Europe’s Challenges

10.05.18 Publication:

Europe faces a severe test of its resilience, its coherence, its self-sufficiency — the toughest, in fact, since 1945. Deserted and attacked by its closest ally, the United States, the European Union now has to show its true mettle, just when its internal battles, over migration, economic weakness and the fundamentals of democracy, leave the balance between populists and established political parties still in a precarious state.

Just two years ago, one would have said that Europe’s most worrying external threats came from Russia to the east and Islamic State to the south, threats which also divideD Europeans among each other. Now, however, the worst threat comes from across the Atlantic where President Donald Trump’s withdrawal from the Iran nuclear deal and insistence on imposing tough economic sanctions on any European companies doing business with Iran, puts European governments in a nearly impossible position.

The Iran deal had been 12 years in the making, with diplomats from France, Germany, the UK and the EU working together with the Americans in what seemed an unprecedented foreign-policy success. This western alliance was so coherent that Russia and China felt obliged to sign up to its method of constraining Iran’s nuclear-weapons development despite having competing strategic and commercial interests in Iran.

Now that deal, and with it the western alliance itself, has been shattered, in a humiliating manner. Visits to Washington by Emmanuel Macron, Angela Merkel and the British foreign secretary Boris Johnson to try to persuade President Trump to remain in the Iranian deal his predecessor had signed just three years ago, were treated with contempt. And at the same time, the Trump administration is embarking on a trade war with China in which Europe looks set to be caught in the crossfire.

The predicament for Europe’s leaders, whether in Berlin, Paris, London or Brussels, is severe. To stand with Iran, and against the governments of both Israel and the United States, would be very uncomfortable. To respond by seeking a rapprochement with Russia, Iran’s ally in Syria, would be painful, even though several EU leaders may favour closer relations with Vladimir Putin. To seek common cause with China, whether over trade or Iran, would feel perverse.

So what is to be done? The answer must begin with some form of defiance against President Trump and his disdainful treatment of international treaties and alliances. Europeans will, and must, hope that future presidents after 2020 or 2024 will rediscover the value of the Transatlantic alliance and of the international rule of law. But to make that likelier, Europeans must meanwhile stand up for the global principles they have long asserted.

It is unlikely that, in the face of American sanctions, most big European companies will feel able to continue their business with Iran without disruption. But EU leaders can provide some support and guarantees to limit the damage, and to convince Iran’s regime that it is worth continuing to try to save the nuclear agreement, perhaps with other powers including Russia, Turkey and China, being involved.

The fundamental requirement, however, regardless of the outcome over either Iran or Trump’s trade war, is to repair Europe’s economies, reduce popular anger and anxiety over inequality and over migration, and thereby deal with the causes of political instability, nationalism and populism.

Without stronger economies and societies, which must be built at home, European countries will never be able to hold their heads up high and operate any real sort of foreign and security policy independent of the United States. Look at the admirable efforts being driven along by Federica Mogherini, EU High Representative for foreign and security policy, to build a proper, collaborative effort of defence, border policing and development aid in the Mediterranean and North Africa.

It is the right policy, one that is even bringing some benefits in the control of migration flows through the Sahara desert and Libya, but it has insufficient resources and, really, insufficient political will for it to have the chance to be in any way transformational.

The changes that are needed begin with fiscal policy: a revised EU fiscal pact to permit greater capital investment and so faster growth. They move on to moves to strengthen the euro by completing a banking union that will make finance safer. And they require greater investment in, and collaboration over, defence.

They also require leadership and political will. That is where the biggest challenges lie.