CIAO DATE: 11/04

The State of the European Union

H.E. Ulrik Federspiel
The Ambassador of Denmark to the United States of America

Occasional Paper Series No. 50

February 6, 2003

European Union Studies Center

Thank you very much for the kind introduction and thanks to you Professor Kaufmann and the City University of New York for inviting me here today to speak about the state of the European Union.

I do not speak without some hesitation – two weeks after President Bush gave his State of the Union, it may be a little unfair to ask me to present my European version.

Because, first of all, there is no European equivalent to the President’s State of the Union speech – because there is no European President. Some might add that there is no real Union either.

Secondly, if we had had a State of the Union speech, it would certainly not be given by an ambassador to the United States.

Thirdly, we don’t have the traditions surrounding the State of the Union speech, not even the drinking game. And I don’t expect 73 standing ovations, just a nice round of applause, when I finish.

* * *

I am, of course, presenting the State of the European Union as a Dane. So, therefore, I will highlight some of my Government’s priorities, some of the corner stones that my government is working on.

What are they? Well, strong international institutions are, of course, of crucial importance, especially for a small country. So, not surprisingly, we want a strong EU, but equally a strong transatlantic partnership represented specifically by NATO. We also want to face up to the challenges of the future, which we believe will be, among other things, our relationship to the Middle East, the Greater Middle East, and the Islamic world in general.

In my comments today, I will touch upon all these problems as they relate to the State of the Union.

1. First the Union itself. The State of the European Union is healthier than ever – so says every American President in his State of the Union. So I will say likewise. And there is some truth to it.

After centuries of war and bloodshed, European integration was initiated with the coal and steel community. The two industrial sectors most decisive to the armament industry. Next came a customs union, a trade policy, and a common agricultural policy to provide food security after the war.

In the 1980’s and 90’s a truly internal market was created, as you know, by eliminating non-tariff barriers to internal trade in Europe and providing for free circulation of goods, services, capital and people.

But still economic integration was incomplete. Maintaining free capital movements called for a common monetary policy. Put very simply, the European Single Market required a single European currency and at the beginning of last year the single currency became a day-to-day reality. This is indeed a unique feature. There is no other historic precedent of sovereign countries deciding voluntarily to establish a common currency and monetary policy.

Economic integration has in recent years been supplemented by closer foreign policy cooperation between the European countries, including the development of a common European Security and Defence Policy.

Thus the European Union has gradually come into being.

Last December in Copenhagen, the European leaders made the historic decision to expand the West European area of stability and prosperity to the East. To heal the European continent. To enlarge the European Union by 10 new Member States: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia.

They will join in the spring of 2004.

Bulgaria and Romania were given the goal of joining in 2007.

As far as Turkey is concerned, it will under certain conditions be able to open accession negotiations in 2004.

As my Prime Minister, being the Chairman of the EU, said at the completion of the complicated negotiations on enlargement in Copenhagen, “This is indeed a historic moment and a day to remember. For the people of Europe. And for the whole world.”

During the latter half of last year, when we had the Presidency, the EU was also in other ways able to demonstrate its viability.

On transatlantic issues, e.g.:

• The fight against terrorism was increased in different ways, including a signed agreement between the EU and US on strengthened cooperation in law enforcement and significant progress on another

• On several transatlantic trade disputes

• Good cooperation on the Johannesburg Summit on sustainable development

• On Afghanistan, where the EU has pledged to deliver more reconstruction assistance than the US

And on internal issues, e.g.:

• Common rules for processing of requests for asylum

• Full deregulation of the EU electricity and gas markets

• Break-through for EU transport policy as Single Open Sky

* * *

At the same time as we face the issue of unification of Europe, we face the challenge of designing the EU to face its future responsibilities. What should be the tasks and objectives of the EU? What should be the responsibility of the Member States? How do we organize the work in a Union of 25 or 28 countries?

These issues are now being discussed in the European Convention. Many of the questions facing us are similar to the issues facing the Convention in Philadelphia in 1787.

Others are different:

— US at the time had about 4 million inhabitants and the 13 states had existed merely 11 years. The EU comprises 378 million people today and 460 million in 2004 after the enlargement, and nation states that go back millennia. Countries that have worked together within the EU for almost 50 years.

— On some of the issues that led to the Philadelphia Convention, the EU already has competency. Most notably the regulation of commerce. On civil rights we have established the European Charter of fundamental rights. But the charter has not yet been enshrined in our basic treaty.

— On other issues, the US was more integrated than the present EU. The Articles of Confederation conferred on the Congress the authority to conduct the foreign policy, including the power to go to war and to make peace. These are authorities that still rest with the member states of the EU and are likely to continue to do so. I will come back to this question.

— Furthermore, the internal differences in the US in the late 18th century were not related to “nationalities”, but rather to differences of interest between the small farmers in the interior of the country and the manufacturing industry and the plantation owners along the Atlantic Coast. In Europe, many of the lines are between the nationalities. But also – as in the US – small versus large countries/states.

Yet the core questions of the two conventions are very much the same. The division of power between the union level and the state level. The strife between Federalists and anti-federalists. A Confederation or a Union. The protection of the individual rights. The authority to collect taxes.

The Danish position is clear: We want the EU to be a community of nation states. But it should be a strong community in which the Member States have decided to carry out a number of tasks together by leaving the competence to the EU. This strong community of nation states must have the political and economic strength to act at the international level, thus influencing the world with the ideas on which the EU is based.

The enlargement of the EU makes it more imperative – and easier – to realize this vision. But the enlargement also demands changes and reforms of the EU.

The crucial question is: What should be the tasks of the EU?

First and foremost the areas with problems of a cross border nature. In the first instance, this naturally means the traditional main tasks of the EU. In the future, key areas will include, the internal market, trade policy, competition policy and state aid control. Ensuring the efficient functioning of the internal European market: Commerce. The same issue that the Philadelphia Convention conferred on the federal level.

The environment is another traditional example of a transnational task. Pollution knows no borders. We need a strong EU to fight pollution. And we must continue to develop and improve European environment cooperation.

The Common Agricultural Policy will need reforming in the years to come. Subsidies must be reduced. And markets must be set free.

The EU must strengthen its internal (homeland) security through cooperation concerning refugees and immigrants and the fight against terrorism, international crime, and illegal immigration.

The pressure on Europe will grow in the coming years. These problems are by definition transnational in nature, and they can only be resolved by intensified cross-border cooperation.

Second, there is a need to strengthen the Common Foreign and Security Policy. But, not at the expense of transatlantic cooperation. On the contrary. EU has a vital interest in close and strong cooperation between Europe and the USA. But at present, the western world is faced with challenges that make it necessary for Europe to stand on its own feet to a higher degree than before and make its own contribution. This is not only in our interest, but also in the interest of the US.

From the point of view of a small country, the ideal would be for foreign and security policy to be a common EU matter. Like in the US. This would bind the large countries to a common line. And the smaller countries could gain greater influence on the international scene.

But let us be realistic. The large countries will not give up their national sovereignty in foreign and security policy. Can anyone imagine that France and the United Kingdom, for example, would give up their permanent seats on the Security Council of the United Nations for a joint EU seat? I seriously doubt it, and I will return to this question later in my remarks.

Therefore the point of departure must be that the foreign, security, and defense policies of the EU continue to be based on cooperation among the Member States, so-called intergovernmental cooperation. Unlike the US.

The European Convention is now debating a framework for a new Constitutional Treaty. A Treaty because it is obvious that the EU must continue to be a binding cooperation among states. The EU is based on and derives its legitimacy from the nation states of Europe. The EU is and must continue to be a forum of cooperation among independent nation states. More like a confederation.

Much of the work in the European Convention is, however, related to reforms of the EU institutions.

Institutional reform is of course of great interest to the press, as by its nature it entails obvious conflicts of interest. I will not go into detail with the Danish ideas, but just stress that they build on three fundamental principles:

First of all, an overall result must respect the balance between large and small countries. If attempts are made to upset this balance, there is a risk that the EU will fall apart.

Secondly, the balance between the three key institutions – the European Parliament, the Commission, and the Council – must be preserved. We must maintain a system of checks and balances between the institutions.

Thirdly, the solution must be effective and transparent. The solution we arrive at must be workable and comprehensible.

Denmark has proposed

• o provide the President of the EU Commission with a stronger public mandate, having the President elected by a special electoral college, composed of members of both the European Parliament and national parliaments.

• to reform the work of the Council. As point of departure this may be achieved by updating the existing rotation scheme for the biannual Presidencies. However, we should open-mindedly consider more far-reaching models, for example an elected President of the European Council. In this respect, built–in safeguards will be necessary to ensure equal treatment of countries, large and small.

2. Our work on internal household issues should not let us forget the rest of the world. For the last ten years, our major foreign policy objective has been the enlargement and successful reintegration of our Central and Eastern European neighbors.

With the decision on EU enlargement, as I touched upon earlier, Europe has closed an important and in many ways tragic chapter in the region’s history. But the end of the Cold War and the reunification of Europe is not only a victory for Europe: It is just as much a victory for the transatlantic relationship – together we fought the Soviet empire, together we won a more peaceful and stable world.

Unfortunately, we cannot rest on our laurels – new challenges have emerged. The question is whether we – once again – are ready to face these challenges together?

Many people will tell you that the state of the transatlantic relationship has never been worse than now. From my many years in this business, I tend to be a little skeptical towards this argument – I remember the same being said in the early years of the Clinton Administration as well as during the heydays of the Reagan Administration.

And that is just recent history. Although I do not personally remember the early days of the American republic, it is well known that mutual suspicion and contempt over the Atlantic was not uncommon. John Adams once said about the French foreign minister Vergennes that France would only act in self-interest, and that Vergennes’ America-policy was ”to keep his hand under our chin to prevent us from drowning, but not to lift our heads out of the water”.

However, I understand if people get the impression that even between this old couple, things are grumpier than they used to be. I admit that America-bashing is highly in vogue in Europe at the moment. Hardly a day has gone by in recent weeks – except maybe yesterday – without a new statement from a European government criticizing the Administration’s policy on Iraq or a new poll showing widespread popular discontent with US policies.

Demonstrations against war have taken place in Europe, where the American President is often caricatured as a cowboy ready to pull his six-shooter. Opinion polls show that the large majority of Europeans opposes any action against Iraq that is not based on a clear UN mandate.

This development is unfortunate, but what is just as worrisome is the fact that Euro-trashing is on the rise in the US. I have been the Danish ambassador to the United States since May 2000, and I have noticed a remarkable change in tone, most notably since 9/11.

To give a few examples: Americans are from Mars, Europeans are from Venus. Or: The US is the sheriff while Europe is the saloonkeeper ready to buy the outlaw a drink after he shot the sheriff. Or: The United States making the dinner and the Europeans doing the dishes and paying the bill. Or the repeated listing of Europeans being weak, disunited, anti-Semitic and indecisive.

According to the commentator Robert Kagan, who came up with the Mars and Venus analogy, Europe has moved into “a Kantian world of perpetual peace” whereas the US uses its power in the dangerous, Hobbesian world outside Europe. Kagan explains this development on the basis of Europe’s tragic historic experience with endless wars and “machtpolitik” – and because Europe – according to him – is really just too weak today to exert this kind of power.

It is true that Europe has replaced the use of military might with trade, investments, assistance, and peaceful cooperation. We prefer diplomatic solutions, and are maybe somewhat more reluctant to use power than the United States. But, as the Gulf War and the military operations in the Balkans during the 1990’s have shown, we are ready to use force as a last resort.

I have wondered, therefore, why these strong differences of opinion seem to have emerged after 9/11.

After all, European support to the US after 9/11 was bigger than ever. We had manifestations of support to the United States in Copenhagen that were the most overwhelming since the liberation from the German occupation in 1945. Even the French newspapers – notorious for their anti-Americanism – claimed in a reference to Kennedy’s famous Berlin-speech: “Nous sommes tous des americains” – we are all Americans.

What happened? I would argue that we still agree on most matters, and polls have shown this. However, there tends to be a pattern of disagreement whenever it comes to the Middle East.

On the government level, we have sought with some success to cooperate on what was formerly known as the Middle East Peace Process, most notably through the Middle East Quartet. As EU Presidency, Denmark played an active role in this group, especially in the drafting process of the so-called Road Map. However, it is no secret that the EU had preferred to finalize and make public the Road Map already at the Quartet meeting in December.

Moreover, the populations of Europe and the US tend to be very far apart in their attitudes towards the Palestinian/Israeli conflict – a gap that has developed further over the last year, as demonstrated in extensive polls taken by the Chicago Council of Foreign Relations and the Marshall Fund as well as the Pew Centre. The Arab-Israeli conflict is the subject that divides us the most. Whereas the American public seems to have identified itself more with Israel, the European public appears to have drawn the opposite lesson. And I do not believe that accusations of anti-Semitism really explain this phenomenon.

However, our disagreements on the Middle East Peace Process are small compared to Iraq, if that is any comfort, where both the populations’ and some governments’ positions seem to be very far apart.

I say “some”, because there is no unified European position on this. And this illustrates what I was mentioning earlier about the difficulty in trying to formulate a Common Foreign and Security Policy.

As some of you may know, eight European heads of state and government last week publicized a joint letter in which they sought to put the Iraq-crisis into a greater perspective. Among them was the Danish Prime Minister.

The letter was a strong sign of solidarity with and support of the United States. It gave a clear message: Iraq must disarm, support of UNSR 1441 and respect for the UN Security Council as the central organ where this issue should be discussed.

There has been a lot of internal debate in Europe after the letter – primarily focusing on whether it highlights and maybe even furthers the existing divisions within the Union. Some people – like your Secretary of Defense – might even read into the letter a clash between “Old Europe” and “New Europe”.

That is not the way my government sees it. We consider the letter a call for unity and solidarity – both across the Atlantic and within the EU. The letter did not promote any new messages – just the conclusions that the EU had already agreed on.

Letter or not, it is obvious that the debate over Iraq has shaken the transatlantic relationship. This is a shame. We should not let an issue as crucial as this one divide us – that’s just playing Hussein’s game.

Even if, as I said earlier, that I was skeptical about the arguments made by some, that EU/US relations generally had never been worse than now, I am deeply concerned about the Iraq debate. And my worries concern this issue’s influence on the structure of international relations, especially the international institutions.

As I said earlier, Denmark and the EU attach great importance to strong international institutions.

But the debate in NATO, in the EU and in the UN concerns me.

After 9/11 we in Europe complained that the US did not involve us enough. Now the US is doing just that, trying to involve NATO. But what is our answer? No answer. We cannot even agree on prudent contingency planning and supporting Turkey. So individual countries are making their preparations with the US, including my own country. And, of course, the ESDP is not even operational yet, even if it should have been the case as of January 1st this year, so the EU is also for this reason incapable of playing a role. This is even more conspicuous in the UN Security Council. Here we do not have a voice, and will probably never have one, for the reasons I mentioned earlier.

As far as the UN is concerned, we are also at a defining moment here. The United States’ relationship with the UN has, of course, always been somewhat ambiguous. But having paid its dues, re-entered into UNESCO, and chosen the Security Council in the Iraq crisis, it would be very unfortunate if the US felt that we betrayed the UN by not adhering to 1441.

Therefore, we must all stand together to protect the UN system. If we fail, I am afraid that the United States, its Administration, its Congress, and its people will in the future turn away from the United Nations system, and perhaps more generally from international organizations.

So, let us cooperate across the Atlantic.

We saw how the Cold War brought Europe and the US together. Let us not now have disagreement over how to fight terrorism in the Middle East pull us apart. On the other hand, let it unite us.

* * *

3. The Middle East – Iraq, the Palestinian/Israeli conflict, Saudi Arabia – has been high on the agenda in the United States since 9/11. But it has been maybe even more so in Europe, where the threat of Islamic fundamentalism is very present – you have to remember that the Middle East is our backyard.

Because of our closeness to the Middle East, developments in the region influence us in political, economic, and security terms. Politically, a growing number of Muslim immigrants from the region assume a political role – i.e. in France, where six percent of the country’s 60 million inhabitants are now Muslim. Economically, the Middle East constitutes a huge potential market for Europe, just as the oil prices obviously are of great importance to us. In terms of security, our closeness to the region means that spillover effects from the region in case of conflict are huge and could result in waves of refugees, terrorist activities, and other causes of instability.

And, as you know, the risk of instability is not insignificant. Although the region has in certain respects experienced some progress over the last three decades, it is still plagued by fundamental structural problems that serve as barriers to growth and the elimination of poverty.

Analyses tend to point at four reasons for this: 1) Lack of political freedom, 2) the limited involvement of women in society, 3) dysfunctional education systems that impede the populations’ ability to compete in the global economy and 4) the fact that there is very little economic integration in the region and trade among these countries.

I am not saying that there is a direct linkage between poverty and terrorism. Other regions of the world experience extreme poverty without fostering terrorism. It seems obvious, however, that the unhappy economic conditions in the Middle East – which has the highest unemployment rate among developing countries – risk creating a breeding ground for extremism and fundamentalism when abused by the wrong kind of people.

Many of the challenges can only be dealt with by the region itself. But, the US and Europe also have a role to play. Together, we should play a catalyzing role – help the countries help themselves.

In a recent article by two American scholars, Ron Asmus and Ken Pollack, it is suggested that a new transatlantic project should be to address the root causes of problems of the Greater Middle East.

This is the strategic challenge of our time. To cite the two, “The most dangerous threats to both American and European security emanate from beyond Europe. The greatest likelihood of large numbers of Americans and Europeans being killed no longer comes from a Russian invasion or even ethnic war in the Balkans. It comes from the threat of weapons of mass destruction, attacking our citizens, our countries, or our vital interests abroad”.

Europe and the United States should stand together and face this threat, just as we did after World War II.

I believe that Europe and the US can both learn from each other’s strengths in such a process. While military pressure might be necessary in some respects, it cannot solve all of the region’s problems. Hence, maybe Mars could learn something from Venus in terms of fostering democratic regimes, creating civil societies and channeling economic assistance to education programs, gender projects, small business funds, and human rights assistance. Or to cite Asmus and Pollack again, “Regime change cannot only mean getting rid of the current set of bad guys. It must also mean a long-term commitment to ensuring that the right kind of successor regimes follow in their wake.”

Before you attack me in the Q&A-session I want to pre-empt some of your questions by saying that it could seem like a mission impossible to choose the thorniest issue in the transatlantic relationship as our primary area of cooperation.

To this I will say three things: 1) After 9/11 we cannot afford not to have a common strategy of these issues, 2) I believe our differences over Middle East Policy are more tactical than strategic – we all wish to see the same outcome, 3) past EU/US-differences didn’t prevent us from winning the Cold War.

Considering the immensity of the problems of the Greater Middle East and the War on Terrorism, none of us can confront this task alone–not even the US. The US can probably carry out a military operation in Iraq on its own – but what about the Day After? You will need our experiences, capacities and money. And for that, Europe would need to be included in the planning – not just do the dishes and pay the bill afterwards.

The challenge before us is not solved by doing something about Iraq alone. Much more must be done – real progress in the Middle East Peace Process, to mention one example. But, maybe more importantly, a more prosperous and democratic development of the Middle East should be the long-term goal.

Some American commentators argue that a liberated Iraq will inspire the rest of the region and lead to the fall of despotic regimes in other countries. A kind of positive domino theory, so to say.

I have no basis for assessing whether such a development would, indeed, take place. But even if it did, it seems that it would need some help on the way. It is in nobody’s interest to have a chaotic situation where all regimes collapse simultaneously with nothing to replace them but Islamic fundamentalists. There is still need for cautious, long-term support of the development of civil societies from which alternative, democratic political forces can emerge. We can help the peoples of the region to lay the foundation for achieving it. But it will be up to them to define it. They must take ownership of their future.

* * *

Let me conclude by saying that I have no doubt that we are facing one of those defining moments in history. After the collapse of the Soviet Union we have not yet been able to define a new world order. In Europe, we have spent the last 12 years healing the scars culminating with the EU and NATO experience and the Balkan crisis. And we have increased integration into more areas like the Euro. On all these scores we have been successful, just as the US has been economically successful in the 1990’s.

So the State of the Union is stronger than ever. But will it remain so?

Hamlet’s famous phrase, “To be, or not to be”. Yes, that is exactly the question. “To take arms against a sea of troubles and by opposing them end them”. If we live up to this challenge I have described today, a stronger and more efficient EU, a stronger transatlantic relationship, and a flourishing and democratic Greater Middle East, I have no doubt that we will be able to create a new world order with a strong structure.

In that way, not only the State of the European Union, the State of the transatlantic relationship, but also the State of the World will be healthier. And maybe the ugly duckling will become a swan.