 Good morning. Just for those of you who are joining the second part of our conference, my name is Heather Conley. I'm senior fellow and director here at the Europe Program at CSIS. For the last several days, we have brought together an extraordinary group of Europeans and Americans. And we've taken them to beautiful colonial Williamsburg, Virginia for several days, a very focused conversation about the future of Europe and using the American historical experience and the creation of our union, our work in progress. So as we looked at the concept of having Europe become an ever closer union and the elements of that ever closer union, the economic pillar, democracy, leadership, how do you create a more perfect union? And we realize both our unions are not very perfect in many ways, but there's some enduring qualities. And so through the generosity of the Colonial Williamsburg Foundation and the College of William and Mary, CSIS joined and brought these thought leaders together. So what we're going to do for the next hour and a half is give you, I wish you could have been with us for those three extraordinary days, but we're going to give you a flavor for some of the themes, some of the conversation that we had about the future of the European Union. And as our first discussion with our journalist colleagues gave you a flavor for, the state of the European Union is a strong union, but it's been tested severely over the last five years of economic crisis. Our framework for this discussion was if you think of the European Union as a house that was under half construction of an economic union and then the crisis thrust upon it, it's been trying to build the house, weather the storm, maybe enlarge the house if we think about Ukraine and expanding European integration. But there are some real challenges before Europe. And for the United States, a strong Europe is absolutely essential, certainly before the crisis in Ukraine, now more so than ever. And sometimes there's a constant underappreciation in the United States for how Europe is evolving and transforming, but facing some severe headwinds economically, politically, and democratically. So as I said, I've been in my Williamsburg Nirvana and with our journalist colleagues, you got that sense. Now we have our foreign policy heavy hitters and thought leaders who have really looked at the expanse of transatlantic issues, European issues. And so let me just very briefly introduce my colleagues. I'm gonna let them give you some of their own reflections about the state of the European Union, perhaps reflect on the upcoming European parliament elections and what that means for the future of Europe. And then again, we will welcome you into having some questions and some dialogue as we finish. We are very delighted and honored to have Francois Heisborg with us. Francois is chairman of the Council of the Geneva Center for Security Policy and he's also chairman of the London-based International Institute for Strategic Studies. Francois has written a new book and I hope he shares a little bit about this new book that's out about a European dream that maybe is a different dream than what you originally had. And then we're going to turn to Ulrike Gerro. Ulrike is senior fellow at the Open Society Institute for Europe. She's based in Berlin, but has been a thought leader in understanding the construction of Europe. And Ulrike will provide us with her perspective and then finishing up is my dear friend and colleague and I would say mentor in this job. John Cormbloom is a CSIS senior advisor whom I rely on greatly and heavily to help me understand Europe. John is the former assistant secretary of state for European affairs, former US ambassador to Berlin to the OSCE. He is timeless and he is ageless but he has been at the, at some very critical moments in the formation of the transatlantic relationship that again I hope he will share some of those reflections. So with that, Francois over to you. Thank you very much Heather. It's really been great participating in these meetings. I feel a little bit like Boris Yeltsin when he was asked at a press conference in Istanbul when he was president, what is the situation of Russia today? And Boris Yeltsin said, well, do you want the short answer first or the long answer first? Journalist says, I guess the short answer first. Yeltsin says, situation good. What is the long answer? Long answer is not good. That's one way of introducing the topic. But there's another way of introducing the topic of the State of the Union. It also happens to take place in Istanbul and that's a speech which the Prince of Darkness, Richard Pearl gave some 12 or 13 years ago and meeting organized by Turks at Turkish Foreign Minister, et cetera. And Richard was going on about how hopeless, factless, spineless the Europeans were and that the European Union was complete wreck. There's nothing good to be said about it. And then he said, oh yes, and it is unacceptable that they will not accept you, Turkey, into their ranks. And then of course came my turn to speak and I said, well, there's a bit of a problem here. If we are really a spineless, hopeless, factless, as has been painted, it is a strange friend who would want to urge you Turks to enter that particular community. So you can't have it both ways. But the fact is, well, first of all, we've never had a strong union. We may have had a strong Europe, but we've never had a strong union. A strong union is the United States of America, the Constitution, as one of our participants, Professor Wood reminded us, the European Union looks more like the US at the time of the Articles of Confederation. That is a weak union, not a strong union. And that's not a critique, just a statement of fact. And therefore, it is not a strategic animal. This was already stated earlier on. When it does strategic stuff, it tends to do it inadvertently. And this is to a large extent what happened in the run-up through the events in the Maidan. Secondly, it doesn't have a dimos. It doesn't have a people whose primary identity is European. The primary seat of identity remains national. And here again, this is a statement of reality, not an expression of some sort of hidden wish. Thirdly, the situation, the third thing is that progress towards a closer union has not happened recently. The last time we tried to do a great big push was at the European Constitution in 2005. We had a convention, I think, and the comparison, the analogy with the US was quite deliberate at the time, had a constitutional convention to produce a constitution. Constitution was not passed. It wasn't so much the content per se because it actually wasn't terribly federal as a constitution. But the fact is that people in France and the Netherlands, two of the six founding states of the European Union, were not ready to go into constitutional mode. And that was the situation, what I've just described, describes European Union as it was 10 years ago, as it does today. But in the interval, bad things have happened. It's been further weakened. First of all, the European dream has been crowded out by the nightmare of the policies which have had to be undertaken to save the Euro project. This is what my book is about. That is considered as a real risk that these policies are rebounding, not against the Euro per se. People are actually quite happy with the Euro as an instrumentality, but against the European Union, where the trend in the opinion polls over the last, the pure opinion polls in particular, since the beginning of the crisis, all go in the same direction, in about the same proportions in every country where the poll has been taken, except in the United Kingdom, where the percentages were so low that if they went any lower, they would have struck oil. But everywhere else, it's been downwards. Secondly, we have run out of money. Notably, for defence. We'll come back to that. Thirdly, we have no growth. That's not, obviously, not good. Last six years, Eurozone aggregate 0% growth. Lost production can be counted in the hundreds of billions of Euro, if not up to a trillion Euro over that period. That is a lot of money. Relations within the European Union have become worse. We have the North-South divide. We have the cooling of the French-German couple, not to mention the cooling of significant relations between specific members of the European Union and other significant countries. The German-American relationship was talked about. Even worse, the four freedoms, which are really the European Union's DNA, the four freedoms, freedom of movement of people, freedom of movement of goods, freedom of movement of the capital, freedom of movement of services, these are being severely challenged within the Union. So all of this looks pretty bloody bad. And it looks even worse if we look at where we stood 15 years ago. Because at the time, we had the ambition of going constitutional. We were on the verge of launching the great Euro project, which was supposed to bring growth, stability and convergence, which has done exactly the opposite. We were on the verge of launching a European security and defense policy. So when you look back 15 years and say, oh, God, this is awful. But back to Richard Pearl in Istanbul. And however, the Union deserves to be defended and it deserves to not only to live on, but it deserves to progress if and when conditions are politically ready. I'm sure Ulrike, for example, will tell us about how public opinion is actually not as adverse to federal solutions as they sometimes said. But for the moment, politicians know on which side their bread is buttered. They know that if they come up with anything which looks like ever closer Union, they will be shot. And so at the current and at the oncoming European elections in month of May, there is on offer no overt federalist agenda in any political party in any European country. That is obviously bad. And yet, and yet, look back again, 15 years. The Kantian Garden, Bob Kagan's formula. And Bob Kagan was actually a lot more careful in talking about the Kantian Garden and the title of his book would suggest in his book itself. He is quite nuanced. That is a fantastic accomplishment. We have diffused the sources of conflict and enmity, not simply between the Western countries of the Union, Franco-German reconciliation and all of that, but also between the Eastern members of the Union. Think Hungary and its neighbors with significant Hungarian minorities. Think Poland. This is absolutely remarkable. And this, by the way, was not backward looking. This was not the narrative of we are awful people and we have to build our own straitjacket so that we are not going to get at each other's throats again in the future. This is actually not the way the pacification of Europe occurred during the last few decades and notably through the great wave of enlargement which made the European continent whole and free during the last 10 years, the enlargement of 2004. Secondly, the single market, it works. Whether you're a member of the Eurozone or whether you're not a member of the Eurozone, the single market works. And although I said that the four freedoms were challenged, maybe challenged, but apart from in a non-EU country which is Switzerland, the challenge has not materialized, I touch wood and hope it won't materialize in a practical political form yet. So not only is the European Union, does it deserve to live and to prosper if only if one looks back at the track record of enlargement, but it deserves to enter into step changes in the future, get back to the ever closer Union. But that's not going to happen soon. What is going to happen soon? Where do we go next? First, we're going to have the elections in May. That is very interesting. There will be plenty of shocks in the election. The National Front may become the number one party in what will be essentially a protest vote in France. Ditto with Gert de Vilder's anti-European party in the Netherlands. And UKip in the UK may well be number two anti-EU party. But although this is not going to look good, the fact is that for the first time, we're going to have a European election where people are going to vote as if it were a real election, as if they were real stakes. And that in itself is positive. The extremist parties are awful, but they will have had one virtue. And that is to actually force some sort of discussion of what Europe is about. So that's the first step. Second step, we're going to do the recasting of who does what within the European Union. Commission, high representative, foreign security affairs and so on. That casting hopefully will be good. I immediately add, if you ask me, do I think it will be good? I will say honestly, it doesn't look good for the moment. It still looks as if the next head of the commission is going to be yet another politician who having lost an election in his own country or is no longer eligible in his own country is going to serve as a retread in the commission. Doesn't look good, but we'll see. And I think there are good hopes that we may, now that we have tested and actually seen work, the office of the high representative in the external action service. And there have been real accomplishments with Kosovo and Serbia reconciling and the part taken in the Iran nuclear negotiations. If you, we probably can now actually put a high powered individual at the head of that office. And that could also bring a lot of improvement. Thirdly, we have to restore growth. That is the precondition for anything good to happen in terms of the development of the strengthening of the European Union. And to restore growth, well, what we do know is that the current policies do not restore growth. I have my own suggestions in my book, which are essentially about removing the straight jacket of the euro for those countries who suffer the most under it. Object of debate and discussion, and we discussed it a lot at Williamsburg. But whatever one may think about the future of the euro, we may have to do something in any case which will look like abenomics. You know, when people tell me, oh, Italy has a much too high debt to be able to find growth again. Well, Italy has a debt which is percentage terms of GDP 90% lower than that of Japan. Japan is 220. Italy is 135. Anybody who tells me that, therefore, Japan can grow and Italy cannot will not meet with a good reception from me. Now, maybe abenomics won't work, but it's certainly worth a try. And it certainly looks as if Mr. Renzi in Italy is thinking pretty much along those sorts of lines. So we're not going to get to the sunny uplands, to speak in Churchillian mode. We're not going to get to the sunny uplands any time soon. But there are things that we can do to pull ourselves out of the mire of the lost six years. There are things that we can do to change our fortunes. Don't count us out. But at the same time, of course, do not expect of the union to be something that it is not and will not be for a very long time. It is not and will not be a strategic animal. Member states will continue, as is the case for NATO. We all know that NATO is not a strategic animal because as we pointed out earlier on, it's the member states who decide to do something and do it under the NATO flag. European Union is pretty much the same. And don't beat up on the union because it bumbles into strategic mode without realizing what it does. It's simply not equipped to make those sorts of decisions in a deliberate manner. The critique which has been made about the Eastern partnership as being one of the causes of Putin's pushback in Ukraine six months ago, that critique is actually valid in terms of the pushback. But I don't think that one can imagine for one second that Mr. Barozo was thinking strategically when he was working on the Eastern partnership. If I'm wrong, that would mean that Barozo had an incredibly, an incredible, not only an incredible hidden agenda, but it would also mean that he would have been an entirely reckless individual baiting the Russian bear deliberately without having the means to face him. I don't think he was doing that deliberately or that he was reckless enough to bait the Russian bear without the means to deal with the Russian bear. No, this was a case where it would have made a lot more sense for the member states to have paid attention to what the institutions of the union were bumbling into at the time. So this is in conclusion one of the tricky aspects of where we are. We are sort of in the middle. We have elements of EU action. The Eastern partnership was in EU action. And yet at the same time, the major receptacle and certainly the essential vehicle in strategic terms remain the member states. And it's the combination of those two which can lead to some very tricky decision making. But once again, we may have our problems, but when we look at our achievements and they have been great, notwithstanding the crisis, I think there is still a lot of fight in the old beast. Thank you very much. Thank you, Francois. Thank you. Francois, if you are comparing yourself to Yeltsin, then I start with comparing myself probably with Jean Dark who was the woman who had voices and then hearing voices about a fully united European Union and sometimes soon and then I'm put into a male inquisition of the Catholic church who basically got a drawing in history because Jean Dark was bringing the French king to coronation and was ending the 100 years worth if I'm not mistaken. So I think I'm not telling you the story that the EU or the Eurozone in this existing situation is fine or doesn't have any flaws or problems or so. The thing is that the very interesting discussion that CSS offered us to have for three days was many American counterparts. I guess the thing is, and to give you that one, that in terms of analysis, we are all on the same analysis. We knew that the Euro was a political story. We know that it has flaws on the monetary side. We knew that the institutions are lacking behind. We knew that we didn't do what we did in all these deepening, widening exercises we had from Maastricht Treaty to Amsterdam to Nis, to Lisbon and so on and so forth. We know this. We also know that the European Euro crisis had the biggest disaster in our economies that basically everybody used the flaws in its own way, that the Germans did an export party and the South had a spending party and that we were basically dramatically lacking a European executive which could have done the same sort of shortcuts like the US government did on the banks and so on and so forth. So we know this. So in these discussions where we are always forced and I do no longer accept this framing, sort of less Europe, more Europe and then François is on the left side and I'm pretendingly on the more side. No, I'm not standing here to say you that I defend more of that same Europe. We know that this is a Europe that does not function, that doesn't fulfill basic needs of social Europe which is not able to convey the citizens' vote to what people really want, that this is a techno structure in which politics doesn't play off, in which the parliament is refrained and so on and so forth. So I'm not giving you that discourse in that respect. But what I give you is then if you look at sort of the solutions and where we actually do divide, where I divide with François, where I potentially divide a little bit, but less I think with John and with the Brits that we have who will give the lecture on the futures, the nation state and so, where I honestly do divide is not on the analysis but on what comes next. And here I am with Zizifus, which is you roll the stone, it comes down, you roll the stone, it comes down, you roll the stone, it comes down. Now it's awfully coming down that European stone, we roll it up again, probably in a different way just because history is always forward, not backwards and looking backwards as Sodom and Gomorrah and so it's not an option for me. And I tell you what, the moment the Eurozone should explode or you exit the Greeks or you exit the Italians of what I think will never happen on purpose, you will not see a European council where Merkel and Hollande and Renzi sit down and say look, this Euro was really bad and they did this and that and therefore now we close the shop, we close the banks for two weeks and then let's get national currency, it will not happen. It may happen and I'm not naive about the really disastrous situation in Europe, it may happen by default. It may happen because we do not know an unknown risk because we do not know how Ukraine will impact on our capacity to deal with it or whatever. So it may happen by default as everything in history happens by default and the moment that that should happen, what I'm not wishing for, is the moment the day after of default in which then the real question is who picks the agenda? Is then the agenda going back to national sort of scenarios or do we have then smart people out there who say, okay, shit enough, the stall is coming back and it's now there and then we hopefully have enough smart people and I'm betting we do have enough smart people there who will say look, let's do Europe again. Needs to be different, better learning co-op cannot be in the way we shaped it last time. We have a learning co-op, we know what we know to do better and now go on again. And I tell you what, we had Wolfgang München and other people on this panel where basically if you do all these scenario buildings, what you come up with is that's probably likely to happen. The moment it should explode or implode, you will probably see the Eurozone countries not giving up the Euro, most of them. You will probably hopefully have Poland joining and then the question comes down to whether you exit Greece or Italy and then you think like yes, that's a lot of work for not much because it's still expensive to exit this country so why shouldn't you give them a debt memorandum? I mean, you know, if you really do these scenario buildings you quickly come up to a situation where we will all be starting again unless we are in a situation of completely uncontrolled. So, and that's why I stand here and I'm completely aware of the fact that we're in a catch-22 and the catch-22 is that the current system cannot deliver the solutions we need. That is the catch-22 we are in because we are path-dependently only doing reforms at the margins and these reforms at the margins are either ridiculous or do not help or do not improve the situation and that is basically again the catch-22 situation we are in which is while in an Hegelian sense moving the whole system from synthesis to a new thesis would just be it and probably you need at some point some systemic breakdown which may appear but you do not work for it, it's basically coming by default. I happen to, I give you this one, I happen to print it a little, little postcard which basically most people like and on it it's written the European Republic is under construction. That's just a joke but I place this in the internet and what I get is lots of lots of European citizens which are happy to find this because it's not a blue flag which basically pushes everything down but it's just a thing of ownership and we the European people and we the European citizens which is you know Platon, Aristoteles, European race, Publica which is the public good that we do need to organize together because the real country in brackets we are living in since long is called Euroland and not France and not Germany and not the Netherlands it's Euroland on which we need to build a different kind of democracy and you may say I'm Jean Dark and I'm hearing these voices and I'm completely lunatic and it's basically what the Catholic Church did with Jean Dark but you know if you want to have it more sort of rational there is a very current opinion poll which I can send to you if you send me an email and which basically exit the Sweden and the UK which has a pretty lunatic discussion on Europe by the way, exit Sweden and the UK you get a more than 50% average of European people for either status quo or more integration or even federation even in Hungary you have 23% of people actually want the European federation of Europe in Germany you have 25 even in France it's 21 so but and then you add those who are for deep integration to those who are at least for the status quo you have a 50% average and more of most European citizens who want this so why and François is right this is not in the party programs of most parties but why is this not articulating and here there's a very simple answer which is the answer of Walter Halstein the first German commissioner the answer of Churchill the answer of the first American president who said when signing I learned this in the conference thanks you Heather when signing the NATO thing the American president Truman said I hope that this is just a preparation for European defense initiative and a truly bold Europe so all these great people like Truman Churchill Halstein who have you were always convinced there should that be that that little union and what they have in their speeches if you read the speeches is that little little thing let's abolish the nation state the nation state and I don't give you that excourse but I can do hours of teaching on this if there's one big flaw in how the European system actually works is the nation state and is the council is these overnight sessions where you have Hollande and Mercosie and whoever talking and then you have a solution and so I crashed on this solution it's a park, it's not transparent citizens cannot voice and so and so forth so there is a very tricky and I don't go into details but look at current EU politics 1.3 million citizens signed up for that water initiative which means that water should not be privatized what is the council doing? The council is sucking this in because it's not pleasing why the system, the European system functions this because probably the water and that's my fair bet because on energy is the same thing most European citizens are for sustainable energy and the whole thing but the lobby is done by Ede F. Wattenfahl and RWE the big sort of monopolist on energy policy and because these business lobbyists can so well work both the parliament and the council and the commission you end up having policies which basically are the opposite of what citizens want but citizens cannot voice because the parliamentarian structure of the European Union is crap and in essence it's still the council thus the nation states who are the biggest problem to citizens' will and to articulate citizens' will in Europe so the moment you can overcome this and that's not an easy little task I'm very sort of modest here but dismantling the year is not an easy little task neither so if I'm just choosing my sort of energy and where I place my energy I am placing my energy still in that rhetoric that says that I need to overcome the current structure of the technical structure of the European Union to give citizens a voice to build a different kind a different Europe a different Europe which is parliamentarian based which has a strong eurozone parliament I'm talking eurozone here so I build a strong executive which would merge national MPs with MEPs so the European legislative body with the national bodies I get across legitimacy and have a strong legislative that controls a strong executive within the eurozone and that I get something that I could call a European democracy which is built on Montesquieu division of power rather than having a European parliament which has no right for initiative which has no control of the budget and which needs to spend all its energy to fight against the council to get the shitty, lobby-driven decisions of the council and to wipe them over this is the mechanics of the European Union and I will spend the rest energy I have for my 20 next professional lives to get that system towards a full-fledged European democracy and this is the figure that helps me because I know that I have more than 50% of European people behind me thank you very much All right and you could understand why we were having a lot of fun in Williamsburg okay John from an American perspective put this into some perspective for us thank you Thank you Heather well I think my job here is in fact to translate all that into American English Great because there was a lot of truth in there but I'm not sure how much of it came out to you America and Europe in whatever shape either has been have been at odds with each other since the early 17th century the Europeans resented that we were formed at least the intellectuals did there's immense amount of literature about how the intellectuals said this new America can't succeed the very idea of a new world was already too much of a challenge for them and this kind of friendly back and forth has gone on for 400 years and it will continue to go on because we are of the same cultural roots as we always say but the implications of what we have done with these cultural roots are the source of this dialogue that we're in as you probably know a great percentage of Americans are actually of German origin a very high percentage and I sometimes say to my German friends America is what happens when you let Germans loose on a big continent so be careful how much you criticize this but this misunderstanding was carried on or deepened in a way after World War II because after World War II the Europeans were shall we say in a bit of a psychological low point and the Americans were at a very psychological high point and so the recipe for Europe was what else could it be the United States of Europe there's only one good form of government as we know and that's the United States so they should have been the United States of Europe and I believe that this misunderstanding which started then has carried us to this day the basic understanding is that in order to overcome the tragedies of the 20th century to become modern productive democratic etc Europe somehow had to replicate the institutions of the United States and Francois pointed that out there was even a constitutional convention here a few years ago the fact is that the institutions of the United States as we know were set up for a very specific situation over 200 years ago and they don't really have a lot of relevance either to the geographic and historical situation of Europe or the mentality of Europeans American institutions were set up to stimulate controversy and even confrontation among the branches of government they were done on purpose that way Europeans like consensus they like discussion dialogue agreement and consensus of adapting what post-war Europe became which is something extremely positive and good to this vision of a federal state sort of somehow modeled on the United States has been very difficult both of my previous speakers said not totally successful the first push towards this was Winston Churchill talked about Europe already in 1946 but then maybe not too many of you remember that the entire administration of the Marshall Plan was done on the basis of an organization called the OECC which later was the OECD whose job it was to come up with a common European economic project for the future this was an American requirement for giving the money in 1949 when Harry Truman signed the NATO treaty in the White House here he made a statement which you can read in any archive when he said I'm signing this treaty on the understanding that the United States is committing itself to European defense as a basis for the establishment of a European Union of States in other words be us and we'll defend you and so and then the misunderstanding continued, continued, continued and the result after all has been one of the most successful most democratic, most prosperous bits of international cooperation in all of history if you look at what Europe was in 1945 look what the American view of the world was in 1945 and compare it to today you can only say it's been successful success and we should all be thrilled by it the problem is that as we know history never stands still and so the mentality and the institutions which led to this success are now very much under strain United States is having a very hard time adjusting to whatever we want to call it a multipolar world or a multi-centered world whatever the world is we're just having a lot of trouble dealing with it our reaction has been to go out and find enemies and shoot them dead so they won't bother us anymore but that's not going to work and what we have done is given up the constant management together with our European friends of this continent Europe which in reality is only 25 years into its recovery from probably the worst series of wars that the continent had anybody had experienced in a long time and as they call sometimes the death experience in 1945 the idea that all this was solved with the fall of the Soviet Union is probably one of the biggest illusions which anyone ever had as we see now as Mr. Putin has warned us, showed us the putting together of the European project is going to be another half century at least and it will not work the United States plays its role and Europeans play their roles but do it on a basis of what the world is now today and not of 1945 and that is a bit our problem the previous group a couple of them said, Roger said and I think I don't know if Gideon did or not but that US European relations are at one of their low points well if you and analyze it according to 1945 you might argue that but I have three numbers which I wrote down which describe a different kind of relationship the numbers are 40,000 60,000, 90,000 those are respectively the number of French, British and German engineers and information technology specialists who work in California the Atlantic is being unified but more rapidly than any of us know at various levels the trouble is that governments aren't playing much of a role in this and when they do they tend to mess it up like in the NSA scandal and so it's very hard for everyone and I include myself very much in that group of everyone to try and get a handle on what's really happening the Articles of Confederation example is probably good because what Ulrich in particular said but Francois suggested also the requirements of the 21st century cannot be met by the structures of the European Union they can hardly be met maybe by the structures of the United States government but we are a little bit more flexible to take the Euro crisis started in 2010 this is now 2014 and to the outside observer again the Europeans would state this isn't true but to the outside observer it looks like about what has happened since 2010 is several dozen maybe several hundred meetings each which came out with a communique which said there's going to be another meeting to take another step towards a solution which has not yet been described now again the Europeans would say that's a stupid American way of looking at it but that's the way we see it it took us about six months in the fall of 2008 and the spring of 2009 to come up with a program to deal with the fall of the Lehman bank and all the unbelievable horrible consequences which came out of the the mortgage problems took us about six months and so far after that our economy has been on a generally positive upward track and I don't have the figures in my head but we're growing two and a half, three, three and a half percent something like that in Germany the press trumpets success if they make it over one percent of growth and Francois said it very clearly the consequences of what's going on the structure simply won't work anymore that's the real story and our structure of viewing what the world isn't going to work anymore either so we have a joint project here which is to overcome our backward looking views of the world I found this quote from Mr. Steinmeier who's the German Foreign Minister as you all know which illustrates what I'm talking about he wrote this in an article marking the 100th anniversary of World War I and he said many seem to find the long search for compromise at the Brussels negotiating table to be too difficult to boring and too stagnant but in this anniversary year it is vital to appreciate what a leap of civilization this method represents as what committee is a leap of civilization when large and small member states who opposed each other in countless wars on this continent today debate through long nights in a peaceful and civilized search for common solutions now this is what Mr. Steinmeier wrote to celebrate the European Union for most Americans that would be a recipe for a nap and I'm not trying to be sarcastic here this is our problem we see Europe which is based on ideas that we gave them as struggling towards a nap and they see us based on a civilization which they gave us as heading towards some kind of civilizational catastrophe that's not the best basis for dialogue and I don't believe that the president and his colleagues will take this issue on next week when he sees them but I do believe that for CSIS and for groups like all of us who are trying to understand this it's very interesting to look at it from this perspective rather from all the details of what NATO is doing because in the end we have this wonderful accomplishment which has put the world in a position of more freedom and more prosperity than anybody could ever have expected even 50 years ago and we're in danger of losing it if we don't start changing gears and looking into the future and that was the beauty of the last three days I'm going to give you a chance to think some questions there's such richness here and a wide ranging set of issues so I'm going to try to drill down and be a little more specific so John you gave us the challenge of how the United States has given up its constant management of Europe only 25 years old and thinking through Europe today after German reunification helped give me the contours of what a new management plan would look like a transatlantic management plan for Europe and I guess I would offer the reflection from the other side to Francois and Ulrichi what would be a new management plan that Europe would see as its approach to the United States we have been now in this new geostrategic moment which almost forces us to be backward looking because we can fall back into old patterns of behavior but in such a new setting which all three have articulated how do we overcome these obstacles and put ourselves in a new place in a new level of dialogue I don't know if President Obama can even scratch the surface of this but I'm hoping that there's some really big thinking happening at the State Department in the White House to think through and capture some of that so that's my question for our panelists I'll let you think now let's bring you into the conversation I'm so glad we see some hands going up so I have two right here again please identify yourself and you're going to have to speak very strongly into that microphone sometimes we have a hard time hearing you thank you I'm from Alexander Kwasniewski Foundation from Poland so I would like to ask about 25 of May but not only in Europe but also in the European Union but also in the Ukraine so should the United States and the European Union help to prepare the presidential elections in Ukraine especially in Crimea because what do you think about a situation when the presidential election will not take place in the Crimea this means that the Crimea is already lost we discussed about the anti-European powers which will take big position in the new European Parliament but we must probably agree that this is our European Union fault because from the very beginning in the European Parliament there is a big coalition so it doesn't matter if you vote for Social Democrats or Christian Democrats you have the same result of the politics the same bureaucratic language that probably only bureaucrats from Strasbourg and Brussels can understand but in my opinion this is very good that the anti-European parties will go to the European Parliament because all political parties in the European Parliament must make the normal struggle fight normal struggle in the political decision making process involving also society because it is confusing that me as a poll I have problem to go to the European Parliament to visit my members of Parliament and I don't have any problem to visit even congressmen in the United States so one side note before you hand the microphone over that was the exact question we asked during our conference about are they what are they voting for if they're voting for the same thing if the voters vote for change how do they express that change and analyze that question exactly as you posed it yes sir Konstantin is from American University in the Transatlantic Academy on the same note in the European elections don't you think that it's an imperative that for the EU to combat the EU skepticism that we see in countries such as my own country Greece and the existential crisis that the EU is suffering from that it tackles the democratic deficit don't you think that the EU needs more democratic cement to hold itself together whilst we should not underestimate the importance of the European Parliament elections this May it's still a fact that the European elections are more like 28 different elections actually based on national issues instead of European issues that predominate the campaigns accordingly is the essential that we have pan-European political campaigns and we have the president of the European Commission no matter what the difficulties of that would be to be directly elected from the European people and then thirdly how do we move on from this crisis to illustrate that centralization and federalization are the solutions to this crisis and how to resell the European projects to people like myself European EU from the ages 18 to 25 in countries like Greece suffering with almost 60% of unemployment that Europe is more of a part of the solution than a part of the problem thank you wonderful do we have a question right in the back please hello I'm with Bloomberg news I'm curious what the panelists particularly the former Assistant Secretary of State think that President Obama can get done in terms of a response to the Ukrainian the challenge of Russian Ukraine and Crimea where did the European interests and the American interests diverge and what's the path this week to shaping a cohesive response or can there really be one well why don't we take those several questions and we can just go in original order and I want to pose a question Wolfgang Wynchow was with us from your intelligence if you don't mind when we're done answering questions I'd like to turn the microphone to you and if you don't mind offering some reflections on the decision that came out this morning on banking union if I want to give you a time to surprise you if you don't mind doing that I'll introduce you formally then actually there are three questions including your own which are highly converging because you cannot answer the question about US-U relations without raising the issue of the big crisis which we have just entered into and which is a game changing crisis we will have to consider in the future Vladimir Putin's Russia as being an antagonist power I don't call this new Cold War because with the ideological component as often noted is not there but certainly Russia is determined to play by rules which are no longer those which it had been adhering to at least giving lip service to over the last two years annexation of other people's territory is now considered as kosher conduct by Russia and that is something which is at 180 degrees from the European vision and from the American vision so this is the crisis which forces us to act together and it is the crisis which will give the biggest content to our relations so how do we deal with that EU framework at several levels the first one of course is to help Ukraine and its government in Kiev to become functional economically and politically the emergency financial and economic package with the key role for the IMF but also of course for the European Union if that government after the elections on the 25th of May cannot get itself into a somewhat better order than the governments we have seen in Ukraine since independence 22 years ago it is going to become very very difficult and we may not have much time and the folks in Kiev may not have much time to get their act together given some of the indications which have been coming out from the White House of the last few minutes about worries about Russian troop movements around the east and south of Ukraine item A and that item A may include providing the Ukrainian government with the means to ensure its health defense not simply meals ready to eat as somebody said earlier this morning here in this room but we are going to have to think very hard in Europe, in the US as to how we are going to respond to the legitimate Ukrainian government legitimate request to have the way with all to defend itself B, item B US and Europe together in order to limit their vulnerability vis-à-vis Russia and that means two things one, energy you have on the table in the States the issue of are you going to export hydrocarbons or not and the Europeans have on their table are we going to stop our silliness about shutting down existing sources of production of energy nuclear energy in Germany and preventing ourselves from exploring new sources of energy like unconventional gas this I understand will be a significant element of the EU US summit this is truly of the essence if over the next two years we want to unbuild the strategic dependency of Europe on Russian gas and notably the dependency of Poland if I may say so which is the country which I think is along with Bulgaria I think the most dependent in this respect thirdly we have to build up the credibility of our capability of defense Article 5 is of the essence it would be nice to have our heads of state and government say that together and not wait for the NATO summit next May to do that because events are going to go much more quickly than that and they are as everybody knows more Russians Russian speakers in Latvia proportionate to the population than they are in the eastern Ukraine and as we all know President Putin considers that he has a droit de regard on the fate of Russian speakers outside his own borders a little bit as if France considered that it had a duty to intervene in Belgium or in Switzerland when French speakers are in trouble with their German speaking or their Dutch speaking brethren this is the new world in which we are entering on the other question about the European Parliament I am a Federalist that is I would not have minded at all if the European Constitutional Treaty in 2005 had been put to a single constituency referendum in the whole of Europe that is a test of whether you are a Federalist or not are you ready to contemplate that are you ready to contemplate the creation of European demos our countries were not ready to do that at the time they didn't I think it was a mistake but this is the test there is no European demos there is no European people that you are French people or American people at least not today and therefore you do not have bona fide political parties in the European Parliament not in the sense that you are political parties at the national level that is not unfortunately going to change any time soon and why because you have in a number of European countries youth unemployment which has exceeded 50% 50% youth unemployment in Spain more than 50% in Greece in Spain countries where you have unemployment levels which are highly above 15% 28% in Greece 25% in Spain etc now you are going to tell those people given the fantastic track record of European institutions and of our national governments since 2007 we are going to give even more power to the folks in the European institutions I have not yet met a politician who is ready to step on the soapbox and say something of that sort because of course that person would not stay on the soapbox for very long soapbox would be removed from under the feet quite quickly which is why I am an Augustinian Federalist Lord give me chastity but not straight away but in this case it's the Lord who is the problem and not Saint Augustine well I am going to concentrate only on the youth questions on democracy I think that's precisely what I said I mean I am not against the anti-European parties I can perfectly understand them if you don't have reversibility in the system and you don't have sort of structured opposition in the system and you have basically no choice then always get the same policy you can vote who you want but you can't change the policy which is what we did in Greece which is basically we were preventing a referendum then the only choice you have if you are not happy you go anti-system opposition and that's what Marine Le Pen does this is what Syriza does and so on so yes but what does it tell us and here we need to be careful it does not necessarily mean and then you go back to polling that people are anti-European nor are they in average anti-Europe but what they do want is opposition and reversibility within the system and that comes precisely back to what I said which is a parliamentarian full-fledged structure legislative controlling legislative body which is Montesquieu division of power and not a nasty and transparent or park council driven not only by national interest but even worth by lobby interest of national countries and this is what gets European Union really wrong so now you go down the I of D is basically in a state of dismantlement because they are hijacked by fascistic sort of tendencies so in a way Beppe Grillo is going down because Renzi is the alternative Beppe Grillo was never really populist but really anti-establishment and now that you have a smart 39 year old anti-establishment alternative to Beppe Grillo hopes are that in Italy it comes down if I may you give that little footnote the Italian movement for European Union picked up my little republic idea and just send a week ago a letter to Renzi so this is already in the lap of Renzi and perhaps we have the young European 39 year old leader that we are all waiting for there and the name of the European leader is not Merkel nor Hollande or whatever so you go down I think Wilders is a real problem the Dutch are a problem they are not a problem in the Euro the Dutch are actually pretty happy with the Euro but they are unhappy with this migration thing and it's unfortunate that this truefins is if you look at sociology losing their legacy sort of party in terms of sociology if I may say this this is pretty true for most of the sociologies of right wing parties which is to be very blunt and sorry but it's more or less male old and losing legacy parties and so what I want to point to is if we want that thing happen which is parliamentarization of the system so what I am building strongly on is just generational shift of the whole discussion the whole European discourse is completely dominated I can give you pictures from the Munich Siktor conference that's not even over 60 that's over 80 if I may say so and it's completely male dominant so what I am saying here is that the current European discussion is not reflecting the current gender dynamics and because it's not reflecting gender dynamics it's not reflecting what is happening in the internet cyber, digital revolution and all these websites which are out there I have you know go to my twitter account the young stars building websites for Europe and so on and so forth so the gender dynamic and the generational dynamics of this discussion is not reflected and therefore is why these populist parties you know which I am as I said not against in the first place because they have a very fair point but it's not giving a true picture but because it seems as if everybody is against Europe but it's actually not the case I gave you my sort of citizen based polling here and if you price the gender dynamics in you get probably still very different pictures so figures so I mean to make a long story short who the system saved the idea is probably what we need to do in whatever form and chances are hopefully out there that we succeed Power to Youth, John Well first I'll go to your question if I may what should we do next I think what we shouldn't do next is try to come up with great new institutional solutions because I think we are beyond institutional solutions I think we need to identify what we need to get done and I'll start with the United States what the United States needs to get done more than anything else is to remember that it is so to speak the managing partner of the world not just of the Atlantic world but of the world and has to do what we have been taught to do over 40 years of diplomacy that is to work every day to keep the structures going this is what we did between 1945 and 1995 or 2000 and that vocation has been lost we don't do that anymore and you just have to see the way both the Bush and Obama administrations related to Europe to see in our most central relationship we have actually been ignored there are a lot of reasons I won't go into them but the President's pivot towards Asia is a good example as if we'd never been involved in Asia I think there's something called Vietnam War which was quite an engagement in the Arab or maybe there was World War II we were in Asia right up to our necks but somehow for whatever reason people and I can tell you I hear this from endless numbers of Americans who come to Europe even the President of the August Council on Foreign Relations wrote an article a year or so ago saying Europe was irrelevant to the United States our own political system has gone awry if that's the way we're going to protect our foreign interests we've got to start all over again maybe we should join the European Union to have a joint constitutional convention I don't know we've got to start all over again on the other hand the Europeans got so deeply involved in their institutions that they also forgot their interests one of the main ones that they sacrificed really for nothing without even thinking was the strategic link with the United States until 1990 Europe was the most strategic point on Earth and it had the entire loyalty and engagement of the world's greatest military power the United States once the Cold War ended the position was no longer there what did the Europeans do instead of coming and trying to work out a new strategic relationship with the United States they decided they were going to go into their own clubhouse the European Union and build up something which is now called the current foreign security policy which is neither foreign nor is security nor is it a policy but it it had the effect of breaking the link with the United States and I can say more but I certainly have enough contact that link is now gone United States does not see it's strategic interests as being involved in Europe maybe Mr. Putin has reinstated it for us but up until recently it was gone on other points and that's what I would do I would start talking about common agendas whether the heads of government do it whether we need a wise man's commission we had a wise man's commission after the Berlin Wall went up called the Harmel commission which actually devised detente policy and actually took us towards the end of the Cold War so wise men's commissions do work sometimes whatever it is we need to have an agenda we need to know what we're talking about some of the things that Francois mentioned are exactly right we need to understand what we're doing about energy on the other hand the Shell Corporation has just at least said before the trouble started they were going to invest $5 billion no $500 billion in Ukraine to develop Shell gas so maybe that's underway but we need to have an agenda and we need to know how to work more than that I don't know what to say on the question of federalism well you would take from my comments I do not believe European federalism is the right future for Europe I think it's a dead end Europe is a beautiful wonderful diverse place which doesn't have the push towards a federalism which the United States had and we got Francois and others were saying we got a wonderful description of American federalism from Professor Wood down in Wavisburg and let's not forget that American federalism has been a fight from the beginning to the end and we had a civil war in the middle which is still the worst war the United States was ever involved in and you don't want to take our route to federalism let's put it that way I think that in the new world that's coming up the globally integrated world Europe has a great opportunity because it's not federal because these individual states can in fact work together on a different level but it's going to take a while as I said I apologize we sold you all of our institutions and you shouldn't have bought them but there you go but I think that the world will evolve into something else now I'm going to have another round of questions I promise but I can't pass up the opportunity to bring Moon Chow co-founder of Eurointelligence and also a columnist for the Financial Times has been with us in Williamsburg and I just thought if I may put you on the spot please forgive me just a few thoughts on the economics of Europe very specifically or any comments that you have on this morning 7am decision on banking union so Wolfgang thank you and then we'll take another quick round Heather thank you very much for following it on Twitter this morning and at 4am local time there were various tweets of saying we've been negotiating for 11 hours no deal then I got the 14 hour tweet no deal and then suddenly after 16 or 17 hours they finally got a deal it's in many respects a very European deal just for your background the issue is the European equivalent of a federal deposit and insurance corporation to backstop the banking sector in the way the Europeans do these things first the ministers agreed they did this in December so if you thought you saw that headline before banking union agreed that happened in December but in Europe these things have to be agreed twice so the European Parliament has co-decision rights here so basically they have to agree to it as well and there was a very big conference last night in which the Council, the Commission and the Parliament the three main institutions of the EU all sat together and negotiated the final details the main weakness of the agreement in December and you know you could ask different people and they give you different lists of weaknesses and strengths of that agreement was that unlike the FDIC it was not backstopped by any you know government money the not for this European FDIC which we call the single resolution mechanism is about in dollar terms about 60, 70 billion dollars that's enough to handle a failure of one bank, two banks maybe you couldn't handle Deutsche Bank that's already too large for this mechanism but you could probably handle a couple of medium-sized banks so this is useful for a situation when the bank manager runs away with the money it's not really useful for a systemic financial crisis of the kind we had so this is not really a big macroeconomic stabilization mechanism the one that was agreed because the fund itself has no backstop the FDIC by contrast is backstopped is indirectly backstopped by the US government if the FDIC failed there is no doubt in anybody's mind that the US government would step in that situation does not exist in Europe because we don't have a European government so the question of a backstop was important to a very senior leader of the European Parliament he told me that this was really the only issue the fact that this fund is backstopped he had telephoned with Angela Merkel and she told him that there's under no way that Germany would accept a backstop because that's sort of a way to common funding about sort of a roundabout way to a euro bond which is what the Germans have have rejected and he's the question that they have been asking themselves in the Parliament should we block it over that which should we boycott this whole legislation because of this funding mechanism and the ultimate reason they ended up not boycotting this legislation this morning was political there is an election to the European Parliament in two months time if they had boycotted it now the various parties that boycotted it in particular the socialist would have come under attack for wrecking the this agreement it could have led to financial market panic I don't know nobody really would have known this but there is a risk that the euro crisis might have returned even briefly and the Parliament would have been with the Russian situation also overhanging dominating the debate I don't think anybody wanted to open this so they basically closed it down now the way that it is technically is quite instructive of how to actually do this but the only issue was this back of funding but in order to make it look better they put up five or six different points on which they disagreed fundamentally there were procedural decisions which I don't want to go because there are two tedious to discuss who takes decisions at what times and who's going to call whom and this all has to happen over weekend the original proposal had 121 people involved in this decision and about six or seven committees all this over weekend this is impossible the whole purpose of this bank resolution mechanism would have been not to resolve a single bank they have fixed that a little bit but they didn't get any any deal on the single on the backstop so the European Parliament declared victory on a number of procedural issues and it sounded pretty good having 16 hours of negotiations without sleep is pretty impressive but in substance this is the minister's proposal in essence he was woken up at six o'clock in the morning he had been really tough in these negotiations and he had no problems agreeing to that deal it wasn't the small concessions that they made the fund is now going to be built up a little faster with a different formula so these 55 billion euros 70 billion dollars they're going to be replenished a little differently than the original proposal there's a lot of small sprints stuff that's different but ultimately this is the same old weak bank resolution mechanism it may eventually I'm going to close here eventually we will have a banking union in the EU my guess is it will be about 20 to 30 years from now it will not affect this current crisis so if you think that the banks need to be restructured which they will need to be this bank resolution mechanism is not there for this particular resolution this is for the next crisis not for this one and they acknowledge that that's not sort of a commentator cynical position the whole idea of the lack of a backstop is not to use this month funding mechanism to sort out the current banking mess what the Germans called legacy debt which means existing debt that's what it is, legacy debt we have now this is about the debt we're going to have in the next crisis in that sense of a rather theoretical procedure it's a structural response to a very cyclical problem you heard it here first guys that was a great explanation I'm going to have you pass the microphone right behind you Mike you have literally 10 seconds these last two comments have raised a fundamental question how can you have a common currency without a federal government the US has the national treasury to move money from New York to Alabama nothing like that exists in Europe you have a weak central bank you're now talking about a weak FDIC 20 years from now how does this common currency keep going without these kind of props go very quickly you've put your finger on the sourest of the points and quite rightly so this currency was fated not to work and when a storm occurred in 2007-2008 it very rapidly demonstrated that it did not work at least not to accomplish what it was supposed to accomplish that is stability we've had the great divergence of interest rates within the eurozone with Greece at 75% I think at one stage and Germany at 1.5% it certainly did not help promote growth rather the opposite some of the eurozone countries have witnessed the longest recession industrialized countries have ever been through in peacetime including the Great Depression by the way 6 years without any growth it takes a certain talent to do that and that is what we got with the euro now Mario Draghi has bought us some time the currency is not going to explode all of a sudden the way it nearly exploded several times in 2010-2011 2012-early 2013 we may have several years in front of us in order to try to set things right now here is where there are great differences of opinion I believe like you that only federal solution could actually allow the euro to operate in what would then be an optimal currency area but since federalism is not going to be on offer any sooner than the banking union which Wolfgang Münchau has promised us for some time when I will no longer be in a position to ask myself questions about chastity 20-30 years I think you said therefore the euro is going to have to go and there are several ways in which you can try to do that I offer one, Wolfgang has another by the way which he can talk about if you want to and others consider that we can continue to do what is called muddling through but which really is muddling down that is while the rest of the world will continue to grow Europe will continue to grow much less than it could be growing I want to, I'm so sorry we are so past time but come up and see Joachim because I want to first of all thank our three panelists that was a fabulous discussion and again it demonstrates that we need we need thought leaders to help us through this important period I thank you so much we are going to resend out to you we had two incredible live webcasts of two events in Williamsburg a live debate between Jorgas Mussen the deputy minister of labor and the German government in his private capacity and Liam Fox former British defense minister on four and against the proposition of the United States of Europe and Roger Cohen moderated it's worth the watch as well as an economics discussion which featured Wolfgang we will send those out to you they were important bits from Williamsburg again our great gratitude to the Colonial Williamsburg Foundation the College of William and Mary and our participants who made a fantastic conversation about the future of Europe in some ways the future of the west as we watch the events and Crimea take place in Ukraine thank you for joining us have a great day and come back to CSAS soon thank you