TREND- UND ZUKUNFTSMANAGEMENT

E
European Union
U i 2015
From a systemic view to scenarios

António Alvarenga - 18th May 2006

ant_alvarenga@yahoo.com

Project Planning + Team Clients & Rationales

& Experts Stakeholders

Focus Time
Horizon
Creativity Intelligence Scanning Diagnosis
Imagination
g & Gatheringg Exploration &
A l i
Analysis
Factors Actors
Interpretation
Structuring
Categorization
Antecipation Synthesise

Visioning
Vision

Communication Mobilization
Appropriation

Planning Strategic Definition Quantification

Launch Strategic Implementation Feedback

Prog./ Proj. Management Strategic Monitoring Adaptation

António Alvarenga /
Paulo S. de Carvalho

1
 Project Planning + Team Clients & Rationales
& Experts Stakeholders

Focus Time
Horizon
Creativity Intelligence Scanning Diagnosis
Imagination
g & Gatheringg Exploration &
A l i
Analysis
Factors Actors
Interpretation
Structuring
Categorization
Anticipation Synthesise

Visioning
Vision

Communication Mobilization
Appropriation

Planning Strategic Definition Quantification

Launch Strategic Implementation Feedback

Prog./ Proj. Management Strategic Monitoring Adaptation

António Alvarenga /
Paulo S. de Carvalho

PRESENTATION OF THE
SCENARIO BUILDING PROCESS
SCENARIO-BUILDING
FOR THE EU

António Alvarenga

2
 FINAL GOAL

To reach a set of Alternative Futures for

the EU allowing for better identification
of risks and opportunities

António Alvarenga

ROADMAP

1.The EU Today

2.Working with an EU System

3.The EU Future – Group Projections

4.The EU Future - Scenarios

António Alvarenga

3
 1. THE EU TODAY

António Alvarenga

FATNESS

www.ccs.ornl.gov.bmp

4
 THE
INSTITUTIONAL
MODEL

http://slonews.sta.si

FINANCIAL
FRAMEWORK http://www.rlg.nl

5
ENLARGEMENT http://rodapedaleira.com.sapo.pt

& BUDGET
COORDINATION

6
LISBON &
ECONOMIC MODELS www.portugalvirtual.pt
www.lissabon-umgebung.de -
foto: Johannes Beck

in www.dw-world.de IMMIGRATION

7
www.reefrunner.com

EXTERNAL POLICY
& DEFENSE http://en.wikipedia.org/wiki/Weapon

GLOBALIZATION,
CHINA &
INTERNATIONAL De ve loping
POSITION Asia e xcluding
China
14%
China Re st of
30% De ve loping
W orld
18%
Asian NIC 's
4%

W e ste rn
Eurozone He misphe re
Developed USA
5%
19% 4%
excluding USA,
Euroland & As ian
NIC's
6%

Contributions to global real GDP growth (ppp), 2001-2004 - Primary Source: WEO Database; Secondary Source: Política Económica, 2004 (adapted by Marques & Alvarenga)

8
 2. Working with an EU System

António Alvarenga

EU
Complex superposition of processes
whose existence/development is highly
influenced by two global driving forces:
António Alvarrenga /
José F. Ribeirro

9
 ECONOMIC GLOBALIZATION - KEY DYNAMICS

Emergent
Economies

Global
Investment

Mutation of Internationalization

António Alvarenga /
Technologies of Companies

José F. Ribeiro
ECONOMIC GLOBALIZATION – WHERE TO LOOK?

Economic growth of the main EU

economic partners

Emergent economies with a key

role

Dollar stability

Evolution of the process initiated

with the Kyoto protocol

Internationalization of
companies and outsourcing
dynamics

Supply and prices of oil and

natural gas
António Alvarenga /

Asia and OPEC foreign exchange

José F. Ribeiro

reserves policy

Commercial Openness

Free circulation of capital

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GEOPOLITICAL FRAGMENTATION – TENSION AREAS AND THE
ARC OF CRISIS

Russia North
Korea USA
South Japan
Korea
Caucasus

Balkans
Central Asia/
Turkey
Afghanistan China Taiwan

Palestine

Vietnam
USA Israel Syria Iraq Iran Pakistan
Thailand

Malaysia
Egypt Saudi
Arabia
Indonesia
Yemen India
Sudan
Eritrea

António Alvarenga /
Somalia Australia

José F. Ribeiro
USA
Arc of Crisis
Tension zones - China
Tension zones - India
Tension zones - Islam Key actor in energy supply

GEOPOLITICAL FRAGMENTATION – WHERE TO

LOOK?

Global Terrorism

Tension level in the Arc of Crisis

Reform of the UN system

Relations between the US and

Islamic countries
António Alvarenga /
José F. Ribeiro

Privileged relations between the

US and regional powers

Global re-positioning of US
military forces

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 EU Enlargement The Balkans

JHA East NATO

Mediterranean

Commercial and Institutions

CFSP
Cooperation Policy Reform

EMU
Aeronautic, Aerospace and
Common Policies
Defence Industries
Reform
Budgetary
Strictness Investment in
EU Budget
Defence

António Alvarenga /
Structural

José F. Ribeiro
Reforms

Growth
Potential

Demographics

21

20 15
EU Enlargement The Balkans
22

East 17
JHA NATO
Mediterranean

19
13
23
Commercial and Institutions 18
CFSP
Cooperation Policy Reform
28 12
25

Common Policies 24 Aeronautic, Aerospace and

Reform Defence Industries
EMU

4 Budgetary 5
António Alvarenga /

Strictness
Investment in
EU Budget
José F. Ribeiro

Defence
Structural
Reforms

Growth
Potential

Demographics

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 21 15

20
EU Enlargement The Balkans
22 16 14

East 17
JHA NATO
Mediterranean

19
13
23 28
Commercial and Institutions 18
26 CFSP
Cooperation Policy Reform
11
12
27 25
24 EMU
Common Policies Aeronautic, Aerospace and
Reform 2 8 Defence Industries
Budgetary 5
4 Strictness Investment 10
EU Budget
6 In Defence

António Alvarenga /
3 Structural

José F. Ribeiro
Reforms
7
1
Growth
Potential
9
Demographics

EU Enlargement The Balkans

F
JHA / East NATO
Mediterranean
NL
UK
U
F
UK
Commercial and Institutions
CFSP
Cooperation Policy Reform
G

EMU
Aeronautic, Aerospace and
Common Policies
G Defence Industries
Reform
UK F Budgetary
G / EU Budget NL Strictness Investment in
Defence
António Alvarenga /

NL UK Structural
José F. Ribeiro

Reforms
F
Growth
Potential

Demographics

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 3. The EU Future
- Group Projections

António Alvarenga /
José F. Ribeiro

Name

Enlargement
CFSP /
& Internal
Relations with
Security / JHA
the US (Group
processes
III)
(Group II)

EMU, Structural
Reforms
& Economic Growth /
Common Policies &
António Alvarenga /

Budget processes
José F. Ribeiro

(Group I)

Demographics

14
 Hypothesis for the Evolution of Economic Globalization

1. Pacific-based Globalisation

(i) Growing integration of the American and Japanese economies with Japanese savings massively placed in
American financial assets, instead of a privileged use on the sustainability of Japan’s public debt;
(ii) Follow up of Chinese economic reforms with strong growth, always in a peaceful international context;
(iii) Strong growth of India and Russia;
(iv) Intense involvement of American and Japanese companies in China’s and Asia’s economic growth;
(v) Strong investment in increasing the supply of oil with greater involvement of private companies and centred
in ex-USSR and the Gulf;
(vi) Climate change matters dealt through the use of regulatory market mechanisms, involving from the start
emergent economies and giving priority to the development of “green and clean” technologies.

2. Retreating Globalisation

(i) Prolonged crisis of the Japanese economy and a retraction of capital

capital’ss exit towards the US due to the
utilization of savings (reduced as a consequence of an older population) in the financing of the Japanese
public deficit;
(ii) Energy crisis resulting from the incapacity in replenishing reserves and increasing production from current
reserves (because of difficulties created by Gulf countries);
(iii) Delay in the economic transformation of China due to political drawbacks in reforms, a consequence of an
incapacity to develop predominantly rural zones and of managing the social consequences of reorganizing the
entrepreneurial state sector;
(iv) Recession in the US followed by a period of slow growth;
(v) Reduction in the perspectives of growth at a world level.
António Alvarenga /
José F. Ribeiro

Hypothesis for the Evolution of Geopolitical Fragmentation

1. Maintenance of the “Centre”

(i) Relative calm along the “Arch of crisis” during the beginning of the 21st Century;
(ii) After initial difficulties, the change of regime in Iraq occurs with a lot less drawbacks than expected thanks to a new regime
that is able to manage several politico-religious tendencies of the country and to trigger a process of modernization;
(iii) North Korea abandons the development of its nuclear programme in exchange for greater international economic
cooperation;
(iv) The Gaza pull-out by Israel unfolds in a rather peaceful manner and allows for a new negotiation phase to begin;
(v) NATO remains the central security organization in Europe and of transatlantic cooperation outside Europe;
( i) US/Russia
(vi) US/R ssia approximation,
appro imation allowing
allo ing Russia
R ssia to focus
foc s on its economic development,
de elopment value
al e its energetic potential and stabilize
stabili e
its internal Islamic arch, in return for its support to the anti-terrorist and rogue states struggle spearheaded by the US;
(vii) Reform of the UN towards a better adaptation to anti-terrorist actions and the proliferation of weapons of mass destruction,
with an enlargement of the Security Council;
(viii) Moderation of the emerging powers – China, India and Iran – concentrated in internal problems related to the stability and/or
the functioning of the respective regimes and/or the economic reform agendas that stimulate moderation in terms of foreign
relations.

2. Reformulation of the “Centre”

(i) Great instability in the Arab World with a profound crisis in the Saudi monarchy and a strong activity of Al Qaeda (which
reinforces its stance on Pakistan/Kashmir);
(ii) Controlled geopolitical tension between China and the US;
(iii) US/Russia approximation at the geopolitical and strategic level;
(vi) Cooptation by the US of new allies, namely India.

3. Fragmentation of the “Centre”

(i) Succession of crisis in the Gulf, Central Asia and the Northwest of the Pacific, leading up to a weakening of US’s position (due
to the impossibility of avoiding the crisis and afterwards of being able to provide effective answers in military terms);
António Alvarenga /

(ii) Uncontrollable civil war in Iraq with a withdrawal of American troops;;

(iii) Coming into power in Pakistan of pro Al-Qaeda military and great instability in Kashmir;
José F. Ribeiro

(iv) US/Russia approximation difficulties;

(v) Worsening of US’s conflicts with (increased nationalist) China, culminating in a crisis surrounding Taiwan;
(vi) Growing conflicts of interest between the US and Germany/France;
(vii) China/Saudi Arabia alliance centred around the exchange of oil and gas for nuclear weapons and missile technology;
(viii) Total paralysis of the UN

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 Hypothesis for the Demographic Evolution

1. Continuity

“Normal” migratory fluxes not altering any of the three identified cases of ageing
population;

2. From the South and from the sphere of the ex-USSR

“Exceptional” migratory fluxes (particularly of extra-communitarian origin) which alters

both the general ageing of the population and the ageing of the active population, also
placing European Immigration Policies under new demands;

António Alvarenga /
José F. Ribeiro

Hypothesis for the Evolution of Group I – EMU, Structural Reforms &

Economic Growth / Common Policies & Budget
1. Reforms and Economic Growth
In a context of advancing Structural Reforms in EMU’s central countries (France, Germany and Italy) and of gains when
it comes to Growth Potential, the UK, now more convinced of the sustainability of the project, joined the eurozone. The
gains in confidence arising out of the success of reforms and out of the UK’s accession to the eurozone has facilitated
the sustainability of the process of flexibilization of the SGP criteria. These criteria now take into account budget-
impacts of the first phase of Structural Reforms and the MS’s different needs in terms of public investment. A greater
solidity of the budget consolidation process has given, in turn, greater leeway for reinforcing expenses with defence
whilst maintaining a refusal of the main liquid contributors in accepting the expansion of the communitarian budget
when it comes to traditional EU policies.

2. Core Nucleus
In a context characterized by the refusal of the UK to integrate the eurozone, by the political impossibility to carry out
converging Structural Reforms in the eurozone and by permanent difficulties in Growth Potential, the tensions around
national Budget Policies have deteriorated. In face of this panorama, reducing the market credibility of the euro and
threatening the EMU in its initial configuration, France and Germany decided to advance towards greater integration
(including in terms of Defence), a movement that was only accompanied by a small group of MS. The imperious need to
contain national budget expenses has led to a franco-german refusal in increasing the Communitarian Budget,
unleashing a series of tensions between them and the liquid beneficiaries of traditional EU common policies.

3. Crisis
In a context characterised by the low endogenous growth potential in Europe, it has been politically impossible in the
core EMU countries to carry out Structural Reforms destined to share the burdens of an ageing population between
State and families, aggravating the differences in budget performance between the UK, Netherlands and Scandinavian
countries and the core nucleus of the EMU (which the UK had decided not to integrate). At the same time, the growing
costs of a non-reformed “Welfare State” in the core EMU countries has rendered impossible an increase of investments
in defence. Successive conflicts surrounding the SGP’s targets and persistent arguments between Germany and
France, mutually accusing each other of the euro’s failure in the exchange rate markets and of the abandoning of joint
efforts in the defence sector, has brought about, halfway through the decade, a serious crisis in the EMU.
António Alvarenga /
José F. Ribeiro

16
 Hypothesis for the Evolution of Group II – Enlargement & Internal
Security / JHA
1. Good Enlargement with Consolidation of the JHA Pillar

The process of enlargement initiated in 2004 contributed towards the arrival of an agreement in the question of
Cyprus and for the success of CAP’s reform. While the process of enlargement was ongoing we witnessed a
consolidation of the JHA - Common Policy of Immigration and creation of European police forces involved in
border controls.

2. Turkey’s quick accession with a Reinforcement of the JHA Pillar

The process of enlargement initiated in 2004, besides having contributed towards reaching an agreement in the
question of Cyprus and for the success of CAP’s reform, it also assumed an unexpected direction, with the
European decision of facilitating a fast-track integration of Turkey (as means to rewarding the behaviour of this
country during the Cyprus negotiations and also for facilitating its internal democratic and secular evolution).
Turkey’s accession has made a reinforcement of the JHA imperative and has brought about new opportunities
in terms of organized fighting to drug trafficking, namely the one that is processed through the Balkans.

3. Bad Enlargement and Great Difficulties in JHA

The communitarian institutions face successive blockades as a consequence: of the entry into the EU of a
divided Cyprus and of consequent growing tensions with Turkey, of the EU’s growing internal resistances to an
effective freedom of circulation of people of the new MS, of the incapacity to reform CAP in time and of the
discontentment of the populations of several candidate countries towards the conditions imposed by the EU.
Simultaneously, the difficulties in reaching a consensus about JHA have worsened, with some countries opting
for a nationally-based approach to the Immigration Policy, and some even deciding to give up Shengen.
António Alvarenga /
José F. Ribeiro

Hypothesis for the Evolution of Group III – External Positioning of the EU

and Relations with the US
1. Transatlantic Axis
In a context of relative calm in the world, the US have maintained interest in the evolution of the Balkans and have
reinforced trust in the intervention of its European allies in the region (with the EU’s progressively greater
responsibilities in managing the problems in the region), keeping up with the European preference for a stability of
borders and multi-ethnic States in a framework of continuity of NATO. This Alliance was reinforced with means and
structures for military interventions “outside the area”. CFSP has evolved towards an affirmation of an European voice
in the transatlantic relation, not free of tensions but always structuring European security. The improvement in
t
transatlantic
tl ti relations
l ti h opened
has d up new collaboration
ll b ti opportunities
t iti i the
in th area off the
th defence
d f i d ti
industries b t
between
American and European companies, including French ones.

2. The EU put aside

In the context of a strategic collaboration with Russia, the US, interested in reducing its “strategic expenses with
Europe”, specially with the Balkans (where crisis were frequent), have proposed a new security architecture based on a
revision of borders and on the articulated resolution of the main focus of tension in Eastern Europe, in the Black Sea
and in the Caucasus. In this new context, NATO has evolved towards a pan-European security structure of which the
EU and Russia were integral parts of and CFSP has lost a great deal of “use” (condemning efforts of putting together an
European Aerospatiale and Aeronautics Policy), since one of the factors that gave it cohesion – preference for stability
of borders and multi-ethnic states – has been abandoned. The US has opted for reinforcing bilateral relations (e.g with
the UK and Turkey).

3. Core Nucleus
In the beginning of the decade, pressed on by the demands of engagements in other regions of the world, the US has
drastically reduced their troops in the Balkans. In this context, the difficult equilibriums in which the policy of
“protectorates” had been sustained in the region fell apart and the European troops, sent in the beginning of the decade
substituting the American troops, proved themselves incapable of imposing respect, with a re-ignition of the struggles
between ethnic factions. Given the exit of the American troops, NATO had lost its most important active in the most
turbulent region of Europe. CFSP in turn, had failed its first big test, leaving the countries of the Union disoriented when
it comes to future actions in the international scene. Germany and France answer to this evolution with a project of
greater integration in the area of defence and (almost) with an alliance with Russia and China.
António Alvarenga /
José F. Ribeiro

17
 4. The EU Future
- Scenarios

António Alvarenga /
José F. Ribeiro

1. What if
everything went
well?

Good
Enlargement
Transatlantic
with
Axis
Consolidation
of the JHA

Reforms and
Economic
Growth
António Alvarenga /
José F. Ribeiro

Continuity

18
 What if everything went well?

Concessions/Ruptures Victories Political context

• Gradual reduction of CAP’s weight • Dynamism of the European defence industry
F • Structural Reforms towards growth and a • Effective European Defence identity within
transformation of the French Capitalism Model NATO’s nucleus
• International role in opposition to the US

• Maintenance of its role as the largest liquid • Greater international protagonism with an
G contributor towards the communitarian budget entry as a permanent member of the UN
• A deepening of Structural Reforms Security Council

• Accession to the eurozone • Proximity of the EU to the US

UK • Gradual reduction of the rebate

• Acceptance of the JHA (although with more • UK’s entry into Euro
NL efficiency in terms of controlling immigration • Reduction of the liquid contribution towards
and with some leverage for MS) the budget

António Alvarenga /
José F. Ribeiro

2. Two in One

Bad
Enlargement
and Great Core Nucleus
Difficulties in
JHA

Core Nucleus
António Alvarenga /
José F. Ribeiro

From the South and from the sphere of the ex-USSR

19
 3. Redesigning
Europe

Bad
Enlargement
The EU put
and Great
aside
Difficulties in
JHA

Crisis

António Alvarenga /
José F. Ribeiro
From the South and from the sphere of the ex-USSR

Atlantic Europe

Turkey s quick
Turkey’s
accession
Transatlantic
with a
Axis
Reinforcemen
t of the JHA

Reforms and
Economic
Growth
António Alvarenga /
José F. Ribeiro

Continuity / From the South and from the sphere of the ex-USSR

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 Reviewing
Ambitions

Good
Enlargement
Transatlantic
with
Axis
Consolidation
of the JHA

Core Nucleus

António Alvarenga /
José F. Ribeiro
Continuity

Welcome to Russia

Good
Enlargement
The EU put
with
aside
Consolidation
of the JHA

Reforms and
Economic
Growth
António Alvarenga /
José F. Ribeiro

Continuity

21
 Two by two

Bad
Enlargement
The EU put
and Great
aside
Difficulties in
JHA

Core Nucleus

António Alvarenga /
José F. Ribeiro
From the South and from the sphere of the ex-USSR

TREND- UND ZUKUNFTSMANAGEMENT

E
European Union
U i 2015
From a systemic view to scenarios

António Alvarenga - 18th May 2006

ant_alvarenga@yahoo.com

22