Year LX, 2018, Single Issue

 

 

FROM THE EURO TO EUROPEAN FEDERAL DEFENCE:
EUROPE AND A NEW WORLD ORDER*

 

 

1. General Considerations.

The purpose of this essay is to analyse the advances made since the birth of the euro as a federal element of the European Union, right through to the development of the Permanent Structured Cooperation on security and defence (PESCO), which was created in December 2017. We will focus, in particular, on the federal nature of the Economic and Monetary Union (that is, the management of the euro) and on the developments seen in the field of European defence policy. The latter does not yet have a federal scope, even though there is no doubt that PESCO is federally inspired and will possibly develop further in this direction in the future.

The changes in Europe (and in the world) that began in 1989 made it necessary to transform the “old” European Community, an economic organisation, into the European Union, a political one. This transformation was brought about by the Treaty of Maastricht, which was signed in February 1992 and has been in force since January 1993. This Treaty established the bases for creating the Economic and Monetary Union, which, however, did not become a reality until 1 January 1999, the year that saw the birth of the euro as an international currency. The EU’s Common Foreign and Security Policy, which stemmed from the same Treaty, was launched in 1993.

Europe’s first initiatives of a defensive nature resulted from the implementation, at the beginning of the 21st century, of the Common Security and Defence Policy (CSDP), which made provision for crisis management operations. The basis of the CSDP was set out in the Treaty of Lisbon, in force since 2009; indeed, it is here that, for the first time, reference is made to territorial defence. However, the application and implementation of a true defence policy, designed to facilitate strategic autonomy of the European Union, was probably not seen until the creation of PESCO in December 2017, and at present this policy is still evolving, largely as a result of the implementation of the Global Strategy for the European Union’s Foreign and Security Policy, which was unveiled in June 2016.

This birth and launch of a European defence policy can be seen to have been prompted, to a large extent, by three factors: the growing threats posed to the European Union since 2014 (as a consequence of, first, the illegal annexation of Crimea by Russia and, second, the birth and expansion of the so-called Islamic State and jihadist terrorism); the United Kingdom’s decision to withdraw from the European Union (Brexit has become an internal federator); and the appointment of Donald Trump, who is demanding the application and development of a European defence policy, as the new President of the United States (an external federator).
 

2. The Euro as an Expression of the Federal Vision of the European Union.

The last decade of the 20th century was a particularly important time for European unification, as it saw the European Union creating its first federal project, the euro, which was made possible in part by the implementation of a package of economic and social cohesion measures. The creation of the euro was also about making the most of the new, borderless Europe, given that the advantages of the internal market would have disappeared had there remained the possibility of competitive devaluations between member states. For this reason, the Economic and Monetary Union (EMU) emerged as a necessity. In this context, given that a bank cannot function if decisions have to be taken unanimously, the decision-making model had to be federal too.

On 2 May 1998, the European Council decided to launch the third phase of the EMU, and drew up the list of countries that, meeting the convergence criteria, could enter it: Germany, Austria, Belgium, Spain, Finland, France, Ireland, Italy, Luxembourg, the Netherlands and Portugal. That same day, the European Parliament approved the transition to this third phase, with 468 votes in favour, 64 against and 24 abstentions. At the same time, the members of the Executive Council of the European Central Bank (ECB) were appointed; the ECB, which became operational on 1 January 1999, replaced the European Monetary Institute and assumed responsibility for eurozone monetary policy.

As mentioned, it is important to note the federal character of the ECB’s Executive Council, which does not represent all the member states as it has only six members, appointed solely on the basis of their professional expertise. Indeed, the ECB is independent of all political power, and has no relationship with the Eurogroup, a subgroup of the Council that brings together the single currency member states.

At the same time, the exchange rates between the currencies of the participating countries were fixed and a “Council of the Euro” (later known as the Eurogroup), comprising the economy and finance ministers of the member states, was formed. This Council met for the first time in Luxembourg on 4 June 1998.

The importance of the decision to launch the third phase of the EMU was enormous, assuming historic proportions when the euro became a fully-fledged single currency. In this sense, Ramón Tamames went so far as to describe the implementation of the single currency as “a declaration of independence, similar to the one made in its time — the late eighteenth and early nineteenth centuries — by the thirteen American colonies with the unification of the dollar.” The importance of the euro is undeniable: it guaranteed monetary stability, homogeneity of inflation and interest rates, and the overcoming of exchange rate barriers; it boosted intra-community trade, and it made the single European currency a means of international payment.

Since the economic crisis, it has been strongly argued that the design of the euro was flawed. Possibly, it represents the most that could be achieved, considering the balance of power at the time. What is clear, however, is that had the decision not been taken at that particular point in time, it might have proved impossible to take it later. Without the Economic and Monetary Union, the effects of the economic crisis for Europe would have been much more devastating than they have been. From its very beginning, the eurozone has represented almost 20 per cent of world’s GDP.

It should be noted that the start-up of the third phase was greeted with little enthusiasm in public opinion, as there was no clear understanding of its advantages. On 28 September 2000, 53 per cent of Danish voters, in a referendum, rejected the proposal to adopt the euro in place of the Danish crown, even though the country’s political parties and the EU had campaigned in favour of this. Three years later, on 14 September 2003, a referendum in Sweden was also won by the faction opposed to joining the EMU.

Although Denmark, Sweden and the United Kingdom all decided not to switch to the euro, it was subsequently adopted by other member states: Greece in 2001, Slovenia in 2007, Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and Lithuania in 2015. Therefore, with the euro crisis of 2012 now firmly behind us, the EMU currently has a total of 19 members, and virtually all the other EU member states are negotiating to join it. In 2018, the euro made up 30 per cent of the currency basket of the International Monetary Fund, whereas the dollar made up 43 per cent, the yuan 11 per cent, the yen 8 per cent, and the pound sterling 8 per cent. In addition, approximately forty states accept the euro as currency even though they do not belong to the EMU.

It is necessary to bear in mind both the federalising character of the single currency and also its role as a federator: it is federalizing because it is the expression of an ongoing political process, and it is a federator because it has had the effect of accelerating this process. Indeed, the Economic and Monetary Union is widely accepted as the factor that can most influence Europe’s transition from economic Community to political Union.

This is explained by the fact that monetary policy is managed by the ECB, supranationally and in accordance with a clearly federal model. The functioning of this bank is inspired by the model of the German Bundesbank, whose decision-making body also has fewer members than the number of the country’s Länder. The ECB is the only EU institution with an expressly federal character. Germany, to achieve its unification and demonstrate its commitment to the pursuit of a European Germany as opposed to a German Europe, was prepared to relinquish its highly successful currency, the German mark. In exchange for the disappearance of the mark and its incorporation into the euro, Germany demanded that the European Central Bank use the same system of governance adopted by the German Central Bank, the Bundesbank.

The euro, insofar as it is the first clearly federal expression of the European Union, marks the reaching of a new stage in the building of a unified Europe. It is important to understand that the euro is linked to economic and social cohesion and to a social model. We have seen how the Cohesion Fund helps the European states to make convergence possible. Furthermore, currencies are not neutral, but reflect a model. Whereas the dollar has long been considered “the currency of the empire”, the euro, despite the difficulties it encountered as a consequence of over-zealous application of austerity policies in the second decade of the 21st century, is internationally regarded as an expression of the social market economy, which gives rise to a specific model of society: the welfare society.
 

3. The Emergence of the European Union as a Global, Normative and Diplomatic Actor.

When analysing the international dimension of the European unification project from its beginnings in the 1950s to the present day, we see that, as a consequence of the Cold War and the bloc policy, Europe was initially merely a passive member of the international community, wielding only limited influence, first as a commercial actor and subsequently as an economic one. It was not until after 1989, when the disappearance of the bloc policy allowed the European construction process to start changing in nature, from economic to — after Maastricht — political, and enabled the progressive development of a common foreign policy, that Europe was able to embark on the process that would see the European Union, from the beginning of the 21st century, emerging as a global player.

There are three main factors that explain the EU’s (albeit sometimes imperfect and contradictory) rise to prominence on the global political stage: a) the increase in its commercial and economic weight, especially following the birth of the single currency as an expression of the welfare society model (the EU accounts for half of the world’s social expenditure); b) the importance of cooperation for development and humanitarian aid (in this field, the EU contributes almost half of the world total) and of Europe’s hefty financing (again amounting to almost fifty percent) of the United Nations system, and c) the only recent (as recent as 2011) establishment of a European common diplomacy, which we will analyse below.

At the same time, since the beginning of the 21st century, the European Union has become a normative actor, to use the expression of Ian Manners, for whom a normative power is one whose power lies in its capacity to transform international rules, in this case in the direction of greater international regulation in the defence of shared values, such as human rights, the rule of law, etc. This international dimension is a consequence of Europe’s internal welfare society model, which implies a balance between markets, society and the state.

Thus, the European Union has actively participated (in some cases taking a leading role) in world governance on issues such as human rights, the abolition of the death penalty, the International Criminal Court, the Paris Treaty on Climate Change of 2015, and the United Nations’ sustainable development goals for 2030, approved in 2015 by the General Assembly and promoted by the European Union. Along the same lines, we must not forget the European Union’s important initiative in 2008, when it launched the G20 summits (an arena in which it has become the clear leader), and its impact, in terms of international regulation, through the first ten of these summits, including, most recently, the Hamburg one in July 2017 and the eleventh in Argentina in November 2018.

The emergence and development of the European Union as a diplomatic actor became possible after the entry into force, on 1 December 2009, of the Treaty of Lisbon, which provided for the creation of a common European diplomacy, and thus implied the existence of a “minister” (a role currently filled by the High Representative of the Union for Foreign Affairs and Security Policy, hereinafter, for brevity, referred to as HR), a “ministry” (the central administrative body of the EU foreign service in Brussels), and some “embassies” (or overseas Union delegations). In this role, it is having a great impact, as we will see in more detail below.

As of 2019, these “embassies”, which were previously just Commission delegations, number 146 (the two most recently opened ones are in Kuwait and Turkmenistan). They are recognised by states and international organisations, and they are concretely working and developing bodies. They cover practically all of the states represented in the international community, including the 28 EU member states. Furthermore, 10 of the European ambassadors are accredited to more than one state or international organisation. This new diplomacy is different from that of the single member states; officials of the Commission and the Council of the European Union constitute two thirds of it, while diplomats from the member states make up the remaining one third. It is also worth remarking that this new diplomacy increases the rights of citizenship through the provision of consular assistance.

It should be noted that these two diplomacies (national and European) have been operating for more than seven years simultaneously, without a hierarchy between them. Each acts according to its specific competences and they have co-existed in a relationship of “compatibility”, albeit never “complementarity”. This compatibility, however, does not mean that their coordination invariably works well and has the effect of strengthening the common action of the European Union. Now, however, member states’ embassies are starting to close, with some of them being incorporated into the EU ones.

This, then, describes the emergence of the EU as a diplomatic actor, whose fundamental role is to present the global policy of the European Union in an autonomous way, giving it unity and coherence, both in its planning (both with regard to political and security aspects and to external relations, which have some economic dimensions) and in its execution. It should not be forgotten that the HR is also Vice-President of the European Commission. Thus, European diplomacy provides security to the whole of the Union through the external dimension of its common policies and the development of the Common Foreign and Security Policy.
 

4. The Foreign Policy Innovations of the Lisbon Treaty.

A characteristic of the Lisbon Treaty is that it includes most of the changes introduced by the non-nata European Constitution, and does so by means of the so-called veil theory. That is to say, the more visible aspects disappear while the changes remain. As regards the external dimension, the establishment of Europe’s own “minister for foreign affairs”, “ministry” and also “embassies” was a major element at the core of the Constitutional Treaty. Although the Lisbon Treaty, in accordance with the veil theory, did not use these actual names, it nevertheless embraced all these innovations, through the assignment of new duties to the HR, the setting up of the European External Action Service (EEAS) and, finally, the creation of the aforementioned Union delegations.

The duties of the HR are to conduct the Union’s Common Foreign and Security Policy, and draw up and apply proposals (Art. 18.2 TEU). Furthermore, given that the HR presides over the Foreign Affairs Council and, at the same time, serves as Vice-President of the European Commission (Articles 18.3 and 18.4 TEU), he or she can be said to embody two different European identities, the intergovernmental one and the community one. And the result of this, i.e. the existence of “one single mind” in European external action, is a key step forwards in consolidating the EU’s role in the international arena. The first HR was Catherine Ashton (2009-2014), and she was succeeded by Federica Mogherini (2014 to the present time).

As stated in Article 27.3 TEU, the EEAS is the HR’s executive arm. It is a unique administration that helps the HR to fulfil all his or her commitments. Founded on the basis of the “Council decision of 26 July 2010 establishing the organisation and functioning of the European External Action Service”, it is an expression of a common European diplomacy and is considered one of the most significant steps forwards in this field, with considerable impact on different areas. In the context of the European Neighbourhood Policy, for example, the EEAS has strengthened the traditional role of the European Commission, which was previously criticised for being too technical.

The Union delegations form a network that permits a broader and more consolidated European presence in the external sphere. At present, this network comprises 146 delegations, a large number in comparison with the number of embassies some European countries have. The great advance brought by this development is that, thanks to this new European legal personality, the EU can now be represented in third countries and also within international organisations. The delegations work under the authority of the HR (Art. 221 TFEU).

The EU has been implementing the above-mentioned changes ever since the entry into force of the Lisbon Treaty (December 2009). However, it is under the mandate of the current HR that they are really becoming consolidated, as Federica Mogherini adopts a different stance to that of her predecessor, Catherine Ashton. This consolidation is strengthened further in the framework of the present European Commission, headed by Jean-Claude Juncker, who enjoys more legitimacy as a result of the application of Article 17.7 TEU, which establishes that the President of the Commission should be elected taking into account the results of the European Parliamentary elections.

The appointment of Federica Mogherini as HR in 2014 confirmed the switch towards a more powerful foreign policy. Throughout her mandate she has demonstrated a willingness “to broaden margins, and break through limits”, pushing the European Union forwards as a normative and diplomatic actor far more audaciously than her predecessor Mrs Ashton did. As Federica Mogherini is also Vice-President of the Commission, she is responsible for the coordination of five commissioners in charge of the foreign dimension of the Union. What is more, she will also be responsible for any future defence policy, albeit with the support of the Deputy Secretary General for CSDP, Pedro Antonio Serrano de Haro.
 

5. Main Innovations of the Global Strategy: Reinforcement and Increased Prominence of the Most Normative Dimension of European External Action.

The Global Strategy for the European Union’s Foreign and Security Policy, or simply Global Strategy, whose main title is Shared Vision, Common Action: A Stronger Europe, was finally drawn up after lengthy negotiations and quite a few delays, and officially presented on 28 June 2016. It was more than two years in the negotiating, a process, conducted under the leadership of the HR, that involved representatives of the national foreign affairs ministries and of the European Parliament, as well as a group of experts from different countries. This explains why it was only presented and not approved at the European Council of June 28.

Although the Global Strategy was widely criticised for having been presented five days after the Brexit referendum and a few months before Trump’s victory, its presentation actually proved particularly timely, providing the European Union with a clear strategy that has allowed it to cope collectively with these new unforeseen challenges, achieving common positions of great significance and some effectiveness, as highlighted by assessments carried out by the EEAS, specifically on 25 June 2017 and 25 June 2018.

Previously, traditional approaches highlighted the tension that can exist between the defence of national interests and the moral principles that should underlie the policies conducted by member states. However, with the new Global Strategy, the EU has started moving in a direction that underlines the difficulty of separating interests and values, insofar as the two complement each other and come together as an indivisible part of its foreign policy.

The Global Strategy document, entitled Shared Vision, Common Action: A Stronger Europe, gives prominence to this issue, developing it under the headings “A Global Strategy to Promote our Citizens’ Interests” and “The Principles Guiding our External Action”. With regard to the interests, the following are identified: peace and security, prosperity and democracy (which includes the promotion and respect of human rights, fundamental freedoms and the rule of law), that is, values; and, finally, a world order based on norms (through multilateralism within organisations, especially the United Nations). Meanwhile, the principles embraced are pragmatism, unity, interaction, responsibility and partnership.

Certainly, the section dealing with principles does not refer to the normative dimension; it only stresses a purely strategic approach. In other words, it looks at “how” the EU should act on the international stage. The reason for this is that interests have been identified as values, which underlines their indivisibility in European external action and, ultimately, the EU’s aspiration to impact on the international scene through an ambitious normative promotion campaign.

This approach is a reflection of the EU’s own internal nature, as the key values underpinning the European project (peace, democracy, human rights and fundamental freedoms, i.e. the rule of law) are the very same ones that determine its external action. At the same time, these values are reinforced as universal rules that go beyond the purely community level to assume cosmopolitan value, given that Europe’s principles are worked into conventions, treaties and international agreements (especially those reached within the framework of the United Nations) that transcend the purely European sphere.

Thus, the identification of interests as values clearly reinforces the normative dimension of the EU’s external action: put simply, in acting on the international stage, the EU intervenes in the modification of norms, pursuing its own values in so doing.

Similarly, pragmatism emerges in the new strategy as one of the principles that must guide European foreign policy, as we have indicated previously. At first glance, this might seem to suggest that Europe has espoused a vision more typical of Realpolitik, where utopianism is rejected and, therefore, the ends justify the means. However, this is not the case, since the pragmatism promoted by the EU in the document is clearly underpinned by idealistic aspirations, namely the values that the EU strives to export onto the international stage in order to move towards the “better world” it aspires to reach. Specifically, pragmatism is included in the strategy in order to meet the need for an analysis that is closer to the realities of third-party states, while nevertheless taking Europe’s own normative model as a reference. In this way, the EU seeks to correct erroneous analyses that could reduce the effectiveness of its external action.

Within the new strategy, resilience is framed as the third priority of the EU’s external action and is defined as “the ability of states and societies to reform, thus withstanding and recovering from internal and external crises.” The EU therefore takes into account the dimensions both of the state and of society, since both are indispensable when promoting the necessary changes. In the social dimension, democracy emerges as a crucial European aspect of resilience, with the document indicating that the pursuit of security depends on “a resilient society featuring democracy, trust in institutions, and sustainable development...”.

Still on the subject of resilience, Europe’s engagement in other parts of the world is multidimensional in nature, being related, among other things, to environmental disasters, humanitarian assistance, energy, culture and even the respect and defence of human rights. In this way, Europe seeks to manage uncertainty by focusing on the main weaknesses that third countries present in order to deepen its involvement in those areas where it can make a significant difference. This approach must be implemented even in those countries that do not wish to strengthen their ties with the EU. In this sense, the adoption of differentiated and specific (tailor-made) approaches, together with application of the pragmatism principle, is particularly important as it will allow the EU to look for new possibilities to achieve sustainable security.
 

6. The Repercussions of the Notion of Strategic Autonomy (Contained in the Global Strategy) on the Development of the Common Security and Defence Policy.

With the aim of achieving a common defence, the Treaty of Lisbon took a fundamental step forwards, addressing the question of the provision of instruments of self-defence for the Union, and therefore going beyond the narrower idea of crisis management. To this end, it improved the existing instruments of the CSDP, increasing the cases in which Petersberg tasks can be carried out (even including the prevention of terrorism). It also made it permissible for a Union mission to be entrusted to a member state or group of member states and simplified the procedures for financing tasks.

Given that the new mechanisms of the CSDP were already established by the Treaty of Lisbon — we refer to the defensive alliance, which implies territorial defence (Art. 42.7 TEU), permanent structured cooperation (Article 42.6 TEU), and the European Defence Agency (Art.s 42.3 and 45 TEU), which aims to strengthen cooperation in the area of capabilities —, any further development of the defence policy could only stem from the incorporation, into the Global Strategy, of the principle of strategic autonomy. The solidarity clause between the member states, allowing them to act to prevent and react to terrorist threats or natural disasters or man-made disasters (Art. 222 TFEU), was already incorporated into it.

Most relevantly, the true innovation of the Lisbon Treaty in relation to European defence was the mutual assistance clause, which is the core of the defensive alliance, demanding a mutual defence commitment on the part of the member states, a commitment even more binding than that required under article 5 of the Washington Treaty. Indeed, it is underlined (Article 42.7 TEU) that “if a member state is the victim of armed aggression on its territory, the other member states shall have towards it an obligation of aid and assistance with all the means in their power”.

In order to make this defensive alliance credible, the Treaty of Lisbon envisages the possibility of the existence of a permanent rapid intervention force that can respond immediately to an aggression. This is in fact the permanent structured cooperation referred to in Article 42.6 TEU, which establishes that “Those member states whose military capabilities fulfil higher criteria and which have made more binding commitments to one another in this area with a view to the most demanding missions shall establish permanent structured cooperation within the Union framework”. It therefore envisages that a group of states that have sufficient permanent military capabilities might, if they wish, implement them without the need for unanimity.

What this means is that since December 2009, the date of the entry into force of the Treaty on European Union, there has existed an authentic defensive alliance between the twenty-eight. In other words, since that time the European Union has in fact had a solid legal basis on which to launch a European defence policy. However, until a few months ago, it had remained impossible to do so, because the provisions of the Treaty of Lisbon, for various reasons, had not been implemented. Now, however, it would appear that the situation has changed, and that decisions are being made that will at last make the progressive implementation of a European defence policy possible.
 

7. The Decisive Steps in the Creation of a European Defence Policy: Permanent Structured Cooperation.

As a consequence of the implementation of the Global Strategy, several steps were taken in the course of 2016 and 2017 towards creating an EU defence policy. These included the Bratislava Declaration on a new relationship with NATO, the European Defence Action Plan, the progress made towards achieving an operational capacity, the creation of the operational headquarters, the European Commission’s launch of an investment fund for defence and, especially, the important steps taken towards permanent structured cooperation.

The Joint Declaration by the European Commission and the NATO Secretary General, following an informal meeting of 27 European Union defence ministers on 26 and 27 September 2016 in Bratislava, clearly showed that the EU and NATO are looking to establish a new relationship based on joint work and mutual support; it provided confirmation of a new climate and signalled acceptance of the Global Strategy. It was further elaborated upon in the conclusions adopted by the respective Councils, which include more than forty proposals.

This declaration is the breakthrough that will allow the European Union to develop its PESCO, since it is the first time that a clear cooperation has been established between these two organisations on the basis of their acceptance of the principle of compatibility, which allows the development of a non-hierarchical relationship. The development of a European self-defence mechanism, through PESCO, will become more evident once this is achieved.

The European Defence Action Plan, adopted by the European Commission and published on 30 November 2016, develops the Global Strategy for the European Union’s Foreign and Security Policy. Its objective is to create the conditions that will allow the ambitions of the Strategy to be realised. It presents different proposals, including a common defence market or the use of the Community budget, in order to help promote unity in the field of defence. The most ambitious proposal, which is already under way, is the creation of a European defence fund with two “windows”, one for research and the other for capability.

The European Council of 15 December 2016 set out to achieve “the establishment of a permanent operational planning and conduct capability at the strategic level, and the strengthening of the relevance, usability and deployability of the EU’s rapid response toolbox”, in order to make the principle of strategic autonomy, which will be developed in subsequent Foreign Affairs Councils, a reality.

In the course of 2017, various measures were taken, including the decision of the Foreign Affairs Council of 6 March 2017 to establish a military planning and conduct capability with the aim of immediately launching it to lead a group of crisis management structures that are already operational. This is considered to represent the embryo of a general headquarters; however, the creation of the latter was not decided due to the veto by the United Kingdom, based on its view that this should be an exclusively NATO headquarters.

The Foreign Affairs Council of May 2017 addressed the key principles of the governance scheme of the permanent structured cooperation. It reviewed some of the measures that illustrate the development and implementation of the first steps that were taken towards a defence policy, with the expectation that there would follow others in the same direction throughout the rest of 2017, a fundamental year in this field. Furthermore, in June, the European Commission presented its report reflecting on the future of Europe in the field of defence policy, in which it set the common objectives for 2025.

It has become essential to activate permanent structured cooperation, regulated by Articles 42.6 and 46 TEU and Article 1 of Protocol No. 26; this is a commitment made in Juncker’s agenda A New Beginning for Europe, as well as in various parliamentary resolutions, especially most recently, the European Parliament resolution of 16 March 2017 on constitutional, legal and institutional implications of a common security and defence policy: possibilities offered by the Lisbon Treaty, where Point 30 “underlines the importance and necessity of participation in permanent and efficient structured cooperation by all member states willing to advance their defence integration to the highest level of ambition” and says that it is believed “that a permanent ‘European Integrated Force’ (EIF) should be set up as a multinational force”.

Perhaps the most important decisions are those adopted by the European Council, on 22 and 23 June 2017, on the development of the CSDP, and especially on permanent structured cooperation. Its conclusion number 8 says that in order to “strengthen Europe’s security and defence in today’s challenging geopolitical environment and to help reach the level of ambition of the EU expressed in the EU Global Strategy, the European Council agrees on the need to launch an inclusive and ambitious Permanent Structured Cooperation (PESCO).”

This proposal is now being implemented following the decision taken at the Foreign Affairs Council on November 13, 2017, where the constituent act of PESCO was approved by all the member states except Denmark, Malta and, of course, the United Kingdom. Thus, PESCO and its thirty projects are now coming into being, both formally and materially.
 

8. Europe and a New World Order.

It is not clear that there exists a new world order. What is clear, at least, is that the liberal order and the multilateral system created in the wake of the Second World War is being sorely tested. The most significant changes are the loss of the relevance of the so-called Western bloc and the rise of the developing world: China and the whole of Asia in particular. Added to this is the United States’ successive abandonment of international multilateral institutions.

In the Western bloc, too, especially since Trump became US president, political and economic tensions between Europe and the United States have been growing, even to the point of threatening to trigger a trade war (a risk that was averted in July after a truce was reached between the President of the United States and the President of the European Union), as have tensions over security and defence.

With regard to this latter area, even cooperation within NATO is not at its best; and to this we must also add the problems with Russia (especially since its illegal annexation of Crimea in 2014), the ongoing problem of jihadist terrorism, and the tensions in the Sahel region, which have worsened in the past year or more. Against all this, however, we have seen the almost complete elimination of the so-called Islamic State as an actor with a significant territorial presence.

Contrary to previous expectations, the role of the European Union has been growing stronger, particularly since the Brexit referendum, as there has been an increase in the level of cohesion between the states, the institutions and the citizens. This has not only had the effect of considerably changing the citizens’ perception, as demonstrated by the latest Euro-barometers, i.e. those from winter 2016 onwards — these have shown better levels of acceptance of the European project, in some regards even better than the levels recorded prior to 2007 —, but also brought about a relaunch of the community process as a whole.

This situation has led the European Commission to dominate the negotiation of Brexit, which might still culminate in a UK-EU agreement amounting to “differentiated integration from the outside” (until now the UK’s differentiated integration has always been “from within”). Indeed, while the United Kingdom, from 30 March 2019, will cease to participate in the Union’s institutions as a result of its withdrawal, such an agreement would allow it to continue to belong to the European bloc, possibly as Norway does now.

Over the years, the UK has chosen not to participate in several important developments of the EU, such as the EMU, the Schengen Agreement on the free movement of people, and certain aspects of social policy, among others. In the future the UK will likely continue to participate in some aspects of European integration but will not participate in its institutions. This is what we mean by differentiated integration from the outside.

It will continue to be an economic partner and a neighbouring country; it will cooperate closely with the EU in the field of internal security; it will also participate to some extent in European foreign (and also security and defence) policy. In short, as we have seen since May 2018, when the President of the United States, Donald Trump, decided to withdraw the United States from the nuclear agreement with Iran, the United Kingdom has tended to align itself, alongside France and Germany, on the European side. At present, the United Kingdom, with all its peculiarities, is closer to Europe than to the United States.

This new international scenario not only enables but also requires the European Union to step up its pursuit of strategic autonomy in the policy areas of foreign security and also defence, so as to be able to lead world politics, especially in the field of international governance, where there is a particular need for international regulation of the kind being achieved through the application of the G20 proposals.

The December 2017 launch of PESCO and its rapid development over the following year provides the best example yet that strategic autonomy is not a theoretical principle, but something that is gradually becoming a reality and may possibly be achieved by 2027, which marks the end of the seven-year financial framework (2021-2027) wherein provision is made for a very sizeable (more than 30 per cent) increase in the EU’s spending on its Common Foreign and Security Policy and on defence. All this is borne out by the words of French President Emanuel Macron who, speaking on 27 August 2018, declared that “Europe cannot depend on anyone militarily”.

It is conceivable that PESCO might possibly become a European NATO, albeit in a timeframe of about ten years. This is due to the fact that one of its objectives is to lend credibility to the defensive alliance among EU member states envisaged by Article 42.7 TEU. To achieve this, there needs to be a rapid intervention force in place, ready to respond to possible aggressions. France’s recent invoking of Art 242.7 TEU, an initiative aimed at creating such an intervention force, represents an attempt to reduce the necessary timeframe, and in June it gave rise to a letter of intent signed by nine states including the UK and Denmark. The intention is to implement this intervention force in March 2019. In the joint Franco-German Meseberg declaration a few days later this intention was reaffirmed and linked directly to PESCO.
 

9. Conclusion: the Need for Federal Reform of the European Union and the Need to Debate this Issue in the Run-up to the May 2019 European Parliamentary Elections.

There are currently many signs that make us think that the relaunch of Europe is under way, in other words that the European train is back on track: a track whose construction was started in 1948 in The Hague, in preparation for a train that began to run a decade later in Rome. Over the years, the number of wagons in the train has increased and at times it has travelled at great speed. However, in the second five years of the 21st century, it found itself on the point of derailing, when the proposed Constitutional Treaty was abandoned following its rejection in referendums held in France and the Netherlands in May 2005. Subsequently, for the past decade, the train has been going very slowly.

However, ever since June 2016 and the Brexit referendum, expectations have changed. This is largely thanks to the conviction that the uncoupling of a very heavy wagon (the United Kingdom) that has thus far made it very difficult for the European train to advance will finally allow Europe to start moving once again. The train is now gathering speed and this is what allows us to state that the relaunch of Europe is under way, and that with the UK’s disengagement two months before the European elections — which, if not definitive, will certainly last at least five years —, we expect the European project, from 30 March 2019, to resume its journey along federal path first taken in The Hague and in Rome.

We say that the train is on track not only because Europe’s future is being rethought in the key areas, those of the most important milestones of European integration, but also because these initiatives are now being transformed into concrete proposals that are beginning to be taken up by the European institutions. In other words, these are no longer only good intentions.

A further demonstration that the new climate is producing effects is provided by the December 2017 appointment of Mario Centeno as President of the Eurogroup. In his two years as Portuguese finance minister in a leftwing government, Centeno managed to make European convergence criteria compatible with the development of a social policy. His appointment to as head of the Eurogroup possibly means that Europe’s policy of austerity is, at last, entering a different phase. Similarly, the new Spanish socialist government led by Pedro Sánchez, who took oath on June 2, will strengthen this new climate of relaunch of the European Union.

The train is moving. It is important to ensure that it does not derail and that it can continue to advance at ever greater speed, or to use instead President Juncker’s analogy, “the wind is in our sails” and accordingly we must take advantage of the window of opportunity that has now opened up to undertake the necessary reforms — reforms that could be introduced right now, such as some of the ones proposed in order to take advantage of the end of the Legislature and the various initiatives that have been prepared ready for implementation after the elections of 2019. Accordingly, the Spinelli Group in its manifesto dated September 4, has proposed a formidable roadmap for the IX Legislature 2019-2024, setting out the federal future of Europe.

The EU’s global strategy in recent months reflects this idea that “the wind is in our sails”, as it is allowing the Union to strengthen itself as a normative power, and seeing it taking the initiative in world affairs: in the application of new norms, in the battle against climate change, and in the stipulation of new commercial treaties, like the ones recently signed with Canada, Japan and Mexico, and the one that may soon be signed with the MERCOSUR countries (meanwhile, negotiations with New Zealand and Australia have already begun). The protectionist policy of President Trump and the withdrawal of the United States from the Paris Treaty on Climate Change, as well as UNESCO and other international organisations, are other circumstances serving to widen to Europe’s window of opportunity.

This situation facilitates and demands the assumption of greater responsibilities by the EU in world politics, and Europe is responding in this sense, as we have seen with the implementation both of its global strategy and, especially, its defence policy, and with the deployment over the past seven years of a European diplomacy (compatible with the diplomatic machinery of the member states), currently directed by HR Federica Mogherini, who is seeking to broaden the scope of European foreign policy, and break through its limits.

The distancing of European foreign policy from the foreign policy of the new President of the United States was clearly underlined by the aforementioned Mogherini during her first visit to the new United States administration in February 2017, when she also demanded that EU foreign policy be granted due respect, just as Europeans respect American positions. Over the past year and a half, her stance has certainly been backed up by actions.

To conclude, as we said earlier, Europe’s single currency has both a federalising character and a role as a federator. The President of the European Commission reiterated this in his most recent State of the Union Address, delivered before the European Parliament on 12 September: “we must do more to allow our single currency to play its full role on the international scene” and “the euro must become the face and the instrument of a new more sovereign Europe.”

13 September 2018

Francisco Aldecoa Luzarraga


* This essay is a reworked version of a lecture given at the 35th international seminar Federalism in Europe and the World, organised by the “Altiero Spinelli” Institute for Federalist Studies (Ventotene, 2-7 September, 2018).

 

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