Event Information

Register for the Event

With many national economies slipping back into recession and voters in Greece, France and the United Kingdom rejecting austerity measures in recent elections, the European political and economic landscape has shifted again. Europe now seems headed towards a revised social contract and a new round of negotiations to respond to the continuing financial crisis. The United States, while experiencing a mild recovery, also strives to find the right balance between fiscal consolidation and growth preservation—a mission made more challenging with the upcoming November elections. A new loss of confidence in Europe may well imperil the U.S. economy’s fragile recovery. Will similar anti-austerity political currents cross the Atlantic and bring "change" to the United States? Despite the crisis, transatlantic cooperation has increased during the Obama administration, but U.S.-EU relations will be subjected to critical examination during the election year.

On May 23, the same day European leaders will gather for an extraordinary summit in Brussels, the Center on the United States at Brookings (CUSE) and the Heinrich Böll Foundation hosted a discussion featuring experts and top officials from both sides of the Atlantic for the 2012 CUSE Annual Conference. Panelists explored critical issues shaping the future of transatlantic relations in a year of elections and political transitions, from the euro crisis and the future of NATO to relations with Russia, Turkey and the Middle East.

After each panel, participants took audience questions.

The event is available in full on C-SPAN »

Video

• NATO in Afghanistan: In Together, Out Together
• U.S. Has Enormous Stake in Euro Crisis
• U.S., European Allies United on Iran
• U.S. Will Move Forward with Russia on Areas of Mutual Interest

Audio

• Visions of Europe in an Election Year: Part 1
• Visions of Europe in an Election Year: Part 2
• Visions of Europe in an Election Year: Part 3

Transcript

• Intro And Remarks With Phillip Gordon (.pdf)
• Panel One Transcript (.pdf)
• Panel Two Transcript (.pdf)
• Complete Transcript (.pdf)

Event Materials

• 20120523_europe_visions_gordon_transcript_corrected
• 20120523_europe_visions_panel_one_corrected
• 20120523_europe_visions_panel_two_corrected
• 20120523_europe_visions_complete_corrected

       

       

       

       

       

       

Ordering Information:

• {9ABF977A-E4A6-41C8-B030-0FD655E07DBF}, 978-0-8157-2554-1, $28.00 Add to Cart

      

Event Information

Register for the Event
A Statesman's Forum with Federica Mogherini, Foreign Minister of Italy

On May 14, the Center on the United States and Europe at Brookings, in partnership with the Council for the United States and Italy, will host Italian Foreign Minister Federica Mogherini for an address on Italy’s foreign policy during a period of geopolitical turmoil. In her remarks, Mogherini will offer perspectives on recent developments on the frontiers of Europe and explore how Italy and the U.S. can work together, along with the European Union and NATO, to address the ongoing challenges in Ukraine, the Mediterranean and beyond.

Federica Mogherini has been minister for foreign affairs since February 2014. She was previously a member of the Foreign Affairs and Defense Committees of the Chamber of Deputies and chair of the Italian Delegation to the Parliamentary Assembly of NATO. She has been active in promoting nuclear disarmament in the Italian parliament, including a successfully adopted resolution supporting the nuclear disarmament visions and plans of President Obama and U.N. Secretary General Ban Ki-moon.

Brookings Acting Deputy Director for Foreign Policy Steven Pifer will introduce Minister Mogherini. Michael Calingaert of Brookings and the Council for the U.S. and Italy will moderate a question and answer session at the conclusion of the minister’s remarks.

Join the conversation on Twitter using #Mogherini

      

According to multiple press reports, European Union leaders are poised to choose Italy’s Foreign Minister Federica Mogherini as the EU’s next foreign policy chief at a summit on Saturday. A previous summit to discuss the position ended in deadlock in July when the Baltics and several Eastern European states objected to Mogherini due to concerns that she was too soft on Russia and lacked foreign policy experience, as she has only been in her position since January.

Now decision day has arrived and Italy’s Prime Minister Matteo Renzi is determined to push her candidacy through even if some disagree. As one EU diplomat told the Financial Times, “You still have a group of countries who will be quite unsatisfied, but they don’t have a blocking minority.” In a comment that could have been made by Stringer Bell in “The Wire,” Italian Minister Sandro Gozi previewed this strategy in July, saying, “The possibility of a majority vote ... is part of the game and cannot be ruled out.”

This highly consequential foreign policy decision is being made on the basis of criteria that have nothing to do with foreign policy. No one claims that Mogherini is the best person to deal with Russia but asking who is is not seen as a relevant question. The sharing of the spoils of several top jobs between the parties means that it must go to a socialist and Europe’s socialist leaders want to help Renzi. There is pressure to appoint a woman because EU leaders have failed to nominate women for other top posts or for the rest of the commission. Merkel had concerns but she is apparently willing to let it slide if it means stopping Italy from diluting the EU’s budget rules. Others are doing their own deals. The bottom line is that foreign policy is almost entirely absent from the discussion.

In normal times, this would be a bit unseemly but not outrageous. These are not normal times however. It is easily forgotten in Rome and Paris but Russia poses a real and near-term threat to some EU members—Latvia, Estonia and maybe even Lithuania. These states have asked for more assistance and support from their allies in NATO and from other EU members. They are deeply concerned by Mogherini’s nomination. Italy has strong economic ties with Russia and has frequently opposed tougher sanctions. Mogherini’s visit to Moscow early this year and her language of respecting Russian interests raised concerns about exactly what those interests are and whether she understands where the fault lies.

In a clear reference to Mogherini, Lithuania's President Dalia Grybauskaitė said that the EU must not pick someone who is “pro-Kremlin”—an exaggerated charge, perhaps, but indicative of the sensitivity and concern her candidacy has caused. But above all is the view that others are better qualified to deal with the Russian challenge—not just in terms of years clocked on the foreign policy beat but in the substance of what they say and do about it. Carl Bildt, Sweden’s foreign minister, is a leading example. Polish Minister of Foreign Affairs Radek Sikorski is another. Bulgaria’s Kristalina Georgieva, currently EU commissioner for humanitarian aid, would be a good compromise candidate.

One would think that the views of these member states would be taken extremely seriously by the rest of the EU. Instead, isolating and defeating them is just another “part of the political game.” Needless to say, this is not a game. It is the most serious security threat Europe has faced in over two decades. Two hundred and twelve EU citizens were killed by a Russian missile fired by Russian backed separatists in July. Thousands have died in Ukraine as a result of the war Russia started. And in recent weeks, Russian forces have begun a formal invasion of Ukraine.

It is mind-boggling that in a week when Russia opened a third front in Ukraine, European leaders are even considering appointing anyone other than someone with a proven track record of understanding and meeting Russia’s challenge, let alone a person who has consistently underestimated the risk. It’s as if a climate skeptic from the oil industry was to be appointed as environment minister.

It is true, of course, that the foreign policy chief, whoever he or she is, will not make EU policy. That will continue to be the domain of individual member states, especially Germany. But appointing the wrong person will do no good and may do some harm. Appointing the right person could serve the purpose of rallying the member states, pressuring them to stick to their previous declarations, and being a powerful voice for Europe’s values and its interests in a peaceful and free continent.

The EU owes it to its own citizens to make a decision of this magnitude solely on foreign policy grounds. It should not sell out the Baltics to keep the gravy train flowing. This is no time for business as usual.

      

In the three months since the EU-Turkey migrant pact came into force, the number of migrants arriving on Greek shores has dropped precipitously. But the number of migrants making the even more dangerous crossing to Italy has increased substantially. After months of chaos, Rome—having adopted a variety of measures in partnership with European authorities—is now much better prepared than last summer to deal with a new migrant surge. But, despite its efforts, Italy—like its peers—cannot possibly cope on its own with a new wave of migration on the order of magnitude as the one witnessed last summer.

Yet that possibility is real. With almost 19,000 arriving from Libya in the first three months of this year, an EU-Libya migration compact is urgently needed. But for it to work, Europe as a whole must engage with Libya comprehensively and across policy areas. That will require time—and an interim solution in the meantime. 

Fewer arrivals in Greece, more in Italy

Notwithstanding its many flaws, the EU-Turkey deal appears to be working at deterring people from making the treacherous crossing from Turkey to Greece. Although weather conditions have improved, the number of migrants reaching Greece dropped by 90 percent in April, to less than 2,700. Syrians, Pakistanis, Afghans, and Iraqis made up the bulk of new arrivals, as has been the case for the last few months. Further north, along the Western Balkans route, the number of migrants reaching Europe’s borders in April dropped by 25 percent, down to 3,830. In this case, Macedonia’s de facto closure of its southern border with Greece clearly contributed to stemming the flow. 

With the Eastern Mediterranean and the Western Balkans routes sealed, the Central Mediterranean pathway presents new and worrying trends. In the month of April alone, 9,149 migrants arrived in Italy. As in the past, they were overwhelmingly from Sub-Saharan Africa (mostly Nigeria), many of them economic migrants unlikely to be granted asylum. For the first time since May 2015, more migrants are now reaching Italy than Greece. Many more are likely to have lost their lives trying to do so. 

For the first time since May 2015, more migrants are now reaching Italy than Greece.

Learning from past mistakes 

Italy is doing its homework. A revamped headquarters for the European Union Regional Task Force (EURTF) overseeing migrant arrivals across the Central Mediterranean opened at the end of April in the town of Catania. Five of its six hotspots—first reception centers fully equipped to process new arrivals—are now in place, with a combined reception capacity for 2,100 people and the involvement of Frontex, the European Asylum Support Office, Europol, Eurojust, the International Organization for Migration, and the Office of the United Nations High Commissioner for Refugees. Fingerprinting rates have now reached virtually 100 percent at all active hotspots. Long-term reception capacity across the country is currently at 111,081, and plans are in place to boost this to 124,579. This would probably not be enough to host the share that the country could be expected to take under a permanent and fair pan-European relocation mechanism. And yet, at least for the time being, the European Commission judged the Italian reception system to be more than sufficient.

Within this context, European partners seem to be slowly becoming more confident in Rome’s willingness to take up its responsibilities. It is no coincidence that on the same day that German Finance Minister Wolfgang Schäuble invited Vienna to support Italy in its efforts to control migrant movements within the Schengen area, Austria’s Interior Minister Wolfgang Sobotka announced that work on building a “migrants protection fence” at the Italy-Austria border was halted. 

A sustainable solution before it’s too late

Still, should a new massive migrant wave reach its shores, Italy could not cope on its own. Indeed, no single European country could. Should such a new wave materialize, Libya would be by far the most likely country of origin. Italy is the key to fighting ISIS and stabilizing Libya, but it would be unrealistic to expect Italy to do so on its own. 

The current European migrant crisis is part of a broader global refugee crisis and Europe has a shared interest and responsibility in dealing with it. Because of that, an EU-Libya deal is now necessary. This must—and can—be better than the agreement between the EU and Turkey. But a strategic pan-European approach is urgently needed. As Mattia Toaldo recently highlighted, a joint EU-Libya migration plan would be one of five priority areas for Libya. These would also include supporting a Libyan joint command to fight ISIS, a diplomatic offensive in support of the recently-established unity government, a reconciliation of local militias through power devolution, and the re-launch of the country’s economy. In April, Italy shared proposals with its European partners for a new migration compact with Libya but which also involves the broader region. That might be wise: since Europe is certainly unable to stabilize Libya in the short term, its leaders should start thinking about the country as a variable within a far broader equation. 

What can Italy do in the meantime?

The European Union should step up its support for Italy and an interim solution to migrant crisis in the Central Mediterranean must be found. Meanwhile, Italy has to brace itself for the potential arrival of over 800,000 migrants currently in Libya and waiting to cross the Mediterranean. While Rome could never cope with such a surge in migrant flows on its own, it still can—and must—plan for such an eventuality.

Three measures could be taken to address this challenge. First of all, Italy could consider setting up a seventh—and possibly even an eight—hotspot. This would be an important step given that an idea Italian Interior Minister Angelino Alfano floated—to set up “hotspots at sea”–is unlikely to be viable on both legal and humanitarian grounds. Second, Italy should increase its long-term reception capacity to around 150,000 people. The exact number would depend on the calculations that the European Commission is currently finalizing. Crucially, this should mirror the number of individuals beyond which an emergency relocation mechanism would be activated to re-distribute asylum seekers from Italy to another EU member state. Finally and should a sudden surge in the number of arrivals materialize, Italy could prepare contingency plans to mobilize virtually its entire navy to support ongoing EU efforts with its Operation Sophia. These policy proposals involve a significant effort in terms of state capacity. Yet, Italy has both a moral responsibility as well as a vested interest in implementing them. 

       

In the three months since the EU-Turkey migrant pact came into force, the number of migrants arriving on Greek shores has dropped precipitously. But the number of migrants making the even more dangerous crossing to Italy has increased substantially. After months of chaos, Rome—having adopted a variety of measures in partnership with European authorities—is now much better prepared than last summer to deal with a new migrant surge. But, despite its efforts, Italy—like its peers—cannot possibly cope on its own with a new wave of migration on the order of magnitude as the one witnessed last summer.

Yet that possibility is real. With almost 19,000 arriving from Libya in the first three months of this year, an EU-Libya migration compact is urgently needed. But for it to work, Europe as a whole must engage with Libya comprehensively and across policy areas. That will require time—and an interim solution in the meantime. 

Fewer arrivals in Greece, more in Italy

Notwithstanding its many flaws, the EU-Turkey deal appears to be working at deterring people from making the treacherous crossing from Turkey to Greece. Although weather conditions have improved, the number of migrants reaching Greece dropped by 90 percent in April, to less than 2,700. Syrians, Pakistanis, Afghans, and Iraqis made up the bulk of new arrivals, as has been the case for the last few months. Further north, along the Western Balkans route, the number of migrants reaching Europe’s borders in April dropped by 25 percent, down to 3,830. In this case, Macedonia’s de facto closure of its southern border with Greece clearly contributed to stemming the flow. 

With the Eastern Mediterranean and the Western Balkans routes sealed, the Central Mediterranean pathway presents new and worrying trends. In the month of April alone, 9,149 migrants arrived in Italy. As in the past, they were overwhelmingly from Sub-Saharan Africa (mostly Nigeria), many of them economic migrants unlikely to be granted asylum. For the first time since May 2015, more migrants are now reaching Italy than Greece. Many more are likely to have lost their lives trying to do so. 

For the first time since May 2015, more migrants are now reaching Italy than Greece.

Learning from past mistakes 

Italy is doing its homework. A revamped headquarters for the European Union Regional Task Force (EURTF) overseeing migrant arrivals across the Central Mediterranean opened at the end of April in the town of Catania. Five of its six hotspots—first reception centers fully equipped to process new arrivals—are now in place, with a combined reception capacity for 2,100 people and the involvement of Frontex, the European Asylum Support Office, Europol, Eurojust, the International Organization for Migration, and the Office of the United Nations High Commissioner for Refugees. Fingerprinting rates have now reached virtually 100 percent at all active hotspots. Long-term reception capacity across the country is currently at 111,081, and plans are in place to boost this to 124,579. This would probably not be enough to host the share that the country could be expected to take under a permanent and fair pan-European relocation mechanism. And yet, at least for the time being, the European Commission judged the Italian reception system to be more than sufficient.

Within this context, European partners seem to be slowly becoming more confident in Rome’s willingness to take up its responsibilities. It is no coincidence that on the same day that German Finance Minister Wolfgang Schäuble invited Vienna to support Italy in its efforts to control migrant movements within the Schengen area, Austria’s Interior Minister Wolfgang Sobotka announced that work on building a “migrants protection fence” at the Italy-Austria border was halted. 

A sustainable solution before it’s too late

Still, should a new massive migrant wave reach its shores, Italy could not cope on its own. Indeed, no single European country could. Should such a new wave materialize, Libya would be by far the most likely country of origin. Italy is the key to fighting ISIS and stabilizing Libya, but it would be unrealistic to expect Italy to do so on its own. 

The current European migrant crisis is part of a broader global refugee crisis and Europe has a shared interest and responsibility in dealing with it. Because of that, an EU-Libya deal is now necessary. This must—and can—be better than the agreement between the EU and Turkey. But a strategic pan-European approach is urgently needed. As Mattia Toaldo recently highlighted, a joint EU-Libya migration plan would be one of five priority areas for Libya. These would also include supporting a Libyan joint command to fight ISIS, a diplomatic offensive in support of the recently-established unity government, a reconciliation of local militias through power devolution, and the re-launch of the country’s economy. In April, Italy shared proposals with its European partners for a new migration compact with Libya but which also involves the broader region. That might be wise: since Europe is certainly unable to stabilize Libya in the short term, its leaders should start thinking about the country as a variable within a far broader equation. 

What can Italy do in the meantime?

The European Union should step up its support for Italy and an interim solution to migrant crisis in the Central Mediterranean must be found. Meanwhile, Italy has to brace itself for the potential arrival of over 800,000 migrants currently in Libya and waiting to cross the Mediterranean. While Rome could never cope with such a surge in migrant flows on its own, it still can—and must—plan for such an eventuality.

Three measures could be taken to address this challenge. First of all, Italy could consider setting up a seventh—and possibly even an eight—hotspot. This would be an important step given that an idea Italian Interior Minister Angelino Alfano floated—to set up “hotspots at sea”–is unlikely to be viable on both legal and humanitarian grounds. Second, Italy should increase its long-term reception capacity to around 150,000 people. The exact number would depend on the calculations that the European Commission is currently finalizing. Crucially, this should mirror the number of individuals beyond which an emergency relocation mechanism would be activated to re-distribute asylum seekers from Italy to another EU member state. Finally and should a sudden surge in the number of arrivals materialize, Italy could prepare contingency plans to mobilize virtually its entire navy to support ongoing EU efforts with its Operation Sophia. These policy proposals involve a significant effort in terms of state capacity. Yet, Italy has both a moral responsibility as well as a vested interest in implementing them. 

       

       

       

       

       

Data shows that white, poor, elderly, uneducated men from rural England pulled the United Kingdom outside the European Union. Great Britain will be on its own as it will have to navigate an increasingly complex and globalized world. Europeans must wish all the very best to their British friends. At the same time, they must explore what opportunities are there to be seized. Britain’s departure presents Europeans with many exciting political prospects.

Scotland

Unlike England, Scotland voted massively in favor of remaining within the European Union. Scots now risk being dragged out of it at the hands of the English. Because of this, Scottish First Minister Nicola Sturgeon has been clear: The possibility of a new referendum for Scottish independence is on the table. Should Scotland break free of England, it would immediately be welcome back into the European Union as a sovereign and independent country. Scots would have the best of both worlds: free of English dictates and welcome in the common European family. Their economic liberalism and progressive social policies meanwhile being a boon to the rest of Europe. 

Ireland

Although far less likely than those of a Scottish scenario, major changes could be afoot in Ireland as well. Ireland is presented with a fantastic opportunity to solidify its position as an outpost of Anglo-Saxon economic dynamism within the European Union. A global language, a flexible labour market and low corporate taxation (as well as great beer) are the ingredients the Irish bring to Europe. In the coming years, they could leapfrog what will be left of Britain as America’s springboard into Europe. Meanwhile, Dublin has a fantastic opportunity to punch above its weight in international affairs (as it could and should) by acting as an honest broker between Brussels and London.

International affairs

Calls for the establishment of a common European military, of shared European representation in international institutions, and of a truly European diplomatic service have for the last 40 years regularly and to varying degrees been frustrated by the United Kingdom. Now that Britain is out, Berlin, Paris, and all other like-minded member states should seize this historical opportunity in order to tremendously boost their cooperation in all these policy areas. By doing so, Europe could achieve economies of scale, save money and resources on possible duplications, boost its global standing, and become the strong and reliable partner that the United States desperately wants it to be.

The economy

The welfare state, public services, and healthcare that most continental and northern Europeans enjoy have long been far superior to anything most Brits can even dream of. Additionally, Germany and most northern European member states boost far more competitive economies and standards of living than the United Kingdom. The historical challenge for Europeans is now to improve the performance of the southern and eastern member states of the European Union. Free from British fears of Brussels’ red tape and with the crucial contribution of small yet economically dynamic countries such as the Netherlands or Sweden, Europeans should further integrate toward a dynamic yet inclusive social-market economic model.

Democracy

Westminster gave parliamentary democracy to the rest of the world. After having made a joke out of it through a referendum marred by enormous lies regurgitated onto an ill-informed population, Britain might have given a new impetus to democratic ideals across Europe. Two elements conspire positively in this respect. On the one hand, the country that historically more than any other opposed reforms aimed at further democratizing the European Union is out of the way: Britain will no more be able to veto reforms in this direction. On the other hand, both European elites and common citizens alike might now be spurred into further democratizing the EU as a means to rescuing it.

A rather homogenous socio-demographic group of white, poor, uneducated, elderly, and rural Englishmen have pulled the rest of Britain outside the European Union. The United Kingdom might now enter a new phase in its history characterized by a further deterioration of its international standing. Europeans, meanwhile, have to catch up on the time they spent dealing with 40 years of British foot-dragging. Great opportunities are out there to be seized.

       

Leaders from the world’s largest economies are gathering in Cannes, France for the second round of G-20 talks this year. The most pressing issue on the agenda is the ongoing sovereign debt crisis that is still looming despite a plan to help stabilize the fiscal free fall in Greece. The call from all quarters is for leaders to hammer out an action plan that spurs global growth, promotes investment and facilitates trade. Nonresident Senior Fellow Colin Bradford says dealing with the eurozone debt crisis presents an opportunity for leaders to make a serious commitment to a serious problem.

Video

• 01 bradford g20

      

Editor's Note: The National Perspectives on Global Leadership (NPGL) project reports on public perceptions of national leaders’ performance at important international events. The sixth series of commentary focuses on the Cannes G-20 Summit and discusses the ongoing euro crisis, the rising G20 profile, and the growing social mobilization around concerns with the global crisis. Read the other commentary »

OVERVIEW: COMPARATIVE PERSPECTIVE ON THE CANNES G20 SUMMIT

Despite the euro zone crisis, the profile of the G20 was raised in many member-state capitals, and G20 leaders and media did focus on other agenda items and domestic issues.

Reporting from 13 G20 countries reveals that, through the eyes of the national media, the euro crisis “overwhelmed,” “dominated,” “totally sidetracked” or “hijacked” the Cannes G20 Summit on Thursday night through Friday afternoon, November 4-5, 2011. Only Argentina seems to have been captivated by the bilateral meeting between US President Barack Obama and their leader, President Cristina Kirschner, to such a degree that it overshadowed the global preoccupation with the Greek debt crisis and its implications for the euro zone and the global economy. As she did at other G20 summits, Cristina Kirschner found a way to project her own priorities and portray them to the Argentine public through deliberate preparation with her cabinet beforehand and in regional consultations, and this also held true at her appearance at the B20 (G20 business summit) held just before the G20.

Other Issues

G20 leaders and the national media in G20 capitals were, nonetheless, able to focus on several other G20 issues of vital interest to their publics.

Kirschner and other leaders were indeed able to project to the national media in their capitals other issues and priorities, despite the euro crisis capturing public attention around the world. The two most frequently profiled international issues in the G20 capitals surveyed here, were the financial transactions tax proposal and the G20’s work on tax havens that began in London in 2009. Among the other issues discussed was the strong focus on development by Chinese President Hu Jintao and on least-developed countries by South African President Jacob Zuma. The Financial Stability Board (FSB) action on “too big to fail” banks was highlighted by The Washington Post on Saturday morning, as well as by the Canadian media, in part because Canada’s central bank governor, Mark Carney, was named head of the FSB, replacing Mario Draghi. Japanese Prime Minister Yoshihiko Noda was able to keep his country’s media focused on his priorities.

What was also of interest to NPGL country observers was the extent to which some G20 leaders were able to profile their domestic concerns, linking the Cannes G20 deliberations on either Europe or the on-going G20 agenda to jobs and growth at home. Canadian Prime Minister Stephen Harper highlighted the fact that the G20 Action Plan on Growth and Jobs, which was endorsed in Cannes, corresponded exactly to the title of his government’s 2011 budget. Brazilian President Dilma Rouseff highlighted the International Labour Organization’s social initiative on the G20 agenda, likening it to her government’s domestic program of social inclusion.

South Africa’s Jacob Zuma emphasized jobs as crucial to South Africa’s future, which coincided strongly with the Congress of South African Trade Unions labour leader’s meeting with Nicolas Sarkozy in Cannes. U.S. President Barack Obama’s major thrust in Cannes was to support the Europeans’ efforts to resolve the euro crisis themselves as being critical to jobs and growth in the United States against a background of a U.S. job report the same day. In her appearance at the B20 meeting, Cristina Kirschner declared herself against the “anarchic financial capitalism” that had dramatically impacted people in the real economy, not just bankers and banks.
 
Despite the overwhelming force of events in Greece, Italy and global financial markets on the same days that the Cannes summit took place, events which riveted the world’s attention, G20 leaders and the national media in their capitals were, nonetheless, able to focus on several other G20 issues of vital interest to their publics.

Communications

The global crisis managed to create a higher profile for the G20 in many G20 capitals.

The combination of the euro crisis drama and the growing social mobilization around peoples’ concerns with the global crisis, managed to create a higher profile for the G20 in many of its capitals.
 
Our NPGL colleagues from China begin their commentary by saying: “the first thing that should be reported from Beijing is that China’s media have begun to pay more attention to the G20 than in the past.”

From Germany, we learn that “the Cannes event generated a higher volume of media coverage than previous G20 summits.”
 
“This summit had a great deal of relevance for the Argentine public,” we are told by our NPGL colleague in Buenos Aires. “After London, the summit in Cannes has received the greatest attention by the media,” she adds. “The Cannes summit was seen to have a large impact on the Argentine public.”
 
And in South Africa, “surprisingly, media coverage was not cynical, such as ridiculing G20’s role, which we have witnessed in the recent past. Again this probably was due to the magnitude of the issues at stake, and in that sense, probably more closely resembles the political dynamics around the London summit.”

From Tokyo, “Japanese public and media attention to the G20 meeting in Cannes was higher this time.”

But, interestingly, in contrast to massive attention to the G20 summit held in Seoul a year ago, “very little attention” was paid to the Cannes G20 Summit by the Korean media and public.

Other Leaders, Leading

In this intense context, two sets of leaders stood out visibly in most G20 capitals as the euro crisis–G20 drama unfolded: Nicolas Sarkozy and Angela Merkel battling for the core of Europe against George Papandreou and Silvio Berlosconi on the periphery. Barack Obama was given lots of space in the media in France, the United States, Mexico, Australia and South Africa, but he was seen as “marginal” in Germany, “detached” in the United Kingdom, and “not given special attention” in Canada, for example. Christine Lagarde, the new head of the International Monetary Fund (IMF), seemed to be given more play in the G20 emerging market economies media, than in the G20 industrial economies of the West. Leaders were varied in the intensity of their participation in the summit and their interactions with the global and national media.

Concluding Remarks

In the end, the euro crisis took centre stage at the Cannes summit in the eyes of most of the world, but as observed through the media in G20 capitals, other issues managed to surface for public attention, and national leaders from G20 countries were able, in several cases, to project their own priorities amid the welter of events in Athens and Rome, as well as Cannes, during those two turbulent days in early November 2011. The profile of the G20 was strikingly more visible in many capitals, but serious questions were raised in Mexico and Korea, especially about the future of G20 summits.

Our NPGL colleague in Mexico noted that “the fact that no specific goals, financial commitments or timelines were set for the principal agenda items included in the communiqué was highlighted in commentaries [in Mexico] that focused on why the leaders’ level G20 is not really the ‘premier’ forum its founders proclaimed it to be and why its very existence as a global steering committee is at stake.” From Korea, we heard that “the image of the G20 leaders that prevailed in Korea was one of a confused and ineffective bunch.” The sense in Australia, however, was that the G20 is “the best option on offer.”

As Mexico prepares to take up the presidency next year, and as we look ahead to Russia and Australia’s presidency in the years ahead, it is clear that many challenges remain.

UNITED STATES

As surely was the case in other countries, the Greek debt drama, with the proposed referendum, withdrawn referendum and the vote of confidence, overshadowed and seemed to stymie action by G20 leaders in Cannes. But the competing headlines in Washington focused on the jobs report for October, which showed mixed results with public sector jobs falling significantly while private sector employment grew steadily again, and the debate in Congress between Republican and Democratic versions of a jobs bill. CNN’s John King was called upon to comment on the G20 summit from his perch in Iowa, reminding viewers that there was a seamless connection between the president’s efforts to push Europeans to deal with their debt and financial fragility, and his reelection prospects.

There is no doubt that in Washington, Athens was more visible than Cannes, and that the G20 summit took a back seat to the euro crisis. The Financial Times opined that the “forum’s high ambitions delivered meager results” as a headline. This certainly is borne out by the communiqué, which indeed did not push forward the specifics of the G20 agenda.

President Obama made his position extremely clear in his actions and words at Cannes, that he regarded the euro crisis as a European problem and the solutions were within Europe’s grasp and did not require outside support for the moment — a geopolitical strategy, which revealed his conviction that Europe is pivotal for the United States economically and strategically, keeping China and Asia more in the background. The fact that the Cannes summit put out an Action Plan on Growth and Jobs and the interdependence of the United States and Europe is the centerpiece for global growth, linked well to his domestic agenda of recovery and employment.

Other Issues

Importantly, the G20 summit approved an FSB report, making public for the first time a list of 29 “too big to fail” banks that would be subject to more vigorous FSB oversight and higher capital requirements, in order to protect taxpayers from bailing out failed banks. This is a highly significant G20 accomplishment, following directly from the seminal London G20 Summit in April 2009, at which the expanded FSB was established, incorporating all G20 countries into what was a highly euro-centric predecessor, and carrying forward the London G20 priority on strengthening national andglobal mechanisms for financial oversight, supervision and regulation. Interestingly, only The Washington Post carried this story as part of its G20 coverage — no articles on this G20 action appeared in The New York Times or the Financial Times.

Communications

President Obama’s press conference at the conclusion of the Cannes G20 Summit was carried live on CNN late on the morning of November 4, with wide CNN commentary afterward, linking Obama’s thrust in Europe with his domestic economic and political agenda. The Washington Post on November 5 grasped the strategic point of the president in an editorial: “Cannes heat: President Obama delivers the right message to Europe.” The Post argued, based on Obama’s remarks in Cannes, that “even if we [the United States] had the money to rescue the euro, it’s not clear that we should make such an investment, unless and until Europe itself had exhausted its resources, which it has not yet done… if the Europeans mean it when they say that the fate of their union itself depends on saving the euro, they will find a way.”

So, whereas the G20 profile receded in the face of the euro avalanche, US global interests were projected clearly and forcefully by the American president to European leaders and to the US public, from his participation in the Cannes G20 Summit. The link between US domestic political imperatives and a global strategic thrust was forged and made visible by Obama’s presence in Cannes.

Other Leaders, Leading

The image of the G20 leaders that prevailed in the US media from the Cannes G20 Summit was predominantly Obama with European leaders, not with Asian leaders or leaders from other parts of the world represented in the G20 grouping. Even The Washington Post editorial contained a photo nested into the editorial itself of Obama, Merkel, Sarkozy and Cameron talking in an animated fashion with the G20 France imprimatur in the background. This was clearly consistent with the dominance of the euro crisis in the meeting itself, and with Obama’s strategic focus and message. In other G20 summits, Obama with Hu Jintao in London, or Berlusconi thrusting himself between Obama and Medvedev in Pittsburgh, were memorable images. In Washington, the West was shown at Cannes as being front and centre stage, with The New York Times carrying an amusing and insightful portrait of the relationship between Barack Obama and Nicolas Sarkozy.

      

       

Event Information

Register for the Event

For decades Chinese companies focused their international investment on unearthing natural resources in Africa, Asia, and Latin America. In recent years, Chinese money has spread across the globe into diverse sectors including the real estate, energy, hospitality, and transportation industries. So far in 2016, Chinese investment in offshore mergers and acquisitions has already reached $101 billion, on track to surpass its $109 billion total for all of 2015. What do these investments reveal about China’s intentions in the West? How is China’s image being shaped by its muscular international investments? Should the West respond to this new wave, and if so, how?

On April 25, 2016, the Center on the United States and Europe and the John L. Thornton China Center at Brookings hosted the launch of "China’s Offensive in Europe" (Brookings Institution Press, 2016), the newly-published, revised book co-authored by Visiting Fellow Philippe Le Corre (with Alain Sepulchre). During the event, Le Corre offered an assessment of the trends, sectors, and target countries of Chinese investments on the Continent. Following the presentation, Senior Fellow Mireya Solis moderated a discussion with Le Corre and Senior Fellows Constanze Stelzenmüller and David Dollar.

 Join the conversation on Twitter using #ChinaEurope

Audio

• China’s overseas investments in Europe and beyond

Transcript

• Transcript (.pdf)

Event Materials

• 20160425_china_overseas_transcript

       

       

       

       

       

       

       

After 10 hectic days, Cypriots will return to economic life. The price, however, is an inevitable and costly adjustment plan. But contrary to many predictions, the eurozone and the Cypriot government have been able to find a solution in less than 10 days. Moreover, the eurozone has avoided yet another financial hurdle that, despite its small size, was described as having the potential to start another acute phase of the euro crisis.

The management of the eurozone crisis over the last three years has proven to be extremely tortuous. It remains so, and this episode will certainly not be the last. However, observers might also point to how the management by congressional leaders of the U.S. fiscal and deficit problems reveals similar political complexities. Could both be the inevitable result of a democratic, diverse, continental political constituency?

What people need to understand about the eurozone is its continuous willingness to ensure the future of the euro, and its (until now) proven capacity to find compromises despite diverging national interests.

Cyprus has been recognized for months as a ticking bomb within the eurozone, mixing a hypertrophied banking system (that produced jobs and wealth for Cypriots) with huge Russian deposits and suspected money laundering.

Cyprus has been recognized for months as a ticking bomb within the eurozone, mixing a hypertrophied banking system (that produced jobs and wealth for Cypriots) with huge Russian deposits and suspected money laundering. It seems that this had become Cyprus’s most important comparative advantage. The fight against money laundering is supposed to be a great cause of the OECD countries, and it is surprising to note that this aspect did not receive appropriate weight when commenting on the unconventional tools used by the troika to design its plan. The Cypriot banking system is not like the average banking system of Southern Europe. It is a case in itself and deserves a solution of its own.

The “success story” of Cyprus was destroyed by the haircut on Greek bonds; Cypriot banks hold massive amounts of Greek bonds on behalf of their foreign clients. Incidentally, this says a lot about the prowess of this supposed “international financial center” and the awareness of its clients. For many reasons, mostly the country’s democratic process, the active search for a solution to problems in Cyprus had been postponed for months until Saturday, March 16, when an agreement was reached between the newly-elected president of Cyprus, the eurozone governments, and the troika. On that date, every old prejudice about the mismanagement of the eurozone crisis, that had been shelved for the last year, suddenly resurfaced with a new torrent: of criticisms (an ill-conceived plan); of denunciations (a crisis of stupidity); of rejection (Europe is for people, not for Germany); of financial horrors (inevitable propagation of the Cypriot bank run); and finally of doomed forecasts (be alert, the breakup is coming).

Yet one week later, it is interesting to visit the control room and watch the radar screens:

• The agreement? Better designed and operational as of Monday, March 25; 
•  Bank runs propagation? No sign (even in the London branches of the two Cypriot banks);
• European periphery bond market? A definitely strong first quarter;
• Stock markets? Stable;
• Exchange markets? Stable.

However, we should not consider this summary to mean that this new episode in the eurozone saga has been more efficiently managed than the previous ones. Definitely not!

Two examples among many explain why this is not the case. First, the idea to tax every bank account whatever its amount was not a product of “German stupidity” but reflects a demand from the Cypriot president, who was willing to preserve the image of the island as a financial center; as if the confidence of dirty money could be a sustainable comparative advantage for Cyprus! The stupefying thing is that the other euro governments accepted this clause even though it was financially dangerous and certain to be rejected by the populace and its representatives. In following the relief produced by the substance of the new agreement, the Dutch finance minister and chairman of the Eurogroup announced that the Cypriot treatment was great news because it showed that bank depositors may be expected to contribute to future bailout packages. However this is explosive and potentially as damaging as the PSI initiative adopted at Deauville. There was immediate backtracking but this reminds us that the whole process remains fragile. All this being properly considered, we should examine the ongoing euro crisis along a different narrative.

And after having described the situation in Cyprus as potential chaos in the waiting, experts now explain the absence of collateral effects by referring to the July 2012 famous commitment of Mario Draghi.

What the above mentioned facts demonstrate is that markets and people outside of Cyprus adopted (at least until the Dutch minister’s proclamation) a much calmer view than specialized commentators. And after having described the situation in Cyprus as potential chaos in the waiting, experts now explain the absence of collateral effects by referring to the July 2012 famous commitment of Mario Draghi. This is at best an excuse for not exploring other explanations and at worst a superstition for placing too much power in his mouth. Rather, two broader facts should be emphasized:

• First, looking outside the eurozone, the euro has remained as attractive an international currency as before all the vicissitudes of the sovereign debt crisis despite all the aggressiveness on part of the international financial press. The exchange rate with the dollar constantly remained close to 1.3— a rate which reveals an over-valuation of the euro; such stability is surprising given all the daily announcements of its forthcoming collapse. This fact, which has never received proper attention, at the very least proves that the euro has always remained as attractive as the dollar. After all the drama we have gone through, there was little chance that the Cypriot episode will change this global perception of the euro.
  
  
• Second, within the eurozone, there is an underestimated willingness to stick to the euro as the currency of the European continent. Austerity measures are never popular and governments that adopt them have been punished in Greece, Spain, France and Italy. Nevertheless, this is the natural product of democracy, and when it comes to the explicit question— “do you prefer to stay in the eurozone, with its mechanisms and constraints, or move on your own?”— the popular answer everywhere has been “we stay”. This is what popular votes have proven in Ireland, Greece and Spain, as well as in Germany where local elections have regularly promoted euro-friendly candidates.

So what can we conclude from the recent crisis in Cyprus? The first conclusion is that Cyprus will pay a high price for exiting a dramatic situation and securing access to eurozone support; no other feasible deal was better than that one at that particular moment. Second, we have witnessed once again the willingness of the eurozone to stay the course, and its ability to design imperfect but feasible compromises, which is not so bad when compared to what’s going on in Washington. In brief, this is another Euro-solution. However, Cyprus is certainly not the last challenge confronting the governments and people of the eurozone. In that sense, the most problematic lesson from this chaotic week is not financial but political. The future of Europe more and more lies in the hands of Germany and there is no place here for accusing the Germans of egoism. Financially speaking, they have moved forward at every step during the last three years and they are the ones that repeatedly take the biggest risks. There is no question that Germany has a prominent voice and that it defends its financial security before entering into an agreement. This is what should have been expected and this is what we have seen with what happened in Cyprus. Looking forward, the bigger problem facing the eurozone is the urgent need to design a macroeconomic policy that will spur a return to growth for the region. On this issue, there is still no visible Euro-solution and that could prove to be the biggest risk facing Europe.

       

Ordering Information:

• {9ABF977A-E4A6-41C8-B030-0FD655E07DBF}, 978-0-8157-2554-1, $28.00 Add to Cart

       

Event Information

By the end of May, citizens of Europe will have left the polling booths and a new European Parliament will have been directly elected for the eighth time in the institution’s history. Since the last elections were held in 2009 on the heels of the global financial crisis, the eurozone has developed stronger economic stability mechanisms, kept its membership intact, and even added additional members. Yet Europe also faces a resurgence of extreme nationalism, political fragmentation within nation-states, and frustration and protest driven by high rates of unemployment. There are very different visions for the future of Europe.

On June 3, the Global Economy and Development program at Brookings hosted a discussion on Europe’s future and what Europe’s election results mean for critical choices like the formation of the new European Commission, fiscal policies, U.S.-EU relations, TTIP negotiations and the future of the EU-United Kingdom relationship. Some of the issues that were addressed are also analyzed in Europe’s Crisis, Europe’s Future, a recently published book (Brookings Press, April 2014) co-edited by Kemal Derviș and Jacques Mistral.

Join the conversation on Twitter using #EuroFuture

Video

• European Monetary Union Has Political Consequences
• The European Elections and the Future of Europe
• People Are Feeling Apathetic about Europe
• European Elections Proof of Frustrations
• Jobs and Growth at Heart of Europe's Problem
• Britain Wants Eurozone to Succeed
• The European Elections and the Future of Europe

Audio

• The European Elections and the Future of Europe

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• 20140603_european_elections_transcript

       

       

       

       

       

For Europe, it has been a rough year, or perhaps more accurately a rough decade. The terrorist attacks in London, Madrid, and elsewhere have taken a toll, as did the Iraq and Afghanistan wars. But things really got tough beginning with the Great Recession—and its prolonged duration for Europe, including grave economic crises in much of the southern part of the continent. That was followed by Vladimir Putin’s aggression against Ukraine, as well as the intensification of the Syrian, Libyan, and Yemeni conflicts with their tragic human consequences, including massive displacement of people and the greatest flow of refugees since World War II. The recent attacks in Paris and Brussels have added to the gloom and fear. This recent history, together with the advent of nationalistic and inward-looking policies in virtually all European Union member states, makes it easy to get despondent—and worry that the entire European project is failing.

To be sure, these are not the best of times. Europe is perceived by some, including Republican presidential candidate Donald Trump, as failing to invest enough in its own security, since NATO allies spend less than 1.4 percent of GDP on their armed forces while the United States spends twice that. However, we must not lose sight of the key structural advantages—and the important policy successes—that have brought Europe where it is today. For example, Europe’s recent progress in energy policy has been significant—good not only for economic and energy resilience, but also for NATO's collective handling of the revanchist Russia threat. 

[W]e must not lose sight of the key structural advantages—and the important policy successes—that have brought Europe where it is today.

For many years, analysts and policymakers have debated the question of Europe's dependence on natural gas from Russia. Today, this problem is largely solved. Russia provides only one-third of Europe’s gas. Importantly, Europe’s internal infrastructure for transporting natural gas in all desired directions has improved greatly. So have its available storage options, as well as its possibilities to import alternatives either by pipeline or in the form of liquefied natural gas. As a result, almost all member states are currently well-positioned to withstand even a worst-case scenario. 

Indeed, European Commission analyses show that even a multi-month long supply disruption could be addressed, albeit at real economic cost, by diversification and fuel switching. Progress in energy efficiency and renewable energy investments also help. There is more to do to enhance European energy security, but much has been done already. The Europeans have shown that, with ups and downs, they can address energy security themselves.

Already this energy success has contributed to a strategic success. Europe has been heavily criticized for not standing up more firmly to Russia in response to the annexation of Crimea and the conflict in eastern Ukraine. In fact, all EU member states have agreed to keep economic sanctions in place against Moscow. In addition, lifting the sanctions has been firmly attached to the implementation of the Minsk II agreement—and despite recent cracks in European solidarity, we hope that this stance will hold going forward. 

The notion that Europe is weak and dependent on Russian natural gas is a relic from the past.

The notion that Europe is weak and dependent on Russian natural gas is a relic from the past. Europe has a strong regulatory framework with which commercial entities, including Gazprom, have to abide. For those who doubt the impact of these regulations, just ask Google or Microsoft. With the end of so-called destination clauses, natural gas can be re-sold whenever required, as long as sufficient infrastructure is in place. Just last year, Germany re-exported over 30 billion cubic meters of gas, mostly Russian, in particular to Central and Eastern Europe (including Ukraine). That volume exceeds the annual consumption of every European state with the exceptions of Germany, Italy, France, and Britain.

In theory, Europe could even substantially wean itself off Russian gas if need be. To be sure, that would come at a major expense: over 200 billion euros of additional investments over a period of two years or more, and then an annual 35 billion euros, according to some calculations. That will almost surely not happen. But as a way of bounding the worst-case scenario, it is still informative. One might say that Europe has escalation dominance over Russia; the latter needs to export to Europe more than Europe need Russian hydrocarbons.

The internal energy market is not finished, but Europe’s energy security has significantly improved in recent years. Even though world markets are currently awash in resources, there is no time for complacence, and European leaders should finish the job, foremost by safeguarding the swift construction of the so-called Projects of Common Interest (key energy infrastructure projects that address the remaining bottlenecks in the EU market), so that the U.S. State Department can take new infrastructure projects like Nord Stream 2 off its priority list, and make energy policy another true European success story. It is already much of the way there, and Western security is the better for it.

      

I attended a fascinating dinner earlier this week with Greek Foreign Minister Nikos Kotzias as part of his whirlwind visit to Washington DC. I shared with the minister some reflections on challenges facing him and the new Greek government at home in Greece and in Europe. When I served in Prague, I often urged the Europeans to take a page from our U.S. approach in 2009-10 and to avoid excessive austerity. I reiterated that view to the minister, and in particular pointed out the need for Germany to do more to help (see, for example, my colleague Ben Bernanke's recent post on the German current account surplus in his Brookings blog.) Paul Krugman hit the nail on the head with his recent column as well. On a personal note, when my father found himself trapped in Poland in 1939 is the Nazis invaded, he made his way to Greece, which gave him shelter until he was able to escape to the United States in 1940. So I was able to thank the Foreign Minister for that as well (somewhat belatedly, but all the more heartfelt for that). I was impressed with the Minister's grasp of the Greek financial crisis and the many other important issues confronting Europe.

      

Event Information

A conversation with Prime Minister of the Czech Republic Bohuslav Sobotka

Today, the European Union faces critical risks to its stability. The possibility of a Brexit. The ongoing Ukraine/Russia conflict. The strain of mass migration. ISIL and other terrorism threats. The lingering financial crisis in Greece and beyond. These issues pose distinct challenges for the EU, its 28 member countries, and their 500 million citizens. How will these developing problems affect Europe?          

On March 31, Governance Studies at Brookings hosted Czech Prime Minister Bohuslav Sobotka to discuss the current status of the EU as seen through the lens of a Central European nation, close U.S. NATO ally and current Chair of the Visegrad Group. Prime Minister Sobotka offered insight into how the EU will address these issues, and where its future lies.

Video

• Challenges to the future of the EU: A Central European perspective

Audio

• Challenges to the future of the EU: A Central European perspective (English)

Transcript

• Transcript (.pdf)

Event Materials

• 20160331_czech_eu_transcript

       

The eurozone has three problems: national debt obligations that cannot be met, medium-term imbalances in trade competitiveness, and long-term structural flaws.

The short-run problem requires more of the monetary easing that Germany has, with appalling shortsightedness, been resisting, and less of the near-term fiscal restraint that Germany has, with equally appalling shortsightedness, been seeking. To insist that Greece meet all of its near-term current debt service obligations makes about as much sense as did French and British insistence that Germany honor its reparations obligations after World War I. The latter could not be and were not honored. The former cannot and will not be honored either.

The medium-term problem is that, given a single currency, labor costs are too high in Greece and too low in Germany and some other northern European countries. Because adjustments in currency values cannot correct these imbalances, differences in growth of wages must do the job—either wage deflation and continued depression in Greece and other peripheral countries, wage inflation in Germany, or both. The former is a recipe for intense and sustained misery. The latter, however politically improbable it may now seem, is the better alternative.

The long-term problem is that the eurozone lacks the fiscal transfer mechanisms necessary to soften the effects of competitiveness imbalances while other forms of adjustment take effect. This lack places extraordinary demands on the willingness of individual nations to undertake internal policies to reduce such imbalances. Until such fiscal transfer mechanisms are created, crises such as the current one are bound to recur.

Present circumstances call for a combination of short-term expansionary policies that have to be led or accepted by the surplus nations, notably Germany, who will also have to recognize and accept that not all Greek debts will be paid or that debt service payments will not be made on time and at originally negotiated interest rates. The price for those concessions will be a current and credible commitment eventually to restore and maintain fiscal balance by the peripheral countries, notably Greece.