The International Spectator

Volume XLI, No. 1 (January - March 2006)

Editorial Note

The first issue of 2006 features a core on Italy's European policy, which includes a joint contribution by Ettore Greco, Tommaso Padoa-Schioppa and Stefano Silvestri written on the occasion of the 40th anniversary of the Istituto Affari Internazionali (IAI), followed by commentaries by Fabrizio Saccomanni, Jean Pisani-Ferry and Jacek Saryusz-Wolski, and a review article by Arcangela Lapolla. The Greco, Padoa-Schioppa, Silvestri article is based on two fundamental premises. First, the appreciation of Europe's moment of crisis generated by economic stagnation and the deadlock in constitutional reform. Second, the awareness of the central importance of the European Union for Italy's development and international role, hence Italy's interest in contributing to the re-launch of the integration project. Taken together, these premises lead the authors to draw a line between "bipartisan" policy strategies, which Italy, as a matter of national interest, should pursue with consistency and continuity, and the remaining policy areas where political competition and discord is not only natural but also desirable. The authors proceed by presenting fifteen proposals, in the economic, foreign policy and institutional realms which, in their view, should constitute the bedrock of Italy's EU policy.

The IAI article is followed by three commentaries. Fabrizio Saccomanni analyses the article through economic lenses, focusing on Italy's economic policy dilemmas. He explains how Italian doubts over its eurozone membership have severely harmed the country's interests. Internationally, they have generated concerns about the stability and duration of the EU monetary system and, domestically, have raised unfounded expectations of a devaluation, reducing the industrial sector's incentives to engage in productivity reforms. Turning to budget discipline, Saccomanni highlights Italy's interests in abiding by the Stability Pact, given the danger of an international re-evaluation of Italian spreads, the withdrawal of Asian investors and ensuing speculative moves. Finally, the author argues in favour of a larger Community budget, needed to finance the Lisbon agenda, EU policies towards its neighbourhood, as well as the European defence sector.

Jean Pisani-Ferry's commentary extends the logic of bipartisanship to the EU writ large. He argues in favour of a "Brussels consensus" emulating conceptually, albeit not substantively, the "Washington consensus". Pisani-Ferry suggests that such a consensus may be reached precisely by opening up the European debate and thus the scope for intra-European disagreement over a wide range of policy areas. In the economic realm, the author uses as benchmarks the classic pillars of efficiency, stability and equity, outlining whether and what scope there could be for an EU-wide debate and disagreement.

Jacek Saryusz-Wolski focuses his comments on the institutional sphere. His premise is that enlargement, despite widespread fears, has not complicated EU policy-making in itself. The EU's major problem lies in the disenchantment of the European public towards the Union's policy performance. In order to tackle this problem, Saryusz-Wolski adopts a pragmatic approach, arguing in favour of policy delivery. While not discounting the importance of institutions, he suggests to make the most of the EU's existing institutional capacity and to implement those aspects of the constitutional treaty that are compatible with the current legal framework.

Arcangela Lapolla's survey article on the attitudes of Italian public opinion shows that the EU continues to enjoy widespread support amongst Italians, despite a downward trend in the last three years. Not only is the EU viewed more favourably than the US; but Italians, alongside Portuguese, Spaniards and Slovaks, are amongst the most ardent EU supporters, with around 72 percent having a positive image of the Union. Yet this positive image of the Union is not matched by trust in it. In fact, less than 50 percent of the Italian public have confidence in the EU. Hence, while Italians support the European project, appreciate Italy's gains from it, and call for deeper EU involvement in a variety of policy areas, they have also become more critical of the current institutions and their performance. The major risk is thus not rising euro-scepticism, but rather growing disenchantment with the EU.

The second core in this issue is on the EU-US-NATO triangle, with articles by Robert Hunter and Simon Serfaty. Hunter points out that the war of words across the Atlantic over the Iraqi crisis has largely subsided, and that the EU and US have cooperated effectively over Afghanistan, counter-terrorism, and, to a lesser extent, over Iran's nuclear programme. He also argues that there is now greater European appreciation of Washington's prime foreign policy concerns, namely terrorism and the spread of WMDs. However, Hunter is quick to point out that serious fault-lines persist on issues such as Middle East democracy and the Israeli-Palestinian conflict. The author proposes to revitalise the transatlantic relationship focusing on three areas on the common agenda: counter-terrorism, and in particular its civilian and developmental aspects; non-proliferation in the Middle East with the goal of building a regional security system (modelled on initiatives such as the OSCE or NATO's Partnership for Peace); and crisis management, exploring further intelligence-sharing and political coordination.

Simon Serfaty also strongly supports relaunched cooperation between the EU, US and NATO. The need to do so is pressing, yet he warns that there should be no room for complacency about its prospects. Europe is "challenged" by its multiple crises, ranging from economic stagnation, a leadership vacuum, instability on its borders and the winding down of the Franco-German motor. These crises are all the more "challenging" to the US because of their structural rather than time-contingent nature. Europe's ills are no reason for US contempt, but rather good reason for profound US and NATO concern. In fact, Europeans and Americans have common goals and interdependent means. As Serfaty puts it: "a power without peers cannot remain long without allies". In order to meet shared transatlantic challenges, Serfaty proposes greater transparency in EU and NATO decision-making, improved EU-US coordination, and an increased effort to pinpoint areas of joint EU-NATO action.

Moving from transatlantic ties to the Middle East, Fred Lawson tackles the question of political reform in Kuwait. Kuwait's succession crisis following the death of Emir Jabir al-Ahmad al Sabah provided an opportunity to strengthen the role of the legislative branch, that is, the National Assembly (Majlis al-Ummah). During the succession crisis, the Majlis played a critical role, blocking the nomination of Saikh Sa'ad as emir. By doing so, it upgraded its role and status, a development which was much acclaimed by liberal reformers in the region and by the foreign press. However, Lawson argues that this does not automatically mean greater scope for liberal democracy. Following the 2003 elections, the Popular Islamic Gathering has become the largest bloc in the Majlis. The Gathering has increased its influence further by ably joining forces with independent members representing tribal constituencies. The rise of the Islamists has been viewed by rulers as a welcome counterbalance to radicals and liberals. Alongside the rise of the Islamic Gathering, central government institutions have also acquired more power, playing a greater role in controlling economic and social affairs. In other words, while political change is undoubtedly underway, it is taking the form of a shift of power from the ruling families to the Islamists and government officials. According to the author, Kuwait's trends are unlikely to be repeated in Bahrain, yet they may represent a precedent for other Gulf states.

Mario Zucconi also tackles the question of domestic change and the role of (formerly) Islamic parties, by focussing on Turkey. He analyses the profound domestic change in Turkey in recent years, which has allowed the country to strengthen its democracy, attain macroeconomic stability and attract foreign investment. This in turn has allowed it to advance its EU accession process. On the other hand, the EU external factor has been a key determinant in Turkey's domestic reforms. The author then points out a paradox. Important segments within the EU have expressed their scepticism towards Turkey's accession on the basis of its culture and religion. Yet the coming to power of a formerly Islamic party has been precisely the main internal cause of the democratic reforms long advocated by Brussels. Hence, Zucconi concludes, growing Turco-scepticism in Europe could severely slow down the process of progressive domestic change in Turkey by disempowering domestic reformers - a development which cannot but harm EU interests.

Finally, Paolo Guerrieri focuses on international trade. Guerrieri points out that unemployment in the West and competitiveness from the East (China in particular) have fuelled protectionist instincts in Europe and North America. In addition, as the Doha Round of negotiations is demonstrating, the WTO's institutional functioning has not rendered the organisation an effective promotor of trade liberalisation in recent years. The by-product of protectionism has also been a growing trend towards bilateral or regional agreements which, if not set within a wider multilateral framework, could cause further trade distortions. Based on this analysis, Guerrieri turns to future scenarios including the failure to conclude the Round on time, the conclusion of negotiations in 2006 or 2007 with a strong set of results, or a third, more likely scenario, the conclusion of the Round but with only modest steps forward.