Power for Progress: Why the EU Needs a New EU Global Strategy

CSDS POLICY BRIEF • 22/2024

By Giovanni Grevi

22.7.2024

Key issues

• The rise of far-right nationalism and political polarisation reflect and feed a crisis of confidence in European integration, but an introspective mindset invites decline.
• In a regressive world of power politics, the EU should assert its role as a power for progress, pivoting from a reactive to a proactive posture and crafting a new EU Global Strategy.
• Defending Europe, taking a comprehensive approach to economic statecraft and shaping global green and digital partnerships are among the priorities that the new Strategy should articulate and foster.

 

Introduction

The results of the European ballot and of the elections in France point to the rise of far-right nationalism and to political polarisation in various member states of the European Union (EU). This trend is uneven across Europe, and far-right forces are divided at the EU level. However, the cumulative impact of these votes is straining the political cohesion of the Union and draining the leadership of pivotal countries like France and Germany. These developments  question Europe’s ability to set and advance its priorities on the global stage. Europe’s international weight depends on political unity, economic strength and normative consistency, all of which are challenged by political stalemate and introspection. A paradox is haunting Europe. Far-right forces speak loud while lacking any concrete solution to empower Europe. Pro-European forces hold solutions, through Europe’s combined resources, but too often lack the determination to mobilise them via joint action. EU institutions and member states must break through this paradox and set out a far-sighted agenda for Europe in the world, all the while re-affirming the principles that lie at the foundation of European integration.

In her statement at the European Parliament on 18 July 2024, European Commission President Ursula von der Leyen called for a choice of strength, leadership and Europe. A choice to embrace change ‘by investing in a new age of prosperity and improving our quality of life’. In other words, this is time for Europe to choose progress over the tangible risk of decline. As the new leadership of the EU takes office, this CSDS Policy Brief argues that this choice should  inform a new EU Global Strategy. This is necessary not only to empower EU external action but to respond to the political trends that are eroding the domestic foundations of Europe’s role, and clout, on the international stage. Coping with external threats and systemic challenges is essential to affirm the EU’s legitimacy. It is high time for Europeans to endorse a grand strategy mindset to connect separate policy strands, agree on mutually reinforcing goals and allocate consequent resources. Our purpose here is not to spell-out the process of drafting a new EU Global Strategy. Rather we chart a way forward for a new Global Strategy based on three levels of action: bracing to withstand threats, empoweringEurope and engaging partners. Building on a strong investment in Europe’s power base, the EU’s defining message to the world should be one of partnership for progress, promoting stability, opportunity and sustainability.

Introversion feeds decline

Recent research illustrates how the propagation of far-right nationalism affects EU foreign policy. Beyond specific domains, the far-right nationalist agenda hampers EU decision-making and challenges the rationale of European integration – pooling resources and sovereignty to promote peace, prosperity, democracy, rights and the rule of law. Far-right nationalism is both the symptom and the midwife of a larger problem too, namely the rise of an introverted mindset across EU politics and society. Many Europeans feel vulnerable to various types of insecurity and fear what the future holds. These concerns do not necessarily translate into a far-right agenda but the combination of these political trends weakens confidence in Europe’s ability to deliver.

Without confidence in its joint future, a political community like the EU risks sliding back to its past. An introverted mindset is hardly a viable foundation for credible leadership in the world. Alongside material resources, cohesion and resolve are essential for the EU’s external projection, which is ultimately predicated on the success of its integration project. An introverted Europe is one that accepts decline. Reversing Europe’s crisis of confidence is imperative. This requires a new overarching approach to meet the concerns of citizens by providing opportunity, security and justice. Elaborating a comprehensive EU Global Strategy is a central part of this effort. A sovereign Europe is one that makes its own choices, features confidence and purpose on the international stage and delivers the public goods that citizens expect, while working with partners.

The context: a regressive world of power politics

Two megatrends are transforming the global strategic landscape: the rise of great power rivalry and the emergence of a regressive or lose-lose world. The systemic Sino-American rivalry is the main manifestation of the first trend, and the principal factor shaping current geopolitics and geoeconomics. Russia’s war against Ukraine, and the deepening China-Russia partnership, are exacerbating the polarisation of international affairs. Several regional powers are seeking to expand their room for manoeuvre amid great power competition. Their growing agency points to an à la carte world, but the United States (US)-China rivalry might further bi-polarise the strategic context. A scenario of fuzzy bifurcation, where narratives compete and alignments shift, while bi-polar competition increasingly affects the choices of others, seems plausible, short of major disruptions such as a war in the Indo-Pacific.

The second major trend at play is the backsliding from a world of relative progress to a world of regression. Whether considering the spread of democracy and human rights, the development and human security agenda, the number and lethality of conflicts, or the crisis of multilateralism, from trade to arms control issues, the achievements of the last three decades are being reversed. Climate change is aggravating many of these trends. Whether or not major powers will sleepwalk into conflict, they are sleepwalking towards a regressive world where zero-sum competition turns into a lose-lose game. The two megatrends are intertwined. Great power rivalry and the weaponisation of interdependence hamper cooperation. Conversely, deepening transnational challenges feed competition and conflict.

In this fragile and fragmented context, the outcome of the upcoming presidential election in the US will be highly consequential. Among other wide ranging implications, two points stand out for the EU. First, it is widely expected that a possible new Trump administration would downscale American engagement in defending Europe, and squarely prioritise the Indo-Pacific. Second, Trump has been the only president since the Second World War who has clearly de-linked US national interests from supporting the rules-based international order that the EU has a vital stake in upholding.

Power for progress

Given this background, the EU needs a new Global Strategy to assert its role as a power for progress. Leading progress strengthens both Europe’s security and global stability. The EU faces today the clear and present danger posed by Russia’s full-scale invasion of Ukraine. This war is not primarily about territory but about the return of a neo-imperial agenda that legitimises wars of conquest. The military threat is the sharp tip of a systemic challenge that carries wide ramifications for the international order.

If the challenge is systemic, then it needs a systemic response. Today, Europe’s normative foundations and experience of rules-based cooperation tend to be considered as liabilities in a fiercely competitive world of power politics. The problem, however, is not Europe’s aspiration to contribute to a rules-based order and deliver global public goods. The problems are Europe’s weakness and its internal divisions. In articulating a Global Strategy for a fragmented and contested world, the EU’s normative dimension is a very important asset, provided that it is backed up by adequate resources and by more consistency between words and deeds. Defending and empowering Europe enables a positive EU global agenda.

The EU needs the will and the means to achieve its priorities and shape the behaviour of others. In particular, it must be equipped to deter or push back rivals, when need be, through all necessary means. However, power speaks many languages, beyond coercion. Hard, soft, network and regulatory or market power are not alternative forms of power, but mutually reinforcing ones that need to be mobilised under a wider strategic perspective.

Crucially, power is defined by purpose, not by the means used to wield it. The EU’s defining purpose should be averting a regressive world and promoting progress, stability and cooperation, at the European and international levels. The consistent support of international law is an essential dimension of this stance, from Ukraine to the Indo-Pacific and the Middle East, where the EU should push for the two-state solution to the Israeli-Palestinian conflict. The overarching purpose to deliver progress offers three benefits. First, it speaks to the comparative advantages of the EU as an economic power and a multilateral entrepreneur. Second, by managing interdependence and promoting cooperation, the EU can gain political credit, and critical resources, which would reinforce its position vis-à-vis adversaries too. Third, many of the EU’s strategic goals can only be achieved through strategic partnerships, where all the parties stand to gain. This applies in particular to the green and digital transitions.

A pivot towards empowerment

Affirming Europe’s sovereignty and purpose through a new EU Global Strategy requires action at three levels: brace and withstand threats and challenges, empower Europe through joint action and engage partners to work on shared objectives. EU member states and institutions have mobilised each of these tracks, delivering some significant results. The EU has taken steps to enhance its economic security, its energy security and its resilience against cyberattacks and hybrid campaigns. The Next Generation EU instrument broke new ground, raising common debt to sustain Europe’s post-COVID economic recovery. In defence matters, the EU has sought – and struggled – to provide incentives for cooperation in defence research and development and for joint procurement, while pooling funds to support Ukraine. The Global Gateway strategy outlined an ambitious approach to connectivity partnerships.

Taking stock of these initiatives, of their shortcomings, and of major gaps such as in industrial, innovation and defence policies, offers important lessons for the future. The overarching finding is that the EU has invested much more in protecting Europe than in empowering Europe and a sustained partnership strategy. Bracing for trouble is essential, but it is not enough to deploy influence on the global stage. Europeans have spent the last 15 years in a quasi-permanent mode of crisis management. By and large, the EU’s agenda has been set by crises and shocks, or by the agendas of others, whether rivals, competitors or partners. Crafting a new Global Strategy for the EU requires pivoting from a reactive to a proactive stance. Defence policy and economic statecraft are crucial dimensions of Europe’s strategic pivot.

Defending Ukraine, defending Europe

Investing in the defence of Ukraine is investing in the defence of Europe. It is imperative that Russia does not achieve its war goals, that the war ends on terms that Kyiv is willing to endorse, and that Ukraine advances on the path towards EU accession. The EU, alongside the US and other allies, must change the strategic calculus in Moscow, making it clear that there is no pathway to victory and that time is on Ukraine’s side. This message must be backed up by a durable surge in assistance to Ukraine and the recent NATO summit in Washington delivered important steps in this direction. Whether these objectives can be achieved, however, will largely depend on the result of the presidential elections in the US. This speaks to the need for deep change, empowering Europe to take much more responsibility for its own defence. This transition will take time, but must start now.

A structured approach to achieve closer cooperation at both the EU and EU-NATO levels is required to deliver the capabilities and the operational capacity that Europe needs, and to enhance Europe’s contribution to deterrence. Trends in American politics and the shift of the US strategic focus to the Indo-Pacific entail that Europe cannot expect the US to indefinitely carry most of the burden of European defence. The potential election of Donald Trump might dramatically hasten this process. Assuming that NATO survives a possible Trump administration, it will need to become much more of a “European NATO”. Europeans must switch to a proactive stance and seize the burden that is shifting their way.

The European defence agenda has quite rapidly evolved on paper, but priorities need to be ranked and above all resourced. The political guidelines issued by President von der Leyen envisage presenting a White Paper on the Future of European Defence within the first 100 days of the new Commission’s mandate and launching flagship European defence projects. These can be important steps to accelerate the delivery of concrete results, but engaging member states will be crucial and this process, once initiated, should be connected to the definition of the EU’s overarching strategic stance.

Military spending, already rising, will need to go up. The more Europeans will work together, the more they will save on their higher defence bill. Joint planning must set the framework for the joint procurement of necessary capabilities, at scale. With a view to that, the NATO and EU planning processes must be closely coordinated. On that basis, the EU should translate shared priorities into cooperative capability development and procurement among its member states. This articulation would both advance the implementation of the European Defence Industrial Strategy and enhance the interoperability of European armies. The resulting capabilities must equip integrated European military forces, capable to operate under NATO’s new force model while relying much less on US strategic enablers, and to project Europe’s power in other regions through sizeable Common Security and Defence Policy (CSDP) operations.

The security of the Union will also depend on a comprehensive approach to deal with the full spectrum of the challenges that threaten its resilience, from military to economic, cyber and hybrid ones. The report commissioned by the European Commission from former Finnish President Sauli Niinistö on EU civil and defence preparedness should set the stage to upgrade the mechanisms by which public and private actors can concur on this goal, and deliver a Union “Preparedness Strategy”. The EU should also build on this agenda to enhance the preparedness of partners, in Europe and beyond.

From economic security to economic statecraft

The global economic order is undergoing a shift from market-driven integration to state-driven competition. The weaponisation of interdependence has sparked a global race to derisk or de-couple strategic economic sectors. While some trade and investment flows increasingly reflect geopolitical alignments, this does not amount to de-globalisation: economic interdependence is here to stay and is vital for growth. The key is to manage interdependence in a way that delivers security, prosperity and progress, in Europe and beyond.

Like all major economies, the EU has been expanding and sharpening its economic security toolkit. The 2021 Trade Review, the March 2023 outline of the derisking approach towards China, and the June 2023 European Economic Security Strategy have been milestones in this process. The Economic Security Strategy consolidates a wide range of defensive trade measures and outlines new priorities such as much closer coordination on dual-use technology exports and outbound investments in sensitive sectors. This agenda needs deepening and expanding, considering for example the vulnerabilities related to export dependencies and to the weaponisation of finance. While the Economic Security Strategy refers to promoting European competitiveness and partnering with others, however, the bulk of it concerns protecting Europe.

The EU should beware of the risk of securing an economy that is shrinking relative to that of its main competitors. That would be a recipe for a safer decline. Pursuing economic security is important, but it is only one component of a comprehensive approach to economic statecraft. The latter consists of using economic means to achieve a wider set of strategic priorities. It requires complementing economic security with a much more determined focus on strengthening Europe’s economic power base and on reaching out to partners in the process.

The priorities for Europe’s economic empowerment feature prominently in the recent report on the Single Market by Enrico Letta, in various speeches by Mario Draghi, foreshadowing his forthcoming report on European competitiveness, and in von der Leyen’s political guidelines for the new Commission. They include completing the Single Market, boosting joint investment in critical technology and industrial sectors, creating a more performing pan-European innovation ecosystem, scaling-up start-ups and focusing on transnational projects that deliver European public goods to citizens and companies, such as smart energy grids, supercomputer networks and a European cloud. Financing these efforts – including those on the defence front – will require a combination of different funding sources: a larger fiscal capacity at the EU level – including joint borrowing for shared priority goals –, a tighter match between EU and national spending and mobilising private investment. Building on joint investment in Europe’s power base, the EU should deploy a more proactive approach to global partnerships for progress.

Partnering for progress

Partnering for progress should be a central, distinctive organising principle of the EU’s global strategy. Partnerships are a key factor of resilience. Championing partnerships in a geopolitical world can give the EU a political edge too. However, the EU’s relative weight as a partner is diminishing, because the assets of others, from China to the Gulf countries, are growing. The EU needs therefore to compensate with the depth and quality of its offer, by fostering the Team Europe approach that brings together all EU institutions and member states.

Europe’s partnerships for progress should apply to two principal domains, corresponding to the priorities of the green and digital transitions. Both agendas require extensive international engagement to reduce Europe’s vulnerabilities while also meeting the needs of its partners. The transnationalisation of these transitions entails a need to boost the EU’s digital, energy and climate diplomacy, engaging all those that are willing to contribute to an international ecosystem based on shared interests, values and rules. The scope of each of these two macro-partnerships involves different rationales, from geoeconomics to development. The strategic effort consists of reconciling these goals to maximise synergies, tangible output and political impact.

In the digital field the EU has pioneered partnerships with Japan, South Korea, Singapore and Canada, advanced cooperation with the US and India through the respective trade and technology councils, and launched various projects under the Global Gateway strategy. These initiatives should be more organically connected, such as by cooperating with leading technology partners to foster digitalisation in less advanced countries, and converting these partnerships into common positions on the regulation of new technologies in multilateral fora. The EU should craft an overarching approach to make digital connectivity a major driver of development and transformation in line with EU principles and the goals of the United Nations (UN). This should encompass not just infrastructure development but also support for digital and data governance and cybersecurity, among other issues.

Partnering for progress is the key to achieve the EU’s green transition while accelerating the global green transition, delivering growth and jobs and reducing the critical dependence of Europe and others on China. Global engagement will help address the much discussed trade-off between derisking and de-carbonising, while contributing to international stability. It should be directed to establish global partnerships for green technology and for climate financing, which would work as the framework for modular but interconnected initiatives. This new level of strategy-making consists of tackling issues of economic and energy security while meeting concerns about fairness and justice to foster climate change mitigation and adaptation. A multilateral green tech partnership would enable the diversification of green supply chains, complementing those centred on China, and the expansion of the productive capacity of green technologies, to the advantage of the global community. It would also engage resource-rich countries in the processing of critical raw materials and in the manufacturing of green tech, bringing added-value to their economies and promoting sustainability.

While partnering for progress, whether on the digital, green or other axes of engagement (e.g. health) the EU should tailor its proposition to the needs of the partners in a more flexible, context-sensitive way. Mobilising additional resources for external investment, with private actors playing an essential role, will be critical to turn partnerships into outcomes. Furthermore, the EU should not frame partnerships as instrumental to outflanking the EU’s competitors: a reactive mindset. The EU’s proposition should be driven by the purpose of achieving shared objectives and the delivery of mutual benefits.

Conclusion

These thoughts on a new EU Global Strategy are far from exhaustive. Suffice here to recall the EU enlargement and reform agenda and the ongoing re-calibration of relations with China, among other priorities. However, this Policy Brief delivers a core message: political and geopolitical headwinds will feed each other and sink the EU unless Europeans set out a different course, securing Europe and empowering it as a force for progress in the continent and beyond. The gap between Europe’s potential power and its actual or “usable” power, given how political fragmentation impairs the mobilisation of the EU’s vast resources, is huge. Likewise, there is a gap between Europe’s potential influence as a shaper of progress, and the EU’s mainly reactive stance against external challenges. The next EU Global Strategy should address these two gaps, maximising the EU’s role as a security, growth and cohesion multiplier.

Of course, no strategic document can bridge political divides, or generate political will, on its own. At present, political turmoil in key member states risks reducing the EU’s strategic bandwidth. Yet, all the obstacles that make elaborating a new EU Global Strategy a daunting task, make it a necessary one too. Polarisation and introspection hinder strategic agenda-setting, but not rising up to this task would confirm Europe’s political divisions and aggravate its strategic shrinkage. Working on a common strategy will bring to the fore differences among member states but also offer the chance of tackling and, where possible, narrowing them, before they stifle joint action. Setting priorities entails the risk of not matching them, as has often been the case, but without clear objectives the EU would lack direction amidst internal and external turbulence. Unity often proves elusive among the EU’s 27 members, but the lack of a shared assessment on where Europe stands, and what it stands for, would just make consensus-building even harder.

The current political crisis in Paris and fragile coalition politics in Berlin compound the challenges facing a new EU Global Strategy. However, pro-European forces in France and Germany broadly realise that sustaining their legitimacy requires meeting citizens’ concerns, and that there is no way of doing so without a strong EU. Their recipes differ on various dossiers, but both countries are in the process of shifting their grand strategies to fit a new world where Russia threatens Europe, China asserts its interests and worldview, and the US becomes less dependable. Despite their differences, it is important not to waste this transition before either country settles on a new internal consensus, because neither will succeed without a viable EU that punches its weight in the world.

For EU institutions, setting out early in the new cycle the objective to deliver a new Global Strategy would send a strong political signal, helping focus minds and reaching out to member states. It is essential to shake the EU out of its reactive mindset and inject new confidence in the added-value of European integration. Alongside empowerment, the EU needs a new sense of purpose. Europe’s protection requires projection. Harnessing comprehensive partnerships for progress would enable the EU to help shape cooperation instead of simply accepting the logic of competition, all the while understanding power politics and dealing with the threats and challenges coming its way.

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