Diplomatic Pouch / December 18, 2014
By Larry Luxner
David O’Sullivan, the European Union’s new envoy in D.C., used his first public event here to talk frankly about the eurozone crisis — and to call for unity as Brussels and Washington jointly punish the Kremlin with sanctions in retaliation for Russia’s aggression against Ukraine.
Speaking Dec. 10 at the Carnegie Endowment for International Peace, the Irish diplomat said he sees one of his biggest priorities as simply defining what the EU is, how it works, where it begins and ends, and what the distinction is between the Brussels-based entity and its 28 member states.
“There’s a certain amount of confusion between the EU, the Council of Europe, the European Commission, so for people who don’t take a passionate interest in these affairs, I need to explain how all this fits together,” he said. “The EU is not simply the European Economic Community as we once knew it, or just a trading bloc. It has grown geographically. We have expanded progressively over the last 50 or 60 years to now cover a substantial part of the European continent.”
O’Sullivan, 61, took over as EU envoy here in November from Portugal’s João Vale de Ameida. He was previously chief operating officer of the European External Action Service — the EU’s equivalent of a foreign ministry — and has served in a range of senior EU positions, including director-general for trade and secretary-general of the European Commission.
In June, the American Chamber of Commerce awarded O’Sullivan its EU Transatlantic Business Award. O’Sullivan, who speaks English, French, Spanish, German and Japanese, was introduced by Carnegie’s president, Jessica Mathews.
“Taken collectively, we are the largest economy in the world. I’m often amused when our Chinese and American friends debate who is the largest economy. They’re actually arguing about second and third place.”
In fact, the 28 nations that make up the EU have a combined population of 500 million and a GDP of around €14.3 trillion ($16.8 trillion) — ranging from its wealthiest and most populous member country, Germany (with 80.5 million people and a GDP of $2.73 trillion) to tiny Malta (with 400,000 people and a GDP of €7.3 billion).
O’Sullivan conceded that Europe is “struggling to emerge from the crisis” of 2008-09 and still has a long way to go.
“The euro remains the world’s second-largest reserve currency, and in spite of all the doom and gloom, it has continued to be a strong currency. Even with the pessimism, its value remained high — perhaps excessively high,” he said, joking that “any time I set foot on the North American continent, the currency in which I earn my money is devalued. I actually warned people six months ago that when I’d arrive in Washington, the euro might start to go down. Unfortunately, it came true.”
Nevertheless, O’Sullivan said “we are working our way through the difficulties” and that despite stagnant growth across the continent, some bright spots have appeared.
“My own country, Ireland, is now emerging from this crisis. The same could be said of Spain and Portugal, and the situation in Greece has improved,” he said, noting that unemployment has recently fallen in all four countries. “There is huge determination in Europe to address these issues.”
What concerns O’Sullivan more at the moment is Russian President Vladimir Putin, his annexation of Crimea earlier this year, and his continued aggression against Ukraine. In September, the two sides negotiated a ceasefire in Belarus, but the so-called Minsk Protocol failed to take hold and hopes for a dialogue have since faded. Ukraine’s civil war has now killed an estimated 4,300 people (1,000 of them since the truce went into effect) and forced more than a million people to flee their homes.
The United States and the EU slapped sanctions on Moscow, criticizing it for trying to create a new “frozen conflict” in the region, while Putin accuses NATO of reneging on its pledge not to encircle his country.
“For us, sanctions against Russia were difficult because they cause economic pain in the EU. We trade 15 times more with Russia than you do,” said O’Sullivan. “The remarkable thing is, the EU has gone ahead with these very tough sanctions, and has maintained very close ties with the U.S. We see eye-to-eye on the need to support Ukraine and send a tough message to Russia. But at some point, we perhaps need to get some sort of resolution. Sanctions themselves will not solve the problem.”
The EU envoy added: “Like it or not, the EU is the largest market for Russia’s exports. I’m not sure their deals with China or elsewhere are going to compensate if there were to be a significant lowering of European imports. As a big importer, you also have some leverage over your supplier, and Russia is beginning to realize that.”
Looking at long-term objectives, O’Sullivan said he’d like to see the Transatlantic Trade & Investment Partnership (TTIP) ratified “rapidly and with a sense of urgency,” though he realizes these things take time.
“We’re working very hard to get another round of negotiations in February,” he said. “ We would like to make progress in the next 12-24 months but I don’t think you can create an artificial deadline.”
Even longer-term, the EU’s new man in Washington said he’s concerned about euroskeptics who feel that Europe has changed beyond recognition — and whose support of anti-EU political parties may be a symptom of growing alienation across the continent.
“We have not tried to homogenize Europe,” said O’Sullivan. “I know that when I land in Berlin, I’m in Germany, and when I go to Madrid, I’m in Spain. It feels, sounds and looks like another distinct country. There are still some people who don’t like the EU, but what’s the alternative? Frankly, many of these people also come with baggage I don’t feel comfortable with.”
He added: “We should not be afraid of this debate. I have no doubt that the future of our citizens lies in closer integration, and in the guarantees which the EU brings. We have to make the case why their countries are better off inside the EU than outside it.”