Karen Donfried Puts the Year in Transatlantic Challenges into Perspective

2018 is coming to a close, but when it comes to the many issues that dominated transatlantic space this year, the story is far from over. GMF President Karen Donfried sat down with Media and Communications Specialist Sydney Simon for a firsthand assessment of where things stand in the U.S.-Europe relationship and what to expect from Europe’s geopolitical hotspots in the coming year.

An edited transcript of the conversation follows.

SS: Between Brexit, Yellow Vest protests in France, and the rise of the far right, there a lot of brewing issues across Europe that have come to a head as the year ends. What do you think is causing so much discontent and are we seeing a real test to the post-WWII international system?

KD: It is striking to end 2018 with big, unexpected developments in the three largest European countries—Britain, France, and Germany.

Take the United Kingdom. It is stunning that we are ending 2018 with no clearer sense of how Brexit moves forward than when we started the year.

When Prime Minister Theresa May invoked Article 50, she started a two-year clock ticking, and that clock stops ticking in March of 2019. And we don't know if Theresa May will succeed in the New Year in getting her plan approved by the House of Commons, but that outcome seems unlikely.

A second possibility is that there won’t be a deal and the UK crashes out of the EU, the so-called hard Brexit. Nobody wants that outcome—but it doesn't mean it won't happen.

Increasingly you hear people talk of a third option—that a second referendum could be held. We simply don't know how this story will end.

What we do know is that the discontent that led to the Brexit outcome in the 2016 referendum is not dissimilar to the upset we see in France and in other parts of Europe or, for that matter, in the United States. We have large swaths of citizens in the transatlantic space who feel they've not been well served by their system of governance and who feel they've been the losers of globalization. A toxic brew of anger and resentment has resulted from those citizens who have experienced economic inequality and who have a sense that their cultural identity is being frittered away by migration. These governments are under enormous pressure to manage these challenges in a way their citizens feel they have failed to do to date. I think you see that underneath the protests of the yellow vests in France and more generally in the spread of nationalist populism across the European continent.

These issues are going to endure in the new year. And it will be a real challenge for policymakers to come to terms with them.

SS: Is there a transatlantic approach to any of these challenges?

KD: My sense is there is not a trans-Atlantic solution to these problems because national differences matter. I think we can see broad similarities across these countries due to the global trends we’re all experiencing, but we shouldn't paint them all with the same brush. It’s up to national governments to unpack what's happening in their particular countries and then try to address those specific issues.

SS: Given the very different security concerns and perceptions of America across Europe, how does the U.S. navigate these relationships and attempt to preserve stability?

KD: To understand the current state of transatlantic relations, we have to acknowledge that President Trump feels a deep sense of grievance toward Europe. He believes that our European allies have taken advantage of the United States, and points to the fact that Europeans do not spend enough on their defense and thereby free ride on the U.S. On trade, he feels that countries, which run a large trade surplus with the United States, are robbing our “piggybank.” The President has talked about how the European Union is as bad as China, only smaller. These are very real resentments on his part, whether supported by the underlying facts or not, and this marks the reality of the relationship today.

Traditionally, there has been a shared sense that the project of European integration was in the interest of the United States.  The consensus view was that it took the role of the United States as offshore balancer to help Europeans overcome their divisions. But there is a concern today, particularly in Europe, that the U.S. is now seeking to exacerbate these divisions in order to strike better deals. Thus, the U.S. has become yet another issue dividing Europeans from each other.

The question I am interested in is whether it is possible for European countries to have a shared approach to the U.S. given this context. Or do the different security situations that European countries find themselves in necessarily mean there won't be a unified response?

The Polish case is an illustrative one. The Poles say: we have an aggressive neighbor to our east called Russia and we feel dependent on the U.S. security guarantee to prevent that big neighbor that doesn't share our interests from trying to assert its authority over us. And we’ve seen the Polish president visit the White House and say the Poles are willing to put two billion dollars on the table for a permanent U.S. troop presence in Poland.

We have to appreciate that where you sit geographically, economically, politically, and historically is going to affect how you see the importance and centrality of the relationship with the United States to your country.

SS: Angela Merkel surprised many when she announced that she would not seek another term as the chair of the CDU party. With her choice of successor recently winning the nomination, what can we expect from Germany’s leadership role on the continent in the coming year?

KD: Germany is the country everyone has looked to recently for stability because of the role played by Angela Merkel who is now in her fourth term as chancellor. She deliberated long and hard about whether to run for this fourth term. She understood that she carried a lot of baggage from the decision she made in 2015 during the refugee and migrant crisis, and she understood how deeply unpopular that decision was in many parts of Germany.

But she still had a surprise up her sleeve by announcing this Fall that she was not going to run for the leadership of her party, the Christian Democratic Union (CDU). That was fascinating because Merkel has always said to govern Germany effectively you need to both be Chancellor and party leader. She is thus letting go of one of those reins of power, and it's a very clear signal to everybody that she is starting the process of political transition. The election of her handpicked successor, Annegret Kramp-Karrenbauer (AKK), as party leader was no doubt a sweet note for Merkel to end what has been a very hard year on.

What does AKK’s success mean? It probably means that at least for a year and possibly until 2021 when the next election is due, Merkel will remain as Chancellor, though we could see an earlier transition for any number of reasons. It also means that AKK, who clearly does want to succeed Merkel as chancellor, will have some time to cement her own popularity in Germany and build her reputation across Europe and globally. She wants to keep the CDU as that big-tent centrist party that Merkel built, despite the desire of some of her challengers for the party leadership to move the party to the right with the intent of luring back some of the voters they lost to the far-right AfD.

We'll have to see if the party unites behind AKK over the coming year or if we’ll instead see battles over the CDU’s direction emerge. The CDU is a party that wants to govern and that motivation to head the government is powerful. At the end of the day, they are going to figure out collectively what they see as the best path to governing.

We should not overlook how dramatically the German political landscape is changing. Having a far-right party, for the first time in post-war German history, not only cross the five percent threshold for representation in the German parliament but become Germany's third largest party is consequential. We need to keep a close eye on how those trends develop.

SS: The transatlantic relationship has experienced some tension moments lately-- the heated rhetoric over European defense and NATO burden sharing a recent example. Do the policy debates happening between Europe and America need reframing?

KD: Yes.  The focus of the transatlantic relationship should be the strategic challenges that the United States and Europe face in the 21st century. In my mind, the headline strategic challenge is a rising China. The U.S. and Europe can and should work closely together in thinking how to manage or counter that rise. There are lots of concerns we share ranging from forced technology transfer to theft of intellectual property.

Are there issues and disputes we have within the trans-Atlantic relationship? Of course. We need to deal with those issues, and how we deal with them really matters. But let's not allow that bickering to distract us from the overarching strategic challenges where we would be best served by working cooperatively.

SS: Are there any bright spots in the transatlantic relationship as we look back at this year and ahead to 2019?

KD: Facts are stubborn things and we have 70 years of the U.S. and its European allies working very closely together. We can point to many times in those 70 years when we have disagreed about important issues. I would argue that the disagreements of the past largely had to do with specific policies. Many dealt with critical issues of war and peace, from the Suez Crisis to the Iraq War. But unlike the debates we’re seeing today, these were not questions about the underlying order or whether we still share a belief in liberal democracy, rule of law, free market economy, or rights of the individual. I do believe that these values still connect us in profound ways across the Atlantic. I also think we share vital interests.  That said, many are questioning how strong that transatlantic bond continues to be today.

What I have found really heartening about the past year is how we've developed, or begun to develop, a more holistic view of the transatlantic relationship. Of course, policy at the national level remains very important. But there are a lot of issues where states and cities play increasingly important roles.

Take climate. President Trump decided that it was in the interest of the U.S. to pull us out of the Paris climate agreement, which he had the authority to do. We see that there is a coalition of American states and cities that have since said they're going to remain true to the commitments made in the agreement. One of the largest of those states is California, whose economy ranks in the top ten in the world, and I can assure you that every car maker wants to sell cars there so California’s emissions standards matter.

Such a holistic view makes clear that we have a vibrant debate in the United States about many of these contentious issues in the transatlantic relationship.  We also see Europeans increasingly forming alliances with this more diverse set of interlocutors. I think that is a healthy development and see it as a bright spot of the past year.