Much of the rhetoric following the uprisings in Tunisia and Egypt implied that a “Berlin Wall” had collapsed in the Mediterranean and that the European Union should fall back on its tried and tested model of transition to help its southern neighbors become democratic—in the same way that it reached out to the countries of Central and Eastern Europe after the Cold War. But rather than copying the legacy of 1989—and offering an anemic and underfunded copy of the enlargement process minus the benefit of membership—it is time for the EU to develop a more political and differentiated approach to its southern neighborhood. This week, the European Commission announced another €350 million package to support the Arab Spring. Like the earlier two strategies, it shows how Baroness Ashton has skillfully tried to push the envelope of what cash-strapped and introverted EU governments are willing to do. However, it may now be time to revisit rather than re-enforce the core principles of the European Neighbourhood Policy.

A NEW NEIGHBORHOOD

The big story of 1989 was about a “return to Europe” for countries that did not just want to deepen their links with the EU; they wanted to transform themselves to become the EU. The Arab world—on the other hand—is being reshaped by the intersection of three big trends—the global political awakening, the shift of power from East to West, and the long tail of the Great Recession—which are combining to change the political and economic landscape in ways that are challenging to the EU and its policy framework for building “deep democracy” and economic development.

After 1989, democratization and Westernization went hand in hand. When the countries of Eastern Europe threw off autocratic rule, they wanted to join the West. But now that Arab countries are democratizing, they are not turning toward the West. In many ways they are going through a “second decolonization,” emancipating themselves from Western client states in the same way that earlier generations freed themselves from Western rule. Although the revolutionaries themselves may have been using Facebook and working for Google, the politics they have unleashed will be challenging for the West. I do not think we will necessarily see fundamentalist Islamists coming to power across the region—but in Egypt we can already see some of the challenges in the result of the referendum and some of the early moves on foreign policy. It stands to reason that the “dignity revolutions” will not just be about emancipation from dictatorship, but also from Western rules and practices.

The economic picture is also challenging for the EU—showing the combined impacts of the Great Recession and the power shift. It is clear that the optimism of the revolutions is already leading to an economic slump because of a collapse in tourist revenues, capital flight, and rising inflation. Experts predict that gross domestic product (GDP) growth in non-oil countries will go from 4.5 percent in 2010 to a 0.5 percent decline in 2011. These economic problems—coupled with the underlying forces of demography, rising inequality, unemployment, and corruption—could lead to a crisis of expectations that overwhelms the Arab Spring.

But a cash-strapped EU has had an underwhelming response to the crisis, promising just €5.8 billion—approximately $8 billion—when Egypt alone has a debt of over $80 billion. When the G8 met in May, Western powers promised a mere $10 billion, while urging Gulf oil states to give $10 billion and the International Monetary Fund and the World Bank to provide another $20 billion of loans. There is a lot that the West, and particularly the EU, can do—from opening its markets to agricultural products, to helping with investment vehicles for small- and medium-sized enterprises, and eventually moving toward a customs union—but the timid response so far will mean that other powers such as the Gulf Cooperation Council (GCC) and China will probably play an ever more important role as an economic forces in the region.

However, it is not just the threat of member states adopting a miserly approach to the promises they have made on money, markets, and mobility that could make the EU underperform. There is also a threat that it will not take advantage of the Arab revolts to rethink its approach to the neighborhood. The problem with the EU’s approach is that it is modeled on the approach to Eastern Europe where we were the main economic and political power; where countries were desperate to adopt our values; and where the end-goal of membership made it worthwhile to go through the painful process of transition.

A NEW NEIGHBORHOOD POLICY

None of these conditions applies in the southern neighborhood. The European Commission’s strategies are based on the model of enlargement-lite—where the EU signs action plans for reform with the countries on its periphery, monitors their performance, and rewards their success with extra money, markets, or mobility—“more for more.” The trouble with this approach is that it is difficult to deliver and driven more by the needs of the European suppliers—the European Commission bureaucrats who oversaw the enlargement process—than local demand. The EU has a chance to review its approach to the neighborhood across four different dimensions:

• Real differentiation: There should be a few common elements in the approach to all of our neighbors: upgraded political dialogue; support for free and fair elections (with all the tools that EU has developed); and support for civil society. Beyond that we should look at countries on an individual basis and develop bilateral relations with them based on a short list of pressing needs.
   
• Scrap the lengthy action plans: Given that none of the EU’s southern neighbors will join the Union, it would make sense for the EU to abandon its current approach, which is based on lengthy action plans modeled on the membership process. In their place, the EU could sign a series of sectorial development strategies. For one or two countries—maybe Moldova in the eastern neighborhood or Tunisia in the southern neighborhood—it may make sense to develop a model of enlargement-lite. In order to deliver this, the EU should radically change the make-up of its personnel in the region and its spending priorities.
   
• Involve member states: To move from a bureaucratic to a political approach, the high representative for foreign affairs and security policy will need to find creative ways of linking the EU’s policies and approaches to those of the member states. This is politically sensitive as it is easy to alienate excluded member states and there are strong reasons not to want to allow the eastern or southern neighborhoods to become the chasse gardée of their closest neighbors. One idea would be for Baroness Ashton to look to the model the G8 set up for Afghanistan, asking each foreign minister to lead on a substantive area—rule of law, media reform, policing, and election support—in some of the key countries. It is also important to embrace some political symbolism.
   
• Reach out beyond a “European” Neighbourhood Policy: The area surrounding the EU is moving from being a “European neighbourhood” to a more multipolar one, where different political and economic models vie for attention. In this more competitive environment, the EU still has much to offer but is likely to maximize its influence by reaching out to other players such as Turkey, the United States, and the GCC and finding institutionalized ways of working together.

The destabilization of Europe’s periphery puts the EU in a dramatically different position to the status it enjoyed at the end of the last century. The EU is still the most significant source of trade and investment for all its neighbors to the south and east, but this is now a competitive rather than a “European neighbourhood.” The EU therefore needs to develop a real foreign policy—using national and collective sticks and carrots to support political transition and advance European interests. Let us hope that they put the current approach behind them and opt for a more radical rethink of our approach to the region.

Mark Leonard is co-founder and director of the European Council on Foreign Relations.

To reinvigorate debate over European foreign policy and Europe’s role in the world, Carnegie Europe is publishing a series of essays from leading policymakers, diplomats, experts, and journalists on Strategic Europe over the coming weeks. A new essay will appear every day.