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The Lisbon Treaty, the Irish Referendum and Implications for the European Union: What Next?

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By Ambassador John Bruton, Head of the Delegation
of the European Commission to the United States
(Remarks as delivered at The European Institute meeting on 11 July 2008 held at the Cosmos Club in Washington, DC)

The views expressed are personal and do not necessarily reflect the views of the European Commission

Good morning, ladies and gentlemen. I'm Joëlle Attinger, President of the European Institute. And on behalf of Jacqueline Grapin, our Chairman, I'm especially pleased to welcome you to this very timely discussion with Ambassador John Bruton, Head of the Delegation of the European Commission to the United States. Thank you, Mr. Ambassador, for joining us at this most pivotal time in the history of the European Union.

It has been almost a month to the day that the people of Ireland voted to reject the Treaty of Lisbon, and the implications continue to reverberate throughout Europe and beyond. Indeed, in the wake of the Irish Referendum, doubts have been raised in both Poland and the Czech Republic about their country's willingness to ratify the Treaty. On the other hand, the Dutch Parliament this week joined 19 other members of the European Union and voted for ratification.

So, what does this all mean for Europe's efforts to implement fundamental institutional reforms and assume a more unified voice in global affairs?

As Prime Minister of Ireland from 1994 to 1997, Ambassador Bruton is in a unique position to assess his nation's historic vote and what it may mean for Ireland, for the European Union and for relations between Europe and the United States.

A principal in the drafting of the European Constitution, Ambassador Bruton has been a tireless advocate for enhanced EU-wide democracy. First selected to the Irish Parliament as a member of the Fine Gael party at the age of 22 in 1969, Ambassador Bruton became party leader in 1990. During his distinguished political career, he has served as Ireland's Minister of Finance, Minister for Industry & Energy and Minister for Trade, Commerce & Tourism.

Ambassador Bruton, it is an absolute pleasure and honor to welcome you back to the European Institute. The Celtic Tiger has roared and we look forward to hearing your personal assessment of what it means.

Ambassador John Bruton:

 

I have a script, which, if I were to deliver in full, would take somewhere in the region of 70 to 80 minutes. I thought it would be appropriate to prepare something quite studied on this matter because this is an important issue. But in the interest of time, I will summarize it and take questions at the end. Copies of the full script are available.

I should say at the outset that I'm speaking here in a personal capacity, not on behalf of the European Commission, but in the capacities that were described in the introduction.

I believe that there are solutions available to the current situation, but none of them are easy and all of them are quite risky.

How did we get to this point? In December 2001, the European Council decided that we needed to revamp the EU treaties to make them capable of absorbing more members into the European Union. They established a convention, the first of its kind, for not just representatives of governments, which had been the previous entities involved in negotiating treaties, but representatives of the European Parliament and representatives of national parliaments to come together. And they introduced, in 2004, the draft Constitution.

Unfortunately, that draft Constitution, in 2005, was rejected in the referenda in the Netherlands and France. Although it was accepted in referenda in Luxembourg, Spain and Britain, which had promised to have referenda on the subject, didn’t go ahead with them in light of the decisions in France and the Netherlands.

It was decided that there would then be a period of reflection on the result. I would suggest that there wasn't actually any reflection during the reflection period. A great deal of emotional energy had been devoted to putting together the compromises that were contained in the Constitution. And fundamentally none of the Member governments really wanted to revisit those basic compromises.

 

So, with some changes and some opt-outs, it was decided that the Constitution would be made less constitutional, or so it was thought, by presenting its contents as a series of amendments to existing treaties, rather than as a single consolidated text called a Constitution.

In other words, what was a single – although long – readable text containing all the information that people needed to know, was converted into a document that was fundamentally unreadable in the sense that it was a series of amendments to other documents, which you couldn't read sensibly unless you had the other documents available. So, although the Lisbon Treaty was designed to make the European Union more transparent, the instrument through which this transparency was created was not transparent itself.

In previous periods of European history, this may not have mattered so much because the Internet didn't exist and people were prepared to accept, from their leaders, summaries of what was contained in the document. But, in Ireland's case, in May and June of this year, most people had access to the Internet and decided that they would read the Lisbon Treaty for themselves on the Internet without relying on the Prime Minister or Taoiseach or anybody else to tell them what was in it. They tried to read it themselves; and that, of course, proved to be impossible in any sense of acquiring an understanding of it. And that, I think, was the principal reason – it wasn't the only reason – but, the unreadability of the document was the principal reason why it wasn't accepted in the referendum.

Why did Ireland have a referendum when nobody else had one? The reason for that is that the Irish Constitution drafted in 1937 requires that any diminution in the sovereignty of the Irish State involves an amendment to the Constitution. And amendments to the Irish Constitution can only be made with the support of the people in a referendum.

That probably reflects the historical era in which that Constitution was produced, when plebiscites were more popular, shall we say, than they were in the post-war years when most of the Constitutions of the other European countries – which allow for amendments to their Constitutions by parliamentary, extraordinary parliamentary, majorities rather than by instrument of referendum – were adopted.

Before going into the politics of this, I'd like to explain why I am so disappointed that the Lisbon Treaty, at this point, is not set to go into effect. And I think my reasons for disappointment may not be the ones that are most currently canvassed in public discussion on this subject. By far the most important reason for my disappointment is that the Lisbon Treaty would have equipped the European Union to deal effectively with cross-border crime by introducing majority voting and direct applicability of the EU laws in this field.

At the moment, the requirement of unanimous votes on issues in this area is holding up the application of the EU-US Extradition and Mutual Agreement. It's holding up the implementation of the European Evidence Warrant and a number of other very important tools that Europe needs to be able to combat cross-border crime.

Virtually every crime that takes place in Europe today has a cross-border element. It is either fuelled by a need to get money to pay for drugs that have come across a border from some other country, or it is using a weapon that has been manufactured in another country, or it is lodging the proceeds of the crime in a bank account in another country or it is actually a crime against residents of another country.

Crime is inherently a cross-border phenomenon and the European Union is the only instrument available to Europeans to fight cross-border crime on the sophisticated level that it requires to be fought. Member-states cannot do the job on their own.

Unfortunately, that case wasn't made with the force that it ought to have been made to the Irish people in the May/June period. For reasons that I cannot understand, the Irish and British governments decided that they would opt-out of that particular part of the Treaty. And this, of course, stopped the Irish politicians from arguing for the ratification of something from which they had opted-out. In my view, that was by far the most populist part of the treaty in terms of its ability to appeal to the general population.

Another important area and populist moment in the Lisbon Treaty was the enhancement of the Union's capacity to deal with energy policy, a very important issue in every household in Ireland, Europe and the United States at this time. Again, I don't think that point was sufficiently stressed.

Further reason for my disappointment is that the Lisbon Treaty would have provided for significant improvement in the democratic life of the European Union by giving more power to the European Parliament over large parts of the budget on which Parliament currently doesn’t have the say that it has on the rest of the budget. For example, it would have given them budget power over agricultural policy and, as I said, cross-border crime.

Furthermore, with the Treaty, national parliaments would be engaged in scrutinizing all EU proposals for legislation before they went to the Council of Ministers or the European Parliament. They would judge whether each proposal and decide whether it was appropriate to deal with it at an EU level or a lower level that was more proportionate to the problem.

That involvement of the national parliaments would have done two things. First of all, it would have helped to develop a case law on what constituted “subsidiarity” – our EU terms for whether something should be dealt with on a European level or on a lesser level. And it also would have meant that national public opinions, through their national parliaments, would have been aware of prospective EU legislation before it actually came into effect, in many cases five or six years ahead of time. With the current situation, many people find out about EU directives, as they apply to them, three or four years after the thing has already been enacted -- maybe 10 years after the minister from their country voted for it in the Council of Ministers and only then when some of friend of theirs has been prosecuted for a breach. This would be entirely changed by the proposals in the Lisbon Treaty.

It would also have instituted a fairer system for distributing seats in the European Parliament, eliminating the need for horse trading every time there was a new enlargement or a reduction of the population of a country. A formula of “degressive proportionality” was to be instituted in Parliament and the double-majority system was to be instituted in regard to voting-weights in the Council of Ministers.

Such an automatic system, based on the fall in the population of one country relative to another, would have been able to instantly adapt the weightings on the basis of census results or the addition of new members. It would have eliminated the need for haggling and new deals about how many votes people would have because the formula would already be there.

Furthermore, the Lisbon Treaty would have given the Union more power to deal with cross-border health threats. Many in this country are justly worried about avian influenza, for example. Combating such a threat would probably involve the introduction of draconian measures to restrict personal freedoms in the interest of personal survival. And this could only be done effectively by a number of countries acting together.

The Lisbon Treaty would have given the European Union a legal base upon which to do that sort of lifesaving work. In the absence of the Lisbon Treaty, there's doubt as to whether we would be able to make the decisions to deal with such a matter in the very short timeframe.

Also, some have argued, I think erroneously, that the rejection of the Lisbon Treaty means the European Union can no longer enlarge to take in new members. The Nice Treaty can, in fact, be used as a basis for enlargement, for further enlargement. And any adjustments in the existing Nice Treaty can be made in the Treaties of Accession. Those who are saying that there cannot be further enlargement unless Lisbon is ratified are expressing a political opinion. They're not talking of a legal requirement.

Another area, the one perhaps most doubted, where the Lisbon Treaty would have been beneficial is in the area of foreign relations. It would have enabled the European Union to have a single, legal personality, which would enable it to negotiate treaties with other world entities on all its areas of activity. At the moment, there is much confusion around the subject because some parts of international agreements are a national competence and some are union competence, at the moment. This disables the negotiators and their negotiations.

It also would have established clear legally binding criteria upon which European foreign policy was to be conducted, set out in the relevant article of the Treaty.

It would have established two new offices, as well: the Office of a full-time President of the European Council, who would have responsibilities in foreign matters, and a High Representative of the Union for Foreign Affairs and Security Policy, who would be both servant of the Council of Ministers and a Vice President of the European Commission.

And, of course, the President of the Commission would continue in office and would continue to do his External Relations. So, these three people involved in External Relations would be assisted by a new External Action Service, which would bring administrative coherence to the work of the three parties concerned.

Some concerns have been expressed that the collegiality of the European Commission might have been adversely affected by the fact that one of its members would now be a servant for some of its work of another entity, the Council of Ministers. At the moment, all Commissioners only serve the common European interests as members of the Commission and may occupy no other post.

Others were also concerned that the Foreign Minister, or High Representative for Foreign and Security Policy, would have had too much to do in the sense that he or she would have to attend Commission meetings every week and involve him or herself in Commission business, would have to meet foreign dignitaries coming to Brussels on a regular basis, would have to chair all meetings of the Foreign Ministers and would have to travel the world to familiarize himself or herself directly with problems in other parts of the world. Four tasks, one person. And I think, you know, there are concerns about how workable that might be.

I have no doubt, if the right personalities are selected, there would be no problem. But, Jean Monnet, in his founding thoughts about the European Union, emphasized the importance of institutions as well as the importance of personalities.

Another issue that was of concern in the Irish Referendum – and a concern in other states, as well – was whether Ireland would have a Commissioner all the time.

Under the Nice Treaty that could not have continued because if there were to be further enlargements of the European Union, there was an obligation in the next Commission to reduce the size of the Commission below the number of members.

So people voted against the Lisbon Treaty. I think they voted mistakenly because, strangely, the Lisbon Treaty was the only way in which there was any possibility of every member having a Commissioner. The Lisbon Treaty said that, in general, the aim is that two-thirds of the Member-states will have a Commissioner at any given time and one-third won't. But, it also says there could be unanimous agreement to vary that. So, the only hope anyone in Ireland had of having a Commissioner all the time would have been by voting "Yes" to the Lisbon Treaty. But, unfortunately, they voted "No" to the Lisbon Treaty in error on that point.

A final structural reason for my disappointment about Ireland's decision is that it seems as though it will be much more difficult for the EU to amend treaties in the future. And Ireland having now rejected an EU Treaty for a second time is constituting itself a “stumbling block.” And being a stumbling block is not comfortable either for the block or for anyone who stumbles over it.

It's not comfortable for the European Union that Ireland is constituting itself as a sort of stumbling block. But it’s not comfortable either for Ireland, even if it in accordance with its Constitution, to find itself in practice as the stumbling block.

What does the Irish result tell us? Well, young people voted "no" more than older people. Woman most likely voted “no” more than men. The biggest reason given by people who voted "no" was that they didn't understand the Treaty. Twenty-two percent gave that reason. Only six percent of the people gave Irish neutrality as a reason. Only six percent gave keeping a Commissioner as a reason, and six percent gave lack of trust in politicians as a reason. But more than 70 percent of those who voted "no" thought the Treaty could be relatively easily renegotiated.

Basically, if you wanted to characterize the people who voted "no" and the people who voted "yes," you look at the democratic primary contest between Hillary Clinton and Barack Obama and exclude from your calculation the African-American vote. Amongst the non-African American voters, you could broadly say that the type of person who opted for Hillary Clinton was the same type of person – more women, more rural, less well off – more likely to be voting "no" and the type of person who voted for Barack Obama more likely to vote "yes."

And I think this sort of demographic divide is something that we find in all countries because of concern about globalization, which affects some people differently than others and it affected – affects – the "no" voters in Ireland and the Hillary Clinton voters in the United States a little bit more severely than the others.

However, this vote in Ireland does not indicate any negative feelings towards the European Union on the part of Irish people. Irish people voted on this not in a vote for or against the European Union, but because they persuaded themselves that they were being asked for their opinion. They thought that they were being asked to give their honest opinion whether they thought this was a good treaty or not and they thought that their opinion would be taken seriously. That's what they thought. They may have been innocent in thinking that, but that's what they thought and that's the basis upon which they took their decision.

Whereas 52 percent of Europeans have a positive view of their country's membership of the European Union, 14 percent believe it's a bad thing. Seventy-three percent of Irish people believe being in the EU is good, much better than the EU average. Eighty-two percent of Irish voters believe that their country has benefited from EU membership. Only Denmark comes close to that, 77 percent. In some EU countries at the moment, only 36 percent believe their country has benefited from an EU membership.

Trust is a very important ingredient in politics, and I think trust is at the heart of the problem here. Fifty percent of the Europeans trust the European Union. Only 32 percent of Europeans trust their national governments. The highest levels of trust in national governments are to be found in Cyprus, Finland, Malta and Spain, possibly because those are countries that have recently had elections, and trust seems to diminish with the passage of time. In Ireland, 62 percent of Irish people trust the European Union. Only 37 percent trust the Irish government.

So reassuring people that it doesn't matter what is in this Treaty because your government will be able to say "no" -- for example, that they will be able to move certain further things to qualified majority under what we call “the passerelle clause” -- isn't very reassuring to people except the 37 percent of them who trust their government. The people that don't trust their government aren't going to trust them to make that decision.

So, the problem of trust, in my view, is more a problem of trust in national governments throughout Europe. Ireland is not an exception, then, in its degree of trust in the European Union.

Globalization is also an issue in which Irish people have reservations. Only 34 percent have positive attitudes to globalization, similar to the 25 percent in France, whereas 78 percent of Danes and 64 percent of Swedes have positive attitudes. And I think that difference may also explain why Ireland was inclined to vote "No" in current economic circumstances where a housing bubble is presently bursting.

Another more profound reason, which I think needs to be addressed by those of us who want this Treaty in whatever form to be adopted by the Irish people, is that a lower percentage of Irish people than in the rest of the European Union believe there is such a thing as distinctly European values. Sixty-three percent of Dutch people believe there is such a thing as distinctly European values as distinct from global values. Fifty-eight percent of Belgians, 54 percent of Swedes, 52 percent of French, 51 percent of Germans believe there is such a thing as distinctly European values. Only 36 percent of Irish people have that view and, interestingly, 39 percent of British people believe that there are distinctly European values.

So, in terms of having belief in European values, the British have a higher level in European values than the Irish do. Even though the Irish, of course, believe in being in the EU much more, which makes me think that the problem in Ireland is that Irish people are in the European Union for material reasons. They have not been convinced by their political leadership, which includes myself in my time in office, that Europe is not primarily about material things at all. The European Union is, in fact, about shared values. It is about shared sacrifice. It is about shared belief systems. And I think the problem that needs to be addressed in Ireland, in any attempt to get this Treaty adopted, is that the Irish people need to actually become Europeans in their hearts as well as in their pockets.

Unfortunately, I think that by adopting a sort of minimalist approach to European commitment, by looking for exceptions and exemptions, by trying to play down commitments to Common Foreign and Defense Policies, for example, rather than state them fully and honestly as to what they are, Irish political leaders are actually increasing this sense of detachment in Ireland from the European Union. This is a big problem for Ireland in its rejection of the Lisbon Treaty.

It is a big problem for Ireland. It's a problem for Europe, too, but it's not a crisis for Europe, and I think it's important to avoid using that term. The European Union continues to function very effectively in a whole range of areas, which I will not go into now. You’ll see this if you actually look at the performance of the European Union since 2004, in the four years since 2004, and in the four years prior to 2004, when we enlarged and everybody said, "As a result of enlargement and not getting the Constitution, there'll be all sort of problems." In fact, I think you could probably show that the European Union has been more effective in the four years with 27 members than it was in the four years with only 15 members in terms of decision-making. The problems of enlargement, which are so touted as a justification for changes, haven't actually arisen. So, it's not a crisis for Europe. It's a problem for the future and for future amendments to the Treaty that this stumbling block exists and it needs to be treated. But, it is not a crisis and we shouldn't treat it as a crisis.

What can happen now? I have identified in my vanity, four possible solutions. Every one of them is bad. But you can decide for yourselves whether they're better than doing nothing, which is the fifth option, which I won't go into.

The first option is to ask Ireland to vote again on the same text. It's arguable that this time people will actually understand it. And if the main reason was not understanding it, maybe this is a good option. But, the risk is that pride will come into it and people will say, "Well, we actually made a decision on the 12th of June, and you're coming back to us with the same document accompanied by a few political declarations, which we know perfectly well have no legal value at all. And you're asking us to vote on that again."

The risk is that even though people ought to vote "Yes" when they know more about it, they might be inclined to vote "No" simply because they felt that they weren't being taken seriously, and you've got to take voters seriously. We don't choose the voters. The politicians are chosen by the voters.

Also, if Ireland were to vote "No" a second time, I think suggestions like those that were recently made by the Center for European Policy Studies would emerge, whereby it would be suggested that the rest of the EU should go ahead and ratify the Lisbon Treaty in a consolidated form. This would of course mean re-ratifying it in all other countries, but leaving Ireland out.

That would involve a revolutionary change, in the true meaning of the sense revolutionary; it would abolish the long-established fact that EU treaties can only be amended by all countries agreeing. And that, I think, would have long trails of suspicion into the future where small members, for example, amongst the 26 who might go ahead in those circumstances, would feel much less secure in their membership with the European Union. I think it's a bad idea, but it's an idea that has been canvassed by responsible people. The risk of a second referendum is that it would tempt people to canvass that more seriously if there was a second "No."

Can the Lisbon Treaty be renegotiated or can the Lisbon package be renegotiated? That's my second option. Well, if one were to attempt to renegotiate any of the content of the treaty, one would have to re-ratify the treaty all over again. And there are some countries that don't want to do that for all sorts of reasons, and there are other countries that would see that as an opportunity to demand further exceptions for themselves. So, it would start out as a negotiation for one country could end up being a renegotiation for 27.

There is one thing that could be done, as I indicated, and that is, if it was thought wise, to address the concern about having a Commissioner all the time by setting aside the Lisbon formula for only having a Commissioner two-thirds of the time with a unanimous decision. That could be done without a treaty amendment, but I think it would run into an awful lot of difficulties with other countries who would say, "Reducing the size of the Commission was one of the reasons – maybe the main reason – why we agreed to other things to our disadvantage."

A third, equally difficult option would be to adopt the approach that most countries adopt when they go to amend their Constitutions. Even though they have never been called such, the EU Treaties are our “Constitution of Europe” anyway [because] they're the supreme law that guides our lesser forms of law.

The normal way that most countries would amend their Constitution is by putting individual proposals, one-by-one, either separately on the same day or separately on different days, to ratification either by their parliaments or by the people in the case of those who require referendum. And you could, without altering the Lisbon content, segment it up into a number of treaties, some of which wouldn't require a referendum in Ireland, because it's only the ones that affect sovereignty directly that require it to be in a referendum. So, those parts could be passed by Parliament.

But, again, this would involve controversy over how you slice it up. Some would say, "Well, you can't put that piece in a treaty without putting another part with it because we voted for that because we wanted to get the other." So, it would be extremely difficult to do such a segmentation. But, it would be more transparent. People would have more options when they come to vote. They would understand more fully what they were voting on because it would be a succession of individual proposals rather than a "take it or leave it blockbuster" that they had only one choice of saying either "Yes" or "No" to.

And the fourth option is to deal with the important Lisbon reforms in the next Accession Treaty, which will probably be an Accession Treaty for Croatia. You could include the essential reforms in Lisbon in the Accession Treaty, and since the Accession treaty has to approved by all Member-states anyway, the issue would then hinge on, do you want Croatia in, and if you do, you must have these reforms.

It would be a different question. It wouldn't run into the same difficulties that having another referendum in Spring would have in Ireland because it wouldn't be happening next Spring; it would be happening in a few years. But, it would reconstitute the same text and have it put people through the pain again. But, you know, it might be harder to say "No" to a particular country like Croatia than it is to say "No" to something dreamed up by bureaucrats and others meeting after good meals in Brussels.

The last thing I want to say is that it's possible to envision a way of sweetening all of these changes by introducing more direct democracy into the European Union. And this could be done either by amending the Lisbon Treaty or even without amending the Lisbon Treaty. One could agree that in the future, the new President of the Council or the President of the Commission would be elected directly by the people.

One of the reasons that it was hard to campaign for the Lisbon Treaty in Ireland was that, as the Americans would say, there was no "bumper-sticker issue," no signature point to which you could say, "This is really what the Lisbon Treaty is all about in three words."

Well, directly electing the President, that is a bumper-sticker issue. It means that just as people could change their government at national level by throwing the expletive deleted people out, they could do the same to the expletive deleted people at European level, which is something that's missing in European democracy, but very present in American democracy.

Would that command support? Probably not. Would it be a good idea? Certainly it would be a good idea. Would it close the gap between Europe and its citizens? Most certainly it would. Would that make some of the people sitting at the heads of government meetings in Brussels more comfortable? Most certainly not, which may be why it won't happen for a while. But, I've always taken the view – I suppose this is the only reason one could stay 35 years in politics as I did – that every problem is potentially an opportunity. So, I think rather than being weighed down by, "Oh God, those awful Irish. How ungrateful have they been? How stupid they have been? And what are we going to do about them?" and that sort of attitude, I think a more creative approach would be to say, "Are there ways in which this difficulty can be turned to an overall advantage to build a demos in Europe?" A democratic space in Europe of a kind that's not present at the moment, but that, in my view, Europe most definitely needs.

Ambassador Bruton then took questions.

Two questions, Ambassador?

Which parts of the Lisbon Treaty make it an issue of Irish sovereignty requiring you to actually have this referendum? Secondly, in Denmark, the country I represent, the way we got around our "no" in 1992 was to get some opt-outs. This would certainly not be something I would recommend, but are there particular issues that might be relevant for such Irish opt-outs?

Ambassador Bruton: In my view, Ireland already has more than enough opt-outs on all of the issues that were raised in this campaign. In fact, I'd like to see Ireland get rid of some of those opt-outs because I think they have a negative psychological effect on Irish attitudes towards Europe.

Among the issues in the Lisbon Treaty that touch on sovereignty and require a referendum, I think the proposed shifts to qualified majority voting (QMV) would be in that category. I don't think the changes in the composition of the Commission or other organizational changes make that much difference.

There is a moot point as to whether the EU's taking on new competencies would be something that would have an effect on sovereignty. So it would be well worthwhile, I think, to have a test case on that before the Irish Supreme Court.

But certainly I think the QMV things would be critical. And as I said, I think they're the most important and most valuable part of the treaty, much more so than some of the things that got more notice.

Question: Thank you for your very insightful explanation of the sort of psyche of the Irish people. I wanted to ask a question about the perception that some Irish people tend to look at the EU through their wallets rather than through their hearts or their minds. That, of course, is a concept that we Americans understand perfectly. Is it possible that if there were a second referendum and the volume of discussion about Europe without Ireland rose, that the impact on the Irish people would be to think with their wallets the second time around and say, "I don't understand it, I don't necessarily agree with it, but I'm economically better off because of it" – and vote yes.

Ambassador Bruton: -- I think anyone who is persuaded of something against their will isn't persuaded at all. Coercion is not a good means of achieving desirable election results. That's another reason why I don't think that strategy would work apart from some degree of natural closeness with Americans that Irish people have in some ways. It's probably true of every people feels that they have some particular sort of stubbornness built into their generic makeup. The Irish certainly believe that and would react very negatively to this half-mercantile, half-bullying approach [from the outside] to how they might vote.

I think there's another factor. While Ireland has been benefiting enormously from the EU membership since 1973 in terms of prosperity, partly due to the success it has got within the EU, Ireland is now reaching the point where far from getting money, it will actually be contributing money to the EU. So the argument might not work quite so well.

In my view, it's an approach to be avoided, at all costs. I'm a little bit worried that the logic in some things that people are saying now, is somehow leading inexorably in that direction, without people really thinking through whether they really want to go there. That's one of my reasons for saying that all of the four options that I put forward are actually bad options. We may have to pick one of them but I think we want to be very, very careful in thinking through the implications of any of the options – specifically, what we would plan to do if the option we chose goes wrong.

We cannot afford to travel in hope anymore. We've got to travel in knowledge of where we're going to reach and we've got to game-plan the whole thing fully, working back from the worst possible outcome to the best possible outcome, and seeing what would happen in between.

Question: The Netherlands, the country I represent, also voted down the treaty in an earlier referendum, so I feel your pain. I was wondering, among your "no" voters, which sort of feeling is stronger? Their negative attitude in their "no" about the referendum or their overall positive opinion about the EU? France's President Sarkozy has said that at the end of his EU presidency this year, he might have found a way out. If he proposes a political deal of some sort, would that create resentment among the Irish voters or would they welcome such a political deal, given the fact that they are in favor of EU cooperation?

Ambassador Bruton: All other things being equal, I think the Irish people's overall appreciation of the value of the EU – to them and to Europe as a whole – would win out. The Irish do appreciate the EU, maybe not as much as others do, but they do appreciate it as something for Europe as a whole.

But a lot depends on how things are approached. What are the psychological circumstances in which this is presented? If a more favorable psychological climate can be created, I think it be one in which Irish voters will look again at the Treaty and see in it things that they didn't see before, and appreciate the significance of some of the things that are in it in ways that they didn't appreciate before. They would feel they are doing that of their own free will, in an atmosphere where their judgment is being respected and will be respected whatever decision they take. But that requires enormous care, not just on the part of the Irish government. What is said by other statesmen in Europe or in any other part of the world about this issue will, within a few seconds, be relayed in Ireland and is capable of being misinterpreted in Ireland. So this is going to require a lot of careful thought.

I think it can be done. And one of the options that I suggested can work, but it's important whichever of them is taken, that it's done in the right set of circumstances, which I described as best I could.

Question: In this country, as you know, immigration is say a hot-button political issue and looking across the Atlantic, we have the impression that that's true there too. We read about immigration from new member states to more prosperous EU countries, including newly prosperous countries like Ireland. Has that affected Irish attitudes and Irish perceptions of the EU?

Ambassador Bruton: The Irish economy has continued to grow fast up to the last year, partly thanks to the arrival of Europeans from other EU countries who have come to work in Ireland in significant numbers. Immigration from other EU countries peaked in 2004. That has been vitally important in keeping the Irish economy going forward, up until last year, and people have a very positive view about it. Remember, Polish people coming to Ireland are not immigrants: They're Europeans going to live in another European country. And I think that's the way they are seen in Ireland.

There are in Europe as a whole, however, concerns about immigrants from non-EU states arriving in Europe with very little means or the skills for supporting themselves. That is creating problems for those countries. One of the reasons I'm sorry about the Lisbon Treaty it that it would have given the EU stronger powers to act in the area of common policies on immigration and refugees.

I don't think that that part of the Lisbon Treaty was one that had any influence on the vote in Ireland. And I think it's going to be difficult to reach agreement on at least some of these issues whether we have the Lisbon Treaty or not. But, no, I don't think it was a factor in the outcome, politically speaking.

Question: Ambassador, I was taken with your discussion of the degree and manner in which the Irish shared European values. I wasn't entirely clear whether you were saying that they do, in fact, share European values, but don't recognize it. Or they don't and that their values should be shaped in that direction. If the latter, how one might go about doing that?

Ambassador Bruton: That's a very acute question. I think most people don't talk about values all the time, and it's mainly elites who appreciate value-type discussions. When you think of it in this way, it's possible that it is not as important as it seems when one focuses on one question in the Eurobarometer poll Ireland where seemed to give a rather unusual answer. When it asked Irish people, do they believe that there are distinctly European values?, and they got a lower proportion saying "yes" than in other EU Member State, that may be due to the fact that so many Irish people look not only to Europe, but also to America, where so many of their relatives live, in determining what they feel comfortable with and what they think is their "value system." There is no other country in Europe, apart from Germany, that has as many of "cousins," so to speak, in the U.S. as the Irish do. So, I think some Irish poet described the Irish as having a "transatlantic mind," and that may have colored their answer to the values question. That is quite compatible, in my view, with the Irish being supportive of European values because really there isn't that much difference fundamentally between the values being promoted by the EU and the values of the United States -- some differences of emphasis perhaps, but not fundamental differences.

The more interesting question, I think, is a possible emotional reality that suggests that Irish people possibly haven't emotionally identified sufficiently with the EU and don't quite have the sense of ownership of the overall project that they ought to have. And that's the thing that Irish politicians need to address in a very serious way if they want Ireland to be a fully comfortable member of an evolving EU.

Question: Can I follow up on that? To what degree do you see Brussels' role in helping define that European common ethos?

Ambassador Bruton: I think it's probably going to be something influenced, in part, by people who are not involved in politics. The Pope (both the current one and his predecessor) has made very strong calls in favor of European integration. Europe's bishops virtually endorsed the Lisbon Treaty, and I think the same applies in other churches as well. So those who concern themselves with values, and with questions of how you express your identity without disrespecting someone else's – the leaders in these sectors need to be more vocal on this issue in Ireland. The Irish Catholic bishops issued a good statement which wasn't an outright endorsement of the Lisbon Treaty, but it came very close to it.

But in Ireland, just as in other countries, there are fundamentalists who believe, you know, that the devil is conspiring to bring us all down and that, for some of them, he lives in Brussels [laughter]. People of those types did have some impact, unfortunately, in the campaign, but it was not something supported by mainstream churches.

Question: I would like to congratulate you because I remember in the aftermath of the "no" vote in my country, France, there was no authority from the EU really ready to speak up. One of the reasons why the French people voted "no" was that politicians during the campaign for the referendum gave bad examples about globalization. In addition, some politicians in France argued for 'no'. If they had behaved differently, we would have got a majority.

Ambassador Bruton: I took part in the referendum campaign in France on that occasion, and the difficulty is, I guess, that if the politicians appear to be all on one side, voters feel that it is a conspiracy. On the other hand, if the politicians are on opposite sides, it can confuse people just as much.

I think the interesting thing in the French case is that those who led the "no" campaign haven't actually profited by it in their subsequent political careers. So I don't know that one can draw any conclusion that people who may have supported the "no" campaign, like Sinn Féin, in Ireland are going to benefit particularly from that.

It was a very bitter campaign in Ireland. A prominent leader, canvassing for the treaty, told me that he experienced jostling and sort of -- well, not actual violence, but threats of violence -- of a kind not experienced since the height of the famous hunger strikes involving the IRA. Why I don't know: I really can't understand why some of these groups, who are opposed, were so angry.

One of my worries, I have to say, about some of the thinking being advanced at the moment -- to the effect that the Irish might be asked to have another referendum next spring -- isn't to do with objections in principle to such a course, but rather with the tactical reality that Ireland may be in much worse economic condition by spring 2009 than it was in June 2008. Of course, it may be different again by spring 2010: Ireland may be in much better condition by then:I think it has a pretty resilient economy. But at the moment, there is a housing bubble being deflated, and people in Ireland are going to be very angry in spring of 2009.

I'm of a generation of Irish people who knew both good and bad times. But many of the people under the age of 35 or 40 in Ireland have never known anything but continuing prosperity, until this year. And they're not going to be in great humor about it next spring. So, some of this irrational anger that was present last June may be even more acute next year.

Question: I wonder if you have sensed, you and your colleagues, any slowdown in momentum, any new dimension of skepticism in dealing with Americans and other people with whom the EU works as a result of the disappointment and with the failure to ratify in Ireland.

Ambassador Bruton: No. I think, in fact, the EU has a more favorable view of the United States than it had a year ago, by a considerable measure. This is due to a number of factors. The outreach by the current administration, but also the election campaign here in the United States, which has presented the U.S. in a much more vibrant, democratic light than Europeans might have seen it previously. So I think the willingness on the part of the Europeans to cooperate with the United States, will be strong.

The EU has a lot of powers under the existing treaties as well to do work on defense and security issues with the US. Maybe not as many powers it might have if the Lisbon Treaty were in force, but still quite considerable powers. And I think the European Union should be persuaded to use those powers to the fullest.

As this is the last question, may I compliment the European Institute on your work, on the way in which you make Europe known here, on the very high quality of your publications, which I find extremely informative and useful.

 
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Kyoto Protocol

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A Long Decade of Negotiations: The Difficult Birth of the Kyoto Protocol

As a result of what many considered to be increased evidence of human interference with the climate system and growing public concern over global environment issues, the UN Environment Program (UNEP) and the World Meteorological Organization (WMO) established the Intergovernmental Panel on Climate Change in 1988.

That same year, the United Nations General Assembly held its first debate on climate change and adopted resolution 43/53 on the "Protection of the global climate for present and future generations of mankind (IPCC)." This resulted in 1990 in negotiations conducted by an Intergovernmental Negotiating Committee (INC) for a framework convention on climate change.

On May 9, 1992, the United Nations Framework Convention on Climate Change (UNFCCC) was adopted by governments and was opened for signature on June 4, 1992 at the UN Conference on Environment and Development (UNCED), otherwise know as the Earth Summit, in Rio de Janeiro. The Convention is not a legally binding treaty but rather an institution of which countries are members.

The Convention came into force on March 21,1994. Today, 186 governments, including the European Union and the United States, are parties to the convention and it is approaching universal membership.

The ultimate objective of the Convention is "to achieve stabilization of atmospheric concentrations of greenhouse gases at levels that would prevent dangerous anthropogenic (human-induced) interference with the climate system." The Convention does not define "dangerous," but says that the ecosystem should be able to adapt naturally and that economic development should proceed in a sustainable manner.

The Convention sets different goals for countries according to their levels of development, and expects the most developed countries to lead the way. It establishes the Precautionary Principle, embodying the idea that there are no certitudes as to the effect of human activity on climate change, but that if action is delayed until proof is available it may be too late. The Convention recognizes that countries may become greater contributors to climate change as they develop, and, therefore, emphasizes sustainable development.

Although seen by many as significant progress, it was realized that the Convention on its own had limitations. The Berlin Conference of the Parties (COP) in March and April 1995 launched a new round of talks to decide on clearer commitments for industrialized countries. The Convention recognizes that developing countries have certain economic needs and cannot comply with the standards it has set. The industrialized countries are expected to lead the way. This concept is applied in the Protocol, which is why countries like the United States criticize the Protocol for favoring developing countries.

This round resulted in the Kyoto Protocol, which was adopted in Kyoto, Japan on December 11, 1997. The 87 countries that signed the Protocol indicated intentions of also ratifying it. But while the Protocol resolved some outstanding issues, it did not fully explain how its objectives were to be implemented, making some of the signatories reluctant to proceed with ratification.

A new round of negotiations was accordingly launched in Buenos Aires in November 1998, to draft the Protocol's rulebook. This round, which agreed on a plan called the Buenos Aires Plan of Action, linked negotiations on the rulebook with talks on implementation issues under the Convention. The deadline for the end of negotiations was the COP meeting of November 2000 in The Hague. Technical and political difficulties, however, caused the negotiations to break down.

Talks reconvened at a COP session in Bonn in July 2001, which adopted the so-called Bonn Agreements. These mainly constituted a political deal signing off on the most controversial aspects of the Buenos Aires Plan of Action.

The next COP meeting, in Marrakech in October and November 2001, built on the Bonn Agreements and came up with a rulebook for the Kyoto Protocol. It also achieved significant advances in the terms of implementation of the Convention and its rulebook.

These agreements, known as the Marrakech Accords, ended a cycle of negotiations by launching a new implementation phase for both the Convention and the Protocol, based on a complex combination of institutions, rules, procedures, and mechanisms that is the most elaborate of any international environmental agreement.

The Kyoto Protocol supplements and strengthens the Convention as it is a legally binding treaty, which has the same objective as the Convention, and specifies the reduction of gas emissions by five percent from 1990 levels by 2008-2012.

The Protocol's emissions targets cover the six main greenhouse gases: Carbon Dioxide (CO2); Methane (CH4); Nitrous Oxide (N2O); Hydro §uorocarbons (HFCs); Per §uorocarbons (PFCs); and Sulfur hex §uoride (SF6). Only countries that are already parties to the Convention can ratify (or accept, approve, or accede to) the Protocol and thereby become parties to it.

The rules for entry into force of the Kyoto Protocol require 55 Parties to the Convention to ratify (or approve, accept, or accede to) the Protocol, including Annex I Parties1 accounting for 55 percent of that group's carbon dioxide emissions in 1990. These criteria ensure that no one party, not even the United States, can veto the Protocol.

Today, the Protocol is getting closer to the entering into force stage since the European Union became a party to the Protocol on May 31, 2002 and Japan adopted the Protocol on April 6, 2002. There are now 74 countries that have adopted the Protocol, which satisfies the first requirement for enforcement. Of these countries 20 are Annex I countries, representing 40.9 percent of the Annex I countries' carbon dioxide emissions in 1990. Thus, Annex I countries accounting for a further 14.1 percent of carbon dioxide emissions in 1990 must still ratify the Protocol to meet the second requirement and allow it to enter force. If either the Russian Federation (17.4 percent) or the United States (36.1 percent) were to adopt the Protocol, it would then go into force. However, the U.S. administration has announced that it will not ratify the Protocol because of the negative economic effects it would have on U.S. industry (the United States is responsible for the largest share of carbon dioxide emissions) and also because Washington views the disparity between the requirements imposed on industrialized countries and developing countries as unfair.

For more information about the Convention and the Protocol: http://www.unfccc.int/resource/convkp.html

 


1 Annex I parties are: Australia, Austria, Belarus*, Belgium, Bulgaria*, Canada, Croatia*, Czech Republic*, Denmark, Estonia*, European Union, Finland, France, Germany, Greece, Hungary*, Iceland, Ireland, Italy, Japan, Latvia*, Liechtenstein, Lithuania*, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Poland*, Portugal, Romania*, Russian Federation*, Slovakia*, Slovenia*, Spain, Sweden, Switzerland, Turkey, Ukraine*, United Kingdom, United States.

The * indicates countries with economies in transition.

 
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Geographical Indications

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European Names for Food and Drink Cause a New Transatlantic Dispute

A divisive new trade conflict between the United States and the European Union is becoming increasingly important in the latest round of world trade negotiations, the Doha Development Round. The emotive, but previously obscure dispute is over "Geographical Indications (GI)," the place names such as Champagne or Cheddar that designate the areas in which certain sought-after foods and drinks are produced, and that give them their distinctive appeal.

The dispute reflects longstanding grievances among European agricultural producers, who complain that competitors in other countries - above all the United States - have effectively stolen many of these names and applied them to their own products. The wine trade is especially rife with this practice, with European names such as Bordeaux, Burgundy, Chablis, Champagne and Port used freely by producers in other countries to promote the sale of wines produced thousands of miles away from the regions that the names designate. The United States also has complaints against other countries, for example over the abuse of the name Bourbon to market imitation American whiskeys.

Several new factors are now bringing the dispute to a head. There is already limited protection for the geographical names under the World Trade Organization agreement on intellectual property (TRIPS). The hope, however, is to negotiate stronger protection in the Doha Round by September 2003. The European Union wants not only to increase existing protection for wines and liquors under the agreement, but also to extend similar international protection to other drinks and food products, such as Parmesan cheese and Bayonne ham, which are already protected in the European Union. Its aim is to create an international register of names that would be presumed to be protected in future in all countries adhering to the TRIPS agreement, that is most of the world.

In addition, the European Union is raising the issue in another part of the Doha Round, the broader negotiations on agriculture that are likely to decide the success or failure of the whole venture. The European Union wants to establish a "short list" of well-known European names that have been already usurped by producers in other countries, and reach an agreement on returning them to the original producers.

The United States contests this approach, and argues that existing measures to protect such products are sufficient. In the United States, for instance, Roquefort and Stilton cheese are already protected under U.S. trademark law. Washington says the European Union is not entitled to raise GIs in the agricultural talks and that they should be discussed in the TRIPS negotiations or in bilateral talks.

The United States insists that some names, such as Vermouth, have become "generic" and that sole entitlement to their use cannot be given back to the original producers. It has conceded that U.S. producers might relinquish "semi-generic" names, such as Champagne, but it wants something in return. The quid pro quo would be for the Europeans to agree to the mutual acceptance of European and American wine-making practices. The United States says that the European Union's failure to recognize U.S. practices is keeping American wines and liquors out of its market.

The United States also opposes the European Union's attempts to establish a register of names in the TRIPS negotiations, which it says would be unnecessarily cumbersome and bureaucratic.

Some angry European producers say they should not have to pay a price to get their own names back. But a bargain would in a way suit the European negotiators. If they are to make concessions on agriculture in the negotiations - and they will have to if the negotiations are to succeed - they need to demonstrate that they have achieved equally important concessions from their negotiating partners. The recapture of prestigious names such as Champagne and Port would be a significant negotiating prize that could help justify concessions in other areas to European public opinion.

The Europeans are warning that if they do not get their way, the entire agricultural negotiations could be endangered. They point out that there can be no overall agreement until agreement has been reached on every single item under negotiations. If there were no agreement on agriculture, the entire Doha Round would be jeopardized.
 
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Kaliningrad

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A Tug-of-War Between Brussels and Moscow

Kaliningrad is a Russian oblast (administrative district) located between Poland, Lithuania, and the Baltic Sea, cut off from the rest of Russia. The current problem between Russia and the European Union is over the border regime that Poland and Lithuania will apply to Kaliningrad citizens after the two countries join the European Union, probably in 2004. At present, the residents of Kaliningrad do not need visas to travel to or through the territory of their two European neighbors.

EU policy, however, will require them to apply for visas once Poland and Lithuania become EU members. The requirement is part of the Schengen Agreement, which provides that open borders inside the European Union are to be offset by stronger controls at the Union's common external frontier.

Russia takes great exception to this requirement and has demanded that a special case be made for citizens of Kaliningrad who may need to travel through Lithuania to reach Russia proper. Although difficult negotiations are still under way, there is hope that a solution to the Kaliningrad issue will promote a substantial growth in EU-Russian relations.

Kaliningrad was originally a territory of East Prussia, which was divided in two after World War II. The Northern section was annexed by the Soviet Union, and its main city, Koenigsberg, renamed Kaliningrad. The southern section became part of Poland.

When the Central European countries won their freedom at the end of the Cold War, Kaliningrad remained part of Russia, although disconnected from the rest of the country. With its strategic position on the Baltic Sea, Moscow hoped to transform the district into a "Russian Hong Kong" by making it a free trade zone. In order to promote trade with its European neighbors, Kaliningrad has applied loose border inspection and controls.

Although Kaliningrad has much agricultural and industrial promise as a free trade zone, there is little hope of its emulating Hong Kong. The World Bank's Transition Newsletter says that foreign investment, especially from EU entrepreneurs, has been all but discouraged by what the Europeans see as the "seemingly arbitrary nature of Russian law." And while Kaliningrad has attracted more foreign direct investment than the rest of Russia, it lags far behind its Baltic neighbors.

The economy is one of many tribulations plaguing the Kaliningrad district. "Residents of Kaliningrad are 65 times poorer than EU citizens, and also considerably poorer than people living elsewhere in Russia. Almost one-third of the population lives below the subsistence level," according to the World Bank newsletter. Economic isolation and one of the highest AIDS and tuberculosis rates in Russia aggravate poverty in the region.

The tiny enclave also suffers heavily from air and water pollution, and the disposal of nuclear waste is a massive burden. "In view of the past military presence in Kaliningradƒthere are also problems arising from stockpiles of chemical weapons left over from the Second World War," according to the European Commission.

Another important consideration for EU-Russian relations is that Kaliningrad continues to be a key military outpost for the Russian Baltic Fleet. That is also relevant for NATO, which already includes Poland and is likely to admit Lithuania later this year. When Poland and Lithuania become EU members, Kaliningrad's problems will almost automatically become those of the European Union, "given the obvious cross-border implications of crime, pollution, and health issues," the World Bank publication says.

Such problems can only heighten the importance of the regime adopted at the future EU-Kaliningrad border. As a result, Brussels and Moscow are being forced to negotiate and to reshape their policies toward one another. The hope is to resolve the issue by the European Union's Copenhagen summit meeting in December, which is due to finalize the list of new member states. According to the World Bank newsletter, the following issues must be tackled:

  • The trade impact of enlargement on Kaliningrad and the European Union
  • The improvement of border management and accelerated border-crossing procedures
  • A "multimodal" transport strategy and the funding of transport projects
  • Investment requirements to modernize the region's transport infrastructure
  • Kaliningrad's future energy supplies
  • The consequences of enlargement for access to fishing grounds
  • Kaliningrad's environmental problems
  • Visas, border traffic, and transit procedures
The visas are the toughest sticking point in the EU negotiations with Russia. European policymakers are adamant that, after enlargement, all foreigners will be required to obtain visas in order to enter and leave EU territory. In light of the problems the region has with organized crime, disease and poverty, Brussels views visas as a necessary security measure.

Moscow, however, is demanding a right of free transit, without visas, through Lithuania to the rest of Russia. It does not want its citizens to be burdened with long and crowded lines in consular offices, and argues that their human rights will suffer if it is made more difficult for them to travel between parts of their own country.

Brussels has proposed flexibility on the price of visas and/or the possibility of issuing multiple visas to frequent travelers. It has accepted the possibility of visa-free travel across Lithuania via special high-speed, sealed trains. It is also willing to help expand consular services in Kaliningrad, and in its future EU neighbors. Although the two sides have been negotiating for quite some time, there is no sign yet that a final decision is near.

A further complication is that the more concessions the European Union offers to Moscow, the more it is likely to antagonize Lithuania, which has accused EU negotiators of trading away Lithuania's sovereignty even before the country has joined the European Union and eroding support for EU membership.

Ultimately, the Russian government will have to decide whether it wants a working relationship with the European Union. U.S. and EU officials see Kaliningrad as complicating EU-Russian relations, but do not believe that it will obstruct the European Union's enlargement. Regional prosperity is good for Russia, too.

At present, however, Russia is subject to internal as well as external pressures. While Moscow is being urged by the European Union to reach a settlement, it is also under pressure from its own citizens. For many years the politics of Kaliningrad were not of great public interest. Times, however, are changing, as Russian voters are now more concerned than ever with the integrity of Russia in the eyes of the world, according to Russian analysts. Russia's true concern with the Kaliningrad situation lies not with the residents of its distant enclave, but in demonstrating its ability to negotiate firmly as a major world player; it wants to see the European Union take its views into account.

The truth is that links between Kaliningrad and the rest of Russia have historically been far weaker than Moscow is currently asserting. While nearly 34 percent of Kaliningrad's residents have traveled to Europe, a startling 70 percent of them have never been to Russia proper, according to EU and Russian statistics. For the most part, the enclave subsists by itself, with little more than institutional and financial links to the mainland. These factors seem to support the notion that while Kaliningrad depends on financial support from Moscow, its leaders want less interference in the district's internal problems from the Russian federal government.

Moscow realizes the economic opportunities of working with the European Union. Analysts say that the European Union is by far Russia's biggest trading partner, and President Vladimir Putin is keenly aware that rapprochement with the Union is his country's best hope for economic development. It is also quite evident that with the European Union expanding closer to the Russian border, these economic ties can only grow stronger.

Russia understands that it "stands to benefit substantially from enlargement and regions such as Kaliningrad are well placed to take advantage of the new opportunities, including lower tariffs, etc., which will be created," the European Commission says.

Kaliningrad is an important test case - it brings up many issues that will have to be resolved with Russia in a wider context. None of them, however, should create insurmountable obstacles to improved political or economic relations between Brussels and Moscow. The beginnings of change can already be witnessed in Moscow. The Russian daily Izvestia has reported that, by 2004 all Kaliningrad residents will be provided with external passports, a development that might help with a solution.

 

 
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Hold the Rhetoric and Stimulate the Transatlantic Aerospace Industry

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Whether or not the world’s financial crisis is successfully managed will depend on the ability of America and Europe to work together effectively.

This is the first REAL transatlantic test since WW II. The last six decades have been mini-tests of competition leadership, image, Old Europe, New Europe, Super Power, Cold War, NATO, deregulation, labor, engineering prowess, and distractions, such as “Freedom Fries”.

Transatlantic adolescence has created technical competence, industrial parity, financial sophistication, political integration, and global leaders. Looking back, the spats and frictions, posturing, complaining, and the pundits’ debates all seem grossly insignificant and even inappropriate. The jousts on the fields of commerce and politics were tests of the “knights” awaiting the real battle.

The real battle is now! The numbers that will be debated at the G-20 are staggering! The possible consequences are frightening. We are going to see stimulate, spend, borrow, hope.

The test is now whether America and Europe can rovide the global leadership necessary to reconstruct the banking system, create jobs and investment, maintain global security, and sustain a quality of life and the confidence of markets.

Perhaps the most dramatic example of a strategic industry that is vital to both Europe and the U.S. is... Aerospace.

The aerospace industry was literally invented and developed across the Atlantic. It may well be THE most important business segment for national security, job creation, capital investment, technological advancement, global trade development, and national prestige.

The maturing of this industry has resulted in a handful of major players with corporate flagpoles on both sides of the Atlantic.

The last two generations have seen annual “air show jousting” over relative market share and technology “one-upmanship”. The U.S. and Europe have been keenly tracking who is pulling ahead or falling behind in this dramatically growing marketplace. Today’s events make this now seem almost trivial.

Governments are the largest customers and global airlines purchase billions in sophisticated aircraft. Governments this week will be talking trillions for “stimulus”.

The future of the transatlantic alliance is not assured. The unintended consequences of bank collapses and credit crunches, protectionism, pressure on capital intensive investments, lack of next-gen engineering resources, and reduction in military spending could put the entire industry into a tail spin.

TRANSATLANTIC STIMULUS of the vital aerospace sector must focus on issues much broader and much more strategic than feuds over what loans were made, who got the tax breaks, and who gamed the Research and Technology contracts.

The comparative commercial superiority of either the U.S. or Europe will be measured “on the margins”, and the competition is healthy, robust, emotional, and a benefit to consumers, war fighters, and governments. The real focus of “stimulus” should be on the “core” of aerospace, i.e. preserving the strategic capabilities, jobs, research, systems integration, design engineering, and shared technologies necessary to keep the transatlantic leadership of aerospace.

Rather than complaining about the relative market share, the U.S. and Europe should develop mechanisms for continued (and expanded) government investment in aerospace development programs. These investments are not just “shovel ready”, they are now “shovel busy”. Immediate stimulus is created (on both sides).

Because the aerospace supply chain for both America and Europe has significant impact on transatlantic jobs and commerce, stimulus of this supply chain benefits all. Keeping momentum in development programs is critical. Protectionist rhetoric must remain politics, not policy.

The transatlantic parties must take inventory of any and all potential barriers to their effective global leadership... and then promptly remove these barriers before they poison the ability of the U.S. and Europe to solve the really important problems.

Problems that, frankly, cannot be solved by anyone else.

 

Allan McArtor is Chairman of Airbus Americas, Inc. This is the maiden op-ed in the new “Perspectives” page of European Affairs.