WASHINGTON — Events in Tunisia and Egypt, and unrest across the Arab world from Yemen to Sudan, have shown that Western stability policies for the southern and eastern shore of the Mediterranean were built on sand. For Europe, they are also a severe indictment of European “neighborhood” policies toward the Arab world.

For about half a century, the European Union has tried to export socio-economic and political development to this adjacent region. The results have been, to put it mildly, exceedingly modest—particularly when compared with the impressive transformations the EU achieved in Central and Eastern Europe and even in the Balkans. On the other shore of Europe’s mare nostrum, however, the EU’s association agreements with individual Mediterranean countries (including Egypt) since the late 1950s, the Global Mediterranean Policy (1972 – 1991), the Renewed Mediterranean Policy (1991-1995), the Barcelona Declaration of 1995 establishing the Euro-Mediterranean Partnership, and then the European Neighbourhood Policy since 2003 were all meant to advance peace, stability, prosperity, and human rights, good governance, the rule of law, and democracy. The model for this co-operation was the CSCE/OSCE process in Europe, with its three major baskets of political and security issues, economics, and socio-cultural aspects, including human rights. Yet while the CSCE process played an important role in transforming Europe, the EU’s efforts in its southern neighborhood fell flat, despite considerable expense of effort and resources, both human and financial.

How could Europe get this so wrong? A key reason is that the EU (like the United States) ultimately valued stability higher than peace, prosperity, and respect for human rights and dignity. By supporting regimes that appeared to guarantee political stability, Europe sought to promote peace between Israel and the Palestinians, and between Israel and the Arab world. It sought to enhance its own security from Islamist terrorism by ensuring the security of the rulers not only from terrorist attacks, but also from their own restless populations. The EU also hoped to promote prosperity through political stability—that of the region itself, but also its own, through opening the region’s markets and ensuring security of oil supplies (a particularly important area of cooperation with Egypt).

But Europe did not recognize that this stability was precarious, that the advances toward peace and prosperity secured through cooperation with the established regimes were incomplete, distorted, and often empty. It relied on working with regimes that were bent on controlling the vibrant forces of civil society and political dissent, often brutally suffocating them in the process. Thus, the EU’s Country Strategy Paper 2007-2013 for Egypt, while identifying much of what was wrong with Egypt, recommended addressing all those problems by working with the Egyptian authorities—including on improving the human rights record, on overcoming corruption, as well as on making progress with democratic reforms, rule of law and good governance. The ambivalence of this approach is illustrated by sentences such as this: “EU assistance will be targeted at strengthening the culture of respect for human rights and fundamental freedoms, and the capacity and effectiveness of all competent institutions, including the security apparatus and the police.”

If Europe wants to make a difference regarding the festering problems of a rapidly growing, well-educated, and sophisticated generation of young people who are deprived of their future by their rulers, Europe will have to engage with, and contribute to, civil society activities and forces in the Arab world directly—not mediated through the authorities. Above all else, this will require a better understanding of what is happening in these countries on the ground, and not only in the palaces. (The cables published by WikiLeaks suggest that U.S. diplomacy may have been rather better at this than the Europeans—though perhaps we need Europe’s cables leaked, too, to judge this fairly!)

Most importantly, Europe will have to take leave of a few deeply rooted but profoundly wrong assumptions about the Middle East—that the Arab world is not ready for democracy; that Israeli-Arab peace can be imposed on the Palestinians and the Arab peoples; and that political Islam is inherently unfit to participate in the political process, and therefore must be suppressed and excised, rather than integrated.

Hans Maull is a Senior Fellow at the Transatlantic Academy, on leave as Professor of Foreign Policy and International Relations at the University of Trier, Germany. This Transatlantic Take will also appear in the weekly DIGEST of www.deutsche.aussenpolitik.de

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WASHINGTON – Been there, done that. President Hu Jintao can be pleased with himself. His second and, presumably, last official visit to Washington went smoothly (no “Republic of China” national anthem played by the Americans on the White House lawn this time!). And his trip can plausibly be presented as moderately successful. For now, at least, the summit has stabilized the most important relationship in the world. Yet 2010, with China’s rude display of assertiveness in the South China Sea and its continuing support for North Korea, also clearly demonstrated how brittle the U.S.-Chinese relationship still is, and how much of a problem that constitutes not only for the two, but also for the rest of the world.

Former U.S. National Security Advisor Zbigniew Brzezinski got it right: the most worrying aspect about the state of the U.S.-Chinese relationship is its failure to address the broader problems of an increasingly unstable, turbulent world. Both governments, driven by their respective domestic constituencies, already have enough difficulties managing their bilateral problems, from currency revaluation to the conventional military arms race. There is simply not enough serious time and energy left  for issues such as nuclear non-proliferation in Iran and on the Korean peninsula, global warming, or reform of the world economy’s increasingly shaky institutional foundations. This failure to deliver on issues of global governance risks turning the relationship into a “lose-lose” situation—both America and China are likely to suffer if any of those global challenges seriously get out of hand.

Where does that leave Europe? The European Union does not have a bilateral relationship with China, but 28 such relationships. Each of the 27 EU member countries has its own China policy, as does the EU, which for years has been trying to develop a “strategic partnership” with Beijing to engage at eye-level and on all important issues of  international relations, including security. Those efforts have led nowhere, and it is time to recognize that the EU relationship with China is basically economic, and not much else. One only need compare the international visibility and the substance of Hu’s meeting with U.S. President Barack Obama last week with the most recent EU – China summit (the 13^th) in Brussels in October 2010 to see why this is so. In dealing with China, a large part of the international agenda today is political and even military, and Europe simply is not relevant in that sphere. This is different with economic issues, of course — European trade and foreign direct investments with China in 2009 were significantly larger than those of the United States, and they have also grown (even) more rapidly over the last decade than trade and investment between China and America. On those issues, moreover, the European Union does speak with one voice: Brussels’. The economic agenda of the two summits in Washington and in Brussels also looked remarkably similar; the European Union and the United States were both pushing China to let its currency rise, to remove barriers to its market, and to protect the intellectual property rights of Western companies.

Brussels has not been too successful so far with its economic agenda with China, but neither has the United States. The fact is that Chinese foreign economic policies are mostly shaped by China’s own agenda. What both Washington and Brussels can do—and the more they do so in a coordinated fashion, the more effective they will be—are basically two things: they can use access to their markets and their economic resources as levers to establish a level playing field and secure reciprocity, and they can persuade China to change its practices if and when those changes will be mutually beneficial. On this, the Europeans actually have been doing better than the United States. The EU has established a highly institutionalized framework for its economic dialogue with China, including not only regular summit meetings, but as many as 50 working groups with the Chinese on a wide variety of issues, ranging from intellectual property right protection to rule of law and human rights. Those working-level exchanges are important and valuable, as they offer opportunities for both sides to learn and to develop new approaches.

Beyond those modest but useful activities, however, the search for a strategic partnership between Europe and China should be abandoned. It is based on the pretence that all 28 European China policies can be aligned. That is quite unlikely to happen, for the simple reason that member state interests in China are, first, primarily economic and commercial and, second, divergent and often competing. If the EU really was serious about developing a common foreign policy (and it should be!), then it would focus on other, more promising issues than its relationship with China. The EU actually has been moderately successful in forging common policies on two important global challenges—taking a stronger role on nuclear non-proliferation (Iran) and on climate change, in particular. It.; should build on those successes and develop them further. To the extent it will succeed, it will also be able to strike a meaningful and balanced political (even “strategic,” if you like) relationship with Beijing, because the EU would then be taken seriously in Beijing. So far, it is not.

Hans Maull presently is a Senior Fellow at the Transatlantic Academy, on leave as Professor of Foreign Policy and International Relations at the University of Trier, Germany. This Transatlantic Take will also appear in the DIGEST of www.deutsche.aussenpolitik.de

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WASHINGTON — News of its immediate demise is premature: the euro is here to stay, for two very simple reasons. First, no member country can be forced out of the eurozone, and none will choose to leave voluntarily. The consequences would be disastrous — for that country itself, but also for others across the globe. Any government contemplating leaving the eurozone would confront immediate and massive costs, with uncertain gains at best. None of the present member countries, not even Germany, could be reasonably confident that it would be better off on its own in this world of turbulent financial markets.

Second, European governments and European institutions are working on the eurozone’s problems, both individually and collectively. Portugal, for example, has passed no less than three austerity programs last year, including tax increases, across-the-board cuts in public sector compensation, and a public sector pension freeze. In Ireland, public sector pay has been slashed by 20 percent. Greece and Britain have also undertaken reforms to reduce government deficits. Germany has introduced a brake on public sector debt to its constitution.

The European Union is also taking collective steps to deal with the problems. Fortunately, the eurozone actually has an independent central bank with excellent leadership, which so far has been remarkably successful in managing financial market turmoil. Perhaps most importantly, however, there has been, after some initial fumbling, strong political leadership from Germany, most of it pushing in the right directions, namely:

German leadership has been, and will continue to be, crucial. Not only is Germany the most obvious candidate for such leadership, given its economic weight and its performance in the past. It also happens to be in a particularly strong position right now; German export industries are booming, and the economy has begun to steam ahead not only on the basis of its exports, but also fueled by domestic consumption and investment. It is thus beginning to help pull other European economies; the most recent trade data show that imports from other EU countries are growing more rapidly than German exports to them.

To recognize that there has been significant progress on reforming the eurozone is not to say, of course, that all problems have been solved. There are two important caveats. The first is the need for new growth perspectives for Ireland and the Southern periphery. Policies of fiscal belt-tightening alone are self-defeating, as lower growth will undermine the prospects for fiscal correction, no matter how hard governments try (and their electorates would be unlikely to allow them to try very hard for very long). Fiscal belt-tightening will therefore have to be complemented urgently with policies that promise growth.

The second critical ingredient is political. The dimensions of the problem are such that they call for a redefinition of politics and the articulation of new visions for the future of European societies. This task needs political leaders who are willing and able to explain their policies persuasively to their electorates, in Germany as in Greece, in Spain or in Italy. Yet here, too, there are some hopeful signs.

As a result, the eurozone and the European Union as a whole are presently moving in the right direction. And by wrestling with the issues in their own, messy, and typically European way, Europeans are arguably just ahead of the pack. The United States, Japan, or China assume that they will be able to cope with their problems by relying on sovereign national policy efforts.  Yet China holds close to $2 trillion worth of U.S. debt, much of it in the form of treasury bonds.  It is thus easy to predict that at some point in the not too distant future, China will insist that the United States deals with its debt problems responsibly or face consequences. In fact, China and the United States, when dealing with debt and macroeconomic policy interdependence, confront structural tensions at a global level not unlike those tying Germany to Greece, Portugal, Ireland, Spain, and Italy within Europe.  In both instances, excessive levels of debt have been allowed to accumulate by a politically convenient combination of reckless borrowing and imprudent lending. Now they must be reduced through a mixture of fiscal discipline and conditional credit supply.

Those problems cannot be resolved simply by central banks that print money and call their actions “quantitative easing.” European economies are at least beginning to face the need to go beyond national solutions; others are still assuming that adjustment can be postponed behind the shield of national sovereignty.

Hans Maull is a Senior Fellow at the Transatlantic Academy, on leave as Professor of Foreign Policy and International Relations at the University of Trier, Germany. A longer version of this Transatlantic Take will be published at this week’s DIGEST at www.deutsche.aussenpolitik.de

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