[Brussels e-briefings] After Sarkozy’s downfall, can Europe and NATO take a new turn?

Event summary

On political changes in France:

Expect a new style and new attitude from the French leadership after years of “omnipotent” Sarkozy’s presidency. François Hollande does not see himself as a leader, though he promised to push for a “Growth agenda”, but as a deal maker who can move the European consensus.

Expect also from France a different tone and axis: though the Franco-German partnership remains essential, more will be done from Paris to associate with other European countries, Also a more modest France on the international scene, François Hollande refers to himself as a “normal” president. He’ll be keen to lead a “normal” France.

Danger zone here is to see the new French leadership to rely once again on government and public spending to push up the economy, a recipe which does not work anymore in a context of fierce global competition. Expect a new protectionist trend to come from Paris, led by the resurgence of an “eco-tax” or “carbon tax” on imports.

On NATO’s dilemmas

Retreat from Afghanistan will be orderly. Don’t expect France’s decision to bring back “combatant troops” before the end of 2012 to mess up the situation. The question now is more for the post 2014 period. How can stability be achieved? What type of military support will be given to Afghanistan? Can this support be enough for the Karzai government to stay in control?

NATO’s dilemma is that this decade’s war in Afghanistan has not overcome the problem of the Islamist threat in the South Asian region. The instability factor remains.

NATO’s second challenge is to prove that, despite being the most powerful military alliance, it is capable of responding to the newest security threats. NATO capability, especially as the Sahelian region is going down the drain, becomes THE question.

On the European financial crisis and Greece

The Greek exit of the eurozone is an issue that continues to frighten all Euro currency members. To cut a long story short, most of  Eurozone countries would like to see Greece out but they don’t dare to try, as Spain, Portugal and Italy are still very much in the danger zone. Plus that would bring fresh problems to do with French and German banks exposure. Greek elections showed once again the divergence between the European project and people’s aspirations and feelings. Frustrations are inevitably growing. The door is wide open for extremist movements, rightist or leftist, to jump in.

Our assessment remain pretty much the same 1) the Euro currency is here to stay 2) A Greek exit is on the table but the time is not yet ripe as it would push the whole eurozone into a mess 3) Europeans tend to be more and more pessimistic about the possibility to find an exit to the crisis. There is a psychological depression that has to be addressed if we want growth.