 Good evening. Welcome. I'm delighted to see so many of you here. I'm Eva Paus, I'm the director of the McCulloch Center for Global Initiatives and a professor of economics here. Before I introduce tonight's speaker, a few thanks I do. First and foremost, I would like to thank Carol Hoffman Collins, class of 63, whose endowment has made the global scholar in residence possible, which always is a fantastic event. I would like to thank my colleagues at the McCulloch Center, especially Jenny Medina, my faculty colleagues, many of whom have invited our global scholar into their classes or for other events. The McCulloch Center works with faculty, students, staff to promote international education across campus through all kinds of different venues. And one of our signatures signature initiatives is that we host a global scholar in residence every fall for one week because they're too busy to stay here for longer. They are always an expert, a scholar practitioner, if you want to. Every year it's a different focus and we embed them in the life of the college in various ways for a week. And when the stars align as they did this year, then the global scholar is also here for Mountain Day and was up on the mountain along with everybody else. Our global scholar this year is Dr. Daniela Schratze, an internationally recognized political analyst of European Union affairs, international relations, global relations and especially relations between the EU and the United States. The focus of her residency is the disintegrating global order and the future of the European project, question mark. Dr. Schratze is the Executive Director of the German Council on Foreign Relations or for those of you who speak English in the audience, the Gesellschaft für Wissenschaft und Politik. She has a very, very long resume. I will only highlight a few elements. She was the Executive Team Member and Senior Research Director at the Marshall Fund of the United States in Berlin. She was the head of the division of EU integration at the German Institute for International and Security Affairs in Berlin. She advised the Polish and French governments during the EU Council presidency and in a seemingly different life she was, she worked for the Financial Times and was the opinion page editor and the France correspondent. She has taught at universities around the world. She was at Harvard for a year as a fellow. She holds a PhD in economics from the Free University in Berlin and for the economists or economically curious in the audience. Her dissertation was on fiscal policy coordination in the Euro area, which is probably more important now than ever. But the topic tonight is the New World Disorder, also incredibly timely topic as we are bombarded every day with news about the disintegration of the global order. So please join me in welcoming our guest, Dr. Daniela Schwarze. Good evening. Thank you, Eva, for this very warm welcome tonight, but most of all this very warm welcome that I've been enjoying throughout the week. I very much enjoy being here and Mountain Day was a special treat, though I, and this was completely unexpected to me. I didn't even know such things existed. And I think it's a super tradition, but I was very sorry to miss one class with Stephen Jones, which was supposed to deal with the Belt and Road Initiative and I will make sure I'll include this topic tonight because it is of key importance. So thank you for having me. Now you have already set the scene by giving the topic of my talk tonight. It is the New World Disorder and I will speak about world order, but I will also speak about European order because I do believe that on the one hand what European states have built among each other is an outstanding example of trying to organize interstate relationships in a supranational way, integrating as much as they can of their national sovereignty to be more effective in policy making internally and in the world, but it's also one of the constructs of the post-World War II order that is really under tremendous pressure, unfortunately. So I'll speak roughly 30 to a maximum of 40 minutes and then I'm really looking forward to your questions and comments. I'll start out by sharing my analysis of the current situation, where the world order is. I will share some thoughts on how we could get there, quite unexpectedly. If we had met here five years ago, I think we would have had very different analysis of where world order is and we wouldn't have been able to forecast where we are tonight. And then I would like to turn towards Europe and give you both a European perspective on what is happening in the world and I will indeed speak about the way the US is perceived from a European perspective and I will speak about the challenges but also the success that the EU has in dealing with its internal problems and trying to shape up itself to take a more active role on the world scene because we very much feel we have to. Now, the topic that I've been given for tonight is by far not only an academic one. It is one that is of utmost political importance and in my job I do research but I also spend a lot of time advising policymakers and listening to them and what they think is the right strategy to deal with certain challenges and then engage in discussions. And the question of world order is really one that I would say apart from transatlantic relations and Trump is probably the topic that pops up most as on the top list of worries of international policymakers. Now if I had to characterize the mood out there in Europe, it is a feeling that one order is coming to an end. So tectonic shifts are underway. We know things are profoundly changing but we have no idea what will be next. And that's not a very comfortable situation as I suppose you will immediately be able to share. Now the world thus has become a more scary, a more volatile and a more incalculable place. And if I had to give a little more substance to that sort of headline, I would like to make four points. One is international institutions are losing their credibility. So rules and alliances that were set up to promote and enable international cooperation to solve conflicts, to bring stability, are losing impact. Secondly, we are asking ourselves actually old questions of what norms and values should be guiding international relations. I would say still five to ten years back, there was a pretty broad consensus that international politics would encourage the spreading of democracy, of human rights, basically liberal values. And now we are discussing the rise of authoritarianism and illiberalism. So that's the new trend. So it seems to be a pretty much a turnaround in trends. Now some say that's precisely the reason why the international liberal order that we have all thrived within since the Second World War is actually breaking down. And the third point is that relations between countries are turning or have returned to a basically an era of realism. Now from a European perspective, we had to redefine relationships with countries we a few years ago considered as very close partners. And I can go through the line of countries that now are seen as challenges, competitors or even enemies. Take for instance, Russia. At some point, Germany and with the European Union was developing a partnership for development with Russia. We were assuming that Russia would actually be an economic partner of the European Union, was opening up, would probably transform in some way or another, and would have no problem with the EU developing an Eastern neighborhood policy, which was designed to promote transformation and democratization and integration into the EU as a far and goal. Now this is obviously totally changed. The Eastern neighborhood of the European Union is today an area where there is systemic competition, where Russian ideas of order clash with European ideas of order, where offers that the European Union is making are seen as hostile acts by Russia that says it's an undue way of gaining influence in a region which should be under Russian control. The US has obviously played a very, very important role over the past decades in stabilizing that region and helping transformation and supporting, for instance, civil society organizations in opening relationships with a number of countries there. And the question, of course, for Europeans is what do we do in the setup if the US eventually decides this is no longer priority and withdraws? The second country that we tended to think of as a partner from the European perspective and now see much more critically is China. Obviously, there was no moment where we didn't assume there was some kind of systemic competition between China and the West. There was never an illusion there. But the way China has defined its own strategy, the China 2025 strategy, which is a very strategic approach to build power in all dimensions, economic, financial terms of security and defense, and politically. The EU now looks at China as at best a competitor or at worst an intruder that seeks strategic influence not only in the EU's neighborhood but within the EU. And last on my list, and this is only a selection of countries, but it's just to illustrate how the relationships between powers have really rapidly changed and the perception of others have changed. The third country on my list is unfortunately the United States. A key important partner for Europe and still today, despite all the rhetoric across the Atlantic, in economic terms and in terms of security and defense, of course, our closest ally still within NATO. And yet, the US administration at this point in Europe is seen as a risk factor, as a source of uncertainty, as a challenger to the international system that the US has built. So the fourth point I would like to make to describe what we are seeing in this transforming order is, in my view, a new way of thinking political security and economic strategies as one. The term that is mostly used to describe this is geo-economics. So the use of instruments, political instruments to further economic goals, and the other way around, the use of economic instruments to further political goals, and the willingness to blend all this into a strategy that puts pressure on countries that were previously considered as partners. I'm pointing this out because it's very much the perception of Europeans when they look at how Trump is approaching the EU or single EU member states, if you take Germany, where there is a very, well, a strong alertness, I would say, of several requests that come from DC, and they encompass various issues. There's obviously the issue of trade balances, the issue of trade relationships, but then also of security guarantees, defense spending, burden sharing, energy provision, our relationship with Russia. And what I see as new is the way this is all blended into, whenever the moment comes, into one approach. Several of those issues are usually combined to put pressure on the government to move on certain issues. And that is something that is, of course, uncomfortable if you are the recipient of that kind of policy approach, but it's also very tricky to tackle because you feel that you're being played with in various areas, and it's very hard to deal with that if you're not ready to use the same kind of strategy. My last point, and that adds to this strong uncertainty that is out there, is that today security threats beyond the rather traditional perceptions of security order and security threats that come out of states that they have evolved, and that they will possibly and very probably actually take more frightening shapes and forms in the future. So the emergence of the concept of hybrid warfare, I can come to that later if we have time in the question phase, new ways of cyber warfare, the whole understanding that technology will revolutionize weapon systems and strategic approaches to securing defense because simply time lags are completely changing and you don't have the usual reactivity time to defend yourself. So there's a fundamental evolution or revolution happening in the field of security. I haven't even spoken about terrorism and other ways of transnational threats. Now, that in my view describes the challenges we are facing when it comes to world disorder, unfortunately. Now, how did we get here? I'll make a few points to basically describe what I see as the major drivers of this evolution. Technology is one, I won't go into further detail, but I believe this is one of the key drivers of the future that has already changed the situation tremendously. My second point is the power shifts that are underway. And this is nothing new, but I would say the West has spent too much time ignoring it. Scholars of international relations have, as you know from the literature, been discussing the phenomenon of rising powers, the bricks of power shifts towards Asia since the 1990s. This concerns economic power, financial power, demographic weight, military power, now most importantly, I would say technological leadership, innovative capacity, and also strategic capacity. Now, policymakers in the West only are waking up at this point. And why is that such a problem? First of all, in order to catch up, we will need a lot of hard thinking and investment to be able to compete. But I think when it comes to the question of global order, we actually missed the moment of reforming the structures of global order that were built without giving those actors that are emerging enough say and enough ownership in the institutions, in the rules, in the policies that are devised. Now, one example is the lack of reform of the Bretton Woods institutions. This has been discussed for a very, very long time. But we missed the chance to include emerging countries in a way that they feel better represented. And as a result, alternative structures are being built. Is that a problem? I would say partially yes, because there's competition. There's competition over the question of, for instance, as a lender, as the World Bank is, or as the IMF is, if you have competing organizations that are willing to put out money to organizations or states that would normally go to one of the Bretton Woods institutions, and that organization doesn't impose the same kind of conditionality, you can still think that your good governance criteria or your criteria for fighting corruption, rule of law and so on are the best, but you lose traction with what you have on offer. I have already briefly spoken about security threats, but let me just make the point here why this is so relevant for global order. It's again missing the window of opportunity to realize early enough that as the nature of threat is changing, we miss the moment early enough to find regulatory responses to the fundamental developments that are underway. Take, for instance, cyberspace, a huge topic for the EU, for the US, for transatlantic relations, and it would be superb had we started early on to devise a set of common rules and regulations, because right now we see China coming into this area at a huge pace, which we as Europeans, and I would guess also as Americans, are not able to keep up with and we simply lose time on setting rules and constructing a new order that is able to govern this specific policy field. And we will see that at some point we risk being rule takers instead of engaging with relevant actors to devise those rules together. Now, I think my last and most important point why we are so concerned about the topic of global order and its future is really the role of the United States. And that you have probably all studied, but the United States played a tremendously important role in building the global order that we have all thrived in and used to be the guarantor of the system. Obviously Europeans like that role and we can be criticised for not taking enough of the burden and I'm happy to discuss that. But we are helpless in some way to see that the main actor who built that order and who was actually in our view always very self interested in doing that while it was good for us, it was obviously not against the US interest. The US is challenging precisely that order. Now how is this happening and in which ways is it playing out and why is that relevant? As I said in my first few remarks, institutions are questioned, undermined and even maybe abolished at some point. And the US as such a big player and such a relevant player of course has a huge potential to destroy structures. I'll just give a few examples that worry most from the European perspective. An early one was the withdrawal from the Paris climate deal. That is the bad news, the good news is that some actors in the US stepped up to say we stick to the goals. Like large corporates, a number of CEOs came forward and said we will respect what was agreed anyway because we think it's right. Large cities in the US did the same and Europeans see that with a lot of interest and engage very quickly and this is part of the new thinking about transatlantic relations. Whom but DC can we work with and where can we actually achieve results by engaging on specific policy areas. The second topic that comes up is the Iran deal. Huge worry of course as well because not only is from a European perspective the decision to withdraw from the deal a bad policy decision because in the European perspective it increases the chances that the that Iran will have nuclear weapons. But it's also a move that puts a tremendous threat on Europeans to pursue their independent policy here. And we see the limits of what is possible with the threat of extraterritorial sanctions. So Europe actually lives through this example which was one of the big successes of EU foreign policy making of the past years and sees that it is hardly able to pursue its own independent policy towards Iran because of the costs that the US is willing to impose on Europeans. Third example which is worrisome the US attitude towards the role of the United Nations and in particular the withdrawal of the Human Rights Council and finally the questioning of the security guarantees that NATO has given to Europe. The Article 5 commitment and the questioning of the concept of collective defense. So if you take all of that may explain why there is such an intense debate in Europe what we do. And now the first thing that Europe needs to do of course is to get its own house in order because as I said in my first words also Europe structures and Europe's institutions and Europe's cohesion and convergence is under challenge. The EU has gone through profound crises over the past decade starting with the financial crisis spilling in from the US and the year 2007 and 2008 then developed into a fully fledged economic crisis turned into a sovereign debt and banking crisis and ended up as a political and social crisis for a number of member states. That has created tensions within the EU over the right policy choices over the right degree of solidarity over the instruments that needed to be used to alleviate the crisis and to hold in particular the Eurozone together. The good news of that example though is that Europe was able to reform its own structures while it was managing a crisis. So actually bits and pieces of Eurozone governance were added and it was a learning by doing so in next crisis instrument or crisis management instrument had to be found and while in an initial phase there were only ad hoc solutions without any real sort of legal base and institutional framework over the years the EU changed for instance its banking regulation and financial supervision it set up a stability mechanism that serves to help countries that encounter debt crisis or banking crisis. It has reviewed its rules for economic policy coordination. It has strengthened the political coordination mechanisms of the Eurozone and we are now discussing the next steps of even creating a Eurozone budget and pushing forward with a stronger institutionalization of policy making in the Euro area. So all this is to say that the Euro despite all the forecasts that I heard on regular visits to DC in particular didn't fail. I heard so many times when I sat on panels or in discussions the Euro will fail either next week or in two month time but it never did and that shows you not only about something about the flexibility of a system which is broadly seen as probably not very efficient but it also shows you something about the huge self-interest that the countries that are part of the Eurozone have to keep the EU together and the Eurozone as its core. Now the second crisis that I think has a lot of similarities to the Eurozone crisis is the immigration crisis. Why was this such a problem? Because it was another example of Europe being an unfinished house. So steps of integration brought progress in some areas. Here in the migration case we created we created an area where people could move freely. We pulled down borders. We created a space where people can travel, work, settle as if they were citizens of the other country because they have the status of an EU citizen but we neglected the external piece of that whole endeavour that is external border control, a common immigration system, a common asylum system, a good system to distribute immigrants across the countries and asylum seekers across the countries and all of this became very apparent when a huge inflow of refugees from Syria took place in the year 2015. And while the Eurozone crisis created tensions mostly between sort of broadly sketched north and south, the migration crisis brought tensions between east and west. And so if you look at the EU today and you ask yourself which policy is divisive for whom, it is not a pretty picture because there are lots of lines where there is disagreement over the right policy choices. The unifying element in those two crisis is really that the incomplete integration Europe had to deal with when pressure came in both cases first of all from the outside but then quickly evolved internally. It created a sense of uncertainty. People felt there is no protection. People felt that the EU doesn't deliver any more. They looked at it more as a risk than as an opportunity or as a safeguard or something that protects. And here there's a very interesting parallel if you look at the way this has been used politically by anti-EU movements, by anti-EU parties, by far right and also some far left populists. There's a very strong similarity to the debate that other countries that are not part of the EU experience when it's all about globalization and the fear of a loss of control of national identity, of the ability to protect national self-interests. Now in the European Union this debate takes a particular form because we suddenly have a new debate on what sovereignty is and how we can some argue how or want to know how we can get it back. In my view the argument should be or the question should be how can we regain sovereignty on the EU level. Because this incomplete integration has led to a situation where indeed we have lost control, but do we really want to repatriate all the achievements and try as small single nation states try to build our happiness in the world which I described earlier on? Or do we want to actually make the EU stronger and give up formal sovereignty in some areas where we actually know we can't do anything ourselves anyway, but we need to cooperate and even integrate to be able to influence our own fate together. Now this is the battle that the EU is going through at the moment. It's precisely that question. Will we complete those pieces of integration that are incomplete and hence safeguard the order we have built? Or will we give up and disintegrate? There's one case and I'm happy to discuss this in further detail. Brexit, one country deciding to leave the club. It so far is the only country that is seriously flirting with this idea, but the debate that is very present is whether there should be less Europe. And it's very interesting to see both the review that the British government conducted and one review that the Dutch government conducted a few years ago on the question of subsidiarity, which means you should solve the problem on the closest or in the lowest political level as possible. So can you basically give back competencies to a lower level either national or even regional or local? And interestingly, those two reports didn't come up with a very impressive list on where you could actually repatriate powers to a lower level and hence be closer to the citizen, simply because the international environment, the transnational character of threats and challenges has evolved to such a degree that it's actually of advantage to solve problems together rather than alone. And I just want to give one positive effect of the crisis that Europe went through, in particular the Eurozone. It created a sense of common destiny. I mean, first of all, there was a negative polarization between countries and a lot of prejudice, for instance, the way Germans looked at Greeks and the way Greeks looked at Germans and the other one, you know, there were lots of lots of divisions and they were played out by the tabloid press by policymakers in a very unfortunate way. So we had a degree of polarization between member states which we didn't used to have. But this is now less present and less important. But what happened at the same time was that people realized, and particularly because there is a broad understanding that this is not a homemade European crisis, but it's a crisis that came from somewhere else. It came across the Atlantic. It touched other economies as well. And we weren't really able to defend ourselves and we probably didn't have the right early warning mechanisms in place and the right crisis mitigation mechanisms in place, neither on the European nor on the global level. And so this whole idea of, in terms of economic policy making, financial supervision guaranteeing financial stability, their opinion polls would show that citizens have actually realized that these are areas where at least it should be the European level that deals with it or better the global level. And that's, I would say, one of the learnings from the crisis and it's a potential, if as a policymaker you seek to move ahead with European integration and Europe's role globally, that's where to start because citizens, at some, you know, although we speak about Euroscepticism at the moment for most of the time and we are worried about citizens voting for populist parties, far-right, far-left parties that are anti-elite, anti-system and want to destroy everything, there still is a large share of society that has the right intuition. But at the moment we indeed have a problem of political leadership on those issues. That maybe brings me to a very brief comment on who can possibly drive progress in the European Union. A lot of attention is of course always on Germany and on France. And it is true that the way the EU is built, it is governments that can bring progress. There is at this point the European Commission of course and the parliament that can take initiatives, but any further step of improving the system of the EU of devising new policies of transferring competence, they will always have to be voted with unanimity by all governments and some governments have to take the leading role. Now we are very lucky to have a president in France who is extremely ambitious when it comes to Europe, but we unfortunately have a rather unstable German government which is new for the European Union. Because over the past more than 12 years Angela Merkel has governed and has basically created a situation where Germany was a reliable and very stable player in the EU. And that was helpful in the Eurozone crisis, definitely, although German policies can be criticised and I am critical of many of the decisions that were taken. However, it was an anchor of the system. And right now there is a huge concern that this anchor could be lost because we have our own domestic political problems which I won't go into detail here, but there are many, many questions as to whether Germany will still be that leader in the EU that it used to be. In any case, Germany can't lead alone, it will have to lead or can lead with France. And just to give you two figures to illustrate the weight that both have together, in terms of Eurozone GDP, they cover almost 50%, which is relevant, definitely. And in terms of defence resources, they cover 60% once the UK has left. So it is a relevant group, those two, but they definitely need to take along the others. And that's where the new leadership challenge is in Europe because in former times, and when you read the history of European integration, when Germany and France were able to agree on a certain step to improve Europe, they would be able to basically take the others along because they were coming from two sides of the political spectrum. If you take economic questions, they are very different cultures in both countries and very different understandings how the economies work and when there was German compromise that basically was able for others to agree to this. On defence, pretty much the same thing, two countries with very divergent strategic cultures, with obviously different histories, with a different ambition internationally and a different notion on what NATO and the EU context means when you think about your own security and defence. And when they agree, there is a chance that this is acceptable to other EU member states. However, I spoke earlier on about the new divisions that run through the EU east-west north-west. And those divisions pop up on various issues. And now the new leadership task is not only to find a consensus between the two, but to spend a lot and a lot of time working with governments who may share a very different perspective on the future of the EU. The challenge we are facing at the moment is that at least two countries are backsliding democracies in the EU, Poland and Hungary, are under control and supervision by the European Commission as to whether they respect rule of law, independence of judiciary, criteria that European democracies should fulfil. And they also have varying views on the role the EU should play internationally and what we stand for as an international actor. Let me conclude by bringing together what I said earlier on about global order and the evolution and the internal travise of the EU. There's a pretty broad consensus that Europe has to really work on its ability to act internationally. Europe is strong when it comes to trade because it is a competence of the EU. There's no national trade policy anymore. It is strong when it comes to monetary relationships because we have a federal actor, which is the ECB, that runs everything monetary on the international scene. But when it comes to other areas we are in the process of building structures. The big dynamic that Europe is currently undergoing is the building of a defence cooperation, which is called PESCO, Permanent Structured Corporation, where member states can work on defence projects together. And this is a direct response in my view to the changes of US foreign policy and the uncertainty about NATO. This is not being built against NATO, but the sense here is that Europe has to indeed invest more, be a more interesting and relevant partner to the United States within NATO, but also needs to make sure it has the capacity to do certain things alone. The term that is out there is strategic autonomy liked and disliked by many people because some think it's a risk to transatlantic relations because it suggests Europe wants to be independent and turns its back on the US. That is neither possible nor true. But it is a necessary step in my view for Europe to grow up in this new security environment and indeed to be a more engaging partner in the alliance which we have with NATO. Then on foreign policy there are discussions under way that the EU should introduce qualified majority voting for foreign policy because it's very hard to get a consensus of soon 27 member states. There are discussions going on how the EU can increase its weight in the context of the United Nations. Here Germany is ready to take a lead again together with France because as of next year we will be a non- permanent member of the Security Council for two years and the government has decided to push hard together with the French to better coordinate Europeans in the United Nations and give European perspectives on questions of values, on questions of norms, on questions of how you deal with conflicts, a stronger weight in the discussions in the United Nations. Maybe let me add that one point where I think a stronger Europe for transatlantic discussions and transatlantic relations is very important as well. That is the question how do we think that in this new security environment we can actually solve conflicts. I believe that a number of EU member states have very developed thoughts and instruments for conflict resolution, the civil side of common and security policy. We are, I would say, in Germany and in a number of Scandinavian states on a very different page than the US and in part also France. And in the European context this proves as a very fruitful discussion where we can possibly find very good synergies in devising new approaches to solving conflicts in our neighbourhood, stabilising regions that are basically in a very fragile situation both to the east of the EU and to the south. And my hope is really that Europe gets its act together. The big challenge is the European elections next May. But let me conclude on a halfway positive note that there is a very, very deep understanding by now that we have a lot to lose. And that is true for Europe but that is also true for the US, the West in general. But also all other actors who may be attracted by big power politics, ad hoc conflict resolutions or not resolutions or conflict escalations by trans-actionary policy approaches by a thinking that you can create a win situation and see the world as a zero sum game of only you play out the power you have in a certain situation and go around the institutional structures we have to deal with those issues. So it will be an important next I would say five to ten years to see where this all ends. But I can only say that your generation will be relevant in shaping this order just like maybe my generation is at the moment observing the changes and trying to add a little bit. But I think this is indeed a task that will occupy at least a generation to see where we end up. And when it comes to the fundamental principles of the Western liberal order and the international liberal order, I do believe that it's absolutely necessary and still right to stand up for those principles and to go into the conflict we are having which is a systemic conflict with certain players and to engage in that discussion what is the right order we actually want to have. Thank you very much.