument was that both the US and the UK are governed by nationalist governments that dislike supranational authority. This explained why the US had turned against multilateral institutions such as WTO, UNFCCC, UNESCO, ICJ, NATO, etc., and the UK voted to leave the EU and the single market.

“For the UK, the concept of ‘global Britain’ comes at a time when its former main political partner – the US – is choosing the opposite course. However, there is also the question of what the concept of ‘global Britain’ means when it will set trade tariffs against its main trading partner, the EU, to which almost half of its exports of goods and services go.”

Need for greater self-reliance

According to Van Rompuy, in the EU a process of greater concern began a few years ago about a range of phenomena, such as the unfair competition from countries granting massive state aid to their exports and investments and the almost monopolistic practices of digital giants. As a result, the idea of “strategic autonomy” or “European sovereignty” gradually gained ground. Van Rompuy said the coronavirus crisis had also made it painfully clear that the EU was far too dependent for the health of its citizens on medical supplies and medicines from the rest of the world. The pandemic also highlighted examples of American companies seeking to buy up successful European companies giving rise to fears that the depressive recession would also make some weakened European companies attractive to Chinese and other investors. He said defiantly that the EU had recently shown both parties that it could not be blackmailed and that Europe was not for sale.

“The European response also goes beyond taxing or regulating digital companies towards European values (GDPR) but also towards eliminating the EU’s digital delay. In general, one could ask how the EU can play a geopolitical role when it is so dependent in key economic and other domains. Geopolitics starts at home.”

Van Rompuy said that the EU’s approach should not be regarded as protectionism but as a better protection of its own interests. It is about much more than a game of words. This new attitude was part of a correction to blind globalization. “After 1945, the social market economy came into being, which was a correction to the failing pre-war capitalism. Today’s corrections have to come about on a supra-national level, Europe, or the world.”

Van Rompuy asserted that the EU continues to believe in rules-based trade, otherwise it would not have concluded free trade agreements in recent years with Korea, Singapore, Canada, Japan, Mercosur, Vietnam, and other states. He said that the EU had tried to establish a TTIP (Transatlantic Trade and Investment Partnership) with the USA and join the TPP (Trans-Pacific Partnership) with Japan, the USA, Canada, Australia, Mexico, Vietnam, and others. Both initiatives were brought down by Trump. He said the EU was also trying to conclude a trade agreement with the UK on the basis of “zero tariffs, zero quotas” but was not making much headway. He was also disappointed that negotiations on an investment treaty with China had been dragging on for a long time and that the 2020 target date would not be met.

Van Rompuy repeated that de-globalization was not yet on the cards but that companies would review their supply chains in order to avoid the risks of unilateral dependence on a single supplier. He was confident that a different, more decentralized, organic pattern of multi-localization of production systems would emerge. He admitted that there was distrust among the major economic players – China, the USA, and the EU in particular. This was also the case in relations between Western countries and Russia and also within the Western camp and Asia.

Coronavirus crisis has increased global distrust

Van Rompuy said: “We must not forget that the period prior to the coronavirus crisis was already an ordeal for the world economy. The trade war between China and the US is a pointless war, all the more so because it also damages the American economy. China needs to review a number of trade and investment practices, but a tariff war will not bring a solution any closer.” He reiterated that the current coronavirus crisis occurred at a time when the rules-based multilateral order was already under very strong pressure, mainly due to the rise of protectionism. “The WTO cannot even function properly anymore. The G2O has become a mere discussions forum without decision-making capacity. The UNFCCC (United Nations Framework Convention on Climate Change) is the only international body that succeeded in finding a global consensus in Paris 5 years ago. We must work with a ‘coalition of the willing’ to restore the functioning of the WTO and modernize its rules. The same coalition must deliver on climate change.” Van Rompuy said the coronavirus crisis had increased the distrust, the “global distancing” between these global actors even further. Although these did not give rise to new potential military conflicts, he believed this distrust was proving to be an obstacle to efforts to jointly tackle the major problems of our time such as climate change and economic prosperity for all. All this was occurring at a time when international cooperation was more necessary than ever.

Nevertheless, Van Rompuy struck a hopeful note by stating that the crisis could serve to strengthen the need for global institutions and expertise and lead to a recognition of the importance of cooperation. It may also remind people around the world of the shared destiny of all mankind. “It is often said that globalization has increased inequalities. Theoretically, an unaccompanied opening of market forces would cause cumulative impoverishment and enrichment. On the contrary, the globalization we have experienced has drastically reduced extreme poverty. Internally, however, inequalities increased. The coronavirus crisis has exacerbated those inequalities. Some people were better protected against the virus than others. Austerity went too far and was socially blind. Dramatically-increased unemployment also plays a major role. If these inequalities come on top of other discrimination and injustices, this has already led to socially explosive developments in some countries. The focus of almost all politicians in all countries is now on domestic politics.”

The pandemic has hit some countries harder than others, especially those with few reserves. Rising debt in emerging markets poses a risk to the global economy. However, Van Rompuy pointed to steps taken by the European Union and western powers to alleviate some of the negative impacts on poorer nations. He drew attention to the fact that in May, the G20 suspended sovereign debt payments for the 76 poorest countries in the world, which would free up about $11 billion. Van Rompuy said that the EU is a global actor, not a world power, because it lacks a military arm. But in today’s relevant areas such as trade and climate, the EU plays a major role because it can speak there with one voice or deliver the same message.

Van Rompuy concluded that in today’s confused world, the EU certainly had an important role to play. “Sometimes I hear that we are no longer relevant, but if one is relevant because one is endangering the world order, then I choose to be a different kind of relevant.” Van Rompuy identified climate change as one area in which the EU could play a major role. “We spoke with one voice at the historic Paris conference on climate change in December 2015. Again, here we have to lead by example. That’s why the famous Green Deal of the European Union is so important. If we implement what was promised, then we’ll be the first carbon neutral continent in the world by 2050. So, if we want to bring the world closer to the status of a climate friendly planet, we have to show that we are capable of implementing the objectives of the Green Deal. And that’s far more important. The Green Deal, you know, is as important as the single market of Jacques de Lors. In the European Union we are speaking about a big project; this is effectively a very big project. It is a profound transformation of our economy. It’s not about a soft sector anymore. The green deal is a combination of soft values and hard power, hard economics. I think this is the biggest project; after that we overcome, of course, the economic consequences and health consequences of the coronavirus crisis.“

More than a thousand people from around the world registered for the UPF webinar although there was not enough time to respond to more than a few questions which had been sent in. An Albanian questioner, not surprisingly, asked why the EU had not been keener to embrace new members such as Albania and other Southern-east European nations. Romano Prodi replied that he had always been an advocate of the inclusion of the former Yugoslavian countries and Albania. “Clearly, we must insist on criteria where we have this idea of helping the countries to meet the requests, but now I do think that we are too closed and must understand that we must end the problems with the borders of Europe, and I do think that this area is part of Europe and then stop, because I hope that Turkey could be another, but now it’s impossible. So, my answer is I don’t understand why we don’t speed up in ending this problem.” Prodi maintained that the EU should not be afraid of the inclusion of countries that together can account for one hundred percent of European GDP. He said these smaller countries were making enormous progress having started from a very low point. He described himself as an extremist in favor of speeding up the process.”

‪Jose Manuel Barroso responded by saying that on the issue of media freedom, although the situation in Europe was not perfect, it was certainly better compared to other parts of the world. He said literacy has to be addressed at the national level, that the European Union from Brussels or Strasbourg or Luxembourg could not be expected to do everything. He said this was also a responsibility for national governments as well as civil society organizations. “Because today we have a real issue with literacy or lack of literacy with let’s say the abuse of social media, with so-called fake news and manipulation, and that’s a problem also for democracy.” He returned to his earlier concerns about the quality of leadership. He asserted that we need leaders who have the courage to stand for openness but are, at the same time, prepared to tackle sections of the media which are failing to provide accurate and objective information. He concluded that the European Union needed to take action to identify foreign sources which were trying to manipulate the media. “We know that in the global public space there are also attempts to let’s say shape reality in a way that is in the interests of some countries against others. I think the European Union should not be naive and should have ways to protect itself.”

Conclusion

In summing up, Van Rompuy said one of the lessons we can draw from the current coronavirus crisis is that we have to remain believers in the multilateral world, since at the end, the best defender of the multilateral order is the European Union. However, it was clear that for the EU to once again play a geopolitical role, it needed to become much more autonomous and less dependent on the rest of the world. “We have to take our fate in our own hands in terms of the economy, digital defense, energy, and other areas, and then we’ll have more weight on the global level, and we can push the world more towards multilateralism and away from protectionism, rising authoritarianism, and rising nostalgic nationalism.

All three speakers agreed that the European Union needed to become involved in many other areas in order to become a world power, but it was not there yet. As Barroso said, the EU was much more resilient than most people believed, and it needed to take bigger steps than it had done in the past. They all agreed that in spite of the limitations and shortcomings that had been identified, the EU remained the best guarantor of a multilateral order, and multilateralism is always a guarantee of peace as envisioned by its founders. As is the case with most discussions on broad issues, there was no clear answer to the question of whether the European Union still had a role to play in protecting a rules-based global order. The consensus was that the global rules-based order was under severe strain, exacerbated by the current coronavirus crisis, but this could also be an opportunity for the European Union to pull together and take its place as a powerful global power to challenge the dominance of the United States, China, and Russia. It was too early to declare the death of the European Union.

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