EU Watcher

Daniel Keohane is research director at FRIDE, a European think-tank for global action. I talked with him about the position of Europe in the world, the current economic crisis and the rise of the BRICS. As a variation of interview styles, I will present his most important quotes in one go.

“If we look at the world in 2030, there are a few big trends we should consider. One is the way the world economy is changing. We are all aware of economic power shifting from the US and Europe to China, India, Brazil and so on. The non-OECD world may account for more global GDP by 2030, than the OECD countries.

Also most of the demographic growth will occur in the non-OECD world. We will have a large middle class by 2030. We will see more urbanization. Most of the growth will take place in East Asia in particular, and that will have a profound effect on resources, will raise very interesting questions on things like climate change. Trade patterns are going to change, supply chains are going to change, but there will be ongoing interdependence. That is a very key point.

Then how will a multipolar world change politics? Will the global system look more western? That is a very open question, and a very debatable one. If you look at GDP growth, military spending, research and development, demographic growth, it is clear that the BRICS are rising.

However, we should not assume that these trends will be linear. These rising countries are huge with massive socioeconomic challenges. The demand for growth to sustain social peace in these countries is huge. We cannot assume that they will pursue very smooth paths to the future. So I am less concerned of the rise of the BRICS in terms of strength, I actually have big questions about their potential weaknesses, and what knock-on effect that will have on global politics and the global system as well.

Europe’s credibility at the moment has been quite damaged. But we are quite well prepared for the future. We are still the largest economy and the largest trading bloc in the world. This is the richest and most peaceful region in the world.

Where we really have an advantage, is how global governance may change. In many ways global governance will start to look the way the European Union works. You see many non-state actors like cities, businesses, that make governance much more complex. Consider how the group of cities ‘C40’ leads the discussion on environment at the moment. Now the EU is used to cope with different policy issues at different levels. At a regional level, between member states, with actors like China and the US, with non-state actors be they cities, NGOS or businesses. And what you will see is many different coalitions on different issues, and within the EU we are totally used to this approach.

There is a lot of potential for conflict in East Asia, from border to maritime issues. Look at China’s tensions with Japan at the moment, look at the tensions in the South China Sea, look at how the situation in Afghanistan and Pakistan could affect India’s security situation. They are in a completely different security environment than where Europe is in today.

These conflicts could spiral out of control, and the really big question is how the relationship between the US and China will evolve. Would they ever go to war? I am not sure if that is likely, but a defence planner would never rule that out. The huge question for Europe is how they will manage the relation between the Americans and the Chinese.

Keohane2Russia’s challenges are quite different. They actually don’t have demographic growth, quite the opposite. They are very dependent on petrochemicals and other fossil fuels for their economic growth, and shale gas might have a big impact on their prospects. In reality the Russians feel strategically threatened by NATO and China as well. The eastern provinces and Central Asia countries are becoming quite dependent on China’s economic growth. This raises new challenges for Moscow even though Russia and China are quite friendly. Over the long term their relationship could become more complicated.

For Europe we have our own broad neighborhood, which currently is very turbulent, from Syria to Ukraine. We are bound to see trouble in the future. In the Levant and in North Africa we are looking at countries with long transition phases. We will see lots of ups and downs, not just because of sectarian tensions and the current problems of transition. But also because of longer term demographic trends. They will have large population growth and a shortage of resources, particularly fresh water. I am not sure they will cope very easily with the huge socioeconomic challenges ahead of them.

When it comes to defence, strategy is more noted for being absent than present. The EU as a whole – 500 million people, 14 trillion euro economy, 200 billion spent on defence, doesn’t show a lot of European defence policy in fact. Most of the spending goes through NATO.

There is also a clear trend of Europeans having to act alone or at least take a lead of crisis in their neighborhood. Russia and Georgia in 2008: they acted through the EU. Libya in 2011: France and Britain ended up acting through NATO. Mali in 2013: France acted nationally but then with some European and American support.

Schermafbeelding 2014-02-12 om 11.47.51But defence policy is not a priority for national politicians at the moment. Not just because of the economic crisis but because using military force has lost a lot of credibility, is unpopular, because of Afghanistan and Iraq which are perceived to have been failures. Look at the difficulty Prime Minister Cameron had in convincing his parliament to intervene in Syria in 2013. And Britain would not be considered hesitant in using military force, and is a leader in military within Europe.

Many European policies were born out of crises, like defence policy started after the Balkans wars in the 1990s. This is the big danger: things have to go very wrong before we realize that we need to cooperate much more closely.

Yes, Europe could become a leading continent in the 21st century. We shouldn’t forget that we are extremely rich. Brazil and China are rising but their per capita income is way below ours, even that of Greece. We are a very large trading bloc which gives us certain amount of weight, and if we emerge from the crisis intact and we managed to create growth as well, we will get a lot of credibility back. And if China grows more slowly then our continent could become more attractive to investors.

There are a lot of reasons why Europeans can be confident about the future. The trick will be, where we will have a lot of difficulty, is can we really develop a common sense of European interests? We talk a lot about European values in our foreign policy messages to the rest of the world. But the European interests are usually an amalgam of national interest. We are not very good at creating a sense of a common interest. If you are in Beijing or in Washington, you don’t care about what the UK alone, France alone or Germany alone thinks. You would care what 28 governments together would think.

The federal state is a logical solution but I don’t think this will happen. We will not see a European superstate in the next twenty years, nor a European army. I don’t think any government will give up its sovereignty on defence policy. On the other hand we can’t do much unless we combine our military resources.

The real trick is if the big three countries – UK, France and Germany – can develop a better understanding of their common interest, when it comes to foreign policy and our place in the world. At the moment Germany is focused on Russia, France is focused on North Africa and the Middle East, and Britain is still focused on the US agenda. Can they find a way to satisfy their strategic interests and work together more effectively?

On the elections: you will get a more extreme parliament than your national parliament. What’s curious is that so many extremist parties have not been elected into government since the economic crisis broke out. But on the EP: I still think the leadership will come from the biggest parties.

Their first priority has to be economic growth. Then on trade and energy security, and we still have to care about national law supporting global governance. The EU is in the end not just a peace project, it is a project based on law. The European Union is about the force of law and not about the law of force. We have to keep thinking very hard how to keep developing global governance, how to temper global competition, and encourage cooperative relationships.”

Watch the full interview with Daniel Keohane here (18 minutes):


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