Sometimes, one can see history in the making, but one cannot yet see its direction. The generally unconstructive attitude of the Saakashvili regime towards Russia and its military attack on the breakaway province of South Ossetia, followed by an unnecessarily harsh Russian military response, brought a chill in the relationship between Russia and the European Union (EU), just at the moment that progress appeared possible on a new, comprehensive agreement. It was soon followed by a major crisis in financial markets, which started at and was largely caused by Wall Street, the center of the U.S. financial system, and which spread to Europe, causing much economic havoc.

As the British political economist John Gray has written, this financial crisis marks the end of one particular model of the market economy (the Anglo-American model of ‘free’ market capitalism) and the end of the U.S. unilateral dominance of global affairs. Great powers mostly end by a combination of war and financial debt, as shown in the previous century by the end of the British Empire and the Soviet Union. In the future, the U.S. too will be no more than one power among several others. Both events require thus careful thinking about the new opportunities arising worldwide and for future cooperation between Russia and the EU.

In order to avoid giving prominence to those with Cold War reflexes or an economic interest in a new arms race, one should take some distance from daily events and try a historic perspective. By innovative thinking about a future constructive relationship between Russia and the EU, based on trust and mutually beneficial cooperation, these crises can be turned into political and economic opportunities for both. It can also help to strengthen the position in global affairs for both.

It requires for the Europeans to accept that Russia, this great ancient civilization, will never be like themselves, just as they are learning that America is going a different way from theirs. However, some key features of the EU, such as its rule of law or its welfare system, will undoubtedly benefit the Russian people and the further growth of its economy. It requires for the Russians to realize that Europe, in the framework of the EU, has undergone fundamental changes which they should properly learn to appreciate. Rapprochement with the EU is possible without Russia giving up vital economic or security interests, because the EU is not what many in Russia seem to think it is. 

THE OLD, DANGEROUS BALANCE OF POWER

Throughout the past four centuries, various powers have sought domination of the economically and culturally rich European mainland, while one power with a special geographic position, Great Britain, usually tried to prevent it. The old Russia of Moscovia, still pre-occupied with controlling the Mongol threats, only in the 17th century could start building a modern state. Peter the Great turned to Europe for inspiration.

The permanent shifts in the balance of power were an indirect result of the Westphalian Peace Treaty (1648), which introduced the concept of the modern state, making every ruler sovereign within his realm. It succeeded to pacify Europe after the devastations of the religious wars, but it led the basis for new conflicts, because the relations between the new states were based purely on power, without the moral constraints of a superior authority, a role the Church had sought to play before, or the civilizing restrictions of the rule of law.

Political and economic systems are closely intertwined. Just like the feudal organization of society corresponded to the agricultural economy of the times, so the modern state, with its bureaucratic organization, provides the political frame for the emerging industrialization and increased trade. The interactions with technological innovation, made possible by science, and growing competition in open but regulated markets, brought more welfare for their populations as well as the emergence of a new, professional and industrial middle class.

The modernizations of Russia in the 17th and 18th centuries nevertheless left it with a primarily agricultural civilization until the late 19th century when industrialization and the emergence of a middle class took off, a bit later than in Western Europe, confronted as it was to the vicissitudes of the tsarist regime.

This middle class in Western Europe soon demanded to become involved in political decisions which affected its interests, leading first in Holland and England, then elsewhere in (Central, Northern and Western) Europe to the strengthening of parliaments. From advising the ruler, they achieved co-decision (over the annual budget and laws) until in the 19th century parliaments came to represent the sovereign people and they became the ultimate decision makers about all state affairs. In the early 20th century, the introduction of universal voting rights, involving farmers and workers, and later women, completed liberal democracy.

The new involvement of people in state affairs led to an important change in attitude. Until the 19th century, people had thought of themselves in religious, class or local terms. In just a couple of generations, their identity became now dominated by the new state, which was the source of their newly achieved economic welfare and personal freedoms. An emerging welfare state aimed to distribute the benefits from economic progress more equally. Germany and Sweden were among the countries leading the way towards social democracy. The governing and business elites thus could bind the population into loyalty through implementing both liberal and social democratic objectives. They promoted a new national identity feeling among the people through the universal education system and the new communication media (newspaper, radio and, much later, television).

Rational balance of power games, with limited warfare, became impossible now. It still remains beyond understanding how this civilized, well faring Europe, in August 1914, suddenly went to war. People had in mind a limited war, being home by Christmas, victorious. But technology had changed the paradigm of warfare at the same time as loyalty to the new nation state allowed mass mobilization. Europe and Russia suffered their first great economic and social-cultural devastation of modern times.

The revolutionary climate after the war, the collapse of the many a traditional regime, the successful coup d’état of the Communists in Russia, the growing strength of Communist parties in other countries, the spread of the American financial crisis of the 1930s to Europe, the resulting social misery, the Spanish civil war, all led to great fear among the middle and working classes for their future welfare. Economic and social instability provided a fertile ground for fascist and nazi regimes in several countries.

Another generation of Europeans was to suffer the calamities of war, made worse again by the advance of technology. Never before in history were so many citizens victimized, and never before were they so acutely aware of it, being brought up in the culture of Enlightenment and the belief in continuous economic and social progress and an ever better life for their families.

The time was ripe to seek to remedy the basic flaws which the Westphalian state organization had brought with it, inadvertedly because of the impossibility to foresee all economic, technological and political consequences of systemic changes.       

INNOVATIVE COOPERATION AMONG STATES

The process of West-European integration was a direct result of the devastations of the First and Second World Wars. There was a pressing need to create lasting peace between Germany and France and to rebuild the economy. It was now recognized that the modern, capitalist economy was driven by science and technology, as much as by capital and labor, and that it needed open markets to flourish. It was equally well understood that social stability is an essential prerequisite for business investments and economic growth and for preventing political adventurers coming to power. Business, trade union and political elites (from six countries to start with) united behind the idea of a new organization of politics and economy in Western Europe.

These twin objectives (peace and welfare) could only be achieved if two conditions would be fulfilled: there needed to be economic interdependence as never before in order to give companies the competitive markets which capital-intensive science and technology-based production required; and the absolute sovereignty of the nation states needed to be relativated by integrating them in a new system of joint governance and by imposing a rule of law on the member states. A new form of cooperation among states was designed by Jean Monnet, the French government official who initiated it: no longer based on international law, it became a supra-national organization in which the governments cooperated within the self-imposed rule of law. The EU has some characteristics of a federal system, but its originality is certainly that it leaves a greater role to the nation states.

The establishment of the predecessor organizations (ECSC and EEC) of the present European Union became a rapid political and economical success, based on the twin concepts of liberal and social democracy. Business confidence and social stability returned despite the necessary restructuring of whole economic sectors. This was achieved first in agriculture, then in the industrial sectors through the Single Market and finally by the creation of the Economic and Monetary Union (with a common currency, the euro). It is still ongoing in some sectors (such as services or energy).

Economic growth and technological innovation created the highest and most equally distributed welfare Europeans ever enjoyed. Above all, the possibility of another war between Germany and France, or any other of the member countries, has become today unthinkable. The success was such that an ever increasing group of countries sought to join, to begin with the country which saw itself apart for centuries, Great Britain. By 1995, there were fifteen countries in the EU.

Following the implosion of the Soviet Union, this system of political and economic organization was rapidly extended to the countries of Central and Eastern Europe, with the purpose of consolidating liberal democracies there too, re-structuring the economies and building social democracies for their citizens, by fully integrating them into the European Economic and Monetary Union. Thus the system of peace and social market economies could be extended from Northern, Western and Southern Europe to these Central and East European countries, stabilizing them politically and social-culturally. For these reasons too, the unstable countries of the Balkans are now brought gradually within the EU orbit, though not (yet) as full members.

This historic process is driven by a desire of stabilizing state relations, bringing lasting peace, and by stabilizing societies by providing extensive and high quality welfare systems, such as public health, unemployment benefit, retirement pension, and education for all. The average income of (Western, Northern and Southern) Europeans has never been as high in history. No wonder that other (Central and Eastern) Europeans, faced with difficult economic re-structuring, were eager to join. No surprise that the vast majorities of EU citizens do not want a return to earlier, purely power-based politics and look bewildered at nationalist adventurers in the Balkans or in Georgia.

The overall success of the EU, achieved through many ups and downs, is based on the original division of the competences of the modern state: security and welfare of citizens are handled nationally, but macro-economic and monetary policies are decided at supra-national EU level. The decision making system is such that no single country can impose its will on the others (through qualified majority voting among governments). Two institutions (Commission, appointed, and Parliament, elected) normally represent the general European views and interests, one institution (Councils of Ministers) represents individual member state views and interests. A European Council of Heads of State (France) and Prime Ministers sets the long term policy direction.

The great challenge for the 21st century now seems to use the experiences with building peace and prosperity in Europe to achieve similar results between Europe and Russia.  

QUALITY OF LIFE AS NEW POLITICAL PRIORITY

As the American author Jeremy Rifkin has rightly remarked, Europe has moved towards innovation of the social-cultural paradigm of its peoples. He claims that Europe is showing the direction of societal and economic development of modern societies, not his home country. This, too, may be another late effect of the Westphalian Peace and the developments which it set in motion; it is certainly also an effect of the results achieved by the EU.

Political systems are interdependent with the functioning of the economy, and both influence, and in turn are influenced by, invisible trends in a society, by the way people see their place in it and by their aspirations for their personal life. The near disappearance of the farmers class in the 20th century, demographic change, the prominence of the professional and middle class and the extension of the middle class quality of life to the workers class, the more than half-century of peace and economic progress shared by nearly all citizens through the welfare distribution systems, public education, free communications and access to information, the decline of religions too, have all led to a different European outlook on life and society. Philosophers have spoken of a post- or trans-modern culture, one which is still influenced by the fundamental ideas of the 18th century Enlightenment, but which is moving on to applying them differently.

Having achieved to establish the rule of law among their nation states, it seems that the present historic objective of Europeans is to also tame the capitalist industrial economy. It has deep roots in German and Scandinavian social democracy and their successful management of the market economy coupled with a welfare state system. It is the basic model of every EU member state, though with different elaboration.

The new overriding goal is sustainable economic development. Just as before limitations on the working of the capitalist economy were introduced in order to protect workers, now limitations are sought for the benefit of the environment and for public health reasons. Even if some measures (for example, in the agrifood sector) may also have a protectionist side-effect, they nevertheless are driven primarily by a strong new social-cultural paradigm which no longer believes in economic progress for its own sake.

It is not just soft thinking: the cost of environmental degradation is usually much higher than the measures to avoid it. Moreover, it forces companies to invest in research and innovation and thus creates new competitive advantages in global markets. A growing part of Europe’s GDP comes from eco-friendly businesses. Rising costs of public health systems, coupled with demographic change, make disease prevention a budgetary necessity for governments, hence the growing link between public health and environmental policy objectives. People enjoying a rather good life want to continue as long as possible to do so, which is the cultural basis for the widespread support for such policies.

THE EVER WIDER ATLANTIC

All these developments inevitably influence also Europeans’ view of the external world. They seek to export their own model of stabilizing state relations through the rule of law by promoting regional cooperation in other continents or by stimulating the growing role of global organizations. Welfare for all citizens requires economic growth, which today is driven by trade and technological innovation, all of which require stability. Therefore European political and economic elites unite in these goals which drive increasingly the emerging EU foreign policy. It is a far cry from traditional state relations based on naked economic exploitation and military power. The latter of course still has a role to play in maintaining peace and stability among states, though in a different way than before in history (instead of going to war, Europeans by far prefer peace keeping).

One can see the shift most clearly in the EU’s strong support for international cooperation on climate change and other environmental issues, seeking to bind other countries through negotiated treaties under the auspices of the UN. One notices also prudent changes in its trade relations with developing countries, or in its support for people stricken by wars or natural catastrophe, or its promotion of human rights (even though often inconsistently).

Another American author, Robert Kagan, has said that “Americans come from Mars, and Europeans from Venus.” Most Europeans regard this as a compliment (though most Americans do not). Despite the fact that the EU is driven by new societal and governance concepts, it is not becoming a giant Switzerland. It cannot afford this, because its economic and geopolitical interests and its historic and cultural links stretch across the globe and require sometimes a military capability. Therefore, the EU now starts to seek its own military structure, or rather to streamline those existing in the member states. There is no support for building a new military power, but the present waste of resources must be reduced, if only for budgetary reasons. It will take a couple of decades to get there.

Therefore, Europeans give lukewarm support to the NATO Alliance, dominated still by the U.S. Inevitably however, the two sides of the Atlantic will disagree more and more over what to do and how, simply because their social basis has grown apart already and will continue to diverge. The U.S. is still driven by a messianic capitalist and political ideology. The democracy concept which it promotes worldwide is a purely liberal one, without the social democratic (welfare distribution) component. Its capitalist market views are much less tempered by regulation and government intervention.

Europeans have long lost such ideological beliefs (which in fact hide hard American economic interests). They have recently been strengthened in their views by the war in Iraq and the collapse of the American-style financial system. They have culturally moved on towards seeking a balance between the goals of liberal and social democracy. They are now going further by introducing new political concepts, such as sustainable economic development. Although many of these ideas also exist in the U.S., they are by far not as dominant and widespread as in the EU.

While Europe and North America thus share a number of societal beliefs (liberal democracy, human rights, etc), and while they are still cooperating militarily within the NATO alliance, their societies are drifting apart. Social democracy is not taking root in the U.S. Even after the present financial crisis, it is likely that systemic change will not happen as it did in Europe over the past decades.

The NATO Alliance thus is likely to see in the future ever weaker support. There is already widespread unease or clear opposition against NATO military actions outside Europe, or its expansion into areas which were never in Europe’s sphere of influence. This is particularly so in the countries of Western, Northern and Southern Europe. These are already more advanced into new thinking about European and international relations, having experienced the benefits of peace based on reconciliation and economic growth far longer than those who joined the EU only recently and who often look more in the rear-mirror of history than to future opportunities. The new roles of NATO are driven by the traditional U.S. political views and the interests of its military-industrial complex. Obviously, one should not overlook also the role of the industrial-military complex in some European countries (Britain, France) in helping to promote Cold War reflexes. But the reluctant support among Europeans will be waning rapidly as soon as they understand that the new Russia is no threat for them as the Soviet Union was.

A NEW RAPPROCHEMENT

From the late 18th till the early 20th century, Russian intellectuals and artists played a prominent role in Russia and in Europe; they were both Russian and European. The re-discovery of the culture of rural Russia could not have occurred without the new insights acquired by intellectuals and officers in Europe. In turn, key elements of European modernism came from Russia. This great exchange ended abruptly in 1917, when the victory of Communism stopped Russia’s own liberal and social democratic developments and sealed the country off from the rest of the world. Having suffered three invasions (from Napoleon and Hitler and from Western consultants in the 1990s), Russians are understandably a bit apprehensive now about renewing the old link and exchanges.

The logic of history, however, points to extending the innovative ideas for realizing peace, economic progress and social stabilization to Russia, as well as to Turkey. For centuries, both powers have been Europe’s key neighbors. Both have taken from European civilization, and given to it. What could be achieved between France and Germany and other European countries should now be achieved with them, though using of course different technocratic arrangements (realism does not permit EU membership dreams, unless one seeks to derail the whole European political stabilization process).

Despite its enormous energy resources, Russia still has a long way to go towards modernizing its economy, rebuilding its scientific and technological capacities and providing social stabilization through distributing the newly acquired welfare across the population. Despite the misery and suffering which Communism caused, it did move the Russian farmers and workers into modern views of life and society; their social and cultural paradigms now look closer than ever to those of people in Europe. Communism has failed in its economic policy, but it does leave a country behind with the aspirations of the late 20th-early 21st century.

Russians have irreversibly been modernized now, like Europeans, but Russia has the task of (re-) building the structures of a modern society, which Europe could start doing several decades earlier. Only the twin concepts of liberal and social democracy correspond to the aspirations of modern people and only these allow to build a respected and stable modern country. This is the common interest which political and business elites in Europe discovered in the 1950s and which still drives deep in popular beliefs the present EU policy processes, despite all short-term technocratic or political difficulties and the ups and downs of the process.

This does not imply that European models can simply be transposed to Russia. There are no two identical liberal and social democracies in Europe; each country has developed its own version taking into account specific historic, demographic and economic conditions, and political and social-cultural circumstances. There are equally various forms of the market economy in Europe, with more or less state intervention, more or less consensus building between business and trade unions, leading to highly developed welfare state models with a high degree of equality but also of citizen tutelage, or to more limited provisions with more personal responsibility of citizens in other countries. None of these systems is rigid and they are all in constant evolution, experimenting with new ideas or benchmarking with other EU countries. No doubt Russia will develop its own version, which may well see a stronger executive and a weaker parliament, and a more interventionist government in economic affairs, perhaps a smaller welfare state to start with.

Provided the direction is clear, convergence between the EU and Russia will appear ever clearer on the horizon and cooperation between both will be facilitated ever more. It is in the EU’s self interest to cooperate with Russia in its move towards its own forms of liberal and social democracy. The first step is to gradually open markets to trade and investment, so that Russians can experience first hand the ways in which contemporary European societies and economies function, and that Europeans can achieve better understanding of the characteristics of Russia. Since times immemorial, business has been a great transmitter of innovation, in all areas, from ideas and art to organization and technologies. Indeed, businesspeople, through their support of think tanks and other activities to stimulate creative thinking, played a leading role in the EU’s own developments.

Therefore, in addition to increased economic cooperation, more extensive exchanges should be promoted, in particular among the young and the cultural elites, which have a great multiplying capacity. The methods of the French-German reconciliation can serve as useful examples. European exchange programs (such as ERASMUS among university students) should be developed with Russia too. While politicians have to remain careful in day-to-day policymaking, others should be able to speak frankly and to develop new ideas and new consensus, which can become later the basis of new policies. We must lay the basis for a new relationship at the same time as tensions from the old still exist.

Of course, a strengthening of liberal democracy in Russia is needed, to start with the so-called material part of it (civic and human rights, press freedom, etc), which is quite compatible with a strong central government, as General de Gaulle showed in France. After President Putin focused on strengthening the economic framework of the state, a task not sufficiently appreciated in Europe, Europeans hope that President Medvedev will focus now on modernizing society itself, in line with the economic modernization already achieved.

A second and more difficult step in the rapprochement should be the recognition by Europe of Russia’s security fears. They have historic roots, and while Europeans may perceive them as unfounded, given their belief in their own new world views, they are real enough for Russians. There is a proven method from the Cold War days to do so. Between the EU and Russia, there should be as many “Finlands” as possible, to start with Belarus and Ukraine. These countries are free to determine their own political and economic models, even to join the European Economic Area (an extension of the EU market without membership), but they should remain neutral and not join any military alliance. As the former German Chancellor Helmut Schmidt wrote, Georgia has never been part of Europe.

The same approach thus could be tried in the unstable region of the Caucasus, involving both Russia and Turkey. Both countries have traditional interests there, but they can be dealt with in modern ways, bypassing traditional power politics. It is in fact also a European interest to assist and to cooperate with both countries in preventing this whole region sliding backwards into a pre-modern chaotic political and economic condition. The EU is well placed to support the development of these countries in the same liberal and social democratic direction as it has gone itself, respecting the interests of Russia and Turkey and avoiding interference; the peoples of this region must find their own ways into the modern civilized world.

To set us on the road towards such an innovative future of cooperation and shared interests, based on the twin concepts of modern governance and market economies, one should not have, like the Europeans of the 1950s, too many illusions. There are forces at work still which pull in the opposite direction, both in Europe and in Russia. Not to mention in the U.S., which has a vested interest in preventing close Russian-European cooperation. Therefore, it is urgent that Russia seek to improve its communications with Europeans. This cannot be done by old style propaganda. It requires again to recognize the fundamental changes in Europe and to respond to them with openness.

Maybe, there is an obstacle in the minds of Russians who seek to define themselves in the mirror of the U.S., instead of looking to their own history and to Europe, the civilization which is closest to their own. Europe and Russia have grown partly from the same roots, and both have benefited from the past exchanges and cooperation. Maybe it dates from the Cold War Communist-capitalist dichotomy, but it is bypassed by events, by the divergent political, economic and social-cultural evolution in Europe and the U.S., the emergence of new political and economic powers in the world, or by fundamental financial and technological shifts in the economy.

Obviously, the Russian tendency to revert to methods of policymaking, internally or externally, which the Europeans have relegated to history, does not contribute to confidence-building. Europeans like to see a friendlier and more at ease Russia. However, if Russia continues to seek and find its own modern economic and political organization, it is likely that it will find it as beneficial as Europe to use less harsh methods of old style power plays.

*  *  *

It will take more than a couple of years to get there, maybe a generation, but it is worthwhile for Europe and Russia to seek to move in that direction. It is the direction which matters, and the process to go forward on many different aspects of rapprochement.

The direction defended here requires to be examined first by those groups which always and everywhere have been the vanguard of new developments, intellectuals and artists, and businesspeople. The intellectual father of supra-nationalism and of the EU, Jean Monnet, was a brandy producer; many leading businesspeople have played an influential goal setting role for politicians, and they continue to do so in the EU, together with other stakeholders from civic society. Russian and European businesspeople have a strategic interest to contribute to innovative cooperation between Russia and Europe; they need to do so by looking beyond short-term issues, thus helping to relativate them. They must take account of the governance realities at home, by focusing first on consensus building among the elites, before offering new ideas for consensus to the people at large, which is the responsibility of politicians.

Rapprochement between Europe and Russia will not come automatically; it needs to be nurtured and maintained as a final goal during the vicissitudes of short-term political problem solving. It requires to further spread the spirit of mutual reconciliation and respect and the desire to build welfare for all people, which has served Europe for sixty years. The method of Jean Monnet, building this new vast space of peace and prosperity step by step, will be helpful again. Politics will follow, but first we must return to the great intellectual, artistic and business exchanges of the past, for a better common future.