You are on page 1of 65

OCTOBER 2014

IDEAS FOR EUROPES NEW LEADERSHIP


A TRANSATLANTIC PERSPECTIVE
2014 Te German Marshall Fund of the United States. All rights reserved.
No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing
from the German Marshall Fund of the United States (GMF). Please direct inquiries to:
Te German Marshall Fund of the United States
1744 R Street, NW
Washington, DC 20009
T 1 202 683 2650
F 1 202 265 1662
E info@gmfus.org
Tis publication can be downloaded for free at www.gmfus.org/publications.
Te views expressed in GMF publications and commentary are the views of the author alone.
GMF Paper Series
Te GMF Paper Series presents research on a variety of transatlantic topics by staf, fellows, and partners of the German
Marshall Fund of the United States. Te views expressed here are those of the author and do not necessarily represent the
views of GMF. Comments from readers are welcome; reply to the mailing address above or by e-mail to info@gmfus.org.
About GMF
Te German Marshall Fund of the United States (GMF) strengthens transatlantic cooperation on regional, national, and
global challenges and opportunities in the spirit of the Marshall Plan. GMF does this by supporting individuals and institu-
tions working in the transatlantic sphere, by convening leaders and members of the policy and business communities,
by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to foster renewed
commitment to the transatlantic relationship. In addition, GMF supports a number of initiatives to strengthen democra-
cies. Founded in 1972 as a non-partisan, non-proft organization through a gif from Germany as a permanent memorial
to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters
in Washington, DC, GMF has ofces in Berlin, Paris, Brussels, Belgrade, Ankara, Bucharest, and Warsaw. GMF also has
smaller representations in Bratislava, Turin, and Stockholm.
On the cover: Exterior of the European Parliament of Strasbourg, France. Botond Horvath/123rf.com
IDEAS FOR EUROPES NEW LEADERSHIP
A Transatlantic Perspective
October 2014

Introduction
Corinna Hrst . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Strengthening the Euro Area and the Single Market
Daniela Schwarzer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The New Commission and the Transatlantic Trade
and Investment Partnership
Peter H. Chase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Common Security and Defense Policy: Charting Next Steps
Alexandra de Hoop Scheffer and Martin Michelot . . . . . . . . . . . . . 23
A New Neighborhood Strategy for Europe
Michael Leigh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Rethinking Mediterranean Strategy
Ian O. Lesser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Europes Role in a Transatlantic Strategy Toward Rising Asia
Daniel Twining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Improving Europes Energy Security
Kristine Berzina. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Migration and Asylum Policy: A Transatlantic View
on Challenges and Opportunities
Tanja Wunderlich, Astrid Ziebarth, and Susan Martin . . . . . . . . . . . 53
Ideas for Europes New Leadership 1
1
Introduction
Corinna Hrst
The second generation
of EU leaders that are
taking over after the
Lisbon Treaty...have
to take on internal
issues, policies, and
disfunctionalities and
at the same time face
unparalleled external
challenges.
T
he new EU leadership is taking office in a difficult period for the European Union. The
sovereign debt and financial crises have calmed superficially, mainly due to the action
of the European Central Bank. However, low growth rates, unemployment, and social
tensions remain, and political risks for the governments in power are growing in a number
of member states. At the same time, mounting external challenges such as the stand-off with
Russia over Ukraine, turmoil in Syria, Northern Iraq, Israel, and Palestine, as well as increasing
refugee streams, are raising deep security concerns. European citizens and Europes interna-
tional partners are looking to the European Union for a strong response. However, the EUs
new leadership will have to contribute to the solution of its most pressing problems even
though the EU does not have all the necessary means to tackle these challenges, while national
governments have little appetite for sharing additional powers and so are seeking solutions
beyond the EU framework.
The change of EU leadership following the 2014 European Parliament elections is an occasion
to take a fresh look at the policy challenges and how to address them. The second generation
of EU leaders that are taking over after the Lisbon Treaty the president of the European
Commission, the president of the European Council, the high representative for foreign and
security affairs as well as the vice presidents and other members of the European Commission,
and the president of the European Parliament have to take on internal issues, policies, and
disfunctionalities and at the same time face unparalleled external challenges.
The United States is a stakeholder in this process, and policymakers on the other side of the
Atlantic are keen to understand the future of EU strategies in key areas. In fact, The German
Marshall Fund of the United States (GMF) public opinion poll, Transatlantic Trends 2014,
showed that U.S. public support for strong leadership from the EU is at 70 percent. Despite
the perceived pivot to Asia, new partnership opportunities with emerging powers like China
and Brazil, as well as a magnitude of domestic policy challenges, the United States continues
to look to the EU and its member states as its closest allies. How Europe handles the repercus-
sions of the financial and economic crisis matters to the United States, in particular whether
Europe manages to remain a key economic player in the world economy. Russias annexation
of Crimea and its deliberate destabilization in the east of Ukraine are fundamental challenges
to the post-Cold War policy in Europe and taken very seriously by the United States. Europes
security has once again become a central issue in the transatlantic discourse.
The change in Europes leadership in Brussels offers an opportunity to assess the challenges
the EU is facing and to formulate ideas for new strategies and policies in the coming five years.
The transatlantic perspectives of this volume written by GMF experts focus on core policy
challenges for Europe that matter most from a transatlantic perspective such as the euro area,
trade, security and defense, and policies dealing with energy security, migration, and regions
such as Europes neighborhoods and Asia. The issues at stake and how the EU addresses
them either affect the United States as a stakeholder, require transatlantic coordination, or
offer opportunities for an exchange on lessons learned and good practices among the transat-
lantic partners.
The German Marshall Fund of the United States 2
In the first chapter, Daniela Schwarzer argues that while Europe has achieved progress in
strengthening the governance structures and policy instruments of the euro area, more needs
to be done to improve the conditions for private-sector led growth in the short term. In the
medium term, the governance structures of the euro area need to be reviewed not only to
improve its resilience in the advent of future crises. The euro area and its member states face
the broad challenge to define a new social contract as social inequality within member states
and divergence between member states threatens the hopes and welfare promises on which
both post-war nation states and the European integration project were built.
The chapter on the Transatlantic Trade and Investment Partnership (TTIP) highlights the
need for the new EU leadership and the new trade commissioner to remain ambitious and
maintain momentum in the talks, but to clearly explain the timing and the issues to the
member states and the European citizens. According to GMF non-resident fellow Peter Chase,
TTIP could bring the two largest economic areas together in part by building bridges between
our regulatory regimes, where the levels of protection are similar. It could also create rules
and disciplines in new areas. The issues of how the protection of personal data and financial
services regulations will be handled in this context are of great importance to the U.S. and
European business communities.
Alexandra de Hoop Scheffer and Martin Michelot make a case for the continued reinforce-
ment of political willingness to develop a more pronounced European security strategy with
deeper cooperation on operational and strategic levels with NATO. According to them, Europe
needs to be able to operate independently from the United States.
As Europe engages in international affairs whether responding to instability in its neighbor-
hoods or exploring new partnerships and markets further abroad its actions frequently call
for the transatlantic partners to coordinate. In two pieces on Europes neighboring regions in
the East and South, Michael Leigh and Ian O. Lesser argue for a new approach to the European
Neighborhood Policy that means decoupling the two regions and including more tailor-
made approaches that focuses on security, energy, and trade aspects and in the case of the
Mediterranean region, as Lesser argues, there is a need to take rapidly changing migration
dynamics into consideration. A more strategic approach should also include dialogues with
interested third countries and particularly the United States whose interests are complimen-
tary.
On the other hand, when it comes to Asia, Daniel Twining argues that the EU should adopt
a whole-of-Asia approach that takes advantage of member states relations in the region but
provides more economic weight. It would allow Europe to articulate more its interests in
matters such as a peaceful resolution of territorial disputes, freedom of the sea lanes, and
democratic development. A more strategic approach would magnify the EUs influence by
aligning Brussels with like-minded democracies across the Indo-Pacific, including the United
States.
The specialized policy area of energy security in Europe is an important issue for cooperation
with the United States. Kristine Berzina argues for improved energy efficiency, strengthened
Ideas for Europes New Leadership 3
regional cooperation, and interconnectivity between EU member states as well as increased
domestic energy production. In addition, she recommends more coordinated energy security
strategies across the Atlantic and suggests that EU policies and infrastructures allow additional
natural gas suppliers such as the United States to help diversify the EUs energy mix.
Finally, Tanja Wunderlich, Astrid Ziebarth, and Susan Martin draw on comparisons with the
United States and link migration to foreign and security policies as well as the development
policies with migrant-sending regions or countries. Rather than developing new EU legisla-
tion, though, they argue for better implementation of adopted European legislation. This
means applying an integrated approach, combining restrictive border security measures with
the opening of legal access channels, more convergence of national asylum practices, and
increasing cooperation with countries of origin.
I would like to thank all the authors for their contributions as well as the peer reviewers for
their feedback and scrutiny. A special thank you goes to Christine Chumbler, GMF publica-
tions manager, who was instrumental in improving format and quality of this volume.
Corinna Hrst is the deputy director of The German Marshall Fund of the United States Transat-
lantic Center in Brussels.
The German Marshall Fund of the United States 4
2
Strengthening the Euro Area
and the Single Market
Daniela Schwarzer
Introduction
F
or the euro area, several years of existential threats to the single currency and its unity
seem to have ended. Spreads on public debt have come down considerably since summer
2012 as a consequence of the European Central Banks (ECB) promise to potentially buy
unlimited amounts of government bonds on the secondary market. Two years later, growth
has started to return, albeit unevenly, to the euro area member states.
Over the last years, in a reaction to the series of deep crises, member state governments, along
with the EU institutions, have achieved significant progress in strengthening the governance
structures and policy instruments of the euro area. Yet the monetary unions architecture
remains incomplete and policies still need to be refined to improve the conditions for private-
sector led growth. While working on these challenges, the euro area may be faced with new
market-driven crises that might be triggered by various circumstances, such as instability in
the financial sector, unsustainable public debt levels, political tensions, or destabilizing inter-
national conflicts.
The Economic and Financial Situation
The new EU leadership is taking office while the vast majority of EU member states are still
struggling with no or very low growth. GDP growth rates have varied significantly across
member states for the last three years, now they are converging at a low level. While unem-
ployment is at around 12 percent on average in the euro area, youth unemployment isclose to
25 percent, and well over 50 percent in both Spain and Greece.
One reason why growth has not returned more strongly to the most vulnerable member states
is the credit crunch and a severe fragmentation of financial markets. The ECB has taken action
to alleviate the situation, but corporate borrowing rates still vary decisively and it is difficult, if
not impossible, in particular for small and medium-sized companies to afford the credit neces-
Background
Although the euro arguably achieved its primary objective of channeling surplus savings from the
more-developed parts of the EU to the less-developed peripheral states, relatively weak financial
markets in these countries channeled too much of this capital to national governments rather than
to private sector investment. As a result, when the financial crisis began in 2007-08, it quickly
moved to the real economy, sovereign debt, and back to the banking sector. Despite doubts that
the euro would survive, which were particularly widespread in the United States when the sovereign
debt crisis hit in 2010, the currency union has proven to have a considerable degree of resilience.
In each phase, serious weaknesses of euro area governance were revealed. National governments,
together with the EU institutions, have designed an impressive series of policy responses, including
setting up a mechanism to manage government liquidity crises, creating the European Stability
Mechanism (ESM), establishing a Banking Union with a Single Supervisory and a Single Resolution
Mechanism, and agreeing to reform the surveillance and coordination of national budgetary and
economic policies. Most importantly, the European Central Bank has taken on a crucial role as the
euro areas crisis manager. With the announcement of its OMT program (Outright Monetary Transac-
tions), the ECB finally managed to calm a self-fulfilling crisis in 2012.
Ideas for Europes New Leadership 5
sary for their day-to-day activities and for future investment. This situation is all the more
problematic as it is small and medium-sized businesses that provide a large share of the jobs
in some of the catch-up countries. A certain dispersion of interest rates is indeed normal in
the European Monetary Union, as it reflects differences in banking systems and national risk
levels as well as different demand levels and available savings. But the degree of dispersion of
private borrowing rates has become a severe obstacle to economic recovery.
Political Challenges
While there have been no lasting eruptions of social tensions in any member state, the political
repercussions of years of crisis can be felt in many places, especially in those countries which
had to undergo severe adjustment processes. Right-wing extremists and other Euroskeptics
now occupy an unparalleled high number of seats in the European legislature. It is, however,
not in the EU institutions, that the presence of Euroskeptics will most be felt. These anti-
establishment movements, which frequently combine Euroskepticism with anti-globalization
and xenophobic positions, will most probably have their strongest influence on policymaking
at the national level. Using their new presence in the European Parliament, they will weigh
on national governments willingness and ability to lead constructively on EU affairs. Under
the pressure of rising Euroskeptic movements, a number of governments have, for instance,
questioned labor mobility in the single market. The EUs core a cross-border single market
with the free circulation of goods, services, people, and capital risks becoming the crystal-
Figure 1: GDP growth of selected euro-area countries, 2002-2015
Source: OECD, 2014
The German Marshall Fund of the United States 6
lization point of anti-liberal and anti-globalization sentiments that have been building up for
a while. Also projects like the Transatlantic Trade and Investment Partnership (TTIP) (see
chapter by Peter Chase The New Commission and the Transatlantic Trade and Investment
Partnership, page 12), which are of strategic importance to both Europe and the United States
may encounter serious political obstacles as it appears today that at least in some countries,
anti-U.S. opinions are combined with Euroskeptical and outright anti-European sentiments.
Finally, domestic structural reforms and budgetary consolidation measures will become
even harder to implement the more dire the social and economic situation is and if they are
depicted as imposed by the EU.
Political leaders need to improve the domestic conditions for sounder economic develop-
ment throughout the EU and work together with the EU institutions to provide better market
conditions and accompanying initiatives for the private sector to thrive. Meanwhile, they will
have to measure the long-term consequences for those societies in which half of the young
labor force will not find a job in the foreseeable future. It is a key responsibility for the new EU
leadership to contribute to formulating a more decided European response to this social and
economic challenge.
The set-up of the new European Commission with four vice presidents
1
responsible for topics
directly relevant to the future of economic growth, employment, cohesion, and the stability of
the euro area takes into account the complex challenges that the EU and the euro area have to
handle. The approach to ensure cooperation across Directorate Generals by setting up project
structures that involve both vice presidents and commissioners likewise reflects the growing
perception that the previous fragmentation of the Commission did not encourage sufficient
cooperation across policy areas. The new Commission will still have to struggle with overlap-
ping competencies and diverging policy preferences among commissioners and vice presi-
dents when facing the challenge of strengthening the euro area, the single market, and hence
Europes prospects for growth, jobs, and social and political stability.
Policy Recommendations
1. Improve Growth Perspectives in View of Adapting to Future Challenges
There is by now a relatively broad consensus that stronger private sector-led growth in
the euro area requires a combination of higher price competitiveness, more flexible labor
markets, increased labor mobility, better financing conditions, and greater private and public
investment in research, innovation, education, and infrastructure, as well as a stable macro-
economic environment.
Increasing private-sector competitiveness should remain an objective of both national
economic policy and EU policymaking. Companies success depends, crucially, on their ability
to innovate, reach markets, and keep costs low. Some member states, in particular under the
pressure of the recent crisis or because they have received a rescue package and had to fulfill
conditionality, have implemented considerable reforms. But accompanying measures at the EU
1
These are the vice president for jobs, growth, investment and competitiveness, the vice president for the euro and social dialogue,
the vice president for the digital single market, and the vice president for the energy union.
Political leaders
need to improve the
domestic conditions
for sounder economic
development
throughout the EU.
Ideas for Europes New Leadership 7
level can effectively increase the positive effects of measures taken at the national level if they
improve the conditions under which the companies operate, e.g. by stepping up infrastructure,
research and development activities, and education and mobility.
The EUs efforts to achieve a Union of jobs, growth and competitiveness, as the European
Council Conclusion of 26/27 June 2014 put it, should be designed in such a way that they can
provide a forward-looking response to wider challenges associated with the changes of the
global economic system, the demographic challenges faced by aging societies, and the techno-
logical evolution that has caused doubts about our economic models, societal structures, and
political systems.
ECB measures to strengthen financial markets and to end the credit crunch in the hardest
hit countries need to be closely monitored as it is still far too expensive for companies in
some regions or member states to raise credit. It should be a priority to prevent investment in
innovation, research, and new equipment from declining further as it will hamper companies
competitiveness in time.
Public investment needs vary across member states, but it would be wrong to assume that
only the private sector in those countries suffering from low growth and low competitiveness
would further thrive with increased public investment. Germany is a particularly interesting
case. The largest and most competitive euro-area economy is regularly reminded that it should
step up public investment, which would not only ensure German growth perspectives, but
would also stimulate growth in other member states by increasing Germanys imports, thereby
contributing to the necessary rebalancing of the euro area.
2. Pursue the Debate on a Fiscal Capacity for the Euro Area
Some member states may temporarily need stronger financial support from the EU than is so
far admitted. One reason is that some member states currently cannot provide adequate levels
of public investment. Another is to support the implementation of reforms that allow reducing
the structural gaps in the European Union. Finally, there are strong macro-economic argu-
ments for the establishment of a cyclical stabilization mechanism that would help reduce the
output gap and alleviate cyclical divergence across the euro area.
Policymakers face the challenge of developing policy tools that make financial transfers effec-
tive and acceptable to actual and self-perceived net payers. A first pragmatic step would be
to make better use of existing EU funds, e.g. by giving national entities even more support to
actually access these resources, which so far remain underused in many cases. Other instru-
ments that do not directly weigh on national or European budgets can be further used. For
instance, the volume of so-called euro project bonds could be stepped up and the activities
of the European Investment Bank further increased to provide funding sources for stronger,
future-oriented investment.
There are strong arguments to develop fiscal instruments that are designed to extend struc-
tural change. They should employ two principles in their design. Firstly, financial support
could be linked to reform commitments taken by the recipient governments and backed
by prior agreements with domestic stakeholders in order to reduce the moral hazard fears
It would be wrong to
assume that only the
private sector in those
countries suffering
from low growth and
low competitiveness
would further thrive
with increased public
investment.
The German Marshall Fund of the United States 8
widely present in the net-payer countries. Secondly, financial support mechanisms should be
designed in such a way that they will have long-term, overarching benefits that in the future
extend beyond the current crisis countries. This requires the introduction of future projections
of the EU in a changing world economy as a whole into the European debate.
The dominant perception today is that non-crisis countries help crisis countries, or in other
words, the North transfers to the South, and that this is going to remain so. In this context,
the costs of not bringing the crisis countries back to stronger economic performance, as well
as the long-term growth and demographic perspectives of Europes North, need to be made
more explicit. Moreover, the perception that the euro areas problems are mainly structural
needs to be reviewed. Cyclical divergence has been a problem in the currency union well
before the crisis hit and it continues to be so and this not only for the Southern countries.
A cyclical stabilization mechanism would help reduce regional divergence and support a more
stable macro-economic set up for all other measures on the national and European levels. The
new Commission should pick up the debate on how to better equip the euro area to deal with
asymmetric shocks and help establish a more broadly shared understanding of whether there
are indeed cyclical components to the euro areas past and possible future crises. In a second
step, mechanisms to allow stabilization across member states, and in time, should be assessed.
This discussion should look at various options, including a European Unemployment scheme.
3. Enable Some Fiscal Flexibility in the Short Term
Sustainable public finances defined as member state governments ability to access global
capital markets on reasonable borrowing terms should remain the prime objective of
budgetary policy coordination in the euro area. There are still a considerable number of
member states including large and systemically relevant ones such as Italy and France
whose public finances are not yet in order. Those with rapidly aging populations, like
Germany, may be in a comfortable situation now, but face high risks at a later point in time.
Higher growth levels in the EU are a prerequisite to bringing down the high debt levels. Some
member states still need to adjust their budgets, but this needs to be achieved in a way that
does not further hamper political and social stability and weigh too heavily on investment in
education, infrastructure, and research and development policies.
The rules to coordinate budgetary policies of the member states have been adjusted in such a
way that they take domestic specificities and cyclical components into account more strongly,
as governing by rules is not a purely technocratic process, but requires some scope for political
judgment. However, this judgment cannot mean that some member states abide by the rules,
while others do not do so entirely, solely because they are larger than others. Such rule-
bending undermines the legitimacy of the coordination framework. The European commis-
sioner for economic and financial affairs, taxation and customs in a still to be defined coopera-
tion with the vice president for the euro and social dialogue will be the main implementer of
budgetary surveillance and will need to gain a considerable degree of political independence
to accomplish his tasks. Otherwise, he will not be able to implement the rules effectively and at
the same time start engaging the euro area governments in debates that fully take into account
the fact that the creation of the monetary union has actually created both interdependencies
The perception that
the euro areas
problems are mainly
structural needs to be
reviewed.
Ideas for Europes New Leadership 9
and public goods in the European economy. It would be an important achievement of the next
commissioner if policy coordination were reformed in such a way that the aggregate fiscal
policy stance of the euro area is taken into account more rigorously.
An intergovernmental alternative to the current set-up, with the European Commission
at its core, would be to further develop the European Stability Mechanisms (ESM) and its
surveillance function. It is possible that this initiative is driven by a number of member states
governments, in particular, in case other governance reforms fail that require secondary law
revisions or even Treaty change. The ESM is currently conceived of as a financing tool of
the euro area member states with no role of their own in surveillance of domestic policy, but
there are strong reasons to explore how it can be developed into an entity that more strongly
resembles a European Treasury with more scope to raise money on the markets and play a
stronger role in governing fiscal policies in the euro area.
Meanwhile, the current technocratic approach to policy coordination hits limits in terms of
legitimacy as soon as the European Commission actually pressures national governments to
change policies and policymakers blame reforms and restrictive budgetary policies solely on
Brussels. The new EU leadership should engage national and European policymakers and
European citizens in a discussion on how democratic legitimacy can be enhanced. Strength-
ening the European and national Parliaments, for example in the process of goal setting and
surveillance implementation, is an important step. If stronger democratic legitimacy is not
achieved in the medium term, strengthening policy coordination in the euro area may, in fact,
turn out to be a tool that weakens integration rather than strengthens it. Meanwhile, the issue
of enhancing the democratic base of economic and budgetary policymaking in the euro area
in such a way that citizens actually perceive that a vote matters is a much broader and impor-
tant task to tackle.
4. Deal with Unsustainable Debt Levels in the Medium Term
The sustainability of debt levels depends on future budgetary policy decisions and most
importantly on growth performance. In the euro area, single member states cannot inflate debt
away as they once did when they still had national currencies. There are essentially three ways
to cope with high debt levels: outgrow the debt, run a budgetary surplus over a long time, or
declare a default and cut public debt. This latter option may be necessary for some member
states but it is not an easy option to implement as it can ruin a governments access to credit
markets for years if not done properly. So it has to be one-time, and accompanied by measures
to rebuild investors trust, e.g. by launching a strong pro-growth program that is likely to
yield the expected success. If executed unsuccessfully, market participants could lose trust in
other member states, too, even states that do not face solvency problems. This could result
in another round of self-fulfilling crises as in 2010. So if there are reasons to reconsider debt
restructuring in the EU for non-program countries over the medium term, the governance
framework should be reviewed.
Firstly, the existing mechanisms built to deal with liquidity needs for the government in ques-
tion may need to be strengthened to bridge future financing gaps. Secondly, the EU should
If stronger democratic
legitimacy is not
achieved in the
medium term,
strengthening policy
coordination in the
euro area may, in
fact, turn out to be
a tool that weakens
integration rather than
strengthens it.
The German Marshall Fund of the United States 10
create a debt restructuring mechanism, a legal framework that includes procedures outlining
how to handle a default in an orderly way. In fact, the mere perspective of a possible default
(which today is still not a realistic option due to the expected contagion effects) would be good
for the euro area. Member states would very clearly have to bear the costs for their behavior
which is a probably much more effective disciplinary device than rules- and sanction-based
budgetary policy coordination.
5. Rethink the European Social Contract
The crises in the euro area, together with the broader economic, demographic, and techno-
logical transformations, are challenging the social contracts on the national and European
levels upon which post-war integration was based. On the national level, an intergenerational
contract gave younger generations the hope and expectation to be better off than their parents
generation. In addition to this, on a horizontal level, welfare mechanisms within member
states were in place that ensured a certain degree of social cohesion and solidarity. Meanwhile,
between member states, following the end of World War II, an unparalleled phase of coopera-
tion and integration started. It was based on the assumption that European integration would
bring peace, stability, and prosperity to the European continent, which would outweigh the
sharing of sovereignty in some areas.
The crises of the last few years have further challenged these assumptions, which in any case
had been put under stress by broader economic and societal trends. Today, in most member
states, the intergenerational contract no longer holds; the younger generations can no longer
assume they will be as well or better off than their parents, given the costs of longevity, record
levels of youth unemployment, and an apparent incapacity or unwillingness of Western
governments to adapt education systems to tomorrows needs. Secondly, governments can no
longer maintain previously unchallenged levels of welfare provision. With a shrinking redis-
tributive capacity and rising costs, for instance in health systems and unemployment schemes,
the social contract across social classes or groups is challenged and has put the intra-societal
notion of solidarity to a serious test in a number of member states. In particular, citizens in
member states that are going through severe adaptation processes have little reason to believe
in mutual insurance mechanisms, which in the past were at the heart of social systems and
enabled and maintained social peace and political stability in post-War Western Europe.
To complicate matters further, the social contract between member states that has made the
continuous deepening of the European Union possible in more than five decades after the
end of World War II is also challenged on the European level. Today, many policymakers and
observers both from crisis and non-crisis countries no longer perceive European integra-
tion as a win-win-situation. The sovereign debt crisis in particular has created the perception
of a negative sum or, at best, a zero sum game in which eventually some member states
will have to absorb losses. In such a situation (and in light of the challenges governments are
facing on the national levels), anti-EU sentiments and statements will continue to be strong.
Given the moderate growth perspectives of the European economy and the shrinking scope
for redistribution both within and across societies, very high amounts of political energy will
Governments
can no longer
maintain previously
unchallenged levels of
welfare provision.
Ideas for Europes New Leadership 11
need to be invested into the phrasing of a new narrative for the European Union, if not for
the Western liberal order. There is obviously no easy solution for the developments described
above. The challenge for both national and European policymakers will be to give Europe a
constructive place in this debate and disassociate it from the scapegoat position into which the
rising Euroskeptic voices have pushed it. A first point to realize is perhaps that the EU has in
fact proven its promise trade and growth have enormously benefitted by market integration
since the 1950s, and political stability and peace have reigned in the EU for almost 70 years. As
important as this perspective is, it is insufficient to create strong support for further integra-
tion unless there is a realistic scenario how the EU can deliver better on jobs, growth, and
fairness.
6. Relaunch the Single Market
In order to overcome the ongoing fragmentation in many economic sectors of the EU and
to improve competitiveness, the decade-old debate on further market integration should be
relaunched with the ambition to implement a set of measures that will make the EU more
unified, competitive, legitimate, and hence better prepared for future challenges.
An immediate challenge to European competitiveness is insecure energy provision and high
energy costs, in particular given the pressure exerted by Russia. A number of countries,
including the United States, will have a competitive advantage due to lower energy costs unless
the EU manages to move forward with a joint and more innovative energy policy. Decidedly
improving energy efficiency and developing new energy sources, in particular in the field
of renewables, can in fact become a growth industry for Europe and a crucial asset for its
competitiveness in the medium term (see chapter by Kristina Berzina Improving Europes
Energy Security, page 46). Just as for energy, there are other fields in which the European
Union as a whole would greatly benefit from further market integration, both in terms of effi-
ciency and security. For instance, the digital market, services, and financial markets still show
strong degrees of fragmentation. The crisis has shown how directly the functioning of cross-
border financial markets are linked to the well-being of the real economy. In the next phase
of the EUs development, it will become more and more apparent to which degree goods and
services intertwine and how crucial and overarching the strategy for the digital economy is.
Combining market integration and an accompanying industrial policy that enhances innova-
tive capability and research policies will help create new investment opportunities. Intercon-
necting infrastructure would also help relieve the market for goods and services if logistical
channels are improved.
Meanwhile, Europes capacity to innovate in the digital economy and to complement the more
or less integrated goods market with a digital component is an important priority for the new
Commission and clearly reflected in its structure. Already, today Europes economy is less
digitalized that other major economies and citizens make comparatively little use of digital
technologies. Questions of copyright, standards, and patents should be tackled jointly on the
EU level as soon as possible. This would reduce legal uncertainty and transaction costs and
develop Europes digital economy in a market as closely integrated as possible.
A number of countries,
including the United
States, will have a
competitive advantage
due to lower energy
costs unless the EU
manages to move
forward with a joint
and more innovative
energy policy.
The German Marshall Fund of the United States 12
7. Strengthen the Euro Area Internationally
Europes economic challenges are obviously related to the increasing competitiveness of other
players. This challenge will not disappear while threats from Europes immediate neighbor-
hood are strongly on the rise. These threats are not just of a security or energy-related nature.
For example, an economic crash in Russia and neighboring countries would spill into the EU
and the European financial sector. Meanwhile, emerging countries, in particular China, exploit
the stand-off with Russia economically while the EU countries have to bear the economic
costs and question the existing global governance mechanisms more and more openly. This is
all the more a troubling perspective, since, as a result of the financial crisis, Europes weight in
the changing world economy has already seriously declined not only in relative economic
terms vis--vis the increasingly assertive emerging countries but also politically.
Also, the EUs political image has suffered as its member states, which used to be on the
lending side of financial crisis management, turned into the largest net-recipient of financial
aid in the world in 2010. For a while, the EUs weight along with that of the United States
as expressed in voting rights in the international financial institutions of the World Bank and
the International Monetary Fund has been questioned as it no longer reflects relative global
GDP shares. A recent sign of an end of Western-capitalist dominance in the governance of the
international economic, financial, and monetary system was the creation of the BRICS (Brazil,
Russia, India, China, and South Africa) Development Bank and Reserve Fund at a meeting
in Brazil mid-July 2014. While this institution will probably not challenge the IMF, the World
Bank, or the ERBD as such, it constitutes a further example of competitive regional coopera-
tion arrangements that challenge the global ambitions and rules-setting abilities of the Bretton
Woods institutions.
The relative decline of the EUs economic and financial weight and political clout should give
the incoming EU leadership reasons enough to review the international representation of the
euro area in particular. Of course, the EU already is an international actor in global economic
matters; and in international trade, financial regulation, or competition matters, it is the EU
that negotiates. But what the EU now needs in the medium term is a unified representation
of its monetary union to chime into the international discussion of monetary, financial, and
macro-economic matters with a strong, unified European voice. With the creation of the euro,
the EU has given itself the means to have a global monetary presence and impact along
with the U.S. dollar and the renminbi which will continue to rise in its international role in
the next decade. Providing the euro area with a stronger and institutionally unified interna-
tional representation would usefully accompany the necessary internal institutional consolida-
tion. Together with the European Monetary Fund, which might emerge as the institution of
the euro area governance taking on roles of a Treasury, there should be an outside representa-
tion that gives the EU a stronger international voice and makes it a more coherent and potent
interlocutor for international partners such as the United States and China.
Daniela Schwarzer is the senior director for research and director of the Europe program for the
German Marshall Fund of the United States.
An economic crash
in Russia and
neighboring countries
would spill into the
EU and the European
financial sector.
Ideas for Europes New Leadership 13
3
The New Commission and the Transatlantic
Trade and Investment Partnership
Peter H. Chase
Introduction
O
ne of the biggest projects the new EU trade commissioner will inherit from out-going
Commissioner Karel De Gucht is the on-going negotiations toward a Transatlantic
Trade and Investment Partnership (TTIP) agreement with the United States. Heralded
by U.S. President Barack Obama as one of the top priorities for his second term in his February
2013 State of the Union address, and launched by Presidents Obama, JosBarroso, and
Herman Van Rompuy at the June 17-18 G8 Summit, the negotiations have run into unex-
pected headwinds, both in the talks themselves and from increased public criticism in the EU.
This has been especially and ironically the case in generally pro-trade U.K. and Germany,
where the revelations about U.S. National Security Agency (NSA) spying activities have
Background
The European Union and United States have an immense and in many ways unique economic rela-
tionship; the Transatlantic Trade and Investment Partnership (TTIP) agreement would build on these
strengths. According to EU statistics, the United States is by far the largest market for European
products, buying nearly 17 percent of the EUs goods exports. (Switzerland, in second place, takes
nearly 10 percent, while China has an 8.5 percent share.) Total trade in goods and services was
790 billion in 2013, with the EU running a surplus in both; EU goods exports were 288 billion,
while services exports were 158.8 billion.
But while the United States and the EU are each others largest trading partners, it is their invest-
ment relationship that is unique. Again according to EU statistics, EU investment in the United
States stood at 1.65 trillion at the end of 2012, while U.S. firms have invested 1.5 trillion in
the EUs 28 member states. These investments generate turnovers of about 4 trillion each year,
and directly provide over 8 million jobs (15 million, counting immediate indirect employment). The
companies of all sizes that have made these investments are transatlantic firms, with highly
integrated operations. Nearly half of the EUs goods exports to the United States are intra-firm, and
European firms like BMW are leading U.S. exporters. So as TTIP facilitates transatlantic trade, it
boosts the ability of these firms to sell everywhere in the world.
Knowing even an exceptionally strong relationship can be improved, the November 2011 U.S.-EU
Summit established a High Level Working Group on Jobs and Growth, led by Trade Commissioner
Karel De Gucht and then-U.S. Trade Representative Ron Kirk, to identify policies and measures to
increase EU-U.S. trade and investment to support mutually beneficial job creation, economic growth
and international competitiveness. The Working Group was asked to conduct extensive public
consultations to develop possible options, to weigh the economic impact and political feasibility of
these (as well as their consistency with international trade obligations), and to report back by the
end of 2012.
The report, recommending the launch of negotiations toward a comprehensive and ambitious
Transatlantic Trade and Investment Partnership, was released February 11, 2013 and blessed
by Presidents Obama, Barroso, and Van Rompuy on February 13. After extensive consultation
with Congress, the European Parliament, and the member states (which gave the Commission a
mandate for the negotiations on June 11), the three presidents jointly announced on June 17 that
the first round of talks would be held in Washington in July 2013. Subsequent rounds were held in
November and December 2013 and March, May, and July 2014. The seventh round takes place the
week of September 29 in the United States.
The German Marshall Fund of the United States 14
U.S. and EU leaders
launched TTIP
precisely to provide a
badly needed boost for
both their economies.
shaken many Europeans trust in the United States. The new European Commission, and
the new trade commissioner in particular, will need to expect and to respond to a barrage of
complaints about the TTIPs alleged lack of transparency, lower consumer and environment
protections, and attack on democracy. These concerns can be answered, as this chapter will
suggest, and indeed must be if the EU and the transatlantic partnership are to reap the broader
geo-strategic and economic benefits of TTIP.
Jobs and the Geo-Strategic Imperatives
The European Union is slowly exiting six years of recession, with the 0.1 percent GDP change
in 2013 expected to increase to 1.6 percent this year and perhaps even 2 percent next. Unfor-
tunately, these still anemic growth rates will not help much on unemployment, which reached
a historic peak of 12 percent (some 26 million people) in 2013. The Commission still expects
unemployment of 10.1 percent for the EU as a whole and 11.4 percent for the euro area by the
end of 2015. Europes young people are by far the hardest hit, with youth unemployment in
Spain, Greece, Italy, and elsewhere at completely unacceptable rates of over 35 percent.
European Commission President-designate Jean-Claude Juncker and every other European
politician have declared that the EUs top priority must be to generate the economic growth
to address this immense social problem. But the very real constraints on government finance
have badly crimped the traditional tools to do so, even with a shift away from the austerity
debates of the past few years.
The new trade commissioner has one of the key portfolios to help. Trade including both
the exporting and importing of goods and services is an immense generator of growth;
indeed, EU gains in trade cut the severity of the 2012 recession in the EU by a factor of four,
as the increase in net exports compensated for declines in investment and domestic demand.
1

Even though the EU itself has the worlds largest economy, 90 percent of the consumers and of
global growth over the next decade will come from outside it. This is why some 30 million jobs
in the EU now depend directly on trade, up 10 million in the last decade. And Commission
economists estimate that each additional 1 billion in exports generates 15,000 jobs across the
EU.
2

U.S. and EU leaders launched TTIP precisely to provide a badly needed boost for both their
economies. As immense as the transatlantic economic relationship is, even better access to the
other largest economy in the world would boost exports and produce growth and jobs in each.
The Commissions detailed assessment of TTIPs potential economic impact shows that an
ambitious agreement would have permanently increased EU GDP by the time an agreement
is fully implemented in ten years, with much of that growth coming from a 28 percent (187
billion) addition of new exports of goods and services to the United States.
3

1
See Contribution of the Commission to the February 2013 European Council Debate on Trade, Growth and Jobs, February 2013,
http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_151052.pdf.
2
Ibid.
3
That is, by 2027, with TTIP, EU GDP will be 0.5 percent larger than it otherwise would have been for that year; the total cumulative
gains over the ten-year period could be on the order of 800 billion.
Ideas for Europes New Leadership 15
Precisely how this translates into net new jobs is difficult to project, which is why some have
raised doubts about TTIPs economic benefits. But, as the new trade commissioner will have
to repeatedly explain, every economic analysis of TTIP shows net gain to the EU, even if
they differ on magnitude. This stands to reason: any trade agreement will lower the cost of
selling European products and services in the United States, making those goods and services
relatively cheaper for U.S. consumers who will buy more of them. That is what trade agree-
ments do, by eliminating tariffs (and while the average U.S. tariff is low at about 3 percent,
many individual tariff lines remain above 10 percent, on everything from trucks to foods
to consumer goods), reducing the cost of customs clearance, and opening new markets by
finding ways around regulatory differences.
Moreover, because the U.S.-EU investment relationship is so huge, with U.S. firms having
invested $2.2 trillion in the EU while EU companies have some $1.65 trillion in their busi-
nesses in the United States, reducing costs of operating between the two will significantly
improve their competitiveness vis--vis the rest of the world. So whether the new jobs TTIP
will generate is in the millions or the hundreds of thousands, the numbers are significant and
will be proportionately higher in countries like Italy, Portugal, and Spain, which face substan-
tial tariff and regulatory barriers to their exports of agricultural and lighter industrial prod-
ucts.
But while TTIP is an economic agreement, it is also more than that. It will be the first
Congressionally ratified agreement between the EU and the United States, giving a new
foundation to the transatlantic relationship just as some of ties that have bound us together
including NATO are arguably growing weaker.
Running into Headwinds
With TTIPs benefits so obvious, many hoped it could be concluded quickly, not least so the
promised growth and jobs could come as soon as possible. One year and six rounds of nego-
tiations later, missteps in the talks and growing public criticism have drained the momentum
from TTIP. The new trade commissioner will have to address this if TTIP is going to be done
by the end of 2015, as the European Council directed EU Commission President-designate
Juncker in June, or even before President Obama leaves office in January 2017.
Getting the Timing Right
Part of the problem is perception: timelines and expectations are confused by vague
phrases about TTIP being done. Negotiators must first reach a political agreement on the
outlines of the deal, as the EU did with Canada last October. They must then finalize and
reach initial agreement on the text in a sense, the negotiations are done then. This text
will need a legal and technical scrub and translation (as well as verification of the translations)
before the Commission asks Council for authority to sign; that too will take time. When it is
signed, it again will be done, but of course it will still require ratification by Congress and the
European Parliament before it can go provisionally into effect, and ratification by the parlia-
ments of all 28 member states before it goes fully into force. The new commissioner can help
manage expectations, and momentum, by being precise about these timelines.
Every economic
analysis of TTIP shows
net gain to the EU,
even if they differ on
magnitude.
The German Marshall Fund of the United States 16
The negotiations face
three key problems,
in market access
(tariffs, services,
and procurement),
regulatory issues, and
investment.
Putting the Talks on Track
In the meantime, the negotiators are doing their job by putting together the underlying TTIP
text. Even if TTIP were a normal free trade agreement (FTA), this would be a daunting and
time-consuming task. TTIP is, after all, a legal contract governing the way the EU and the
United States will do business with each other in every sector of the economy. Moreover, while
both have signed many FTAs, they have consciously and rightly decided not to use those
as templates for TTIP. This is the first time either has negotiated an agreement with a partner
of equal size, and both knew the other would not just accept the others template. So they have
started from the ground up, identifying the principles and provisions needed in each chapter
and only then drafting text, which is why the first five combined texts were not on the table
until the fifth round in May. Further, TTIP is meant to be more than a normal FTA. It explores
how domestic law and regulation affect bilateral trade, and creates rules and disciplines in new
areas, such as ensuring fair competition with state-owned enterprises and protecting trade
secrets. These new parts, too, are being built from the ground up.
Even so, the lead negotiators believe that the technical work of putting together the text can
certainly be done by mid-2015 if all goes smoothly in the talks. But unfortunately, right
now, it is not. The new trade commissioner will need to work with De Gucht in the hand-over
phase and with his counterpart U.S. Trade Representative Michael Froman even now to get
things back on track by the next round, scheduled for late September.
The negotiations face three key problems, in market access (tariffs, services, and procure-
ment), regulatory issues, and investment. On market access, Commission negotiators had
wanted the TTIP process to be different, and pressed internally to provide an ambitious first
offer, calling in February for immediate elimination of tariffs on almost 90 percent of prod-
ucts. The United States took a more traditional approach and had an initial offer of about
70 percent. The Commission was criticized by the member states for being nave, and has
consciously decided not to be forthcoming in the other market access areas until the United
States makes better offers, especially in public procurement (one of the few TTIP issues that
is sensitive to the upcoming U.S. mid-term elections given union support for Buy America
provisions, which in general require the U.S. federal and state and local governments to spend
U.S. taxpayer dollars on U.S.-produced steel and other key products). Accordingly, the EU has
placed a unambitious services offer on the table, and is sitting tight on procurement.
This stalemate was meant to break in September, when the United States was expected to
provide a new tariff offer and something more ambitious on procurement. And here is where
the new trade commissioner, as a new player, could make a difference. Someone has to quietly
encourage both De Gucht and Froman to communicate, and to agree to stop playing the
negotiators game. Instead, they should agree that the floor for the market access negotiations
should immediately become the best that we have already agreed with any partner. For why
should the European Union and the United States end with something less ambitious between
them than they had with someone else?
Ideas for Europes New Leadership 17
The miscue on market access derives in part from another misunderstanding, on the regula-
tory chapter of TTIP. Both sides basically agree this should include five sections:
on principles and best practices in domestic regulation (what the U.S. government calls
regulatory coherence);
plussed-up provisions on the traditional WTO areas of sanitary- and phyto-sanitary (SPS)
measures;
technical barriers to trade (TBT, largely standards and conformity assessment);
horizontal disciplines on regulatory cooperation; and
sectoral annexes reflecting what U.S. and EU counterpart regulators agree on.
But for months, the two sides have spoken past each other in terms of their emphasis on
these. The United States has focused on coherence to bring transparency, participation and
accountability to EU regulation, while the EU has stressed the need for concrete steps by regu-
lators in such sectors as autos, chemicals, and pharmaceuticals.
This apparent impasse is unnecessary. For its part, most U.S. sectoral regulators (putting aside
financial regulators and perhaps the Environmental Protection Agency) have been engaging
actively with their EU counterparts in the context of TTIP, while the Commission for its own
reasons is constantly considering ways to improve its regulatory processes, including in such
key areas as impact assessments and enhanced stakeholder participation. The two sides should
be able to move beyond it by the next round in September, when they are scheduled to provide
draft texts on the principles/practices and horizontal sections. TBT and SPS are being handled
separately, as are the sectoral discussions.
But here, as discussed below, the new trade commissioner will need a thorough understanding
of the structure as well as the content of these discussions, as this regulatory part of TTIP has
aroused the greatest concern among many Europeans, and members of the European Parlia-
ment, who do not want to see Europes standards reduced.
The investment issue is less a technical difficulty in the negotiations than it is a political issue
that has a technical fall-out. The public criticism about the use of investor-state dispute
settlement (ISDS) became so heated the Commission felt compelled to initiate a formal
public consultation on the I in TTIP, making it impossible to negotiate in this area at all.
That consultation has closed, with 149,500 comments received by mid-July. The Directorate
General for Trade (DG Trade) will need to spend months reading, analyzing and responding
to these before it can engage again fully in the TTIP investment discussions, a process it
expects to complete in November, just after the new trade commissioner takes office.
Calming Public Concerns
As the investment debate demonstrates most clearly, for the new trade commissioner to
succeed in promoting growth and jobs through TTIP by the 2015 deadline demanded by the
European Council (presumably this means it should be initialed and sent to them for authority
to sign), one of the main tasks will be to explain why the treaty is in the EUs interests and to
For months, the two
sides have spoken
past each other.
The German Marshall Fund of the United States 18
Many wonder whether,
in fact, the United
States and the EU
share the same values,
and if the United
States can be trusted.
answer the concerns many Europeans have about it, specifically about transparency, regulatory
standards and food safety, data protection, and ISDS.
The extent of these concerns perhaps should have been anticipated; it was not. Most Euro-
peans know the benefits of trade, and have not questioned the many trade agreements the EU
has concluded in the past. But TTIP is with the United States; that alone makes it different.
Even more significantly, just weeks after the talks were launched, the first revelations about
NSA activities in Europe came out, shocking many, especially in Germany. Additional infor-
mation has come out in the months since, making many wonder whether, in fact, the United
States and the EU share the same values, and if the United States can be trusted. In this atmo-
sphere, doubts about TTIP have a totally different political resonance, heightened further by
the May elections for the European Parliament.
Commissioner De Gucht and his team have undertaken unprecedented efforts to address
these concerns, speaking at literally hundreds of meetings, big and small, across the EU. His
successor will need to build on these efforts. But the Commission faces certain structural
difficulties that must be addressed. Chief among these is that the real audience is not in Brus-
sels, but in the member states. Yet the member state governments all of whom are on record
as supporting TTIP are not as engaged in the public debate about TTIP as they might be
because it is the Commission, not they, doing the negotiating. A key priority must be to enlist
their more active and public support, but to do this they will need to understand the content
of the agreement better. This may require the new Commissioner convincing the Americans to
be more forthcoming in the information DG Trade can provide to capitals.
In fairness, however, the Commission and the U.S. government have gone to exceptional
lengths to address the concerns about transparency, posting numerous documents on the
internet detailing exactly what they are looking for and answering almost any question that
has come up. Even the U.S. proposed text for one of the most sensitive parts of the nego-
tiations, on investment, is easily available on the U.S. Trade Representatives website. This
unprecedented amount of openness has to be distinguished from transparency about the
negotiating texts themselves. As Barroso has said, neither the Commission, European Council,
or the Parliament would be able to accomplish anything if all negotiations were conducted in
public as that leads to posturing, rather than the necessary compromises.
Most people understand this. But with the emotions whirling around TTIP, there may be
instances where both sides should consider going farther than they ever have. In the area of
regulatory cooperation, for instance, which is new and fundamentally a collaborative effort,
the two sides might consider publishing and seeking public comment on the language on the
principles and horizontal disciplines once they agree on it. By enhancing stakeholder engage-
ment, they would be practicing what they preach, and diminish public concerns on this key,
but sensitive, subject.
Regulatory cooperation in TTIP is not and cannot be about reducing protections for
consumers, workers, the environment, or our financial system. Rather it is about building
bridges between two different systems, which can only be done where the levels of protec-
Ideas for Europes New Leadership 19
tion are essentially the same. Obamas statement that he did not spend his entire career raising
consumer and environmental standards to sign an agreement that would reduce them under-
scores an important truth: the levels of regulatory protection in the United States and Europe
are similar in far more ways than they differ.
But more to the point: in both the United States and the EU, regulators are closely overseen
by the politicians. They have a mandate to protect their citizens, and when a problem arises,
they get into serious political trouble. They are not about to allow trade concerns as such make
them change their standards. Indeed, under U.S. law, any proposed change to a regulation
must be backed by hard data and evidence, and subject to extensive public scrutiny through
the notice and comment process or the regulator will be sued in administrative court. Regu-
lators may enter into arrangements with counterparts they know and trust that could facilitate
trade, but only where they see clearly that the standards are similar and that such arrange-
ments can make them more efficient, and thus more effective, in carrying out their missions.
The new trade commissioner has to understand this, and use both the process of the negotia-
tion and the structure of the agreement to underscore to the public and to members of the
European Parliament and member states parliaments the independence of the regulators
from the trade negotiations themselves. While the negotiating teams can develop horizontal
disciplines that encourage U.S. and EU regulators to seek more compatibility between their
approaches, and give them some tools to do this, the sectoral annexes should clearly reflect
that the regulators are in control of the substance of the arrangements in their sector. One
way to demonstrate this would be to have the annexes specify the relevant regulatory agencies
for each sector, and then insert hyperlinks to arrangements between them (which of course
would go through their relevant domestic approval process). This structure makes it easy to
reflect numerous agreements that already exist among dozens of U.S. and EU regulatory agen-
cies, easily incorporates arrangements agreed during the TTIP talks, and can be kept open to
include additional arrangements even after the TTIP negotiations are done, ensuring a living
agreement but one clearly subject to democratic control. Some trade negotiators might
question this loss of control over the talks; the new trade commissioner should embrace it.
This approach also helps answer other thorny questions about TTIP, including, for instance,
the hugely sensitive issue of protection of personal data and the U.S. governments refusal to
include financial services regulation in the agreement. The principles and practices related to
good regulatory process, including transparency, participation, accountability, and evidence-
based decision-making should obviously apply in these sectors as well. And so, too, should
horizontal regulatory cooperation tools that encourage the officials to consult with their
counterparts when considering legal measures that could affect trade in goods and services
between the United States and Europe. This ensures that the officials at the very least consider
the potential costs and benefits of taking an approach that is more compatible with that of
their transatlantic counterpart, even though they retain the right to do what they believe
necessary to meet their public goals. But it also guarantees that only those responsible for data
protection and for financial services are deciding on the levels and nature of cooperation.
So while these two sectors would be in TTIP, as the horizontal disciplines would apply to
Regulators are closely
overseen by the
politicians. They have
a mandate to protect
their citizens, and
when a problem arises,
they get into serious
political trouble.
The German Marshall Fund of the United States 20
The approach helps
clarify the mangled
issues of GMOs,
hormone beef, and
chlorinated chicken.
them and as there would be sectoral annexes for them, they would also be out of it in that
the substance of the arrangements hyperlinked in those annexes would be agreed between the
relevant regulators.
Similarly, the approach helps clarify the mangled issues of GMOs, hormone beef, and chlori-
nated chicken, as those issues remain essentially with the regulators. On the first, the EU has
adopted a robust scientific assessment process to evaluate the safety of plant varieties derived
using modern genetic breeding techniques, and indeed has authorized over 50 such varieties
to be sold in the EU (they are used primarily in animal feed and are subject to the EUs strict
traceability and labeling laws
4
). The United States is not seeking to change the law, although it
echoes the European Court of Justices September 2013 ruling that the evaluation process can
and should move more swiftly.
5
On beef, the EU has made it abundantly clear that it will not
lift its ban on the use of growth hormones anytime soon; it may expand the quota for non-
hormone beef, but accepts it will pay for this stance with less market access from the United
States elsewhere. And on chicken, it is interesting to see a growing number of European food
safety authorities suggest that the EU may need to consider using anti-microbial treatments on
poultry precisely to reduce the EUs high incidence of food poisoning caused by the bacteria
load on the meat.
6
But the point here is that these issues can be resolved, and are not as
contentious, when they are addressed by the food regulators themselves.
Finally, on the emotive issue of ISDS, the Commission will have spent much of the summer
reading and evaluating the substance of the comments they received during the consultation
procedure. Many of those comments undoubtedly reflect concerns that somehow an U.S.
investor could use ISDS to reduce EU standards, or cause regulatory chill, undermining
European democracy. To respond to these concerns, the new trade commissioner will need to
stress in appearances before the EP and in discussions with the public that in many ways the
opposite is true. The 1,300 investment agreements the EU member states have including
many with the United States, whether as Treaties of Friendship, Commerce and Navigation
(FCNs) or as Bilateral Investment Treaties (BITs) promote the rule of law by obliging both
signatories to treat investors and investments of the other party according to four fundamental
precepts of their own laws:
not to discriminate based on nationality;
to provide fair and equitable treatment and full protection and security;
to expropriate only for a public purpose, under due process and with prompt, adequate,
and effective compensation; and
to allow transfers of funds related to the investment.
4
See http://ec.europa.eu/food/food/biotechnology/gmfood/labelling_en.htm.
5
See ECJ Judgement T-164/10, Pioneer Hi-Breed International v. European Commission, of September 26, 2013, http://curia.
europa.eu/juris/document/document.jsf?doclang=EN&text=&pageIndex=1&part=1&mode=req&docid=142241&occ=first&dir=
&cid=905564.
6
See, for instance, the report of the German delegation to the Commission Working group on Revision of Poultry Meat Inspection,
February 25, 2013, available here; the memo itself is in German, but a number of the linked studies are also in English.
Ideas for Europes New Leadership 21
That is all.
And recognizing that investment is fundamentally different from trade because an investor
puts capital into another country, is subject to all the laws of the land, and can be individually
affected by a government measure, these treaties generally allow those investors to seek redress
from a neutral arbitral panel if and only if a host government measure violates one of
the four basic obligations noted above. This investor-state dispute settlement process, gener-
ally done under UN or World Bank rules, is needed because in many countries, the domestic
law that is the cause of the problem is superior to international obligations, and local courts
quite literally cannot enforce the treaty protections for the investor. Some argue that recourse
to an international tribunal is somehow unfair as it gives foreign investors a venue outside
domestic courts. But this is both necessary to preserve the treaty obligations as a matter of
international law and is a reciprocal right given by each party to the investors of the other. In
the end, the key is for governments to ensure that they do not discriminate, expropriate, or
otherwise violate the basic tenants of the treaty something that the United States and the
EU member states have already pledged not to do in numerous similar agreements.
Among other things, this ISDS process also has the distinct advantage of ensuring that not
every investment dispute becomes a diplomatic incident taken up by the home government
of the investor something governments generally seek to avoid. This is probably the main
reason the Obama administration, after an extensive three-year public consultation and review
of the U.S. model investment treaty, decided to keep ISDS in it. It did not want to be in the
position of espousing every companys claim against another government. That said, the U.S.
model treaty has added pages of clarifications of the obligations and refinements of the ISDS
procedures (transparency of proceedings, amicus brief filings by interested parties, and the
like) that do not exist in most European investment agreements, and it is possible the Euro-
pean Commissions consultation will result in incorporating some of these (and perhaps other)
ideas into TTIP in a way that addresses some of the concerns that have been expressed.
For it would be odd indeed, and send all the wrong signals to the world, if the United States
and the EU the worlds two largest sources of and hosts to foreign direct investment
could not agree between themselves what the member states have agreed bilaterally with the
United States and with hundreds of other countries around the world.
Keeping Sight of the Prize
The new trade commissioner will have a much bigger agenda than just the U.S.-EU trade
agreement: negotiating trade deals with Japan and Vietnam, investment agreements with
China and Myanmar, and ensuring Russia and others observe their WTO commitments. But
TTIP will be the biggest reward and the biggest, most political, challenge. Some critics
will never be convinced that the agreement is good, but businesses, workers and unions, and
consumers who stand to gain can be if the agreement is clearly explained. Especially in the
early days, the new commissioner will certainly need to handle the criticism, but must also try
to keep all eyes focused on the prize. The economy, the broader transatlantic relationship, and
all European and U.S. citizens will need that statesmanship.
The key is for
governments to
ensure that they do
not discriminate,
expropriate, or
otherwise violate the
basic tenants of the
treaty something
that the United States
and the EU member
states have already
pledged not to do in
numerous similar
agreements.
The German Marshall Fund of the United States 22
Peter Chase is a non-resident GMF fellow, a former U.S. diplomat, and currently vice president,
Europe, at the U.S. Chamber of Commerce. The views expressed in this article are entirely his
own and may not reflect those of either the GMF or the U.S. Chamber.
Ideas for Europes New Leadership 23
4
Common Security and Defense Policy:
Charting Next Steps
Alexandra de Hoop Scheffer and Martin Michelot
Introduction
A
few recent significant geopolitical trends have contributed to moving the cursor of
geostrategic focus on Europe and its near abroad: most notably, a relative U.S. stra-
tegic disengagement from certain world affairs especially in Europe coupled
with a stronger role played by European actors in Africa, but also Russian assertiveness in its
historical zones of influence. This directly conflicts with European influence in regions where
the Eastern Partnership agenda has been carried out, a trend that in itself remains rife with
uncertainty about the stability of the European direct neighborhood.
Combined, these trends have put a higher premium on European security capabilities and the
necessary political willingness that is attached to their use. What security risks will Europe
face in the future? And to what extent must the EU be able to operate independently of the
United States if necessary in crisis situations? For the time being, the EU is not capable of
undertaking large-scale military operations without a U.S. contribution.
Going into 2014 and beyond, the role that Europe plays in responding to the worlds most
pressing challenges will only be reinforced. The crisis in Ukraine and the strong desire for
a European reaction, and subsequent disappointment at the lack of a decisive action has
shown this. Europe has multiple tools at its disposal, and should be able to identify mecha-
nisms by which they can respond to future crises. It should also think in detail how it can
further develop instruments of power, whether on the hard or soft power side.
Background
The European Common Security and Defense Policy has always held a special place in the Brussels
institutions. Perceived as toothless and limited to small-scale policing operations, this mechanism,
designed to unite Europe around a strong foreign policy, had a lot of trouble finding its marks since
its inception. However, the 2007 Lisbon Treaty, giving way to the creation of a position of high
representative, put a more concrete face on the development of European foreign policy, and at the
same time created a whole new set of expectations toward Europes new role on the global stage,
given its economic prowess and the collective capabilities of its member states.
The choice of Baroness Catherine Ashton for the first position of high representative consolidated
the status of European foreign policy as being an area of policy in its own right; many observers
questioned Ashtons credentials and saw her nomination as a symbol of Brussels lack of ambi-
tions. However, Ashton took it upon herself to carve out a true foreign and security defense policy
agenda for the EU, although not without difficulties and strong exchange of views with member
states not accustomed to Brussels role in foreign policy. Over the course of the seven years that
spanned her mandate, Ashton was able to strongly position Brussels on certain issues of vital
importance to the transatlantic relationship, such as the negotiations with Iran over nuclear
weapons (and the accompanying sanctions) or the energy security of its member states, the impor-
tance of which has been reinforced in the context of the crisis in Ukraine.
While recent years certainly do not certainly make Brussels an actor equivalent to Berlin, London,
or Paris in terms of influence on the international scene, they represent visible progress in terms of
visibility of Europe, as they have allowed Brussels to carve out a place for itself that is complemen-
tary to the policies carried out by its member states.
The German Marshall Fund of the United States 24
The EU needs to learn
the lessons from
these operations
and take a hard
look at the decision-
making process,
and to facilitate
the communication
between member
states such as France
and the relevant
stakeholders in
Brussels.
European Strategic Disunity: What Lessons can be Learned from Recent Operations?
The European Union, under the framework of the Common Security and Defense Policy
(CSDP), has undertaken small and medium scale military operations in various areas of the
world, with varied degrees of success and visibility. The missions fall under a broad category
of policing ensuring the safety of a specific geographic area or civilian and military
training, undertaken by either military or civilian personnel, of local personnel. At the
moment, the EU is carrying out 16 missions spread out between Europe, the Middle East,
Asia, and Africa. Looking at the lessons learned from these missions is very useful in under-
standing the progress that has been made and what still needs to be made.
The operation in Libya in 2012 revealed crucial shortfalls in European military capabilities,
persistent overreliance on U.S. military assets, and increasing divisions among EUs major
powers. Divisions between France and the United Kingdom on one hand and Germany on the
other meant that the EU remained largely sidelined in the first stages of the conflict. EUFOR
Libya the EUs mooted military-humanitarian mission was never launched because it
was made dependent on a request from the UN Office for the Co-ordination of Humanitarian
Affairs (OCHA) that never came. And because EU capitals could not reach agreement on a
full-scale CSDP operation, EUFOR Libya was limited to supporting humanitarian assistance.
This was a mistake. As a CSDP operation, it should have both military and civilian compo-
nents (namely police for supporting security sector reform and disarmament, demobilization,
and re-integration operations). Once again, NATO served as an excuse for EU inaction in the
security field. The EU missed a key opportunity to act in a coordinated manner within the
CSDP framework and to develop new mechanisms for cooperation with NATO.
In Mali, France made the deliberate choice of intervening unilaterally in 2013 and was then
faced with difficulties in rallying the operational support of its European partners. The Euro-
pean Union Training Mission (EUTM) in Mali, which was set up to provide training to the
new Malian army, was plagued from the beginning with a very slow decision-making process
that pushed back its eventual deployment, more than a year after the French operation began.
The missions delayed deployment, given the challenges in the country, represented a low point
of the EUs ability to act.
This trend was continued in the Central African Republic in 2014. The coalition supporting
Frances operation was even slimmer, since the EU had been very slow at approving even
the symbolic deployment of a very limited military assistance mission. Considering its very
limited format, it is unlikely that the mission will make a major difference on the ground.
The EU needs to learn the lessons from these operations and take a hard look at the decision-
making process, and to facilitate the communication between member states such as France
and the relevant stakeholders in Brussels. It seems that Europe was almost taken by surprise
when France intervened in these countries, so the EU was not able to react quickly and
adequately to support French efforts.
Ideas for Europes New Leadership 25
Despite these setbacks, the EU still maintains strong ambitions and enough of a history (with
the 16 missions it carried out) to asses how the situations should have been handled differ-
ently.
There have been also some successes, which are not often highlighted in the press, that have
allowed member states to save a significant amount of money, such as the European Air Trans-
port Command(EATC). The EATC, created in 2003 and operational since 2010, is a regional
grouping of Netherlands, Belgium, Luxembourg, France, and Germany, to share the use of
150 air transport and air-to-air refueling planes without conditions. It played an important
role in Libya and Mali where military operations would have been much more complicated to
conduct without its efficient framework.
The lessons learned after the Libya crisis resulted in new joint capability programs being
developed within the European Defense Agency (EDA), an agency which that coordinates
cooperative projects and programs. For example, new projects have been launched including
smart munitions, intelligence/surveillance/reconnaissance (ISR) capabilities offered by
radars or drones and air to air refueling capabilities. These domains are vital to Europes
strategic autonomy, as they will allow European armies to carry out operations that they could
not previously have carried out without the support of the United States, as was the case in
Libya. These are developments that should be followed closely, as they symbolize the impor-
tance of the role that the EDA can play in helping member states and the defense industry
coordinate more efficiently. For the EDA, which has been underused since its creation in
2004, being able to carry such central projects will be of crucial importance to its continued
relevance.
Finally, the EUs action in the Horn of Africa is a perfect example of a successfully imple-
mented EU global approach through three simultaneous missions: EUTM Somalia, providing
crucial training to the Somali military; EUCAP Nestor, reinforcing the maritime capacities
of five countries; and EUNAVFOR, the first EU military maritime mission to deter pirates
and protect ships from acts of piracy. These combined operations have demonstrated the
EUs capacity to deploy and combine civilian, training, and military capabilities around a
crisis zone, and also show that the EU is particularly successful at conducting limited, highly
specialized missions. The question that the EU needs to ask itself is where its ambitions lie.
Should ambitions grow in order to encompass broader operations within a broader geograph-
ical scope (including Asia, for example), or will it only carry out only missions that are limited
in their scope, in a well-defined geographical area?
Developing Multilateral and Bilateral Defense Cooperation Formats
Beyond the missions, it is important to also point out the EUs adaptability since it is a struc-
ture that allows member states to discuss common issues and cooperate more closely. For
example, in theory, there are European battlegroups, which are composed of brigades volun-
tarily dispatched by member states to train together, and who stand ready to operate in any
theater they are sent to. Each semester, a group of countries volunteers a certain amount of
their capabilities to the battlegroup. These groups do not fight under a European flag, and
Should ambitions grow
in order to encompass
broader operations
within a broader
geographical scope,
or will it only carry out
only missions that are
limited in their scope,
in a well-defined
geographical area?
The German Marshall Fund of the United States 26
It should be the role
of the EEAS to act
as a coordinator of
best practices, in
order to gain a clear
understanding of what
these groupings can
bring to the overall
EU power projection
capabilities.
their use remains conditioned on the approval of their home government. In the future, the
opportunity to use the European battlegroups in operations where their competences and their
skills would be of added value should not be closed. In the past, an active European battle-
group has never been deployed, due to the refusal of the states whose armies were part of the
battlegroup, even if they could have contributed immensely to the national missions such as
Mali or the Central African Republic.
Other member state collaborations have been more successful. The French-German joint
brigade deploys 250 troops as part of the EUTM Mali operation, and represents the first
instance of such joint troops being deployed in operation.
Most of the multilateral or bilateral defense cooperation formats are ad hoc and organized
outside of EU framework: the French-German brigade, the European Corps, the French-
British cooperation on maritime security and ISR capabilities, the Weimar Triangle
1
and
Weimar Plus,
2
NORDEFCO
3
or the Visegrad 4
4
group. However, no mechanism or structure
exists where the work and progress of these groups can be evaluated. It should be the role of
the EEAS to act as a coordinator of best practices, in order to gain a clear understanding of
what these groupings can bring to the overall EU power projection capabilities.
Being a domain where claims of sovereignty remain the most strident, member states have
maintained separate approaches to defense policy and the way they conduct their policy in
the institutions. Some of the big EU member states (France, Germany, and the U.K.) have
committed limited efforts in working with their peers and the EU institutions in developing a
joint approach on security and defense. This remains a major challenge for the incoming high
representative to overcome.
Policy Recommendations
1. Thinking about a New European Security Strategy and Reinforcing Mutual Strategic Planning
It is high time for the Europeans to get together and provide a clear assessment of their own
threat perceptions, and what EU instruments can be used to respond to these threats. The last
such document was authored in 2003 and therefore predates enlargement; its subsequent 2008
update does not correspond to the current challenges that have been posed by crucial geopo-
litical elements such as the rise of China, declining transatlantic defense budgets, the conse-
quences of the Arab Spring, or recent Russian assertiveness in the neighborhood.
Such an exercise not only forces the Europeans to sit down and think strategically about short-
and long-term threats and challenges, it also works toward creating efficient response mecha-
nisms in order to tackle these challenges. These mechanisms cover many different angles
political will, use of force, industrial cooperation on capabilities which to a certain extent
also mean a stronger role for the European Commission and the European Parliament in these
1
France, Germany, and Poland.
2
The Weimar Triangle countries, plus Italy and Spain.
3
Denmark, Finland, Iceland, Norway, and Sweden.
4
The Czech Republic, Hungary, Poland, and Slovakia.
Ideas for Europes New Leadership 27
affairs, in fulfilling the text of the Lisbon Treaty. This will also put a premium on stronger
collaboration and coordination between the next high representative and the other commis-
sioners whose domains overlap with defense, most especially trade and industry, who hold
the keys to the vast resources that Europe can bring together. Overall, much like the Commis-
sion plays a role of coordination and enforcement for certain policies, the role and power of
the EEAS should be expanded in close coordination with the role of the EDA for industrial
matters.
The most important challenge facing this new security strategy will concern translating
national security objectives into broader European ones. The present situation, in which Euro-
pean armed forces undertake operations jointly but individual countries decide on the levels of
commitment of their own armed forces without international consultation, must be ended as
quickly as possible.
On the same level, member states should be encouraged to more closely coordinate on their
own strategic planning, which the frequent EU meetings in Brussels should encourage.
Countries with the same objectives, who perceive threats and challenges the same way, or
who have the same ambition for Europe, should be encouraged to work together in providing
answers to these challenges. In this context, regional security cooperation mechanisms have
been able to achieve concrete results that are a testimony to the success of these formats, and
should continue to find support at the EU and NATO levels. The Franco-British partner-
ship, NORDEFCO, Visegrad 4, and the cooperation in Belgium with the Netherlands and
Luxembourg show that on a regional scale, rationalization efforts can occur and better defense
spending habits can be fostered for like-minded countries. These processes contribute to the
building up of European defense capabilities, and also create the conditions for political will
to develop over large periods of time. Capable, well-trained, and equipped armies also mean
that they can be used to achieve their objectives safer and quicker. These clusters should not be
perceived as their members waning condence in NATO and the EU as security institutions
in all circumstances. Indeed, deepening cooperation at operational and strategic level (opera-
tional headquarters and command structure) is possible only in the context of NATO and the
EU.
2. Coordination with NATO
Security and defense policy have a long-standing image of being the ugly duckling of the
European project due to the security umbrella that NATO and the United States have provided
since the creation of the European Union. Despite the will of a few political leaders to push
European defense integration forward and to reinforce the image of Europe as a capable and
credible foreign policy and defense actor, the shadow of NATO has always loomed large. This
was especially true after the concurrent enlargement processes of 2004, which pushed both
organizations boundaries East into countries where NATO remains the foremost and the ulti-
mate guarantor of security. While it may seem easy to say that enlargement has added compli-
cations to the way Europeans think about defense and security policy, it does nonetheless
remain that the process did not in itself favor the development of a united European policy on
The present situation,
in which European
armed forces
undertake operations
jointly but individual
countries decide
on the levels of
commitment of their
own armed forces
without international
consultation, must be
ended as quickly as
possible.
The German Marshall Fund of the United States 28
One of the levers
of European
competitiveness
should lie in the
renewed efficiency of
its defense industry.
these issues. Europe-wide initiatives on defense policy have since tended to be limited in their
scope, and political will to push even smaller-scale initiatives forward has been weak.
The next high representative and vice president of the European Commission will have
to work much more closely with the future NATO secretary general on all the issues that
unite NATO and the EU. In the previous years, very little has been done to hold concrete
and efficient discussions between the North Atlantic Council and the Political and Security
Committee ambassadors, or between other decision-makers in both institutions. Both institu-
tions will have to work to identify synergies and foster closer coordination at all levels.
These synergies should be created at the political level as well as the military level. Given that
the EU and NATO share a certain number of capabilities and working frameworks thanks to
the Berlin Plus agreements, a regular dialogue could be started with various military personnel
on issues such as strategic planning and future procurement plans, the sharing of certain ISR
data, and perhaps also the issues of partnerships, interoperability, and enlargement. Such
cooperation could eventually lead to conducting joint certification exercises for certain Article
5 cases in order to strengthen readiness.
3. Supporting the European Defense Industry, Getting More Bang for the Euro
One of the levers of European competitiveness should lie in the renewed efficiency of its
defense industry. It is a well-known fact that a euro spent in the European defense industry
gets the buyer fewer capabilities than a dollar spent in the U.S. defense industry. European
partners and the European Commission have engaged in substantial discussions over the
year of 2013 on issues related to competitiveness and support for the defense industry, which
have led to the European Council Summit in December 2013 putting a strong emphasis on
industrial issues. The shortfalls that have been observed in Libya and the other African opera-
tions have provided the Europeans with a concrete view of what projects should be carried
out in the future, most notably on strategic airlifting, air-to-air refueling, and ISR capabilities.
The European Commission can play a central role in creating the right incentives for Euro-
pean industries to compete in these hugely important markets by making it easier and more
rewarding to focus their research and development efforts on these key capabilities, leading to
facilitated access to the technology for buyers at competitive prices. These are the capabilities
that will bring Europe a step closer to strategic autonomy and to assuming its responsibilities
in its neighborhoods, at lower costs.
The issue also plays into the competitiveness of the European defense industry on the global
market, an element that should not be underestimated as it represents an integral part of the
European economy. The European defense industry is extremely capable and skilled, and
should play a role in future procurement plans around the world. The Commission should
work closely with defense industry representatives to see how synergies can be achieved on
these issues.
Finally, it is also clear that serious consideration should be given to how the EU frameworks
allow for the proper identification of potential cases of duplication. While the EDA seems to
Ideas for Europes New Leadership 29
be the natural go-to for issues of industrial cooperation, other initiatives such as OCCAR,
5

or certain sub-regional groupings, also have concrete initiatives in place. These various levels
of cooperation should, to the extent possible, be decoupled and centralized, in order to foster
maximum efficiency. It would be extremely important for the EU to conduct a widespread
mapping of all the existing initiatives and see what role Brussels could have in guiding them.
Geopolitical events in Ukraine and the Middle East have put a premium more than ever
on European leadership and its complementarity with the various instruments of U.S. power.
The new high representative at the helm of Europes foreign policy should be able to reinforce
Europes increasing role in global security affairs, and bring make European foreign policy in a
resolutely decisive mode.
Alexandra de Hoop Scheffer is a senior transatlantic fellow and the director of the Paris office
of the German Marshall Fund of the United States (GMF). Martin Michelot is a Non-Resident
Fellow with GMF. The authors would like to thank Charly Kmyta for his research assistance.
5
In French, Organisation Conjointe de coopration en matire darmement Organization for Joint Armament Cooperation.
The German Marshall Fund of the United States 30
5
A New Neighborhood Strategy for Europe
Michael Leigh
Introduction
A
new strategy toward countries in the EUs vicinity thorough overhaul of the Euro-
pean Neighbourhood Policy should be the top priority of the EUs new foreign policy
chief, Federica Mogherini, who was nominated in late August, and the Commissioner
for European Neighborhood Policy and Enlargement Negotiations. If the EU can expect to
Background
The European Neighbourhood Policy (ENP) was introduced a decade ago, as the European Union
(EU) was about to take in ten new member states. The ENPs goal was to create a ring of well-
governed states to the east and the south of the enlarged EU. The policy covers Ukraine, Moldova,
Belarus, Georgia, Armenia, and Azerbaijan countries that since 2008 have been included in the
EUs Eastern Partnership as well as all the countries on the southern and eastern shores of the
Mediterranean, and the Palestinian Authority. Ten years after its launch, the European Neighbour-
hood Policy (ENP) is facing fundamental challenges.
Russias objection to the conclusion of an ambitious EU association agreement with Ukraine, nego-
tiated under the ENP banner, was the proximate cause for the outbreak of violent civil strife and
international conflict over the countrys future. The failure of the Vilnius summit in November 2013,
Russias annexation of Crimea, and the destabilization of Ukraine and of the region, put paid to the
notion that the ENP could provide the EU with a stable hinterland in Eastern Europe.
Frozen conflicts involving Georgia, Armenia, Azerbaijan, and Moldova, which flare up at times
and carry the constant risk of escalation, have proved intractable and there is a risk that Ukraine
may witness another such situation. There is a feeling of anxiety in Estonia and Latvia, with their
large Russian speaking minorities, and in Poland, concerned by the risk that Ukraine, its imme-
diate neighbor, might again fall under Russian domination. The persistence of authoritarian rule in
several former Soviet states covered by the ENP shows that it has not generated a consensus there
in favor of European values.
Russia remains the major point of reference for the countries of the Southern Caucasus that would
become neighbors of the EU only in the increasingly unlikely event of Turkish accession. Armenia
has been pressured by Russia into joining the Eurasian customs union, President Vladimir Putins
framework for ingathering former Soviet states. The very existence of Lebanon, Jordan, and Syria
in their present forms depends largely on what happens in Iraq which, in turn, is influenced by
Iran and the Gulf. Neighborhood is too confining a concept for calibrating policies to advance EU
values and interests in such diverse and interdependent regions.
The repercussions of the uprisings in North Africa and the Middle East, violent sectarian conflict in
Syria with its fallout in Jordan and Lebanon, as well as a new outbreak of hostilities between Israel
and Hamas indicate that the ENP has been no more successful to the south. The winner-take-all
approach that prevails after elections in many of these countries has intensified underlying political,
economic, social, and religious tensions. It has become a barrier to transition toward a more inclu-
sive form of liberal democracy. Regions covered by the ENP now pose security risks to the EU itself,
not least in the form of European jihadists eager to stage terrorist acts in their countries of origin.
Developments in Eastern Europe, North Africa, and the Levant are so strongly influenced by contig-
uous countries not covered by the ENP, including Russia, Iraq, and Iran as well as Mali, Niger, Chad,
and Sudan, that the very geographic logic of the policy is itself in question. When designing future
initiatives, the EU should take a more integrated approach, reflecting inter-dependencies between
adjoining regions.
Ideas for Europes New Leadership 31
have an influence on world politics it is first and foremost in its own neighborhood. Europe
faces security threats from violence and war in Ukraine and the Middle East, state failure and
dysfunctional democracy in North Africa, returning European jihadists intent on terrorist acts
in their countries of origin, and severe energy shortages if Russia cuts off supplies this coming
winter.
Russias actions in Ukraine, which amount to acts of war, openly flaunt the principles on which
the post-Cold War order in Europe is based, posing a challenge both to the European Union
and the United States. A winner-take-all approach undermines the prospect of establishing
functioning liberal democracies around the EUs periphery.
The EUs prolonged economic crisis and preoccupation with its own future has dimmed its
appeal as a model to many in neighbouring countries. They are increasingly subject to other
influences including intolerant forms of religion and archaic appeals to nationalism. Strength-
ening peace and security in Eastern Europe and the Mediterranean Basin is an interest the EU
shares with the United States. The new high representative of the Union for foreign affairs and
security policy and vice president of the European Commission should give a lead in defining
a new approach to the EUs neighbourhood, in liaison with Johannes Hahn, the nominated
commissioner for European neighbourhood policy and enlargement negotiations, the member
states and interested third countries, in particular the United States.
A Strategic Approach
The ENP does not have a well thought out strategic dimension. Its long-term goals remain
unclear beyond a general yearning for a peaceful and well-governed hinterland. Its basic
design, modelled on the enlargement process but without the perspective of EU member-
ship, is unconvincing. It does not provide the incentives needed to give the EU effective
political leverage in the countries concerned. The ENP is ill-equipped to address transnational
phenomena, including terrorist groups, organized crime, and international migration flows,
which are among the main sources of tension and human suffering around the Mediterranean
Sea. The EUs prolonged economic crisis and preoccupation with its own future has dimmed
its appeal as a model to many in neighboring countries.
In the absence of an offer of membership, the EU lacks the political standing to impose on
third countries respect for the rule of law, democracy, and the protection of human rights or
the territorial integrity of states and the inviolability of borders. These are among the core
principles upon which the EU and, indeed, the liberal international order are based but they
are not the top priority in most neighboring countries. The putative beneficiaries of the ENP
are increasingly subject to other non-Western models and ideologies, including authoritari-
anism, intolerant forms of religion, and archaic forms of nationalism. Some, like Libya, face
the risk of state failure.
The financial resources at the disposal of the ENP pale by comparison with those mobilized
by the Gulf States, for example to prop up Egypt. This renders ineffective EU efforts to reward
supposed political reforms by marginal increments of EU assistance. In any event, member
states themselves generally ignore ENP political conditionality in their bilateral dealings with
A winner-take-all
approach undermines
the prospect
of establishing
functioning liberal
democracies around
the EUs periphery.
The German Marshall Fund of the United States 32
The success or failure
of the EUs efforts to
create a foreign and
security policy as
such will largely be
determined in the EUs
own neighborhood.
the countries concerned and are influenced rather by traditional links as well as commercial
and energy interests. Under these circumstances, EU institutions, especially the commission,
lack credibility when seeking to impose political conditionality.
The ENP label coexists with a plethora of policy frameworks with similar goals including
Black Sea Synergy, Eastern Partnership, the Barcelona Process, the Euro-Mediterranean
Partnership, and the Union for the Mediterranean. The earlier term Wider Europe is still
current. All this creates confusion and obscures political messages.
The ENP has been adjusted several times to take into account the difficulties that have arisen
and the changed circumstances. These adjustments include different modules for countries
to the east (the Eastern Partnership promoted by Poland and Sweden) and for Mediter-
ranean countries. But such variants have failed to convince; indeed, the Eastern Partnership
contributed to a dramatic escalation of regional tensions in the case of Ukraine. In light of the
fast deteriorating situation in the EUs neighborhood, a fundamental rethink of the overall
approach is urgently needed.
The success or failure of the EUs efforts to create a foreign and security policy as such will
largely be determined in the EUs own neighborhood for this is the part of the world where
the EU could most expect to exercise an influence. Under these circumstances, another minor
adjustment will not be enough to enable the EU to make a real contribution to security,
stability, and economic development in neighboring regions.
To be sure, worrying developments in the EUs neighborhood cannot principally be ascribed
to the inadequacies of a policy framework devised in Brussels. Such developments are the
product of internal dynamics within the societies themselves precipitated, at times, by external
intervention. The EU is not the only external actor that could help bring order to troubled
regions. Coordination with other multilateral and bilateral actors, notably the United States,
is essential. Still, the EU can make a significant contribution to international efforts to bring
better political and economic prospects to Eastern Europe, North Africa, and the Levant,
provided it identifies practical and attainable objectives as well as effective policy instruments.
Recommendations
A thorough strategic evaluation of EU interests in each of the countries and regions concerned
should precede any further adjustments to the ENP. This analysis should be wide-ranging
and realistic, taking fully into account spillover from adjoining regions. Member states need
to be open to a disaggregation of the policys geographic scope and to a more fundamental
reshaping of the EUs external policies.
The review should question the assumption that shared values are the point of departure
of the ENP, rather than an aspiration. The analysis should acknowledge the growing preva-
lence of values and practices in a number of these countries that are very different from those
prevailing in the EU itself. However the prudent promotion of Western values, in societies that
are receptive to them, should remain a feature of the policy.
Ideas for Europes New Leadership 33
A differentiated country-by-country approach is required. It should combine the EUs secu-
rity, energy, and commercial interests with support for better governance, the rule of law, and
democracy in societies that themselves have opted for these. Member states must summon
the political will to support those in neighboring countries who seem genuinely committed
to Western values, while maintaining a greater political distance from corrupt, authoritarian,
or dysfunctional regimes. Nonetheless, the EU will often need to engage with regimes that are
not to its liking, in line with the practice of member states.
This policy review should be led by the EUs new high representative for foreign affairs and
security policy working closely with the European Commission and the member states. The
high representative should consult with the United States, Turkey, Israel, the Gulf countries,
and other interested states in preparing this analysis.
The following recommendations could provide the basis for a more effective new approach:
1. Given the urgency of the situation, a thorough pragmatic, policy-oriented revision of the
ENP should be the top priority of the high representative and the new commissioner for
European neighbourhood and enlargement negotiations.
2. Within 100 days of taking office, the high representative should present an assessment of
the ENPs effectiveness and recommendations for modifying or replacing it.
3. The geographical scope of the ENP, its goals, methodology, and branding should be
included in the analysis. The option of dissolving the ENP and replacing it with dedicated
policies addressed to individual countries or groups of countries should be considered.
4. The goal of EU policies toward its neighbors should be to reinforce the security, stability,
and prosperity of the EU and its neighbors through carefully calibrated engagement with
each country.
5. The EU should promote good governance in countries open to advice and support from
the EU. It should further develop existing institution building and training programs as
well as efforts to improve the investment climate in countries with a genuine political will
to move forward in these areas.
6. The EU should work with partners to strengthen the effectiveness and independence of
the judiciary and the transparency of public procurement and should share its experience
in the fight against corruption.
7. The EU should be ready to respond to requests from governments and civil society repre-
sentatives to provide support for institutional-building and other reforms designed to
strengthen the rule of law, democracy and the protection of human rights. Commitments
in these areas should not, however, be conditions for working together in mutually advan-
tageous areas such as security, trade, energy, environmental protection, and migration.
8. Effective capacities for conflict prevention, conflict management, and conflict resolution
should be developed by the EU, in close liaison with relevant agencies in the member
states.
Member states must
summon the political
will to support those in
neighboring countries
who seem genuinely
committed to Western
values.
The German Marshall Fund of the United States 34
9. The EU and partner countries should work together to limit illegal cross-border flows
of people; at the same time the EU should promote mobility for business people, profes-
sionals, university faculty and students, skilled workers, and other bona fide travelers.
10. The EU should propose a range of strategic partnerships, trade and cooperation agree-
ments, or association agreements adapted to the needs and capacities of each partner
country.
11. The EU should be ready to conclude Deep and Comprehensive Free Trade Agreements
(DCFTAs) with countries that demonstrate the will and the capacity to implement them.
Such agreements should not be proposed to countries whose level of development and
administrative capacity present obstacles to their implementation. At present, DCFTAs
are not appropriate frameworks for relations with most Mediterranean countries, beyond
Israel, Morocco, and Tunisia.
12. The EU should provide carefully targeted financial assistance to partner countries to help
them achieve mutually agreed objectives. This assistance should be coordinated with the
member states, the European Investment Bank, the European Bank for Reconstruction
and Development, other international financial institutions, and bilateral donors. The EU
should encourage these institutions to expand their lending programs for viable invest-
ment in projects of common interest.
13. Partner countries should be invited to cooperate with the EU in the framework of relevant
international conventions, including those covering environmental protection and indi-
vidual rights.
14. The EU should support regional cooperation among partner countries if they request it to
do so. Regional cooperation should be based on mutual interests in concrete fields such
as environmental protection and the security and stability of energy installations. The EU
should not seek to promote regional cooperation, as a matter of course, among countries
that have not expressed a desire to engage in it and that do not perceive a national interest
in doing so.
15. The EU should set up dedicated dialogues respectively with the United States, Turkey,
Israel, and the Gulf States to share assessments and coordinate initiatives toward the coun-
tries concerned. On the EU side, these dialogues should be led by the high representative
with the participation of the relevant commissioner and member state representatives.
16. The responsible commissioner should work together with the high representative to
mobilize initiatives in areas such as trade, competition policy, development assistance,
humanitarian aid, human rights, energy, transport, environment policy, and migration to
enable the EU to achieve its foreign and security policy objectives.
17. A successful strategy toward adjoining countries requires the EU and Russia to develop a
sound framework for bilateral relations, including a dialogue on their common neighbor-
hood. When circumstances permit, EU leaders should signal their willingness to over-
come tensions and to engage with Russia. The unsuccessful pursuit of common spaces
Ideas for Europes New Leadership 35
that has dominated EU-Russia interactions for much of the past decade should be set
aside in favor a more operational framework in which common interests, including trade,
energy, and relations with neighboring countries can be handled effectively. The EU needs
both to uphold the principles that have generally ensured peace and stability in post-cold
war Europe and to be pragmatic in taking Russian perceptions of its own interests, and
of the shifting balance of power in Europe, into account. In the long-run, the question of
working toward a common economic space throughout Europe should be considered.
Sir Michael Leigh is a senior advisor for the German Marshall Fund of the United States. A
version of this chapter first appeared as part of GMFs Europe Program Publications series, A
New Strategy for Europes Neighborhood, September 2014, http://www.gmfus.org/archives/a-
new-strategy-for-europes-neighborhood/.
The German Marshall Fund of the United States 36
6
Rethinking Mediterranean Strategy
Ian O. Lesser
What is the Issue? What is at Stake?
E
uropean Union and transatlantic strategies toward the Mediterranean face consider-
able challenges, just as Europes southern neighborhood is becoming more central to
European security as a whole. In contrast with other areas of geopolitical importance
to Europe, the EU is set to remain the leading strategic actor in the Mediterranean. Europe
is the key economic partner for countries across the Middle East and North Africa, and EU
trade and assistance policies should be a critical element in the developmental outlook for the
region as a whole. In political and security terms, the stakes for the EU (and NATO) are high,
especially for southern European members. The incoming EU leadership, and in particular
the high representative for foreign policy and security policy/vice president, together with the
commissioners whose portfolios have external relations dimensions, have their work cut out
for them.
But 20 years after the launch, and 10 years after the relaunch of the Barcelona Process, EU
strategy toward the Mediterranean is increasingly dysfunctional in the face of looming
demographic and security challenges, and unfinished revolutions from the Maghreb to the
Levant. The unresolved Israeli-Palestinian conflict, and chaotic or dysfunctional conditions in
many Southern Mediterranean states, remain standing obstacles to any multilateral initiatives.
Existing frameworks for Mediterranean partnership are ill suited to the new environment. In
particular, the policy of more for more is hollow as chaotic conditions in the south make
it difficult, if not impossible, for most governments to measure up. Above all, disparate and
distinct regional challenges argue for de-coupling the southern and eastern dimensions of EU
Neighborhood Policy.
1
In this context, Turkey is a special case. Structurally, EU policy toward Turkey is cast in terms
of accession negotiations and an open-ended prospect of full membership. This remains an
1
See the companion analysis by Michael Leigh exploring open questions for the EU Neighborhood Policy.
Background
In 1995, the EU launched its Euro-Mediterranean Partnership (the Barcelona Process). The
process aimed at promoting development and stability across the southern Mediterranean,
pursued along economic and political-security tracks. The initiative was relaunched in 2005 as
Barcelona II. From the start, the Euro-Mediterranean Partnership has faced multiple challenges. On
the economic front, there has been a marked lack of bankable projects, even when substantial
funding was available. On the political and security track, a stalled Middle East peace process has
obstructed multilateral dialogue. Fragmented politics in the Maghreb have also impeded effec-
tive dialogue. In 2008, a related initiative, the Union for the Mediterranean, was launched under
French leadership. From its highly ambitious beginnings, it evolved in more practical directions and
aimed at overcoming the shortcomings of earlier efforts by focusing on a defined set of pragmatic,
project-driven activities. It, too, was rapidly politicized, and became dysfunctional. The Union for the
Mediterranean lives on as a potentially useful facilitator of project finance. Formally, the current
EU Mediterranean strategy is captured in the southern dimension of the European Neighborhood
Policy. In practice, EU engagement on Europes southern periphery is driven by a series of bilateral
policies toward disparate partners across the Mediterranean.
Ideas for Europes New Leadership 37
important long-term goal, however elusive. But an effective EU strategy toward the Mediterra-
nean is virtually inconceivable without engaging Ankara as a partner, especially in the Eastern
Mediterranean. The need for closer cooperation on this front is immediate, and cannot await
the opening of new chapters or other advances in the accession talks. Political conditions
in Turkey and within key EU member states offer little prospect for an exit from the
current impasse in relations with Brussels. In the meantime, a new framework is needed to
secure Turkish cooperation on a range of issues, from energy security to crisis management in
Syria, Iraq, and the Levant. Turkey is also likely to be a significant actor in a more competitive
and confrontational relationship with Russia.
Looking ahead, strategy toward the Mediterranean and Turkey will also be an essential area
for transatlantic cooperation. In both cases, European and U.S. interests are essentially compli-
mentary, and both partners have important assets they can bring to bear. Moreover, unlike
more distant challenges in the Gulf or the Asia-Pacific region, North Africa and the Levant are
well within reach of European economic, political, and military power. The Mediterranean is
an area where Washington welcomes European leadership, and the region will be a principal
testing ground for EU-NATO cooperation if this can be achieved. Indeed, this is likely to be
among the most difficult but important challenges and a key near term task for the new
NATO secretary general and the new EU high representative.
Eastern Challenge, Southern Exposure
Notwithstanding the mounting crisis in Ukraine and with relations with Moscow, Europe has
a structural interest in developments along the southern periphery of the continent. Neither
challenge can be ignored. With the exception of Turkey, none of the EUs Mediterranean
partners, or others around the region, will be candidates for membership. Without the pros-
pect of membership, the EU must use other tools to engage these societies, and to manage
the strategic environment across the Mediterranean. The stakes are high, as the Mediter-
ranean space is central to a range of issues shaping security and prosperity in Europe. A
short list must include mobility and border control; energy security from existing suppliers
such as Algeria and Libya, as well as promising new sources in the Eastern Mediterranean;
preventing spillovers of terrorism and political violence; and human and environmental
security. Today, many of the most pressing challenges to overall EU interests emanate from
the southern Mediterranean, and these challenges are not readily divisible along north-south
lines. Southern European members are the most exposed, but the consequences of turmoil in
the south, from uncontrolled migration to spillovers of terrorism and political violence, affects
all EU members. The return really the circulation of foreign fighters from jihadist battles
around the Mediterranean and the Levant, in particular, poses a stark threat to European and
transatlantic security.
What is Wrong with the Prevailing Approach? What Needs Rethinking?
By framing EU engagement in the east and the south as part of a generic European Neighbor-
hood Policy, European institutions are constrained in their ability to respond to the distinc-
tive challenges in these regions. From the beginning, Mediterranean cooperation has been
The Mediterranean
is an area where
Washington welcomes
European leadership.
The German Marshall Fund of the United States 38
The notion of
conditioning European
assistance, and even
engagement, on the
prevailing principle
of more for more
leaves Europe with few
options in the face of
protracted transitions.
described in terms of development and security, in that order. In reality, Europes stake in
security has always been the key driver, and EU policy should acknowledge this. Indeed,
many of the EUs Mediterranean partners, facing tremendous security challenges of their own,
would welcome this approach. On the economic front, the requirements to prevent collapse in
Egypt and potentially elsewhere are enormous, and could go well beyond European capacity
at a time of continued financial stringency. Indeed, financial assistance from the Gulf now
plays a major role in propping up struggling economies in the Southern Mediterranean. That
said, more could be done, especially for partners such as Tunisia and Morocco where there is a
positive climate for development and reform.
The unfinished revolutions of the Arab Spring pose special challenges. Europe knows what
it would like to see in terms of political openness, tolerance, and regional cooperation and
these aspirations are broadly shared across the Atlantic. But the notion of conditioning Euro-
pean assistance, and even engagement, on the prevailing principle of more for more leaves
Europe with few options in the face of protracted transitions. This approach has left even well-
meaning partners in North Africa and the Middle East wondering if Europe is serious and
willing to invest in their future.
What Should be EU Objectives Toward its Mediterranean Near Abroad?
Looking ahead to the next five years, EU policy toward the Mediterranean can be thought of
in terms of core strategy, environment shaping, and hedging. The core objectives should be to
foster security, as a basic condition for economic and political development in the South, and
economic growth sufficient to offset the enormous demographic pressures facing Southern
Mediterranean societies. Reducing inequality and social exclusion are also part of this equa-
tion. Admittedly, these are substantial long-term tasks, with a significant risk of failure. To
shape the environment over the next decade or more, the EU will need to be at least as flexible
in its strategy as member states tend to be in their often very well developed bilateral relations
across the Mediterranean. Enhanced access to European markets for agricultural products,
security assistance going well beyond advice on security sector reform, and mobility partner-
ships are all useful instruments to help shape the economic, social, and security environment.
2

EU strategy will also need to consider ways of hedging against failure, to address longer-term
migration pressures, and the risk of further unrest if as seems quite possible job creation
cannot keep pace with demographic trends in the southern Mediterranean. Improved Euro-
pean capacity for power projection and crisis management must also be part of the equation,
whether embodied in national, NATO, or EU capabilities. Historic shortcomings in the area of
the EUs Common Security and Defense Policy will be keenly felt as the EU looks south over
the next decade.
2
On mobility issues, see the companion analysis on immigration and integration questions by Tanja Wunderlich, Astrid Ziebarth, and
Susan Martin.
Ideas for Europes New Leadership 39
How Does Turkey Fit?
The outlook for Turkeys EU membership is ultimately dependent on three variables: Turkeys
internal evolution; the politics of enlargement in key EU states (and the future of the Euro-
pean project itself); and a resolution of the Cyprus issue. This is a daunting list, and all three
elements must come together for Turkey to join the European club in a full, institutional sense.
It is difficult to be optimistic about the prospects. Without question, Turkey and Europe face
a range of shared policy challenges, many emanating from their common Mediterranean
neighborhood. Whether or not the current impasse in the accession process can be overcome,
Turkey will be a critical partner in shaping and hedging against developments in the southern
neighborhood, even if Ankaras relations with key regional players such as Egypt are troubled.
At the same time, Turkeys ability to address the deepening chaos and conflict on its borders
will depend on cooperation with Europe and the United States. Whatever the outlook
for Turkeys candidacy, new strategies are required for strategic partnership with Ankara to
address the likelihood of sustained, chaotic conditions on Turkeys borders with Syria and Iraq.
The emergence of the so-called Islamic State (IS) as an aggressive military as well as a radical
ideological presence in Iraq and Syria will confront Turkish policymakers with territorial and
human security challenges that cannot be managed unilaterally. At the same time, it is difficult
to conceive of an effective European strategy toward chaos and extremism in the Levant and
the southern Mediterranean without Ankara as a partner, if only for logisitical reasons. Policy
toward Turkey, traditionally separate from EU Mediterranean strategy, must be more closely
integrated, and it is in Ankaras interest to encourage this approach. Concerns about a slippery
slope toward privileged partnership rather than EU accession simply need to be put aside.
The outcome of Turkeys presidential election and the selection of Foreign Minister Ahmet
Davutoluas the countrys next prime minister will offer some near term tests of the potential
for a new approach. Ankaras European and U.S. partners will be looking for signs of modera-
tion in what had come to be seen as a very rough and increasingly illiberal domestic political
scene. The new prime minister has been a leading advocate for a diversified foreign policy,
with less reliance on traditional Western partnerships. But he is also an experienced and
activist diplomat, all too familiar with the mounting security challenges on Turkeys borders.
The collapse of the security order in Turkeys neighborhood is hardly the product of Ankaras
perfectly reasonable zero problems strategy toward the region. But the new realities demand
a different approach, and reinvigorated cooperation with European and NATO allies should
be integral to Turkish policy. Similarly, high-level dialogue with Ankara on containing the
burgeoning risks in the Eastern Mediterranean, the Levant, and the Black Sea should be at the
very top of the agenda for the next EU High Representative for Foreign and Security Policy.
New Actors, Looming Issues
The principal Mediterranean initiatives of the last two decades were developed largely
without reference to other external actors. Yet the role and interests of major non-European,
non-Mediterranean actors have grown steadily in recent years and promise to reshape the
Mediterranean scene in important ways. Europes strategy toward the region needs to take
Turkeys ability to
address the deepening
chaos and conflict on
its borders will depend
on cooperation with
Europe and the
United States.
The German Marshall Fund of the United States 40
Above all, a renewed
strategy toward
Europes south
needs to take explicit
account and explicit
advantage of
convergent interests
with Washington and
NATO.
these new, and in some cases returning actors, into account. Russia, a traditionally signifi-
cant Mediterranean actor largely absent from the regional scene for almost two decades, has
returned as a commercial and political force, from Algeria to Syria. Russia also plays a role
in the Eastern Mediterranean energy equation, and its annexation of Crimea underscores
Moscows perceived stake in access to the Mediterranean via the Black Sea. So, too, China has
become a significant economic player on both sides of the Mediterranean, with growing stakes
in resource trade, shipping, and maritime security. For better or for worse, neither actor can
be ignored as the EU reconsiders and reshapes its Mediterranean strategy. The recent use of
military force by Egypt and the UAE against Islamist militias in Libya also makes clear that
regional actors themselves are playing new and sometimes unexpected roles.
Above all, a renewed strategy toward Europes south needs to take explicit account and
explicit advantage of convergent interests with Washington and NATO. Given the scale of
the economic and security attention required to address critical challenges from the Maghreb
to the Levant, a higher degree of policy coordination and cooperative engagement is a neces-
sity. There should be multiple opportunities for this as NATO reassesses its own Mediter-
ranean strategy, including the Mediterranean Dialogue with seven southern Mediterranean
partners. It is worth noting that this initiative, now in its 20
th
year, has faced many of the same
obstacles that have complicated the EUs own efforts at Mediterranean cooperation.
Historically, U.S.-EU cooperation on Mediterranean strategy has been impeded by a basic
asymmetry in intellectual and institutional approaches to the region. The United States
has been a Mediterranean power for well over 200 years, but it has never framed its policy
in explicitly Mediterranean terms. In the U.S. foreign policy tradition, Europe, including
southern Europe, and the Middle East-North Africa remain separate strategic domains. The
opportunities for explicit EU-U.S. partnership on Mediterranean initiatives per se have there-
fore been limited. This should not be difficult to change. What should be on a transatlantic
agenda for the Mediterranean? A short list includes hedges against political and economic
collapse in the south, energy security, maritime security, human security, and the containment
of spillovers from the deepening chaos in Libya, Syria, and Iraq. Washington and Brussels
have both been frustrated in their attempts to foster a settlement of the Cyprus dispute, but a
concerted effort will be essential for any future attempts to stand a chance of success. A resolu-
tion here would, virtually at a stroke, vastly improve relations with Ankara, open new energy
security opportunities, facilitate EU-NATO cooperation, and offer new geometries for crisis
management in the Eastern Mediterranean.
Reviving Mediterranean Strategy
With the advent of new leadership in the European institutions, a thorough review of EU
policy toward the Mediterranean and Turkey is in order. Without prejudging the outcome of
this review, some elements are in obvious need of revision. First, the high representative for
foreign policy and security policy together with the commissioner for European neighborhood
policy and enlargement negotiations should disaggregate the neighborhood policy, decou-
pling strategy toward the south and the east. Both must be high on the list of Europes strategic
Ideas for Europes New Leadership 41
priorities, but the requirements and policies in each sphere are increasingly separate. Related
to this, European policymakers and planners should be clear about the primacy of security as
a core European interest in the Mediterranean. Secondly, on the economic side, an effective
approach would involve fewer limitations on agricultural trade, and new mobility partner-
ships. If member states are unwilling to move in this direction, EU policy will be driven in
the direction of hedging rather than shaping. Thirdly, the EU should consider a deeper rather
than wider approach to partnerships across the Mediterranean, focusing on a small number of
potential success stories, where minimum conditions for security and reform are being met.
Tunisia and Morocco are obvious examples. Fourthly, with Turkey, there is a need for closer
cooperation on energy, mobility, and regional security even as accession negotiations remain
troubled. Finally, it is unrealistic to think that EU institutions indeed Europe itself can
manage the pressing security and development problems in the Mediterranean, especially in
a period of economic stringency, without engaging other international partners, above all the
United States and NATO.
Ian O. Lesser is executive director of the German Marshall Fund of the United States Transat-
lantic Center in Brussels, and Senior Director for Foreign and Security Policy at GMF.
The German Marshall Fund of the United States 42
7
Europes Role in a Transatlantic Strategy
Toward Rising Asia
Daniel Twining
Introduction
A
rising Asia, led by an authoritarian China that could soon emerge as the worlds largest
economy, threatens to eclipse the global liberal order and Europes privileged position
within it. On the other hand, the democratic quality of emerging Asian powers like
India and resurgent ones like Japan suggest a rising Asia could also naturally partner with
Europe to safeguard an open and pluralistic international system. While the United States has
long had a Pacific orientation, it is time for Europe to develop a full-spectrum Asia policy to
shape the emergence of the worlds future center of wealth and power in a way that reinforces
peace, pluralism, and prosperity.
The United States has been a Pacific power for two centuries and has recommitted to leader-
ship in Asia through its rebalance to the region. By contrast, aside from a narrow commer-
cial agenda, Europe is far behind, with the European Unions Asia policy often consisting of
little more than a trade-promotion agenda with China and other Asian economies. This is
surprising given that European powers were dominant strategic actors in Asia until only about
70 years ago. The EUs absence as a strategic player in Asia makes little sense given its stake in
the regions political and economic evolution. After all, Asias ascendance is a global phenom-
enon, not simply a regional one, as attested by the impact of Chinas and Indias rise on global
energy markets, trade and investment flows, global governance, security, and development
all areas where Europe has core interests.
Where We Are Today
Three of the worlds four largest economies in purchasing power parity (PPP) terms are now
in Asia. This is a revolutionary development in an international system that has been shaped
by Western power for five centuries. The EU is Chinas largest trading partner, giving Europe
an enormous stake in the future of the next superpower. Asia is the most likely arena for a
great power war as rivalries over territory and history collide with surging nationalism and
Background
While EU member states have long pursued national strategies, the EU has only recently developed
anything resembling a unified Asia policy. Ironically, it was the internal EU debate in the mid-2000s
over lifting an arms embargo on China despite Chinas rapid and destabilizing process of military
modernization directly targeting the United States that drew attention to the absence of a Euro-
pean Asia strategy. The debate led the EU to adopt, for the first time, a set of Asia security policy
guidelines. To its credit, the EU has enacted trade agreements with South Korea and Singapore
and is in negotiations with Japan, India, and the Association of Southeast Asian Nations (ASEAN).
But European trade and investment relations in Asia are not often viewed in a wider strategic
framework. EU member states have succumbed to pressure from China to backpedal on support for
human rights and Tibet in order to secure national business advantages that further undermine a
unified EU approach to the region. Most U.S. and Asian elites do not view Europe as a coherent or
strategic actor in a region that produces nearly 50 percent of global GDP and surpasses any other
in military spending. This is a missed opportunity for the EU given its members compelling interests
both within Asia and in a wider international order buffeted by the ascendance of new, non-Western
powers with revisionist ambitions.
Ideas for Europes New Leadership 43
weak political institutions. At the same time, more people live under democracy in Asia than
in any other region of the world, attesting to the universal appeal of the values generated by
the European Enlightenment and Europes continuing commitment to the cause of human
dignity everywhere.
The EU brings to the table:
its position as Asias largest trading partner;
its decades of experience building the strong multilateral security and economic order that
Asia still lacks;
its stance as a more convinced advocate on values issues than Washingtons existing allies in
the region;
its decisive role in institutions of global governance that directly affect Asian nations core
interests; and
an array of advanced militaries and defense industries, whose weapons sales and military
cooperation programs have the scope to influence the balance of power in the Asia-Pacific
region.
Yet the EU has no comprehensive policy for engagement with Asia. Some of the pieces of a
more concerted strategy are in place. Europe has enjoyed success in deepening trade ties with
the region through completed or pending agreements with key states including South Korea,
Japan, India, and ASEAN. EU members maintain an arms embargo on China stemming
from its security forces massacre of unarmed civilians in Tiananmen Square in 1989. Despite
declining defense budgets, European nations like France, Germany, the United Kingdom, and
Sweden are among Asias largest defense suppliers. Europe has pursued development coop-
eration and promoted human rights in poor but promising countries like India, Indonesia,
Vietnam, and Myanmar. But these elements do not add up to a strategy.
We have been talking about the pivot to Asia, and discussing for so long
about the U.S. turning its back on Europe. I have always been convinced that
we should together pivot to Asia, the U.S. and the EU. Its our joint interest
and it would be a strategically powerful move. [Y]es we need to restate the
need for common work on the Atlantic, but this should not prevent us pivoting
to Asia together. Otherwise we will pay the consequences in the coming
decades. The risk of a major threat to global stability coming from [Asia]
puts the issue high on the [transatlantic] agenda even if in the meantime we
are dealing with crises all around us.
Federica Mogherini, Italian minister for foreign affairs and international
cooperation, September 10, 2014
The German Marshall Fund of the United States 44
Moreover, Europe has been too susceptible to Chinese divide-and-conquer tactics on issues
of human rights, Tibet, and market access, where Beijing has cleverly played off European
nations against each other in return for commercial contracts. This has not only weakened
European solidary and the development of a common foreign policy; it has also diminished
Asian nations opinions of Europe as a strategic actor. Nor has the EU leveraged the strength of
individual member states bilateral relations say, Germanys ties with China, or Britains and
Frances with India toward a common purpose.
Policy Recommendations: Toward a Transatlantic Asia Strategy
There are specific opportunities for the Atlantic allies to work together in a structured, system-
atic way in rising Asia. These include:
China, where U.S. and European concerns over issues like human rights, protection of
intellectual property, and rule of law are convergent, and where the West wields much
more leverage than commonly understood as a result of being Chinas dominant trade and
investment partners.
India, where the United States and Europe have a compelling stake in supporting the rise
of a developing democracy that can deliver 1 billion-plus people economic opportunity
and security through free political institutions, and which can anchor an Asian balance of
power that will deter Chinese hegemony.
Pakistan, where substantial U.S. and European assistance programs can be better coor-
dinated and targeted to help mitigate rising extremism that threatens Western societies,
including by improving education and economic opportunity, while strengthening civilian
government.
Myanmar, where a historic political opening can be constructively encouraged and
where backsliding on liberalization can be deterred through close coordination between
the United States and the EU in diplomatic and economic engagement, and where the allies
can bring to bear lessons learned in Europe (for instance, in the Balkans) to support Myan-
mars fragile process of ethnic reconciliation.
Asian institution-building, where Europe is in a singular position to serve as an example
to Asian nations with only a superficial history of multilateral cooperation of how to build
durable and robust regional institutions in the fields of security, trade and investment, and
transnational governance.
Transatlantic cooperation in Asia could also encompass security issues, where Europeans
have not been pivotal players since the days of gunboat imperialism a century ago, but where
a more global EU must step up its game as competition among Asias rising and established
powers creates dangerous dynamics that threaten international security and prosperity. It was
the peculiarities of the Cold War that led to the development of separate U.S. alliance systems
in Europe and Asia. In todays globalized world, the United States and Europe should consider
linking the Atlantic and Pacific security networks in closer patterns of cooperation.
Europe has been too
susceptible to Chinese
divide-and-conquer
tactics on issues of
human rights, Tibet,
and market access,
where Beijing has
cleverly played off
European nations
against each other in
return for commercial
contracts.
Ideas for Europes New Leadership 45
The EU should adopt
a whole-of-Asia
approach that gives
it more negotiating
power with China
through strengthened
relations with its many
neighbors.
This could include, for instance, a much more robust NATO agenda to partner with like-
minded democracies in Asia. If NATO can enjoy ad-hoc military support from nations like
Japan, Australia, and South Korea for U.S.-European operations in theaters like Afghanistan, it
should certainly be possible to imagine more institutionalized NATO cooperation, including
in patrolling, training, and strategic planning, with like-minded, militarily capable partners in
Asia.
More broadly, the EU should adopt a whole-of-Asia approach that gives it more negotiating
power with China through strengthened relations with its many neighbors. European unity is
a potent force for influence in Asia, and national strategies alone will not succeed in dealing
with countries like China whose economic, military, and population weights are multiples of
those of even the biggest European states. Europe needs to be in the Asian arena to defend
its strong interests in peaceful resolution of territorial disputes, freedom of the sea lanes that
carry the worlds commerce, an open economic order, and democratic development. The costs
of European non-engagement will only grow as Asia becomes the worlds center of gravity in
economics and security. A strategic approach would magnify EU influence by aligning Brus-
sels with like-minded democracies across the Indo-Pacific, including the United States.
Europe should also welcome Washingtons offer to pivot together toward Asia in a transatlantic
fashion, rather than leaving the Americans to build a trans-Pacific future that has the unin-
tended effect of weakening transatlantic ties. Rather than view the United States rebalance to
Asia as something harmful to Europe, it makes more sense for the EU to widen its strategic
horizons and ambitions in a similar way. Europe is not a competitor to the United States in
Asia because their goals of peace, stability, pluralism, and prosperity are congruent.
Tactical U.S.-Europe competition over commercial contracts or arms sales pales in comparison
to common strategic stakes in preventing regional war, supporting democratic development as
a source of opportunity and stability, and ensuring that the Asian economies remain integrated
with the world rather than walled off by a new sphere of influence. Beyond leveraging the
transatlantic alliance, both the United States and Europe can also take advantage of close ties
to key regional powers like Japan and India to engage China from a position of strength on
issues of mutual concern including the necessity of peaceful resolution of conflict, rule-
bound trade and investment, and human rights.
Conclusion
Europe is a global actor that should have a global set of policies. These should certainly
encompass the region that increasingly will be at the center of the world economy in the 21
st

century. Moreover, Europes stakes lie not simply in regional dynamics but in the implications
for liberal order and global governance. Chinas impact alone is reshaping the world economy,
global energy markets, international security, and development in Africa and Latin America.
Brussels has correctly seized on the economic competition from Asia to push ahead with
mechanisms like the Transatlantic Trade and Investment Partnership(TTIP), to ensure that
the depth and breadth of transatlantic economic integration remain ahead of anything that
might develop across the Pacific. Leading European Union member states support a UN
The German Marshall Fund of the United States 46
Security Council permanent seat for India; Europe has a key stake in the evolution of the G20
as well as in forums like the World Bank and International Monetary Fund, where demands
for stronger Asian representation will only grow. And global issues of concern to the EU, like
climate change and internet freedom, will be enormously affected by the policies Asian nations
adopt.
To the extent that China is both a top economic partner and top security concern for so many
countries, it only makes sense for Europe and the United States to use their combined influ-
ence to manage relations with Beijing from a position of strength rather than succumb to a
more national approach that will disadvantage every country that cannot alone match Chinas
clout. Asia will unquestionably develop in a more peaceful and stable direction if Europe and
the United States enjoy strong relations with a range of Asian partners than if the transatlantic
allies do not work with them to shape a strategic and economic environment that incentivizes
Chinas peaceful rise.
If we want China to play by the global rules that have preserved peace and created unprec-
edented prosperity, the West and Asian partners need to collectively encourage and chal-
lenge China to uphold those rules. The Trans-Pacific Partnership and TTIP are examples of
how to do this in the realm of trade; Chinese reformers have cited both agreements as reasons
China should further liberalize its own economy so as not to get left behind. Rather than
somehow ganging up on China, Europe and the United States can thus shape an agenda that
benefits China too.
Daniel Twining is a senior fellow for Asia at the German Marshall Fund of the United States.
Ideas for Europes New Leadership 47
8
Improving Europes Energy Security
Kristine Berzina
Introduction
E
nergy security has been a prominent political issue since the 2006 and 2009 cut-offs
of natural gas from Russia to Europe, but this years conflict in Ukraine has placed the
issue higher on the political agenda than ever before. The European Union has penned
a new energy security strategy and is codifying its energy goals for 2030. The new European
Commission structure with a vice president on energy union and a commissioner for climate
action and energy highlights the increasing importance of this issue. In addition, the transat-
lantic community is beginning to collectively address energy security. The Group of 7 estab-
lished the Rome G7 Energy Initiative for Energy Security in May 2014 to encourage coop-
eration on common energy security objectives, including diversifying supplies, seeking low
carbon solutions, and improving energy systems.
1
With new EU leadership coming into office this fall, it is a good time to draw attention to the
key challenges and offer recommendations for improving Europes energy security. Exces-
sive dependence on a limited number of energy suppliers, inadequate interconnections, an
incomplete internal energy market, and fragmented and contradictory policies on new energy
sources stand in the way of greater security. Through cooperation with the United States and
Canada, Europe can use the current prominence of energy issues to put the continent on the
right track for 2030 and beyond.
Current State of Affairs and Strategic Challenges
Europe is moving toward improved energy security. Since the 2009 interruptions of natural
gas from Russia, the European Union has started to integrate energy infrastructure and poli-
cies. Today, European Union countries have access to better storage for natural gas, improved
cross-border energy infrastructure interconnections, and they can even send their natural gas
resources to neighbors in Eastern Europe. Still, obstacles to energy cooperation remain, and
efforts to reduce import dependence, connect energy markets, and find new sources must be
scaled up to overcome imminent energy challenges.
Import Dependence
Europes dependence on a limited number of natural gas exporters is the first challenge to its
energy security. Two key energy resources oil and coal are sold freely on global markets,
allowing Europeans to use West African and South American fuels to drive their cars and U.S.
coal to generate power. Natural gas, on the other hand, is largely transported through pipelines
and sold through 20-year contracts. These physical and contractual restrictions make natural
gas vulnerable to delivery interruptions and politicized pricing.
The European Unions domestic natural gas production is declining, requiring the EU to
import natural gas for heating, electricity, and manufacturing. Norway and Russia each
provide approximately one-third of the EUs natural gas imports, largely through pipelines.
The remaining third of the EUs natural gas imports come by ship and pipeline from Algeria,
1
European Commission, G7 Rome Energy Ministerial Meeting, Rome G7 Energy Initiative for Energy Security: Joint State-
ment. IP/14/530, May 6, 2014, http://europa.eu/rapid/press-release_IP-14-530_en.htm.
Today, European
Union countries have
access to better
storage for natural gas,
improved cross-border
energy infrastructure
interconnections,
and they can even
send their natural gas
resources to neighbors
in Eastern Europe.
The German Marshall Fund of the United States 48
Background
Energy security is the ability to ensure the supply of energy at affordable prices and to minimize
vulnerability caused by import dependence and supply disruptions. The European Union addresses
energy security as a part of its larger energy and climate change policies. With the recent emer-
gence of the United States as a leading global energy producer, the EU is coordinating its efforts to
improve access to affordable energy resources with transatlantic partners.
Energy security is one of three parts of European energy policy, which seeks competitive, sustain-
able, and secure energy. Achieving all three aims is elusive, and advancing one goal may mean
accepting a setback in others. Focusing on sustainability, Germany has invested in a rapid increase
in renewable energy sources and has experienced a progressive rise in household electricity
prices. Meanwhile in Eastern Europe, individual member state efforts to negotiate more affordable
natural gas prices from Russia have undercut opportunities for regional connectivity and weakened
Europes energy security more broadly.
The European Union has supported its energy policies through targets for energy efficiency, green-
house gas emissions reduction, and renewable energy use. Energy security does not have targets
but has instead been supported by the European Energy Programme for Recovery (EEPR), which
funds improvements in gas and electricity infrastructures, offshore wind energy, and carbon capture
and storage. The EU also identifies and supports a program of Projects of Common Interest in the
field of energy infrastructure. The 2013 list includes 248 Projects of Common Interest, such as
pipeline interconnections, electricity transmission lines, and liquefied natural gas (LNG) terminals.
1
This year, the European Union is setting new targets for greenhouse gas emissions, renewable energy,
and energy efficiency by 2030. The proposed EU-wide target of 27 percent renewable energy encour-
ages developing new domestic energy sources, while the recent addition of a higher 30 percent
energy efficiency target acknowledges the importance of efficiency measures for securing energy
supplies.
Energy security is increasingly becoming an area of transatlantic cooperation. The United States
directly and indirectly influences Europes coal and natural gas markets, and it will continue to
do so in the coming years. Since 2009, the United States has been the worlds top natural gas
producer, and the shale gas boom allowed utilities to transition from burning coal to using gas
for electricity generation. As a result, greater volumes of U.S. coal were shipped to other markets,
including Europe.
When it comes to natural gas, there are no direct natural gas trade links between the United States
and Europe at the moment. Still, the existence of low gas prices in the United States is allowing
European utilities to renegotiate prices with their suppliers. In the future, the option of buying lique-
fied natural gas from the United States may help Europe negotiate better prices for natural gas from
Russia and Norway.
Finally, energy security is also a crucial area of strategic and defense cooperation for the European
Union and the United States. NATO has labelled energy as an emerging security challenge. Although
NATO has a limited role when it comes to energy security concerns within Europe, it can support
member state efforts for greater solidarity on energy issues.
1
European Commission, Overview of Projects by Country, January 9, 2014, http://ec.europa.eu/energy/infrastructure/pci/
doc/2013_pci_projects_country.pdf.
Ideas for Europes New Leadership 49
Qatar, Libya, and Nigeria. Unfortunately, not all EU member states have access to gas from
multiple suppliers. Central and Eastern European member states are disproportionately
dependent on Russia for natural gas.
For many member states, Russia has been a reliable energy partner since the Cold War. But
complete dependence on Russian gas in individual countries jeopardizes European energy
security as a whole and prevents fair pricing. The Baltic States and Bulgaria are wholly reliant
on Russia for their natural gas supplies. Although the Baltic States are closer to Russia than
Germany, the absence of alternative suppliers means that they have paid a higher price for
natural gas. Lithuanias last contract was for $487 per thousand cubic meters of gas, approxi-
mately $100 more than Germanys price.
2

Lithuania has taken a decisive step in protecting its natural gas supplies by leasing a floating
liquefied natural gas terminal that will be operational in 2015. Liquefied natural gas can be
imported from Qatar and Algeria today, and additional supplies will be available from the
United States, Mozambique, Tanzania, and Australia in the coming years. Not only does Lithu-
anias regasification terminal give Lithuania access to new gas sources, it also has given Lithu-
ania better bargaining power with Gazprom on traditional pipeline deliveries of natural gas.
After investing in the new terminal, Gazprom offered to lower Lithuanias price for pipeline
gas to approximately the price Germany pays.
3

Regional Cooperation: Using Interconnections to Build a Single Market
The second challenge to the European Unions energy security is the absence of a single gas or
electricity grid or a common energy policy. Without these, the EU cannot have a single energy
market. To move the process of integration along, the EU should do more to support regional
cooperation between new member states and encourage collaboration between private and
public sector actors.
Europe has many great examples of cross-border cooperation to apply to new member states
and Eastern Partnership countries. Scandinavias interconnected electricity infrastructure
and markets provide an especially important model. When the wind blows in the North Sea,
Denmark can send its electricity to be stored in Norways hydroelectric dams. When Denmark
needs that electricity, Norway can send it back.
4

The EUs newer member states are making progress on using interconnections. Traditionally,
natural gas has flown from east to west in Europe, but reverse flows are now delivering gas
from Poland and Hungary to Ukraine. This gas is replacing a portion of energy deliveries from
Russia that were cut off in June 2014.
2
Marek Strzelecki, Lithuania Offered LNG Cheaper Than Gazprom Natural Gas, Bloomberg, May 8, 2014, http://www.bloomberg.
com/news/2014-05-08/lithuania-offered-lng-cheaper-than-gazprom-natural-gas.html.
3
Kjetil Malkenes Hovland, Gas Terminal Plans Helped Lithuania Negotiate Lower Price From Gazprom:
Concerns
About Price, Energy Security Prompted Lithuania to Lease Norwegian-built Ship, Wall Street Journal, May 28, 2014, http://
online.wsj.com/articles/gas-terminal-plans-helped-lithuania-negotiate-lower-price-from-gazprom-1401188154.
4
Jesper Packert Pedersen, Bolstering European Energy Security, GMF Foreign Policy Papers, 2014, http://www.gmfus.org/archives/
bolstering-european-energy-security/.
The EU should do
more to support
regional cooperation
between new member
states and encourage
collaboration between
private and public
sector actors.
The German Marshall Fund of the United States 50
Domestic resources
can play a significant
role in making the
continent more resilient
and competitive, but
fragmented and often
dissonant energy
policies may destabilize
energy systems across
borders.
Still, regional cooperation between the EU and Ukraine should improve. Slovakia has the
potential for being Ukraines major energy supplier, rerouting gas from Europe to Ukraine, but
political obstacles are preventing Slovakias engagement with Ukraine. Gazprom views reverse
flows to be contrary to the Slovakias contracts with Russia.
5
This shows that Gazproms supply
contracts are a continuing area of concern for Europes energy security.
Similarly, some infrastructure projects do not improve the diversity of gas supply. South
Stream, the planned gas pipeline to transport additional Russian natural gas across the Black
Sea to Bulgaria, Serbia, Hungary, Slovenia, and further to Austria is such an example. Rather
than supporting the creation of a more integrated and unified European energy market, South
Stream creates a route for natural gas deliveries to Southeastern Europe that bypasses Ukraine.
This undermines solidarity in the European energy space. Instead, the European private sector
and government actors should focus on regional cooperation and solidarity to achieve long-
term benefits such as supply diversification.
New Energy Sources
Supplementing Europes energy supplies with new fossil fuel and renewable energy sources is
the third challenge to the EUs energy security. Domestic resources can play a significant role in
making the continent more resilient and competitive, but fragmented and often dissonant energy
policies may destabilize energy systems across borders. Similarly, the EU should seek to import
traditional fuels from new suppliers to make the EUs energy system more resilient to disrup-
tions. When procuring new energy sources, the EU should take care to strengthen internal cohe-
sion and improve the energy security of the EU as whole.
Renewable energy is an essential component of the EUs efforts to improve energy security and
to prevent climate change. With additional renewable energy resources, such as biomass for heat
and wind for power, the EU can reduce its dependence on expensive imported natural gas and
oil. Furthermore, using renewables helps the EU meet its climate change goals.
But rather than immediately supporting energy security, quickly scaling up renewables can
jeopardize the short-term stability and affordability of energy systems. In Germany, a feed-in
tariff system has successfully introduced solar power, wind power, biomass, and biogas into
the energy system. But the costs of this policy burden households, and Germany is amending
its frameworks to lower these costs.
The intermittency of renewable energy poses additional challenges. When the wind is blowing
and the sun is shining, excess electricity can spill across borders. When the opposite weather
patterns are in place, Germany relies on power from its neighbors to make up the shortfall.
The quick scaling up of renewables therefore requires unprecedented cross-border coordina-
tion, which is currently lacking in many places.
As far as new natural gas production is concerned, Europe will have to look beyond conven-
tional, onshore natural gas. New exploration efforts for unconventional gas are currently
5
ITAR-TASS, Ukrainian, EU experts explore reverse-flow gas supply possibilities, June 25, 2014, http://en.itar-tass.com/
economy/737785.
Ideas for Europes New Leadership 51
underway in the U.K., Romania, and Poland. But as in the case of renewable energy, disparate
policies impede new production. While the U.K. pursues new incentives for shale gas develop-
ment, France maintains its ban on hydraulic fracturing, the technique used to produce shale
gas.
Although European states are unlikely to experience a shale revolution on par with that of
the United States, shale gas is an important addition to the EUs energy sources. To support
new exploration, the EU must provide a stable policy environment for those countries and
areas seeking to pursue unconventional resources. The European Commissions January 2014
recommendation and communication on shale gas exploration begins to establish this secu-
rity.
6
This commitment to new sources needs to be sustained.
Another new area of fossil fuel production is offshore natural gas. In 2010 and 2011, Israel
and Cyprus discovered natural gas in the Mediterranean seabed. These discoveries will play
a tremendous role in the Eastern Mediterranean by providing the region enough gas to meet
its own needs for the coming decades.
7
Natural gas will be especially important for shifting
electricity production away from costly and polluting oil to a cleaner and cheaper option.
Lastly, Europe should also continue building connections to new natural gas sources outside
of Europe. This means providing assistance to integrate Caspian gas into European markets
through the Southern Corridor as well as building and fully using liquefied natural gas import
terminals to allow Europe to receive more Qatari, East African, Australian, and North Amer-
ican natural gas.
Recommendations and Policy Implications
Improve energy efficiency. The starting point for improving the security of Europes
energy supplies is using existing resources as efficiently as possible. This will not only help
reduce the amount of natural resources the EU imports but will also contribute to meeting
Europes climate change goals.
Strengthen interconnections between EU member states. The EU needs more robust
interconnections to allow member states to share natural gas and electricity across borders,
connect isolated regions, and improve the EUs ability to act as a unit on energy issues.
More integrated energy systems can bring about better relations with existing suppliers
because the natural gas market will be less politicized on a regional level.
Increase domestic energy production while keeping climate change targets in mind.
Import dependence makes Europe vulnerable to technical and political supply disruptions.
Europe can overcome this risk by increasing the use of domestic energy resources. EU
member states should develop their own renewable and traditional fuels to maximize their
self-sufficiency. That said, an increase in domestic fuel sources should be pursued with
6
European Commission, Communication from the Commission to the European Parliament, The Council, and the European Economic
and Social Committee and the Committee of the Regions on the Exploration and Production of Hydrocarbons (such as shale gas) Using
High Volume Hydraulic Fracturing in the EU, Brussels, March 17, 2014, (COM) 2014 23 final/2.
7
Brenda Shaffer, Energy Resources and Markets in the Eastern Mediterranean, GMF Policy Brief, June 2012, http://www.gmfus.org/
archives/energy-resources-and-markets-in-the-eastern-mediterranean-region/.
The starting point for
improving the security
of Europes energy
supplies is using
existing resources as
efficiently as possible.
The German Marshall Fund of the United States 52
The EU should further
promote and organize
regional cooperation
activities in the energy
sector that bring
together public and
private sector officials
to build trust and
promote collaboration.
climate change targets in mind, and priority should be placed on low carbon sources. If
member states opt to use more coal, for example, they should look into carbon capture and
sequestration options to offset the climate costs of using that coal. The EU should support
member states with technological recommendations and facilitate access to funding to help
balance the needs of energy independence and climate goals.
Improve regional energy cooperation. The EU provides financial and technical support to
member states, but countries have difficulty cooperating effectively and making use of the
EUs resources. The EU should further promote and organize regional cooperation activi-
ties in the energy sector that bring together public and private sector officials to build trust
and promote collaboration.
Prepare EU policy and infrastructure to welcome additional suppliers. Improving
energy security will require attracting additional energy suppliers to Europe. The EU
should open its doors to new natural gas sources from North America, South America, and
Africa by integrating its markets and promoting liquefied natural gas capacity.
Coordinate energy security strategies with transatlantic partners. The crisis in Ukraine
has brought greater transatlantic cooperation on energy security than ever before. The
United States has political clout in Central and Eastern Europe and can help promote
energy solidarity within the region. The promise of U.S. liquefied natural gas can moti-
vate European states to integrate and reform their energy systems to accommodate new
resources. Transatlantic cooperation will be especially important when addressing Russias
supply contracts to Europe.
Kristine Berzina is a transatlantic fellow at the German Marshall Fund of the United States,
specializing in energy issues.
Ideas for Europes New Leadership 53
9
Migration and Asylum Policy: A Transatlantic
View on Challenges and Opportunities
Tanja Wunderlich, Astrid Ziebarth, and Susan Martin
Introduction
E
urope is at a crossroads regarding future migration policy. Its member states are faced
with similar and pressing challenges: establishing comprehensive approaches to migra-
tion policy, providing clearer processes for legal migration and access to citizenship,
equalizing access of migrants or descendants of migrants to work and education, combating
racism and discrimination against refugees and migrants, reducing irregular migration,
and taking care of rising numbers of refugees. The European Union is up for a new agenda
on migration and integration policy, and the new president of the European Commission,
Jean-Claude Junker, has made migration policy one of his top priorities.
1
The commissioner
for migration and home affairs has been asked to work with other commissioner in a newly
designed Commissioner Group on External Action under the leadership of the high represen-
tative of the foreign and security policy, linking the portfolio to foreign affairs and economics.
Global migration trends and challenges are affecting the United States and Europe alike and
invite exchanges on lessons learned on good practices to enable public policies to adequately
respond. The United States is currently challenged by an unprecedented number of unac-
companied minors entering the country irregularly. At the same time, the U.S. Senate passed a
Comprehensive Immigration Reform Bill in 2013, which is currently stalled in the U.S. House
of Representatives; U.S. President Barack Obama is considering new executive actions to
reform immigration policies.
1
Jean-Claude Juncker, A New Start for Europe: My Agenda for Jobs, Growth, Fairness and Democratic Change, Political Guidelines for
the European Commission, July 15, 2014.
Background: Migration Policy in Europe
Managing legal and irregular migration is at the heart of the political debate in Europe, on the
regional, national, and EU level. Just under 7% of the EU-27 population are foreigners; according to
EUROSTAT, 33.3 million foreign citizens were resident in EU-27 in 2011. The majority of these, 20.5
million, were citizens of non-EU countries, while the remaining 12.8 million were citizens of other
EU member states. Due to better data availability, information on citizenship has often been used to
study populations with a foreign background. However, since citizenship can change over time, it is
also useful to present information by country of birth. Here, the numbers look even more impres-
sive. There were 48.9 million foreign-born residents in the EU in 2011, 9.7% of the total population.
With the Amsterdam Treaty, the European Union created the legal basis for a Community policy
on immigration and asylum. The goals of this policy were more concretely formulated in five-year-
programs, adopted by the European Council of Tampere (October 1999), the European Council of
The Hague (2004), and the Stockholm Programme (2009). The Stockholm Programme was the
latest operational policy agenda for EU immigration and asylum policies for 2010 to 2014. 2014
will see the end of the Stockholm Programme, and it needs to be decided what should be on the
agenda for the areas of freedom, security, and justice for the next five years. Italy took over the
presidency of the European Union on July 1, 2014, and announced that it will make irregular migra-
tion and European burden-sharing a top policy priority.
The German Marshall Fund of the United States 54
There is a race for
supremacy happening
between border
enforcement and
smugglers; whenever
one channel is sealed
off, other, more
perilous ones will be
found.
This paper looks at the current debates and issues surrounding irregular migration in both the
United States and Europe, provides some background of the respective policy contexts, and
discusses potential policy solutions through a transatlantic lens.
The Issues at Stake: Irregular Migration, Border Enforcement, and Asylum
Irregular migration concerns both the United States and Europe. Both are important destina-
tions for irregular migrants. Both have linked their policies to reduce irregular migration to
their respective border security regimes. And, despite or because of significant invest-
ments and efforts to step up border security in past years, both have recently seen dramatic
increases in irregular migration flows. Although the scope of irregular migration by its very
nature eludes exact statistical coverage, apprehension figures provide some data on trends,
and also point to geographical routes and favorite entry points.
In the European Union, detections of illegal crossings along the external borders of EU
member states rose sharply from approximately 104,000 in 2009 and 2010 to nearly 141,000
in 2011 (an increase of 35%). This sharp uptick was mostly triggered by the Arab Spring and
the political unrest in Northern Africa. Sixty-four thousand detections were reported in the
Central Mediterranean area in 2011, compared to only 5,000 in 2010, pre-Arab Spring.
2
At
the same time, the number of migrants braving rough seas to get into the European Union
dramatically increased.
3
Stronger fences and higher walls have forced irregular migrants to
take more dangerous routes, increased their dependence on human smugglers, and made
them more vulnerable. In 2012, the absolute number of apprehended irregular migrants
dropped dramatically according to official border statistics, possibly as a result of increased
and more resolute border enforcement, especially by Greece on the Greek-Turkish land
border.
4
In the first quarter of 2014, however, Frontex reported the highest number of illegal
border-crossings of any first quarter since the initial stages of the Arab Spring in 2011.
5
There is a race for supremacy happening between border enforcement and smugglers; when-
ever one channel is sealed off, other, more perilous ones will be found. The tragedy of boats
sinking off the coast of Lampedusa shows the yet unsolved dilemma European policymakers
are faced with: stepping up border controls at Europes external borders does not prevent, but
only diverts migration flows. And there are more unintended consequences. When Opera-
tion Mare Nostrum was established, the Italian border agencies were no longer prohibited,
2
FRONTEX, Annual Risk Analysis 2012, Warsaw, April 2012.
3
See FRONTEX, FRAN Quarterly: Quarter 2 April-June 2011: In Q2 2011, there were 26,167 detections of illegal border-crossings
on the Central Mediterranean route, a 10 percent increase even compared to the peak reported during the previous quarter, and
evidently a massive increase compared to the negligible detections throughout all of 2010. The vast majority of detections on this
route were reported from Italy (25,500), where detections increased by 13 percent even compared to the influx of migrants reported
during Q1 2011.
4
FRONTEX, Annual Risk Analysis 2013, Warsaw, April 2013; see also Matina Stevis, Illegal Migration to the European Union fell in
2012, Wall Street Journal, August 2013.
5
Frontex, FRAN Quarterly: Quarter 1, January-March 2014, http://frontex.europa.eu/assets/Publications/Risk_Analysis/FRAN_
Q1_2014.pdf
Ideas for Europes New Leadership 55
but rather ordered to save irregular migrants
6
in danger of drowning. This was an impor-
tant policy shift as it put the humanitarian argument first. However, it also led smugglers to
deliberately create perilous situations in order to maximize their benefits. They put even more
people on the already derelict boats and used cheaper and even less safe boats knowing that
the Italian authorities have to step in.
While the dramatic situation of asylum seekers and refugees in the Mediterranean is domi-
nating the European debate, a different, but equally drastic humanitarian refugee crisis is
unfolding in the United States: the rise of arrivals of unaccompanied minors from Central
America without documents. More than 60,000 children have arrived so far in 2014, up from
24,000 in 2013, and experts estimate that as many as 90,000 children are expected by years
end.
7
Policymakers, experts, and humanitarian agencies disagree on what actually triggered
this surge. Some characterize the Deferred Action for Childhood Arrivals Program (DACA)
of 2012, which grants eligible unauthorized youth a two-year reprieve from deportation, as the
principal a pull factor, although children arriving now are not eligible for it. Others point to
violence and homicides in Central America as the decisive push factor.
8
Both the United States
and Europe are under pressure to act, addressing their immediate dramatic situations, and also
finding long-term and sustainable solutions.
Migration Policy in the United States
Managing migration is also a potent political issue in the United States. That country is the
largest single home of immigrants as measured by absolute number of foreign born residents,
with almost 40 million residing there in 2012. About 18 million were naturalized U.S. citizens,
with the remaining 22 million being foreign nationals. The foreign-born population represent
about 13 percent of the of the total U.S. population. It is estimated that there are about 11.5
million undocumented migrants in the country. That number has been relatively steady since
the recession began in 2008; net new unauthorized migration from Mexico is estimated to be
zero at present.
The United States has a complex system for admission of legal permanent residents and
temporary workers to the country. Priority in the permanent admission system is given to
6
In the public debate, the terms irregular migrants, refugees, and asylum seekers are often confused. In the legal sense, an
asylum seeker is someone who says he or she is a refugee, but whose claim has not yet been definitively evaluated. National asylum
systems are there to decide which asylum seekers actually qualify for international protection. Those judged through proper proce-
dures not to be refugees, nor to be in need of any other form of international protection, can be sent back to their home countries (see
www.unhcr.org).
7
Beginning in 2013, but culminating in the past months, the U.S Border Authorities registered a significant increase of apprehensions
of unaccompanied children and youth from Honduras, Guatemala, and El Salvador at the southwest U.S. border.
8
Whereas Central American countries that are experiencing high levels of violence have seen thousands of children flee, others with
lower levels of violence are not facing the same outflow. In 2012, the countries of El Salvador, Guatemala, Honduras, and Mexico
accounted for 41,828 homicides, a rate of 28 per 100,000 people. Excluding Mexico, the murder rate jumps to 54 per 100,000
people. The president of Honduras has gone as far as calling the children refugees from war in his country. By contrast, other
countries in the region, such as Belize, Costa Rica, Nicaragua, and Panama had a total of just 1,881 murders, at a rate of only 13 per
100,000. Nicaragua is particularly useful as an example. It is the second-poorest country in the region behind only Haiti and yet,
with a far lower rate of violence than the three main sending countries, it has not seen an uptick in unaccompanied children leaving.
Source: Tom K. Wong, Statistical Analysis Shows that Violence, Not Deferred Action, Is Behind the Surge of Unaccompanied Children
Crossing the Border, Center for American Progress, July 8, 2014.
Both the United
States and Europe
are under pressure to
act, addressing their
immediate dramatic
situations, and also
finding long-term and
sustainable solutions.
The German Marshall Fund of the United States 56
Closing the back door
for irregular migrants
should lead to a more
open front door for
legal migrants.
family reunification, with relatives of those already in the United States representing about 80
percent of admissions. Policies for employment-based admissions favor the entry of the highly
skilled, particularly in the permanent categories. The only categories explicitly for low-wage
workers are geared at seasonal agricultural and other temporary workers. The other major
admission categories are the refugee resettlement program and diversity program for immi-
grants from countries with relatively low levels of previous immigration to the United States.
Current policies are often criticized as being too inflexible to meet changing labor market
conditions, encouraging the hiring of undocumented workers when the supply of already-resi-
dent workers does not meet the demand for labor. With the stalemate between the Senate and
the House on passage of comprehensive immigration reform, the concern is that unauthorized
migration will resume when the U.S. economy improves and businesses begin hiring again.
Five Policy Recommendations for Better Management of Irregular Migration and Asylum
Opening the Front Door, Closing the Back Door
In principle, protecting external borders is important to preserve freedom, security, and
justice. In the European Union, securing the external borders is also essential for removing the
internal borders between member states. This means that in the EU as well as in the United
States migration management and border control have been increasingly integrated into
security frameworks in the past decade. Security and enforcement concerns have driven immi-
gration policy development. However, a broader, cross-cutting approach, beyond investments
in a security apparatus, is needed. Closing the back door for irregular migrants should lead to
a more open front door for legal migrants.
To solve the issue of irregular migration in general, the United States has applied an inte-
grated approach, including security, employment, and regularization. The U.S. Senate passed
a comprehensive immigration reform bill in 2013 that includes this mix of strategies. The bill
adds considerable financial, technological, and human resources to increase border security
along the 2,000-mile border between the United States and Mexico. It also mandated that
all employers use an electronic system for verification of the work authorization of all new
employees citizens and immigrants alike to help ensure that irregular migrants are not
employed in the U.S. economy. A new program for temporary workers was also included
in the bill in order to offer employers now dependent on irregular migrants a legal alterna-
tive. Finally, the bill included three earned regularization programs for agricultural workers,
people brought to the United States as children, and other irregular migrants, respectively.
Each offered a path to legal permanent residence and citizenship for those who qualified. They
could earn permanent residence by demonstrating they paid back taxes, maintained employ-
ment during the qualifying period, had knowledge of the English language and U.S. history,
and had committed no criminal acts. The legislation is currently stalled in the U.S. House of
Representatives, mostly because of disagreements on whether regularization should provide a
route to citizenship.
Applying an integrated approach, combining restrictive border security measures with the
opening of legal access channels, is a better way to achieve migration management. Europe
Ideas for Europes New Leadership 57
and the United States could learn from each other which elements of this strategy work and
which still need improvement.
Reforming the Asylum System
Since 1999, the European Union has been working to create a Common European Asylum
System (CEAS), which was finally endorsed by the European Parliament in 2013 after lengthy
debate. The aim was that asylum should not be a lottery; asylum cases should be processed in
similar ways in each member state, with similar outcomes and similar reception standards.
9

However, there are indicators that these goals have not yet been achieved. There are still
dramatic regional variations regarding access to the asylum system, the number of asylum
seekers, the standard of their reception conditions (e.g. their housing and living conditions),
acceptance quotas, or the length of asylum procedures. Some countries are disproportionality
affected by asylum claims and their infrastructure to process such claims is overstretched.
Reception centers are overfilled, sanitary conditions are inadequate, asylum seekers are
detained or have no access to the asylum system, and vulnerable groups like women or unac-
companied minors are unprotected. In some countries, reception conditions in general (food,
education, health care, language training, and access to employment) do not allow asylum
seekers to have a dignified standard of living while they are awaiting a decision on their appli-
cations.
10
This needs to be corrected. Firstly, there needs to be more convergence of national practices,
a similar standard of how to access the asylum system or similar reception conditions. A
concrete roadmap and increased practical cooperation among member states should make
sure that implementation results in equal standards in the asylum process. The European
Commissions oversight here is key. It should continue to closely monitor the progress via the
European Asylum Support Office (EASO) fostering cooperation and information-sharing
among the national asylum authorities.
Secondly, the unequal distribution issue needs to be solved. The Dublin Regulation reinforces
it. An open debate about burden-sharing is needed and potential new and fair mechanisms
for processing asylum applications across Europe should be discussed. For each member state,
an annual acceptance quota could be set, taking several aspects into consideration: popula-
tion size, economic power (share of member state of the total EU gross domestic product), the
9
The legal basis for CEAS was created through two regulations and three directives, all of them recently revised and updated (Dublin
Regulation, the EURODAC Regulation, the Asylum Procedures Directive, the Directive on Reception Conditions, and the Qualification
Directive).
10
There are numerous first-hand reports on the inadequate conditions in refugee camps and detention centers by local NGOs, refugee
relief organizations, and international aid organizations who are working on the ground, see for example Refugees Daily, published by
UNHCR.
The EU public might
be more ready for a
reformed system of
burden-sharing than
officials anticipate.
The German Marshall Fund of the United States 58
Migration is not only a
domestic policy issue.
It needs to be linked
to questions of foreign
policy, security policy,
and development
with migrant-sending
regions or countries.
geographical size of the member state, and its unemployment rate. In order to consider short-
term economic fluctuations, a multi-year average value could be calculated.
11
Policymakers should not shy away from this discussion. The EU public might be more ready
for a reformed system of burden-sharing than officials anticipate. In light of the Arab Spring
and other happenings in North Africa in 2011, GMFs Transatlantic Trends public opinion
survey found strong majorities in all countries polled in Europe agreeing that responsibility
should be shared by all countries in the European Union rather than borne solely by the
country where migrants first arrived (80% of respondents agreed).
12

Interestingly enough, despite receiving the largest number of asylum applications among
developed countries,
13
asylum has not been as heated an issue in the United States as it has
been in Europe during the past two decades. The U.S. government took steps in the mid-1990s
to reduce abuses in the asylum system while expediting approval of meritorious claims. Faced
with a backlog of about 450,000 cases, asylum reform aimed at speedy adjudication of all cases
(within six months of application, including administrative appeal); bars work authorization
for asylum applicants; and improved training for asylum adjudicators. New cases were heard
in order first to deter applications with no merit. Within months of implementation, the
number of asylum applicants was cut in half and the proportion of approved cases doubled.
Approvals among those cases that are adjudicated have remained high relative to those seen in
other countries.
14
While criticisms exist legislative and administrative barriers to approval
of bona fide applicants, a one-year deadline on applications, disparities from one asylum office
to another in approval/denial rates for applicants from the same country, and impediments
from asylum related to counter-terrorism measures the general relatively pro-migration
attitude of U.S. citizens has allowed the country to provide an open environment for migrants
to re-establish themselves. If at all, the public debate about asylum and refugees in the United
States is less about burden-sharing, but rather about issues like detention of asylum seekers,
deportation, and the adequacy of the asylum system to protect those who face threats of gener-
alized violence but not necessarily persecution if returned home, such as many of the Central
American children, who face threats of generalized violence but not necessarily persecution if
returned home.
11
Steffen Angenendt, Marcus Engler, and Jan Schneider, European Refugee Policy: Pathways to Fairer Burden-Sharing, German
Institute for International and Security Affairs (SWP) and Expert Council of German Foundations on Integration and Migration (SVR),
November 2013. Sweden, for example, accepted 154,000 asylum seekers between 2008 and 2012 and would only have to accept
42,000 according to this multi-factor approach. Belgium, Greece, and Austria also accepted twice as many as would have been
considered fair in this system. Some of the Eastern European countries, on the other hand, accepted far fewer asylum seekers than
they could have done according to the multi-factor system, e.g. Estonia 6,500 compared to de facto 230 or Latvia 7,400 compared to
de facto 690.
12
The German Marshall Fund of the United States, Transatlantic Trends 2011, Washington, DC, (www.transatlantictrends.org).
13
According to the UN High Commission for Refugees (UNHCR), about 83,000 asylum claims were filed in CY 2012.
14
U.S. data show that about 25,000 individuals were granted asylum during the fiscal year 2012 (Oct 2011-Sep 2012). In general,
about 60% of cases that are adjudicated are approved in the United States, but the number of cases closed for other reasons (for
example, because applications were made more than one year after entry) usually exceeds the number actually adjudicated.
Ideas for Europes New Leadership 59
Stepping Up Cooperation with Sending Countries
Cooperation with potential source countries of refugees and asylum seekers should be further
strengthened. Migration is not only a domestic policy issue. It needs to be linked to questions
of foreign policy, security policy, and development with migrant-sending regions or countries.
As an example, the European Union has already launched mobility partnerships with some
countries that emphasize commitments on mobility, visa facilitation, and readmission agree-
ments or taking back their own nationals as well as third-country nationals who transited
through that country. So far these partnerships were established case by case with interested
member states within the EU and with countries outside the EU such as Cape Verde and
Morocco. Negotiations are ongoing with Tunisia and Egypt.
Some see mobility partnerships as an innovative and sophisticated tool to a global approach
on migration, others consider them first and foremost as a way to secure Europes external
borders or as immobility partnerships.
15
Improvements should happen in the areas of
country selection, policy goals, content of the individual partnership, and communication
with the partnering EU countries. There are also not enough EU staff or other agencies to
properly coordinate, monitor, and evaluate the different work streams in the partnership. This
all should be addressed in the future to make the partnership a valuable tool and could also
serve as a model for the United States where apart from selected bilateral collaborations,
e.g. with Mexico migration policies are predominantly designed unilaterally.
Creating a Coherent Policy Approach
Europe does not need more legislation in the area of asylum and migration in the next five
years but more policy coherence. Most of the important legislation has been dealt with. The
focus should not be on more and new legislative initiatives, but rather on the implementation
of adopted European legislation. In particular, the link to development has to be improved.
The EU began to build a framework for migration policy, called the Global Approach on
Migration and Mobility (GAMM). Originally started in 2005, it looks at 1) management of
legal migration, 2) preventing and combating irregular migration and reducing trafficking
in human beings, 3) maximizing the development impact of migration, and 4) promoting
international protection of refugees. However, evaluations showed that while the GAMM
in principle is moving in the right direction, there is still room for improvement. It is not
intended to just secure Europes external borders. It also needs to provide legal pathways for
migration or visa facilitation something that Europe needs if it wants to remain competi-
tive in the years to come. For example, in the recast Reception Conditions Directive, it has
been pinned down that access to employment for an asylum seeker must now be granted
within a maximum period of nine months. This is a very tangible and concrete guideline and
it is now up to the member states to comply. To support that harmonization process, practical
cooperation between member states needs to be stepped up, to exchange experiences on the
15
Among them, The Migration Strategy Group on Global Competitiveness, a project by the GMF and partners, which questioned the
strictly positive assessments of mobility partnerships of the EU Commission. See Steffen Angenendt, Mobility Partnerships- the most
innovative and sophisticated tool of European migration policy? Migration Strategy Group on Global Competitiveness, The German
Marshall Fund of the United States and Robert Bosch Stiftung, May 2014.
Europe does not need
more legislation in the
area of asylum and
migration in the next
five years but more
policy coherence.
The German Marshall Fund of the United States 60
Facts are blurred by
misperception and
stereotypes.
practical implementation. Rather than adding new laws, migration and asylum need to be
mainstreamed as cross-cutting issues beyond domestic and migration policies. The European
Union could be a leader in linking migration and asylum issues into other policy portfolios,
such as foreign affairs, trade and economic policy, security policy, and social policy, as well as
the EUs neighborhood and development agendas.
16
The EU and its agencies could take this
inclusive approach on the next level and provide political guidance, grounded in objective data
and analysis, on migration and asylum issues that affect the member states in various ways.
It could also play a stronger role as an agenda-setter in the international arena of migration
policy and regional dialogues, for example at the Global Forum on Migration and Develop-
ment (with Sweden serving as the chair until June 2014, succeeded by Turkey).
Improve Communication with the Public: Facts Change Perception
In the United States as well as in Europe, policymakers are often faced with a lot of skepticism
toward migration policies. They are grappling with the task of conveying to the public both the
challenges, and the opportunities that migration has to offer. Facts are blurred by mispercep-
tion and stereotypes.
In 2008, a transatlantic public opinion survey by GMF
17
asked whether people think that there
are too many, a lot but not too many, or not many immigrants in ones country. At least
half of those polled in the United Kingdom (55%), Italy (51%), and Spain (50%) felt that there
were too many. They were followed by Americans, out of whom 48% felt that there were
too many non-citizens living in their country. Canadians (24%), Germans (28%), the French
(29%), and the Dutch (32%) were the least likely to say there were too many immigrants in
their countries. These four countries instead had pluralities or majorities answering that there
were a lot but not too many immigrants in the country.
But respondents overestimated the immigrant share of their countrys population. In Italy,
where the Istituto Nazionale di Statistica (National Statistical Institute) estimates that 6.5% of
the population are immigrants, Italian respondents instead believed that 23% of the popula-
tion are foreign-born, a 17-point miscalculation. Among those Italians who thought there
were too many immigrants in their country, the average estimate was even higher at 28%.
In 2010, and again in 2014 (see chart), the survey tested whether information would change
responses. To do this, some respondents were asked the question without any information,
while other respondents were given the official estimate of immigrants as a percentage of the
countrys population before being asked the question. Those who heard the official estimate
before answering were less likely especially in Greece and in the U.K. to say that there
were too many immigrants in the country. In Europe, the average percentage answering
16
The body of academic literature on the migration-development-nexus is huge and it has been increasingly recognized that migration
can be affected intentionally or not by interventions of development policy. Aid policies face a critical challenge to balance a focus
on poverty reduction with mitigating the conditions that produce refugees, while at the same time interacting more constructively with
migrant diasporas and their transnational practices. Development policies should therefore be coordinated and embedded within a
broader international migration policy framework.
17
The German Marshall Fund of the United States: Transatlantic Trends 2008 (and following editions in 2009, 2010, 2011, 2013),
Washington, DC, (www.transatlantictrends.org).
Ideas for Europes New Leadership 61
too many was 32%, with 38% of the U.S. respondents thinking the same. Among those who
received information, however, the figure dropped significantly: Only 21% in Europe and 21%
in the United States think that there are too many immigrants in their country. Facts indeed
changed perception.
What we learn from this is policymakers should therefore better connect with the public when
it comes to immigration issues. Communication should not be limited to information on legal
changes or statistical overviews, as is mostly is the case in the EU now. EU policymakers, for
example, could play a much stronger role in communicating facts and debunking myths about
migration in the European Union. The European institutions and agencies could take on a
much more prominent role as interlocutor on the national level, engaging much more proac-
tively in broader debates about migration, citizenship, security, and diversity in the European
capitals, and its obvious cross-cutting connections. Rather than being limited to negative news
surrounding Roma camps, tragedies of sinking refugee boats, and desperate would-be asylum
seekers in North Africa, EU institutions could foster a narrative about what migration really
means for Europe, its economic impact, or its responses to demographic challenges.
18
They
could provide the supra-national platform for informed debate and fostering open exchange.
Tanja Wunderlich, Astrid Ziebarth, and Susan Martin are senior transatlantic fellows at the
German Marshall Fund of the United States, each specializing in migration issues.
18
See also Elizabeth Collett, Facing 2020: Developing a new European agenda for immigration and asylum policy, MPI Policy Brief
Series, February 2013.
0
20
40
60
80
P
o
l
a
n
d
S
w
e
d
e
n
G
e
r
m
a
n
y
F
r
a
n
c
e
R
u
s
s
i
a
N
e
t
h
e
r
l
a
n
d
s
E
U
S
p
a
i
n
U
.
S
.
P
o
r
t
u
g
a
l
I
t
a
l
y
U
.
K
.
G
r
e
e
c
e
Not given percent
of immigrants
Given percent
of immigrants
P
e
r
c
e
n
t

Chart 1: Too Many Immigrants in Our Country
58
31
22
29
31
32
27
44
54
29
38
39
Q27a-b
24
29
17
9
34
15
21
28
21 21
19 19
9
17
OF F I CE S
Washington Berlin Paris Brussels
Belgrade Ankara Bucharest Warsaw
www.gmfus.org