As the euro crisis wreaks havoc on the cohesion of the European Union and the global economy, Europe faces significant foreign policy challenges, including the escalating conflict in Syria and rising tensions with Iran. In a new Q&A, Jan Techau says the euro crisis demonstrates the fundamental need for cooperation and in the long run EU member states will be drawn closer together. Techau asserts that Europe needs to become a more strategic global player to protect its own interests.


What lessons can Europe learn from the euro crisis?

The fundamental lesson from the euro crisis is that Europeans will not be able to cope with their own crises or with crises around the world if they don’t stand together and act as one. The crisis has driven a deep wedge into the European Union, between the northern haves and the southern have-nots, between those who are fiscally disciplined and those who are perceived as not.

All kinds of populists have tried to cash in on these divergences but the fundamental lesson is that people are in it together—in good times and in bad. While that may sound like a given, it is a fundamental lesson because in the short run the crisis might drive Europeans away from each other. But in the long run, the crisis will most certainly drive member states closer together because there is such a fundamental need for cooperation and the last few months have been so tumultuous. 

Has the euro crisis impacted the EU's foreign policy efforts?

Jan Techau
Techau was the director of Carnegie Europe, the European center of the Carnegie Endowment for International Peace. Techau works on EU integration and foreign policy, transatlantic affairs, and German foreign and security policy.
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In the short term, the impact of the euro crisis on Europe’s ability to act abroad as a foreign policy power has been remarkably small. Europe reacted very swiftly to the Arab Spring. It has been able to react relatively swiftly on the Iran case, and it has been weak on all of the other issues that is has traditionally been weak on.

In the long run, how strongly the euro crisis affects Europe’s economic situation will play a major role in Europe’s ability to become a strategic power worldwide. Europe’s power relies on its economic strength and on its soft power model of integration, sovereignty, bargains, and whether nations give up sovereignty in order to regain some on the other hand. If the Europeans suffer from the euro crisis, if their economic wealth goes down, if their entire buying power goes down, if they become less influential around the world as a trading bloc, then this will inevitably also have an impact on how they are being perceived abroad, on their credibility, and on their sheer political power.

So in the short term, small impact; in the long run, a potentially very big one.  

How has the euro crisis impacted the U.S.-EU relationship?

In general EU-U.S. relations are fairly boring. It’s mostly a trading relationship, despite the headlines that are all about security and burden-sharing. The bulk of transatlantic relations are in trade, economic development, and financial matters. The modus operandi of these things are fairly institutionalized.

With regard to the financial crisis, despite the frequent warnings that America is drifting away from Europe, the euro crisis has actually brought America and Europe closer together. The Obama administration, banks, and the business community in the United States clearly understand that Europe must remain stable or the ramifications for America will be horrific. They need stability in Europe, and they need Europe to tackle this crisis and to manage it well in order to survive themselves.

It’s very clear that President Obama is on the phone with Germany’s Angela Merkel and President Sarkozy of France all the time, and that the U.S.-based financial institutions have a very strong stake in the euro crisis—there is a lot of coordination going on across the Atlantic. It may not be for positive reasons that they are cooperating, but they do and that’s basically a good thing.  

How effectively is Europe handling the concerns over Iran's nuclear program?

Iran is a good example of Europe acting swiftly but nobody really expecting it to. The implementation of the new round of sanctions on Iran was managed very well within Europe—everybody was on board. Europe as a trading bloc was very important in this entire construction and the business interests of specific countries that have traditionally had strong ties with Iran needed to be accommodated. But all that was done in a very effective way. Between European actions and the international sanctions regime, we are seeing a relatively impressive show of force so far.

Europeans will be less strong once the sanctions regime shows no effect and we enter a diplomatic phase that needs to be backed up by military strength. This is where EU member states will potentially be very much divided and that will be the true litmus test for European resolve on Iran. So good thus far, but potentially again there could be forces that drive the Europeans apart. We will see where that goes.  

What are the most important issues that Europe will face in the coming year?

In the next twelve months, clearly the financial crisis will preoccupy Europe. It needs to find a solution to the Greece problem, which we have heard in recent weeks is getting worse not better.

Another hot issue is transatlantic burden sharing, which will take center stage at the NATO summit in May. The question is whether Europeans can find an answer to the Gates and Panetta accusations/proposals on defense.

The third important issue that will impact Europe is elections, and possible power transitions—in Russia and France this year, and in Germany in 2013. Having this many key players in Europe in political limbo always brings a certain amount of nervousness to the political scene.

Finally, perhaps less acute, is the entire question of how Europeans get their act together on the new, emerging situation in Asia. This is not something exclusively reserved for the next twelve months, but Europeans have a concern that America is shifting away from Europe in the twenty-first century—the Asian century. Europeans haven’t quite figured out how they too can get to Asia. As the thinking goes, “the Americans are going, why aren’t we going with them?” This is one of the lingering big, intellectual, and strategic questions in the foreign policy realm. It is not going to show up in the news much but it is an underlying question that Europeans have to get a lot smarter about.  

How can Europe be a more strategic global player?

The most important thing that Europe can do to get its act together as a strategic player globally is to finally develop an urgent sense of the geopolitical situation that it is in. This is not just a popular phenomenon but also an elite phenomenon—Europeans are, by and large, unaware of the major tectonic shifts that are happening in the world. They are living in their cozy little niche; they are used to having outsourced their security and strategy concerns to the United States and to external players. But that old transatlantic bargain, that burden sharing across the Atlantic from the 1950s, is coming apart and is no longer an option.

Europeans have to become strategic players to protect their own interests and the most important precondition for this is an intellectual tectonic shift in European thinking and discussion—to embrace debates about their own interests, on means versus goals, and how they fit on long-term projections not just short-term management of problems. There is hope if Europe addresses these issues. If they don’t, then they have a huge foreign policy problem on their hands.  

How successful has the European External Action Service been in its first year?

The entire post-Lisbon set up, coming after the Lisbon Treaty, has not really kept its promise. The new External Action Service and the other institutions that were created to streamline foreign policy in Europe and make Europe more effective and less confusing as an international player have not done that. They have created more confusion and made Europe more inward looking because the debate has focused on how the institutions function, how they work, who talks to whom, who had a fallout with whom, who has the money, and who doesn’t. It is not an output oriented debate.

Having said that, a year into the External Action Service, there are signs that the service is gaining a little bit of traction. The financial crisis has absorbed a lot of capacity in the member states to deal with international affairs. Now, they are looking at Brussels and at the relatively large External Action Service, with its capacity and its brain power, to actually give them ideas as well. It’s happening under the radar, behind this financial crisis and nobody really looks at foreign policy institutions. But this is a good sign.