The European Union (EU) is undertaking one of the greatest feats of political engineering ever attempted--the unification of Western Europe with Central and Eastern Europe (CEE). This will reshape and change the political landscape of Europe. The single market and the euro will be strengthened, yet Europe must also deal with the challenge of ensuring peace and stability in this part of the world. There are also growing expectations that the enlarged EU will be expected to project a European voice in the international concert. 

The European Council in Copenhagen in December 2002 invited ten countries who are expected to become members of the EU as of May 1, 2004: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia.  Negotiations with Bulgaria and Romania continue with a target date of 2007 for possible membership.  

A word on Turkey: Turkey is often mentioned as a special case.  The conclusions from the meeting in Copenhagen suggest that is not correct.  They unequivocally state that the same criteria will apply for Turkey as for other countries applying for membership. In December 2004 the EU will examine the situation in Turkey and decide whether the criteria are fulfilled and, if so, enlargement negotiations will start. 

Enlargement has a real impact on Europe's foreign policy. Two things have happened in Europe after 1990. Territorial defense is out, while the soft side of security policy is in. It could be rephrased in a more conceptual form by saying two other things: First, security in Europe has become indivisible--meaning that either Europe as a whole is secure and peaceful or Europe as such faces a security problem. Security in one part of Europe is a concern for all of Europe. Second, threats to security in Europe no longer appear in the form of potential aggression from one European country directed at another European country.  

The enlargement also means that the EU now has some new neighbors. Russia, Ukraine and the Balkans--while North Africa is just outside its doorstep and the Middle East is looking at the EU for attention. 

Europe cannot escape, however, the inevitable and uncomfortable question of bang for the bucks - a common defense and military policy. I do not see the EU projecting power abroad more or less in the same vein as the United States. Not now. Not in the foreseeable future; maybe never. My reading is that Europe and the Europeans have crossed the line. We may still see, and increasingly so, European military forces participating in - in some cases even being the major shareholder so to speak - various international military interventions but we will not see a major European military action far away from Europe. 

To sum up concerning foreign policy: the EU will for some time confine itself to the soft instruments of foreign and security policy and be relatively successful in adjacent countries. A genuine common foreign-security and military policy is in the embryonic stage. It will come. When it comes it will rely less much less heavily on military muscle than is the case for the present American foreign and security policy. Hopefully the world develops in a way compatible with such reluctance to use force--commendable in itself but relying on a similar attitude gaining ground around the globe. 

In charting the future direction of the EU, four things come to mind. 

1) The future of the euro. The euro has come to stay. The rise of the euro in recent months can be explained in many ways but one of the explanations is that some, and perhaps many, of the Asian central banks are diversifying their currency reserves from U.S. dollars to euros.  (1) 

But when will the euro be a real international currency? We will have to wait a while. Confidence has to grow. The European economies and the enlargement have to stay the course. The ECB (European Central Bank) needs to establish itself as a partner among its peers in central banking. But it will come. The world needs and wants an alternative to the U.S. dollar and there are not many candidates around.   

2) The European economies need restructuring. Will it happen? Well, that is a good question. We still need mergers across borders; we still need the full exploitation of the single market that is now being enlarged. The mindset of European businessmen and politicians are still too secluded. A robust turnaround has yet to occur.  

My own guess is that the European economies will get back to a growth pattern somewhat higher than what we have seen in recent years but not much above a range of between 2.5 percent to 3 percent. The drive for reform and restructuring will not be sufficiently strong to push Europe back onto a dynamic growth pattern but a little bit less can probably do it. Here, as in other areas, the Europeans will choose their own model. And that model means that a combination of lower growth and higher degree of social welfare/social security is preferable to a combination of higher growth pattern and less social welfare/social security. And this European preference has its merits. Among other things there are strong reasons to believe that it mobilizes a large share of Europe's human resources while the American model does not do so but compensates by attracting human resources from abroad. 

3) Will the integration encompass all member states to the same extent or will we see what is termed a Europe with several speeds that is not all member states taking part in all aspects of the union?  It is more likely than not that the vital parts of the treaty will emerge as obligatory and apply to all member states while other and less vital parts for the daily functioning of the union will be optional. This is, in fact what we have seen for quite some time with the United Kingdom, Ireland, Denmark and Sweden operating outside some chapters of the treaty. They have opted out of different chapters proving that such a model can work.  

If this happens it will be supplemented by two policy prescriptions. Firstly, the member states being outside may accept that it is not forever. Secondly, the said member states will not the have same rights as the other member states. 

In other words: The convoy is still moving in the same direction and toward the same port of destination. But not all the ships move with the same speed. 

The revival of the Franco-German axis at the end of 2002 and the beginning of 2003 should not be ignored. It is still early and judgment may wait for more tangible evidence but what has hitherto been a theoretical issue has moved somewhat up the ladder of political options: the development of a closer Franco-German partnership, even resembling some kind of union within the union. It would be a grave mistake to classify the present political and popular sentiments in these countries as an ephemeral phenomenon.  

4) Relations with the United States. This is a difficult, almost painful, question especially right now. Let us face the facts. The EU and the United States share the same basic principles with regard to political culture. There are a lots of arguments to be put forward supporting a continued alliance. But another fact is that the EU and U.S. no longer face a military threat so obvious and lethal that it forces them to ignore and disregard the differences in opinions and policies which evidently are also present. 

The Iraq war has shown what was known well in advance, that the United Kingdom is more favorably disposed toward the United States than France and Germany. If such a policy discrepancy remains in the long run and especially if it remains concerning the main question of the euro and the Common Foreign- and Security Policy (CFSP) something will have to give. 

As we have seen recently there is no doubt that some of the EU member states will try to forge ahead with a CFSP including a military sector. The question remains however whether they will muster sufficient clout to shape a credible force. The answer depends, to a large extent, on whether they will put up the money - a lot of money - without which such a force cannot be build. And a political decision-making procedure without which it cannot be used. 

The Iraq war has split the Europeans and put the movement toward a CFSP encompassing all the member states on hold. The victim in this regard is primarily the military sector but that part of the CFSP has always been doubtful.  

In a strategic sense it means that EU can no longer be taken for granted as an ally of the United States, regardless of the challenge we have to tackle. It creates strategic room of maneuver for the Europeans and the Americans to find out how strong the Atlantic partnership shall be under new circumstances. And it focuses upon two principle questions: How much does the United States value partnership with Europe in the future?  How comfortable or uncomfortable are Europeans with a United States that is able to do without European support?  In short, we will see how strong the common principles and ideas - the common set of values - are when confronted with divergent tactical interests instead of convergent strategic threats as under the cold war. They may be weaker than most of us thought.