A year of uncertainties brings the need to connect with the new dynamic areas of the world

Italy
Istituto Affari Internazionali
 
In the last months, many opinions have been expressed in Italy on the way the European Union intervened in reaction to the financial crisis. In this context, the expectations towards the EU are quite high, since it is common opinion that nowadays “the globalised market is too complex to be managed at a domestic and national level”[1] and therefore there is great confidence in the role that Europe can play in the hard times we are going through. In this regard, it has been noted that, after the initiatives undertaken by the European institutions to face the financial crisis, “the public opinion may have a different perception, a more positive one, of the role that the Union can play”[2].
 
The confidence in the European Union is due to the fact that the EU has some advantages that can be usefully exploited in this situation. Tommaso Padoa-Schioppa, former Italian Minister for the Economy, said that Europe is strong for different reasons: its balance of payments is in equilibrium and there is monetary stability; the idea that the market is always efficient is less deep-rooted than in the United States; the welfare state in Europe is more developed than in other parts of the world and it makes it easier to face this kind of crisis.[3] The Italian shadow foreign minister Piero Fassino said that there is a contradiction in the economy nowadays: while the production systems and consumer demand are globalised, these processes are still managed by many small national governments and by weak international organisations. In his opinion, the only possible answer to this discrepancy is to increase the power of regional organisations, of which the European Union is surely the most developed.[4]
 
Coordination of the interventions promoted in Europe after the Ecofin meeting in October 2008 has been judged positively by both Italian experts and politicians. However, in the opinion of some of them, there is still a lot of work to be done, because the European answer to the financial crisis has several inherent ‘costs’: the suspension of some fundamental principles of the common market, such as the prohibition of state aid; the softening of some fiscal and budgetary rules; the temporary renunciation of a higher level of financial integration in Europe; the marginalisation of the European Commission in favour of the intergovernmental approach.[5] In particular, some journalists highlighted that, during the financial crisis, the intergovernmental approach has come out again as a result of the will of different EU member states to pursue their own domestic interests and to safeguard national actors as much as possible.[6] This is why these analysts fear that the crisis “will act as a detonator […] and put the acquis communitaire under discussion again”[7], affirming that Europe will have to beware of not losing the progress achieved in the field of economic integration and productivity.[8] However, not all Italian commentators consider the use of the intergovernmental approach negative. Some of them believe that in this situation the European Union has successfully used the ‘vanguard approach’, already applied in other circumstances in the past: the need for a quick answer to the international economic crisis has led the major EU member states to work together to prepare a plan to face the challenge.[9] Moreover, for once Europe has been a model for the United States and not vice versa.[10]
 
Some Italian analysts also believe that the present situation could be an opportunity for Europe to show its great potential. Maria Teresa Salvemini suggested three possible ‘European’ solutions to the current crisis. First of all, it would be useful to make the limits imposed by the Stability and Growth Pact less strict, allowing temporary budget deficits in situations of economic crisis. Secondly, she proposed establishing a ‘European plan’ that would make use of European financial resources, gained by issuing EU bonds (‘Eurobonds’). Finally, she proposed an agreement within the Eurogroup aimed at harmonizing the budgetary policies by using the same instruments and rules. According to Salvemini, these proposals would be even more efficient if they were all undertaken together.[11] As she wrote in her article, “the time for Europe in this field has come: now it has to make the best possible use of it”[12].
 
To conclude, the Italian public opinion has perceived the performance of the EU in the financial crisis positively, even if some questions still remain unsolved and some aspects of the European approach may need to be revised. Anyway, as the Italian journalist and historian Sergio Romano noted, even if the European answer to the crisis was not as coordinated as expected, at least Sarkozy’s initiatives and the anti-crisis plan have made Europe “more visible and more efficient”. Therefore, in a certain sense, it may be affirmed that the crisis has not had only negative effects on the European Union.[13]
 
Expected shifts in the international power constellation
 
The year 2009 is expected to be a year of change in the international environment as the result of many factors that will surely influence the present power constellation.
 
The first factor that will inevitably affect the future balance of power is the election of Barack Obama as President of the United States. The new US administration’s multilateral approach to foreign policy implies that it will look for reliable partners to intervene wherever it is necessary in the world. For this reason, many Italian commentators consider 2009 the year in which the European Union will have the possibility to play a key role on the international scene. For the United States, the Europeans are “the only allies who can seriously contribute to the stabilisation of crisis areas where American soldiers are engaged”[14]. Of course this is the case of Afghanistan and the tribal provinces of Pakistan, but there are also other areas of the world in which the EU can use its diplomatic, economic and even military power to act as a stabilising factor.
 
The first area of intervention should of course be the Middle East. The European Union is expected to play an important mediating role in the Gaza conflict; here the EU member states could have “a higher level of engagement”, proportionate to the financial support that in the last years they have spent on stabilising the region, which is of the highest interest for them.[15]
 
Secondly, the EU will be a fundamental partner for the United States in the definition of a new relationship with Russia. It is common opinion that Russia is one of the pivotal elements of the future international power constellation. Especially after the crisis in Georgia, there are many reasons to re-establish communications with President Medvedev and his entourage. First of all, in the last months Russia has been a factor of division both inside the European Union and in the transatlantic framework.[16] Secondly, it will be impossible for the European Union to re-stabilise the Caucasus region and to implement its Neighbourhood Policy without a cooperative approach towards Russia.[17] Thirdly, it is desirable to have better relations with a country that is one of the most important energy providers for the West. For all these reasons, it would be important for the EU to start an open dialogue with Russia in order to soften the tensions between this power and western countries.[18]
 
The other uncertain issue is the role that the so-called ‘rising powers’ will play. In particular, especially after the problems brought on by the financial crisis, it will be fundamental both for the US and the EU to promote an open and stable relationship with China. In the last months, there has been great concern in Italy for the future of EU-China relations. The deferment of the EU-China Summit planned for the beginning of December 2008 has been considered by Italian commentators as just “the tip of the iceberg of the deterioration of Sino-European relations that has occurred in the last years”[19]. Considering that China is one of the most powerful emerging economies and that its market is strongly linked to that of Europe – the EU is China’s first trade partner and China is the EU’s second trade partner after the United States – Italian analysts affirm that it is necessary for both China and the EU to cooperate to establish a good relationship again.[20] In their opinion, “it is fundamental for both Italy and Europe to get connected with the most dynamic areas of the world”, among which, China.[21] At present, the visit of Chinese Prime Minister, Wen Jiabao, to Europe seems to be the first step towards a renewed partnership. This is even more important when considering that this trip, planned several months ago, will take place before any official Chinese visit to the new American President Obama.[22] In this sense, the European Union could be the first to build the foundation for stronger links between China and western countries, the United States included.
 
The year 2009 will surely be characterised by uncertainty: many different changes are expected to occur and it is not easy to forecast how they will interact with each other. However, for the same reason, 2009 will also be a year of opportunities: the present financial crisis will probably provide the stimulus for a general reform of the global governance and of international institutions; the conflicts that occurred in the last months (Tibet, Georgia, Gaza) are likely to bring about deeper engagement of the main international actors and deeper cooperation among them; the multilateral approach of the new US President will probably be the platform for a more equal and balanced transatlantic partnership. Many analysts believe that the time has come for Europe to seize these opportunities. However, to make it happen, the EU will have to be more cohesive and ready to intervene in those areas where it can make a difference; it will have to show the other global powers, especially the new US administration, that it has the will to get involved in defining a new international balance.




[1] M. De Andreis/M. Marè: La crisi finanziaria e l’Unione Europea: quali insegnamenti per la governance europea?, 28 October 2008, available at: http://www.astrid-online.it/rassegna/28-10-2008/MARE-_DE-ANDREIS_governa... (last access: 25 January 2009).


[2] M. T. Salvemini: Tre opzioni per una risposta europea alla crisi finanziaria, Affari Internazionali, 8tNovembre 2008, available at: http://www.affariinternazionali.it/ (last access: 25 January 2009).


[3] Interview to Tommaso Padoa Schioppa, in: Il Regno 18/2008, available at: http://www.ilregno.it/it/rivista_articolo.php?RID=0&CODICE=49211 (last access: 25 January 2009).


[4] See: L’Unione Europea e questa lunga crisi, Extrait du Euros du Village, available at: http://www.glieuros.eu/IMG/article_PDF/L-Unione-Europea-e-questa-lunga,2... (last access: 25 January 2009).


[5] M. De Andreis/M. Marè: La crisi finanziaria e l’Unione Europea: quali insegnamenti per la governance europea?, 28 October 2008, available at: http://www.astrid-online.it/rassegna/28-10-2008/MARE-_DE-ANDREIS_governa... (last access: 25 January 2009).


[6] M. Marchi: L’Europa di fronte alla crisi finanziaria prova a salvare la faccia, L’Occidentale, 3 October 2008, available at: http://www.loccidentale.it/ (last access: 25 January 2009).


[7] M. De Andreis/M. Marè: La crisi finanziaria e l’Unione Europea: quali insegnamenti per la governance europea?, 28 October 2008, available at: http://www.astrid-online.it/rassegna/28-10-2008/MARE-_DE-ANDREIS_governa... (last access: 25 January 2009).


[8] C. Altomonte/M. Nava: Bruxelles salva Wall Street? La governance dell’economia europea e la crisi finanziaria, ISPI Policy Brief No. 99, October 2008, available at: http://www.ispionline.it/it/documents/PB_99_2008.pdf (last access: 25 January 2009).


[9] See: La crisi finanziaria e i nuovi equilibri mondiali, in: ISPI – Relazioni internazionali 30/2008, available at: http://www.ispionline.it/it/pubblicazioni.php (last access: 25 January 2009).


[10] Ibid.


[11] M. T. Salvemini: Tre opzioni per una risposta europea alla crisi finanziaria, Affari Internazionali, 8tNovembre 2008, available at: http://www.affariinternazionali.it/ (last access: 25 January 2009).


[12] Ibid.


[13] S. Romano: L’Europa nella crisi. Un passo verso l’unione, Corriere della Sera, 3 November 2008.


[14] L. Caracciolo: Il nuovo ruolo dell’Europa, Limes online 22 January 2009, available at: http://temi.repubblica.it/limes/il-nuovo-ruolo-delleuropa/ (last access: 25 January 2009).


[15] Ibid.


[16] M. Massari: Obama di fronte alla sfida russa, Affari internazionali, 5 November 2008, available at: http://www.affarinternazionali.it/articolo.asp?ID=980 (last access: 25 January 2009).


[17] E. Greco: Il rapporto tra la Russia e l’Unione Europea: come rilanciare la cooperazione in vista del rinnovo dell’accordo di partenariato, Discorso tenuto in occasione della IX riunione della grande commissione Italia-Russia, in: camera dei Deputati, Documenti IAI 0830, Roma, 24/25 November 2008, available at: http://www.iai.it/pdf/DocIAI/iai0830.pdf (last access: 25 January 2009).


[18] M. Massari: Obama di fronte alla sfida russa, Affari internazionali, 5 November 2008, available at: http://www.affarinternazionali.it/articolo.asp?ID=980 (last access: 25 January 2009).


[19] N. Canarini: Un New Deal tra Europa e Cina, Affari Internazionali, 10 December 2008, available at: http://www.affarinternazionali.it/articolo.asp?ID=1022 (last access: 25 January 2009).


[20] Ibid.


[21] S. Fagiolo: La paura della Cina, in: Aspenia, 41/2008, p. 233.


[22] See: Usa-Ue-Cina, triangolo ad alta tensione, la Repubblica, 26 January 2009, available at: http://www.repubblica.it/2008/06/rubriche/piazza-asiatica/cina-usa-ostil... (last access: 25 January 2009).