EUROPEAN UNION (EU)

The European Union (EU) is a unique partnership in which member states have pooled
sovereignty in certain policy areas and harmonized laws on a wide range of economic and
political issues. The EU is the latest stage in a process of European integration begun after
World War II, initially by six Western European countries, to promote peace, security, and
economic development. The EU currently consists of 28 member states, including most of the
formerly communist countries of Central and Eastern Europe. The EU is largely viewed as a
cornerstone of European stability and prosperity.

For much of the last decade, however, many EU countries have faced considerable economic
difficulties. Despite an improved economic situation in the EU since 2017, economic
pressures and societal changes have contributed to the rise of populist and antiestablishment
political parties, at least some of which harbor anti-EU or “euroskeptic” sentiments.

Such trends have complicated the EU’s ability to deal with multiple internal and external
challenges. Among the most prominent challenges are

the pending departure of the United Kingdom (UK) from the EU (“Brexit”);

 democracy and rule-of-law concerns in Poland, Hungary, and other EU members;

 migration and related societal integration concerns;

 a resurgent Russia; and

 a heightened terrorism threat

1. As noted previously, UK voters decided in favor of a British exit from the EU (or
“Brexit”) by a relatively narrow margin of 51.9% to 48.1%. Several factors heavily
influenced this outcome, including economic dissatisfaction (especially among older
and middle- to lower-income voters), fears about globalization and immigration, and
anti-elite and antiestablishment sentiments. The “leave” campaign appears to have
successfully capitalized on arguments that the UK would be better off if it were free
from EU regulations and from the EU principle of free movement, which had led to
high levels of immigration to the UK from other EU countries.
EU leaders maintain that “the Union of 27 countries will continue,” 15 but the
departure of a member state is unprecedented in the EU’s history. Brexit will have
political and economic repercussions for both the UK and the EU. The UK is the EU’s
second-largest economy and a key diplomatic and military power within the EU.
Along with Germany and France, the UK has long been viewed as one of the EU’s
“big three” and has served as a key driver of certain
2. EU initiatives, especially EU efforts to forge more common foreign and security
policies.
Concerns have grown over the last few years about what many EU officials and
observers view as democratic backsliding in some member states, particularly Poland
and Hungary. EU leaders and civil society organizations have criticized both countries
 for passing laws and adopting policies that appear to conflict with basic EU values
and democratic norms. Over the past year, however, EU concerns have continued to
mount and both Poland and Hungary are now subject to Article 7 proceedings—an
infringement process outlined in Article 7 of the Treaty on European Union for
member states accused of violating EU fundamental rights. Ultimately, Article 7
could lead to a loss of a country’s voting rights in the Council of Ministers. The
European Commission initiated Article 7 proceedings against Poland in December
2017, and the European Parliament triggered Article 7 against Hungary in September
2018.
3. Over the last few years, Europe has experienced significant migrant and refugee flows
as people have fled conflict and poverty in Syria, Iraq, Afghanistan, Africa, South
Asia, and elsewhere. According to the United Nations, more than 1 million refugees
and migrants reached Europe by crossing the Mediterranean Sea in 2015, roughly
363,000 did so in 2016, over 172,000 in 2017, and over 105,000 thus far in 2018. 21
Greece and Italy have been major arrival and transit points, and Spain has seen an
uptick in arrivals since 2017. Many refugees and migrants are eager to travel onward
to northern EU member states. Germany and Sweden traditionally have been
preferred final destinations due to their strong economies and perceptions that they are
more likely to grant asylum and provide better welfare benefits. During the height of
the migrant and refugee flows in 2015, various EU initiatives to manage the crisis
proved largely unsuccessful. The EU has faced considerable criticism for lacking
coherent, effective migration and asylum policies, which have long been difficult to
forge because of national sovereignty concerns and sensitivities about minorities,
integration, and identity. Despite the overall reduction in migrants and refugees
currently seeking to enter Europe, the influxes continue to have significant political
and societal ramifications for the EU. These include the following:
4. Like the United States, the EU has been forced to reconsider its relationship with a
more assertive Russia and the implications for European security and stability. The
EU has sought to support Ukraine’s political transition, condemned Russia’s
annexation of Crimea in March 2014, and strongly urged Russia to stop backing
separatist forces in eastern Ukraine. The EU has worked both to engage Russian
President Vladimir Putin in promoting a political solution to the conflict in Ukraine
and to impose a series of sanctions on Russia (including those targeting the financial,
energy, and defense sectors of the Russian economy).
5. European governments and the EU are alarmed by the Islamic State terrorist
organization’s connections to and influence in Europe. Many recent terrorist incidents
in Europe—including the November 2015 attacks in Paris and the March 2016
bombings in Brussels—were carried out by European citizens who had trained and/or
fought with the Islamic State in Syria or Iraq. Experts believe that the Islamic State
may have steered the Paris and Brussels attacks from Syria. The May 2017 suicide
bombing at a music concert in the UK—carried out by a young British citizen of
Libyan descent—raised concerns that the Islamic State also could be seeking to direct
attacks from Libya, given the group’s presence and activities there
NATO CHALLENGES

NATO is an alliance of 28 countries bordering the North Atlantic Ocean. It includes the
United States, most European Union members, Canada, and Turkey. NATO is an
acronym for the North Atlantic Treaty Organization.

Purpose

NATO's mission is to protect the freedom of its members. Its targets include weapons of
mass destruction, terrorism, and cyber attacks.

Despite all the twists and turns of our recent history, the North Atlantic Treaty Organization
has reached its 70th anniversary. It has even found a new lease of life as the defender of
European territory against a revisionist Russia. Expect many celebratory statements in the
coming days about the enduring transatlantic bond, with NATO as its cornerstone.

And yet, as the Alliance looks to the future, how will it deal with some of the most
consequential shifts and threats that are already on the horizon? Here are some of the most
important challenges that NATO will need to navigate if it is to celebrate its centenary with
the same vigour.

A changing European defence

Europe has finally woken up to the need to treat defence seriously. National defence budgets
are on the rise across all member states after decades of cuts. Yet more than 30 years of
neglect, preceded by an assumed reliance on the United States during the Cold War, cannot
be fixed in just a few years.

The fact that Germany – the one power that can truly swing European defence because of the
sheer size of its GDP – is still lagging far behind on its spending commitments is a case in
point. But the recovery of European defence capabilities is undoubtedly in the works. The
European Commission has committed billions of euros to help boost such capabilities.

France is putting forward a new European defence and security treaty, and multiplying
initiatives to strengthen the European operational culture. The question in the coming years
will not be whether Europeans will do more, but along what lines they will do it. Behind each
new announcement or initiative lurk different visions: the federalist one that espouses a fully
integrated defence under an EU framework as the only way forward; the atlanticist one that
still considers NATO as the one and only place for European defence initiatives; and a more
intergovernmental approach that bypasses collective structures to work in ad hoc coalitions.

European defence often ends up being pulled in different directions, resulting in a capability
that is less than the sum of its parts. NATO will need to be careful not to discourage
European initiatives, which can ultimately bring more resources and capabilities to bear, but
avoid hollowing itself out in the process.

One red line for NATO will be if European member states start to consider some form of
collective defence guarantees, something President Emmanuel Macron of France alluded to
in his pan-European article. This is very much a long shot, but it would undoubtedly strike at
the heart of NATO’s mission and call for a more fundamental re-adjustment of its tasks.

The new art of security

It is an irony of history that NATO has been given a new lease of life by returning to its
original mission – assuring the territorial defence of Europe. The deterrence measures taken
since Russia’s war in Ukraine in 2014 would have been unthinkable years before. Yet the
paradox is that NATO is responding with conventional measures to Russia’s unconventional
playbook.

Indeed, in vulnerable nations such as Ukraine, Georgia or even Syria, where it does not shy
away from flexing its military muscles, Russia has employed less conventional means, often
described as ‘hybrid’ measures, against NATO allies. These range from using chemical-grade
weapons for targeted assassinations, cyber attacks, disinformation and election meddling, to
military shows of force in the Baltic and North Atlantic regions.

While Russia draws on its ‘digital’ playbook, NATO sticks to a broadly analogue approach:
planning, command structure, troop deployment and, more often than not, long negotiations.
Its response following the Salisbury attack was a pertinent demonstration of the difficulty for
the Alliance in responding to unconventional attacks.

The European Union is in fact better equipped to be the first responder in many of these
unusual scenarios, yet it often lacks a strong mandate to do so. When it comes to tackling
election meddling, for example, the responsibility rests with European member states, even
for European elections. Hence NATO’s dilemma – how can it be a credible collective
defence organisation when the threats cut across military and civilian domains? Closer
coordination between NATO and the EU is encouraging, but few people believe that in the
face of a major emergency the two organisations could coordinate effectively on a robust set
of responses.

A new age of strategic instability

The strategic squeeze comes not just from unconventional threats, but also from an
amplification of highly sophisticated ones. This starts with the risk of a new missile race in
Europe with Russia breaking away from the Intermediate-Range Nuclear Forces Treaty,
which until now kept ground-launched cruise missiles away from the European territory.
Beyond trying to hammer out a common position, NATO can do little but sit and watch a
possible sophisticated arms race on its territory.

Space is also becoming an increasingly competitive domain, both with new private players
but also states flexing their technological muscles. If China’s 2007 anti-satellite test was a
wake-up call for many, a similar test by India recently confirmed a new reality: space is fast
becoming a domain where global and regional powers signal their military ambitions. If
NATO uses satellite and space capabilities, mostly for reconnaissance, it does so as a
customer rather than a fully fledged player. The EU, which does play a greater role in space,
also faces the problem of a highly fragmented European space sector with no less than seven
European satellite consortia. It might be time for NATO to look at space as a growing
operational domain and devise a clearer posture, as it is attempting to do with cyber.

The China factor

While NATO seeks finally to get a grip on containing a state power such as Russia, another,
namely China, emerges to pose a new, more complex threat. The Obama administration’s so-
called ‘rebalance to Asia’ triggered much soul-searching at the time among European allies
about what China meant for NATO. This was all put on hold after Russia’s aggression in
Ukraine when NATO’s focus returned closer to home.

But as I warned NATO HQ at the time, if NATO did not go to the Asia-Pacific, the region
would come to NATO. Developments over the last few years, under the all-powerful Chinese
leader Xi Jinping, only serve to confirm this. China has now become a significant question
mark for NATO on at least three levels: an expanding military posture in the Indo-Pacific and
a more assertive presence in Africa and the Middle East; an economic and technological
footprint that threatens Europe’s own industrial and technological base; and a growing great
power play between Washington DC and Beijing, with Europe caught in the middle.

Beyond the efforts of the small handful of Allies that are actively engaged in Indo-Pacific,
NATO’s approach to China is limited to low-key dialogue and some statements of concern
about the militarisation of South China Sea island features. Working more closely with like-
minded partners such as Japan or Australia, could be an effective way to better manage the
China factor.

Trump after Trump

But the greatest challenge facing the Alliance strikes at its heart – ensuring that the US stays
engaged. The relationship between the US and Europe had begun to shift long before
President Trump began to play his love-hate theatrics with the Alliance. The tension goes
beyond political orientations or styles of leadership and speaks to something more profound:
the American public is increasingly reluctant to expand US power abroad and even more so
as part of an alliance with Europe that is seen as a relic of the past.
For Washington, Europe represent its closest group of like-minded countries, but emotional
ties are changing in the same way that US demographics are shifting. One can denounce or
deny this long-term trend, but NATO must work out how to recast the partnership between
the US and Europe without the former viewing it merely in transactional terms and the latter
indulging in anti-American posturing.

Avoiding irrelevance or dilution

The five challenges above are daunting, long-term shifts, for which NATO’s traditional tool
box is of little use. Ignoring or papering over them with reassuring statements will risk
reducing the Alliance to an institutional irrelevance. However, pretending to be all things to
all problems will also dilute what the Alliance is about.

In the end, NATO’s long-term health will depend on whether future US and European leaders
can agree the terms of a new partnership. But this can happen only once the Trump storm has
passed. At 70, the Alliance has yet to address some of its greatest challenges.