The Future of Europe: The EU at a Crossroads

Jeffrey Anderson

Graf Goltz Professor and Director, BMW Center for German and European Studies, Georgetown University

David O'Sullivan

Ambassador and Head, Delegation of the European Union to the United States

Constanze Stelzenmüller

Robert Bosch Senior Fellow, Brookings Institution

Arshad Mohammed

Diplomatic Correspondent, Reuters


Experts reflect on the development of the European Union (EU) since its creation with the Treaty of Maastricht twenty-five years ago, and evaluate the future of the EU and challenges that lie ahead.


MOHAMMED: Good afternoon. Welcome to today’s—welcome to today’s Council on Foreign Relations meeting entitled “The Future of Europe: The EU at a Crossroads.” I’m Arshad Mohammed, diplomatic correspondent for Reuters, and I’ll be presiding over today’s discussion.

We have an excellent panel today. We’re delighted to have Jeffrey Anderson to my right, the Graf Goltz professor and director of the BMW Center for German and European Studies at the Edmund A. Walsh School of Foreign Service at Georgetown University. Last year Mr. Anderson, Jeff, won Germany’s highest civilian award, which is the Officer’s Cross of the Order of Merit.

Next to him we have Constanze Stelzenmüller, who is the Robert Bosch senior fellow at the Center on the United States and Europe at the Brookings Institution. She is a recovering journalist, having served as an editor for Die Zeit for more than a decade.

And to her right is Ambassador David O’Sullivan. He’s the head of delegation of the European—of the Mission of the European Union to the United States.

All of their biographies are in your packet. The one thing I would mention about Ambassador O’Sullivan is that he is a graduate of Trinity College, Dublin. While he was there, he was the gold debating—he was the debating gold medalist of the College Historical Society. So you have been warned.

STELZENMÜLLER: We’re going to have to try harder.

MOHAMMED: Thank you all for joining us. We’re not going to have opening statements. Rather, we’re just going to plunge into questions amongst the four of us for about half an hour, and then we’ll open it up to questions from all of you.

I’d also like to welcome those Council on Foreign Relations members who are watching this on the webcast.

To start with, I’d like to look at a question which I call what went wrong? We’re now in a period where the very idea of Europe seems to be under some challenge, most obviously with the Brexit vote, but also with populations in parts of Europe that are increasingly hostile to the idea itself.

Nationalism and nativism seems to be on the rise on both sides of the Atlantic. And I’m interested in knowing—and if I might turn to you, Mr. Ambassador, first—what do you think are the root causes of this? And how durable a phenomenon do you think it might be?

O’SULLIVAN: Well, thank you very much. And I’m very pleased to be here.

As we were discussing earlier, I mean, I’m not—I’m not entirely sure I agree with the premise of your question, you know, where did it go wrong, because I don’t think it necessarily has gone wrong in that sense. I’ve been working with European institutions since 1979, and there’s always been a cyclical element of, you know, moments of great optimism, moments of a sort of sense of forward movement, and then, frankly, moments of a feeling that things are not going so well, and even Euro-pessimism and Euro-sclerosis we’ve talked about.

So I profoundly believe myself that what we’re going through now is one of those sort of downturns in the cycle, which, you know, I’m not naïve. I’m not saying that all the points you make are not valid, that we have a large number of challenges. But there are conflicting sort of measurements out there. If you look at election results, you do see—I mean, you obviously have the Brexit vote. I’ll come back to that in a moment. But you have nationalist parties, Euro-skeptic parties, seemingly on the rise.

But if you look at the Eurobarometer polls, which is the sort of regular polls that the European Commission does, I think, every month or every three months, and has been doing for the last, you know, 20 or 30 years, you will see that support for the European Union and trust in the European institutions, that actually is very high. And there’s quite strong support for European integration amongst—in many of our member states. And indeed, after the Brexit vote, support for the European Union spiked in almost all the other 27 countries.

So—and you’ve seen the Pulse of Europe movement of young people and not-so-young people coming out on the street actually protesting and manifesting in support of Europe. So there are conflicting trends.

Why is there a growth of Euro-skepticism? I think there’s a very strong relationship between economic performance, economic growth, and a sense of well-being about Europe. So I think we’re definitely experiencing the sort of backlash of the economic downturn, the crash. And while many countries are coming out of that, and some, like Germany, are even doing very, very well, the fact is, many people still feel resentful and people feel that this went very badly for them. And there is a natural tendency to attribute some of that, if not much of that, to Europe.

The other point—and I just make—I mean, I’ll make two additional comments; I don’t want to monopolize the conversation. The Brexit vote, in my view, is relatively British-specific. I mean, one can debate that. But I think, you know, if there was ever a country that was going to have that referendum and have that result, it probably was the U.K., which has always had a sort of slightly semi-detached view of the whole European thing.

So I think it’s wrong, I think, to extrapolate from that that this is then a Europe-wide trend. I deeply regret the British decision. It’s hard to describe the sense of personal sadness I feel at that decision, really. But, you know, we recognize the outcome and we will have to figure out how to let this happen in the least damaging way possible for all concerned.

But the final point I’d like to make is one I really believe, after, you know, whatever it is, 35 years of the European institutions, and working with Europe and participating in debates and discussions about how you build Europe, and it’s this. There has been a tendency in all national politicians towards what I call the nationalization of success and the Europeanization of failure.

So, when something goes well, they come back from Brussels and say, wow, you’re so lucky I was there, because I managed to get these people to decide something that’s really good for our country. And it’s a great decision, and I managed to obtain it.

Then, if it’s a tough decision, not necessarily a decision that was opposed by the country in question but one which is a bit painful, they come back and say you’re not going to believe what we have to decide in Brussels. I’m very sorry. I could do nothing. It was all decided there. I couldn’t.

You do this consistently over 20, 30 years, people are not foolish. They kind of think, ah, yeah, good things come from our national system, and Brussels largely delivers bad news or only has good news extracted from it by the efforts of our national politicians. Don’t get me wrong. I’m not a politician. I don’t have to stand for election. I have enormous respect for people who have to do that. But there is a sense in which people come away thinking, so what’s so great about this European Union? And then you turn around and you find you have to say, at some point, referenda. We had them in Ireland for various treaty changes; in France also, and the Netherlands and Spain.

Then you say to people, actually, the European Union is the greatest thing ever. You will not believe what great things it does for you. And people say but that’s not what you were telling me last year. And I really think we have a problem. And if this project is going to go forward, I think we need a much more open dialogue between our national politicians and our citizens about why the European Union actually delivers real benefits and what are the limits of sovereignty of any of our member states, even the largest in the 21st century, and why working alone and trying to do it on your own will not deliver the outcomes that our citizens actually want.

And I really think that’s a debate that needs to be engaged. And you need to engage it before you start asking people to take a critical decision about whether they want to stay or leave or voting on some treaty which they hadn’t heard of until it was put on the agenda.

MOHAMMED: Constanze, may I ask how you see things?

STELZENMÜLLER: Well, I certainly share the ambassador’s sadness about Brexit. I feel the same way. Having spent part of my childhood in England, I feel sort of cultural roots there. And I also think, frankly, that Brexit is an act of self-harm for Britain; not least, I think, that Brexit—rather, the arguments, the criticism logged at the EU by the Brexiteers could, with at least equal justice, be logged at London and at a highly centralized government in the U.K., one of the most centralized in Europe, which, I think, for centuries, really, certainly in the postwar period, has struggled with real devolution of powers and with supporting, genuinely supporting, the peripheries of Britain and its—some of the people who have supported Brexit in those same peripheries are now deeply worried about the disappearance of EU cohesion funds and structural funds that have played a fairly significant role in their economies, whether it’s in Wales or elsewhere. So that, I think, will prove to be a sort of very, very difficult process.

The other part of this is, because I have a legal background, I’m still in touch with those of my friends who stayed on the straight path rather than the crooked path and stayed in the law. I know that some of you may disagree with this theory, that that’s a straight path. And some of them practice law in Britain and have written lengthy emails to me saying, you know, what this amounts to is more or less us forgoing body of law that has played a really important role in our own polity.

And some of you will have heard me use this metaphor before, but it seems to me that, certainly in legal terms, Brexit will amount to really ripping out a healthy organ from a healthy organism, and that’s going to be damaging to the tissue of both the organ and the organism.

I also think, like the ambassador, that this is a fairly singular story in Europe. I am very worried about the French elections certainly, but I don’t think—well, we can perhaps talk about that a little more, but I don’t think quite the same concerns are going on there.

There is one overarching concern, I think, everywhere, including in the American elections, and that is a fear of globalization, a fear of loss of control, a fear of the nation-state as the ultimate unit of national accountability losing the ability to produce outcomes, losing the ability to shape a safe space for citizens, as it were.

And I think that’s something we should all be concerned with. It plays out differently in our national spaces. But I think that that’s a fear that needs to be addressed. And if politicians do that, they will be punished at the voting.

MOHAMMED: Jeff, if I could ask, do you agree with the arguments that part of the disenchantment, to the extent that there is some, is a function of economics, but may also be a function of the distance between ordinary Europeans and Brussels and the narrative that the ambassador just described, the nationalization of success and the Europeanization of failure? And if you do, what do you do about that? What are the ways in which the European Union or its constituent members can actually try to fight back against those things?

ANDERSON: Well, in a word, yes, I do agree with that assessment. But I think it’s also a complicated story. I share the optimism, the long-run optimism, about Europe’s chances of getting through this reasonably intact. But there’s also no gainsaying the fact that this is the most significant crisis that Europe has faced since its inception. In fact, it’s not one crisis. It’s four overlapping crises, with a potential fifth crisis lurking in the background.

If there were a title to this, it would probably poach Lemony Snicket; you know, a series of unfortunate events, starting with the financial crisis, which was still bubbling and percolating when the security crisis on Europe’s borders in the form of the Russian intervention, first in Crimea, then in eastern Ukraine, took place in 2014, followed in 2015 by the exploding of the refugee crisis, and now Brexit in 2016. And we’ll see what the Trump administration brings in 2017. That’s the fifth lurking crisis.

If you contrast this with previous episodes—that is, prior to the end of the Cold War, at least—when crises launched European integration forward, those were relative cakewalks; the end of the Cold War a relative cakewalk—imagine that—because it was a single crisis in a way. It was contained. It was experienced more or less uniformly. And it seemed to lead naturally to solutions that worked.

And I think what we’re looking at today since 2008 is a very different situation. And it’s instructive to remember where Europe was when this eurozone crisis began to launch things. The Lisbon Treaty had just been negotiated, was in the process of being ratified. Most European elites, anyway, looked at that as something—it wasn’t described in these terms, but for all intents and purposes finalite politique, as the French would say, a final statement on European integration for the foreseeable future and a time for consolidation. But those plans never materialized because of these waves of crises that ensued.

It’s important also to remember that these crises went to the heart of the European narrative. That is, they undermined many of the assumptions and many of the advantages that European elites had constructed for European citizens, beginning back as early as the late 1940s—conflict, prosperity, the European social model, and so on. All of these were called into question.

That said, Europe is responding, as the ambassador pointed out. And in each of these crisis areas, you can point to real achievements. They haven’t necessarily borne as much fruit as European leaders would like, but that process should continue, barring any unforeseen unfortunate events to come. And so, as I said at the beginning, I do tend to be rather more optimistic about things. But again, it’s a difficult—a difficult set of circumstances, as you well know.

MOHAMMED: A question I’d like to ask each of you, if I may. Jeff, maybe we can start with you and then move down. Brexit—is it going to be hard or soft?

ANDERSON: I’m not even sure those are the relevant—sorry, my voice has taken a turn for the worse in recent weeks. I’m not even sure that’s the relevant category anymore, if only because the British government seems to have suggested that it’s given up on a soft Brexit. It’s going to take more or less a hard Brexit, respecting the fact that the four freedoms are not to be disentangled and seeking the best deal that the British government can get with that assumption in place.

I think what—I think Europe is holding the cards for the most part. And if you look at the guidelines that were just issued a few days ago, it plans to use those cards as much as it possibly can. It’s a two-year guillotine, in effect. And so that also puts the British government at something of a disadvantage here in coming out with a sweet deal. But I think, at the end of the day, it’s in the interest of both parties to negotiate a responsible, mature agreement that leaves them talking to each other at the end of the process. And so it’s not going to be easy, but I’m also fairly optimistic there as well.

MOHAMMED: Do you think it’s going to be a responsible and mature divorce?

STELZENMÜLLER: (Laughs.) We’re sounding like relationship therapists, aren’t we?

MOHAMMED: (Laughs.)

STELZENMÜLLER: Well, yes and no. Let me put it this way. I think it really depends on expectation management on both sides. I think it was Radek Sikorski, the former Polish foreign minister, who had somewhat acerbically pointed out that if you were going to leave the club, you couldn’t negotiate better membership—or better conditions than you previously had as a member. That, I think, is a sentiment shared pretty much by all the remaining 27. That can’t happen, shouldn’t happen.

There is also a sentiment that this shouldn’t in any way provide incentives for others to think that they will get an easy—you know, there’s an easy way out, one that isn’t complicated, one that doesn’t apply a lot of hard work. But apart from that, my sense is, and certainly at least from in my own country, those have been the signals from the German government and the chancellor that it is not in anybody’s interest to have an acrimonious, you know, fistfight over this.

The British decision is clear. This is what’s going to happen. And there’s no way we’re going to turn back this clock, much as we might regret it. And there has always been in Berlin, I think, a sense that a good relationship with the Brits is important for two key reasons; one, the sort of liberal take on international trade, and secondly, their sort of very forward-leaning active defense and security posture, both of which are really important in German thinking for the relationship with Europe going forward.

That’s perhaps slightly different than the take from Paris. It’d be useful to hear if anybody’s from France in the audience, whether you disagree with me. But the—so there is—I think the signals from the chancery are really clear. I’m a little concerned, frankly, by the ramping up of rhetoric. There have been some unfortunate comments obviously by some European politicians, some of whom are of German nationality. I will admit that. Then again, if you know them, you perhaps know, you know, that some of them are given to this kind of comment, and you take that, as we say in Germany, with a kilo of salt.

Conversely, on the British side there is a—I think it’s a sort of really unfortunate tendency to sort of ramp up, to pump up the volume on the language. Most recently you will have read the back and forth about Gibraltar and whether the British navy would be able to take on the Spanish navy over Gibraltar. That strikes me as deeply unfortunate. I hope this ends soon.

MOHAMMED: Mr. Ambassador, if it’s going to be—if the question is only how hard it’s going to be, how deleterious is a hard Brexit likely to be?

O’SULLIVAN: Well, you know, I—a bit like Constanze earlier, and I think Donald Tusk summed it up, and others; I saw Alexander Stubb on Facebook, former Finnish prime minister—this is a lose-lose situation. I mean, you know, I think we just have to accept that. I mean, I’m not contesting the validity of the British democratic decision and so forth, and they’re perfectly entitled to do it. But this is an exercise of damage limitation, basically—damage to them and damage to us. No one’s—we can’t come out of this better than we are now.

So then the question is, as everyone has said, how do we sort of do this in an orderly and sensible way, given the sort of timeframe which is there, the famous two years. You know, you have to dial back six months of that already just for the kind of ratification and approval process. You’ve actually got 18 months of negotiating time.

And the Commission and the Council have come forward with—you know, we do this stuff well. If there’s one—you know, if there’s one thing the European Union knows how to do, it knows how to manage a negotiation. And I think perhaps that’s something that also needs to be understood on the British side, that we’ve a lot of experience.

And it’s not that we wish to be unfair to anyone, but we’re just very good at—you know, I think the proposal of the sort of three-phased approach—for six months on sorting out the precise terms of the divorce; the next six months on sketching out what the future relationship will look like; a third six months on the transition, because, given what the British government has said, that the future relationship is some kind of deep and comprehensive free-trade agreement between the U.K. and the 27, we know that’s going to take several years, you know, maybe even seven or eight years, depending on how—you know, how long you—how long it can.

Therefore, you’re going to need a transition from the moment at the end of the two years to the period when you think it’s reasonable that the new relationship could kick in. And I think that’s a very sensible way of doing it, and we just have to hope that both sides can find a way of doing this.

There will inevitably be probably some bumpy moments, because any negotiation has bumpy moments. But I think it’s in both our interests to manage this in the most adult and sort of mature way possible, but recognizing, I repeat, that there’s no happy ending to this. The outcome at the end of the day is a diminished EU and a diminished U.K., and probably some economic loss on the European side, and I think probably quite a bit of economic loss on the U.K. side.

But I get it. I mean, people have taken the decision. We have to respect. But—and the consensus is, I think, from the 27—the key thing will be that you cannot possibly allow someone who has left the EU to have the kind of deal that they had when they were a member of the EU, and therefore, by definition, going to be inferior. And then the issue is going to be how inferior and, you know, at what—how is that negotiated?

MOHAMMED: So we’re in a period now where, for the next two years, obviously, all parties will be taken up with these negotiations. And also in the current year you have the French elections coming up, and then, of course, the German elections later in the year.

I’m interested in whether—Constanze, do you think it’s possible for much to get done during this period other than the Brexit negotiations? So I guess that would be question one. And question two would be some people, including Philip Stephens in the FT, have argued that there may be a new Franco-German grand bargain, depending on the outcome of these elections. Any idea what that might look like?

STELZENMÜLLER: Well, honestly, on both I’d say, you know, those are—I think that that’s sort of a superficial framing, whoever’s putting that forward. One is, yes, of course these negotiations will take up a lot of bandwidth. And because it’s happening for the first time, to some degree, you know, there will be a lot of reinventing process going on.

That said, you know, we don’t have an option, as Europeans, of selective attention to what’s happening around us. We don’t have the option of not paying attention to Russia, to Ukraine, to the Middle East, to the further outflow of refugees from Northern Africa, to Syria, and, of course, to the relationship with the United Nations—sorry, to the United States.

And so, frankly, this theory of Europe becoming more inward-looking—you know, I think there’s still a lot of political and institutional bandwidth available for dealing with all that. That said, I agree, I think, with Jeff, and probably with you as well, that this is a sort of really quite terrifying concatenation of circumstances, and one that—but I think, as Jeff was saying, it’s already—you can already see how it’s focusing.

We are seeing increases in European defense budgets in ways that were unimaginable a couple of years ago. I mean, the German—the Germans have still a way to go until 2 percent, but the fact that everything has been putting—is being put on the rails to get there would have meant sort of quite significant intra sort of domestic political disturbances. And the reality is that actually a lot of it has been happening in that field and is going to continue.

So I wouldn’t be too worried about sort of Europe becoming a non-player in its region. It has—it doesn’t have the option of not being one, and particularly, particularly because of the new situation with a Washington that is skeptical about the value of its alliances and has been making some quite hostile noises about the EU. I know that some of them have been contradictory. There’s been some back and forth about this. But I think it’s important to understand that the hostile narrative is out there. And it’s not particularly new, nor is it only limited to a certain sort of group of people. And I think that’s something we need to factor in, and, in fact, is already being factored into European deliberations.

Now, on the Franco-German axis, God, you know, that gets pulled out of the closet every single time there is a crisis in Europe. And I honestly—as a German, I don’t buy it. A Europe at 28, and soon at 27, can’t be run—can’t be run by Germany and France, shouldn’t be run by Germany—(audio break)—just won’t accept that.

Now, the practice of Europe has been, of course, that the large nations have, as it were, driven certain issues forward. And it has been economical, pragmatic, or sort of useful realpolitik for smaller nations to bandwagon with one of the larger ones. That is just how European politics works. But it works best when there are several large nations doing that. And it also can work extremely well if a small nation takes on an issue and runs with it and actually grabs the larger ones around the middle.

Just by way of example, the Poles and the Swedes in 2008-2009 very successfully forced the Germans to pay more attention to the Eastern Partnership and to what was going on on their eastern periphery. That’s a useful example of how this works. And Warsaw and Stockholm were very good at playing together in this.

Now, currently Warsaw is in a slightly different place, and so is Stockholm. And so the real problem that we see before us, in my view, is the increasing differential, if you will, between the power, capability, and sense of responsibility of Berlin and the others, the French being at an inward-looking moment because of their election, the U.K. because of Brexit, the Poles sort of divided, of two minds about their relationship with the EU and with social and economic modernization, and the Italians also still in a moment of sort of suspension, as it were, on economic reforms.

And that is the real problem, as far as I’m concerned. Germany, I think, has developed a much more forward-leaning posture, but it’s—the Germans are the first to tell you that we are in no position to carry the entire weight of these political negotiations going forward. There is a dire need for other European nations to come up with ideas.

There’s a new book out by friends of mine, Leon Mangasarian—he’s a former Bloomberg columnist in Berlin—and Jan Techau, formerly of Carnegie Europe, now back in Berlin, about, you know, models for German leadership. And one model that they apparently developed is—they call it servant leadership. And I think that that is the way German leadership has to work. But it won’t work de facto if the U.K., if France, if Warsaw, and Rome and others, and the small ones, don’t pitch in. So that’s where we are.

So, you know, this axis notion—I don’t think it’s felt as being desirable either in Paris or Berlin, if you asked me. And I wish it could be retired for good.

MOHAMMED: I’m going to ask one very quick question of Jeff before we open it up.

There are a great number of people who didn’t believe Brexit would happen. There are a great number of people who didn’t believe that Donald Trump would win. What happens if Marine Le Pen wins?

ANDERSON: The great experiment begins. That’s a very good question. I mean, she’s obviously pledged a great deal to her electorate, including putting a referendum before the French people to take France out of the EU within the first six months of her presidency.

What I wonder is just how far she’ll be able to get. She won’t have a majority in the National Assembly even after the June election. So while she may be able to find a prime minister who can command a majority, it’s hard for me to imagine that she’ll have a Parliament that’s able to get behind her on a series of initiatives. And if the Trump administration thinks it’s fighting against a deep state, wait until Marine Le Pen starts going against the French—(laughter)—I mean, I find the notion of a deep state a little laughable anyway. I mean, this is what institutions do. They produce allegiances and loyalties in order to reproduce the system. And last time I checked both the U.S. and France were democracies, so it’s a good thing we have a quote/unquote “deep state.”

But she’s going up against an incredibly well-trained cast of characters, many of them educated at the same place, and it will be fascinating to see just how far she can get in five years. I actually predict, you know, lots of sturm und drang auf Französisch, of course—sturm and drang in French—but not much in the way of progress there. I think 25 percent of the electorate is behind her, which is about the same number that our president has, in terms of committed supporters. So we’re not talking about a majority in favor of this broad agenda.

MOHAMMED: At this time, I’d like to invite members to join our conversation with their questions. A reminder that the meeting is on the record. Please wait for someone to bring you a microphone, and if you would then speak directly into it, introduce yourself with your name and your affiliation, and if I make a—may make a plea for you to try to limit yourselves to one question and make it as succinct as possible so that as many people can participate as possible.

I think the lady there had a question.

Q: Diana Negroponte from the Woodrow Wilson International Center for Scholars. And if my British accent disturbs you, my mother is from La Wallonie in Belgium, and I’m married to a true Greek. (Laughter.)

My question: Is there a silver lining to the United States’ concern for its internal issues? Does Europe now have an opportunity to step up on climate change, on trade with Asia, and on our democratic principles?

MOHAMMED: Ms. Negroponte, did you have—want to address that to anyone in particular or—OK. Who wants to take a leap at that?

Mr. Ambassador.

O’SULLIVAN: Well, I think, you know, Europe should step up on those issues—and by the way, we have on climate change, on trade. We’re doing it. We’re continuing with—Cecilia Malmström will not spend too much time in the first half of this year to negotiate with the United States, but a lot of time negotiating with Japan, with Mercosur, with other countries in ASEAN.

And I think, you know, I’ve always believed that, you know, the notion that, well, somehow if America is less strong, Europe then steps up—we are complementary. I don’t think anyone in Europe should wish for a less engaged United States. It’s never going to be in our best interest. So we are at our best when we’re working together. It may be that some issues find more support domestically in Europe and some issues find more support domestically in the United States, but we need to work together. So I think Europe has to step up on all of those issues, but I hope the United States will, too. I recognize that there’s been an election, there’s a change of government, there’s a debate about America’s role in the world, about—but I take heart from the fact that, you know, “America first” does not mean America alone. And I still believe that this administration is going to understand the importance of alliances, and in particular transatlantic alliance, because without that, in my view, it’s difficult for either of us to have the impact globally that we need for the—for the objectives we want to pursue.

MOHAMMED: The gentleman in the gray, in the middle there, please. Yep. No, I think it was a little further back. Forgive me. Thank you.

Q: Matt Gessler (sp), University of Maryland.

The discussion on Brexit you had is—seems very intelligent but awfully general. I wonder if each of you could very succinctly tell us what you think the one most difficult issue might be between Britain and the European Union during the Brexit negotiations.

MOHAMMED: Jeff, do you want to start?

ANDERSON: I think that will have to do with the financial sector, and that isn’t—based on any profound experience on my part. I don’t tend to do financial stuff. But given the complexity, given the entanglements—I mean, just today I think it was Manfred Weber, in the European People’s Party in the European Parliament, forecast the bringing home of the euro clearinghouses from London. You can’t have a euro clearinghouse that’s not on European—or EU soil was his point. That’s 100,000 jobs that would leave London in a very short period of time if that in fact is executed. So it gives you a sense of the stakes and the complexity, and I suspect a good deal of the time will be focused on trying to arrive at a mutually acceptable agreement there.

MOHAMMED: Constanze.

STELZENMÜLLER: The problem of me answering this question is precisely that I am a lawyer and that I’ve been talking to a couple lawyers, and what—it’s clear that a lot of what is going to happen here is fiendishly technically difficult and that a lot of people will simply have to be reinventing procedures to deal with this.

At the same time, the other thing that I think is completely—that some of the American debate appears to be unaware of is that—how do I put this simply as possible—that the Brits are basically going to have to mirror, to replicate what they had adopted in terms of European law in new British regulations in order to maintain the kind of regulatory harmony that they have so far profited from economically. Sorry, this is—we could go horribly into the weeds on this, but that is an incredibly difficult issue.

And I suppose the other—the other problem here is sequencing, that we’re going to have a lot of these processes happening at the same time, and making the sequences work together is also going to be fiendish.

O’SULLIVAN: I agree with both. I mean, I think Jeff is probably right that perhaps the financial sector—financial services sector may emerge as a particularly thorny issue, though there are probably others, frankly. I think it’s difficult to reduce it to one issue.

I absolutely agree with Constanze, that this is such a complex issue—particularly for the U.K., by the way. We were talking earlier about bandwidth, and so on. It seems to me that the civil service in London is going to do little else for the next, you know, five to 10 years other than just manage this process because the U.K. has to set up so many things and replicate and redesign and it’s a—it’s a massive undertaking which, you know, is going to absorb a huge amount of political and psychic energy on the U.K. side.

For the rest of us, I mean, I think it is—I don’t think it’s a single issue. I think the politics is to try and make this all happen in the least confrontational way possible, I mean, so that it at least goes smoothly and with a sense of logic and sequence.

Now, there will be moments of disagreement, and we all know we’ve been at these events before, European Councils and, you know, there has to be drama or people don’t feel that it’s a political success. So we’d have some of that, but I hope that all of that can be kept within sort of limits that we can actually move this process forward, because it’s a very serious challenge to do this in the sort of 18 months. And the consequences for both sides of this going wrong or this coming unstuck are considerable. So I think that to me is the biggest challenge, of just getting the politics of this right so that we can get all this done and dusted in the 18 months with a sort of sequence for what happens afterward.


STELZENMÜLLER: I mean, I just want to add a point on that is, I think what’s also often underestimated is the sheer breadth of issues that were, as it were, European—the European system is going to be unpeeled from the domain of English national law. There, I think, is often a misunderstanding that the European law is essentially limited to areas of trade, economics, and regulation, and actually it covers almost the entire spectrum of public and civil law. And that is why this is going to be so complex.

MOHAMMED: I’d like to recognize the gentleman in front who so kindly gave way last time.

Q: U.S. Department of State. I’d like to ask about the euro. Given the widespread disparity among the member states, is there some likelihood that at one point one or more countries may be forced out of the eurozone? I—Greece comes to mind, but—


ANDERSON: Well, that sounds good in theory because we could potentially imagine a life after the euro. The problem is getting there, and for both the EU or the eurozone members, as well as the country in question. So as—it’s a nonzero probability, but I would say it’s still exceedingly low because the costs of the transition would be so monumental that no one wants to contemplate it, and that forces both sides to patch up whenever the next crisis emerge. And that is a lingering crisis. I mean, Greece is by no means solved, and the people there are—at this point seem to be consigned to a perpetual austerity, which most of us think is not tenable over the long run.

And this goes back to one of your earlier questions, the Franco-German partnership. What I hope for and what I kind of expect is, if Macron wins, that he succeeds at some basic level with his reform plans, because the consequences are too dire to contemplate. You’re basically turning it over to Le Pen the next time around. And so you have a more successful France that can be a co-leader with Germany, not necessarily in the form of the axis—and I agree completely with Constanze here.

But what I would also expect to see are changes in the German approach—and not necessarily abandoning austerity—that’s politically too consequential even for a social democrat, were the social democrats to take over—but I expect to see a longer horizon in Germany policies, which opens up a more amenable future for countries like Greece because it’s in the German government’s and the German people’s interest to preserve this experiment over the longer run, and being a slave to principles is not—is not a way to get there at this point.


STELZENMÜLLER: Let me add a German perspective on this. One of the things that also often doesn’t translate into sort of the general European debate, or even over here in Washington, is how much debate there is Germany. And among German economists and political analysts, whether there’s German insistence on structural reforms that produce this kind of austerity without an accompanied real growth and jobs and infrastructure initiative is, you know, perhaps in the short-term interest of the finance ministry and the cavalry that runs it, but the—but not in the long-term interests of Germany’s role in Europe. There is a real debate here. And I’m the first one to say, you know, that this—the euro is a sort of imperfect halfway house that needs some rethinking.

That said, I think it’s also important to understand that the euro for many European countries was and remains a political project. A part of the signing up to Europe, and the closer you get to Russia, and the smaller you are, the more important that was. If you look at the sort of very painful reforms of the Baltic states—and you’re talking only to get into the euro—and how they celebrated that achievement, that gives you a sense of what that means. And frankly, if you went to Riga or to Tallinn a couple years ago, people would be telling you, you know, why are you not just throwing out the Greeks and continuing? They’re just making trouble. And I think, you know, part of the—part of Berlin’s task here was to tell the Balts and others—and many of the Nordics, frankly—that that is not how this works, and that we are going to do what it takes to get the Greeks in.

MOHAMMED: Michael.

Q: Mike Mosettig from PBS Online NewsHour.

I have no Irish ancestry nor any particular expertise in Ireland, but I was really dumbfounded last week by the comment of the British Brexit minister that under the Good Friday Agreement there’s absolutely nothing the U.K. government could do to stop Northern Ireland from aligning with the Republic of Ireland if—should they decide to do so. And Northern Ireland did vote to remain, even though all previous polls have never shown much support even among Catholic voters up there for reunification. But doesn’t this pose one of the most difficult issues to get right, or otherwise you’re going to end up with the Sinn Féin fantasy of a united Ireland?

MOHAMMED: Mr. Ambassador?

O’SULLIVAN: You’re all looking at me. (Laughter.) OK.

STELZENMÜLLER: I’m staying out of that one.

O’SULLIVAN: Well, I mean, there are a few things kind of mixed up in that question, Mike, if I may. I mean, it is true that joint membership of the European Union by Ireland and by the United Kingdom was hugely instrumental in the peace process of Northern Ireland. I mean, there were other factors, you know, courageous decisions by people of Ireland’s on both sides, courageous decisions by politicians to bring their respective constituency to places where they didn’t necessarily want to go after the violence of the last—of the 30 years before the Good Friday Agreement. But one of the factors was joint membership of the European Union, because it basically squared the circle, that you could give the Unionist community of Northern Ireland the guarantee that it would remain an integral part of the United Kingdom until such time as a majority in Northern Ireland decided otherwise.

So there is a border, nobody disputes it, and it will not be changed without the consent of the people of Northern Ireland. But in practice—because we were both in the European Union—there was no border. On a daily basis, you could live on one side of the border, work on the other, vis versa. Goods and services moved freely. People kind of behaved as though it was one island in sort of real terms, even joint tourism exercises, and so on. This is now challenged by Brexit, and one of the things that has to be sorted out—and I think both governments attach a lot of importance to it, and it was in the Council guidelines from President Tusk—is how do we not damage the Good Friday Agreement with this Brexit situation.

The other issue you’re raising is, well, would at some point Northern Ireland decide that they wanted reunification with the rest of Ireland? I—you know, I don’t think there’s any imminent likelihood of that. It might be something down the road. You say it’s a crazy Sinn Féin dream. As an Irish nationalist of longstanding, I think it would be a good thing if everybody wanted it. Let me be very clear. I have no—if people of Northern Ireland don’t want it, then I think they should be left to decide their own fate. So—but it does make a lot of sense to treat the island of Ireland as a single entity when you look at it from so many other perspectives. But that’s a—that’s down the road.

So I think the immediate challenge of Brexit is how to craft something which, you know, has the U.K. leaving the EU, and therefore you’ve got the border with Northern Ireland becomes the external frontier of the EU, relative to the U.K., and vis versa, and how you avoid that becoming what’s called a hard border with checks and policemen and customs and everything else, which is unraveling one of the elements of the peace process, which was this notion of sort of the island as a whole being a place where people could live and work and travel and trade. And that’s going to—that’s going to require some ingenuity.

MOHAMMED: The gentleman in the white shirt.

Q: Thanks. Jeremy Young. I’m a journalist with Al-Jazeera.

So I’m curious if you can talk a little bit about Russia’s efforts, both covertly and overtly, to destabilize the European Union. We’ve seen things like financial support and training for neo-Nazi far-right groups. We’ve seen the establishment of think tanks that are sympathetic to the Russian worldview. In Germany, I know this has taken place. You’ve seen the use of WikiLeaks to release information that has been obtained through hacking. So I know we can be kind of Russia-centric these days in Washington, D.C., but I’m very curious about what you’ve seen in this campaign and whether you think it’s been effective.

MOHAMMED: Jeff, would like to address that?

ANDERSON: I can’t say whether it’s been effective, but I do know that there are—there’s a great deal of concern in Europe, and it’s not just in the fouiliton (ph) pages. I mean, there are—there are serious discussions about legal measures to try to get a grip on this. And to me, as an observer, longtime observer of European politics, this is one of the fascinating differences between many European countries and their culture—their legal culture and their histories and us here in the United States. The German have a concept called “wehrhafte Demokratie,” the democracy that’s capable of defending itself. And if you look at the—well, if you look at the basic law in Germany, you’ll see things that would never occur to anyone in the United States to put in their Constitution, like the right of the constitutional court to ban political parties because they in effect agitate against the democratic order.

So I actually think that in some ways many European countries are better equipped to try to go after this kind of thing because they’re willing to use the law in order to try to regulate things. And it’s obviously tricky, and it involves potential limits on freedoms of—freedom of expression and freedom of speech. But given the stakes, I can well see why they’re willing to think about these things and to experiment with these things. But it would take really someone who’s an expert in communications theory and culture to tell you whether there’s more fertile ground in Europe for these kinds of shenanigans that the Russians are pulling off as opposed to the United States. I want to think that the Europeans are a little more inured to this sort of thing, but I just don’t know. I just don’t know.

STELZENMÜLLER: Can I—can I take a stab at that as well?


STELZENMÜLLER: Because it’s obviously been something of a big deal in Germany ever since the annexation of Crimea, and I’d say there are actually measures by which you can see whether something has been taking or not. And two of those measures are, you know, freely available for you to study. One is the shifts in German government policy on Russia, and the toughening of the German stance, the fact that they’re holding together a sanctions regime that is politically quite costly—that is costly—it is more costly to some European nations than to Germany, but it is quite costly to Germany as well.

You can—by way of anecdote, there was a big discussion in Berlin in the last 48 hours over whether to have the Russian colors on the Brandenburg Gate after the attack in St. Petersburg. The city of Berlin decided no. I’m not sure how I feel about that, frankly. I think if you do it for all, you do it for the Russians as well, and this is, you know, for the Russian people rather than for the Kremlin. But that gives you a sense of just how upset people are. The polls will show you similar things.

And I think—but I would actually like to inject a note of concern here, and that is that there is an unholy alliance here between the kind of propagandistic interference—and, oh, by the way, I could have also mentioned the German white book, the defense white book, which has a lot of references to Russian hybrid warfare and interference, and about that also being a defense and security issue—but my largest—(audio break)—and Russian propaganda machinery on this one, and the alt-right not just in Europe but the alt-right in this country.

I’ve been following, for all the obvious reasons, the Twitter feeds and the sort of social media presence of the American and the European alt-right. And there is an uncomfortable, shall we say, parallelism of messaging there, and of narratives. And this—for example, what you just said—that, you know, this could be a free speech problem—of course the Mike Cernovichs of this world, you know, are glomming onto these, the persecution of hate speech, as a—and describing this as a persecution of freedom of speech. Then, you know, it’s, I think, also a concern if American members of Congress—who shall remain nameless, but you know who they are—are pictured—take pictures of themselves with Marine Le Pen, and Frauke Petry, the head of the German AFD, and caption that, you know, with captions like “in support” or “celebrating our joint commitment to liberty and values.” That’s duly noted, and it’s frankly not helpful.

MOHAMMED: The gentleman in the middle, please.

Q: Andrew Yeo, associate professor at Catholic University.

If Brexit goes down as badly as several of you suggest for Britain, is there any institutional path for them to return, or would this be politically viable, perhaps returning with the tails between their legs? But at any rate, is that a possibility?

O’SULLIVAN: I want to be clear. I mean, I said I think the U.K. will be less well-off economically. I mean, I’m not predicting how bad that’s going to be. I’m not saying it’s the apocalypse. I mean, it probably is manageable if people makes this choice and then live with the consequences of the choice.

So I honestly—I’m working on the assumption that they’ve had a referendum, they’ve had a majority, they’ve had a vote in the House of Commons, they’re going ahead. I don’t think this is something that you reverse easily, frankly, once you go down this road. I suppose anything’s possible 10, 15, 20 years from now. People might take a different view, but I’m certainly not expecting a reversal of the decision any time soon unless there were to be a big political change in the U.K. as the negotiations go forward. But I think most of us in Brussels are working under the assumption that this is now the decision and it’s going to happen and that we just have to get on with it and do it in the best way possible, and the U.K. will then, you know, live with the consequences of their choice.

MOHAMMED: The gentleman on the side there, please.

Q: Hi, Doug Ollivant with Mantid International.

I’ll just talk very briefly. Europe post-Brexit and the United States: For several decades now when the United States has needed something from Europe qua Europe, our first stop is usually London, feel things out, special relationship, English-speaking peoples and all. Now that London will also be on the outside, how does the United States relate to the EU? Is it just going to go straight to Brussels? Is there another member state that it might use as a pathway to Brussels? How do you see this playing out?

MOHAMMED: What do you think, Jeff?

ANDERSON: I would quarrel a little bit with your history. I mean, I think what you said was true up until maybe the early Bush years. I don’t know. But Germany increasingly has become the go-to. The chancellor’s become the go-to person in Europe for the American president, and that certainly was the case under Obama.

STELZENMÜLLER: I think that probably under review.

ANDERSON: That is—yeah, now that is very questionable, right? (Laughter.) So, you know, I mean, I think it was Ms. Negroponte’s question earlier, you know, is this—is there a silver lining here. I’m hoping for just neglect on the part of the U.S. for the next four years. If it’s malign neglect, if there’s an active attempt to tear down institutional arrangements, to wipe out the WTO, to actively undermine the EU, to constantly call into question the U.S. commitment to NATO, it’s not a silver lining. It’ll—there be so many pieces to pick up in four years that we may never get them back together again. That’s what I worry about.

Q: You’re an optimist, four years. (Laughter.)

STELZENMÜLLER: We’re not going there, Michael.

ANDERSON: (Laughs.) Good point.

MOHAMMED: I think we’re—Constanze, did you want to say something about that?


STELZENMÜLLER Well, I mean, look, perhaps two additional points on your question. I think that, as I said earlier, we have to take the sort of hostile version of the EU narrative in Washington very seriously, and we have to break it down into its component parts. And to the extent that that forces us, as it were, to reconsider, reargue and recommit to fundamentals in our own European realm, I think that’s actually a good thing. I think you can certainly make the argument that many of us sort of committed Europeanists have been complacent about a lot of inherent risks to the project and about, you know, the feelings and fears of people who felt that they weren’t profiting from this, that this wasn’t progress for them, and I think it behooves us to do our own homework on this front.

That said, an administration that—even if only parts of the administration genuinely believe these things, a Washington that operates on these principles can do an awful lot of damage by omission and by commission. And I think that that, again, is something that we have to take seriously and have a reaction to. A the very least, we have to—as Europeans in America and elsewhere, have to make an argument why a strong and functioning EU and why a flourishing European project is in the American national interest. And I can make that argument until you’re blue in the face. This in the last minutes of the panel is not the place to do it, but I can make it in terms of politics, I can make it in terms of trade, and I make it in terms of security. Many American national interests, narrowly considered, would be significantly damaged if this project failed. And that is not to say that there aren’t many things that we can do better and repair. But a narrative that suggests that all of the world, including Europe, would be better off if Europe were disaggregated, on its own accord, and with some help from America I think is a narrative that I personally would find myself having to resist.

MOHAMMED: I think we’re going to have to make that the last question in the interest of time. I’d like to thank our panelists. (Applause.) Dr. O’Sullivan, Constanze Stelzenmüller, and Jeff Anderson, thank you all for coming.


This is an uncorrected transcript.

"There has been a tendency in all national politicians towards what I call the nationalization of success and the Europeanization of failure."
- David O'Sullivan
"...This is the most significant crisis that Europe has faced since its inception...It's four overlapping crises, with a potential fifth crisis lurking in the background...starting with the financial crisis, which was still bubbling and percolating when the security crisis on Europe's borders in the form of the Russian intervention...followed in 2015 by the exploding of the refugee crisis, and now Brexit in 2016. And we'll see what the Trump administration brings...that's the fifth lurking crisis."
- Jeffrey Anderson
"Germany, I think, has developed a much more forward-leaning posture, but...the Germans are the first to tell you that we are in no position to carry the entire weight of these political negotiations going forward. There is a dire need for other European nations to come up with ideas."
- Constanze Stelzenmüller

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