Ways of overcoming the crisis of confidence in Europe

Ceci est le texte de ma présentation à la table ronde organisée par le Parlement de Russie (Douma d’Etat) à Moscou le 25 novembre 2014. Le texte est en anglais.

Ladies and Gentlemen,

Europe, in its largest sense is now facing one of its most tense, and even dramatic, situations since the end of World War II and of course the end of the Cold War. We feasted this last event 25th anniversary in a mood of considerable discontent. This is no mistake. A lot of opportunities have been spoiled since 1989 and this reflects in the feeling of most European countries population. Remember that by 1990 we were dreaming of a reunified European continent, one where people could freely organize themselves their life without undue constraints dictated by geopolitics. Of course some of these ideas were dreams and others were simply premature. But we have to question ourselves what has been done of all these dreams and what to do with the present discontent.

This is a very serious issue, one of which could decide of peace or war for the continent. We have to closely examine what provoked this situation and how we could possibly respond to it.

 

The crisis in Europe, the European Union and the dangerous periphery.

What has been called “transition”, that is the end of the Soviet system in Eastern Europe, ended-up into a process of European Union enlargement. As such it was highly applaused. For a large number of people this was clearly the most logical solution. As a matter of fact, the process of EU enlargement was largely driven by hopes about a quick increase of the average income level. But results have been to some extent disappointing. If such an increase has been observed in some countries, like Poland, the gap between “older” and “new” EU members still subsists. The dividing line between Europe born in the XVIII and XIX century and linked to the Industrial Revolution had not been abolished. Actually but for two countries (Poland and Slovakia) long term GDP growth was under 1,5% a year.

It is also quite striking to see that the income gap is now more or less the same between Germany, France and Netherlands on one hand and countries like Romania, Bulgaria and even Hungary in the other that what it was in 1938. Enlargement did not give birth to a process of income equalization or catch-up but for Poland and Baltic States. When the 2007-2008 crisis struck all these imbalances and disequilibrium were suddenly revealed.

Figure 1.

GDP growth in Eastern Europe since 1989

A - GDP EE1

Sources: IMF data bases.

Figure 2

The EU crisis since 2007

 A - GDP WE1

IMF Data base.

Inside the European Union, which we have to remember is not Europe but just a considerable part of it, the current economic situation is bleak to a point never reached since 1945. Southern Europe is struggling between stagnation and deflation and even Germany is now feeling the crunch of a possible recession. Italy GDP has decreased by 9% since it 2007, Spain by 6%, and we know all the predicament of Greece and Portugal. This economic crisis is coming at a time of deep political uncertainties. EU institutions are contested as we have seen in the recent European polls and definitely lack legitimacy.

But problems are not just internal to the EU. Middle-East events are letting the shadow of possible terrorist acts to spread over Europe. The risk of having the spill over of Middle-East events destabilizing Europe is now quite important. We all remember the 2004 Madrid commuter station bombing and we know that such a spill over is quite possible considering the sheer number of young people who are fascinated by the so-called “Islamic State”. Then, we have the current situation in Ukraine and the increasing uneasiness brought by the sanction process all over Europe. The combination of these different crises is making current times difficult if not utterly dangerous. However reactions from governments are not up to difficulties of the time. This is making the question of rebuilding a true co-operation spirit across Europe even more important.

 

The need for co-operation and the pretence of “exceptionalism”.

The need of re-establishing a co-operative view among most of European countries is mandatory. All the aforementioned problems cannot be solved without some cooperation. Nevertheless to achieve this possible cooperation some old habits are to die and to die fast. The first one is the insane pretence of European Union countries to represent Europe and to carry the highest possible moral standards. Europe is not the EU. This is true in a geographic sense, in a cultural sense and also in a political one. We all know that Russia is part of geographical Europe even if part of its territory is also in Asia. We all know the Russia contribution to European culture and science. Then we have the issue of “moral standards” and the specific pretence of EU on this point. To some extent we can speak about a form of European “exceptionalism” on par with the one developed by United States.

All the talks about “European values” which can be heard in different capitals are just actually establishing a new ideological barrier to co-operation. Not that the development of EU institutions have not generated strong and important debate. But the claim of having a dominant position when it came to “moral standards” or “values” is not founded and actually self-destructive. EU countries reneged several times on their so-called “principles”, be it in international affairs with Kosovo and latter with the involvement of some EU countries (Poland among them) in the US aggression on Iraq in 2003, or in their internal ones. Let us remember how some European voters have been robbed of the result of their votes in the 2005 referendum on the European constitution project. Some EU political mechanisms, like the process of negotiation with the US government on the TTIP or the so-called “Budget pact” voted in 2012 have very sketchy democratic basis to say the least.

No genuine co-operation is to be achieved till one part of Europe is to pretend it represents Europe as a whole nor has a “moral superiority” over other countries. The EU pretence of “exceptionalism”, as the well known US one, is a major roadblock on the way of establishing a true co-operation. This is not denying the existence of universal principles. It is just acknowledging the fact these principles have been violated by the EU as well as others. A return to realism and humility is needed and even a perquisite if we really want to achieve true co-operation.

 

The Ukrainian crisis

One very good example could be found in the Ukrainian crisis. It erupted in a violent form with the February 20th shooting on Maïdan Square. However, it has been made very clear by different witnesses and analyst that the shooting was not one-sided and that among Maïdan protesters we could find also provocateurs driven by a definite political agenda. The flight of the elected and legal President M. Yanukovich opened the doors to a process of violent overthrow of the legal order in Ukraine, leading to the collapse of the constitutional order. This was and still is the ground vindicating local referendum as people are the only deposit of national sovereignty. This at least is what the French 1789 revolution has taught us and this became part of international law through the United Nations charter of 1945. As a result, the only possible solution not leading to a civil war in Ukraine would have been the meeting of a constituent assembly charged with the writing of a new constitution. This had not been done. EU countries, with a strong and dominant backing of the US government pushed the idea of a provisional government under the old Ukrainian constitution. This led to a bloody civil war, with the use of air asset by Kiev’s government against part of the population, the same situation that led to foreign intervention in Libya in 2011. However, this time, Western countries did not react.

When Russia expressed legitimate concerns over Crimea and then over the situation of populations of Donetsk and Lugansk oblast’ the reaction of the US government and the EU was to implement “sanctions” against Russia. Quite soon, US sanctions took the precedence as the US government pretend that the use of the USD event if outside the territory of United States is falling under US laws. This led to a really extraordinary situation where one country pretends to implement “extra-territorial” laws. This created a considerable downturn in the pattern of international co-operation. Of course, Russia reacted, implemented too its own set of sanctions and we ended in the actual situation where a new wall, invisible but quite real, is now falling across Europe. This is a genuine tragedy. It is compounded by the failure of Minsk agreements. The cease-fire has never been really implemented and the daily number of fatalities is exceeding 10 since the cease-fire. The collapse of Minsk agreement is an unavoidable facts and it would need renewed co-operation between Western Powers and Russia to enforce a real cease-fire and a workable agreement.

Still, anti-Russian feelings are quite high in Western medias, and among part of the political elite. But, these feelings are not a policy. They are masking the lack of a genuine policy trying to solve different problems we are facing and we will face in the next future. The EU needs Russia as well as Russia needs the EU. But, as a matter of fact emotions took the driving seat over rational decision-making. This is a dangerous situation.

 

An ambitious agenda

How to make progress is such a situation?

First of all dialogue is to be either preserved or may be rebuilt. This implies some short-term measures to be quickly implemented. Among them the fact that agreement signed before the establishment of the sanction regime are to be implemented if only as a good will gesture. Of course, this implies the delivery of the two amphibious ships of the “Mistral” class when it came to France. Then come the issue of trade and economics. We all know that sanctions are disruptive both ways and that the EU industry is stricken as well as the Russian financial system. These sanctions are to be progressively abolished as a first step on the road of re-establishing a true dialogue in Europe. These things have already been said, and they have to been done. But they are not enough. Here again making no mistake. It is not possible to go back to “business as usual”. What happened could not be dismissed. We have to find a way to live with the consequences of what happened in this fateful year 2014. This involves thinking into more long-term measures.

We are obviously in the need of a new Helsinki Conference, something not similar but on the historical 1975 pattern. The historical CSCE (or Conference on Security and Co-Operation in Europe) was a major step into re-establishing a true dialogue between what was called by then “West” and “East”. Without Helsinki, never the Cold War would have ended the way it did. However, this time, this conference is to include all European countries and only European ones (that is without Canada and United States). Things to be discussed at this conference fell under three specific items.

The first one is to define rules enabling to manage the contradiction, and this means much more than a simple opposition, between Westphalian principles and principles born from the Enlightment and the French 1798 revolution. Quite clearly State sovereignty is the corner stone of all international relations but also of democracy inside countries. On the other hand some principles like the right to decide of its own future ad the necessity to protect populations have become more and more important. The question is to know how these possibly conflicting principles could be reconciled with the least possible ambiguity. It s no more possible to have international rules bent like they were in Kosovo and then EU countries proclaiming their indefectible attachment to the same rules.

The second item is about collective security in Europe and its periphery. The CFE treaty is dead. But this doesn’t mean that we are not in the need of another treaty. This treaty is to include rules, coming from the first item to decide when military force is to be used, here again with the least possible ambiguity. The idea of a world where no military force will be needed is not a realistic one. We have a large terrorist movement now spreading at the southern periphery of Europe. We definitely need a specific agreement about rules commanding the use of military force and the level of force needed. This would help to resolve situations like Libya in 2011 or the one now developing at the border between Syria and Iraq.

The third item is the simplest one and would cover economic, scientific and cultural co-operation. Co-operation is needed not just between States but also between regions of different States. We need to find common rules governing this co-operation without endangering the principle of Sovereignty as defined in item one. The main issue is to achieve co-operation and not to design from above a kind of new “supra-national” State in economic, of social disguise. On this point I stand from a “Gaullist” point of view. But, if we look behind us we could find a lot of occasion where co-operation worked fine and well, and much better than any attempt to build any kind of “supra-national” institution. Of course co-operation is not compatible with some kind of “extra-territorial” rule or law taken by any country. I think that the prohibition of such laws and regulation would be an important step toward a true and genuine co-operation.

 

Such an agenda would look ambitious and to some point certainly is. But, without ambition we are stuck into day-to-day problems and possible solutions of these day-to-day problems would induce latter conflicts. We need ambition to set a new agenda of cooperation, but this ambition is to come from realism and humility and not from boasting exceptionalism and so-called “moral superiority”.


Jacques Sapir

Ses travaux de chercheur se sont orientés dans trois dimensions, l’étude de l’économie russe et de la transition, l’analyse des crises financières et des recherches théoriques sur les institutions économiques et les interactions entre les comportements individuels. Il a poursuivi ses recherches à partir de 2000 sur les interactions entre les régimes de change, la structuration des systèmes financiers et les instabilités macroéconomiques. Depuis 2007 il s'est impliqué dans l’analyse de la crise financière actuelle, et en particulier dans la crise de la zone Euro.

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