UNIVERSITY OF WASHINGTON THE HENRY M. JACKSON SCHOOL OF INTERNATIONAL STUDIES CHALLENGES TO EUROPEAN UNITY: OPTIONS FOR U.S. POLICYMAKERS Task Force Report March 2017 Faculty Advisors Frederick Lorenz Philip Wall Evaluator Ambassador Kyle Randolph Scott Editors and Coordinators Meagan Araki Brian Crist Lisa Kwak Hayley McCord Anna Moretti Task Force Members Annie Chang Tamara Sánchez-Escudero Justin Collins Hailey Vandeventer Haoru Deng Alison Wendler Juan Gonzalez Michelle Williams Vivian Tzehsuan Liao Caitlyn Yao Troy Lindell Aidan Young Jannah McGrath Xiran Zhao Jessica Pickering Design and Formatting Team ACKNOWLEDGEMENTS The members of the 2017 Challenges to European Unity Task Force would like to express our gratitude to the individuals and organizations that made this report possible. We are grateful to have had the opportunity to be a part of the first ever Task Force abroad. We would like to thank Sheryl Brandalik, Laura Tagliapietra, and Emma Smith of the University of Washington Rome Center for hosting and accommodating our program. We would like to extend our thanks to the many guest speakers that took the time to come to Rome and offer their expertise: Captain Matthias Altmeier Mr. Turker Ari Prof. Emeritus Jere Bachrac Admiral Alberto Cervone Justice Peter John Charleton LTC Jason Condrey Colonel Laurent Currit Turkish Ambassador Murat Salim Esenli The Embassy of the Republic of Turkey in Rome Dr. Sergey Golubok Colonel Jim Huber Lone Kjelgaard Dr. Jeff Larsen Fabrizio Luciolli Vira Ratsiborynska Colonel Peter Till In the Henry M. Jackson School, we would like to thank Dr. Wolfram Latsch for making this program happen, and travelling across the pond to provide help and mentorship. We would like to express our immense gratitude to Theresa Mudrock from the University of Washington Libraries, for aiding our many hours of research. Thank you to Melissa Iszard for challenging us and always asking the hard questions, and to Joan Lorenz, for sharing your home, knowledge and delicious cooking with us all. We would especially like to thank U.S. Ambassador to Serbia, Kyle Scott, for evaluating this report and presentation. Finally, we would like to thank Professor Rick Lorenz and Professor Philip Wall for their support and guidance throughout this process. Without their ambition, patience, and sense of humor, this project would not have been possible. EXECUTIVE SUMMARY The Transatlantic Partnership The United States and Europe have shared a long history of cooperation and mutual interests. They stand united in their commitment to the values such as liberty, democracy, and the preservation of human rights. They are aligned as world leaders, in trade, security, and politics and have formed some of the most powerful international organizations including the European Union and the North Atlantic Treaty Organization (NATO). The success of European integration and partnership with the United States serves as a successful model of cooperation in the face of shifting world orders. With complex challenges ahead, the U.S. and Europe are committed to cooperation as the most effective way forward. Rather than looking inward, the U.S. and European allies can achieve far greater results through a strong transatlantic alliance than by acting alone. Challenges Facing Europe The issues facing Europe today have created an unprecedented level of stress not seen in decades. The institutions established after WWII aimed to foster trust and European unity by reducing barriers between European countries. However, present challenges threaten this vision of a common European identity. Each country within Europe faces its own set of internal challenges. A more important issue is the overarching threat to Europe’s unity and stability. This paper analyzes the key issues that pose the greatest threats to European unity and offer recommendations as to how the United States can offset these challenges and support a more unified Europe. Growing instability and uncertainty in Europe’s future has enabled the populist movement throughout Europe. Populist parties fundamentally oppose the values of shared sovereignty and supranational institutions, and through growing support, now have the potential to enact nationalist and protectionist policies. The United Kingdom’s decision to leave the EU was the culmination of longstanding populist sentiment, done to regain national sovereignty. This single handed approach undermines the EU’s vision of a prosperous, unified Europe. Economic conditions in Europe have been difficult since the onset of the Eurozone crisis in 2009, with the spotlight pointed at Greece and now Italy. Meanwhile the region faces new challenges as China emerges as a Market Economy Status country and dominates steel and other industries. The U.S. has an opportunity to directly impact the growth in European economies and simultaneously boost its own through the continuation of negotiating a Transatlantic Trade and Investment Partnership agreement with Europe. Europe has experienced a dramatic increase in the amount of migrants attempting to cross its borders over the past few years. The current systems that Europe has to manage migration are not adequate to handle 1 the severity of the situation. This has caused tensions between EU member states with uneven responsibility sharing and inconsistent policies on economic and social integration. The United States and Europe face new and dynamic security challenges that require cooperative solutions. Hybrid threats and terrorism pose complex problems that have highlighted a need for greater coordination in intelligence sharing and nuclear capabilities. An expansionist Russian foreign policy challenges NATO, the EU, and the U.S. in terms of energy security and narratives surrounding NATO enlargement. The uncertain futures of both Turkey and Serbia could either undermine or transform the European Union. As its hopes for EU membership fade, Turkey’s strategic role as a middleman between the West and the unstable Middle East is threatened. Despite economic reform and EU membership negotiations, the region including Serbia and Kosovo remains volatile and nationalist tensions have been exacerbated with Russian support. Policy Recommendations - Affirm U.S. longstanding support for the European Union and its values of shared sovereignty and transnational interests, while maintaining positive relations to ensure Europe remains a prosperous transatlantic partner. - Continue to encourage the economic unity of the Eurozone and support efforts to revitalize European economies in ways that would strengthen the transatlantic relationship and the U.S. domestic economy. - Support existing successful migration management policies [PW1], such as the EU-Turkey agreement. Encourage improvements on those that cause disunion, mainly the Dublin Convention and social and economic policies. - Remain committed to the European security community, addressing threats facing NATO and EU allies in order to maintain a strong transatlantic relationship. - Encourage continued dialogue between the EU and candidate states as well as peaceful bilateral relations in order to further movement towards European integration. 2 TABLE OF CONTENTS Political Challenges to Europe 5 Rise of the Modern Populist Movement 5 Important Upcoming European Elections 7 Brexit: Populism in Action 10 Political Origins of Brexit 11 Negotiating an Exit Deal 12 Economic Implications of Brexit 13 Political Challenges for the UK 15 Political Challenges for the EU 16 Economic Crisis in Europe: 18 The Eurozone Crisis 19 Case Study: Greece’s Debt Crisis 23 Case Study: Italy’s Banking Crisis 28 Strengthening the Transatlantic Economy through TTIP 31 Chinese Investments in Europe 36 Europe’s Response to the Migration Crisis 41 Migrant Integration in the European Union 42 The Social Politics of Migration 42 The Economics of Migration and the Labor Market 45 EU-Turkey Agreement 50 The Common European Asylum System: Flaws and Potential Solutions 55 Transatlantic Security 60 Emergence of Hybrid Warfare 60 Information Warfare 61 Cyber Security 63 Russian Expansion 65 Impacts of Energy Security 68 Countering Terrorism 70 Intelligence Cooperation 73 Maritime Security 75 NATO Enlargement 77 NATO Defense Spending 79 Nuclear Extended Deterrence 80 The Critical Margins of Europe: 83 Turkey 83 Serbia 87 POLITICAL CHALLENGES TO EUROPE Meagan Araki, Annie Chang, Troy Lindell, Alison Wendler Today, Europe faces an uncertain future. The migration crisis, rise in terrorism, economic downturn, mounting external pressures and a responsive populist movement, have threatened the basis of European stability. The major influx of refugees into Europe has placed immense pressure on the EU’s infrastructure and capacity to integrate refugees into the European identity. Europe has experienced a growing number of terrorist attacks, leading to nationalist and xenophobic policies. Additionally, Russia’s encroachment into Eastern Europe has strained Russia and Europe’s relationship. The Euro crisis has furthered the divide between the core and peripheral EU countries, revealing the inequality between European citizens and growing stagnant employment and growth opportunities. Additionally, the complications surrounding EU accession and instability in Turkey and the Balkans present unique challenges to the dynamic of the EU. These real and perceived threats have induced fear and anxiety into the European public. As these security threats have worsened with little to no progress made, Euroscepticism