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Europe's Troubled Politics

Interviewee: Charles A. Kupchan, Whitney Shepardson Senior Fellow
Interviewer: Bernard Gwertzman, Consulting Editor
January 23, 2013

Europe is marked by many contradictions these days, says CFR's Charles A. Kupchan. While there seems to be "positive movement" toward resolving the eurozone's economic problems, he says, political clouds are gathering. For Kupchan, British Prime Minister David Cameron's desire to renegotiate the UK's relationship to the European Union is a "worrying development." Cameron's challenge, he says, is to secure "a looser relationship that will succeed in sustaining public support and keeping Britain in the Union." And despite this week's celebrations of the fiftieth anniversary of the Élysée Treaty, Germany and France are increasingly divided over the future of Europe, with Berlin going its own way and Paris becoming increasingly more inward looking. France's recent decision to send troops to Mali, which garnered minimal German assistance, only underscores the problems in this key alliance, says Kupchan.

There's a lot going on in Europe these days. British Prime Minister Cameron is looking to renegotiate the UK's relationship to the EU. Meanwhile, the French and German governments are celebrating the fiftieth anniversary of the Élysée Treaty against the backdrop of a growing Franco-German divide. Is Europe falling apart, or is it coming together?

What strikes me most is the contradictory trend lines that characterize Europe today, in the sense that you have some positive momentum: the crisis over the eurozone and the indebtedness of eurozone members has ameliorated. The crisis is not over yet, but the vision that has been laid out for a fiscal union, a banking union, the readiness of the European Central Bank to be a lender of last resort--as well as the government of Mario Monti that brought financial stability to Italy--all of this has calmed the markets and provided a respite for the eurozone as it seeks to negotiate its way out of the crisis. And even though growth rates in the EU and the eurozone are not particularly robust, many analysts believe that the EU has hit bottom and that growth will begin to pick up over 2013 and 2014.

What about the political situation?

"The political landscape is much more worrisome than the economic landscape."

The political landscape is much more worrisome than the economic landscape, and that's because of several developments. The first is that the Franco-German coalition isn't what it used to be, and the celebration of the signing of the Élysée Treaty commemorates the moment at which reconciliation between France and Germany was consolidated and codified. The Élysée Treaty itself was not a big deal; it set out a schedule for consultations between German and French leaders, and it entails the pledge by both countries to work in lockstep. What we see today is a Berlin that, more often than not, goes its own way, and isn't as ready to consult Paris before acting. We see a Paris that is very much inward focused. There is very little public debate in France today about Europe. The debate is about getting the economy going, it's about immigration, and Europe has, to some extent, fallen off the radar screen in France.

The French have sent troops to Mali to support a former French colony, and Germany has shown no interest in helping out its ally in that military endeavor, just as it ignored NATO's involvement in Libya two years ago.

"The bargain that Germany has put in place to stabilize the eurozone entails a much deeper union, and an intrusion into the sovereignity of the nation-state--something with which Germans have traditionally been comfortable, but the French have not."

That is correct, and I think that the French activism is not unrelated to domestic difficulty. Both former president Sarkozy and current President Hollande have used foreign involvement to try to consolidate their domestic support. Meanwhile, the Germans have been very reluctant to engage in the projection of power to Africa. In the case of the mission in Libya, the government of Chancellor Merkel would not even agree to approve the mission in the UN Security Council [it abstained], so it was not just a question of refusing to participate--Berlin even refused to provide a political blessing. In the case of Mali, the Germans are very much sitting on the sidelines. And that there's another key difference that could become more important over the coming months: The bargain that Germany has put in place to stabilize the eurozone entails a much deeper union, and an intrusion into the sovereignity of the nation-state--something with which Germans have traditionally been comfortable, but the French have not.

Germans don't mind Brussels telling them what to do, and the French have long resented it.

Going back to de Gaulle, there has been a much greater attachment to the French state. And so one issue to keep an eye on as the fiscal and banking union take shape is: Are the French going to sign off on it? Will there be sufficient public support for a deeper union in a country that has historically clung tenaciously to important aspects of sovereignity.

Well let's cross the channel, because that's obviously a major problem in London right now, isn't it?

Yes. The eurozone is center stage, but off to the side is a very worrying development, and that is that the current government in the UK is trying to renegotiate Britain's relationship to the European Union. Cameron believes that he can distance Britain from the EU, and in so doing, create a looser relationship that will succeed in sustaining public support and keeping Britain in the Union.

What would he like to do specifically there?

"Even if Cameron succeeds in negotiating a more distant relationship, Britain could, over time, find itself so marginalized that it decides to leave the Union."

Specifically, he would like to see more of a two-tiered Europe, in which there is a eurozone that moves more quickly and more deeply, and an outer circle that embraces a more shallow form of integration, where budget responsibilities would be different. That is to say that Britain would carry a smaller share of the financial burden. He wants to repatriate certain powers from Brussels to London, particularly on questions of social policy, home affairs, and judicial issues. And, in general, he would like to put more distance between the political formation deepening on the continent and what's happening in the United Kingdom. It's a very dangerous gambit, because right now you have seventeen eurozone members and ten non-eurozone members, so Britain has good company in the outer tier. Most of those countries in the outer tier, however, ultimately want to join the eurozone, and one can envisage an EU in the not-so-distant future in which Britain is the odd man out. And even if Cameron succeeds in negotiating a more distant relationship, Britain could, over time, find itself so marginalized that it decides to leave the Union. The other problem on this front is that Cameron is edging toward holding a popular referendum because he believes that British membership in the European Union needs broader public legitimacy. Right now, if that referendum were held, Britain would quit the European Union.

He wants to hold the referendum after the next general election in 2015, right?

Correct. And that in part depends upon what happens in the next general election. But he's throwing a bone to the eurosceptics in the Conservative Party who have been pushing for this. And, you know, referenda in the European Union have generally not gone well. France and the Netherlands rejected the Constitution, and the Irish have backed away from the EU in referenda, so it's a dangerous gambit.

And the United States is concerned, isn't it?

Yes, Washington is concerned that were Britain to leave the European Union, the EU would be weakened. Britain has been a very important member of Europe; it is a major economic power; it has played a role in the liberalization of the European economy and helped guide enlargement in a way that is consistent with American interests. And there's also concern about what would happen to Britain as one of America's key partners in the world. If Britain is unattached to Europe, it may begin to become a less relevant player, and it's conceivable that over time Britain slips into geopolitical irrelevance.

That's hard to believe, but I suppose it could happen.

Yes. The other twist here is that in 2014, the Scottish will hold a referendum on secession. At this point, the polls suggest that that vote will go against secession. But who knows? So it's conceivable that one could see a double whammy: Britain leaves the EU and Scotland leaves the UK. And just to give you a little sense of the implications of that: All of Britain's nuclear submarines, its key deterrent, are based in Scotland, at a naval base called Clyde, which is about twenty-five miles west of Glasgow. What would happen if London wakes up in the morning and its nuclear submarines are in someone else's country?

I suppose they would have to have a treaty, right?

My guess is you'd probably be looking at something not unlike what happened when the Soviet Union dissolved, with Russia leasing a naval base from Ukraine.

The irony is that Chancellor Merkel has general elections in Germany in September, and she's extremely popular in the polls, but the ruling coalition with the Free Democrats doesn't seem to be doing that well.

Merkel has sustained impressive popular support throughout the crisis, which is not altogether surprising because she's been in the driver's seat. And the bargain that's now on the table is really a bargain that was designed by Germany and reflects Germany's preferences in the sense that Germany is ready to start writing checks to keep the eurozone afloat as long as the member states play by Germany's rules. And most Germans are, as a consequence, comfortable with her. The coalition partner of the Christian Democrats has not fared well at all. They are way down in the polls, and for that reason many people believe that Merkel will be the next chancellor, but that she may be governing a grander coalition of Social Democrats in alliance with the governing CDU.

Would that weaken her ability to govern?

It would not be a huge setback, and that's because the Social Democrats and the Christian Democrats have been converging of late. There's an enormous ideological gap between the two parties; what's been happening in Germany is that the CDU and the Social Democrats still dominate, but they have been losing market share to smaller parties on the right and left, many of which are more skeptical of the EU. But at least for now, the two main parties are still pro-EU and not that far apart on most issues.

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