Herman Van Rompuy

President Emeritus of the European Council on present European and International Affairs and on dealing with populism in Europe

The World is changing. In which direction are we evolving and what do you think is the right way forward?

First of all, before I answer your questions, we have to make an analysis of the world as it is now, before we can speak about where we are heading for. If there are two words that characterize the current period, these words are uncertainty and anxiety. And not only in Western Europe: you have the same feelings all over the world. This feeling is much more present now than it was one year and a half ago, because the continuous discourse of the American President contributed heavily to this renewed and accentuated feelings of uncertainty and anxiety. But it already existed before. What are the main reasons for this uncertainty?

The first and most actual reason, are the events that are happening around trade and the so-called trade war. Without going into detail, the measures that are taken now do not have a great impact on international trade. Only 1.5% of GDP for the upcoming ten years. You have to relate this number to the 10% growth the economy will have in the upcoming ten years. It is not marginal but you really have to relativize. There is an impact on investment because investment depends on a climate of trust: certainty or uncertainty. Today uncertainty rules.

Most people are worried and concerned. Some are anticipating a worsening of trade measures. But until now, the harm done is not that big. In the thirties when there was also a trade war, exports decreased with almost 60% in just a few years’ time. Now the pace of growth is slowing down, but this doesn’t mean we experience an overall decrease of world trade, but it affects the feeling of uncertainty.

A second point that creates uncertainty is the migration crisis. Migration is part of globalization. I will share with you some perspectives. The absolute number of migration coming via Turkey, via Libya and from the Mediterranean as a whole to Europe, is one quarter of what it was two years ago. So the fear of a massive inflow of migrants is not followed by the statistical figures. We created ‘Fortress Europe’ whether you like it or not. Europe is protecting its borders much more effectively than a few years ago, apart from the humanitarian side of all these measures we took. But in perception migration is considered by many of our citizens all over Europe as the main topic. It is also high on the political agenda in every member country and considered a threat to our civilization, our culture, our social security, our jobs… Rightly or wrongly. But this sustains a huge factor of uncertainty. The answer that European countries give to it, is precisely protecting much more effectively the external borders. Same situation in the United States, where its main symbol is the wall built between the United States and Mexico, not just built by President Trump, but also by his predecessors. Migration is all over the Western World, in the European Union and the United States, a major topic. Uncertainty. Again the answer is what we called a few years ago ‘Fortress Europe’.

A third factor of uncertainty is populism. We have to look at this phenomenon in a very lucid way, seeing all the aspects. Populism is changing the political landscape, is creating huge tensions in society: what we call polarization, going even to racism and installing enemy thinking. Populism is creating deep cleaves in our society. But is it a danger for Europe? Yes and no. In Italy, after one week with the new government, the Italians said: ‘We will not leave the European Union, we will not leave the Eurozone.’ Madame Le Pen, after her major defeat in the French elections, said: ‘We can realize our program within the European Union.’ When you look at the governmental agreement in Austria, the European chapter is still quite a traditional European chapter, which doesn’t mean it is strongly pro-European. But it is mainstream European and not creating worries on the European Project. After Brexit there is a change in populism. While the public opinion is more in favor of EU membership than before Brexit. People don’t want to add instability to an already unstable world. The support for EU membership increased dramatically after Brexit. And even so populists want to remain popular. So they weigh all this, that is why they are not challenging the European Project as such and the Euro Area in particular.

Does that mean that populism is no danger? No. Because governing such a divided society is much more difficult than when we keep consensus around key values in our society. We have to keep that in mind. There is one particular aspect that is not often emphasized: populism is on the right side of the political spectrum as far as migration, identity and culture is concerned (what we called social-cultural factors), but is on the left on social-economic matters. Because a populist party doesn’t want to become unpopular in cutting social benefits or decreasing wages or pensions. In general they are against austerity, against fiscal consolidation. At the end, they make our economies less competitive on the global scale.

Looking at populism from different angels remains a reflection of uncertainty and anxiety and is a worry for other parties and countries because it is creating political volatility and political instability and makes the European Union and member states much more difficult to manage.

Another threat for the upcoming years is the high level of private and public debt. I often say that a financial crisis is bound to happen. We don’t know when and we don’t know how. But the overall level of debt of 225%, public and private debt speaking in global terms, is so high that the situation is threatening, not tomorrow and not the day after tomorrow but in medium or long term perspective. Wolfgang Schäuble, when he left his office as Minister of Finance in Germany, mentioned this as his main concern for the upcoming decades. We know the consequences of a financial crisis in the aftermath of the 2008 crisis. Maybe it will not even be in my lifetime, but we have to be very careful and vigilant. Because the public and private debt level is not only high but it has increased since 2008 with 12% of GDP, especially in China and the United States. In Europe, we conducted the policy of austerity and control in many countries in comparison with China and the US. In China, some action has been taken but it is a factor of uncertainty.

Geopolitical rivalry also plays a role. Not between Russia and the United States. With all respect to the great country that Russia is, but today they represent 3% of the world economy, the United States 15%, and China even more, when we make the comparison in what we technically call ‘Purchasing Power Parity’. When you make a comparison between the Russian and the Chinese economy, it is almost a factor from one to six. When I speak about geopolitical rivalry, economically and politically speaking, it is between the USA and China.

But the question is: is there really that kind of rivalry? Because our Chinese Friend tends to underestimate the domestic factors that are inspiring or motivating the policies of President Trump. President Trump’s first concern is domestic, his first concern is to show to his core voters that he is defending the United States in the world. That is why he is taking action against China, and also against the European Union.

Unfortunately, the United States have not many friends anymore in the world making life even difficult to their closest allies: Canada, Japan and the European Union. Even if we consider the main motivation of the United States, of its new administration, related to domestic goals, it still is perceived as a rivalry between two main players. And in the Western World, the feeling is created that in this rivalry not only the United States but the Western World are on the losing side. The balance of power is shifting, more in the direction of Asia than in the direction of the Atlantic. This leads in ‘Good Old Europe’ to questioning, ‘Where are we heading for?’, ‘What is our future?’ and ‘What is the place of the European Union in all this?’

One of the answers to all these issues, trade, migration, geopolitics, is not less Europe but even more European cooperation and integration. And that is one of the paradoxes: at the moment when the European Project is challenged, when so-called Eurosceptical or Euronegative parties are on the rise, at that very moment a clear analysis of the situation shows that to give the right answer to all those challenges — and I ‘forgot’ in a way to speak about cyber-security, terrorism, etc. — you can’t solve those problems anymore on the national level. When we lived through the trade war between the United States and the European Union, it was not Macron or Merkel who concluded an agreement with the United States, it was the European Commission. This is one of the great evolutions: the European Institutions showed their relevance.

I was recently in China during the European Union-China Summit, and the conclusions were really surprising: on the Chinese side they promised to reinstall a level playing field for our traders and for our investors because there were problems and discriminations. We also made gestures, so the conclusions were rightly balanced. But they dealt with the problem together with the European leaders, the President of the European Council and the President of the European Commission. China also notices how important the EU Institutions are in such a period of uncertainty. So one of the answers is more European integration and cooperation.

We have recent examples, simply to emphasize and to underline what I just said. Even the new Italian government is asking for more banking union, and asking for more solidarity in the migration issues. Viktor Orban was meeting Salvini, but they have on migration totally different opinions. They agree on protecting the external borders, but everybody is agreeing on this. We don’t need Orban or Salvini to agree on this. But the divisive issue between Italy and Hungary is solidarity. The Italian populists are asking for more Europe. And I am not telling this for the sake of the argument because it is based on facts and on declarations.

On defence for instance, we are making huge progress. After the declarations of President Trump, after the annexation of the Crimea, confronted with the unstable situation in the Middle East, European countries concluded: ‘We have to do more to defend ourselves.’ And Merkel said: ‘We have to take our fate into our own hands.’ And that is why we set up this ‘Permanent Structured Cooperation’, what we call ‘PESCO’. 25 countries
are participating. We thought only a few of them would participate and on a number of very concrete projects. We are far from a European army but it is about convergence in many military domains: on purchases of devices, on the repartition of the roles between armies, on research and development with aid of the European Commission…

The complex situation is requesting more European cooperation in the midst of rising Euroscepticism. A paradox. My advice is not to start a crusade for more Europe, because then you will have all kinds of reactions. But we should move on to work on a very concrete basis of different topics, going in one direction: more cooperation and integration.

I believe as well that this is what we need. We have to look to each other, to have empathy with each other and see what we can do together and how we can help each other. Here in Brussels, Belgium and Europe, we are strong. Europe stands for Peace. We should be proud that we have Europe and we must be pro-European. And we can be patriotic but not too much: we must find the right balance.

In the same line of reasoning, we have to show the European citizens that Europe is not only needed but that Europe can also protect better against threats, real threats or perceived threats: unemployment, unstable jobs, mass illegal migration, terrorism, climate change, all kinds of dumping and even threats on our borders — especially important for Central and Eastern European countries. We have to protect people better. Of course also cooperation of member states is needed for this, but without Europe it will not work, without more European cooperation and in some domains more European integration it will not work.

The scale of problems is becoming too global and too international. But then we have to perform, we have to deliver. People need to feel that they are much better protected by Europe. We are doing a lot, in all those domains. I can give you for each domain a kind of summary of all that we did. But the problem is that it is at this stage not convincing enough. Because the crises of the Eurozone and the refugees were so traumatic for many people. You could have lost all your savings in the banking crisis and in the Eurozone crisis. Imagine that there was an implosion of the banking system.

Imagine that the Euro would have collapsed. This was at certain moments a real threat, not only dramatic but also traumatic. The same occurred with the refugee crisis: at a certain moment we had the perspective that not only 1.5 million people could come to Europe, but several millions. And people were showing solidarity in the beginning of the refugee crisis but there are limits to our solidarity. And the perspective that millions would come was too much for almost all people. So we showed our generosity and solidarity but at a certain moment, we considered that there are limits to that kind of feeling. This created in both the Eurozone crisis and refugee crisis, such traumas in public opinion that even if we show today results in all the domains I mentioned, these are considered not enough and not sufficiently convincing. It is up to us politicians to work very hard to convince people even more, because the argument of peace is a major argument for our generation but it is not enough for the younger generation.

I want to come back to Great Britain. In United Kingdom the younger generation voted overwhelmingly in favour of ‘Remain’. The youth should have gone to the ballot boxes. Too many stayed at home. The older generation in England — not in Wales, not in Scotland, not in Northern Ireland and not in London — voted against membership of the European Union. And precisely that older generation has known the war. And the young generation that didn’t know the war, voted in favour.

So our younger generation — independent from the argument of war and peace — are pro-European: and that is for me, in all the problems we have, an element of hope. Peace lost its attraction on the continent for younger people as an argument for Europe. But they see that their colleagues in Britain, British youngsters, found other reasons to believe in the European cause.
They lost the referendum for now, with a very small margin: 48% against 52%. And if there is tomorrow a new referendum, the final result of a referendum could be just the opposite. What happened in Brexit is very sad and disappointing. It is a political amputation of the European Union. In 2060 the United Kingdom will be the most populated country in Europe, having the most inhabitants and leaving Germany and France behind, especially Germany that will lose a lot of its population. But younger people want to stay. This is the very first time that the older generation took away the future of a younger generation. We were always told that we have to work for our children and grandchildren. But in this case the older generation is working against the will and interests of the younger generation. It is quite surprising and even astonishing.

Barbara Dietrich and Maarten Vermeir