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In search of a new post-crisis global balance – EURO-BRICS Summit in 2014 or 2015: The agenda takes shape

June 2011 (GEAB N°56)

More than two years ago now, LEAP/E2020 initiated the first anticipations on the holding of a Euro-BRIC summit (BRICS since 2011). This event, which in 2009/2010 seemed totally unlikely to most experts in international relations, was in fact considered by our team as an essential bridge to be crossed for any future post-systemic crisis global balance. The profound trends leading to the crisis seemed to us to be promising for this major reorganization in international relations, characterized by a reconciliation of the balances of the world before the European colonial period and that derived from that same colonial period of which the “transatlantic” twentieth century was only the latest incarnation.

Today, on the eve of the second half of 2011, which will be the stage for the global systemic crisis’ second major shock, combining an economic, financial and monetary crisis and global geopolitical dislocation[1], LEAP/E2020 had the opportunity to directly address the central issue on the likely agenda of such a Euro-BRICS summit thanks to the first seminar on this topic which brought Europeans, Brazilians, Russians, Indians, Chinese and South Africans[2] together. Announced to the GEAB readers last February, this brainstorming conference took place in Moscow at the Institute of European Studies of the prestigious MGIMO (Moscow State Institute of International Relations), on the 23rd and 24th May 2011[3].

The lessons of this first Euro-BRICS working session on the issue of the agenda for a future summit bringing together the leaders involved are remarkably rich. Our team considers that four of them in particular deserve the full attention of European and BRICS policy makers and participants:

  1. The richness, variety and novelty of the Euro-BRICS exchanges initiated on this occasion contrast with the poverty, uniformity and triviality of traditional exchanges between Europeans and each of the BRICS countries individually, or even between Europeans and Americans within the framework of the transatlantic relationship of the last twenty years[4]
  2. The absence at the core of international relations in recent decades of an equivalent dialogue between the European network, multi-national, structured and institutionalized (and even semi-state like at Euroland level) and the rapidly developing multi-national BRICS network
  3. The shared sentiment of a potential power of influence unmatched in world affairs with a Euro-BRICS dialogue directly representing half the planet’s  inhabitants, 3.5 billion people; and four continents indirectly (Asia, South America, Africa, Europe)
  4. The critical convergence on many key issues concerning global governance and the major global challenges of the coming decades

These points seem essential to us because they determine what follows on from LEAP/E2020’s anticipations on a future Euro- BRICS summit: it’s something to identify a strong trend, to anticipate that it leads to a crossroads that can steer the world towards a better or, on the contrary a catastrophic, post-crisis situation according to the choices made, and it’s something else to see in practice that those involved in this potential trend are able to interact constructively, or are even positively surprised by the advantage of such a dialogue once begun.

One of the initial consequences of this situation is that LEAP/E2020 now expects the first for Euro-BRICS summit to be held in 2014 and not 2015. In fact, in such a promising environment for dialogue, the deepening of the crisis by the end of 2011 and the election of leaders in a number of countries involved, particularly in the Eurozone, will speed up the process.

Before going further, let’s clarify what’s covered at this stage by the term “Euro” in the Euro-BRICS dialog. In the beginning[5], LEAP/E2020 believes that this won’t be the EU but rather Euroland. Germany, by voting with the BRICS at the UN Security Council over the attack on Libya, has already opened the door. The elimination of Nicolas Sarkozy in the first round of French presidential elections, as anticipated in the GEAB N° 49, and the impossibility of Dominique Strauss-Kahn now standing as a candidate, ensures that the future French president[6] will return to traditional French foreign policy, refusing subservience to Washington and promoting a pro-active European policy at global level. It is, therefore, around the Franco-German core[7], and more generally Euroland, which knows that the BRICS constitute the most important external support for the Euro[8], that the European axis of Euro-BRICS dynamics will be built[9]. A sign of such a development: at the Moscow seminar, the Europeans were mostly “Eurolanders”. Very quickly (towards 2012), once the process has got under way, the Euro candidate countries, that’s to say almost everyone except the United Kingdom, will join the Euroland heart of the Euro-BRICS talks.

The EU institutions in Brussels, in particular the European Commission where the Anglo-American influence of the past two decades is rapidly waning, will be divided on the subject and will try to slow the process down without daring to oppose it publicly. One can count on the common diplomatic service, where the “old Atlanticists” are over-represented[10], to go into overdrive to this effect[11]. But even within the European institutions and especially in their immediate environment (economic lobbies in particular), the pressure is rising in the opposite direction: businesses as well as major European investors want to get closer to BRICS as quickly as possible. As a powerful Euroland institutional investor recently pointed out: with an average of 8% to 10% growth over the next decade in the BRICS and 1% to 2% in the US at best, the discussion is already over for European economic and financial circles[12]. The politicians will have to bring their “beliefs” up to date very quickly[13].

The path leading to the 2014 Euro-BRICS summit

In practical terms, from fall 2011 onward, our team anticipates an increase in informal, high-level meetings between senior civil servants and economic and financial policymakers from Euroland on the one hand and from BRICS individually on the other about a possible Euro-BRICS summit. On the BRICS side, the subject will be addressed simultaneously in discussions between diplomats and economic and political leaders[14]. Then, under the blow of the deepening crisis and the change in political leadership, especially in Euroland, from the second half of 2012, we will see the first informal diplomatic discussions on a possible summit, supported by individual or joint messages from European and BRICS economic and financial leaders. In 2013, a date and venue will be proposed and adopted so that the first Euro-BRICS summit can be held in 2014.

But let’s go back in more detail to the four main lessons of this first high-level Euro-BRICS meeting which is reflected in the proposed agenda of the future Euro-BRICS summit at the end of this analysis.

The richness, variety and novelty of Euro-BRICS exchanges initiated on this occasion contrast with the poverty, uniformity and triviality of traditional exchanges between Europeans and each of the BRICS countries individually, or even between Europeans and Americans in the framework of the current transatlantic relationship

All the participants in this first Euro-BRICS meeting were struck by the richness of the exchanges, contrary to most international meetings which are an opportunity to repeat speeches, analyses or proposals which have already been heard a thousand times. Undeniably, the BRICS countries bring projects, demands and views of the world that Europeans don’t usually hear.

Barely four or five years ago, the Europeans were only holding bilateral discussions with each of the BRICS[15], and generally did so unilaterally laying down the limits of the debate even imposing the subject matter (often defined in Washington), at least on large global issues (global governance, climate, trade, economics, finance, …). Today, after three years of crisis that has left the West in tatters and plunged Europe into a serious crisis, whilst the BRICS are stepping out economically, a discussion with all five BRICS requires from the Europeans modesty, openness, an ability to listen and, consequently, discovery. It’s also why crises are useful: the walls which have been destroyed can allow dialogues which were previously impossible.

This reality is reinforced by the extreme diversity of the BRICS countries, just as much internally for each of them, as externally between them. It is a “multilogue” as much as a dialogue and it rests, paradoxically, on the historical and linguistic ease of Europeans to speak with most of the BRICS. Apart from China, the other BRICS share, for better or for worse, whole swathes of European history. Or, put in a less Euro-centric way, Europeans share large swathes of history with each of the BRIC countries (China being a separate case). And at the core of the BRICS Russia has, of course, a special place in the rationale of Euro-BRICS cooperation. It is both European (even if outside the EU) and BRICS, its strategic priorities putting the development of the BRICS network in second place … after Euro-Russian cooperation.

geab 56 - 1

BRIC country shares in EU exports and imports in 2000 and 2009 (in %) – Sources: Oehler-Sinçai / DG Trade / Eurostat, 05/2011

 

The absence at the core of international relations in recent decades of an equivalent dialogue between the European, multi-national, structured and institutionalized (and even semi-state like at Euroland level) network and the rapidly developing multi-national BRICS network

Because if Europe, whether in EU or Euroland format, can often seem discordant it is, nevertheless, organized. Compared to the diversity of the BRICS and the youth of their network, the Europeans are a homogeneous pivot, especially Euroland. Regarding the BRICS network, there is both a huge need for mutual discovery between its members and a tremendous dynamic aimed at multiplying the points of contact, the processes of linking beyond the diplomatic-political origin of the BRICS. According to LEAP/E2020, 2011/2012 will be transition years at the core of the BRICS network, significantly increasing the critical mass of economic, financial, academic, and political players involved in the BRICS networks.

A network being essentially a tool, the BRICS are in the process of forging this tool in two key areas requiring this expansion of the “social” base of the BRICS network:

. a tool for transforming global governance and rebalancing it in their favor;

. an instrument to grow the direct links between them, which should no longer be dependent on Western intermediaries.

This duality explains the initial feeling of uncertainty ahead of the BRICS concept. This feeling has been largely fueled by the western press which first sought to discredit any geopolitical relevance in the BRICS concept before having to admit in recent months that it’s now an inescapable reality[16]. But it is undeniable that everyone, including players from the BRICs themselves, wondered at first how such a harnessing, as gigantic as it’s heterogeneous, would be able to “go the distance”.

Then, the growing practical experience of these BRICS meetings established this dual nature of the “BRICS phenomenon”[17]:

. a deliberate medium-term (less than a decade) policy making the BRICS the instrument of radical change in the major balances and mechanisms of global governance invented by the West for its own benefit,

. an underlying long term (a generation: twenty years) operation also involving the other sectors of society of each BRICS country, aiming to directly reconnect the key parts of the world-after-the-crisis on patterns which are no longer “Western-centred”.

The tool thus serves two purposes, with two different expiry dates and will be used by two different types of players. In fact the second objective can also collide with the policy makers’ will at the origin of the first objective: to establish programmes of regular contact between NGOs, civil society and students from different BRICS countries is not necessarily to the taste of the leaders of each of the five powers. But the coherence of a political-historical instrument is built with time and human action. It is not given in advance. Just look at European unification to be convinced.

However, like in the case of European unification, one can identify an existential pressure for the BRICS network: it is necessary for it to be constructive, possibly in an offensive manner (that’s to say, “banging on the table” if necessary to be heard), but it cannot be destructive or aggressive. And this is indeed a constant claim by the BRICS players. Beyond their claim, this is simply due to the disparate nature of the strategic interests and motivations of the five countries involved. Their relations with the “West”, master of the world in full decline, are not the same: some like Brazil, South Africa and India have complex relations with the West[18], while Russia and China have a long history of strategic confrontation with this West. The Euro-BRICS rationale can serve as an intermediary to these two BRICS internal trends since Europe has been, for the last sixty years, nothing else more than the eastern march of this primarily American West (a kind of “little West”), while offering a unique ability, that of being able to be heard by Washington[19].

The shared sentiment of a potential power of influence unmatched in world affairs with a Euro-BRICS dialogue directly representing half the planet’s  inhabitants, 3.5 billion people; and four continents indirectly (Asia, South America, Africa, Europe)

If the BRICS directly represent three billion people, already 50% of world oil consumption, 75% of the expected economic growth in the next ten years, huge energy, mineral and agricultural reserves, 20% of global GDP (probably 35 % within 10 years) and world trade, 53% of direct foreign investment, etc …, they are actually even more important than that because several of them are actually the key players of regional and/or continental integration processes, in fact privileged representatives of whole regions or continents: China with the East and South-East Asia, Brazil with South America, South Africa with the whole of the African continent and Russia with a part of Central Asia.

Meanwhile Europe continues to be the world’s leading economic and trade group, the region having both the largest savings[20] and the greatest political stability, the economic and trade group with the most multilateral experience and aspiring to global polycentrism for many years. Finally, thanks to Euroland, it’s the entity that has the only international reserve currency as an alternative to the dollar. Should there be a single link that legitimizes Euro-BRICS dialogue at the highest level, it’s the Euro. Not only does its international success owe much to the BRICS’ enthusiasm, headed by China, to diversify their reserves out of the US dollar, but one can say that the BRICs have only been able to appear as a “geopolitical force” because the Euro’s existed. Without the single European currency Beijing, Moscow, Brasilia, New Delhi… would be condemned to suffer Washington’s unipolar world powerless to do anything other than gesticulate to no effect. It is de facto the Euro, which opened a breach in the “Dollar Wall”, a breach that the BRICS have been able to quickly enlarge using their new wealth to stimulate the European alternative to the US currency[21].

This unintended convergence of destinies, which merely reflects the overlap of the ends of two epochs, that of the post-1945 American world and the world of the European conquest beginning in the XVIth century, is undoubtedly one of the historical advantages of the future Euro-BRICS summit: Europeans, Russians, Chinese, Indians, Brazilians and South Africans really are the required and sufficient forces to rebuild a global governance adapted to the XXIst century[22]. The big question is, of course, whether they will be able to do it between 2012 and 2017, using the “window of opportunity” identified by Franck Biancheri in his book “The World Crisis: The Path to the World Afterwards“. Otherwise, a wonderful opportunity will have been wasted and the world, BRICS included[23], will fragment into opposing regional blocs.

The significant convergence on many key issues concerning global governance and the major global challenges of the coming decades

It is, therefore, this historic potential, as well as the clear tactical (Eurozone periphery debt crisis) and strategic (trade, investment, research[24]…) interests which determine the agenda for the future Euro-BRICS summit. The latter, far from initiating a process of cooperation, will only formalize at the highest level an already marked reality in almost all sectors. On the occasion of the first Euro-BRICS seminar which focused precisely on this issue of the agenda, the following nine key points were identified:

  1. Reforms of world governance (IMF, Security Council[25], WTO, World Bank,…) in order to adapt these institutions (their methods as well as their management structures) to the XXIst century
  1. Reform of the international monetary system (putting in place a system managing several reserve currencies, global cohesion for the monetary and financial system, better analysis of global systemic risk…)
  1. Reform of the global management of the « Trade and investment » duo (rebalancing of the rules protecting national markets)
  1. Initiatives for a world social balance (determined integration of the social dimension, domestically and externally, in major international agreements)
  1. 5.               Initiatives to reinforce « Human security » (protection from natural disasters, trafficking in human beings, assuring humans’ basic needs, food chain security…)
  1. 6.               Initiatives to reign in world finance (limitation on pay and bonuses for financial activities, control of international financial flows…)
  1. 7.               Creation of Euro-BRICS university exchange programmes
  1. 8.               Scientific and technological cooperation, especially in the fight against global warming, the conquest and management of outer space, the sources of new and alternative energy
  1. 9.               Improvement in the global management of people’s migration and mobility

 

These issues are all undeniably important in order to organize the world in a sustainable fashion after the crisis. However, several of them would be immediately discarded or emptied of their substance via the framework of summits like the G20 because their effective treatment (that’s to say, leading to real solutions and not statements of intent) requires the ability to analyze them without taking into account the conflicting interests of some countries that benefit in a way from the current malfunctioning[26], or to be able to overcome some systematic vetoes on certain issues[27]. Without doubt, many topics will engender strong opposition between Europeans and BRICS; but it is also why it should be discussed, bearing in mind that to solve a problem one must first agree on its existence[28].

To conclude, remember that the Euro-BRICS’ potential would be sufficient to generate an irresistible momentum at the heart of the G20, an institution now sinking in impotence through the inability to “call a spade a spade” and unable to put the key issues of global world governance after the crisis on the summits’ agenda.

This future Euro-BRICS summit will allow the peaceful “untying of the Gordian knot” otherwise, a few years later, it will anyway, but much more violently. Remember, in conclusion, that the LEAP/E2020 team is convinced that “history doesn’t repeat itself” and that it’s essential to use the historic window of opportunity which is open in front of us for the next four or five years.

 

Notes

[1] See GEAB N°55

[2] The latter were only observers via their diplomats

[3] See the programme and the participants on the Europe2020 website.

[4] Even the US-EU summits are of no interest to anyone since nothing of interest is discussed there. Once regular summits, they have become “summits when necessary” since the “incident” in Madrid in 2010 that saw Barack Obama “snubbing” his European counterparts. Since then one can’t say that need has increased these meetings, on the contrary. Source: EUObserver, 03/27/2010

[5] At least during the preparation of the first Euro-BRICS summit (2011-2013). Then, the summit having become inevitable, it is highly likely that the entire EU (including the UK) rushes to “be there”.

[6] Or a female president.

[7] Of which the German-French-Russian summits of these last two years is a forerunner. With the current idea of involving Poland (a future Euroland member), these could easily serve as a matrix for the future Euro-BRICS summit.

[8] And even if some most openly Atlanticist parties came to power in Spain, Portugal or Greece, the vital nature of Chinese purchases of their government debt will be a major imperative for them joining in a Euro-BRICS logic.

[9] The European Central Bank, which knows just how much the BRICS support is necessary for the Euro, currently and in the future, will be part of this core.

[10] Source: Le Figaro, 12/28/2010

[11] But the diplomatic ineffectiveness of the tool in question condemns it to having virtually no impact on the issue.

[12]  We should never forget that, when one wants to anticipate European choices, it’s almost always commercial choices: the five hundred year period which we are now leaving, that of European global expansion, was first conditioned by commercial choices. Politics, religion, civilization were always far behind this decisive motivation. The historical period which is beginning will follow the European’s same basic impulse.

[13] It is indeed very different from the pre-2008 context, from which most of the current major European leaders have come. At the time, economic circles only had eyes for the United States and its “economic and financial miracle”.

[14] Since 2008 the BRICS have established a real system of meetings at different levels on a growing number of subjects: Ambassadors to the Security Council, Ministers of Foreign Affairs and, since the Sanya BRICS summit, also regular meetings of Health, Agriculture and Finance ministers, and officials in charge of National Security, … not to mention the launching of a twinning towns programme; and finally, the creation of new study centres specialized in the BRICS in several universities.

[15] It is interesting to read this Vienna Institute for International Economic Studies (WIIW) report on EU-BRIC trade relations of September 2009 using 2007/2008 figures. While the BRICS concept had hardly made its entry in academic circles, the importance of BRICS trade relations was already being stressed.

 

[16] The April 2011 Sanya summit has thus been the first BRICS summit to benefit from major Western press coverage.

[17] The rapid growth of intra-BRICS trade is a practical example of this process. Source: Business Standard, 04/15/2011

[18] A semi-membership mixed with a partial rejection, a legacy of the colonial period.

[19] Provided you have something interesting to say … which is precisely the undoubted added value of Euro-BRICS cooperation. Euroland and the BRICS can topple all the majorities in all the international institutions! This is far from being a detail as one can easily imagine.

[20] Therefore the world’s largest sustainable financing capacity.

[21] A reminder: early 2006, LEAP/E2020 identified the creation of the Euro as the decisive factor that would allow a shift from the well-defined post-1945 world.

[22] In order to understand the strategic scale of this Euro-BRICS cooperation, it is worthwhile reading the excellent work of Iulia Monica Oehler-Sincaï in the May 2011 edition of the Romanian Journal of European Affairs.

[23] Indeed we shouldn’t forget that many of the BRICS countries have strategic interests that can become controversial depending on the global context, more or less confrontational: Russia and China have a major geopolitical issue over Siberia and its riches, India and China experience chronic border tensions; Brazil and Russia, producer countries on the one hand, China and India consumer countries on the other can have very different objectives in terms of commodity prices,… The BRICS concept thus has a basic need of a global context of cooperation in order to develop. Another factor which militates in favor of a strong Euro-BRICS cooperation; Europe being a player which traditionally fosters international cooperation.

[24] In this regard, the recent health crisis over food in Germany has provided a stunning example of the rapid development of cooperation between Germany and China: it’s thanks to cooperation with a Chinese laboratory that the sequencing of the incriminating bacteria has been possible. Not long ago, the German researchers’ partner would have had to have been American. Source: China Daily, 06/03/2011

[25] A Euro-BRICS cooperation could help Europe finally understand that it can no longer avoid getting one common seat at the Security Council. That’s also what the “world after the crisis” is about.

[26] This is the familiar problem of the impossibility of implementing serious reform of global financial and monetary system as long as the US and the UK block any attempt to revise the assumptions on which the current system is based which, however, date from an era which is in the process of coming to a close.

[27] The social theme is typical of this category since the United States consistently opposes considering the social issue as anything other than collateral damage of an economic and financial rationale. Well, on this subject, the BRICS undeniably have a growing convergence with the European model that attempts to address the social question as the other side of the economic coin.

[28] It’s almost always the refusal by some players to recognize the existence of a problem that causes the deadlock in negotiations; not the difficulty in resolution once it’s identified.