Impact of the Crisis
BERLIN (Own report) - The EU crisis is causing a serious weakening of the EU's foreign policy, concluded a recent study published by the Institute for International and Security Affairs (SWP) in Berlin. Not only are the member states' financial outlays for foreign and military activities clearly diminishing, due to leeway shrinkage caused by budget cuts, but "conflicts between member states have grown" around how to handle the crisis, according to the SWP. This has stifled "joint foreign policy initiatives." The think tank points out that the enduring crisis and the hard-line German austerity dictate have damaged the prestige of the EU and, therefore, also severely tarnished its global "soft power." Particularly damaging are the cuts in the military sector, even ranging up to 30 percent reductions in defense spending of the smaller and medium sized EU countries, jeopardizing their long term capability of participation in EU wars. The option of instrumentalizing a common EU foreign and military policy, to reinforce German clout and eventually promote it to world power status, had always been an important motive in Berlin for the buildup and development of the EU.
The SWP sees the budget cuts, forced onto the member countries by Berlin's austerity dictate, as an important reason for the tangible decimation of the EU's foreign policy. This is having a significant impact on military budgets, which have to be comprehensively reduced. Today, EU countries are altogether spending approx. 220 billion Euros per year for their military, however, according to "competent prognoses," a reduction of at least 50 billion Euros is to be expected by 2020, reports the SWP. Particularly in the southern crisis countries even classical foreign policy sectors will be affected. For example, "Spain, Portugal, Greece and Italy have decided to reduce their budgets for development policy and for the countries on the EU's southern borders." Spain has supplementarily "reduced its budget of the Ministry of Foreign Affairs and closed embassies in third countries." It is not expected "that the constraints on national financial and political capabilities can be balanced out at EU level." By spring of 2013, at the latest, the national "budgetary constraints" will, more than likely, make themselves also felt "in the union's budget."
The SWP indicates that disagreements among the EU member states are also growing. These disputes "have grown in the course of the crisis" and, moreover, "are being carried out more acrimoniously (...) than before," according to the study. This is having a "negative effect on the functioning of joint institutions." The SWP gives the recent example of the EU "not being able to grab attention" at the G-20 meeting "because of dissention between the member states." At the United Nation's Climate Change Conference in Doha, the EU Commission did not even have a consensual negotiation mandate. In light of the growing acrimony in these internal disputes "great leaps forward, in terms of foreign and security policy, seem, for the time being, unrealistic," concludes the study.
According to the paper, the EU's loss of "soft power" should not be underestimated. On the one hand, "in the eyes of many threshold countries," the EU is "clinging to the neo-liberal 'Washington Consensus' model" and therefore also bears "responsibility for the outbreak of the current global financial crisis." This lowers the incentive to seek closer cooperation with the EU. On the other hand, the EU's foreign policy weakness is being watched around the world. This in turn, lowers the European alliance's prestige in the eyes of other countries. For example, relations between the EU and the People's Republic of China, "has become increasingly reduced to a question of bilateral economic relations, during the course of the crisis," from which Germany is particularly benefitting. Germany, because of its economic strength, has "risen to be China's preferred and privileged partner."
Minus 40 Percent
Cuts in military budgets are particularly consequential, according to SWP. Even though larger EU member states - Germany, France, and Great Britain - have, up to now, been able to keep their cuts below eight percent, "most of the medium-sized EU countries" have recently decided "cuts from 10 - 15 percent." The smaller member countries are cutting "up to 30 percent" of their budgets. Already in 2012, Austria and Portugal had announced they would lower "their defense expenditures by 40 percent over the next four years." The SWP sees no indication "of a reversal of this trend (...) in the near future." This will lead to a reduction of the corps and - due to a reduced capacity in arms buildup - also to a reduction in the range of operational possibilities. Whereas the largest EU countries could "in the future, still cover the whole competence spectrum," the intermediary and smaller countries have begun abandoning entire "areas of competence."
A lack of finances is compelling a growing number of countries to withdraw from foreign missions, writes the SWP. Greece and Portugal, for example, have already decided "to withdraw personnel and material from the KFOR Kosovo operation," criticizes the SWP paper. "In such cases, financial questions have higher priority over alliance solidarity." Participation in new military interventions will be "much more critically examined." Ultimately, this development is leading to a "renationalization of security and defense policy." The gap between the respective national armed forces' capacities is continuing to grow. The larger EU countries are modernizing their armies "more slowly, but persistently," while medium-sized and smaller EU states are often forced "to defer procurement or modernization projects, or give up on them altogether." This enlarges "the gap between the modernizers and the stay behinds." This jeopardizes the possibility of using troops of smaller and medium-sized EU countries to wage future wars. "The countries left behind" would "no longer be able to participate in the operations, because their equipment would be increasingly incompatible."
The option of instrumentalizing a common EU foreign and military policy, to reinforce German clout and eventually promote it to world power status, had always been an important motive in Berlin for the buildup and development of the EU. Some in the German establishment have begun to question the economic benefit of the Euro. (german-foreign-policy.com reported.) Repeatedly, this has been countered with the argument that giving up the Euro would endanger the EU, which, must be absolutely maintained, because of its foreign and security policy being beneficial to Germany. With a sustained tangible weakening of the EU foreign and military policy, even this motive could become obsolete in the debate on maintaining the Euro.
 Zitate hier und im Folgenden aus: Ronja Kempin, Marco Overhaus (Hg.): EU-Außenpolitik in Zeiten der Finanz- und Schuldenkrise, SWP-Studie S 9, April 2013
 see also The Will to World Power, "Downfall or Ascent to World Power?" and Potential of a World Power
 see also Wirtschaftskulturen and Brüche im Establishment