Trans-Atlantic Scorecard – January 2019

Welcome to the second edition of the Trans-Atlantic Scorecard, a quarterly evaluation of U.S.-European relations produced by Brookings’s Center on the United States and Europe (CUSE), as part of the Brookings – Robert Bosch Foundation Transatlantic Initiative. To produce the Scorecard, we poll Brookings scholars and other experts on the present state of U.S. relations with Europe—overall and in the political, security, and economic dimensions—as well as on the state of U.S. relations with five key countries and the European Union itself. We also ask about several major issues in the news. The poll for this edition of the survey was conducted January 7-10, 2019. The experts’ analysis is complemented by a Snapshot of the relationship over the previous four calendar months, including a timeline of significant moments, a tracker of President Trump’s telephone conversations with European leaders, figures presenting data relevant to the relationship, and CUSE Director Thomas Wright’s take on what to watch in the coming months.

Snapshot

Timeline

September 5

Prime Minister May identified 2 GRU agents as suspects in the poisoning of Sergei and Yulia Skripal in Salisbury and said the operation was “almost certainly” approved at a “senior level of the Russian state.”

September 6

Leaders of France, Germany, the United States, Canada, and the United Kingdom backed the British assessment in the Skripal case with “full confidence” in a joint statement.

September 9

Sweden’s general elections prove inconclusive, with the Social Democrat-led governing coalition losing support but winning one seat more than the Moderate-led Alliance coalition, and the far-right Sweden Democrats winning 17.5 percent of the vote. No new government has formed by the end of 2018, with Stefan Löfven staying on as prime minister in an acting capacity.

September 12

The European Parliament voted to censure Hungary for threats to democracy and rule of law and begin the Article 7 sanctions procedure, which could ultimately strip Budapest of EU voting rights. 448 MEPs voted in favor (including a majority from the European People’s Party, of which Hungarian Prime Minister Viktor Orbán’s Fidesz is a member), with 197 against and 48 abstaining.

September 12

President Trump signed an executive order establishing a framework for imposing sanctions on foreign individuals over interference in U.S. elections.

September 18

President Trump met with Polish President Andrzej Duda, who stated in their joint press conference that “I would very much like for us to set up permanent American bases in Poland, which we would call ‘Fort Trump.’”

September 20

Prime Minister May’s Chequers proposal for Brexit was largely rejected by EU leaders in a summit in Salzburg. May warned that the United Kingdom has also been preparing for a “no deal” Brexit after European Council President Donald Tusk flatly told her that her Brexit plan “will not work.”

September 20

U.S. Vice President Mike Pence met with Macedonian Prime Minister Zoran Zaev in Washington to express support for the Prespa Agreement between Macedonia and Greece, which will change Zaev’s country’s name to North Macedonia, and discuss the next steps in its implementation.

September 24

Presidents Macron and Trump hold bilateral meeting in New York.

September 25

President Trump delivered an address to the 73rd Session of the UN General Assembly in which the dominant theme was a defense of sovereignty coupled with sharp criticism of “global governance.” Trump reaffirmed the Monroe Doctrine, called for equitable trade, and announced that the United States will revise its foreign aid policy to only give “to those who respect us and, frankly, are our friends.”

September 25

President Macron delivered an address to the UN General Assembly which sharply contrasted with Trump’s, in which he argued the “path of unilateralism leads us directly to withdrawal and conflict, to widespread confrontation between everyone, to the detriment of all – even, eventually, of those who believe they are the strongest.”

September 26

President Trump and Prime Minister May hold bilateral meeting in New York.

September 27

The Italian coalition government unveiled its first budget, which set a deficit target of 2.4 percent of GDP for 2019, three times the 0.8 percent forecast of the previous government and higher than many analysts expected the European Commission would accept given Italy’s debt burden, the second highest in the eurozone at 131 percent of GDP.

September 30

Macedonian voters approved the controversial change of the country’s name in a referendum. With opponents boycotting the vote, the measure saw 91 percent in favor on a turnout of just 37 percent, and both supporters and opponents claimed victory.

September 30

The United States and Canada reached agreement on a renegotiation of NAFTA, the United States-Mexico-Canada Agreement (USMCA), several weeks after the United States and Mexico came to a deal and just before the Trump administration’s deadline.

October 2

Jamal Khashoggi, a journalist critical of Saudi Crown Prince Mohammed bin Salman, was killed by Saudi government operatives in the Saudi consulate in Istanbul.

October 3

President Putin signed into law an unpopular bill which will raise the retirement age in Russia by five years.

October 4

The United States indicted seven Russian military intelligence officers for allegedly hacking into a number of international organizations, including FIFA, anti-doping agencies, and the Organisation for the Prohibition of Chemical Weapons.

October 7

Bulgarian TV journalist Viktoria Marinova was found raped and murdered in Ruse, a week after hosting a broadcast on alleged fraud related to EU funds. Marinova was the third journalist killed in the EU in less than a year.

October 9

U.S. Ambassador to the United Nations Nikki Haley announced she will step down at the end of the year.

October 10

President Macron and Dutch Prime Minister Mark Rutte announced an agreement to unite Macron’s La République En Marche! with the liberal-centrist Alliance of Liberals and Democrats for Europe group for the May 2019 European Parliament elections. The new coalition will reportedly campaign around a common platform and seek to challenge the dominance of the conservative European People’s Party.

October 12

Andrew Brunson, an American pastor, was freed from house arrest in Turkey and left the country. Imprisoned since October 2016 on allegations that he was linked to groups involved in the July 2016 failed coup, Brunson’s detention had been a major source of tension between Washington and Ankara, with Washington imposing Global Magnitsky sanctions on two Turkish government ministers in August.

October 14

Elections in the German state of Bavaria saw the Christian Social Union, sister party to Chancellor Merkel’s Christian Democratic Union, lose the absolute majority it has held almost continuously since the 1960s. The big winners were the Greens, who finished second with 17.6 percent of the vote, and the Alternative for Germany, which entered the state parliament for the first time with 10.2 percent.

October 17

U.S. Secretary of State Mike Pompeo met President Erdoğan in Ankara to discuss the Khashoggi killing after meeting with senior Saudi officials in Riyadh. Pompeo stated that the Saudis had promised accountability and stressed that the U.S. government has to be mindful of the importance of U.S.-Saudi relations as it responds to Khashoggi’s killing.

October 17

A European Council summit in Brussels which had been expected to be the “moment of truth” for the Brexit deal made little progress with the Irish border remaining the sticking point.

October 20

President Trump announced his intention to withdraw the United States from the Intermediate-Range Nuclear Forces (INF) Treaty with Russia, arguing that Russia had violated the agreement for years (a U.S. government assessment since 2014). Signed in 1987, the treaty was a Cold War success story that resulted in the destruction of 1,846 missiles by the Soviet Union and 846 missiles by the United States.

October 23

After meeting with President Putin in Moscow, U.S. National Security Adviser John Bolton confirmed that the United States will withdraw from the INF Treaty. In addition to arguing that Russia had long been violating the treaty, Bolton said INF was a “bilateral treaty in a multipolar ballistic missile world” as powers like China had created a “new strategic reality.”

October 23

The European Commission rejected Italy’s budget proposal, citing “particularly serious non-compliance” with its recommendations. The Italian government defended its position, with Deputy Prime Minister Luigi De Maio claiming “No surprise: This is the first Italian budget written in Rome and not in Brussels!”

October 25

The largest NATO military exercise since the Cold War, Trident Juncture 2018, began in Norway. Involving 65 ships, 250 aircraft, 10,000 vehicles, and 50,000 troops, the exercise served to test NATO’s ability to provide reinforcements both on sea and on land in response to a hypothetical invasion of Norway and the invocation of Article 5.

October 27

In a quadrilateral summit on Syria held in Istanbul, Chancellor Merkel and Presidents Erdoğan, Macron, and Putin produced a joint statement calling for a political solution with constitutional reform “paving the way for free and fair elections.”

October 28

Germany’s governing Christian Democratic Union and Social Democratic Party both lose ground in regional elections in Hesse.

October 29

Following previous day’s losses in Hesse, Chancellor Merkel announced she would step down in December as head of her party and not seek a fifth term as chancellor in 2021.

October 31

Austrian Chancellor Sebastian Kurz announced that Vienna will not sign the United Nations’ Global Compact for Safe, Orderly and Regular Migration, already opposed by Hungary and the United States. Kurz argued the pact mixes up asylum seekers and economic migrants and could lead to “a human right to migration.” Following Austria’s move, some other European countries including Italy, Poland, the Czech Republic, and Slovakia also decided against signing the pact.

November 6

In U.S. midterm elections, the Democrats captured 40 Republican-held seats to take control of the U.S. House of Representatives after eight years in opposition and captured several governorships, while the Republicans slightly increased their Senate majority. The 116th Congress is expected to pass little legislation, with the Democratic House acting as a check on President Trump via its oversight power and reasserting Congressional power on U.S. foreign policy.

November 6

In an interview with Europe 1 radio, President Macron called for “a true European army” to reinforce Europe’s capacity to defend itself “without relying only upon the United States.”

November 8

The European People’s Party announced that its leader in the European Parliament for the past five years, Manfred Weber of the Bavarian Christian Social Union, will be its Spitzenkandidat to lead the European Commission after the May 2019 European elections. Weber defeated former Finnish Prime Minister Alexander Stubb for the nomination.

November 9

President Trump flies to France for celebrations of the centenary of the World War I armistice.

November 11

In a speech on the Armistice centenary, President Macron called on assembled leaders not to forget the lessons learned from four bloody years of conflict and painted nationalism as a “betrayal of patriotism.”

November 13

In a speech to the European Parliament, Chancellor Merkel said that “Europe is our best chance for lasting peace, lasting prosperity, and a safe future” and called on Europeans to take their fate into their own hands. Among other points, she advocated the streamlining of European defense and security policy through a European Security Council and echoed President Macron’s call from the prior week for the creation of a European army to “complement NATO.”

November 13

Responding to President Macron’s calls for a more sovereign European defense capacity, President Trump tweeted: “Emmanuel Macron suggests building its own army to protect Europe against the U.S., China and Russia. But it was Germany in World Wars One & Two – How did that work out for France? They were starting to learn German in Paris before the U.S. came along. Pay for NATO or not!”

November 14

Prime Minister May won the support of her divided cabinet for her Brexit deal with the EU after negotiations concluded.

November 15

Four ministers resigned from Prime Minister May’s government in protest over her Brexit deal, including Secretary of State for Exiting the European Union Dominic Raab, whose predecessor David Davis had also resigned over May’s approach.

November 25

The Russian coast guard, part of the FSB, fired upon and seized three Ukrainian naval vessels as they attempted to transit the Kerch Strait from the Black Sea to the Sea of Azov en route to the Ukrainian port of Mariopol. Six sailors were injured and 24 were detained by Russia. The following day, the Ukrainian parliament voted to introduce martial law in the areas bordering Russia for a period of 30 days.

November 25

At a special European Council summit, European leaders endorsed the negotiated Brexit deal. With the real battle over Brexit looming in the House of Commons, the unity showed by members of the EU27 was noteworthy compared to the clear division within Britain and its government.

November 30

Former U.S. President George H. W. Bush, who managed the end of the Cold War, died in Houston. Chancellor Merkel expressed her country’s gratitude for Bush’s support for German unification, stating at the G20 that as an East German, “without the results of his policies” she “would hardly be standing here,” and traveling to Washington for the funeral.

December 1

The G20 summit in Argentina ended with a final communiqué that reflected the sharp divide between the United States and its European allies on global trade, migration, and climate change. Among other developments, all participants agreed to pursue WTO reform, with the goal of discussing the issue at next G20 in Osaka, Japan in June 2019.

December 1

Thousands of demonstrators from the “Gilets Jaunes” movement gathered in Paris to protest President Macron’s proposed gas tax increase. The protests became violent as French police used tear gas and protestors responded by throwing rocks and setting cars on fire. In total, 260 people were detained and at least 95 injured.

December 3

Central European University (CEU) announced that it will leave Budapest and move to Vienna, after Hungary passed a law requiring foreign-accredited institutions to have a campus in their home country and its government refused to sign an agreement with the State of New York. Prime Minister Viktor Orbán has long attacked CEU and its founder George Soros as political opponents.

December 3

Far-right anti-immigrant party Vox won 11 percent of the vote and 12 seats in elections for Spain’s largest region, Andalusia. Spain had been one of the last countries in Europe where far-right parties have not had a national or regional parliamentary presence.

December 4

Prime Minister May launched five days of parliamentary debate on her Brexit deal. MPs passed an unprecedented resolution holding the government in contempt for refusing to publish the attorney general’s legal advice to the Cabinet on the agreement.

December 4

In a speech in Brussels, Secretary of State Mike Pompeo pushed back sharply against European criticism of President Trump’s foreign policy, claiming that President Trump was “returning the United States to its traditional, central leadership role in the world.” In separate remarks at NATO headquarters, Pompeo gave Russia 60 days to correct its alleged violations of the INF Treaty or the United States would leave the agreement.

December 5

President Putin said Russia would “respond appropriately” to a U.S. withdrawal from the INF Treaty and match Washington if it produces short- and medium-range missiles.

December 5

The European Commission announced a plan to increase the role of the euro in global transactions generally and in the energy sector in particular. The Commission presented the use of the dollar by European businesses as exposing businesses to “currency risks and political risks, such as unilateral decisions that directly affect dollar-denominated transactions.”

December 7

At the CDU party conference, Annegret Kramp-Karrenbauer (widely referred to as AKK and perceived as Chancellor Merkel’s preferred successor), the secretary-general of the CDU and former Minister President of Saarland, was elected as the new leader of the party.

December 10

Prime Minister May postponed a House of Commons vote on her Brexit deal which was scheduled for the next day as it was apparent she lacked the votes for approval, increasing the potential for a “no deal” Brexit on March 29, 2019. The European Court of Justice ruled the same day that Britain has the legal power to unilaterally stop Brexit by revoking its invocation of Article 50, the exit clause of the Treaty on European Union.

December 11

In a televised address in response to the “Gilets Jaunes” protests, President Macron apologized to the French people for not having reacted quickly enough to “malaise” in French society and announced an increase in the minimum wage.

December 12

Prime Minister May survived a vote of confidence mounted by members of her own Conservative Party over her Brexit deal in a 200-117 vote, after promising not to stand for reelection. While May became immune from a leadership challenge for the next year, the chances that she can win parliamentary approval for her Brexit deal appeared increasingly slim.

December 19

The Italian government lowered its planned 2019 budget deficit to 2.04 percent of GDP in a deal with the EU.

December 19

President Trump announced the withdrawal of U.S. troops from Syria, claiming that ISIS had been defeated. French Defense Minister Florence Parly disputed that claim. “Daesh has not been struck from the map,” she tweeted, “nor for that matter has its roots, it is essential to militarily and decisively defeat the remaining pockets of this terrorist organization.”

December 20

U.S. Secretary of Defense Jim Mattis resigned effective at the end of February, stating in a letter to President Trump, “My views on treating allies with respect and also being clear-eyed about both malign actors and strategic competitors are strongly held and informed by over four decades of immersion in these issues. We must do everything possible to advance an international order that is most conducive to our security, prosperity and values, and we are strengthened in this effort by the solidarity of our alliances. Because you have the right to a Secretary of Defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my position.”

December 23

President Trump announced that Deputy Secretary of Defense Patrick Shanahan would become Acting Secretary of Defense on January 1.

Europe on the line

Tracking President Trump’s reported phone conversations with European leaders.   Between September 1 and December 31, 2018, President Trump spoke on the phone with Turkish President Erdoğan six times (October 21, November 1, November 16, November 28, December 14, December 23), French President Macron once (October 21), and U.K. Prime Minister May once (November 9). He last spoke on the phone with German Chancellor Merkel on August 27 and with Russian President Putin on March 20.     We track Trump’s phone calls with the leaders of France, Germany, Russia, Turkey, and the United Kingdom, whether they have spoken or not, as well as other calls with European leaders of which we are aware. The White House stopped releasing readouts of the president’s calls with foreign leaders in July 2018. If we’ve missed a conversation, please give us a ring. Source: whitehouse.gov, elysee.fr, bundeskanzlerin.de, gov.uk, en.kremlin.ru, tccb.gov.tr/en, press reports.

Figures

U.S. Exports of LNG to Europe   The Trump administration has made increasing U.S. energy exports – in particular of liquefied natural gas (LNG) – a cornerstone of its trade policy. In a speech in 2017, President Trump announced that a goal of his administration would be not only “American energy independence,” but also “American energy dominance.”   Thirteen of the 28 EU member states import LNG. In 2017, European imports of LNG amounted to 5.1 billion cubic feet per day and accounted for 13 percent of the global total. The United States provided a small (4 percent), but rapidly growing, portion of the total LNG imported by the EU. The goal of U.S. LNG exports is not to replace other providers, but to allow for more competition in a sector currently dominated by Russia. The Trump administration’s criticism of the Nord Stream 2 pipeline between Russia and Germany, which Chancellor Merkel has defended as “purely economic,” stems from the potential that Russian imports bring Russian political influence to Berlin and harm the interests of Ukraine and other U.S. partners and allies.  

  Diversification of European energy sources away from a heavy reliance on Russia has been a U.S. foreign policy objective since the George W. Bush administration at least, and President Trump’s efforts to promote LNG exports to Europe represent a continuation of this strategy. With the loosening of restrictions on U.S. energy exports in 2015-2016, U.S. exports of LNG rapidly increased, and the first shipment of U.S. LNG to Europe arrived in Poland in June 2017. A year later, the summit between President Trump and European Commission President Jean-Claude Juncker saw further agreements made by the EU to increase imports of U.S. LNG. After more than quadrupling from 2016 to 2017, U.S. exports of LNG to Europe look set to grow further as more capacity is constructed on both sides of the Atlantic.   U.S. and EU Trade in Goods with Iran   A principle carrot used to conclude negotiations on the 2015 Joint Comprehensive Plan of Action (JCPOA) aimed at restraining Iran’s nuclear program was the end of many restrictions on trade and investment with Iran. The subsequent thaw brought about by the JCPOA sparked hope among European businesses that trade relations with one of the Middle East’s largest economies, called by some observers “the last, large, untapped emerging market,” would improve after several years of intense multilateral sanctions. Some hoped that this economic opening would incentivize Iran to alter its other destabilizing behavior in the Middle East.   Europe has long had stronger trade ties with Iran than the United States does. The European Union is Iran’s third-largest trading partner, behind China and the United Arab Emirates. A fraction of this trade volume exists between the United States and Iran due to the comprehensive embargo on Iran that has been in place for more than 20 years – what trade does exist consists of exempted goods, such as food, pharmaceuticals, and medical devices. Yet because of the long divergence between the U.S. and Europe over how to approach Iran, the imposition of such a strenuous sanctions regime in response to the nuclear crisis stood as a testament to the potential of multilateral cooperation.  

  That cooperation is now history. The Trump administration’s decision to withdraw from the JCPOA and re-impose the sanctions it waived or suspended by or before November 4, 2018 leaves the United States and the EU on opposite sides of the issue. The EU is seeking to preserve the JCPOA by maintaining at least some of the economic benefits promised by the agreement, through special banking channels among other steps, while the United States seeks to ratchet up pressure on Iran to deter its nuclear ambitions and contain its influence in the wider Middle East. The U.S. sanctions have broad reach and their reimposition has already had a significant chilling effect on European trade and investment in Iran. Overall, the disparity in trade relations highlights the different approaches taken by the United States and Europe on Iran. U.S. policy towards Iran has largely sought to address security concerns through punitive measures, while Europeans have sought to address their security concerns through economic engagement.  

What to watch

Center on the United States and Europe Director Thomas Wright lays out events, issues, and potential developments to watch for in the months ahead.   I am delighted to share with you the second edition of the Trans-Atlantic Scorecard, a quarterly evaluation of U.S.-European relations produced by Brookings’s Center on the United States and Europe, as part of the Brookings – Robert Bosch Foundation Transatlantic Initiative.   2018 was the year in which President Trump replaced the so called “axis of adults” with people who would be more deferential to his wishes. This began with the replacement of Rex Tillerson with Mike Pompeo in March of 2018 and it ended in December with Jim Mattis’s resignation as Secretary of Defense on a matter of principle.   2019 is shaping up to be the year when we find out what Trump unbound is really like. Will he renew his threat to pull out of NATO? Will he reignite a trade war with the European Union? There is much to be anxious about and we can find this anxiety in abundance in the new edition of the scorecard. Scholars felt that the relationship had marginally deteriorated from September and they worried that Mattis’s departure would weaken NATO.   Looking ahead to the next quarter, NATO foreign ministers will gather in Washington, DC on April 4 to mark the alliance’s 70th anniversary. Normally, NATO would mark a significant anniversary with a leaders summit but European governments worried that such a meeting may have led Trump to create a new crisis about NATO’s future—better to work around him. If NATO is to have a 75th anniversary, it needs to give up the 70th. There is still some potential for Trump to intrude on the festivities and we’ll be watching that closely.   We’ll also be watching trade. Will the president impose new tariffs on the EU and is such a step made more or less likely by a U.S. – China trade deal? And, we’ll also be looking at Secretary Pompeo’s international conference on Iran which will be held in Warsaw in mid-February—how many European governments will participate and at what level?   Thank you for reading the Trans-Atlantic Scorecard.

Trans-Atlantic Scorecard maintained by Sam Denney, Filippos Letsas, and Ted Reinert. Additional research by Andrew Sanders and editing by Sarah Barth. Digital design and web development by Eric Abalahin, Yohann Paris, Rachel Slattery, and Cameron Zotter.