The Mood in Europe: Perplexity and Foreboding

June 2, 2003
Giles Merritt

BRUSSELS Is Europe beginning to recover from the chaos and confusion of the Iraq crisis? Some European Union policymakers think there is a silver lining to the clouds of Iraq: They believe it is strengthening European efforts to forge streamlined new decision-making mechanisms.

Their argument is that the EU's disarray over Iraq has driven home the need for political unity, and has thus given fresh impetus to the convention on the future of Europe, the body chaired by 77-year old former President Valéry Giscard d'Estaing of France that is trying to agree on a blueprint for reform.

In recent weeks there has been a quickening of the convention's pace, with some signs that a deal is taking shape that will make the EU a more muscular creature than before. The EU would still be a Frankenstein monster, part supranational government and part international negotiating arena, but it could yet emerge from the convention with increased stature and sharper teeth.

Others reckon the opposite is true. They say the deep divisions over the rights and wrongs of the U.S.-led invasion of Iraq are compounding the difficulties that confront the convention, whose 105 members are drawn from the 28 countries that are or will be EU members. Their line is that the convention's "EU constitution" will either fall far short of expectations and deliver a minimalist reform package, or that it will fail altogether.

The outcome of the convention is due by June 20, though in EU matters a postponement can never be ruled out. The convention's 14-month talkathon has to be wrapped up pretty soon because its proposals have still to be approved and implemented by EU governments in time for next spring's enlargement from 15 to 25 countries. The convention's mantra is that it can't be allowed to fail, as, without its streamlining, EU decision-making will grind to a halt.

In the meantime, a strange mood of perplexity and foreboding has settled on Europe. Perplexity, because the Iraq war's aftermath is a tangle of new crises whose consequences are still unclear. Foreboding, because few doubt that Europe will sooner or later pay a high price for a war that was not of its making.

The atmosphere in Brussels is particularly troubled and unfamiliar. The EU's policy vacuum on Iraq-related issues looks almost total. No one has advanced a realistic plan for repairing either the trans-Atlantic rift or the divisions between EU governments themselves. The wider concern is the prospect of an endemic Christian-Muslim conflict, for Europeans increasingly fear the "clash of civilizations," even if Americans don't.

On the economic front, European diplomats and EU officials worry that the ill-effects of the Iraq crisis are so souring relations with the United States that the Doha Round of international free trade negotiations may be torpedoed. If September's ministerial meeting in Cancun, Mexico, of the World Trade Organization does not kick-start the process back into life, the consequences could be disastrous for both Europe and America. Collapse of the Doha Round might trigger a surge of tit-for-tat protectionism and turn the recession into a worldwide slump.

Political business in Brussels normally adheres to a clear-cut pattern. The outcome may be unpredictable, but priorities and negotiating timetables are generally clear. Not so today. There is no strategy for tackling the trans-Atlantic rift. The general view in Brussels is that the ball is in America's court as Europe waits to see how Washington expresses its displeasure with those EU countries that followed the French lead and opposed the invasion of Iraq.

A foretaste of the Bush administration's pique will come in mid-June at the Paris Air Show. No American planes will be flown this year and the traditionally huge U.S. presence is being cut almost to nothing. That's a very public signal, but more worrying is the private threat that America plans to allow Iraq to repudiate much of its $350 billion foreign debt, to anti-war countries like France, Germany and Russia.

The Doha Round was in trouble before the first shots were fired in Iraq. But statesmanship is now needed by both America and Europe if it is not to become a major casualty. If it falters, the price will not just be cutbacks in the $550 billion yearly volume of trans-Atlantic trade, nor job losses among the 5 million Americans whose livelihoods depend on European investments. The cost will more probably be akin to the Great Depression of the 1930s. That, too, was triggered by trans-Atlantic frictions and trade barriers that brought whole economies to a halt.

The writer is director of Forum Europe and secretary-general of Friends of Europe.

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