What lies behind the Brexit decision? What is President Donald Trump’s stance toward the European Union? What threat does Russia pose to the European Union? How significant is the euro as a global currency?
Filipe Vasconcelos Romão, who holds a Ph.D. in International Relations and serves as a visiting professor in the International Studies program, answered these questions at the conference “The European Union in 2019: A SWOT Analysis,” which took place on Monday, May 6, 2019, at the School of Management and Social Sciences.
Vasconcelos explained the context of 2019 ahead of the European Parliament elections in May. “There is a rise in radical parties in various national parliaments that directly affect the European integration project, ”he said.
The expert analyzed the strengths, opportunities, weaknesses, and threats of the European Union project in 2019.
The threads of Brexit
“With Brexit , everyone believed that the United Kingdom’s exit from the European Union would be played out on the political front, at the borders,” the scholar noted. After Brexit, it became clear that there was “very deep integration in commercial and economic terms.”
“British politicians failed to convey to the public that European integration was much more than just the European Union’s visible policies,” he added.
The day after the United Kingdom left the European Union, Vasconcelos said, “we had to begin negotiating the exit and dismantling a complex web of intricate connections.”
Euro versus dollar
Vasconcelos noted that, in economic terms, the European Union is the world’s leading power. However, he pointed out that militarily, it is far from being so.
“That’s why, in his remarks about barriers and tariffs, Trump strikes a much calmer tone when he goes to Europe to discuss trade than when he talks about the North Atlantic Treaty Organization (NATO) or national defense,” Vasconcelos said.
The expert highlighted the euro as a stabilizing force for the European Union. He noted that, as a single currency, it strengthens Europe as an economic power.
He noted that loans in euros to European Union countries offer liquidity advantages over loans in dollars for countries whose currencies differ from the currency of the loan.
“When we look at the International Monetary Fund’s intervention in Argentina, which involved a different currency, it becomes clear that, in addition to the price, we also have to manage the exchange rate between the national currency and the loan,” Vasconcelos noted. In contrast, “when liquidity was needed for Spain, Portugal, Ireland, or Greece, there was no need to deal with the exchange rate issue, which is taking a heavy toll on the government in Argentina.”
A model without a paradigm
“The European Union is an experimental institution and does not follow a pre-established model, ”said Vasconcelos. He noted that while a state such as South Sudan or Kosovo seeking independence has a model of statehood and national sovereignty to follow, the European Union “has no such paradigm.”
“The euro was introduced in 1999, and it wasn’t until 2012 that the European Financial Stability Facility (EFSF) was created,” said the scholar. The EFSF is a mechanism designed to provide loans to European Union member states that “are unable to respond to financial problems in the traditional way.”
“Not having a model to follow and having to improvise as we go,” the scholar noted, “is a weakness of the European Union.”
The Russian threat
“The Russian government is funding both right-wing and left-wing movements that oppose European moderation, ”Vasconcelos said, adding that Vladimir Putin is known to have good relations with both Matteo Salvini and Nicolás Maduro, so there is no preference between left-wing and right-wing governments.
Russia, the scholar noted, is also using new technological tools to influence countries in the European Union, as was the case in the 2016 U.S. elections.