Previewing Obama’s European Trip #3: The U.S.-EU Summit in Lisbon, November 20, 2010

On November 20, President Barack Obama will participate in the first U.S.-EU Summit since the Lisbon Treaty went into effect almost a year ago. Even though some of its dispositions have yet to produce their full effect, the treaty has started to transform the European Union, and President Obama will sense a noticeable difference from the 2009 summits. He will find less institutional confusion within the EU and a streamlined and more concrete agenda for the summit, likely focusing on—as best as can be determined at the time of writing—five points that are not only important to the transatlantic alliance, but also of particular interest to his administration.

1. The global economy, especially after the G20 summit in Seoul: how can Europe and the U.S. work together on global issues such as currencies and exchange rates.

2. Transatlantic trade, with a push to further market integration and harmonize standards and regulations to spur economies in the U.S. and Europe, in particular through the Transatlantic Economic Council (TEC).     

3. International development, where the U.S. and Europe, as the two major donors of foreign aid, are strengthening cooperation and exchanges of best practices through the EU-U.S. Dialogue on Development.

4. Homeland security, with the attempt to deepen cooperation and coordination between the EU and the U.S. in the fight against violent extremism (especially radicalization and recruitment), organized transnational crime and cybercrime.

5. Foreign policy issues in critical outside regions, especially the war in Afghanistan and the nuclear crisis with Iran.

A Transatlantic summit under good auspices

The atmospherics of this U.S.-EU summit are said to be good by most observers – especially given the events of the past year. In November 2009, President Obama chose not to attend the 20th anniversary of the fall of the Berlin Wall, an absence that Europeans took as a symbol of the President’s distanced relationship with Europe. In early 2010, his decision not to participate in the U.S.-EU summit in Spain was interpreted as a snub, even though Obama had never accepted the invitation in the first place. Hence the willingness on the American side, to reaffirm Obama’s commitment to constructive relations with Europe. The Democratic defeat in the mid-term elections only amplifies the importance for Obama of achieving foreign policy successes in Lisbon – both at the NATO summit (which takes place on November 19-20) and at the U.S.-EU summit. More importantly, Obama’s trip to Lisbon will follow the gathering of the G20 in Seoul (November 11-12), where Europe and America face common challenges from emerging countries and have an interest in closing ranks. On balance, Obama has few real allies in the new multipolar world, and he needs Europe to advance some of his priorities.

In Europe, President Obama remains a widely admired figure. With 78 percent of Europeans maintaining a favorable impression of him, Obama is vastly more popular there than in the U.S. – and more popular than EU leaders in their respective countries. (Some of his specific policies, however, like Iran and Afghanistan, lag behind.)  Overwhelming majorities of Europeans (78%) and Americans (72%) still find it desirable that the European Union exert strong leadership in world affairs, and majorities of American (54%) and EU (58%) respondents agreed that relations between the United States and the European Union are good. (All results are taken from the GMF Transatlantic Trends survey.) More importantly, the EU is starting to implement the Lisbon treaty, which will somewhat streamline its institutions and leadership, making this and future U.S.-EU summits more effective.

Obama in Lisbon “after Lisbon” and the euro crisis: a changed partner

President Obama is meeting EU leaders in Lisbon because many of them will already be attending the NATO summit taking place the day before. However, there is another key reason for the meeting to occur in Portugal rather than in Belgium, the country which currently holds the rotating EU presidency: The Lisbon treaty has virtually eliminated the foreign policy responsibility of the 6-month presidencies. As a result, European planning and preparation for the summit is now more centralized and better coordinated through the auspices of the European Council’s permanent President, Herman von Rompuy.  The “Christmas tree” phenomenon – whereby national presidencies overloaded the previous summit agendas with secondary issues and pet projects– has disappeared. A leaner and more focused summit will make it all the more palatable to President Obama, who seemed unhappy with the irrelevance of past agendas and Europe’s tendency towards navel gazing.

Obama’s other understandable complaint was about the European representatives he met – heads of big or small states whom he would never see again (because their EU presidency was only for 6 months), and EU officials with limited powers.  This time around, his real European interlocutors will be two Presidents that he will meet with repeatedly in the years to come: Hermann von Rompuy, the permanent President of the European Council; and Jose Manuel Barroso, the President of the European Commission. Of course, there will be a meeting and a photo op with the full gaggle of 27 heads of state, but the officials he will face at the table to do business with are von Rompuy and Barroso. At the time of this writing, it is not known whether the other chief European envoy – EU High Representative Catherine Ashton, in other words its foreign minister – will be present; if she does attend, Secretary of State Hillary Clinton will participate as well.   

The elevation and enhancement of the High Representative position is one of the fundamental changes that the Lisbon Treaty explicitly set out to achieve. While some functional overlaps remain and will serve as points for bureaucratic friction, Catherine Ashton has assumed command of most EU foreign policy instruments. Ashton made the launch of the European External Action Service (the EU diplomatic corps) her first objective, and on December 1 – one year after the Lisbon Treaty – it will be put in place, though it will require some more time before being fully realized. Nevertheless, it will contribute towards a more effective EU action abroad. Catherine Ashton has already cut her teeth and made a difference on a few foreign policy issues like Kosovo and Iran (in conjunction with the EU-3: France, Germany, UK). This engagement is certainly good news for American diplomacy, and all the more so that Ashton has already established a good working relationship with U.S. Secretary of State Hillary Clinton.

But having a stronger and more democratic transatlantic partner comes with difficulties, too. One other palpable effect of the Lisbon Treaty is to make the European Parliament more powerful, including on foreign policy matters. Although still not equivalent of the U.S. Congress, the European Parliament now has the authority to approve treaties. Thus, in February 2010, it flexed its new muscles in rejecting a deal previously signed between the European Council and the U.S. which provided for sharing banking data for counter-terrorism purposes through SWIFT, an international banking transfer company. The parliament acted out of concern for the lack of privacy protections and the right of redress for European citizens.  The parliament eventually forced the negotiation of a second data sharing deal that was more to its liking in ensuring data protection standards and which went into effect in August.

The other monumental factor driving the transformation – and reinforcement – of the European Union has been the financial crisis. The tidal wave which started in the U.S. in 2007–2008 soon reached Europe and revealed the depth of the problems faced by some heavily indebted member states, especially Greece. In turn, Greek economic problems and the risk of default threatened to destabilize the entire eurozone in early 2010, with some investors betting on the demise of the euro. But on May 10, European leaders took action and created a European Financial Stability Fund of 440 billion euros ($550 billion dollars) to prevent credit default by member states as large as Spain. After a Franco-German deal was struck on October 18, and then ratified by the European Council on October 29, this facility has been made permanent, becoming a sort of European IMF.  Furthermore, deficit and public debt rules for the eurozone will be made stricter, which will necessitate a change in treaties. At the end of the day, and in predictable manner, Europe emerges stronger from the crisis, having reinforced both its solidarity and its rules for good governance.

Will the U.S.-EU summit deliver?

Good atmospherics alone are not enough to ensure a successful relationship, nor even a successful summit. In general, U.S.-EU relations deliver results for both partners when each is in a position to formulate a coherent policy – that is, when European member states are united, and when U.S. domestic politics allow the president to exercise leadership.

If one looks at the agenda of the summit, Iran’s nuclear program is certainly a good example of where both conditions are met. Europeans have stuck together on this issue, in spite of divergent interests and opinions. They have insisted that the U.N. process be allowed to follow its course, and once U.N. Security Council Resolution 1929 was adopted, they added their own sanctions on Tehran, as did the U.S. The Western Balkans would be another example where such unity that makes a strong Transatlantic partnership possible: in spite of disagreement among member states on Kosovo’s independence, the EU and the US cooperated effectively on that issue and on Bosnia. Afghanistan, on the other hand, is a more ambiguous case. Europeans are by far the largest non-American contributors of civilian and military aid, and their support has increased in the recent years. But European unity is by default, largely due to the fact that they want to leave as soon as politically feasible vis-à-vis the U.S. And Barack Obama has been sending mixed messages about U.S. determination by announcing a beginning of the withdrawal of troops in the summer of 2011.

When Europe is united but the U.S. is not in a position to lead, the Transatlantic relationship also suffers. The salient example here is climate change. In spite of the hopes generated by the election of Barack Obama, the U.S. Congress passed a cap-and-trade bill in the House but failed to adopt it in the Senate, much to the disappointment of Europeans. In Copenhagen almost a year ago, they saw American leadership used to create a coalition of the reluctant (with China, in particular) which killed any ambitions to mandate a global reduction in emissions. More generally, given the resounding Republican victories in recent mid-term elections, it is likely that Barack Obama will face difficulties in moving ahead on the international initiatives that Europeans favor the most. With leaders like Congresswoman Ileana Ros-Lehtinen (R-FL), who is now in charge of the powerful House Committee on Foreign Affairs, we should expect clashes on a range of foreign policy issues like the Middle East peace process, the “reset” policy with Russia (especially if the New START treaty is not ratified before January, as is expected), support for multilateralism and the U.N. and, of course, climate change. This will make the Transatlantic relationship more difficult.

But beyond the problems of incoherent and ineffectual policy-making dynamics on both sides, simple and manifest disagreements between the U.S. and Europe also exist, some of which might emerge during the Lisbon summit. Europeans, for example, are unhappy about the U.S. Federal Reserve’s attempt to lift the U.S. economy through massive quantitative easing, which will artificially drive the euro up and threaten financial stability worldwide (see Carlo Bastasin’s paper on the economic aspects of the Transatlantic relationship). There are also enduring tensions on data protection, whether banking data or passenger data (on Passenger Name Records [PNR] Europe is insisting on better privacy and legal guarantees for its citizens). And if there has been little progress on trade issues, especially within the framework of the Transatlantic Economic Council, it is less due to temptations of protectionism than to long-standing cultural preferences (such as on genetically modified foods, bleaching chickens, etc.).

All of this explains why the Lisbon summit of November 19-20 will be both a success and, with a larger perspective, a relative disappointment. In spite of several favorable factors, points of contention between the U.S. and Europe remain, making a more ambitious agenda still out of reach. This more ambitious agenda is necessary, however, if the Transatlantic partners want to strengthen their hand in the multipolar world and assume a greater role in setting the global agenda – and global norms.