Jonathan Holslag On world order and disorder

Europe

Holslag, Jonathan, 2014. De Kracht van het Paradijs. Antwerpen en Amsterdam: De Bezige Bij. (Read)
Holslag, Jonathan, 2013. The Eurasian Sea. Survival, 55, 4. (Read)
Holslag, Jonathan, 2011. The Elusive Axis. Journal of Common Market Studies, 49, 2. (Read)
Holslag, Jonathan, 2010. China’s Scepticism of Climate Champion Europe. International Spectator, 45, 1. (Read)

Fleuron

While most of my attention goes to Asia, I always found it important to study the region from a specific European viewpoint. This is important, because Asia means something different to a region that is part of the same vast Eurasian landmass than to a country that is separated by a large stretch of ocean. It also means something different, for example, to a region that heavily relies on the import of natural resources than a region that is quasi self-sufficient.

One of the questions that I asked myself was how Asia’s transition affected Europe’s economic interests. In 2005, I wrote my very first paper on the Sino-European relations. At the time, relations were still very smooth and expectations high. The paper was controversial among officials, because it argued that Europe’s policy of conditional engagement was destined to fail and that the economic layer of the partnership would weaken as a result of decreasing economic complementarity. In other words, the fundaments of the partnership were much weaker than assumed. These predictions were largely confirmed. In 2011, I evaluated the partnership another time and concluded that it had failed to turn its ambitions on paper into practice. In 2011, another paper evaluated this more specifically in the field of trade. In 2014, a study looked at the security dimension.

Soft and hard

A very salient part of Europe’s foreign policy was its pretensions to become a norm setter. Europe did not need much hard power, the idea was, as long as it could change the behaviour of others by being a role model. A study of 2010 found that this approach was deeply problematic. Not only did most of the emerging powers not accept Europe’s role as a norm setter, they also resisted it. Countries like China, India and Russia started work more actively with the majority of developing countries to promote a new generation of international standards. This was specifically true with regard to climate change. Europe thought again that it would emerge as a leader. Yet, I posited in a paper for the European Parliament, countries like China did not buy it. Moreover, I predicted that if Europe already managed to get the issue of climate change on the agenda, China was working harder to turn it into an economic opportunity. A few years later, Chinese companies unleashed a flash flood of solar panels on the European market.

Then there was the discussion about how Europe had to respond to the growing military tensions in Asia. Since 2001, the European institutions have been promoting a more active role in Asian security. After 2010, they started to advocate even that Europe had to try to mitigate the rivalry between the Asian powers. Some officials even argued that it needed to strengthen its military presence beyond the Strait of Malacca. The argument that I advanced was that such effort would lead to overstretch. The only way for Europe to weigh on the new Asian power politics is to make itself indispensible where the Asian titans are the weakest. That is still along the long supply lines to the Middle East and Africa. So, I asserted, an effective neighbourhood policy would be much more effective than a flimsy Asia policy.

The power of paradise

My travels to Asia and my frequent encounters with Asian decision makers ultimately encouraged me to write a large book about how Europe can survive in what inevitably will become an Asian century. The book was launched at the backdrop of the European elections of 2014 and the crisis in Ukraine. A first argument of the book is that the new crisis of the European project is different. Yes, the European Union has moved out of the crisis with more competences as indeed it did in the past. And, yes, Europe was mistakenly declared death several times before. “Each crisis,” former Commission President Jacques Delors concluded, “has made Europe stronger and more ambitious.” Still, the current crisis is not the same. In The Power of Paradise I distinguish four levels of problems.

To begin with the crisis of European decision making is far from over. It is true that state leaders do no longer have to drag themselves from the one make-or-brake-summit to the other. But the disagreements have just moved away from the camera lenses, away from the intensively covered councils meetings to the more discreet gatherings of diplomats and technocrats. There, member states are still too far apart to develop real economic governance, to come up with a real industrial policy, for example, or to advance a common energy policy. Europe has successfully addressed the Eurozone Crisis, but it fails to address some of the weaknesses that caused the crisis.

Meanwhile, trust in the European Union continues to atrophy. In 2013, only 37 per cent of Europeans had trust in Schermafbeelding 2014-07-03 om 14.37.00the European Union. That is an all-time low. The rise of the Eurosceptic parties, such as the UK Independence Party and the French National Front, only accentuates this trend. But it would be mistaken to conclude that just European politics is in trouble. In fact, much of the failure to come to a consensus between the capitals is the consequence of a second layer of crisis, that is, the crisis of the pragmatic politicians inside the member states.

That crisis is reflected in even lower levels of trust. If still 37 per cent of Europeans has confidence in the European Union, only 27 per cent has confidence in its national government. Turnout rates during national elections have continued to drop incessantly – from 78 per cent in 1990 to 68 per cent in 2003. The legitimacy crisis of national politics is thus as severe as the legitimacy crisis of European politics. Its main victims are thus the pragmatic parties that used to uphold the process of European integration. Examples are the Christian-democrats, liberals, and social democrats. Today, these parties hardly attracted the support 36 per cent of the voters in national elections. We are reaching a tipping point at which the pragmatic parties could lose their majority position in many member states.

By far the most important cause is the third level of uncertainty: the withering of the welfare state. European governments are no longer able to meet the needs of the majority of their people. If one divides the European population into five income quintiles from rich to poor, political trust drops by five per cent each quintile one goes down; voter turnout by four per cent. If the welfare state has rightfully been touted for creating a more equal society, the lowest two income quintiles have seen their purchasing power shrink rapidly. They have also been forced more into parts of the job market where salaries have dropped compared to the average or where there is more temporary work. These problems are now moving up to the third income quintile: the lower middle class.

The erosion of the welfare state has been precipitated by the fourth crisis: the creeping decrease of Europe’s economic power. The European Union is losing out in terms of productivity, research and development, its share in manufacturing, and so forth. In addition, its external debt has been increasing steadily. On the balance of payments, government debt has become the most successful “export product”.
Power politics

This grinding crisis will continue to weaken the European Union, the book continues to argue. This is especially so because, in the short term, nationalists and Eurosceptics are creating their own electoral breeding ground. The more they gain, the more they can blame Europe for a lack of progress. And without progress in economic governance, more misery will inevitably follow. The gap between the performance of Germany and the member states in the periphery continues tSchermafbeelding 2014-07-03 om 14.36.44o widen. Since 2009, Germany hardly imported more goods from the crisis-battered countries, countries that still struggle with employment, poverty, and financial exhaustion of governments. Such imbalanced market cannot sustain a monetary union without stronger correcting mechanisms.

Austerity without a clear prospect for growth will cause more social unrest and political resentment. Again, in the short term, conservative parties can have some success by cajoling the anxious middle classes with pleas for less government spending and less Europe, but they too will face electoral setbacks if growth does not kick in and the middle classes continued to be weakened.

Economic uncertainty leads to social havoc, social havoc breeds political distrust,… and political distrusts renders Europe more vulnerable in a world order that becomes more turbulent and competitive. Ukraine was just another wakeup call for the great challenges that loom in the long belt of uncertainty that stretches from Gibraltar all the way to the Belarus. That climate of insecurity stirs regional powers to pursue their national interests more assertively, often at the expense of Europe’s.

The crisis got Europe also in a perception cascade. It has never been taken very seriously as a political power, but since the outbreak of the crisis its future as a leading economy is questioned as well, and now even its celebrated social model is put into doubt. Europe should not count on soft power if it cannot get its hard capabilities right and those capabilities will be vital to defend its position in a new era of power politics, an era in which its position is challenged by assertive economic power politics, the exploitation of international organizations for national gains, military modernization, and the contest for new spheres like cyber, space, and the deep oceans.

Play ground

It is far from certain whether Europe will emerge as a player or a playground in the new international order. The choice, I believe, is not between more or less Europe, but between a more efficient Europe and a situation in which a weakened Europe will be challenge as much from outside as from within. Neither do I believe that an efficient Europe requires the dismantling of its welfare state. Instead, the pragmatic parties should take the initiative and develop a new social project that is more dynamic, competitive, sustainable, and… pleasant. In this new era of global turbulence, they must regain the initiative to maintain power and to redefine it, as Europe has done so many times in the previous centuries.

This is achievable. In every member state, interesting initiatives can be found. Europe just has to put the weight of its 500 million citizens underneath these creative projects and support them. I doubt that the forthcoming elections will deliver, but in the next five years, the pragmatic parties that built Europe have to get their act together and come up with new progressive visions, not necessarily for more Europe, but for a better Europe.

I plan to continue to work on Europe. One of the issues that I would like to look into is what allowed for the creation of federations in history. I also plan to write more about the geopolitical interests that bind the European countries in what promises to become a turbulent century.
Selected publications:

Fleuron
Selected keynotes and briefings:

On European security in light of Asia’s rise: The European Parliament’s Foreign Affairs Committee, the US China Economic and Security Review Commission, the Central Party School in Beijing, the Dutch Ministry of Foreign Affairs, the Polish Ministry of Foreign Affairs, the French Ecole de Guerre, the Cabinet of the British Prime Minister, the Royal British Navy, the Chiefs of European Navies of the Channel Countries, etc.

On European economic interests: The European Parliament, the European Commissioner for Trade, the President of the European Commission, the President of the European Council, the Cabinet of the German Chancellor, Capgememi, Rabobank, the Nobel Institute, etc.

In the media:

Holslag, Jonathan, 2013. Confronting China’s Industrial Champions. European Voice, 20 February 2013. (Read)
Holslag, Jonathan, 2012. China crosses the Danube. The Financial Times, 27 June 2012. (Read)
Holslag, Jonathan, 2011. False European hopes of a Chinese saviour. The Financial Times, 28 June 2012. (Read)