Review of European & Transatlantic A¬Airs

review of European & Transatlantic A¬airs VOLUME IV ISSUE 1 SUMMER 2020 eur pean h rizons i review of European & Transatlantic A¬airs review of European & Transatlantic A¬airs VOLUME IV ISSUE 1 SUMMER 2020 ISSN 2378-2641 [PRINT] ISSN 2378-2684 [WEB] EDITOR-IN-CHIEF Sabrina Sussman CONTRIBUTING EDITORS Nina Tophoff Raluca Dorofte Philipp Rombach Patrick King Carmen Murgu DISTRUBUTION COORDINATOR Sabrina Sussman COVER DESIGN Loide Marwanga Review of European & Transatlantic Affairs is a publication of European Horizons. www.europeanhorizons.org This publication contains the collective views of an international group of students and experts and does not necessarily represent the views, decisions, or the stated policy of European Horizons and the European Union. Printed in the United States of America, with the support of the ERASMUS+ programme of the European Union. eur ii pean h rizons table of contents INTRODUCTORY REMARKS 1. 1. Letter from the Editor-in-Chief 1 Sabrina Sussman ECONOMY 2. 1. European Champions 4 A way to go? 2. 2. Do European Free Trade Agreements Work? 22 EUROPE AND MULTILATERALISM 3. 1. The Future is Pan-European 42 Saving the input legitimacy of the European Union 3. 2. How NATO Endures 56 The role of crises in alliance preservation 3. 3. Legal challenges of a potential interim appeal arbitration arrangement 74 between the EU and other WTO members SECURITY 4. 1. Exposed Outpost 88 Russian threats to Baltic security and transatlantic responses 4. 2. Geopolitical Tensions in the Eastern Mediterranean 118 CLIMATE 5. 1. Lessons on Climate Change Resilience 142 How coastal European cities have prepared for heat and water stress EUROPEAN STUDENT POLICY COMPETITION 6. 1. Responses to the Belt and Road Initiative 174 A European grand strategy 6. 2 The importance of local political activism in reducing the rise of 179 extremist parties The impact on young people and migrants 6. 3. Europe’s Response to the Belt and Road Initiative 184 Preventing China’s aggressive economic expansion iii review of European & Transatlantic A¬airs eur iv pean h rizons review of European & Transatlantic A¬airs v review of European & Transatlantic A¬airs eur vi pean h rizons 1 Introductory Remarks 1. 1. Letter from the Editor-in-Chief Sabrina Sussman Editor-in-Chief It gives me great pleasure to introduce the Summer 2020 issue of the Review of European & Transatlantic Affairs. European Horizons seeks to give young people a voice in shaping the future of Europe and transatlantic relations, incubating innovative policy ideas through our publications, conferences, and chapters. RETA provides a platform for students to connect to each other, our partner organizations, academics, and policy makers, enabling them to develop ambitious suggestions for improving the transatlantic relationship and European policy. Since the publication of our last edition, the world has changed immensely, send- ing shockwaves through the entire geopolitical order. Of greatest note, of course, is the continuing coronavirus pandemic, which has infected 20 million worldwide, killing nearly 750 thousand. This crisis is global, destroying not only our percep- tions of personal and economic security, but in many cases our faith in national and global leaders. Economies are contracting, businesses are closing, families and friends are separated by public health measures, and trust in globalization is faltering. While the pandemic is at the forefront of the issues our world faces today, other problems persist, including climate change, the rise of populism, tensions in the transatlantic relationship, and regional security concerns, which 1 review of European & Transatlantic A¬airs 1. 1. Letter from the Editor-in-Chief continue to pose existential challenges to the future of Europe. Despite these issues, it is evident that there is much hope for the future of Europe and transatlantic relations. The political engagement we have seen over the course of the last six months is astonishing, with global protests, political education, and massive community efforts, largely utilizing the Internet. The youth, especially, are beginning to carve out a foothold, demand a voice in our future, and hold policy makers to account. As Europe continues to address the issues it faces, it is clear that young people, students, and organizations like European Horizons will play an increasingly important role in shaping the policy debate across the continent, working towards a brighter, more sustainable, and more inclusive future for the European Union. This issue of RETA explores many facets of European policy, from security to the economy to multilateral relationships. It also includes the winning policy proposals from the European Student Policy Competition, held in April 2020: European Horizons’ frst-ever virtual policy competition, inspired by the necessity of virtual connection and virtual advocacy in the new world. These papers and policy proposals are the products of an incredibly diverse group of students, young profes- sionals, and scholars, from across three continents, representing just a few of our 65 chapters worldwide. Our contributors, chapters, and editorial staff have been working tirelessly through a diffcult and often stressful time to uphold European Horizons’ values and goal: giving young people a voice in the policy and the future of Europe. I hope that the papers and policy proposals contained in the Summer 2020 issue of RETA will contribute to the ongoing discussion on the issues facing the European Union and the transatlantic bond, that they will shine a light on the perspectives of young citizens working towards improving our world, and that they inspire students and policy makers alike to aim for a bright, prosperous, and inclusive future through continued advocacy and engagement. Sabrina Sussman is a senior at the Johns Hopkins University studying international studies and economics, as well as environmental science and French. She has interests in security policy, the transatlantic relationship, Sino-American relations, and Arctic policy. Sabrina serves as the Director of Publications for European Horizons, and as the Co-President of European Horizons at Johns Hopkins. She is passionate about policy research as a form of political engagement and education. eur 2 pean h rizons Sabrina Sussman 3 review of European & Transatlantic A¬airs 2 Economy 2. 1. European champions - a way to go? SUBMITTED BY Jakub Sedláček University of Cambridge OBSERVATIONS While the EU countries’ economies as a whole still contribute a signifcant amount to the global gross domestic product, a brief look on the list of world’s largest companies shows a very different picture. Only a small number of large businesses have European roots and the number is decreasing. In fact, only 5 in the top 40 largest companies in the world have European origins.1 The nature of the current situation can be very well illustrated by the following example. Almost fve decades ago, the governments of France and West Germany (later joined also by the UK and Spain) came together to establish the Airbus con- sortium to be able to successfully compete with American rivals in the aerospace industry. Last year, an attempt to repeat this success story by a merger between Siemens and Alstom, intended to create a viable competitor to Chinese competi- tors in the railway sector, was prohibited by the European Commission based on the application of EU competition rules. This has sparked backlash between European chief executives and political lead- 1 A Franco-German Manifesto for a European industrial policy ft for the 21st Century, as jointly published by the French and German governments, available at: https://www.bmwi.de/Redaktion/ DE/Downloads/F/franco-german-manifesto-for-a-european-industrial-policy.pdf?__blob=publica- tionFile&v=2, page 3. eur 4 pean h rizons Jakub Sedláček ers, with many now arguing that the current system of EU competition (and, in particular, merger control) rules needs a radical overhaul2 to restore competitive- ness of the European industries and allow for the creation of companies capable of facing the Chinese and American “national champions” - large companies capable of fully exploiting the benefts offered by economies of scale and scope.3 For the European policy makers, the question now stands as follows: “Do we need ‘national champions’ to secure steady adding of jobs, increase the total welfare of European citizens and promote innovation? Or, in other words, do the EU competition rules, as carefully crafted over the past decades, still follow and achieve their aim to ensure effective competition within the single market? Or do they render European businesses uncompetitive on the global scale, which in turn leads to the deceleration of European economic growth, decrease in the welfare of European consumers and, ultimately, intensifcation of the EU polycrisis4, as described by Jean-Claude Juncker? Don’t the rules, as they now stand, worsen the resentment of EU citizens with the EU, rather than contribute to the success of Europe? And if so, what should be done to change the situation? I. INTRODUCTION When travelling on board a high-speed train, one would seldom ask what produc- er built the machine. However, should the question be asked, the answer would, with a high degree of certainty, be the following: the train was produced and de- livered either by Alstom, a company headquartered in France, or Siemens, its Ger- man competitor. This is not surprising, given the fact that the combined market share of the two companies in the high-speed trains sector in the EU amounts to approximately 70%.5 What does this data tell us above the size of the two companies and their ability to compete? A brief look at the statistics clearly shows that although the two pro- ducers face certain competition from other companies (such as Stadler, Bombar- dier or CAF), their position on the market is very strong.

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