Europe’s Global Role Dependent on Internal Reform

Peter D. Sutherland

The following text is an edited transcript of remarks made by Peter D. Sutherland to the 1999 annual meeting of the Trilateral Commission in Washington, D.C. Peter D. Sutherland, former Director-General of WTO/GATT, is based in London as Co-Chairman of BP Amoco and also Chairman and Managing Director of Goldman Sachs International.

The issues raised in some quarters in the United States on the pace of EU enlargement, linked to the debate on NATO expansion, demonstrate to many Europeans a fundamental lack of understanding about the essential nature of the integration process being undertaken here. It is often put to Europeans that there is no real reason why the accession negotiations with the first wave of Central and Eastern European states cannot be rapidly concluded. With Poland, the Czech Republic, Hungary, Estonia, Slovenia and Cyprus champing at the bit to join, and indeed becoming disillusioned with the demands being made of them, European politicians are often criticized for procrastination. They are also sometimes accused of creating conditions and attitudes in the countries in the next potential wave (and even in Russia) that may damage the course of democratization and economic liberalization over time.

Let us be clear—nobody in Europe is happy with the pace of the institutional reform process that is necessary to accommodate enlargement. Equally however it is readily apparent that substantial changes are required before any enlargement can take place. This is no trivial matter. As the EU is much more than a Common Market, and is in fact constructed on a supranational basis, European politicians bent on further deepening are constantly touching the nerve ends of national sovereignty in a manner that would not even be contemplated in the United States in the context of say, Nafta. The negotiation of necessarily reduced voting rights in the Council of Ministers and changes in representation in the Commission are issues that go to the heart of the democratic system as the EU can adopt legislation that overrides national laws. In addition there is the complication of the reallocation of scarce resources following enlargement. The requirement in some Member States to submit necessary treaty amendments to a referendum underlines the fundamental nature of debate that is taking place on the basis of the Commission’s document “Agenda 2000.”

Eurobarometer polls provide some evidence of changing opinions in Europe about the integration process and the EU’s external relations which further complicate the debate. There has been a clear decline in support for the EU as an entity virtually everywhere and the level of generalized support is now below 50 percent (with the United Kingdom at 35 percent). This statistic of course does not imply that a majority in any one Member State is for withdrawal from the European Union, but it is a matter of considerable concern nonetheless. Ironically the assessment of the support for European policy development suggests a wish for greater integration. For example current opinions on policy issues show that 73 percent of EU citizens support a common defense and security policy. Whilst 63 percent of Europeans agree with the principle of subsidiarity (which is based on the notion that the EU should only be responsible for matters that cannot be effectively handled by national, regional, or local governments), a similar percentage believe that the EU should have a common foreign policy.

The reality is that progress in developing a common foreign and defense policy is likely to be slow and hesitant notwithstanding the apparent understanding of the electorates of the need for progress in this field. Whilst the many, particularly in the United States, who prematurely wrote off the Euro should recognize that the momentum of integration, whatever its problems, is not to be underestimated, the difficulty in making progress in these areas is truly formidable. It would be helped most by an early and effective institutional reform establishing a greater degree of democratic control of policy than exists today.

The other positive element that may provide some momentum, notwithstanding current bickering about the ECB and diminishing value of the Euro, is the fact that the Euro has been successfully launched. It is of course crucial that EMU is seen now to work. Whilst nobody takes too seriously Martin Feldstein’s view that a collapse into war is a plausible outcome of Economic and Monetary Union, there is a clear need to demonstrate rapidly that it is working efficiently and is making a positive difference to the prospects of growth generation.

So in summary the EU’s global role, alongside its Trilateral partners, is highly dependent on successfully accomplishing internal reform. Successful internal reform will create more efficient decision-making procedures. It will also establish a significant external dynamic by bringing in new Member States, building confidence in the EU’s institutions and policies, and bringing the EU closer to its citizens. By contrast, a failure to achieve internal reform will seriously hold back the EU’s global role; enlargement would be put on hold, energies would be diverted to internal issues, confidence would evaporate and the EU would lose credibility and support among its citizens. The contradiction is that the EU needs time whilst, at the same time, the issues are urgent.

The only answer can be found in a dynamic leadership that is not yet evident in the Member States. The governments of Europe will need a visionary leadership that is prepared to confront the conflict between the realities of our time and the illusions of continuing independent power that still hang over the chancelleries of the larger European Member States. The issue of a common foreign and security policy is now firmly on the agenda. The successful launch of the Euro shows that the momentum of integration is not be be underestimated, however formidable the challenge is. Equally however, while Helmut Kohl, François Mitterrand and Jacques Delors provided real leadership on the EMU project, it is not apparent that there is anything approaching a similar coalition of strong committed integrationists available today.