Euro crisis casts long shadow in Obama-Romney race
By Brian Beary in Washington | Thursday 12 July 2012
After years of EU issues being peripheral in Washington, Europe is taking a front row seat in this year’s US presidential race. The problem is that it is for the wrong reason. The EU sovereign debt crisis and skittish speculation about an imminent collapse of the euro has put a damper on US economic recovery. With unemployment still above 8%, there is a good chance that Europe’s economic woes will actually cost President Barack Obama his job given that historically it has proved extremely difficult to win re-election with the jobless figure so high. As all eyes focus on the economy and the debt crisis, military and security issues like missile defence and counter-terrorism cooperation are taking a back seat. So too is trade, although the publication by the EU and US administrations on 19 June of an interim report at promoting transatlantic jobs and growth has at least opened the possibility to EU-US free trade agreement (FTA) talks being launched in the coming months.
According to Fran Burwell, vice-president of the Atlantic Council think tank in Washington, “Europe is being used as a punching bag in the presidential race”. President Obama blames Europe for the US economy’s sluggish performance, while his Republican opponent, Mitt Romney, cites Europe as the textbook example of ‘what not to do’ in terms of policy. Burwell points out that many in the US now hold “contradictory views of Europe simultaneously,” being critical of Europe’s generous welfare entitlements, which they say has helped to cause the debt crisis, while also slamming Europe’s austerity policies that aim to reduce debt levels. Heather Conley, director of the Europe Programme at the Centre for Strategic and International Studies (CSIS) in Washington, says that neither Obama nor Romney have shown any inclination to help out Europe financially – for example by increasing US contributions to the International Monetary Fund. Conley feels that this is misguided and that the US should, in fact, make a contribution – even if mainly symbolic – to show its appreciation for the military assistance that Europe has provided the US in the NATO mission in Afghanistan.
MOVEMENT ON FTA
Meanwhile, President Obama and the Presidents of the EU Commission and Council, Jose Manuel Barroso and Herman Van Rompuy, have endorsed a report that could ultimately lead to a comprehensive EU-US FTA. US Trade Representative Ron Kirk and EU Trade Commissioner Karel De Gucht were asked at the November 2011 EU-US summit to explore options for stimulating the transatlantic economy, given the economic doldrums it finds itself in. Their interim report of 19 June makes clear that they would like to go big, rather than small. They are advocating a pact that covers agricultural and manufactured goods, as well as services, government procurement and investment. They insist it should cover both conventional trade tariffs and non-tariff, regulatory barriers. Kirk and De Gucht’s final recommendation will be made by the end of 2012 so there does at least seem to be movement on the trade front, although the decision to launch talks will be taken by the leaders. Should Mitt Romney be in the White House in January 2013, it may actually help the prospects of this initiative since the Republicans have traditionally been more interested in concluding FTAs than the Democrats.
EU SILENT ON DRONES
Turning to counter-terrorism, if the US silence on an FTA with the EU has been notable, so too has Europe’s silence on a major new development in US policy: President Obama’s adoption, as a cornerstone of his counter-terror strategy, of the use of remotely-piloted airplanes, commonly known as drones, to kill terrorist suspects in al-Qaeda havens like Yemen and Pakistan. According to Conley, “the EU has done President Obama a favour by keeping quiet on this. It has become like Europe’s very own ‘don’t ask, don’t tell’ policy”. Burwell at the Atlantic Council notes that “some people in the legal community have voiced concerns about drones, but most Americans are happy about them” because they are effective at killing terrorists and do not put US soldiers’ lives at risk. President Obama is therefore likely to cite the policy as evidence of how tough he is on terrorism, while Romney – keen to show he is even tougher – is unlikely to challenge him on it.
IRAN, SYRIA FLASHPOINTS
Romney has adopted a similar ‘tough guy’ strategy with Iran, where he has criticised Obama for not being tough enough in the EU-led negotiations on Iran’s nuclear programme. That said, Romney does not indicate what precisely he would do differently. The EU and US have been remarkably unified in dealing with Tehran in recent years. However, should Israel decide to launch a military strike against Iran’s nuclear facilities in the coming months, “it will put Iran front and centre in the US presidential debate,” notes Conley, adding “it could also put a strain on EU-US unity”. The US would come under pressure at home to support Israel in the event of such a strike, while the EU would likely face countervailing pressures to condemn unilateral Israeli action. A further potential flashpoint is Syria where the international community has largely stood by as the Syrian government has, for more than a year, brutally clamped down on a popular uprising against it. While neither the EU nor the US seems disposed to putting troops on the ground in Syria, tensions may arise over whether they should arm the Syrian opposition.